Good morning. My name is Keisha and I will be your conference operator today. At this time, I would like to welcome everyone to the Bloomin' Brands Q4 2012 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions). Thank you. Mr. Mark Seymour, Vice President of Investor Relations, you may begin your conference.

Thanks, Keisha. Good morning, everyone, and thank you for joining us. With me on today's call are Liz Smith, our Chairman and CEO; and Dave Deno, Executive Vice President and CFO. By now, you should have access to our fourth quarter 2012 press release. It can also be found on our website at www.bloominbrands.com in the Investors section. Throughout this conference call, we will be presenting non-GAAP financial measures including adjusted income from operations, adjusted net income and adjusted diluted earnings per share. This information is not calculated in accordance with GAAP and maybe calculated differently than other companies similarly titled non-GAAP information. Quantitative reconciliations of our non-GAAP financial measures to their most directly comparable GAAP measures appear in yesterday's earnings release and on our website as previously described. Before we begin our formal remarks, I'd like to remind everyone that part of our discussion today will include forward-looking statements, including our discussion of growth strategies and financial guidance. Such forward-looking statements are not guarantees of future performance, and therefore you should not put undue reliance on them. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from our forward-looking statements. Some of these risks are mentioned in yesterday's release, others are discussed in the final prospectus filed on August 8, 2012 for our initial public offering which is available at www.sec.gov. During today's call, we'll provide a brief assessment of the business, including performance for the fourth quarter and fiscal 2012, an overview of key highlights and discussion regarding how we performed against some of our key strategic objectives, and finally guidance for fiscal year 2013. Once we've completed these remarks, we'll open up the call for questions. With that, I'd now like to turn the call over to Liz Smith. Liz.

Thanks, Mark, and welcome to everyone listening today. I'm pleased to report another very strong quarter and exceptional year for Bloomin' Brands. As you can see from yesterday's earnings release, our fourth quarter and fiscal 2012 results show continued strength and improvements in many of our key metrics. I'll take a moment to discuss some of the highlights for the full year and Dave will take you through the fourth quarter details. Our fiscal year 2012 highlights included; an increase in full year adjusted diluted earnings per share to $0.99 compared to $0.81 for 2011. GAAP diluted earnings per share for the year was $0.44 versus $0.94 for 2011. An increase in adjusted net income to 114 million compared to 86.5 million last year. GAAP net income for the year was 50 million versus 100 million for 2011. Combined comparable restaurant sales growth at our company-owned domestic core concepts were 3.7 and importantly traffic was up 2.7 for the full year. We continued to perform well above the industry average which according to Knapp Track saw same-store sales up 0.6% in 2012 and traffic down 1.5%. Finally, an increase in total revenues for the full year 2012 of 3.8% to approximately 4 billion compared to approximately 3.8 billion for 2011. Excluding the sale of Japan in 2011, the increase in total revenues would have been 4.5%. Before we share details on our performance by brand, I think it's helpful as a backdrop to begin with our thoughts surrounding the macro environment, consumer sentiment and how we view the casual dining industry. So let's take it in that order. First, with respect to the macro environment and consumer sentiment, there continues to be both positive and negative signs. While we've put the fiscal cliff somewhat behind us, there are still some…

