UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM
10-K

xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED May 29, 2016

¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROMTO

☑
ANNUAL REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR
THE FISCAL YEAR ENDED
MAY 29, 2022
☐
TRANSITION REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
FOR THE TRANSITION PERIOD FROM __________ TO __________
Commission file number:
001-01185

________________
GENERAL MILLS, INC.

(Exact name of registrant as specified in its charter)

Delaware41-0274440
(State or other jurisdiction of(I.R.S. Employer
incorporation or organization)Identification No.)
Number One General Mills Boulevard
Minneapolis, Minnesota55426
(Address of principal executive offices)(Zip Code)

Delaware
41-0274440
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
Number One General Mills Boulevard
Minneapolis
,
Minnesota
55426
(Address of principal executive offices)
(Zip Code)
(763)
764-7600

(Registrant’s telephone number,
including area code)

Securities registered pursuant to Section 12(b)
of the Act:

Title of each class

Name of each exchange

on which registered

Common Stock, $.10 par valueNew York Stock Exchange
Floating Rate Notes due 2020New York Stock Exchange
2.100% Notes due 2020New York Stock Exchange
1.000% Notes due 2023New York Stock Exchange
1.500% Notes due 2027New York Stock Exchange

Title of each class
Trading Symbol(s)
Name of each exchange
on which registered
Common Stock, $.10 par value
GIS
New York Stock Exchange
1.000% Notes due 2023
GIS23A
New York Stock Exchange
0.125% Notes due 2025
GIS25A
New York Stock Exchange
0.450% Notes due 2026
GIS26
New York Stock Exchange
1.500% Notes due 2027
GIS27
New York Stock Exchange
Securities registered pursuant to Section 12(g)
of the Act: None

Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act.
Yesx
☑
No¨

☐
Indicate by check mark if the registrant is not required to file reports pursuant
to Section 13 or Section 15(d) of the Act. Yes¨
☐
Nox

☑
Indicate
by
check
mark
whether
the
registrant
(1)
has
filed
all
reports
required
to
be
filed
by
Section
13
or
15(d)
of
the
Securities
Exchange Act of 1934
during the preceding 12
months (or for such shorter
period that the registrant
was required to file such
reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yesx
☑
No¨

☐
Indicate
by
check
mark
whether
the
registrant
has
submitted
electronically and posted on its corporate website, if any,
every
Interactive
Data
File
required
to
be
submitted and posted
pursuant to Rule
405 of Regulation
S-T during
the preceding 12
months (or for
such shorter period
that the registrant
was required
to
submit and post such files).
Yesx
☑
No¨

☐
Indicate
by
check
mark if disclosure
whether
the
registrant
is
a
large
accelerated
filer,
an
accelerated
filer,
a
non-accelerated
filer,
a
smaller
reporting
company,
or
an
emerging
growth
company.
See
the
definitions
of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.x

Indicate by check mark whether the registrant is a

“large
accelerated
filer, an ”
“accelerated
filer, a non-accelerated filer, or a ”
“smaller
reporting company. See the definitions of “large accelerated filer,company,” “accelerated filer” and “smaller reporting
“emerging growth company” in Rule 12b-2 of the Exchange Act. (Check
one):

Large accelerated filerxAccelerated filer¨
Non-accelerated filer¨  (Do not check if a smaller reporting company)Smaller reporting company¨

Large accelerated filer
☑
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If
an
emerging
growth
company,
indicate
by
check
mark
if
the
registrant
has
elected
not
to
use
the
extended
transition
period
for
complying with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark
whether the registrant has
filed a report on
and attestation to its management’s
assessment of the effectiveness
of its
internal control
over financial
reporting under
Section 404(b)
of the
Sarbanes-Oxley Act
(15 U.S.C.
7262(b)) by
the registered
public accounting firm that prepared or issued its audit report.
☑
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Act).
Yes¨
☐
Nox

☑
Aggregate
market value
of Common
Stock held
by non-affiliates
of the
registrant, based
on the
closing price
of $58.41 $62.76
per share
as
reported on
the New
York
Stock Exchange
on November 27, 2015 (the
28, 2021
(the last
business day
of the
registrant’s
most recently
completed
second fiscal quarter): $34,654.2 $
37,857.2
million.

Number
of
shares
of
Common
Stock
outstanding
as
of
June 13, 2016: 597,020,906 (excluding 157,592,422
15,
2022:
597,158,440
(excluding
157,454,888
shares
held
in
the
treasury).

DOCUMENTS INCORPORATED
BY REFERENCE

Portions of the registrant’s Proxy
Statement for its 20162022 Annual Meeting of Shareholders are incorporated by reference
into Part III.

3
Page
Part I
Item 1
4
Item 1A
8
Item 1B
14
Item 2
14
Item 3
15
Item 4
15
Part II
Item 5
15
Item 7
17
Item 7A
40
Item 8
42
Item 9
91
Item 9A
91
Item 9B
91
Part III
Item 10
92
Item 11
92
Item 12
92
Item 13
92
Item 14
92
Part IV
Item 15
92
Item 16
95
96
4
PART
I

ITEM 1Business

ITEM 1 - Business
COMPANY OVERVIEW
For more than
150 years, General
Mills has been making
food the world
loves. We
are a leading
global manufacturer and
marketer of
branded consumer
foods with more
than 100 brands
in 100 countries
across six continents.
In addition to
our consolidated operations,
we have 50 percent interests in
two strategic joint ventures that manufacture
and market food products sold in more
than 120 countries
worldwide.
We
manage and
review the
financial results
of our
business under
four operating
segments: North
America Retail;
International; Pet;
and
North
America
Foodservice.
See
Management’s
Discussion
and
Analysis
of
Financial
Condition
and
Results
of
Operations
(MD&A) in Item 7 of this report for a description of our segments.
We offer
a variety of human and pet food products that provide great
taste, nutrition, convenience, and value for consumers around
the
world. Our business is focused on the following large, global categories:
●
snacks, including grain, fruit and savory snacks, nutrition bars, and
frozen hot snacks;
●
ready-to-eat cereal;
●
convenient meals, including meal kits, ethnic meals, pizza, soup, side dish mixes,
frozen breakfast, and frozen entrees;
●
wholesome natural pet food;
●
refrigerated and frozen dough;
●
baking mixes and ingredients;
●
yogurt; and
●
super-premium ice cream.
Our Cereal Partners Worldwide
(CPW) joint venture with Nestlé
S.A. (Nestlé) competes in the
ready-to-eat cereal category in markets
outside North
America, and
our Häagen-Dazs
Japan, Inc.
(HDJ) joint
venture
competes in
the super-premium
ice cream
category
in
Japan. For net sales contributed
by each class of similar
products, please see Note 17
to the Consolidated Financial
Statements in Item
8 of this report.
The terms
“General Mills,”
“Company,”
“registrant,” “we,”
“us,” and
“our” mean
General Mills, Inc. was incorporated in Delaware in 1928. The terms “General Mills,” “Company,” “registrant,” “we,” “us,” and “our” mean General Mills, Inc.
and all
subsidiaries included
in
the Consolidated Financial Statements in Item 8 of this report unless the context
indicates otherwise.

Certain terms used throughout this report are defined in a glossary in Item 8 of
this report.

COMPANY OVERVIEW

We

Customers
Our
primary
customers
are a leading global manufacturer
grocery
stores,
mass
merchandisers,
membership
stores,
natural
food
chains,
drug,
dollar
and marketer of branded consumer foods sold through retail stores. We also are a leading supplier of branded and unbranded food products to the North American foodservice and commercial baking industries. We manufacture our products in 13 countries and market them in more than 100 countries. In addition to our consolidated operations, we have 50 percent interests in two strategic joint ventures that manufacture and market food products sold in more than 130 countries worldwide.

We manage and review the financial results of our business under three operating segments: U.S. Retail; International; and Convenience Stores and Foodservice. See Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) in Item 7 of this report for a description of our segments. For financial information by segment and geographic area, see Note 16 to the Consolidated Financial Statements in Item 8 of this report.

We offer a variety of food products that provide great taste, nutrition, convenience and value for consumers around the world, with a focus on five large global categories:

ready-to-eat cereal;

discount
convenient meals, including meal kits, ethnic meals, pizza, soup, side dish mixes, frozen breakfast, and frozen entrees;

snacks, including grain, fruit and savory snacks, nutrition bars, and frozen hot snacks;

yogurt; and

super-premium ice cream.

Other significant product categories include:

baking mixes and ingredients; and

refrigerated and frozen dough.

Our Cereal Partners Worldwide (CPW) joint venture with Nestlé S.A. (Nestlé) competes in the ready-to-eat cereal category in markets outside North America, and our Häagen-Dazs Japan, Inc. (HDJ) joint venture competes in the super-premium ice cream category in Japan. For net sales contributed by each class of similar products, see Note 16 to the Consolidated Financial Statements in Item 8 of this report.

Customers. Our primary customers are grocery stores, mass merchandisers, membership stores, natural food chains, drug, dollar and discount chains, e-commerce grocery providers,

retailers, commercial
and noncommercial
foodservice distributors
and operators,
restaurants, convenience
stores,
and convenience
pet
specialty
stores.
We
generally
sell
to
these
customers
through
our
direct
sales
force.
We
use
broker
and
distribution
arrangements for certain products and to serve certain types
of customers.customers and certain markets. For further
information on our customer
credit
and
product
return practices,
please
refer
to Note
2
to the
Consolidated
Financial Statements
in
Item 8
of this
report.
During
fiscal 2016, Wal-Mart Stores, 2022, Walmart
Inc. and its

affiliates (Wal-Mart) (Walmart)

accounted for 20 percent of our consolidated
net sales and 3028 percent of net sales
of our U.S.
North America
Retail segment.
No other
customer accounted
for 10
percent or
more of
our consolidated
net sales.
For further
information on significant customers, please refer to Note 78 to the Consolidated
Financial Statements in Item 8 of this report.

Competition.

Competition
The consumer foods industry is
human
and
pet
food
categories
are
highly
competitive,
with
numerous
manufacturers
of
varying
sizes in
the
United
States and
throughout the
world. The food categories
in which
we participate
also are
very competitive.
Our principal
competitors in
these categories all
are manufacturers, as
well as retailers with
their own branded
products. Competitors market
and sell their products
through brick-and-
mortar stores
and e-commerce.
All our
principal competitors
have substantial
financial, marketing,
and other
resources. Competition
in
our
product
categories
is
based
on
product
innovation,
product
quality,
price,
brand
recognition
and
loyalty,
effectiveness
of
marketing,
promotional
activity,
convenient
ordering
and
delivery
to
the consumer,
and the
ability
to
identify
and
satisfy
consumer
preferences.
Our
principal
strategies
for
competing
in
each
of
our
segments
include
unique
consumer
insights,
effective
customer
relationships, superior
product categories is based on quality,
innovative advertising,
product promotion,
product innovation product quality, price, brand recognition and loyalty, effectiveness of marketing, promotional activity, and the ability to identify and satisfy consumer preferences. Our principal strategies for competing in each of our segments include unique consumer insights, effective customer relationships, superior product quality, innovative advertising, product promotion, product innovation
aligned with consumers’ consumers
’
needs,
an efficient
supply chain, and
price. In most
product categories, we
compete not only
with other widely
advertised, branded
products,
but also
with regional
brands and
with generic
and private
label products
that are
generally sold
at lower
prices. Internationally,
we
compete with both multi-national and local manufacturers, and each
country includes a unique group of competitors.

5
Raw materials, ingredients, and packaging.packaging
The
principal
raw
materials that
we
use
are grains (wheat,
(wheat, oats,
and
corn),
dairy
products,
sugar, dairy products, vegetables,
fruits, meats, vegetable
oils, meats,
nuts,
vegetables,
and
other
agricultural
products.
We
also
use
substantial
quantities
of
carton
board,
corrugated,
plastic,
and
metal
packaging
materials,
operating
supplies,
and
energy.
Most
of
these
inputs
for
our
domestic
and
Canadian
operations
are
purchased
from suppliers
in the
United States. In
our other
international operations,
inputs that
are not locally
available in
adequate supply
may
be imported
from other
countries. The
cost of
these inputs
may fluctuate
widely due
to external
conditions such
as weather,
climate
change,
product
scarcity,
limited
sources
of
supply,
commodity
market
fluctuations,
currency
fluctuations,
trade
tariffs,
pandemics
(including the
COVID-19 pandemic),
war, and
changes in
governmental agricultural
and energy
policies and
regulations. We have some long-term fixed price contracts, but the majority of our inputs are purchased on the open market. We
believe
that we
will be
able to
obtain an
adequate supply
of needed
inputs. Occasionally
and where
possible, we
make advance
purchases of
items
significant
to our
business in
order
to ensure
continuity
of operations.
Our objective
is to
procure
materials
meeting
both our
quality standards
and our
production
needs at
price levels
that allow
a targeted
profit margin.
Since these
inputs generally
represent
the largest
variable cost in
manufacturing our products,
to the extent
possible, we often
manage the risk
associated with adverse
price
movements for some inputs using a variety of risk
management strategies. We also
have a grain merchandising operation that provides
us efficient access
to, and more informed
knowledge of, various
commodity markets, principally
wheat and oats. This
operation holds
physical inventories
that are
carried at fair marketnet
realizable value
and uses
derivatives to
manage its net
inventory position
and minimize
its
market exposures.

RESEARCH AND DEVELOPMENT

Our research and development resources are focused on new product development, product improvement, process design and improvement, packaging, and exploratory research in new business and technology areas. Research and development expenditures were $222 million in fiscal 2016, $229 million in fiscal 2015, and $244 million in fiscal 2014.

TRADEMARKS AND PATENTS

Our
products
are
marketed
under
a
variety
of
valuable
trademarks.
Some
of
the
more
important
trademarks
used
in
our
global
operations (set
(set
forth
in
italics
in
this
report)
include
Annie’s
,
Betty
Crocker
,
Bisquick
,
Blue
Buffalo
,
Blue
Basics
,
Blue
Freedom
,
Bugles
,
Cascadian
Farm
,
Cheerios
,
Chex
,
Cinnamon Toast
Crunch
,
Cocoa Puffs
,
Cookie Crisp
,
EPIC
,
Fiber One
,
Food Should Taste
Good
,
Fruit
by
the
Foot
,
Fruit
Gushers
,
Fruit
Roll-Ups
,Gardetto’s
Gardetto's
,Go-Gurt
Gold
Medal
,Gold Medal
Golden
Grahams
,Golden Grahams,
Häagen-Dazs
,Helpers
Kitano
,Jeno’s
Kix
,Jus-Rol,Kitano,Kix,La Salteña,
Lärabar
,
Latina
,Liberté
Lucky
Charms
,Lucky Charms,
Muir Glen
,
Nature
Valley
,
Nudges,
Oatmeal
Crisp
,
Old
El
Paso
,
Pillsbury
,
Progresso
,
Raisin
Nut
Bran
,
Total
,
Top
Chews
Naturals,
Totino’s
,
Trix
,
True
Chews,
Wanchai
Ferry
,
Wheaties
,
Wilderness
,
and
Yoki, andYoplait
.
We
protect
these
marks as
appropriate through
registrations in
the United
States and
other jurisdictions.
Depending on
the jurisdiction,
trademarks are
generally valid
as long
as they
are in
use or
their registrations
are properly
maintained and
they have
not been
found to have
become
generic. Registrations of trademarks can also generally be renewed indefinitely
for as long as the trademarks are in use.

Some
of
our
products
are
marketed
under
or
in
combination
with
trademarks
that
have
been
licensed
from
others including
for
both
long-
standing
products
(e.g.,
Reese’s
Puffs
for
cereal,Hershey’s for a variety of products,
Green
Giant
for vegetables
in certain
countries, andCinnabon
Yoplait
and related
brands for refrigerated dough, frozen pastries,
fresh dairy
in the
United States
and baking products. Our Canada),
and shorter
term promotional
products (e.g.,
fruit snacks business uses a variety of licensed trademarks, includingMott’s,Minions,Sunkist,Scooby Doo,Batman,Tom and Jerry,Hello Kitty,Thomas the Tank Engine, and
sold under
various Warner Bros. and Nickelodeon characters. Our yogurt business uses a variety of licensed trademarks, including various Disney, Marvel, Warner Bros., and Nickelodeon characters.

third

party
equities).
Our cereal
trademarks
are licensed
to CPW
and
may be
used in
association
with the
Nestlé
trademark.
Nestlé licenses
certain
of its
trademarks
to
CPW,
including
the
Nestlé
and
Uncle
Toby’s
trademarks.
The
Häagen-Dazs
trademark
is
licensed
royalty-free
and
exclusively
to
Nestlé
and
authorized
sublicensees
for
ice
cream
and
other
frozen dessert
products
in
the
United
States and
Canada.
The
Häagen-Dazs
trademark is licensed royalty-free and exclusively to Nestlé for ice cream and other frozen dessert products in the United States and Canada. TheHäagen-Dazs trademark is
also licensed
to HDJ. HDJ
in Japan.
The J. M. Smucker Company holds
Pillsbury
brand and
the
Pillsbury Doughboy
character are
subject
to an exclusive, royalty-free
license that was granted to use thePillsbury brand
a third party and thePillsbury Doughboy character its successors
in the dessert mix and
baking mix categories in
the United States and under limited circumstances in Canada and Mexico.

TheYoplait trademark

We
continue
our
focus
on
developing
and
marketing
innovative,
proprietary
products,
many
of
which
use
proprietary
expertise,
recipes and other related trademarks are owned by Yoplait Marques SNC, an entity in which we own a 50 percent interest. These marks are licensed exclusively to Yoplait SAS, an entity in which we own a 51 percent interest. Yoplait SAS licenses these trademarks to its franchisees. TheLiberté trademark and other related trademarks are owned by Liberté Marques Sàrl, an entity in which we own a 50 percent interest.

formulations. We continue our focus on developing and marketing innovative, proprietary products. We

consider the collective rights under our various patents, which
expire from time to time, a valuable asset,
but we do not believe that our businesses are materially dependent upon any
single patent or group of related patents.

SEASONALITY

In
general,
demand
for
our
products
is
evenly
balanced
throughout
the
year.
However,
within
our U.S.
North
America
Retail
segment
demand
for
refrigerated
dough,
frozen
baked
goods,
and
baking
products
is
stronger
in
the
fourth
calendar
quarter.
Demand
for
Progresso
soup is higher
during the
fall and winter
months. Internationally,Within
our International
segment, demand
for
Häagen-Dazs
ice cream is
higher during
the summer
months and
demand for
baking mix and dough products
increases during
winter months.
Due to
the offsetting
impact of
these
demand
trends,
as well
as the
different
seasons
in
the
northern
and
southern
hemispheres,
our
International segment
segment’s
net
sales are
generally evenly balanced throughout the year.

BACKLOG

Orders are generally filled within a few days of receipt and are subject to cancellation at any time prior to shipment. The backlog of any unfilled orders as of May 29, 2016, was not material.

WORKING CAPITAL

A description of our working capital is included in the Liquidity section of MD&A in Item 7 of this report. Our product return practices are described in Note 2 to the Consolidated Financial Statements in Item 8 of this report.

EMPLOYEES

As of May 29, 2016, we had approximately 39,000 full- and part-time employees.

FOOD

QUALITY AND SAFETY REGULATION

The
manufacture
and
sale
of consumer
human
and
pet
food
products
is
highly
regulated.
In
the
United
States,
our
activities
are
subject
to
regulation by
various federal
government agencies,
including the
Food and
Drug Administration,
Department of
Agriculture, Federal
Trade
Commission,
Department
of
Commerce,
Occupational
Safety
and
Health
Administration,
and
Environmental
Protection
Agency,
as
well
as
various
federal,
state,
and
local
agencies
relating
to
the
production,
packaging,
labelling,
marketing,
storage,
6
distribution, quality,
and safety of Commerce, food
and Environmental Protection Agency, as well as various statepet products and local agencies.
the health and safety
of our employees.
Our business is also
regulated by
similar agencies outside of the United States.

ENVIRONMENTAL
MATTERS

As
of
May
29, 2016,
2022,
we
were
involved
with
two active cleanup sites
response
actions
associated
with
the
alleged
or
threatened
release
of
hazardous
substances or wastes located in Minneapolis, Minnesota and Moonachie,
New Jersey. These matters involve several different actions, including administrative proceedings commenced by regulatory agencies
Our
operations
are
subject
to
the
Clean
Air
Act,
Clean
Water
Act,
Resource
Conservation
and demand letters by regulatory agencies
Recovery
Act,
Comprehensive
Environmental
Response,
Compensation,
and private parties.

Our operations are subject to

Liability
Act,
and
the Clean Air
Federal
Insecticide,
Fungicide,
and
Rodenticide
Act, Clean Water Act, Resource Conservation
and Recovery Act, Comprehensive Environmental Response, Compensation, and Liability Act, and the Federal Insecticide, Fungicide, and Rodenticide Act, and
all
similar state, local, and foreign environmental laws and regulations applicable
to the jurisdictions in which we operate.

Based on current
facts and circumstances,
we believe that
neither the
results of our
environmental proceedings
nor our compliance
in
general
with
environmental
laws
or
regulations
will
have
a
material
adverse
effect
upon
our
capital
expenditures,
earnings,
or
competitive position.
HUMAN CAPITAL MANAGEMENT
Recruiting, developing, engaging, and protecting our
workforce is critical to executing our strategy and achieving
business success. As
of
May
29,
2022,
we
had
approximately
32,500
employees
around
the
globe,
with
approximately
15,000
in
the
U.S.
and
approximately 17,500
located in generalour
markets outside
of the U.S.
Our workforce
is divided
between approximately
12,500 employees
dedicated to the production of our various products and approximately
20,000 non-production employees.
The
efficient
production
of
high-quality
products
and
successful
execution
of
our
strategy
requires
a
talented,
skilled,
and
engaged
team of employees. We
work to equip our employees with environmental laws
critical skills and expand their contributions
over time by providing a range
of training and career
development opportunities, including
hands-on experiences via
challenging work assignments and
job rotations,
coaching
and mentoring
opportunities, and
training programs.
To
foster employee
engagement and
commitment, we
follow a
robust
process
to
listen
to
employees,
take
action,
and
measure
our
progress
with
on-going
employee
conversations,
transparent
communications, and employee engagement surveys.
We
believe that
fostering a culture
of inclusion and
belonging strengthens
our ability to
recruit talent and
allows all of
our employees
to thrive
and succeed.
We
actively cultivate
a culture
that acknowledges,
respects, and
values all
dimensions of
diversity –
including
gender, race,
sexual orientation, ability,
backgrounds, and
beliefs. Ensuring
diversity of input
and perspectives
is core to
our business
strategy,
and
we
are
committed
to
recruiting,
retaining,
developing,
and
advancing
a
workforce
that
reflects
the
diversity
of
the
consumers we
serve. This
commitment starts
with our
company leadership
where women
represent approximately
42 percent
of our
officer
and
director
population,
and
approximately
19
percent
of
our
officers
and
directors
are
racially
or
ethnically
diverse.
We
embed
our culture of inclusion and belonging
into our day-to-day ways of working
through a number of programs to foster
discussion,
build empathy, and
increase understanding.
We
are
committed
to
maintaining
a
safe
and
secure
workplace
for
our
employees.
We
set
specific
safety
standards
to
identify
and
manage critical risks.
We
use global safety
management systems and
employee training to
ensure consistent implementation
of safety
protocols and
accurate measurement
and tracking of
incidents. To
provide a safe
and secure working
environment for our
employees,
we prohibit workplace
discrimination, and
we do not
tolerate abusive conduct
or regulations will have a material adverse effect upon harassment. Our
attention to the
health and safety
of
our capital expenditures, earnings, or competitive position.

workforce extends to the workers and communities in our supply chain.

We believe that respect
for human rights is fundamental to
our strategy and to our commitment to ethical business conduct.
INFORMATION ABOUT
OUR EXECUTIVE OFFICERS

The section below provides information regarding our executive officers
as of June 30, 2016:

Richard C. Allendorf29, 2022.

Jodi
Benson
,
age
57,
is
Chief
Innovation,
Technology
and
Quality
Officer.
Ms.
Benson
joined
General
Mills
in
2001
from
The
Pillsbury Company.
She held a
variety of positions
before becoming the
leader of our
One Global Dairy
Platform from 2011
to 2016.
She
was
named
Vice
President
for
our
International
business
segment
from
2016
to
2017,
and
Vice
President
of
the
Global
Innovation,
Technology,
and Quality
Capabilities
Group
from
2017 to
July 201
8.
She was
named
to her
current
position
in August
2018.
Kofi A. Bruce
, age 55,52, is Senior Vice President, General Counsel, and Secretary.Chief Financial
Officer. Mr. Allendorf
Bruce joined General Mills in 2001 2009 as
Vice President,
Treasurer after serving
in
a
variety
of
senior
management
positions
with
Ecolab
and
Ford
Motor
Company.
He
served
as
Treasurer
until
2010
when
he
was
named Vice
President, Finance for
Yoplait.
Mr. Bruce
reassumed his role
as Vice
President, Treasurer
from The Pillsbury Company.2012 until
2014 when
he
was named
Vice
President, Finance
for Convenience
Stores &
Foodservice. He
was named
Vice
President, Controller
in 2017,
Vice
President, Financial Operations in September 2019, and to his present position
in February 2020.
7
Paul J. Gallagher
,
age
54, is Chief
Supply Chain Officer.
Mr.
Gallagher joined General
Mills in April
2019 as Vice
President, North
America Supply Chain from Diageo plc. He began
his career at Diageo where he spent 25 years serving in a variety
of leadership roles
in manufacturing,
procurement, planning,
customer service,
and engineering
before becoming
President, North
America Supply
from
2013 to March 2019. He was promotednamed to his current position in July 2021.
Jeffrey L.
Harmening
, age
55, is
Chairman of
the Board
and Chief
Executive Officer.
Mr.
Harmening joined
General Mills
in 1994
and
served
in
various
marketing
roles
in
the
Betty
Crocker,
Yoplait,
and
Big
G
cereal
divisions.
He
was
named
Vice
President,
Marketing
for
CPW
in
2003
and
Vice
President
of
the
Big
G
cereal
division
in
2007.
In
2011,
he
was
promoted
to
Senior
Vice
President
for
the
Big
G
cereal
division.
Mr.
Harmening
was
appointed
Senior
Vice
President,
Chief
Executive
Officer
of
CPW
in
2012. Mr.
Harmening returned from CPW
in 2014 and was
named Executive Vice
President, Deputy General Counsel Chief Operating Officer,
U.S. Retail. He
became
President,
Chief
Operating
Officer
in 2010, first overseeing the legal affairs 2016.
He
was named
Chief
Executive
Officer
in
2017
and
Chairman
of the
Board
in
January 2018. Mr. Harmening
is a director of The Toro
Company.
Dana
M.
McNabb
,
age
46,
is
Chief
Strategy
&
Growth
Officer.
Ms.
McNabb
joined
General
Mills
in
1999
and
held
a
variety
of
marketing roles
in Cereal,
Snacks, Meals,
and New
Products before
becoming Vice
President, Marketing
for CPW
in 2011
and Vice
President, Marketing
for the Circle
of Champions
Business Unit
in 2015. She
became President,
U.S. Cereal
Operating Unit
in 2016,
Group President, Europe & Australia in January 2020, and was named to her present
position in July 2021.
Jaime
Montemayor
,
age
58,
is
Chief
Digital
and
Technology
Officer.
He
spent
21
years
at
PepsiCo,
Inc.,
serving
in
roles
of
increasing
responsibility,
including
most
recently
as
Senior
Vice
President
and
Chief
Information
Officer
of
PepsiCo’s
Americas
Foods segment
from 2013
to 2015, and
Senior Vice
President and
Chief Information
Officer,
Digital Innovation,
Data and Analytics,
PepsiCo from
2015 to
2016. Mr.
Montemayor served
as Chief
Technology
Officer of
7-Eleven Inc.
in 2017.
He assumed
his current
role in February 2020 after founding and operating a digital technology
consulting company from 2017 until January 2020.
Jon J. Nudi
, age 52,
is Group President,
North America
Retail. Mr.
Nudi joined
General Mills in
1993 as
a Sales Representative
and
held a
variety of
roles in
Consumer Foods
Sales. In
2005, he
moved into
marketing roles
in the
Meals division
and was
elected Vice
President
in
2007.
Mr.
Nudi
was
named
Vice
President;
President,
Snacks,
in
2010,
Senior
Vice
President,
President,
Europe/Australasia in 2014, and Senior Vice
President; President, U.S. Retail segment and Consumer Food Sales and then, in August 2012, overseeing the legal affairs of the International segment and Global Ethics and Compliance.2016. He was named to his present position in February 2015. Prior 2017.
Shawn
P.
O’Grady
,
age
58,
is
Group
President,
North
America
Foodservice.
Mr.
O’Grady
joined
General
Mills
in
1990
and
held
several
marketing
roles
in
the
Snacks,
Meals,
and
Big
G
cereal
divisions.
He
was
promoted
to joining General Mills, he practiced law with the Shearman
Vice
President
in
1998
and Sterling and Mackall, Crounse and Moore law firms. He was in finance with General Electric prior to his legal career.

John R. Church, age 50, is Executive Vice President, Supply Chain. Mr. Church joined General Mills in 1988 as a Product Developer in the Big G cereals division and

held various positions before becoming Vice President, Engineering in 2003. In 2005, his role was expanded to include development of the Company’s strategy for the global sourcing of raw materials and manufacturing capabilities. He was named Vice President, Supply Chain Operations in 2007, Senior Vice President, Supply Chain in 2008, and to his present position in July 2013.

Peter C. Erickson, age 55, is Executive Vice President, Innovation, Technology and Quality. Mr. Erickson joined General Mills in 1994 as part of the Colombo yogurt acquisition. He has held various positions in Research & Development and became Vice President, Innovation, Technology and Quality in 2003 and Senior Vice President, Innovation, Technology and Quality in 2006. He was named to his present position in July 2013.

Jeffrey L. Harmening, age 49, is Executive Vice President, Chief Operating Officer, U.S. Retail. Mr. Harmening joined General Mills in 1994 and served in various marketing roles in the Betty Crocker, Yoplait, and Big G cereal divisions. He was promoted to Marketing Director in 2000 and held leadership roles in Big G New Enterprises and Foodservice New Business. He was named Vice President, Marketing for CPW in 2003 and a Vice President of the Big G cereal division in 2007. In 2011, he was promoted to Senior Vice President for the Big G cereal division. Mr. Harmening was appointed Senior Vice President, Chief Executive Officer of CPW in July 2012, and he was named to his present position in May 2014. Mr. Harmening was appointed President, Chief Operating Officer effective July 1, 2016.

Donal L. Mulligan, age 55, is Executive Vice President, Chief Financial Officer. Mr. Mulligan joined General Mills in 2001 from The Pillsbury Company. He served as Vice President, Financial Operations for our International division until 2004, when he was named Vice President, Financial Operations for Operations and Technology. Mr. Mulligan was appointed Treasurer of General Mills in 2006, Senior Vice President, Financial Operations in 2007, and was elected to his present position in 2007. From 1987 to 1998, he held several international positions at PepsiCo, Inc. and YUM! Brands, Inc. Mr. Mulligan is a director of Tennant Company.

Kimberly A. Nelson, age 53, is Senior Vice President, External Relations, and President of the General Mills Foundation. Ms. Nelson joined General Mills in 1988 and has held marketing leadership roles in the Big G cereal, Snacks, and Meals divisions. She was elected Vice President, President, Snacks in 2004, Senior Vice President, President, Snacks in 2008, and Senior Vice President, External Relations in September 2010. She was named President of the General Mills Foundation in 2011.

Shawn P. O’Grady, age 52, is Senior Vice President, President, Sales & Channel Development. Mr. O’Grady joined General Mills in 1990 and held several marketing roles in the Snacks, Meals and Big G cereal divisions. He was promoted to Vice President in 1998 and held

marketing positions in the
Betty Crocker and Pillsbury USA
divisions. In 2004, he moved into
Consumer Foods Sales, becoming
Vice
President, President, U.S. Retail Sales
in 2007, and Senior Vice
President, President, Consumer Foods
Sales Division in 2010. 2010, Senior Vice
President,
President,
Sales &
Channel
Development
in
2012,
and
Group
President,
Convenience
Stores
&
Foodservice
in
2017.
He
was promotednamed to his current position in June 2012.

Christopher D. O’Leary, December 2021.

Mark A. Pallot,
age 56, 49,
is Executive Vice
President, and Chief Operating Officer, International.
Accounting Officer.
Mr. O’Leary
Pallot joined
General Mills in 1997
2007 and
served as
Director,
Financial
Reporting
until
2017,
when
he was
named
Vice
President,
Assistant
Controller.
He
was elected
to
his
present
position
in
February
2020.
Prior
to
joining
General
Mills,
Mr.
Pallot
held
accounting
and
financial
reporting
positions
at
Residential
Capital,
LLC, Metris, Inc., CIT Group Inc., and Ernst & Young,
LLP.
Bethany
Quam
,
age
51,
is
Group
President,
Pet.
Ms.
Quam
joined
General
Mills
in
1993
and
held
a
variety
of
positions
before
becoming
Vice
President,
Strategic
Planning
in
2007.
She
was
promoted
to
Vice
President,
Field
Sales,
Channels
in
2012,
Vice
President; President,
Convenience Stores
& Foodservice
in 2014,
and Senior
Vice
President; President,
Europe &
Australia in
2016,
and Group President; Europe & Australia in 2017. She was named
to her current position in October 2019.
Sean
Walker
,
age
56,
is
Group
President,
International.
Mr.
Walker
joined
General
Mills
in
1989
and
held
a
variety
of
positions
before becoming
Vice
President, President
of Latin
America in
2009. He
was named
Senior Vice
President, President
Latin America
in 2012,
Senior Vice
President, Corporate Growth.
Strategy
in 2016,
and Group
President,
Asia &
Latin America
in February
2019.
He was elected a Senior Vice President in 1999 and President of the Meals division in 2001. Mr. O’Leary was
named
to his presentcurrent position in 2006. July 2021.
Karen Wilson
Thissen
, age
55, is
General Counsel
and Secretary.
Ms. Wilson
Thissen joined
General Mills
in June
2022.
Prior to
joining
General
Mills, he she
spent
17 years
at PepsiCo, Ameriprise
Financial,
Inc., last
serving in
roles of
increasing
responsibility,
including
most
recently as Executive Vice
President and ChiefGeneral Counsel
from 2017 to June
2022, and Executive Officer of the Hostess Frito-Lay business in Canada. Mr. O’Leary is a director of Telephone and Data Systems, Inc.

Kendall J. Powell, age 62, is Chairman of the Board and Chief Executive Officer of General Mills. Mr. Powell joined General Mills in 1979 and served in a variety of positions before becoming a Vice President in 1990. He became President of the Yoplait division in 1996, President of the Big G cereal division in 1997, and Senior Vice President of General Mills in 1998. From 1999 to 2004, he served as Chief Executive Officer of CPW. He returned from CPW in 2004 and was elected Executive Vice President. Mr. Powell was elected

President and Chief Operating Officer ofDeputy General Mills with overall global operating responsibility for
Counsel from
2014 to
2017.
Before
joining Ameriprise
Financial,
Inc., she
was a
partner at
the Company law
firm of
Faegre &
Benson LLP
(now Faegre Drinker Biddle & Reath LLP).
Jacqueline
Williams-Roll
,
age
53,
is
Chief
Human
Resources
Officer.
Ms.
Williams-Roll
joined
General
Mills
in 2006, Chief Executive Officer in 2007, and Chairman of the Board in 2008. He is a director of Medtronic, Inc.

Jacqueline Williams-Roll, age 47, is Senior Vice President, Human Resources. Ms. Williams-Roll joined General Mills in

1995.
She
held
human resources
leadership roles
in Supply
Chain, Finance,
Marketing, and
Organization Effectiveness,
and she
also worked
a large
part of her career
on businesses outside of the
United States. She was
named Vice
President, Human Resources,
International in 2010,
8
and then
promoted to
Senior Vice
President, Human
Resources Operations
in September 2013.
She was
named to
her present
position in September
2014.
Prior to joining General Mills, she held sales and management roles with Jenny
Craig International.

Jerald A. Young, age 59, is Vice President, Controller. Mr. Young joined General Mills in 2001 from The Pillsbury Company. He was appointed Vice President of Finance for the Bakeries and Foodservice Division while at Pillsbury in 2000. Mr. Young was subsequently appointed Vice President Internal Audit in 2005 and Vice President, Supply Chain in 2008. He was named to his present position in August 2011.

WEBSITE ACCESS

Our
website
is www.GeneralMills.com.
https://www.generalmills.com.
We
make
available,
free
of
charge
in
the “Investors”
“Investors”
portion
of
this
website,
annual
reports
on
Form
10-K,
quarterly
reports
on
Form
10-Q,
current
reports
on
Form
8-K,
and
amendments
to
those
reports
filed
or
furnished pursuant to Section 13(a)
or 15(d) of the Securities Exchange
Act of 1934 (1934 Act) as soon
as reasonably practicable after
we
electronically
file
such
material
with,
or
furnish
it
to,
the
Securities
and
Exchange
Commission
(SEC).
All
such
filings
are
available
on the
SEC’s
website
at https://www.sec.gov.
Reports
of beneficial
ownership filed
pursuant
to Section
16(a) of
the 1934
Act are also available on our website.

ITEM 1ARisk Factors

ITEM 1A - Risk Factors
Our
business
is
subject
to
various
risks
and
uncertainties.
Any
of
the
risks
described
below
could
materially,
adversely
affect
our
business, is subject to various risksfinancial condition, and uncertainties. Anyresults of operations.
Business and Industry Risks
Global health developments and economic
uncertainty resulting from the risks described below
COVID-19 pandemic could materially
and adversely
affect our business, financial condition, and results of operations.

The food categories in which we participate are very competitive,public
health crisis
caused by
the COVID-19
pandemic and if we are not able
the measures
being taken
by governments,
businesses, including
us,
and
the
public
at
large
to compete effectively,
limit COVID-19’s
spread
have
had,
and
may
continue
to
have,
certain
negative
impacts
on our
business,
financial condition, and results of operations including, without limitation,
the following:
●
We
have experienced,
and may
continue to
experience, a
decrease in
sales of
certain of
our products
in markets
around the
world that
have been
affected by
the COVID-19
pandemic. In
particular,
sales of
our products
in the
away-from-home food
outlets across all our major markets have been
negatively affected by reduced consumer traffic
resulting from shelter-in-place
regulations
or
recommendations
and
closings
of
restaurants,
schools
and
cafeterias.
If
the COVID-19
pandemic
persists or
intensifies, its negative impacts
on our sales, particularly
in away-from-home food
outlets, could be more
prolonged and may
become more severe.
●
Deteriorating economic and political conditions
in our major markets affected
by the COVID-19 pandemic, such
as increased
unemployment,
decreases
in
disposable
income,
declines
in
consumer
confidence,
or
economic
slowdowns
or
recessions,
could cause a decrease in demand for our products.
●
We
have
experienced
minor
temporary
workforce
disruptions
in
our
supply
chain
as
a
result
of
the
COVID-19
pandemic.
Illness,
travel
restrictions,
absenteeism,
or
other
workforce
disruptions
could
negatively
affect
our
supply
chain,
manufacturing, distribution,
or other
business processes.
We
may face
additional production
disruptions in
the future, which
may place constraints on our ability to produce products in a timely manner
or may increase our costs.
●
Changes
and
volatility
in
consumer
purchasing
and
consumption
patterns
may
increase
demand
for
our
products
in
one
quarter, resulting
in decreased consumer demand for our
products in subsequent quarters. Short
term or sustained increases in
consumer demand at our retail customers may exceed our production capacity
or otherwise strain our supply chain.
●
The
failure
of
third
parties
on
which
we
rely,
including
those
third
parties
who
supply
our
ingredients,
packaging,
capital
equipment
and
other
necessary
operating
materials,
contract
manufacturers,
commercial
transport,
distributors,
contractors,
commercial banks,
and external
business partners,
to meet their
obligations to
us, or significant
disruptions in
their ability to
do so, may negatively impact our operations.
●
Significant changes in
the political conditions
in markets in which
we manufacture, sell,
or distribute our products
(including
quarantines,
import/export restrictions,
price controls,
governmental or
regulatory actions,
closures or
other restrictions
that
limit
or
close
our
operating
and
manufacturing
facilities,
restrict
our
employees’
ability
to
travel
or
perform
necessary
business functions, or otherwise prevent our third-party partners,
suppliers, or customers from sufficiently staffing
operations,
including
operations
necessary
for
the
production,
distribution,
and
sale
of
our
products)
could
adversely
impact
our
operations and results.
●
Actions we have
taken or may
take, or decisions
we have made
or may make,
as a consequence
of the COVID-19
pandemic
may result in investigations, legal claims or litigation against us.
The
categories
in
which
we
participate
are
very
competitive,
and
if
we
are
not
able
to
compete
effectively,
our
results
of
operations could be adversely
affected.

The
human
and
pet
food
categories
in
which
we
participate
are
very
competitive.
Our principal
competitors
in
these
categories all
are
manufacturers,
as
well
as
retailers
with
their
own
branded
and
private
label
products.
Competitors
market
and
sell
their
products
through
brick-and-mortar
stores
and
e-commerce.
All
of
our
principal
competitors
have
substantial
financial,
marketing,
and
other
9
resources.
In
most
product
categories,
we
compete
not
only
with
other
widely
advertised
branded
products,
but
also
with
regional
brands
and
with
generic
and
private
label
products
that
are generally
sold
at
lower prices.
Competition
in
our
product
categories
is
based on
product
innovation, product
quality,
price,
brand recognition
and loyalty,
effectiveness
of marketing,
promotional
activity,
convenient
ordering
and
delivery
to
the
consumer,
and
the
ability
to
identify
and
satisfy
consumer
preferences.
If
our
large
competitors
were
to
seek
an
advantage
through
pricing
or
promotional
changes,
we
could
choose
to
do
the
same,
which
could
adversely affect
our margins
and the ability to identify and satisfy consumer preferences. profitability.
If our large competitors were to seek an advantage through pricing or promotional changes, we could choose to
did not
do the same, which could adversely affect our margins and profitability. If we did not do the
same, our
revenues and
market share
could be
adversely affected.
Our market share
and revenue growth
could also be
adversely impacted if
we are not
successful in introducing
innovative products in
response
to
changing
consumer
demands
or by
new product
introductions
of our
competitors.
If
we
are unable
to build
and
sustain
brand
equity
by
offering
recognizably
superior
product
quality,
we
may
be
unable
to
maintain
premium
pricing
over
generic
and
private label products.

We may be unable to maintain our profit
margins in the face of a consolidating retail environment.

There has
been significant
consolidation in
the grocery industry,
resulting in
customers with increased
purchasing power.
In addition,
large
retail
customers
may
seek
to
use
their
position
to
improve
their
profitability
through
improved
efficiency,
lower
pricing,
increased
reliance
on
their
own
brand
name
products,
increased
emphasis
on
generic
and
other
economy
brands,
and
increased
promotional
programs.
If we
are
unable
to use their position to improve their profitability through improved efficiency, lower pricing, increased reliance on their own brand name products, increased emphasis on generic and other economy brands, and increased promotional programs. If we are unable to use
our
scale, marketing
expertise,
product
innovation,
knowledge
of consumers’
needs,
and category
leadership positions
to respond
to these
demands, our
profitability and
volume growth
could be
negatively impacted.
In
addition, the loss
of any large
customer for an extended length of time could
adversely affect our
sales and profits.
In fiscal 2016, Wal-Mart 2022,
Walmart
accounted for 20
percent
of our
consolidated net
sales and 30
28 percent
of net
sales of
our U.S.North
America Retail
segment.
For more
information on
significant
customers, please see Note 78 to the Consolidated Financial Statements in Item 8
of this report.

Price
changes
for
the
commodities
we
depend
on
for
raw
materials,
packaging,
and
energy
may
adversely
affect
our
profitability.
The
principal
raw
materials
that
we
use
are
commodities
that
experience
price
volatility
caused
by
external
conditions
such
as
weather,
climate
change,
product
scarcity,
limited
sources
of
supply,
commodity
market
fluctuations,
currency
fluctuations,
trade
tariffs,
pandemics
(such
as
the
COVID-19
pandemic),
war
(including
international
sanctions
imposed
on
Russia
for
its
invasion
of
Ukraine),
and
changes
in
governmental
agricultural
and
energy
policies
and
regulations.
Commodity
prices
have
become,
and
may
continue
to be,
more volatile
during
the commodities we depend on for raw materials, packaging, and energy may adversely affect our profitability.

The principal raw materials that we use are commodities that experience price volatility caused by external conditions such as weather, product scarcity, limited sources of supply, commodity market fluctuations, currency fluctuations, and changes in governmental agricultural and energy policies and regulations.COVID-19

pandemic. Commodity
price changes
may result
in unexpected
increases in
raw
material,
packaging,
energy,
and energy
transportation
costs.
If
we
are
unable
to
increase
productivity
to
offset
these
increased
costs
or
increase
our
prices,
we
may
experience
reduced
margins
and
profitability.
We
do
not
fully
hedge
against
changes
in
commodity
prices, and the risk management procedures that we do use may not always work
as we intend.

Volatility

Concerns with the safety and quality of our products could cause consumers
to
avoid certain products or ingredients.
We
could
be
adversely
affected
if
consumers
in
our
principal
markets
lose
confidence
in
the
safety
and
quality
of
certain
of
our
products
or
ingredients.
Adverse
publicity
about
these
types
of
concerns,
whether
or
not
valid,
may
discourage
consumers
from
buying our products or cause production and delivery disruptions.
We
may be
unable to
anticipate changes
in consumer
preferences and
trends,
which may
result in
decreased demand
for our
products.
Our success
depends in
part on
our ability
to anticipate
the tastes,
eating habits,
and purchasing
behaviors of
consumers and
to offer
products
that
appeal
to
their
preferences
in
channels
where
they
shop.
Consumer
preferences
and
category-level
consumption
may
change
from
time to
time and
can be
affected
by a
number
of different
trends
and other
factors.
If we
fail
to anticipate,
identify
or
react to these changes and trends, such as adapting to emerging
e-commerce channels, or to introduce new and improved products on
a
timely basis, we may
experience reduced demand
for our products, which
would in turn cause
our revenues and profitability
to suffer.
Similarly, demand
for our products could be affected by consumer concerns regarding
the health effects of ingredients such as sodium,
trans fats, genetically
modified organisms,
sugar, processed
wheat, grain-free
or legume-rich pet
food, or other
product ingredients
or
attributes.
We may be unable to grow
our market share or add products that are
in faster
growing and more profitable categories.
The
food
industry’s
growth
potential
is
constrained
by
population
growth.
Our
success
depends
in
part
on
our
ability
to
grow
our
business faster than
populations are growing
in the market value of derivativesmarkets
that we useserve.
One way to manage exposures
achieve that growth
is to fluctuationsenhance
our portfolio
by adding innovative
new products in commodity pricesfaster
growing and more
profitable categories. Our future
results will cause volatility inalso depend
on our gross marginsability
to
increase
market
share
in
our
existing
product
categories.
If
we
do
not
succeed
in
developing
innovative
products
for
new
and
existing categories, our growth and net earnings.

We utilize derivatives to manage price risk for someprofitability could be adversely

affected.
10
Our results may be negatively impacted if consumers do not maintain
their favorable perception of our principal ingredientbrands.
Maintaining and energy costs, continually
enhancing the value
of our many
iconic brands is critical
to the success of
our business. The value
of our
brands
is
based
in
large
part
on
the
degree
to
which
consumers
react
and
respond
positively
to
these
brands.
Brand
value
could
diminish
significantly
due
to
a
number
of
factors,
including grains (oats, wheat, and corn), oils (principally soybean), dairy
consumer
perception
that
we
have
acted
in
an
irresponsible
manner,
adverse
publicity
about
our
products,
our
failure
to
maintain
the
quality
of
our
products,
the
failure
of
our
products
to
deliver
consistently
positive
consumer
experiences,
concerns
about
food
safety,
or
our
products
becoming
unavailable
to
consumers.
Consumer demand
for our
products natural gas, and diesel fuel. Changesmay
also be
impacted by
changes in
the values level
of these derivatives are recorded in earnings currently, resulting in volatility in both gross margin advertising
or promotional
support. The
use of
social
and net earnings. These gains
digital
media
by
consumers,
us,
and losses are reported in cost of sales in
third
parties
increases
the
speed
and
extent
that
information
or
misinformation
and
opinions can
be shared.
Negative posts
or comments
about us,
our Consolidated Statements of Earnings and in unallocated corporate items outsidebrands,
or our segment operating results until we utilize the underlying input in our manufacturing process, at which time the gains and losses are reclassified to segment operating profit. We also record our grain inventories at fair value. We may experience volatile earnings as a result of these accounting treatments.

If we are not efficient in our production, our profitability

products on
social or
digital media
could seriously
damage
our
brands
and
reputation.
If
we
do
not
maintain
the
favorable
perception
of
our
brands,
our
business
results
could
be
negatively impacted.
Operating Risks
If
we
are
not
efficient
in
our
production,
our
profitability
could
suffer
as
a
result
of
the
highly
competitive
environment
in
which we operate.

Our future success and
earnings growth depend in
part on our ability to
be efficient in
the production and manufacture of
our products
in
highly
competitive
markets.
Gaining
additional
efficiencies
may
become
more
difficult
over
time.
Our
failure
to
reduce
costs
through
productivity
gains
or
by
eliminating
redundant
costs
resulting
from
acquisitions
or
divestitures
could
adversely
affect
our
profitability
and
weaken
our
competitive
position.
Many
productivity
initiatives
involve
complex
reorganization
of
manufacturing
facilities
and
production
lines.
Such
manufacturing
realignment
may
result
in
the
interruption
of
production,
which
may
negatively
impact
product
volume
and
margins.
We
periodically
engage
in
restructuring
and
cost
savings
initiatives
designed
to
increase
our
efficiency
and
reduce
expenses.
If
we
are currently pursuing several multi-year restructuring and cost savings
unable
to
execute
those
initiatives designed to increase our efficiency and reduce expenses. If
as
planned,
we are unable to execute those initiatives as planned, we
may
not
realize
all
or
any
of
the
anticipated benefits, which could adversely affect our business and results of
operations.

Disruption of our supply chain could adversely affect our business.

Our
ability
to
make,
move,
and
sell
products
is
critical
to
our
success.
Damage
or
disruption
to
raw
material
supplies
or
our
manufacturing
or
distribution
capabilities
due
to
weather, including any potential effects of
climate
change,
natural
disaster,
fire,
terrorism,
cyber-attack, pandemic, strikes, import
pandemics
(such as the
COVID-19 pandemic),
war, governmental
restrictions or mandates,
labor shortages, strikes,
import/export restrictions,
or
other
factors
could
impair
our
ability
to
manufacture
or
sell
our
products.
Many
of
our
product
lines
are
manufactured
at
a
single
location or
sourced from
a single
supplier.
The failure
of third
parties on which
we rely,
including those
third parties
who supply
our
ingredients,
packaging,
capital
equipment
and
other
necessary
operating
materials,
contract
manufacturers,
commercial
transport,
distributors, contractors,
and external
business partners,
to meet
their obligations
to us,
or significant
disruptions in
their ability
to do
so, may
negatively impact
our ability to manufacture or sell our products. operations.
Our suppliers’
policies and
practices can
damage our
reputation and
the quality
and safety
of our
products.
Disputes with
significant suppliers,
including
disputes regarding
pricing or
performance,
could adversely
affect
our
ability
to
supply
products
to
our
customers
and
could
materially
and
adversely
affect
our
sales,
financial
condition,
and
results
of
operations. Failure
to take
adequate steps
to mitigate
the likelihood
or potential
impact of
such events,
or to
effectively manage
such
events if they
occur, particularly
when a product
is sourced from
a single location or
supplier, could
adversely affect our
business and
results of operations, as well as require
additional resources to restore our supply chain.
Short term or location,
sustained increases in
consumer demand at
our retail customers
may exceed our
production capacity or
otherwise strain
our supply chain. Our failure to meet the demand for our products could
adversely affect our business and results of operations, as well as require additional resources to restore our supply chain.

Concerns with the safety and quality of food products could cause consumers to avoid certain food products or ingredients.

We could be adversely affected if consumers in our principal markets lose confidence in the safety and quality of certain food products or ingredients. Adverse publicity about these types of concerns, whether or not valid, may discourage consumers from buying our products or cause production and delivery disruptions.

If our food products become adulterated, misbranded, or mislabeled, we might need to recall those items and may experience product liability claims if consumers are injured.

We may need to recall some of our products if they become adulterated, misbranded, or mislabeled. A widespread product recall could result in significant losses due to the costs of a recall, the destruction of product inventory, and lost sales due to the unavailability of product for a period of time. We could also suffer losses from a significant product liability judgment against us. A significant product recall or product liability case could also result in adverse publicity, damage to our reputation, and a loss of consumer confidence in our food products, which could have an adverse effect on our business results and the value of our brands.

We may be unable to anticipate changes in consumer preferences and trends, which may result in decreased demand for our products.

Our success depends in part on our ability to anticipate the tastes and eating habits of consumers and to offer products that appeal to their preferences. Consumer preferences and category-level consumption may change from time to time and can be affected by a number of different trends and other factors. If we fail to anticipate, identify or react to these changes and trends, or to introduce new and improved products on a timely basis, we may experience reduced demand for our products, which would in turn cause our revenues and profitability to suffer. Similarly, demand for our products could be affected by consumer concerns regarding the health effects of ingredients such as sodium, trans fats, genetically modified organisms, sugar, processed wheat, or other product ingredients or attributes.

We may be unable to grow our market share or add products that are in faster growing and more profitable categories.

The food industry’s growth potential is constrained by population growth. Our success depends in part on our ability to grow our business faster than populations are growing in the markets that we serve. One way to achieve that growth is to enhance our portfolio by adding innovative new products in faster growing and more profitable categories. Our future results will also depend on our ability to increase market share in our existing product categories. If we do not succeed in developing innovative products for new and existing categories, our growth may slow, which could adversely affect our profitability.

Economic downturns could limit consumer demand for our products.

The willingness of consumers to purchase our products depends in part on local economic conditions. In periods of economic uncertainty, consumers may purchase more generic, private label, and other economy brands and may forego certain purchases altogether. In those circumstances, we could experience a reduction in sales of higher margin products or a shift in our product mix to lower margin offerings. In addition, as a result of economic conditions or competitive actions, we may be unable to raise our prices sufficiently to protect margins. Consumers may also reduce the amount of food that they consume away from home at customers that purchase products from our Convenience Stores and Foodservice segment. Any of these events could have an adverse effect on our results of operations.

Our results may be negatively impacted if consumers do not maintain their favorable perception of our brands.

Maintaining and continually enhancing the value of our many iconic brands is critical to the success of our business. The value of our brands is based in large part on the degree to which consumers react and respond positively to these brands. Brand value could diminish significantly due to a number of factors, including consumer perception that we have acted in an irresponsible manner, adverse publicity about our products, our failure to maintain the quality of our products, the failure of our products to deliver consistently positive consumer experiences, concerns about food safety, or our products becoming unavailable to consumers. Consumer demand for our products may also be impacted by changes in the level of advertising or promotional support. The growing use of social and digital media by consumers, us, and third parties increases the speed and extent that information or misinformation and opinions can be shared. Negative posts or comments about us, our brands, or our products on social or digital media could seriously damage our brands and reputation. If we do not maintain the favorable perception of our brands, our business results could be negatively impacted.

Our international operations are subject to political and economic
risks.

In fiscal 2016, 28
2022, 23
percent of
our consolidated
net sales
were generated
outside of
the United
States. We
are accordingly
subject to
a
number of risks relating to doing business internationally,
any of which could significantly harm our business. These risks include:

●
political and economic instability;
●
exchange controls and currency exchange rates;
●
tariffs on products and ingredients that we import and export;
●
nationalization or government control of operations;
●
compliance with anti-corruption regulations;
●
foreign tax treaties and policies; and
●
restriction on the transfer of funds to and from foreign countries, including
potentially negative tax consequences.

Our financial performance
on a U.S. dollar
denominated basis is subject
to fluctuations in currency
exchange rates. These fluctuations
could cause material
variations in our results
of operations. Our principal
exposures are to the
Australian dollar,
Brazilian real, British
11
pound sterling,
Canadian dollar,
Chinese renminbi,
euro, Japanese
yen, Mexican
peso, and
Swiss franc.
From time
to time,
we enter
into
agreements
that
are
intended
to
reduce
the
effects
of
our
exposure
to
currency
fluctuations,
but
these
agreements
may
not
be
effective in significantly reducing our exposure.

A
strengthening
in
the
U.S.
dollar
relative
to
other
currencies
in
the
countries
in
which
we
operate
would
negatively
affect
our
reported results of operations and financial results due to currency translation losses and
currency transaction losses.
Our business operations could be disrupted if our information technology
systems fail to perform adequately or are breached.
Information
technology
serves
an
important
role
in
the
efficient
and
effective
operation
of
our
business.
We
rely
on
information
technology networks
and systems, including
the internet, to
process, transmit,
and store electronic
information to
manage a variety
of
business processes and
to comply with
regulatory,
legal, and tax requirements.
Our information technology
systems and infrastructure
are
critical
to
effectively
manage
our
key
business
processes
including
digital
marketing,
order
entry
and
fulfillment,
supply
chain
management,
finance,
administration,
and
other
business
processes.
These
technologies
enable
internal
and
external
communication
among
our
locations, employees,
suppliers,
customers,
and others
and
include the
receipt and
storage of
personal information
about
our employees,
consumers, and
proprietary business
information. Our
information technology
systems, some
of which
are dependent
on services
provided
by third
parties, may
be vulnerable
to damage,
interruption,
or shutdown
due to
any number
of causes
such as
catastrophic events,
natural disasters, fires,
power outages, systems
failures, telecommunications
failures, security breaches,
computer
viruses, hackers, employee error
or malfeasance, and other
causes. Increased cyber-security threats
pose a potential risk to
the security
and
viability
of
our
information
technology
systems,
as
well
as
the
confidentiality,
integrity,
and
availability
of
the
data
stored
on
those systems. The
failure of our
information technology
systems to perform
as we anticipate
could disrupt
our business and
result in
transaction
errors,
processing
inefficiencies,
data
loss,
legal
claims
or
proceedings,
regulatory
penalties,
and
the
loss
of
sales
and
customers. Any
interruption of
our information
technology systems
could have
operational, reputational,
legal, and
financial impacts
that may have a material adverse effect on our business.
Our failure to successfully integrate acquisitions into our
existing operations could adversely affect our financial results.
From
time
to
time,
we
evaluate
potential
acquisitions
or
joint
ventures
that
would
further
our
strategic
objectives.
Our
success
depends, in part,
upon our ability
to integrate acquired
and existing operations.
If we are
unable to successfully
integrate acquisitions,
our financial
results could
suffer.
Additional potential
risks associated
with acquisitions
include
additional debt
leverage, the
loss of
key
employees
and
customers
of
the
acquired
business,
the
assumption
of
unknown
liabilities,
the
inherent
risk
associated
with
entering a geographic area or line of business in which we have
no or limited prior experience, failure to achieve anticipated synergies,
and the impairment of goodwill or other acquisition-related intangible assets.
Legal and Regulatory Risks
If
our
products
become
adulterated,
misbranded,
or
mislabeled,
we
might
need
to
recall
those
items
and
may
experience
product liability claims if
consumers or their pets are injured.
We may need
to recall some of our products if they become adulterated,
misbranded, or mislabeled. A widespread product recall could
result in
significant losses
due to
the costs
of a
recall, the
destruction of
product inventory,
and lost
sales due
to the
unavailability of
product for a period of time.
We could
also suffer losses from a
significant product liability judgment
against us. A significant product
recall or
product liability
case could
also result
in adverse
publicity,
damage to
our reputation,
and a
loss of
consumer confidence
in
our products, which could have an adverse effect on our business results and
the value of our brands.
New regulations or regulatory-based claims could adversely
affect our business.

Our facilities and
products are subject
to many laws and
regulations administered by
the United States Department
of Agriculture, the
Federal Food and Drug
Administration, the Occupational
Safety and Health Administration,
and other federal, state, local,
and foreign
governmental agencies
relating to
the production,
packaging, labelling,
storage, distribution,
quality,
and safety
of food
products and
the
health
and
safety
of
our
employees.
Our
failure
to
comply
with
such
laws
and
regulations
could
subject
us
to
lawsuits,
administrative
penalties,
and safety civil
remedies,
including fines,
injunctions,
and recalls
of our employees. Our failure to

comply with such laws and regulations could subject us to lawsuits, administrative penalties, and civil remedies, including fines, injunctions, and recalls of our

products.
We
advertise our
products and
could be
the target
of claims
relating to
alleged false
or deceptive
advertising
under federal,
state, and
foreign laws
and regulations.
We may also be
subject to new laws or regulations restricting our right to advertise our
products, including proposals restrictions on the audience
to limit advertising to children.whom
products are
marketed. Changes
in laws
or regulations
that impose
additional regulatory
requirements on
us could
increase
our cost of doing business or restrict our actions, causing our results of operations
to be adversely affected.

We are subject

Significant COVID-19
related changes
in the
political conditions
in markets
in which
we manufacture,
sell or
distribute our
products
(including quarantines, import/export
restrictions, price controls, governmental
or regulatory actions, closures
or other restrictions that
limit
or
close
our
operating
and
manufacturing
facilities,
restrict
our
employees’
ability
to various federal, state, local,
travel
or
perform
necessary
business
functions
or
otherwise
prevent
our
third-party
partners,
suppliers,
or
customers
from
sufficiently
staffing
operations,
including
12
operations
necessary
for
the
production,
distribution,
sale,
and
support
of
our
products)
could
adversely
impact
our operations
and results.
We
are
subject
to
various
federal,
state,
local,
and
foreign
environmental
laws
and
regulations.
Our
failure
to
comply
with
environmental laws and regulations could subject us
to lawsuits, administrative penalties, and civil remedies.
We are currently
party to
a variety of
environmental remediation obligations.
Due to regulatory
complexities, uncertainties inherent
in litigation, and
the risk of
unidentified contaminants
on current and
former properties of
ours, the potential
exists for remediation,
liability,
indemnification, and
compliance
costs
to
differ
from
our
estimates.
We
cannot
guarantee
that
our
costs
in
relation
to
these
matters,
or
compliance
with
environmental
laws
in
general,
will
not
exceed
our
established
liabilities
or
otherwise
have
an
adverse
effect
on
our
business
and
results of operations.
Climate change and other sustainability matters could adversely affect
our business.
There is
growing concern
that carbon
dioxide and
other greenhouse
gases in
the earth’s
atmosphere may
have an
adverse impact
on
global temperatures, weather patterns, and the frequency
and severity of extreme weather and natural disasters.
If such climate change
has a negative effect on agricultural productivity,
we may experience decreased availability and higher pricing for certain commodities
that are necessary
for our
products. Increased
frequency or
severity of
extreme weather
could also impair
our production
capabilities,
disrupt our
supply chain,
impact demand
for our
products, and
increase our
insurance and
other operating
costs.
Increasing concern
over
climate
change
or
other
sustainability
issues
also
may
adversely
impact
demand
for
our
products
due
to
changes
in
consumer
preferences or
negative consumer
reaction to
our commitments
and actions
to differ fromaddress
these issues.
We
may also
become subject
to
additional
legal
and
regulatory
requirements
relating
to
climate
change
or
other
sustainability
issues,
including
greenhouse
gas
emission
regulations
(e.g.,
carbon
taxes),
energy
policies,
sustainability
initiatives
(e.g.,
single-use
plastic
limits),
and
disclosure
obligations.
If additional legal
and regulatory
requirements are
enacted and
are more aggressive
than the sustainability
measures that
we are currently undertaking to monitor our estimates. We cannot guarantee thatemissions
and improve our energy efficiency
and other sustainability goals, or if we chose
to take actions to achieve more aggressive goals, we may experience significant
increases in our costs in relationof operations.
We
have announced goals
and commitments to these matters,
reduce our carbon footprint.
If we fail to
achieve or compliance with environmental laws in general, will not exceed our established liabilities or otherwise have an adverse effectimproperly
report on our businessprogress
toward
achieving
our
carbon
emissions
reduction
goals
and
commitments,
then
the
resulting
negative
publicity
could
harm
our
reputation and results adversely affect demand for our products.
Financial and Economic Risks
Volatility
in
the
market
value
of
derivatives
we
use
to
manage
exposures
to
fluctuations
in
commodity
prices
will
cause
volatility in our gross margins and net earnings.
We
utilize derivatives
to manage
price risk
for some
of operations.

our

principal ingredient
and energy
costs, including
grains (oats,
wheat, and
corn), oils (principally soybean),
dairy products, natural gas, and diesel
fuel. Changes in the values
of these derivatives are recorded
in
earnings currently,
resulting in volatility
in both gross
margin and
net earnings. These
gains and losses
are reported
in cost of
sales in
our Consolidated
Statements of Earnings
and in unallocated
corporate items outside
our segment
operating results
until we utilize
the
underlying input in our manufacturing
process, at which time the gains
and losses are reclassified to segment
operating profit. We have
also
record our grain inventories at net realizable value. We
may experience volatile earnings as a substantial result of these accounting treatments.
Economic downturns could limit consumer demand for our products.
The
willingness
of
consumers
to
purchase
our
products
depends
in
part
on
local
economic
conditions.
In
periods
of
economic
uncertainty,
consumers
may
purchase
more
generic,
private
label,
and
other
economy
brands
and
may
forego
certain
purchases
altogether.
In those circumstances,
we could experience
a reduction in sales
of higher margin
products or a shift
in our product mix
to
lower margin
offerings.
In addition,
as a
result of
economic conditions
or competitive
actions, we
may be
unable to
raise our
prices
sufficiently to
protect margins.
Consumers may
also reduce the
amount of indebtedness, which food
that they consume
away from home
at customers that
purchase products
from our
North America
Foodservice segment.
Any of
these events
could have
an adverse
effect on
our results
of
operations.
13
We
have
a
substantial
amount
of
indebtedness,
which
could
limit
financing
and
other
options
and
in
some
cases
adversely
affect our ability to pay dividends.

As
of
May
29, 2016,
2022,
we
had
total
debt redeemable
and
noncontrolling
interests and noncontrolling interests
of $9.6
$11.9
billion.
The
agreements
under
which
we
have
issued
indebtedness
do not
prevent us
from
incurring
additional unsecured
indebtedness
in the
future.
Our level
of indebtedness
may
limit
our:

●
ability to
obtain additional
financing for
working capital,
capital expenditures,
or general
corporate
purposes, particularly
if
the ratings assigned to our debt securities by rating organizations
were revised downward; and
●
flexibility to
adjust to
changing business
and market
conditions and
may make
us more
vulnerable to
a downturn
in general
economic conditions.

There are
various financial
covenants and
other restrictions
in our
debt instruments
and noncontrolling
interests. If
we fail to
comply
with any of
these requirements, the
related indebtedness, (and
and other unrelated indebtedness)
indebtedness, could
become due and
payable prior
to its
stated maturity and our ability to obtain additional or alternative financing
may also be adversely affected.

Our ability
to make
scheduled payments
on or
to refinance
our debt
and other
obligations will
depend on
our operating
and financial
performance,
which
in
turn
is
subject
to
prevailing
economic
conditions
and
to
financial,
business,
and
other
factors
beyond
our
control.

Global capital
and credit
market issues
could negatively
affect our
liquidity,
increase our
costs of
borrowing, and
disrupt the
operations of our suppliers
and customers.

