x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended May 27, 2018
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
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Florida
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59-3305930
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(State or other jurisdiction of
incorporation or organization)
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(IRS Employer Identification No.)
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1000 Darden Center Drive, Orlando, Florida
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32837
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, without par value
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New York Stock Exchange
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Large accelerated filer
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x
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Accelerated filer
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o
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Non-accelerated filer
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o
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(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Emerging growth company
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o
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PART I
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Page
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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Number of restaurants
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Olive
Garden
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LongHorn
Steakhouse
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Cheddar’s Scratch Kitchen
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Yard House
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The Capital
Grille (2)
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Bahama
Breeze
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Seasons
52
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Eddie V’s
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Total
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Owned and operated:
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United States (1)
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850
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504
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156
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72
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58
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39
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42
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19
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1,740
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Canada
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6
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—
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—
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—
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—
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—
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—
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—
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6
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Total
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856
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504
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156
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72
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58
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39
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42
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19
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1,746
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Franchised:
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United States (3)
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5
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16
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14
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—
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—
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1
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—
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—
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36
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Middle East
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4
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2
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—
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—
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—
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—
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—
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—
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6
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Latin America
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24
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2
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—
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—
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2
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—
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—
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—
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28
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Malaysia
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1
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—
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—
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—
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—
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—
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—
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—
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1
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Total
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34
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20
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14
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—
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2
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1
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—
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—
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71
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(1)
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Includes
three
restaurants that are owned jointly by us and third parties, and managed by us.
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(2)
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Includes
one
company-owned The Capital Burger restaurant.
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(3)
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Includes Puerto Rico.
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Fiscal
Year
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Olive
Garden
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LongHorn
Steakhouse
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Cheddar’s Scratch Kitchen
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|
Yard House
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The Capital
Grille (3)
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Bahama
Breeze
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Seasons
52
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Eddie V’s
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Total
Restaurants
(1)(2)
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Total
Sales
(
in millions
)
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1999
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464
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|
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6
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|
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470
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$1,490.2
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2000
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469
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|
|
|
|
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11
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|
|
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480
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$1,615.7
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2001
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477
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|
|
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|
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16
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|
|
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493
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$1,780.0
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2002
|
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496
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|
|
|
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22
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|
|
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|
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518
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$1,966.1
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2003
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524
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25
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1
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|
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550
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$2,097.5
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2004
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543
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|
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23
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1
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567
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$2,359.3
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2005
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563
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23
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3
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589
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$2,542.4
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2006
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582
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23
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5
|
|
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610
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$2,775.8
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2007
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614
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23
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7
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644
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$2,965.2
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2008
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653
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305
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32
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23
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7
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1,020
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$3,997.5
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2009
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691
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321
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37
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24
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8
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|
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1,081
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$4,593.1
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2010
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723
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331
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40
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25
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11
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1,130
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$4,626.8
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2011
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754
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354
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44
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26
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17
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1,196
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$4,980.3
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2012
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792
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386
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46
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30
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23
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11
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1,289
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$5,327.1
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2013
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828
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430
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44
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49
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33
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31
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12
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1,431
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$5,921.0
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2014
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837
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464
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52
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54
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37
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38
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15
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1,501
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$6,285.6
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2015
|
|
846
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480
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59
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54
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36
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43
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16
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1,534
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$6,764.0
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2016
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|
843
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481
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65
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54
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37
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40
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16
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1,536
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$6,933.5
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2017
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846
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|
490
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|
140
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67
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|
56
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|
37
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|
41
|
|
18
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|
1,695
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$7,170.2
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2018
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856
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504
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156
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|
72
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58
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39
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42
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|
19
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1,746
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$8,080.1
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(1)
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Includes only restaurants included in continuing operations. Excludes other restaurant brands operated by us in these years that are no longer owned by us, and restaurants that were classified as discontinued operations.
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(2)
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Includes company-owned synergy restaurants as follows: one in fiscal 2011, one in fiscal 2012, four in fiscal 2013, and four in fiscal 2014. We converted the four synergy restaurants to Olive Garden restaurants in the first quarter of fiscal 2015.
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(3)
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Includes one The Capital Burger restaurant in fiscal 2018.
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Actual - Fiscal 2018
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Projected - Fiscal 2019
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Pro-Forma New Restaurants
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||||||||||
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Restaurant Openings
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Acquired
(1)
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Restaurant Closings
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New Restaurant Openings
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Capital Investment
Range (3)
(in millions)
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Square
Feet
(4)
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Dining
Seats
(5)
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Olive Garden
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12
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—
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2
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11 - 13
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$3.5
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-
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$4.5
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7,700
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240
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LongHorn Steakhouse
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15
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—
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1
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13 - 15
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$2.5
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-
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$3.5
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5,500
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190
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Cheddar’s Scratch Kitchen
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5
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11
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—
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5 - 6
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$3.0
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-
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$4.0
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8,000
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280
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Yard House
|
5
|
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—
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—
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5 - 7
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$6.0
|
-
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$7.0
|
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11,500
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|
380
|
The Capital Grille (2)
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2
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—
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—
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0 - 1
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$6.0
|
-
|
$7.0
|
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9,500
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|
250
|
Bahama Breeze
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2
|
|
—
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|
—
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2 - 3
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$5.0
|
-
|
$6.0
|
|
9,000
|
|
360
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Seasons 52
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1
|
|
—
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|
—
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1 - 2
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|
$5.5
|
-
|
$6.5
|
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9,000
|
|
300
|
Eddie V’s
|
2
|
|
—
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|
1
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2 - 3
|
|
$7.5
|
-
|
$8.5
|
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9,000
|
|
250
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Totals
|
44
|
|
11
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|
4
|
|
45 - 50
|
|
|
|
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|
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(1)
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Includes the 11 Cheddar’s Scratch Kitchen franchised restaurants acquired on August 28, 2017.
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(2)
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Fiscal 2018 restaurant openings include one The Capital Burger restaurant. Pro-forma new restaurant data excludes The Capital Burger.
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(3)
|
Includes cash investments for building, equipment, furniture and other construction costs; excludes internal capitalized overhead, pre-opening expenses, tenant allowance and future lease obligations. Olive Garden, LongHorn Steakhouse and Cheddar’s Scratch Kitchen capital investments are based on costs associated with land-only leases; The Capital Grille, Bahama Breeze, Seasons 52, Eddie V’s and Yard House capital investments are based on ground and building leases. Actual costs can vary significantly depending on the specific location.
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(4)
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Includes all space under the roof, including the coolers and freezers.
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(5)
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Includes bar dining seats and patio seating, but excludes bar stools.
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•
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United States,
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•
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Middle East (Kuwait, Saudi Arabia and the United Arab Emirates),
|
•
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Mexico,
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•
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Central and South America (Brazil, El Salvador and Panama),
|
•
|
Caribbean (Jamaica, Bahamas, Cayman Islands, Dominican Republic and Barbados), and
|
•
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Malaysia.
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Item 2.
|
PROPERTIES
|
Alabama (33)
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|
Illinois (55)
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|
Montana (2)
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Rhode Island (3)
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Alaska (2)
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|
Indiana (46)
|
|
Nebraska (8)
|
|
South Carolina (31)
|
Arkansas (15)
|
|
Iowa (14)
|
|
Nevada (15)
|
|
South Dakota (3)
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Arizona (42)
|
|
Kansas (21)
|
|
New Hampshire (9)
|
|
Tennessee (63)
|
California (101)
|
|
Kentucky (32)
|
|
New Jersey (50)
|
|
Texas (183)
|
Colorado (24)
|
|
Louisiana (20)
|
|
New Mexico (10)
|
|
Utah (16)
|
Connecticut (15)
|
|
Maine (8)
|
|
New York (52)
|
|
Vermont (2)
|
Delaware (7)
|
|
Maryland (33)
|
|
North Carolina (64)
|
|
Virginia (52)
|
District of Columbia (3)
|
|
Massachusetts (40)
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North Dakota (7)
|
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Washington (21)
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Florida (198)
|
|
Michigan (35)
|
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Ohio (78)
|
|
West Virginia (13)
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Georgia (110)
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Minnesota (15)
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Oklahoma (18)
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|
Wisconsin (20)
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Hawaii (1)
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Mississippi (13)
|
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Oregon (10)
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Wyoming (2)
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Idaho (6)
|
|
Missouri (42)
|
|
Pennsylvania (77)
|
|
Canada (6)
|
Item 3.
|
LEGAL PROCEEDINGS
|
Item 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
(Dollars in millions, except per share data)
|
Total Number
of Shares Purchased
(1) (2)
|
Average
Price Paid
per Share
|
Total Number of
Shares Purchased as
Part of Publicly Announced Plans or Programs
|
Maximum Dollar Value of Shares That
May Yet Be
Purchased Under the
Plans or Programs (3)
|
||||
February 26, 2018 through April 1, 2018
|
213,186
|
$
|
86.45
|
|
213,186
|
$
|
243.8
|
|
April 2, 2018 through April 29, 2018
|
76,052
|
$
|
86.93
|
|
76,052
|
$
|
237.2
|
|
April 30, 2018 through May 27, 2018
|
24,843
|
$
|
88.21
|
|
24,843
|
$
|
235.0
|
|
Total
|
314,081
|
$
|
86.71
|
|
314,081
|
$
|
235.0
|
|
(1)
|
All of the shares purchased during the quarter ended
May 27, 2018
were purchased as part of our repurchase program. On June 20, 2018, our Board of Directors authorized a new share repurchase program under which the Company may repurchase up to $500.0 million of its outstanding common stock. This repurchase program, which was announced publicly in a press release issued on June 21, 2018, does not have an expiration, replaces the previously existing share repurchase authorization and eliminates the balance of approximately $221.9 million available for repurchase remaining under the previous authorization.
|
(2)
|
The number of shares purchased includes shares withheld for taxes on vesting of restricted stock, shares delivered or deemed to be delivered to us on tender of stock in payment for the exercise price of options, and shares reacquired pursuant to tax withholding on option exercises. These shares are included as part of our repurchase program and deplete the repurchase authority granted by our Board. The number of shares repurchased excludes shares we reacquired pursuant to forfeiture of restricted stock.
|
(3)
|
Repurchases are subject to prevailing market prices, may be made in open market or private transactions, and may occur or be discontinued at any time. There can be no assurance that we will repurchase any additional shares.
|
|
|
Indexed Returns
|
||||||||||||||||||||||
Company/Index
|
|
May 2013
|
|
May 2014
|
|
May 2015
|
|
May 2016
|
|
May 2017
|
|
May 2018
|
||||||||||||
Darden Restaurants, Inc.
|
|
$
|
100.00
|
|
|
$
|
98.01
|
|
|
$
|
134.96
|
|
|
$
|
160.16
|
|
|
$
|
215.65
|
|
|
$
|
221.70
|
|
S&P 500 Stock Index
|
|
$
|
100.00
|
|
|
$
|
115.21
|
|
|
$
|
127.75
|
|
|
$
|
127.25
|
|
|
$
|
146.45
|
|
|
$
|
164.97
|
|
S&P Composite 1500 Restaurant Sub-Index
|
|
$
|
100.00
|
|
|
$
|
109.70
|
|
|
$
|
127.20
|
|
|
$
|
137.55
|
|
|
$
|
166.05
|
|
|
$
|
169.77
|
|
Item 6.
|
SELECTED FINANCIAL DATA
|
|
Fiscal Year Ended
|
||||||||||||||||||
(Dollars in millions, except per share data)
|
May 27, 2018
|
|
May 28, 2017
|
|
May 29, 2016
|
|
May 31, 2015 (2)
|
|
May 25, 2014
|
||||||||||
Operating Results (1)
Sales
|
$
|
8,080.1
|
|
|
$
|
7,170.2
|
|
|
$
|
6,933.5
|
|
|
$
|
6,764.0
|
|
|
$
|
6,285.6
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Food and beverage
|
2,303.1
|
|
|
2,070.3
|
|
|
2,039.7
|
|
|
2,085.1
|
|
|
1,892.2
|
|
|||||
Restaurant labor
|
2,614.5
|
|
|
2,265.3
|
|
|
2,189.2
|
|
|
2,135.6
|
|
|
2,017.6
|
|
|||||
Restaurant expenses
|
1,417.1
|
|
|
1,265.2
|
|
|
1,163.5
|
|
|
1,120.8
|
|
|
1,080.7
|
|
|||||
Marketing expenses
|
252.3
|
|
|
239.7
|
|
|
238.0
|
|
|
243.3
|
|
|
252.3
|
|
|||||
General and administrative
|
409.8
|
|
|
387.7
|
|
|
384.9
|
|
|
430.2
|
|
|
413.1
|
|
|||||
Depreciation and amortization
|
313.1
|
|
|
272.9
|
|
|
290.2
|
|
|
319.3
|
|
|
304.4
|
|
|||||
Impairments and disposal of assets, net
|
3.4
|
|
|
(8.4
|
)
|
|
5.8
|
|
|
62.1
|
|
|
16.4
|
|
|||||
Total operating costs and expenses
|
$
|
7,313.3
|
|
|
$
|
6,492.7
|
|
|
$
|
6,311.3
|
|
|
$
|
6,396.4
|
|
|
$
|
5,976.7
|
|
Operating income
|
766.8
|
|
|
677.5
|
|
|
622.2
|
|
|
367.6
|
|
|
308.9
|
|
|||||
Interest, net
|
161.1
|
|
|
40.2
|
|
|
172.5
|
|
|
192.3
|
|
|
134.3
|
|
|||||
Earnings before income taxes
|
605.7
|
|
|
637.3
|
|
|
449.7
|
|
|
175.3
|
|
|
174.6
|
|
|||||
Income tax expense (benefit)
|
1.9
|
|
|
154.8
|
|
|
90.0
|
|
|
(21.1
|
)
|
|
(8.6
|
)
|
|||||
Earnings from continuing operations
|
$
|
603.8
|
|
|
$
|
482.5
|
|
|
$
|
359.7
|
|
|
$
|
196.4
|
|
|
$
|
183.2
|
|
Earnings (loss) from discontinued operations, net of tax expense (benefit) of $(4.8), $(4.2), $3.4, $344.8 and $32.3
|
(7.8
|
)
|
|
(3.4
|
)
|
|
15.3
|
|
|
513.1
|
|
|
103.0
|
|
|||||
Net earnings
|
$
|
596.0
|
|
|
$
|
479.1
|
|
|
$
|
375.0
|
|
|
$
|
709.5
|
|
|
$
|
286.2
|
|
Basic net earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings from continuing operations
|
$
|
4.87
|
|
|
$
|
3.88
|
|
|
$
|
2.82
|
|
|
$
|
1.54
|
|
|
$
|
1.40
|
|
Earnings (loss) from discontinued operations
|
$
|
(0.06
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
0.12
|
|
|
$
|
4.02
|
|
|
$
|
0.78
|
|
Net earnings
|
$
|
4.81
|
|
|
$
|
3.85
|
|
|
$
|
2.94
|
|
|
$
|
5.56
|
|
|
$
|
2.18
|
|
Diluted net earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings from continuing operations
|
$
|
4.79
|
|
|
$
|
3.83
|
|
|
$
|
2.78
|
|
|
$
|
1.51
|
|
|
$
|
1.38
|
|
Earnings (loss) from discontinued operations
|
$
|
(0.06
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
0.12
|
|
|
$
|
3.96
|
|
|
$
|
0.77
|
|
Net earnings
|
$
|
4.73
|
|
|
$
|
3.80
|
|
|
$
|
2.90
|
|
|
$
|
5.47
|
|
|
$
|
2.15
|
|
Average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
124.0
|
|
|
124.3
|
|
|
127.4
|
|
|
127.7
|
|
|
131.0
|
|
|||||
Diluted
|
126.0
|
|
|
126.0
|
|
|
129.3
|
|
|
129.7
|
|
|
133.2
|
|
|||||
Financial Position
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
5,469.6
|
|
|
$
|
5,292.3
|
|
|
$
|
4,419.4
|
|
|
$
|
5,837.3
|
|
|
$
|
6,958.7
|
|
Land, buildings and equipment, net
|
$
|
2,429.8
|
|
|
$
|
2,272.3
|
|
|
$
|
2,041.6
|
|
|
$
|
3,215.8
|
|
|
$
|
3,381.0
|
|
Working capital (deficit)
|
$
|
(830.9
|
)
|
|
$
|
(701.3
|
)
|
|
$
|
(530.0
|
)
|
|
$
|
(297.7
|
)
|
|
$
|
233.3
|
|
Long-term debt, less current portion
|
$
|
926.5
|
|
|
$
|
936.6
|
|
|
$
|
440.0
|
|
|
$
|
1,452.3
|
|
|
$
|
2,463.4
|
|
Stockholders’ equity
|
$
|
2,194.8
|
|
|
$
|
2,101.7
|
|
|
$
|
1,952.0
|
|
|
$
|
2,333.5
|
|
|
$
|
2,156.9
|
|
Stockholders’ equity per outstanding share
|
$
|
17.77
|
|
|
$
|
16.76
|
|
|
$
|
15.47
|
|
|
$
|
18.42
|
|
|
$
|
16.30
|
|
Item 6.
