OperatingDardenwiththeRight

Talent,Plan,andPriorities
SEPTEMBER 2014
ForwardLookingStatement
ThesematerialsmaycontainforwardlookingstatementsconcerningtheCompanysexpectations,goalsorobjectives.Forwardlooking
statementsinthiscommunicationthatarenothistoricalfacts,includingwithoutlimitationstatementsconcerningourfuture economic
performance,plansorobjectivesandexpectationsregardingtheperformanceoftheCompanyfollowingthesaleofRedLobsterand
relatedmatters,aremadeundertheSafeHarborprovisionsofthePrivateSecuritiesLitigationReformActof1995.Anyforwardlooking
statementsspeakonlyasofthedateonwhichsuchstatementsaremade,andweundertakenoobligationtoupdatesuchstatements to
reflecteventsorcircumstancesarisingaftersuchdateexceptasrequiredbylaw.Wewishtocautioninvestorsnottoplaceundue
relianceonanysuchforwardlookingstatements.Bytheirnature,forwardlookingstatementsinvolverisksanduncertaintiesthatcould
causeactualresultstomateriallydifferfromthoseanticipatedinthestatements.Themostsignificantoftheseuncertaintiesare
describedinDarden'sForm10K,Form10QandForm8Kreports(includingallamendmentstothosereports).Theserisksand
uncertaintiesincludetheabilitytoachieveDarden'sstrategicplantoenhanceshareholdervalueincludingrealizingtheexpectedbenefits
fromthesaleofRedLobster,actionsofactivistinvestorsandthecostanddisruptionofrespondingtothoseactions,includinganyproxy
contestfortheelectionofdirectorsatourannualmeeting,foodsafetyandfoodborneillnessconcerns,litigation,unfavorablepublicity,
risksrelatingtopublicpolicychangesandfederal,stateandlocalregulationofourbusinessincludinghealthcarereform, laborand
insurancecosts,technologyfailures,failuretoexecuteabusinesscontinuityplanfollowingadisaster,healthconcernsincludingvirus
outbreaks,intensecompetition,failuretodrivesalesgrowth,ourplanstoexpandoursmallerbrandsBahamaBreeze,Seasons52and
EddieV's,alackofsuitablenewrestaurantlocations,higherthananticipatedcoststoopen,close,relocateorremodelrestaurants,a
failuretoexecuteinnovativemarketingtacticsandincreasedadvertisingandmarketingcosts,afailuretodevelopandrecruiteffective
leaders,afailuretoaddresscostpressures,shortagesorinterruptionsinthedeliveryoffoodandotherproducts,adverseweather
conditionsandnaturaldisasters,volatilityinthemarketvalueofderivatives,economicfactorsspecifictotherestaurantindustryand
generalmacroeconomicfactorsincludingunemploymentandinterestrates,disruptionsinthefinancialmarkets,risksofdoing business
withfranchiseesandvendorsinforeignmarkets,failuretoprotectourservicemarksorotherintellectualproperty,impairment inthe
carryingvalueofourgoodwillorotherintangibleassets,afailureofourinternalcontrolsoverfinancialreporting,orchangesin
accountingstandards,aninabilityorfailuretomanagetheacceleratedimpactofsocialmediaandotherfactorsanduncertainties
discussedfromtimetotimeinreportsfiledbyDardenwiththeSecuritiesandExchangeCommission.
2
ImportantAdditionalInformation
ImportantAdditionalInformation
TheCompany,itsdirectorsandcertainofitsexecutiveofficersareparticipantsinthesolicitationofproxiesfromstockholdersin
connectionwiththeCompanys2014annualmeetingofstockholders(theAnnualMeeting).Informationregardingthenamesand
interestsofsuchparticipantsintheCompanysproxysolicitationissetforthintheCompanysdefinitiveproxystatement,filedwiththe
SEConSeptember9,2014.AdditionalinformationcanbefoundintheCompanysAnnualReportonForm10KfortheyearendedMay
25,2014,filedwiththeSEConJuly18,2013.ThesedocumentsareavailablefreeofchargeattheSECswebsiteatwww.sec.gov.
TheCompanywillbemailingitsdefinitiveproxystatementandproxycardtothestockholdersentitledtovoteattheAnnualMeeting.
WEURGEINVESTORSTOREADANYPROXYSTATEMENT(INCLUDINGANYSUPPLEMENTSTHERETO)ANDANYOTHERRELEVANT
DOCUMENTSTHATTHECOMPANYMAYFILEWITHTHESECCAREFULLYANDINTHEIRENTIRETYWHENTHEYBECOMEAVAILABLE
BECAUSETHEYWILLCONTAINIMPORTANTINFORMATION.Stockholderswillbeabletoobtain,freeofcharge,copiesofanyproxy
statementandanyotherdocumentsfiledbytheCompanywiththeSECinconnectionwiththeproxysolicitationattheSECswebsiteat
www.sec.gov.Inaddition,copieswillalsobeavailableatnochargeattheInvestorssectionoftheCompanyswebsiteat
http://investor.darden.com/investors/investorrelations/default.aspx.
