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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------------
FORM 11-K
-------------------------------------
ANNUAL REPORT
PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934. [NO FEE REQUIRED].
For the fiscal year ended April 30, 2004.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934. [NO FEE REQUIRED].
For the transition period from ................ to ..................
Commission File Number 1-13666
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Darden Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
DARDEN RESTAURANTS, INC.
5900 Lake Ellenor Drive
Orlando, Florida 32809
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REQUIRED INFORMATION
The following financial statements for the plan are being furnished herewith:
Report of Independent Registered Public Accounting Firm.
Audited Statement of Net Assets Available for Benefits with Fund Information as
of April 30, 2004 and 2003, prepared in accordance with the financial reporting
requirements of ERISA.
Audited Statement of Changes in Net Assets Available for Benefits with Fund
Information for the years ended April 30, 2004, and 2003, prepared in accordance
with the financial reporting requirements of ERISA.
Notes to Financial Statements.
Schedule 1 - Schedule of Assets Held at End of Year April 30, 2004.
Schedule 2 - Schedule of Reportable Transactions, Year Ended April 30, 2004.
DARDEN SAVINGS PLAN
Financial Statements and Supplemental Schedules
April 30, 2004 and 2003
(With Independent Auditors' Report Thereon)
DARDEN SAVINGS PLAN
Table of Contents
Page
Report of Independent Registered Public Accounting Firm 1
Statement of Net Assets Available for Benefits with
Fund Information 2
Statement of Changes in Net Assets Available for Benefits
with Fund Information 6
Notes to Financial Statements 10
Schedule H, Line 4i - Schedule of Assets (Held at End of Year) 16
Schedule H, Line 4j - Schedule of Reportable Transactions 17
Report of Independent Registered Public Accounting Firm
Benefit Plan Financial Committee
Darden Restaurants, Inc.
We have audited the accompanying statements of net assets available for benefits
with fund information of the Darden Savings Plan (the Plan) as of April 30, 2004
and 2003, and the related statements of changes in net assets available for
benefits with fund information for the years ended April 30, 2004 and 2003.
These financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
April 30, 2004 and 2003, and the changes in net assets available for benefits
for the years then ended, in conformity with U.S. generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules - Schedule H,
line 4i - Schedule of Assets (Held at End of Year) and Schedule H, line 4j -
Schedule of Reportable Transactions are presented for the purpose of additional
analysis and are not a required part of the basic financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These schedules are the responsibility of the Plan's
management. The fund information in the statements of net assets available for
benefits and the statements of changes in net assets available for benefits is
presented for purposes of additional analysis rather than to present the net
assets available for plan benefits and changes in net assets available for plan
benefits of each fund. The supplemental schedules and fund information have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ KPMG LLP
September 15, 2004
DARDEN SAVINGS PLAN
Statement of Net Assets Available for Benefits with Fund Information
April 30, 2004
Participant directed
-----------------------------------------------------------------------------
American American
Express Pimco Express T. Rowe
Trust Stable Total Trust Equity Price EuroPacific
Capital Return Index Small Cap Growth
Fund II Fund Fund I Stock Fund Fund
----------------- ------------- ------------- ------------- -----------------
Assets
Investments, at fair value:
Short-term investments, at cost
which approximates fair value $ -- -- -- -- --
American Express Trust Stable Capital Fund II 47,634,949 -- -- -- --
Pimco Total Return Fund -- 8,871,620 -- -- --
American Express Trust Equity Index Fund I -- -- 43,389,436 -- --
T. Rowe Price Small Cap Stock Fund -- -- -- 25,044,144 --
EuroPacific Growth Fund -- -- -- -- 16,170,590
MSIF Trust U.S. Mid Cap Value Portfolio -- -- -- -- --
Harbor Capital Appreciation Fund -- -- -- -- --
Davis New York Venture Fund -- -- -- -- --
Common stock of Darden Restaurants, Inc. -- -- -- -- --
Participant loans -- -- -- -- --
--------------- ------------- -------------- ------------ -----------------
Total investments 47,634,949 8,871,620 43,389,436 25,044,144 16,170,590
--------------- ------------- -------------- ------------ -----------------
Receivables:
Participant contributions 71,368 22,631 84,506 41,242 33,077
Employer contribution -- -- -- -- --
Accrued dividend and interest -- -- -- -- --
--------------- ------------- -------------- ------------ -----------------
Total receivables 71,368 22,631 84,506 41,242 33,077
--------------- ------------- -------------- ------------ -----------------
Total assets 47,706,317 8,894,251 43,473,942 25,085,386 16,203,667
--------------- ------------- -------------- ------------ -----------------
Liabilities
ESOP Loan -- -- -- -- --
Interest payable -- -- -- -- --
--------------- ------------- -------------- ------------ -----------------
Total liabilities -- -- -- -- --
--------------- ------------- -------------- ------------ -----------------
Net assets available for benefits $ 47,706,317 8,894,251 43,473,942 25,085,386 16,203,667
=============== ============= ============== ============ =================
Number of participants (unaudited) 7,075 3,934 8,351 8,158 5,435
=============== ============= ============== ============ =================
See accompanying notes to financial statements.
