Ladies and gentlemen, we’d like to thank you for standing by and welcome to the Darden Restaurants fourth quarter earnings release teleconference call. (Operator Instructions) I would now like to turn the conference over to your host, Mr. Clarence Otis. Please go ahead, sir.

Good morning. This is Matthew Stroud. I’m going to kick off the call this morning. 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. 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. We wish to caution investors not to place undue reliance on any such forward-looking statements. Any forward-looking statements speak only as to the date of which those statements are made and we undertake no obligation to update such statements to reflect events or circumstances arising after [such date]. 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, the loss of or difficulties in recruiting key personnel, information technology failures, 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 Darden's newer concepts, Bahama Breeze and Seasons 52, achieve synergies and develop new Longhorn Steakhouse and…

Thank you, Matthew and good morning. Darden's total sales from continuing operations increased 8% in the fourth quarter to $1.98 billion, driven by new restaurant sales growth at Olive Garden, Longhorn Steakhouse, Red Lobster, and an additional operating week. The additional operating week increased sales growth by almost 7 percentage points in the fourth quarter. Let’s review the same-restaurant component of that total sales growth. As a reminder, our same-restaurant sales results are calculated on a 13-week versus 13 basis, while total sales results are calculated on a reported basis or 14-weeks versus 13 weeks. For context, industry same-restaurant sales as measured by Knapp-Track and excluding Darden are estimated to be down 6.7% for the quarter. Olive Garden's same-restaurant sales were down 0.6% for the quarter and total sales increased 11.5%. Red Lobster also had a same-restaurant sales decrease of 0.6% for the quarter and its total sales increased 6.8%. Longhorn Steakhouse same-restaurant sales decreased 6.5% for the quarter, while its total sales increased 6.5%. The Capital Grille had a same-restaurant sales decrease of 22.1% for the quarter and its total sales decreased 9.9%. Bahama Breeze had a same-restaurant sales decrease of 4.3% for the quarter and its total sales increased 7.6%. What these numbers demonstrate is that in a difficult environment, relative to the industry as measured by Knapp-Track, our three large brands performed very well regarding same-restaurant sales with Olive Garden and Red Lobster outperforming the Knapp-Track benchmark by an estimated 600 basis points and Longhorn exceeding the industry by an estimated 20 basis points. When you combined these same-restaurant sales with our total sales growth excluding the 53rd week, we are taking significant market share and as I’ll explain in a moment, we’re doing so without sacrificing profitability. But first, let’s discuss the margin analysis for the…

Thanks very much, Brad. As Brad just mentioned, Olive Garden delivered competitively strong performance once again in the fourth quarter despite wrapping on a very strong year-ago period. During fiscal 2010, the key strategic priority for Olive Garden remains unchanged, and that’s to sustain accelerated new restaurant growth while also maintaining same restaurant excellence. We plan to open approximately 20 to 32 net new restaurants this fiscal year and ultimately we believe the brand has the potential to operate 800 to 900 restaurants in North America. Importantly, the combination of their value leadership position in casual dining, plus compelling promotions that feature exciting new culinary dishes and strong value offers will enable them to maintain strong industry outperformance in same-restaurant sales throughout the year. Red Lobster also delivered competitively strong same-restaurant sales during the fourth quarter and now has either equaled or exceeded the Knapp-Track industry average for 17 of the last 19 quarters. During fiscal 2010, Red Lobster will continue their brand refresh efforts designed to further broaden appeal, increase same-restaurant sales, and strengthen unit economics. Key initiatives include new dishes that leverage the wood fire grills installed last year, a new advertising campaign that more fully communicates the improved Red Lobster guest experience, and expansion of their successful Bar Harbor remodel program. More specifically, Red Lobster plans to remodel approximately 50 restaurants this year and accelerate the pace of remodels in subsequent years. In addition, they will temporarily slow new unit growth and open three to five net new units during fiscal 2010. Advertising will feature exciting new wood fire grill dishes, as well as increased emphasis on value and affordability throughout the year. Longhorn same-restaurant sales were slightly ahead of the industry benchmark during the fourth quarter. Importantly, they have meaningfully improved their performance relative to the…

