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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 10-Q

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(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended August 26, 2001

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from .............. to ..............

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1-13666
Commission File Number

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

Florida 59-3305930
(State or other jurisdiction (I.R.S. Employer Identification No.)
of corporation or oganization)

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

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

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

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APPLICABLE ONLY TO CORPORATE ISSUERS:

Number of shares of Common Stock, no par value, outstanding as of
October 1, 2001: 116,548,161 (excluding 53,996,881 shares held in the Company's
treasury).

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DARDEN RESTAURANTS, INC.

TABLE OF CONTENTS

Page

Part I - Financial Information

Item 1. Financial Statements

Consolidated Statements of Earnings 3

Consolidated Balance Sheets 4

Consolidated Statements of Changes in
Stockholders' Equity 5

Consolidated Statements of Cash Flows 6

Notes to Consolidated Financial Statements 7

Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9

Item 3. Quantitative and Qualitative Disclosures About
Market Risk 11

Part II - Other Information

Item 1. Legal Proceedings 12

Item 5. Other information 12

Item 6. Exhibits and Reports on Form 8-K 12

Signatures 13

Index to Exhibits 14

PART I
FINANCIAL INFORMATION

Item 1. Financial Statements

DARDEN RESTAURANTS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In Thousands, Except per Share Data)
(Unaudited)

Thirteen Weeks Ended
-------------------------------------------------------------------------------------------------------------------
August 26, 2001 August 27, 2000
-------------------------------------------------------------------------------------------------------------------

Sales........................................................ $ 1,081,489 $ 1,018,205
Costs and Expenses:
Cost of sales:
Food and beverage....................................... 343,592 331,037
Restaurant labor........................................ 333,446 318,631
Restaurant expenses..................................... 154,150 139,444
----------- -----------
Total Cost of Sales................................... $ 831,188 $ 789,112
Selling, general and administrative....................... 106,940 99,345
Depreciation and amortization............................. 39,510 35,636
Interest, net............................................. 8,274 6,274
----------- -----------
Total Costs and Expenses............................ $ 985,912 $ 930,367
----------- -----------

Earnings before Income Taxes................................. 95,577 87,838
Income Taxes................................................. (33,421) (30,917)
----------- -----------

Net Earnings................................................. $ 62,156 $ 56,921
=========== ===========

Net Earnings per Share:
Basic..................................................... $ 0.53 $ 0.47
=========== ===========
Diluted................................................... $ 0.51 $ 0.46
=========== ===========

Average Number of Common Shares Outstanding:
Basic..................................................... 117,400 121,600
=========== ===========
Diluted................................................... 122,500 124,400
=========== ===========

--------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.

DARDEN RESTAURANTS, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands)

(Unaudited)
--------------------------------------------------------------------------------------------------------------------
August 26, 2001 May 27, 2001
--------------------------------------------------------------------------------------------------------------------

ASSETS
Current Assets:
Cash and cash equivalents................................. $ 35,780 $ 61,814
Receivables............................................... 24,075 32,870
Inventories............................................... 171,672 148,429
Net assets held for disposal.............................. 12,978 10,087
Prepaid expenses and other current assets................. 18,131 26,942
Deferred income taxes..................................... 48,483 48,000
------------- -------------
Total Current Assets.................................... $ 311,119 $ 328,142
Land, Buildings and Equipment................................ 1,796,138 1,779,515
Other Assets................................................. 147,681 110,801
------------- -------------

Total Assets.......................................... $ 2,254,938 $ 2,218,458
============= =============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable.......................................... $ 171,026 $ 156,859
Short-term debt........................................... 12,000
Current portion of long-term debt......................... 2,640 2,647
Accrued payroll........................................... 64,518 82,588
Accrued income taxes...................................... 71,119 47,698
Other accrued taxes....................................... 30,052 27,429
Other current liabilities................................. 218,437 225,037
------------- -------------
Total Current Liabilities............................... $ 557,792 $ 554,258
Long-term Debt............................................... 515,957 517,927
Deferred Income Taxes........................................ 92,378 90,782
Other Liabilities............................................ 19,978 20,249
------------- -------------
Total Liabilities..................................... $ 1,186,105 $ 1,183,216
------------- -------------

