Welcome, and thank you for standing by. At this time all participants are in a listen-only mode. (Operator Instructions). Today's conference is being recorded. And at this time I will turn the call over to Mr. Matthew Stroud. You may begin, sir.

Thank you, Shirley. Good morning, everyone. With me today are Clarence Otis, Darden's Chairman and CEO; Gene Lee, Darden's President and COO; and Brad Richmond, Darden's CFO. 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; the ability to achieve the strategic plan to enhance shareholder value, including the separation of Red Lobster; the high costs in connection with the spin-off, which may not be recouped if the spin-off is not consummated; actions of Investors and the cost of disruption of responding to those actions; food safety and food-borne illness concerns; litigation; unfavorable publicity; risks relating 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…

Thank you, Matthew and good morning everyone. Our third quarter earnings were in-line with our expectations, excluding the impact of the more severe winter weather and the legal, financial advisory and other costs related to implementation of the strategic plan we announced in December of 2013. Together these unusual items totaled approximately $0.13 in earnings per share. We estimate that the severe winter weather adversely affected earnings by approximately $0.07 and that legal, financial advisory and other costs associated with the strategic plan adversely affected earnings by approximately $0.06. Now focusing more specifically on the results for the quarter, Darden's total sales from continuing operations decreased 1.1% to $2.23 billion. On a blended same restaurant sales basis the results for Red Lobster, Olive Garden and LongHorn Steakhouse declined 5.6% in the quarter, with strength at LongHorn Steakhouse offset by weakness at Olive Garden and Red Lobster. Same restaurant sales also declined 0.7% in our Specialty Restaurant Group. Now looking at the larger brands individually, U.S. same-restaurant sales increased 0.3% at LongHorn Steakhouse and declined 5.4% at Olive Garden and 8.8% at Red Lobster. These results include the adverse effect of the more severe winter weather which was approximately 160 basis points and the adverse effect of the shift in Thanksgiving holiday week which was worth approximately 100 basis points. Excluding these impacts same restaurant sales for the third quarter would have been, up approximately 2.9% at LongHorn Steakhouse, down approximately 2.8% at Olive Garden, down approximately 6.2% at Red Lobster and up approximately 1.9% at the Specialty Restaurant Group. Food and beverage expenses for the third quarter were approximately 40 basis points higher than the last year on a percentage of sales basis. Then favorability was driven by higher shrimp and land based protein cost. Giving the pending separation of…

Thanks Brad. I’ll start this morning with a few comments about our third quarter sales, specifically about choices we made in December that affected Olive Garden and Red Lobster and then I will provide a high level update on the brands. On absolute basis December is always a very strong month for both brands. In the planning process this year however we did make some very important adjustments to our promotion and advertising plans for the month. Last year both Olive Garden and Red Lobster featured discounted price point of promotions during December, which was a departure from our prior practice. This year we decided not to use this kind of price point promotions during this high volume period. Instead our advertising focused on the core equities of each brand, and in restaurant we emphasized the core menu. We also reduced our media spending during this time period so Olive Garden was only on air three out of the five weeks this year versus four out of the five weeks last year and Red Lobster reduced the total rating points they purchased by 20%. Additionally we decreased the number of incentives in circulation compared to last year. These significant changes in marketing tactics were made to return us to more sustainable and healthy management of our business. Beyond that, as we have been communicating the Olive Garden team is executing a brand renaissance plan. The plan includes a focus on a holistic core menu and promotional plans designed to deliver superior value, choice of variety and convenience. We implemented the most comprehensive menu change in the brand’s history on February 24, the first day of our fiscal fourth quarter. Execution of the new menu continues to improve every day and we’re encouraged with the initial guest feedback we’re receiving. Another…

Good morning everyone and we do welcome this opportunity to speak with you and take your questions, but before turning to questions, I'd like to briefly address the consent solicitations underway to call a special meeting of Darden shareholders to consider a non-binding resolution prior to our annual meeting. Our Board is strongly committed to engagement. We value the views of our shareholders and as many of you know, we've had a robust investor relations efforts since becoming a public company nearly 19 years ago. We've consistently spent and we'll continue to spend an extensive amount of time talking directly with our shareholders and with the investment community. In terms of our more recent business circumstances and potential path forward we appreciate the input we've received and these insights are reflected in the plans that we have announced. Given the significance of the initiatives underway at Darden, we believe it's important that we continue engaging with our shareholders directly and individually so that we receive input in a productive and nuanced manner. With respect to the consent solicitations shareholders should make their own determination. Given our extensive ongoing discussions with shareholders and the substantial value we have gleaned from those conversations we believe that shareholder should continue to engage directly with the company and should not view a special meeting as a substitute for that ongoing two way engagement. We look forward to continue to speak with our shareholders and with the investment community. And with that operator, we'll take some questions.

