-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CpcwgTSkVyhKvIADsxO7LTeB1NsYvQCvCBpzVUHVVlJuL3qzUeI/QOAHLL7oDUJv 0YOqAHjR3VRjk3Vh8vA2gA== 0000897101-03-000206.txt : 20030319 0000897101-03-000206.hdr.sgml : 20030319 20030319081941 ACCESSION NUMBER: 0000897101-03-000206 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030319 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030319 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL MILLS INC CENTRAL INDEX KEY: 0000040704 STANDARD INDUSTRIAL CLASSIFICATION: GRAIN MILL PRODUCTS [2040] IRS NUMBER: 410274440 STATE OF INCORPORATION: DE FISCAL YEAR END: 0525 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-01185 FILM NUMBER: 03608439 BUSINESS ADDRESS: STREET 1: NUMBER ONE GENERAL MILLS BLVD CITY: MINNEAPOLIS STATE: MN ZIP: 55426 BUSINESS PHONE: 7637642311 MAIL ADDRESS: STREET 1: P O BOX 1113 CITY: MINNEAPOLIS STATE: MN ZIP: 55440 8-K 1 gm031345_8k.txt GENERAL MILLS FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): March 19, 2003 GENERAL MILLS, INC. ------------------- (Exact Name of Registrant as Specified in Charter) Delaware 1-1185 41-0274440 -------- ------ ---------- (State of Incorporation) (Commission (IRS Employer File Number) Identification No.) Number One General Mills Boulevard Minneapolis, Minnesota 55426 (Mail: P.O. Box 1113) (Mail: 55440) ---------------------- -------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (763) 764-7600 ITEM 5. OTHER EVENTS. Attached hereto as Exhibit 99.1 and incorporated herein by reference is a copy of a press release of General Mills, Inc. dated March 19, 2003 reporting financial results for its third quarter ended February 23, 2003. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (c) Exhibits. The following exhibits are filed as part of this report: -------- 99.1 Press release of General Mills, Inc. dated March 19, 2003 SIGNATURE Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: March 19, 2003 GENERAL MILLS, INC. By: /s/ Siri S. Marshall --------------------------------------- Name: Siri S. Marshall Title: Senior Vice President, General Counsel EXHIBIT INDEX Exhibit Number Description - ------ ----------- 99.1 Press release of General Mills, Inc. dated March 19, 2003. EX-99.1 3 gm031345_ex99-1.txt PRESS RELEASE FOR IMMEDIATE RELEASE March 19, 2003 CONTACTS: (Media) Marybeth Thorsgaard (763) 764-6364 -------- (Analysts) Kris Wenker (763) 764-2607 GENERAL MILLS REPORTS FISCAL 2003 THIRD QUARTER RESULTS PERIOD INCLUDES FULL 13 WEEKS OF PILLSBURY RESULTS IN BOTH YEARS NET SALES GREW 11 PERCENT TO $2.65 BILLION NET EARNINGS INCREASED 193 PERCENT TO $240 MILLION EARNINGS BEFORE UNUSUAL ITEMS TOTALED 67 CENTS PER SHARE COMPANY RAISES ANNUAL OUTLOOK MINNEAPOLIS, MN - General Mills, Inc. (NYSE: GIS) today reported record results for the third quarter of fiscal 2003. Third quarter comparisons include 13 full weeks of Pillsbury results in both fiscal 2003 and 2002. Net sales for the quarter ended Feb. 23, 2003, grew 11 percent to $2.65 billion. Worldwide unit volume increased 5 percent. Favorable sales mix, pricing and lower promotional spending also contributed to the increase in net revenues. Earnings results for both 2003 and 2002 include unusual items expense, reflecting transaction and integration costs associated with the Pillsbury -more- acquisition completed Oct. 31, 2001. (PLEASE SEE THE SECTION BELOW TITLED UNUSUAL ITEMS.) Including unusual items expense, net earnings after tax grew 193 percent to $240 million. Earnings per diluted share (EPS) totaled 63 cents, up from 22 cents earned in last year's third quarter. Excluding unusual items, third-quarter earnings after tax totaled $255 million in 2003 compared to $107 million in 2002. Diluted earnings per share excluding unusual items totaled 67 cents, more than double the 28 cents earned in last year's third quarter. General Mills Chairman and Chief Executive Officer Steve Sanger said the quarter was further evidence of the strength of combining Pillsbury and General Mills. "After a strong first half, our growth accelerated in the third quarter with unit volume up 5 percent worldwide and up 7 percent for our U.S. retail businesses. Net sales grew even faster than volumes, and the result was