Red Lobster 2009 Annual Report Download - page 39

MD&A Management’s Discussion and Analysis
of Financial Condition and Results of Operations
2009 Annual Report Darden Restaurants, Inc. 37
• The price and availability of food, ingredients and utilities,
including the general risk of inflation;
• The impact of shortages or interruptions in the delivery of
food and other supplies from third party vendors;
• 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;
• The loss of key personnel or difficulties recruiting and
retaining qualified personnel;
• A material information technology interruption or
security failure;
• 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;
• The health concerns arising from outbreaks of viruses or other
diseases and their adverse effect on our business;
• 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;
• Factors impacting our growth objectives, including lower-
than-expected sales and profitability of newly-opened
restaurants, our ability to develop or acquire new concepts
and our ability to manage risks relating to the opening of new
restaurants, including real estate development and construc-
tion activities, union activities, the issuance and renewal of
licenses and permits and the availability and cost of funds to
finance growth;
• Our plans to expand newer concepts like Bahama Breeze and
Seasons 52 that have not yet proven their long-term viability
may not be successful and could require us to make substantial
further investments in these concepts;
• Our ability to realize the full anticipated benefits of the
RARE acquisition;
• The negative effect of a possible impairment in the carrying
value of our goodwill or other intangible assets;
• The impact of the substantial indebtedness we incurred in
connection with the acquisition of RARE;
• A failure of our internal control over financial reporting;
• The impact of disruptions in the financial markets, including
an increase in pension costs; and
• The impact of volatility in the market value of derivatives we
use to hedge commodity prices.
Any of the risks described above or elsewhere in this report or
our other filings with the Securities and Exchange Commission could
have a material impact on our business, financial condition or results
of operations. It is not possible to predict or identify all risk factors.
Additional risks and uncertainties not presently known to us or that
we currently believe to be immaterial may also impair our business
operations. Therefore, the above is not intended to be a complete
discussion of all potential risks or uncertainties.