2
Non-participant
Participant directed directed
------------------------------------------------------------------------------------------------
MSIF Trust Harbor Davis
U.S. Mid Cap Capital New York Company Participant
Value Appreciation Venture Common Loan ESOP
Portfolio Fund Fund Stock Fund Fund Fund Total
----------------- ----------------- ------------- -------------- --------------- --------------- ----------------------
-- -- -- 635,584 -- 391,761 1,027,345
-- -- -- -- -- -- 47,634,949
-- -- -- -- -- -- 8,871,620
-- -- -- -- -- -- 43,389,436
-- -- -- -- -- -- 25,044,144
-- -- -- -- -- -- 16,170,590
3,289,510 -- -- -- -- -- 3,289,510
-- 2,349,006 -- -- -- -- 2,349,006
-- -- 3,989,620 -- -- -- 3,989,620
-- -- -- 16,940,350 -- 243,498,531 260,438,881
-- -- -- -- 8,515,281 -- 8,515,281
----------------- ----------------- ------------- -------------- --------------- --------------- ----------------------
3,289,510 2,349,006 3,989,620 17,575,934 8,515,281 243,890,292 420,720,382
----------------- ----------------- ------------- -------------- --------------- --------------- ----------------------
9,886 9,436 11,503 35,432 -- -- 319,081
-- -- -- -- -- 419,280 419,280
-- -- -- -- -- 430,991 430,991
----------------- ----------------- ------------- -------------- --------------- --------------- ----------------------
9,886 9,436 11,503 35,432 -- 850,271 1,169,352
----------------- ----------------- ------------- -------------- --------------- --------------- ----------------------
3,299,396 2,358,442 4,001,123 17,611,366 8,515,281 244,740,563 421,889,734
----------------- ----------------- ------------- -------------- --------------- --------------- ----------------------
-- -- -- -- -- 29,418,000 29,418,000
-- -- -- -- -- 18,631 18,631
----------------- ----------------- ------------- -------------- --------------- --------------- ----- ----------------
-- -- -- -- -- 29,436,631 29,436,631
----------------- ----------------- ------------- -------------- --------------- --------------- ----- ----------------
3,299,396 2,358,442 4,001,123 17,611,366 8,515,281 215,303,932 392,453,103
================= ================= ============= ============== =============== =============== ======================
2,050 2,007 2,156 3,852 2,128 11,341
================= ================= ============= ============== =============== ===============
3
DARDEN SAVINGS PLAN
Statement of Net Assets Available for Benefits with Fund Information
April 30, 2003
Participant directed
-----------------------------------------------------------------------------
American American
Express Pimco Express T. Rowe
Trust Stable Total Trust Equity Price EuroPacific
Capital Return Index Small Cap Growth
Fund II Fund Fund I Stock Fund Fund
----------------- ------------- -------------- ------------ -----------------
Assets
Investments, at fair value:
Short-term investments, at cost
which approximates fair value $ -- -- -- -- --
American Express Trust Stable Capital Fund II 46,184,063 -- -- -- --
Pimco Total Return Fund -- 9,275,788 -- -- --
American Express Trust Equity Index Fund I -- -- 33,079,502 -- --
T. Rowe Price Small Cap Stock Fund -- -- -- 17,588,346 --
EuroPacific Growth Fund -- -- -- -- 9,827,490
MSIF Trust U.S. Mid Cap Value Portfolio -- -- -- -- --
Harbor Capital Appreciation Fund -- -- -- -- --
Davis New York Venture Fund -- -- -- -- --
Common stock of Darden Restaurants, Inc. -- -- -- -- --
Participant loans -- -- -- -- --
--------------- ------------- -------------- ------------ -----------------
Total investments 46,184,063 9,275,788 33,079,502 17,588,346 9,827,490
--------------- ------------- -------------- ------------ -----------------
Receivables:
Employer contribution -- -- -- -- --
Accrued dividend and interest -- -- -- -- --
--------------- ------------- -------------- ------------ -----------------
Total receivables -- -- -- -- --
--------------- ------------- -------------- ------------ -----------------
Total assets 46,184,063 9,275,788 33,079,502 17,588,346 9,827,490
--------------- ------------- -------------- ------------ -----------------
Liabilities
ESOP Loan -- -- -- -- --
Interest payable -- -- -- -- --
--------------- ------------- -------------- ------------ -----------------
Total liabilities -- -- -- -- --
--------------- ------------- -------------- ------------ -----------------
Net assets available for benefits $ 46,184,063 9,275,788 33,079,502 17,588,346 9,827,490
=============== ============= ============== ============ =================
Number of participants (unaudited) 7,453 4,002 8,731 8,418 5,481
=============== ============= ============== ============ =================
See accompanying notes to financial statements.