|
SELECTED FINANCIAL DATA (continued)
|
|
Fiscal Year Ended
|
||||||||||||||||||
(Dollars in millions, except per share data)
|
May 27, 2018
|
|
May 28, 2017
|
|
May 29, 2016
|
|
May 31, 2015 (2)
|
|
May 25, 2014
|
||||||||||
Other Statistics
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from operations (1)
|
$
|
1,019.8
|
|
|
$
|
916.3
|
|
|
$
|
820.4
|
|
|
$
|
874.3
|
|
|
$
|
555.4
|
|
Capital expenditures (1)
|
$
|
396.0
|
|
|
$
|
293.0
|
|
|
$
|
228.3
|
|
|
$
|
296.5
|
|
|
$
|
414.8
|
|
Dividends paid
|
$
|
313.5
|
|
|
$
|
279.1
|
|
|
$
|
268.2
|
|
|
$
|
278.9
|
|
|
$
|
288.3
|
|
Dividends paid per share
|
$
|
2.52
|
|
|
$
|
2.24
|
|
|
$
|
2.10
|
|
|
$
|
2.20
|
|
|
$
|
2.20
|
|
Advertising expense (1)
|
$
|
252.3
|
|
|
$
|
239.7
|
|
|
$
|
238.0
|
|
|
$
|
243.3
|
|
|
$
|
252.3
|
|
Stock price:
|
|
|
|
|
|
|
|
|
|
||||||||||
High
|
$
|
100.11
|
|
|
$
|
89.14
|
|
|
$
|
75.60
|
|
|
$
|
70.38
|
|
|
$
|
55.25
|
|
Low
|
$
|
76.27
|
|
|
$
|
59.50
|
|
|
$
|
53.38
|
|
|
$
|
43.56
|
|
|
$
|
44.78
|
|
Close
|
$
|
87.88
|
|
|
$
|
87.95
|
|
|
$
|
67.48
|
|
|
$
|
65.54
|
|
|
$
|
49.55
|
|
Number of employees
|
180,656
|
|
|
178,729
|
|
|
150,942
|
|
|
148,892
|
|
|
206,489
|
|
|||||
Number of restaurants (1)
|
1,746
|
|
|
1,695
|
|
|
1,536
|
|
|
1,534
|
|
|
1,501
|
|
(1)
|
Consistent with our consolidated financial statements, information has been presented on a continuing operations basis. Accordingly, all discontinued operations have been excluded.
|
(2)
|
Fiscal year 2015 consisted of 53 weeks, while all other fiscal years consisted of 52 weeks.
|
Item 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Same-restaurant sales – which is a year-over-year 52-week comparison of each period’s sales volumes for restaurants open at least 16 months, including recently acquired restaurants, regardless of when the restaurants were acquired; and
|
•
|
Segment profit – which is restaurant sales, less food and beverage costs, restaurant labor costs, restaurant expenses and marketing expenses (sometimes referred to as restaurant-level earnings).
|
|
|
|
|
|
|
|
Percent Change
|
||||||||||
(in millions)
|
May 27, 2018
|
|
May 28, 2017
|
|
May 29, 2016
|
|
2018 vs 2017
|
|
2017 vs 2016
|
||||||||
Sales
|
$
|
8,080.1
|
|
|
$
|
7,170.2
|
|
|
$
|
6,933.5
|
|
|
12.7
|
%
|
|
3.4
|
%
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||
Food and beverage
|
2,303.1
|
|
|
2,070.3
|
|
|
2,039.7
|
|
|
11.2
|
%
|
|
1.5
|
%
|
|||
Restaurant labor
|
2,614.5
|
|
|
2,265.3
|
|
|
2,189.2
|
|
|
15.4
|
%
|
|
3.5
|
%
|
|||
Restaurant expenses
|
1,417.1
|
|
|
1,265.2
|
|
|
1,163.5
|
|
|
12.0
|
%
|
|
8.7
|
%
|
|||
Marketing expenses
|
252.3
|
|
|
239.7
|
|
|
238.0
|
|
|
5.3
|
%
|
|
0.7
|
%
|
|||
General and administrative expenses
|
409.8
|
|
|
387.7
|
|
|
384.9
|
|
|
5.7
|
%
|
|
0.7
|
%
|
|||
Depreciation and amortization
|
313.1
|
|
|
272.9
|
|
|
290.2
|
|
|
14.7
|
%
|
|
(6.0
|
)%
|
|||
Impairments and disposal of assets, net
|
3.4
|
|
|
(8.4
|
)
|
|
5.8
|
|
|
NM
|
|
|
NM
|
|
|||
Total operating costs and expenses
|
$
|
7,313.3
|
|
|
$
|
6,492.7
|
|
|
$
|
6,311.3
|
|
|
12.6
|
%
|
|
2.9
|
%
|
Operating income
|
766.8
|
|
|
677.5
|
|
|
622.2
|
|
|
13.2
|
%
|
|
8.9
|
%
|
|||
Interest, net
|
161.1
|
|
|
40.2
|
|
|
172.5
|
|
|
NM
|
|
|
(76.7
|
)%
|
|||
Earnings before income taxes
|
605.7
|
|
|
637.3
|
|
|
449.7
|
|
|
(5.0
|
)%
|
|
41.7
|
%
|
|||
Income tax expense (1)
|
1.9
|
|
|
154.8
|
|
|
90.0
|
|
|
(98.8
|
)%
|
|
72.0
|
%
|
|||
Earnings from continuing operations
|
$
|
603.8
|
|
|
$
|
482.5
|
|
|
$
|
359.7
|
|
|
25.1
|
%
|
|
34.1
|
%
|
Earnings (loss) from discontinued operations, net of tax
|
(7.8
|
)
|
|
(3.4
|
)
|
|
15.3
|
|
|
NM
|
|
|
NM
|
|
|||
Net earnings
|
$
|
596.0
|
|
|
$
|
479.1
|
|
|
$
|
375.0
|
|
|
24.4
|
%
|
|
27.8
|
%
|
|
|
|
|
|
|
|
|
|
|
||||||||
(1) Effective tax rate
|
0.3
|
%
|
|
24.3
|
%
|
|
20.0
|
%
|
|
|
|
|
|||||
NM- Not meaningful. Percentage increases and decreases over 100 percent were not considered meaningful.
|
|
|
|
|
May 27, 2018
|
|
May 28, 2017
|
|
May 29, 2016
|
|||
Olive Garden
(1)
|
|
856
|
|
|
846
|
|
|
843
|
|
LongHorn Steakhouse
|
|
504
|
|
|
490
|
|
|
481
|
|
Cheddar’s Scratch Kitchen (2)
|
|
156
|
|
|
140
|
|
|
—
|
|
Yard House
|
|
72
|
|
|
67
|
|
|
65
|
|
The Capital Grille (3)
|
|
58
|
|
|
56
|
|
|
54
|
|
Bahama Breeze
|
|
39
|
|
|
37
|
|
|
37
|
|
Seasons 52
|
|
42
|
|
|
41
|
|
|
40
|
|
Eddie V’s
|
|
19
|
|
|
18
|
|
|
16
|
|
Total
|
|
1,746
|
|
|
1,695
|
|
|
1,536
|
|
(1)
|
Includes
six
locations in Canada for all periods presented.
|
(2)
|
Includes the 140 restaurants acquired on April 24, 2017 and the 11 restaurants acquired on August 28, 2017.
|
(3)
|
Includes
one
The Capital Burger restaurant in fiscal
2018
.
|
|
Total Sales
|
|
Percent Change
|
|
SRS (1)
|
||||||||||||||||||
|
Fiscal Years
|
|
2018 vs 2017
|
|
2017 vs 2016
|
|
2018 vs 2017
|
|
2017 vs 2016
|
||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
|
|||||||||||||||||
Olive Garden
|
$
|
4,082.5
|
|
|
$
|
3,938.6
|
|
|
$
|
3,838.6
|
|
|
3.7
|
%
|
|
2.6
|
%
|
|
2.4
|
%
|
|
2.6
|
%
|
LongHorn Steakhouse
|
$
|
1,703.2
|
|
|
$
|
1,622.2
|
|
|
$
|
1,587.7
|
|
|
5.0
|
%
|
|
2.2
|
%
|
|
2.7
|
%
|
|
1.2
|
%
|
Cheddar’s Scratch Kitchen (2)
|
$
|
652.7
|
|
|
$
|
63.0
|
|
|
$
|
—
|
|
|
NM
|
|
|
NM
|
|
|
(2.0
|
)%
|
|
NA
|
|
Yard House
|
$
|
571.8
|
|
|
$
|
530.7
|
|
|
$
|
507.0
|
|
|
7.7
|
%
|
|
4.7
|
%
|
|
1.1
|
%
|
|
(0.2
|
)%
|
The Capital Grille
|
$
|
440.7
|
|
|
$
|
421.3
|
|
|
$
|
408.3
|
|
|
4.6
|
%
|
|
3.2
|
%
|
|
2.8
|
%
|
|
0.4
|
%
|
Bahama Breeze
|
$
|
236.8
|
|
|
$
|
217.8
|
|
|
$
|
217.9
|
|
|
8.7
|
%
|
|
—
|
%
|
|
1.1
|
%
|
|
2.2
|
%
|
Seasons 52
|
$
|
249.6
|
|
|
$
|
245.0
|
|
|
$
|
253.8
|
|
|
1.9
|
%
|
|
(3.5
|
)%
|
|
(0.6
|
)%
|
|
—
|
%
|
Eddie V’s
|
$
|
133.7
|
|
|
$
|
114.3
|
|
|
$
|
105.8
|
|
|
17.0
|
%
|
|
8.0
|
%
|
|
4.1
|
%
|
|
1.5
|
%
|
(1)
|
Same-restaurant sales is a year-over-year comparison of each period’s sales volumes for a 52-week year and is limited to restaurants open at least 16 months.
|
(2)
|
Fiscal 2017 Cheddar’s Scratch Kitchen sales from company-owned restaurants are reflected for the period April 24, 2017 through May 28, 2017.
|
|
|
Average Annual Sales per Restaurant
|
||||||||||
(in millions)
|
|
May 27, 2018
|
|
|
May 28, 2017
|
|
|
May 29, 2016
|
|
|||
Olive Garden
|
|
$
|
4.8
|
|
|
$
|
4.7
|
|
|
$
|
4.5
|
|
LongHorn Steakhouse
|
|
$
|
3.4
|
|
|
$
|
3.3
|
|
|
$
|
3.3
|
|
Cheddar’s Scratch Kitchen (1)
|
|
$
|
4.3
|
|
|
NA
|
|
|
NA
|
|
||
Yard House
|
|
$
|
8.3
|
|
|
$
|
8.1
|
|
|
$
|
8.2
|
|
The Capital Grille
|
|
$
|
7.7
|
|
|
$
|
7.6
|
|
|
$
|
7.6
|
|
Bahama Breeze
|
|
$
|
6.2
|
|
|
$
|
6.0
|
|
|
$
|
5.9
|
|
Seasons 52
|
|
$
|
6.1
|
|
|
$
|
6.1
|
|
|
$
|
6.0
|
|
Eddie V’s
|
|
$
|
7.1
|
|
|
$
|
6.8
|
|
|
$
|
6.6
|
|
(1)
|
Fiscal 2017 excludes Cheddar’s Scratch Kitchen due to the proximity of the acquisition to our fiscal year end.
|
|
Fiscal Years
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Costs and expenses:
|
|
|
|
|
|
|||
Food and beverage
|
28.5
|
|
|
28.9
|
|
|
29.4
|
|
Restaurant labor
|
32.4
|
|
|
31.6
|
|
|
31.6
|
|
Restaurant expenses
|
17.5
|
|
|
17.6
|
|
|
16.8
|
|
Marketing expenses
|
3.1
|
|
|
3.3
|
|
|
3.4
|
|
General and administrative expenses
|
5.1
|
|
|
5.4
|
|
|
5.5
|
|
Depreciation and amortization
|
3.9
|
|
|
3.8
|
|
|
4.2
|
|
Impairments and disposal of assets, net
|
—
|
|
|
(0.1
|
)
|
|
0.1
|
|
Total operating costs and expenses
|
90.5
|
%
|
|
90.6
|
%
|
|
91.0
|
%
|
Operating income
|
9.5
|
|
|
9.4
|
|
|
9.0
|
|
Interest, net
|
2.0
|
|
|
0.6
|
|
|
2.5
|
|
Earnings before income taxes
|
7.5
|
|
|
8.9
|
|
|
6.5
|
|
Income tax expense
|
—
|
|
|
2.2
|
|
|
1.3
|
|
Earnings from continuing operations
|
7.5
|
|
|
6.7
|
|
|
5.2
|
|
Earnings (loss) from discontinued operations, net of taxes
|
(0.1
|
)
|
|
—
|
|
|
0.2
|
|
Net earnings
|
7.4
|
%
|
|
6.7
|
%
|
|
5.4
|
%
|
•
|
Food and beverage costs decreased as a percent of sales due to a 0.4% impact from pricing and a 0.4% impact related to cost savings initiatives, partially offset by a 0.3% impact from unfavorable menu mix and inflation.
