Ladies and gentlemen, thank you for standing by and welcome to the Darden Restaurants Incorporated fourth quarter earnings release conference call. (Operator Instructions) At this time then, I would like to turn the conference over to Mr. Matthew Stroud. Please go ahead.

Thank you, Ken. Good morning, everybody. With me today are Clarence Otis, Darden's Chairman and CEO; Drew Madsen, Darden's President and Chief Operating Officer; Brad Richmond, Darden's Chief Financial Officer; and Gene Lee, President of Darden's Specialty Restaurant Group. We welcome those of you joining us by telephone or the Internet. During the course of this conference call, Darden Restaurants officers and employees may make forward-looking statements concerning the company’s expectations, goals, or objectives. These forward-looking statements could address future economic performance, restaurant openings, various financial parameters, or similar matters. By their nature, forward-looking statements involve risks and uncertainties that could cause actual results to materially differ from those anticipated in the statements. The most significant of these uncertainties are described in Darden's Form 10-K, Form 10-Q, and Form 8-K reports, including all amendments to those reports. These risks and uncertainties include the impact of intense competition, changing economic or business conditions, the price and availability of food, ingredients, and utilities, supply interruptions, labor and insurance costs, increased advertising and marketing costs, higher than anticipated costs to open or close restaurants, litigation, unfavorable publicity, a lack of suitable locations, government regulations, a failure to achieve growth objectives through the opening of new restaurants or the development or acquisition of new dining concepts, weather conditions, risks associated with Darden's plans to expand newer concepts, Bahama Breeze and Seasons 52, our ability to combine and integrate the business of RARE Hospitality International Incorporated, achieve synergies and develop new Longhorn Steakhouse and The Capital Grille restaurants, risks associated with incurring substantial additional debt and other factors and uncertainties discussed from time to time in reports filed by Darden with the Securities and Exchange Commission. A copy of our press release announcing our earnings, the Form 8-K used to furnish the release to the…

Thank you, Matthew and good morning. Darden's total sales from continuing operations increased 25% in the fourth quarter to $1.83 billion, driven by the addition of Longhorn Steakhouse and The Capital Grille, plus meaningful new and -restaurant sales growth at Olive Garden. The incremental sales from Longhorn Steakhouse and The Capital Grille totaled $290 million for the fourth quarter. Excluding the acquisition, sales growth for the quarter would have been 5.1%. Now let’s review the same-restaurant component of our total sales growth and for context, industry same-restaurant sales, as measured by Knapp-Track and excluding Darden, were down approximately 2% for the quarter. Olive Garden's same-restaurant sales were up 5.8% for the quarter, its 55th consecutive quarter of same-restaurant sales growth, and growth that was eight percentage points above the industry benchmark. Olive Garden's total sales increased 11%. Red Lobster had same-restaurant sales decrease of 0.2% for the quarter, which was two percentage points better than the industry, while its total sales decreased 0.5%. Longhorn Steakhouse same-restaurant sales decreased 3.1% for the quarter. Although below the national industry benchmark, this result is in line with the same-restaurant sales results in the Knapp-Track regions where Longhorn Steakhouse operates, which are principally in the eastern half of the country. The Capital Grille had a same-restaurant sales decrease of 3.8% for the quarter. Bahama Breeze had a same-restaurant sales decrease of 3.7% for the quarter. I will also point out that winter weather had a negative one percentage point impact on sales in March, which equates to approximately three-tenths of a percentage point of negative impact for the fourth quarter. The net result is that in a difficult environment relative to the industry as measured by Knapp-Track, our three large brands performed solidly. Now let’s discuss the margin analysis of the fourth quarter, which…

