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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

----------------------
FORM 10-Q
----------------------

(MarkOne)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the quarterly period ended February 28, 1999

[ ] 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
----------------------

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

Florida 59-3305930
(State or other juris- (I.R.S. Employer Identification No.)
diction of incorporation
or organization)

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

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

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

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
----- -----

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

APPLICABLE ONLY TO CORPORATE ISSUERS:

Number of shares of common stock outstanding as of March 23, 1999:
133,823,015 (excluding 30,614,489 shares held in 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 5

Consolidated Statements of Changes in
Stockholders' Equity 6

Consolidated Statements of Cash Flows 7

Notes to Consolidated Financial Statements 9

Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11

Part II - Other Information

Item 6. Exhibits and Reports on Form 8-K 15

Signatures 16

Index to Exhibits 17

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
- --------------------------------------------------------------------------------------------------------------------
February 28, 1999 February 22, 1998
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Sales........................................................ $ 866,907 $ 811,261
Costs and Expenses:
Cost of sales:
Food and beverages....................................... 284,272 269,164
Restaurant labor......................................... 280,458 263,382
Restaurant expenses...................................... 119,667 113,065
---------- ----------
Total Cost of Sales.................................... $ 684,397 $ 645,611
Selling, general and administrative........................ 88,156 83,269
Depreciation and amortization.............................. 31,415 32,074
Interest, net.............................................. 4,422 5,079
---------- ----------
Total Costs and Expenses............................. $ 808,390 $ 766,033
---------- ----------

Earnings before Income Taxes................................. 58,517 45,228
Income Taxes................................................. (20,164) (15,470)
---------- ----------

Net Earnings................................................. $ 38,353 $ 29,758
========== ==========

Net Earnings per Share:
Basic ..................................................... $ 0.28 $ 0.20
========== ==========
Diluted.................................................... $ 0.27 $ 0.20
========== ==========

Average Number of Common Shares Outstanding:
Basic ..................................................... 137,100 148,100
========== ==========
Diluted.................................................... 141,200 151,300
========== ==========

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See accompanying notes to consolidated financial statements.

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

Thirty-Nine Weeks Ended
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February 28, 1999 February 22, 1998
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Sales .................................................... $ 2,544,132 $ 2,365,855
Costs and Expenses:
Cost of sales:
Food and beverages....................................... 838,303 776,973
Restaurant labor......................................... 828,762 775,328
Restaurant expenses...................................... 372,342 353,750
----------- -----------
Total Cost of Sales.................................... $ 2,039,407 $ 1,906,051
Selling, general and administrative........................ 259,299 256,886
Depreciation and amortization.............................. 93,738 95,159
Interest, net.............................................. 14,643 14,495
----------- -----------
Total Costs and Expenses............................. $ 2,407,087 $ 2,272,591
----------- -----------

Earnings before Income Taxes................................. 137,045 93,264
Income Taxes................................................. (47,594) (31,568)
----------- -----------

Net Earnings................................................. $ 89,451 $ 61,696
=========== ===========

Net Earnings per Share:
Basic ..................................................... $ 0.65 $ 0.41
=========== ===========
Diluted.................................................... $ 0.63 $ 0.41
=========== ===========

Average Number of Common Shares Outstanding:
Basic ..................................................... 138,500 150,300
=========== ===========
Diluted.................................................... 142,300 152,200
=========== ===========

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See accompanying notes to consolidated financial statements.