|
•
|
Restaurant labor costs increased as a percent of sales primarily due to a 0.9% impact from wage-rate inflation, a 0.4% impact from Cheddar’s Scratch Kitchen’s higher labor costs relative to Darden legacy brands and a 0.2% impact related to workforce investment costs, partially offset by a 0.8% impact from sales leverage.
|
•
|
Marketing expenses decreased as a percent of sales, primarily due to sales leverage.
|
•
|
General and administrative expenses decreased as a percent of sales primarily due to a 0.2% impact from sales leverage and a 0.3% impact from a pension settlement charge incurred in fiscal 2017, partially offset by a 0.1% impact from expenses related to the integration of Cheddar’s Scratch Kitchen.
|
•
|
Food and beverage costs decreased as a percent of sales due to a 0.5% impact from pricing, a 0.3% impact related to cost savings initiatives and a 0.3% impact from food cost deflation, partially offset by a 0.5% impact from unfavorable menu mix.
|
•
|
Restaurant labor costs were flat as a percent of sales as a 0.9% impact from wage-rate inflation was offset by a 0.9% impact from sales leverage and improved productivity.
|
•
|
Restaurant expenses (which include rent, utilities, repairs and maintenance, credit card, property tax, workers’ compensation, new restaurant pre-opening and other restaurant-level operating expenses) increased as a percent of sales,
|
•
|
General and administrative expenses decreased as a percent of sales, primarily due to a 0.7% impact from expenses incurred in fiscal 2016 related to the real estate plan implementation partially offset by a 0.3% impact from a pension settlement charge incurred in fiscal 2017 and a 0.2% impact from expenses incurred in fiscal 2017 related to the acquisition and integration of Cheddar’s Scratch Kitchen.
|
•
|
Depreciation and amortization expense decreased as a percent of sales primarily from the impact of the real estate transactions.
|
|
|
Fiscal Years
|
|
Change
|
|
||||||||
Segment
|
|
2018
|
|
2017
|
|
2016
|
|
2018 vs 2017
|
|
2017 vs 2016
|
|
||
Olive Garden
|
|
20.1%
|
|
19.3%
|
|
19.8%
|
|
80
|
|
BP
|
(50
|
)
|
BP
|
LongHorn Steakhouse
|
|
17.7%
|
|
17.3%
|
|
17.3%
|
|
40
|
|
BP
|
—
|
|
BP
|
Fine Dining
|
|
20.4%
|
|
19.6%
|
|
19.5%
|
|
80
|
|
BP
|
10
|
|
BP
|
Other Business
|
|
14.8%
|
|
16.9%
|
|
16.9%
|
|
(210
|
)
|
BP
|
—
|
|
BP
|
•
|
The classification and accounting for leases as capital versus operating;
|
•
|
The rent holidays and escalation in payments that are included in the calculation of straight-line rent; and
|
•
|
The term over which leasehold improvements for each restaurant facility are amortized.
|
(in millions)
|
Goodwill
|
|
Trademarks
|
||||
Olive Garden
|
$
|
30.2
|
|
|
$
|
0.7
|
|
LongHorn Steakhouse
|
49.3
|
|
|
307.8
|
|
||
Cheddar’s Scratch Kitchen
|
311.4
|
|
|
375.0
|
|
||
Yard House
|
369.2
|
|
|
109.3
|
|
||
The Capital Grille
|
401.6
|
|
|
147.0
|
|
||
Seasons 52
|
—
|
|
|
0.5
|
|
||
Eddie V’s
|
22.0
|
|
|
10.5
|
|
||
Total
|
$
|
1,183.7
|
|
|
$
|
950.8
|
|
•
|
Moody’s Investors Service “Baa2”;
|
•
|
Standard & Poor’s “BBB”; and
|
•
|
Fitch “BBB”.
|
•
|
Moody’s Investors Service “P-2”;
|
•
|
Standard & Poor’s “A-2”; and
|
•
|
Fitch “F-2”.
|
•
|
$500.0 million
of unsecured
3.850 percent
senior notes due in
May 2027
;
|
•
|
$96.3 million
of unsecured
6.000 percent
senior notes due in
August 2035
;
|
•
|
$42.8 million
of unsecured
6.800 percent
senior notes due in
October 2037
; and
|
•
|
$300.0 million
of unsecured
4.550 percent
senior notes due in
February 2048
.
|
•
|
$53.7 million
of unsecured
6.000 percent
senior notes due in August 2035; and
|
•
|
$257.2 million
of unsecured
6.800 percent
senior notes due in October 2037.
|
(in millions)
|
|
Payments Due by Period
|
||||||||||||||||||
Contractual Obligations
|
|
Total
|
|
Less Than
1 Year |
|
1-3
Years |
|
3-5
Years |
|
More Than
5 Years |
||||||||||
Long-term debt (1)
|
|
$
|
1,679.6
|
|
|
$
|
41.6
|
|
|
$
|
83.2
|
|
|
$
|
83.2
|
|
|
$
|
1,471.6
|
|
Leases (2)
|
|
3,427.4
|
|
|
371.0
|
|
|
703.4
|
|
|
604.8
|
|
|
1,748.2
|
|
|||||
Purchase obligations (3)
|
|
537.7
|
|
|
503.7
|
|
|
31.0
|
|
|
3.0
|
|
|
—
|
|
|||||
Benefit obligations (4)
|
|
342.2
|
|
|
27.5
|
|
|
59.5
|
|
|
65.1
|
|
|
190.1
|
|
|||||
Unrecognized income tax benefits (5)
|
|
18.5
|
|
|
2.3
|
|
|
4.6
|
|
|
11.6
|
|
|
—
|
|
|||||
Total contractual obligations
|
|
$
|
6,005.4
|
|
|
$
|
946.1
|
|
|
$
|
881.7
|
|
|
$
|
767.7
|
|
|
$
|
3,409.9
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(in millions)
|
|
Amount of Commitment Expiration per Period
|
||||||||||||||||||
Other Commercial Commitments
|
|
Total
Amounts Committed |
|
Less Than
1 Year |
|
1-3
Years |
|
3-5
Years |
|
More Than
5 Years |
||||||||||
Standby letters of credit (6)
|
|
$
|
114.5
|
|
|
$
|
114.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Guarantees (7)
|
|
154.0
|
|
|
39.1
|
|
|
65.4
|
|
|
36.3
|
|
|
13.2
|
|
|||||
Total commercial commitments
|
|
$
|
268.5
|
|
|
$
|
153.6
|
|
|
$
|
65.4
|
|
|
$
|
36.3
|
|
|
$
|
13.2
|
|
(1)
|
Includes interest payments associated with existing long-term debt, including the current portion. Excludes discount and issuance costs of
$12.6 million
.
|
(2)
|
Includes all arrangements accounted for as operating, capital and financing leases. Includes imputed interest of
$79.9 million
over the life of financing lease obligations and imputed interest of
$37.9 million
over the life of capital lease obligations.
|
(3)
|
Includes commitments for food and beverage items and supplies, capital projects, information technology and other miscellaneous commitments.
|
(4)
|
Includes expected contributions associated with our defined benefit plans and payments associated with our postretirement benefit plan and our non-qualified deferred compensation plan through fiscal
2028
.
|
(5)
|
Includes interest on unrecognized income tax benefits of
$1.1 million
,
$0.3 million
of which relates to contingencies expected to be resolved within one year.
|
(6)
|
Includes letters of credit for
$96.9 million
of workers’ compensation and general liabilities accrued in our consolidated financial statements and letters of credit for
$17.6 million
related to contractual operating lease obligations and other payments.
|
(7)
|
Consists solely of guarantees associated with leased properties that have been assigned to third parties and are primarily related to the disposition of Red Lobster. We are not aware of any non-performance under these arrangements that would result in our having to perform in accordance with the terms of the guarantees.
|
Item 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
|
Page
|
|
May 27, 2018
|
|
|
May 28, 2017
|
|
|
May 29, 2016
|
|
|||
Sales
|
$
|
8,080.1
|
|
|
$
|
7,170.2
|
|
|
$
|
6,933.5
|
|
Costs and expenses:
|
|
|
|
|
|
||||||
Food and beverage
|
2,303.1
|
|
|
2,070.3
|
|
|
2,039.7
|
|
|||
Restaurant labor
|
2,614.5
|
|
|
2,265.3
|
|
|
2,189.2
|
|
|||
Restaurant expenses
|
1,417.1
|
|
|
1,265.2
|
|
|
1,163.5
|
|
|||
Marketing expenses
|
252.3
|
|
|
239.7
|
|
|
238.0
|
|
|||
General and administrative expenses
|
409.8
|
|
|
387.7
|
|
|
384.9
|
|
|||
Depreciation and amortization
|
313.1
|
|
|
272.9
|
|
|
290.2
|
|
|||
Impairments and disposal of assets, net
|
3.4
|
|
|
(8.4
|
)
|
|
5.8
|
|
|||
Total operating costs and expenses
|
$
|
7,313.3
|
|
|
$
|
6,492.7
|
|
|
$
|
6,311.3
|
|
Operating income
|
766.8
|
|
|
677.5
|
|
|
622.2
|
|
|||
Interest, net
|
161.1
|
|
|
40.2
|
|
|
172.5
|
|
|||
Earnings before income taxes
|
605.7
|
|
|
637.3
|
|
|
449.7
|
|
|||
Income tax expense
|
1.9
|
|
|
154.8
|
|
|
90.0
|
|
|||
Earnings from continuing operations
|
$
|
603.8
|
|
|
$
|
482.5
|
|
|
$
|
359.7
|
|
Earnings (loss) from discontinued operations, net of tax expense
(benefit) of $(4.8), $(4.2) and $3.4, respectively
|
(7.8
|
)
|
|
(3.4
|
)
|
|
15.3
|
|
|||
Net earnings
|
$
|
596.0
|
|
|
$
|
479.1
|
|
|
$
|
375.0
|
|
Basic net earnings per share:
|
|
|
|
|
|
||||||
Earnings from continuing operations
|
$
|
4.87
|
|
|
$
|
3.88
|
|
|
$
|
2.82
|
|
Earnings (loss) from discontinued operations
|
(0.06
|
)
|
|
(0.03
|
)
|
|
0.12
|
|
|||
Net earnings
|
$
|
4.81
|
|
|
$
|
3.85
|
|
|
$
|
2.94
|
|
Diluted net earnings per share:
|
|
|
|
|
|
||||||
Earnings from continuing operations
|
$
|
4.79
|
|
|
$
|
3.83
|
|
|
$
|
2.78
|
|
Earnings (loss) from discontinued operations
|
(0.06
|
)
|
|
(0.03
|
)
|
|
0.12
|
|
|||
Net earnings
|
$
|
4.73
|
|
|
$
|
3.80
|
|
|
$
|
2.90
|
|
Average number of common shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
124.0
|
|
|
124.3
|
|
|
127.4
|
|
|||
Diluted
|
126.0
|
|
|
126.0
|
|
|
129.3
|
|
|||
Dividends declared per common share
|
$
|
2.52
|
|
|
$
|
2.24
|
|
|
$
|
2.10
|
|
|
May 27, 2018
|
|
|
May 28, 2017
|
|
|
May 29, 2016
|
|
|||
Net earnings
|
$
|
596.0
|
|
|
$
|
479.1
|
|
|
$
|
375.0
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Foreign currency adjustment
|
(0.9
|
)
|
|
0.5
|
|
|
0.5
|
|
|||
Change in fair value of marketable securities, net of taxes of $0.0, $0.0 and $0.0, respectively
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|||
Change in fair value of derivatives and amortization of unrecognized gains and losses on derivatives, net of taxes of $0.0, $0.5 and $14.3, respectively
|
(4.6
|
)
|
|
4.3
|
|
|
23.0
|
|
|||
Net unamortized gain (loss) arising during period, including amortization of unrecognized net actuarial loss, net of taxes of $(0.7), $11.9 and $(16.0), respectively
|
(1.1
|
)
|
|
19.3
|
|
|
(23.9
|
)
|
|||
Reclassification of tax effect
|
(15.6
|
)
|
|
—
|
|
|
—
|
|
|||
Other comprehensive income (loss)
|
$
|
(22.3
|
)
|
|
$
|
24.1
|
|
|
$
|
(0.4
|
)
|
Total comprehensive income
|
$
|
573.7
|
|
|
$
|
503.2
|
|
|
$
|
374.6
|
|
|
May 27, 2018
|
|
|
May 28, 2017
|
|
||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
146.9
|
|
|
$
|
233.1
|
|
Receivables, net
|
83.7
|
|
|
75.9
|
|
||
Inventories
|
205.3
|
|
|
178.9
|
|
||
Prepaid income taxes
|
15.9
|
|
|
6.2
|
|
||
Prepaid expenses and other current assets
|
89.9
|
|
|
80.6
|
|
||
Assets held for sale
|
11.9
|
|
|
13.2
|
|
||
Total current assets
|
$
|
553.6
|
|
|
$
|
587.9
|
|
Land, buildings and equipment, net
|
2,429.8
|
|
|
2,272.3
|
|
||
Goodwill
|
1,183.7
|
|
|
1,201.7
|
|
||
Trademarks
|
950.8
|
|
|
950.2
|
|
||
Other assets
|
351.7
|
|
|
280.2
|
|
||
Total assets
|
$
|
5,469.6
|
|
|
$
|
5,292.3
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
277.0
|
|
|
$
|
249.5
|
|
Accrued payroll
|
177.5
|
|
|
149.1
|
|
||
Accrued income taxes
|
—
|
|
|
1.9
|
|
||
Other accrued taxes
|
56.6
|
|
|
54.2
|
|
||
Unearned revenues
|
415.8
|
|
|
388.6
|
|
||
Other current liabilities
|
457.6
|
|
|
445.9
|
|
||
Total current liabilities
|
$
|
1,384.5
|
|
|
$
|
1,289.2
|
|
Long-term debt
|
926.5
|
|
|
936.6
|
|
||
Deferred income taxes
|
114.0
|
|
|
145.6
|
|
||
Deferred rent
|
318.0
|
|
|
282.8
|
|
||
Other liabilities
|
531.8
|
|
|
536.4
|
|
||
Total liabilities
|
$
|
3,274.8
|
|
|
$
|
3,190.6
|
|
Stockholders’ equity:
|
|
|
|
||||
Common stock and surplus, no par value. Authorized 500.0 shares; issued 124.8 and 126.7 shares, respectively; outstanding 123.5 and 125.4 shares, respectively
|
1,631.9
|
|
|
1,614.6
|
|
||
Preferred stock, no par value. Authorized 25.0 shares; none issued and outstanding
|
—
|
|
|
—
|
|
||
Retained earnings