Thank you, Brad, and I’ll start by sharing a few thoughts about the full service dining industry and then get into summarizing the fourth quarter performance, as well as the fiscal 2009 strategic focus for Olive Garden, Red Lobster, and Longhorn. But overall, we believe we are well-positioned to outperform the industry and deliver another year of solid performance. We expect the full service dining environment over the near-term to be similar to what we have experienced most recently. In particular, industry traffic will most likely remain depressed and cost pressures will be comparable to what we experienced during fiscal 2008. Given this background, there are five key considerations that have helped shape our thinking for fiscal 2009. First, strong brands will continue to outperform the industry, and this is most true for brands with broad appeal, strong value, and national marketing capabilities like Olive Garden and Red Lobster. Second, when guests choose our restaurants, it is more important than ever that we deliver a consistently great guest experience, which will obviously help ensure their continued loyalty going forward. Third, giving our guests a new reason to visit our restaurants, typically in the form of compelling new food promotions, will continue to be important. Fourth, we will take full advantage of the cost management opportunities that our scale and strong operating infrastructure provide, especially in our supply chain. This will allow us to minimize the amount of pricing we need to take to protect our unit level margins while still maintaining broad consumer appeal. And finally, we will stay focused on the strategic priorities critical to our long-term success and resist short-term tactics that could undermine that success -- tactics like couponing too aggressively, reducing portion sizes, or cutting back on front-line restaurant training or staffing. Now let’s talk about…

Thanks, Drew. The specialty restaurant group continues to make progress developing an organizational structure that supports and governs our three differentiated concepts while reducing G&A expenses. The operating foundation we are building positions our brands for strong profitable growth. The Capital Grille's fourth quarter sales were $64.9 million, an 11.8% increase over the prior year. Same-restaurant sales declined 3.8%, reflecting weakness in the luxury consumer spending and confidence. The Capital Grille's average weekly sales for the fourth quarter, however, continued to be strong. Overall guest satisfaction reached an all-time high in fiscal 2008, demonstrating that our restaurant teams remain focused on providing guests with a best-in-class personalized dining experience. While we are experiencing traffic softness, we are working to increase our private dining business as well as continuing to elevate our differentiated service experience and overall restaurant level execution through enhanced training. In fiscal 2009, we anticipate opening five to six restaurants while continuing our integration efforts and improving same-restaurant sales performance. Bahama Breeze had fourth quarter sales of $36.6 million, 3.7% below prior year sales from continuing operations. Same-restaurant sales declined 3.7%, which was below the Knapp-Track national average; however, a significant portion of our restaurants are located in Florida, one of Knapp-Track’s weakest regions. While we were disappointed with these results, Bahama Breeze outpaced the Knapp-Track competitive set and same-restaurant guest counts by 1.5 points in the fourth quarter and exceeded the industry every quarter in fiscal 2008. In addition, overall guest satisfaction for the year, as measured by our Internet guest satisfaction survey, was at an all-time high. In fiscal 2009, the brand will continue focusing on providing a compelling, differentiated dining experience. As many of you know, over the last several years we have made a significant number of operational changes to strengthen the business model. This year, there will be fewer of these changes, allowing our restaurant teams to focus on executing at a consistently high level. We are also preparing to open one to two restaurants in the second half of the fiscal year. Seasons 52 has worked hard to build a solid foundation for growth. This uniquely positioned brand had sales in excess of $6 million and strong restaurant level returns. We continue to focus on building effective operational foundation and hiring and developing talented team members to support growth and ensure we continue executing this concept at a high level. In addition, we are actively working to identify and secure new locations to support disciplined growth, beginning with one new restaurant in late fiscal 2009. We are pleased to report Bahama Breeze and Seasons 52 were accretive to earnings in fiscal 2008. We expect these concepts to increase net earnings in fiscal 2009. Now I’ll hand it back to Brad for our fiscal 2009 financial outlook.

