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<DESCRIPTION>FORM10K 2005 7-29-05
<TEXT>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                             -----------------------
                                    FORM 10-K
                             -----------------------
(Mark One)
/X/  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934

                     For the fiscal year ended May 29, 2005

/ /  TRANSITION  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
     EXCHANGE ACT OF 1934
              For the transition period from ___ to ___ Commission
                              File Number: 1-13666

                            DARDEN RESTAURANTS, INC.
             (Exact name of registrant as specified in its charter)

         Florida                                             59-3305930
(State or other jurisdiction of             (IRS Employer Identification Number)
 incorporation or organization)

    5900 Lake Ellenor Drive                                        32809
       Orlando, Florida                                         (Zip Code)
(Address of principal executive offices)

                                 (407) 245-4000
              (Registrant'stelephone number, including area code)

           Securities registered pursuant to Section 12(b) of the Act:

                                                        Name of each exchange
         Title of each class                             on which registered
        ---------------------                          -----------------------
    Common Stock, without par value                    New York Stock Exchange
  and Preferred Stock Purchase Rights

        Securities registered pursuant to Section 12(g) of the Act: None

     Indicate  by check mark  whether the  Registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [X]  No [ ]

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated by Reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

     Indicate by check mark whether the Registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Act). Yes [X]  No [ ]

     Aggregate  market  value of  Common  Stock  held by  non-affiliates  of the
Registrant,  based on the  closing  price of $27.41 per share as reported on the
New York Stock Exchange on November 28, 2004: $4,342,876,554.

     Number  of  shares  of  Common  Stock  outstanding  as  of  July  1,  2005:
154,403,570 (excluding 117,030,318 shares held in the Company's treasury).

                       DOCUMENTS INCORPORATED BY REFERENCE
Portions  of  the  Registrant's  Proxy  Statement  for  its  Annual  Meeting  of
Shareholders on September 21, 2005, to be filed with the Securities and Exchange
Commission  no later  than 120 days  after May 29,  2005,  are  incorporated  by
reference  into Part III,  and  portions of the  Registrant's  Annual  Report to
Shareholders  for the  fiscal  year  ended  May 29,  2005  are  incorporated  by
reference into Parts I and II of this Report.


<PAGE>



                            DARDEN RESTAURANTS, INC.
                                    FORM 10-K
                         FISCAL YEAR ENDED MAY 29, 2005

                                TABLE OF CONTENTS

PART I                                                                      Page
------                                                                      ----

Item 1.      Business........................................................ 1

Item 2.      Properties...................................................... 15

Item 3.      Legal Proceedings............................................... 15

Item 4.      Submission of Matters to a Vote of Security Holders............. 16

PART II

Item 5.      Market for Registrant's Common Equity, Related Stockholder
             MattersAnd Issuer Purchases of Equity Securities................ 16

Item 6.      Selected Financial Data......................................... 17

Item 7.      Management's Discussion and Analysis of Financial Condition
             and Results of Operations....................................... 17

Item 7A.     Quantitative and Qualitative Disclosures About Market Risk...... 17

Item 8.      Financial Statements and Supplementary Data..................... 17

Item 9.      Changes in and Disagreements with Accountants on Accounting
             And Financial Disclosure........................................ 18

Item 9A.     Controls and Procedures......................................... 18

Item 9B.     Other Information............................................... 18

PART III

Item 10.     Directors and Executive Officers of the Registrant.............. 18

Item 11.     Executive Compensation.......................................... 19

Item 12.     Security Ownership of Certain Beneficial Owners and
             Management andRelated Stockholder Matters....................... 19

Item 13.     Certain Relationships and Related Transactions.................. 20

Item 14.     Principal Accountant Fees and Services.......................... 20

PART IV

Item 15.     Exhibits and Financial Statement Schedules...................... 21

Signatures   ................................................................ 22

<PAGE>



                                     PART I
Item 1.  BUSINESS

Introduction

     Darden  Restaurants,  Inc.  is the  largest  publicly  held  casual  dining
restaurant  company in the  world,1 and served  over 300  million  meals  during
fiscal 2005. As of May 29, 2005,  we operated  1,381  restaurants  in the United
States and Canada.  In the United States,  we operated  1,344  restaurants in 49
states (the exception  being Alaska),  including 648 Red  Lobster(R),  557 Olive
Garden(R), 32 Bahama Breeze(R),  104 Smokey Bones Barbeque & Grill (R) and three
Seasons 52(R) restaurants.  In Canada, we operated 37 restaurants,  including 31
Red  Lobster  and six Olive  Garden  restaurants.  We own and operate all of our
restaurants in the United States and Canada,  with no franchising.  Of our 1,381
restaurants  open on May 29, 2005,  838 were located on owned sites and 543 were
located on leased  sites.  In Japan,  as of May 29,  2005,  we  licensed  37 Red
Lobster  restaurants to an unaffiliated  Japanese  corporation that operates the
restaurants under an Area Development and Franchise Agreement.

     Darden  Restaurants,  Inc. is a Florida  corporation  incorporated in March
1995, and is the parent company of GMRI, Inc., also a Florida corporation. GMRI,
Inc. and our other  subsidiaries  own the operating  assets of the  restaurants.
GMRI,  Inc.  was  originally  incorporated  in March 1968 as Red Lobster Inns of
America,  Inc. Our principal executive offices and restaurant support center are
located at 5900 Lake Ellenor  Drive,  Orlando,  Florida 32809,  telephone  (407)
245-4000.  Our corporate website address is www.darden.com.  We make our reports
on Forms 10-K, 10-Q and 8-K, and Section 16 reports on Forms 3, 4 and 5, and all
amendments to those reports available free of charge on our website the same day
as the  reports  are filed with or  furnished  to the  Securities  and  Exchange
Commission.  Information  on our  website  is not deemed to be  incorporated  by
reference  into this Form 10-K.  Unless the  context  indicates  otherwise,  all
references to "Darden," "we",  "our" or "us" include Darden  Restaurants,  Inc.,
GMRI, Inc. and our respective subsidiaries.

     We have a 52/53 week fiscal year ending on the last Sunday in May. Our 2005
fiscal year,  which ended on May 29, 2005, and our 2003 fiscal year, which ended
on May 25, 2003, each had 52 weeks. Our 2004 fiscal year, which ended on May 30,
2004, had 53 weeks.

     The following  description  of our business  should be read in  conjunction
with the  information in our  Management's  Discussion and Analysis of Financial
Condition and Results of Operations  incorporated by reference in Item 7 of this
Form 10-K and our consolidated financial statements incorporated by reference in
Item 8 of this Form 10-K.

Background

     We opened our first  restaurant,  a Red Lobster,  in  Lakeland,  Florida in
1968.  Red Lobster was founded by William B. Darden,  for whom we are named.  We
were acquired by General Mills,  Inc. in 1970. In May 1995, we became a separate
publicly  held company when General Mills  distributed  all  outstanding  Darden
stock to General Mills' stockholders.

     The number of Red Lobster and Olive Garden  restaurants  open at the end of
fiscal 2005 decreased by one and increased by 20,  respectively,  as compared to
the end of fiscal 2004. Red Lobster has grown from six  restaurants in operation
at the end of fiscal  1970 to 679  restaurants  in North  America  by the end of
fiscal 2005. Olive Garden,  an internally  developed  concept,  opened its first
restaurant in Orlando, Florida in fiscal 1983, and by the end of fiscal 2005 had
expanded to 563 restaurants in North America.

     Bahama Breeze is an internally developed concept with a Caribbean theme. In
fiscal 1996, Bahama Breeze opened its first restaurant in Orlando,  Florida.  At
the end of fiscal 2005, there were 32 Bahama Breeze restaurants.

-----------------------------

1 Source:  Nation's  Restaurant News,  "Special Report:  Top 100," June 27, 2005
(based on U.S. revenues from company-owned restaurants).

                                       1
<PAGE>


     Smokey Bones is also an internally developed concept featuring barbeque and
other  grilled  favorites  served in an  inviting  mountain-lodge  setting  that
features  televised  sports.  The first  restaurant was opened in fiscal 2000 in
Orlando,  Florida.  At the end of  fiscal  2005,  there  were 104  Smokey  Bones
restaurants.

     In February  2003,  we opened a new test  restaurant  in  Orlando,  Florida
called Seasons 52. It is a casually  sophisticated fresh grill and wine bar with
seasonally  inspired menus  offering fresh  ingredients to create great tasting,
nutritionally  balanced  meals  that  are  lower  in  calories  than  comparable
restaurant  meals.  At the end of fiscal  2005,  there  were  three  Seasons  52
restaurants.

     The table  below  shows our  growth  and  lists the  number of  restaurants
operated by Red Lobster,  Olive Garden,  Bahama Breeze, Smokey Bones and Seasons
52 as of the end of each fiscal year since 1970.  The final  column in the table
lists our total sales for the years indicated.

              Company-Operated Restaurants Open at Fiscal Year End
<TABLE>
<CAPTION>

    Fiscal         Red         Olive       Bahama       Smokey     Seasons         Total         Total Company Sales
     Year        Lobster      Garden       Breeze       Bones         52      Restaurants (1)   ($ in Millions) (2)(3)
     ----        -------      -------      ------       -----         --      ---------------   ----------------------

     <S>             <C>         <C>          <C>          <C>           <C>         <C>                <C>
     1970                6                                                               6                   3.5
     1971               24                                                              24                   9.1
     1972               47                                                              47                  27.1
     1973               70                                                              70                  48.0
     1974               97                                                              97                  72.6
     1975              137                                                             137                 108.5
     1976              174                                                             174                 174.1
     1977              210                                                             210                 229.2
     1978              236                                                             236                 291.4
     1979              244                                                             244                 337.5
     1980              260                                                             260                 397.6
     1981              291                                                             291                 528.4
     1982              328                                                             328                 614.3
     1983              360           1                                                 361                 718.5
     1984              368           2                                                 370                 782.3
     1985              372           4                                                 376                 842.2
     1986              401          14                                                 415                 917.3
     1987              433          52                                                 485               1,097.7
     1988              443          92                                                 535               1,300.8
     1989              490         145                                                 635               1,621.5
     1990              521         208                                                 729               1,927.7
     1991              568         272                                                 840               2,212.3
     1992              619         341                                                 960               2,542.0
     1993              638         400                                               1,038               2,737.0
     1994              675         458                                               1,133               2,963.0
     1995              715         477                                               1,192               3,163.3
     1996              729         487            1                                  1,217               3,191.8
     1997              703         477            2                                  1,182               3,171.8
     1998              682         466            3                                  1,151               3,261.6
     1999              669         464            6                                  1,139               3,432.4
     2000              654         469           14            2                     1,139               3,675.5
     2001              661         477           21            9                     1,168               3,992.4
     2002              667         496           29           19                     1,211               4,366.9
     2003              673         524           34           39         1           1,271               4,655.0
     2004              680         543           32           69         1           1,325               5,003.4
     2005              679         563           32          104         3           1,381               5,278.1

                                       2
<PAGE>

<FN>

(1)  Includes only Red Lobster,  Olive Garden,  Bahama Breeze,  Smokey Bones and
     Seasons 52 restaurants. Does not include other restaurant concepts operated
     by us in these years that are no longer owned or operated by us.
(2)  Includes  total  sales  from all of our  operations,  including  sales from
     restaurant  concepts  besides Red Lobster,  Olive  Garden,  Bahama  Breeze,
     Smokey  Bones and  Seasons 52 that are no longer  owned or  operated by us.
     Total  company  sales from 1970  through  fiscal 1995 were  included in the
     consolidated operations of our former parent company,  General Mills, Inc.,
     prior to our  spin-off as a separate  publicly  traded  corporation  in May
     1995.
(3)  Emerging  Issues  Task Force  Issue 00-14  "Accounting  for  Certain  Sales
     Incentives"  requires  sales  incentives to be classified as a reduction of
     sales.  We adopted  Issue 00-14 in the fourth  quarter of fiscal 2002.  For
     purposes of this presentation, sales incentives have been reclassified as a
     reduction  of sales for fiscal 1998  through  2005.  Sales  incentives  for
     fiscal years prior to 1998 have not been reclassified.
</FN>
</TABLE>

Strategy

     The  restaurant  industry is generally  considered  to be comprised of four
segments: quick service,  midscale,  casual dining and fine dining. The industry
is highly  fragmented and includes many independent  operators and small chains.
We  believe  that  capable  operators  of strong  multi-unit  concepts  have the
opportunity  to increase  their share of the casual dining  segment.  We plan to
grow by increasing the number of  restaurants  in each of our existing  concepts
and by  developing  or  acquiring  additional  concepts  that  can  be  expanded
profitably.

     While we are a leader in the casual  dining  segment,  we know we cannot be
successful  without a clear sense of who we are. Our core purpose is "To nourish
and  delight  everyone we serve."  This core  purpose is  supported  by our core
values:

     o    Integrity and fairness;
     o    Respect and caring;
     o    Diversity;
     o    Always learning/always teaching; o Being "of service"; o Teamwork; and
     o    Excellence.

     Our mission is to be "The best in casual dining,  now and for generations."
We believe we can achieve  this goal by  continuing  to build on our  historical
strength  as a  multi-brand  casual  dining  company,  which is  grounded in our
commitment to combining the following areas:

     o    A strong culture that inspires and engages our people with firmly held
          values,  a clear  mission,  and a core  purpose to nourish and delight
          everyone we serve;
     o    Competitively superior leadership;
     o    Brand management excellence;
     o    Restaurant operating excellence; and
     o    Restaurant support excellence.

     Our strategic  framework also includes two points that we believe  separate
us from our competition. We are committed to:

     o    Being a  multi-brand  restaurant  company  that is bound  together  by
          common operating practices and a unifying culture which serves to make
          us stronger than the sum of our parts; and
     o    Obtaining  insights from our guests and employees to create  powerful,
          broadly appealing brands and to develop successful people.


                                       3
<PAGE>


Restaurant Concepts

Red Lobster

     Red  Lobster is the largest  casual  dining,  seafood-specialty  restaurant
operator in the United States. It offers an extensive menu featuring fresh fish,
shrimp,  crab, lobster,  scallops and other seafood in a casual atmosphere.  The
menu includes a variety of specialty seafood and non-seafood entrees, appetizers
and desserts.

     Most dinner entree prices range from $8.50 to $28.75,  with certain lobster
items available by the pound or at market price.  Most lunch entree prices range
from $5.99 to $11.75.  The price of each entree includes  salad,  side items and
our signature  Cheddar Bay biscuits.  During fiscal 2005,  the average check per
person  was  $17.00  to  $18.00,   with  alcoholic   beverages   accounting  for
approximately  8.2  percent  of  Red  Lobster's  sales.  Red  Lobster  maintains
approximately  101 different menus across its trade areas to reflect  geographic
differences  in  consumer  preferences,  prices  and  selections,  as  well as a
lower-priced children's menu.

Olive Garden

     Olive  Garden is the  market  share  leader  among  casual  dining  Italian
restaurants  in the United  States.  Olive  Garden's  menu includes a variety of
authentic  Italian foods featuring  fresh  ingredients and an expanded wine list
that includes a broad selection of wines imported from Italy.  The menu includes
antipasti  (appetizers);  soups,  salad and garlic  breadsticks;  baked  pastas;
sauteed specialties with chicken,  seafood and fresh vegetables;  grilled meats;
and a variety of desserts. Olive Garden also uses coffee imported from Italy for
its espresso and cappuccino.

     Most dinner entree prices range from $7.95 to $18.95, and most lunch entree
prices range from $5.95 to $9.75. The price of each entree also includes as much
fresh salad or soup and breadsticks as a guest desires.  During fiscal 2005, the
average  check  per  person  was  $14.00 to  $15.00,  with  alcoholic  beverages
accounting for approximately  8.7 percent of Olive Garden's sales.  Olive Garden
maintains  approximately 35 different dinner menus and 25 lunch menus across its
trade areas to reflect geographic  differences in consumer  preferences,  prices
and selections, as well as two children's menus.

Bahama Breeze

     Bahama Breeze is a restaurant that brings guests the feeling of a Caribbean
escape. It offers the food, drinks and atmosphere one might find in the islands.
The menu features  distinctive,  Caribbean-inspired  fresh seafood,  chicken and
steaks as well as signature  specialty drinks. The first Bahama Breeze opened in
1996 and met with strong positive  consumer  response.  We continued to test the
concept by opening a limited  number of  additional  restaurants  in each of the
following years, and began national  expansion of the concept in 1998. While the
concept continued to be well received by guests,  its financial  performance did
not meet our overall  expectations.  Bahama  Breeze closed six  restaurants  and
wrote down the carrying value of four others during the fourth quarter of fiscal
2004,  reducing to 32 the total number of restaurants in operation.  In addition
to closing some  underperforming  restaurants  in fiscal  2004,  we made changes
designed to improve the sales,  financial performance and long-term potential of
Bahama Breeze. These changes include  implementing lunch operations,  creating a
new,  more  approachable  dinner menu and reducing the size of a typical  Bahama
Breeze  building and the related capital  investment.  We have postponed any new
restaurant expansion at Bahama Breeze while we evaluate the new prototype, which
opened during the fourth quarter of fiscal 2004, and the other business building
enhancements.

     Most dinner entree prices at Bahama Breeze range from $9.00 to $20.00,  and
most lunch entree  prices range from $7.00 to $11.00.  During  fiscal 2005,  the
average  check  per  person  was  $22.00 to  $23.00,  with  alcoholic  beverages
accounting for approximately 25 percent of Bahama Breeze's sales.  Bahama Breeze
maintains  six  different  dinner lunch and dinner  menus to reflect  geographic
differences  in  consumer  preferences,  prices  and  selections,  as  well as a
children's menu.

Smokey Bones

     Smokey Bones features  barbequed pork,  beef and chicken,  as well as other
grilled favorites, all served in a lively yet comfortable mountain-lodge setting
that features  televised  sports.  We opened the first Smokey Bones in

                                       4
<PAGE>

September  1999,  and began  national  expansion  of the concept in fiscal 2002.
Smokey  Bones  has been well  received  by  consumers  and  continues  to expand
rapidly.  We opened 35 new Smokey Bones restaurants  during fiscal 2005, and had
104  restaurants  in operation at the end of the fiscal year. We plan to open 25
to 30 new Smokey Bones  restaurants in fiscal 2006. We believe that Smokey Bones
has strong  expansion  potential and is capable of achieving future annual sales
of $500 million or more.

     Most Smokey Bones dinner entree prices range from $9.29 to $14.99, and most
lunch entree prices range from $6.49 to $8.49.  During fiscal 2005,  the average
check per person was $14.00 to $15.00, with alcoholic  beverages  accounting for
approximately  11.2  percent of Smokey  Bones'  sales.  Smokey  Bones  maintains
approximately  12  different  dinner  menus and 12 lunch menus  across its trade
areas to reflect  geographic  differences  in consumer  preferences,  prices and
selections, as well as a children's menu.

Recent and Planned Growth

     During fiscal 2005, we opened 55 new restaurants  (excluding the relocation
of  existing  restaurants  to new sites and the  rebuilding  of  restaurants  at
existing  sites)  and  closed  three  restaurants.  In  addition,  we  had  four
restaurants  closed  temporarily  at the end of  fiscal  2005  that we expect to
reopen during fiscal 2006.  This resulted in a net increase of 56 restaurants in
fiscal 2005. We plan to open approximately 52-68 new Red Lobster,  Olive Garden,
Smokey  Bones  and  Seasons  52  restaurants   during  fiscal  2006   (excluding
relocations  and  rebuilds).  Our actual and  projected  new openings by concept
(excluding relocations and rebuilds) are shown below.

                                            Actual New          Projected New
                                      Restaurant Openings   Restaurant Openings
                                           Fiscal 2005           Fiscal 2006
                                           -----------           -----------
   Red Lobster...........................       1                   5-10
   Olive Garden..........................      17                  20-25
   Bahama Breeze.........................       0                      0
   Smokey Bones..........................      35                  25-30
   Seasons 52............................       2                    2-3
                                              ----                -------
       Totals............................      55                  52-68

     The actual  number of openings for each of our concepts will depend on many
factors, including our ability to locate appropriate sites, negotiate acceptable
purchase or lease terms, obtain necessary local governmental  permits,  complete
construction,  and recruit and train restaurant management and hourly personnel.
Our  objective  is to  continue to expand our current  portfolio  of  restaurant
concepts,  and to develop or acquire  additional  concepts  that can be expanded
profitably.  We have  continued  to test new  ideas  and  concepts,  and also to
evaluate potential  acquisition  candidates to assess whether they would satisfy
our strategic and financial objectives.

     We consider  location to be a critical factor in determining a restaurant's
long-term  success,  and we  devote  significant  effort  to the site  selection
process.  Prior to entering a market,  we conduct a thorough  study to determine
the optimal  number and placement of  restaurants.  Our site  selection  process
incorporates a variety of analytical  techniques to evaluate key factors.  These
factors include trade area  demographics,  such as target population density and
household  income levels;  competitive  influences in the trade area; the site's
visibility,  accessibility and traffic volume; and proximity to activity centers
such as shopping malls, hotel/motel complexes, offices and universities. Members
of senior management evaluate, inspect and approve each restaurant site prior to
its  acquisition.  Constructing  and opening a new  restaurant  typically  takes
approximately  180 days on average  after  permits are  obtained and the site is
acquired.

     The following table illustrates the approximate average capital investment,
size and dining  capacity of the one Red Lobster,  17 Olive Garden and 35 Smokey
Bones  restaurants  that were opened during fiscal 2005 (excluding  relocations,
rebuilds and conversions of existing restaurants).

                                       5
<PAGE>




                                    Capital       Square     Dining     Dining
                                  Investment(1)   Feet(2)    Seats(3)  Tables(4)
                                  -------------   -------    --------  ---------
   Red Lobster.................    $3,348,000      5,656       165        46
   Olive Garden................    $3,673,000      7,665       213        59
   Smokey Bones................    $3,446,000      7,590       223        51

(1)  Includes net present value of leases as well as working  capital  benefits,
     but excludes internal overhead.
(2)  Includes all space under the roof, including the coolers and freezers,  but
     excludes gazebos, pavilions and porte cocheres.
(3)  Includes bar dining seats and patio seating, but excludes bar stools.
(4)  Includes patio dining tables.

     We systematically  review the performance of our restaurants to ensure that
each one meets our standards.  When a restaurant falls below minimum  standards,
we conduct a thorough analysis to determine the causes, and implement  marketing
and operational plans to improve that restaurant's  performance.  If performance
does  not  improve  to  acceptable  levels,  the  restaurant  is  evaluated  for
relocation, closing or conversion to one of our other concepts.

     During  fiscal 2005,  we  permanently  closed three and  relocated  two Red
Lobster   restaurants,   and  rebuilt  two  and  relocated   four  Olive  Garden
restaurants.  During fiscal 2005,  we also wrote down the carrying  value of two
Olive  Garden  restaurants,  one Red  Lobster  restaurant  and one Smokey  Bones
restaurant.  The Smokey Bones  restaurant  was closed  subsequent to fiscal 2005
while the two Olive Garden restaurants and one Red Lobster restaurant  continued
to operate. These write-downs were a result of less-than-optimal  locations.  We
continue to evaluate our site  locations in order to minimize the risk of future
asset impairment charges.

Restaurant Operations

     We believe  that  high-quality  restaurant  management  is  critical to our
long-term  success.  We  also  believe  that  our  leadership  position,  strong
success-oriented   culture  and  various  short-term  and  long-term   incentive
programs, including stock options, restricted stock or stock units, help attract
and retain highly motivated restaurant managers.

     Our restaurant  management structure varies by concept and restaurant size.
Each  restaurant  is led by a  general  manager  and  three  to five  additional
managers,  depending  on  the  operating  complexity  and  sales  volume  of the
restaurant.  Each restaurant also employs approximately 50-180 hourly employees,
most of whom work part-time.  We issue detailed  operations manuals covering all
aspects of  restaurant  operations,  as well as food and beverage  manuals which
detail the  preparation  procedures of our  formulated  recipes.  The restaurant
management teams are responsible for the day-to-day operation of each restaurant
and for ensuring compliance with our operating  standards.  At our three largest
concepts,  Red  Lobster,  Olive  Garden and  Smokey  Bones,  restaurant  general
managers report to directors. At Red Lobster and Olive Garden, each director was
responsible  for six to 11 restaurants  at the end of fiscal 2005,  which is our
target range for each director at  established  operating  companies.  At Smokey
Bones, each director was responsible for four to seven restaurants at the end of
fiscal 2005.  Restaurants are visited  regularly by all levels of supervision to
help ensure strict adherence to all aspects of our standards.

     Each concept's vice president or director of training, together with senior
operations  executives,  are  responsible  for developing and  maintaining  that
concept's  operations  training programs.  These efforts include a 12 to 15-week
training program for management  trainees,  and continuing  development programs
for  managers,  supervisors  and  directors.  The  emphasis of the  training and
development  programs  varies by restaurant  concept,  but includes  leadership,
restaurant  business  management  and  culinary  skills.  We also  use a  highly
structured  training  program  to  open  new  restaurants,  including  deploying
training teams experienced in all aspects of restaurant operations.  The opening
training teams  typically begin work one week prior to opening and remain at the
new  restaurant  up to three weeks after the opening.  They are  re-deployed  as
appropriate to enable a smooth transition to the restaurant's operating staff.

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<PAGE>

Quality Assurance

     Our Total  Quality  Department  helps ensure that all  restaurants  provide
safe,  high-quality  food in a clean  and  safe  environment.  Through  rigorous
physical  evaluation and testing at our North American  laboratories and through
"point source  inspection" by our international  team of Quality  Specialists in
several  foreign  countries,  we purchase only seafood that meets or exceeds our
specifications.  We use  independent  third  parties  to  inspect  and  evaluate
commodity  vendors.  In addition,  any commodity  supplier that produces a "high
risk"  product is subject to a food safety  evaluation  by Darden  personnel  at
least  annually.  We require  our  suppliers  to  maintain  sound  manufacturing
practices  and operate  with the  comprehensive  HACCP food  safety  programs in
place. Since 1976, we have required routine  microbiological  testing of seafood
and other  commodities  for quality and  microbiological  safety.  In  addition,
Darden Total Quality  Managers and third party  auditors  visit each  restaurant
periodically  throughout  the  year  to  review  food  handling  and to  provide
education and training in food safety and sanitation. The Total Quality managers
also  serve as a liaison  to  regulatory  agencies  on issues  relating  to food
safety.

Purchasing and Distribution

     Our ability to ensure a consistent supply of high-quality food and supplies
at competitive prices to all of our restaurant concepts depends upon procurement
from reliable  sources.  Our purchasing staff sources,  negotiates and purchases
food and supplies from more than 2,000 suppliers in  approximately 45 countries.
Suppliers  must  meet  strict  quality  control  standards  in the  development,
harvest,  catch and production of food  products.  Competitive  bids,  long-term
contracts  and  long-term  vendor  relationships  are  routinely  used to manage
availability and cost of products.

     We believe  that our  seafood  purchasing  capabilities  are a  significant
competitive advantage.  Our purchasing staff travels routinely within the United
States and  internationally  to source more than 100  varieties  of  top-quality
seafood at competitive  prices.  We believe that we have  established  excellent
long-term relationships with key seafood vendors, and usually source our product
directly  from  producers  (not brokers or  middlemen).  We operate  procurement
offices  in  Singapore  and  Toronto,  our only  purchasing  offices  outside of
Orlando,  to source products directly from Asia and Canada.  While the supply of
certain seafood species is volatile,  we believe we have the ability to identify
alternative  seafood  products and to adjust our menus as  necessary.  All other
essential  food  products are  available,  or can be made  available  upon short
notice, from alternative  qualified  suppliers.  Because of the relatively rapid
turnover of perishable  food  products,  inventories in the  restaurants  have a
modest  aggregate dollar value in relation to sales.  Controlled  inventories of
specified  products  are  distributed  to all  restaurants  through  independent
national distribution companies.

     Our  supplier  diversity  program  is an  integral  part of our  purchasing
efforts.  Through this program, we identify minority and women-owned vendors and
assist them in establishing supplier  relationships with us. We are committed to
the  development  and growth of minority  and  women-owned  enterprises,  and in
fiscal 2005 we spent approximately 6.6 percent and 2.2 percent, respectively, of
our purchasing dollars with those firms.

Advertising and Marketing

     We  believe  we  have  developed   significant  marketing  and  advertising
capabilities.  Our size  enables  us to be a leading  advertiser  in the  casual
dining segment of the restaurant industry. Red Lobster and Olive Garden leverage
the efficiency of national network television advertising and supplement it with
local television advertising. Bahama Breeze and Smokey Bones do not use national
television advertising.  Our restaurants appeal to a broad spectrum of consumers
and we use advertising and product promotions to attract customers. We implement
periodic  promotions  as  appropriate  to maintain  and  increase  our sales and
profits. We also rely on radio and newspaper  advertising,  as well as newspaper
and direct mail coupon programs, as appropriate,  to attract customers.  We have
developed  and  consistently  use  sophisticated   consumer  marketing  research
techniques to monitor customer satisfaction and evolving expectations.

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<PAGE>


Employees

     At the end of fiscal 2005, we employed  approximately  150,100 persons.  Of
these  employees,  approximately  1,300 were  corporate  or  restaurant  concept
personnel  located  in  our  restaurant  support  center  in  Orlando,  Florida,
approximately 6,030 were restaurant  management  personnel in the restaurants or
in field offices,  and the remainder were hourly  restaurant  personnel.  Of the
restaurant  support center  employees,  approximately 60 percent were management
personnel and the balance were administrative or office employees. Our operating
executives  have an  average  of more than 14 years of  experience  with us. The
restaurant general managers average 12 years with us. We believe that we provide
working  conditions and  compensation  that compare  favorably with those of our
competitors.  Most  employees,  other than  restaurant  management and corporate
management,  are paid on an hourly basis. None of our employees are covered by a
collective bargaining agreement. We consider our employee relations to be good.

Information Technology

     We strive for leadership in the restaurant  business by using technology as
a competitive advantage and as an enabler of our strategy. Since 1975, computers
located in the  restaurants  have been used to assist in the  management  of the
restaurants. We have implemented systems targeted at improved financial control,
cost  management,  enhanced guest service and improved  employee  effectiveness.
Management  information  systems  are  designed  to be  used  across  restaurant
concepts,  yet are flexible  enough to meet the unique needs of each  restaurant
concept.  Several  years ago, we  implemented a suite of  web-enabled  and fully
integrated  financial  and  human  resource  (including  payroll  and  benefits)
systems.   We  also  implemented  a  high-speed  data  network   connecting  all
restaurants  to all current and  anticipated  future  applications.  In the past
year, we have been developing and piloting a next generation technology platform
for our restaurant  point of sale system.  We expect to deploy the new platform,
including new hardware and software,  to all  restaurant  concepts over the next
three years.

     Restaurant  hardware and software  support is provided or coordinated  from
the restaurant support center in Orlando, Florida, seven days a week, 24 hours a
day. A communications  network sends and receives  critical business data to and
from  the  restaurants  throughout  the  day and  night,  providing  timely  and
extensive  information on business  activity in every  location.  The restaurant
support center houses our data center, which contains sufficient computing power
to  process  information  from all  restaurants  quickly  and  efficiently.  Our
information  is  processed in a secured  environment  to protect both the actual
data  and the  physical  assets.  We  guard  against  business  interruption  by
maintaining a disaster  recovery plan, which includes storing critical  business
information off-site,  testing the disaster recovery plan at a hot-site facility
and  providing  on-site  power  backup  via a  large  diesel  generator.  We use
internally developed proprietary  software, as well as purchased software,  with
proven, non-proprietary hardware. This allows processing power to be distributed
effectively to each of our restaurants.

     Our  management   believes  that  our  current   systems  and  practice  of
implementing  regular updates will position us well to support current needs and
future growth. We are committed to maintaining an industry  leadership  position
in information systems and computing technology.  We use a strategic information
systems planning process that involves senior  management and is integrated into
our overall  business  planning.  Information  systems  projects are prioritized
based  upon  strategic,  financial,  regulatory  and  other  business  advantage
criteria.

Competition

     The restaurant  industry is intensely  competitive with respect to the type
and quality of food, price, service,  restaurant location,  personnel,  concept,
attractiveness  of facilities,  and  effectiveness of advertising and marketing.
The  restaurant  business  is often  affected  by  changes in  consumer  tastes;
national,  regional or local economic  conditions;  demographic trends;  traffic
patterns; the type, number and location of competing restaurants; and consumers'
discretionary  purchasing power. We compete within each market with national and
regional  chains and  locally-owned  restaurants  for customers,  management and
hourly   personnel  and  suitable  real  estate  sites.  We  also  face  growing
competition from the supermarket  industry,  which offers  "convenient meals" in
the form of improved  entrees and side dishes from the deli  section.  We expect
intense competition to continue in all of these areas.

     Other factors  pertaining to our  competitive  position in the industry are
addressed   under  the  sections   entitled   "Purchasing   and   Distribution,"
"Advertising  and  Marketing,"  "Information  Technology"  and  "Forward-Looking

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<PAGE>

Statements" elsewhere in this report.

Trademarks and Related Agreements

     We regard our  Darden  Restaurants(R),  Red  Lobster(R),  Olive  Garden(R),
Bahama  Breeze(R),  Smokey Bones  Barbeque & Grill(R) and Seasons  52(R) service
marks, and other variations of these service marks, as having  significant value
and as being  important in marketing  the  restaurants.  Our policy is to pursue
registration  of our  important  service  marks  and  trademarks  and to  oppose
vigorously any infringement of them.  Generally,  with  appropriate  renewal and
use, the registration of our service marks will continue indefinitely.

     Our only restaurant  operations outside of North America  historically have
been  conducted  through an Area  Development  and Franchise  Agreement with Red
Lobster  Japan  Co.,  Ltd.  ("Red  Lobster  Japan"),  an  unaffiliated  Japanese
corporation.  Red Lobster Japan operated 37 Red Lobster  restaurants in Japan as
of May 29, 2005. We do not have an ownership  interest in Red Lobster Japan, but
receive royalty income under the Franchise Agreement.  The amount of this income
is not material to our consolidated financial statements.

Seasonality

     Our sales volumes fluctuate seasonally.  During fiscal 2005, our sales were
highest in the spring and winter,  followed  by summer,  and lowest in the fall.
During fiscal 2004 and 2003, our sales were highest in the spring, lowest in the
fall,  and  comparable  during winter and summer.  Holidays,  severe weather and
similar  conditions  may  impact  sales  volumes  seasonally  in some  operating
regions.

Government Regulation

     We are  subject to various  federal,  state and local  laws  affecting  our
business.  Each of our restaurants  must comply with licensing  requirements and
regulations  by a number of  governmental  authorities,  which  include  health,
safety and fire agencies in the state or municipality in which the restaurant is
located.  The development  and operation of restaurants  depend on selecting and
acquiring suitable sites, which are subject to zoning, land use,  environmental,
traffic and other regulations.  To date, we have not been significantly affected
by any difficulty, delay or failure to obtain required licenses or approvals.

     During   fiscal  2005,   approximately   9.2  percent  of  our  sales  were
attributable  to the sale of alcoholic  beverages.  Regulations  governing their
sale require  licensure by each site (in most cases,  on an annual  basis),  and
licenses may be revoked or suspended  for cause at any time.  These  regulations
relate to many aspects of  restaurant  operation,  including  the minimum age of
patrons and employees,  hours of operation,  advertising,  wholesale purchasing,
inventory  control  and  handling,  and  storage  and  dispensing  of  alcoholic
beverages.  The failure of a restaurant to obtain or retain these licenses would
adversely  affect the  restaurant's  operations.  We also are subject in certain
states to "dram-shop"  statutes,  which generally  provide an injured party with
recourse  against  an  establishment  that  serves  alcoholic  beverages  to  an
intoxicated person, who then causes injury to himself or a third party. We carry
liquor  liability  coverage  as  part  of our  comprehensive  general  liability
insurance.

     We also are subject to federal and state  minimum  wage laws and other laws
governing  such matters as overtime,  tip credits,  working  conditions,  safety
standards,  and hiring and  employment  practices.  Changes in these laws during
fiscal 2005 have not had a material effect on our operations.

     We currently are operating under a Tip Rate Alternative Commitment ("TRAC")
agreement with the Internal Revenue Service.  Through increased  educational and
other efforts in the restaurants,  the TRAC agreement  reduces the likelihood of
potential chain-wide employer-only FICA assessments for unreported tips.

     We are subject to federal and state  environmental  regulations,  but these
rules have not had a material  effect on our  operations.  During  fiscal  2005,
there were no material capital expenditures for environmental control facilities
and no material expenditures for this purpose are anticipated.

     Our  facilities  must  comply  with  the  applicable  requirements  of  the
Americans With Disabilities Act of 1990 ("ADA") and related state  accessibility
statutes.  Under the ADA and related  state  laws,  we must  provide  equivalent

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<PAGE>

service  to  disabled  persons,  and make  reasonable  accommodation  for  their
employment,  and when constructing or undertaking  significant remodeling of our
restaurants, we must make those facilities accessible.

Executive Officers of the Registrant

     Our executive officers as of July 29, 2005 are listed below.

     Joe R. Lee, age 64, has been our Chairman of the Board since April 1995. He
served as our Chief  Executive  Officer from December 1994 until  November 2004.
Mr. Lee joined Red Lobster in 1967 as a member of its opening  management  team,
and was  named  its  President  in  1975.  From  1970 to 1995,  he held  various
positions with General Mills, Inc., a manufacturer and marketer of consumer food
products  and  our  former  parent  company,   including  Vice  Chairman,   with
responsibility  for  various  consumer  foods  businesses  and  corporate  staff
functions,  Chief Financial  Officer and Executive Vice  President,  Finance and
International Restaurants.

     Clarence  Otis,  Jr., age 49, has been our Chief  Executive  Officer  since
November 2004, and a Director since  September  2004. Mr. Otis was our Executive
Vice President from March 2002 until November 2004 and President of Smokey Bones
Barbeque & Grill from December 2002 until November 2004. He served as our Senior
Vice  President  from  December 1999 until April 2002,  and our Chief  Financial
Officer from  December  1999 until  December  2002. He joined us in 1995 as Vice
President  and  Treasurer.  He served as our  Senior  Vice  President,  Investor
Relations  and  Treasurer  from  July  1997 to July  1998,  and as  Senior  Vice
President,  Finance and Treasurer from July 1998 until December 1999.  From 1991
to  1995,  he was  employed  by  Chemical  Securities,  Inc.  (now  J.P.  Morgan
Securities,  Inc.),  an  investment  banking  firm,  where he had been  Managing
Director and Manager of Public Finance.

     Andrew H. (Drew) Madsen, age 49, has been our President and Chief Operating
Officer since November 2004, and a Director since September 2004. Mr. Madsen was
our Senior Vice  President  and  President of Olive Garden from March 2002 until
November  2004,  and Executive Vice President of Marketing for Olive Garden from
December  1998 to March 2002.  From 1997 until  joining us, he was  President of
International  Master  Publishers,  Inc., a company that  developed and marketed
consumer  information  products such as magazines and compact  discs.  From 1993
until 1997, he held various  positions at James River  Corporation  (now part of
Georgia-Pacific   Corporation,   a  diversified   paper  and  building  products
manufacturer),  including  Vice  President  and  General  Manager  for the Dixie
consumer products unit.

     Blaine  Sweatt,  III,  age  57,  has  been  our  President,   New  Business
Development  since February 1996 and Executive Vice President  since April 1995,
and a Director since 1995. He led teams that developed the Olive Garden,  Bahama
Breeze,  Smokey  Bones and  Seasons 52  concepts,  among  others.  He joined Red
Lobster in 1976 and was named Director of New Restaurant Concept  Development in
1981. From 1986 to 1989, he held various  positions with General Mills,  Inc., a
manufacturer  and  marketer  of consumer  food  products  and our former  parent
company.

     James  (J.J.)  Buettgen,  age 45, has been our Senior  Vice  President  and
President of Smokey Bones Barbeque & Grill since November 2004. From August 2004
until  assuming  his  current  position  he was our Senior  Vice  President  and
President-designate  of Smokey  Bones.  From July 2003 until August 2004, he was
President of Big Bowl Asian  Kitchen,  a casual dining  company owned by Brinker
International,  Inc.,  a restaurant  operator,  and from October 2002 until June
2003 he was  Senior  Vice  President  of  Marketing  and Brand  Development  for
Brinker.  From 1999 to 2002,  he was Senior Vice Present of Marketing  and Sales
for Disneyland  Resorts, a division of the Walt Disney Company,  where he helped
launch  Disney's  California  Adventure  theme  park,  and from 1998 to 1999 was
Senior Vice  President of Marketing for Hollywood  Entertainment  Group, a video
retailer.  He held  several  marketing  posts  with our former  parent  company,
General Mills, Inc., a manufacturer and marketer of consumer food products, from
1989 through  1994,  and served first as director and then as Vice  President of
Marketing for Olive Garden from 1994 until 1998.

     Laurie B. Burns,  age 43, has been our Senior Vice  President and President
of Bahama Breeze since March 2003. She joined us in April 1999 as Vice President
of  Development  for Red  Lobster,  and  served as our  Senior  Vice  President,
Development  from September 2000 until March 2003. She was a private real estate
consultant  from

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<PAGE>

October 1998 until joining us in April 1999, and was Regional Vice President for
Development for the Eastern United States at Homestead Village, an extended-stay
hotel company, from 1995 to 1998.