4
Non-participant
Participant directed directed
------------------------------------------------------------------------------------------------
MSIF Trust Harbor Davis Company Participant
U.S. Mid Cap Capital New York
Value Appreciation Venture Common Loan ESOP
Portfolio Fund Fund Stock Fund Fund Fund Total
----------------- ----------------- ------------- -------------- --------------- --------------- ----------------------
-- -- -- 368,095 -- 197,825 565,920
-- -- -- -- -- -- 46,184,063
-- -- -- -- -- -- 9,275,788
-- -- -- -- -- -- 33,079,502
-- -- -- -- -- -- 17,588,346
-- -- -- -- -- -- 9,827,490
1,038,422 -- -- -- -- -- 1,038,422
-- 867,010 -- -- -- -- 867,010
-- -- 1,257,505 -- -- -- 1,257,505
-- -- -- 14,819,996 -- 213,650,467 228,470,463
-- -- -- -- 7,927,586 -- 7,927,586
----------------- ----------------- ------------- -------------- --------------- --------------- ----------------------
1,038,422 867,010 1,257,505 15,188,091 7,927,586 213,848,292 356,082,095
----------------- ----------------- ------------- -------------- --------------- --------------- ----------------------
-- -- -- -- -- 110,374 110,374
-- -- -- -- -- 495,872 495,872
----------------- ----------------- ------------- -------------- --------------- --------------- ----------------------
-- -- -- -- -- 606,246 606,246
----------------- ----------------- ------------- -------------- --------------- --------------- ----------------------
1,038,422 867,010 1,257,505 15,188,091 7,927,586 214,454,538 356,688,341
----------------- ----------------- ------------- -------------- --------------- --------------- ----------------------
-- -- -- -- -- 34,450,000 34,450,000
-- -- -- -- -- 25,034 25,034
----------------- ----------------- ------------- -------------- --------------- --------------- ----------------------
-- -- -- -- -- 34,475,034 34,475,034
----------------- ----------------- ------------- -------------- --------------- --------------- ----------------------
1,038,422 867,010 1,257,505 15,188,091 7,927,586 179,979,504 322,213,307
================= ================= ============= ============== =============== =============== ======================
1,516 1,549 1,598 4,207 2,128 11,516
================= ================= ============= ============== =============== ===============
5
DARDEN SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits with Fund Information
Year ended April 30, 2004
Participant directed
------------------------------------------------------------------------------------
American Pimco American T. Rowe
Express Total Express Price
Trust Stable Return Trust Equity Small Cap EuroPacific
Capital Fund II Fund Index Fund I Stock Fund Growth Fund
------------------ ------------ ---------------- -------------- --------------------
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation) in
fair value of investments $ 1,909,145 (199,615) 7,643,873 5,270,918 3,780,273
Dividends and interest 307 400,489 221 385,508 148,258
------------------ ------------ ---------------- -------------- --------------------
Net investment income 1,909,452 200,874 7,644,094 5,656,426 3,928,531
------------------ ------------ ---------------- -------------- --------------------
Participant loan activity during the year:
Withdrawals (1,168,050) (401,869) (1,216,554) (697,702) (539,508)
Repayments (including interest) 935,673 267,609 1,099,770 564,327 400,493
------------------ ------------ ---------------- -------------- --------------------
Total loan activity (232,377) (134,260) (116,784) (133,375) (139,015)
------------------ ------------ ---------------- -------------- --------------------
Contributions:
Participants 4,059,839 1,341,702 4,668,096 2,164,146 1,727,993
Employer -- -- -- -- --
------------------ ------------ ---------------- -------------- --------------------
Total contributions 4,059,839 1,341,702 4,668,096 2,164,146 1,727,993
------------------ ------------ ---------------- -------------- --------------------
Total additions, net 5,736,914 1,408,316 12,195,406 7,687,197 5,517,509
------------------ ------------ ---------------- -------------- --------------------
Deductions from net assets attributed to:
Benefits paid to participants (4,563,814) (740,334) (3,159,545) (1,702,228) (1,010,719)
Interest expense -- -- -- -- --
Administrative expenses (17,465) (2,304) (13,483) (6,605) (4,004)
Transfers between funds 366,619 (1,047,215) 1,372,062 1,518,676 1,873,391
------------------ ------------ ---------------- -------------- --------------------
Total deductions, net (4,214,660) (1,789,853) (1,800,966) (190,157) 858,668
------------------ ------------ ---------------- -------------- --------------------
Net assets available for benefits:
Beginning of year 46,184,063 9,275,788 33,079,502 17,588,346 9,827,490
------------------ ------------ ---------------- -------------- --------------------
End of year $ 47,706,317 8,894,251 43,473,942 25,085,386 16,203,667
================== ============ ================ ============== ====================
See accompanying notes to financial statements.
