Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Nov. 27, 2016 | Dec. 15, 2016 | |
Document And Entity Information Abstract | ||
Entity Registrant Name | DARDEN RESTAURANTS INC | |
Entity Central Index Key | 940,944 | |
Current Fiscal Year End Date | --05-28 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Nov. 27, 2016 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 124,165,070 |
Consolidated Statements of Earn
Consolidated Statements of Earnings - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 27, 2016 | Nov. 29, 2015 | Nov. 27, 2016 | Nov. 29, 2015 | |
Income Statement [Abstract] | ||||
Sales | $ 1,642.5 | $ 1,608.8 | $ 3,356.9 | $ 3,295.8 |
Costs and expenses: | ||||
Food and beverage | 478.1 | 482.1 | 971.3 | 984.9 |
Restaurant labor | 538.1 | 523.8 | 1,083.9 | 1,059.8 |
Restaurant expenses | 305.3 | 278 | 609 | 549.9 |
Marketing expenses | 57.1 | 58.3 | 120.8 | 123.9 |
General and administrative expenses | 79.5 | 101.9 | 167.2 | 199 |
Depreciation and amortization | 67.8 | 75.3 | 134.6 | 156.4 |
Impairments and disposal of assets, net | 0.1 | 7.7 | (7.7) | 6 |
Total operating costs and expenses | 1,526 | 1,527.1 | 3,079.1 | 3,079.9 |
Operating income | 116.5 | 81.7 | 277.8 | 215.9 |
Interest, net | 9.5 | 57.3 | 19.4 | 79.7 |
Earnings before income taxes | 107 | 24.4 | 258.4 | 136.2 |
Income tax expense (benefit) | 27.3 | (5.7) | 67.6 | 25.1 |
Earnings from continuing operations | 79.7 | 30.1 | 190.8 | 111.1 |
Earnings (loss) from discontinued operations, net of tax expense (benefit) of $(0.6), $0.2, $(1.3) and $3.2, respectively | (0.2) | 13.1 | (1.1) | 18.5 |
Net earnings | $ 79.5 | $ 43.2 | $ 189.7 | $ 129.6 |
Basic net earnings per share: | ||||
Earnings from continuing operations (in dollars per share) | $ 0.65 | $ 0.23 | $ 1.54 | $ 0.87 |
Earnings (loss) from discontinued operations (in dollars per share) | 0 | 0.11 | (0.01) | 0.14 |
Net earnings (in dollars per share) | 0.65 | 0.34 | 1.53 | 1.01 |
Diluted net earnings per share: | ||||
Earnings from continuing operations (in dollars per share) | 0.64 | 0.23 | 1.52 | 0.86 |
Earnings (loss) from discontinued operations (in dollars per share) | 0 | 0.10 | (0.01) | 0.14 |
Net earnings (in dollars per share) | $ 0.64 | $ 0.33 | $ 1.51 | $ 1 |
Average number of common shares outstanding: | ||||
Basic (in shares) | 123.1 | 128.1 | 124 | 127.7 |
Diluted (in shares) | 124.9 | 129.9 | 125.8 | 129.7 |
Dividends declared per common share (in dollars per share) | $ 0.56 | $ 0.55 | $ 1.12 | $ 1.1 |
Consolidated Statements of Ear3
Consolidated Statements of Earnings (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 27, 2016 | Nov. 29, 2015 | Nov. 27, 2016 | Nov. 29, 2015 | |
Income Statement [Abstract] | ||||
Earnings (losses) from discontinued operations, tax expense (benefit) | $ (0.6) | $ 0.2 | $ (1.3) | $ 3.2 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 27, 2016 | Nov. 29, 2015 | Nov. 27, 2016 | Nov. 29, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 79.5 | $ 43.2 | $ 189.7 | $ 129.6 |
Other comprehensive income (loss): | ||||
Foreign currency adjustment | 0.6 | 0.1 | 0.6 | 0.9 |
Change in fair value of derivatives and amortization of unrecognized gains and losses on derivatives, net of taxes of $0.0, $13.8, $0.0 and $14.3, respectively | 5.3 | 20.2 | 2.8 | 20.9 |
Amortization of unrecognized net actuarial (loss) gain, net of taxes of $0.1, $0.0, $0.2 and $(0.1), respectively, related to pension and other post-employment benefits | 0.2 | (0.1) | 0.3 | (0.2) |
Other comprehensive income | 6.1 | 20.2 | 3.7 | 21.6 |
Total comprehensive income | $ 85.6 | $ 63.4 | $ 193.4 | $ 151.2 |
Consolidated Statements of Com5
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 27, 2016 | Nov. 29, 2015 | Nov. 27, 2016 | Nov. 29, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Change in fair value of derivatives, net of taxes of | $ 0 | $ 13.8 | $ 0 | $ 14.3 |
Amortization of unrecognized net actuarial (loss) gain, net of taxes of $0.1 and $(0.1), respectively, related to pension and other post-employment benefits | $ 0.1 | $ 0 | $ 0.2 | $ (0.1) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Nov. 27, 2016 | May 29, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 116.8 | $ 274.8 |
Receivables, net | 69.8 | 64 |
Inventories | 183.6 | 175.4 |
Prepaid income taxes | 44.6 | 46.1 |
Prepaid expenses and other current assets | 82.2 | 76.4 |
Deferred income taxes | 173.1 | 163.3 |
Assets held for sale | 13.3 | 20.3 |
Total current assets | 683.4 | 820.3 |
Land, buildings and equipment, net of accumulated depreciation and amortization of $1,909.9 and $1,819.0, respectively | 2,056.9 | 2,041.6 |
Goodwill | 872.3 | 872.3 |
Trademarks | 575.2 | 574.6 |
Other assets | 274.1 | 273.8 |
Total assets | 4,461.9 | 4,582.6 |
Current liabilities: | ||
Accounts payable | 249.6 | 241.9 |
Accrued payroll | 109 | 135.1 |
Other accrued taxes | 48.9 | 49.1 |
Unearned revenues | 336.2 | 360.4 |
Other current liabilities | 407.6 | 400.6 |
Total current liabilities | 1,151.3 | 1,187.1 |
Long-term debt, less current portion | 440.5 | 440 |
Deferred income taxes | 260.8 | 255.2 |
Deferred rent | 266.1 | 249.7 |
Other liabilities | 489.8 | 498.6 |
Total liabilities | 2,608.5 | 2,630.6 |
Stockholders’ equity: | ||
Common stock and surplus | 1,522.9 | 1,502.6 |
Retained earnings | 424.4 | 547.5 |
Treasury stock | (7.8) | (7.8) |
Accumulated other comprehensive income (loss) | (83.3) | (87) |
Unearned compensation | (2.8) | (3.3) |
Total stockholders’ equity | 1,853.4 | 1,952 |
Total liabilities and stockholders’ equity | $ 4,461.9 | $ 4,582.6 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Nov. 27, 2016 | May 29, 2016 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation and amortization | $ 1,909.9 | $ 1,819 |
Consolidated Statements of Chan
Consolidated Statements of Changes In Stockholders' Equity - USD ($) $ in Millions | Total | Common Stock And Surplus | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss) | Unearned Compensation |
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 | 129.6 | 129.6 | ||||
Other comprehensive income | 21.6 | 21.6 | ||||
Dividends declared | (140.6) | (140.6) | ||||
Stock option exercises (1.1, 1.5 shares) | 59.7 | 59.7 | ||||
Stock-based compensation | 8.5 | 8.5 | ||||
ESOP note receivable repayments | 0.4 | 0.4 | ||||
Income tax benefits credited to equity | 12 | 12 | ||||
Repurchases of common stock (3.5, 0.0 shares) | (0.4) | (0.1) | (0.3) | |||
Issuance of stock under Employee Stock Purchase Plan and other plans (0.1, 0.1) shares) | 2.3 | 2.3 | ||||
Separation of Four Corners Property Trust | (436.8) | (436.8) | ||||
Ending balance at Nov. 29, 2015 | 1,989.8 | 1,488.3 | 577.9 | (7.8) | (65) | (3.6) |
Beginning balance at Aug. 30, 2015 | (85.2) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | 43.2 | |||||
Other comprehensive income | 20.2 | |||||
Ending balance at Nov. 29, 2015 | 1,989.8 | 1,488.3 | 577.9 | (7.8) | (65) | (3.6) |
Beginning balance at May. 29, 2016 | 1,952 | 1,502.6 | 547.5 | (7.8) | (87) | (3.3) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | 189.7 | 189.7 | ||||
Other comprehensive income | 3.7 | 3.7 | ||||
Dividends declared | (139.5) | (139.5) | ||||
Stock option exercises (1.1, 1.5 shares) | 43.4 | 43.4 | ||||
Stock-based compensation | 7.4 | 7.4 | ||||
ESOP note receivable repayments | 0.5 | 0.5 | ||||
Income tax benefits credited to equity | 8.3 | 8.3 | ||||
Repurchases of common stock (3.5, 0.0 shares) | (214.7) | (41.4) | (173.3) | |||
Issuance of stock under Employee Stock Purchase Plan and other plans (0.1, 0.1) shares) | 2.6 | 2.6 | ||||
Ending balance at Nov. 27, 2016 | 1,853.4 | 1,522.9 | 424.4 | (7.8) | (83.3) | (2.8) |
Beginning balance at Aug. 28, 2016 | (89.4) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | 79.5 | |||||
Other comprehensive income | 6.1 | |||||
Ending balance at Nov. 27, 2016 | $ 1,853.4 | $ 1,522.9 | $ 424.4 | $ (7.8) | $ (83.3) | $ (2.8) |
Consolidated Statements of Cha9
Consolidated Statements of Changes In Stockholders' Equity (Parenthetical) - shares shares in Millions | 6 Months Ended | |
Nov. 27, 2016 | Nov. 29, 2015 | |
Statement of Stockholders' Equity [Abstract] | ||
Stock option exercised, shares | 1.1 | 1.5 |
Repurchases of common stock, shares | 3.5 | 0 |
Issuance of treasury stock under Employee Stock Purchase Plan and other plans, shares | 0.1 | 0.1 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Nov. 27, 2016 | Nov. 29, 2015 | |
Cash flows—operating activities | ||
Net earnings | $ 189.7 | $ 129.6 |
(Earnings) losses from discontinued operations, net of tax | 1.1 | (18.5) |
Adjustments to reconcile net earnings from continuing operations to cash flows: | ||
Depreciation and amortization | 134.6 | 156.4 |
Impairments and disposal of assets, net | (7.7) | 6 |
Amortization of loan costs and losses on interest-rate related derivatives | 0.5 | 3.1 |
Stock-based compensation expense | 18 | 17.3 |
