DARDEN RESTAURANTS INC, 10-Q filed on 10/3/2014
Quarterly Report
Document and Entity Information
3 Months Ended
Aug. 24, 2014
Sep. 15, 2014
Document And Entity Information Abstract
 
 
Entity Registrant Name
DARDEN RESTAURANTS INC 
 
Entity Central Index Key
0000940944 
 
Current Fiscal Year End Date
--05-31 
 
Entity Filer Category
Large Accelerated Filer 
 
Document Type
10-Q 
 
Document Period End Date
Aug. 24, 2014 
 
Document Fiscal Year Focus
2015 
 
Document Fiscal Period Focus
Q1 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding
 
132,647,480 
Consolidated Statements Of Earnings (Unaudited) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended
Aug. 24, 2014
Aug. 25, 2013
Income Statement [Abstract]
 
 
Sales
$ 1,595.8 
$ 1,531.5 
Cost of sales:
 
 
Food and beverage
502.0 
454.1 
Restaurant labor
508.3 
491.4 
Restaurant expenses
272.3 
262.6 
Total cost of sales, excluding restaurant depreciation and amortization of $72.6 and $68.9, respectively
1,282.6 
1,208.1 
Selling, general and administrative
160.0 
165.6 
Depreciation and amortization
78.7 
74.2 
Interest, net
111.3 
32.8 
Asset impairment, net
6.9 
1.0 
Total costs and expenses
1,639.5 
1,481.7 
(Loss) earnings before income taxes
(43.7)
49.8 
Income tax (benefit) expense
(24.4)
7.6 
(Loss) earnings from continuing operations
(19.3)
42.2 
Earnings from discontinued operations, net of tax expense of $320.7 and $10.7, respectively
522.5 
28.0 
Net earnings
$ 503.2 
$ 70.2 
Basic net earnings per share:
 
 
(Loss) earnings from continuing operations (in dollars per share)
$ (0.14)
$ 0.32 
Earning from discontinued operations (in dollars per share)
$ 3.95 
$ 0.22 
Net earnings (in dollars per share)
$ 3.81 
$ 0.54 
Diluted net earnings per share:
 
 
(Loss) earnings from continuing operations (in dollars per share)
$ (0.14)
$ 0.32 
Earning from discontinued operations (in dollars per share)
$ 3.95 
$ 0.21 
Net earnings (in dollars per share)
$ 3.81 
$ 0.53 
Average number of common shares outstanding:
 
 
Basic (in shares)
132.2 
130.2 
Diluted (in shares)
132.2 
132.6 
Dividends declared per common share (in dollars per share)
$ 0.55 
$ 0.55 
Consolidated Statements Of Earnings (Unaudited) (Parenthetical) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Aug. 24, 2014
Aug. 25, 2013
Income Statement [Abstract]
 
 
Total cost of sales, restaurant depreciation and amortization
$ 72.6 
$ 68.9 
Earnings (losses) from discontinued operations, tax expense (benefit)
$ 320.7 
$ 10.7 
Consolidated Statements of Comprehensive Income (Unaudited) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Aug. 24, 2014
Aug. 25, 2013
Statement of Comprehensive Income [Abstract]
 
 
Net earnings
$ 503.2 
$ 70.2 
Other comprehensive income (loss):
 
 
Foreign currency adjustment
1.5 
(1.0)
Change in fair value of marketable securities, net of taxes of $0.0 and $(0.1), respectively
(0.1)
(0.1)
Change in fair value of derivatives and amortization of unrecognized gains and losses on derivatives, net of taxes of $15.4 and $(1.0), respectively
23.9 
(2.1)
Amortization of unrecognized net actuarial loss, net of taxes of $0.5 and $1.0, respectively
0.3 
1.6 
Other comprehensive income (loss)
25.6 
(1.6)
Total comprehensive income
$ 528.8 
$ 68.6 
Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Aug. 24, 2014
Aug. 25, 2013
Statement of Comprehensive Income [Abstract]
 
 
Change in fair value of marketable securities, tax
$ 0 
$ (0.1)
Change in fair value of derivatives, tax
15.4 
(1.0)
Amortization of unrecognized net actuarial loss, tax
$ 0.5 
$ 1.0 
Consolidated Balance Sheets (Unaudited) (USD $)
In Millions, unless otherwise specified
Aug. 24, 2014
May 25, 2014
Current assets:
 
 
Cash and cash equivalents
$ 413.7 
$ 98.3 
Receivables, net
86.2 
83.8 
Inventories
201.6 
196.8 
Prepaid income taxes
10.9 
Prepaid expenses and other current assets
75.1 
72.3 
Deferred income taxes
173.0 
124.0 
Assets held for sale
54.3 
1,390.3 
Total current assets
1,003.9 
1,976.4 
Land, buildings and equipment, net of accumulated depreciation and amortization of $2,083.8 and $2,050.2, respectively
3,380.0 
3,381.0 
Goodwill
872.5 
872.5 
Trademarks
574.6 
574.6 
Other assets
293.1 
296.2 
Total assets
6,124.1 
7,100.7 
Current liabilities:
 
 
Accounts payable
212.5 
233.1 
Short-term debt
207.6 
Accrued payroll
101.0 
125.7 
Accrued income taxes
337.0 
Other accrued taxes
65.9 
64.5 
Unearned revenues
266.4 
299.7 
Current portion of long-term debt
115.0 
15.0 
Other current liabilities
504.0 
457.4 
Liabilities associated with assets held for sale
215.5 
Total current liabilities
1,601.8 
1,618.5 
Long-term debt, less current portion
1,468.5 
2,481.4 
Deferred income taxes
285.4 
286.1 
Deferred rent
212.6 
206.2 
Obligations under capital leases, net of current installments
51.4 
52.0 
Other liabilities
376.5 
299.6 
Total liabilities
3,996.2 
4,943.8 
Stockholders’ equity:
 
 
Common stock and surplus
817.0 
1,302.2 
Retained earnings
1,426.1 
995.8 
Treasury stock
(7.8)
(7.8)
Accumulated other comprehensive income (loss)
(102.5)
(128.1)
Unearned compensation
(4.9)
(5.2)
Total stockholders’ equity
2,127.9 
2,156.9 
Total liabilities and stockholders’ equity
$ 6,124.1 
$ 7,100.7 
Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)
In Millions, unless otherwise specified
Aug. 24, 2014
May 25, 2014
Statement of Financial Position [Abstract]
 
 
Land, buildings, and equipment, accumulated depreciation and amortization
$ 2,083.8 
$ 2,050.2 
Consolidated Statements Of Changes In Stockholders' Equity (Unaudited) (USD $)
In Millions, unless otherwise specified
Total
Common Stock And Surplus
Retained Earnings
Treasury Stock
Accumulated Other Comprehensive Income (Loss)
Unearned Compensation
Balances at May. 26, 2013
$ 2,059.5 
$ 1,207.6 
$ 998.9 
$ (8.1)
$ (132.8)
$ (6.1)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Net earnings
70.2 
 
70.2 
 
 
 
Other comprehensive income (loss)
(1.6)
 
 
 
(1.6)
 
Dividends declared
(72.0)
 
(72.0)
 
 
 
Stock option exercises (2015: .2 shares and 2014: .2 shares)
6.4 
6.2 
 
0.2 
 
 
Stock-based compensation
5.7 
5.7 
 
 
 
 
ESOP note receivable repayments
0.3 
 
 
 
 
0.3 
Income tax benefits credited to equity
1.6 
1.6 
 
 
 
 
Repurchases of common stock (0.0 shares in 2015 and 2014)
(0.4)
(0.1)
(0.3)
 
 
 
Issuance of stock under Employee Stock Purchase Plan and other plans (0.0 shares in 2015 and 2014)
1.8 
1.8 
 
 
 
 
Balances at Aug. 25, 2013
2,071.5 
1,222.8 
996.8 
(7.9)
(134.4)
(5.8)
Balances at May. 25, 2014
2,156.9 
1,302.2 
995.8 
(7.8)
(128.1)
(5.2)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
Net earnings
503.2 
 
503.2 
 
 
 
Other comprehensive income (loss)
25.6 
 
 
 
25.6 
 
Dividends declared
(72.4)
 
(72.4)
 
 
 
Stock option exercises (2015: .2 shares and 2014: .2 shares)
7.7 
7.7 
 
 
 
 
Stock-based compensation
4.6 
4.6 
 
 
 
 
ESOP note receivable repayments
0.3 
 
 
 
 
0.3 
Income tax benefits credited to equity
1.0 
1.0 
 
 
 
 
Repurchases of common stock (0.0 shares in 2015 and 2014)
(0.6)
(0.1)
(0.5)
 
 
 
Issuance of stock under Employee Stock Purchase Plan and other plans (0.0 shares in 2015 and 2014)
1.6 
1.6 
 
 
 
 
Accelerated share repurchase program
(500.0)
(500.0)
 
 
 
 
Balances at Aug. 24, 2014
$ 2,127.9 
$ 817.0 
$ 1,426.1 
$ (7.8)
$ (102.5)
$ (4.9)
Consolidated Statements Of Changes In Stockholders' Equity (Unaudited) (Parenthetical)
3 Months Ended
Aug. 24, 2014
Aug. 25, 2013
Stock option exercised, shares
200,000 
200,000 
Repurchases of common stock, shares
Issuance of treasury stock under Employee Stock Purchase Plan and other plans, shares
Consolidated Statements Of Cash Flows (Unaudited) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Aug. 24, 2014
Aug. 25, 2013
Cash flows—operating activities
 
 
Net earnings
$ 503.2 
$ 70.2 
Earnings from discontinued operations, net of tax
(522.5)
(28.0)
Adjustments to reconcile net earnings from continuing operations to cash flows:
 
 
Depreciation and amortization
78.7 
74.2 
Asset impairment charges
6.9 
1.0 
Amortization of loan costs and losses on interest-rate related derivatives
3.0 
3.4 
Stock-based compensation expense
6.2 
8.7 
Change in current assets and liabilities
(62.3)
(17.3)
Contributions to pension and postretirement plans
(0.3)
(0.5)
Loss on disposal of land, buildings and equipment
1.9 
0.1 
Change in cash surrender value of trust-owned life insurance
(2.6)
(1.6)
Deferred income taxes
(22.6)
(5.7)
Change in deferred rent
6.7 
7.6 
Change in other assets and liabilities
(1.4)
7.3 
Loss on extinguishment of debt
80.0 
Other, net
2.1 
3.0 
Net cash provided by operating activities of continuing operations
77.0 
122.4 
Cash flows—investing activities
 
 
Purchases of land, buildings and equipment
(81.7)
(120.4)
Proceeds from disposal of land, buildings and equipment
1.6 
Proceeds from sale of marketable securities
5.1 
Increase in other assets
(3.9)
(8.6)
Net cash used in investing activities of continuing operations
(80.5)
(127.4)
Cash flows—financing activities
 
 
Proceeds from issuance of common stock
9.3 
8.2 
Income tax benefits credited to equity
1.0 
1.6 
Dividends paid
(72.8)
(71.7)
Repurchases of common stock
(0.6)
(0.4)
ESOP note receivable repayment
0.3 
0.3 
Proceeds from issuance of short-term debt
377.4 
508.7 
Repayments of short-term debt
(585.0)
(461.2)
Repayment of long-term debt
(949.9)
Principal payments on capital leases
(0.5)
(0.5)
Payment for accelerated share repurchase program
(500.0)
Proceeds from financing lease obligation
93.1 
Net cash used in financing activities of continuing operations
(1,627.7)
(15.0)
Cash flows—discontinued operations
 
 
Net cash (used in) provided by operating activities of discontinued operations
(32.4)
94.6 
Net cash provided by (used in) investing activities of discontinued operations
1,979.0 
(53.9)
Net cash provided by discontinued operations
1,946.6 
40.7 
Increase in cash and cash equivalents
315.4 
20.7 
Cash and cash equivalents - beginning of period
98.3 
88.2 
Cash and cash equivalents - end of period
413.7 
108.9 
Cash flows from changes in current assets and liabilities
 