6
Non-participant
Participant directed directed
-----------------------------------------------------------------------------------------------
MSIF Trust Davis New
U.S. Mid Cap Harbor Capital York Company Participant
Value Appreciation Venture Common Loan ESOP
Portfolio Fund Fund Stock Fund Fund Fund Total
---------------- ---------------- ------------ --------------- -------------- ----------------- -------------------------
530,335 213,241 517,921 4,073,405 -- 60,408,089 84,147,585
375 3,597 17,875 64,820 -- 893,746 1,915,196
---------------- ---------------- ------------ --------------- -------------- ----------------- -------------------------
530,710 216,838 535,796 4,138,225 -- 61,301,835 86,062,781
---------------- ---------------- ------------ --------------- -------------- ----------------- -------------------------
(126,434) (99,244) (141,760) (720,467) 5,111,588 -- --
47,546 60,036 76,911 643,516 (3,619,880) -- 476,001
---------------- ---------------- ------------ --------------- -------------- ----------------- -------------------------
(78,888) (39,208) (64,849) (76,951) 1,491,708 -- 476,001
---------------- ---------------- ------------ --------------- -------------- ----------------- -------------------------
415,384 447,657 531,060 2,078,090 -- -- 17,433,967
-- -- -- -- -- 4,930,044 4,930,044
---------------- ---------------- ------------ --------------- -------------- ----------------- -------------------------
415,384 447,657 531,060 2,078,090 -- 4,930,044 22,364,011
---------------- ---------------- ------------ --------------- -------------- ----------------- -------------------------
867,206 625,287 1,002,007 6,139,364 1,491,708 66,231,879 108,902,793
---------------- ---------------- ------------ --------------- -------------- ----------------- -------------------------
(202,391) (170,585) (173,630) (1,764,163) (904,013) (23,427,375) (37,818,797)
-- -- -- -- -- (477,231) (477,231)
(310) (390) (396) (6,203) -- (315,809) (366,969)
1,596,469 1,037,120 1,915,637 (1,945,723) -- (6,687,036) --
---------------- ---------------- ------------ --------------- -------------- ----------------- -------------------------
1,393,768 866,145 1,741,611 (3,716,089) (904,013) (30,907,451) (38,662,997)
---------------- ---------------- ------------ --------------- -------------- ----------------- -------------------------
1,038,422 867,010 1,257,505 15,188,091 7,927,586 179,979,504 322,213,307
---------------- ---------------- ------------ --------------- -------------- ----------------- -------------------------
3,299,396 2,358,442 4,001,123 17,611,366 8,515,281 215,303,932 392,453,103
================ ================ ============ =============== ============== ================= =========================
7
DARDEN SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits with Fund Information
Year ended April 30, 2003
Participant directed
------------------------------------------------------------------------------------
American Pimco American T. Rowe
Express Total Express Price
Trust Stable Return Trust Equity Small Cap EuroPacific
Capital Fund II Fund Index Fund I Stock Fund Growth Fund
------------------ ------------ --------------- ------------------------------------
Additions to net assets attributed to:
Investment income (loss):
Net appreciation (depreciation) in
fair value of investments $ 2,114,042 192,987 (4,867,336) (3,751,420) (1,756,757)
Dividends and interest 617 545,101 -- 186,033 97,774
------------------ ------------ --------------- ------------------------------------
Net investment income (loss) 2,114,659 738,088 (4,867,336) (3,565,387) (1,658,983)
------------------ ------------ ---------------- -------------- --------------------
Participant loan activity during the year:
Withdrawals (1,266,233) (397,904) (1,222,024) (741,286) (435,500)
Repayments (including interest) 868,875 205,051 1,059,239 517,794 362,160
------------------ ------------ ---------------- -------------- --------------------
Total loan activity (397,358) (192,853) (162,785) (223,492) (73,340)
------------------ ------------ ---------------- -------------- --------------------
Contributions:
Participants 4,150,045 1,361,373 5,099,814 2,343,994 1,796,587
Employer -- -- -- -- --
------------------ ------------ ---------------- -------------- --------------------
Total contributions 4,150,045 1,361,373 5,099,814 2,343,994 1,796,587
------------------ ------------ ---------------- -------------- --------------------
Total additions, net 5,867,346 1,906,608 69,693 (1,444,885) 64,264
------------------ ------------ ---------------- -------------- --------------------
Deductions from net assets attributed to:
Benefits paid to participants (4,547,727) (641,565) (2,490,221) (1,176,561) (753,821)
Interest expense -- -- -- -- --
Administrative expenses (44,221) (4,372) (9,336) (3,574) (2,084)
Transfers between funds 4,691,620 2,647,871 (1,264,229) (652,882) (80,054)
------------------ ------------ ---------------- -------------- --------------------
Total deductions, net 99,672 2,001,934 (3,763,786) (1,833,017) (835,959)
------------------ ------------ ---------------- -------------- --------------------
Net assets available for benefits:
Beginning of year 40,217,045 5,367,246 36,773,595 20,866,248 10,599,185
------------------ ------------ ---------------- -------------- --------------------
End of year $ 46,184,063 9,275,788 33,079,502 17,588,346 9,827,490
================== ============ ================ ============== ====================
See accompanying notes to financial statements.