3
Wehavehadnumerousconversationswithourshareholders,includingStarboard,overthepastseveralmonthsregarding
Darden'soperatingplanandtheOliveGardenBrandRenaissance
OliveGardensturnaroundisunderway,withsignsofimprovementacknowledgedbymanymembersoftheanalyst
community:
Newmenuitemshavereinforcedvalue,expandedvariety,andsupportedincreaseddemandfromkeycustomer
segments,includingmillennials
Technologyenabledonlineorderingisinplaceandstrengtheningtakeoutbusiness
Guestexperienceandsatisfactionscoresareimproving
Testingoftablettechnologyisunderwayandgeneratingencouragingresults
LongHorn continuestoachievetremendousgrowthwithsamerestaurantsalesexceedingtheindustryby3.8%infiscal
2014andguestcountsexceedingtheindustryforthe19thconsecutivequarterinfirstquarter,fiscal2015
OurSpecialtyRestaurantscontinuetoprovidestrongunitgrowthandcompetitivelysuperiorsamerestaurantsales
growth
Infiscal2015,ourcostsavingeffortsresultedinSG&Aexpenseplannedatlessthan9.0%andtotalG&Aspendof
approximately5.0%,withthepotentialforfurtherreductionsgoingforward
AsStarboard'splanadoptsmanyoftheseDardeninitiativesasitsown,wearepleasedthatStarboardagreeswiththeactions
wearetakingtoreinvigoraterestaurantperformance,reducecosts,anddrivegrowth
Dardensrecommendationofanew Board,anew independentChairman,new Boardcommittees,andanew CEOwill
leadtosubstantial,positivechange
WeBelieveOurCurrentInitiativesAreAlreadyDelivering
Results,andAddressMostofStarboardsSuggestions
4
VoteontheBLUE proxycardFORALLofDardenshighlyqualified,
independentnomineestotheBoardofDirectors
WeBuiltDardenintothePremierFullServiceRestaurant
CompanyintheIndustry
5
PREMIERBRANDS
Dardenistheleadingmultibrandrestaurantoperator
withauniqueanddifferentiatedportfoliowellpositioned
todrivegrowth
Developedbrandstohaveindustryleadingaverageunit
volumes,marginsandrestaurantlevelreturns
Increasedsalesby$5.1billionandunitgrowthby934
unitssinceFY95(excludingRedLobster)
HistoricallyoutperformedKnappTrack,thecasual
diningindexandindustrybenchmarkinsamerestaurant
sales
Strongcashflowgenerationhasallowedustoreturn
over$4billionofcapitaltoshareholderssinceFY95
Becamethefirstfullservicerestaurantcompanynamed
toFORTUNEs100BestCompaniestoWorkForlist
(2011,2012,2013,and2014)
DardenTotalSales($inbillions,excl.RedLobster)
$3.2 $5.3 $5.7 $5.9 $6.7 $7.2 $7.1 $7.5 $8.0 $8.6 $8.8
SalesCombinedBasis(incl. RedLobster)
DardenTotalUnits(excl.RedLobster)
1,243 1,268 1,292 1,324 1,700 1,771 1,824 1,894 1,994 2,138 2,207
UnitsCombinedBasis(incl. RedLobster)
567 589 610 644
1,020
1,081
1,130
1,196
1,289
1,431
1,501
FY95 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14
$1.2
$2.5
$2.8
$3.0
$4.0
$4.6 $4.6
$5.0
$5.3
$5.9
$6.3
FY95 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14
Nearly30 yearsofrestaurantoperatingexperience; wasnamedtohiscurrentroleinSeptember2013
Priortothisrole,GeneservedasPresidentofDardensSpecialtyRestaurantsGroupforsixyears
UnderGenesleadership,SpecialtyRestaurants grewfrom60to175restaurants,includingtheacquisitionof
tworestaurant concepts
Deliveredannualizedsalesgrowthof17% andannualrestaurantearningsgrowthof26%
GenejoinedDardeninOctober2007aspartoftheCompanysacquisitionofRAREHospitalityInternational,where
heservedasPresidentandChiefOperatingOfficer
AfterbeingnamedPresidentandCOOinJanuary2001,Geneledasuccessfulturnaroundplantorevitalize
bothLongHorn andTheCaptial Grille
RAREsmarketcaproseduringthattimeframefrom$420mmto$1,170mm
Provenindustryleaderwithmorethan35yearsofrestaurantoperatingexperience
DavewasnamedPresidentofOliveGardeninJanuary2013
Beforethisappointment,DaveservedasPresidentofLongHorn Steakhousefornineyears
DavejoinedLongHorn inApril1998asVicePresidentofOperations.Twoyearslater,hewaspromotedtoVice
PresidentofOperationsforTheCapitalGrille.HereturnedtoLongHorn inOctober2001andwasnamedPresident
in2003
Earlierinhiscareer,DaveservedasVicePresidentofOperationsforBattlegroundRestaurantGroup.Hebeganhis
restaurantcareerstraightoutofcollegeasanAssistantManagerwithHoulihans.Duringhis12yearswith
Houlihans,heheldpositionsofincreasingresponsibilityincludingAreaDirectorofOperationsforeightrestaurants
