UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
10-Q
(Mark One)
 
☑
 
QUARTERLY
 
REPORT
 
PURSUANT
 
TO
 
SECTION
 
13
 
OR
 
15(d)
 
OF
 
THE
 
SECURITIES
 
EXCHANGE
 
ACT
 
OF
 
1934
FOR THE QUARTERLY
 
PERIOD ENDED
NOVEMBERAUGUST 27, 20222023
☐
 
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)
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
 
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
GIS25AGIS 25A
New York Stock Exchange
0.450% Notes due 2026
 
GIS26GIS 26
 
New York Stock Exchange
1.500% Notes due 2027
 
GIS27GIS 27
 
New York Stock Exchange
3.907% Notes due 2029
GIS 29
New York Stock Exchange
________________
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.
 
Yes
☑
 
No
☐
Indicate
 
by
 
check
 
mark
 
whether
 
the
 
registrant
 
has
 
submitted
 
electronically
 
every
 
Interactive
 
Data
 
File
 
required
 
to
 
be
 
submitted
pursuant to Rule 405
 
405 of Regulation S-T (§
 
S-T232.405 of this chapter) during
 
the preceding 12 months (or
 
months (or for
such shorter period that
 
that the
registrant
was required
to
submit such files).
Yes
 
☑
 
No
☐
Indicate by check mark
 
whether the registrant is a
 
large accelerated filer,
 
an accelerated filer,
 
a non-accelerated filer,
 
smaller reporting
company,
 
or
 
an
 
emerging
 
growth
 
company.
 
See
 
the
 
definitions
 
of
 
“large
 
accelerated
 
filer,”
 
“accelerated
 
filer,”
 
“smaller
 
reporting
company,” and “emerging
 
growth company” in Rule 12b-2 of the Exchange Act.
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 is a shell company (as defined
 
in Rule 12b-2 of the Exchange Act).
Yes
☐
 
No
☑
Number of
 
shares of shares
 
of Common Stock
 
Stock outstanding
 
as of
 
DecemberSeptember 13,
 
2022:2023:
589,610,717581,279,229
 
(excluding
165,002,611173,334,099
 
shares held
 
in the
treasury).
4
PART
I.
FINANCIAL INFORMATION
Item 1.
Financial Statements
Consolidated Statements of Earnings
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions, Except per Share Data)
Quarter Ended
Aug. 27, 2023
Aug. 28, 2022
Net sales
$
4,904.7
$
4,717.6
Cost of sales
3,134.2
3,269.9
Selling, general, and administrative expenses
839.3
791.4
Divestitures gain, net
-
(430.9)
Restructuring, impairment, and other exit costs
1.2
1.6
Operating profit
930.0
1,085.6
Benefit plan non-service income
(17.0)
(21.7)
Interest, net
117.0
87.7
Earnings before income taxes and after-tax earnings
from
joint ventures
830.0
1,019.6
Income taxes
173.2
216.1
After-tax earnings from joint ventures
23.5
19.8
Net earnings, including earnings attributable to noncontrolling interests
680.3
823.3
Net earnings attributable to noncontrolling interests
6.8
3.3
Net earnings attributable to General Mills
$
673.5
$
820.0
Earnings per share – basic
$
1.15
$
1.37
Earnings per share – diluted
$
1.14
$
1.35
See accompanying notes to consolidated financial statements.
5
Consolidated Statements of Comprehensive Income
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions)
Quarter Ended
Aug. 27, 2023
Aug. 28, 2022
Net earnings, including earnings attributable to noncontrolling interests
$
680.3
$
823.3
Other comprehensive (loss) income, net of tax:
Foreign currency translation
(18.1)
3.8
Other fair value changes:
Hedge derivatives
(2.3)
(38.3)
Reclassification to earnings:
Foreign currency translation
-
(7.4)
Hedge derivatives
0.2
(1.4)
Amortization of losses and prior service costs
9.1
14.1
Other comprehensive loss, net of tax
(11.1)
(29.2)
Total comprehensive
income
669.2
794.1
Comprehensive income attributable to noncontrolling interests
6.9
2.0
Comprehensive income attributable to General Mills
$
662.3
$
792.1
See accompanying notes to consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4
PART
I.
FINANCIAL INFORMATION
Item 1.
Financial Statements
Consolidated Statements of Earnings
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions, Except per Share Data)
Quarter Ended
Six-Month Period Ended
Nov. 27, 2022
Nov. 28, 2021
Nov. 27, 2022
Nov. 28, 2021
Net sales
$
5,220.7
$
5,024.0
$
9,938.3
$
9,563.9
Cost of sales
3,515.6
3,392.8
6,785.5
6,335.3
Selling, general, and administrative expenses
894.2
828.8
1,685.6
1,586.2
Divestitures gain, net
-
-
(430.9)
-
Restructuring, impairment, and other exit
costs (recoveries)
11.1
2.3
12.7
(2.0)
Operating profit
799.8
800.1
1,885.4
1,644.4
Benefit plan non-service income
(21.7)
(27.7)
(43.4)
(57.3)
Interest, net
91.5
92.7
179.2
188.6
Earnings before income taxes and after-tax earnings
from
joint ventures
730.0
735.1
1,749.6
1,513.1
Income taxes
147.1
159.7
363.2
328.6
After-tax earnings from joint ventures
25.4
33.0
45.2
62.1
Net earnings, including earnings attributable to redeemable
and noncontrolling interests
608.3
608.4
1,431.6
1,246.6
Net earnings attributable to redeemable and
noncontrolling interests
2.4
11.2
5.7
22.4
Net earnings attributable to General Mills
$
605.9
$
597.2
$
1,425.9
$
1,224.2
Earnings per share – basic
$
1.01
$
0.98
$
2.38
$
2.01
Earnings per share – diluted
$
1.01
$
0.97
$
2.36
$
1.99
See accompanying notes to consolidated financial statements.
5
Consolidated Statements of Comprehensive Income
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions)
Quarter Ended
Six-Month Period Ended
Nov. 27, 2022
Nov. 28, 2021
Nov. 27, 2022
Nov. 28, 2021
Net earnings, including earnings attributable to
redeemable and noncontrolling interests
$
608.3
$
608.4
$
1,431.6
$
1,246.6
Other comprehensive loss, net of tax:
Foreign currency translation
(115.0)
(38.5)
(111.2)
(62.4)
Other fair value changes:
Hedge derivatives
20.8
18.7
(17.5)
20.4
Reclassification to earnings:
Foreign currency translation
-
-
(7.4)
-
Hedge derivatives
1.0
(6.4)
(0.4)
4.2
Amortization of losses and prior service costs
14.2
22.8
28.3
31.2
Other comprehensive loss, net of tax
(79.0)
(3.4)
(108.2)
(6.6)
Total comprehensive
income
529.3
605.0
1,323.4
1,240.0
Comprehensive income (loss) attributable to
redeemable and noncontrolling interests
3.0
(25.8)
5.0
(49.3)
Comprehensive income attributable to General Mills
$
526.3
$
630.8
$
1,318.4
$
1,289.3
See accompanying notes to consolidated financial statements.
6
 
Consolidated Balance Sheets
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions, Except Par Value)
Nov.Aug. 27, 20222023
May 29, 202228, 2023
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
644.1490.9
$
569.4585.5
Receivables
1,834.01,791.1
1,692.11,683.2
Inventories
2,121.32,228.8
1,867.32,172.0
Prepaid expenses and other current assets
731.2596.2
802.1
Assets held for sale
-
158.9735.7
Total current
 
assets
5,330.65,107.0
5,089.85,176.4
Land, buildings, and equipment
3,358.03,585.2
3,393.83,636.2
Goodwill
14,476.014,522.0
14,378.514,511.2
Other intangible assets
6,974.86,965.7
6,999.96,967.6
Other assets
1,180.41,139.8
1,228.11,160.3
Total assets
$
31,319.831,319.7
$
31,090.131,451.7
LIABILITIES
 
AND EQUITY
Current liabilities:
Accounts payable
$
4,022.63,705.8
$
3,982.34,194.2
Current portion of long-term debt
1,964.31,174.6
1,674.21,709.1
Notes payable
1,153.4584.3
811.431.7
Other current liabilities
2,067.91,603.1
1,552.01,600.7
Total current
 
liabilities
9,208.27,067.8
8,019.97,535.7
Long-term debt
8,622.510,523.5
9,134.89,965.1
Deferred income taxes
2,186.92,085.0
2,218.32,110.9
Other liabilities
930.11,128.0
929.11,140.0
Total liabilities
20,947.720,804.3
20,302.120,751.7
Stockholders' equity:
Common stock,
754.6
 
shares issued, $
0.10
 
par value
75.5
75.5
Additional paid-in capital
1,155.31,185.7
1,182.91,222.4
Retained earnings
18,991.920,163.6
18,532.619,838.6
Common stock in treasury,
 
at cost, shares of
164.4173.4
 
and
155.7168.0
(8,023.5)(8,874.3)
(7,278.1)(8,410.0)
Accumulated other comprehensive loss
(2,078.0)(2,288.1)
(1,970.5)(2,276.9)
Total stockholders' equity
10,121.210,262.4
10,542.410,449.6
Noncontrolling interests
250.9253.0
245.6250.4
Total equity
10,372.110,515.4
10,788.010,700.0
Total liabilities and equity
$
31,319.831,319.7
$
31,090.131,451.7
See accompanying notes to consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7
 
Consolidated Statements of Total
 
Equity and Redeemable Interest
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions, Except per Share Data)
Quarter Ended
Nov.Aug. 27, 20222023
Nov.Aug. 28, 20212022
Shares
Amount
Shares
Amount
Total equity,
 
beginning balance
$
10,825.610,700.0
$
9,985.910,788.0
Common stock,
1
 
billion shares authorized, $
0.10
 
par value
754.6
75.5
754.6
75.5
Additional paid-in capital:
Beginning balance
1,146.11,222.4
1,345.01,182.9
Stock compensation plans
(7.4)7.3
(5.1)9.3
Unearned compensation related to stock unit awards
(6.8)(79.4)
(3.9)(79.0)
Earned compensation
23.435.4
20.6
Decrease in redemption value of
redeemable interest
-
8.532.9
Ending balance
1,155.31,185.7
1,365.11,146.1
Retained earnings:
Beginning balance
19,027.619,838.6
17,384.518,532.6
Net earnings attributable to General Mills
605.9673.5
597.2820.0
Cash dividends declared ($
1.080.59
 
and $
1.020.54
 
per share)
(641.6)(348.5)
(618.5)(325.0)
Ending balance
18,991.920,163.6
17,363.219,027.6
Common stock in treasury:
Beginning balance
(160.3)(168.0)
(7,676.0)(8,410.0)
(148.3)(155.7)
(6,715.0)(7,278.1)
Shares purchased, including $
(5.2)4.2
(400.5)
million of excise tax
(3.7)(6.4)
(224.9)(504.7)
(6.9)
(500.8)
Stock compensation plans
1.11.0
53.040.4
0.62.3
24.7102.9
Ending balance
(164.4)(173.4)
(8,023.5)(8,874.3)
(151.4)(160.3)
(6,915.2)(7,676.0)
Accumulated other comprehensive loss:
Beginning balance
(1,998.4)(2,276.9)
(2,397.7)(1,970.5)
Comprehensive (loss) incomeloss
(79.6)(11.2)
33.6(27.9)
Ending balance
(2,078.0)(2,288.1)
(2,364.1)(1,998.4)
Noncontrolling interests:
Beginning balance
250.8250.4
293.5245.6
Comprehensive income (loss)
3.06.9
(11.9)2.0
Distributions to noncontrolling interest holders
(2.9)(4.3)
(1.4)(1.9)
Divestiture
-
5.1
Ending balance
250.9253.0
280.2250.8
Total equity,
 
ending balance
$
10,372.110,515.4
$
9,804.7
Redeemable interest:
Beginning balance
$
-
$
584.0
Comprehensive loss
-
(13.9)
Decrease in redemption value of
redeemable interest
-
(8.5)
Ending balance
$
-
$
561.610,825.6
See accompanying notes to consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8
Consolidated Statements of Total
Equity and Redeemable Interest
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions, Except per Share Data)
Six-Month Period Ended
Nov. 27, 2022
Nov. 28, 2021
Shares
Amount
Shares
Amount
Total equity,
beginning balance
$
10,788.0
$
9,773.2
Common stock,
1
billion shares authorized, $
0.10
par value
754.6
75.5
754.6
75.5
Additional paid-in capital:
Beginning balance
1,182.9
1,365.5
Stock compensation plans
1.9
4.0
Unearned compensation related to stock unit awards
(85.8)
(72.2)
Earned compensation
56.3
53.7
Decrease in redemption value of
redeemable interest
-
14.1
Ending balance
1,155.3
1,365.1
Retained earnings:
Beginning balance
18,532.6
17,069.8
Net earnings attributable to General Mills
1,425.9
1,224.2
Cash dividends declared ($
1.62
and $
1.53
per share)
(966.6)
(930.8)
Ending balance
18,991.9
17,363.2
Common stock in treasury:
Beginning balance
(155.7)
(7,278.1)
(146.9)
(6,611.2)
Shares purchased
(12.1)
(901.3)
(6.2)
(375.0)
Stock compensation plans
3.4
155.9
1.7
71.0
Ending balance
(164.4)
(8,023.5)
(151.4)
(6,915.2)
Accumulated other comprehensive loss:
Beginning balance
(1,970.5)
(2,429.2)
Other comprehensive (loss) income
(107.5)
65.1
Ending balance
(2,078.0)
(2,364.1)
Noncontrolling interests:
Beginning balance
245.6
302.8
Comprehensive income (loss)
5.0
(20.1)
Distributions to noncontrolling interest holders
(4.8)
(2.5)
Divestiture
5.1
-
Ending balance
250.9
280.2
Total equity,
ending balance
$
10,372.1
$
9,804.7
Redeemable interest:
Beginning balance
$
-
$
604.9
Comprehensive loss
-
(29.2)
Decrease in redemption value of
redeemable interest
-
(14.1)
Ending balance
$
-
$
561.6
See accompanying notes to consolidated financial statements.
9
 
Consolidated Statements of Cash Flows
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions)
Six-Month PeriodQuarter Ended
Nov.Aug. 27, 20222023
Nov.Aug. 28, 20212022
Cash Flows - Operating Activities
Net earnings, including earnings attributable to redeemable and noncontrolling
interests
$
1,431.6680.3
$
1,246.6823.3
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization
273.9137.2
286.9134.3
After-tax earnings from joint ventures
(45.2)(23.5)
(62.1)(19.8)
Distributions of earnings from joint ventures
26.515.8
35.815.5
Stock-based compensation
57.635.3
47.933.5
Deferred income taxes
(48.1)(14.5)
56.49.2
Pension and other postretirement benefit plan contributions
(12.7)(7.4)
(12.5)(5.3)
Pension and other postretirement benefit plan costs
(13.5)(5.3)
(14.4)(6.7)
Divestitures gain, net
(430.9)-
-(430.9)
Restructuring, impairment, and other exit costs
(13.7)2.4
(44.2)(15.7)
Changes in current assets and liabilities, excluding the effects of
 
 
acquisitions and divestitures
(64.4)(457.4)
(88.7)(209.7)
Other, net
39.615.2
46.161.1
Net cash provided by operating activities
1,200.7378.1
1,497.8388.8
Cash Flows - Investing Activities
Purchases of land, buildings, and equipment
(226.7)(141.7)
(224.3)(90.9)
Acquisition, net of cash acquired
(251.5)-
(1,198.6)(252.1)
Proceeds from divestitures, net of cash divested
610.7
-
Investments in affiliates, net
(1.4)
4.8
Proceeds from disposal of land, buildings, and equipment
0.5
1.5610.7
Other, net
(6.5)6.2
20.6(1.9)
Net cash (used) provided (used) by investing activities
125.1(135.5)
(1,396.0)265.8
Cash Flows - Financing Activities
Change in notes payable
353.4551.8
854.2
Issuance of long-term debt
500.0
1,935.0
Payment of long-term debt
(600.0)
(2,221.7)188.0
Proceeds from common stock issued on exercised options
118.54.5
26.165.5
Purchases of common stock for treasury
(901.3)(500.5)
(375.0)(500.8)
Dividends paid
(647.9)(348.5)
(623.2)(325.0)
Distributions to noncontrolling and redeemable interest holders
(4.8)(4.3)
(2.5)(1.9)
Other, net
(48.4)(37.2)
(20.1)(34.9)
Net cash used by financing activities
(1,230.5)(334.2)
(427.2)(609.1)
Effect of exchange rate changes on cash and cash equivalents
(20.6)(3.0)
(35.1)(20.5)
(Decrease) Increase (decrease) in cash and cash equivalents
74.7(94.6)
(360.5)25.0
Cash and cash equivalents - beginning of year
569.4585.5
1,505.2569.4
Cash and cash equivalents - end of period (includes $
123.7
million of cash classified as
held for sale as of November 28, 2021)
$
644.1490.9
$
1,144.7594.4
Cash Flow from changes in current assets and liabilities, excluding the effects
 
of
 
 
acquisitions and divestitures:
Receivables
$
(200.8)(104.4)
$
(237.3)(91.1)
Inventories
(278.5)(54.3)
9.2(243.3)
Prepaid expenses and other current assets
62.9140.9
(1.2)79.5
Accounts payable
112.5(443.8)
(28.4)(130.4)
Other current liabilities
239.54.2
169.0175.6
Changes in current assets and liabilities
$
(64.4)(457.4)
$
(88.7)(209.7)
See accompanying notes to consolidated financial statements.
 