 
Receivables, net
12.5 
3.9 
Inventories
26.8 
5.6 
Prepaid expenses and other current assets
10.1 
(7.8)
Accounts payable
(39.8)
9.3 
Accrued payroll
(16.7)
(7.6)
Prepaid/accrued income taxes
(18.5)
8.2 
Other accrued taxes
3.4 
0.4 
Unearned revenues
(25.1)
(20.7)
Other current liabilities
(15.0)
(8.6)
Change in current assets and liabilities
(62.3)
(17.3)
Supplemental schedule of noncash investing activities:
 
 
Increase in land, buildings and equipment through accrued purchases
$ 30.5 
$ 48.8 
Basis of Presentation
Basis of Presentation
Basis of Presentation
Darden Restaurants, Inc. (we, our or the Company) owns and operates full-service dining restaurants in the United States and Canada under the trade names Olive Garden®, LongHorn Steakhouse®, The Capital Grille®, Yard House®, Bahama Breeze®, Seasons 52®, Eddie V's Prime Seafood® and Wildfish Seafood Grille®. We have prepared these consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally presented in annual financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal recurring nature. We operate on a 52/53 week fiscal year, which ends on the last Sunday in May and our fiscal year ending May 31, 2015 will contain 53 weeks of operation. Operating results for the quarter ended August 24, 2014 are not necessarily indicative of the results that may be expected for the fiscal year ending May 31, 2015.
These statements should be read in conjunction with the consolidated financial statements and related notes to consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended May 25, 2014. The accounting policies used in preparing these consolidated financial statements are the same as those described in our Form 10-K.
We prepare our consolidated financial statements in conformity with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of sales and costs and expenses during the reporting period. Actual results could differ from those estimates.
Red Lobster Sale
On May 15, 2014, we entered into an agreement to sell Red Lobster and certain related assets and associated liabilities and closed on the sale on July 28, 2014. For the quarters ended August 24, 2014 and August 25, 2013, all gains on disposition, impairment charges and disposal costs, along with the sales, costs and expenses and income taxes attributable to Red Lobster and two closed synergy locations, have been aggregated in a single caption entitled “Earnings from discontinued operations, net of tax expense” in our consolidated statements of earnings for all periods presented. See Note 2 - Dispositions for additional information.
Dispositions
Dispositions
Dispositions
On July 28, 2014, we closed on the sale of 705 Red Lobster restaurants, however, as of August 24, 2014, 37 of the properties remain subject to landlord consents and satisfaction of other contractual requirements, which are expected to be satisfied within the next 12 months. Therefore, the assets of these remaining restaurants continue to be classified as held for sale and recognition of the gain on the related proceeds was deferred. The proceeds of approximately $80.7 million associated with landlord consents are classified as other current liabilities on our consolidated balance sheet as of August 24, 2014. As the landlord consents and remaining contractual requirements are satisfied, we will derecognize the related assets and record the commensurate gain on the transaction. In conjunction with the sale of Red Lobster, there were 19 locations where Red Lobster shared a land parcel with another Darden brand. The land and related buildings for these 19 Darden locations were included in the sale transaction and simultaneously leased back to Darden. The proceeds associated with the sale of these properties are classified as a financing lease obligation on our consolidated balance sheet as a component of other liabilities and the associated lease payments will amortize the obligation over the life of the properties. Additionally, in the fourth quarter of fiscal 2014, in connection with the expected sale of Red Lobster, we closed two of the six restaurants that housed both a Red Lobster and an Olive Garden in the same building (synergy restaurants). In the first quarter of fiscal 2015, we completed the conversion of the four remaining synergy restaurants to stand-alone Olive Garden restaurants.
As of August 24, 2014, we have received $2.08 billion in cash proceeds, net of transaction-related costs of approximately $29.3 million. For the quarter ended August 24, 2014, we recognized a gain on the sale of Red Lobster of $817.2 million, which is included in earnings from discontinued operations in our consolidated statement of earnings.
For the quarters ended August 24, 2014 and August 25, 2013, all gains on disposition, impairment charges and disposal costs, along with the sales, costs and expenses and income taxes attributable to these restaurants, have been aggregated in a single caption entitled “Earnings from discontinued operations, net of tax expense” in our consolidated statements of earnings for all periods presented. No amounts for shared general and administrative operating support expense or interest expense were allocated to discontinued operations. Assets associated with those restaurants not yet disposed of, that are considered held for sale, have been segregated from continuing operations and presented as assets held for sale on our accompanying consolidated balance sheets. Earnings from discontinued operations, net of taxes in our accompanying consolidated statements of earnings are comprised of the following:
 
Three Months Ended
(in millions)
August 24, 2014
 
August 25, 2013
Sales
$
400.4

 
$
627.0

 
 
 
 
Earnings before income taxes
843.2

 
38.7

Income tax expense
320.7

 
10.7

Earnings from discontinued operations, net of tax
$
522.5

 
$
28.0


The following table presents the carrying amounts of the major classes of assets and liabilities associated with the restaurants reported as discontinued operations and classified as held for sale on our accompanying consolidated balance sheets:
(in millions)
August 24, 2014
 
May 25,
 2014
Current assets
$

 
$
241.0

Land, buildings and equipment, net
54.3

 
1,084.8

Other assets

 
64.5

Total assets
$
54.3

 
$
1,390.3

 
 
 
 
Current liabilities
$

 
$
130.6

Other liabilities

 
84.9

Total liabilities
$

 
$
215.5

Supplemental Cash Flow Information
Supplemental Cash Flow Information
Supplemental Cash Flow Information
 
 
Three Months Ended
(in millions)
 
August 24, 2014
 
August 25, 2013
Interest paid, net of amounts capitalized
 
$
54.0

 
$
9.0

Income taxes paid, net of refunds
 
10.2

 
19.0


For the three months ended August 24, 2014, interest paid includes costs associated with the retirement of long-term debt (see Note 13 - Long-Term Debt for further information), of $34.9 million in addition to $12.2 million of interest accrued through the date of the retirement.
Stock-Based Compensation
Stock-Based Compensation
Stock-Based Compensation
We grant stock options for a fixed number of shares to certain employees and directors with an exercise price equal to the fair value of the shares at the date of grant. We also grant restricted stock, restricted stock units, and performance stock units with a fair value determined based on our closing stock price on the date of grant. In addition, we also grant cash settled stock units (Darden Stock Units) and cash settled performance stock units, which are classified as liabilities and are marked to market as of the end of each period.
The weighted-average fair value of non-qualified stock options and the related assumptions used in the Black-Scholes option pricing model were as follows: 
 
Stock Options Granted
 
Three Months Ended
 
August 24, 2014
 
August 25, 2013
Weighted-average fair value
$
10.35

 
$
12.07

Dividend yield
4.5
%
 
4.4
%
Expected volatility of stock
37.3
%
 
39.6
%
Risk-free interest rate
2.1
%
 
1.9
%
Expected option life (in years)
6.5

 
6.4


 
The following table presents a summary of our stock-based compensation activity for the three months ended August 24, 2014: 
(in millions)
 
Stock
Options
 
Restricted
Stock/
Restricted
Stock
Units
 
Darden
Stock
Units
 
Performance
Stock Units
Outstanding beginning of period
 
11.2

 
0.2

 
2.1

 
0.3

Awards granted
 
1.0

 

 
0.5

 
0.1

Awards exercised
 
(0.2
)
 

 
(0.4
)
 
(0.1
)
Awards forfeited
 
(0.2
)
 

 
(0.6
)
 
(0.2
)
Performance unit adjustment
 

 

 

 
0.4

Outstanding end of period
 
11.8

 
0.2

 
1.6

 
0.5


We recognized expense from stock-based compensation as follows: 
 
 
Three Months Ended
(in millions)
 
August 24,
2014
 
August 25,
2013
Stock options
 
$
3.2

 
$
4.2

Restricted stock/restricted stock units
 
0.4

 
0.4

Darden stock units
 
1.3

 
1.8

Performance stock units
 
0.9

 
1.8

Employee stock purchase plan
 
0.4

 
0.5

Total stock-based compensation expense
 
$
6.2

 
$
8.7


As of the effective date of the Red Lobster sale, all outstanding, unvested stock options, restricted stock and Darden stock units held by Darden employees that transferred to Red Lobster were either vested on a pro-rata basis or canceled. Approximately 23.7 thousand performance stock units remain outstanding and are expected to be settled on a pro-rata basis on the scheduled dates in the first quarter of fiscal 2016 and 2017 when the applicable performance factors are determined.
Income Taxes
Income Taxes
Income Taxes
The effective income tax rate of 55.8 percent for the quarter ended August 24, 2014 reflected a tax benefit of $24.4 million on a loss before income taxes from continuing operations of $43.7 million. The effective income tax rate of 15.3 percent for the quarter ended August 25, 2013 reflected tax expense of $7.6 million on earnings before income taxes from continuing operations of $49.8 million. The change in the effective income tax rate for the quarter ended August 24, 2014 as compared to the quarter ended August 25, 2013 is primarily attributable to a $30.6 million tax benefit related to $80.0 million of debt breakage costs associated with the retirement of long-term debt. Excluding the impact of these costs and the related tax benefit, our effective income tax rate for the quarter ended August 24, 2014 would have been approximately 17.0 percent.
Included in our remaining balance of unrecognized tax benefits is $27.1 million related to tax positions for which it is reasonably possible that the total amounts could change within the next twelve months based on the outcome of examinations or as a result of the expiration of the statute of limitations for specific jurisdictions.
Net Earnings per Share
Net Earnings per Share
Net Earnings per Share
Outstanding stock options and restricted stock granted by us represent the only dilutive effect reflected in diluted weighted average shares outstanding. Stock options and restricted stock do not impact the numerator of the diluted net earnings per share computation. Stock options and restricted stock excluded from the calculation of diluted net earnings per share because the effect would have been anti-dilutive, are as follows: 
 
 
Three Months Ended
(in millions)
 
August 24,
2014
 
August 25,
2013
Anti-dilutive stock options and restricted stock
 
6.4

 
3.4

Stockholders' Equity
Accumulated Other Comprehensive Income (Loss)
Share Repurchase Program
In July 2014, as part of the previously authorized share repurchase program, we entered into accelerated share repurchase (ASR) agreements with Goldman, Sachs & Co. and Wells Fargo Bank, National Association (Dealers), which were amended and restated in September 2014 solely to address non-substantive technical clarifications. The ASR program provides for the repurchase of an aggregate of $500.0 million of our common stock.  Under the ASR agreements, we paid an aggregate of $500.0 million to the Dealers in August 2014 and will receive an initial delivery of approximately 8.6 million shares in October 2014, which represents approximately 80.0 percent of the total shares that will be repurchased under the ASR transactions based on current share prices. After consideration of the provisions of Accounting Standards Codification (ASC) Topic 815, Derivatives and Hedging, and ASC Topic 480, Distinguishing Liabilities from Equity, we concluded that the transaction qualifies for permanent equity classification. Accordingly, the $500.0 million payment was recorded as a reduction to shareholders’ equity and is reflected in common stock and surplus on our consolidated balance sheet as of August 24, 2014. The total number of shares we ultimately purchase in ASR transactions will be determined based on the average of the daily volume-weighted average share price of our common stock over the duration of the ASR transactions, less an agreed discount, and is subject to certain adjustments under the agreements. The agreements contemplate that final settlement is expected to occur in, or prior to, December 2014, although the completion date may be accelerated or, under certain circumstances, extended.  At settlement, we may be entitled to receive additional shares of our common stock from a Dealer or, under certain circumstances, may be required to deliver shares or make a cash payment (at our option) to a Dealer. As of August 24, 2014, no shares repurchased under this program have been delivered and there was no impact on our weighted average number of common shares outstanding for the quarter ended August 24, 2014.

