Earnings Call Fiscal 2016 Q4...Q1 Q2 1Q3 Q42 Fiscal Fourth Quarter Highlights 1 FY16 Q2 includes the...

Earnings CallFiscal 2016 Q4June 30, 2016

1

Disclaimer

The following slides are part of a presentation by Darden Restaurants, Inc. (the "Company") and are intended

to be viewed as part of that presentation (the "Presentation"). No representation is made that the Presentation

is complete.

Forward-looking statements in this communication regarding our expected earnings performance and all other statements that are not

historical facts, including without limitation statements concerning our future economic performance and expenses, 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 first made, and we undertake no obligation to update such statements to reflect events or circumstances arising

after such date. 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. These risks

and uncertainties include 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, labor and insurance costs, technology failures including a failure to maintain a secure

cyber network, failure to execute a business continuity plan following a disaster, health concerns including virus outbreaks, intense

competition, failure to drive profitable sales growth, our plans to expand our smaller brands Bahama Breeze, Seasons 52 and Eddie V's, a

lack of availability of suitable locations for new restaurants, higher-than-anticipated costs to open, close, relocate or remodel restaurants, a

failure to execute innovative marketing tactics, 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 and services, 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

interest rates, disruptions in the financial markets, risks of doing business with franchisees and vendors in foreign markets, failure to protect

our intellectual property, impairment in the carrying value of our goodwill or other intangible assets, failure of our internal controls over

financial reporting, 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 NOTICE

2

Non-GAAP Information

The information in this communication includes financial information determined by

methods other than in accordance with accounting principles generally accepted in the

United States of America (“GAAP”), such as adjusted net earnings per diluted share from

continuing operations. The Company’s management uses these non-GAAP measures in its

analysis of the Company’s performance. The Company believes that the presentation of

certain non-GAAP measures provides useful supplemental information that is essential to a

proper understanding of the operating results of the Company’s businesses. These non-

GAAP disclosures should not be viewed as a substitute for operating results determined in

accordance with GAAP, nor are they necessarily comparable to non-GAAP performance

measures that may be presented by other companies.

Earnings CallFiscal 2016 Q4June 30, 2016

4

$0.32

$0.28

$0.99 $1.01

$0.68$0.54

$1.21$1.10

FY15 FY16 FY15 FY16 FY15 FY16 FY15 FY16

Darden Adjusted EPS3

Q1 Q21 Q31 Q42

$1.60 $1.56$1.73 $1.75$1.69

$1.61

$1.85 $1.79

FY15 FY16 FY15 FY16 FY15 FY16 FY15 FY16

Darden Sales ($bn)

Q1 Q21 Q31 Q42

Fiscal Fourth Quarter Highlights

1 FY16 Q2 includes the negative impact of the Thanksgiving holiday shift, which occurred in Q3 of FY15.2 FY15 Q4 adjusted to exclude $0.13bn in sales and $0.07 in adjusted diluted earnings per share due to the 53rd week. 3 EPS values adjusted for special items. A reconciliation of reported to adjusted numbers can be found in the additional information section of this

presentation.

3.4%

2.9%

4.2%

2.6%

Q1 FY16 Q2 FY16 Q3 FY16 Q4 FY16

Same-Restaurant Sales Growth - Comparable Calendar Basis

5

Positive Sales and Earnings Momentum

2.4%Calendar

Same-Restaurant Sales

+460 bpsSame-Restaurant Sales

Industry Outperformance1

0.4%Calendar Same-

Restaurant Guest Count

+40%OG To Go

2-Year Growth

Same-Restaurant Sales1

OG To Go Sales Growth vs. Year Ago

Q4 Highlights

2.5%2.8%

4.9%

2.4%

FY16 Q1 FY16 Q2 FY16 Q3 FY16 Q4

1 FY16 Same-Restaurant Sales on a comparable calendar basis. Industry excluding Darden brands.

14% 15%22% 23%

18% 17%

20% 19%

Q1 Q2 Q3 Q4

FY15 FY16

6

Continued Segment Profit Margin Growth

2.2%Calendar


4.8%

3.6%

2.7%2.2%

FY16 Q1 FY16 Q2 FY16 Q3 FY16 Q4

Same-Restaurant Sales1Q4 Highlights


Industry Outperformance1

-2.0%Calendar Same-

Restaurant Guest Count

+250 bpsAdjusted Segment Profit

Margin % vs. Last Year

(Basis Point Diff)

1 FY16 Same-Restaurant Sales on a comparable calendar basis. Industry excluding Darden brands.2 Segment profit margin calculated as (sales less costs of food & beverage, restaurant labor, restaurant expenses and marketing expenses) / sales.3 Segment profit margin adjusted to exclude incremental rent impacts of the fiscal 2016 real estate transactions.

