UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-Q

(Mark One) 

☑

 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED

NOVEMBER 27, 2022

☐

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

FOR THE TRANSITION PERIOD FROM TO 

Commission file number:

001-01185

________________

GENERAL MILLS, INC.

(Exact name of registrant as specified in its charter)

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

________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities

Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),

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

Yes

☑

 No

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted

pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to

submit such files).

Yes

☑

 No

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting

company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting

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

Large accelerated filer

☑

Accelerated filer

☐

 Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for

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

☐

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

Yes

☐

 No

☑

Number of shares of Common Stock outstanding as of December 13, 2022:

589,610,717

 (excluding

165,002,611

 shares held in the

treasury).

3

General Mills, Inc.

Table of Contents

Page

4

5

6

7

9

21

40

41

41

42

43

4

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Consolidated Statements of Earnings

GENERAL MILLS, INC. AND SUBSIDIARIES

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

Quarter Ended

Six-Month Period Ended

Nov. 27, 2022

Nov. 28, 2021

Nov. 27, 2022

Nov. 28, 2021

Net sales

$

5,220.7

$

5,024.0

$

9,938.3

$

9,563.9

Cost of sales

3,515.6

3,392.8

6,785.5

6,335.3

Selling, general, and administrative expenses

894.2

828.8

1,685.6

1,586.2

Divestitures gain, net

-

-

(430.9)

-

Restructuring, impairment, and other exit

 costs (recoveries)

11.1

2.3

12.7

(2.0)

Operating profit

799.8

800.1

1,885.4

1,644.4

Benefit plan non-service income

(21.7)

(27.7)

(43.4)

(57.3)

Interest, net

91.5

92.7

179.2

188.6

Earnings before income taxes and after-tax earnings from 

 joint ventures

730.0

735.1

1,749.6

1,513.1

Income taxes

147.1

159.7

363.2

328.6

After-tax earnings from joint ventures

25.4

33.0

45.2

62.1

Net earnings, including earnings attributable to redeemable 

 and noncontrolling interests

608.3

608.4

1,431.6

1,246.6

Net earnings attributable to redeemable and 

 noncontrolling interests

2.4

11.2

5.7

22.4

Net earnings attributable to General Mills

$

605.9

$

597.2

$

1,425.9

$

1,224.2

Earnings per share – basic

$

1.01

$

0.98

$

2.38

$

2.01

Earnings per share – diluted

$

1.01

$

0.97

$

2.36

$

1.99

See accompanying notes to consolidated financial statements.

5

Consolidated Statements of Comprehensive Income

GENERAL MILLS, INC. AND SUBSIDIARIES

(Unaudited) (In Millions)

Quarter Ended

Six-Month Period Ended

Nov. 27, 2022

Nov. 28, 2021

Nov. 27, 2022

Nov. 28, 2021

Net earnings, including earnings attributable to 

 redeemable and noncontrolling interests

$

608.3

$

608.4

$

1,431.6

$

1,246.6

Other comprehensive loss, net of tax:

Foreign currency translation

(115.0)

(38.5)

(111.2)

(62.4)

Other fair value changes:

Hedge derivatives

20.8

18.7

(17.5)

20.4

Reclassification to earnings:

Foreign currency translation

-

-

(7.4)

-

Hedge derivatives

1.0

(6.4)

(0.4)

4.2

Amortization of losses and prior service costs

14.2

22.8

28.3

31.2

Other comprehensive loss, net of tax

(79.0)

(3.4)

(108.2)

(6.6)

Total comprehensive income 

529.3

605.0

1,323.4

1,240.0

Comprehensive income (loss) attributable to 

 redeemable and noncontrolling interests

3.0

(25.8)

5.0

(49.3)

Comprehensive income attributable to General Mills

$

526.3

$

630.8

$

1,318.4

$

1,289.3

See accompanying notes to consolidated financial statements. 

6

Consolidated Balance Sheets

GENERAL MILLS, INC. AND SUBSIDIARIES

(In Millions, Except Par Value)

Nov. 27, 2022

May 29, 2022

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

644.1

$

569.4

Receivables

1,834.0

1,692.1

Inventories

2,121.3

1,867.3

Prepaid expenses and other current assets

731.2

802.1

Assets held for sale

-

158.9

Total current assets

5,330.6

5,089.8

Land, buildings, and equipment

3,358.0

3,393.8

Goodwill

14,476.0

14,378.5

Other intangible assets

6,974.8

6,999.9

Other assets

1,180.4

1,228.1

Total assets

$

31,319.8

$

31,090.1

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable

$

4,022.6

$

3,982.3

Current portion of long-term debt

1,964.3

1,674.2

Notes payable

1,153.4

811.4

Other current liabilities

2,067.9

1,552.0

Total current liabilities

9,208.2

8,019.9

Long-term debt

8,622.5

9,134.8

Deferred income taxes

2,186.9

2,218.3

Other liabilities

930.1

929.1

Total liabilities

20,947.7

20,302.1

Stockholders' equity:

Common stock,

754.6

 shares issued, $

0.10

 par value

75.5

75.5

Additional paid-in capital

1,155.3

1,182.9

Retained earnings

18,991.9

18,532.6

Common stock in treasury, at cost, shares of

164.4

 and

155.7

(8,023.5)

(7,278.1)

Accumulated other comprehensive loss

(2,078.0)

(1,970.5)

Total stockholders' equity

10,121.2

10,542.4

Noncontrolling interests

250.9

245.6

Total equity

10,372.1

10,788.0

Total liabilities and equity

$

31,319.8

$

31,090.1

See accompanying notes to consolidated financial statements.