Thank you. At this time we are ready to begin the question-and-answer session. (Operator Instructions). And we'll take our first question comes from David Palmer with RBC. You may ask your question.

Thanks, thanks guys. First really two part question, one on media weight. Could you just talk about what your strategy is there with media? There was a reduction in both brands, I believe you said that in the comments, particularly on Olive Garden, why that might be, perhaps you're saving that for the push behind this new menu and then that brings me to the second question how is that going? That new menu is a big event for that brand and obviously visibility on that would be helpful? Thanks.

Good morning, David. On the media weight on Olive Garden, first part of it was just the way the holiday schedule fell and so we always have a hiatus week after Thanksgiving and so that fell in to Q4 -- to Q3 this year instead of second quarter and we've always taken a hiatus week the week after Christmas. And so that really wasn't a huge departure on Olive Garden. On Red Lobster it was a conscious decision to pull back the total rating points by 20% as we -- that spending just got a little too high in that time period. We are also trying to balance that very busy time that allows -- that we're -- we want to make sure that we are not over incenting -- putting too many incentives out, that displace guests who are willing to pay for our full price experience with guests who are using some sort of incentive to come in. So that was a big part of the decision. The second part of your question, new menu, new menu is doing well, as I said in the comments, it was a big change and so execution was what we thought it was going to be as we introduced it. We have been very pleased with how quickly our operations teams have picked up this new menu and we're seeing guest comments or complaints drops very, very quickly and actually getting -- receiving a lot of positive comments here over the last few days.

Thank you.

Thank you. Our next question comes from Keith Siegner with UBS. You may ask your question.

Thank you very much. Gene, just some questions on Red Lobster considering that the shareholders do currently own it, if it was spun they would still own it and even if it was sold there would be some efforts to try to ascertain what the appropriate value was. I appreciate the resetting of the media weights and maybe some additions to the Lobster Fest menu but could you talk just little bit more about maybe some other efforts that are in place to help address those three months of double digit traffic decline. Thanks.

Again I’ll start and I’ll let Gene comment but I do think we do want to make sure that we have the right level of media, and so we feel like it had drifted up too far over time and we need to bring that back and we also feel like we need to have the right balance between discount offers and non-discount offers, and we think we've gotten out of balance in terms of having a few too many discounts because an important part of the Red Lobster brand is for a lot of guests it is a special occasion experience and we want to make sure that we continue to deliver on that and we aren’t pushing those guests out with too much of a focus on the discounting side. And so we think that’s getting the brand back to where it needs to be in terms of really what current users look to Red Lobster for. And the other thing that the team is focused on really mirrors a little bit of what Dave -- George talked about at Olive Garden which is making sure that the foundation, so the in restaurant operating execution is stronger and we have seen some plateauing there, in a couple of different dimensions, some stepping back and so some intensified focus there. Gene?

The only thing I would add is that we thought that the promotion that we ran in December was going to be more effective than what it was. It tested very well and we were focusing on superior sea food. It really resonated with the consumers in test and then when we put it in market it did not perform at the level we thought it was going to perform at. So we did believe the plan that was in place was going to work better and we had a quantitative feedback from some testing that led us to believe that. It just didn't work out the way we thought it would.

Thanks.

Thank you. Our next question comes from Joe Buckley with Bank of America. You may ask your question. Joseph Buckley – Bank of America/Merrill Lynch: Hey, thank you. Two questions as well. First on the Olive Garden new menu, this is not mentioned on this call but I guess, when we spoke last week, is the new version of that planned for as early as May?

