SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended November 24, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ....................... to ....................
Commission File Number 1-13666
DARDEN RESTAURANTS, INC.
(Exact name of registrant as specified in its charter)
Florida 59-3305930
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5900 Lake Ellenor Drive, 32809
Orlando, Florida (Zip Code)
(Address of principal executive offices)
407-245-4000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
_X_ Yes ___ No
Number of shares of common stock outstanding as of December 12, 1996:
159,907,116 (excluding 3,509,869 shares held in the Treasury).
<PAGE>
DARDEN RESTAURANTS, INC.
TABLE OF CONTENTS
Page
Part I - Financial Information
Item 1. Financial Statements
Consolidated Statements of Earnings (Loss) 2
Consolidated Balance Sheets 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Part II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
Index to Exhibits 14
<PAGE>
PART I-FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
DARDEN RESTAURANTS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
(In Thousands, Except per Share Data)
(Unaudited)
<CAPTION>
Thirteen Weeks Ended
November 24, November 26,
1996 1995
- ------------------------------------------------------------------------------
<S> <C> <C>
Sales ...................................... $ 748,757 $ 731,184
Costs and Expenses:
Cost of sales:
Food and beverages ....................... 258,105 240,964
Restaurant labor ......................... 252,497 224,683
Restaurant expenses ...................... 119,966 111,669
--------- ---------
Total Cost of Sales ................ $ 630,568 $ 577,316
Selling, general and administrative......... 93,315 89,558
Depreciation and amortization .............. 35,070 32,862
Interest, net 5,623 5,448
--------- ---------
Total Costs and Expenses............. $ 764,576 $ 705,184
--------- ---------
Earnings (Loss) before Income Taxes ........ (15,819) 26,000
Income Taxes ............................... 4,650 (9,672)
--------- ---------
Net Earnings (Loss) ........................ $ (11,169) $ 16,328
========= =========
Earnings (Loss) per Share .................. $ (0.07) $ 0.10
========= =========
Average Number of Common
Shares Outstanding ....................... 157,500 158,900
========= =========
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
DARDEN RESTAURANTS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In Thousands, Except per Share Data)
(Unaudited)
<CAPTION>
Twenty-Six Weeks Ended
November 24, 1996 November 26, 1995
- ----------------------------------------------------------------------
<S> <C> <C>
Sales....................... $1,554,312 $1,567,205
Costs and Expenses:
Cost of sales:
Food and beverages........ 525,797 518,314
Restaurant labor.......... 499,208 470,639
Restaurant expenses....... 243,183 236,105
---------- ----------
Total Cost of Sales.... $1,268,188 $1,225,058
Selling, general and
administrative............ 192,391 185,207
Depreciation and amortization 70,103 68,122
Interest, net............... 10,556 10,814
Restructuring............... 75,000
---------- ----------
Total Costs and Expenses $1,541,238 $1,564,201
---------- ----------
Earnings before Income Taxes 13,074 3,004
Income Taxes............... (3,770) 1,261
---------- ----------
Net Earnings............... $ 9,304 $ 4,265
========== ==========
Earnings per Share.......... $ 0.06 $ 0.03
========== ==========
Average Number of Common
Shares Outstanding........ 157,600 158,700
========== =========
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
DARDEN RESTAURANTS, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands)
<CAPTION>
(Unaudited)
ASSETS November 24, 1996 May 26, 1996
- -----------------------------------------------------------------------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents .................... $ 20,607 $ 30,343
Receivables ............................... 28,899 24,772
Prepaid Income Taxes ...................... 11,225
Inventories ............................... 139,902 120,725
Net assets held for disposal .............. 42,087 31,762
Prepaid expenses and other current assets . 17,940 17,298
Deferred income taxes ..................... 55,638 63,080
---------- ----------
Total Current Assets .................. $ 316,298 $ 287,980
Land, Buildings and Equipment ................ 1,692,163 1,702,861
Other Assets ................................. 95,317 97,663
---------- ----------
Total Assets .......................... $2,103,778 $2,088,504
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable ........................... $ 129,658 $ 128,196
Short-term debt ............................ 90,300 72,600
Current portion of long-term debt .......... 4 54