Change in current assets and liabilities | (72.6) | (91) |
Contributions to pension and postretirement plans | (0.8) | (0.7) |
Change in cash surrender value of trust-owned life insurance | (3.5) | 1.8 |
Deferred income taxes | (5.8) | (58.8) |
Change in deferred rent | 15.9 | 10.7 |
Change in other assets and liabilities | 15.1 | (5) |
Loss on extinguishment of debt | 0 | 35.5 |
Other, net | 9.8 | 4.2 |
Net cash provided by operating activities of continuing operations | 294.3 | 190.6 |
Cash flows—investing activities | ||
Purchases of land, buildings and equipment | (135.3) | (122.2) |
Proceeds from disposal of land, buildings and equipment | 6.9 | 311.4 |
Purchases of marketable securities | (0.9) | 0 |
Proceeds from sale of marketable securities | 2 | 0.8 |
Purchases of capitalized software and other assets | (13.4) | (10.5) |
Net cash provided by (used in) investing activities of continuing operations | (140.7) | 179.5 |
Cash flows—financing activities | ||
Proceeds from issuance of common stock | 46 | 62.1 |
Income tax benefits credited to equity | 8.3 | 12 |
Special cash distribution from Four Corners Property Trust | 0 | 315 |
Dividends paid | (139.5) | (140.6) |
Repurchases of common stock | (214.7) | (0.4) |
ESOP note receivable repayments | 0.5 | 0.4 |
Repayment of long-term debt | 0 | (270) |
Principal payments on capital and financing leases | (1.8) | (1.6) |
Net cash used in financing activities of continuing operations | (301.2) | (23.1) |
Cash flows—discontinued operations | ||
Net cash used in operating activities of discontinued operations | (10.4) | (31.6) |
Net cash provided by investing activities of discontinued operations | 0 | 6.3 |
Net cash used in discontinued operations | (10.4) | (25.3) |
Increase (decrease) in cash and cash equivalents | (158) | 321.7 |
Cash and cash equivalents - beginning of period | 274.8 | 535.9 |
Cash and cash equivalents - end of period | 116.8 | 857.6 |
Cash flows from changes in current assets and liabilities | ||
Receivables, net | (1.7) | 15.9 |
Inventories | (8.3) | (6.3) |
Prepaid expenses and other current assets | (5.3) | (7.6) |
Accounts payable | (3.5) | (1.2) |
Accrued payroll | (26.1) | (31) |
Prepaid/accrued income taxes | 1.4 | (7.1) |
Other accrued taxes | (0.2) | (0.7) |
Unearned revenues | (12.9) | (10.6) |
Other current liabilities | (16) | (42.4) |
Change in current assets and liabilities | $ (72.6) | $ (91) |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Nov. 27, 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 6 joint venture restaurants managed by us and 19 franchised restaurants. We also have 34 franchised restaurants in operation located in Latin America, the Middle East 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 28, 2017 will contain 52 weeks of operation. Operating results for the quarter ended November 27, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending May 28, 2017 . 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 29, 2016 . 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. REIT Transaction - Separation of Four Corners On November 9, 2015, we completed the spin-off of Four Corners Property Trust, Inc. (Four Corners) with the pro rata distribution of one share of common stock for every three shares of Darden common stock to Darden shareholders. The separation included the transfer of 6 LongHorn Steakhouse restaurants and 418 restaurant properties to Four Corners. 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 is effective for us in the first quarter of fiscal 2019, which is when we plan to adopt these provisions. This update permits the use of either the retrospective or cumulative effect transition method, however we have not yet selected a transition method. Upon initial evaluation, we do not believe this guidance will impact our recognition of revenue from company-owned restaurants, which is our primary source of revenue. We are continuing to evaluate the effect this guidance will have on other, less significant revenue sources, including franchises and consumer packaged goods. 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 us in the first quarter of fiscal 2018, which is when we plan to adopt these provisions. 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 us in the first quarter of fiscal 2018, which is when we plan to adopt these provisions. 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 us in the first quarter of fiscal 2020, which is when we plan to adopt these provisions. Upon initial evaluation, we expect our balance sheet presentation will be materially impacted upon adoption. We are continuing to evaluate the effect this guidance will have on our consolidated financial statements and related disclosures. 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 us in the first quarter of fiscal 2018, which is when we plan to adopt these provisions. This guidance will be applied either prospectively, retrospectively or using a modified retrospective transition method, depending on the area covered in this update. We have not yet determined the effect of the standard on our ongoing financial reporting. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230). This update provides clarification regarding how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. This update is effective for annual and interim periods beginning after December 15, 2017, which will require us to adopt these provisions in the first quarter of fiscal 2019 using a retrospective approach. Early adoption is permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740). This update addresses the income tax consequences of intra-entity transfers of assets other than inventory. Current GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. In addition, interpretations of this guidance have developed in practice over the years for transfers of certain intangible and tangible assets. The amendments in the update will require recognition of current and deferred income taxes resulting from an intra-entity transfer of an asset other than inventory when the transfer occurs. This update is effective for annual and interim periods beginning after December 15, 2017, which will require us to adopt these provisions in the first quarter of fiscal 2019 using a modified retrospective approach. Early adoption is permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. |
Discontinued Operations and Ass
Discontinued Operations and Assets Held for Sale | 6 Months Ended |
Nov. 27, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations and Assets Held for Sale | Discontinued Operations and Assets Held for Sale Discontinued Operations Earnings (loss) from discontinued operations, net of taxes in our accompanying consolidated statements of earnings is primarily related to the Red Lobster disposition and is comprised of the following: Three Months Ended Six Months Ended (in millions) November 27, 2016 November 29, 2015 November 27, 2016 November 29, 2015 Costs and expenses: Restaurant and marketing expenses $ (0.2 ) $ — $ — $ 0.3 Other income and expenses (1) 1.0 (13.3 ) 2.4 (22.0 ) Earnings (loss) before income taxes (0.8 ) 13.3 (2.4 ) 21.7 Income tax expense (benefit) (0.6 ) 0.2 (1.3 ) 3.2 Earnings (loss) from discontinued operations, net of tax $ (0.2 ) $ 13.1 $ (1.1 ) $ 18.5 (1) Amounts for the quarter and six months ended November 29, 2015 include gains recognized upon satisfaction of landlord consents. Assets Held For Sale Assets classified as held for sale on our accompanying consolidated balance sheets as of November 27, 2016 and May 29, 2016 , consisted of land, buildings and equipment with carrying amounts of $13.3 million and $20.3 million , respectively, primarily related to excess land parcels adjacent to our corporate headquarters. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 6 Months Ended |
Nov. 27, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Cash paid for interest and income taxes are as follows: Six Months Ended (in millions) November 27, 2016 November 29, 2015 Interest paid, net of amounts capitalized $ 18.6 $ 40.8 Income taxes paid, net of refunds 57.2 103.9 Non-cash investing and financing activities are as follows: Six Months Ended (in millions) November 27, 2016 November 29, 2015 Increase in land, buildings and equipment through accrued purchases $ 26.1 $ 11.2 Net book value of assets distributed in Four Corners separation, net of deferred tax liabilities — 751.8 |
Income Taxes
Income Taxes | 6 Months Ended |