I think we’ll probably have a menu change in May, which is very -- it is normal for us and that the adjustments will be more operational than menu change. There will be copy change, things that will help us execute better but there will be no significant change to the offerings at all. There maybe one or two products that aren’t working the way we thought they would work and we may choose to remove those but the change will be more stylistic than anything else. Joseph Buckley – Bank of America/Merrill Lynch: Okay and then a question on Red Lobster, you are obviously lowering the same-store sales focus for the year and the performance is disappointing so far. How is this working to your personal evaluation of a standalone Red Lobster that you perceive with this spend?

I’ll start and then I’ll Brad comment further. We are not going to -- we don't think it’s useful to get into some real detailed level of specificity given that we are engaged in an active sale process. But what we would say is that we think we have been appropriately conservative as we forecast out next year and the year after for Red Lobster, that accounts for current business trends and it also accounts for the level of effort that we think it’s going to take to stabilize sales.

Joe, Brad here. The thing I would add is that there's been a conscious effort to reduce the amount of price point features and promotions there and while we have dialed back a little bit our top line expectations in terms of our earnings expectations they really haven’t changed that much, other than obviously the severe winter weather impact, but as we look for the fiscal year for that brand that’s stayed fairly stable.

The only other thing I would add is that and Brad can put some dimension to this but as we look out -- as we look today we recognize that this year from a cash flow perspective Red Lobster's results have been depressed by this fairly significant spike in shrimp cost as a result of some of the issues, production issues in Asia, Brad talked about a 35% inflation in the third quarter. And so we do see that coming back the other way eventually and we've accounted for it coming back the other way, as Brad said sort of not in this quarter and there may still be some pressure in the first quarter of '15 but following that.

Yeah on shrimp cost in particular, it's on annual basis for the Red Lobster brand it's approaching $30 million on year-over-year increase and as Clarence said it's going to be elevated for the rest of this fiscal year although we've seen the early indicators that we are looking for that the situation is improving. But we probably won't see cost relief on that until early in our new fiscal year, fiscal '15.

Thank you. Our next question comes from Sara Senatore with Sanford Bernstein. You may ask your question. Sara Senatore - Sanford C Bernstein & Co LLC: Yes, thank you very much. I wanted to ask a question about some of the information that was discussed in Form-10, which has basically allowed us to look at the business ex-Red Lobster. And I guess I had a question about that in the sense that we saw fairly most of Darden's margin compression has come from Red Lobster but it's happened elsewhere too and I can see it looks like there is probably some mix going on in the food and beverage line but for comps that, with the exception of may be the last couple of quarters for Olive Garden, but for comps where ex-Red Lobster there have been ex -- sort of modestly negative to up depending on the brand, it's still seems like there's been lot of margin pressure over time. And I was hoping you could just comment on to what extent that's been mixed from these new brands and to what extent any of that is addressable, because again it does looks like the sales alone wouldn't necessarily dictate that.

I would just -- a couple of thoughts, one and then Brad can follow on. I mean clearly some of the sales deleverage at Olive Garden put some downward pressure. In addition to that we do have some fairly meaningful new unit expansion costs. And those costs, given the plans that we outlined to bring the unit expansion down by at least half are going to come out. But that is significant. It flows through a number of lines as we prepare management teams, managers and training all those sorts of things. And we are also in addition to those adjustments on the new unit side as we talked about before really adjusting our support cost to reflect the lower sales base.

And I guess the piece to add to that or clearly the same thing is that what the new unit growth premium is a fairly significant headwind. As you pointed out with Lobster, if you look even just at the most recent quarter its impact on Darden and obviously the strategic plan related costs are fairly significant. You take those out, it's a 120 basis points better than it is. I think the other piece to add is some of our growth brands, obviously contribute to some of the headwind because of the growth premium we talked about as well as some of the SRG brands where there is a lot more lease facilities, you got that full rent cost above the line that's in there and so on EBIT you see that but if you go all the way down to on EAT basis and real cash flow we make that up there because you don’t have those additional financing costs.

Then the final piece I would add is just as you look back over the last four years we've clearly invested in the LongHorn marketing function and in the SRG marketing platform. We've done that to improve the brand positioning and brand evolution capabilities to improve their go-to-market capabilities. And those investments are completed so we would expect going forward to begin to leverage those investments. And then the last piece is that we've also invested in Lobster aquaculture. And from an operating expense perspective, that’s embedded there, it's not insignificant, and I don’t know Brad if you want to talk about the size of that investment but…?