Accrued payroll ............................ 53,279 53,677
Accrued income taxes........................ 12,522
Other accrued taxes ........................ 21,950 18,921
Other current liabilities .................. 153,026 159,336
---------- ----------
Total Current Liabilities ............. $ 448,217 $ 445,306
Long-term Debt ............................... 314,727 301,151
Deferred Income Taxes ........................ 101,697 101,109
Other Liabilities ............................ 18,482 18,301
---------- ----------
Total Liabilities ..................... $ 883,123 $ 865,867
---------- ----------
Stockholders' Equity:
Common stock and surplus .................. $1,267,536 $1,266,212
Retained earnings ......................... 64,728 61,708
Treasury stock ............................ (34,229) (25,037)
Cumulative foreign currency adjustment..... (8,543) (10,351)
Unearned compensation ..................... (68,837) (69,895)
---------- ----------
Total Stockholders' Equity ............ $1,220,655 $1,222,637
---------- ----------
Total Liabilities and Stockholders' Equity.... $2,103,778 $2,088,504
========== ==========
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
DARDEN RESTAURANTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
<CAPTION>
Thirteen Weeks Ended
November 24, November 26,
1996 1995
- ----------------------------------------------------------------------------
<S> <C> <C>
Cash Flows--Operating Activities
Net earnings (loss) ............................. $(11,169) $ 16,328
Adjustments to reconcile net earnings (loss) to
cash flow:
Depreciation and amortization ................. 35,070 32,862
Amortization of unearned compensation
and loan costs .............................. 918 375
Change in current assets and liabilities....... (51,236) (66,884)
Change in other liabilities ................... (184) 1,150
Loss on disposal of land, buildings and
equipment.................................... 1,765 1,408
Deferred income taxes ......................... 5,683 8,110
Other, net..................................... (152) 854
-------- --------
Net Cash Provided by Operating Activities. $(19,305) $ (5,797)
-------- --------
Cash Flows--Investment Activities
Purchases of land, buildings and equipment...... (44,448) (46,518)
Purchases of intangibles ....................... (449) (221)
Increase in other assets ....................... 1,171 (396)
Proceeds from disposal of land,
buildings and equipment (including net assets
held for disposal)............................ 10,722 1,885
-------- --------
Net Cash Used by Investment Activities.... $(33,004) $(45,250)
-------- --------
Cash Flows--Financing Activities
Proceeds from issuance of common stock ......... 114 2,734
Income tax benefit credited to equity........... 21
Dividends paid.................................. (6,284) (6,332)
Purchases of treasury stock .................... (6,286)
ESOP note receivable repayment.................. 600
Increase in short-term debt .................... 56,600 31,700
Repayment of long-term debt .................... (3,451) (13)
-------- --------
Net Cash Provided by Financing Activities. $ 41,314 $ 28,089
-------- --------
Decrease in Cash and Cash Equivalents............... (10,995) (22,958)
Cash and Cash Equivalents -
Beginning of Period............................... 31,602 39,949
-------- --------
Cash and Cash Equivalents - End of Period .......... $ 20,607 $ 16,991
======== ========
Cash Flow from Changes in Current Assets
and Liabilities:
Receivables .................................... 464 (1,170)
Prepaid income taxes ........................... (11,225) (4,284)
Inventories .................................... (20,377) (6,826)
Net assets held for disposal ................... 2,181 (2,023)
Prepaid expenses and other current assets....... (1,270) 9,311
Accounts payable ............................... (9,492) (28,773)
Accrued payroll ................................ 2,516 (1,261)
Accrued income taxes ........................... (10,443) (4,377)
Other accrued taxes ............................ (423) (2,433)
Other current liabilities....................... (3,167) (25,048)
-------- -------
Change in Current Assets and Liabilities .......... $(51,236) $(66,884)
======== ========
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
DARDEN RESTAURANTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
<CAPTION>
Twenty-Six Weeks Ended
November 24, November 26,
1996 1995
- --------------------------------------------------------------------------
<S> <C> <C>
Cash Flows--Operating Activities
Net earnings............................... $ 9,304 $ 4,265
Adjustments to reconcile net earnings
to cash flow:
Depreciation and amortization ........... 70,103 68,122
Amortization of unearned compensation