stronger than expected earnings for the period." Year-to-date Results - -------------------- General Mills' nine-month results include a full 39 weeks of Pillsbury operations in fiscal 2003 compared to 16 weeks in fiscal 2002. Through nine months, net sales increased 42 percent to $7.96 billion. Net earnings grew 73 percent to $692 million, and diluted earnings per share totaled $1.84 per share, up 51 percent from $1.22 per share earned in the same period last year. Excluding unusual items expense in both years, nine-month earnings totaled $756 million in 2003 and $488 million in 2002. Diluted earnings per share before unusual items totaled $2.00 for the current year-to-date, up 35 percent from $1.48 earned last year. -more- Unusual Items - ------------- Third quarter results included unusual items expense associated with Pillsbury transaction and integration costs of $22 million pretax in 2003 and $39 million pretax in 2002. Through nine months, unusual items expense totaled $98 million pretax in 2003 compared to $133 million pretax in 2002. The effects of these unusual expenses on after-tax earnings and earnings per share are summarized in the table below. The company currently expects to record additional unusual items expense related to the Pillsbury acquisition of approximately $15 to $20 million pretax in the fourth quarter of fiscal 2003. EARNINGS SUMMARY (in millions, except per share data) Third Quarter 9 Months -------------- -------------- FY 03 FY 02 FY 03 FY 02 EARNINGS AFTER TAX (EAT) Before unusual items $ 255 $ 107 $ 756 $ 488 Unusual items (15) (25) (64) (84) SFAS No. 133 Adoption -- -- -- (3) ----- ----- ----- ----- Net Earnings $ 240 $ 82 $ 692 $ 401 AVG. DILUTED SHARES OUTSTANDING 379 378 377 330 EARNINGS PER SHARE (EPS) Before unusual items $ .67 $ .28 $2.00 $1.48 Unusual items (.04) (.06) (.17) (.25) SFAS No. 133 Adoption -- -- -- (.01) ----- ----- ----- ----- EPS $ .63 $ .22 $1.84 $1.22 Note: Numbers may not add due to rounding. -more- U.S. Retail Segment Results - --------------------------- Third-quarter net sales for General Mills' domestic retail operations grew 14 percent to $1.91 billion, and operating profit nearly doubled to $449 million. Unit volume was up 7 percent from prior-year levels, which had declined 3 percent as companywide focus on integrating the Pillsbury businesses disrupted last year's operating momentum. Big G cereals led the third-quarter growth with unit volume up 16 percent versus a 6 percent decline last year. The strong increase reflected good performance by established brands including Honey Nut Cheerios, Cheerios, Cinnamon Toast Crunch and Total, coupled with introductory shipments for new Berry Burst Cheerios. Volume for Yoplait yogurt also grew 16 percent, matching 16 percent growth in the same period last year with strong performance by established lines and continued good results for Yoplait Whips! The Yoplait Nouriche yogurt beverage line is currently expanding to national distribution. Baking products volume for the third quarter grew 9 percent. Meals volume grew 2 percent led by dinner mixes and Progresso soup. Snacks volume grew 7 percent led by Nature Valley granola bars and PopSecret microwave popcorn. Pillsbury USA volume was down 1 percent for the quarter, as good gains by frozen baked goods and Totino's frozen snacks were offset by lower refrigerated dough volume. Through nine months, net sales for the U.S. Retail segment grew 30 percent to $5.67 billion and operating profits including unusual items increased 58 percent to $1.30 billion. -more- Bakeries and Foodservice Segment Results - ---------------------------------------- Third quarter net sales for the Bakeries and Foodservice segment grew 5 percent to $419 million, as pricing offset a 2 percent decline in unit volume. Shipments to foodservice distributors, restaurants, and retail and wholesale bakeries were down in the quarter, reflecting weak foodservice industry trends, and these declines more than offset double-digit growth in convenience store volume. Operating profit of $28 million was lower in the quarter, due to the volume decline and higher supply chain costs caused by the foodservice plant restructuring that is currently underway. Through