General Mills (GIS) 10-Q 2023 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-Q

(Mark One)

☑

QUARTERLYREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934

FOR THE QUARTERLYPERIOD ENDED

AUGUST 28, 2022

☐

TRANSITIONREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934

FOR THE TRANSITION PERIOD FROMTO

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

GIS25A

New York Stock Exchange

0.450% Notes due 2026

GIS26

New York Stock Exchange

1.500% Notes due 2027

GIS27

New York Stock Exchange

________________

Indicatebycheckmarkwhethertheregistrant(1)hasfiledallreportsrequiredtobefiledbySection13or15(d)oftheSecurities

Exchange Act of 1934during the preceding 12months (or for such shorterperiod that the registrantwas required to file suchreports),

and (2) has been subject to such filing requirements for the past 90 days.

Yes

☑

No

☐

IndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyeveryInteractiveDataFilerequiredtobesubmitted

pursuant to Rule405 of RegulationS-T duringthe preceding 12months (or forsuch shorter periodthat the registrantwas requiredto

submit such files).

Yes

☑

No

☐

Indicate by check markwhether the registrant is alarge accelerated filer,an accelerated filer,a non-accelerated filer,smaller reporting

company,oranemerginggrowthcompany.Seethedefinitionsof“largeacceleratedfiler,”“acceleratedfiler,”“smallerreporting

company,” and “emerginggrowth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

Ifanemerginggrowthcompany,indicatebycheckmarkiftheregistranthaselectednottousetheextendedtransitionperiodfor

complying with any new or revised financial accounting standards providedpursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as definedin Rule 12b-2 of the Exchange Act).

Yes

☐

No

☑

Number ofshares ofCommon Stockoutstandingas ofSeptember 14,2022:

593,535,650

(excluding

161,077,678

shares heldin the

treasury).

3

General Mills, Inc.

Table of Contents

Page

4

5

6

7

8

19

33

34

34

35

36

4

PARTI.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. 28, 2022

Aug. 29, 2021

Net sales

$

4,717.6

$

4,539.9

Cost of sales

3,269.9

2,942.5

Selling, general, and administrative expenses

791.4

757.4

Divestitures gain, net

(430.9)

-

Restructuring, impairment, and other exit costs (recoveries)

1.6

(4.3)

Operating profit

1,085.6

844.3

Benefit plan non-service income

(21.7)

(29.6)

Interest, net

87.7

95.9

Earnings before income taxes and after-tax earningsfrom

joint ventures

1,019.6

778.0

Income taxes

216.1

168.9

After-tax earnings from joint ventures

19.8

29.1

Net earnings, including earnings attributable to redeemable

and noncontrolling interests

823.3

638.2

Net earnings attributable to redeemable and

noncontrolling interests

3.3

11.2

Net earnings attributable to General Mills

$

820.0

$

627.0

Earnings per share – basic

$

1.37

$

1.03

Earnings per share – diluted

$

1.35

$

1.02

See accompanying notes to consolidated financial statements.

5

Consolidated Statements of Comprehensive Income

GENERAL MILLS, INC. AND SUBSIDIARIES

(Unaudited) (In Millions)

Quarter Ended

Aug. 28, 2022

Aug. 29, 2021

Net earnings, including earnings attributable to

redeemable and noncontrolling interests

$

823.3

$

638.2

Other comprehensive income (loss), net of tax:

Foreign currency translation

3.8

(23.9)

Other fair value changes:

Hedge derivatives

(38.3)

1.7

Reclassification to earnings:

Foreign currency translation

(7.4)

-

Hedge derivatives

(1.4)

10.6

Amortization of losses and prior service costs

14.1

8.4

Other comprehensive loss, net of tax

(29.2)

(3.2)

Total comprehensiveincome

794.1

635.0

Comprehensive income (loss) attributable to

redeemable and noncontrolling interests

2.0

(23.5)

Comprehensive income attributable to General Mills

$

792.1

$

658.5

See accompanying notes to consolidated financial statements.

6

Consolidated Balance Sheets

GENERAL MILLS, INC. AND SUBSIDIARIES

(In Millions, Except Par Value)

Aug. 28, 2022

May 29, 2022

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

594.4

$

569.4

Receivables

1,730.4

1,692.1

Inventories

2,089.9

1,867.3

Prepaid expenses and other current assets

719.3

802.1

Assets held for sale

-

158.9

Total currentassets

5,134.0

5,089.8

Land, buildings, and equipment

3,358.6

3,393.8

Goodwill

14,454.6

14,378.5

Other intangible assets

6,979.4

6,999.9

Other assets

1,180.6

1,228.1

Total assets

$

31,107.2

$

31,090.1

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable

$

3,786.3

$

3,982.3

Current portion of long-term debt

2,095.4

1,674.2

Notes payable

991.9

811.4

Other current liabilities

1,721.9

1,552.0

Total currentliabilities

8,595.5

8,019.9

Long-term debt

8,474.6

9,134.8

Deferred income taxes

2,262.4

2,218.3

Other liabilities

949.1

929.1

Total liabilities

20,281.6

20,302.1

Stockholders' equity:

Common stock,

754.6

shares issued, $

0.10

par value

75.5

75.5

Additional paid-in capital

1,146.1

1,182.9

Retained earnings

19,027.6

18,532.6

Common stock in treasury,at cost, shares of

160.3

and

155.7

(7,676.0)

(7,278.1)

Accumulated other comprehensive loss

(1,998.4)

(1,970.5)

Total stockholders' equity

10,574.8

10,542.4

Noncontrolling interests

250.8

245.6

Total equity

10,825.6

10,788.0

Total liabilities and equity

$

31,107.2

$

31,090.1

See accompanying notes to consolidated financial statements.

7

Consolidated Statements of TotalEquity and Redeemable Interest

GENERAL MILLS, INC. AND SUBSIDIARIES

(Unaudited) (In Millions, Except per Share Data)

Quarter Ended

Aug. 28, 2022

Aug. 29, 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

9.3

9.1

Unearned compensation related to stock unit awards

(79.0)

(68.3)

Earned compensation

32.9

33.1

Decrease in redemption value of

redeemable interest

-

5.6

Ending balance

1,146.1

1,345.0

Retained earnings:

Beginning balance

18,532.6

17,069.8

Net earnings attributable to General Mills

820.0

627.0

Cash dividends declared ($

0.54

and $

0.51

per share)

(325.0)

(312.3)

Ending balance

19,027.6

17,384.5

Common stock in treasury:

Beginning balance

(155.7)

(7,278.1)

(146.9)

(6,611.2)

Shares purchased

(6.9)

(500.8)

(2.5)

(150.1)

Stock compensation plans

2.3

102.9

1.1

46.3

Ending balance

(160.3)

(7,676.0)

(148.3)

(6,715.0)

Accumulated other comprehensive loss:

Beginning balance

(1,970.5)

(2,429.2)

Comprehensive (loss) income

(27.9)

31.5

Ending balance

(1,998.4)

(2,397.7)

Noncontrolling interests:

Beginning balance

245.6

302.8

Comprehensive income (loss)

2.0

(8.2)

Distributions to noncontrolling interest holders

(1.9)

(1.1)

Divestiture

5.1

-

Ending balance

250.8

293.5

Total equity,ending balance

$

10,825.6

$

9,985.8

Redeemable interest:

Beginning balance

$

-

$

604.9

Comprehensive loss

-

(15.3)

Decrease in redemption value of

redeemable interest

-

(5.6)

Ending balance

$

-

$

584.0

See accompanying notes to consolidated financial statements.

8

Consolidated Statements of Cash Flows

GENERAL MILLS, INC. AND SUBSIDIARIES

(Unaudited) (In Millions)

Quarter Ended

Aug. 28, 2022

Aug. 29, 2021

Cash Flows - Operating Activities

Net earnings, including earnings attributable to redeemable and noncontrollinginterests

$

823.3

$

638.2

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

Depreciation and amortization

134.3

145.8

After-tax earnings from joint ventures

(19.8)

(29.1)

Distributions of earnings from joint ventures

15.5

22.6

Stock-based compensation

33.5

26.8

Deferred income taxes

9.2

19.6

Pension and other postretirement benefit plan contributions

(5.3)

(5.4)

Pension and other postretirement benefit plan costs

(6.7)

(7.2)

Divestitures gain, net

(430.9)

-

Restructuring, impairment, and other exit costs

(15.7)

(19.5)

Changes in current assets and liabilities, excluding the effects of

acquisitions and divestitures

(209.7)

(389.5)

Other, net

61.1

(32.5)

Net cash provided by operating activities

388.8

369.8

Cash Flows - Investing Activities

Purchases of land, buildings, and equipment

(90.9)

(104.0)

Acquisition, net of cash acquired

(252.1)

(1,198.6)

Proceeds from divestitures, net of cash divested

610.7

-

Investments in affiliates, net

-

5.7

Proceeds from disposal of land, buildings, and equipment

-

0.3

Other, net

(1.9)

(1.3)

Net cash provided (used) by investing activities

265.8

(1,297.9)

Cash Flows - Financing Activities

Change in notes payable

188.0

698.7

Issuance of long-term debt

-

582.2

Payment of long-term debt

-

(612.1)

Proceeds from common stock issued on exercised options

65.5

7.9

Purchases of common stock for treasury

(500.8)

(150.1)

Dividends paid

(325.0)

(312.3)

Distributions to noncontrolling and redeemable interest holders

(1.9)

(1.1)

Other, net

(34.9)

(18.2)

Net cash (used) provided by financing activities

(609.1)

195.0

Effect of exchange rate changes on cash and cash equivalents

(20.5)

(18.1)

Increase (decrease) in cash and cash equivalents

25.0

(751.2)

Cash and cash equivalents - beginning of year

569.4

1,505.2

Cash and cash equivalents - end of period

$

594.4

$

754.0

Cash Flow from changes in current assets and liabilities, excluding the effectsof

acquisitions and divestitures:

Receivables

$

(91.1)

$

(145.3)

Inventories

(243.3)

(116.1)

Prepaid expenses and other current assets

79.5

39.0

Accounts payable

(130.4)

(214.9)

Other current liabilities

175.6

47.8

Changes in current assets and liabilities

$

(209.7)

$

(389.5)

See accompanying notes to consolidated financial statements.

9

GENERAL MILLS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATEDFINANCIAL STATEMENTS

(Unaudited)

(1) Background

The accompanyingConsolidated FinancialStatements ofGeneral Mills,Inc. (we,us, our,General Mills,or the Company)have been

prepared inaccordance withaccounting principlesgenerally acceptedin theUnited States(GAAP) forinterim financialinformation

and withthe rulesand regulationsfor reportingon Form10-Q. Accordingly,they donot includecertain informationand disclosures

requiredforcomprehensivefinancialstatements.Intheopinionofmanagement,alladjustmentsconsiderednecessaryforafair

presentation havebeen includedand areof anormal recurringnature, includingthe eliminationof allintercompany transactionsand

anynoncontrollingandredeemableinterests’shareofthosetransactions.OperatingresultsforthefiscalquarterendedAugust28,

2022,are not necessarily indicative of the results that may be expected for the fiscal yearending May 28, 2023.