Thank you, Liz, and good morning everyone. I'll first take a few minutes to walk through our sales and profit performance for the quarter. I'll then dive into our guidance for 2013. Please remember that when I refer to net income and EPS, I will be referring to adjusted numbers that exclude certain costs, most significantly the transaction-related costs such as those related to our IPO and debt modification refinancing. Please see yesterday's press release for reconciliations between our adjusted metric and their most directly comparable GAAP measures. Liz already went through comp by brand, so from a consolidated standpoint, blended domestic comparable restaurant sales at our core concepts grew by 3.5% during the fourth quarter, increases that included a healthy 2.2% rise in traffic. This lift was driven by continued innovation in our menu, service and operations, renovations at our additional Outback locations and a pickup from this year's holiday shift. This was offset by Hurricane Sandy and the Nor'easter that swept through early in the fourth quarter. Total revenues increased to 998 million in Q4 of 2012 versus 956 million in the fourth quarter of 2011, driven primarily by the comp growth previously mentioned in new restaurant developments. Restaurant operating margins as a percent of restaurant sales for Q4 were mostly flat at 15.4% this year versus 15.6% a year ago. So let's break that down into its component parts. First, cost of sales increased to 32.4% of restaurant sales for the quarter from 32.1% of restaurant sales for the same quarter in 2011. The increase was driven primarily by increases in beef and other commodities as well as changes in our product mix. This increase was also mostly offset by productivity initiatives and modest menu price increases. On the labor side, we had some good news as…

(Operator Instructions). Our first question comes from the line of Jeff Farmer with Wells Fargo.

You have a broad spectrum of concepts and price points which provides you probably one of the better reads on how the consumer is reacting to things that you mentioned, favorable tax, late tax refunds, power, gas prices, et cetera? So, as you watched your results come in over the last four or five weeks, what are some of the takeaways you can share with us in terms of how consumer spending habits are changing in this environment? Are you seeing sort of a weaker mid-week sales, fewer appetizers, fewer desserts? How has it manifested itself in your top line?

So, as Dave talked about and the indices indicated, it has been a choppy start to the year for the whole casual dining industry. But I would say honestly between kind of timing of weather and shift, that there's no discernable differences or trends that have been emerging in terms of weekday versus weekend partners that we would call out that indicate that there were different than year ago. It's just been an overall, like he said, choppy and tough start to the year for the industry.

Jeff, I'd just like to add. As you know, we provided annual guidance, we decided to provide quarterly guidance this time around for Q1 and we believe that we've taken into effect the factors that Liz just mentioned. So, you can use that as your guidance for Q1.

Just a final question and I don't think you'll be able to give me too much detail, but Walmart and some other restaurant companies have alluded to the fact that once you got to really February 15, February 16, you did begin to see some bounce back, be it even small, but can you sort of confirm or deny that that consumers did look like get a little bit more relaxed with the spending again once we got passed them in February?

Yeah. I mean, again, as you said, Jeff, we don't typically comment on quarterly -- we did, but we definitely don't comment on weekly or daily, because I just don't think that it helps provide any perspective or trend. I think what we are comfortable reiterating, as Dave said, is that calendar year-to-date, this outperformance versus Knapp that we've seen in comp sales and in traffic historically has widened for us. And so I think we're comfortable giving that perspective. And the Q1 perspective of zero to one positive on both comps and traffic and that of course takes into account what we've seen year-to-date.

Okay. Thank you.

Our next question comes from the line (inaudible) with Deutsche Bank.

One more on that topic. If you look at the individual brands, could you say if Outback continues to outperform Bonefish and Carrabba's here in the first quarter, despite the choppiness we've seen broadly?

Yeah, it's Dave. I think we don't really get into guidance in the quarter by brand, so we'll stick with the overall guidance we've given you. And you've seen our Q4 numbers for the various brands and what we've got there. So, we're very pleased with Q4 results and we're very pleased with where we stand relative to the industry in Q1.

Okay. And could I ask just a broader question on Outback, if you guys could talk a bit more about sort of the impact of the lunch rollout? First of all, kind of how's that going in here too on the Sunday lunch? Are you still seeing growth and improvement in profitability on Sunday? And then with Saturday kind of rolling out midyear in 2012, can you talk about the contribution from lunch at Outback in the 2012 comps and sort of how much of that do you think carries forward into 2013?

Hi. We don't provide lunch comp guidance. We've been very pleased with the Outback lunch rollouts. We've continued to move across the system on that. We've seen good sales performance. We've seen the sales build over time. Everything that we've seen is very, very good. I don't know, Liz, you want to add anything else to that.