7

Consolidated Statements of Total Equity and Redeemable Interest

GENERAL MILLS, INC. AND SUBSIDIARIES

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

Quarter Ended

Nov. 27, 2022

Nov. 28, 2021

Shares

Amount

Shares

Amount

Total equity, beginning balance

$

10,825.6

$

9,985.9

Common stock,

1

 billion shares authorized, $

0.10

 par value

754.6

75.5

754.6

75.5

Additional paid-in capital:

Beginning balance

1,146.1

1,345.0

Stock compensation plans

(7.4)

(5.1)

Unearned compensation related to stock unit awards

(6.8)

(3.9)

Earned compensation

23.4

20.6

Decrease in redemption value of

 redeemable interest

-

8.5

Ending balance

1,155.3

1,365.1

Retained earnings:

Beginning balance

19,027.6

17,384.5

Net earnings attributable to General Mills

605.9

597.2

Cash dividends declared ($

1.08

 and $

1.02

 per share)

(641.6)

(618.5)

Ending balance

18,991.9

17,363.2

Common stock in treasury:

Beginning balance

(160.3)

(7,676.0)

(148.3)

(6,715.0)

Shares purchased

(5.2)

(400.5)

(3.7)

(224.9)

Stock compensation plans

1.1

53.0

0.6

24.7

Ending balance

(164.4)

(8,023.5)

(151.4)

(6,915.2)

Accumulated other comprehensive loss:

Beginning balance

(1,998.4)

(2,397.7)

Comprehensive (loss) income

(79.6)

33.6

Ending balance

(2,078.0)

(2,364.1)

Noncontrolling interests:

Beginning balance

250.8

293.5

Comprehensive income (loss)

3.0

(11.9)

Distributions to noncontrolling interest holders

(2.9)

(1.4)

Ending balance

250.9

280.2

Total equity, ending balance

$

10,372.1

$

9,804.7

Redeemable interest:

Beginning balance

$

-

$

584.0

Comprehensive loss

-

(13.9)

Decrease in redemption value of 

 redeemable interest

-

(8.5)

Ending balance

$

-

$

561.6

See accompanying notes to consolidated financial statements.

8

Consolidated Statements of Total Equity and Redeemable Interest

GENERAL MILLS, INC. AND SUBSIDIARIES

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

Six-Month Period Ended

Nov. 27, 2022

Nov. 28, 2021

Shares

Amount

Shares

Amount

Total equity, beginning balance

$

10,788.0

$

9,773.2

Common stock,

1

 billion shares authorized, $

0.10

 par value

754.6

75.5

754.6

75.5

Additional paid-in capital:

Beginning balance

1,182.9

1,365.5

Stock compensation plans

1.9

4.0

Unearned compensation related to stock unit awards

(85.8)

(72.2)

Earned compensation

56.3

53.7

Decrease in redemption value of

 redeemable interest

-

14.1

Ending balance

1,155.3

1,365.1

Retained earnings:

Beginning balance

18,532.6

17,069.8

Net earnings attributable to General Mills

1,425.9

1,224.2

Cash dividends declared ($

1.62

 and $

1.53

 per share)

(966.6)

(930.8)

Ending balance

18,991.9

17,363.2

Common stock in treasury:

Beginning balance

(155.7)

(7,278.1)

(146.9)

(6,611.2)

Shares purchased

(12.1)

(901.3)

(6.2)

(375.0)

Stock compensation plans

3.4

155.9

1.7

71.0

Ending balance

(164.4)

(8,023.5)

(151.4)

(6,915.2)

Accumulated other comprehensive loss:

Beginning balance

(1,970.5)

(2,429.2)

Other comprehensive (loss) income

(107.5)

65.1

Ending balance

(2,078.0)

(2,364.1)

Noncontrolling interests:

Beginning balance

245.6

302.8

Comprehensive income (loss)

5.0

(20.1)

Distributions to noncontrolling interest holders

(4.8)

(2.5)

Divestiture

5.1

-

Ending balance

250.9

280.2

Total equity, ending balance

$

10,372.1

$

9,804.7

Redeemable interest:

Beginning balance

$

-

$

604.9

Comprehensive loss

-

(29.2)

Decrease in redemption value of

 redeemable interest

-

(14.1)

Ending balance

$

-

$

561.6

See accompanying notes to consolidated financial statements.