ThesestatementsshouldbereadinconjunctionwiththeConsolidatedFinancialStatementsandfootnotesincludedinourAnnual

Report on Form10-K for the fiscalyear ended May29, 2022. Theaccounting policies usedin preparing theseConsolidated Financial

Statements are the same as those described in Note 2 to the Consolidated FinancialStatements in that Form 10-K.

Certain terms used throughout this report are defined in the “Glossary” section below.

(2) Acquisition and Divestitures

Duringthe firstquarterof fiscal2023,weacquiredTNT Crust,amanufacturerof high-qualityfrozen pizzacrustsforregionaland

national pizzachains, foodservicedistributors, andretail outlets,for apurchase priceof $

253.0

million. Wefinanced thetransaction

with U.S. commercial paper.We consolidatedthe TNT Crust business intoour Consolidated BalanceSheets and recorded goodwillof

$

154.3

million. Thegoodwill isincluded inthe NorthAmerica Foodservicesegment andis notdeductible fortax purposes.The pro

formaeffectsofthisacquisitionwerenotmaterial.Wehaveconductedapreliminaryassessmentofthefairvalueoftheacquired

assetsandliabilitiesoftheTNTCrustbusinessandwillcontinuetoreviewtheseitemsduringthemeasurementperiod.Ifnew

information is obtainedabout facts and circumstancesthat existed at theacquisition date, theacquisition accounting willbe revised to

reflect the resulting adjustments tocurrent estimates of these items.The consolidated results of theTNT Crust business are reportedin

our North America Foodservice segment on a one-month lag.

During thefirst quarterof fiscal2023,we completedthe saleof ourHelper mainmeals andSuddenlySalad sidedishes businessto

Eagle Family Foods Group for $

606.8

million and recorded a pre-tax gain of $

442.2

million.

Duringthefirstquarteroffiscal2022,weacquiredTysonFoods’pettreatsbusinessfor$

1.2

billionincash.Wefinancedthe

transactionwithacombinationofcashonhandandshort-termdebt.WeconsolidatedTysonFoods’pettreatsbusinessintoour

Consolidated BalanceSheets andrecorded goodwillof $

762.3

million, indefinite-livedintangible assetsfor the

Nudges

,

TopChews

,

and

TrueChews

brandstotaling$

330.0

millioninaggregate,andafinite-livedcustomerrelationshipassetof$

40.0

million.The

goodwill is included in the Pet segment and is deductible for tax purposes. Thepro forma effects of this acquisition were not material.

(3) Restructuring, Impairment, and Other Exit Costs

During thefirst quarterof fiscal 2023,we did notundertake anynew restructuringactions. Werecorded $

2.3

million of restructuring

charges in thefirst quarter of fiscal2023 and a$

4.1

million net recoveryof restructuring chargesin the first quarterof fiscal 2022 for

previously announced restructuring actions. Weexpect these actions to be completed by the end of

fiscal 2024

.

Wepaid net $

18.0

million of cash inthe first quarter offiscal 2023 related torestructuring actions previouslyannounced. Wepaid net

$

15.4

million of cash in the same period of fiscal 2022.

The roll forward of our restructuring and other exit cost reserves, includedin other current liabilities, is as follows:

In Millions

Total

Reserve balance as of May 29, 2022

$

36.8

Fiscal 2023 charges, including foreign currency translation

(0.4)

Utilized in fiscal 2023

(17.1)

Reserve balance as of Aug. 28, 2022

$

19.3

The reserve balance primarily consists of expected severance paymentsassociated with restructuring actions.

10

The chargesrecognized inthe roll forwardof our reservesfor restructuringand otherexit costs donot includeitems chargeddirectly

to expense(e.g., assetimpairment charges,accelerated depreciation,the gainor losson thesale ofrestructured assets,and thewrite-

offofspare parts)and otherperiodicexit costsarerecognizedas incurred,as thoseitems arenot reflectedin ourrestructuringand

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

Aug. 28, 2022

May 29, 2022

Goodwill

$

14,454.6

$

14,378.5

Other intangible assets:

Intangible assets not subject to amortization:

Brands and other indefinite-lived intangibles

6,706.4

6,725.8

Intangible assets subject to amortization:

Customer relationships and other finite-lived intangibles

402.1

400.3

Less accumulated amortization

(129.1)

(126.2)

Intangible assets subject to amortization, net

273.0

274.1

Other intangible assets

6,979.4

6,999.9

Total

$

21,434.0

$

21,378.4

Based onthe carryingvalue offinite-lived intangibleassets asof August28, 2022,annual amortizationexpense foreach ofthe next

five fiscal years is estimated to be approximately $

20

million.

The changes in the carrying amount of goodwill during the first quarter of fiscal 2023were as follows:

In Millions

North

America

Retail

Pet

North

America

Foodservice

International

Joint

Ventures

Total

Balance as of May 29, 2022

$

6,552.9

$

6,062.8

$

648.8

$

721.6

$

392.4

$

14,378.5

Acquisition

-

-

154.3

-

-

154.3

Divestiture

-

-

-

(0.4)

-

(0.4)

Other activity, primarily

foreign currency translation

(3.0)

-

-

(46.6)

(28.2)

(77.8)

Balance as of Aug. 28, 2022

$

6,549.9

$

6,062.8

$

803.1

$

674.6

$

364.2

$

14,454.6

The changes in the carrying amount of other intangible assets during the first quarterof fiscal 2023 were as follows:

In Millions

Total

Balance as of May 29, 2022

$

6,999.9

Acquisition

3.8

Other activity, primarilyforeign currency translation

(24.3)

Balance as of Aug. 28, 2022

$

6,979.4

Ourannualgoodwillandindefinite-livedintangibleassetsimpairmenttestwasperformedonthefirstdayofthesecondquarterof

fiscal2022,andwedeterminedtherewas

no

impairmentofourintangibleassetsastheirrelatedfairvaluesweresubstantiallyin

excess of the carrying values, except for the

Uncle Toby’s

brand intangible asset.

The excess fair value as of the fiscal 2022 test date of the

Uncle Toby’s

brand intangible asset is as follows:

In Millions

Carrying Valueof

Intangible Asset

Excess Fair Valueas of

Fiscal 2022 TestDate

Uncle Toby's

$

55.0

7

%

Inaddition,whilehavingsignificantcoverageasofourfiscal2022assessmentdate,the

Progresso

,

GreenGiant

,and

EPIC

brand

intangible assets had risk of decreasing coverage. Wewill continue to monitor these businesses for potential impairment.

11

(5) Inventories

The components of inventories were as follows:

In Millions

Aug. 28, 2022

May 29, 2022

Raw materials and packaging

$

579.6

$

532.0

Finished goods

1,887.0

1,634.7

Grain

122.5

164.0

Excess of FIFO over LIFO cost

(499.2)

(463.4)

Total

$

2,089.9

$

1,867.3

(6) Risk Management Activities

Many commodities weuse in theproduction and distributionof our productsare exposed tomarket price risks.Weutilize derivatives

to manage price risk for our principalingredients and energy costs, includinggrains (oats, wheat, and corn), oils(principally soybean),

dairy products, naturalgas, and diesel fuel.Our primary objectivewhen entering intothese derivative contractsis to achievecertainty

withregardtothefuturepriceofcommoditiespurchasedforuseinoursupplychain.Wemanageourexposuresthrougha

combination of purchase orders, long-termcontracts with suppliers, exchange-tradedfutures and options, and over-the-counteroptions

and swaps.Weoffsetour exposuresbased oncurrent andprojected marketconditions andgenerally seekto acquirethe inputsat as

close as possible to or below our planned cost.

Weuse derivativesto manageour exposureto changesin commodityprices. Wedo notperform theassessments requiredto achieve

hedgeaccountingforcommodityderivativepositions.Accordingly,thechangesinthevaluesofthesederivativesarerecorded

currently in cost of sales in our Consolidated Statements of Earnings.

Although we donot meet thecriteria forcash flow hedgeaccounting, we believethat these instrumentsare effectivein achieving our

objective of providing certaintyin the future price of commodities purchasedfor use in our supply chain.Accordingly, forpurposes of

measuringsegmentoperatingperformance,thesegainsandlossesarereportedinunallocatedcorporateitemsoutsideofsegment

operating resultsuntil suchtime thatthe exposurewe aremanaging affectsearnings. Atthat timewe reclassifythe gainor lossfrom

unallocatedcorporateitemstosegmentoperatingprofit,allowingouroperatingsegmentstorealizetheeconomiceffectsofthe

derivative without experiencing any resulting mark-to-market volatility,which remains in unallocated corporate items.

Unallocated corporate items for the quarters ended August 28, 2022, andAugust 29, 2021, included:

Quarter Ended

In Millions

Aug. 28, 2022

Aug. 29, 2021

Net (loss) gain on mark-to-market valuation of certain

commodity positions

$

(72.3)

$

30.4

Net gain on commodity positions reclassified from

unallocated corporate items to segment operating profit

(43.0)

(34.7)

Net mark-to-market revaluation of certain grain inventories

(59.4)

28.4

Net mark-to-market valuation of certain commodity

positions recognized in unallocated corporate items

$

(174.7)

$

24.1

As of August 28, 2022,the net notional value of commodityderivatives was $

432.6

million, of which $

152.4

million related to energy

inputs and$

280.2

million relatedto agriculturalinputs. Thesecontracts relateto inputsthat generallywill beutilized withinthe next

12

months.

Thefairvaluesofthederivativepositionsusedinourriskmanagementactivitiesandotherassetsrecordedatfairvaluewerenot

material asof August28, 2022and wereLevel 1or Level2 assetsand liabilitiesin thefair valuehierarchy.Wedid notsignificantly

change our valuation techniques from prior periods.

Weoffercertainsuppliersaccesstothirdpartyservicesthatallowthemtoviewourscheduledpaymentsonline.Thethird-party

services alsoallow suppliersto financeadvances onour scheduledpayments atthe solediscretion ofthe supplierand the thirdparty.

Wehave noeconomic interestin thesefinancing arrangementsand nodirect relationshipwith thesuppliers, thethird parties,or any

financialinstitutionsconcerningtheseservices.Allofouraccountspayableremainasobligationstooursuppliersasstatedinour

supplieragreements.AsofAugust28,2022,$

1,413.3

millionofourtotalaccountspayablewerepayabletosupplierswhoutilize

these third-party services. Asof August 29, 2021, $

1,312.8

million of our total accountspayable were payable to supplierswho utilize

these third-party services.

12

(7) Debt

The components of notes payable were as follows:

In Millions

Aug. 28, 2022

May 29, 2022

U.S. commercial paper

$

839.8

$

694.8

Financial institutions

152.1

116.6

Total

$

991.9

$

811.4

To ensure availabilityof funds, we maintain bank credit lines and have commercial paper programsavailable to us in the United States

and Europe. We alsohave committed and asset-backed credit lines that support our foreignoperations.