 
 
10
9
GENERAL MILLS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
(Unaudited)
(1) Background
The accompanying
 
Consolidated Financial
 
Statements of
 
General Mills,
 
Inc. (we,
 
us, our,
 
General Mills,
 
or the Company)
 
have been
prepared in
 
accordance with
 
accounting principles
 
generally accepted
 
in the
 
United States
 
(GAAP) for
 
interim financial
 
information
and with
 
the rules
 
and regulations
 
for reporting
 
on Form
 
10-Q. Accordingly,
 
they do
 
not include
 
certain information
 
and disclosures
required
 
for
 
comprehensive
 
financial
 
statements.
 
In
 
the
 
opinion
 
of
 
management,
 
all
 
adjustments
 
considered
 
necessary
 
for
 
a
 
fair
presentation have
 
been included
 
and are
 
of a
 
normal recurring
 
nature, including
 
the elimination
 
of all
 
intercompany transactions
 
and
any
noncontrolling
 
and redeemableinterests’
 
interests’ share
 
of
those
 
transactions.
Operating
 
results
for
 
the
fiscal
 
quarter
ended
 
November August
27,
2022,2023,
 
are
not
necessarily indicative of the results that may be expected for the fiscal year ending
 
ending May 28, 2023.26, 2024.
 
These
 
statements
 
should
 
be
 
read
 
in
 
conjunction
 
with
 
the
 
Consolidated
 
Financial
 
Statements
 
and
 
footnotes
 
included
 
in
 
our
 
Annual
Report on Form
 
10-K for the fiscal
 
year ended May
 
29, 2022.28, 2023. The
 
accounting policies used
 
in preparing these
 
Consolidated Financial
Statements are the same as those described in Note 2 to the Consolidated Financial
 
Statements in that Form 10-K.10-K with the exception of
new requirements adopted in the first quarter of fiscal 2024.
In the first quarter
of fiscal 2024, we
adopted optional accounting guidance
to ease the burden
in accounting for reference
rate reform.
The new
standard provides
temporary expedients
and exceptions
to existing
accounting requirements
for contract
modifications
and
hedge accounting
related to transitioning
from discontinued
reference rates.
This resulted in
modifying contracts,
where necessary,
to
apply a new reference rate,
primarily SOFR. The adoption of
this accounting guidance did not
have a material impact on our
results of
operations or financial position.
In the
first quarter
of fiscal
2024, we adopted
new requirements
for enhanced
disclosures related
to supplier
financing programs.
The
new standard requires
disclosure of the
key terms of
the program and
a rollforward of
the related obligation
during the annual
period,
including
the
amount
of
obligations
confirmed
and
obligations
subsequently
paid.
We
have
historically
presented
the
key
terms
of
these programs
and the associated
obligation outstanding
(please see Note
6). The
rollforward requirement
is effective
in fiscal 2025.
The adoption did not have a material impact on our financial statements and related
disclosures.
Certain terms used throughout this report are defined in the “Glossary” section below.
(2) AcquisitionsAcquisition and Divestiture
During
 
the first
 
quarter
 
of fiscal
 
2023,
 
we
 
acquired
 
TNT Crust,
 
a
 
manufacturer
 
of high-quality
 
frozen pizza
 
crusts
 
for
 
regional
 
and
national pizza
 
chains, foodservice
 
distributors, and
 
retail outlets,
 
for a
 
purchase price
 
of $
253.0
 
million. We
 
financed the
 
transaction
with U.S. commercial paper.
 
We consoliconsolidated
 
dated the TNT Crust business into
 
into our Consolidated Balance Sheets
 
Sheets and recorded goodwill
 
of
$
154.3156.7
 
million. The
 
goodwill is
 
included in
 
the North
 
America Foodservice
 
segment and
 
is not
 
deductible for
 
tax purposes.
 
The pro
forma
effects
of
this
acquisition
were
not
material.
 
We
have
conducted
a
preliminary
assessment
of
the
fair
value
of
the
acquired
assets
and
liabilities
of
the
TNT
Crust
business
and
will
continue
to
review
these
items
during
the
measurement
period.
If
new
information is obtained
about facts and circumstances
that existed at the
acquisition date, the
acquisition accounting will
be revised to
reflect the resulting adjustments to
current estimates of these items.
The consolidated results of the
TNT Crust business are reported
in
our North America Foodservice segment on a one-month lag.
During the
 
first quarter
 
of fiscal
 
2023,
 
we completed
 
the sale
 
of our
 
Helper main
 
meals and
 
Suddenly
 
Salad side
 
dishes business
 
to
Eagle Family Foods Group for $
606.8
 
million and recorded a pre-tax gain of $
442.2
 
million.
During
the
first
quarter
of
fiscal
2022,
we
acquired
Tyson
Foods’
pet
treats
business
for
$
1.2
billion
in
cash.
We
financed
the
transaction
with
a
combination
of
cash
on
hand
and
short-term
debt.
We
consolidated
the 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
aggregate,
and
a
finite-lived
customer
relationship
asset
of
$
40.0
million.
The
goodwill
is
included in the Pet segment and is deductible for tax purposes. The pro forma effects
of this acquisition were not material.
(3) Restructuring, Impairment, and Other Exit Costs
InDuring the six-month period
 
ended November 27, 2022,first quarter
of fiscal 2024,
 
we did not undertake
 
undertake any
new restructuring
 
actions. We
 
recorded $
11.69.8
 
million of restructuring
restructuring
charges
 
in
 
the
second first
 
quarter
 
of
fiscal
 
20232024
 
and
 
$
13.92.3
 
million
 
of
 
restructuring
 
charges
 
in
the
 
six-month
period
ended
November 27,
2022, related
to restructuring
actions previously
announced.
We
recorded $
2.7
million of
restructuring charges
in the
secondfirst
 
quarter
of
 
fiscal 2022
 
and2023 for
 
a $previously
1.4
million net
recovery of
restructuring
charges
in the
six-month
period
ended November
28,
2021, related toannounced restructuring actions previously announced.actions. We
 
expect these actions to be completed by the end of fiscal 2025.
fiscal 2024
.
InWe
 
thepaid net
 
second
quarter
of
fiscal
2023,
we
increased
the
estimate
of
restructuring
charges
that
we
expect
to
incur
related
to
our
previously announced
actions in the
International segment
to drive efficiencies
in manufacturing
and logistics operations.
As a result,
we recorded
a $
4.57.4
 
million increaseof
 
cash in
the first quarter
of fiscal 2024
related to our
 
restructuring reserveactions
 
primarily related
to estimated
severance charges.previously announced.
 
We
 
expect to
incurpaid net
approximately
$
25
million
of
restructuring
charges
and
project-related
costs
related
to
these
actions,
of
which
approximately
$
16
million will be
cash. These charges
are expected
to consist of
approximately $
1218.0
 
million of severance
and $
10
millioncash in the same period of other
costs,
primarily
asset write-offs.
We
also
expect
to
incur
approximately
$
3
million
of project-related
costs.
We
expect
these actions
to be
completed by the end of
fiscal 2024
.
In
the
second
quarter
of
fiscal
2023,
we
increased
the
estimate
of
restructuring
charges
that
we
expect
to
incur
related
to
our
previously
announced
global
organizational
structure
and
resource
realignment
actions.
As
a
result,
we
recorded
a
$
4.1
million
increase to our
restructuring reserve primarily
related to estimated
severance charges.
We
expect to incur
approximately $
140
million2023.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
11
10
ofRestructuring and impairment charges and project-related
 
costs are recorded in our Consolidated Statement of Earnings as follows:
Quarter Ended
In Millions
Aug. 27, 2023
Aug. 28, 2022
Cost of sales
$
8.6
$
0.7
Restructuring, impairment, and other exit costs
1.2
1.6
Total restructuring
 
charges
related
to
these
actions,
of
which
approximately
$
1159.8
million
will
be
cash.
These
charges
are
expected
to
consist
of
approximately
$
1052.3
Project-related costs classified in cost of sales
million
of
severance
and
approximately
$
350.8
million
of
other
costs.
We
expect
these
actions
to
be
completed by the end of
fiscal 2023
.
We
paid
net
$
27.6-
million
of
cash
in
the
six-month
period
ended
November
27,
2022,
related
to
restructuring
actions
previously
announced. We
paid net $
42.8
million of cash in the same period of fiscal 2022.
The roll forward of our restructuring and other exit cost reserves, included
 
in other current liabilities, is as follows:
In Millions
Total
Reserve balance as of May 29, 202228, 2023
$
36.847.7
Fiscal 20232024 charges, including foreign currency translation
7.51.2
Utilized in fiscal 20232024
(24.1)(6.4)
Reserve balance as of Nov.Aug. 27, 20222023
$
20.242.5
The reserve balance primarily consists of expected severance payments
 
associated with restructuring actions.
 
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,
 
accelerated depreciation,
 
the gain
 
or loss
 
on the
 
sale of
 
restructured assets,
 
and the
 
write-
off
 
of
 
spare parts)
 
and other
 
periodic
 
exit costs
 
are
 
recognized
 
as incurred,
 
as those
 
items are
 
not reflected
 
in our
 
restructuring
 
and
other exit cost reserves on our Consolidated Balance Sheets.
(4) Goodwill and Other Intangible Assets
The components of goodwill and other intangible assets are as follows:
 
 
In Millions
Nov.Aug. 27, 20222023
May 29, 202228, 2023
Goodwill
$
14,476.014,522.0
$
14,378.514,511.2
Other intangible assets:
Intangible assets not subject to amortization:
Brands and other indefinite-lived intangibles
6,706.66,715.0
6,725.86,712.4
Intangible assets subject to amortization:
Customer relationships and other finite-lived intangibles
401.9386.9
400.3386.3
Less accumulated amortization
(133.7)(136.2)
(126.2)(131.1)
Intangible assets subject to amortization, net
268.2250.7
274.1255.2
Other intangible assets
6,974.86,965.7
6,999.96,967.6
Total
$
21,450.821,487.7
$
21,378.421,478.8
Based
on
 
the carrying
 
value
of
 
finite-lived
intangible
 
assets as
 
of
November August
 
27,
2022, 2023,
 
annual
amortization
 
expense
for
 
each of
 
the next
next five fiscal years is estimated to be approximately $
20
 
million.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1211
The changes in the carrying amount of goodwill during the six-month periodfirst quarter of fiscal 2024
 
ended November 27, 2022, were as follows:
In Millions
North
America
Retail
Pet
North
America
Foodservice
International
Joint Ventures
Total
Balance as of May 29, 202228, 2023
$
6,552.96,542.4
$
6,062.8
$
648.8805.6
$
721.6708.4
$
392.4392.0
$
14,378.5
Acquisition
-
-
154.3
-
-
154.3
Divestiture
-
-
-
(0.4)
-
(0.4)14,511.2
Other activity, primarily
 
 
foreign currency translation
(6.4)0.1
-
-(0.1)
(37.5)8.2
(12.5)2.6
(56.4)10.8
Balance as of Nov.Aug. 27, 20222023
$
6,546.56,542.5
$
6,062.8
$
803.1805.5
$
683.7716.6
$
379.9394.6
$
14,476.014,522.0
The changes in the carrying amount of other intangible assets during the six-monthfirst quarter
 
period ended November 27, 2022,of fiscal 2024 were as follows:
In Millions
Total
Balance as of May 29, 202228, 2023
$
6,999.96,967.6
Acquisition
3.8
Other activity, primarily
Amortization, net of foreign currency translation
(28.9)(1.9)
Balance as of Nov.Aug. 27, 20222023
$
6,974.86,965.7
Our
 
annual
 
goodwill
 
and
 
indefinite-lived
 
intangible
 
assets
 
impairment
 
test
 
was
 
performed
 
on
 
the
 
first
 
day
 
of
 
the
 
second
 
quarter
 
of
fiscal
 
2023,
 
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
Uncle Toby’s
 
brand intangible
 
asset. In addition,
 
while having
 
significant coverage
 
as of
our fiscal 2023
 
assessment date, the
Progresso
 
and
EPIC
 
brand intangible assets had
 
had risk of decreasing coverage.
 
coverage. We
 
will continue to
monitor these businesses for potential impairment.
(5) Inventories
The components of inventories were as follows:
In Millions
Nov.Aug. 27, 20222023
May 29, 202228, 2023
Finished goods
$
2,093.0
$
2,066.9
Raw materials and packaging
$553.5
565.8
$
532.0
Finished goods
1,923.6
1,634.7572.2
Grain
156.1130.1
164.0133.8
Excess of FIFO over LIFO cost
(524.2)(547.8)
(463.4)(600.9)
Total
$
2,121.32,228.8
$
1,867.32,172.0
(6) Risk Management Activities
 
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 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.
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
operating results
 
until such time
 
time that
the exposure
 
we are manag
 
managinging affects
 
earnings. At
 
that time, we
 
we reclassify the
 
the gain or
 
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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1312
Unallocated corporate items for the quarters ended August 27, 2023, and six-month periods ended
 
November 27,August 28, 2022, and November 28, 2021, included:
Quarter Ended
Six-Month Period Ended
In Millions
Nov.Aug. 27, 20222023
Nov.Aug. 28, 2021
Nov. 27, 2022
Nov. 28, 2021
Net gain (loss) gain on mark-to-market valuation of certain
 
 
commodity positions
$
(20.9)28.4
$
16.6
$
(93.2)
$
47.0(72.3)
Net gainloss (gain) on commodity positions reclassified from
 
 
unallocated corporate items to segment operating profit
(20.5)3.2
(35.9)
(63.5)
(70.6)(43.0)
Net mark-to-market revaluation of certain grain inventories
16.313.3
31.4
(43.1)
59.8(59.4)
Net mark-to-market valuation of certain commodity
 
 
positions recognized in unallocated corporate items
$
(25.1)44.9
$
12.1
$
(199.8)
$
36.2(174.7)
As of
November
August 27,
2022, 2023,
 
the net
notional
value
of
commodity
 
derivatives
was $
429.4278.2
 
million,
of
which
$
158.1
million
related
to
energy inputs and $
271.3113.2
 
million related to energy
inputs and
$
165.0
million related
to agricultural
inputs. These
contracts relate
to inputs
that generally
 
will be
utilized within
the
next
12
 
months.
We
also have
net investments
in foreign
subsidiaries that
are denominated
in euros.
As of
August 27,
2023, we
hedged a
portion
of
these investments with €
2,954.1
million of euro-denominated bonds.
The
 
fair
 
values
 
of
 
the
 
derivative
 
positions
 
used
 
in
 
our
 
risk
 
management
 
activities
 
and
 
other
 
assets
 
recorded
 
at
 
fair
 
value
 
were
 
not
material
as
of
 
November
August 27,
2022 2023,
 
and
were
Level
 
1
or
Level
 
2
assets
and
 
liabilities
in
the
 
fair
value
 
hierarchy.
 
We
 
did
not significantly
significantly change our valuation techniques from prior periods.
 
We
 
offer
 
certain
 
suppliers
 
access
 
to
 
third
partythird-party
 
services
 
that
 
allow
 
them
 
to
 
view
 
our
 
scheduled
 
payments
 
online.
 
The
 
third-party
services also
 
allow 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 parties,
 
or any
financial
institutions
 
concerning
these
 
services.services, including
not providing
any form
of guarantee
and not
pledging assets
as security
to
the third
parties or
financial institutions.
 
All
of
 
our
accounts
 
payable
remain
 
as
obligations
 
to
our
 
suppliers
as
 
stated
in
 
our supplier
supplier agreements. As
 
As of August
 
November 27, 2023,
 
2022, $
1,477.41,362.8
 
million of
 
our total
 
accounts payable
 
were payable
 
to suppliers
 
who utilize
these third-party
 
these third-
party services. As
 
As of November
 
May 28,
 
2021,2023, $
1,378.11,430.1
 
million of
 
of our total
 
total accounts
payable
 
were payable
 
to suppliers
 
who
utilize these third-party services.
During
 
the
second
quarter
of
fiscal
2023,
we
entered
into
a
$these third-
500.0
million
notional
amount
interest
rate
swap
to
convert
our
$
500.0
million fixed rate notes due
November 18, 2025
, to a floating rate.party services.
(7) Debt
The components of notes payable were as follows:
 
 
In Millions
Nov.Aug. 27, 20222023
May 29, 202228, 2023
U.S. commercial paper
$
1,126.6529.2
$
694.8-
Financial institutions
26.855.1
116.631.7
Total
$
1,153.4584.3
$
811.431.7
To ensure availability
 
of funds, we maintain bank credit lines and have commercial paper programs
 
available to us in the United States
and Europe.
The following table details the fee-paid committed and uncommitted credit
 
lines we had available as of NovemberAugust 27, 2022:2023:
 
In Billions
Facility
 
Amount
Borrowed
Amount
Committed credit facility expiring April 2026
$
2.7
$
-
Uncommitted credit facilities
0.6
-
Total committed
 
and uncommitted credit facilities
$
3.3
$
-
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 NovemberAugust 27, 2022.2023.
Long-Term
 
Debt
 
The fair values
 
values and carrying
 
carrying amounts
of long-term
 
debt, including
 
the current portion,
 
portion, were
$
9,875.310,811.1
 
million and
$
10,586.811,698.1
 
million,
respectively,
 
as
of
 
November August
27,
 
2022. 2023.
The
 
fair
value
 
of
long-term
 
debt
was
 
estimated
using
 
market
quotations
 
and
discounted
 
cash
 
1413
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.
 
