DARDEN RESTAURANTS 2004 Annual Report

Leadership Defined

	These values serve as a constant reminder of who we are, and they guide every decision we make and everything we do. We believe values-based leadership and a values-based organization are more important than ever as predicates for success in today's business environment. Our foundation also includes a strategic framework that has been in place for nearly six years now and has helped us build a solid track record of success. This framework consists of four strategic imperatives – leadership excellence at all levels, brand building excellence, service and hospitality excellence and culinary and beverage excellence. There are also two strategic enablers we believe can help us accelerate progress in each of the strategic imperatives. These enablers are diversity excellence that embraces and builds upon our differences, and process and technology excellence that maximizes organizational effectiveness and drives both discipline and nimbleness. These important elements – our strategic imperatives and enablers – remain unchanged and rock solid. New to our strategic framework is the explicit statement of two points that have been implicit in our approach to the business for many years now, and that we believe separate us from much of our competition. We are committed to: (1) being a multi-brand restaurant company bound together by common operating practices and a unifying culture, which serve to make us stronger than the sum of our parts; and (2) listening to our guests and employees for the insights we need to create powerful, broadly appealing brands and develop highly successful people. We are confident we will create enduring guest and employee loyalty and deliver strong financial performance by combining our strong foundation with consistent brilliance with the basics in everything we pursue, especially our strategic imperatives. We are proud to highlight one of those strategic imperatives in this year's annual report – leadership excellence at all levels of Darden – and introduce you to some of the finest leaders in casual dining. FISCAL 2005 PRIORITIES To achieve our financial objectives and continue building our momentum toward becoming the best in casual dining, we will focus our attention and resources on four critical priorities in fiscal 2005: Increasing leadership effectiveness Driving more growth across all of our brands Improving our brand-building efforts Fully utilizing our resources These priorities have been established with the purpose of putting Darden squarely on the path toward growth. Progress on these priorities will increase operating consistency, reinforce leadership effectiveness and stability, and ignite stronger growth. STRONG LEADERSHIP A critical element of effective leadership is having a thoughtful succession plan that provides for a smooth and effective transition of leadership to talented, dynamic and seasoned executives. I am pleased that the Board of Directors has appointed Smokey Bones President Clarence Otis as my successor as Chief Executive Officer, and Olive Garden President Drew Madsen as Darden President and Chief Operating Officer effective December 2004. I will continue to serve as Chairman until my retirement in December 2005. Our succession plan is the result of years of planning by our Board of Directors, made possible by Darden's deep bench strength. Both Clarence and Drew have been with Darden for many years and have a wide breadth of business acumen and restaurant industry experience. They are talented executives with complementary strengths, mutual respect, and a demonstrated ability to work as an effective team. Their passion for our business will serve us well in the years ahead. WE ARE READY TO GROW I am convinced that Darden is well positioned for growth. We start with more than 141,000 dedicated employees who are committed to nourishing and delighting everyone we serve. And we add to that an extraordinarily broad guest base that reflects our balanced mix of two large, dominant companies that each generate over $2 billion in annual sales, and two smaller, emerging growth companies that we believe are each capable of ultimately achieving annual sales of $500 million or more. Our loyal employees and guests, along with our leadership and financial resources, provide us with an excellent platform to grow and to achieve our ultimate objective, which is to be the best in casual dining, now and for generations. Joe R. Lee Chairman and Chief Executive Officer
We are confident we will create enduring guest and employee loyalty and deliver strong financial performance by combining our strong foundation with consistent brilliance with the basics in everything we pursue, especially our strategic imperatives.