WeAreConvincedDardenHastheRightLeadersto
ContinuethePositiveMomentum
6
GeneLee,PresidentandChiefOperatingOfficer
DaveGeorge,PresidentofOliveGarden
Successfulleaderwithnearly20yearsofrestaurantoperationalexperience
ValeriewasnamedPresidentofLongHorn SteakhouseinJanuary2013
Beforethispromotion,ValerieservedasChiefRestaurantOperationsOfficer(CROO)forDardenwheresheled
strategicoperationsinitiativesacrosstheenterprise
PriortobecomingCROO,sheservedasExecutiveVicePresident(EVP)ofOliveGardenforsevenyears,whereshe
successfullyopenednearly200restaurants whilemaintainingoperationalexcellenceatexistingrestaurants
ValeriejoinedDardeninJanuary1997asDirectorofPurchasing.In1998,shewaspromotedtoVicePresidentof
DistributionandquicklyadvancedtoVicePresidentofOperationsImprovementin2000,andthentoSeniorVice
PresidentofOperationsforOliveGardensDallas divisioninJune2001
Restaurantentrepreneurandprovenbusinessleaderwithmorethan25yearsofexperience
Harald wasnamedtohiscurrentroleinJanuary2014.Previously,Harald servedasPresidentofYardHouse,abrand
hehelpedlaunchin1996andsuccessfullygrewtocriticalacclaim,andwaslateracquiredbyDardenin2012
Inthemid1990sHarald metSteelePlatt,whowasdevelopingarestaurantconceptwithasimpleformula:the
worldslargestselectionofdraughtbeercoupledwithgreatfoodandaclassicrockmusicprogram
Harald wastappedtohelplaunchtheflagshipYardHouse inSouthernCalifornia
YardHousequicklyemergedasoneofSouthern Californiasmostfinanciallysuccessfulindependent
restaurants,andlessthantwoyearslaterHarald wasmadepartnerastheCompanybegantoexpandinto
othermarkets
WeAreConvincedDardenHastheRightLeadersto
ContinuethePositiveMomentum(Contd)
7
ValerieInsignares,PresidentofLongHorn Steakhouse
Harald Herrman,PresidentofSpecialtyRestaurantGroup
SinceGeneLeespromotiontoPresidentandChiefOperatingOfficerin
September2013,Dardenhaslaunched anumberofinitiativestoimprove
restaurantleveloperations:
Food: Differentiatedmenusthatleveragequalityingredients,flavorful
recipes,andartisticallypresentedfoodtodeliverontheguestsneeds
withoutaddingoperationalcomplexity
Service: Friendly,timelyandcompetentservice
Atmosphere: Focusonmaintainingclean,appropriatelylitrestaurants
withanenergizingfeeltoprovideacomfortableenvironmentthatguests
enjoy
OperationalControls: Realignsupportfunctionstolinkwithbrandgoals:
Restructuredkeysupportfunctionstoimproveefficiency
Expediteddaytodaydecisionmaking
Introducedsocialmediasupporttoactivelyengagewithguests
GeneLeeHasSharpenedtheCompanysFocuson
RestaurantLevelOperationsandGuestExperienceThrough
AProvenBacktoBasicsApproach
8
Recognition
Forfourconsecutiveyears,DardenhasbeenlistedasoneoftheFortune100BestCompaniestoWork
For,arankingthatreflectsacomprehensiveandindependentlyadministeredsurveyofourfrontline
employees
OliveGarden,LongHorn Steakhouse,andTheCapitalGrillearerecognizedbyPeopleReport,aleading
industryHumanResourcesorganization,asleaderswhenitcomestoemployeeengagementand
retention.Thesesameleadership,compensation,andotherpractices areemployedacrossallourbrands
atDarden
RetentioniscompetitivelysuperiortoourIndustry
Dardensannualturnoverineachfrontlineemployeesegmentiswellbelowthecasualdiningindustry
average 10pointsbelowtheindustryformanagers,and25pointsbelowtheindustryforhourly
employees
CareersaremadeatDarden
Nearly50%ofourrestaurantmanagersarepromotedfromwithin
99%ofourGeneralManagersandManagingPartners(GM/MP)arepromotedfromrestaurantmanager.
And,99%ofourDirectorofOperationsleaderswerepromotedfromGM/MP
Compensationiscompetitive,ifnotbetterthan,theIndustry
WebelieveDarden'srestaurantGeneralManagers'salariesarecompetitive.Inaddition,theirtargeted
performancebasedcompensation isapproximately40%ofbasesalaryandisuncapped
DardensPeopleHaveExpressedTheirAffectionfor,
ConfidenceinandCommitmenttotheCompanyinthe
ClearestWaysPossible
9
WeCareAboutOurPeople,AndOurPeopleCareAboutDarden
1
People Report is an HR service that tracks retention, staffing levels, turn-over and provides compensation data for restaurant industry on
monthly, quarterly and annual basis.