In the first
 
quarter of fiscal
2024, we issued
€
500.0
million of floating-rate
notes due
November 8, 2024
. We
used the net proceeds
to
repay €
500.0
million of floating-rate notes due
July 27, 2023
.
In the fourth quarter
of fiscal 2023, we
issued €
250.0
million of floating-rate notes
due
November 10, 2023
. We
used the net proceeds
to repay €
250.0
million of floating-rate notes due
May 16, 2023
.
In the
 
fourth quarter
of fiscal
2023, we
issued €
750.0
million of
3.907
percent fixed-rate
notes due
April 13, 2029
. We
used the
net
proceeds to repay €
500.0
million of
1.0
percent fixed-rate notes due
April 27, 2023
, and €
250.0
million of floating-rate notes due
May
16, 2023
.
In the fourth
quarter of fiscal
2023, we
issued $
1,000.0
million of
4.95
percent fixed-rate
notes due
March 29, 2033
. We
used the net
proceeds to repay our outstanding commercial paper and for general
corporate purposes.
In the second
 
quarter
of
fiscal
 
2023,
we
issued
 
$
500.0
 
million
of
5.241
 
percent
fixed-rate notes
 
due
November 18, 2025
.
We
 
used
the
net
net proceeds to repay a portion of our outstanding commercial paper and for general
 
for general corporate purposes.
In the
 
second quarter
 
of fiscal
 
2023, we
 
issued €
250.0
 
million of
 
floating-rate notes
 
due
May 16, 2023
.
We
 
used the
 
net proceeds
 
to
repay €
250.0
 
million of
0.0
 
percent fixed-rate notes due
November 11, 2022
.
In the
 
the fourth
second quarter
 
of fiscal
 
2022,2023,
 
we repaid
 
$
850.0500.0
 
million
of
3.72.6
 
percent fixed-rate
 
fixed
rate notes
due
October 17, 202312, 2022
, using
 
proceeds
from the issuance of commercial paper.
In the fourth quarter of fiscal 2022, we issued €
250.0
Certain
 
million of
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
million of
0.125
percent fixed-rate notes due
November 15, 2025
. We used the
net proceeds to repay a portion of our €
500.0
million of
0.0
percent fixed-rate notes due
November 16, 2021
, and for general corporate
purposes.
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
. We used the net proceeds to
repay
€
500.0
million of
0.0
percent fixed-rate notes due
August 21, 2021
.
In the first quarter of fiscal 2022, we repaid €
200.0
million of
2.2
percent fixed-rate notes due
June 24, 2021
, using proceeds from the
issuance of €
50.0
million of
2.2
percent fixed-rate notes due
November 29, 2021
, and borrowings under a committed credit facility.
Certain of our
 
long-term
debt
agreements
 
contain
restrictive
 
covenants.
As of NovemberAugust 27, 2022,2023, we were in compliance with all of
these covenants.
(8) Redeemable and Noncontrolling Interests
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
$
251.5
 
million). The
 
Onfloating preferred return
 
June 1,rate on GMC’s
 
2021,Class A Interests is
the
sum
of
 
the
three-month Term SOFR
 
floatingplus
186
basis
points.
The
 
preferred
 
return
 
rate
 
onis
 
GMC’s
Class A Interests
was reset
to the
sum of
three-month LIBOR
plus
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.
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
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.
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 noncontrolling interests were included
in the calculation of the gain on divestiture.
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.
Our noncontrolling interests contain restrictive covenants. As of NovemberAugust 27, 2022,2023, we were in compliance with all of these
covenants.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1514
(9) Stockholders’ Equity
 
The following tables provide details of total comprehensive income:
Quarter Ended
Quarter Ended
Nov.Aug. 27, 20222023
Nov.Aug. 28, 20212022
General Mills
Noncontrolling
Interests
 
General Mills
Noncontrolling
Interests
Redeemable
Interest
In Millions
Pretax
Tax
Net
Net
Pretax
Tax
Net
Net
Net
Net earnings, including earnings
attributable to redeemable and
noncontrolling interests
 
$
605.9673.5
$
2.46.8
$
597.2820.0
$
1.9
$
9.33.3
Other comprehensive (loss) income:
Foreign currency translation
$
(144.7)(22.0)
$
29.13.8
(115.6)(18.2)
0.60.1
$
(29.0)(48.0)
$
27.853.1
(1.2)5.1
(13.8)
(23.5)(1.3)
Other fair value changes:
Hedge derivatives
26.8(2.7)
(6.0)0.4
20.8(2.3)
-
29.1(49.8)
(11.0)11.5
18.1(38.3)
-
0.6
Reclassification to earnings:
Foreign currency translation
-
-
-
-
(7.4)
-
(7.4)
-
Hedge derivatives (a)
1.8(1.3)
(0.8)1.5
1.00.2
-
(12.1)(1.9)
6.00.5
(6.1)(1.4)
-
(0.3)
Amortization of losses and
 
prior service costs (b)
18.311.5
(2.4)
9.1
-
18.2
(4.1)
14.2
-
29.2
(6.4)
22.8
-14.1
-
Other comprehensive (loss) income
$
(97.8)(14.5)
$
18.23.3
(79.6)(11.2)
0.60.1
$
17.2(88.9)
$
16.461.0
33.6(27.9)
(13.8)
(23.2)(1.3)
Total comprehensive income (loss)
$
526.3662.3
$
3.06.9
$
$
630.8792.1
$
(11.9)
$
(13.9)2.0
(a)
 
(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.
(b)
 
Loss reclassified from AOCI into earnings is reported in benefit plan non-service income.
Six-Month Period Ended
Six-Month Period Ended
Nov. 27, 2022
Nov. 28, 2021
General Mills
Noncontrolling
Interests
General Mills
Noncontrolling
Interests
Redeemable
Interest
In Millions
Pretax
Tax
Net
Net
Pretax
Tax
Net
Net
Net
Net earnings, including earnings
attributable to redeemable and
noncontrolling interests
$
1,425.9
$
5.7
$
$
1,224.2
$
4.9
$
17.5
Other comprehensive (loss) income:
Foreign currency translation
$
(86.7)
$
(23.8)
(110.5)
(0.7)
$
(40.9)
$
50.5
9.6
(25.0)
(47.0)
Other fair value changes:
Hedge derivatives
(23.0)
5.5
(17.5)
-
31.9
(12.0)
19.9
-
0.5
Reclassification to earnings:
Foreign currency translation (a)
(7.4)
-
(7.4)
-
-
-
-
-
-
Hedge derivatives (b)
(0.1)
(0.3)
(0.4)
-
(0.1)
4.5
4.4
-
(0.2)
Amortization of losses and
prior service costs (c)
36.5
(8.2)
28.3
-
40.0
(8.8)
31.2
-
-
Other comprehensive (loss) income
$
(80.7)
$
(26.8)
(107.5)
(0.7)
$
30.9
$
34.2
65.1
(25.0)
(46.7)
Total comprehensive income (loss)
$
1,318.4
$
5.0
$
$
1,289.3
$
(20.1)
$
(29.2)
(a)
Gain reclassified from AOCI into earnings is reported in the divestitures gain, net.
(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)
Loss reclassified from AOCI into earnings is reported in benefit plan non-service income.
Accumulated other comprehensive loss balances, net of tax effects,
 
were as follows:
 
In Millions
Nov.Aug. 27, 20222023
May 29, 202228, 2023
Foreign currency translation adjustments
$
(708.6)(726.8)
$
(590.7)(708.6)
Unrealized gain from hedge derivatives
5.43.8
23.35.9
Pension, other postretirement, and postemployment benefits:
Net actuarial loss
(1,477.0)(1,655.7)
(1,513.4)(1,670.6)
Prior service credits
102.290.6
110.396.4
Accumulated other comprehensive loss
$
(2,078.0)(2,288.1)
$
(1,970.5)(2,276.9)
(10) Stock Plans
We
 
have various
 
stock-based compensation
 
programs under
 
which awards,
 
including stock
 
options, restricted
 
stock, restricted
 
stock
units, and performance
 
awards, may be granted
 
to employees and non-employee
 
directors. These programs
 
and related accounting
 
are
described in Note
 
12 to the
 
Consolidated Financial
 
Statements included
 
in our Annual
 
Report on Form
 
10-K for the
 
fiscal year ended
May 29, 2022.28, 2023.
Compensation expense related to stock-based payments recognized
in the Consolidated Statements of Earnings was as follows:
Quarter Ended
In Millions
Aug. 27, 2023
Aug. 28, 2022
Compensation expense related to stock-based payments
$
35.3
$
33.5
Windfall tax benefits from stock-based payments
in income tax expense in our Consolidated Statements of Earnings
were as follows:
Quarter Ended
In Millions
Aug. 27, 2023
Aug. 28, 2022
Windfall tax benefits from stock-based payments
$
8.4
$
12.8
As
of
August
27,
2023,
unrecognized
compensation
expense
related
to
non-vested
stock
options,
restricted
stock
units,
and
performance share units was $
172.2
million. This expense will be recognized over
25
months, on average.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1615
Compensation expense related to stock-based payments recognized
in the Consolidated Statements of Earnings was as follows:
Quarter Ended
Six-Month Period Ended
In Millions
Nov. 27, 2022
Nov. 28, 2021
Nov. 27, 2022
Nov. 28, 2021
Compensation expense related to stock-based payments
$
24.1
$
13.9
$
57.6
$
47.5
Compensation
expense
related
to
stock-based
payments
recognized
in
the
Consolidated
Statements
of
Earnings
includes
amounts
recognized in restructuring, impairment, and other exit costs in fiscal 2022.
Windfall tax benefits from stock-based payments
in income tax expense in our Consolidated Statements of Earnings were as follows:
Quarter Ended
Six-Month Period Ended
In Millions
Nov. 27, 2022
Nov. 28, 2021
Nov. 27, 2022
Nov. 28, 2021
Windfall tax benefits from stock-based payments
$
5.6
$
1.6
$
18.4
$
6.3
As
of
November
27,
2022,
unrecognized
compensation
expense
related
to
non-vested
stock
options,
restricted
stock
units,
and
performance share units was $
147.4
million. This expense will be recognized over
23
months, on average.
Net cash proceeds from the exercise of stock options
 
less shares used for withholding taxes and the intrinsic
 
value of options exercised
were as follows:
 
Six-Month PeriodQuarter Ended
In Millions
Nov.Aug. 27, 20222023
Nov.Aug. 28, 20212022
Net cash proceeds
$
118.54.5
$
26.165.5
Intrinsic value of options exercised
$
55.72.1
$
12.132.0
We estimate the fair value of each stock option on the grant date using a Black-Scholes option-pricing model. Black-Scholes option-
pricing models require us to make predictive assumptions regarding future stock price volatility, employee exercise behavior, and
dividend yield. 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 method of selecting
the other valuation assumptions is explained in Note 12 to the Consolidated Financial Statements included in our Annual Report on
Form 10-K for the fiscal year ended May 29, 2022.28, 2023.
The
 
estimated
 
fair
 
values
 
of
 
stock
 
options
 
granted
 
and
 
the
 
assumptions
 
used
 
for
 
the
 
Black-Scholes
 
option-pricing
 
model
 
were
 
as
follows:
Six-Month PeriodQuarter Ended
Nov.Aug. 27, 20222023
Nov.Aug. 28, 20212022
Estimated fair values of stock options granted
 
$
14.1617.47
$
8.7714.16
Assumptions:
Risk-free interest rate
3.34.0
%
1.53.3
%
Expected term
8.5
years
8.5
years
Expected volatility
20.921.4
%
20.220.9
%
Dividend yield
3.12.8
%
3.43.1
%
The total grant date fair value of restricted stock unit awards that vested during
 
the period was as follows:
Six-Month PeriodQuarter Ended
In Millions
Nov.Aug. 27, 20222023
Nov.Aug. 28, 20212022
Total grant date fair
 
value
$
102.6104.8
$
76.082.0
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1716
(11) Earnings Per Share
Basic and diluted earnings per share (EPS) were calculated using the following:
 
Quarter Ended
Six-Month Period Ended
In Millions, Except per Share Data
Nov.Aug. 27, 20222023
Nov.Aug. 28, 2021
Nov. 27, 2022
Nov. 28, 2021
Net earnings attributable to General Mills
$
605.9673.5
$
597.2
$
1,425.9
$
1,224.2820.0
Average number
 
number of common shares - basic EPS
595.9586.3
608.6
598.0
609.5600.2
Incremental share effect from: (a)
Stock options
3.72.8
2.2
3.6
2.13.3
Restricted stock units and performance share units
2.42.3
2.2
2.4
2.22.5
Average number
 
number of common shares - diluted EPS
602.0591.4
613.0
604.0
613.8606.0
Earnings per share – basic
$
1.011.15
$
0.98
$
2.38
$
2.011.37
Earnings per share – diluted
$
1.011.14
$
0.97
$
2.36
$
1.991.35
(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
:
Quarter Ended
Six-Month Period Ended
In Millions
Nov.Aug. 27, 20222023
Nov.Aug. 28, 2021
Nov. 27, 2022
Nov. 28, 2021
Anti-dilutive stock options, restricted stock units, and
 
performance share units
 
1.01.6
4.6
1.0
4.70.8
(12) Share Repurchases
Share repurchases were as follows:
 
Quarter Ended
Six-Month Period Ended
In Millions
Nov.Aug. 27, 20222023
Nov.Aug. 28, 2021
Nov. 27, 2022
Nov. 28, 2021
Shares of common stock
5.26.4
3.7
12.1
6.26.9
Aggregate purchase price
$
400.5504.7
$
224.9
$
901.3
$
375.0500.8
(13) Statements of Cash Flows
Our Consolidated Statements of Cash Flows include the following:
 
Six-Month PeriodQuarter Ended
In Millions
Nov.Aug. 27, 20222023
Nov.Aug. 28, 20212022
Net cash interest payments
$
154.383.9
$
185.755.2
Net income tax payments
$
365.413.7
$
271.19.0
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1817
(14) Retirement and Postemployment Benefits
Components of net periodic benefit expense (income) are as follows:
 
Defined Benefit
Pension Plans
Other Postretirement
 
Benefit Plans
Postemployment
Benefit Plans
Quarter Ended
Quarter Ended
Quarter Ended
In Millions
Nov.Aug. 27,
2023
Aug. 28,
2022
Nov.Aug. 27,
2023
Aug. 28,
2021
Nov. 27,
2022
Nov.Aug. 27,
2023
Aug. 28,
2021
Nov. 27,
2022
Nov. 28,
2021
Service cost
$
17.514.2
$
23.517.6
$
1.2
$
1.91.4
$
1.8
$
2.1
$
1.7
Interest cost
74.2
64.6
46.15.3
4.5
3.11.0
0.8
0.3
Expected return on plan assets
(102.9)
(105.0)
(102.9)(8.7)
(7.8)
(6.7)
-
-
Amortization of losses (gains)
28.421.5
35.528.3
(4.8)(5.1)
(2.7)(4.9)
-
0.70.1
Amortization of prior service costs (credits)
0.30.4
0.20.4
(5.7)(5.4)
(5.2)(5.8)
0.1
0.1
Other adjustments
-
-
-
-
2.92.6
3.8
Curtailment loss (gain)
-
0.5
-
(0.2)
-
-3.0
Net expense (income)
$
5.87.4
$
2.95.9
$
(12.7)
$
(12.6)
$
(9.8)5.5
$
5.96.1
$
6.6
Defined Benefit
Pension Plans
Other Postretirement
 
Benefit Plans
Postemployment
Benefit Plans
Six-Month
Period Ended
Six-Month
Period Ended
Six-Month
Period Ended
In Millions
Nov. 27,
2022
Nov. 28,
2021
Nov. 27,
2022
Nov. 28,
2021
Nov. 27,
2022
Nov. 28,
2021
Service cost
$
35.1
$
47.2
$
2.6
$
3.8
$
4.2
$
3.5
Interest cost
129.2
92.4
9.0
6.3
1.6
0.7
Expected return on plan assets
(210.0)
(205.7)
(15.6)
(13.4)
-
-
Amortization of losses (gains)
56.7
70.4
(9.7)
(5.4)
0.1
1.5
Amortization of prior service costs (credits)
0.7
0.4
(11.5)
(10.4)
0.2
0.2
Other adjustments
-
-
-
-
5.9
5.7
Curtailment gain
-
(14.3)
-
(5.7)
-
-
Net expense (income)
$
11.7
$
(9.6)
$
(25.2)
$
(24.8)
$
12.0
$
11.6
(15) Income Taxes
During
 
the
 
first
 
quarter
 
of
 
fiscal
 
2023,
 
the
 
Inflation
 
Reduction
 
Act
 
(IRA)
 
was
 
signed
 
into
 
law.
 