|
657.6
|
|
|
560.1
|
|
||
Treasury stock, 1.3 and 1.3 shares, at cost, respectively
|
(7.8
|
)
|
|
(7.8
|
)
|
||
Accumulated other comprehensive income (loss)
|
(85.2
|
)
|
|
(62.9
|
)
|
||
Unearned compensation
|
(1.7
|
)
|
|
(2.3
|
)
|
||
Total stockholders’ equity
|
$
|
2,194.8
|
|
|
$
|
2,101.7
|
|
Total liabilities and stockholders’ equity
|
$
|
5,469.6
|
|
|
$
|
5,292.3
|
|
|
Common
Stock And Surplus |
|
Retained
Earnings |
|
Treasury
Stock |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Unearned
Compensation |
|
Total
Stockholders’ Equity |
||||||||||||
Balances at May 31, 2015
|
$
|
1,405.9
|
|
|
$
|
1,026.0
|
|
|
$
|
(7.8
|
)
|
|
$
|
(86.6
|
)
|
|
$
|
(4.0
|
)
|
|
$
|
2,333.5
|
|
Net earnings
|
—
|
|
|
375.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
375.0
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
(0.4
|
)
|
||||||
Dividends declared ($2.10 per share)
|
—
|
|
|
(268.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(268.2
|
)
|
||||||
Stock option exercises (2.4 shares)
|
94.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
94.4
|
|
||||||
Stock-based compensation
|
14.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14.9
|
|
||||||
Income tax benefits credited to equity
|
17.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17.5
|
|
||||||
Repurchases of common stock (3.0 shares)
|
(34.9
|
)
|
|
(149.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(184.8
|
)
|
||||||
Issuance of stock under Employee Stock Purchase Plan and other plans (0.2 shares)
|
4.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
4.9
|
|
||||||
Separation of Four Corners Property Trust
|
—
|
|
|
(435.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(435.4
|
)
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|
0.6
|
|
||||||
Balances at May 29, 2016
|
$
|
1,502.6
|
|
|
$
|
547.5
|
|
|
$
|
(7.8
|
)
|
|
$
|
(87.0
|
)
|
|
$
|
(3.3
|
)
|
|
$
|
1,952.0
|
|
Net earnings
|
—
|
|
|
479.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
479.1
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
24.1
|
|
|
—
|
|
|
24.1
|
|
||||||
Dividends declared ($2.24 per share)
|
—
|
|
|
(279.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(279.6
|
)
|
||||||
Stock option exercises (2.7 shares)
|
107.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
107.8
|
|
||||||
Stock-based compensation
|
15.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15.6
|
|
||||||
Income tax benefits credited to equity
|
27.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27.2
|
|
||||||
Repurchases of common stock (3.7 shares)
|
(43.7
|
)
|
|
(186.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(230.2
|
)
|
||||||
Issuance of stock under Employee Stock Purchase Plan and other plans (0.2 shares)
|
5.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
5.3
|
|
||||||
Other
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
0.4
|
|
||||||
Balances at May 28, 2017
|
$
|
1,614.6
|
|
|
$
|
560.1
|
|
|
$
|
(7.8
|
)
|
|
$
|
(62.9
|
)
|
|
$
|
(2.3
|
)
|
|
$
|
2,101.7
|
|
Net earnings
|
—
|
|
|
596.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
596.0
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
(22.3
|
)
|
|
—
|
|
|
(22.3
|
)
|
||||||
Dividends declare
d ($2.52
per share)
|
—
|
|
|
(315.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(315.3
|
)
|
||||||
Stock option exercises (0.8 shares)
|
32.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32.0
|
|
||||||
Stock-based compensation
|
22.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22.7
|
|
||||||
Repurchases of common stock (2.8 shares)
|
(36.0
|
)
|
|
(198.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(234.8
|
)
|
||||||
Issuance of stock under Employee Stock Purchase Plan and other plans (0.1 shares)
|
5.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
5.8
|
|
||||||
Other
|
(7.1
|
)
|
|
15.6
|
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
9.0
|
|
||||||
Balances at May 27, 2018
|
$
|
1,631.9
|
|
|
$
|
657.6
|
|
|
$
|
(7.8
|
)
|
|
$
|
(85.2
|
)
|
|
$
|
(1.7
|
)
|
|
$
|
2,194.8
|
|
|
Fiscal Year Ended
|
||||||||||
|
May 27, 2018
|
|
|
May 28, 2017
|
|
|
May 29, 2016
|
|
|||
Cash flows - operating activities
|
|
|
|
|
|
||||||
Net earnings
|
$
|
596.0
|
|
|
$
|
479.1
|
|
|
$
|
375.0
|
|
(Earnings) losses from discontinued operations, net of tax
|
7.8
|
|
|
3.4
|
|
|
(15.3
|
)
|
|||
Adjustments to reconcile net earnings from continuing operations to cash flows:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
313.1
|
|
|
272.9
|
|
|
290.2
|
|
|||
Impairments and disposal of assets, net
|
3.4
|
|
|
(8.4
|
)
|
|
5.8
|
|
|||
Amortization of loan costs and losses on interest-rate related derivatives
|
1.6
|
|
|
1.0
|
|
|
3.6
|
|
|||
Stock-based compensation expense
|
42.8
|
|
|
40.7
|
|
|
37.3
|
|
|||
Change in current assets and liabilities
|
(8.0
|
)
|
|
112.6
|
|
|
13.7
|
|
|||
Contributions to pension and postretirement plans
|
(62.0
|
)
|
|
(1.6
|
)
|
|
(26.5
|
)
|
|||
Change in cash surrender value of trust-owned life insurance
|
(11.2
|
)
|
|
(10.3
|
)
|
|
3.3
|
|
|||
Deferred income taxes
|
(20.6
|
)
|
|
(22.9
|
)
|
|
(10.8
|
)
|
|||
Change in deferred rent
|
36.6
|
|
|
32.9
|
|
|
23.8
|
|
|||
Change in other assets and liabilities
|
14.6
|
|
|
(5.0
|
)
|
|
5.3
|
|
|||
Loss on extinguishment of debt
|
102.2
|
|
|
—
|
|
|
106.8
|
|
|||
Other, net
|
3.5
|
|
|
21.9
|
|
|
8.2
|
|
|||
Net cash provided by operating activities of continuing operations
|
$
|
1,019.8
|
|
|
$
|
916.3
|
|
|
$
|
820.4
|
|
Cash flows - investing activities
|
|
|
|
|
|
||||||
Purchases of land, buildings and equipment
|
(396.0
|
)
|
|
(293.0
|
)
|
|
(228.3
|
)
|
|||
Proceeds from disposal of land, buildings and equipment
|
3.3
|
|
|
8.3
|
|
|
325.2
|
|
|||
Cash used in business acquisitions, net of cash acquired
|
(40.4
|
)
|
|
(764.4
|
)
|
|
—
|
|
|||
Purchases of capitalized software and other assets
|
(22.8
|
)
|
|
(25.3
|
)
|
|
(23.3
|
)
|
|||
Other, net
|
4.8
|
|
|
4.7
|
|
|
1.8
|
|
|||
Net cash provided by (used in) investing activities of continuing operations
|
$
|
(451.1
|
)
|
|
$
|
(1,069.7
|
)
|
|
$
|
75.4
|
|
Cash flows - financing activities
|
|
|
|
|
|
||||||
Proceeds from issuance of common stock
|
37.8
|
|
|
113.1
|
|
|
99.3
|
|
|||
Income tax benefits credited to equity
|
—
|
|
|
27.2
|
|
|
17.5
|
|
|||
Special cash distribution from Four Corners Property Trust
|
—
|
|
|
—
|
|
|
315.0
|
|
|||
Dividends paid
|
(313.5
|
)
|
|
(279.1
|
)
|
|
(268.2
|
)
|
|||
Repurchases of common stock
|
(234.8
|
)
|
|
(230.2
|
)
|
|
(184.8
|
)
|
|||
Proceeds from issuance of short-term debt
|
960.0
|
|
|
—
|
|
|
—
|
|
|||
Repayments of short-term debt
|
(960.0
|
)
|
|
—
|
|
|
—
|
|
|||
Repayments of long-term debt
|
(408.2
|
)
|
|
—
|
|
|
(1,096.8
|
)
|
|||
Proceeds from issuance of long-term debt
|
300.0
|
|
|
500.0
|
|
|
—
|
|
|||
Principal payments on capital and financing leases
|
(5.4
|
)
|
|
(3.9
|
)
|
|
(3.4
|
)
|
|||
Proceeds from financing lease obligation
|
—
|
|
|
5.7
|
|
|
—
|
|
|||
Other, net
|
(12.5
|
)
|
|
(3.6
|
)
|
|
0.6
|
|
|||
Net cash provided by (used) in financing activities of continuing operations
|
$
|
(636.6
|
)
|
|
$
|
129.2
|
|
|
$
|
(1,120.8
|
)
|
Cash flows - discontinued operations
|
|
|
|
|
|
||||||
Net cash used in operating activities of discontinued operations
|
(18.5
|
)
|
|
(18.3
|
)
|
|
(42.4
|
)
|
|||
Net cash provided by investing activities of discontinued operations
|
0.2
|
|
|
0.8
|
|
|
6.3
|
|
|||
Net cash used in discontinued operations
|
$
|
(18.3
|
)
|
|
$
|
(17.5
|
)
|
|
$
|
(36.1
|
)
|
Decrease in cash and cash equivalents
|
(86.2
|
)
|
|
(41.7
|
)
|
|
(261.1
|
)
|
|||
Cash and cash equivalents - beginning of year
|
233.1
|
|
|
274.8
|
|
|
535.9
|
|
|||
Cash and cash equivalents - end of year
|
$
|
146.9
|
|
|
$
|
233.1
|
|
|
$
|
274.8
|
|
|
Fiscal Year Ended
|
||||||||||
|
May 27, 2018
|
|
|
May 28, 2017
|
|
|
May 29, 2016
|
|
|||
Cash flows from changes in current assets and liabilities
|
|
|
|
|
|
||||||
Receivables, net
|
$
|
(7.2
|
)
|
|
$
|
(6.5
|
)
|
|
$
|
14.0
|
|
Inventories
|
(26.6
|
)
|
|
5.0
|
|
|
(11.8
|
)
|
|||
Prepaid expenses and other current assets
|
(12.5
|
)
|
|
(1.1
|
)
|
|
(10.8
|
)
|
|||
Accounts payable
|
12.6
|
|
|
(9.0
|
)
|
|
45.6
|
|
|||
Accrued payroll
|
25.9
|
|
|
0.8
|
|
|
(5.9
|
)
|
|||
Prepaid/accrued income taxes
|
(9.9
|
)
|
|
41.4
|
|
|
(21.3
|
)
|
|||
Other accrued taxes
|
1.6
|
|
|
0.4
|
|
|
(1.4
|
)
|
|||
Unearned revenues
|
33.5
|
|
|
41.6
|
|
|
46.0
|
|
|||
Other current liabilities
|
(25.4
|
)
|
|
40.0
|
|
|
(40.7
|
)
|
|||
Change in current assets and liabilities
|
$
|
(8.0
|
)
|
|
$
|
112.6
|
|
|
$
|
13.7
|
|
(in millions)
|
May 27, 2018
|
|
May 28, 2017
|
||||
Short-term investments
|
$
|
16.8
|
|
|
$
|
102.8
|
|
Credit card receivables
|
99.6
|
|
|
93.6
|
|
||
Depository accounts
|
30.5
|
|
|
36.7
|
|
||
Total cash and cash equivalents
|
$
|
146.9
|
|
|
$
|
233.1
|
|
|
Fiscal Year
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Depreciation and amortization on buildings and equipment
|
$
|
288.8
|
|
|
$
|
253.3
|
|
|
$
|
274.4
|
|
Losses on replacement of equipment
|
4.1
|
|
|
3.2
|
|
|
5.5
|
|
(in millions)
|
May 27, 2018
|
|
May 28, 2017
|
||||
Capitalized software
|
$
|
205.7
|
|
|
$
|
190.1
|
|
Accumulated amortization
|
(127.4
|
)
|
|
(108.2
|
)
|
||
Capitalized software, net of accumulated amortization
|
$
|
78.3
|
|
|
$
|
81.9
|
|
(in millions)
|
May 27, 2018
|
|
|
May 28, 2017
|
|
||
Definite-lived intangible assets
|
$
|
83.0
|
|
|
$
|
43.4
|
|
Accumulated amortization
|
(25.7
|
)
|
|
(23.3
|
)
|
||
Definite-lived intangible assets, net of accumulated amortization
|
$
|
57.3
|
|
|
$
|
20.1
|
|
|
|
|
|
||||
Definite-lived intangible liabilities
|
$
|
(33.5
|
)
|
|
$
|
(31.6
|
)
|
Accumulated amortization
|
11.3
|
|
|
8.8
|
|
||
Definite-lived intangible liabilities, net of accumulated amortization
|
$
|
(22.2
|
)
|
|
$
|
(22.8
|
)
|
|
Fiscal Year
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Amortization expense - capitalized software
|
$
|
23.5
|
|
|
$
|
18.7
|
|
|
$
|
14.9
|
|
Amortization expense - other definite-lived intangibles
|
0.8
|
|
|
0.9
|
|
|
0.9
|
|
|
Fiscal Year
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Restaurant expense - below-market leases
|
$
|
3.1
|
|
|
$
|
1.8
|
|
|
$
|
1.8
|
|
Restaurant expense - above-market leases
|
(1.7
|
)
|
|
(1.4
|
)
|
|
(1.4
|
)
|
|
Goodwill
|
|
Trademarks
|
||||||||||||
(in millions)
|
May 27, 2018
|
|
|
May 28, 2017
|
|
|
May 27, 2018
|
|
|
May 28, 2017
|
|
||||
Olive Garden (1)
|
$
|
30.2
|
|
|
$
|
30.2
|
|
|
$
|
0.7
|
|
|
$
|
0.6
|
|
LongHorn Steakhouse
|
49.3
|
|
|
49.3
|
|
|
307.8
|
|
|
307.8
|
|
||||
Cheddar’s Scratch Kitchen
|
311.4
|
|
|
329.4
|
|
|
375.0
|
|
|
375.0
|
|
||||
Yard House
|
369.2
|
|
|
369.2
|
|
|
109.3
|
|
|
109.3
|
|
||||
The Capital Grille
|
401.6
|
|
|
401.6
|
|
|
147.0
|
|
|
147.0
|
|
||||
Seasons 52
|
—
|
|
|
—
|
|
|
0.5
|
|
|
—
|
|
||||
Eddie V’s
|
22.0
|
|
|
22.0
|
|
|
10.5
|
|
|
10.5
|
|
||||
Total
|
$
|
1,183.7
|
|
|
$
|
1,201.7
|
|
|
$
|
950.8
|
|
|
$
|
950.2
|
|
(1)
|
Goodwill related to Olive Garden is associated with the RARE Hospitality International, Inc. (RARE) acquisition and the estimated value of the direct benefits derived by Olive Garden as a result of the RARE acquisition.