     Linda J.  Dimopoulos,  age 54, has been our Senior Vice President and Chief
Financial  Officer since  December  2002.  She joined us in 1982,  and served as
Senior Vice  President,  Financial  Operations  of Red Lobster from 1993 to July
1998,  as  our  Senior  Vice  President,   Corporate   Controller  and  Business
Information  Systems  from July 1998 to  December  1999,  and as our Senior Vice
President,  Chief  Information  Officer from  December  1999 until  assuming her
current position in December 2002.

     Stephen E. Helsel,  age 60, has been our Senior Vice  President,  Corporate
Controller  since  December 1999, and will retire on July 29, 2005. He joined us
in 1973 as an  accountant  with  Red  Lobster,  and was  named  Vice  President,
Controller of Red Lobster in 1989. He served as our Vice President,  Controller,
Accounting Services from 1991 to 1996, and as Senior Vice President, Information
Services from 1996 until December 1999.

     Kim Lopdrup,  age 47, has been our Senior Vice  President  and President of
Red Lobster  since May 2004.  He joined us in November  2003 as  Executive  Vice
President  of  Marketing  for Red  Lobster.  From 2001 until 2002,  he served as
Executive  Vice  President  and  Chief  Operating  Officer  for  North  American
operations of Burger King  Corporation,  an operator and franchiser of fast food
restaurants.  From 1985 until 2001,  he worked for Allied  Domecq Quick  Service
Restaurants  ("ADQSR"),  a franchiser  of quick  service  restaurants  including
Dunkin' Donuts,  Baskin-Robbins and Togo's Eateries, where he held progressively
more responsible positions in marketing, strategic and general management roles,
eventually serving as Chief Executive Officer of ADQSR International.

     Daniel  M.  Lyons,  age 52,  has  been our  Senior  Vice  President,  Human
Resources  since January 1997. He joined us in 1993 as Senior Vice  President of
Personnel  for Olive Garden.  Prior to joining  Olive Garden,  he spent 18 years
with the Quaker Oats  Company,  an  international  marketer of food and beverage
products,   holding  increasingly  more  responsible  positions  including  Vice
President Human Resources for the North American Breakfast Food Division.

     Barry Moullet,  age 47, has been our Senior Vice President,  Supply Chain &
Development   since  August  2003.  He  served  as  our  Senior  Vice  President
Purchasing,  Distribution  and Food Safety from June 1999 until August 2003.  He
joined us in July 1996 as Senior Vice  President,  Purchasing and  Distribution.
Prior to  joining  us,  he spent 15  years in the  purchasing  field in  various
positions with Restaurant Services, Inc., a Burger King purchasing co-operative,
KFC Corporation and the Pillsbury Company.

     Dave Pickens,  age 50, has been our Senior Vice  President and President of
Olive Garden since  December  2004. He joined us in 1973 as a Red Lobster hourly
employee,  and progressed from manager trainee to regional  operations  manager,
director of operations,  and  ultimately was promoted to a division  Senior Vice
President  of  Operations  for Red  Lobster.  He joined  Olive Garden in 1995 as
Senior Vice President of Operations for the Orlando division and was promoted to
Executive Vice President of Operations in September 1999,  where he served until
his promotion to President of Olive Garden in December 2004.

     C.  Bradford  Richmond,  age 46,  will  become our Senior  Vice  President,
Corporate Controller effective August 1, 2005,  succeeding Stephen Helsel who is
retiring. He currently is Senior Vice President Finance,  Strategic Planning and
Controller  of Red  Lobster,  a position  he has held since  January  2003,  and
previously  was Senior Vice  President,  Finance and  Controller at Olive Garden
from August 1998 to January  2003.  He joined us in 1982 as a food and  beverage
analyst for Casa Gallardo,  a restaurant  concept formerly owned and operated by
us,  and from June  1985 to August  1998  held  progressively  more  responsible
finance and marketing  analyst  positions with our York Steak House, Red Lobster
and Olive Garden operating companies in both the United States and Canada.

     Paula J.  Shives,  age 54,  has been our  Senior  Vice  President,  General
Counsel and Secretary since June 1999. Prior to joining us, she served as Senior
Vice  President,  General Counsel and Secretary from 1995 to 1999, and Associate
General Counsel from 1985 to 1995, of Long John Silver's Restaurants, Inc.

     Richard J.  Walsh,  age 53, has been our Senior Vice  President,  Corporate
Affairs since 1994. He joined General Mills,  Inc., a manufacturer  and marketer
of consumer food products and our former parent  company,  in 1984 as Manager of
Government  Affairs for Red Lobster.  He served as Vice  President of Government
and

                                       11

<PAGE>

Community Relations for General Mills Restaurants, Inc. from 1987 until assuming
his current position in December 1994.

Cautionary Factors That Could Affect Our Results

     Described below are important  factors,  risks and uncertainties that could
cause  our  actual  results  to  differ   materially  from  those  projected  in
forward-looking statements made by us or on our behalf.

     Intense Competition.

     The  casual  dining  sector  of  the   restaurant   industry  is  intensely
competitive with respect to pricing, service,  location,  personnel and type and
quality of food,  and there are many  well-established  competitors.  We compete
within  each  market  with   national   and  regional   restaurant   chains  and
locally-owned  restaurants.  We also face growing competition as a result of the
trend toward convergence in grocery, deli and restaurant services,  particularly
in the  supermarket  industry  which  offers  "convenient  meals" in the form of
improved entrees and side dishes from the deli section.  We compete primarily on
the quality, variety and value perception of menu items. The number and location
of   restaurants,   type  of  concept,   quality  and   efficiency  of  service,
attractiveness  of facilities and  effectiveness  of  advertising  and marketing
programs are also important factors. We anticipate that intense competition will
continue with respect to all of these  factors.  If we are unable to continue to
compete effectively, our business, financial condition and results of operations
would be adversely affected.

     Economic and Business Factors.

     Our business  results depend on a number of  industry-specific  and general
economic factors, many of which are beyond our control. The casual dining sector
of the  restaurant  industry is affected by changes in  national,  regional  and
local economic  conditions,  seasonal  fluctuation  of sales  volumes,  consumer
preferences,  including  changes in consumer  tastes and dietary  habits and the
level of consumer acceptance of our restaurant  concepts,  and consumer spending
patterns.  The  performance  of  individual  restaurants  may also be  adversely
affected by factors such as demographic trends, severe weather, traffic patterns
and the type, number and location of competing restaurants.

     In addition,  general economic  conditions,  such as recessionary  economic
cycles, a protracted  economic  slowdown,  a worsening  economy or industry-wide
cost  pressures,  could affect  consumer  behavior  and spending for  restaurant
dining  occasions and lead to a decline in sales and earnings.  Furthermore,  we
cannot predict the effects of actual or threatened  armed conflicts or terrorist
attacks, efforts to combat terrorism,  military action against any foreign state
or group located in a foreign state or heightened  security  requirements on the
economy or consumer  confidence in the United States.  Any of these events could
also affect consumer  spending  patterns or result in increased costs for us due
to security measures.

     Unfavorable  changes in the above factors or in other business and economic
conditions  affecting our customers could increase our costs,  reduce traffic in
some or all of our  restaurants or impose  practical  limits on pricing,  any of
which could lower our profit  margins and have a material  adverse affect on our
financial condition and results of operations.

     Price and Availability of Food, Ingredients and Utilities.

     Our results of operations depend significantly on our ability to anticipate
and  react to  changes  in the  price  and  availability  of food,  ingredients,
utilities  and  other  related  costs  over  which we may have  little  control.
Operating  margins for our  restaurants  are subject to changes in the price and
availability of food  commodities,  including  shrimp,  lobster,  crab and other
seafood, as well as beef, pork, chicken, cheese and produce. The introduction of
or changes to tariffs on imported  shrimp or other food products  could increase
our costs and possibly  impact the supply of those  products.  We are subject to
the general risks of inflation. In addition, possible shortages or interruptions
in the  supply of food items  caused by  inclement  weather or other  conditions
beyond our control could adversely affect the availability,  quality and cost of
the items we buy.  Our  restaurants'  operating  margins  are also  affected  by
fluctuations in the price of utilities such as natural gas,  whether as a result
of  inflation or  otherwise,  on which the  restaurants  depend for their energy
supply. Our inability to anticipate and respond effectively to an adverse change
in any of these factors could have a significant  adverse  effect on our results
of operations.

                                       12
<PAGE>

     Labor and Insurance Costs.

     Our  restaurant  operations are subject to federal and state laws governing
such matters as minimum wages, working conditions,  overtime and tip credits. We
have a  substantial  number of employees  who are paid wage rates at or slightly
above the minimum wage. As federal and state minimum wage rates increase, we may
need to increase not only the wages of our minimum wage  employees  but also the
wages  paid to  employees  at wage  rates  that are above  minimum  wage.  Labor
shortages and increased  employee  turnover could also increase our labor costs.
If competitive  pressures or other factors prevent us from offsetting  increased
labor costs by increases in prices, our profitability may decline.  In addition,
the  current  premiums  that  we  pay  for  our  insurance  (including  workers'
compensation, general liability, health, and directors' and officers' liability)
may  increase at any time,  thereby  further  increasing  our costs.  The dollar
amount of claims that we actually experience under our workers' compensation and
general liability insurance, for which we carry high per-claim deductibles,  may
also increase at any time, thereby further increasing our costs.

     Increased advertising and marketing costs.

     If our competitors increase their spending on advertising and promotion, if
our advertising, media or marketing expenses increase, or if our advertising and
promotion  become  less  effective  than  that  of  our  competitors,  we  could
experience a material adverse effect on our results of operations.

     Higher-than-anticipated Costs to Open or Close Restaurants.

     Our revenues and expenses can be impacted  significantly  by the number and
timing  of the  opening  of new  restaurants  and the  closing,  relocating  and
remodeling of existing  restaurants.  We incur substantial  pre-opening expenses
each time we open a new restaurant and other expenses when we close, relocate or
remodel existing restaurants.  The expenses of opening,  closing,  relocating or
remodeling any of our restaurants,  may be higher than anticipated.  An increase
in such expenses could have an adverse effect on our results of operations.

     Litigation.

     Our business is subject to the risk of litigation by employees,  consumers,
suppliers,  shareholders  or others  through  private  actions,  class  actions,
administrative proceedings,  regulatory actions or other litigation. The outcome
of litigation,  particularly  class action lawsuits and regulatory  actions,  is
difficult to assess or quantify.  Plaintiffs in these types of lawsuits may seek
recovery  of very  large or  indeterminate  amounts,  and the  magnitude  of the
potential  loss  relating to such  lawsuits may remain  unknown for  substantial
periods of time. The cost to defend future litigation may be significant.  There
may also be adverse  publicity  associated  with  litigation that could decrease
customer  acceptance of our services,  regardless of whether the allegations are
valid or whether we are  ultimately  found liable.  As a result,  litigation may
adversely affect our business, financial condition and results of operations.

     Unfavorable Publicity.

     Multi-unit  restaurant businesses such as ours can be adversely affected by
publicity  resulting from  complaints or litigation  alleging poor food quality,
food-borne illness,  personal injury, adverse health effects (including obesity)
or other  concerns.  Negative  publicity  may also result from actual or alleged
violations by our  restaurants  of "dram shop" laws which  generally  provide an
injured  party with  recourse  against an  establishment  that serves  alcoholic
beverages  to an  intoxicated  party who then  causes  injury to himself or to a
third party.  Regardless of whether the  allegations  or  complaints  are valid,
unfavorable  publicity relating to a limited number of our restaurants,  or only
to a single  restaurant,  could adversely affect public perception of the entire
brand.  Adverse publicity and its effect on overall consumer perceptions of food
safety could have a material adverse effect on our business.

     Lack of Suitable Locations.

     The success of our restaurants depends in large part on their location.  As
demographic and economic patterns change,  current locations may not continue to
be  attractive  or  profitable.  Possible  declines in  neighborhoods  where our
restaurants  are located or adverse  economic  conditions  in areas  surrounding
those  neighborhoods  could result in reduced  revenues in those  locations.  In
addition,  desirable locations for new restaurant openings or for the relocation
of existing  restaurants  may not be  available  at an  acceptable  cost when we
identify a  particular  opportunity

                                       13
<PAGE>

for a new  restaurant  or  relocation.  The  occurrence  of one or more of these
events could have a  significant  adverse  effect on our revenues and results of
operations.

     Government Regulations.

     The restaurant  industry is subject to extensive  federal,  state and local
laws  and   regulations,   including  those  relating  to  building  and  zoning
requirements  and  those  relating  to the  preparation  and sale of  food.  The
development and operation of restaurants  depend to a significant  extent on the
selection and acquisition of suitable sites,  which are subject to zoning,  land
use, environmental,  traffic and other regulations and requirements. We are also
subject to licensing and regulation by state and local  authorities  relating to
health,  sanitation,  safety and fire standards and liquor licenses, federal and
state laws governing our relationships with employees  (including the Fair Labor
Standards Act and applicable minimum wage requirements,  overtime, family leave,
tip credits, working conditions, safety standards and citizenship requirements),
federal and state laws which prohibit  discrimination  and other laws regulating
the design and operation of facilities,  such as the Americans With Disabilities
Act of 1990.  In  addition,  we are subject to a variety of  federal,  state and
local laws and regulations  relating to the use, storage,  discharge,  emission,
and disposal of hazardous materials. The impact of current laws and regulations,
the  effect of future  changes in laws or  regulations  that  impose  additional
requirements  and the  consequences of litigation  relating to current or future
laws and  regulations  could  increase our  compliance  and other costs of doing
business  and  therefore  have an adverse  effect on our results of  operations.
Failure to comply with the laws and regulatory  requirements  of federal,  state
and local  authorities  could  result in,  among  other  things,  revocation  of
required  licenses,  administrative  enforcement  actions,  fines  and civil and
criminal liability.

     Failure to Achieve Growth Objectives.

     As part of our  business  strategy,  we intend to  continue  to expand  our
current  portfolio of restaurant  concepts and to develop or acquire  additional
concepts that can be expanded profitably. This strategy involves numerous risks,
and we may not be able to achieve our growth  objectives.  We may not be able to
open all of our planned new  restaurants,  and the new restaurants  that we open
may  not be  profitable  or as  profitable  as  our  existing  restaurants.  New
restaurants  typically  experience an adjustment  period before sales levels and
operating  margins  normalize,   and  even  sales  at  successful   newly-opened
restaurants generally do not make a significant contribution to profitability in
their initial months of operation.  The opening of new restaurants can also have
an adverse effect on sales levels at existing restaurants.  There are additional
risks involved with  expanding  newer concepts (such as Bahama Breeze and Smokey
Bones) that have not yet proven their long-term viability.  Furthermore,  we may
not be able to develop or acquire additional  concepts that are as profitable as
our existing  restaurants.  Growth through  acquisitions may involve  additional
risks.  For  example,  we may pay too much for a concept  relative to the actual
economic  return,  be required to borrow  funds to make our  acquisition  (which
would  increase  our  interest  expense) or be unable to  integrate  an acquired
concept into our operations.

     The  ability  to open and  profitably  operate  restaurants  is  subject to
various  risks,  such as the  identification  and  availability  of suitable and
economically  viable locations,  the negotiation of acceptable lease or purchase
terms for new locations,  the need to obtain all required  governmental  permits
(including  zoning approvals and liquor licenses) on a timely basis, the need to
comply  with  other  regulatory  requirements,  the  availability  of  necessary
contractors and subcontractors,  the ability to meet construction  schedules and
budgets,  the  ability to manage  union  activities  such as  picketing  or hand
billing  which  could  delay  construction,  increases  in  labor  and  building
materials  costs,  the  availability of financing at acceptable rates and terms,
changes in weather or other acts of God that could result in construction delays
and adversely affect the results of one or more restaurants for an indeterminate
amount of time, our ability to hire and train qualified management personnel and
general economic and business conditions. At each potential location, we compete
with other  restaurants and retail businesses for desirable  development  sites,
construction  contractors,  management  personnel,  hourly  employees  and other
resources.  If we are unable to  successfully  manage these risks, we could face
increased  costs and lower than  anticipated  revenues  and  earnings  in future
periods.

Cautionary Statement Regarding Forward-Looking Statements

     This  report may contain  forward-looking  statements  with  respect to the
financial  condition,   results  of  operations,   plans,   objectives,   future
performance  and  business of Darden  Restaurants,  Inc.  and its  subsidiaries.
Statements preceded by, followed by or that include words such as "may," "will,"
"expect," "intend," "anticipate,"

                                       14
<PAGE>

"continue,"  "estimate," "project," "believe," "plan" or similar expressions are
intended to identify some of the  forward-looking  statements within the meaning
of the Private Securities Litigation Reform Act of 1995 and are included,  along
with this statement,  for purposes of complying with the safe harbor  provisions
of that Act. These  forward-looking  statements involve risks and uncertainties.
Actual  results  may  differ   materially   from  those   contemplated   by  the
forward-looking  statements  due to, among others,  the risks and  uncertainties
described in this report,  including under the heading  "Cautionary Factors That
Could Affect Our Results," and the documents  incorporated  by reference in this
report.   We  undertake  no  obligation   to  update   publicly  or  revise  any
forward-looking   statements  for  any  reason,  whether  as  a  result  of  new
information, future events or otherwise.

Item 2.  PROPERTIES

     As of May 29,  2005,  we  operated  1,381  restaurants  (including  679 Red
Lobster,  563 Olive Garden, 32 Bahama Breeze, 104 Smokey Bones and three Seasons
52 restaurants) in the following locations:

  Alabama (22)      Iowa (14)            Nevada (12)           South Dakota (3)
  Arizona (29)      Kansas (11)          New Hampshire (5)     Tennessee (34)
  Arkansas (11)     Kentucky (17)        New Jersey (29)       Texas (111)
  California (96)   Louisiana (12)       New Mexico (11)       Utah (13)
  Colorado (26)     Maine (4)            New York (51)         Vermont (1)
  Connecticut (9)   Maryland (24)        North Carolina (32)   Virginia (45)
  Delaware (4)      Massachusetts (11)   North Dakota (4)      Washington (25)
  Florida (146)     Michigan (52)        Ohio (84)             West Virginia (7)
  Georgia (59)      Minnesota (24)       Oklahoma (18)         Wisconsin (20)
  Hawaii (1)        Mississippi (8)      Oregon (12)           Wyoming (2)
  Idaho (6)         Missouri (31)        Pennsylvania (69)     Canada (37)
  Illinois (57)     Montana (2)          Rhode Island (3)
  Indiana (47)      Nebraska (8)         South Carolina (22)

     Of our 1,381  restaurants  open on May 29, 2005,  838 were located on owned
sites and 543 were located on leased  sites.  The 543 leases are  classified  as
follows:

    Land-Only Leases (we own buildings and equipment)............       423
    Ground and Building Leases...................................        68
    Space/In-Line/Other Leases...................................        52
                                                                       ----
             Total...............................................       543
                                                                       ====

     During fiscal 1999, we formed two  subsidiary  corporations,  each of which
elected to be taxed as a Real Estate  Investment  Trust  ("REIT") under Sections
856  through  860 of the  Internal  Revenue  Code.  These  elections  limit  the
activities  of both  corporations  to holding  certain real estate  assets.  The
formation of these two REITs is designed  primarily to assist us in managing our
real  estate  portfolio  and  possibly  to provide a vehicle  to access  capital
markets in the future.

     Both REITs are  non-public  REITs.  Through our  subsidiary  companies,  we
indirectly  own 100 percent of all voting stock and greater than 99.5 percent of
the total value of each REIT. For financial reporting  purposes,  both REITs are
included in our consolidated financial statements.

     Of the 15 buildings that make up our executive offices, culinary center and
training  facilities in Orlando,  Florida,  we own 11 and lease four.  Except in
limited instances,  our restaurant sites and other facilities are not subject to
mortgages or encumbrances securing money borrowed by us from outside sources. In
our opinion,  our  buildings  and  equipment  generally  are in good  condition,
suitable for their purposes and adequate for our current and foreseeable  needs.
See also Note 4 "Land, Buildings, and Equipment, Net" and Note 12 "Leases" under
Notes  to  Consolidated  Financial  Statements  in our  2005  Annual  Report  to
Shareholders, incorporated herein by reference.

Item 3.  LEGAL PROCEEDINGS

     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

                                       15
<PAGE>

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.


     Like other restaurant companies and retail employers, we have been faced in
a few states with allegations of purported  class-wide wage and hour violations.
The following is a brief  description of the more  significant of these matters.
In  view  of the  inherent  uncertainties  of  litigation,  the  outcome  of any
unresolved  matter described below cannot be predicted at this time, nor can the
amount of any potential loss be reasonably estimated.

     In March 2002 and March 2003,  two  purported  class action  lawsuits  were
brought  against us in the Superior Court of Orange County,  California by three
current and former hourly restaurant employees alleging violations of California
labor laws with respect to providing meal and rest breaks.  Although we continue
to believe we provided the required  meal and rest breaks to our  employees,  to
avoid potentially costly and protracted litigation,  we agreed during the second
quarter  of fiscal  2005 to settle  both  lawsuits  and a similar  case filed in
Sacramento  County,  for  approximately  $9.5 million.  Terms of the settlement,
which do not include any admission of liability by us, have received preliminary
judicial  approval,  but  completion of the settlement may not occur for several
months.  We  recorded  settlement  expenses  associated  with these  lawsuits of
approximately  $4.5 million  during fiscal 2005 and  approximately  $5.0 million
during fiscal 2004,  which are included in selling,  general and  administrative
expenses. The settlement amounts of these lawsuits are included in other current
liabilities at May 29, 2005.

     In August  2003,  three  former  employees  in  Washington  filed a similar
purported  class action in Washington  State  Superior  Court in Spokane  County
alleging  violations  of  Washington  labor laws with respect to providing  rest
breaks.  The Court  stayed  the  action  and  ordered  the  plaintiffs  into our
mandatory  arbitration  program;  the plaintiffs' motion for reconsideration was
not  granted,  and their  appeal of the denial of  reconsideration  was also not
granted.  We  believe  we  provided  the  required  meal and rest  breaks to our
employees, and we intend to vigorously defend our position in this case.


     Beginning in 2002, a total of five  purported  class action  lawsuits  have
been filed in Superior  Courts of California (two each in Los Angeles County and
Orange County, and one in Sacramento County) in which the plaintiffs allege that
they and other current and former  service  managers,  beverage and  hospitality
managers and culinary  managers were improperly  classified as exempt  employees
under  California  labor laws.  The  plaintiffs  seek unpaid  overtime wages and
penalties. Two of the cases have been removed to arbitration under our mandatory
arbitration  program,  and we are  seeking  to cause the  remaining  cases to be
stayed pending  resolution of the  earliest-filed  cases. We believe we properly
classified  these  employees  as exempt  under  California  law and we intend to
vigorously defend against all claims in these lawsuits.


Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     Not applicable.


                                     PART II

Item 5. MARKET FOR REGISTRANT'S  COMMON EQUITY,  RELATED STOCKHOLDER MATTERS AND
        ISSUER PURCHASES OF EQUITY SECURITIES

     The principal United States market on which our common shares are traded is
the New York Stock  Exchange,  where our shares are traded under the symbol DRI.
As of July 25,  2005,  there were  approximately  40,602  record  holders of our
common  shares.  The  information  concerning  the  dividends  and  high and low
intraday  sales  prices  for our  common  shares  traded  on the New York  Stock
Exchange for each full quarterly period during fiscal 2004 and 2005 contained in
Note 19,  "Quarterly Data (Unaudited)" in our 2005 Annual Report to Shareholders
is incorporated herein by reference.  We have not sold any securities during the
last fiscal year that were not registered under the Securities Act of 1933.

                                       16
<PAGE>


     The table below provides information concerning our repurchase of shares of
our common stock during the fourth quarter of fiscal 2005.  Since commencing our
repurchase  program in December 1995, we have repurchased a total of 120,584,871
shares  under  authorizations  from our  Board of  Directors  to  repurchase  an
aggregate of 137,400,000 shares.

<TABLE>
<CAPTION>

--------------------------- ---------------- ------------ ---------------------- --------------------
                                                            Total Number of        Maximum Number of
                                                           Shares Purchased as         Shares that
                              Total Number     Average      Part of Publicly           May Yet be
                               of Shares      Price Paid   Announced Plans or    Purchased Under the
             Period           Purchased(1)     per Share       Programs                Program (2)
--------------------------- ---------------- ------------ ---------------------- --------------------
<S>                           <C>             <C>            <C>                    <C>
February 28, 2005 through
   April 3, 2005               1,571,038       $30.27          1,571,038              19,745,811
--------------------------- ---------------- ------------ ---------------------- --------------------
April 4, 2005 through
   May 1, 2005                 1,450,725       $30.86          1,450,725              18,295,086
--------------------------- ---------------- ------------ ---------------------- --------------------
May 2, 2005 through
   May 29, 2005                1,479,957       $31.29          1,479,957              16,815,129
--------------------------- ---------------- ------------ ---------------------- --------------------
Total                          4,501,720       $30.80          4,501,720              16,815,129
--------------------------- ---------------- ------------ ---------------------- --------------------
<FN>

(1)  All of the shares  purchased  during the fourth quarter of fiscal 2005 were
     purchased as part of our  repurchase  program,  the authority for which was
     increased to an aggregate of 137.4 million shares by our Board of Directors
     on September 28, 2004, and announced publicly in a press release issued the
     same day. There is no expiration date for our program. The number of shares
     purchased  includes  shares  withheld  for taxes on vesting  of  restricted
     stock,  and shares  delivered  or deemed to be delivered to us on tender of
     stock in  payment  for the  exercise  price of  options.  These  shares are
     included as part of our  repurchase  program  and  deplete  the  repurchase
     authority granted by our Board. The number of shares  repurchased  excludes
     shares we reacquired  pursuant to tax  withholding  on option  exercises or
     forfeiture of restricted stock.

(2)  Repurchases  are subject to prevailing  market prices,  may be made in open
     market or private  transactions,  and may occur or be  discontinued  at any
     time.  There can be no assurance that we will  repurchase  any shares.  The
     figures in this column  include the  additional 22 million shares that were
     authorized to be repurchased by our Board on September 28, 2004.
</FN>
</TABLE>

Item 6.  SELECTED FINANCIAL DATA

     The  information  for fiscal 2001 through 2005  contained in the  Five-Year
Financial  Summary in our 2005 Annual  Report to  Shareholders  is  incorporated
herein by reference.


Item 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     The information set forth in the section entitled "Management's  Discussion
and  Analysis of  Financial  Condition  and Results of  Operations"  in our 2005
Annual Report to Shareholders is incorporated herein by reference.

Item 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The text under the heading "Quantitative and Qualitative  Disclosures About
Market Risk" contained within "Management's Discussion and Analysis of Financial
Condition and Results of Operations"  in our 2005 Annual Report to  Shareholders
is incorporated herein by reference.

Item 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The Report of Independent  Registered Public Accounting Firm,  Consolidated
Statements of Earnings,  Consolidated Balance Sheets, Consolidated Statements of
Changes in  Stockholders'  Equity and  Accumulated  Other

                                       17
<PAGE>

Comprehensive Income (Loss), Consolidated Statements of Cash Flows, and Notes to
Consolidated  Financial Statements in our 2005 Annual Report to Shareholders are
incorporated herein by reference.

Item 9.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
         FINANCIAL DISCLOSURE

         Not applicable.

Item 9A.   CONTROLS AND PROCEDURES

     Under  the  supervision  and  with  the  participation  of our  management,
including  our Chief  Executive  Officer  and our Chief  Financial  Officer,  we
evaluated  the  effectiveness  of the design  and  operation  of our  disclosure
controls  and  procedures  (as defined in Rule  13a-15(e)  under the  Securities
Exchange Act of 1934 (the  "Exchange  Act")) as of May 29, 2005,  the end of the
period covered by this report.  Based on that  evaluation,  the Chief  Executive
Officer and Chief Financial Officer  concluded that our disclosure  controls and
procedures were effective as of May 29, 2005.

     During the fiscal  quarter  ended May 29, 2005,  there was no change in our
internal  control over financial  reporting (as defined in Rule 13a-15(f)  under
the Exchange  Act) that has  materially  affected,  or is  reasonably  likely to
materially affect, our internal control over financial reporting.

     The annual  report of our  management  on internal  control over  financial
reporting,  and the attestation  report of KPMG LLP, our independent  registered
public accounting firm,  regarding our internal control over financial reporting
in our 2005 Annual Report to Shareholders, are incorporated herein by reference.

Item 9B.   OTHER INFORMATION.

Not applicable.


                                    PART III

Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The  information  contained in the sections  entitled  "Who Are This Year's
Nominees?",  "What Board  Committees Do You Have?" and "Section 16(a) Beneficial
Ownership  Reporting  Compliance" in our definitive Proxy Statement for our 2005
Annual Meeting of Shareholders is incorporated herein by reference.  Information
regarding  executive  officers  is  contained  in Part I above under the heading
"Executive Officers of the Registrant."

     All of our  employees  are  subject  to our Code of  Business  Conduct  and
Ethics. Appendix A to the Code provides a special Code of Ethics with additional
provisions that apply to our principal  executive officer,  principal  financial
officer,  principal  accounting  officer or controller,  and persons  performing
similar  functions  (the "Senior  Financial  Officers").  Appendix B to the Code
provides a Code of  Business  Conduct  and  Ethics  for  members of our Board of
Directors.  These documents are posted on our internet website at www.darden.com
and are available in print free of charge to any  shareholder who requests them.
We will  disclose  any  amendments  to or waivers of these Codes for  directors,
executive officers or senior financial officers on our website.

     We also have adopted a set of Corporate Governance  Guidelines and charters
for  all of  our  Board  Committees,  including  the  Audit,  Compensation,  and
Nominating and Governance  Committees.  The Corporate Governance  Guidelines and
committee  charters are available on our website at www.darden.com  and in print
free of charge to any  shareholder who requests them.  Written  requests for our
Code of  Business  Conduct  and  Ethics,  Corporate  Governance  Guidelines  and
committee  charters should be addressed to Darden  Restaurants,  Inc., 5900 Lake
Ellenor Drive, Orlando, FL 32809, Attention: Corporate Secretary.

                                       18
<PAGE>


Item 11.  EXECUTIVE COMPENSATION

     The  information  contained in the  sections  entitled  "How Are  Directors
Compensated?";  "Summary  Compensation  Table";  "Option  Grants In Last  Fiscal
Year";  "Stock Option  Exercises And  Holdings";  "Long-Term  Incentive  Plans -
Awards In Last Fiscal Year"; "Do Executive Officers  Currently  Participate In A
Defined Benefit Retirement Plan?"; "Do Executive Officers Currently  Participate
In Any Non-Qualified  Deferred  Compensation Plan?"; "Do Executive Officers Have
Any  Change-In-Control  Arrangements?";  "Do Any Of The Executive  Officers Have
Employment  Agreements?";  and  "Compensation  Committee  Interlocks And Insider
Participation"  in our definitive Proxy Statement for our 2005 Annual Meeting of
Shareholders,  is incorporated herein by reference. The information appearing in
the Proxy Statement under the heading  "Compensation  Committee  Report" (except
under the heading "Compensation Committee Interlocks And Insider Participation")
is not incorporated herein.

Item 12.  SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND  MANAGEMENT AND
          RELATED STOCKHOLDER MATTERS

     The information  contained in the sections entitled "Security  Ownership Of
Principal Shareholders" and "Security Ownership Of Management" in our definitive
Proxy  Statement for our 2005 Annual Meeting of  Shareholders,  is  incorporated
herein by reference.


Equity Compensation Plan Information

     The following table gives  information  about our common shares that may be
issued as of May 29, 2005 under our 2002 Stock  Incentive  Plan  ("2002  Plan"),
Stock Option and  Long-Term  Incentive  Plan of 1995 ("1995  Plan"),  Restaurant
Management  and  Employee  Stock  Plan of 2000  ("2000  Plan"),  Stock  Plan for
Directors ("Director Stock Plan"),  Compensation Plan for Non-Employee Directors
("Director Compensation Plan") and Employee Stock Purchase Plan.

<TABLE>
<CAPTION>

------------------------------- ---------------------------- ---------------------------- ----------------------------
                                (a)                          (b)                          (c)
------------------------------- ---------------------------- ---------------------------- ----------------------------
<S>                            <C>                          <C>                          <C>
Plan category                   Number of securities to be   Weighted-average exercise    Number of securities
                                issued upon exercise of      price of outstanding         remaining available for
                                outstanding options,         options, warrants and        future issuance under
                                warrants and rights (1)      rights                       equity compensation plans
                                                                                          (excluding securities
                                                                                          reflected in column (a))
------------------------------- ---------------------------- ---------------------------- ----------------------------
Equity compensation plans
approved by security holders
(2)                                              17,409,311                       $16.49                9,470,683 (3)
------------------------------- ---------------------------- ---------------------------- ----------------------------
Equity compensation plans not
approved by security holders
(4)                                               3,205,053                       $18.89                   90,134 (5)
------------------------------- ---------------------------- ---------------------------- ----------------------------
Total                                            20,614,364                       $16.86                9,560,817
------------------------------- ---------------------------- ---------------------------- ----------------------------
<FN>

(1)  Includes deferred  compensation  obligations that may be paid out in common
     stock.
(2)  Includes the 2002 Plan, 1995 Plan and Employee Stock Purchase Plan.
(3)  In  addition  to grants of  options,  warrants  or rights,  includes  up to
     7,627,934 shares of common stock or other stock-based awards,  including up
     to 1,018,510 shares of restricted  stock, that may be issued under the 2002
     Plan,  and up to 1,842,749  shares of common stock that may be issued under
     the Employee Stock  Purchase  Plan.  Does not include shares under the 1995
     Plan, because no new awards may be made under that plan.
(4)  Includes the 2000 Plan, Director Stock Plan and Director Compensation Plan.
(5)  In addition to grants of options, warrants or rights, includes up to 90,134
     shares of common stock that may be issued  under the Director  Compensation
     Plan.  Does not include  shares under the 2000 Plan or Director  Stock Plan
     because no new awards may be made under those plans.
</FN>
</TABLE>

                                       19
<PAGE>


The 2000 Plan

     The 2000 Plan provided for the issuance of up to 5,400,000 shares of common
stock out of our treasury as  non-qualified  stock options,  restricted stock or
restricted  stock  units.  No awards  could be made  under  the 2000 Plan  after
January 1, 2004,  but options and other awards granted prior to that time remain
outstanding  and will vest in  accordance  with their terms.  Only our employees
other than  executive  officers were  eligible to receive  awards under the 2000
Plan.  The  purpose  of the 2000 Plan was to  provide  incentives  and awards to
employees  who  may  be  responsible  for  the  management,   growth  and  sound
development of our restaurants, and to align the interests of employees with the
interests of our shareholders. The 2000 Plan is administered by the Compensation
Committee  of the  Board of  Directors.  The  exercise  price of a stock  option
granted  under the 2000 Plan could not be less than the fair market value of the
underlying  stock on the date of grant,  and no option could have a term of more
than ten years. The options currently  outstanding under the 2000 Plan generally
vest one to four  years  after the date of grant and  expire  ten years from the
date of grant. The 2000 Plan was approved by our Board of Directors.

The Director Stock Plan

     The Director  Stock Plan provides for the issuance of up to 375,000  shares
of common stock out of our treasury as non-qualified  stock options,  restricted
stock,  restricted stock units or stock awards.  Our non-employee  directors are
the only persons  eligible to receive  awards under the Director Stock Plan. The
purpose  of the  Director  Stock  Plan is to  provide  incentives  and awards to
non-employee  directors to align their interests with those of our shareholders.
The Director Stock Plan is  administered  by the  Compensation  Committee of the
Board of  Directors.  The  exercise  price of a stock option  granted  under the
Director Stock Plan may not be less than the fair market value of the underlying
stock on the  date of  grant,  and no  option  may have a term of more  than ten
years. The options that are currently  outstanding under the Director Stock Plan
generally  vest one to three  years after the date of grant and expire ten years
from the date of grant.  The  restrictions  on restricted  stock and  restricted
stock units  granted under the plan  generally  lapse one year after the date of
grant. The Director Stock Plan was approved by our Board of Directors. No awards
may be made under the Director Stock Plan after September 30, 2005.

The Director Compensation Plan

     The Director  Compensation  Plan provides for the issuance of up to 105,981
shares of common  stock out of our  treasury.  The plan allows us to award cash,
deferred cash and common stock. Our non-employee  directors are the only persons
eligible to receive awards under the plan. The purpose of the plan is to provide
incentives and awards to  non-employee  directors to align their  interests with
those  of our  shareholders.  The  plan  is  administered  by  the  Compensation
Committee of the Board of Directors and was approved by the Board. No awards may
be made under the Director Compensation Plan after September 30, 2005.

Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The  information  contained in the sections  entitled "Do You Provide Loans
For Executive Officers To Meet Their Share Ownership Guidelines?" and "Are There
Any Other Relationships Or Related  Transactions Between Us And Our Management?"
in our definitive  Proxy Statement for our 2005 Annual Meeting of  Shareholders,
is incorporated herein by reference.

Item 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

     The information contained in the section entitled  "Independent  Registered
Public  Accounting Firm Fees And Services" in our definitive Proxy Statement for
our 2005 Annual Meeting of Shareholders, is incorporated herein by reference.

                                       20
<PAGE>


                                     PART IV

Item 15.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)       1.  Financial Statements:

          Consolidated Statements of Earnings for the fiscal years ended May 29,
          2005, May 30, 2004 and May 25, 2003.

          Consolidated Balance Sheets at May 29, 2005 and May 30, 2004.

          Consolidated   Statements  of  Changes  in  Stockholders'  Equity  and
          Accumulated  Other  Comprehensive  Income  (Loss) for the fiscal years
          ended May 29, 2005, May 30, 2004 and May 25, 2003.

          Consolidated  Statements  of Cash Flows for the fiscal years ended May
          29, 2005, May 30, 2004 and May 25, 2003.

          Notes to Consolidated Financial Statements.

          2. Financial Statements Schedules:

          Not applicable.

          3. Exhibits:

     The exhibits listed in the accompanying  Exhibit Index are filed as part of
this  Form  10-K  and  incorporated  herein  by  reference.   Pursuant  to  Item
601(b)(4)(iii)  of Regulation  S-K, copies of certain  instruments  defining the
rights of holders of certain of our  long-term  debt are not filed,  and in lieu
thereof,  we agree to furnish  copies  thereof to the  Securities  and  Exchange
Commission  upon request.  The Exhibit  Index  specifically  identifies  with an
asterisk each management  contract or compensatory plan or arrangement  required
to be filed as an  exhibit  to this Form  10-K.  We will  furnish  copies of any
exhibit  listed  on the  Exhibit  Index  upon  request  upon  the  payment  of a
reasonable fee to cover our expenses in furnishing such exhibits.

                                       21
<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

       Dated:  July 29, 2005         DARDEN RESTAURANTS, INC.

                                     By:   /s/ Clarence Otis, Jr.
                                        ----------------------------------------
                                     Clarence Otis, Jr., Chief Executive Officer

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

     Signature                          Title                           Date

/s/ Joe R. Lee*                       Director,                    July 29, 2005
------------------------------------  Chairman of the Board
    Joe R. Lee

/s/ Clarence Otis, Jr.                Chief Executive Officer      July 29, 2005
------------------------------------  (Principal executive officer)
    Clarence Otis, Jr.                and Director

/s/ Linda J. Dimopoulos               Senior Vice President        July 29, 2005
------------------------------------  and Chief Financial Officer
    Linda J. Dimopoulos               (Principal financial and
                                      accounting officer)

/s/ Leonard L. Berry*                 Director
------------------------------------
    Leonard L. Berry

/s/ Odie C. Donald*                   Director
------------------------------------
    Odie C. Donald

/s/ David H. Hughes*                  Director
------------------------------------
    David H. Hughes

/s/ Charles A. Ledsinger, Jr. *       Director
------------------------------------
    Charles A. Ledsinger, Jr.

/s/ William M. Lewis, Jr. *           Director
------------------------------------
    William M. Lewis, Jr.

/s/ Andrew H. Madsen*                 Director
------------------------------------
    Andrew H. Madsen

/s/ Cornelius McGillicuddy, III*  **  Director
------------------------------------
    Cornelius McGillicuddy, III

/s/ Michael D. Rose*                  Director
------------------------------------
    Michael D. Rose

/s/ Maria A. Sastre*                  Director
------------------------------------
    Maria A. Sastre

/s/ Jack A. Smith*                    Director
------------------------------------
    Jack A. Smith

                                       22
<PAGE>


/s/ Blaine Sweatt, III*               Director
------------------------------------
    Blaine Sweatt, III

/s/ Rita P. Wilson*                   Director
------------------------------------
    Rita P. Wilson

*By: /s/ Paula J. Shives
   ----------------------------------------
         Paula J. Shives, Attorney-In-Fact
         July 29, 2005

**   Popularly  known as Senator  Connie  Mack,  III.  Senator  Mack signs legal
     documents,  including  this Form 10-K,  under his legal  name of  Cornelius
     McGillicuddy, III.

                                       23
<PAGE>



                                  EXHIBIT INDEX

        Exhibit
        Number                         Title
      ----------                      -------

          3(a)   Articles of Incorporation as amended May 26, 2005.

          3(b)   Bylaws as amended July 21, 2003 (incorporated  by  reference to
                 Exhibit 3(b) to our  Annual Report on Form 10-K for the  fiscal
                 year ended May 25, 2003).