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

(Unaudited)
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February 28, 1999 May 31, 1998
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ASSETS
Current Assets:
Cash and cash equivalents.................................. $ 40,306 $ 33,505
Receivables................................................ 27,608 27,312
Inventories................................................ 150,884 182,399
Net assets held for disposal............................... 38,585 49,230
Prepaid expenses and other current assets.................. 11,080 20,498
Deferred income taxes...................................... 73,749 84,597
----------- -----------
Total Current Assets..................................... $ 342,212 $ 397,541
Land, Buildings and Equipment................................ 1,468,144 1,490,348
Other Assets................................................. 97,942 96,853
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Total Assets......................................... $ 1,908,298 $ 1,984,742
=========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable........................................... $ 137,899 $ 132,938
Short-term debt............................................ 15,000 75,100
Current portion of long-term debt.......................... 5 5
Accrued payroll............................................ 70,356 73,240
Accrued incomes taxes...................................... 743 1,067
Other accrued taxes........................................ 22,643 24,172
Other current liabilities.................................. 267,826 252,142
----------- -----------
Total Current Liabilities................................ $ 514,472 $ 558,664
Long-term Debt............................................... 309,713 310,603
Deferred Income Taxes........................................ 80,535 77,054
Other Liabilities............................................ 19,161 18,576
----------- -----------
Total Liabilities...................................... $ 923,881 $ 964,897
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Stockholders' Equity:
Common stock and surplus................................... $ 1,323,009 $ 1,286,191
Retained earnings.......................................... 132,247 48,327
Treasury stock............................................. (393,559) (239,876)
Accumulated other comprehensive income..................... (12,592) (11,749)
Unearned compensation...................................... (64,688) (63,048)
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Total Stockholders' Equity............................. $ 984,417 $ 1,019,845
----------- -----------

Total Liabilities and Stockholders' Equity........... $ 1,908,298 $ 1,984,742
=========== ===========

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See accompanying notes to consolidated financial statements.

DARDEN RESTAURANTS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
For the Thirty-Nine Weeks Ended February 28, 1999 and February 22, 1998
(In Thousands)
(Unaudited)

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Common Accumulated
Stock Other Total
and Retained Treasury Comprehensive Unearned Stockholders'
Surplus Earnings Stock Income Compensation Equity
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Balance at May 31, 1998.................... $1,286,191 $ 48,327 $(239,876) $(11,749) $(63,048) $1,019,845
Comprehensive income:
Net earnings............................. 89,451 89,451
Other comprehensive income, foreign
currency adjustment.................... (843) (843)
----------
Total comprehensive income........... 88,608
Cash dividends declared.................... (5,531) (5,531)
Stock option exercises (2,520 shares)...... 22,321 22,321
Issuance of restricted stock (333 shares),
net of forfeiture adjustments............ 4,104 (4,076) 28
Earned compensation........................ 1,461 1,461
ESOP note receivable repayments............ 975 975
Income tax benefit credited to equity...... 8,209 8,209
Proceeds from issuance of equity put
options.................................. 2,184 2,184
Purchases of common stock for treasury
(8,738 shares)........................... (153,683) (153,683)
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Balance at February 28, 1999............... $1,323,009 $132,247 $(393,559) $(12,592) $(64,688) $ 984,417
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Common Retained Accumulated
Stock Earnings Other Total
and (Accumulated Treasury Comprehensive Unearned Stockholders'
Surplus Deficit) Stock Income Compensation Equity
- ----------------------------------------------------------------------------------------------------------------------------

Balance at May 25, 1997.................... $1,268,656 $(41,706) $ (69,184) $(10,037) $(66,516) $1,081,213
Comprehensive income:
Net earnings............................. 61,696 61,696
Other comprehensive income, foreign
currency adjustment.................... (1,092) (1,092)
----------
Total comprehensive income........... 60,604
Cash dividends declared.................... (6,005) (6,005)
Stock option exercises (762 shares)........ 5,490 5,490
Issuance of restricted stock (234 shares),
net of forfeiture adjustments............ 1,304 (1,324) (20)
Earned compensation........................ 752 752
ESOP note receivable repayments............ 2,400 2,400
Income tax benefit credited to equity...... 1,156 1,156
Proceeds from issuance of equity put
options.................................. 1,027 1,027
Purchases of common stock for treasury
(7,671 shares) ......................... (86,918) (86,918)
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Balance at February 22, 1998............... $1,277,633 $ 13,985 $(156,102) $(11,129) $(64,688) $1,059,699
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See accompanying notes to consolidated financial statements.