We
depend
on
stable,
liquid,
and
well-functioning
capital
and
credit
markets
to
fund
our
operations.
Although
we
believe
that
our
operating cash flows,
financial assets, access
to capital and
credit markets, and
revolving credit agreements
will permit us to
meet our
financing
needs
for
the
foreseeable
future,
there
can
be
no
assurance
that
future
volatility
or
disruption
in
the
capital
and
credit
markets will not impair our liquidity or
increase our costs of borrowing. We
also utilize interest rate derivatives to
reduce the volatility
of our financing
costs. If we are
not effective in
hedging this volatility,
we may experience
an increase in
our costs of borrowing.
Our
business
could
also
be
negatively
impacted
if
our
suppliers
or
customers
experience
disruptions
resulting
from
tighter
capital
and
credit markets or a slowdown in the general economy.

We
may not have
access to preferred sources
of liquidity when
needed or on
terms we find acceptable,
and our borrowing
costs could
increase.
An
economic
or
credit
crisis
could
occur
and
impair
credit
availability
and
our
ability
to
raise
capital
when
needed.
A
disruption in
the financial
markets may have
a negative
effect on
our derivative
counterparties and
could impair
our banking
or other
business partners, on whom we rely for access to capital and as counterparties to our derivative
contracts.
From
time
to
time,
we
issue
variable
rate
securities
based
on
London
Interbank
Offered
Rate
(LIBOR)
and
enter
into
interest
rate
swaps that
contain a
variable element
based on
LIBOR. The
United
Kingdom Financial
Conduct
Authority intends
to phase
out the
LIBOR rates
associated with
our outstanding
variable rate
securities and
interest rate
swaps by
June 2023.
The U.S.
Federal Reserve
has selected the
Secured Overnight Funding
Rate (SOFR) as the
preferred alternate rate
to LIBOR. We
are planning for this
transition
and
will
amend
any
contracts
to
accommodate
the
SOFR
rate
where
required.
We
continue
to
evaluate
the
potential
impact
of
this
transition, which remains subject to uncertainty.
Volatility
in the
securities markets,
interest
rates,
and other
factors
could substantially
increase
our defined
benefit
pension,
other postretirement benefit, and postemployment
benefit costs.

We
sponsor
a number
of defined
benefit plans
for employees
in the
United
States, Canada,
and various
foreign
locations, including
defined
benefit
pension,
retiree
health
and
welfare,
severance,
and
other
postemployment
plans.
Our
major
defined
benefit
pension
plans are
funded with
trust assets
invested in
a globally
diversified portfolio
of securities
and other
investments. Changes
in interest
rates, mortality
rates, health
care costs,
early
retirement rates,
investment
returns, and
the market
value of
plan
assets can
affect
the
funded status
of our
defined benefit pension, retiree health and welfare, severance, and other postemployment plans. Our major defined benefit pension plans are funded with trust assets invested in a globally diversified portfolio of

securities and other investments. Changes in interest rates, mortality rates, health care costs, early retirement rates, investment returns, and the market value of plan assets can affect the funded status of our defined benefit

plans and
cause volatility
in the
net periodic
benefit cost
and future
funding requirements
of the
plans.
A
significant
increase
in
our
obligations
or
future
funding
requirements
could
have
a
negative
impact
on
our
results
of
operations and cash flows from operations.

Our business operations

A
change
in
the
assumptions
regarding
the
future
performance
of
our
businesses
or
a
different
weighted-average
cost
of
capital
used
to
value
our
reporting
units
or
our
indefinite-lived
intangible
assets
could be disrupted if
negatively
affect
our information technology systems fail to perform adequately or are breached.

Information technology serves an important role in the efficient and effective operation of our business. We rely on information technology networks and systems, including the internet, to process, transmit, and store electronic information to manage a variety of business processes and to comply with regulatory, legal, and tax requirements. Our information technology systems and infrastructure are critical to effectively manage our key business processes including digital marketing, order entry and fulfillment, supply chain management, finance, administration, and other business processes. These technologies enable internal and external communication among our locations, employees, suppliers, customers, and others and include the receipt and storage of personal information about our employees, consumers, and proprietary business information. Our information technology systems, some of which are dependent on services provided by third parties, may be vulnerable to damage, interruption, or shutdown due to any number of causes such as catastrophic events, natural disasters, fires, power outages, systems failures, telecommunications failures, security breaches, computer viruses, hackers, employee error or malfeasance, and other causes. Increased cyber-security threats pose a potential risk to the security and viability of our information technology systems, as well as the confidentiality, integrity, and availability of the data stored on those systems. The failure of our information technology systems to perform as we anticipate could disrupt our business and result in transaction errors, processing inefficiencies, data loss, legal claims or proceedings, regulatory penalties, and the loss of sales and customers. Any interruption of our information technology systems could have operational, reputational, legal, and financial impacts that may have a material adverse effect on our business.

A change in the assumptions regarding the future performance of our businesses or a different weighted-average cost of capital used to value our reporting units or our indefinite-lived intangible assets could negatively affect our

consolidated
results of operations and net worth.

As of May
29, 2016, 2022,
we had $12.9 $21.4
billion of
goodwill and
indefinite-lived intangible
assets. Goodwill for
each of
our reporting
units
is tested
for impairment
annually and
whenever events
or changes
in circumstances
indicate that
impairment may
have occurred.
We
compare
the
carrying
value
of
the net assets
reporting
unit,
including
goodwill,
to
the
fair
value
of a
the
reporting
unit.
If
the
fair
value
of
the
14
reporting unit including goodwill, to the fair value of the unit. If the fair value of the net assets of the reporting unit
is less than
the net assetscarrying
value of
the reporting
unit, including
goodwill, impairment
has occurred.
Our estimates
of fair
value are determined
based on a
discounted cash
flow model. Growth
rates for sales
and profits are
determined using inputs
from our
long-range planning process. We
also make estimates of discount rates, perpetuity growth assumptions,
market comparables, and other
factors.
If
current
expectations
for
growth
rates
for
sales
and
profits
are
not
met,
or
other
market
factors
and
macroeconomic
conditions were to change,
then our reporting units could
become significantly impaired. While
we currently believe that
our goodwill
is not impaired, different assumptions regarding
the future performance of our businesses could result in significant impairment
losses.

We
evaluate
the
useful
lives
of
our
intangible
assets,
primarily
intangible
assets
associated
with
the
Blue
Buffalo,
Pillsbury
,
Totino’s
,
Progresso
,Yoplait,
Old El Paso
,
Yoki
,
Häagen-Dazs
, and
Annie’s
brands, to determine if they are
finite or indefinite-lived.
Reaching a
determination on
useful life
requires significant
judgments and
assumptions regarding
the future
effects of
obsolescence,
demand,
competition, other
economic factors (such
(such as
the stability
of the
industry,
known technological
advances,
legislative action
that results
in an
uncertain or
changing regulatory
environment, and
expected changes
in distribution
channels), the
level of
required
maintenance expenditures, and the expected lives of other related groups of
assets.

Our
indefinite-lived
intangible
assets
are
also
tested
for
impairment
annually
and
whenever
events
or
changes
in
circumstances
indicate
that their carrying value impairment
may not be recoverable. have
occurred.
Our estimate
of the
fair value
of the
brands is
based on
a discounted
cash flow
model
using inputs
including projected
revenues from
our long-range
plan, assumed
royalty rates which
could be
payable if we
did not
own
the brands, and
a discount rate. OurUncle Toby’s andMountain High brands have experienced declining business performance. Our strategies
If current
expectations for fiscal 2017 growth
rates for sales
and fiscal 2018 will focus our growth investments on our brands and platforms with the strongest profitable growth potential. As a result, certain parts of our U.S. Retail segment could experience reduced future sales projections. We

performed a sensitivity analysis for certain brand intangible assets and determined that, whilemargins

are not impaired as of May 29, 2016, themet,
or other market
factors and
macroeconomic
conditions
were
to
change,
then
our
indefinite-lived
intangible
assets
could
become
significantly
impaired.
Our
Progresso
,
Green
Giant
,
EPIC
,
andFood Should Taste Good
Uncle
Toby’s
brands
had risk of decreasing coverage. We will
experienced
declining
business
performance,
and
we
continue
to
monitor these businesses.
For further information
on goodwill and intangible
assets, please refer to
Note 6 to the Consolidated
Financial Statements in Item
8 of
this report.

Our failure to successfully integrate acquisitions into

ITEM 1B - Unresolved Staff Comments
None.
ITEM 2 - Properties
We
own
our existing operations could adversely affect our financial results.

From time to time, we evaluate potential acquisitions or joint ventures that would further our strategic objectives. Our success depends, in part, upon our ability to integrate acquired

principal
executive
offices
and existing operations. If we are unable to successfully integrate acquisitions, our financial results could suffer. Additional potential risks associated with acquisitions include additional debt leverage, the loss of key employees and customers of the acquired business, the assumption of unknown liabilities, the inherent risk associated with entering a geographic area or line of business in which we have no or limited prior experience, failure to achieve anticipated synergies, and the impairment of goodwill or other acquisition-related intangible assets.

ITEM 1BUnresolved Staff Comments

None.

ITEM 2Properties

We own our principal executive offices and

main research
facilities,
which
are
located
in the
Minneapolis,
Minnesota
metropolitan
area. We
operate numerous
manufacturing facilities
and maintain many
sales and administrative
offices, warehouses,
and distribution
centers around the world.

15
As of May 29, 2016,
2022, we operated 59
43 facilities for
the production of
a wide variety
of food products.
Of these facilities, 30
25 are located
in the United
States (1 of
which is leased),
4 in the
Greater China region, 2
1 in the
Asia/Middle East/Africa
Region, (1 of which is leased), 4 2
in Canada (2 (1
of
which are is
leased), 10 5
in Europe/Australia,
and 9 6
in Latin
America and
Mexico. The
following is
a list
of the
locations of
our principal
production facilities, which primarily support the segment noted:

U.S. Retail
• Carson, California• Reed City, Michigan• Buffalo, New York
• Covington, Georgia• Fridley, Minnesota• Cincinnati, Ohio
• Belvidere, Illinois• Hannibal, Missouri• Wellston, Ohio
• Cedar Rapids, Iowa• Vineland, New Jersey• Murfreesboro, Tennessee
• Irapuato, Mexico• Albuquerque, New Mexico• Milwaukee, Wisconsin
International
• Mt. Waverly, Australia• Pouso Alegre, Brazil• Labatut, France
• Rooty Hill, Australia• St. Hyacinthe, Canada• Le Mans, France
• Sao Bernardo do Campo, Brazil• Guangzhou, China• Moneteau, France
• Cambara, Brazil• Kunshan, China• Vienne, France
• Marilia, Brazil• Sanhe, China• Anseong-si, Korea
• Nova Prata, Brazil• Shanghai, China• San Adrian, Spain
• Paranavai, Brazil• Arras, France

Convenience Stores and Foodservice
• Chanhassen, Minnesota• Joplin, Missouri• Martel, Ohio

North America Retail
• St. Hyacinthe, Canada
• Irapuato, Mexico
• Buffalo, New York
• Covington, Georgia
• Reed City, Michigan
• Cincinnati, Ohio
• Belvidere, Illinois
• Fridley, Minnesota
• Wellston, Ohio
• Geneva, Illinois
• Hannibal, Missouri
• Murfreesboro, Tennessee
• Cedar Rapids, Iowa
• Albuquerque, New Mexico
• Milwaukee, Wisconsin
North America Foodservice
• Chanhassen, Minnesota
• Joplin, Missouri
International
• Rooty Hill, Australia
• Recife, Brazil
• Arras, France
• Cambara, Brazil
• Guangzhou, China
• Labatut, France
• Campo Novo do Pareceis, Brazil
• Nanjing, China
• Inofita, Greece
• Paranavai, Brazil
• Sanhe, China
• Nashik, India
• Pouso Alegre, Brazil
• Shanghai, China
• San Adrian, Spain
Pet
• Richmond, Indiana
• Independence, Iowa
• Joplin, Missouri
We
operate
numerous
grain
elevators
in
the
United
States
in
support
of
our
domestic
manufacturing
activities.
We
also
utilize
approximately 12
15 million
square
feet
of warehouse
and
distribution
space, nearly
all of
which
is leased,
that
primarily
supports
our U.S.
North America
Retail segment.
We
own and
lease a
number of
dedicated sales
and administrative
offices
around the
world, totaling
approximately 32 million square feet. We
have additional warehouse, distribution, and office space in
our plant locations.

As part
of our
Häagen-Dazs
business in
our International
segment
we operate 530
448 (all
leased) and
franchise 344
384 branded
ice cream
parlors in various countries around the world, all outside of the United States and
Canada.

ITEM 3Legal Proceedings

ITEM 3 - Legal Proceedings
We are the
subject of various pending or threatened legal
actions in the ordinary course of our business. All such
matters are subject to
many uncertainties and
outcomes that are not
predictable with assurance.
In our opinion,
there were no
claims or litigation pending
as
of
May
29, 2016,
2022,
that
were
reasonably
likely
to
have
a
material
adverse
effect
on
our
consolidated
financial
position
or
results
of
operations. See
the information
contained under
the section entitled “Environmental
“Environmental Matters”
in Item 1
of this report
for a discussion
of environmental matters in which we are involved.

ITEM 4Mine Safety Disclosures

ITEM 4 - Mine Safety Disclosures
None.

PART
II

ITEM 5Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

ITEM 5 - Market for Registrant’s Common
Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
Our common
stock is
listed on
the New
York
Stock Exchange
under the
symbol “GIS.”
On June 13, 2016,15,
2022, there
were approximately 32,000
25,000 record holders of our common stock. Information regarding
16
The
following
table
sets
forth
information
with
respect
to
shares
of
our
common
stock
that
we
purchased
during
the market prices for our common stock and dividend payments for the two most recent
fiscal years is set forth in Note 18 to the Consolidated Financial Statements in Item 8 of this report.

The following table sets forth information with respect to shares of our common stock that we purchased during the fiscal

quarter
ended May 29, 2016:

Period  

Total Number

of Shares
Purchased (a)

   Average
Price Paid
Per Share		   

Total Number of

Shares Purchased as
Part of a Publicly
Announced Program (b)

   Maximum Number of
Shares that may yet be
Purchased Under the
Program (b)		 

February 29, 2016-

        

April 3, 2016

   1,930    $59.37     1,930     75,871,561  

April 4, 2016-

        

May 1, 2016

   13,035     64.96     13,035     75,858,526  

May 2, 2016-

        

May 29, 2016

   63,197     61.75     63,197     75,795,329  

Total

   78,162    $62.23     78,162     75,795,329  
                     
(a)The total number of shares purchased includes shares of common stock withheld for the payment of withholding taxes upon the distribution of deferred option units.
(b)On May 6, 2014, our Board of Directors approved an authorization for the repurchase of up to 100,000,000 shares of our common stock. Purchases can be made in the open market or in privately negotiated transactions, including the use of call options and other derivative instruments, Rule 10b5-1 trading plans, and accelerated repurchase programs. The Board did not specify an expiration date for the authorization.

ITEM 6Selected Financial Data

The following table sets forth selected financial data for each 2022:

Period
Total
Number
of Shares
Purchased (a)
Average Price
Paid Per Share
Total
Number of Shares
Purchased as Part of a
Publicly Announced
Program (b)
Maximum Number of
Shares that may yet
be Purchased
Under the fiscal years in the five-year period ended Program (b)
February 28, 2022 -
April 3, 2022
1,081,455
$
64.84
1,081,455
24,569,322
April 4, 2022 -
May 1, 2022
1,895,917
70.66
1,895,917
22,673,405
May 2, 2022 -
May 29, 2016:

   Fiscal Year 
In Millions, Except Per Share Data, Percentages and Ratios  2016  2015 (a)  2014  2013  2012 

Operating data:

      

Net sales

  $16,563.1   $17,630.3   $17,909.6   $17,774.1   $16,657.9  

Gross margin (b)

   5,829.5    5,949.2    6,369.8    6,423.9    6,044.7  

Selling, general, and administrative expenses

   3,118.9    3,328.0    3,474.3    3,552.3    3,380.7  

Operating profit

   2,707.4    2,077.3    2,957.4    2,851.8    2,562.4  

Total segment operating profit (c)

   2,999.5    3,035.0    3,153.9    3,222.9    3,011.6  

Net earnings attributable to General Mills

   1,697.4    1,221.3    1,824.4    1,855.2    1,567.3  

Advertising and media expense

   754.4    823.1    869.5    895.0    913.7  

Research and development expense

   222.1    229.4    243.6    237.9    245.4  

Average shares outstanding:

      

Diluted

   611.9    618.8    645.7    665.6    666.7  

Earnings per share:

      

Diluted

  $2.77   $1.97   $2.83   $2.79   $2.35  

Diluted, excluding certain items affecting comparability (c)

  $2.92   $2.86   $2.82   $2.72   $2.56  

Operating ratios:

      

Gross margin as a percentage of net sales

   35.2%   33.7%   35.6%   36.1%   36.3% 

Selling, general, and administrative expenses as a

percentage of net sales

   18.8%   18.9%   19.4%   20.0%   20.3% 

Operating profit as a percentage of net sales

   16.3%   11.8%   16.5%   16.0%   15.4% 

Adjusted operating profit as a percentage of net sales (b) (c)

   16.8%   15.9%   16.2%   16.3%   16.7% 

Total segment operating profit as a percentage of net sales (c)

   18.1%   17.2%   17.6%   18.1%   18.1% 

Effective income tax rate

   31.4%   33.3%   33.3%   29.2%   32.1% 

Return on average total capital (b)

   12.9%   9.1%   12.5%   13.4%   12.8% 

Adjusted return on average total capital (b) (c)

   11.3%   11.2%   11.6%   12.0%   12.7% 

Balance sheet data:

      

Land, buildings, and equipment

  $3,743.6   $3,783.3   $3,941.9   $3,878.1   $3,652.7  

Total assets

   21,712.3    21,832.0    23,044.7    22,505.7    21,014.8  

Long-term debt, excluding current portion

   7,057.7    7,575.3    6,396.6    5,901.8    6,139.5  

Total debt (b)

   8,430.9    9,191.5    8,758.9    7,944.8    7,407.2  

Cash flow data:

      

Net cash provided by operating activities

  $2,629.8   $2,542.8   $2,541.0   $2,926.0   $2,407.2  

Capital expenditures

   729.3    712.4    663.5    613.9    675.9  
  

 

 

  

 

 

  

 

 

  

 

 

  

 

 

 

Free cash flow (b) (c)

   1,900.5    1,830.4    1,877.5    2,312.1    1,731.3  

Fixed charge coverage ratio (b)

   7.40    5.54    8.04    7.62    6.26  

Operating cash flow to debt ratio (b)

   31.2%   27.7%   29.0%   36.8%   32.5% 

Share data:

      

Low stock price

  $54.12   $48.86   $46.86   $37.55   $34.95  

High stock price

   65.36    57.14    54.40    50.93    41.05  

Closing stock price

   62.87    56.15    53.81    48.98    39.08  

Cash dividends per common share

   1.78    1.67    1.55    1.32    1.22  
                      
(a)Fiscal 2015 was a 53-week year; all other fiscal years were 52 weeks.
(b)See “Glossary” in Item 8 of this report for definition.
(c)See “Non-GAAP Measures” in Item 7 of this report for our discussion of this measure not defined by generally accepted accounting principles.

ITEM 7Management’s Discussion and Analysis of Financial Condition and Results of Operations

2022

1,735,229
70.09
1,735,229
20,938,176
Total
4,712,601
$
69.11
4,712,601
20,938,176
(a)
The total
number of
shares purchased
includes shares
of common
stock withheld
for the
payment of
withholding taxes
upon the
distribution of deferred option units.
(b)
On
June
27, 2022,
our
Board of
Directors
approved
a new
authorization
for
the repurchase
of
up to
100,000,000
shares of
our
common
stock
and
terminated
the
prior
authorization.
Purchases
can
be
made
in
the
open
market
or
in
privately
negotiated
transactions,
including
the
use
of
call
options
and
other
derivative
instruments,
Rule
10b5-1
trading
plans,
and
accelerated
repurchase programs. The Board did not specify an expiration date for the
authorization.
17
ITEM 7 - Management’s Discussion and Analysis of
Financial Condition and Results of Operations
EXECUTIVE OVERVIEW

We
are
a
global consumer packaged
foods company.
We
develop
distinctive
value-added
food
products
and
market
them under
unique
brand
names.
We
work
continuously
to
improve
our
core
products
and
to
create
new
products
that
meet
consumers’
evolving
needs
and
preferences.
In
addition,
we
build
the
equity
of
our
brands
over
time
with
strong
consumer-directed
marketing,
innovative
new
products,
and
effective
merchandising.
We
believe
our
brand-building strategy
approach
is
the
key
to
winning
and
sustaining
leading
share
positions in markets around the globe.

Our fundamental
financial goal is
to generate superiorcompetitively
differentiated returns
for our shareholders
over the long
term. We
believe
achieving
that increases in
goal
requires
us
to
generate
a
consistent
balance
of
net
sales segment operating profit, earnings per share (EPS), free
growth,
margin
expansion,
cash flow
conversion,
and
cash
return to shareholders and return on average total capital are key drivers of financial performance for our business.

over time.

Our long-term growth objectives are to consistently deliver:

deliver the following performance
low single-digit
on average over time:
●
2 to 3 percent annual growth in organic net sales;

mid single-digit●
mid-single-digit annual growth in total segmentadjusted operating profit;

high single-digit●
mid- to high-single-digit annual growth in adjusted diluted EPS excluding certain items affecting comparability;earnings per share

(EPS);
improvement in adjusted return on average total capital;●

free cash flow conversion averaging aboveof at least 95 percent of adjusted net earnings after
tax; and

●
cash return to shareholders averaging aboveof 80 to 90 percent of free cash flow,
including an attractive dividend yield.

We believe
are executing
our Accelerate
strategy to
drive sustainable,
profitable gro
wth and
top-tier shareholder
returns over
the long
term.
The
strategy
focuses
on
four
pillars
to
create
competitive
advantages
and
win:
boldly
building
brands,
relentlessly
innovating,
unleashing
our scale,
and
being a
force for
good. We
are prioritizing
our core
markets, global
platforms,
and
local gem
brands
that this financial performance should
have
the
best
prospects
for
profitable
growth
and
we
are
committed
to
reshaping
our
portfolio
with
strategic
acquisitions
and
divestitures to further enhance our growth profile.
We
expect that
changes in
consumer behaviors
driven by
the COVID-19
pandemic will
result in long-term value creation
ongoing elevated
consumer demand
for shareholders.

Fiscal 2016 was an important step toward returningfood at home, relative to pre-pandemic levels. These

changes include more time spent working
from home and increased consumer
appreciation
for cooking
and baking.
We
plan to
capitalize on
these opportunities,
addressing evolving
consumer
needs through
our
leading brands, innovation, and advantaged capabilities to generate profitable
growth.
In fiscal 2022,
we successfully adapted
to the volatile operating
environment, responding quickly
to significant increases in
input cost
inflation and supply chain disruptions and keeping
our long-term growth objectives. Our U.S. Retail segment improved its brands available for our customers and consumers.
As a result, we were able to
grow organic
net sales, adjusted
operating profit, performance in fiscal 2016, excluding
and adjusted diluted
EPS ahead of
our initial targets.
We
achieved each
of the
three
priorities we established at the impactbeginning of acquisitions the year:
We
continued
to
compete
effectively,
including
holding
or
growing
market
share
in
70
percent
of
our
global
priority
businesses.
We
generated organic
net sales
growth across
each of
our four
operating segments,
fueled by
compelling brand
building
and
innovation
across our
leading
brands,
and
supported
with
strong
levels
of
net price
realization
in
response
to
significant input cost inflation.
We
successfully navigated
the dynamic supply
chain environment, which
was characterized by
steadily increasing input
cost
inflation,
reaching
8
percent
for
the
full
year,
and
record
levels
of
supply
chain
disruptions
affecting
our
sourcing,
manufacturing,
and divestitures, primarily logistics
operations.
We
leveraged
our Strategic
Revenue
Management
(SRM) capability
to accelerate
pricing actions in
the North American Green Giant business (Green Giant) divestiture and 6 incremental monthsface of results from the acquisition of Annie’s, Inc. (Annie’s). Net sales as reported declined 5 percentage points in fiscal 2016, which included 2 percentage increasing
inflation, generating 7
points of decline frompositive
organic net price
realization and mix
for the
year.
And
we
moved
quickly
to
address
supply
chain
disruptions
and
outpace
our
competition
in
terms
of
on-shelf
availability for our brands.
We
executed
our
portfolio
and
organizational
reshaping
actions
without
disrupting
our
base
business.
We
announced
or
closed
seven
different
acquisitions
and
divestitures
during
the
year,
helping
further
upgrade
the
growth
profile
of
our
portfolio.
And we
successfully implemented
significant changes
to our
organizational
structure, including
streamlining our
North
America
Retail
operating
unit
structure,
realigning
our
North
America
Foodservice
segment
and
shifting
our
U.S.
convenience stores
business into North
America Retail, creating
a new International
segment and adjusting
our go-to-market
model
across
many
global
markets,
and
establishing
a
new
Strategy
&
Growth
organization
tasked
with
advancing
many
aspects of our Accelerate strategy.
Our consolidated net impact of Green Giant and Annie’s and 1 percentage point of decline from a 53rd week in
sales for fiscal 2015. While
2022 rose 5
percent to $19.0 billion.
On an organic
basis, net sales growth did not meet our expectations,
increased 6 percent
compared
to year-ago
levels. Operating
profit of
$3.5 billion increased
11 percent.
Adjusted operating
profit of
$3.2 billion increased 1
2 percent despite the 53rd week in fiscal 2015 and the net unfavorable impact of the Green Giant divestiture and Annie’s acquisition. Operating profit for the Convenience Stores and Foodservice segment increased 7 percent, driven primarily by our 6 priority product platforms. Operating results for the International segment had good growth in developed markets that was tempered by slowdowns in developing markets. International net sales as reported declined 10 percent, including 1 percentage point of decline from the divestiture of Green Giant, our Venezuela business, and our foodservice business in Argentina, but grew 3 percent
on a constant-currency
basis. International segment operating profit declined 15 percent and was impacted by 12 percentage points of unfavorable foreign currency exchange and slowing economic growth in China and Brazil, as well as the effect of divestitures.

Our consolidated net sales for fiscal 2016 declined 6 percent to $16.6 billion, primarily driven by unfavorable foreign exchange, a 53rd week in fiscal 2015, and the net impact of acquisitions and divestitures. On a constant-currency basis, net sales decreased 2 percent. Operating profit of $2.7 billion increased 30 percent. Total segment operating profit of $3.0 billion declined 1 percent and grew 1 percent on a constant-currency basis. 

Diluted EPS increased 41of $4.42
was up 17 percent
compared to $2.77 per share.fiscal 2021
results. Adjusted diluted EPS which excludes certain items affecting comparability
of results, rose 2 $3.94
18
increased
4
percent to $2.92 per share and increased 5 percent
on
a
constant-currency basis. Our return on average total capital was 12.9 percent, and return on adjusted average total capital increased 10
basis points to 11.3 percent. (See
(See
the “Non-GAAP
“Non-GAAP
Measures”
section
below
for discussion
a
description
of total segment operating profit, adjusted diluted EPS, constant-currency net sales growth rates, constant-currency International segment net sales growth rate, constant-currency total segment operating profit growth rate, constant-currency adjusted diluted EPS growth rate, and adjusted return on average total capital, which are
our
use
of
measures not defined by generally accepted accounting principles (GAAP)).

Net
cash
provided
by
operations
totaled $2.6
$3.3 billion
in
fiscal 2016 at
2022
representing
a
conversion
rate
of 151
121
percent
of
net
earnings,
including earnings attributable
to redeemable and noncontrolling
interests. This cash generation
supported capital investments
totaling $729
$569 million, and
our resulting
free cash flow
was $1.9$2.7 billion
at a conversion
rate of

104 113

percent of
adjusted net
earnings, including
earnings
attributable
to
redeemable
and
noncontrolling
interests.
We
returned
cash
to
shareholders
through
dividends
totaling
$1.2
billion and net share repurchases
totaling $715 million. Our ratio
of net debt-to-operating cash flow
was 3.3 in fiscal 2022, and our
net
debt-to-adjusted earnings attributable to redeemable before net interest, income taxes, depreciation
and noncontrolling interests. We also returned significant cash to shareholders through a 7 percent dividend increase and share repurchases totaling $607 million. Total cash returned to shareholders represented 79 percent of our free cash flow (seeamortization (net debt-to-adjusted EBITDA) ratio was 2.8
(See the “Non-GAAP Measures” section below for a description of our use of
measures not defined by GAAP).

We recorded

A
detailed
review
of
our
fiscal
2022
performance
compared
to
fiscal
2021
appears
below
in
the following achievements related to our other key operating objectives for fiscal 2016:

We took steps to reshape our business portfolio to drive future growth with the divestiture of our North American Green Giant vegetable business and two smaller divestures, the Venezuela canned meat business and the foodservice dough business in Argentina. We also acquired EPIC Provisions LLC (Epic), broadening our product offerings in our U.S. natural and organic portfolio to include meat snacks, and we entered the growing Brazilian yogurt market through the acquisition of Laticinios Carolina Ltda. (Carolina).

section
We generated strong levels of supply chain productivity savings in fiscal 2016 through our ongoing Holistic Margin Management (HMM) efforts. We also continued to execute our cost savings and organizational initiatives during the fiscal year. We expanded Project Century, an initiative to streamline our North American distribution and manufacturing network, to our International segment supply chain. We also initiated Project Compass, with a focus on increasing the agility and effectiveness of our International segment. Finally, we continued to realize benefits from Project Catalyst, a fiscal 2015 restructuring plan to increase organizational effectiveness and reduce overhead expense. In aggregate, the initiatives taken in fiscal 2015 and 2016 generated almost $350 million in cost savings during fiscal 2016.

A detailed review of our fiscal 2016 performance appears below in the section titled “Fiscal 2016

“Fiscal
2022
Consolidated Results of Operations.”

With strong A detailed review

of our fiscal 2021 performance compared to our fiscal 2020
performance is set
forth
in Part
II, Item
7 of
our Form
10-K for
the fiscal
year
ended
May 30, 2021
under the
caption
“Management’s
Discussion and
Analysis of
Financial Condition
and Results
of Operations
– Fiscal
2021 Results
of Consolidated
Operations,” which
is incorporated
herein by reference.
In fiscal 2023,
we expect to
build on our
positive momentum
and continue
to advance our
Accelerate strategy.
Our key priorities
are
to
continue
to
compete
effectively,
invest
in
our
brands
and
capabilities,
and
reshape
our
portfolio.
We
expect
the
largest
factors
impacting
our
performance
in
fiscal
2023
will
be
the
economic
health
of
consumers,
the
inflationary
cost
environment,
and
the
frequency and severity of disruptions
in the supply chain.
Total input
cost inflation is expected to
be approximately 14 percent
of cost
of goods
sold in
fiscal 2023.
We
are addressing
the inflationary
environment with
holistic margin
management (HMM)
cost savings in Fiscal 2016
expected to
total approximately
3 to
4 percent
of cost
of goods
sold and visibility to further savings over the next two years, we now expect
low-double-digit net
price realization
generated through
our previously announced organizational restructuring and cost-reduction initiatives, including Projects Century, Catalyst, and Compass, as well as administrative cost reductions, to generate total annual savings of $600 million by fiscal 2018.
SRM capability.
We are also undertaking further effortsplanning
for volume elasticities to prioritize investments, reduce complexity,increase but remain below
historical levels and streamline our operations to drive profitable sales growth. As a result, we are increasing and accelerating our adjusted operating profit margin expansion target. We expect to achieve an adjusted operating profit margin of 20 percent by fiscal 2018, an increase of 400 basis points over fiscal 2015 levels. Key drivers of margin expansion over the next two years will include:

Strong levels of HMM productivity gains;

Continuing savings from previously announced cost-reduction initiatives;

Increased efficiency and prioritization of commercial investments, including trade and consumer spending;

Continuing focus on complexity reduction through SKU optimization;

Further supply chain optimization; anddisruptions to

Continued expansion of zero-based budgeting across the business.slowly moderate in fiscal 2023 compared to fiscal 2022 levels.

We will focus

Based on these assumptions, our key full-year fiscal 2017 and fiscal 2018 growth investments on our brands and platforms with the strongest profitable growth potential, including:

2023 targets are
In the U.S. Retail segment – Cereal, snack bars, the natural and organic portfolio, hot snacks, Mexican products, and yogurt;

summarized below:
Our International segment;●

In the Convenience Stores and Foodservice segment – Cereal, yogurt, snacks, frozen meals, biscuits, and baking mixes – the segment’s current Focus 6 platforms.

Net sales for these “growth” businesses, which comprise 75 percent of total companyOrganic net sales and a similar proportion of operating profit, are expected to grow at increase 4 to 5 percent.

●
Adjusted operating
profit is
expected to
range between
down 2
percent and
up 1
percent in
constant-currency from
the base
of
$3.2
billion
reported
in
fiscal
2022,
including
a low single-digit organic rate
3-point
net
headwind
from
divestitures
and
acquisitions
announced
or
closed in fiscal 2017. In our “foundation” businesses, which comprise the remainder of the portfolio, we will only pursue selective growth investments2022.
●
Adjusted diluted EPS are
expected to range between
flat and will focus on reducing SKU complexity, optimizing commercial investments, and prioritizing profitable volume while making selective Consumer First investments. We expect organic net sales to decline mid single-digits for these businesses in fiscal 2017. With this focused approach, we expect:

up 3 percent
Fiscal 2017 organic net sales growth ranging from flat to down 2 percent compared to fiscal 2016, but deliver a 6 to 8 percent increase
in constant-currency total segment operating profit.from

Fiscal 2017 adjusted operating profit margin to increase by approximately 150 basis points; and

Constant-currency adjusted diluted EPS to grow 6 to 8 percent from the base of $2.92$3.94 earned
in fiscal 2016.

Our fiscal 2017 plans call for continued strong cash returns to shareholders. The current annualized dividend rate of $1.92 per share is up 8 percent2022, including a 3-point net headwind from the annual dividend paiddivestitures and

acquisitions announced or closed in fiscal 2016. Share repurchases in fiscal 2017 are2022.
●
Free cash flow conversion is expected to result inbe at least 90 percent of adjusted after-tax
earnings.
See the “Non-GAAP Measures” section below for a net reduction in average diluted shares outstandingdescription of approximately 1 to 2 percent.

The foregoing non-GAAP forward-looking financialour use

of measures are not reconcilable to the equivalent GAAP measure because we cannot accurately predict the excluded variables that may impact these measures.

defined by GAAP.

Certain terms used throughout this report are defined in a glossary in Item
8 of this report.

FISCAL 20162022 CONSOLIDATED
RESULTS
OF OPERATIONS

In fiscal
2022, net
sales increased
5 percent
compared to
fiscal 2021
and organic
net sales increased
6 percent
compared to
last year.
Operating
profit
increased
11
percent
to
$3,476
million
primarily
driven
by
favorable
net
price
realization
and
mix,
gains
on
divestitures,
net
restructuring
recoveries,
and
a
decrease
in
certain
selling,
general,
and
administrative
(SG&A)
expenses,
partially
offset
by
higher
input
costs,
lower
net
corporate
investment
activity,
higher
transaction
and
integration
costs,
and
volume
declines.
Operating profit margin
of 18.3 percent increased
100 basis points.
Adjusted operating profit
of $3,213 million
increased 2 percent on
a constant-currency
basis, primarily
driven by
a decrease
in certain
SG&A expenses.
Adjusted operating
profit margin
decreased 50
basis
points
to
16.9
percent.
Diluted
earnings
per
share
of
$4.42
increased
17
percent
compared
to
fiscal
2021.
Adjusted
diluted
earnings
per
share
of
$3.94
increased
4
percent
on
a
constant-currency
basis
(see
the
“Non-GAAP
Measures”
section
below
for
a
description of our use of measures not defined by GAAP).
19
A summary of our consolidated financial results for fiscal 2022 follows:
Fiscal 2016 had 52 weeks 2022
In millions,
except per
share
Fiscal 2022 vs.
Fiscal 2021
Percent of Net
Sales
Constant-
Currency
Growth (a)
Net sales
$
18,992.8
5
%
Operating profit
3,475.8
11
%
18.3
%
Net earnings attributable to General Mills
2,707.3
16
%
Diluted earnings per share
$
4.42
17
%
Organic net sales growth rate (a)
6
%
Adjusted operating profit (a)
3,213.3
2
%
16.9
%
2
%
Adjusted diluted earnings per share (a)
$
3.94
4
%
4
%
(a)
See the "Non-GAAP Measures" section below for our use of measures not defined by
GAAP.
Consolidated
net sales
were as follows:
Fiscal 2022
Fiscal 2022 vs.
Fiscal 2021
Fiscal 2021
Net sales (in millions)
$
18,992.8
5
%
$
18,127.0
Contributions from volume growth (a)
(5)
pts
Net price realization and mix
10
pts
Foreign currency exchange
Flat
Note: Table may
not foot due to rounding
(a) Measured in tons based on the stated weight of our product shipments.
The
5
percent
increase
in
net
sales
in
fiscal
2022
reflects
favorable
net
price
realization
and
mix,
partially
offset
by
a
decrease
in
contributions from volume growth.
Components of organic net sales growth are shown in the following
table:
Fiscal 2022 vs. Fiscal 2021
Contributions from organic volume growth (a)
(1)
pt
Organic net price realization and mix
7
pts
Organic net sales growth
6
pts
Foreign currency exchange
Flat
Acquisition and divestitures
(1)
pt
Net sales growth
5
pts
Note: Table may
not foot due to rounding
(a) Measured in tons based on the stated weight of our product shipments.
Organic net sales in fiscal 2022 increased 6 percent
compared to 53 weeksfiscal 2021,
driven by favorable organic net price realization and
mix,
partially offset by a decrease in contributions from
organic volume growth.
Cost of sales
increased $912 million in fiscal 2015. Included2022
to $12,591 million. The increase was
primarily driven by a $1,514 million
increase
attributable to
product rate and
mix, partially offset
by a $608
million decrease due
to lower volume.
We
recorded a
$133 million net
decrease
in
cost
of
sales
related
to
mark-to-market
valuation
of
certain
commodity
positions
and
grain
inventories
in
fiscal
2022,
compared to a net decrease of $139
million in fiscal 20162021
(please see Note 8 to the Consolidated
Financial Statements in Item 8 of this
report for additional information).
Gross margin
decreased 1 percent in
fiscal 2022 versus fiscal 2021.
Gross margin as a percent
of net sales decreased
190 basis points
to 33.7 percent compared to fiscal 2021.
SG&A
expenses
increased
$67 million
to
$3,147 million
in
fiscal
2022
compared
to
fiscal
2021.
The
increase
in
SG&A
expenses
primarily reflects
lower net corporate
investment activity
and higher transaction
costs, partially offset
by lower media
and advertising
expenses and other administrative costs. SG&A expenses as a percent
of net sales in fiscal 2022 decreased 40 basis points compared to
fiscal 2021.
20
Divestitures
gain
totaled
$194
million
in
fiscal
2022
due
to
the
sale
of
our
interests
in
Yoplait
SAS,
Yoplait
Marques
SNC,
and
Liberté Marques
Sàrl and
our European
dough businesses
(please refer
to Note
3 to
the Consolidated
Financial Statements
in Part
I,
Item 1 of this report). Divestiture loss totaled $54 million in fiscal 2021 due
to the sale of our Laticínios Carolina business in Brazil.
Restructuring, impairment,
and other exit
costs (recoveries)
totaled $26 million
of net recoveries
in fiscal 2022
compared to $170
million of charges in
fiscal 2021. In fiscal 2022,
we approved restructuring actions
in the International segment
to drive efficiencies in
manufacturing and logistics operations
,
and as a result, we
recorded $12 million of
charges in fiscal 2022.
We recorded
a net recovery
of
$38
million
in
fiscal
2022,
which
includes
a
$34
million
reduction
to
our
restructuring
reserves
primarily
related
to
severance
charges.
In
fiscal
2021,
we
approved
restructuring
actions
designed
to
better
align
our
organizational
structure
and
resources
with
strategic
initiatives
and
actions
related
to
route-to-market
and
supply
chain
optimization.
Please
see
Note
4
to
the
Consolidated
Financial Statements in Item 8 of this report for additional information.
Benefit
plan
non-service
income
totaled
$113 million
in
fiscal
2022
compared
to
$133 million
in
fiscal
2021,
primarily
reflecting
higher
amortization
of
losses
(please
see
Note
2
to
the
Consolidated
Financial
Statements
in
Item
8
of
this
report
for
additional
information).
Interest, net
for fiscal 2022 totaled $380 million, $40 million lower than fiscal 2021,
primarily driven by lower average debt balances.
Our
effective
tax rate
for fiscal
2022
was 18.3
percent
compared to
22.0 percent
in fiscal
2021.
The 3.7
percentage point
decrease
was primarily
driven by a
change in the
valuation allowance on
our capital loss
carryforwards, certain non
-taxable components of
the
divestiture gains, and favorable changes
in earnings mix by jurisdiction.
Our adjusted effective tax rate
was 20.9 percent in fiscal 2022
compared to
21.1 percent
in fiscal
2021 (see
the “Non-GAAP
Measures” section
below for
a description
of our
use of
measures not
defined by GAAP).
After-tax earnings from
joint ventures
decreased 5 percent
to $112 million
in fiscal 2022 compared
to fiscal 2021,
primarily driven
by higher input costs and
lower net sales at CPW,
partially offset by
lower SG&A expenses at CPW and
higher net sales at HDJ. On
a
constant-currency basis,
after-tax earnings
from joint ventures
decreased 3 percent
(see the “Non-GAAP
Measures” section below
for
a description of
our use of
measures not defined
by GAAP). The
components of our
joint ventures’ net
sales growth are
shown in the
following table:
Fiscal 2022 vs. Fiscal 2021
CPW
HDJ
Total
Contributions from volume growth (a)
(3)
pts
8
pts
Net price realization and mix
2
pts
1
pt
Net sales growth in constant currency
(1)
pt
9
pts
1
pt
Foreign currency exchange
(2)
pts
(8)
pts
(3)
pts
Net sales growth
(3)
pts
1
pt
(2)
pts
Note: Table may
not foot due to rounding
(a) Measured in tons based on the stated weight of our product shipments
Net
earnings
attributable
to
redeemable
and
noncontrolling
interests
increased
to
$28
million
in
fiscal
2022
compared
to
$6
million in
fiscal 2021,
primarily due
to the loss
on sale
of the Laticínios
Carolina business
in Brazil
in fiscal 2021,
partially offset
by
the sale of our interests in Yoplait
SAS, Yoplait
Marques SNC, and Liberté Marques Sàrl in fiscal 2022.
Average
diluted
shares
outstanding
decreased
by
6 million
in
fiscal
2022
from
fiscal
2021
primarily
due
to
share
repurchase
activity.
RESULTS
OF SEGMENT OPERATIONS
Our businesses are organized into four operating segments: North
America Retail; International; Pet, and North America Foodservice.
In
fiscal
2022,
we
announced
a
new
organization
structure
to
streamline
our
global
operations.
As
a
result
of
this
global
reorganization,
beginning
in
the
third
quarter
of
fiscal
2022,
we
reported
results
for
our
four
operating
segments
as
follows:
North
America Retail; International;
Pet; and North America
Foodservice. We
have restated our
net sales by segment
and segment operating
profit amounts
to reflect
our new
operating segments.
These segment
changes had
no effect
on previously
reported consolidated
net
sales, operating
profit, net
earnings attributable
to General
Mills, or
earnings
per share.
Please refer
to Note
17 of
the Consolidated
Financial Statements in Part 8 of this report for a description of our operating
segments.
Our
North
America
Retail
operating
segment
includes
convenience
store
businesses
from
our
former
Convenience
Stores
&
Foodservice
segment.
Within
our
North
America
Retail
operating
segment,
our
former
U.S.
Cereal
operating
unit
and
U.S.
Yogurt
operating
unit
have
been
combined
into
the
U.S.
Morning
Foods
operating
unit.
Additionally,
the
U.S.
Meals
&
Baking
Solutions
21
operating unit
combines the
former U.S.
Meals &
Baking operating
unit with
certain businesses
from the
U.S. Snacks
operating unit.
The
Canada
operating
unit
excludes
Canada
foodservice
businesses
which
are
now
included
in
our
North
America
Foodservice
operating segment.
The resulting North
America Foodservice operating
segment exclusively includes
our foodservice businesses.
Our
International
operating
segment
combines
our
former
Europe
&
Australia
and
Asia
&
Latin
America
operating
segments.
Our
Pet
operating segment is unchanged.
The following tables provide
the dollar amount and percentage
of net sales and operating
profit from each segment for
fiscal 2022 and
fiscal 2021:
Fiscal Year
2022
2021
In Millions
Dollars
Percent of Total
Dollars
Percent of Total
Net Sales
North America Retail
$
11,572.0
61
%
$
11,250.0
62
%
International
3,315.7
17
3,656.8
20
Pet
2,259.4
12
1,732.4
10
North America Foodservice
1,845.7
10
1,487.8
8
Total
$
18,992.8
100
%
$
18,127.0
100
%
Segment Operating Profit
North America Retail
$
2,699.7
74
%
$
2,725.9
75
%
International
232.0
6
236.6
7
Pet
470.6
13
415.0
12
North America Foodservice
255.5
7
203.3
6
Total
$
3,657.8
100
%
$
3,580.8
100
%
Segment
operating
profit
as
reviewed
by
our
executive
management
excludes
unallocated
corporate
items,
net
gain
or
loss
on
divestitures, and restructuring, impairment, and other exit costs that are centrally
managed.
NORTH AMERICA RETAIL
SEGMENT
Our North America Retail
operating segment reflects business
with a wide variety of
grocery stores, mass merchandisers, membership
stores,
natural
food
chains,
drug,
dollar
and
discount
chains,
convenience
stores,
and
e-commerce
grocery
providers.
Our
product
categories
in
this
business
segment
are
ready-to-eat
cereals,
refrigerated
yogurt,
soup,
meal
kits,
refrigerated
and
frozen
dough
products,
dessert
and
baking
mixes,
frozen
pizza
and
pizza
snacks,
snack
bars,
fruit
snacks,
savory
snacks,
and
a
wide
variety
of
organic products
including ready-to-eat
cereal, frozen
and shelf-stable vegetables,
meal kits, fruit
snacks, snack
bars, and
refrigerated
yogurt.
North America Retail net sales were as follows:
Fiscal 2022
Fiscal 2022 vs. 2021
Percentage Change
Fiscal 2021
Net sales (in millions)
$
11,572.0
3
%
$
11,250.0
Contributions from volume growth (a)
(6)
pts
Net price realization and mix
9
pts
Foreign currency exchange
Flat
Note: Table may
not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
The
3
percent
increase
in
North
America
Retail
net
sales
for
fiscal
2022
was
driven
by
favorable
net
price
realization
and
mix,
partially offset by a decrease in contributions from volume growth.
22
The components of North America Retail organic net
sales growth are shown in the following table:
Fiscal 2022 vs. 2021
Percentage Change
Contributions from organic volume growth (a)
(6)
pts
Organic net price realization and mix
9
pts
Organic net sales growth
3
pts
Foreign currency exchange
Flat
Net sales growth
3
pts
Note: Table may
not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
North
America
Retail organic
net
sales increased
3 percent
in fiscal
2022
compared
to fiscal
2021,
driven
by favorable
organic
net
price realization and mix, partially offset by a decrease in
contributions from organic volume growth.
Net sales for our North America Retail operating units are shown in the following table:
In Millions
Fiscal 2022
Fiscal 2022 vs. 2021
Percentage Change
Fiscal 2021
U.S. Meals & Baking Solutions
$
4,023.8
Flat
$
4,042.2
U.S. Morning Foods
3,370.9
2
%
3,314.0
U.S. Snacks
3,191.4
9
%
2,940.5
Canada (a)
985.9
3
%
953.3
Total
$
11,572.0
3
%
$
11,250.0
(a)
On a constant
currency basis, Canada
operating unit net
sales increased 1
percent in fiscal
2022. See the
“Non-GAAP Measures”
section below for our use of this measure not defined by GAAP.
Segment
operating
profit
decreased
1
percent
to $2,700
million
in
fiscal
2022
compared
to
$2,726
million
in
fiscal
2021,
primarily
driven by higher input costs and
a decrease in contributions from volume
growth,
partially offset by favorable net
price realization and
mix
and
a
decrease
in certain
SG&A
expenses.
Segment
operating
profit
decreased
1 percent
on a
constant-currency
basis in
fiscal
2022 compared to fiscal 2021 (see the “Non-GAAP Measures” section below
for our use of this measure not defined by GAAP).
INTERNATIONAL SEGMENT
Our International
operating segment
reflects retail
and foodservice
businesses outside
of the
United States
and Canada.
Our product
categories
include
super-premium
ice
cream
and frozen
desserts, meal
kits,
salty
snacks,
snack
bars,
dessert
and
baking
mixes,
and
shelf stable vegetables.
International net sales were as follows:
Fiscal 2022
Fiscal 2022 vs. 2021
Percentage Change
Fiscal 2021
Net sales (in millions)
$
3,315.7
(9)
%
$
3,656.8
Contributions from volume growth (a)
(19)
pts
Net price realization and mix
9
pts
Foreign currency exchange
1
pt
Note: Table may
not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
The
9
percent
decrease
in
International
net
sales
in
fiscal
2022
was
driven
by
a
decrease
in
contributions
from
volume
growth,
including
the
impact
of
volume declines
from
divestitures,
partially
offset
by
favorable
net
price
realization
and
mix
and
favorable
foreign currency exchange.
23
The components of International organic net sales growth
are shown in the following table:
Fiscal 2022 vs. 2021
Percentage Change
Contributions from organic volume growth (a)
Flat
Organic net price realization and mix
2
pts
Organic net sales growth
2
pts
Foreign currency exchange
1
pt
Divestitures (b)
(12)
pts
Net sales growth
(9)
pts
Note: Table may
not foot due to rounding
(a)
Measured in tons based on the stated weight of our product shipments.
(b)
Divestitures include
the impact
of the
sale of our
interests in
Yoplait
SAS, Yoplait
Marques SNC,
and Liberté
Marques Sàrl
and
our European
dough businesses in
fiscal 2022
and the sale
of the Laticínios
Carolina business in
Brazil in fiscal
2021. Please see
Note 3 to the Consolidated Financial Statements in Part II, Item 8 of this report.
The 2
percent increase
in International
organic
net sales
growth in
fiscal 2022
was driven
by favorable
organic
net price
realization
and mix.
Segment
operating
profit decreased
2 percent
to $232 million
in fiscal
2022 compared
to $237
million
in 2021,
primarily
driven by
higher
input
costs
and
a
decrease
in
contributions
from
volume
growth,
including
the
impact
of volume
declines
from
divestitures,
partially
offset
by favorable
net price
realization
and mix
and
a decrease
in SG&A
expenses. Segment
operating
profit decreased
4
percent on a constant-currency
basis in fiscal 2022 compared to fiscal
2021 (see the “Non-GAAP Measures”
section below for our use
of this measure not defined by GAAP).
PET SEGMENT
Our Pet operating segment includes
pet food products sold primarily in
the United States and Canada in national
pet superstore chains,
e-commerce retailers,
grocery stores,
regional pet
store chains,
mass merchandisers,
and veterinary
clinics and
hospitals. Our
product
categories include
dog and
cat food
(dry foods,
wet foods,
and treats)
made with
whole meats,
fruits, and
vegetables and
other high-
quality natural ingredients.
Our tailored pet product offerings
address specific dietary,
lifestyle, and life-stage needs
and span different
product types, diet types, breed sizes for dogs, lifestages, flavors, product
functions,
and textures and cuts for wet foods.
Pet net sales were as follows:
Fiscal 2022
Fiscal 2022 vs. 2021
Percentage Change
Fiscal 2021
Net sales (in millions)
$
2,259.4
30
%
$
1,732.4
Contributions from volume growth (a)
11
pts
Net price realization and mix
19
pts
Foreign currency exchange
Flat
Note: Table may
not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
Pet net
sales increased
30
percent
in
fiscal
2022
compared to
fiscal
2021,
driven
by favorable
net
price
realization
and mix
and
an
increase in contributions from volume growth,
including incremental volume from the acquisition of Tyson
Foods’ pet treats business.
24
The components of Pet organic net sales growth are shown in the following
table:
Fiscal 2022 vs. 2021
Percentage Change
Contributions from organic volume growth (a)
8
pts
Organic net price realization and mix
10
pts
Organic net sales growth
18
pts
Foreign currency exchange
Flat
Acquisition (b)
13
pts
Net sales growth
30
pts
Note: Table may
not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
(b)
Acquisition of Tyson
Foods’ pet treats business
in fiscal 2022. Please
see Note 3 to
the Consolidated Financial
Statements in Part
II, Item 8 of this report.
The 18
percent increase
in Pet
organic
net sales
growth
in fiscal
2022 was
driven by
favorable organic
net price
realization and
mix
and an additional monthincrease in contributions from organic volume
growth.
Pet operating
profit increased
13 percent
to $471 million
in fiscal 2022,
compared to
$415 million in
fiscal 2021, primarily
driven by
favorable net
price realization
and mix
and an increase
in contributions
from volume
growth, including
incremental volume
from the
acquisition
of
Tyson
Foods’
pet
treats
business,
partially
offset
by
higher
input
costs and
an
increase
in
SG&A
expenses.
Segment
operating
profit
increased
13
percent
on
a
constant-currency
basis
in
fiscal
2022
compared
to
fiscal
2021
(see
the
“Non-GAAP
Measures” section below for our use of resultsthis measure not defined by GAAP).
NORTH AMERICA FOODSERVICE SEGMENT
Our
major
product
categories
in
our
North
America
Foodservice
operating
segment
are
ready-to-eat
cereals,
snacks,
refrigerated
yogurt,
frozen
meals,
unbaked
and
fully
baked
frozen
dough
products,
baking
mixes,
and
bakery
flour.
Many
products
we
sell
are
branded to the consumer
and nearly all are
branded to our customers.
We
sell to distributors and
operators in many customer
channels
including foodservice, vending, and supermarket bakeries.
North America Foodservice net sales were as follows:
Fiscal 2022
Fiscal 2022 vs. 2021
Percentage Change
Fiscal 2021
Net sales (in millions)
$
1,845.7
24
%
$
1,487.8
Contributions from Annie’svolume growth (a)
5
pts
Net price realization and mix
19
pts
Foreign currency exchange
Flat
Note: Table may
not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
North
America
Foodservice
net
sales
increased
24
percent
in
fiscal
2022,
driven
by
favorable
price
realization
and
mix,
including
market index pricing on bakery flour, and an
increase in contributions from volume growth.
The components of North America Foodservice organic
net sales growth are shown in the following table:
Fiscal 2022 vs. 2021
Percentage Change
Contributions from organic volume growth (a)
5
pts
Organic net price realization and mix
19
pts
Organic net sales growth
24
pts
Foreign currency exchange
Flat
Net sales growth
24
pts
Note: Table may
not foot due to rounding
(a)
Measured in tons based on the standard weight of our product shipments.
25
The 24
percent increase
in North
America
Foodservice
organic
net sales
growth
in fiscal
2022
was driven
by favorable
organic
net
price
realization
and
mix,
including
market
index
pricing
on
bakery
flour,
and
an
increase
in
contributions
from
organic
volume
growth.
Segment
operating
profit
increased
26
percent
to
$256 million
in
fiscal
2022,
compared
to
$203 million
in
fiscal
2021,
primarily
driven by favorable net price
realization and mix and
an increase in contributions from
volume growth,
partially offset by higher
input
costs.
Segment
operating
profit
increased
26
percent
on
a
constant-currency
basis
in
fiscal
2022
compared
to
fiscal
2021
(see
the
“Non-GAAP Measures” section below for our use of this measure not
defined by GAAP).
UNALLOCATED CORPORATE
ITEMS
Unallocated
corporate
items
include
corporate
overhead
expenses,
variances
to
planned
domestic
employee
benefits
and
incentives,
certain
charitable
contributions,
restructuring
initiative
project-related
costs,
gains
and
losses
on
corporate
investments,
and
other
items
that
are
not
part
of
our
measurement
of
segment
operating
performance.
These
include
gains
and
losses
arising
from
the
revaluation
of
certain
grain
inventories
and
gains
and
losses
from
mark-to-market
valuation
of
certain
commodity
positions
until
passed
back
to
our
operating
segments.
These
items
affecting
operating
profit
are
centrally
managed
at
the
corporate
level
and
are
excluded
from
the
measure
of
segment
profitability
reviewed
by
executive
management.
Under
our
supply
chain
organization,
our
manufacturing, warehouse, and distribution
activities are substantially integrated across
our operations in order to maximize
efficiency
and
productivity.
As
a
result,
fixed
assets
and
depreciation
and
amortization
expenses
are
neither
maintained
nor
available
by
operating segment.
In
fiscal
2022,
unallocated
corporate
expense
increased
$191
million
to
$403
million
compared
to
$212 million
last
year.
In
fiscal
2022,
we
recorded
a
$133
million
net
decrease
in
expense
related
to
mark-to-market
valuation
of
certain
commodity
positions
and
grain inventories,
compared to a $139
million net decrease in
expense in the
prior year.
In fiscal 2022,
we recorded $15
million of net
losses related to
the sale of
corporate investments
and valuation adjustments,
compared to $76
million of net
gains in fiscal
2021. We
recorded $22
million of integration
costs related to
our acquisition
of Tyson
Foods’ pet
treats business and
$73 million
of transaction
costs primarily
related
to the
sale of
our interests
in
Yoplait
SAS, (please Yoplait
Marques
SNC, and
Liberté
Marques
Sàrl,
the sale
of our
European dough businesses,
the definitive agreements
to sell our Helper
main meals and Suddenly
Salad side dishes business,
and the
definitive agreement
to acquire TNT
Crust in fiscal
2022, compared
to $10 million
of transaction costs
in fiscal 2021.
In addition, we
recorded a
$22 million
recovery related
to a
Brazil indirect
tax item
in fiscal
2022 compared
to a
$9 million
recovery in
fiscal 2021.
We
recorded a $13
million insurance recovery
in fiscal 2022. In
fiscal 2021, we
recorded a $4
million favorable adjustment
related to
a product recall in fiscal 2020 in our international Green Giant business.
IMPACT OF INFLATION
We
experienced broad
based global input
cost inflation
of 8 percent
in fiscal 2022
and 4 percent
in fiscal 202
1. We
expect input
cost
inflation of
approximately 14
percent in
fiscal 2023.
We
attempt to
minimize the
effects of
inflation through
HMM, SRM,
planning,
and operating practices. Our risk management practices are discussed in Item
7A of this report.
LIQUIDITY AND CAPITAL
RESOURCES
The primary source of our
liquidity is cash flow from
operations. Over the most recent
two-year period, our operations have
generated
$6.3 billion
in cash.
A substantial
portion of
this operating
cash flow
has been
returned to
shareholders through
dividends and
share
repurchases.
We
also
use
cash
from
operations
to
fund
our
capital
expenditures,
acquisitions,
and
debt
service.
We
typically
use
a
combination
of
cash,
notes
payable,
and
long-term
debt,
and
occasionally
issue
shares
of
common
stock,
to
finance
significant
acquisitions.
As of
May
29,
2022,
we
had
$523 million
of
cash
and
cash
equivalents
held
in
foreign
jurisdictions.
In
anticipation
of
repatriating
funds
from
foreign
jurisdictions,
we
record
local
country
withholding
taxes
on
our
international
earnings,
as
applicable.
We
may
repatriate our
cash and
cash equivalents
held by
our foreign
subsidiaries without
such funds
being subject
to further
U.S. income
tax
liability. Earnings
prior to fiscal 2018 from our foreign subsidiaries remain permanently reinvested
in those jurisdictions.
26
Cash Flows from Operations
Fiscal Year
In Millions
2022
2021
Net earnings, including earnings attributable to redeemable and noncontrolling
interests
$
2,735.0
$
2,346.0
Depreciation and amortization
570.3
601.3
After-tax earnings from joint ventures
(111.7)
(117.7)
Distributions of earnings from joint ventures
107.5
95.2
Stock-based compensation
98.7
89.9
Deferred income taxes
62.2
118.8
Pension and other postretirement benefit plan contributions
(31.3)
(33.4)
Pension and other postretirement benefit plan costs
(30.1)
(33.6)
Divestitures (gain) loss
(194.1)
53.5
Restructuring, impairment, and other exit (recoveries) costs
(117.1)
150.9
Changes in current assets and liabilities, excluding the effects of
acquisition and divestitures
277.4
(155.9)
Other, net
(50.7)
(131.8)
Net cash provided by operating activities
$
3,316.1
$
2,983.2
During
fiscal
2022,
cash
provided
by
operations
was
$3,316 million
compared
to
$2,983 million
in
the
same
period
last
year.
The
$333 million increase was primarily
driven by a $433 million change in
current assets and liabilities and a
$389 million increase in net
earnings,
partially
offset
by
a
$268
million
change
in
restructuring
��
costs and
a
$248
million
change
in
divestitures
gain.
The
$433
million change in current assets and liabilities was primarily
driven by a $269 million change in inventories
and a $238 million change
in other
current liabilities, primarily
driven by changes
in income taxes
payable and the
fair value of
certain currency
and commodity
derivatives. These were partially offset by a $194
million change in receivables.
We
strive to grow core
working capital at or below
the rate of growth in
our net sales. For
fiscal 2022, core working
capital decreased
117 percent,
compared to a net sales
increase of 5 percent.
As of May 29, 2022,
our core working capital
balance was a net liability of
$423 million
compared to
a net liability
of $194
million in
fiscal 2021.
The $229
million change
was primarily
due to an
increase in
accounts payable in fiscal 2022 primarily due to input cost inflation.
Cash Flows from Investing Activities
Fiscal Year
In Millions
2022
2021
Purchases of land, buildings, and equipment
$
(568.7)
$
(530.8)
Acquisitions, net of cash acquired
(1,201.3)
-
Investments in affiliates, net
15.4
15.5
Proceeds from disposal of land, buildings, and equipment
3.3
2.7
Proceeds from divestitures, net of cash divested
74.1
2.9
Other, net
(13.5)
(3.1)
Net cash used by investing activities
$
(1,690.7)
$
(512.8)
In
fiscal
2022,
we
used
$1,691 million
of
cash
through
investing
activities
compared
to
$513 million
in
fiscal
2021.
We
invested
$569 million in land, buildings, and equipment in fiscal 2022, an
increase of $38 million from fiscal 2021.
During fiscal 2022, we acquired Tyson
Foods’ pet treats business for an aggregate purchase price of $1.2 billion.
During fiscal
2022, we
sold our
interests in
Yoplait
SAS, Yoplait
Marques SNC,
and Liberté
Marques Sàrl
for cash
proceeds of
$32
million, net
of cash divested
as part of
the sale. We
also completed
the sale of
our European dough
businesses in fiscal
2022 for
cash
proceeds of $42 million.
We
expect
capital
expenditures
to
be
approximately
4.0
percent
of
reported
net
sales
in
fiscal
2023.
These
expenditures
will
fund
initiatives that are expected to fuel growth, support innovative products,
and continue HMM initiatives throughout the supply chain.
27
Cash Flows from Financing Activities
Fiscal Year
In Millions
2022
2021
Change in notes payable
$
551.4
$
71.7
Issuance of long-term debt
2,203.7
1,576.5
Payment of long-term debt
(3,140.9)
(2,609.0)
Debt exchange participation incentive cash payment
-
(201.4)
Proceeds from common stock issued on exercised options
161.7
74.3
Purchases of common stock for treasury
(876.8)
(301.4)
Dividends paid
(1,244.5)
(1,246.4)
Distributions to redeemable and noncontrolling interest holders
(129.8)
(48.9)
Other, net
(28.0)
(30.9)
Net cash used by financing activities
$
(2,503.2)
$
(2,715.5)
Financing activities
used $2.5 billion
of cash
in fiscal
2022 compared
to $2.7 billion
in fiscal
2021. We
had $386 million
of net
debt
repayments
in
fiscal
2022
compared
to
$961 million
of
net
debt
repayments
in
fiscal
2021.
In
addition,
we
paid
a
participation
incentive of
$201 million related
to a debt
exchange in fiscal
2021. For more
information on our
debt issuances and
payments, please
refer to Note 19 to the Consolidated Financial Statements in Item 8 of this report).

Fiscal 2016 report.

During
fiscal
2022,
we
received
$162 million
of
net sales declined 6 percent
proceeds
from
common
stock
issued
on
exercised
options
compared
to $16,563 million and decreased 2 percent on a constant-currency basis.Operating profit of $2,707 million was 30 percent higher than fiscal 2015. Total segment operating profit was $3,000 million, 1 percent lower than fiscal 2015 and 1 percent higher on a constant-currency basis. In fiscal 2016, net earnings attributable to General Mills were $1,697 million, up 39 percent from $1,221
$74 million in fiscal 2015, and2021.
During fiscal
2022, we reporteddiluted EPSof $2.77 in fiscal 2016, up 41 percent from $1.97 in fiscal 2015. Fiscal 2016 results include restructuring-related charges, a net gain from divestitures, and gains from the mark-to-market valuation of certain commodity positions and grain inventories. Fiscal 2015 results include restructuring-related charges, an indefinite-lived intangible asset impairment charge, tax impacts from the repatriation of historical foreign earnings, losses from the mark-to-market valuation of certain commodity positions and grain inventories, integration costs resulting from the acquisition of Annie’s, and the impact of Venezuela currency devaluation. Diluted EPS excluding these items affecting comparability totaled $2.92 in fiscal 2016, up 2 percent from $2.86 in fiscal 2015. Diluted EPS excluding certain items affecting comparability on a constant-currency basis increased 5 percent compared to fiscal 2015 (see the “Non-GAAP Measures” section below for a description
repurchased 14
million shares
of our use of measures not defined by GAAP).

Net salesdeclined 6 percent to $16,563 million in fiscal 2016 from $17,630 in fiscal 2015. The components of net sales growth are shown in the following table:

Fiscal 2016
vs. 2015

Contributions from volume growth (a)

(3) pts

Net price realization and mix

1   pt 

Foreign currency exchange

(4) pts

Net sales growth

(6) pts
(a)Measured in tons based on the stated weight of our product shipments.

Net sales growth

common
stock for fiscal 2016 included a 1 percent decrease from acquisitions and divestitures, primarily Green Giant and Annie’s, reflecting 2 percentage points of decline from volume (please refer to Note 3 to the Consolidated Financial Statements in Item 8 of this report). The 53rd week in fiscal 2015 contributed approximately 1 percentage point of net sales decline in fiscal 2016, reflecting 1 percentage point of decline from volume.

Cost of salesdecreased $948 million in fiscal 2016 to $10,734

$877 million. In fiscal 2016, product mix drove a $486 million decrease in cost of sales and lower volume drove a $369 million decrease. We recorded a $63 million net decrease in cost of sales related to mark-to-market valuation of certain commodity positions and grain inventories as described in Note 7 to the Consolidated Financial Statements in Item 8 of this report, compared to a net increase of $90 million in fiscal 2015. In fiscal 2016, we recorded $78 million of restructuring charges in cost of sales compared to $60 million in fiscal 2015. We also recorded a $3 million foreign exchange loss in cost of sales in fiscal 2015 related to Venezuela currency devaluation.