          4(a)   Rights Agreement dated as of May 16, 2005 between us and
                 Wachovia Bank, National Association, as Rights Agent
                 (incorporated by reference to Exhibit 4.1 to our Current Report
                 on Form 8-K filed May 16, 2005).

          4(b)   Indenture dated as of January 1, 1996, between us and Wells
                 Fargo Bank, National Association (as  successor  to Wells Fargo
                 Bank Minnesota, National Association, formerly known as Norwest
                 Bank Minnesota, National Association) (incorporated by
                 reference to Exhibit 4.1 to our Current Report on Form 8-K
                 filed  February 9, 1996).

          *10(a) Darden  Restaurants,  Inc.  Stock  Option  and  Long-Term
                 Incentive Plan of 1995, as amended March 19, 2003 (incorporated
                 herein by reference to Exhibit 10(b) to our Quarterly Report on
                 Form 10-Q for the quarter ended February 23, 2003).

          *10(b) Darden Restaurants, Inc. FlexComp Plan as amended March 19,
                 2003 (incorporated  herein by reference to Exhibit 10(f) to our
                 Quarterly Report on Form 10-Q for the quarter ended February
                 23, 2003).

          *10(c) Darden  Restaurants, Inc. Stock Option  and Long-Term Incentive
                 Conversion Plan, as amended (incorporated  herein by reference
                 to Exhibit 10(c) to our Annual Report on Form 10-K for the
                 fiscal year ended May 26, 1996).

          *10(d) Supplemental Pension Plan of Darden Restaurants, Inc.

          *10(e) Executive Health Plan of Darden Restaurants, Inc. (incorporated
                 herein by  reference  to  Exhibit  10(e)  to  our  Registration
                 Statement on Form 10 effective May 5, 1995).

          *10(f) Darden  Restaurants, Inc.  Stock Plan for Directors, as amended
                 June 19, 2003 (incorporated by reference to Exhibit 10(f) to
                 our Annual Report on Form 10-K for the fiscal year ended May
                 25, 2003).

          *10(g) Darden Restaurants, Inc. Compensation Plan for Non-Employee
                 Directors, as amended  March 19, 2003  (incorporated  herein by
                 reference  to Exhibit 10(d) to our  Quarterly  Report on Form
                 10-Q for the quarter ended February 23, 2003).

          *10(h) Darden Restaurants, Inc. Management and  Professional Incentive
                 Plan, as  amended  June  19,  2003 (incorporated  by reference
                 to Exhibit  10(h) to our Annual Report on Form 10-K for the
                 fiscal year ended May 25, 2003).

          *10(i) Benefits Trust Agreement dated as of October 3, 1995,  between
                 us and Wells Fargo Bank,  National Association (as successor to
                 Wells Fargo Bank Minnesota, National Association, formerly
                 known as Norwest Bank Minnesota,  National  Association)
                 (incorporated herein by reference to Exhibit 10(i) to our
                 Annual Report on Form 10-K for the fiscal year ended May 25,
                 1997).

                                       24
<PAGE>


          *10(j) Form of Management Continuity Agreement, as amended, between us
                 and certain of our executive  officers (incorporated  herein by
                 reference to Exhibit 10(j) to our Annual Report on Form 10-K
                 for the fiscal year ended May 25, 1997).

          *10(k) Form of  documents  for our Fiscal  1998 Stock  Purchase/Option
                 Award Program,  including a Non-Negotiable  Promissory Note and
                 a Stock  Pledge  Agreement  (incorporated  herein by  reference
                 to Exhibit  10(k) to our  Annual  Report on Form 10-K for the
                 fiscal year ended May 27, 2001).

          *10(l) Darden  Restaurants,  Inc.  Restaurant  Management and Employee
                 Stock Plan of 2000, as amended  June 19, 2003 (incorporated  by
                 reference to Exhibit  10(l) to our Annual Report on Form 10-K
                 for the fiscal year ended May 25, 2003).

          *10(m) Darden Restaurants,  Inc. 2002 Stock Incentive Plan, as amended
                 March 19, 2003 (incorporated herein by reference to Exhibit
                 10(a) to our Quarterly  Report  on Form  10-Q  for the  quarter
                 ended February 23, 2003).

          10(n)  Credit Agreement dated as of October  17,  2003,  among  Darden
                 Restaurants,  Inc. and the  banks named  therein  (incorporated
                 herein by reference to Exhibit 10 to our Quarterly Report on
                 Form 10-Q for the quarter ended November 23, 2003).

          10(o)  First  Amendment  dated  as  of  February  4,  2004, to  Credit
                 Agreement dated as of October 17, 2003, among Darden
                 Restaurants, Inc. and  the  banks listed  therein (incorporated
                 herein by reference to Exhibit 10(a) to our Quarterly Report on
                 Form 10-Q for the quarter ended February 22, 2004).

          *10(p) Form of  Non-Qualified  Stock Option Award  Agreement under the
                 Darden Restaurants,  Inc. 2002 Stock Incentive Plan
                 (incorporated herein by  reference  to Exhibit  10(a) to our
                 Current  Report on Form 8-K filed June 21, 2005).

          *10(q) Form of  Restricted  Stock  Award  Agreement  under the  Darden
                 Restaurants, Inc. 2002 Stock Incentive Plan.

          *10(r) Form of Restricted Stock Units Award Agreement (U.S.) under the
                 Darden Restaurants, Inc. 2002 Stock Incentive Plan
                 (incorporated herein by  reference  to Exhibit  10(c) to our
                 Current  Report on Form 8-K filed June 21, 2005).

          *10(s) Form of Restricted  Stock Units Award Agreement  (Canada) under
                 the  Darden   Restaurants,  Inc.  2002  Stock  Incentive   Plan
                 (incorporated herein by reference to Exhibit 10(d) to our
                 Current Report on Form 8-K filed June 21, 2005).

          *10(t) Form of Darden  Stock Units Award  Agreement  (U.S.)  under the
                 Darden Restaurants, Inc. 2002 Stock Incentive Plan
                 (incorporated herein by  reference  to Exhibit  10(e) to our
                 Current  Report on Form 8-K filed June 21, 2005).

          *10(u) Form of Darden Stock Units Award  Agreement  (Canada) under the
                 Darden Restaurants,  Inc. 2002 Stock Incentive Plan
                 (incorporated herein by  reference  to Exhibit  10(f) to our
                 Current  Report on Form 8-K filed June 21, 2005).

          *10(v) Darden Restaurants,  Inc.  Performance Criteria for 2006 Annual
                 Cash Bonus under the Management and Professional Incentive Plan
                 (incorporated  herein by reference to Exhibit 10 to our
                 Quarterly Report on Form 10-Q for the quarter ended February
                 27, 2005).

                                       25
<PAGE>


          *10(w) Letter  Agreement  dated  October 7, 2004,  between Joe Lee and
                 Darden Restaurants,  Inc. (incorporated  herein by reference to
                 Exhibit  10(a) to our Quarterly  Report  on Form  10-Q  for the
                 quarter ended August 29, 2004).

          12     Computation of Ratio of Consolidated Earnings to Fixed Charges.

          13     Portions of 2005 Annual Report to Shareholders.

          21     Subsidiaries of Darden Restaurants, Inc.

          23     Consent of Independent Registered Public Accounting Firm.

          24     Powers of Attorney.

          31(a)  Certification of Chief Executive Officer pursuant to Section
                 302 of the Sarbanes-Oxley Act of 2002.

          31(b)  Certification of Chief Financial Officer pursuant to Section
                 302 of the Sarbanes-Oxley Act of 2002.

          32(a)  Certification of Chief Executive Officer pursuant to Section
                 906 of the Sarbanes-Oxley Act of 2002.

          32(b)  Certification of Chief Financial  Officer pursuant to Section
                 906 of the Sarbanes-Oxley Act of 2002.


------------
* Items marked with an asterisk are management  contracts or compensatory  plans
or arrangements  required to be filed as an exhibit  pursuant to Item 14 of Form
10-K and Item 601(b)(10)(iii)(A) of Regulation S-K.

                                       26
<PAGE>


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.(I)
<SEQUENCE>3
<FILENAME>form10k_exhibit3a.txt
<DESCRIPTION>FORM 10K EXHIBIT3A 7-29-05
<TEXT>


                                                                    EXHIBIT 3(a)

                            ARTICLES OF INCORPORATION

                                       OF

                            DARDEN RESTAURANTS, INC.

                                   * * * * * *


                                    ARTICLE I

     The name of this Corporation is Darden Restaurants, Inc.


                                   ARTICLE II

     The purpose of the  Corporation  is to engage in any lawful act or activity
for which  corporations may be organized under the Florida Business  Corporation
Act, as the same exists or may hereafter be amended ("Florida Law").


                                   ARTICLE III

     The total number of shares,  without par value,  that the Corporation shall
have authority to issue is five hundred  twenty-five million  (525,000,000),  of
which five  hundred  million  (500,000,000)  shares  shall be Common  Shares and
twenty-five million (25,000,000) shares shall be Preferred Shares.

(1)  Provisions Relating to Common Shares

     (a) Each  Common  Share  shall have one vote,  and,  except as  provided by
resolution or  resolutions  adopted by the Board of Directors  providing for the
issue of any series of  Preferred  Shares,  the  exclusive  voting power for all
purposes shall be vested in the holders of the Common Shares.

     (b) No holder of Common Shares as such shall have any  preemptive  right to
subscribe to or acquire (i) unissued or treasury  shares of the  Corporation  of
any class,  (ii)  securities of the Corporation  convertible  into or carrying a
right to  acquire  or  subscribe  to  shares  of any  class or (iii)  any  other
obligations,  warrants, rights to subscribe to shares or other securities of the
Corporation of any class, in each case whether now or hereafter authorized.

     (c) Subject to the provisions of law and to the provisions of any Preferred
Shares that may be outstanding  from time to time,  dividends may be paid on

<PAGE>

the Common  Shares at such times and in such  amounts as the Board of  Directors
may deem advisable.

     (d) In the  event of any  liquidation,  dissolution  or  winding  up of the
Corporation,  whether  voluntary or  involuntary,  the holders of Common  Shares
shall be entitled, after payment or provision for payment of the debts and other
liabilities  of the  Corporation  and the amounts to which  holders of Preferred
Shares shall be entitled, to the remaining net assets of the Corporation.

(2)  Provisions Relating to Preferred Shares

     (a) The  Preferred  Shares  may be issued  from time to time in one or more
series, each of such series to have such designations,  preferences, limitations
and special  rights as are stated and expressed  herein and in the resolution or
resolutions  providing  for the  issue of such  series  adopted  by the Board of
Directors as hereinafter provided.

     (b)  Authority  is hereby  expressly  granted  to the  Board of  Directors,
subject to the  provisions of this Article III, to divide the  Preferred  Shares
into one or more series and with respect to each series to fix and  determine by
resolution or resolutions providing for the issue of such series:

          (i) The number of shares to constitute such series and the distinctive
     designation thereof;

          (ii) The  dividend  rate or rates to which shares of such series shall
     be entitled  and the  restrictions,  limitations  and  conditions  upon the
     payment of such  dividends,  the date or dates from which  dividends  shall
     accumulate and the quarterly dates on which dividends,  if declared,  shall
     be payable;

          (iii)  Whether or not the shares of such series  shall be  redeemable,
     the  limitations and  restrictions  with respect to such  redemptions,  the
     manner of selecting  shares of such series for  redemption if less than all
     shares are to be  redeemed,  and the  amount,  if any,  in  addition to any
     accrued  dividends  thereon which the holder of shares of such series shall
     be entitled to receive upon the redemption  thereof,  which amount may vary
     at different  redemption  dates and may be different with respect to shares
     redeemed  through the operation of any  retirement or sinking fund and with
     respect to shares otherwise redeemed;

          (iv) The amount in addition to any accrued dividends thereon which the
     holders of shares of such  series  shall be  entitled  to receive  upon the
     voluntary  or  involuntary  liquidation,  dissolution  or winding up of the
     Corporation,  which amount may vary depending on whether such  liquidation,
     dissolution  or winding up is voluntary or  involuntary  and, if voluntary,
     may vary at different  dates (the amount so payable  upon such  involuntary
     liquidation,  dissolution  or winding up,

                                       2
<PAGE>

     exclusive of accrued  dividends,  being  hereinafter  sometimes  called the
     "involuntary liquidation value");

          (v) Whether or not the shares of such  series  shall be subject to the
     operation of a purchase,  retirement or sinking fund,  and, if so,  whether
     such   purchase,   retirement  or  sinking  fund  shall  be  cumulative  or
     non-cumulative,  the  extent to and the  manner in which such fund shall be
     applied to the  purchase  or  redemption  of the shares of such  series for
     retirement  or to other  corporate  purposes  and the terms and  provisions
     relative to the operation thereof;

          (vi)  Whether or not the shares of such  series  shall be  convertible
     into, or exchangeable for, shares of any other class or classes,  or of any
     other series of the same class and, if so convertible or exchangeable,  the
     price or  prices or the rate or rates of  conversion  or  exchange  and the
     method, if any, of adjusting the same;

          (vii) The voting powers, if any, of such series; and

          (viii) Any other preferences and relative, participating,  optional or
     other special  rights,  and  qualifications,  limitations  or  restrictions
     thereof as shall not be inconsistent with this Section (2).

     (c) All shares of any one series of  Preferred  Shares  shall be  identical
with each other in all respects,  except that shares of any one series issued at
different times may differ as to the dates from which dividends thereon shall be
cumulative;  and all  series of  Preferred  Shares  shall  rank  equally  and be
identical in all respects,  except as permitted by the  foregoing  provisions of
Section (2)(b) of this Article III.

     (d) No holder of Preferred  Shares as such shall have any preemptive  right
to subscribe to or acquire (i) unissued or treasury shares of the Corporation of
any class,  (ii)  securities of the Corporation  convertible  into or carrying a
right to  acquire  or  subscribe  to  shares  of any  class or (iii)  any  other
obligations,  warrants, rights to subscribe to shares or other securities of the
Corporation of any class, in each case whether now or hereafter authorized.

(3)  Provisions Relating to All Classes of Shares

     The  Preferred  Shares and Common  Shares may be issued by the  Corporation
from time to time for such  consideration as may be determined from time to time
by the Board of Directors subject to, and in accordance with the full discretion
conferred  upon the Board of Directors  by,  Florida Law. Any and all shares for
which the consideration so determined shall have been paid or delivered shall be
deemed  fully  paid  shares  and  shall not be liable  for any  further  call or
assessment  thereon;  and the holders of such shares shall not be liable for any
further payments in respect of such shares.

                                       3
<PAGE>



                                   ARTICLE IV

     (1) (a) In addition to any  affirmative  vote required by law or otherwise,
and except as expressly provided in this Article IV, the affirmative vote of not
less than 66 2/3% of the Voting  Securities,  excluding  the  Voting  Securities
beneficially owned by a Related Person who is party to the Business Combination,
shall be required for the approval or authorization of any Business Combination.
Such  affirmative vote shall be required  notwithstanding  the fact that no vote
may be required, or that a lesser percentage may be specified,  by law, in these
Articles of  Incorporation  or in any  agreement  with any  national  securities
exchange or otherwise.

         (b) The provisions of subsection (1)(a) of this Article IV shall not
apply to any Business Combination involving only (x) the acquisition or issuance
by the Corporation  or a Subsidiary  of  securities  of  the  Corporation  in  a
transaction  in which all  holders  of  securities  of the same  class or series
(other than a Related Person) are entitled to participate on identical terms and
the  Related  Person is entitled  to  participate,  if at all, on terms not more
favorable  than the terms upon which the other holders of securities of the same
class or series are entitled to participate; provided that any such acquisitions
or  issuance is not made  pursuant to an  agreement  or  understanding  with the
Related  Person;  or (y) the  acquisition  of goods or  services  by or from the
Corporation  or a Subsidiary on terms no less  favorable to the  Corporation  or
such  Subsidiary,  as the case may be,  than the  terms on which  such  goods or
services may be acquired in the ordinary  course of business by or from a Person
unaffiliated with the Corporation.

         (c) The provisions of subsection (1)(a) of this Article IV shall not
apply to any Business  Combination, and such Business  Combination shall require
only such affirmative vote, if any, as is required  by law or otherwise, if such
Business  Combination  shall  have been  approved  by a majority  (whether  such
approval is made prior or subsequent to the acquisition of beneficial  ownership
of the Voting  Securities  that  caused the  Related  Person to become a Related
Person) of the Disinterested Directors.

         (d) The provisions of subsection  (1)(a) of this Article IV shall not
apply to any Business  Combination, and such Business  Combination shall require
only such affirmative vote, if any, as is required by law or otherwise, if all
of the following conditions are met:

          (i) The Business  Combination  shall provide for  consideration  to be
     received by all holders of Common  Shares in exchange  for all their Common
     Shares,  and the  aggregate  amount of cash and the Fair Market Value as of
     the date of consummation of the Business Combination of consideration other
     than cash,  to be  received  per share by holders of Common  Shares in such
     Business  Combination  shall be at least equal to the higher of the amounts
     determined  under  clauses  (A)  and  (B)  below  (subject  to  appropriate
     adjustment for any

                                       4
<PAGE>

     recapitalization,  stock  dividend,  stock split,  combination of shares or
     similar event):

               (A) if  applicable,  the highest per share price  (including  any
          brokerage  commissions,  transfer taxes and soliciting  dealers' fees)
          paid by or on behalf  of the  Related  Person  for any  Common  Shares
          within the two-year period immediately prior to the Announcement Date;
          and

               (B) the Fair Market  Value per share of the Common  Shares on the
          Announcement Date or on the Determination Date, whichever is higher;

          (ii) If the  Business  Combination  provides for  consideration  to be
     received by holders of any class or series of Voting  Securities other than
     Common Shares,  whether or not the Related  Person has previously  acquired
     any shares of such class or series,  the  aggregate  amount of cash and the
     Fair  Market  Value  as  of  the  date  of  consummation  of  the  Business
     Combination  of  consideration  other than cash to be received per share by
     holders  of shares of such class or series  shall be at least  equal to the
     higher of the amount determined under clauses (A) and (B) below (subject to
     appropriate  adjustment  for  any  recapitalization,   stock  split,  stock
     dividend, combination of shares or similar event):

               (A) if  applicable,  the highest per share price  (including  any
          brokerage  commissions,  transfer taxes and soliciting  dealers' fees)
          paid by or on behalf of the Related Person for any share of such class
          or series in connection  with the acquisition by the Related Person of
          beneficial  ownership  of shares of such  class or series  within  the
          two-year period immediately prior to the Announcement Date; and

               (B) the Fair  Market  Value per share of such  class or series on
          the  Announcement  Date or on the  Determination  Date,  whichever  is
          higher;

                  (iii) The consideration to be received by holders of a
         particular class or series of outstanding Voting Securities (including
         Common Shares) shall be in cash or in the same form as previously has
         been paid by or on behalf of the Related Person in connection with its
         direct or indirect acquisition of beneficial ownership of shares of
         such class or series of Voting Securities. If the consideration so paid
         for shares of any class or series of Voting Securities varied as to
         form, the form of consideration for such class or series of Voting
         Securities shall be either cash or the form used to acquire beneficial
         ownership of the largest number of shares of such class or series of
         stock previously acquired by the Related Person; and

                                       5
<PAGE>

               (iv) After such Related Person has become a Related Person,  such
          Related  Person  shall not have  received  the  benefit,  directly  or
          indirectly   (except   proportionately   as  a   shareholder   of  the
          Corporation),  of any loans,  advances,  guarantees,  pledges or other
          financial  assistance  or any tax  credits  or  other  tax  advantages
          provided  by  the  Corporation,  whether  in  anticipation  of  or  in
          connection with such Business Combination or otherwise.

         (2)    If any  vote of  holders  of  Voting  Securities is required for
the adoption or approval  of any  Business  Combination, a proxy  or information
statement   describing   the  Business   Combination   and  complying  with  the
requirements  of the  1934 Act  shall  be  mailed  at a date  determined  by the
Disinterested  Directors to all  shareholders of the Corporation  whether or not
such statement is required  under the 1934 Act. The statement  shall contain any
recommendations  as to the  advisability of the Business  Combination  which the
Disinterested  Directors,  or any of them,  may choose to state  and,  if deemed
advisable by the Disinterested  Directors,  an opinion of an investment  banking
firm as to the  fairness of the terms of such  Business  Combination.  Such firm
shall be selected by the Disinterested Directors and paid a fee for its services
by the Corporation as approved by the Disinterested Directors.

          (3) For purposes of this Article IV:

             (a) "Affiliate"  and "beneficial  owner" are used herein as defined
in Rule 12b-2 and Rule 13d-3, respectively, under the Securities Exchange Act of
1934 as in effect on the date of adoption of this Article IV by the shareholders
of the Corporation  (the "1934 Act"). The term "Affiliate" as used herein shall
exclude the Corporation, but shall include the definition of "Associate" as
contained in Rule 12b-2.

            (b) "Announcement Date", with respect to any Business  Combination,
is the first public announcement of the proposed Business Combination.

            (c) A  "Business  Combination" is (i) a merger  or consolidation  of
the Corporation or any of its subsidiaries with a Related Person; (ii) the sale,
lease, exchange, pledge, transfer or other disposition (A) by the Corporation or
any of its subsidiaries of all or a Substantial Part of the Corporation's Assets
to a Related Person, or (B) by a Related Person of any of its assets,  except in
the ordinary course of business,  to the Corporation or any of its subsidiaries;
(iii) the issuance of shares or other  securities of the  Corporation  or any of
its  subsidiaries  to a Related  Person,  other  than on a pro rata basis to all
holders  of Voting  Securities  of the same  class  held by the  Related  Person
pursuant to a share split, share dividend or distribution of warrants or rights;
(iv) the adoption of any plan or proposal for the  liquidation or dissolution of
the  Corporation  proposed  by  or  on  behalf  of a  Related  Person;  (v)  any
reclassification  of securities,  recapitalization,  merger or  consolidation or
other  transaction which has the effect,  directly or indirectly,  of increasing
the proportionate share of any Voting Securities beneficially owned by a Related
Person; or (vi) any agreement,  contract or other arrangement  providing for any
of the foregoing transactions.

                                       6
<PAGE>

            (d)  "Determination Date", with respect to any Related Person, is
the date on which the Related Person became a Related Person.

            (e) A "Disinterested Director" is a member of the Board of Directors
of the Corporation (other than the Related Person) who was a director prior to
the time the Related Person became a Related Person,  or any director who was
recommended for  election  by the  Disinterested  Directors.  Any  action to be
taken by theDisinterested  Directors shall require the affirmative vote of a
majority of the Disinterested Directors.

           (f) "Fair Market Value" is (a) in the case of shares,  the highest
closing sale price per share during the 30-day period immediately  preceding the
date in question of such  shares on the  principal  United  States  securities
exchange registered  under the Exchange Act on which such shares are listed; or,
if such shares are not listed on any such  exchange,  the highest  closing bid
quotation per share with respect to such shares  during the 30-day  period
preceding  the date in  question  on the  National  Association  of  Securities
Dealers,  Inc. Automated  Quotation  System or any  similar  system then in use;
or if no such quotations  are  available,  the  fair  market  value  per  share
on the date in question of such  shares  as  determined by at  least  two-thirds
of  the Disinterested  Directors  in good faith; and (b) in the case of property
other than shares, the fair market value of such property on the date in
question as determined in good faith by at least two-thirds of the Disinterested
Directors.

           (g) A "Person" is a natural person or a legal entity of any kind,
together with any  Affiliate of such person or entity,  or any person or entity
with whom such person, entity or an Affiliate has any agreement or understanding
relating to acquiring, voting or holding Voting Securities.

           (h) A "Related  Person" is (i) any  Person which, together  with  its
Affiliates, is the beneficial owner of an aggregate of 10% or more of the Common
Shares or of the total voting power of all outstanding Voting  Securities,  (ii)
any officer,  director or employee of a Related Person,  (iii) any Person which,
together  with its  Affiliates,  shall  become,  in a  transaction  or series of
transactions  not  involving  a  public  offering  within  the  meaning  of  the
Securities  Act of 1933, the  beneficial  owner of Voting  Securities of which a
Related Person was the  beneficial  owner at any time during the two years prior
to the time such Person or Affiliate  became such beneficial  owner and (iv) any
Affiliate of any such Person, provided, that the term "Related Person" shall not
include the Corporation; any savings, employee stock ownership or other employee
benefit plan of the  Corporation or any trustee or fiduciary when acting in such
capacity with respect to any such employee benefit plan of the  Corporation;  or
any subsidiary all the capital stock of or equity  interest in which is owned by
the Corporation,  by one or more such subsidiaries or by the Corporation and one
or more such subsidiaries.

           (i) A "Substantial Part of the Corporation's Assets" shall mean
assets of the Corporation or any of its  subsidiaries in an amount equal to 20%
or more of the fair market  value, as determined by the Disinterested Directors,
of the total  consolidated

                                       7
<PAGE>

assets of the Corporation and its subsidiaries taken as a whole as of the end of
its most recent fiscal year ended prior to the time the determination is made.

            (j) "Voting Securities" means all outstanding  Common Shares and all
other outstanding securities of the Corporation, if any, which are then entitled
to vote generally in the election of directors or which have been designated  as
Voting Securities by a majority of the Disinterested Directors.


                                    ARTICLE V

     The street address of the  Corporation's  initial  principal office is 5900
Lake Ellenor  Drive,  Orlando,  Florida  32809.  The  registered  agent for said
Corporation is CT Corporation System,  1200 South Pine Island Road,  Plantation,
FL 33324.


                                   ARTICLE VI

               The name and address of the sole incorporator are:

       Name                                             Mailing Address
     ---------                                         ------------------
     Joe R. Lee                                    5900 Lake Ellenor Drive
                                                   Orlando, Florida  32809

The power of the sole incorporator as such shall terminate upon the filing of
the Articles of Incorporation.


                                   ARTICLE VII

     The names and mailing  addresses of the persons who are to serve as initial
directors  until  the  first  annual  meeting  of  shareholders  or until  their
successors are elected and qualified are:

         Name                                          Mailing Address
        -------                                     --------------------
       Joe R. Lee                                  5900 Lake Ellenor Drive
                                                   Orlando, Florida  32809

       Ronald N. Magruder                          5900 Lake Ellenor Drive
                                                   Orlando, Florida  32809

       Jeffrey J. O'Hara                           5900 Lake Ellenor Drive
                                                   Orlando, Florida  32809

                                       8
<PAGE>


       Blaine Sweatt                               5900 Lake Ellenor Drive
                                                   Orlando, Florida  32809

                                  ARTICLE VIII

     The following provisions are inserted for the regulation and conduct of the
affairs  of the  Corporation,  but it is  expressly  provided  that the same are
intended to be and shall be construed to be in furtherance and not in limitation
or exclusion of the powers conferred by law:

            (1)  Subject  always to such  bylaws as may be adopted  from time to
time by the  shareholders,  the Board of Directors is  expressly  authorized  to
adopt,  alter,  amend and repeal the  bylaws of the  Corporation,  but any bylaw
adopted by the Board of  Directors  may be  altered,  amended or repealed by the
shareholders.  The bylaws or any  particular  bylaw may fix a greater  quorum or
voting  requirement for shareholders (or voting groups of shareholders)  than is
required by the Florida Law.

            (2) All corporate powers of  the Corporation  shall be managed by or
under the  authority of, and its business and affairs shall be managed under the
direction of, its Board of Directors.  Directors need not be  shareholders.  The
bylaws may prescribe the number of directors,  not less than three;  may provide
for the increase or reduction thereof but not less than three; and may prescribe
the number  necessary to  constitute  a quorum,  which number may be less than a
majority of the whole Board of Directors,  but not less than the number required
by law. Whenever a vacancy occurs on the Board of Directors, including a vacancy
resulting from an increase in the number of directors,  it may be filled only by
the affirmative vote of a majority of the remaining directors,  though less than
a quorum of the board of directors.

            (3) The  Corporation  hereby  elects not to be governed by Section
607.0901 (relating to affiliated  transactions) or by Section 607.0902 (relating
to control share  acquisitions)  of the Florida Law, and the  provisions of such
statutes shall not apply to the Corporation.


                                   ARTICLE IX

            (1) A director of the Corporation  shall not be personally  liable
for monetary  damages to the  Corporation,  its shareholders or any other person
for any  statement,  vote,  decision  or  failure  to act,  regarding  corporate
management or policy, to the fullest extent permitted by Florida Law.

            (2) (a) Each person (and the heirs,  executors or  administrators of
such person) who was or is a party or is threatened to be made a party to, or is
involved in, any threatened,  pending or completed  action,  suit or proceeding,
whether civil,  criminal,  administrative  or  investigative,  whether formal or
informal and whether or not such action,  suit or proceeding is brought by or in
the right of the Corporation, by reason

                                       9
<PAGE>

of the fact that such person is or was a director, officer, employee or agent of
the  Corporation  or is or was  serving at the request of the  Corporation  as a
director, officer, employee or agent of another corporation,  partnership, joint
venture,  trust or other  enterprise,  shall be indemnified and held harmless by
the  Corporation  to the fullest  extent  permitted by Florida Law. The right to
indemnification  conferred in this Article IX shall also include the right to be
paid by the  Corporation  the  expenses  incurred  in  connection  with any such
proceeding in advance of its final  disposition to the fullest extent  permitted
by Florida Law. The right to indemnification  conferred in this Article IX shall
be a contract right.

                (b)  The  Corporation may, by action of its Board of  Directors,
provide indemnification to such of the directors, officers, employees and agents
of the  Corporation  to such extent and to such effect as the Board of Directors
shall determine to be appropriate and permitted by Florida Law.

            (3)  The  Corporation  shall have  power to  purchase  and  maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the Corporation
as a director,  officer, employee or agent of another corporation,  partnership,
joint venture,  trust or other enterprise against any liability asserted against
such person and  incurred by such person in any such  capacity or arising out of
such  person's  status as such,  whether or not the  Corporation  would have the
power to indemnify him against such liability under Florida Law.

            (4) The rights and authority  conferred in this Article IX shall not
be exclusive of any other right which any person may otherwise have or hereafter
acquire.

            (5)  Neither the  amendment  nor repeal of this  Article IX, nor the
adoption of any provision of the Articles of  Incorporation or the bylaws of the
Corporation,   nor,  to  the  fullest  extent  permitted  by  Florida  Law,  any
modification  of law, shall eliminate or reduce the effect of this Article IX in
respect of any acts or  omissions  occurring  prior to such  amendment,  repeal,
adoption or modification.


                                    ARTICLE X

     No  director  of  the  Corporation  may  be  removed  from  office  by  the
shareholders except (i) for cause and (ii) by the affirmative vote, at a special
meeting of shareholders  held for that purpose,  of not less than 66 2/3% of the
shareholders  entitled to vote for the election of directors  (or, if a director
is  elected  by a voting  group  of  shareholders,  66 2/3% of the  shareholders
entitled to vote for the election of such director).  Upon any such removal, the
term of the director who shall have been so removed  shall  forthwith  terminate
and there  shall be a vacancy  in the  Board of  Directors  to be filled in such
manner as shall be provided herein and by the bylaws of the Corporation.

                                       10
<PAGE>

                                   ARTICLE XI

     A special meeting of  shareholders of the Corporation  shall be held (a) on
call of its Board of Directors or the person or persons  authorized  to do so by
the bylaws, or (b) if the holders of not less than 50% of all the votes entitled
to be cast on any  issue  proposed  to be  considered  at the  proposed  special
meeting  sign,  date and  deliver  to the  Corporation's  Secretary  one or more
written demands for the meeting  describing the purpose or purposes for which it
is to be held.  Nothwithstanding the foregoing,  whenever holders of one or more
series of Preferred Shares shall have the right, voting separately as a class or
series, to elect directors,  such holders may call, pursuant to the terms of the
resolution or resolutions  adopted by the Board of Directors pursuant to Article
III, special meetings of holders of such Preferred Shares.


                                   ARTICLE XII

     Subject to the provisions of Articles III and XIII hereof,  the Corporation
reserves the right to amend,  alter, change or repeal any provision contained in
the  Articles of  Incorporation  in the manner now or  hereafter  prescribed  by
statute, and, with the sole exception of those rights and powers conferred under
Article IX hereof, all rights and powers conferred herein upon the shareholders,
directors and officers, if any are granted subject to this reservation.


                                  ARTICLE XIII

     (1) Any action  required or  permitted to be taken by  shareholders  of the
Corporation  may be taken  only  upon the vote of  shareholders  at an annual or
special  meeting of  shareholders  duly  noticed and called in  accordance  with
Florida  Law,  and no such  action  may be taken  without a meeting  by  written
consent of shareholders.

     (2) No  amendment  to the Articles of  Incorporation  shall  amend,  alter,
change or repeal any of the provisions of Article IV, X, XI or this Article XIII
hereof unless such amendment shall receive the affirmative vote of not less than
66 2/3% of the Voting Securities, excluding the Voting Securities of any Related
Person, as defined in Article IV.


     IN WITNESS WHEREOF,  I have hereunto signed by name this 29th day of March,
1995.


                                                 /s/ Joe R. Lee
                                                -----------------------
                                                     Joe R. Lee

                                       11
<PAGE>


                              ARTICLES OF AMENDMENT

                                       TO

                            ARTICLES OF INCORPORATION

                                       OF

                            DARDEN RESTAURANTS, INC.

     The undersigned does hereby certify, on behalf of Darden Restaurants,  Inc.
(the   "Corporation"),   that  pursuant  to  the  authority   contained  in  the
Corporation's  Articles of Incorporation (the "Articles of Incorporation"),  and
in accordance with the provisions of Section 607.0602(4) of the Florida Business
Corporation  Act (the "Act") and  pursuant to a special  meeting of the Board of
Directors of the Corporation in accordance with Section 607.0820 of the Act, the
Board of Directors of the Corporation  duly adopted and approved on May 16, 2005
resolutions  providing  for the  creation of a series of  preferred  stock to be
designated as "Series A Participating  Cumulative Preferred Stock," and pursuant
to Section 607.0602(4) of the Act and Section (2) of Article III of the Articles
of Incorporation, there being no shareholder action required, Article III of the
Articles of  Incorporation is hereby amended by adding the following new Section
(4) to create such  preferred  shares having the  preferences,  limitations  and
relative rights as follows:

             "(4) SERIES A PARTICIPATING CUMULATIVE PREFERRED STOCK


     Section 1.  Designation  and  Amount.  The shares of such  series  shall be
designated as "Series A Participating Cumulative Preferred Stock" (the "Series A
Preferred  Stock") and the number of shares  constituting the Series A Preferred
Stock shall be 2,000,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors;  provided,  that no decrease  shall reduce
the  number  of shares of  Series A  Preferred  Stock to a number  less than the
number of shares  then  outstanding  plus the  number  of  shares  reserved  for
issuance upon the exercise of  outstanding  options,  rights or warrants or upon
the  conversion  of  any  outstanding   securities  issued  by  the  Corporation
convertible into Series A Preferred Stock.

     Section 2. Dividends and Distributions.

          (A)  Subject to the rights of the  holders of any shares of any series
     of Preferred Stock (or any similar stock) ranking prior and superior to the
     Series A Preferred  Stock with respect to dividends,  the holders of shares
     of Series A Preferred  Stock, in preference to the holders of Common Stock,
     without par value (the  "Common  Stock"),  of the  Corporation,  and of any
     other junior stock, shall be entitled to receive,  when, as and if declared
     by the Board of Directors out of funds  legally  available for the purpose,
     quarterly  dividends  payable  in cash on the first day of  February,  May,
     August and  November in each year (each such date being  referred to herein
     as a "Quarterly Dividend Payment Date"),  commencing on the first Quarterly
     Dividend  Payment Date after the first issuance of a share or fraction of a
     share of Series A Preferred  Stock,  in an amount

                                       12
<PAGE>

     per share  (rounded to the nearest  cent) equal to the greater of (a) $1.00
     or (b) subject to the provision for adjustment hereinafter set forth, 1,000
     times the aggregate per share amount of all cash dividends, and 1,000 times
     the aggregate per share amount (payable in kind) of all non-cash  dividends
     or other  distributions,  other than a dividend payable in shares of Common
     Stock or a  subdivision  of the  outstanding  shares  of  Common  Stock (by
     reclassification  or  otherwise),  declared  on the Common  Stock since the
     immediately  preceding  Quarterly Dividend Payment Date or, with respect to
     the first Quarterly  Dividend Payment Date, since the first issuance of any
     share or fraction of a share of Series A Preferred  Stock. In the event the
     Corporation  shall at any time  declare or pay any  dividend  on the Common
     Stock  payable  in shares  of Common  Stock,  or  effect a  subdivision  or
     combination or consolidation of the outstanding  shares of Common Stock (by
     reclassification  or  otherwise  than by payment of a dividend in shares of
     Common  Stock) into a greater or lesser  number of shares of Common  Stock,
     then in each such case the  amount to which  holders  of shares of Series A
     Preferred Stock were entitled  immediately prior to such event under clause
     (b) of the preceding  sentence shall be adjusted by multiplying such amount
     by a  fraction,  the  numerator  of which is the number of shares of Common
     Stock outstanding immediately after such event and the denominator of which
     is the number of shares of Common Stock that were  outstanding  immediately
     prior to such event.

          (B) The  Corporation  shall declare a dividend or  distribution on the
     Series A  Preferred  Stock as  provided in  paragraph  (A) of this  Section
     immediately  after it  declares a dividend  or  distribution  on the Common
     Stock (other than a dividend  payable in shares of Common Stock);  provided
     that, in the event no dividend or distribution  shall have been declared on
     the Common Stock during the period between any Quarterly  Dividend  Payment
     Date and the next subsequent Quarterly Dividend Payment Date, a dividend of
     $1.00 per share on the  Series A  Preferred  Stock  shall  nevertheless  be
     payable on such subsequent Quarterly Dividend Payment Date.

          (C) Dividends  shall begin to accrue and be cumulative on  outstanding
     shares of Series A Preferred Stock from the Quarterly Dividend Payment Date
     next  preceding the date of issue of such shares,  unless the date of issue
     of such shares is prior to the record date for the first Quarterly Dividend
     Payment Date, in which case  dividends on such shares shall begin to accrue
     from the date of issue of such  shares,  or  unless  the date of issue is a
     Quarterly  Dividend Payment Date or is a date after the record date for the
     determination  of holders of shares of Series A Preferred Stock entitled to
     receive a quarterly  dividend and before such  Quarterly  Dividend  Payment
     Date, in either of which events such dividends shall begin to accrue and be
     cumulative from such Quarterly  Dividend  Payment Date.  Accrued but unpaid
     dividends shall not bear interest. Dividends paid on the shares of Series A
     Preferred  Stock in an amount less than the total amount of such  dividends
     at the time accrued and payable on such shares shall be allocated  pro rata
     on a  share-by-share  basis among all such shares at the time  outstanding.
     The  Board of  Directors  may fix a record  date for the  determination  of
     holders of shares of Series A Preferred  Stock entitled to receive  payment
     of a dividend or distribution declared thereon,  which record date shall be
     not more than 60 days prior to the date fixed for the payment thereof.

                                       13
<PAGE>

     Section 3. Voting Rights.  In addition to any other voting rights  required
by law,  the  holders  of shares  of Series A  Preferred  Stock  shall  have the
following voting rights:

          (A) Subject to the provision  for  adjustment  hereinafter  set forth,
     each share of Series A Preferred  Stock shall entitle the holder thereof to
     1,000 votes on all matters  submitted to a vote of the  shareholders of the
     Corporation.  In the event the Corporation shall at any time declare or pay
     any  dividend on the Common  Stock  payable in shares of Common  Stock,  or
     effect a subdivision  or combination or  consolidation  of the  outstanding
     shares of Common Stock (by reclassification or otherwise than by payment of
     a dividend in shares of Common  Stock)  into a greater or lesser  number of
     shares of  Common  Stock,  then in each  such case the  number of votes per
     share to which holders of shares of Series A Preferred  Stock were entitled
     immediately  prior to such event  shall be  adjusted  by  multiplying  such
     number by a  fraction,  the  numerator  of which is the number of shares of
     Common Stock  outstanding  immediately after such event and the denominator
     of which is the  number of shares of  Common  Stock  that were  outstanding
     immediately prior to such event.

          (B) Except as  otherwise  provided  herein,  in any other  Articles of
     Amendment  creating a series of Preferred Stock or any similar stock, or by
     law,  the holders of shares of Series A Preferred  Stock and the holders of
     shares of  Common  Stock and any  other  capital  stock of the  Corporation
     having  general  voting  rights  shall  vote  together  as one class on all
     matters submitted to a vote of shareholders of the Corporation.

          (C)  Except as set forth  herein,  or as  otherwise  provided  by law,
     holders of Series A Preferred Stock shall have no special voting rights and
     their consent shall not be required (except to the extent they are entitled
     to vote with  holders of Common  Stock as set forth  herein) for taking any
     corporate action.

          Section 4. Certain Restrictions.