9

Consolidated Statements of Cash Flows

GENERAL MILLS, INC. AND SUBSIDIARIES

(Unaudited) (In Millions)

Six-Month Period Ended

Nov. 27, 2022

Nov. 28, 2021

Cash Flows - Operating Activities

Net earnings, including earnings attributable to redeemable and noncontrolling interests

$

1,431.6

$

1,246.6

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

Depreciation and amortization

273.9

286.9

After-tax earnings from joint ventures

(45.2)

(62.1)

Distributions of earnings from joint ventures

26.5

35.8

Stock-based compensation

57.6

47.9

Deferred income taxes

(48.1)

56.4

Pension and other postretirement benefit plan contributions

(12.7)

(12.5)

Pension and other postretirement benefit plan costs

(13.5)

(14.4)

Divestitures gain, net

(430.9)

-

Restructuring, impairment, and other exit costs

(13.7)

(44.2)

Changes in current assets and liabilities, excluding the effects of 

 acquisitions and divestitures

(64.4)

(88.7)

Other, net

39.6

46.1

Net cash provided by operating activities

1,200.7

1,497.8

Cash Flows - Investing Activities

Purchases of land, buildings, and equipment

(226.7)

(224.3)

Acquisition, net of cash acquired

(251.5)

(1,198.6)

Proceeds from divestitures, net of cash divested

610.7

-

Investments in affiliates, net

(1.4)

4.8

Proceeds from disposal of land, buildings, and equipment

0.5

1.5

Other, net

(6.5)

20.6

Net cash provided (used) by investing activities

125.1

(1,396.0)

Cash Flows - Financing Activities

Change in notes payable

353.4

854.2

Issuance of long-term debt

500.0

1,935.0

Payment of long-term debt

(600.0)

(2,221.7)

Proceeds from common stock issued on exercised options

118.5

26.1

Purchases of common stock for treasury

(901.3)

(375.0)

Dividends paid

(647.9)

(623.2)

Distributions to noncontrolling and redeemable interest holders

(4.8)

(2.5)

Other, net

(48.4)

(20.1)

Net cash used by financing activities

(1,230.5)

(427.2)

Effect of exchange rate changes on cash and cash equivalents

(20.6)

(35.1)

Increase (decrease) in cash and cash equivalents

74.7

(360.5)

Cash and cash equivalents - beginning of year

569.4

1,505.2

Cash and cash equivalents - end of period (includes $

123.7

 million of cash classified as

held for sale as of November 28, 2021)

$

644.1

$

1,144.7

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

 acquisitions and divestitures:

Receivables

$

(200.8)

$

(237.3)

Inventories

(278.5)

9.2

Prepaid expenses and other current assets

62.9

(1.2)

Accounts payable

112.5

(28.4)

Other current liabilities

239.5

169.0

Changes in current assets and liabilities

$

(64.4)

$

(88.7)

See accompanying notes to consolidated financial statements.

10

GENERAL MILLS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) Background

The accompanying Consolidated Financial Statements of General Mills, Inc. (we, us, our, General Mills, or the Company) have been

prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information

and with the rules and regulations for reporting on Form 10-Q. Accordingly, they do not include certain information and disclosures

required for comprehensive financial statements. In the opinion of management, all adjustments considered necessary for a fair

presentation have been included and are of a normal recurring nature, including the elimination of all intercompany transactions and

any noncontrolling and redeemable interests’ share of those transactions. Operating results for the fiscal quarter ended November 27,

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

These statements should be read in conjunction with the Consolidated Financial Statements and footnotes included in our Annual

Report on Form 10-K for the fiscal year ended May 29, 2022. The accounting policies used in preparing these Consolidated Financial

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

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

(2) Acquisitions and Divestiture

During the first quarter of fiscal 2023, we acquired TNT Crust, a manufacturer of high-quality frozen pizza crusts for regional and

national pizza chains, foodservice distributors, and retail outlets, for a purchase price of $

253.0

 million. We financed the transaction

with U.S. commercial paper. We consoli dated the TNT Crust business into our Consolidated Balance Sheets and recorded goodwill of

$

154.3

 million. The goodwill is included in the North America Foodservice segment and is not deductible for tax purposes. The pro

forma effects of this acquisition were not material. We have conducted a preliminary assessment of the fair value of the acquired

assets and liabilities of the TNT Crust business and will continue to review these items during the measurement period. If new

information is obtained about facts and circumstances that existed at the acquisition date, the acquisition accounting will be revised to

reflect the resulting adjustments to current estimates of these items. The consolidated results of the TNT Crust business are reported in

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

During the first quarter of fiscal 2023, we completed the sale of our Helper main meals and Suddenly Salad side dishes business to

Eagle Family Foods Group for $

606.8

 million and recorded a pre-tax gain of $

442.2

 million.

During the first quarter of fiscal 2022, we acquired Tyson Foods’ pet treats business for $

1.2

 billion in cash. We financed the

transaction with a combination of cash on hand and short-term debt. We consolidated the pet treats business into our Consolidated

Balance Sheets and recorded goodwill of $

762.3

 million, indefinite-lived intangible assets for the

Nudges

,

Top Chews

, and

True

Chews

 brands totaling $

330.0

 million in aggregate, and a finite-lived customer relationship asset of $

40.0

 million. The goodwill is

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

(3) Restructuring, Impairment, and Other Exit Costs

In the six-month period ended November 27, 2022, we did not undertake any new restructuring actions. We recorded $

11.6

 million of

restructuring charges in the second quarter of fiscal 2023 and $

13.9

 million of restructuring charges in the six-month period ended

November 27, 2022, related to restructuring actions previously announced. We recorded $

2.7

 million of restructuring charges in the

second quarter of fiscal 2022 and a $

1.4

 million net recovery of restructuring charges in the six-month period ended November 28,

2021, related to restructuring actions previously announced. We expect these actions to be completed by the end of

fiscal 2024

.

