Financial Review 2004 Consolidated Statements  of Cash Flows See accompanying notes to consolidated financial statements. Darden Restaurants  37 Fiscal Year Ended (In thousands)  May 30, 2004  May 25, 2003  May 26, 2002 Cash flows – operating activities  Net earnings $ 231,462  $ 232,260  $ 237,788 Adjustments to reconcile net earnings to cash flows:  Depreciation and amortization  210,004  191,218  165,829 Asset impairment charges, net  40,756  4,282  – Restructuring charge (credit)  1,112  (358)  (2,568) Amortization of unearned compensation and loan costs  7,599  6,901  7,578 Change in current assets and liabilities  2,207  36,046  49,604 Change in other liabilities  1,794  420  (496) Contribution to defined benefit pension plans and postretirement plan  (257)  (20,203)  (164) Loss on disposal of land, buildings, and equipment  104  2,456  1,803 Change in cash surrender value of trust-owned life insurance  (6,106)  2,441  743 Deferred income taxes  19,621  35,890  22,743 Income tax benefits credited to equity  15,650  16,385  24,989 Non-cash compensation expense  861  758  – Other, net  604  139  252 Net cash provided by operating activities  $ 525,411  $ 508,635  $ 508,101 Cash flows – investing activities  Purchases of land, buildings, and equipment  (354,326)  (423,273)  (318,392) Increase in other assets  (5,128)  (8,100)  (24,700) Purchase of trust-owned life insurance –  (6,000)  (31,500) Proceeds from disposal of land, buildings, and equipment  16,197  7,641  10,741 Proceeds from maturities of (purchases of) short-term investments  –  10,000  (9,904) Net cash used in investing activities  $(343,257)  $(419,732)  $(373,755) Cash flows – financing activities  Proceeds from issuance of common stock  39,856  33,664  40,520 Dividends paid  (12,984)  (13,501)  (9,225) Purchases of treasury stock  (235,462)  (213,311)  (208,578) ESOP note receivable repayments  5,027  4,710  5,315 Increase (decrease) in short-term debt  14,500  –  (12,000) Proceeds from issuance of long-term debt  –  –  149,655 Repayment of long-term debt  (5,027)  (4,710)  (7,962) Payment of loan costs  –  –  (1,010) Net cash used in financing activities  $(194,090)  $(193,148)  $ (43,285) (Decrease) increase in cash and cash equivalents  (11,936)  (104,245)  91,061 Cash and cash equivalents – beginning of year  48,630  152,875  61,814 Cash and cash equivalents – end of year  $ 36,694  $ 48,630  $ 152,875 Cash flows from changes in current assets and liabilities  Receivables  (279)  66  3,781 Inventories  (25,137)  (1,231)  (23,984) Prepaid expenses and other current assets  (190)  (8,523)  1,987 Accounts payable  (1,027)  15,927  3,205 Accrued payroll  17,352  (1,961)  5,348 Accrued income taxes  (19,222)  (529)  20,806 Other accrued taxes  3,371  4,595  3,045 Unearned revenues  2,815  16,066  18,487 Other current liabilities  24,524  11,636  16,929 Change in current assets and liabilities  $ 2,207  $ 36,046  $ 49,604