Nov. 27, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective income tax rate for the quarter ended November 27, 2016 was 25.5 percent compared to an effective income tax rate benefit of 23.4 percent for the quarter ended November 29, 2015 . The effective income tax rate for the six months ended November 27, 2016 was 26.2 percent compared to an effective income tax rate of 18.4 percent for the six months ended November 29, 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, our effective tax rates would have been approximately 18.5 percent and 25.0 percent for the quarter and six months ended November 29, 2015, respectively. The increase in the effective income tax rate for the quarter and six months ended November 27, 2016 as compared to the quarter and six months ended November 29, 2015 , excluding these impacts, is primarily attributable to the unfavorable impact of FICA tax credits for employee reported tips and Work Opportunity Tax Credits on higher earnings before income taxes. Included in our remaining balance of unrecognized tax benefits is $ 0.6 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 | 6 Months Ended |
Nov. 27, 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 Six Months Ended (in millions) November 27, November 29, November 27, November 29, Anti-dilutive stock-based compensation awards 0.9 0.4 0.7 0.2 |
Segment Information
Segment Information | 6 Months Ended |
Nov. 27, 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 November 27, 2016 Sales $ 915.0 $ 365.0 $ 128.6 $ 233.9 $ — $ 1,642.5 Restaurant and marketing expenses 761.5 312.6 105.2 199.3 — 1,378.6 Segment profit $ 153.5 $ 52.4 $ 23.4 $ 34.6 $ — $ 263.9 Depreciation and amortization $ 31.1 $ 16.3 $ 7.2 $ 13.2 $ — $ 67.8 Impairments and disposal of assets, net (0.2 ) — — — 0.3 0.1 (in millions) Olive Garden LongHorn Steakhouse Fine Dining Other Business Corporate Consolidated For the three months ended November 29, 2015 Sales $ 892.3 $ 365.1 $ 123.3 $ 228.1 $ — $ 1,608.8 Restaurant and marketing expenses 735.2 310.3 100.9 195.8 — 1,342.2 Segment profit $ 157.1 $ 54.8 $ 22.4 $ 32.3 $ — $ 266.6 Depreciation and amortization $ 36.3 $ 18.7 $ 7.1 $ 13.2 $ — $ 75.3 Impairments and disposal of assets, net 1.2 — — 6.5 — 7.7 (in millions) Olive Garden LongHorn Steakhouse Fine Dining Other Business Corporate Consolidated For the six months ended November 27, 2016 Sales $ 1,876.2 $ 751.3 $ 242.8 $ 486.6 $ — $ 3,356.9 Restaurant and marketing expenses 1,536.4 638.8 202.6 407.2 — 2,785.0 Segment profit $ 339.8 $ 112.5 $ 40.2 $ 79.4 $ — $ 571.9 Depreciation and amortization $ 61.1 $ 32.6 $ 14.4 $ 26.5 $ — $ 134.6 Impairments and disposal of assets, net (1.7 ) (0.1 ) — (6.1 ) 0.2 (7.7 ) Purchases of land, buildings and equipment 60.9 28.4 21.6 22.7 1.7 135.3 (in millions) Olive Garden LongHorn Steakhouse Fine Dining Other Business Corporate Consolidated For the six months ended November 29, 2015 Sales $ 1,836.9 $ 748.9 $ 236.5 $ 473.5 $ — $ 3,295.8 Restaurant and marketing expenses 1,487.8 637.0 196.3 397.4 — 2,718.5 Segment profit $ 349.1 $ 111.9 $ 40.2 $ 76.1 $ — $ 577.3 Depreciation and amortization $ 76.0 $ 39.4 $ 14.4 $ 26.6 $ — $ 156.4 Impairments and disposal of assets, net — (1.2 ) 0.7 6.5 — 6.0 Purchases of land, buildings and equipment 44.1 30.3 8.0 37.4 2.4 122.2 Reconciliation of segment profit to earnings from continuing operations before income taxes: Three Months Ended Six Months Ended (in millions) November 27, 2016 November 29, 2015 November 27, 2016 November 29, 2015 Segment profit $ 263.9 $ 266.6 $ 571.9 $ 577.3 Less general and administrative expenses (79.5 ) (101.9 ) (167.2 ) (199.0 ) Less depreciation and amortization (67.8 ) (75.3 ) (134.6 ) (156.4 ) Less impairments and disposal of assets, net (0.1 ) (7.7 ) 7.7 (6.0 ) Less interest, net (9.5 ) (57.3 ) (19.4 ) (79.7 ) Earnings before income taxes $ 107.0 $ 24.4 $ 258.4 $ 136.2 |
Impairment and Disposal of Asse
Impairment and Disposal of Assets, Net | 6 Months Ended |
Nov. 27, 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 Six Months Ended (in millions) November 27, 2016 November 29, 2015 November 27, 2016 November 29, 2015 Restaurant impairments $ — $ 7.9 $ — $ 9.2 Disposal gains (1.2 ) (0.2 ) (9.0 ) (3.2 ) Other 1.3 — 1.3 — Impairments and disposal of assets, net $ 0.1 $ 7.7 $ (7.7 ) $ 6.0 Restaurant impairments for the quarter and six months ended November 29, 2015 were primarily related to underperforming restaurants and restaurant assets involved in individual sale-leaseback transactions. Disposal gains for the quarter and six months ended November 27, 2016 were primarily related to the sale of restaurant properties, favorable lease terminations and the sale of excess land parcels. For the six months ended November 29, 2015 , disposal gains were primarily related to sale-leaseback transactions and a restaurant lease termination. Other impairment charges for the quarter and six months ended November 27, 2016 primarily related to a cost-method investment, which has no remaining carrying value. 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. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Nov. 27, 2016 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders' Equity Accumulated Other Comprehensive Income (Loss) (AOCI) The components of accumulated other comprehensive income (loss), net of tax, for the quarters ended November 27, 2016 and November 29, 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) Balances at August 28, 2016 $ (1.2 ) $ 0.1 $ 1.4 $ (89.7 ) $ (89.4 ) Gain (loss) 0.6 — 5.3 — 5.9 Reclassification realized in net earnings — — — 0.2 0.2 Balance at November 27, 2016 $ (0.6 ) $ 0.1 $ 6.7 $ (89.5 ) $ (83.3 ) Balance at August 30, 2015 $ (0.9 ) $ 0.1 $ (18.4 ) $ (66.0 ) $ (85.2 ) Gain (loss) 0.1 — (2.1 ) — (2.0 ) Reclassification realized in net earnings — — 22.3 (0.1 ) 22.2 Balance at November 29, 2015 $ (0.8 ) $ 0.1 $ 1.8 $ (66.1 ) $ (65.0 ) The components of accumulated other comprehensive income (loss), net of tax, for the six months ended November 27, 2016 and November 29, 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) Balances at May 29, 2016 $ (1.2 ) $ 0.1 $ 3.9 $ (89.8 ) $ (87.0 ) Gain (loss) 0.6 — 1.4 — 2.0 Reclassification realized in net earnings — — 1.4 0.3 1.7 Balance at November 27, 2016 $ (0.6 ) $ 0.1 $ 6.7 $ (89.5 ) $ (83.3 ) Balance at May 31, 2015 $ (1.7 ) $ 0.1 $ (19.1 ) $ (65.9 ) $ (86.6 ) Gain (loss) 0.9 — (0.1 ) — 0.8 Reclassification realized in net earnings — — 21.0 (0.2 ) 20.8 Balance at November 29, 2015 $ (0.8 ) $ 0.1 $ 1.8 $ (66.1 ) $ (65.0 ) 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 Six Months Ended (in millions) AOCI Components Location of Gain (Loss) Recognized in Earnings November 27, November 29, November 27, November 29, Derivatives Equity contracts (1) $ — $ — $ (1.4 ) $ 2.1 Interest rate contracts (2) — (36.1 ) — (37.4 ) Total before tax $ — $ (36.1 ) $ (1.4 ) $ (35.3 ) Tax benefit — 13.8 — 14.3 Net of tax $ — $ (22.3 ) $ (1.4 ) $ (21.0 ) Benefit plan funding position Recognized net actuarial loss - pension/postretirement plans (3) $ (0.8 ) $ (0.8 ) $ (1.6 ) $ (1.4 ) Recognized net actuarial gain - other plans (4) 0.5 0.9 1.1 1.7 Total before tax $ (0.3 ) $ 0.1 $ (0.5 ) $ 0.3 Tax benefit (expense) 0.1 — 0.2 (0.1 ) Net of tax $ (0.2 ) $ 0.1 $ (0.3 ) $ 0.2 (1) Primarily included in restaurant labor costs and general and administrative expenses. See Note 11 for additional details. (2) Included in interest, net, on our consolidated statements of earnings. Reclassifications for the quarter and six months ended November 29, 2015 primarily related to the acceleration of hedge loss amortization resulting from the pay down of 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 9 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 | 6 Months Ended |
Nov. 27, 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 Six Months Ended (in millions) November 27, November 29, November 27, November 29, Interest cost $ 2.6 $ 2.6 $ 5.1 $ 5.3 Expected return on plan assets (4.1 ) (3.6 ) (8.0 ) (7.2 ) Recognized net actuarial loss 0.8 0.8 1.6 1.4 Net periodic benefit (credit) cost $ (0.7 ) $ (0.2 ) $ (1.3 ) $ (0.5 ) Postretirement Benefit Plan Three Months Ended Six Months Ended (in millions) November 27, November 29, November 27, November 29, Service cost $ 0.1 $ 0.1 $ 0.1 $ 0.1 Interest cost 0.2 0.2 0.4 0.4 Amortization of unrecognized prior service credit (1.2 ) (1.2 ) (2.4 ) (2.4 ) Recognized net actuarial loss 0.4 0.3 0.8 0.6 Net periodic benefit (credit) cost $ (0.5 ) $ (0.6 ) $ (1.1 ) $ (1.3 ) |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Nov. 27, 2016 | |