Thank you, Gene. In fiscal 2009, we expect combined same-restaurant sales growth for Red Lobster, Olive Garden, and Longhorn Steakhouse to be approximately 2%. This includes approximately 2% to 3% of pricing for fiscal 2009 and our expectation that together, traffic and mix changes will be flat to slightly negative. We believe this is a realistic estimate, given the current consumer environment. Of course, we will be both above and below this 2% estimate from month to month and quarter to quarter, depending on promotional calendars, holiday shifts, and changes in consumer sentiment, which as you know has been volatile for much of the past 24 months. In fact, there are two quarterly holiday shifts you should be aware of this fiscal year. The Thanksgiving holiday, when our restaurants are closed, will fall in our fiscal third quarter in fiscal 2009, while it fell in fiscal second quarter in 2008. And the start of Lent will shift to the fiscal fourth quarter in our fiscal 2009 from the fiscal third quarter in 2008. These holiday shifts will have a meaningful impact on quarterly same-restaurant sales results. Let me take a moment to review our same-restaurant sales comparison we face in fiscal 2009. In fiscal 2008, first quarter same-restaurant sales were exceptionally strong with outstanding traffic driving promotions at both Olive Garden and Red Lobster. We are not estimating that we will see similar performance this year given today’s challenging consumer environment. While Red Lobster is featuring similar promotions to the prior year, they will have less total media support this quarter and Olive Garden is featuring different promotions year over year with similar media support. In the second quarter, same-restaurant sales will benefit from Thanksgiving moving into the third quarter. Again, as a reminder, all of our restaurants are closed…

Thanks, Brad. I don’t think it’s a secret to anybody that follows the restaurant industry in general or casual and fine dining in particular that the last 12 months really have not been easy. And as Drew said, we do expect many of the challenges that the industry faced in our fiscal 2008 to continue into fiscal 2009. But with that said, we are very pleased with the performance we had in this difficult environment. We are also very pleased with the strategic progress that we’ve been able to make and that progress includes the acquisition integration of RARE for sure, but it also includes steps that we’ve taken to improve our culture, improve our employee experience, as well as the success we’ve had strengthening our leadership and our talent management, our brand building capabilities, and the brand support that we provide. As many of you know, and we’ve talked about it before, we have what we believe is a proven approach to the business. It’s an approach that combines strong brand management and great operations in order to build and sustain strong brands. We’ve been guided by that approach and with that, we think we are working on the right things at all of our brands, things that are going to drive current period success while better positioning us to capture what we think is a very attractive long-term opportunity in our industry. But behind all of that is what ultimately drives our ability to create sustainable leadership level value for our shareholders and that is great people. And we talk about it and a lot of other companies about it -- we really believe though that at every level of the organization, we’ve got the best team in the restaurant business. And so as proud as we are of our results, we are even prouder of the outstanding teams who have delivered those results. With the acquisition of RARE, again we’ve got the strongest leadership team we think in full service dining and we are going to continue to invest in the growth and development of that team. That’s part of our 2009 plan. That’s something that’s critical in any environment. And so as we look forward, we think we are well-positioned entering 2009. We are comfortable with our financial plan for the year and we are also excited about what we think we’ll accomplish strategically this year to make the company even stronger for the long-term. We do know we’ve run a little longer with the prepared remarks this time but we had a lot of ground to cover, especially given the dynamics that are out there in the macro environment and in the restaurant industry in general but with that, we’ll take your questions.

(Operator Instructions) Our first question this morning comes from the line of John Glass with Morgan Stanley.

Thanks very much. Just going back, Brad, to your guidance on the 52-week basis being 7% to 8% earnings growth, and you talked in February about 9% to 12% in a tougher operating environment. So is the change that the environment from February to now has gotten that much worse from a cost perspective? Is your view different on a top line? Can you maybe just reconcile what you talked about in February versus today?

John, you are actually right on both points. It’s a little bit of the tougher consumer environment, so when we talk about our same-restaurant sales performance, we are today seeing a little less there than what we talked about back in February, and the cost environment continues to be challenging. So we are pretty close to that but a little bit up from there, and so those are the real two driving factors that lead us to the guidance we have today.