We also expect to incur approximately $109 million of restructuring initiative project-related cash costs and recorded $58 million of these costs in cost of sales in fiscal 2016 compared to $13 million in fiscal 2015 (please refer to Note 4 to the Consolidated Financial Statements in Item 8 of this report).

Gross margindeclined 2 percent in fiscal 2016 versus fiscal 2015. Gross margin as a percent of net sales of 35 percent increased 150 basis points compared to fiscal 2015.

Selling, general and administrative (SG&A) expensesdecreased $209 million in fiscal 2016 versus fiscal 2015 primarily due to an 8 percent decrease in advertising and media expense, and savings from Project Catalyst, Project Compass, and our other cost-management initiatives (please refer to Note 4 to the Consolidated Financial Statements in Item 8 of this report). In fiscal 2015, we recorded a $5 million charge in SG&A expenses related to Venezuela currency devaluation and $16 million of integration costs related to our acquisition of Annie’s. SG&A expenses as a percent of net sales decreased 10 basis points compared to fiscal 2015.

During fiscal 2016,
2021, we recorded an $148 milliondivestitures gain (net) from the sale of Green Giant, our subsidiary in Venezuela, and our foodservice business in Argentina (please refer to Note 3 of the Consolidated Financial Statements in Item 8 of this report).

Restructuring, impairment, and other exit coststotaled $151 million in fiscal 2016 compared to $544 million in fiscal 2015.

In fiscal 2015, we made a strategic decision to redirect certain resources supporting our Green Giant business in our U.S. Retail segment to other businesses within the segment. As a result, we recorded a $260 million impairment charge in fiscal 2015 related to theGreen Giant brand intangible asset.

Restructuring charges recorded in restructuring, impairment, and other exit costs were $151 million in fiscal 2016 compared to $284 million in fiscal 2015. Total charges associated with our restructuring initiatives recognized in fiscal 2016 and 2015 consisted of the following:

   As Reported   Estimated 
In Millions  Fiscal 2016   Fiscal 2015   Future   Total   Savings (b) 
    Charge  Cash   Charge  Cash   Charge   Cash   Charge   Cash   

Compass

  $54.7   $36.1    $—   $—    $5    $24    $60    $60       

Total Century (a)

   182.6    34.1     181.8    12.0     75     120     439     166       

Catalyst

   (7.5)   47.8     148.4    45.0     —     25     141     118       

Combination of certain operational facilities

   —    4.5     13.9    6.5     1     2     15     12       

Other

   —    0.1     (0.6)   0.1     —     —     —     —       

Total restructuring charges (a)

   229.8    122.6     343.5    63.6     81     171     655     356       

Project-related costs

   57.5    54.5     13.2    9.7     38     45     109     109       

Restructuring charges and project-related costs

  $287.3   $177.1    $356.7   $73.3    $119    $216    $764    $465       

 

   

Future cumulative annual savings

                $600  
                                            
(a)Includes restructuring charges recorded in cost of sales of $78.4 million in fiscal 2016 and $59.6 million in fiscal 2015.
(b)Cumulative annual savings estimated by fiscal 2018. Includes savings from SG&A cost reduction projects.

Please refer to Note 4 to the Consolidated Financial Statements in Item 8 of this report for more information regarding our restructuring activities.

Interest, netfor fiscal 2016 totaled $304 million, $12 million lower than fiscal 2015, primarily driven by lower average debt balances, partially offset by changes in the mix of debt.

Our consolidatedeffective tax ratefor fiscal 2016 was 31.4 percent compared to 33.3 percent in fiscal 2015. The 1.9 percentage point decrease was primarily due to the unfavorable impact of our repatriation of historical foreign earnings in fiscal 2015, partially offset by non-deductible expenses related to the Green Giant divestiture in fiscal 2016. Our effective tax rate excluding certain items affecting comparability was 29.8 percent in fiscal 2016 compared to 30.5 percent in fiscal 2015 (see the “Non-GAAP Measures” section below for a description of our use of measures not defined by GAAP).

After-tax earnings from joint venturesfor fiscal 2016 increased to $88 million compared to $84 million in fiscal 2015 primarily driven by favorable input costs in fiscal 2016, favorable product mix for Häagen-Dazs Japan, Inc. (HDJ), and lapping an impairment charge of $3 million at Cereal Partners Worldwide (CPW) in South Africa in fiscal 2015, partially offset by unfavorable foreign currency. On a constant-currency basis, after-tax earnings from joint ventures increased 12 percent (see the “Non-GAAP Measures” section below for a description of our use of these measures not defined by GAAP). The change in net sales for each joint venture is set forth in the following table:

   As Reported  Constant-Currency Basis 
    Fiscal 2016
vs. 2015		  

Fiscal 2016

vs. 2015

 

CPW

   (12)%   Flat  

HDJ

   Flat    5  

Joint Ventures

   (10)%   1% 
          

The components of our joint ventures’ net sales growth are shown in the following table:

Fiscal 2016 vs. Fiscal 2015CPWHDJ

Contributions from volume growth (a)

Flat11 pts

Net price realization and mix

Flat(6) pts

Foreign currency exchange

(12) pts(5) pts

Net sales growth

(12) ptsFlat
(a)Measured in tons based on the stated weight of our product shipments.

Average diluted shares outstandingdecreased by 7 million in fiscal 2016 from fiscal 2015 due to share repurchases, partially offset by option exercises.

FISCAL 2015 CONSOLIDATED RESULTS OF OPERATIONS

Fiscal 2015 had 53 weeks compared to 52 weeks in fiscal 2014.

Fiscal 2015 net sales declined 2 percent to $17,630 million and increased 1 percent on a constant-currency basis.Operating profit of $2,077 million was 30 percent lower than fiscal 2014. Total segment operating profit was $3,035 million, 4 percent lower than fiscal 2014 and 2 percent lower on a constant-currency basis. In fiscal 2015, net earnings attributable to General Mills were $1,221 million, down 33 percent from $1,824 million in fiscal 2014, and we reporteddiluted EPSof $1.97 in fiscal 2015, down 30 percent from $2.83 in fiscal 2014. Fiscal 2015 results include restructuring-related charges, an indefinite-lived intangible asset impairment charge, tax impacts from the repatriation of historical foreign earnings, losses from the mark-to-market valuation of certain commodity positions and grain inventories, integration costs resulting from the acquisition of Annie’s, and the impact of Venezuela currency devaluation. Fiscal 2014 results include the impact of Venezuela currency devaluation, a gain on the divestiture of certain grain elevators, losses from the mark-to-market valuation of certain commodity positions and grain inventories, and restructuring charges related to our fiscal 2012 productivity and cost savings plan. Diluted EPS excluding these items affecting comparability totaled $2.86 in fiscal 2015, up 1 percent from $2.82 in fiscal 2014 (see the “Non-GAAP Measures” section below for a description of our use of these measures not defined by GAAP).

Net salesdeclined 2 percent to $17,630 million in fiscal 2015 from $17,910 in fiscal 2014. The components of net sales growth are shown in the following table:

Fiscal 2015
vs. 2014

Contributions from volume growth (a)

(1)  pt 

Net price realization and mix

2   pts

Foreign currency exchange

(3)  pts

Net sales growth

(2)  pts
(a)Measured in tons based on the stated weight of our product shipments.

The 53rd week in fiscal 2015 contributed approximately 1 percentage point of net sales growth, reflecting 1 percentage point of growth from volume.

Cost of salesincreased $141 million in fiscal 2015 to $11,681 million. In fiscal 2015, we recorded a $90 million net increase in cost of sales related to mark-to-market valuation of certain commodity positions and grain inventories, compared to a net decrease of $49 million in fiscal 2014. In fiscal 2015, we recorded $60 million of restructuring charges in cost of sales. Product mix drove a $17 million increase in cost of sales. We also recorded a $3 million foreign exchange loss in fiscal 2015 related to Venezuela currency devaluation compared to a $23 million loss in fiscal 2014. Lower volume drove a $68 million decrease in cost of sales in fiscal 2015. We recorded $13 million of restructuring initiative project-related cash costs in cost of sales in fiscal 2015.

Gross margindeclined 7 percent in fiscal 2015 versus fiscal 2014. Gross margin as a percent of net sales of 34 percent decreased 190 basis points compared to fiscal 2014.

SG&A expensesdecreased $146 million in fiscal 2015 versus fiscal 2014 primarily due to a

repurchased 5 percent decrease in advertising and media expense, and savings from Project Catalyst and our other cost management initiatives. In fiscal 2015, we recorded a $5 million charge in SG&A expenses related to Venezuela currency devaluation compared to a $39 million charge in fiscal 2014. In addition, we recorded $16 million of integration costs in SG&A expenses in fiscal 2015 related to our acquisition of Annie’s. SG&A expenses as a percent of net sales decreased 50 basis points compared to fiscal 2014.

There were no divestitures in fiscal 2015. During fiscal 2014, we recorded adivestiture gainof $66 million related to the sale of certain grain elevators in our U.S. Retail segment.

Restructuring, impairment, and other exit coststotaled $544 million in fiscal 2015 compared to $4 million in fiscal 2014.

In fiscal 2015, we made a strategic decision to redirect certain resources supporting our Green Giant business in our U.S. Retail segment to other businesses within the segment. As a result, we recorded a $260 million impairment charge in fiscal 2015 related to theGreen Giant brand intangible asset.

Restructuring charges recorded in restructuring, impairment, and other exit costs were $284 million in fiscal 2015 compared to $4 million in fiscal 2014. Total charges associated with our restructuring initiatives recognized in fiscal 2015 and 2014 consisted of the following:

   As Reported 
In Millions  Fiscal 2015   Fiscal 2014 
    Charge  Cash   Charge   Cash 

Total Century (a)

  $181.8   $12.0    $—    $—  

Catalyst

   148.4    45.0     —     —  

International

   13.9    6.5     1.0     6.0  

Other

   (0.6)   0.1     2.6     16.4  

Total restructuring charges (a)

   343.5    63.6     3.6     22.4  

Project-related costs recorded in costs of sales

   13.2    9.7     —     —  

Restructuring charges and project-related costs

  $356.7   $73.3    $3.6    $22.4  

 

 
(a)Includes $59.6 million of restructuring charges recorded in cost of sales during fiscal 2015.

Please refer to Note 4 to the Consolidated Financial Statements in Item 8 of this report for more information regarding our restructuring activities.

Interest, netfor fiscal 2015 totaled $315 million, $13 million higher than fiscal 2014, primarily driven by higher average debt balances, partially offset by changes in the mix of debt.

Our consolidatedeffective tax ratefor fiscal 2015 of 33.3 percent was consistent with fiscal 2014. The 4.5 percentage point impact resulting from the repatriation of $606 million of historical foreign earnings in fiscal 2015 was offset by changes in earnings mix by country, certain favorable discrete items, and favorable state tax rate changes. Our effective tax rate excluding certain items affecting comparability was 30.5 percent in fiscal 2015 compared to 32.2 percent in fiscal 2014 (see the “Non-GAAP Measures” section below for a description of our use of measures not defined by GAAP).

After-tax earnings from joint venturesfor fiscal 2015 decreased to $84 million compared to $90 million in fiscal 2014 primarily driven by unfavorable foreign currency exchange and an asset impairment charge of $3 million at CPW in South Africa. On a constant-currency basis, after-tax earnings from joint ventures were flat (see the “Non-GAAP Measures” section below for a description of our use of this measure not defined by GAAP). The change in net sales for each joint venture is set forth in the following table:

   As Reported  Constant Currency Basis 
    Fiscal 2015
vs. 2014		  

Fiscal 2015

vs. 2014

 

CPW

   (10)%   (2)% 

HDJ

   (4)   6  

Joint Ventures

   (9)%   (1)% 
          

The components of our joint ventures’ net sales growth are shown in the following table:

Fiscal 2015 vs. Fiscal 2014CPWHDJ

Contributions from volume growth (a)

(1)  pt (5) pts

Net price realization and mix

(1)  pt 11  pts

Foreign currency exchange

(8)  pts(10) pts

Net sales growth

(10)  pts(4) pts
(a)Measured in tons based on the stated weight of our product shipments.

Average diluted shares outstandingdecreased by 27 million in fiscal 2015 from fiscal 2014 due to share repurchases.

RESULTS OF SEGMENT OPERATIONS

Our businesses are organized into three operating segments: U.S. Retail; International; and Convenience Stores and Foodservice.

In fiscal 2015, we changed how we assess segment operating performance to exclude the asset and liability remeasurement impact from hyperinflationary economies. This impact is now included in unallocated corporate items. All periods presented have been changed to conform to this presentation.

The following tables provide the dollar amount and percentage of net sales and operating profit from each segment for fiscal years 2016, 2015, and 2014:

   Fiscal Year 
   2016  2015  2014 

In Millions

   Dollars     
 		Percent of
Total		  
  		  Dollars     
 		Percent of
Total		  
  		  Dollars     
 		Percent of
Total		  
  

Net Sales

          

U.S. Retail

  $10,007.1     60%  $10,507.0     60%  $10,604.9     59% 

International

   4,632.2     28    5,128.2     29    5,385.9     30  

Convenience Stores and Foodservice

   1,923.8     12    1,995.1     11    1,918.8     11  

Total

  $16,563.1     100%  $17,630.3     100%  $17,909.6     100% 
                             

Segment Operating Profit

          

U.S. Retail

  $2,179.0     72%  $2,159.3     71%  $2,311.5     73% 

International

   441.6     15    522.6     17    535.1     17  

Convenience Stores and Foodservice

   378.9     13    353.1     12    307.3     10  

Total

  $2,999.5     100%  $3,035.0     100%  $3,153.9     100% 
                             

Segment operating profit excludes unallocated corporate items, net gain on divestitures, and restructuring, impairment, and other exit costs because these items affecting operating profit are centrally managed at the corporate level and are excluded from the measure of segment profitability reviewed by our executive management.

U.S. RETAIL SEGMENT

In fiscal 2015, we realigned certain operating units within our U.S. Retail operating segment. We also changed the name of our Yoplait operating unit to Yogurt and our Big G operating unit to Cereal. Frozen Foods transitioned into Meals and Baking Products. Small Planet Foods transitioned into Snacks, Cereal, and Meals. The Yogurt operating unit was unchanged. We revised the amounts previously reported in the net sales and net sales percentage change by operating unit within our U.S. Retail segment to conform to the new operating unit structure. These realignments had no effect on previously reported consolidated net sales, operating segments’ net sales, operating profit, segment operating profit, net earnings attributable to General Mills, or EPS. In addition, results from the acquired Annie’s business are included in the Meals and Snacks operating units.

Our U.S. Retail segment reflects business with a wide variety of grocery stores, mass merchandisers, membership stores, natural food chains, drug, dollar and discount chains, and e-commerce grocery providers operating throughout the United States. Our product categories in this business segment are ready-to-eat cereals, refrigerated yogurt, soup, meal kits, refrigerated and frozen dough products, dessert and baking mixes, frozen pizza and pizza snacks, grain, fruit and savory snacks, and a wide variety of organic products including meal kits, granola bars, and cereal.

U.S. Retail net sales were as follows:

    

Fiscal

2016

   Fiscal 2016
vs. 2015
Percentage Change		   

Fiscal

2015

   Fiscal 2015
vs. 2014
Percentage Change		   

Fiscal

2014

 

Net sales (in millions)

  $10,007.1     (5)%    $10,507.0     (1)%    $10,604.9  

Contributions from volume growth (a)

     (7) pts       (1) pt    

Net price realization and mix

     2 pts       Flat    
                          
(a)Measured in tons based on the stated weight of our product shipments.

The net impact of acquisitions and divestitures, primarily Green Giant and Annie’s, decreased net sales growth by 2 percentage points in fiscal 2016, reflecting 3 percentage points of decline from volume. The 53rd week in fiscal 2015 contributed approximately 1 percentage point of net sales decline in fiscal 2016, reflecting 2 percentage points of decline from volume. In fiscal 2015, the acquisition of Annie’s added 1 percentage point of net sales growth, reflecting 1 percentage point of growth from volume. The 53rd week contributed approximately 1 percentage point of net sales growth in fiscal 2015, reflecting 1 percentage point of growth from volume.

Net sales for our U.S. retail operating units are shown in the following table:

   Fiscal Year 

In Millions

   2016     2015     2014  

Meals (a)

  $2,393.9    $2,674.3    $2,772.4  

Cereal

   2,312.8     2,330.1     2,410.2  

Snacks (a)

   2,094.3     2,134.4     1,997.8  

Baking Products

   1,903.4     1,969.8     2,096.1  

Yogurt and other

   1,302.7     1,398.4     1,328.4  

Total

  $10,007.1    $10,507.0    $10,604.9  
                
(a)Fiscal 2016 net sales for the Meals and Snacks operating units include an additional month of results from Annie’s.

U.S. Retail net sales percentage change by operating unit are shown in the following table:

    

Fiscal 2016

vs. 2015

  Fiscal 2015
vs. 2014		 

Meals (a)

   (10)%   (4)% 

Yogurt

   (7)   5  

Baking Products

   (3)   (6) 

Snacks (a)

   (2)   7  

Cereal

   (1)   (3) 

Total

   (5)%   (1)% 
          
(a)The impact due to an additional month of results from Annie’s was not material to the Meals and Snacks operating units. The impact to fiscal 2016 net sales growth for the U.S. Retail segment was not material.

Segment operating profit of $2,179 million in fiscal 2016 increased $20 million, or 1 percent, from fiscal 2015. The increase was primarily driven by high levels of promotional expense in fiscal 2015, cost savings from Project Catalyst and other cost management initiatives, a decrease in media and advertising expenses, and lower supply chain costs, partially offset by the net impact of the Green Giant divestiture and Annie’s acquisition.

Segment operating profit of $2,159 million in fiscal 2015 declined $152 million, or 7 percent, from fiscal 2014. The decrease was primarily driven by lower volume and an increase in supply chain costs, partially offset by a 6 percent reduction in media and advertising expenses.

INTERNATIONAL SEGMENT

Our International segment consists of retail and foodservice businesses outside of the United States. Our product categories include ready-to-eat cereals, shelf stable and frozen vegetables, meal kits, refrigerated and frozen dough products, dessert and baking mixes, frozen pizza snacks, refrigerated yogurt, grain and fruit snacks, and super-premium ice cream and frozen desserts. We also sell super-premium ice cream and frozen desserts directly to consumers through owned retail shops. Our International segment also includes products manufactured in the United States for export, mainly to Caribbean and Latin American markets, as well as products we manufacture for sale to our international joint ventures. Revenues from export activities and franchise fees are reported in the region or country where the end customer is located.

International net sales were as follows:

    Fiscal
2016		   

Fiscal 2016

vs. 2015
Percentage Change

   Fiscal
2015		   

Fiscal 2015

vs. 2014
Percentage Change

   Fiscal
2014		 

Net sales (in millions)

  $4,632.2     (10)%      $5,128.2     (5)%       $5,385.9  

Contributions from volume growth (a)

     3  pts       Flat    

Net price realization and mix

     Flat       6  pts    

Foreign currency exchange

     (13) pts       (11) pts    
                          
(a)Measured in tons based on the stated weight of our product shipments.

The impact of acquisition and divestitures, primarily Green Giant, decreased net sales growth by 1 percentage point in fiscal 2016. The 53rd week in fiscal 2015 contributed approximately 1 percentage point of net sales decline in fiscal 2016, reflecting 1 percentage point of decline from volume. The 53rd week contributed approximately 1 percentage point of net sales growth in fiscal 2015, reflecting 1 percentage point of growth from volume.

Net sales for our International segment by geographic region are shown in the following table:

   Fiscal Year 

In Millions

   2016     2015     2014  

Europe (a)

  $1,998.0    $2,126.5    $2,188.8  

Canada

   929.5     1,105.1     1,195.3  

Asia/Pacific

   995.7     1,023.5     981.8  

Latin America

   709.0     873.1     1,020.0  

Total

  $4,632.2    $5,128.2    $5,385.9  
                
(a)Fiscal 2016 net sales for the Europe region include an additional month of results from Yoplait SAS.

International percentage change in net sales by geographic region are shown in the following table:

   Percentage Change in
Net Sales as Reported		  Percentage Change in
Net Sales on Constant
Currency Basis (a)		 
    
 		Fiscal 2016
vs. 2015		  
  		  
 		Fiscal 2015
vs. 2014		  
  		  
 		Fiscal 2016
vs. 2015		  
  		  
 		Fiscal 2015
vs. 2014		  
  

Europe (b)

   (6)%   (3)%   3%   5% 

Canada

   (16)   (8)   (4)   Flat  

Asia/Pacific

   (3)   4    1    5  

Latin America

   (19)   (14)   12    17  

Total

   (10)%   (5)%   3%   6% 
                  
(a)See the “Non-GAAP Measures” section below for our use of this measure.
(b)Fiscal 2016 percentage change in net sales as reported for the Europe region includes 3 percentage points of growth due to an additional month of results from Yoplait SAS. The impact to fiscal 2016 net sales growth for the International segment was not material.

Segment operating profit for fiscal 2016 declined 15 percent to $442 million from $523 million in fiscal 2015, primarily driven by unfavorable foreign currency exchange, an increase in SG&A expenses, and the impact of the Green Giant divestiture. International segment operating profit decreased 3 percent on a constant-currency basis in fiscal 2016 compared to fiscal 2015 (see the “Non-GAAP Measures” section below for our use of this measure).

Segment operating profit for fiscal 2015 declined 2 percent to $523 million from $535 million in fiscal 2014, primarily driven by unfavorable foreign currency exchange and higher input costs, partially offset by favorable net price realization and mix. International segment operating profit increased 9 percent on a constant-currency basis in fiscal 2015 compared to fiscal 2014 (see the “Non-GAAP Measures” section below for our use of this measure).

CONVENIENCE STORES AND FOODSERVICE SEGMENT

In our Convenience Stores and Foodservice segment our major product categories are ready-to-eat cereals, snacks, refrigerated yogurt, frozen meals, unbaked and fully baked frozen dough products, and baking mixes. Many products we sell are branded to the consumer and nearly all are branded to our customers. We sell to distributors and operators in many customer channels including foodservice, convenience stores, vending, and supermarket bakeries. Substantially all of this segment’s operations are located in the United States.

Convenience Stores and Foodservice net sales were as follows:

   Fiscal
2016		   

Fiscal 2016

vs. 2015
Percentage Change

   2015   

Fiscal 2015

vs. 2014
Percentage Change

   Fiscal
2014		 

Net sales (in millions)

 $1,923.8     (4)%      $1,995.1     4%      $1,918.8  

Contributions from volume growth (a)

    (3) pts       1 pt     

Net price realization and mix

    (1) pt        3 pts    

Foreign currency exchange

    NM       NM    
                         
(a)Measured in tons based on the stated weight of our product shipments.

The 53rd week in fiscal 2015 contributed approximately 2 percentage points of net sales decline in fiscal 2016, reflecting 2 percentage points of decline from volume. In fiscal 2015, the 53rd week contributed approximately 2 percentage points of net sales growth, reflecting 2 percentage points of growth from volume.

In fiscal 2016, segment operating profit was $379 million, up 7 percent from $353 million in fiscal 2015 primarily driven by favorable product mix and cost savings from Project Catalyst and other cost management initiatives. In fiscal 2015, segment operating profit was up 15 percent from $307 million in fiscal 2014 primarily driven by favorable net price realization and mix and higher volume.

UNALLOCATED CORPORATE ITEMS

Unallocated corporate items include corporate overhead expenses, variances to planned domestic employee benefits and incentives, contributions to the General Mills Foundation, asset and liability remeasurement impact of hyperinflationary economies, restructuring initiative project-related costs, and other items that are not part of our measurement of segment operating performance. This includes gains and losses from the mark-to-market valuation of certain commodity positions until passed back to our operating segments in accordance with our policy as discussed in Note 7 to the Consolidated Financial Statements in Item 8 of this report.

For fiscal 2016, unallocated corporate expense totaled $289 million compared to $414 million last year. In fiscal 2016, we recorded a $63 million net decrease in expense related to mark-to-market valuation of certain commodity positions and grain inventories compared to a $90 million net increase in expense in the prior year. In addition, we recorded $78 million of restructuring charges, and $58 million of restructuring initiative project-related costs in cost of sales in fiscal 2016, compared to $60 million of restructuring charges and $13 million of restructuring initiative project-related costs in cost of sales in fiscal 2015. We recorded an $8 million foreign exchange loss related to the remeasurement of assets and liabilities of our Venezuelan subsidiary in fiscal 2015. We also recorded $16 million of integration costs resulting from the acquisition of Annie’s in fiscal 2015. The decrease in unallocated corporate expense also reflects cost savings from Project Catalyst and other cost management initiatives.

For fiscal 2015, unallocated corporate expense totaled $414 million compared to $258 million in fiscal 2014. In fiscal 2015, we recorded a $90 million net increase in expense related to mark-to-market valuation of certain commodity positions and grain inventories compared to a $49 million net decrease in fiscal 2014. In addition, we recorded $60 million of restructuring charges and $13 million of restructuring initiative project-related costs in cost of sales in fiscal 2015. In fiscal 2015, we recorded an $8 million foreign exchange loss related to the remeasurement of assets and liabilities of our Venezuelan subsidiary compared to $62 million in fiscal 2014. We also recorded $16 million of integration costs resulting from the acquisition of Annie’s in fiscal 2015.

Venezuela is a highly inflationary economy and as such, we remeasured the value of the assets and liabilities of our former Venezuelan subsidiary based on the exchange rate at which we expected to remit dividends in U.S. dollars from the SIMADI market. In fiscal 2015, we recorded an $8 million foreign currency exchange loss related to remeasurement. In fiscal 2016, we sold our General Mills de Venezuela CA subsidiary to a third party and exited our business in Venezuela. As a result of this transaction, we recorded a loss on the sale of $38 million pre-tax.

In fiscal 2015, we changed how we assess segment operating performance to exclude the asset and liability remeasurement impact from hyperinflationary economies. This impact is now included in unallocated corporate items. All periods presented have been changed to conform to this presentation.

IMPACT OF INFLATION

Our gross margin performance in fiscal 2016 reflects the impact of 2 percent input cost inflation, primarily on commodity inputs. We expect input cost inflation of 2 percent in fiscal 2017. We attempt to minimize the effects of inflation through HMM, planning, and operating practices. Our risk management practices are discussed in Item 7A of this report.

LIQUIDITY

The primary source of our liquidity is cash flow from operations. Over the most recent three-year period, our operations have generated $7.7 billion in cash. A substantial portion of this operating cash flow has been returned to shareholders through share repurchases and dividends. We also use cash from operations to fund our capital expenditures and acquisitions. We typically use a combination of cash, notes payable, and long-term debt to finance significant acquisitions and major capital expansions.

As of May 29, 2016, we had $645 million of cash and cash equivalents held in foreign jurisdictions, which will be used to fund foreign operations and acquisitions. There is currently no need to repatriate these funds in order to meet domestic funding obligations or scheduled cash distributions. If we choose to repatriate historical earnings held in foreign jurisdictions, we intend to do so only in a tax-neutral manner.

Cash Flows from Operations

   Fiscal Year 

In Millions

   2016    2015    2014  

Net earnings, including earnings attributable to redeemable and noncontrolling interests

  $1,736.8   $1,259.4   $1,861.3  

Depreciation and amortization

   608.1    588.3    585.4  

After-tax earnings from joint ventures

   (88.4)   (84.3)   (89.6) 

Distributions of earnings from joint ventures

   75.1    72.6    90.5  

Stock-based compensation

   89.8    106.4    108.5  

Deferred income taxes

   120.6    25.3    172.5  

Tax benefit on exercised options

   (94.1)   (74.6)   (69.3) 

Pension and other postretirement benefit plan contributions

   (47.8)   (49.5)   (49.7) 

Pension and other postretirement benefit plan costs

   118.1    91.3    124.1  

Divestitures (gain)

   (148.2)   —    (65.5) 

Restructuring, impairment, and other exit costs

   107.2    531.1    (18.8) 

Changes in current assets and liabilities, excluding the effects of acquisitions and divestitures

   258.2    214.7    (32.2) 

Other, net

   (105.6)   (137.9)   (76.2) 

Net cash provided by operating activities

  $2,629.8   $2,542.8   $2,541.0  
              

In fiscal 2016, our operations generated $2.6 billion of cash compared to $2.5 billion in fiscal 2015. The $477 million increase in net earnings included a $96 million change in deferred income taxes and a $148 million net gain on divestitures and was also offset by a $424 million decrease in non-cash restructuring charges. The $43 million change in current assets and liabilities was primarily driven by the timing of accounts payable including the impact of longer terms offset by the timing of inventory build.

We strive to grow core working capital at or below the rate of growth in our net sales. For fiscal 2016, core working capital decreased 41 percent, primarily due to an increase in accounts payable, largely driven by longer payables terms and a decrease in inventory, compared to a net sales decline of 6 percent. In fiscal 2015, core working capital decreased 13 percent, compared to a net sales decline of 2 percent, and in fiscal 2014, core working capital decreased 9 percent, compared to net sales growth of 1 percent.

In fiscal 2015, our operations generated $2.5 billion of cash, flat compared to fiscal 2014. The $247 million change in current assets and liabilities was primarily driven by the timing of trade and promotion accruals, changes in tax accruals, and changes in derivative positions. This was largely offset by lower net earnings, which included a $260 million non-cash impairment charge, $271 million of non-cash restructuring charges, and a $147 million change in net deferred income taxes.

Cash Flows from Investing Activities

   Fiscal Year 
In Millions  2016  2015  2014 

Purchases of land, buildings, and equipment

  $(729.3)  $(712.4)  $(663.5) 

Acquisitions, net of cash acquired

   (84.0)   (822.3)   —  

Investments in affiliates, net

   63.9    (102.4)   (54.9) 

Proceeds from disposal of land, buildings, and equipment

   4.4    11.0    6.6  

Proceeds from divestitures

   828.5    —    121.6  

Exchangeable note

   21.1    27.9    29.3  

Other, net

   (11.2)   (4.0)   (0.9) 

Net cash provided (used) by investing activities

  $93.4   $(1,602.2)  $(561.8) 
              

In fiscal 2016, we generated $93 million of cash through investing activities compared to a use of $1.6 billion in fiscal 2015. We invested $729 million in land, buildings, and equipment in fiscal 2016, $17 million more than last year. In fiscal 2016, we received proceeds of $828 million from the divestitures of certain businesses, primarily Green Giant. In fiscal 2015, we acquired Annie’s for an aggregate purchase price of $809 million, net of $12 million of cash acquired.

In fiscal 2015, cash used by investing activities increased by $1.0 billion from fiscal 2014. We invested $712 million in land, buildings, and equipment in fiscal 2015, $49 million more than in fiscal 2014. In fiscal 2015, we acquired Annie’s. We made $102 million of investments in affiliates, primarily CPW, in fiscal 2015. In fiscal 2014, we sold certain grain elevators for $124 million in cash.

We expect capital expenditures to be approximately $734 million in fiscal 2017. These expenditures will fund initiatives that are expected to fuel International growth, support innovative products, and continue HMM initiatives throughout the supply chain.

Cash Flows from Financing Activities

   Fiscal Year 
In Millions  2016  2015  2014 

Change in notes payable

  $(323.8)  $(509.8)  $572.9  

Issuance of long-term debt

   542.5    2,253.2    1,673.0  

Payment of long-term debt

   (1,000.4)   (1,145.8)   (1,444.8) 

Proceeds from common stock issued on exercised options

   171.9    163.7    108.1  

Tax benefit on exercised options

   94.1    74.6    69.3  

Purchases of common stock for treasury

   (606.7)   (1,161.9)   (1,745.3) 

Dividends paid

   (1,071.7)   (1,017.7)   (983.3) 

Addition of noncontrolling interest

   —    —    17.6  

Distributions to noncontrolling and redeemable interest holders

   (84.3)   (25.0)   (77.4) 

Other, net

   (7.2)   (16.1)   (14.2) 

Net cash used by financing activities

  $(2,285.6)  $(1,384.8)  $(1,824.1) 
              

Net cash used by financing activities increased by $901 million in fiscal 2016. We had $1.4 billion less net debt issuances in fiscal 2016 than the prior year. For more information on our debt issuances and payments, please refer to Note 8 to the Consolidated Financial Statements in Item 8 of this report.

During fiscal 2016, we received $172 million in proceeds from common stock issued on exercised options compared to $164 million in fiscal 2015, an increase of $8 million. During fiscal 2014, we received $108 million in proceeds from common stock issued on exercised options.

In May 2014, our Board of Directors authorized the repurchase of up to 100 million shares of our common stock. Purchases under the authorization can be made in the open market or in privately negotiated transactions, including the use of call options and other derivative instruments, Rule 10b5-1 trading plans, and accelerated repurchase programs. The authorization has no specified termination date.

During fiscal 2016, we repurchased 11 

million shares of our common stock for $607$301 million. During fiscal 2015, we repurchased 22 million shares of our common stock for $1,162 million. During fiscal 2014, we repurchased 36 million shares of our common stock for $1,745 million.

Dividends paid in fiscal 20162022 totaled $1,072
$1,244 million, or $1.78$2.04 per share, a 7 percent per share increase from fiscal 2015.share. Dividends
paid in fiscal 2015 2021
totaled $1,018$1,246 million, or $1.67 per share, an 8 percent per share increase from fiscal 2014 dividends of $1.55 $2.02
per share.

Selected Cash Flows from Joint Ventures

Selected cash flows from our joint ventures are set forth in the following table:

   Fiscal Year 
Inflow (Outflow), in Millions  2016   2015  2014 

Repayments from (advances to) joint ventures, net

  $63.9    $(102.4)  $(54.9) 

Dividends received

   75.1     72.6    90.5  
               

CAPITAL RESOURCES

Total capital consisted of the following:

In Millions  May 29,
2016		   May 31,
2015		 

Notes payable

  $269.8    $615.8  

Current portion of long-term debt

   1,103.4     1,000.4  

Long-term debt

   7,057.7     7,575.3  

Total debt

   8,430.9     9,191.5  

Redeemable interest

   845.6     778.9  

Noncontrolling interests

   376.9     396.0  

Stockholders’ equity

   4,930.2     4,996.7  

Total capital

  $14,583.6    $15,363.1  
           

Fiscal Year
Inflow (Outflow), in Millions
2022
2021
Investments in affiliates, net
$
15.4
$
15.5
Dividends received
107.5
95.2
The following table details the fee-paid committed and uncommitted credit
lines we had available as of May 29, 2016:

In Billions  Facility
Amount		   Borrowed
Amount		 

Credit facility expiring:

    

May 2021

  $2.7    $—  

June 2019

   0.2     0.1  

Total committed credit facilities

   2.9     0.1  

Uncommitted credit facilities

   0.4     0.1  

Total committed and uncommitted credit facilities

  $3.3    $0.2  
  

2022:

In May 2016, we entered into a $2.7 billion fee-paidBillions
Facility Amount
Borrowed Amount
Credit facility expiring:
April 2026
$
2.7
$
-
Total committed
credit facility that is scheduled to expire in May 2021. Concurrent with the execution of thisfacilities
2.7
-
Uncommitted credit facility, we terminated our $1.7 billion facilities
0.6
0.1
Total committed
and $1.0 billionuncommitted credit facilities.

In June 2014, our subsidiary, Yoplait S.A.S. entered into a €200.0 million fee-paid committed credit facility that is scheduled to expire in June 2019.

facilities

$
3.3
$
0.1
To ensure
availability of funds, we maintain bank credit lines sufficient to cover our outstanding notes payable. Commercial paper is a continuing source of short-term financing. Weand have commercial paper programs
available to us in the United States
and Europe. We also
have uncommitted and asset-backed credit lines that support our
foreign operations. The credit facilities contain several covenants, including a requirement to maintain a fixed charge coverage ratio of at least 2.5 times.

Certain of our long-term debt agreements, our credit facilities, and our noncontrolling interests contain restrictive covenants. As of May 29, 2016, we were in compliance with all of these covenants.

We
have $1,103 million of long-term debt maturing material
contractual obligations
that arise
in the next 12 months that is classified as current, including $1,000 million
normal course
of 5.7 percent fixed rate notes due February 2017. We business
and we
believe that
cash flows
from operations together with available short- and long-term debt financing,
will be adequate to meet our liquidity and capital needs for at least the next
12 months.

Certain
of
our
long-term
debt
agreements,
our
credit
facilities,
and
our
noncontrolling
interests
contain
restrictive
covenants.
As
of
May 29, 2022, we were in compliance with all of these covenants.
28
We
have $1,674
million of long-term
debt maturing in
the next 12
months that is
classified as current,
including $500 million
of 2.60
percent
fixed-rate notes
due October
12, 2022,
$100 million
of 7.47
percent fixed-rate
notes due
October 15,
2022, €250
million
of
0.00
percent
fixed-rate
notes
due
November
11,
2022,
€500
million
of
1.00
percent
fixed-rate
notes
due
April
27,
2023,
and
€250
million of
floating rate
notes due May
16, 2023. We
believe that
cash flows from
operations, together
with available
short-
and long-
term debt financing, will be adequate to meet our liquidity and capital
needs for at least the next 12 months.
As of May
29, 2016, 2022,
our total debt,
including the
impact of derivative
instruments designated
as hedges, was 78
77 percent
in fixed-rate
and 23
percent in
floating-rate instruments,
compared to
88 percent
in fixed-rate
and 22 12
percent in
floating-rate instruments compared to 72 percent in fixed-rate and 28 percent in floating-rate instruments
on May 31, 2015.

Return on average total capital was 12.9 percent

30, 2021.
Our net
debt
to operating
cash flow
ratio decreased
to 3.3
in fiscal 2016 compared
2022 from
3.7 in
fiscal 2021,
primarily
driven by
an increase
in
cash
provided
by operations.
Our
net debt
-to-adjusted
EBITDA ratio
declined
to 9.1 percent 2.8
in fiscal 2015. Improvement
2022
from 2.9
in return on adjusted average total capital is one of our key performance measuresfiscal
2021 (see
the “Non-GAAP
“Non-GAAP Measures” section below for our discussionuse of this measure which is not
defined by GAAP). Adjusted return on average total capital increased 10 basis points
The
third-party
holder
of
the
General
Mills
Cereals,
LLC
(GMC)
Class
A
Interests
receives
quarterly
preferred
distributions
from 11.2 percent in fiscal 2015 to 11.3 percent in fiscal 2016 as fiscal 2016 earnings increased. On a constant-currency basis, adjusted return on average total capital increased 40 basis points.

We also believe that our fixed charge coverage ratio and the ratio of operating cash flow to debt are important measures of our financial strength. Our fixed charge coverage ratio in fiscal 2016 was 7.40 compared to 5.54 in fiscal 2015. The measure increased from fiscal 2015 as earnings before income taxes and after-tax earnings from joint ventures increased by $642 million in fiscal 2016. Our operating cash flow to debt ratio increased 3.5 percentage points to 31.2 percent in fiscal 2016, driven by a decrease in total debt.

We have a 51 percent controlling interest in Yoplait SAS and a 50 percent interest in Yoplait Marques SNC and Liberté Marques Sàrl. Sodiaal holds the remaining interests in each of these entities. We consolidate these entities into our consolidated financial statements. We record Sodiaal’s 50 percent interest in Yoplait Marques SNC and Liberté Marques Sàrl as noncontrolling interests, and its 49 percent interest in Yoplait SAS as a redeemable interest on our Consolidated Balance Sheets. These euro- and Canadian dollar-denominated interests are reported in U.S. dollars on our Consolidated Balance Sheets. Sodiaal has the ability to put all or a portion of its redeemable interest to us at fair value once per year, up to three times before December 2024. As of May 29, 2016, the redemption value of the redeemable interest was $846 million which approximates its fair value.

The third-party holder of the General Mills Cereals, LLC (GMC) Class A Interests receives quarterly preferred distributions from

available net
income based
on the application
of a
floating preferred
return rate
to the
holder’s capital
account balance
established in
the most recent mark-to-market valuation (currently
(currently $252 million). On June 1, 2015, 2021,
the floating preferred return rate on GMC’s
Class
A Interests
was reset
to the
sum of
three-month LIBOR
plus 125 160
basis points.
The preferred
return rate
is adjusted
every three
years
through a negotiated agreement with the Class A Interest holder or through
a remarketing auction.

We
have an option
to purchase the
Class A Interests for
consideration equal to
the then current
capital account value,
plus any unpaid
preferred return
and the
prescribed make-whole
amount. If
we purchase
these interests,
any change
in the
third-party holder’s
capital
account
from
its
original
value
will
be
charged
directly
to
retained
earnings
and
will
increase
or
decrease
the
net
earnings
used
to
calculate EPS in that period.

OFF-BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS

As of May 29, 2016, we have issued guarantees and comfort letters of $383 million for the debt and other obligations of consolidated subsidiaries, and guarantees and comfort letters of $239 million for the debt and other obligations of non-consolidated affiliates, mainly CPW. In addition, off-balance sheet arrangements are generally limited to the future payments under non-cancelable operating leases, which totaled $398 million as of May 29, 2016.

As of May 29, 2016, we had invested in five variable interest entities (VIEs). None of our VIEs are material to our results of operations, financial condition, or liquidity as of and for the fiscal year ended May 29, 2016.

Our defined benefit plans in the United States are subject to the requirements of the Pension Protection Act (PPA). In the future, the PPA may require us to make additional contributions to our domestic plans. We do not expect to be required to make any contributions in fiscal 2017.

The following table summarizes our future estimated cash payments under existing contractual obligations, including payments due by period:

   Payments Due by Fiscal Year 
In Millions  Total   2017   2018 -19   2020 -21   

2022 and

Thereafter

 

Long-term debt (a)

  $8,190.2    $1,103.0    $1,754.2    $1,611.6     $3,721.4  

Accrued interest

   90.4     90.4     —     —     —  

Operating leases (b)

   397.6     107.9     150.7     89.2     49.8  

Capital leases

   2.7     0.9     1.3     0.4     0.1  

Purchase obligations (c)

   3,082.1     1,955.9     603.7     497.4     25.1  

Total contractual obligations

   11,763.0     3,258.1     2,509.9     2,198.6     3,796.4  

Other long-term obligations (d)

   1,957.0     —     —     —     —  

Total long-term obligations

  $13,720.0    $3,258.1    $2,509.9    $2,198.6     $3,796.4  
                          
(a)Amounts represent the expected cash payments of our long-term debt and do not include $2 million for capital leases or $31 million for net unamortized debt issuance costs, premiums and discounts, and fair value adjustments.
(b)Operating leases represents the minimum rental commitments under non-cancelable operating leases.
(c)The majority of the purchase obligations represent commitments for raw material and packaging to be utilized in the normal course of business and for consumer marketing spending commitments that support our brands. For purposes of this table, arrangements are considered purchase obligations if a contract specifies all significant terms, including fixed or minimum quantities to be purchased, a pricing structure, and approximate timing of the transaction. Most arrangements are cancelable without a significant penalty and with short notice (usually 30 days). Any amounts reflected on the Consolidated Balance Sheets as accounts payable and accrued liabilities are excluded from the table above.
(d)The fair value of our foreign exchange, equity, commodity, and grain derivative contracts with a payable position to the counterparty was $44 million as of May 29, 2016, based on fair market values as of that date. Future changes in market values will impact the amount of cash ultimately paid or received to settle those instruments in the future. Other long-term obligations mainly consist of liabilities for accrued compensation and benefits, including the underfunded status of certain of our defined benefit pension, other postretirement benefit, and postemployment benefit plans, and miscellaneous liabilities. We expect to pay $22 million of benefits from our unfunded postemployment benefit plans and $14 million of deferred compensation in fiscal 2017. We are unable to reliably estimate the amount of these payments beyond fiscal 2017. As of May 29, 2016, our total liability for uncertain tax positions and accrued interest and penalties was $209 million.

SIGNIFICANT

CRITICAL ACCOUNTING ESTIMATES

For a complete description of our
significant accounting policies, please see Note
2 to the Consolidated Financial
Statements in Item 8
of this report. Our significantcritical accounting
estimates are those that have
a meaningful impact on the reporting of our
financial condition and
results of operations.
These estimates include
our accounting for promotional expenditures,
revenue recognition, valuation
of long-lived assets,
intangible assets, redeemable interest,
stock-based compensation, income taxes, and defined benefit pension,
other postretirement benefit, and postemployment benefit plans.

Promotional Expenditures

Our promotional activities are conducted through our customers and directly or indirectly with end consumers. These activities include: paymentsplans

.
Considerations related to customers to perform merchandising activities the COVID-19 pandemic
The continuing
impact that
the recent
COVID-19 pandemic
will have
on our behalf, such
consolidated results
of operations
is uncertain.
We
saw
increased
orders from
retail customers
across all
geographies in
response to
increased consumer
demand for
food at
home. We
also
experienced
a
COVID-19-related
decrease
in
consumer
traffic
in
away-from-home
food
outlets.
In
fiscal
2023,
we
expect
at-home
food demand
will decline year
over year across
most of our
core markets
though will remain
above pre-pandemic
levels. Conversely,
we expect away-from home food demand
to continue to recover,
though not fully to pre-pandemic levels.
We expect one of
the largest
factors
impacting
our
performance
will
be
relative
balance
of
at-home
versus
away-from-home
consumer
food
demand,
primarily
driven by
the level
of virus
control in
markets around
the world,
which remains
uncertain. We
have considered
the potential
impacts
of the
COVID-19 pandemic
in our
significant accounting
estimates as advertising or in-store displays; discounts
of May
29, 2022,
and will
continue to
evaluate the
nature and
extent of the impact to our list prices to lower retail shelf prices; payments to gain distributionbusiness and consolidated results of new products; coupons, contests, operations.
Revenue Recognition
Our
revenues
are
reported
net
of
variable
consideration
and
consideration
payable
to
our
customers,
including
trade
promotion,
consumer
coupon
redemption,
and
other incentives;
reductions
to
the
transaction
price,
including
estimated
allowances
for
returns,
unsalable
product,
and media
prompt
pay
discounts.
Trade
promotions
are
recorded
using
significant
judgment
of
estimated
participation
and advertising expenditures. The recognition
performance levels
for offered
programs at the
time of sale.
Differences between
the estimated and
actual reduction to
the transaction
price
are
recognized
as
a
change
in
estimate
in
a
subsequent
period.
Our
accrued
trade
and
coupon
promotion
liabilities
were
$420 million
as of
May 29,
2022, and
$508 million
as of
May 30,
2021. Because
these costs requires estimation of customer participation and performance levels. These amounts
are significant,
if our
estimates are based on the forecasted customer sales, the timing and forecasted costs of promotional activities, and other factors. Differences between estimated expenses and actual costs are recognized as a change in management estimate in a subsequent period. Our accrued trade, coupon, and consumer marketing liabilities were $564 million as of May 29, 2016, and $565 million as of May 31, 2015. Because our total promotional expenditures (including amounts classified as a reduction of revenues) are significant, if our estimates are
inaccurate we would have to make adjustments in subsequent periods that could have
a significant effect on our results of operations.

Valuation
of Long-Lived Assets

We
estimate
the useful
lives
of long-lived long
-lived
assets and
make
estimates concerning
undiscounted
cash flows
to review
for impairment
whenever
events or
changes in
circumstances indicate
that the
carrying
amount of
an asset (or
(or asset
group)
may not
be recoverable.
Fair value is measured using discounted cash flows or independent appraisals,
as appropriate.

Intangible Assets

Goodwill
and
other
indefinite-lived
intangible
assets
are
not
subject
to
amortization
and
are
tested
for
impairment
annually
and
whenever
events or
changes in
circumstances
indicate
that impairment
may have
occurred. Our
estimates of
fair value
for
goodwill
impairment
testing
are determined
based on
a
discounted
cash
flow
model.
We
use
inputs from
our
long-range
planning
process to
29
determine
growth
rates
for
sales
and
profits.
We
also
make
estimates
of
discount
rates,
perpetuity
growth
assumptions,
market
comparables, and other factors.

We evaluate the
useful lives of our other intangible assets, mainly brands, to
determine if they are finite or indefinite-lived.
Reaching a
determination
on
useful
life
requires
significant
judgments
and
assumptions
regarding
the
future
effects
of
obsolescence,
demand,
competition, other economic
factors (such as the
stability of the industry,
known technological advances,
legislative action that
results
in an uncertain or
changing regulatory environment,
and expected changes in
distribution channels), the level
of required maintenance
expenditures,
and
the
expected
lives
of
other
related
groups
of
assets.
Intangible
assets
that
are
deemed
to
have definite
finite
lives
are
amortized
on a
straight-line basis
over their
useful lives,
generally
ranging from
4 to
30 years.
Our estimate
of the
fair value
of our
brand
assets
is
based
on
a
discounted
cash
flow
model
using
inputs
which
include
projected
revenues
from
our
long-range
plan,
assumed royalty rates that could be payable if we did not own the brands, and a discount
rate.

As of
May
29, 2016,
2022,
we
had $12.9
$21 billion
of
goodwill
and
indefinite-lived
intangible
assets. While
we
currently
believe
that
the
fair
value of
each intangible
exceeds its carrying
value and
that those intangibles so classified
will contribute indefinitely
to our cash
flows, materially
different
assumptions
regarding
future performance
of our
businesses
or
a different
weighted-average
cost
of capital
could
result
in
material impairment losses
and amortization expense.
We
performed our fiscal 2016
2022
assessment of our
intangible assets as of August 31, 2015. As
the first
day
of
the
second
quarter
of
fiscal
2022,
and
we
determined
there
was
no
impairment
of
our annual assessment date, there was no impairment of any of our
intangible
assets
as
their
related
fair
values were substantially in excess of the carrying values, except forvalues.
During theMountain High
third quarter of
fiscal 2022,
we changed our
organizational andUncle Toby’sbrands. The excess fair value above
management structure
to streamline our
global operations.
As
a
result
of
these
changes,
we
reassessed
our
operating
segments
as
well
as
our
reporting
units.
Under
our
new
organizational
structure,
our
chief
operating
decision
maker
assesses
performance
and
makes
decisions
about
resources
to
be
allocated
to
our
segments at the carrying value of these brand assets were as follows:

In Millions  Carrying
Value		   

Excess
Fair
Value

Above
Carrying
Value

 

Mountain High

  $35.4     20% 

Uncle Toby’s

  $52.2     11% 
  

OurMountain HighandUncle Toby’s brands have experienced declining business performance,

North America Retail, International,
Pet, and we will continue to monitor these businesses.

Our strategies for fiscal 2017 and fiscal 2018 will focus our growth investments on our brands and platforms with the strongest profitable growth potential. As a result, certain parts of our U.S. RetailNorth America

Foodservice operating segment could experience reduced future sales projections. We performed a sensitivity analysis for certain brand intangible assets and determined that, while not impaired as of May 29, 2016, theProgresso andFood Should Taste Good brands had risk of decreasing coverage. We will continue to monitor these businesses.

Redeemable Interest

In fiscal 2016, we adjusted the redemption value of Sodiaal’s redeemable interest in Yoplait SAS based on a discounted cash flow model. The significant assumptions used to estimate the redemption value include projected revenue growth and profitability from our long-range plan, capital spending, depreciation and taxes, foreign currency exchange rates, and a discount rate. As of May 29, 2016, the redemption value of the redeemable interest was $846 million.

Stock-based Compensation

The valuation of stock options is a significant accounting estimate that requires us to use judgments and assumptions that are likely to have a material impact on our financial statements. Annually, we make predictive assumptions regarding future stock price volatility, employee exercise behavior, dividend yield, and the forfeiture rate. For more information on these assumptions, please refer to

level. Please see Note 11 17
to the Consolidated Financial Statements in Item 8 of this report.

report for additional

information on our operating segments.
The organizational changes
also resulted in changes
in certain reporting units,
one level below the segment
level, and were considered
a
triggering
event
that
required
a
goodwill
impairment
test
during
the
third
quarter
of
fiscal
2022.
We
determined
there
was
no
impairment
of
the
goodwill
of
the
impacted
reporting
units
as
their
related
fair
values
were
substantially
in
excess
of
the
carrying
values.
Stock-based Compensation
The valuation of
stock options is a
significant accounting estimate
that requires us to
use judgments and
assumptions that are
likely to
have a material
impact on
our financial statements.
Annually,
we make predictive
assumptions regarding
future stock price
volatility,
employee exercise behavior,
dividend yield, and
the forfeiture rate. For
more information on
these assumptions, please
see Note 12
to
the Consolidated Financial Statements in Item 8 of this report.
The
estimated
fair
values
of
stock
options
granted
and
the
assumptions
used
for
the
Black-Scholes
option-pricing
model
were
as
follows:
Fiscal Year
2022
2021
2020
Estimated fair values of stock options granted and the assumptions used for the Black-Scholes option-pricing model were as follows:

   Fiscal Year 
    2016   2015   2014 

Estimated fair values of stock options granted

   $7.24     $7.22     $6.03  

Assumptions:

      

Risk-free interest rate

   2.4%     2.6%     2.6%  

Expected term

   8.5 years     8.5 years     9.0 years  

Expected volatility

   17.6%     17.5%     17.4%  

Dividend yield

   3.2%     3.1%     3.1%  
                

$
8.77
$
8.03
$
7.10
Assumptions:
Risk-free interest rate
1.5
%
0.7
%
2.0
%
Expected term
8.5
years
8.5
years
8.5
years
Expected volatility
20.2
%
19.5
%
17.4
%
Dividend yield
3.4
%
3.3
%
3.6
%
The risk-free interest rate
for periods during the
expected term of the options
is based on the U.S. Treasury
zero-coupon yield curve in
effect at the time of grant. An increase in the expected term by
1 year, leaving all other assumptions constant, would increase
decrease the grant
date
fair value
by less
than
1 percent.
If all
other
assumptions
are held
constant,
a one
percentage
point
increase
in our
fiscal 2016
2022
volatility assumption would increase the grant date fair value of our fiscal 2016 2022
option awards by 7 percent.

To
the extent
that actual
outcomes differ
from our
assumptions, we
are not
required to
true up
grant-date fair
value-based expense
to
final
intrinsic
values. However, these differences can impact the classification of cash tax benefits realized upon exercise of stock options, as explained in the following two paragraphs. Furthermore, historical
Historical
data
has
a
significant
bearing
on
our
forward-looking
assumptions.
Significant
variances
between
actual and predicted experience could lead to prospective revisions
in our assumptions, which could then significantly
impact the year-over-yearyear-
over-year comparability of stock-based compensation expense.

Any corporate
income tax
benefit realized
upon exercise
or vesting
of an
award in
excess of
that previously
recognized
in earnings (referred
(referred to as
a windfall tax benefit)
is presented in the
Consolidated Statements of
Cash Flows as a financingan
operating cash flow.
The actual
30
impact on future years’ financing
cash flows will depend,
in part, on the volume
of employee stock option
exercises during a particular
year and
the
relationship
between
the
exercise-date
market
value
of
the
underlying
stock
and
the
original
grant-date
fair
value
previously
determined for financial reporting purposes.

Realized windfall
tax benefits
and shortfall
tax deficiencies
related to the
exercise or
vesting of
stock-based awards
are credited to additional paid-in capital within recognized
in
the Consolidated Balance Sheets. Realized shortfall tax benefits (amounts which are less than that previously recognized in earnings) are first offset against the cumulative balance Statement
of windfall tax benefits, if any, and then charged directly to income tax expense, potentially resulting in volatility in our consolidated effective income tax rate. We calculated a cumulative amount of windfall tax benefits for the purpose of accounting for future shortfall tax benefits and currently have sufficient cumulative windfall tax benefits to absorb projected arising shortfalls, such that we do not currently expect future earnings to be affected by this provision. However, as Earnings. Because
employee stock option
exercise behavior is not
within our control,
it is possible that
significantly different reported results could occur if different
assumptions or conditions were to prevail.

Income Taxes

We
apply a more-likely-than-not
threshold to the
recognition and derecognition
of uncertain tax
positions. Accordingly,
we recognize
the amount of
tax benefit that
has a greater
than 50 percent
likelihood of being
ultimately realized upon
settlement. Future changes
in
judgment related
to the
expected ultimate
resolution of
uncertain tax
positions will
affect earnings
in the quarter
period of
such change.
For
more information on income taxes, please refer tosee Note 1415 to the Consolidated Financial
Statements in Item 8 of this report.

Defined Benefit Pension, Other Postretirement Benefit, and Postemployment
Benefit Plans

We have
defined benefit pension plans covering
many employees in the United States,
Canada, France,Switzerland, and the
United Kingdom.
We also
sponsor plans that provide
health care benefits to
many of our retirees
in the United States, Canada,
and Brazil. Under certain
circumstances,
we
also
provide
accruable
benefits,
primarily
severance,
to
former
and
inactive
employees
in
the
United
States,
Canada,
and Mexico, and members of our Board of Directors, including severance and certain other benefits payable upon death.
Mexico.
Please refer see
Note
14
to Note 13 to
the
Consolidated
Financial
Statements
in
Item
8
of
this
report
for
a
description
of
our
defined benefit pension, other postretirement benefit, and postemployment
benefit plans.

We
recognize
benefits
provided
during
retirement
or
following
employment
over
the
plan
participants’
active
working
lives.
Accordingly,
we
make
various
assumptions
to
predict
and
measure
costs
and
obligations
many
years
prior
to
the
settlement
of
our
obligations.
Assumptions
that
require
significant
management
judgment
and
have
a material
impact
on
the
measurement
of
our
net
periodic
benefit
expense
or
income
and
accumulated
benefit
obligations
include
the
long-term
rates
of
return
on
plan
assets,
the
interest rates used to discount the obligations for our benefit plans, and health
care cost trend rates.

Expected Rate of Return on Plan Assets

Our expected
rate of return
on plan assets
is determined
by our asset
allocation, our
historical long-term
investment performance,
our
estimate of future long-term returns
by asset class (using input from our
actuaries, investment services, and investment
managers), and
long-term inflation
assumptions. We
review this assumption
annually for
each plan; however,
our annual
investment performance
for
one particular year does not, by itself, significantly influence our evaluation.

Our
historical
investment
returns (compound
(compound
annual
growth
rates)
for
our
United
States
defined
benefit
pension
and
other
postretirement
benefit
plan
assets were 0.7
an 8.4
percent
loss in
the 1
year
period ended
May 29,
2022 and
returns of
6.4 percent,
8.2
percent, 7.8 percent, 6.6 percent, 7.46.2 percent, and 8.68.0 percent for the 1, 5, 10, 15, and 20 year periods
ended May 29, 2016.

2022.

On a weighted-average basis, the
expected rate of return for all
defined benefit plans was 8.53 5.85
percent for fiscal 2016, 8.532022, 5.72
percent for
fiscal 2021, and 6.95 percent for fiscal 2015, and 8.53 percent for2020.
For fiscal 2014. During fiscal 2016,2023, we loweredincreased our weighted-average
expected rate of return on plan assets
for our principal
defined benefit pension
and other postretirement
plans in the
United States to 8.25
6.75 percent due
to higher prospective
long-term asset changes that decreased investment risk in the portfolio.

Lowering the expected long-term rate of returnreturns primarily on fixed income investments.

Lowering
the
expected
long-term
rate
of
return
on
assets
by
100
basis
points
would
increase
our
net
pension
and
postretirement
expense by $64$66 million for
fiscal 2017.2023. A market-related
valuation basis is used to reduce
year-to-year expense volatility.
The market-relatedmarket-
related valuation
recognizes certain
investment gains
or losses over
a five-year
period from
the year
in which
they occur.
Investment
gains or
losses for
this purpose
are the difference
between the
expected return
calculated using
the market-related
value of
assets and
the
actual
return
based
on
the
market-related
value
of
assets.
Our
outside
actuaries
perform
these
calculations
as
part
of
our
determination of annual expense or income.

Discount Rates

We
estimate
the
service
and
interest
cost
components
of
the
net
periodic
benefit
expense
for
our
United
States
and
most
of
our
international
defined
benefit
pension,
other
postretirement
benefit,
and
postemployment
benefit
plans
utilizing
a
full
yield
curve
approach
by applying
the specific
spot rates
along
the yield
curve used
to determine
the benefit
obligation
to the
relevant projected
cash flows. Our
discount rate assumptions
are determined annually
as of the last day of our fiscal year May 31
for our defined
benefit pension, other
postretirement
benefit,
and
postemployment
benefit
plan
obligations.
We
work
with
our
outside
actuaries
to
determine
the
timing
and
amount
of
expected future cash outflows to plan
participants and, using the Aa Above Median
corporate bond yield, to develop a forward
interest
rate curve, including
a margin to
that index based
on our credit
risk. This forward
interest rate curve including a margin to that index based on our credit risk. This forward interest rate curve
is applied to
our expected
future
cash outflows to determine our discount rate assumptions.

31
Our weighted-average discount rates were as follows:

    

Defined Benefit

Pension Plans

  

Other
Postretirement

Benefit Plans

  

Postemployment

Benefit Plans

 

Obligations as of May 29, 2016, and fiscal 2017 expense

   4.19%   3.97%   2.94% 

Obligations as of May 31, 2015, and fiscal 2016 expense

   4.38%   4.20%   3.55% 

Fiscal 2015 expense

   4.54%   4.51%   3.82% 
              

Defined Benefit
Pension Plans
Other
Postretirement
Benefit Plans
Postemployment
Benefit Plans
Effective rate for fiscal 2023 service costs
4.53
%
4.41
%
3.67
%
Effective rate for fiscal 2023 interest costs
4.01
%
3.80
%
3.34
%
Obligations as of May 31, 2022
4.39
%
4.36
%
3.62
%
Effective rate for fiscal 2022 service costs
3.53
%
3.34
%
2.46
%
Effective rate for fiscal 2022 interest costs
2.42
%
2.08
%
1.48
%
Obligations as of May 31, 2021
3.17
%
3.03
%
2.04
%
Effective rate for fiscal 2021 service costs
3.59
%
3.44
%
2.54
%
Effective rate for fiscal 2021 interest costs
2.54
%
2.32
%
1.41
%
Lowering
the
discount
rates
by
100
basis
points
would
increase
our
net
defined
benefit
pension,
other
postretirement
benefit,
and
postemployment benefit plan expense
for fiscal 20172023 by approximately $96
$49 million. All obligation-related
experience gains and losses
are amortized
using
a straight-line
method over
the average
remaining
service period
of active
plan participants
or over
the average
remaining lifetime of the remaining plan participants if the plan is viewed as “all or
almost all” inactive participants.

Health Care Cost Trend
Rates

We
review our
health care
cost trend
rates annually.
Our review
is based
on data
we collect
about our
health care
claims experience
and information
provided by our
actuaries. This information
includes recent
plan experience,
plan design, overall
industry experience
and projections, and
assumptions used by other
similar organizations.
Our initial health
care cost trend
rate is adjusted
as necessary to
remain consistent
with this
review,
recent experiences,
and short-term
expectations. Our
initial health
care cost
trend rate
assumption
is 7.5 6.0
percent for
retirees age
65 and
over and 7.3
5.9 percent
for retirees
under age
65 at
the end
of fiscal 2016.
2022. Rates
are graded
down
annually until
the ultimate
trend rate
of 5.0 4.5
percent is
reached in 2024
2031 for
all retirees.
The trend
rates are
applicable for
calculations
only if
the retirees’
benefits increase
as a
result of
health care
inflation. The
ultimate trend
rate is
adjusted annually,
as necessary,
to
approximate
the
current
economic
view
on
the
rate
of
long-term
inflation
plus
an
appropriate
health
care
cost
premium.
Assumed
trend rates for health care costs have an important effect on the
amounts reported for the other postretirement benefit plans.

A one percentage point change

Any
arising
health
care
claims cost-related
experience
gain
or
loss is
recognized
in the health care cost trend rate would have the following effects:

In Millions  

One

Percentage

Point

Increase

   

One

Percentage

Point

Decrease

 

Effect on the aggregate of the service and interest cost components in fiscal 2017

   $  3.1     $  (2.7)  

Effect on the other postretirement accumulated benefit obligation as of May 29, 2016

   71.2     (63.8) 
           

Any arising health care claims cost-related experience gain or loss is recognized in the

calculation
of expected
future claims.
Once
recognized, experience gains and
losses are amortized using a straight-line
method over 10 years, resulting in at least the minimum amortization required being recorded.

average remaining

service period of active
plan participants
or over
the average
remaining lifetime
of the
remaining plan
participants if
the plan
is viewed
as “all
or almost
all”
inactive participants.
Financial Statement Impact

In
fiscal 2016,
2022,
we
recorded
net
defined
benefit
pension,
other
postretirement
benefit,
and
postemployment
benefit
plan expense
income
of $163
$26 million compared
to $153$4 million
of expense
in fiscal
2021 and
$2 million of expense
income in
fiscal 2015 and $140 million of expense in fiscal 2014. 2020.
As of
May 29, 2016,
2022, we
had
cumulative unrecognized
actuarial net losses of $1.9
$2 billion on our
defined benefit pension plans
and $72cumulative unrecognized
actuarial
net
gains
of
$207 million
on
our
postretirement
and
postemployment
benefit
plans,
mainly
as
the
result
of
liability
increases
from
lower
interest
rates,
partially
offset
by recent
increases
in
the
values
of
plan assets.
assets
in
prior
fiscal
years.
These
unrecognized
actuarial
net
losses will
result in
increases
in our
future pension
and postretirement
benefit
expenses
because
they
currently
exceed the
corridors
defined by GAAP.

Assumed mortality rates of

Actual
future
net
defined
benefit
pension,
other
postretirement
benefit,
and
postemployment
benefit
plan participants are a critical estimate in measuring the expected payments a participant
income
or
expense
will receive over their lifetime and the amount of expense we recognize. On October 27, 2014, the Society of Actuaries published RP-2014 Mortality Tables and Mortality Improvement Scale MP-2014, which both reflect

improved longevity. In fiscal 2015, we adopted the change to the mortality assumptions to remeasure our defined benefit pension plans and other postretirement benefit plans obligations, which increased the total of these obligations by $437 million in fiscal 2015. In addition, these assumptions increased the fiscal 2016 expense associated with these plans by $72 million.

Actual future net defined benefit pension, other postretirement benefit, and postemployment benefit plan income or expense will

depend on
investment performance,
changes in
future discount
rates, changes
in health care
cost trend
rates, and
other factors
related
to the populations participating in these plans.

RECENTLY
ISSUED ACCOUNTING PRONOUNCEMENTS

In March 2016,2020, the Financial
Accounting Standards Board (FASB)
issued optional accounting guidance
for a limited period of time
to
ease
the
potential
burden
in
accounting
for
reference
rate reform.
The new
standard
provides
expedients
and
exceptions to
existing
accounting
requirements
for
contract
modifications
and
hedge accounting
related
to
transitioning
from discontinued
reference
rates,
such as
LIBOR,
to alternative
reference
rates, if
certain
criteria are
met. The
new accounting
requirements for the accounting and presentation of stock-based payments. This will result in realized windfall and shortfall tax benefits upon exercise or vesting of stock-based awards being recorded in our Consolidated Statements of Earnings in addition to other presentation changes. The requirements
can be
applied as
of the new standard are effective for annual reporting periods
beginning afterof
the interim
period including
March 12, 2020,
or any
date thereafter,
through December 15, 2016, and interim periods within those annual periods, which for us is the first quarter of fiscal 2018. Early adoption is permitted.31,
2022. We
are in
the process
of reviewing our contracts
and arrangements that
will be affected by
a discontinued reference rate
and are analyzing the
impact of this
guidance on our results of operations and financial position.

In February 2016, the FASB issued new accounting requirements for accounting, presentation and classification of leases. This will result in most leases being capitalized as a right of use asset with a related liability on our Consolidated Balance Sheets. The requirements of the new standard are effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods, which for us is the first quarter of fiscal 2020. We are in the process of analyzing the impact on our results of operations and financial position.