the first nine months, Bakeries and Foodservice net sales increased 69 percent to $1.34 billion and operating profits including unusual items declined slightly to $98 million. International Segment Results - ----------------------------- Net sales for the company's consolidated international businesses grew 5 percent in the third quarter to $316 million, and operating profits increased sharply to $22 million from $12 million a year earlier. Unit volume was up in every geographic region except Latin America, where macroeconomic conditions remain difficult. Through nine months, net sales more than doubled to $955 million, and operating profits totaled $65 million. -more- Joint Venture Summary - --------------------- Third-quarter net earnings from joint ventures totaled $13 million compared to $8 million last year. Cereal Partners Worldwide (CPW), the company's joint venture with Nestle, posted 6 percent unit volume growth in the period. Unit volume for the Snack Ventures Europe (SVE) joint venture with PepsiCo grew 10 percent. Combined earnings after tax for CPW and SVE totaled $10 million in the quarter. After tax earnings from the Haagen-Dazs joint ventures in Asia grew slightly in the quarter and more than offset development spending by the 8th Continent soy foods joint venture. Distribution of 8th Continent soymilk is expected to expand to the remaining 45 percent of the U.S. in June 2003. Through the first nine months of fiscal 2003, net earnings from joint ventures totaled $44 million compared to $20 million for the same period last year. Corporate Items - --------------- Interest expense totaled $135 million in the third quarter, down from $146 million a year earlier due to favorable rates and lower debt levels. Unallocated corporate expense totaled $14 million pretax, compared to $26 million in last year's third quarter. The effective tax rate for the quarter was 35 percent, slightly higher than last year's third quarter rate. Average diluted shares outstanding for the quarter totaled 379 million compared to 378 million a year earlier. -more- Outlook - ------- "We're encouraged by the accelerating sales growth and margin improvement we've achieved through the first nine months of this year," Sanger noted. "Our strong levels of product news and marketing innovation are driving growth in our retail sales and market shares. As a result, we now expect full-year earnings to be a bit stronger than our earlier guidance. We currently anticipate 2003 earnings will total between $2.62 and $2.64 per share before unusual items. That's up slightly from our previous estimate of $2.60 to $2.62 for this year, and it's up more than 50 percent from the $1.70 per share we earned before unusual items in fiscal 2002." Including the estimated range of unusual items expense discussed above in this press release, net earnings per share for fiscal 2003 are estimated at $2.42 to $2.44. General Mills fiscal 2002 net earnings totaled $1.34 per share. General Mills also said it continues to expect fiscal 2004 net sales to grow at least 6 percent, fueled by strong planned levels of product innovation and the benefit of a 53rd week in the fiscal period. The company reiterated comfort with the First Call consensus EPS estimate for 2004 of approximately $3.00 per share. -more- General Mills will hold a briefing for investors today, March 19, 2003, beginning at 10:00 AM EST, 9:00 AM CST. You may access the webcast for this briefing from General Mills' internet home page at www.generalmills.com. This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 that are based on management's current expectations and assumptions. These forward-looking statements, including the statements under the caption "Outlook" and statements made by Mr. Sanger, are subject to certain risks and uncertainties that could cause actual results to differ materially from the potential results discussed in the forward-looking statements. In particular, our predictions about future volume and earnings could be affected by difficulties resulting from the Pillsbury acquisition, such as integration problems; failure to achieve synergies; unanticipated liabilities; inexperience in new business lines; and changes in the competitive