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Long-term Debt, Net | 6 Months Ended
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Jun. 30, 2012
Debt Disclosure [Abstract] |
Long-term debt, net | Long-term Debt, Net Long-term debt, net consisted of the following (in thousands):
| JUNE 30, |  | DECEMBER 31,
| 2012 |  | 2011
Senior secured term loan facility, interest rates of 2.56% and 2.63% at June 30, 2012 and December 31, 2011, respectively (1) (2) | $ | 1,007,850 |  |  | $ | 1,014,400 |
Senior secured pre-funded revolving credit facility, interest rate of 2.63% at December 31, 2011 (2) | — |  |  | 33,000 |
Mortgage loan, weighted average interest rate of 3.96% at June 30, 2012 (3) | 323,530 |  |  | — |
First mezzanine loan, interest rate of 9.00% at June 30, 2012 (3) | 87,465 |  |  | — |
Second mezzanine loan, interest rate of 11.25% at June 30, 2012 (3) | 87,520 |  |  | — |
Note payable, weighted average interest rate of 0.98% at December 31, 2011 (3) | — |  |  | 466,319 |
First mezzanine note, interest rate of 3.28% at December 31, 2011 (3) | — |  |  | 88,900 |
Second mezzanine note, interest rate of 3.53% at December 31, 2011 (3) | — |  |  | 123,190 |
Third mezzanine note, interest rate of 3.54% at December 31, 2011 (3) | — |  |  | 49,095 |
Fourth mezzanine note, interest rate of 4.53% at December 31, 2011 (3) | — |  |  | 48,113 |
Senior notes, interest rate of 10.00% at June 30, 2012 and December 31, 2011 (2) | 248,075 |  |  | 248,075 |
Other notes payable, uncollateralized, interest rates ranging from 0.73% to 7.00% and from 0.76% to 7.00% at June 30, 2012 and December 31, 2011, respectively (2) | 9,213 |  |  | 9,094 |
Sale-leaseback obligations (2) | 2,375 |  |  | 2,375 |
Capital lease obligations (2) | 2,382 |  |  | 2,520 |
Guaranteed debt, interest rate of 2.67% and 2.65% at June 30, 2012 and December 31, 2011, respectively (2) | 24,500 |  |  | 24,500 |
| 1,792,910 |  |  | 2,109,581 |
Less: current portion of long-term debt | (26,580 | ) |  | (332,905 | )
Less: guaranteed debt | (24,500 | ) |  | (24,500 | )
Less: debt discount | (4,620 | ) |  | (291 | )
Long-term debt, net | $ | 1,737,210 |  |  | $ | 1,751,885 |
________________
(1) | At December 31, 2011, $61.9 million of the Company’s outstanding senior secured term loan facility was at an interest rate of 4.50%.
(2) | Represents obligations of OSI.
(3) | Represents obligations of New PRP (as defined below) at June 30, 2012 and obligations of PRP at December 31, 2011.
Bloomin’ Brands is a holding company and conducts its operations through its subsidiaries, certain of which have incurred their own indebtedness as described below. On June 14, 2007, OSI entered into senior secured credit facilities with a syndicate of institutional lenders and financial institutions. These senior secured credit facilities provide for senior secured financing of up to $1.6 billion, consisting of a $1.3 billion term loan facility, a $150.0 million working capital revolving credit facility, including letter of credit and swing-line loan sub-facilities, and a $100.0 million pre-funded revolving credit facility that provides financing for capital expenditures only. The senior secured term loan facility matures June 14, 2014. At each rate adjustment, OSI has the option to select a Base Rate plus 125 basis points or a Eurocurrency Rate plus 225 basis points for the borrowings under this facility. The Base Rate option is the higher of the prime rate of Deutsche Bank AG New York Branch and the federal funds effective rate plus 0.5 of 1.0% (“Base Rate”) (3.25% at June 30, 2012 and December 31, 2011). The Eurocurrency Rate option is the 30, 60, 90 or 180-day Eurocurrency Rate (“Eurocurrency Rate”) (ranging from 0.31% to 0.81% and from 0.38% to 0.88% at June 30, 2012 and December 31, 2011, respectively). The Eurocurrency Rate may have a nine- or twelve-month interest period if agreed upon by the applicable lenders. With either the Base Rate or the Eurocurrency Rate, the interest rate is reduced by 25 basis points if the associated Moody’s Applicable Corporate Rating then most recently published is B1 or higher (the rating was Caa1 at June 30, 2012 and December 31, 2011). OSI is required to prepay outstanding term loans, subject to certain exceptions, with:
• | 50% of its “annual excess cash flow” (with step-downs to 25% and 0% based upon its rent-adjusted leverage ratio), as defined in the credit agreement and subject to certain exceptions;
• | 100% of its “annual minimum free cash flow,” as defined in the credit agreement, not to exceed $75.0 million for each fiscal year, if its rent-adjusted leverage ratio exceeds a certain minimum threshold;
• | 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.
