UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
THE FISCAL YEAR ENDED
FOR THE TRANSITION PERIOD FROM __________ TO __________
Commission file number:
________________
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
,
(Address of principal executive offices)
(Zip Code)
(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
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
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Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes
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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.
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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).
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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.
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Accelerated filer
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Non-accelerated filer
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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.
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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the
registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b).
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes
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Aggregate market value of Common Stock held by non-affiliates of the registrant, based on the closing price of $65.18 per share as
reported on the New York Stock Exchange on November 26, 2023 (the last business day of the registrant’s most recently completed
second fiscal quarter): $
Number of shares of Common Stock outstanding as of June 10, 2024:
treasury).
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s Proxy Statement for its 2024 Annual Meeting of Shareholders are incorporated by reference into Part III.
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Table of Contents
Page
Part I
Item 1
4
Item 1A
8
Item 1B
13
Item 1C
13
Item 2
14
Item 3
14
Item 4
15
Part II
Item 5
15
Item 7
16
Item 7A
37
Item 8
39
Item 9
87
Item 9A
88
Item 9B
88
Item 9C
88
Part III
Item 10
88
Item 11
88
Item 12
89
Item 13
89
Item 14
89
Part IV
Item 15
90
Item 16
93
94
4
PART I
ITEM 1 - Business
COMPANY OVERVIEW
For more than 150 years, General Mills has been making food the world loves. We are a leading global manufacturer and marketer of
branded consumer foods with more than 100 brands in 100 countries across six continents. In addition to our consolidated operations,
we have 50 percent interests in two strategic joint ventures that manufacture and market food products sold in approximately 130
countries worldwide.
We manage and review the financial results of our business under four operating segments: North America Retail; International; Pet;
and North America Foodservice. See Management’s Discussion and Analysis of Financial Condition and Results of Operations
(MD&A) in Item 7 of this report for a description of our segments.
We offer a variety of human and pet food products that provide great taste, nutrition, convenience, and value for consumers around the
world. Our business is focused on the following large, global categories:
●
snacks, including grain, fruit and savory snacks, nutrition bars, and frozen hot snacks;
●
ready-to-eat cereal;
●
convenient meals, including meal kits, ethnic meals, pizza, soup, side dish mixes, frozen breakfast, and frozen entrees;
●
wholesome natural pet food;
●
refrigerated and frozen dough;
●
baking mixes and ingredients;
●
yogurt; and
●
super-premium ice cream.
Our Cereal Partners Worldwide (CPW) joint venture with Nestlé S.A. (Nestlé) competes in the ready-to-eat cereal category in markets
outside North America, and our Häagen-Dazs Japan, Inc. (HDJ) joint venture competes in the super-premium ice cream category in
Japan. For net sales contributed by each class of similar products, please see Note 17 to the Consolidated Financial Statements in Item
8 of this report.
The terms “General Mills,” “Company,” “registrant,” “we,” “us,” and “our” mean General Mills, Inc. and all subsidiaries included in
the Consolidated Financial Statements in Item 8 of this report unless the context indicates otherwise.
Certain terms used throughout this report are defined in a glossary in Item 8 of this report.
Customers
Our primary customers are grocery stores, mass merchandisers, membership stores, natural food chains, drug, dollar and discount
chains, e-commerce retailers, commercial and noncommercial foodservice distributors and operators, restaurants, convenience stores,
and pet specialty stores. We generally sell to these customers through our direct sales force. We use broker and distribution
arrangements for certain products and to serve certain types of customers and certain markets. For further information on our customer
credit and product return practices, please refer to Note 2 to the Consolidated Financial Statements in Item 8 of this report. During
fiscal 2024, Walmart Inc. and its affiliates (Walmart) accounted for 22 percent of our consolidated net sales and 30 percent of net sales
of our North America Retail segment. No other customer accounted for 10 percent or more of our consolidated net sales. For further
information on significant customers, please refer to Note 8 to the Consolidated Financial Statements in Item 8 of this report.
Competition
The human and pet food categories are highly competitive, with numerous manufacturers of varying sizes in the United States and
throughout the world. The categories in which we participate also are very competitive. Our principal competitors in these categories
are manufacturers, as well as retailers with their own branded products. Competitors market and sell their products through brick-and-
mortar stores and e-commerce. All our principal competitors have substantial financial, marketing, and other resources. Competition
in our product categories is based on product innovation, product quality, price, brand recognition and loyalty, effectiveness of
marketing, promotional activity, convenient ordering and delivery to the consumer, and the ability to identify and satisfy consumer
preferences. Our principal strategies for competing in each of our segments include unique consumer insights, effective customer
relationships, superior product quality, innovative advertising, product promotion, product innovation aligned with consumers’ needs,
an efficient supply chain, and price. In most product categories, we compete not only with other widely advertised, branded products,
but also with regional brands and with generic and private label products that are generally sold at lower prices. Internationally, we
compete with both multi-national and local manufacturers, and each country includes a unique group of competitors.
5
Raw materials, ingredients, and packaging
The principal raw materials that we use are grains (wheat, oats, and corn), dairy products, meat, vegetable oils, sugar, vegetables,
fruits, nuts, and other agricultural products. We also use substantial quantities of carton board, corrugated, plastic, and metal
packaging materials, operating supplies, and energy. Most of these inputs for our domestic and Canadian operations are purchased
from suppliers in the United States. In our other international operations, inputs that are not locally available in adequate supply may
be imported from other countries. The cost of these inputs may fluctuate widely due to external conditions such as weather, climate
change, product scarcity, limited sources of supply, commodity market fluctuations, currency fluctuations, trade tariffs, pandemics,
war, and changes in governmental agricultural and energy policies and regulations. We believe that we will be able to obtain an
adequate supply of needed inputs. Occasionally and where possible, we make advance purchases of items significant to our business
in order to ensure continuity of operations. Our objective is to procure materials meeting both our quality standards and our production
needs at price levels that allow a targeted profit margin. Since these inputs generally represent the largest variable cost in
manufacturing our products, to the extent possible, we often manage the risk associated with adverse price movements for some inputs
using a variety of risk management strategies. We also have a grain merchandising operation that provides us efficient access to, and
more informed knowledge of, various commodity markets, principally wheat and oats. This operation holds physical inventories that
are carried at net realizable value and uses derivatives to manage its net inventory position and minimize its market exposures.
TRADEMARKS AND PATENTS
Our products are marketed under a variety of valuable trademarks. Some of the more important trademarks used in our global
operations (set forth in italics in this report) include
Annie’s
,
,
Bisquick
,
Blue Buffalo
,
Bugles
,
Cascadian
Farm
,
Cheerios
,
Chex
,
Cinnamon Toast Crunch
,
Cocoa Puffs
,
Cookie Crisp
,
Dunkaroos, Edgard & Cooper,
Fiber One
,
Fruit by the Foot
,
Fruit Gushers
,
Fruit Roll-Ups
,
Gardetto’s
,
Gold Medal
,
Golden Grahams
,
Häagen-Dazs
,
Kitano
,
Kix
,
Lärabar
,
Latina
,
Lucky
Charms
,
Muir Glen
,
Nature Valley
,
Nudges, Oatmeal Crisp
,
Old El Paso
,
Pillsbury
,
Progresso
,
Tastefuls,
Total , Totino’s
,
Trix
,
True
Chews, True Solutions, Wanchai Ferry
,
Wheaties
,
Wilderness
, and
Yoki
. We protect these trademarks as appropriate through
registrations in the United States and other jurisdictions. Depending on the jurisdiction, trademarks are generally valid as long as they
are in use or their registrations are properly maintained and they have not been found to have become generic. Registrations of
trademarks can also generally be renewed indefinitely for as long as the trademarks are in use.
Some of our products are marketed under or in combination with trademarks that have been licensed from others for both long-
standing products (e.g.,
Reese’s Puffs
Green Giant
for vegetables in certain countries, and
Yoplait
and related brands for
fresh dairy in the United States and Canada), and shorter term promotional products (e.g., fruit snacks sold under various third party
equities).
Our cereal trademarks are licensed to CPW and may be used in association with the
Nestlé
trademark. Nestlé licenses certain of its
trademarks to CPW, including the
Nestlé
Uncle Toby’s
Häagen-Dazs
exclusively to Nestlé and authorized sublicensees for ice cream and other frozen dessert products in the United States and Canada.
The
Häagen-Dazs
Pillsbury
Pillsbury Doughboy
to an exclusive, royalty-free license that was granted to a third party and its successors in the shelf-stable baking categories in the
United States and under limited circumstances in Canada and Mexico.
We continue our focus on developing and marketing innovative, proprietary products, many of which use proprietary expertise,
recipes and formulations. We consider the collective rights under our various patents, which expire from time to time, a valuable asset,
but we do not believe that our businesses are materially dependent upon any single patent or group of related patents.
SEASONALITY
In general, demand for our products is evenly balanced throughout the year. However, within our North America Retail segment
demand for refrigerated dough, frozen baked goods, and baking products is stronger in the fourth calendar quarter. Demand for
Progresso
soup is higher during the fall and winter months. Within our International segment, demand for
Häagen-Dazs
ice cream is
higher during the summer months and demand for baking mix increases during winter months. Due to the offsetting impact of these
demand trends, as well as the different seasons in the northern and southern hemispheres, our International segment’s net sales are
generally evenly balanced throughout the year.