14.9% 14.9%

12.4%

15.0%

16.3%

20.0%

17.8%

19.0%0.4%

1.3%1.3%

FY15Q1

FY16Q1

FY15Q2

FY16Q2

FY15Q3

FY16Q3

FY15Q4

FY16Q4

15.4%3

21.3%320.3%3

Segment Profit Margin Percent2

Incremental rent impact on Segment Profit Margin from real estate transactions in FY16

7

Same-Restaurant Sales1

Same-Restaurant Sales Growth at all Brands

1 FY16 Same-Restaurant Sales on a comparable calendar basis

3.7%6.4%

0.9%

4.3% 3.7%

FY16 Q1 FY16 Q2 FY16 Q3 FY16 Q4

5.0%3.8% 3.8%

5.3% 5.0%

FY16 Q1 FY16 Q2 FY16 Q3 FY16 Q4

2.7%3.9% 3.2%

1.3%2.7%

FY16 Q1 FY16 Q2 FY16 Q3 FY16 Q4

4.7%

3.6%

2.4%3.1%

1.4%

FY16 Q1 FY16 Q2 FY16 Q3 FY16 Q4

1.4%

2.5%

5.8% 6.3%4.7%

FY16 Q1 FY16 Q2 FY16 Q3 FY16 Q4

Financial Update

9

Fiscal Fourth Quarter Highlights

1.7%Fiscal Calendar


$1.10Diluted EPS from Continuing

Operations

13%Operating Performance

Growth vs. Last Year1

8.9%Adjusted Diluted EPS Growth

vs Last Year1

~700 thousandShares Repurchased

1 EPS values adjusted for special items. A reconciliation of reported to adjusted numbers can be found in the additional information section of this presentation.

$63 millionDividends Paid

10

Adjusted EBIT Margins increased 60 basis points

As

Reported

As Adjusted

Q4 2016 Q4 2016($ millions)

Q4 2016 vs. Q4 2015 (bps)Favorable/(Unfavorable)

Food & Beverage 28.9% $517.0 28.9% 130

Restaurant Labor 31.1% $556.9 31.1% Flat

Restaurant Expenses 17.2% $308.4 17.2% (150)

Marketing 3.5% $63.4 3.5% (10)

Restaurant-Level EBITDA 19.2% $344.5 19.2% (30)

G&A 5.1% $89.3 5.0% 40

Depreciation & Amortization 3.7% $66.8 3.7% 60

Impairments 0.1% $1.3 0.1% (10)

EBIT 10.3% $187.1 10.5% 60

Interest Expense 0.5% $9.7 0.5% 80

EBT 9.8% $177.4 9.9% 130

Income Tax ExpenseNote: Effective Tax Rate

2.0%20.6%

$36.8 2.0%20.6%

(80)

EAT 7.8% $140.6 7.9% 50

Note: Continuing operations, values may not tie due to rounding. A reconciliation of reported to adjusted numbers can be found in the additional information section of this presentation.

11

1 Excludes the impact of the 53rd week sales in FY15 of $69M, $28M, $8M, $19M for Olive Garden, LongHorn, Fine Dining and Other, respectively. 2 Segment profit margin calculated as (sales less costs of food & beverage, restaurant labor, restaurant expenses and marketing expenses) / sales.3 Segment profit margin adjusted to exclude incremental rent impacts of the fiscal 2016 real estate transactions.