Accumulated Other Comprehensive Income (Loss)
The components of accumulated other comprehensive income (loss), net of tax, for the quarters ended August 24, 2014 and August 25, 2013 are as follows:
(in millions)
Foreign Currency Translation Adjustment
 
Unrealized Gains (Losses) on Marketable Securities
 
Unrealized Gains (Losses) on Derivatives
 
Benefit Plan Funding Position
 
Accumulated Other Comprehensive Income (Loss)
Balance at May 25, 2014
$
(4.7
)
 
$
0.1

 
$
(50.4
)
 
$
(73.1
)
 
$
(128.1
)
Gain (loss)
(1.2
)
 
(0.1
)
 
(2.0
)
 

 
(3.3
)
Reclassification realized in net earnings
2.7

 

 
25.9

 
0.3

 
28.9

Balance at August 24, 2014
$
(3.2
)
 
$

 
$
(26.5
)
 
$
(72.8
)
 
$
(102.5
)
 
 
 
 
 
 
 
 
 
 
Balance at May 26, 2013
$
(1.8
)
 
$
0.2

 
$
(53.8
)
 
$
(77.4
)
 
$
(132.8
)
Gain (loss)
(1.0
)
 
(0.1
)
 
(4.4
)
 

 
(5.5
)
Reclassification realized in net earnings

 

 
2.3

 
1.6

 
3.9

Balance at August 25, 2013
$
(2.8
)
 
$
0.1

 
$
(55.9
)
 
$
(75.8
)
 
$
(134.4
)

The following table presents the amounts and line items in our consolidated statements of earnings where adjustments reclassified from AOCI into net earnings were recorded:
 
 
 
Amount Reclassified from AOCI into Net Earnings
 
 
 
Three Months Ended
(in millions)
AOCI Components
Location of Gain (Loss) Recognized in Earnings
 
August 24,
2014
 
August 25,
2013
Derivatives
 
 
 
 
 
Commodity contracts
(1)
 
$

 
$
(0.2
)
Equity contracts
(2)
 
(0.9
)
 
(0.7
)
Interest rate contracts
Interest, net
 
(40.5
)
 
(2.6
)
Foreign currency contracts
(2)
 

 
0.1

 
Total before tax
 
$
(41.4
)
 
$
(3.4
)
 
Tax benefit
 
15.5

 
1.1

 
Net of tax
 
$
(25.9
)
 
$
(2.3
)
 
 
 
 
 
 
Benefit plan funding position
 
 
 
 
 
Recognized net actuarial loss - pension/postretirement plans
(3)
 
$
(0.6
)
 
$
(2.3
)
Recognized net actuarial loss - other plans
(4)
 
(0.2
)
 
(0.3
)
 
Total before tax
 
$
(0.8
)
 
$
(2.6
)
 
Tax benefit
 
0.5

 
1.0

 
Net of tax
 
$
(0.3
)
 
$
(1.6
)
(1)
Primarily included in cost of sales. See Note 9 for additional details.
(2)
Primarily included in cost of sales and selling, general and administrative expenses. See Note 9 for additional details.
(3)
Included in the computation of net periodic benefit costs - pension and postretirement plans, which is a component of restaurant labor expenses and selling, general and administrative expenses. See Note 8 for additional details.
(4)
Included in the computation of net periodic benefit costs - other plans, which is a component of selling, general and administrative expenses.
Retirement Plans
Retirement Plans
Retirement Plans
Components of net periodic benefit cost are as follows:
 
 
Defined Benefit Plans
 
 
Three Months Ended
(in millions)
 
August 24,
2014
 
August 25,
2013
Service cost
 
$
0.2

 
$
1.1

Interest cost
 
2.1

 
2.5

Expected return on plan assets
 
(3.1
)
 
(4.3
)
Recognized net actuarial loss
 
0.5

 
2.3

Net periodic benefit cost
 
$
(0.3
)
 
$
1.6

 
 
 
Postretirement Benefit Plan
 
 
Three Months Ended
(in millions)
 
August 24,
2014
 
August 25,
2013
Service cost
 
$
0.2

 
$
0.2

Interest cost
 
0.4

 
0.3

Recognized net actuarial loss
 
0.1

 

Net periodic benefit cost
 
$
0.7

 
$
0.5

Derivative Instruments And Hedging Activities
Derivative Instruments And Hedging Activities
Derivative Instruments and Hedging Activities
We enter into derivative instruments for risk management purposes only, including derivatives designated as hedging instruments as required by ASC Topic 815, Derivatives and Hedging, and those utilized as economic hedges. We use financial and commodities derivatives to manage interest rate, compensation and commodities pricing and foreign currency exchange rate risks inherent in our business operations. To the extent our derivatives are effective in offsetting the variability of the hedged cash flows, and otherwise meet the cash flow hedge accounting criteria required by ASC Topic 815, changes in the derivatives’ fair value are not included in current earnings but are included in accumulated other comprehensive income (loss), net of tax. These changes in fair value will be reclassified into earnings at the time of the forecasted transaction. Ineffectiveness measured in the hedging relationship is recorded currently in earnings in the period in which it occurs. To the extent our derivatives are effective in mitigating changes in fair value, and otherwise meet the fair value hedge accounting criteria required by ASC Topic 815, gains and losses in the derivatives’ fair value are included in current earnings, as are the gains and losses of the related hedged item. To the extent the hedge accounting criteria are not met, the derivative contracts are utilized as economic hedges and changes in the fair value of such contracts are recorded currently in earnings in the period in which they occur.
By using these instruments, we expose ourselves, from time to time, to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us. We minimize this credit risk by entering into transactions with high quality counterparties. We currently do not have any provisions in our agreements with counterparties that would require either party to hold or post collateral in the event that the market value of the related derivative instrument exceeds a certain limit. As such, the maximum amount of loss due to counterparty credit risk we would incur at August 24, 2014, if counterparties to the derivative instruments failed completely to perform, would approximate the values of derivative instruments currently recognized as assets in our consolidated balance sheet. Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates, commodity prices, currency prices, or the market price of our common stock. We minimize this market risk by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken. 
The notional values of our derivative contracts are as follows: 
 
 
Notional Values
(in millions)
 
August 24,
2014
 
May 25,
2014
Derivative contracts designated as hedging instruments
 
 
 
 
Commodities
 
$

 
$
0.9

Foreign currency
 

 
0.3

Interest rate swaps
 
200.0

 
200.0

Equity forwards
 
18.0

 
20.6

Derivative contracts not designated as hedging instruments
 
 
 
 
Equity forwards
 
$
45.1

 
$
47.4


We are currently party to interest-rate swap agreements with $200.0 million of notional value to limit the risk of changes in fair value of a portion of the $121.9 million 4.500 percent senior notes due October 2021 and a portion of the $500.0 million 6.200 percent senior notes due October 2017. The swap agreements effectively swap the fixed-rate obligations for floating-rate obligations, thereby mitigating changes in fair value of the related debt prior to maturity. The swap agreements were designated as fair value hedges of the related debt and met the requirements to be accounted for under the short-cut method, resulting in no ineffectiveness in the hedging relationship. During the quarters ended August 24, 2014 and August 25, 2013, $0.5 million and $0.5 million, respectively, was recorded as a reduction to interest expense related to the net swap settlements.
We enter into equity forward contracts to hedge the risk of changes in future cash flows associated with the unvested, unrecognized Darden stock units. The equity forward contracts will be settled at the end of the vesting periods of their underlying Darden stock units, which range between four and five years. The contracts were initially designated as cash flow hedges to the extent the Darden stock units are unvested and, therefore, unrecognized as a liability in our financial statements. As of August 24, 2014, we were party to equity forward contracts that were indexed to 0.8 million shares of our common stock, at varying forward rates between $31.19 per share and $52.66 per share, extending through August 2018. The forward contracts can only be net settled in cash. As the Darden stock units vest, we will de-designate that portion of the equity forward contract that no longer qualifies for hedge accounting and changes in fair value associated with that portion of the equity forward contract will be recognized in current earnings. We periodically incur interest on the notional value of the contracts and receive dividends on the underlying shares. These amounts are recognized currently in earnings as they are incurred.
We entered into equity forward contracts to hedge the risk of changes in future cash flows associated with cash-settled performance stock units and employee-directed investments in Darden stock within the non-qualified deferred compensation plan. The equity forward contracts are indexed to 0.2 million shares of our common stock at forward rates between $46.17 and $51.95 per share, can only be net settled in cash and expire between fiscal 2016 and 2019. We did not elect hedge accounting with the expectation that changes in the fair value of the equity forward contracts would offset changes in the fair value of the performance stock units and Darden stock investments in the non-qualified deferred compensation plan within selling, general and administrative expenses in our consolidated statements of earnings.
The fair value of our derivative contracts are as follows:
  
 
Balance
Sheet
Location
 
Derivative Assets
 
Derivative Liabilities
(in millions)
 
August 24,
2014
 
May 25,
2014
 
August 24,
2014
 
May 25,
2014
Derivative contracts designated as hedging instruments
 
 
 
 
 
 
 
 
 
 
Equity forwards
 
(1)
 
0.5

 

 

 
(0.5
)
Interest rate related
 
(1)
 
2.3

 
1.6

 

 

Foreign currency forwards
 
(1)
 

 
0.1

 

 

 
 
 
 
$
2.8

 
$
1.7

 
$

 
$
(0.5
)
Derivative contracts not designated as hedging instruments
 
 
 
 
 
 
 
 
 
 
Equity forwards
 
(1)
 
0.8

 

 

 
(1.2
)
 
 
 
 
$
0.8

 
$

 
$

 
$
(1.2
)
Total derivative contracts
 
$
3.6

 
$
1.7

 
$

 
$
(1.7
)
 
(1)
Derivative assets and liabilities are included in receivables, net, prepaid expenses and other current assets and other current liabilities, as applicable, on our consolidated balance sheets.

The effects of derivative instruments in cash flow hedging relationships in the consolidated statements of earnings are as follows:
(in millions)
 
Amount of Gain (Loss)
Recognized in AOCI
(effective portion)
 
Location of
Gain (Loss)
Reclassified
from AOCI to
Earnings
 
Amount of Gain (Loss)
Reclassified from AOCI to
Earnings (effective portion)
 
Location of
Gain (Loss)
Recognized
in Earnings
(ineffective
portion)
 
(1) Amount of Gain (Loss)
Recognized in Earnings
(ineffective portion)
 
 
Three Months Ended
 
 
 
Three Months Ended
 
 
 
Three Months Ended
Type of Derivative
 
August 24,
2014
 
August 25,
2013
 
 
 
August 24,
2014
 
August 25,
2013
 
 
 
August 24,
2014
 
August 25,
2013
Commodity
 
$

 
$
(0.4
)
 
(2)
 
$

 
$
(0.2
)
 
(2)
 
$

 
$

Equity
 
(2.0
)
 
(4.3
)
 
(3)
 
(0.9
)
 
(0.7
)
 
(3)
 
0.3

 
0.3

Interest rate
 

 

 
Interest, net
 
(40.5
)
 
(2.6
)
 
Interest, net
 

 

Foreign currency
 

 
0.2

 
(4)
 

 
0.1

 
(4)
 

 

 
 
$
(2.0
)
 
$
(4.5
)
 
 
 
$
(41.4
)
 
$
(3.4
)
 
 
 
$
0.3

 
$
0.3



 
(1)
Generally, all of our derivative instruments designated as cash flow hedges have some level of ineffectiveness, which is recognized currently in earnings. However, as these amounts are generally nominal and our consolidated financial statements are presented “in millions,” these amounts may appear as zero in this tabular presentation.
(2)
Location of the gain (loss) reclassified from AOCI to earnings as well as the gain (loss) recognized in earnings for the ineffective portion of the hedge is food and beverage costs and restaurant expenses, which are components of cost of sales.
(3)
Location of the gain (loss) reclassified from AOCI to earnings as well as the gain (loss) recognized in earnings for the ineffective portion of the hedge is restaurant labor expenses, which is a component of cost of sales, and selling, general and administrative expenses.
(4)
Location of the gain (loss) reclassified from AOCI to earnings as well as the gain (loss) recognized in earnings for the ineffective portion of the hedge is food and beverage costs, which is a component of cost of sales, and selling, general and administrative expenses.
 
