Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Feb. 28, 2016 | Mar. 15, 2016 | |
Document And Entity Information Abstract | ||
Entity Registrant Name | DARDEN RESTAURANTS INC | |
Entity Central Index Key | 940,944 | |
Current Fiscal Year End Date | --05-29 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Feb. 28, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 126,725,709 |
Consolidated Statements of Earn
Consolidated Statements of Earnings (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2016 | Feb. 22, 2015 | Feb. 28, 2016 | Feb. 22, 2015 | |
Income Statement [Abstract] | ||||
Sales | $ 1,847.5 | $ 1,730.9 | $ 5,143.3 | $ 4,885.7 |
Costs and expenses: | ||||
Food and beverage | 537.8 | 530.7 | 1,522.7 | 1,518.2 |
Restaurant labor | 572.5 | 535.6 | 1,632.3 | 1,550.7 |
Restaurant expenses | 305.2 | 276 | 855.1 | 825.7 |
Marketing expenses | 50.7 | 51.4 | 174.6 | 177.8 |
General and administrative expenses | 95.2 | 86.4 | 294.2 | 310.7 |
Depreciation and amortization | 67 | 79.6 | 223.4 | 238.4 |
Impairments and disposal of assets, net | 2.1 | (0.8) | (3.9) | (47.1) |
Total operating costs and expenses | 1,626.3 | 1,560.5 | 4,706.2 | 4,668.6 |
Operating income | 221.2 | 170.4 | 437.1 | 217.1 |
Interest, net | 83.1 | 23.3 | 162.8 | 168.3 |
Earnings before income taxes | 138.1 | 147.1 | 274.3 | 48.8 |
Income tax expense (benefit) | 29.9 | 18.7 | 55 | (29.5) |
Earnings from continuing operations | 108.2 | 128.4 | 219.3 | 78.3 |
Earnings (loss) from discontinued operations, net of tax expense (benefit) of $(0.3), $3.1, $2.9, and $322.4, respectively | (2.4) | 5.4 | 16.1 | 525.9 |
Net earnings | $ 105.8 | $ 133.8 | $ 235.4 | $ 604.2 |
Basic net earnings per share: | ||||
Earnings from continuing operations (in dollars per share) | $ 0.85 | $ 1.03 | $ 1.72 | $ 0.61 |
Earnings (loss) from discontinued operations (in dollars per share) | (0.02) | 0.04 | 0.12 | 4.10 |
Net earnings (in dollars per share) | 0.83 | 1.07 | 1.84 | 4.71 |
Diluted net earnings per share: | ||||
Earnings from continuing operations (in dollars per share) | 0.84 | 1.01 | 1.69 | 0.60 |
Earnings (loss) from discontinued operations (in dollars per share) | (0.02) | 0.04 | 0.13 | 4.04 |
Net earnings (in dollars per share) | $ 0.82 | $ 1.05 | $ 1.82 | $ 4.64 |
Average number of common shares outstanding: | ||||
Basic (in shares) | 127.6 | 124.6 | 127.7 | 128.2 |
Diluted (in shares) | 129.4 | 126.9 | 129.6 | 130.1 |
Dividends declared per common share (in dollars per share) | $ 0.5 | $ 0.55 | $ 1.6 | $ 1.65 |
Consolidated Statements of Ear3
Consolidated Statements of Earnings (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2016 | Feb. 22, 2015 | Feb. 28, 2016 | Feb. 22, 2015 | |
Income Statement [Abstract] | ||||
Earnings (losses) from discontinued operations, tax expense (benefit) | $ (0.3) | $ 3.1 | $ 2.9 | $ 322.4 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2016 | Feb. 22, 2015 | Feb. 28, 2016 | Feb. 22, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 105.8 | $ 133.8 | $ 235.4 | $ 604.2 |
Other comprehensive income (loss): | ||||
Foreign currency adjustment | 0 | (2) | 0.9 | 3.5 |
Change in fair value of derivatives and amortization of unrecognized gains and losses on derivatives, net of taxes of $0.0, $1.0, $14.3 and $16.9, respectively | 1.8 | 3 | 22.7 | 30.4 |
Amortization of unrecognized net actuarial (loss) gain, net of taxes of $0.0, $0.6, $(0.1) and $10.4, respectively, related to pension and other post-employment benefits | (0.1) | 1 | (0.3) | 16.4 |
Other comprehensive income | 1.7 | 2 | 23.3 | 50.3 |
Total comprehensive income | $ 107.5 | $ 135.8 | $ 258.7 | $ 654.5 |
Consolidated Statements of Com5
Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2016 | Feb. 22, 2015 | Feb. 28, 2016 | Feb. 22, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Change in fair value of derivatives, net of taxes of | $ 0 | $ 1 | $ 14.3 | $ 16.9 |
Amortization of unrecognized net actuarial loss, net of taxes of $(0.1), 0.6, (0.2) and $10.4, respectively, related to pension and other post-employment benefits | $ 0 | $ 0.6 | $ (0.1) | $ 10.4 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Feb. 28, 2016 | May. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 215.8 | $ 535.9 |
Receivables, net | 53.8 | 78 |
Inventories | 178.9 | 163.9 |
Prepaid income taxes | 24.7 | 18.9 |
Prepaid expenses and other current assets | 73 | 69.4 |
Deferred income taxes | 164.7 | 157.4 |
Assets held for sale | 19 | 32.9 |
Total current assets | 729.9 | 1,056.4 |
Land, buildings and equipment, net of accumulated depreciation and amortization of $1,799.0 and $2,304.6, respectively | 2,058.1 | 3,215.8 |
Goodwill | 872.3 | 872.4 |
Trademarks | 574.6 | 574.6 |
Other assets | 267 | 275.5 |
Total assets | 4,501.9 | 5,994.7 |
Current liabilities: | ||
Accounts payable | 190.6 | 198.8 |
Accrued payroll | 139.2 | 141.1 |
Accrued income taxes | 22.4 | 12.6 |
Other accrued taxes | 48.7 | 51.5 |
Unearned revenues | 401.3 | 328.6 |
Current portion of long-term debt | 8 | 15 |
Other current liabilities | 390.9 | 449.1 |
Total current liabilities | 1,201.1 | 1,196.7 |
Long-term debt, less current portion | 439.7 | 1,452.3 |
Deferred income taxes | 220.8 | 341.8 |
Deferred rent | 243.1 | 225.9 |
Other liabilities | 479 | 444.5 |
Total liabilities | 2,583.7 | 3,661.2 |
Stockholders’ equity: | ||
Common stock and surplus | 1,485.1 | 1,405.9 |
Retained earnings | 507.5 | 1,026 |
Treasury stock | (7.8) | (7.8) |
Accumulated other comprehensive income (loss) | (63.3) | (86.6) |
Unearned compensation | (3.3) | (4) |
Total stockholders’ equity | 1,918.2 | 2,333.5 |
Total liabilities and stockholders’ equity | $ 4,501.9 | $ 5,994.7 |
Consolidated Balance Sheets (U7
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions | Feb. 28, 2016 | May. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation and amortization | $ 1,799 | $ 2,304.6 |
Consolidated Statements of Chan
Consolidated Statements of Changes In Stockholders' Equity (Unaudited) - USD ($) $ in Millions | Total | Common Stock And Surplus | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Unearned Compensation |
Beginning balance at May. 25, 2014 | $ 2,156.9 | $ 1,302.2 | $ 995.8 | $ (7.8) | $ (128.1) | $ (5.2) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | 604.2 | 604.2 | ||||
Other comprehensive income | 50.3 | 50.3 | ||||
Dividends declared | (211.2) | (211.2) | ||||
Stock option exercises (1.9 shares) | 103.1 | 103.1 | ||||
Stock-based compensation | 21.3 | 21.3 | ||||
ESOP note receivable repayments | 0.8 | 0.8 | ||||
Income tax benefits credited to equity | 9.1 | 9.1 | ||||
Repurchases of common stock (10.0 shares) | (502.3) | (102.5) | (399.8) | |||
Issuance of stock under Employee Stock Purchase Plan and other plans (0.2 shares) | 5.6 | 5.6 | ||||
Ending balance at Feb. 22, 2015 | 2,237.8 | 1,338.8 | 989 | (7.8) | (77.8) | (4.4) |
Beginning balance at May. 31, 2015 | 2,333.5 | 1,405.9 | 1,026 | (7.8) | (86.6) | (4) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | 235.4 | 235.4 | 0 | |||
Other comprehensive income | 23.3 | 23.3 | ||||
Dividends declared | (204.8) | (204.8) | ||||
Stock option exercises (1.9 shares) | 75.6 | 75.6 | ||||
Stock-based compensation | 12.1 | 12.1 | ||||
ESOP note receivable repayments | 0.6 | 0.6 | ||||
Income tax benefits credited to equity | 14.5 | 14.5 | ||||
Repurchases of common stock (10.0 shares) | (140.2) | (26.5) | (113.7) | |||
Issuance of stock under Employee Stock Purchase Plan and other plans (0.2 shares) | 3.6 | 3.5 | 0.1 | |||
Separation of Four Corners Property Trust | (435.4) | (435.4) | ||||
Ending balance at Feb. 28, 2016 | $ 1,918.2 | $ 1,485.1 | $ 507.5 | $ (7.8) | $ (63.3) | $ (3.3) |
Consolidated Statements of Cha9
Consolidated Statements of Changes In Stockholders' Equity (Unaudited) (Parenthetical) - shares shares in Millions | 9 Months Ended | |
Feb. 28, 2016 | Feb. 22, 2015 | |
Statement of Stockholders' Equity [Abstract] | ||
Stock option exercised, shares | 1.9 | 2.8 |
Repurchases of common stock, shares | 2.3 | 10 |
Issuance of treasury stock under Employee Stock Purchase Plan and other plans, shares | 0.2 | 0.1 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Feb. 28, 2016 | Feb. 22, 2015 | |
Cash flows—operating activities | ||
Net earnings | $ 235.4 | $ 604.2 |
Earnings from discontinued operations, net of tax | (16.1) | (525.9) |
Adjustments to reconcile net earnings from continuing operations to cash flows: | ||
Depreciation and amortization | 223.4 | 238.4 |
Impairments and disposal of assets, net | 3.9 | 47.1 |
Amortization of loan costs and losses on interest-rate related derivatives | 3.4 | 6.7 |
Stock-based compensation expense | 29.2 | 41.3 |
Change in current assets and liabilities | 49.8 | 34 |
Contributions to pension and postretirement plans | (1.1) | (1.1) |
Change in cash surrender value of trust-owned life insurance | 8.7 | (5.8) |
Deferred income taxes | (65.6) | (0.4) |
Change in deferred rent | 18.1 | 17.2 |
Change in other assets and liabilities | (4.4) | 6.3 |
Loss on extinguishment of debt | 106.8 | 91.3 |
Other, net | 5.7 | 2.7 |
Net cash provided by operating activities of continuing operations | 597.2 | 556 |
Cash flows—investing activities | ||
Purchases of land, buildings and equipment | (172.8) | (230.1) |
Proceeds from disposal of land, buildings and equipment | 321.4 | 24.8 |
Proceeds from sale of marketable securities | 0.8 | 9.7 |
Increase in other assets | (12.8) | (13.2) |
Net cash provided by (used in) investing activities of continuing operations | 136.6 | (208.8) |
Cash flows—financing activities | ||
Proceeds from issuance of common stock | 79.2 | 107.1 |
Income tax benefits credited to equity | 14.5 | 9.1 |
Special cash distribution from Four Corners Property Trust | 315 | 0 |
Dividends paid | (204.8) | (209.3) |
Repurchases of common stock | (140.2) | (502.3) |
ESOP note receivable repayment | 0.6 | 0.8 |
Proceeds from issuance of short-term debt | 0 | 397.4 |
Repayments of short-term debt | 0 | (605) |
Repayment of long-term debt | (1,088.8) | (1,065.9) |
Principal payments on capital and financing leases | (2.5) | (1.7) |
Proceeds from financing lease obligation | 0 | 93.1 |
Net cash used in financing activities of continuing operations | (1,027) | (1,776.7) |
Cash flows—discontinued operations | ||
Net cash used in operating activities of discontinued operations | (33.2) | (216.6) |
Net cash provided by investing activities of discontinued operations | 6.3 | 1,984 |
Net cash (used in) provided by discontinued operations | (26.9) | 1,767.4 |
(Decrease) increase in cash and cash equivalents | (320.1) | 337.9 |
Cash and cash equivalents - beginning of period | 535.9 | 98.3 |
Cash and cash equivalents - end of period | 215.8 | 436.2 |
Cash flows from changes in current assets and liabilities | ||
Receivables, net | 25.3 | 18.7 |
Inventories | (15.2) | 55.6 |
Prepaid expenses and other current assets | (6.6) | (5) |
Accounts payable | (5) | (43.5) |
Accrued payroll | (1.9) | 8 |
Prepaid/accrued income taxes | 27 | (55.7) |
Other accrued taxes | (1.8) | (2.3) |
Unearned revenues | 78.4 | 75 |
Other current liabilities | (50.4) | (16.8) |
Change in current assets and liabilities | $ 49.8 | $ 34 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Feb. 28, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Darden Restaurants, Inc. (we, our, Darden or the Company) owns and operates full-service dining restaurants in the United States and Canada under the trade names Olive Garden®, LongHorn Steakhouse®, The Capital Grille®, Yard House®, Bahama Breeze®, Seasons 52®, and Eddie V's Prime Seafood® and Wildfish Seafood Grille® (collectively "Eddie V's"). Through subsidiaries, we own and operate all of our restaurants in the United States and Canada, except for 3 restaurants located in Central Florida and 3 restaurants in California that we manage, but are jointly owned with third parties, 6 franchised LongHorn Steakhouse restaurants located in the San Antonio, Texas area, 2 franchised U.S. airport restaurants and 10 franchised restaurants in Puerto Rico. We also have area development and franchise agreements with unaffiliated operators to develop and operate our brands primarily in Asia, the Middle East and Latin America. Pursuant to these agreements, as of February 28, 2016 , 30 franchised restaurants were in operation in the Middle East, Mexico, Brazil, Peru, El Salvador and Malaysia. We have prepared these consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally presented in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal recurring nature. We operate on a 52/53 week fiscal year, which ends on the last Sunday in May and our fiscal year ending May 29, 2016 will contain 52 weeks of operation. Operating results for the quarter ended February 28, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending May 29, 2016 . These statements should be read in conjunction with the consolidated financial statements and related notes to consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2015 . The accounting policies used in preparing these consolidated financial statements are the same as those described in our Form 10-K. We prepare our consolidated financial statements in conformity with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of sales and costs and expenses during the reporting period. Actual results could differ from those estimates. We have reclassified certain amounts in prior-period financial statements to conform to the current period's presentation. Included among these, in our consolidated statements of earnings, we revised the categories of our costs and expenses as follows: marketing expenses and general and administrative expenses, previously reported as components of selling, general and administrative expenses, are now reported as separate line items. Additionally, gains and losses on disposals of assets, previously reported as a component of selling, general and administrative expenses are now reported in impairments and disposal of assets, net. Application of New Accounting Standards In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). This update provides a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. This update was originally effective for annual and interim periods beginning after December 15, 2016, which would have required us to adopt these provisions in the first quarter of fiscal 2018. In July 2015, the FASB affirmed its proposal for a one-year deferral of the effective date. Early application is now permitted, but not before the original effective date. This update permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect this guidance will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory (Topic 330). This update requires inventory within the scope of the standard to be measured at the lower of cost and net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This update is effective for annual and interim periods beginning after December 15, 2016, which will require us to adopt these provisions in the first quarter of fiscal 2018. Early adoption is permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes (Topic 740). This update requires that deferred tax liabilities and assets be classified as noncurrent in a classified balance sheet. This update is effective for annual and interim periods beginning after December 15, 2016, which will require us to adopt these provisions in the first quarter of fiscal 2018. Early adoption is permitted. Other than the revised balance sheet presentation of deferred tax liabilities and assets, we do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This update requires a lessee to recognize on the balance sheet a liability to make lease payments and a corresponding right-of-use asset. The guidance also requires certain qualitative and quantitative disclosures about the amount, timing and uncertainty of cash flows arising from leases. This update is effective for annual and interim periods beginning after December 15, 2018, which will require us to adopt these provisions in the first quarter of fiscal 2020 using a modified retrospective approach. Early adoption is permitted. We have not yet selected a transition date nor have we determined the effect of the standard on our ongoing financial reporting. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718). This update was issued as part of the FASB’s simplification initiative and affects all entities that issue share-based payment awards to their employees. The amendments in this update cover such areas as the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification and the classification of those taxes paid on the statement of cash flows. This update is effective for annual and interim periods beginning after December 15, 2016, which will require us to adopt these provisions in the first quarter of fiscal 2018. This guidance will be applied either prospectively, retrospectively or using a modified retrospective transition method, depending on the area covered in this update. Early adoption is permitted. We have not yet selected a transition date nor have we determined the effect of the standard on our ongoing financial reporting. |
