f2411ff7ad6810064472facb00265f43124a68d4d323dd462d6147f18a29ff9f

Adjustments for Non-Cash Items

Stock-Based Compensation

Changes in Working Capital

Capital Expenditures (CapEx)

Proceeds from / Repayments of Debt

Share Repurchases

Dividend Payments

Net Change in Cash

ac9057bdcdd719d410ebc72c5af8290d8cc85f8ba57da5c1dbb775bfe003f983

ad7585c5e7745b53a644e77b683a70e71f9275193d1e6e9817f13ba6cf6102c5

89f4736d6b15b8fe3810de6acc414120077390837d11c483ce3d005b5ef6ab94

The jump in **basic EPS** in **Q3 2024** was driven by a combination of factors. **Higher total sales** were achieved through the addition of **79 company-owned Ruth's Chris Steak House restaurants** and **53 net new restaurants**, and this increase was further bolstered by the acquisition of Ruth's Chris, particularly strengthening the **Fine Dining segment** with a **58.3%** increase in sales. Additionally, **improved profitability** was realized through **pricing leverage**—with a pricing increase of **3.5%** compared to total commodities inflation of **1.5%**—and enhanced **cost management** that reduced inefficiencies. **Share repurchases** of **$33 million** also played a role by reducing the share count, while a **lower effective tax rate** (12% to 12.5%) further contributed to the improved net earnings per share.  **[0000940944-24-000011_exhibit991-q3fy24.htm:0]** **[0000940944-24-000017_dri-20240225.htm:20]** **[0000940944-24-000011_exhibit991-q3fy24.htm:3]** **[DRI_3378700_3]** **[DRI_3378700_4]** **[0000940944-24-000011_exhibit991-q3fy24.htm:1]** 

What drove the jump in basic EPS in Q3 2024?

The spike in **income tax expense** for **Q4 2024** was primarily due to the **impact of state tax expense** and an adjustment from the **mark-to-market hedge impact related to deferred compensation**, which raised the **adjusted effective tax rate by 40 basis points** compared to Q4 2023.  **[20240620FL43965:4]** **[0000940944-24-000035_dri-20240526.htm:106]** **[0000940944-24-000035_dri-20240526.htm:59]** **[DRI_3392604_4]** 

Why did income tax expense spike in Q4 2024?

In **fiscal year 2024**, the rise in **General and Administrative expenses** was driven by the **Ruth's Chris Acquisition and Integration Costs** (a **0.4% impact**), **inflation** (a **0.1% impact**), and a partial offset from **sales leverage** (a **0.1% negative impact**).  **[0000940944-24-000035_dri-20240526.htm:57]** **[0000940944-24-000035_dri-20240526.htm:58]** 

What factors contributed to the rise in G&A expenses in FY 2024?

The significant improvement in Q3 2024 operating income was driven by several factors. **Total sales increased by 6.8%** due to the acquisition of **Ruth’s Chris Steak House** and the addition of **55 net new restaurants**. Improved margins also played a crucial role, with **food and beverage costs** improving by **90 basis points**—benefiting from lower commodities inflation compared to higher pricing increases—and the restaurant-level EBITDA rising to **20.6%** (an increase of **70 basis points**). Additionally, there were robust segment profit gains, with **LongHorn Steakhouse** seeing an increase of **$15.4 million** and the fine dining segment benefiting from a **$30.1 million** boost, alongside effective cost management such as a **40 basis point decrease** in G&A expenses. These combined factors led to the significant improvement in operating income for Q3 2024.  **[0000940944-24-000011_exhibit991-q3fy24.htm:0]** **[DRI_3378700_3]** 

What led to the significant improvement in operating income in Q3 2024?