Thanks, Drew. The specialty restaurant group’s three brands remain focused on capturing market share by delivering exceptional dining experiences, developing effective sales building initiatives, and continuing to strengthen the business models. Let’s take a quick look at the status of each brand. The Capital Grille is a proven brand with a strong employee culture that delivers an exceptional, personalized dining experience. The current macroeconomic environment has been particularly difficult for premium steakhouses. Steep declines in business travel and entertainment spending have led to significant demand destruction. The Capital Grille's sales performance strongly correlates with the erosion in U.S. hotel occupancy that start accelerating in calendar fourth quarter last year. Throughout this period, The Capital Grille teams have remained focused on delivering best-in-class service and culinary execution, both of which are a competitive advantage for the brand. The Capital Grille was recognized for the distinct service and culinary expertise as readers of Consumer Reports magazine gave them the highest score of any steakhouse chain in America. Actually, Capital Grille received the highest score across all full-service restaurants. The brand is focused on strengthening relationships with guests by building customer relationship management capabilities to help their teams further personalize the guest experience. The team is also leveraging their culinary expertise to provide value to guests in unique ways by still delivering on the brand promise. Capital Grille successfully opened two restaurants in the fourth quarter in Boca Raton, Florida, and in the Time Life Building in New York City. They plan to open three restaurants in fiscal 2010. In the fourth quarter, Bahama Breeze outperformed the casual dining same-restaurant sales benchmark by 240 basis points. More importantly, the brand significantly elevated the guest experience as measured by their guest satisfaction surveys. In February, the company successfully opened a smaller, more efficient prototype in Wayne, New Jersey, that’s exceeding sales and return expectations. In fiscal 2010, Bahama Breeze will focus on expanding their market share as they leverage the escape nature of the brand. They will do this through beverage news, strengthening the brand’s value proposition, and continued operational focus. The team will open one restaurant this fiscal year in Jacksonville, Florida. Seasons 52 continued to deliver strong unit volumes in the fourth quarter despite the challenging environment. In March, the team opened their first restaurant outside the brand’s footprint in the Southeast in Cherry Hill, New Jersey, and it is exceeding hurdle requirements. The restaurant design improves operating efficiency and creates flexible private dining space while reducing the initial investment. Seasons 52 team will open two to three restaurants in fiscal 2010. Now I’ll hand it back to Brad for the fiscal 2010 financial outlook.

Thank you, Gene. In fiscal 2010, we are basing our combined same-restaurant sales growth for Red Lobster, Olive Garden, Longhorn Steakhouse, between minus 2% and flat. This includes approximately 2% of pricing for fiscal 2010 and our assumption that together, traffic and mix changes will be negative. While the macroeconomic and industry trends that these assumptions are based on could be better than what we built into our plans, we believe our plans are appropriate, given the weakness and the uncertainty we’ve seen in the current consumer environment. Of course, we will be both above and below this assumed range 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 12 months. In fact, there are two quarterly holiday shifts you should be aware of this fiscal year. The Thanksgiving holiday, while our restaurants are closed, will fall in our fiscal second quarter in 2010, while it fell in the fiscal third quarter in fiscal 2009. And the start of Lent, which is when Red Lobster begins its signature and historically strong Lobsterfest promotion, will shift to our fiscal third quarter in fiscal 2010, moving from fiscal fourth quarter in 2009. These holiday shifts will have a meaningful impact on quarterly same-restaurant sales results, pressuring the second and fourth quarters and supporting the third quarter. Looking ahead to unit growth, the new restaurant plans we outlined mean that we expect a net new restaurant increase of approximately 50 to 55 restaurants, or about 3%. Given our same-restaurant assumptions and new restaurant plans, we anticipate that total sales change for the year will be minus 1% to plus 1%, comparing to the as-reported fiscal 2009 sales of $7.22 billion, which includes the 53rd week.…