The following table details the fee-paid committed and uncommitted creditlines we had available as of August 28, 2022:

In Billions

Facility

Amount

Borrowed

Amount

Committed credit facility expiring April 2026

$

2.7

$

-

Uncommitted credit facilities

0.6

0.2

Total committedand uncommitted credit facilities

$

3.3

$

0.2

Thecreditfacilitiescontaincovenants,includingarequirementtomaintainafixedchargecoverageratioofatleast

2.5

times.

We

were in compliance with all credit facility covenants as of August 28, 2022.

Long-TermDebt

The fair valuesand carryingamounts of long-termdebt, includingthe current portion,were $

10,129.1

million and $

10,570.0

million,

respectively,asofAugust28,2022.Thefairvalueoflong-termdebtwasestimatedusingmarketquotationsanddiscountedcash

flows basedon ourcurrent incrementalborrowing ratesfor similartypes ofinstruments. Long-term debtis aLevel 2liability inthe

fair value hierarchy.

Inthe fourthquarterof fiscal2022,we repaid$

850.0

millionof

3.7

percentfixedrate notesdue

October 17, 2023

, usingproceeds

from the issuance of commercial paper.

In the fourth quarter of fiscal 2022, we issued €

250.0

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 proceedsto

repay a portion of our outstanding commercial paper and for generalcorporate 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 torepay

€

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.

Certainofourlong-termdebtagreementscontainrestrictivecovenants.

As of August 28, 2022, we were in compliance with all of

these covenants.

13

(8) Redeemable and Noncontrolling Interests

Thethird-partyholderoftheGeneralMillsCereals,LLC(GMC)Class AInterestsreceivesquarterlypreferreddistributionsfrom

available netincome basedon the applicationof afloating preferredreturn rateto theholder’s capitalaccount balanceestablished in

themostrecentmark-to-marketvaluation(currently$

251.5

million).OnJune 1,2021,thefloatingpreferredreturnrateonGMC’s

Class A Interestswas resetto thesum of

three-month LIBOR

plus

160

basis points.The preferredreturn rateis adjustedevery

three

years

through a negotiated agreement with the Class A Interest holder or througha remarketing auction.

Duringthethirdquarteroffiscal2022,wecompletedthesaleofourinterestsinYoplaitSAS,YoplaitMarquesSNCandLiberté

MarquesSàrltoSodiaalInternational(Sodiaal)inexchangeforSodiaal’sinterestinourCanadianyogurtbusiness,amodified

agreement for the use of

Yoplait

and

Liberté

brands in the United States and Canada, and cash.

Up tothe dateof thedivestiture, Sodiaalheld the remaininginterests ineach ofthe entities.On theacquisition date,we recordedthe

fairvalueofSodiaal’s

49

percenteuro-denominatedinterestinYoplaitSASasaredeemableinterestonourConsolidatedBalance

Sheets. Sodiaal hadthe right toput all ora portion ofits redeemable interestto us atfair value untilthe divestiture closedin the third

quarter offiscal 2022.In connectionwith thedivestiture, cumulativeadjustments madeto theredeemableinterest relatedto thefair

value put feature werereversed against additional paid-incapital, where changes in theredemption amount were historically recorded,

and the resulting carrying value of the noncontrolling interests were included inthe calculation of the gain on divestiture.

A subsidiary ofYoplaitSAS had an exclusivemilk supply agreementfor its European operationswith Sodiaal throughNovember 28,

2021. Net purchases totaled $

50.1

million for the quarter ended August 29, 2021.

Our noncontrolling interests contain restrictive covenants. As of August 28, 2022, we were in compliance with all of these covenants.

(9) Stockholders’ Equity

The following tables provide details of total comprehensive income:

Quarter Ended

Quarter Ended

Aug. 28, 2022

Aug. 29, 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

$

820.0

$

3.3

$

627.0

$

3.0

$

8.2

Other comprehensive (loss) income:

Foreign currency translation

$

(48.0)

$

53.1

5.1

(1.3)

$

(11.9)

$

22.7

10.8

(11.2)

(23.5)

Other fair value changes:

Hedge derivatives

(49.8)

11.5

(38.3)

-

2.8

(1.0)

1.8

-

(0.1)

Reclassification to earnings:

Foreign currency translation (a)

(7.4)

-

(7.4)

-

-

-

-

-

-

Hedge derivatives (b)

(1.9)

0.5

(1.4)

-

12.0

(1.5)

10.5

-

0.1

Amortization of losses and

prior service costs (c)

18.2

(4.1)

14.1

-

10.8

(2.4)

8.4

-

-

Other comprehensive (loss) income

$

(88.9)

$

61.0

(27.9)

(1.3)

$

13.7

$

17.8

31.5

(11.2)

(23.5)

Total comprehensive income (loss)

$

792.1

$

2.0

$

$

658.5

$

(8.2)

$

(15.3)

(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

Aug. 28, 2022

May 29, 2022

Foreign currency translation adjustments

$

(593.0)

$

(590.7)

Unrealized (loss) gain from hedge derivatives

(16.4)

23.3

Pension, other postretirement, and postemployment benefits:

Net actuarial loss

(1,495.2)

(1,513.4)

Prior service credits

106.2

110.3

Accumulated other comprehensive loss

$

(1,998.4)

$

(1,970.5)

(10) Stock Plans

Wehave variousstock-based compensationprograms underwhich awards,including stockoptions, restrictedstock, restrictedstock

units, and performanceawards, may be grantedto employees and non-employeedirectors. These programsand related accountingare

14

described in Note12 to theConsolidated FinancialStatements includedin our AnnualReport on Form10-K for thefiscal year ended

May 29, 2022.

Compensation expense related to stock-based payments recognizedin the Consolidated Statements of Earnings was as follows:

Quarter Ended

In Millions

Aug. 28, 2022

Aug. 29, 2021

Compensation expense related to stock-based payments

$

33.5

$

33.6

Windfall tax benefits from stock-based paymentsin income tax expense in our Consolidated Statements of Earnings were as follows:

Quarter Ended

In Millions

Aug. 28, 2022

Aug. 29, 2021

Windfall tax benefits from stock-based payments

$

12.8

$

4.7

AsofAugust28,2022,unrecognizedcompensationexpenserelatedtonon-vestedstockoptions,restrictedstockunits,and

performance share units was $

166.8

million. This expense will be recognized over

26

months, on average.

Net cash proceeds from the exercise of stock optionsless shares used for withholding taxes and the intrinsicvalue of options exercised

were as follows:

Quarter Ended

In Millions

Aug. 28, 2022

Aug. 29, 2021

Net cash proceeds

$

65.5

$

7.9

Intrinsic value of options exercised

$

32.0

$

5.1

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.

TheestimatedfairvaluesofstockoptionsgrantedandtheassumptionsusedfortheBlack-Scholesoption-pricingmodelwereas

follows:

Quarter Ended

Aug. 28, 2022

Aug. 29, 2021

Estimated fair values of stock options granted

$

14.16

$

8.77

Assumptions:

Risk-free interest rate

3.3

%

1.5

%

Expected term

8.5

years

8.5

years

Expected volatility

20.9

%

20.2

%

Dividend yield

3.1

%

3.4

%

The total grant date fair value of restricted stock unit awards that vested duringthe period was as follows:

Quarter Ended

In Millions

Aug. 28, 2022

Aug. 29, 2021

Total grant date fairvalue

$

82.0

$

69.5

15

(11) Earnings Per Share

Basic and diluted earnings per share (EPS) were calculated using the following:

Quarter Ended

In Millions, Except per Share Data

Aug. 28, 2022

Aug. 29, 2021

Net earnings attributable to General Mills

$

820.0

$

627.0

Average numberof common shares - basic EPS

600.2

610.4

Incremental share effect from: (a)

Stock options

3.3

2.1

Restricted stock units and performance share units

2.5

2.3

Average numberof common shares - diluted EPS

606.0

614.8

Earnings per share – basic

$

1.37

$

1.03

Earnings per share – diluted

$

1.35

$

1.02

(a)Incrementalsharesfromstockoptions,restrictedstockunits,andperformanceshareunitsarecomputedbythetreasurystock

method.

Stockoptions,restrictedstockunits,andperformanceshare unitsexcludedfromourcomputationofdilutedEPSbecausethey

were not dilutive were as follows

:

Quarter Ended

In Millions

Aug. 28, 2022

Aug. 29, 2021

Anti-dilutive stock options, restricted stock units, and

performance share units

0.8

4.6

(12) Share Repurchases

Share repurchases were as follows:

Quarter Ended

In Millions

Aug. 28, 2022

Aug. 29, 2021

Shares of common stock

6.9

2.5

Aggregate purchase price

$

500.8

$

150.1

(13) Statements of Cash Flows

Our Consolidated Statements of Cash Flows include the following:

Quarter Ended

In Millions

Aug. 28, 2022

Aug. 29, 2021

Net cash interest payments

$

55.2

$

69.9

Net income tax payments

$

9.0

$

33.1

16

(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

Aug. 28,

2022

Aug. 29,

2021

Aug. 28,

2022

Aug. 29,

2021

Aug. 28,

2022

Aug. 29,

2021

Service cost

$

17.6

$

23.7

$

1.4

$

1.9

$

2.1

$

1.8

Interest cost

64.6

46.3

4.5

3.2

0.8

0.4

Expected return on plan assets

(105.0)

(102.8)

(7.8)

(6.7)

-

-

Amortization of losses (gains)

28.3

34.9

(4.9)

(2.7)

0.1

0.8

Amortization of prior service costs (credits)

0.4

0.2

(5.8)

(5.2)

0.1

0.1

Other adjustments

-

-

-

-

3.0

1.9

Curtailment gain

-

(14.8)

-

(5.5)

-

-

Net expense (income)

$

5.9

$

(12.5)

$

(12.6)

$

(15.0)

$

6.1

$

5.0

(15) Income Taxes

Duringthefirstquarteroffiscal2023,theInflationReductionAct(IRA)wassignedintolaw.TheIRAintroducesaCorporate

Alternative Minimum Taxbeginning in our fiscal 2024and an excise tax on therepurchase of corporatestock starting after January1,

2023. Wedo notcurrently expect theIRA to havea material impacton our financialresults, including ourannual estimated effective

taxrate,oronourliquidity.WewillcontinuetomonitorandassesstheimpacttheIRAmayhaveonourbusinessandfinancial

results.

During fiscal2022, theBrazilian taxauthority,Secretaria daReceita Federaldo Brasil(RFB), concludedaudits ofour 2012through

2018taxreturnyears.Theseauditsincludedareviewofourdeterminationsofamortizationofcertaingoodwillarisingfromthe

acquisition ofYokiAlimentos S.A.The RFBhas proposedadjustments thateffectivelyeliminate thegoodwill amortizationbenefits

related to this transaction. Webelieve we have meritorious defenses and intend to continue to contest the disallowancefor all years.

(16) Contingencies

Duringfiscal2020,wereceivednoticefromthetaxauthorities oftheState ofSãoPaulo,Brazilregardingourcompliancewithits

state sales tax requirements.As a result, wehave been assessed additionalstate sales taxes, interest,and penalties. Webelieve that we

have meritorious defenses against this claim and will vigorously defendour position. As of August 28, 2022, we are unable to estimate

any possible loss and have not recorded a loss contingency for this matter.