8
Non-participant
Participant directed directed
--------------------------------------------------------------------------------------------------
MSIF Trust Davis New
U.S. Mid Cap Harbor Capital York Company Participant
Value Appreciation Venture Common Loan ESOP
Portfolio Fund Fund Stock Fund Fund Fund Total
---------------- ----------------- ------------ --------------- -------------- ---------------- -------------------------
(194,741) (130,675) (94,029) (7,188,326) -- (116,271,567) (131,947,822)
-- 1,279 6,201 53,382 -- 1,019,378 1,909,765
---------------- ----------------- ------------ --------------- -------------- ---------------- -------------------------
(194,741) (129,396) (87,828) (7,134,944) -- (115,252,189) (130,038,057)
---------------- ----------------- ------------ --------------- -------------- ---------------- -------------------------
(26,632) (44,923) (55,620) (1,200,985) 5,391,107 -- --
19,844 29,058 33,990 750,400 (3,337,996) -- 508,415
---------------- ----------------- ------------ --------------- -------------- ---------------- -------------------------
(6,788) (15,865) (21,630) (450,585) 2,053,111 -- 508,415
---------------- ----------------- ------------ --------------- -------------- ---------------- -------------------------
308,978 355,294 364,534 2,413,070 -- -- 18,193,689
-- -- -- -- -- 4,530,363 4,530,363
---------------- ----------------- ------------ --------------- -------------- ---------------- -------------------------
308,978 355,294 364,534 2,413,070 -- 4,530,363 22,724,052
---------------- ----------------- ------------ --------------- -------------- ---------------- -------------------------
107,449 210,033 255,076 (5,172,459) 2,053,111 (110,721,826) (106,805,590)
---------------- ----------------- ------------ --------------- -------------- ---------------- -------------------------
(40,026) (38,001) (39,326) (1,674,269) (704,245) (23,085,364) (35,191,126)
-- -- -- -- -- (719,696) (719,696)
(59) (81) (175) (6,443) -- (564,044) (634,389)
151,366 118,990 256,518 216,292 -- (6,085,492) --
---------------- ----------------- ------------ --------------- -------------- ---------------- -------------------------
111,281 80,908 217,017 (1,464,420) (704,245) (30,454,596) (36,545,211)
---------------- ----------------- ------------ --------------- -------------- ---------------- -------------------------
819,692 576,069 785,412 21,824,970 6,578,720 321,155,926 465,564,108
---------------- ----------------- ------------ --------------- -------------- ---------------- -------------------------
1,038,422 867,010 1,257,505 15,188,091 7,927,586 179,979,504 322,213,307
================ ================= ============ =============== ============== ================ =========================
9
DARDEN SAVINGS PLAN
Notes to Financial Statements
April 30, 2004 and 2003
(1) Description of the Plan The following description of the Darden Savings
Plan (the Plan) provides only general information. Participants should
refer to the Plan document for a more complete description of the Plan's
provisions.
The Plan, as amended, was originally established in June 1973. The Plan
covers certain employees of Darden Restaurants, Inc.'s operating and
administrative subsidiaries, and their divisions and affiliates
(collectively, the Company) who are 21 or over, regardless of their length
of service. The Plan also allows allocation of Company shares in the ESOP
Fund (an employee stock ownership plan which is a component of the Plan)
for payment of incentive bonuses earned by certain restaurant management
and Restaurant Support Center administrative employees that have five years
of service with the Company. Effective March 2004, the Plan was amended to
temporarily suspend the allocation of Company shares in the ESOP Fund for
incentive bonuses earned by restaurant management through August 2004 and
then restrict the allocation of Company shares in the ESOP Fund for payment
of incentive bonuses to individuals who were classified as qualified
managers under the Plan as of May 31, 2003. This amendment also disallowed
the allocation of Company shares in the ESOP Fund for payment of incentive
bonuses earned by certain Restaurant Support Center administrative
employees effective March 2004.
Effective June 2002, the Plan allows participants to immediately transfer
ESOP funds credited to their accounts to any of the Plan's other investment
funds. The Plan was amended to change the maximum Company variable
contribution from 100% to 120% effective July 2002. Effective January 2004,
the plan was amended to allow employees other than qualified managers to
contribute up to 25% of their eligible compensation each year. Effective
April 29, 2004, the deferral limit for qualified managers was also raised
to 25% of eligible pay.
Eligible employees may elect to make primary contributions to the Plan
ranging from 1% to 6% of their eligible compensation for each year on an
after-tax or before-tax basis. Participants electing to contribute 6% may
also elect to make unmatched contributions equal to between 1% and 19% of
their eligible compensation for the year. The Company makes quarterly
variable contributions to the Plan ranging from 25% to 120% of the primary
contribution percentages made by the participants. The Company contribution
varies depending on the Company's operating results. Plan matching
provisions become effective for participants upon completion of 12 months
of service and accumulation of 1,000 hours of service in an anniversary
year. Income earned by the Plan is allocated to participants' accounts
based on their relative account balances.