Share-based Compensation [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation We grant stock options for a fixed number of shares to certain employees 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. The weighted-average fair value of non-qualified stock options and the related assumptions used in the Black-Scholes option pricing model were as follows. Stock Options Granted Six Months Ended November 27, 2016 November 29, 2015 Weighted-average fair value (1) $ 9.08 $ 12.72 Dividend yield 3.5 % 3.3 % Expected volatility of stock 24.3 % 28.0 % Risk-free interest rate 1.4 % 1.9 % Expected option life (in years) 6.5 6.5 Weighted-average exercise price per share (1) $ 59.70 $ 64.85 (1) Weighted averages for the three months ended November 29, 2015 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 six months ended November 27, 2016 : (in millions) Stock Options Restricted Stock/ Restricted Stock Units Darden Stock Units Cash-Settled Performance Stock Units Equity-Settled Outstanding beginning of period 6.32 0.11 1.43 0.21 0.17 Awards granted 0.58 0.05 0.31 — 0.19 Awards exercised/vested (1.12 ) (0.01 ) (0.27 ) (0.10 ) — Awards forfeited (0.15 ) (0.01 ) (0.05 ) (0.03 ) (0.03 ) Performance unit adjustment — — — 0.01 — Outstanding end of period 5.63 0.14 1.42 0.09 0.33 We recognized expense from stock-based compensation as follows: Three Months Ended Six Months Ended (in millions) November 27, November 29, November 27, November 29, Stock options $ 1.6 $ 2.4 $ 3.1 $ 4.9 Restricted stock/restricted stock units 0.3 0.5 0.7 0.9 Darden stock units 6.7 2.6 9.3 6.8 Cash-settled performance stock units 1.3 0.2 1.3 2.0 Equity-settled performance stock units 1.3 0.8 2.4 1.1 Employee stock purchase plan 0.3 0.3 0.6 0.6 Director compensation program/other 0.3 0.3 0.6 1.0 Total stock-based compensation expense $ 11.8 $ 7.1 $ 18.0 $ 17.3 |
Derivative Instruments And Hedg
Derivative Instruments And Hedging Activities | 6 Months Ended |
Nov. 27, 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 Accounting Standards Codification (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 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 November 27, 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. 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 and currently extend through July 2021 . 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. 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, employee-directed investments in Darden stock within the non-qualified deferred compensation plan. 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. These contracts currently extend through July 2021 . The notional and fair values of our derivative contracts are as follows: Fair Values (in millions, except per share data) Number of Shares Outstanding Weighted-Average Per Share Forward Rates Notional Values Derivative Assets (1) Derivative Liabilities (1) Equity forwards November 27, 2016 November 27, May 29, November 27, May 29, Designated 0.4 $ 58.37 $ 23.6 $ 0.7 $ 1.2 $ — $ — Not designated 0.5 $ 51.34 $ 26.6 1.0 2.6 — — Total equity forwards $ 1.7 $ 3.8 $ — $ — (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 equity forwards accounted for as cash flow hedging instruments in the consolidated statements of earnings are as follows: Three Months Ended Six Months Ended (in millions) November 27, 2016 November 29, 2015 November 27, November 29, Gain (loss) recognized in AOCI (effective portion) $ 5.3 $ (2.1 ) $ 1.4 $ (0.1 ) Gain (loss) reclassified from AOCI to earnings (effective portion) — — (1.4 ) 2.1 Gain (loss) recognized in earnings (ineffective portion) (1) 0.1 0.4 0.3 0.5 (1) 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 equity forwards not designated as hedging instruments in the consolidated statements of earnings are as follows: Amount of Gain (Loss) Recognized in Earnings (in millions) Three Months Ended Six Months Ended Location of Gain (Loss) Recognized in Earnings on Derivatives November 27, 2016 November 29, 2015 November 27, 2016 November 29, 2015 Restaurant labor expenses $ 2.6 $ (0.7 ) $ 1.5 $ 1.0 General and administrative expenses 4.9 (1.6 ) 2.9 2.2 Total $ 7.5 $ (2.3 ) $ 4.4 $ 3.2 Based on the fair value of our derivative instruments designated as cash flow hedges as of November 27, 2016 , we expect to reclassify $0.9 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. During fiscal 2016, in connection with the repayment of our 2017, 2021 and 2022 senior notes, we settled the associated interest-rate swap agreements and accelerated the associated amortization of previously settled interest-rate related cash flow hedges. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Nov. 27, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The fair values of cash equivalents, receivables, net and accounts payable 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 November 27, 2016 and May 29, 2016 : Items Measured at Fair Value at November 27, 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) $ 1.7 $ — $ 1.7 $ — U.S. Treasury securities (2) 3.1 3.1 — — Mortgage-backed securities (1) 1.0 — 1.0 — Derivatives: Equity forwards (3) 1.7 — 1.7 — Total $ 7.5 $ 3.1 $ 4.4 $ — Items Measured at Fair Value at May 29, 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) 3.9 3.9 — — Mortgage-backed securities (1) 1.0 — 1.0 — Derivatives: Equity forwards (3) 3.8 — 3.8 — Total $ 10.7 $ 3.9 $ 6.8 $ — (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. The carrying value and fair value of long-term debt as of November 27, 2016 , was $440.5 million and $494.1 million , respectively. The carrying value and fair value of long-term debt as of May 29, 2016 , was $440.0 million and $499.5 million , 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. During the quarter and six months ended November 27, 2016 , there were no adjustments to the fair values of non-financial assets measured at fair value on a non-recurring basis. As of May 29, 2016 , long-lived assets held and used 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 29, 2016 , long-lived assets held for sale with a carrying value of $17.5 million , related to excess land parcels adjacent to our corporate headquarters, were written down to their fair value of $16.9 million , resulting in an impairment charge of $0.6 million . |
Commitments And Contingencies
Commitments And Contingencies | 6 Months Ended |
Nov. 27, 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 November 27, 2016 and May 29, 2016 , we had $125.4 million and $116.5 million , respectively, of standby letters of credit related to workers’ compensation and general liabilities accrued in our consolidated financial statements. As of November 27, 2016 and May 29, 2016 , we had $11.0 million and $8.4 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 November 27, 2016 and May 29, 2016 , we had $159.9 million and $154.2 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 November 27, 2016 and May 29, 2016 , amounted to $134.9 million and $119.3 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. These guarantees expire over their respective lease terms, which range from fiscal 2018 through fiscal 2027 . 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. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Nov. 27, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On December 14, 2016 , the Board of Directors declared a cash dividend of $0.56 per share to be paid February 1, 2017 to all shareholders of record as of the close of business on January 10, 2017 . |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Nov. 27, 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 6 joint venture restaurants managed by us and 19 franchised restaurants. We also have 34 franchised restaurants in operation located in Latin America, the Middle East 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 28, 2017 will contain 52 weeks of operation. Operating results for the quarter ended November 27, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending May 28, 2017 . 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 29, 2016 . 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. |
Application of New Accounting Standards | On November 9, 2015, we completed the spin-off of Four Corners Property Trust, Inc. (Four Corners) with the pro rata distribution of one share of common stock for every three shares of Darden common stock to Darden shareholders. The separation included the transfer of 6 LongHorn Steakhouse restaurants and 418 restaurant properties to Four Corners. 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 is effective for us in the first quarter of fiscal 2019, which is when we plan to adopt these provisions. This update permits the use of either the retrospective or cumulative effect transition method, however we have not yet selected a transition method. Upon initial evaluation, we do not believe this guidance will impact our recognition of revenue from company-owned restaurants, which is our primary source of revenue. We are continuing to evaluate the effect this guidance will have on other, less significant revenue sources, including franchises and consumer packaged goods. 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 us in the first quarter of fiscal 2018, which is when we plan to adopt these provisions. 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 us in the first quarter of fiscal 2018, which is when we plan to adopt these provisions. 