Welcome, and thank you for standing by. Welcome to the Fourth Quarter Earnings Conference Call. [Operator Instructions] Today's conference is being recorded. If you have any objections, you may disconnect at this time. Now I'd like to turn today's meeting to Matthew Stroud. You may begin.

Thank you, Rebecca. Good morning, everyone. With me today are Clarence Otis, Darden's Chairman and CEO; Drew Madsen, Darden's President and COO; Brad Richmond, Darden's CFO; 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. Forward-looking statements are made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. 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 to reflect events or circumstances arising after such date. We wish to caution investors not to place undue reliance on any such forward-looking statements. 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 food safety and food-borne illness concerns; litigation; unfavorable publicity; risks related to public policy changes and federal, state and local regulation of our business, including health care reform, labor and insurance costs; technology failures; failure to execute a business continuity plan following a disaster; health concerns including virus outbreaks; intense competition; failure to drive sales growth; failure to successfully integrate the Yard House business and the additional indebtedness incurred to finance the Yard House acquisition; our plans to expand newer brands like Bahama Breeze, Seasons 52 and Eddie V's; a lack of suitable new restaurant locations; higher-than-anticipated costs to open, close or remodel restaurants; a failure to execute innovative marketing tactics and…

Thanks, Matthew. And I'll start by briefly sharing at a very high level our assessment of our business, including our performance last year, fiscal 2013, and what we expect this year, fiscal 2014. Then Brad, Drew and Gene are going to provide more detail on both years and on the fourth quarter last year. Now as fiscal 2013 unfolded, I think many of you know that we moved with added urgency to address the same-restaurant traffic erosion we've been experiencing since the recession started. And during that time, our traffic erosion had been much more muted than the erosion in the industry, about half as much of a decline as the industry on a cumulative basis. But in the fourth quarter of fiscal 2013, our same-restaurant traffic decline exceeded the industry's. And when that continued into first quarter this year, we took action on 3 fronts. First, we began to match the competitive promotional intensity around affordability, and that included being more aggressive with our offers and our advertising messages and with our use of tactical support like daily and weekly digital specials. Second, we began to more aggressively address affordability in our core menus, and that included launching with some heavy media support, a new Red Lobster core menu that has a significant affordability component and then also accelerating introduction of new, more affordable core menu offerings at both Olive Garden and LongHorn Steakhouse. And then third, we increased the resources dedicated to reshaping our guest experiences to respond to what guests want beyond affordability, and that meant reorganizing our marketing and operations group and ramping up investment in better digital and other capabilities. Now reorganizing these functions, key functions, marketing operations involved shifting many tenured leaders into new positions. And because the intent of the reorganization, reshaping the…

Thank you, Clarence. In the fourth quarter, Darden's total sales from continuing operations increased 11.3% to $2.3 billion, and blended same-restaurant sales for Olive Garden, Red Lobster and LongHorn Steakhouse increased 2.2% from strong same-restaurant traffic gains of 3.2%. For the fourth quarter, U.S. same-restaurant sales increased 3.5% at LongHorn Steakhouse, 3.2% at Red Lobster and 1.1% at Olive Garden. And we also saw continued same-restaurant sales gains in our Specialty Restaurant Group with 2.3% same-restaurant sales growth on a blended basis. Fourth quarter same-restaurant sales increased 4.5% at Capital Grille, 1.0% at Seasons 52, 4.3% at Eddie V's but declined 1.7% at Bahama Breeze. Now let's turn to the margin analysis for the fourth quarter. Food and beverage expenses were 16 basis points higher than last year on a percentage of sales basis. The increase in food and beverage expense is attributable to menu mix changes and promotional offerings. Fourth quarter restaurant labor expense were 74 basis points higher than last year on a percentage of sales basis due to lower year-over-year check average and wage inflation. In addition, I should note that restaurant labor expenses were $8 million or $0.04 of EPS, higher than we expected coming into the quarter. That was largely because of less-than-expected productivity as we reversed out some of the early year model changes at Red Lobster that did not work as planned and because the Lobsterfest menu had some additional complexity. We believe that we are past these issues and labor at Red Lobster is coming back into standard this quarter. Restaurant expenses in the quarter were approximately 100 basis points higher than last year on a percentage of sales basis because of the impact of adding Yard House, about 38 basis points there. Since with a restaurant base that's 100% leased, it…