The effects of derivative instruments in fair value hedging relationships in the consolidated statements of earnings are as follows:
(in millions)
 
Amount of Gain (Loss)
Recognized in Earnings on
Derivatives
 
Location of
Gain (Loss)
Recognized in
Earnings on
Derivatives
 
Hedged Item in
Fair Value Hedge
Relationship
 
Amount of Gain (Loss)
Recognized in Earnings on
Related Hedged Item
 
Location of
Gain (Loss)
Recognized in
Earnings on
Related
Hedged Item
 
 
Three Months Ended
 
 
 
 
 
Three Months Ended
 
 
 
 
August 24,
2014
 
August 25,
2013
 
 
 
 
 
August 24,
2014
 
August 25,
2013
 
 
Interest rate
 
$
0.7

 
$
(4.9
)
 
Interest, net
 
Fixed-rate debt
 
$
(0.7
)
 
$
4.9

 
Interest, net


The effects of derivatives not designated as hedging instruments in the consolidated statements of earnings are as follows:
  
 
Location of Gain (Loss) Recognized
 in Earnings on Derivatives
 
Amount of Gain (Loss) Recognized in Earnings
 
 
Three Months Ended
 
 
August 24, 2014
 
August 25, 2013
(in millions)
 
 
Commodity contracts
 
Cost of Sales (1)
 
$

 
$
(0.5
)
Equity forwards
 
Cost of Sales (2)
 
(0.6
)
 
(1.5
)
Equity forwards
 
Selling, General and Administrative
 
(1.8
)
 
(4.0
)
 
 
 
 
$
(2.4
)
 
$
(6.0
)
 
(1)
Location of the gain (loss) recognized in earnings is food and beverage costs and restaurant expenses, which are components of cost of sales.
(2)
Location of the gain (loss) recognized in earnings is restaurant labor expenses, which is a component of cost of sales.
Based on the fair value of our derivative instruments designated as cash flow hedges as of August 24, 2014, we expect to reclassify $5.2 million of net losses on derivative instruments from accumulated other comprehensive income (loss) to earnings during the next twelve months based on the maturity of our equity forward contracts and amortization of deferred losses on settled interest-rate related instruments. However, the amounts ultimately realized in earnings will be dependent on the fair value of the contracts on the settlement dates.
Fair Value Measurements
Fair Value Measurements
Fair Value Measurements
The fair values of cash equivalents, accounts receivable, accounts payable and short-term debt approximate their carrying amounts due to their short duration.
The following tables summarize the fair values of financial instruments measured at fair value on a recurring basis as reflected on our consolidated balance sheets as of August 24, 2014 and May 25, 2014: 
Items Measured at Fair Value at August 24, 2014
(in millions)
 
 
Fair value
of assets
(liabilities)
 
Quoted prices
in active
market for
identical assets
(liabilities)
(Level 1)
 
Significant
other
observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
Fixed-income securities:
 
 
 
 
 
 
 
 
 
Corporate bonds
(1
)
 
$
5.6

 
$

 
$
5.6

 
$

U.S. Treasury securities
(2
)
 
5.1

 
5.1

 

 

Mortgage-backed securities
(1
)
 
2.6

 

 
2.6

 

Derivatives:
 
 
 
 
 
 
 
 
 
Equity forwards
(3
)
 
1.3

 

 
1.3

 

Interest rate swaps
(4
)
 
2.3

 

 
2.3

 

Foreign currency forwards
(5
)
 

 

 

 

Total
 
 
$
16.9

 
$
5.1

 
$
11.8

 
$

 
Items Measured at Fair Value at May 25, 2014
(in millions)
 
 
Fair value
of assets
(liabilities)
 
Quoted prices
in active
market for
identical assets
(liabilities)
(Level 1)
 
Significant
other
observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
Fixed-income securities:
 
 
 
 
 
 
 
 
 
Corporate bonds
(1
)
 
$
9.7

 
$

 
$
9.7

 
$

U.S. Treasury securities
(2
)
 
6.1

 
6.1

 

 

Mortgage-backed securities
(1
)
 
2.6

 

 
2.6

 

Derivatives:
 
 

 

 

 

Equity forwards
(3
)
 
(1.7
)
 

 
(1.7
)
 

Interest rate locks & swaps
(4
)
 
1.6

 

 
1.6

 

Foreign currency forwards
(5
)
 
0.1

 

 
0.1

 

Total
 
 
$
18.4

 
$
6.1

 
$
12.3

 
$

(1)
The fair value of these securities is based on closing market prices of the investments when applicable, or, alternatively, valuations utilizing market data and other observable inputs, inclusive of the risk of nonperformance.
(2)
The fair value of our U.S. Treasury securities is based on closing market prices.
(3)
The fair value of our equity forwards is based on the closing market value of Darden stock, inclusive of the risk of nonperformance.
(4)
The fair value of our interest rate lock and swap agreements is based on current and expected market interest rates, inclusive of the risk of nonperformance.
(5)
The fair value of our foreign currency forward contracts is based on closing forward exchange market prices, inclusive of the risk of nonperformance.
The carrying value and fair value of long-term debt, including the amounts included in current liabilities, as of August 24, 2014, was $1.58 billion and $1.69 billion, respectively. The carrying value and fair value of long-term debt, including the amounts included in current liabilities, as of May 25, 2014, was $2.50 billion and $2.63 billion, respectively. The fair value of long-term debt, which is classified as Level 2 in the fair value hierarchy, is determined based on market prices or, if market prices are not available, the present value of the underlying cash flows discounted at our incremental borrowing rates.
Adjustments to the fair values of non-financial assets measured at fair value on a non-recurring basis as of August 24, 2014 and May 25, 2014 were not material.
Commitments And Contingencies
Commitments and Contingencies
Commitments and Contingencies
As collateral for performance on contracts and as credit guarantees to banks and insurers, we are contingently liable for guarantees of subsidiary obligations under standby letters of credit. As of August 24, 2014 and May 25, 2014, we had $124.2 million and $113.5 million, respectively, of standby letters of credit related to workers’ compensation and general liabilities accrued in our consolidated financial statements. As of August 24, 2014 and May 25, 2014, we had $14.5 million and $17.8 million, respectively, of standby letters of credit related to contractual operating lease obligations and other payments. All standby letters of credit are renewable annually.
As of August 24, 2014 and May 25, 2014, we had $138.3 million and $3.4 million, respectively, of guarantees associated with leased properties that have been assigned to third parties. These amounts represent the maximum potential amount of future payments under the guarantees. The fair value of the maximum potential future payments discounted at our pre-tax cost of capital as of August 24, 2014 and May 25, 2014, amounted to $105.3 million and $2.7 million, respectively. We did not record a liability for the guarantees, as the likelihood of the third parties defaulting on the assignment agreements was deemed to be remote. In the event of default by a third party, the indemnity and default clauses in our assignment agreements govern our ability to recover from and pursue the third party for damages incurred as a result of its default. We do not hold any third-party assets as collateral related to these assignment agreements, except to the extent that the assignment allows us to repossess the building and personal property. Assuming exercise of all option periods, these guarantees expire over their respective lease terms, which range from fiscal 2015 through fiscal 2044.
We are subject to private lawsuits, administrative proceedings and claims that arise in the ordinary course of our business. A number of these lawsuits, proceedings and claims may exist at any given time. These matters typically involve claims from guests, employees and others related to operational issues common to the restaurant industry, and can also involve infringement of, or challenges to, our trademarks. While the resolution of a lawsuit, proceeding or claim may have an impact on our financial results for the period in which it is resolved, we believe that the final disposition of the lawsuits, proceedings and claims in which we are currently involved, either individually or in the aggregate, will not have a material adverse effect on our financial position, results of operations or liquidity. The following is a brief description of the more significant of these matters.
In September 2012, a collective action under the Fair Labor Standards Act was filed in the United States District Court for the Southern District of Florida, Alequin v. Darden Restaurants, Inc., in which named plaintiffs claim that the Company required or allowed certain employees at Olive Garden, Red Lobster, LongHorn Steakhouse, Bahama Breeze and Seasons 52  to work off the clock and required them to perform tasks unrelated to their tipped duties while taking a tip credit against their hourly rate of pay.  The plaintiffs seek an unspecified amount of alleged back wages, liquidated damages, and attorneys' fees.  In July 2013, the United States District Court for the Southern District of Florida conditionally certified a nationwide class of servers and bartenders who worked in the aforementioned restaurants at any point from September 6, 2009 through September 6, 2012.  Unlike a class action, a collective action requires potential class members to “opt in” rather than “opt out” following the issuance of a notice.  Out of the approximately 217,000 opt-in notices distributed, 20,225 were returned. In June 2014, the Company filed a motion seeking to have the class de-certified. In September 2014, the court granted the Company’s motion to decertify the class which resulted in the dismissal of all opt-ins. Unless the Plaintiffs’ appeal the Court’s decision, only the claims of the original named plaintiffs remain. We believe that our wage and hour policies comply with the law and that we have meritorious defenses to the substantive claims in this matter. An estimate of the possible loss, if any, or the range of loss cannot be made at this stage of the proceeding.
In November, 2011, a lawsuit entitled ChHab v. Darden Restaurants, Inc. was filed in the United States District Court for the Southern District of New York alleging a collective action under the Fair Labor Standards Act and a class action under the applicable New York state wage and hour statutes. The named plaintiffs claim that the Company required or allowed certain employees at The Capital Grille to work off the clock, share tips with individuals who polished silverware to assist the plaintiffs, and required the plaintiffs to perform tasks unrelated to their tipped duties while taking a tip credit against their hourly rate of pay. The plaintiffs seek an unspecified amount of alleged back wages, liquidated damages, and attorneys' fees. In September 2013, the United States District Court for the Southern District of New York conditionally certified a nationwide class for the Fair Labor Standards Act claims only of tipped employees who worked in the aforementioned restaurants at any point from November 17, 2008 through September 19, 2013. Potential class members are required to “opt in” rather than “opt out” following the issuance of a notice. Out of the approximately 3,200 opt-in notices distributed, 541 were returned. As with the Alequin matter, the Company will have an opportunity to seek to have the class de-certified and/or seek to have the case dismissed on its merits. We believe that our wage and hour policies comply with the law and that we have meritorious defenses to the substantive claims in this matter. An estimate of the possible loss, if any, or the range of loss cannot be made at this stage of the proceeding.
Workforce Reduction Costs
Work Reduction Costs
Workforce Reduction Costs
During fiscal 2014, we performed comprehensive reviews of our operations and support structure resulting in changes in our growth plans and related support structure needs. As a result, we had workforce reductions and program spending cuts in September 2013 (September 2013 Plan), January 2014 (January 2014 Plan) and May 2014 (May 2014 Plan). In accordance with these actions, we incurred employee termination benefits costs and other costs. The following table summarizes the accrued employee termination benefits and other costs which are primarily included in other current liabilities in our consolidated balance sheet as of August 24, 2014:
(in millions)
 
September
2013 Plan
 
January
2014 Plan
 
May
2014 Plan
 
Payments
 
Adjustments
 
Balance at August 24, 2014
Employee termination benefits (1)
 
$
7.7

 
$
0.7

 
$
5.0

 
$
(8.0
)
 
$
(0.6
)
 
$
4.8

Other
 
0.8

 
0.1

 
0.2

 
(0.7
)
 
(0.2
)
 
0.2

Total
 
$
8.5

 
$
0.8

 
$
5.2

 
$
(8.7
)
 
$
(0.8
)
 