Additionally, OSI is required, on an annual basis, to first, repay outstanding loans under the pre-funded revolving credit facility and second, fund a capital expenditure account to the extent amounts on deposit are less than $100.0 million, in both cases with 100% of OSI’s “annual true cash flow,” as defined in the credit agreement. In accordance with these requirements, OSI repaid its pre-funded revolving credit facility outstanding loan balance of $33.0 million and funded $37.6 million to its capital expenditure account using its “annual true cash flow” in April 2012. OSI’s senior secured credit facilities require scheduled quarterly payments on the term loans equal to 0.25% of the original principal amount of the term loans for the first six years and three quarters following June 14, 2007. These payments are reduced by the application of any prepayments, and any remaining balance will be paid at maturity. The outstanding balance on the term loans was $1.0 billion at June 30, 2012 and December 31, 2011. OSI has classified $13.1 million of its term loans as current at June 30, 2012 and December 31, 2011 due to its required quarterly payments and the results of its projected and actual covenant calculations, which indicate the additional term loan prepayments, as described above, will not be required. The amount of outstanding term loans required to be prepaid in accordance with OSI’s debt covenants may vary based on year-end results. Proceeds of loans and letters of credit under OSI’s $150.0 million working capital revolving credit facility, which matures June 14, 2013, provide financing for working capital and general corporate purposes and, subject to a rent-adjusted leverage condition, for capital expenditures for new restaurant growth. This revolving credit facility bears interest at rates ranging from 100 to 150 basis points over the Base Rate or 200 to 250 basis points over the Eurocurrency Rate. There were no loans outstanding under the revolving credit facility at June 30, 2012 and December 31, 2011; however, $65.6 million and $67.6 million, respectively, of the credit facility was committed for the issuance of letters of credit and not available for borrowing. OSI’s total outstanding letters of credit issued under its working capital revolving credit facility may not exceed $75.0 million. Proceeds of loans under OSI’s $100.0 million pre-funded revolving credit facility, which expires June 14, 2013, are available to provide financing for capital expenditures, if the capital expenditure account described above has a zero balance. There were no loans outstanding under OSI’s pre-funded revolving credit facility as of June 30, 2012 and $33.0 million was outstanding under this facility as of December 31, 2011. This borrowing was recorded in “Current portion of long-term debt” in the Company’s Consolidated Balance Sheet, as OSI is required to repay any outstanding borrowings in April following each fiscal year using its “annual true cash flow,” as defined in the credit agreement. Subsequent to the end of the second quarter of 2012, OSI borrowed $25.0 million from its pre-funded revolving credit facility. At June 30, 2012 and December 31, 2011, OSI was in compliance with its debt covenants. See the Company’s audited financial statements and notes thereto for the year ended December 31, 2011 included in the Company’s Registration Statement for further information about OSI’s debt covenant requirements. In March 2012, the Company refinanced the debt at PRP. Until that time, PRP had first mortgage and mezzanine notes (together, the commercial mortgage-backed securities loan, or the “CMBS Loan”) totaling $790.0 million, which were entered into on June 14, 2007. As part of the CMBS Loan, German American Capital Corporation and Bank of America, N.A. et al (the “Lenders”) had a security interest in the acquired real estate and related improvements, and direct and indirect equity interests of certain of the Company’s subsidiaries. The CMBS Loan comprised a note payable and four mezzanine notes. All notes bore interest at the one-month LIBOR which was 0.28% at December 31, 2011, plus an