          (A) Whenever  quarterly  dividends or other dividends or distributions
     payable on the Series A  Preferred  Stock as  provided  in Section 2 are in
     arrears,  thereafter  and  until  all  accrued  and  unpaid  dividends  and
     distributions,  whether or not  declared,  on shares of Series A  Preferred
     Stock outstanding shall have been paid in full, the Corporation shall not:

               (i) declare or pay dividends, or make any other distributions, on
          any shares of stock  ranking  junior  (either as to  dividends or upon
          liquidation,  dissolution  or winding  up) to the  Series A  Preferred
          Stock;

               (ii) declare or pay dividends,  or make any other  distributions,
          on any shares of stock ranking on a parity  (either as to dividends or
          upon  liquidation,  dissolution  or  winding  up)  with  the  Series A
          Preferred  Stock,  except  dividends  paid  ratably  on the  Series  A
          Preferred  Stock  and all such  parity  stock on which  dividends  are
          payable or in arrears in  proportion to the total amounts to which the
          holders of all such shares are then entitled;

                                       14
<PAGE>


               (iii) redeem or purchase or otherwise  acquire for  consideration
          shares of any stock  ranking  junior  (either as to  dividends or upon
          liquidation,  dissolution  or winding  up) to the  Series A  Preferred
          Stock, provided that the Corporation may at any time redeem,  purchase
          or otherwise  acquire  shares of any such junior stock in exchange for
          shares of any stock of the  Corporation  ranking  junior (either as to
          dividends  or upon  dissolution,  liquidation  or  winding  up) to the
          Series A Preferred Stock; or

               (iv) redeem or purchase or  otherwise  acquire for  consideration
          any shares of Series A Preferred Stock, or any shares of stock ranking
          on a parity with the Series A Preferred  Stock,  except in  accordance
          with a purchase offer made in writing or by publication (as determined
          by the Board of  Directors)  to all  holders of such  shares upon such
          terms as the Board of Directors, after consideration of the respective
          annual dividend rates and other relative rights and preferences of the
          respective  series and  classes,  shall  determine  in good faith will
          result in fair and equitable  treatment among the respective series or
          classes.

          (B) The Corporation shall not permit any subsidiary of the Corporation
     to purchase or otherwise  acquire for  consideration any shares of stock of
     the Corporation  unless the Corporation  could, under paragraph (A) of this
     Section 4,  purchase or  otherwise  acquire such shares at such time and in
     such manner.

     Section  5.  Reacquired  Shares.  Any  shares of Series A  Preferred  Stock
purchased  or otherwise  acquired by the  Corporation  in any manner  whatsoever
shall be retired and cancelled promptly after the acquisition  thereof. All such
shares shall upon their  cancellation  become  authorized but unissued shares of
Preferred  Stock and may be reissued as part of a new series of Preferred  Stock
subject to the conditions and restrictions on issuance set forth herein,  in the
Articles of  Incorporation,  or in any other  Articles of  Amendment  creating a
series of Preferred Stock or any similar stock or as otherwise required by law.

     Section 6.  Liquidation,  Dissolution or Winding Up. Upon any  liquidation,
dissolution or winding up of the Corporation,  no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation,  dissolution or winding up) to the Series A Preferred Stock unless,
prior  thereto,  the  holders of shares of Series A  Preferred  Stock shall have
received  $1,000.00  per  share,  plus an amount  equal to  accrued  and  unpaid
dividends and  distributions  thereon,  whether or not declared,  to the date of
such payment,  provided  that the holders of shares of Series A Preferred  Stock
shall be  entitled  to receive  an  aggregate  amount per share,  subject to the
provision  for  adjustment  hereinafter  set  forth,  equal to 1,000  times  the
aggregate  amount to be  distributed  per share to  holders  of shares of Common
Stock,  or (2) to the holders of shares of stock ranking on a parity  (either as
to dividends or upon  liquidation,  dissolution or winding up) with the Series A
Preferred  Stock,  except  distributions  made ratably on the Series A Preferred
Stock and all such parity stock in  proportion to the total amounts to which the
holders of all such shares are entitled upon such  liquidation,  dissolution  or
winding up. In the event the  Corporation  shall at any time  declare or pay any
dividend  on the Common  Stock  payable in shares of Common  Stock,  or effect a
subdivision or combination or consolidation of the outstanding  shares of Common
Stock (by  reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares


                                       15

<PAGE>

of Common Stock, then in each such case the aggregate amount to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such event
under the proviso in clause (1) of the preceding  sentence  shall be adjusted by
multiplying  such amount by a fraction  the  numerator of which is the number of
shares  of  Common  Stock  outstanding  immediately  after  such  event  and the
denominator  of  which is the  number  of  shares  of  Common  Stock  that  were
outstanding immediately prior to such event.

     Section 7. Consolidation,  Merger, etc. In case the Corporation shall enter
into any  consolidation,  merger,  combination or other transaction in which the
shares  of  Common  Stock are  exchanged  for or  changed  into  other  stock or
securities,  cash and/or any other property, then in any such case each share of
Series A  Preferred  Stock  shall at the same  time be  similarly  exchanged  or
changed  into an amount  per  share,  subject to the  provision  for  adjustment
hereinafter  set  forth,  equal to 1,000  times the  aggregate  amount of stock,
securities,  cash and/or any other property  (payable in kind),  as the case may
be, into which or for which each share of Common Stock is changed or  exchanged.
In the event the  Corporation  shall at any time  declare or pay any dividend on
the Common Stock payable in shares of Common Stock,  or effect a subdivision  or
combination  or  consolidation  of the  outstanding  shares of Common  Stock (by
reclassification  or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common  Stock,  then in each
such case the amount set forth in the  preceding  sentence  with  respect to the
exchange  or change of shares of Series A  Preferred  Stock shall be adjusted by
multiplying  such amount by a fraction,  the numerator of which is the number of
shares  of  Common  Stock  outstanding  immediately  after  such  event  and the
denominator  of  which is the  number  of  shares  of  Common  Stock  that  were
outstanding immediately prior to such event.

     Section 8. No Redemption.  The shares of Series A Preferred Stock shall not
be redeemable.


     Section 9. Rank. The Series A Preferred  Stock shall rank,  with respect to
the payment of dividends  and the  distribution  of assets,  junior to all other
series of any other class of the Corporation's Preferred Stock.

     Section 10.  Fractional  Shares.  Series A Preferred Stock may be issued in
fractions  of a share which shall  entitle the  holder,  in  proportion  to such
holder's  fractional  shares,  to exercise  voting  rights,  receive  dividends,
participate  in  distributions  and to have the  benefit of all other  rights of
holders of Series A Preferred Stock.

     Section 11.  Amendment.  The Articles of  Incorporation  of the Corporation
shall not be amended in any manner  which would  materially  alter or change the
powers,  preferences or special rights of the Series A Preferred  Stock so as to
affect them adversely  without the  affirmative  vote of the holders of at least
two-thirds  of the  outstanding  shares  of  Series A  Preferred  Stock,  voting
together as a single class."


                                       16
<PAGE>


     IN WITNESS WHEREOF, the undersigned officer of the Corporation has executed
the  foregoing   Articles  of  Amendment  to  the   Corporation's   Articles  of
Incorporation this 26th day of May, 2005.


                                        By:   /s/Clarence Otis, Jr.
                                           --------------------------------
                                                 Clarence Otis, Jr.
                                                 Chief Executive Officer









                                       17
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>form10k_exhibit10d.txt
<DESCRIPTION>FORM 10K EXHIBIT 10D 7-29-05
<TEXT>





                                                                   EXHIBIT 10(d)










                              SUPPLEMENTAL PENSION PLAN OF

                                DARDEN RESTAURANTS, INC.


<PAGE>



                            SUPPLEMENTAL PENSION PLAN

                           OF DARDEN RESTAURANTS, INC.


Effective as of the Distribution  Date, Darden  Restaurants,  Inc. hereby adopts
the  Supplemental  Pension Plan of Darden  Restaurants,  Inc. for the  exclusive
benefit of its employees, pursuant to authorization of the Board of Directors of
Darden Restaurants, Inc.


                                    ARTICLE I

                                  INTRODUCTION

     Section 1.1 Name of Plan. The name of the Plan is the "Supplemental Pension
Plan of Darden  Restaurants,  Inc." It is also referred to as the  "Supplemental
Plan" or the "Plan."

     Section  1.2  Purpose  of Plan.  The  purpose  of this  Plan is to accept a
transfer of liabilities from the Supplemental  Retirement Plan of General Mills,
Inc., as in effect on the Distribution Date, with respect to individuals who are
employees of Darden Restaurants, Inc. or one of its affiliates as of such date.

     Section  1.3  Effective  Date.  The  effective  date  of  the  Plan  is the
Distribution  Date. This Plan, except as may otherwise be specifically  provided
herein,  shall not apply to Participants who separated from active service prior
to the Distribution Date.



                                       1
<PAGE>


                                   ARTICLE II

                                   DEFINITIONS

     Section  2.1 Base Plan  shall  mean one of the  following  defined  benefit
pension  plans  sponsored  by the  Company  or  General  Mills,  Inc.  which are
qualified under the provisions of Code Section 401:

     (a)  Retirement Plan for Employees of Darden Restaurants. Inc., and

     (b)  Retirement  Income Plan of General Mills, Inc. based on the provisions
          of such plan as in effect immediately prior to the Distribution Date.

     With  respect  to  Participants  in this  Plan  who were  (i)  employed  as
Presidents of a General Mills Restaurants, Inc. division as of May 31, 1994, and
(ii) not  eligible for any benefit  accrual  under the terms of the Base Plan in
which they  participated  for the period  from  January 1, 1989  through May 31,
1994, benefits accrued under the terms of this Plan shall be equal to the entire
benefit which would have accrued to such  individuals  under the applicable Base
Plan for this period.  The form and timing of such payments  shall be subject to
all provisions of this Plan.

     Section 2.2 Board shall mean the Board of Directors of Darden  Restaurants,
Inc.

     Section  2.3 Change of  Control  shall  mean the  occurrence  of any of the
following events:

     (a)  any person  (including  a group as defined in Section  13(d)(3) of the
          Securities Exchange Act of 1934) becoming, directly or indirectly, the
          beneficial  owner of  twenty  percent  (20%) or more of the  shares of
          stock of Darden Restaurants, Inc. entitled to vote for the election of
          directors.

     (b)  as a result of or in connection  with any cash tender offer,  exchange
          offer,  merger  or  other  business  combination,  sale of  assets  or
          contested election,  or combination of the foregoing,  the persons who
          were  directors of the Company just prior to such event shall cease to
          constitute a majority of the Company's Board of Directors; or

     (c)  the  stockholders of the Company approve an agreement  providing for a
          transaction  in which  the  Company  will  cease to be an  independent
          publicly-owned  corporation  or a sale or other  disposition of all or
          substantially all of the assets of the Company occurs.

     Section 2.4 Code shall mean the Internal Revenue Code of 1986, as it may be
amended from time to time.

     Section 2.5  Company  shall mean Darden  Restaurants,  Inc.  and any of its
subsidiaries  or  affiliated   business  entities  as  shall  be  authorized  to
participate in the Plan by the Board, or its delegate.

     Section 2.6 Compensation Committee shall mean the Compensation Committee of
the Board.

                                       2
<PAGE>



     Section 2.7 Deferred  Cash Award shall mean the cash amount  deferred by an
individual  prior  to  January  1,  1995,  under  any  formal  plan of  deferred
compensation sponsored by the Company or one of its affiliates.  A Deferred Cash
Award shall not include:

     (a)  the amount of any base salary deferred during calendar year 1986;

     (b)  any interest or investment increment applied to the amount of the cash
          award which is deferred; or

     (c)  any cash amount  deferred by any person under any individual  contract
          or arrangement with the Company or any of its affiliates.

     Section  2.8  Distribution  Date  shall  mean  the date as  defined  in the
Information  Statement  distributed to  shareholders  of General Mills,  Inc. in
connection with the distribution of Darden Restaurants, Inc.

     Section 2.9 ERISA shall mean the Employee Retirement Income Security
Act of 1974, as it may be amended from time to time.

     Section 2.10 Maximum  Benefit shall mean the maximum annual benefit payable
in dollars  permitted to be either  accrued or paid to a participant of any Base
Plan,  as  determined  under all  applicable  provisions  of the Code and ERISA,
specifically  taking into account the limitations of Code Sections  401(a)17 and
415, and any applicable regulations thereunder. It is specifically intended that
the Maximum Benefit,  as defined herein,  shall take into account changes in the
dollar  limits under Code Sections  401(a)17 and 415, and benefits  payable from
this Plan and the Base Plan shall be adjusted  accordingly.  In  addition,  if a
Base Plan limits the accrued  benefits of any  Participant  by  restricting  the
application  of future  changes  in such  dollar  limits  with  respect  to such
Participant,  benefits payable under this Plan shall  nevertheless be determined
on the full amount  that would have been  permissible  absent such  restrictions
under the Base Plan.

     Section  2.11 Minor  Amendment  Committee  shall  mean the Minor  Amendment
Committee appointed by the Compensation Committee.

     Section 2.12  Participant  shall mean an individual who is a participant in
the Company's Management Incentive Plan or who is eligible to defer compensation
under a formal deferred  compensation program maintained by the Company, and who
was:

     (a)  an active  participant  in one or more Base Plans on and after January
          1, 1976 and whose  accrued  benefits,  determined  on the basis of the
          provisions of such Base Plans without  regard to the Maximum  Benefit,
          would exceed the Maximum Benefit; or

     b)   An  individual  with a Deferred  Cash  Award,  which,  if  included as
          compensation  under  any  Base  Plans in which  such  individual  is a
          participant,  would  result in a  greater  accrued  benefit  under the
          provisions of such Base Plans.

     An eligible  individual shall remain a Participant  under this Supplemental
Plan until all  amounts  payable  on his or her behalf  from this Plan have been
paid.

     Section 2.13 Defined Terms.  Capitalized terms which are not defined herein
shall have the meaning ascribed to them in the relevant Base Plan.

                                       3
<PAGE>


                                   ARTICLE III

                                    BENEFITS

     Section  3.1  Effect  of  Retirement.  Upon  the  Normal,  Early,  or  Late
Retirement of a  Participant,  as provided under a Base Plan,  such  Participant
shall be entitled to a benefit equal to the amount determined in accordance with
the provisions of the Base Plan without regard to the limitations of the Maximum
Benefit, including as compensation for purposes of such calculation any Deferred
Cash Award (as if actually paid at the time of the award), reduced by the lesser
of the Participant's  actual accrued benefit under such Base Plan or the Maximum
Benefit.

     Section  3.2  Spouse's  Pension.  Upon  the  death of a  Participant  whose
surviving  spouse is eligible  for a Spouse's  Pension  under a Base Plan,  such
surviving  spouse shall be entitled to a benefit under this  Supplemental  Plan,
determined in accordance  with the provisions of the Base Plan without regard to
the  limitations  of the Maximum  Benefit,  and  including as  compensation  for
purposes of such calculation any Deferred Cash Award (as if actually paid at the
time of the award), reduced by the lesser of the actual Spouse's Pension payable
under such Base Plan or the Maximum Benefit.

     Section 3.3 Effect of  Termination  Prior to Retirement  Eligibility.  If a
Participant  terminates  employment with the Company and is entitled to a Vested
Deferred  Pension  under a Base Plan,  such  Participant  shall be entitled to a
benefit equal to the amount  determined in accordance with the provisions of the
Base Plan without regard to the limitations of the Maximum Benefit, including as
compensation  for purposes of such  calculation  any Deferred  Cash Award (as if
actually  paid  at the  time  of  the  award),  reduced  by  the  lesser  of the
Participant's  actual  accrued  benefit  under  such  Base  Plan or the  Maximum
Benefit.

     Section 3.4 Benefits  Prior to  Separation  from Service.  A  Participant's
benefit under this Supplemental  Plan may increase or decrease,  before or after
Retirement or termination,  as a result of changes in the formula under any Base
Plan, the Maximum Benefit, or changes in the earnings used to calculate benefits
under a Base Plan formula.

     Any  benefit  accrued  under  this  Supplemental  Plan  as  a  result  of a
Participant's  Deferred  Cash Award shall be payable  only if, and to the extent
that on the date of his or her termination of employment,  both of the following
conditions are satisfied:

     (a)  The Participant has a vested accrued benefit under the applicable Base
          Plan, and

     (b)  A  Deferred  Cash  Award was made  during a year  which is used in the
          calculation of Final Average Earnings under this  Supplemental Plan on
          the date of termination.

     Section  3.5  Form  of  Payment.  Any  benefit  amount  payable  under  the
Supplemental  Plan to a married  Participant  shall be adjusted  and paid in the
form of a joint and 100% to survivor  annuity.  Any benefit amount payable under
the Supplemental Plan to an unmarried Participant shall be paid in the form of a
single  life  annuity.  Notwithstanding  the above,  a married  Participant  may
request,  subject to the approval of the Minor Amendment Committee, to have such
benefit amounts adjusted and paid as a joint and 50% to survivor annuity or as a
single life  annuity.  Further,  any  Participant  may  request,  subject to the
approval of the Minor Amendment Committee,  that any benefit amount be paid in a
single sum payment in cash, effective as of the first day monthly benefits would
otherwise  begin.  Any request for an alternate  form of benefit that is granted
may be made at any  time  before  benefits  would  otherwise  begin.  The  Minor
Amendment  Committee  may  approve  or  reject  any  such  request  in its  sole
discretion Any joint and survivor annuity shall be the actuarial equivalent of a
single life annuity based on the following factors, determined using the ages of
the Participant and spouse on the effective date of the payment:

                                       4
<PAGE>



     (a)  The formula for the joint and 100% to survivor factor is:

               .868 + .005  (65 - X) + .005  (Y - X),  where X is  equal  to the
               Participant's age and Y is equal to the age of the spouse.

     (b)  The formula for the joint and 50% to survivor factor is:

               .928 + .003  (65 - X) + .003  (Y - X),  where X is  equal  to the
               Participant's age and Y is equal to the age of the spouse.

For the purpose of  calculating  any lump sum  payment,  the  interest  rate and
mortality  table used shall be the same as used  under the  Retirement  Plan for
Employees of Darden Restaurants, Inc. at the time the lump sum payment is made.

     Section 3.6 Time of Payment.  The payment of benefits  determined under the
provisions of the Supplemental Plan shall commence on the first day of the month
coincident  with or next  following  the  date  upon  which  a  Participant  (or
surviving  spouse) first becomes eligible to commence  receiving  benefits under
the Base Plan or Plans,  regardless of the time benefits actually commence under
the Base Plan.  Notwithstanding any other provisions of the Supplemental Plan to
the contrary, the Minor Amendment Committee may, in its sole discretion,  direct
that payments be made before such payments are otherwise due, if, for any reason
(including but not limited to, a change in the tax or revenue laws of the United
States of America,  a  published  ruling or similar  announcement  issued by the
Internal Revenue Service,  a regulation  issued by the Secretary of the Treasury
or his delegate, or a decision by a court of competent  jurisdiction involving a
Participant or  Beneficiary),  it believes that a Participant or Beneficiary has
recognized or will recognize income for federal income tax purposes with respect
to amounts that are or will be payable under the  Supplemental  Plan before they
are to be paid.  In making this  determination,  the Minor  Amendment  Committee
shall take into account the hardship that would be imposed on the Participant or
Beneficiary by the payment of federal income taxes under such circumstances.

     Section  3.7  Effect of Changes in the  Maximum  Benefit.  In the event the
dollar  amount  of  the  Maximum  Benefit  increases  as  a  result  of  federal
legislation,  the benefits of any  Participant  payable  under the  Supplemental
Plan,  whether or not in pay status,  shall be recalculated to take into account
the higher Maximum  Benefit  payable from the applicable  Base Plan. If payments
have already  commenced under the provisions of the applicable Base Plan and the
Supplemental Plan, benefit amounts under both Plans shall be adjusted to reflect
the higher  Maximum  Benefit,  by increasing the amount paid under the Base Plan
and  decreasing  the  amount  paid  under  the  Supplemental  Plan,  as  soon as
administratively  possible after such a change.  Notwithstanding the above, if a
Base Plan is terminated,  no adjustments shall be made to benefits payable under
the  Supplemental  Plan with respect to changes in the Maximum Benefit after the
date of termination of the Base Plan.

     Section 3.8 Participants  Formerly on Leave from General Mills, Inc. to the
Company.  Participants  in this  Plan (i) who were  active  participants  in the
Retirement  Income  Plan of  General  Mills,  Inc.  ("RIP") on "leave of absence
status" to General Mills  Restaurants,  Inc. and (ii) whose leaves were canceled
effective as of May 31, 1991, may be entitled to additional  benefits under this
Plan as described below. In addition to any benefits that such a Participant may
be entitled to under the  provisions  of this Article III,  this Plan shall also
pay the  difference,  if any,  between the total  benefits  the  Participant  is
entitled to from the Base Plan in which he or she is  participating  at the time
of  termination  and this Plan and the annuity value of each FlexComp Award made
to the  Participant,  and the total  benefits  the  Participant  would have been
entitled  to from  the RIP and  this  Plan,  had the  Participant  continued  to
participate  in the RIP  until  the  date of the  Participant's  termination  of
employment or Retirement.

                                       5
<PAGE>



     The  annuity  value of a  FlexComp  Award  shall be equal to the life  only
benefit  that would be  payable,  determined  using the same  interest  rate and
mortality assumptions described in Section 3.5, under (a) or (b) below:

     (a)  If the  Participant  elected to defer receipt of the FlexComp Award to
          Retirement or termination of employment,  and the full amount deferred
          has remained in the FlexComp Plan until the date of the  Participant's
          Retirement or  termination,  the value of such FlexComp  Award at such
          time.

     (b)  With respect to any other FlexComp  Award, a  "hypothetical"  value of
          such FlexComp Award shall be calculated  based on the amount  actually
          received by the Participant, assuming that such amount was held in the
          FlexComp  Plan  from  the date of  payment  to the  Participant  until
          termination  or  Retirement,  and as if said amount was credited  with
          interest at the rate of the Fixed Fund specified in the FlexComp Plan.

                                       6
<PAGE>


                                   ARTICLE IV

                               PLAN ADMINISTRATION


     Section  4.1  Compensation  Committee.   The  Supplemental  Plan  shall  be
administered by the Compensation Committee, and the Compensation Committee shall
have full authority to interpret the Supplemental Plan. Such  interpretations of
the Compensation Committee shall be final and binding on all parties,  including
the Participants, their beneficiaries, surviving spouses and the Company.

     Section 4.2 Delegated  Duties.  The  Compensation  Committee shall have the
authority  to delegate  the duties and  responsibilities  of  administering  the
Supplemental Plan, maintaining records, issuing such rules and regulations as it
deems appropriate, and making the payments hereunder to such employees or agents
of the Company as it deems proper.

     Section  4.3  Amendment  and  Termination.  The Board,  or if  specifically
delegated, its delegate, may amend, modify or terminate the Supplemental Plan at
any time, provided, however, that no such amendment, modification or termination
shall adversely affect any accrued benefit under the Supplemental  Plan to which
a Participant,  or the Participant's Beneficiary,  is entitled under Article III
prior  to  the  date  of  such  amendment  or  termination,  and in  which  such
Participant,  or the Participant's  Beneficiary,  would have been vested if such
benefit  had  been  provided  under  the  applicable   Base  Plan,   unless  the
Participant,  or the  Participant's  Beneficiary,  becomes entitled to an amount
equal to the cash value of such benefit under another plan,  program or practice
adopted by the Company.  Notwithstanding the above, no amendment,  modification,
or termination  which would affect benefits accrued under this Supplemental Plan
prior to such amendment, modification or termination may occur after a Change in
Control without the written consent of a majority of the Participants determined
as of the day  before  such  Change  in  Control.  Each  year  the  Compensation
Committee  shall  notify,  in writing,  those  individuals  who have any accrued
benefits under the Supplemental Plan.

     Section 4.4 Payments.  The Company will pay all benefits arising under this
Supplemental  Plan and all costs,  charges and expenses  relating  thereto.  The
benefits payable under this  Supplemental  Plan to each Participant shall not be
greater that what would have been paid in the aggregate  under the Base Plan (i)
in the  absence of federal  limitations  on benefit  amounts and (ii) if amounts
deferred had been paid to the Participant when earned.

     Section 4.5 Arbitration.

     (a)  Any  controversy  or claim arising out of or relating to this Plan, or
          any alleged breach of the terms or conditions  contained herein, shall
          be  settled  by   arbitration   in  accordance   with  the  Commercial
          Arbitration Rules of the American Arbitration  Association (the "AAA")
          as such rules may be modified herein.

     (b)  An award rendered in connection  with an arbitration  pursuant to this
          Section  shall be final and binding and,  judgment  upon such an award
          may be entered and enforced in any court of competent jurisdiction.

     (c)  The  forum  for   arbitration   under  this  Plan  shall  be  Orlando,
          Florida,and  the governing law for such  arbitration  shall be laws of
          the State of Florida.

                                       7
<PAGE>


     (d)  Arbitration  under  this  Section  shall  be  conducted  by  a  single
          arbitrator  selected  jointly by the Company and the Participant  (the
          "Complainant").  If  within  thirty  (30)  days  after  a  demand  for
          arbitration  is made,  the Company and the  Complainant  are unable to
          agree on a single  arbitrator,  three  arbitrators shall be appointed.
          Each party shall select one arbitrator and those two arbitrators shall
          then select a third  neutral  arbitrator  which thirty (30) days after
          their  appointment.  In  connection  with the  selection  of the third
          arbitrator, consideration shall be given to familiarity with executive
          compensation  plans  and  experience  in  dispute  resolution  between
          parties, as a judge or otherwise.  If the arbitrators  selected by the
          parties cannot agree on the third  arbitrator,  they shall discuss the
          qualifications  of  such  third  arbitrator  with  the  AAA  prior  to
          selection of such  arbitrator,  which selection shall be in accordance
          with the Commercial Arbitration Rules of the AAA.

     (e)  If  an  arbitrator  cannot  continue  to  serve,  a  successor  to  an
          arbitrator  selected  by a party  shall be also  selected  by the same
          party,  and a successor to a neutral  arbitrator  shall be selected as
          specified in subsection (d) of this Section.  A full rehearing will be
          held only if the neutral  arbitrator is unable to continue to serve or
          if the remaining  arbitrators  unanimously agree that such a rehearing
          is appropriate.

     (f)  The arbitrator or arbitrators  shall be guided,  but not bound, by the
          Federal  Rules of  Evidence  and by the  procedural  rules,  including
          discovery  provisions,  of the Federal Rules of Civil  Procedure.  Any
          discovery shall be limited,  to information  directly  relevant to the
          controversy or claim in arbitration.

     (g)  The  parties  shall  each be  responsible  for  their  own  costs  and
          expenses,  except for the fees and expenses of the arbitrators,  which
          shall be shared equally by the Company and the Complainant.

     Section 4.6  Non-Assignability  of  Benefits.  Neither any benefit  payable
hereunder  nor the  right to  receive  any  future  benefit  payable  under  the
Supplemental Plan may be anticipated,  alienated,  sold, transferred,  assigned,
pledged,  encumbered,  or subjected to any charge or legal  process,  and if any
attempt  is  made to do so,  or a  person  eligible  for  any  benefits  becomes
bankrupt, the interest under the Supplemental Plan of the person affected may be
terminated by the  Compensation  Committee  which, in its sole  discretion,  may
cause  the  same to be held or  applied  for the  benefit  of one or more of the
dependents of such person or make any other disposition of such benefits that it
deems appropriate.

     Section 4.7 Applicable Law. All questions  pertaining to the  construction,
validity and effect of the  Supplemental  Plan shall be determined in accordance
with the laws of the United  States and the laws of the State  applicable to the
Base Plan covering the Participant.






                                       8
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>5
<FILENAME>form10k_exhibit10q.txt
<DESCRIPTION>FORM 10K EXHIBIT 10Q 7-29-05
<TEXT>

                                                                   EXHIBIT 10(q)
                            DARDEN RESTAURANTS, INC.

                            2002 STOCK INCENTIVE PLAN
                        RESTRICTED STOCK AWARD AGREEMENT

     This Restricted Stock Award Agreement is between Darden Restaurants,  Inc.,
a Florida corporation (the "Company"), and you, the person named in the attached
Award  Certificate  who is an employee of the Company or one of its  Affiliates.
This  Agreement  is  effective as of the date of grant set forth in the attached
Award Certificate (the "Grant Date").

     The Company wishes to award to you a number of shares of the Company's
Common Stock, no par value (the "Common Stock"), subject to certain restrictions
as provided in this Agreement, in order to carry out the purpose of the
Company's 2002 Stock Incentive Plan (the "Plan").

     Accordingly, for good and valuable consideration,  the receipt and adequacy
of which are hereby acknowledged, the Company and you hereby agree as follows:

     1. Award of Restricted Stock.
        -------------------------
     The Company hereby grants to you,  effective as of the Grant Date, an Award
of  Restricted  Stock for that number of shares of Common Stock set forth in the
attached Award Certificate (the "Shares"), on the terms and conditions set forth
in this Agreement and the Award  Certificate and in accordance with the terms of
the Plan.

     2. Rights with Respect to the Shares.
        ---------------------------------
     With respect to the Shares, you shall be entitled to exercise the rights of
a  shareholder  of Common Stock of the Company,  including the right to vote the
Shares and the right to receive cash dividends  thereon as provided in Section 8
of this Agreement, unless and until the Shares are forfeited pursuant to Section
5 hereof. Your rights with respect to the Shares shall remain forfeitable at all
times prior to the date or dates on which such  rights  become  vested,  and the
restrictions  with respect to the Shares lapse,  in accordance with Section 3, 4
or 5 hereof.

     3. Vesting.
        -------
     (a) Subject to the terms and conditions of this Agreement, the Shares shall
vest, and the  restrictions  with respect to the Shares shall lapse, on the date
or  dates  and in the  amount  or  amounts  set  forth  in  the  attached  Award
Certificate if you remain  continuously  employed by the Company or an Affiliate
of the Company until the respective vesting dates.

     (b) If,  but only if, the Award  Certificate  attached  to this  Restricted
Stock Award Agreement  states that the Expiration Date of the Restricted  Period
is subject to  acceleration  based on Company  performance,  then the  following
provisions will apply:

          (i) The Shares shall vest,  and the  restrictions  on the Shares shall
     lapse,  annually  following  the end of each of the first five fiscal years
     ending after the Grant

<PAGE>

     Date,  in an amount equal to twice the Darden  Annual Sales Growth Rate (as
     defined below) for the applicable fiscal year, rounded to the nearest whole
     number,  provided  that the Darden  Annual  Return on Capital  (as  defined
     below) for that fiscal year  exceeds  the Return on Capital  Threshold  (as
     defined below) for that fiscal year.

          (ii) For purposes of this Agreement, "Darden Annual Sales Growth Rate"
     for the  applicable  fiscal  year  means  the  percentage  computed  by (x)
     subtracting  the  consolidated  sales for the  Company  for the fiscal year
     immediately  preceding  the  applicable  fiscal year (as  reflected  in the
     Company's  annual  audited  financial  statements  for such  year) from the
     consolidated  sales for the  Company  for the  applicable  fiscal  year (as
     reflected in the  Company's  annual  audited  financial  statement for such
     year),  (y)  dividing  the amount  computed  pursuant  to clause (x) by the
     consolidated  sales  for  the  Company  for  the  fiscal  year  immediately
     preceding the applicable  fiscal year (as reflected in the Company's annual
     audited financial  statements for such year) and (z) multiplying the amount
     computed  pursuant  to clause (y) by 100.  Following  the end of the second
     through  fifth fiscal years ending after the Grant Date,  the Darden Annual
     Sales  Growth  Rate  shall be  determined  on a  cumulative  basis  for the
     combined years covered by the  calculation,  adjusted to reflect the amount
     of the  Darden  Annual  Sales  Growth  Rate,  if any,  that has  previously
     resulted in the  accelerated  vesting of Shares  pursuant  to this  Section
     3(b).

          (iii)  For  purposes  of this  Agreement,  "Darden  Annual  Return  on
     Capital"  for the  applicable  fiscal  year means the  Company's  return on
     capital for that year as computed by the Company's  accounting  department,
     and the term "Return on Capital  Threshold" for the applicable  fiscal year
     means the median return on capital as computed by the Company's  accounting
     department for the competitive  set of companies  selected by the Committee
     for the prior year.  If the Darden Annual Return on Capital does not exceed
     the Return on Capital  Threshold for the  applicable  fiscal year,  then no
     Shares shall vest pursuant to this Section 3(b) for that year.

          (iv) The  calculations  under  this  Section  3(b) shall be made on or
     before the June 30 immediately  following the end of the applicable  fiscal
     year and any accelerated  vesting resulting from such calculations shall be
     effective as of that June 30.

          (v) The Committee  administering  the Plan shall have the authority to
     make any determinations regarding questions arising from the application of
     the provisions of this Section 3(b),  which  determination  shall be final,
     conclusive and binding on you and the Company.

     4. Change of Control.
        -----------------
     Notwithstanding  the vesting  provisions  contained in Section 3 above, but
subject to the other terms and conditions in this Agreement, upon the occurrence
of a Change of Control  (as  defined  below) you shall  become  immediately  and
unconditionally vested in all Shares and the restrictions with respect to all of
the Shares shall  lapse.  For  purposes of this  Agreement,  "Change of Control"
shall mean any of the following events:

                                       2
<PAGE>


     (a) any person  (including  a group as defined in Section  13(d)(3)  of the
Securities  Exchange Act of 1934, as amended)  becomes,  directly or indirectly,
the  beneficial  owner of 20% or more of the shares of the  Company  entitled to
vote for the election of directors;

     (b) as a result of or in connection  with any cash tender  offer,  exchange
offer,  merger  or other  business  combination,  sale of  assets  or  contested
election, or combination of the foregoing, the persons who were directors of the
Company just prior to such event cease to constitute a majority of the Company's
Board of Directors; or

     (c) the  consummation of a transaction in which the Company ceases to be an
independent  publicly-owned  corporation or the  consummation of a sale or other
disposition of all or substantially all of the assets of the Company.

     5. Early  Vesting;  Forfeiture;  Automatic  Conversion to Restricted  Stock
        ------------------------------------------------------------------------
Units; Deposit Shares.
---------------------
     (a) If you cease to be  employed  by the  Company  or an  Affiliate  of the
Company  prior to the  vesting of the Shares  pursuant to Section 3 or 4 hereof,
your rights to all of the unvested  Shares shall be immediately  and irrevocably
forfeited, including the right to vote such Shares and the right to receive cash
dividends on such Shares, except that:

          (i) if the  Company or an  Affiliate  of the Company  terminates  your
     employment  involuntarily and not for cause (as determined by the Committee
     administering  the Plan)  prior to the  vesting of the Shares  pursuant  to
     Section 3 or 4 hereof,  and your combined age and years of service with the
     Company or an Affiliate  of the Company  equal at least 70, then any Shares
     that have not vested on the date of your termination of employment but that
     would have  vested  within two years from the date of  termination  if your
     employment  had continued  shall become  immediately  vested on the date of
     your termination of employment;

          (ii) if you  retire on or after age 55 with 10 years of  service  with
     the  Company or an  Affiliate  of the  Company  prior to the vesting of the
     Shares  pursuant to Section 3 or 4 hereof,  subject to Sections 5 (c) and 5
     (d) below,  you will continue to vest in the Shares of Restricted  Stock as
     set forth in the Award Certificate; or

          (iii) if you die  prior  to the  vesting  of the  Shares  pursuant  to
     Section 3, 4 or 5 hereof,  the Shares  will vest on a pro rata basis on the
     date of your death,  based on the number of full months from the Grant Date
     to the date of your death.  No transfer by will or the  applicable  laws of
     descent and  distribution  of any Shares which vest by reason of your death
     shall be effective to bind the Company  unless the Committee  administering
     the Plan shall have been furnished with written notice of such transfer and
     a copy  of the  will or such  other  evidence  as the  Committee  may  deem
     necessary to establish the validity of the transfer.

     (b) If the  Award  Certificate  attached  to this  Restricted  Stock  Award
Agreement  states that this  Restricted  Stock Award has been awarded subject to
the Darden  Restaurants,  Inc.  Management and Professional  Incentive Plan (the
"MIP"),  then this  Restricted  Stock  Award  and the  related  Shares  shall be
cancelled,  forfeited and returned to the Company unless all of the

                                       3
<PAGE>

requirements  set  forth  in the MIP for the  year to  which  the  grant of this
Restricted Stock Award relates are satisfied.

     (c) If the  Award  Certificate  attached  to this  Restricted  Stock  Award
Agreement  states  that the  Expiration  Date of the  Restricted  Period  is not
subject to acceleration based on Company  performance,  and if, as determined in
January  of each  year,  you will  attain the age of 55 with 10 years of service
with the Company or an  Affiliate  of the  Company  during the  one-year  period
beginning  on the last  business  day of  January  of that year (the  "Automatic
Conversion  Date")  and  ending  on the  last  business  day of  January  of the
following year, then (i) as of the Automatic Conversion Date, your rights to all
of the  Shares  that are  unvested  on the  Automatic  Conversion  Date shall be
immediately and irrevocably  forfeited,  including the right to vote such Shares
and the right to  receive  cash  dividends  on such  Shares,  and (ii) you shall
automatically  receive,  effective as of the Automatic Conversion Date, an award
of  restricted  stock units under the Plan for that number of units equal to the
number of Shares so forfeited, dated as of the Grant Date, with the same vesting
schedule as  provided  in this  Agreement  and  containing  such other terms and
conditions as are set forth in or established under the Plan.

     (d) If the  Award  Certificate  attached  to this  Restricted  Stock  Award
Agreement states that the Expiration Date of the Restricted Period is subject to
acceleration based on Company  performance,  and if, as determined in January of
each  year,  you will  attain  the age of 55 with 10 years of  service  with the
Company or an Affiliate of the Company during the one-year  period  beginning on
the last business day of January of that year (the "Deposit Date") and ending on
the last  business day of January of the following  year,  then you may elect to
place on deposit  with the Company one  personally  owned share of Common  Stock
(the  "Deposit  Shares")  for every two Shares that are  unvested on the Deposit
Date.  If you withdraw any or all of the Deposit  Shares  before the Shares have
vested,  two Shares that are unvested  will be forfeited  for each Deposit Share
withdrawn.  The  Company  will  release to you one  Deposit  Share for every two
Shares that vest  following  the Deposit  Date.  In lieu of physical  deposit of
Share  certificates with the Company,  the Company may accept such other form or
evidence of deposit as it deems appropriate.

     6. Restriction on Transfer.
        -----------------------
     Until the Shares  vest  pursuant  to Section 3, 4 or 5 hereof,  none of the
Shares  may be sold,  assigned,  transferred,  pledged,  attached  or  otherwise
encumbered,  and no  attempt  to  transfer  the  Shares,  whether  voluntary  or
involuntary,  by operation of law or otherwise,  shall vest the transferee  with
any interest or right in or with respect to the Shares.

     7. Issuance and Custody of Certificates.
        ------------------------------------
     (a) The Company shall cause the Shares to be issued in your name, either by
book-entry  registration  or issuance of a stock  certificate  or  certificates,
which certificate or certificates shall be held by the Company. The Shares shall
be restricted from transfer and shall be subject to an appropriate stop-transfer
order. If any certificate is issued,  the certificate  shall bear an appropriate
legend referring to the restrictions applicable to the Shares.

                                       4
<PAGE>


     (b) If any  certificate  is issued,  you shall be  required  to execute and
deliver to the Company a stock power or stock powers relating to the Shares as a
condition to the receipt of this Award of Restricted Stock.

     (c) After  any  Shares  vest  pursuant  to  Section  3, 4 or 5 hereof,  and
following  payment of the  applicable  withholding  taxes  pursuant to Section 9
hereof,  the Company  shall  promptly  cause such vested Shares (less any shares
withheld to pay taxes),  free of the  restrictions  and/or  legend  described in
Section 7(a) hereof,  to be delivered,  either by book-entry  registration or in
the form of a  certificate  or  certificates,  registered in your name or in the
names of your legal representatives, beneficiaries or heirs, as the case may be.

     8. Distributions and Adjustments.
        -----------------------------
     (a) If any Shares vest  subsequent to any change in the number or character
of the  Common  Stock  of the  Company  (through  any  stock  dividend  or other
distribution,    recapitalization,    stock   split,    reverse   stock   split,
reorganization,   merger,   consolidation   split-up,   spin-off,   combination,
repurchase or exchange of shares or otherwise), you shall then receive upon such
vesting the number and type of securities or other consideration which you would
have  received if such Shares had vested prior to the event  changing the number
or character of the outstanding Common Stock.

     (b) Any  additional  shares  of  Common  Stock of the  Company,  any  other
securities of the Company and any other  property  (except for cash dividends or
other cash  distributions)  distributed  with respect to the Shares prior to the
date or dates the Shares vest shall be subject to the same  restrictions,  terms
and  conditions  as the  Shares  to which  they  relate  and  shall be  promptly
deposited  with the  Secretary of the Company or a custodian  designated  by the
Secretary.

     (c) Any cash dividends or other cash distributions  payable with respect to
the Shares shall be  distributed to you at the same time cash dividends or other
cash distributions are distributed to shareholders of the Company generally.

     9. Taxes.
        -----
     (a) You  acknowledge  that you will consult with your  personal tax advisor
regarding  the income tax  consequences  of the grant of the Shares,  payment of
dividends on the Shares, the vesting of the Shares and any other matters related
to this  Agreement.  In order to comply with all  applicable  federal,  state or
local  income tax laws or  regulations,  the  Company may take such action as it
deems appropriate to ensure that all applicable federal, state or local payroll,
withholding,   income  or  other  taxes,   which  are  your  sole  and  absolute
responsibility, are withheld or collected from you.