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

Cash Flows--Operating Activities
Net earnings..................................................... $ 38,353 $ 29,758
Adjustments to reconcile net earnings to cash flow:
Depreciation and amortization.................................. 31,415 32,074
Amortization of unearned compensation and loan costs........... 1,155 882
Change in current assets and liabilities....................... 28,499 34,770
Change in other liabilities ................................... 22 117
Loss on disposal of land, buildings and equipment.............. 381 149
Deferred income taxes.......................................... 1,850 766
Other, net..................................................... 496 232
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Net Cash Provided by Operating Activities.................... $ 102,171 $ 98,748
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Cash Flows--Investment Activities
Purchases of land, buildings and equipment....................... (28,938) (31,068)
Purchases of intangibles......................................... (568) (393)
(Increase) decrease in other assets.............................. (1,405) 22
Proceeds from disposal of land, buildings and equipment
(including net assets held for disposal)....................... 7,799 11,067
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Net Cash Used by Investment Activities....................... $ (23,112) $ (20,372)
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Cash Flows--Financing Activities
Proceeds from issuance of common stock........................... 7,621 2,994
Income tax benefit credited to equity............................ 3,051 577
Purchases of treasury stock...................................... (66,988) (40,253)
ESOP note receivable repayment................................... 725 600
Increase (decrease) in short-term debt........................... 4,500 (28,800)
Repayment of long-term debt...................................... (726) (600)
Proceeds from issuance of equity put options..................... 716
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Net Cash Used by Financing Activities........................ $ (51,817) $ (64,766)
---------- ----------

Increase in Cash and Cash Equivalents.............................. 27,242 13,610
Cash and Cash Equivalents - Beginning of Period.................... 13,064 22,069
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Cash and Cash Equivalents - End of Period.......................... $ 40,306 $ 35,679
========== ==========

Cash Flow from Changes in Current Assets and Liabilities
Receivables...................................................... (1,384) (7,863)
Refundable income taxes, net..................................... 7,403
Inventories...................................................... (13,772) 6,558
Prepaid expenses and other current assets........................ 1,162 (601)
Accounts payable................................................. 16,130 6,745
Accrued payroll.................................................. 11,151 9,071
Accrued income taxes............................................. 369
Other accrued taxes.............................................. (400) (1,435)
Other current liabilities........................................ 15,243 14,892
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Change in Current Assets and Liabilities....................... $ 28,499 $ 34,770
========== ==========

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See accompanying notes to consolidated financial statements.

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

Cash Flows--Operating Activities
Net earnings..................................................... $ 89,451 $ 61,696
Adjustments to reconcile net earnings to cash flow:
Depreciation and amortization.................................. 93,738 95,159
Amortization of unearned compensation and loan costs........... 3,344 2,599
Change in current assets and liabilities....................... 50,591 7,024
Change in other liabilities ................................... 585 383
(Gain) loss on disposal of land, buildings and equipment....... (221) 1,700
Deferred income taxes.......................................... 14,329 7,807
Other, net..................................................... 178 338
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Net Cash Provided by Operating Activities.................... $ 251,995 $ 176,706
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Cash Flows--Investment Activities
Purchases of land, buildings and equipment....................... (84,393) (87,181)
Purchases of intangibles......................................... (1,642) (1,264)
Increase in other assets......................................... (2,040) (3,045)
Proceeds from disposal of land, buildings and equipment
(including net assets held for disposal)....................... 29,487 20,128
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Net Cash Used by Investment Activities....................... $ (58,588) $ (71,362)
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Cash Flows--Financing Activities
Proceeds from issuance of common stock........................... 22,321 5,490
Income tax benefit credited to equity............................ 8,209 1,156
Dividends paid................................................... (5,531) (6,005)
Purchases of treasury stock...................................... (153,683) (86,918)
ESOP note receivable repayments.................................. 975 2,400
Decrease in short-term debt...................................... (60,100) (9,900)
Repayment of long-term debt...................................... (981) (2,405)
Proceeds from issuance of equity put options..................... 2,184 1,027
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Net Cash Used by Financing Activities........................ $ (186,606) $ (95,155)
---------- ----------

