Financial Review 2004 

## Management's Discussion and Analysis of Fi nanc i al Condition and Results of Operations 

## FORWARD-LOOKING STATEMENTS 

Certain statements included in this report and other materials filed or to be filed by us with the SEC (as well as information included in oral or written statements made or to be made by us) may con- tain statements that are forward-looking within the meaning of Section 27Aof the Securities Act of 1933, as am ended, and Section 21E of the Securities Exchange Act of 1934, as am ended. 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, projections regarding: our growth plans and the number and type of expected new restaurant openings,- same-restaurant sales growth for Red Lobster and Olive Garden,- diluted net earnings per share growth in fiscal 2005,- and expecta- tions regarding when Bahama Breeze and Smokey Bones will become accretive to earnings. These forward-looking statements are based on assumptions concerning important factors, risks, and uncertainties that could significantly affect anticipated results in the future and, accordingly, could cause the actual results to differ materially from those expressed in the forward-looking statements. 

These factors, risks, and uncertainties include, but are not limited to: 

• the highly competitive nature of the restaurant industry, especially pricing, service, location, personnel, and type and quality of food,- 

• economic, market, and other conditions, including a protracted economic slowdown or worsening economy, industry-wide cost pressures, public safety conditions (including ongoing concerns about terrorism threats or the continuing conflict in Iraq), weak consumer demand, changes in consumer preferences, demo- graphic trends, weather conditions, construction costs, and the cost and availability of borrowed funds,- 

• the price and availability of f ood, labor, utilities, insurance and media, and other costs, including seafood costs, employee ben- efits, workers' compensation insurance, litigation costs, and the general impact of inflation,- 

• unfavorable publicity relating to food safety or other concerns, including litigation alleging poor food quality, food-borne illness, or personal injury,- 

• the availability of desirable restaurant locations,- 

• government regulations and litigation relating to federal and state labor laws, zoning, land use, environmental matters, and liquor licenses,- and 

• growth plans, including real estate development and construc- tion activities, the issuance and renewal of licenses and permits for restaurant development, and the availability of funds to finance growth. 