WeBelieveOliveGardenHoldsanEnviablePositionwith
LeadingAUVs,RestaurantLevelProfitabilityandGuest
SatisfactionScores
1
0
Source:2014NationsRestaurantNewsTop100Report(June2014),CompanyinformationforOlive
Garden;mostrecent10Kfilingsforallothers
1
Reflectslatestreportedfiscalyear.EBITDARPerRestaurant=(Companyownedrestaurantsales food&
beverageexpenses restaurantlabor restaurantexpenses(excludingrentandmarketing) preopening
expenses)/companyownedrestaurants.
GuestSatisfactionScores
2
$4.4
$3.2
$2.8
$1.7
2
Source:NPDCrestasoffiscal2014YearEnd.
3
NationallyadvertisedcompetitorsistheaggregateofApplebees,Chilis,TGIFridaysandRubyTuesday.
IndustryLeadingAUVs($inmillions)
andEBITDARPerRestaurant($inmillions)
1
$1.1
$0.8
$0.7
$0.3
42%
44%
35%
35%
51%
52%
43%
37%
QualityofFood
PleasantFriendlyService
AtmosphereAmbiance
GoodValueforMoney
OliveGarden NationallyAdvertisedCompetitors
TheOliveGardenBrandRenaissanceIsUnderwayand
DeliveringResults
1
1
WeBelieveCoreMenuInnovationisDrivingBaseGuest
CountGrowthThroughExpandedRelevanceandValue
OperationsAreHighlyFocusedon
DeliveringFlawlessGuestExperiences
Wearemakingmenuchangesthatreinforcevalueand
relevance,improvequalityandsimplifyprocessestoenhance
theguestexperienceandmanagecosts
Newcoremenuissuccessfullydeliveringbettervalueatall
pricerangesonthemenu
KeyattributesontasteandqualityoffoodasmeasuredbyNPD
Cresthaveimproved
TheCucina Miaplatform, whichisattractivetoMillennials,
alongwithhigherqualitybeefandseafoodofferingsare
examples
Ourrestaurantoperationsleadership,togetherwithourteam
members,areenergizedandworkingtowardacommongoal
Anintensifiedemphasisonserviceandfoodqualityisleadingto
enhancedguestexperiences
Inthefirstquarter,theGreatFoodGorallycrywaslaunched
withinitialconcentrationonimprovingexecutionofmostpopular
menuitems(similartoBrilliantwithBasicsprogramsuggestedby
Starboard)
Inaddition,revisitintentscores,asmeasuredbyNPDCrest,have
increasedoverprioryear,aleadingindicatorofgrowth
BroaderMediaReachwithaVarietyofMessages ReimagingProgramShowing SignsofSuccess
Broadeningthewaywereachouttogueststhroughsecondary
television, digitalmessagesand relyinglessondeepdiscountor
bundled promotions
OliveGardenssocialmediapresenceisconsiderablymore
activeandrelevantthaninthepast
Usingareturnoninvestmentapproachformeasuringmedia,
wearegraduallyreducingTVspendandinvestingindigitalfora
netreductionintotaladvertising spend
Reimagingmanyguesttouchpointsincludingplateware,server
uniforms,newlogo,exteriorsignage,andnewtabletop
merchandising
Newlyremodeledrestaurants areaveragingover10%traffic
growth
Wearerealizinganincreaseinalcoholsalesandtotalaverage
checkintheremodeledrestaurants
Weareontrackfor75remodelsinfiscal2015
1
3
2
4
RenaissancePlanUpdate:CoreMenuEvolution
1
2
NewDinner
MenuTest
LunchMenu
Refresh
ValueFocus
OptimizeourCucina
Miaeverydayvalue
platform
Increaseentrees
under$15
TuscanTrio
Combinations
70combinations
under$10
Choice/Variety
Lighter,fresher,
betterforyou
options
Newflatbread,
sandwich
selections,and
saladtoppers
Convenience
Nationalrollout
ofonlineordering
Testlunchtime
guarantee
BrandRenaissanceElementsHavingaPositiveImpact
Newmenuitemshavereinforcedvalue,expandedvarietyandsupportedincreaseddemandfromkey
customersegments,includingmillennials
ProntoLunch:Wereduceddinetimesforguestsseekingaquickerlunchexperience
Byleveragingmetricsmadeavailableinournewtechnologyplatform,wehavesignificantlyreducedfalse
waits
Moreaffordableentrylevelpricepointsonthemenuandmorestrategicpricingactionshaveledto
reducedpricesensitivity
Guestexperienceandsatisfactionscoresareimprovingacrossthesystemasaresultofanintensifiedfocus
onserviceandfoodquality,whilenegativeindicators,asmeasuredbycustomercomplaints,are
decreasing
NationallaunchofourToGoPlatform,includingaredesignedwebexperienceisinplaceand
strengtheningthetakeoutbusiness
Infirstquarteroffiscal2015,OliveGardenachieveda13%increaseinitstakeoutbusinesscomparedto
thefirstquarteroflastyear
1
OnlineOrderingDrivingNewGrowthandPotentialMarginExpansion
StrategicInitiatives ProgresstoDate
1
Complaintspermillionguests.