All of our segments had positive sales growth on a 13 week basis… ($ millions)1

…with Segment Profit Margin growth in all segments, excluding incremental rent from real estate transactions2

20.3%

19.3%

2.3%

FY15 Q4 FY16 Q4

17.8%

19.0%

1.3%

FY15 Q4 FY16 Q4

20.0%

20.1%

0.1%

FY15 Q4 FY16 Q4

18.9%

18.9%

0.6%

FY15 Q4 FY16 Q4

Segment Performance

$968 $982

FY15 Q4 FY16 Q4

$410 $413

FY15 Q4 FY16 Q4

$129 $132

FY15 Q4 FY16 Q4

$247 $264

FY15 Q4 FY16 Q4

Fine Dining Other

Fine Dining Other

21.6%3 20.3%3 20.2%3

19.5%3


12

Dividends per Share (DPS)

DRI Annualized DPS 03/31/2016 ($0.50 per quarter) $2.00

DRI Annualized Dividend Increase 06/30/2016 $0.24

New DRI Annualized DPS 06/30/2016 ($0.56 per quarter) $2.24

Total Combined (DRI & FCPT) DPS

DRI Annualized Pre-Spin DPS 09/17/2015 ($0.55 per quarter) $2.20

DRI Annualized DPS 06/30/2016 ($0.56 per quarter) $2.24

FCPT Annualized DPS 06/14/2016 ($0.242) Converted to DRI Shares* $0.46

Total Annualized Combined (DRI & FCPT) DPS ($0.675 quarter) $2.70

Increasing Quarterly Dividend by 12%

* Dividend declared 06/14/2016 of $0.242 * 59,881,000 shares outstanding / 42,443,994 initial shares issued, annualized and adjusted for 1:3 spin ratio.

12%

Increase$2.24 vs. $2.00

23%

Increase$2.70 vs. $2.20

Higher Increase When Including Four Corners Property Trust (FCPT) Dividend

13

Fiscal 2016 Annual Highlights

3.3%Same-Restaurant Sales

$3.53Adjusted Diluted EPS from

Continuing Operations2

38%Adjusted Diluted EPS Growth

vs Last Year2

1 FY15 Total sales adjusted to exclude $125 million in sales due to the 53rd week. 2 EPS values adjusted for special items. A reconciliation of reported to adjusted numbers can be found in the additional information section of this presentation.

4.4%Total Sales Growth

on a 52-Week Basis1

14

Fiscal 2016 Annual Highlights (continued)


vs Industry Benchmark

FCPT Spin-off of Real Estate

3Upgrades from all 3 credit rating

agencies to Investment Grade

$95 millionRealized cost savings in Fiscal 2016

$453 millionReturned to shareholders

Dividends Paid and Share

Repurchase

$1 billionDebt Retired

15

Fiscal 2017 Annual Outlook

Note: Dollars in millions except per share amounts

Total Sales Growth

1.7% to 2.7%

Same Restaurant Sales

1.0% to 2.0%

New Restaurants

24 to 28

Capital Spending

$310 to $350

Cost Savings

$30

Total Inflation

1.5% to 2.0%

Effective Tax Rate

26% to 27%

Sales Margin

Earnings per Diluted Share

$3.80 to $3.90(~128.5 million Weighted Average Diluted Shares Outstanding)

16

Outlook at or Above Long Term Framework on Most Measures

Note: Growth in the individual components will vary year-to-year.

Annual Target,

(Over Time)

Fiscal 2017

Outlook

Same-Restaurant Sales 1% - 3%

New Restaurant Growth 2% - 3%

EBIT Margin Expansion 10 - 40bps

Business Performance (Adj. EAT Growth) 7% - 10%

Dividend Payout Ratio 50% - 60%

Share Repurchase ($MM) $100 - $200

Return of Cash 3% - 5%

Total Shareholder Return ( EPS Growth + Dividend Yield)

10% - 15%

P

-

P

P

P

P

P

17

Back-To-Basics Operating Philosophy

Premier Full-Service Restaurant Company

7Iconic Brands

1Driving Philosophy

1Mission

Be financially successful through great people

consistently delivering outstanding food, drinks and

service in an inviting atmosphere making every guest loyal.

Culinary

Innovation

& Execution

Attentive

Service

Engaging

Atmosphere

Integrated

Marketing

4Competitive

Advantages

Significant

Scale

Extensive

Data & Insights

Rigorous

Strategic Planning

Results-

Oriented Culture

18

Thank you to our 150,000 Team Members!