Thank you, Brad. And this morning, I'll briefly comment on the fiscal 2013 fourth quarter performance at each of our 3 large casual dining brands, as well as their fiscal 2014 strategic priorities. But for competitive reasons, I'm not going to discuss any of our specific fiscal 2014 tactics in detail. Olive Garden same-restaurant guest counts increased 2.3% during the fourth quarter, and this performance exceeded our estimate for the industry, excluding our brands, by approximately 340 basis points and represents a significant improvement competitively compared to the third quarter, when Olive Garden trailed the industry on traffic by 20 basis points. Same-restaurant sales grew 1.1% and exceeded our industry estimate by approximately 20 basis points, which also represents a significant trend improvement competitively compared to the third quarter when Olive Garden trailed the industry by 260 basis points. Red Lobster same-restaurant guest counts increased 4.2% during the fourth quarter, and this performance exceeded our industry estimate by approximately 530 basis points and represents a significant improvement competitively compared to the third quarter, when Red Lobster trailed industry on traffic by 70 basis points. Same-restaurant sales grew 3.2% and exceeded our industry estimate by approximately 230 basis points, which also represents a significant trend improvement competitively compared to the third quarter when Red Lobster trailed the industry by 510 basis points. Longhorn same-restaurant guest counts increased 3.9% during the fourth quarter, and this performance exceeded our industry estimate by approximately 500 basis points and represents a significant improvement competitively compared to the third quarter when Longhorn exceeded the industry on traffic by 120 basis points. Same-restaurant sales grew 3.5% at Longhorn and exceeded our industry estimate by approximately 260 basis points, which also represents a significant trend improvement competitively compared to the third quarter, when Longhorn trailed the industry by…

Thanks, Drew. The Specialty Restaurant Group delivered solid performance in the fourth quarter, growing sales 65%. This growth was a result of our 59 net new restaurants across the group, which includes 44 Yard House restaurants, and blended same-restaurant sales growth of 2.3%. Our sales growth resulted in significant operating profit growth during the quarter. Total annual sales for the group exceeded $980 million, that's an increase of more than 58% over the prior year and contributed to 66% of Darden's total annual sales growth for the year. This sales growth was driven by annual blended same-restaurant sales growth of 2.1% and our additional 59 net new restaurants. With the acquisition of Yard House and strong same-restaurant sales growth at Capital Grille of 3.3%, the group's average unit volumes have grown 5% to $6.7 million. We're on track with our three-phase integration -- we're on track with our three-phased integration of Yard House. First, people. We've retained all key operational leaders, which ensures continuity, and these leaders will continue to run the brand. Second, we anticipate full supply chain integration by the end of first quarter fiscal 2014. Lastly, we're in the process of migrating all transactional activity to Darden systems and expect this to be finished in late fiscal '14. This approach enables us to capture meaningful synergies. The Eddie V's integration is complete, and we exceeded our synergy targets. Additionally, we've opened our first restaurant since acquiring the brand in Tampa, Florida, and we're very pleased with its initial performance. As we enter fiscal 2014, our key priorities remain effectively managing accelerated new restaurant growth while maintaining operational excellence in existing restaurants and ensuring our brand and business models continue to improve and remain vibrant. We will also continue to focus on taking advantage of our strong culinary and beverage expertise to remain nimble and dynamic and drive sales, which involves responding to favorable costs and supply developments that we see on various products from time to time to provide compelling special offers to our guests. We will also continue to add new on-trend menu items and seek ways to improve our current offerings. Finally, of course, we'll remain as focused as ever on improving restaurant-level execution, further elevating the guest experience appropriately in each of our brands. In fiscal 2014, we plan to open 25 to 27 net new restaurants, including 7 to 8 Season 52s, 7 to 8 Yard Houses, 4 to 5 Capital Grilles, 3 to 4 Bahama Breeze restaurants and 1 to 2 Eddie V's restaurants. We're confident that the Specialty Restaurant Group is working on the right things to achieve our long-range growth targets, and we're well positioned to take full advantage of all that Darden has to offer, including robust supply chain, information technology, consumer insights, finance and other capabilities, and make significant contributions to Darden's sales and earnings growth. Now I'll hand it back to Brad for the fiscal 2014 financial outlook.