QUALITY AND SAFETY REGULATION
The manufacture and sale of human and pet food products is highly regulated. In the United States, our activities are subject to
regulation by various federal government agencies, including the Food and Drug Administration, Department of Agriculture, Federal
Trade Commission, Department of Commerce, Occupational Safety and Health Administration, and Environmental Protection
Agency, as well as various federal, state, and local agencies relating to the production, packaging, labelling, marketing, storage,
distribution, quality, and safety of food and pet products and the health and safety of our employees. Our business is also regulated by
similar agencies outside of the United States.
6
ENVIRONMENTAL MATTERS
As of May 26, 2024, we were involved with two response actions associated with the alleged or threatened release of hazardous
substances or wastes located in Minneapolis, Minnesota and Moonachie, New Jersey.
Our operations are subject to the Clean Air Act, Clean Water Act, Resource Conservation and Recovery Act, Comprehensive
Environmental Response, Compensation, and Liability Act, and the Federal Insecticide, Fungicide, and Rodenticide Act, and all
similar state, local, and foreign environmental laws and regulations applicable to the jurisdictions in which we operate.
Based on current facts and circumstances, we believe that neither the results of our environmental proceedings nor our compliance in
general with environmental laws or regulations will have a material adverse effect upon our capital expenditures, earnings, or
competitive position.
HUMAN CAPITAL MANAGEMENT
Recruiting, developing, engaging, and protecting our workforce is critical to executing our strategy and achieving business success. As
of May 26, 2024, we had approximately 34,000 employees around the globe, with approximately 16,000 in the U.S. and
approximately 18,000 located in our markets outside of the U.S. Our workforce is divided between approximately 13,000 employees
dedicated to the production of our products and approximately 21, 000 non-production employees.
The efficient production of high-quality products and successful execution of our strategy requires a talented, skilled, and engaged
team of employees. We work to equip our employees with critical skills and expand their contributions over time by providing a range
of training and career development opportunities, including hands-on experiences via challenging work assignments and job rotations,
coaching and mentoring opportunities, and training programs. To foster employee engagement and commitment, we follow a robust
process to listen to employees, take action, and measure our progress with on-going employee conversations, transparent
communications, and employee engagement surveys.
We believe that fostering a culture of inclusion and belonging strengthens our ability to recruit talent and allows all of our employees
to thrive and succeed. We actively cultivate a culture that acknowledges, respects, and values all dimensions of diversity – including
gender, race, sexual orientation, ability, backgrounds, and beliefs. Ensuring diversity of input and perspectives is core to our business
strategy, and we are committed to recruiting, retaining, developing, and advancing a workforce that reflects the diversity of the
consumers we serve. This commitment starts with our company leadership where women represent approximately 49 percent of our
officer and director population, and approximately 24 percent of our officers and directors are racially or ethnically diverse. We
embed our culture of inclusion and belonging into our day-to-day ways of working through a number of programs to foster discussion,
build empathy, and increase understanding.
We are committed to maintaining a safe and secure workplace for our employees. We set specific safety standards to identify and
manage critical risks. We use global safety management systems and employee training to ensure consistent implementation of safety
protocols and accurate measurement and tracking of incidents. To provide a safe and secure working environment for our employees,
we prohibit workplace discrimination, and we do not tolerate abusive conduct or harassment. Our attention to the health and safety of
our workforce extends to the workers and communities in our supply chain. We believe that respect for human rights is fundamental to
our strategy and to our commitment to ethical business conduct.
INFORMATION ABOUT OUR EXECUTIVE OFFICERS
The section below provides information regarding our executive officers as of June 26, 2024.
Kofi A. Bruce
, age 54, is Chief Financial Officer. Mr. Bruce joined General Mills in 2009 as Vice President, Treasurer after serving in
a variety of senior management positions with Ecolab and Ford Motor Company. He served as Treasurer until 2010 when he was
named Vice President, Finance for Yoplait. Mr. Bruce reassumed his role as Vice President, Treasurer from 2012 until 2014 when he
was named Vice President, Finance for Convenience Stores & Foodservice. He was named Vice President, Controller in 2017, Vice
President, Financial Operations in September 2019, and to his present position in February 2020.
Ricardo Fernandez
,
age
51, is Segment President, International. Mr. Fernandez joined General Mills in 2000 as an Associate
Marketing Manager and held various marketing roles of increasing responsibility until being named Vice President, Marketing, Frozen
Frontier in 2012, Vice President, CPW Marketing in 2014, President, Latin America in 2016, and President, Morning Foods in
January 2020. He was named to his present position in December 2023.
Paul J. Gallagher
,
age
56, is Chief Supply Chain Officer. Mr. Gallagher joined General Mills in April 2019 as Vice President, North
America Supply Chain from Diageo plc. He began his career at Diageo where he spent 25 years serving in a variety of leadership roles
7
in manufacturing, procurement, planning, customer service, and engineering before becoming President, North America Supply from
2013 to March 2019. He was named to his current position in July 2021.
Jeffrey L. Harmening
, age 57, is Chairman of the Board and Chief Executive Officer. Mr. Harmening joined General Mills in 1994
and served in various marketing roles in the Betty Crocker, Yoplait, and Big G cereal divisions. He was named Vice President,
Marketing for CPW in 2003 and Vice President of the Big G cereal division in 2007. In 2011, he was promoted to Senior Vice
President for the Big G cereal division. Mr. Harmening was appointed Senior Vice President, Chief Executive Officer of CPW in
2012. Mr. Harmening returned from CPW in 2014 and was named Executive Vice President, Chief Operating Officer, U.S. Retail. He
became President, Chief Operating Officer in 2016. He was named Chief Executive Officer in 2017 and Chairman of the Board in
2018. Mr. Harmening is a director of The Toro Company.
Dana M. McNabb
,
age 48,
is Group President, North America Retail. Ms. McNabb joined General Mills in 1999 and held a variety of
marketing roles in Cereal, Snacks, Meals, and New Products before becoming Vice President, Marketing for CPW in 2011 and Vice
President, Marketing for the Circle of Champions Business Unit in 2015. She became President, U.S. Cereal Operating Unit in 2016,
Group President, Europe & Australia in January 2020, Chief Strategy & Growth Officer in July 2021, and was named to her present
position in January 2024.
Jaime Montemayor
, age 60, is Chief Digital and Technology Officer. He spent 21 years at PepsiCo, Inc., serving in roles of
increasing responsibility, including most recently as Senior Vice President and Chief Information Officer of PepsiCo’s Americas
Foods segment from 2013 to 2015, and Senior Vice President and Chief Information Officer, Digital Innovation, Data and Analytics,
PepsiCo from 2015 to 2016. Mr. Montemayor served as Chief Technology Officer of 7-Eleven Inc. in 2017. He assumed his current
role in February 2020 after founding and operating a digital technology consulting company from 2017 until January 2020.
Jon J. Nudi
, age 54, is Group President, Pet, International, and North America Foodservice. Mr. Nudi joined General Mills in 1993 as
a Sales Representative and held a variety of roles in Consumer Foods Sales. In 2005, he moved into marketing roles in the Meals
division and was elected Vice President in 2007. Mr. Nudi was named Vice President; President, Snacks, in 2010, Senior Vice
President; President, Europe/Australasia in 2014, Senior Vice President; President, U.S. Retail in 2016 and Group President, North
America Retail in 2017. He was named to his present position in January 2024.
Mark A. Pallot,
age 51, is Vice President, Chief Accounting Officer. Mr. Pallot joined General Mills in 2007 and served as
Director,
Financial Reporting until 2017, when he was named Vice President, Assistant Controller. He was elected to his present position in
February 2020. Prior to joining General Mills, Mr. Pallot held accounting and financial reporting positions at Residential Capital,
LLC, Metris, Inc., CIT Group Inc., and Ernst & Young, LLP.
Lanette Shaffer Werner
, age 53, is Chief Innovation, Technical and Quality Officer. Ms. Shaffer Werner joined General Mills in 1995
and held various R&D roles in Frozen Desserts and Pillsbury before serving as Director of One Global Dairy and Sr. Director for One
Global Cereal. In July 2021, Ms. Shaffer Werner was named as Vice President, Innovation, Technical and Quality, U.S. Meals &
Baking Solutions. She was named to her present position in June 2023.
Pankaj Sharma,
age 51, is Segment President, North America Foodservice. Mr. Sharma joined General Mills in 2014 and served as a
Marketing Director until 2017, when he was named Vice President, Marketing, Europe & Australia. He was promoted to President,
U.S. Yogurt in May 2018 and President, U.S. Meals & Baking Solutions in July 2019. He was named to his current position in
February 2024.
Jacqueline Williams-Roll
, age 55, is Chief Human Resources Officer. In this capacity, she also has responsibility for Corporate
Communications. Ms. Williams-Roll joined General Mills in 1995. She held human resources leadership roles in Supply Chain,
Finance, Marketing, and Organization Effectiveness and worked a large part of her career on businesses outside of the United States.
She was named Vice President, Human Resources, International in 2010, and then promoted to Senior Vice President, Human
Resources Operations in 2013. She was named to her present position in 2014. Prior to joining General Mills, she held sales and
management roles with Jenny Craig International.