and loan costs .......................... 1,821 528
Change in current assets and liabilities. (49,267) (72,982)
Change in other liabilities ............. 181 1,175
Loss on disposal of land, buildings and
equipment................................ 2,868 2,987
Deferred income taxes ................... 8,030 4,324
Non-cash restructuring expenses ......... 73,281
Other, net............................... 81 1,650
------- --------
Net Cash Provided by Operating
Activities.......................... $ 43,121 $ 83,350
-------- --------
Cash Flows--Investment Activities
Purchases of land, buildings and equipment (83,400) (85,905)
Purchases of intangibles ................. (529) (1,061)
(Increase) decrease in other assets ...... 1,018 (2,105)
Proceeds from disposal of land, buildings
and equipment (including net assets held
for disposal) .......................... 12,734 2,222
-------- --------
Net Cash Used by Investment
Activities.......................... $(70,177) $(86,849)
-------- --------
Cash Flows--Financing Activities
Proceeds from issuance of common stock ... 938 3,120
Income tax benefit credited to equity..... 289
Dividends paid ........................... (6,284) (6,332)
Purchases of treasury stock .............. (9,192)
ESOP note receivable repayment ........... 600 900
Increase in short-term debt .............. 17,700 2,700
Proceeds from issuance of long-term debt.. 16,900
Repayment of long-term debt .............. (3,454) (32)
Payment of loan costs .................... (177)
-------- --------
Net Cash Used by Financing
Activities................ ......... $ 17,320 $ 356
-------- --------
Decrease in Cash and Cash Equivalents......... (9,736) (3,143)
Cash and Cash Equivalents - Beginning of
Period...................................... 30,343 20,134
-------- --------
Cash and Cash Equivalents - End of Period .... $ 20,607 $ 16,991
======== ========
Cash Flow from Changes in Current Assets
and Liabilities:
Receivables .............................. (4,127) (1,600)
Prepaid income taxes ..................... (11,225) (4,284)
Inventories .............................. (19,177) (8,406)
Net assets held for disposal ............. (1,709)
Prepaid expenses and other current assets. (642) 8,524
Accounts payable ......................... 1,462 (38,078)
Accrued payroll .......................... (398) (3,287)
Accrued income taxes ..................... (12,522) (11,950)
Other accrued taxes ...................... 3,029 1,437
Other current liabilities (5,667) (13,629)
-------- -------
Change in Current Assets and Liabilities .... $(49,267) $(72,982)
======== ========
<FN>
See accompanying notes to consolidated financial statements.
</FN>
</TABLE>
<PAGE>
DARDEN RESTAURANTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollar Amounts In Thousands, Except per Share Data)
Note 1 - Background
These consolidated financial statements do not include certain information
and footnotes required by generally accepted accounting principles for complete
financial statements. However, in the opinion of management, all adjustments
considered necessary for a fair presentation have been included and are of a
normal recurring nature. Operating results for the thirteen weeks and twenty-six
weeks ended November 24, 1996 are not necessarily indicative of the results that
may be expected for the fiscal year ending May 25, 1997.
These statements should be read in conjunction with the consolidated
financial statements and footnotes included in Darden's annual report on
Form10-K for the year ended May 26, 1996. The accounting policies used in
preparing these consolidated financial statements are the same as those
described in Darden's annual report on Form10-K.
Note 2 - Consolidated Statements of Cash Flows
During the thirteen and twenty-six weeks ended November 24, 1996, Darden
paid $917 and $9,134 respectively, for interest (net of amount capitalized) and
$12,358 and $19,198 respectively, for income taxes.
Note 3 - Restructuring Expense
Darden recorded pretax restructuring expense of $75,000 during the
thirteen weeks ended August 27, 1995 related to the closing of all China Coast
restaurants. These expenses resulted in a reduction of net earnings of $44,849
($.28 per share) and primarily relate to the write-down of land, buildings and
equipment to net realizable value. As of November 24, 1996, $9,430 of cash
payments had been charged against the restructuring reserve.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
<TABLE>
The following table sets forth selected restaurant operating data as a
percentage of sales for the periods indicated. All information is derived from
the consolidated statements of earnings (loss) for the thirteen and twenty-six
weeks ended November 24, 1996 and November 26, 1995.