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 us in the first quarter of fiscal 2020, which is when we plan to adopt these provisions. Upon initial evaluation, we expect our balance sheet presentation will be materially impacted upon adoption. We are continuing to evaluate the effect this guidance will have on our consolidated financial statements and related disclosures. 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 us in the first quarter of fiscal 2018, which is when we plan to adopt these provisions. This guidance will be applied either prospectively, retrospectively or using a modified retrospective transition method, depending on the area covered in this update. We have not yet determined the effect of the standard on our ongoing financial reporting. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230). This update provides clarification regarding how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. This update is effective for annual and interim periods beginning after December 15, 2017, which will require us to adopt these provisions in the first quarter of fiscal 2019 using a retrospective approach. Early adoption is permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740). This update addresses the income tax consequences of intra-entity transfers of assets other than inventory. Current GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. In addition, interpretations of this guidance have developed in practice over the years for transfers of certain intangible and tangible assets. The amendments in the update will require recognition of current and deferred income taxes resulting from an intra-entity transfer of an asset other than inventory when the transfer occurs. This update is effective for annual and interim periods beginning after December 15, 2017, which will require us to adopt these provisions in the first quarter of fiscal 2019 using a modified retrospective approach. Early adoption is permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. |
Discontinued Operations and A26
Discontinued Operations and Assets Held for Sale (Tables) | 6 Months Ended |
Nov. 27, 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 is primarily related to the Red Lobster disposition and is comprised of the following: Three Months Ended Six Months Ended (in millions) November 27, 2016 November 29, 2015 November 27, 2016 November 29, 2015 Costs and expenses: Restaurant and marketing expenses $ (0.2 ) $ — $ — $ 0.3 Other income and expenses (1) 1.0 (13.3 ) 2.4 (22.0 ) Earnings (loss) before income taxes (0.8 ) 13.3 (2.4 ) 21.7 Income tax expense (benefit) (0.6 ) 0.2 (1.3 ) 3.2 Earnings (loss) from discontinued operations, net of tax $ (0.2 ) $ 13.1 $ (1.1 ) $ 18.5 (1) Amounts for the quarter and six months ended November 29, 2015 include gains recognized upon satisfaction of landlord consents. |
Supplemental Cash Flow Inform27
Supplemental Cash Flow Information (Tables) | 6 Months Ended |
Nov. 27, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | Cash paid for interest and income taxes are as follows: Six Months Ended (in millions) November 27, 2016 November 29, 2015 Interest paid, net of amounts capitalized $ 18.6 $ 40.8 Income taxes paid, net of refunds 57.2 103.9 Non-cash investing and financing activities are as follows: Six Months Ended (in millions) November 27, 2016 November 29, 2015 Increase in land, buildings and equipment through accrued purchases $ 26.1 $ 11.2 Net book value of assets distributed in Four Corners separation, net of deferred tax liabilities — 751.8 |
Net Earnings per Share (Tables)
Net Earnings per Share (Tables) | 6 Months Ended |
Nov. 27, 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 Six Months Ended (in millions) November 27, November 29, November 27, November 29, Anti-dilutive stock-based compensation awards 0.9 0.4 0.7 0.2 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Nov. 27, 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 November 27, 2016 Sales $ 915.0 $ 365.0 $ 128.6 $ 233.9 $ — $ 1,642.5 Restaurant and marketing expenses 761.5 312.6 105.2 199.3 — 1,378.6 Segment profit $ 153.5 $ 52.4 $ 23.4 $ 34.6 $ — $ 263.9 Depreciation and amortization $ 31.1 $ 16.3 $ 7.2 $ 13.2 $ — $ 67.8 Impairments and disposal of assets, net (0.2 ) — — — 0.3 0.1 (in millions) Olive Garden LongHorn Steakhouse Fine Dining Other Business Corporate Consolidated For the three months ended November 29, 2015 Sales $ 892.3 $ 365.1 $ 123.3 $ 228.1 $ — $ 1,608.8 Restaurant and marketing expenses 735.2 310.3 100.9 195.8 — 1,342.2 Segment profit $ 157.1 $ 54.8 $ 22.4 $ 32.3 $ — $ 266.6 Depreciation and amortization $ 36.3 $ 18.7 $ 7.1 $ 13.2 $ — $ 75.3 Impairments and disposal of assets, net 1.2 — — 6.5 — 7.7 (in millions) Olive Garden LongHorn Steakhouse Fine Dining Other Business Corporate Consolidated For the six months ended November 27, 2016 Sales $ 1,876.2 $ 751.3 $ 242.8 $ 486.6 $ — $ 3,356.9 Restaurant and marketing expenses 1,536.4 638.8 202.6 407.2 — 2,785.0 Segment profit $ 339.8 $ 112.5 $ 40.2 $ 79.4 $ — $ 571.9 Depreciation and amortization $ 61.1 $ 32.6 $ 14.4 $ 26.5 $ — $ 134.6 Impairments and disposal of assets, net (1.7 ) (0.1 ) — (6.1 ) 0.2 (7.7 ) Purchases of land, buildings and equipment 60.9 28.4 21.6 22.7 1.7 135.3 |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | Reconciliation of segment profit to earnings from continuing operations before income taxes: Three Months Ended Six Months Ended (in millions) November 27, 2016 November 29, 2015 November 27, 2016 November 29, 2015 Segment profit $ 263.9 $ 266.6 $ 571.9 $ 577.3 Less general and administrative expenses (79.5 ) (101.9 ) (167.2 ) (199.0 ) Less depreciation and amortization (67.8 ) (75.3 ) (134.6 ) (156.4 ) Less impairments and disposal of assets, net (0.1 ) (7.7 ) 7.7 (6.0 ) Less interest, net (9.5 ) (57.3 ) (19.4 ) (79.7 ) Earnings before income taxes $ 107.0 $ 24.4 $ 258.4 $ 136.2 |
Impairment and Disposal of As30
Impairment and Disposal of Assets, Net (Tables) | 6 Months Ended |
Nov. 27, 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 Six Months Ended (in millions) November 27, 2016 November 29, 2015 November 27, 2016 November 29, 2015 Restaurant impairments $ — $ 7.9 $ — $ 9.2 Disposal gains (1.2 ) (0.2 ) (9.0 ) (3.2 ) Other 1.3 — 1.3 — Impairments and disposal of assets, net $ 0.1 $ 7.7 $ (7.7 ) $ 6.0 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Nov. 27, 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 November 27, 2016 and November 29, 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) Balances at August 28, 2016 $ (1.2 ) $ 0.1 $ 1.4 $ (89.7 ) $ (89.4 ) Gain (loss) 0.6 — 5.3 — 5.9 Reclassification realized in net earnings — — — 0.2 0.2 Balance at November 27, 2016 $ (0.6 ) $ 0.1 $ 6.7 $ (89.5 ) $ (83.3 ) Balance at August 30, 2015 $ (0.9 ) $ 0.1 $ (18.4 ) $ (66.0 ) $ (85.2 ) Gain (loss) 0.1 — (2.1 ) — (2.0 ) Reclassification realized in net earnings — — 22.3 (0.1 ) 22.2 Balance at November 29, 2015 $ (0.8 ) $ 0.1 $ 1.8 $ (66.1 ) $ (65.0 ) |
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 Six Months Ended (in millions) AOCI Components Location of Gain (Loss) Recognized in Earnings November 27, November 29, November 27, November 29, Derivatives Equity contracts (1) $ — $ — $ (1.4 ) $ 2.1 Interest rate contracts (2) — (36.1 ) — (37.4 ) Total before tax $ — $ (36.1 ) $ (1.4 ) $ (35.3 ) Tax benefit — 13.8 — 14.3 Net of tax $ — $ (22.3 ) $ (1.4 ) $ (21.0 ) Benefit plan funding position Recognized net actuarial loss - pension/postretirement plans (3) $ (0.8 ) $ (0.8 ) $ (1.6 ) $ (1.4 ) Recognized net actuarial gain - other plans (4) 0.5 0.9 1.1 1.7 Total before tax $ (0.3 ) $ 0.1 $ (0.5 ) $ 0.3 Tax benefit (expense) 0.1 — 0.2 (0.1 ) Net of tax $ (0.2 ) $ 0.1 $ (0.3 ) $ 0.2 (1) Primarily included in restaurant labor costs and general and administrative expenses. See Note 11 for additional details. (2) Included in interest, net, on our consolidated statements of earnings. Reclassifications for the quarter and six months ended November 29, 2015 primarily related to the acceleration of hedge loss amortization resulting from the pay down of 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 9 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) | 6 Months Ended |