The
 
IRA
 
introduces
 
a
 
Corporate
Alternative Minimum Tax
 
beginning in our fiscal 2024
 
and an excise tax on the
 
the repurchase of corporate
 
stock starting after January
 
1,
2023. We
 
do not
currently expect the
IRA to have
a material impact
on our financial
 
results, including our
annual estimated effective
tax
 
rate,
or
on
our
liquidity.
We
will
continue
to
monitor
and
assess
the
impact
the
IRA
may
have
on
our
business
and
financial
results.
During fiscal
2022, the
Brazilian tax
authority,
Secretaria da
Receita Federal
do Brasil
(RFB), concluded
audits of
on 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.liquidity.
(16) Contingencies
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
November
August 27,
2022,
2023, we
are
unable
to estimate
estimate any possible loss and have not recorded a loss contingency for
this matter.
(17) Business Segment and Geographic Information
We
 
operate
 
in
 
the
 
packaged
 
foods
 
industry.
 
In
fiscal
2022,
we
completed
a
new
organization
structure
to
streamline
our
global
operations.
This
global
reorganization
required
us
to
reevaluate
ourOur
 
operating
 
segments.segments
 
Underare
 
ouras
 
newfollows:
 
organizationNorth
 
structure,America
 
ourRetail,
International,
19
chief operating decision maker assesses performancePet,
 
and makes decisions about resources to be allocated to
our 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
to reflect our
previously reported
operating segment
change.
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 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
 
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 shelf-stable vegetables,
meal kits, fruit
snacks, and snack
bars, and
refrigerated
yogurt. bars.
Our
 
International
 
operating
 
segment
 
consists
 
of
 
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.
 
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 are
reported in the region or country where the end customer is located.
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,
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 bakery
 
flour.
 
Many products we
 
sell are branded
 
to the consumer
18
and nearly
 
all are
 
branded to
 
our customers.
 
We
 
sell to
 
distributors and
 
operators in
 
many customer
 
channels including
 
foodservice,
vending, and supermarket bakeries.
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
 
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:
Quarter Ended
In Millions
Aug. 27, 2023
Aug. 28, 2022
Net sales:
North America Retail
$
3,073.0
$
2,988.8
International
715.8
652.5
Pet
579.9
579.9
North America Foodservice
536.0
496.4
Total
$
4,904.7
$
4,717.6
Operating profit:
North America Retail
$
798.2
$
777.8
International
50.0
34.8
Pet
111.2
123.1
North America Foodservice
59.1
53.6
Total segment operating
profit
$
1,018.5
$
989.3
Unallocated corporate items
87.3
333.0
Divestitures gain, net
-
(430.9)
Restructuring, impairment, and other exit costs
1.2
1.6
Operating profit
$
930.0
$
1,085.6
Net sales for our North America Retail operating units were as follows:
Quarter Ended
In Millions
Aug. 27, 2023
Aug. 28, 2022
U.S. Snacks
$
954.5
$
887.2
U.S. Meals & Baking Solutions
941.9
949.2
U.S. Morning Foods
927.8
904.0
Canada
248.8
248.4
Total
$
3,073.0
$
2,988.8
19
Net sales by class of similar products were as follows:
Quarter Ended
In Millions
Aug. 27, 2023
Aug. 28, 2022
Snacks
$
1,136.7
$
1,068.4
Cereal
817.9
814.7
Convenient meals
665.5
679.2
Pet
579.9
580.8
Dough
534.9
464.8
Baking mixes and ingredients
466.5
473.5
Yogurt
368.4
346.0
Super-premium ice cream
224.0
183.5
Other
110.9
106.7
Total
$
4,904.7
$
4,717.6
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
20
Our operating segment results were as follows:
Quarter Ended
Six-Month Period Ended
In Millions
Nov. 27, 2022
Nov. 28, 2021
Nov. 27, 2022
Nov. 28, 2021
Net sales:
North America Retail
$
3,373.1
$
3,044.6
$
6,361.9
$
5,755.2
International
671.7
914.4
1,324.2
1,845.0
Pet
592.9
593.4
1,172.8
1,081.4
North America Foodservice
583.0
471.6
1,079.4
882.3
Total
$
5,220.7
$
5,024.0
$
9,938.3
$
9,563.9
Operating profit:
North America Retail
$
837.1
$
675.4
$
1,614.9
$
1,324.0
International
17.8
59.4
52.6
120.0
Pet
86.6
131.5
209.7
246.7
North America Foodservice
81.5
67.9
135.1
139.7
Total segment operating
profit
$
1,023.0
$
934.2
$
2,012.3
$
1,830.4
Unallocated corporate items
212.1
131.8
545.1
188.0
Divestitures gain, net
-
-
(430.9)
-
Restructuring, impairment, and other exit costs (recoveries)
11.1
2.3
12.7
(2.0)
Operating profit
$
799.8
$
800.1
$
1,885.4
$
1,644.4
Net sales for our North America Retail operating units were as follows:
Quarter Ended
Six-Month Period Ended
In Millions
Nov. 27, 2022
Nov. 28, 2021
Nov. 27, 2022
Nov. 28, 2021
U.S. Meals & Baking Solutions
$
1,321.7
$
1,203.1
$
2,270.9
$
2,064.6
U.S. Morning Foods
908.5
826.7
1,812.5
1,656.4
U.S. Snacks
892.9
757.2
1,780.1
1,537.3
Canada
250.0
257.6
498.4
496.9
Total
$
3,373.1
$
3,044.6
$
6,361.9
$
5,755.2
Net sales by class of similar products were as follows:
Quarter Ended
Six-Month Period Ended
In Millions
Nov. 27, 2022
Nov. 28, 2021
Nov. 27, 2022
Nov. 28, 2021
Snacks
$
1,102.8
$
947.6
$
2,171.2
$
1,902.1
Cereal
810.9
742.2
1,625.6
1,473.2
Convenient meals
786.4
789.8
1,465.6
1,485.3
Dough
745.6
607.0
1,210.4
1,012.2
Pet
593.7
593.4
1,174.5
1,081.4
Baking mixes and ingredients
563.7
517.2
1,037.2
913.5
Yogurt
357.5
507.1
703.5
1,013.0
Super-premium ice cream
164.9
200.0
348.4
444.8
Other
95.2
119.7
201.9
238.4
Total
$
5,220.7
$
5,024.0
$
9,938.3
$
9,563.9
21
Item 2.
 
Management’s Discussion and Analysis
 
of Financial Condition and Results of Operations.
INTRODUCTION
This
 
Management’s
 
Discussion
 
and
 
Analysis
 
of
 
Financial
 
Condition
 
and
 
Results
 
of
 
Operations
 
(MD&A)
 
should
 
be
 
read
 
in
conjunction
 
with
 
the
 
MD&A
 
included
 
in
 
our
 
Annual
 
Report
 
on
 
Form
 
10-K
 
for
 
the
 
fiscal
 
year
 
ended
 
May
 
29,28,
 
20222023
 
for
 
important
background
 
regarding,
 
among other
 
things, our
 
key business
 
drivers.
 
Significant
 
trademarks and
 
service marks
 
used in
 
our business
are set forth in
italics
herein. Certain terms used throughout this report are defined in the
 
“Glossary” section below.
We
expect the largest
 
the largest factors impacting our performance
 
performance in fiscal 2023 2024
will be the economic
 
the economic health of consumers, the
 
inflationary costmoderating rate
environment, and the frequency andof input
 
severity of disruptions in the supply
chain. We
anticipate double-digit input cost inflation
 
in fiscal
2023,
 
and
 
arethe increasing
 
addressingstability of
 
inflationthe supply
 
headwindschain environment
 
with
Holistic
Margin
Management
(HMM)
cost
savings
and
net
price
realization
generated
through
our
Strategic
Revenue
Management
(SRM)
capability..
 
We
 
are
planning
for
volume
elasticitiesexpect
 
to drive
 
increaseorganic
 
butnet sales
remain below historical levels and supply chain disruptions to slowly moderategrowth
 
in
fiscal 20232024
through strong
marketing, innovation,
in-store support,
and net
price realization
generated through
our Strategic
Revenue
Management (SRM)
capability,
most of
which will
be carried
over from
SRM actions
taken in
fiscal 2023.
We
anticipate input
cost
inflation of
approximately 5
percent in
fiscal 2024
and expect
to generate
higher levels
of Holistic
Margin Management
(HMM) cost
savings compared to fiscal 2022 levels.2023.
CONSOLIDATED
 
RESULTS
 
OF OPERATIONS
SecondFirst Quarter Results
In the first
 
second quarter
of fiscal
 
2023,
2024, net sales
 
increasedand organic net
 
sales increased 4 percent
and organic
net sales
increased
11
 
percent compared to
the same period
last year.
Operating
profit decreased
14 percent
 
to the$930
 
same
periodmillion, primarily
 
lastdriven by
 
year.a net
 
Operatinggain on
 
profitdivestitures
 
essentially
matched
the
second
quarter
of
in fiscal
 
2022
at
$800 million
as
favorable
net
price
realization and
mix was offset
by2023, higher
 
input costs, a
 
decrease in contributions
from volume growth
,
lower net corporate
investment
activity,and
 
an unfavorable change to
increase in selling,
 
general and administrative
(SG&A) expenses, including
increased media and
advertising expenses, partially
offset
by favorable net price
realization and mix
and a favorable change
to the mark-to-market valuation
 
of certain commodity positions
 
positions and
grain
 
inventories, and an increase
in
certain
selling,
general
and
administrative
(SG&A)
expenses.inventories.
 
Operating
 
profit
 
margin
 
of
 
15.319.0
 
percent
 
decreased
 
60 400
basis
 
points.
Adjusted
 
operating
 
profit
 
of $880
$899
 
million
increased
7
2 percent
on
 
a
constant-currency
basis,
primarily
 
driven by favorable net price
 
by
favorable
net
price
realization and
mix, partially offset
 
by higher
input costs, an
 
input costs,increase in SG&A
expenses, including
increased media and
advertising expenses, and
 
a decrease in
 
in contributions from
from volume
 
growth, andgrowth.
 
an increase in
SG&A
expenses. Adjusted
 
operating
profit
 
margin increased
 
60 decreased
40
basis
points
 
to 16.9
18.3
 
percent.
Diluted
earnings
per
share
of
$1.14
decreased 16 percent in the first
quarter of fiscal 2024. Adjusted diluted
 
earnings per share of $1.09 decreased 1
 
share of
$1.01 increased
4
percent in the
second quarter of
fiscal 2023. Adjusted
diluted earnings
per share of
$1.10 increased
12 percent on a
constant-currency constant-
currency basis compared
 
to
the
second
first quarter
 
of
fiscal
2022. 2023.
 
See
the
“Non-GAAP “Non-GAAP
 
Measures”
section
below
 
for
a
description
 
of
our
use
of
of measures not defined by GAAP.
A summary of our consolidated financial results for the secondfirst quarter of
 
of fiscal 20232024 follows:
 
Quarter Ended Nov.Aug. 27, 20222023
In millions,
except per share
Quarter Ended
Nov.Aug. 27, 20222023 vs.
Nov.Aug. 28, 20212022
Percent
of Net
Sales
Constant-
Currency
Growth (a)
Net sales
 
$
5,220.74,904.7
4
%
Operating profit
799.8930.0
Flat(14)
15.3%
19.0
%
Net earnings attributable to General Mills
605.9673.5
1(18)
%
Diluted earnings per share
$
1.011.14
4(16)
%
Organic net sales growth rate (a)
114
%
Adjusted operating profit (a)
879.7899.0
72
%
16.918.3
%
72
%
Adjusted diluted earnings per share (a)
$
1.101.09
11(2)
%
12(1)
%
(a)
 
See the "Non-GAAP Measures" section below for our use of measures not defined by
GAAP.
Consolidated
net sales
 
were as follows:
 
Quarter Ended
Nov.Aug. 27, 20222023
Nov.Aug. 27, 20222023 vs.
 
Nov.Aug. 28, 20212022
Nov.Aug. 28, 20212022
Net sales (in millions)
$
5,220.74,904.7
4%
$
5,024.04,717.6
Contributions from volume growth (a)
(12)(2)
pts
Net price realization and mix
176
pts
Foreign currency exchange
(1)
ptFlat
Note: Table may
not foot due to rounding.
(a)
 
Measured in tons based on the stated weight of our product shipments.
 
 
 
 
 
 
 
 
 
 
 
22
21
Net sales in
 
in the second
first quarter
 
of fiscal 2023
2024
 
increased 4 percent
 
percent compared
to the
 
same period
in fiscal
2023,
driven by
favorable
net
price realization and mix, partially offset by a decrease in
 
fiscal 2022, driven
by favorable net
price
realization
and
mix,
partially
offset
by
a
decrease
in
contributions
from
volume
growth
and
unfavorable
foreign
currency
exchange. growth.
Components of organic net sales growth are shown in the following
 
table:
 
 
Quarter Ended Nov.Aug. 27, 20222023 vs.
Quarter Ended Nov.Aug. 28, 20212022
Contributions from organic volume growth (a)
(6)(2)
pts
Organic net price realization and mix
177
pts
Organic net sales growth
114
pts
Foreign currency exchange
(1)
ptFlat
Acquisitions and divestitures
(5)
ptsFlat
Net sales growth
4
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 increased 4 percent
 
net salesin the first quarter of fiscal 2024 compared
 
increased 11to the same period in fiscal 2023, driven by favorable
organic net price realization and mix, partially offset
 
percentby a decrease in contributions from organic volume growth
.
Cost of
sales
decreased $136 million
to $3,134
million in
 
the secondfirst
 
quarter of
 
fiscal 20232024
 
compared to
 
the same
 
period in
 
fiscal 2022,
as favorable
organic net price realization and mix was partially offset
by a decrease in contributions from organic volume growth.
Cost of sales
increased $123 million to $3,516 million in the second quarter of
fiscal 2023 compared to the same period in fiscal 2022.2023.
The increase
was primarily
driven bydecrease included
 
a $489$54 million
increase attributable
to product
rate and
mix partially
offset
by a
$406 million
decrease attributable
 
to lower volume.volume and
 
a $150 million increase attributable
to product rate and
mix. We
 
recorded a $25
$45 million
 
net increase indecrease
 
in cost
of sales
 
related to the
 
the mark-to-market
valuation of
of certain commodity
positions
and grain inventories in the second
first quarter of fiscal 2023 2024
compared to a $12$175 million net decreaseincrease in the
second first quarter
 
quarter of
fiscal 2022.2023.
 
In the
secondfirst quarter
 
of fiscal
 
2023, we
 
we recorded a
 
$3 a $21
million
charge
 
related
 
to a
 
voluntary recall
 
on certain
certain international
Häagen-Dazs
 
ice
cream products.
We
also recorded $9
million of restructuring
charges and $1
million of restructuring
initiative project-related
costs in
cost of sales in the first
quarter of fiscal 2024 compared
to $1 million of restructuring
charges in the first
quarter of fiscal 2023 (please
refer to Note 3 to the Consolidated Financial Statements in Part I, Item 1 of this report).
SG&A
expenses
increased
$65 $48 million
 
to
$894 $839 million
in
 
the
second
first quarter
 
of
fiscal
2023, 2024,
 
compared
to
the
 
same
period
in
 
fiscal 2023,
2022,
primarily
driven
 
by
valuation
adjustments
and
the
loss
on
sale
of
certain
corporate
investments
and
increased
 
media and
 
and
advertising expenses
in fiscal
2023.expenses.
 
SG&A expenses
 
as a
 
percent of
 
net sales
 
in the
 
secondfirst quarter
 
of fiscal
2023 increased
60 basis
2024 increased 30 basis points compared to the secondfirst quarter of fiscal 2022.2023.
Restructuring,Divestitures
 
impairment,gain,
 
and othernet
 
exit costs
totaled $11$431
 
million of
expense in
 
the secondfirst
 
quarter of
 
fiscal 2023,
 
comparedprimarily related
 
to the
sale of
our Helper
main meals
$and
Suddenly
Salad
side
dishes
business
(please
refer
to
Note
2
to
the
Consolidated
Financial
Statements
in
Part
I,
Item
1
of
this
report).
Restructuring, impairment,
and other exit
costs
totaled $1 million of expense
 
in the first
quarter of fiscal
2024,
compared to $2
million in the
same period
last year (please refer
to Note 3
to the Consolidated Financial
 
Financial Statements in
Part I, Item
1 of
this report).
Benefit plan
non-service income
totaled $22$17 million
in the second
first quarter
 
of fiscal 2023, compared to $28
 
2024, compared
to $22 million
in the
same period
last year, primarily reflecting an increase
 
in interest costs, partially offset by lower amortization of losses.
 