Real Estate Transactions
Real Estate Transactions | 9 Months Ended |
Feb. 28, 2016 | |
Real Estate Transactions [Abstract] | |
Real Estate Transactions | Real Estate Transactions As a result of a comprehensive evaluation for the monetization of our real estate portfolio, we undertook strategies to pursue sale-leaseback transactions of individual restaurant properties and our corporate headquarters and to transfer 424 of our restaurant properties into a REIT, with substantially all of the REIT’s initial assets being leased back to Darden. Sale leasebacks During fiscal 2015, we implemented a plan to pursue sale-leaseback transactions of 64 restaurant properties, 14 of which were completed in the fourth quarter of fiscal 2015, 49 were completed in the first nine months of fiscal 2016 , and the remaining property is expected to be completed in the fourth quarter of fiscal 2016. The 63 completed transactions generated net proceeds of $234.9 million resulting in deferred gains totaling $46.7 million which will be amortized over the expected leaseback periods on a straight-line basis. Additionally, during the nine months ended February 28, 2016 , we completed the sale leaseback of our corporate headquarters, generating net proceeds of $131.0 million resulting in a deferred gain of $6.3 million which will be amortized over the expected leaseback period on a straight-line basis. REIT Transaction - Separation of Four Corners On June 23, 2015, we announced our plan to separate our business into two separate and independent publicly traded companies. We accomplished this separation on November 9, 2015 with the pro rata distribution of one share of Four Corners Property Trust, Inc. (Four Corners) common stock for every three shares of Darden common stock to holders of Darden common stock. The separation, which was completed pursuant to a separation and distribution agreement between Darden and Four Corners, includes (i) the transfer of 6 LongHorn Steakhouse restaurants located in the San Antonio, Texas area (the LongHorn San Antonio Business) and 418 restaurant properties (the Four Corners Properties) to Four Corners; (ii) the issuance to us of all of the outstanding common stock of Four Corners and corresponding pro rata distribution to our shareholders of the outstanding shares of Four Corners common stock as a tax-free stock dividend; and (iii) a cash dividend of $315.0 million received by us from Four Corners from the proceeds of Four Corners’ term loan borrowings. We requested and received a private letter ruling from the Internal Revenue Service on certain issues relevant to the qualification of the spin-off as a tax-free transaction. Our shareholders’ equity decreased by $435.4 million as a result of the separation of Four Corners. The components of the decrease, principally comprised of the net book value of the net assets that we contributed to Four Corners in connection with the separation, included $834.8 million in net book value of fixed assets, $84.4 million consisting primarily of deferred tax liabilities, offset by the $315.0 million cash dividend received by us from Four Corners. Agreements with Four Corners We entered into lease agreements with Four Corners, pursuant to which we leased the Four Corners Properties on a triple-net basis with terms comparable to similar leases negotiated on an arm’s length basis. Under the lease agreements, our subsidiaries are the tenant while Four Corners is the landlord. The leases are triple-net leases that provide for an average initial term of approximately 15 years with stated annual rental payments and options to extend the leases for another 15 years . Under the lease agreements, the rent is subject to annual escalations of 1.5 percent , as well as, in most of the leases, a fair market value adjustment at the start of one of the renewal options. We entered into franchise agreements with Four Corners pursuant to which we provide certain franchising services to Four Corners’ subsidiary which operates the LongHorn San Antonio Business. The franchising services consist of licensing the right to use and display certain trademarks in connection with the operation of the LongHorn San Antonio Business, marketing services, training and access to certain LongHorn operating procedures. The fees and conditions of these franchising services are on terms comparable to similar franchising services negotiated on an arm’s length basis. Debt Retirement During the second and third quarters of fiscal 2016 , utilizing the proceeds of the Four Corners cash dividend, cash proceeds from the sale leasebacks of restaurant properties and our corporate headquarters and additional cash on hand, we retired approximately $1.01 billion aggregate principal of long-term debt (see Note 16 for additional details). |
Dispositions
Dispositions | 9 Months Ended |
Feb. 28, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Dispositions | Dispositions On July 28, 2014, we closed on the sale of 705 Red Lobster restaurants; however, as of February 28, 2016 , 2 of the properties remain subject to landlord consents. The two remaining consents represent approximately $1.6 million in proceeds and are expected to be satisfied by the end of fiscal 2016. All direct cash flows related to operating these businesses were eliminated at the date of sale. Our continuing involvement has primarily been limited to a transition services agreement, pursuant to which we provide limited, specific services for up to two years from the date of sale with minimal impact to our cash flows. In total, we have recognized a pre-tax gain on the sale of Red Lobster of $854.4 million , which is included in earnings from discontinued operations in our consolidated statements of earnings. For the quarters and nine months ended February 28, 2016 and February 22, 2015 , all gains on disposition, impairment charges and disposal costs, along with the sales, costs and expenses and income taxes attributable to these restaurants, have been aggregated in a single caption entitled “Earnings (loss) from discontinued operations, net of tax expense (benefit)” in our consolidated statements of earnings for all periods presented. No amounts for shared general and administrative operating support expense or interest expense were allocated to discontinued operations. Assets associated with those restaurants not yet disposed of, that are considered held for sale, have been segregated from continuing operations and presented as assets held for sale on our accompanying consolidated balance sheets. Earnings (loss) from discontinued operations, net of taxes in our accompanying consolidated statements of earnings are comprised of the following: Three Months Ended Nine Months Ended (in millions) February 28, 2016 February 22, 2015 February 28, 2016 February 22, 2015 Sales $ — $ — $ — $ 400.4 Costs and expenses: Restaurant and marketing expenses 1.0 (0.6 ) 1.3 353.4 Depreciation and amortization — — — 0.2 Other costs and expenses (1) 1.7 (7.9 ) (20.3 ) (801.5 ) Earnings (loss) before income taxes (2.7 ) 8.5 19.0 848.3 Income tax expense (benefit) (0.3 ) 3.1 2.9 322.4 Earnings (loss) from discontinued operations, net of tax $ (2.4 ) $ 5.4 $ 16.1 $ 525.9 (1) Amounts include the initial gain recognized on the sale of Red Lobster as well as gains recognized upon satisfaction of landlord consents. Assets classified as held for sale on our accompanying consolidated balance sheets as of February 28, 2016 and May 31, 2015 , consisted of land, buildings and equipment with carrying amounts of $19.0 million and $32.9 million , respectively. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Feb. 28, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Cash paid for interest and income taxes are as follows: Nine Months Ended (in millions) February 28, 2016 February 22, 2015 Interest paid, net of amounts capitalized $ 123.8 $ 107.9 Income taxes paid, net of refunds 105.8 203.7 For the nine months ended February 28, 2016 , interest paid includes payments of $68.7 million associated with the retirement of long-term debt (see Note 16 - Long-Term Debt for further information) in addition to $6.3 million of interest accrued through the date of retirement. For the nine months ended February 22, 2015 , interest paid includes payments of $44.0 million associated with the retirement of long-term debt in addition to $12.8 million of interest accrued through the date of the retirement. For the nine months ended February 22, 2015, income taxes paid includes tax payments associated with the gain on the sale of Red Lobster. Non-cash investing and financing activities are as follows: Nine Months Ended (in millions) February 28, 2016 February 22, 2015 Increase in land, buildings and equipment through accrued purchases $ 14.1 $ 18.9 Net book value of assets distributed in Four Corners separation, net of deferred tax liabilities 750.4 — |
Income Taxes
Income Taxes | 9 Months Ended |
Feb. 28, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective income tax rate for the quarter ended February 28, 2016 was 21.7 percent compared to an effective income tax rate of 12.7 percent for the quarter ended February 22, 2015 . The effective income tax rate for the nine months ended February 28, 2016 was 20.1 percent compared to an effective income tax rate benefit of 60.5 percent for the nine months ended February 22, 2015 . Excluding the tax impact of costs related to implementation of our real estate plan, strategic action plan and other costs and debt retirement costs recognized during fiscal 2016 and 2015, our effective tax rate would have been approximately 27.1 percent and 19.2 percent for the quarters ended February 28, 2016 and February 22, 2015 , respectively, and approximately 26.1 percent and 19.5 percent for the nine months ended February 28, 2016 and February 22, 2015 , respectively. The change in the effective income tax rate for the quarter and nine months ended February 28, 2016 as compared to the quarter and nine months ended February 22, 2015 , excluding these impacts, is primarily attributable to the impact of FICA tax credits for employee reported tips and Work Opportunity Tax Credits on lower earnings before income taxes for the quarter and nine months ended February 22, 2015 . Included in our remaining balance of unrecognized tax benefits is $ 1.4 million related to tax positions for which it is reasonably possible that the total amounts could change within the next twelve months based on the outcome of examinations or as a result of the expiration of the statute of limitations for specific jurisdictions. |
Net Earnings per Share
Net Earnings per Share | 9 Months Ended |
Feb. 28, 2016 | |
Earnings Per Share [Abstract] | |
Net Earnings per Share | Net Earnings per Share Outstanding stock options, restricted stock and equity-settled performance stock units granted by us represent the only dilutive effect reflected in diluted weighted average shares outstanding, none of which impact the numerator of the diluted net earnings per share computation. Stock options, restricted stock and equity-settled performance stock units excluded from the calculation of diluted net earnings per share because the effect would have been anti-dilutive, are as follows: Three Months Ended Nine Months Ended (in millions) February 28, February 22, February 28, February 22, Anti-dilutive stock-based compensation awards 0.4 — 0.3 1.5 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Feb. 28, 2016 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders' Equity Stockholders’ Rights Plan In connection with the announced REIT transaction, our Board approved a Rights Agreement dated June 23, 2015, to deter any person from acquiring ownership of more than 9.8 percent of our common stock during the period leading up to the REIT transaction. Under the Rights Agreement, each share of our common stock had associated with it one right to purchase one thousandth of a share of our Series A Junior Participating Cumulative Preferred Stock at a purchase price of $156.26 per share, subject to adjustment under certain circumstances to prevent dilution. On November 10, 2015, the Rights expired by their terms following completion of the spin-off of Four Corners. As a result, each share of our common stock is no longer accompanied by a Right. The holders of common stock are not entitled to any payment as a result of the expiration of the Rights Agreement and the Rights issued thereunder. Accumulated Other Comprehensive Income (Loss) (AOCI) The components of accumulated other comprehensive income (loss), net of tax, for the quarters ended February 28, 2016 and February 22, 2015 are as follows: (in millions) Foreign Currency Translation Adjustment Unrealized Gains (Losses) on Marketable Securities Unrealized Gains (Losses) on Derivatives Benefit Plan Funding Position Accumulated Other Comprehensive Income (Loss) Balance at November 29, 2015 $ (0.8 ) $ 0.1 $ 1.8 $ (66.1 ) $ (65.0 ) Gain (loss) — — 1.8 — 1.8 Reclassification realized in net earnings — — — (0.1 ) (0.1 ) Balance at February 28, 2016 $ (0.8 ) $ 0.1 $ 3.6 $ (66.2 ) $ (63.3 ) Balance at November 23, 2014 $ 0.8 $ 0.1 $ (23.0 ) $ (57.7 ) $ (79.8 ) Gain (loss) (2.0 ) — 1.4 — (0.6 ) Reclassification realized in net earnings — — 1.6 1.0 2.6 Balance at February 22, 2015 $ (1.2 ) $ 0.1 $ (20.0 ) $ (56.7 ) $ (77.8 ) The components of accumulated other comprehensive income (loss), net of tax, for the nine months ended February 28, 2016 and February 22, 2015 are as follows: (in millions) Foreign Currency Translation Adjustment Unrealized Gains (Losses) on Marketable Securities Unrealized Gains (Losses) on Derivatives Benefit Plan Funding Position Accumulated Other Comprehensive Income (Loss) Balance at May 31, 2015 $ (1.7 ) $ 0.1 $ (19.1 ) $ (65.9 ) $ (86.6 ) Gain (loss) 0.9 — 1.7 — 2.6 Reclassification realized in net earnings — — 21.0 (0.3 ) 20.7 Balance at February 28, 2016 $ (0.8 ) $ 0.1 $ 3.6 $ (66.2 ) $ (63.3 ) Balance at May 25, 2014 $ (4.7 ) $ 0.1 $ (50.4 ) $ (73.1 ) $ (128.1 ) Gain (loss) (3.8 ) — 2.1 14.6 12.9 Reclassification realized in net earnings 7.3 — 28.3 1.8 37.4 Balance at February 22, 2015 $ (1.2 ) $ 0.1 $ (20.0 ) $ (56.7 ) $ (77.8 ) Reclassifications related to foreign currency translation for the nine months ended February 22, 2015 , primarily relate to the disposition of Red Lobster and are included in earnings (loss) from discontinued operations, net of tax expense (benefit) in our consolidated statement of earnings. The following table presents the amounts and line items in our consolidated statements of earnings where adjustments reclassified from AOCI into net earnings were recorded. Amount Reclassified from AOCI into Net Earnings Three Months Ended Nine Months Ended (in millions) AOCI Components Location of Gain (Loss) Recognized in Earnings February 28, February 22, February 28, February 22, Derivatives Equity contracts (1) — — 2.1 (0.9 ) Interest rate contracts (2) — (2.5 ) (37.4 ) (44.4 ) Total before tax $ — $ (2.5 ) $ (35.3 ) $ (45.3 ) Tax benefit — 0.9 14.3 17.0 Net of tax $ — $ (1.6 ) $ (21.0 ) $ (28.3 ) Benefit plan funding position Recognized net actuarial loss - pension/postretirement plans (3) $ (0.7 ) $ (0.6 ) $ (2.1 ) $ (1.9 ) Recognized net actuarial gain (loss) - other plans (4) 0.8 (1.0 ) 2.5 (1.3 ) Total before tax $ 0.1 $ (1.6 ) $ 0.4 $ (3.2 ) Tax benefit (expense) — 0.6 (0.1 ) 1.4 Net of tax $ 0.1 $ (1.0 ) $ 0.3 $ (1.8 ) (1) Primarily included in restaurant labor costs and general and administrative expenses. See Note 9 for additional details. (2) Included in interest, net, on our consolidated statements of earnings. Reclassifications for the nine months ended February 28, 2016 and February 22, 2015 primarily related to the acceleration of hedge loss amortization resulting from the pay down of the associated long-term debt. (3) Included in the computation of net periodic benefit costs - pension and postretirement plans, which is a component of restaurant labor expenses and general and administrative expenses. See Note 8 for additional details. (4) Included in the computation of net periodic benefit costs - other plans, which is a component of general and administrative expenses. |