In May 2015, the FASB issued new accounting requirements for the presentation of certain investments using the net asset value, providing a practical expedient to exclude such investments from categorization within the fair value hierarchy and separate disclosure. The requirements of the new standard are effective for annual reporting periods beginning after December 15, 2015, and interim periods within those annual periods, which for us is the first quarter of fiscal 2017. We do not expect this guidance to have a material impact on our results of operations or financial position.

In April 2015, the FASB issued new accounting requirements which permits reporting entities with a fiscal year-end that does not coincide with a month-end to apply a practical expedient that permits the entity to measure defined benefit plan assets and obligations using the month-end that is closest to the entity’s fiscal year-end and apply such practical expedient consistently to all plans. The requirements of the new standard are effective for annual reporting periods beginning after December 15, 2015, and interim periods within those annual periods, which for us is the first quarter of fiscal 2017. We do not expect this guidance to have a material impact on our results of operations or financial position.

In May 2014, the FASB issued new accounting requirements for the recognition of revenue from contracts with customers. The requirements of the new standard and its subsequent amendments are effective for annual reporting periods beginning after December 15, 2017, and interim periods within those annual periods, which for us is the first quarter of fiscal 2019. We do not expect this guidance to have a material impact on our results of operations or financial position.

32
NON-GAAP MEASURES

We
have
included
in
this
report
measures
of
financial
performance
that
are not
defined
by
GAAP.
We
believe
that
these
measures
provide useful information to investors and include these measures in other
communications to investors.

For each
of these
non-GAAP financial
measures, we
are providing
below a
reconciliation of
the differences
between the
non-GAAP
measure and the most
directly comparable GAAP measure,
an explanation of why our management or
we believe the Board of Directors believes the non-GAAP
measure provides useful
information to
investors, and
any additional
material purposes
for which
our management
or Board
of Directors
uses the
non-GAAP
measure. These non-GAAP measures should be viewed in addition to, and not
in lieu of, the comparable GAAP measure.

Constant-currency Net Sales Growth Rates

This measure is used in reporting to our executive management and as a component of the Board of Directors’ measurement of our performance for incentive compensation purposes. We believe that this measure provides useful information to investors because it provides transparency to underlying performance in our consolidated net sales by excluding the effect that foreign currency exchange rate fluctuations have on the year-to-year comparability given volatility in foreign currency exchange markets.

Net sales growth rates on a constant-currency basis are calculated as follows:

   Fiscal 
    2016   2015 

Percentage change in total net sales

   (6)%       (2)%    

Impact of foreign currency exchange

   (4) pts     (3) pts  

Percentage change in total net sales on a constant-currency basis

   (2)%       1%    
           

Diluted EPS Excluding Certain

Significant Items AffectingImpacting Comparability and Related Constant-currency Growth Rate

This measure is used in reporting to our executive management and as a component of the Board of Directors’ measurement of our performance for incentive compensation purposes. We believe that this measure provides useful information to investors because it is the profitability measure we use to evaluate earnings performance

Several
measures
below
are
presented
on a comparable year-over-year
an
adjusted
basis.
The
adjustments
are
either
items
resulting
from
infrequently
occurring
events or items that, in management’s
judgment, significantly affect the year-over-year year-to-year
assessment of operating results.

The reconciliation following are descriptions of significant items impacting comparability
of our GAAP measure, diluted EPS,results.
Divestitures (gain) loss
Divestitures gain
related to diluted EPS excluding certain items affecting comparability
the sale
of our
interests in
Yoplait
SAS, Yoplait
Marques SNC,
and Liberté
Marques Sàrl
and the
sale of
our European dough businesses
in fiscal 2022. Divestiture
loss related constant-currency growth rate follows:

   Fiscal Year 
Per Share Data  2016  2015   Change  2014  2013  2012 

Diluted earnings per share, as reported

  $2.77   $1.97     41%  $2.83   $2.79   $2.35  

Mark-to-market effects (a)

   (0.07)   0.09      (0.05)   —    0.10  

Divestitures gain, net (b)

   (0.10)   —      (0.06)   —    —  

Tax items (c)

   —    0.13      —    (0.13)   —  

Acquisition integration costs (d)

   —    0.02      —    0.01    0.01  

Venezuela currency devaluation (e)

   —    0.01      0.09    0.03    —  

Restructuring costs (f)

   0.26    0.35      0.01    0.02    0.10  

Project-related costs (f)

   0.06    0.01      —    —    —  

Indefinite-lived intangible asset impairment (g)

   —    0.28      —    —    —  

Diluted earnings per share, excluding certain items affecting comparability

  $2.92   $2.86     2%  $2.82   $2.72   $2.56  

Foreign currency exchange impact

            (3)             

Diluted earnings per share growth, excluding certain items affecting comparability, on a constant-currency basis

            5%             
                           
(a)See Note 7 to the Consolidated Financial Statements in Item 8 of this report.
(b)See Note 3 to the Consolidated Financial Statements in Item 8 of this report.
(c)The fiscal 2015 tax item is related to the one-time repatriation of historical foreign earnings in fiscal 2015. The fiscal 2013 tax items consist of a reduction to income taxes related to the restructuring of our GMC subsidiary and an increase to income taxes related to the liquidation of a corporate investment. Additionally, fiscal 2013 includes changes in deferred taxes associated with the Medicare Part D subsidies related to the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010.
(d)Integration costs resulting from the acquisitions of Annie’s in fiscal 2015, Yoki in fiscal 2013, and Yoplait SAS and Yoplait Marques SNC in fiscal 2012.
(e)See Note 7 to the Consolidated Financial Statements in Item 8 of this report.
(f)See Note 4 to the Consolidated Financial Statements in Item 8 of this report.
(g)See Note 6 to the Consolidated Financial Statements in Item 8 of this report.

See our reconciliation below of the effective income tax rate as reported to the effective income tax rate excluding certain items affecting comparability for the tax impact of each item affecting comparability.

Total Segment Operating Profit and Related Constant-currency Growth Rate

This measure is used in reporting to our executive management and as a component of the Board of Directors’ measurement sale

of our performance for incentive compensation purposes. We believe that this measure provides useful information to investors because it is the profitability measure we use to evaluate segment performance. A reconciliation of total segment operating profit to operating profit, the relevant GAAP measure, is included Laticínios Carolina business
in Brazil in fiscal
2021.
Please see Note 163 to the Consolidated Financial Statements in Item 8 of this report.

Total

Transaction costs
Fiscal 2022
transaction costs
relate primarily
to the sale
of our
interests in
Yoplait
SAS, Yoplait
Marques SNC,
and Liberté
Marques
Sàrl,
the
sale
of
our
European
dough
businesses,
the
definitive
agreements
to
sell
our
Helper
main
meals
and
Suddenly
Salad
side
dishes business, and
the definitive agreement
to acquire TNT Crust.
Fiscal 2021 transaction
costs related to
the sale of our
interests in
Yoplait
SAS,
Yoplait
Marques
SNC,
and
Liberté
Marques
Sàrl
and
the
acquisition
of
Tyson
Foods’
pet
treats
business. Please
see
Note 3 to the Consolidated Financial Statements in Item 8 of this report.
Non-income tax recovery
Recovery related to a Brazil indirect tax item recorded in fiscal 2022 and fiscal 2021
.
Acquisition integration costs
Integration
costs resulting
from the
acquisition of
Tyson
Foods’ pet
treats business.
Please see
Note 3
to the
Consolidated Financial
Statements in Item 8 of this report.
Investment activity, net
Valuation
adjustments and the gain on sale of certain corporate investments in fiscal 2022 and fiscal 2021.
Mark-to-market effects
Net
mark-to-market
valuation
of
certain
commodity
positions
recognized
in
unallocated
corporate
items.
Please
see
Note
8
to
the
Consolidated Financial Statements in Item 8 of this report.
Restructuring (recoveries) charges
Restructuring
charges
for
International
supply
chain
optimization
actions
and
net
restructuring
recoveries
for
previously
announced
restructuring
actions
in
fiscal
2022.
Restructuring
charges
for
previously
announced
restructuring
actions
in
fiscal
2021.
Please
see
Note 4 to the Consolidated Financial Statements in Item 8 of this report.
Product recall
Net product recall adjustment recorded in fiscal 2021 related to our international
Green Giant business.
Tax items
Discrete
tax
benefit
recognized
in
fiscal
2022
related
to
a
release
of
a
valuation
allowance
associated
with
our
capital
loss
carryforwards expected
to be used
against future divestiture
gains. Discrete
tax item related
to amendments to
reorganize certain
U.S.
retiree health and welfare benefits plans in fiscal 2021.
CPW restructuring charges
CPW restructuring charges related to previously announced restructuring
actions.
33
Organic Net Sales Growth Rates
We
provide organic
net sales
growth rates
for our
consolidated net
sales and
segment net
sales. This
measure is
used in
reporting to
our
Board
of
Directors
and
executive
management
and
as
a
component
of
the
measurement
of
our
performance
for
incentive
compensation purposes.
We
believe that
organic net
sales growth
rates provide
useful information
to investors
because they
provide
transparency
to underlying
performance
in our
net sales
by excluding
the effect
that foreign
currency
exchange rate
fluctuations,
as
well
as
acquisitions,
divestitures,
and
a
53
rd
week,
when
applicable,
have
on
year-to-year
comparability.
A
reconciliation
of
these
measures to reported
net sales growth
rates, the relevant
GAAP measures, are
included in our
Consolidated Results of
Operations and
Results of Segment Operations discussions in the MD&A above.
Adjusted Operating Profit Growth on a Constant-currency Basis
This measure is used in reporting
to our Board of Directors and
executive management and as a
component of the measurement of
our
performance for
incentive compensation purposes.
We
believe that
this measure provides
useful information
to investors because
it is
the
operating
profit
measure
we
use
to
evaluate
operating
profit
performance
on
a
comparable
year-to-year
basis.
Additionally,
the
measure
is
evaluated
on
a
constant-currency
basis
by
excluding
the
effect
that
foreign
currency
exchange
rate
fluctuations
have
on
year-to-year comparability given the volatility in foreign
currency exchange rates.
Our adjusted operating profit growth rates on a constant-currency basis areis calculated
as follows:

   Fiscal 
    2016  2015 

Percentage change in total segment operating profit as reported

   (1)  %   (4)  % 

Impact of foreign currency exchange

   (2) pts    (2) pts 

Percentage change in total segment operating profit on a constant-currency basis

   1   %   (2)  % 
          

Constant-currency After-tax Earnings from Joint Ventures Growth Rates

We believe that this measure provides useful information to investors because it provides transparency to underlying performance of our joint ventures by excluding the effect that foreign

Fiscal Year
2022
2021
Change
Operating profit as reported
$
3,475.8
$
3,144.8
11
%
Divestitures (gain) loss
(194.1)
53.5
Mark-to-market effects
(133.1)
(138.8)
Transaction costs
72.8
9.5
Restructuring (recoveries) charges
(23.2)
172.7
Acquisition integration costs
22.4
-
Non-income tax recovery
(22.0)
(8.8)
Investment activity, net
14.7
(76.4)
Product recall adjustment, net
-
(3.5)
Adjusted operating profit
$
3,213.3
$
3,153.2
2
%
Foreign currency exchange rate fluctuations have on year-to-year comparability given volatility in foreign currency exchange markets.

After-tax earnings from joint venturesimpact

Flat
Adjusted operating profit growth, rates on a constant-currency basis are calculated as follows:

   Fiscal 
    2016   2015 

Percentage change in after-tax earnings from joint ventures as reported

   5  %     (6) %  

Impact of foreign currency exchange

   (7)pts     (6)pts  

Percentage change in after-tax earnings from joint ventures on a constant-currency basis

   12  %     Flat  
           

Net Sales

2
%
Note: Table may not foot due to rounding.
For more information on the reconciling items, please refer to the Significant Items Impacting Comparability section above.
34
Adjusted Diluted EPS and Related Constant-currency Growth Rates for Our International Segment on Constant-currency Basis

Rate

This measure
is used in
reporting to
our Board of
Directors and executive
management. We
believe that
this measure of our International segment and region net sales provides
useful
information to
investors because it provides transparency
is the profitabil
ity measure we
use to evaluate
earnings performance on
a comparable year-to-year
basis.
The reconciliation of our GAAP measure, diluted EPS, to adjusted diluted
EPS and the underlying performance by excluding the effect that foreignrelated constant-currency growth rate follows:
Fiscal Year
Per Share Data
2022
2021
2022 vs.
2021 Change
Diluted earnings per share, as reported
$
4.42
$
3.78
17
%
Divestitures (gain) loss
(0.31)
0.04
Mark-to-market effects
(0.17)
(0.17)
Transaction costs
0.09
0.01
Restructuring (recoveries) charges
(0.03)
0.22
Acquisition integration costs
0.03
-
Non-income tax recovery
(0.02)
(0.01)
Investment activity, net
0.01
(0.10)
Tax items
(0.08)
0.02
Adjusted diluted earnings per share
$
3.94
$
3.79
4
%
Foreign currency exchange rate fluctuations have on year-to-year comparability given volatility in foreign currency exchange markets.

   Fiscal 2016 
    

Percentage
Change in Net
Sales

as Reported

  Impact of
Foreign
Currency
Exchange		  Percentage Change in
Net Sales on Constant-
Currency Basis		 

Europe

   (6)%   (9)pts   3 % 

Canada

   (16)   (12)   (4) 

Asia/Pacific

   (3)   (4)   1  

Latin America

   (19)   (31)   12  

Total International

   (10)%   (13)pts   3 % 
              
   Fiscal 2015 
    

Percentage
Change in Net
Sales

as Reported

  Impact of
Foreign
Currency
Exchange		  Percentage Change in
Net Sales on Constant-
Currency Basis		 

Europe

   (3)%   (8)pts   5% 

Canada

   (8)   (8)   Flat  

Asia/Pacific

   4    (1)   5  

Latin America

   (14)   (31)   17  

Total International

   (5)%   (11)pts   6% 
              

Constant-currency International Segment Operating Profit Growth Rates

We believe that this measure provides useful information to investors because it provides transparency to underlying performance of the International segment by excluding the effect that foreign currency exchange rate fluctuations have on year-to-year comparability given volatility in foreign currency exchange markets.

International segment operating profitimpact

Flat
Adjusted diluted earnings per share growth, rates on a constant-currency basis are calculated as follows:

   

Fiscal

 
   2016  2015 

Percentage change in International segment operating profit as reported

  (15)%    (2)%    

Impact of foreign currency exchange

  (12)pts   (11)pts  

Percentage change in International segment operating profit on a constant-currency basis

  (3)%    9 %   
         

Adjusted Return

4
%
Note: Table may not foot due to rounding.
For more information on Average Total Capital

Change in adjusted return on average total capital is a measure used in reportingthe reconciling items, please refer to the Significant Items Impacting Comparability section above.

See our executive management and as a componentreconciliation
below of the Board of Director’s measurement of our performance for incentive compensation purposes. We believe that this measure provides useful information to investors because it is important for assessing the utilization of capital and it eliminates certain items that affect year-to-year comparability. The calculation of adjusted return on average total capital and return on average total capital, its GAAP equivalent follows:

   Fiscal Year 
In Millions  2016   2015  2014  2013  2012   2011 

Net earnings, including earnings attributable to redeemable and noncontrolling interests

  $1,736.8             $1,259.4   $1,861.3   $1,892.5   $1,589.1       

Interest, net, after-tax

   193.1              199.8    190.9    201.2    238.9       

Earnings before interest, after-tax

   1,929.9              1,459.2    2,052.2    2,093.7    1,828.0       

Adjustments, after-tax (a):

         

Mark-to-market effects

   (39.6)              56.5    (30.5)   (2.8)   65.6       

Divestitures gain, net

   (66.0)              —    (36.0)   —    —       

Tax items

   —              78.6    —    (85.4)   —       

Acquisition integration costs

   —              10.4    —    8.8    9.7       

Venezuela currency devaluation

   —              8.0    57.8    20.8    —       

Restructuring costs

   160.8              217.7    3.6    15.9    64.3       

Project-related costs

   36.8              8.3    —    —    —       

Indefinite-lived intangible impairment

   —              176.9    —    —    —       

Adjusted earnings before interest, after-tax for adjusted return on capital calculation

  $2,021.9             $2,015.6   $2,047.1   $2,051.0   $1,967.6       
                         

Current portion of long-term debt

  $1,103.4             $1,000.4   $1,250.6   $1,443.3   $741.2       $1,031.3  

Notes payable

   269.8              615.8    1,111.7    599.7    526.5        311.3  

Long-term debt

   7,057.7              7,575.3    6,396.6    5,901.8    6,139.5        5,524.1  

Total debt

   8,430.9              9,191.5    8,758.9    7,944.8    7,407.2        6,866.7  

Redeemable interest

   845.6              778.9    984.1    967.5    847.8        —  

Noncontrolling interests

   376.9              396.0    470.6    456.3    461.0        246.7  

Stockholders’ equity

   4,930.2              4,996.7    6,534.8    6,672.2    6,421.7        6,365.5  

Total capital

   14,583.6              15,363.1    16,748.4    16,040.8    15,137.7        13,478.9  

Accumulated other comprehensive loss

   2,612.2              2,310.7    1,340.3    1,585.3    1,743.7        1,010.8  

After-tax earnings adjustments (b)

   439.1              347.1    (209.3)   (204.2)   (161.5)       (301.1) 

Adjusted total capital

  $17,634.9             $18,020.9   $17,879.4   $17,421.9   $16,719.9       $14,188.6  
                            

Average total capital (c)

  $14,973.4             $16,055.8   $16,394.6   $15,589.2   $14,308.3       

Return on average total capital (c)

   12.9%          9.1%   12.5%   13.4%   12.8%    
                         

Adjusted average total capital (c)

  $17,827.9             $17,950.1   $17,650.6   $17,070.8   $15,454.3       

Adjusted return on average total capital (c)

   11.3%          11.2%   11.6%   12.0%   12.7%    
                         

Change in adjusted return on average total capital

   10 bps          

Foreign currency exchange impact

   (30)bps          

Change in adjusted return on average total capital on a constant-currency basis

   40 bps          
             
(a)See our reconciliation below of the effective effective
income tax rate as reported to the effective income tax rate excluding certain items affecting comparability for the tax impact of each item affecting comparability.
(b)Sum of current year and previous year after-tax adjustments.
(c)See “Glossary” in Item 8 of this report for definition.

Effective Income Tax Rate Excluding Certain Items Affecting Comparability

We believe this measure provides useful information to investors because it is important for assessing the effective tax rate excluding certain itemsas

reported to the adjusted
effective income tax
rate for the tax
impact of
each item affecting comparability and presents the income tax effects of certain items affecting comparability.

Effective income tax rates excluding certain items affecting comparability are calculated as follows:

  Fiscal Year Ended 
  May 29, 2016  May 31, 2015  May 25, 2014  May 26, 2013  May 27, 2012 
In Millions Pretax
Earnings
(a)		  Income
Taxes		  Pretax
Earnings
(a)		  Income
Taxes		  Pretax
Earnings
(a)		  Income
Taxes		  Pretax
Earnings
(a)		  Income
Taxes		  Pretax
Earnings
(a)		  Income
Taxes		 

As reported

 $2,403.6   $755.2   $1,761.9   $586.8   $2,655.0   $883.3   $2,534.9   $741.2   $2,210.5   $709.6  

Mark-to-market effects (b)

  (62.8)   (23.2)   89.7    33.2    (48.5)   (18.0)   (4.4)   (1.6)   104.2    38.6  

Divestitures (gain) (c)

  (148.2)   (82.2)   —    —    (65.5)   (29.5)   —    —    —    —  

Tax items (d)

  —    —    —    (78.6)   —    —    —    85.4    —    —  

Acquisition integration costs (e)

  —    —    16.0    5.6    —    —    12.3    3.5    11.2    1.5  

Venezuela currency devaluation (b)

  —    —    8.0    —    62.2    4.4    25.2    4.4    —    —  

Restructuring costs (f)

  229.8    69.0    343.5    125.8    3.6    —    18.6    2.7    100.6    36.3  

Project-related costs (f)

  57.5    20.7    13.2    4.9    —    —    —    —    —    —  

Intangible asset impairment (f)

  —    —    260.0    83.1    —    —    —    —    —    —  

As adjusted

 $2,479.9   $739.5   $2,492.3   $760.8   $2,606.8   $840.2   $2,586.6   $835.6   $2,426.5   $786.0  
  

Effective tax rate:

          

As reported

   31.4%    33.3%    33.3%    29.2%    32.1% 

As adjusted

      29.8%       30.5%       32.2%       32.3%       32.4% 

Sum of adjustments to income taxes

     $(15.7)      $174.0       $(43.1)      $94.4       $76.4  

Average number of commonshares - diluted EPS

      611.9        618.8        645.7        665.6        666.7  

Impact of income tax adjustments on diluted EPS excluding certain items affecting comparability

  $0.03    $(0.28)   $0.07    $(0.14)   $(0.11) 
  
(a)Earnings before income taxes and after-tax earnings from joint ventures.
(b)See Note 7 to the Consolidated Financial Statements in Item 8 of this report.
(c)See Note 3 to the Consolidated Financial Statements in Item 8 of this report.
(d)The fiscal 2015 tax item is related to the one-time repatriation of historical foreign earnings in fiscal 2015. The fiscal 2013 tax items consist of a reduction to income taxes related to the restructuring of our GMC subsidiary and an increase to income taxes related to the liquidation of a corporate investment. Additionally, fiscal 2013 includes changes in deferred taxes associated with the Medicare Part D subsidies related to the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010.
(e)Integration costs resulting from the acquisitions of Annie’s in fiscal 2015, Yoki in fiscal 2013, and Yoplait SAS and Yoplait Marques SNC in fiscal 2012.
(f)See Note 4 to the Consolidated Financial Statements in Item 8 of this report.

35
Free Cash Flow Conversion Rate
We
believe
this
measure
provides
useful
information
to
investors
because
it
is
important
for
assessing
our
efficiency
in
converting
earnings
to
cash
and
returning
cash
to
shareholders.
The
calculation
of
free
cash
flow
conversion
rate
and Total Cash Returned to Shareholders as a Percentage of Free Cash Flow

We believe these measures provide useful information to investors because they are important for assessing our efficiency in converting earnings to

net
cash and returning cash to shareholders. The calculation of free cash flow conversion rate and net cash
provided
by
operating activities conversion rate, its equivalent GAAP measure, follows:

In Millions  Fiscal
2016		 

Net earnings, including earnings attributable to redeemable and noncontrolling interests, as reported

  $1,736.8  

Mark-to-market effects, net of tax (a)

   (39.6)  

Divestitures (gain), net of tax (b)

   (66.0)  

Restructuring costs, net of tax (c)

   160.8  

Project-related costs, net of tax (c)

   36.8  

Adjusted net earnings, including earnings attributable to redeemable and noncontrolling interests

   1,828.8  
  

Net cash provided by operating activities

   2,629.8  

Purchases of land, buildings, and equipment

   (729.3)  

Free cash flow

  $1,900.5  
  

Net cash provided by operating activities conversion rate

   151%  
  

Free cash flow conversion rate

   104%  
  

The calculation

In Millions
Fiscal 2022
Net earnings, including earnings attributable to redeemable and noncontrolling
interests, as reported
$
2,735.0
Divestitures gain, net of totaltax
(189.0)
Mark-to-market effects, net of tax
(102.5)
Transaction costs, net of tax
56.4
Restructuring (recoveries) charges, net of tax
(16.7)
Acquisition integration costs, net of tax
17.2
Non-income tax recovery,
net of tax
(14.5)
Investment activity, net,
net of tax
6.2
CPW restructuring charges, net of tax
(0.9)
Tax item
(50.7)
Adjusted net earnings, including earnings attributable to redeemable and
noncontrolling interests
$
2,440.5
Net cash returned to shareholders as a percentageprovided by operating activities
3,316.1
Purchases of freeland, buildings, and equipment
(568.7)
Free cash flow
$
2,747.4
Net cash provided by operating activities conversion rate
121%
Free cash flow follows:

Dividends paid

  $1,071.7  

Purchases of common stock for treasury

   606.7  

Proceeds from common stock issued on exercised options

   (171.9)  

Total cash returned to shareholders

  $1,506.5  
  

Total cash returned to shareholders as a percentage of free cash flow

   79%  
      
(a)See Note 7 to the Consolidated Financial Statements in Item 8 of this report.
(b)See Note 3 to the Consolidated Financial Statements in Item 8 of this report.
(c)See Note 4 to the Consolidated Financial Statements in Item 8 of this report.

conversion rate

113%
Note: Table may not foot due rounding.
For more information on the reconciling items, please refer to the Significant Items Impacting Comparability section above.
See our reconciliation above
below of the effective
income tax rate as
reported to the
adjusted effective income
tax rate excluding certain items affecting comparability for the
tax impact of
each item affecting comparability.

36
Net Debt-to-Adjusted Earnings before Net Interest, Income Taxes,
Depreciation and Amortization (EBITDA) Ratio
We
believe that
this measure
provides useful
information to
investors because
it is an
indicator of
our ability
to incur
additional debt
and to service our existing debt.
The reconciliation of
adjusted EBITDA to
net earnings, including
earnings attributable
to redeemable
and noncontrolling interests,
its
GAAP equivalent, as well as the calculation of the net debt-to-adjusted EBITDA
ratio are as follows:
Fiscal Year
In Millions
2022
2021
Total debt (a)
$
11,620.4
$
12,612.0
Cash
569.4
1,505.2
Net debt
$
11,051.0
$
11,106.8
Net earnings, including earnings attributable to
redeemable and noncontrolling interests, as reported
$
2,735.0
$
2,346.0
Income taxes
586.3
629.1
Interest, net
379.6
420.3
Depreciation and amortization
570.3
601.3
EBITDA
4,271.2
3,996.8
After-tax earnings from joint ventures
(111.7)
(117.7)
Divestitures (gain) loss
(194.1)
53.5
Mark-to-market effects
(133.1)
(138.8)
Transaction costs
72.8
9.5
Restructuring (recoveries) charges
(23.2)
172.7
Acquisition integration costs
22.4
-
Non-income tax recovery
(22.0)
(8.8)
Investment activity, net
14.7
(76.4)
Product recall adjustment, net
-
(3.5)
Adjusted EBITDA
$
3,897.0
$
3,887.4
Net debt-to-adjusted EBITDA ratio
2.8
2.9
Note: Table may not foot due to rounding.
(a)
Notes payable and long-term debt, including current portion.
For more information on the reconciling items, please refer to the Significant Items Impacting Comparability section above.
37
Adjusted Operating Profit as a Percent of Net Sales Excluding Certain Items Affecting Comparability

(Adjusted Operating Profit

Margin)
We believe
this measure provides useful information
to investors because it is important
for assessing our operating profit margin
on a
comparable year-to-year basis.
Our adjusted operating profit margins are calculated as follows:
Fiscal Year
Percent of Net Sales
2022
2021
Operating profit as reported
$
3,475.8
18.3
%
$
3,144.8
17.3
%
Divestitures (gain) loss
(194.1)
(1.0)
%
53.5
0.3
%
Mark-to-market effects
(133.1)
(0.7)
%
(138.8)
(0.8)
%
Transaction costs
72.8
0.4
%
9.5
0.1
%
Restructuring (recoveries) charges
(23.2)
(0.1)
%
172.7
1.0
%
Acquisition integration costs
22.4
0.1
%
-
-
%
Non-income tax recovery
(22.0)
(0.1)
%
(8.8)
-
%
Investment activity, net
14.7
0.1
%
(76.4)
(0.4)
%
Product recall adjustment, net
-
-
%
(3.5)
-
%
Adjusted operating profit
$
3,213.3
16.9
%
$
3,153.2
17.4
%
Note: Table may not foot due to rounding.
For more information on the reconciling items, please refer to the Significant Items Impacting Comparability section above.
38
Adjusted Effective Income Tax
Rates
We
believe
this
measure
provides
useful
information
to
investors
because
it
presents
the
adjusted
effective
income
tax
rate
on
a
comparable year-to-year basis.
Adjusted effective income tax rates are calculated as follows:
Fiscal Year
Ended
2022
2021
In Millions
(Except Per Share Data)
Pretax
Earnings (a)
Income
Taxes
Pretax
Earnings (a)
Income
Taxes
As reported
$3,209.6
$586.3
$2,857.4
$629.1
Divestitures (gain) loss
(194.1)
(5.1)
53.5
0.4
Mark-to-market effects
(133.1)
(30.6)
(138.8)
(31.9)
Transaction costs
72.8
16.4
9.5
2.3
Restructuring (recoveries) charges
(23.2)
(6.4)
172.7
35.5
Acquisition integration costs
22.4
5.1
-
-
Non-income tax recovery
(22.0)
(7.5)
(8.8)
(3.0)
Investment activity, net
14.7
8.5
(76.4)
(15.6)
Tax items
-
50.7
-
(11.2)
Product recall adjustment, net
-
-
(3.5)
(0.4)
As adjusted
$2,947.1
$617.4
$2,865.7
$605.2
Effective tax rate:
As reported
18.3%
22.0%
As adjusted
20.9%
21.1%
Sum of adjustments to income taxes
$31.1
($24.0)
Average number
of common shares - diluted EPS
612.6
619.1
Impact of income tax adjustments on adjusted diluted EPS
$(0.05)
$0.04
Note: Table may not foot due to rounding.
For more information on the reconciling items, please refer to the Significant Items Impacting Comparability section above.
39
Constant-currency After-Tax
Earnings from Joint Ventures
Growth Rate
We
believe that
this measure
provides useful
information to
investors because
it provides
transparency to
underlying performance
of
our joint
ventures by
excluding the
effect
that foreign
currency exchange
rate fluctuations
have on
year-to-year
comparability given
volatility in foreign currency exchange markets.
After-tax earnings from joint ventures growth rate on
a constant-currency basis are calculated as follows:
Fiscal 2022
Percentage change in after-tax earnings from joint ventures as reported
(5)
%
Impact of foreign currency exchange
(3)
pts
Percentage change in after-tax earnings from joint ventures on
a constant-currency basis
(3)
%
Note: Table may not foot due to rounding.
Net Sales Growth Rate for Canada Operating Unit on a comparable basis. AdjustedConstant-currency
Basis
We
believe
this
measure
of
our
Canada
operating
unit
net
sales
provides
useful
information
to
investors
because
it
provides
transparency to
the underlying
performance for
the Canada operating
unit within our
North America Retail
segment by
excluding the
effect
that
foreign
currency
exchange
rate
fluctuations
have
on
year-to-year
comparability
given
volatility
in
foreign
currency
exchange markets.
Net sales growth rate for our Canada operating unit on a constant-currency
basis is calculated as follows:
Fiscal 2022
Percentage change in net sales as reported
3
%
Impact of foreign currency exchange
3
pts
Percentage change in net sales on a constant-currency basis
1
%
Note: Table may not foot due to rounding.
Constant-currency Segment Operating Profit Growth Rates
We
believe that
this measure
provides useful
information to
investors because
it provides
transparency to
underlying performance
of
our
segments
by
excluding
the
effect
that
foreign
currency
exchange
rate
fluctuations
have
on
year-to-year
comparability
given
volatility in foreign currency exchange markets.
Our segments’ operating profit excludes certain growth rates on a constant-currency
basis are calculated as follows:
Fiscal 2022
Percentage Change
in Operating Profit
as Reported
Impact of Foreign
Currency Exchange
Percentage Change
in Operating Profit
on Constant-
Currency Basis
North America Retail
(1)
%
Flat
(1)
%
International
(2)
%
2
pts
(4)
%
Pet
13
%
Flat
13
%
North America Foodservice
26
%
Flat
26
%
Note: Table may not foot due to rounding.
Forward-Looking Financial Measures
Our fiscal 2023
outlook for organic
net sales growth,
constant-currency adjusted
operating profit,
adjusted diluted
EPS, and free
cash
flow are
non-GAAP financial
measures
that exclude,
or have
otherwise
been adjusted
for,
items affecting comparability.

   Fiscal Year 
Percent of Net Sales  2016  2015  2014  2013  2012 

Operating profit as reported

  $2,707.4    16.3%  $2,077.3     11.8%  $2,957.4    16.5 %  $2,851.8    16.0%  $2,562.4     15.4%  

Mark-to-market effects (a)

   (62.8)   (0.4)%   89.7     0.5%   (48.5)   (0.3)%   (4.4)   —  %   104.2     0.6%  

Divestitures (gain), (b)

   (148.2)   (0.9)%   —       —  %   (65.5)   (0.4)%   —      —  %   —       —  %  

Acquisition integration costs (c)

   —      —  %   16.0     0.1%   —      —  %   12.3    0.1%   11.2     0.1%  

Venezuela currency devaluation (d)

   —      —  %   8.0     —  %   62.2    0.4%   25.2    0.1%   —       —  %  

Restructuring costs (e)

   229.8    1.4%   343.5     1.9%   3.6    —  %   18.6    0.1%   100.6     0.6%  

Project-related costs (e)

   57.5    0.4%   13.2     0.1%   —      —  %   —      —  %   —       —  %  

Intangible asset impairment (f)

   —      —  %   260.0     1.5%   —      —  %   —      —  %   —       —  %  

Adjusted operating profit

  $2,783.7    16.8%  $2,807.7     15.9%  $2,909.2    16.2%  $2,903.5    16.3%  $2,778.4     16.7%  
  
(a)See Note 7 to the Consolidated Financial Statements in Item 8 of this report.
(b)See Note 3 to the Consolidated Financial Statements in Item 8 of this report.
(c)Integration costs resulting from the acquisitions of Annie’s in fiscal 2015, Yoki in fiscal 2013, and Yoplait SAS and Yoplait Marques SNC in fiscal 2012.
(d)See Note 7 to the Consolidated Financial Statements in Item 8 of this report.
(e)See Note 4 to the Consolidated Financial Statements in Item 8 of this report.
(f)See Note 6 to the Consolidated Financial Statements in Item 8 of this report.

impacting

comparability,
including
the
effect
of foreign
currency exchange
rate
fluctuations,
restructuring
charges
and project-related
costs,
acquisition
transaction
and
integration
costs,
acquisitions,
divestitures,
and
mark-to-market
effects.
We
are
not
able
to
reconcile
these
forward-looking
non-
GAAP financial
measures to
their most
directly comparable
forward-looking
GAAP financial
measures without
unreasonable efforts
because we are unable to
predict with a reasonable degree
of certainty the actual impact
of changes in foreign currency
exchange rates
and
commodity
prices
or
the
timing
or
impact
of
acquisitions,
divestitures,
and
restructuring
actions
throughout
fiscal
2023.
The
unavailable information could have a significant impact on our fiscal 2023 GAAP financial
results.
40
For
fiscal
2023,
we
currently expect:
foreign
currency
exchange
rates
(based
on
a blend
of
forward
and
forecasted
rates and
hedge
positions)
and
acquisitions
and
divestitures
completed
prior
to
fiscal
2023
and
those
closed
or
expected
to
close
in
fiscal
2023
to
reduce net
sales growth by
approximately 3
percent; foreign
currency exchange
rates to reduce
adjusted operating
profit and adjusted
diluted
EPS growth
by
approximately
1
percent;
and
restructuring
charges
and
project-related
costs and
transaction
and
acquisition
integration costs related to actions previously announced to total approximately
$15 million to $25 million.
ITEM 7A - QUANTITATIVE
AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
We
are
exposed
to
market
risk
stemming
from
changes
in
interest
and
foreign
exchange
rates
and
commodity
and
equity
prices.
Changes
in
these
factors
could
cause
fluctuations
in
our
earnings
and
cash
flows.
In
the
normal
course
of
business,
we
actively
manage
our
exposure
to
these market
risks
by entering
into various
hedging
transactions,
authorized
under
established
policies
that
place controls
on these
activities. The
counterparties
in these
transactions are
generally
highly rated
institutions. We
establish
credit
limits for
each counterparty.
Our hedging
transactions include
but are
not limited
to a variety
of derivative
financial instruments.
For
information
on
interest
rate,
foreign
exchange,
commodity
price,
and
equity
instrument
risk,
please
see
Note
8
to
the
Consolidated
Financial Statements in Item 8 of this report.
VALUE
AT RISK
The
estimates
in
the
table below
are
intended
to measure
the
maximum
potential
fair value
we
could
lose
in one
day
from
adverse
changes
in
market
interest
rates,
foreign
exchange
rates,
commodity
prices,
and
equity
prices
under
normal
market
conditions.
A
Monte Carlo
value-at-risk (VAR)
methodology was
used to
quantify the
market risk
for our
exposures. The
models assumed
normal
market conditions and used a 95 percent confidence level.
The
VAR
calculation
used
historical
interest
and
foreign
exchange
rates,
and
commodity
and
equity
prices
from
the
past
year
to
estimate the
potential volatility
and correlation
of these
rates in
the future.
The market
data were
drawn from
the RiskMetrics™
data
set.
The
calculations
are
not
intended
to
represent
actual
losses
in
fair
value
that
we
expect
to
incur.
Further,
since
the
hedging
instrument (the derivative) inversely correlates
with the underlying exposure, we would
expect that any loss or gain in the fair
value of
our
derivatives
would
be
generally
offset
by
an
increase
or
decrease
in
the
fair
value
of
the
underlying
exposure.
The
positions
included
in the
calculations were:
debt; investments;
interest rate
swaps; foreign
exchange forwards;
commodity swaps,
futures, and
options; and
equity instruments.
The calculations
do not
include the
underlying foreign
exchange
and commodities
or equity-related
positions that are offset by these market-risk-sensitive instruments.
The table below
presents the estimated maximum
potential VAR
arising from a
one-day loss in
fair value for
our interest rate, foreign
currency, commodity,
and equity market-risk-sensitive instruments outstanding as of May 29,
2022.
In Millions
May 29, 2022
Average During
Fiscal 2022
May 30, 2021
Analysis of Change
Interest rate instruments
$
40.9
$
41.4
$
37.4
Higher Market Volatility
Foreign currency instruments
20.3
17.7
25.6
Exchange Rate Volatility
Commodity instruments
12.9
10.2
4.2
Higher Market Volatility
Equity instruments
2.5
2.3
2.8
Higher Market Volatility
41
CAUTIONARY STATEMENT
RELEVANT
TO FORWARD-LOOKINGFORWARD
-LOOKING INFORMATION
FOR THE PURPOSE OF “SAFE
HARBOR” PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION
REFORM ACT OF 1995

This report
contains or
incorporates by
reference
forward-looking
statements within
the meaning
of the
Private Securities
Litigation
Reform Act
of 1995
that are
based on
our current
expectations and
assumptions. We
also may
make written
or oral
forward-looking
statements, including statements contained in our filings with the
SEC and in our reports to shareholders.

The words or
phrases “will likely
result,” “are expected
to,” “will continue,” “is
“is anticipated,” “estimate,” “plan,
“plan,” “project,” or
similar
expressions identify “forward-looking
“forward-looking statements”
within the
meaning of
the Private
Securities Litigation
Reform Act
of 1995.
Such
statements are
subject to
certain risks
and uncertainties
that could
cause actual
results to
differ
materially from
historical results
and
those currently anticipated or projected. We
wish to caution you not to place undue reliance on any such forward-looking statements.

In connection
with the “safe
harbor” provisions
of the Private
Securities Litigation
Reform Act of
1995, we are
identifying important
factors
that could
affect
our financial
performance
and could
cause our
actual results
in future
periods
to differ
materially from
any
current opinions or statements.

Our future results could
be affected by a
variety of factors, such
as: the impact of the
COVID-19 pandemic on
our business, suppliers,
consumers,
customers,
and
employees;
disruptions
or
inefficiencies
in
the
supply
chain,
including
any
impact
of
the
COVID-19
pandemic;
competitive
dynamics
in
the
consumer
foods
industry
and
the
markets
for
our
products,
including
new
product
introductions,
advertising
activities,
pricing
actions,
and
promotional
activities
of
our
competitors;
economic
conditions,
including
changes
in
inflation
rates,
interest
rates,
tax
rates,
or
the
availability
of
capital;
product
development
and
innovation;
consumer
acceptance
of
new
products
and
product
improvements;
consumer
reaction
to
pricing
actions
and
changes
in
promotion
levels;
acquisitions
or
dispositions
of
businesses
or
assets;
changes
in
capital
structure;
changes
in
the
legal
and
regulatory
environment,
including
tax
legislation,
labeling
and
advertising
regulations,
and
litigation;
impairments
in
the
carrying
value
of
goodwill,
other
intangible assets,
or other
long-lived assets,
or changes
in the consumer foods industry and the markets for our products, including new product introductions, advertising activities, pricing actions, and promotional activities
useful lives
of our competitors; economic conditions, including other
intangible assets;
changes in inflation rates, interest rates, tax rates, or the availability of capital; product development and innovation; consumer acceptance of new products and product improvements; consumer reaction to pricing actions and changes in promotion levels; acquisitions or dispositions of businesses or assets; changes in capital structure; changes in the legal and regulatory environment, including labeling and advertising regulations and litigation; impairments in the carrying value of goodwill, other intangible assets, or other long-lived assets, or changes in the useful lives of other intangible assets; changes in
accounting standards
and the impact of significant accounting
estimates; product quality and safety issues, including
recalls and product liability; changes in
consumer
demand
for
our
products;
effectiveness
of
advertising,
marketing,
and
promotional
programs;
changes
in
consumer
behavior,
trends,
and
preferences,
including
weight
loss
trends;
consumer
perception
of
health-related
issues,
including
obesity;
consolidation
in the
retail environment;
changes in consumer behavior, trends,
purchasing and preferences, including weight loss trends; consumer perception
inventory levels
of health-related issues, including obesity; consolidation significant
customers; fluctuations
in the retail

environment; changes

cost
and
availability
of
supply
chain
resources,
including
raw
materials,
packaging,
energy,
and
transportation;
effectiveness
of
restructuring
and
cost
saving
initiatives;
volatility
in purchasing and inventory levels
the
market
value
of significant customers; fluctuations in the cost and availability of supply chain resources, including raw materials, packaging, and energy; disruptions or inefficiencies in the supply chain; effectiveness of restructuring and cost savings initiatives; volatility in the market value of
derivatives
used
to
manage
price
risk
for
certain
commodities; benefit plan
expenses due to
changes in plan
asset values and discount
rates used to
determine plan liabilities;
failure or
breach of
our information
technology systems;
foreign economic
conditions, including
currency rate
fluctuations; and
political unrest
in foreign markets and economic uncertainty due to terrorism or war.

You
should also consider the risk factors that we identify in Item 1A of this report, which could also
affect our future results.

We undertakeunderta
ke no obligation to publicly revise
any forward-looking statements to reflect events
or circumstances after the date of
those
statements or to reflect the occurrence of anticipated or unanticipated events.

Item 7A Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk stemming from changes in interest and foreign exchange rates and commodity and equity prices. Changes in these factors could cause fluctuations in our earnings and cash flows. In the normal course of business, we actively manage our exposure to these market risks by entering into various hedging transactions, authorized under established policies that place clear controls on these activities. The counterparties in these transactions are generally highly rated institutions. We establish credit limits for each counterparty. Our hedging transactions include but are not limited to a variety of derivative financial instruments. For information on interest rate, foreign exchange, commodity price, and equity instrument risk, please see Note 7 to the Consolidated

42
ITEM 8 - Financial Statements in Item 8 of this report.

VALUE AT RISK

The estimates in the table below are intended to measure the maximum potential fair value we could lose in one day from adverse changes in market interest rates, foreign exchange rates, commodity prices, and equity prices under normal market conditions. A Monte Carlo value-at-risk (VAR) methodology was used to quantify the market risk for our exposures. The models assumed normal market conditions and used a 95 percent confidence level.

The VAR calculation used historical interest and foreign exchange rates, and commodity and equity prices from the past year to estimate the potential volatility and correlation of these rates in the future. The market data were drawn from the RiskMetrics™ data set. The calculations are not intended to represent actual losses in fair value that we expect to incur. Further, since the hedging instrument (the derivative) inversely correlates with the underlying exposure, we would expect that any loss or gain in the fair value of our derivatives would be generally offset by an increase or decrease in the fair value of the underlying exposure. The positions included in the calculations were: debt; investments; interest rate swaps; foreign exchange forwards; commodity swaps, futures and options; and equity instruments. The calculations do not include the underlying foreign exchange and commodities or equity-related positions that are offset by these market-risk-sensitive instruments.

The table below presents the estimated maximum potential VAR arising from a one-day loss in fair value for our interest rate, foreign currency, commodity, and equity market-risk-sensitive instruments outstanding as of May 29, 2016, and May 31, 2015, and the average fair value impact during the year ended May 29, 2016.

   Fair Value Impact 
In Millions  May 29,
2016		   

Average

during

fiscal 2016

   May 31,
2015		 

Interest rate instruments

  $33.3    $30.7    $25.1  

Foreign currency instruments

   27.6     24.4     17.9  

Commodity instruments

   3.3     3.7     3.7  

Equity instruments

   1.7     1.6     1.2  
                

ITEM 8Financial Statements and Supplementary Data

Supplementary Data

REPORT OF MANAGEMENT RESPONSIBILITIES

The
management
of
General
Mills,
Inc.
is
responsible
for
the
fairness
and
accuracy
of
the
consolidated
financial
statements.
The
statements
have
been
prepared
in
accordance
with
accounting
principles
that
are
generally
accepted
in
the
United
States,
using
management’s
best estimates and judgments where
appropriate. The financial information throughout
this Annual Report on Form 10-K
10-
K is consistent with our consolidated financial statements.

Management
has established
a system
of internal
controls that
provides
reasonable
assurance that
assets are
adequately
safeguarded
and
transactions
are
recorded
accurately
in
all
material
respects,
in
accordance
with
management’s
authorization.
We
maintain
a
strong
audit program
that independently
evaluates
the adequacy
and effectiveness
of internal
controls. Our
internal controls
provide
for
appropriate
separation
of
duties
and
responsibilities,
and
there
are
documented
policies
regarding
use
of
our
assets
and
proper
financial reporting. These formally stated and regularly communicated
policies demand highly ethical conduct from all employees.

The Audit
Committee of
the Board
of Directors
meets regularly
with management,
internal auditors,
and our
independent registered
public
accounting
firm
to
review
internal
control,
auditing,
and
financial
reporting
matters.
The
independent
registered
public
accounting firm, internal auditors, and employees have full and free access to
the Audit Committee at any time.

The Audit
Committee reviewed
and approved
the Company’s
annual financial
statements. The
Audit Committee
recommended,
and
the Board
of Directors
approved, that
the consolidated
financial statements
be included
in the
Annual Report.
The Audit
Committee
also appointed KPMG LLP to serve as the Company’s
independent registered public accounting firm for fiscal 2017.

/s/ K. J. Powell/s/ D. L. Mulligan
K. J. PowellD. L. Mulligan
Chairman of the BoardExecutive Vice President
and Chief Executive Officerand Chief Financial Officer

2023.

/s/ J. L. Harmening
/s/ K. A. Bruce
J. L. Harmening
K. A. Bruce
Chief Executive Officer
Chief Financial Officer
June 30, 2016

29, 2022

43
Report of Independent Registered Public Accounting Firm

The

To the Stockholders
and Board of Directors and Stockholders

General Mills, Inc.:

We have audited

Opinions on the Consolidated Financial Statements and Internal Control
Over Financial Reporting
We
have
audited
the
accompanying
consolidated
balance
sheets
of
General
Mills,
Inc. and
subsidiaries
(the
Company)
as
of
May 29, 20162022 and May 31, 2015, and
30, 2021, the related
consolidated statements of
earnings, comprehensive income,
total equity and redeemable
interest,
and
cash
flows
for
each
of
the fiscal
years
in
the
three-year
period
ended
May 29, 2016. In connection with our audits of 2022,
and
the
related
notes
and
financial
statement schedule
II (collectively,
the consolidated
financial statements, westatements).
We
also have
audited the accompanying financial statement schedule. We also have audited General Mills, Inc.’s
Company’s
internal control
over
financial reporting as
of May 29, 2016,2022, based
on criteria established
in
Internal Control
– Integrated Framework
(2013)
issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). General Mills, Inc.’s
Commission.
In our
opinion, the
consolidated financial
statements referred
to above
present fairly,
in all material
respects, the
financial position
of
the Company
as of
May 29, 2022 and
May 30,
2021, and
the results
of its
operations
and its
cash flows
for each
of the
years in
the
three-year
period
ended
May 29, 2022,
in
conformity
with
U.S.
generally
accepted
accounting
principles.
Also
in
our
opinion,
the
Company maintained,
in all
material respects,
effective internal
control over
financial reporting
as of
May 29, 2022 based
on criteria
established
in
Internal
Control
–
Integrated
Framework
(2013)
issued
by
the
Committee
of
Sponsoring
Organizations
of
the
Treadway Commission.
Basis for Opinions
The Company’s
management is responsible
for these consolidated
financial statements, and financial statement schedule, for
maintaining effective
internal control over
financial
reporting,
and
for
its
assessment
of
the
effectiveness
of
internal
control
over
financial
reporting,
included
in
the
accompanying Management's
Report on
Internal Control
over Financial
Reporting. Our
responsibility is
to express
an opinion
on the
Company’s
consolidated financial
statements and for its assessment of an
opinion on
the effectiveness of Company’s
internal control
over financial reporting included in the accompanying Item 9A Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule and an opinion on the Company’s internal control over financial reporting
based on
our
audits.

We

are a
public accounting
firm registered
with the
Public Company
Accounting Oversight
Board (United
States) (PCAOB)
and are required to
be independent with
respect to the Company
in accordance with the
U.S. federal securities laws
and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted
our audits in accordance with the
standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require
that we plan and perform the audits
to obtain
reasonable assurance
about whether
the consolidated
financial statements
are free
of material
misstatement, whether
due to
error or fraud, and whether effective internal control over financial
reporting was maintained in all material respects.
Our audits of
the consolidated financial
statements included examining, on a test basis, evidence supporting performing
procedures to assess
the risks of
material misstatement
of the
consolidated
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
consolidated
financial statements, assessing
statements. Our audits also included
evaluating the accounting principles
used and significant estimates made
by management, andas well
as evaluating
the overall
presentation
of the
consolidated
financial
statements.
Our
audit of
internal
control over
financial statement presentation. Our audit reporting
included obtaining an understanding
of internal control over financial reporting included obtaining an understanding of internal control over financial
reporting, assessing the risk that
a material weakness exists,
and
testing and
evaluating the
design and
operating effectiveness
of internal
control based
on the
assessed risk.
Our audits
also included
performing
such other
procedures as
we considered
necessary in
the circumstances.
We
believe that
our audits
provide a
reasonable
basis for our opinions.

Definition and Limitations of Internal Control
Over Financial Reporting
A company’s
internal control over financial reporting is a
process designed to provide reasonable assurance
regarding the reliability of
financial reporting and
the preparation of
financial statements for
external purposes in
accordance with generally
accepted accounting
principles.
A
company’s
internal
control
over
financial
reporting
includes
those
policies
and
procedures
that
(1)
pertain
to
the
maintenance
of
records
that,
in
reasonable
detail,
accurately
and
fairly
reflect
the
transactions
and
dispositions
of
the
assets
of
the Company;
company; (2) provide
reasonable assurance that
transactions are recorded
as necessary to permit
preparation of financial
statements in
accordance with
generally accepted
accounting principles,
and that
receipts and
expenditures of
the Company company
are being
made only
in
accordance
with
authorizations
of
management
and
directors
of
the Company;
company;
and
(3)
provide
reasonable
assurance
regarding
prevention or timely detection of unauthorized acquisition, use, or
disposition of the Company’s company’s
assets that could have a material effect
on the financial statements.

Because of its inherent
limitations, internal control
over financial reporting may
not prevent or detect
misstatements. Also, projections
of any evaluation
of effectiveness to
future periods are
subject to the
risk that controls
may become inadequate
because of changes
in
conditions, or that the degree of compliance with the policies or procedures
may deteriorate.

In

44
Critical Audit Matter
The critical audit matter
communicated below is a
matter arising from the
current period audit of the
consolidated financial statements
that was communicated
or required to
be communicated to
the audit committee
and that: (1) relates
to accounts or
disclosures that are
material to
the consolidated
financial statements
and (2)
involved our
especially challenging,
subjective, or
complex judgments.
The
communication
of
a
critical
audit matter
does
not
alter
in any
way
our
opinion
on the
consolidated
financial
statements, taken
as a
whole, and
we are
not, by
communicating the
critical audit
matter below,
providing a
separate opinion
on the
critical audit
matter or
on the accounts or disclosures to which it relates.
Valuation
of goodwill and brand intangible assets
As discussed in Note 6 to the consolidated financial statements, referred the goodwill
and brands and other indefinite-lived intangibles
balances
as
of
May
29,
2022
were
$14,378.5
million
and
$6,725.8
million,
respectively.
The
impairment
tests
for
these
assets, which
are performed
annually and
whenever
events or
changes in
circumstances
indicate that
impairment may
have
occurred, require
the Company
to above present fairly, in all material respects, estimate
the financial positionfair
value of General Mills, Inc.
the reporting
units to
which goodwill
is assigned
as well
as the
brands and subsidiaries
other indefinite-lived
intangible assets.
The fair
value estimates
are derived
from discounted
cash flow
analyses
that
require
the
Company
to make
judgments
about
highly subjective
matters,
including
future
operating
results,
including
revenue growth rates and operating margins, and
an estimate of the discount rates and royalty rates.
We
identified the
assessment of the
valuation of certain
goodwill and
brand intangible assets
as a critical
audit matter.
There
was
a
significant
degree
of
judgment
required
in
evaluating
audit
evidence,
which
consists
primarily
of
forward-looking
assumptions
about
future
operating
results,
specifically
the
revenue
growth
rates
and
operating
margins,
royalty
rates
and
subjective inputs used to estimate the discount rates.
The
following
are
the
primary
procedures
we
performed
to address
this critical
audit
matter.
We
evaluated
the
design
and
tested
the
operating
effectiveness
of
internal
controls
related
to
the valuation
of May 29, 2016 goodwill
and May 31, 2015,
brand
intangible
assets. This
included controls related
to the assumptions
about future operating
results and the results of their operations discount
and their cash flows for each royalty rates
used to measure
the
reporting
units
and
brands
intangible
fair
values.
We
performed
sensitivity
analyses
over
the
revenue
growth
rates,
operating
margins,
brand
royalty
rates
and
discount
rates
to
assess
the
impact
of
other
points
within
a
range
of
potential
assumptions.
We
evaluated
the
revenue
growth
rates
and
operating
margin
assumptions
by
comparing
them
to
recent
financial performance
and external
market and
industry data.
We
evaluated whether
these assumptions
were consistent
with
evidence obtained
in other areas
of the fiscal years audit.
We
involved professionals with
specialized skills and
knowledge, who assisted
in the three-year period ended May 29, 2016, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the accompanying financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. Also in our opinion, General Mills, Inc. maintained, in all material respects, effective internal control over financial reporting as of May 29, 2016, based on criteria established inInternal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations evaluation
of the Treadway Commission.

Company’s

discount rates by
comparing them
against rate ranges
that were independently
developed
using publicly available market data
for comparable entities and the royalty
rates by evaluating the methods, assumptions
and
market data used to estimate the royalty rate.
/s/
KPMG
LLP

We have served
as the Company’s auditor since 1928.
Minneapolis, Minnesota

June 30, 2016

29, 2022

45
Consolidated Statements of Earnings

GENERAL MILLS, INC. AND SUBSIDIARIES

(In Millions, Except per Share Data)

   Fiscal Year 
   2016  2015   2014 

Net sales

  $16,563.1   $17,630.3    $17,909.6  

Cost of sales

   10,733.6    11,681.1     11,539.8  

Selling, general, and administrative expenses

   3,118.9    3,328.0     3,474.3  

Divestitures (gain)

   (148.2)   —     (65.5) 

Restructuring, impairment, and other exit costs

   151.4    543.9     3.6  
  

 

 

  

 

 

   

 

 

 

Operating profit

   2,707.4    2,077.3     2,957.4  

Interest, net

   303.8    315.4     302.4  
  

 

 

  

 

 

   

 

 

 

Earnings before income taxes and after-tax earnings from joint ventures

   2,403.6    1,761.9     2,655.0  

Income taxes

   755.2    586.8     883.3  

After-tax earnings from joint ventures

   88.4    84.3     89.6  
  

 

 

  

 

 

   

 

 

 

Net earnings, including earnings attributable to redeemable and noncontrolling interests

   1,736.8    1,259.4     1,861.3  

Net earnings attributable to redeemable and noncontrolling interests

   39.4    38.1     36.9  
  

 

 

  

 

 

   

 

 

 

Net earnings attributable to General Mills

  $1,697.4   $1,221.3    $1,824.4  
  

 

 

  

 

 

   

 

 

 

Earnings per share - basic

  $2.83   $2.02    $2.90  
  

 

 

  

 

 

   

 

 

 

Earnings per share - diluted

  $2.77   $1.97    $2.83  
  

 

 

  

 

 

   

 

 

 

Dividends per share

  $1.78   $1.67    $1.55  
  

 

 

  

 

 

   

 

 

 

Fiscal Year
2022
2021
2020
Net sales
$
18,992.8
$
18,127.0
$
17,626.6
Cost of sales
12,590.6
11,678.7
11,496.7
Selling, general, and administrative expenses
3,147.0
3,079.6
3,151.6
Divestitures (gain) loss
(194.1)
53.5
0
Restructuring, impairment, and other exit (recoveries) costs
(26.5)
170.4
24.4
Operating profit
3,475.8
3,144.8
2,953.9
Benefit plan non-service income
(113.4)
(132.9)
(112.8)
Interest, net
379.6
420.3
466.5
Earnings before income taxes and after-tax earnings
from joint ventures
3,209.6
2,857.4
2,600.2
Income taxes
586.3
629.1
480.5
After-tax earnings from joint ventures
111.7
117.7
91.1
Net earnings, including earnings attributable to redeemable and
noncontrolling interests
2,735.0
2,346.0
2,210.8
Net earnings attributable to redeemable and noncontrolling interests
27.7
6.2
29.6
Net earnings attributable to General Mills
$
2,707.3
$
2,339.8
$
2,181.2
Earnings per share — basic
$
4.46
$
3.81
$
3.59
Earnings per share — diluted
$
4.42
$
3.78
$
3.56
Dividends per share
$
2.04
$
2.02
$
1.96
See accompanying notes to consolidated financial statements.

46
Consolidated Statements of Comprehensive Income

GENERAL MILLS, INC. AND SUBSIDIARIES

(In Millions)

   Fiscal Year 
   2016  2015  2014 

Net earnings, including earnings attributable to redeemable and noncontrolling interests

  $1,736.8   $1,259.4   $1,861.3  

Other comprehensive income (loss), net of tax:

    

Foreign currency translation

   (108.7)   (957.9)   (11.3) 

Net actuarial income (loss)

   (325.9)   (358.4)   206.0  

Other fair value changes:

    

Securities

   0.1    0.8    0.3  

Hedge derivatives

   16.0    4.1    5.0  

Reclassification to earnings:

    

Hedge derivatives

   (9.5)   4.9    (4.6) 

Amortization of losses and prior service costs

   128.6    105.1    107.6  
  

 

 

  

 

 

  

 

 

 

Other comprehensive income (loss), net of tax

   (299.4)   (1,201.4)   303.0  
  

 

 

  

 

 

  

 

 

 

Total comprehensive income

   1,437.4    58.0    2,164.3  

Comprehensive income (loss) attributable to redeemable and noncontrolling interests

   41.5    (192.9)   94.9  
  

 

 

  

 

 

  

 

 

 

Comprehensive income attributable to General Mills

  $1,395.9   $250.9   $2,069.4  
  

 

 

  

 

 

  

 

 

 

Fiscal Year
2022
2021
2020
Net earnings, including earnings attributable to redeemable and
noncontrolling interests
$
2,735.0
$
2,346.0
$
2,210.8
Other comprehensive income (loss), net of tax:
Foreign currency translation
(175.9)
175.1
(169.1)
Net actuarial income (loss)
101.6
353.4
(224.6)
Other fair value changes:
Hedge derivatives
7.0
(20.7)
3.2
Reclassification to earnings:
Foreign currency translation
342.2
0
0
Hedge derivatives
35.1
13.5
4.1
Amortization of losses and prior service costs
75.8
78.9
77.9
Other comprehensive income (loss), net of tax
385.8
600.2
(308.5)
Total comprehensive
income
3,120.8
2,946.2
1,902.3
Comprehensive (loss) income attributable to redeemable and
noncontrolling interests
(45.2)
121.2
10.1
Comprehensive income attributable to General Mills
$
3,166.0
$
2,825.0
$
1,892.2
See accompanying notes to consolidated financial statements.

47
Consolidated Balance Sheets

GENERAL MILLS, INC. AND SUBSIDIARIES

(In Millions, Except Par Value)

   May 29,
2016		  May 31,
2015		 
   

ASSETS

   

Current assets:

   

Cash and cash equivalents

  $763.7   $334.2  

Receivables

   1,360.8    1,386.7  

Inventories

   1,413.7    1,540.9  

Prepaid expenses and other current assets

   399.0    423.8  
  

 

 

  

 

 

 

Total current assets

   3,937.2    3,685.6  

Land, buildings, and equipment

   3,743.6    3,783.3  

Goodwill

   8,741.2    8,874.9  

Other intangible assets

   4,538.6    4,677.0  

Other assets

   751.7    811.2  
  

 

 

  

 

 

 

Total assets

  $21,712.3   $21,832.0  
  

 

 

  

 

 

 

LIABILITIES AND EQUITY

   

Current liabilities:

   

Accounts payable

  $2,046.5   $1,684.0  

Current portion of long-term debt

   1,103.4    1,000.4  

Notes payable

   269.8    615.8  

Other current liabilities

   1,595.0    1,589.9  
  

 

 

  

 

 

 

Total current liabilities

   5,014.7    4,890.1  

Long-term debt

   7,057.7    7,575.3  

Deferred income taxes

   1,399.6    1,450.2  

Other liabilities

   2,087.6    1,744.8  
  

 

 

  

 

 

 

Total liabilities

   15,559.6    15,660.4  
  

 

 

  

 

 

 

Redeemable interest

   845.6    778.9  

Stockholders’ equity:

   

Common stock, 754.6 shares issued, $0.10 par value

   75.5    75.5  

Additional paid-in capital

   1,177.0    1,296.7  

Retained earnings

   12,616.5    11,990.8  

Common stock in treasury, at cost, shares of 157.8 and 155.9

   (6,326.6)   (6,055.6) 

Accumulated other comprehensive loss

   (2,612.2)   (2,310.7) 
  

 

 

  

 

 

 

Total stockholders’ equity

   4,930.2    4,996.7  

Noncontrolling interests

   376.9    396.0  
  

 

 

  

 

 

 

Total equity

   5,307.1    5,392.7  
  

 

 

  

 

 

 

Total liabilities and equity

  $21,712.3   $21,832.0  
  

 

 

  

 

 

 

May 29, 2022
May 30, 2021
ASSETS
Current assets:
Cash and cash equivalents
$
569.4
$
1,505.2
Receivables
1,692.1
1,638.5
Inventories
1,867.3
1,820.5
Prepaid expenses and other current assets
802.1
790.3
Assets held for sale
158.9
0
Total current
assets
5,089.8
5,754.5
Land, buildings, and equipment
3,393.8
3,606.8
Goodwill
14,378.5
14,062.4
Other intangible assets
6,999.9
7,150.6
Other assets
1,228.1
1,267.6
Total assets
$
31,090.1
$
31,841.9
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
3,982.3
$
3,653.5
Current portion of long-term debt
1,674.2
2,463.8
Notes payable
811.4
361.3
Other current liabilities
1,552.0
1,787.2
Total current
liabilities
8,019.9
8,265.8
Long-term debt
9,134.8
9,786.9
Deferred income taxes
2,218.3
2,118.4
Other liabilities
929.1
1,292.7
Total liabilities
20,302.1
21,463.8
Redeemable interest
0
604.9
Stockholders' equity:
Common stock,
754.6
shares issued, $
0.10
par value
75.5
75.5
Additional paid-in capital
1,182.9
1,365.5
Retained earnings
18,532.6
17,069.8
Common stock in treasury,
at cost, shares of
155.7
and
146.9
(7,278.1)
(6,611.2)
Accumulated other comprehensive loss
(1,970.5)
(2,429.2)
Total stockholders' equity
10,542.4
9,470.4
Noncontrolling interests
245.6
302.8
Total equity
10,788.0
9,773.2
Total liabilities and equity
$
31,090.1
$
31,841.9
See accompanying notes to consolidated financial statements.