Brandperception(recipes,productquality,value,marketing,etc.).
2
CustomerComplaintsAreDecreasing
48
59
69
53
37
19
26 29 27
18
66
120
84 81
68
FY11 FY12 FY13 FY14 Q1FY15 FY11 FY12 FY13 FY14 Q1FY15 FY11 FY12 FY13 FY14 Q1FY15
Service Food BrandNegatives
RenaissancePlanUpdate:CulinaryOperationsand
ServiceEnhancements
1
3
Simplify Operations
Ongoingculinary
simplificationprogram
Testingtabletoptablets
ImproveFood&BeverageQuality
Elevatefocusonsoup,
saladandbreadstick
execution
Newtrainingtoolsand
applicationstocertify
andvalidatebeverage
knowledge
IntensifyFocus ontheGuest
Greaterleadershipfocus on
underperforming restaurants
Traininganddevelopmentofallteam
membersthroughrecertification
Introducetabletoptabletstoenhance
theguestexperience
Testingoftablettechnologyinrestaurantsis
underwayandhasgeneratedencouragingresults
80%ofguestswherethetechnologyisinuseare
interactingwiththedevice,and60%ofthemare
payingthecheckonthetablet
Tabletusehasincreasedaddonsales,increased
tableturns,increasedguestsurveyresponserates,
andincreasedtippercentageforservers
TheCompanyexpectstablettechnologytobe
installedsystemwidebytheendof2015
2
ProgresstoDate StrategicInitiatives ProgresstoDate
1
Percentageofonlineordersfrominternetasopposedtothephone.
2
6

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Nationallaunchof
onlineplatform
OnlineAdoptionRateImprovingForToGoSales
1
StrategicInitiatives ProgresstoDate
BrandCommunication CommunicationsStrategy
Balancelimitedtimeoffersand
equitymessages
Greateruseofdigital/
socialmediaengagement
Communicatebalanceofbasebuildingandtrafficboosting
messages
Alwaysondigitalsupportforsearchandsocial
Hybridnational/localHispanicsupport
PromotionalMessaging PromotionElevation
Continuetoinjectnew
newsintoourpromotions
Launchnewadvertisingcampaign
emphasizingculinarycredentialsand
emotionalconnection
Targetedmessaging
withrelevantincentives
Unique&differentiatedpromos
Limitrepeatingpromotions
Valueaddedversusdiscountedpromotions
ParentsNightOut
Dinner&AMovie
Minimizeinvestment/complexity
Wehaveminimizedinvestmentinourpromotions,while
reducingoperationalcomplexitywithoutcompromisingguest
appeal
Leveragecore menuitems
UtilizeStartingAtpricepointswithmultiplebuyups
Leverageweekdayoffers
InRestaurantMerchandising MerchandisingEvolution
Redesignallmerchandisingmaterials
toreinforceculinaryexpertise,
elevatingmenunews,andeaseof
navigation
Fewerpiecesontable
Ownable foodphotography
Tabletop Tablets
RenaissancePlanUpdate:OliveGardenApproachto
Advertising&Promotions
1
4
3
TheFourWalls
Remodeltheinteriorandexteriorof75
restaurantsinfiscal2015
GuestTouchpoints
Rolloutnewsignswithnewlogoand
plateware inallremodeledmarkets
RenaissancePlanUpdate:ReimagingProgram
1
5
InitialSalesResultsfromthePilotRemodelProgramareEncouraging
Threeremodelscompletedaveragemorethana10%increaseintraffic, increasedalcoholic
beveragesales,andhigheraveragecheck
4
Strategic Initiatives Progress to Date
ConfidenceinReimaginingProgramSupportedbyFocusGroupResults
Overall,theremodeldesigndoesagoodjobofconveyingremodelingobjectivesofwarmth,
approachability,andinvitingenvironmentwhilebeinguptodate
Basedonfocusgroupfeedback,guestsfeeltheremodelisevenmoreItalianthanbefore,becauseof
thewinecuesandMediterraneancolors
UnaidedLook&FeelRestaurantDescriptions
TuscanFarmhouse
Remodel ItalianKitchen
ExteriorSignage
WeBelieveOliveGarden'sInitiativesResultinReduced
Complexity,CostSavings,andImprovedGuestExperience
1
6
COGS
~$3mm
Waste
~$2mm
Paper
~$1mm
4550Hours
Eliminated
~$28mm
FiscalYear2014SimplificationProjectHasResultedinCostSavingsofOver$30mm
TasteofFood
+4pts
Culinary
Expertise
EnablingMenu
Innovation
Pride,Passion
&Commitment
CULTURE
91Pars
Eliminated
41%Reduction
1
GuestsatisfactionmetricsaretopboximprovementsforFY14vs.FY11FY13average.