Retirement Plans
Retirement Plans | 9 Months Ended |
Feb. 28, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Retirement Plans | Retirement Plans Components of net periodic benefit cost are as follows: Defined Benefit Plans Three Months Ended Nine Months Ended (in millions) February 28, February 22, February 28, February 22, Service cost $ — $ 0.4 $ — $ 0.9 Interest cost 2.7 2.5 8.0 7.5 Expected return on plan assets (3.7 ) (3.8 ) (10.9 ) (11.4 ) Recognized net actuarial loss 0.7 0.6 2.1 1.9 Net periodic benefit (credit) cost $ (0.3 ) $ (0.3 ) $ (0.8 ) $ (1.1 ) Postretirement Benefit Plan Three Months Ended Nine Months Ended (in millions) February 28, February 22, February 28, February 22, Service cost $ — $ 0.1 $ 0.1 $ 0.4 Interest cost 0.2 — 0.6 0.8 Amortization of unrecognized prior service credit (1.2 ) (1.6 ) (3.6 ) (1.6 ) Recognized net actuarial loss 0.3 0.3 0.9 0.6 Net periodic benefit (credit) cost $ (0.7 ) $ (1.2 ) $ (2.0 ) $ 0.2 |
Derivative Instruments And Hedg
Derivative Instruments And Hedging Activities | 9 Months Ended |
Feb. 28, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments And Hedging Activities | Derivative Instruments and Hedging Activities We enter into derivative instruments for risk management purposes only, including derivatives designated as hedging instruments as provided by FASB ASC Topic 815, Derivatives and Hedging, and those utilized as economic hedges. We use financial derivatives to manage interest rate and compensation risks inherent in our business operations. To the extent our cash-flow hedging instruments are effective in offsetting the variability of the hedged cash flows, and otherwise meet the cash flow hedge accounting criteria required by Topic 815 of the FASB ASC, changes in the derivatives’ fair value are not included in current earnings but are included in accumulated other comprehensive income (loss), net of tax. These changes in fair value will be reclassified into earnings at the time of the forecasted transaction. Ineffectiveness measured in the hedging relationship is recorded currently in earnings in the period in which it occurs. To the extent our fair-value hedging instruments are effective in mitigating changes in fair value, and otherwise meet the fair value hedge accounting criteria required by Topic 815 of the FASB ASC, gains and losses in the derivatives’ fair value are included in current earnings, as are the gains and losses of the related hedged item. To the extent the cash flow hedge accounting criteria are not met, the derivative contracts are utilized as economic hedges and changes in the fair value of such contracts are recorded currently in earnings in the period in which they occur. By using these instruments, we expose ourselves, from time to time, to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us. We minimize this credit risk by entering into transactions with high quality counterparties. We currently do not have any provisions in our agreements with counterparties that would require either party to hold or post collateral in the event that the market value of the related derivative instrument exceeds a certain limit. As such, the maximum amount of loss due to counterparty credit risk we would incur at February 28, 2016 , if counterparties to the derivative instruments failed completely to perform, would approximate the values of derivative instruments currently recognized as assets on our consolidated balance sheet. Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates, commodity prices, or the market price of our common stock. We minimize this market risk by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken. During the quarter ended February 28, 2016 , in connection with the repayment of our 2017 and 2021 senior notes, we settled our interest-rate swap agreements for a gain of $4.1 million . The swap agreements effectively swapped the fixed-rate obligations for floating-rate obligations, thereby mitigating changes in fair value of the related debt prior to maturity. The swap agreements were designated as fair value hedges of the related debt and met the requirements to be accounted for under the short-cut method, resulting in no ineffectiveness in the hedging relationship. During the quarters ended February 28, 2016 and February 22, 2015 , $0.0 million and $0.5 million was recorded as a reduction to interest expense related to net swap settlements, respectively. During the nine months ended February 28, 2016 and February 22, 2015 , $1.7 million and $2.3 million was recorded as a reduction to interest expense related to the net swap settlements, respectively. We enter into equity forward contracts to hedge the risk of changes in future cash flows associated with the unvested, unrecognized Darden stock units. The equity forward contracts will be settled at the end of the vesting periods of their underlying Darden stock units, which range between four and five years. The contracts were initially designated as cash flow hedges to the extent the Darden stock units are unvested and, therefore, unrecognized as a liability in our financial statements. As of February 28, 2016 , we were party to equity forward contracts that were indexed to 0.9 million shares of our common stock, at varying forward rates between $40.69 per share and $60.60 per share, extending through September 2020 . The forward contracts can only be net settled in cash. As the Darden stock units vest, we will de-designate that portion of the equity forward contract that no longer qualifies for hedge accounting and changes in fair value associated with that portion of the equity forward contract will be recognized in current earnings. We periodically incur interest on the notional value of the contracts and receive dividends on the underlying shares. These amounts are recognized currently in earnings as they are incurred or received. We entered into equity forward contracts to hedge the risk of changes in future cash flows associated with recognized, cash-settled performance stock units and employee-directed investments in Darden stock within the non-qualified deferred compensation plan. The equity forward contracts are indexed to 0.2 million shares of our common stock at forward rates between $41.03 and $44.73 per share, can only be net settled in cash and expire between fiscal 2016 and 2019 . We did not elect hedge accounting with the expectation that changes in the fair value of the equity forward contracts would offset changes in the fair value of the performance stock units and Darden stock investments in the non-qualified deferred compensation plan within general and administrative expenses in our consolidated statements of earnings. Under the provisions of the equity forward agreements, the equity notional amount, initial price and number of shares in our contracts were adjusted to take into effect the dilutive impact of the spin-off of Four Corners. The notional and fair values of our derivative contracts are as follows: (in millions) Notional Values Balance Sheet Location Fair Values Derivative Assets Derivative Liabilities February 28, May 31, February 28, May 31, February 28, May 31, Derivative contracts designated as hedging instruments Equity forwards $ 17.2 $ 11.4 (1) $ 1.4 $ 0.4 $ — $ — Interest rate related — 200.0 (1) — 3.6 — — $ 1.4 $ 4.0 $ — $ — Derivative contracts not designated as hedging instruments Equity forwards $ 30.2 $ 51.7 (1) $ 2.8 $ 1.3 $ — $ — $ 2.8 $ 1.3 $ — $ — Total derivative contracts $ 4.2 $ 5.3 $ — $ — (1) Derivative assets and liabilities are included in receivables, net, prepaid expenses and other current assets and other current liabilities, as applicable, on our consolidated balance sheets. The effects of derivative instruments in cash flow hedging relationships in the consolidated statements of earnings are as follows: (in millions) Amount of Gain (Loss) Recognized in AOCI (effective portion) Location of Gain (Loss) Reclassified from AOCI to Earnings Amount of Gain (Loss) Reclassified from AOCI to Earnings (effective portion) Location of Gain (Loss) Recognized in Earnings (ineffective portion) (1) Amount of Gain (Loss) Recognized in Earnings (ineffective portion) Three Months Ended Three Months Ended Three Months Ended Type of Derivative February 28, February 22, February 28, February 22, February 28, February 22, Equity $ 1.8 $ 1.4 (2) $ — $ — (2) $ 0.2 $ 0.2 Interest rate — — Interest, net — (2.5 ) Interest, net — — $ 1.8 $ 1.4 $ — $ (2.5 ) $ 0.2 $ 0.2 (in millions) Amount of Gain (Loss) Recognized in AOCI (effective portion) Location of Gain (Loss) Reclassified from AOCI to Earnings Amount of Gain (Loss) Reclassified from AOCI to Earnings (effective portion) Location of Gain (Loss) Recognized in Earnings (ineffective portion) (1) Amount of Gain (Loss) Recognized in Earnings (ineffective portion) Nine Months Ended Nine Months Ended Nine Months Ended Type of Derivative February 28, February 22, February 28, February 22, February 28, February 22, Equity $ 1.7 $ 2.1 (2) $ 2.1 $ (0.9 ) (2) $ 0.7 $ 0.8 Interest rate — — Interest, net (37.4 ) (44.4 ) Interest, net — — $ 1.7 $ 2.1 $ (35.3 ) $ (45.3 ) $ 0.7 $ 0.8 (1) Generally, all of our derivative instruments designated as cash flow hedges have some level of ineffectiveness, which is recognized currently in earnings. However, as these amounts are generally nominal and our consolidated financial statements are presented “in millions,” these amounts may appear as zero in this tabular presentation. (2) Location of the gain (loss) reclassified from AOCI to earnings as well as the gain (loss) recognized in earnings for the ineffective portion of the hedge is restaurant labor expenses and general and administrative expenses. The effects of derivatives not designated as hedging instruments in the consolidated statements of earnings are as follows: (in millions) Location of Gain (Loss) Recognized in Earnings on Derivatives Amount of Gain (Loss) Recognized in Earnings Three Months Ended Nine Months Ended February 28, 2016 February 22, 2015 February 28, 2016 February 22, 2015 Equity forwards Restaurant labor expenses $ 1.7 $ 1.7 2.7 2.9 Equity forwards General and administrative expenses 3.4 3.9 5.6 6.7 $ 5.1 $ 5.6 $ 8.3 $ 9.6 Based on the fair value of our derivative instruments designated as cash flow hedges as of February 28, 2016 , we expect to reclassify $0.6 million of net gains on derivative instruments from accumulated other comprehensive income (loss) to earnings during the next 12 months based on the maturity of our equity forward contracts. However, the amounts ultimately realized in earnings will be dependent on the fair value of the contracts on the settlement dates. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Feb. 28, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The fair values of cash equivalents, receivables, net, accounts payable and short-term debt approximate their carrying amounts due to their short duration. The following tables summarize the fair values of financial instruments measured at fair value on a recurring basis as of February 28, 2016 and May 31, 2015 : Items Measured at Fair Value at February 28, 2016 (in millions) Fair value of assets (liabilities) Quoted prices in active market for identical assets (liabilities) (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Fixed-income securities: Corporate bonds (1) $ 2.0 $ — $ 2.0 $ — U.S. Treasury securities (2) 5.0 5.0 — — Mortgage-backed securities (1) 1.0 — 1.0 — Derivatives: Equity forwards (3) 4.2 — 4.2 — Interest rate swaps (4) — — — — Total $ 12.2 $ 5.0 $ 7.2 $ — Items Measured at Fair Value at May 31, 2015 (in millions) Fair value of assets (liabilities) Quoted prices in active market for identical assets (liabilities) (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Fixed-income securities: Corporate bonds (1) $ 2.2 $ — $ 2.2 $ — U.S. Treasury securities (2) 5.0 5.0 — — Mortgage-backed securities (1) 1.6 — 1.6 — Derivatives: Equity forwards (3) 1.7 — 1.7 — Interest rate swaps (4) 3.6 — 3.6 — Total $ 14.1 $ 5.0 $ 9.1 $ — (1) The fair value of these securities is based on closing market prices of the investments when applicable, or, alternatively, valuations utilizing market data and other observable inputs, inclusive of the risk of nonperformance. (2) The fair value of our U.S. Treasury securities is based on closing market prices. (3) The fair value of our equity forwards is based on the closing market value of Darden stock, inclusive of the risk of nonperformance. (4) The fair value of our interest rate lock and swap agreements is based on current and expected market interest rates, inclusive of the risk of nonperformance. The carrying value and fair value of long-term debt, including the amounts included in current liabilities, as of February 28, 2016 , was $447.7 million and $488.0 million , respectively. The carrying value and fair value of long-term debt, including the amounts included in current liabilities, as of May 31, 2015 , was $1.47 billion and $1.57 billion , respectively. The fair value of long-term debt, which is classified as Level 2 in the fair value hierarchy, is determined based on market prices or, if market prices are not available, the present value of the underlying cash flows discounted at our incremental borrowing rates. The fair value of non-financial assets measured at fair value on a non-recurring basis, which is classified as Level 3 in the fair value hierarchy, is determined based on appraisals or sales prices of comparable assets and estimates of future cash flows. As of February 28, 2016 , non-financial assets measured at fair value on a non-recurring basis with a carrying value of $5.4 million , primarily related to two underperforming restaurants, were determined to have no fair value resulting in an impairment charge of $5.4 million . As of May 31, 2015 , non-financial assets measured at fair value on a non-recurring basis with a carrying value of $70.5 million , primarily related to restaurant assets involved in sale-leaseback arrangements, were written down to their fair value of $55.4 million resulting in an impairment charge of $15.1 million . |
Commitments And Contingencies
Commitments And Contingencies | 9 Months Ended |