(17) Business Segment and Geographic Information

Weoperateinthepackagedfoodsindustry.Infiscal2022,wecompletedaneworganizationstructuretostreamlineourglobal

operations.Thisglobalreorganizationrequiredustoreevaluateouroperatingsegments.Underourneworganizationstructure,our

chief operating decision maker assesses performanceand makes decisions about resources to be allocated toour operating segments as

follows: North America Retail; International; Pet; and North AmericaFoodservice.

Wehave restatedour netsales by segmentand segmentoperating profitto reflect ourpreviously reportedoperating segmentchange.

Thesesegmentchangeshadnoeffectonpreviouslyreportedconsolidatednetsales,operatingprofit,netearningsattributableto

General Mills, or earnings per share.

Our North America Retailoperating segment reflects businesswith a wide variety ofgrocery stores, mass merchandisers, membership

stores,naturalfoodchains,drug,dollaranddiscountchains,conveniencestores,ande-commercegroceryproviders.Ourproduct

categoriesinthisbusinesssegmentincludeready-to-eatcereals,refrigeratedyogurt,soup,mealkits,refrigeratedandfrozendough

products,dessertandbakingmixes,frozenpizzaandpizzasnacks,snackbars,fruitsnacks,savorysnacks,andawidevarietyof

organic productsincluding ready-to-eatcereal, frozenand shelf-stable vegetables,meal kits, fruitsnacks, snackbars, andrefrigerated

yogurt.

OurInternationaloperatingsegmentconsistsofretailandfoodservicebusinessesoutsideoftheUnitedStatesandCanada.Our

product categories include super-premiumice cream and frozen desserts, meal kits, salty snacks,snack bars, dessert and baking mixes,

andshelfstablevegetables.Wealsosellsuper-premiumicecreamandfrozendessertsdirectlytoconsumersthroughownedretail

17

shops. OurInternational segmentalso includesproducts manufacturedin the UnitedStates forexport, mainlyto Caribbeanand Latin

American markets, as well asproducts we manufacturefor sale to our internationaljoint ventures. Revenues fromexport activities are

reported in the region or country where the end customer is located.

Our Pet operating segment includespet food products sold primarily in theUnited States and Canada in nationalpet superstore chains,

e-commerce retailers,grocery stores,regional petstore chains,mass merchandisers,and veterinaryclinics andhospitals. Ourproduct

categories include dog and cat food (dryfoods, wet foods, and treats) made withwhole meats, fruits, vegetables and otherhigh-quality

naturalingredients.Ourtailoredpetproductofferingsaddressspecificdietary,lifestyle,andlife-stageneedsandspandifferent

product types, diet types, breed sizes for dogs, lifestages, flavors, productfunctions,and textures and cuts for wet foods.

OurNorthAmericaFoodservicesegmentconsistsoffoodservicebusinessesintheUnitedStatesandCanada.Ourmajorproduct

categoriesinourNorthAmericaFoodserviceoperatingsegmentareready-to-eatcereals,snacks,refrigeratedyogurt,frozenmeals,

unbaked andfully bakedfrozen dough products,baking mixes,and bakeryflour.Many productswe sell arebranded to theconsumer

and nearlyall arebranded toour customers.Wesell todistributors andoperators inmany customerchannels includingfoodservice,

vending, and supermarket bakeries.

Operating profitfor thesesegments excludesunallocated corporateitems, gainor losson divestitures,and restructuring,impairment,

andotherexitcosts.Unallocatedcorporateitemsincludecorporateoverheadexpenses,variancestoplannedNorthAmerican

employeebenefitsandincentives,certaincharitablecontributions,restructuringinitiativeproject-relatedcosts,gainsandlosseson

corporate investments,and otheritems thatare notpart ofour measurementof segmentoperating performance.These includegains

andlossesarisingfromtherevaluationofcertaingraininventoriesandgainsandlossesfrommark-to-marketvaluationofcertain

commodity positionsuntil passed backto our operatingsegments. These itemsaffecting operatingprofit are centrallymanaged atthe

corporatelevelandareexcludedfromthemeasureofsegmentprofitabilityreviewedbyexecutivemanagement.Underoursupply

chain organization, our manufacturing,warehouse, and distribution activities are substantially integratedacross our operations in order

to maximizeefficiencyand productivity.As aresult, fixedassets anddepreciation andamortization expensesare neithermaintained

nor available by operating segment.

Our operating segment results were as follows:

Quarter Ended

In Millions

Aug. 28, 2022

Aug. 29, 2021

Net sales:

North America Retail

$

2,988.8

$

2,710.6

International

652.5

930.6

Pet

579.9

488.0

North America Foodservice

496.4

410.7

Total

$

4,717.6

$

4,539.9

Operating profit:

North America Retail

$

777.8

$

648.6

International

34.8

60.6

Pet

123.1

115.2

North America Foodservice

53.6

71.8

Total segment operatingprofit

$

989.3

$

896.2

Unallocated corporate items

333.0

56.2

Divestitures gain, net

(430.9)

-

Restructuring, impairment, and other exit costs (recoveries)

1.6

(4.3)

Operating profit

$

1,085.6

$

844.3

18

Net sales for our North America Retail operating units were as follows:

Quarter Ended

In Millions

Aug. 28, 2022

Aug. 29, 2021

U.S. Meals & Baking Solutions

$

949.2

$

861.5

U.S. Morning Foods

904.0

829.7

U.S. Snacks

887.2

780.1

Canada

248.4

239.3

Total

$

2,988.8

$

2,710.6

Net sales by class of similar products were as follows:

Quarter Ended

In Millions

Aug. 28, 2022

Aug. 29, 2021

Snacks

$

1,068.4

$

954.5

Cereal

814.7

731.0

Convenient meals

679.2

695.5

Pet

580.8

488.0

Baking mixes and ingredients

473.5

396.3

Dough

464.8

405.2

Yogurt

346.0

505.9

Super-premium ice cream

183.5

244.8

Other

106.7

118.7

Total

$

4,717.6

$

4,539.9

19

Item 2.Management’s Discussion and Analysisof Financial Condition and Results of Operations.

INTRODUCTION

ThisManagement’sDiscussionandAnalysisofFinancialConditionandResultsofOperations(MD&A)shouldbereadin

conjunctionwiththeMD&AincludedinourAnnualReportonForm10-KforthefiscalyearendedMay29,2022forimportant

backgroundregarding,among otherthings, ourkey businessdrivers.Significanttrademarks andservice marksused inour business

are set forth in

italics

herein. Certain terms used throughout this report are defined in the“Glossary” section below.

We expectthe largest factors impacting ourperformance in fiscal 2023 will bethe economic health of consumers, theinflationary cost

environment, and the frequency andseverity of disruptions in the supplychain. Weanticipate double-digit input cost inflationin fiscal

2023andareaddressinginflationheadwindswithHolisticMarginManagement(HMM)costsavingsandnetpricerealization

generatedthroughourStrategicRevenueManagement(SRM)capability.Weareplanningforvolumeelasticitiestoincreasebut

remain below historical levels and supply chain disruptions to slowly moderatein fiscal 2023 compared to fiscal 2022 levels.

CONSOLIDATEDRESULTSOF OPERATIONS

First Quarter Results

In the first quarter of fiscal2023, net sales increased 4percent and organic net salesincreased 10 percent comparedto the same period

last year.Operating profit increased 29 percent to $1,086million, primarily driven by favorablenet price realization and mix anda net

gainondivestitures,partiallyoffsetbyhigherinputcosts,anunfavorablechangetothemark-to-marketvaluationofcertain

commoditypositionsandgraininventories,volumedeclines,anincreaseincertainselling,generalandadministrative(SG&A)

expenses,andlowernetcorporateinvestmentactivity.Operatingprofitmarginof23percentincreased440basispoints.Adjusted

operating profitof $881million increased8 percenton aconstant-currency basis,primarily drivenby favorablenet pricerealization

and mix,partially offsetby higherinput costs, volumedeclines andan increase incertain SG&A expenses.Adjusted operatingprofit

margin increased70 basis pointsto 18.7 percent.Diluted earningsper share of$1.35 increased 32percent in thefirst quarter offiscal

2023.Adjusted dilutedearnings pershare of$1.11increased 13 percenton aconstant-currency basiscompared tothe firstquarter of

fiscal 2022. See the “Non-GAAP Measures” section below for a descriptionof our use of measures not defined by GAAP.

A summary of our consolidated financial results for the first quarter offiscal 2023 follows:

Quarter Ended Aug. 28, 2022

In millions,

except per share

Quarter Ended

Aug. 28, 2022 vs.

Aug. 29, 2021

Percent

of Net

Sales

Constant-

Currency

Growth (a)

Net sales

$

4,717.6

4

%

Operating profit

1,085.6

29

%

23.0

%

Net earnings attributable to General Mills

820.0

31

%

Diluted earnings per share

$

1.35

32

%

Organic net sales growth rate (a)

10

%

Adjusted operating profit (a)

881.2

8

%

18.7

%

8

%

Adjusted diluted earnings per share (a)

$

1.11

12

%

13

%

(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

Aug. 28, 2022

Aug. 28, 2022 vs.

Aug. 29, 2021

Aug. 29, 2021

Net sales (in millions)

$

4,717.6

4%

$

4,539.9

Contributions from volume growth (a)

(12)

pts

Net price realization and mix

17

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.

Net salesin thefirst quarterof fiscal2023increased 4percent comparedto thesame periodin fiscal2022,driven byfavorablenet

pricerealizationandmix,partiallyoffsetbyadecreaseincontributionsfromvolumegrowthandunfavorableforeigncurrency

exchange.

20

Components of organic net sales growth are shown in the followingtable:

Quarter Ended Aug. 28, 2022 vs.

Quarter Ended Aug. 29, 2021

Contributions from organic volume growth (a)

(5)

pts

Organic net price realization and mix

15

pts

Organic net sales growth

10

pts

Foreign currency exchange

(1)

pt

Acquisitions and divestitures

(5)

pts

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.

Organicnetsalesincreased10percentinthefirstquarteroffiscal2023comparedtothesameperiodinfiscal2022,asfavorable

organic net price realization and mix was partially offsetby a decrease in contributions from organic volume growth.

Cost ofsales

increased $328 millionto $3,270million inthe firstquarter offiscal 2023compared tothe sameperiod infiscal 2022.

The increasewas primarilydriven bya $451 millionincrease attributableto productrate andmix partiallyoffsetby a$343 million

decrease attributable to lower volume. Werecorded a $175 million net increase in cost ofsales related to the mark-to-market valuation

of certaincommodity positionsand graininventories inthe firstquarter offiscal 2023compared toa $24million netdecrease inthe

first quarter offiscal 2022. In thefirst quarter offiscal 2023, we recordeda $21 millioncharge relatedto a voluntaryrecall on certain

international

Häagen-Dazs

ice cream products.

SG&A expenses

increased $34 millionto $791 million inthe first quarterof fiscal 2023,compared to thesame period infiscal 2022,

primarily driven by valuation adjustmentsand the loss on sale ofcertain corporate investments in fiscal2023 and a recovery relatedto

a Brazil indirecttax item infiscal 2022. SG&Aexpenses as apercent of netsales in thefirst quarter offiscal 2023 increased10 basis

points compared to the first quarter of fiscal 2022.