Additional Information

20

Annual Margins

As

Reported

As Adjusted

2016 2016 vs. 2015 (bps)Favorable/(Unfavorable)

Food & Beverage 29.4% 29.4% 140

Restaurant Labor 31.6% 31.6% Flat

Restaurant Expenses 16.8% 16.8% (20)

Marketing 3.4% 3.4% 20

Restaurant-Level EBITDA 18.8% 18.8% 140

G&A 5.5% 4.8% 40

Depreciation & Amortization 4.2% 4.2% 50

Impairments 0.1% 0.1% (10)

EBIT 9.0% 9.7% 220

Interest Expense 2.5% 1.0% 50

EBT 6.5% 8.7% 270

Income Tax ExpenseNote: Effective Tax Rate

1.3%20.0%

2.1%24.5%

(110)

EAT 5.2% 6.6% 150

Note: Continuing operations, values may not tie due to rounding. A reconciliation of reported to adjusted numbers can be found in the additional information section of this presentation.

21

All of our segments had positive sales growth for the year on a 52 week basis… ($ millions)1

…and Segment Profit Margin growth in all segments2

18.5%

19.8%

1.4%

FY15 FY16

15.5%

17.3%

0.9%

FY15 FY16

19.0%

19.5%

FY15 FY16

15.5%

16.9%

0.3%

FY15 FY16

Annual Segment Performance

$3,720

$3,839

FY15 (52 wk) FY16

$1,516

$1,588

FY15 (52 wk) FY16

$492 $514

FY15 (52 Wk) FY16 Q4

$911

$993

FY15 (52 Wk) FY16

Fine Dining Other

Fine Dining Other

1 Excludes the impact of the 53rd week sales in FY15 of $69M, $28M, $8M, $19M for Olive Garden, LongHorn, Fine Dining and Other, respectively. 2 Segment profit margin calculated as (sales less costs of food & beverage, restaurant labor, restaurant expenses and marketing expenses) / sales.3 Segment profit margin adjusted to exclude incremental rent impacts of the fiscal 2016 real estate transactions.


21.2%3

18.2%319.5%3

17.2%30.0%

22

Fiscal and Comparable Calendar Dates

Same-Restaurant Sales Calculation Dates

Fiscal Calendar Basis Comparable Calendar Basis

Q1

June 1, 2015 – August 30, 2015

vs.

May 26, 2014 – August 24, 2014

June 1, 2015 – August 30, 2015

vs.

June 2, 2014 – August 31, 2014

Q2

August 31, 2015 - November 29, 2015

vs.



vs.

September 1, 2014 - November 30, 2014

Q3

November 30, 2015 – February 28, 2016

vs.



vs.

December 1, 2014 – March 1,2015

Q4

February 29, 2016 - May 29, 2016

vs.

February 23, 2015 - May 24, 2015

February 29, 2016 - May 29, 2016

vs.

March 2, 2015 - May 31, 2015

23

Fiscal 2017 Annual Outlook

Note: Dollars in millions except per share amounts

Total Sales Growth

1.7% to 2.7%

Same Restaurant Sales

1.0% to 2.0%

New Restaurants

24 to 28

Capital Spending

$310 to $350

Cost Savings

$30

Total Inflation

1.5% to 2.0%

Effective Tax Rate

26% to 27%

Sales Margin

Earnings per Diluted Share

$3.80 to $3.90(~128.5 million Weighted Average Diluted Shares Outstanding)

Olive Garden 6 to 8

LongHorn 8 to 10

The Capital Grille 1 to 2

Yard House 2 to 4

Seasons 52 0 to 1

Bahama Breeze 0 to 1

Eddie V’s 2 to 3

24

Product Breakdown and Contract Coverage For the 1st Half of Fiscal 2017

¹ Includes cheese, cream, butter, and shortening

² Includes breadsticks and pasta

Commodities Outlook – 1st Half Fiscal 2017

Jun-Nov

FY2017

Spend by

Category Coverage Outlook

Beef 20% 45% Mid Single Digit Deflation

Produce 12% 60% Low Single Digit Inflation

Dairy / Oil1 12% 60% Low Single Digit Inflation

Seafood 10% 80% Low Single Digit Inflation

Wheat2 7% 85% Low Single Digit Inflation

Chicken 7% 95% Low Single Digit Deflation

Non-Perishable / Other 32% 55% Flat

Weighted Average

Coverage100% 60%

25

Reported to Adjusted Earnings Reconciliations

Note: The sum of the quarterly Diluted EPS amounts do not total the annual EPS amounts due to the impact of the timing of share repurchases on the weighted average share count. Values may not tie due to rounding.