Increase in Cash and Cash Equivalents.............................. 6,801 10,189
Cash and Cash Equivalents - Beginning of Period.................... 33,505 25,490
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Cash and Cash Equivalents - End of Period.......................... $ 40,306 $ 35,679
========== ==========

Cash Flow from Changes in Current Assets and Liabilities
Receivables...................................................... (296) (11,030)
Refundable income taxes, net..................................... 12,418
Inventories...................................................... 31,515 (44,035)
Prepaid expenses and other current assets........................ 2,393 1,661
Accounts payable................................................. 4,961 25,902
Accrued payroll.................................................. (2,884) 10,223
Accrued income taxes............................................. (324)
Other accrued taxes.............................................. (1,529) (273)
Other current liabilities........................................ 16,755 12,158
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Change in Current Assets and Liabilities....................... $ 50,591 $ 7,024
========== ==========

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See accompanying notes to consolidated financial statements.

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

Note 1. Background
----------

These consolidated financial statements 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 and
thirty-nine weeks ended February 28, 1999 are not necessarily indicative of the
results that may be expected for the fiscal year ending May 30, 1999.

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 31, 1998. The accounting policies used in preparing these
consolidated financial statements are the same as those described in our annual
report on Form 10-K, except that the Company has adopted the provisions of
Statement of Financial Accounting Standards No. 130 (SFAS 130), "Reporting
Comprehensive Income". The Company adopted SFAS 130 by reporting all items of
comprehensive income in the consolidated statements of changes in stockholders'
equity.

Note 2. Consolidated Statements of Cash Flows
-------------------------------------

During the thirteen and thirty-nine weeks ended February 28, 1999,
Darden paid $7,896 and $16,439, respectively, for interest (net of amount
capitalized) and $14,892 and $25,386, respectively, for income taxes. During the
thirteen and thirty-nine weeks ended February 22, 1998, Darden paid $8,483 and
$16,665, respectively, for interest (net of amount capitalized) and $6,678 and
$10,749, respectively, 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 375,000 shares of common stock were excluded from the
calculation of diluted EPS for the thirteen weeks ended February 22, 1998
because their exercise prices exceeded the average market price of common shares
for the period. No options were excluded from the calculation of diluted EPS for
the thirteen weeks ended February 28, 1999. Options to purchase 58,700 and 8.9
million shares of common stock were excluded from the calculation of diluted EPS
for the thirty-nine weeks ended February 28, 1999 and February 22, 1998,
respectively, because their exercise prices exceeded the average market price of
common shares for the period.

Note 4. Derivative Financial and Commodity Instruments
----------------------------------------------

On January 31, 1997, the Securities and Exchange Commission (SEC)
issued amended disclosure rules for derivatives and exposures to market risk
from derivative and other financial and certain commodity instruments. Enhanced
accounting policy disclosures in accordance with this SEC release follow.

The Company may, from time to time, use financial and commodities
derivatives in the management of interest rate and commodities pricing risks
that are inherent in its business operations. Such instruments are not held or
issued for trading or speculative purposes.

The Company may, from time to time, use interest rate swap and cap
agreements in the management of interest rate exposure. The interest rate
differential to be paid or received is normally accrued as interest rates
change, and is recognized as a component of interest expense over the life of
the agreements. If an agreement is terminated prior to the maturity date and is
characterized as a hedge, any accrued rate differential would be deferred and
recognized as interest expense over the life of the hedged item.

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

Note 4. Derivative Financial and Commodity Instruments - Continued
----------------------------------------------------------

The Company uses commodities hedging instruments, including forwards,
futures and options, to reduce the risk of price fluctuations related to future
raw materials requirements for commodities such as coffee, soybean oil, and
shrimp. The terms of such instruments generally do not exceed twelve months, and
depend on the commodity and other market factors. Deferred gains and losses are
subsequently recorded as cost of products sold in the statement of earnings when
the inventory is sold. If the inventory is not acquired and the hedge is
disposed of, the deferred gain or loss is recognized immediately in cost of
products sold.

