Red Lobster 2006 Annual Report Download - page 36
Download and view the complete annual report
Please find page 36 of the 2006 Red Lobster annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.clarifies the accounting for uncertain income tax posi-
tions accounted for in accordance with SFAS No. 109.
The Interpretation stipulates recognition and measure-
ment criteria in addition to classification, interim period
accounting and significantly expanded disclosure pro-
visions for uncertain tax positions that are expected
to be taken in a company’s tax return. FIN 48 is effec-
tive for fiscal years beginning after December 15,
2006. We have not yet determined the impact the
adoption of FIN 48 will have on our consolidated
financial statements.
Forward-Looking Statements
Certain statements included in this report and other
materials filed or to be filed by us with the SEC (as well
as information included in oral or written statements
made or to be made by us) may contain statements
that are forward-looking within the meaning of the
Private Securities Litigation Reform Act of 1995, as
codified in Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange
Act of 1934, as amended (the Exchange Act). Words
or phrases such as “believe,” “plan,” “will,” “expect,”
“intend,” “estimate,” and “project” and similar
expressions are intended to identify forward-looking
statements. All of these statements, and any other
statements in this report that are not historical facts,
are forward-looking. These forward-looking statements
are based on assumptions concerning important factors,
risks and uncertainties that could significantly affect
anticipated results in the future and, accordingly, could
cause the actual results to differ materially from those
expressed in the forward-looking statements. These
factors, risks and uncertainties include, but are not
limited to those discussed below and in Part I, Item 1A,
“Risk Factors” in our Annual Report on Form 10-K for
the year ended May 28, 2006:
• The intensely competitive nature of the restau-
rant industry, especially pricing, service, location,
personnel and type and quality of food;
• Economic and business factors, both specific to
the restaurant industry and generally, including
changes in consumer preferences, demographic
trends, fuel prices, severe weather conditions
including hurricanes, a protracted economic
slowdown or worsening economy, industry-wide
cost pressures and public safety conditions,
including actual or threatened armed conflicts
or terrorist attacks;
• The price and availability of food, ingredients and
utilities, including the general risk of inflation;
• Labor and insurance costs, including increased labor
costs as a result of federal and state-mandated
increases in minimum wage rates and increased
insurance costs as a result of increases in our current
insurance premiums;
• Increased advertising and marketing costs;
• Higher-than-anticipated costs to open, close,
relocate or remodel restaurants;
• Litigation by employees, consumers, suppliers,
shareholders or others, regardless of whether
the allegations made against us are valid or we
are ultimately found liable;
• Unfavorable publicity relating to food safety or
other concerns;
• A lack of suitable new restaurant locations or
a decline in the quality of the locations of our
current restaurants;
• Federal, state and local regulation of our business,
including laws and regulations relating to our
relationships with our employees, zoning, land
use, environmental matters and liquor licenses;
• Growth objectives, including lower-than-expected
sales and profitability of newly-opened restaurants,
our expansion of newer concepts that have not
yet proven their long-term viability, our ability
to develop new concepts, risks associated with
growth through acquisitions, and our ability to
manage risks relating to the opening of new
restaurants, including real estate development
and construction activities, union activities, the
issuance and renewal of licenses and permits,
the availability of funds to finance growth and our
ability to hire and train qualified personnel; and
• Our plans to improve the financial performance
of Bahama Breeze and Smokey Bones and
reposition the Smokey Bones brand.
Since it is not possible to foresee all such factors,
risks and uncertainties, investors should not con-
sider these factors to be a complete list of all risks
or uncertainties.
Darden Restaurants 2006 Annual Report
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Financial Review 2006
31