Thanks, Brad and I’ll be brief because I know you’ve got a lot of questions but what I would say is that in many respects, really fiscal 2009 I think is our finest year. I mean, obviously some of the most challenging times we’ve seen in our economy and in our industry and despite that, we had very, very solid financial performance. And that performance is because we were able to get ahead of some deteriorating conditions very quickly, aggressively managing our costs and driving our traffic and we did that smartly, we think, protecting our people, our profitability, and the long-term health of not just our brands but also our business model. And so we think we are well-positioned to succeed in tough times but also our performance gives us confidence that we are going to emerge an even stronger company and we’ll have wider positive gaps to industry benchmarks, whether that’s sales or earnings. As we look ahead, our plans for fiscal 2010, as we’ve said a few times, reflects our assumption that economic and industry conditions are going to remain difficult. And we know many of you are more optimistic than that and we certainly hope that you’re right but we think it’s prudent to plan this way and that’s because it’s easier for us to gear up in response to better-than-planned conditions than it would be for us to make changes to address weaker-than-planned circumstances. The lower end of the sales and earnings per share ranges we’re providing are consistent with that approach but you should know that if we see some economic improvement, including some stabilization in employment levels, then the upper end of the sales and EPS range we’re providing is certainly achievable. In either case, we’re going to manage our business with a relentless focus on guest satisfaction and on maintaining or reducing costs wherever possible while still making the investments that we’ve got to make in order to have long-term success. As we’ve said before, we have a portfolio of brands that are proven and that collectively have a very strong long-term sales and earnings growth profile. We’ve got scale and all the advantages that scale brings and we’ve made changes in how we work so that our scale works even harder for us -- changes that also helped us limit the earnings erosion as sales softened this past year, fiscal 2009. And then finally, we’ve got some great teams, some outstanding teams in our restaurants, in our restaurant support center. These teams are working to successfully navigate the current environment, doing a great job of that but beyond that, they are working to create a great company. All of us are focused on creating again, in good times and bad, a company that is a leader in the full-service restaurant industry now and for generations. And with that, we are prepared to take your questions. Thank you.

(Operator Instructions) Our first question comes from the line of Jeff Omohundro of Wachovia. Please go ahead.

Thank you. Referencing Drew’s remarks on Red Lobster, the shifting emphasis to value and affordability, is this a messaging change or will there be something more significant occurring at the menu at that concept during 2010? Thanks.

Just to clarify my comments there, the overarching goal for Red Lobster this year is to continue their brand refresh, continue to broaden appeal, but we know it’s a very value-sensitive environment where affordability is a major concern in general and the higher your check is, the more of an opportunity is for brands in particular, and Red Lobster has taken steps to be able to augment their brand building messaging with more affordability and specific value messaging, so their quick catch lunch program that started late in the second half this year would be an example of something that they would be using more consistently this fiscal year.

And do you see a need to respond to the more aggressive couponing, discounting and messaging around that within a mid-scale at that concept?

Well, we have three broad filters for when we think about our promotion plans and discounting and Clarence touched on these -- we want to make sure that anything we do in that area contributes to profitable sales growth, maintains the integrity of our business model, and maintains the integrity of our brands going forward. And as we look at what we did in fiscal 2009, all of our brands, Red Lobster included, maintained their competitive level of outperformance of the industry in same-restaurant sales and so we don’t see a -- as well as contributing to broadening the appeal of their brand, so we don’t see a need to dramatically change what we did in the advertising and promotion side. In fact, we’re not sure that would be the best thing for our brands long-term in any event.

The next question comes from the line of Matthew DiFrisco of Oppenheimer. Please go ahead.

Thank you very much. Clarence, I just wanted to get a little clarification on your guidance with respect to -- you said that you are being somewhat conservative here but can you comment a little bit on did trends get worse as far as June or the underlying consumer trends you’re seeing? And could you put that in context with what we lapped a year ago with the influence from the rebate checks? Are you seeing as we get through the end of June the rebate checks having potentially less of an effect than they may have had in the beginning of May?