The Company does not believe it has any material risk from any of the
above financial instruments, and the Company does not anticipate any material
losses from the use of such instruments.

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 and thirty-nine weeks
ended February 28, 1999 and February 22, 1998.

Thirteen Weeks Ended Thirty-Nine Weeks Ended
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February 28, February 22, February 28, February 22,
1999 1998 1999 1998
- --------------------------------------------------------------------------------------------------------------------

Sales .................................. 100.0% 100.0% 100.0% 100.0%
Costs and Expenses:
Cost of sales:
Food and beverages..................... 32.8 33.2 32.9 32.8
Restaurant labor....................... 32.4 32.5 32.6 32.8
Restaurant expenses.................... 13.8 13.9 14.6 15.0
------ ------ ------ ------
Total Cost of Sales.................. 79.0% 79.6% 80.1% 80.6%
Selling, general and administrative...... 10.2 10.3 10.2 10.9
Depreciation and amortization............ 3.6 3.9 3.7 4.0
Interest, net............................ 0.5 0.6 0.6 0.6
------ ------ ------ ------
Total Costs and Expenses .......... 93.3% 94.4% 94.6% 96.1%
------ ------ ------ ------

Earnings before Income Taxes............... 6.7 5.6 5.4 3.9
Income Taxes............................... (2.3) (1.9) (1.9) (1.3)
------ ------ ------ ------

Net Earnings............................... 4.4% 3.7% 3.5% 2.6%
====== ====== ====== ======

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

For the fiscal 1999 third quarter ended February 28, 1999, earnings
after tax were $38.4 million or 27 cents per diluted share, compared to earnings
after tax of $29.8 million or 20 cents per diluted share in the third quarter of
fiscal 1998. The increase in third quarter earnings was primarily attributable
to strong same-restaurant sales at both Red Lobster and The Olive Garden. Sales
of $866.9 million for the third quarter were 6.9% higher than last year's third
quarter.

For the first nine months of fiscal 1999, net earnings were $89.5
million or 63 cents per diluted share, compared to $61.7 million or 41 cents per
diluted share in the same fiscal 1998 period. Sales approximating $2.5 billion
for the first nine months of fiscal 1999 were 7.5% higher than last year.

Food and beverage costs for the quarter were 32.8% of sales, compared
to 33.2% of sales last year, primarily attributable to pricing and sales mix.
Restaurant labor costs amounting to 32.4% of sales were comparable to last
year's 32.5% of sales. Restaurant expenses decreased to 13.8% of sales compared
to 13.9% last year. Restaurant level profit margin increased to 21.0% of sales
in the third quarter compared to 20.4% last year primarily as a result of food
and beverage costs discussed above. The decrease in third quarter selling,
general and administrative expenses to 10.2% of sales compared to 10.3% of sales
last year was mainly attributable to reduced marketing expenses as a percentage
of sales. Depreciation and amortization expense declined to 3.6% of sales
compared to 3.9% in the prior year primarily attributable to higher sales
volumes.

The effective tax rate for the third quarter of fiscal 1999 was 34.5%
compared to 34.2% last year. The estimated effective tax rate for fiscal 1999 is
approximately 34.7% which is an increase over last year's effective tax rate of
33.8% due to a higher level of expected pre-tax income for the year.

Food and beverage costs for the first nine months of fiscal 1999 were
32.9% of sales, which is comparable to last year's 32.8% of sales. Restaurant
labor decreased to 32.6% of sales compared to last year's 32.8% due to
efficiencies resulting from higher sales volumes. Restaurant expenses
decreased to 14.6% of sales compared to

15.0% in the prior year. Selling, general and administrative expenses decreased
to 10.2% of sales compared to 10.9% in the prior year, primarily attributable to
reduced marketing expenses. Depreciation and amortization expense declined to
3.7% of sales compared to 4.0% in the prior year. That percentage of sales
decrease also resulted from higher sales volumes.

