8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): August 4, 2014

Darden Restaurants, Inc.

(Exact Name of Registrant as Specified in Charter)

Florida	1-13666	59-3305930
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1000 Darden Center Drive, Orlando, Florida	32837
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (407) 245-4000

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

x Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01. Other Events.

On August 4, 2014, Darden Restaurants, Inc. (the “Company”) issued a news release entitled “Darden Files Presentation Regarding Red Lobster Divestiture and Issues Open Letter to Shareholders” and an investor presentation entitled “Update on Successful Red Lobster Sale Process.” Both the release and investment presentation are dated August 4, 2014. Copies of the letter and investor presentation are furnished as Exhibits 99.1 and 99.2 to this Current Report on Form 8-K and incorporated by reference in their entirety to this Item 8.01.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	News release dated August 4, 2014, entitled “Darden Files Presentation Regarding Red Lobster Divestiture and Issues Open Letter to Shareholders”
99.2	Presentation dated August 4, 2014, entitled “Update on Successful Red Lobster Sale Process”

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	DARDEN RESTAURANTS, INC.
	By:	/s/ Teresa M. Sebastian
		Teresa M. Sebastian Senior Vice President, General Counsel and Corporate Secretary
Date: August 4, 2014

EXHIBIT INDEX

Exhibit No.	Description
99.1	News release dated August 4, 2014, entitled “Darden Files Presentation Regarding Red Lobster Divestiture and Issues Open Letter to Shareholders”
99.2	Presentation dated August 4, 2014, entitled “Update on Successful Red Lobster Sale Process”

EX-99.1

Exhibit 99.1

	NEWS/INFORMATION
	Corporate Relations
	P.O. Box 695011
	Orlando, FL 32869-5011
Contacts:
(Analysts) Matthew Stroud	(407) 245-5288
(Media) Bob McAdam	(407) 245-5404

DARDEN ADDRESSES INACCURATE AND MISLEADING STATEMENTS BY STARBOARD AND PROVIDES THE FACTS ON VALUE ACHIEVED WITH

RED LOBSTER SALE

Files Presentation and Issues Open Letter to Shareholders Regarding Red Lobster Divestiture

ORLANDO, Fla., – August 4, 2014 – Darden Restaurants, Inc. (NYSE: DRI) today announced that it has filed a presentation with the Securities and Exchange Commission (“SEC”) and is issuing the following open letter to shareholders to correct a number of inaccurate and misleading statements made by Starboard Value LP and its affiliates (“Starboard”) as part of Starboard’s efforts to take control of the Company by replacing all 12 members of Darden’s Board of Directors with its own preferred nominees at the Company’s 2014 Annual Meeting of Shareholders.

Highlights of the letter are as follows:

• Darden’s Board determined that divesting Red Lobster was in the best interests of Darden and its shareholders. Despite numerous actions taken to improve the business, Red Lobster experienced years of declines in guest traffic, resulting in volatile and consistently weakening financial performance that significantly burdened Darden’s results. Red Lobster’s negative trends were continuing and accelerating at the time its sale was announced in May.

• Contrary to Starboard’s assertion that it was “rushed,” the sale of Red Lobster was the culmination of a robust and deliberate review process that began in early 2013 – well before Starboard’s investment. This process was designed – and enabled Darden – to maximize value and minimize risks associated with continuing to own the business, including risks from the brand’s ongoing deterioration.

• The Red Lobster sale better positions Darden for sustained growth, value creation and consistent return of cash to our shareholders in contrast to Starboard’s erroneous claim of value destruction.

• After careful evaluation, the Board was certain that halting a robust Red Lobster sale process mid-course would have negative consequences for the value received and (if any sale could be effected) for the value of Darden.

• Although Starboard erroneously claims the business was sold at a “discount,” the $2.1 billion purchase price represents a premium multiple compared to comparable restaurant deals and exceeded many industry analysts’ expected valuation ranges for the business, particularly taking into account Red Lobster’s deteriorating performance.

• Tax free and other tax efficient alternatives, as suggested by Starboard, were explored in depth by the Board and our advisors but were determined not to be viable, value creating options.

• Replacing the entire Darden Board, as Starboard is seeking to do, could be significantly destabilizing to the Company and could jeopardize the Board’s current commitment to its $2.20 per share annual dividend.

The full text of the open letter is below:

August 4, 2014

Dear Darden Shareholder:

In press statements and SEC filings, Starboard has continued to misrepresent the facts about the actions we are taking to improve performance and enhance shareholder value, and the progress we are making on these initiatives. This includes inaccurate and misleading statements regarding the value achieved with the recent sale of Red Lobster. Starboard’s assertions continue to be based on incorrect and unrealistic analysis, including the unfounded assumption that a sale of the Red Lobster real estate could be implemented on a tax free basis.

We are writing to set the record straight.

FACT: Darden’s Board determined that divesting Red Lobster was in the best interests of Darden and its shareholders. Despite numerous actions taken to improve the business, Red Lobster experienced years of declines in guest traffic, resulting in volatile and consistently weakening financial performance that significantly burdened Darden’s results. Red Lobster’s negative trends were continuing and accelerating at the time its sale was announced in May.

Darden has long been the market leader in full-service dining and has a record of long-term performance and value creation. More recently, there have been significant changes within the restaurant industry. These changes include slowing sales growth as the industry continues to mature as well as important shifts in consumer demographics and expectations.

Many consumers, including Red Lobster’s core customer base, have faced increasing financial pressure that has not eased despite some improvement in the overall economy. To offset this dynamic, we have taken numerous actions over the years to reach new consumer segments and to increase demand from Red Lobster’s existing consumer base in order to reignite the success Red Lobster once enjoyed. However, these initiatives, which have included capital investments, operational and personnel changes, new menus, advertising changes and remodels, only interrupted the brand’s long-term erosion and declining financial performance.

In fact:

• Due to the higher costs of seafood, Red Lobster has long had a relatively high average check compared to other nationally advertised casual dining brands, which has been a distinct disadvantage when competing for visits from financially constrained consumers.

• As the business declined, Red Lobster’s priorities and operating support requirements came to differ meaningfully from those of Darden’s other brands, including Olive Garden, which had nearly 40% more guest visits in fiscal 2014 than it had a decade ago.