Interest,
 
net
for
 
the
 
secondfirst
 
quarter
 
of
 
fiscal
 
20232024
 
totaled
 
$92117 million,
 
downup
 
$129 million
 
from
 
the
 
secondfirst
 
quarter
 
of
fiscal
 
2022,2023,
primarily
primarily driven by lowerhigher interest rates and higher average long-term debt levels, partially offset
by higher interest rates.levels.
The
effective tax rate
 
for the secondfirst quarter of fiscal
 
of fiscal 20232024 was 20.220.9 percent compared
 
percent compared to 21.7
21.2 percent for the secondfirst
 
quarter of fiscal 2023.
2022.
The
 
1.50.3
 
percentage
 
point
 
decrease
 
was
 
primarily
 
due
 
to
 
certain
 
nonrecurring
discreteunfavorable
 
tax
 
components
related
to
the
divestitures
in
the
first
quarter of
fiscal 2023,
partially offset
by certain
nonrecurring discrete
tax benefits
 
in the
first quarter
of fiscal
2023 and
 
favorable
changes
inunfavorable
earnings mix
 
by jurisdiction
 
in the
first quarter
of fiscal
 
2023.2024. Our
 
effective tax
 
tax rate excluding
 
excluding certain items
 
items affecting comparability
 
comparability
was
21.1
percent
 
in
the
 
secondfirst
 
quarter
 
of
 
fiscal
 
2023,2024,
 
compared
 
to
 
22.319.7
 
percent
 
in
 
the
 
same
 
period
 
last
 
year
 
(see
 
the
 
“Non-GAAP
Measures”
 
section
below
below
for
a
description
 
of
our
use
of
 
measures
not
defined
by
 
GAAP).
The 1.2
1.4
percentage
 
point decrease was
 
increase
was
primarily
due
to
 
certain
nonrecurring
nonrecurring
discrete
tax
benefits
in
the
first
quarter
of
fiscal
2023
and favorable changes in
unfavorable
earnings
 
mix
by
jurisdiction in the first quarter of fiscal 2023.2024.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
22
After-tax
 
earnings from
 
23
After-tax earnings from joint
ventures
 
for the second
first quarter
of fiscal 2023
2024
decreasedincreased to $25
$24 million compared
to $33$20 million
 
in the
same period
in fiscal 2022,2023,
 
primarily driven by higher net
sales as a result of favorable
net price realization and mix
at Cereal Partners
Worldwide
(CPW) and
favorable
discrete tax
items at
CPW,
partially
offset
 
by higher
 
input
costs at
 
Cereal Partners Worldwide
(CPW) and Häagen
-Dazs Japan, Inc.
(HDJ)CPW and
 
lower netHäagen-Dazs
 
sales atJapan,
Inc. (HDJ). On
 
HDJ, partiallya constant-currency basis,
 
offset byafter-tax earnings from
 
favorable netjoint ventures increased 26
 
price realization
and mix
at CPW.
On a
constant-currency basis,
after-tax earnings
from joint
ventures decreased
8 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:
 
Quarter Ended Nov.Aug. 27, 20222023 vs.
Quarter Ended Nov.Aug. 28, 20212022
CPW
HDJ
Total
Contributions from volume growth (a)
(13)(11)
pts
(10)(5)
pts
Net price realization and mix
1519
pts
(1)9
ptpts
Net sales growth in constant currency
28
pts
(10)4
pts
(1)
pt
Foreign currency exchange
(14)
pts
(20)
pts
(15)
pts
Net sales growth
(11)
pts
(30)
pts
(16)
pts
Note: Table may not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
Average
diluted shares
outstanding
decreased by
11 million
in the
second quarter
of fiscal
2023 from
the same
period a
year ago
primarily due to share repurchases, partially offset by option
exercises.
Six-Month Results
In the
six-month period
ended November
27, 2022,
net sales
increased 4
percent compared
to the
same period
last year,
and organic
net
sales
increased
11
percent
compared
to
the
same
period
last
year.
Operating
profit
increased
15
percent
to
$1,885 million,
primarily
driven
by
favorable
net
price
realization
and
mix
and
a
net
gain
on
divestitures,
partially
offset
by
higher
input
costs,
a
decrease in contributions from
volume growth, an unfavorable
change to the mark-to-market
valuation of certain commodity
positions
and
grain
inventories,
lower
net
corporate
investment
activity,
and
an
increase
in
SG&A
expenses.
Operating
profit
margin
of
19
percent
increased
180
basis
points
compared
to
the
same
period
last
year.
Adjusted
operating
profit
of
$1,761 million
increased
8 percent
on
a
constant-currency
basis,
primarily
driven
by
favorable
net
price
realization
and
mix,
partially
offset
by
higher
input
costs,
a
decrease
in
contributions
from
volume
growth,
and
an
increase
in
SG&A
expenses.
Adjusted
operating
profit
margin
increased 50
basis points
compared to
the same
period in fiscal
2022. Diluted
earnings per
share of $2.36
increased 19
percent in
the
six-month
period
ended
November
27,
2022,
and
adjusted
diluted
earnings
per
share
of
$2.21 increased
13
percent
on
a
constant-
currency basis
compared
to the
same period
last year
(see the
“Non-GAAP Measures”
section below
for a
description of
our use
of
measures not defined by GAAP).
A summary of our consolidated financial results for the six-month period
ended November 27, 2022, follows:
Six-Month Period Ended Nov.
27, 2022
In millions,
except per
share
Six-Month
Period Ended
Nov. 27, 2022
vs. Nov. 28,
2021
Percent of Net
Sales
Constant-
Currency
Growth (a)
Net sales
$
9,938.3
4
%
Operating profit
1,885.4
15
%
19.0
%
Net earnings attributable to General Mills
1,425.9
16
%
Diluted earnings per share
$
2.36
19
%
Organic net sales growth rate (a)
11
%
Adjusted operating profit (a)
1,760.9
7
%
17.7
%
8
%
Adjusted diluted earnings per share (a)
$
2.21
12
%
13
%
(a)
See the "Non-GAAP Measures" section below for our use of measures not defined by GAAP.
24
Consolidated
net sales
were as follows:
Six-Month Period Ended
Nov. 27, 2022
Nov. 27, 2022 vs.
Nov. 28, 2021
Nov. 28, 2021
Net sales (in millions)
$
9,938.3
4
%
$
9,563.9
Contributions from volume growth (a)
(12)
pts
Net price realization and mix
17
pts
Foreign currency exchange
(1)1
pt
Note: Table may not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
The 4
percent increase
in net
sales for
the six-month
period ended
November 27,
2022, was
driven
by favorable
net price
realization
and mix, partially offset by a decrease in contributions
from volume
growth and unfavorable foreign currency exchange.
Components of organic net sales growth are shown in the following
table:
Six-Month Period Ended Nov.
27, 2022 vs.
Six-Month Period Ended Nov.
28, 2021
Contributions from organic volume growth (a)
(5)
pts
Organic net price realization and mix
16
pts
Organic net sales growth
11
pts
Foreign currency exchange
(1)
pt
Acquisition and divestitures
(5)
ptsFlat
Net sales growth
4
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
increased
11
percent
in
the
six-month
period
ended
November
27,
2022,
driven
by
favorable
organic
net
price
realization and mix, partially offset by a decrease in
contributions from organic volume growth.
Cost
of
sales
increased
$450 million
to
$6,786 million
in
the
six-month
period
ended
November
27,
2022,
compared
to
the
same
period
in fiscal
2022.
The increase
was
driven
by a
$939 million
increase
attributable
to product
rate
and
mix,
partially
offset
by
a
$749
million
decrease due
to lower
volume.
We
recorded
a $200
million
net increase
in cost
of sales
related
to the
mark-to-market
valuation
of
certain
commodity
positions
and
grain
inventories
in
the
six-month
period
ended
November
27,
2022,
compared
to
a
$36 million net
decrease in
the six-month
period ended
November 28,
2021. In
the six-month
period ended
November 27, 2022,
we
recorded a $24 million charge related to a voluntary recall
on certain international
Häagen-Dazs
ice cream products.
SG&A expenses
increased
$99 million
to $1,686 million
in the
six-month period
ended November
27, 2022,
compared to
the same
period
in fiscal
2022, primarily
driven
by valuation
adjustments and
the loss
on sale
of certain
corporate investments
in fiscal
2023
and a recovery related to a Brazil indirect tax item in fiscal
2022. SG&A expenses as a percent of net sales increased
40 basis points in
the six-month period ended November 27, 2022, compared to the same period
of fiscal 2022.
Divestitures
gain,
net
totaled
$431
million
in
the
six-month
period
ended
November
27,
2022,
primarily
related
to the
sale of
our
Helper main meals
and Suddenly Salad
side dishes business (please
refer to Note 2
to the Consolidated Financial
Statements in Part I,
Item 1 of this report).
Restructuring,
impairment,
and
other
exit
costs
(recoveries)
totaled
$13 million
of
expense
in
the
six-month
period
ended
November 27,
2022, compared
to $2 million
of net recoveries
in the same
period last year
(please refer
to Note 3
to the Consolidated
Financial Statements in Part I, Item 1 of this report).
Benefit plan non-service
income
totaled $43 million
in the six-month
period ended November
27, 2022,
compared to $57 million
in
the same period last year, primarily reflecting
an increase in interest costs, partially offset by lower amortization
of losses.
Interest, net
for the
six-month period
ended November
27, 2022,
decreased $9 million
to $179 million
compared to
the same
period
of fiscal 2022, primarily driven by lower average long-term debt balances
,
partially offset by higher interest rates.
The
effective
tax
rate
for
the six-month
period
ended
November
27,
2022,
was
20.8
percent
compared
to
21.7
percent
in
the
six-
month
period
ended
November
28,
2021.
The
0.9
percentage
point
decrease
was
primarily
due
to
certain
nonrecurring
discrete
tax
25
benefits and favorable changes in
earnings mix by jurisdiction
in fiscal 2023, partially offset
by unfavorable tax components
related to
the divestitures
incurred
in the
six-month
period ended
November 27,
2022. Our
effective
tax rate
excluding certain
items affecting
comparability was
20.4 percent in
the six-month
period ended
November 27,
2022, compared
to 22.0
percent in
the same
period last
year
(see
the
“Non-GAAP
Measures”
section
below
for
a
description
of
our
use
of
measures
not
defined
by
GAAP).
The
1.6
percentage
point
decrease
is
primarily
due
to
certain
nonrecurring
discrete
tax
benefits
and
favorable
changes
in
earnings
mix
by
jurisdiction in fiscal 2023.
After-tax
earnings from
joint ventures
decreased
to $45 million
for the
six-month
period ended
November 27,
2022 compared
to
$62 million
in the
same period
in fiscal
2022,
primarily
driven by
higher input
costs at
CPW and
HDJ and
lower
net sales
at HDJ
,
partially offset by favorable net price realization
and mix at CPW.
On a constant-currency basis, after-tax earnings from
joint ventures
decreased 17
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:
Six-Month Period Ended Nov.
27, 2022 vs.
Six-Month Period Ended Nov.
28, 2021
CPW
HDJ
Total
Contributions from volume growth (a)
(9)
pts
(9)
pts
Net price realization and mix
129
pts
(1)
pt
Net sales growth in constant currency
3
pts
(9)
pts
Flat
Foreign currency exchange
(12)
pts
(18)
pts
(13)
pts
Net sales growth
(9)
pts
(28)
pts
(14)7
pts
Note: Table may
not foot due to roundingrounding.
(a)
 
Measured in tons based on the stated weight of our product shipments.
Average
 
diluted
 
shares
 
outstanding
decreased
 
by
 
10 15
million
 
in
 
the
 
six-monthfirst
 
periodquarter
 
endedof
 
Novemberfiscal
 
27,
2022,2024
 
from
 
the
 
same
period
a
year
ago
period a year ago primarily due to share repurchases, partially offset by option
 
by option exercises.
SEGMENT OPERATING
 
RESULTS
Our businesses are
 
organized into four
 
four operating segments: North
 
North America Retail; International;Retail,
International,
 
Pet, and North
 
America Foodservice.
Please
 
refer
 
to
 
Note
 
17
 
of
 
the
 
Consolidated
 
Financial
 
Statements
 
in
 
Part
 
I,
 
Item
 
1
 
of
 
this
 
report
 
for
 
a
 
description
 
of
 
our
 
operating
segments.
North America Retail Segment Results
North America Retail net sales were as follows:
 
Quarter Ended
Six-Month Period Ended
Nov.Aug. 27,
2023
Aug. 27, 2023 vs
Aug. 28, 2022
Nov. 27, 2022 vs
Nov. 28, 2021
Nov.Aug. 28,
2021
Nov. 27,
2022
Nov. 27, 2022 vs
Nov. 28, 2021
Nov. 28,
2021
Net sales (in millions)
$
3,373.13,073.0
113
%
$
3,044.6
$
6,361.9
11
%
$
5,755.22,988.8
Contributions from volume growth (a)
(8)
pts
(7)(5)
pts
Net price realization and mix
19
pts
188
pts
Foreign currency exchange
(1)
pt
Flat
Note: Table may
not foot due to rounding.
(a)
 
Measured in tons based on the stated weight of our product shipments.
North
America
 
Retail
net
 
sales
increased
 
11 3
percent
 
in
the second
first
 
quarter
of
 
fiscal 2023
2024,
 
compared
to
 
the
same
 
period
in
 
fiscal 2022,
driven by
 
favorable net price
realization and
mix, partially offset
by a decrease
in contributions from
volume growth
and unfavorable2023,
foreign currency exchange.
North America
Retail net sales
increased 11
percent in the
six-month period
ended November 27,
2022, compared
to the same
period
in fiscal 2022, driven by favorable net price realization and mix, partially offset
 
by a decrease in contributions from volume growth.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
26
23
The components of North America Retail organic net
 
sales growth are shown in the following table:
 
Quarter Ended
Six-Month Period Ended
Nov.Aug. 27, 2022
Nov. 27, 20222023
Contributions from organic volume growth (a)
(7)
pts
(6)(4)
pts
Organic net price realization and mix
20
pts
188
pts
Organic net sales growth
13
pts
134
pts
Foreign currency exchange
(1)
pt
Flat
Divestiture (b)
(2)(1)
pts
(2)
ptspt
Net sales growth
11
pts
113
pts
Note: Table may
not foot due to rounding.
(a) Measured in tons based on the stated weight of our product shipments.
(b) Divestiture of our Helper main meals and Suddenly Salad side dishes businesses in
fiscal 2023. Please see Note 2 to the Consolidated Financial
 
Consolidated Financial Statements in Part I, Item 1 of this report.
North
 
America
Retail
 
organic
 
net
sales
 
increased
13 4
 
percent
in
 
the
second
quarter
of
fiscal
2023
and
the
six-month
period
ended
November 27,
2022, compared
to the same
periods
in fiscal 2022
,
driven by
favorable organic
net price realization
and mix, partially
offset by a decrease in contributions from organic
volume growth.
North America Retail net sales percentage change by operating unit
are shown in the following table:
Quarter Ended
Six-Month Period Ended
Nov. 27, 2022
Nov. 27, 2022
U.S. Snacks
18
%
16
%
U.S. Meals & Baking Solutions
10
%
10
%
U.S. Morning Foods
10
%
9
%
Canada (a)
(3)
%
Flat
Total
11
%
11
%
(a)
On a constant-currency basis, Canada net sales increased 4 percent in the second quarter of fiscal 2023 and increased 6 percent for the six-month
period ended
November 27,
2022, compared
to the
same periods
in fiscal
2022. See
the "Non-GAAP
Measures" section
below for
our use
of
this measure not defined by GAAP.
Segment
operating
profit increased
24
percent
to $837 million
in the
second first
 
quarter of
 
fiscal 2023
compared
to $675 million
in the
same
period
in
fiscal
2022,
primarily
driven
by
favorable
net
price
realization
and
mix,
partially
offset
by
higher
input
costs,
a
decrease
in
contributions
from
volume
growth,
and
higher
SG&A
expenses.
Segment
operating
profit
increased
24
percent
on
a
constant-currency
basis
in
the
second
quarter
of
fiscal
2023
compared
to
the
same
period
in
fiscal
2022
(see
the
“Non-GAAP
Measures” section below for our use of this measure not defined by GAAP).
Segment
operating
profit
increased
22
percent
to
$1,615 million
in
the
six-month
period
ended
November
27,
2022,
compared
to
$1,324 million in the
same period in fiscal
2022, primarily driven by
favorable net price realization
and mix, partially offset
by higher
input
costs,
a
decrease
in
contributions
from
volume
growth,
and
higher
SG&A
expenses.
Segment
operating
profit
increased
22
percent on
a constant-currency
basis in
the six-month
period ended
November 27,
2022, compared
to the
same period
in fiscal
2022
(see the “Non-GAAP Measures” section below for our use of this measure
not defined by GAAP).
27
International Segment Results
International net sales were as follows:
Quarter Ended
Six-Month Period Ended
Nov. 27,
2022
Nov. 27, 2022 vs
Nov. 28, 2021
Nov. 28,
2021
Nov. 27,
2022
Nov. 27, 2022 vs
Nov. 28, 2021
Nov. 28,
2021
Net sales (in millions)
$
671.7
(27)
%
$
914.4
$
1,324.2
(28)
%
$
1,845.0
Contributions from volume growth (a)
(39)
pts
(39)
pts
Net price realization and mix
18
pts
16
pts
Foreign currency exchange
(6)
pts
(6)
pts
Note: Table may not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
International
net
sales
decreased
27
percent
in
the
second
quarter
of
fiscal
2023
and
28
percent
in
the
six-month
period
ended
November
27,
2022,
compared
to
the
same
periods
in
fiscal
2022,
driven
by
a
decrease
in
contributions
from
volume
growth,
including
the
impact
of volume
declines
from
divestitures
and
the
voluntary
recall
on certain
international
Häagen-Dazs
ice
cream
products,
and unfavorable foreign currency exchange, partially offset
by favorable net price realization and mix.
The components of International organic net sales growth
are shown in the following table:
Quarter Ended
Six-Month Period Ended
Nov. 27, 2022
Nov. 27, 2022
Contributions from organic volume growth (a)
(7)
pts
(7)
pts
Organic net price realization and mix
12
pts
8
pts
Organic net sales growth
5
pts
1
pt
Foreign currency exchange
(6)
pts
(6)
pts
Divestitures (b)
(26)
pts
(24)
pts
Net sales growth
(27)
pts
(28)
pts
Note: Table may not foot due to rounding.
(a) Measured in tons based on the stated weight of our product shipments.
(b) Divestitures primarily 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.
International
organic
net
sales increased
5 percent
in the
second quarter
of fiscal
2023
compared
to the
same
period in
fiscal
2022,
driven by favorable organic net price realization
and mix, partially offset by a decrease in contributions from organic
volume growth.
International organic
net sales increased
1 percent in the
six-month period ended
November 27, 2022,2024,
 
