Table of Contents Strategic Framework 2003 Financial Highlights Operating Company Overviews Great Expectations   Ambience   Service   Attentiveness   Knowledge   Friendliness   Cleanliness Letter To Shareholders Operating Highlights   Red Lobster   Olive Garden   Bahama Breeze   Smokey Bones BBQ New Business Opportunities Financial Review 2003 Corporate Responsibility Board of Directors Corporate Officers Shareholders Information
Smokey Bones BBQ The combination of a barbecue-based menu and a lively, comfortable mountain lodge setting continues to be a winning concept as Darden rolls out our newest concept, Smokey Bones BBQ. During fiscal 2003, Smokey Bones doubled its restaurant base from 19 to 39 locations in the Northeast, Midwest and Southeast. In only its fourth year of operations, this business generated $93 million in sales and posted strong restaurant-level performance.     Smokey Bones' financial results in fiscal 2003 reflect high levels of customer satisfaction as indicated by a number of measurement tools introduced this year. The Fan Survey is the restaurants' guest satisfaction "shopper" program, and the company has set a minimum score of 90 percent for the survey. In fiscal 2003, restaurants open at least a year averaged 93 percent each quarter, with all restaurants meeting or exceeding the 90 percent minimum every quarter. Additionally, Smokey Bones introduced the Guest Satisfaction Survey already used widely by other Darden concepts. Smokey Bones' initial results ranked very favorably compared to Darden's established Red Lobster and Olive Garden brands. Quality assurance audit scores reached a high of 94 percent, with many new guests commenting on the cleanliness of Smokey Bones locations compared to other restaurants in the barbecue category.     This positive service and hospitality feedback is especially significant given the challenges of aggressively opening new restaurants. Training, in particular, is a top priority. Smokey Bones has introduced interactive electronic training modules, online training and print-on-demand features for training materials. Our base of certified trainers and managers also has increased to support restaurant openings. Restaurants in four different geographic regions have been certified to train new managers. Smokey Bones also is working diligently to reduce teammate and management turnover — a common challenge for any new restaurant.     Looking forward, Smokey Bones is well positioned to meet our goal of opening 25 to 30 restaurants in fiscal 2004. We remain excited about Smokey Bones' potential growth into an operating company with at least $500 million in annual sales. Our enthusiasm is based on the differentiated concept — barbecue in a lively mountain lodge atmosphere, the market fragmentation of the barbecue category and the broad regional and demographic appeal of barbecue itself. Given the favorable financial and operating fundamentals of Smokey Bones restaurants, our level of enthusiasm is only growing.