There were no realized gains or losses from sales of available-for-sale marketable securities. Gains and losses are determined by specific identification. Classification of marketable securities as current or noncurrent is dependent upon our intended holding period, and/or the security’s maturity date. The aggregate unrealized gains and losses on available-for-sale securities, net of tax effects, are classified in AOCI within stockholders’ equity.

Scheduled maturities of our marketable securities are as follows:

As of May 29, 2016, cash and cash equivalents totaling $7.5 million were pledged as collateral for derivative contracts. As of May 29, 2016, $9.1 million of certain accounts receivable were pledged as collateral against a foreign uncommitted line of credit.

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

COMMODITY PRICE RISK

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

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

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

Unallocated corporate items for fiscal 2016, 2015 and 2014 included:

INTEREST RATE RISK

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

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

Fixed Interest Rate Exposures — Fixed-to-floating interest rate swaps are accounted for as fair value hedges with effectiveness assessed based on changes in the fair value of the underlying debt and derivatives, using incremental borrowing rates currently available on loans with similar terms and maturities. Ineffective gains and losses on these derivatives and the underlying hedged items are recorded as net interest. The amount of hedge ineffectiveness was less than $1 million in fiscal 2016, an $1.6 million gain in fiscal 2015, and less than $1 million in fiscal 2014.

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

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

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

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

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

	May 29, 2016
			Assets						Liabilities
				Gross Amounts Not Offset in the Balance Sheet (e)						Gross Amounts Not Offset in the Balance Sheet (e)
In Millions	Gross Amounts of Recognized Assets	Gross Liabilities Offset in the Balance Sheet (a)	Net Amounts of Assets (b)	Financial Instruments	Cash Collateral Received	Net Amount (c)	Gross Amounts of Recognized Liabilities	Gross Assets Offset in the Balance Sheet (a)	Net Amounts of Liabilities (b)	Financial Instruments	Cash Collateral Pledged	Net Amount (d)
Commodity contracts	$4.4	$-	$4.4	$(3.9)	$-	$0.5	$(22.2)	$-	$(22.2)	$3.9	$7.5	$(10.8)
Interest rate contracts	8.5	-	8.5	-	-	8.5	(3.0)	-	(3.0)	-	-	(3.0)
Foreign exchange contracts	25.4	-	25.4	(8.7)	-	16.7	(13.7)	-	(13.7)	8.7	-	(5.0)
Equity contracts	2.4	-	2.4	-	-	2.4	-	-	-	-	-	-
Total	$40.7	$-	$40.7	$(12.6)	$-	$28.1	$(38.9)	$-	$(38.9)	$12.6	$7.5	$(18.8)

(a) Includes related collateral offset in our Consolidated Balance Sheets.

(b) Net fair value as recorded in our Consolidated Balance Sheets.

(d) Fair value of liabilities that could be reported net in our Consolidated Balance Sheets.

(e) Fair value of assets and liabilities reported on a gross basis in our Consolidated Balance Sheets.

	May 31, 2015
			Assets						Liabilities
				Gross Amounts Not Offset in the Balance Sheet (e)						Gross Amounts Not Offset in the Balance Sheet (e)
In Millions	Gross Amounts of Recognized Assets	Gross Liabilities Offset in the Balance Sheet (a)	Net Amounts of Assets (b)	Financial Instruments	Cash Collateral Received	Net Amount (c)	Gross Amounts of Recognized Liabilities	Gross Assets Offset in the Balance Sheet (a)	Net Amounts of Liabilities (b)	Financial Instruments	Cash Collateral Pledged	Net Amount (d)
Commodity contracts	$10.1	$-	$10.1	$(1.3)	$-	$8.8	$(59.4)	$-	$(59.4)	$1.3	$40.1	$(18.0)
Interest rate contracts	4.0	-	4.0	-	-	4.0	-	-	-	-	-	-
Foreign exchange contracts	25.9	-	25.9	(12.5)	-	13.4	(65.3)	-	(65.3)	12.5	-	(52.8)
Total	$40.0	$-	$40.0	$(13.8)	$-	$26.2	$(124.7)	$-	$(124.7)	$13.8	$40.1	$(70.8)

(a) Includes related collateral offset in our Consolidated Balance Sheets.

(b) Net fair value as recorded in our Consolidated Balance Sheets.