Karen Wilson Thissen
, age 57, is General Counsel and Secretary. Ms. Wilson Thissen joined General Mills in June 2022. Prior to
joining General Mills, she spent 17 years at Ameriprise Financial, Inc., serving in roles of increasing responsibility, including most
recently as Executive Vice President and General Counsel from 2017 to June 2022, and Executive Vice President and Deputy General
Counsel from 2014 to 2017. Before joining Ameriprise Financial, Inc., she was a partner at the law firm of Faegre & Benson LLP
(now Faegre Drinker Biddle & Reath LLP).
WEBSITE ACCESS
Our website is https://www.generalmills.com.
We make available, free of charge in the “Investors” portion of this website, annual
reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or
8
furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (1934 Act) as soon as reasonably practicable after
we electronically file such material with, or furnish it to, the Securities and Exchange Commission (SEC). All such filings are
available on the SEC’s website at https://www.sec.gov. Reports of beneficial ownership filed pursuant to Section 16(a) of the 1934
Act are also available on our website.
ITEM 1A - Risk Factors
Our business is subject to various risks and uncertainties. Any of the risks described below could materially, adversely affect our
business, financial condition, and results of operations.
Business and Industry Risks
The categories in which we participate are very competitive, and if we are
not able to compete effectively, our results of
operations could be adversely
affected.
The human and pet food categories in which we participate are very competitive. Our principal competitors in these categories are
manufacturers, as well as retailers with their own branded and private label products. Competitors market and sell their products
through brick-and-mortar stores and e-commerce. All of our principal competitors have substantial financial, marketing, and other
resources. In most product categories, we compete not only with other widely advertised branded products, but also with regional
brands and with generic and private label products that are generally sold at lower prices. Competition in our product categories is
based on product innovation, product quality, price, brand recognition and loyalty, effectiveness of marketing, promotional activity,
convenient ordering and delivery to the consumer, and the ability to identify and satisfy consumer preferences. If our large
competitors were to seek an advantage through pricing or promotional changes, we could choose to do the same, which could
adversely affect our margins and profitability. If we did not do the same, our revenues and market share could be adversely affected.
Our market share and revenue growth could also be adversely impacted if we are not successful in introducing innovative products in
response to changing consumer demands or by new product introductions of our competitors. If we are unable to build and sustain
brand equity by offering recognizably superior product quality, we may be unable to maintain premium pricing over generic and
private label products.
We may be unable to maintain our profit margins in the face of a consolidating retail environment.
There has been significant consolidation in the grocery industry, resulting in customers with increased purchasing power. In addition,
large retail customers may seek to use their position to improve their profitability through improved efficiency, lower pricing,
increased reliance on their own brand name products, increased emphasis on generic and other economy brands, and increased
promotional programs. If we are unable to use our scale, marketing expertise, product innovation, knowledge of consumers’ needs,
and category leadership positions to respond to these demands, our profitability and volume growth could be negatively impacted. In
addition, the loss of any large customer could adversely affect our sales and profits. In fiscal 2024, Walmart accounted for 22 percent
of our consolidated net sales and 30 percent of net sales of our North America Retail segment. For more information on significant
customers, please see Note 8 to the Consolidated Financial Statements in Item 8 of this report.
Price changes for the commodities we depend on for raw materials, packaging,
and energy may adversely affect our
profitability.
The principal raw materials that we use are commodities that experience price volatility caused by external conditions such as
weather, climate change, product scarcity, limited sources of supply, commodity market fluctuations, currency fluctuations, trade
tariffs, pandemics, war (including international sanctions imposed on Russia for its invasion of Ukraine), and changes in governmental
agricultural and energy policies and regulations. Commodity prices have become, and may continue to be, more volatile. Commodity
price changes may result in unexpected increases in raw material, packaging, energy, and transportation costs. If we are unable to
increase productivity to offset these increased costs or increase our prices, we may experience reduced margins and profitability. We
do not fully hedge against changes in commodity prices, and the risk management procedures that we do use may not always work as
we intend.
Concerns with the safety and quality of our products could cause consumers to
avoid certain products or ingredients.
We could be adversely affected if consumers in our principal markets lose confidence in the safety and quality of certain of our
products or ingredients. Adverse publicity about these types of concerns, whether or not valid, may discourage consumers from
buying our products or cause production and delivery disruptions.
9
We may be unable to anticipate changes in consumer preferences and trends,
which may result in decreased demand for our
products.
Our success depends in part on our ability to anticipate the tastes, eating habits, and purchasing behaviors of consumers and to offer
products that appeal to their preferences in channels where they shop. Consumer preferences and category-level consumption may
change from time to time and can be affected by a number of different trends and other factors. If we fail to anticipate, identify or
react to these changes and trends, such as adapting to emerging e-commerce channels, or to introduce new and improved products on a
timely basis, we may experience reduced demand for our products, which would in turn cause our revenues and profitability to suffer.
Similarly, demand for our products could be affected by consumer concerns regarding the health effects of ingredients such as sodium,
trans fats, genetically modified organisms, sugar, processed wheat, grain-free or legume-rich pet food, or other product ingredients or
attributes.
We may be unable to grow our market share or add products that are in faster
growing and more profitable categories.
The food industry’s growth potential is constrained by population growth. Our success depends in part on our ability to grow our
business faster than populations are growing in the markets that we serve. One way to achieve that growth is to enhance our portfolio
by adding innovative new products in faster growing and more profitable categories. Our future results will also depend on our ability
to increase market share in our existing product categories. If we do not succeed in developing innovative products for new and
existing categories, our growth and profitability could be adversely affected.
Our results may be negatively impacted if consumers do not maintain their favorable perception of our brands.
Maintaining and continually enhancing the value of our many iconic brands is critical to the success of our business. The value of our
brands is based in large part on the degree to which consumers react and respond positively to these brands. Brand value could
diminish significantly due to a number of factors, including consumer perception that we have acted in an irresponsible manner,
adverse publicity about our products, our failure to maintain the quality of our products, the failure of our products to deliver
consistently positive consumer experiences, concerns about food safety, or our products becoming unavailable to consumers.
Consumer demand for our products may also be impacted by changes in the level of advertising or promotional support. The use of
social and digital media by consumers, us, and third parties increases the speed and extent that information or misinformation and
opinions can be shared. Negative posts or comments about us, our brands, or our products on social or digital media could seriously
damage our brands and reputation. If we do not maintain the favorable perception of our brands, our business results could be
negatively impacted.
Operating Risks
If we are not efficient in our production, our profitability could suffer as a
result of the highly competitive environment in
which we operate.
Our future success and earnings growth depend in part on our ability to be efficient in the production and manufacture of our products
in highly competitive markets. Gaining additional efficiencies may become more difficult over time. Our failure to reduce costs
through productivity gains or by eliminating redundant costs resulting from acquisitions or divestitures could adversely affect our
profitability and weaken our competitive position. Many productivity initiatives involve complex reorganization of manufacturing
facilities and production lines. Such manufacturing realignment may result in the interruption of production, which may negatively
impact product volume and margins. We periodically engage in restructuring and cost savings initiatives designed to increase our
efficiency and reduce expenses. If we are unable to execute those initiatives as planned, we may not realize all or any of the
anticipated benefits, which could adversely affect our business and results of operations.
Disruption of our supply chain could adversely affect our business.
Our ability to make, move, and sell products is critical to our success. Damage or disruption to raw material supplies or our
manufacturing or distribution capabilities due to weather, climate change, natural disaster, fire, terrorism, cyber-attack, pandemics,
war, governmental restrictions or mandates, labor shortages, strikes, import/export restrictions, or other factors could impair our
ability to manufacture or sell our products. Many of our product lines are manufactured at a single location or sourced from a single
supplier. The failure of third parties on which we rely, including those third parties who supply our ingredients, packaging, capital
equipment and other necessary operating materials, contract manufacturers, commercial transport, distributors, contractors, and
external business partners, to meet their obligations to us, or significant disruptions in their ability to do so, may negatively impact our
operations. Our suppliers’ policies and practices can damage our reputation and the quality and safety of our products. Disputes with
significant suppliers, including disputes regarding pricing or performance, could adversely affect our ability to supply products to our
customers and could materially and adversely affect our sales, financial condition, and results of operations. Failure to take adequate
steps to mitigate the likelihood or potential impact of such events, or to effectively manage such events if they occur, particularly
10
when a product is sourced from a single location or supplier, could adversely affect our business and results of operations, as well as
require additional resources to restore our supply chain.
Short term or sustained increases in consumer demand at our retail customers may exceed our production capacity or otherwise strain
our supply chain. Our failure to meet the demand for our products could adversely affect our business and results of operations.
Our international operations are subject to political and economic risks.
In fiscal 2024, 19 percent of our consolidated net sales were generated outside of the United States. We are accordingly subject to a
number of risks relating to doing business internationally, any of which could significantly harm our business. These risks include:
●
political and economic instability;
●
exchange controls and currency exchange rates;
●
tariffs on products and ingredients that we import and export;
●
nationalization or government control of operations;
●
compliance with anti-corruption regulations;
●
foreign tax treaties and policies; and
●
restriction on the transfer of funds to and from foreign countries, including potentially negative tax consequences.