Participants may borrow from their vested account as follows: a minimum of
$1,000 up to a maximum equal to the lesser of $50,000, minus the highest
outstanding loan balance in the preceding 12 months; 50% of their vested
account balance; an amount which would result in loan repayments not to
exceed 50% of the participant's 13 week average net take-home pay; or the
vested balance in the participant's account excluding amounts in the ESOP
Fund. Loan transactions are accounted for as a transfer to (from) the
investment fund from (to) the Participant Loan Fund. Loan repayment terms
generally may not exceed 5 years. The loans are secured by the balance in
the participant's account and bear market rates of interest. Principal and
interest is paid through payroll deductions and may be repaid in full at
any time without penalty.
On termination of service due to death, disability, retirement, induction
into the Armed Forces of, or service with, the United States Government, or
involuntary separation or elimination of position due to a sale,
destruction, shut-down, or closing out of an activity or facility, a
participant shall be entitled to a
10 (Continued)
DARDEN SAVINGS PLAN
Notes to Financial Statements
April 30, 2004 and 2003
distribution of the total value of his or her account. If that participant
had a vested account balance as of June 1, 1990, he or she may elect
monthly installments not to exceed 120 months. All other terminating
participants, including those who terminate service due to other reasons,
will receive a lump sum distribution of their vested account balance if
such balance is $5,000 or less. Terminating participants having vested
account balances greater than $5,000 may elect either a lump sum
distribution or to leave their accounts in the Plan until attainment of age
65. Effective October 2003, the Plan was amended to allow the Plan to
charge annual fees to terminated participants who leave their accounts in
the Plan. All benefits are recorded when paid.
Trustee and administrative duties of the Plan are being performed by
American Express Trust Company.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The financial statements of the Plan are prepared under the accrual
method of accounting.
The Plan accounts for certain changes in net assets as follows:
o Dividends and interest, net realized and unrealized gains or
losses and administrative expenses of the American Express Trust
Stable Capital Fund II, Pimco Total Return Fund, American Express
Trust Equity Index Fund I, T. Rowe Price Small Cap Stock Fund,
EuroPacific Growth Fund, MSIF Trust U.S. Mid Cap Value Portfolio,
Harbor Capital Appreciation Fund, and the Davis New York Venture
Fund are recognized by the Plan only as they are reflected in the
Plan's proportionate share of net increases (decreases) in the
fair value of the respective funds; and
o Net realized gains or losses are recognized by the Plan upon the
sale of investment securities on the basis of weighted average
cost.
(b) Investments
Plan investments are recorded at fair value. Fair value is determined
by quoted market prices. Short-term investments are stated at cost,
which approximates fair value. Participant loans are valued at
amortized cost which approximates fair value.
Purchases and sales of securities are recorded on a trade date basis.
Dividend income is recorded on the ex-dividend date. Interest income
is recorded on the accrual basis.
The Plan's investments include funds which invest in various types of
investment securities and in various companies within various markets.
Investment securities are exposed to several risks, such as interest
rate, market and credit risks. Due to the level of risk associated
with certain investment securities, it is at least reasonably possible
that changes in the values of investment securities will occur in the
near term and that such changes could materially affect the amounts
reported in the Plan's financial statements and schedules.
11 (Continued)
DARDEN SAVINGS PLAN
Notes to Financial Statements
April 30, 2004 and 2003
(c) Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of net assets available for benefits at the date of the
financial statements and the reported amounts of additions to and
deductions from those net assets during the reporting period. Actual
results could differ from those estimates.
(3) Forfeitures and Vesting
Vested rights to Company contribution amounts accrue at a rate of 5% per
quarter beginning with the participant's fifth quarter of service.
Forfeitures of nonvested Company contributions to the Plan can be used in
the following order of priority: cover administrative expenses incurred by
the Plan, reinstate previously forfeited amounts to rehired employees and
cover Company matching contributions. During the 2004 and 2003 Plan years,
$258,437 and $419,458, respectively, of forfeitures were used to cover
administrative expenses of the Plan. No forfeited funds were used to cover
Company contributions.
(4) Choice of Investments
Participant contributions to the Plan may be directed to nine basic
investment alternatives: American Express Trust Stable Capital Fund II,
Pimco Total Return Fund, American Express Trust Equity Index Fund I, T.
Rowe Price Small Cap Stock Fund, EuroPacific Growth Fund, MSIF Trust U.S.
Mid Cap Value Portfolio, Harbor Capital Appreciation Fund, Davis New York
Venture Fund, and Company Common Stock Fund. Company contributions to the
Plan are invested in the ESOP Fund.