Thank you, Gene. For -- our outlook for fiscal 2014 reflects the resilience of our business model in the face of what we believe will be a continuation of what has already been an extended period of well below normal economic growth. In this environment, in fiscal 2013, we generated $950 million in cash flow from operations. In fiscal 2014, we anticipate even stronger cash flows from operations driven by a combination of same-restaurant sales growth, new unit growth and improving underlying operating margins. And after investing appropriately in both regaining momentum and expanding our businesses, we plan to return additional capital to shareholders through an increase in our dividends, which we announced today. In fiscal 2014, our outlook is based on a combined same-restaurant sales growth for Red Lobster, Olive Garden and LongHorn Steakhouse of between 0 and plus 2% and combined same-restaurant traffic growth of between 0 and 1%. This includes pricing that is estimated to be approximately 1%. Of course, we will be both above and below these ranges from month-to-month and quarter-to-quarter, depending on promotional calendars, holiday shifts and changes in consumer sentiment. Looking at unit growth, new restaurant plans we outlined means that we expect a net new restaurant increase of 80 restaurants, which is 3.7% unit growth on our current base. And with the timing and mix of our fiscal 2013 openings, this will translate into 4.5% sales growth from new restaurants. Given our same-restaurant sales assumptions, new restaurant expectations and an incremental quarter of Yard House's sales, we anticipate that total sales increase for the year will range from between plus 6% to plus 8%. Excluding the incremental quarter of Yard House sales, the total increase would between plus 5% and plus 7%. With lower new unit expansion, we expect capital spending for…

Thanks, Brad. As I said at the outset, we're confident that we'll return to same-restaurant traffic growth and to industry-leading same-restaurant sales growth in fiscal 2014. And again, our confidence is based on the steps we've already taken, the momentum we're seeing, what we're doing to build on that momentum. And again, we know that renewed same-restaurant traffic and sales growth, coupled with solid new restaurant growth going forward, is the key to returning to competitively superior shareholder value creation. So with that, we will turn to your questions. Thank you.

[Operator Instructions] Our first question on the phones comes from Michael Kelter with Goldman Sachs.

Clarence, you said that growing same-restaurant traffic was Darden's top priority. And I guess I'm wondering, in what length are you willing to go to achieve that goal? Would you actually be willing to sacrifice and potentially rebase your restaurant-level margins lower at any or all of the concepts to achieve traffic growth, if it came to that?

Yes, Michael. We do believe that same-restaurant traffic growth is critical. I mean, that ultimately is the best measure of brand health. And I mentioned and we talked about at our Analyst Meeting that we've seen deterioration in same-restaurant traffic in the industry and at our brands, and so we talked about the period from fiscal 2008 -- our fiscal 2008 through fiscal 2012 with industry decline cumulatively of 20% and our brands declining about half that, 10%. And that's an issue we've got to address. And so we need to do what we need to do from a guest experience perspective, both affordability and the things that we're delivering, to really reverse that trend for our brands and get back same-restaurant traffic growth. And to the extent that, that puts pressure on restaurant-level margins, that's pressure we're willing to accept. Now we've got restaurant margins -- restaurant-level margins that are very high at our brands from a competitive perspective, so we've got some room there, especially at Olive Garden, where the restaurant-level margins even with some of the erosion we've experienced recently continue to be the highest in the industry, as high as Capital Grille. And so yes, we're prepared to accept some pressure on margins at that level to really renew same-restaurant guest count growth.