$
5.0

(1)
Excludes costs associated with stock options and restricted stock that will be settled in shares upon vesting.
We expect the remaining liability to be paid by the first quarter of fiscal 2017.
Long-Term Debt
Long-term Debt
Long-Term Debt
In the first quarter of fiscal 2015, we completed the retirement of approximately $900.0 million of the previously announced $1.00 billion aggregate principal retirement of long-term debt. The $900.0 million retirement was comprised of $278.1 million aggregate principal of our 4.500 percent senior notes due 2021, $331.9 million aggregate principal of our 3.350 percent senior notes due 2022, $80.0 million aggregate principal amount of our 3.790 percent senior notes due 2019 and $210.0 million aggregate principal amount of our 4.520 percent senior notes due 2024. The retirement of the remaining $100.0 million aggregate principal amount of our outstanding 7.125 percent debentures due 2016 called for redemption was completed early in the second quarter of fiscal 2015 and was reflected on our consolidated balance sheet as of August 24, 2014 as current portion of long-term debt.
During the first quarter of fiscal 2015, we recorded approximately $80.0 million of expenses associated with the $900.0 million aggregate principal retirement including cash costs of approximately $34.9 million for repurchase premiums and make-whole amounts and non-cash charges of approximately $45.1 million associated with hedge and loan cost write-offs. These amounts were recorded in interest, net in our consolidated statement of earnings for the quarter ended August 24, 2014. Subsequent to our first quarter of fiscal 2015, we incurred an additional $10.5 million of expenses associated with the retirement of the $100.0 million 7.125 percent debentures.
Asset Impairment, Net
Asset Impairment, Net
Asset Impairment, Net
During the fiscal quarters ended August 24, 2014 and August 25, 2013, we recognized long-lived asset impairment charges of $6.9 million ($4.3 million net of tax) and $1.0 million ($0.6 million net of tax), respectively. Impairment charges resulted primarily from the carrying value of restaurant assets exceeding the estimated fair market value, which is based on projected cash flows. These costs are included in asset impairments, net as a component of earnings from continuing operations in the accompanying consolidated statements of earnings. Impairment charges were measured based on the amount by which the carrying amount of these assets exceeded their fair value. Fair value is generally determined based on appraisals or sales prices of comparable assets and estimates of future cash flows.
Application of New Accounting Standards
Application of New Accounting Standards
Application of New Accounting Standards
In May 2014, the FASB issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). This update provides a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. This update is effective for annual and interim periods beginning after December 15, 2016, which will require us to adopt these provisions in the first quarter of fiscal 2018. Early application is not permitted. This update permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect this guidance will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting.
In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360), Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This update modifies the requirements for reporting discontinued operations. Under the amendments in ASU 2014-08, the definition of discontinued operation has been modified to only include those disposals of an entity that represent a strategic shift that has (or will have) a major effect on an entity's operations and financial results. This update also expands the disclosure requirements for disposals that meet the definition of a discontinued operation and requires entities to disclose information about disposals of individually significant components that do not meet the definition of discontinued operations. This update is effective for annual and interim periods beginning after December 15, 2014, which will require us to adopt these provisions in the first quarter of fiscal 2016. We are evaluating the effect this guidance will have on our consolidated financial statements and related disclosures.
Subsequent Event
Subsequent Events
Subsequent Events
On September 10, 2014, the Board of Directors declared a cash dividend of $0.55 per share to be paid November 3, 2014 to all shareholders of record as of the close of business on October 10, 2014.
Dispositions (Tables)
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures
Earnings from discontinued operations, net of taxes in our accompanying consolidated statements of earnings are comprised of the following:
 
Three Months Ended
(in millions)
August 24, 2014
 
August 25, 2013
Sales
$
400.4

 
$
627.0

 
 
 
 
Earnings before income taxes
843.2

 
38.7

Income tax expense
320.7

 
10.7

Earnings from discontinued operations, net of tax
$
522.5

 
$
28.0


The following table presents the carrying amounts of the major classes of assets and liabilities associated with the restaurants reported as discontinued operations and classified as held for sale on our accompanying consolidated balance sheets:
(in millions)
August 24, 2014
 
May 25,
 2014
Current assets
$

 
$
241.0

Land, buildings and equipment, net
54.3

 
1,084.8

Other assets

 
64.5

Total assets
$
54.3

 
$
1,390.3

 
 
 
 
Current liabilities
$

 
$
130.6

Other liabilities

 
84.9

Total liabilities
$

 
$
215.5

Supplemental Cash Flow Information (Tables)
Schedule of Cash Flow, Supplemental Disclosures
 
 
Three Months Ended
(in millions)
 
August 24, 2014
 
August 25, 2013
Interest paid, net of amounts capitalized
 
$
54.0

 
$
9.0

Income taxes paid, net of refunds
 
10.2

 
19.0

Stock-Based Compensation (Tables)
The weighted-average fair value of non-qualified stock options and the related assumptions used in the Black-Scholes option pricing model were as follows: 
 
Stock Options Granted
 
Three Months Ended
 
August 24, 2014
 
August 25, 2013
Weighted-average fair value
$
10.35

 
$
12.07

Dividend yield
4.5
%
 
4.4
%
Expected volatility of stock
37.3
%
 
39.6
%
Risk-free interest rate
2.1
%
 
1.9
%
Expected option life (in years)
6.5

 
6.4

The following table presents a summary of our stock-based compensation activity for the three months ended August 24, 2014: 
(in millions)
 
Stock
Options
 
Restricted
Stock/
Restricted
Stock
Units
 
Darden
Stock
Units
 
Performance
Stock Units
Outstanding beginning of period
 
11.2

 
0.2

 
2.1

 
0.3

Awards granted
 
1.0

 

 
0.5

 
0.1

Awards exercised
 
(0.2
)
 

 
(0.4
)
 
(0.1
)
Awards forfeited
 
(0.2
)
 

 
(0.6
)
 
(0.2
)
Performance unit adjustment
 

 

 

 
0.4

Outstanding end of period
 
11.8

 
0.2

 
1.6

 
0.5

We recognized expense from stock-based compensation as follows: 
 
 
Three Months Ended
(in millions)
 
August 24,
2014
 
August 25,
2013
Stock options
 
$
3.2

 
$
4.2

Restricted stock/restricted stock units
 
0.4

 
0.4

Darden stock units
 
1.3

 
1.8

Performance stock units
 
0.9

 
1.8

Employee stock purchase plan
 
0.4

 
0.5

Total stock-based compensation expense
 
$
6.2

 
$
8.7

Net Earnings per Share (Tables)
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share
Stock options and restricted stock excluded from the calculation of diluted net earnings per share because the effect would have been anti-dilutive, are as follows: 
 
 
Three Months Ended
(in millions)
 
August 24,
2014
 
August 25,
2013
Anti-dilutive stock options and restricted stock
 
6.4

 
3.4

Stockholders' Equity (Tables)
The components of accumulated other comprehensive income (loss), net of tax, for the quarters ended August 24, 2014 and August 25, 2013 are as follows:
(in millions)
Foreign Currency Translation Adjustment
 
Unrealized Gains (Losses) on Marketable Securities
 
Unrealized Gains (Losses) on Derivatives
 
Benefit Plan Funding Position
 
Accumulated Other Comprehensive Income (Loss)
Balance at May 25, 2014
$
(4.7
)
 
$
0.1

 
$
(50.4
)
 
$
(73.1
)
 
$
(128.1
)
Gain (loss)
(1.2
)
 
(0.1
)
 
(2.0
)
 

 
(3.3
)
Reclassification realized in net earnings
2.7

 

 
25.9

 
0.3

 
28.9

Balance at August 24, 2014
$
(3.2
)
 
$

 
$
(26.5
)
 
$
(72.8
)
 
$
(102.5
)
 
 
 
 
 
 
 
 
 
 
Balance at May 26, 2013
$
(1.8
)
 
$
0.2

 
$
(53.8
)
 
$
(77.4
)
 
$
(132.8
)
Gain (loss)
(1.0
)
 
(0.1
)
 
(4.4
)
 

 
(5.5
)
Reclassification realized in net earnings

 

 
2.3

 
1.6

 
3.9

Balance at August 25, 2013
$
(2.8
)
 
$
0.1

 
$
(55.9
)
 
$
(75.8
)
 
$
(134.4
)

The following table presents the amounts and line items in our consolidated statements of earnings where adjustments reclassified from AOCI into net earnings were recorded:
 
 
 
Amount Reclassified from AOCI into Net Earnings
 
 
 
Three Months Ended
(in millions)
AOCI Components
Location of Gain (Loss) Recognized in Earnings
 
August 24,
2014
 
August 25,
2013
Derivatives
 
 
 
 
 
Commodity contracts
(1)
 
$

 
$
(0.2
)
Equity contracts
(2)
 
(0.9
)
 
(0.7
)
Interest rate contracts
Interest, net
 
(40.5
)
 
(2.6
)
Foreign currency contracts
(2)
 

 
0.1

 
Total before tax
 
$
(41.4
)
 
$
(3.4
)
 
Tax benefit
 
15.5

 
1.1

 
Net of tax
 
$
(25.9
)
 
$
(2.3
)
 
 
 
 
 
 
Benefit plan funding position
 
 
 
 
 
Recognized net actuarial loss - pension/postretirement plans
(3)
 
$
(0.6
)
 
$
(2.3
)
Recognized net actuarial loss - other plans
(4)
 
(0.2
)
 
(0.3
)
 
Total before tax
 
$
(0.8
)
 
$
(2.6
)
 
Tax benefit
 
0.5

 
1.0

 
Net of tax
 
$
(0.3
)
 
$
(1.6
)
(1)
Primarily included in cost of sales. See Note 9 for additional details.
(2)
Primarily included in cost of sales and selling, general and administrative expenses. See Note 9 for additional details.
(3)
Included in the computation of net periodic benefit costs - pension and postretirement plans, which is a component of restaurant labor expenses and selling, general and administrative expenses. See Note 8 for additional details.
(4)
Included in the computation of net periodic benefit costs - other plans, which is a component of selling, general and administrative expenses.
Retirement Plans (Tables)
Components Of Net Periodic Benefit Cost
Components of net periodic benefit cost are as follows:
 
 
Defined Benefit Plans
 
 
Three Months Ended
(in millions)
 
August 24,
2014
 
August 25,
2013
Service cost
 
$
0.2

 
$
1.1

Interest cost
 
2.1

 
2.5

Expected return on plan assets
 
(3.1
)
 
(4.3
)
Recognized net actuarial loss
 
0.5

 
2.3

Net periodic benefit cost
 
$
(0.3
)
 
$
1.6

 
 
 
Postretirement Benefit Plan
 
 
Three Months Ended
(in millions)
 
August 24,
2014
 
August 25,
2013
Service cost
 
$
0.2

 
$
0.2

Interest cost
 
0.4

 
0.3

Recognized net actuarial loss
 
0.1

 

Net periodic benefit cost
 
$
0.7

 
$
0.5

Derivative Instruments And Hedging Activities (Tables)
The notional values of our derivative contracts are as follows: 
 
 
Notional Values
(in millions)
 
August 24,
2014
 
May 25,
2014
Derivative contracts designated as hedging instruments
 
 
 
 
Commodities
 
$

 
$
0.9

Foreign currency
 

 
0.3

Interest rate swaps
 
200.0

 
200.0

Equity forwards
 
18.0

 
20.6

Derivative contracts not designated as hedging instruments
 
 
 
 
Equity forwards
 
$
45.1

 
$
47.4

The fair value of our derivative contracts are as follows:
  
 
Balance
Sheet
Location
 
Derivative Assets
 
Derivative Liabilities
(in millions)
 
August 24,
2014
 
May 25,
2014
 
August 24,
2014
 
May 25,
2014
Derivative contracts designated as hedging instruments
 
 
 
 
 
 
 
 
 
 
Equity forwards
 
(1)
 
0.5

 

 

 
(0.5
)
Interest rate related
 
(1)
 
2.3

 
1.6

 

 

Foreign currency forwards
 
(1)
 

 
0.1

 

 

 
 
 
 
$
2.8

 
$
1.7

 
$

 
$
(0.5
)
Derivative contracts not designated as hedging instruments
 
 
 
 
 
 
 
 
 
 
Equity forwards
 
(1)
 
0.8

 

 

 
(1.2
)
 
 
 
 
$
0.8

 
$

 
$

 
$
(1.2
)
Total derivative contracts
 
$
3.6

 
$
1.7

 
$

 
$
(1.7
)
 
(1)
Derivative assets and liabilities are included in receivables, net, prepaid expenses and other current assets and other current liabilities, as applicable, on our consolidated balance sheets.