     (b) In  accordance  with the  terms of the Plan,  and such  rules as may be
adopted by the Committee  administering  the Plan,  you may elect to satisfy any
applicable tax withholding obligations arising from the receipt of, or the lapse
of restrictions relating to, the Shares by (i) delivering cash (including check,
draft,  money order or wire  transfer made payable to the order of the Company),
(ii)  having  the  Company  withhold a portion  of the  Shares  otherwise  to be
delivered having a Fair Market Value equal to the amount of such taxes, or (iii)
delivering  to the

                                       5
<PAGE>

Company shares of Common Stock having a Fair Market Value equal to the amount of
such taxes.  The Company will not deliver any fractional  Share but will pay, in
lieu thereof, the Fair Market Value of such fractional Share. Your election must
be made  on or  before  the  date  that  the  amount  of tax to be  withheld  is
determined.

     10. General Provisions.
         ------------------
     (a) Interpretations. This Agreement is subject in all respects to the terms
of the Plan.  A copy of the Plan is  available  upon your  request.  Terms  used
herein which are defined in the Plan shall have the respective meanings given to
such terms in the Plan,  unless otherwise  defined herein. In the event that any
provision of this  Agreement  is  inconsistent  with the terms of the Plan,  the
terms of the Plan shall govern. Any question of administration or interpretation
arising under this Agreement shall be determined by the Committee  administering
the Plan, and such determination shall be final, conclusive and binding upon all
parties in interest.

     (b) No Right to Employment.  Nothing in this Agreement or the Plan shall be
construed  as giving you the right to be  retained as an employee of the Company
or any Affiliate of the Company. In addition, the Company or an Affiliate of the
Company may at any time dismiss you from employment,  free from any liability or
any claim under this  Agreement,  unless  otherwise  expressly  provided in this
Agreement.

     (c)  Securities  Matters.  The Company shall not be required to deliver any
Shares until the  requirements of any federal or state securities or other laws,
rules or regulations  (including the rules of any securities exchange) as may be
determined by the Company to be applicable are satisfied.

     (d) Headings.  Headings are given to the sections and  subsections  of this
Agreement solely as a convenience to facilitate  reference.  Such headings shall
not  be  deemed  in  any  way  material  or  relevant  to  the  construction  or
interpretation of this Agreement or any provision hereof.

     (e) Governing  Law. The internal law, and not the law of conflicts,  of the
State of Florida will govern all questions concerning the validity, construction
and effect of this Agreement.

     (f) Notices.  You should send all written notices  regarding this Agreement
or the Plan to the Company at the following address:

                           Darden Restaurants, Inc.
                           Supervisor, Stock Compensation Plans
                           5900 Lake Ellenor Drive
                           Orlando, FL 32809

     (g) Award Certificate. This Restricted Stock Award Agreement is attached to
and made a part of an Award Certificate and shall have no force or effect unless
such Award Certificate is duly executed and delivered by the Company to you.

                             * * * * * * * *


                                       6
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12
<SEQUENCE>6
<FILENAME>form10k_exhibit12.txt
<DESCRIPTION>FORM 10K EXHIBIT 12 7-29-05
<TEXT>


                                                                      EXHIBIT 12

                            DARDEN RESTAURANTS, INC.
         COMPUTATION OF RATIO OF CONSOLIDATED EARNINGS TO FIXED CHARGES
                          (Dollar Amounts in Thousands)
<TABLE>
<CAPTION>

                                                                                     Fiscal Year Ended
 -----------------------------------------------------------------------------------------------------------------------
                                            May 29, 2005   May 30, 2004   May 25, 2003    May 26, 2002    May 27, 2001
 -----------------------------------------------------------------------------------------------------------------------

<S>                                         <C>            <C>              <C>            <C>            <C>
 Consolidated Earnings from Operations
    before Income Taxes ....................$ 423,917       $ 332,776       $ 337,603      $ 355,435       $ 294,654
 Plus Fixed Charges:
    Gross Interest Expense..................   47,657          47,710          47,566         41,493          35,196
    40% of Restaurant and Equipment
        Minimum Rent Expense................   24,849          22,608          21,536         20,600          19,352
                                            ---------       ---------       ---------      ---------       ---------
              Total Fixed Charges...........$  72,506       $  70,318       $  69,102      $  62,093       $  54,548
 Less Capitalized Interest..................   (3,182)         (3,500)         (3,470)        (3,653)         (3,671)
                                            ---------       ---------       ---------      ---------       ----------
 Consolidated Earnings from Operations
    before Income Taxes Available to
    Cover Fixed Charges.....................$ 493,241       $ 399,594       $ 403,325      $ 413,875       $ 345,531
                                            =========       =========       =========      =========       =========

 Ratio of Consolidated Earnings to Fixed
    Charges ................................     6.80            5.68            5.84           6.67            6.33
                                            =========     ===========    ============   ============     ===========

 -----------------------------------------------------------------------------------------------------------------------
</TABLE>









</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-13
<SEQUENCE>7
<FILENAME>form10k_exhibit13mda.txt
<DESCRIPTION>FORM 10K EXHIBIT 13 MD&A 7-29-05
<TEXT>
                                                                      Exhibit 13


MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS

This discussion and analysis below for the Company should be read in conjunction
with our consolidated  financial statements and related notes found elsewhere in
this report.

For  financial  reporting,  we operate on a 52/53 week fiscal year ending on the
last Sunday in May. Our 2005 fiscal year,  which ended on May 29, 2005,  and our
2003 fiscal  year,  which  ended on May 25,  2003,  each had 52 weeks.  Our 2004
fiscal year, which ended on May 30, 2004, had 53 weeks. We have included in this
discussion  certain financial  information for fiscal 2004 on a 52-week basis in
order to assist  investors  in making  comparisons  to our 2005 and 2003  fiscal
years.

OVERVIEW OF OPERATIONS

Our business  operates in the casual dining segment of the restaurant  industry,
primarily in the United States.  At May 29, 2005, we operated 1,381 Red Lobster,
Olive  Garden,  Bahama  Breeze,  Smokey  Bones  Barbeque & Grill and  Seasons 52
restaurants  in the  United  States  and  Canada  and  licensed  37 Red  Lobster
restaurants  in Japan.  We own and operate all of our  restaurants in the United
States and Canada, with no franchising.

Our sales were $5.28  billion in fiscal 2005 and $5.00 billion in fiscal 2004, a
5.5 percent  increase.  On a 52-week basis,  after reducing fiscal 2004 sales by
the $90 million  contributed  by the additional  53rd operating  week, our sales
increased  7.4 percent in fiscal  2005.  Net  earnings for fiscal 2005 were $291
million ($1.78 per diluted share)  compared with net earnings for fiscal 2004 of
$227 million ($1.34 per diluted  share).  Net earnings for fiscal 2005 increased
27.9 percent and diluted net earnings per share increased 32.8 percent  compared
to fiscal 2004. The net earnings increase in fiscal 2005 reflected Red Lobster's
substantial progress in some important areas. A primary driver was substantially
improved   operations   behind  Red  Lobster's  new  "simply  great"   operating
discipline,  which  allowed  the  brand to  simultaneously  improve  both  guest
satisfaction  and operating  efficiency.  Red Lobster  finished fiscal 2005 with
three consecutive quarters of U.S. same-restaurant sales and guest count growth,
and year-over-year  operating profit growth.  Olive Garden also delivered strong
performance in fiscal 2005.  Driven by U.S.  same-restaurant  sales increases in
each  quarter of fiscal  2005,  which  resulted  in 43  consecutive  quarters of
same-restaurant  sales growth, Olive Garden had a double-digit  operating profit
increase,  record annual  operating  profit and record  return on sales.  Bahama
Breeze also  contributed  to net  earnings  growth in fiscal 2005 as a result of
operating  improvements  in a number of areas and the  closing and write down of
underperforming  restaurants in fiscal 2004. Smokey Bones' continued  investment
in  expansion,  combined  with high rib costs and the write down in the carrying
value of one restaurant, resulted in a modestly greater operating loss in fiscal
2005 than in fiscal 2004.

In fiscal  2006,  we expect a net increase of between 55 to 65  restaurants.  We
expect combined U.S.  same-restaurant sales growth in fiscal 2006 of between two
percent and four percent at Red Lobster and Olive Garden.  We also expect Bahama
Breeze to have minimal effect on consolidated net earnings growth in fiscal 2006
as we continue to invest in  positioning  the business for  successful,  renewed
growth.  And,  in  fiscal  2006,  we  expect  Smokey  Bones to open 25 to 30 new
restaurants  while  implementing  menu  enhancements to broaden its appeal. As a
result, we anticipate approximately $0.04 to $0.06 per diluted share improvement
in Smokey Bones' impact on our  consolidated  net  earnings.  On a  consolidated
basis, we anticipate low  double-digit  diluted net earnings per share growth in
fiscal 2006.

Our  mission is to be the best in casual  dining,  now and for  generations.  We
believe  we can  achieve  this  goal by  continuing  to build on our  historical
strength  as a  multi-brand  casual  dining  company,  which is  grounded in our
commitment to combining the following:
     o    A strong  culture that  inspires  and engages our people,  with firmly
          held values, a clear mission and a core purpose to nourish and delight
          everyone we serve;
     o    Competitively superior leadership;
     o    Brand management excellence;
     o    Restaurant operating excellence; and
     o    Restaurant support excellence

                                       1
<PAGE>

From a financial  perspective,  we seek to increase  profits by  leveraging  our
fixed and semi-fixed  costs with sales from new  restaurants and increased guest
traffic and sales at existing restaurants. To evaluate our operations and assess
our financial  performance,  we monitor a number of operating  measures,  with a
special focus on two key factors:

     o    Same-restaurant sales - which are a year-over-year  comparison of each
          period's  sales  volumes  for  restaurants  that are open more than 16
          months; and
     o    Restaurant  operating  margins  -  which  are  restaurant  sales  less
          restaurant-level  cost of sales (food and beverage  costs,  restaurant
          labor and other restaurant expenses).

Increasing  same-restaurant  sales can  increase  restaurant  operating  margins
because  these  incremental  sales  provide  better  leverage  of our  fixed and
semi-fixed costs.  Same-restaurant sales increases can be generated by increases
in guest traffic,  increases in the average guest check, or a combination of the
two.  The average  guest check can be impacted by menu price  changes and by the
mix of menu items sold. For each operating  company,  we gather daily sales data
and regularly analyze the guest traffic counts and the mix of menu items sold to
assist in developing menu pricing, product offerings and promotional strategies.
We view same-restaurant guest counts as an indication of the long-term health of
an  operating  company,  while  increases  in  average  check  and  menu mix may
contribute more significantly to near-term  profitability.  We continually focus
on  balancing  our pricing  and  product  offerings  with other  initiatives  to
generate sustainable same-restaurant sales growth.

We  compute  same-restaurant  sales  using  restaurants  open at least 16 months
because new restaurants  experience an adjustment period before sales levels and
operating margins normalize.  Sales at newly opened restaurants generally do not
make a significant  contribution  to  profitability  in their initial  months of
operation.  Our sales and expenses can be impacted  significantly  by the number
and timing of the opening of new  restaurants  and the closing,  relocation  and
remodeling of existing restaurants. Pre-opening expenses each period reflect the
costs associated with opening new restaurants in current and future periods.

There are significant  risks and challenges that could impact our operations and
ability to increase sales and earnings. The casual dining restaurant industry is
intensely  competitive  and  sensitive  to  economic  cycles and other  business
factors,  including  changes in consumer tastes and dietary habits.  Other risks
and  uncertainties  include the price and availability of food,  ingredients and
utilities; labor and insurance costs;  higher-than-anticipated  costs to open or
close restaurants;  litigation; unfavorable publicity relating to food safety or
other concerns; lack of suitable locations;  government regulations; and factors
that  could  impact our  growth  objectives,  including  the  construction  cost
increases, construction delays and other factors.


                                       2
<PAGE>


RESULTS OF OPERATIONS FOR FISCAL 2005, 2004 AND 2003

The following table sets forth selected  operating data as a percentage of sales
for the  52-week  periods  ended May 29,  2005 and May 25,  2003 and the 53-week
period  ended May 30, 2004.  All  information  is derived from the  consolidated
statements of earnings for the periods indicated.
<TABLE>
<CAPTION>

                                                                                   Fiscal Years
 ------------------------------------------------------------------------------------------------------------------
                                                                     2005             2004             2003
 ------------------------------------------------------------------------------------------------------------------

<S>                                                                 <C>              <C>              <C>
 Sales.........................................................      100.0%           100.0%           100.0%
 Costs and expenses:
    Cost of sales:
      Food and beverage........................................       30.2             30.5             31.1
      Restaurant labor.........................................       32.1             32.0             31.9
      Restaurant expenses......................................       15.3             15.5             15.3
                                                                    ------           ------           ------
        Total cost of sales, excluding restaurant depreciation
           and amortization of 3.8%, 3.9% and 3.8%,                   77.6%            78.0%            78.3%
           respectively........................................
    Selling, general and administrative........................        9.5              9.4              9.3
    Depreciation and amortization..............................        4.0              4.2              4.1
    Interest, net..............................................        0.8              0.9              0.9
    Asset impairment and restructuring charges, net............        0.1              0.9              0.1
                                                                    ------           ------           ------
              Total costs and expenses.........................       92.0%            93.4%            92.7%
                                                                    ------           ------           ------

 Earnings before income taxes..................................        8.0              6.6              7.3
 Income taxes..................................................        2.5              2.1              2.4
                                                                    ------           ------           ------

 Net earnings..................................................        5.5%             4.5%             4.9%
                                                                    ======           ======           ======

 ------------------------------------------------------------------------------------------------------------------
</TABLE>

SALES

Sales were $5.28 billion in fiscal 2005,  $5.00 billion in fiscal 2004 and $4.65
billion in fiscal  2003.  The 5.5  percent  increase in  company-wide  sales for
fiscal 2005 was primarily due to a net increase of 56 company-owned  restaurants
compared to fiscal 2004 and  same-restaurant  sales  increases at Olive  Garden.
These sales increases were partially offset by the additional  operating week in
fiscal 2004. After reducing fiscal 2004 sales by the $90 million  contributed by
the additional  operating  week,  sales would have been $4.91 billion for fiscal
2004 on a 52-week basis, resulting in a 7.4 percent increase in fiscal 2005.

Red Lobster sales were $2.44  billion in both fiscal 2005 and fiscal 2004.  U.S.
same-restaurant sales for Red Lobster increased 0.9 percent (on a 52-week basis)
due to a 1.9 percent increase in average check offset partially by a 1.0 percent
decrease in  same-restaurant  guest counts.  Average annual sales per restaurant
for Red Lobster were $3.6 million in fiscal 2005.

Olive  Garden  sales of $2.40  billion  were 8.5 percent  above last year.  U.S.
same-restaurant  sales for Olive  Garden  increased  7.2  percent  (on a 52-week
basis) due to a 5.3 percent increase in  same-restaurant  guest counts and a 1.9
percent increase in average check. Average annual sales per restaurant for Olive
Garden were $4.4 million in fiscal 2005. Olive Garden has enjoyed 43 consecutive
quarters of U.S. same-restaurant sales increases.

Bahama  Breeze  sales  of  $164  million  were  7.2  percent  below  last  year.
Same-restaurant  sales for Bahama  Breeze  decreased  1.6  percent (on a 52-week
basis)  for  fiscal  2005.  Bahama  Breeze  also had six  fewer  restaurants  in
operation  during fiscal 2005.  Average  annual sales per  restaurant for Bahama
Breeze were $5.1 million in fiscal 2005.

Smokey  Bones  sales  of  $269  million  were  54.6  percent  above  last  year.
Same-restaurant  sales for Smokey  Bones  increased  1.1  percent  (on a 52-week
basis) for fiscal 2005.  Average annual sales per restaurant  were $3.1 million,
with  appreciable  variation by region.  Smokey Bones opened 35 new  restaurants
during fiscal 2005.

                                       3
<PAGE>


The 7.5 percent  increase in  company-wide  sales for fiscal 2004 versus  fiscal
2003  was  primarily  due  to a net  increase  of 54  company-owned  restaurants
compared to fiscal 2003, same-restaurant sales increases at Olive Garden and the
additional  operating week in fiscal 2004.  After reducing  fiscal 2004 sales by
the $90  million  contributed  by the  additional  operating  week,  total sales
increased 5.5 percent from fiscal 2003.  These sales  increases  were  partially
offset  by  decreased  U.S.  same-restaurant  sales at Red  Lobster.  While  Red
Lobster's  sales of $2.44 billion were 0.1 percent  above fiscal 2003,  its U.S.
same-restaurant  sales  decreased 3.5 percent (on a 52-week  basis) due to a 6.5
percent  decrease in  same-restaurant  guest counts,  partially  offset by a 3.0
percent  increase in average check.  Average annual sales per restaurant for Red
Lobster  were $3.6  million in fiscal 2004 (on a 52-week  basis).  Olive  Garden
sales of $2.21 billion were 11.1 percent above fiscal 2003. U.S. same-restaurant
sales for Olive Garden  increased 4.6 percent (on a 52-week  basis) due to a 3.0
percent increase in average check and a 1.6 percent increase in  same-restaurant
guest counts.  Average  annual sales per  restaurant  for Olive Garden were $4.1
million in fiscal 2004 (on a 52-week basis). Bahama Breeze sales of $176 million
were 28 percent above fiscal 2003.  Bahama  Breeze  opened four new  restaurants
during fiscal 2004,  including its new prototype  restaurant in Pittsburgh,  PA.
Bahama Breeze also closed six  restaurants  during the fourth  quarter of fiscal
2004 as a result of a comprehensive analysis performed during the fourth quarter
of  fiscal   2004  that   examined   restaurants   not   meeting   our   minimum
return-on-investment   thresholds  and  certain  other   operating   performance
criteria.  Average  annual  sales  per  restaurant  (excluding  the  six  closed
restaurants) were $5.2 million (on a 52-week basis).  Smokey Bones sales of $174
million were 87 percent  higher in fiscal 2004 than in fiscal 2003,  its average
annual sales per restaurant were $3.2 million (on a 52-week basis) and it opened
30 new restaurants during fiscal 2004.

COSTS AND EXPENSES

Total costs and expenses  were $4.85  billion in fiscal 2005,  $4.67  billion in
fiscal 2004 and $4.32 billion in fiscal 2003. Total costs and expenses in fiscal
2005 were 92.0 percent of sales, a decrease from 93.4 percent of sales in fiscal
2004 and 92.7 percent of sales in fiscal 2003.

Food and  beverage  costs  increased  $67 million,  or 4.4  percent,  from $1.53
billion to $1.59  billion  in fiscal  2005  compared  to fiscal  2004.  Food and
beverage  costs  increased  $78 million,  or 5.4 percent,  from $1.45 billion to
$1.53  billion in fiscal 2004  compared to fiscal  2003.  As a percent of sales,
food and beverage  costs  decreased from the prior year in fiscal 2005 primarily
as a result  of  favorable  changes  in  promotional  and menu mix of sales  and
pricing changes,  which were partially offset by higher dairy, beef, chicken and
seafood costs. As a percent of sales, food and beverage costs decreased from the
prior year in fiscal 2004 primarily as a result of pricing changes and favorable
changes in  promotional  and menu mix of sales,  which was  partially  offset by
higher seafood costs and by crab usage and additional  plate  accompaniments  at
Red Lobster during its crab promotion in the first quarter of fiscal 2004. Other
commodity costs, such as chicken and shrimp, decreased modestly in fiscal 2004.

Restaurant  labor increased $95 million,  or 5.9 percent,  from $1.60 billion to
$1.70 billion in fiscal 2005 compared to fiscal 2004. Restaurant labor increased
$116 million, or 7.8 percent, from $1.49 billion to $1.60 billion in fiscal 2004
compared to fiscal 2003. As a percent of sales,  restaurant  labor  increased in
fiscal 2005 primarily as a result of a modest  increase in wage rates and higher
manager  bonuses at Olive Garden and Red Lobster as a result of their  increased
operating  performance in fiscal 2005.  These factors were only partially offset
by the  favorable  impact  of  higher  sales  volumes.  As a  percent  of sales,
restaurant labor increased in fiscal 2004 from fiscal 2003 primarily as a result
of a modest  increase in wage rates at Red  Lobster and Olive  Garden and higher
manager  bonuses  at  Olive  Garden  as a  result  of  its  increased  operating
performance  in fiscal 2004.  These  factors were only  partially  offset by the
favorable  impact of higher sales volumes and lower health  insurance costs as a
result of fewer claims.

Restaurant  expenses (which include lease,  property tax, credit card,  utility,
workers'   compensation,   insurance,   new  restaurant  pre-opening  and  other
restaurant-level operating expenses) increased $31 million, or 4.1 percent, from
$775 million to $806 million in fiscal 2005 compared to fiscal 2004.  Restaurant
expenses  increased  $61  million,  or 8.6  percent,  from $714  million to $775
million  in  fiscal  2004  compared  to  fiscal  2003.  As a  percent  of sales,
restaurant  expenses  decreased  in  fiscal  2005  primarily  due  to  decreased
insurance,  workers'  compensation and new restaurant  pre-opening  costs, which
were partially offset by increased  utility expenses and repairs and maintenance
expenses.  Restaurant  expenses  were also  favorably  impacted by higher  sales
volumes.  As a percent of sales,  restaurant  expenses  increased in fiscal 2004
from fiscal 2003  primarily  due to increased  utility,  workers'  compensation,
insurance and new restaurant  pre-opening  costs. These cost increases were only
partially offset by the favorable impact of higher sales volumes in fiscal 2004.

Selling,  general and  administrative  expenses  increased  $25 million,  or 5.4
percent,  from $472  million to $497  million in fiscal 2005  compared to fiscal
2004. Selling, general and administrative expenses increased $40 million,

                                       4
<PAGE>

or 9.4 percent,  from $432  million to $472  million in fiscal 2004  compared to
fiscal 2003. As a percent of sales, selling, general and administrative expenses
increased in fiscal 2005 primarily as a result of increased  bonus costs,  which
were partially offset by decreased  marketing expenses as a percent of sales and
the favorable  impact of higher sales volumes.  As a percent of sales,  selling,
general and  administrative  expenses  increased in fiscal 2004 from fiscal 2003
primarily due to increased employee benefit costs, an increased  contribution to
the Darden  Restaurants,  Inc.  Foundation and an increase in litigation related
costs,  which were only partially offset by the favorable impact of higher sales
volumes.

Depreciation and amortization expense increased $3 million, or 1.5 percent, from
$210  million  to  $213  million  in  fiscal  2005   compared  to  fiscal  2004.
Depreciation and  amortization  expense  increased $19 million,  or 9.8 percent,
from $191 million to $210 million in fiscal 2004  compared to fiscal 2003.  As a
percent  of sales,  depreciation  and  amortization  decreased  in  fiscal  2005
primarily  as  a  result  of  the  continued  use  of  fully  depreciated,  well
maintained,  equipment and the favorable  impact of higher sales volumes,  which
were only  partially  offset by new  restaurant  and  remodel  activities.  This
benefit was only partially  offset by increased  repairs and  maintenance  costs
incurred in fiscal 2005. As a percent of sales,  depreciation  and  amortization
increased  in fiscal 2004  primarily as a result of new  restaurant  and remodel
activities,  which were only partially  offset by the favorable impact of higher
sales volumes.

Net interest expense decreased $1 million,  or 1.2 percent,  from $44 million to
$43  million in fiscal  2005  compared  to fiscal  2004.  Net  interest  expense
increased $1 million, or 2.5 percent,  from $43 million to $44 million in fiscal
2004  compared  to fiscal  2003.  As a percent of sales,  net  interest  expense
decreased  in fiscal 2005  primarily  as a result of higher  interest  income in
fiscal 2005 and the favorable  impact of higher sales  volumes.  As a percent of
sales,  net  interest  expense in fiscal  2004 was  comparable  to fiscal  2003,
reflecting lower interest income in fiscal 2004,  offset by the favorable impact
of higher sales volumes.

During fiscal 2005, 2004 and 2003, we recognized asset impairment charges in the
amount of $1 million,  $6 million and $5 million,  respectively,  related to the
relocation  and  rebuilding of certain  restaurants.  Asset  impairment  credits
related  to the sale of assets  that were  previously  impaired  amounted  to $3
million, $1 million and $1 million in fiscal 2005, 2004 and 2003,  respectively.
During fiscal 2005, we also recorded charges of $6 million for the write-down of
carrying value of two Olive Garden  restaurants,  one Red Lobster restaurant and
one Smokey Bones  restaurant.  The Smokey Bones restaurant was closed subsequent
to fiscal  2005 while the two Olive  Gardens and one Red  Lobster  continued  to
operate.

In addition to the asset impairment  charges described above,  during the fourth
quarter of fiscal  2004,  we recorded a $36.5  million  pre-tax  ($22.4  million
after-tax) charge for long-lived asset  impairments  associated with the closing
of six Bahama Breeze  restaurants  and the  write-down of the carrying  value of
four other Bahama Breeze  restaurants,  one Olive Garden  restaurant and one Red
Lobster restaurant,  which continued to operate. We also recorded a $1.1 million
pre-tax ($0.7  million  after-tax)  restructuring  charge  primarily  related to
severance  payments  made  to  certain  restaurant   employees  and  exit  costs
associated with the closing of the six Bahama Breeze restaurants.  During fiscal
2004, certain changes were made at Bahama Breeze to improve its sales, financial
performance and overall long-term potential,  including the addition of lunch at
most  restaurants  and  introduction of a new dinner menu. The decision to close
certain  Bahama Breeze  restaurants  and write down the carrying value of others
was based on our on-going  review of each  individual  restaurant's  performance
against our expectations and the restaurant's ability to successfully  implement
these changes. Based on our review of the other 28 Bahama Breeze restaurants, we
believe their locations and ability to execute these and future initiatives will
reduce the likelihood that additional  impairment charges will be required.  The
write-down  of the  carrying  value of one Olive Garden  restaurant  and one Red
Lobster restaurant was a result of less-than-optimal locations. We will continue
to evaluate all of our locations to minimize the risk of future asset impairment
charges.

INCOME TAXES

The effective income tax rates for fiscal 2005, 2004 and 2003 were 31.4 percent,
31.7 percent and 33.1  percent,  respectively.  The rate decrease in fiscal 2005
and fiscal 2004 was  primarily a result of favorable  resolutions  of prior year
tax matters and an increase in FICA tax credits for employee-reported tips.


                                       5
<PAGE>


NET EARNINGS AND NET EARNINGS PER SHARE

Net  earnings  for  fiscal  2005 were $291  million  ($1.78 per  diluted  share)
compared  with net earnings  for fiscal 2004 of $227 million  ($1.34 per diluted
share) and net  earnings  for fiscal  2003 of $226  million  ($1.27 per  diluted
share).

Net earnings for fiscal 2005 increased 27.9 percent and diluted net earnings per
share  increased  32.8  percent  compared to fiscal  2004.  The  increase in net
earnings and diluted net earnings per share were  primarily  due to decreases in
food and beverage costs,  restaurant  expenses and depreciation and amortization
expenses as a percent of sales, which were only partially offset by increases in
restaurant labor expenses and selling,  general and administrative expenses as a
percent of sales. Fiscal 2004 net earnings were also impacted by the $38 million
pre-tax ($23 million  after-tax)  asset  impairment  and  restructuring  charges
recognized related to the closing of six Bahama Breeze restaurants and the write
down of another four Bahama Breeze restaurants,  one Olive Garden restaurant and
one Red Lobster  restaurant.  The increase in diluted net earnings per share was
also due to a reduction in the average  diluted shares  outstanding  from fiscal
2004 to fiscal 2005  primarily as a result of our  continuing  repurchase of our
common stock.


Net earnings for fiscal 2004  increased 0.5 percent and diluted net earnings per
share  increased  5.5  percent  compared  to fiscal  2003.  The  increase in net
earnings was primarily due to decreases in food and beverage  costs as a percent
of sales, which were largely offset by increases in restaurant labor, restaurant
expenses,  selling,  general and  administrative  expenses and  depreciation and
amortization  expense  as a  percent  of  sales  and the  asset  impairment  and
restructuring  charges  recognized  during fiscal 2004 related to the closing of
six Bahama  Breeze  restaurants  and write down of another  four  Bahama  Breeze
restaurants,  one Olive Garden  restaurant and one Red Lobster  restaurant.  The
increase in diluted net earnings  per share is  primarily  due to a reduction in
the average diluted shares outstanding from fiscal 2003 to fiscal 2004 primarily
as a result of our continuing repurchase of our common stock.

SEASONALITY

Our sales  volumes  fluctuate  seasonally.  During  fiscal 2005,  our sales were
highest in the spring and  winter,  followed  by the  summer,  and lowest in the
fall. During fiscal 2004 and 2003, our sales were highest in the spring,  lowest
in the fall, and comparable during winter and summer.  Holidays,  severe weather
and similar  conditions  may impact sales volumes  seasonally in some  operating
regions. Because of the seasonality of our business, results for any quarter are
not  necessarily  indicative  of the results  that may be achieved  for the full
fiscal year.

IMPACT OF INFLATION

We do not believe  inflation had a significant  overall effect on our operations
during fiscal 2005, 2004 and 2003. We believe we have  historically been able to
pass on  increased  operating  costs  through  menu  price  increases  and other
strategies.

CRITICAL ACCOUNTING POLICIES

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 expenses during the reporting  period.  Actual results could differ
from those estimates.

Critical accounting policies are those we believe are both most important to the
portrayal of our financial  condition and operating results and require our most
difficult,  subjective  or complex  judgments,  often as a result of the need to
make  estimates  about the  effect of  matters  that are  inherently  uncertain.
Judgments and  uncertainties  affecting the  application  of those  policies may
result in materially different amounts being reported under different conditions
or using different  assumptions.  We consider the following  policies to be most
critical in  understanding  the  judgments  that are involved in  preparing  our
consolidated financial statements.


                                       6
<PAGE>



Land, Buildings and Equipment

Land,   buildings  and   equipment   are  recorded  at  cost  less   accumulated
depreciation.  Building  components are depreciated  over estimated useful lives
ranging  from  seven to 40  years  using  the  straight-line  method.  Leasehold
improvements,  which  are  reflected  on our  consolidated  balance  sheets as a
component of  buildings,  are  amortized  over the lesser of the expected  lease
term,  including cancelable option periods, or the estimated useful lives of the
related assets using the  straight-line  method.  Equipment is depreciated  over
estimated   useful  lives  ranging  from  two  to  10  years,   also  using  the
straight-line  method.  Accelerated  depreciation methods are generally used for
income tax purposes.

Our accounting  policies  regarding  land,  buildings and  equipment,  including
leasehold  improvements,  include our judgments  regarding the estimated  useful
lives of these assets,  the residual  values to which the assets are depreciated
or amortized,  the determination of what constitutes expected lease term and the
determination  as to what  constitutes  enhancing the value of or increasing the
life of existing  assets.  These judgments and estimates may produce  materially
different amounts of reported depreciation and amortization expense if different
assumptions  were used. As discussed  further  below,  these  judgments may also
impact our need to recognize  an  impairment  charge on the  carrying  amount of
these assets as the cash flows associated with the assets are realized.

Leases

We are obligated  under various lease  agreements  for certain  restaurants.  We
recognize  rent expense on a  straight-line  basis over the expected lease term,
including cancelable option periods as described below. Within the provisions of
certain of our leases,  there are rent holidays  and/or  escalations in payments
over the base  lease  term,  as well as  renewal  periods.  The  effects  of the
holidays and escalations  have been reflected in rent expense on a straight-line
basis over the expected  lease term,  which includes  cancelable  option periods
when it is deemed  to be  reasonably  assured  that we would  incur an  economic
penalty for not exercising the option. The lease term commences on the date when
we have the right to control the use of the leased property,  which is typically
before rent  payments  are due under the terms of the lease.  Many of our leases
have renewal  periods  totaling five to 20 years,  exercisable at our option and
require payment of property taxes,  insurance and maintenance  costs in addition
to the rent payments.  The consolidated  financial  statements  reflect the same
lease term for amortizing leasehold  improvements as we use to determine capital
versus operating lease  classifications  and in calculating  straight-line  rent
expense for each  restaurant.  Percentage  rent expense is generally  based upon
sales  levels  and is  accrued  at the  point  in time we  determine  that it is
probable that such sales levels will be achieved.

Our  judgments  related  to the  probable  term for each  restaurant  affect the
classification  and accounting for leases as capital versus operating,  the rent
holidays and  escalation  in payments  that are included in the  calculation  of
straight-line  rent and the term  over  which  leasehold  improvements  for each
restaurant  facility  are  amortized.  These  judgments  may produce  materially
different  amounts of depreciation,  amortization and rent expense than would be
reported if different assumed lease terms were used.

Impairment of Long-Lived Assets

Land,  buildings and equipment and certain other assets,  including  capitalized
software costs and liquor licenses,  are reviewed for impairment whenever events
or changes in  circumstances  indicate that the carrying  amount of an asset may
not be recoverable.  Recoverability of assets to be held and used is measured by
a comparison of the carrying amount of the assets to the future undiscounted net
cash flows expected to be generated by the assets.  Identifiable  cash flows are
measured at the lowest level for which they are largely  independent of the cash
flows of other groups of assets and  liabilities,  generally  at the  restaurant
level.  If these assets are determined to be impaired,  the amount of impairment
recognized  is the amount by which the  carrying  amount of the  assets  exceeds
their fair value.  Fair value is generally  determined  by  appraisals  or sales
prices of  comparable  assets.  Restaurant  sites and certain other assets to be
disposed of are  reported at the lower of their  carrying  amount or fair value,
less estimated  costs to sell.  Restaurant  sites and certain other assets to be
disposed of are included in assets held for sale when certain  criteria are met.
These criteria include the requirement that the likelihood of disposing of these
assets within one year is probable. Assets whose disposal is not probable within
one year  remain in land,  buildings  and  equipment  until  their  disposal  is
probable within one year.

                                       7
<PAGE>

The judgments we make related to the expected useful lives of long-lived  assets
and our  ability to realize  undiscounted  cash flows in excess of the  carrying
amounts of these assets are affected by factors such as the ongoing  maintenance
and  improvements of the assets,  changes in economic  conditions and changes in
usage or operating performance. As we assess the ongoing expected cash flows and
carrying amounts of our long-lived assets,  significant adverse changes in these
factors could cause us to realize a material  impairment  charge.  In the fourth
quarter of fiscal 2004, we recognized  asset  impairment  charges of $37 million
($23 million after-tax) for the closing of six Bahama Breeze restaurants and the
write-down of four other Bahama Breeze restaurants,  one Olive Garden restaurant
and one Red Lobster  restaurant  based on an  evaluation of expected cash flows.
During  fiscal 2005, we recognized  asset  impairment  charges of $6 million ($4
million after-tax) for the write-down of two Olive Garden  restaurants,  one Red
Lobster  restaurant  and one Smokey Bones  restaurant  based on an evaluation of
expected cash flows. The Smokey Bones restaurant was closed subsequent to fiscal
2005  while the two Olive  Garden  restaurants  and one Red  Lobster  restaurant
continued to operate.

Insurance Accruals

Through the use of insurance program deductibles and self-insurance, we retain a
significant portion of expected losses under our workers' compensation, employee
medical  and  general  liability  programs.  However,  we  carry  insurance  for
individual claims that generally exceed $0.25 million for workers'  compensation
and general  liability claims.  Accrued  liabilities have been recorded based on
our  estimates  of the  anticipated  ultimate  costs to settle all claims,  both
reported and not yet reported.

Our accounting policies regarding these insurance programs include our judgments
and  independent  actuarial  assumptions  regarding  economic  conditions,   the
frequency  or  severity  of claims  and  claim  development  patterns  and claim
reserve,  management and settlement  practices.  Unanticipated  changes in these
factors may produce materially different amounts of reported expense under these
programs.

Income Taxes

We  estimate  certain  components  of our  provision  for  income  taxes.  These
estimates  include,  among other items,  depreciation and  amortization  expense
allowable for tax  purposes,  allowable tax credits for items such as taxes paid
on reported  employee  tip income,  effective  rates for state and local  income
taxes and the tax deductibility of certain other items.

Our estimates are based on the best  available  information  at the time that we
prepare the provision.  We generally file our annual income tax returns  several
months  after our fiscal  year-end.  Income tax  returns are subject to audit by
federal,  state and local  governments,  generally  years  after the returns are
filed.  These  returns  could be subject to material  adjustments  or  differing
interpretations of the tax laws.

LIQUIDITY AND CAPITAL RESOURCES

Cash flows  generated  from operating  activities  provide us with a significant
source of liquidity,  which we use to finance the  purchases of land,  buildings
and equipment and to repurchase shares of our common stock. Since  substantially
all our  sales  are for cash and  cash  equivalents  and  accounts  payable  are
generally due in five to 30 days, we are able to carry  current  liabilities  in
excess of current assets.  In addition to cash flows from  operations,  we use a
combination of long-term and short-term borrowings to fund our capital needs.

We manage our business and our financial  ratios to maintain an investment grade
bond rating,  which allows  flexible  access to financing at  reasonable  costs.
Currently,  our publicly issued long-term debt carries "Baa1" (Moody's Investors
Service),  "BBB+" (Standard & Poor's) and "BBB+" (Fitch) ratings. Our commercial
paper has  ratings of "P-2"  (Moody's  Investors  Service),  "A-2"  (Standard  &
Poor's)  and "F-2"  (Fitch).  These  ratings  are as of the date of this  annual
report and have been  obtained  with the  understanding  that Moody's  Investors
Service,  Standard & Poor's and Fitch will  continue  to monitor  our credit and
make future  adjustments to these ratings to the extent  warranted.  The ratings
may be changed, superseded, or withdrawn at any time.

Our commercial paper program is our primary source of short-term  financing.  At
May 29, 2005, there were no borrowings outstanding under the program. To support
our commercial paper program, we have a credit facility under a Credit Agreement
dated  October 17,  2003,  as amended,  with a  consortium  of banks,  including
Wachovia Bank, N.A., as  administrative  agent,  under which we can borrow up to
$400 million. The credit facility allows us to borrow at interest rates based on
a spread  over (i)  LIBOR or (ii) a base  rate  that is the  higher of the prime
rate,  or

                                       8
<PAGE>

one-half  of one  percent  above the federal  funds  rate,  at our  option.  The
interest  rate spread over LIBOR is  determined  by our debt rating.  The credit
facility expires on October 17, 2008 and contains various restrictive covenants,
including a leverage test that  requires us to maintain a ratio of  consolidated
total debt to consolidated total  capitalization of less than 0.55 to 1.00 and a
limitation of $25 million on priority debt, subject to certain  exceptions.  The
credit  facility does not,  however,  contain a prohibition  on borrowing in the
event of a ratings  downgrade or a "material  adverse change," as defined in the
Credit  Agreement.  None of these covenants are expected to impact our liquidity
or capital resources.  At May 29, 2005, we were in compliance with all covenants
under the Credit Agreement.

At May 29, 2005, our long-term debt consisted  principally  of: (1) $150 million
of unsecured 5.75 percent  medium-term  notes due in March 2007, (2) $75 million
of unsecured 7.45 percent  medium-term notes due in April 2011, (3) $100 million
of unsecured 7.125 percent debentures due in February 2016 and (4) an unsecured,
variable rate $27 million commercial bank loan due in December 2018 that is used
to support two loans from us to the Employee Stock Ownership Plan portion of the
Darden Savings Plan. We also have $150 million of unsecured 8.375 percent senior
notes due in September  2005 and $150 million of unsecured  6.375  percent notes
due in February  2006  included in current  liabilities,  which we plan to repay
through the  issuance of unsecured  debt  securities  in fiscal 2006.  Through a
shelf registration on file with the Securities and Exchange Commission (SEC), we
may issue up to an additional  $125 million of unsecured  debt  securities  from
time to time. The debt  securities may bear interest at either fixed or floating
rates and may have maturity dates of nine months or more after issuance.