applicable spread which ranged from 0.51% to 4.25%. Interest-only payments were made on the ninth calendar day of each month and interest accrued beginning on the fifteenth calendar day of the preceding month. Effective March 27, 2012, New Private Restaurant Properties, LLC and two of the Company’s other indirect wholly-owned subsidiaries (collectively, “New PRP”) entered into a new commercial mortgage-backed securities loan (the “2012 CMBS Loan”) with German American Capital Corporation and Bank of America, N.A. The 2012 CMBS Loan totaled $500.0 million at origination and was comprised of a first mortgage loan in the amount of $324.8 million, collateralized by 261 of the Company’s properties, and two mezzanine loans totaling $175.2 million. The loans have a maturity date of April 10, 2017. The first mortgage loan has five fixed rate components and a floating rate component. The fixed rate components bear interest at rates ranging from 2.37% to 6.81% per annum. The floating rate component bears interest at a rate per annum equal to the 30-day LIBOR rate (with a floor of 1%) plus 2.37%. The first mezzanine loan bears interest at a rate of 9.0% per annum, and the second mezzanine loan bears interest at a rate of 11.25% per annum. The proceeds from the 2012 CMBS Loan, together with the proceeds from the Sale-Leaseback Transaction and excess cash held in PRP, were used to repay PRP’s existing CMBS Loan. As a result of the 2012 CMBS Loan refinancing, the net amount repaid along with scheduled maturities within one year, $281.3 million was classified as current at December 31, 2011. During the first quarter of 2012, the Company recorded a $2.9 million loss related to the extinguishment in the line item, “Loss on extinguishment of debt” in its Consolidated Statement of Operations and Comprehensive Income. The Company deferred $7.6 million of financing costs incurred to complete this transaction of which $2.2 million had been capitalized as of December 31, 2011 and the remainder was capitalized in the first quarter of 2012. These deferred financing costs are included in the line item, “Other assets, net” in its Consolidated Balance Sheets. At June 30, 2012, the outstanding balance, excluding the debt discount, on the 2012 CMBS Loan was $498.5 million. Historically, the Company used an interest rate cap with a notional amount of $775.7 million as a method to limit the volatility of PRP’s variable-rate CMBS Loan. During the first quarter of 2012, this interest rate cap was terminated. In connection with the 2012 CMBS Loan refinancing, New PRP entered into a replacement interest rate cap instrument (“Rate Cap”) effective March 27, 2012 with a notional amount of $48.7 million as a method to limit the volatility of the floating rate component of the first mortgage loan. Under the Rate Cap, if the 30-day LIBOR market rate exceeds 7.0% per annum, the counterparty must pay to New PRP such excess on the notional amount of the floating rate component. Should it be necessary, New PRP would record any mark-to-market changes in the fair value of its derivative instrument into earnings in the period of change. The Rate Cap has a term of approximately two years from the closing of the 2012 CMBS Loan. Upon the expiration or termination of the Rate Cap or the downgrade of the credit ratings of the counterparty under the Rate Cap’s specified thresholds, New PRP is required to replace the Rate Cap with a replacement interest rate cap in a notional amount equal to the outstanding principal balance (if any) of the floating rate component. On July 25, 2012, OSI announced the commencement of a tender offer for all of its outstanding 10% senior notes due 2015, and on August 13, 2012, the remaining senior notes not tendered were called for redemption at 102.5% of the principal amount outstanding plus accrued interest, up to but not including such date of redemption (see Note 14).

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- Definition The entire disclosure for long-term debt. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 22 -Article 5 + Details
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