The higher depreciation and amortization in Q4 2024 were mainly due to the **acquisition of Ruth's Chris**, which added a new asset base, along with a **significant increase in capital expenditures** on land, buildings, and equipment that raised the depreciation expense. Additionally, there were higher **impairments and disposals of assets**—a shift from a write-off reversal in Q4 2023 to actual impairments in Q4 2024—that further contributed to the increase.  **[0000940944-24-000026_exhibit991-q4fy24.htm:4]** **[DRI_3392604_5]** **[0000940944-24-000035_dri-20240526.htm:81]** 

Why were depreciation and amortization higher in Q4 2024?

e9b30fabb8ab6554e6329f079b407bd96b47d81e1725cc2f1be1f69afd4ba3f4

Based on the documents, there is **no specific explanation** provided for the increase in Cash and Cash Equivalents in Q3 2024. The documents note that changes in cash balances can result from factors such as **operating activities, investing activities, financing activities, and changes in working capital** (e.g., capital expenditures, share repurchases, dividend payments), but they do not detail which factor(s) caused the spike in Q3 2024.  **[0000940944-24-000017_dri-20240225.htm:2]** 

Why did Cash and Cash Equivalents spike in Q3 2024?

The jump in **Total Assets** in Q2 2025 is primarily explained by the acquisition of **103 Chuy's restaurants**, which significantly impacted several asset categories. The acquisition led to increases in **Goodwill** by **$262.9 million** and **Trademarks** by **$198.4 million**. Additionally, **Land, Buildings, and Equipment** increased by **$406.7 million**, **Operating Lease Right-of-Use Assets** by **$248.9 million**, and **Inventories** by **$27.5 million**. These changes, driven by the strategic expansion and related capital expenditures, explain the overall jump in Total Assets.  **[0000940944-25-000003_dri-20241124.htm:2]** **[0000940944-24-000078_exhibit991-q2fy25.htm:0]** **[DRI_3411944_4]** 

What explains the jump in Total Assets in Q2 2025?

The surge in **short-term debt** during Q1 2025 was mainly driven by **net proceeds from the issuance of commercial paper**, which added **$207.1 million** to the balance that quarter.  **[0000940944-24-000044_exhibit991-q1fy25.htm:5]** **[0000940944-24-000055_dri-20240825.htm:3]** 

Why did Short-term Debt surge in Q1 2025?

The **increase** in Long-term Debt in Q2 2025 was primarily caused by the **issuance of $750.0 million** in long-term debt to support the company's capital needs, including the **acquisition of Chuy's for $613.7 million**. Additionally, this strategy aligns with the company's historical use of debt to fund acquisitions and other strategic initiatives.  **[0000940944-25-000003_dri-20241124.htm:2]** **[0000940944-24-000078_exhibit991-q2fy25.htm:5]** **[0000940944-25-000003_dri-20241124.htm:31]** **[0000940944-25-000003_dri-20241124.htm:30]** 

What caused the increase in Long-term Debt in Q2 2025?

6e3eb52fa21f17287e000c4abe633e2d4bdb6800f5d8cdc1c83296ecdbb2a079

Operating Cash Flow in Q3 2024 was especially high at **$585.80 million** largely due to several positive operational factors. As noted in the documents, improved net earnings from continuing operations played a key role, with net earnings increasing noticeably compared to prior periods. In addition, higher depreciation and amortization expenses added further to the cash flows, and more favorable changes in current assets and liabilities also contributed to the boost in operating cash flows.  **[0000940944-24-000017_dri-20240225.htm:4]** **[0000940944-24-000011_exhibit991-q3fy24.htm:5]** 

Why was Operating Cash Flow so high in Q3 2024?

In **Q3 2024**, repurchase activity was notably lower because the company executed a much more measured repurchase of common stock—repurchasing about **0.2 million shares for approximately $33 million**—as part of a strategic adjustment in its capital allocation. The Board had recently approved a new **$1 billion share repurchase program** with no expiration date, shifting the approach such that repurchases became more dependent on market conditions and board discretion. Additionally, significant capital was allocated towards other priorities, including **$472.1 million** in dividends and **$699.9 million** for the acquisition of Ruth’s Chris Steak House, which further reduced the funds available for stock repurchases.  **[0000940944-24-000017_dri-20240225.htm:37]** **[0000940944-24-000017_dri-20240225.htm:28]** 

Why were Repurchases of Common Stock so low in Q3 2024?