Feb. 28, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies As collateral for performance on contracts and as credit guarantees to banks and insurers, we are contingently liable for guarantees of subsidiary obligations under standby letters of credit. As of February 28, 2016 and May 31, 2015 , we had $119.2 million and $124.2 million , respectively, of standby letters of credit related to workers’ compensation and general liabilities accrued in our consolidated financial statements. As of February 28, 2016 and May 31, 2015 , we had $12.8 million and $14.0 million , respectively, of standby letters of credit related to contractual operating lease obligations and other payments. All standby letters of credit are renewable annually. As of February 28, 2016 and May 31, 2015 , we had $137.4 million and $147.7 million , respectively, of guarantees associated with leased properties that have been assigned to third parties. These amounts represent the maximum potential amount of future payments under the guarantees. The fair value of the maximum potential future payments discounted at our weighted-average cost of capital as of February 28, 2016 and May 31, 2015 , amounted to $106.9 million and $113.4 million , respectively. We did not record a liability for the guarantees, as the likelihood of the third parties defaulting on the assignment agreements was deemed to be remote. In the event of default by a third party, the indemnity and default clauses in our assignment agreements govern our ability to recover from and pursue the third party for damages incurred as a result of its default. We do not hold any third-party assets as collateral related to these assignment agreements, except to the extent that the assignment allows us to repossess the building and personal property. Assuming exercise of all option periods, these guarantees expire over their respective lease terms, which range from fiscal 2016 through fiscal 2044 . We are subject to private lawsuits, administrative proceedings and claims that arise in the ordinary course of our business. A number of these lawsuits, proceedings and claims may exist at any given time. These matters typically involve claims from guests, employees and others related to operational issues common to the restaurant industry, and can also involve infringement of, or challenges to, our trademarks. While the resolution of a lawsuit, proceeding or claim may have an impact on our financial results for the period in which it is resolved, we believe that the final disposition of the lawsuits, proceedings and claims in which we are currently involved, either individually or in the aggregate, will not have a material adverse effect on our financial position, results of operations or liquidity. |
Segment Information
Segment Information | 9 Months Ended |
Feb. 28, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We manage our restaurant brands, Olive Garden, LongHorn Steakhouse, The Capital Grille, Yard House, Bahama Breeze, Seasons 52 and Eddie V's in North America as operating segments. The brands operate principally in the U.S. within full-service dining. We aggregate our operating segments into reportable segments based on a combination of the size, economic characteristics and sub-segment of full-service dining within which each brand operates. We have four reportable segments: 1) Olive Garden, 2) LongHorn Steakhouse, 3) Fine Dining and 4) Other Business. The Olive Garden segment includes the results of our company-owned Olive Garden restaurants in the U.S. and Canada. The LongHorn Steakhouse segment includes the results of our company-owned LongHorn Steakhouse restaurants in the U.S. The Fine Dining segment aggregates our premium brands that operate within the fine-dining sub-segment of full-service dining and includes the results of our company-owned The Capital Grille and Eddie V's restaurants in the U.S. The Other Business segment aggregates our remaining brands and includes the results of our company-owned Yard House, Seasons 52 and Bahama Breeze restaurants in the U.S. This segment also includes results from our franchises and consumer-packaged goods sales. External sales are derived principally from food and beverage sales, we do not rely on any major customers as a source of sales and the customers and long-lived assets of our reportable segments are predominantly in the U.S. There were no material transactions among reportable segments. Our management uses segment profit as the measure for assessing performance of our segments. Segment profit includes revenues and expenses directly attributable to restaurant-level results of operations (sometimes referred to as restaurant-level earnings). These expenses include food and beverage costs, restaurant labor costs, restaurant expenses and marketing expenses (collectively "restaurant and marketing expenses"). The following tables reconcile our segment results to our consolidated results reported in accordance with GAAP: (in millions) Olive Garden LongHorn Steakhouse Fine Dining Other Business Corporate Consolidated For the three months ended February 28, 2016 Sales $ 1,019.8 $ 425.5 $ 146.0 $ 256.2 $ — $ 1,847.5 Restaurant and marketing expenses 799.7 340.5 112.1 213.9 — 1,466.2 Segment profit $ 220.1 $ 85.0 $ 33.9 $ 42.3 $ — $ 381.3 Depreciation and amortization $ 27.1 $ 15.7 $ 6.7 $ 12.8 $ 4.7 $ 67.0 Impairments and disposal of assets, net (1.9 ) (0.2 ) — — — (2.1 ) (in millions) Olive Garden LongHorn Steakhouse Fine Dining Other Business Corporate Consolidated For the three months ended February 22, 2015 Sales $ 957.1 $ 403.8 $ 138.5 $ 231.5 $ — $ 1,730.9 Restaurant and marketing expenses 755.7 337.9 107.6 192.5 — 1,393.7 Segment profit $ 201.4 $ 65.9 $ 30.9 $ 39.0 $ — $ 337.2 Depreciation and amortization $ 37.8 $ 17.9 $ 6.6 $ 11.8 $ 5.5 $ 79.6 Impairments and disposal of assets, net (2.1 ) (0.8 ) — — 3.7 0.8 (in millions) Olive Garden LongHorn Steakhouse Fine Dining Other Business Corporate Consolidated For the nine months ended February 28, 2016 Sales $ 2,856.8 $ 1,174.4 $ 382.5 $ 729.6 $ — $ 5,143.3 Restaurant and marketing expenses 2,287.6 977.5 308.3 611.3 — 4,184.7 Segment profit $ 569.2 $ 196.9 $ 74.2 $ 118.3 $ — $ 958.6 Depreciation and amortization $ 96.9 $ 52.5 $ 20.3 $ 37.8 $ 15.9 $ 223.4 Impairments and disposal of assets, net (1.9 ) (1.5 ) 0.7 6.6 — 3.9 Segments assets 951.0 980.2 852.7 996.8 721.2 4,501.9 Capital expenditures 67.2 40.7 12.7 49.4 2.8 172.8 (in millions) Olive Garden LongHorn Steakhouse Fine Dining Other Business Corporate Consolidated For the nine months ended February 22, 2015 Sales $ 2,752.3 $ 1,106.5 $ 362.9 $ 664.0 $ — $ 4,885.7 Restaurant and marketing expenses 2,262.1 944.5 295.5 570.3 — 4,072.4 Segment profit $ 490.2 $ 162.0 $ 67.4 $ 93.7 $ — $ 813.3 Depreciation and amortization $ 112.6 $ 53.1 $ 19.6 $ 35.1 $ 18.0 $ 238.4 Impairments and disposal of assets, net 13.6 — — 21.0 12.5 47.1 Segments assets 1,672.1 1,275.5 866.5 1,061.8 1,115.7 5,991.6 Capital expenditures 94.6 55.0 17.2 59.9 3.4 230.1 Reconciliation of segment profit to earnings from continuing operations before income taxes: Three Months Ended Nine Months Ended (in millions) February 28, 2016 February 22, 2015 February 28, 2016 February 22, 2015 Segment profit $ 381.3 $ 337.2 $ 958.6 $ 813.3 Less general and administrative expenses (95.2 ) (86.4 ) (294.2 ) (310.7 ) Less depreciation and amortization (67.0 ) (79.6 ) (223.4 ) (238.4 ) Less impairments and disposal of assets, net 2.1 (0.8 ) (3.9 ) (47.1 ) Less interest, net (83.1 ) (23.3 ) (162.8 ) (168.3 ) Earnings before income taxes $ 138.1 $ 147.1 $ 274.3 $ 48.8 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Feb. 28, 2016 | |
Share-based Compensation [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation We grant stock options for a fixed number of shares to certain employees and directors with an exercise price equal to the fair value of the shares at the date of grant. We also grant restricted stock, restricted stock units, and performance stock units with a fair value generally determined based on our closing stock price on the date of grant. In addition, we also grant cash settled stock units (Darden Stock Units) and cash settled performance stock units, which are classified as liabilities and are marked to market as of the end of each period. Separation-Related Adjustments Pursuant to the provisions of our stock plans, in connection with the separation of Four Corners we made certain adjustments to the exercise price and number of our share-based compensation awards, with the intention of preserving the intrinsic value of the awards immediately prior to the separation. These adjustments are reflected in the activity tables below. The separation-related adjustments did not have a material impact on either compensation expense or the potentially dilutive securities to be considered in the calculation of diluted earnings per share of common stock. The weighted-average fair value of non-qualified stock options and the related assumptions used in the Black-Scholes option pricing model were as follows. For the nine months ended February 28, 2016 , all stock option grants occurred prior to the separation of Four Corners . Stock Options Granted Nine Months Ended February 28, 2016 February 22, 2015 Weighted-average fair value (1) $ 12.72 $ 9.41 Dividend yield 3.3 % 4.5 % Expected volatility of stock 28.0 % 37.3 % Risk-free interest rate 1.9 % 2.1 % Expected option life (in years) 6.5 6.5 Weighted-average exercise price per share (1) $ 64.85 $ 40.43 (1) Weighted averages were adjusted for the impact of the separation of Four Corners. The following table presents a summary of our stock-based compensation activity for the nine months ended February 28, 2016 : (in millions) Stock Options Restricted Stock/ Restricted Stock Units Darden Stock Units Cash-Settled Performance Stock Units Equity-Settled Outstanding beginning of period 7.71 0.10 1.37 0.38 — Awards issued in conversion as a result of the separation of Four Corners 0.97 — 0.18 0.05 — Awards granted 0.43 0.06 0.32 — 0.19 Awards exercised (2.12 ) (0.03 ) (0.33 ) (0.15 ) — Awards forfeited (0.16 ) — (0.07 ) (0.10 ) — Performance unit adjustment — — — 0.03 — Outstanding end of period 6.83 0.13 1.47 0.21 0.19 We recognized expense from stock-based compensation as follows: Three Months Ended Nine Months Ended (in millions) February 28, February 22, February 28, February 22, Stock options $ 1.6 $ 2.4 $ 6.5 $ 17.1 Restricted stock/restricted stock units 0.5 0.5 1.4 1.6 Darden stock units 4.9 4.1 11.7 8.9 Cash-settled performance stock units 3.4 3.6 5.4 11.6 Equity-settled performance stock units 0.9 — 2.0 — Employee stock purchase plan 0.3 0.3 0.9 1.0 Director compensation program/other 0.3 0.5 1.3 1.1 Total stock-based compensation expense $ 11.9 $ 11.4 $ 29.2 $ 41.3 |
Impairment and Disposal of Asse
Impairment and Disposal of Assets, Net | 9 Months Ended |
Feb. 28, 2016 | |
Asset Impairment Charges [Abstract] | |
Impairment and Disposal of Assets, Net | Impairments and Disposal of Assets, Net Impairments and disposal of assets, net in our accompanying consolidated statements of earnings are comprised of the following: Three Months Ended Nine Months Ended (in millions) February 28, 2016 February 22, 2015 February 28, 2016 February 22, 2015 Restaurant impairments $ — $ 0.3 $ 9.2 $ 34.1 Disposal gains (2.1 ) (3.7 ) (5.3 ) (3.9 ) Other — 4.2 — 16.9 Impairments and disposal of assets, net $ (2.1 ) $ 0.8 $ 3.9 $ 47.1 Restaurant impairments for the nine months ended February 28, 2016 were primarily related to underperforming restaurants and restaurant assets involved in individual sale-leaseback transactions. For the quarter and nine months ended February 22, 2015 , restaurant impairments were primarily related to underperforming restaurants. Disposal gains during the quarters and nine months ended February 28, 2016 and February 22, 2015 were primarily related to the sale of land parcels and sale-leaseback transactions. Other impairment charges for the quarter ended February 22, 2015 related to the expected disposal of excess land parcels adjacent to our corporate headquarters which are held for sale. During the nine months ended February 22, 2015 , we also recognized impairments related to our lobster aquaculture project and a corporate airplane in connection with the closure of our aviation department. Impairment charges were measured based on the amount by which the carrying amount of these assets exceeded their fair value. Fair value is generally determined based on appraisals or sales prices of comparable assets and estimates of future cash flows. These amounts are included in impairments and disposal of assets, net as a component of earnings from continuing operations in the accompanying consolidated statements of earnings. |
Workforce Reduction Costs
Workforce Reduction Costs | 9 Months Ended |
Feb. 28, 2016 | |
Restructuring and Related Activities [Abstract] | |
Workforce Reduction Costs | Workforce Reduction Costs During fiscal 2014 and 2015, we performed reviews of our operations and support structure resulting in changes in our growth plans and related support structure needs. As a result, we had workforce reductions and program spending cuts throughout fiscal 2014 and 2015. In accordance with these actions, we incurred employee termination benefits costs and other costs which are included in general and administrative expenses in our consolidated statement of earnings as follows: Three Months Ended Nine Months Ended (in millions) February 28, 2016 (3) February 22, February 28, 2016 (3) February 22, Employee termination benefits (1) $ — $ 0.7 $ 0.2 $ 27.7 Other (2) (0.1 ) — (0.1 ) 0.4 Total $ (0.1 ) $ 0.7 $ 0.1 $ 28.1 (1) Includes salary and stock-based compensation expense. (2) Includes postemployment medical, outplacement and relocation costs. (3) Reflects subsequent adjustments to the fiscal 2014 and 2015 plans based on updated information. The following table summarizes the accrued employee termination benefits and other costs which are primarily included in other current liabilities on our consolidated balance sheet as of February 28, 2016 : (in millions) Fiscal Year 2014 Plans Fiscal Year Payments Adjustments Balance at February 28, 2016 Employee termination benefits (1) $ 13.4 $ 24.2 $ (34.2 ) $ 0.8 $ 4.2 Other 1.1 0.6 (1.3 ) (0.3 ) 0.1 Total $ 14.5 $ 24.8 $ (35.5 ) $ 0.5 $ 4.3 (1) Excludes costs associated with stock options and restricted stock that will be settled in shares upon vesting. We expect the remaining liability to be paid by the second quarter of fiscal 2017. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Feb. 28, 2016 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-Term Debt As of February 28, 2016 , our outstanding long-term debt consisted principally of: • $150.0 million of unsecured 6.000 percent senior notes due in August 2035; and • $300.0 million of unsecured 6.800 percent senior notes due in October 2037. During the second and third quarters of fiscal 2016 , utilizing the proceeds of the Four Corners cash dividend, cash proceeds from the sale leasebacks of restaurant properties and our corporate headquarters and additional cash on hand, we retired approximately $1.01 billion aggregate principal of long-term debt consisting of: • $262.0 million of our variable-rate term loan, maturing in August 2017; • $500.0 million of unsecured 6.200 percent senior notes due in October 2017; • $121.9 million of unsecured 4.500 percent senior notes due in October 2021; • $111.1 million of unsecured 3.350 percent senior notes due in November 2022; and • $10.0 million of unsecured 4.520 percent senior notes due in August 2024 We plan to retire the remaining $8.0 million balance of the variable-rate term loan in the fourth quarter of fiscal 2016. This balance is included in current liabilities on our consolidated balance sheet as of February 28, 2016 as current portion of long-term debt. For the quarter and nine months ended February 28, 2016 , we recorded approximately $71.3 million and $106.8 million , respectively of expenses associated with the fiscal 2016 retirements including cash costs of approximately $68.7 million for repurchase premiums, make-whole amounts and hedge settlements and non-cash charges of approximately $38.1 million associated with hedge and loan cost write-offs. These amounts were recorded in interest, net in our consolidated statements of earnings for the quarter and nine months ended February 28, 2016 . For the quarter and nine months ended February 22, 2015, we recorded approximately $0.8 million and $91.3 million , respectively, of expenses associated with the fiscal 2015 retirement of approximately $1.01 billion aggregate principal of long-term debt. These expenses included cash components for repurchase premiums and make-whole amounts of approximately $44.0 million and non-cash charges associated with hedge and loan cost write-offs of approximately $47.3 million . These amounts were recorded in interest, net in our consolidated statements of earnings for the quarter and nine months ended February 22, 2015. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Feb. 28, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On March 31, 2016 , the Board of Directors declared a cash dividend of $0.50 per share to be paid May 2, 2016 to all shareholders of record as of the close of business on April 11, 2016 . |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Feb. 28, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Application of New Accounting Standards | Application of New Accounting Standards In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). This update provides a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. This update was originally effective for annual and interim periods beginning after December 15, 2016, which would have required us to adopt these provisions in the first quarter of fiscal 2018. In July 2015, the FASB affirmed its proposal for a one-year deferral of the effective date. Early application is now permitted, but not before the original effective date. This update permits the use of either the retrospective or cumulative effect transition method. We are evaluating the effect this guidance will have on our consolidated financial statements and related disclosures. We have not yet selected a transition method nor have we determined the effect of the standard on our ongoing financial reporting. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory (Topic 330). This update requires inventory within the scope of the standard to be measured at the lower of cost and net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This update is effective for annual and interim periods beginning after December 15, 2016, which will require us to adopt these provisions in the first quarter of fiscal 2018. Early adoption is permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes (Topic 740). This update requires that deferred tax liabilities and assets be classified as noncurrent in a classified balance sheet. This update is effective for annual and interim periods beginning after December 15, 2016, which will require us to adopt these provisions in the first quarter of fiscal 2018. Early adoption is permitted. Other than the revised balance sheet presentation of deferred tax liabilities and assets, we do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This update requires a lessee to recognize on the balance sheet a liability to make lease payments and a corresponding right-of-use asset. The guidance also requires certain qualitative and quantitative disclosures about the amount, timing and uncertainty of cash flows arising from leases. This update is effective for annual and interim periods beginning after December 15, 2018, which will require us to adopt these provisions in the first quarter of fiscal 2020 using a modified retrospective approach. Early adoption is permitted. We have not yet selected a transition date nor have we determined the effect of the standard on our ongoing financial reporting. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718). This update was issued as part of the FASB’s simplification initiative and affects all entities that issue share-based payment awards to their employees. The amendments in this update cover such areas as the recognition of excess tax benefits and deficiencies, the classification of those excess tax benefits on the statement of cash flows, an accounting policy election for forfeitures, the amount an employer can withhold to cover income taxes and still qualify for equity classification and the classification of those taxes paid on the statement of cash flows. This update is effective for annual and interim periods beginning after December 15, 2016, which will require us to adopt these provisions in the first quarter of fiscal 2018. This guidance will be applied either prospectively, retrospectively or using a modified retrospective transition method, depending on the area covered in this update. Early adoption is permitted. We have not yet selected a transition date nor have we determined the effect of the standard on our ongoing financial reporting. |
Dispositions (Tables)
Dispositions (Tables) | 9 Months Ended |
Feb. 28, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures | Earnings (loss) from discontinued operations, net of taxes in our accompanying consolidated statements of earnings are comprised of the following: Three Months Ended Nine Months Ended (in millions) February 28, 2016 February 22, 2015 February 28, 2016 February 22, 2015 Sales $ — $ — $ — $ 400.4 Costs and expenses: Restaurant and marketing expenses 1.0 (0.6 ) 1.3 353.4 Depreciation and amortization — — — 0.2 Other costs and expenses (1) 1.7 (7.9 ) (20.3 ) (801.5 ) Earnings (loss) before income taxes (2.7 ) 8.5 19.0 848.3 Income tax expense (benefit) (0.3 ) 3.1 2.9 322.4 Earnings (loss) from discontinued operations, net of tax $ (2.4 ) $ 5.4 $ 16.1 $ 525.9 (1) Amounts include the initial gain recognized on the sale of Red Lobster as well as gains recognized upon satisfaction of landlord consents. |
Supplemental Cash Flow Inform30
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Feb. 28, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | Non-cash investing and financing activities are as follows: Nine Months Ended (in millions) February 28, 2016 February 22, 2015 Increase in land, buildings and equipment through accrued purchases $ 14.1 $ 18.9 Net book value of assets distributed in Four Corners separation, net of deferred tax liabilities 750.4 — Cash paid for interest and income taxes are as follows: Nine Months Ended (in millions) February 28, 2016 February 22, 2015 Interest paid, net of amounts capitalized $ 123.8 $ 107.9 Income taxes paid, net of refunds 105.8 203.7 |
Net Earnings per Share (Tables)
Net Earnings per Share (Tables) | 9 Months Ended |
Feb. 28, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Stock options, restricted stock and equity-settled performance stock units excluded from the calculation of diluted net earnings per share because the effect would have been anti-dilutive, are as follows: Three Months Ended Nine Months Ended (in millions) February 28, February 22, February 28, February 22, Anti-dilutive stock-based compensation awards 0.4 — 0.3 1.5 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Feb. 28, 2016 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The components of accumulated other comprehensive income (loss), net of tax, for the quarters ended February 28, 2016 and February 22, 2015 are as follows: (in millions) Foreign Currency Translation Adjustment Unrealized Gains (Losses) on Marketable Securities Unrealized Gains (Losses) on Derivatives Benefit Plan Funding Position Accumulated Other Comprehensive Income (Loss) Balance at November 29, 2015 $ (0.8 ) $ 0.1 $ 1.8 $ (66.1 ) $ (65.0 ) Gain (loss) — — 1.8 — 1.8 Reclassification realized in net earnings — — — (0.1 ) (0.1 ) Balance at February 28, 2016 $ (0.8 ) $ 0.1 $ 3.6 $ (66.2 ) $ (63.3 ) Balance at November 23, 2014 $ 0.8 $ 0.1 $ (23.0 ) $ (57.7 ) $ (79.8 ) Gain (loss) (2.0 ) — 1.4 — (0.6 ) Reclassification realized in net earnings — — 1.6 1.0 2.6 Balance at February 22, 2015 $ (1.2 ) $ 0.1 $ (20.0 ) $ (56.7 ) $ (77.8 ) The components of accumulated other comprehensive income (loss), net of tax, for the nine months ended February 28, 2016 and February 22, 2015 are as follows: (in millions) Foreign Currency Translation Adjustment Unrealized Gains (Losses) on Marketable Securities Unrealized Gains (Losses) on Derivatives Benefit Plan Funding Position Accumulated Other Comprehensive Income (Loss) Balance at May 31, 2015 $ (1.7 ) $ 0.1 $ (19.1 ) $ (65.9 ) $ (86.6 ) Gain (loss) 0.9 — 1.7 — 2.6 Reclassification realized in net earnings — — 21.0 (0.3 ) 20.7 Balance at February 28, 2016 $ (0.8 ) $ 0.1 $ 3.6 $ (66.2 ) $ (63.3 ) Balance at May 25, 2014 $ (4.7 ) $ 0.1 $ (50.4 ) $ (73.1 ) $ (128.1 ) Gain (loss) (3.8 ) — 2.1 14.6 12.9 Reclassification realized in net earnings 7.3 — 28.3 1.8 37.4 Balance at February 22, 2015 $ (1.2 ) $ 0.1 $ (20.0 ) $ (56.7 ) $ (77.8 ) |
Reclassification out of Accumulated Other Comprehensive Income | The following table presents the amounts and line items in our consolidated statements of earnings where adjustments reclassified from AOCI into net earnings were recorded. Amount Reclassified from AOCI into Net Earnings Three Months Ended Nine Months Ended (in millions) AOCI Components Location of Gain (Loss) Recognized in Earnings February 28, February 22, February 28, February 22, Derivatives Equity contracts (1) — — 2.1 (0.9 ) Interest rate contracts (2) — (2.5 ) (37.4 ) (44.4 ) Total before tax $ — $ (2.5 ) $ (35.3 ) $ (45.3 ) Tax benefit — 0.9 14.3 17.0 Net of tax $ — $ (1.6 ) $ (21.0 ) $ (28.3 ) Benefit plan funding position Recognized net actuarial loss - pension/postretirement plans (3) $ (0.7 ) $ (0.6 ) $ (2.1 ) $ (1.9 ) Recognized net actuarial gain (loss) - other plans (4) 0.8 (1.0 ) 2.5 (1.3 ) Total before tax $ 0.1 $ (1.6 ) $ 0.4 $ (3.2 ) Tax benefit (expense) — 0.6 (0.1 ) 1.4 Net of tax $ 0.1 $ (1.0 ) $ 0.3 $ (1.8 ) (1) Primarily included in restaurant labor costs and general and administrative expenses. See Note 9 for additional details. (2) Included in interest, net, on our consolidated statements of earnings. Reclassifications for the nine months ended February 28, 2016 and February 22, 2015 primarily related to the acceleration of hedge loss amortization resulting from the pay down of the associated long-term debt. (3) Included in the computation of net periodic benefit costs - pension and postretirement plans, which is a component of restaurant labor expenses and general and administrative expenses. See Note 8 for additional details. (4) Included in the computation of net periodic benefit costs - other plans, which is a component of general and administrative expenses. |
Retirement Plans (Tables)
Retirement Plans (Tables) | 9 Months Ended |
Feb. 28, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Components Of Net Periodic Benefit Cost | Components of net periodic benefit cost are as follows: Defined Benefit Plans Three Months Ended Nine Months Ended (in millions) February 28, February 22, February 28, February 22, Service cost $ — $ 0.4 $ — $ 0.9 Interest cost 2.7 2.5 8.0 7.5 Expected return on plan assets (3.7 ) (3.8 ) (10.9 ) (11.4 ) Recognized net actuarial loss 0.7 0.6 2.1 1.9 Net periodic benefit (credit) cost $ (0.3 ) $ (0.3 ) $ (0.8 ) $ (1.1 ) Postretirement Benefit Plan Three Months Ended Nine Months Ended (in millions) February 28, February 22, February 28, February 22, Service cost $ — $ 0.1 $ 0.1 $ 0.4 Interest cost 0.2 — 0.6 0.8 Amortization of unrecognized prior service credit (1.2 ) (1.6 ) (3.6 ) (1.6 ) Recognized net actuarial loss 0.3 0.3 0.9 0.6 Net periodic benefit (credit) cost $ (0.7 ) $ (1.2 ) $ (2.0 ) $ 0.2 |
Derivative Instruments And He34
Derivative Instruments And Hedging Activities (Tables) | 9 Months Ended |
Feb. 28, 2016 | |
Derivative [Line Items] | |
Notional Values Of Derivative Contracts Designated And Not Designated As Hedging Instruments | The notional and fair values of our derivative contracts are as follows: (in millions) Notional Values Balance Sheet Location Fair Values Derivative Assets Derivative Liabilities February 28, May 31, February 28, May 31, February 28, May 31, Derivative contracts designated as hedging instruments Equity forwards $ 17.2 $ 11.4 (1) $ 1.4 $ 0.4 $ — $ — Interest rate related — 200.0 (1) — 3.6 — — $ 1.4 $ 4.0 $ — $ — Derivative contracts not designated as hedging instruments Equity forwards $ 30.2 $ 51.7 (1) $ 2.8 $ 1.3 $ — $ — $ 2.8 $ 1.3 $ — $ — Total derivative contracts $ 4.2 $ 5.3 $ — $ — (1) Derivative assets and liabilities are included in receivables, net, prepaid expenses and other current assets and other current liabilities, as applicable, on our consolidated balance sheets. |
Fair Value Of Derivative Contracts Designated And Not Designated As Hedging Instruments | (in millions) Notional Values Balance Sheet Location Fair Values Derivative Assets Derivative Liabilities February 28, May 31, February 28, May 31, February 28, May 31, Derivative contracts designated as hedging instruments Equity forwards $ 17.2 $ 11.4 (1) $ 1.4 $ 0.4 $ — $ — Interest rate related — 200.0 (1) — 3.6 — — $ 1.4 $ 4.0 $ — $ — Derivative contracts not designated as hedging instruments Equity forwards $ 30.2 $ 51.7 (1) $ 2.8 $ 1.3 $ — $ — $ 2.8 $ 1.3 $ — $ — Total derivative contracts $ 4.2 $ 5.3 $ — $ — (1) Derivative assets and liabilities are included in receivables, net, prepaid expenses and other current assets and other current liabilities, as applicable, on our consolidated balance sheets. |
Cash Flow Hedging | |
Derivative [Line Items] | |
Effects Of Derivative Instruments In Hedging Relationships | The effects of derivative instruments in cash flow hedging relationships in the consolidated statements of earnings are as follows: (in millions) Amount of Gain (Loss) Recognized in AOCI (effective portion) Location of Gain (Loss) Reclassified from AOCI to Earnings Amount of Gain (Loss) Reclassified from AOCI to Earnings (effective portion) Location of Gain (Loss) Recognized in Earnings (ineffective portion) (1) Amount of Gain (Loss) Recognized in Earnings (ineffective portion) Three Months Ended Three Months Ended Three Months Ended Type of Derivative February 28, February 22, February 28, February 22, February 28, February 22, Equity $ 1.8 $ 1.4 (2) $ — $ — (2) $ 0.2 $ 0.2 Interest rate — — Interest, net — (2.5 ) Interest, net — — $ 1.8 $ 1.4 $ — $ (2.5 ) $ 0.2 $ 0.2 (in millions) Amount of Gain (Loss) Recognized in AOCI (effective portion) Location of Gain (Loss) Reclassified from AOCI to Earnings Amount of Gain (Loss) Reclassified from AOCI to Earnings (effective portion) Location of Gain (Loss) Recognized in Earnings (ineffective portion) (1) Amount of Gain (Loss) Recognized in Earnings (ineffective portion) Nine Months Ended Nine Months Ended Nine Months Ended Type of Derivative February 28, February 22, February 28, February 22, February 28, February 22, Equity $ 1.7 $ 2.1 (2) $ 2.1 $ (0.9 ) (2) $ 0.7 $ 0.8 Interest rate — — Interest, net (37.4 ) (44.4 ) Interest, net — — $ 1.7 $ 2.1 $ (35.3 ) $ (45.3 ) $ 0.7 $ 0.8 (1) Generally, all of our derivative instruments designated as cash flow hedges have some level of ineffectiveness, which is recognized currently in earnings. However, as these amounts are generally nominal and our consolidated financial statements are presented “in millions,” these amounts may appear as zero in this tabular presentation. (2) Location of the gain (loss) reclassified from AOCI to earnings as well as the gain (loss) recognized in earnings for the ineffective portion of the hedge is restaurant labor expenses and general and administrative expenses. |