Yeah. [Jason], it's been a measured roll. As you know for Outback 2011, we rolled Sunday and pretty much 2012, we rolled Saturday. And now we're taking that staged approach to weekday rollout. And we ended the year on weekday rollout at about 25% across the system. So that's going to be a multiyear rollout on weekday lunch. So, again, happy with what we saw in 2011 on Sunday, happy with what we saw in 2012 on Saturday, stage rollout on weekday. It's just been performing as we'd hoped and we're very encouraged by it.

Okay. Thanks for the color.

John Glass, Morgan Stanley.

Hi, John. John Glass - Morgan Stanley & Co.: Good morning. I wanted to ask about operating margin expansion in '13 and also maybe just for a second on the fourth quarter, I think there just may be a mismatch of expectations given that the ongoing savings produces 100 to 120 basis points of benefit and obviously there's been more offsets in the current business. So, one, can you talk about what the operating margin expansion goal is for '13? You said it was going to be less than '12. And what is some of the offsets in there, because we would have assumed that all else equals a positive comp of 2 to 3 either to kind of hold operating margins, ex the savings and the savings that kind of build on top of that. But it doesn't quite seem like that dynamic is quite occurring?

Yeah. We're going to see probably 40 to 50 basis points of operating margin, John, in 2013. I think we'll see commodity price increases offset by productivity. We're going to see, obviously, labor productivity which is the big part for us. And one of the labor productivity things that we're doing is we're looking at our front-of-house labor scheduling and some of our tableside POS devices we're ordering in payment. So we've got some labor scheduling opportunity in our restaurants and we've got some POS device opportunities. So, I think we're going to see between 40 and 50 basis points. And similar to last year when we had the initial goal of $50 million, we're going to try and beat that to get even more. I think we have some plans in place to try and accomplish that. But I think again you'll see 40 to 50 basis points expansion in operating margin. John Glass - Morgan Stanley & Co.: You may have said this before but I don't recall, what is the time horizon to achieve this 300 basis points? Is 50 basis points here the right pace or this is sort of a six-year journey or is it -- you expect accelerated margin benefits in the out years?

No, I think John, first of all, we're really pleased about the 80 basis points. I mean that's -- this past year, and that's a big pay down on the 300 basis points target. So, I would expect in another three or four more years, John, as we go through this. And we've got to make sure as we do this that we pace in sequence what we're doing in the restaurants to make sure we keep our operations strong, because we have some things that we can introduce in the restaurants to really help expand margins, but a lot of other restaurant companies already do. It's just a matter of pacing and sequencing. So I'd say another three to four years. John Glass - Morgan Stanley & Co.: Just one last question, maybe modeling oriented. When you guide units for '12 and for '13, are you talking about the gross number and there was a net number of closures and if there is, if the 45 to 55 is gross, what do you think the net number is?

We've always -- from the IP road show on, we've always guided to a gross number. In each year we have a handful of closures, nothing major. So 45 to 55 is a gross number and we'll continue to guide against that. John Glass - Morgan Stanley & Co.: But so just we can understand the modeling, that was at – what's the right rate of closures roughly historically?

3 to 5. John Glass - Morgan Stanley & Co.: Got it, okay. Thank you.

Yes.

Joe Buckley with BofA Merrill Lynch.

Good morning.

Hi, Joe.

Just a couple of questions on Carrabba's. First, your outgoing was down with some pretty terrible numbers. This morning Carrabba's comp slightly negative in the fourth quarter. Is there something going on in the Italian category do you think that's got (inaudible) to the category? And then secondly, does the performance at Carrabba's, the slowdown in Carrabba's, does it influence your thoughts on how quickly you accelerate the expansion of the brand?