environment. Our future results also could be affected by a variety of additional factors such as: competitive dynamics in the U.S. ready-to-eat cereal market, including pricing and promotional spending levels by competitors; the impact of competitive products and pricing; product development; actions of competitors other than as described above; acquisitions or disposals of businesses or assets; changes in capital structure; changes in laws and regulations, including changes in accounting standards; customer demand; effectiveness of advertising and marketing spending or programs; consumer perception of health-related issues; economic conditions, including changes in inflation rates or interest rates; fluctuation in the cost and availability of supply chain resources, foreign economic conditions, including currency rate fluctuations; political unrest in foreign markets and economic uncertainty due to terrorism or war. The company undertakes no obligations to publicly revise any forward-looking statements to reflect future events or circumstances. #### GENERAL MILLS, INC. CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited) (In Millions, Except per Share Data)
13 Weeks Ended 39 Weeks Ended ----------------- ----------------- Feb. 23 Feb. 24 Feb. 23 Feb. 24 2003 2002 2003 2002 ------- ------- ------- ------- Net Sales $ 2,645 $ 2,379 $ 7,960 $ 5,625 Costs & Expenses: Cost of sales 1,595 1,481 4,698 3,236 Selling, general and administrative 543 601 1,750 1,394 Interest, net 135 146 417 264 Unusual items 22 39 98 133 ------- ------- ------- ------- Total Costs and Expenses 2,295 2,267 6,963 5,027 ------- ------- ------- ------- Earnings before Taxes and Earnings from Joint Ventures 350 112 997 598 Income Taxes 123 38 349 214 Earnings from Joint Ventures 13 8 44 20 ------- ------- ------- ------- Earnings before cumulative effect of change in accounting principle 240 82 692 404 Cumulative effect of change in accounting principle -- -- -- (3) ------- ------- ------- ------- Net Earnings $ 240 $ 82 $ 692 $ 401 ======= ======= ======= ======= Earnings per Share - Basic: Earnings before cumulative effect of change in accounting principle $ .65 $ .23 $ 1.88 $ 1.27 Cumulative effect of change in accounting principle -- -- -- (.01) ------- ------- ------- ------- Earnings per Share - Basic $ .65 $ .23 $ 1.88 $ 1.26 ======= ======= ======= ======= Average Number of Shares - Basic 369 366 368 319 ======= ======= ======= ======= Earnings per Share - Diluted: Earnings before cumulative effect of change in accounting principle $ .63 $ .22 $ 1.84 $ 1.23 Cumulative effect of change in accounting principle -- -- -- (.01) ------- ------- ------- ------- Earnings per Share - Diluted $ .63 $ .22 $ 1.84 $ 1.22 ======= ======= ======= ======= Average Number of Shares - Assuming Dilution 379 378 377 330 ======= ======= ======= =======
See accompanying notes. GENERAL MILLS, INC. OPERATING SEGMENTS (Unaudited) (In Millions)
13 Weeks Ended 39 Weeks Ended ------------------ ------------------ Feb. 23 Feb. 24 Feb. 23 Feb. 24 2003 2002 2003 2002 ------- ------- ------- ------- Net Sales: U.S. Retail $ 1,910 $ 1,679 $ 5,665 $ 4,371 Bakeries and Foodservice 419 398 1,340 793 International 316 302 955 461 ------- ------- ------- ------- Total $ 2,645 $ 2,379 $ 7,960 $ 5,625 ======= ======= ======= ======= Operating Profit: U.S. Retail $ 449 $ 234 $ 1,299 $ 823 Bakeries and Foodservice 28 38 98 102 International 22 12 65 21 Unallocated Corporate Items (14) (26) (48) (84) ------- ------- ------- ------- Total $ 485 $ 258 $ 1,414 $ 862 ======= ======= ======= =======
GENERAL MILLS, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (In Millions)