The effects of derivative instruments in cash flow hedging relationships in the consolidated statements of earnings are as follows:
(in millions)
 
Amount of Gain (Loss)
Recognized in AOCI
(effective portion)
 
Location of
Gain (Loss)
Reclassified
from AOCI to
Earnings
 
Amount of Gain (Loss)
Reclassified from AOCI to
Earnings (effective portion)
 
Location of
Gain (Loss)
Recognized
in Earnings
(ineffective
portion)
 
(1) Amount of Gain (Loss)
Recognized in Earnings
(ineffective portion)
 
 
Three Months Ended
 
 
 
Three Months Ended
 
 
 
Three Months Ended
Type of Derivative
 
August 24,
2014
 
August 25,
2013
 
 
 
August 24,
2014
 
August 25,
2013
 
 
 
August 24,
2014
 
August 25,
2013
Commodity
 
$

 
$
(0.4
)
 
(2)
 
$

 
$
(0.2
)
 
(2)
 
$

 
$

Equity
 
(2.0
)
 
(4.3
)
 
(3)
 
(0.9
)
 
(0.7
)
 
(3)
 
0.3

 
0.3

Interest rate
 

 

 
Interest, net
 
(40.5
)
 
(2.6
)
 
Interest, net
 

 

Foreign currency
 

 
0.2

 
(4)
 

 
0.1

 
(4)
 

 

 
 
$
(2.0
)
 
$
(4.5
)
 
 
 
$
(41.4
)
 
$
(3.4
)
 
 
 
$
0.3

 
$
0.3



 
(1)
Generally, all of our derivative instruments designated as cash flow hedges have some level of ineffectiveness, which is recognized currently in earnings. However, as these amounts are generally nominal and our consolidated financial statements are presented “in millions,” these amounts may appear as zero in this tabular presentation.
(2)
Location of the gain (loss) reclassified from AOCI to earnings as well as the gain (loss) recognized in earnings for the ineffective portion of the hedge is food and beverage costs and restaurant expenses, which are components of cost of sales.
(3)
Location of the gain (loss) reclassified from AOCI to earnings as well as the gain (loss) recognized in earnings for the ineffective portion of the hedge is restaurant labor expenses, which is a component of cost of sales, and selling, general and administrative expenses.
(4)
Location of the gain (loss) reclassified from AOCI to earnings as well as the gain (loss) recognized in earnings for the ineffective portion of the hedge is food and beverage costs, which is a component of cost of sales, and selling, general and administrative expenses.
The effects of derivative instruments in fair value hedging relationships in the consolidated statements of earnings are as follows:
(in millions)
 
Amount of Gain (Loss)
Recognized in Earnings on
Derivatives
 
Location of
Gain (Loss)
Recognized in
Earnings on
Derivatives
 
Hedged Item in
Fair Value Hedge
Relationship
 
Amount of Gain (Loss)
Recognized in Earnings on
Related Hedged Item
 
Location of
Gain (Loss)
Recognized in
Earnings on
Related
Hedged Item
 
 
Three Months Ended
 
 
 
 
 
Three Months Ended
 
 
 
 
August 24,
2014
 
August 25,
2013
 
 
 
 
 
August 24,
2014
 
August 25,
2013
 
 
Interest rate
 
$
0.7

 
$
(4.9
)
 
Interest, net
 
Fixed-rate debt
 
$
(0.7
)
 
$
4.9

 
Interest, net


The effects of derivatives not designated as hedging instruments in the consolidated statements of earnings are as follows:
  
 
Location of Gain (Loss) Recognized
 in Earnings on Derivatives
 
Amount of Gain (Loss) Recognized in Earnings
 
 
Three Months Ended
 
 
August 24, 2014
 
August 25, 2013
(in millions)
 
 
Commodity contracts
 
Cost of Sales (1)
 
$

 
$
(0.5
)
Equity forwards
 
Cost of Sales (2)
 
(0.6
)
 
(1.5
)
Equity forwards
 
Selling, General and Administrative
 
(1.8
)
 
(4.0
)
 
 
 
 
$
(2.4
)
 
$
(6.0
)
 
(1)
Location of the gain (loss) recognized in earnings is food and beverage costs and restaurant expenses, which are components of cost of sales.
(2)
Location of the gain (loss) recognized in earnings is restaurant labor expenses, which is a component of cost of sales.
Fair Value Measurements (Tables)
Fair Values Of Financial Instruments Measured At Fair Value On Recurring Basis
The following tables summarize the fair values of financial instruments measured at fair value on a recurring basis as reflected on our consolidated balance sheets as of August 24, 2014 and May 25, 2014: 
Items Measured at Fair Value at August 24, 2014
(in millions)
 
 
Fair value
of assets
(liabilities)
 
Quoted prices
in active
market for
identical assets
(liabilities)
(Level 1)
 
Significant
other
observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
Fixed-income securities:
 
 
 
 
 
 
 
 
 
Corporate bonds
(1
)
 
$
5.6

 
$

 
$
5.6

 
$

U.S. Treasury securities
(2
)
 
5.1

 
5.1

 

 

Mortgage-backed securities
(1
)
 
2.6

 

 
2.6

 

Derivatives:
 
 
 
 
 
 
 
 
 
Equity forwards
(3
)
 
1.3

 

 
1.3

 

Interest rate swaps
(4
)
 
2.3

 

 
2.3

 

Foreign currency forwards
(5
)
 

 

 

 

Total
 
 
$
16.9

 
$
5.1

 
$
11.8

 
$

 
Items Measured at Fair Value at May 25, 2014
(in millions)
 
 
Fair value
of assets
(liabilities)
 
Quoted prices
in active
market for
identical assets
(liabilities)
(Level 1)
 
Significant
other
observable
inputs
(Level 2)
 
Significant
unobservable
inputs
(Level 3)
Fixed-income securities:
 
 
 
 
 
 
 
 
 
Corporate bonds
(1
)
 
$
9.7

 
$

 
$
9.7

 
$

U.S. Treasury securities
(2
)
 
6.1

 
6.1

 

 

Mortgage-backed securities
(1
)
 
2.6

 

 
2.6

 

Derivatives:
 
 

 

 

 

Equity forwards
(3
)
 
(1.7
)
 

 
(1.7
)
 

Interest rate locks & swaps
(4
)
 
1.6

 

 
1.6

 

Foreign currency forwards
(5
)
 
0.1

 

 
0.1

 

Total
 
 
$
18.4

 
$
6.1

 
$
12.3

 
$

(1)
The fair value of these securities is based on closing market prices of the investments when applicable, or, alternatively, valuations utilizing market data and other observable inputs, inclusive of the risk of nonperformance.
(2)
The fair value of our U.S. Treasury securities is based on closing market prices.
(3)
The fair value of our equity forwards is based on the closing market value of Darden stock, inclusive of the risk of nonperformance.
(4)
The fair value of our interest rate lock and swap agreements is based on current and expected market interest rates, inclusive of the risk of nonperformance.
(5)
The fair value of our foreign currency forward contracts is based on closing forward exchange market prices, inclusive of the risk of nonperformance.
Workforce Reduction Costs (Tables)
Other Current Liabilities
The following table summarizes the accrued employee termination benefits and other costs which are primarily included in other current liabilities in our consolidated balance sheet as of August 24, 2014:
(in millions)
 
September
2013 Plan
 
January
2014 Plan
 
May
2014 Plan
 
Payments
 
Adjustments
 
Balance at August 24, 2014
Employee termination benefits (1)
 
$
7.7

 
$
0.7

 
$
5.0

 
$
(8.0
)
 
$
(0.6
)
 
$
4.8

Other
 
0.8

 
0.1

 
0.2

 
(0.7
)
 
(0.2
)
 
0.2

Total
 
$
8.5

 
$
0.8

 
$
5.2

 
$
(8.7
)
 
$
(0.8
)
 
$
5.0

(1)
Excludes costs associated with stock options and restricted stock that will be settled in shares upon vesting.
Dispositions (Details) (Red Lobster, USD $)
In Millions, unless otherwise specified
0 Months Ended 3 Months Ended
Jul. 28, 2014
location
property
Restaurant
Aug. 24, 2014
May 25, 2014
Restaurant
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
Number of restaurants sold
705 
 
 
Number of properties subject to landlord consents and other contractual requirements
37 
 
 
Locations that share land parcel with another Darden brand
19 
 
 
Number of synergy restaurants closed
 
 
Number of synergy restaurants
 
 
Proceeds from divestiture of businesses
 
$ 2,080.0 
 
Disposal transaction related costs
 
29.3 
 
Gain on sale of discontinued operation
 
817.2 
 
Properties Subject to Contractual Requirements
 
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
Proceeds from divestiture of businesses
$ 80.7 
 
 
Dispositions Income Statement Disclosure (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Aug. 24, 2014
Aug. 25, 2013
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
Income tax expense
$ 320.7 
$ 10.7 
Earnings from discontinued operations, net of tax
522.5 
28.0 
Red Lobster
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
Sales
400.4 
627.0 
Earnings before income taxes
843.2 
38.7 
Income tax expense
320.7 
10.7 
Earnings from discontinued operations, net of tax
$ 522.5 
$ 28.0 
Dispositions Balance Sheet Disclosure (Details) (USD $)
In Millions, unless otherwise specified
Aug. 24, 2014
May 25, 2014
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
Current assets
$ 54.3 
$ 1,390.3 
Current liabilities
215.5 
Red Lobster
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
Current assets
241.0 
Land, buildings and equipment, net
54.3 
1,084.8 
Other assets
64.5 
Total assets
54.3 
1,390.3 
Current liabilities
130.6 
Other liabilities
84.9 
Total liabilities
$ 0 
$ 215.5 
Supplemental Cash Flow Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Aug. 24, 2014
Aug. 25, 2013
Supplemental Cash Flow Information [Line Items]
 
 
Interest paid, net of amounts capitalized
$ 54.0 
$ 9.0 
Income taxes paid, net of refunds
10.2 
19.0 
Long-term Debt
 
 
Supplemental Cash Flow Information [Line Items]
 
 
Payments of debt extinguishment costs
34.9 
 
Extinguishment of debt, accrued interest
$ 12.2 
 
Stock-Based Compensation (Option Pricing Assumptions) (Details) (Stock Options, USD $)
3 Months Ended
Aug. 24, 2014
Aug. 25, 2013
Stock Options
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Weighted-average fair value (in dollars per share)
$ 10.35 
$ 12.07 
Dividend yield
4.50% 
4.40% 
Expected volatility of stock
37.30% 
39.60% 
Risk-free interest rate
2.10% 
1.90% 
Expected option life (in years)
6 years 6 months 
6 years 5 months 
Stock-Based Compensation (Share Activity) (Details)
3 Months Ended
Aug. 24, 2014
Aug. 25, 2013
Aug. 24, 2014
Stock Options
Aug. 24, 2014
Restricted Stock/ Restricted Stock Units
Aug. 24, 2014
Darden Stock Units
Aug. 24, 2014
Performance stock units
Jul. 28, 2014
Performance stock units
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
 
 
 
 
 
 
 
Outstanding beginning of period
 
 
11,200,000 
 
 
 
 
Awards granted
 
 
1,000,000 
 
 
 