Stockholders' Equity:
Common stock and surplus.................................. $ 1,428,946 $ 1,405,799
Retained earnings......................................... 594,277 532,121
Treasury stock............................................ (890,396) (840,254)
Accumulated other comprehensive income.................... (13,022) (13,102)
Unearned compensation..................................... (50,972) (49,322)
------------- --------------
Total Stockholders' Equity............................ $ 1,068,833 $ 1,035,242
------------- --------------

Total Liabilities and Stockholders' Equity.......... $ 2,254,938 $ 2,218,458
============ ==============

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See accompanying notes to consolidated financial statements.

DARDEN RESTAURANTS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY For the
Thirteen Weeks Ended August 26, 2001 and August 27, 2000
(In Thousands)
(Unaudited)

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Common Accumulated
Stock Other Total
and Retained Treasury Comprehensive Unearned Stockholders'
Surplus Earnings Stock Income Compensation Equity
----------------------------------------------------------------------------------------------------------------------------

Balance at May 27, 2001.................... $ 1,405,799 $532,121 $(840,254) $(13,102) $(49,322) $1,035,242
Comprehensive income:
Net earnings........................... 62,156 62,156
Other comprehensive income:
Foreign currency adjustment....... 102 102
Change in fair value of derivatives (22) (22)
----------
Total comprehensive income.......... 62,236
Stock option exercises (962 shares)........ 11,262 11,262

Issuance of restricted stock (188 shares),
net of forfeiture adjustments............. 4,144 658 (4,742) 60
Earned compensation........................ 1,067 1,067
ESOP note receivable repayments............ 2,025 2,025
Income tax benefit credited to equity...... 7,231 7,231
Purchases of common stock for treasury
(1,815 shares).......................... (51,196) (51,196)
Issuance of treasury stock under Employee
Stock Purchase Plan (45 shares) .......... 510 396 906
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Balance at August 26, 2001.................$1,428,946 $594,277 $(890,396) $(13,022) $(50,972) $1,068,833
----------------------------------------------------------------------------------------------------------------------------

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Balance at May 28, 2000.................... $1,351,707 $344,579 $(666,837) $(12,457) $(56,522) $960,470
Comprehensive income:
Net earnings............................ 56,921 56,921
Other comprehensive income,
foreign currency adjustment............. 238 238
------------
Total comprehensive income.......... 57,159
Stock option exercises (495 shares)........ 5,143 5,143
Issuance of restricted stock (330 shares),
net of forfeiture adjustments............. 3,430 1,027 (4,493) (36)
Earned compensation........................ 1,006 1,006
ESOP note receivable repayments............ 2,950 2,950
Income tax benefit credited to equity...... 2,116 2,116
Purchases of common stock for treasury
(3,355 shares).......................... (57,422) (57,422)
Issuance of treasury stock under Employee
Stock Purchase Plan (60 shares)........... 298 524 822
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Balance at August 27, 2000................. $1,362,694 $401,500 $ (722,708) $(12,219) $(57,059) $972,208
----------------------------------------------------------------------------------------------------------------------------

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See accompanying notes to consolidated financial statements.
5

DARDEN RESTAURANTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)

Thirteen Weeks Ended
--------------------------------------------------------------------------------------------------------------------
August 26, 2001 August 27, 2000
--------------------------------------------------------------------------------------------------------------------

Cash Flows--Operating Activities
Net earnings.................................................... $ 62,156 $ 56,921
Adjustments to reconcile net earnings to cash flow:
Depreciation and amortization................................. 39,510 35,636
Amortization of unearned compensation and loan costs.......... 1,894 1,631
Change in current assets and liabilities...................... 9,904 5,249
Change in other liabilities .................................. (271) (81)
Loss on disposal of land, buildings and equipment............. 1,233 539
Deferred income taxes......................................... 1,113 (1,257)
Income tax benefit credited to equity......................... 7,231 2,116
Other, net.................................................... 193 (87)
------------ ----------
Net Cash Provided by Operating Activities................... $ 122,963 $ 100,667
--------- ----------