A summary of our contractual  obligations and commercial  commitments at May 29,
2005, is as follows (in thousands):
<TABLE>
<CAPTION>

---------------------------- -----------------------------------------------------------------------------------------

                                                              Payments Due by Period
---------------------------- -----------------------------------------------------------------------------------------
        Contractual                              Less than             1-3               3-5           More than 5
        Obligations               Total            1 Year             Years             Years             Years
---------------------------- ---------------- ----------------- ------------------ ----------------- -----------------
<S>                           <C>                <C>              <C>               <C>                <C>
Long-term debt (1)            $   799,260         $338,025          $185,396          $  26,163          $249,676
---------------------------- ---------------- ----------------- ------------------ ----------------- -----------------
Operating leases                  419,543           68,301           119,710             88,464           143,068
---------------------------- ---------------- ----------------- ------------------ ----------------- -----------------
Purchase obligations(2)           579,008          562,930            14,492              1,586                --
---------------------------- ---------------- ----------------- ------------------ ----------------- -----------------
Benefit obligations (3)           160,178           13,407            28,061             30,345            88,365
---------------------------- ---------------- ----------------- ------------------ ----------------- -----------------
Total contractual
      obligations              $1,957,989         $982,663          $347,659           $146,558          $481,109
---------------------------- ---------------- ----------------- ------------------ ----------------- -----------------
</TABLE>

<TABLE>
<CAPTION>
-------------------------- -------------------------------------------------------------------------------------------

                                                   Amount of Commitment Expiration per Period
-------------------------- -------------------------------------------------------------------------------------------
                           Total Amounts
    Other Commercial         Committed         Less than             1-3               3-5            More than 5
       Commitments                              1 Year              Years             Years              Years
-------------------------- --------------- ------------------ ------------------ ----------------- -------------------
<S>                           <C>              <C>                 <C>                  <C>               <C>
Standby letters of
     credit (4)                 $86,506         $86,506               $ --               $ --              $ --
-------------------------- --------------- ------------------ ------------------ ----------------- -------------------
Guarantees (5)                    1,768             499                719                345               205
-------------------------- --------------- ------------------ ------------------ ----------------- -------------------
Total commercial
     commitments                $88,274         $87,005               $719               $345              $205
-------------------------- --------------- ------------------ ------------------ ----------------- -------------------
<FN>

1)   Includes  interest  payments   associated  with  existing  long-term  debt,
     including the current portion.  Variable-rate  interest payments associated
     with the ESOP loan were  estimated  based on the interest rate in effect at
     May 29, 2005 (3.42 percent). Excludes issuance discount of $763.
2)   Includes  commitments  for food and beverage  items and  supplies,  capital
     projects and other miscellaneous commitments.
3)   Includes  expected  payments  associated  with our defined  benefit  plans,
     postretirement  benefit plan and our  non-qualified  deferred  compensation
     plan through fiscal 2015.
4)   Includes letters of credit for $72,677 of workers' compensation and general
     liabilities accrued in our consolidated financial statements; also includes
     letters of credit  for $4,495 of lease  payments  included  in  contractual
     operating lease obligation payments noted above.
5)   Consists solely of guarantees  associated with leased  properties that have
     been  assigned to third  parties.  We are not aware of any  non-performance
     under  these  arrangements  that  would  result in us having to  perform in
     accordance with the terms of the guarantees.
</FN>
</TABLE>
                                       9
<PAGE>


As disclosed in Exhibit 12 to this Form 10-K, our  fixed-charge  coverage ratio,
which  measures  the number of times each year that we earn  enough to cover our
fixed  charges,  amounted to 6.8 times and 5.7 times for the fiscal  years ended
May 29, 2005 and May 30, 2004, respectively. Our adjusted debt to adjusted total
capital  ratio (which  includes 6.25 times the total annual  restaurant  minimum
rent ($62.1  million and $56.5  million for the fiscal  years ended May 29, 2005
and May 30,  2004,  respectively)  and 3.00  times the total  annual  restaurant
equipment minimum rent ($0.0 million and $0.1 million for the fiscal years ended
May 29, 2005 and May 30, 2004,  respectively) as components of adjusted debt and
adjusted  total  capital)  was 45 percent and 46 percent at May 29, 2005 and May
30, 2004, respectively. We use the lease-debt equivalent in our adjusted debt to
adjusted total capital ratio as we believe its inclusion  better  represents the
optimal capital structure that we target from period to period.

Based on these  ratios,  we believe  our  financial  condition  is  strong.  The
composition of our capital structure is shown in the following table.


 (In millions, except ratios)                     May 29, 2005      May 30, 2004
 -------------------------------------------------------------------------------

 CAPITAL STRUCTURE
 -------------------------------------------------------------------------------
 Short-term debt                                $      --              $     15
 Current portion of long-term debt                    300                    --
 Long-term debt                                       350                   653
 Stockholders' equity                               1,273                 1,175
 -------------------------------------------------------------------------------
 Total capital                                  $   1,923              $  1,843
 ===============================================================================
 ADJUSTMENTS TO CAPITAL
 -------------------------------------------------------------------------------
 Short-term debt                                $      --              $     15
 Current portion of long-term debt                    300                    --
 Long-term debt                                       350                   653
 Lease-debt equivalent                                385                   353
 -------------------------------------------------------------------------------
 Adjusted debt                                  $   1,035              $  1,021
 Stockholders' equity                               1,273                 1,175
 -------------------------------------------------------------------------------
 Adjusted total capital                         $   2,308              $  2,196
 ===============================================================================
 CAPITAL STRUCTURE RATIOS
 -------------------------------------------------------------------------------
 Debt to total capital ratio                           34%                   36%
 Adjusted debt to adjusted total capital ratio         45%                   46%
 ===============================================================================

Net cash flows provided by operating activities were $583 million,  $525 million
and $509 million in fiscal  2005,  2004 and 2003,  respectively.  Net cash flows
provided by  operating  activities  include net earnings of $291  million,  $227
million and $226 million in fiscal  2005,  2004 and 2003,  respectively.  Fiscal
2004 net earnings  included a $36.5 million  pre-tax ($22.4  million  after-tax)
charge for  long-lived  asset  impairments  associated  with the  closing of six
Bahama Breeze restaurants and the write-down of the carrying value of four other
Bahama  Breeze  restaurants,  one Olive  Garden  restaurant  and one Red Lobster
restaurant,  which  continued to operate.  Net cash flows  provided by operating
activities also reflect income tax payments of $111 million, $92 million and $65
million  in  fiscal  2005,  2004 and 2003,  respectively.  The  increase  in tax
payments in fiscal 2005 and 2004 resulted primarily from accelerated  deductions
allowable for  depreciation of certain  capital  expenditures in fiscal 2004 and
2003,  which  lowered  our income tax  payments  in those  fiscal  years.  These
accelerated  deductions were allowable for only a portion of fiscal 2005 capital
expenditures.   In  fiscal  2005,  however,  the  impact  of  the  reduction  in
accelerated  depreciation  deductions  was  partially  offset by an  increase in
income tax benefits associated with the exercise of employee stock options.

Net cash flows used in financing activities were $264 million,  $194 million and
$193 million in fiscal 2005, 2004 and 2003, respectively. Net cash flows used in
financing  activities  included our  repurchase  of 11.3  million  shares of our
common stock for $312 million in fiscal  2005,  compared to 10.7 million  shares
for $235  million in fiscal  2004 and 10.7  million  shares for $213  million in
fiscal 2003.  Our Board of Directors has authorized us to repurchase up to 137.4
million  shares of our common  stock.  At May 29, 2005 a total of 120.6  million
shares have been repurchased  under the  authorization.  The repurchased  common
stock is reflected as a reduction of stockholders'  equity. We received proceeds
from the  issuance of common  stock upon the  exercise  of stock  options of $75
million,

                                       10
<PAGE>

$40 million and $34 million in fiscal  2005,  2004 and 2003,  respectively.  Net
cash  flows  used  in  financing  activities  also  included  dividends  paid to
stockholders  of $13 million,  $13 million and $14 million in fiscal 2005,  2004
and 2003, respectively.

Net cash flows used in investing activities were $313 million,  $343 million and
$420 million in fiscal 2005, 2004 and 2003, respectively. Net cash flows used in
investing  activities  included capital  expenditures  incurred  principally for
building  new   restaurants,   replacing   equipment  and  remodeling   existing
restaurants.  Capital expenditures were $329 million in fiscal 2005, compared to
$354  million in fiscal  2004 and $423  million in fiscal  2003.  The  decreased
expenditures in fiscal 2005 and 2004 resulted  primarily from decreased spending
associated with building fewer new  restaurants and fewer remodels.  We estimate
that our fiscal 2006 capital  expenditures will approximate $350 million to $375
million.

Net cash flows  provided by operating  activities for fiscal 2003 included a $20
million  contribution to our defined  benefit  pension plans,  which enabled the
plans to  maintain a fully  funded  status as of the plans'  February  28,  2003
annual  valuation  date.  Approximately  $0.1  million was  required to fund our
defined  benefit  pension  plans in fiscal  2005 and fiscal  2004.  Our  defined
benefit and other  postretirement  benefit costs and  liabilities are calculated
using various  actuarial  assumptions  and  methodologies  prescribed  under the
Financial  Accounting Standards Board's (FASB) Statement of Financial Accounting
Standards  (SFAS) No. 87,  "Employers'  Accounting  for  Pensions"  and No. 106,
"Employers' Accounting for Postretirement  Benefits Other Than Pensions". We use
certain assumptions  including,  but not limited to, the selection of a discount
rate,  expected long-term rate of return on plan assets and expected health care
cost trend rates. We set the discount rate assumption  annually for each plan at
its  valuation  date to  reflect  the yield of high  quality  fixed-income  debt
instruments,  with lives that approximate the maturity of the plan benefits.  At
May 29, 2005, our discount rate was 5.75 percent. The expected long-term rate of
return on plan assets and health  care cost trend  rates are based upon  several
factors,  including our historical  assumptions compared with actual results, an
analysis  of  current  market  conditions,  asset  allocations  and the views of
leading financial  advisers and economists.  Based on our analysis during fiscal
2003, we lowered our defined benefit plans' expected long-term rate of return on
plan assets for fiscal 2004 from 10.4 percent to 9.0 percent.  The change in our
defined  benefit  plans'  expected  long-term  rate of  return  on  plan  assets
decreased  earnings  before income taxes by  approximately  $2 million in fiscal
2004.  At May 29, 2005,  our  expected  health care cost trend rates ranged from
11.0 percent to 12.0 percent for fiscal 2006,  depending on the medical  service
category.  The rates  gradually  decrease to 5.0 percent through fiscal 2011 and
remain at that level thereafter.

The  expected  long-term  rate of return  on plan  assets  component  of our net
periodic  benefit cost is calculated based on the  market-related  value of plan
assets.  Our target asset  allocation  is 35 percent U.S.  equities,  30 percent
high-quality,  long-duration  fixed-income securities,  15 percent international
equities, 10 percent private equities and 10 percent real assets. We monitor our
actual asset allocation to ensure that it approximates our target allocation and
believe that our long-term  asset  allocation  will continue to approximate  our
target  allocation.  Our  historical  ten-year  rate of return  on plan  assets,
calculated using the geometric method average of returns,  is approximately 10.9
percent as of May 29, 2005.

We have an  unrecognized  net actuarial  loss for the defined  benefit plans and
postretirement  benefit  plan as of May 29,  2005 of $59 million and $4 million,
respectively.  The  unrecognized  net actuarial loss  represents  changes in the
amount of the  projected  benefit  obligation  and plan  assets  resulting  from
differences in the assumptions used and actual  experience.  The amortization of
the  unrecognized  net actuarial  loss component of our fiscal 2006 net periodic
benefit cost for the defined  benefit plans and  postretirement  benefit plan is
expected to be approximately $5 million and $0.2 million, respectively.

We believe our defined benefit and  postretirement  benefit plan assumptions are
appropriate based upon the factors discussed above.  However,  other assumptions
could also be reasonably  applied that could differ from the assumptions used. A
quarter  percentage point change in the defined benefit plans' discount rate and
the expected  long-term rate of return on plan assets would increase or decrease
earnings before income taxes by $0.7 million and $0.4 million,  respectively.  A
quarter percentage point change in our postretirement benefit plan discount rate
would increase or decrease  earnings before income taxes by $0.1 million.  A one
percentage point increase in the health care cost trend rates would increase the
accumulated  postretirement  benefit  obligation (APBO) by $4 million at May 29,
2005 and the aggregate of the service cost and interest  cost  components of net
periodic  postretirement  benefit  cost by $0.6  million for fiscal  2005. A one
percentage point decrease in the health care cost trend rates

                                       11

<PAGE>


would  decrease the APBO by $3 million at May 29, 2005 and the  aggregate of the
service cost and interest cost components of net periodic postretirement benefit
cost by $0.5 million for fiscal 2005.  These  changes in  assumptions  would not
significantly impact our funding requirements.

We are not aware of any  trends or  events  that  would  materially  affect  our
capital requirements or liquidity. We believe that our internal  cash-generating
capabilities,  borrowings  available under our shelf  registration for unsecured
debt securities and short-term  commercial paper program should be sufficient to
finance our capital expenditures,  debt maturities, stock repurchase program and
other operating activities through fiscal 2006.

OFF-BALANCE SHEET ARRANGEMENTS

We are not a party to any  off-balance  sheet  arrangements  that  have,  or are
reasonably  likely to have, a current or future material effect on our financial
condition,  changes  in  financial  condition,  sales or  expenses,  results  of
operations, liquidity, capital expenditures or capital resources.

FINANCIAL CONDITION

Our total  current  assets were $407 million at May 29,  2005,  compared to $346
million at May 30,  2004.  The increase  resulted  primarily  from  increases in
inventories of $37 million that resulted from  opportunistic  product  purchases
made during fiscal 2005.

Our total current  liabilities  were $1.04 billion at May 29, 2005,  compared to
$0.68 billion at May 30, 2004. The increase in current  liabilities is primarily
due to the  reclassification  of the $150  million of  unsecured  8.375  percent
senior  notes due in  September  2005 and the $150  million of  unsecured  6.375
percent notes due in February 2006 from long-term  debt to current  liabilities.
Accounts  payable of $191 million at May 29, 2005  increased  from $175 million,
primarily due to the timing of our inventory and capital expenditures at the end
of fiscal  2005.  Other  current  liabilities  of $254  million at May 29,  2005
increased  from $228  million at May 30,  2004,  primarily  due to a $20 million
increase in liabilities  associated with our non-qualified deferred compensation
plan.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to a variety of market risks,  including fluctuations in interest
rates,  foreign currency  exchange rates,  compensation and commodity prices. To
manage this exposure, we periodically enter into interest rate, foreign currency
exchange,  equity  forwards  and  commodity  instruments  for other than trading
purposes (see Notes 1 and 9 of the Notes to Consolidated Financial Statements).

We use the  variance/covariance  method  to  measure  value at risk,  over  time
horizons ranging from one week to one year, at the 95 percent  confidence level.
At May 29, 2005,  our  potential  losses in future net earnings  resulting  from
changes in foreign currency exchange rate instruments, commodity instruments and
floating rate debt interest rate exposures were  approximately $6 million over a
period of one year  (including  the impact of the interest rate swap  agreements
discussed  in Note 9 of the Notes to  Consolidated  Financial  Statements).  The
value at risk from an increase in the fair value of all of our  long-term  fixed
rate debt, over a period of one year, was  approximately  $17 million.  The fair
value of our long-term fixed rate debt during fiscal 2005 averaged $668 million,
with a high of $677 million and a low of $655  million.  Our interest  rate risk
management objective is to limit the impact of interest rate changes on earnings
and cash flows by targeting an appropriate mix of variable and fixed rate debt.

FUTURE APPLICATION OF ACCOUNTING STANDARDS

In December 2004, the FASB issued SFAS No. 123 (Revised), "Share-Based Payment."
SFAS No. 123R revises SFAS No. 123,  "Accounting for  Stock-Based  Compensation"
and generally  requires the cost associated with employee  services  received in
exchange for an award of equity  instruments be measured based on the grant-date
fair value of the award and  recognized  in the  financial  statements  over the
period during which  employees  are required to provide  service in exchange for
the  award.  SFAS No.  123R  also  provides  guidance  on how to  determine  the
grant-date  fair value for awards of equity  instruments  as well as alternative
methods of adopting  its  requirements.  SFAS No. 123R is  effective  for annual
reporting periods beginning after June 15, 2005. As disclosed in Note 1 of Notes
to  Consolidated  Financial  Statements,  based on the current  assumptions  and
calculations  used,  had we  recognized  compensation  expense based on the fair
value of awards of equity  instruments,  net earnings would have been reduced by
approximately $18 million, $15 million and $17 million for fiscal 2005, 2004 and
2003,  respectively.  We have

                                       12
<PAGE>

not yet  determined  the method of adoption  or the effect of adopting  SFAS No.
123R and have not determined  whether the adoption will result in future amounts
similar to the current pro forma disclosures under SFAS No. 123.

FORWARD-LOOKING STATEMENTS

Certain  statements  included in this report and other  materials filed or to be
filed by us with the SEC (as well as  information  included  in oral or  written
statements  made  or  to  be  made  by  us)  may  contain  statements  that  are
forward-looking  within the meaning of the Private Securities  Litigation Reform
Act of 1995,  as  codified  in Section  27A of the  Securities  Act of 1933,  as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the
Exchange Act).  Words or phrases such as "believe,"  "plan,"  "will,"  "expect,"
"intend,"  "estimate,"  and "project," and similar  expressions  are intended to
identify  forward-looking  statements.  All of these  statements,  and any other
statements in this report that are not historical  facts,  are  forward-looking.
Examples  of  forward-looking  statements  include,  but  are  not  limited  to,
projections regarding:  our growth plans and the number and type of expected new
restaurant  openings and related  capital  expenditures;  same-restaurant  sales
growth;  expected  diluted net earnings per share growth;  expected  trends that
might impact capital requirements and liquidity;  expected  contributions to our
defined  benefit  pension  plans;  and the impact of litigation on our financial
position.  These forward-looking  statements are based on assumptions concerning
important  factors,  risks and  uncertainties  that could  significantly  affect
anticipated  results  in the future  and,  accordingly,  could  cause the actual
results  to  differ  materially  from  those  expressed  in the  forward-looking
statements.  These factors, risks and uncertainties include, but are not limited
to:

     o    the  intensely   competitive   nature  of  the  restaurant   industry,
          especially pricing, service, location,  personnel and type and quality
          of food;
     o    economic  and  business  factors,  both  specific  to  the  restaurant
          industry and  generally,  including  changes in consumer  preferences,
          demographic trends, weather conditions, a protracted economic slowdown
          or worsening  economy,  industry-wide cost pressures and public safety
          conditions,   including   actual  or  threatened  armed  conflicts  or
          terrorist attacks;
     o    the  price  and  availability  of  food,  ingredients  and  utilities,
          including the general risk of inflation;
     o    labor and insurance costs, including increased labor costs as a result
          of federal  and  state-mandated  increases  in minimum  wage rates and
          increased  insurance  costs as a result of  increases  in our  current
          insurance premiums;
     o    increased advertising and marketing costs;
     o    higher-than-anticipated  costs to open,  close,  relocate  or  remodel
          restaurants;
     o    litigation by employees, consumers, suppliers, shareholders or others,
          regardless of whether the allegations  made against us are valid or we
          are ultimately found liable;
     o    unfavorable publicity relating to food safety or other concerns;
     o    a lack of  suitable  new  restaurant  locations  or a  decline  in the
          quality of the locations of our current restaurants;
     o    federal,  state and local  regulation of our business,  including laws
          and  regulations  relating to our  relationships  with our  employees,
          zoning, land use, environmental matters and liquor licenses; and
     o    growth   objectives,    including    lower-than-expected   sales   and
          profitability  of  newly-opened  restaurants,  our  expansion of newer
          concepts  that have not yet  proven  their  long-term  viability,  our
          ability to develop new concepts,  risks associated with growth through
          acquisitions,  and our ability to manage risks relating to the opening
          of new restaurants, including real estate development and construction
          activities, union activities, the issuance and renewal of licenses and
          permits,  the  availability of funds to finance growth and our ability
          to hire and train qualified personnel.

                                       13
<PAGE>




REPORT OF MANAGEMENT RESPONSIBILITIES

The management of Darden  Restaurants,  Inc. is responsible for the fairness and
accuracy of the consolidated  financial statements.  The consolidated  financial
statements have been prepared in accordance with accounting principles generally
accepted in the United States of America,  using management's best estimates and
judgments where appropriate. The financial information throughout this report is
consistent with our consolidated financial statements.

Management  has  established  a  system  of  internal   controls  that  provides
reasonable assurance that assets are adequately safeguarded and transactions are
recorded accurately,  in all material respects,  in accordance with management's
authorization.  We maintain a strong audit program that independently  evaluates
the adequacy  and  effectiveness  of internal  controls.  Our internal  controls
provide for appropriate segregation of duties and responsibilities and there are
documented  policies  regarding  utilization of our assets and proper  financial
reporting.  These formally stated and regularly  communicated  policies set high
standards of ethical conduct for all employees.

The  Audit  Committee  of the Board of  Directors  meets at least  quarterly  to
determine that  management,  internal  auditors and the  independent  registered
public accounting firm are properly  discharging their duties regarding internal
control and financial  reporting.  The independent  registered public accounting
firm,  internal  auditors and  employees  have full and free access to the Audit
Committee at any time.

KPMG LLP, an independent registered public accounting firm, is retained to audit
our consolidated financial statements. Their report follows.

/s/ Clarence Otis, Jr.
Clarence Otis, Jr.
Chief Executive Officer


                                       14
<PAGE>


MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management is responsible for  establishing  and maintaining  adequate  internal
control  over  financial  reporting  (as  defined  in Rule  13a-15(f)  under the
Exchange  Act).  The  Company's  internal  control over  financial  reporting is
designed to provide reasonable  assurance to the Company's  management and Board
of  Directors  regarding  the  preparation  and fair  presentation  of published
financial statements.

Because of its inherent  limitations,  internal control over financial reporting
may  not  prevent  or  detect  misstatements.   Therefore,  even  those  systems
determined to be effective can provide only reasonable assurance with respect to
financial statement preparation and presentation.

Management  assessed the  effectiveness  of the Company's  internal control over
financial  reporting  as of  May  29,  2005.  In  making  this  assessment,  our
management   used  the  criteria  set  forth  by  the  Committee  of  Sponsoring
Organizations of the Treadway  Commission (COSO) in Internal  Control-Integrated
Framework.  Management  has concluded  that,  as of May 29, 2005,  the Company's
internal control over financial reporting was effective based on these criteria.

The Company's  independent  registered  public  accounting  firm,  KPMG LLP, has
issued an audit report on our assessment of our internal  control over financial
reporting, which follows.


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER
FINANCIAL REPORTING

The Board of Directors and Stockholders

Darden Restaurants, Inc.

We  have  audited   management's   assessment,   included  in  the  accompanying
Management's  Report on Internal Control Over Financial  Reporting,  that Darden
Restaurants, Inc. maintained effective internal control over financial reporting
as of May 29, 2005 based on criteria established in Internal  Control-Integrated
Framework  issued by the Committee of Sponsoring  Organizations  of the Treadway
Commission  (COSO).  Darden  Restaurants,  Inc.'s  management is responsible for
maintaining  effective  internal  control over  financial  reporting and for its
assessment of the  effectiveness of internal  control over financial  reporting.
Our  responsibility  is to express an opinion on management's  assessment and an
opinion on the  effectiveness  of the Company's  internal control over financial
reporting based on our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain  reasonable  assurance  about whether  effective
internal  control  over  financial  reporting  was  maintained  in all  material
respects. Our audit included obtaining an understanding of internal control over
financial reporting,  evaluating management's assessment, testing and evaluating
the design and operating  effectiveness  of internal control and performing such
other  procedures as we considered  necessary in the  circumstances.  We believe
that our audit provides a reasonable basis for our opinion.

A company's  internal control over financial  reporting is a process designed to
provide reasonable  assurance  regarding the reliability of financial  reporting
and the preparation of financial  statements for external purposes in accordance
with generally accepted accounting principles. A company's internal control over
financial  reporting  includes those policies and procedures that (1) pertain to
the  maintenance  of records that, in reasonable  detail,  accurately and fairly
reflect the  transactions  and  dispositions  of the assets of the company;  (2)
provide  reasonable  assurance  that  transactions  are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting  principles  and that  receipts and  expenditures  of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of  unauthorized  acquisition,  use, or  disposition  of the company's
assets that could have a material effect on the financial statements.

                                       15
<PAGE>


Because of its inherent  limitations,  internal control over financial reporting
may not prevent or detect misstatements.  Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate  because of changes in  conditions,  or that the degree of compliance
with the policies or procedures may deteriorate.

In our opinion, management's assessment that Darden Restaurants, Inc. maintained
effective internal control over financial reporting as of May 29, 2005 is fairly
stated,  in all material  respects,  based on criteria  established  in Internal
Control-Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway  Commission (COSO).  Also, in our opinion,  Darden  Restaurants,
Inc.  maintained,  in all material  respects,  effective  internal  control over
financial  reporting  as of May 29,  2005,  based  on  criteria  established  in
Internal  Control-Integrated  Framework  issued by the  Committee of  Sponsoring
Organizations of the Treadway Commission (COSO).

We also have  audited,  in accordance  with the standards of the Public  Company
Accounting  Oversight Board (United States),  the consolidated balance sheets of
Darden  Restaurants,  Inc. and subsidiaries as of May 29, 2005 and May 30, 2004,
and the related  consolidated  statements of earnings,  changes in stockholders'
equity and accumulated  other  comprehensive  income (loss),  and cash flows for
each of the years in the  three-year  period ended May 29, 2005,  and our report
dated July 28,  2005  expressed  an  unqualified  opinion on those  consolidated
financial statements.

/s/ KPMG LLP

Orlando, FL
July 28, 2005

                                       16
<PAGE>




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders
Darden Restaurants, Inc.

We  have  audited  the  accompanying   consolidated  balance  sheets  of  Darden
Restaurants,  Inc. and subsidiaries as of May 29, 2005 and May 30, 2004, and the
related consolidated statements of earnings, changes in stockholders' equity and
accumulated other  comprehensive  income (loss),  and cash flows for each of the
years in the three-year period ended May 29, 2005. These consolidated  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects,  the financial position of Darden Restaurants,
Inc. and  subsidiaries  as of May 29, 2005 and May 30, 2004,  and the results of
their  operations  and their cash flows for each of the years in the  three-year
period ended May 29, 2005 in conformity  with  accounting  principles  generally
accepted in the United States of America.

We also have  audited,  in accordance  with the standards of the Public  Company
Accounting   Oversight  Board  (United  States),  the  effectiveness  of  Darden
Restaurants, Inc.'s internal control over financial reporting as of May 29, 2005
based on criteria established in Internal Control-Integrated Framework issued by
the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and
our report dated July 28, 2005 expressed an unqualified  opinion on management's
assessment of, and the effective  operation of, internal  control over financial
reporting.


/s/ KPMG LLP

Orlando, Florida
July 28, 2005


                                       17
<PAGE>




CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>

                                                                                Fiscal Year Ended
 -------------------------------------------------------------------------------------------------------------------
 (In thousands, except per share data)                           May 29, 2005     May 30, 2004      May 25, 2003
 -------------------------------------------------------------------------------------------------------------------

<S>                                                               <C>               <C>              <C>
 Sales                                                             $5,278,110        $5,003,355       $4,654,971
 Costs and expenses:
    Cost of sales:
          Food and beverage                                         1,593,709         1,526,875        1,449,162
          Restaurant labor                                          1,695,805         1,601,258        1,485,046
          Restaurant expenses                                         806,314           774,806          713,699
 -------------------------------------------------------------------------------------------------------------------
          Total cost of sales, excluding restaurant
             depreciation and amortization of $198,422,
              $195,486 and $177,127, respectively                  $4,095,828        $3,902,939       $3,647,907
     Selling, general and administrative                              497,478           472,109          431,722
     Depreciation and amortization                                    213,219           210,004          191,218
     Interest, net                                                     43,119            43,659           42,597
     Asset impairment and restructuring charges, net                    4,549            41,868            3,924
 -------------------------------------------------------------------------------------------------------------------
          Total costs and expenses                                 $4,854,193        $4,670,579       $4,317,368
 -------------------------------------------------------------------------------------------------------------------
 Earnings before income taxes                                         423,917           332,776          337,603
 Income taxes                                                         133,311           105,603          111,624
 -------------------------------------------------------------------------------------------------------------------
 Net earnings                                                      $  290,606        $  227,173       $  225,979
 ===================================================================================================================
 Net earnings per share:
    Basic                                                          $     1.85        $     1.39       $     1.33
    Diluted                                                        $     1.78        $     1.34       $     1.27
 ===================================================================================================================
 Average number of common shares outstanding:
    Basic                                                             156,700           163,500          170,300
    Diluted                                                           163,400           169,700          177,400
 ===================================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.



                                       18
<PAGE>



CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>

 -------------------------------------------------------------------------------------------------------------------
 (In thousands)                                                      May 29, 2005              May 30, 2004
 -------------------------------------------------------------------------------------------------------------------
                            ASSETS
<S>                                                                 <C>                        <C>
 Current assets:
    Cash and cash equivalents                                        $     42,801               $    36,694
    Receivables                                                            36,510                    30,258
    Inventories                                                           235,444                   198,781
    Prepaid expenses and other current assets                              28,927                    25,316
    Deferred income taxes                                                  63,584                    55,258
 -------------------------------------------------------------------------------------------------------------------
        Total current assets                                         $    407,266               $   346,307
 Land, buildings and equipment, net                                     2,351,454                 2,250,616
 Other assets                                                             179,051                   183,425
 -------------------------------------------------------------------------------------------------------------------
        Total assets                                                 $  2,937,771               $ 2,780,348
 ===================================================================================================================

             LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities:
    Accounts payable                                                 $    191,197               $   174,624
    Short-term debt                                                            --                    14,500
    Accrued payroll                                                       114,602                   103,327
    Accrued income taxes                                                   52,404                    48,753
    Other accrued taxes                                                    43,825                    38,440
    Unearned revenues                                                      88,472                    75,513
    Current portion of long-term debt                                     299,929                        --
    Other current liabilities                                             254,178                   228,324
 -------------------------------------------------------------------------------------------------------------------
        Total current liabilities                                    $  1,044,607               $   683,481
 Long-term debt, less current portion                                     350,318                   653,349
 Deferred income taxes                                                    114,846                   132,690
 Deferred rent                                                            130,872                   122,879
 Other liabilities                                                         24,109                    12,661
 -------------------------------------------------------------------------------------------------------------------
        Total liabilities                                            $  1,664,752               $ 1,605,060
 -------------------------------------------------------------------------------------------------------------------
 Stockholders' equity:
    Common stock and surplus, no par value.  Authorized
      500,000 shares; issued 271,102 and 264,907 shares,
        respectively; outstanding 154,391 and 158,431 shares,
        respectively                                                 $  1,703,336               $ 1,584,115
    Preferred stock, no par value.  Authorized 25,000 shares;
      none issued and outstanding                                              --                        --
    Retained earnings                                                   1,405,754                 1,127,653
    Treasury stock, 116,711 and 106,476 shares,
      at cost, respectively                                            (1,784,835)               (1,483,768)
    Accumulated other comprehensive income (loss)                          (8,876)                  (10,173)
    Unearned compensation                                                 (41,685)                  (41,401)
    Officer notes receivable                                                 (675)                   (1,138)
 -------------------------------------------------------------------------------------------------------------------
        Total stockholders' equity                                   $  1,273,019               $ 1,175,288
 -------------------------------------------------------------------------------------------------------------------
        Total liabilities and stockholders' equity                   $  2,937,771               $ 2,780,348
 ===================================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.



                                       19
<PAGE>







CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY AND
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------------------
                                             Common                           Accumulated                Officer      Total
                                              Stock                              Other
                                               and      Retained   Treasury  Comprehensive   Unearned     Notes    Stockholders'
(In thousands, except per share data)        Surplus    Earnings     Stock   Income (Loss) Compensation Receivable    Equity
--------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>         <C>        <C>            <C>          <C>          <C>        <C>
Balance at May 26, 2002                   $1,474,054 $  700,986  $(1,044,915)   $(12,414)    $(46,108)    $(1,997)   $1,069,606
--------------------------------------------------------------------------------------------------------------------------------
Comprehensive income:
   Net earnings                                   --    225,979           --          --           --          --       225,979
   Other comprehensive income (loss):
       Foreign currency adjustment                --         --           --       1,995           --          --         1,995
       Change in fair value of derivatives,
         net of tax of  $0                        --         --           --           2           --          --             2
       Minimum pension liability
         adjustment,net of tax benefit
           of $141                                --         --           --        (229)          --          --          (229)
                                                                                                                     -----------
           Total comprehensive income                                                                                   227,747
Cash dividends declared ($0.08 per share)         --    (13,501)         --           --           --          --       (13,501)
Stock option exercises (3,133 shares)         27,261         --        1,652          --           --          --        28,913
Issuance of restricted stock (148 shares),
  net of forfeiture adjustments                4,429         --          600          --       (5,029)         --            --
Earned compensation                               --         --           --          --        3,579          --         3,579
ESOP note receivable repayments                   --         --           --          --        4,710          --         4,710
Income tax benefits credited to equity        16,385         --           --          --           --          --        16,385
Purchases of common stock for treasury
  (10,746 shares)                                 --         --     (213,311)         --           --          --      (213,311)
Issuance of treasury stock under Employee
  Stock Purchase Plan and other plans
    (280 shares)                               3,828         --        1,681          --           --          --         5,509
Repayment of officer notes, net                   --         --           --          --           --         418           418
--------------------------------------------------------------------------------------------------------------------------------
Balance at May 25, 2003                   $1,525,957 $  913,464  $(1,254,293)   $(10,646)    $(42,848)    $(1,579)   $1,130,055
--------------------------------------------------------------------------------------------------------------------------------
Comprehensive income:
   Net earnings                                   --    227,173           --          --           --          --       227,173
   Other comprehensive income (loss):
       Foreign currency adjustment                --         --           --         337           --          --           337
       Change in fair value of derivatives,
           net of tax of  $51                     --         --           --         205           --          --           205
       Minimum pension liability
         adjustment,net of tax benefit
           of $45                                 --         --           --         (69)          --          --           (69)
                                                                                                                      ----------
       Total comprehensive income                                                                                       227,646
Cash dividends declared ($0.08 per share)         --    (12,984)          --          --           --          --       (12,984)
Stock option exercises (3,464 shares)         30,972         --        3,685          --           --          --        34,657
Issuance of restricted stock (409 shares),
  net of forfeiture adjustments                7,605         --          173          --       (7,778)         --            --
Earned compensation                               --         --           --          --        4,198          --         4,198
ESOP note receivable repayments                   --         --           --          --        5,027          --         5,027
Income tax benefits credited to equity        15,650         --           --          --           --          --        15,650
Purchases of common stock for treasury
   (10,749 shares)                                --         --     (235,462)         --           --          --      (235,462)
Issuance of treasury stock under Employee
   Stock Purchase Plan and other plans
     (357 shares)                              3,931         --        2,129          --           --          --         6,060

Repayment of officer notes                        --         --           --          --           --         441           441
--------------------------------------------------------------------------------------------------------------------------------
Balance at May 30, 2004                   $1,584,115 $1,127,653  $(1,483,768)   $(10,173)    $(41,401)    $(1,138)   $1,175,288
--------------------------------------------------------------------------------------------------------------------------------
Comprehensive income:
   Net earnings                                   --    290,606           --          --           --          --       290,606
   Other comprehensive income (loss):
       Foreign currency adjustment                --         --           --       1,450           --          --         1,450
       Change in fair value of derivatives,
           net of tax of $1,503                   --         --           --        (243)          --          --          (243)
       Minimum pension liability
           adjustment,net of tax benefit
              of $56                              --         --           --          90           --          --            90
                                                                                                                       --------
         Total comprehensive income                                                                                     291,903
Cash dividends declared ($0.08 per share)         --    (12,505)         --           --           --          --       (12,505)
Stock option exercises (6,615 shares)         62,464         --        7,081          --           --          --        69,545
Issuance of restricted stock (378 shares),
  net of forfeiture adjustments                9,535         --           --          --       (9,535)         --            --
Earned compensation                               --         --           --          --        7,464          --         7,464
ESOP note receivable repayments                   --         --           --          --        3,393          --         3,393
Income tax benefits credited to equity        42,996         --           --          --           --          --        42,996
Purchases of common stock for treasury
   (11,343 shares)                                --         --     (311,686)         --           --          --      (311,686)
Issuance of treasury stock under Employee
   Stock Purchase Plan and other plans
      (296 shares)                             4,226         --        1,932          --           --          --         6,158
Issuance of treasury stock under Employee
  Stock Ownership Plan (50 shares)                --         --        1,606          --       (1,606)         --            --
Repayment of officer notes                        --         --           --          --           --         463           463
--------------------------------------------------------------------------------------------------------------------------------
Balance at May 29, 2005                   $1,703,336 $1,405,754  $(1,784,835)   $ (8,876)    $(41,685)    $  (675)   $1,273,019
================================================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.

                                       20
<PAGE>




CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                                Fiscal Year Ended
 -------------------------------------------------------------------------------------------------------------------
 (In thousands)                                                  May 29, 2005     May 30, 2004      May 25, 2003
 -------------------------------------------------------------------------------------------------------------------

<S>                                                               <C>               <C>              <C>
 Cash flows - operating activities
    Net earnings                                                   $ 290,606         $ 227,173        $ 225,979
    Adjustments to reconcile net earnings to cash flows:
      Depreciation and amortization                                  213,219           210,004          191,218
      Asset impairment charges, net                                    4,549            40,756            4,282
      Restructuring charge (credit)                                       --             1,112             (358)
      Amortization of unearned compensation and loan costs            11,041             7,599            6,901
      Change in current assets and liabilities                        28,967             2,207           36,046
      Contribution to defined benefit pension plans and
         postretirement plan                                            (575)             (257)         (20,203)
      Loss on disposal of land, buildings and equipment                1,164               104            2,456
      Change in cash surrender value of trust-owned life
         insurance                                                    (3,451)           (6,106)           2,441
      Deferred income taxes                                          (24,722)           16,688           32,026
      Change in deferred rent                                          7,993             7,583           10,098
      Change in other liabilities                                     11,920             1,490            1,051
      Income tax benefits credited to equity                          42,996            15,650           16,385
      Non-cash compensation expense                                    1,006               861              758
      Other, net                                                      (1,471)              547             (445)
 -------------------------------------------------------------------------------------------------------------------
          Net cash provided by operating activities                $ 583,242         $ 525,411        $ 508,635
 -------------------------------------------------------------------------------------------------------------------
 Cash flows - investing activities
    Purchases of land, buildings and equipment                      (329,238)         (354,326)        (423,273)
    Increase in other assets                                          (1,931)           (5,128)          (8,100)
    Purchase of trust-owned life insurance                                --                --           (6,000)
    Proceeds from disposal of land, buildings and equipment           18,028            16,197            7,641
    Proceeds from maturities of short-term investments                    --                --           10,000
 -------------------------------------------------------------------------------------------------------------------
          Net cash used in investing activities                    $(313,141)        $(343,257)       $(419,732)
 -------------------------------------------------------------------------------------------------------------------
 Cash flows - financing activities
    Proceeds from issuance of common stock                            74,697            39,856           33,664
    Dividends paid                                                   (12,505)          (12,984)         (13,501)
    Purchases of treasury stock                                     (311,686)         (235,462)        (213,311)
    ESOP note receivable repayments                                    3,393             5,027            4,710
    (Decrease) increase in short-term debt                           (14,500)           14,500               --
    Repayment of long-term debt                                       (3,393)           (5,027)          (4,710)
 -------------------------------------------------------------------------------------------------------------------
          Net cash used in financing activities                    $(263,994)        $(194,090)       $(193,148)
 -------------------------------------------------------------------------------------------------------------------
 Increase (decrease) in cash and cash equivalents                      6,107           (11,936)        (104,245)
 Cash and cash equivalents - beginning of year                        36,694            48,630          152,875
 -------------------------------------------------------------------------------------------------------------------
 Cash and cash equivalents - end of year                           $  42,801         $  36,694        $  48,630
 ===================================================================================================================
 Cash flows from changes in current assets and liabilities
    Receivables                                                       (5,533)             (279)              66
    Inventories                                                      (36,663)          (25,137)          (1,231)
    Prepaid expenses and other current assets                         (4,463)             (190)          (8,523)
    Accounts payable                                                  16,573            (1,027)          15,927
    Accrued payroll                                                   11,275            17,352           (1,961)
    Accrued income taxes                                               3,651           (19,222)            (529)
    Other accrued taxes                                                5,385             3,371            4,595
    Unearned revenues                                                 12,959             2,815           16,066
    Other current liabilities                                         25,783            24,524           11,636
 -------------------------------------------------------------------------------------------------------------------
               Change in current assets and liabilities            $  28,967         $   2,207        $  36,046
 ===================================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.

                                       21
<PAGE>


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollar amounts in thousands, except per share data)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Operations and Principles of Consolidation
The  consolidated   financial   statements  include  the  operations  of  Darden
Restaurants,  Inc. and its wholly owned subsidiaries. We own and operate various
restaurant   concepts  located  in  the  United  States  and  Canada,   with  no
franchising.   We  also  license  37  restaurants  in  Japan.   All  significant
intercompany balances and transactions have been eliminated in consolidation.

Fiscal Year
Our  fiscal  year  ends on the last  Sunday  in May.  Fiscal  2005 and 2003 both
consisted  of 52  weeks  of  operation.  Fiscal  2004  consisted  of 53 weeks of
operation.

Cash Equivalents
Cash equivalents  include highly liquid investments such as U.S. treasury bills,
taxable  municipal  bonds and money  market  funds that have a maturity of three
months  or  less.  Amounts  receivable  from  credit  card  companies  are  also
considered cash  equivalents  because they are both short-term and highly liquid
in nature and are  typically  converted  to cash within  three days of the sales
transaction.

Inventories
Inventories  consist  of food and  beverages,  and are  valued  at the  lower of
weighted-average cost or market.

Land, Buildings and Equipment
Land,   buildings  and   equipment   are  recorded  at  cost  less   accumulated
depreciation.  Repair and maintenance  costs incurred to maintain the appearance
and  functionality  of the land,  buildings and equipment that do not extend its
useful  life  or that  are  less  than $1 are  expensed  as  incurred.  Building
components are depreciated  over estimated useful lives ranging from seven to 40
years  using  the  straight-line  method.  Leasehold  improvements,   which  are
reflected on our  consolidated  balance sheets as a component of buildings,  are
amortized  over the lesser of the  expected  lease  term,  including  cancelable
option  periods,  or the estimated  useful lives of the related assets using the
straight-line  method.  Equipment is  depreciated  over  estimated  useful lives
ranging from two to ten years also using the straight-line  method.  Accelerated
depreciation  methods are generally  used for income tax purposes.  Depreciation
and  amortization  expense  associated with buildings and equipment  amounted to
$206,552, $203,349 and $184,963, in fiscal 2005, 2004 and 2003, respectively. In
fiscal 2005,  2004 and 2003,  we had losses on disposal of land,  buildings  and
equipment  of $1,164,  $104 and  $2,456,  respectively,  which were  included in
selling, general and administrative expenses.