(d) Fair value of liabilities that could be reported net in our Consolidated Balance Sheets.

(e) Fair value of assets and liabilities reported on a gross basis in our Consolidated Balance Sheets.

FOREIGN EXCHANGE RISK

Foreign currency fluctuations affect our net investments in foreign subsidiaries and foreign currency cash flows related to third party purchases, intercompany loans, product shipments, and foreign-denominated debt. We are also exposed to the translation of foreign currency earnings to the U.S. dollar. Our principal exposures are to the Australian dollar, Brazilian real, British pound sterling, Canadian dollar, Chinese renminbi, euro, Japanese yen, Mexican peso, and Swiss franc. We primarily use foreign currency forward contracts to selectively hedge our foreign currency cash flow exposures. We also generally swap our foreign-denominated commercial paper borrowings and nonfunctional currency intercompany loans back to U.S. dollars or the functional currency of the entity with foreign exchange exposure. The gains or losses on these derivatives offset the foreign currency revaluation gains or losses recorded in earnings on the associated borrowings. We generally do not hedge more than 18 months in advance.

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

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

EQUITY INSTRUMENTS

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

	May 29, 2016								May 29, 2016
	Fair Values of Assets								Fair Values of Liabilities
In Millions		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Derivatives designated as hedging instruments:
Interest rate contracts (a) (b)	$	-	$	7.7	$	-	$	7.7	$	-	$	(3.0)	$	-	$	(3.0)
Foreign exchange contracts (c) (d)		-		12.2		-		12.2		-		(12.2)		-		(12.2)
Total		-		19.9		-		19.9		-		(15.2)		-		(15.2)

Derivatives not designated as hedging instruments:
Foreign exchange contracts (c) (d)		-		13.2		-		13.2		-		(1.5)		-		(1.5)
Commodity contracts (c) (e)		2.6		1.7		-		4.3		(0.6)		(21.6)		-		(22.2)
Grain contracts (c) (e)		-		1.8		-		1.8		-		(5.5)		-		(5.5)
Total		2.6		16.7		-		19.3		(0.6)		(28.6)		-		(29.2)

Other assets and liabilities reported at fair value:
Marketable investments (a) (f)		8.4		165.8		-		174.2		-		-		-		-
Long-lived assets (g)		-		26.0		-		26.0		-		-		-		-
Total		8.4		191.8		-		200.2		-		-		-		-
Total assets, liabilities, and derivative positions recorded at fair value	$	11.0	$	228.4	$	-	$	239.4	$	(0.6)	$	(43.8)	$	-	$	(44.4)

(a) These contracts and investments are recorded as prepaid expenses and other current assets, other assets, other current liabilities or other liabilities, as appropriate, based on whether in a gain or loss position. Certain marketable investments are recorded as cash and cash equivalents.

(b) Based on LIBOR and swap rates.

(c) These contracts are recorded as prepaid expenses and other current assets or as other current liabilities, as appropriate, based on whether in a gain or loss position.

(d) Based on observable market transactions of spot currency rates and forward currency prices.

(e) Based on prices of futures exchanges and recently reported transactions in the marketplace.

(f) Based on prices of common stock and bond matrix pricing.

(g) We recorded $11.4 million in non-cash impairment charges in fiscal 2016 to write down certain long-lived assets to their fair value. Fair value was based on recently reported transactions for similar assets in the marketplace. These assets had a carrying value of $28.2 million and were associated with the restructuring actions described in Note 4.

	May 31, 2015								May 31, 2015
	Fair Values of Assets								Fair Values of Liabilities
In Millions		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Derivatives designated as hedging instruments:
Interest rate contracts (a) (b)	$	-	$	4.0	$	-	$	4.0	$	-	$	-	$	-	$	-
Foreign exchange contracts (c) (d)		-		25.5		-		25.5		-		(23.3)		-		(23.3)
Total		-		29.5		-		29.5		-		(23.3)		-		(23.3)

Derivatives not designated as hedging instruments:
Foreign exchange contracts (c) (d)		-		0.4		-		0.4		-		(42.0)		-		(42.0)
Commodity contracts (c) (e)		7.2		2.9		-		10.1		-		(59.4)		-		(59.4)
Grain contracts (c) (e)		-		3.3		-		3.3		-		(7.8)		-		(7.8)
Total		7.2		6.6		-		13.8		-		(109.2)		-		(109.2)

Other assets and liabilities reported at fair value:
Marketable investments (a) (f)		8.3		2.6		-		10.9		-		-		-		-
Long-lived assets (g)		-		37.8		-		37.8		-		-		-		-
Indefinite-lived intangible assets (h)		-		-		154.3		154.3		-		-		-		-
Total		8.3		40.4		154.3		203.0		-		-		-		-
Total assets, liabilities, and derivative positions recorded at fair value	$	15.5	$	76.5	$	154.3	$	246.3	$	-	$	(132.5)	$	-	$	(132.5)

(b) Based on LIBOR and swap rates.