48
Consolidated Statements of Total
Equity and Redeemable Interest

GENERAL MILLS, INC. AND SUBSIDIARIES

(In Millions, Except per Share Data)

 

 

 

      
  

$.10 Par Value Common Stock

(One Billion Shares Authorized)

                
  Issued  Treasury                
   Shares  Par
Amount		  Additional
Paid-In
Capital		  Shares  Amount  Retained
Earnings		  

Accumulated

Other
Comprehensive
Loss

  

Non-

controlling
Interests

  

Total

Equity

  

Redeemable

Interest

 

Balance as of May 26, 2013

  754.6   $75.5   $1,166.6    (113.8)  $(3,687.2)  $10,702.6   $(1,585.3)  $456.3   $7,128.5   $967.5  

Total comprehensive income

       1,824.4    245.0    24.9    2,094.3    70.0  

Cash dividends declared ($1.17 per share)

       (739.8)     (739.8)  

Shares purchased

    30.0    (35.6)   (1,775.3)      (1,745.3)  

Stock compensation plans (includes income tax benefits of $69.3)

    13.8    7.1    243.1       256.9   

Unearned compensation related to restricted stock unit awards

    (91.3)        (91.3) ��

Earned compensation

    108.5         108.5   

Decrease in redemption value of redeemable interest

    4.2         4.2    (4.2) 

Addition of noncontrolling interest

         17.6    17.6   

Distributions to redeemable and noncontrolling interest holders

                              (28.2)   (28.2)   (49.2) 

Balance as of May 25, 2014

  754.6    75.5    1,231.8    (142.3)   (5,219.4)   11,787.2    (1,340.3)   470.6    7,005.4    984.1  

Total comprehensive income (loss)

       1,221.3    (970.4)   (70.0)   180.9    (122.9) 

Cash dividends declared ($1.67 per share)

       (1,017.7)     (1,017.7)  

Shares purchased

     (22.3)   (1,161.9)      (1,161.9)  

Stock compensation plans (includes income tax benefits of $74.6)

    (38.1)   8.7    325.7       287.6   

Unearned compensation related to stock unit awards

    (80.8)        (80.8)  

Earned compensation

    111.1         111.1   

Decrease in redemption value of redeemable interest

    83.2         83.2    (83.2) 

Addition of noncontrolling interest

         20.7    20.7   

Acquisition of interest in subsidiary

    (10.5)       0.6    (9.9)  

Distributions to redeemable and noncontrolling interest holders

                              (25.9)   (25.9)   0.9  

Balance as of May 31, 2015

  754.6    75.5    1,296.7    (155.9)   (6,055.6)   11,990.8    (2,310.7)   396.0    5,392.7    778.9  

Total comprehensive income (loss)

       1,697.4    (301.5)   11.2    1,407.1    30.3  

Cash dividends declared (1.78 per share)

       (1,071.7)     (1,071.7)  

Shares purchased

     (10.7)   (606.7)      (606.7)  

Stock compensation plans (includes income tax benefits of $94.1)

    (46.3)   8.8    335.7       289.4   

Unearned compensation related to stock unit awards

    (63.3)        (63.3)  

Earned compensation

    84.8         84.8   

Increase in redemption value of redeemable interest

    (91.5)        (91.5)   91.5  

Acquisition of interest in subsidiary

    (3.4)       (1.1)   (4.5)  

Distributions to redeemable and noncontrolling interest holders

                              (29.2)   (29.2)   (55.1) 

Balance as of May 29, 2016

  754.6    $75.5    $1,177.0    (157.8)  $(6,326.6)   $12,616.5   $(2,612.2)   $376.9    $5,307.1    $845.6  
                                         

Fiscal Year
2022
2021
2020
Shares
Amount
Shares
Amount
Shares
Amount
Total equity,
beginning balance
$
9,773.2
$
8,349.5
$
7,367.7
Common stock,
1
billion shares authorized, $
0.10
par value
754.6
75.5
754.6
75.5
754.6
75.5
Additional paid-in capital:
Beginning balance
1,365.5
1,348.6
1,386.7
Stock compensation plans
17.9
6.2
(12.1)
Unearned compensation related to stock unit awards
(92.2)
(78.0)
(85.7)
Earned compensation
104.5
88.5
92.8
Decrease (increase) in redemption value of
redeemable interest
14.1
0.2
(33.1)
Reversal of cumulative redeemable interest value
adjustments
(207.4)
0
0
Acquisition of noncontrolling interest
(19.5)
0
0
Ending balance
1,182.9
1,365.5
1,348.6
Retained earnings:
Beginning balance
17,069.8
15,982.1
14,996.7
Net earnings attributable to General Mills
2,707.3
2,339.8
2,181.2
Cash dividends declared ($
2.04
, $
2.02
, and $
1.96
per share)
(1,244.5)
(1,246.4)
(1,195.8)
Adoption of current expected credit loss
accounting requirements
0
(5.7)
0
Ending balance
18,532.6
17,069.8
15,982.1
Common stock in treasury:
Beginning balance
(146.9)
(6,611.2)
(144.8)
(6,433.3)
(152.7)
(6,779.0)
Shares purchased
(13.5)
(876.8)
(5.0)
(301.4)
(0.1)
(3.4)
Stock compensation plans
4.7
209.9
2.9
123.5
8.0
349.1
Ending balance
(155.7)
(7,278.1)
(146.9)
(6,611.2)
(144.8)
(6,433.3)
Accumulated other comprehensive loss:
Beginning balance
(2,429.2)
(2,914.4)
(2,625.4)
Comprehensive income (loss)
458.7
485.2
(289.0)
Ending balance
(1,970.5)
(2,429.2)
(2,914.4)
Noncontrolling interests:
Beginning balance
302.8
291.0
313.2
Comprehensive (loss) income
(16.0)
38.0
10.3
Distributions to noncontrolling interest holders
(129.8)
(26.2)
(32.5)
Reclassification from redeemable interest
561.6
0
0
Reversal of cumulative redeemable interest value
adjustments
207.4
0
0
Divestiture
(680.4)
0
0
Ending balance
245.6
302.8
291.0
Total equity,
ending balance
$
10,788.0
$
9,773.2
$
8,349.5
Redeemable interest:
Beginning balance
$
604.9
$
544.6
$
551.7
Comprehensive (loss) income
(29.2)
83.2
(0.2)
(Decrease) increase in redemption value of
redeemable interest
(14.1)
(0.2)
33.1
Distributions to redeemable interest holder
0
(22.7)
(40.0)
Reclassification to noncontrolling interest
(561.6)
0
0
Ending balance
$
0
$
604.9
$
544.6
See accompanying notes to consolidated financial statements.

49
Consolidated Statements of Cash Flows

GENERAL MILLS, INC. AND SUBSIDIARIES

(In Millions)

   Fiscal Year 
   2016  2015  2014 

Cash Flows - Operating Activities

    

Net earnings, including earnings attributable to redeemable and noncontrolling interests

  $1,736.8   $1,259.4   $1,861.3  

Adjustments to reconcile net earnings to net cash provided by operating activities:

    

Depreciation and amortization

   608.1    588.3    585.4  

After-tax earnings from joint ventures

   (88.4)   (84.3)   (89.6) 

Distributions of earnings from joint ventures

   75.1    72.6    90.5  

Stock-based compensation

   89.8    106.4    108.5  

Deferred income taxes

   120.6    25.3    172.5  

Tax benefit on exercised options

   (94.1)   (74.6)   (69.3) 

Pension and other postretirement benefit plan contributions

   (47.8)   (49.5)   (49.7) 

Pension and other postretirement benefit plan costs

   118.1    91.3    124.1  

Divestitures (gain), net

   (148.2)   —    (65.5) 

Restructuring, impairment, and other exit costs

   107.2    531.1    (18.8) 

Changes in current assets and liabilities, excluding the effects of acquisitions and divestitures

   258.2    214.7    (32.2) 

Other, net

   (105.6)   (137.9)   (76.2) 
  

 

 

  

 

 

  

 

 

 

Net cash provided by operating activities

   2,629.8    2,542.8    2,541.0  
  

 

 

  

 

 

  

 

 

 

Cash Flows - Investing Activities

    

Purchases of land, buildings, and equipment

   (729.3)   (712.4)   (663.5) 

Acquisitions, net of cash acquired

   (84.0)   (822.3)   —  

Investments in affiliates, net

   63.9    (102.4)   (54.9) 

Proceeds from disposal of land, buildings, and equipment

   4.4    11.0    6.6  

Proceeds from divestitures

   828.5    —    121.6  

Exchangeable note

   21.1    27.9    29.3  

Other, net

   (11.2)   (4.0)   (0.9) 
  

 

 

  

 

 

  

 

 

 

Net cash provided (used) by investing activities

   93.4    (1,602.2)   (561.8) 
  

 

 

  

 

 

  

 

 

 

Cash Flows - Financing Activities

    

Change in notes payable

   (323.8)   (509.8)   572.9  

Issuance of long-term debt

   542.5    2,253.2    1,673.0  

Payment of long-term debt

   (1,000.4)   (1,145.8)   (1,444.8) 

Proceeds from common stock issued on exercised options

   171.9    163.7    108.1  

Tax benefit on exercised options

   94.1    74.6    69.3  

Purchases of common stock for treasury

   (606.7)   (1,161.9)   (1,745.3) 

Dividends paid

   (1,071.7)   (1,017.7)   (983.3) 

Addition of noncontrolling interest

   —    —    17.6  

Distributions to noncontrolling and redeemable interest holders

   (84.3)   (25.0)   (77.4) 

Other, net

   (7.2)   (16.1)   (14.2) 
  

 

 

  

 

 

  

 

 

 

Net cash used by financing activities

   (2,285.6)   (1,384.8)   (1,824.1) 
  

 

 

  

 

 

  

 

 

 

Effect of exchange rate changes on cash and cash equivalents

   (8.1)   (88.9)   (29.2) 
  

 

 

  

 

 

  

 

 

 

Increase (decrease) in cash and cash equivalents

   429.5    (533.1)   125.9  

Cash and cash equivalents - beginning of year

   334.2    867.3    741.4  
  

 

 

  

 

 

  

 

 

 

Cash and cash equivalents - end of year

  $763.7   $334.2   $867.3  
  

 

 

  

 

 

  

 

 

 

Cash Flow from Changes in Current Assets and Liabilities, excluding the effects of acquisitions and divestitures:

    

Receivables

  $(6.9)  $6.8   $(41.0) 

Inventories

   (146.1)   (24.2)   (88.3) 

Prepaid expenses and other current assets

   (0.1)   (50.5)   10.5  

Accounts payable

   318.7    145.8    191.5  

Other current liabilities

   92.6    136.8    (104.9) 
  

 

 

  

 

 

  

 

 

 

Changes in current assets and liabilities

  $258.2   $214.7   $(32.2) 
  

 

 

  

 

 

  

 

 

 

Fiscal Year
2022
2021
2020
Cash Flows - Operating Activities
Net earnings, including earnings attributable to redeemable and noncontrolling interests
$
2,735.0
$
2,346.0
$
2,210.8
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization
570.3
601.3
594.7
After-tax earnings from joint ventures
(111.7)
(117.7)
(91.1)
Distributions of earnings from joint ventures
107.5
95.2
76.5
Stock-based compensation
98.7
89.9
94.9
Deferred income taxes
62.2
118.8
(29.6)
Pension and other postretirement benefit plan contributions
(31.3)
(33.4)
(31.1)
Pension and other postretirement benefit plan costs
(30.1)
(33.6)
(32.3)
Divestitures (gain) loss
(194.1)
53.5
0
Restructuring, impairment, and other exit (recoveries) costs
(117.1)
150.9
43.6
Changes in current assets and liabilities, excluding the effects of acquisition and divestitures
277.4
(155.9)
793.9
Other, net
(50.7)
(131.8)
45.9
Net cash provided by operating activities
3,316.1
2,983.2
3,676.2
Cash Flows - Investing Activities
Purchases of land, buildings, and equipment
(568.7)
(530.8)
(460.8)
Acquisition
(1,201.3)
0
0
Investments in affiliates, net
15.4
15.5
(48.0)
Proceeds from disposal of land, buildings, and equipment
3.3
2.7
1.7
Proceeds from divestitures, net of cash divested
74.1
2.9
0
Other, net
(13.5)
(3.1)
20.9
Net cash used by investing activities
(1,690.7)
(512.8)
(486.2)
Cash Flows - Financing Activities
Change in notes payable
551.4
71.7
(1,158.6)
Issuance of long-term debt
2,203.7
1,576.5
1,638.1
Payment of long-term debt
(3,140.9)
(2,609.0)
(1,396.7)
Debt exchange participation incentive cash payment
0
(201.4)
0
Proceeds from common stock issued on exercised options
161.7
74.3
263.4
Purchases of common stock for treasury
(876.8)
(301.4)
(3.4)
Dividends paid
(1,244.5)
(1,246.4)
(1,195.8)
Distributions to noncontrolling and redeemable interest holders
(129.8)
(48.9)
(72.5)
Other, net
(28.0)
(30.9)
(16.0)
Net cash used by financing activities
(2,503.2)
(2,715.5)
(1,941.5)
Effect of exchange rate changes on cash and cash equivalents
(58.0)
72.5
(20.7)
(Decrease) increase in cash and cash equivalents
(935.8)
(172.6)
1,227.8
Cash and cash equivalents - beginning of year
1,505.2
1,677.8
450.0
Cash and cash equivalents - end of year
$
569.4
$
1,505.2
$
1,677.8
Cash flow from changes in current assets and liabilities, excluding the effects of acquisition and
divestitures:
Receivables
$
(166.3)
$
27.9
$
37.9
Inventories
(85.8)
(354.7)
103.1
Prepaid expenses and other current assets
(35.3)
(42.7)
94.2
Accounts payable
456.7
343.1
392.5
Other current liabilities
108.1
(129.5)
166.2
Changes in current assets and liabilities
$
277.4
$
(155.9)
$
793.9
See accompanying notes to consolidated financial statements.

50
Notes to Consolidated Financial Statements

GENERAL MILLS, INC. AND SUBSIDIARIES

NOTE 1. BASIS OF PRESENTATION
AND RECLASSIFICATIONS

Basis of Presentation

Our Consolidated Financial
Statements include the
accounts of General
Mills, Inc. and all
subsidiaries in which
we have a controlling
financial
interest.
Intercompany
transactions
and
accounts,
including
any
noncontrolling
and
redeemable
interests’
share
of
those
transactions, are eliminated in consolidation.

Our fiscal year ends on
the last Sunday in May.
Fiscal years 20162022 and 2014 2021
consisted of
52
weeks, while fiscal year 2015 2020
consisted of
53
weeks.

Certain
reclassifications
to
our
previously
reported
financial
information
have
been
made
to
conform
to
the
current
period
presentation.
Change in Reporting Period

As part of a long-term
plan to conform the fiscal
year ends of all our
operations, in fiscal 2016 2020
we changed the reporting period
of Yoplait SAS and Yoplait Marques SNC within our International
Pet segment and Annie’s, Inc. (Annie’s) within our U.S. Retail segment
from an
April fiscal year-end
to a
May fiscal year-end
to match
our fiscal
calendar.
Accordingly, in fiscal 2016,
our fiscal
2020 results included
include
13
months of Pet segment
results from the affected operations.compared to
12
months in fiscal
2022 and 2021. The
impact of these changes this change
was not material
to
our
consolidated
results
of operations.
operations
and,
therefore,
we
did
not
restate
prior
period
financial
statements
for
comparability.
Our General Mills Brasil Alimentos Ltda (Yoki) and
India businesses remainbusiness is on an April fiscal year end.

Certain reclassifications to our previously reported financial information have been made to conform to the current period presentation.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES

Cash and Cash Equivalents

We consider all investments
purchased with an original maturity of three months or less to be cash equivalents.

Inventories

All
inventories
in
the
United
States
other
than
grain
are
valued
at
the
lower
of
cost,
using
the
last-in,
first-out
(LIFO)
method,
or
market. Grain inventories are
valued at net realizable
value, and all related cash
contracts and derivatives are valued
at marketfair value, with
all net changes in value recorded in earnings currently.

Inventories
outside
of the
United
States are
generally
valued
at
the lower
of
cost, using
the
first-in,
first-out
(FIFO) method,
or market.

net

realizable value.
Shipping
costs associated
with the
distribution of
finished product
to our
customers are
recorded as
cost of
sales and
are recognized
when the related finished product is shipped to and accepted by the customer.

Land, Buildings, Equipment, and Depreciation

Land is recorded at historical cost.
Buildings and equipment, including
capitalized interest and internal engineering
costs, are recorded
at
cost
and
depreciated
over
estimated
useful
lives,
primarily
using
the
straight-line
method.
Ordinary
maintenance
and
repairs
are
charged
to
cost
of
sales.
Buildings
are
usually
depreciated
over
40
years,
and
equipment,
furniture,
and
software
are
usually
depreciated over estimated useful lives, primarily using the straight-line method. Ordinary maintenance and repairs are charged
3
to cost of sales. Buildings are usually depreciated over 40 years, and equipment, furniture, and software are usually depreciated over 3 to
10
years. Fully depreciated assets are retained
in buildings and equipment until disposal.
When an item is sold or
retired,
the
accounts
are
relieved
of
its
cost
and
related
accumulated
depreciation
and
the
resulting
gains
and
losses,
if
any,
are
recognized in earnings. As of May 29, 2016, assets held for sale were insignificant.

Long-lived assets
are reviewed
for impairment
whenever events
or changes
in circumstances
indicate that
the carrying
amount of
an
asset (or
(or
asset
group)
may
not
be
recoverable.
An
impairment
loss
would
be
recognized
when
estimated
undiscounted
future
cash
flows from
the operation
and disposition
of the
asset group
are less
than the
carrying amount
of the
asset group.
Asset groups
have
identifiable cash
flows and
are largely
independent of
other asset groups.
Measurement of
an impairment
loss would
be based
on the
excess
of
the
carrying
amount of
the
asset group
over
its fair
value.
Fair
value
is measured
using
a discounted
cash
flow model
or
independent appraisals, as appropriate.

Goodwill and Other Intangible Assets

Goodwill
is
not
subject
to
amortization
and
is
tested
for
impairment
annually
and
whenever
events
or
changes
in
circumstances
indicate that impairment may have
occurred. In fiscal 2016, we changed the date ofWe
perform our annual goodwill and
indefinite-lived intangible assetassets impairment assessment from
test as
of the
first day
of the third
second quarter
of the
fiscal year.
Impairment testing
is performed
for each
of our
reporting units.
We
compare
the
carrying
value
of
a
reporting
unit,
including
goodwill,
to
the
fair
value
of
the
unit.
Carrying
value
is
based
on
the
assets
and
liabilities
associated
with
the
operations
of
that
reporting
unit,
which
often
requires
allocation
of
shared
or
corporate
items
among
reporting
units.
If
the
carrying
amount
of
a
reporting
unit
exceeds
its
fair
value,
impairment
has
occurred.
We
recognize
an
51
impairment charge
for the
amount by
which the carrying
amount of
the reporting
unit exceeds
its fair
value up
to the first day
total amount
of the second quarter to more closely align with the timing of our annual long-range planning process. Impairment testing is performed for each of our reporting units. We compare the carrying value of a reporting unit, including
goodwill allocated
to the fair value of the
reporting unit. Carrying value is based on the assets and liabilities associated with the operations of that reporting unit, which often requires allocation of shared or corporate items among reporting units. If the carrying amount of a reporting unit exceeds its fair value, we revalue all assets and liabilities of the reporting unit, excluding goodwill, to determine if the fair value of the net assets is greater than the net assets including goodwill. If the fair value of the net assets is less than the carrying amount of net assets including goodwill, impairment has occurred.
Our estimates
of fair
value are
determined based
on a
discounted
cash flow
model. Growth
rates for sales and profits are determined using inputs from our long-range
planning process. We also make
estimates of discount rates,
perpetuity growth assumptions, market comparables, and other factors.

We evaluate the
useful lives of our other intangible assets, mainly brands,
to determine if they are finite or indefinite-lived.
Reaching a
determination
on
useful
life
requires
significant
judgments
and
assumptions
regarding
the
future
effects
of
obsolescence,
demand,
competition, other economic
factors (such as the
stability of the industry,
known technological advances,
legislative action that
results
in an uncertain or
changing regulatory environment,
and expected changes in
distribution channels), the level
of required maintenance
expenditures,
and
the
expected
lives
of
other
related
groups
of
assets.
Intangible
assets
that
are
deemed
to
have definite
finite
lives
are
amortized on a straight-line basis, over their useful lives, generally ranging
from
4
to
30
years.

Our indefinite-lived
intangible assets,
mainly intangible
assets primarily
associated with
the
Blue Buffalo
,
Pillsbury
,
Totino’s
,Progresso,Yoplait,
Old El
Paso
,Yoki
Progresso
,
Annie’s
,
Häagen-Dazs
, and Annie’s
Yoki
brands, are also
tested for impairment
annually and whenever
events or changes
in
circumstances
indicate
that
their
carrying
value
may
not
be
recoverable.
Our
estimate
of
the
fair
value
of
the
brands
is
based
on
a
discounted
cash
flow
model
using
inputs
which
included
projected
revenues
from
our
long-range
plan,
assumed
royalty
rates
that
could be payable if we did not own the brands, and a discount rate.

Our
finite-lived
intangible
assets,
primarily
acquired
franchise agreements
and
customer
relationships,
are
reviewed
for
impairment
whenever
events or
changes
in circumstances
indicate
that the
carrying
amount of
an asset
may
not be
recoverable.
An impairment
loss would be
recognized when
estimated undiscounted
future cash flows
from the operation
and disposition of
the asset are
less than
the
carrying
amount
of
the
asset.
Assets
generally
have
identifiable
cash
flows
and
are
largely
independent
of
other
assets.
Measurement of an
impairment loss would
be based on
the excess of
the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows from the operation and disposition of the asset are less than the carrying amount of the asset. Assets generally have identifiable cash flows and are largely independent of other assets. Measurement of an impairment loss would be based on the excess of the carrying amount
of the asset over
its fair value.
Fair value is
measured using a discounted cash flow model or other similar valuation model,
as appropriate.

Leases
We
determine whether
an arrangement
is a lease
at inception.
When our
lease arrangements
include lease and
non-lease components,
we account for lease and non-lease components (e.g. common area maintenance)
separately based on their relative standalone prices.
Any
lease
arrangements
with
an
initial
term
of
12
months
or
less
are
not
recorded
on
our
Consolidated
Balance
Sheet,
and
we
recognize lease costs for these
lease arrangements on a straight-line
basis over the lease term. Many
of our lease arrangements provide
us with
options to
exercise one
or more
renewal terms
or to
terminate the
lease arrangement.
We
include these
options when
we are
reasonably certain
to exercise them
in the lease
term used to
establish our
right of use
assets and lease
liabilities. Generally,
our lease
agreements do not include an option to purchase the leased asset, residual value guarantees,
or material restrictive covenants.
We
have
certain
lease
arrangements
with
variable
rental
payments.
Our
lease
arrangements
for
our
Häagen-Dazs
retail
shops
often
include rental payments
that are based
on a percentage
of retail sales. We
have other lease
arrangements that are
adjusted periodically
based on
an inflation
index or rate.
The future
variability of these
payments and
adjustments are
unknown, and
therefore they are
not
included
as
minimum
lease
payments
used
to
determine
our
right
of
use
assets
and
lease
liabilities.
Variable
rental
payments
are
recognized in the period in which the obligation is incurred.
As
most
of
our
lease
arrangements
do
not
provide
an
implicit
interest
rate,
we
apply
an
incremental
borrowing
rate
based
on
the
information available at the commencement date of the lease arrangement
to determine the present value of lease payments.
Investments in Unconsolidated Joint Ventures

Our
investments
in
companies
over
which
we
have
the
ability
to
exercise
significant
influence
are
stated
at
cost
plus
our
share
of
undistributed
earnings
or
losses.
We
receive
royalty
income
from
certain
joint
ventures,
incur
various
expenses (primarily
(primarily
research
and
development),
and
record
the
tax
impact
of
certain
joint
venture
operations
that
are
structured
as
partnerships.
In
addition,
we
make
advances
to
our
joint
ventures
in
the
form
of
loans
or
capital
investments.
We
also
sell
certain
raw
materials,
semi-finished
goods, and finished goods to the joint ventures, generally at market prices.

In addition,
we assess our
investments in our
joint ventures if
we have reason
to believe an
impairment may have
occurred including,
but not
limited to,
as a results
result of
ongoing operating
losses, projected
decreases in
earnings, increases
in the weighted average
weighted-average
cost of
capital,
or
significant
business
disruptions.
The
significant
assumptions
used
to
estimate
fair
value
include
revenue
growth
and
profitability,
royalty
rates,
capital
spending,
depreciation
and
taxes,
foreign
currency
exchange
rates,
and
a
discount
rate.
By
their
nature, these projections
and assumptions are uncertain.
If we were to
determine the current
fair value of our
investment was less than
the carrying value of
the investment, then we
would assess if the
shortfall was of a temporary
or permanent nature and
write down the
investment to its fair value if we concluded the impairment is other than
temporary.

Redeemable Interest

We

52
Revenue Recognition
Our revenues primarily result
from contracts with customers,
which are generally short-term
and have a 51 percent controlling interestsingle performance
obligation
– the
delivery of
product. We
recognize revenue
for the
sale of packaged
foods at the
point in Yoplait SAS, a consolidated entity. Sodiaal International (Sodiaal) holds the remaining 49 percent interest in Yoplait SAS. Sodiaal
time when our
performance obligation
has the ability to put all or a portion of its redeemable interest to us at fair value once per year, up to three times before December 2024. This put option requires us to classify Sodiaal’s interest as a redeemable interest outside of equity on our Consolidated Balance Sheets for as long as the put is exercisable by Sodiaal. When the put is no longer exercisable, the redeemable interest will be reclassified to noncontrolling interests on our Consolidated Balance Sheets. We adjust the valuebeen satisfied and control of the redeemable interest through additional paid-in capital on
product has transferred to our Consolidated Balance Sheets quarterly to the redeemable interest’s redemption value, customer,
which approximates its fair value. During the second quarter of fiscal 2016, we adjusted the redeemable interest’s redemption value based on a discounted cash flow model. The significant assumptions used to estimate the redemption value include projected revenue growth and profitability from our long-range plan, capital spending, depreciation, taxes, foreign currency exchange rates, and a discount rate.

Revenue Recognition

We recognize sales revenuegenerally occurs when the shipment

is accepted by
our customer.
Sales include
shipping and
handling charges
billed to
the customer
and are
reported
net of
variable consideration
and
consideration
payable
to
our
customers,
including
trade
promotion,
consumer
coupon
redemption trade promotion
and
other costs,
reductions
to
the
transaction
price,
including
estimated allowances
for
returns, unsalable
product,
and
prompt
pay
discounts.
Sales, use,
value-added,
and
other
excise
taxes
are
not recognized
included
in
revenue. Coupons
Trade
promotions
are
recorded when distributed, based on
using
significant
judgment
of
estimated redemption rates. Trade promotions are recorded based on estimated
participation and
performance levels
for offered
programs at
the time
of sale.
Differences between
estimated and
actual reductions
to
the
transaction
price
are
recognized
as
a
change
in
estimate
in
a
subsequent
period.
We
generally
do
not
allow
a
right
of
return.
However,
on a
limited case-by-case
basis with
prior
approval, we
may
allow customers
to return
product. In
limited circumstances,
product
returned
in
saleable
condition
is
resold
to
other
customers
or
outlets.
Receivables
from
customers
generally
do
not
bear
interest. TermsPayment terms and
collection patterns vary around
the world and by channel. The
channel, and are short-term,
and as such, we do
not have
any significant financing components.
Our allowance for doubtful
accounts represents our estimate of probable non-payments and
expected credit losses in related
to
our existing
trade
receivables.
We
pool
our
trade
receivables
based
on
similar
risk
characteristics,
such
as determined based on a review of past due balances
geographic
location,
business
channel, and other specific
account data. To
estimate our allowance
for doubtful
accounts, we leverage
information on historical
losses, asset-
specific
risk
characteristics,
current
conditions,
and reasonable
and
supportable
forecasts of
future
conditions.
Account
balances
are
written off
against the
allowance when
we deem
the amount
is uncollectible.

Please see
Note 17
for a
disaggregation of
our revenue
into
categories
that
depict
how
the
nature,
amount,
timing,
and
uncertainty
of
revenue
and
cash
flows
are
affected
by
economic
factors. We do
not have material contract assets or liabilities arising from our contracts with customers.
Environmental

Costs

Environmental costs
relating to
existing conditions
caused by
past operations
that do
not contribute
to current
or future
revenues are
expensed. Liabilities
for anticipated
remediation costs
are recorded
on an
undiscounted basis
when they
are probable
and reasonably
estimable, generally no later than the completion of feasibility studies or our
commitment to a plan of action.

Advertising Production Costs

We expense the
production costs of advertising the first time that the advertising takes place.

Research and Development

All expenditures for research and development
(R&D) are charged against earnings in the period
incurred. R&D includes expenditures
for
new
product
and
manufacturing
process
innovation,
and
the
annual
expenditures
are
comprised
primarily
of
internal
salaries,
wages, consulting, and supplies
attributable to R&D activities.
Other costs include depreciation
and maintenance of research
facilities,
including assets at facilities that are engaged in pilot plant activities.

Foreign Currency Translation

For
all
significant
foreign
operations,
the
functional
currency
is
the
local
currency.
Assets
and
liabilities
of
these
operations
are
translated
at
the
period-end
exchange
rates.
Income
statement
accounts
are
translated
using
the
average
exchange
rates
prevailing
during the period. Translation
adjustments are reflected within
accumulated other comprehensive
loss (AOCI) in stockholders’
equity.
Gains
and
losses
from
foreign
currency
transactions
are
included
in
net
earnings
for
the
period,
except
for
gains
and
losses
on
investments
in
subsidiaries
for
which
settlement
is not
planned
for
the period, except for foreseeable
future and
foreign
exchange
gains and
losses on investments in subsidiaries for which settlement is not planned for the foreseeable future and foreign exchange gains and losses on
instruments designated as net investment hedges. These gains and losses are recorded
in AOCI.

Derivative Instruments

All derivatives are recognized
on our Consolidated
Balance Sheets at fair
value based on quoted
market prices or our
estimate of their
fair value,
and are
recorded in
either current
or noncurrent
assets or
liabilities based
on their
maturity.
Changes in
the fair
values of
derivatives are
recorded in
net earnings
or other
comprehensive income,
based on
whether the
instrument is
designated and
effective
as
a
hedge
transaction
and,
if
so,
the
type
of
hedge
transaction.
Gains
or
losses
on
derivative
instruments
reported
in
AOCI
are
reclassified
to
earnings
in
the
period
the
hedged
item
affects
earnings.
If
the
underlying
hedged
transaction
ceases
to
exist,
any
associated amounts reported in AOCI are reclassified to earnings at that time. Any ineffectiveness is recognized in earnings in the current period.

Stock-based Compensation

We generally
measure compensation expense for grants of restricted stock
units and performance share units using the value of
a share
of
our
stock
on
the
date
of
grant.
We
estimate
the
value
of
stock
option
grants
using
a
Black-Scholes
valuation
model. Stock-based
Generally,
stock-based
compensation
is recognized
straight
line over
the
vesting
period.
Our stock-based
compensation
expense is
recorded
in
selling, general
and
administrative
(SG&A)
expenses
and
cost of
sales in
our
Consolidated
Statements of
Earnings
and
allocated
to
each reportable segment in our segment results.

Certain equity-based compensation plans contain provisions
that accelerate vesting of awards upon retirement, termination,
or death of
eligible
employees
and
directors.
We
consider
a
stock-based
award
to
be vested
when
the employee’s
or
director’s
retention
of
the
award
is no
longer
contingent
on
providing
subsequent
service.
Accordingly,
the
related
compensation
cost
is generally
recognized
53
immediately
for
awards
granted
to
retirement-eligible
individuals
or
over
the
period
from
the
grant
date
to
the
date
retirement
eligibility is achieved, if less than the stated vesting period.

We report the
benefits of tax deductions in excess of recognized compensation cost as a financing an operating
cash flow, thereby reducing net operating cash flows and increasing net financing cash flows.

flow.

Defined Benefit Pension, Other Postretirement Benefit, and Postemployment
Benefit Plans

We
sponsor
several domestic
and foreign
defined
benefit plans
to provide
pension, health
care, and
other welfare
benefits to
retired
employees. Under
certain circumstances,
we also
provide accruable
benefits, primarily
severance, to
former or
inactive employees
in
the
United
States,
Canada,
and Mexico and members
Mexico.
We
recognize
an
obligation
for
any
of our Board of Directors, including severance and certain other
these
benefits payable upon death. We recognize an obligation for any of these benefits
that
vest
or
accumulate
with
service.
Postemployment benefits
that do not
vest or
accumulate with
service (such
as severance
based solely
on annual pay
rather than
years
of service) are charged to expense when incurred. Our postemployment
benefit plans are unfunded.

We
recognize the underfunded
or overfunded status
of a defined
benefit pension plan
as an asset
or liability and
recognize changes
in
the funded status in the year in which the changes occur through AOCI.

Use of Estimates

Preparing
our
Consolidated
Financial
Statements
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
requires
us to
make estimates
and assumptions
that affect
reported amounts
of assets
and
liabilities, disclosures
of contingent
assets
and liabilities disclosures of contingent assets and liabilities
at the
date of
the financial
statements, and
the reported
amounts of
revenues and
expenses during
the reporting
period.
These
estimates
include
our
accounting
for promotional expenditures,
revenue
recognition,
valuation
of
long-lived
assets,
intangible
assets, redeemable interest,
stock-based
compensation,
income
taxes,
and
defined
benefit
pension,
other
postretirement
benefit
and
postemployment
benefit
plans.
Actual
results could differ from our estimates.

Other

New Accounting Standards

In the
first quarter
of fiscal
2021,
we adopted
new accounting
requirements
related
to the
measurement
of credit
losses on
financial
instruments, including
trade receivables.
The new
standard and
subsequent
amendments replace
the incurred
loss impairment
model
with a
forward-looking
expected credit
loss model,
which will
generally
result in
earlier recognition
of credit
losses. Our
allowance
for doubtful
accounts represents
our estimate
of expected
credit losses related
to our trade
receivables. We
pool our trade
receivables
based on similar risk characteristics,
such as geographic location,
business channel, and other
account data. To
estimate our allowance
for
doubtful
accounts,
we
leverage
information
on
historical
losses,
asset-specific
risk
characteristics,
current
conditions,
and
reasonable and
supportable forecasts
of future
conditions. Account
balances are
written off
against the
allowance when
we deem
the
amount
is
uncollectible.
We
adopted
the
requirements
of
the
new
standard
and
subsequent
amendments
using
the
modified
retrospective transition approach, and recorded a decrease to retained
earnings of $
5.7
million after-tax.
In the firstfourth quarter of
fiscal 2015,2020, we adopted new
accounting requirements on related to
the annual disclosure requirements for
defined
benefit pension
and other
postretirement benefit
plans. The
standard modifies
specific disclosures
to improve
usefulness to
financial
statement presentationusers.
We
adopted the
requirements of unrecognized tax benefits when
the new
standard using
a net operating loss, a similar tax loss, or a tax credit carryforward exists.retrospective
approach. The
adoption of
this guidance
did
not have an impact on our results of operations or financial position.

In
the second
first
quarter
of
fiscal
2020,
we
adopted
new
accounting
requirements
for
hedge
accounting.
The
standard
amends
the
hedge
accounting
recognition
and
presentation
requirements
to
better
align
an
entity’s
risk
management
activities
and
financial
reporting.
The new
standard also
simplifies the
application
of fiscal 2015, we adopted new hedge
accounting requirements for share-based payment awards issued based upon specific performance targets. guidance.
The adoption of this guidance
did not
have a
material impact
on our
results of operations or financial position.

In
the
first
quarter
of
fiscal
2020,
we
adopted
new
requirements
for
the
accounting,
presentation,
and
classification
of
leases.
This
results in certain leases being
capitalized as a right of
use asset with a related liability
on our Consolidated Balance
Sheet. We
adopted
this guidance utilizing the first quartercumulative
effect adjustment approach, which
required application of fiscal 2016, we adopted new accounting requirements for the guidance
at the adoption date, and
elected
certain
practical
expedients
permitted
under
the
transition
guidance,
including
not
reassessing
whether
existing
contracts
contain leases and
carrying forward the
historical classification of debt issuance costs presented in
those leases. In addition,
we elected not
to recognize leases with
an
initial term of
12 months or
less on our
Consolidated Balance Sheet
and to continue
our historical treatment
of land easements,
under
permitted elections.
This guidance
did not
have a
material impact
on retained
earnings, our
Consolidated
Statements of
Earnings, or
our Consolidated Statements of Cash Flows.
NOTE 3. ACQUISITION AND DIVESTITURES
In fiscal 2022, we sold our European dough businesses and recorded
a net pre-tax gain on sale of $
30.4
million.
During
the
fourth
quarter
of
fiscal
2022,
we
entered
into
a
definitive
agreement
to
acquire
TNT
Crust.
The
transaction
closed
subsequent to the balance sheet as a direct reduction from the carrying amountend of the debt liability. This presentation change has been implemented retroactively. The adoption of this guidance did not have a material impact on our financial position.

In the fourth quarter of fiscal 2016, we adopted new accounting requirements for the presentation of deferred tax assets and liabilities, requiring noncurrent classification for all deferred tax assets and liabilities on the statement of financial position. This presentation change has been implemented retroactively. The adoption of this guidance did not have a material impact on our financial position.

NOTE 3. ACQUISITION AND DIVESTITURES

2022.

54
During the fourth quarter of
fiscal 2016,2022, we soldentered into a
definitive agreement to sell our General Mills de Venezuela CA subsidiaryHelper
main meals and Suddenly Salad
side
dishes business to a third party and exited our business in Venezuela. As a result of this transaction, we recorded a pre-tax loss of $37.6 million. In addition, we sold our General Mills Argentina S.A. foodservice business in Argentina to a third party and recorded a pre-tax loss of $14.8 million.

During the second quarter of fiscal 2016, we sold our North American Green Giant product linesEagle Family

Foods Group for $822.7 million in cash, and we recorded a pre-tax gain of $199.1 approximately
$
610
million. We received net cash proceeds
expect to close the divestiture
in the first quarter
of $788.0 million after transaction
fiscal 2023. We
have classified all related costs. After the divestiture, we retained a brand intangible asset onassets as held for sale in our Consolidated Balance Sheets as of $30.1 May
29, 2022.
During
the
third
quarter
of
fiscal
2022,
we
sold
our
interests
in
Yoplait
SAS,
Yoplait
Marques
SNC,
and
Liberté
Marques
Sàrl
to
Sodiaal International (Sodiaal) in
exchange for Sodiaal’s
interest in our Canadian yogurt business, a
modified agreement for the
use of
Yoplait
and
Liberté
brands in the
United States and
Canada, and cash.
We
recorded a net
pre-tax gain of
$
163.7
million on the
sale of
these businesses including
an additional net pre-tax gain
of $
14.9
million related to our continued use of theGreen Giant brandpurchase price
adjustments in certain markets outside of North America.

During the second fourth

quarter of
fiscal 2015, 2022.
During
the
first
quarter
of
fiscal
2022,
we
acquired Annie’s,
Tyson
Foods’
pet
treats
business
for
$
1.2
billion
in
cash.
We
financed
the
transaction
with
a publicly traded food company headquartered
combination
of
cash
on
hand
and
short-term
debt.
We
consolidated
Tyson
Foods’
pet
treats
business
into
our
Consolidated
Balance
Sheets
and
recorded
goodwill
of
$
762.3
million,
indefinite-lived
intangible
assets
for
the
Nudges
,
Top
Chews
, and
True
Chews
brands
totaling
$
330.0
million
in Berkeley, California,
aggregate,
and
a
finite-lived
customer
relationship
asset
of
$
40.0
million.
The goodwill is included in
the Pet reporting unit and is
deductible for an aggregate purchase price of $821.2 million, which we funded by issuing debt. We consolidated Annie’s into our Consolidated Balance Sheets and recorded goodwill of $589.8 million, an indefinite lived intangible asset for theAnnie’s brand of $244.5 million, and a finite lived customer relationship asset of $23.9 million.tax purposes. The
pro forma effects of
this acquisition were not
material.

During
the
fourth
quarter
of
fiscal
2021,
we
recorded
a
pre-tax
loss
of
$
53.5
million
related
to
the
sale
of
our
Laticínios Carolina
business in Brazil.
NOTE 4. RESTRUCTURING, IMPAIRMENT,
AND OTHER EXIT COSTS

INTANGIBLE ASSET IMPAIRMENT

In fiscal 2015, we recorded a $260.0 million charge related to the impairment of ourGreen Giant brand intangible asset in restructuring, impairment, and other exit costs. See Note 6 for additional information.

RESTRUCTURING INITIATIVES

We view
our restructuring activities as actions
that help us meet our long-term
growth targets. Activities we undertake must meettargets and are evaluated
against internal rate of
return and net
present value targets.
Each restructuring
action normally takes
one to two
years to complete.
At completion (or
as each
major stage
is completed
in the
case of
multi-year programs),
the project
begins to
deliver cash
savings and/or
reduced depreciation.
These activities
result in
various restructuring
costs, including
asset write-offs,
exit charges
including severance,
contract termination
fees, and decommissioning
and other costs.
Accelerated depreciation
associated with restructured
assets, as used
in the context
of our
disclosures
regarding
restructuring
activity,
refers
to
the
increase
in
depreciation
expense
caused
by
shortening
the
useful
life
or
updating
the salvage
value
of depreciable
fixed
assets to
coincide
with the
end of
production
under an
approved
restructuring
plan.
Any impairment of the asset is recognized immediately in the period
the plan is approved.

We are currently pursuing several multi-year restructuring initiatives designed to increase our efficiency and focus our business behind our key growth strategies. Charges

Restructuring charges recorded in fiscal 20162022 were
as follows:
Expense, in Millions
International manufacturing and 2015 related to these initiatives were as follows:

  Fiscal 2016  Fiscal 2015 
In Millions Severance  Asset
Write-offs		  Pension
Related		  Accelerated
Depreciation		  Other  Total  Severance  Asset
Write-offs		  Pension
Related		  Accelerated
Depreciation		  Other  Total 

Project Compass

 $45.4   $—   $1.4   $—   $7.9   $54.7   $—   $—   $—   $—   $— �� $—  

Project Catalyst

  (8.7)   1.2    —    —    —    (7.5)   121.5    12.3    6.6    —    8.0    148.4  

Project Century

  30.9    30.7    19.1    76.5    25.4    182.6    44.3    42.3    31.2    53.1    10.9    181.8  

Combination of certain operational facilities

  —    —    —    —    —    —    13.0    0.7    —    —    0.2    13.9  

Charges associated with restructuring actions previously announced

  —    —    —    —    —    —    (0.6)   —    —    —    —    (0.6) 

Total

 $67.6   $31.9   $20.5   $76.5   $33.3   $229.8   $178.2   $55.3   $37.8   $53.1   $19.1   $343.5  
                                                 

In the first quarter of fiscal 2016, we approved Project Compass, alogistics operations

$
15.0
Net recoveries associated with restructuring plan designed actions previously announced
(38.2)
Total net restructuring
recoveries
$
(23.2)
In
fiscal
2022,
we
approved
restructuring
actions
in
the
International
segment
to enable our International segment to accelerate long-term growth through increased organizational effectiveness
drive
efficiencies
in
manufacturing
and reduced administrative expense. In connection with this project, we expect to eliminate approximately 725 to 775 positions.
logistics
operations. We
expect to incur approximately $60 million of net expenses relating to this action of which approximately $60 million will be cash. We recorded $54.7
$
21
million of restructuring charges relating to this action in fiscal 2016. We expect this action to be completed by the end of fiscal 2017.

Project Century (Century) began in fiscal 2015 as a review of our North American manufacturing

and distribution network to streamline operations and identify potential capacity reductions. In the second quarter of fiscal 2016, we broadened the scope of Project Century to identify opportunities to streamline our supply chain outside of North America. As part of the expanded project, we approved a restructuring plan to close manufacturing facilities in our International segment supply chain located in Berwick, United Kingdom and East Tamaki, New Zealand. These actions affected approximately 285 positions. We expect to incur total restructuring charges of approximately $41 million relatingproject-related costs
related to these actions,
of
which
approximately
$
12
million will
be cash.
These charges
are expected
to consist
of approximately
$
8
million
of severance
and
$
10
million of
other costs,
primarily
asset write-offs.
We
also expect
to incur
approximately $
3
million of
project-related costs.
We
recognized
$
7.9
million of
severance and
$
7.1
million of
other costs
in fiscal
2022. We
expect these
actions to
be completed
by the
end of
fiscal 2024
.
As a result
of shifts in
the composition
of estimated expenses
related to our
previously announced
global organizational
structure and
resource realignment actions, we recorded a $
34.0
million reduction to our restructuring reserves as of May 29,
2022, primarily related
to
estimated
severance
charges. We
expect
these
actions
to
incur
total
restructuring
charges
of
approximately
$
125
million
to
$
135
million,
of which
approximately $20 $
100
million
to $
110
million will
be cash.
We recorded $30.0
expect
approximately
$
100
million
to be
severance
and approximately $
30
million of restructuring charges relating to these actions in fiscal 2016.other costs. We expect
these actions to be completed by the end of
fiscal 2018.

As part of Century, in the first quarter of fiscal 2016, we approved a restructuring plan2023

.
Certain actions are subject to close our West Chicago, Illinois cerealunion negotiations and dry dinner manufacturing plant in our U.S. Retail segment supply chain. This action will affect approximately 500 positions, and we expect to incur approximately $117 works counsel consultations,
where required.
We paid net
$
93.9
million of net expenses relating to this action, of which approximately $53 million will be cash. We recorded $79.2 million of restructuring charges relating to this action in fiscal 2016. We expect this action to be completed by the end of fiscal 2019.

As part of Century, in the first quarter of fiscal 2016, we approved a restructuring plan to close our Joplin, Missouri snacks plant in our U.S. Retail segment supply chain. This action affected approximately 120 positions, and we incurred $6.3 million of net expenses relating to this action, of which less than $1 million was cash. We recorded $6.3 million of restructuring charges relating to this action in fiscal 2016. This action was completed in fiscal 2016.

As part of Century, in the third quarter of fiscal 2015, we approved a restructuring plan to reduce our refrigerated dough capacity and exit our Midland, Ontario, Canada and New Albany, Indiana facilities, which support our U.S. Retail, International, and Convenience Stores and Foodservice supply chains. The Midland action will affect approximately 100 positions, and we expect to incur approximately $23 million of net expenses relating to this action, of which approximately $16 million will be cash. We recorded $2.7 million of restructuring charges relating to this action in fiscal 2016. We recorded $6.5 million of restructuring charges relating to this action in fiscal 2015. The New Albany action will affect approximately 400 positions, and we expect to incur approximately $82 million of net expenses relating to this action of which approximately $40 million will be cash. We recorded $17.1 million of restructuring charges relating to this action in fiscal 2016 and $51.3 million in fiscal 2015. We expect these actions to be completed by the end of fiscal 2018.

As part of Century, in the second quarter of fiscal 2015, we approved a restructuring plan to consolidate yogurt manufacturing capacity and exit our Methuen, Massachusetts facility in our U.S. Retail segment and Convenience Stores and Foodservice segment supply chains. This action affected approximately 175 positions. We expect to incur approximately $58 million of net expenses relating to this action of which approximately $12 million will be cash. We recorded $15.6 million of restructuring charges relating to this action in fiscal 2016 and $43.6 million in fiscal 2015. This action was largely completed in fiscal 2016.

As part of Century, in the second quarter of fiscal 2015, we approved a restructuring plan to eliminate excess cereal and dry mix capacity and exit our Lodi, California facility in our U.S. Retail supply chain. This action affected approximately 430 positions. We incurred $93.8 million of net expenses relating to this action of which $20 million was cash. We recorded $30.6 million of restructuring charges relating to this action in fiscal 2016 and $63.2 million in fiscal 2015. This action was completed in fiscal 2016.

In addition to the actions taken at certain facilities described above, we incurred $1.1 million of restructuring charges in fiscal 2016, relating to Century, and $17.2 million in fiscal 2015, of which $6 million was cash.

During the second quarter of fiscal 2015, we approved Project Catalyst, a restructuring plan to increase organizational effectiveness and reduce overhead expense. In connection with this project, we eliminated approximately 750 positions primarily in the United States. We incurred $140.9 million of net expenses relating to these actions of which $118 million will be cash. In fiscal 2016, we reduced the estimate of charges related to this action by $7.5 million. We recorded $148.4 million of restructuring charges relating to this action in fiscal 2015. These actions were largely completed in fiscal 2015.

During the first quarter of fiscal 2015, we approved a plan to combine certain Yoplait and General Mills operational facilities within our International segment to increase efficiencies and reduce costs. This action will affect approximately 240 positions. We expect to incur approximately $15 million of net expenses relating to this action of which approximately $12 million will be cash. We recorded $13.9 million of restructuring charges relating to this action in fiscal 2015. We expect this action to be completed in fiscal 2017.

In fiscal 2014, we recorded $3.6 million of restructuring charges related to a productivity and cost savings plan approved in the fourth quarter of fiscal 2012. These restructuring actions were completed in fiscal 2014.

In fiscal 2016, we paid $122.6 million in cash relating to restructuring initiatives. In fiscal 2015, we paid $63.6 million in cash relating to restructuring initiatives. In fiscal 2014, we paid $22.4 million in cash related to restructuring actions.

In addition to restructuring charges, we expect to incur approximately $109 million of additional project-related costs, which will be recorded in cost of sales, all of which will be cash. We recorded project-related costs in cost of sales of $57.5 millionactions in fiscal 2016 and $13.2 2022. We

paid net $
21.8
million in fiscal 2015. In addition, we paid $54.5 million inof cash in fiscal 2016 and $9.7 million2021.
55
Restructuring charges recorded in fiscal 2015 2021 were
as follows:
Expense, in Millions
Global organizational structure and resource alignment
$
157.3
International route-to-market and supply chain optimization
13.0
Charges associated with restructuring actions previously
announced
2.4
Total restructuring
charges
$
172.7
In fiscal
2020, we
did not
undertake any
new restructuring
actions and
recorded $
50.2
million of
restructuring charges
for project-related costs.

previously

announced restructuring actions.
Restructuring and impairment charges and project-related
costs are classified in our Consolidated Statements of Earnings as follows:

   Fiscal 
In Millions  2016   2015   2014 

Cost of sales

  $78.4    $59.6    $—  

Restructuring, impairment, and other exit costs

   151.4     283.9     3.6  

Total restructuring charges

   229.8     343.5     3.6  
                

Project-related costs classified in cost of sales

  $57.5    $13.2    $—  
                

Fiscal Year
In Millions
2022
2021
2020
Restructuring, impairment, and other exit (recoveries) costs
$
(26.5)
$
170.4
$
24.4
Cost of sales
3.3
2.3
25.8
Total restructuring
and impairment (recoveries) charges
(23.2)
172.7
50.2
Project-related costs classified in cost of sales
$
0
$
0
$
1.5
The roll forward of our restructuring and other exit cost reserves, included
in other current liabilities, is as follows:

In Millions  Severance  

Contract

Termination

  

Other

Exit Costs

  Total 

Reserve balance as of May 26, 2013

  $19.5   $—   $—   $19.5  

2014 charges, including foreign
currency translation

   6.4    —    —    6.4  

Utilized in 2014

   (22.4)   —    —    (22.4) 

Reserve balance as of May 25, 2014

   3.5    —    —    3.5  

2015 charges, including foreign
currency translation

   176.4    0.6    8.1    185.1  

Utilized in 2015

   (61.3)   —    (6.5)   (67.8) 

Reserve balance as of May 31, 2015

   118.6    0.6    1.6    120.8  

2016 charges, including foreign
currency translation

   64.3    1.6    4.3    70.2  

Utilized in 2016

   (109.3)   (0.7)   (4.4)   (114.4) 

Reserve balance as of May 29, 2016

  $73.6   $1.5   $1.5   $76.6  
                  

In Millions
Severance
Contract
Termination
Other Exit
Costs
Total
Reserve balance as of May 26, 2019
$
36.5
$
0
$
0
$
36.5
Fiscal 2020 charges, including foreign currency translation
(5.0)
0.8
1.7
(2.5)
Utilized in fiscal 2020
(13.7)
(0.8)
(1.7)
(16.2)
Reserve balance as of May 31, 2020
17.8
0
0
17.8
Fiscal 2021 charges, including foreign currency translation
142.3
0.3
1.3
143.9
Utilized in fiscal 2021
(12.8)
(0.1)
0
(12.9)
Reserve balance as of May 30, 2021
147.3
0.2
1.3
148.8
Fiscal 2022 charges, including foreign currency translation
2.2
0
1.2
3.4
Reserve adjustment
(34.0)
0
0
(34.0)
Utilized in fiscal 2022
(80.1)
(0.2)
(1.1)
(81.4)
Reserve balance as of May 29, 2022
$
35.4
$
0
$
1.4
$
36.8
The charges
recognized in
the roll forward
of our reserves
for restructuring
and other exit
costs do not
include items
charged directly
to expense (e.g., asset impairment charges,
the gain or loss on the sale of restructured assets, and the
write-off of spare parts) and other
periodic
exit
costs
recognized
as
incurred,
as
those
items
are
not
reflected
in
our
restructuring
and
other
exit
cost
reserves
on
our
Consolidated Balance Sheets.

NOTE 5. INVESTMENTS IN UNCONSOLIDATED
JOINT VENTURES

We
have a
50
percent equity interest
in Cereal
Partners Worldwide
(CPW), which
manufactures and
markets ready-to-eat
cereal products
in
more than
130
countries outside the United
States and Canada. CPW also
markets cereal bars in several
European countries and manufactures
private label cereals
for customers in the
United Kingdom. We
have guaranteed a
portion of CPW’s
debt and its
pension obligation in
the United Kingdom.

We
also have
a
50
percent equity interest
in Häagen-Dazs
Japan, Inc.
(HDJ). This joint
venture manufactures
and markets
Häagen-Dazs
ice
cream products and frozen novelties.

Results from our CPW and HDJ joint ventures are reported for the
12
months ended March 31.

56
Joint venture related balance sheet activity is as follows:

In Millions  May 29,
2016		   May 31,
2015		 

Cumulative investments

  $518.9    $530.6  

Goodwill and other intangibles

   469.2     465.1  

Aggregate advances included in cumulative investments

   300.3     390.3  
           

In Millions
May 29, 2022
May 30, 2021
Cumulative investments
$
416.4
$
486.2
Goodwill and other intangibles
444.9
505.7
Aggregate advances included in cumulative investments
254.4
294.2
Joint venture earnings and cash flow activity is as follows:

   Fiscal Year 
In Millions  2016   2015   2014 

Sales to joint ventures

  $10.5    $11.6    $12.1  

Net advances (repayments)

   (63.9)    102.4     54.9  

Dividends received

   75.1     72.6     90.5  
                

Fiscal Year
In Millions
2022
2021
2020
Sales to joint ventures
$
6.3
$
6.7
$
5.9
Net (repayments) advances
(15.4)
(15.5)
48.0
Dividends received
107.5
95.2
76.5
Summary combined financial information for the joint ventures on
a 100 percent basis is as follows:

   Fiscal Year 
In Millions  2016   2015   2014 

Net sales:

      

CPW

  $1,674.8    $1,894.5    $2,107.9  

HDJ

   369.4     370.2     386.9  

Total net sales

   2,044.2     2,264.7     2,494.8  
                

Gross margin

   867.6     925.4     1,030.3  

Earnings before income taxes

   234.8     220.9     219.1  

Earnings after income taxes

   186.7     170.7     168.8  
                

In Millions  May 29,
2016		   May 31,
2015		 

Current assets

  $814.1    $800.1  

Noncurrent assets

   959.9     962.1  

Current liabilities

   1,457.3     1,484.8  

Noncurrent liabilities

   81.7     118.2  
           

Fiscal Year
In Millions
2022
2021
2020
Net sales:
CPW
$
1,706.5
$
1,766.8
$
1,654.3
HDJ
427.8
422.4
391.3
Total net sales
2,134.3
2,189.2
2,045.6
Gross margin
803.1
882.9
785.3
Earnings before income taxes
249.9
247.8
214.0
Earnings after income taxes
201.0
201.7
176.5
In Millions
May 29, 2022
May 30, 2021
Current assets
$
823.9
$
877.4
Noncurrent assets
839.8
927.2
Current liabilities
1,298.8
1,424.4
Noncurrent liabilities
106.5
142.2
NOTE 6. GOODWILL AND OTHER INTANGIBLE
ASSETS

The components of goodwill and other intangible assets are as follows:

In Millions  May 29,
2016		   May 31,
2015		 

Goodwill

  $8,741.2    $8,874.9  

Other intangible assets:

    

Intangible assets not subject to amortization:

    

Brands and other indefinite-lived intangibles

   4,147.5     4,262.1  

Intangible assets subject to amortization:

    

Franchise agreements, customer relationships, and other finite-lived intangibles

   536.9     544.0  

Less accumulated amortization

   (145.8)    (129.1) 

Intangible assets subject to amortization

   391.1     414.9  

Other intangible assets

   4,538.6     4,677.0  

Total

  $13,279.8    $13,551.9  
           

In Millions
May 29, 2022
May 30, 2021
Goodwill
$
14,378.5
$
14,062.4
Other intangible assets:
Intangible assets not subject to amortization:
Brands and other indefinite-lived intangibles
6,725.8
6,628.1
Intangible assets subject to amortization:
Franchise agreements, customer relationships, and other finite-lived
intangibles
400.3
823.4
Less accumulated amortization
(126.2)
(300.9)
Intangible assets subject to amortization
274.1
522.5
Other intangible assets
6,999.9
7,150.6
Total
$
21,378.4
$
21,213.0
Based on
the carrying
value of
finite-lived intangible
assets as of
May 29, 2016,
2022, amortization
expense for
each of
the next five
fiscal
years is estimated to be approximately $28 $
20
million.

In
fiscal
2022,
we
changed
our
organizational
and
management
structure
to
streamline
our
global
operations.
As
a
result
of
these
changes,
we
reassessed
our
operating
segments
as
well
as
our
reporting
units.
Under
our
new
organizational
structure,
our
chief
operating
decision
maker
assesses
performance
and
makes
decisions
about
resources
to
be
allocated
to
our
segments
at
the
North
57
America Retail, International, Pet, and North America
Foodservice operating segment level. See Note 17 for
additional information on
our operating segments.
The changes in the carrying amount of goodwill for fiscal 2014, 2015,2020, 2021, and 2016 2022
are as follows:

In Millions  U.S.
Retail		   International   Convenience
Stores and
Foodservice		   Joint
Ventures		   Total 

Balance as of May 26, 2013

  $5,841.4    $1,387.0    $921.1    $472.7    $8,622.2  

Divestiture

   (12.2)    —     —     —     (12.2) 

Other activity, primarily foreign currency translation

   —     15.0     —     25.5     40.5  

Balance as of May 25, 2014

   5,829.2     1,402.0     921.1     498.2     8,650.5  

Acquisition

   589.8     —     —     —     589.8  

Other activity, primarily foreign currency translation

   —     (268.7)    —     (96.7)    (365.4) 

Balance as of May 31, 2015

   6,419.0     1,133.3     921.1     401.5     8,874.9  

Acquisitions

   54.1     29.4     —     —     83.5  

Divestitures

   (180.2)    (6.2)    —     —     (186.4) 

Other activity, primarily foreign currency translation

   —     (35.5)    —     4.7     (30.8) 

Balance as of May 29, 2016

  $6,292.9    $1,121.0    $921.1    $406.2    $8,741.2  
                          

In fiscal 2015, we reorganized certain reporting units within our U.S. Millions
North
America
Retail operating segment. Our chief operating decision maker continues to assess performance and make decisions about resources to be allocated to our segments at the U.S. Retail,
Pet
North
America
Foodservice
International and Convenience Stores and Foodservice operating segment level.

We performed our fiscal 2016 impairment assessment

Joint
Ventures
Total
Balance as of the first dayMay 26, 2019
$
6,676.5
$
5,300.5
$
648.8
$
960.6
$
409.4
$
13,995.8
Other activity, primarily
foreign
currency translation
(2.8)
0
0
(66.1)
(3.7)
(72.6)
Balance as of the second quarterMay 31, 2020
6,673.7
5,300.5
648.8
894.5
405.7
13,923.2
Divestiture
0
0
0
(1.2)
0
(1.2)
Other activity, primarily
foreign
currency translation
15.6
0
0
84.9
39.9
140.4
Balance as of fiscal 2016, and determined there was no impairmentMay 30, 2021
6,689.3
5,300.5
648.8
978.2
445.6
14,062.4
Acquisition
0
762.3
0
0
0
762.3
Divestitures
0
0
0
(201.8)
0
(201.8)
Reclassified to assets held for sale
(130.0)
0
0
0
0
(130.0)
Other activity, primarily
foreign
currency translation
(6.4)
0
0
(54.8)
(53.2)
(114.4)
Balance as of goodwill for any of our reporting units as their related fair values were substantially in excess of their carrying values.

May 29, 2022

$
6,552.9
$
6,062.8
$
648.8
$
721.6
$
392.4
$
14,378.5
The changes in the carrying amount of other intangible assets for fiscal 2014, 2015,2020, 2021, and 2016
2022 are as follows:

In Millions  U.S.
Retail		   International   

Joint

Ventures

   Total 

Balance as of May 26, 2013

  $3,312.4    $1,638.2    $64.5    $5,015.1  

Other activity, primarily foreign currency translation

   (4.9)    3.6     0.5     (0.8) 

Balance as of May 25, 2014

   3,307.5     1,641.8     65.0     5,014.3  

Acquisition

   268.4     —     —     268.4  

Impairment charge

   (260.0)    —     —     (260.0) 

Other activity, primarily foreign currency translation

   (4.0)    (340.3)    (1.4)    (345.7) 

Balance as of May 31, 2015

   3,311.9     1,301.5     63.6     4,677.0  

Acquisitions

   23.1     7.0     —     30.1  

Divestiture

   (119.6)    —     —     (119.6) 

Other activity, primarily amortization and foreign currency translation

   (3.7)    (44.6)    (0.6)    (48.9) 

Balance as of May 29, 2016

  $3,211.7    $1,263.9    $63.0    $4,538.6  
                     

As

In Millions
Total
Balance as of our fiscal 2016 assessment date, there was no impairmentMay 26, 2019
$
7,166.8
Other activity, primarily
amortization and foreign currency translation
(71.0)
Balance as of anyMay 31, 2020
7,095.8
Divestiture
(5.3)
Other activity, primarily
amortization and foreign currency translation
60.1
Balance as of our indefinite-livedMay 30, 2021
7,150.6
Acquisition
370.0
Divestitures
(621.8)
Intellectual property intangible assetsasset
210.4
Other activity, primarily
amortization and foreign currency translation
(109.3)
Balance as of May 29, 2022
$
6,999.9
Our
annual
goodwill
and
indefinite-lived
intangible
assets
impairment
test
was
performed
on
the
first
day
of
the
second
quarter
of
fiscal
2022,
and
we
determined
there
was
no
impairment
of
our
intangible
assets
as
their
related
fair
values
were
substantially
in
excess of the carrying values,
except for the Mountain High and
Uncle Toby’s
brand assets. intangible asset.
The excess fair value aboveas of the carrying valuefiscal 2022 test date of these the
Uncle Toby’s
brand assetsintangible asset is as follows:

In Millions  Carrying
Value		   Excess Fair
Value
Above
Carrying
Value		 

Mountain High

  $35.4     20% 

Uncle Toby’s

  $52.2     11% 
           

Our strategies for fiscal 2017 and fiscal 2018 will focus our growth investments on our brands and platforms with the strongest profitable growth potential. As a result, certain parts

In Millions
Carrying Value
of our U.S. Retail segment could experience reduced future sales projections. We performed a sensitivity analysis for certain brand intangible assets and determined that, while not impaired
Intangible Asset
Excess Fair Value
as of May 29, 2016,
Fiscal 2022 Test
Date
Uncle Toby's
$
55.0
7
%
While
having
significant
coverage
as
of
our
fiscal
2022
assessment
date,
the
Progresso
,
Green
Giant
,
andFood Should Taste Good brands
EPIC
brand
intangible
assets had risk of decreasing coverage. We
will continue to monitor these businesses.

In fiscal 2015, we made a strategic decision to redirectbusinesses for potential impairment.

The organizational changes
also resulted in changes
in certain resources supporting our Green Giant business in our U.S. Retail segment to other businesses withinreporting units,
one level below the segment. Therefore, future salessegment
level, and profitability projections were considered
a
triggering
event
that
required
a
goodwill
impairment
test
during
the
third
quarter
of
fiscal
2022.
We
determined
there
was
no
impairment
of
the
goodwill
of
the
impacted
reporting
units
as
their
related
fair
values
were
substantially
in our long-range plan
excess
of
the
carrying
values.
58
We did not
identify any indicators of impairment for this business declined. As a result of this triggering event, we performed an interim impairment assessment of theGreen Giant brand any goodwill or indefinite-lived
intangible assetassets as of May 31, 2015,29, 2022.
NOTE 7. LEASES
Our lease portfolio primarily
consists of operating lease
arrangements for certain
warehouse and determined that the fairdistribution space,
office space, retail
shops,
production
facilities,
rail
cars,
production
and
distribution
equipment,
automobiles,
and
office
equipment.
Our
lease
costs
associated with finance
leases and
sale-leaseback transactions
and our
lease income associated
with lessor and
sublease arrangements
are not material to our Consolidated Financial Statements.
Components of our lease cost are as follows:
Fiscal Year
In Millions
2022
2021
Operating lease cost
$
129.7
$
132.7
Variable
lease cost
8.5
21.8
Short-term lease cost
29.1
23.4
Rent expense under all operating leases from continuing operations was $
171.2
million in fiscal 2020.
Maturities of our operating and finance lease obligations by fiscal year are
as follows:
In Millions
Operating Leases
Finance Leases
Fiscal 2023
$
117.8
$
0.8
Fiscal 2024
93.6
0.4
Fiscal 2025
64.4
0
Fiscal 2026
45.2
0
Fiscal 2027
24.1
0
After fiscal 2027
40.7
0
Total noncancelable
future lease obligations
$
385.8
$
1.2
Less: Interest
(30.8)
0
Present value of lease obligations
$
355.0
$
1.2
The
lease
payments
presented
in
the brand asset no longer exceeded the carrying value
table
above
exclude
$
135.1
million
of
minimum
lease
payments
for
operating
leases
we
have
committed to but have not yet commenced as of the asset. Significant assumptions used in that assessment includedMay 29, 2022.
The weighted-average remaining lease term and weighted-average
discount rate for our updated long-rangeoperating leases are as follows:
May 29, 2022
May 30, 2021
Weighted-average
remaining lease term
4.5
years
4.5
years
Weighted-average
discount rate
3.8
%
3.7
%
Supplemental operating cash flow projectionsinformation and non-cash activity related
to our operating leases are as follows:
Fiscal Year
In Millions
2022
2021
Cash paid for amounts included in the Green Giant business, an updated royalty rate, a weighted-average costmeasurement of capital, and a tax rate. We recorded a $260.0 million impairment chargelease liabilities
$
128.7
$
132.0
Right of use assets obtained in restructuring, impairment, and other exit costs in fiscal 2015 related to this asset.

exchange for new lease liabilities

$
84.6
$
120.2
59
NOTE 7.8. FINANCIAL INSTRUMENTS, RISK MANAGEMENT ACTIVITIES,
AND FAIR VALUES

FINANCIAL INSTRUMENTS

The
carrying
values
of
cash
and
cash
equivalents,
receivables,
accounts
payable,
other
current
liabilities,
and
notes
payable
approximate fair
value. Marketable
securities are
carried at
fair value.
As of
May 29, 2016
2022, and
May 31, 2015,30,
2021, a
comparison of
cost
and market values of our marketable debt and equity securities is as follows:

   Cost   Fair Value   Gross
Gains		   Gross
Losses		 
   Fiscal Year   Fiscal Year   Fiscal Year   Fiscal Year 
In Millions  2016   2015   2016   2015   2016   2015   2016   2015 

Available for sale:

                

Debt securities

  $165.7    $2.6    $165.8    $2.6    $0.1    $—    $—    $—  

Equity securities

   1.8     1.8     8.4     8.3     6.6     6.5     —     —  

Total

  $167.5    $4.4    $174.2    $10.9    $6.7    $6.5    $—    $—  
                                         

Cost
Fair Value
Gross Unrealized Gains
Gross Unrealized Losses
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
In Millions
2022
2021
2022
2021
2022
2021
2022
2021
Available for
sale
debt securities
$
2.3
$
76.9
$
2.3
$
76.9
$
0
$
0
$
0
$
0
Equity securities
250.1
360.3
255.3
365.6
5.2
5.3
15.1
0
Total
$
252.4
$
437.2
$
257.6
$
442.5
$
5.2
$
5.3
$
15.1
$
0
As of May 29, 2022, the fair value and carrying value
of equity securities restricted for payment of active employee
health and welfare
benefits were $
249.8
million.
There were no realized gains or
losses from sales of available-for-sale marketable securities.
securities in fiscal 2022
and 2021. Gains and losses are
determined by
specific identification.
Classification
of
marketable
securities
as
current
or
noncurrent
is
dependent
upon
our
intended
holding
period and/or
and
the
security’s
maturity date. The
aggregate unrealized gains
and losses on available-for-saleavailable
for sale debt securities,
net of tax effects,
are classified in AOCI
within stockholders’ equity.

Scheduled maturities of our marketable securities are as follows:

   Available for Sale 
In Millions  Cost   

Fair

Value

 

Under 1 year (current)

  $165.7    $165.8  

Equity securities

   1.8     8.4  

Total

  $167.5    $174.2  
           

Marketable Securities
In Millions
Cost
Fair Value
Under 1 year (current)
$
2.3
$
2.3
Equity securities
250.1
255.3
Total
$
252.4
$
257.6
As of May 29, 2016, cash and cash equivalents totaling $7.5 2022, we had $
2.3
million wereof marketable debt securities pledged as collateral for derivative contracts. As of May 29, 2016, $9.1 million of certain accounts receivable were pledged as collateral against a foreign uncommitted line of credit.

The fair value and carrying amounts of long-term debt, including the current portion, were $8,629.0 million and $8,161.1 million, respectively, as of May 29, 2016. The fair value of long-term debt was estimated using market quotations and discounted cash flows based on our current incremental borrowing rates for similar types of instruments. Long-term debt is a Level 2 liability in the fair value hierarchy.