Capitalized Software Costs
Capitalized software,  which is a component of other assets, is recorded at cost
less  accumulated  amortization.  Capitalized  software is  amortized  using the
straight-line  method over  estimated  useful  lives  ranging  from three to ten
years.  The cost of  capitalized  software  at May 29,  2005  and May 30,  2004,
amounted to $51,292 and $46,629,  respectively.  Accumulated  amortization as of
May 29, 2005 and May 30, 2004  amounted  to $19,877 and  $14,301,  respectively.
Amortization  expense  associated with capitalized  software amounted to $6,667,
$6,655 and $6,255, in fiscal 2005, 2004 and 2003, respectively.

Trust-Owned Life Insurance
In August 2001, we caused a trust that we previously had established to purchase
life insurance policies covering certain of our officers and other key employees
(trust-owned  life  insurance  or  TOLI).  The  trust  is  the  owner  and  sole
beneficiary  of the TOLI  policies.  The  policies  were  purchased  to offset a
portion of our obligations under our non-qualified  deferred  compensation plan.
The cash  surrender  value of the  policies is included  in other  assets  while
changes  in  cash  surrender   value  are  included  in  selling,   general  and
administrative expenses.


                                       22
<PAGE>


Liquor Licenses
The costs of obtaining non-transferable liquor licenses that are directly issued
by local  government  agencies for nominal  fees are  expensed as incurred.  The
costs of  purchasing  transferable  liquor  licenses  through  open  markets  in
jurisdictions   with  a  limited  number  of  authorized   liquor  licenses  are
capitalized. Annual liquor license renewal fees are expensed.

Impairment of Long-Lived Assets
Land,  buildings and equipment and certain other assets,  including  capitalized
software costs and liquor licenses,  are reviewed for impairment whenever events
or changes in  circumstances  indicate that the carrying  amount of an asset may
not be recoverable.  Recoverability of assets to be held and used is measured by
a comparison of the carrying amount of the assets to the future undiscounted net
cash flows expected to be generated by the assets.  Identifiable  cash flows are
measured at the lowest level for which they are largely  independent of the cash
flows of other groups of assets and  liabilities,  generally  at the  restaurant
level. If such assets are determined to be impaired,  the impairment  recognized
is measured  by the amount by which the  carrying  amount of the assets  exceeds
their fair value.  Fair value is generally  determined  based on  appraisals  or
sales prices of comparable assets.  Restaurant sites and certain other assets to
be disposed of are reported at the lower of their carrying amount or fair value,
less estimated  costs to sell.  Restaurant  sites and certain other assets to be
disposed of are included in assets held for disposal  when certain  criteria are
met. These criteria  include the requirement that the likelihood of disposing of
these assets within one year is probable.  Assets whose disposal is not probable
within one year remain in land,  buildings and equipment until their disposal is
probable within one year.

Insurance Accruals
Through the use of insurance program deductibles and self-insurance, we retain a
significant portion of expected losses under our workers' compensation, employee
medical  and  general  liability  programs.  However,  we  carry  insurance  for
individual  claims that  generally  exceed $250 for  workers'  compensation  and
general  liability claims.  Accrued  liabilities have been recorded based on our
estimates of the anticipated  ultimate costs to settle all claims, both reported
and unreported.

Revenue Recognition
Revenue from restaurant sales is recognized when food and beverage  products are
sold.  Unearned revenues represent our liability for gift cards and certificates
that have been sold but not yet  redeemed  and are  recorded  at their  expected
redemption  value.  When  the gift  cards  and  certificates  are  redeemed,  we
recognize restaurant sales and reduce unearned revenues.

Food and Beverage Costs
Food and beverage costs include  inventory,  warehousing and related  purchasing
and  distribution  costs.  Vendor  allowances  received in  connection  with the
purchase of a vendor's  products  are  recognized  as a reduction of the related
food and beverage costs as earned.  These allowances are recognized as earned in
accordance  with the underlying  agreement with the vendor and completion of the
earning  process.  Vendor  agreements  are generally for a period of one year or
more and payments  received  are  initially  recorded as long-term  liabilities.
Amounts  which are  expected  to be earned  within  one year are  recorded  as a
current liability.

Income Taxes
We provide for federal and state income taxes  currently  payable as well as for
those deferred  because of temporary  differences  between  reporting income and
expenses for financial  statement  purposes versus tax purposes.  Federal income
tax credits are recorded as a reduction of income taxes. Deferred tax assets and
liabilities  are  recognized  for the future tax  consequences  attributable  to
differences  between the financial statement carrying amounts of existing assets
and  liabilities  and their  respective  tax  bases.  Deferred  tax  assets  and
liabilities  are measured  using enacted tax rates  expected to apply to taxable
income in the years in which  those  temporary  differences  are  expected to be
recovered  or settled.  The effect on deferred tax assets and  liabilities  of a
change in tax rates is  recognized  in earnings in the period that  includes the
enactment date.

Income tax benefits  credited to equity relate to tax benefits  associated  with
amounts that are deductible for income tax purposes but do not affect  earnings.
These   benefits  are   principally   generated   from  employee   exercises  of
non-qualified stock options and vesting of employee restricted stock awards.


                                       23
<PAGE>


Derivative Instruments and Hedging Activities
We  use  financial  and   commodities   derivatives  to  manage  interest  rate,
compensation and commodities pricing risks inherent in our business  operations.
Our use of derivative  instruments is currently limited to interest rate hedges,
equity forwards contracts and commodities  futures contracts.  These instruments
are structured as hedges of forecasted  transactions  or the variability of cash
flows to be paid related to a recognized  asset or liability (cash flow hedges).
No derivative  instruments are entered into for trading or speculative purposes.
All  derivatives  are recognized on the balance sheet at fair value. On the date
the derivative  contract is entered into, we document all relationships  between
hedging instruments and hedged items, as well as our  risk-management  objective
and  strategy  for  undertaking  the various  hedge  transactions.  This process
includes  linking  all  derivatives  designated  as cash flow hedges to specific
assets  and  liabilities  on  the  consolidated  balance  sheet  or to  specific
forecasted transactions.  We also formally assess, both at the hedge's inception
and on an ongoing basis,  whether the derivatives  used in hedging  transactions
are highly effective in offsetting changes in cash flows of hedged items.

Changes in the fair value of derivatives  that are highly effective and that are
designated  and qualify as cash flow hedges are recorded in other  comprehensive
income  until  earnings  are  affected by the  variability  in cash flows of the
designated  hedged item.  Where  applicable,  we  discontinue  hedge  accounting
prospectively  when it is determined that the derivative is no longer  effective
in offsetting  changes in the cash flows of the hedged item or the derivative is
terminated. Any changes in the fair value of a derivative where hedge accounting
has been discontinued or is ineffective are recognized  immediately in earnings.
Cash flows related to derivatives are included in operating activities.

Operating Leases
We recognize rent expense on a straight-line basis over the expected lease term,
including  cancelable option periods when it is deemed to be reasonably  assured
that we would incur an economic  penalty for not exercising the options.  Within
the  provisions  of  certain  of our  leases,  there  are rent  holidays  and/or
escalations  in payments over the base lease term,  as well as renewal  periods.
The effects of the holidays and escalations  have been reflected in rent expense
on a straight-line basis over the expected lease term, which includes cancelable
option periods when it is deemed to be reasonably assured that we would incur an
economic penalty for not exercising the option.  The lease term commences on the
date when we have the right to control the use of the leased property,  which is
typically before rent payments are due under the terms of the lease. Many of our
leases have renewal periods totaling five to 20 years, exercisable at our option
and require  payment of  property  taxes,  insurance  and  maintenance  costs in
addition to the rent  payments.  Percentage  rent expense is generally  based on
sales  levels  and is  accrued  at the  point  in time we  determine  that it is
probable  that  such  sales  levels  will  be  achieved.

Pre-Opening  Expenses
Non-capital expenditures associated with opening new restaurants are expensed as
incurred.

Advertising
Production  costs of commercials  are charged to operations in the fiscal period
the advertising is first aired. The costs of programming and other  advertising,
promotion and marketing  programs are charged to operations in the fiscal period
incurred.  Advertising expense amounted to $214,608,  $210,989 and $200,020,  in
fiscal 2005, 2004 and 2003, respectively.

Stock-Based Compensation
Statement of Financial  Accounting  Standards  (SFAS) No. 123,  "Accounting  for
Stock-Based  Compensation,"  encourages  the  use  of  a  fair-value  method  of
accounting for stock-based awards under which the fair value of stock options is
determined on the date of grant and expensed over the vesting period. As allowed
by SFAS No. 123, we have  elected to account  for our  stock-based  compensation
plans under an intrinsic value method that requires  compensation  expense to be
recorded only if, on the date of grant,  the current  market price of our common
stock exceeds the exercise price the employee must pay for the stock. Our policy
is to grant stock  options at the fair market value of our  underlying  stock on
the date of grant. Accordingly,  no compensation expense has been recognized for
stock options granted under any of our stock plans because the exercise price of
all options  granted was equal to the current  market  value of our stock on the
grant date.

                                       24
<PAGE>


Had we determined  compensation  expense for our stock options based on the fair
value at the grant date as  prescribed  under SFAS No. 123, our net earnings and
net  earnings  per share  would  have  been  reduced  to the pro  forma  amounts
indicated below:
<TABLE>
<CAPTION>

                                                                                   Fiscal Year
 -------------------------------------------------------------------------------------------------------------------
                                                                          2005            2004           2003
 -------------------------------------------------------------------------------------------------------------------


<S>                                                                   <C>            <C>             <C>
 Net earnings, as reported                                             $ 290,606      $ 227,173       $225,979
    Add:  Stock-based compensation expense included in
        reported net earnings, net of related tax effects                  5,134          3,158          2,642
    Deduct:  Total stock-based compensation expense
        determined under fair value based method for all
        awards, net of related tax effects                               (22,719)       (17,980)       (19,801)
                                                                     -----------------------------------------------
    Pro forma                                                          $ 273,021      $ 212,351       $208,820
                                                                    ===============================================
 Basic net earnings per share
    As reported                                                        $    1.85      $    1.39       $   1.33
    Pro forma                                                          $    1.74      $    1.30       $   1.23
 Diluted net earnings per share
    As reported                                                        $    1.78      $    1.34       $   1.27
    Pro forma                                                          $    1.67      $    1.25       $   1.18
 ===================================================================================================================
</TABLE>

To determine  pro forma net  earnings,  reported net earnings have been adjusted
for compensation expense associated with stock options granted that are expected
to eventually  vest. The preceding pro forma results were  determined  using the
Black  Scholes  option-pricing  model,  which values  options based on the stock
price  at the  grant  date,  the  expected  life of the  option,  the  estimated
volatility of the stock,  expected dividend payments and the risk-free  interest
rate over the expected life of the option.  The dividend yield was calculated by
dividing the current  annualized  dividend by the option exercise price for each
grant. The expected  volatility was determined  considering stock prices for the
fiscal year the grant  occurred and prior fiscal years,  as well as  considering
industry  volatility data. The risk-free interest rate was the rate available on
zero coupon U.S.  government  obligations with a term equal to the expected life
of each  grant.  The  expected  life of the  option was  estimated  based on the
exercise history from previous grants.

The  weighted-average  assumptions  used  in the  Black  Scholes  model  were as
follows:
<TABLE>
<CAPTION>

                                                                                  Stock Options
                                                                             Granted in Fiscal Year
 -------------------------------------------------------------------------------------------------------------------
                                                                      2005             2004              2003
 -------------------------------------------------------------------------------------------------------------------
<S>                                                               <C>               <C>              <C>
 Risk-free interest rate                                               3.75%             2.62%            4.37%
 Expected volatility of stock                                          30.0%             30.0%            30.0%
 Dividend yield                                                         0.3%              0.2%             0.2%
 Expected option life                                              6.0 years         6.0 years        6.0 years
 ===================================================================================================================
</TABLE>

Restricted  stock and  restricted  stock unit (RSU)  awards  are  recognized  as
unearned  compensation,  a component of stockholders'  equity, based on the fair
market value of our common stock on the award date.  These amounts are amortized
to compensation expense, using the straight-line method, over the vesting period
using  assumed  forfeiture  rates for  different  types of awards.  Compensation
expense is adjusted in future  periods if actual  forfeiture  rates  differ from
initial estimates.

Net Earnings Per Share
Basic net  earnings  per share are  computed  by  dividing  net  earnings by the
weighted-average  number of common shares  outstanding for the reporting period.
Diluted net earnings per share reflect the  potential  dilution that could occur
if  securities  or other  contracts  to issue  common  stock were  exercised  or
converted  into common stock.  Outstanding  stock options and  restricted  stock
granted  by  us  represent  the  only  dilutive  effect   reflected  in  diluted
weighted-average shares outstanding.  Options and restricted stock do not impact
the numerator of the diluted net earnings per share computation.

                                       25
<PAGE>


Options to purchase  2,680,412 shares,  4,643,389 shares and 3,952,618 shares of
common  stock were  excluded  from the  calculation  of diluted net earnings per
share for fiscal  2005,  2004 and 2003,  respectively,  because  their  exercise
prices exceeded the average market price of common shares for the period.

Comprehensive Income (Loss)
Comprehensive income (loss) includes net earnings and other comprehensive income
(loss) items that are excluded  from net earnings  under  accounting  principles
generally accepted in the United States of America.  Other comprehensive  income
(loss) items include foreign  currency  translation  adjustments,  the effective
unrealized  portion of changes in the fair value of cash flow hedges and amounts
associated with minimum pension liability adjustments.

Foreign Currency
The Canadian  dollar is the  functional  currency  for our  Canadian  restaurant
operations.   Assets  and  liabilities   denominated  in  Canadian  dollars  are
translated  into U.S.  dollars using the exchange rates in effect at the balance
sheet date.  Results of operations  are  translated  using the average  exchange
rates  prevailing  throughout  the  period.  Translation  gains and  losses  are
reported as a separate  component  of  accumulated  other  comprehensive  income
(loss) in stockholders'  equity.  Aggregate  cumulative  translation losses were
$8,724 and $10,174 at May 29, 2005 and May 30, 2004,  respectively.  Losses from
foreign currency transactions, which amounted to $18, $53 and $105, are included
in the  consolidated  statements  of earnings  for fiscal  2005,  2004 and 2003,
respectively.

Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America 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 expenses  during the reporting
period. Actual results could differ from those estimates.

Segment Reporting
As of May 29, 2005, we operated 1,381 Red Lobster,  Olive Garden, Bahama Breeze,
Smokey Bones  Barbeque & Grill and Seasons 52  restaurants  in North  America as
operating  segments.  The restaurants operate principally in the U.S. within the
casual dining industry,  providing  similar products to similar  customers.  The
restaurants  also  possess  similar  pricing  structures,  resulting  in similar
long-term expected financial performance characteristics. Revenues from external
customers are derived  principally  from food and beverage sales. We do not rely
on any major  customers as a source of revenue.  We believe we meet the criteria
for aggregating our operating segments into a single reporting segment.

Future Application of Accounting Standards
In November 2004, the Financial  Accounting  Standards  Board (FASB) issued SFAS
No. 151,  "Inventory  Costs." SFAS No. 151 clarifies the accounting for abnormal
amounts of idle facilities expense, freight, handling costs and wasted material.
SFAS No. 151 is effective  for  inventory  costs  incurred  during  fiscal years
beginning  after June 15,  2005.  We do not believe the adoption of SFAS No. 151
will have a material impact on our financial statements.

In December  2004,  the FASB issued SFAS No.  153,  "Exchanges  of  Non-Monetary
Assets." SFAS No. 153  eliminates  the exception for  non-monetary  exchanges of
similar productive assets and replaces it with a general exception for exchanges
of non-monetary  assets that do not have commercial  substance.  SFAS No. 153 is
effective for non-monetary asset exchanges occurring in fiscal periods beginning
after June 15, 2005.  We do not believe the adoption of SFAS No. 153 will have a
material impact on our financial statements.

In December 2004, the FASB issued SFAS No. 123 (Revised), "Share-Based Payment."
SFAS No. 123R revises SFAS No. 123,  "Accounting for  Stock-Based  Compensation"
and generally  requires the cost associated with employee  services  received in
exchange for an award of equity  instruments be measured based on the grant-date
fair value of the award and  recognized  in the  financial  statements  over the
period during which  employees  are required to provide  service in exchange for
the  award.  SFAS No.  123R  also  provides  guidance  on how to  determine  the
grant-date  fair value for awards of equity  instruments  as well as alternative
methods of adopting  its  requirements.  SFAS No. 123R is  effective  for annual
reporting  periods  beginning after June 15, 2005. As disclosed in Note 1, based
on the current assumptions and calculations used, had we recognized compensation
expense  based on the fair value of awards of equity  instruments,  net earnings
would have been reduced by approximately $17,585, $14,822 and $17,159 for fiscal
2005,  2004 and 2003,  respectively.  We have not yet  determined  the method of
adoption or the effect of adopting SFAS No. 123R and have not determined whether
the  adoption  will  result in future  amounts  similar to the current pro forma
disclosures under SFAS No. 123.

                                       26
<PAGE>


NOTE 2 - ACCOUNTS RECEIVABLE

Our accounts  receivable  is primarily  comprised of  receivables  from national
storage and  distribution  companies with which we contract to provide  services
that are billed to us on a per-case  basis.  In connection  with these services,
certain of our inventory  items are conveyed to these  storage and  distribution
companies  to  transfer  ownership  and risk of loss  prior to  delivery  of the
inventory to our  restaurants.  We reacquire  these items when the  inventory is
subsequently delivered to our restaurants.  These transactions do not impact the
consolidated  statements  of earnings.  Receivables  from  national  storage and
distribution  companies  amounted to $20,296 and $20,276 at May 29, 2005 and May
30, 2004, respectively.  The allowance for doubtful accounts associated with all
of our  receivables  amounted to $400 and $350 at May 29, 2005 and May 30, 2004,
respectively.

NOTE 3 - RESTRUCTURING AND ASSET IMPAIRMENT ACTIVITIES

Asset impairment  charges related to the decision to relocate or rebuild certain
restaurants  amounted to $900,  $5,667 and $4,876 in fiscal 2005, 2004 and 2003,
respectively.  Asset  impairment  credits  related  to  assets  sold  that  were
previously impaired amounted to $2,786, $1,437 and $594 in fiscal 2005, 2004 and
2003,  respectively.  During fiscal 2005, we also recorded charges of $6,407 for
the  write-down  of  carrying  value of two Olive  Garden  restaurants,  one Red
Lobster restaurant and one Smokey Bones restaurant.  The Smokey Bones restaurant
was closed subsequent to fiscal 2005 while the two Olive Garden  restaurants and
one Red Lobster  restaurant  continued to operate.  All  impairment  amounts are
included  in asset  impairment  and  restructuring  charges in the  consolidated
statements of earnings.

During fiscal 2004, we recorded pre-tax asset impairment  charges of $36,526 for
long-lived  asset  impairments  associated with the closing of six Bahama Breeze
restaurants and the write-down of the carrying value of four other Bahama Breeze
restaurants,  one Olive Garden restaurant and one Red Lobster restaurant,  which
continued  to  operate.  We also  recorded  a  restructuring  charge  of  $1,112
primarily related to severance payments made to certain restaurant employees and
exit costs  associated with the closing of the six Bahama Breeze  restaurants in
accordance  with SFAS No. 146,  "Accounting  for Costs  Associated  with Exit or
Disposal  Activities." Below is a summary of the restructuring  costs for fiscal
2005:
<TABLE>
<CAPTION>

                                      Balance at May                                            Balance at
                                         29, 2004          Additions          Cash Payments     May 30, 2005
-------------------------------------------------------------------------------------------------------------
<S>                                    <C>               <C>                   <C>               <C>
One-time termination benefits          $    49           $     --              $   (49)          $   --
Lease termination costs                     --                 --                   --               --
Other exit costs                           311                 --                 (311)              --
-------------------------------------------------------------------------------------------------------------
                                       $   360           $     --              $  (360)          $   --
=============================================================================================================
</TABLE>

The results of operations for all  restaurants  closed in fiscal 2005,  2004 and
2003 are not material to our consolidated  results of operations and, therefore,
have not been presented as discontinued operations.

NOTE 4 - LAND, BUILDINGS AND EQUIPMENT, NET

The components of land, buildings and equipment, net, are as follows:

                                                May 29, 2005       May 30, 2004
 -------------------------------------------------------------------------------
 Land                                           $   565,965         $   545,191
 Buildings                                        2,306,342           2,138,376
 Equipment                                        1,036,143           1,008,133
 Construction in progress                           107,750              87,655
 -------------------------------------------------------------------------------
 Total land, buildings and equipment              4,016,200           3,779,355
 Less accumulated depreciation                   (1,664,746)         (1,528,739)
 -------------------------------------------------------------------------------
 Net land, buildings, and equipment, net        $ 2,351,454         $ 2,250,616
 ===============================================================================

                                       27
<PAGE>


NOTE 5 - OTHER ASSETS

The components of other assets are as follows:

                                             May 29, 2005          May 30, 2004
 -------------------------------------------------------------------------------
 Prepaid pension costs                          $  63,475             $  67,077
 Trust-owned life insurance                        43,873                40,422
 Capitalized software costs, net                   31,165                32,328
 Liquor licenses                                   24,570                22,201
 Prepaid interest and loan costs                    8,008                12,396
 Miscellaneous                                      7,960                 9,001
 -------------------------------------------------------------------------------
 Total other assets                             $ 179,051             $ 183,425
 ===============================================================================

NOTE 6 - SHORT-TERM DEBT

Short-term debt at May 29, 2005 and May 30, 2004, consisted of $0 and $14,500,
respectively, of unsecured commercial paper borrowings with original maturities
of one month or less. The debt bore an interest rate of 1.09 percent at May 30,
2004.

NOTE 7 - OTHER CURRENT LIABILITIES

The components of other current liabilities are as follows:

                                             May 29, 2005          May 30, 2004
 -------------------------------------------------------------------------------
 Employee benefits                             $134,272              $115,083
 Sales and other taxes                           39,011                40,122
 Insurance                                       35,938                38,254
 Miscellaneous                                   34,458                24,388
 Accrued interest                                10,499                10,477
 -------------------------------------------------------------------------------
 Total other current liabilities               $254,178              $228,324
 ===============================================================================

NOTE 8 - LONG-TERM DEBT

The components of long-term debt are as follows:
<TABLE>
<CAPTION>

                                                                            May 29, 2005          May 30, 2004
 -------------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>                  <C>
 8.375% senior notes due September 2005                                        $ 150,000            $  150,000
 6.375% notes due February 2006                                                  150,000               150,000
 5.75% medium-term notes due March 2007                                          150,000               150,000
 7.45% medium-term notes due April 2011                                           75,000                75,000
 7.125% debentures due February 2016                                             100,000               100,000
 ESOP loan with variable rate of interest (3.42%
   at May 29, 2005) due December 2018                                             26,010                29,403
 -------------------------------------------------------------------------------------------------------------------
 Total long-term debt                                                            651,010               654,403
 Less issuance discount                                                             (763)               (1,054)
 -------------------------------------------------------------------------------------------------------------------
 Total long-term debt less issuance discount                                     650,247               653,349
 Less current portion                                                           (299,929)                   --
 -------------------------------------------------------------------------------------------------------------------
 Long-term debt, excluding current portion                                     $ 350,318            $  653,349
 ===================================================================================================================
</TABLE>

In July 2000, we registered  $500,000 of debt securities with the Securities and
Exchange  Commission  (SEC)  using  a shelf  registration  process.  Under  this
process, we may offer, from time to time, up to an aggregate of $500,000 of debt
securities.  In September  2000, we issued  $150,000 of unsecured  8.375 percent
senior  notes due in September  2005.  The senior notes rank equally with all of
our  other  unsecured  and  unsubordinated  debt and will be  senior in right of
payment to any future  subordinated  debt we may issue. In April 2001, we issued
$75,000 of unsecured 7.45 percent  medium-term notes due in April 2011. In March
2002,  we issued  $150,000 of unsecured  5.75 percent  medium-term  notes due in
March 2007. At May 29, 2005, our shelf registration provides for the issuance of
an additional $125,000 of unsecured debt securities.

                                       28
<PAGE>

In January  1996,  we issued  $150,000 of unsecured  6.375  percent notes due in
February 2006 and $100,000 of unsecured 7.125 percent debentures due in February
2016.  Concurrent with the issuance of the notes and debentures,  we terminated,
and  settled for cash,  interest-rate  swap  agreements  with  notional  amounts
totaling  $200,000,  which  hedged the  movement of interest  rates prior to the
issuance  of the  notes  and  debentures.  The  cash  paid  in  terminating  the
interest-rate  swap agreements is being  amortized to interest  expense over the
life of the notes and  debentures.  The effective  annual  interest rate is 7.57
percent for the notes and 7.82 percent for the debentures,  after  consideration
of loan costs, issuance discounts and interest-rate swap termination costs.

We also  maintain  a credit  facility  that  expires  in  October  2008,  with a
consortium  of banks  under  which we can  borrow  up to  $400,000.  The  credit
facility  allows us to borrow at interest rates that vary based on a spread over
(i) LIBOR or (ii) a base rate that is the higher of the prime rate,  or one-half
of one percent above the federal  funds rate,  at our option.  The interest rate
spread over LIBOR is determined by our debt rating. The credit facility supports
our commercial paper borrowing program. We are required to pay a facility fee of
12.5 basis points per annum on the average daily amount of loan  commitments  by
the  consortium.  The amount of interest and the annual facility fee are subject
to change based on our maintenance of certain debt ratings and financial ratios,
such as maximum debt to capital  ratios.  Advances under the credit facility are
unsecured.  At May 29, 2005 and May 30, 2004, no borrowings were outstanding and
we were in compliance with the covenants under this credit facility.

The  aggregate  maturities  of long-term  debt for each of the five fiscal years
subsequent to May 29, 2005,  and  thereafter  are $300,000 in 2006,  $150,000 in
2007, $0 in 2008, 2009 and 2010 and $201,010 thereafter.

NOTE 9 - DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

We use interest rate related  derivative  instruments  to manage our exposure on
debt instruments,  as well as commodities  derivatives to manage our exposure to
commodity price fluctuations.  We also use equity related derivative instruments
to manage our exposure on cash compensation  arrangements  indexed to the market
price of our common stock. 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. Market risk is the adverse effect
on the value of a financial  instrument  that  results from a change in interest
rates,  commodity  prices, or 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.

Futures Contracts and Commodity Swaps
During  fiscal 2005 and 2004,  we entered into futures  contracts  and commodity
swaps to reduce the risk of natural gas price fluctuations.  To the extent these
derivatives  are  effective in  offsetting  the  variability  of the hedged cash
flows,  changes  in the  derivatives'  fair  value are not  included  in current
earnings but are reported as  accumulated  other  comprehensive  income  (loss).
These changes in fair value are subsequently reclassified into earnings when the
natural gas is purchased  and used by us in our  operations.  Net losses of $311
and $439 related to these  derivatives were recognized in earnings during fiscal
2005 and 2004, respectively. The fair value of these contracts was a net gain of
$60 at May 29, 2005 and is expected to be reclassified  from  accumulated  other
comprehensive  income  (loss)  into  restaurant  expenses  during  the next nine
months. To the extent these derivatives are not effective, changes in their fair
value are immediately  recognized in current earnings.  Outstanding  derivatives
are included in other current assets or other current liabilities.

At May 29,  2005,  the  maximum  length of time over  which we are  hedging  our
exposure to the  variability in future  natural gas cash flows is 12 months.  No
gains or losses were  reclassified  into  earnings  during fiscal 2005 or fiscal
2004 as a result of the discontinuance of natural gas cash flow hedges.

Interest Rate Lock Agreement
During  fiscal 2002,  we entered into a treasury  interest  rate lock  agreement
(treasury  lock) to  hedge  the risk  that  the  cost of a  future  issuance  of
fixed-rate  debt may be adversely  affected by interest rate  fluctuations.  The
treasury lock,  which had a $75,000  notional  principal amount of indebtedness,
was used to hedge a portion of the interest payments associated with $150,000 of
debt  subsequently  issued in March 2002.  The treasury  lock was settled at the
time of the related debt  issuance  with a net gain of $267 being  recognized in
other  comprehensive  income (loss).  The net gain on the treasury lock is being
amortized  into  earnings as an  adjustment  to interest  expense  over the same
period in which the related  interest  costs on the new debt  issuance are being
recognized in earnings. Annual amortization of $53 was recognized in earnings as
an  adjustment  to interest  expense  during  fiscal 2005,  2004 and 2003. It is

                                       29
<PAGE>


expected  that $53 of this gain will be  recognized in earnings as an adjustment
to interest expense during the next 12 months.

Interest Rate Swaps
During  fiscal 2005 and 2004,  we entered  into  interest  rate swap  agreements
(swaps) to hedge the risk of changes in interest  rates of a future  issuance of
fixed-rate debt. The swaps,  which have a $100,000 notional  principal amount of
indebtedness,  will be used to hedge the  interest  payments  associated  with a
forecasted  issuance  of debt in  fiscal  2006.  To the  extent  the  swaps  are
effective in offsetting the variability of the hedged cash flows, changes in the
fair value of the swaps are not included in current earnings but are reported as
accumulated other  comprehensive  income (loss). The accumulated gain or loss at
the swap  settlement  date will be amortized  into  earnings as an adjustment to
interest expense over the same period in which the related interest costs on the
new debt issuance are recognized in earnings. The fair value of the swaps at May
29, 2005 was a loss of $3,131 and is included in accumulated other comprehensive
income  (loss) at May 29, 2005. No amounts were  recognized  in earnings  during
fiscal 2005 and fiscal 2004.

We had interest rate swaps with a notional amount of $200,000,  which we used to
convert  variable rates on our long-term  debt to fixed rates  effective May 30,
1995.  We  received  the  one-month  commercial  paper  interest  rate  and paid
fixed-rate interest ranging from 7.51 percent to 7.89 percent. The interest rate
swaps were settled during January 1996 at a cost to us of $27,670.  This cost is
being  recognized  as an  adjustment  to interest  expense  over the term of our
10-year, 6.375 percent notes and 20-year, 7.125 percent debentures (see Note 8).

Equity Forwards
During fiscal 2005, we entered into equity  forward  contracts to hedge the risk
of changes in future cash flows associated with the unvested unrecognized Darden
stock units  granted  during the first quarter of fiscal 2005 (see Note 16). 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 equity forward contracts,  which are indexed to 200,000 shares of our common
stock,  have a $3,904  notional  amount and can only be net settled in cash. The
equity  forward  contracts  are  used to hedge  the  variability  in cash  flows
associated with the unvested  unrecognized Darden stock units. To the extent the
equity  forward  contracts are effective in offsetting  the  variability  of the
hedged cash flows, changes in the fair value of the equity forward contracts are
not  included  in  current  earnings  but  are  reported  as  accumulated  other
comprehensive  income  (loss).  A deferred gain of $2,185  related to the equity
forward  contracts was  recognized in  accumulated  other  comprehensive  income
(loss) at May 29,  2005.  As the Darden  stock units vest,  we will  effectively
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. A
gain of $471 was  recognized  in  earnings as a component  of  restaurant  labor
during fiscal 2005.

NOTE 10 - FINANCIAL INSTRUMENTS

The fair values of cash equivalents,  accounts receivable,  accounts payable and
short-term debt approximate their carrying amounts due to their short duration.

The carrying value and fair value of long-term debt at May 29, 2005 was $650,247
and $686,040,  respectively. The carrying value and fair value of long-term debt
at May 30,  2004 was  $653,349  and  $700,383,  respectively.  The fair value of
long-term debt 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.

NOTE 11 - STOCKHOLDERS' EQUITY

Treasury Stock
Our Board of Directors  has  authorized  us to  repurchase  up to 137.4  million
shares of our common stock. In fiscal 2005, 2004 and 2003, we purchased treasury
stock totaling $311,686, $235,462 and $213,311, respectively. At May 29, 2005, a
total of 120.6 million shares have been repurchased under the authorization. The
repurchased common stock is reflected as a reduction of stockholders' equity.


                                       30
<PAGE>


Stock Purchase/Loan Program
We have share ownership  guidelines for our officers.  To assist them in meeting
these  guidelines,  we  implemented  the 1998 Stock  Purchase/Option  Award Loan
Program  (Loan  Program)  in  conjunction  with our Stock  Option and  Long-Term
Incentive  Plan of 1995.  The Loan  Program  provided  loans to our officers and
awarded two options for every new share  purchased,  up to a maximum total share
value equal to a designated percentage of the officer's base compensation. Loans
are full recourse and interest  bearing,  with a maximum  principal amount of 75
percent  of the value of the stock  purchased.  The stock  purchased  is held on
deposit with us until the loan is repaid.  The interest rate for loans under the
Loan Program is fixed and is equal to the  applicable  federal rate for mid-term
loans with  semi-annual  compounding for the month in which the loan originates.
Interest is payable on a weekly basis. Loan principal is payable in installments
with 25  percent,  25 percent and 50 percent of the total loan due at the end of
the fifth, sixth and seventh years of the loan.  Effective July 30, 2002, and in
compliance  with the  Sarbanes-Oxley  Act of 2002,  we no longer issue new loans
under the Loan Program. We account for outstanding officer notes receivable as a
reduction of stockholders' equity.

Stockholders' Rights Plan
Under our Rights  Agreement  dated as of May 16, 2005,  each share of our common
stock has associated with it one right to purchase  one-thousandth of a share of
our Series A  Participating  Cumulative  Preferred  Stock at a purchase price of
$120, subject to adjustment under certain circumstances to prevent dilution. The
rights are  exercisable  when,  and are not  transferable  apart from our common
stock  until,  a person or group has  acquired  15 percent  or more,  or makes a
tender  offer for 15 percent  or more,  of our common  stock.  If the  specified
percentage  of our common  stock is then  acquired,  each right will entitle the
holder  (other than the acquiring  company) to receive,  upon  exercise,  common
stock of either us or the  acquiring  company  having a value equal to two times
the  exercise  price of the right.  The rights  are  redeemable  by our Board of
Directors under certain circumstances and expire on May 25, 2015.

Accumulated Other Comprehensive Income (Loss)
The components of accumulated other comprehensive income (loss) are as follows:
<TABLE>
<CAPTION>

                                                                               May 29, 2005      May 30, 2004
 -----------------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>              <C>
 Foreign currency translation adjustment                                            $(8,724)         $(10,174)
 Unrealized gains on derivatives, net of tax                                            345               587
 Minimum pension liability adjustment, net of tax                                      (497)             (586)
 -----------------------------------------------------------------------------------------------------------------
 Total accumulated other comprehensive income (loss)                                $(8,876)         $(10,173)
 =================================================================================================================
</TABLE>

Reclassification  adjustments  associated  with  pre-tax net  derivative  income
(losses)  realized in net earnings for fiscal  2005,  2004 and 2003  amounted to
$213, $(386) and $994, respectively.

NOTE 12 - LEASES

An analysis of rent expense incurred under operating leases is as follows:
<TABLE>
<CAPTION>
                                                                                   Fiscal Year
 -------------------------------------------------------------------------------------------------------------------
                                                                     2005             2004              2003
 -------------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>               <C>              <C>
 Restaurant minimum rent                                            $62,116           $56,462          $48,121
 Restaurant percentage rent                                           4,036             3,820            3,682
 Restaurant equipment minimum rent                                        7                57            5,719
 Restaurant rent averaging expense                                    7,636             7,522            9,482
 Transportation equipment                                             3,083             2,514            2,665
 Office equipment                                                     1,200             1,302            1,138
 Office space                                                         1,129             1,286            1,713
 Warehouse space                                                        325               315              303
 -------------------------------------------------------------------------------------------------------------------
 Total rent expense                                                 $79,532           $73,278          $72,823
 ===================================================================================================================
</TABLE>

The annual  non-cancelable  future lease commitments for each of the five fiscal
years subsequent to May 29, 2005 and thereafter are: $68,301 in 2006, $63,598 in
2007, $56,112 in 2008, $48,112 in 2009, $40,352 in 2010 and $143,068 thereafter,
for a cumulative total of $419,543.


                                       31
<PAGE>


NOTE 13 - INTEREST, NET

The components of interest, net, are as follows:
<TABLE>
<CAPTION>
                                                                                   Fiscal Year
 -------------------------------------------------------------------------------------------------------------------
                                                                     2005             2004                2003
 -------------------------------------------------------------------------------------------------------------------
<S>                                                                  <C>               <C>              <C>
 Interest expense                                                    $47,656           $47,710          $47,566
 Capitalized interest                                                 (3,182)           (3,500)          (3,470)
 Interest income                                                      (1,355)             (551)          (1,499)
 -------------------------------------------------------------------------------------------------------------------
 Interest, net                                                       $43,119           $43,659          $42,597
 ===================================================================================================================
</TABLE>

Capitalized  interest was computed  using our average  borrowing  rate.  We paid
$39,083,  $39,661 and $38,682,  for interest (excluding amounts  capitalized) in
fiscal 2005, 2004 and 2003, respectively.

NOTE 14 - INCOME TAXES

The  components  of earnings  before  income taxes and the  provision for income
taxes thereon are as follows:
<TABLE>
<CAPTION>

                                                                                   Fiscal Year
 -------------------------------------------------------------------------------------------------------------------
                                                                     2005             2004              2003
 -------------------------------------------------------------------------------------------------------------------

<S>                                                             <C>                 <C>              <C>
 Earnings before income taxes:
        U.S.                                                       $ 416,905         $ 328,577        $ 335,611
        Canada                                                         7,012             4,199            1,992
 -------------------------------------------------------------------------------------------------------------------
 Earnings before income taxes                                      $ 423,917         $ 332,776        $ 337,603
 -------------------------------------------------------------------------------------------------------------------
 Income taxes:
    Current:
        Federal                                                    $ 137,549            75,121        $  68,178
        State and local                                               20,438            13,663           11,396
        Canada                                                            46               131               24
 -------------------------------------------------------------------------------------------------------------------
      Total current                                                $ 158,033         $  88,915        $  79,598
 -------------------------------------------------------------------------------------------------------------------
    Deferred (principally U.S.)                                      (24,722)           16,688           32,026
 -------------------------------------------------------------------------------------------------------------------
 Total income taxes                                                $ 133,311         $ 105,603        $ 111,624
 ===================================================================================================================
</TABLE>

During fiscal 2005, 2004 and 2003, we paid income taxes of $111,386, $92,265 and
$65,398, respectively.

The following table is a reconciliation of the U.S. statutory income tax rate to
the  effective  income  tax  rate  included  in  the  accompanying  consolidated
statements of earnings:
<TABLE>
<CAPTION>

                                                                                   Fiscal Year
 -------------------------------------------------------------------------------------------------------------------
                                                                     2005             2004              2003
 -------------------------------------------------------------------------------------------------------------------
<S>                                                                  <C>               <C>              <C>
 U.S. statutory rate                                                 35.0%             35.0%            35.0%
 State and local income taxes, net of federal tax benefits            2.9               3.2              3.0
 Benefit of federal income tax credits                               (5.0)             (5.2)            (4.5)
 Other, net                                                          (1.5)             (1.3)            (0.4)
 -------------------------------------------------------------------------------------------------------------------
 Effective income tax rate                                           31.4%             31.7%            33.1%
 ===================================================================================================================
</TABLE>

                                       32
<PAGE>


The tax effects of temporary  differences  that give rise to deferred tax assets
and liabilities are as follows:
<TABLE>
<CAPTION>

                                                                            May 29, 2005          May 30, 2004
 -------------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>                   <C>
 Accrued liabilities                                                         $   18,016            $   13,286
 Compensation and employee benefits                                              76,680                63,234
 Deferred rent and interest income                                               33,149                28,094
 Asset disposition and restructuring liabilities                                  2,239                 2,651
 Other                                                                            4,537                 2,918
 -------------------------------------------------------------------------------------------------------------------
    Gross deferred tax assets                                                $  134,621            $  110,183
 -------------------------------------------------------------------------------------------------------------------
 Buildings and equipment                                                       (145,421)             (143,910)
 Prepaid pension costs                                                          (24,115)              (25,452)
 Prepaid interest                                                                (1,205)               (1,333)
 Capitalized software and other assets                                          (11,334)              (15,976)
 Other                                                                           (3,808)                 (944)
 -------------------------------------------------------------------------------------------------------------------
    Gross deferred tax liabilities                                           $ (185,883)           $ (187,615)
 -------------------------------------------------------------------------------------------------------------------
          Net deferred tax liabilities                                       $  (51,262)           $  (77,432)
 ===================================================================================================================
</TABLE>

A valuation allowance for deferred tax assets is provided when it is more likely
than not  that  some  portion  or all of the  deferred  tax  assets  will not be
realized.  Realization is dependent upon the generation of future taxable income
or the  reversal of deferred tax  liabilities  during the periods in which those
temporary  differences become deductible.  We consider the scheduled reversal of
deferred  tax  liabilities,  projected  future  taxable  income and tax planning
strategies  in making  this  assessment.  At May 29, 2005 and May 30,  2004,  no
valuation  allowance  has been  recognized  for deferred  tax assets  because we
believe that  sufficient  projected  future  taxable income will be generated to
fully utilize the benefits of these deductible amounts.

