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  "documentTitle": "Darden Restaurants, Inc. (DRI)",
  "authorId": "03_Starboard_Value",
  "authorName": "Jeffrey C. Smith",
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  "presentationDate": "2014-09-11 00:00:00",
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  "notes": "The slide uses a conservative $350M figure for the illustrative sale, referencing a broader Real Estate Primer.",
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      "text": "A $350 million portfolio sale would generate little-to-no tax or debt breakage costs",
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      "text": "Estimated Value of Real Estate Added by Year",
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      "text": "Note: The valuations referenced in the Real Estate Primer are estimates and, therefore, there can be no assurance that such estimates are reflective of actual realizable value. While there could be additional information regarding Darden's real estate assets that could alter the valuations referenced in the Real Estate Primer, Starboard strongly believes that the assumptions used in such valuations are conservative, and that the incorporation of any such additional data would likely to lead to a higher valuation range.",
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      "text": "While we have not assumed any upside from this, it is likely that by selling some of these properties Darden can generate both cash proceeds and tax losses that can be used to offset other gains, while giving up little-to-no income.",
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      "text": "In our illustrative example, we have shown just a $350 million sale, in order to be conservative.",
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      "text": "Further, we believe that Darden owns a modest number of locations that generate minimal cash flow on a fully-leased basis and where the property could be sold for a higher and better use.",
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      "text": "Although we believe, as shown in detail in our Real Estate Primer (available at http://tinyurl.com/Primer-On-Darden-Real-Estate), that none of Darden’s debt covenants would prohibit a larger real estate transaction, a $350 million sale would approximately coincide with the sale-leaseback bucket specified in Darden’s public bonds and the amount outstanding on Darden’s term-loan, which could be repaid with minimal debt-breakage cost.",
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      "text": "In addition, there will likely be numerous older properties with a higher tax basis for a variety of reasons, including stores on land that was purchased during the real estate peak in the mid 2000s.",
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      "text": "The primary rationale for pursing a REIT spin-off or a tax-free merger, rather than a sale, is tax-efficiency; however, we believe that Darden has more than $500 million worth of high-tax-basis properties where there would be little-to-no tax impact of a sale.",
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      "text": "Using Green Street’s estimates of development costs, we estimate that the Company has added approximately $650 million worth of real estate since 2008 – the majority of these properties would trade at a value close to their development cost.",
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      "text": "Estimated Value of Real Estate Added: $350 million",
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      "text": "In our illustrative example, we use a $350 million portfolio sale.",
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      "text": "Real estate separation Step 1: Partial portfolio sale (cont'd)",
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