The spike in cash used in investing activities in Q2 2025 was primarily driven by **substantial business acquisitions** and **increased capital expenditures**. In that period, Darden Restaurants spent **$613.7 million** on acquiring Chuy’s restaurants, representing a significant cash outlay, and also increased spending on land, buildings, and equipment to **$314.5 million**. These investments combined to create a notably high outflow in Q2 2025 compared to prior periods.  **[0000940944-25-000003_dri-20241124.htm:4]** **[0000940944-25-000003_dri-20241124.htm:30]** 

What caused the spike in cash used in investing activities in Q2 2025?

Financing activities swung positive in Q2 2025 primarily due to the significantly higher issuance of long-term debt, which increased from **$500.0 million in Q2 2024** to **$750.0 million in Q2 2025**. This increase was partially offset by lower net proceeds from short-term debt and modest changes in dividends and share repurchases, but the higher long-term debt issuance was the key driver behind the positive swing in cash flows from financing activities.  **[0000940944-25-000003_dri-20241124.htm:31]** **[20241219FL83180:5]** **[0000940944-24-000078_exhibit991-q2fy25.htm:5]** 

Why did financing activities swing positive in Q2 2025?

59294b14f42b15a8447caa344b54716d360de90e5da223b8fdada996ee6e2cbb

Net Earnings (USD, millions)

Losses from Discontinued Operations, Net of Tax (USD, millions)

Depreciation and Amortization (USD, millions)

Impairments and Disposal of Assets, Net (USD, millions)

Stock-Based Compensation Expense (USD, millions)

Net Cash Provided by Operating Activities of Continuing Operations (USD, millions)

Purchases of Land, Buildings and Equipment (USD, millions)

Proceeds from Disposal of Land, Buildings and Equipment (USD, millions)

Cash Used in Business Acquisitions, Net of Cash Acquired (USD, millions)

Purchases of Capitalized Software and Other Assets (USD, millions)

Net Cash Used in Investing Activities of Continuing Operations (USD, millions)

Proceeds from Issuance of Common Stock (USD, millions)

Dividends Paid (USD, millions)

Repurchases of Common Stock (USD, millions)

Proceeds from Issuance of Commercial Paper, Net (USD, millions)

Proceeds from Issuance of Long-Term Debt (USD, millions)

Principal Payments on Finance Leases (USD, millions)

Payment of Debt Issuance Costs (USD, millions)

Net Cash Provided by Financing Activities of Continuing Operations (USD, millions)

Net Cash (Used in) Provided by Operating Activities of Discontinued Operations (USD, millions)

Net Cash (Used in) Provided by Discontinued Operations (USD, millions)

Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash (USD, millions)

Cash, Cash Equivalents, and Restricted Cash - Beginning of Period (USD, millions)

Cash, Cash Equivalents, and Restricted Cash - End of Period (USD, millions)

10d21857870e7550306a9398c80f4f08c4fe8a03caa339801cf1bd1b89c87275

74e730f432e935987d1d71bf853f14e955924058ebfdac3fcd91d2bbf8e9aaba

Olive Garden

Red Lobster

LongHorn Steakhouse

Fine Dining

- The Capital Grille, Bahama Breeze, Seasons 52, Eddie V's, and Yard House

Other Business

Total Revenue

f972d68244034a4468a973b6182b7a3b747df0db19d005932a0b9f25691fd188

Sales (USD, millions)

Food and beverage (USD, millions)

Restaurant labor (USD, millions)

Restaurant expenses (USD, millions)

Marketing expenses (USD, millions)

General and administrative expenses (USD, millions)

Depreciation and amortization (USD, millions)

Impairments and disposal of assets, net (USD, millions)

Total operating costs and expenses (USD, millions)

Operating income (USD, millions)

Interest, net (USD, millions)

Earnings before income taxes (USD, millions)

Income tax expense (USD, millions)

Earnings from continuing operations (USD, millions)

Losses from discontinued operations, net of tax (USD, millions)

Net earnings (USD, millions)

Basic net earnings per share from continuing operations (USD)

Losses from discontinued operations per share - basic (USD)

Net earnings per share - basic (USD)

Diluted net earnings per share from continuing operations (USD)

Losses from discontinued operations per share - diluted (USD)

Net earnings per share - diluted (USD)

99a330a4b408ebbe6c834cd360f294e7428f456822b7975bf0a672eb1517d2eb

Darden Restaurants Inc (DRI)

Financials