compared to the same
 
period in
fiscal
2022,
driven
by
favorable
organic
net
price
realization
and
mix,
partially
offset
by
a
decrease
in
contributions
from
organic
volume growth.
Segment operating profit
decreased 70 percent to
$18 million in the second
quarter of fiscal 2023
from $59 million in the
same period
in
fiscal
2022,
primarily
driven by
higher
input
costs and
a
decrease
in
contributions
from
volume
growth,
including
the
impact
of
volume declines from divestitures and the voluntary recall on certain
international
Häagen-Dazs
ice cream products, partially offset by
favorable
net
price
realization
and
mix
and
a
decrease
in
SG&A
expenses.
Segment
operating
profit
decreased
68
percent
on
a
constant-currency
basis
in
the
second
quarter
of
fiscal
2023
compared
to
the
same
period
in
fiscal
2022
(see
the
“Non-GAAP
Measures” section below for our use of this measure not defined by GAAP).
Segment operating profit decreased 56
percent to $53 million in the six-month
period ended November 27, 2022, from $120
million in
the same
 
period in
 
fiscal 2022,
primarily driven
by a
decrease in
contributions from
volume growth,
including the
impact of
volume
declines from
divestitures and
the voluntary
recall on
certain international
Häagen-Dazs
ice cream
products,
and higher
input costs,
partially offset
by favorable
net price
realization and
mix and
a decrease
in SG&A
expenses. Segment
operating profit
decreased 51
percent on
a constant-currency
basis in
the six-month
period ended
November 27,
2022, compared
to the
same period
in fiscal
2022
(see the “Non-GAAP Measures” section below for our use of this measure
not defined by GAAP).
28
Pet Segment Results
Pet net sales were as follows:
Quarter Ended
Six-Month Period Ended
Nov. 27,
2022
Nov. 27, 2022 vs
Nov. 28, 2021
Nov. 28,
2021
Nov. 27,
2022
Nov. 27, 2022 vs
Nov. 28, 2021
Nov. 28,
2021
Net sales (in millions)
$
592.9
Flat
$
593.4
$
1,172.8
8
%
$
1,081.4
Contributions from volume growth (a)
(11)
pts
(6)
pts
Net price realization and mix
11
pts
15
pts
Foreign currency exchange
Flat
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
in the second
quarter of fiscal
2023, essentially
matched the same
period in fiscal
2022, as
favorable net price
realization
and mix was offset by a decrease in contributions from volume
growth.
Pet net sales
increased 8
percent during
the six-month
period ended November
27, 2022, compared
to the same
period in fiscal
2022,
driven by favorable net price realization and mix, partially offset by
a decrease in contributions from volume growth.
The components of Pet organic net sales growth are shown in the following
table:
Quarter Ended
Six-Month Period Ended
Nov. 27, 2022
Nov. 27, 2022
Contributions from organic volume growth (a)
(11)
pts
(7)
pts
Organic net price realization and mix
11
pts
13
pts
Organic net sales growth
Flat
6
pts
Foreign currency exchange
Flat
Flat
Acquisition (b)
Flat
2
pts
Net sales growth
Flat
8
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 2 to the Consolidated Financial Statements in Part I, Item 1 of
this report.
Pet organic
net sales
in the
second quarter
of fiscal
2023 essentially
matched the
same period
in fiscal
2022 as
favorable organic
net
price realization and mix was offset by a decrease in contributions
from organic volume growth.
Pet organic
net sales
increased
6 percent
in the
six-month
period
ended November
27,
2022,
compared
to the
same period
in fiscal
2022,
 
driven by
 
favorable organic
 
net price
 
realization and
 
mix,
 
partially offset
 
by a
 
decrease in
 
contributions from
 
organic
 
volume
growth.
SegmentNorth America Retail net sales percentage change by operating unit are shown
 
in the following table:
Quarter Ended
Aug. 27, 2023
U.S. Snacks
8
%
U.S. Morning Foods
3
%
Canada (a)
Flat
U.S. Meals & Baking Solutions
(1)
%
Total
3
%
(a)
On a constant-currency basis,
Canada net sales increased 4
percent in the first quarter of
fiscal 2024,
compared to the same period
in fiscal 2023. See the "Non-GAAP Measures" section below for our use of this measure not
defined by GAAP.
Segment operating
 
profit
decreased
34 increased 3
 
percent
to
 
$87798 million in the
first quarter of
fiscal 2024,
compared to $778 million
 
in the same
the
second
quarter
ofperiod in
 
fiscal
2023,
compared
to
$132 million
in
the
same period in fiscal 2022,
 
primarily driven by higher
 
input costs and a decrease in
contributions from volume
growth, partially offset
by favorable
 
net price
 
realization and
 
mix. Segmentmix, partially
 
operating profitoffset by
 
decreased 34higher input
 
percent oncosts, a
 
a constant-currencydecrease in
contributions from volume
 
basis ingrowth, and an
 
the second
quarter ofincrease in SG&A expenses
 
fiscal 2023,
 
compared toincluding increased media
 
the same
period in
fiscal 2022
(see the
“Non-GAAP Measures”
section below
for our
use of
thisand advertising expenses. Segment
measure not defined by GAAP).
Segment
operating
 
profit
 
decreasedincreased
 
153
 
percent
 
toon
 
$210 milliona
constant-currency
basis
 
in
 
the
 
six-monthfirst
 
periodquarter
 
endedof
 
Novemberfiscal
 
27,
2022,2024
 
compared
 
to
$247 million
in
 
the
 
same
 
period
 
in
fiscal
2022,
primarily
driven
by
higher
input
costs,
a
decrease
in
contributions
from
volume
growth,
and
an
increase
in
SG&A
expenses,
partially
offset
by
favorable
net
price
realization
and
mix.
Segment
operating
profit
decreased 15 percent
on a constant-currency
basis in the six-month
period ended November
27, 2022, compared
to the same period
in
fiscal 20222023 (see the “Non-GAAP Measures” section below for our use of this measure
 
not defined by GAAP).
International Segment Results
International net sales were as follows:
Quarter Ended
Aug. 27,
2023
Aug. 27, 2023 vs
Aug. 28, 2022
Aug. 28,
2022
Net sales (in millions)
$
715.8
10
%
$
652.5
Contributions from volume growth (a)
(5)
pts
Net price realization and mix
13
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.
International net sales increased 10 percent in the first quarter of fiscal 2024,
compared to the same period in fiscal 2023 which
included the impact of the voluntary recall on certain international
Häagen-Dazs
ice cream products, driven by favorable net price
realization and mix and favorable foreign currency exchange, partially
offset by a decrease in contributions from volume growth.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
29
24
The components of International organic net sales growth
are shown in the following table:
Quarter Ended
Aug. 27, 2023
Contributions from organic volume growth (a)
(5)
pts
Organic net price realization and mix
13
pts
Organic net sales growth
9
pts
Foreign currency exchange
1
pt
Net sales growth
10
pts
Note: Table may
not foot due to rounding.
(a) Measured in tons based on the stated weight of our product shipments.
International organic net
sales increased 9 percent
in the first quarter of
fiscal 2024,
compared to the same period
in fiscal 2023 which
included the
impact of
the voluntary
recall on
certain international
Häagen-Dazs
ice cream
products,
driven by
favorable organic
net
price realization and mix, partially offset by a decrease in
contributions from organic volume growth.
Segment operating
profit increased
44 percent
to $50 million
in the
first quarter
of fiscal
2024,
compared to
$35 million in
the same
period
in
fiscal
2023,
primarily
driven
by
favorable
net
price
realization
and
mix
and
the
voluntary
recall
on
certain
international
Häagen-Dazs
ice cream
products in
fiscal 2023,
partially offset
by higher
input costs.
Segment operating
profit increased
52 percent
on
a
constant-currency
basis
in
the
first
quarter
of
fiscal
2024
compared
to
the
same
period
in
fiscal
2023
(see
the
“Non-GAAP
Measures” section below for our use of this measure not defined by GAAP).
Pet Segment Results
Pet net sales were as follows:
Quarter Ended
Aug. 27,
2023
Aug. 27, 2023 vs
Aug. 28, 2022
Aug. 28,
2022
Net sales (in millions)
$
579.9
Flat
$
579.9
Contributions from volume growth (a)
(5)
pts
Net price realization and mix
5
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 in
the first
quarter of
fiscal 2024
matched the same
period in
fiscal 2023,
as favorable
net price realization
and mix
was
offset by a decrease in contributions from volume growth.
The components of Pet organic net sales growth are shown in the following
table:
Quarter Ended
Aug. 27, 2023
Contributions from organic volume growth (a)
(5)
pts
Organic net price realization and mix
5
pts
Organic net sales growth
Flat
Foreign currency exchange
Flat
Net sales growth
Flat
Note: Table may
not foot due to rounding.
(a) Measured in tons based on the stated weight of our product shipments.
Pet
organic
net
sales
in
the
first
quarter
of
fiscal
2024
matched
the
same
period
in
fiscal
2023,
as
favorable
organic
net
price
realization and mix was offset by a decrease in contributions from
organic volume growth.
Segment operating profit decreased 10 percent
to $111 million in the
first quarter of fiscal 2024,
compared to $123 million in the same
period
in
fiscal
2023,
primarily
driven
by
higher
input
costs,
a
decrease
in
contributions
from
volume
growth,
and
an
increase
in
SG&A
expenses,
partially
offset
by
favorable
net
price
realization
and
mix.
Segment
operating
profit
decreased
10
percent
on
a
25
constant-currency basis in
the first quarter
of fiscal 2024
compared to the
same period in
fiscal 2023 (see
the “Non-GAAP Measures”
section below for our use of this measure not defined by GAAP).
North America Foodservice Segment Results
North America Foodservice net sales were as follows:
 
Quarter Ended
Six-Month Period Ended
Nov.Aug. 27,
2023
Aug. 27, 2023 vs
Aug. 28, 2022
Nov. 27, 2022 vs
Nov. 28, 2021
Nov.Aug. 28,
2021
Nov. 27,
2022
Nov. 27, 2022 vs
Nov. 28, 2021
Nov. 28,
2021
Net sales (in millions)
$
583.0536.0
248
%
$
471.6
$
1,079.4
22
%
$
882.3496.4
Contributions from volume growth (a)
27
pts
1
pt
Net price realization and mix
211
pts
22
ptspt
Foreign currency exchange
Flat
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 8 percent in the first
 
Foodservice net
sales increased
24 percent
in the
second quarter
of fiscal
2023 2024, compared
to the
same period
in fiscal 2023,
2022,
driven
by
favorable
net
price
realization
and
mix,
including
market
index
pricing
on
bakery
flour,
and
an
increase
in
contributions from volume growth.
North America
Foodservice net
sales increased
22 percent
in the
six-month period
ended November
27, 2022,
compared to
the same
period
in
fiscal
2022,
driven
by
favorable
net
price
realization
and
mix,
including
market
index
pricing
on
bakery
flour,
and
an
increase in contributions from volume growth.growth and favorable
net price realization and mix.
The components of North America Foodservice organic
 
net sales growth
are shown in the following table:
 
Quarter Ended
Six-Month Period Ended
Nov.Aug. 27, 2022
Nov. 27, 20222023
Contributions from organic volume growth (a)
(2)
pts
(3)4
pts
Organic net price realization and mix
19
pts
20
ptsFlat
Organic net sales growth
17
pts
174
pts
Foreign currency exchange
Flat
Flat
Acquisition (b)
6
pts
54
pts
Net sales growth
24
pts
228
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 TNT Crust in fiscal 2023. Please see Note 2 to the Consolidated Financial Statements
in Part I, Item 1 of this report.
North
America Foodservice
organic
 
net sales
increased 17 4
percent in
 
the second first
quarter of
fiscal 2024,
compared to
the same
period in
fiscal 2023,
and the six-month period ended
November 27, 2022, compared
to the same periods
in fiscal 2022,
driven by favorable organic
net price realization and
mix, including
market index pricing on bakery flour, partially
offset by a decreasean increase in contributions from organic
 
volume growth.
Segment operating
profit increased
 
2010 percent
to $82$59
 
million in
the secondfirst
 
quarter of
fiscal 20232024,
 
compared to $68
$54 million in
 
the same
period
in
fiscal 2022,
2023,
 
primarily
driven
by
favorable
 
net
price
realization
and
 
mix,
partially
offset
 
by higher input costs
 
and an increase
in SG&Ahigher
 
expenses.input
costs.
 
Segment
operating
 
profit increased
 
2010 percent
 
on a
 
constant-currency basis
in the
second quarter
of fiscal
2023
compared to the
same period in
fiscal 2022 (see
the “Non-GAAP Measures”
section below for
our use of
this measure not
defined by
GAAP).
Segment
operating
profit
decreased
3
percent
to
$135
million
in
the
six-month
period
ended
November
27,
2022,
compared
to
$140 million
in the
same period
in fiscal
2022,
primarily
driven by
higher input
costs and
an increase
in SG&A
expenses,
partially
offset by favorable net
price realization and mix.
Segment operating profit decreased
3 percent on a constant-currency
 
basis in the six-
month period
 
ended Novemberthe first
 
27, 2022,quarter of
fiscal 2024
 
compared to
 
the same
 
period in
fiscal 2022
(see2023 (see the
“Non-GAAP “Non-GAAP Measures”
section below
for our use of this measure
not defined by GAAP).
30
UNALLOCATED
 
CORPORATE
 
ITEMS
Unallocated corporate expense
 
expenses totaled $212 $87
million in the
first quarter of
fiscal 2024, compared
to $333 million
in the same
period in
fiscal
2023.
In
 
the second
first
quarter
 
of fiscal 2023,
 
fiscal
2024,
we
recorded
a
$45 million
net
decrease
in
expense
related
to
the
mark-to-market
valuation of certain commodity positions
and grain inventories, compared to $132
a $175 million net increase in expense
 
in the same period
in fiscal
2022. In
the second
quarter of
fiscal 2023,
we recorded
a $25 million
net increase
in expense
related to
the mark-to-market
valuation of
certain commodity
positions and
grain inventories
compared to
a $12 million
net decrease
in expense
in the same
period
last
year.
 
We
 
recorded $3 million
of net losses
related to valuation
adjustments on certain
corporate investments
in the first quarter
of
fiscal
2024,
compared
to
 
$3626 million
 
of
 
net
 
losses
 
related
 
to
 
valuation
 
adjustments
 
and
 
the
 
loss
on
sale
 
of
 
acertain
 
corporate
investmentinvestments
 
in
 
the
second quarter of fiscal 2023,
 
compared to $10 million of
net gains in the secondfirst
 
quarter of fiscal 2022.
��
In the second quarter of
 
fiscal
2023.
In
the
first
quarter
of
fiscal
2023,
 
we
 
recorded
 
a
 
$322
 
million
 
charge
 
related
 
to
 
a
voluntary
 
recall
 
on
 
certain
 
international
Häagen-Dazs
 
ice
 
cream
 
products.
 
In
addition, we
recorded $3
million of
integration costs
primarily related
to our
acquisition of
TNT Crust
in the
second quarter
of fiscal
2023 compared to $4 million of integration
costs related to our acquisition of Tyson
Foods’ pet treats business in the
second quarter of
fiscal 2022. In the second
quarter of fiscal 2023, we recorded
$2 million of transaction costs
primarily related to the
sale of our Helper
main meals and Suddenly
Salad side dishes business
compared to $38 million
of transaction costs related to
the sale of our
interests in
Yoplait
SAS, Yoplait
Marques SNC, and Liberté Marques Sàrl
and the sale of our European dough
businesses in the second quarter of
fiscal 2022.
Unallocated corporate
expense totaled
$545 million
in the
six-month period
ended November
27, 2022,
compared to
$188 million
in
the
same
period
last
year.
We
 
recorded
 
a
$2009
 
million
 
netof
 
increaserestructuring
charges
and
$1
million
of
restructuring
initiative
project-related
costs
 
in
 
expense
related
to
the
mark-to-market
valuationcost
 
of
 
certain
commodity positions and grain
inventories in the six-month period
ended November 27, 2022, compared
to a $36 million net decrease
in
expensesales
 
in
 
the
 
samefirst quarter
 
periodof
 
lastfiscal
 
year.2024,
 
Wecompared
 
recordedto
 
$621
 
million
 
of
restructuring
 
net
losses
related
to
valuation
adjustments
and
the
sale
of
corporate investments in the six-month
period ended November 27, 2022,
compared to $10 million of net
gains in the same period last
year.
In
the
six-month
period
ended
November
27,
2022,
we
recorded
a
$24
million
charge
related
to
a
voluntary
recall on
certain
international
Häagen-Dazs
ice
cream
products.
In
addition,
we
recorded
$4
million
of
integration
costs
primarily
related
to
our
acquisition of
TNT Crustcharges
 
in the
six-month period
ended November
27, 2022,
compared to
$16 millioncost
 
of integrationsales
 
costs related
to
our acquisition of Tyson
Foods’ pet treats business
in the six-month
period ended November 28,
2021.
In the six-month period
ended
November 27,
2022, we recorded
$2 million of
transaction costs primarily
related to
the sale of
our Helper
main meals and
Suddenly
Salad
side
dishes
business
compared
to $48
million
of
transaction
costs related
to
the
sale of
our
interests in
Yopla
it SAS,
Yoplait
Marques SNC, Liberté
Marques Sàrl and
the sale of
our European
dough businesses. In
addition, we
recorded a $21
million recovery
related to a Brazil indirect tax item and a $13 million insurance recovery
in the six-month period ended November 28, 2021.
LIQUIDITY
AND CAPITAL
RESOURCES
During the
six-month period
ended November
27, 2022,
cash provided by
operations was
$1,201 million compared
to $1,498 million
in the
 
same period
 
last year.
 