AndOliveGardenKeyPerformanceMetricsAreImproving
1
+7
+6
+5
+5
+4
+3
Attentiveness ValueforMoney OverallExperience PaceofMeal OverallComfort Overall
Cleanliness
TheOutlookfortheFutureIsBright,withaNumberofOur
InitiativesUnderwaytoDriveGrowth
1
7
WearecommittedtoelevatingOliveGarden'srelevancethroughtheBrandRenaissanceproject
andbelievethatthecoreelementshighlightedabovewillresultinaresurgenceoftheOlive
Gardenbusinessresults
InadditiontoourCompanywidecostsavingsof$150million,wearepursuinga$50million
OliveGardencostsavingsprogram,withplanstoreinvestthosesavingsinthebusiness
Wehaveahighlyqualifiedleadershipteamandhighlyengagedteamofemployeeswhobelieve
inourOliveGardenplan
FeedbackfromOurInternalManagementFollowingRecentGeneralManagerConference
CoreMenu
Innovation
FocusedOperationsDelivering
aFlawlessGuestExperience
BroadMediaReach
ReimagingProgramShowing
SignsofSuccess
DaveandGenereallyseemtounderstandwhatbeingaGMisallaboutandthechallengesofourjobs. Havingsaidthattheyknowexactly
whatweshouldbecapableandhavenoproblemholdingustothatstandard. Ihaveneverworkedforbetterleaders. Whentheyweredone
speakingtousIfeltIcouldrunamarathoninanhour.
Iamexcitedandmotivatedforthefutureandlookingforwardtofightingtotakebackourguests!
Ifeelverygoodabouttheleadershipanddirectionwearegoing.Imallin!
LongHorn:JourneytoBecomingAmericasFavorite
Steakhouse
1
8
NationalPenetrationOpportunity($inmillions)
PreRARE
Acquisition Today
Ultimate
Potential
No.ofRestaurants 288 464 700
AUV $3.0 $3.1 $3.4
TotalSales $790 $1,380 $2,400
SignificantProgressHasBeenMade
Increasedappealtohigherincomehouseholdsand
addedattractivebusinesstravelandentertainment
relatedconsumers
1
LeveragedanddrovefurtherintegrationofDardens
restaurantsupportplatform
Elevatedbrandmarketingcapabilitiesandcompleted
roadhousetoranchhousebrandpositioning
Investedinincreasedmedia,completedSteakHouse
remodelandlaunchednewdinnerandlunchmenus
FY15StrategicImperatives
Drivesamerestaurantsalesandprofitgrowthby:
ContinuingtodifferentiatetheLongHornguest
experience
Deliveringvaluecreatingnewrestaurants
Strengtheningthebusinessmodel
Note:Numbersonmaprepresentrestaurantsperstate.PotentialAUVsandtotalsalesareshownincurrentdollars.
1
Withhouseholdsintheupperhalfoftheincomecontinuum.
TotalsalesreflectmostrecentannualperiodpriortoRAREacquisition.
1
2
3
60
1
1
12
28
2
9
2
1
2
1
3
7
9
5
6
28
1
6
14
1
5
2
10 11
23
20
15
15 6
5
6
14
3
3
17
61
14
29
6
SAMERESTAURANTSALESEXCEEDEDTHEINDUSTRYBY3.8%INFISCAL2014AND
GUESTCOUNTSEXCEEDEDTHEINDUSTRYFORTHE19THCONSECUTIVEQUARTER
BroadFootprintwithSignificantWhiteSpaceforGrowth
SpecialtyRestaurants:StrongBrandswithUnique
Differentiation
DemographicAppeal WellPositioned
AcquiredinFY13
StrongappealtomillennialandGenerationX
households
ForSRSsuccesswhileaddingatleast100new
restaurants
Acceleratingbeverageandculinaryinnovation
Expanding latenightoccasion
Building organizationalandpeoplecapabilityforgrowth
DevelopedinternallyandintroducedinFY03
Broadlyappealingandparticularlystrongwith
higherincomeandGenerationXhouseholds
ForSRSsuccessasfocusturnstositesthatare
generatingthestrongestperformanceandplanstoadd
atleast100newrestaurants
Increasing brandawarenessinnewmarkets
Evolving seasonal/regionalmenustrategy
Elevating operationsexcellence
AcquiredinFY08
Strongappealtohigherincomehouseholdsand
addsattractivebusinesstravelandentertainment
relatedconsumers
To maintaincurrentSRSgrowthmomentumasit
approachesnationalpenetrationwiththeadditionofat
least30newrestaurants
Developed internally,introduced inFY96,and
successfullyrepositionedoverpastfiveyears
Broadlyappealingandparticularlystrongwith
GenerationXandmulticulturalhouseholds
TomaintaincurrentSRSgrowthmomentumasthe
penetrationoftheeasternthirdoftheUnitedStatesis
completedwiththeadditionofatleast50new
restaurants
AcquiredinFY12
StrongappealtohigherincomeandGenerationX
householdsandaddsattractivebusinesstraveland
entertainmentrelatedconsumers
ForSRSsuccesswhileaddingatleast50new
restaurants
STRONGUNITGROWTHANDFOCUSONINCREASINGBRANDAWARENESSTO
DELIVERCOMPETITIVELYSUPERIORSAMERESTAURANTSALESGROWTH
1
9
TowhatdegreedotheseactivistsknowaboutrunningsomeofthesecompaniesThankyou.ThankyouJC
PenneyactivistsIthinkamorefocusedcompanywithouttheanvilaroundtheneckofRedLobsteriscapable
ofdoingmorethingsthanwethoughtIthinkaprogressioniswhatwewanttosee.Ilove thewayOlive
Gardenisturninghere.