|
|
Fiscal Year
|
||||||||||
(in millions, except per share data)
|
2018
|
|
2017
|
|
2016
|
||||||
Earnings from continuing operations
|
$
|
603.8
|
|
|
$
|
482.5
|
|
|
$
|
359.7
|
|
Earnings (loss) from discontinued operations
|
(7.8
|
)
|
|
(3.4
|
)
|
|
15.3
|
|
|||
Net earnings
|
$
|
596.0
|
|
|
$
|
479.1
|
|
|
$
|
375.0
|
|
Average common shares outstanding – Basic
|
124.0
|
|
|
124.3
|
|
|
127.4
|
|
|||
Effect of dilutive stock-based compensation
|
2.0
|
|
|
1.7
|
|
|
1.9
|
|
|||
Average common shares outstanding – Diluted
|
126.0
|
|
|
126.0
|
|
|
129.3
|
|
|||
Basic net earnings per share:
|
|
|
|
|
|
||||||
Earnings from continuing operations
|
$
|
4.87
|
|
|
$
|
3.88
|
|
|
$
|
2.82
|
|
Earnings (loss) from discontinued operations
|
(0.06
|
)
|
|
(0.03
|
)
|
|
0.12
|
|
|||
Net earnings
|
$
|
4.81
|
|
|
$
|
3.85
|
|
|
$
|
2.94
|
|
Diluted net earnings per share:
|
|
|
|
|
|
||||||
Earnings from continuing operations
|
$
|
4.79
|
|
|
$
|
3.83
|
|
|
$
|
2.78
|
|
Earnings (loss) from discontinued operations
|
(0.06
|
)
|
|
(0.03
|
)
|
|
0.12
|
|
|||
Net earnings
|
$
|
4.73
|
|
|
$
|
3.80
|
|
|
$
|
2.90
|
|
|
Fiscal Year Ended
|
|||||||
(in millions)
|
May 27, 2018
|
|
May 28, 2017
|
|
May 29, 2016
|
|||
Anti-dilutive restricted stock and options
|
0.3
|
|
|
0.4
|
|
|
0.3
|
|
(in millions)
|
|
Preliminary
|
|
Adjustments
|
|
Final
|
||||||
Current assets
|
|
$
|
48.2
|
|
|
$
|
(0.7
|
)
|
|
$
|
47.5
|
|
Land, buildings and equipment
|
|
191.9
|
|
|
23.0
|
|
|
214.9
|
|
|||
Trademark
|
|
375.0
|
|
|
—
|
|
|
375.0
|
|
|||
Other assets
|
|
2.2
|
|
|
20.4
|
|
|
22.6
|
|
|||
Goodwill
|
|
329.4
|
|
|
(29.5
|
)
|
|
299.9
|
|
|||
Total assets acquired
|
|
$
|
946.7
|
|
|
$
|
13.2
|
|
|
$
|
959.9
|
|
Current liabilities
|
|
43.4
|
|
|
10.1
|
|
|
53.5
|
|
|||
Other liabilities
|
|
104.3
|
|
|
2.3
|
|
|
106.6
|
|
|||
Total liabilities assumed
|
|
$
|
147.7
|
|
|
$
|
12.4
|
|
|
$
|
160.1
|
|
Net assets acquired
|
|
$
|
799.0
|
|
|
$
|
0.8
|
|
|
$
|
799.8
|
|
|
Fiscal Year Ended
|
||||||||||
(in millions)
|
May 27, 2018
|
|
May 28, 2017
|
|
May 29, 2016
|
||||||
Sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Costs and expenses:
|
|
|
|
|
|
||||||
Restaurant and marketing expenses
|
1.4
|
|
|
1.6
|
|
|
1.8
|
|
|||
Other income and expenses
|
11.2
|
|
|
6.0
|
|
|
(20.5
|
)
|
|||
Earnings (loss) before income taxes
|
(12.6
|
)
|
|
(7.6
|
)
|
|
18.7
|
|
|||
Income tax expense (benefit)
|
(4.8
|
)
|
|
(4.2
|
)
|
|
3.4
|
|
|||
Earnings (loss) from discontinued operations, net of tax
|
$
|
(7.8
|
)
|
|
$
|
(3.4
|
)
|
|
$
|
15.3
|
|
|
Fiscal Year
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Restaurant impairments
|
$
|
3.7
|
|
|
$
|
—
|
|
|
$
|
9.2
|
|
Disposal gains
|
(1.1
|
)
|
|
(10.4
|
)
|
|
(5.9
|
)
|
|||
Other
|
0.8
|
|
|
2.0
|
|
|
2.5
|
|
|||
Impairments and disposal of assets, net
|
$
|
3.4
|
|
|
$
|
(8.4
|
)
|
|
$
|
5.8
|
|
(in millions)
|
May 27, 2018
|
|
|
May 28, 2017
|
|
||
Land
|
$
|
141.5
|
|
|
$
|
136.7
|
|
Buildings
|
2,751.1
|
|
|
2,547.0
|
|
||
Equipment
|
1,581.2
|
|
|
1,444.2
|
|
||
Assets under capital leases
|
102.1
|
|
|
78.3
|
|
||
Construction in progress
|
85.6
|
|
|
62.9
|
|
||
Total land, buildings and equipment
|
$
|
4,661.5
|
|
|
$
|
4,269.1
|
|
Less accumulated depreciation and amortization
|
(2,191.6
|
)
|
|
(1,962.1
|
)
|
||
Less amortization associated with assets under capital leases
|
(40.1
|
)
|
|
(34.7
|
)
|
||
Land, buildings and equipment, net
|
$
|
2,429.8
|
|
|
$
|
2,272.3
|
|
(in millions)
|
|
Olive Garden
|
LongHorn Steakhouse
|
Fine Dining
|
Other Business
|
Corporate
|
Consolidated
|
||||||||||||
At May 28, 2017 and for the year ended
|
|
||||||||||||||||||
Sales
|
|
$
|
3,938.6
|
|
$
|
1,622.2
|
|
$
|
535.6
|
|
$
|
1,073.8
|
|
$
|
—
|
|
$
|
7,170.2
|
|
Restaurant and marketing expenses
|
|
3,176.8
|
|
1,341.3
|
|
430.6
|
|
891.8
|
|
—
|
|
5,840.5
|
|
||||||
Segment profit
|
|
$
|
761.8
|
|
$
|
280.9
|
|
$
|
105.0
|
|
$
|
182.0
|
|
$
|
—
|
|
$
|
1,329.7
|
|
|
|
|
|
|
|
|
|
||||||||||||
Depreciation and amortization
|
|
$
|
123.3
|
|
$
|
65.1
|
|
$
|
29.1
|
|
$
|
55.4
|
|
$
|
—
|
|
$
|
272.9
|
|
Impairments and disposal of assets, net
|
|
(1.5
|
)
|
(0.1
|
)
|
—
|
|
(6.2
|
)
|
(0.6
|
)
|
(8.4
|
)
|
||||||
Segment assets
|
|
949.2
|
|
948.9
|
|
869.9
|
|
1,964.7
|
|
559.6
|
|
5,292.3
|
|
||||||
Purchases of land, buildings and equipment
|
|
131.4
|
|
54.1
|
|
41.1
|
|
62.7
|
|
3.7
|
|
293.0
|
|
(in millions)
|
|
Olive Garden
|
LongHorn Steakhouse
|
Fine Dining
|
Other Business
|
Corporate
|
Consolidated
|
||||||||||||
At May 29, 2016 and for the year ended
|
|
||||||||||||||||||
Sales
|
|
$
|
3,838.6
|
|
$
|
1,587.7
|
|
$
|
514.1
|
|
$
|
993.1
|
|
$
|
—
|
|
$
|
6,933.5
|
|
Restaurant and marketing expenses
|
|
3,079.4
|
|
1,312.4
|
|
413.6
|
|
825.0
|
|
—
|
|
5,630.4
|
|
||||||
Segment profit
|
|
$
|
759.2
|
|
$
|
275.3
|
|
$
|
100.5
|
|
$
|
168.1
|
|
$
|
—
|
|
$
|
1,303.1
|
|
|
|
|
|
|
|
|
|
||||||||||||
Depreciation and amortization
|
|
$
|
135.5
|
|
$
|
72.6
|
|
$
|
28.6
|
|
$
|
53.5
|
|
$
|
—
|
|
$
|
290.2
|
|
Impairments and disposal of assets, net
|
|
(1.4
|
)
|
(1.5
|
)
|
0.7
|
|
6.0
|
|
2.0
|
|
5.8
|
|
||||||
Purchases of land, buildings and equipment
|
|
95.6
|
|
46.9
|
|
21.4
|
|
60.5
|
|
3.9
|
|
228.3
|
|
|
Fiscal Year Ended
|
||||||||||
(in millions)
|
May 27, 2018
|
|
May 28, 2017
|
|
May 29, 2016
|
||||||
Segment profit
|
$
|
1,493.1
|
|
|
$
|
1,329.7
|
|
|
$
|
1,303.1
|
|
Less general and administrative expenses
|
(409.8
|
)
|
|
(387.7
|
)
|
|
(384.9
|
)
|
|||
Less depreciation and amortization
|
(313.1
|
)
|
|
(272.9
|
)
|
|
(290.2
|
)
|
|||
Less impairments and disposal of assets, net
|
(3.4
|
)
|
|
8.4
|
|
|
(5.8
|
)
|
|||
Less interest, net
|
(161.1
|
)
|
|
(40.2
|
)
|
|
(172.5
|
)
|
|||
Earnings before income taxes
|
$
|
605.7
|
|
|
$
|
637.3
|
|
|
$
|
449.7
|
|
(in millions)
|
May 27, 2018
|
|
|
May 28, 2017
|
|
||
3.850% senior notes due May 2027
|
$
|
500.0
|
|
|
$
|
500.0
|
|
6.000% senior notes due August 2035
|
96.3
|
|
|
150.0
|
|
||
6.800% senior notes due October 2037
|
42.8
|
|
|
300.0
|
|
||
4.550% senior notes due February 2048
|
300.0
|
|
|
—
|
|
||
Total long-term debt
|
$
|
939.1
|
|
|
$
|
950.0
|
|
Less unamortized discount and issuance costs
|
(12.6
|
)
|
|
(13.4
|
)
|
||
Total long-term debt less unamortized discount and issuance costs
|
$
|
926.5
|
|
|
$
|
936.6
|
|
•
|
$53.7 million
of unsecured
6.000 percent
senior notes due in August 2035; and
|
•
|
$257.2 million
of unsecured
6.800 percent
senior notes due in October 2037.
|
(in millions)
|
|
|
||||||||||||||||||||||
Fiscal Year
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
||||||||||||
Debt repayments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
939.1
|
|
|
|
|
|
|
|
|
Fair Values
|
|||||||||||||||||||
(in millions, except
per share data)
|
Number of Shares Outstanding
|
|
Weighted-Average
Per Share Forward Rates
|
|
Notional Values
|
|
Derivative Assets (1)
|
|
Derivative Liabilities (1)
|
|||||||||||||||||
|
May 27, 2018
|
|
May 27, 2018
|
|
May 28, 2017
|
|
May 27, 2018
|
|
May 28, 2017
|
|||||||||||||||||
Equity Forwards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Designated
|
0.4
|
|
|
$
|
77.66
|
|
|
$
|
29.1
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
Not designated
|
0.6
|
|
|
$
|
59.34
|
|
|
$
|
36.1
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
||||
Total equity forwards
|
|
|
|
|
|
|
$
|
0.6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.4
|
|
|||||
Commodity contracts
|
N/A
|
|
|
N/A
|
|
|
$
|
6.7
|
|
|
$
|
0.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Total derivative contracts
|
|
|
|
|
|
|
$
|
1.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.4
|
|
(1)
|
Derivative assets and liabilities are included in receivables, net, and other current liabilities, as applicable, on our consolidated balance sheets.
|
|
|
Amount of Gain (Loss) Recognized in AOCI (Effective Portion)
|
|
Amount of Gain (Loss) Reclassified from AOCI to Earnings (Effective Portion)
|
|
Amount of Gain (Loss) Recognized in Earnings (Ineffective Portion)
|
||||||||||||||||||||||||||||||
|
|
Fiscal Year
|
|
Fiscal Year
|
|
Fiscal Year
|
||||||||||||||||||||||||||||||
(in millions)
|
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||||||||
Equity (1)
|
|
$
|
(5.3
|
)
|
|
$
|
3.7
|
|
|
$
|
2.0
|
|
|
$
|
(0.2
|
)
|
|
$
|
(1.4
|
)
|
|
$
|
2.1
|
|
|
$
|
—
|
|
|
$
|
0.5
|
|
|
$
|
0.9
|
|
Commodity (2)
|
|
0.9
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Interest rate (3)
|
|
—
|
|
|
(1.3
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(37.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||
Total
|
|
$
|
(4.4
|
)
|
|
$
|
2.4
|
|
|
$
|
2.0
|
|
|
$
|
—
|
|
|
$
|
(1.4
|
)
|
|
$
|
(35.3
|
)
|
|
$
|
—
|
|
|
$
|
0.5
|
|
|
$
|
0.9
|
|
(1)
|
Location of the gain (loss) reclassified from AOCI to earnings as well as the gain (loss) recognized in earnings for the ineffective portion of the hedge is restaurant labor expenses and general and administrative expenses.
|
(2)
|
Location of the gain (loss) reclassified from AOCI to earnings as well as the gain (loss) recognized in earnings for the ineffective portion of the hedge is food and beverage costs and restaurant expenses.
|
(3)
|
Location of the gain (loss) reclassified from AOCI to earnings as well as the gain (loss) recognized in earnings for the ineffective portion of the hedge is interest, net.