Not Designated as Hedging Instruments | |
Derivative [Line Items] | |
Effects Of Derivative Instruments In Hedging Relationships | The effects of derivatives not designated as hedging instruments in the consolidated statements of earnings are as follows: (in millions) Location of Gain (Loss) Recognized in Earnings on Derivatives Amount of Gain (Loss) Recognized in Earnings Three Months Ended Nine Months Ended February 28, 2016 February 22, 2015 February 28, 2016 February 22, 2015 Equity forwards Restaurant labor expenses $ 1.7 $ 1.7 2.7 2.9 Equity forwards General and administrative expenses 3.4 3.9 5.6 6.7 $ 5.1 $ 5.6 $ 8.3 $ 9.6 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Feb. 28, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Values Of Financial Instruments Measured At Fair Value On Recurring Basis | The following tables summarize the fair values of financial instruments measured at fair value on a recurring basis as of February 28, 2016 and May 31, 2015 : Items Measured at Fair Value at February 28, 2016 (in millions) Fair value of assets (liabilities) Quoted prices in active market for identical assets (liabilities) (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Fixed-income securities: Corporate bonds (1) $ 2.0 $ — $ 2.0 $ — U.S. Treasury securities (2) 5.0 5.0 — — Mortgage-backed securities (1) 1.0 — 1.0 — Derivatives: Equity forwards (3) 4.2 — 4.2 — Interest rate swaps (4) — — — — Total $ 12.2 $ 5.0 $ 7.2 $ — Items Measured at Fair Value at May 31, 2015 (in millions) Fair value of assets (liabilities) Quoted prices in active market for identical assets (liabilities) (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Fixed-income securities: Corporate bonds (1) $ 2.2 $ — $ 2.2 $ — U.S. Treasury securities (2) 5.0 5.0 — — Mortgage-backed securities (1) 1.6 — 1.6 — Derivatives: Equity forwards (3) 1.7 — 1.7 — Interest rate swaps (4) 3.6 — 3.6 — Total $ 14.1 $ 5.0 $ 9.1 $ — (1) The fair value of these securities is based on closing market prices of the investments when applicable, or, alternatively, valuations utilizing market data and other observable inputs, inclusive of the risk of nonperformance. (2) The fair value of our U.S. Treasury securities is based on closing market prices. (3) The fair value of our equity forwards is based on the closing market value of Darden stock, inclusive of the risk of nonperformance. (4) The fair value of our interest rate lock and swap agreements is based on current and expected market interest rates, inclusive of the risk of nonperformance. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Feb. 28, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following tables reconcile our segment results to our consolidated results reported in accordance with GAAP: (in millions) Olive Garden LongHorn Steakhouse Fine Dining Other Business Corporate Consolidated For the three months ended February 28, 2016 Sales $ 1,019.8 $ 425.5 $ 146.0 $ 256.2 $ — $ 1,847.5 Restaurant and marketing expenses 799.7 340.5 112.1 213.9 — 1,466.2 Segment profit $ 220.1 $ 85.0 $ 33.9 $ 42.3 $ — $ 381.3 Depreciation and amortization $ 27.1 $ 15.7 $ 6.7 $ 12.8 $ 4.7 $ 67.0 Impairments and disposal of assets, net (1.9 ) (0.2 ) — — — (2.1 ) (in millions) Olive Garden LongHorn Steakhouse Fine Dining Other Business Corporate Consolidated For the three months ended February 22, 2015 Sales $ 957.1 $ 403.8 $ 138.5 $ 231.5 $ — $ 1,730.9 Restaurant and marketing expenses 755.7 337.9 107.6 192.5 — 1,393.7 Segment profit $ 201.4 $ 65.9 $ 30.9 $ 39.0 $ — $ 337.2 Depreciation and amortization $ 37.8 $ 17.9 $ 6.6 $ 11.8 $ 5.5 $ 79.6 Impairments and disposal of assets, net (2.1 ) (0.8 ) — — 3.7 0.8 (in millions) Olive Garden LongHorn Steakhouse Fine Dining Other Business Corporate Consolidated For the nine months ended February 28, 2016 Sales $ 2,856.8 $ 1,174.4 $ 382.5 $ 729.6 $ — $ 5,143.3 Restaurant and marketing expenses 2,287.6 977.5 308.3 611.3 — 4,184.7 Segment profit $ 569.2 $ 196.9 $ 74.2 $ 118.3 $ — $ 958.6 Depreciation and amortization $ 96.9 $ 52.5 $ 20.3 $ 37.8 $ 15.9 $ 223.4 Impairments and disposal of assets, net (1.9 ) (1.5 ) 0.7 6.6 — 3.9 Segments assets 951.0 980.2 852.7 996.8 721.2 4,501.9 Capital expenditures 67.2 40.7 12.7 49.4 2.8 172.8 (in millions) Olive Garden LongHorn Steakhouse Fine Dining Other Business Corporate Consolidated For the nine months ended February 22, 2015 Sales $ 2,752.3 $ 1,106.5 $ 362.9 $ 664.0 $ — $ 4,885.7 Restaurant and marketing expenses 2,262.1 944.5 295.5 570.3 — 4,072.4 Segment profit $ 490.2 $ 162.0 $ 67.4 $ 93.7 $ — $ 813.3 Depreciation and amortization $ 112.6 $ 53.1 $ 19.6 $ 35.1 $ 18.0 $ 238.4 Impairments and disposal of assets, net 13.6 — — 21.0 12.5 47.1 Segments assets 1,672.1 1,275.5 866.5 1,061.8 1,115.7 5,991.6 Capital expenditures 94.6 55.0 17.2 59.9 3.4 230.1 |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | Reconciliation of segment profit to earnings from continuing operations before income taxes: Three Months Ended Nine Months Ended (in millions) February 28, 2016 February 22, 2015 February 28, 2016 February 22, 2015 Segment profit $ 381.3 $ 337.2 $ 958.6 $ 813.3 Less general and administrative expenses (95.2 ) (86.4 ) (294.2 ) (310.7 ) Less depreciation and amortization (67.0 ) (79.6 ) (223.4 ) (238.4 ) Less impairments and disposal of assets, net 2.1 (0.8 ) (3.9 ) (47.1 ) Less interest, net (83.1 ) (23.3 ) (162.8 ) (168.3 ) Earnings before income taxes $ 138.1 $ 147.1 $ 274.3 $ 48.8 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Feb. 28, 2016 | |
Share-based Compensation [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The weighted-average fair value of non-qualified stock options and the related assumptions used in the Black-Scholes option pricing model were as follows. For the nine months ended February 28, 2016 , all stock option grants occurred prior to the separation of Four Corners . Stock Options Granted Nine Months Ended February 28, 2016 February 22, 2015 Weighted-average fair value (1) $ 12.72 $ 9.41 Dividend yield 3.3 % 4.5 % Expected volatility of stock 28.0 % 37.3 % Risk-free interest rate 1.9 % 2.1 % Expected option life (in years) 6.5 6.5 Weighted-average exercise price per share (1) $ 64.85 $ 40.43 (1) Weighted averages were adjusted for the impact of the separation of Four Corners. |
Schedule of Nonvested Share Activity | The following table presents a summary of our stock-based compensation activity for the nine months ended February 28, 2016 : (in millions) Stock Options Restricted Stock/ Restricted Stock Units Darden Stock Units Cash-Settled Performance Stock Units Equity-Settled Outstanding beginning of period 7.71 0.10 1.37 0.38 — Awards issued in conversion as a result of the separation of Four Corners 0.97 — 0.18 0.05 — Awards granted 0.43 0.06 0.32 — 0.19 Awards exercised (2.12 ) (0.03 ) (0.33 ) (0.15 ) — Awards forfeited (0.16 ) — (0.07 ) (0.10 ) — Performance unit adjustment — — — 0.03 — Outstanding end of period 6.83 0.13 1.47 0.21 0.19 |
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan | We recognized expense from stock-based compensation as follows: Three Months Ended Nine Months Ended (in millions) February 28, February 22, February 28, February 22, Stock options $ 1.6 $ 2.4 $ 6.5 $ 17.1 Restricted stock/restricted stock units 0.5 0.5 1.4 1.6 Darden stock units 4.9 4.1 11.7 8.9 Cash-settled performance stock units 3.4 3.6 5.4 11.6 Equity-settled performance stock units 0.9 — 2.0 — Employee stock purchase plan 0.3 0.3 0.9 1.0 Director compensation program/other 0.3 0.5 1.3 1.1 Total stock-based compensation expense $ 11.9 $ 11.4 $ 29.2 $ 41.3 |
Impairment and Disposal of As38
Impairment and Disposal of Assets, Net (Tables) | 9 Months Ended |
Feb. 28, 2016 | |
Asset Impairment Charges [Abstract] | |
Impairments and Disposal of Assets | Impairments and disposal of assets, net in our accompanying consolidated statements of earnings are comprised of the following: Three Months Ended Nine Months Ended (in millions) February 28, 2016 February 22, 2015 February 28, 2016 February 22, 2015 Restaurant impairments $ — $ 0.3 $ 9.2 $ 34.1 Disposal gains (2.1 ) (3.7 ) (5.3 ) (3.9 ) Other — 4.2 — 16.9 Impairments and disposal of assets, net $ (2.1 ) $ 0.8 $ 3.9 $ 47.1 |
Workforce Reduction Costs (Tabl
Workforce Reduction Costs (Tables) | 9 Months Ended |
Feb. 28, 2016 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Reserve by Type of Cost | In accordance with these actions, we incurred employee termination benefits costs and other costs which are included in general and administrative expenses in our consolidated statement of earnings as follows: Three Months Ended Nine Months Ended (in millions) February 28, 2016 (3) February 22, February 28, 2016 (3) February 22, Employee termination benefits (1) $ — $ 0.7 $ 0.2 $ 27.7 Other (2) (0.1 ) — (0.1 ) 0.4 Total $ (0.1 ) $ 0.7 $ 0.1 $ 28.1 (1) Includes salary and stock-based compensation expense. (2) Includes postemployment medical, outplacement and relocation costs. (3) Reflects subsequent adjustments to the fiscal 2014 and 2015 plans based on updated information. The following table summarizes the accrued employee termination benefits and other costs which are primarily included in other current liabilities on our consolidated balance sheet as of February 28, 2016 : (in millions) Fiscal Year 2014 Plans Fiscal Year Payments Adjustments Balance at February 28, 2016 Employee termination benefits (1) $ 13.4 $ 24.2 $ (34.2 ) $ 0.8 $ 4.2 Other 1.1 0.6 (1.3 ) (0.3 ) 0.1 Total $ 14.5 $ 24.8 $ (35.5 ) $ 0.5 $ 4.3 (1) Excludes costs associated with stock options and restricted stock that will be settled in shares upon vesting. |
Basis of Presentation (Details)
Basis of Presentation (Details) | Feb. 28, 2016restaurant |
Central Florida | |
Summary Of Significant Accounting Policies [Line Items] | |
Number of restaurants | 3 |
California | |
Summary Of Significant Accounting Policies [Line Items] | |
Number of restaurants | 3 |
Texas | |
Summary Of Significant Accounting Policies [Line Items] | |
Number of restaurants | 6 |
United States | |
Summary Of Significant Accounting Policies [Line Items] | |
Number of restaurants | 2 |
Puerto Rico | |
Summary Of Significant Accounting Policies [Line Items] | |
Number of restaurants | 10 |
Middle East, Mexico, Brazil, Peru, El Salvador and Malaysia | |
Summary Of Significant Accounting Policies [Line Items] | |
Number of restaurants | 30 |
Real Estate Transactions Narrat
Real Estate Transactions Narrative (Details) $ in Millions | Nov. 09, 2015USD ($)propertyshares | Feb. 28, 2016USD ($)restaurantproperty | Feb. 28, 2016USD ($)restaurantproperty | Feb. 28, 2016USD ($)restaurantproperty | Feb. 22, 2015USD ($) | May. 31, 2015property | Nov. 29, 2015USD ($)transaction | Jun. 23, 2015company |
Debt Instrument [Line Items] | ||||||||
Number of real estate properties | property | 418 | 424 | 424 | 424 | ||||
Sale leaseback transaction, number of properties | property | 64 | |||||||
Sale leaseback transaction, number of transactions completed | 49 | 14 | 63 | |||||
Proceeds from financing lease obligation | $ 131 | $ 0 | $ 93.1 | $ 234.9 | ||||
Sale leaseback transaction, deferred gain, net | 46.7 | $ 46.7 | 46.7 | |||||
Sale leaseback transaction, current period gain recognized | 6.3 | |||||||
Number of companies | company | 2 | |||||||
Stock issued during period, shares, stock splits | shares | 1 | |||||||
Special cash distribution from Four Corners Property Trust | 315 | $ 0 | ||||||
Separation of four corners property trust | $ 435.4 | $ (435.4) | ||||||
Spinoff transaction, net book value | 834.8 | |||||||
Deferred tax liabilities, net | $ 84.4 | |||||||
Sale leaseback transaction, initial lease term | 15 years | |||||||
Renewal period of lease arrangements | 15 years | |||||||
Sale leaseback transaction, imputed interest rate | 1.50% | |||||||
Extinguishment of debt, amount | $ 1,010 | $ 1,010 | ||||||
Texas | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of restaurants | restaurant | 6 | 6 | 6 | |||||
LongHorn Steakhouse | Texas | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of restaurants | restaurant | 6 | 6 | 6 |
Dispositions (Details)
Dispositions (Details) $ in Millions | Jul. 28, 2014restaurant | Feb. 28, 2016USD ($)property | Feb. 28, 2016USD ($)property | May. 31, 2015USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Land, buildings and equipment, carrying amount | $ 19 | $ 19 | $ 32.9 | |
Red Lobster | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Number of restaurants sold | restaurant | 705 | |||
Number of properties subject to contractual requirements satisfied | property | 2 | |||
Remaining number of properties subject to contractual requirements | property | 2 | |||
Gain on sale of discontinued operation | $ 854.4 | |||
Properties Subject to Contractual Requirements | Red Lobster | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from divestiture of businesses | $ 1.6 | |||
Transition service agreement period (up to) | 2 years |
Dispositions (Income Statement
Dispositions (Income Statement Disclosure) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Feb. 28, 2016 | Feb. 22, 2015 | Feb. 28, 2016 | Feb. 22, 2015 | ||
Discontinued Operations and Disposal Groups [Abstract] | |||||
Sales | $ 0 | $ 0 | $ 0 | $ 400.4 | |
Restaurant and marketing expenses | 1 | (0.6) | 1.3 | 353.4 | |
Depreciation and amortization | 0 | 0 | 0 | 0.2 | |
Other costs and expenses | [1] | 1.7 | (7.9) | (20.3) | (801.5) |
Earnings (loss) before income taxes | (2.7) | 8.5 | 19 | 848.3 | |
Income tax expense (benefit) | (0.3) | 3.1 | 2.9 | 322.4 | |
Earnings (loss) from discontinued operations, net of tax | $ (2.4) | $ 5.4 | $ 16.1 | $ 525.9 | |
[1] | Amounts include the initial gain recognized on the sale of Red Lobster as well as gains recognized upon satisfaction of landlord consents. |
Supplemental Cash Flow Inform44
Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Feb. 28, 2016 | Feb. 22, 2015 | |
Supplemental Cash Flow Elements [Abstract] | ||
Interest paid, net of amounts capitalized | $ 123.8 | $ 107.9 |
Income taxes paid, net of refunds | 105.8 | 203.7 |
Increase in land, buildings and equipment through accrued purchases | 14.1 | 18.9 |
Net book value of assets distributed in Four Corners separation, net of deferred tax liabilities | $ 750.4 | $ 0 |
Supplemental Cash Flow Inform45
Supplemental Cash Flow Information (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Feb. 28, 2016 | Feb. 22, 2015 | |
Supplemental Cash Flow Elements [Abstract] | ||
Expense (benefit) for cash components for repurchase premiums and make-whole amountsnguishment costs | $ (68.7) | $ 44 |
Extinguishment of debt, accrued interest | $ 6.3 | $ 12.8 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2016 | Feb. 22, 2015 | Feb. 28, 2016 | Feb. 22, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 21.70% | 12.70% | 20.10% | (60.50%) |
Effective income tax rate, excluding debt extinguishment costs and debt extinguishment tax benefit (as a percent) | 27.10% | 19.20% | 26.10% | 19.50% |
Tax position, change is reasonably possible in the next twelve months | $ 1.4 | $ 1.4 |
Net Earnings per Share (Details
Net Earnings per Share (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2016 | Feb. 22, 2015 | Feb. 28, 2016 | Feb. 22, 2015 | |
Earnings Per Share [Abstract] | ||||
Anti-dilutive stock-based compensation awards | 0.4 | 0 | 0.3 | 1.5 |
Stockholders' Equity Narrative
Stockholders' Equity Narrative (Details) | Jun. 23, 2015$ / sharesshares |
Class of Stock [Line Items] | |
Stockholders' equity, maximum ownership percentage of common stock | 9.80% |
Class of right, number of securities called by rights (shares) | shares | 1 |
Series A Preferred Stock | |
Class of Stock [Line Items] | |
Preferred stock, par or stated value per share | $ / shares | $ 156.26 |
Stockholders' Equity (Schedule