<CAPTION>
Thirteen Weeks Ended Twenty-Six Weeks Ended
----------------------------------------------
November November November November
24, 1996 26, 1995 24, 1996 26, 1995
----------------------------------------------
<S> <C> <C> <C> <C>
Sales............................... 100.0% 100.0% 100.0% 100.0%
Costs and Expenses:
Cost of sales:
Food and beverages.............. 34.5 33.0 33.8 33.1
Restaurant labor................ 33.7 30.7 32.1 30.0
Restaurant expenses............. 16.0 15.3 15.7 15.1
----- ----- ----- -----
Total Cost of Sales........... 84.2% 79.0% 81.6% 78.2%
Selling, general and administrative. 12.5 12.2 12.4 11.8
Depreciation and amortization....... 4.7 4.5 4.5 4.3
Interest, net....................... 0.7 0.8 0.7 0.7
----- ----- ----- -----
Total Costs and Expenses before
Restructuring Expenses........ 102.1% 96.5% 99.2% 95.0%
----- ----- ----- -----
Restructuring....................... 0.0 0.0 4.8 0.0
----- ----- ----- -----
Total Costs and Expenses
after Restructuring Expenses.. 102.1% 96.5% 99.2% 99.8%
----- ----- ----- -----
Earnings (Loss) before Income Taxes. (2.1) 3.5 0.8 0.2
Income Taxes........................ 0.6 (1.3) (.2) (0.1)
----- ----- ----- -----
Net Earnings (Loss)................. (1.5)% 2.2% 0.6% 0.3%
===== ===== ===== =====
Net Earnings (Loss) before Restructuring Expenses:
Earnings (Loss) before Restructuring
Expenses and Income Taxes.......... (2.1)% 3.5% 0.8% 5.0%
Income Taxes before Restructuring
Expenses........................... 0.6 (1.3) (0.2) (1.9)
===== ===== ===== =====
Net Earnings (Loss) before
Restructuring Expenses.............. (1.5)% 2.2% 0.6% 3.1%
===== ===== ===== =====
</TABLE>
<PAGE>
RESULTS OF OPERATIONS
Operating results before restructuring expenses for the thirteen and
twenty-six weeks ended November 24, 1996 and November 26, 1995 are summarized
below:
<TABLE>
(Dollar Amounts in Thousands,
Except Per Share Data)
<CAPTION>
-------------------------------------------
Thirteen Weeks Twenty-Six Weeks
Ended Ended
-------------------------------------------
November November November November
24, 1996 26, 1995 24, 1996 26, 1995
-------------------------------------------
<S> <C> <C> <C> <C>
Earnings (Loss) before Restructuring
Expenses and Income Taxes......... $(15,819) $26,000 $13,074 $78,004
Income Taxes before Restructuring
Expenses.......................... 4,650 (9,672) (3,770) (28,890)
-------- ------- ------- -------
Net Earnings (Loss) before
Restructuring Expenses............ $(11,169) $16,328 $ 9,304 $49,114
======== ======= ======= =======
Earnings (Loss) Per Share before
Restructuring Expenses........... $ (0.07) $ 0.10 $ 0.06 $ 0.31
========= ======= ======= =======
</TABLE>
<PAGE>
For the fiscal 1997 second quarter ended November 24, 1996, the Company
incurred a net loss of $11.2 million or seven cents per share, compared to net
earnings of $16.3 million or ten cents per share in the second quarter of last
fiscal year. The second quarter net loss was caused by reduced operating profits
at Red Lobster due to actions taken to enhance long-term performance, including
new menu items, bolder flavors, lower prices and service improvements. Sales of
$748.8 million in the second quarter were up 2.4 percent compared to last year.