• Red Lobster’s deteriorating performance was significantly harming the Company’s financial results. Indeed, Red Lobster’s sales and earnings volatility has been detrimental to Darden’s overall performance for some time:

• Over the past decade, average weekly guest count per restaurant fell 21%

• Over the past two fiscal years:

• Red Lobster same-restaurant sales declined -8.1%

• Red Lobster underperformed the Knapp-Track casual dining index by 720 bps

• EBITDA declined -$106 million, or -32%

• EBITDA margins fell 330 bps to 9.3%, the lowest in a decade

FACT: Contrary to Starboard’s assertion that it was “rushed,” the sale of Red Lobster was the culmination of a robust and deliberate process designed to maximize value and minimize risks associated with continuing to own the business, including the brand’s ongoing deterioration.

To best position your company for continued growth and success against this backdrop, Darden’s Board and leadership team carefully examined various strategic, operational and financial alternatives. This review process began in early 2013 – well before Starboard made its investment in Darden. The analysis included advice from the Company’s financial advisor, Goldman, Sachs & Co., and legal counsel, Latham & Watkins. It also included advice from Wachtell, Lipton, Rosen & Katz, as legal counsel to Darden’s Board, and, subsequent to the initial advice provided by Goldman, Sachs & Co., from Morgan Stanley, as financial advisor to Darden’s Board.

In light of Red Lobster’s trends and the extensive analysis, in December 2013, Darden’s Board approved a plan to, among other actions, separate the Red Lobster business through either a sale or a spin-off. The Board believed that, given the challenges facing the Red Lobster business, a full separation was necessary to enable Darden to capitalize on its highest return and value creating opportunities in its remaining brand portfolio and to deliver increased shareholder returns over the long-term.

In May 2014, we announced the sale of Red Lobster to Golden Gate Capital. The sale, which closed on July 28, 2014, was the culmination of a thorough and robust process that enabled us to maximize the value of the business, eliminate the risks and volatility associated with continuing to own it, and provide a realistic market-validated valuation of Darden’s real estate assets. As part of this process, the Company and its advisors directly contacted a broad universe of approximately 70 potential financial and strategic buyers to purchase the Red Lobster business and related debt. In addition, approximately 25 real estate buyers were also contacted to facilitate attractive sale-leaseback financing for the purchase of the Red Lobster business.

The $2.1 billion all cash consideration from the Red Lobster sale provided Darden with immediate and certain value to reduce debt and support our capital return initiatives, including a significant share repurchase and maintaining the Company’s annual dividend at $2.20 per share, which Darden shareholders have stated is a priority for them. In the past five fiscal years, Darden has returned nearly $2 billion to shareholders through share repurchases and dividends.

The transaction also enabled us to eliminate, for the Company and all Darden shareholders, the risks, uncertainties and financial volatility relating to the continued struggles of the Red Lobster turnaround.

FACT: The Red Lobster sale better positions Darden for sustained growth, value creation and consistent return of cash to our shareholders in contrast to Starboard’s erroneous claim of value destruction.

Following the completion of the Red Lobster sale, Darden is significantly better positioned for success. From a financial perspective, the new Darden will benefit from:

• Higher and more consistent sales and earnings growth driven by a stronger overall positioning with the most attractive consumer segments and by an expanding restaurant footprint;

• A more balanced commodity purchasing profile that reflects much lower exposure to the historically volatile seafood category;

• Stable and growing cash flow with reduced quarterly sales and earnings volatility;

• A $1 billion debt reduction, which will improve credit metrics; and

• Continued leading capital return. With stronger cash flows and the proceeds from the Red Lobster sale, our shareholders will continue to benefit from an active share repurchase program, including a new share repurchase program of up to $700 million in fiscal 2015, and a strong quarterly dividend, which equates to $2.20 per share annually.

From an operational perspective, Darden will benefit from a sharper focus on growing our highly attractive brands without the distraction of continuing to operate a business that is not as well positioned for the future. In this regard, while still in the early stages, progress on our operating priorities is leading to enhanced performance throughout the Company:

• At Olive Garden, guest experience and satisfaction scores are improving across the system and are expected to translate into higher traffic trends over time. Online ordering, including a redesigned web experience and the national launch of an online To-Go platform, is underway and strengthening the take-out business. Initial sales results of a pilot remodel program are encouraging – the sales trends have improved by mid-single digits since the completion of the remodels and the installation of new signage.

• At LongHorn Steakhouse, cumulative same-restaurant sales results for the last five years have exceeded the Knapp-Track casual dining competitive benchmark by over 17 percentage points. In fiscal 2014, LongHorn’s same-restaurant sales grew 2.7% year-over-year and exceeded the industry by 3.9 percentage points.

• The Specialty Restaurant Group continues to deliver solid performance. In fiscal 2014, total sales exceeded $1.2 billion, a 25.2% increase from the prior year, and blended same-restaurant sales grew 1.6%.

• As a result of the Company’s aggressive cost management, general and administrative (G&A) expenses as a percentage of sales are expected to remain at approximately 5.0% following the Red Lobster sale, despite the lower revenue base. In addition, in fiscal 2015, selling, general and administrative (SG&A) expenses as a percentage of sales are expected to be the lowest since Darden became a public company.

Further, our Board concluded that the multiples at which Darden shares trade have been consistently harmed by Red Lobster’s deteriorating performance. With the sale complete, we expect these to improve.

FACT: After careful evaluation, the Board was certain that halting a robust Red Lobster sale process mid-course would have negative consequences for the value received and for the value of Darden.

We believe that the Company and its shareholders would have been harmed if Red Lobster remained a part of Darden. We also believe that the value obtained for Red Lobster would have been compromised had the sale not been completed as planned. Darden’s Board based this determination on Red Lobster’s declining performance and the nature of the rigorous sales process.

Since entering the agreement to sell Red Lobster in May, Red Lobster’s business continued to decline through fiscal year-end, and based upon industry trends, the declines were expected to continue for an extended time.

If a sale agreement had been delayed, we believe it would have resulted in a significantly lower valuation – substantially less than the $2.1 billion achieved. This assumes, of course, that a sale could even have been completed later, which was not clear at the time, given our expectation for continued deterioration of Red Lobster’s business. There was also no assurance that the financing environment for a transaction would have remained attractive to bidders.