I would say that we are not going to comment specifically on June but if we look at our fourth quarter, so March, April, May, each month was roughly about the same. I mean, when you look at the industry, May was slightly weaker but a lot of that I think had to do with the rebate checks year-ago. It was hard for us to get a real handle on what the contribution was. We talked at that time that maybe it added about a point to the comp side. Year-ago June, I don’t know that we saw a whole lot for rebate checks because June was also the month where gas prices spiked north of $4, and so I think whatever positive effect stimulus checks may have had, it was offset by that year-ago. And so as we think about the next 12 months, we are looking at what we’ve seen the last three to six, which has basically been sales at about the same levels, really. I mean, there’s a little bit of variation from month-to-month but that hadn’t changed all that much and so that’s what we are looking at as opposed to any deterioration in June. I think when you look at our brands, May, Red Lobster would have continued to outperform at about the level that it’s been outperforming at. Olive Garden, there was a little bit of shrink but a lot of that is just because they had such a strong year-ago May where I think they were up 11% on a same-restaurant -- oh, I’m sorry, up 11 percentage points versus Knapp-Track which was fairly significant and it’s comp was about 11%.

Okay, and then also can you give us a little detail as far as what are you seeing regionally? There has been some industry commentary that Florida may have rebounded. Are you seeing any of that disproportionately recovering faster than say the rest of the country, or California particular as well?

I’m going to let Brad answer that one because I haven’t see the numbers as recently as he has.

I’d say just broadly when we look at it in terms of absolute performance versus year-ago, the weakness still continues in the western part of the United States, the Pacific Coast and Arizona, Nevada. The stronger areas continued to be on a year-over-year basis the upper Midwest, kind of through that area and in the mid-Atlantic. If you look at how it’s trending from quarter to quarter, there’s not a whole lot of change. You specifically asked about Florida. You are seeing a little bit of improvement there but nothing significant. Probably the more notable one, and I mentioned this last time, was that Texas, which continues to be strong, but it’s trending down there as well. I think that’s the more notable trends that we see.

The next question comes from the line of David Tarantino of Robert W. Baird.

Good morning. Just a quick clarification question on the overall cost outlook for 2010. I was wondering if you could share what the overall net cost inflation or deflation might look like for the year when you add up all the components?

Well, if we look really just at the food area, if you will, we probably actually see a deflation on a year-over-year basis somewhere in the 1% to 2%. If you are talking about through the entire P&L, which includes wage rates and rents and other those, we do see those moving up still in that 2% to 2.5%, so if you kind of blend all that together, it’s a net inflation that’s probably approaching 1%.

And just a follow-up to that, I know you have pricing of 2% offset that or more than offset that type of inflation -- is there opportunity beyond the pricing to get some of the cost savings to flow through so that you can push that net inflation or deflation number down a little bit when you include the cost savings?

Yeah, I think we are continuing a number of our cost initiatives, particularly in say the first quarter and maybe into September. Our big effort in the past year, what we call business strengthening initiative, that will help us in the first quarter to continue to reduce the costs and when we start lapping on some of that strong improvement, so the opportunity to go further than that is much more limited, although there are some things that we are still pursuing. So if we try to look at on a net cost pressure, if you look historically, forget the prior year, we’ve been able to get generally close to 50 basis points off of that inflation number and we would try to get something close to that again this year as well.

Okay. Thank you very much.

The next question comes from the line of John Glass of Morgan Stanley.

Thanks very much. I wanted to go back to the Olive Garden performance in May and I understand the tough comparison issue but historically, you’ve had a pretty strong gap to that Knapp-Track average of 5 or 6 percentage points and it narrowed pretty substantially in May, understanding that everyone probably faced some tough comparisons. So how do you know you are not losing share specifically at that brand versus more active value promotions? And can you maybe in talking about that, talk about how you do -- do you plan on approaching value somewhat differently at Olive Garden next year to protect that gap in that value proposition?

Well, as we look at -- you referenced Olive Garden's same-restaurant sales outperformance to the casual dining industry, which is certainly true and if you look at the last four years, our fiscal 2006 through 2009, the year we just completed, on average Olive Garden exceeded Knapp-Track by 5.5 points. If you look at our fourth quarter a year ago, it was about 6.4 points in March, about 5.7 in April, so pretty much online but it jumped almost 12 points in May, so the fact that it was more than six full percentage points above what it’s been averaging over the last four years led us to expect some erosion in our gap to Knapp, if you will, in this most recent month of May, which was about -- I think it was about two points. Yeah, just about 2 percentage points, so still meaningfully superior but not to the same levels. But it didn’t surprise us because of that 12-point gap last May. As we look forward for Olive Garden, the value leadership position that it enjoys already, the breadth appeal that it enjoys already, and a very meaningful value offers that it’s already been able to incorporate into its marketing plan over the last couple of years, we wouldn’t foresee a meaningful change to that and we think it will continue to allow Olive Garden to outperform and maintain its brand identity and integrity.