(5) Investments
The following table presents the fair value of investments that represent
5% or more of the Plan's net assets at April 30, 2004 and 2003:
Investments at fair value: 2004 2003
----------- -----------
American Express Trust Stable Capital
Fund II, 2,703,766 shares at April 30,
2004 and 2003, respectively $ 47,634,949 46,184,063
American Express Trust Equity Index Fund
I, 1,286,757 and 1,202,803 shares at
April 30, 2004 and 2003, respectively 43,389,436 33,079,502
T. Rowe Price Small Cap Stock Fund,
881,215 and 800,927 shares at April
30, 2004 and 2003, respectively 25,044,144 17,588,346
Common stock of Darden Restaurants, Inc.
(including $243,498,531 and $213,650,467
of non-participant directed funds at
April 30, 2004 and 2003, respectively),
11,493,331 and 13,047,999 shares at
April 30, 2004 and 2003, respectively 260,438,881 228,470,463
12 (Continued)
DARDEN SAVINGS PLAN
Notes to Financial Statements
April 30, 2004 and 2003
(6) Company Common Stock Fund
Amounts in the Company Common Stock Fund are invested in the common stock
of Darden Restaurants, Inc. At April 30, 2004 and 2003, the fair value of
the shares held in participant directed accounts was $16,940,350 (747,588
shares) and $14,819,996 (846,373 shares), respectively. Participants should
refer to the consolidated financial statements of Darden Restaurants, Inc.
included in the Company's Annual Report on Form 10-K filed with the
Securities and Exchange Commission.
(7) ESOP Fund
The ESOP Fund consists of common stock of the Company and cash which is
held in short-term investments. All amounts credited to participants' ESOP
accounts will be invested in the ESOP Fund. Effective June 2002, the Plan
was amended to allow participants to immediately transfer ESOP funds
credited to their accounts to any of the Plan's other investment funds.
However, amounts may not be transferred from any of the other investment
funds into the ESOP Fund.
At April 30, 2004, the ESOP Fund consists of 10,745,743 shares of the
Company's common stock. Of the total shares held by the ESOP Fund,
4,310,131 shares of Company common stock have been allocated to individual
participant accounts. The remaining 6,435,612 shares of Company common
stock are reserved for future Company matching contributions and incentive
bonuses to individuals who were classified as qualified managers under the
Plan as of May 31, 2003. The shares become available for allocation to
participants' accounts as ESOP loan principal and interest is paid. At
April 30, 2004, the fair value of the 6,435,612 unallocated Company shares
was $145,830,974 and the fair value of the 4,310,131 allocated shares was
$97,667,557. At April 30, 2003, the fair value of the 7,634,040 unallocated
Company shares was $133,672,034 and the fair value of the 4,567,586
allocated shares was $79,978,433.
The ESOP Fund has two promissory notes payable to Darden Restaurants, Inc.,
with outstanding principal balances of $12,518,000 and $16,900,000 as of
April 30, 2004 and $17,550,000 and $16,900,000 as of April 30, 2003. The
notes bear interest at variable rates payable on a monthly or bi-monthly
basis at the discretion of the Company. As of April 30, 2004 and 2003, the
interest rate was 1.425 percent and 1.635 percent, respectively. No
principal payments on the notes are required until the due dates, December
31, 2007 and December 15, 2014, respectively. Any or all of the principal
may be prepaid at any time. For the years ended April 30, 2004 and 2003,
the ESOP Fund made principal payments of $5,032,000 and $4,690,000,
respectively.
(8) Related Party Transactions
Certain plan investments are units of participation in common trust funds
and shares of mutual funds managed by American Express Trust Company. As
mentioned in Note 1, American Express Trust Company is the trustee as
defined by the Plan and, therefore, these transactions qualify as
party-in-interest transactions. The Company pays the American Express Trust
Company's administrative and trustee fees. Such fees, net of plan
forfeitures and fees paid by terminated participants used to cover plan
expense, were $594,214 and $273,520 for the years ended April 30, 2004 and
2003, respectively.
13 (Continued)
DARDEN SAVINGS PLAN
Notes to Financial Statements
April 30, 2004 and 2003
Certain plan investments are loans to participants who are employees of the
Company and, therefore, these transactions qualify as party-in-interest
transactions. Terminated participants that elect to leave their accounts in
the Plan are required to pay annual fees. Therefore, these transactions
also qualify as party-in-interest transactions. Annual fees paid by
participants were $37,492 and $0 for the years ended April 30, 2004 and
2003, respectively.