Sure, Joe. Let me take that in your two-part. So the Italian category, as you know, is $15 billion and our share of it is 4.5%. And Olive Garden is obviously a big share at I think probably 23%, 24%. So their performance is going to have an outside impact on the Italian segment, if you will. We've seen nothing structurally in the Italian segment to suggest that it is challenged. And if you actually look at the quarters, you go back a couple of quarters, it was one of pizza and Italian and steak were one of the top performing ones, right? So we don't see any signs structurally in the consumer to suggest that there is an Italian market situation. It's $15 billion. There's a lot of independents. We have a four, five share. We think it's an excellent share gaining opportunity for Carrabba's. We were down 0.4 I think as Dave said when you adjust it for the impact of the trading day, we were actually positive. That being said, I think I went through some detail on how we're even further strengthening the Carrabba's experience. But keep in mind, Carrabba's units are very profitable and very successful. I mean, our average AUV last year at Carrabba's was $3 million. And so the economics of that box are attractive and we're going to continue the expansion of that. We think we have industry-leading quality, industry-leading service and a very healthy proposition in the box. And so the fourth quarter certainly doesn't diminish our belief or expectations that Carrabba's is a brand that can go well beyond 240 units.

Okay. Maybe just a follow-up on Carrabba's. Can you tell us where Carrabba's is on lunch weekday presence in the daypart?

Sure. So Carrabba's is fully rolled out as you know for Saturday and Sunday. For weekday, we ended the year in 2012 with 9% of the fleet serving weekday lunch versus 25% for Outback that I quoted earlier. And again, this is a measured multiyear rollout across these businesses because we're introducing a lot of innovation where we have a lot of things going on. We want to make sure that lunch goes in without missing a beat and that's kind of what people expect from Carrabba's. So, we ended the year at 9% in 2012.

Okay. Thank you.

Thanks, Joe.

(inaudible)

First off, wanted to just follow-up on John Glass's question and I was hoping you could kind of talk about how we should think about leverage versus deleverage in light of lower same-store sales in the first quarter and what I'd consider to be somewhat limited visibility thereafter. If you exclude the discrete cost cuts, what kind of a comp for your business you need to lever your rent and labor and other fixed costs at the restaurant level?

So I think we're comfortable at 2%, [Michael]. And I think we have good visibility on sales going forward with the programs that Liz talked about being our remodels, be it our new menu innovations, occasion expansions, those kind of things. So I think we feel good about that. And so I think 2% can certainly help us get there. And then when we layer in the productivity opportunities that we talked about earlier, I think we have a pretty good opportunity for operating margin expansion during the year.

Then on a separate topic, Bonefish unit openings missed your prior expectations. Can you talk about what drove that? How we should think about it going forward, especially in light of -- it seems like a little bit lower U.S. unit guidance for 2013?

So, Michael, on the Bonefish front, we continue to be very pleased with our new unit openings on Bonefish. They're performing very well. Frankly, it's a supply issue versus the demand issue. The demand for Bonefish Grill is vibrant. It has proven itself in geographies all across the country. It's been a pipeline fill issue. We are opening them up as quickly as we can as Bonefish quality sites become available. So there [are no] diminishing in our prospects for Bonefish Grill. It's been a supply issue versus the demand issue. We feel really good about all the investments we've put into our development team under Mike Nolan and so we have a lot of faith in the go-forward, but frankly we'll put up Bonefish Grills as fast as we can because the demand is there.

Very encouraging. And then one last one. Carrabba's changes that you talked about in the prepared remarks, they seem pretty meaningful and it almost feels like you perceive some element of it is broken even though it's consistently beating Knapp and taking share. So I guess my question is why are you making such significant changes at that brand?