 
Awards exercised
(200,000)
(200,000)
(200,000)
 
 
 
 
Awards forfeited
 
 
(200,000)
 
 
 
 
Outstanding end of period
 
 
11,800,000 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
 
 
 
 
 
 
 
Outstanding beginning of period
 
 
 
200,000 
2,100,000 
300,000 
23,700 
Awards granted
 
 
 
500,000 
100,000 
 
Awards exercised
 
 
 
(400,000)
(100,000)
 
Awards forfeited
 
 
 
(600,000)
(200,000)
 
Performance unit adjustment
 
 
 
400,000 
 
Outstanding end of period
 
 
 
200,000 
1,600,000 
500,000 
23,700 
Stock-Based Compensation (Recognized Stock-Based Compensation Expense) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Aug. 24, 2014
Aug. 25, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Total stock-based compensation expense
$ 6.2 
$ 8.7 
Stock Options
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Total stock-based compensation expense
3.2 
4.2 
Restricted Stock/ Restricted Stock Units
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Total stock-based compensation expense
0.4 
0.4 
Darden Stock Units
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Total stock-based compensation expense
1.3 
1.8 
Performance stock units
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Total stock-based compensation expense
0.9 
1.8 
Employee stock purchase plan
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Total stock-based compensation expense
$ 0.4 
$ 0.5 
Income Taxes (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Aug. 24, 2014
Aug. 25, 2013
Income Tax Contingency [Line Items]
 
 
Effective income tax rate
55.80% 
15.30% 
Income tax (benefit) expense
$ (24.4)
$ 7.6 
(Loss) earnings before income taxes
(43.7)
49.8 
Tax position, change is reasonably possible in the next twelve months
27.1 
 
Loss on extinguishment of debt
80.0 
Effective income tax rate, excluding debt extinguishment costs and debt extinguishment tax benefit (as a percent)
17.00% 
 
Long-term Debt
 
 
Income Tax Contingency [Line Items]
 
 
Tax benefit related to loss on extinguishment of debt
30.6 
 
Loss on extinguishment of debt
$ 80.0 
 
Net Earnings per Share (Details)
In Millions, unless otherwise specified
3 Months Ended
Aug. 24, 2014
Aug. 25, 2013
Earnings Per Share [Abstract]
 
 
Anti-dilutive stock options and restricted stock
6.4 
3.4 
Stockholders' Equity Narrative (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 1 Months Ended 3 Months Ended 1 Months Ended
Aug. 24, 2014
Aug. 25, 2013
Jul. 31, 2014
Accelerated Share Repurchase Program
Aug. 24, 2014
Accelerated Share Repurchase Program
Oct. 31, 2014
Scenario, Forecast
Accelerated Share Repurchase Program
Class of Stock [Line Items]
 
 
 
 
 
Share repurchase program, authorized amount
 
 
$ 500.0 
 
 
Payments For Accelerated Share Repurchase Program
500.0 
 
500.0 
 
Stock to be repurchased and retired
 
 
 
8,600,000 
Shares repurchased (as a percentage)
 
 
80.00% 
 
 
Accelerated share repurchase program reduction to shareholders' equity
$ 500.0 
 
 
$ 500.0 
 
Stockholders' Equity (Schedule of Components of Accumulated Other Comprehensive Income) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Aug. 24, 2014
Aug. 25, 2013
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
Beginning Balance
$ (128.1)
$ (132.8)
Gain (loss)
(3.3)
(5.5)
Reclassification realized in net earnings
28.9 
3.9 
Ending Balance
(102.5)
(134.4)
Foreign Currency Translation Adjustment
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
Beginning Balance
(4.7)
(1.8)
Gain (loss)
(1.2)
(1.0)
Reclassification realized in net earnings
2.7 
Ending Balance
(3.2)
(2.8)
Unrealized Gains (Losses) on Marketable Securities
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
Beginning Balance
0.1 
0.2 
Gain (loss)
(0.1)
(0.1)
Reclassification realized in net earnings
Ending Balance
0.1 
Unrealized Gains (Losses) on Derivatives
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
Beginning Balance
(50.4)
(53.8)
Gain (loss)
(2.0)
(4.4)
Reclassification realized in net earnings
25.9 
2.3 
Ending Balance
(26.5)
(55.9)
Benefit Plan Funding Position
 
 
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
 
 
Beginning Balance
(73.1)
(77.4)
Gain (loss)
Reclassification realized in net earnings
0.3 
1.6 
Ending Balance
$ (72.8)
$ (75.8)
Stockholders' Equity (Schedule of Reclassification Adjustments out of Accumulated Other Comprehensive Income) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Aug. 24, 2014
Aug. 25, 2013
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
Cost of sales
$ 1,282.6 
$ 1,208.1 
Selling, general and administrative
160.0 
165.6 
Interest, net
(111.3)
(32.8)
(Loss) earnings before income taxes
(43.7)
49.8 
Tax benefit
24.4 
(7.6)
Net earnings
503.2 
70.2 
Amount Reclassified from AOCI into Net Earnings
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
Net earnings
(0.3)
(1.6)
Derivatives |
Amount Reclassified from AOCI into Net Earnings
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
(Loss) earnings before income taxes
(41.4)
(3.4)
Tax benefit
15.5 
1.1 
Net earnings
(25.9)
(2.3)
Derivatives |
Commodity |
Amount Reclassified from AOCI into Net Earnings
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
Cost of sales
1
(0.2)1
Derivatives |
Equity |
Amount Reclassified from AOCI into Net Earnings
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
Selling, general and administrative
(0.9)2
(0.7)2
Derivatives |
Interest rate related |
Amount Reclassified from AOCI into Net Earnings
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
Interest, net
(40.5)
(2.6)
Derivatives |
Foreign currency |
Amount Reclassified from AOCI into Net Earnings
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
Selling, general and administrative
2
0.1 2
Benefit plan funding position |
Amount Reclassified from AOCI into Net Earnings
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
(Loss) earnings before income taxes
(0.8)
(2.6)
Tax benefit
0.5 
1.0 
Benefit plan funding position |
Recognized net actuarial loss - pension/postretirement plans |
Amount Reclassified from AOCI into Net Earnings
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
Amount Reclassified from AOCI into Net Earnings, Benefit plan funding position
(0.6)3
(2.3)3
Benefit plan funding position |
Recognized net actuarial loss - other plans |
Amount Reclassified from AOCI into Net Earnings
 
 
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items]
 
 
Amount Reclassified from AOCI into Net Earnings, Benefit plan funding position
$ (0.2)4
$ (0.3)4
Retirement Plans (Components Of Net Periodic Benefit Cost) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Aug. 24, 2014
Aug. 25, 2013
Defined Benefit Plans
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Service cost
$ 0.2 
$ 1.1 
Interest cost
2.1 
2.5 
Expected return on plan assets
(3.1)
(4.3)
Recognized net actuarial loss
0.5 
2.3 
Net periodic benefit cost
(0.3)
1.6 
Postretirement Benefit Plan
 
 
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
 
 
Service cost
0.2 
0.2 
Interest cost
0.4 
0.3 
Recognized net actuarial loss
0.1 
Net periodic benefit cost
$ 0.7 
$ 0.5 
Derivative Instruments And Hedging Activities (Narrative) (Details) (USD $)
Share data in Millions, except Per Share data, unless otherwise specified
3 Months Ended
Aug. 24, 2014
Aug. 25, 2013
Derivative [Line Items]
 
 
Ineffective portion of interest rate hedge
$ 0 
 
Reduction to interest expense related to net swap settlements
500,000 
500,000 
Amount of gain (loss) reclassified from AOCI to earnings (effective portion)
(5,200,000)
 
Darden Stock Units |
Forward contracts
 
 
Derivative [Line Items]
 
 
Forward contract indexed to issuer's equity, indexed shares
0.8 
 
Darden Stock Units |
Minimum
 
 
Derivative [Line Items]
 
 
Vesting period
4 years 
 
Common stock at forward contract rate (in dollars per share)
$ 31.19 
 
Darden Stock Units |
Maximum
 
 
Derivative [Line Items]
 
 
Vesting period
5 years 
 
Common stock at forward contract rate (in dollars per share)
$ 52.66 
 
Employee-Directed Investments In Darden Stock Within The Non-Qualified Deferred Compensation Plan
 
 
Derivative [Line Items]
 
 
Forward contract indexed to issuer's equity, indexed shares
0.2 
 
Employee-Directed Investments In Darden Stock Within The Non-Qualified Deferred Compensation Plan |
Minimum
 
 
Derivative [Line Items]
 
 
Common stock at forward contract rate (in dollars per share)
$ 46.17 
 
Employee-Directed Investments In Darden Stock Within The Non-Qualified Deferred Compensation Plan |
Maximum
 
 
Derivative [Line Items]
 
 
Common stock at forward contract rate (in dollars per share)
$ 51.95 
 
4.500% Senior Notes Due October 2021 |
Senior Notes
 
 
Derivative [Line Items]
 
 
Face amount of debt
121,900,000 
 
Interest rate of debt
4.50% 
 
6.200% Senior Notes Due October 2017 |
Senior Notes
 
 
Derivative [Line Items]
 
 
Face amount of debt
500,000,000 
 
Interest rate of debt
6.20% 
 
Interest rate swaps |
5.625% Senior Notes Due October 2012 |
Senior Notes
 
 
Derivative [Line Items]
 
 
Notional value of derivative instrument
$ 200,000,000 
 
Derivative Instruments And Hedging Activities (Notional Values Of Derivative Contracts Designated And Not Designated As Hedging Instruments) (Details) (USD $)
In Millions, unless otherwise specified
Aug. 24, 2014
May 25, 2014
Designated as Hedging Instruments |
Commodities
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative contracts
$ 0 
$ 0.9 
Designated as Hedging Instruments |
Foreign currency
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative contracts
0.3 
Designated as Hedging Instruments |
Interest rate swaps
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative contracts
200.0 
200.0 
Designated as Hedging Instruments |
Equity forwards
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative contracts
18.0 
20.6 
Not Designated as Hedging Instruments |
Equity forwards
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative contracts
$ 45.1 
$ 47.4 
Derivative Instruments And Hedging Activities (Fair Value Of Derivative Contracts Designated And Not Designated As Hedging Instruments) (Details) (USD $)
In Millions, unless otherwise specified
Aug. 24, 2014
May 25, 2014
Derivative [Line Items]
 
 
Derivative contracts, Derivative Assets
$ 3.6 
$ 1.7 
Derivative contracts, Derivative Liabilities
(1.7)
Designated as Hedging Instruments
 
 
Derivative [Line Items]
 
 
Derivative contracts, Derivative Assets
2.8 
1.7 
Derivative contracts, Derivative Liabilities
(0.5)
Designated as Hedging Instruments |
Equity forwards
 
 
Derivative [Line Items]
 
 
Derivative contracts, Derivative Assets
0.5 1
1
Derivative contracts, Derivative Liabilities
1
(0.5)1
Designated as Hedging Instruments |
Interest rate related
 
 
Derivative [Line Items]
 
 
Derivative contracts, Derivative Assets
2.3 1
1.6 1
Derivative contracts, Derivative Liabilities
1
1
Designated as Hedging Instruments |
Foreign currency
 
 
Derivative [Line Items]
 
 
Derivative contracts, Derivative Assets
1
0.1 1
Derivative contracts, Derivative Liabilities
1
1
Not Designated as Hedging Instruments
 
 
Derivative [Line Items]
 
 
Derivative contracts, Derivative Assets
0.8 
Derivative contracts, Derivative Liabilities
(1.2)
Not Designated as Hedging Instruments |
Equity forwards
 
 
Derivative [Line Items]
 