Our financial performance on a U.S. dollar denominated basis is subject to fluctuations in currency exchange rates. These fluctuations
could cause material variations in our results of operations. 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. From time to time, we enter
into agreements that are intended to reduce the effects of our exposure to currency fluctuations, but these agreements may not be
effective in significantly reducing our exposure.
A strengthening in the U.S. dollar relative to other currencies in the countries in which we operate would negatively affect our
reported results of operations and financial results due to currency translation losses and currency transaction losses.
Our business operations could be disrupted if our information technology systems fail to perform adequately or are breached.
Information technology serves an important role in the efficient and effective operation of our business. We rely on information
technology networks and systems, including the internet, to process, transmit, and store electronic information to manage a variety of
business processes and to comply with regulatory, legal, and tax requirements. Our information technology systems and infrastructure
are critical to effectively manage our key business processes including digital marketing, order entry and fulfillment, supply chain
management, finance, administration, and other business processes. These technologies enable internal and external communication
among our locations, employees, suppliers, customers, and others and include the receipt and storage of personal information about
our employees, consumers, and proprietary business information. Our information technology systems, some of which are dependent
on services provided by third parties, may be vulnerable to damage, interruption, or shutdown due to any number of causes such as
catastrophic events, natural disasters, fires, power outages, systems failures, telecommunications failures, security breaches, computer
viruses, hackers, employee error or malfeasance, and other causes. Increased cyber-security threats pose a potential risk to the security
and viability of our information technology systems, as well as the confidentiality, integrity, and availability of the data stored on
those systems. The failure of our information technology systems to perform as we anticipate could disrupt our business and result in
transaction errors, processing inefficiencies, data loss, legal claims or proceedings, regulatory penalties, and the loss of sales and
customers. Any interruption of our information technology systems could have operational, reputational, legal, and financial impacts
that may have a material adverse effect on our business.
Our failure to successfully integrate acquisitions into our existing operations could adversely affect our financial results.
From time to time, we evaluate potential acquisitions or joint ventures that would further our strategic objectives. Our success
depends, in part, upon our ability to integrate acquired and existing operations. If we are unable to successfully integrate acquisitions,
our financial results could suffer. Additional potential risks associated with acquisitions include additional debt leverage, the loss of
key employees and customers of the acquired business, the assumption of unknown liabilities, the inherent risk associated with
entering a geographic area or line of business in which we have no or limited prior experience, failure to achieve anticipated synergies,
and the impairment of goodwill or other acquisition-related intangible assets.
11
Legal and Regulatory Risks
If our products become adulterated, misbranded, or mislabeled, we might
need to recall those items and may experience
product liability claims if
consumers or their pets are injured.
We may need to recall some of our products if they become adulterated, misbranded, or mislabeled. A widespread product recall could
result in significant losses due to the costs of a recall, the destruction of product inventory, and lost sales due to the unavailability of
product for a period of time. We could also suffer losses from a significant product liability judgment against us. A significant product
recall or product liability case could also result in adverse publicity, damage to our reputation, and a loss of consumer confidence in
our products, which could have an adverse effect on our business results and the value of our brands.
New regulations or regulatory-based claims could adversely affect our business.
Our facilities and products are subject to many laws and regulations administered by the United States Department of Agriculture, the
Federal Food and Drug Administration, the Occupational Safety and Health Administration, and other federal, state, local, and foreign
governmental agencies relating to the production, packaging, labelling, storage, distribution, quality, and safety of food products and
the health and safety of our employees. Our failure to comply with such laws and regulations could subject us to lawsuits,
administrative penalties, and civil remedies, including fines, injunctions, and recalls of our products. We advertise our products and
could be the target of claims relating to alleged false or deceptive advertising under federal, state, and foreign laws and regulations.
We may also be subject to new laws or regulations restricting our right to advertise our products, including restrictions on the audience
to whom products are marketed. Changes in laws or regulations that impose additional regulatory requirements on us could increase
our cost of doing business or restrict our actions, causing our results of operations to be adversely affected.
We are subject to various federal, state, local, and foreign environmental laws and regulations. Our failure to comply with
environmental laws and regulations could subject us to lawsuits, administrative penalties, and civil remedies. We are currently party to
a variety of environmental remediation obligations. Due to regulatory complexities, uncertainties inherent in litigation, and the risk of
unidentified contaminants on current and former properties of ours, the potential exists for remediation, liability, indemnification, and
compliance costs to differ from our estimates. We cannot guarantee that our costs in relation to these matters, or compliance with
environmental laws in general, will not exceed our established liabilities or otherwise have an adverse effect on our business and
results of operations.
Climate change and other sustainability matters could adversely affect our business.
There is growing concern that carbon dioxide and other greenhouse gases in the earth’s atmosphere may have an adverse impact on
global temperatures, weather patterns, and the frequency and severity of extreme weather and natural disasters. If such climate change
has a negative effect on agricultural productivity, we may experience decreased availability and higher pricing for certain commodities
that are necessary for our products. Increased frequency or severity of extreme weather could also impair our production capabilities,
disrupt our supply chain, impact demand for our products, and increase our insurance and other operating costs. Increasing concern
over climate change or other sustainability issues also may adversely impact demand for our products due to changes in consumer
preferences or negative consumer reaction to our commitments and actions to address these issues. We may also become subject to
additional legal and regulatory requirements relating to climate change or other sustainability issues, including greenhouse gas
emission regulations (e.g., carbon taxes), energy policies, sustainability initiatives (e.g., single-use plastic limits), and disclosure
obligations. If additional legal and regulatory requirements are enacted and are more aggressive than the sustainability measures that
we are currently undertaking to reduce our emissions and improve our energy efficiency and other sustainability goals, or if we chose
to take actions to achieve more aggressive goals, we may experience significant increases in our costs of operations.
We have announced goals and commitments to reduce our carbon footprint. If we fail to achieve or improperly report on our progress
toward achieving our carbon emissions reduction goals and commitments, then the resulting negative publicity could harm our
reputation and adversely affect demand for our products.
Financial and Economic Risks
Volatility in the market value of derivatives we use to manage exposures to fluctuations in commodity prices may cause
volatility in our gross margins and net earnings.
We utilize derivatives to manage price risk for some of our principal ingredient and energy costs, including grains (oats, wheat, and
corn), oils (principally soybean), dairy products, natural gas, and diesel fuel. Changes in the values of these derivatives are recorded in
earnings currently, which may result in volatility in both gross margin and net earnings. These gains and losses are reported in cost of
sales in our Consolidated Statements of Earnings and in unallocated corporate items outside our segment operating results until we
utilize the underlying input in our manufacturing process, at which time the gains and losses are reclassified to segment operating
12
profit. We also record our grain inventories at net realizable value. We may experience volatile earnings as a result of these accounting
treatments.
Economic downturns could limit consumer demand for our products.
The willingness of consumers to purchase our products depends in part on local economic conditions. In periods of economic
uncertainty, consumers may purchase more generic, private label, and other economy brands and may forego certain purchases
altogether. In those circumstances, we could experience a reduction in sales of higher margin products or a shift in our product mix to
lower margin offerings. In addition, as a result of economic conditions or competitive actions, we may be unable to raise our prices
sufficiently to protect margins. Consumers may also reduce the amount of food that they consume away from home at customers that
purchase products from our North America Foodservice segment. Any of these events could have an adverse effect on our results of
operations.
We have a substantial amount of indebtedness, which could limit financing and other options and in some cases adversely
affect our ability to pay dividends.
As of May 26, 2024, we had total debt and noncontrolling interests of $13.2 billion. The agreements under which we have issued
indebtedness do not prevent us from incurring additional unsecured indebtedness in the future. Our level of indebtedness may limit
our:
●
ability to obtain additional financing for working capital, capital expenditures, or general corporate purposes, particularly if
the ratings assigned to our debt securities by rating organizations were revised downward; and
●
flexibility to adjust to changing business and market conditions and may make us more vulnerable to a downturn in general
economic conditions.
There are various financial covenants and other restrictions in our debt instruments and noncontrolling interests. If we fail to comply
with any of these requirements, the related indebtedness, and other unrelated indebtedness, could become due and payable prior to its
stated maturity and our ability to obtain additional or alternative financing may also be adversely affected.
Our ability to make scheduled payments on or to refinance our debt and other obligations will depend on our operating and financial
performance, which in turn is subject to prevailing economic conditions and to financial, business, and other factors beyond our
control.
We depend on stable, liquid and well-functioning capital and credit markets to fund our operations. Our financial performance, our
credit ratings, interest rates, the stability of financial institutions with which we partner, and the liquidity of the overall global capital
markets could affect our access to, and the availability, terms and conditions, and cost of capital.
Volatility in the securities markets, interest rates, and other factors could substantially increase our defined benefit
pension,
other postretirement benefit, and postemployment benefit costs.
We sponsor a number of defined benefit plans for employees in the United States, Canada, and various foreign locations, including
defined benefit pension, retiree health and welfare, severance, and other postemployment plans. Our major defined benefit pension
plans are funded with trust assets invested in a globally diversified portfolio of securities and other investments. Changes in interest
rates, mortality rates, health care costs, early retirement rates, investment returns, and the market value of plan assets can affect the
funded status of our defined benefit plans and cause volatility in the net periodic benefit cost and future funding requirements of the
plans. A significant increase in our obligations or future funding requirements could have a negative impact on our results of
operations and cash flows from operations.