For the first six months of fiscal 1997, net earnings were $9.3 million or
six cents per share, compared to earnings before unusual items of $49.1 million
or 31 cents per share in the same fiscal 1996 period. The closing of all China
Coast restaurants during the first quarter of fiscal 1996 resulted in a $44.8
million after-tax charge (28 cents per share). Fiscal 1996 six months earnings
including this unusual item amounted to $4.3 million or three cents per share.
All cost elements as a percent of sales in the second quarter were
affected by Red Lobster's pricing actions. Food and beverage costs for the
quarter were 34.5% of sales compared to 33.0% last year because of the strategy
to lower check averages and increase portions at Red Lobster. Restaurant labor
increased to 33.7% of sales compared to 30.7% last year due to one-time training
costs at Red Lobster to launch the new menu, continued wage rate inflation, and
higher manager salaries. The Olive Garden also experienced higher training costs
to introduce its "Vino Riserva" wine program. Restaurant expenses increased
slightly to 16.0% of sales compared to 15.3% last year primarily because of
one-time expenses for smallware supplies and maintenance at Red Lobster. As a
result of these increased costs, the store-level profit margin decreased to
15.8% in the second quarter of fiscal 1997 compared to 21.0% last year. The
increase in second-quarter selling, general and administrative expenses to 12.5%
of sales compared to 12.2% of sales last year, was a result of additional field
personnel support for the restaurants and the initial heavy advertising to
introduce to customers the changes at Red Lobster.
The effective tax rate for the second quarter of fiscal 1997 was 29.4%
compared to 37.2% last year. The estimated effective annual tax rate for fiscal
1997 is approximately 29.0%, which is down from last year's effective tax rate
before unusual items of 36.8% because of higher tax credits and lower pre-tax
income for the year.
Food and beverage costs for the first six months of fiscal 1997 were 33.8%
of sales, up from last year's 33.1%. Again, this unfavorable increase resulted
from the strategy to lower check averages and increase portions at Red Lobster.
Restaurant labor costs were 32.1%, up from last year's 30.0% due again to
one-time training costs at Red Lobster to launch the new menu, continued wage
inflation and higher manager salaries. Restaurant expenses were 15.7% of sales,
compared to 15.1% in the prior year. Selling, general and administrative expense
rose to 12.4% of sales, compared to 11.8% in the prior year.
DIVISION RESULTS
Red Lobster sales of $437.6 million for the fiscal 1997 second quarter were
roughly the same as last year's second quarter. Same-store sales in the U.S.
were down 3.6% for the entire second quarter, primarily because of sharply lower
sales early in September before the new menu was introduced on September 16.
Because of the one-time costs associated with the new menu roll-out and lower
margins, Red Lobster reported an operating loss for the second quarter.
Customers responded very favorably to Red Lobster's new menu and service
initiatives. Since September 16, customer traffic has averaged more than eight
percent higher than in the prior year. Because of the lower entree prices and
somewhat reduced preference for appetizers and other add-ons, the average
customer check also declined by more than eight percent, resulting in a very
slight decline in same-store sales compared to an industry sample which had a
decline of over three percent. Through the first six months of fiscal 1997, Red
Lobster's sales declined 2.6% to $913 million and same-store sales in the U.S.
declined by 5.0%.
During the second quarter, Red Lobster opened four stores and closed one
for a total of 733 stores compared to 710 stores last year. Also, Red Lobster
relocated five stores during the quarter, four of which utilized former China
Coast sites, and intends to relocate 11 more stores during the remainder of the
fiscal year. Also, during the second quarter, 35 restaurants were remodeled with
the wharfside decor package at an average cost of under $200,000 each. The
balance of restaurants scheduled to be remodeled are expected to be completed by
the end of the fiscal year.
The Olive Garden continued its positive momentum in the second quarter of
fiscal 1997 as sales increased 5.8% to $309.6 million. Same-store sales in the
U.S. increased 2.5%, marking the ninth consecutive quarter of same-store sales
increases. The Olive Garden's second-quarter operating profits were slightly
ahead of last year. Through the first six months of fiscal 1997, The Olive
Garden sales increased 3.9% to $638.5 million and same-store sales in the U.S.
increased by 1.4%. Also, The Olive Garden introduced a new wine service program
in October where customers pour their own wine and pay on the honor system. This
program has shown promising results, has increased overall guest satisfaction
and boosted alcoholic beverage sales. During the second quarter, The Olive
Garden opened two stores and closed one for a total of 491 restaurants compared
to 478 restaurants last year.