The terms of the Red Lobster sale were the result of a comprehensive, competitive process. If Darden had suddenly stopped the process, the Board believed it would have been virtually impossible to restart it months later with the same momentum, if at all, particularly given Red Lobster’s declining performance. Following Starboard’s announcement that it would seek a special meeting, bidders in the Red Lobster sales process strongly advised the Company that the uncertainty associated with a shareholder approval closing condition would be unacceptable given the time and financial resources required to explore a transaction and formulate a final bid. Nevertheless, after the Company received a final bid, the Company further sought to negotiate a shareholder approval condition in the sale agreement but was unable to do so. In view of the risk of losing the deal altogether and keeping Darden and its shareholders exposed to Red Lobster’s continuing declining performance, putting the sale to a separate shareholder vote over bidders’ objections was simply not a prudent course to follow.

The choice the Board confronted was either to proceed with the sale on the terms negotiated or to postpone the sale, which was virtually certain to result in a materially lower price, if any sale transaction were to be available at all. And if no sale occurred, the consequences of retaining Red Lobster would have been detrimental to the Company and its value because of the continued adverse exposure to Red Lobster’s struggling performance.

The decision to proceed with the sale prior to holding a Special Meeting was a difficult one. It was made only after careful consideration over the course of multiple Board meetings of the large risks from terminating a highly competitive sale process in the midst of Red Lobster’s deteriorating business performance. The Board considered and was deeply concerned about proceeding notwithstanding the shareholder support of the Special Meeting, but believed these concerns were outweighed by the considerable adverse consequences of a delay.

FACT: Although Starboard claims the business was sold at a “discount,” the $2.1 billion purchase price represents a premium multiple compared to comparable restaurant deals and exceeded industry analysts’ expected valuation ranges for the business, particularly taking into account Red Lobster’s deteriorating performance.

The Red Lobster transaction was valued at approximately 9x LTM EBITDA when we announced the agreement to sell the business on May 16, 2014. On average, comparable restaurant deals have been completed at approximately 8x LTM EBITDA – meaningfully lower than the value we achieved. Notably, the majority of the restaurants sold in comparable deals exhibited increasing earnings trends as opposed to the declining earnings trends at Red Lobster.

Given the expected continued decline in Red Lobster’s operating performance through closing, Red Lobster’s sale multiple is expected to be closer to approximately 10x LTM EBITDA at transaction close compared to the 9x LTM EBITDA at announcement, underscoring the wisdom of the Board’s decision to lock in the value we achieved with the Golden Gate Capital transaction.

FACT: Tax free and other tax efficient alternatives, as suggested by Starboard, were explored in depth by the Board and our advisors but were not viable, value creating options.

Optimizing the value of Darden’s real estate assets is an ongoing focus for the Company. Many of Darden’s independent directors have experience and proven records optimizing asset portfolios through franchising, real estate development, and mergers and acquisitions, including directly overseeing or guiding the strategic direction of substantial real estate portfolios.

Before unanimously concluding that the sale of Red Lobster to Golden Gate Capital was the best available value-creating alternative, Darden’s Board, with the assistance of its advisors, explored numerous separation alternatives for Red Lobster and the value potential of each, including (i) a spin-off of the Red Lobster business, (ii) a sale of the Red Lobster business, (iii) a spin-off of the Red Lobster operating company and a separate sale of its real estate, (iv) retaining the Red Lobster operating company and separating its real estate, and (v) retaining both the Red Lobster operating company and its real estate.

The Board believes that a Red Lobster REIT is not (and was not) a viable tax efficient alternative. Given its exposure to a single property type and single tenant, a Red Lobster REIT would likely trade at a meaningful discount to publicly-traded triple net REITs. Market reaction to the real estate aspects of the Red Lobster transaction confirms the validity of the Board’s concern. Further, our expansive real estate process did not result in any tax efficient proposals.

In its public statements, Starboard has wrongly asserted that Darden received “less than zero” for Red Lobster’s operating business. This statement is based on a highly inaccurate analysis. Among other things, Starboard:

• Erroneously treats a taxable transaction as tax free, attributing all transaction taxes to the Red Lobster operating company and none to the real estate (i.e., Starboard assumes incorrectly that the real estate aspect of the transaction was or could be tax free);

• Not only carelessly double-counts the transaction costs, but also erroneously attributes all transaction costs to the Red Lobster operating company rather than allocating them to the different pieces of the business;

• Overlooks the fact that we were able to structure the transaction so that the cash debt breakage costs after-tax are minimal, and again attributes all of the costs to the Red Lobster operating company;

• Inappropriately reduces after-tax proceeds of the entire transaction (the operating company sale and the real estate transaction) by the pre-tax value of the real estate financing to present an inaccurate and misleading picture of what actually occurred; and

• Incorrectly assumes that a $1.5 billion valuation of Red Lobster’s real estate, which was achieved through a highly competitive bidding process, could have been achieved in a stand-alone REIT which, in the view of the Company’s financial advisors, was highly unlikely.

Starboard’s flawed analysis results in $107 million of incorrect costs that were never incurred and undervalues the amount of the deal consideration attributable to Red Lobster’s operating business and related assets by nearly half a billion dollars.

Your Board remains committed to taking all appropriate steps to serve the interests of Darden and all Darden shareholders.

We believe that further distraction and costs associated with Starboard’s proxy contest are not in the best interests of Darden or Darden shareholders. Accordingly, we have attempted, on numerous occasions, to reach an agreement with Starboard, and we remain ready to engage with them to resolve this proxy contest.

***

Goldman, Sachs & Co. is serving as Darden’s financial advisor. Morgan Stanley is serving as financial advisor, and Wachtell, Lipton, Rosen & Katz is serving as legal advisor to Darden’s Board of Directors.

Innisfree M&A Incorporated is serving as the Company’s proxy solicitor and can be contacted toll-free at (888) 750-5834.

Darden Restaurants, Inc.

Update on Successful Red Lobster Sale Process

Non-GAAP Reconciliation

($ in millions)

Non-GAAP Reporting

In addition to U.S. generally accepted accounting principles (GAAP) reporting, Darden has presented certain measures on a non-GAAP basis in the Update On Successful Red Lobster Sale Process, such as Earnings Before Interest and Taxes (EBIT) and Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA). This non-GAAP information should be viewed in addition to, and not in lieu of, our reported amounts as calculated in accordance with GAAP.