(JimCramer,CNBCsSquawkontheStreet,12Sep2014)
WearemaintainingourBuyratingonDRIaswebelievechangeisunderwayatOliveGarden whetheror
notactivistinvestorStarboardValueisabletosecureaBoardmajorityattheupcomingshareholdermeeting.
TheinitialreadontheOliveGardenremodelprogramappearspromisingandwebelievethereare
considerableoperationalandcostcuttingopportunitiesahead.
(SterneAgee,12Sep2014)
Longhorn(~22%ofrevs)performingwell. Compswere+2.8%,andoperatingprofitsandmarginsboth
expanded.Thisisimpressive givenbeefpressureisdrivingaboveaveragefoodcostinflation.
(Oppenheimer,12Sep2014)
SpecialtyRestaurantGrouppossessessignificantgrowthpotentialgoodreturnsoncapitalandsignificant
expansionpotentialforallofthebrands(whichshouldhelptoincreasebrandawarenessandsalesvolume
overtime)continuestojustifygrowingthissegmentataratefasterthantheotherbrands.
(RobertW.Baird,12Sep2014)
ManyIndustryAnalystsandCommentatorsAreRecognizing
thattheTurnaroundIsGainingMomentum
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0
Note: Permissiontousequotationsinthesematerialswasneithersoughtnorobtained.Boldingaddedforemphasis.
Note:StarboardsPlanreflectsthe14itemsdetailedinStarboardspresentationonslide196.
StarboardsPlan DardenProgresstoDate
RecreateItalianauthenticitywithin
OliveGarden
ThefoundationofOliveGardensBrandRenaissanceisguidedbytodaysgenuineItaliandiningexperience.We
continuetopurchasefromItalianvendorpartnersandcontinuetoleverageourCulinaryInstituteinTuscany
Offeroutstandingfoodbyinstillinga
BrilliantwiththeBasicsmentality
AtthecoreofourRenaissancePlanstrategyistoemphasizeDeliveringFlawlessGuestExperiences
Revitalizethemenu
Ourfocusonmenuinnovationisongoing. InFebruary2014,wecompletedthelargestmenuevolutionintheOlive
Gardenshistoryintroducing over20newitems
Makeserviceatoppriority
Newservicetrainingmoduledesignedtotransitionfromtechnicalexecutiontoemotionalconnection being
launchedduringthecurrentfiscalquarter
AlignincentivesforGeneralManagers GeneralManagerincentiveprogramsarealignedtoprofitablesalesgrowth
Createadedicatedongoingwine
program
Winesalesgrowthisanimportantcomponentofourcurrentbeveragestrategy
Reestablishthevalueproposition
Ourworkisimprovingtheoveralldiningexperienceandincreasingourvalueleadershipinthecategory.Overthe
pastyearourvalueforthemoneyscoreshaveincreasedtenpercentintopboxratings
Manage foodcosts
OliveGardenhasembarkedona$50millioncostsavingsinitiativeandwecontinuetolookforopportunitiesto
furtherreducefoodcosts
Innovateto stayrelevant
Introducedmorethan20newmenuitems,onlineToGoordering,tabletoptablets,andavarietyofotherguest
facingtouchpoints
Employ arevolutionaryapproachto
utilizingthebuilding
WehaveredesignedthebarareainourBrandRenaissanceremodelrestaurants tocreateamoreinviting
environmentthatincreasescapacityanddrivessales
Engagewithcustomersviamarketing
andadvertising
AccordingtoAceMetrix,fourofthetoptenhighestscoringadsofthelast12monthshavebeenOliveGarden
ads.Wecontinuetoworktostrikeanappropriatebalancebetweentelevisionanddigitaladvertisingandhave
developedadedicatedsocialmediateam toengageourguests
Capitalizeontodaystechnology WeareintroducingexcitingnewtechnologysolutionsincludingonlineToGo orderingandtabletoptablets
Appealtothecorrectdemographicsand
theirneedforvalue
OliveGardenshighAUVsdemonstrateourbroadappeal,butwecontinuetoevolvethefoodandservice
experiencetoappealtoa broaderrangeof guestsandoccasions
Improvethelabormodel
Wecontinuetolookatopportunitiestosimplifyprocessesthatwillresultinlaborsavings.Wehavereducedthe
complexityofourprepprocess: 41%reductioninworkinprogressitems(91pars),reducedlabor($28mm),
reducedwaste($2mm),reducedCOGS($3mm)cost
Starboard'sOliveGardenPlanReplicatesActionsAlready
Underway,WhichAreDeliveringResults
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StarboardsMisinformedSuggestionsAreNotBased
onReality
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SelectedStarboardStatements TheReality
Prices andfoodcostsarehigh,but
foodqualityappearstohavealso
deteriorated
Ingredientqualityandrecipeexecutionarealwaysanimportantpriority.Continuedfoodwaste
improvementsoverthepast18months. Wehavemadesignificantinvestmentsinthequalityofour
beef,chickenandseafoodoverthepastyear
Endlesssaladandbreadsticks are
anothercontributortofoodwaste
OliveGardenssaladandbreadstickshavebeenaniconofbrandequity since1982.ItconveysItalian
generosityandoursaladshavethehighestloyaltyratingofanymenuitembasedonthemenu
satisfactionsurveysweconduct
Thetakeoutpackagingisdesigned
tobedishwashersafe,andover
engineeringcreatesextracost
Ourpackagingisprimarilydesignedtomaintainfoodquality.Itmeetscompetitivestandards,isa
moresustainablealternativetoStyrofoam,andcomplieswithlocalwasteregulations.Ithasbeen
specifiedtobemicrowavable butnotdishwashersafe
WebelieveOliveGardensmenuhas
becomefartoocomplex
Werecognizethatstrikingabalancebetweenmenucomplexityandvarietyrequiresconstantfocus.