Cash Flows--Investing Activities
Purchases of land, buildings and equipment...................... (60,186) (82,221)
Increase in other assets........................................ (6,591) (2,432)
Purchase of trust owned life insurance.......................... (31,500)
Proceeds from disposal of land, buildings and equipment
(including net assets held for disposal)...................... 369 4,575
------------- ----------
Net Cash Used by Investing Activities....................... $ (97,908) $ (80,078)
-------------- ----------

Cash Flows--Financing Activities
Proceeds from issuance of common stock.......................... 12,168 5,965
Purchases of treasury stock..................................... (51,196) (57,422)
ESOP note receivable repayment.................................. 2,025 2,950
(Decrease) Increase in short-term debt.......................... (12,000) 37,300
Repayment of long-term debt..................................... (2,032) (2,956)
Payment of loan costs........................................... (54) (147)
------------- ----------
Net Cash Used by Financing Activities....................... $ (51,089) $ (14,310)
---------- ----------

(Decrease) Increase in Cash and Cash Equivalents................... (26,034) 6,279
Cash and Cash Equivalents - Beginning of Period.................... 61,814 26,102
----------- ----------

Cash and Cash Equivalents - End of Period.......................... $ 35,780 $ 32,381
========== ==========

Cash Flow from Changes in Current Assets and Liabilities
Receivables..................................................... 8,795 554
Inventories..................................................... (23,243) (33,879)
Prepaid expenses and other current assets....................... 459 182
Accounts payable................................................ 14,167 24,414
Accrued payroll................................................. (18,070) (12,398)
Accrued income taxes............................................ 23,421 29,926
Other accrued taxes............................................. 2,623 2,755
Other current liabilities....................................... 1,752 (6,305)
------------ ----------
Change in Current Assets and Liabilities...................... $ 9,904 $ 5,249
=========== ==========

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See accompanying notes to consolidated financial statements.
6

DARDEN RESTAURANTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollar Amounts in Thousands, Except per Share Data)

Note 1. Background

Darden Restaurants, Inc. (the "Company") owns and operates casual dining
restaurants under the trade names Red Lobster(R), Olive Garden(R), Bahama
Breeze(R) and Smokey Bones(R) BBQ Sports Bar. These consolidated financial
statements have been prepared by the Company pursuant to the rules and
regulations of the Securities and Exchange Commission (the "SEC"). They do not
include certain information and footnotes required by generally accepted
accounting principles for complete financial statements. However, in the opinion
of management, all adjustments considered necessary for a fair presentation have
been included and are of a normal recurring nature. Operating results for the
thirteen weeks ended August 26, 2001 are not necessarily indicative of the
results that may be expected for the fiscal year ending May 26, 2002.

These statements should be read in conjunction with the consolidated
financial statements and footnotes included in our annual report on Form 10-K
for the year ended May 27, 2001 ("Form 10-K"). The accounting policies used in
preparing these consolidated financial statements are the same as those
described in our Form 10-K. Certain reclassifications have been made to prior
period amounts to conform with current period presentation.

Note 2. Consolidated Statements of Cash Flows

During the thirteen weeks ended August 26, 2001 (hereafter sometimes also
referred to as "the quarter"), the Company paid $7,496 for interest (net of
amounts capitalized) and $1,620 for income taxes. During the thirteen weeks
ended August 27, 2000, the Company paid $9,657 for interest (net of amounts
capitalized) and $851 for income taxes.

Note 3. Net Earnings Per Share

Outstanding stock options issued by the Company represent the only dilutive
effect reflected in diluted weighted average shares outstanding. Options to
purchase 68,822 and 3,858,748 shares of common stock were excluded from the
calculation of diluted earnings per share for the thirteen weeks ended August
26, 2001 and August 27, 2000, respectively, because their exercise prices
exceeded the average market price of common shares for the period.