A change in the assumptions regarding the future performance of our businesses or a different weighted-average cost of
capital used to value our reporting units or our indefinite-lived intangible assets could negatively affect our consolidated
results of operations and net worth.
As of May 26, 2024, we had $21. 5 billion of goodwill and indefinite-lived intangible assets. Goodwill for each of our reporting units
is tested for impairment annually and whenever events or changes in circumstances indicate that impairment may have occurred. We
compare the carrying value of the reporting unit, including goodwill, to the fair value of the reporting unit. If the fair value of the
reporting unit is less than the carrying value of the reporting unit, including goodwill, impairment has occurred. Our estimates of fair
value are determined based on a discounted cash flow model. Growth rates for sales and profits are determined using inputs from our
long-range planning process. We also make estimates of discount rates, perpetuity growth assumptions, market comparables, and other
factors. If current expectations for growth rates for sales and profits are not met, or other market factors and macroeconomic
conditions were to change, then our reporting units could become significantly impaired. While we currently believe that our goodwill
is not impaired, different assumptions regarding the future performance of our businesses could result in significant impairment losses.
13
We evaluate the useful lives of our intangible assets, primarily intangible assets associated with the
Blue Buffalo
,
Pillsbury
,
Totino’s
,
Old El Paso
,
,
Annie’s
,
Nudges
,
and
Häagen-Dazs
lived. Reaching a determination on useful life requires significant judgments and assumptions regarding the future effects of
obsolescence, demand, competition, other economic factors (such as the stability of the industry, known technological advances,
legislative action that results in an uncertain or changing regulatory environment, and expected changes in distribution channels), the
level of required maintenance expenditures, and the expected lives of other related groups of assets.
Our indefinite-lived intangible assets are also tested for impairment annually and whenever events or changes in circumstances
indicate that impairment may have occurred. Our estimate of the fair value of the brands is based on a discounted cash flow model
using inputs including projected revenues from our long-range plan, assumed royalty rates which could be payable if we did not own
the brands, and a discount rate. If current expectations for growth rates for sales and margins are not met, or other market factors and
macroeconomic conditions were to change, then our indefinite-lived intangible assets could become significantly impaired.
Our
Progresso
,
,
,
and
True Chews
businesses.
For further information on goodwill and intangible assets, please refer to Note 6 to the Consolidated Financial Statements in Item 8 of
this report.
ITEM 1B - Unresolved Staff Comments
None.
ITEM 1C - Cybersecurity
Cybersecurity Risk Management and Strategy
Our enterprise risk management framework considers cybersecurity risk alongside other company risks, as part of our overall risk
assessment process. We leverage an industry-leading framework, the National Institute of Standards and Technology Cybersecurity
Framework, and assess our maturity against that framework in partnership with an independent firm on an annual basis.
We assess and manage our cybersecurity risk using various mechanisms, starting with threat intelligence, which provides us a
necessary viewpoint to help us identify trends, understand how certain attacks may affect us, and prepare for evolutions in threat actor
behavior that may require changes to our security posture. To drive readiness, we perform periodic adversarial testing of our
cybersecurity posture through penetration testing, using both internal resources and external expertise, as well as table-top and “red
team” exercises to understand where processes or controls may be insufficient based on adversarial techniques.
Our internal audit team performs regular assessments of our program and selected components. We also leverage retrospectives from
previous cybersecurity incidents to understand weaknesses and to improve our security controls. We assess our critical suppliers
regularly for cybersecurity risk and prescribe remediation activities when necessary. As a part of a collaborative defense approach, we
regularly participate in multiple cybersecurity forums to share threat intelligence, best practices, and points of caution.
We train our employees through annual security training, phishing simulations, and regular communications about timely
cybersecurity topics and threats. We have a documented and well-tested cybersecurity incident response plan that guides us in
responding, containing, and eradicating cybersecurity threats that have breached our preventative controls. We regularly practice
technical recovery, and we maintain cybersecurity insurance.
Cybersecurity Governance
Our cybersecurity program is led by our Chief Digital and Technology Officer (CDTO) and Vice President of Cyber Security. Our
Vice President of Cyber Security, who reports to our CDTO, has a master’s degree in information assurance, and more than 20 years
of experience working in this field, including more than 12 years with General Mills. He has strategic and operational responsibility
for all aspects of the company’s cybersecurity program, from how cyber risks are identified, to how General Mills detects, responds,
contains, and recovers from cybersecurity threats.
The Audit Committee of our Board of Directors provides oversight for our cybersecurity program. The Audit Committee receives
regular updates from management on the effectiveness of our cybersecurity program, reviews plans on how management will
continually mature the program, and receives updates on special topics that help the committee provide effective oversight of the
program.
14
Our Security & Resilience Governance Committee provides oversight and governance for the company’s cybersecurity risk through
quarterly meetings, monthly dashboard reporting on management-aligned program performance targets, and as-needed updates on
cybersecurity incidents. This committee is composed of our Chief Financial Officer, General Counsel, Chief Human Resources
Officer, Chief Supply Chain Officer, and CDTO.
Like most companies, our systems are continually subjected to cybersecurity threats. Although we have not experienced a material
cybersecurity breach, we cannot guarantee that we will not experience a cyber threat or incident in the future. Additional information
on cybersecurity risks we face is included in Item 1A of this report, which should be read in conjunction with the information in this
Item 1C.
ITEM 2 - Properties
We own our principal executive offices and main research facilities, which are located in the Minneapolis, Minnesota metropolitan
area. We operate numerous manufacturing facilities and maintain many sales and administrative offices, warehouses, and distribution
centers around the world.
As of May 26, 2024, we operated 42 facilities for the production of a wide variety of food products. Of these facilities, 26 are located
in the United States, 4 in Latin America and Mexico, 5 in Europe/Australia, 4 in the Greater China region, 2 in Canada (1 of which is
leased), and 1 in the Asia/Middle East/Africa Region. The following is a list of the locations of our principal production facilities,
which primarily support the segment noted:
North America Retail
• St. Hyacinthe, Canada
• Irapuato, Mexico
• Buffalo, New York
• Covington, Georgia
• Reed City, Michigan
• Cincinnati, Ohio
• Belvidere, Illinois
• Fridley, Minnesota
• Wellston, Ohio
• Geneva, Illinois
• Hannibal, Missouri
• Murfreesboro, Tennessee
• Cedar Rapids, Iowa
• Albuquerque, New Mexico
• Milwaukee, Wisconsin
International
• Rooty Hill, Australia
• Nanjing, China
• Inofita, Greece
• Campo Novo do Pareceis, Brazil
• Sanhe, China
• Nashik, India
• Paranavai, Brazil
• Shanghai, China
• San Adrian, Spain
• Pouso Alegre, Brazil
• Arras, France
• Guangzhou, China
• Labatut, France
Pet
• Richmond, Indiana
• Joplin, Missouri
North America Foodservice
• Chanhassen, Minnesota
• Joplin, Missouri
• St. Charles, Missouri
• Green Bay, Wisconsin
We operate numerous grain elevators in the United States in support of our domestic manufacturing activities. We also utilize
approximately 17 million square feet of warehouse and distribution space, nearly all of which is leased, that primarily supports our
North America Retail and Pet segments. We own and lease a number of dedicated sales and administrative offices around the world,
totaling approximately 2 million square feet. We have additional warehouse, distribution, and office space in our plant locations.
As part of our Häagen-Dazs business in our International segment we operate 385 (all leased) and franchise 389 branded ice cream
parlors in various countries around the world, all outside of the United States and Canada.
ITEM 3 - Legal Proceedings
We are the subject of various pending or threatened legal actions in the ordinary course of our business. All such matters are subject to
many uncertainties and outcomes that are not predictable with assurance. In our opinion, there were no claims or litigation pending as
of May 26, 2024, that were reasonably likely to have a material adverse effect on our consolidated financial position or results of
15
operations. See the information contained under the section entitled “Environmental Matters” in Item 1 of this report for a discussion
of environmental matters in which we are involved.
ITEM 4 - Mine Safety Disclosures
None.
PART II
ITEM 5 - Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Our common stock is listed on the New York Stock Exchange under the symbol “GIS.” On June 10, 2024, there were approximately
22,800 record holders of our common stock.
The following table sets forth information with respect to shares of our common stock that we purchased during the fiscal quarter
ended May 26, 2024:
Period
Total Number
of Shares
Purchased (a)
Average Price
Paid Per Share
Total Number of Shares
Purchased as Part of a
Publicly Announced
Program (b)
Maximum Number of
Shares that may yet
be Purchased
Under the Plans or Program
(b)
February 26, 2024 -
March 31, 2024
-
$
-
-
61,383,817
April 1, 2024 -
April 28, 2024
2,405,113
70.46
2,405,113
58,978,704
April 29, 2024 -
May 26, 2024
3,319,707
70.83
3,319,707
55,658,997
Total
5,724,820
$
70.67
5,724,820
55,658,997
(a) The total number of shares purchased includes shares of common stock withheld for the payment of withholding taxes upon the
distribution of deferred option units.
(b) On June 27, 2022, our Board of Directors approved a new authorization for the repurchase of up to 100,000,000 shares of our
common stock and terminated the prior authorization. Purchases can be made in the open market or in privately negotiated
transactions, including the use of call options and other derivative instruments, Rule 10b5-1 trading plans, and accelerated
repurchase programs. The Board did not specify an expiration date for the authorization.