Okay, and then my follow-up is that your buy-backs in 2009, around $200 million, I think were less than your longer term goal of $350 million to $400 million, so maybe -- is this a lower buy-back than maybe you initially had expected this year, given the operating environment? Or when should we expect you to be able to achieve the full potential of buy-backs longer term?

I believe the guidance that we had at the time was once we get two to three years out past the acquisition, we return to our normal buy-back amount. We do anticipate it will take us a couple of years to get our debt metrics solidly in the range that we want them to be, principally on adjusted -- debt to adjusted capital of about 55% to 65%, so we are moving close with this guidance to the middle of that range. And on a debt-to-EBITDAR calculation, where we’d like to get that closer to 2, we’re a little bit above that. So if we look where we are today, I’d say we’re probably a year, maybe just a little bit longer from returning to what I’d call more normalized share repurchase approach.

Thank you. Our next question comes from the line of Steven Kron with Goldman Sachs.

Great, thanks. Good morning, guys. A couple of questions; I guess first, Drew, if we look at Olive Garden, it seems to be the area where you might be seeing a bit more cost pressures there with the strong same-store sales margins, if I read the release correctly, seem to be kind of flat on a year-over-year basis. And in May, we saw the up-tick in pricing. I guess just to the pricing, if I look back this is I think the most price you’ve ever had in the Olive Garden menu, or at least over the last seven or eight years. And given the value proposition that this brand has, can you maybe talk a little bit about how you are taking that price, where you are taking it, and maybe the sensitivity to the guest on price?

Well, we are very sensitive obviously to maintaining Olive Garden's breadth of appeal for a variety of guests and a variety of occasions, and also maintaining value leadership for sure, in this environment or any environment going forward. Olive Garden has this year experienced more cost pressure than in the past. Earlier on in the year, it was more wheat. In the fourth quarter, April, May, it was more dairy and it did take some pricing in May. But it isn’t fundamentally different from what they took the prior year. Yeah, we look at taking pricing in two ways, trying to balance two things: one, maintain our relative positioning in the market versus our key competitors, and maintain broad price point accessibility; and second, balance that with the cost pressure we see and try and take enough pricing in addition with active cost management to cover the dollar inflation that we are seeing. And that’s what we’ve been able to do with Olive Garden and with Red Lobster, but the pricing isn’t meaningfully different from what they did in recent history.

Okay, and then Brad, to your comments --

I’m sorry, it’s one month earlier but the absolute amount is very similar.

So that 4 to 5 that we see in May is going to trickle back down?

Yeah, right.

Okay. And then Brad, on the commodity comments that you had where you are changing a bit to more hedging from contracting, if I heard your comments correctly it seems as though there aren’t the same level of availability, or at least at the attractive rates for long-term contracts, I guess. Which specific commodities are you referring to? And aside from the mark-to-market adjustments in the P&L, are there any additional costs associated with hedging as opposed to contracting that we should be thinking about?

Steve, what really drives that is many of our suppliers in this current environment don’t want to take the risk of contracting out for longer periods of time. We have -- so that puts some of the responsibility back on us to manage that. We have looked at what other companies are doing in our internal resources and availability and see that as an opportunity to keep us in a place that we’ve been in the past in terms of some certainty over our cost outlook. And so what’s unique is that though the accounting treatment for those cannot be matched up to the actual delivery of those goods, so we will contract those forward at the end of an accounting quarter, depending on the positions we have, the market price of those, those could be at a gain or loss but really represent receipt of future goods. As to the items that we are talking about, it really covers pretty much all of our key items outside of seafood -- you know, the beef, the wheat, a lot of those where there’s not direct correlation that you need for the stringent accounting requirements to use hedge accounting treatment there.

And I would just say in terms of added cost to take this approach, we don’t see a whole lot. I mean, we’ve got a pretty robust supply chain, very savvy buyers and on the treasury side, we also feel good about our corporate finance capabilities.