The $297
million decrease
was primarily
driven by
an increase in
inventory and
higher cash
income tax
payments in the six-month period ended November 27, 2022 as compared
to the same period a year ago.
Cash provided by investing activities during the
six-month period ended November 27, 2022, was $125
million compared to cash used
of $1,396 million
for the
same period
in fiscal
2022. During
the first
quarter of
the 2023,In addition,
 
we completed
the sale
of the
Helper main
meals and Suddenly
Salad side dishes
business forrecorded
 
$607 million
cash. In
the first
quarter of
fiscal 2023,
we acquired
TNT Crust
for
$252
million
cash, net
of cash
acquired.
In the
first quarter
of fiscal
2022,
we acquired
the Tyson
Foods’
pet treats
business
for
an
aggregate purchase price
of $1.2 billion. In
addition, we spent $227
million on purchases of
land, buildings, and
equipment in the six-
months ended November 27, 2022, compared to $224 million in
the same period last year.
Cash
used
by
financing
activities
during
the
six-month
period
ended
November
27,
2022,
was
$1,230
million
compared
to
$427 million
of
cash
used
by
financing
activities
in
the
same
period
in
fiscal
2022.
We
paid
$648
million
of
dividends
in
the
six-
month period ended November
27, 2022, compared to
$623 million in the same period
last year.
We purchased
$901 million of shares
of common
stock in the
six-month period
ended November 27,
2022, compared
to $375 million
in the same
period in fiscal
2022.
In
addition, we
had $253
million of
net debt
issuances in
the six-month
period ended
November 27,
2022, compared
to $568 million
of
net debt issuances in the same period a year ago.
As of
November
27,
2022, we
had
$5422 million
 
of cashintegration
 
and cashcosts primarily
related to our acquisition of TNT Crust in the first quarter of fiscal 2023.
 
equivalents
in foreign
jurisdictions. In
anticipation
of repatriating
funds from
foreign jurisdictions,
we record
local country
withholding taxes
on our
international earnings,
as applicable.
Furthermore,
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 permanent
ly reinvested in those jurisdictions.
 
 
 
 
 
 
 
 
 
 
 
31
26
LIQUIDITY
AND CAPITAL
RESOURCES
During the first quarter of
fiscal 2024, cash provided by operations
was $378 million compared to $389
million in the same period last
year.
The $11 million
decrease was mainly
driven by
a $248 million
change in
current assets and
liabilities and
a $46
million change
in
other
non-cash
items
in
net
earnings,
including
changes
in
the
valuation
of
certain
corporate
investments.
These
were
partially
offset
by a
$288 million
increase
in
net
earnings,
excluding
the
$431 million
net
divestitures
gain
in fiscal
2023.
The $248
million
change in current assets and liabilities is primarily driven by a $313 million
change in the timing of accounts payable.
Cash
used
by
investing
activities
during
the
first
quarter
of
fiscal
2024
was
$136
million
compared
to
cash
provided
by
investing
activities
of
$266 million
for
the
same
period
in
fiscal
2023.
During
the
first
quarter
of
the
2023,
we
completed
the
sale
of
the
Helper main meals and Suddenly Salad side dishes
business for $607 million cash. In the
first quarter of fiscal 2023, we acquired
TNT
Crust for $252
million cash, net of cash acquired. In addition, we spent $142 million
on purchases of land, buildings, and equipment in
the first quarter of fiscal 2024 compared to $91 million in the same period
last year.
Cash used
by financing
activities during
the first
quarter of
fiscal 2024
was $334 million
compared
to $609 million
of cash
used by
financing activities
in the
same period
in fiscal 202
3. We
paid $348 million
of dividends
in the
first quarter
of fiscal
2024, compared
to $325 million
in the
same period
last year.
We
paid $500
million for
purchases of
common stock
for treasury
in the first
quarter of
fiscal 2024, consistent with the same period in fiscal 2023
.
In addition, we had $552 million of net debt issuances in the first
quarter of
fiscal 2024 compared to $188 million of net debt issuances in the first quarter
of fiscal 2023.
As of August
27, 2023, we had
$425 million of cash
and cash equivalents
in foreign jurisdictions. In
anticipation of repatriating
funds
from
foreign
jurisdictions,
we
record
local
country
withholding
taxes
on
our
international
earnings,
as
applicable.
Furthermore,
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.
The following table details the fee-paid committed and uncommitted credit
 
lines we had available as of NovemberAugust 27, 2022:2023:
 
In Billions
Facility
 
Amount
Borrowed
Amount
Committed credit facility expiring April 2026
$
2.7
$
-
Uncommitted credit facilities
0.6
-
Total committed
��
and uncommitted credit facilities
$
3.3
$
-
The
 
third-party
 
holder
 
of
 
the
 
General
 
Mills
 
Cereals,
 
LLC
 
(GMC)
 
Class A
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
 
mark-to-market
-to-market valuation
 
(currently
 
$252 million).
On
June 1,
2021,
the The
 
floating
preferred
return
rate
on
GMC’s
Class A Interests
was reset
to the
sum of
three-month LIBOR
plus 160
basis points.
The preferred
 
return rate
 
on GMC’s
Class A Interests
is
the sum of three
-month Term
SOFR plus 186
basis points. The preferred
return rate is adjusted
 
every three years
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.
 
To ensure availability
 
of funds, we maintain bank credit lines and have commercial paper programs
 
available to us in the United States
and Europe.
Certain
 
of
 
our
 
long-term
 
debt
 
agreements,
 
our
 
credit
 
facilities,
 
and
 
our
 
noncontrolling
 
interests
 
contain
 
restrictive
 
covenants.
 
As
 
of
NovemberAugust 27, 2022,2023, we were in compliance with all of these covenants.
 
We
 
have
 
$1,9641,175
 
million
 
of
 
long-term
 
debt
 
maturing
 
in
 
the
 
next
 
12
 
months
 
that
 
is
 
classified
 
as
 
current,
 
including
 
$400
 
million
 
of
floating-rate
 
notes
 
due
 
October
 
17,
 
2023,
 
€250
million
of
floating-rate
notes
due
November
10,
2023,
and
$500
 
million
 
of
 
1.003.65
percent
fixed-rate
 
notes
due
 
AprilFebruary 15,
 
27,
2023,
€250
million
of
0.00
percent
fixed-rate
notes
due
May
16,
2023,
€500
million
of
0.00
percent
fixed-rate
notes
due
July
27,
2023,
and
€250
million
of
floating-rate notes
due May
16, 2023.
2024. We
 
believe that
 
cash flows
 
from operations,
 
together with
 
available short-
 
and long-term
debtlong-
term debt financing, will be adequate to meet our liquidity and capital needs for
 
for at least the next 12 months.
CRITICAL ACCOUNTING ESTIMATES
Our significant accounting policies are described in Note 2
 
to the Consolidated Financial Statements included
 
in our Annual Report on
Form
 
10-K for
 
the fiscal
 
year ended
 
May 29,28,
 
2022.2023. The
 
accounting policies
 
used in
 
preparing our
 
interim fiscal
 
20232024
Consolidated
Financial
Statements
are
the
same
as
those
described
in
our
Form
10-K
with
the
exception
of
the
new
accounting
requirements
27
adopted in the first quarter of fiscal 2024. Please see Note 1
to the Consolidated Financial Statements are the same as those described in our Form 10-K.Part I, Item 1
of this report for
additional information.
Our
 
critical
 
accounting
 
estimates
 
are
 
those
 
that
 
have
 
meaningful
 
impact
 
on
 
the
 
reporting
 
of
 
our
 
financial
 
condition
 
and
 
results
 
of
operations.
 
These
 
estimates
 
include
 
our
 
accounting
 
for
 
revenue
 
recognition,
 
valuation
 
of
 
long-lived
 
assets,
 
intangible
 
assets,
 
stock-
based compensation,
 
income taxes,
 
and defined
 
benefit pension,
 
other postretirement
 
benefit, and
 
postemployment benefit
 
plans. The
assumptions and methodologies used
in the determination of those
 
those estimates as of November August
27, 2022,2023, are the
same as those described in
in our Annual Report on Form 10-K for the fiscal year ended May 29, 2022.28, 2023.
Our
 
annual
 
goodwill
 
and
 
indefinite-lived
 
intangible
 
assets
 
impairment
 
test
 
was
 
performed
 
on
 
the
 
first
 
day
 
of
 
the
 
second
 
quarter
 
of
fiscal
 
2023,
 
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
Uncle Toby’s
 
brand intangible
 
asset. In addition,
 
while having
 
significant coverage
 
as of
our fiscal 2023
 
assessment date, the
Progresso
 
and
EPIC
brand intangible assets had
 
risk of decreasing coverage.
 
We
 
will continue to
monitor these businesses for potential impairment.
RECENTLY
ISSUED ACCOUNTING PRONOUNCEMENTS
In September 2022, the Financial Accounting Standards
Board (FASB)
issued Accounting Standards Update (ASU) 2022-04 requiring
enhanced
disclosures
related
to
supplier
financing
programs.
The
ASU
requires
disclosure
of
the
key
terms
of
the
program
and
a
rollforward
of
the
related
obligation
during
the
annual
period,
including
the
amount
of
obligations
confirmed
and
obligations
subsequently
paid.
The
new
disclosure
requirements
are
effective
for
fiscal
years
beginning
after
December
15,
2022,
with
the
exception
of the
rollforward requirement,
which is
effective
for fiscal
years beginning
after December
15, 2023,
which for
us is
the
first
quarter
of
fiscal
2024
for
the
primary
requirement
and
the
first
quarter
of
fiscal
2025
for
the
rollforward
requirement.
Early
adoption is
permitted. We
have historically
presented the
key terms
of these
programs and
the associated
obligation outstanding.
We
do not expect this ASU to have a material impact on our financial statements and
related disclosures.
32
In March
2020, the 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
can be
applied as
of the
beginning of
the interim
period including
March 12,
2020,
or
any
date
thereafter,
through
December 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.
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
 
we believe 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.
Significant Items Impacting Comparability
Several
 
measures
 
below
 
are
 
presented
 
on
 
an
 
adjusted
 
basis.
 
The
 
adjustments
 
are
 
either
 
items
 
resulting
 
from
 
infrequently
 
occurring
events or items that, in management’s
 
judgment, significantly affect the year-to-year
 
assessment of operating results.
The following are descriptions of significant items impacting comparability
 
of our results.
Mark-to-market effects
Net
mark-to-market
valuation
of
certain
commodity
positions
recognized
in
unallocated
corporate
items.
Please
see
Note
6
to
the
Consolidated Financial Statements in Part I, Item 1 of this report.
Restructuring charges and project-related costs
Restructuring
charges and
project-related
costs for
previously announced
restructuring actions
recorded in
fiscal 2024.
Restructuring
charges
for
previously
announced
restructuring
actions
recorded
in
fiscal
2023.
Please
see
Note
3
to
the
Consolidated
Financial
Statements in Part I, Item 1 of this report.
Investment activity, net
Valuation
adjustments of
certain corporate
investments in
fiscal 2024. Valuation
adjustments and
the loss on
sale of certain
corporate
investments in fiscal 2023.
Acquisition integration costs
Integration
costs
primarily
resulting
from
the
acquisition
of
TNT
Crust
in
fiscal
2024
and
fiscal
2023.
Please
see
Note
2
to
the
Consolidated Financial Statements in Part I, Item 1 of this report.
Product recall
Costs related to the fiscal 2023 voluntary recall of certain international
Häagen-Dazs
ice cream products.
Divestitures
gain, net
Net divestitures
 
gain primarily
 
related to
 
the sale
 
of our
 
Helper main
 
meals and
 
Suddenly Salad
 
side dishes
 
business in
 
fiscal 2023.
Please see Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this reportreport.
Transaction costs
Transaction costs primarily related
 
.
Mark-to-market effects
Netto the sale of our Helper main meals and Suddenly
 
mark-to-market
valuation
of
certain
commodity
positions
recognized
Salad side dishes business in
unallocated
corporate
items. fiscal 2023.
 
Please
see
Note
6
to
the
see Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this report.
Investment activity,
net
Valuation
adjustments and the
loss on sale of
certain corporate investments
in fiscal 2023.
Valuation
adjustments and the
gain on sale
of certain corporate investments in fiscal 2022.
Product recall
Voluntary
recall costs recorded in fiscal 2023 related to certain international
Häagen-Dazs
ice cream products.
Restructuring charges (recoveries)
Restructuring charges
for previously announced
restructuring actions recorded
in fiscal 2023
and fiscal 2022.
Please see Note 3
to the
Consolidated Financial Statements in Part I, Item 1 of this report.
Acquisition integration costs
Integration costs
primarily resulting
from the acquisition
of TNT Crust
in fiscal 2023.
Integration costs
resulting from
the acquisition
of Ty
son Foods’ pet
treats business in fiscal
2022. Please see
Note 2 to
the Consolidated Financial
Statements in Part
I, Item 1
of this
report.
Transaction costs
Transaction
costs
primarily
related
to
the
sale
of
our
Helper
main
meals
and
Suddenly
Salad
side
dishes
business
in
fiscal
2023.
Transaction
costs related
to 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.
Please see
Note
2
to
the
Consolidated
Financial
Statements
in
Part
I,
Item
1
of
this
report.
Non-income tax recovery
Recovery related to a Brazil indirect tax item recorded in fiscal 2022.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3328
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,
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 as a Percent of Net Sales (Adjusted Operating Profit
 
Profit Margin)
We believe
 
this measure provides useful information
 
to investors because it is important
 
for assessing our operating profit margin
 
on a
comparable basis.
Our adjusted operating profit margins are calculated as follows:
Quarter Ended
Nov.Aug. 27, 20222023
Nov.Aug. 28, 20212022
In Millions
Value
Percent of
Net Sales
Value
 
Percent of
Net Sales
Operating profit as reported
$
799.8930.0
15.319.0
%
$
800.11,085.6
15.923.0
%
Mark-to-market effects
25.1(44.9)
0.5(0.9)
%
(12.1)174.7
(0.2)3.7
%
Restructuring charges
9.8
0.2
%
2.3
-
%
Investment activity, net
35.72.9
0.70.1
%
(10.5)26.3
(0.2)0.6
%
Product recallProject-related costs
2.90.8
0.1-
%
-
-
%
Restructuring charges
11.6
0.2
%
2.7
0.1
%
Acquisition integration costs
2.80.2
0.1-
%
3.51.5
0.1-
%
Product recall
0.2
-
%
21.5
0.5
%
Divestitures gain, net
-
-
%
(430.9)
(9.1)
%
Transaction costs
1.8-
-
%
37.60.2
0.7-
%
Adjusted operating profit
$
879.7899.0
16.918.3
%
$
821.3881.2
16.3
%
Six-Month Period Ended
Nov. 27, 2022
Nov. 28, 2021
In Millions
Value
Percent of
Net Sales
Value
Percent of
Net Sales
Operating profit as reported
$
1,885.4
19.0
%
$
1,644.4
17.2
%
Divestitures gain, net
(430.9)
(4.3)
%
-
-
%
Mark-to-market effects
199.8
2.0
%
(36.2)
(0.4)
%
Investment activity, net
62.0
0.6
%
(9.8)
(0.1)
%
Product recall
24.4
0.2
%
-
-
%
Restructuring charges (recoveries)
13.9
0.1
%
(1.4)
-
%
Acquisition integration costs
4.3
-
%
15.9
0.2
%
Transaction costs
2.0
-
%
48.2
0.5
%
Non-income tax recovery
-
-
%
(20.6)
(0.2)
%
Adjusted operating profit
$
1,760.9
17.7
%
$
1,640.5
17.218.7
%
Note: Tables
Table may not foot due to rounding.
 
For more information on the reconciling items, please refer to the Significant Items Impacting Comparability section above.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3429
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.
 