Nov. 27, 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 Six Months Ended (in millions) November 27, November 29, November 27, November 29, Interest cost $ 2.6 $ 2.6 $ 5.1 $ 5.3 Expected return on plan assets (4.1 ) (3.6 ) (8.0 ) (7.2 ) Recognized net actuarial loss 0.8 0.8 1.6 1.4 Net periodic benefit (credit) cost $ (0.7 ) $ (0.2 ) $ (1.3 ) $ (0.5 ) Postretirement Benefit Plan Three Months Ended Six Months Ended (in millions) November 27, November 29, November 27, November 29, Service cost $ 0.1 $ 0.1 $ 0.1 $ 0.1 Interest cost 0.2 0.2 0.4 0.4 Amortization of unrecognized prior service credit (1.2 ) (1.2 ) (2.4 ) (2.4 ) Recognized net actuarial loss 0.4 0.3 0.8 0.6 Net periodic benefit (credit) cost $ (0.5 ) $ (0.6 ) $ (1.1 ) $ (1.3 ) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Nov. 27, 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. Stock Options Granted Six Months Ended November 27, 2016 November 29, 2015 Weighted-average fair value (1) $ 9.08 $ 12.72 Dividend yield 3.5 % 3.3 % Expected volatility of stock 24.3 % 28.0 % Risk-free interest rate 1.4 % 1.9 % Expected option life (in years) 6.5 6.5 Weighted-average exercise price per share (1) $ 59.70 $ 64.85 (1) Weighted averages for the three months ended November 29, 2015 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 six months ended November 27, 2016 : (in millions) Stock Options Restricted Stock/ Restricted Stock Units Darden Stock Units Cash-Settled Performance Stock Units Equity-Settled Outstanding beginning of period 6.32 0.11 1.43 0.21 0.17 Awards granted 0.58 0.05 0.31 — 0.19 Awards exercised/vested (1.12 ) (0.01 ) (0.27 ) (0.10 ) — Awards forfeited (0.15 ) (0.01 ) (0.05 ) (0.03 ) (0.03 ) Performance unit adjustment — — — 0.01 — Outstanding end of period 5.63 0.14 1.42 0.09 0.33 |
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 Six Months Ended (in millions) November 27, November 29, November 27, November 29, Stock options $ 1.6 $ 2.4 $ 3.1 $ 4.9 Restricted stock/restricted stock units 0.3 0.5 0.7 0.9 Darden stock units 6.7 2.6 9.3 6.8 Cash-settled performance stock units 1.3 0.2 1.3 2.0 Equity-settled performance stock units 1.3 0.8 2.4 1.1 Employee stock purchase plan 0.3 0.3 0.6 0.6 Director compensation program/other 0.3 0.3 0.6 1.0 Total stock-based compensation expense $ 11.8 $ 7.1 $ 18.0 $ 17.3 |
Derivative Instruments And He34
Derivative Instruments And Hedging Activities (Tables) | 6 Months Ended |
Nov. 27, 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: Fair Values (in millions, except per share data) Number of Shares Outstanding Weighted-Average Per Share Forward Rates Notional Values Derivative Assets (1) Derivative Liabilities (1) Equity forwards November 27, 2016 November 27, May 29, November 27, May 29, Designated 0.4 $ 58.37 $ 23.6 $ 0.7 $ 1.2 $ — $ — Not designated 0.5 $ 51.34 $ 26.6 1.0 2.6 — — Total equity forwards $ 1.7 $ 3.8 $ — $ — (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 | The notional and fair values of our derivative contracts are as follows: Fair Values (in millions, except per share data) Number of Shares Outstanding Weighted-Average Per Share Forward Rates Notional Values Derivative Assets (1) Derivative Liabilities (1) Equity forwards November 27, 2016 November 27, May 29, November 27, May 29, Designated 0.4 $ 58.37 $ 23.6 $ 0.7 $ 1.2 $ — $ — Not designated 0.5 $ 51.34 $ 26.6 1.0 2.6 — — Total equity forwards $ 1.7 $ 3.8 $ — $ — (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 equity forwards accounted for as cash flow hedging instruments in the consolidated statements of earnings are as follows: Three Months Ended Six Months Ended (in millions) November 27, 2016 November 29, 2015 November 27, November 29, Gain (loss) recognized in AOCI (effective portion) $ 5.3 $ (2.1 ) $ 1.4 $ (0.1 ) Gain (loss) reclassified from AOCI to earnings (effective portion) — — (1.4 ) 2.1 Gain (loss) recognized in earnings (ineffective portion) (1) 0.1 0.4 0.3 0.5 (1) 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 equity forwards not designated as hedging instruments in the consolidated statements of earnings are as follows: Amount of Gain (Loss) Recognized in Earnings (in millions) Three Months Ended Six Months Ended Location of Gain (Loss) Recognized in Earnings on Derivatives November 27, 2016 November 29, 2015 November 27, 2016 November 29, 2015 Restaurant labor expenses $ 2.6 $ (0.7 ) $ 1.5 $ 1.0 General and administrative expenses 4.9 (1.6 ) 2.9 2.2 Total $ 7.5 $ (2.3 ) $ 4.4 $ 3.2 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Nov. 27, 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 November 27, 2016 and May 29, 2016 : Items Measured at Fair Value at November 27, 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) $ 1.7 $ — $ 1.7 $ — U.S. Treasury securities (2) 3.1 3.1 — — Mortgage-backed securities (1) 1.0 — 1.0 — Derivatives: Equity forwards (3) 1.7 — 1.7 — Total $ 7.5 $ 3.1 $ 4.4 $ — Items Measured at Fair Value at May 29, 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) 3.9 3.9 — — Mortgage-backed securities (1) 1.0 — 1.0 — Derivatives: Equity forwards (3) 3.8 — 3.8 — Total $ 10.7 $ 3.9 $ 6.8 $ — (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. |
Basis of Presentation (Details)
Basis of Presentation (Details) | Nov. 09, 2015propertyshares | Nov. 27, 2016restaurant | Nov. 29, 2015restaurant |
Summary Of Significant Accounting Policies [Line Items] | |||
Stock split | shares | 1 | ||
Number of restaurant properties | property | 418 | ||
Latin America, the Middle East and Malaysia | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Number of restaurants | 34 | ||
Entity Operated Units | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Number of restaurants | 6 | ||
Franchised Units | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Number of restaurants | 19 | ||
LongHorn Steakhouse | Texas | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Number of restaurants | 6 |
Discontinued Operations and A37
Discontinued Operations and Assets Held for Sale (Income Statement Disclosure) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Nov. 27, 2016 | Nov. 29, 2015 | Nov. 27, 2016 | Nov. 29, 2015 | ||
Discontinued Operations and Disposal Groups [Abstract] | |||||
Restaurant and marketing expenses | $ (0.2) | $ 0 | $ 0 | $ 0.3 | |
Other income and expenses | [1] | 1 | (13.3) | 2.4 | (22) |
Earnings (loss) before income taxes | (0.8) | 13.3 | (2.4) | 21.7 | |
Income tax expense (benefit) | (0.6) | 0.2 | (1.3) | 3.2 | |
Earnings (loss) from discontinued operations, net of tax | $ (0.2) | $ 13.1 | $ (1.1) | $ 18.5 | |
[1] | Amounts for the quarter and six months ended November 29, 2015 include gains recognized upon satisfaction of landlord consents. |
Discontinued Operations and A38
Discontinued Operations and Assets Held for Sale (Narrative) (Details) - USD ($) $ in Millions | Nov. 27, 2016 | May 29, 2016 |
Discontinued Operations and Disposal Groups [Abstract] | ||
Land, buildings and equipment, carrying amount | $ 13.3 | $ 20.3 |
Supplemental Cash Flow Inform39
Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 6 Months Ended | |
Nov. 27, 2016 | Nov. 29, 2015 | |
Supplemental Cash Flow Elements [Abstract] | ||
Interest paid, net of amounts capitalized | $ 18.6 | $ 40.8 |
Income taxes paid, net of refunds | 57.2 | 103.9 |
Increase in land, buildings and equipment through accrued purchases | 26.1 | 11.2 |
Net book value of assets distributed in Four Corners separation, net of deferred tax liabilities | $ 0 | $ 751.8 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 27, 2016 | Nov. 29, 2015 | Nov. 27, 2016 | Nov. 29, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 25.50% | (23.40%) | 26.20% | 18.40% |
Effective income tax rate, excluding debt extinguishment costs and debt extinguishment tax benefit (as a percent) | 18.50% | 25.00% | ||
Tax position, change is reasonably possible in the next twelve months | $ 0.6 | $ 0.6 |
Net Earnings per Share (Details
Net Earnings per Share (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 27, 2016 | Nov. 29, 2015 | Nov. 27, 2016 | Nov. 29, 2015 | |
Earnings Per Share [Abstract] | ||||
Anti-dilutive stock-based compensation awards | 0.9 | 0.4 | 0.7 | 0.2 |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 27, 2016USD ($) | Nov. 29, 2015USD ($) | Nov. 27, 2016USD ($)segment | Nov. 29, 2015USD ($) | |
Segment Reporting [Abstract] | ||||
Number of reportable segments | segment | 4 | |||
Segment Reporting Information [Line Items] | ||||
Sales | $ 1,642.5 | $ 1,608.8 | $ 3,356.9 | $ 3,295.8 |
Restaurant and marketing expenses | 1,378.6 | 1,342.2 | 2,785 | 2,718.5 |
Segment profit | 263.9 | 266.6 | 571.9 | 577.3 |
Depreciation and amortization | 67.8 | 75.3 | 134.6 | 156.4 |
Impairments and disposal of assets, net | 0.1 | 7.7 | (7.7) | 6 |
Purchases of land, buildings and equipment | 135.3 | 122.2 | ||
Operating Segments | Olive Garden | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 915 | 892.3 | 1,876.2 | 1,836.9 |
Restaurant and marketing expenses | 761.5 | 735.2 | 1,536.4 | 1,487.8 |
Segment profit | 153.5 | 157.1 | 339.8 | 349.1 |
Depreciation and amortization | 31.1 | 36.3 | 61.1 | 76 |
Impairments and disposal of assets, net | (0.2) | 1.2 | (1.7) | 0 |
Purchases of land, buildings and equipment | 60.9 | 44.1 | ||
Operating Segments | LongHorn Steakhouse | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 365 | 365.1 | 751.3 | 748.9 |
Restaurant and marketing expenses | 312.6 | 310.3 | 638.8 | 637 |
Segment profit | 52.4 | 54.8 | 112.5 | 111.9 |
Depreciation and amortization | 16.3 | 18.7 | 32.6 | 39.4 |
Impairments and disposal of assets, net | 0 | 0 | (0.1) | (1.2) |
Purchases of land, buildings and equipment | 28.4 | 30.3 | ||