Thank you. Our next question comes from the line of Jeff Bernstein with Lehman Brothers.

Great. Thank you. Somewhat to the question earlier on Olive Garden, I’m just wondering -- if you look at Longhorn, you’ve seen some labor leverage against an actual down 3% comp, whereas something like an Olive Garden sees a strong 6% comp and has labor pressure. I’m just wondering if you can give additional color in terms of perhaps the benefits from the Longhorn labor model and how you see that best transferring such benefits to Olive Garden and Red Lobster. And then I have a follow-up.

Well, one of the benefits that Longhorn is capturing now is a wage management program that they’ve been using to help offset wage pressure inside the restaurant. It’s a more disciplined tip share program than they’ve had in the past and as that progresses and as we see results of that more broadly in more restaurants, that’s something we can look at in all of our restaurants, so there is the potential to see if that applies in a Red Lobster or an Olive Garden.

Okay, and actually just a follow-up on Red Lobster, you mentioned in your prepared remarks the remodel program for this year is continued focus. I’m just wondering if you can give some incremental color in terms of the number of units, perhaps your expected contribution to comp and/or sales lift.

The big objective, as I said earlier, is expanding appeal by bringing back lapsed users to the brand and there’s two fundamental barriers there -- appeal of the menu and appeal of the building and atmosphere, and the remodel program obviously is addressing the atmosphere. And they’ve developed several prototype, several remodel options that all try and bring in the best of what they like about their bar harbor prototype into their existing restaurants, the different design options have different investment levels on the interior and exterior. They’ve got four or five of those in test right now. For fiscal 2009, we expect to run a more refined and disciplined test in probably another 20 or 30 restaurants and really measure impact on the guest experience, impact on guest count growth, the ability to earn a return and by the end of the year, be prepared to begin to expand that. So we don’t really see it having a material impact on fiscal 2009 results but we do see it positioning us for more meaningful growth and expanded brand relevance beyond ’09.

Thank you. Our next question comes from the line of David Palmer with UBS.

Actually, this is Michael [Vanetti] for David today. Congrats on a good quarter. I think it’s becoming clear that the tax rebates have been providing a boost to the industry and to Darden, and I’m curious -- is it reasonable for us to think that there may be an opportunity to get more optimistic with the 2009 guidance once you see how sales hold up after the rebates? And then I have a follow-up.

I would say it’s probably not reasonable. What we saw in May -- it’s hard to gauge. We do get weekly Knapp-Track numbers and our best guess as we look at that data is probably in May a lift of maybe a point on a same-restaurant sales basis. But that data does not reflect the run-up that we’ve seen in June in some of the cost that consumers are facing, especially gasoline. And so we would say it’s still -- there’s still enough going on out there to be fairly cautious, would be our stance on it, and I think as Brad talked about our assumptions for ’09, our traffic assumption, you know, a click down, half a point or so from what we were talking about in February. And then on a net cost basis, I think in February we talked about net cost inflation of a point after active cost management and probably a point higher than that is sort of what we are thinking about for the fiscal year. So we are approaching what is a relatively uncertain environment with some caution, so I’d say that probably is a wise way to approach it.

That’s helpful, and then if I could just ask a quick follow-up; in last night’s release, you commented that despite the slightly lower revenue at Red Lobster, the operating profits were actually higher. I was wondering if you could give us a bit of detail on some of the efforts at that chain that are helping boost the profitability with the sales kind of flattish and then to slightly down, and then what your expectation is for I guess further out in the cost management at that chain this year. Thanks.

Red Lobster had a strong quarter with increased leveraging at the restaurant level. A lot of it was really driven by what happened on the food and beverage line. We’ve talked some about obviously for that brand their largest component is seafood, plus their promotional activity -- they use all those to their advantage and really just had the opportunity to take a flattish sales basis and good active cost management to increase returns at the unit level.