And then maybe as a follow-up specific to Olive Garden and in the quarter. Sales were up 5% with positive same-store sales and then unit growth, but operating profit dollars were actually down as per the release, and profit percentage was down. How much was Olive Garden profit percentage down? And in terms of the operating profit dollars being in decline, I mean, what kind of same-store sales do you need given the investments you're making for that to be a positive number? Or should we just expect that dynamic to continue for a while?

Yes. I will let Brad follow up. But the -- we don't get into specifics. But the dollars were down single digit on a percentage decline basis. So we're not talking about dramatic differences. And the operating profit as a percent of sales reflects that. Again, Olive Garden's margins are pretty high. And so we have some room there.

Yes, and I think as you look at our business model what's capable of going forward, I think 2014 is a good example that when you set aside the incentive and ACA-related costs, we're talking about on a check growth of around 1%, pricing of 1%, that we're able to very modestly grow margins. And so yes, we're some around that 1% or maybe even slightly less that we need in pricing given the improvements that we made over time in our cost model, somewhat aided by the transformational cost initiatives that we talked about that allow us to price at a little bit lower level and maintain the margins that we have today.

And I would say that, that number that Brad just gave you, excluding those big adjustments, also is a year where we're seeing pretty significant beef inflation that we're not pricing for at Longhorn. And so that has put some downward pressure as well.

Our next question comes from Brian Bittner with Oppenheimer & Co. Brian J. Bittner - Oppenheimer & Co. Inc., Research Division: A question here is on margins. On this type of comp growth that you had this quarter, I would have expected less deleverage. And the restaurant-level margin deleverage was pretty similar on a year-over-year basis to last quarter when comps were really down almost 5%. Both labor and other costs really spiked pretty dramatically on a same-store basis in the quarter. So there was much more than a negative margin mix dynamic going on. It seems as though there's actually a lot of new costs that are entering the model. So if you could just talk of a little deeper on what those are and how you're going to work to improve those dynamics, because I know, Clarence, you keep saying there's a lot of room, but we want to see margins -- try to see what you guys can do to get margins to go higher even despite the fact that they are so high to start.

Yes, I would say -- and then Drew can follow-up. I think Brad dimensionalized one of the things, which is compared to where our expectations were entering the quarter. We had labor at Red Lobster. It was about $8 million higher than we thought, and that had to do with a couple of things that he mentioned. One was a little bit more complexity in the menu for Lobsterfest than we anticipated. And the other factor that Brad mentioned was that we were making some adjustments to the model through the year to reverse out some changes that we've made. And there was reduced productivity as we went through that transition. So those we think of as onetime in this quarter, and so that was part of it. And then on one of the other line items, we talked about the fact that we do have to mark-to-market some employee benefit plans that are basically securities based, fixed income securities and equities. And so that takes down operating margin, but those are hedged on an after-tax basis. And so we do get a benefit at the tax level. So there's some geography there. Brian J. Bittner - Oppenheimer & Co. Inc., Research Division: Now was that in the labor line? Or was that within the 4-wall line? Or was that in G&A?

That's -- it's in both places.

Depends on which employees. So there's -- some of that -- some of those benefit plans are for restaurant managers and multilevel supervisors, and some of them are for others, and so it winds up in both places. Brian J. Bittner - Oppenheimer & Co. Inc., Research Division: Okay. And then the last question is just the guidance. So it's a little below what the initial outlook was at the Analyst Day. I'm just wondering, what's really changed in your thinking since? Because I assume comp sales outlook has not gotten worse, maybe, in fact, gotten a little bit better since then. So what is it that's really surprising you that caused you to, on a year-over-year basis, slightly bring down that outlook?