Fiscal 2015

Q1 Q2 Q3 Q4* Annual*

Reported Diluted Net EPS from Continuing Operations ($0.14) ($0.24) $1.01 $0.92 $1.51

Debt Retirement Costs 0.37 0.05 0.00 0.00 0.42

Strategic Action Plan and Other Costs 0.09 0.47 (0.02) 0.16 0.70

Adjusted Diluted Net EPS from Continuing Operations $0.32 $0.28 $0.99 $1.08 $2.63

Remove 53rd Week Impact (0.07) (0.07)

Adjusted Diluted Net EPS from Continuing Operations (52-Week Basis) $0.32 $0.28 $0.99 $1.01 $2.56

* Reflects an extra week of operations due to a 53 week year

Fiscal 2016

Q1 Q2 Q3 Q4 Annual

Reported Diluted Net EPS from Continuing Operations $0.63 $0.23 $0.84 $1.10 $2.78

Real Estate Plan Implementation 0.05 0.16 0.03 - 0.26

Debt Retirement Costs - 0.17 0.34 - 0.51

Strategic Action Plan and Other Costs - (0.02) - - (0.02)

Adjusted Diluted Net EPS from Continuing Operations $0.68 $0.54 $1.21 $1.10 $3.53

26

Reported to Adjusted EBIT Margin and Earnings Reconciliations

Change

(in millions) 5/29/2016 5/31/2015 (bps)

Sales - as reported 1,790.2$ 1,878.3$

Earnings from continuing operations - as reported 140.4$ 118.1$

Interest, net - as reported 9.7 24.0

Income taxes - as reported 35.0 8.4

EBIT from continuing operations 185.1$ 150.5$

EBIT Margin from continuing operations 10.3% 8.0% 230

EBIT Impacts 2.0$ (1) 35.1$ (1)

Adjusted EBIT from continuing operations 187.1$ 185.6$ Adjusted EBIT Margin from continuing operations 10.5% 9.9% 60


EBIT Impacts 2.0 (1) 35.1 (1)

Income tax impacts of adjustments (1.8) (13.5)

Adjusted earnings from continuing operations 140.6$ 139.7$

Adjusted earnings margin from continuing operations 7.9% 7.4% 50

(1) Represents costs associated with strategic action plan

Quarter Ended

27

Reported to Adjusted EBIT Margin and Earnings Reconciliations

Change

(in millions) 5/29/2016 5/31/2015 (bps)

Sales - as reported 6,933.5$ 6,764.0$


Interest, net - as reported 172.5 192.3

Income taxes - as reported 90.0 (21.1)

EBIT from continuing operations 622.2$ 367.6$

EBIT Margin from continuing operations 9.0% 5.4% 360

EBIT Impacts 48.0$ (1) 142.1$ (2)

Adjusted EBIT from continuing operations 670.2$ 509.7$ Adjusted EBIT Margin from continuing operations 9.7% 7.5% 220


EBIT Impacts 48.0 (1) 142.1 (2)

Interest expense impacts 106.8 (3) 90.5 (3)

Income tax impacts of adjustments (58.7) (4) (86.1)

Adjusted earnings from continuing operations 455.8$ 342.9$

Adjusted earnings margin from continuing operations 6.6% 5.1% 150

(1) Represents costs associated with real estate implementation and strategic action plan

(2) Represents costs associated with strategic action plan

(3) Represents costs associated with debt retirement

(4) Includes the tax benefit related to exiting from our lobster aquaculture project

Year Ended

28

Fiscal 2016 Fourth Quarter Growth Drivers

Update

1 Represents non-GAAP measure, refer to page 25 for a reconciliation of GAAP to non-GAAP numbers.

Per Share % Growth

FY15 Q4 Adjusted Diluted Net EPS from Continuing Operations (13-Week Basis)1 $1.01

Fourth Quarter Growth from Fiscal 2015 to Fiscal 2016

Operating Performance $0.13 13%

Net Incremental Ongoing Real Estate Expenses (0.02) (2%)

Tax Timing (0.02) (2%)

FY16 Q4 Total Growth From Fiscal 2015 (52 Week Year) to Fiscal 2016 $0.09 9%

FY16 Q4 Diluted Net EPS from Continuing Operations $1.10 9%

Earnings Call Fiscal 2016 Q4...Q1 Q2 1Q3 Q42 Fiscal Fourth Quarter Highlights 1 FY16 Q2 includes the...

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