Operating Segments | Fine Dining | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 128.6 | 123.3 | 242.8 | 236.5 |
Restaurant and marketing expenses | 105.2 | 100.9 | 202.6 | 196.3 |
Segment profit | 23.4 | 22.4 | 40.2 | 40.2 |
Depreciation and amortization | 7.2 | 7.1 | 14.4 | 14.4 |
Impairments and disposal of assets, net | 0 | 0 | 0 | 0.7 |
Purchases of land, buildings and equipment | 21.6 | 8 | ||
Operating Segments | Other Business | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 233.9 | 228.1 | 486.6 | 473.5 |
Restaurant and marketing expenses | 199.3 | 195.8 | 407.2 | 397.4 |
Segment profit | 34.6 | 32.3 | 79.4 | 76.1 |
Depreciation and amortization | 13.2 | 13.2 | 26.5 | 26.6 |
Impairments and disposal of assets, net | 0 | 6.5 | (6.1) | 6.5 |
Purchases of land, buildings and equipment | 22.7 | 37.4 | ||
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 | 0 | 0 | 0 | 0 |
Impairments and disposal of assets, net | $ 0.3 | $ 0 | 0.2 | 0 |
Purchases of land, buildings and equipment | $ 1.7 | $ 2.4 |
Segment Information (Reconcilia
Segment Information (Reconciliation of Segment Profit to Earnings from Continuing Operations Before Income Taxes) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 27, 2016 | Nov. 29, 2015 | Nov. 27, 2016 | Nov. 29, 2015 | |
Segment Reporting [Abstract] | ||||
Segment profit | $ 263.9 | $ 266.6 | $ 571.9 | $ 577.3 |
Less general and administrative expenses | (79.5) | (101.9) | (167.2) | (199) |
Less depreciation and amortization | (67.8) | (75.3) | (134.6) | (156.4) |
Less impairments and disposal of assets, net | 0.1 | 7.7 | (7.7) | 6 |
Less interest, net | (9.5) | (57.3) | (19.4) | (79.7) |
Earnings before income taxes | $ 107 | $ 24.4 | $ 258.4 | $ 136.2 |
Impairment and Disposal of As44
Impairment and Disposal of Assets, Net (Schedule of Impairments and Disposal of Assets) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 27, 2016 | Nov. 29, 2015 | Nov. 27, 2016 | Nov. 29, 2015 | |
Asset Impairment Charges [Abstract] | ||||
Restaurant impairments | $ 0 | $ 7.9 | $ 0 | $ 9.2 |
Disposal gains | (1.2) | (0.2) | (9) | (3.2) |
Other | 1.3 | 0 | 1.3 | 0 |
Impairments and disposal of assets, net | $ 0.1 | $ 7.7 | $ (7.7) | $ 6 |
Impairment and Disposal of As45
Impairment and Disposal of Assets, Net (Narrative) (Details) | Nov. 27, 2016USD ($) |
Asset Impairment Charges [Abstract] | |
Cost method investments, carrying value | $ 0 |
Stockholders' Equity (Schedule
Stockholders' Equity (Schedule of Components of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 27, 2016 | Nov. 29, 2015 | Nov. 27, 2016 | Nov. 29, 2015 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 1,952 | $ 2,333.5 | ||
Gain (loss) | $ 5.9 | $ (2) | 2 | 0.8 |
Reclassification realized in net earnings | 0.2 | 22.2 | 1.7 | 20.8 |
Ending balance | 1,853.4 | 1,989.8 | 1,853.4 | 1,989.8 |
Foreign Currency Translation Adjustment | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (1.2) | (0.9) | (1.2) | (1.7) |
Gain (loss) | 0.6 | 0.1 | 0.6 | 0.9 |
Reclassification realized in net earnings | 0 | 0 | 0 | 0 |
Ending balance | (0.6) | (0.8) | (0.6) | (0.8) |
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 | 1.4 | (18.4) | 3.9 | (19.1) |
Gain (loss) | 5.3 | (2.1) | 1.4 | (0.1) |
Reclassification realized in net earnings | 0 | 22.3 | 1.4 | 21 |
Ending balance | 6.7 | 1.8 | 6.7 | 1.8 |
Benefit Plan Funding Position | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (89.7) | (66) | (89.8) | (65.9) |
Gain (loss) | 0 | 0 | 0 | 0 |
Reclassification realized in net earnings | 0.2 | (0.1) | 0.3 | (0.2) |
Ending balance | (89.5) | (66.1) | (89.5) | (66.1) |
Accumulated Other Comprehensive Income (Loss) | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (89.4) | (85.2) | (87) | (86.6) |
Ending balance | $ (83.3) | $ (65) | $ (83.3) | $ (65) |
Stockholders' Equity (Schedul47
Stockholders' Equity (Schedule of Reclassification Adjustments out of Accumulated Other Comprehensive Income) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Nov. 27, 2016 | Nov. 29, 2015 | Nov. 27, 2016 | Nov. 29, 2015 | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Less interest, net | $ (9.5) | $ (57.3) | $ (19.4) | $ (79.7) | |
Earnings before income taxes | 107 | 24.4 | 258.4 | 136.2 | |
Tax benefit (expense) | (27.3) | 5.7 | (67.6) | (25.1) | |
Net earnings | 79.5 | 43.2 | 189.7 | 129.6 | |
Derivatives | Amount Reclassified from AOCI into Net Earnings | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Earnings before income taxes | 0 | (36.1) | (1.4) | (35.3) | |
Tax benefit (expense) | 0 | 13.8 | 0 | 14.3 | |
Net earnings | 0 | (22.3) | (1.4) | (21) | |
Derivatives | Equity contract | Amount Reclassified from AOCI into Net Earnings | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
General and administrative expenses | [1] | 0 | 0 | (1.4) | 2.1 |
Derivatives | Interest rate related | Amount Reclassified from AOCI into Net Earnings | |||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||||
Less interest, net | [2] | 0 | (36.1) | 0 | (37.4) |
Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Parent | Recognized net actuarial loss - pension/postretirement plans | Amount Reclassified from AOCI into Net Earnings | |||||
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss) [Abstract] | |||||
Reclassification adjustment from AOCI pension and other postretirement benefit plans, before tax | [3] | (0.8) | (0.8) | (1.6) | (1.4) |
Accumulated Defined Benefit Plans Adjustment, Net Gain (Loss) Attributable to Parent | Recognized net actuarial gain - other plans | Amount Reclassified from AOCI into Net Earnings | |||||
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss) [Abstract] | |||||
Reclassification adjustment from AOCI pension and other postretirement benefit plans, before tax | [4] | 0.5 | 0.9 | 1.1 | 1.7 |
Benefit plan funding position | Amount Reclassified from AOCI into Net Earnings | |||||
Defined Benefit Plan, Amounts Recognized in Other Comprehensive Income (Loss) [Abstract] | |||||
Reclassification adjustment from AOCI pension and other postretirement benefit plans, before tax | (0.3) | 0.1 | (0.5) | 0.3 | |
Pension and other postretirement benefit plans, tax benefit (expense) | 0.1 | 0 | 0.2 | (0.1) | |
Net earnings | $ (0.2) | $ 0.1 | $ (0.3) | $ 0.2 | |
[1] | Primarily included in restaurant labor costs and general and administrative expenses. See Note 11 for additional details. | ||||
[2] | Included in interest, net, on our consolidated statements of earnings. Reclassifications for the quarter and six months ended November 29, 2015 primarily related to the acceleration of hedge loss amortization resulting from the pay down of 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 9 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 | 6 Months Ended | ||
Nov. 27, 2016 | Nov. 29, 2015 | Nov. 27, 2016 | Nov. 29, 2015 | |
Defined Benefit Plans | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Interest cost | $ 2.6 | $ 2.6 | $ 5.1 | $ 5.3 |
Expected return on plan assets | (4.1) | (3.6) | (8) | (7.2) |
Recognized net actuarial loss | 0.8 | 0.8 | 1.6 | 1.4 |
Net periodic benefit (credit) cost | (0.7) | (0.2) | (1.3) | (0.5) |
Postretirement Benefit Plan | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | 0.1 | 0.1 | 0.1 | 0.1 |
Interest cost | 0.2 | 0.2 | 0.4 | 0.4 |
Amortization of unrecognized prior service credit | (1.2) | (1.2) | (2.4) | (2.4) |
Recognized net actuarial loss | 0.4 | 0.3 | 0.8 | 0.6 |
Net periodic benefit (credit) cost | $ (0.5) | $ (0.6) | $ (1.1) | $ (1.3) |
Stock-Based Compensation (Optio
Stock-Based Compensation (Option Pricing Assumptions) (Details) - Stock Options - $ / shares | 6 Months Ended | ||
Nov. 27, 2016 | Nov. 29, 2015 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average fair value | [1] | $ 9.08 | $ 12.72 |
Dividend yield | 3.50% | 3.30% | |
Expected volatility of stock | 24.30% | 28.00% | |
Risk-free interest rate | 1.40% | 1.90% | |
Expected option life (in years) | 6 years 6 months | 6 years 6 months | |
Weighted-average exercise price per share | [1] | $ 59.70 | $ 64.85 |
[1] | Weighted averages for the three months ended November 29, 2015 were adjusted for the impact of the separation of Four Corners. |
Stock-Based Compensation (Share
Stock-Based Compensation (Share Activity) (Details) - shares shares in Thousands | 6 Months Ended | |
Nov. 27, 2016 | Nov. 29, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Awards exercised/vested | (1,100) | (1,500) |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding beginning of period | 6,320 | |
Awards granted | 580 | |
Awards exercised/vested | (1,120) | |
Awards forfeited | (150) | |
Outstanding end of period | 5,630 | |
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 | 110 | |
Awards granted | 50 | |
Awards exercised/vested | (10) | |
Awards forfeited | (10) | |
Performance unit adjustment | 0 | |
Outstanding end of period | 140 | |