Stockholders' Equity (Schedule of Components of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2016 | Feb. 22, 2015 | Feb. 28, 2016 | Feb. 22, 2015 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | $ (65) | $ (79.8) | $ (86.6) | $ (128.1) |
Gain (loss) | 1.8 | (0.6) | 2.6 | 12.9 |
Reclassification realized in net earnings | (0.1) | 2.6 | 20.7 | 37.4 |
Ending Balance | (63.3) | (77.8) | (63.3) | (77.8) |
Foreign Currency Translation Adjustment | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | (0.8) | 0.8 | (1.7) | (4.7) |
Gain (loss) | 0 | (2) | 0.9 | (3.8) |
Reclassification realized in net earnings | 0 | 0 | 0 | 7.3 |
Ending Balance | (0.8) | (1.2) | (0.8) | (1.2) |
Unrealized Gains (Losses) on Marketable Securities | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | 0.1 | 0.1 | 0.1 | 0.1 |
Gain (loss) | 0 | 0 | 0 | 0 |
Reclassification realized in net earnings | 0 | 0 | 0 | 0 |
Ending Balance | 0.1 | 0.1 | 0.1 | 0.1 |
Unrealized Gains (Losses) on Derivatives | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | 1.8 | (23) | (19.1) | (50.4) |
Gain (loss) | 1.8 | 1.4 | 1.7 | 2.1 |
Reclassification realized in net earnings | 0 | 1.6 | 21 | 28.3 |
Ending Balance | 3.6 | (20) | 3.6 | (20) |
Benefit Plan Funding Position | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | (66.1) | (57.7) | (65.9) | (73.1) |
Gain (loss) | 0 | 0 | 0 | 14.6 |
Reclassification realized in net earnings | (0.1) | 1 | (0.3) | 1.8 |
Ending Balance | $ (66.2) | $ (56.7) | $ (66.2) | $ (56.7) |
Stockholders' Equity (Schedul50
Stockholders' Equity (Schedule of Reclassification Adjustments out of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Feb. 28, 2016 | Feb. 22, 2015 | Feb. 28, 2016 | Feb. 22, 2015 | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||
Less interest, net | $ (83.1) | $ (23.3) | $ (162.8) | $ (168.3) | |||
Earnings before income taxes | 138.1 | 147.1 | 274.3 | 48.8 | |||
Tax benefit | (29.9) | (18.7) | (55) | 29.5 | |||
Net earnings | 105.8 | 133.8 | 235.4 | 604.2 | |||
Derivatives | Amount Reclassified from AOCI into Net Earnings | |||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||
Earnings before income taxes | 0 | (2.5) | (35.3) | (45.3) | |||
Tax benefit | 0 | 0.9 | 14.3 | 17 | |||
Net earnings | 0 | (1.6) | (21) | (28.3) | |||
Derivatives | Equity | Amount Reclassified from AOCI into Net Earnings | |||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||
General and administrative expenses | [1] | 0 | 0 | 2.1 | (0.9) | ||
Derivatives | Interest rate related | Amount Reclassified from AOCI into Net Earnings | |||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||
Less interest, net | 0 | [2] | (2.5) | [2] | (37.4) | (44.4) | |
Benefit plan funding position | Amount Reclassified from AOCI into Net Earnings | |||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||
Earnings before income taxes | 0.1 | (1.6) | 0.4 | (3.2) | |||
Tax benefit | 0 | 0.6 | (0.1) | 1.4 | |||
Net earnings | 0.1 | (1) | 0.3 | (1.8) | |||
Benefit plan funding position | Recognized net actuarial loss - pension/postretirement plans | Amount Reclassified from AOCI into Net Earnings | |||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||
Amount Reclassified from AOCI into Net Earnings, Benefit plan funding position | [3] | (0.7) | (0.6) | (2.1) | (1.9) | ||
Benefit plan funding position | Recognized net actuarial gain (loss) - other plans | Amount Reclassified from AOCI into Net Earnings | |||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||||
Amount Reclassified from AOCI into Net Earnings, Benefit plan funding position | $ 0.8 | [4] | $ (1) | [4] | $ 2.5 | $ (1.3) | |
[1] | Primarily included in restaurant labor costs and general and administrative expenses. See Note 9 for additional details. | ||||||
[2] | Included in interest, net, on our consolidated statements of earnings. Reclassifications for the nine months ended February 28, 2016 and February 22, 2015 primarily related to the acceleration of hedge loss amortization resulting from the pay down of the associated long-term debt. | ||||||
[3] | Included in the computation of net periodic benefit costs - pension and postretirement plans, which is a component of restaurant labor expenses and general and administrative expenses. See Note 8 for additional details. | ||||||
[4] | Included in the computation of net periodic benefit costs - other plans, which is a component of general and administrative expenses. |
Retirement Plans (Components Of
Retirement Plans (Components Of Net Periodic Benefit Cost) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2016 | Feb. 22, 2015 | Feb. 28, 2016 | Feb. 22, 2015 | |
Defined Benefit Plans | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | $ 0 | $ 0.4 | $ 0 | $ 0.9 |
Interest cost | 2.7 | 2.5 | 8 | 7.5 |
Expected return on plan assets | (3.7) | (3.8) | (10.9) | (11.4) |
Recognized net actuarial loss | 0.7 | 0.6 | 2.1 | 1.9 |
Net periodic benefit (credit) cost | (0.3) | (0.3) | (0.8) | (1.1) |
Postretirement Benefit Plan | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | 0 | 0.1 | 0.1 | 0.4 |
Interest cost | 0.2 | 0 | 0.6 | 0.8 |
Amortization of unrecognized prior service credit | (1.2) | (1.6) | (3.6) | (1.6) |
Recognized net actuarial loss | 0.3 | 0.3 | 0.9 | 0.6 |
Net periodic benefit (credit) cost | $ (0.7) | $ (1.2) | $ (2) | $ 0.2 |
Derivative Instruments And He52
Derivative Instruments And Hedging Activities (Narrative) (Details) - USD ($) $ / shares in Units, shares in Millions | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2016 | Feb. 22, 2015 | Feb. 28, 2016 | Feb. 22, 2015 | |
Derivative [Line Items] | ||||
Ineffective portion of interest rate hedge | $ 0 | |||
Reduction to interest expense related to net swap settlements | $ 0 | $ (500,000) | (1,700,000) | $ (2,300,000) |
Derivative, Gain on Derivative | $ 4,100,000 | |||
Amount of gain reclassified from AOCI to earnings (effective portion) | $ (600,000) | |||
Darden Stock Units | Forward contracts | ||||
Derivative [Line Items] | ||||
Forward contract indexed to issuer's equity, indexed shares | 0.9 | 0.9 | ||
Darden Stock Units | Minimum | ||||
Derivative [Line Items] | ||||
Vesting period | 4 years | |||
Common stock at forward contract rate (in dollars per share) | $ 40.6947 | |||
Darden Stock Units | Maximum | ||||
Derivative [Line Items] | ||||
Vesting period | 5 years | |||
Common stock at forward contract rate (in dollars per share) | $ 60.5981 | |||
Employee-Directed Investments In Darden Stock Within The Non-Qualified Deferred Compensation Plan | ||||
Derivative [Line Items] | ||||
Forward contract indexed to issuer's equity, indexed shares | 0.2 | 0.2 | ||
Employee-Directed Investments In Darden Stock Within The Non-Qualified Deferred Compensation Plan | Minimum | ||||
Derivative [Line Items] | ||||
Common stock at forward contract rate (in dollars per share) | $ 41.03 | |||
Employee-Directed Investments In Darden Stock Within The Non-Qualified Deferred Compensation Plan | Maximum | ||||
Derivative [Line Items] | ||||
Common stock at forward contract rate (in dollars per share) | $ 44.73 |
Derivative Instruments And He53
Derivative Instruments And Hedging Activities (Notional Values Of Derivative Contracts Designated And Not Designated As Hedging Instruments) (Details) - USD ($) $ in Millions | Feb. 28, 2016 | May. 31, 2015 |
Designated as Hedging Instruments | Equity forwards | ||
Derivatives, Fair Value [Line Items] | ||
Derivative contracts, notional | $ 17.2 | $ 11.4 |
Designated as Hedging Instruments | Interest rate related | ||
Derivatives, Fair Value [Line Items] | ||
Derivative contracts, notional | 0 | 200 |
Not Designated as Hedging Instruments | Equity forwards | ||
Derivatives, Fair Value [Line Items] | ||
Derivative contracts, notional | $ 30.2 | $ 51.7 |
Derivative Instruments And He54
Derivative Instruments And Hedging Activities (Fair Value Of Derivative Contracts Designated And Not Designated As Hedging Instruments) (Details) - USD ($) $ in Millions | Feb. 28, 2016 | May. 31, 2015 | |
Derivative [Line Items] | |||
Derivative contracts, derivative assets, fair value | $ 4.2 | $ 5.3 | |
Derivative contracts, derivative liabilities, fair value | 0 | 0 | |
Designated as Hedging Instruments | |||
Derivative [Line Items] | |||
Derivative contracts, derivative assets, fair value | 1.4 | 4 | |
Derivative contracts, derivative liabilities, fair value | 0 | 0 | |
Designated as Hedging Instruments | Equity forwards | |||
Derivative [Line Items] | |||
Derivative contracts, derivative assets, fair value | [1] | 1.4 | 0.4 |
Derivative contracts, derivative liabilities, fair value | [1] | 0 | 0 |
Designated as Hedging Instruments | Interest rate related | |||
Derivative [Line Items] | |||
Derivative contracts, derivative assets, fair value | [1] | 0 | 3.6 |
Derivative contracts, derivative liabilities, fair value | [1] | 0 | 0 |
Not Designated as Hedging Instruments | |||
Derivative [Line Items] | |||
Derivative contracts, derivative assets, fair value | 2.8 | 1.3 | |
Derivative contracts, derivative liabilities, fair value | 0 | 0 | |
Not Designated as Hedging Instruments | Equity forwards | |||
Derivative [Line Items] | |||
Derivative contracts, derivative assets, fair value | [1] | 2.8 | 1.3 |
Derivative contracts, derivative liabilities, fair value | [1] | $ 0 | $ 0 |
[1] | Derivative assets and liabilities are included in receivables, net, prepaid expenses and other current assets and other current liabilities, as applicable, on our consolidated balance sheets. |
Derivative Instruments And He55
Derivative Instruments And Hedging Activities (Effects Of Derivative Instruments In Cash Flow Hedging Relationships) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Feb. 28, 2016 | Feb. 22, 2015 | Feb. 28, 2016 | Feb. 22, 2015 | ||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Amount of Gain (Loss) Recognized in AOCI (effective portion) | $ 1.8 | $ 1.4 | $ 1.7 | $ 2.1 | |
Amount of Gain (Loss) Reclassified from AOCI to Earnings (effective portion) | 0 | (2.5) | (35.3) | (45.3) | |
Amount of Gain (Loss) Recognized in Earnings (ineffective portion) | [1] | 0.2 | 0.2 | 0.7 | 0.8 |
Equity | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Amount of Gain (Loss) Recognized in AOCI (effective portion) | [2] | 1.8 | 1.4 | 1.7 | 2.1 |
Equity | Cost of Sales and Selling General and Administrative Expense | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Amount of Gain (Loss) Reclassified from AOCI to Earnings (effective portion) | [2] | 0 | 0 | 2.1 | (0.9) |
Amount of Gain (Loss) Recognized in Earnings (ineffective portion) | [1],[2] | 0.2 | 0.2 | 0.7 | 0.8 |
Interest rate related | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Amount of Gain (Loss) Recognized in AOCI (effective portion) | 0 | 0 | 0 | 0 | |
Interest rate related | Interest, Net | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Amount of Gain (Loss) Reclassified from AOCI to Earnings (effective portion) | 0 | (2.5) | (37.4) | (44.4) | |
Amount of Gain (Loss) Recognized in Earnings (ineffective portion) | [1] | $ 0 | $ 0 | $ 0 | $ 0 |
[1] | (in millions) Amount of Gain (Loss)Recognized in AOCI(effective portion) Location ofGain (Loss)Reclassifiedfrom AOCI toEarnings Amount of Gain (Loss)Reclassified from AOCI toEarnings (effective portion) Location ofGain (Loss)Recognized in Earnings(ineffectiveportion) (1) Amount of Gain (Loss)Recognized in Earnings(ineffective portion) Nine Months Ended Nine Months Ended Nine Months EndedType of Derivative February 28, 2016 February 22, 2015 February 28, 2016 February 22, 2015 February 28, 2016 February 22, 2015Equity $1.7 $2.1 (2) $2.1 $(0.9) (2) $0.7 $0.8Interest rate — — Interest, net (37.4) (44.4) Interest, net — — $1.7 $2.1 $(35.3) $(45.3) $0.7 $0.8 | ||||
[2] | (in millions) Amount of Gain (Loss)Recognized in AOCI(effective portion) Location ofGain (Loss)Reclassifiedfrom AOCI toEarnings Amount of Gain (Loss)Reclassified from AOCI toEarnings (effective portion) Location ofGain (Loss)Recognized in Earnings(ineffectiveportion) (1) Amount of Gain (Loss)Recognized in Earnings(ineffective portion) Nine Months Ended Nine Months Ended Nine Months EndedType of Derivative February 28, 2016 February 22, 2015 February 28, 2016 February 22, 2015 February 28, 2016 February 22, 2015Equity $1.7 $2.1 (2) $2.1 $(0.9) (2) $0.7 $0.8Interest rate — — Interest, net (37.4) (44.4) Interest, net — — $1.7 $2.1 $(35.3) $(45.3) $0.7 $0.8 |
Derivative Instruments And He56
Derivative Instruments And Hedging Activities (Effects Of Derivatives Not Designated As Hedging Instruments) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2016 | Feb. 22, 2015 | Feb. 28, 2016 | Feb. 22, 2015 | |
Derivative [Line Items] | ||||
Amount of Gain (Loss) Recognized in Earnings | $ 5.1 | $ 5.6 | $ 8.3 | $ 9.6 |
Equity forwards | Restaurant labor expenses | ||||
Derivative [Line Items] | ||||
Amount of Gain (Loss) Recognized in Earnings | 1.7 | 1.7 | 2.7 | 2.9 |
Equity forwards | General and administrative expenses | ||||
Derivative [Line Items] | ||||
Amount of Gain (Loss) Recognized in Earnings | $ 3.4 | $ 3.9 | $ 5.6 | $ 6.7 |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Values Of Financial Instruments Measured At Fair Value On Recurring Basis) (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Feb. 28, 2016 | May. 31, 2015 | |
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Total | $ 12.2 | $ 14.1 | |
Equity forwards | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Derivatives | [1] | 4.2 | 1.7 |
Interest rate swaps | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Derivatives | [2] | 0 | 3.6 |
Corporate bonds | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Fixed-income securities | [3] | 2 | 2.2 |
U.S. Treasury securities | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Fixed-income securities | [4] | 5 | 5 |
Mortgage-backed securities | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Fixed-income securities | [3] | 1 | 1.6 |
Quoted prices in active market for identical assets (liabilities) (Level 1) | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Total | 5 | 5 | |
Quoted prices in active market for identical assets (liabilities) (Level 1) | Equity forwards | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Derivatives | [1] | 0 | 0 |
Quoted prices in active market for identical assets (liabilities) (Level 1) | Interest rate swaps | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Derivatives | [2] | 0 | 0 |
Quoted prices in active market for identical assets (liabilities) (Level 1) | Corporate bonds | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Fixed-income securities | [3] | 0 | 0 |
Quoted prices in active market for identical assets (liabilities) (Level 1) | U.S. Treasury securities | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Fixed-income securities | [4] | 5 | 5 |
Quoted prices in active market for identical assets (liabilities) (Level 1) | Mortgage-backed securities | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Fixed-income securities | [3] | 0 | 0 |
Significant other observable inputs (Level 2) | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Total | 7.2 | 9.1 | |
Significant other observable inputs (Level 2) | Equity forwards | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Derivatives | [1] | 4.2 | 1.7 |
Significant other observable inputs (Level 2) | Interest rate swaps | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Derivatives | [2] | 0 | 3.6 |
Significant other observable inputs (Level 2) | Corporate bonds | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Fixed-income securities | [3] | 2 | 2.2 |
Significant other observable inputs (Level 2) | U.S. Treasury securities | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Fixed-income securities | [4] | 0 | 0 |
Significant other observable inputs (Level 2) | Mortgage-backed securities | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Fixed-income securities | [3] | 1 | 1.6 |