Yes, I'd say 2 things. I mean, one is the one that Brad mentioned, which is given the production issues that cropped up in some of the Asian shrimp farms, food inflation costs, about 50 basis points higher, I think, than we were thinking when we talked to you in February. Now solutions have been developed for that, and so we would expect that the farms will implement those solutions and this is temporary, but the fact of the matter is that we will see that in the first half of the year. And then the second is we talked at the Analyst Meeting about blended same-restaurant sales growth for Olive Garden, Red Lobster and LongHorn Steakhouse of between 1% and 2%. Our current thinking is a broader range. So we're talking about between flat and 2%. And so although we had a very strong fourth quarter from a comp perspective, the industry was really pretty sluggish. And so we think at this point in the year, as we build plans, we need to be conservative because we have seen a cycle over the last several years where we had some encouraging spring followed by some challenge in summer into the fall, and we have to be prepared for that.

Our next question comes from Alvin Concepcion with Citigroup.

In terms of the new core menus at Red Lobster and Olive Garden, you previously talked about that it would take some time for those to gain traction with consumers. Did you begin to see that happen this quarter? Or have we yet to see that happen?

No, we are beginning to see it have a positive impact on how our guests think in terms of their perception of the brand, particularly around value, and how they're beginning to behave, which we're seeing in traffic. And 2 of the best examples would be the way core menu at Red Lobster has helped address the need for affordability, particularly with their 4-course offering. And a big barrier for Olive Garden to broaden appeal is the need that many guests have for lighter, fresher dishes there. And they've introduced Lighter Italian Fare section that didn't exist and now is getting close to 10% preference. So both of those are having meaningful impact. We're going to build on those things, make them better next year and also address, as I mentioned earlier, the need some other guests have that we think are broad and important for us to get after.

Great. And it's encouraging to see that you're back on track for traffic growth. I mean, can you give us any color as to the type of customers you're seeing coming into the stores? I mean, are they coming in from the lower income groups that you wanted? Are they customers you lost that are now coming back? Or are they just existing customers that are coming back more often because of the changes?

Yes, our sense is that given our emphasis on affordability, particularly in promotions and core menu, that we're probably getting a little more impact from the guests that are the most financially constrained and may have cut frequency in the past. But increasingly, we're doing more to let our guests know about other important changes we've made to the experiences that they can get. So I mentioned Lighter Fare at Olive Garden. We've advertised that a couple of times. We'll do that again going forward. So I think increasingly, we're going to see more balance in the guest count growth that we get not just from those guests who are really under financial pressure and need affordability.

Our next question comes from Jeff Bernstein from Barclays.

Two questions as well. First, kind of talking about the discounting side of things and you've talked about matching your competitive promotional intensity of -- just from a peer group perspective. I was wondering if you can do that profitably. And perhaps it would help with a little bit of history because I know -- perhaps close to a decade ago, you guys were very aggressive on the promotional front at Red Lobster and Olive Garden and then really tried to shy away from that because you felt the consumer really end up just coming because of the deal. And I know you held with that kind of more recent thought of less discounting was better. Now that you're being more aggressive again, is it because your hand is being forced or do you think there's maybe a better dynamic versus the prior go around, whether it cost or line item leverage or whatnot? Kind of how do you think about the driver of that need to be more promotional?

Yes. I would say and we talked about it a little bit at our Analyst Meeting. I mean, we've got to remember that we've got a highly segmented guest space. And so broadly appealing brands, Red Lobster, Olive Garden, LongHorn Steakhouse, they bring in a lot of different kinds of guests. They're in the segment of the guest space that has a fairly significant need for affordability, and so we are responding to that. And that is a heightened need compared to where they've been historically given the financial pressures. Those financial pressures include underemployment, stagnant wages. They include other spending priorities from cell phones to some other things. And so for sure, we're being more aggressive promotionally from an affordability perspective because of those guests. And that's really primarily what the promotions are designed for. We're also responding to the needs of those guests on our core menu, trying to add more affordable items. But then we've got a lot of other guests where affordability really isn't the issue. They certainly want value. And they are looking for fair prices, but they are looking for an even stronger experience on a lot of different levels, from quality of ingredients to sophistication of offerings, and we're responding to those as well. But promotionally, I'd say, yes, we tilted promotionally to really talking mostly to that group of guests that are looking for affordability. And when you compare that to history, that's a switch. Our features, our promotions across the year probably had a little bit more balance between price promotions and non-price promotions, but that reflects sort of the state of the economy and where the consumer is.

