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LETTER TO SHAREHOLDERS

To Our Shareholders, Employees and Guests:

Fiscal 2000 was our best year ever, with the strongest results in our history. This terrific financial performance reflects continued progress toward our goal - being the best company in casual dining, now and for generations.

	Revenues increased 7% to $3.7 billion, driven by strong same-restaurant sales growth at Red Lobster and Olive Garden and continued expansion of Bahama Breeze.
	Earnings after tax before an unusual non-operating gain increased 28% to $173.1 million, our highest level ever.
	Earnings per share on a diluted basis before the unusual gain rose 36% to $1.31, a significant achievement coming on top of the 43% prior year increase.
	Red Lobster had annual sales of $2.07 billion and its average sales per restaurant were $3.2 million, record performances in both categories. Red Lobster’s same-restaurant sales increased 7.6% for the year and were positive in every quarter, completing 10 consecutive quarters of comparable restaurant sales increases.
	Olive Garden’s annual sales were $1.58 billion and its sales per restaurant averaged $3.4 million, establishing Olive Garden records in both categories. Olive Garden’s same-restaurant sales increased 7.2% for the year and were strongly positive every quarter. It posted 23 consecutive quarters of positive comparable restaurant sales.
	Bahama Breeze continued to be enthusiastically received by guests, opening eight more restaurants in six new markets. Guests can now enjoy a “two-hour vacation in the islands” in any one of 14 different Bahama Breeze restaurants in 11 markets.

In September 1999, we introduced our latest internally developed restaurant concept, Smokey Bones BBQ Sports Bar. This concept combines two features we believe are extremely promising - barbecue and a relaxed sports bar experience - and is an exciting addition to our portfolio. There are currently two restaurants, both located in Orlando, and we plan to extend the test with another restaurant in Columbus, OH, early in fiscal 2001.

With our strong cash flow and balance sheet, we invested in growth while also repurchasing 11.5 million shares, or $202 million, of Darden stock in fiscal 2000. We have repurchased 44.1 million shares of stock since the program began in December 1995 and have authorization to purchase an additional 20.5 million shares.

Our passion is to be the best in casual dining, now and for generations. Casual dining is a growth industry and we are committed to capturing that growth opportunity. We believe we have the right strategy and the right team to deliver significant growth in sales, earnings and shareholder value.