In the second quarter of fiscal 2023, we increased the estimate of restructuring charges that we expect to incur related to our

previously announced actions in the International segment to drive efficiencies in manufacturing and logistics operations. As a result,

we recorded a $

4.5

 million increase to our restructuring reserve primarily related to estimated severance charges. We expect to incur

approximately $

25

 million of restructuring charges and project-related costs related to these actions, of which approximately $

16

million will be cash. These charges are expected to consist of approximately $

12

 million of severance and $

10

 million of other costs,

primarily asset write-offs. We also expect to incur approximately $

3

 million of project-related costs. We expect these actions to be

completed by the end of

fiscal 2024

.

In the second quarter of fiscal 2023, we increased the estimate of restructuring charges that we expect to incur related to our

previously announced global organizational structure and resource realignment actions. As a result, we recorded a $

4.1

 million

increase to our restructuring reserve primarily related to estimated severance charges. We expect to incur approximately $

140

 million

11

of restructuring charges related to these actions, of which approximately $

115

 million will be cash. These charges are expected to

consist of approximately $

105

 million of severance and approximately $

35

 million of other costs. We expect these actions to be

completed by the end of

fiscal 2023

. 

We paid net $

27.6

 million of cash in the six-month period ended November 27, 2022, related to restructuring actions previously

announced. We paid net $

42.8

 million of cash in the same period of fiscal 2022.

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

In Millions

Total

Reserve balance as of May 29, 2022

$

36.8

Fiscal 2023 charges, including foreign currency translation

7.5

Utilized in fiscal 2023

(24.1)

Reserve balance as of Nov. 27, 2022

$

20.2

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

The charges recognized in the roll forward of our reserves for restructuring and other exit costs do not include items charged directly

to expense (e.g., asset impairment charges, accelerated depreciation, the gain or loss on the sale of restructured assets, and the write-

off of spare parts) and other periodic exit costs are recognized as incurred, as those items are not reflected in our restructuring and

other exit cost reserves on our Consolidated Balance Sheets.

(4) Goodwill and Other Intangible Assets

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

In Millions

Nov. 27, 2022

May 29, 2022

Goodwill

$

14,476.0

$

14,378.5

Other intangible assets:

Intangible assets not subject to amortization:

Brands and other indefinite-lived intangibles

6,706.6

6,725.8

Intangible assets subject to amortization:

Customer relationships and other finite-lived intangibles

401.9

400.3

Less accumulated amortization

(133.7)

(126.2)

Intangible assets subject to amortization, net

268.2

274.1

Other intangible assets

6,974.8

6,999.9

Total

$

21,450.8

$

21,378.4

Based on the carrying value of finite-lived intangible assets as of November 27, 2022, annual amortization expense for each of the

next five fiscal years is estimated to be approximately $

20

 million.

12

The changes in the carrying amount of goodwill during the six-month period ended November 27, 2022, were as follows:

In Millions

North

America

Retail

Pet

North

America

Foodservice

International

Joint Ventures

Total

Balance as of May 29, 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

(6.4)

-

-

(37.5)

(12.5)

(56.4)

Balance as of Nov. 27, 2022

$

6,546.5

$

6,062.8

$

803.1

$

683.7

$

379.9

$

14,476.0

The changes in the carrying amount of other intangible assets during the six-month period ended November 27, 2022, were as follows:

In Millions

Total

Balance as of May 29, 2022

$

6,999.9

Acquisition

3.8

Other activity, primarily foreign currency translation

(28.9)

Balance as of Nov. 27, 2022

$

6,974.8

Our annual goodwill and indefinite-lived intangible assets impairment test was performed on the first day of the second quarter of

fiscal 2023, and we determined there was

no

 impairment of our intangible assets as their related fair values were substantially in

excess of the carrying values, except for the

Uncle Toby’s

 brand intangible asset. In addition, while having significant coverage as of

our fiscal 2023 assessment date, the

Progresso

 and

EPIC

 brand intangible assets had risk of decreasing coverage. We will continue to

monitor these businesses for potential impairment.

(5) Inventories

The components of inventories were as follows:

In Millions

Nov. 27, 2022

May 29, 2022

Raw materials and packaging

$

565.8

$

532.0

Finished goods

1,923.6

1,634.7

Grain

156.1

164.0

Excess of FIFO over LIFO cost

(524.2)

(463.4)

Total

$

2,121.3

$

1,867.3

(6) Risk Management Activities 

Many commodities we use in the production and distribution of our products are exposed to market price risks. We utilize derivatives

to manage price risk for our principal ingredients and energy costs, including grains (oats, wheat, and corn), oils (principally soybean),

dairy products, natural gas, and diesel fuel. Our primary objective when entering into these derivative contracts is to achieve certainty

with regard to the future price of commodities purchased for use in our supply chain. We manage our exposures through a

combination of purchase orders, long-term contracts with suppliers, exchange-traded futures and options, and over-the-counter options

and swaps. We offset our exposures based on current and projected market conditions and generally seek to acquire the inputs at as

close as possible to or below our planned cost.

We use derivatives to manage our exposure to changes in commodity prices. We do not perform the assessments required to achieve

hedge accounting for commodity derivative positions. Accordingly, the changes in the values of these derivatives are recorded

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

Although we do not meet the criteria for cash flow hedge accounting, we believe that these instruments are effective in achieving our

objective of providing certainty in the future price of commodities purchased for use in our supply chain. Accordingly, for purposes of

measuring segment operating performance, these gains and losses are reported in unallocated corporate items outside of segment

operating results until such time 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. 