Division Results
- ----------------

Red Lobster sales of $493.3 million were 5.6% above last year's third
quarter. Same-restaurant sales in the United States were up 6.8% for the
quarter. Third quarter operating profits solidly improved over the prior year
primarily due to increased sales, and lower restaurant level costs, marketing
expense and depreciation expense as a percentage of sales. Through the first
nine months of fiscal 1999, Red Lobster's sales increased to $1.4 billion and
same-restaurant sales in the United States increased by 8.1%.

The Olive Garden continued its positive momentum in the third quarter
of fiscal 1999 with a 7.8% increase in sales to $367.5 million. Same-restaurant
sales in the United States increased 7.5%, marking the eighteenth consecutive
quarter of same-restaurant sales increases. Third quarter operating profits were
substantially improved over the prior year primarily due to increased sales and
lower food and beverage and restaurant level costs as a percentage of sales.
Through the first nine months of fiscal 1999, The Olive Garden sales increased
by 8.6% to 1.1 billion and same-restaurant sales in the United States increased
by 9.0%.

Darden's newest concept, Bahama Breeze, continued to produce strong
sales at each of its four restaurants. Two additional restaurants are currently
under construction, both of which have expected fiscal 1999 opening dates.
Additional locations are also under development throughout the United States.

The table below details the number of restaurants open at the end of
the third quarter of fiscal 1999, compared with the number open at the end of
May 1998 and the end of last fiscal year's third quarter.

NUMBER OF RESTAURANTS

- --------------------------------------------------------------------------------------------------------------------
February 28, 1999 May 31, 1998 February 22, 1998
- --------------------------------------------------------------------------------------------------------------------

Red Lobster - USA............................... 634 648 649
Red Lobster - Canada............................ 34 34 35
----- ----- -----
Total...................................... 668 682 684

Olive Garden - USA.............................. 459 461 460
Olive Garden - Canada........................... 5 5 5
----- ----- -----
Total...................................... 464 466 465

Bahama Breeze................................... 4 3 2
----- ----- -----

Total.................................. 1,136 1,151 1,151
===== ===== =====
- --------------------------------------------------------------------------------------------------------------------

Real Estate Investment Trusts
- -----------------------------

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

Both REITs are non-public REITs. Through its subsidiary companies,
Darden indirectly owns 100% of all voting stock and greater than 99.5% of the
total value of each REIT. For financial reporting purposes, both REITs are
included in Darden's consolidated group.

Year 2000
- ---------

Background

In the past, many computers, software programs, and other information
technology ("IT systems"), as well as other equipment relying on microprocessors
or similar circuitry ("non-IT systems"), were written or designed using two
digits, rather than four, to define the applicable year. As a result,
date-sensitive systems (both IT systems and non-IT systems) may recognize a date
identified with "00" as the year 1900, rather than the year 2000. This is
generally described as the Year 2000 issue. If this situation occurs, the
potential exists for system failures or miscalculations, which could impact
business operations.

The Securities and Exchange Commission (SEC) has asked public
companies to disclose four general types of information related to Year 2000
preparedness: the company's state of readiness, costs (historical and
prospective), risks, and contingency plans. See SEC Release No. 33-7558 (July
29, 1998). Accordingly, the Company has included the following discussion in
this report, in addition to the Year 2000 disclosures previously filed with the
SEC.

State of Readiness

The Company began a concerted effort and established a dedicated
project team to address its Year 2000 issues in fiscal year 1997. In fiscal year
1998, the Company formalized a task force (the "Year 2000 Project Office") to
coordinate the Company's response to Year 2000 issues. The Year 2000 Project
Office reports to the Chief Executive Officer, his executive team, and the Audit
Committee of the Company's Board of Directors.

Under the auspices of the Year 2000 Project Office, the Company
believes that it has identified all significant IT systems and non-IT systems
that require modification in connection with Year 2000 issues. Internal and
external resources have been used and are continuing to be used, to make the
required modifications and test Year 2000 readiness. The required modifications
of all significant systems are well under way. The Company plans on completing
the modifications and testing of all significant systems by the end of fiscal
1999.

