PHOENIX - Beneath a cloudless Arizona sky Tuesday, Broncos coach Mike Shanahan basked in the optimism of his team's offseason and strongly professed the belief his team would be better on all fronts in the upcoming season than it was in last season's 9-7 playoff miss.

In his first extended comments since before the scouting combine and the start of free agency, Shanahan covered a wide variety of topics, including the acquisition of cornerback Dré Bly, the attempt to upgrade the team's offense and receiver Rod Smith's left hip injury, as well as the talks between Shanahan and the Broncos to extend his contract.

The Broncos finished 21st in the league in total offense, 14th on defense and missed the postseason after a loss to the San Francisco 49ers in the season finale.

So, with the draft looming, here is the Broncos' world, according to Shanahan:

• On his disappointment with the offense last season and signing players such as running back Travis Henry, tight end Daniel Graham and receiver Brandon Stokley to fix it:

"If we're not in the top five, I'm very disappointed. We've been in the top five almost every year since I've been here. To not be in the top five is embarrassing and it's the standard that we shoot for. I'll be very disappointed if we're not back to where we've been."

• On what quarterback Jay Cutler has to do to take the next step in his development:

"What he's doing right now. He works out every day. He works out different drills, different quarterback drills every day. He's been doing that the last month. Going over to our facility to see him working on footwork, different quarterback drills, tells most people that he loves the game, that he wants to get better, to be the best at what he does. To do that, you've got to work all year 'round. He's got that type of mind-set; he wants to be the best at what he does."

• On signing Henry over other backs such as Willis McGahee or Thomas Jones:

"Two of the guys you first mentioned there were draft choices involved. So you want to give draft choices away for a guy you can get free, that you might like more? I really thought Travis Henry was the MVP of (the Titans), that's what I thought. . . . You were able to sign a guy and not lose a draft choice. It's like getting a first rounder."

• On how Bly has reacted to coming to the Broncos in a trade instead of to the Washington Redskins, who are closer to his offseason home:

"I've talked to him and what happened - everybody knows what happened - Washington was talking to Dré Bly and I think he had a long-range contract in place, I think he was hoping he would be traded to the Washington Redskins because his home was very close and I think they had a five- or a six-year contract already agreed upon. I could see where I'd be happy, too, if I had that and going home, too. . . . Now most people, they come to Denver, don't want to leave. I wouldn't be surprised if we don't get a deal done with Dré Bly even before the season starts. And if it doesn't turn out that way, I (would) be surprised if he doesn't want to stay after he plays for us for a year."

• On Smith's recent hip surgery after playing on a sore hip he originally suffered in training camp last year:

"He had a little tear . . . according to the doctors, he should be ready by four months, which should be for the season. . . . The doctor was even surprised he played (in 2006) with it. Knowing Rod, how tough he is, it didn't surprise me he would play. You're hoping, you never know with surgery, how a guy comes back. I know Rod played hurt last year and I think he'll be healthy. And if he's healthy, it gives him a chance to get back to his old form."

• On his recent talks to extend his contract, which has two years remaining:

"I don't talk about those things. If it gets done, I'll tell you guys. It's like talking about a player's contract; until it's done, it's not done. I know my relationship with Pat (Bowlen) and this organization; it'll get worked out."

• On whether the talks indicate he has long-term plans to stay with the Broncos beyond the two years left on his deal:

"Yes, I do. And we're talking about that right now."

legwoldj@RockyMountainNews.com or 303-954-2359