Yeah, on a year-over-year basis it's in the $12 million range of additional expense that we have there for a very promising opportunity that we have there, but it does obviously have costs that precede the benefit that we are going to derive from that.

And we do think it's something that creates significant value and that value as a go-forward, as we think about it and whether it makes sense to continue, that value will best be realized as we get closer to full scale commercialization. Sara Senatore - Sanford C Bernstein & Co LLC: Thank you.

Thank you. Our next question comes from Jeffrey Bernstein with Barclays. You may ask your question.

Great, thank you very much. Two questions as well, first specific to Olive Garden and the new menu, seems like that’s your biggest opportunity to turnaround the core business, obviously ex-Red Lobster. It does seem like maybe it's in terms of more of a permanent reset of price value, and I know there a lot of value in that Cucina Mia and the small plates, just wondering how you think about the impact on that in terms of whether it be comp margin or ultimate brand possibility, as you now kind of reset down on the value side of things, and then I have a follow up.

Jeff, this is Gene. I think that we’ve gone both ways, we’ve provided every day value with Cucina Mia and we’ve done some other things at lunch that we think provide great value there. But we’ve also gone all the way through the menu and we’ve added price points at $14, $15 all the way to $18.99. And so as we look at it today, with the mix that we’re seeing, we’re not seeing a lot of margin compression with this menu. We’re seeing the consumer that we would hope would trade up to the [Fole] and the [Semolina Risoto] and dishes like that, that’s happening and we’re getting a good mix on that every day value but it's pretty much what we thought it was going to be at this point in time. And I think we’ve done a pretty good job managing the margins. That mix could continue to change overtime, but right now it's playing out pretty much like we thought it would.

Jeff, Brad here, I would just add to that and you’re pretty familiar with how we talked about our P&L through restaurant earnings line and even at the gross margin lines. There is very little contraction in that margin in the quarter even as we look forward here. I think there is the opportunity as we move forward with the strategy to gain some of the traffic back to where Olive Garden has typically been and the leveraging that is in that model could actually provide margins that are well above what we’ve been in the past couple of years. So we’re not giving much up with the guest we have today for that opportunity to bring more guests in to the future as we increase the appeal and the breath of their offerings.

Understood and then just a follow-up I think you mentioned in your prepared remarks there I guess $60 million annually in terms of cost savings starting in fiscal ’15, wanted -- just wanted to see and that, I believe that obviously then includes some of Red Lobster savings just wondering if you could breakout that $60 million ex the Red Lobster if the spin or sales is successful. And do you see any optimism or further opportunity beyond that, I know you are embarking on that benchmarking study, where there any learnings there or where you might see some opportunity maybe where you’re spending more than few years, or maybe that’s just a distortion in the way you’re reporting it, the mix look like that and it's not actually the case?

Yeah let me start out and Clarence can add on. We talked about the $60 million that has been a Darden number, we’re well on that path. That has largely been support services that Darden provides to the restaurants and the brands. So we would expect as we move forward to be pretty close to that $60 million but even as you mentioned, as we look forward and as a part of the separation, we see this as a great opportunity to reassess, reevaluate our support platform, starting there first, that I would expect as we continue to learn more and we’re bringing in strong outside expertise to help us look at it differently than we have, that there is no reason that we shouldn’t be at or above that $60 million on a support level basis. So, all those cost savings are coming at the G&A level and will also branch out in to the other areas. So I feel pretty comfortable that, that number is what it is and we'll probably continue to grow even on a Darden basis ex the Red Lobster piece.

And I would just add that as we look at reported G&A we feel like we are in-line with competitors. The challenge of course with that number is that there is no industry convention regarding where some important cost items are included. So for example we include the cost of multi-unit operations leadership in G&A expense, some include that in restaurant level expenses. We also include certain food safety cost and G&A expense and some folks include that again in restaurant level expenses. And so we felt it's very important to get someone like Alvarez & Marsal who has broad experience in the restaurant business to help us understand how we stack up, better understand how we stack up vis-à-vis competitors, when you look through all of those mismatches. And they are working with us on that. We think as we do that work we'll identify further opportunity. And we're also working with them to see are there cost reduction opportunities, four wall, sort of more direct operating cost opportunities beyond support cost.

I think one thing we're tapping into their experiences and expertize is on the revenue side as well, have a different perspective or fresh look at that. We'll get into that soon. We haven't started that part of the work yet but we look at that as a further opportunity for us as well.