And I would just say if you look at our performance benchmarked against Knapp-Track, so if you look at blended comp for the three large brands against Knapp-Track, I think our gap increased in the second half of the year compared to the first half of the year, even as the promotional activity intensified. So we are pretty comfortable with where our brands stand. Again, baked into each of our brands is everyday value. I mean, it’s part of the reason why they have the strength that they have and we also we think have done a good job historically of having a range of promotional activity that goes from premium offers to value offers, and so we don’t know that that was necessary for us to do anything additional, especially at the expense potentially of long-term brand and business model health.

That’s very helpful. And then in your guidance, you suggested there were some deferred costs in ’09, particularly in SG&A, that you have to kind of work back this year. Can you remind us or quantify that? I seem to remember like $0.15, there was some near-term cost-savings in ’09. Does that come back in 2010 or are you just saying you can’t save an additional $0.15, so that’s why SG&A --

It’s more of the latter. We don’t see that we can save that much additional as we go into 2010 but what we also did in 2009 is we did defer some investment that would strengthen our foundation as we try to move forward. We saw 2009 is not quite that opportunity to make those investments pay back in the near-term, and so we still have those and as we see an opportunity with environment in 2010, we would make those because as we’ve demonstrated for quite some time now, the ability to grow our sales, to have the high absolutely unit volumes that we have and to continue to grow our gap to the benchmark, we would make those investments. So we are looking for more of the opportune time to do that. That’s part of the deferred spending, if you will, that we’re talking about.

The next question comes from the line of Jeff Bernstein with Barclays Capital.

Great. Thank you. First as a follow-up on the cost savings thoughts, I think you guys had previously mentioned that it was going to be in the $31 million to $39 million range for fiscal ’09 in terms of cost-saving opportunities. I know you had previously talked about the $55 million related to RARE. I’m just wondering if you could talk in a little bit more depth about the opportunities or the magnitude of the cost-saving opportunities in fiscal 2010, whether you can classify it in a couple of buckets and kind of what magnitude we should expect lapping the $30 million to $40 million I guess in fiscal ’09?

Good point there, Jeff. Let me break those down into two pieces. As it relates to the acquisition cost synergies, we did this year capture for the entire year about $45 million. We still look at the annual run-rate of $55 million that we talked about previously as where we are and we expect to realize that as we look into fiscal 2010, so that part of our element gives us roughly $10 million of incremental savings year over year and we talked back in January at the investor analyst meeting that we had then about what we call our business strengthening initiatives and we talked about that being able to get us last fiscal year $31 million to $39 million in savings. We were in the middle to upper end of that range and that really got started in late September last year, so we do see the opportunity to add a little bit to that, probably in the mid-single-million dollar range in the first quarter of the new year. And then just a part of our ongoing process, we look to minimize costs as well but we don’t see that as being a significant opportunity in 2010.

You’re probably looking at an additional $10 million from the acquisition of synergies and then another mid-single-digit from the business strengthening as compared to kind of the mid-30 or high-30 million range you saw in fiscal ’09?

That’s correct. We’re talking about the year-over-year growth there, yes, the $10 million from synergies and mid-single million dollars on our business strengthening initiatives.

The next question comes from the line of Mitch Speiser of Buckingham Research.

Thanks very much and on the topic of discounting or I guess incremental discounting, it sounds like Darden did not go that route. Can you give us an update on what you are seeing in the industry? Have you seen any changes in the level of promotional activity in discounting? And then I have a follow-up.

I’ll start. I think we’ve seen a little bit of pull-back in the last few weeks. Our sense, as we try to figure out the situation is we don’t know that a lot of the folks who did discounting got much for it, from a traffic perspective and so we have seen a little bit of pull-back from some of the more significant offers.