RISK MANAGEMENT ACTIVITIES

As a
part of
our ongoing
operations, we
are exposed
to market
risks such
as changes
in interest
and foreign
currency exchange
rates
and commodity and
equity prices. To
manage these risks, we
may enter into various
derivative transactions (e.g.,
futures, options, and
swaps) pursuant to our established policies.

COMMODITY PRICE RISK

Many commodities we
use in the
production and distribution
of our products
are exposed to
market price risks.
We
utilize derivatives
to manage price risk for our principal
ingredients and energy costs, including
grains (oats, wheat, and corn), oils (principally
(principally soybean),
dairy products, natural
gas, and diesel fuel.
Our primary objective
when entering into
these derivative contracts
is to achieve
certainty
with
regard
to
the
future
price
of
commodities
purchased
for
use
in
our
supply
chain.
We
manage
our
exposures
through
a
combination of purchase orders, long-term
contracts with suppliers, exchange-traded
futures and options, and over-the-counter
options
and swaps.
We
offset
our exposures
based on
current and
projected market
conditions and
generally seek
to acquire
the inputs
at as
close as possible to or below our planned cost as possible.

cost.

We
use derivatives
to manage
our exposure
to changes
in commodity
prices. We
do not
perform the
assessments required
to achieve
hedge
accounting
for
commodity
derivative
positions.
Accordingly,
the
changes
in
the
values
of
these
derivatives
are
recorded
currently in cost of sales in our Consolidated Statements of Earnings.

Although we do
not meet the
criteria for
cash flow hedge
accounting, we believe
that these instruments
are effective
in achieving our
objective of providing certainty
in the future price of commodities purchased
for use in our supply chain.
Accordingly, for
purposes of
measuring
segment
operating
performance
these
gains
and
losses
are
reported
in
unallocated
corporate
items
outside
of
segment
60
operating results
until such
time that
the exposure
we are
managing affects
earnings. At
that time
we reclassify
the gain
or loss
from
unallocated
corporate
items
to
segment
operating
profit,
allowing
our
operating
segments
to
realize
the
economic
effects
of
the
derivative without experiencing any resulting mark-to-market volatility,
which remains in unallocated corporate items.

Unallocated corporate items for fiscal 2016, 20152022, 2021, and 20142020 included:

   Fiscal Year 
In Millions  2016   2015   2014 

Net loss on mark-to-market valuation of commodity positions

  $(69.1)   $(163.7)   $(4.9) 

Net loss on commodity positions reclassified from unallocated corporate items to segment operating profit

   127.9     84.4     51.2  

Net mark-to-market revaluation of certain grain inventories

   4.0     (10.4)    2.2  

Net mark-to-market valuation of certain commodity positions recognized in unallocated corporate items

  $62.8    $(89.7)   $48.5  
                

As of May 29, 2016, the net notional value

Fiscal Year
In Millions
2022
2021
2020
Net gain (loss) on mark-to-market valuation of commodity derivatives was $295.4 million,positions
$
303.3
$
138.2
$
(63.0)
Net (gain) loss on commodity positions reclassified from unallocated corporate
items to segment operating profit
(188.0)
(8.8)
35.6
Net mark-to-market revaluation of certain grain inventories
17.8
9.4
2.7
Net mark-to-market valuation of certain commodity positions recognized
in
unallocated corporate items
$
133.1
$
138.8
$
(24.7)
As
of
May
29,
2022,
the
net
notional
value
of
commodity
derivatives
was
$
490.1
million,
of
which $189.1
$
355.4
million
related
to
agricultural inputs and $106.3 $
134.7
million related to energy inputs. These contracts relate to inputs
that generally will be utilized within the
next
12
months.

INTEREST RATE RISK

We
are
exposed
to
interest
rate
volatility
with
regard
to
future
issuances
of
fixed-rate
debt,
and
existing
and
future
issuances
of
floating-rate
debt. Primary
exposures include
U.S. Treasury
rates, LIBOR,
Euribor,
and commercial
paper rates
in the
United States
and Europe.
We
use interest rate
swaps, forward-starting
interest rate swaps,
and treasury
locks to hedge
our exposure
to interest rate
changes,
to
reduce
the
volatility
of
our
financing
costs,
and
to
achieve
a
desired
proportion
of
fixed-rate
versus
floating-rate
debt,
based
on
current
and
projected
market
conditions.
Generally
under
these
swaps,
we
agree
with regard
a
counterparty
to future issuances of fixed-rate debt, and existing and future issuances of floating-rate debt. Primary exposures include U.S. Treasury rates, LIBOR, Euribor, and commercial paper rates in
exchange
the United States and Europe. We use interest rate swaps, forward-starting interest rate swaps, and treasury locks to hedge our exposure to interest rate changes, to reduce the volatility of our financing costs, and to achieve a desired proportion of fixed rate versus floating-rate debt, based on current and projected market conditions. Generally under these swaps, we agree with a counterparty to exchange the
difference between fixed-rate and floating-rate
interest amounts based on an agreed upon notional principal amount.

Floating Interest
Rate Exposures
— Floating-to-fixed
interest rate
swaps are
accounted for
as cash
flow hedges,
as are
all hedges
of
forecasted
issuances
of
debt.
Effectiveness
is
assessed
based
on
either
the
perfectly
effective
hypothetical
derivative
method
or
changes in the
present value of
interest payments on
the underlying debt.
Effective gains
and losses deferred
to AOCI are
reclassified
into earnings over the life of the associated debt. Ineffective gains
Fixed
Interest
Rate
Exposures
—
Fixed-to-floating
interest
rate
swaps
are
accounted
for
as
fair
value
hedges
with
effectiveness
assessed
based
on
changes
in
the
fair
value
of
the
underlying
debt
and losses are recorded as net interest. The amount of hedge ineffectiveness was less than $1 million in each of fiscal 2016, 2015, and 2014.

Fixed Interest Rate Exposures — Fixed-to-floating interest rate swaps are accounted for as fair value hedges with effectiveness assessed based on changes in the fair value of the underlying debt and

derivatives,
using
incremental
borrowing
rates
currently
available on loans with similar terms and maturities. Ineffective gains and losses on these derivatives and the underlying hedged items are recorded as net interest. The amount of hedge ineffectiveness was less than $1 million in fiscal 2016, an $1.6 million gain in fiscal 2015, and less than $1 million in fiscal 2014.

In fiscal 2016, in advance of planned debt financing, we entered into $400.0 million of treasury locks with an average fixed rate of 2.1 percent due February 15, 2017.

In advance of planned debt financing, we entered into €600.0 million of forward starting swaps with an average fixed rate of 0.5 percent. All of these forward starting swaps were cash settled for $6.5 million in fiscal 2015, coincident with the issuance of our €500 million 8-year fixed-rate notes and €400 million 12-year fixed-rate notes.

In fiscal 2015, we entered into swaps to convert $500.0 million of 1.4 percent fixed-rate notes due October 20, 2017, and $500.0 million of 2.2 percent fixed-rate notes due October 21, 2019, to floating rates.

In advance of planned debt financing, we entered into $250.0 million of treasury locks with an average fixed rate of 1.99 percent. All of these treasury locks were cash settled for $17.9 million in fiscal 2014, coincident with the issuance of our $500.0 million 10-year fixed-rate notes.

As of May 29, 2016,
2022, the pre-tax
amount of cash-settled
interest rate hedge
gain or loss
remaining in AOCI,
which will be
reclassified
to earnings over the remaining term of the related underlying debt, follows:

In Millions  Gain/(Loss) 

5.7% notes due February 15, 2017

  $(1.6) 

5.65% notes due February 15, 2019

   1.4  

3.15% notes due December 15, 2021

   (54.9) 

1.0% notes due April 27, 2023

   (1.7) 

3.65% notes due February 15, 2024

   13.8  

1.5% notes due April 27, 2027

   (3.6) 

5.4% notes due June 15, 2040

   (13.4) 

4.15% notes due February 15, 2043

   10.5  

Net pre-tax hedge loss in AOCI

  $(49.5) 
      

In Millions
Gain/(Loss)
2.25
% notes due
October 14, 2031
$
(18.4)
2.6
% notes due
October 12, 2022
(0.3)
1.0
% notes due
April 27, 2023
0.2
3.65
% notes due
February 15, 2024
(3.0)
4.0
% notes due
April 17, 2025
1.7
3.2
% notes due
February 10, 2027
(8.0)
1.5
% notes due
April 27, 2027
1.6
4.2
% notes due
April 17, 2028
6.0
4.55
% notes due
April 17, 2038
8.7
5.4
% notes due
June 15, 2040
10.0
4.15
% notes due
February 15, 2043
(8.2)
4.7
% notes due
April 17, 2048
12.3
Net pre-tax hedge gain in AOCI
$
2.6
61
The
following
table
summarizes
the
notional
amounts
and
weighted-average
interest
rates
of
our
interest
rate
derivatives.
Average
floating rates are based on rates as of the end of the reporting period.

In Millions  May 29,
2016		  May 31,
2015		 

Pay-floating swaps—notional amount

  $1,000.0   $1,250.0  

Average receive rate

   1.8%   1.6% 

Average pay rate

   1.1%   0.7% 
          

In Millions
May 29, 2022
May 30, 2021
Pay-floating swaps - notional amount
$
644.1
$
731.5
Average receive
rate
0.4
%
0.4
%
Average pay rate
0.1
%
0.1
%
The floating-rate swap contracts outstanding as of May 29, 2022, mature
in fiscal
2026
.
FOREIGN EXCHANGE RISK
Foreign currency
fluctuations affect
our net
investments in
foreign subsidiaries
and foreign
currency cash
flows related
to third
party
purchases,
intercompany
loans, product
shipments, and
foreign-denominated
debt.
We
are also
exposed
to the
translation of
foreign
currency
earnings
to
the
U.S.
dollar.
Our
principal
exposures
are
to
the
Australian
dollar,
Brazilian
real,
British
pound
sterling,
Canadian
dollar,
Chinese renminbi,
euro, Japanese
yen, Mexican
peso, and
Swiss franc.
We
primarily
use foreign
currency forward
contracts to selectively hedge our
foreign currency cash flow exposures.
We also
generally swap our foreign-denominated
commercial
paper
borrowings
and
nonfunctional
currency
intercompany
loans
back
to U.S.
dollars
or
the
functional
currency
of the
entity
with
foreign exchange exposure.
The gains or losses
on these derivatives offset
the foreign currency
revaluation gains or losses
recorded in
earnings on the associated borrowings. We
generally do not hedge more than 18 months in advance.
As of May 29, 2022, the net notional value of foreign exchange derivatives
was $
1,973.9
million.
We
also have
net investments
in foreign
subsidiaries that
are denominated
in euros.
We
hedged a portion
of these net
investments by
issuing
euro-denominated
commercial
paper
and
foreign
exchange
forward
contracts.
As of
May
29,
2022,
we
hedged
a
portion
of
these net
investments
with €
2,223.5
million of
euro denominated
bonds.
As of
May 29,
2022,
we had
deferred
net foreign
currency
transaction gains of $
57.5
million in AOCI associated with net investment hedging activity.
During the fourth quarter of fiscal 2022, we hedged
€
750
million of euro denominated bonds with foreign exchange
forward contracts.
As of May 29, 2022, we had deferred net foreign currency transaction gains
of $
20.9
million in AOCI associated with these hedges.
EQUITY INSTRUMENTS
Equity
price
movements
affect
our
compensation
expense
as
certain
investments
made
by
our
employees
in
our
deferred
compensation plan
are revalued. We
use equity swaps
to manage this
risk. As of May
29, 2022, the
net notional amount
of our equity
swaps was $
204.7
million, which mature in
fiscal 2023
.
62
FAIR VALUE
MEASUREMENTS AND FINANCIAL STATEMENT
PRESENTATION
The
fair
values
of
our
assets,
liabilities,
and
derivative
positions
recorded
at
fair
value
and
their
respective
levels
in
the
fair
value
hierarchy as of May 29, 2022, and May 30, 2021, were as follows:

In Millions  Pay Floating 

2018

  $500.0  

2020

   500.0  

Total

  $1,000.0  
      

The following tables reconcile the net fair values

May 29, 2022
May 29, 2022
Fair Values
of Assets
Fair Values
of Liabilities
In Millions
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Derivatives designated as hedging instruments:
Interest rate contracts (a) (b)
$
0
$
0
$
0
$
0
$
0
$
(29.8)
$
0
$
(29.8)
Foreign exchange contracts (a) (c)
0
26.9
0
26.9
0
(4.7)
0
(4.7)
Total
0
26.9
0
26.9
0
(34.5)
0
(34.5)
Derivatives not designated as hedging
instruments:
Foreign exchange contracts (a) (c)
0
8.4
0
8.4
0
(15.1)
0
(15.1)
Commodity contracts (a) (d)
10.7
96.9
0
107.6
0
(0.2)
0
(0.2)
Grain contracts (a) (d)
0
28.7
0
28.7
0
(3.0)
0
(3.0)
Total
10.7
134.0
0
144.7
0
(18.3)
0
(18.3)
Other assets and liabilities subject to offsetting arrangements that reported at fair value:
Marketable investments (a) (e) (f)
255.3
2.3
67.2
324.8
0
0
0
0
Total
255.3
2.3
67.2
324.8
0
0
0
0
Total assets, liabilities, and
derivative positions
recorded at fair value
$
266.0
$
163.2
$
67.2
$
496.4
$
0
$
(52.8)
$
0
$
(52.8)
(a)
These contracts and investments
are recorded as prepaid
expenses and other current
assets, other assets, other
current liabilities or
other liabilities,
as appropriate,
based on
whether in
a gain
or loss
position. Certain
marketable investments
are recorded
as cash
and cash equivalents.
(b)
Based on EURIBOR and
swap rates. As
of May 29, 2022, the
carrying amount of hedged
debt designated as
the hedged item
in a
fair value
hedge was
$
615.7
million and
was classified
on the
Consolidated Balance
Sheet within
long-term debt.
As of
May 29,
2022, the cumulative amount of fair value hedging basis adjustments was $
28.4
million.
(c)
Based on observable market transactions of spot currency rates and forward
currency prices.
(d)
Based on prices of futures exchanges and recently reported transactions in
the marketplace.
(e)
Based on prices of common stock, mutual fund net asset values, and bond matrix
pricing.
(f)
The level 3
marketable investment represents
an equity security
without a readily
determinable fair value.
During fiscal 2022,
we
recorded
an impairment
charge
of $
34.0
million resulting
from the
determination of
fair value
utilizing
level 3
inputs including
revised projections of future operating results and observable transaction data
for similar instruments.
63
May 30, 2021
May 30, 2021
Fair Values
of Assets
Fair Values
of Liabilities
In Millions
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Derivatives designated as hedging instruments:
Interest rate contracts (a) (b)
$
0
$
28.8
$
0
$
28.8
$
0
$
0
$
0
$
0
Foreign exchange contracts (a) (c)
0
2.3
0
2.3
0
(36.3)
0
(36.3)
Total
0
31.1
0
31.1
0
(36.3)
0
(36.3)
Derivatives not designated as hedging
instruments:
Foreign exchange contracts (a) (c)
0
2.5
0
2.5
0
(1.6)
0
(1.6)
Commodity contracts (a) (d)
11.1
20.5
0
31.6
(0.8)
(0.5)
0
(1.3)
Grain contracts (a) (d)
0
12.0
0
12.0
0
(0.9)
0
(0.9)
Total
11.1
35.0
0
46.1
(0.8)
(3.0)
0
(3.8)
Other assets and liabilities reported at fair value:
Marketable investments (a) (e)
365.6
76.9
0
442.5
0
0
0
0
Total
365.6
76.9
0
442.5
0
0
0
0
Total assets, liabilities, and
derivative positions
recorded at fair value
$
376.7
$
143.0
$
0
$
519.7
$
(0.8)
$
(39.3)
$
0
$
(40.1)
(a)
These contracts and
investments are recorded
as prepaid expenses and
other current assets, other
assets, other current liabilities
or
other liabilities,
as appropriate,
based on
whether in
a gain
or loss
position. Certain
marketable investments
are recorded
as cash
and cash equivalents.
(b)
Based on LIBOR and swap
rates. As of May 30, 2021, the
carrying amount of hedged debt designated
as the hedged item in a
fair
value
hedge
was
$
736.9
million
and
was
classified
on
the
Consolidated
Balance
Sheet
within
long-term
debt.
As
of
May 30,
2021, the cumulative amount of fair value hedging basis adjustments was $
5.4
million.
(c)
Based on observable market transactions of spot currency rates and forward
currency prices.
(d)
Based on prices of futures exchanges and recently reported transactions in the
marketplace.
(e)
Based on prices of common stock and bond matrix pricing.
We did not
significantly change our valuation techniques from prior periods.
The
fair value
of our
long-term
debt
is estimated
using
Level 2
inputs based
on quoted
prices
for
those
instruments. Where
quoted
prices are not available, fair value is estimated
using discounted cash flows and market-based expectations
for interest rates, credit risk
and
the
contractual
terms
of
the
debt
instruments.
As
of
May
29,
2022,
the
carrying
amount
and
fair
value
of
our
long-term
debt,
including the
current portion,
were $
10,508.8
million and
$
10,809.0
million, respectively.
As of
May 30,
2021, the
carrying amount
and fair value of our long-term debt, including the current portion, were
$
12,250.7
million and $
13,194.4
million, respectively.
64
Information
related
to our
cash flow
hedges,
fair value
hedges, and
other
derivatives
not designated
as hedging
instruments for
the
fiscal years ended May 29, 2022, and May 30, 2021, follows:
Interest Rate
Contracts
Foreign
Exchange
Contracts
Equity
Contracts
Commodity
Contracts
Total
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
In Millions
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
Derivatives in Cash Flow Hedging
Relationships:
Amount of gain (loss) recognized in other
comprehensive income (OCI)
$
(5.4)
$
31.2
$
13.2
$
(58.7)
$
0
$
0
$
0
$
0
$
7.8
$
(27.5)
Amount of net loss reclassified from
AOCI into earnings (a)
(4.7)
(9.4)
(19.5)
(9.8)
0
0
0
0
(24.2)
(19.2)
Derivatives in Fair Value
Hedging
Relationships:
Amount of net loss recognized
in earnings (b)
(2.1)
(0.3)
0
0
0
0
0
0
(2.1)
(0.3)
Derivatives Not Designated as
Hedging Instruments:
Amount of net (loss) gain recognized
in earnings (c)
0
0
(32.8)
4.2
(8.0)
47.7
257.2
134.6
216.4
186.5
(a)
Loss
reclassified
from
AOCI
into
earnings
is
reported
in
interest,
net
for
interest
rate
swaps
and
in
cost
of
sales
and
SG&A
expenses for foreign
exchange contracts. For
the fiscal year ended
May 29, 2022, the
amount of loss
reclassified from AOCI
into
cost of
sales was
$
11.1
million and
the amount
of loss
reclassified from
AOCI into
SG&A was
$
8.4
million. For
the fiscal
year
ended
May 30,
2021,
the
amount
of
loss
reclassified
from
AOCI
into
cost
of
sales
was
$
9.3
million
and
the
amount
of
loss
reclassified from AOCI into SG&A was $
0.5
million.
(b)
Loss recognized
in earnings is
reported in
interest, net
for interest rate
contracts, in
cost of sales
for commodity
contracts, and
in
SG&A expenses for equity contracts and foreign exchange contracts.
(c)
(Loss) gain recognized in earnings
is related to the ineffective
portion of the hedging relationship, reported
in SG&A expenses for
foreign
exchange
contracts
and
interest,
net
for
interest rate
contracts.
No
amounts
were reported
as a
result
of being
excluded
from the assessment of hedge effectiveness.
The following
tables reconcile
the net
fair values
of assets
and
liabilities subject
to offsetting
arrangements
that are
recorded
in our
Consolidated Balance Sheets to the net fair values that could be reported
in our Consolidated Balance Sheets:

  May 29, 2016 
  Assets  Liabilities 
           Gross Amounts Not
Offset in the
Balance Sheet (e)		              Gross Amounts Not
Offset in the
Balance Sheet (e)		    
In Millions Gross
Amounts
of
Recognized
Assets		  Gross
Liabilities
Offset in
the
Balance
Sheet (a)		  Net
Amounts
of Assets
(b)		  Financial
Instruments		  Cash
Collateral
Received		  Net
Amount
(c)		  Gross
Amounts
of
Recognized
Liabilities		  Gross
Assets
Offset in
the Balance
Sheet (a)		  Net
Amounts of
Liabilities
(b)		  Financial
Instruments		  Cash
Collateral
Pledged		  Net
Amount
(d)		 

Commodity contracts

  $4.4    $  —    $  4.4    $  (3.9)   $  —    $  0.5    $(22.2)   $  —    $(22.2)   $  3.9    $7.5    $(10.8) 

Interest rate contracts

  8.5    —    8.5    —    —    8.5    (3.0)   —    (3.0)   —    —    (3.0) 

Foreign exchange contracts

  25.4    —    25.4    (8.7)   —    16.7    (13.7)   —    (13.7)   8.7    —    (5.0) 

Equity contracts

  2.4    —    2.4    —    —    2.4    —    —    —    —    —    —  

Total

  $40.7    $  —    $40.7    $(12.6)   $  —    $28.1    $(38.9)   $  —    $(38.9)   $12.6    $7.5    $(18.8) 
                                                 
(a)Includes related collateral offset in our Consolidated Balance Sheets.
(b)
May 29, 2022
Assets
Liabilities
Gross Amounts Not Offset
in the
Balance Sheet (e)
Gross Amounts Not Offset
in the
Balance Sheet (e)
In Millions
Gross
Amounts of
Recognized
Assets
Gross
Liabilities
Offset in the
Balance Sheet
(a)
Net Amounts
of Assets
(b)
Financial
Instruments
Cash
Collateral
Received
Net Amount
(c)
Gross
Amounts of
Recognized
Liabilities
Gross Assets
Offset in the
Balance Sheet
(a)
Net Amounts
of Liabilities
(b)
Financial
Instruments
Cash
Collateral
Pledged
Net Amount
(d)
Commodity contracts
$
107.5
$
0
$
107.5
$
(0.2)
$
(62.8)
$
44.5
$
(0.2)
$
0
$
(0.2)
$
0.2
$
0
$
0
Interest rate contracts
0
0
0
0
0
0
(30.7)
0
(30.7)
0
10.6
(20.1)
Foreign exchange contracts
35.3
0
35.3
(6.4)
0
28.9
(19.7)
0
(19.7)
6.4
0
(13.3)
Equity contracts
0.4
0
0.4
(0.3)
0
0.1
(4.0)
0
(4.0)
0.3
0
(3.7)
Total
$
143.2
$
0
$
143.2
$
(6.9)
$
(62.8)
$
73.5
$
(54.6)
$
0
$
(54.6)
$
6.9
$
10.6
$
(37.1)
(a)
Includes related collateral offset in our Consolidated Balance Sheets.
(b)
Net fair value as recorded in our Consolidated Balance Sheets.
(c)Fair value of assets that could be reported net in our Consolidated Balance Sheets.
(d)Fair value of liabilities that could be reported net in our Consolidated Balance Sheets.
(e)Fair value of assets and liabilities reported on a gross basis in our Consolidated Balance Sheets.

  May 31, 2015 
  Assets  Liabilities 
           Gross Amounts Not
Offset in the
Balance Sheet (e)		              Gross Amounts Not
Offset in the
Balance Sheet (e)		    
In Millions Gross
Amounts
of
Recognized
Assets		  Gross
Liabilities
Offset in
the
Balance
Sheet (a)		  Net
Amounts
of Assets
(b)		  Financial
Instruments		  Cash
Collateral
Received		  Net
Amount
(c)		  Gross
Amounts
of
Recognized
Liabilities		  Gross
Assets
Offset in
the
Balance
Sheet (a)		  Net
Amounts
of
Liabilities
(b)		  Financial
Instruments		  Cash
Collateral
Pledged		  Net
Amount
(d)		 

Commodity contracts

 $10.1   $—   $10.1   $(1.3)  $—   $8.8   $(59.4)  $—   $(59.4)  $1.3   $40.1   $(18.0) 

Interest rate contracts

  4.0    —    4.0    —    —    4.0    —    —    —    —    —    —  

Foreign exchange contracts

  25.9    —    25.9    (12.5)   —    13.4    (65.3)   —    (65.3)   12.5    —    (52.8) 

Total

 $40.0   $—   $40.0   $(13.8)  $—   $26.2   $(124.7)  $—   $(124.7)  $13.8   $40.1   $(70.8) 
                                                 
(a)Includes related collateral offset in our Consolidated Balance Sheets.
(b)Net fair value as recorded in our Consolidated Balance Sheets.
(c)Fair value of assets that could be reported net in our Consolidated Balance Sheets.
(d)Fair value of liabilities that could be reported net in our Consolidated Balance Sheets.
(e)Fair value of assets and liabilities reported on a gross basis in our Consolidated Balance Sheets.

FOREIGN EXCHANGE RISK

Foreign currency fluctuations affect our net investments in foreign subsidiaries and foreign currency cash flows related to third party purchases, intercompany loans, product shipments, and foreign-denominated debt. We are also exposed to the translation of foreign currency earnings to the U.S. dollar. Our principal exposures are to the Australian dollar, Brazilian real, British pound sterling, Canadian dollar, Chinese renminbi, euro, Japanese yen, Mexican peso, and Swiss franc. We primarily use foreign currency forward contracts to selectively hedge our foreign currency cash flow exposures. We also generally swap our foreign-denominated commercial paper borrowings and nonfunctional currency intercompany loans back to U.S. dollars or the functional currency of the entity with foreign exchange exposure. The gains or losses on these derivatives offset the foreign currency revaluation gains or losses recorded in earningsour Consolidated Balance Sheets.

(c)
Fair value of assets that could be reported net in our Consolidated Balance Sheets.
(d)
Fair value of liabilities that could be reported net in our Consolidated Balance Sheets.
(e)
Fair value of assets and liabilities reported on a gross basis in our Consolidated Balance Sheets.
65
May 30, 2021
Assets
Liabilities
Gross Amounts Not Offset
in the associated borrowings. We generally do not hedge more than 18 months Balance Sheet (e)
Gross Amounts Not Offset
in advance.

the Balance Sheet (e)

In Millions
Gross
Amounts of
Recognized
Assets
Gross
Liabilities
Offset in the
Balance
Sheet (a)
Net
Amounts of
Assets
(b)
Financial
Instruments
Cash
Collateral
Received
Net Amount
(c)
Gross
Amounts of
Recognized
Liabilities
Gross
Assets
Offset in the
Balance
Sheet (a)
Net
Amounts of
Liabilities
(b)
Financial
Instruments
Cash
Collateral
Pledged
Net Amount
(d)
Commodity contracts
$
31.6
$
0
$
31.6
$
(1.3)
$
(9.1)
$
21.2
$
(1.3)
$
0
$
(1.3)
$
1.3
$
0
$
0
Interest rate contracts
29.8
0
29.8
0
0
29.8
0
0
0
0
0
0
Foreign exchange contracts
4.8
0
4.8
(4.1)
0
0.7
(37.9)
0
(37.9)
4.1
0
(33.8)
Equity contracts
2.2
0
2.2
0
0
2.2
0
0
0
0
0
0
Total
$
68.4
$
0
$
68.4
$
(5.4)
$
(9.1)
$
53.9
$
(39.2)
$
0
$
(39.2)
$
5.4
$
0
$
(33.8)
(a)
Includes related collateral offset in our Consolidated Balance Sheets.
(b)
Net fair value as recorded in our Consolidated Balance Sheets.
(c)
Fair value of assets that could be reported net in our Consolidated Balance Sheets.
(d)
Fair value of liabilities that could be reported net in our Consolidated Balance Sheets.
(e)
Fair value of assets and liabilities reported on a gross basis in our Consolidated Balance Sheets.
AMOUNTS RECORDED IN ACCUMULATED
OTHER COMPREHENSIVE LOSS
As of May 29, 2016, the net notional value of foreign exchange derivatives was $997.7 million. The amount of hedge ineffectiveness was less than $1 million in each of fiscal 2016, 2015, and 2014.

We also have many net investments in foreign subsidiaries that are denominated in euros. We previously hedged a portion of these net investments by issuing euro-denominated commercial paper and foreign exchange forward contracts. In fiscal 2016, we entered into a net investment hedge for a portion of our net investment in foreign operations denominated in euros by issuing €500.0 million of euro-denominated bonds. In fiscal 2015, we entered into a net investment hedge for a portion of our net investment in foreign operations denominated in euros by issuing €900.0 million of euro-denominated bonds. In fiscal 2014, we entered into a net investment hedge for a portion of our net investment in foreign operations denominated in euros by issuing €500.0 million of euro-denominated bonds. As of May 29, 2016, we had deferred net foreign currency transaction losses of $20.1 million in AOCI associated with hedging activity.

Venezuela is a highly inflationary economy and as such, we remeasured the value of the assets and liabilities of our former Venezuelan subsidiary based on the exchange rate at which we expected to remit dividends in U.S. dollars

from the SIMADI market. In fiscal 2015, we recorded an $8 million foreign exchange loss. In the fourth quarter of fiscal 2016, we sold our General Mills de Venezuela CA subsidiary to a third party and exited our business in Venezuela.

EQUITY INSTRUMENTS

Equity price movements affect our compensation expense as certain investments made by our employees in our deferred compensation plan are revalued. We use equity swaps to manage this risk. As of May 29, 2016, the net notional amount of our equity swaps was $113.5 million. These swap contracts mature in fiscal 2017.

FAIR VALUE MEASUREMENTS AND FINANCIAL STATEMENT PRESENTATION

The fair values of our assets, liabilities, and derivative positions recorded at fair value and their respective levels in the fair value hierarchy as of May 29, 2016 and May 31, 2015, were as follows:

   May 29, 2016   May 29, 2016 
   Fair Values of Assets   Fair Values of Liabilities 
In Millions  Level 1   Level 2   Level 3   Total   Level 1  Level 2  Level 3   Total 

Derivatives designated as hedging instruments:

              

Interest rate contracts (a) (b)

  $—    $7.7    $—    $7.7    $—   $(3.0)  $—    $(3.0) 

Foreign exchange contracts (c) (d)

   —     12.2     —     12.2     —    (12.2)   —     (12.2) 

Total

   —     19.9     —     19.9     —    (15.2)   —     (15.2) 

Derivatives not designated as hedging instruments:

              

Foreign exchange contracts (c) (d)

   —     13.2     —     13.2     —    (1.5)   —     (1.5) 

Commodity contracts (c) (e)

   2.6     1.7     —     4.3     (0.6)   (21.6)   —     (22.2) 

Grain contracts (c) (e)

   —     1.8     —     1.8     —    (5.5)   —     (5.5) 

Total

   2.6     16.7     —     19.3     (0.6)   (28.6)   —     (29.2) 

Other assets and liabilities reported at fair value:

              

Marketable investments (a) (f)

   8.4     165.8     —     174.2     —    —    —     —  

Long-lived assets (g)

   —     26.0     —     26.0     —    —    —     —  

Total

   8.4     191.8     —     200.2     —    —    —     —  

Total assets, liabilities, and derivative positions recorded at fair value

  $11.0    $228.4    $—    $239.4    $(0.6)  $(43.8)  $—    $(44.4) 
                                       
(a)These contracts and investments are recorded as prepaid expenses and other current assets, other assets, other current liabilities or other liabilities, as appropriate, based on whether in a gain or loss position. Certain marketable investments are recorded as cash and cash equivalents.
(b)Based on LIBOR and swap rates.
(c)These contracts are recorded as prepaid expenses and other current assets or as other current liabilities, as appropriate, based on whether in a gain or loss position.
(d)Based on observable market transactions of spot currency rates and forward currency prices.
(e)Based on prices of futures exchanges and recently reported transactions in the marketplace.
(f)Based on prices of common stock and bond matrix pricing.
(g)We recorded $11.4 million in non-cash impairment charges in fiscal 2016 to write down certain long-lived assets to their fair value. Fair value was based on recently reported transactions for similar assets in the marketplace. These assets had a carrying value of $28.2 million and were associated with the restructuring actions described in Note 4.

   May 31, 2015   May 31, 2015 
   Fair Values of Assets   Fair Values of Liabilities 
In Millions  Level 1   Level 2   Level 3   Total   Level 1   Level 2  Level 3   Total 

Derivatives designated as hedging instruments:

               

Interest rate contracts (a) (b)

  $—    $4.0    $—    $4.0    $—    $—   $—    $—  

Foreign exchange contracts (c) (d)

   —     25.5     —     25.5     —     (23.3)   —     (23.3) 

Total

   —     29.5     —     29.5     —     (23.3)   —     (23.3) 

Derivatives not designated as hedging instruments:

               

Foreign exchange contracts (c) (d)

   —     0.4     —     0.4     —     (42.0)   —     (42.0) 

Commodity contracts (c) (e)

   7.2     2.9     —     10.1     —     (59.4)   —     (59.4) 

Grain contracts (c) (e)

   —     3.3     —     3.3     —     (7.8)   —     (7.8) 

Total

   7.2     6.6     —     13.8     —     (109.2)   —     (109.2) 

Other assets and liabilities reported at fair value:

               

Marketable investments (a) (f)

   8.3     2.6     —     10.9     —     —    —     —  

Long-lived assets (g)

   —     37.8     —     37.8     —     —    —     —  

Indefinite-lived intangible assets (h)

   —     —     154.3     154.3     —     —    —     —  

Total

   8.3     40.4     154.3     203.0     —     —    —     —  

Total assets, liabilities, and derivative positions recorded at fair value

  $15.5    $76.5    $154.3    $246.3    $—    $(132.5)  $—    $(132.5) 
                                        
(a)These contracts and investments are recorded as prepaid expenses and other current assets, other assets, other current liabilities or other liabilities, as appropriate, based on whether in a gain or loss position. Certain marketable investments are recorded as cash and cash equivalents.
(b)Based on LIBOR and swap rates.
(c)These contracts are recorded as prepaid expenses and other current assets or as other current liabilities, as appropriate, based on whether in a gain or loss position.
(d)Based on observable market transactions of spot currency rates and forward currency prices.
(e)Based on prices of futures exchanges and recently reported transactions in the marketplace.
(f)Based on prices of common stock and bond matrix pricing.
(g)We recorded $30.3 million in non-cash impairment charges in fiscal 2015 to write down certain long-lived assets to their fair value. Fair value was based on recently reported transactions for similar assets in the marketplace. These assets had a carrying value of $68.1 million and were associated with the restructuring actions described in Note 4.
(h)We recorded a $260.0 million non-cash impairment charge in fiscal 2015 to write down ourGreen Giant brand asset to its fair value of $154.3 million. This asset had a carrying value of $414.3 million. See Note 6 for additional information.

We did not significantly change our valuation techniques from prior periods.

Information related to our cash flow hedges, fair value hedges, and other derivatives not designated as hedging instruments for the fiscal years ended May 29, 2016 and May 31, 2015, follows:

   Interest Rate
Contracts		  Foreign Exchange
Contracts		  Equity
Contracts		   Commodity
Contracts		  Total 
   Fiscal Year  Fiscal Year  Fiscal Year   Fiscal Year  Fiscal Year 
In Millions  2016  2015  2016  2015  2016  2015   2016  2015  2016  2015 

Derivatives in Cash Flow Hedging Relationships:

            

Amount of gain (loss) recognized in other comprehensive income (OCI) (a)

  $(2.6)  $(5.9)  $21.2   $13.3   $—   $—    $—   $—   $18.6   $7.4  

Amount of net gain (loss) reclassified from AOCI into earnings (a) (b)

   (10.6)   (10.6)   22.1    5.0    —    —     —    —    11.5    (5.6) 

Amount of net gain (loss) recognized in earnings (c)

   (0.1)   (0.6)   (0.7)   0.1    —    —     —    —    (0.8)   (0.5) 

Derivatives in Fair Value Hedging Relationships: Amount of net gain recognized in earnings (d)

   0.1    1.6     —    —    —     —    —    0.1    1.6  

Derivatives in Net Investment Hedging Relationships: Amount of loss recognized in OCI (a)

   —    —    (0.2)   (6.9)   —    —     —    —    (0.2)   (6.9) 

Derivatives Not Designated as Hedging Instruments: Amount of net gain (loss) recognized in earnings (d)

   —    —    1.1    (54.3)   (4.5)   9.6     (56.1)   (163.7)   (59.5)   (208.4) 
                                           
(a)Effective portion.
(b)Gain (loss) reclassified from AOCI into earnings is reported in interest, net for interest rate swaps and in cost of sales and SG&A expenses for foreign exchange contracts.
(c)Gain (loss) recognized in earnings is related to the ineffective portion of the hedging relationship, including SG&A expenses for foreign exchange contracts and interest, net for interest rate contracts. No amounts were reported as a result of being excluded from the assessment of hedge effectiveness.
(d)Gain (loss) recognized in earnings is reported in interest, net for interest rate contracts, in cost of sales for commodity contracts, and in SG&A expenses for equity contracts and foreign exchange contracts.

AMOUNTS RECORDED IN ACCUMULATED OTHER COMPREHENSIVE LOSS

As of May 29, 2016,2022, the after-tax amounts of unrealized gains and lossesin

AOCI related to hedge derivatives follows:
In Millions
After-Tax
Gain
Unrealized gains from foreign currency cash flow hedges
23.3
After-tax gains in AOCI related to hedge derivatives follows:

In MillionsAfter-Tax Gain/(Loss)

Unrealized losses from interest rate cash flow hedges

$(31.3)

Unrealized gains from foreign currency cash flow hedges

5.8

After-tax loss in AOCI related to hedge derivatives

$(25.5)

$
23.3
The net amount
of pre-tax gains and
losses in AOCI as
of May 29, 2016,
2022, that we expect
to be reclassified
into net earnings
within the
next 12 months is $1.2 a $
33.4
million of loss.

net gain.

CREDIT-RISK-RELATED
CONTINGENT FEATURES

Certain of our
derivative instruments contain
provisions that require
us to maintain an
investment grade credit rating
on our debt
from
each
of
the
major
credit
rating
agencies.
If
our
debt
were
to
fall
below
investment
grade,
the
counterparties
to
the
derivative
instruments
could
request
full
collateralization
on
derivative
instruments
in
net
liability
positions.
The
aggregate
fair
value
of
all
derivative instruments with credit-risk-related
contingent features

that were in

a liability position on
May 29, 2016,2022, was $21.9 $
35.0
million.
We have posted $7.5
$
10.6
million of collateral under these contracts. If the credit-risk-related contingent features underlying these agreements had been triggered on May 29, 2016, we would have been required to post $14.4 million of collateral to counterparties.

CONCENTRATIONS OF
CREDIT AND COUNTERPARTY
CREDIT RISK

During fiscal 2016,2022, customer concentration was as follows:

Percent of total  Consolidated  U.S. Retail  International  Convenience Stores
and Foodservice		 

Wal-Mart (a):

     

Net sales

   20%   30%   5%   8% 

Accounts receivable

    26%   4%   8% 

Five largest customers:

     

Net sales

    53%   22%   45% 
                  
(a)Includes Wal-Mart Stores, Inc. and its affiliates.

Percent of total
Consolidated
North America
Retail
North America
Foodservice
International
Pet
Walmart (a):
Net sales
20
%
28
%
8
%
2
%
16
%
Accounts receivable
23
%
6
%
3
%
23
%
Five largest customers:
Net sales
50
%
49
%
12
%
64
%
(a)
Includes Walmart Inc.
and its affiliates.
No customer other than Wal-Mart Walmart
accounted for
10
percent or more of our consolidated net sales.

We
enter
into
interest
rate,
foreign
exchange,
and
certain
commodity
and
equity
derivatives,
primarily
with
a
diversified
group
of
highly rated
counterparties. We
continually monitor
our positions and
the credit ratings
of the counterparties
involved and,
by policy,
limit
the
amount
of
credit
exposure
to
any
one
party.
These
transactions
may
expose
us
to
potential
losses
due
to
the
risk
of
nonperformance
by
these
counterparties;
however,
we
have
not
incurred
a
material
loss.
We
also
enter
into
commodity
futures
transactions through various regulated exchanges.

66
The amount
of loss due
to the credit
risk of the
counterparties, should
the counterparties
fail to
perform according
to the terms
of the
contracts, is $14.8
$
103.2
million, against
which we do not
hold $
62.8
million of
collateral. Under
the terms
of our
swap agreements,
some of
our
transactions
require
collateral
or
other
security
to
support
financial
instruments
subject
to
threshold
levels
of
exposure
and
counterparty
credit
risk.
Collateral
assets
are
either
cash
or
U.S.
Treasury
instruments
and
are
held
in
a
trust
account
that
we
may
access if the counterparty defaults.

We
offer
certain
suppliers
access
to
third-party
services
that
allow
them
to
view
our
scheduled
payments
online.
The
third-party
services also
allow suppliers
to a third party service that allows them to view finance
advances on
our scheduled payments online. The third party service also allows suppliers to finance advances on our scheduled
payments at
the sole
discretion of
the supplier
and the third
party.
We
have no
economic interest
in these
financing arrangements
and no
direct relationship
with the
suppliers, the
third party, parties,
or any
financial
institutions
concerning
this
service.
All
of
our
accounts
payable
remain
as
obligations
to
our
suppliers
as
stated
in
our
supplier agreements.
As of
May 29,
2022, $
1,429.6
million of
our accounts
payable remain as obligationswas
payable to our
suppliers as stated in our supplier agreements. who
utilize these
third-
party services.
As of
May 29, 2016, $537.0 30,
2021, $
1,411.3
million of
our total accounts
payable is was
payable to
suppliers who
utilize this third party service.

these

third-party
services.
NOTE 8.9. DEBT

Notes Payable

NOTES PAYABLE
The components of notes payable and their respective weighted-average
interest rates at the end of the periods were as follows:

   May 29, 2016  May 31, 2015 
In Millions  

Notes

Payable

   

Weighted-

Average

Interest Rate

  

Notes

Payable

   

Weighted-

Average

Interest Rate

 

U.S. commercial paper

  $—       —  %  $432.0     0.3% 

Financial institutions

   269.8     8.6    183.8     9.5  

Total

  $269.8     8.6%  $615.8     3.0% 
                    

May 29, 2022
May 30, 2021
In Millions
Notes Payable
Weighted-
Average
Interest Rate
Notes Payable
Weighted-
Average
Interest Rate
U.S. commercial paper
$
694.8
1.1
%
$
0
0
%
Financial institutions
116.6
4.4
%
361.3
3.4
%
Total
$
811.4
5.5
%
$
361.3
3.4
%
To ensure availability
of funds, we maintain bank credit lines sufficient to cover our outstanding notes payable. Commercial paper is a continuing source of short-term financing. Weand have commercial paper programs
available to us in the United States
and Europe. We also
have uncommitted and asset-backed credit lines that support our
foreign operations.

The following table details the fee-paid committed and uncommitted credit
lines we had available as of May 29, 2016:

In Billions  Facility
Amount		   Borrowed
Amount		 

Credit facility expiring:

    

May 2021

   $2.7     $ —  

June 2019

   0.2     0.1  

Total committed credit facilities

   2.9     0.1  

Uncommitted credit facilities

   0.4     0.1  

Total committed and uncommitted credit facilities

   $3.3     $0.2  
           

2022:

In fiscal 2016, we entered into a $2.7 billion fee-paidBillions
Facility
Amount
Borrowed
Amount
Credit facility expiring:
April 2026
$
2.7
$
0
Total committed credit facility that is scheduled to expire in May 2021. Concurrent with the execution of this credit facility, we terminated our $1.7 billion and $1.0 billion credit facilities.

In fiscal 2015, our subsidiary, Yoplait S.A.S., entered into a €200.0 million fee-paid committed credit facility that is scheduled to expire in June 2019.

The

credit facilities
2.7
0
Uncommitted credit facilities
0.6
0.1
Total committed
and uncommitted credit facilities
$
3.3
$
0.1
The
credit
facilities
contain
covenants,
including
a
requirement
to
maintain
a
fixed
charge
coverage
ratio
of
at
least
2.5
times.
We
were in compliance with all credit facility covenants as of May 29, 2016.

Long-Term Debt

2022.

67
LONG-TERM DEBT
In January 2016,the fourth quarter of fiscal 2022, we repaid $
850.0
million of
3.7
percent fixed-rate notes due
October 17, 2023
using proceeds from
the issuance of commercial paper.
In the
fourth quarter
of fiscal
2022, we
issued €
250.0
million
0.0
percent fixed-rate
notes due
November 11, 2022
. We
used the
net
proceeds for general corporate purposes.
In the second
quarter of fiscal
2022, we issued €500.0 
€
500.0
million principal amount of floating-rate
0.125
percent fixed-rate notes
due January
November 15, 2020. Interest on2025
. We
used the notes are payable quarterly in arrears. The notes are not generally redeemable prior to maturity. These notes are senior unsecured obligations that include a change of control repurchase provision. The
net proceeds were used to repay a portion of our maturing long-term debt.

In January 2016, we repaid $250 €

500.0
million of 0.875 percent fixed-rate notes and $750 million of floating-rate notes.

In April 2015, we issued €500.0 million principal amount of 1.0

0.0
percent fixed-rate notes due April
November 16, 2021
.
In the second quarter of fiscal 2022, we issued €
250.0
million of floating-rate notes due
May 16, 2023
. We used the net proceeds
to
repay a portion of our outstanding commercial paper and for general
corporate purposes.
In the second
quarter of fiscal
2022, we
issued $
500.0
million of
2.25
percent notes due
October 14, 2031
. We
used the net
proceeds,
together
with
proceeds
from
the
issuance
of
commercial
paper,
to
repay
$
1,000.0
million
of
3.15
percent
fixed-rate
notes
due
December 15, 2021
.
In the first quarter of fiscal 2022, we issued €
500.0
million of floating-rate notes due
July 27, 2023 and €400.0 
. We used the net proceeds to
repay
€
500.0
million principal amount of 1.5
0.0
percent fixed-rate notes due April 27, 2027. Interest
August 21, 2021
.
In the
first quarter
of fiscal
2022, we
issued €
500.0
million of
2.2
percent fixed-rate
notes due
November 29, 2021
. We
used the
net
proceeds, together with
borrowings under a
committed credit facility,
to repay €
200.0
million of
2.2
percent fixed-rate notes
due
June
24, 2021
.
In the fourth
quarter of
fiscal 2021,
we repaid
$
600.0
million of
3.2
percent fixed-rate
notes and $
850.0
million of floating-rate
notes
with cash on hand.
In the
third quarter
of fiscal
2021, we
completed an
offer to
exchange certain
series of
outstanding notes
for a
combination of
newly
issued notes
and cash.
Holders exchanged
$
603.9
million of
notes is payable annually in arrears. The previously
issued with
rates between
4.15
percent and
5.4
percent
for
$
605.2
million
of
newly
issued
3.0
percent
fixed-rate
notes may be redeemed in whole, or in part, at our option at any time at
due
February 1, 2051
and
$
201.4
million
of
cash,
representing
a
participation incentive.
In
the applicable redemption price. These
second
quarter
of
fiscal
2021,
we
issued
€
500.0
million
principal
amount
of
0.0
percent
fixed-rate
notes are senior unsecured obligations that include a change of control repurchase provision. The
due
November 16,
2021
. We used the net proceeds were used for general corporate purposes and to reduce our commercial paper borrowings.

In March 2015, we repaid $750.0

repay €
200.0
million of 5.2 percent notes.

In October 2014, we issued $500.0 million aggregate principal amount of 1.4

0.0
percent fixed-rate notes due October 20, 2017 and $500.0 million aggregate principal amount of 2.2 percent fixed-rate notes due October 21, 2019. Interest on the notes is payable semi-annually in arrears. The notes may be redeemed in whole, or in part, at our option at any time at the applicable redemption price. The notes are senior unsecured obligations that include a change of control repurchase provision. The net proceeds were used to fund our acquisition of Annie’s and for general corporate purposes.

In June 2014, our subsidiary, Yoplait S.A.S.,the first
quarter of fiscal
2021, we issued €200.0 
€
500.0
million principal amount
of 2.2
0.0
percent fixed-rate senior notes
due June 24,
August 21, 2021 in a private placement offering. Interest on
. We
used the notes is payable semi-annually in arrears. The notes may be redeemed in whole, or in part, at our subsidiary’s option at any time at the applicable redemption price. The notes are senior unsecured obligations that include a change of control repurchase provision. The net proceeds, were usedtogether with cash on hand, to refinance existing debt.

In June 2014, we repaid €290.0 repay €

500.0
million of floating-rate
2.1
percent fixed-rate notes.

68
A summary of our long-term debt is as follows:

In Millions  May 29,
2016		  May 31,
2015		 

5.65% notes due February 15, 2019

  $1,150.0   $1,150.0  

5.7% notes due February 15, 2017

   1,000.0    1,000.0  

3.15% notes due December 15, 2021

   1,000.0    1,000.0  

Euro-denominated 2.1% notes due November 16, 2020

   555.8    549.4  

Euro-denominated 1.0% notes due April 27, 2023

   555.8    549.4  

Floating-rate euro-denominated notes due January 15, 2020

   555.8    —  

1.4% notes due October 20, 2017

   500.0    500.0  

5.4% notes due June 15, 2040

   500.0    500.0  

4.15% notes due February 15, 2043

   500.0    500.0  

3.65% notes due February 15, 2024

   500.0    500.0  

2.2% notes due October 21, 2019

   500.0    500.0  

Floating-rate notes due January 29, 2016

   —    500.0  

Euro-denominated 1.5% notes due April 27, 2027

   444.6    439.5  

0.875% notes due January 29, 2016

   —    250.0  

Floating-rate notes due January 28, 2016

   —    250.0  

Euro-denominated 2.2% notes due June 24, 2021

   221.0    219.7  

Medium-term notes, 0.02% to 6.44%, due fiscal 2017 or later

   204.2    204.2  

Other, including debt issuance costs and capital leases

   (26.1)   (36.5) 
   8,161.1    8,575.7  

Less amount due within one year

   (1,103.4)   (1,000.4) 

Total long-term debt

  $7,057.7   $7,575.3  
          

In Millions
May 29, 2022
May 30, 2021
4.2
% notes due
April 17, 2028
$
1,400.0
$
1,400.0
3.15
% notes due
December 15, 2021
0
1,000.0
3.7
% notes due
October 17, 2023
0
850.0
4.0
% notes due
April 17, 2025
800.0
800.0
3.2
% notes due
February 10, 2027
750.0
750.0
2.875
% notes due
April 15, 2030
750.0
750.0
Euro-denominated
0.45
% notes due
January 15, 2026
644.1
731.5
Euro-denominated
1.0
% notes due
April 27, 2023
536.8
609.6
Euro-denominated
0.0
% notes due
August 21, 2021
0
609.6
Euro-denominated
0.0
% notes due
November 16, 2021
0
609.6
3.0
% notes due
February 1, 2051
605.2
605.2
2.6
% notes due
October 12, 2022
500.0
500.0
3.65
% notes due
February 15, 2024
500.0
500.0
Euro-denominated
1.5
% notes due
April 27, 2027
429.4
487.7
4.7
% notes due
April 17, 2048
446.2
446.2
4.15
% notes due
February 15, 2043
434.9
434.9
Floating-rate notes due
October 17, 2023
400.0
400.0
5.4
% notes due
June 15, 2040
382.5
382.5
4.55
% notes due
April 17, 2038
282.4
282.4
Euro-denominated
2.2
% notes due
June 24, 2021
0
243.9
Medium-term notes,
0.56
% to
6.41
%, due fiscal
2023
or later
103.9
104.0
2.25
% notes due
October 14, 2031
500.0
0
Euro-denominated
0.1
25% notes due
November 15, 2025
536.7
0
Euro-denominated
0.0
% notes due
November 11, 2022
268.3
0
Euro-denominated floating rate notes due
May 16, 2023
268.3
-
Euro-denominated floating rate notes due
July 27, 2023
537.9
0
Other, including debt issuance costs, debt
exchange participation premium, and finance leases
(267.6)
(246.4)
10,809.0
12,250.7
Less amount due within one year
(1,674.2)
(2,463.8)
Total long-term debt
$
9,134.8
$
9,786.9
Principal payments
due on
long-term debt
and finance
leases in
the next
five fiscal
years based
on stated
contractual maturities,
our
intent to redeem, or put rights of certain note holders are $1,103.4 million in fiscal 2017, $604.7 million in fiscal 2018, $1,150.4 million in fiscal 2019, $1,056.0 million in fiscal 2020, and $555.9 million in fiscal 2021.

as follows:

In Millions
Fiscal 2023
$
1,674.2
Fiscal 2024
1,442.3
Fiscal 2025
800.0
Fiscal 2026
1,180.9
Fiscal 2027
1,179.4
Certain of our
long-term debt agreements
contain restrictive
covenants.
As of May 29, 2016,2022, we were in compliance with all of these
covenants.

As of May 29, 2016, 2022,
the $49.5 $
2.6
million pre-tax loss recorded
in AOCI associated with our
previously designated interest
rate swaps will
be reclassified
to net
interest over
the remaining
lives of
the hedged
transactions. The
amount expected
to be reclassified
from AOCI
to net interest in fiscal 20172023 is a $10.0 $
2.5
million pre-tax loss.

69
NOTE 9.10. REDEEMABLE AND NONCONTROLLING INTERESTS

Our principal redeemable and noncontrolling interests relateinterest relates to our Yoplait SAS, Yoplait Marques SNC, Liberté Marques Sàrl, and General Mills Cereals, LLC (GMC) subsidiaries. In addition, we have six foreign subsidiaries that have noncontrolling interests totaling $7.0 million as of May 29, 2016.

We have a 51 percent controlling interest in Yoplait SAS and a 50 percent interest in Yoplait Marques SNC and Liberté Marques Sàrl. Sodiaal holds the remaining interests in each of the entities. On the acquisition date, we

recorded the $904.4 million fair value of Sodiaal’s 49 percent euro-denominated interest in Yoplait SAS as a redeemable interest on our Consolidated Balance Sheets. Sodiaal has the ability to put all or a portion of its redeemable interest to us at fair value once per year, up to three times before December 2024. We adjust the value of the redeemable interest through additional paid-in capital on our Consolidated Balance Sheets quarterly to the redeemable interest’s redemption value, which approximates its fair value. Yoplait SAS pays dividends annually if it meets certain financial metrics set forth in its shareholders agreement. As of May 29, 2016, the redemption value of the euro-denominated redeemable interest was $845.6 million.

On the acquisition dates, we recorded the $281.4 million fair value of Sodiaal’s 50 percent euro-denominated interest in Yoplait Marques SNC and 50 percent Canadian dollar-denominated interest in Liberté Marques Sàrl as noncontrolling interests on our Consolidated Balance Sheets. Yoplait Marques SNC earns a royalty stream through a licensing agreement with Yoplait SAS for the rights to Yoplait and related trademarks. Liberté Marques Sàrl earns a royalty stream through licensing agreements with certain Yoplait group companies for the rights to Liberté and related trademarks. These entities pay dividends annually based on their available cash as of their fiscal year end.

During fiscal 2016, we paid $74.5 million of dividends to Sodiaal under the terms of the Yoplait SAS and Yoplait Marques SNC shareholder agreements.

A subsidiary of Yoplait SAS has entered into an exclusive milk supply agreement for its European operations with Sodiaal at market-determined prices through July 1, 2021. Net purchases totaled $321.0 million for fiscal 2016 and $271.3 million for fiscal 2015.

subsidiar

y.
The holder of the
GMC Class A Interests receives
quarterly preferred distributions
from available net income
based on the application
of
a
floating
preferred
return
rate
to
the
holder’s
capital
account
balance
established
in
the
most
recent
mark-to-market
valuation (currently $251.5
(currently
$
251.5
million). On
June 1, 2015,
2021,
the
floating
preferred
return
rate
on
GMC’s
Class
A
interests
was
reset
to
the
sum
of
three-month LIBOR
plus 125
160
basis points. The preferred
return rate is adjusted
every
three years
through a negotiated agreement
with
the Class A Interest holder or through a remarketing auction.

For financial reporting purposes,

During
the
third
quarter
of
fiscal
2022,
we
completed
the
sale
of
our
interests
in
Yoplait
SAS,
Yoplait
Marques
SNC
and
Liberté
Marques
Sàrl
to
Sodiaal
in
exchange
for
Sodiaal’s
interest
in
our
Canadian
yogurt
business,
a
modified
agreement
for
the
use
of
Yoplait
and
Liberté
brands in the assets, liabilities, results of operations,United States and cash flows of our non-wholly owned subsidiaries are included in ourCanada, and cash. Please see Note 3 to the Consolidated
Financial Statements. The third-party investor’s share
Up to
the date
of the
divestiture, Sodiaal
held the
remaining interests
in each
of the
entities. On
the acquisition
date, we
recorded the
fair
value
of
Sodiaal’s
49
percent
euro-denominated
interest
in
Yoplait
SAS
as
a
redeemable
interest
on
our
Consolidated
Balance
Sheets. Sodiaal had
the right to
put all or
a portion of
its redeemable interest
to us at
fair value until
the divestiture closed
in the third
quarter of
fiscal 2022.
In connection
with the
divestiture, cumulative
adjustments made
to the
redeemable
interest related
to the
fair
value put feature were
reversed against additional paid-in
capital, where changes in the
redemption amount were historically recorded,
and the resulting carrying value of the net earnings of these subsidiaries is reflected in net earnings attributable to redeemable and noncontrolling interests were included
in our Consolidated Statementsthe calculation of the gain on divestiture.
We
paid
dividends of
$
105.1
million
in fiscal
2022 and
$
40.3
million in
fiscal 2021
to Sodiaal
under the
terms of
the Yoplait
SAS,
Yoplait
Marques SNC, and Liberté Marques Sàrl shareholder agreements.
A subsidiary of
Yoplait
SAS had an
exclusive milk supply agreement
for its European operations
with Sodiaal through
November 28,
2021. Net purchases totaled $
99.5
million for the six-month period ended November 28, 2021, and $
212.1
million for fiscal 2021.
For
financial
reporting
purposes,
the
assets,
liabilities,
results
of
operations,
and
cash
flows
of
our
non-wholly
owned
consolidated
subsidiaries
are
included
in
our
Consolidated
Financial
Statements.
The
third-party
investor’s
share
of
the
net
earnings
of
these
subsidiaries
is
reflected
in
net
earnings
attributable
to
redeemable
and
noncontrolling
interests
in
our
Consolidated
Statements
of
Earnings.

Our noncontrolling interests contain restrictive covenants. As of May 29, 2016,2022, we were in compliance with all of these covenants.

NOTE 10.11. STOCKHOLDERS’
EQUITY

Cumulative preference stock of
5.0
million shares, without par value, is authorized but unissued.

On May 6, 2014,June 27, 2022, our Board of Directors authorized the
repurchase of up to
100
million shares of our common stock. Purchases under
the authorization
can be
made in
the open
market or
in privately
negotiated
transactions, including
the use
of call
options and
other
derivative
instruments,
Rule
10b5-1
trading
plans,
and
accelerated
repurchase
programs.
The
authorization
has
no
specified
termination date.

Share repurchases were as follows:

   Fiscal Year 

In Millions

  2016   2015   2014 

Shares of common stock

   10.7     22.3     35.6  

Aggregate purchase price

  $606.7    $1,161.9    $1,774.4  
                

Fiscal Year
In Millions
2022
2021
2020
Shares of common stock
13.5
5.0
0.1
Aggregate purchase price
$
876.8
$
301.4
$
3.4
70
The following table providestables provide details of total comprehensive income:

   Fiscal 2016 
   General Mills  Noncontrolling
Interests		   Redeemable
Interest		 
In Millions  Pretax  Tax  Net  Net   Net 

Net earnings, including earnings attributable to redeemable and noncontrolling interests

          $1,697.4    $  8.4     $31.0  

Other comprehensive income (loss):

       

Foreign currency translation

  $(107.6)   $     —    (107.6)   2.8     (3.9) 

Net actuarial loss

   (514.2)   188.3    (325.9)   —     —  

Other fair value changes:

       

Securities

   0.2    (0.1)   0.1    —     —  

Hedge derivatives

   16.5    (2.2)   14.3    —     1.7  

Reclassification to earnings:

       

Hedge derivatives (a)

   (13.5)   2.5    (11.0)   —     1.5  

Amortization of losses and prior service costs (b)

   206.8    (78.2)   128.6    —     —  

Other comprehensive income (loss)

   (411.8)   110.3    (301.5)   2.8     (0.7) 

Total comprehensive income

    $1,395.9   $11.2     $30.3  
                       
(a)Gain reclassified from AOCI into earnings is reported in interest, net for interest rate swaps and in cost of sales and SG&A expenses for foreign exchange contracts.
(b)Loss reclassified from AOCI into earnings is reported in SG&A expense.

   Fiscal 2015 
   General Mills  Noncontrolling
Interests		  Redeemable
Interest		 
In Millions  Pretax  Tax  Net  Net  Net 

Net earnings, including earnings attributable to redeemable and noncontrolling interests

          $1,221.3    $   8.2    $   29.9  

Other comprehensive loss:

      

Foreign currency translation

   $   (727.9)   $     —    (727.9)   (78.2)   (151.8) 

Net actuarial income

   (561.1)   202.7    (358.4)   —    —  

Other fair value changes:

      

Securities

   1.3    (0.5)   0.8    —    —  

Hedge derivatives

   13.6    (4.8)   8.8    —    (4.7) 

Reclassification to earnings:

      

Hedge derivatives (a)

   0.7    0.5    1.2    —    3.7  

Amortization of losses and prior service costs (b)

   170.2    (65.1)   105.1    —    —  

Other comprehensive loss

   (1,103.2)   132.8    (970.4)   (78.2)   (152.8) 

Total comprehensive income (loss)

     $   250.9    $(70.0)   $(122.9) 
                      
(a)Loss reclassified from AOCI into earnings is reported in interest, net for interest rate swaps and in cost of sales and SG&A expenses for foreign exchange contracts.
(b)Loss reclassified from AOCI into earnings is reported in SG&A expense.

   Fiscal 2014 
   General Mills  Noncontrolling
Interests		   Redeemable
Interest		 
In Millions  Pretax  Tax  Net  Net   Net 

Net earnings, including earnings attributable to redeemable and noncontrolling interests

          $1,824.4    $  5.8     $31.1  

Other comprehensive income:

       

Foreign currency translation

   $ (71.8)   $      —    (71.8)   19.1     41.4  

Net actuarial income

   327.2    (121.2)   206.0    —     —  

Other fair value changes:

       

Securities

   0.5    (0.2)   0.3    —     —  

Hedge derivatives

   14.4    (7.0)   7.4    —     (2.4) 

Reclassification to earnings:

       

Hedge derivatives (a)

   (4.7)   0.2    (4.5)   —     (0.1) 

Amortization of losses and prior service costs (b)

   172.7    (65.1)   107.6    —     —  

Other comprehensive income

   438.3    (193.3)   245.0    19.1     38.9  

Total comprehensive income

    $2,069.4    $24.9     $70.0  
                       
(a)Gain reclassified from AOCI into earnings is reported in interest, net for interest rate swaps and in cost of sales and SG&A expenses for foreign exchange contracts.
(b)Loss reclassified from AOCI into earnings is reported in SG&A expense.

Fiscal 2022
General Mills
Noncontrolling
Interests
Redeemable
Interest
In fiscal 2016, 2015,Millions
Pretax
Tax
Net
Net
Net
Net earnings, including earnings attributable to
redeemable and 2014, except for reclassifications to earnings, changes in othernoncontrolling interests
$
2,707.3
$
10.2
$
17.5
Other comprehensive income (loss):
Foreign currency translation
$
(188.5)
$
85.8
(102.7)
(26.2)
(47.0)
Net actuarial gain
132.4
(30.8)
101.6
0
0
Other fair value changes:
Hedge derivatives
30.1
(23.6)
6.5
0
0.5
Reclassification to earnings:
Foreign currency translation (a)
342.2
0
342.2
-
-
Hedge derivatives (b)
23.7
11.6
35.3
0
(0.2)
Amortization of losses and prior service costs (c)
97.4
(21.6)
75.8
0
0
Other comprehensive income (loss)
437.3
21.4
458.7
(26.2)
(46.7)
Total comprehensive
income (loss)
$
3,166.0
$
(16.0)
$
(29.2)
(a)
Loss reclassified from AOCI into earnings is reported in divestitures gain related
to the divestiture of our interests in Yoplait
SAS,
Yoplait
Marques SNC, and Liberte Marques Sarl to Sodiaal in the third quarter of fiscal 2022.
(b)
Loss (gain) reclassified
from AOCI into earnings
is reported in interest,
net for interest rate
swaps and in cost
of sales and SG&A
expenses for foreign exchange contracts.
(c)
Loss reclassified from AOCI into earnings is reported in benefit plan non-service
income. Please refer to Note 2.
Fiscal 2021
General Mills
Noncontrolling
Interests
Redeemable
Interest
In Millions
Pretax
Tax
Net
Net
Net
Net earnings, including earnings attributable to
redeemable and noncontrolling interests
$
2,339.8
$
6.5
$
(0.3)
Other comprehensive income (loss):
Foreign currency translation
$
(6.1)
$
64.9
58.8
31.5
84.8
Net actuarial loss
464.9
(111.5)
353.4
0
0
Other fair value changes:
Hedge derivatives
(25.8)
6.5
(19.3)
0
(1.4)
Reclassification to earnings:
Hedge derivatives (a)
19.1
(5.7)
13.4
0
0.1
Amortization of losses and prior service costs (b)
102.5
(23.6)
78.9
0
0
Other comprehensive income
554.6
(69.4)
485.2
31.5
83.5
Total comprehensive
income
$
2,825.0
$
38.0
$
83.2
(a)
Loss
reclassified
from
AOCI
into
earnings
is
reported
in
interest,
net
for
interest
rate
swaps
and
in
cost
of
sales
and
SG&A
expenses for foreign exchange contracts.
(b)
Loss reclassified from AOCI into earnings is reported in benefit plan non-service
income. Please refer to Note 2.
71
Fiscal 2020
General Mills
Noncontrolling
Interests
Redeemable
Interest
In Millions
Pretax
Tax
Net
Net
Net
Net earnings, including earnings attributable to
redeemable and noncontrolling interests
$
2,181.2
$
12.9
$
16.7
Other comprehensive income (loss):
Foreign currency translation
$
(149.1)
$
0
(149.1)
(2.6)
(17.4)
Net actuarial loss
(290.2)
65.6
(224.6)
0
0
Other fair value changes:
Hedge derivatives
4.4
(1.2)
3.2
0
0
Reclassification to earnings:
Hedge derivatives (a)
4.3
(0.7)
3.6
0
0.5
Amortization of losses and prior service costs (b)
101.3
(23.4)
77.9
0
0
Other comprehensive loss
(329.3)
40.3
(289.0)
(2.6)
(16.9)
Total comprehensive
income (loss)
$
1,892.2
$
10.3
$
(0.2)
(a)
Loss
reclassified
from
AOCI
into
earnings
is
reported
in
interest,
net
for
interest
rate
swaps
and
in
cost
of
sales
and
SG&A
expenses for foreign exchange contracts.
(b)
Loss reclassified from AOCI into earnings is reported in benefit plan non-service
income. Please refer to Note 2.
In
fiscal
2022,
2021,
and
2020,
except
for
certain
reclassifications
to
earnings,
changes
in other
comprehensive
income (loss)
were
primarily non-cash items.