And I'd say going forward, we've got an opportunity to do it more effectively, to do it smarter. So we implemented some new tactics, promotionally that we hadn't used before, largely starting in the second half of fiscal 2013. And we've got a lot of great learning on how to do that in ways that visibly provide guests the affordability assurance they're looking for but also put us in a better position to do that profitably. So that learning is going to be reflected in how we construct and how we communicate and how we present those offers during fiscal 2014.

Understood. And then just, Brad, perhaps as a follow-up or, Clarence, you talked about the dividend payout increase, one obviously yield being industry-leading. But it sounds like you're reconsidering the payout ratio, pushing it above kind of your 40 to 50 historical. But you kind of alluded to share repurchase, which I believe in the past, you've told us we shouldn’t have expected any in '14 anyway because of the Yard House acquisition. But kind of over the next few years, should we now be assuming less and less if any share repurchase? Or how do we think about that? And then how do you balance the payout or dividend with the kind of [ph] reduction or leverage?

Yes, we would expect to have a focus over the next year or so on paying down debt. So we've got 2 important leverage measures that we look at. One is adjusted capital, adjusted debt to adjusted capital ratio. And there, we're sort of inside the range that we target. But when we look at our coverage ratio, our EBITDAR coverage ratio, we're at -- we're above the range that we target, and so we're looking to pay down debt and get ourselves back in the range on that particular measure. We would expect to do that reasonably quickly given the cash flows that we've got. And then we have decisions to make about how to allocate the cash that we've got between dividends and share repurchase. We will have a balance between the 2. But compared to where we've been historically, that balance is going to tilt a little bit more toward dividends.

Our next question comes from Andrew Barish of Jefferies. Andrew M. Barish - Jefferies & Company, Inc., Research Division: I guess just sticking on the promotion and affordability focus, the mix numbers in the fourth quarter were down anywhere from 2% to 4%, depending on the brand, and you're implying kind of flattish mix for '14. Maybe that could be addressed. And I think Drew mentioned that you are refining some of the promotional stuff. So did the fourth quarter reflect maybe a push a little bit too much on price? And if you can kind of just round out some of those comments for us, please.

Yes. No. The fourth quarter this year is really -- second half of fiscal 2013 really saw us become more aggressive with promotional tactics that we hadn't used in the past. And what you saw in menu mix each month at Olive Garden and Red Lobster was a year-over-year comparison of very different types of promotions and very different types of offers. And that year-over-year comparison is going to abate next year because we'll be wrapping on these constructs. But in addition, we've got a clearer sense now of what compelling affordability looks like to our guests and how we can design that and communicate it in a way that is less dilutive to check and margin. And that's really -- the combination of those 2 things is what I was referring to. And for instance, we started these constructs at Olive Garden with a 2 for $25 in July a year ago, for instance.

Next, we have John Glass, Morgan Stanley.

First, Brad, if I could ask you to maybe help us understand the cash flow for '14. You said cash from operations was going to be strong or stronger this year than last year. Maybe I heard that incorrectly, but you're guiding to lower net income. So can you walk down what do you think cash from operations is? And is there a variance from like working capital or something? And just how much cash after that less CapEx do you think you have left for that debt paydown and/or share repurchase?