Got it. And separately, just on media rates, can you give us an update on where they stand and do you view it as just more bang for the buck or will you perhaps let some of that savings flow through to the bottom line? Thanks.

We think the up-front market, which won’t be finalized for another month or so, will probably be flat to slightly down versus last year and so it’s not going to be a material change but strategically, we’d be looking to maintain what we think are very effective media waits and media plans already and any meaningful savings would be redirected.

The next question comes from the line of Brad Luddington of Keybanc Capital Markets.

Thank you. Actually, a majority of my questions have been answered. I just wanted to do a quick follow-up on the discounting aspect. I just want to clarify -- I mean, you’ve done a great job of stressing I think the value of your brands versus going the discount route and that’s still the approach you are planning on taking in fiscal ’10?

Brad, that is -- I mean, we have -- as you know, a -- we have a calendar where we’ve got features throughout the year at both -- at all three of our large brands and with those we try to be pretty balanced between value features, features that are pretty much at core menu margin levels, pricing levels, and then for appropriate times of the year, we even have premium features like Lobsterfest, for example, in Red Lobster’s fourth quarter which was again very successful, even as a premium feature in this environment. And so we expect to continue to be balanced. I mean, tactically we will make changes around the edges in terms of do we stress or not stress a price point, do we add or subtract a week at the margins, but those are the kinds of decisions that we have to make every year.

Okay. And then just briefly, are there any scheduled debt payments or anything we should expect significant on that avenue throughout fiscal ’10?

Our next maturing debt is in August of 2010. There’s a $150 million note due there and then the following April is a $75 million, so we have some time to deal with that. We also have our revolver, which has $700 million of capacity there and you can see from our release there, we don’t have very much of a draw on that, so should we need to, we can roll that into the revolver but we’ll be opportunistically looking for an opportunity to go back into the debt markets probably later -- late in this fiscal year or early in the next fiscal year would be my best guess at this point.

The next question comes from the line of Larry Miller of RBC Capital Markets.

My questions were answered. Thank you very much.

The next question comes from the line of John Ivankoe of J.P. Morgan. Please go ahead.

Great, hi, thanks. You know, I guess just given the real estate market and all that we’re hearing out there in terms of prices and opportunities of higher quality sites, I just want to take your temperature in terms of whether we might expect to see Olive Garden, for example, increasing or any other opportunistic increases in your development pipeline, whether we moved throughout the latter half of 2010 and into 2011. That’s the first question. And secondly, could you give detail for us what you are getting out of the Red Lobster remodels? You know, the price that you are paying in terms of the 50 units that you are doing in fiscal ’10 and what kind of sales lift that you are getting for the remodeled units?

I’ll kick off on just the real estate side -- I mean, you’ve got two dynamics. The one that you described, so some real weakness in real estate prices, some good availability because of less competition for the sites. At the same time, you’ve got a lot of developments that are being deferred and so both of those things are going on, which informs our unit development. We do think we are getting some sites available in some places that typically it’s very difficult to get in, especially on the premium side and so you’ve seen us click up a little bit, Seasons 52, for example, that’s part of it. I think as we look to 2011, we do think the net of all of that is that we are likely to see more sites that are attractive rather than fewer across the entire portfolio, and so that’s our current outlook.

And related to Red Lobster remodel, I don’t think we want to get into the absolute investment and absolute guest count lift but I would say that the results to date have been very encouraging. We think the remodel is contributing to a meaningful improvement in how current and lapsed users think about Red Lobster and use it and that the guest count lift has also been meaningful and both of those dimensions, guest image and guest behavior as it relates to traffic, are pretty close in parallel to what we saw at Rev Italia several years ago at Olive Garden, so it gives us a lot of confidence to move forward.

The next question comes from the line of Joe Fisher of Goldman Sachs.

Good morning, just a quick one for Brad -- I was wondering, I apologize if I missed it, if you could help us understand the impact from the 53rd week, or the 14th week maybe is the right way to say it, on fourth quarter restaurant level margins.