Thank you. Our next question comes from Greg Hassler with Bank of America. You may ask your question. Greg Hassler - Bank of America/Merrill Lynch: Hi, good morning. A question I want to ask, there has been a lot of talk about the debt breakage cost, that you would incur if you were to go down the path that some of your shareholders have proposed. Can you highlight just sort of what specifically you are seeing in your bond and your debt covenants that would require you to make all the capital structure?

We think it's fairly clear in there that to the degree that we would need to pay off those bonds, there are certain provisions that those costs that we would have to incur. So we're fairly certain that those are there and those are obligations that we would need to fulfill. Greg Hassler - Bank of America/Merrill Lynch: Okay. And that's the language in the covenants you think, is it sort of all that substantially all or is it something else in the covenants?

It's pretty clear in our view if we have to refinance those, those are make-whole provisions that get those bond holders may hold given where those bonds trade relative to the current market.

Thank you. Our next question comes from John Glass with Morgan Stanley. You may ask your question.

Thanks very much. I wanted to ask what the cost savings that you are experiencing in Olive Garden right now. I think you said $19 million on an annualized basis, so that's 15 basis points I think if my math is correct. What do you think the total opportunity there is, is that a multiple of that, may be could you discuss the timing of that and I assume that is outside the $60 million. So it's $60 million plus whatever you achieve at Olive Garden. And could you also just talk about is that going to be gross savings, that you're going to talk about where we have to reinvest that money later on so we don’t actually see it or it one we actually see in the P&L.

John as we described effort, Phase 1 was the $19 million in operating savings that we achieved. And we're entering in to Phase 2 and we haven't really scoped what the total opportunity is in Phase 2. We do think there is an opportunity. However we are working with A&M to allow us to, we want to make sure we get their perspective on what the opportunity might be also. But we have not quantified this opportunity. We think there is opportunity there. But as you go into the second round of Phase 2 it won't be as easy as Phase 1 unless A&M comes up with something that we've just missed.

And I would say it is incremental to the $60 million that Brad was describing.

Okay and it is not the kind of stuff you need to reinvest in say pricing or incremental marketing. You believe these are actually going to stay as visible margin gains?

I think this is actually net of some of the re-investment we've made. So we have re-invested some of the cost saves that we have got out of simplification effort. And the $19 is net of that.

Thank you. Our next question comes from Matt DiFrisco with Buckingham Research. You may ask your question.

Thank you. I just also want to follow up on that, and then I had a question. With respect to the savings, you keep saying support services. Is that clear then that there is no marketing when you talk about the 20 basis points shifting out, 20 rating points shifting out? Was that incorporated at all in the savings?

Yeah, in that $60 million, a portion of that is -- it's all within SG&A. A portion of that is within the marketing area, where we have made some investments in the past that didn't deliver sufficient returns that we want to keep that. And so the marketing portion will come down some and we highlight some of those. There is a little bit of pull back that we've done in the third quarter. But on a profitability basis I don't believe it had a meaningful impact to us.

So I guess, did you clarify when you were breaking out the Red Lobster, I appreciate that you were doing the COGS, labor, operating spend. Did you also break out Red Lobster as far as leverage on the G&A side? Was that also delevered or did you have an offset where you levered because there were some cost savings.

Well for Red Lobster in this particular quarter their SG&A was actually better, I believe it's around the 100-120 basis points than the prior year. A portion of that was G&A savings within the brand, things that they had been working on. But a portion of that was the reduced marketing support, particularly in the December-January time frame. And so it did lead to a portion of our same restaurant sales decline. We had anticipated that but when we look at the cost of the media to attract those sales everything fell within our earnings expectations that we had going into the quarter.

Shirley, that's all the time we have this morning for Q&A. We'd like to thank everybody for joining us on the call. We certainly are here to take your call if you have additional questions and we look forward to seeing many of you as we are out on the road visiting with our shareholders and others in the investment community. Thank you very much for joining us today and we will speak with you again in June.

Thank you. This does conclude today's conference. If you would like to listen to a replay of today's call you may dial 866-400-9642 or 203-369-0547. Again those numbers are 866-400-9642 or 203-369-0547. Thank you and you may disconnect your lines at this time.