16
ITEM 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations
EXECUTIVE OVERVIEW
We are a global packaged foods company. We develop distinctive value-added food products and market them under unique brand
names. We work continuously to improve our core products and to create new products that meet consumers’ evolving needs and
preferences. In addition, we build the equity of our brands over time with strong consumer-directed marketing, innovative new
products, and effective merchandising. We believe our brand-building approach is the key to winning and sustaining leading share
positions in markets around the globe.
Our fundamental financial goal is to generate competitively differentiated returns for our shareholders over the long term. We believe
achieving that goal requires us to generate a consistent balance of net sales growth, margin expansion, cash conversion, and cash
return to shareholders over time.
Our long-term growth objectives are to deliver the following performance on average over time:
●
2 to 3 percent annual growth in organic net sales;
●
mid-single-digit annual growth in adjusted operating profit;
●
mid- to high-single-digit annual growth in adjusted diluted earnings per share (EPS);
●
free cash flow conversion of at least 95 percent of adjusted net earnings after tax; and
●
cash return to shareholders of 80 to 90 percent of free cash flow, including an attractive dividend yield.
Guided by our purpose to make food the world loves, we are executing our Accelerate strategy to drive sustainable, profitable growth
and top-tier shareholder returns over the long term. The strategy focuses on four pillars to create competitive advantages and win:
boldly building brands, relentlessly innovating, unleashing our scale, and standing for good. We are prioritizing our core markets,
global platforms, and local gem brands that have the best prospects for profitable growth and we are committed to reshaping our
portfolio with strategic acquisitions and divestitures to further enhance our growth profile.
In fiscal 2024, we experienced a more challenging category and competitive backdrop than we initially expected. As a result, we
pivoted our plans and enhanced our efficiency to generate adjusted operating profit and adjusted diluted EPS that were in line with our
original targeted ranges, even in a slower-than-anticipated topline growth environment. We delivered mixed performance against the
three priorities we established at the beginning of the year:
On our priority of competing effectively, we did not achieve our objective of holding or growing market share in more than
50 percent of our global priority businesses. Our fiscal 2024 performance was hindered by an uncertain macroeconomic
environment, which resulted in greater-than-expected value -seeking behaviors by consumers. Our organic net sales declined
1 percent for the year, with a decrease in contributions from organic volume growth, partially offset by favorable net price
realization and mix in response to 4 percent input cost inflation.
We successfully improved our supply chain efficiency, including generating industry-leading Holistic Margin Management
(HMM) cost savings and removing significant disruption-related costs from the supply chain. These efforts allowed us to
continue to invest in our brands and in leading capabilities, such as digital and technology capabilities, that will be critical for
driving future growth.
We maintained our disciplined approach to capital allocation, driving increased operating cash flow that we used to grow our
capital investment level, raise our dividend, and increase our share repurchase activity. We also continued to reshape our
portfolio, including closing on acquisitions that further improved our portfolio’s ability to generate profitable growth over the
long term.
Our consolidated net sales for fiscal 2024 decreased 1 percent to $19,857 million. On an organic basis, net sales decreased 1 percent
compared to year-ago levels. Operating profit of $3,432 million essentially matched fiscal 2023. Adjusted operating profit of $3,603
million increased 4 percent on a constant-currency basis. Diluted EPS of $4.31 matched fiscal 2023 results. Adjusted diluted EPS of
$4.52 increased 6 percent on a constant-currency basis (See the “Non-GAAP Measures” section below for a description of our use of
measures not defined by generally accepted accounting principles (GAAP)).
Net cash provided by operations totaled $3,303 million in fiscal 2024, representing a conversion rate of 131 percent of net earnings,
including earnings attributable to redeemable and noncontrolling interests. This cash generation supported capital investments totaling
$774 million, and our resulting free cash flow was $2,528 million at a conversion rate of 96 percent of adjusted net earnings, including
earnings attributable to redeemable and noncontrolling interests. We returned cash to shareholders through dividends totaling $1,363
million and net share repurchases totaling $1,977 million (See the “Non-GAAP Measures” section below for a description of our use
of measures not defined by GAAP).
17
A detailed review of our fiscal 2024 performance compared to fiscal 2023 appears below in the section titled “Fiscal 2024
Consolidated Results of Operations.” A detailed review of our fiscal 2023 performance compared to our fiscal 2022 performance is set
forth in Part II, Item 7 of our Form 10-K for the fiscal year ended May 28, 2023 under the caption “Management’s Discussion and
Analysis of Financial Condition and Results of Operations – Fiscal 2023 Results of Consolidated Operations,” which is incorporated
herein by reference.
In fiscal 2025, we plan to continue advancing our Accelerate strategy. Our key priorities are to accelerate our organic net sales growth,
create fuel for investment, and drive strong cash generation. Amid a continued uncertain macroeconomic backdrop for consumers, we
expect volume trends in our categories will gradually improve over the course of the year, though full-year category dollar growth is
expected to be below our long-term growth projections. We expect to increase our organic net sales growth by delivering remarkable
experiences across our leading food brands, resulting in improved household penetration and stronger market share trends versus the
prior year. Our fiscal 2025 plan calls for product news and innovation focused on taste, health, convenience, and value, supported with
strong brand campaigns and omnichannel visibility. We expect to generate HMM cost savings of roughly 4 to 5 percent of cost of
goods sold, which we expect to exceed our forecast for 3 to 4 percent input cost inflation in fiscal 2025. We expect to reinvest in the
business, including plans for increased brand-building investment in fiscal 2025 to drive improved volume performance.
Based on these assumptions, our key full-year fiscal 2025 targets are summarized below:
●
Organic net sales are expected to range between flat and up 1 percent.
●
Adjusted operating profit is expected to range between down 2 percent and flat in constant-currency from the base of $3,603
million reported in fiscal 2024.
●
Adjusted diluted EPS is expected to range between down 1 percent and up 1 percent in constant-currency from the base of
$4.52 earned in fiscal 2024.
●
Free cash flow conversion is expected to be at least 95 percent of adjusted after-tax earnings.
See the “Non-GAAP Measures” section below for a description of our use of measures not defined by GAAP.
Certain terms used throughout this report are defined in a glossary in Item 8 of this report.
FISCAL 2024 CONSOLIDATED RESULTS OF OPERATIONS
In fiscal 2024, net sales and organic net sales decreased 1 percent compared to fiscal 2023. Operating profit of $3,432 million
essentially matched fiscal 2023, primarily driven by a net gain on divestitures in fiscal 2023, higher impairment and restructuring
charges, a decrease in contributions from volume growth, and higher input costs, partially offset by favorable net price realization and
mix, a favorable change in the mark-to-market valuation of certain commodity positions and grain inventories, and lower selling,
general, and administrative (SG&A) expenses, including a decrease in certain compensation and benefits expenses. Operating profit
margin of 17.3 percent increased 20 basis points. Adjusted operating profit of $3,603 million increased 4 percent on a constant-
currency basis, primarily driven by favorable net price realization and mix and a decrease in SG&A expenses, including certain
compensation and benefits expenses, partially offset by a decrease in contributions from volume growth and higher input costs.
Adjusted operating profit margin increased 90 basis points to 18.1 percent. Diluted earnings per share of $4.31 matched fiscal 2023.
Adjusted diluted earnings per share of $4.52 increased 6 percent on a constant -currency basis (see the “Non-GAAP Measures” section
below for a description of our use of measures not defined by GAAP).
A summary of our consolidated financial results for fiscal 2024 follows:
Fiscal 2024
In millions,
except per
share
Fiscal 2024 vs.
Fiscal 2023
Percent of Net
Sales
Constant-
Currency
Growth (a)
Net sales
$
19,857.2
(1)
%
Operating profit
3,431.7
Flat
17.3
%
Net earnings attributable to General Mills
2,496.6
(4)
%
Diluted earnings per share
$
4.31
Flat
Organic net sales growth rate (a)
(1)
%
Adjusted operating profit (a)
3,602.7
4
%
18.1
%
4
%
Adjusted diluted earnings per share (a)
$
4.52
5
%
6
%
(a) See the “Non-GAAP Measures” section below for our use of measures not defined by GAAP.
18
Consolidated
were as follows:
Fiscal 2024
Fiscal 2024 vs.
Fiscal 2023
Fiscal 2023
Net sales (in millions)
$
19,857.2
(1)
%
$
20,094.2
Contributions from volume growth (a)
(3)
pts
Net price realization and mix
2
pts
Foreign currency exchange
Flat
Note: Table may not foot due to rounding
(a) Measured in tons based on the stated weight of our product shipments.
Net sales in fiscal 2024 decreased 1 percent compared to fiscal 2023, driven by a decrease in contributions from volume growth,
partially offset by favorable net price realization and mix.
Components of organic net sales growth are shown in the following table:
Fiscal 2024 vs. Fiscal 2023
Contributions from organic volume growth (a)
(3)
pts
Organic net price realization and mix
2
pts
Organic net sales growth
(1)
pt
Foreign currency exchange
Flat
Acquisitions and divestitures
Flat
Net sales growth
(1)
pt
Note: Table may not foot due to rounding
(a) Measured in tons based on the stated weight of our product shipments.