(Unaudited) (Unaudited) ---------- ----------- Feb. 23, Feb. 24, May 26, 2003 2002 2002 -------- -------- -------- ASSETS Current Assets: Cash and cash equivalents $ 1,202 $ 1,323 $ 975 Receivables 1,111 1,141 1,010 Inventories 1,086 1,043 1,055 Prepaid expenses and other 161 195 156 Deferred income taxes 280 62 241 -------- -------- -------- Total Current Assets 3,840 3,764 3,437 -------- -------- -------- Land, Buildings and Equipment 4,749 4,511 4,618 Less accumulated depreciation (1,940) (1,830) (1,854) -------- -------- -------- Net Land, Buildings and Equipment 2,809 2,681 2,764 Goodwill 6,372 8,572 8,473 Other Intangible Assets 3,612 86 90 Other Assets 1,929 1,735 1,776 -------- -------- -------- Total Assets $ 18,562 $ 16,838 $ 16,540 ======== ======== ======== LIABILITIES AND EQUITY Current Liabilities: Accounts payable $ 1,286 $ 1,202 $ 1,217 Current portion of debt 120 611 248 Notes payable 1,746 3,648 3,600 Other current liabilities 804 781 682 -------- -------- -------- Total Current Liabilities 3,956 6,242 5,747 Long-term Debt 7,473 5,591 5,591 Deferred Income Taxes 1,717 382 407 Other Liabilities 1,104 1,076 1,066 -------- -------- -------- Total Liabilities 14,250 13,291 12,811 -------- -------- -------- Minority Interest 300 5 153 Stockholders' Equity: Common stock 5,676 5,727 5,733 Retained earnings 2,956 2,612 2,568 Less common stock in treasury (4,232) (4,322) (4,292) Unearned compensation (49) (66) (57) Accumulated other comprehensive income (339) (409) (376) -------- -------- -------- Total Stockholders' Equity 4,012 3,542 3,576 -------- -------- -------- Total Liabilities and Equity $ 18,562 $ 16,838 $ 16,540 ======== ======== ========
GENERAL MILLS, INC. NOTES TO CONSOLIDATED FINANCIAL INFORMATION (1) Last year's nine-month results include only sixteen weeks of the Pillsbury business, which was acquired October 31, 2001. (2) In the third quarter of fiscal 2003, we recorded unusual items of $22 million pretax expense, $15 million after tax, representing expenses primarily related to relocating production from former Pillsbury facilities being closed and other Pillsbury transaction and integration costs. In last year's third quarter, we recorded unusual items totaling $39 million pretax expense, $25 million after tax, comprised of a $30 million pretax charge for a special contribution to the General Mills Foundation to increase its post-acquisition net assets to an appropriate level based on the guidelines of the Foundation; and $9 million pretax of Pillsbury transaction/integration costs. For the nine months ended February 23, 2003, unusual items totaled $98 million pretax expense, $64 million after tax, representing $41 million pretax charges associated with the closure of our St. Charles, Illinois plant, and $60 million of expenses primarily related to relocating production from former Pillsbury facilities being closed and other Pillsbury transaction and integration costs. These costs were partially offset by additional insurance settlements of $3 million pretax covering the 1994 oats handling incident. For the nine months last year, unusual items totaled $133 million pretax expense, $84 million after tax, comprised of $39 million pretax of Pillsbury transaction/integration costs; $87 million pretax of cereal reconfiguration charges; $30 million pretax charge for a General Mills Foundation funding adjustment; $4 million pretax of Squeezit beverage exit charges; and $3 million, net of insurance recovery, associated with a flash flood at our Cincinnati, Ohio, cereal plant; partially offset by additional pretax settlements of $30 million covering the 1994 oats handling incident. (3) Effective with the first quarter fiscal 2002, we adopted SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." The cumulative effect of adopting this accounting change was a $3 million charge, as reflected on the consolidated statements of earnings. (4) In the fourth quarter of fiscal 2002, we adopted Emerging Issues Task Force (EITF) Issue 01-09, which resulted in the reclassification of certain sales incentive and trade promotion expenses from selling, general and administrative expenses to a reduction of net sales. The impact was a reduction of net sales, and a corresponding reduction in selling, general and administrative expense, of $726 million in the third quarter of fiscal 2002, and $1,593 million for the first nine months of fiscal 2002. (5) The Pillsbury acquisition valuation and purchase price allocation was completed in the second quarter of fiscal 2003. Intangible assets included in the final allocation were acquired brands of $3.5 billion and goodwill of $5.6 billion. Deferred income taxes of $1.3 billion, associated with the brand intangibles, were also recorded. -----END PRIVACY-ENHANCED MESSAGE-----