And I would say just -- I mean, Kim and his team have been really improving basic operations for the last four years, and so operating better with all the fundamentals and operating more efficiently, and that’s continued. I mean, they continue to try to take cost out of their operations that don’t matter to the guest.

Thank you. Our next question comes from the line of Larry Miller with RBC Capital.

Clarence, can I just follow-up on something you said? Did you say that you saw continued run-up in June? Because it sounded like you were taking a more cautious approach. Is that what you were saying? I was --

No, what I was saying was that what we saw in the industry, the point that we think might be attributable to some of the stimulus checks was May results, and that came before the most recent run-up in oil and gasoline. So it remains to be seen how that affects the stimulus dynamic that we saw in May.

Thank you. Thank you for that. Also, Drew, I was hoping to get some more color on some of those cost management areas that you briefly touched on. I think you’ve been running like $30 million or so in savings per year. Where can you guys get aggressive?

Well, you are right, roughly, in terms of what we’ve been able to take out of the business without negatively impacting the guest experience or the employee experience. And I think the best way to think about it is that we comprehensively look at our entire business. We look at food, we look at labor, we look at G&A expenses. Inside each business, we’ve got different -- we’ve got multi-function teams that work on identifying costs that have crept into the business and are no longer adding value and test taking those out. We’ve gotten better at managing costs related to workers’ compensation, slips and falls in restaurants, public liability, that sort of thing. So it really is sort of all across the business and we will continue to do that in fiscal 2009, looking at fundamental ways we can take cost out of how we structurally support the business going forward with -- while making sure that there’s no detrimental impact to the guest experience.

Thank you. Our next question comes from the line of John Ivankoe with J.P. Morgan.

Thank you. In the fiscal ’09 development guidance, you -- at least relative to my previous expectations, you took up Red Lobster, especially relative to ’08, and you took down Longhorn. You know, I just want to understand that -- I mean, it does seem a little bit counter-intuitive, from my perspective, given that Longhorn would probably benefit the most from more new unit penetration, especially as you try to achieve national advertising. So I guess that’s the first point. And related to that is what do you think needs to be fixed at Longhorn, not only at the brand level but at the store level, to really start driving comps at that business?

Well, we’re very confident -- remain very confident that Longhorn is going to be a significant growth vehicle for Darden. In the near-term, in fiscal 2009, net new unit openings are down modestly, which is more a reflection of organization capacity and focus on integration, as well as applying some of the Darden site selection tools to the business that didn’t exist before at RARE. It’s more a reflection of those sort of tactical adjustments, if you will, than it is a change in our thinking about what the ultimate unit potential is. We think going forward, we can open more aggressively than 20 a year once some of those dynamics are passed us. And what we have to do is take a brand that we think is fundamentally sound in a very big category, in the steak category, that’s got solid operations and strengthen some of the brand management fundamentals. It’s not unlike where Red Lobster was a couple of years ago. We need to broaden appeal of the business and really are looking at menu and building and what the brand stands for. And that’s why we’ve worked so hard over the last couple of months to strengthen the brand team at Longhorn. There’s a new head of marketing, Terry Stanley. There’s a new head of culinary and beverage with Kurt [Henkens]. There’s a new head of consumer insights, Brad [Marcunis]. We’ve brought on Gray Advertising to help with the repositioning work in the advertising. As you know, Gray has been a valued partner at Olive Garden for some time. We’ve brought on Zenith Media to help us look at how we purchase and traffic spot media more efficiently and some other innovative opportunities to expand reach there in the near-term. But that’s fundamentally what has to happen -- building on a solid operations foundation, look to broaden relevance with particular focus longer term on menu and building. I think some of the other things I mentioned around advertising and promotion can start to have an impact more mid-year in fiscal 2009.

And actually, that is a question -- when might Longhorn actually receive national cable advertising? Does it begin to make sense to start investing ahead of the curve, especially if unit development is going to be increased in the out years?