|
|
|
Amount of Gain (Loss)
Recognized in Earnings |
||||||||||
(in millions)
|
|
Fiscal Year
|
||||||||||
Location of Gain (Loss) Recognized in Earnings on Derivatives
|
|
2018
|
|
2017
|
|
2016
|
||||||
Restaurant labor expenses
|
|
$
|
1.5
|
|
|
$
|
5.3
|
|
|
$
|
3.9
|
|
General and administrative expenses
|
|
2.1
|
|
|
8.9
|
|
|
7.5
|
|
|||
Total
|
|
$
|
3.6
|
|
|
$
|
14.2
|
|
|
$
|
11.4
|
|
Items Measured at Fair Value at May 27, 2018
|
|||||||||||||||||
(in millions)
|
|
|
Fair Value
of Assets
(Liabilities)
|
|
Quoted Prices
in Active Market for Identical Assets (Liabilities) (Level 1) |
|
Significant
Other Observable Inputs (Level 2) |
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||
Commodities futures, swaps & options
|
(1)
|
|
$
|
0.5
|
|
|
$
|
—
|
|
|
$
|
0.5
|
|
|
$
|
—
|
|
Equity forwards
|
(2)
|
|
0.6
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
||||
Total
|
|
|
$
|
1.1
|
|
|
$
|
—
|
|
|
$
|
1.1
|
|
|
$
|
—
|
|
Items Measured at Fair Value at May 28, 2017
|
|||||||||||||||||
(in millions)
|
|
|
Fair Value
of Assets
(Liabilities)
|
|
Quoted Prices
in Active Market for Identical Assets (Liabilities) (Level 1) |
|
Significant
Other Observable Inputs (Level 2) |
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Fixed-income securities:
|
|
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
(3)
|
|
$
|
1.1
|
|
|
$
|
—
|
|
|
$
|
1.1
|
|
|
$
|
—
|
|
U.S. Treasury securities
|
(4)
|
|
2.0
|
|
|
2.0
|
|
|
—
|
|
|
—
|
|
||||
Mortgage-backed securities
|
(3)
|
|
1.0
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
||||
Derivatives:
|
|
|
|
|
|
|
|
|
|
||||||||
Equity forwards
|
(2)
|
|
(0.4
|
)
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
||||
Total
|
|
|
$
|
3.7
|
|
|
$
|
2.0
|
|
|
$
|
1.7
|
|
|
$
|
—
|
|
(1)
|
The fair value of our commodities futures, swaps and options is based on closing market prices of the contracts, inclusive of the risk of nonperformance.
|
(2)
|
The fair value of equity forwards is based on the closing market value of Darden stock, inclusive of the risk of nonperformance.
|
(3)
|
The fair value of these securities is based on closing market prices of the investments when applicable, or, alternatively, valuations utilizing market data and other observable inputs, inclusive of the risk of nonperformance.
|
(4)
|
The fair value of our U.S. Treasury securities is based on closing market prices.
|
(in millions)
|
Foreign Currency Translation Adjustment
|
|
Unrealized Gains (Losses) on Marketable Securities
|
|
Unrealized Gains (Losses) on Derivatives
|
|
Benefit Plan Funding Position
|
|
Accumulated Other Comprehensive Income (Loss)
|
||||||||||
Balances at May 29, 2016
|
$
|
(1.2
|
)
|
|
$
|
0.1
|
|
|
$
|
3.9
|
|
|
$
|
(89.8
|
)
|
|
$
|
(87.0
|
)
|
Gain (loss)
|
0.5
|
|
|
—
|
|
|
2.9
|
|
|
6.4
|
|
|
9.8
|
|
|||||
Reclassification realized in net earnings
|
—
|
|
|
—
|
|
|
1.4
|
|
|
12.9
|
|
|
14.3
|
|
|||||
Balances at May 28, 2017
|
$
|
(0.7
|
)
|
|
$
|
0.1
|
|
|
$
|
8.2
|
|
|
$
|
(70.5
|
)
|
|
$
|
(62.9
|
)
|
Gain (loss)
|
(0.9
|
)
|
|
—
|
|
|
(4.6
|
)
|
|
(1.0
|
)
|
|
(6.5
|
)
|
|||||
Reclassification realized in net earnings
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|||||
Reclassification of tax effect (1)
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|
(15.4
|
)
|
|
(15.6
|
)
|
|||||
Balances at May 27, 2018
|
$
|
(1.6
|
)
|
|
$
|
—
|
|
|
$
|
3.4
|
|
|
$
|
(87.0
|
)
|
|
$
|
(85.2
|
)
|
(1)
|
Stranded tax effects reclassified from accumulated other comprehensive income (loss) to retained earnings from the adoption of ASU 2018-02.
|
|
|
|
Fiscal Year
|
||||||
(in millions)
AOCI Components
|
Location of Gain (Loss) Recognized in Earnings
|
|
May 27,
2018 |
|
May 28,
2017 |
||||
Derivatives
|
|
|
|
|
|
||||
Commodity contracts
|
(1)
|
|
$
|
0.3
|
|
|
$
|
—
|
|
Equity contracts
|
(2)
|
|
(0.2
|
)
|
|
(1.4
|
)
|
||
Interest rate contracts
|
(3)
|
|
(0.1
|
)
|
|
—
|
|
||
|
Total before tax
|
|
$
|
—
|
|
|
$
|
(1.4
|
)
|
|
Tax benefit
|
|
—
|
|
|
—
|
|
||
|
Net of tax
|
|
$
|
—
|
|
|
$
|
(1.4
|
)
|
Benefit plan funding position
|
|
|
|
|
|
||||
Pension/postretirement plans
|
|
|
|
|
|
||||
Actuarial losses
|
(4)
|
|
$
|
(2.8
|
)
|
|
$
|
(3.3
|
)
|
Settlement loss
|
(4)
|
|
—
|
|
|
(19.9
|
)
|
||
Total - pension/postretirement plans
|
|
|
$
|
(2.8
|
)
|
|
$
|
(23.2
|
)
|
Recognized net actuarial gain - other plans
|
(5)
|
|
3.0
|
|
|
2.3
|
|
||
|
Total before tax
|
|
$
|
0.2
|
|
|
$
|
(20.9
|
)
|
|
Tax benefit (expense)
|
|
(0.1
|
)
|
|
8.0
|
|
||
|
Net of tax
|
|
$
|
0.1
|
|
|
$
|
(12.9
|
)
|
(1)
|
Primarily included in food and beverage costs and restaurant expenses. See Note 8 for additional details.
|
(2)
|
Primarily included in restaurant labor costs and general and administrative expenses. See Note 8 for additional details.
|
(3)
|
Included in interest, net, on our consolidated statements of earnings.
|
(4)
|
Included in the computation of net periodic benefit costs - pension and postretirement plans, which is a component of restaurant labor expenses and general and administrative expenses. See Note 14 for additional details.
|
(5)
|
Included in the computation of net periodic benefit costs - other plans, which is a component of general and administrative expenses.
|
|
Fiscal Year
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Restaurant minimum rent
|
$
|
321.8
|
|
|
$
|
286.8
|
|
|
$
|
233.6
|
|
Restaurant rent averaging expense
|
30.2
|
|
|
26.0
|
|
|
15.9
|
|
|||
Restaurant percentage rent
|
7.2
|
|
|
7.9
|
|
|
8.0
|
|
|||
Other
|
11.8
|
|
|
11.3
|
|
|
8.1
|
|
|||
Total rent expense
|
$
|
371.0
|
|
|
$
|
332.0
|
|
|
$
|
265.6
|
|
(in millions)
|
May 27, 2018
|
|
|
May 28, 2017
|
|
||
Receivables, net
|
|
|
|
||||
Retail outlet gift card sales
|
$
|
40.4
|
|
|
$
|
43.0
|
|
Landlord allowances due
|
18.1
|
|
|
14.2
|
|
||
Miscellaneous
|
25.5
|
|
|
19.0
|
|
||
Allowance for doubtful accounts
|
(0.3
|
)
|
|
(0.3
|
)
|
||
Total
|
$
|
83.7
|
|
|
$
|
75.9
|
|
|
|
|
|
||||
Other Current Liabilities
|
|
|
|
||||
Non-qualified deferred compensation plan
|
$
|
227.9
|
|
|
$
|
210.3
|
|
Sales and other taxes
|
72.7
|
|
|
66.9
|
|
||
Insurance-related
|
40.1
|
|
|
41.7
|
|
||
Employee benefits
|
39.9
|
|
|
41.8
|
|
||
Accrued interest
|
7.5
|
|
|
7.3
|
|
||
Miscellaneous
|
69.5
|
|
|
77.9
|
|
||
Total
|
$
|
457.6
|
|
|
$
|
445.9
|
|
|
Fiscal Year
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Interest, net
|
|
|
|
|
|
||||||
Interest expense (1)
|
$
|
152.4
|
|
|
$
|
34.4
|
|
|
$
|
165.4
|
|
Imputed interest on capital and financing leases
|
11.4
|
|
|
8.8
|
|
|
8.9
|
|
|||
Capitalized interest
|
(1.9
|
)
|
|
(1.7
|
)
|
|
(0.7
|
)
|
|||
Interest income
|
(0.8
|
)
|
|
(1.3
|
)
|
|
(1.1
|
)
|
|||
Total
|
$
|
161.1
|
|
|
$
|
40.2
|
|
|
$
|
172.5
|
|
(1)
|
Interest expense in fiscal
2018
and
2016
includes approximately
$102.2 million
and
$106.8 million
, respectively, of expenses associated with the retirement of long-term debt.
|
|
Fiscal Year
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Cash paid during the fiscal year for:
|
|
|
|
|
|
||||||
Interest, net of amounts capitalized (1)
|
$
|
155.5
|
|
|
$
|
37.0
|
|
|
$
|
140.8
|
|
Income taxes, net of refunds
|
$
|
25.7
|
|
|
$
|
106.2
|
|
|
$
|
128.0
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Increase in land, buildings and equipment through accrued purchases
|
$
|
37.5
|
|
|
$
|
22.8
|
|
|
$
|
14.9
|
|
Net book value of assets distributed in Four Corners separation, net of deferred tax liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
750.4
|
|
(1)
|
Interest paid in fiscal
2018
and
2016
includes approximately
$97.3 million
and
$68.7 million
, respectively, of payments associated with the retirement of long-term debt.
|
|
Fiscal Year
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Earnings from continuing operations
|
$
|
1.9
|
|
|
$
|
154.8
|
|
|
$
|
90.0
|
|
Earnings from discontinued operations
|
(4.8
|
)
|
|
(4.2
|
)
|
|
3.4
|
|
|||
Total consolidated income tax expense (benefit)
|
$
|
(2.9
|
)
|
|
$
|
150.6
|
|
|
$
|
93.4
|
|
|
Fiscal Year
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Earnings from continuing operations before income taxes:
|
|
|
|
|
|
||||||
U.S.
|
$
|
602.7
|
|
|
$
|
632.3
|
|
|
$
|
450.6
|
|
Foreign
|
3.0
|
|
|
5.0
|
|
|
(0.9
|
)
|
|||
Earnings from continuing operations before income taxes
|
$
|
605.7
|
|
|
$
|
637.3
|
|
|
$
|
449.7
|
|
Income taxes:
|
|
|
|
|
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
10.2
|
|
|
$
|
160.5
|
|
|
$
|
89.1
|
|
State and local
|
8.9
|
|
|
22.2
|
|
|
2.7
|
|
|||
Foreign
|
1.8
|
|
|
1.3
|
|
|
1.9
|
|
|||
Total current
|
$
|
20.9
|
|
|
$
|
184.0
|
|
|
$
|
93.7
|
|
Deferred (principally U.S.):
|
|
|
|
|
|
||||||
Federal
|
$
|
(25.1
|
)
|
|
$
|
(24.1
|
)
|
|
$
|
(2.4
|
)
|
State and local
|
6.1
|
|
|
(5.1
|
)
|
|
(1.3
|
)
|
|||
Total deferred
|
$
|
(19.0
|
)
|
|
$
|
(29.2
|
)
|
|
$
|
(3.7
|
)
|
Total income taxes
|
$
|
1.9
|
|
|
$
|
154.8
|
|
|
$
|
90.0
|
|
|
Fiscal Year
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
U.S. statutory rate
|
29.4
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State and local income taxes, net of federal tax benefits
|
1.8
|
|
|
1.7
|
|
|
1.2
|
|
Enactment of the Tax Act
|
(13.1
|
)
|
|
—
|
|
|
—
|
|
Benefit of federal income tax credits
|
(12.8
|
)
|
|
(9.2
|
)
|
|
(12.5
|
)
|
Other, net
|
(5.0
|
)
|
|
(3.2
|
)
|
|
(3.7
|
)
|
Effective income tax rate
|
0.3
|
%
|
|
24.3
|
%
|
|
20.0
|
%
|
|
Fiscal Year
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Interest expense on unrecognized tax benefits
|
$
|
0.8
|
|
|
$
|
0.6
|
|
|
$
|
0.5
|
|
(in millions)
|
May 27, 2018
|
|
|
May 28, 2017
|
|
||
Accrued liabilities
|
$
|
66.6
|
|
|
$
|
137.1
|
|
Compensation and employee benefits
|
99.8
|
|
|
174.6
|
|
||
Deferred rent and interest income
|
81.1
|
|
|
110.3
|
|
||
Net operating loss, credit and charitable contribution carryforwards
|
71.9
|
|
|
78.0
|
|
||
Other
|
5.3
|
|
|
6.9
|
|
||
Gross deferred tax assets
|
$
|
324.7
|
|
|
$
|
506.9
|
|
Valuation allowance
|
(26.6
|
)
|
|
(17.0
|
)
|
||
Deferred tax assets, net of valuation allowance
|
$
|
298.1
|
|
|
$
|
489.9
|
|
Trademarks and other acquisition related intangibles
|
(201.8
|
)
|
|
(310.7
|
)
|
||
Buildings and equipment
|
(176.9
|
)
|
|
(275.4
|
)
|
||
Capitalized software and other assets
|
(24.4
|
)
|
|
(38.1
|
)
|
||
Other
|
(9.0
|
)
|
|
(11.3
|
)
|
||
Gross deferred tax liabilities
|
$
|
(412.1
|
)
|
|
$
|
(635.5
|
)
|
Net deferred tax liabilities
|
$
|
(114.0
|
)
|
|
$
|
(145.6
|
)
|
|
Fiscal Year
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Defined benefit pension plans funding (1)
|
$
|
60.8
|
|
|
$
|
0.4
|
|
|
$
|
25.4
|
|
Postretirement benefit plan funding
|
1.2
|
|
|
1.2
|
|
|
1.1
|
|
(1)
|
Fundings for fiscal 2018 and 2016 include voluntary funding contributions of
$60.4 million
and
$25.0 million
, respectively.