NOTE 15- RETIREMENT PLANS

Defined Benefit Plans and Postretirement Benefit Plan
Substantially  all of our employees are eligible to  participate in a retirement
plan. We sponsor non-contributory defined benefit pension plans for our salaried
employees, in which benefits are based on various formulas that include years of
service and compensation factors and for a group of hourly employees, in which a
fixed level of benefits is provided.  Pension plan assets are primarily invested
in  U.S.,  international  and  private  equities,  long  duration  fixed  income
securities  and real  assets.  Our policy is to fund,  at a minimum,  the amount
necessary on an actuarial  basis to provide for benefits in accordance  with the
requirements of the Employee Retirement Income Security Act of 1974, as amended.
We also sponsor a contributory  postretirement benefit plan that provides health
care benefits to our salaried  retirees.  During fiscal 2005,  2004 and 2003, we
funded the defined benefit pension plans in the amount of $103, $85 and $20,063,
respectively.  We expect to contribute approximately $200 to our defined benefit
pension plans during fiscal 2006.  During fiscal 2005,  2004 and 2003, we funded
the  postretirement  benefit  plan  in  the  amount  of  $472,  $172  and  $140,
respectively.  We expect to contribute  approximately $400 to our postretirement
benefit plan during fiscal 2006.


                                       33
<PAGE>


The  following  provides a  reconciliation  of the  changes in the plan  benefit
obligation,  fair value of plan assets and the funded  status of the plans as of
February 28, 2005 and 2004:
<TABLE>
<CAPTION>

                                                    Defined Benefit Plans              Postretirement Benefit Plan
---------------------------------------------------------------------------------------------------------------------
                                                      2005           2004                      2005           2004
---------------------------------------------------------------------------------------------------------------------
<S>                                               <C>            <C>                   <C>                <C>
Change in Benefit Obligation:
Benefit obligation at beginning of period          $143,689       $129,636              $   16,885        $  14,809
  Service cost                                        4,840          4,516                     699              626
  Interest cost                                       7,315          7,077                   1,006              920
  Participant contributions                              --             --                     145              128
  Benefits paid                                      (5,387)        (5,554)                   (544)            (300)
  Actuarial loss (gain)                               7,739          8,014                  (1,821)             702
---------------------------------------------------------------------------------------------------------------------
Benefit obligation at end of period                $158,196       $143,689              $   16,370        $  16,885
=====================================================================================================================

Change in Plan Assets:
Fair value at beginning of period                  $145,252       $115,962              $       --        $      --
  Actual return on plan assets                       18,162         34,759                      --               --
  Employer contributions                                 88             85                     399              172
  Participant contributions                              --             --                     145              128
  Benefits paid                                      (5,387)        (5,554)                   (544)            (300)
---------------------------------------------------------------------------------------------------------------------
Fair value at end of period                        $158,115       $145,252              $       --        $      --
=====================================================================================================================

Reconciliation of the Plan's Funded Status:
Funded status at end of period                     $    (81)      $  1,563              $  (16,370)       $ (16,885)
  Unrecognized prior service cost                       (22)          (479)                     --               --
  Unrecognized actuarial loss                        59,379         62,062                   4,292            6,458
  Contributions for March to May                         37             22                     150               77
---------------------------------------------------------------------------------------------------------------------
Prepaid (accrued) benefit costs                    $ 59,313       $ 63,168              $  (11,928)       $ (10,350)
=====================================================================================================================

Components of the Consolidated Balance
Sheets:
Prepaid benefit costs                              $ 63,475       $ 67,077              $       --        $      --
Accrued benefit costs                                (4,974)        (4,859)                (11,928)         (10,350)
Accumulated other comprehensive loss                    812            950                      --               --
---------------------------------------------------------------------------------------------------------------------
Net asset (liability) recognized                   $ 59,313       $ 63,168              $  (11,928)       $ (10,350)
=====================================================================================================================
</TABLE>

The  accumulated  benefit  obligation  for all pension  plans was  $150,841  and
$135,950 at May 29, 2005 and May 30, 2004, respectively. The accumulated benefit
obligation  and fair value of plan  assets for  pension  plans with  accumulated
benefit  obligations in excess of plan assets were $5,011 and $0,  respectively,
at February 28, 2005 and $4,881 and $0, respectively,  at February 28, 2004. The
projected   benefit   obligation  for  pension  plans  with  projected   benefit
obligations  in excess of plan assets  approximated  their  accumulated  benefit
obligation at February 28, 2005 and February 28, 2004.


                                       34
<PAGE>


The following table presents the weighted-average assumptions used to determine
benefit obligations and net expense:
<TABLE>
<CAPTION>

                                                           Defined Benefit Plans      Postretirement Benefit Plan
------------------------------------------------------------------------------------------------------------------
                                                            2005           2004             2005         2004
------------------------------------------------------------------------------------------------------------------
<S>                                                        <C>            <C>            <C>           <C>
Weighted-average assumptions used to determine
   benefit obligations at May 29 and May 30, (1)
    Discount rate                                            5.75%         6.00%            5.75%        6.00%
    Rate of future compensation increases                    3.75%         3.75%
                                                                                              N/A          N/A

Weighted-average assumptions used to determine
   net expense for fiscal years ended May 29
   and May 30, (2)
    Discount rate                                            6.00%         6.25%            6.00%        6.25%
    Expected long-term rate of return on plan assets         9.00%         9.00%              N/A          N/A
    Rate of future compensation increases                    3.75%         3.75%              N/A          N/A
==================================================================================================================
<FN>
(1)  Determined as of the end of fiscal year

(2)  Determined as of the beginning of fiscal year
</FN>
</TABLE>

We set the  discount  rate  assumption  annually  for each of the plans at their
valuation  dates  to  reflect  the  yield  of  high-quality   fixed-income  debt
instruments,  with lives that approximate the maturity of the plan benefits. The
expected  long-term  rate of return on plan  assets and  health  care cost trend
rates are based upon  several  factors,  including  our  historical  assumptions
compared with actual results,  an analysis of current market  conditions,  asset
allocations  and the views of leading  financial  advisers and  economists.  Our
target asset allocation is 35 percent U.S.  equities,  30 percent  high-quality,
long-duration  fixed-income  securities,  15 percent international  equities, 10
percent real assets and 10 percent private equities. We monitor our actual asset
allocation to ensure that it approximates our target allocation and believe that
our  long-term  asset   allocation  will  continue  to  approximate  our  target
allocation.   The  defined  benefit  pension  plans  have  the  following  asset
allocations  at  their   measurement  dates  of  February  28,  2005  and  2004,
respectively:

--------------------------------------------------------------------------------
                                                           2005         2004
--------------------------------------------------------------------------------
U.S. equities                                              37%          38%
High-quality, long-duration fixed-income securities        24%          26%
International equities                                     20%          18%
Real assets                                                13%          12%
Private equities                                            6%           6%
--------------------------------------------------------------------------------
Total                                                     100%          100%
================================================================================

Based on an analysis  performed in fiscal 2003,  we lowered our defined  benefit
plans'  expected  long-term rate of return on plan assets for fiscal 2004 to 9.0
percent,  a reduction  from its previous  level of 10.4 percent.  Our historical
ten-year rate of return on plan assets,  calculated  using the geometric  method
average of returns, is approximately 10.9 percent as of May 29, 2005.

The  discount  rate  and  expected  return  on plan  assets  assumptions  have a
significant  effect on amounts  reported for defined  benefit  pension  plans. A
quarter  percentage point change in the defined benefit plans' discount rate and
the expected  long-term rate of return on plan assets would increase or decrease
earnings before income taxes by $769 and $357, respectively.

The assumed health care cost trend rate increase in the  per-capita  charges for
benefits ranged from 10.0 percent to 11.0 percent for fiscal 2006,  depending on
the  medical  service  category.  The rates  gradually  decrease  to 5.0 percent
through fiscal 2011 and remain at that level thereafter.

The  assumed  health  care cost trend rate has a  significant  effect on amounts
reported for retiree health care plans. A  one-percentage-point  variance in the
assumed  health care cost trend rate would increase or decrease the total of the
service and interest cost components of net periodic postretirement benefit cost
by $620 and $485,  respectively,  and would increase or decrease the accumulated
postretirement benefit obligation by $3,507 and $2,744, respectively.


                                       35
<PAGE>


Components of net periodic benefit cost (income) are as follows:
<TABLE>
<CAPTION>

                                                         Defined Benefit Plans           Postretirement Benefit Plan
-----------------------------------------------------------------------------------------------------------------------
                                                     2005        2004         2003          2005      2004       2003
-----------------------------------------------------------------------------------------------------------------------
<S>                                               <C>         <C>         <C>           <C>       <C>         <C>
Service cost                                       $ 4,840     $ 4,516     $ 3,732       $   699   $   626    $   388
Interest cost                                        7,315       7,076       7,088         1,005       919        648
Expected return on plan assets                     (12,841)    (12,821)    (12,739)           --        --         --
Amortization of unrecognized prior service cost       (348)       (348)       (348)           --        29         18
Recognized net actuarial loss                        4,992       3,710       1,924           346       334         46
-----------------------------------------------------------------------------------------------------------------------
Net periodic benefit cost (income)                 $ 3,958     $ 2,133     $  (343)      $ 2,050   $ 1,908    $ 1,100
=======================================================================================================================
</TABLE>

The following benefit payments are expected to be paid:
--------------------------------------------------------------------------------
                                             Defined Benefit      Postretirement
                                                 Plans            Benefit Plan
--------------------------------------------------------------------------------
    2006                                      $  5,666               $   292
    2007                                         6,283                   340
    2008                                         6,756                   386
    2009                                         7,151                   453
    2010                                         7,628                   503
    2011-2015                                   46,695                 3,696

Defined Contribution Plan
We have a defined contribution plan covering most employees age 21 and older. We
match  contributions for participants with at least one year of service at up to
six percent of compensation,  based on our performance.  The match ranges from a
minimum of $0.25 to $1.20 for each dollar  contributed by the  participant.  The
plan had net assets of $498,125 at May 29,  2005 and  $390,461 at May 30,  2004.
Expense recognized in fiscal 2005, 2004 and 2003, was $2,713, $2,666 and $1,732,
respectively.  Employees  classified as "highly  compensated" under the Internal
Revenue  Code are not  eligible to  participate  in this plan.  Instead,  highly
compensated  employees are eligible to participate  in a separate  non-qualified
deferred  compensation  plan. This plan allows  eligible  employees to defer the
payment of all or part of their annual  salary and bonus and provides for awards
that approximate the matching  contributions and other amounts that participants
would  have  received  had they been  eligible  to  participate  in our  defined
contribution  and defined benefit plans.  Amounts payable to highly  compensated
employees under the  non-qualified  deferred  compensation plan totaled $108,407
and $88,569 at May 29, 2005 and May 30, 2004,  respectively.  These  amounts are
included in other current liabilities.

The defined  contribution plan includes an Employee Stock Ownership Plan (ESOP).
This ESOP originally borrowed $50,000 from third parties, with guarantees by us,
and borrowed  $25,000 from us at a variable  interest  rate.  The $50,000  third
party  loan  was  refinanced  in 1997 by a  commercial  bank's  loan to us and a
corresponding  loan from us to the ESOP.  Compensation  expense is recognized as
contributions   are   accrued.   In  addition  to  matching   plan   participant
contributions,  our  contributions  to the  plan are  also  made to pay  certain
employee incentive bonuses. Fluctuations in our stock price impact the amount of
expense  to be  recognized.  Contributions  to  the  plan,  plus  the  dividends
accumulated  on allocated and  unallocated  shares held by the ESOP, are used to
pay  principal,  interest and expenses of the plan.  As loan  payments are made,
common stock is allocated to ESOP  participants.  In fiscal 2005, 2004 and 2003,
the ESOP incurred  interest  expense of $677, $473 and $697,  respectively,  and
used  dividends  received  of  $1,235,  $454  and  $1,002,   respectively,   and
contributions  received from us of $3,389, $4,093 and $4,266,  respectively,  to
pay principal and interest on our debt.

These ESOP shares are included in average common shares outstanding for purposes
of  calculating  net earnings per share.  At May 29, 2005, the ESOP's debt to us
had a balance  of $26,010  with a variable  rate of  interest  of 3.42  percent;
$9,110 of the principal balance is due to be repaid no later than December 2007,
with the  remaining  $16,900 due to be repaid no later than December  2014.  The
number  of our  common  shares  held in the  ESOP at May 29,  2005  approximated
9,810,000   shares,    representing    4,211,000    allocated   shares,    9,000
committed-to-be-released shares and 5,590,000 suspense shares.

At the end of  fiscal  2005,  the ESOP  borrowed  $1,606  from us at a  variable
interest  rate and acquired an  additional  50,000  shares of our common  stock,
which were held in suspense within the ESOP at May 29, 2005. The loan, which had
a variable interest rate of 3.42 percent at May 29, 2005, is due to be repaid no
later than December 2018. The shares  acquired under this loan are accounted for
in accordance with Statement of Position (SOP) 93-6,  "Employers  Accounting for
Employee Stock Ownership Plans."  Fluctuations in our stock price are recognized
as  adjustments  to common stock and surplus when the shares are committed to be
released.  These  ESOP  shares  are not

                                       36
<PAGE>


considered  outstanding until they are committed to be released and,  therefore,
have been  excluded for purposes of  calculating  basic and diluted net earnings
per share at May 29,  2005.  The fair value of these  shares at May 29, 2005 was
$1,624.

NOTE 16 - STOCK PLANS

We maintain two active stock option and stock grant plans under which new awards
may still be issued:  the 2002 Stock  Incentive  Plan (2002  Plan) and the Stock
Plan for Directors  (Director  Stock Plan).  We also have two other stock option
and stock grant  plans  under  which we no longer can make new awards,  although
awards outstanding under the plans may still vest and be exercised in accordance
with their terms:  the Stock Option and Long-Term  Incentive  Plan of 1995 (1995
Plan) and the Restaurant Management and Employee Stock Plan of 2000 (2000 Plan).
All of the plans are administered by the Compensation  Committee of the Board of
Directors.  The 2002 Plan  provides for the  issuance of up to 8,550,000  common
shares in connection with the granting of non-qualified stock options, incentive
stock options, stock appreciation rights, stock awards,  restricted stock, RSUs,
stock awards and other  stock-based  awards to key  employees  and  non-employee
directors.  Up to 1,700,000  shares may be granted  under the plan as restricted
stock and RSUs.  The  Director  Stock Plan  provides  for the  issuance of up to
375,000  common  shares out of our treasury in  connection  with the granting of
non-qualified   stock  options,   restricted  stock  and  RSUs  to  non-employee
directors.  The 1995 Plan provided for the issuance of up to  33,300,000  common
shares  in  connection  with  the  granting  of  non-qualified   stock  options,
restricted stock or RSUs to key employees. No new awards could be made under the
1995 Plan after  September 30, 2004.  The 2000 Plan provided for the issuance of
up to  5,400,000  shares of common  stock out of our  treasury as  non-qualified
stock options,  restricted  stock, or RSUs. As noted above, no new awards may be
made under the 1995 Plan and the 2000 Plan,  although awards  outstanding  under
those plans may still vest and be  exercised  in  accordance  with their  terms.
Under all of the plans,  stock  options are granted at a price equal to the fair
value of the shares at the date of grant,  for terms not exceeding ten years and
have various  vesting periods at the discretion of the  Compensation  Committee.
Outstanding options generally vest over one to four years.  Restricted stock and
RSUs granted  under the 1995,  2000 and 2002 Plans  generally  vest over periods
ranging  from three to five  years and no sooner  than one year from the date of
grant.  The restricted  period for certain  grants may be  accelerated  based on
performance goals established by the Compensation Committee.

We also maintain the  Compensation  Plan for Non-Employee  Directors.  This plan
provides that non-employee  directors may elect to receive their annual retainer
and meeting fees in any combination of cash, deferred cash, or our common shares
and  authorizes  the issuance of up to 105,981 common shares out of our treasury
for this  purpose.  The common shares are issued under the plan at a value equal
to the market price in consideration of foregone retainer and meeting fees.

The per share weighted-average fair value of stock options granted during fiscal
2005, 2004 and 2003 was $7.75, $6.83 and $9.01, respectively.

Stock option activity during the periods indicated was as follows:
<TABLE>
<CAPTION>

                                                      Weighted-Average                          Weighted-Average
                                     Options           Exercise Price           Options          Exercise Price
                                   Exercisable            Per Share           Outstanding           Per Share
 -------------------------------------------------------------------------------------------------------------------
<S>                                   <C>                    <C>             <C>                    <C>
 Balance at May 26, 2002               12,152,538             $ 8.31           26,922,535             $ 11.44
 -------------------------------------------------------------------------------------------------------------------
 Options granted                                                                4,200,086             $ 25.99
 Options exercised                                                             (3,132,894)            $  9.23
 Options cancelled                                                             (1,298,094)            $ 16.86
 -------------------------------------------------------------------------------------------------------------------
 Balance at May 25, 2003               13,481,166             $ 9.59           26,691,633             $ 13.73
 -------------------------------------------------------------------------------------------------------------------
 Options granted                                                                3,336,655             $ 20.36
 Options exercised                                                             (3,463,615)            $ 10.01
 Options cancelled                                                               (911,036)            $ 18.98
 -------------------------------------------------------------------------------------------------------------------
 Balance at May 30, 2004               14,380,195             $11.00           25,653,637             $ 14.91
 -------------------------------------------------------------------------------------------------------------------
 Options granted                                                                2,147,650             $ 21.88
 Options exercised                                                             (6,614,735)            $ 10.51
 Options cancelled                                                               (607,550)            $ 21.20
 -------------------------------------------------------------------------------------------------------------------
  Balance at May 29, 2005              11,879,660             $13.28           20,579,002             $ 16.86
 -------------------------------------------------------------------------------------------------------------------
</TABLE>

The following table provides information  regarding  exercisable and outstanding
options at May 29, 2005:

                                       37
<PAGE>
<TABLE>
<CAPTION>

                                                                                                     Weighted-
                                                Weighted-                           Weighted-         Average
          Range of                               Average                             Average         Remaining
          Exercise              Options          Exercise          Options          Exercise        Contractual
      Price Per Share         Exercisable    Price Per Share     Outstanding     Price Per Share    Life (Years)
 -------------------------------------------------------------------------------------------------------------------
     <S>                      <C>               <C>              <C>                <C>                 <C>
      $ 4.00 - $10.00           1,696,626        $  6.42           1,696,626         $  6.42             1.9
      $10.01 - $15.00           6,933,340          11.97           6,933,340           11.97             4.2
      $15.01 - $20.00           2,185,049          17.07           5,746,334           17.87             6.9
      $20.01 - $25.00             559,929          22.93           3,497,264           21.93             8.5
        Over $25.00               504,716          27.20           2,705,438           27.28             7.3
 -------------------------------------------------------------------------------------------------------------------
                               11,879,660        $ 13.28          20,579,002          $16.86             5.9
 ===================================================================================================================
</TABLE>

We granted  restricted stock and RSUs during fiscal 2005, 2004 and 2003 totaling
500,917, 513,305 and 275,610,  respectively. The per share weighted-average fair
value of the awards granted in fiscal 2005, 2004 and 2003 was $21.82, $19.45 and
$26.53,  respectively.  After giving  consideration  to vesting  terms,  assumed
forfeiture rates and subsequent  forfeiture  adjustments,  compensation  expense
recognized  in net  earnings for awards  granted in fiscal  2005,  2004 and 2003
amounted to $7,464, $4,198 and $3,579, respectively.

During fiscal 2005, we issued Darden stock units to certain key  employees.  The
Darden  stock  units were  granted at a value  equal to the market  price of our
common  stock  at the date of grant  and will be  settled  in cash at the end of
their  vesting  periods,  which range  between four and five years,  at the then
market price of our common stock.  Compensation expense is measured based on the
market price of our common  stock each period and is amortized  over the vesting
period.  At May 29,  2005,  we had 436,870  Darden stock units  outstanding.  No
Darden stock units were outstanding during fiscal 2004 and 2003.

NOTE 17 - EMPLOYEE STOCK PURCHASE PLAN

We maintain  the Darden  Restaurants  Employee  Stock  Purchase  Plan to provide
eligible  employees  who have  completed one year of service  (excluding  senior
officers  subject to Section  16(b) of the  Securities  Exchange Act of 1934) an
opportunity  to  purchase  shares  of  our  common  stock,  subject  to  certain
limitations.  Under  the  plan,  up to an  aggregate  of  3,600,000  shares  are
available  for  purchase  by  employees  at the lower of 85  percent of the fair
market  value of our common  stock as of the first or last  trading days of each
quarterly  participation  period.  During fiscal 2005, 2004 and 2003,  employees
purchased  shares of common stock under the plan totaling  266,407,  319,299 and
261,409,  respectively.  At May 29, 2005,  an additional  1,692,748  shares were
available for issuance.

No  compensation  expense has been  recognized for shares issued under the plan.
The impact of recognizing compensation expense for purchases made under the plan
in accordance with the fair value method  specified in SFAS No. 123 is less than
$900,  net of related  tax  effects,  in fiscal  2005,  2004 and 2003 and had no
impact on reported basic or diluted net earnings per share.

NOTE 18 - COMMITMENTS AND CONTINGENCIES

As collateral for performance on contracts and as credit guarantees to banks and
insurers,  we were contingently liable for guarantees of subsidiary  obligations
under  standby  letters  of credit.  At May 29,  2005 and May 30,  2004,  we had
$72,677  and  $72,480,  respectively,  of standby  letters of credit  related to
workers'  compensation  and  general  liabilities  accrued  in our  consolidated
financial  statements.  At May 29,  2005 and May 30,  2004,  we had  $13,829 and
$15,896,  respectively,  of  standby  letters of credit  related to  contractual
operating lease  obligations  and other payments.  All standby letters of credit
are renewable annually.

At May 29, 2005 and May 30,  2004,  we had $1,768 and $4,346,  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 these potential payments  discounted at
our pre-tax cost of capital at May 29, 2005 and May 30, 2004, amounted to $1,395
and  $3,131,  respectively.  We  did  not  accrue  for  the  guarantees,  as the
likelihood of the third parties defaulting on the assignment agreements was less
than probable.  In the event of default by a third party,  the indemnity  and/or
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

                                       38
<PAGE>

us to repossess the building and personal property. These guarantees expire over
their respective lease terms, which range from fiscal 2007 through fiscal 2012.

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.

Like other restaurant  companies and retail  employers,  we have been faced in a
few states with  allegations of purported  class-wide wage and hour  violations.
The following is a brief  description of the more  significant of these matters.
In  view  of the  inherent  uncertainties  of  litigation,  the  outcome  of any
unresolved  matter described below cannot be predicted at this time, nor can the
amount of any potential loss be reasonably estimated.

In March 2003 and March 2002, two purported  class action  lawsuits were brought
against us in the Superior Court of Orange  County,  California by three current
and former hourly restaurant  employees alleging  violations of California labor
laws with  respect to providing  meal and rest  breaks.  Although we continue to
believe we provided the required meal and rest breaks to our employees, to avoid
potentially  costly  and  protracted  litigation,  we agreed  during  the second
quarter  of fiscal  2005 to settle  both  lawsuits  and a similar  case filed in
Sacramento County, for approximately  $9,500. Terms of the settlement,  which do
not include any admission of liability by us, have received preliminary judicial
approval,  but completion of the settlement may not occur for several months. We
recorded  settlement  expenses  associated with these lawsuits of  approximately
$4,500 during  fiscal 2005 and $5,000 during fiscal 2004,  which are included in
selling,  general and administrative  expenses.  The settlement amounts of these
lawsuits are included in other current liabilities at May 29, 2005.

In August 2003, three former  employees in Washington filed a similar  purported
class action in  Washington  State  Superior  Court in Spokane  County  alleging
violations of Washington  labor laws with respect to providing rest breaks.  The
Court  stayed  the  action  and  ordered  the  plaintiffs   into  our  mandatory
arbitration program; the plaintiffs' motion for reconsideration was not granted,
and their  appeal of the  denial of  reconsideration  was also not  granted.  We
believe we provided the required meal and rest breaks to our  employees,  and we
intend to vigorously defend our position in this case.


Beginning in 2002, a total of five  purported  class action  lawsuits  have been
filed in  Superior  Courts of  California  (two each in Los  Angeles  County and
Orange County, and one in Sacramento County) in which the plaintiffs allege that
they and other current and former  service  managers,  beverage and  hospitality
managers and culinary  managers were improperly  classified as exempt  employees
under  California  labor laws.  The  plaintiffs  seek unpaid  overtime wages and
penalties. Two of the cases have been removed to arbitration under our mandatory
arbitration  program,  and we are  seeking  to cause the  remaining  cases to be
stayed pending  resolution of the  earliest-filed  cases. We believe we properly
classified  these  employees  as exempt  under  California  law and we intend to
vigorously defend against all claims in these lawsuits.



                                       39
<PAGE>


NOTE 19 - QUARTERLY DATA (UNAUDITED)

The following table summarizes unaudited quarterly data for fiscal 2005 and
2004:
<TABLE>
<CAPTION>

                                                                  Fiscal 2005 - Quarters Ended
 -------------------------------------------------------------------------------------------------------------------
                                                Aug. 29       Nov. 28       Feb. 27        May 29        Total
 -------------------------------------------------------------------------------------------------------------------
<S>                                            <C>           <C>           <C>           <C>           <C>
 Sales                                          $1,278,644    $1,229,373    $1,375,879    $1,394,214    $5,278,110
 Earnings before income taxes                      108,086        63,368       130,824       121,639       423,917
 Net earnings                                       71,012        42,975        92,630        83,989       290,606
 Net earnings per share:
    Basic                                             0.45         0.27           0.59          0.54          1.85
    Diluted                                           0.44         0.26           0.56          0.52          1.78
 Dividends paid per share                               --         0.04             --          0.04          0.08
 Stock price:
     High                                            22.61        27.70          29.63         33.11         33.11
     Low                                             19.30        20.33          26.17         25.78         19.30
 ===================================================================================================================
</TABLE>
<TABLE>
<CAPTION>

                                                                  Fiscal 2004 - Quarters Ended
 -------------------------------------------------------------------------------------------------------------------
                                                Aug. 24       Nov. 23       Feb. 22      May 30 (1)      Total
 -------------------------------------------------------------------------------------------------------------------
<S>                                           <C>           <C>           <C>           <C>           <C>
 Sales                                         $1,259,689    $1,142,543    $1,241,952    $1,359,171    $5,003,355
 Earnings before income taxes                     101,977        44,688       111,404        74,707       332,776
 Net earnings                                      67,351        30,053        77,088        52,681       227,173
 Net earnings per share:
    Basic                                            0.41          0.18          0.47          0.33          1.39
    Diluted                                          0.40          0.18          0.45          0.32          1.34
 Dividends paid per share                              --          0.04           --           0.04          0.08
 Stock price:
     High                                           21.62         22.77         22.50         25.60         25.60
     Low                                            17.80         18.25         18.48         21.40         17.80
 ===================================================================================================================
<FN>

(1)  Earnings before income taxes includes asset  impairment  charges of $36,526
     ($22,372  after-tax) for long-lived asset  impairments  associated with the
     closing of six Bahama Breeze restaurants and the write-down of the carrying
     value of four other Bahama Breeze restaurants,  one Olive Garden restaurant
     and one Red Lobster restaurant, which continued to operate. Earnings before
     income taxes also includes  charges of $1,112 ($681  after-tax)  related to
     severance  payments  made to certain  restaurant  employees  and exit costs
     associated with the closing of six Bahama Breeze restaurants.
</FN>
</TABLE>

                                        40
<PAGE>


Five-Year Financial Summary
(In thousands, except per share data)
<TABLE>
<CAPTION>

                                                                       Fiscal Year Ended
 -----------------------------------------------------------------------------------------------------------------------
                                                  May 29,         May 30,       May 25,       May 26,       May 27,
 Operating Results                                  2005         2004 (1)         2003          2002          2001
 -----------------------------------------------------------------------------------------------------------------------
<S>                                              <C>             <C>            <C>          <C>            <C>
 Sales                                           $5,278,110       $5,003,355     $4,654,971  $4,366,911     $3,992,419
 -----------------------------------------------------------------------------------------------------------------------
 Costs and expenses:
    Cost of sales:
      Food and beverage                            1,593,709       1,526,875      1,449,162   1,384,481      1,302,926
      Restaurant labor                             1,695,805       1,601,258      1,485,046   1,373,416      1,261,837
      Restaurant expenses                            806,314         774,806        713,699     636,575        566,234
 -----------------------------------------------------------------------------------------------------------------------
 Total cost of sales, excluding restaurant
    depreciation and amortization (2)             $4,095,828      $3,902,939     $3,647,907  $3,394,472     $3,130,997
 Selling, general and administrative                 497,478         472,109        431,722     417,158        389,240
 Depreciation and amortization                       213,219         210,004        191,218     165,829        146,864
 Interest, net                                        43,119          43,659         42,597      36,585         30,664
 Asset impairment and restructuring charges
    (credits), net                                     4,549          41,868          3,924      (2,568)            --
 -----------------------------------------------------------------------------------------------------------------------
 Total costs and expenses                         $4,854,193      $4,670,579     $4,317,368  $4,011,476     $3,697,765
 -----------------------------------------------------------------------------------------------------------------------
  Earnings before income taxes                       423,917         332,776        337,603     355,435        294,654
 Income taxes                                        133,311         105,603        111,624     122,664        101,707
 -----------------------------------------------------------------------------------------------------------------------
 Net earnings                                     $  290,606      $  227,173     $  225,979  $  232,771     $  192,947
 -----------------------------------------------------------------------------------------------------------------------
 Net earnings per share:
    Basic                                         $     1.85      $     1.39     $     1.33  $     1.33     $     1.07
    Diluted                                       $     1.78      $     1.34     $     1.27  $     1.27     $     1.04

 -----------------------------------------------------------------------------------------------------------------------
 Average number of common shares outstanding, net of shares held in Treasury:
      Basic                                          156,700         163,500        170,300     174,700        179,600
      Diluted                                        163,400         169,700        177,400     183,500        185,600
 =======================================================================================================================
 Financial Position
 Total assets                                     $2,937,771      $2,780,348     $2,664,633  $2,529,736     $2,216,534
 Land, buildings and equipment                     2,351,454       2,250,616      2,157,132   1,926,947      1,779,515
 Working capital (deficit)                          (637,341)       (337,174)      (314,280)   (157,662)      (226,116)
 Long-term debt, less current portion                350,318         653,349        658,086     662,506        520,574
 Stockholders' equity                              1,273,019       1,175,288      1,130,055   1,069,606        978,954
 Stockholders' equity per outstanding shares            8.25            7.42           6.85        6.21           5.56
 =======================================================================================================================
 Other Statistics
 Cash flow from operations                        $  583,242      $  525,411     $  508,635  $  508,101     $  420,570
 Capital expenditures                                329,238         354,326        423,273     318,392        355,139
 Dividends paid                                       12,505          12,984         13,501       9,225          9,458
 Dividends paid per share                              0.080           0.080          0.080       0.053          0.053
 Advertising expense                                 214,608         210,989        200,020     184,163        177,998
 Stock price:
    High                                               33.11           25.60          27.83      29.767         19.660
    Low                                                19.30           17.80          16.46      15.400         10.292
    Close                                         $    32.80      $    22.50     $    18.35  $   25.030     $   19.267

 Number of employees                                 150,100         141,300        140,700     133,200        128,900
 Number of restaurants                                 1,381           1,325          1,271       1,211          1,168
 =======================================================================================================================
<FN>

(1)  Fiscal  year  2004  consisted  of 53 weeks  while all  other  fiscal  years
     consisted of 52 weeks.
(2)  Total cost of sales, excluding restaurant  depreciation and amortization of
     $198,422, $195,486, $177,127, $155,837 and $138,229, respectively.
</FN>
</TABLE>



                                       41

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>8
<FILENAME>form10k_exhibit21.txt
<DESCRIPTION>FORM 10K EXHIBIT 21 7-29-05
<TEXT>
                                                                      EXHIBIT 21


                    SUBSIDIARIES OF DARDEN RESTAURANTS, INC.



As of May 29,  2005,  we had four  "significant  subsidiaries",  as  defined  in
Regulation S-X, Rule 1-02(w), identified as follows:

GMRI, Inc., a Florida corporation,  doing business as Red Lobster, Olive Garden,
Bahama Breeze, Smokey Bones, and Seasons 52.

GMRI  Florida,  Inc.,  a  Florida  corporation,  owning  a  99  percent  limited
partnership interest in GMRI Texas, L.P.

GMRI Texas,  L.P., a Texas limited  partnership,  doing business as Red Lobster,
Olive Garden, Bahama Breeze and Smokey Bones.

GMR  Restaurants  of  Pennsylvania,  Inc.,  a  Pennsylvania  corporation,  doing
business as Red Lobster, Olive Garden, Bahama Breeze and Smokey Bones.

We also had other direct and indirect  subsidiaries  as of May 29, 2005. None of
these  subsidiaries  would  constitute a "significant  subsidiary" as defined in
Regulation S-X, Rule 1-02(w).







</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>9
<FILENAME>form10k_exhibit23.txt
<DESCRIPTION>FORM 10K EXHIBIT 23 7-29-05
<TEXT>
                                                                      EXHIBIT 23





            CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


The Board of Directors
Darden Restaurants, Inc.:

     We consent to incorporation by reference in the Registration  Statements on
Form  S-3  (Nos.  33-93854  and  333-41350)  and on Form  S-8  (Nos.  333-57410,
333-91579,  333-69037,  333-105056,  333-106278,  333-124363 and  333-122560) of
Darden  Restaurants,  Inc. of our reports  dated July 28, 2005,  relating to the
consolidated  balance sheets of Darden Restaurants,  Inc. and subsidiaries as of
May 29,  2005 and May 30,  2004,  and the  related  consolidated  statements  of
earnings,  changes in stockholders'  equity and accumulated other  comprehensive
income  (loss),  and cash flows for each of the fiscal  years in the  three-year
period ended May 29,  2005,  management's  assessment  of the  effectiveness  of
internal  control  over  financial  reporting  as  of  May  29,  2005,  and  the
effectiveness of internal  control over financial  reporting as of May 29, 2005,
which  reports are  incorporated  by reference to the  Registrant's  2005 Annual
Report to Shareholders filed as an exhibit to this Annual Report on Form 10-K of
Darden Restaurants, Inc.

                                  /s/ KPMG LLP

Orlando, Florida
July 28, 2005








</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24
<SEQUENCE>10
<FILENAME>form10k_exhibit24.txt
<DESCRIPTION>FORM 10K EXHIBIT 24 7-29-05
<TEXT>
                                                                     EXHIBIT 24

                                POWER OF ATTORNEY


     KNOW ALL BY THESE PRESENTS,  that the undersigned  constitutes and appoints
Paula J. Shives,  Clarence Otis, Jr. and Linda J. Dimopoulos,  and each of them,
his or her true and  lawful  attorneys-in-fact  and  agents,  with full power of
substitution and resubstitution, for and in his or her name, place and stead, in
any and all  capacities,  to sign the Annual  Report on Form 10-K for the fiscal
year ended May 29, 2005 and any and all amendments thereto and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange  Commission,  granting unto said  attorneys-in-fact  and
agents,  and each of them,  full power and  authority to do and perform each and
every act and thing requisite and necessary to be done in and about the premises
as fully to all intents and purposes as might or could be done in person, hereby
ratifying and  confirming all that said  attorneys-in-fact  and agents or any of
them, or their  substitute or substitutes may lawfully do or cause to be done by
virtue hereof.

         IN WITNESS WHEREOF, this Power of Attorney has been signed on this 11th
day of June, 2005, by the following persons.


By:  /s/ Leonard L. Berry                 By:  /s/ Cornelius McGillicuddy, III
---------------------------------            -----------------------------------
            Leonard L. Berry                       Cornelius McGillicuddy, III


By:  /s/ Odie C. Donald                    By:  /s/ Clarence Otis, Jr.
---------------------------------            -----------------------------------
         Odie C. Donald                             Clarence Otis, Jr.


By:  /s/ David H. Hughes                   By:  /s/ Michael D. Rose
--------------------------------             -----------------------------------
         David H. Hughes                            Michael D. Rose


By:  /s/ Charles A. Ledsinger, Jr.        By:  /s/ Marie A. Sastre
----------------------------------           -----------------------------------
         Charles A. Ledsinger, Jr.                 Maria A. Sastre


By:  /s/ Joe R. Lee                        By:  /s/ Jack A. Smith
----------------------------------           -----------------------------------
         Joe R. Lee                                 Jack A. Smith


By:  /s/ William M. Lewis, Jr.             By:  /s/ Blaine Sweatt, III
----------------------------------           -----------------------------------
         William M. Lewis, Jr.                      Blaine Sweatt, III


By:  /s/ Andrew H. Madsen                  By:  /s/ Rita P. Wilson
----------------------------------           -----------------------------------
         Andrew H. Madsen                           Rita P. Wilson








</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>11
<FILENAME>form10k_exhibit31a.txt
<DESCRIPTION>FORM 10K EXHIBIT 31A 7-29-05
<TEXT>

                                                                   EXHIBIT 31(a)

                  CERTIFICATION PURSUANT TO SECTION 302 OF THE
                           SARBANES-OXLEY ACT OF 2002


I, Clarence Otis, Jr., certify that:

1.   I have  reviewed  this  annual  report on Form 10-K of Darden  Restaurants,
     Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules  13a-15(e) and 15d-15(e))  and internal  control over
     financial  reporting  (as  defined  in  Exchange  Act Rules  13a-15(f)  and
     15d-15(f)) for the registrant and have:


     (a)  Designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     (b)  Designed such internal  control over  financial  reporting,  or caused
          such internal  control over  financial  reporting to be designed under
          our  supervision,   to  provide  reasonable  assurance  regarding  the
          reliability  of financial  reporting and the  preparation of financial
          statements for external purposes in accordance with generally accepted
          accounting principles;

     (c)  Evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     (d)  Disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          the case of this annual  report) that has materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

     (a)  All significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and


<PAGE>



     (b)  Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.


July 29, 2005


/s/ Clarence Otis, Jr.
-----------------------
Clarence Otis, Jr.
Chief Executive Officer





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31
<SEQUENCE>12
<FILENAME>form10k_exhibit31b.txt
<DESCRIPTION>FORM 10K EXHIBIT 31B 7-29-05
<TEXT>

                                                                   EXHIBIT 31(b)

                  CERTIFICATION PURSUANT TO SECTION 302 OF THE
                           SARBANES-OXLEY ACT OF 2002


I, Linda J. Dimopoulos, certify that:

1.   I have  reviewed  this  annual  report on Form 10-K of Darden  Restaurants,
     Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules  13a-15(e) and 15d-15(e))  and internal  control over
     financial  reporting  (as  defined  in  Exchange  Act Rules  13a-15(f)  and
     15d-15(f)) for the registrant and have:


     (a)  Designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     (b)  Designed such internal  control over  financial  reporting,  or caused
          such internal  control over  financial  reporting to be designed under
          our  supervision,   to  provide  reasonable  assurance  regarding  the
          reliability  of financial  reporting and the  preparation of financial
          statements for external purposes in accordance with generally accepted
          accounting principles;

     (c)  Evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     (d)  Disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          the case of this annual  report) that has materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

     (a)  All significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and


<PAGE>



     (b)  Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.

July 29, 2005


/s/ Linda J. Dimopoulos
---------------------------
Linda J. Dimopoulos
Senior Vice President and
Chief Financial Officer








</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>13
<FILENAME>form10k_exhibit32a.txt
<DESCRIPTION>FORM 10K EXHIBIT 32A 7-29-05
<TEXT>

                                                                   EXHIBIT 32(a)


                            CERTIFICATION PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



In connection with the Annual Report of Darden Restaurants,  Inc. ("Company") on
Form 10-K for the year  ended May 29,  2005,  as filed with the  Securities  and
Exchange Commission  ("Report"),  I, Clarence Otis, Jr., Chief Executive Officer
of the Company,  certify,  pursuant to 18 U.S.C. ss.1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that:

     1.   The Report fully  complies with the  requirements  of Section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     2.   The  information  contained  in the  Report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of the Company.



                                           /s/ Clarence Otis, Jr.
                                           ----------------------------------
                                               Clarence Otis, Jr.
                                               Chief Executive Officer
                                               July 29, 2005







</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>14
<FILENAME>form10k_exhibit32b.txt
<DESCRIPTION>FORM 10K EXHIBIT 32B 7-29-05
<TEXT>
                                                                  EXHIBIT 32(b)


                            CERTIFICATION PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Annual Report of Darden Restaurants,  Inc. ("Company") on
Form 10-K for the year  ended May 29,  2005,  as filed with the  Securities  and
Exchange Commission  ("Report"),  I, Linda J. Dimopoulos,  Senior Vice President
and Chief  Financial  Officer of the  Company,  certify,  pursuant  to 18 U.S.C.
ss.1350,  as adopted pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002,
that:

     1.   The Report fully  complies with the  requirements  of Section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     2.   The  information  contained  in the  Report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of the Company.



                                          /s/ Linda J. Dimopoulos
                                          ----------------------------
                                              Linda J. Dimopoulos
                                              Senior Vice President and
                                              Chief Financial Officer
                                              July 29, 2005


</TEXT>
</DOCUMENT>
</SUBMISSION>