It does and very broadly speaking, there’s kind of three ways to think about where Longhorn is today. They are in roughly 25% of the U.S. with all spot television. When you get to about 40% roughly, 35% or 40%, then you can do the national cable that you were talking about, so national TBS, national TNT, Lifetime, those sorts of things. When you get to about 55% or so, that’s when you can be on network TV across the country. And one of the reasons we decided to partner again with Zenith Media is so that we can work with our development team in Zenith Media to coordinate site selection so that we can get to those penetration levels as quickly as possible. It won’t happen in fiscal 2009 for sure but that’s something the team is working on. We’ll have better visibility on that as we go forward.

Thank you. Our next question comes from the line of Matthew DiFrisco with Oppenheimer.

My question is pertaining to the development and the availability of those sites. Where do you stand as far as historically comfort zone of being locked in on those, given the overall slowdown in the economy and the slowdown in retail and the anchor mall tenants not opening up their stores as much? Do you have the pipeline that you used to in years past, or are you compensated by sort of cushioning in it, so you feel good about that target, in case a couple of those fall out? And then I have a follow-up as well.

We feel very strong, very confident in the strength of our development pipeline. There are a number of dynamics going on now for sure. Some developers are pulling back but at the same time, some of our competitors are slowing down in terms of their unit growth. A company like Darden with brands like Olive Garden and Longhorn and Red Lobster, they are expanding. In addition to what Gene talked about in specialty retailing is even more attractive now. So we feel very confident in the site pipeline we’ve got for 2009 and as we look at 2010.

Okay, and then also as far as looking at -- a couple of people have been asking about the sustainability it sounds like from the May comp. I was curious -- you mentioned a couple of things, just to rehash -- pricing looks like it’s going to cycle off a little bit as we go through June and then also I think Clarence, you mentioned that you don’t feel like you saw the full effect of the rise in gas, although I think gas really did rise in mid-May, so I think some of May you already experienced that. Is there anything else going on as far as the June comp? I know you mentioned the advertising. It looks like dollar wise Red Lobster was going to be down in the first quarter and Olive Garden was going to be flat with the year-ago, so is it a conservative same-store sales outlook and possibly better margin management in 1Q is how we should look at it?

No, I think Brad’s comments are probably about as far as we are going to go. We talked about, I think Brad did as he looked at quarter by quarter, we are certainly up against a stronger quarter year over year in the first quarter in terms of comps with Red Lobster in particular, but also Olive Garden. And then I think he mentioned the second quarter, you know, more muted last year and so we feel that they were comping against a weaker quarter and we feel better about that as a result. So we talked those dynamics but we don’t want to really get into month to month, but on a quarterly basis that’s sort of where we are.

Thank you. Our next question comes from the line of Bryan Elliott with Raymond James.

Thanks. I wondered if you could give us a little help with some comments on how to quantify all of the calendar shifts that Brad talked about earlier.

I’d say at this point we probably don’t want to go much beyond the comments that we made there because we are projecting pretty far ahead on some finite details there, but I think that the direction that I shared would be something that you definitely want to incorporate as you try to look at expectations for each quarter.

All right, thank you. And a follow-up on all the May questions I guess is since you haven’t really highlighted anything unusual about May, it just was just a month of particularly strong market share gains -- is that how we should look at it?

Well, there were two unusual things about May -- one was double pricing in the month of May for Olive Garden, which has already been commented on. And then second, there was a year to year shift in Olive Garden's promotion that featured a price point from the first quarter last year into the fourth quarter and the year we just finished. So there was a promotion mismatch for Olive Garden as well.

Thank you. And our next --

We’ve got time for one more question here. We know the -- we’ve run past the bottom of the hour, so just one more and then we’ll cut it off from there. Thanks.

Certainly. Very well then, that last question comes from the line of Joe Buckley with Banc of America.

