Outback Steakhouse, Inc. and Affiliates
Notes to Consolidated Financial Statements



17. Pro Forma Earnings and Earnings Per Share

   As discussed in Note 8, no income tax expense has been provided in the Company's historical consolidated financial statements on income attributable to Tedesco as discussed in Note 10. Pro forma net income includes an adjustment to increase the provision for income taxes to reflect the anticipated tax as if Tedesco had not elected to be taxed under Subchapter S of the Internal Revenue Code.

   The following table represents the computation of basic and diluted earnings per common share as required by SFAS No. 128 "Earnings Per Share" (in thousands, except per share data).


                                                                  Years Ended December 31,
                                                                 2000        1999      1998  
Pro forma (unaudited) net income                               $141,130    $122,398   $94,683
Basic weighted average number of common shares outstanding       77,470      77,089    75,702
Basic earnings per common share                                $   1.82    $   1.59   $  1.25
Effect of dilutive stock options                                  1,762       2,108     1,782
Diluted weighted average number of common shares outstanding     79,232      79,197    77,484
Diluted earnings per common share                              $   1.78    $   1.55   $  1.22

   Diluted earnings per common share excludes antidilutive stock options of approximately 2,493,000, 844,400 and 727,500 during 2000, 1999, and 1998 respectively.