Divestituresgain, net

totaled $431million inthe firstquarter offiscal 2023,primarily relatedto thesale ofour Helpermain meals

andSuddenlySaladsidedishesbusiness(pleaserefertoNote2totheConsolidatedFinancialStatementsinPartI,Item1ofthis

report).

Restructuring,impairment,andotherexitcosts(recoveries)

totaled$2millionofexpensesinthefirstquarteroffiscal2023,

compared to anet recovery of $4million in thesame period last year(please refer toNote 3 to theConsolidated Financial Statements

in Part I, Item 1 of this report).

Benefit plannon-service income

totaled $22 millionin thefirst quarterof fiscal2023, comparedto $30 millionin thesame period

last year, primarily reflecting an increasein interest costs, partially offset by lower amortization of losses.

Interest,net

forthe firstquarter offiscal 2023totaled $88 million,down $8 millionfrom thefirst quarterof fiscal2022,primarily

driven by lower average long-term debt levels.

The

effective tax rate

for the first quarter of fiscal2023 was 21.2 percent comparedto 21.7 percent for the firstquarter of fiscal 2022.

The0.5percentagepointdecreasewasprimarilyduetocertainnonrecurringdiscretetaxbenefits,partiallyoffsetbycertain

unfavorable tax componentsrelated to thedivestituresin the first quarterof fiscal 2023. Oureffective taxrate excluding certainitems

affecting comparabilitywas 19.7 percentin the firstquarter of fiscal2023, comparedto 21.7 percentin the sameperiod last year(see

the “Non-GAAPMeasures” sectionbelow fora descriptionof ouruse ofmeasures notdefined byGAAP). The2.0 percentagepoint

decrease was primarily due to certain nonrecurring discrete tax benefitsin the first quarter of fiscal 2023.

21

After-tax earningsfromjoint ventures

for thefirst quarterof fiscal2023

decreased to$20 million comparedto $29 millionin the

same periodin fiscal 2022,primarily drivenby higherinput costs atCereal Partners Worldwide(CPW) and Häagen-Dazs Japan, Inc.

(HDJ), partiallyoffsetby positivenet pricerealization andmix atCPW.On aconstant-currencybasis, after-taxearnings fromjoint

ventures decreased27 percent (seethe “Non-GAAPMeasures” sectionbelow fora description ofour use ofmeasures not definedby

GAAP).

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

Quarter Ended Aug. 28, 2022 vs.

Quarter Ended Aug. 29, 2021

CPW

HDJ

Total

Contributions from volume growth (a)

(5)

pts

(8)

pts

Net price realization and mix

8

pts

Flat

Net sales growth in constant currency

3

pts

(8)

pts

1

pt

Foreign currency exchange

(11)

pts

(17)

pts

(12)

pts

Net sales growth

(7)

pts

(25)

pts

(11)

pts

Note: Table may not foot due to rounding.

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

Averagedilutedsharesoutstanding

decreasedby9millioninthefirstquarteroffiscal2023fromthesameperiodayearago

primarily due to share repurchases.

SEGMENT OPERATINGRESULTS

Our businesses areorganized into fouroperating segments: NorthAmerica Retail; International;Pet, and NorthAmerica Foodservice.

PleaserefertoNote17oftheConsolidatedFinancialStatementsinPartI,Item1ofthisreportforadescriptionofouroperating

segments.

North America Retail Segment Results

North America Retail net sales were as follows:

Quarter Ended

Aug. 28,

2022

Aug. 28, 2022 vs

Aug. 29, 2021

Aug. 29,

2021

Net sales (in millions)

$

2,988.8

10

%

$

2,710.6

Contributions from volume growth (a)

(6)

pts

Net price realization and mix

16

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.

NorthAmericaRetailnetsales increased10percentinthe firstquarteroffiscal2023 comparedtothesameperiodinfiscal2022,

driven by favorable net price realization and mix, partially offsetby a decrease in contributions from volume growth.

22

The components of North America Retail organic netsales growth are shown in the following table:

Quarter Ended

Aug. 28, 2022

Contributions from organic volume growth (a)

(5)

pts

Organic net price realization and mix

17

pts

Organic net sales growth

12

pts

Foreign currency exchange

Flat

Divestiture (b)

(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.

(b) Divestiture of Helper main meals and Suddenly Salad side dishes businesses in fiscal 2023. Please see Note 2 to the Consolidated Financial

Statements in Part I, Item 1 of this report.

North AmericaRetail organicnet salesincreased 12percent inthe firstquarter offiscal 2023compared tothe sameperiod infiscal

2022,driven byfavorable organicnet pricerealization andmix,partially offsetby adecrease incontributions fromorganicvolume

growth.

North America Retail net sales percentage change by operating unit are shownin the following table:

Quarter Ended

Aug. 28, 2022

U.S. Snacks

14

%

U.S. Meals & Baking Solutions

10

%

U.S. Morning Foods

9

%

Canada (a)

4

%

Total

10

%

(a)On a constant-currency basis, Canada net sales increased 7 percent in the first 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 profitincreased 20 percentto $778 million inthe first quarterof fiscal 2023compared to $649 millionin the same

period in fiscal2022, primarily drivenby favorable netprice realizationand mix, partiallyoffset by higherinput costs anda decrease

in contributions from volume growth. Segmentoperating profit increased 20 percent on a constant-currencybasis in the first quarter of

fiscal 2023 comparedto the same periodin fiscal 2022 (seethe “Non-GAAP Measures”section below forour use of thismeasure not

defined by GAAP).

International Segment Results

International net sales were as follows:

Quarter Ended

Aug. 28,

2022

Aug. 28, 2022 vs

Aug. 29, 2021

Aug. 29,

2021

Net sales (in millions)

$

652.5

(30)

%

$

930.6

Contributions from volume growth (a)

(39)

pts

Net price realization and mix

14

pts

Foreign currency exchange

(5)

pts

Note: Table may not foot due to rounding.

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

International netsales decreased 30percent in thefirst quarter offiscal 2023compared to thesame periodin fiscal 2022,driven bya

decrease incontributions fromvolume growth,including theimpact ofvolume declinesfrom divestituresand thevoluntary recallon

certaininternational

Häagen-Dazs

icecreamproducts,andunfavorableforeigncurrencyexchange,partiallyoffsetby favorablenet

price realization and mix.

23

The components of International organic net sales growthare shown in the following table:

Quarter Ended

Aug. 28, 2022

Contributions from organic volume growth (a)

(7)

pts

Organic net price realization and mix

5

pts

Organic net sales growth

(2)

pts

Foreign currency exchange

(5)

pts

Divestitures (b)

(23)

pts

Net sales growth

(30)

pts

Note: Table may not foot due to rounding.

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

(b) Divestitures primarily include the impact of the sale of our interests in Yoplait SAS, YoplaitMarques SNC, and Liberté Marques Sàrl and our

European dough businesses in fiscal 2022.

International organic net sales decreased2 percent in the first quarter of fiscal 2023compared to the same period in fiscal 2022, driven

by a decreasein contributions fromorganic volumegrowth, includingthe impact ofthe ice creamrecall, partiallyoffset byfavorable

organic net price realization and mix.

Segment operating profitdecreased 43 percentto $35 million in thefirst quarter offiscal 2023 from $61million in the sameperiod in

fiscal2022,primarilydrivenbyadecreaseincontributionsfromvolumegrowth,includingtheimpactofvolumedeclinesfrom

divestitures andthe icecream recall,and higherinput costs,partially offsetby favorable netprice realizationand mix anda decrease

inSG&Aexpenses.Segmentoperatingprofitdecreased34percentonaconstant-currencybasisinthefirstquarteroffiscal2023

compared to thesame period infiscal 2022 (seethe “Non-GAAP Measures”section below forour use ofthis measure notdefined by

GAAP).

Pet Segment Results

Pet net sales were as follows:

Quarter Ended

Aug. 28,

2022

Aug. 28, 2022 vs

Aug. 29, 2021

Aug. 29,

2021

Net sales (in millions)

$

579.9

19

%

$

488.0

Contributions from volume growth (a)

(1)

pt

Net price realization and mix

20

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.

Petnetsalesincreased19percentduringthefirstquarteroffiscal2023comparedtothesameperiodinfiscal2022,drivenby

favorable net price realization and mix, partially offsetby a decrease in contributions from volume growth.

24

The components of Pet organic net sales growth are shown in the followingtable:

Quarter Ended

Aug. 28, 2022

Contributions from organic volume growth (a)

(3)

pts

Organic net price realization and mix

17

pts

Organic net sales growth

14

pts

Foreign currency exchange

Flat

Acquisition (b)

5

pts

Net sales growth

19

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.

Petorganicnetsalesincreased14 percentinthefirstquarteroffiscal2023comparedto thesameperiodinfiscal2022,drivenby

favorable organic net price realization and mix, partially offsetby a decrease in contributions from organic volume growth.

Segment operatingprofit increased7 percentto $123 millionin thefirst quarterof fiscal2023 comparedto $115million inthe same

period in fiscal 2022,primarily driven by favorablenet price realization andmix, partially offsetby higher input costsand an increase

inSG&Aexpenses.Segmentoperatingprofitincreased7percentonaconstant-currencybasisinthefirstquarteroffiscal2023

compared to thesame period infiscal 2022 (seethe “Non-GAAP Measures”section below forour use ofthis measure notdefined by

GAAP).

North America Foodservice Segment Results

North America Foodservice net sales were as follows:

Quarter Ended

Aug. 28,

2022

Aug. 28, 2022 vs

Aug. 29, 2021

Aug. 29,

2021

Net sales (in millions)

$

496.4

21

%

$

410.7

Contributions from volume growth (a)

(1)

pt

Net price realization and mix

22

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.

NorthAmericaFoodservicenetsalesincreased21percentinthefirstquarteroffiscal2023comparedtothesameperiodinfiscal

2022, drivenby favorable netprice realizationand mix, includingmarket index pricingon bakery flour,partially offsetby a decrease

in contributions from volume growth.

The components of North America Foodservice organicnet sales growth are shown in the following table:

Quarter Ended

Aug. 28, 2022

Contributions from organic volume growth (a)

(3)

pts

Organic net price realization and mix

21

pts

Organic net sales growth

18

pts

Foreign currency exchange

Flat

Acquisition (b)

3

pts

Net sales growth

21

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.

25

North AmericaFoodservice organicnet salesincreased 18percent inthe firstquarter offiscal 2023compared tothe sameperiod in

fiscal 2022, drivenby favorable organicnet price realizationand mix,including marketindex pricing onbakery flour,partially offset

by a decrease in contributions from organic volume growth.

Segment operatingprofit decreased25 percentto $54million inthe firstquarter offiscal 2023compared to$72 million inthe same

period in fiscal2022, primarily driven byhigher input costs andan increase in SG&Aexpenses, partially offsetby favorable net price

realizationandmix.Segmentoperatingprofitdecreased25percentonaconstant-currencybasisinthefirstquarteroffiscal2023

compared to thesame period infiscal 2022 (seethe “Non-GAAP Measures”section below forour use ofthis measure notdefined by

GAAP).