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 on a constant-currency basis is calculated
 
as follows:
 
Quarter Ended
Six-Month Period EndedAug. 27, 2023
Nov. 27,Aug. 28, 2022
Nov. 28, 2021
Change
Nov. 27, 2022
Nov. 28, 2021
Change
Operating profit as reported
$
799.8930.0
$
800.11,085.6
Flat
$
1,885.4
$
1,644.4
15(14)
%
Mark-to-market effects
(44.9)
174.7
Restructuring charges
9.8
2.3
Investment activity, net
2.9
26.3
Project-related costs
0.8
-
Acquisition integration costs
0.2
1.5
Product recall
0.2
21.5
Divestitures gain, net
-
-
(430.9)
-
Mark-to-market effects
25.1
(12.1)
199.8
(36.2)
Investment activity, net
35.7
(10.5)
62.0
(9.8)
Product recall
2.9
-
24.4
-
Restructuring charges (recoveries)
11.6
2.7
13.9
(1.4)
Acquisition integration costs
2.8
3.5
4.3
15.9
Transaction costs
1.8
37.6
2.0
48.2
Non-income tax recovery
-
-
-
(20.6)0.2
Adjusted operating profit
$
879.7899.0
$
821.3881.2
7
%
$
1,760.9
$
1,640.5
72
%
Foreign currency exchange impact
Flat
(1)
pt
Adjusted operating profit growth,
on a constant-currency basis
7
%
82
%
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.
Adjusted Diluted EPS and Related Constant-currency Growth Rates
This measure
 
is used in
 
reporting to
 
our Board of
 
Directors and executive
 
management. We
 
believe that
 
this measure provides
 
useful
information to
 
investors because it
 
is the profitprofitability
 
ability measure we use
 
use to evaluate earnings
 
earnings performance on
 
a comparable year-to-year
basis.
The reconciliation of our GAAP measure, diluted EPS, to adjusted diluted
 
EPS and the related constant-currency growth rates follows:
 
Quarter Ended
Six-Month Period Ended
Per Share Data
Nov.Aug. 27, 20222023
Nov.Aug. 28, 2021
Change
Nov. 27, 2022
Nov. 28, 2021
Change
Diluted earnings per share, as reported
$
1.011.14
$
0.971.35
4(16)
%
$
2.36
$
1.99
19
%
Divestitures gain, net
-
-
(0.54)
-
Mark-to-market effects
0.03(0.06)
(0.02)0.22
0.25Restructuring charges
(0.05)0.01
-
Investment activity, net
0.04-
(0.02)
0.08
(0.02)0.04
Product recall
 
-
-0.03
0.03Divestitures gain, net
-
Restructuring charges (recoveries)
0.02
-
0.02
(0.01)
Acquisition integration costs
0.01
-
0.01
0.02
Transaction costs
-
0.05
-
0.06
Non-income tax recovery
-
-
-
(0.02)(0.54)
Adjusted diluted earnings per share
$
1.101.09
$
0.991.11
11
%
$
2.21
$
1.98
12(2)
%
Foreign currency exchange impact
(1)
pt
(1)
pt
Adjusted diluted earnings per share
growth, on a constant-currency basis
12
%
13(1)
%
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.
35
See our reconciliation
 
below of the effective
 
income tax rate as
 
reported to the adjusted
 
effective income tax
 
rate for the tax
 
impact of
each item affecting comparability.
30
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
 
currency exchange
 
rate fluctuations
 
have on
 
year-to-year
 
comparability given
volatility in foreign currency exchange markets.
 
After-tax earnings from joint ventures growth rates on a constant-currency
 
basis are calculated as follows:
 
Percentage Change in
After-Tax
 
Earnings from Joint
Ventures
 
as Reported
Impact of Foreign
Currency
Exchange
Percentage Change in After-Tax
Earnings from Joint Ventures
on Constant-Currency Basis
Quarter Ended Nov.Aug. 27,
2022 2023
(23)19
%
(15)(7)
pts
(8)
%
Six-Month Period Ended Nov.
27, 2022
(27)
%
(10)
pts
(17)26
%
Note: Table may
 
not foot due to rounding.
Net Sales Growth Rates for Our Canada Operating Unit on Constant-currency
 
Basis
 
We
 
believe
 
that
 
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
 
Retail segment by
 
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 rates for our Canada operating unit on a constant-currency
 
basis are calculated as follows:
 
Percentage Change in
Net Sales
as Reported
Impact of Foreign
Currency
Exchange
Percentage Change in
Net Sales on Constant-
Currency Basis
Quarter Ended Nov.Aug. 27,
2022 2023
(3)Flat
%
(7)(4)
pts
4
%
Six-Month Period Ended Nov.
27, 2022
Flat
(5)
pts
6
%
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.
 
36
Our segments’ operating profit growth rates on a constant-currency
 
basis are calculated as follows:
 
Quarter Ended Nov.Aug. 27, 20222023
Percentage Change in
Operating Profit
as Reported
Impact of Foreign
Currency
Exchange
Percentage Change in Operating
Profit on Constant-Currency
Basis
North America Retail
243
%
Flat
243
%
International
(70)44
%
(2)(8)
pts
(68)52
%
Pet
(34)(10)
%
Flat
(34)(10)
%
North America Foodservice
2010
%
Flat
20
%
Six-Month Period Ended Nov.
27, 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
22
%
Flat
22
%
International
(56)
%
(5)
pts
(51)
%
Pet
(15)
%
Flat
(15)
%
North America Foodservice
(3)
%
Flat
(3)10
%
Note: TablesTable may not
 
not foot due to rounding.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3731
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:
 
 
Quarter Ended
 
Six-Month Period EndedAug. 27, 2023
Nov. 27,Aug. 28, 2022
Nov. 28, 2021
Nov. 27, 2022
Nov. 28, 2021
In Millions
(Except Per Share Data)
Pretax
Earnings
(a)
Income
Taxes
Pretax
Earnings
(a)
Income
Taxes
Pretax
Earnings
(a)
Income
Taxes
Pretax
Earnings
(a)
Income
Taxes
As reported
$
730.0830.0
$
147.1173.2
$
735.11,019.6
$
159.7216.1
$Mark-to-market effects
1,749.6(44.9)
$(10.3)
363.2174.7
$40.2
1,513.1Restructuring charges
$9.8
328.64.7
2.3
0.6
Investment activity, net
2.9
1.0
26.3
0.5
Project-related costs
0.8
0.3
-
-
Acquisition integration costs
0.2
0.1
1.5
0.3
Product recall
0.2
0.1
21.5
4.9
Divestitures gain, net
-
-
-
-
(430.9)
(101.9)
Transaction costs
-
-
Mark-to-market effects
25.1
5.8
(12.1)
(2.8)
199.8
46.0
(36.2)
(8.3)
Investment activity, net
35.7
13.0
(10.5)
0.3
62.0
13.5
(9.8)
0.5
Product recall
2.9
0.70.2
-
-
24.4
5.6
-
-
Restructuring charges
(recoveries)
11.6
3.2
2.7
2.8
13.9
3.8
(1.4)
1.9
Acquisition integration costs
2.8
0.7
3.5
0.8
4.3
1.0
15.9
3.6
Transaction costs
1.8
0.6
37.6
7.8
2.0
0.6
48.2
12.4
Non-income tax recovery
-
-
-
-
-
-
(20.6)
(7.0)
As adjusted
$
809.9799.1
$
171.0169.0
$
756.4815.2
$
168.8
$
1,625.1
$
331.8
$
1,509.2
$
331.8160.8
Effective tax rate:
As reported
20.2%20.9%
21.7%
20.8%
21.7%21.2%
As adjusted
21.1%
22.3%
20.4%
22.0%19.7%
Sum of adjustment to
income taxes
$
23.9(4.3)
$
8.9
$
(31.4)
$
3.1(55.3)
Average number
 
of common
shares - diluted EPS
602.0591.4
613.0
604.0
613.8606.0
Impact of income tax adjustments
on adjusted diluted EPS
$
(0.04)0.01
$
(0.01)
$
0.05
$
-0.09
Note: Table may not foot due to rounding.
(a)
Earnings before income taxes and after-tax earnings from joint ventures.
 
For more information on the reconciling items, please refer to the Significant Items Impacting Comparability section above.
3832
Glossary
AOCI
. Accumulated other comprehensive income (loss).
Adjusted diluted EPS.
 
Diluted EPS adjusted for certain items affecting year-to-year
 
comparability.
Adjusted operating profit.
 
Operating profit adjusted for certain items affecting year-to-year
 
comparability.
Adjusted operating profit
 
margin.
Operating profit adjusted
 
for certain items
 
affecting year-over-year
 
comparability,
 
divided by net
sales.
Constant currency.
 
Financial results
 
translated to
 
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 during
 
the
corresponding
 
period
 
of
 
the
 
prior
 
fiscal
 
year,
 
rather
 
than
 
the
 
actual
 
average
 
exchange
 
rates
 
in
 
effect
 
during
 
the
 
current
 
fiscal
 
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.
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 stock
 
stock prices.
Euribor.
 
Euro 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.
 
Level 1 provides
 
the most reliable
 
measure of
 
fair value, while
 
Level 3
generally requires significant management 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
 
assumptions about the inputs used in pricing the asset or liability.
Free cash flow.
 
Net cash provided by operating activities less purchases of land, buildings, and equipment.
Generally Accepted
 
Accounting Principles
 
(GAAP).
Guidelines, procedures,
 
and practices
 
that we
 
are required
 
to use in
 
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
 
noncontrolling and redeemable
interests and the related fair values of net assets acquired.
 
Gross margin.
 
Net sales less cost of sales.
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.
 
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 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.
39
33
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 subsidiaries held by third parties.
 
Notional
 
amount.
The
 
amount
 
of
 
a
 
position
 
or
 
an
 
agreed
 
upon
 
amount
 
in
 
a
 
derivative
 
contract
 
on
 
which
 
the
 
value
 
of
 
financial
instruments are calculated.
OCI.
Other Comprehensive Income.
 
Organic net sales growth
. Net sales growth adjusted
 
for foreign currency translation,
 
acquisitions, divestitures and a
 
53
rd
 
fiscal week,
when applicable.
Project-related costs.
Costs incurred related to our restructuring initiatives not included in restructuring
 
charges.
Redeemable interest.
Interest of 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.
SOFR.
Secured Overnight Financing Rate.
Strategic
 
Revenue
 
Management
 
(SRM).
 
A
 
company-wide
 
capability
 
focused
 
on
 
generating
 
sustainable
 
benefits
 
from
 
net
 
price
realization
 
and
 
mix
 
by
 
identifying
 
and
 
executing
 
against
 
specific
 
opportunities
 
to
 
apply
 
tools
 
including
 
pricing,
 
sizing,
 
mix
management, and 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.
Translation
 
adjustments.
The impact
 
of the conversion
 
of our foreign
 
affiliates’ financial
 
statements to United
 
States dollars
 
for the
purpose of consolidating our financial statements.
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.
 
 
 
 
 
 
 
 
 
 
4034
CAUTIONARY STATEMENT
 
RELEVANT
 
TO FORWARD
 
-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
 
Securities
 
and
 
Exchange
 
Commission
 
and
 
in
 
our
 
reports
 
to
stockholders.
The words or
 
phrases “will likely
 
result,” “are expected
 
to,” “will continue,”
 
“is anticipated,” “estimate,”
 
“plan,” “project,” or
 
similar
expressions identify
 
“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 pandemicsuch
 
on our business, suppliers,
consumers,
customers,
and
employees;as:
 
disruptions
 
or
 
inefficiencies
 
in
 
the
 
supply
 
chain,
including
any
impact
of
the
COVID-19
pandemic;chain;
 
competitive
dynamics
in
the
consumer
foods
 
industry
and
the
markets
for
 
our products, including new product
 
products,
including
new
productintroductions, advertising activities,
introductions,
advertising
activities,
pricing
actions,
and
promotional
 
activities
of
our
competitors;
 
economic conditions, including
 
conditions,
including
changes
in
inflation
rates,
 
interest rates,
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
advertising
regulations,
and
litigation;
impairments
in
the
carrying
 
value of goodwill, other intangible assets, or other long
 
of
goodwill,
other
intangible-lived assets,
or other
long-lived assets,
or changes
in the
 
useful lives
 
of other
 
intangible assets;
 
changes in
 
accounting standards
and
 
and the impact
 
of critical
 
accounting estimates;
 
estimates; product
quality
 
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 purchasing
purchasing and
 
inventory
levels
 
of
significant
 
customers;
fluctuations
 
in
the
 
cost
and
 
availability
 
of
 
supply
 
chain
 
resources,
 
including
 
raw
materials,
 
packaging,
 
energy,
 
and
 
transportation;
 
effectiveness
 
of
restructuring
 
and
 
cost
 
saving
 
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
 
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
 
failure or
breach of
our information
technology systems;
 
foreign economic conditions,
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 Part
 
I of our
 
Annual Report on
 
Form 10-K for
 
the fiscal year
ended May 29, 202228, 2023, which could also affect our future results.
We undertake
 
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 3.
 
Quantitative and Qualitative Disclosures About Market Risk.
 
The
 
estimated
 
maximum
 
potential
 
value-at-risk
 
arising
 
from
 
a
 
one-day
 
loss
 
in
 
fair
 
value
 
for
 
our
 
interest
 
rate,
 
foreign
 
exchange,
commodity, and equity
 
market-risk-sensitive instruments outstanding as of NovemberAugust 27, 2023,
 
2022, was as follows:
 
In Millions
One-day Risk
of Loss
Change During
Six-Month
PeriodQuarter Ended
Nov.Aug. 27, 20222023
Analysis of Change
Interest rate instruments
$
5159
$
10(6)
RisingLower interest ratesrate volatility
Foreign currency instruments
3536
15(1)
Increase in portfolio basisImmaterial
Commodity instruments
115
(2)(3)
Decrease in commodity prices
Equity instruments
3
1-
Immaterial
For additional information, see Item 7A of Part II of our Annual Report on Form 10-K
 
for the fiscal year ended May 29, 2022.28, 2023.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4135
Item 4.
 
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
 
defined
 
in
 
Rule
13a-15(e)
 
under
 
the
 
Securities
 
Exchange
 
Act
 
of
 
1934).
 
Based
 
on
 
our
 
evaluation,
 
our
 
Chief
 
Executive
 
Officer
 
and
 
Chief
 
Financial
Officer
have
 
concluded
that,
 
as
of
 
November
August 27,
 
2022,
2023, our
 
disclosure
controls
 
and
procedures
 
were
effective
 
to
ensure
 
that information
information required to
 
be disclosed
by us
 
in reports
that we file
 
file or submit under
 
under the
Securities Exchange Act
 
Act of
1934 is (1)
 
recorded, processed,
processed, summarized,
and reported
within the
time periods
specified in
Securities and
Exchange Commission
rules and
forms, and
(2)
accumulated
 
and
 
communicatedreported
 
towithin
 
ourthe
 
management,time
 
includingperiods
 
ourspecified
 
Chiefin
 
Executive
OfficerSecurities
 
and
 
ChiefExchange
 
Commission
rules
and
forms,
and
(2)
accumulated and
communicated to
our management,
including our
Chief Executive
Officer and
Chief Financial
 
Officer,
 
in a
 
amanner
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 Securities Exchange
 
Act
of
1934)
 
during
the
 
quarter
ended
 
November
August 27,
 
2022
2023, that
 
materially
affected,
 
or
are
reasonably
 
likely
to
 
materially
affect,
 
our internal
internal control
over financial reporting.
PART
 
II.
 
OTHER INFORMATION
Item 2.
 
Unregistered Sales of Equity Securities and Use of Proceeds.
 
The
 
following
 
table
 
sets forth
 
information
 
with
 
respect
 
to
 
shares
 
of
 
our
 
common
 
stock
 
that we
 
purchased
 
during
 
the quarter
 
ended
NovemberAugust 27, 2022:2023:
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)
AugustMay 29, 20222023 -
OctoberJuly 2, 20222023
1,888,0003,648,025
$
76.6680.40
1,888,0003,648,025
94,104,93881,214,844
OctoberJuly 3, 20222023 -
OctoberJuly 30, 20222023
1,905,0002,739,485
77.1977.18
1,905,0002,739,485
92,199,93878,475,359
OctoberJuly 31, 2022 2023 -
August 27, 2023
-
November 27, 2022-
1,378,000-
78.53
1,378,000
90,821,93878,475,359
Total
5,171,0006,387,510
$
77.3579.02
5,171,0006,387,510
90,821,93878,475,359
(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
 
approved a
newan 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 our
common stockcall
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.
Item 5.
Other Information.
None.
 
4236
PART
 
II. OTHER INFORMATION
Item 6.
Exhibits.
 
10.1
10.2
10.3
 
31.1
 
31.2
 
32.1
 
32.2
 
101
Financial Statements from the
 
Statements
from
the Quarterly
Report
on Form
 
10-Q
of the
Company
 
for
the quarter
ended November
August
 
27,
2022,2023,
 
formatted
 
in
 
Inline
 
Extensible
 
Business
 
Reporting
 
Language:
 
(i)
 
Consolidated
 
Statements
 
of
 
Earnings;
 
(ii)
Consolidated
 
Statements
 
of
 
Comprehensive
 
Income,
 
(iii)
 
Consolidated
 
Balance
 
Sheets;
 
(iv)
 
Consolidated
Statements of
Total
 
Equity and RedeemableEquity; (v)
 
Interest; (v) Consolidated Statements
 
Statements of Cash
 
Flows; and (vi)
 
(vi) Notes
to Consolidated
Financial
Consolidated Financial Statements.
 
104
Cover Page, formatted in Inline Extensible Business Reporting Language
 
and contained in Exhibit 101.
 
 
4337
SIGNATURES
Pursuant
 
to
 
the
 
requirements
 
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.
(Registrant)
Date: DecemberSeptember 20, 20222023
/s/ Mark A. Pallot
Mark A. Pallot
Vice President, Chief Accounting
 
Officer
(Principal Accounting Officer and Duly Authorized
 
Officer)