13

Unallocated corporate items for the quarters and six-month periods ended November 27, 2022, and November 28, 2021, included:

Quarter Ended

Six-Month Period Ended

In Millions

Nov. 27, 2022

Nov. 28, 2021

Nov. 27, 2022

Nov. 28, 2021

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

 commodity positions

$

(20.9)

$

16.6

$

(93.2)

$

47.0

Net gain on commodity positions reclassified from 

 unallocated corporate items to segment operating profit

(20.5)

(35.9)

(63.5)

(70.6)

Net mark-to-market revaluation of certain grain inventories

16.3

31.4

(43.1)

59.8

Net mark-to-market valuation of certain commodity 

 positions recognized in unallocated corporate items

$

(25.1)

$

12.1

$

(199.8)

$

36.2

As of November 27, 2022, the net notional value of commodity derivatives was $

429.4

 million, of which $

158.1

 million related to

energy inputs and $

271.3

 million related to agricultural inputs. These contracts relate to inputs that generally will be utilized within the

next

12

 months.

The fair values of the derivative positions used in our risk management activities and other assets recorded at fair value were not

material as of November 27, 2022 and were Level 1 or Level 2 assets and liabilities in the fair value hierarchy. We did not

significantly change our valuation techniques from prior periods. 

We offer certain suppliers access to third party services that allow them to view our scheduled payments online. The third-party

services also allow suppliers to finance advances on our scheduled payments at the sole discretion of the supplier and the third party.

We have no economic interest in these financing arrangements and no direct relationship with the suppliers, the third parties, or any

financial institutions concerning these services. All of our accounts payable remain as obligations to our suppliers as stated in our

supplier agreements. As of November 27, 2022, $

1,477.4

 million of our total accounts payable were payable to suppliers who utilize

these third-party services. As of November 28, 2021, $

1,378.1

 million of our total accounts payable were payable to suppliers who

utilize these third-party services.

During the second quarter of fiscal 2023, we entered into a $

500.0

 million notional amount interest rate swap to convert our

$

500.0

 million fixed rate notes due

November 18, 2025

, to a floating rate.

(7) Debt

The components of notes payable were as follows:

In Millions

Nov. 27, 2022

May 29, 2022

U.S. commercial paper

$

1,126.6

$

694.8

Financial institutions

26.8

116.6

Total

$

1,153.4

$

811.4

To ensure availability of funds, we maintain bank credit lines and have commercial paper programs available to us in the United States

and Europe. 

The following table details the fee-paid committed and uncommitted credit lines we had available as of November 27, 2022:

In Billions

Facility 

Amount

Borrowed

Amount

Committed credit facility expiring April 2026

$

2.7

$

-

Uncommitted credit facilities

0.6

-

Total committed and uncommitted credit facilities

$

3.3

$

-

The credit facilities contain covenants, including a requirement to maintain a fixed charge coverage ratio of at least

2.5

 times.

We

were in compliance with all credit facility covenants as of November 27, 2022.

Long-Term Debt 

The fair values and carrying amounts of long-term debt, including the current portion, were $

9,875.3

 million and $

10,586.8

 million,

respectively, as of November 27, 2022. The fair value of long-term debt was estimated using market quotations and discounted cash

14

flows based on our current incremental borrowing rates for similar types of instruments. Long -term debt is a Level 2 liability in the

fair value hierarchy. 

In the second quarter of fiscal 2023, we issued $

500.0

 million of

5.241

 percent notes due

November 18, 2025

. We used the net

proceeds to repay a portion of our outstanding commercial paper and for general corporate purposes.

In the second quarter of fiscal 2023, we issued €

250.0

 million of floating-rate notes due

May 16, 2023

. We used the net proceeds to

repay €

250.0

 million of

0.0

 percent fixed-rate notes due

November 11, 2022

.

In the fourth quarter of fiscal 2022, we repaid $

850.0

 million of

3.7

 percent fixed rate notes due

October 17, 2023

, using proceeds

from the issuance of commercial paper.

In the fourth quarter of fiscal 2022, we issued €

250.0

 million of

0.0

 percent fixed-rate notes due

November 11, 2022

. We used the net

proceeds for general corporate purposes.

In the second quarter of fiscal 2022, we issued €

500.0

 million of

0.125

 percent fixed-rate notes due

November 15, 2025

. We used the

net proceeds to repay a portion of our €

500.0

 million of

0.0

 percent fixed-rate notes due

November 16, 2021

, and for general corporate

purposes.

In the second quarter of fiscal 2022, we issued €

250.0

 million of floating-rate notes due

May 16, 2023

. We used the net proceeds to

repay a portion of our outstanding commercial paper and for general corporate purposes.

In the second quarter of fiscal 2022, we issued $

500.0

 million of

2.25

 percent notes due

October 14, 2031

. We used the net proceeds

together with proceeds from the issuance of commercial paper, to repay $

1,000.0

 million of

3.15

 percent fixed-rate notes due

December 15, 2021

.

In the first quarter of fiscal 2022, we issued €

500.0

 million of floating-rate notes due

July 27, 2023

. We used the net proceeds to repay

€

500.0

 million of

0.0

 percent fixed-rate notes due

August 21, 2021

.