No, I don’t think we went into that in any great detail but basically what happens with that is there’s really no leveraging at the food and beverage line or really at the labor line but there is at the restaurant expense line and so I believe that impact on basis points is around 30 to 40 basis points across all of our brands in this particular quarter is the benefit we get from that.

Okay, that’s great. Thank you.

The next question comes from the line of Joseph Buckley of Banc of America.

Thank you. With respect to Red Lobster, same-store sales down just very, very slightly in the quarter. You mentioned quick catch -- I’m curious if the lunch business picked up significantly in that better Red Lobster performance in the quarter?

Yeah, it did and we think that Lunch is a meaningful business building opportunity long-term for Red Lobster, both to build sales and to leverage fixed costs and strengthen unit economics, so it was a significant positive for lunch.

Okay, and then a question -- I know you are not in the business of giving quarterly guidance but year ago the first quarter was pretty disappointing and it sets up a pretty easy compare going forward, and I guess I’m curious if you would agree with that assessment or if there’s anything unusual about the quarter. I mean, I think a year ago, you started the quarter with some pretty aggressive same-store sales assumptions, ended up guiding down late August, early September -- are you assuming that flat to down 2 kind of holds in the first quarter and what kind of margin --

Yeah. Joe, I would say on the first quarter for sure, you know, benefits from some real year-over-year declines in a lot of cost, and so if you think back to the first quarter last year, a lot of food commodity costs were pretty high and have come down significantly. Energy costs were very high and have come down significantly and so certainly the first quarter benefits on the profitability side from that by a lot compared to the rest of the year. On the sales side, we had not yet gotten the effect that we had of the financial collapse and some of the real onset, the heavy onset of the depression, so it was a better environment first quarter last year than it was for much of the rest of the year, so you’ve got those two dynamics working I think is how we think about the quarter.

Okay, and then just one more -- on food cost, how far into fiscal 2010 do you have visibility for food costs?

I would say the major components we had through the calendar year, there’s a few elements that go into the new calendar year, so the first half of them were of our fiscal year but as I mentioned in the prepared remarks, there’s also -- we’re trying to leave ourselves open to the opportunity that there may be some more continued erosion in prices, so we haven’t taken all the coverage that we would but we continue to monitor that and we’ll look for those opportunities. As we think about that, that last point, to the extent that we don’t see further declines, it’s likely to mean a better environment than we base our plan on in terms of top line, and so we are comfortable with that balance.

The next question comes from the line of Stephen Anderson of MKM Partners.

Good morning and congratulations on the year. Very quickly on Longhorn, I noticed that you started a $6.99 lunch special. I just wanted to get a little bit more color on that and I just want to see if that has -- if you envision that as having a similar effect on lunch as Red Lobster is having with its quick catch special?

At Longhorn, we’ve got on the current menu every day pricing, a range of items that are under $10, some as low as $6.99, so what you are referring to is probably just some local marketing efforts to communicate to people the fact that the everyday menu features a range of price points and some of them at $6.99. But we haven’t started a new lunch program or lunch promotion similar to what Red Lobster is doing.

Okay. Thank you.

We’ve got time for one more question, please.

The last question at this time will come from the line of Ms. Nicole Miller of Piper Jaffray. Please go ahead.

This is Rob Wyler in for Nicole. A quick question for you guys -- you mentioned incremental Longhorn marketing spend in FY10 -- could you quantify how much better volumes were at the units receiving the media last year, as well as -- and also where the same-store sales was negative for those units?

We added probably 60 restaurants, maybe a little more than that, that were receiving media coverage and there was a meaningful out-performance, and there has been for several years in terms of the markets that are getting television and not getting television but we haven’t in the past disclosed what that difference is.

Thank you.

Thanks for joining us today on the call this morning. We wish everybody a fun summer. We look forward to speaking with you again in September.

Ladies and gentlemen, that does conclude our conference call for today which will be available for replay from today at 10:30 a.m. until July 23rd, midnight of that day. You may access that conference by dialing 1-800-475-6701 and entering the access code 104662. If you happen to be dialing from an international location, please dial 320-365-3844 and enter the same access code, 104662. On behalf of today’s panel, I would like to thank you for your participation and thank you for using AT&T. Have a wonderful day. You may now disconnect.