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 | 1,430 | |
Awards granted | 310 | |
Awards exercised/vested | (270) | |
Awards forfeited | (50) | |
Performance unit adjustment | 0 | |
Outstanding end of period | 1,420 | |
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 | 210 | |
Awards granted | 0 | |
Awards exercised/vested | (100) | |
Awards forfeited | (30) | |
Performance unit adjustment | 10 | |
Outstanding end of period | 90 | |
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 | 170 | |
Awards granted | 190 | |
Awards exercised/vested | 0 | |
Awards forfeited | (30) | |
Performance unit adjustment | 0 | |
Outstanding end of period | 330 |
Stock-Based Compensation (Recog
Stock-Based Compensation (Recognized Stock-Based Compensation Expense) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 27, 2016 | Nov. 29, 2015 | Nov. 27, 2016 | Nov. 29, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 11.8 | $ 7.1 | $ 18 | $ 17.3 |
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 1.6 | 2.4 | 3.1 | 4.9 |
Restricted Stock/ Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 0.3 | 0.5 | 0.7 | 0.9 |
Darden Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 6.7 | 2.6 | 9.3 | 6.8 |
Cash-Settled Performance Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 1.3 | 0.2 | 1.3 | 2 |
Equity-Settled Performance Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 1.3 | 0.8 | 2.4 | 1.1 |
Employee stock purchase plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 0.3 | 0.3 | 0.6 | 0.6 |
Director compensation program/other | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 0.3 | $ 0.3 | $ 0.6 | $ 1 |
Derivative Instruments And He52
Derivative Instruments And Hedging Activities (Narrative) (Details) $ in Millions | 6 Months Ended |
Nov. 27, 2016USD ($) | |
Derivative [Line Items] | |
Amount of gain reclassified from AOCI to earnings (effective portion) | $ 0.9 |
Darden Stock Units | Minimum | |
Derivative [Line Items] | |
Vesting period | 4 years |
Darden Stock Units | Maximum | |
Derivative [Line Items] | |
Vesting period | 5 years |
Derivative Instruments And He53
Derivative Instruments And Hedging Activities (Notional and Fair Values Of Derivative Contracts Designated And Not Designated As Hedging Instruments) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 6 Months Ended | ||
Nov. 27, 2016 | May 29, 2016 | ||
Derivatives, Fair Value [Line Items] | |||
Derivative contracts, derivative assets, fair value | $ 1.7 | $ 3.8 | |
Derivative contracts, derivative liabilities, fair value | $ 0 | 0 | |
Designated as Hedging Instruments | Equity forwards | |||
Derivatives, Fair Value [Line Items] | |||
Derivative contracts, number of shares outstanding | 0.4 | ||
Derivative contracts, weighted-average forward rates | $ 58.37 | ||
Derivative contracts, notional | $ 23.6 | ||
Derivative contracts, derivative assets, fair value | [1] | 0.7 | 1.2 |
Derivative contracts, derivative liabilities, fair value | [1] | $ 0 | 0 |
Not Designated as Hedging Instruments | Equity forwards | |||
Derivatives, Fair Value [Line Items] | |||
Derivative contracts, number of shares outstanding | 0.5 | ||
Derivative contracts, weighted-average forward rates | $ 51.34 | ||
Derivative contracts, notional | $ 26.6 | ||
Derivative contracts, derivative assets, fair value | [1] | 1 | 2.6 |
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 He54
Derivative Instruments And Hedging Activities (Effects Of Derivative Instruments In Cash Flow Hedging Relationships) (Details) - Equity forwards - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Nov. 27, 2016 | Nov. 29, 2015 | Nov. 27, 2016 | Nov. 29, 2015 | ||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Gain (loss) recognized in AOCI (effective portion) | $ 5.3 | $ (2.1) | $ 1.4 | $ (0.1) | |
Cost of Sales and Selling General and Administrative Expense | |||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||
Gain (loss) reclassified from AOCI to earnings (effective portion) | 0 | 0 | (1.4) | 2.1 | |
Gain (loss) recognized in earnings (ineffective portion) | [1] | $ 0.1 | $ 0.4 | $ 0.3 | $ 0.5 |
[1] | 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. |
Derivative Instruments And He55
Derivative Instruments And Hedging Activities (Effects Of Derivatives Not Designated As Hedging Instruments) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Nov. 27, 2016 | Nov. 29, 2015 | Nov. 27, 2016 | Nov. 29, 2015 | |
Derivative [Line Items] | ||||
Amount of Gain (Loss) Recognized in Earnings | $ 7.5 | $ (2.3) | $ 4.4 | $ 3.2 |
Equity forwards | Restaurant labor expenses | ||||
Derivative [Line Items] | ||||
Amount of Gain (Loss) Recognized in Earnings | 2.6 | (0.7) | 1.5 | 1 |
Equity forwards | General and administrative expenses | ||||
Derivative [Line Items] | ||||
Amount of Gain (Loss) Recognized in Earnings | $ 4.9 | $ (1.6) | $ 2.9 | $ 2.2 |
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 | Nov. 27, 2016 | May 29, 2016 | |
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Total | $ 7.5 | $ 10.7 | |
Equity forwards | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Derivatives | [1] | 1.7 | 3.8 |
Corporate bonds | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Fixed-income securities | [2] | 1.7 | 2 |
U.S. Treasury securities | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Fixed-income securities | [3] | 3.1 | 3.9 |
Mortgage-backed securities | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Fixed-income securities | [2] | 1 | 1 |
Quoted prices in active market for identical assets (liabilities) (Level 1) | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Total | 3.1 | 3.9 | |
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) | Corporate bonds | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Fixed-income securities | [2] | 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 | [3] | 3.1 | 3.9 |
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 | [2] | 0 | 0 |
Significant other observable inputs (Level 2) | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Total | 4.4 | 6.8 | |
Significant other observable inputs (Level 2) | Equity forwards | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Derivatives | [1] | 1.7 | 3.8 |
Significant other observable inputs (Level 2) | Corporate bonds | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Fixed-income securities | [2] | 1.7 | 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 | [3] | 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 | [2] | 1 | 1 |
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) | Corporate bonds | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Fixed-income securities | [2] | 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 | [3] | 0 | 0 |
Significant unobservable inputs (Level 3) | Mortgage-backed securities | |||
Fair Value Assets and Liabilities Measured On Recurring Basis [Line Items] | |||
Fixed-income securities | [2] | $ 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 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. | ||
[3] | 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) | 12 Months Ended | |
May 29, 2016USD ($)restaurant | Nov. 27, 2016USD ($) | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Carrying value of long-term debt | $ 440,000,000 | $ 440,500,000 |
Fair value of long-term debt | $ 499,500,000 | $ 494,100,000 |
Number of underperforming restaurants | restaurant | 2 | |
Impairment of long-lived assets held-for-use | $ 5,400,000 | |
Impairment of long-lived assets held-for-sale | 600,000 | |
Reported Value Measurement | Fair value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Nonfinancial assets fair value disclosure | 5,400,000 | |
Carrying value of long-lived assets held for sale | 17,500,000 | |
Estimate of Fair Value Measurement | Fair value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Nonfinancial assets fair value disclosure | 0 | |
Carrying value of long-lived assets held for sale | $ 16,900,000 |
Commitments And Contingencies (
Commitments And Contingencies (Details) - USD ($) $ in Millions | Nov. 27, 2016 | May 29, 2016 |
Workers Compensation and General Liabilities Accrued | ||
Loss Contingencies [Line Items] | ||
Standby letters of credit | $ 125.4 | $ 116.5 |
Operating Lease Obligations and Other Payments | ||
Loss Contingencies [Line Items] | ||
Standby letters of credit | 11 | 8.4 |
Property Lease Guarantee | ||
Loss Contingencies [Line Items] | ||
Guarantees associated with leased properties | 159.9 | 154.2 |
Fair value of potential payments discounted at pre-tax cost of capital related to guarantee obligations | $ 134.9 | $ 119.3 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - Dividend Declared | Dec. 14, 2016$ / shares |
Subsequent Event [Line Items] | |
Dividend declared date | Dec. 14, 2016 |
Cash dividend declared, per share | $ 0.56 |
Dividend payable date | Feb. 1, 2017 |
Dividends payable date of record | Jan. 10, 2017 |