In the first quarter of fiscal 2022, we repaid €

200.0

 million of

2.2

 percent fixed-rate notes due

June 24, 2021

, using proceeds from the

issuance of €

50.0

 million of

2.2

 percent fixed-rate notes due

November 29, 2021

, and borrowings under a committed credit facility.

Certain of our long-term debt agreements contain restrictive covenants.

As of November 27, 2022, we were in compliance with all of

these covenants.

(8) Redeemable and Noncontrolling Interests

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

available net income based on the application of a floating preferred return rate to the holder’s capital account balance established in

the most recent mark-to-market valuation (currently $

251.5

 million). On June 1, 2021, the floating preferred return rate on GMC’s

Class A Interests was reset to the sum of

three-month LIBOR

 plus

160

 basis points. The preferred return rate is adjusted every

three

years

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

During the third quarter of fiscal 2022, we completed the sale of our interests in Yoplait SAS, Yoplait Marques SNC and Liberté

Marques Sàrl to Sodiaal International (Sodiaal) in exchange for Sodiaal’s interest in our Canadian yogurt business, a modified

agreement for the use of

Yoplait

 and

Liberté

brands in the United States and Canada, and cash. 

Up to the date of the divestiture, Sodiaal held the remaining interests in each of the entities. On the acquisition date, we recorded the

fair value of Sodiaal’s

49

 percent euro-denominated interest in Yoplait SAS as a redeemable interest on our Consolidated Balance

Sheets. Sodiaal had the right to put all or a portion of its redeemable interest to us at fair value until the divestiture closed in the third

quarter of fiscal 2022. In connection with the divestiture, cumulative adjustments made to the redeemable interest related to the fair

value put feature were reversed against additional paid-in capital, where changes in the redemption amount were historically recorded,

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

A

subsidiary of Yoplait SAS had an exclusive milk supply agreement for its European operations with Sodiaal through November 28,

2021. Net purchases totaled $

99.5

 million for the six-month period ended November 28, 2021.

Our noncontrolling interests contain restrictive covenants. As of November 27, 2022, we were in compliance with all of these

covenants.

15

(9) Stockholders’ Equity 

The following tables provide details of total comprehensive income:

Quarter Ended

Quarter Ended

Nov. 27, 2022

Nov. 28, 2021

General Mills

Noncontrolling

Interests 

General Mills

Noncontrolling

Interests

Redeemable

Interest

In Millions

Pretax

Tax

Net

Net

Pretax

Tax

Net

Net

Net

Net earnings, including earnings 

 attributable to redeemable and 

 noncontrolling interests 

$

605.9

$

2.4

$

597.2

$

1.9

$

9.3

Other comprehensive (loss) income:

Foreign currency translation

$

(144.7)

$

29.1

(115.6)

0.6

$

(29.0)

$

27.8

(1.2)

(13.8)

(23.5)

Other fair value changes:

Hedge derivatives

26.8

(6.0)

20.8

-

29.1

(11.0)

18.1

-

0.6

Reclassification to earnings:

Hedge derivatives (a)

1.8

(0.8)

1.0

-

(12.1)

6.0

(6.1)

-

(0.3)

Amortization of losses and

 prior service costs (b)

18.3

(4.1)

14.2

-

29.2

(6.4)

22.8

-

-

Other comprehensive (loss) income

$

(97.8)

$

18.2

(79.6)

0.6

$

17.2

$

16.4

33.6

(13.8)

(23.2)

Total comprehensive income (loss)

$

526.3

$

3.0

$

$

630.8

$

(11.9)

$

(13.9)

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

(b) Loss reclassified from AOCI into earnings is reported in benefit plan non-service income.

Six-Month Period Ended

Six-Month Period Ended

Nov. 27, 2022

Nov. 28, 2021

General Mills

Noncontrolling

Interests

General Mills

Noncontrolling

Interests

Redeemable

Interest

In Millions

Pretax

Tax

Net

Net

Pretax

Tax

Net

Net

Net

Net earnings, including earnings

 attributable to redeemable and

 noncontrolling interests 

$

1,425.9

$

5.7

$

$

1,224.2

$

4.9

$

17.5

Other comprehensive (loss) income:

Foreign currency translation

$

(86.7)

$

(23.8)

(110.5)

(0.7)

$

(40.9)

$

50.5

9.6

(25.0)

(47.0)

Other fair value changes:

Hedge derivatives

(23.0)

5.5

(17.5)

-

31.9

(12.0)

19.9

-

0.5

Reclassification to earnings:

Foreign currency translation (a)

(7.4)

-

(7.4)

-

-

-

-

-

-

Hedge derivatives (b)

(0.1)

(0.3)

(0.4)

-

(0.1)

4.5

4.4

-

(0.2)

Amortization of losses and 

prior service costs (c) 

36.5

(8.2)

28.3

-

40.0

(8.8)

31.2

-

-

Other comprehensive (loss) income

$

(80.7)

$

(26.8)

(107.5)

(0.7)

$

30.9

$

34.2

65.1

(25.0)

(46.7)

Total comprehensive income (loss)

$

1,318.4

$

5.0

$

$

1,289.3

$

(20.1)

$

(29.2)

(a) Gain reclassified from AOCI into earnings is reported in the divestitures gain, net.

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

(c) Loss reclassified from AOCI into earnings is reported in benefit plan non-service income.