UNALLOCATEDCORPORATEITEMS

Unallocated corporateexpense totaled$333 million inthe firstquarter offiscal 2023,compared to$56 million inthe sameperiod in

fiscal2022.Inthefirstquarteroffiscal2023,werecordeda$175 millionnetincreaseinexpenserelatedtothemark-to-market

valuation ofcertain commoditypositions andgrain inventoriescompared toa $24 millionnet decreasein expensein the sameperiod

last year.Werecorded $26 millionof net lossesrelated to valuationadjustments andthe loss onsale of certaincorporate investments

inthefirst quarterof fiscal2023,comparedto$1 millionofnetlosses relatedtovaluationadjustmentsinthefirstquarteroffiscal

2022. In the first quarter of fiscal 2023,we recorded a $22 million charge related to avoluntary recall on certain international

Häagen-

Dazs

ice cream products.In addition, werecorded $2 millionof integration costsprimarily relatedto our acquisitionof TNT Crustin

thefirstquarteroffiscal2023comparedto$12 millionofintegrationcostsrelatedtoouracquisitionofTysonFoods’pettreats

businessinthefirstquarter offiscal2022.Also,in thefirst quarterof fiscal2022,we recordeda $21millionrecoveryrelatedtoa

Brazilindirecttaxitem,a$13 millioninsurancerecovery and$11 millionoftransactioncosts relatedtothesale ofourinterestsin

YoplaitSAS, YoplaitMarques SNC, and Liberté Marques Sàrl.

LIQUIDITYAND CAPITALRESOURCES

During the first quarter offiscal 2023,cash provided by operations was $389million compared to $370 million inthe same period last

year.The $19 millionincrease wasmainly drivenby a$185 millionincrease innet earnings,a $180million changein currentassets

andliabilities,anda$94millionchangeinothernon-cashitemsinnetearnings,includingchangesinthevaluationofcertain

corporate investments.These werepartially offsetby a$431 millionnet divestituresgain. The$180 millionchange incurrent assets

and liabilities is primarily driven by an $85million change in the timing of accounts payable anda $54 million change in the timing of

accounts receivable.

Cash provided byinvesting activities during thefirst quarter of fiscal2023 was $266 millioncompared to cash usedof $1,298 million

for the sameperiod in fiscal2022. During thefirst quarter of the2023, we completedthe sale of theHelper main meals and Suddenly

Salad side dishesbusiness for $607million cash. Inthe first quarterof fiscal 2023,we acquired TNTCrust for $252million cash, net

of cashacquired. Inthe firstquarter offiscal 2022,we acquiredthe TysonFoods’ pettreats business foran aggregatepurchase price

of$1.2 billion.Inaddition,wespent$91milliononpurchasesofland,buildings,andequipmentinthefirstquarteroffiscal2023

compared to $104 million in the same period last year.

Cash usedby financingactivities duringthe firstquarter offiscal 2023was $609 millioncompared to$195 million ofcash provided

byfinancingactivitiesinthesameperiodinfiscal2022.Wepaid$325 millionofdividendsinthefirstquarteroffiscal2023,

compared to$312 million inthe sameperiod lastyear.Wepaid $501million forpurchases ofcommon stockfor treasuryin thefirst

quarteroffiscal2023,comparedto$150millioninthesameperiodinfiscal2022.Inaddition,wehad$188millionofnetdebt

issuances in the first quarter of fiscal 2023, compared to $669 million in the first quarterof fiscal 2022.

As of August28, 2022, we had$533 million of cashand cash equivalentsin foreign jurisdictions. Inanticipation of repatriatingfunds

fromforeignjurisdictions,werecordlocalcountrywithholdingtaxesonourinternationalearnings,asapplicable.Furthermore,we

may repatriate ourcash and cash equivalentsheld by ourforeign subsidiaries withoutsuch funds beingsubject to furtherU.S. income

tax liability. Earnings priorto fiscal 2018 from our foreign subsidiaries remain permanently reinvestedin those jurisdictions.

The following table details the fee-paid committed and uncommitted creditlines we had available as of August 28, 2022:

In Billions

Facility

Amount

Borrowed

Amount

Committed credit facility expiring April 2026

$

2.7

$

-

Uncommitted credit facilities

0.6

0.2

Total committedand uncommitted credit facilities

$

3.3

$

0.2

26

Thethird-partyholderoftheGeneralMillsCereals,LLC(GMC)Class AInterestsreceivesquarterlypreferreddistributionsfrom

available netincome basedon the applicationof afloating preferredreturn rateto theholder’s capitalaccount balanceestablished in

themostrecentmark-to-marketvaluation(currently$252 million).OnJune 1,2021,thefloatingpreferredreturnrateonGMC’s

Class A Interestswas resetto thesum ofthree-month LIBORplus 160basis points.The preferredreturn rateis adjustedevery three

years through a negotiated agreement with the Class A Interest holderor through a remarketing auction.

Wehave an optionto purchase theClass A Interests forconsideration equal tothe then currentcapital account value,plus any unpaid

preferred returnand theprescribed make-wholeamount. Ifwe purchasethese interests,any changein thethird-party holder’scapital

accountfromitsoriginalvaluewillbechargeddirectlytoretainedearningsandwillincreaseordecreasethenetearningsusedto

calculate EPS in that period.

To ensure availabilityof funds, we maintain bank credit lines and have commercial paper programsavailable to us in the United States

and Europe. Wealso have uncommitted and asset-backed credit lines that support ourforeign operations.

Certainofourlong-termdebtagreements,ourcreditfacilities,andournoncontrollinginterestscontainrestrictivecovenants.Asof

August 28, 2022, we were in compliance with all of these covenants.

Wehave $2,095 millionof long-term debtmaturing in thenext 12 monthsthat is classifiedas current, including$500 million of2.60

percent fixed-rate notesdue October12, 2022,$100 millionof 6.41percent fixed-ratenotes dueOctober 15,2022, €250million of

0.00 percentfixed-rate notes dueNovember 11,2022, €500 millionof 1.00percent fixed-ratenotes dueApril 27, 2023,€250 million

of 0.00percent fixed-ratenotes dueMay 16,2023and €500million of0.00 percentfixed-rate notesdue July27, 2023.Webelieve

that cash flows from operations, together with available short-and long-term debt financing, will be adequate to meetour liquidity and

capital needs for at least the next 12 months.

CRITICAL ACCOUNTING ESTIMATES

Our significant accounting policies are described in Note 2to the Consolidated Financial Statements includedin our Annual Report on

Form10-K forthe fiscalyear endedMay 29,2022. Theaccounting policiesused inpreparing ourinterim fiscal2023

Consolidated

Financial Statements are the same as those described in our Form 10-K.

Ourcriticalaccountingestimatesarethosethathavemeaningfulimpactonthereportingofourfinancialconditionandresultsof

operations.Theseestimatesincludeouraccountingforrevenuerecognition,valuationoflong-livedassets,intangibleassets,stock-

based compensation,income taxes,and definedbenefit pension,other postretirementbenefit, andpostemployment benefitplans. The

assumptions and methodologies usedin the determination ofthose estimates as of August28, 2022, are thesame as those described in

our Annual Report on Form 10-K for the fiscal year ended May 29, 2022.

Ourannualgoodwillandindefinite-livedintangibleassetsimpairmenttestwasperformedonthefirstdayofthesecondquarterof

fiscal2022,andwedeterminedtherewasnoimpairmentofourintangibleassetsastheirrelatedfairvaluesweresubstantiallyin

excess of the carrying values, except for the

Uncle Toby’s

brand intangible asset.

The excess fair value as of the fiscal 2022test date of the

Uncle Toby’s

brand intangible asset is as follows:

In Millions

Carrying Valueof

Intangible Asset

Excess Fair Valueas of

Fiscal 2022 TestDate

Uncle Toby's

$

55.0

7

%

Inaddition,whilehavingsignificantcoverageasofourfiscal2022assessmentdate,the

Progresso

,

GreenGiant

,and

EPIC

brand

intangible assets had risk of decreasing coverage. Wewill continue to monitor these businesses for potential impairment.

RECENTLYISSUED ACCOUNTING PRONOUNCEMENTS

In March 2020, the FinancialAccounting Standards Board (FASB)issued optional accounting guidancefor a limited period of timeto

easethepotentialburdeninaccountingforreferencerate reform.The newstandardprovidesexpedientsandexceptions toexisting

accountingrequirementsforcontractmodificationsandhedge accountingrelatedtotransitioningfrom discontinuedreferencerates,

such asLIBOR,to alternativereferencerates, ifcertaincriteria aremet. Thenew accountingrequirementscan beapplied asof the

beginning ofthe interimperiod includingMarch 12, 2020,or anydate thereafter,through December 31,2022. Weare inthe process

of reviewing our contractsand arrangements thatwill be affected bya discontinued reference rateand are analyzing theimpact of this

guidance on our results of operations and financial position.

27

NON-GAAP MEASURES

Wehaveincludedinthisreportmeasuresoffinancialperformancethatare notdefinedbyGAAP.Webelievethatthesemeasures

provide useful information to investors, and include these measures in othercommunications to investors.

For eachof thesenon-GAAP financialmeasures, weare providingbelow areconciliation ofthe differencesbetween thenon-GAAP

measure and the mostdirectly comparable GAAP measure,an explanation of whywe believe the non-GAAPmeasure provides useful

information toinvestors, andany additionalmaterial purposesfor whichour managementor Boardof Directorsuses thenon-GAAP

measure. These non-GAAP measures should be viewed in addition to, and notin lieu of, the comparable GAAP measure.

Significant Items Impacting Comparability

Severalmeasuresbelowarepresentedonanadjustedbasis.Theadjustmentsareeitheritemsresultingfrominfrequentlyoccurring

events or items that, in management’sjudgment, significantly affect the year-to-yearassessment of operating results.

The following are descriptions of significant items impacting comparabilityof our results.

Divestituresgain, net

Net divestituresgain primarilyrelated tothe saleof ourHelper mainmeals andSuddenly Saladside dishesbusiness infiscal 2023.

Please see Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this report.

Transaction costs

TransactioncostsprimarilyrelatedtothesaleofourHelpermainmealsandSuddenlySaladsidedishesbusinessinfiscal2023.

Transactioncosts relatedto thesale ofour interestsin YoplaitSAS, YoplaitMarques SNC,and LibertéMarques Sàrlin fiscal2022.

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.

Acquisition integration costs

Integration costsprimarily resultingfrom the acquisitionof TNT Crustin fiscal 2023.Integration costsresulting fromthe acquisition

of TysonFoods’ pet treats businessin fiscal 2022.Please see Note2 to the ConsolidatedFinancial Statements inPart I, Item1 of this

report.

Investment activity,net

Valuationadjustments andthe loss onsale of certaincorporate investments infiscal 2023. Valuationadjustments of certaincorporate

investments in fiscal 2022.

Mark-to-market effects

Netmark-to-marketvaluationofcertaincommoditypositionsrecognizedinunallocatedcorporateitems.PleaseseeNote6tothe

Consolidated Financial Statements in Part I, Item 1 of this report.