|
|
Defined Benefit Plans
|
|
Postretirement Benefit Plan
|
||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Change in Benefit Obligation:
|
|
|
|
|
|
|
|
||||||||
Benefit obligation at beginning of period
|
$
|
252.3
|
|
|
$
|
298.5
|
|
|
$
|
20.8
|
|
|
$
|
19.9
|
|
Service cost
|
—
|
|
|
—
|
|
|
0.1
|
|
|
0.2
|
|
||||
Interest cost
|
8.6
|
|
|
10.1
|
|
|
0.7
|
|
|
0.6
|
|
||||
Plan settlements
|
—
|
|
|
(44.2
|
)
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(15.6
|
)
|
|
(10.0
|
)
|
|
(1.2
|
)
|
|
(1.2
|
)
|
||||
Actuarial (gain) loss
|
(8.1
|
)
|
|
(2.1
|
)
|
|
(0.5
|
)
|
|
1.3
|
|
||||
Benefit obligation at end of period
|
$
|
237.2
|
|
|
$
|
252.3
|
|
|
$
|
19.9
|
|
|
$
|
20.8
|
|
Change in Plan Assets:
|
|
|
|
|
|
|
|
||||||||
Fair value at beginning of period
|
$
|
207.7
|
|
|
$
|
242.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Actual return on plan assets
|
0.9
|
|
|
19.5
|
|
|
—
|
|
|
—
|
|
||||
Employer contributions
|
60.8
|
|
|
0.4
|
|
|
1.2
|
|
|
1.2
|
|
||||
Plan settlements
|
—
|
|
|
(44.2
|
)
|
|
—
|
|
|
—
|
|
||||
Benefits paid
|
(15.6
|
)
|
|
(10.0
|
)
|
|
(1.2
|
)
|
|
(1.2
|
)
|
||||
Fair value at end of period
|
$
|
253.8
|
|
|
$
|
207.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Funded (unfunded) status at end of period
|
$
|
16.6
|
|
|
$
|
(44.6
|
)
|
|
$
|
(19.9
|
)
|
|
$
|
(20.8
|
)
|
|
Defined Benefit Plans
|
|
Postretirement Benefit Plan
|
||||||||||||
(in millions)
|
May 27,
2018 |
|
May 28,
2017 |
|
May 27,
2018 |
|
May 28,
2017 |
||||||||
Components of the Consolidated Balance Sheets:
|
|
|
|
|
|
|
|
||||||||
Current liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.4
|
|
|
$
|
1.3
|
|
Noncurrent (assets) liabilities
|
(16.6
|
)
|
|
44.6
|
|
|
18.5
|
|
|
19.5
|
|
||||
Net amounts recognized
|
$
|
(16.6
|
)
|
|
$
|
44.6
|
|
|
$
|
19.9
|
|
|
$
|
20.8
|
|
Amounts Recognized in Accumulated Other Comprehensive Income (Loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Prior service credit
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7.4
|
|
|
$
|
9.0
|
|
Net actuarial gain (loss)
|
(85.4
|
)
|
|
(70.1
|
)
|
|
(9.6
|
)
|
|
(9.3
|
)
|
||||
Net amounts recognized
|
$
|
(85.4
|
)
|
|
$
|
(70.1
|
)
|
|
$
|
(2.2
|
)
|
|
$
|
(0.3
|
)
|
(in millions)
|
May 27, 2018
|
|
|
May 28, 2017
|
|
||
Accumulated benefit obligation for all defined benefit plans
|
$
|
237.2
|
|
|
$
|
252.3
|
|
Pension plans with accumulated benefit obligations in excess of plan assets:
|
|
|
|
||||
Accumulated benefit obligation
|
—
|
|
|
252.3
|
|
||
Fair value of plan assets
|
—
|
|
|
207.7
|
|
||
Projected benefit obligations for all plans with projected benefit obligations in excess of plan assets
|
—
|
|
|
252.3
|
|
|
Defined Benefit Plans
|
|
Postretirement Benefit Plan
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Weighted-average assumptions used to determine benefit obligations at May 27 and May 28 (1)
|
|
|
|
|
|
|
|
||||
Discount rate
|
4.32
|
%
|
|
4.06
|
%
|
|
4.28
|
%
|
|
3.98
|
%
|
Rate of future compensation increases
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
Weighted-average assumptions used to determine net expense for fiscal years ended May 27 and May 28 (2)
|
|
|
|
|
|
|
|
||||
Discount rate
|
4.06
|
%
|
|
4.18
|
%
|
|
3.98
|
%
|
|
4.00
|
%
|
Expected long-term rate of return on plan assets
|
5.75
|
%
|
|
6.50
|
%
|
|
N/A
|
|
|
N/A
|
|
Rate of future compensation increases
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
(1)
|
Determined as of the end of fiscal year.
|
(2)
|
Determined as of the beginning of fiscal year.
|
|
Defined Benefit Plans
|
|
Postretirement Benefit Plan
|
||||||||||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
0.2
|
|
|
$
|
0.2
|
|
Interest cost
|
8.6
|
|
|
10.1
|
|
|
10.6
|
|
|
0.7
|
|
|
0.6
|
|
|
0.8
|
|
||||||
Expected return on plan assets
|
(12.0
|
)
|
|
(16.0
|
)
|
|
(14.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of unrecognized prior service cost
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.8
|
)
|
|
(4.8
|
)
|
|
(4.8
|
)
|
||||||
Recognized net actuarial loss
|
2.8
|
|
|
3.3
|
|
|
2.8
|
|
|
1.7
|
|
|
1.7
|
|
|
1.2
|
|
||||||
Settlement loss recognized
|
—
|
|
|
19.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net pension and postretirement cost (benefit)
|
$
|
(0.6
|
)
|
|
$
|
17.3
|
|
|
$
|
(1.1
|
)
|
|
$
|
(2.3
|
)
|
|
$
|
(2.3
|
)
|
|
$
|
(2.6
|
)
|
|
|
|
Items Measured at Fair Value at May 27, 2018
|
||||||||||||||
(in millions)
|
|
|
Fair Value
of Assets
(Liabilities)
|
|
Quoted Prices
in Active
Market for
Identical Assets
(Liabilities)
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Fixed-Income:
|
|
|
|
|
|
|
|
|
|
||||||||
Global Fixed-Income Commingled Funds
|
(1)
|
|
$
|
253.5
|
|
|
$
|
—
|
|
|
$
|
253.5
|
|
|
$
|
—
|
|
Cash and Accruals
|
|
|
0.3
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
|
$
|
253.8
|
|
|
$
|
0.3
|
|
|
$
|
253.5
|
|
|
$
|
—
|
|
(1)
|
Global fixed-income commingled funds are comprised of investments in U.S. and non-U.S. government fixed-income securities. Investments are valued using a unit price or net asset value (NAV) based on the fair value of the underlying investments of the fund. There are no redemption restrictions associated with this fund.
|
|
|
|
Items Measured at Fair Value at May 28, 2017
|
||||||||||||||
(in millions)
|
|
|
Fair Value
of Assets
(Liabilities)
|
|
Quoted Prices
in Active
Market for
Identical Assets
(Liabilities)
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Equity:
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. Commingled Funds
|
(1)
|
|
$
|
63.7
|
|
|
$
|
—
|
|
|
$
|
63.7
|
|
|
$
|
—
|
|
International Commingled Fund
|
(2)
|
|
22.8
|
|
|
—
|
|
|
22.8
|
|
|
—
|
|
||||
Emerging Market Commingled Fund
|
(3)
|
|
6.0
|
|
|
—
|
|
|
6.0
|
|
|
—
|
|
||||
Emerging Market Mutual Fund
|
(4)
|
|
5.7
|
|
|
5.7
|
|
|
—
|
|
|
—
|
|
||||
Real Estate Commingled Fund
|
(5)
|
|
6.0
|
|
|
—
|
|
|
6.0
|
|
|
—
|
|
||||
Fixed-Income:
|
|
|
|
|
|
|
|
|
|
||||||||
Global Fixed-Income Commingled Fund
|
(6)
|
|
20.6
|
|
|
—
|
|
|
20.6
|
|
|
—
|
|
||||
U.S. Fixed-Income Commingled Funds
|
(7)
|
|
82.4
|
|
|
—
|
|
|
82.4
|
|
|
—
|
|
||||
Cash and Accruals
|
|
|
0.5
|
|
|
0.5
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
|
$
|
207.7
|
|
|
$
|
6.2
|
|
|
$
|
201.5
|
|
|
$
|
—
|
|
(1)
|
U.S. commingled funds are comprised of investments in funds that purchase publicly traded U.S. common stock for total return purposes. Investments are valued using a unit price or NAV based on the fair value of the underlying investments of the funds. There are no redemption restrictions associated with these funds.
|
(2)
|
International commingled fund is comprised of investments in funds that purchase publicly traded non-U.S. common stock for total return purposes. Investments are valued using a unit price or NAV based on the fair value of the underlying investments of the fund. There are no redemption restrictions associated with this fund.
|
(3)
|
Emerging market commingled fund and developed market securities are comprised of investments in funds that purchase publicly traded common stock of non-U.S. companies in emerging economies for total return purposes. Funds are valued using a unit price or NAV based on the fair value of the underlying investments of the funds. There are no redemption restrictions associated with these funds.
|
(4)
|
Emerging market mutual fund is comprised of securities associated with emerging markets and frontier markets. Fund is valued using quoted market prices from national exchanges.
|
(5)
|
Real estate commingled fund is comprised of investments in funds that purchase publicly traded common stock of real estate companies for purposes of total return. These investments are valued using a unit price or NAV based on the fair value of the underlying investments of the fund. There are no redemption restrictions associated with this fund.
|
(6)
|
Global fixed-income commingled fund is comprised of investments in U.S. and non-U.S. government fixed-income securities. Investments are valued using a unit price or NAV based on the fair value of the underlying investments of the fund. There are no redemption restrictions associated with this fund.
|
(7)
|
U.S. fixed-income commingled funds are comprised of a diversified portfolio of U.S. investment-grade corporate and government securities. Investments are valued using a unit price or NAV based on the fair value of the underlying investments of the funds. There are no redemption restrictions associated with these funds.
|
(in millions)
|
|
Defined Benefit Plans
|
|
Postretirement Benefit Plan
|
||||
2019
|
|
$
|
12.7
|
|
|
$
|
1.4
|
|
2020
|
|
12.8
|
|
|
1.4
|
|
||
2021
|
|
13.1
|
|
|
1.4
|
|
||
2022
|
|
13.2
|
|
|
1.4
|
|
||
2023
|
|
13.5
|
|
|
1.3
|
|
||
2024-2028
|
|
71.9
|
|
|
6.6
|
|
|
Fiscal Year
|
||||||||||
(in millions)
|
2018
|
|
2017
|
|
2016
|
||||||
Stock options
|
$
|
4.6
|
|
|
$
|
6.0
|
|
|
$
|
7.8
|
|
Restricted stock/restricted stock units
|
3.9
|
|
|
1.9
|
|
|
1.6
|
|
|||
Darden stock units
|
20.1
|
|
|
20.9
|
|
|
15.9
|
|
|||
Cash-settled performance stock units
|
—
|
|
|
4.2
|
|
|
6.5
|
|
|||
Equity-settled performance-based restricted stock units
|
11.7
|
|
|
5.3
|
|
|
2.7
|
|
|||
Employee stock purchase plan
|
1.3
|
|
|
1.1
|
|
|
1.1
|
|
|||
Director compensation program/other
|
1.2
|
|
|
1.3
|
|
|
1.7
|
|
|||
Total
|
$
|
42.8
|
|
|
$
|
40.7
|
|
|
$
|
37.3
|
|
|
|
|
|
|
|
||||||
Income tax benefits (1)
|
$
|
12.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
In accordance with the fiscal 2018 adoption of ASU 2016-09, excess tax benefits are recognized in our provision for income taxes rather than in equity as previously recognized.
