The Company’s adjusted debt to adjusted total capital ratio (which includes 6.25 times the total annual restaurant minimum rent and 3 times the total annual restaurant equipment minimum rent as a component of adjusted debt and adjusted total capital) was 46 percent and 44 percent at May 26, 2002, and May 27, 2001, respectively. The Company’s fixed-charge coverage ratio, which measures the number of times each year that the Company earns enough to cover its fixed charges, amounted to 6.8 times and 6.5 times at May 26, 2002, and May 27, 2001, respectively. Based on these ratios, the Company believes its financial condition remains strong. The composition of the Company’s capital structure is shown in the following table. The Company’s Board of Directors has approved a stock repurchase program that authorizes the Company to repurchase up to 96.9 million shares of the Company’s common stock. Net cash flows used by financing activities included the Company’s repurchase of 9.0 million shares of its common stock for $209 million in fiscal 2002 compared to 12.7 million shares for $177 million in fiscal 2001 and 17.2 million shares for $202 million in fiscal 2000. As of May 26, 2002, a total of 86.3 million shares have been purchased under the program. The stock repurchase program is used by the Company to offset the dilutive effect of stock option exercises and to increase shareholder value. The repurchased common stock is reflected as a reduction of stockholders’ equity. Net cash flows used by investing activities included capital expenditures incurred principally for building new restaurants, replacing equipment, and remodeling existing restaurants. Capital expenditures were $318 million in fiscal 2002, compared to $355 million in fiscal 2001, and $269 million in fiscal 2000. The reduced expenditures in fiscal 2002 resulted primarily from a reduction in renewal and replacement spending at Red Lobster restaurants. The increased expenditures in fiscal 2001 resulted primarily from new restaurant growth. The Company estimates that its fiscal 2003 capital expenditures will approximate $400 million. Net cash flows used by investing activities for fiscal 2002 also included the purchase of $32 million of trust-owned life insurance policies that cover certain Company officers and other key employees. The policies were purchased to offset a portion of the Company’s obligations under its non-qualified deferred compensation plan. The Company is not aware of any trends or events that would materially affect its capital requirements or liquidity. The Company believes that its internal cash generating capabilities and borrowings available under its shelf registration for unsecured debt securities and short-term commercial paper program should be sufficient to finance its capital expenditures, stock repurchase program, and other operating activities through fiscal 2003. The Company’s current assets at May 26, 2002, totaled $450 million, a 37.0 percent increase over current assets of $328 million at May 27, 2001. The increase resulted primarily from increases in cash and cash equivalents of $91 million and short-term investments of $10 million that resulted principally from the short-term investment of proceeds received from the March 2002 medium-term debt issuance. Inventories also increased by $24 million primarily as a result of opportunistic seafood purchases and purchases in support of upcoming promotions. Other assets of $159 million at May 26, 2002, increased from $109 million at May 27, 2001, primarily as a result of the purchase of $32 million of trust-owned life insurance policies during fiscal 2002 as well as an increase in capitalized costs associated with software improvements. Current liabilities increased by $47 million compared to fiscal 2001, primarily as a result of increases in accrued income taxes, gift card and gift certificate payables, and employee benefit related accruals. continued>