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Darden: Unaudited Pro Forma Consolidated Financial Information

The following excerpt is from the company's SEC filing.

pro rata

distribution (the “Spin-Off”) to our shareholders of all of the outstanding shares of common stock of Four Corners Property Trust, Inc. (“Four Corners”). Unless the context otherwise requires, any references to “we”, “our” and “us” refers to Darden and its consolidated subsidiaries.

The following unaudited pro forma consolidated financial statements, prepared in accordance with Article 11 of Regulation S-X, present our unaudited pro forma consolidated balance sheet as of August 30, 2015 and our unaudited pro forma consolidated statements of earnings for the three months ended August 30, 2015 and the year ended May 31, 2015.

The unaudited pro forma consolidated financial statements have been derived by the application of pro forma adjustments to our historical financial statements. The unaudited pro forma consolidated financial statements give effect to events that are (1) directly attributable to the transactions referred to below, (2) factually supportable, and (3) with respect to the statements of earnings, expected to have a continuing impact on us. The adjustments necessary to fairly present the unaudited pro forma consolidated financial statements have been based on available information and assumptions that we believe are reasonable. The adjustments are described in the notes to the unaudited pro forma consolidated financial statements and present how our financial statements may have appeared had our capital structure reflected the below transactions as of the dates noted below.

The unaudited pro forma consolidated balance sheet assumes the Spin-Off and the related transactions occurred on August 30, 2015. The unaudited pro forma statements of earnings for the three months ended August 30, 2015 and the year ended May 31, 2015 assumes the Spin-Off and related transactions occurred on May 26, 2014.

The unaudited pro forma consolidated financial statements are presented for illustrative purposes only and do not purport to represent our financial position or results of operations that would actually have occurred had the transactions referred to below been consummated on August 30, 2015 for the unaudited pro forma consolidated balance sheet and on May 26, 2014 for the unaudited pro forma consolidated statements of earnings, or to project our financial positions or results of operations for any future date or period.

The following unaudited pro forma consolidated financial statements give effect to the Spin-Off and related transactions, including: (i) the transfer of six LongHorn Steakhouse restaurants located in the San Antonio, Texas area (the “LongHorn San Antonio Business”) and 418 restaurant properties (the “Four Corners Properties”) to Four Corners; (ii) the issuance to us of all of the outstanding common stock of Four Corners and corresponding

distribution to our shareholders of the outstanding shares of Four Corners common stock as a tax-free stock dividend; (iii) the cash dividend received by us from Four Corners; (iv) the retirement of certain debt; (v) the rental expense associated with the leasing of the Four Corners Properties from Four Corners; (vi) the removal of depreciation expense associated with the assets contributed in the Spin-Off; (vii) incremental revenue related to the franchise agreements entered into with the LongHorn San Antonio Business; (viii) the transaction fee due to our financial advisor and (ix) the adjustment to income taxes for the above items.

Our unaudited pro forma consolidated financial statements do not give effect to the potential impact of cost savings that may result from the transactions described above. We are providing Four Corners with certain administrative and support services on a transitional basis pursuant to a transition services agreement. These costs are expected to be immaterial. Our unaudited pro forma consolidated financial statements do not give effect to the transition services agreement with Four Corners, as the majority of these services are not expected to be recurring in nature and therefore do not have a continuing impact on our unaudited pro forma consolidated statements of earnings.

In addition, as noted above, the unaudited pro forma consolidated financial statements only give effect to the transactions directly attributable to the Spin-Off. As we have previously disclosed, we intend to pay down a total of $1 billion of debt with proceeds from the Spin-Off, sale leaseback of certain real estate properties, including certain restaurant properties and our Restaurant Support Center, along with cash on hand.

The transactions to pay down an additional approximately $700 million in debt, along with all related costs and expenses, are not reflected in the accompanying unaudited pro forma consolidated financial statements

This information should be read in conjunction...


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