Restructuring charges (recoveries)

Restructuring chargesfor previously announcedrestructuring actions recordedin fiscal 2023and fiscal 2022.Please see Note 3to the

Consolidated Financial Statements in Part I, Item 1 of this report.

Product recall

Voluntaryrecall costs recorded in fiscal 2023 related to certain international

Häagen-Dazs

ice cream products.

CPW restructuring charges

CPW restructuring charges related to previously announcedrestructuring actions.

Organic Net Sales Growth Rates

Weprovide organicnet salesgrowth ratesfor ourconsolidated netsales andsegment netsales. Thismeasure isused inreporting to

ourBoardofDirectorsandexecutivemanagementandasacomponentofthemeasurementofourperformanceforincentive

compensation purposes.Webelieve thatorganic netsales growthrates provideuseful informationto investorsbecause theyprovide

transparencytounderlyingperformanceinournetsalesbyexcludingtheeffectthatforeigncurrencyexchangeratefluctuations,

acquisitions, divestitures,and a 53

rd

week, when applicable,have on year-to-year comparability.A reconciliation ofthese measures to

reported netsales growthrates, therelevant GAAPmeasures, areincluded inour ConsolidatedResults ofOperations andResults of

Segment Operations discussions in the MD&A above.

28

Adjusted Operating Profit as a Percent of Net Sales (Adjusted Operating ProfitMargin)

We believethis measure provides useful informationto investors because it is importantfor assessing our operating profitmargin on a

comparable basis.

Our adjusted operating profit margins are calculated as follows:

Quarter Ended

Aug. 28, 2022

Aug. 29, 2021

In Millions

Value

Percent of

Net Sales

Value

Percent of

Net Sales

Operating profit as reported

$

1,085.6

23.0

%

$

844.3

18.6

%

Divestitures gain, net

(430.9)

(9.1)

%

-

-

%

Mark-to-market effects

174.7

3.7

%

(24.1)

(0.5)

%

Investment activity, net

26.3

0.6

%

0.7

-

%

Product recall

21.5

0.5

%

-

-

%

Restructuring charges (recoveries)

2.3

-

%

(4.1)

(0.1)

%

Acquisition integration costs

1.5

-

%

12.4

0.3

%

Transaction costs

0.2

-

%

10.6

0.2

%

Non-income tax recovery

-

-

%

(20.6)

(0.5)

%

Adjusted operating profit

$

881.2

18.7

%

$

819.2

18.0

%

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 Operating Profit Growth on a Constant-currency Basis

This measure is used in reportingto our Board of Directors andexecutive management and as acomponent of the measurement ofour

performance forincentive compensation purposes.Webelieve thatthis measure providesuseful informationto investors becauseit is

theoperatingprofitmeasureweusetoevaluateoperatingprofitperformanceonacomparableyear-to-yearbasis.Themeasureis

evaluated ona constant-currencybasis byexcluding theeffect thatforeign currencyexchange ratefluctuations haveon year-to-year

comparability given the volatility in foreign currency exchange rates.

Our adjusted operating profit growth on a constant-currency basis is calculatedas follows:

Quarter Ended

Aug. 28, 2022

Aug. 29, 2021

Change

Operating profit as reported

$

1,085.6

$

844.3

29

%

Divestitures gain, net

(430.9)

-

Mark-to-market effects

174.7

(24.1)

Investment activity, net

26.3

0.7

Product recall

21.5

-

Restructuring charges (recoveries)

2.3

(4.1)

Acquisition integration costs

1.5

12.4

Transaction costs

0.2

10.6

Non-income tax recovery

-

(20.6)

Adjusted operating profit

$

881.2

$

819.2

8

%

Foreign currency exchange impact

Flat

Adjusted operating profit growth, on a constant-currency basis

8

%

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.

29

Adjusted Diluted EPS and Related Constant-currency Growth Rates

This measureis used inreporting toour Board ofDirectors and executivemanagement. Webelieve thatthis measure providesuseful

information toinvestors because itis the profitabilitymeasure we useto evaluate earningsperformance ona comparable year-to-year

basis.

The reconciliation of our GAAP measure, diluted EPS, to adjusted dilutedEPS and the related constant-currency growth rates follows:

Quarter Ended

Per Share Data

Aug. 28, 2022

Aug. 29, 2021

Change

Diluted earnings per share, as reported

$

1.35

$

1.02

32

%

Divestitures gain, net

(0.54)

-

Mark-to-market effects

0.22

(0.03)

Investment activity, net

0.04

-

Product recall

0.03

-

Restructuring charges (recoveries)

-

(0.01)

Acquisition integration costs

-

0.02

Transaction costs

-

0.01

Non-income tax recovery

-

(0.02)

Adjusted diluted earnings per share

$

1.11

$

0.99

12

%

Foreign currency exchange impact

(1)

pt

Adjusted diluted earnings per share growth, on a constant-currency basis

13

%

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.

See our reconciliationbelow of the effectiveincome tax rate asreported to the adjustedeffective income taxrate for the taximpact of

each item affecting comparability.

Constant-currency After-tax Earnings from Joint VenturesGrowth Rates

Webelieve thatthis measureprovides usefulinformation toinvestors becauseit providestransparency tounderlying performanceof

our jointventures byexcluding theeffectthat foreigncurrency exchangerate fluctuationshave onyear-to-yearcomparability given

volatility in foreign currency exchange markets.

After-tax earnings from joint ventures growth rates on a constant-currencybasis are calculated as follows:

Percentage Change in

After-TaxEarnings from Joint

Venturesas Reported

Impact of Foreign

Currency

Exchange

Percentage Change in After-Tax

Earnings from Joint Ventures

on Constant-Currency Basis

Quarter Ended Aug. 28, 2022

(32)

%

(5)

pts

(27)

%

Note: Table maynot foot due to rounding.

Net Sales Growth Rates for Our Canada Operating Unit on Constant-currencyBasis

WebelievethatthismeasureofourCanadaoperatingunitnetsalesprovidesusefulinformationtoinvestorsbecauseitprovides

transparency tothe underlyingperformance forthe Canada operatingunit within ourNorth America Retailsegment byexcluding the

effectthatforeigncurrencyexchangeratefluctuationshaveonyear-to-yearcomparabilitygivenvolatilityinforeigncurrency

exchange markets.

Net sales growth rates for our Canada operating unit on a constant-currencybasis 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 Aug. 28, 2022

4

%

(4)

pts

7

%

Note: Table maynot foot due to rounding.

30

Constant-currency Segment Operating Profit Growth Rates

Webelieve thatthis measureprovides usefulinformation toinvestors becauseit providestransparency tounderlying performanceof

oursegmentsbyexcludingtheeffectthatforeigncurrencyexchangeratefluctuationshaveonyear-to-yearcomparabilitygiven

volatility in foreign currency exchange markets.

Our segments’ operating profit growth rates on a constant-currencybasis are calculated as follows:

Quarter Ended Aug. 28, 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

20

%

Flat

20

%

International

(43)

%

(9)

pts

(34)

%

Pet

7

%

Flat

7

%

North America Foodservice

(25)

%

Flat

(25)

%

Note: Table maynot foot due to rounding.

Adjusted Effective Income TaxRates

Webelievethismeasureprovidesusefulinformationtoinvestorsbecauseitpresentstheadjustedeffectiveincometaxrateona

comparable year-to-year basis.

Adjusted effective income tax rates are calculated as follows:

Quarter Ended

Aug. 28, 2022

Aug. 29, 2021

In Millions

(Except Per Share Data)

Pretax

Earnings

(a)

Income

Taxes

Pretax

Earnings

(a)

Income

Taxes

As reported

$

1,019.6

$

216.1

$

778.0

$

168.9

Divestitures gain, net

(430.9)

(101.9)

-

-

Mark-to-market effects

174.7

40.2

(24.1)

(5.5)

Investment activity, net

26.3

0.5

0.7

0.2

Product recall

21.5

4.9

-

-

Restructuring charges (recoveries)

2.3

0.6

(4.1)

(0.9)

Acquisition integration costs

1.5

0.3

12.4

2.8

Transaction costs

0.2

-

10.6

4.6

Non-income tax recovery

-

-

(20.6)

(7.0)

As adjusted

$

815.2

$

160.8

$

752.8

$

163.0

Effective tax rate:

As reported

21.2%

21.7%

As adjusted

19.7%

21.7%

Sum of adjustment to income taxes

$

(55.3)

$

(5.9)

Average numberof common shares - diluted EPS

606.0

614.8

Impact of income tax adjustments on adjusted diluted EPS

$

0.09

$

0.01

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.

31

Glossary

AOCI

. Accumulated other comprehensive income (loss).

Adjusted diluted EPS.

Diluted EPS adjusted for certain items affecting year-to-yearcomparability.

Adjusted operating profit.

Operating profit adjusted for certain items affecting year-to-yearcomparability.

Adjusted operating profitmargin.

Operating profit adjustedfor certain itemsaffecting year-over-yearcomparability,divided by net

sales.

Constant currency.

Financial resultstranslated toUnited Statesdollars usingconstant foreigncurrency exchangerates basedon the

ratesineffectforthecomparableprior-yearperiod.Topresentthisinformation,currentperiodresultsforentitiesreportingin

currencies otherthan UnitedStates dollarsare translatedinto UnitedStates dollarsat theaverage exchangerates ineffect duringthe

correspondingperiodofthepriorfiscalyear,ratherthantheactualaverageexchangeratesineffectduringthecurrentfiscalyear.

Therefore,theforeigncurrencyimpactisequaltocurrentyearresultsinlocalcurrenciesmultipliedbythechangeintheaverage

foreign currency exchange rate between the current fiscal period and the correspondingperiod of the prior fiscal year.

Core working capital.

Accounts receivable plus inventories less accounts payable.

Derivatives.

Financial instruments suchas futures, swaps,options, and forwardcontracts that weuse to manageour risk arisingfrom

changes in commodity prices, interest rates, foreign exchange rates, and stockprices.

Euribor.

Euro Interbank Offered Rate.

Fair valuehierarchy.

For purposesof fairvalue measurement,we categorizeassets andliabilities intoone ofthree levelsbased on

the assumptions(inputs) usedin valuingthe asset orliability.Level 1 providesthe most reliablemeasure offair value, whileLevel 3

generally requires significant management judgment. The three levelsare 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 inLevel 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’sassumptions 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 AcceptedAccounting Principles(GAAP).

Guidelines, procedures,and practicesthat weare requiredto use inrecording

and reporting accounting information in our financial statements.

Goodwill.

The differencebetween the purchaseprice of acquiredcompanies plus the fairvalue of anynoncontrolling and redeemable

interests and the related fair values of net assets acquired.

Gross margin.

Net sales less cost of sales.

Hedge accounting.

Accounting for qualifyinghedges that allows changes ina hedging instrument’sfair value to offsetcorresponding

changes inthe hedgeditem inthe samereporting period.Hedge accountingis permittedfor certainhedging instrumentsand hedged

itemsonlyifthehedgingrelationshipishighlyeffective,andonlyprospectivelyfromthedateahedgingrelationshipisformally

documented.