	Twelve Months Ended:
	Q1 FY13			Q2 FY13			Q3 FY13			Q4 FY13			Q1 FY14			Q2 FY14			Q3 FY14			Q4 FY14
Earnings Before Interest and Taxes (EBIT):
Sales	$	2,655.2		$	2,642.4		$	2,600.1		$	2,622.4		$	2,586.3		$	2,557.6		$	2,499.4		$	2,460.0
EBT: Earnings Before Taxes		232.6			229.7			197.4			191.0			158.4			139.4			118.6			104.1
Interest Expense		(0.4	)		(0.4	)		(0.2	)		(0.0	)		(0.0	)		(0.1	)		(0.1	)		(0.1	)
EBIT	$	232.2		$	229.4		$	197.2		$	191.0		$	158.4		$	139.4		$	118.5		$	104.0
Depreciation & Amortization		110.0			112.3			114.2			115.9			118.9			121.9			124.8			123.9
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA):
EBITDA	$	342.2		$	341.7		$	311.4		$	306.9		$	277.3		$	261.2		$	243.3		$	227.9
EBITDA Margin		12.9	%		12.9	%		12.0	%		11.7	%		10.7	%		10.2	%		9.7	%		9.3	%

About Darden Restaurants

Darden Restaurants, Inc., (NYSE: DRI, the world’s largest full-service restaurant company, owns and operates more than 1,500 restaurants that generate approximately $6.3 billion in annual sales. Headquartered in Orlando, Fla., and employing more than 150,000 people, Darden is recognized for a culture that rewards caring for and responding to people. In 2014, Darden was named to the FORTUNE “100 Best Companies to Work For” list for the fourth year in a row. Our restaurant brands - Olive Garden, LongHorn Steakhouse, Bahama Breeze, Seasons 52, The Capital Grille, Eddie V’s and Yard House - reflect the rich diversity of those who dine with us. Our brands are built on deep insights into what our guests want. For more information, please visit www.darden.com.

Information About Forward-Looking Statements

Forward-looking statements in this communication regarding our expected ability to retire outstanding debt, improve our credit metrics, improve sales and earnings growth, reduce earnings volatility, maintain our dividend policy and buy back stock and execute on our brand renaissance program and all other statements that are not historical facts, including without limitation statements concerning our future economic performance, plans or objectives and expectations regarding the sale of Red Lobster, benefits to Darden and its shareholders from such sale and related matters, are made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Any forward-looking statements speak only as of the

date on which such statements are made, and we undertake no obligation to update such statements to reflect events or circumstances arising after such date except as required by law. We wish to caution investors not to place undue reliance on any such forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties that could cause actual results to materially differ from those anticipated in the statements. The most significant of these uncertainties are described in Darden’s Form 10-K, Form 10-Q and Form 8-K reports (including all amendments to those reports). These risks and uncertainties include the ability to achieve Darden’s strategic plan to enhance shareholder value including realizing the expected benefits from the sale of Red Lobster, actions of activist investors and the cost and disruption of responding to those actions, including any proxy contest for the election of directors at our annual meeting, food safety and food-borne illness concerns, litigation, unfavorable publicity, risks relating to public policy changes and federal, state and local regulation of our business including health care reform, labor and insurance costs, technology failures, failure to execute a business continuity plan following a disaster, health concerns including virus outbreaks, intense competition, failure to drive sales growth, our plans to expand our smaller brands Bahama Breeze, Seasons 52 and Eddie V’s, a lack of suitable new restaurant locations, higher-than-anticipated costs to open, close, relocate or remodel restaurants, a failure to execute innovative marketing tactics and increased advertising and marketing costs, a failure to develop and recruit effective leaders, a failure to address cost pressures, shortages or interruptions in the delivery of food and other products, adverse weather conditions and natural disasters, volatility in the market value of derivatives, economic factors specific to the restaurant industry and general macroeconomic factors including unemployment and interest rates, disruptions in the financial markets, risks of doing business with franchisees and vendors in foreign markets, failure to protect our service marks or other intellectual property, impairment in the carrying value of our goodwill or other intangible assets, a failure of our internal controls over financial reporting, or changes in accounting standards, an inability or failure to manage the accelerated impact of social media and other factors and uncertainties discussed from time to time in reports filed by Darden with the Securities and Exchange Commission.     

Important Additional Information

The Company, its directors and certain of its executive officers are participants in the solicitation of proxies from stockholders in connection with the Company’s 2014 annual meeting of stockholders (the “Annual Meeting”). Information regarding the names and interests of such participants in the Company’s proxy solicitation is set forth in the Company’s preliminary proxy statement, filed with the SEC on July 31, 2014, as amended, and the Company revocation solicitation statement, filed with the SEC on April 1, 2014. Additional information can be found in the Company’s Annual Report on Form 10-K for the year ended May 25, 2014, filed with the SEC on July 18, 2013. These documents are available free of charge at the SEC’s website at www.sec.gov.

The Company will be mailing a definitive proxy statement and proxy card to the stockholders entitled to vote at the Annual Meeting. WE URGE INVESTORS TO READ ANY PROXY STATEMENT (INCLUDING ANY SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT THE COMPANY MAY FILE WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Stockholders will be able to obtain, free of charge, copies of any proxy statement and any other documents filed by the Company with the SEC in connection with the proxy solicitation at the SEC’s website at www.sec.gov. In addition, copies will also be available at no charge at the Investors section of the Company’s website at http://investor.darden.com/investors/investor-relations/default.aspx. Permission to use quotations in these materials was neither sought nor obtained.

EX-99.2

Update On Successful Red Lobster

Sale Process

AUGUST 4, 2014

Exhibit 99.2

Forward-Looking Statement

These materials may contain forward-looking statements concerning the Company’s expectations, goals or objectives. Forward-looking

statements in this communication that are not historical facts, including without limitation statements concerning our future economic

performance, plans or objectives and expectations regarding the performance of the Company following the sale of Red Lobster and

related matters, are made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Any forward-looking

statements

speak

only

as

of

the

date

on

which

such

statements

are

made,

and

we

undertake

no

obligation

to

update

such

statements

to

reflect events or circumstances arising after such date except as required by law. We wish to caution investors not to place undue

reliance on any such forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties that could

cause

actual

results

to

materially

differ

from

those

anticipated

in

the

statements.

