Red Lobster 2013 Annual Report Download - page 35

Management’s Discussion and Analysis
of Financial Condition and Results of Operations
Darden
Darden Restaurants, Inc. 2013 Annual Report 31
FORWARD-LOOKING STATEMENTS
Statements set forth in or incorporated into this report regarding the expected
net increase in the number of our restaurants, U.S. same-restaurant sales, total
sales growth, diluted net earnings per share growth, and capital expenditures in
fiscal 2014, and all other statements that are not historical facts, including without
limitation statements with respect to the financial condition, results of operations,
plans, objectives, future performance and business of Darden Restaurants, Inc.
and its subsidiaries that are preceded by, followed by or that include words such
as “may,” “will,” “expect,” “intend,” “anticipate,” “continue,” “estimate,” “project,”
“believe,” “plan” or similar expressions, are forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995 and are
included, along with this statement, for purposes of complying with the safe
harbor provisions of that Act. Any forward-looking statements speak only as of
the date on which such statements are made, and we undertake no obligation to
update such statements for any reason to reflect events or circumstances arising
after such date. By their nature, forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from those set
forth in or implied by such forward-looking statements. In addition to the risks
and uncertainties of ordinary business obligations, and those described in infor-
mation incorporated into this report, the forward-looking statements contained
in this report are subject to the risks and uncertainties described in Part I, Item 1A
“Risk Factors” in our Annual Report on Form 10-K for the year ended May 26,
2013, which are summarized as follows:
 • Foodsafetyandfood-borneillnessconcernsthroughoutthesupplychain;
 • Litigation,includingallegationsofillegal,unfairorinconsistent
employmentpractices;
 • Unfavorablepublicity,orafailuretorespondeffectivelytoadversepublicity;
 • Risksrelatingtopublicpolicychangesandfederal,stateandlocal
regulation of our business, including in the areas of health care reform,
environmental matters, minimum wage, unionization, data privacy,
menulabeling,immigrationrequirementsandtaxes;
 • Laborandinsurancecosts;
 • Insufficientguestoremployeefacingtechnology,orafailuretomaintain
a continuous and secure cyber network, free from material failure, inter-
ruptionorsecuritybreach;
 • Ourinabilityorfailuretoexecuteacomprehensivebusinesscontinuity
plan following a major natural disaster such as a hurricane or manmade
disaster,includingterrorism;
 • Healthconcernsarisingfromfood-relatedpandemics,outbreaksofflu
virusesorotherdiseases;
 • Intensecompetition,oraninsufficientfocusoncompetitionandthe
consumerlandscape;
 • Ourfailuretodrivebothshort-termandlong-termprofitablesales
growth through brand relevance, operating excellence, opening
new restaurants of existing brands and developing or acquiring
newdiningbrands;
 • FailuretosuccessfullyintegratetheYardHousebusiness,andtherisks
associated with the additional indebtedness incurred to finance the
YardHouseacquisition;
 • OurplanstoexpandoursmallerbrandsBahamaBreeze,Seasons52and
Eddie V’s, and the testing of synergy restaurants and other new business
ventures,thathavenotyetproventheirlong-termviability;
 • Alackofsuitablenewrestaurantlocationsoradeclineinthequalityof
thelocationsofourcurrentrestaurants;
 • Higher-than-anticipatedcoststoopen,close,relocateorremodelrestaurants;
 • Afailuretoidentifyandexecuteinnovativemarketingandcustomer
relationship tactics, ineffective or improper use of social media or other
marketinginitiatives,andincreasedadvertisingandmarketingcosts;
 • Afailuretorecruit,developandretaineffectiveleadersorthelossor
shortage of key personnel, or an inability to adequately monitor and
respondtoemployeedissatisfaction;
 • Afailuretoaddresscostpressures,includingrisingcostsforcommodities,
health care and utilities used by our restaurants, and a failure to effec-
tively deliver cost management activities and achieve economies of scale
inpurchasing;
 • Theimpactofshortagesorinterruptionsinthedeliveryoffoodandother
productsfromthird-partyvendorsandsuppliers;
 • Adverseweatherconditionsandnaturaldisasters;
 • Volatilityinthemarketvalueofderivativesweusetohedge
commodityprices;
 • Economicandbusinessfactorsspecifictotherestaurantindustryand
other general macroeconomic factors including unemployment, energy
pricesandinterestratesthatarelargelyoutofourcontrol;
 • Disruptionsinthefinancialmarketsthatmayimpactconsumerspending
patterns, affect the availability and cost of credit and increase pension
planexpenses;
 • Risksassociatedwithdoingbusinesswithfranchisees,businesspartners
andvendorsinforeignmarkets;
 • Failuretoprotectourservicemarksorotherintellectualproperty;
 • Impairmentofthecarryingvalueofourgoodwillorotherintangibleassets;
 • Afailureofourinternalcontrolsoverfinancialreportingandfuture
changesinaccountingstandards;and
 • Aninabilityorfailuretorecognize,respondtoandeffectivelymanagethe
accelerated impact of social media.
Any of the risks described above or elsewhere in this report or our other filings
with the SEC 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.