Yes. As you mentioned earnings -- the earnings cash flow is going to be roughly the same as this year. We talked -- actually, now we're entering the third year of the supply chain transformation. We're on the front end of that. We had to use some working capital to enable the P&L savings that we've gotten. That has reversed. You see that this year, and it continues into next year. And as we open new restaurants they provide working capital to us because we collect our sales pretty much daily and pay on terms. So those are what enables us to look at our operating cash flows, and that will continue to grow. In terms of the balance there, we've talked about the CapEx for next year being in the range of $600 million, $650 million, which is down pretty significantly from our expectations that we had for fiscal 2014 from where we were a year ago. Those are the adjustments that we've made to be more responsive to the marketplace, as well as to ensure that we maintain a strong financial position. And so you look at operating cash flows, it would be, call it, roughly in the $1 billion range, CapEx somewhere in the $600 million, $650 million and dividends that are $285 million to $290 million range. So that leaves that excess cash that would be applied towards reducing our debt and improving our ratios there.

Okay, and just the math that I got is about $80 million to $90 million of excess. So it's not a significant portion. I mean, it's a -- that's okay.

Not a large portion, but we're still growing our capital base. So we focus more on the ratios. So the leverage ratios and coverage ratios. So you do see improvement beyond just the debt reduction that you're talking about.

And can you speak a little bit -- so conceptually, you've raised the dividend payout ratio or dividend, and therefore, dividend payout ratio to a level that's I don't think typically seen in capital-intensive businesses, 70%. I know you talked about increasing your target, but I'm not sure why that is if that's just a convenience because you've increased your dividend. Usually, when you do that, it signals a reduction to capital intensity of the business significantly. So can you maybe think about -- help us think about how you get your CapEx budget in decline now and in '15 and '16 declines versus the '14 number? Or you're just going to raise the payout ratio and keep that more level, and therefore, you just -- it's a change on how you think about how you use your cash?

I think Brad talked about the fact that we are -- the way we think about it, I guess, is that we are less capital-intensive as our base of restaurants continues to grow and generate incremental cash that comes from the new restaurants and the percentage of new restaurant growth on that base declines, we are less capital-intensive. And so we've talked about the fact that we like the portfolio we have. We don't expect to add brands. And so we would see that percentage growth declining a little bit.

I think another way to dimensionalize that is our CapEx is -- as we look forward, we talked about our growth expectation is near its peak level. Unit growth is in the range we want it to be at. We have -- Red Lobster will be finishing up the remodel there this fiscal year, pretty much essentially getting it done. We will roll into Olive Garden and the remodel there. So CapEx really isn't going to be expanding, but yet the business is growing. Any improvement in same-restaurant sales. We have strong leverage of that. So that would generate additional cash flows as we look beyond the current year.

Yes. Thank you for saying that better. But that's the gist of it.

Your next question comes from Jeff Farmer with Wells Fargo.

Unfortunately, one more on promotions, just getting a little bit more color. So you touched on this a little bit. Over the last 18 months, it looks like Olive Garden has introduced a bunch of things. You mentioned the 2 for $25. I think that was followed by the 3-course Italian at $12.95 and the Buy One Take One at $12.95. The question really is are you set with that collection of so-called value-based promotional constructs? Or do you think we should expect to see more coming? And then as part of that, can you just sort of give us a little bit of an update in terms of your efforts to maybe theoretically reduce the duration or time periods of some of your promotional windows?

Well, we don't want to be too specific about the promotional constructs were going to use. You're correct that in the fourth quarter, those are the 3 promotions that Olive Garden ran. And they all address affordability, and they all helped us regain significantly better same-restaurant traffic. We also learned importantly how we can do those promotions in the future better for our guests, how we can do them better for our in-restaurant operations team, which is important learning we're taking into next year. And to tie back to a question that was asked earlier, those are all wrapping on promotions that were very different last year like Passion for Parmesan that didn't have any price point in it and led to a negative menu mix that was referenced. So we clearly are going to continue to focus on affordability in promotions, but it's not all we're going to focus on given the range of guests that we've got and the diverse needs that they've got.

And then just the duration of the promotional windows, again, thinking about maybe shaving a week or 2 off on some of them?

Yes, again, that's a level of specificity that, for competitive reasons, we don't want to get into.

