Red Lobster 1999 Annual Report Download - page 4

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Management’s Discussion
of Results of Operations and Financial Condition
Report
of Management Responsibilities
Risks
The Company utilizes IT systems and non-IT systems in
many aspects of its business. Year 2000 problems in
some of the Company’s systems could possibly disrupt
operations at some restaurants, but the Company does
not expect that any such disruption would have a material
adverse impact on the Company’s operating results.
The Company is also exposed to the risk that one or
more of its suppliers or vendors could experience Year
2000 problems that could impact the ability of such
suppliers or vendors to provide goods and services.
Although this risk is lessened by the availability of
alternative suppliers, the disruption of certain services,
such as utilities, could, depending upon the extent of
the disruption, potentially have a material adverse
impact on the Company’s operations.
Contingency Plans
The Year 2000 Project Office is in the final stages of
developing contingency plans for the Company’s
significant IT systems and non-IT systems requiring
Year 2000 modification. In addition, the Company has
developed contingency plans to deal with the possibility
that some suppliers or vendors might fail to provide
goods and services on a timely basis as a result of Year
2000 problems. These contingency plans include the
identification, acquisition and/or preparation of backup
systems, suppliers and vendors.
FORWARD-LOOKING STATEMENTS
Certain information included in this report and other
materials filed or to be filed by the Company with
the Securities and Exchange Commission (as well as
information included in oral statements or written
statements made or to be made by the Company) may
contain statements that are forward-looking within the
meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Such statements
include information relating to current expansion plans,
business development activities and Year 2000
compliance. Such forward-looking information is based
on assumptions concerning important risks and uncer-
tainties that could significantly affect anticipated results
in the future and, accordingly, such results may differ
from those expressed in any forward-looking statements
made by or on behalf of the Company. These risks and
uncertainties include, but are not limited to, those
relating to real estate development and construction
activities, the issuance and renewal of licenses and
permits for restaurant development and operation,
economic conditions, changes in federal or state laws
or the administration of such laws, and the Year 2000
readiness of suppliers, banks, vendors and others
having a direct or indirect business relationship with
the Company.
The management of Darden Restaurants, Inc. is respon-
sible for the fairness and accuracy of the consolidated
financial statements. The consolidated financial state-
ments have been prepared in accordance with generally
accepted accounting principles, using management’s
best estimates and judgments where appropriate. The
financial information throughout this report is consistent
with our consolidated financial statements.
Management has established a system of internal controls
that provides reasonable assurance that assets are
adequately safeguarded and transactions are recorded
accurately, in all material respects, in accordance with
management’s authorization. We maintain a strong audit
program that independently evaluates the adequacy and
effectiveness of internal controls. Our internal controls
provide for appropriate separation of duties and
responsibilities, and there are documented policies
regarding utilization of Company assets and proper
financial reporting. These formally stated and regularly
communicated policies demand highly ethical conduct
from all employ ees.
The Audit Committee of the Board of Directors meets
regularly to determine that management, internal auditors
and independent auditors are properly discharging their
duties regarding internal control and financial reporting.
The independent auditors, internal auditors and employ-
ees have full and free access to the Audit Committee at
any time.
KPMG LLP, independent certified public accountants, are
retained to audit the consolidated financial statements.
Their report follows.
Joe R. Lee
Chairman of the Board and Chief Executive Officer