Holistic Margin Management(HMM).

Company-wide initiative touse productivity savings, mixmanagement, and price realization

to offset input cost inflation, protect margins,and generate funds to reinvest in sales-generating activities.

Interestbearinginstruments.

Notespayable,long-termdebt,includingcurrentportion,cashandcashequivalents,andcertain

interest bearing investments classified within prepaid expenses and other currentassets and other assets.

LIBOR.

London Interbank Offered Rate.

Mark-to-market.

The act of determining a value forfinancial instruments, commodity contracts, andrelated assets or liabilities based

on the current market price for that item.

32

Netmark-to-marketvaluation ofcertaincommoditypositions.

Realizedandunrealizedgainsandlosses onderivativecontracts

that will be allocated to segment operating profit when the exposure we are hedgingaffects earnings.

Net price realization.

The impact of list and promoted price changes, net of trade and other pricepromotion costs.

Net realizablevalue.

The estimatedselling pricein theordinary courseof business,less reasonablypredictable costsof completion,

disposal, and transportation.

Noncontrolling interests.

Interests of subsidiaries held by third parties.

Notionalamount.

Theamountofapositionoranagreeduponamountinaderivativecontractonwhichthevalueoffinancial

instruments are calculated.

OCI.

Other Comprehensive Income.

Organic net sales growth

. Net sales growth adjustedfor foreign currency translation,acquisitions, divestitures and a53

rd

fiscal week,

when applicable.

Project-related costs.

Costs incurred related to our restructuring initiatives not included in restructuringcharges.

Redeemable interest.

Interest of subsidiaries held by a third partythat can be redeemed outside of ourcontrol and therefore cannot be

classified as a noncontrolling interest in equity.

Reporting unit

. An operating segment or a business one level below an operatingsegment.

StrategicRevenueManagement(SRM).

Acompany-widecapabilityfocusedongeneratingsustainablebenefitsfromnetprice

realizationandmixbyidentifyingandexecutingagainstspecificopportunitiestoapplytoolsincludingpricing,sizing,mix

management, and promotion optimization across each of our businesses.

Supply chaininput costs.

Costs incurredto produceand deliverproduct,including costsforingredientsandconversion, inventory

management, logistics, and warehousing.

Translationadjustments.

The impactof the conversionof our foreignaffiliates’ financialstatements to UnitedStates dollarsfor the

purpose of consolidating our financial statements.

Variableinterestentities (VIEs).

A legalstructurethat isused forbusiness purposesthat either(1) doesnot haveequity investors

that have votingrights and share inall the entity’sprofits and losses or(2) has equityinvestors that do notprovide 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.

33

CAUTIONARY STATEMENTRELEVANTTO FORWARD-LOOKING INFORMATIONFOR THE PURPOSE OF “SAFE

HARBOR” PROVISIONS OF THE PRIVATESECURITIES LITIGATIONREFORM ACT OF 1995

This reportcontains orincorporates byreferenceforward-lookingstatements withinthe meaningof thePrivate SecuritiesLitigation

Reform Actof 1995that arebased onour currentexpectations andassumptions. Wealso maymake writtenor oralforward-looking

statements,includingstatementscontainedinourfilingswiththeSecuritiesandExchangeCommissionandinourreportsto

stockholders.

The words orphrases “will likelyresult,” “are expectedto,” “will continue,”“is anticipated,” “estimate,”“plan,” “project,” orsimilar

expressions identify“forward-looking statements”within themeaning ofthe PrivateSecurities LitigationReform Actof 1995.Such

statements aresubject tocertain risksand uncertaintiesthat couldcause actualresults todiffermaterially fromhistorical resultsand

those currently anticipated or projected. Wewish to caution you not to place undue reliance on any such forward-looking statements.

In connectionwith the “safeharbor” provisionsof the PrivateSecurities LitigationReform Act of1995, we areidentifying important

factorsthat couldaffectour financialperformanceand couldcause ouractual resultsin futureperiodsto differmateriallyfrom any

current opinions or statements.

Our future results couldbe affectedby a variety offactors, such as: the impactof the COVID-19 pandemicon our business, suppliers,

consumers,customers,andemployees;disruptionsorinefficienciesinthesupplychain,includinganyimpactoftheCOVID-19

pandemic;competitivedynamicsintheconsumerfoodsindustryandthemarketsforourproducts,includingnewproduct

introductions,advertisingactivities,pricingactions,andpromotionalactivitiesofourcompetitors;economicconditions,including

changesininflationrates,interestrates,taxrates,ortheavailabilityofcapital;productdevelopmentandinnovation;consumer

acceptanceofnewproductsandproductimprovements;consumerreactiontopricingactionsandchangesinpromotionlevels;

acquisitionsordispositionsofbusinessesorassets;changesincapitalstructure;changesinthelegalandregulatoryenvironment,

includingtaxlegislation,labelingandadvertisingregulations,andlitigation;impairmentsinthecarryingvalueofgoodwill,other

intangible assets,or otherlong-lived assets,or changesin theuseful livesof otherintangible assets;changes inaccounting standards

andthe impactof criticalaccountingestimates; productquality andsafety issues,includingrecalls andproductliability; changesin

consumerdemandforourproducts;effectivenessofadvertising,marketing,andpromotionalprograms;changesinconsumer

behavior,trends,andpreferences,includingweightlosstrends;consumerperceptionofhealth-relatedissues,includingobesity;

consolidationin theretail environment;changes inpurchasing andinventory levelsof significantcustomers; fluctuationsin thecost

andavailabilityofsupplychainresources,includingrawmaterials,packaging,energy,andtransportation;effectivenessof

restructuringandcostsavinginitiatives;volatilityinthemarketvalueofderivativesusedtomanagepriceriskforcertain

commodities; benefit planexpenses due tochanges in planasset values and discountrates used todetermine plan liabilities;failure or

breach ofour informationtechnology systems;foreign economicconditions, includingcurrency ratefluctuations; andpolitical unrest

in foreign markets and economic uncertainty due to terrorism or war.

Youshould alsoconsider the riskfactors that weidentify in Item1A of PartI of ourAnnual Report onForm 10-K forthe fiscal year

ended May 29, 2022 which could also affect our future results.

We undertakeno obligation to publicly revise any forward-lookingstatements to reflect events or circumstancesafter the date of those

statements or to reflect the occurrence of anticipated or unanticipated events.

Item 3.Quantitative and Qualitative Disclosures About Market Risk.

Theestimatedmaximumpotentialvalue-at-riskarisingfromaone-daylossinfairvalueforourinterestrate,foreignexchange,

commodity, and equitymarket-risk-sensitive instruments outstanding as of August 28, 2022,was as follows:

In Millions

One-day Risk

of Loss

Change During

Quarter Ended

Aug. 28, 2022

Analysis of Change

Interest rate instruments

$

45

$

4

Rising interest rates

Foreign currency instruments

24

3

Larger portfolio

Commodity instruments

10

(3)

Decrease in commodity prices

Equity instruments

3

-

Immaterial

For additional information, see Item 7A of Part II of our Annual Report on Form 10-Kfor the fiscal year ended May 29, 2022.

34

Item 4.Controls and Procedures.

We,under thesupervision andwith theparticipation ofour management,including ourChief ExecutiveOfficer andChief Financial

Officer,haveevaluatedtheeffectivenessofthe designandoperationofourdisclosurecontrolsandprocedures(asdefinedinRule

13a-15(e)undertheSecuritiesExchangeActof1934).Basedonourevaluation,ourChiefExecutiveOfficerandChiefFinancial

Officer haveconcluded that,as ofAugust 28,2022, ourdisclosure controlsand procedureswere effectiveto ensurethat information

required tobe disclosedby usin reportsthat we fileor submitunder theSecurities ExchangeAct of1934 is (1)recorded, processed,

summarized,andreportedwithinthetimeperiodsspecifiedinSecuritiesandExchangeCommissionrulesandforms,and(2)

accumulated andcommunicated toour management,including ourChief ExecutiveOfficer andChief FinancialOfficer,in amanner

that allows timely decisions regarding required disclosure.

There were no changes in our internalcontrol over financial reporting (as definedin Rule 13a-15(f) under the Securities ExchangeAct

of 1934)during thequarter endedAugust 28,2022 thatmaterially affected,or arereasonably likelyto materiallyaffect, ourinternal

control over financial reporting.

PARTII.OTHER INFORMATION

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds.

Thefollowingtablesets forthinformationwithrespecttosharesofourcommonstockthat wepurchasedduringthe quarterended

August 28, 2022:

Period

TotalNumber

of Shares

Purchased (a)

Average

Price Paid

Per Share

TotalNumber of Shares

Purchased as Part of a Publicly

Announced Program (b)

Maximum Number of Shares

that may yet be Purchased

Under the Program (b)

May 30, 2022 -

July 3, 2022

2,876,550

$

68.59

2,876,550

18,061,626

July 4, 2022 -

July 31, 2022

2,262,422

74.58

2,262,422

97,737,578

August 1, 2022 -

August 28, 2022

1,744,640

77.22

1,744,640

95,992,938

Total

6,883,612

$

72.75

6,883,612

95,992,938

(a)The total numberof shares purchasedincludes shares ofcommon stock withheldfor the paymentof withholding taxesupon the distributionof

deferred option units.

(b)On June27, 2022,our Boardof Directorsapproved anew authorizationfor therepurchase ofup to100,000,000 sharesof ourcommon stock

and terminatedthe priorauthorization. Purchasescan bemade inthe openmarket orin privatelynegotiated transactions,including theuse of

call optionsand otherderivative instruments,Rule 10b5-1trading plans,and acceleratedrepurchase programs.The Boarddid notspecify an

expiration date for the authorization.

35

PARTII. OTHER INFORMATION

Item 6.

Exhibits.

10.1+

Addendum No. 11 to the Protocol of Cereal Partners Worldwide, effective July 17, 2012, among the Company,

Nestle S.A., and CPW S.A.

31.1

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2

Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101

FinancialStatementsfromthe QuarterlyReporton Form10-Qof theCompanyforthe quarterendedAugust28,

2022,formattedinInlineExtensibleBusinessReportingLanguage:(i)ConsolidatedStatementsofEarnings;(ii)

ConsolidatedStatementsofComprehensiveIncome,(iii)ConsolidatedBalanceSheets;(iv)Consolidated

Statements of TotalEquity and RedeemableInterest; (v) ConsolidatedStatements of CashFlows; and (vi)Notes to

Consolidated Financial Statements.

104

Cover Page, formatted in Inline Extensible Business Reporting Languageand contained in Exhibit 101.

+Portions of this exhibit have been excluded in accordance with SEC regulations.

36

SIGNATURES

PursuanttotherequirementsoftheSecuritiesExchangeActof1934,theregistranthasdulycausedthisreporttobesignedonits

behalf by the undersigned thereunto duly authorized.

GENERAL MILLS, INC.

(Registrant)

Date: September 21, 2022

/s/ Mark A. Pallot

Mark A. Pallot

Vice President, Chief AccountingOfficer

(Principal Accounting Officer and Duly AuthorizedOfficer)