We have a clearly defined core purpose that motivates us every day – to nourish and delight everyone we serve. CASUAL DINING IS A GROWTH INDUSTRY leaving 32 restaurants in operation at the end of the fiscal year.  Average annual sales per restaurant, excluding the closed restau- rants, were $5.2 million in fiscal 2004 (on a 52-week basis). Our industry, casual dining, is large and continues to grow. In  calendar 2003, casual dining industry sales grew 2.6 percent. This  compares favorably to the quick-service and mid-scale segments  of the restaurant industry, which reported a 1.4 percent increase  in sales and a 1.9 percent decline in sales, respectively. However,  casual dining’s 2003 results are well below the industry’s 10-year  average growth rate of 7.4 percent.  Despite the slowdown in calendar 2003, industry experts continue  to forecast that annualized casual dining sales growth will be  between 5 percent and 7 percent over the next decade. The driving  factors have not changed and are as important as ever – growth in  total employment, growth in real disposable income, an increasing  number of women in the workforce, and the aging demographics  of the U.S. population.  These drivers, combined with changing lifestyles that place a  premium on the time-saving and social reconnection benefits of  dining out, give us great confidence that we are in the right indus- try at the right time. Our confidence is buttressed by the fact that  supply and demand within the casual dining industry continue to  remain in balance, as they have for the past several years. Although  total casual dining visits were down 0.3 percent in calendar 2003,  there was an even steeper decline in the number of casual dining  units, which fell 2.2 percent. Against that backdrop, it’s important  to note that casual dining chains experienced a 1.0 percent increase  in units. This continues a trend we’ve seen in recent years and is a  strong indicator that well-managed casual dining chains continue to  grow and take market share from independent restaurant operators. While we are proud of our achievements in fiscal 2004, we know  we must strengthen several important aspects of our business.  That’s the key to returning to the high level of performance that  will create strong long-term value for our shareholders. We approach  our improvement opportunities with a solid foundation, one that  features an excellent balance of proven and emerging brands. We  also have a clearly defined core purpose that motivates us every  day –  to nourish and delight everyone we serve . And we have a shared  goal throughout the Company – we want to be the best in casual  dining, now and for generations. We recognize that to achieve our  goal, we must build on this strong foundation with even greater  attention to two things: operating excellence and effective brand  building across the Company. As I’ve said, our business is built on a strong foundation, starting  with our compelling core purpose,  to nourish and delight everyone we  serve . Darden also has seven core values that have been forged over  our 65-year heritage, which started with the early businesses of  our late founder, Bill Darden. We value: OUR SOLID FOUNDATION • Integrity and fairness • Respect and caring • Diversity • Always learning / always teaching • Being “of service” • Teamwork • Excellence Darden Restaurants  7 7  Darden Restaurants • With our strong cash flow and balance sheet, we continued to  aggressively buy back shares of our common stock. We repur- chased 10.7 million shares in fiscal 2004, which represented more  than $235 million in share repurchases. Since we began our  repurchase program in 1996, we have repurchased more than  109 million shares, or more than $1.5 billion of our common stock. • Seasons 52, the casually sophisticated fresh grill and wine bar  we’re testing in Orlando, continued to post impressive results.  Plans are in place to open two to three more test restaurants in  fiscal 2005 to further explore the concept’s viability. Seasons 52  offers seasonally inspired menus with fresh ingredients, to create  great tasting, nutritionally balanced meals that are lower in cal- ories than comparable restaurant meals.  • Smokey Bones’ total sales were $174 million, an 87 percent increase  from last year, as the company nearly doubled in size this year  by adding 30 new restaurants to its base of 39. Smokey Bones  continued to drive strong consumer acceptance through its unique  combination of slow-smoked barbeque and a variety of other  grilled favorites, served in a lively yet comfortable mountain- lodge atmosphere, where guests can watch their favorite sports.  Annual sales averaged $3.2 million per restaurant (on a 52-week  basis) and expansion will continue in fiscal 2005 as it seeks to take  advantage of a compelling opportunity.