Note 4. Derivatives

In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) 133, "Accounting for
Derivative Instruments and Hedging Activities". SFAS 133 requires that all
derivative instruments be recorded on the balance sheet at fair value. Gains or
losses resulting from changes in the fair values of those derivatives are
recorded each period in current earnings or other comprehensive income,
depending on whether a derivative is designated as part of a hedge transaction
and the type of hedge transaction. The ineffective portion of all hedges is
recognized in earnings. In June 2000, the FASB issued SFAS 138, "Accounting for
Certain Derivative Instruments and Certain Hedging Activities - an Amendment of
FASB Statement No. 133". SFAS 138, which amended the accounting and reporting
standards of SFAS 133 for certain derivative instruments and hedging activities,
was required to be adopted concurrently with SFAS 133. The Company adopted SFAS
133 and SFAS 138 in the first quarter of fiscal 2002. There were no transition
adjustments that were required to be recognized as a result of the adoption of
these new standards, and therefore adoption of these standards did not
materially impact the Company's consolidated financial position, results of
operations or cash flows.

During the quarter, the Company entered into futures contracts to reduce
the risk of natural gas price fluctuations. To the extent these derivatives are
effective in offsetting the variability of the hedged cash flows, changes in the
derivatives' fair value are not included in current earnings but are reported as
other comprehensive income, a component of stockholders' equity. These changes
in fair value will be included in earnings of future periods when the natural
gas is purchased and used by the Company in its operations. It is expected that
$22 of net losses related to these contracts, recognized in accumulated other
comprehensive income as of August 26, 2001, will be reclassified into restaurant
expenses during the fiscal year ending May 26, 2002. To the extent these
derivatives are not effective, changes in their fair value are immediately
recognized in current earnings. No gains or losses were recognized in earnings
during the thirteen weeks ended August 26, 2001.

As of August 26, 2001, the maximum length of time over which the Company is
hedging its exposure to the variability in future natural gas cash flows is nine
months. No gains or losses were reclassified into earnings as a result of the
discontinuance of natural gas cash flow hedges because it was probable that the
original forecasted transactions would not occur.

Note 5. Trust Owned Life Insurance

In August 2001, the Company caused a trust, that it previously had
established, to purchase life insurance policies covering certain Company
officers and other key employees ("Trust Owned Life Insurance" or "TOLI"). The
trust is the owner and sole beneficiary of the TOLI policies. The policies were
purchased to offset some of the costs of the participant earnings component of
the Company's existing nonqualified deferred compensation plan.

The cash surrender value of the policies, which is included in other assets
in the accompanying consolidated balance sheets, amounted to $31,500 at August
26, 2001. Changes in cash surrender value are included in selling, general and
administrative expenses in the accompanying consolidated statements of earnings.

Note 6. Restructuring Liability

In 1997, the Company recorded restructuring charges of $70,900 in
connection with the closing of certain restaurant properties. The related
liabilities are included in other current liabilities in the accompanying
consolidated balance sheets and were established to accrue for estimated
carrying costs of buildings and equipment prior to disposal, employee severance
costs, lease buy-out provisions and other costs associated with the
restructuring action. All restaurant closings under this restructuring action
have been completed. The remaining restructuring actions, including disposal of
the closed owned properties and the lease buy-outs related to the closed leased
properties, are expected to be substantially completed during the current fiscal
year.

A summary of restructuring liability activity for the thirteen weeks ended
August 26, 2001 is as follows:

Balance at May 27, 2001................................................ $ 5,798
Cash Payments:
Carrying costs and employee severance payments.................... (194)
Lease payments including lease buy-outs........................... (183)
-------
Balance at August 26, 2001............................................. $ 5,421

Note 7. Treasury Stock

Pursuant to the Company's 64.6 million share stock repurchase program and
in accordance with applicable securities regulations, the Company repurchased
1,815,404 shares of its common stock for $51,196 in the first quarter of fiscal
2002, resulting in a cumulative repurchase as of August 26, 2001 of a total of
54,332,771 shares. The Company's stock repurchase plan is used by the Company to
offset the dilutive effect of stock option exercises and to increase shareholder
value. The repurchased common stock is reflected as a reduction of stockholders'
equity.

Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations

The following table sets forth selected restaurant operating data as a
percentage of sales for the periods indicated. All information is derived from
the consolidated statements of earnings for the thirteen weeks ended August 26,
2001 and August 27, 2000.

Sales........................................................ 100.0% 100.0%
Costs and Expenses:
Cost of sales:
Food and beverage....................................... 31.8 32.5
Restaurant labor........................................ 30.8 31.3
Restaurant expenses..................................... 14.3 13.7
------ ------
Total Cost of Sales................................... 76.9% 77.5%
Selling, general and administrative....................... 9.9 9.8
Depreciation and amortization............................. 3.6 3.5
Interest, net............................................. 0.8 0.6
------- ------
Total Costs and Expenses............................ 91.2% 91.4%
------

Earnings before Income Taxes................................. 8.8 8.6
Income Taxes................................................. (3.1) (3.0)
------- ------

Net Earnings................................................. 5.7% 5.6%
======= ======

--------------------------------------------------------------------------------
Results of Operations

For the fiscal 2002 first quarter ended August 26, 2001, earnings after tax
were $62.2 million or 51 cents per diluted share, compared to earnings after tax
of $56.9 million or 46 cents per diluted share in the first quarter of last
year. The increase in first quarter earnings was primarily attributable to
strong same-restaurant sales at both Red Lobster and Olive Garden. Sales of
$1.08 billion for the first quarter were 6.2% higher than last year's first
quarter. The increase in sales was primarily attributable to a net increase of
35 restaurants since August 27, 2000, and an increase in same-restaurant sales.

Food and beverage costs for the first quarter were 31.8% of sales, compared
to 32.5% of sales last year primarily attributable to lower product costs.
Restaurant labor costs decreased to 30.8% of sales compared to last year's 31.3%
of sales primarily due to efficiencies resulting from higher sales volumes.
Restaurant expenses increased to 14.3% of sales compared to 13.7% last year
primarily due to increased utility and new restaurant preopening expenses,
partially offset by the impact of higher sales volumes. Selling, general and
administrative expenses amounted to 9.9% of sales which was comparable to last
year's 9.8% of sales. Depreciation and amortization as a percentage of sales
increased from 3.5% to 3.6% primarily as a result of new restaurant and remodel
activity, partially offset by the favorable impact of higher sales volumes.
Interest expense increased to 0.8% of sales compared to 0.6% last year primarily
due to higher debt levels.

The effective tax rate for the first quarter of fiscal 2002 was 35.0%
compared to 35.2% in last year's first quarter. The decrease in the effective
tax rate resulted primarily from increases in annual expected tax credits and
tax exempt income, partially offset by a higher level of expected pre-tax income
for 2002 and a reduction in certain tax deductible costs.

Division Results

Red Lobster sales of $578.3 million were 3.9% above last year's first
quarter. Same-restaurant sales in the United States increased 3.2% for the
quarter, marking the fifteenth consecutive quarter of same-restaurant sales
increases. First quarter operating profits improved over the prior year
primarily as a result of the increased sales and lower food and beverage costs
as a percentage of sales.

Olive Garden sales of $462.2 million were 6.0% above last year's first
quarter. Same-restaurant sales in the United States increased 4.2%, representing
the twenty-eighth consecutive quarter of same-restaurant sales increases. First
quarter operating profits improved over the prior year primarily due to
increased sales and lower restaurant labor and selling, general and
administrative expenses as a percentage of sales, partially offset by higher
restaurant expenses as a percentage of sales.

Bahama Breeze continued to produce strong sales during the quarter. Two new
openings occurred in the first quarter, bringing the total number of restaurants
in operation to 23. One additional restaurant opened since the end of the first
quarter and at least five more openings are scheduled for this fiscal year.

Restaurant sales at Smokey Bones continue to exceed management's initial
expectations. One new opening occurred in the first quarter bringing the total
number of restaurants in operation to ten. Five additional restaurants under
construction are planned to open in fiscal 2002.