The

most

significant

of

these

uncertainties

are

described in Darden's Form 10-K, Form 10-Q and Form 8-K reports (including all amendments to those reports). These risks and

uncertainties include the ability to achieve Darden's strategic plan to enhance shareholder value including realizing the expected benefits

from the sale of Red Lobster, actions of activist investors and the cost and disruption of responding to those actions, including any proxy

contest for the election of directors at our annual meeting, food safety and food-borne illness concerns, litigation, unfavorable publicity,

risks relating to public policy changes and federal, state and local regulation of our business including health care reform, labor and

insurance costs, technology failures, failure to execute a business continuity plan following a disaster, health concerns including virus

outbreaks, intense competition, failure to drive sales growth, our plans to expand our smaller brands Bahama Breeze, Seasons 52 and

Eddie V's, a lack of suitable new restaurant locations, higher-than-anticipated costs to open, close, relocate or remodel restaurants, a

failure to execute innovative marketing tactics and increased advertising and marketing costs, a failure to develop and recruit effective

leaders, a failure to address cost pressures, shortages or interruptions in the delivery of food and other products, adverse weather

conditions

and

natural

disasters,

volatility

in

the

market

value

of

derivatives,

economic

factors

specific

to

the

restaurant

industry

and

general macroeconomic factors including unemployment and interest rates, disruptions in the financial markets, risks of doing business

with

franchisees

and

vendors

in

foreign

markets,

failure

to

protect

our

service

marks

or

other

intellectual

property,

impairment

in

the

carrying value of our goodwill or other intangible assets, a failure of our internal controls over financial reporting, or changes in

accounting standards, an inability or failure to manage the accelerated impact of social media and other factors and uncertainties

discussed from time to time in reports filed by Darden with the Securities and Exchange Commission.

Important Additional Information

The

Company,

its

directors

and

certain

of

its

executive

officers

are

participants

in

the

solicitation

of

proxies

from

stockholders

in

connection with the Company’s 2014 annual meeting of stockholders (the “Annual Meeting”).  Information regarding the names and

interests of such participants in the Company’s proxy solicitation is set forth in the Company’s preliminary proxy statement, filed with

the

SEC

on

July

31,

2014,

as

amended,

and

the

Company

revocation

solicitation

statement,

filed

with

the

SEC

on

April

1,

2014.

Additional

information can be found in the Company’s Annual Report on Form 10-K for the year ended May 25, 2014, filed with the SEC on July 18,

2014.

These

documents

are

available

free

of

charge

at

the

SEC’s

website

at

www.sec.gov.

The Company will be mailing a definitive proxy statement and proxy card to the stockholders entitled to vote at the Annual Meeting.  WE

URGE INVESTORS TO READ ANY PROXY STATEMENT (INCLUDING ANY SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT

DOCUMENTS THAT THE COMPANY MAY FILE WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE

BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.  Stockholders will be able to obtain, free of charge, copies of any proxy

statement and any other documents filed by the Company with the SEC in connection with the proxy solicitation at the SEC’s website

at

www.sec.gov.

In addition, copies will also be available at no charge at the Investors section of the Company’s website

at

http://investor.darden.com/investors/investor-relations/default.aspx.

Permission

to

use

quotations

in

these

materials

was

neither

sought nor obtained.

•

Sale of Red Lobster, completed July 28, was the culmination of a

robust process and deliberate review designed to maximize

value and minimize risks associated with continuing to own the business

•

After careful evaluation, the Board was certain that halting a robust Red Lobster sale process mid-course would have:

•

Red Lobster sale better positions Darden for sustained growth and value creation

•

$2.1

billion

represents

a

premium

multiple

compared

to

comparable

restaurant

deals¹

and

exceeded

industry

analysts’

expected valuation ranges for the business

—

Forward multiple even higher

given anticipated continued financial declines in performance

Red Lobster Sale Recap

DARDEN BOARD MONETIZED RED LOBSTER AT AN ATTRACTIVE PRICE AND IS

NOW

FOCUSED ON OLIVE GARDEN’S TURNAROUND WHERE THERE IS SIGNIFICANT

OPPORTUNITY FOR VALUE CREATION

December 19, 2013

Announced Plans to

Separate Red Lobster

May 16, 2014

Announced

Sale of Red Lobster

July 28, 2014

Red Lobster

Sale Closed

Selected Key Dates of Red Lobster Process

Early 2013

Darden Undertook an Extensive

Strategic Review of its Portfolio

April 29, 2014

Received Final Bids

For Red Lobster

1

Comparable transaction multiples are shown on page 9 of this presentation.

Starboard purchased nearly half of its current total investment in Darden AFTER our December 19th announcement,

representing more than $200 million of Darden stock and an exponential increase from its small prior ownership position

March 10, 2014

Filed Form 10 for Red

Lobster

—

Materially reduced the value achieved given the sustained and continuing declines in Red Lobster’s operating

performance

—

Exposed Darden to significant financial performance volatility and distracted from Olive Garden’s brand renaissance

—

Likely resulted in a failed process as bidders strongly advised Darden that the uncertainty associated with a shareholder

approval closing condition would be unacceptable

Strategic Rationale for Red Lobster Sale

•

Red Lobster was experiencing long-term erosion in total traffic and had historically exhibited significant same-restaurant sales and

traffic volatility, adversely affecting Darden’s performance

•

Red Lobster’s growth profile and capital priorities were meaningfully different from the remainder of Darden

•

Sale meaningfully reduced operating and financial volatility of Darden and improved future growth trajectory

Cumulative Sales Growth FY2009 to FY2014

Darden Is Better Positioned for Growth Post Red

Lobster Sale

RED LOBSTER WAS SOLD BECAUSE IT IS A STRUCTURALLY CHALLENGED BUSINESS THAT WAS A DRAG

ON DARDEN’S GROWTH AND DIMINISHED THE SIGNIFICANCE OF THE STRONG PERFORMANCE AT OUR

HIGHER GROWTH BRANDS AND OUR TURNAROUND EFFORTS AT OLIVE GARDEN

5Yr Sales Growth

($

billions)¹

5Yr

Sales

CAGR¹

5Yr EBITDA

CAGR¹

FY14 EBITDA

Margin

Darden Overall

$ 1.7

+4.3%

+1.4%

10.8%

Darden Ex. Red Lobster

1.8

+6.9

+4.5 

11.3

Improvement

+$0.1

+2.6%

+3.1%

+50bps

Red Lobster sale improves

growth trajectory and

reduces volatility

Note: EBITDA figures are unaudited and Non-GAAP, please refer to reconciliation on page 17.

1 

Time frame: Fiscal year 2009 through fiscal year 2014.