|
|
Stock Options
Granted in Fiscal Year
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Weighted-average fair value
|
$
|
14.63
|
|
|
$
|
9.08
|
|
|
$
|
12.72
|
|
Dividend yield
|
3.0
|
%
|
|
3.5
|
%
|
|
3.3
|
%
|
|||
Expected volatility of stock
|
23.5
|
%
|
|
24.3
|
%
|
|
28.0
|
%
|
|||
Risk-free interest rate
|
2.0
|
%
|
|
1.4
|
%
|
|
1.9
|
%
|
|||
Expected option life (in years)
|
6.4
|
|
|
6.5
|
|
|
6.5
|
|
|||
Weighted-average exercise price per share
|
$
|
85.83
|
|
|
$
|
59.70
|
|
|
$
|
64.85
|
|
|
Options
(in millions)
|
|
Weighted-Average
Exercise Price
Per Share
|
|
Weighted-Average
Remaining Contractual Life (Yrs) |
|
Aggregate
Intrinsic Value
(in millions) |
Outstanding beginning of period
|
4.01
|
|
$45.81
|
|
6.09
|
|
$168.9
|
Options granted
|
0.35
|
|
85.83
|
|
|
|
|
Options exercised
|
(0.80)
|
|
40.07
|
|
|
|
|
Options canceled
|
(0.03)
|
|
66.15
|
|
|
|
|
Outstanding end of period
|
3.53
|
|
$50.92
|
|
5.89
|
|
$130.6
|
Exercisable
|
2.09
|
|
$41.87
|
|
4.53
|
|
$96.2
|
|
Shares
(in millions)
|
|
Weighted-Average
Grant Date Fair
Value Per Share |
Outstanding beginning of period
|
0.19
|
|
$57.44
|
Shares granted
|
0.11
|
|
87.09
|
Shares vested
|
(0.05)
|
|
51.72
|
Shares canceled
|
(0.01)
|
|
69.76
|
Outstanding end of period
|
0.24
|
|
$71.99
|
(All units settled in cash)
|
Units
(in millions)
|
|
Weighted-Average
Fair Value
Per Unit
|
Outstanding beginning of period
|
1.35
|
|
$87.95
|
Units granted
|
0.42
|
|
91.18
|
Units vested
|
(0.30)
|
|
85.76
|
Units canceled
|
(0.08)
|
|
63.58
|
Outstanding end of period
|
1.39
|
|
$87.88
|
(All units settled in cash)
|
Units
(in millions)
|
|
Weighted-Average
Fair Value
Per Unit
|
Outstanding beginning of period
|
0.09
|
|
$87.95
|
Units vested
|
(0.09)
|
|
83.85
|
Outstanding end of period
|
—
|
|
$—
|
|
Units
(in millions)
|
|
Weighted-Average
Grant Date Fair Value Per Unit |
Outstanding beginning of period
|
0.33
|
|
$62.40
|
Units granted
|
0.24
|
|
90.51
|
Units canceled
|
(0.02)
|
|
78.12
|
Outstanding end of period
|
0.55
|
|
$74.04
|
|
Fiscal 2018 - Quarters Ended
|
||||||||||||||||||
(in millions, except per share data)
|
Aug. 27
|
|
Nov. 26
|
|
Feb. 25
|
|
May 27
|
|
Total
|
||||||||||
Sales
|
$
|
1,936.1
|
|
|
$
|
1,881.5
|
|
|
$
|
2,128.4
|
|
|
$
|
2,134.1
|
|
|
$
|
8,080.1
|
|
Earnings before income taxes
|
159.5
|
|
|
113.4
|
|
|
116.0
|
|
|
216.8
|
|
|
605.7
|
|
|||||
Earnings from continuing operations
|
121.3
|
|
|
88.6
|
|
|
218.5
|
|
|
175.4
|
|
|
603.8
|
|
|||||
Losses from discontinued operations, net of tax
|
(2.3
|
)
|
|
(3.9
|
)
|
|
(0.7
|
)
|
|
(0.9
|
)
|
|
(7.8
|
)
|
|||||
Net earnings
|
119.0
|
|
|
84.7
|
|
|
217.8
|
|
|
174.5
|
|
|
596.0
|
|
|||||
Basic net earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings from continuing operations
|
0.97
|
|
|
0.72
|
|
|
1.77
|
|
|
1.42
|
|
|
4.87
|
|
|||||
Losses from discontinued operations
|
(0.02
|
)
|
|
(0.03
|
)
|
|
(0.01
|
)
|
|
(0.01
|
)
|
|
(0.06
|
)
|
|||||
Net earnings
|
0.95
|
|
|
0.69
|
|
|
1.76
|
|
|
1.41
|
|
|
4.81
|
|
|||||
Diluted net earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings from continuing operations
|
0.95
|
|
|
0.71
|
|
|
1.74
|
|
|
1.40
|
|
|
4.79
|
|
|||||
Losses from discontinued operations
|
(0.02
|
)
|
|
(0.04
|
)
|
|
(0.01
|
)
|
|
(0.01
|
)
|
|
(0.06
|
)
|
|||||
Net earnings
|
0.93
|
|
|
0.67
|
|
|
1.73
|
|
|
1.39
|
|
|
4.73
|
|
|||||
Dividends paid per share
|
0.63
|
|
|
0.63
|
|
|
0.63
|
|
|
0.63
|
|
|
2.52
|
|
|||||
Stock price:
|
|
|
|
|
|
|
|
|
|
||||||||||
High
|
95.22
|
|
|
85.56
|
|
|
100.11
|
|
|
96.97
|
|
|
100.11
|
|
|||||
Low
|
80.98
|
|
|
76.27
|
|
|
79.88
|
|
|
82.38
|
|
|
76.27
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Fiscal 2017 - Quarters Ended
|
||||||||||||||||||
(in millions, except per share data)
|
Aug. 28
|
|
Nov. 27
|
|
Feb. 26
|
|
May 28
|
|
Total
|
||||||||||
Sales
|
$
|
1,714.4
|
|
|
$
|
1,642.5
|
|
|
$
|
1,878.7
|
|
|
$
|
1,934.6
|
|
|
$
|
7,170.2
|
|
Earnings before income taxes
|
151.4
|
|
|
107.0
|
|
|
220.2
|
|
|
158.7
|
|
|
637.3
|
|
|||||
Earnings from continuing operations
|
111.1
|
|
|
79.7
|
|
|
166.3
|
|
|
125.4
|
|
|
482.5
|
|
|||||
Losses from discontinued operations, net of tax
|
(0.9
|
)
|
|
(0.2
|
)
|
|
(0.7
|
)
|
|
(1.6
|
)
|
|
(3.4
|
)
|
|||||
Net earnings
|
110.2
|
|
|
79.5
|
|
|
165.6
|
|
|
123.8
|
|
|
479.1
|
|
|||||
Basic net earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings from continuing operations
|
0.89
|
|
|
0.65
|
|
|
1.34
|
|
|
1.00
|
|
|
3.88
|
|
|||||
Losses from discontinued operations
|
(0.01
|
)
|
|
—
|
|
|
(0.01
|
)
|
|
(0.01
|
)
|
|
(0.03
|
)
|
|||||
Net earnings
|
0.88
|
|
|
0.65
|
|
|
1.33
|
|
|
0.99
|
|
|
3.85
|
|
|||||
Diluted net earnings per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings from continuing operations
|
0.88
|
|
|
0.64
|
|
|
1.32
|
|
|
0.99
|
|
|
3.83
|
|
|||||
Losses from discontinued operations
|
(0.01
|
)
|
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
|
(0.03
|
)
|
|||||
Net earnings
|
0.87
|
|
|
0.64
|
|
|
1.32
|
|
|
0.98
|
|
|
3.80
|
|
|||||
Dividends paid per share
|
0.56
|
|
|
0.56
|
|
|
0.56
|
|
|
0.56
|
|
|
2.24
|
|
|||||
Stock price:
|
|
|
|
|
|
|
|
|
|
||||||||||
High
|
68.68
|
|
|
74.99
|
|
|
79.43
|
|
|
89.14
|
|
|
89.14
|
|
|||||
Low
|
59.50
|
|
|
60.16
|
|
|
71.02
|
|
|
73.81
|
|
|
59.50
|
|
|||||
|
|
|
|
|
|
|
|
|
|
Item 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
Item 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
Item 11.
|
EXECUTIVE COMPENSATION
|
Item 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
Item 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
Item 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
Item 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
(a)
|
Documents filed as part of this report:
|
|
1. Financial Statements:
|
|
|
|
All financial statements. See Index to Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K.
|
|
|
|
2. Financial Statement Schedules:
|
|
|
|
Not applicable.
|
|
|
|
3. Exhibits:
|
Date:
|
July 20, 2018
|
|
DARDEN RESTAURANTS, INC.
|
||
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Eugene I. Lee, Jr.
|
|
|
|
|
|
Eugene I. Lee, Jr., President and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Eugene I. Lee, Jr.
|
|
Director, President and Chief Executive Officer (Principal executive officer)
|
|
July 20, 2018
|
Eugene I. Lee, Jr.
|
|
|
|
|
|
|
|
|
|
/s/ Ricardo Cardenas
|
|
Senior Vice President, Chief Financial Officer
(Principal financial officer)
|
|
July 20, 2018
|
Ricardo Cardenas
|
|
|
|
|
|
|
|
|
|
/s/ John W. Madonna
|
|
Senior Vice President, Corporate Controller
(Principal accounting officer)
|
|
July 20, 2018
|
John W. Madonna
|
|
|
|
|
/s/ Margaret Shan Atkins*
|
|
Director
|
|
|
Margaret Shan Atkins
|
|
|
|
|
|
|
|
|
|
/s/ James P. Fogarty*
|
|
Director
|
|
|
James P. Fogarty
|
|
|
|
|
|
|
|
|
|
/s/ Cynthia T. Jamison*
|
|
Director
|
|
|
Cynthia T. Jamison
|
|
|
|
|
|
|
|
|
|
/s/ Nana Mensah*
|
|
Director
|
|
|
Nana Mensah
|
|
|
|
|
|
|
|
|
|
/s/ William S. Simon*
|
|
Director
|
|
|
William S. Simon
|
|
|
|
|
|
|
|
|
|
/s/ Charles M. Sonsteby*
|
|
Chairman of the Board and Director
|
|
|
Charles M. Sonsteby
|
|
|
|
|
|
|
|
|
|
*
By:
|
|
/s/ Anthony G. Morrow
|
|
|
|
Anthony G. Morrow, Attorney-In-Fact
|
|
|
|
July 20, 2018
|
|
*10.5
|
|
|
|
|
|
*10.6
|
|
|
|
|
|
*10.7
|
|
|
|
|
|
*10.8
|
|
|
|
|
|
*10.9
|
|
|
|
|
|
*10.10
|
|
|
|
|
|
*10.11
|
|
|
|
|
|
*10.12
|
|
|
|
|
|
*10.13
|
|
|
|
|
|
*10.14
|
|
|
|
|
|
*10.15
|
|
|
|
|
|
*10.16
|
|
|
|
|
|
*10.17
|
|
|
|
|
|
*10.18
|
|
|
|
|
|
*10.19
|
|
|
|
|
|
*10.20
|
|
|
|
|
|
*10.21
|
|
|
|
|
|
*10.22
|
|
|
|
|
|
*10.23
|
|
|
|
|
|
*10.24
|
|
|
|
|
|
*10.25
|
|
|
|
|
|
*10.26
|
|
|
|
|
|
*10.27
|
|
|
|
|
|
*10.28
|
|
|
|
|
|
*10.29
|
|
|
|
|
|
*10.30
|
|
|
|
|
|
*10.31
|
|
|
|
|
|
*10.32
|
|
|
|
|
|
10.33
|
|
|
|
|
|
*10.34
|
|
|
|
|
|
*10.35
|
|
|
|
|
|
*10.36
|
|
|
|
|
|
*10.37
|
|
|
|
|
|
12
|
|
|
|
|
|
21
|
|
|
|
|
|
23
|
|
|
|
|
|
24
|
|
|
|
|
|
31(a)
|
|
|
|
|
|
31(b)
|
|
|
|
|
|
32(a)
|
|
|
|
|
|
32(b)
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Schema Document
|
|
|
|
101.CAL
|
|
XBRL Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Presentation Linkbase Document
|
ARTICLE I
|
DEFINITIONS
1
|
ARTICLE II
|
ELIGIBILITY AND PARTICIPATION
6
|
ARTICLE III
|
PARTICIPANTS' ACCOUNTS
7
|
ARTICLE IV
|
INVESTMENT FUNDS
10
|
ARTICLE V
|
PAYMENT OF ACCOUNT BALANCES
11
|
ARTICLE VI
|
CLAIMS
17
|
ARTICLE VII
|
SOURCE OF FUNDS; TRUST
18
|
ARTICLE VIII
|
BENEFIT PLANS COMMITTEE
19
|
ARTICLE IX
|
AMENDMENT AND TERMINATION
21
|
ARTICLE X
|
MISCELLANEOUS
22
|
5.1
|
Benefit Payments Upon Separation from Service for Reasons Other Than Death
.
|
|
Fiscal Year Ended
|
||||||||||||||||||
|
May 27, 2018
|
|
May 28, 2017
|
|
May 29, 2016
|
|
May 31, 2015
|
|
May 25, 2014
|
||||||||||
Consolidated earnings from continuing operations before income taxes
|
$
|
605.7
|
|
|
$
|
637.3
|
|
|
$
|
449.7
|
|
|
$
|
175.3
|
|
|
$
|
174.6
|
|
Plus fixed charges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross interest expense
(1)
|
163.8
|
|
|
43.2
|
|
|
174.3
|
|
|
194.2
|
|
|
137.5
|
|
|||||
40% of restaurant and equipment minimum rent expense
|
128.5
|
|
|
114.7
|
|
|
93.4
|
|
|
66.8
|
|
|
58.6
|
|
|||||
Total fixed charges
|
292.3
|
|
|
157.9
|
|
|
267.7
|
|
|
261.0
|
|
|
196.1
|
|
|||||
Less capitalized interest
|
(1.9
|
)
|
|
(1.7
|
)
|
|
(0.7
|
)
|
|
(1.3
|
)
|
|
(2.6
|
)
|
|||||
Consolidated earnings from continuing operations before income taxes available to cover fixed charges
|
$
|
896.1
|
|
|
$
|
793.5
|
|
|
$
|
716.7
|
|
|
$
|
435.0
|
|
|
$
|
368.1
|
|
Ratio of consolidated earnings from continuing operations to fixed charges
|
3.1
|
|
|
5.0
|
|
|
2.7
|
|
|
1.7
|
|
|
1.9
|
|
1.
|
GMRI, Inc., a Florida corporation, doing business as Olive Garden, Bahama Breeze and Seasons 52
|
2.
|
Cheddar’s Restaurant Holding Corp., a Delaware corporation
|
3.
|
Cheddar’s Casual Cafe, Inc., a Delaware corporation, doing business as Cheddar’s Scratch Kitchen
|
4.
|
Yard House USA, Inc., a Delaware corporation, doing business as Yard House
|
5.
|
Rare Hospitality International, Inc., a Georgia corporation, doing business as LongHorn Steakhouse and Olive Garden
|
6.
|
N and D Restaurants, LLC, a Florida limited liability company, doing business as Olive Garden
|
7.
|
Olive Garden of Texas, LLC, a Texas limited liability company, doing business as Olive Garden
|
8.
|
Rare Hospitality Management LLC, a Delaware limited liability company, doing business as LongHorn Steakhouse
|
9.
|
Capital Grille Holdings, Inc., a North Carolina corporation, doing business as The Capital Grille
|
10.
|
Darden Corporation, a Delaware corporation
|
11.
|
Seasons 52 Holdings, LLC, a Florida limited liability company, doing business as Seasons 52
|
12.
|
Eddie V’s Holdings, LLC, a Florida limited liability company, doing business as Eddie V’s
|
13.
|
Bahama Breeze Holdings, LLC, a Florida limited liability company, doing business as Bahama Breeze
|
14.
|
Darden Direct Distribution, Inc., a Florida corporation
|
15.
|
Florida SE, LLC, a Florida limited liability company, doing business as Olive Garden
|
16.
|
Olive Garden Holdings, LLC, a Florida limited liability company, doing business as Olive Garden
|
By: /s/ Margaret Shân Atkins
Margaret Shân Atkins
|
By: /s/ Nana Mensah
Nana Mensah
|
By: /s/ James P. Fogarty
James P. Fogarty
|
By: /s/ William S. Simon
William S. Simon
|
By: /s/ Cynthia T. Jamison
Cynthia T. Jamison
|
By: /s/ Charles M. Sonsteby
Charles M. Sonsteby
|
By: /s/ Eugene I. Lee, Jr.
Eugene I. Lee, Jr.
|
|
1.
|
|
I have reviewed this Annual Report on Form 10-K of Darden Restaurants, 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 this 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.
|
/s/ Eugene I. Lee, Jr.
|
Eugene I. Lee, Jr.
|
President and Chief Executive Officer
|
July 20, 2018
|
1.
|
|
I have reviewed this Annual Report on Form 10-K of Darden Restaurants, 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 this 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.
|
/s/ Ricardo Cardenas
|
Ricardo Cardenas
|
Senior Vice President and Chief Financial Officer
|
July 20, 2018
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Eugene I. Lee, Jr.
|
Eugene I. Lee, Jr.
|
President and Chief Executive Officer
|
July 20, 2018
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ Ricardo Cardenas
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Ricardo Cardenas
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Senior Vice President and Chief Financial Officer
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July 20, 2018
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