The table below details the number of restaurants open at the end of the
first quarter of fiscal 2002, compared with the number open at the end of May
2001 and the end of last fiscal year's first quarter.

NUMBER OF RESTAURANTS

--------------------------------------------------------------------------------------------------------------------
August 26, 2001 May 27, 2001 August 27, 2000
--------------------------------------------------------------------------------------------------------------------

Red Lobster - USA.................. 628 629 621
Red Lobster - Canada............... 32 32 32
-------- ------ ------
Total......................... 660 661 653

Olive Garden - USA................. 475 472 464
Olive Garden - Canada.............. 5 5 5
-------- ------ ------
Total......................... 480 477 469

Bahama Breeze...................... 23 21 14

Smokey Bones ...................... 10 9 2
-------- ------ ------

Total......................... 1,173 1,168 1,138
======== ====== ======

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Seasonality

The Company's sales volumes fluctuate seasonally. In fiscal years 2000 and
2001, the Company's sales were highest in the spring, lowest in the fall, and
comparable during winter and summer. Severe weather, storms and similar
conditions may impact sales volumes seasonally in some operating regions.
Because of the seasonality of the Company's business, results for any quarter
are not necessarily indicative of the results that may be achieved for the full
fiscal year.

Financial Condition, Liquidity and Capital Resources

Inventories totaled $171.7 million as of August 26, 2001, up from $148.4
million at May 27, 2001. The increase resulted from typical first quarter
increases in seafood inventory levels due to availability. The additional
seafood is expected to be used during the current fiscal year. Accounts payable
of $171.0 million at August 26, 2001, increased from $156.9 million at May 27,
2001, principally as a result of the increased level of inventories.

Other assets totaled $147.7 million as of August 26, 2001, up from $110.8
million at May 27, 2001. The increase resulted primarily from the Company's
purchase of Trust Owned Life Insurance during the first quarter with an initial
cash surrender value totaling $31.5 million. The Trust Owned Life Insurance was
purchased to offset some of the costs of the Company's nonqualified deferred
compensation plan. Cash and cash equivalents of $35.8 million at August 26,
2001, decreased from $61.8 million at May 27, 2001, primarily as a result of the
purchase of this insurance.

Accrued income taxes of $71.1 million at August 26, 2001, increased from
$47.7 million at May 27, 2001, principally due to the timing of income tax
payments.

The Company's long-term debt consists principally of (i) $150.0 million of
unsecured 6.375 percent notes due in February 2006, (ii) $100.0 million of
unsecured 7.125 percent debentures due in February 2016, (iii) $150.0 million of
unsecured 8.375 percent senior notes due in September 2005, (iv) $75.0 million
of unsecured 7.45 percent medium-term notes due in April 2011, and (v) a $42.4
million commercial bank loan that is used to support two loans from the Company
to the Employee Stock Ownership Plan portion of the Darden Savings Plan. The
Company also has a commercial paper program that serves as its primary source of
short-term financing. As of August 26, 2001, there were no borrowings
outstanding under the program. To support the program, the Company has a credit
facility with a consortium of banks under which the Company can borrow up to
$300.0 million. As of August 26, 2001, no amounts were outstanding under the
credit facility.

Capital expenditures were $60.2 million for the first quarter of fiscal
2002 compared to $82.2 million in last year's first quarter. The decrease
principally relates to timing as the Company estimates that its fiscal 2002
capital expenditures will be slightly more than that of fiscal 2001. The Company
repurchased 1,815,404 shares of its common stock for $51.2 million in the first
quarter of fiscal 2002 compared to 3,354,988 shares for $57.4 million in last
year's first quarter.