The initial Bahama Breeze restaurant in Orlando continues to deliver
strong performance. Construction has commenced on a second unit in the Orlando
market, with opening planned for May 1997.
The table below details the number of restaurants open at the end of the
second quarter of fiscal year 1997, compared with the number open at the end of
fiscal year 1996 and the end of last fiscal year's second quarter.
<TABLE>
NUMBER OF RESTAURANTS
<CAPTION>
November 24, 1996 May 26, 1996 November 26, 1995
----------------- ------------ -----------------
<S> <C> <C> <C>
Red Lobster - USA 681 677 658
Red Lobster - Canada 52 52 52
----- ----- -----
Total 733 729 710
Olive Garden - USA 475 471 461
Olive Garden - Canada 16 16 17
----- ----- -----
Total 491 487 478
Bahama Breeze 1 1 0
----- ----- -----
Total 1,225 1,217 1,188
===== ===== =====
</TABLE>
<PAGE>
PART II-OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
Information contained on pages 4 through 16 of the Company's Proxy
Statement dated August 2, 1996, filed with the Securities and Exchange
Commission on August 2, 1996, describing matters submitted to a vote at the
Annual Meeting of Shareholders on September 19, 1996, is incorporated by
reference in this report.
(a) The Annual Meeting of Shareholders was held on September 19, 1996.
(b) The name of each director elected at the meeting is provided in Item
4(c) of this report. There are no other directors with a term of office that
continued after the Annual Meeting. All nominees described in the Proxy
Statement, referenced above, were elected.
(c) At the Annual Meeting, the Shareholders took the following
actions:
(i) Elected the following nine directors:
H. Brewster Atwater For 135,760,581
Withheld 1,375,112
John P. Birkelund For 134,740,069
Withheld 2,395,624
Daniel B. Burke For 135,832,640
Withheld 1,303,053
Joe R. Lee For 134,757,331
Withheld 2,378,362
Betty Southard Murphy For 134,716,452
Withheld 2,419,241
Jeffrey J. O'Hara For 134,723,390
Withheld 2,412,303
Michael D. Rose For 135,839,449
Withheld 1,296,244
Jack A. Smith For 135,838,302
Withheld 1,297,391
Blaine Sweatt For 134,752,407
Withheld 2,383,286
(ii) Approved appointment of KPMG Peat Marwick LLP as
independent auditor.
For 136,264,694
Against 360,799
Abstain 510,200
Broker Non-Vote 0
<PAGE>
(iii) Approved the Stock Option and Long-Term Incentive Plan of
1995, as amended, as further described in those portions of
the Proxy Statement referenced above.
For 122,525,247
Against 13,345,047
Abstain 1,263,048
Broker Non-Vote 2,351
(iv) Approved the Stock Option and Long-Term Incentive Conversion
Plan, as amended, as further described in those portions of
the Proxy Statement referenced above.
For 129,369,442
Against 6,433,385
Abstain 1,330,515
Broker Non-Vote 2,351
(v) Approved the Management Incentive Plan, as amended, as further
described in those portions of the Proxy Statement referenced
above.
For 129,261,194
Against 6,540,623
Abstain 1,331,525
Broker Non-Vote 2,351
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
Exhibit 11 Determination of Common Shares and Common Share
Equivalents
Exhibit 12 Computation of Ratio of Consolidated Earnings to
Fixed Charges
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K.
During the fiscal quarter ended November 24, 1996, the Company filed
the following report on Form 8-K:
On September 20, 1996, the Company filed a Form 8-K to report
certain financial results for the first quarter of fiscal year 1997,
new operating initiatives at Red Lobster restaurants, an increased
stock buyback program, and the declaration of a dividend of four
cents per share payable on November 1, 1996 to shareholders of
record on October 10, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DARDEN RESTAURANTS, INC.