 
Derivative contracts, Derivative Assets
0.8 1
1
Derivative contracts, Derivative Liabilities
$ 0 1
$ (1.2)1
Derivative Instruments And Hedging Activities (Effects Of Derivative Instruments In Cash Flow Hedging Relationships) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Aug. 24, 2014
Aug. 25, 2013
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Amount of Gain (Loss) Recognized in AOCI (effective portion)
$ (2.0)
$ (4.5)
Amount of Gain (Loss) Reclassified from AOCI to Earnings (effective portion)
(41.4)
(3.4)
Amount of Gain (Loss) Recognized in Earnings (ineffective portion)
0.3 1
0.3 1
Commodity
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Amount of Gain (Loss) Recognized in AOCI (effective portion)
2
(0.4)2
Commodity |
Cost of Sales
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Amount of Gain (Loss) Reclassified from AOCI to Earnings (effective portion)
2
(0.2)2
Amount of Gain (Loss) Recognized in Earnings (ineffective portion)
1 2
1 2
Equity
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Amount of Gain (Loss) Recognized in AOCI (effective portion)
(2.0)3
(4.3)3
Equity |
Cost of Sales and Selling General and Administrative Expense
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Amount of Gain (Loss) Reclassified from AOCI to Earnings (effective portion)
(0.9)3
(0.7)3
Amount of Gain (Loss) Recognized in Earnings (ineffective portion)
0.3 1 3
0.3 1 3
Interest rate related
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Amount of Gain (Loss) Recognized in AOCI (effective portion)
Interest rate related |
Interest, Net
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Amount of Gain (Loss) Reclassified from AOCI to Earnings (effective portion)
(40.5)
(2.6)
Amount of Gain (Loss) Recognized in Earnings (ineffective portion)
1
1
Foreign currency
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Amount of Gain (Loss) Recognized in AOCI (effective portion)
4
0.2 4
Foreign currency |
Cost of Sales and Selling General and Administrative Expense
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Amount of Gain (Loss) Reclassified from AOCI to Earnings (effective portion)
4
0.1 4
Amount of Gain (Loss) Recognized in Earnings (ineffective portion)
$ 0 1 4
$ 0 1 4
Derivative Instruments And Hedging Activities (Effects Of Derivative Instruments In Fair Value Hedging Relationships) (Details) (Interest, Net, Fair Value Hedging, Interest rate related, USD $)
In Millions, unless otherwise specified
3 Months Ended
Aug. 24, 2014
Aug. 25, 2013
Interest, Net |
Fair Value Hedging |
Interest rate related
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Amount of Gain (Loss) Recognized in Earnings on Derivatives
$ 0.7 
$ (4.9)
Amount of Gain (Loss) Recognized in Earnings on Related Hedged Item
$ (0.7)
$ 4.9 
Derivative Instruments And Hedging Activities (Effects Of Derivatives Not Designated As Hedging Instruments) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Aug. 24, 2014
Aug. 25, 2013
Derivative [Line Items]
 
 
Amount of Gain (Loss) Recognized in Earnings
$ (2.4)
$ (6.0)
Commodity contracts |
Cost of Sales
 
 
Derivative [Line Items]
 
 
Amount of Gain (Loss) Recognized in Earnings
1
(0.5)1
Equity forwards |
Cost of Sales
 
 
Derivative [Line Items]
 
 
Amount of Gain (Loss) Recognized in Earnings
(0.6)2
(1.5)2
Equity forwards |
Selling, General and Administrative
 
 
Derivative [Line Items]
 
 
Amount of Gain (Loss) Recognized in Earnings
$ (1.8)
$ (4.0)
Fair Value Measurements (Fair Values Of Financial Instruments Measured At Fair Value On Recurring Basis) (Details) (Fair Value, Measurements, Recurring, USD $)
In Millions, unless otherwise specified
Aug. 24, 2014
May 25, 2014
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
 
 
Total
$ 16.9 
$ 18.4 
Equity forwards
 
 
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
 
 
Derivatives
1.3 1
(1.7)1
Interest rate swaps
 
 
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
 
 
Derivatives
2.3 2
1.6 2
Foreign currency forwards
 
 
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
 
 
Derivatives
3
0.1 3
Corporate bonds
 
 
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed-income securities
5.6 4
9.7 4
U.S. Treasury securities
 
 
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed-income securities
5.1 5
6.1 5
Mortgage-backed securities
 
 
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed-income securities
2.6 4
2.6 4
Quoted prices in active market for identical assets (liabilities) (Level 1)
 
 
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
 
 
Total
5.1 
6.1 
Quoted prices in active market for identical assets (liabilities) (Level 1) |
Equity forwards
 
 
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
 
 
Derivatives
1
1
Quoted prices in active market for identical assets (liabilities) (Level 1) |
Interest rate swaps
 
 
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
 
 
Derivatives
2
2
Quoted prices in active market for identical assets (liabilities) (Level 1) |
Foreign currency forwards
 
 
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
 
 
Derivatives
3
3
Quoted prices in active market for identical assets (liabilities) (Level 1) |
Corporate bonds
 
 
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed-income securities
4
4
Quoted prices in active market for identical assets (liabilities) (Level 1) |
U.S. Treasury securities
 
 
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed-income securities
5.1 5
6.1 5
Quoted prices in active market for identical assets (liabilities) (Level 1) |
Mortgage-backed securities
 
 
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed-income securities
4
4
Significant other observable inputs (Level 2)
 
 
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
 
 
Total
11.8 
12.3 
Significant other observable inputs (Level 2) |
Equity forwards
 
 
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
 
 
Derivatives
1.3 1
(1.7)1
Significant other observable inputs (Level 2) |
Interest rate swaps
 
 
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
 
 
Derivatives
2.3 2
1.6 2
Significant other observable inputs (Level 2) |
Foreign currency forwards
 
 
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
 
 
Derivatives
3
0.1 3
Significant other observable inputs (Level 2) |
Corporate bonds
 
 
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed-income securities
5.6 4
9.7 4
Significant other observable inputs (Level 2) |
U.S. Treasury securities
 
 
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed-income securities
5
5
Significant other observable inputs (Level 2) |
Mortgage-backed securities
 
 
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed-income securities
2.6 4
2.6 4
Significant unobservable inputs (Level 3)
 
 
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
 
 
Total
Significant unobservable inputs (Level 3) |
Equity forwards
 
 
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
 
 
Derivatives
1
1
Significant unobservable inputs (Level 3) |
Interest rate swaps
 
 
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
 
 
Derivatives
2
2
Significant unobservable inputs (Level 3) |
Foreign currency forwards
 
 
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
 
 
Derivatives
3
3
Significant unobservable inputs (Level 3) |
Corporate bonds
 
 
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed-income securities
4
4
Significant unobservable inputs (Level 3) |
U.S. Treasury securities
 
 
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed-income securities
5
5
Significant unobservable inputs (Level 3) |
Mortgage-backed securities
 
 
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items]
 
 
Fixed-income securities
$ 0 4
$ 0 4
Fair Value Measurements (Carrying Value And Fair Value Of Long-Term Debt) (Details) (USD $)
In Billions, unless otherwise specified
Aug. 24, 2014
May 25, 2014
Fair Value Disclosures [Abstract]
 
 
Carrying value of long-term debt
$ 1.58 
$ 2.50 
Fair value of long-term debt
$ 1.69 
$ 2.63 
Commitments And Contingencies (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 1 Months Ended
Aug. 24, 2014
Jul. 31, 2013
Alequin v. Darden Restaurants, Inc.
plaintiff
Sep. 30, 2013
ChHab v. Darden Restaurants, Inc.
plaintiff
Aug. 24, 2014
Workers Compensation and General Liabilities Accrued
May 25, 2014
Workers Compensation and General Liabilities Accrued
Aug. 24, 2014
Operating Lease Obligation
May 25, 2014
Operating Lease Obligation
Aug. 24, 2014
Property Lease Guarantee
May 25, 2014
Property Lease Guarantee
Loss Contingencies [Line Items]
 
 
 
 
 
 
 
 
 
Standby letters of credit
 
 
 
$ 124.2 
$ 113.5 
$ 14.5 
$ 17.8 
 
 
Description of lessor leasing arrangement, operating leases
fiscal 2015 through fiscal 2044 
 
 
 
 
 
 
 
 
Guarantees associated with leased properties
 
 
 
 
 
 
 
138.3 
3.4 
Fair value of potential payments discounted at pre-tax cost of capital related to guarantee obligations
 
 
 
 
 
 
 
$ 105.3 
$ 2.7 
Number of original opt-In notices distributed
 
217,000 
3,200 
 
 
 
 
 
 
Number of opt-in notices, returned
 
20,225 
541 
 
 
 
 
 
 
Workforce Reduction Costs (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Aug. 24, 2014
Restructuring Cost and Reserve [Line Items]
 
Payments
$ (8.7)
Adjustments
(0.8)
Balance at August 24, 2014
5.0 
September 2013 Plan
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring Charges
8.5 
January 2014 Plan
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring Charges
0.8 
May 2014 Plan
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring Charges
5.2 
Employee termination benefits
 
Restructuring Cost and Reserve [Line Items]
 
Payments
(8.0)1
Adjustments
(0.6)1
Balance at August 24, 2014
4.8 1
Employee termination benefits |
September 2013 Plan
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring Charges
7.7 1
Employee termination benefits |
January 2014 Plan
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring Charges
0.7 1
Employee termination benefits |
May 2014 Plan
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring Charges
5.0 1
Other
 
Restructuring Cost and Reserve [Line Items]
 
Payments
(0.7)
Adjustments
(0.2)
Balance at August 24, 2014
0.2 
Other |
September 2013 Plan
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring Charges
0.8 
Other |
January 2014 Plan
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring Charges
0.1 
Other |
May 2014 Plan
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring Charges
$ 0.2 
Long-Term Debt (Details) (USD $)
3 Months Ended 0 Months Ended 3 Months Ended 3 Months Ended 1 Months Ended
Aug. 24, 2014
Aug. 25, 2013
Aug. 23, 2014
Long-term Debt
Aug. 24, 2014
Long-term Debt
Aug. 24, 2014
Long-term Debt
7.125% Senior Note due February 2016
Aug. 24, 2014
Senior Notes
4.500% Senior Notes Due October 2021
Aug. 24, 2014
Senior Notes
3.350% Senior Note due November 2022
Aug. 24, 2014
Senior Notes
3.790% Senior Notes Due August 2019
Aug. 24, 2014
Senior Notes
4.520% Senior Notes Due August 2024
Sep. 26, 2014
Subsequent Event
Long-term Debt
7.125% Senior Note due February 2016
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
Extinguishment of debt, amount
 
 
 
$ 900,000,000 
 
$ 278,100,000 
$ 331,900,000 
$ 80,000,000 
$ 210,000,000 
$ 100,000,000 
Total extinguishment of debt amount
 
 
1,000,000,000 
 
 
 
 
 
 
 
Payments of debt extinguishment costs
 
 
 
34,900,000 
 
 
 
 
 
 
Non-cash charges on extinguishment of debt
 
 
 
45,100,000 
 
 
 
 
 
 
Interest rate of debt
 
 
 
 
7.125% 
4.50% 
3.35% 
3.79% 
4.52% 
 
Loss on extinguishment of debt
$ 80,000,000 
$ 0 
 
$ 80,000,000 
 
 
 
 
 
$ 10,500,000 
Asset Impairment, Net (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Aug. 24, 2014
Aug. 25, 2013
Asset Impairment Charges [Abstract]
 
 
Asset impairment charges
$ 6.9 
$ 1.0 
Asset impairment charges, net of tax
$ 4.3 
$ 0.6 
Subsequent Event (Details) (Subsequent Event, Dividend Declared, USD $)
0 Months Ended
Sep. 10, 2014
Sep. 10, 2014
Subsequent Event |
Dividend Declared
 
 
Subsequent Event [Line Items]
 
 
Dividend declared date
Sep. 10, 2014 
 
Cash dividend declared, per share
 
$ 0.55 
Dividend payable date
Nov. 03, 2014 
 
Dividends payable date of record
Oct. 10, 2014