Accumulated other comprehensive loss balances, net of tax effects,
were as follows:

In Millions  May 29,
2016		   May 31,
2015		 

Foreign currency translation adjustments

  $(644.2)   $(536.6) 

Unrealized gain (loss) from:

    

Securities

   3.8     3.7  

Hedge derivatives

   (25.5)    (28.8) 

Pension, other postretirement, and postemployment benefits:

    

Net actuarial loss

   (1,958.2)    (1,756.1) 

Prior service credits

   11.9     7.1  

Accumulated other comprehensive loss

  $(2,612.2)   $(2,310.7) 
           

In Millions
May 29, 2022
May 30, 2021
Foreign currency translation adjustments
$
(590.7)
$
(830.2)
Unrealized loss from hedge derivatives
23.3
(18.5)
Pension, other postretirement, and postemployment benefits:
Net actuarial loss
(1,513.4)
(1,718.4)
Prior service credits
110.3
137.9
Accumulated other comprehensive loss
$
(1,970.5)
$
(2,429.2)
NOTE 11.12. STOCK PLANS

We
use broad-based stock
plans to help
ensure that management’s
interests are aligned
with those of
our shareholders. As
of May 29, 2016,
2022,
a total
of 24.3 
20.7
million shares
were available
for grant
in the
form of
stock options,
restricted
stock, restricted
stock units,
and
shares
of unrestricted
stock under
the 2017
Stock Compensation
Plan
(2017
Plan). The
2017
Plan
also provides
for
the issuance
of
cash-settled
share-based
units, stock
appreciation
rights, and
performance-based
stock awards.
Stock-based
awards now
outstanding
include some granted
under the 2011 Stock Compensation Plan (2011 Plan) and the 2011 Compensation Plan for Non-Employee Directors. The 2011 Plan also provides for the issuance of cash-settled share-based units,
stock appreciation rights, and performance-based stock awards. Stock-based awards now outstanding include some granted under the 2005, 2006, 2007, and 2009 stock plans,plan, under which
no further awards may
be granted. The stock
plans provide for potential
accelerated vesting of awards upon retirement, termination, or death of
eligible employees and directors.

Stock Options

The
estimated
fair
values
of
stock
options
granted
and
the
assumptions
used
for
the
Black-Scholes
option-pricing
model
were
as
follows:
Fiscal Year
2022
2021
2020
Estimated fair values of stock options granted and the assumptions used for the Black-Scholes option-pricing model were as follows:

   Fiscal Year 
    2016   2015   2014 

Estimated fair values of stock options granted

   $  7.24             $  7.22            $  6.03         

Assumptions:

      

Risk-free interest rate

   2.4%           2.6%           2.6%        

Expected term

   8.5 years     8.5 years     9.0 years  

Expected volatility

   17.6%           17.5%           17.4%        

Dividend yield

   3.2%           3.1%           3.1%        
                

$
8.77
$
8.03
$
7.10
Assumptions:
Risk-free interest rate
1.5
%
0.7
%
2.0
%
Expected term
8.5
years
8.5
years
8.5
years
Expected volatility
20.2
%
19.5
%
17.4
%
Dividend yield
3.4
%
3.3
%
3.6
%
72
We estimate the fair value of each option on the grant date using a Black-Scholes option-pricing model, which requires us to make
predictive assumptions regarding future stock price volatility, employee exercise behavior, dividend yield, and the forfeiture rate. We
estimate our future stock price volatility using the historical volatility over the expected term of the option, excluding time periods of
volatility we believe a marketplace participant would exclude in estimating our stock price volatility. We also have considered, but did
not use, implied volatility in our estimate, because trading activity in options on our stock, especially those with tenors of greater than
6 months, is insufficient to provide a reliable measure of expected volatility.

Our
expected
term
represents
the
period
of
time
that
options
granted
are
expected
to
be
outstanding
based
on
historical
data
to
estimate option exercises and employee
terminations within the valuation
model. Separate groups of employees
have similar historical
exercise behavior and therefore
were aggregated into a
single pool for valuation
purposes. The weighted-average expected
term for all
employee groups is presented in the table
above. The risk-free interest rate for
periods during the expected term of
the options is based
on the U.S. Treasury zero-coupon yield curve in
effect at the time of grant.

Any corporate
income tax
benefit realized
upon exercise
or vesting
of an
award in
excess of
that previously
recognized in
earnings (referred
(referred to
as a
windfall tax
benefit) is
presented in
our Consolidated
Statements of
Cash Flows
as an
operating cash
flow.
Realized
windfall
tax
benefits
and
shortfall
tax
deficiencies
related
to
the
exercise
or
vesting
of
stock-based
awards
are
recognized
in
the
Consolidated
Statement
of Earnings.
We
recognized
windfall tax
benefits
from
stock-based
payments
in
income
tax expense
in our
Consolidated Statements of Cash Flows as a financing cash flow.

Realized windfall tax benefits are credited to additional paid-in capital within our Consolidated Balance Sheets. Realized shortfall tax benefits (amounts which are less than that previously recognizedEarnings of $

18.4
million in earnings) are first offset against the cumulative balance of windfall tax benefits, if any,fiscal 2022, $
12.4
million in fiscal 2021, and then charged directly to income tax expense, potentially resulting$
27.3
million in volatility in our consolidated effective income tax rate. We calculated a cumulative memo balance of windfall tax benefits for the purpose of accounting for future shortfall tax benefits.

fiscal 2020.

Options may be priced
at
100
percent or more of
the fair market value on
the date of grant, and
generally vest
four years
after the date
of grant. Options generally expire within
10 years and one month
after the date of grant.

Information on stock option activity follows:

    Options
Exercisable
(Thousands)		   

Weighted-
Average
Exercise

Price Per
Share

   Options
Outstanding
(Thousands)		   

Weighted-
Average
Exercise

Price Per
Share

 

Balance as of May 26, 2013

   29,290.3     $27.69     47,672.1     $30.22  

Granted

       2,789.8     48.33  

Exercised

       (6,181.3)    24.78  

Forfeited or expired

             (111.6)    38.74  

Balance as of May 25, 2014

   29,452.8     28.37     44,169.0     32.10  

Granted

       2,253.1     53.70  

Exercised

       (7,297.2)    26.68  

Forfeited or expired

             (47.7)    43.73  

Balance as of May 31, 2015

   26,991.5     30.44     39,077.2     34.35  

Granted

       1,930.2     55.72  

Exercised

       (8,471.0)    28.49  

Forfeited or expired

             (134.8)    48.16  

Balance as of May 29, 2016

   22,385.1     $32.38     32,401.6     $37.09  

Options
Outstanding
(Thousands)
Weighted-Average
Exercise Price Per
Share
Weighted-Average
Remaining
Contractual Term
(Years)
Aggregate Intrinsic
Value (Millions)
Balance as of May 30, 2021
17,397.5
$
53.29
5.26
$
174.4
Granted
1,485.4
60.03
Exercised
(3,564.6)
47.03
Forfeited or expired
(312.8)
55.79
Outstanding as of May 29, 2022
15,005.5
$
55.39
5.36
$
217.5
Exercisable as of May 29, 2022
7,960.9
$
57.10
3.58
$
101.8
Stock-based compensation
expense related
to stock
option awards
was $14.8 $
12.1
million in
fiscal 2022,
$
11.2
million in
fiscal 2021,
and
$
13.4
million in fiscal 2016, $18.1 million in fiscal 2015, 2020.
Net
cash
proceeds
from
the
exercise
of
stock
options
less
shares
used
for
minimum
withholding
taxes
and $18.2 million in fiscal 2014. Compensation expense related to stock-based payments recognized in our Consolidated Statements
the
intrinsic
value
of Earnings includes amounts recognized in restructuring, impairment, and other exit costs for fiscal 2016 and 2015.

Net cash proceeds from the exercise of stock options less shares used for minimum withholding taxes and the intrinsic value of

options exercised were as follows:

   Fiscal Year 
In Millions  2016   2015   2014 

Net cash proceeds

  $171.9    $163.7    $108.1  

Intrinsic value of options exercised

  $268.4    $201.9    $166.6  
                

Fiscal Year
In Millions
2022
2021
2020
Net cash proceeds
$
161.7
$
74.3
$
263.4
Intrinsic value of options exercised
$
74.0
$
44.8
$
132.9
Restricted Stock, Restricted Stock Units, and Performance Share Units

Stock
and
units
settled
in
stock
subject
to
a
restricted
period
and
a
purchase
price,
if
any (as
(as
determined
by
the
Compensation
Committee
of the
Board
of Directors),
may
be granted
to key
employees
under the 2011
2017 Plan.
Restricted
stock and
restricted
stock
units generally
vest and become
unrestricted
four years
after the date
of grant. Performance
share units are
earned primarily
based on
our
future
achievement
of
three-year
goals
for
average
organic
net
sales
growth
and
cumulative
free
cash
flow.
Performance
share
units
are
settled
in
common
stock
and
are generally
subject to
a
three-year
performance
and
vesting
period.
The
sale or
transfer
of
these awards is
restricted during
the vesting period.
Participants holding restricted
stock, but not
restricted stock
units or performance
share units, are settled in common stock and are generally

subject to a three year performance and vesting period. The sale or transfer of these awards is restricted during the vesting period. Participants holding restricted stock, but not restricted stock units or performance share units, are

entitled to vote on
matters submitted to
holders of common
stock for a vote.
These awards accumulate
dividends from
the date of grant, but participants only receive payment if the awards vest.

73
Information on restricted stock unit and performance share unitsunit activity
follows:

   Equity Classified   Liability Classified 
    Share-Settled
Units
(Thousands)		  

Weighted-
Average

Grant-Date

Fair Value

   Share-Settled
Units
(Thousands)		  

Weighted-
Average

Grant-Date

Fair Value

 

Non-vested as of May 31, 2015

   6,235.6   $46.44     237.0   $44.84  

Granted

   1,287.7    56.01     63.8    55.82  

Vested

   (2,119.9)   46.65     (69.5)   40.55  

Forfeited, expired, or reclassified

   (303.0)   49.45     (19.9)   51.45  

Non-vested as of May 29, 2016

   5,100.4   $48.60     211.4   $48.37  
                   

   Fiscal Year 
    2016   2015   2014 

Number of units granted (thousands)

   1,351.5     1,708.2     2,144.1  

Weighted average price per unit

  $56.00    $53.45    $48.49  
                

The total grant-date fair value

Equity Classified
Liability Classified
Share-Settled Units
(Thousands)
Weighted-Average
Grant-Date Fair
Value
Share-Settled Units
(Thousands)
Weighted-Average
Grant-Date Fair
Value
Non-vested as of restricted stock unit awards that vested during fiscal 2016 was $101.8 million and $133.7 million vested during fiscal 2015.

AsMay 30, 2021

5,072.8
$
53.84
97.6
$
54.26
Granted
1,958.1
60.01
30.9
60.23
Vested
(1,532.9)
52.48
(42.0)
53.95
Forfeited or expired
(344.6)
57.10
(9.2)
57.49
Non-vested as of May 29, 2016,2022
5,153.4
$
56.37
77.3
$
56.43
Fiscal Year
2022
2021
2020
Number of units granted (thousands)
1,989.0
1,529.0
1,947.6
Weighted-average
price per unit
$
60.02
$
61.24
$
53.28
The total
grant-date fair
value of
restricted stock
unit awards
that vested
was $
82.7
million in
fiscal 2022
and $
74.4
million in
fiscal
2021.
As of May
29, 2022, unrecognized
compensation expense
related to non-vested
stock options, restricted
stock units, and
performance
share units was $93.9 $
101.9
million. This expense will be recognized over
18 months
, on average.

Stock-based
compensation
expense
related
to
restricted
stock
units
and
performance
share
units
was $76.8
$
94.2
million
for
fiscal
2022,
$
78.7
million for fiscal 2016, $96.6
2021, and $
81.5
million for fiscal 2015, and $107.0 million for fiscal 2014.
2020. Compensation expense
related to stock-based
payments recognized in
our
Consolidated
Statements
of
Earnings
includes
amounts
recognized
in
restructuring,
impairment,
and
other
exit
costs
for
fiscal 2016 and 2015.

2022.
NOTE 12.13. EARNINGS PER SHARE

Basic and diluted EPS were calculated using the following:

   Fiscal Year 
In Millions, Except per Share Data  2016   2015   2014 

Net earnings attributable to General Mills

  $1,697.4    $1,221.3    $1,824.4  
                

Average number of common shares—basic EPS

   598.9     603.3     628.6  

Incremental share effect from: (a)

      

Stock options

   9.8     11.3     12.3  

Restricted stock units, performance share units, and other

   3.2     4.2     4.8  

Average number of common shares—diluted EPS

   611.9     618.8     645.7  

Earnings per share—basic

  $2.83    $2.02    $2.90  

Earnings per share—diluted

  $2.77    $1.97    $2.83  
                
(a)Incremental shares from stock options, restricted stock units, and performance share units are computed by the treasury stock method. Stock options, restricted stock units, and performance share units excluded from our computation of diluted EPS because they were not dilutive were as follows:

   Fiscal Year 
In Millions  2016   2015   2014 

Anti-dilutive stock options, restricted stock units, and performance share units

   1.1     2.1     1.7  
                

Fiscal Year
In Millions, Except per Share Data
2022
2021
2020
Net earnings attributable to General Mills
$
2,707.3
$
2,339.8
$
2,181.2
Average number
of common shares - basic EPS
607.5
614.1
608.1
Incremental share effect from: (a)
Stock options
2.5
2.5
2.7
Restricted stock units and performance share units
2.6
2.5
2.5
Average number
of common shares - diluted EPS
612.6
619.1
613.3
Earnings per share — basic
$
4.46
$
3.81
$
3.59
Earnings per share — diluted
$
4.42
$
3.78
$
3.56
a)
Incremental
shares
from
stock
options,
restricted
stock
units,
and
performance
share
units
are
computed
by
the
treasury
stock
method. Stock options, restricted stock units, and performance
share units excluded from our computation of diluted
EPS because
they were not dilutive were as follows:
Fiscal Year
In Millions
2022
2021
2020
Anti-dilutive stock options, restricted stock units,
and performance share units
4.4
3.4
8.4
74
NOTE 13.14. RETIREMENT BENEFITS AND POSTEMPLOYMENT BENEFITS

Defined Benefit Pension Plans

We have
defined benefit pension plans
covering many employees in the United
States, Canada, France,Switzerland, and the
United Kingdom.
Benefits for salaried
employees are based
on length of service
and final average
compensation. Benefits for
hourly employees include
various monthly
amounts for each
year of credited
service. Our funding
policy is consistent
with the requirements
of applicable laws.
We made no
0
voluntary contributions to our
principal U.S. plans in fiscal 2016, 2015 and 2014.
2022 or fiscal 2021.
We do
not expect to be required
to make
any
contributions
to
our
principal
U.S.
plans
in
fiscal 2017.
2023.
Our
principal domestic
U.S.
retirement
plan
covering
salaried
employees
has
a
provision that any excess pension assets would be allocated to active participants
if the plan is terminated within
five years
of a change
in control.
All salaried employees
hired on
or after June 1,
2013, are
eligible for
a retirement program
that does not
include a defined
benefit pension plan.

Other Postretirement Benefit Plans

We
also
sponsor
plans
that
provide
health
care
benefits
to
many
of our
retirees
in
the United
States,
Canada,
and
Brazil.
The United States
U.S.
salaried
health
care
benefit
plan
is
contributory,
with
retiree
contributions
based
on
years
of
service.
We
make
decisions
to
fund
related trusts
for certain
employees and
retirees on an
annual basis.
We
made $24.0 million
0
voluntary contributions
to these
plans in voluntaryfiscal
2022
or fiscal 2021. We
do not expect to be required to make any contributions to these plans in fiscal 20162023.
In fiscal 2021, we approved
amendments to reorganize
certain U.S. retiree health and $24.0 million
welfare benefit plans. The General
Mills Retiree
Health
Plan
for
Union
Employees
was
divided
into
two
plans,
with
participants
under
age
65
remaining
within
its
coverage,
and
participants age 65 and over covered by The General Mills Retiree Health Plan
for Union Employees (65+). Effective
January 1, 2022,
the General
Mills Retiree
Health Plan
for Union
Employees (65+)
allows certain
participants to
purchase individual
health insurance
policies on
a private
health care
exchange. Additionally,
the Employees’
Benefit Plan
of General
Mills was
merged
into the
General
Mills
Retiree
Health
Plan
for
Union
Employees.
Separate
benefit
structures
and
plan
provisions
continue
to
apply
to
eligible
participants of
these merged
plans. A
portion of
the General
Mills Retiree
Health Plan
for Union
Employees overfunded
plan assets
were
segregated
to offset
the cost
of
the
Employees’
Benefit Plan
of
General
Mills health
and
welfare
benefits.
The
segregation
of
assets
is
reported
as
a
negative
employer
contribution
in
the
change
in
other
postretirement
benefit
plan
assets.
The
amendments
facilitate targeted investment strategies that reflect each
plan’s unique liability characteristics.
In
fiscal
2021,
we
announced
changes
to
the design
of our
health
care
coverage
for
certain eligible
retirees
to
allow participants
to
purchase
individual
health
insurance
policies
on
a
private
health
care
exchange
effective
January
1,
2022.
These
changes
provide
certain eligible retirees with greater flexibility in voluntary contributions to these plans in fiscal 2015.

choosing health care coverage

that best fits their needs.
Health Care Cost Trend
Rates

Assumed health care cost trends are as follows:

   Fiscal Year 
    2016   2015 

Health care cost trend rate for next year

   7.3% and 7.5%     6.5% and 7.3%  

Rate to which the cost trend rate is assumed to decline (ultimate rate)

   5.0%     5.0%  

Year that the rate reaches the ultimate trend rate

   2024         2025      
           

We review our health care cost trend rates annually. Our review is based on data we collect about our health care claims experience and information provided by our actuaries. This information includes recent plan experience, plan design, overall industry experience and projections, and assumptions used by other similar organizations. Our initial health

Fiscal Year
2022
2021
Health care cost trend rate is adjusted as necessaryfor next year
5.9
% and
6.0
%
6.0
% and
6.3
%
Rate to remain consistent with this review, recent experiences, and short-term expectations. Our initial health carewhich the cost trend rate assumption is 7.5 percent for retirees age 65 and over and 7.3 percent for retirees under age 65 atassumed to decline (ultimate rate)
4.5
%
4.5
%
Year
that the end of fiscal 2016. Rates are graded down annually untilrate reaches the ultimate trend rate of 5.0 percent is reached in 2024 for all retirees. The trend rates are applicable for calculations only if the retirees’ benefits increase as a result of
2031
2029
We
review our
health care inflation. The ultimate
cost trend
rates annually.
Our review
is based
on data
we collect
about our
health care
claims experience
and information
provided by our
actuaries. This information
includes recent
plan experience,
plan design, overall
industry experience
and projections, and
assumptions used by other
similar organizations.
Our initial health
care cost trend
rate is adjusted annually,
as necessary to approximate
remain consistent
with this
review,
recent experiences,
and short-term
expectations. Our
initial health
care cost
trend rate
assumption
is
6.0
percent for
retirees age
65 and
over and
5.9
percent for
retirees under
age 65
at the current economic view on
end of
fiscal 2022.
Rates are
graded down
annually until
the ultimate
trend rate
of long-term inflation plus an appropriate
4.5
percent is
reached in
2031
for all
retirees. The
trend rates
are applicable
for calculations
only if
the retirees’
benefits increase
as a
result of
health care
inflation. The
ultimate trend
rate is
adjusted annually,
as necessary,
to
approximate
the
current
economic
view
on
the
rate
of
long-term
inflation
plus
an
appropriate
health
care
cost
premium.
Assumed
trend rates for health care costs have an important effect on the
amounts reported for the other postretirement benefit plans.

A one percentage point change in the health care cost trend rate would have the following effects:

In Millions  

One

Percentage

Point

Increase

   

One

Percentage

Point

Decrease

 

Effect on the aggregate of the service and interest cost components in fiscal 2017

   $  3.1     $  (2.7)  

Effect on the other postretirement accumulated benefit obligation as of May 29, 2016

   71.2     (63.8)  
           

The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the Act) was signed into law in March 2010. The Act codifies health care reforms with staggered effective dates from 2010 to 2018. Estimates of the future impacts of several of the Act’s provisions are incorporated into our postretirement benefit liability.

Postemployment Benefit Plans

Under certain
circumstances, we
also provide
accruable benefits,
primarily severance,
to former
or inactive
employees in
the United
States,
Canada,
and Mexico, and members
Mexico.
We
recognize
an
obligation
for
any
of our Board of Directors, including severance and certain other
these
benefits payable upon death. We recognize an obligation for any of these benefits
that
vest
or
accumulate
with
service.
75
Postemployment benefits
that do not
vest or
accumulate with
service (such
as severance
based solely
on annual pay
rather than
years
of service) are charged to expense when incurred. Our postemployment
benefit plans are unfunded.

We use our

Summarized
financial
information
about
defined
benefit
pension,
other
postretirement
benefit,
and
postemployment
benefit
plans
is
presented below:
Defined Benefit
Pension Plans
Other
Postretirement
Benefit Plans
Postemployment
Benefit Plans
Fiscal Year
Fiscal Year
Fiscal Year
In Millions
2022
2021
2022
2021
2022
2021
Change in Plan Assets:
Fair value at beginning of year
$
7,460.2
$
6,993.2
$
519.4
$
793.5
Actual return on assets
(618.7)
716.3
(18.0)
108.1
Employer contributions
31.2
33.8
0.1
(359.9)
Plan participant contributions
3.8
4.1
9.6
13.0
Benefits payments
(346.2)
(315.1)
(31.9)
(35.3)
Foreign currency
(20.0)
27.9
0
0
Fair value at end of year (a)
$
6,510.3
$
7,460.2
$
479.2
$
519.4
Change in Projected Benefit Obligation:
Benefit obligation at beginning of year
$
7,714.4
$
7,640.2
$
600.0
$
773.7
$
151.7
$
150.3
Service cost
93.5
104.4
7.6
8.5
10.0
9.3
Interest cost
184.3
192.1
12.6
18.0
1.5
1.7
Plan amendment
3.7
1.1
(16.1)
(138.7)
0
0
Curtailment/other
(29.4)
(5.8)
(3.2)
0
12.0
5.1
Plan participant contributions
3.8
4.1
9.6
13.0
0
0
Medicare Part D reimbursements
0
0
1.7
2.5
0
0
Actuarial (gain) loss
(1,089.7)
67.4
(86.0)
(15.8)
(18.7)
7.2
Benefits payments
(334.7)
(315.7)
(56.9)
(61.9)
(17.7)
(22.5)
Foreign currency
(17.6)
26.6
0.3
0.7
(0.3)
0.6
Projected benefit obligation at end of year (a)
$
6,528.3
$
7,714.4
$
469.6
$
600.0
$
138.5
$
151.7
Plan assets (less) more than benefit obligation as of
fiscal year end
$
(18.0)
$
(254.2)
$
9.6
$
(80.6)
$
(138.5)
$
(151.7)
(a)
Plan assets and obligations are measured as of
May 31, 2022
and
May 31, 2021
.
During
fiscal 202
2, the measurement date for our
decreases in
defined
benefit
pension
benefit
obligations
and
other postretirement
obligations
were primarily
driven by actuarial gains due to an increase in the discount rate.
During
fiscal
2021,
the
increase
in
defined
benefit
pension
benefit
obligations
was
primarily
driven
by
actuarial
losses
due
to
a
decrease
in the
discount
rate. The
decrease
in other
postretirement
obligations
was primarily
driven by
the reorganization
of certain
U.S. retiree health and welfare benefit plans.

Summarized financial information about defined

As
of
May
29,
2022,
other
postretirement
benefit pension,
plans
had
benefit
obligations
of
$
332.4
million
that
exceeded
plan
assets
of
$
279.6
million. As
of May
30, 2021,
other postretirement benefit, and postemployment
benefit plans is presented below:

   Defined Benefit
Pension Plans		  Other
Postretirement
Benefit Plans		  Postemployment
Benefit Plans		 
   Fiscal Year  Fiscal Year  Fiscal Year 
In Millions  2016  2015  2016  2015  2016  2015 

Change in Plan Assets:

       

Fair value at beginning of year

  $5,758.5   $5,611.8   $582.8   $517.3     

Actual return on assets

   36.3    373.6    (0.1)   44.0     

Employer contributions

   23.7    24.1    24.1    24.1     

Plan participant contributions

   5.7    10.3    14.1    13.6     

Benefits payments

   (277.5)   (244.9)   (18.5)   (16.2)    

Foreign currency

   (6.8)   (16.4)   —    —     

 

   

Fair value at end of year

  $5,539.9   $5,758.5   $602.4   $582.8     

 

   

Change in Projected Benefit Obligation:

       

Benefit obligation at beginning of year

  $6,252.1   $5,618.0   $1,079.6   $1,074.8   $146.6   $145.3  

Service cost

   134.6    137.0    19.0    22.4    7.6    7.5  

Interest cost

   267.8    249.2    44.1    46.9    3.9    4.3  

Plan amendment

   0.9    1.9    —    (42.4)   1.1    —  

Curtailment/other

   7.1    19.9    0.5    3.4    10.7    9.5  

Plan participant contributions

   5.7    10.3    14.1    13.6    —    —  

Medicare Part D reimbursements

   —    —    3.5    3.2    —    —  

Actuarial loss (gain)

   65.2    479.7    (64.5)   23.5    11.2    (0.4) 

Benefits payments

   (278.0)   (245.5)   (66.4)   (62.8)   (16.9)   (19.1) 

Foreign currency

   (6.9)   (18.4)   (1.0)   (3.0)   (0.1)   (0.5) 

Projected benefit obligation at end of year

  $6,448.5   $6,252.1   $1,028.9   $1,079.6   $164.1   $146.6  

Plan assets less than benefit

obligation as of fiscal year end

  $(908.6)  $(493.6)  $(426.5)  $(496.8)  $(164.1)  $(146.6) 
                          

Assumed mortality rates

had benefit
obligations of plan participants are a critical estimate in measuring the expected payments a participant will receive over their lifetime and the amount of expense we recognize. On October 27, 2014, the Society of Actuaries published RP-2014 Mortality Tables and Mortality Improvement Scale MP-2014, which both reflect improved longevity. We adopted the change to the mortality assumptions to remeasure our defined benefit pension plans and other postretirement benefit plans obligations which increased the total of these obligations by $436.7
$
412.4
million in fiscal 2015.

The accumulated that

exceeded
plan
assets
of
$
310.1
million.
Postemployment
benefit obligation for all defined
plans
are
not
funded
and
had
benefit pension plans was $5,950.7
obligations
of
$
138.5
million
and
$
151.7
million as of May 29, 2016,2022 and $5,750.4 May 30, 2021, respectively.
The
accumulated
benefit
obligation
for
all
defined
benefit
pension
plans
was
$
6,330.0
million
as
of
May 29,
2022,
and
$
7,402.1
million as of May 31, 2015.

30, 2021.

76
Amounts recognized in AOCI as of May 29, 20162022 and May 31, 2015,30, 2021, are as follows:

   Defined Benefit
Pension Plans		  Other
Postretirement
Benefit Plans		  Postemployment
Benefit Plans		  Total 
   Fiscal Year  Fiscal Year  Fiscal Year  Fiscal Year 
In Millions  2016  2015  2016  2015  2016  2015  2016  2015 

Net actuarial loss

  $(1,886.0)  $(1,674.9)  $(57.6)  $(72.2)  $(14.6)  $(9.0)  $(1,958.2)  $(1,756.1) 

Prior service (costs) credits

   (6.8)   (13.8)   19.9    23.8    (1.2)   (2.9)   11.9    7.1  

Amounts recorded in accumulated other comprehensive loss

  $(1,892.8)  $(1,688.7)  $(37.7)  $(48.4)  $(15.8)  $(11.9)  $(1,946.3)  $(1,749.0) 
                                  

Defined Benefit
Pension Plans
Other Postretirement
Benefit Plans
Postemployment
Benefit Plans
Total
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
In Millions
2022
2021
2022
2021
2022
2021
2022
2021
Net actuarial (loss) gain
$
(1,720.3)
$
(1,897.2)
$
208.5
$
200.8
$
(1.6)
$
(22.0)
$
(1,513.4)
$
(1,718.4)
Prior service (costs) credits
(7.6)
5.8
118.9
133.7
(1.0)
(1.6)
110.3
137.9
Amounts recorded in accumulated
other comprehensive loss
$
(1,727.9)
$
(1,891.4)
$
327.4
$
334.5
$
(2.6)
$
(23.6)
$
(1,403.1)
$
(1,580.5)
Plans with accumulated benefit obligations in excess of plan assets as of May
29, 2022 and May 30, 2021 are as follows:

   Defined
Benefit
Pension Plans		   Other
Postretirement
Benefit Plans		   Postemployment
Benefit Plans		 
   Fiscal Year   Fiscal Year   Fiscal Year 
In Millions  2016   2015   2016   2015   2016   2015 

Projected benefit obligation

  $5,490.3    $512.3    $—    $—    $4.8    $—  

Accumulated benefit obligation

   4,998.3     440.6     1,024.7     1,074.8     159.3     143.5  

Plan assets at fair value

   4,498.5     —     602.4     582.8     —     —  
                               

Defined Benefit Pension Plans
Fiscal Year
In Millions
2022
2021
Projected benefit obligation
$
508.2
$
615.3
Accumulated benefit obligation
479.6
556.2
Plan assets at fair value
20.5
26.7
Components of net periodic benefit expense are as follows:

   Defined Benefit
Pension Plans		  Other Postretirement
Benefit Plans		  Postemployment
Benefit Plans		 
   Fiscal Year  Fiscal Year  Fiscal Year 
In Millions  2016  2015  2014  2016  2015  2014  2016   2015   2014 

Service cost

  $134.6   $137.0   $133.0   $19.0   $22.4   $22.7   $7.6    $7.5    $7.7  

Interest cost

   267.8    249.2    239.5    44.1    46.9    50.5    3.9     4.3     4.1  

Expected return on plan assets

   (496.9)   (476.4)   (455.6)   (46.2)   (40.2)   (34.6)   —     —     —  

Amortization of losses

   189.8    141.7    151.0    6.6    4.9    15.4    0.7     0.7     0.6  

Amortization of prior service

costs (credits)

   4.7    7.4    5.6    (5.4)   (1.6)   (3.4)   2.5     2.4     2.4  

Other adjustments

   5.0    15.1    —    2.3    3.3    —    10.7     9.5     3.7  

Settlement or curtailment losses

   13.1    18.0    —    (1.0)   1.3    (2.9)   —     —     —  

Net expense

  $118.1   $92.0   $73.5   $19.4   $37.0   $47.7   $25.4    $24.4    $18.5  
                                        

We expect to recognize the following amounts in net periodic benefit

Defined Benefit Pension Plans
Other Postretirement Benefit
Plans
Postemployment Benefit Plans
Fiscal Year
Fiscal Year
Fiscal Year
In Millions
2022
2021
2020
2022
2021
2020
2022
2021
2020
Service cost
$
93.5
$
104.4
$
92.7
$
7.6
$
8.5
$
9.4
$
10.0
$
9.3
$
8.3
Interest cost
184.3
192.1
230.5
12.6
18.0
27.1
1.5
1.7
2.6
Expected return on
plan assets
(411.1)
(420.9)
(449.9)
(26.7)
(34.7)
(42.1)
0
0
0
Amortization of losses
(gains)
140.5
108.3
106.0
(10.9)
(5.1)
(2.1)
3.0
2.6
0.4
Amortization of prior
service costs
(credits)
1.0
1.3
1.6
(20.9)
(5.5)
(5.5)
0.4
0.9
0.9
Other adjustments
0.1
0
0
(0.1)
0
0
12.9
8.4
17.7
Settlement or
curtailment (gains)
losses
(18.4)
14.9
0
(5.5)
0
0
0
0
0
Net (income) expense in fiscal 2017:

In Millions  

Defined Benefit

Pension Plans

   

Other

Postretirement

Benefit Plans

  

Postemployment

Benefit Plans

 

Amortization of losses

   $190.3     $ 2.5    $1.8  

Amortization of prior service costs (credits)

   2.5     (5.4)   0.6  
               

$
(10.1)
$
0.1
$
(19.1)
$
(43.9)
$
(18.8)
$
(13.2)
$
27.8
$
22.9
$
29.9
Assumptions

Weighted-average
assumptions used to determine fiscal year-end benefit obligations are
as follows:

   Defined Benefit
Pension Plans		  Other
Postretirement
Benefit Plans		  Postemployment
Benefit Plans		 
   Fiscal Year  Fiscal Year  Fiscal Year 
    2016  2015  2016  2015  2016  2015 

Discount rate

   4.19%   4.38%   3.97%   4.20%   2.94%   3.55% 

Rate of salary increases

   4.28    4.09    —    —    4.35    4.36  
                          

Defined Benefit Pension
Plans
Other Postretirement
Benefit Plans
Postemployment Benefit
Plans
Fiscal Year
Fiscal Year
Fiscal Year
2022
2021
2022
2021
2022
2021
Discount rate
4.39
%
3.17
%
4.36
%
3.03
%
3.62
%
2.04
%
Rate of salary increases
4.34
4.39
0
0
4.46
4.46
77
Weighted-average
assumptions used to determine fiscal year net periodic benefit expense are as follows:

   Defined Benefit
Pension Plans		  Other
Postretirement
Benefit Plans		  Postemployment
Benefit Plans		 
   Fiscal Year  Fiscal Year  Fiscal Year 
    2016  2015  2014  2016  2015  2014  2016  2015  2014 

Discount rate

   4.38%   4.54%   4.54%   4.20%   4.51%   4.52%   3.55%   3.82%   3.70% 

Rate of salary increases

   4.31    4.44    4.44    —    —    —    4.36    4.44    4.44  

Expected long-term rate of return on plan assets

   8.53    8.53    8.53    8.14    8.13    8.11    —    —    —  
                                      

Defined Benefit Pension Plans
Other Postretirement Benefit
Plans
Postemployment Benefit Plans
Fiscal Year
Fiscal Year
Fiscal Year
2022
2021
2020
2022
2021
2020
2022
2021
2020
Discount rate
3.17
%
3.20
%
3.91
%
3.03
%
3.02
%
3.79
%
2.04
%
1.86
%
3.10
%
Service cost
effective rate
3.56
3.58
4.19
3.34
3.40
4.04
2.46
3.51
3.51
Interest cost
effective rate
2.42
2.55
3.47
2.08
2.29
3.28
1.48
2.83
2.84
Rate of
salary increases
4.39
4.44
4.17
0
0
0
4.46
4.47
4.47
Expected long-term
rate of return on
plan assets
5.85
5.72
6.95
6.09
4.57
5.67
0
0
0
Discount Rates

We
estimate
the
service
and
interest
cost
components
of
the
net
periodic
benefit
expense
for
our
United
States
and
most
of
our
international
defined
benefit
pension,
other
postretirement
benefit,
and
postemployment
benefit
plans
utilizing
a
full
yield
curve
approach
by applying
the specific
spot rates
along
the yield
curve used
to determine
the benefit
obligation
to the
relevant projected
cash flows. Our
discount rate assumptions
are determined annually
as of the last day of our fiscal year May 31
for our defined
benefit pension, other
postretirement
benefit, and
postemployment benefit
plan obligations.
We
also use
discount rates
as of
May 31 to
determine defined
benefit pension,
other
postretirement benefit,
and
postemployment
benefit plan obligations. We also use
income and
expense for
the same discount rates following
fiscal year.
We
work with
our
outside actuaries
to determine defined benefit pension, other postretirement benefit, and postemployment benefit plan income and expense for the following fiscal year. We work with our outside actuaries to determine
the timing
and amount
of expected
future cash
outflows to
plan participants
and, using
the Aa
Above
Median corporate
bond yield,
to develop
a forward
interest rate
curve, including
a margin
to that
index based on
our credit
risk. This
forward interest rate curve is applied to our expected future cash outflows
to determine our discount rate assumptions.

78
Fair Value
of Plan Assets

The fair
values of
our pension
and postretirement
benefit plans’
assets and
their respective
levels in
the fair
value hierarchy
by asset
category were as follows:
May 31, 2022
May 31, 2021
In Millions
Level 1
Level 2
Level 3
Total
Assets
Level 1
Level 2
Level 3
Total
Assets
Fair value measurement of pension
plan assets:
Equity (a)
$
623.4
$
442.3
$
66.3
$
1,132.0
$
838.3
$
697.2
$
0
$
1,535.5
Fixed income (b)
1,958.7
1,723.4
0
3,682.1
1,993.5
1,936.3
0
3,929.8
Real asset investments (c)
159.8
0
0
159.8
277.9
0.2
0
278.1
Other investments (d)
0
0
0.1
0.1
0
0
0.1
0.1
Cash and accruals
133.6
0.3
0
133.9
180.0
0
0
180.0
Fair value measurement of pension
plan assets
$
2,875.5
$
2,166.0
$
66.4
$
5,107.9
$
3,289.7
$
2,633.7
$
0.1
$
5,923.5
Assets measured at net asset value (e)
1,402.4
1,536.7
Total pension plan
assets
$
6,510.3
$
7,460.2
Fair value measurement of
postretirement benefit plans’plan assets:
Equity (a)
$
0
$
0
$
0
$
0
$
0.2
$
0
$
0
$
0.2
Fixed income (b)
120.8
0
0
120.8
117.3
0
0
117.3
Cash and accruals
6.6
0
0
6.6
14.8
0
0
14.8
Fair value measurement of
postretirement benefit
plan assets
$
127.4
$
0
$
0
$
127.4
$
132.3
$
0
$
0
$
132.3
Assets measured at net asset value (e)
351.8
387.1
Total postretirement
benefit
plan assets
$
479.2
$
519.4
(a)
Primarily
publicly
traded
common
stock
for
purposes
of
total
return
and
to
maintain
equity
exposure
consistent
with
policy
allocations. Investments
include: United States
and their respective levels ininternational
public equity
securities, mutual funds,
and equity futures
valued
at closing prices from national exchanges, commingled funds valued
at fair value using the unit values provided by the investment
managers,
and certain
private equity
securities valued
using
a matrix
of pricing
inputs reflecting
assumptions
based on
the best
information available.
(b)
Primarily government
and corporate
debt securities
and futures
for purposes
of total
return, managing
fixed income
exposure to
policy allocations, and
duration targets. Investments
include: fixed income
securities and bond
futures generally valued
at closing
prices from
national exchanges,
fixed income
pricing models,
and independent
financial analysts;
and fixed
income commingled
funds valued at unit values provided by the investment managers, which
are based on the fair value hierarchy at May 29, 2016 and May 31, 2015, by asset category were as follows:

   May 29, 2016   May 31, 2015 
In Millions  Level 1   Level 2   Level 3   

Total

Assets

   Level 1   Level 2   Level 3   

Total

Assets

 

Fair value measurement of pension plan

assets:

                

Equity (a)

  $1,543.7    $943.7    $458.0    $2,945.4    $1,634.4    $1,010.3    $542.9    $3,187.6  

Fixed income (b)

   903.8     745.8     —     1,649.6     486.3     1,158.5     —     1,644.8  

Real asset investments (c)

   193.6     160.8     395.0     749.4     124.3     116.7     498.1     739.1  

Other investments (d)

   —     —     0.4     0.4     —     —     0.4     0.4  

Cash and accruals

   195.1     —     —     195.1     186.6     —     —     186.6  

Total fair value measurement of pension

plan assets

  $2,836.2    $1,850.3    $853.4    $5,539.9    $2,431.6    $2,285.5    $1,041.4    $5,758.5  
                                         
Fair value measurement of postretirement benefit plan assets:                

Equity (a)

  $128.9    $124.1    $23.4    $276.4    $134.0    $120.6    $23.7    $278.3  

Fixed income (b)

   18.0     83.4     —     101.4     14.0     73.7     —     87.7  

Real asset investments (c)

   —     30.6     13.8     44.4     0.2     25.7     16.6     42.5  

Other investments (d)

   —     171.3     —     171.3     —     168.9     —     168.9  

Cash and accruals

   8.9     —     —     8.9     5.4     —     —     5.4  
Fair value measurement of postretirement benefit plan assets  $155.8    $409.4    $37.2    $602.4    $153.6    $388.9    $40.3    $582.8  
                                         
(a)Primarily publicly traded common stock and private equity partnerships for purposes of total return and to maintain equity exposure consistent with policy allocations. Investments include: United States and international equity securities, mutual funds, and equity futures valued at closing prices from national exchanges; and commingled funds, privately held securities, and private equity partnerships valued at unit values or net asset values provided by the investment managers, which are based on the fair value of the underlying investments. Various methods are used to determine fair values and may include the cost of the investment, most recent financing, and expected cash flows. For some of these investments, realization of the estimated fair value is dependent upon transactions between willing sellers and buyers.
(b)Primarily government and corporate debt securities and futures for purposes of total return, managing fixed income exposure to policy allocations, and managing duration targets. Investments include: fixed income securities and bond futures generally valued at closing prices from national exchanges, fixed income pricing models, and independent financial analysts; and fixed income commingled funds valued at unit values provided by the investment managers, which are based on the fair value of the underlying investments.
(c)Publicly traded common stock and limited partnerships in the energy and real estate sectors for purposes of total return. Investments include: energy and real estate securities generally valued at closing prices from national exchanges; and commingled funds, private securities, and limited partnerships valued at unit values or net asset values provided by the investment managers, which are generally based on the fair value of the underlying investments.
(d)Global balanced fund of equity, fixed income, and real estate securities for purposes of meeting Canadian pension plan asset allocation policies, and insurance and annuity contracts to provide a stable stream of income for retirees and to fund postretirement medical benefits. Fair values are derived from unit values provided by the investment managers, which are generally based on the fair value of the underlying investments and contract fair values from the providers.

The following table is a roll forward of the Levelunderlying investments.

(c)
Publicly
traded
common
stocks
in
energy,
real
estate,
and
infrastructure
for
the
purpose
of
total
return.
Investments
include:
energy,
real
estate,
and
infrastructure
securities
generally
valued
at
closing
prices
from
national
exchanges,
and
commingled
funds valued at unit values provided by the investment managers, which
are based on the fair value of the underlying investments.
(d)
Insurance and
annuity contracts
to provide
a stable
stream of
income for
pension retirees.
Fair values
are based
on the
fair value
of the underlying investments and contract fair values established by the providers
.
(e)
Primarily limited
partnerships, trust-owned
life insurance,
common collective
trusts, and
certain private
equity securities
that are
measured at fair value using
the net asset value per
share (or its equivalent) practical
expedient and have not been
classified in the
fair value hierarchy.
During fiscal
2022, the
inclusion of
non-observable inputs
in the
pricing of
certain private
equity securities
resulted in
the transfer
of
$
66.3
million into level 3 investments. There were
0
transfers into or out of level 3 investments of our pension and postretirement benefit plans’ assets during the years ended May 29, 2016 and May 31, 2015:

   Fiscal 2016 
In Millions  Balance as of
May 31, 2015		   Net
Transfers
Out		   Net Purchases,
Sales Issuances,
and Settlements		   

Net

Gain
(Loss)

  Balance as of
May 29, 2016		 

Pension benefit plan assets:

         

Equity

   $   542.9     $  —     $  (92.6)    $7.7    $458.0  

Real asset investments

   498.1     —     (72.8)     (30.3)   395.0  

Other investments

   0.4     —     —      —    0.4  

Fair value activity of level 3 pension plan assets

   $1,041.4     $  —     $(165.4)    $(22.6)   $853.4  
                         

Postretirement benefit plan assets:

         

Equity

   $     23.7     $  —     $    (1.2)    $0.9    $23.4  

Real asset investments

   16.6     —     (1.8)     (1.0)   13.8  

Fair value activity of level 3 postretirement benefit plan assets

   $     40.3     $  —     $    (3.0)    $(0.1)   $37.2  
                         

   Fiscal 2015 
In Millions  

Balance as of

May 25, 2014

   

Net
Transfers

Out

   Net Purchases,
Sales Issuances,
and Settlements		   

Net

Gain
(Loss)

   

Balance as of

May 31, 2015

 

Pension benefit plan assets:

          

Equity

   $   568.2     $  —     $(61.0)     $ 35.7      $   542.9  

Real asset investments

   602.9     —     (18.2)     (86.6)     498.1  

Other investments

   0.3     —     0.2      (0.1)     0.4  

Fair value activity of level 3 pension plan assets

   $1,171.4     $  —     $(79.0)     $(51.0)     $1,041.4  
                          

Postretirement benefit plan assets:

          

Equity

   $     21.1     $  —     $   0.3      $   2.3      $     23.7  

Real asset investments

   17.9     —     0.5      (1.8)     16.6  

Fair value activity of level 3 postretirement benefit plan assets

   $     39.0     $  —     $   0.8      $   0.5      $     40.3  
                          

The net change in level 3 assets attributable to unrealized losses at May 29, 2016, was $108.2 million for our pension plan assets and $3.2 million for our postretirement benefit plan assets.

fiscal 2021.

Expected Rate of Return on Plan Assets

Our expected
rate of return
on plan assets
is determined
by our asset
allocation, our
historical long-term
investment performance,
our
estimate of future long-term returns
by asset class (using input from our
actuaries, investment services, and investment
managers), and
long-term inflation
assumptions. We
review this assumption
annually for
each plan; however,
our annual
investment performance
for
one particular year does not, by itself, significantly influence our evaluation.

79
Weighted-average
asset allocations for the past two fiscal years for our defined benefit pension and other postretirement benefit plans are
as follows:

   Defined Benefit
Pension Plans		  Other Postretirement
Benefit Plans		 
   Fiscal Year  Fiscal Year 
   2016  2015  2016  2015 
  

Asset category:

     

United States equities

   30.5%   28.9%   37.2%   38.7% 

International equities

   19.0    18.4    23.4    24.1  

Private equities

   8.3    9.5    3.9    4.1  

Fixed income

   28.6    30.3    29.4    26.3  

Real assets

   13.6    12.9    6.1    6.8  
  

Total

   100.0%   100.0%   100.0%   100.0% 
  

Defined Benefit Pension Plans
Other Postretirement Benefit Plans
Fiscal Year
Fiscal Year
2022
2021
2022
2021
Asset category:
United States equities
12.1
%
15.4
%
27.9
%
28.0
%
International equities
7.8
9.9
13.5
13.9
Private equities
10.4
9.3
15.2
15.1
Fixed income
58.3
54.6
43.4
43.0
Real assets
11.4
10.8
0
0
Total
100.0
%
100.0
%
100.0
%
100.0
%
The investment
objective for
our defined
benefit pension
and other
postretirement benefit
plans is
to secure
the benefit
obligations to
participants
at
a
reasonable
cost
to
us.
Our
goal
is
to
optimize
the
long-term
return
on
plan
assets
at
a
moderate
level
of
risk.
The
defined benefit
pension plan
and other postretirement
benefit plan
portfolios are
broadly diversified
across asset
classes. Within
asset
classes,
the
portfolios
are
further
diversified
across
investment
styles
and
investment
organizations.
For
the
U.S.
defined
benefit
pension
plans,
the
long-term
investment
policy
allocation
is:
13
percent
to
equities
in
the
United
States;
8
percent
to
international
equities;
7
percent to private equities;
62
percent to fixed income; and
10
percent to real assets (real estate,
energy,
and infrastructure).
For other U.S. postretirement benefit plans, is to secure the benefit obligations to participants at a reasonable cost to us. Our goal is to optimize the long-term return on plan assets at a moderate level of risk. The defined benefit pension plan and other postretirement benefit plan portfolios are broadly diversified across asset classes. Within asset classes, the portfolios are further diversified across investment styles and investment organizations. For the defined benefit pension plans, the long-term investment
policy allocation is: 25 allocations are:
27
percent to equities in the United States; 15
13
percent to international equities; 10
15
percent to total private equities; 35 and
45
percent to fixed income; and 15 percent to real assets (real estate, energy, and timber). For other postretirement benefit plans, the long-term investment policy allocations are: 30 percent to equities in the United States; 20 percent to international equities; 10 percent to private equities; 30 percent to fixed income; and 10 percent to real assets (real estate, energy, and timber). income.
The actual allocations to these
asset classes may vary tactically around the long-term policy allocations based
on relative market valuations.

Contributions and Future Benefit Payments

We
do
not
expect
to
be
required
to
make
contributions
to
our
defined
benefit
pension,
other
postretirement
benefit,
and
postemployment benefit
plans in
fiscal 2017. 2023.
Actual fiscal 2017
2023 contributions
could exceed
our current
projections, as
influenced by
our decision
to undertake
discretionary funding
of our benefit
trusts and
future changes
in regulatory
requirements. Estimated
benefit
payments, which reflect expected future service, as appropriate,
are expected to be paid from fiscal 20172023 to 2026fiscal 2032 as follows:

In Millions  

Defined

Benefit

Pension

Plans

   

Other

Postretirement

Benefit Plans

Gross Payments

   

Medicare

Subsidy

Receipts

   

Postemployment

Benefit

Plans

 
  

2017

  $277.7     $  61.3     $  4.8     $22.1  

2018

   287.9     65.5     5.2     20.6  

2019

   297.1     67.1     5.6     19.2  

2020

   306.8     68.3     5.2     17.8  

2021

   316.4     69.2     4.2     17.0  

2022-2026

   1,731.5     355.2     23.2     75.6  
  

In Millions
Defined Benefit
Pension Plans
Other
Postretirement
Benefit Plans
Gross Payments
Postemployment
Benefit Plans
Fiscal 2023
$
349.9
$
36.9
$
25.4
Fiscal 2024
347.9
36.3
20.3
Fiscal 2025
354.3
35.6
18.2
Fiscal 2026
361.7
35.4
16.8
Fiscal 2027
369.1
34.9
16.0
Fiscal 2028-2032
1,945.3
162.4
68.3
Defined Contribution Plans

The
General
Mills
Savings
Plan
is
a
defined
contribution
plan
that
covers
domestic
salaried,
hourly,
nonunion,
and
certain
union
employees.
This plan
is a defined contribution plan that covers domestic salaried, hourly, nonunion, and certain union employees. This plan is a
401(k)
savings plan
that includes
a number
of investment
funds, including
a Company
stock fund
and an
Employee Stock
Ownership Plan
(ESOP). We
sponsor another
money purchase
plan for

certain domestic
hourly employees
with net
assets of $21.0 $
20.6
million as of May 29, 2016,2022, and $21.9 $
22.5
million as of May 31, 2015.30, 2021. We
also sponsor defined contribution plans in many
of
our
foreign
locations.
Our
total
recognized
expense
related
to
defined
contribution
plans
was $61.2
$
90.1
million
in
fiscal
2022,
$
76.1
million in fiscal 2016, $44.0 2021, and $
90.1
million in fiscal 2015, and $44.8 million in fiscal 2014.

2020.

We
match a
percentage of
employee contributions
to the
General Mills
Savings Plan.
The Company
match is
directed to
investment
options
of
the
participant’s
choosing.
The
number
of
shares
of
our
common
stock
allocated
to
participants
in
the
ESOP
was
4.0
million as
of the participant’s choosing. May
29, 2022,
and
4.3
million as
of May
30, 2021.
The number of shares ofESOP’s
only assets
are our
common stock allocated to participants in the ESOP was 6.9 million as of May 29, 2016, and 7.5 million as of May 31, 2015. The ESOP’s only assets are our common stock
and temporary
cash
balances.

The Company stock fund and the ESOP collectively held $711.5
$
443.8
million and $655.6 $
433.0
million of Company common stock as of May 29, 2016
2022, and May 31, 2015,30, 2021, respectively.

80
NOTE 14.15. INCOME TAXES

The
components
of
earnings
before
income
taxes
and
after-tax
earnings
from
joint
ventures
and
the
corresponding
income
taxes
thereon are as follows:
Fiscal Year
In Millions
2022
2021
2020
Earnings before income taxes and after-tax earnings
from joint ventures:
United States
$
2,652.3
$
2,567.1
$
2,402.1
Foreign
557.3
290.3
198.1
Total earnings
before income taxes and after-tax earnings from joint ventures
$
3,209.6
$
2,857.4
$
2,600.2
Income taxes:
Currently payable:
Federal
$
384.2
$
369.8
$
381.0
State and the correspondinglocal
60.8
47.5
55.3
Foreign
79.1
93.0
73.8
Total current
524.1
510.3
510.1
Deferred:
Federal
75.0
117.9
67.8
State and local
18.3
13.6
(56.6)
Foreign
(31.1)
(12.7)
(40.8)
Total deferred
62.2
118.8
(29.6)
Total income
taxes thereon are as follows:

   Fiscal Year 
In Millions  2016   2015   2014 
  

Earnings before income taxes and
after-tax earnings from joint ventures:

      

United States

  $1,941.4    $1,338.6    $2,181.4  

Foreign

   462.2     423.3     473.6  
  

Total earnings before income taxes and
after-tax earnings from joint ventures

  $2,403.6    $1,761.9    $2,655.0  
  

Income taxes:

      

Currently payable:

      

Federal

  $489.8    $392.7    $526.7  

State and local

   30.8     29.3     37.8  

Foreign

   114.0     139.5     146.3  
  

Total current

   634.6     561.5     710.8  
  

Deferred:

      

Federal

   123.0     70.3     159.1  

State and local

   (6.9)    (8.7)    21.3  

Foreign

   4.5     (36.3)    (7.9) 
  

Total deferred

   120.6     25.3     172.5  
  

Total income taxes

  $755.2    $586.8    $883.3  
  

$
586.3
$
629.1
$
480.5
The following table reconciles the United States statutory income tax rate
with our effective income tax rate:

   Fiscal Year 
   2016  2015  2014 
  

United States statutory rate

   35.0%   35.0%   35.0% 

State and local income taxes, net of federal tax benefits

   0.7    0.7    1.4  

Foreign rate differences

   (2.2)   (3.1)   (0.1) 

Repatriation of foreign earnings

   —    4.5    —  

Non-deductible goodwill

   2.6    —    —  

Domestic manufacturing deduction

   (2.0)   (2.9)   (2.3) 

Other, net (a)

   (2.7)   (0.9)   (0.7) 

Effective income tax rate

   31.4%   33.3%   33.3% 
              
(a)Fiscal 2016 includes a 0.6 percent tax benefit related to the divestiture of our business in Venezuela. See Note 3 for additional information.

Fiscal Year
2022
2021
2020
United States statutory rate
21.0
%
21.0
%
21.0
%
State and local income taxes, net of federal tax benefits
2.1
1.7
2.0
Foreign rate differences
(1.1)
0.3
(0.8)
Stock based compensation
(0.6)
(0.4)
(1.1)
Subsidiary reorganization (a)
0
0
(2.0)
Capital loss (b)
(1.7)
0
0
Divestitures, net (c)
(1.2)
0
0
Other, net
(0.2)
(0.6)
(0.6)
Effective income tax rate
18.3
%
22.0
%
18.5
%
(a)
During
fiscal
2020,
we
recorded
a
$
53.1
million
decrease
to
our
deferred
income
tax
liabilities
associated
with
the
reorganization of certain wholly owned subsidiaries.
(b)
During fiscal 2022, we released a
$
50.7
million valuation allowance associated with
our capital loss carryforward expected to
be used against divestiture gains.
(c)
During fiscal 2022, we included certain
non-taxable components of the gain related
to the divestiture of Yoplait
SAS, Yoplait
Marques SNC and Liberté Marques Sàrl.
81
The tax effects of temporary differences that
give rise to deferred tax assets and liabilities are as follows:

In Millions  May 29,
2016		   May 31,
2015		 
  

Accrued liabilities

  $89.9    $98.0  

Compensation and employee benefits

   491.5     536.2  

Unrealized hedges

   —     0.8  

Pension

   322.0     169.0  

Tax credit carryforwards

   4.5     5.6  

Stock, partnership, and miscellaneous investments

   353.6     384.1  

Capital losses

   14.5     6.1  

Net operating losses

   97.9     89.3  

Other

   84.1     74.5  
  

Gross deferred tax assets

   1,458.0     1,363.6  

Valuation allowance

   227.0     215.4  
  

Net deferred tax assets

   1,231.0     1,148.2  
  

Brands

   1,311.7     1,346.3  

Fixed assets

   476.3     446.5  

Intangible assets

   221.8     208.4  

Tax lease transactions

   48.0     50.8  

Inventories

   53.0     59.7  

Stock, partnership, and miscellaneous investments

   476.0     472.5  

Unrealized hedges

   22.6     —  

Other

   21.2     14.2  
  

Gross deferred tax liabilities

   2,630.6     2,598.4  
  

Net deferred tax liability

  $1,399.6    $1,450.2  
  

In Millions
May 29, 2022
May 30, 2021
Accrued liabilities
$
46.2
$
58.5
Compensation and employee benefits
146.7
198.7
Unrealized hedges
0
16.3
Pension
1.5
61.4
Tax credit carryforwards
34.9
22.7
Stock, partnership, and miscellaneous investments
17.9
46.3
Capital losses
61.9
67.3
Net operating losses
178.0
160.5
Other
96.3
93.4
Gross deferred tax assets
583.4
725.1
Valuation
allowance
185.1
229.2
Net deferred tax assets
398.3
495.9
Brands
1,415.2
1,413.8
Fixed assets
392.6
412.7
Intangible assets
201.0
256.2
Tax lease transactions
14.9
18.8
Inventories
27.1
36.2
Stock, partnership, and miscellaneous investments
357.7
364.0
Unrealized hedges
98.7
0
Other
109.4
112.6
Gross deferred tax liabilities
2,616.6
2,614.3
Net deferred tax liability
$
2,218.3
$
2,118.4
We
have established a
valuation allowance against
certain of the
categories of deferred
tax assets described
above as current
evidence
does
not
suggest
we
will
realize
sufficient
taxable
income
of
the
appropriate
character (e.g.
(e.g.,
ordinary
income
versus
capital
gain
income) within the carryforward period to allow us to realize these deferred tax
benefits.

Of the total

Information about our valuation allowance of $227.0 million, the majority relates to a deferred tax asset for losses recorded as part of the follows:
In Millions
May 29, 2022
Pillsbury acquisition in the amount of $167.9 million, $44.1 million relates to various statelosses
$
107.6
State and foreign loss carryforwards and $13.0 million relates to various foreign capital
25.3
Capital loss carryforwards. carryforwards
11.0
Other
41.2
Total
$
185.1
As of May 29, 2016,2022, we believe it is more-likely-than-not that the remainder
of our deferred tax assets are realizable.

We have $113.1 million of

Information about our tax loss carryforwards. Of this amount, $100.5 million iscarryforwards follows
:
In Millions
May 29, 2022
Foreign loss carryforwards
$
179.2
State operating loss carryforwards
8.7
Total tax loss carryforwards
$
187.9
82
Our foreign loss carryforwards. The carryforward periods arecarryforwards expire as follows: $72.6 million do not expire; $4.7 million expire
In Millions
May 29, 2022
Expire in fiscal 20172023 and 2018; and $23.2 million expire2024
$
3.1
Expire in fiscal 20192025 and beyond.beyond
12.6
Do not expire
163.5
Total foreign loss carryforwards
$
179.2
On
March
11,
2021,
the
American
Rescue
Plan
Act
(ARPA)
was
signed
into
law.
The
ARPA
includes
a
provision
expanding
the
limitations on
the deductibility
of certain
executive employee
compensation beginning
in our fiscal
2028. We
do not
currently expect
the ARPA to have
a material impact on our financial results, including our annual estimated effective
tax rate, or on our liquidity.
On March 27, 2020, the Coronavirus Aid, Relief, and
Economic Security Act (CARES Act) was signed
into law. The remaining $12.6 million are state operating loss carryforwards, the majorityCARES
Act and
related
notices
included
several
significant
provisions,
including
delaying
certain
payroll
tax
payments
into
fiscal
2022
and
fiscal
2023.
As of which expire after fiscal 2024.

We

May 29,
2022, we
have not
0
t recognized
a deferred
tax liability
for unremitted
earnings of
approximately $2.0
$
2.3
billion from
our
foreign operations
because we
currently believe
our subsidiaries
have invested or will invest
the undistributed
earnings indefinitely
or the
earnings
will be remitted
in a tax-neutral
transaction. It
is not practicable
for us to
determine the amount
of unrecognized deferred
tax liabilitiesexpense on
these indefinitely
reinvested earnings.
Deferred taxes
are recorded
for earnings
of our
foreign operations
when we
determine that
such earnings
are no
longer indefinitely reinvested. InAll
earnings prior to fiscal 2015, we approved a one-time repatriation of $606.1 million of historical foreign earnings to reduce the economic cost of funding restructuring initiatives2018
remain permanently reinvested. Earnings
from fiscal 2018 and the acquisition of Annie’s. We recorded a discrete tax charge of $78.6 million in fiscal 2015 related to this action. We have previously asserted that our historical foreign earnings later
are
not permanently reinvested and will only be repatriated in a tax-neutral manner, and this one-time repatriation does not change this on-going assertion.

local country withholding taxes are

recorded on earnings each year.
We are
subject to federal income
taxes in the United States
as well as various state, local,
and foreign jurisdictions. A
number of years
may elapse before an uncertain tax position is audited and finally resolved.
While it is often difficult to predict the final outcome or the
timing
of
resolution
of
any
particular
uncertain
tax
position,
we
believe
that
our
liabilities
for
income
taxes
reflect
the
most
likely
outcome.
We
adjust
these
liabilities,
as
well
as
the
related
interest,
in
light
of
changing
facts
and
circumstances.
Settlement
of
any
particular position would usually require the use of cash.

The number
of years
with open
tax audits
varies depending
on the
tax jurisdiction.
Our major
taxing jurisdictions includejurisdiction
is the
United States (federal
(federal and state) and Canada.. Various
tax examinations by United States state taxing
authorities could be conducted for any
open tax year,
which
vary by jurisdiction, but are generally from
3
to
5
years.

The
Internal
Revenue
Service
(IRS)
is
currently
auditing
our
federal
tax
returns
for
fiscal 2013
2016, 2018, and 2014. 2019
.
Several
state
and
foreign
examinations are
currently in
progress. We
do not
expect these
examinations
to result
in a
material impact
on our
results of operations or financial position.

During fiscal 2014, the IRS concluded its field examination of our federal tax returns for fiscal 2011 and 2012. The audit closure and related adjustments did not have a material impact on our results of

operations or financial position. As of May 29, 2016, we We
have effectively settled all issues with the IRS for fiscal years 2012 2015
and prior.

The Brazilian
tax authority,
Secretaria da
Receita Federal
do Brasil (RFB),
has concluded
audits of our
2012
through 2018 tax
return
years. These
audits included
a review
of our
determinations of
amortization of
certain goodwill
arising from
the acquisition
of Yoki
Alimentos
S.A.
The
RFB
has
proposed
adjustments
that
effectively
eliminate
the
goodwill
amortization
benefits
related
to
this
transaction. We
believe we have meritorious defenses and intend to continue to contest the disallowance
for all years.
We
apply a more-likely-than-not
threshold to the
recognition and derecognition
of uncertain tax
positions. Accordingly,
we recognize
the amount of
tax benefit that
has a greater
than 50 percent
likelihood of being
ultimately realized upon
settlement. Future
changes in
judgment related to the expected ultimate resolution of uncertain tax positions
will affect earnings in the period of such change.

83
The following table sets forth
changes in our total gross
unrecognized tax benefit liabilities,
excluding accrued interest,
for fiscal 2016 2022
and
fiscal 2015.
2021.
Approximately $79
$
81
million
of
this
total
in
fiscal 2016
2022
represents
the
amount
that,
if
recognized,
would
affect
our
effective income tax rate in future periods.
This amount differs from the gross unrecognized tax
benefits presented in the table because
certain
of
the
liabilities
below
would
impact
deferred
taxes if
recognized.
We
also
would
record
a
decrease
in
U.S.
federal
income
taxes upon recognition of the state tax benefits included therein.

   Fiscal Year 
In Millions  2016   2015 

 

 

Balance, beginning of year

  $161.1    $150.9  

Tax positions related to current year:

    

Additions

   31.6     34.8  

Tax positions related to prior years:

    

Additions

   23.9     17.4  

Reductions

   (25.7)    (21.8) 

Settlements

   (4.0)    (12.0) 

Lapses in statutes of limitations

   (10.4)    (8.2) 

Balance, end of year

  $176.5    $161.1  
           

Fiscal Year
In Millions
2022
2021
Balance, beginning of year
$
145.3
$
147.9
Tax positions related
to current year:
Additions
21.6
20.1
Tax positions related
to prior years:
Additions
10.4
6.3
Reductions
(5.5)
(7.2)
Settlements
(2.4)
(2.1)
Lapses in statutes of limitations
(8.5)
(19.7)
Balance, end of year
$
160.9
$
145.3
As of
May 29, 2016,
2022, we do
0
t expect
to pay approximately $14.7 million unrecognized
tax benefit
liabilities and
accrued interest
within the
next 12
months. We
are not
able to
reasonably estimate
the timing
of future
cash flows
beyond 12
months due
to uncertainties
in the
timing of
tax audit
outcomes. Our unrecognized tax benefit liabilities and accrued interest within the next 12 months. We are not able to reasonably estimate the timing of future cash flows beyond 12 months due to uncertainties in the timing of tax audit outcomes. The remaining amount of our unrecognized tax liability was classified in other
liabilities.

We
report
accrued
interest
and
penalties
related
to
unrecognized
tax
benefit
liabilities
in
income
tax
expense.
For
fiscal
2022,
we
recognized $
2.0
million of tax-related
net interest and
penalties, and had
$
26.6
million of accrued
interest and penalties related to unrecognized tax benefit liabilities in income tax expense.
as of May 29,
2022. For
fiscal 2016, 2021,
we recognized a net benefit of $2.7
$
2.9
million of
tax-related net
interest and
penalties, and
had $32.1 $
24.9
million of
accrued interest
and penalties as of May 29, 2016. For fiscal 2015, we recognized a net benefit of $0.2 million of tax-related net interest and penalties, and had $35.2 million of accrued interest and penalties as of May 31, 2015.

30, 2021.

NOTE 15. LEASES, OTHER16. COMMITMENTS AND CONTINGENCIES

The Company’s leases are generally

As
of
May
29,
2022,
we
have
issued
guarantees
and
comfort
letters
of
$
147.2
million
for warehouse space
the
debt
and equipment. Rent expense under all operating leases from continuing operations was $189.1 million, $193.5 million, and $189.0 million in fiscal 2016, 2015, and 2014, respectively.

Some operating leases require payment

other
obligations
of property taxes, insurance, and maintenance costs in addition to the rent payments. Contingent and escalation rent in excess of minimum rent payments and sublease income netted in rent expense were insignificant.

Noncancelable future lease commitments are:

In Millions

   

 

Operating

Leases

  

  

   

 

Capital

Leases

  

  

2017

   $107.9     $0.9  

2018

   83.5     0.7  

2019

   67.2     0.6  

2020

   49.6     0.3  

2021

   39.6     0.1  

After 2021

   49.8     0.1  

 

 

Total noncancelable future lease commitments

   $397.6     $2.7  

 

   

Less: interest

     (0.2) 

 

 

Present value of obligations under capital leases

     $2.5  

 

 

These future lease commitments will be partially offset by estimated future sublease receipts of approximately $1 million. Depreciation on capital leases is recorded as depreciation expense in our results of operations.

As of May 29, 2016, we have issued guarantees and comfort letters of $383.2 million for the debt and other obligations of

non-
consolidated subsidiaries, and guarantees and comfort letters of $239.1 million for the debt and other obligations of non-consolidated affiliates, mainly CPW. In addition, off-balance
Off-balance sheet arrangements are generally limited to the future payments under non-cancelable operating leases, which totaled $397.6 millionwere not material as of
May 29, 2016.