ItisimportantthatthemenuremainsbroadlyappealingtosupportOliveGardenshighAUVs
Impliedmisalignmentofincentives
forGMs
OurGeneralManagershaveacompetitivebasesalary,incentivepaybasedonsalesandprofit
performanceoftheirrestaurant andaDardenequityawardbasedontheiroverallrelative
performance.Performancepaytargetisapproximately40%oftheirbasesalaryandisuncapped
Despiteits scaleadvantage,
Dardensfoodcostsandwasteare
abnormallyhigh
Eachsegmentofourbusinesshasacompetitivecostofsales.Wehavesophisticatedrestaurantlevel
toolsforforecastingandmanagingwaste.OliveGardenfoodwasteisinlinewithhistoricallevels.
OliveGardensfoodcostiscurrently2628%
GMsareseeminglyincentivizedto
createfalsewaitsandforbidden
fromenhancingtheguest
experience
Sincebeginningourfocusonthisissueoverthepastyear,ourfalsewaitsarenowathistoriclowsand
guestcomplaintsregardingfalsewaitsarethelowesttheyhaveeverbeen
Asignificantopportunityexiststo
optimizetheROIfrommarketing/
advertisingcosts
Weregularlymonitorandanalyzethereturnsonourmarketingspendonapostpromotionalbasis
andatleastannuallyengageexpertsinthefieldtoconductamarketingmixanalysis.Weare
successfullyreducingournonworkingmediaandcontinuetostrikeanappropriatebalancebetween
televisionanddigitaladvertising
OliveGardensoperationsandguest
experiencemustbeimproved
beforespendingcapitalonremodels
Ourguestsurveystellustheplanswebegantoimplementayearagoaresuccessfullyelevatingthe
guestexperience (foodandservice)andwhilewecontinuetoworkonthisimportantpriority,to
furtherelevatetheexperience,weneedtoremodelour300oldestfacilitiesastheserestaurantslagin
samerestaurantsalesby200bps
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WebelieveDardensproposedslaterepresentsaprudentapproachinthatitwouldyieldagroupthatcouldbringfresh
perspectivetoDRIwhileallowingforsomecontinuitythatwouldnotbeassociatedwithStarboardsplantoreplacetheentire
board.WeseeriskthatthereplacementoftheentireBoard(asproposedbyStarboard)andbroadermanagementchanges
couldcausedistraction/disruption thatcouldimpedeprogressonimprovingcoreoperatingfundamentals.
(Baird,12Sep2014)
Inourview,thedisruptionislikelytointensifyaftertheOctober10thshareholdermeetingandvotenomatterwhichside
prevails.Inouropinion,thereishighriskofshorttermdisruptionthatcouldbedamagingtothebusiness.
(BankofAmericaMerrillLynch,12Sep2014)
With1QF15complete,attentionisnowsquarelyontheupcoming14AnnualMeetingon10/10.Thefocuswillbeboard
representation,withactivistStarboard(8.8%holder)pushingforfullboardturnover(12members).Westrugglewithsuch
drasticchangeinthemidstofamajorportfoliotransformation,aswearesomewhatmoreconservativeinnature,rather
believingahybridofnewandoldboardmembersthebestapproach.Thiswouldallowforsignificantfreshperspective,while
maintaininganelementofcontinuity.
(Barclays,12Sep2014)
Inourview, continuedpressurefromStarboardandotheractivistinvestorscoulddisruptmanagementsstrategicaction
plans andaddsanotherlayerofuncertaintytofuturefreecashflowprojections.
(MorningstarEquityResearch,08Jul2014)
ManyIndustryAnalystsalsoRecognizetheRisksof
ImplementingStarboardsPlan
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Note: Permissiontousequotationsinthesematerialswasneithersoughtnorobtained.Boldingaddedforemphasis.