Dated: December 19, 1996 By: /s/ C.L. WHITEHILL
C.L. Whitehill
Senior Vice President,
General Counsel and Secretary
Dated: December 19, 1996 By: /s/ JAMES D. SMITH
James D. Smith
Senior Vice President - Finance
(Principal financial and
accounting officer)
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Exhibit Title Page
11 Determination of Common Shares and Common Share
Equivalents 15
12 Computation of Ratio of Consolidated Earnings (Loss)
to Fixed Charges 16
27 Financial Data Schedule 17
<TABLE>
Exhibit 11
DARDEN RESTAURANTS, INC.
DETERMINATION OF COMMON SHARES AND COMMON SHARE EQUIVALENTS
(In Thousands)
<CAPTION>
Thirteen Weeks Ended Twenty-Six Weeks Ended
--------------------------------------------
November November November November
24, 1996 26, 1995 24, 1996 26, 1995
--------------------------------------------
<S> <C> <C> <C> <C>
Computation of Shares:
Weighted average number of
shares outstanding............ 157,500 158,900 157,600 158,700
Net shares resulting from the
assumed exercise of certain
stock options (a)............. 773(b) 2,600(b) 910(b) 2,200(b)
------- ------- ------- -------
Total common shares and common
share equivalents............. 158,273 161,500 158,510 160,900
======= ======= ======= =======
<FN>
Notes to Exhibit:
(a)Common share equivalents are computed by the "treasury stock" method. This
method first determines the number of shares issuable under stock options
that had an option price below the average market price for the period, and
then deducts the number of shares that could have been repurchased with the
proceeds of options exercised.
(b)Common share equivalents for the thirteen and twenty-six weeks ended
November 24, 1996 and November 26, 1995 are not material. As a result,
earnings (loss) per share has been computed using the weighted average number
of shares outstanding.
</FN>
</TABLE>
<TABLE>
Exhibit 12
DARDEN RESTAURANTS, INC.
COMPUTATION OF RATIO OF CONSOLIDATED EARNINGS (LOSS) TO FIXED CHARGES
(Dollar Amounts in Thousands)
<CAPTION>
Thirteen Weeks Ended Twenty-Six Weeks Ended
--------------------------------------------
November November November November
24, 1996 26, 1995 24, 1996 26, 1995
--------------------------------------------
Computation of Shares:
<S> <C> <C> <C> <C>
Consolidated Earnings (Loss) from
Operations before Restructuring
Charges and Income Taxes......... $(15,819) $26,000 $13,074 $78,004
Plus Fixed Charges................. 10,026 10,243 19,614 20,709
Less Capitalized Interest.......... (249) (490) (704) (1,073)
-------- ------- ------- -------
Consolidated Earnings (Loss) from
Operations before Restructuring
Charges and Income Taxes Available
to Cover Fixed Charges........... $ (6,042) $35,753 $31,984 $97,640
======== ======= ======= =======
Ratio of Consolidated Earnings
(Loss) to Fixed Charges.......... (.60) 3.49 1.63 4.71
======== ======= ======= =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated financial statements of Darden Restaurants, Inc. and Subsidiaries
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-25-1997
<PERIOD-START> AUG-26-1996
<PERIOD-END> NOV-24-1996
<CASH> $20,607
<SECURITIES> 0
<RECEIVABLES> 28,899
<ALLOWANCES> 0
<INVENTORY> 139,902
<CURRENT-ASSETS> 316,298
<PP&E> 2,441,440
<DEPRECIATION> 749,277
<TOTAL-ASSETS> 2,103,778
<CURRENT-LIABILITIES> 448,217
<BONDS> 314,731
0
0
<COMMON> 1,267,536
<OTHER-SE> (46,881)
<TOTAL-LIABILITY-AND-EQUITY> 883,123
<SALES> 748,757
<TOTAL-REVENUES> 748,757
<CGS> 258,105
<TOTAL-COSTS> 630,568
<OTHER-EXPENSES> 134,008
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,623
<INCOME-PRETAX> (15,819)
<INCOME-TAX> (4,650)
<INCOME-CONTINUING> (11,169)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (11,169)
<EPS-PRIMARY> (.07)
<EPS-DILUTED> (.07)
</TABLE>