Darden excl. Red Lobster +40%

Darden Overall +23%

Red Lobster (5%)

40%

30%

20%

10%

0%

(10%)

Jun-2009

FY2010

FY2011

FY2012

FY2013

FY2014

Starboard Has Misled Investors Regarding the Red

Lobster Sale

STARBOARD HAS REPEATEDLY MISREPRESENTED THE FACTS IN ORDER TO FURTHER

ITS OWN AGENDA

1

2

4

3

5

6

Starboard Claims

Reality

Red Lobster sale was rushed

•

Decision

to

sell

was

made

after

an

extensive

strategic

review

by

Darden

that

began in early 2013 and on the heels of a sustained decade long period of

declining trends at Red Lobster

Darden received a negative value for Red

Lobster OpCo

•

Starboard erroneously attributes all transaction taxes, transaction expenses and

debt breakage costs to OpCo and also carelessly double counts transaction

expenses, resulting in analytical errors amounting to nearly half a billion dollars

in value

Value was destroyed as there were viable

“tax-efficient”

alternatives readily available

•

Sale/leaseback transaction resulted in premium valuation for real estate and

avoided valuation issues related to publicly-traded REIT such as single tenant

exposure, limited diversification and relatively high switching costs

Significant debt breakage costs were value

destructive

•

Through careful liability management afforded by a competitive process, the

after-tax net cash premium Darden will incur is negligible

Darden blatantly ignored a shareholder vote

to hold a special meeting

•

After serious consideration, the risk to shareholder value of effectively

terminating a process that had been developed before virtually all of

Starboard’s investment and which was generating significant competitive

tension

to

the

benefit

of

shareholders,

led

the

Board

to

proceed

with

the

Red

Lobster sale, strongly believing it was in the best interest of shareholders

The Board destroyed $1 billion in value by

electing to pursue the sale of Red Lobster

•

The

sale

allowed

Darden

to

monetize

Red

Lobster

at

an

attractive

price

and

avoided

risk

of

further

performance

deterioration

harming

Darden

and

its

shareholders, and Starboard’s claims conveniently ignore continuing negative

operating trends that began well before their investment 

Peak in Average Weekly

Guests Was Over a

Decade

Ago,

in

2002

Average Weekly Guests Have Been in Decline Since

2002

1

Early 2013

Undertake Extensive

Strategic Review

December 2013

Announce Plans

to Separate Red

Lobster

April / May 2014

Received Final

Bids / Announce

Sale of

Red Lobster

July 2014

Red Lobster

Sale Close

AVERAGE WEEKLY GUEST COUNT PER STORE AT RED LOBSTER HAS FALLEN 21% OVER

THE PAST DECADE

After over 15 years of growth

General Mills elected to spin-off its

restaurant group, which included

Red Lobster, in 1995

Note: Average weekly guest counts are per store.

1

Time frame: Fiscal year 2004 through fiscal year 2014 (trailing twelve month average).

Key Reasons for Long Term Structural Decline in Red Lobster’s Operations:

3,945

3,664

3,650

3,664

3,878

4,110

4,175

4,307

4,285

4,014

3,989

4,090

3,994

3,946

3,750

3,529

3,461

3,543

3,471

3,151

1

Economic and financial pressure on the middle class consumer increased and growth in household income overall slowed; Red Lobster’s less

affluent core guest impacted heavily

Increased competition as increased shrimp availability made it easy for non-seafood specialists to also offer shrimp

Persistent upward pressure on other seafood costs made it difficult for Red Lobster to take advantage of its “beyond shrimp” differentiation

Aggressive promotions brought guests into the restaurants, but were not sustainable once prices normalized

Red Lobster’s Financial Trends Continued to

Deteriorate Post Transaction Announcement

1

December 2013

Announce Plans to

Separate Red Lobster

April / May 2014

Received Final Bids /

Announce Sale of Red Lobster

Early 2013

Undertake Extensive

Strategic Review

Note: Quarterly figures are unaudited.  All growth rates are shown YoY.

July

Red Lobster

Sale Close

(4.0)%

(3.3)%

(5.1)%

2.3%

(3.3)%

(4.5)%

(6.5)%

(5.3)%

Q1 FY13

Q2 FY13

Q3 FY13

Q4 FY13

Q1 FY14

Q2 FY14

Q3 FY14

Q4 FY14

Red Lobster vs. Knapp

-Track

TM

Same-

Restaurant Sales

(4.6)%

(2.2)%

(4.4)%

4.2%

(5.9)%

(7.4)%

(14.3)%

(9.7)%

Q1 FY13

Q2 FY13

Q3 FY13

Q4 FY13

Q1 FY14

Q2 FY14

Q3 FY14

Q4 FY14

Traffic

(2.6)%

(2.7)%

(6.6)%

3.2%

(5.2)%

(4.5)%

(8.8)%

(5.6)%

Q1 FY13

Q2 FY13

Q3 FY13

Q4 FY13

Q1 FY14

Q2 FY14

Q3 FY14

Q4 FY14

Same-Restaurant Sales

•

$2.1 billion represented approximately 9x April LTM EBITDA and expected  to be closer to

approximately 10x as of transaction close, compared with approximately 8x for comparable

casual dining transactions

•

Combined with Starboard’s latest estimates for rent expense, Red Lobster OpCo was

expected to have less than $100 million of EBITDA as of transaction close

•

Red

Lobster

sale

allowed

Darden

to

monetize

a

declining

asset

at

an

optimal

price

with

proceeds used for buybacks and debt retirement which benefits shareholders more than

carrying the risk and volatility associated with owning Red Lobster

•

Red Lobster’s EBITDA declined 26% YoY from FY13 to FY14; same-restaurant sales well below

Knapp-Track

TM

•

Given deteriorating trends at Red Lobster and multiple turnaround attempts, the divestiture

is projected to be medium and long-term accretive

Starboard Wrongly Asserts That Red Lobster OpCo Was

Sold For a Negative Value

2

Starboard’s

analytical errors

amount to nearly

half a billion dollars

in total value

Value Paid For Red Lobster OpCo Was Significantly More Than Starboard Claims

Comparable Casual

Dining Transactions

LTM EV /

EBITDA

Tilman Fertitta / Landry's

8.0x

Oak Hill / Dave & Buster's

6.9x

Kelso & Co. / Logan's Roadhouse

7.8x

Golden Gate Capital /

California Pizza Kitchen

7.8x

Landry's / McCormick &

Schmick's Seafood

7.9x

Fidelity National / O’Charleys

5.8x

Centerbridge / P.F. Chang's

8.4x

Angelo Gordon / Benihana

9.1x

Thomas

H

Lee

/

Fogo

De

Chao

2

8.0x

Apollo / CEC Fidelity Entertainment

7.7x

Median

7.9x

Starboard then chose

to ignore the tax

implications on selling

Red Lobster real estate

in a letter published

May 22, 2014, by

hundreds of millions of

dollars

Starboard’s recent

letter published on July

15, 2014 also double

counted debt breakage

and transaction costs in

misleading statements

amounting to over

$100 million of value

On March 31, 2014,

Starboard quoted ~$1.5

billion of value for the

Red Lobster real estate

portfolio in the context

of a potential REIT Spin,

but its assumptions

proved to be faulty¹

Note: $ in millions, EBITDA figures are unaudited and Non-GAAP, please refer to reconciliation on page 17.