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

In Millions

Nov. 27, 2022

May 29, 2022

Foreign currency translation adjustments

$

(708.6)

$

(590.7)

Unrealized gain from hedge derivatives

5.4

23.3

Pension, other postretirement, and postemployment benefits:

Net actuarial loss

(1,477.0)

(1,513.4)

Prior service credits

102.2

110.3

Accumulated other comprehensive loss

$

(2,078.0)

$

(1,970.5)

(10) Stock Plans

We have various stock-based compensation programs under which awards, including stock options, restricted stock, restricted stock

units, and performance awards, may be granted to employees and non-employee directors. These programs and related accounting are

described in Note 12 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended

May 29, 2022.

16

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

Quarter Ended

Six-Month Period Ended

In Millions

Nov. 27, 2022

Nov. 28, 2021

Nov. 27, 2022

Nov. 28, 2021

Compensation expense related to stock-based payments

$

24.1

$

13.9

$

57.6

$

47.5

Compensation expense related to stock-based payments recognized in the Consolidated Statements of Earnings includes amounts

recognized in restructuring, impairment, and other exit costs in fiscal 2022.

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

Quarter Ended

Six-Month Period Ended

In Millions

Nov. 27, 2022

Nov. 28, 2021

Nov. 27, 2022

Nov. 28, 2021

Windfall tax benefits from stock-based payments

$

5.6

$

1.6

$

18.4

$

6.3

As of November 27, 2022, unrecognized compensation expense related to non-vested stock options, restricted stock units, and

performance share units was $

147.4

 million. This expense will be recognized over

23

 months, on average.

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

were as follows:

Six-Month Period Ended

In Millions

Nov. 27, 2022

Nov. 28, 2021

Net cash proceeds

$

118.5

$

26.1

Intrinsic value of options exercised

$

55.7

$

12.1

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.

The estimated fair values of stock options granted and the assumptions used for the Black-Scholes option-pricing model were as

follows:

Six-Month Period Ended

Nov. 27, 2022

Nov. 28, 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 during the period was as follows:

Six-Month Period Ended

In Millions

Nov. 27, 2022

Nov. 28, 2021

Total grant date fair value

$

102.6

$

76.0

17

(11) Earnings Per Share

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

Quarter Ended

Six-Month Period Ended

In Millions, Except per Share Data

Nov. 27, 2022

Nov. 28, 2021

Nov. 27, 2022

Nov. 28, 2021

Net earnings attributable to General Mills

$

605.9

$

597.2

$

1,425.9

$

1,224.2

Average number of common shares - basic EPS

595.9

608.6

598.0

609.5

Incremental share effect from: (a)

Stock options

3.7

2.2

3.6

2.1

Restricted stock units and performance share units

2.4

2.2

2.4

2.2

Average number of common shares - diluted EPS

602.0

613.0

604.0

613.8

Earnings per share – basic

$

1.01

$

0.98

$

2.38

$

2.01

Earnings per share – diluted

$

1.01

$

0.97

$

2.36

$

1.99

(a) Incremental shares from stock options, restricted stock units, and performance share units are computed by the treasury stock

method.

 Stock options, restricted stock units, and performance share units excluded from our computation of diluted EPS because they

were not dilutive were as follows

:

Quarter Ended

Six-Month Period Ended

In Millions

Nov. 27, 2022

Nov. 28, 2021

Nov. 27, 2022

Nov. 28, 2021

Anti-dilutive stock options, restricted stock units, and

 performance share units 

1.0

4.6

1.0

4.7

(12) Share Repurchases

Share repurchases were as follows:

Quarter Ended

Six-Month Period Ended

In Millions

Nov. 27, 2022

Nov. 28, 2021

Nov. 27, 2022

Nov. 28, 2021

Shares of common stock

5.2

3.7

12.1

6.2

Aggregate purchase price

$

400.5

$

224.9

$

901.3

$

375.0

(13) Statements of Cash Flows

Our Consolidated Statements of Cash Flows include the following:

Six-Month Period Ended

In Millions

Nov. 27, 2022

Nov. 28, 2021

Net cash interest payments

$

154.3

$

185.7

Net income tax payments

$

365.4

$

271.1

18

(14) Retirement and Postemployment Benefits

Components of net periodic benefit expense (income) are as follows:

Defined Benefit

Pension Plans

Other Postretirement 

Benefit Plans

Postemployment

Benefit Plans

Quarter Ended

Quarter Ended

Quarter Ended

In Millions

Nov. 27,

2022

Nov. 28,

2021

Nov. 27,

2022

Nov. 28,

2021

Nov. 27,

2022

Nov. 28,

2021

Service cost

$

17.5

$

23.5

$

1.2

$

1.9

$

2.1

$

1.7

Interest cost

64.6

46.1

4.5

3.1

0.8

0.3

Expected return on plan assets

(105.0)

(102.9)

(7.8)

(6.7)

-

-

Amortization of losses (gains)

28.4

35.5

(4.8)

(2.7)

-

0.7

Amortization of prior service costs (credits)

0.3

0.2

(5.7)

(5.2)

0.1

0.1

Other adjustments

-

-

-

-

2.9

3.8

Curtailment loss (gain)

-

0.5

-

(0.2)

-

-

Net expense (income)

$

5.8

$

2.9

$

(12.6)

$

(9.8)