(9) Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets available for plan benefits
per the accompanying financial statements to the Form 5500:
2004 2003
------------- -----------
Net assets available for benefits per the
accompanying financial statements $ 392,453,103 322,213,307
Due to plan participants (175,755) (75,637)
Deemed loans (92,116) --
------------- -----------
Net assets available for benefit
per Form 5500 $ 392,185,232 322,137,670
============= ===========
The following is a reconciliation of total additions per the accompanying
financial statements to the Form 5500:
2004 2003
------------- -----------
Total additions per the accompanying
financial statements $ 108,902,793 106,805,590
Interest income on deemed distributed
loans 2,584 --
------------- -----------
Total additions per Form 5500 $ 108,905,377 106,805,590
============= ===========
The following is a reconciliation of benefits paid to participants per the
accompanying financial statements to the Form 5500:
2004 2003
------------- -----------
Total deductions per the accompanying
financial statements $ 38,662,997 36,545,211
Amounts allocated to withdrawing
participants at end of year 175,755 75,637
Amounts allocated to withdrawing
participants at beginning of year (75,637) (463,490)
Deemed distributed loans offset by
total distributions (10,932) --
Change in deemed loans 105,632 --
------------- -----------
Total deductions per Form 5500 $ 38,857,815 36,157,358
============= ===========
14 (Continued)
DARDEN SAVINGS PLAN
Notes to Financial Statements
April 30, 2004 and 2003
(10) Tax Status
The Plan obtained its latest determination letter on July 15, 2002, in
which the Internal Revenue Service stated that the Plan, as designed
through November 13, 2001, was in compliance with the applicable
requirements of the Internal Revenue Code. The Company believes that the
Plan currently is designed and being operated in compliance with the
applicable requirements of the Internal Revenue Code and, therefore, the
Plan qualifies under Section 401(a) and 4975(e)(7) and the related trust is
tax exempt as of April 30, 2004. Therefore, no provision for income taxes
has been included in the Plan's financial statements.
(11) Plan Termination
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of the Employee Retirement
Income Security Act of 1974. In the event of Plan termination, no further
contributions shall be made to the Trust Fund by either the Company or the
participants, participants would become fully vested in their employer
contributions and the related Plan trust would be used exclusively for the
benefit of participants and beneficiaries after the payment of liquidation
expenses. Any unallocated leveraged shares in the ESOP Fund would be sold
to the Company or on the open market. The proceeds of such sale would be
used to satisfy any outstanding acquisition loans and the balance of any
amounts remaining would be allocated to each participant in proportion to
each participant's ESOP account balance to the total of all ESOP account
balances.
15 (Continued)
Schedule 1
DARDEN SAVINGS PLAN
Schedule H, line 4i - Schedule of Assets (Held at End of Year)
April 30, 2004
Face amount
or number Current
Issuer of units Cost value
-------------------------------------------------------- ------------------- ------------------- -------------------
Common stock of Darden
Restaurants, Inc.* 11,493,331 $ 54,204,898 $ 260,438,881
American Express Trust Stable Capital
Fund II* 2,703,766 42,465,742 47,634,949
Pimco Total Return Fund 831,455 8,946,843 8,871,620
American Express Trust Equity
Index Fund I* 1,286,757 42,204,594 43,389,436
T. Rowe Price Small Cap Stock Fund 881,215 20,847,005 25,044,144
EuroPacific Growth Fund 519,955 15,105,791 16,170,590
MSIF Trust U.S. Mid Cap Value Portfolio 160,935 2,903,077 3,289,510
Harbor Capital Appreciation Fund 90,381 2,298,991 2,349,006
Davis New York Venture Fund 142,182 3,486,167 3,989,620
Participant Loans outstanding - interest
rates ranging from 5.00% - 10.5%
with varying maturities* 2,128 -- 8,515,281
American Express Trust Company
Short-term Investment Fund* 1,027,345 1,027,345 1,027,345
*Party-in-interest
See accompanying independent auditors' report.
16
Schedule 2
DARDEN SAVINGS PLAN
Schedule H, line 4j - Schedule of Reportable Transactions
Year ended April 30, 2004
5% series of transactions by security issue described in 29 CFR 2520
[(103-6(c)(i)(iii)]:
Purchases Sales Net gain
---------------------------- -------------------------------
Issuer/Description Number Amount Number Amount (loss)
---------------------------------------- ------------ --------------- ------------ ------------------ ---------------
American Express Trust Company
Short-term Investment Fund* 273 $ 22,338,486 410 $ 21,861,414 $ --
Common stock of Darden
Restaurants, Inc.* 85 1,797,762 130 33,761,167 26,667,753
*Party-in-interest
See accompanying independent auditors' report.
17
EXHIBITS
23 Consent of KPMG LLP, Independent Registered Public Accounting Firm.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Darden Savings Plan has duly caused this Annual Report to be signed on its
behalf by the Benefit Plan Financial Committee (as the person who administers
the financial aspects of the Darden Savings Plan), by the undersigned hereunto
duly authorized.
DARDEN SAVINGS PLAN
By: Benefit Plan Financial Committee,
as financial administrator of
the Darden Savings Plan
Dated: October 25, 2004 By: /s/ Linda J. Dimopoulos
-----------------------------------
Linda J. Dimopoulos, Chairman
Benefit Plan Financial Committee
Darden Restaurants, Inc.
EXHIBIT INDEX
Exhibit
Number Title
23 Consent of KPMG, as Independent Registered Public Accounting
Firm.