{
  "docId": "019dd923-622b-71dc-a6d9-c007c91e862b",
  "docSlug": "28a425ed69eb",
  "documentTitle": "Darden Restaurants, Inc. (DRI)",
  "authorId": "03_Starboard_Value",
  "authorName": "Starboard Value",
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "activist_investor",
  "sourceTypeLabel": "Activist investor",
  "presentationDate": "2014-09-11 00:00:00",
  "orientation": "landscape",
  "aspectRatio": 1.3333334,
  "pageNumber": 257,
  "pageCount": 294,
  "prevPage": 256,
  "nextPage": 258,
  "slideType": "key_messages",
  "function": "propose_solution",
  "density": "overcrowded",
  "nDataPoints": 0,
  "notes": null,
  "elementsJson": [
    "headline_text",
    "subtitle_text",
    "bullet_list",
    "callout_box",
    "footnote"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622b-71dc-a6d9-c007c91e862b/257",
  "deckHref": "/decks/019dd923-622b-71dc-a6d9-c007c91e862b",
  "deckJsonHref": "/decks/019dd923-622b-71dc-a6d9-c007c91e862b.json",
  "deckAnchorHref": "/decks/019dd923-622b-71dc-a6d9-c007c91e862b#slide-257",
  "components": [
    {
      "bbox": {
        "h": 0.08,
        "w": 0.92,
        "x": 0.04,
        "y": 0.82
      },
      "kind": "callout",
      "text": "Refranchising a modest portion of the current store base will help Darden to maintain its investment grade rating and improve the safety of its dividend",
      "attrs": null,
      "subkind": "primary",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "d83757e5-b9e2-48d1-9595-28d0b21816a9",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.06,
        "w": 0.92,
        "x": 0.04,
        "y": 0.69
      },
      "kind": "list",
      "text": "In addition to the quantifiable benefits, the increased stability of cash flows and higher returns on capital will be viewed favorably by both lenders and income-oriented shareholders.",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "0056d928-54cc-4898-aad7-750ee02a6ac3",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.12,
        "w": 0.92,
        "x": 0.04,
        "y": 0.25
      },
      "kind": "list",
      "text": "Refranchising underperforming stores and markets will necessarily improve Darden's dividend coverage and credit rating, as these stores generate little-to-no current earnings or cash flow, yet can be sold to a franchisee that will provide Darden with an initial infusion of capital and an ongoing income stream.",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "13879a2b-ced9-406d-a365-5dd31b2014e8",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.92,
        "x": 0.04,
        "y": 0.38
      },
      "kind": "list",
      "text": "For well-performing stores, the impact on the dividend coverage and credit rating depends on a number of factors(1), but will generally be positive, especially for the types of stores that would be the target of a typical refranchising program.",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "78a0c8e1-7662-4907-ada0-3c5d83c14a13",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.88,
        "x": 0.08,
        "y": 0.47
      },
      "kind": "list",
      "text": "For all but the highest-volume, best performing stores, the proceeds generated from refranchising, net of taxes, will be sufficient to repay enough debt and repurchase enough shares to more than offset any reduction in cash flow.",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "c9f6c739-49c5-495b-8452-7e23db540dd1",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.12,
        "w": 0.92,
        "x": 0.04,
        "y": 0.56
      },
      "kind": "list",
      "text": "Further, since most refranchising deals are coupled with development agreements, Darden can expect an ongoing influx of (i) capital from franchise fees, which could be used to pay down more debt and buy back more shares, and (ii) increasing royalty payments, which will further improve Darden's credit and dividend coverage metrics.",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "f0e0f843-d6f0-42ac-bb11-027f4387b5eb",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.92,
        "x": 0.04,
        "y": 0.16
      },
      "kind": "paragraph",
      "text": "By using half of the proceeds from refranchising to repay debt and half to repurchase shares, Darden would lower its lease-adjusted leverage ratio and its dividend payout ratio.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "a2bc34e4-54a1-400b-8f02-da8bd08b4959",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.04,
        "w": 0.85,
        "x": 0.04,
        "y": 0.95
      },
      "kind": "source-note",
      "text": "1) These factors include the reduction in cash flow, if any, due to the sale of the store, the proceeds received, net of taxes, the use of proceeds, the increased EBITA margin and ROA resulting from refranchising, and the reduction in total revenue",
      "attrs": {
        "numbered": true
      },
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "00d8ff85-06ce-45d3-9d29-e73c4a47f939",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.12,
        "w": 0.92,
        "x": 0.04,
        "y": 0.04
      },
      "kind": "title",
      "text": "Refranchising will help to solidify Darden's credit rating and dividend",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "f12bd833-9122-408c-8e13-e685a4c2b744",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [
    {
      "name": "Logical chain",
      "slug": "logical-chain",
      "agent": null,
      "layer": "slide",
      "matchId": "acf7ad99-df74-41f2-bdef-9c61adf49787",
      "evidence": "The slide presents a logical sequence of events and benefits, using bullet points to outline the advantages of refranchising.",
      "confidence": 0.7
    }
  ],
  "frameworks": [],
  "arcBeats": [],
  "loops": [],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}