2022.

During
fiscal
2020,
we
received
notice
from
the
tax
authorities of
the
State of
São
Paulo,
Brazil
regarding
our
compliance
with
its
state sales tax requirements.
As a result, we
have been assessed additional
state sales taxes, interest,
and penalties. We
believe that we
have meritorious
defenses against
this claim
and will
vigorously defend
our position.
As of
May 29, 2022
, we
are unable
to estimate
any possible loss and have not recorded a loss contingency for this matter.
NOTE 16.17. BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION

We
operate
in
the consumer
packaged
foods
industry. We have three
In
fiscal
2022,
we
completed
a
new
organization
structure
to
streamline
our
global
operations.
This
global
reorganization
required
us
to
reevaluate
our
operating segments by type of customer and geographic region as follows: U.S. Retail, 60.4 percent of
segments.
Under
our fiscal 2016 consolidated net sales; International, 28.0 percent of
new
organization
structure,
our fiscal 2016 consolidated net sales; and Convenience Stores and Foodservice, 11.6 percent of our fiscal 2016 consolidated net sales.

In fiscal 2015, we changed how we assess operating segment performance to exclude the asset and liability remeasurement impact from hyperinflationary economies. This impact is now included in unallocated corporate items. All periods presented have been changed to conform to this presentation.

In fiscal 2015, we realigned certain operating units within our U.S. Retail operating segment. We also changed the name of our Yoplait operating unit to Yogurt and our Big G operating unit to Cereal. Frozen Foods transitioned into Meals and Baking Products. Small Planet Foods transitioned into Snacks, Cereal, and Meals. The Yogurt operating unit was unchanged. We revised the amounts previously reported in the net sales and net sales percentage change by operating unit within our U.S. Retail segment to conform to the new operating unit structure. These realignments had no effect on previously reported consolidated net sales, operating segments’ net sales, operating profit, segment operating profit, net earnings attributable to General Mills, or EPS. In addition, results from the acquired Annie’s business are included in the Meals and Snacks operating units.

Our

chief operating decision maker continues to assessassesses performance
and makemakes decisions about resources to be allocated to
our operating segments at as
follows: North America Retail; International; Pet; and North America
Foodservice.
We
have
restated
our
net
sales
by
segment
and
segment
operating
profit
to
reflect
our
new
operating
segments.
These
segment
changes
had
no
effect
on
previously
reported
consolidated
net
sales,
operating
profit,
net
earnings
attributable
to
General
Mills,
or
earnings per share.
Our
North
America
Retail
operating
segment
includes
convenience
store
businesses
from
our
former
Convenience
Stores
&
Foodservice
segment.
Within
our
North
America
Retail
operating
segment,
our
former
U.S.
Cereal
operating
unit
and
U.S.
Yogurt
operating
unit
have
been
combined
into
the
U.S.
Morning
Foods
operating
unit.
Additionally,
the
U.S.
Meals
&
Baking
Solutions
operating unit
combines the
former U.S.
Meals &
Baking operating
unit with
certain businesses
from the
U.S. Retail, Snacks
operating unit.
The
Canada
operating
unit
excludes
Canada
foodservice
businesses
which
are
now
included
in
our
North
America
Foodservice
operating
segment. The
resulting
North
America
Foodservice
operating
segment
exclusively includes
our
foodservice business.
Our
International
operating
segment
combines
our
former
Europe
&
Australia
and Convenience Stores and Foodservice
Asia
&
Latin
America
operating
segments.
Our
Pet
operating segment level.

is unchanged.

Our U.S.North America Retail
operating segment reflects business
with a wide variety of
grocery stores, mass merchandisers,
membership
stores,
natural
food
chains,
drug,
dollar
and
discount
chains,
convenience
stores,
and
e-commerce
grocery
providers.
Our
product
84
categories
in
this
business
segment
include
ready-to-eat
cereals,
refrigerated
yogurt,
soup,
meal
kits,
refrigerated
and
frozen
dough
products,
dessert
and
baking
mixes,
frozen
pizza
and
pizza
snacks,
snack
bars,
fruit
snacks,
savory
snacks,
and
a
wide
variety
of
organic products
including ready-to-eat
cereal, frozen
and discount chains, and e-commerce grocery providers operating throughout the United States. Our product categories in this business segment are ready-to-eat cereals, refrigerated yogurt, soup, shelf-stable vegetables,
meal kits, refrigerated and frozen dough products, dessert and baking mixes, frozen pizza and pizza fruit
snacks, grain, fruit and savory snacks, and a wide variety of organic products including meal kits, granola snack
bars, and cereal.

refrigerated
yogurt.
Our
International
operating
segment
consists
of
retail
and
foodservice
businesses
outside
of
the
United States.
States
and
Canada.
Our
product categories include ready-to-eat cereals, shelf stable and frozen vegetables, meal kits, refrigerated and frozen dough products, dessert and baking mixes, frozen pizza snacks, refrigerated yogurt, grain and fruit snacks, and super-premium ice cream and frozen desserts. We also sell super-premium
ice cream and frozen desserts, meal kits, salty snacks,
snack bars, dessert and baking mixes,
and
shelf
stable
vegetables.
We
also
sell
super-premium
ice
cream
and
frozen
desserts
directly
to
consumers
through
owned
retail
shops. Our
International segment
also includes
products manufactured
in the United
States for
export, mainly
to Caribbean
and Latin
American markets, as well as
products we manufacture
for sale to our international
joint ventures. Revenues from
export activities and franchise fees are
reported in the region or country where the end customer is located.

In our Convenience Stores

Our Pet operating segment includes
pet food products sold primarily in the
United States and Foodservice segment our major Canada in national
pet superstore chains,
e-commerce retailers,
grocery stores,
regional pet
store chains,
mass merchandisers,
and veterinary
clinics and
hospitals. Our
product
categories include dog and cat food (dry
foods, wet foods, and treats) made
with whole meats, fruits, vegetables and
other high-quality
natural
ingredients.
Our
tailored
pet
product
offerings
address
specific
dietary,
lifestyle,
and
life-stage
needs
and
span
different
product types, diet types, breed sizes for dogs, lifestages, flavors, product
functions, and textures and cuts for wet foods.
Our
North
America
Foodservice
segment
consists
of
foodservice
businesses
in
the
United
States
and
Canada.
Our
major
product
categories
in
our
North
America
Foodservice
operating
segment
are
ready-to-eat
cereals,
snacks,
refrigerated
yogurt,
frozen
meals,
unbaked and
fully baked
frozen dough products,
baking mixes,
and baking mixes. bakery
flour.
Many products we
sell are branded
to the consumer
and nearly
all are
branded to
our customers.
We
sell to
distributors and
operators in
many customer
channels including
foodservice, convenience stores,
vending, and supermarket bakeries. Substantially all of this segment’s operations are located in the United States.

Operating profit
for these
segments excludes
unallocated corporate
items, gain
or loss
on divestitures,
and restructuring,
impairment,
and
other
exit
costs.
Unallocated
corporate
items
include
corporate
overhead
expenses,
variances
to
planned
North
American
employee
benefits
and
incentives,
certain
charitable
contributions,
restructuring
initiative
project-related
costs,
gains
and
losses
on
corporate investments,
and other exit costs. Unallocated corporate items include corporate overhead expenses, variances to planned domestic employee benefits and incentives, contributions to the General Mills Foundation, asset and liability remeasurement impact of hyperinflationary economies, restructuring initiative project-related costs, and other
items that
are not
part of
our measurement
of segment
operating performance.
These include
gains
and
losses
arising
from
the
revaluation
of
certain
grain
inventories
and
gains
and
losses
from
mark-to-market
valuation
of
certain
commodity positions
until passed back
to our operating
segments. These items
affecting operating
profit are
centrally managed
at the
corporate
level
and
are
excluded
from
the
measure
of
segment
profitability
reviewed
by
executive
management.
Under
our
supply
chain organization, our manufacturing,
warehouse, and distribution activities are substantially integrated
across our operations in order
to maximize
efficiency
and productivity.
As a
result, fixed
assets and
depreciation and
amortization expenses
are neither
maintained
nor available by operating segment.

Our operating segment results were as follows:

   Fiscal Year 
In Millions  2016   2015   2014 

Net sales:

      

U.S. Retail

  $10,007.1    $10,507.0    $10,604.9  

International

   4,632.2     5,128.2     5,385.9  

Convenience Stores and Foodservice

   1,923.8     1,995.1     1,918.8  

Total

  $16,563.1    $17,630.3    $17,909.6  

Operating profit:

      

U.S. Retail

  $2,179.0    $2,159.3    $2,311.5  

International

   441.6     522.6     535.1  

Convenience Stores and Foodservice

   378.9     353.1     307.3  

Total segment operating profit

   2,999.5     3,035.0     3,153.9  

Unallocated corporate items

   288.9     413.8     258.4  

Divestitures (gain)

   (148.2)    —     (65.5) 

Restructuring, impairment, and other exit costs

   151.4     543.9     3.6  

Operating profit

  $2,707.4    $2,077.3    $2,957.4  
                

Fiscal Year
In Millions
2022
2021
2020
Net sales:
North America Retail
$
11,572.0
$
11,250.0
$
10,978.1
International
3,315.7
3,656.8
3,365.1
Pet
2,259.4
1,732.4
1,694.6
North America Foodservice
1,845.7
1,487.8
1,588.8
Total
$
18,992.8
$
18,127.0
$
17,626.6
Operating profit:
North America Retail
$
2,699.7
$
2,725.9
$
2,708.9
International
232.0
236.6
132.5
Pet
470.6
415.0
390.7
North America Foodservice
255.5
203.3
255.3
Total segment operating
profit
$
3,657.8
$
3,580.8
$
3,487.4
Unallocated corporate items
402.6
212.1
509.1
Divestitures (gain) loss
(194.1)
53.5
0
Restructuring, impairment, and other exit (recoveries) costs
(26.5)
170.4
24.4
Operating profit
$
3,475.8
$
3,144.8
$
2,953.9
85
Net sales for our North America Retail operating units were as follows:
Fiscal Year
In Millions
2022
2021
2020
U.S. Meals & Baking Solutions
$
4,023.8
$
4,042.2
$
3,869.3
U.S. Morning Foods
3,370.9
3,314.0
3,292.0
U.S. Snacks
3,191.4
2,940.5
2,919.7
Canada
985.9
953.3
897.1
Total
$
11,572.0
$
11,250.0
$
10,978.1
Net sales by class of similar products were as follows:

   Fiscal Year 
In Millions  2016   2015   2014 
  

Snacks

  $3,297.2    $3,392.0    $3,232.5  

Convenient meals

   2,779.0     2,810.3     2,844.2  

Yogurt

   2,760.9     2,938.3     2,964.7  

Cereal

   2,731.5     2,771.3     2,860.1  

Dough

   1,820.0     1,877.0     1,890.2  

Baking mixes and ingredients

   1,704.3     1,867.7     1,996.4  

Super-premium ice cream

   731.2     769.5     756.6  

Vegetables

   532.3     937.3     1,014.7  

Other

   206.7     266.9     350.2  

Total

  $16,563.1    $17,630.3    $17,909.6  
                

Fiscal Year
In Millions
2022
2021
2020
Snacks
$
3,960.9
$
3,574.2
$
3,529.7
Cereal
2,998.1
2,868.9
2,874.1
Convenient meals
2,988.5
3,030.2
2,814.3
Pet
2,260.1
1,732.4
1,694.6
Dough
1,986.3
1,866.1
1,801.1
Baking mixes and ingredients
1,843.6
1,695.5
1,674.2
Yogurt
1,714.9
2,074.8
2,056.6
Super-premium ice cream
782.2
819.7
718.1
Other
458.2
465.2
463.9
Total
$
18,992.8
$
18,127.0
$
17,626.6
The following table providestables provide financial information by geographic area:

   Fiscal Year 
In Millions  2016   2015   2014 

Net sales:

      

United States

  $11,930.9    $12,501.8    $12,523.0  

Non-United States

   4,632.2     5,128.5     5,386.6  

Total

  $16,563.1    $17,630.3    $17,909.6  
                

In Millions  May 29,
2016		   May 31,
2015		 

Cash and cash equivalents:

    

United States

  $118.5    $22.9  

Non-United States

   645.2     311.3  

Total

  $763.7    $334.2  
           

In Millions  May 29,
2016		   May 31,
2015		 

Land, buildings, and equipment:

    

United States

  $2,755.1    $2,727.5  

Non-United States

   988.5     1,055.8  

Total

  $3,743.6    $3,783.3  
           

Fiscal Year
In Millions
2022
2021
2020
Net sales:
United States
$
14,691.2
$
13,496.9
$
13,364.5
Non-United States
4,301.6
4,630.1
4,262.1
Total
$
18,992.8
$
18,127.0
$
17,626.6
In Millions
May 29, 2022
May 30, 2021
Cash and cash equivalents:
United States
$
46.0
$
817.9
Non-United States
523.4
687.3
Total
$
569.4
$
1,505.2
In Millions
May 29, 2022
May 30, 2021
Land, buildings, and equipment:
United States
$
2,675.2
$
2,714.7
Non-United States
718.6
892.1
Total
$
3,393.8
$
3,606.8
86
NOTE 17.18. SUPPLEMENTAL
INFORMATION

The components of certain Consolidated Balance Sheet accounts are as follows:

In Millions  May 29,
2016		   May 31,
2015		 

Receivables:

    

Customers

  $1,390.4    $1,412.0  

Less allowance for doubtful accounts

   (29.6)    (25.3) 

Total

  $1,360.8    $1,386.7  
           

In Millions  May 29,
2016		   May 31,
2015		 

Inventories:

    

Raw materials and packaging

  $397.3    $390.8  

Finished goods

   1,163.1     1,268.6  

Grain

   72.6     95.7  

Excess of FIFO over LIFO cost (a)

   (219.3)    (214.2) 

Total

  $1,413.7    $1,540.9  
           
(a)Inventories of $841.0 million as of May 29, 2016, and $867.5 million as of May 31, 2015, were valued at LIFO. During fiscal 2015, LIFO inventory layers were reduced. Results of operations were not materially affected by these liquidations of LIFO inventory. The difference between replacement cost and the stated LIFO inventory value is not materially different from the reserve for the LIFO valuation method.

In Millions  May 29,
2016		   May 31,
2015		 

Prepaid expenses and other current assets:

    

Other receivables

  $159.3    $148.8  

Prepaid expenses

   177.9     169.3  

Derivative receivables, primarily commodity-related

   44.6     80.9  

Grain contracts

   1.8     3.3  

Miscellaneous

   15.4     21.5  

Total

  $399.0    $423.8  
           

In Millions  May 29,
2016		   May 31,
2015		 

Land, buildings, and equipment:

    

Land

  $92.9    $96.0  

Buildings

   2,236.0     2,272.7  

Buildings under capital lease

   0.3     0.3  

Equipment

   5,945.6     6,091.1  

Equipment under capital lease

   3.0     9.8  

Capitalized software

   523.0     499.0  

Construction in progress

   702.7     622.2  

Total land, buildings, and equipment

   9,503.5     9,591.1  

Less accumulated depreciation

   (5,759.9)    (5,807.8) 

Total

  $3,743.6    $3,783.3  
           

In Millions  May 29,
2016		   May 31,
2015		 

Other assets:

    

Investments in and advances to joint ventures

  $518.9    $530.6  

Pension assets

   90.9     138.2  

Exchangeable note with related party

   12.7     30.7  

Life insurance

   26.3     26.6  

Miscellaneous

   102.9     85.1  

Total

  $751.7    $811.2  
           

In Millions  May 29,
2016		   May 31,
2015		 

Other current liabilities:

    

Accrued trade and consumer promotions

  $563.7    $564.7  

Accrued payroll

   386.4     361.8  

Dividends payable

   23.8     27.9  

Accrued taxes

   110.5     20.7  

Accrued interest, including interest rate swaps

   90.4     91.8  

Grain contracts

   5.5     7.8  

Restructuring and other exit costs reserve

   76.6     120.8  

Derivative payable

   35.6     122.9  

Miscellaneous

   302.5     271.5  

Total

  $1,595.0    $1,589.9  
           

In Millions  May 29,
2016		   May 31,
2015		 

Other noncurrent liabilities:

    

Accrued compensation and benefits, including obligations for underfunded other postretirement benefit and postemployment benefit plans

  $1,755.0    $1,451.4  

Accrued taxes

   204.0     202.5  

Miscellaneous

   128.6     90.9  

Total

  $2,087.6    $1,744.8  
           

In Millions
May 29, 2022
May 30, 2021
Receivables:
Customers
$
1,720.4
$
1,674.5
Less allowance for doubtful accounts
(28.3)
(36.0)
Total
$
1,692.1
$
1,638.5
In Millions
May 29, 2022
May 30, 2021
Inventories:
Finished goods
$
1,634.7
$
1,506.9
Raw materials and packaging
532.0
411.9
Grain
164.0
111.2
Excess of FIFO over LIFO cost (a)
(463.4)
(209.5)
Total
$
1,867.3
$
1,820.5
(a)
Inventories
of
$
1,127.1
million
as
of
May
29,
2022,
and
$
1,139.7
million
as
of
May
30,
2021,
were
valued
at
LIFO.
The
difference between replacement
cost and the stated LIFO
inventory value is not materially
different from the
reserve for the LIFO
valuation method.
In Millions
May 29, 2022
May 30, 2021
Prepaid expenses and other current assets:
Marketable investments
$
249.8
$
360.0
Prepaid expenses
213.5
221.7
Other receivables
182.8
139.1
Derivative receivables
86.1
37.5
Grain contracts
28.7
12.0
Miscellaneous
41.2
20.0
Total
$
802.1
$
790.3
In Millions
May 29, 2022
May 30, 2021
Assets held for sale:
Goodwill
$
130.0
$
0
Inventories
22.9
0
Equipment
6.0
0
Total
$
158.9
$
0
In Millions
May 29, 2022
May 30, 2021
Land, buildings, and equipment:
Equipment
$
6,491.7
$
6,732.7
Buildings
2,444.8
2,542.7
Capitalized software
717.8
718.5
Construction in progress
492.8
395.7
Land
55.1
67.4
Equipment under finance lease
7.8
7.8
Buildings under finance lease
0.3
0.3
Total land, buildings,
and equipment
10,210.3
10,465.1
Less accumulated depreciation
(6,816.5)
(6,858.3)
Total
$
3,393.8
$
3,606.8
87
In Millions
May 29, 2022
May 30, 2021
Other assets:
Investments in and advances to joint ventures
$
513.8
$
566.4
Right of use operating lease assets
336.8
378.6
Pension assets
52.6
30.0
Life insurance
17.5
18.6
Miscellaneous
307.4
274.0
Total
$
1,228.1
$
1,267.6
In Millions
May 29, 2022
May 30, 2021
Other current liabilities:
Accrued trade and consumer promotions
$
474.4
$
580.9
Accrued payroll
435.6
434.4
Current portion of operating lease liabilities
106.7
111.2
Accrued interest, including interest rate swaps
70.1
80.0
Restructuring and other exit costs reserve
36.8
148.8
Accrued taxes
31.4
37.4
Dividends payable
25.3
24.1
Derivative payable, primarily commodity-related
19.9
39.2
Grain contracts
3.0
0.9
Miscellaneous
348.8
330.3
Total
$
1,552.0
$
1,787.2
In Millions
May 29, 2022
May 30, 2021
Other non-current liabilities:
Accrued compensation and benefits, including obligations for underfunded
other
postretirement benefit and postemployment benefit plans
$
360.8
$
707.7
Non-current portion of operating lease liabilities
248.3
283.2
Accrued taxes
233.0
215.6
Miscellaneous
87.0
86.2
Total
$
929.1
$
1,292.7
Certain Consolidated Statements of Earnings amounts are as follows:

   Fiscal Year 
In Millions  2016   2015   2014 

Depreciation and amortization

  $608.1    $588.3    $585.4  

Research and development expense

   222.1     229.4     243.6  

Advertising and media expense (including production and communication costs)

   754.4     823.1     869.5  
                

Fiscal Year
In Millions
2022
2021
2020
Depreciation and amortization
$
570.3
$
601.3
$
594.7
Research and development expense
243.1
239.3
224.4
Advertising and media expense (including production and
communication costs)
690.1
736.3
691.8
The components of interest, net are as follows:

   Fiscal Year 
Expense (Income), in Millions  2016   2015   2014 

Interest expense

  $319.6    $335.5    $323.4  

Capitalized interest

   (7.7)    (6.9)    (4.9) 

Interest income

   (8.1)    (13.2)    (16.1) 

Interest, net

  $303.8    $315.4    $302.4  
                

Fiscal Year
Expense (Income), in Millions
2022
2021
2020
Interest expense
$
387.2
$
430.9
$
475.1
Capitalized interest
(3.8)
(3.2)
(2.6)
Interest income
(3.8)
(7.4)
(6.0)
Interest, net
$
379.6
$
420.3
$
466.5
88
Certain Consolidated Statements of Cash Flows amounts are as follows:

   Fiscal Year 
In Millions  2016   2015   2014 

Cash interest payments

  $292.0    $305.3    $288.3  

Cash paid for income taxes

   533.8     562.6     757.2  
                

Fiscal Year
In Millions
2022
2021
2020
Cash interest payments
$
357.8
$
412.5
$
418.5
Cash paid for income taxes
545.3
636.1
403.3
NOTE 18.19. QUARTERLY
DATA
(UNAUDITED)

Summarized quarterly data for fiscal 20162022 and fiscal 20152021 follows:

In Millions, Except Per

    Share Amounts

  First Quarter   Second Quarter   Third Quarter   Fourth Quarter 
  Fiscal Year   Fiscal Year   Fiscal Year   Fiscal Year 
  2016   2015   2016   2015   2016   2015   2016   2015 

Net sales

  $4,207.9    $4,268.4    $4,424.9    $4,712.2    $4,002.4    $4,350.9    $3,927.9    $4,298.8  

Gross margin

   1,554.6     1,438.7     1,540.6     1,619.1     1,357.5     1,375.9     1,376.8     1,515.5  

Net earnings attributable

to General Mills

   426.6     345.2     529.5     346.1     361.7     343.2     379.6     186.8  

EPS:

                

Basic

  $0.71    $0.56    $0.88    $0.58    $0.61    $0.57    $0.63    $0.31  

Diluted

  $0.69    $0.55    $0.87    $0.56    $0.59    $0.56    $0.62    $0.30  

Dividends per share

  $0.44    $0.41    $0.44    $0.41    $0.44    $0.41    $0.46    $0.44  

Market price of common stock:

                

High

  $59.55    $55.56    $59.23    $53.82    $60.14    $55.11    $65.36    $57.14  

Low

  $54.36    $50.15    $55.41    $48.86    $54.12    $51.13    $58.85    $51.70  
                                         

During

First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
In Millions, Except Per
Share Amounts
2022
2021
2022
2021
2022
2021
2022
2021
Net sales
$
4,539.9
$
4,364.0
$
5,024.0
$
4,719.4
$
4,537.7
$
4,520.0
$
4,891.2
$
4,523.6
Gross margin
1,597.4
1,590.4
1,631.2
1,721.1
1,403.7
1,553.9
1,769.9
1,582.9
Net earnings attributable to
General Mills
627.0
638.9
597.2
688.4
660.3
595.7
822.8
416.8
EPS:
Basic
$
1.03
$
1.04
$
0.98
$
1.12
$
1.09
$
0.97
$
1.36
$
0.68
Diluted
$
1.02
$
1.03
$
0.97
$
1.11
$
1.08
$
0.96
$
1.35
$
0.68
In the fourth
quarter of fiscal 2016,
2022, we soldrecorded
an additional gain
on the sale
of our General Mills de Venezuela CA subsidiaryinterests
in Yoplait
SAS, Yoplait
Marques SNC
and Liberté
Marques Sàrl
of $
14.9
million and
an additional
gain on
the sale
of our
European dough
businesses of
$
9.2
million. We
also recorded
$
16.0
million of
transaction costs
primarily
related to
the sale
of our
interests in
Yoplait
SAS, Yoplait
Marques SNC,
and
Liberté
Marques
Sàrl,
the sale
of
our
European
dough
businesses,
the
definitive
agreements
to
sell our
Helper
main meals
and
Suddenly
Salad
side
dishes
business,
and
the
definitive
agreement
to
acquire
TNT
Crust.
We
also
recorded
a
$
34.0
million
loss
associated with the
valuation of a third party and exited our business in Venezuela. As a result of this transaction, corporate
investment. In addition,
we recorded a pre-tax $
34.0
million reduction related
to our restructuring
reserve.
In
the
fourth
quarter
of
fiscal
2021,
we
approved
restructuring
actions
designed
to
better
align
our
organizational
structure
and
resources with
strategic initiatives
and recorded
$
157.3
million of
charges. We
recorded a
loss on
the sale
of $37.6 million. In addition, we sold our General Mills Argentina S.A. foodservice
Laticínios Carolina
business in Argentina to a third party and recorded a pre-tax lossBrazil of $14.8 million.

The effective tax rate for the fourth quarter of fiscal 2016 was 19.2 percent, primarily driven by tax credits and the impact of the divestiture of our business in Venezuela.

During the fourth quarter of fiscal 2015, we made a strategic decision to redirect certain resources supporting our Green Giant business in our U.S. Retail segment to other businesses within the segment. Therefore, we recorded a $260 $

53.5
million impairment charge in the fourth quarter of fiscal 2015 related to theGreen Giant brand intangible asset. See Note 6 for additional information.

During2021.

In the fourth quarter of fiscal 2015, 2021,
we approved a one-time repatriation of $606.1 recorded $
9.5
million of foreign earnings
transaction
costs
related
to
our
non-binding
memorandum
of
understanding
to
sell
our
interests
in
Yoplait
SAS,
Yoplait
Marques
SNC, and recorded a discrete income tax charge
Liberté
Marques
Sàrl and
our planned
acquisition
of $78.6 million.

Glossary

Accelerated depreciation associated with restructured assets.The increase Tyson

Foods’ pet
treats business.
We
also
recorded
an $
8.8
million
gain
related to
indirect taxes
in depreciation expense caused by updating the salvage value Brazil
and shortening the useful life of depreciable fixed assets an
$
11.2
million loss
related
to coincide with the end of production under an approved restructuring plan, but only if impairment is not present.

AOCI. deferred

taxes on
amendments
to reorganize
certain
U.S.
retiree health and welfare benefit plans.
89
Glossary
AOCI.
Accumulated other comprehensive income (loss).

Adjusted average total capital.Notes payable, long-term debt including current portion, redeemable diluted EPS.
Diluted EPS adjusted for certain items affecting year-to-year
comparability.
Adjusted
EBITDA.
The
calculation
of
earnings
before
income
taxes
and
after-tax
earnings
from
joint
ventures,
net
interest, noncontrolling interests,
and
depreciation and stockholders’ equity excluding AOCI, andamortization adjusted for certain after-tax earnings adjustments are used to calculate adjusted return on average total capital. The average is calculated using the average of the beginning of fiscal year and end of fiscal year Consolidated Balance Sheet amounts for these line items.

items affecting

year-to-year comparability.
Adjusted operating profit margin.profit.
Operating profit adjusted for certain items affecting year-over-year year-to-year
comparability.
Adjusted
operating
profit
margin.
Operating
profit
adjusted
for
certain
items
affecting
year-to-year
comparability,
divided by
net
sales.

Adjusted return on average total capital.Net earnings including earnings attributable to redeemable and noncontrolling interests, excluding after-tax net interest, and adjusted for certain items affecting year-over-year comparability, divided by adjusted average total capital.

Average total capital.Notes payable, long-term debt including current portion, redeemable interest, noncontrolling interests, and stockholders’ equity are used to calculate return on average total capital. The average is calculated using the average of the beginning of fiscal year and end of fiscal year Consolidated Balance Sheet amounts for these line items.

Constant currency.
Financial results
translated to U.S.
United States
dollars using
constant foreign
currency exchange
rates based
on the
rates
in
effect
for
the
comparable
prior-year
period
.
To
present
this
information,
current
period
results
for
entities
reporting
in
currencies other
than United
States dollars
are translated
into United
States dollars
at the
average exchange
rates in effect for the comparable prior-year period. To present this information, current period results for entities reporting in currencies other than United States dollars are translated into United States dollars at the average exchange rates in
effect during
the
corresponding
period
of
the
prior
fiscal
year,
rather
than
the
actual
average
exchange
rates
in
effect
during
the
current
fiscal year.
year
.
Therefore,
the
foreign
currency
impact
is
equal
to
current
year
results
in
local
currencies
multiplied
by
the
change
in
the
average
foreign currency exchange rate between the current fiscal period and the corresponding
period of the prior fiscal year.

Core working capital.
Accounts receivable plus inventories less accounts payable, all as of the last day of our fiscal
year.

COVID-19.
Coronavirus disease (COVID-19)
is an infectious
disease caused by
a newly discovered
coronavirus
.
In March 2020,
the
World Health
Organization declared COVID-19 a global pandemic.
Derivatives.
Financial instruments such
as futures, swaps,
options, and forward
contracts that we
use to manage
our risk arising
from
changes in commodity prices, interest rates, foreign exchange rates, and
equity prices.

Earnings
before
interest,
taxes,
depreciation
and
amortization
(EBITDA
)
.
The
calculation
of earnings
before
income taxes
and
after-tax earnings from joint ventures, net interest, depreciation
and amortization.
Euribor.
European Interbank Offered Rate.

Fair value
hierarchy.
For purposes
of fair
value measurement,
we categorize
assets and
liabilities into
one of
three levels
based on
the assumptions
(inputs) used
in valuing
the asset or liability.
liability
.
Level 1 provides
the most reliable
measure of
fair value, while
Level 3
generally requires significant management judgment. judgment
.
The three levels are defined as follows:

Level  1:      Unadjusted quoted prices in active markets for identical assets or liabilities.

Level  2:      Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

Level  3:      Unobservable inputs reflecting management’s
Level 1:
Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2:
Observable inputs
other than quoted
prices included in
Level 1, such
as quoted prices
for similar assets
or liabilities
in active markets or quoted prices for identical
assets or liabilities in inactive markets.
Level 3:
Unobservable inputs reflecting management’s
assumptions about the inputs used in pricing the asset or liability.

Fixed charge coverage ratio.The sum of earnings before income taxes and fixed charges (before tax), divided by the sum ofinputs used in pricing the fixed charges (before tax) and interest.

asset or liability.

Free cash flow.
Net cash provided by operating activities less purchases of land, buildings, and equipment.

equipment

.
Free
cash
flow
conversion
rate.
Free
cash
flow
divided
by
our
net
earnings,
including
earnings
attributable
to
redeemable
and
noncontrolling interests adjusted for certain items affecting year-over-year year-to-year
comparability.

Generally
accepted accounting
principles (GAAP).
Guidelines, procedures,
and practices
that we
are required
to use
in recording
and reporting accounting information in our financial statements.

Goodwill.
The difference
between the purchase
price of acquired
companies plus the fair
value of any noncontrolling redeemable
and redeemable noncontrolling
interests and the related fair values of net assets acquired.

Gross margin.
Net sales less cost of sales.

90
Hedge accounting.
Accounting for qualifying
hedges that allows changes in
a hedging instrument’s
fair value to offset
corresponding
changes in
the hedged
item in
the same
reporting period. period
.
Hedge accounting
is permitted
for certain
hedging instruments
and hedged
items
only
if
the
hedging
relationship
is
highly
effective,
and
only
prospectively
from
the
date
a
hedging
relationship
is
formally
documented.
Holistic Margin Management
(HMM).
Company-wide initiative to
use productivity savings, mix
management,
and only prospectively from the date a hedging relationship is formally documented.

price realization

to offset input cost inflation, protect margins
,
and generate funds to reinvest in sales-generating activities.
Interest
bearing
instruments.
Notes
payable,
long-term
debt,
including
current
portion,
cash
and
cash
equivalents,
and
certain
interest bearing investments classified within prepaid expenses and other current
assets and other assets.
LIBOR.
London Interbank Offered Rate.

Mark-to-market.
The act of determining a value for
financial instruments, commodity contracts, and
related assets or liabilities based
on the current market price for that item.

Net debt.
Long-term debt, current portion of long-term debt, and notes payable,
less cash and cash equivalents.
Net debt-to-adjusted EBITDA ratio.
Net debt divided by Adjusted EBITDA.
Net
mark-to-market
valuation of
certain
commodity
positions.
Realized
and
unrealized
gains
and
losses on
derivative
contracts
that will be allocated to segment operating profit when the exposure we are hedging
affects earnings.

Net price realization.
The impact of list and promoted price changes, net of trade and other price
promotion costs.

Net realizable
value.
The estimated
selling price
in the
ordinary course
of business,
less reasonably
predictable costs
of completion,
disposal, and transportation.
Noncontrolling interests.
Interests of consolidated subsidiaries held by third parties.

Notional principal amount.
The principal amount on which fixed-rate or floating-rate interest payments
are calculated.

OCI.
Other comprehensive income (loss).

Operating
cash
flow
conversion
rate.
Net
cash
provided
by
operating
activities,
divided
by
net
earnings,
including
earnings
attributable to redeemable and noncontrolling interests.

Operating cash flow to net debt ratio.
Net debt divided by cash provided by operating activities, divided by the sum of notes payable and long-term debt, including the current portion.

activities.

Organic net
sales growth. growth.
Net sales growth
adjusted for
foreign currency
translation, as
well as
acquisitions, divestitures,
and a
53
rd
week impact, when applicable.

Project-related costs. costs.
Costs incurred related to our restructuring initiatives not included in restructuring
charges.

Redeemable
interest.
Interest
of
consolidated
subsidiaries
held
by
a
third
party
that
can
be
redeemed
outside
of
our
control
and
therefore cannot be classified as a noncontrolling interest in equity.

Reporting unit.
An operating segment or a business one level below an operating
segment.

Return

Strategic
Revenue
Management
(SRM).
A
company-wide
capability
focused
on average total capital.Net earnings
generating
sustainable
benefits
from
net
price
realization
and
mix
by
identifying
and
executing
against
specific
opportunities
to
apply
tools
including earnings attributable to redeemable
pricing,
sizing,
mix
management, and noncontrolling interests, excluding after-tax net interest, divided by average total capital.

Segment operating profit margin.Segment operating profit divided by net sales for the segment.

SKU. Shop keeping unit.

promotion optimization across each of our businesses.

Supply chain
input costs.
Costs incurred
to produce
and deliver
product,
including costs
for
ingredients
and
conversion, inventory
management, logistics, and warehousing.

Total
debt.
Notes payable and long-term debt, including current portion.

Translation
adjustments.
The impact
of the conversion
of our foreign
affiliates’ financial
statements to U.S.United
States dollars
for the
purpose of consolidating our financial statements.

91
Variable
interest
entities (VIEs).
A legal
structure
that is
used for
business purposes
that either
(1) does
not have
equity investors
that have voting
rights and share in
all the entity’s
profits and losses or
(2) has equity
investors that do not
provide sufficient financial
resources to support the entity’s activities.

Working capital.
Current assets and current liabilities, all as of the last day of our fiscal year.

ITEM 9Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

ITEM 9 - Changes in and Disagreements With
Accountants on Accounting and Financial Disclosure
None.

ITEM 9AControls and Procedures

ITEM 9A - Controls and Procedures
We,
under the
supervision and
with the
participation of
our management,
including our
Chief Executive
Officer and
Chief Financial
Officer,
have
evaluated
the
effectiveness
of
the design
and
operation
of
our
disclosure
controls
and
procedures (as
(as
defined
in
Rule
13a-15(e) under the 1934 Act). Based on that evaluation, our Chief Executive
Officer and Chief Financial Officer have concluded
that,
as of May 29, 2016,
2022, our disclosure
controls and procedures
were effective
to ensure that information
required to be disclosed
by us in
reports
that
we
file
or
submit
under
the
1934
Act
is
(1)
recorded,
processed,
summarized,
and
reported
within
the
time
periods
specified
in applicable
rules and
forms, and
(2)
accumulated and
communicated
to our
management,
including our
Chief Executive
Officer and Chief Financial Officer,
in a manner that allows timely decisions regarding required disclosure.

There were
no changes
in our
internal control
over financial
reporting (as
defined in
Rule 13a-15(f)
under the
1934 Act)
during our
fiscal quarter ended May
29, 2016,2022, that have materially
affected, or are reasonably
likely to materially affect,
our internal control
over
financial reporting.

MANAGEMENT’S REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING

The
management
of
General
Mills,
Inc.
is
responsible
for
establishing
and
maintaining
adequate
internal
control
over
financial
reporting,
as
such
term
is
defined
in
Rule
13a-15(f)
under
the
1934
Act.
The
Company’s
internal
control
system
was
designed
to
provide
reasonable
assurance
to
our
management
and
the
Board
of
Directors
regarding
the
preparation
and
fair
presentation
of
published
financial
statements.
Under
the
supervision
and
with
the
participation
of
management,
including
our
Chief
Executive
Officer and Chief Financial Officer,
we conducted an assessment of the effectiveness
of our internal control over financial reporting
as
of May 29, 2016.2022. In
making this assessment, management
used the criteria set forth
by the Committee of Sponsoring
Organizations of
the Treadway Commission (COSO) in
Internal Control – Integrated Framework (2013)
.

Based
on
our
assessment
using
the
criteria
set
forth
by
COSO
in
Internal
Control
–
Integrated
Framework
(2013)
,
management
concluded that our internal control over financial reporting was effective
as of May 29, 2016.

2022.

KPMG
LLP,
our
independent
registered
public
accounting
firm,
has
issued
a
report
on the
effectiveness
of
the Company’s
internal
control over financial reporting.

/s/ K. J. Powell/s/ D. L. Mulligan
K. J. PowellD. L. Mulligan
Chairman of the Board and ChiefExecutive Vice President and Chief
Executive OfficerFinancial Officer

/s/ J. L. Harmening
/s/ K. A. Bruce
J. L. Harmening
K. A. Bruce
Chief Executive Officer
Chief Financial Officer
June 30, 2016

29, 2022

Our independent registered public accounting firm’s
attestation report on our internal control over financial reporting is included
in the “Report
“Report of Independent Registered Public Accounting Firm” in Item
8 of this report.

ITEM 9BOther Information

ITEM 9B - Other Information
None.

ITEM 9C - Disclosure Regarding Foreign Jurisdictions that
Prevent Inspections
Not applicable.
92
PART
III

ITEM 10Directors, Executive Officers and Corporate Governance

ITEM 10 - Directors, Executive Officers and Corporate
Governance
The
information
contained
in
the
sections
entitled
“Proposal
Number
1
-
Election
of
Directors”
and
“Shareholder
Director
Nominations”
contained
in
our
definitive
Proxy
Statement
for
our
2022
Annual
Meeting
of
Shareholders
is
incorporated
herein
by
reference.
Information regarding our executive officers is set forth in
Item 1 of this report.
The
information
regarding
our
Audit
Committee,
including
the
members
of
the
Audit
Committee
and
audit
committee
financial
experts, set forth
in the sections section
entitled “Proposal Number 1 — Election of Directors,” “Director Nominations,”“Board
Committees and “Section 16(a) Beneficial Ownership Reporting Compliance”
Their Functions”
contained in our
definitive Proxy
Statement for
our 2016
2022 Annual Meeting of Shareholders is incorporated herein by reference.

Information regarding

We
have adopted a
Code of Conduct
applicable to all employees,
including our principal
executive officers is set forth in Item 1 officer,
principal financial officer,
and
principal
accounting
officer.
A
copy
of
the
Code
of this report.

Conduct

is
available
on
our
website
at
https://www.general
mills.com.
We
intend
to
post
on
our
website
any
amendments
to
our
Code
of
Conduct
and
any
waivers
from
our
Code
of
Conduct
for
principal
officers.
ITEM 11 - Executive Compensation
The
information regarding our Audit Committee, including
contained
in
the members of the Audit Committee
sections
entitled
“Executive
Compensation,”
“Director
Compensation,”
and audit committee financial experts, set forth in the section entitled “Board Committees and Their Functions” contained
“Overseeing
Risk
Management” in our definitive Proxy Statement for our 20162022 Annual
Meeting of Shareholders is incorporated herein by reference.

We have adopted a Code

ITEM 12 - Security Ownership of Conduct applicable to all employees, including Certain Beneficial Owners and Management
and Related Stockholder Matters
The
information
contained
in
the
sections
entitled
“Ownership
of
General
Mills
Common
Stock
by
Directors,
Officers
and
Certain
Beneficial Owners”
and “Equity
Compensation Plan
Information” in
our principal executive officer, principal financial officer,definitive
Proxy Statement
for our
2022 Annual
Meeting of
Shareholders is incorporated herein by reference.
ITEM 13 - Certain Relationships and principal accounting officer. A copy of the Code of Conduct is available on our website atwww.generalmills.com.We intend to post on our website any amendments to our Code of Conduct Related Transactions,
and any waivers from our Code of Conduct for principal officers.

ITEM 11Executive Compensation

Director Independence

The
information contained
set forth
in the sections
section
entitled “Executive Compensation,” “Director Compensation,” “Board
Independence
and “Compensation Risk Assessment” Related
Person
Transactions”
contained
in our
definitive
Proxy Statement for our 20162022 Annual Meeting of Shareholders is incorporated
herein by reference.
ITEM 14 - Principal Accounting Fees and Services
The
information
contained
in
the
section
entitled
“Independent
Registered
Public
Accounting
Firm
Fees”
in
our
definitive
Proxy
Statement for our 2022 Annual Meeting of Shareholders is incorporated herein
by reference.

ITEM 12Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information contained in the section entitled “Ownership of General Mills Common Stock by Directors, Officers

PART
IV
ITEM 15 – Exhibits and Certain Beneficial Owners” and “Equity Compensation Plan Information” in our definitive ProxyFinancial Statement for our 2016 Annual Meeting of Stockholders is incorporated herein by reference.

ITEM 13Certain Relationships and Related Transactions, and Director Independence

The information set forth in the sections entitled “Board Independence and Accountability” and “Certain Relationships and Related Transactions” contained in our definitive Proxy Statement for our 2016 Annual Meeting of Shareholders is incorporated herein by reference.

ITEM 14Principal Accounting Fees and Services

The information contained in the section entitled “Independent Registered Public Accounting Firm Fees” in our definitive Proxy Statement for our 2016 Annual Meeting of Shareholders is incorporated herein by reference.

PART IV

ITEM 15Exhibits, Financial Statement Schedules

1.Financial Statements:

Schedules

1.
Financial Statements:
The following financial statements are included in Item 8 of this report:

Consolidated Statements of Earnings for the fiscal years ended May 29, 2016,2022, May 30,
2021, and May 31, 2015, 2020.
Consolidated
Statements
of
Comprehensive
Income
for
the
fiscal
years
ended
May
29,
2022,
May
30,
2021,
and
May 25, 2014.

Consolidated Statements of Comprehensive Income for the fiscal years ended May 29, 2016, May 

31, 2015, and May 25, 2014.

2020.
Consolidated Balance Sheets as of May 29, 20162022 and May 31, 2015.

30, 2021.

Consolidated Statements of Cash Flows for the fiscal years ended May 29, 2016,2022,
May 30, 2021, and May 31, 2015, 2020.
Consolidated
Statements of
Total
Equity
and Redeemable
Interest for
the fiscal
years ended
May 29,
2022, May
30, 2021,
and May 25, 2014.

Consolidated Statements of Total Equity and Redeemable Interest for the fiscal years ended May 29, 2016, May 31, 2015, and May 25, 2014.

2020.

Notes to Consolidated Financial Statements.

93
Report of Management Responsibilities.

Report of Independent Registered Public Accounting Firm.

2.Financial Statement Schedule:

PCAOB ID:

185
.
2.
Financial Statement Schedule:
For the fiscal years ended May 29, 2016,2022, May 30, 2021, and May 31, 2015, and May 25, 2014:

2020:

II – Valuation
and Qualifying Accounts

3.Exhibits:

Exhibit No.

Description

    3.1Restated Certificate of Incorporation of the Registrant (incorporated herein by reference to Exhibit 3.1 to Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2009).
    3.2By-laws of the Registrant (incorporated herein by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed March 8, 2016).
    4.1Indenture, dated as of February 1, 1996, between the Registrant and U.S. Bank National Association (f/k/a First Trust of Illinois, National Association) (incorporated herein by reference to Exhibit 4.1 to Registrant’s Registration Statement on Form S-3 filed February 6, 1996 (File no. 333-00745)).
    4.2First Supplemental Indenture, dated as of May 18, 2009, between the Registrant and U.S. Bank National Association (incorporated herein by reference to Exhibit 4.2 to Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2009).
  10.1*2001 Compensation Plan for Non-Employee Directors (incorporated herein by reference to Exhibit 10.2 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended August 29, 2010).

  10.2*2005 Stock Compensation Plan (incorporated herein by reference to Exhibit 10.4 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended August 29, 2010).
  10.3*2006 Compensation Plan for Non-Employee Directors (incorporated herein by reference to Exhibit 10.5 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended August 29, 2010).
  10.4*2007 Stock Compensation Plan (incorporated herein by reference to Exhibit 10.6 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended August 29, 2010).
  10.5*2009 Stock Compensation Plan (incorporated herein by reference to Exhibit 10.7 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended August 29, 2010).
  10.6*2011 Stock Compensation Plan (incorporated herein by reference to Exhibit 10.6 to Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2015).
  10.7*2011 Compensation Plan for Non-Employee Directors (incorporated herein by reference to Exhibit 10.2 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 27, 2011).
  10.8*Executive Incentive Plan (incorporated herein by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 28, 2010).
  10.9*Separation Pay and Benefits Program for Officers (incorporated herein by reference to Exhibit 10.11 to Registrant’s Annual Report on Form 10-K for the fiscal year ended May 25, 2014).
  10.10*Supplemental Savings Plan (incorporated herein by reference to Exhibit 10.11 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended February 22, 2009).
  10.11*Supplemental Retirement Plan (Grandfathered) (incorporated herein by reference to Exhibit 10.12 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended February 22, 2009).
  10.12*2005 Supplemental Retirement Plan (incorporated herein by reference to Exhibit 10.13 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended February 22, 2009).
  10.13*Deferred Compensation Plan (Grandfathered) (incorporated herein by reference to Exhibit 10.14 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended February 22, 2009).
  10.14*2005 Deferred Compensation Plan (incorporated herein by reference to Exhibit 10.15 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended February 22, 2009).
  10.15*Executive Survivor Income Plan (incorporated herein by reference to Exhibit 10.6 to Registrant’s Annual Report on Form 10-K for the fiscal year ended May 29, 2005).
  10.16*Aircraft Time Sharing Agreement, dated December 12, 2007, between General Mills Sales, Inc. and Kendall J. Powell (incorporated herein by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed December 14, 2007).
  10.17*Supplemental Benefits Trust Agreement (incorporated herein by reference to Exhibit 10.3 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 27, 2011).
  10.18*Supplemental Benefits Trust Agreement (incorporated herein by reference to Exhibit 10.4 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 27, 2011).
  10.19*Form of Performance Share Unit Award Agreement (incorporated herein by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended August 24, 2014)
  10.20Agreements, dated November 29, 1989, by and between the Registrant and Nestle S.A. (incorporated herein by reference to Exhibit 10.15 to Registrant’s Annual Report on Form 10-K for the fiscal year ended May 28, 2000).
  10.21Protocol and Addendum No. 1 to Protocol of Cereal Partners Worldwide, dated November 21, 1989, between the Registrant and Nestle S.A. (incorporated herein by reference to Exhibit 10.16 to Registrant’s Annual Report on Form 10-K for the fiscal year ended May 27, 2001).

  10.22Addendum No. 2 to the Protocol of Cereal Partners Worldwide, dated March 16, 1993, between the Registrant and Nestle S.A. (incorporated herein by reference to Exhibit 10.18 to Registrant’s Annual Report on Form 10-K for the fiscal year ended May 30, 2004).
  10.23Addendum No. 3 to the Protocol of Cereal Partners Worldwide, effective as of March 15, 1993, between the Registrant and Nestle S.A. (incorporated herein by reference to Exhibit 10.2 to Registrant’s Annual Report on Form 10-K for the fiscal year ended May 28, 2000).
  10.24+Addenda Nos. 4 and 5 to the Protocol of Cereal Partners Worldwide between the Registrant and Nestle S.A. (incorporated herein by reference to Exhibit 10.26 to Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2009).
  10.25Addendum No. 10 to the Protocol of Cereal Partners Worldwide, dated January 1, 2010, among the Registrant, Nestle S.A. and CPW S.A. (incorporated herein by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2010).
  10.26+Addendum No. 11 to the Protocol of Cereal Partners Worldwide, dated July 17, 2012, among the Registrant, Nestle S.A., and CPW S.A. (incorporated herein by reference to Exhibit 10.1 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended August 26, 2012).
  10.27Five-Year Credit Agreement, dated as of May 18, 2016, among General Mills, Inc., the several financial institutions from time to time party to the agreement and Bank of America, N.A., as Administrative Agent (incorporated herein by reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed May 18, 2016).
  12.1Computation of Ratio of Earnings to Fixed Charges.
  21.1Subsidiaries of the Registrant.
  23.1Consent of Independent Registered Public Accounting Firm.
  31.1Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
  31.2Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
  32.1Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
  32.2Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101The following materials from the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 29, 2016 formatted in eXtensible Business Reporting Language: (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Earnings; (iii) the Consolidated Statements of Comprehensive Income; (iv) the Consolidated Statements of Total Equity and Redeemable Interest; (v) the Consolidated Statements of Cash Flows; (vi) the Notes to Consolidated Financial Statements; and (vii) Schedule II – Valuation of Qualifying Accounts.

*Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 15 of Form 10-K.
+Confidential information has been omitted from the exhibit and filed separately with the SEC pursuant to Rule 24b-2 of the Securities Exchange Act of 1934.

3.
Exhibits
:
Exhibit No.
Description
Amended
and
Restated
Certificate
of
Incorporation
of
the
Company
(incorporated
herein
by
reference to Exhibit 3.1 to the Company’s
Current Report on Form 8-K filed October 1, 2021).
By-laws
of
the
Company
(incorporated
herein
by
reference
to
Exhibit
3.1
to
the
Company’s
Current Report on Form 8-K filed January 28, 2022).
Indenture,
dated
as
of
February
1,
1996,
between
the
Company
and
U.S.
Bank
National
Association
(f/k/a
First
Trust
of
Illinois,
National
Association)
(incorporated
herein
by
reference to
Exhibit 4.1
to the
Company’s
Registration Statement
on Form
S-3 filed
February
6, 1996 (File no. 333-00745)).
First Supplemental
Indenture, dated as
of May 18,
2009, between the
Company and U.S.
Bank
National
Association
(incorporated
herein
by
reference
to
Exhibit
4.2
to
Registrant’s
Annual
Report on Form 10-K for the fiscal year ended May 31, 2009).
Description of the Company’s registered
securities.
2001
Compensation
Plan
for
Non-Employee
Directors
(incorporated
herein
by
reference
to
Exhibit
10.2
to
the
Company’s
Quarterly
Report
on
Form
10-Q
for
the
fiscal
quarter
ended
August 29, 2010).
2006 Compensation Plan for Non-Employee Directors (incorporated
herein by reference to
Exhibit 10.5 to the Company’s Quarterly
Report on Form 10-Q for the fiscal quarter ended
August 29, 2010).
2011
Stock
Compensation
Plan
(incorporated
herein
by
reference
to
Exhibit
10.6
to
the
Company’s Annual Report
on Form 10-K for the fiscal year ended May 31, 2015).
2011 Compensation Plan for Non-Employee
Directors (incorporated herein by reference to
Exhibit 10.2 to the Company’s Quarterly
Report on Form 10-Q for the fiscal quarter ended
November 27, 2011).
2016
Compensation
Plan
for
Non-Employee
Directors
(incorporated
herein
by
reference
to
Exhibit
10.1
to
the
Company’s
Quarterly
Report
on
Form
10-Q
for
the
fiscal
quarter
ended
November 27, 2016).
Executive
Incentive
Plan
(incorporated
herein
by reference
to
Exhibit
10.1
to
the
Company’s
Quarterly Report on Form 10-Q for the fiscal quarter ended November
28, 2010).
Separation Pay
and Benefits
Program for
Officers (incorporated
herein by
reference to
Exhibit
10.1
to the
Company’s
Quarterly
Report
on
Form
10-Q
for the
fiscal
quarter
ended February
23, 2020).
Supplemental Savings Plan (incorporated
herein by reference to Exhibit
10.4 to the Company’s
Quarterly Report on Form 10-Q for the fiscal quarter ended February
28, 2021).
Supplemental
Retirement
Plan
(Grandfathered)
(incorporated
herein
by
reference
to
Exhibit
10.1
to the
Company’s
Quarterly
Report
on
Form
10-Q
for the
fiscal
quarter
ended February
28, 2021).
2005
Supplemental
Retirement
Plan
(incorporated
herein
by
reference
to
Exhibit
10.3
to
the
Company’s Quarterly Report on
Form 10-Q for the fiscal quarter ended February 28, 2021).
94
Deferred
Compensation
Plan
(Grandfathered)
(incorporated
herein
by
reference
to
Exhibit
10.14 to
the Company’s
Quarterly Report
on Form
10-Q for
the fiscal
quarter ended
February
22, 2009).
2005
Deferred
Compensation
Plan
(incorporated
herein
by
reference
to
Exhibit
10.5
to
the
Company’s Quarterly Report on
Form 10-Q for the fiscal quarter ended February 28, 2021).
Executive
Survivor
Income
Plan
(incorporated
herein
by
reference
to
Exhibit
10.6
to
the
Company’s Annual Report
on Form 10-K for the fiscal year ended May 29, 2005).
Supplemental
Benefits
Trust
Agreement,
amended
and
restated
as
of
September
26,
1988,
between the Company and
Norwest Bank Minnesota, N.A. (incorporated
herein by reference to
Exhibit
10.3
to
the
Company’s
Quarterly
Report
on
Form
10-Q
for
the
fiscal
quarter
ended
November 27, 2011).
Supplemental Benefits Trust
Agreement, dated September 26,
1988, between the Company and
Norwest
Bank
Minnesota,
N.A.
(incorporated
herein
by
reference
to
Exhibit
10.4
to
the
Company’s Quarterly Report on
Form 10-Q for the fiscal quarter ended November 27, 2011).
Form
of
Performance
Share
Unit
Award
Agreement
(incorporated
herein
by
reference
to
Exhibit
10.18
to
the Company’s
Annual
Report
on
Form
10-K
for
the fiscal
year
ended May
27, 2018).
Form
of
Stock
Option
Agreement
(incorporated
herein
by
reference
to
Exhibit
10.19
to
the
Company’s Annual Report
on Form 10-K for the fiscal year ended May 27, 2018).
Form of Restricted Stock
Unit Agreement (incorporated
herein by reference to Exhibit
10.20 to
the Company’s Annual Report on
Form 10-K for the fiscal year ended May 27, 2018).
Deferred Compensation
Plan for Non-Employee
Directors (incorporated
herein by reference
to
Exhibit
10.1
to
the
Company’s
Quarterly
Report
on
Form
10-Q
for
the
fiscal
quarter
ended
November 26, 2017).
2017
Stock
Compensation
Plan
(incorporated
herein
by
reference
to
Exhibit
10.2
to
the
Company’s Quarterly Report on
Form 10-Q for the fiscal quarter ended November 26, 2017).
Supplemental
Retirement
Plan
I
(Grandfathered)
(incorporated
herein
by
reference
to
Exhibit
10.2
to the
Company’s
Quarterly
Report
on
Form
10-Q
for the
fiscal
quarter
ended February
28, 2021).
Supplemental
Retirement
Plan
I
(incorporated
herein
by
reference
to
Exhibit
10.6
to
the
Company’s Quarterly Report on
Form 10-Q for the fiscal quarter ended
February 28, 2021).
Agreements,
dated
November
29,
1989,
by
and
between
the
Company
and
Nestle
S.A.
(incorporated
herein by
reference
to Exhibit
10.15 to
the Company’s
Annual Report
on Form
10-K for the fiscal year ended May 28, 2000).
Protocol
of
Cereal
Partners
Worldwide,
dated
November
21,
1989,
and
Addendum
No.
1
to
Protocol, dated
February 9,
1990, between
the Company
and Nestle
S.A. (incorporated
herein
by
reference
to
Exhibit
10.16
to
the
Company’s
Annual
Report
on
Form
10-K
for
the
fiscal
year ended May 27, 2001).
Addendum
No.
2
to
the
Protocol
of
Cereal
Partners
Worldwide,
dated
March
16,
1993,
between the Company and Nestle S.A. (incorporated herein by
reference to Exhibit 10.18 to the
Company’s Annual Report
on Form 10-K for the fiscal year ended May 30, 2004).
Addendum No. 3 to the Protocol of Cereal Partners Worldwide,
effective as of March 15, 1993,
between the
Company and
Nestle S.A. (incorporated
herein by reference
to Exhibit 10.2
to the
Company’s Annual Report
on Form 10-K for the fiscal year ended
May 28, 2000).
Addendum
No.
4,
effective
as
August
1,
1998,
and
Addendum
No.
5,
effective
as
April
1,
2000,
to
the
Protocol
of
Cereal
Partners
Worldwide
between
the
Company
and
Nestle
S.A.
(incorporated
herein by
reference
to Exhibit
10.26 to
the Company’s
Annual Report
on Form
10-K for the fiscal year ended May 31, 2009).
95
Addendum
No.
10
to
the
Protocol
of
Cereal
Partners
Worldwide,
effective
January
1,
2010,
among the
Company,
Nestle S.A.,
and CPW
S.A. (incorporated
herein by
reference to
Exhibit
10.1
to the
Company’s
Quarterly
Report
on
Form
10-Q
for the
fiscal
quarter
ended February
28, 2010).
Addendum
No.
11
to
the
Protocol
of
Cereal
Partners
Worldwide,
effective
July
17,
2012,
among the
Company,
Nestle S.A.,
and CPW
S.A. (incorporated
herein by
reference to
Exhibit
10.1 to the
Company’s
Quarterly Report
on Form 10-Q
for the fiscal
quarter ended August
26,
2012).
Five-Year
Credit
Agreement,
dated
as
of
April
12,
2021,
among
the
Company,
the
several
financial institutions
from time
to time
party to
the agreement,
and Bank
of America,
N.A., as
Administrative
Agent
(incorporated
herein
by
reference
to
Exhibit
10
to
the
Company’s
Current Report on Form 8-K filed April 15, 2021).
Subsidiaries of the Company.
Consent of Independent Registered Public Accounting Firm.
Certification of
Chief Executive
Officer pursuant
to Section
302 of
the Sarbanes-Oxley
Act of
2002.
Certification of
Chief Financial
Officer
pursuant to
Section 302
of the
Sarbanes-Oxley
Act of
2002.
Certification of
Chief Executive
Officer pursuant
to Section
906 of
the Sarbanes-Oxley
Act of
2002.
Certification of
Chief Financial
Officer
pursuant to
Section 906
of the
Sarbanes-Oxley
Act of
2002.
101
The following
materials from
the Company’s
Annual Report
on Form
10-K for
the fiscal
year
ended
May
29,
2022
formatted
in
Inline
Extensible
Business
Reporting
Language:
(i)
the
Consolidated
Balance
Sheets;
(ii)
the
Consolidated
Statements
of
Earnings;
(iii)
the
Consolidated Statements
of Comprehensive
Income; (iv)
the Consolidated
Statements of
Total
Equity and Redeemable Interest; (v)
the Consolidated Statements of Cash
Flows; (vi) the Notes
to
Consolidated
Financial
Statements;
and
(vii)
Schedule
II
–
Valuation
of
Qualifying
Accounts.
104
Cover
Page,
formatted
in
Inline
Extensible
Business
Reporting
Language
and
contained
in
Exhibit 101.
_____________
*
Management contract or compensatory plan or arrangement required
to be filed as an exhibit pursuant to Item 15 of Form
10-K.
+
Confidential information has been omitted from the exhibit and filed
separately with the SEC pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934.
Pursuant to Item 601(b)(4)(iii) of Regulation S-K, copies of certain
instruments defining the rights of holders of our long-term debt are
not filed and, in lieu thereof, we agree to furnish copies to the SEC upon request.

ITEM 16 - Form 10-K Summary
Not Applicable.
gis202210kp96i0.gif
96
Signatures

Pursuant to
the requirements of
Section 13 or
15(d) of the
Securities Exchange
Act of 1934,
the registrant has
duly caused this
report
to be signed on its behalf by the undersigned, thereunto duly authorized.

GENERAL MILLS, INC.
Dated: June 30, 2016By: 

/s/ Jerald A. Young

Name:    Jerald A. Young

Title:      Vice President, Controller

GENERAL MILLS, INC.
Date:
June 29, 2022
By
/s/ Mark A. Pallot
Name:
Mark A. Pallot
Title:
Vice President, Chief Accounting
Officer
Pursuant to
the requirements
of the
Securities Exchange
Act of
1934, this
report has
been signed
below by
the following
persons on
behalf of the registrant and in the capacities and on the dates indicated.

Signature

Title

Date

/s/ Kendall J. Powell

Kendall J. Powell

Chairman of the Board, Chief Executive Officer

and Director (Principal Executive Officer)

June 30, 2016

/s/ Donal L. Mulligan

Donal L. Mulligan

Executive Vice President and Chief Financial

Officer (Principal Financial Officer)

June 30, 2016

/s/ Jerald A. Young

Jerald A. Young

Vice President, Controller

(Principal Accounting Officer)

June 30, 2016

/s/ Bradbury H. Anderson

Bradbury H. Anderson

DirectorJune 30, 2016

/s/ R. Kerry Clark

R. Kerry Clark

DirectorJune 30, 2016

/s/ David M. Cordani

David M. Cordani

DirectorJune 30, 2016

/s/ Paul Danos

Paul Danos

DirectorJune 30, 2016

/s/ Roger W. Ferguson Jr.

Roger W. Ferguson Jr.

DirectorJune 30, 2016

/s/ Henrietta H. Fore

Henrietta H. Fore

DirectorJune 30, 2016

/s/ Maria G. Henry

Maria G. Henry

DirectorJune 30, 2016

/s/ Heidi G. Miller

Heidi G. Miller

DirectorJune 30, 2016

/s/ Steve Odland

Steve Odland

DirectorJune 30, 2016

/s/ Michael D. Rose

Michael D. Rose

DirectorJune 30, 2016

/s/ Robert L. Ryan

Robert L. Ryan

DirectorJune 30, 2016

/s/ Eric D. Sprunk

Eric D. Sprunk

DirectorJune 30, 2016

/s/ Dorothy A. Terrell

Dorothy A. Terrell

DirectorJune 30, 2016

/s/ Jorge A. Uribe

Jorge A. Uribe

DirectorJune 30, 2016

Signature
Title
Date
/s/ Jeffrey L Harmening
Jeffrey L. Harmening
Chairman of the Board, Chief Executive Officer,
and Director
(Principal Executive Officer)
June 29, 2022
/s/ Kofi A. Bruce
Kofi A. Bruce
Chief Financial Officer
(Principal Financial Officer)
June 29, 2022
/s/ Mark A. Pallot
Mark A. Pallot
Vice President, Chief Accounting
Officer
(Principal Accounting Officer)
June 29, 2022
/s/ R. Kerry Clark
R. Kerry Clark
Director
June 29, 2022
/s/ David M. Cordani
David M. Cordani
Director
June 29, 2022
Director
June 29, 2022
C. Kim Goodwin
/s/ Maria G. Henry
Maria G. Henry
Director
June 29, 2022
/s/ Jo Ann Jenkins
Jo Ann Jenkins
Director
June 29, 2022
/s/ Elizabeth C. Lempres
Elizabeth C. Lempres
Director
June 29, 2022
/s/ Diane L. Neal
Diane L. Neal
Director
June 29, 2022
/s/ Steve Odland
Steve Odland
Director
June 29, 2022
/s/ Maria A. Sastre
Maria A. Sastre
Director
June 29, 2022
/s/ Eric D. Sprunk
Eric D. Sprunk
Director
June 29, 2022
/s/ Jorge A. Uribe
Jorge A. Uribe
Director
June 29, 2022
97
General Mills, Inc. and Subsidiaries

Schedule II—II - Valuation
of Qualifying Accounts

   Fiscal Year 
In Millions      2016          2015          2014     

Allowance for doubtful accounts:

    

Balance at beginning of year

   $   25.3    $  21.0    $  19.9  

Additions charged to expense

   21.4    19.8    12.5  

Bad debt write-offs

   (17.5)   (12.5)   (11.6) 

Other adjustments and reclassifications

   0.4    (3.0)   0.2  

Balance at end of year

   $   29.6    $  25.3    $  21.0  
  

Valuation allowance for deferred tax assets:

    

Balance at beginning of year

   $ 215.4    $221.6    $232.8  

Additions charged to expense

   (1.5)   2.9    0.1  

Adjustments due to acquisitions, translation of amounts, and other

   13.1    (9.1)   (11.3) 

Balance at end of year

   $ 227.0    $215.4    $221.6  
  

Reserve for restructuring and other exit charges:

    

Balance at beginning of year

   $ 120.8    $    3.5    $  19.5  

Additions charged to expense, including translation amounts

   70.2    185.1    6.4  

Net amounts utilized for restructuring activities

   (114.4)   (67.8)   (22.4) 

Balance at end of year

   $   76.6    $120.8    $    3.5  
  

Reserve for LIFO valuation:

    

Balance at beginning of year

   $ 214.2    $216.9    $221.8  

Increase (decrease)

   5.1    (2.7)   (4.9) 
  

Balance at end of year

   $ 219.3    $214.2    $216.9  
  

Exhibit Index

Exhibit No.

Description

12.1  Computation of Ratio of Earnings to Fixed Charges.
21.1  Subsidiaries of the Registrant.
23.1  Consent of Independent Registered Public Accounting Firm.
31.1  Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2  Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1  Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2  Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101   The following materials from the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 29, 2016 formatted in eXtensible Business Reporting Language: (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Earnings; (iii) the Consolidated Statements of Comprehensive Earnings; (iv) the Consolidated Statements of Total Equity and Redeemable Interest; (v) the Consolidated Statements of Cash Flows; (vi) the Notes to Consolidated Financial Statements; and (vii) Schedule II – Valuation of Qualifying Accounts.

114

Fiscal Year
In Millions
2022
2021
2020
Allowance for doubtful accounts:
Balance at beginning of year
$
36.0
$
33.2
$
28.8
Additions charged to expense
23.0
25.7
25.9
Bad debt write-offs
(26.4)
(29.9)
(22.9)
Other adjustments and reclassifications
(4.3)
7.0
1.4
Balance at end of year
$
28.3
$
36.0
$
33.2
Valuation
allowance for deferred tax assets:
Balance at beginning of year
$
229.2
$
214.2
$
213.7
(Benefits) additions charged to expense
(41.6)
9.1
4.2
Adjustments due to acquisitions, translation of amounts, and other
(2.5)
5.9
(3.7)
Balance at end of year
$
185.1
$
229.2
$
214.2
Reserve for restructuring and other exit charges:
Balance at beginning of year
$
148.8
$
17.8
$
36.5
Additions charged to expense, including translation amounts
3.4
143.9
(2.5)
Reserve adjustment
(34.0)
0
0
Net amounts utilized for restructuring activities
(81.4)
(12.9)
(16.2)
Balance at end of year
$
36.8
$
148.8
$
17.8
Reserve for LIFO valuation:
Balance at beginning of year
$
209.5
$
202.1
$
213.5
Increase (decrease)
253.9
7.4
(11.4)
Balance at end of year
$
463.4
$
209.5
$
202.1