Our philosophy was we've talked to you guys a lot is relentless innovation, continual innovation. So we're not going to change what is actually core and successful at Carrabba's. And you're right, and we indicated, we have industry-leading rankings across service, across food and across everything. So, we're not going to mess with the secret sauce, no pun intended, that has made Carrabba's so successful. However, we do have an opportunity to continue to broaden the menu that allows you to broaden the occasion, and we see that. We've successfully done that with $10 pasta, we've Cucina casual Allie, but we can go further. We're always talking with our consumers and they would like some broader, lighter, different menu items, be able to enjoy Carrabba's in broader and different ways. We also, on the Carrabba's front, we really needed to upgrade the assets. I mean we've talked about the road on renovation on Outback, well the Carrabba's needs to have the same road. And when you look at the ambiance, it is really in need of contemporization and updating, that's what the new remodel does. We're really pleased with the reaction that we're seeing to that. So, it kind of goes back to the Bloomin' Brands playbook is Carrabba's is a healthy, strong brand, as I said, but these changes are going to make it stronger. We're not talking about messing with the Carrabba's essence.

Thank you very much.

John Ivankoe, JPMorgan

Hi, John.

Looking at the Outback comp in particular, there have been seem to be some discussion at most if not all of the outperformance relative to your peers because of the additional dayparts that you put in, I guess, incremental year-over-year whether it's Saturday lunch or weekday lunch. So, I just wanted to get your comments on just kind of how your existing daypart business is doing relative to your new daypart business?

Hi, John. We are seeing growth in all aspects of our business. So we've seen growth out of remodels, we're seeing growth out of lunch and we're seeing some very impactful menu items and marketing ideas at Outback. So when we look at -- Liz talked about the Bloomin' Brands playbook. Between lunch, remodel, our marketing and innovation and everything else has really come together to continue to drive that brand forward. We don't get in the habit of breaking apart comps by daypart and things like that, but I think the pieces that are coming together for Outback that are working so well, that we've talked about, which is the remodel piece, the menu innovation and marketing and the daypart expansion.

So, is it fair to say therefore that there's been little to no cannibalization of lunch to the dinner business?

Yeah, that is fair to say. It's a very different occasion, as we've talked about in the past, and we haven't seen that.

And just one more on this topic, if I may. Thinking about the margin contribution from some of these new businesses beyond the training around the new menus on lunch, I guess, Saturday and midweek, I mean is it all-in a positive margin business as your leveraging the existing fixed costs in the business or not necessarily as the average ticket is lower and the productivity is lower during those dayparts…?

It will help our -- especially our operating income margins, John. We do have some training and things at the restaurant level that we have to do to do this, but it will increase our overall profitability and help increase our overall operating margins. And we will have some investments in training and labor to make this happen.

Okay. And just – this is a housekeeping item. The shares outstanding, I think, in the fourth quarter were 125.8, how do we get to 128 for the year in 2013? Why is this such a jump from the fourth quarter which I thought was kind of all-in post IPO to 128 and of course the question then becomes -- is that type of a couple million share a year increase going to happen longer term, each year, unless you buy back stock?

Hi, John. This is Mark. Actually, that's just a function of sort of the weighted average calculation on your dilution for the most part in terms of the IPO happened in August of 2012. So you've got that impact. And then you just have sort of normal options and whatnot over the course of the year.

Okay, but you do appreciate my question. I mean it's jumping quite a lot from the fourth quarter of '12 into 2013.

It's the weighted average that Mark talked about, but also John I want to make sure that you know that we don't see that kind of expansion going forward. So, it's the math behind it and we'll be happy to take you through it in some of the modeling we have.

Okay. Thank you.

Sharon Zackfia, William Blair.

Hi. I guess one quick one. I think you mentioned that Bonefish's comp bounced back after an LTO that didn't quite work. Can you give us some more color around that? What was your LTO? What do you think (inaudible) about it? Where were comps after that? And then secondly, David, you said something was moving -- I think $4 million was moving from the second to the first quarter in some service sense. I just missed what that was?

Hi, Sharon. First I want to clarify it was Carrabba's that we talked about the LTO being disappointing and not Bonefish.

Sorry.

