Our Core Purpose: “To nourish and delight everyone we serve.” Smokey Bones BBQ Sports Bar more than doubled in size, opening 10 new restaurants to end the year with 19 in operation. Smokey Bones’ combination of terrific smoked and barbecued foods in a relaxed sports bar atmosphere remains broadly appealing, and expansion will ramp up in 2003. With our strong cash flow and balance sheet, share repurchase remained meaningful. We purchased 9 million shares of our common stock in fiscal 2002, even as we invested in growth. With yet another year of excellent operating and financial performance, we remain excited about what is possible here at Darden. We believe we are creating a great company, one that will be widely recognized as the best in casual dining. All the elements are in place. These include: A vibrant industry. Darden’s strong restaurant companies. An effective strategic framework. Financial strength and stability. Enduring values. And, most importantly, terrific people. A VIBRANT INDUSTRY Our industry, casual dining, is large and growing. With compound annual growth of nearly 7% since 1990, total sales reached $56 billion in calendar 2001. And we believe casual dining sales will continue to grow between 6% and 8% a year over the next 10 years because of strong growth in the number of people entering their 50s and 60s, the peak years of casual dining usage, as well as continued increases in the number of working women, per capita incomes and payroll employment levels. All of these developments support lifestyle changes we’ve witnessed for some time now, which place a premium on the time-saving and social connection benefits of dining out. The power of these factors was clearly demonstrated in 2002 when, despite the recession and other factors that put downward pressure on consumer confidence, casual dining sales grew 5.5% for the calendar year. DARDEN‘S STRONG RESTAURANT COMPANIES As we continue to capitalize on the casual dining growth opportunity, Darden has two trusted restaurant companies with well-established consumer appeal, two exciting emerging restaurant companies and a proven ability to create winning new concepts. Our two established companies are market leaders in important segments of the casual dining industry. Red Lobster has a 49% share of casual dining seafood, a segment that accounts for 7.8% of total casual dining industry sales. The casual dining Italian segment is 10.3% of the total casual dining industry, and Olive Garden’s sales represent 30% of this significant category. Reinforcing our dominance, we know from internally and externally generated consumer research that both Red Lobster and Olive Garden are performing better and better – after nearly 35 years in operation at Red Lobster and nearly 20 years at Olive Garden. We also continue to expand our emerging companies, and their ultimate business potential is meaningful. We believe Bahama Breeze can reach at least $500 million in total sales in the first phase of our national expansion, and Smokey Bones is capable of becoming at least a $1.5 billion business. These two businesses also reflect our proven ability to create winning new concepts that are responsive to lasting consumer demand. The New Business team that developed Olive Garden, Bahama Breeze and Smokey Bones continues to work on new opportunities with powerful market potential. Darden’s success at effectively evolving our current businesses and creating winning new concepts is the result of a number of strengths. Two are especially important – our advanced brand management capabilities and our highly developed operating infrastructure. As brand managers, we understand the importance of constant dialogue with our guests and with casual dining consumers generally, gaining a sense of how they view the competitive landscape, their likes and dislikes and what we can do that’s appealingly different. We use these insights to develop stronger menu offerings and service models and to craft advertising and promotional strategies that drive guest traffic and build loyalty. We can do this because we have the operating infrastructure to deliver on the promises made. Our information technology and other systems enable us to recruit and train people who can meet high standards, to purchase and deliver high-quality ingredients to our restaurants and to maintain good financial controls in every restaurant, all on the enormous scale at which we operate – delivering millions of meals a week across North America. AN EFFECTIVE STRATEGIC FRAMEWORK With all of Darden’s strengths, everyone in the organization recognizes that to be a great company – to be the best – we must operate our existing businesses at levels of excellence well beyond where we are today, even as we continue to expand the Company. In short, we must continue to strive for brilliance with the basics in everything we do. We believe we have a strategic framework that provides us with excellent guidance. continued>