1 

Starboard assumed $106 million in rent capitalized at a 14.6x REIT trading multiple in March 31 presentation. Starboard later estimated rental income of $119 million based

2

Source: Duff and Phelps.

on the ARCP transaction press release dated May 16, 2014, which would imply a multiple of 12.6x.

Tax-Efficient Alternatives For Real Estate Not Viable

3

Darden

REIT

Red Lobster

REIT

Key Differences

Eliminate

Valuation risk

X

X

•

Valuation is crystalized in a partial sale /

leaseback, whereas a REIT spin is subject to

public market trading

Avoid Discount

to Peers

X

X

•

There are many factors that indicate a Darden

REIT would most likely trade at a significant discount to

its NNN REIT peers; ARCP was also criticized for these

reasons (i.e. lower credit rated tenant, negative SRS)

following its acquisition of Red Lobster Real Estate¹

Certainty and

speed to

execute

transaction

X

X

•

It would take 12 -

18 months for a REIT spin to be

completed and the tax free status is dependent

on IRS tax determinations

Avoid Debt

Breakage

X

X

•

A Darden REIT could have resulted in significant

debt breakage costs (including make-whole payments on

existing bonds, despite Starboard’s assertions to the

contrary)

Maintain

Operational

Flexibility

X

X

•

Ability to easily close or relocate

underperforming units

•

Provides further evidence that Starboard's

assertions regarding availability of "tax-efficient"

buyers/structures is unrealistic

and not based on facts

•

Ultimately, value maximized through sale

to large diversified REIT

•

Even larger buyers had reduced interest

given tenant concentration concerns

•

Size of Red Lobster real estate portfolio

would negatively impact tenant diversity

for smaller buyers

•

Darden considered all potential transaction

structures

•

Broad group of real estate buyers were

contacted during publicly announced Red

Lobster process

Considerations

Red Lobster REIT Was Not a Viable “Tax-Efficient” Alternative

Starboard claims that value was destroyed as there were viable “tax-efficient” alternatives readily available

Sale /

Leaseback

¹

Please

refer

to

Darden’s

March

3  ,

2014

investor

presentation

for

reasons

that

a

REIT

might

trade

at

a

discount.

Please

also

refer

to

Forbes’

article

dated

June

30  ,

2014.

Expansive Real Estate Process Did Not

Result in Any “Tax-Efficient" Proposals

rd

th

Starboard Misrepresented Debt Breakage Costs

4

THROUGH CAREFUL LIABILITY MANAGEMENT, DARDEN DID NOT INCUR FINANCIALLY

SIGNIFICANT CASH COSTS WHEN PAYING DOWN DEBT

•

Estimated 2014 $0.43 EPS impact, resulting from loan breakage and related unamortized non-cash

charges, ameliorated by retiring $1.0 billion of debt with transaction cash proceeds, resulting in minimal

$3 million after-tax cash cost

•

The cash efficiency of this effort was accomplished through careful liability management afforded by a

competitive process selectively applied to a limited amount of the debt portfolio

Included individual negotiations with private placement debt holders that yielded a substantial

discount to make whole premiums

Waterfall

tender

process

focused

on

tranches

with

lower

premiums

and

maximum

tax

shield

opportunities

Private placement debt has settled and tender offer settlement of public notes expected in early

August

Tax benefit of non-cash charges significantly accelerated tax benefits of unamortized deferred

costs

•

This is to be contrasted with a retirement of the entire debt portfolio likely required under certain

scenarios

proposed

by

Starboard,

which

would

clearly

necessitate

much

more

costly

make

whole

call

premium payments

After Careful Consideration of Shareholder Interests the

Board Decided to Proceed with the Sale of Red Lobster

5

•

On

December

19,

2013

Darden

announced

the

Red

Lobster

process

and

garnered

interest

from

numerous

financial,

strategic

and

real estate buyers

•

On April 29, 2014 Darden received final bids for Red Lobster

Key Considerations For the Board

Clear Messages Received From Shareholders

•

The sale of Red Lobster was highly attractive both financially

and strategically

•

The real estate investment climate is excellent and the debt

markets are currently very strong

•

The competitive Red Lobster process would be extremely

difficult to restart if it were interrupted and significantly

delayed

•

Delay would risk further decline in Red Lobster’s performance

continuing to harm Darden

•

Delay would most likely result in a less attractive acquisition

price or a failed process

•

Many shareholders expressed concern about a spin-off of Red

Lobster because either the spun-off entity’s market

capitalization would be too small to meet their investment

guidelines or they were reluctant to hold Red Lobster shares

for a potentially extended turnaround period

•

Many shareholders expressed the view that an attractive sale

of Red Lobster would be a favorable outcome for Darden

shareholders

•

Many shareholders indicated that, while they supported the

call of the special meeting, they had not decided how they

would vote at the meeting and noted that the special meeting

request did not distinguish between a spin and a sale

THE DECISION TO PROCEED WITH THE SALE WAS MADE AFTER CAREFUL CONSIDERATION, TAKING INTO

ACCOUNT SHAREHOLDER FEEDBACK AND THE RISK OF TERMINATING A HIGHLY COMPETITIVE RED

LOBSTER SALE PROCESS

Following Starboard’s announcement that it would seek a special shareholder meeting regarding the Red Lobster separation,

bidders strongly advised Darden that the uncertainty associated with a shareholder approval closing condition would be

unacceptable given the time and financial resources required to explore a transaction and formulate a final bid

—

Darden’s Board was faced with the decision of either effectively terminating the process or proceeding with an attractive

transaction

which

had

been

developed

over

nearly

six

months

in

a

process

that

created

significant

competitive

tension

—

Darden’s Board concluded that the best interests of Darden and its shareholders would be served by proceeding with the sale

6

IF THE TRANSACTION HAD BEEN DELAYED UNTIL JULY, WE BELIEVE IT WOULD HAVE

RESULTED IN A VALUATION SUBSTANTIALLY LESS THAN THE $2.1 BILLION

ACHIEVED

Note: $ in millions, except per share data, EBITDA figures are unaudited and Non-GAAP, please refer to reconciliation on page 17.