Organic net sales in fiscal 2024 decreased 1 percent compared to fiscal 2023, driven by a decrease in contributions from organic
volume growth, partially offset by favorable organic net price realization and mix.
Cost of sales
decreased $623 million in fiscal 2024 to $12,925 million. The decrease was primarily driven by a $360 million decrease
due to lower volume, partially offset by an $80 million increase attributable to product rate and mix. We recorded a $39 million net
decrease in cost of sales related to mark-to-market valuation of certain commodity positions and grain inventories in fiscal 2024,
compared to a net increase of $292 million in fiscal 2023 (please see Note 8 to the Consolidated Financial Statements in Item 8 of this
report for additional information). In fiscal 2023, we recorded a $25 million charge related to a voluntary recall on certain
international
Häagen-Dazs
ice cream products. We also recorded $18 million of restructuring charges and $2 million of restructuring
initiative project-related costs in cost of sales in fiscal 2024 compared to $5 million of restructuring charges and $2 million of
restructuring initiative project-related costs in cost of sales in fiscal 2023 (please see Note 4 to the Consolidated Financial Statements
in Item 8 of this report for additional information).
Gross margin
increased 6 percent in fiscal 2024 compared to fiscal 2023. Gross margin as a percent of net sales of 34.9 percent
increased 230 basis points compared to fiscal 2023.
SG&A expenses
certain compensation and benefits expenses, favorable net corporate investment activity, a legal recovery, and net recoveries from the
fiscal 2023 voluntary recall on certain international
Häagen-Dazs
ice cream products. SG&A expenses as a percent of net sales in
fiscal 2024 decreased 100 basis points compared to fiscal 2023.
Divestitures gain, net
primarily related to the sale of our Helper main meals and Suddenly Salad
side dishes business (please refer to Note 3 to the Consolidated Financial Statements in Item 8 of this report).
Restructuring, impairment, and other exit costs
totaled $241 million in fiscal 2024 compared to $56 million in fiscal 2023. In fiscal
2024, we recorded a $117 million non-cash goodwill impairment charge related to our Latin America reporting unit and $103 million
of non-cash impairment charges related to our
Top Chews
,
True Chews
, and
EPIC
restructuring actions to enhance the go-to-market commercial strategy and associated organizational structure of our Pet segment, and
as a result, we recorded $17 million of charges in fiscal 2024. In fiscal 2023, we approved restructuring actions to enhance the
efficiency of our global supply chain structure and to optimize our Häagen-Dazs shops network, and as a result, we recorded $41
million of charges in fiscal 2023. Please see Note 4 to the Consolidated Financial Statements in Item 8 of this report for additional
information.
19
Benefit plan non-service income
totaled $76 million in fiscal 2024 compared to $89 million in fiscal 2023, primarily reflecting
higher interest costs, partially offset by lower amortization of losses (please see Note 14 to the Consolidated Financial Statements in
Item 8 of this report for additional information).
Interest, net
for fiscal 2024 totaled $479 million, $97 million higher than fiscal 2023, primarily driven by higher interest rates and
higher average long-term debt levels.
Our
effective tax rate
for fiscal 2024 was 19.6 percent compared to 19.5 percent in fiscal 2023. The 0.1 percentage point increase was
primarily driven by certain nonrecurring tax benefits in fiscal 2023, partially offset by favorable earnings mix by jurisdiction in fiscal
2024. Our adjusted effective tax rate was 20.1 percent in fiscal 2024 compared to 20.4 percent in fiscal 2023 (see the “Non-GAAP
Measures” section below for a description of our use of measures not defined by GAAP). The 0.3 percentage point decrease was
primarily due to favorable earnings mix by jurisdiction in fiscal 2024.
After-tax earnings from joint ventures
increased to $85 million in fiscal 2024 compared to $81 million in fiscal 2023, primarily
driven by higher net sales due to favorable net price realization and mix at CPW, partially offset by higher input costs at CPW and
HDJ. On a constant-currency basis, after-tax earnings from joint ventures increased 14 percent (see the “Non-GAAP Measures”
section below for a description of our use of measures not defined by GAAP). The components of our joint ventures’ net sales growth
are shown in the following table:
Fiscal 2024 vs. Fiscal 2023
CPW
HDJ
Total
Contributions from volume growth (a)
(7)
pts
(6)
pts
Net price realization and mix
15
pts
8
pts
Net sales growth in constant currency
8
pts
1
pt
7
pts
Foreign currency exchange
(2)
pts
(7)
pts
(3)
pts
Net sales growth
6
pts
(6)
pts
4
pts
Note: Table may not foot due to rounding.
(a) Measured in tons based on the stated weight of our product shipments.
Net earnings attributable to redeemable and noncontrolling interests
million in fiscal 2023.
Average diluted shares outstanding
decreased by 22 million in fiscal 2024 from fiscal 2023 primarily due to share repurchase s.
RESULTS OF SEGMENT OPERATIONS
Our businesses are organized into four operating segments: North America Retail, International, Pet, and North America Foodservice .
The following tables provide the dollar amount and percentage of net sales and operating profit from each segment for fiscal 2024 and
fiscal 2023:
Fiscal Year
2024
2023
In Millions
Dollars
Percent of Total
Dollars
Percent of Total
Net Sales
North America Retail
$
12,473.4
63
%
$
12,659.9
63
%
International
2,746.5
14
2,769.5
14
Pet
2,375.8
12
2,473.3
12
North America Foodservice
2,258.7
11
2,191.5
11
Total
$
19,854.4
100
%
$
20,094.2
100
%
Segment Operating Profit
North America Retail
$
3,080.4
77
%
$
3,181.3
78
%
International
125.2
3
161.8
4
Pet
485.9
12
445.5
11
North America Foodservice
315.5
8
290.0
7
Total
$
4,007.0
100
%
$
4,078.6
100
%
20
Segment operating profit as reviewed by our executive management excludes unallocated corporate items, net gain or loss on
divestitures, and restructuring, impairment, and other exit costs that are centrally managed.
NORTH AMERICA RETAIL SEGMENT
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 are ready-to-eat cereals, refrigerated yogurt, soup, meal kits, refrigerated and frozen dough
products, dessert and baking mixes, frozen pizza and pizza snacks, snack bars, fruit snacks, savory snacks, and a wide variety of
organic products including ready-to-eat cereal, frozen and shelf-stable vegetables, meal kits, fruit snacks and snack bars.
North America Retail net sales were as follows:
Fiscal 2024
Fiscal 2024 vs. 2023
Percentage Change
Fiscal 2023
Net sales (in millions)
$
12,473.4
(1)
%
$
12,659.9
Contributions from volume growth (a)
(5)
pts
Net price realization and mix
3
pts
Foreign currency exchange
Flat
Note: Table may not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
The 1 percent decrease in North America Retail net sales for fiscal 2024 was driven by a decrease in contributions from volume
growth, partially offset by favorable net price realization and mix.
The components of North America Retail organic net sales growth are shown in the following table:
Fiscal 2024 vs. 2023
Percentage Change
Contributions from organic volume growth (a)
(4)
pts
Organic net price realization and mix
3
pts
Organic net sales growth
(1)
pt
Foreign currency exchange
Flat
Net sales growth
(1)
pt
Note: Table may not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
North America Retail organic net sales decreased 1 percent in fiscal 2024 compared to fiscal 2023, driven by a decrease in
contributions from organic volume growth, partially offset by an increase in organic net price realization and mix.
Net sales for our North America Retail operating units are shown in the following table:
In Millions
Fiscal 2024
Fiscal 2024 vs. 2023
Percentage Change
Fiscal 2023
U.S. Meals & Baking Solutions
$
4,324.3
(2)
%
$
4,426.3
U.S. Morning Foods
3,561.8
(2)
%
3,620.1
U.S. Snacks
3,538.9
(2)
%
3,611.0
Canada (a)
1,048.4
5
%
1,002.5
Total
$
12,473.4
(1)
%
$
12,659.9
(a)
On a constant currency basis, Canada operating unit net sales increased 6 percent in fiscal 2024. See the “Non-GAAP Measures”
section below for our use of this measure not defined by GAAP.
Segment operating profit decreased 3 percent to $3,080 million in fiscal 2024 compared to $3,181 million in fiscal 2023, primarily
driven by higher input costs, a decrease in contributions from volume growth, and an increase in SG&A expenses, partially offset by
favorable net price realization and mix. Segment operating profit decreased 3 percent on a constant-currency basis in fiscal 2024
compared to fiscal 2023 (see the “Non-GAAP Measures” section below for our use of this measure not defined by GAAP).
21
INTERNATIONAL SEGMENT
Our International operating segment reflects 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, shelf-
stable vegetables, and pet food products. 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.
International net sales were as follows:
Fiscal 2024
Fiscal 2024 vs. 2023
Percentage Change
Fiscal 2023
Net sales (in millions)
$
2,746.5
(1)
%
$
2,769.5
Contributions from volume growth (a)
(3)
pts
Net price realization and mix
1
pt
Foreign currency exchange
1
pt
Note: Table may not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
The 1 percent decrease in International net sales in fiscal 2024 was driven by a decrease in contributions from volume growth,
partially offset by favorable net price realization and mix and favorable foreign currency exchange.