Our next question comes from Matthew DiFrisco with Lazard.

I have a question, but also, I just want to clarify. I think it was said earlier about the guidance for the comp, 1% coming from price, 1% coming from traffic. I'm curious, is that -- that's an annual outlook. But should the cadence be that the mix should continue to be slightly negative to start the year and then get to flat maybe on a positive mix in the back half to get you to that sort of net neutral on the mix front?

I think directionally that, that's accurate because of the timing of the promotion constructs that we introduced in particular, which really started more in the second half.

And also, Matt, we talked about traffic being between flat and up 1%. [indiscernible] 1%, which is the top of the range we gave.

I think the mic was just far away. I think that was Clarence talking about traffic being flat?

I'm sorry. I said we talked about the traffic range being between flat and up 1% as opposed to 1%, which is the top of that range. We'd love to get hit the top of that range. But right now, our thinking is between flat and up 1%.

Okay. And then also, I guess at the conference back in February, there was some discussion about the dividend payout ratio and that some credit agencies also look at that as a -- it factors into their overall rating. Are you -- is there a level that you can sort of -- are you not so focused on the credit rating necessarily as you might be more so on maintaining dividend growth? Or can we do both evenhandedly? Can you expand your dividend payout ratio without sort of putting yourself closer to a point where you might be under review by one of the agencies?

Well the credit rating is very important to us. But when you look at our dividend, the cash flow that it takes to fund that and compare that with the adjustments we made in the CapEx plus the fact that we'll be growing our operating cash flow from this year, we feel comfortable that we can do both.

Okay. And just last question. Looking at your guidance, even if you were to wipe out the compensation impact or going back to sort of normal payout ratios on compensation, you're still forecasting margin contraction. Is that, all of that pretty much the commodity picture change? Or is there anything else in there as far as -- is it store opening -- is it more that you're looking for more growth from your newer stores or, I mean, your comp doesn't look to be outside of the range of what historically you've been growing at, sort of that 0 to 2% or -- I'm just curious where you're seeing that incremental deleverage, if it's anything more than just the incrementally worse commodity outlook than what you had back in February?

Yes, when you give recognition to the health care transition cost, the Yard House related costs and the incentive accrual that we talked about, our math gets us margins that are flat to up about 20 basis points is what we see. And even included within there is continued investment that's -- a lot of it's hitting the P&L for our technology digital platform that we talked about. So we look at the base model and see that the margins are at least flat or modestly growing as we look to next year in a cost environment, like you said, that's got a little bit more food cost inflation that we originally anticipated.

Our question comes from Jeff Omohundro from Davenport & Company. Jeffrey F. Omohundro - Davenport & Company, LLC, Research Division: My question relates to the ACA guidance. Just wondering if you could maybe elaborate on what is going into that number. And just given the uncertainties around the program, how do you think that might evolve or change over the next year?

Well, Jeff, there is a lot of uncertainty. And so that number is a difficult number to try to get at because we have to make a number of different assumptions, assumptions about as we offer health care to full-time employees how many are going to take, assumptions about premiums, and we still don't know what premium's going to be. That number will come out this summer. And so it's a tough one to make a guess on. But we think that's about the right guess. There are some excise taxes, surcharges that are pretty clear that are included in that number, but the rest of it is really about assumptions about what people are going to do when they're offered more options than they've been offered before. Hard to say. And a lot of it will depend on how they feel about the new institutions and structures that are going to be up this fall and what the reporting is on how well those are proceeding. So difficult to say, but that's our best guess as to what the range of cost might be this year. We'll keep you posted on it.

All right. Thank you, everybody, for joining us today on the call. We recognize there's still a number of you that were in queue for questions. We apologize we couldn't get to you this morning. Of course, we'll be here throughout the day if you want to give us a call. We'll try to answer your questions at that time. But we wish everybody a safe and happy summer. We look forward to talking to you again in September. Thank you.

Thank you. Thank you, all, for attending today's conference. You may now disconnect.