Thank you. On one set of questions on Red Lobster, you mentioned lapsed customers a few times and could you talk a little bit about that, how you define that? Over what period of time might these customers have lapsed? And then how you plan to get them back in? Also with Red Lobster, you mentioned 10 net new openings skewed toward the back half of the year, which implies you perceive yourselves moving into phase 3 I guess of the brand management. And just talk about what gives you the confidence that you are at that point, given comps that are better than Knapp-Track but still pretty lackluster.

Well, technically the definition of a lapsed user is someone who hasn’t been to the brand in a year. More generally, the way we think about it is over the last several years, we’ve lost people in the Red Lobster -- users of the Red Lobster franchise who directionally tend to be a little higher income, a little higher education and a bit more brand sensitive, so to bring those people back at the same time, keeping our core guest in the franchise, to bring those users back, we need to make the menu more appealing and we need to make the restaurant atmosphere, the building more up to date. And those are the things that our testing is showing is beginning to work, so the addition of today’s fresh fish, for instance, today’s fresh fish advertising in support of that this year. Some of the somewhat more culinary forward dishes that the brand is developing, the way people have reacted, including lapsed users, to the bar harbor prototype and what we are trying to do to take design elements of that and put it into the remodeled restaurants -- all of those things are giving us a good feel that we are eliminating the fundamental barriers that have kept lapsed users away but not doing anything to diminish the appeal to current core users. And our research shows that as we dissect the user base, we are maintaining share with our current core guest but attracting more of these lapsed users. We need to do much more of it for sure, so we are not completed with that by any means, but we are confident that the strategy is right, we are making progress. And given the lead time of development, we thought it was appropriate to enter phase 3, as you said. And all of this is going on top of an operations foundation and unit economics that are substantially stronger today than they were two years ago. So unit level returns at Red Lobster fundamentally are where they need to be for us to open value-creating new units, so long as we can maintain traffic.

I think the final point, Joe, is as we think about these, these are 30-year investments. We’ve got to make some forecasts about the future for sure and so the fact that Red Lobster is ending the year where they are three points ahead of the industry gives us a lot of confidence as we forecast what we think the industry is going to be and a positive delta to that, not necessarily three points but a positive delta to that long-term industry forecast.

Okay, thank you. And just one more for Brad -- Brad, you mentioned the SG&A being boosted a little bit and it wasn’t clear to me if you were spending the benefit of the 53rd week on some SG&A initiatives, including some Longhorn focused initiatives. Can you just clarify if that’s what you are doing or if we should think of the 53rd week as adding $0.05 to reported EPS?

You are correct on both accounts. The 53rd week does add approximately $0.05 to our EPS but above and beyond that, because of the leveraging that we get because of that 53rd week, that additional leverage of about $0.04 EPS, we are investing and most of those costs will appear on the SG&A line.

Thank you. And that does conclude our question-and-answer session. Gentlemen, did you have any closing comments today?

We’d just like to thank everybody for joining us this morning. We apologize for going a little long and we hope you found that what we had to say was worthwhile. We understand there were some technical difficulties earlier in the call. We apologize for that. Again, if you have any questions, and we know I’m sure you do, please call us here in Orlando and we can respond to those. But thank you very much again for joining us. We hope everybody has a safe and happy summer and we look forward to talking with you again in September.

Thank you very much. And ladies and gentlemen, this conference will be available for replay starting today, Wednesday, June 25, at 10:30 a.m. Eastern Time, and it will be available through Friday, July 25 at midnight Easter Time. You may access the AT&T executive playback service by dialing 1-800-475-6701 from within the United States or Canada, or from outside the United States or Canada, please dial 320-365-3844, and then enter the access code of 930487. Those numbers once again are 1-800-475-6701 from within the U.S. or Canada, or 320-365-3844 from outside the U.S. or Canada, and again, enter the access code of 930487. And that does conclude our conference for today. Thanks for your participation and for using AT&T’s executive teleconference. You may now disconnect.