Significant unobservable inputs (Level 3) | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Total | 0 | 0 | |
Significant unobservable inputs (Level 3) | Equity forwards | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Derivatives | [1] | 0 | 0 |
Significant unobservable inputs (Level 3) | Interest rate swaps | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Derivatives | [2] | 0 | 0 |
Significant unobservable inputs (Level 3) | Corporate bonds | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Fixed-income securities | [3] | 0 | 0 |
Significant unobservable inputs (Level 3) | U.S. Treasury securities | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Fixed-income securities | [4] | 0 | 0 |
Significant unobservable inputs (Level 3) | Mortgage-backed securities | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Fixed-income securities | [3] | $ 0 | $ 0 |
[1] | The fair value of our equity forwards is based on the closing market value of Darden stock, inclusive of the risk of nonperformance. | ||
[2] | The fair value of our interest rate lock and swap agreements is based on current and expected market interest rates, inclusive of the risk of nonperformance. | ||
[3] | The fair value of these securities is based on closing market prices of the investments when applicable, or, alternatively, valuations utilizing market data and other observable inputs, inclusive of the risk of nonperformance. | ||
[4] | The fair value of our U.S. Treasury securities is based on closing market prices. |
Fair Value Measurements (Carryi
Fair Value Measurements (Carrying Value And Fair Value Of Long-Term Debt) (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Feb. 28, 2016 | May. 31, 2015 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying value of long-term debt | $ 447.7 | $ 1,470 |
Fair value of long-term debt | 488 | 1,570 |
Impairment of long-lived assets held-for-use | 5.4 | 55.4 |
Impairment of long-lived assets held-for-use, sale-leaseback assets | 15.1 | |
Fair value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Nonfinancial assets fair value disclosure | $ 5.4 | $ 70.5 |
Commitments And Contingencies (
Commitments And Contingencies (Details) - USD ($) $ in Millions | Feb. 28, 2016 | May. 31, 2015 |
Workers Compensation and General Liabilities Accrued | ||
Loss Contingencies [Line Items] | ||
Standby letters of credit | $ 119.2 | $ 124.2 |
Operating Lease Obligations and Other Payments | ||
Loss Contingencies [Line Items] | ||
Standby letters of credit | 12.8 | 14 |
Property Lease Guarantee | ||
Loss Contingencies [Line Items] | ||
Guarantees associated with leased properties | 137.4 | 147.7 |
Fair value of potential payments discounted at pre-tax cost of capital related to guarantee obligations | $ 106.9 | $ 113.4 |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Feb. 28, 2016USD ($) | Feb. 22, 2015USD ($) | Feb. 28, 2016USD ($)segment | Feb. 22, 2015USD ($) | May. 31, 2015USD ($) | |
Segment Reporting [Abstract] | |||||
Number of Reportable Segments | segment | 4 | ||||
Segment Reporting Information [Line Items] | |||||
Sales | $ 1,847.5 | $ 1,730.9 | $ 5,143.3 | $ 4,885.7 | |
Restaurant and marketing expenses | 1,466.2 | 1,393.7 | 4,184.7 | 4,072.4 | |
Segment profit | 381.3 | 337.2 | 958.6 | 813.3 | |
Depreciation and amortization | 67 | 79.6 | 223.4 | 238.4 | |
Impairments and disposal of assets, net | 2.1 | (0.8) | (3.9) | (47.1) | |
Segments assets | 4,501.9 | 5,991.6 | 4,501.9 | 5,991.6 | $ 5,994.7 |
Capital expenditures | 172.8 | 230.1 | |||
Operating Segments | Olive Garden | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 1,019.8 | 957.1 | 2,856.8 | 2,752.3 | |
Restaurant and marketing expenses | 799.7 | 755.7 | 2,287.6 | 2,262.1 | |
Segment profit | 220.1 | 201.4 | 569.2 | 490.2 | |
Depreciation and amortization | 27.1 | 37.8 | 96.9 | 112.6 | |
Impairments and disposal of assets, net | (1.9) | 2.1 | (1.9) | (13.6) | |
Segments assets | 951 | 1,672.1 | 951 | 1,672.1 | |
Capital expenditures | 67.2 | 94.6 | |||
Operating Segments | LongHorn Steakhouse | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 425.5 | 403.8 | 1,174.4 | 1,106.5 | |
Restaurant and marketing expenses | 340.5 | 337.9 | 977.5 | 944.5 | |
Segment profit | 85 | 65.9 | 196.9 | 162 | |
Depreciation and amortization | 15.7 | 17.9 | 52.5 | 53.1 | |
Impairments and disposal of assets, net | (0.2) | 0.8 | 1.5 | 0 | |
Segments assets | 980.2 | 1,275.5 | 980.2 | 1,275.5 | |
Capital expenditures | 40.7 | 55 | |||
Operating Segments | Fine Dining | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 146 | 138.5 | 382.5 | 362.9 | |
Restaurant and marketing expenses | 112.1 | 107.6 | 308.3 | 295.5 | |
Segment profit | 33.9 | 30.9 | 74.2 | 67.4 | |
Depreciation and amortization | 6.7 | 6.6 | 20.3 | 19.6 | |
Impairments and disposal of assets, net | 0 | 0 | (0.7) | 0 | |
Segments assets | 852.7 | 866.5 | 852.7 | 866.5 | |
Capital expenditures | 12.7 | 17.2 | |||
Operating Segments | Other Business | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 256.2 | 231.5 | 729.6 | 664 | |
Restaurant and marketing expenses | 213.9 | 192.5 | 611.3 | 570.3 | |
Segment profit | 42.3 | 39 | 118.3 | 93.7 | |
Depreciation and amortization | 12.8 | 11.8 | 37.8 | 35.1 | |
Impairments and disposal of assets, net | 0 | 0 | (6.6) | (21) | |
Segments assets | 996.8 | 1,061.8 | 996.8 | 1,061.8 | |
Capital expenditures | 49.4 | 59.9 | |||
Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 0 | 0 | 0 | 0 | |
Restaurant and marketing expenses | 0 | 0 | 0 | 0 | |
Segment profit | 0 | 0 | 0 | 0 | |
Depreciation and amortization | 4.7 | 5.5 | 15.9 | 18 | |
Impairments and disposal of assets, net | 0 | (3.7) | 0 | (12.5) | |
Segments assets | $ 721.2 | $ 1,115.7 | 721.2 | 1,115.7 | |
Capital expenditures | $ 2.8 | $ 3.4 |
Segment Information (Reconcilia
Segment Information (Reconciliation of Segment Profit to Earnings from Continuing Operations Before Income Taxes) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2016 | Feb. 22, 2015 | Feb. 28, 2016 | Feb. 22, 2015 | |
Segment Reporting [Abstract] | ||||
Segment profit | $ 381.3 | $ 337.2 | $ 958.6 | $ 813.3 |
Less general and administrative expenses | (95.2) | (86.4) | (294.2) | (310.7) |
Less depreciation and amortization | (67) | (79.6) | (223.4) | (238.4) |
Less impairments and disposal of assets, net | 2.1 | (0.8) | (3.9) | (47.1) |
Less interest, net | (83.1) | (23.3) | (162.8) | (168.3) |
Earnings before income taxes | $ 138.1 | $ 147.1 | $ 274.3 | $ 48.8 |
Stock-Based Compensation (Optio
Stock-Based Compensation (Option Pricing Assumptions) (Details) - Stock Options - $ / shares | 9 Months Ended | |
Feb. 28, 2016 | Feb. 22, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted-average fair value (1) | $ 12.72 | $ 9.41 |
Dividend yield | 3.30% | 4.50% |
Expected volatility of stock | 28.00% | 37.30% |
Risk-free interest rate | 1.90% | 2.10% |
Expected option life (in years) | 6 years 6 months | 6 years 6 months |
Weighted-average exercise price per share (1) | $ 64.85 | $ 40.43 |
Stock-Based Compensation (Share
Stock-Based Compensation (Share Activity) (Details) - shares shares in Thousands | 9 Months Ended | |
Feb. 28, 2016 | Feb. 22, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Awards exercised | (1,900) | (2,800) |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding beginning of period | 7,710 | |
Awards issued in conversion as a result of the separation of Four Corners | 970 | |
Awards granted | 430 | |
Awards exercised | (2,120) | |
Awards forfeited | (160) | |
Outstanding end of period | 6,830 | |
Restricted Stock/ Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Outstanding beginning of period | 100 | |
Awards issued in conversion as a result of the separation of Four Corners | 0 | |
Awards granted | 60 | |
Awards exercised | (30) | |
Awards forfeited | 0 | |
Performance unit adjustment | 0 | |
Outstanding end of period | 130 | |
Darden Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Outstanding beginning of period | 1,370 | |
Awards issued in conversion as a result of the separation of Four Corners | 180 | |
Awards granted | 320 | |
Awards exercised | (330) | |
Awards forfeited | (70) | |
Performance unit adjustment | 0 | |
Outstanding end of period | 1,470 | |
Cash-Settled Performance Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Outstanding beginning of period | 380 | |
Awards issued in conversion as a result of the separation of Four Corners | 50 | |
Awards granted | 0 | |
Awards exercised | (150) | |
Awards forfeited | (100) | |
Performance unit adjustment | 30 | |
Outstanding end of period | 210 | |
Equity-Settled Performance Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Outstanding beginning of period | 0 | |
Awards issued in conversion as a result of the separation of Four Corners | 0 | |
Awards granted | 190 | |
Awards exercised | 0 | |
Awards forfeited | 0 | |
Performance unit adjustment | 0 | |
Outstanding end of period | 190 |
Stock-Based Compensation (Recog
Stock-Based Compensation (Recognized Stock-Based Compensation Expense) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Feb. 28, 2016 | Feb. 22, 2015 | Feb. 28, 2016 | Feb. 22, 2015 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total stock-based compensation expense | $ 11.9 | $ 11.4 | $ 29.2 | $ 41.3 | ||
Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total stock-based compensation expense | 1.6 | 2.4 | 6.5 | [1] | 17.1 | [1] |
Restricted Stock/ Restricted Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total stock-based compensation expense | 0.5 | 0.5 | 1.4 | [1] | 1.6 | [1] |
Darden Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total stock-based compensation expense | 4.9 | 4.1 | 11.7 | 8.9 | ||
Cash-Settled Performance Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total stock-based compensation expense | 3.4 | 3.6 | 5.4 | 11.6 | ||
Equity-Settled Performance Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total stock-based compensation expense | 0.9 | 0 | 2 | 0 | ||
Employee stock purchase plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total stock-based compensation expense | 0.3 | 0.3 | 0.9 | 1 | ||
Director compensation program/other | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Total stock-based compensation expense | $ 0.3 | $ 0.5 | $ 1.3 | $ 1.1 | ||
[1] | Three Months Ended Nine Months Ended(in millions) February 28, 2016 February 22, 2015 February 28, 2016 February 22, 2015Stock options $1.6 $2.4 $6.5 $17.1Restricted stock/restricted stock units 0.5 0.5 1.4 1.6Darden stock units 4.9 4.1 11.7 8.9Cash-settled performance stock units 3.4 3.6 5.4 11.6Equity-settled performance stock units 0.9 — 2.0 —Employee stock purchase plan 0.3 0.3 0.9 1.0Director compensation program/other 0.3 0.5 1.3 1.1Total stock-based compensation expense $11.9 $11.4 $29.2 $41.3 |
Impairment and Disposal of As65
Impairment and Disposal of Assets, Net (Schedule of Impairments and Disposal of Assets) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2016 | Feb. 22, 2015 | Feb. 28, 2016 | Feb. 22, 2015 | |
Asset Impairment Charges [Abstract] | ||||
Restaurant impairments | $ 0 | $ 0.3 | $ 9.2 | $ 34.1 |
Disposal gains | 2.1 | 3.7 | 5.3 | 3.9 |
Other | 0 | 4.2 | 0 | 16.9 |
Asset Impairment Charges | $ (2.1) | $ 0.8 | $ 3.9 | $ 47.1 |
Workforce Reduction Costs (Othe
Workforce Reduction Costs (Other Current Liabilities) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Feb. 28, 2016 | Feb. 22, 2015 | Feb. 28, 2016 | Feb. 22, 2015 | ||||
Restructuring Cost and Reserve [Line Items] | |||||||
Other restructuring costs | $ (0.1) | [1] | $ (0.7) | $ (0.1) | [1] | $ (28.1) | |
Payments | (35.5) | ||||||
Adjustments | 0.5 | ||||||
Balance at February 28, 2016 | 4.3 | 4.3 | |||||
Fiscal Year 2014 Plans | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring charges | 14.5 | ||||||
Fiscal Year 2015 Plans | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring charges | 24.8 | ||||||
Employee termination benefits | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Other restructuring costs | [2] | 0 | [1] | (0.7) | (0.2) | [1] | (27.7) |
Payments | [3] | (34.2) | |||||
Adjustments | [3] | 0.8 | |||||
Balance at February 28, 2016 | [3] | 4.2 | 4.2 | ||||
Employee termination benefits | Fiscal Year 2014 Plans | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring charges | [3] | 13.4 | |||||
Employee termination benefits | Fiscal Year 2015 Plans | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring charges | [3] | 24.2 | |||||
Other | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Other restructuring costs | [4] | (0.1) | [1] | $ 0 | (0.1) | [1] | $ (0.4) |
Payments | (1.3) | ||||||
Adjustments | (0.3) | ||||||
Balance at February 28, 2016 | $ 0.1 | 0.1 | |||||
Other | Fiscal Year 2014 Plans | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring charges | 1.1 | ||||||
Other | Fiscal Year 2015 Plans | |||||||
Restructuring Cost and Reserve [Line Items] | |||||||
Restructuring charges | $ 0.6 | ||||||
[1] | Reflects subsequent adjustments to the fiscal 2014 and 2015 plans based on updated information. | ||||||
[2] | Includes salary and stock-based compensation expense. | ||||||
[3] | Excludes costs associated with stock options and restricted stock that will be settled in shares upon vesting. | ||||||
[4] | Includes postemployment medical, outplacement and relocation costs. |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||
Feb. 28, 2016 | Feb. 22, 2015 | Feb. 28, 2016 | Feb. 28, 2016 | Feb. 22, 2015 | May. 29, 2016 | May. 31, 2015 | |
Debt Instrument [Line Items] | |||||||
Current portion of long-term debt | $ 447.7 | $ 447.7 | $ 447.7 | $ 1,470 | |||
Extinguishment of debt, amount | 1,010 | $ 1,010 | |||||
Loss on extinguishment of debt | 71.3 | $ 0.8 | 106.8 | $ 91.3 | |||
Expense (benefit) for cash components for repurchase premiums and make-whole amountsnguishment costs | (68.7) | 44 | |||||
Non-cash charges on extinguishment of debt | $ 38.1 | $ 47.3 | |||||
Long-term Debt | Variable Rate Term Loan Due August 2017 | |||||||
Debt Instrument [Line Items] | |||||||
Extinguishment of debt, amount | 262 | ||||||
Senior Notes | 6.200% Senior Notes Due October 2017 | |||||||
Debt Instrument [Line Items] | |||||||
Extinguishment of debt, amount | $ 500 | ||||||
Interest rate of debt | 6.20% | 6.20% | 6.20% | ||||
Senior Notes | 4.500% Senior Notes Due October 2021 | |||||||
Debt Instrument [Line Items] | |||||||
Extinguishment of debt, amount | $ 121.9 | ||||||
Interest rate of debt | 4.50% | 4.50% | 4.50% | ||||
Senior Notes | 3.350% Senior Note due November 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Extinguishment of debt, amount | $ 111.1 | ||||||
Interest rate of debt | 3.35% | 3.35% | 3.35% | ||||
Senior Notes | 4.520% Senior Notes Due August 2024 | |||||||
Debt Instrument [Line Items] | |||||||
Extinguishment of debt, amount | $ 10 | ||||||
Interest rate of debt | 4.52% | 4.52% | 4.52% | ||||
Senior Notes | 6.000% Senior Notes Due In August 2035 | |||||||
Debt Instrument [Line Items] | |||||||
Current portion of long-term debt | $ 150 | $ 150 | $ 150 | ||||
Interest rate of debt | 6.00% | 6.00% | 6.00% | ||||
Senior Notes | 6.800% Senior Notes Due In October 2037 | |||||||
Debt Instrument [Line Items] | |||||||
Current portion of long-term debt | $ 300 | $ 300 | $ 300 | ||||
Interest rate of debt | 6.80% | 6.80% | 6.80% | ||||
Scenario, Forecast | Variable Rate Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Current portion of long-term debt | $ 8 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - Dividend Declared | Mar. 31, 2016$ / shares |
Subsequent Event [Line Items] | |
Dividend declared date | Mar. 31, 2016 |
Cash dividend declared, per share | $ 0.50 |
Dividend payable date | May 2, 2016 |
Dividends payable date of record | Apr. 11, 2016 |