No problem. And the LTO was around new items in our Cucina casual Allie line and it centered around two [pinnies] which wasn't moving the needle and probably is newsworthy as we could. We transitioned that to our Q4 holiday messaging and that started performing very strongly for us. As you know on Carrabba's, we go out with a very strong Q4 item. Last year it was Treasured Recipes highlighting chicken, (inaudible) ravioli and sirloin. So we transitioned out of an offer on [pinnies] into our stronger Q4 programming around the holidays. I don't want to get into the daily uptick or anything like that, but we did want to provide some color that when we rotated off of that and we did that and back to our more traditional Q4, we did see it strengthening through the quarter as we exited. I think your second question was just -- something that Dave mentioned. We have our Annual Partners Conference every year and that cost $4 million for us. Last year, it was in Q2 of 2012. This year it's in Q1 in March and so the $4 million expense falls in Q1 of this year.

Okay. Thank you.

Marc Riddick, Williams Capital

Good morning. I was wondering if you could share some thoughts as far as the promotional cadence that you see going forward for the year, both in messaging and LTOs. I was wondering if any of the overall general macroeconomic consumer weakness that we've seen in, particularly behind overall traffic both restaurant and retail, if that had any impact on a preexisting plan just far as marketing, messaging, things of that nature?

So, we typically do five to seven LTOs a year across our core businesses and that supported complete 360 in-store table social media, advertising, the full complement around that. And it is paced throughout the year. This year, we've talked a lot about the consumer sentiment, but as we talk -- this has been a challenging environment for many years where superior offerings for affordable prices had been absolutely necessarily. So we haven't had to shift our plans or change our perspective given the start to the year, but rather we feel very good about that relentless innovation, continuous innovation, what we have coming out that we think leverages what's special about our restaurants, our cooking techniques and our platforms. And of course that will be done and has to be done at an affordable, attractive pricing. So, no, we haven't gone back given the start to the industry and had to revamp, it's that relentless focus that I talked about in my prepared remarks, that relentless focus on making it the strongest, superior brand equation out there.

Okay, excellent. And I was wondering if – in a ways, it's kind of a two-part combo question. Compared to last year, would you say that there's any major differences shifting or changing this far as how you're getting you're messaging out there? Do you foresee any greater increases on TV versus radio versus Internet, that type of thing, or if that mix is about the same? And then I guess sort of following up on that, would you say that there is – what do you see as far as getting bang for your buck this year versus the last? And obviously last year, you were dealing with the [quadrennial] event and that might have had more of an impact on these sort of marketing pricing than what (inaudible) this year? Thank you.

Sure. So, we have – back to the comment of the strength of our marketing programs is exactly what you said is that we attack it from many different levers. So we don't just have a TV, we always have a TV component. We have a heavy digital component and an in-store component, a managing partner component. That formula has worked for us and it remains in place with the messaging and the platforms varying to bring on the new. We continue to enjoy a lot of success in our digital outreach and our social media. You're going to continue to see innovation for us in that area. And around the Outback brand, that's something that's done very well for us. So, that's probably up a little bit versus year ago and we'll continue to trend up. But the whole basket of support will continue to be across that. Can you repeat the second piece?

The other part was sort of bang for the buck, I guess, as far as marketing spend this year versus last?

There is -- absent the media market, there was inflation this year as well as last year. So we always do innovative things. I think you guys know we built a pretty hardcore analytic team and they're constantly re-cranking the ROIs and we're nimble with our money and moving it around to capture those ROIs. So, I'm really pleased with how we attack our marketing efficiency and the bang for the buck. For competitive reasons, I kind of want to stop there on any changes that we would be doing.

I've got my (inaudible) dinner for two email. I'm certainly looking forward to that. Thank you very much.

Thank you. There's out social digital media at work for you.

There are no further questions. Ms. Smith, are there any closing remarks.

Well, we thank everybody for joining us. It's been a very productive and strong close to 2012 and we really look forward to 2013 and look forward to speaking to you all on the next call. Thanks for joining us.

This does conclude today's conference call. Thanks for your participation. You may now disconnect.