Forward-Looking Statements

Certain information included in this report and other materials filed or to
be filed by the Company with the SEC (as well as information included in oral
statements or written statements made or to be made by the Company) may contain
statements that are forward-looking within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. Words or phrases such as "believe," "plan," "will",
"expect," "intend," "estimate," and "project," and similar expressions are
intended to identify forward-looking statements. All of these statements, and
any other statements in this report that are not historical facts, are
forward-looking. Examples of forward-looking statements include, but are not
limited to, statements regarding the number of new Bahama Breeze and Smokey
Bones restaurants expected to be opened during fiscal 2002, the completion of
certain restructuring actions during the current fiscal year, and the Company's
plans to participate in the "Dine Out for America" project. These
forward-looking statements are based on assumptions concerning important risks
and uncertainties that could significantly affect anticipated results in the
future and, accordingly, could cause the actual results to materially differ
from those expressed in the forward-looking statements. These risks and
uncertainties include, but are not limited to, competition, economic and market
conditions, changes in food and other costs, importance of locations, effects of
government regulations and the Company's ability to achieve its growth
objectives, each of which is more specifically discussed in Exhibit 99 filed
with the Company's Form 10-K, which is incorporated into this report by
reference.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to a variety of market risks, including fluctuations
in interest rates, foreign currency exchange rates, and commodity prices. To
manage this exposure, the Company periodically enters into interest rate,
foreign currency exchange, and commodity instruments for other than trading
purposes.

The Company uses the variance/covariance method to measure value at risk,
over time horizons ranging from one week to one year, at the 95 percent
confidence level. As of August 26, 2001, the Company's potential losses in
future net earnings resulting from changes in foreign currency exchange rates,
commodity prices, and floating rate debt interest rate exposures were
approximately $1 million over a period of one year (including the impact of the
natural gas hedges discussed above in Note 4 to the Financial Statements). At
August 26, 2001, the value at risk from an increase in the fair value of all of
the Company's long-term fixed-rate debt, over a period of one year, was
approximately $36 million. The fair value of the Company's long-term fixed-rate
debt during the first quarter of fiscal 2002 averaged approximately $478
million, with a high of approximately $489 million and a low of approximately
$470 million. The Company's interest rate risk management objective is to limit
the impact of interest rate changes on earnings and cash flows by targeting an
appropriate mix of variable and fixed rate debt.

PART II
OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, the Company is made a party to legal proceedings arising
in the ordinary course of business. The Company does not believe that the
results of these legal proceedings, even if unfavorable to the Company, will
have a materially adverse impact on its financial position, results of
operations or cash flows.

Item 5. Other Information.

The Company is planning that, on October 11, 2001, all Company restaurants
will mark the one-month anniversary of the terrorist attacks on the United
States by donating 100% of their profits for the day to the American Red Cross
Disaster Relief Fund as part of the national "Dine Out for America" project.
Every meal purchased in Company restaurants that day will benefit relief efforts
and the victims and their families affected by the tragic events on September
11, 2001.

Item 6. Exhibits and Reports on Form 8-K.

(a) Exhibits.

Exhibit 10(a) Darden Restaurants, Inc. FlexComp Plan,
as amended and restated.

Exhibit 10(b) Darden Restaurants, Inc. Compensation
Plan for Non-Employee Directors, as
amended.

Exhibit 10(c) Darden Restaurants, Inc. Stock Plan for
Directors, as amended.

Exhibit 12 Computation of Ratio of Consolidated
Earnings to Fixed Charges.

(b) Reports on Form 8-K.

(i) On June 22, 2001, the Company filed a current report on
Form 8-K announcing annual and fourth quarter financial
results for fiscal 2001 as well as national expansion
of Smokey Bones.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

DARDEN RESTAURANTS, INC.

Dated: October 10, 2001 By: /s/ Paula J. Shives
------------------------------------
Paula J. Shives
Senior Vice President,
General Counsel and Secretary

Dated: October 10, 2001 By: /s/ Clarence Otis, Jr.
------------------------------------
Clarence Otis, Jr.
Senior Vice President,
Chief Financial Officer
(Principal financial and
accounting officer)

INDEX TO EXHIBITS

Exhibit
Number Exhibit Title

10(a) Darden Restaurants, Inc. FlexComp Plan, as amended and
restated.

10(b) Darden Restaurants, Inc. Compensation Plan for Non-Employee
Directors, as amended.

10(c) Darden Restaurants, Inc. Stock Plan for Directors, as
amended.

12 Computation of Ratio of Consolidated Earnings to Fixed Charges