$

5.9

$

6.6

Defined Benefit 

Pension Plans

Other Postretirement 

Benefit Plans

Postemployment

Benefit Plans

Six-Month

Period Ended

Six-Month

Period Ended

Six-Month

Period Ended

In Millions

Nov. 27,

2022

Nov. 28,

2021

Nov. 27,

2022

Nov. 28,

2021

Nov. 27,

2022

Nov. 28,

2021

Service cost

$

35.1

$

47.2

$

2.6

$

3.8

$

4.2

$

3.5

Interest cost

129.2

92.4

9.0

6.3

1.6

0.7

Expected return on plan assets

(210.0)

(205.7)

(15.6)

(13.4)

-

-

Amortization of losses (gains)

56.7

70.4

(9.7)

(5.4)

0.1

1.5

Amortization of prior service costs (credits)

0.7

0.4

(11.5)

(10.4)

0.2

0.2

Other adjustments

-

-

-

-

5.9

5.7

Curtailment gain

-

(14.3)

-

(5.7)

-

-

Net expense (income)

$

11.7

$

(9.6)

$

(25.2)

$

(24.8)

$

12.0

$

11.6

(15) Income Taxes

During the first quarter of fiscal 2023, the Inflation Reduction Act (IRA) was signed into law. The IRA introduces a Corporate

Alternative Minimum Tax beginning in our fiscal 2024 and an excise tax on the repurchase of corporate stock starting after January 1,

2023. We do not currently expect the IRA to have a material impact on our financial results, including our annual estimated effective

tax rate, or on our liquidity. We will continue to monitor and assess the impact the IRA may have on our business and financial

results.

During fiscal 2022, the Brazilian tax authority, Secretaria da Receita Federal do Brasil (RFB), concluded audits of our 2012 through

2018 tax return years. These audits included a review of our determinations of amortization of certain goodwill arising from the

acquisition of Yoki Alimentos S.A. The RFB has proposed adjustments that effectively eliminate the goodwill amortization benefits

related to this transaction. We believe we have meritorious defenses and intend to continue to contest the disallowance for all years.

(16) Contingencies

During fiscal 2020, we received notice from the tax authorities of the State of São Paulo, Brazil regarding our compliance with its

state sales tax requirements. As a result, we have been assessed additional state sales taxes, interest, and penalties. We believe that we

have meritorious defenses against this claim and will vigorously defend our position. As of November 27, 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

We operate in the packaged foods industry. In fiscal 2022, we completed a new organization structure to streamline our global

operations. This global reorganization required us to reevaluate our operating segments. Under our new organization structure, our

19

chief operating decision maker assesses performance and makes decisions about resources to be allocated to our operating segments as

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

We have restated our net sales by segment and segment operating profit to reflect our previously reported operating segment change.

These segment changes had no effect on previously reported consolidated net sales, operating profit, net earnings attributable to

General Mills, or earnings per share. 

Our North America Retail operating segment reflects business with a wide variety of grocery stores, mass merchandisers, membership

stores, natural food chains, drug, dollar and discount chains, convenience stores, and e-commerce grocery providers. Our product

categories in this business segment include ready-to-eat cereals, refrigerated yogurt, soup, meal kits, refrigerated and frozen dough

products, dessert and baking mixes, frozen pizza and pizza snacks, snack bars, fruit snacks, savory snacks, and a wide variety of

organic products including ready-to-eat cereal, frozen and shelf-stable vegetables, meal kits, fruit snacks, snack bars, and refrigerated

yogurt.

Our International operating segment consists of retail and foodservice businesses outside of the United States and Canada. Our

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

and shelf stable vegetables. We also sell super-premium ice cream and frozen desserts directly to consumers through owned retail

shops. Our International segment also includes products manufactured in the United States for export, mainly to Caribbean and Latin

American markets, as well as products we manufacture for sale to our international joint ventures. Revenues from export activities are

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

Our Pet operating segment includes pet food products sold primarily in the United States and Canada in national pet superstore chains,

e-commerce retailers, grocery stores, regional pet store chains, mass merchandisers, and veterinary clinics and hospitals. Our product

categories include dog and cat food (dry foods, wet foods, and treats) made with whole meats, fruits, vegetables and other high-quality

natural ingredients. Our tailored pet product offerings address specific dietary, lifestyle, and life-stage needs and span different

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

Our North America Foodservice segment consists of foodservice businesses in the United States and Canada. Our major product

categories in our North America Foodservice operating segment are ready-to-eat cereals, snacks, refrigerated yogurt, frozen meals,

unbaked and fully baked frozen dough products, baking mixes, and bakery flour. Many products we sell are branded to the consumer

and nearly all are branded to our customers. We sell to distributors and operators in many customer channels including foodservice,

vending, and supermarket bakeries.

Operating profit for these segments excludes unallocated corporate items, gain or loss on divestitures, and restructuring, impairment,

and other exit costs. Unallocated corporate items include corporate overhead expenses, variances to planned North American

employee benefits and incentives, certain charitable contributions, restructuring initiative project-related costs, gains and losses on

corporate investments, and other items that are not part of our measurement of segment operating performance. These include gains

and losses arising from the revaluation of certain grain inventories and gains and losses from mark-to-market valuation of certain

commodity positions until passed back to our operating segments. These items affecting operating profit are centrally managed at the

corporate level and are excluded from the measure of segment profitability reviewed by executive management. Under our supply

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

to maximize efficiency and productivity. As a result, fixed assets and depreciation and amortization expenses are neither maintained

nor available by operating segment.