In addition, through its Year 2000 Project Office, the Company has
communicated with suppliers, banks, vendors and others with whom it does
significant business (collectively, its business partners) to determine their
Year 2000 readiness and the extent to which the Company is vulnerable to any
other organization's Year 2000 issues. Based on these communications and related
responses, the Company is monitoring the Year 2000 preparations and state of
readiness of its business partners. Although the Company is not aware of any
significant Year 2000 problems with its business partners, there can be no
guarantee that the systems of other organizations on which the Company's systems
rely will be converted in a timely manner, or that a failure to convert by
another organization, or a conversion that is incompatible with the Company's
systems, would not have a material adverse effect on the Company.

Costs

The total costs to the Company of Year 2000 activities has not been and
is not anticipated to be material to its financial position or results of
operations in any given year. As of the end of the third quarter of fiscal 1999,
the Company had spent approximately $2.7 million on Year 2000 issues. This
amount does not include the costs incurred to develop and install a new seafood
inventory accounting system, which was already earmarked for replacement. The
total costs to the Company of addressing Year 2000 issues is estimated to be
less than $5 million. These total costs, as well as the date on which the
Company plans to complete the Year 2000 modification and testing processes, are
based on management's best estimates, which were derived utilizing numerous
assumptions of future events, including the continued availability of certain
resources, third-party modification plans and other factors. However, there can
be no guarantee that these estimates will be achieved, and actual results could
differ from those estimates.

Risks

The Company utilizes IT systems and non-IT systems in many aspects of
its business. Year 2000 problems in some of the Company's systems could possibly
disrupt operations at some restaurants, but the Company does not expect that any
such disruption would have a material adverse impact on the Company's operating
results.

The Company is also exposed to the risk that one or more of its
suppliers or vendors could experience Year 2000 problems that could impact the
ability of such suppliers or vendors to provide goods and services. Although
this risk is lessened by the availability of alternative suppliers, the
disruption of certain services, such as utilities, could, depending upon the
extent of the disruption, potentially have a material adverse impact on the
Company's operations.

Contingency Plans

The Year 2000 Project Office is in the process of developing
contingency plans for the Company's significant IT systems and non-IT systems
requiring Year 2000 modification. In addition, the Company is developing
contingency plans to deal with the possibility that some suppliers or vendors
might fail to provide goods and services on a timely basis as a result of Year
2000 problems. These contingency plans will include the identification,
acquisition and/or preparation of backup systems, suppliers and vendors.

Forward-Looking Statements
- --------------------------

Certain information included in this report and other materials filed
or to be filed by the Company with the Securities and Exchange Commission (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. Such statements
include information relating to current expansion plans and Year 2000
compliance. Such forward-looking information is based on assumptions concerning
important risks and uncertainties that could significantly affect anticipated
results in the future and, accordingly, such results may differ from those
expressed in any forward-looking statements made by or on behalf of the Company.
These risks and uncertainties include, but are not limited to, those relating to
restaurant development and the Year 2000 readiness of suppliers, banks, vendors
and others having a direct or indirect business relationship with the Company.

PART II
OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits.

Exhibit 12 Computation of Ratio of Consolidated
Earnings to Fixed Charges

Exhibit 27 Financial Data Schedule

(b) Reports on Form 8-K.

The Company filed one report on Form 8-K on December 16, 1998,
reporting certain financial results for the second quarter of
fiscal year 1999.

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: April 12, 1999 By: /s/ C.L. Whitehill
------------------------------------------------
C.L. Whitehill
Senior Vice President,
General Counsel and Secretary

Dated: April 12, 1999 By: /s/ Linda Dimopoulos
------------------------------------------------
Linda Dimopoulos
Senior Vice President - Corporate Controller and
Business Information Systems
(Principal accounting officer)

INDEX TO EXHIBITS

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

12 Computation of Ratio of Consolidated Earnings to Fixed Charges 18

27 Financial Data Schedule 19