Early 2013

Undertook Extensive

Strategic Review

December 2013

Announced Plans to

Separate Red Lobster

April /May 2014

Received Final Bids /

Announced Sale of Red Lobster

July 2014

Red Lobster

Sale Closed

Delaying the Red Lobster Sale Would Have Materially

Reduced Value Achieved

12.9 %

12.9 %

12.0 %

11.7 %

10.7 %

10.2 %

9.7 %

9.3 %

Q1 FY13

Q2 FY13

Q3 FY13

Q4 FY13

Q1 FY14

Q2 FY14

Q3 FY14

Q4 FY14

LTM EBITDA Margin

$232

$229

$197

$191

$158

$139

$119

$104

Q1 FY13

Q2 FY13

Q3 FY13

Q4 FY13

Q1 FY14

Q2 FY14

Q3 FY14

Q4 FY14

LTM EBIT ($ in millions)

$342

$342

$311

$307

$277

$261

$243

$228

Q1 FY13

Q2 FY13

Q3 FY13

Q4 FY13

Q1 FY14

Q2 FY14

Q3 FY14

Q4 FY14

LTM EBITDA ($ in millions)

Analysts Recognize the Value We Achieved With the

Sale of Red Lobster…

6

“The 9x EBITDA valuation for the trailing 12 months through February still represents a reasonable

deal

for

DRI,

in

our

view,

while

providing

an

opportunity

for

DRI

to

(1)

strengthen

its

balance

sheet;

and

(2)

turn

operational

focus

toward

turning

around

operations

at

the

flagship

Olive

Garden

concept.”

(Miller Tabak & Co., 16-May-2014)

(Wunderlich Securities, 16-May-2014)

“Darden rids itself of its most troubled business. And, the sale price is about what the Street was expecting.”

(Janney Montgomery Scott LLC, 16-May-2014)

“We believe Darden received a fair price for the Red Lobster business, comparable with similar restaurant

transactions and slightly above our estimated stand-alone valuation.”

(Telsey Advisory Group, 19-May-2014)

“We

recognize

[the

sale

of

Red

Lobster]

as

a

positive

development

for

Darden,

allowing

management

to:

1)

jettison

its

struggling

Red

Lobster

division

for

what

appears

to

be

a

fair

price

(quoted

at

~9x

Red Lobster trailing 12 month EBITDA).”

…And the Positive Implications for Darden

“Absent recent activist involvement, we believe investors would have appreciated the strategic merit of

such

a

transaction;

monetizing

the

most

volatile

brand,

while

allowing

for

renewed

focus

on

resurrecting the

Olive Garden brand.”

(Barclays Bank PLC, 16-May-2014)

“We view [the sale of Red Lobster] as a positive for Darden shareholders, as it will enhance the company’s

overall growth and margin profile, reduce the company’s exposure to seafood commodity cost swings,

improve Darden’s credit metrics, and allow the company to return cash to shareholders.”

(Morningstar Equity Research, 16-May-2014)

“We

believe

that

the

sale

of

Red

Lobster

is

a

long-term

positive

for

DRI

as

it

reduces

the

volatility

of

the

Company’s financial performance and will provide for reduction in debt.”

(Sterne, Agee & Leach, Inc., 16-May-2014)

“The

net

impact

of

this

transaction

is

that

Darden

will

be

a

high

dividend

yielding

company

without

the

volatility

and ongoing earnings drag from Red Lobster.”

(RBC Capital Markets, 16-May-2014)

“The sale of RL should result in less earnings volatility for DRI, but should allow management to focus

on

improving

sales

at

Olive

Garden,

as

we

believe

improved

sales

trends

at

OG

are

critical

to

driving EPS

growth and meaningful share appreciation for DRI.”

(KeyBanc Capital Markets, 19-May-2014)

6

Red Lobster Sale: Delivering on Our Ongoing Commitment to

Darden's Strategic and Financial Transformation

Objectives for Darden

Achieved By the

Red Lobster Sale

Transform Darden’s restaurant portfolio into two independent companies that can

each focus on separate and distinct opportunities to maximize shareholder value

Allow “New Darden”

and “New Red Lobster”

to better serve increasingly divergent

guest targets

Maintain current dividend

Maintain investment grade credit metrics at Darden

Avoid complexity that could derail Olive Garden improvement

Maintain operational and financial flexibility

Non-GAAP EBITDA Reconciliation

Darden Restaurants, Inc.

Update on Successful Red Lobster Sale Process

Non-GAAP Reconciliation

($ in millions)

Non-GAAP Reporting

In

addition

to

U.S.

generally

accepted

accounting

principles

(GAAP)

reporting,

Darden

has

presented

certain

measures

on

a

non-GAAP

basis

in

the

Update

On Successful Red Lobster Sale Process, such as Earnings Before Interest and Taxes (EBIT) and Earnings Before Interest, Taxes,

Depreciation and

Amortization (EBITDA). This non-GAAP information should be viewed in addition to, and not in lieu of, our reported amounts as calculated in accordance with GAAP.

Q1 FY13

Q2 FY13

Q3 FY13

Q4 FY13

Q1 FY14

Q2 FY14

Q3 FY14

Q4 FY14

Earnings Before Interest and Taxes (EBIT):

Sales

2,655.2

$ 

2,642.4

$ 

2,600.1

$ 

2,622.4

$ 

2,586.3

$ 

2,557.6

$ 

2,499.4

$ 

2,460.0

$ 

232.6

229.7

197.4

191.0

158.4

139.4

118.6

104.1

Interest Expense

(0.4)

(0.4)

(0.2)

(0.0)

(0.0)

(0.1)

(0.1)

(0.1)

EBIT

232.2

$     

229.4

$     

197.2

$     

191.0

$     

158.4

$     

139.4

$     

118.5

$     

104.0

$     

Depreciation & Amortization

110.0

112.3

114.2

115.9

118.9

121.9

124.8

123.9

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA):

EBITDA

342.2

$     

341.7

$     

311.4

$     

306.9

$     

277.3

$     

261.2

$     

243.3

$     

227.9

$     

EBITDA Margin

12.9%

12.9%

12.0%

11.7%

10.7%

10.2%

9.7%

9.3%

Twelve Months Ended:

EBT:

Earnings Before Taxes