(c) These contracts are recorded as prepaid expenses and other current assets or as other current liabilities, as appropriate, based on whether in a gain or loss position.

(d) Based on observable market transactions of spot currency rates and forward currency prices.

(e) Based on prices of futures exchanges and recently reported transactions in the marketplace.

(f) Based on prices of common stock and bond matrix pricing.

(g) We recorded $30.3 million in non-cash impairment charges in fiscal 2015 to write down certain long-lived assets to their fair value. Fair value was based on recently reported transactions for similar assets in the marketplace. These assets had a carrying value of $68.1 million and were associated with the restructuring actions described in Note 4.

(h) We recorded a $260.0 million non-cash impairment charge in fiscal 2015 to write down our Green Giant brand asset to its fair value of $154.3 million. This asset had a carrying value of $414.3 million. See Note 6 for additional information.

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

		Interest Rate Contracts				Foreign Exchange Contracts				Equity Contracts				Commodity Contracts				Total
		Fiscal Year				Fiscal Year				Fiscal Year				Fiscal Year				Fiscal Year
In Millions		2016		2015		2016		2015		2016		2015		2016		2015		2016		2015
Derivatives in Cash Flow Hedging Relationships:
Amount of gain (loss) recognized in other comprehensive income (OCI) (a)	$	(2.6)	$	(5.9)	$	21.2	$	13.3	$	-	$	-	$	-	$	-	$	18.6	$	7.4
Amount of net gain (loss) reclassified from AOCI into earnings (a) (b)		(10.6)		(10.6)		22.1		5.0		-		-		-		-		11.5		(5.6)
Amount of net gain (loss) recognized in earnings (c)		(0.1)		(0.6)		(0.7)		0.1		-		-		-		-		(0.8)		(0.5)

Derivatives in Fair Value Hedging Relationships:
Amount of net gain recognized in earnings (d)		0.1		1.6		-		-		-		-		-		-		0.1		1.6

Derivatives in Net Investment Hedging Relationships:
Amount of loss recognized in OCI (a)		-		-		(0.2)		(6.9)		-		-		-		-		(0.2)		(6.9)

Derivatives Not Designated as Hedging Instruments:
Amount of net gain (loss) recognized in earnings (d)		-		-		1.1		(54.3)		(4.5)		9.6		(56.1)		(163.7)		(59.5)		(208.4)

(a) Effective portion.

(b) Gain (loss) reclassified from AOCI into earnings is reported in interest, net for interest rate swaps and in cost of sales and SG&A expenses for foreign exchange contracts.

(c) Gain (loss) recognized in earnings is related to the ineffective portion of the hedging relationship, including SG&A expenses for foreign exchange contracts and interest, net for interest rate contracts. No amounts were reported as a result of being excluded from the assessment of hedge effectiveness.

(d) Gain (loss) recognized in earnings is reported in interest, net for interest rate contracts, in cost of sales for commodity contracts, and in SG&A expenses for equity contracts and foreign exchange contracts.

CREDIT-RISK-RELATED CONTINGENT FEATURES

Certain of our derivative instruments contain provisions that require us to maintain an investment grade credit rating on our debt from each of the major credit rating agencies. If our debt were to fall below investment grade, the counterparties to the derivative instruments could request full collateralization on derivative instruments in net liability positions. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a liability position on May 29, 2016, was $21.9 million. We have posted $7.5 million of collateral under these contracts. If the credit-risk-related contingent features underlying these agreements had been triggered on May 29, 2016, we would have been required to post $14.4 million of collateral to counterparties.

(a) Includes Wal-Mart Stores, Inc. and its affiliates.

No customer other than Wal-Mart accounted for 10 percent or more of our consolidated net sales.

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

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

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