The components of International organic net sales growth are shown in the following table:
Fiscal 2024 vs. 2023
Percentage Change
Contributions from organic volume growth (a)
(3)
pts
Organic net price realization and mix
1
pt
Organic net sales growth
(2)
pts
Foreign currency exchange
1
pt
Net sales growth
(1)
pt
Note: Table may not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
The 2 percent decrease in International organic net sales growth in fiscal 2024 compared to fiscal 2023 was driven by a decrease in
contributions from organic volume growth, partially offset by favorable organic net price realization and mix.
Segment operating profit decreased 23 percent to $125 million in fiscal 2024 compared to $162 million in 2023, primarily driven by
higher input costs and a decrease in contributions from volume growth , partially offset by favorable net price realization and mix, the
voluntary recall on certain international
Häagen-Dazs
operating profit decreased 20 percent on a constant-currency basis in fiscal 2024 compared to fiscal 2023 (see the “Non-GAAP
Measures” section below for our use of this measure not defined by GAAP).
PET SEGMENT
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, and 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.
22
Pet net sales were as follows:
Fiscal 2024
Fiscal 2024 vs. 2023
Percentage Change
Fiscal 2023
Net sales (in millions)
$
2,375.8
(4)
%
$
2,473.3
Contributions from volume growth (a)
(7)
pts
Net price realization and mix
3
pts
Foreign currency exchange
Flat
Note: Table may not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
Pet net sales decreased 4 percent in fiscal 2024 compared to fiscal 2023, driven by a decrease in contributions from volume growth,
partially offset by favorable net price realization and mix.
The components of Pet organic net sales growth are shown in the following table:
Fiscal 2024 vs. 2023
Percentage Change
Contributions from organic volume growth (a)
(7)
pts
Organic net price realization and mix
3
pts
Organic net sales growth
(4)
pts
Foreign currency exchange
Flat
Net sales growth
(4)
pts
Note: Table may not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
The 4 percent decrease in Pet organic net sales growth in fiscal 2024 was driven by a decrease in contributions from organic volume
growth, partially offset by favorable organic net price realization and mix.
Pet operating profit increased 9 percent to $486 million in fiscal 2024, compared to $446 million in fiscal 2023, primarily driven by
favorable net price realization and mix and lower input costs, partially offset by a decrease in contributions from volume growth and
an increase in SG&A expenses. Segment operating profit increased 9 percent on a constant-currency basis in fiscal 2024 compared to
fiscal 2023 (see the “Non-GAAP Measures” section below for our use of this measure not defined by GAAP).
NORTH AMERICA FOODSERVICE SEGMENT
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.
North America Foodservice net sales were as follows:
Fiscal 2024
Fiscal 2024 vs. 2023
Percentage Change
Fiscal 2023
Net sales (in millions)
$
2,258.7
3
%
$
2,191.5
Contributions from volume growth (a)
2
pts
Net price realization and mix
1
pt
Foreign currency exchange
Flat
Note: Table may not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
North America Foodservice net sales increased 3 percent in fiscal 2024, driven by an increase in contributions from volume growth
and favorable net price realization and mix.
23
The components of North America Foodservice organic net sales growth are shown in the following table:
Fiscal 2024 vs. 2023
Percentage Change
Contributions from organic volume growth (a)
2
pts
Organic net price realization and mix
1
pt
Organic net sales growth
2
pts
Foreign currency exchange
Flat
Acquisition (b)
1
pt
Net sales growth
3
pts
Note: Table may not foot due to rounding.
(a)
Measured in tons based on the standard weight of our product shipments.
(b)
Acquisition of TNT Crust in fiscal 2023. Please see Note 3 to the Consolidated Financial Statements in Part II, Item 8 of this
report.
The 2 percent increase in North America Foodservice organic net sales growth in fiscal 2024 was driven by an increase in
contributions from organic volume growth and favorable organic net price realization and mix.
Segment operating profit increased 9 percent to $316 million in fiscal 2024, compared to $290 million in fiscal 2023, primarily driven
by favorable net price realization and mix and an increase in contributions from volume growth , partially offset by higher input costs
and an increase in SG&A expenses. Segment operating profit increased 9 percent on a constant-currency basis in fiscal 2024
compared to fiscal 2023 (see the “Non-GAAP Measures” section below for our use of this measure not defined by GAAP).
UNALLOCATED CORPORATE ITEMS
Unallocated corporate items include corporate overhead expenses, variances to planned domestic employee benefits and incentives,
certain charitable contributions, restructuring initiative project-related costs, gains and losses on corporate investments, results from
certain businesses managed by our Gold Medal Ventures entity, 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.
Unallocated corporate expense totaled $334 million in fiscal 2024, compared to $1,033 million last year. We recorded a $39 million
net decrease in expense related to the mark-to-market valuation of certain commodity positions and grain inventories in fiscal 2024,
compared to a $292 million net increase in expense last year. In fiscal 2024, certain compensation and benefits expenses and
charitable contributions decreased compared to fiscal 2023. We recorded $18 million of net losses related to valuation adjustments and
the sale of corporate investments in fiscal 2024, compared to $84 million of net losses in fiscal 2023. In fiscal 2024, we recorded $30
million of net recoveries related to a voluntary recall on certain international
Häagen-Dazs
compared to a $22 million charge in fiscal 2023. We recorded a $53 million legal recovery in fiscal 2024. In fiscal 2024, we recorded
$14 million of transaction costs, primarily related to our acquisition of a pet food business in Europe. We recorded $6 million of
integration costs primarily related to our acquisition of TNT Crust in fiscal 2023. In addition, we recorded $18 million of restructuring
charges and $2 million of restructuring initiative project-related costs in cost of sales in fiscal 2024, compared to $5 million of
restructuring charges and $2 million of restructuring initiative project-related costs in cost of sales in fiscal 2023.
IMPACT OF INFLATION
We experienced broad-based global input cost inflation of 4 percent in fiscal 2024 and 13 percent in fiscal 2023. We expect
approximately 3 to 4 percent input cost inflation in fiscal 2025. We attempt to minimize the effects of inflation through HMM,
Strategic Revenue Management (SRM), planning, and operating practices. Our market risk management practices are discussed in
Item 7A of this report.
LIQUIDITY AND CAPITAL RESOURCES
The primary source of our liquidity is cash flow from operations. Over the most recent two-year period, our operations have generated
$6.1 billion in cash. A substantial portion of this operating cash flow has been returned to shareholders through dividends and share
repurchases. We also use cash from operations to fund our capital expenditures, acquisitions, and debt service. We typically use a
24
combination of cash, notes payable, and long-term debt, and occasionally issue shares of common stock, to finance significant
acquisitions.
As of May 26, 2024, we had $330 million of cash and cash equivalents held in foreign jurisdictions. In anticipation of repatriating
funds from foreign jurisdictions, we record local country withholding taxes on our international earnings, as applicable. We may
repatriate our cash and cash equivalents held by our foreign subsidiaries without such funds being subject to further U.S. income tax
liability. Earnings prior to fiscal 2018 from our foreign subsidiaries remain permanently reinvested in those jurisdictions.
Cash Flows from Operations
Fiscal Year
In Millions
2024
2023
Net earnings, including earnings attributable to redeemable and noncontrolling interests
$
2,518.6
$
2,609.6
Depreciation and amortization
552.7
546.6
After-tax earnings from joint ventures
(84.8)
(81.3)
Distributions of earnings from joint ventures
50.4
69.9
Stock-based compensation
95.3
111.7
Deferred income taxes
(48.5)
(22.2)
Pension and other postretirement benefit plan contributions
(30.1)
(30.1)
Pension and other postretirement benefit plan costs
(27.0)
(27.6)
Divestitures gain, net
-
(444.6)
Restructuring, impairment, and other exit costs
223.5
24.4
Changes in current assets and liabilities, excluding the effects of acquisitions and divestitures
10.6
(48.9)
Other, net
41.9
71.1
Net cash provided by operating activities
$
3,302.6
$
2,778.6
During fiscal 2024, cash provided by operations was $3,303 million compared to $2,779 million in the same period last year. The
$524 million increase was primarily driven by a $354 million increase in net earnings, excluding the $445 million net divestitures gain
in fiscal 2023 and a $199 million change in restructuring, impairment, and other exit costs.
We strive to grow core working capital at or below the rate of growth in our net sales. For fiscal 2024, core working capital net
liability increased 16 percent, compared to a net sales increase of 1 percent. The core working capital net liability increased $54
million from a net liability of $339 million in fiscal 2023 to a net liability of $393 million in fiscal 2024. The $54 million net liability
increase was primarily due to a decrease in inventory, partially offset by a decrease in accounts payable in fiscal 2024.
Cash Flows from Investing Activities
Fiscal Year
In Millions
2024
2023
Purchases of land, buildings, and equipment
$
(774.1)
$
(689.5)
Acquisitions, net of cash acquired
(451.9)
(251.5)
Investments in affiliates, net
(2.7)
(32.2)
Proceeds from disposal of land, buildings, and equipment
0.8
1.3
Proceeds from divestitures, net of cash divested
-
633.1
Other, net
30.5
(7.6)
Net cash used by investing activities
$
(1,197.4)
$
(346.4)
In fiscal 2024, we used $1,197 million of cash through investing activities compared to $346 million in fiscal 2023. We invested
$774 million in land, buildings, and equipment in fiscal 2024, an increase of $85 million from fiscal 2023.
During fiscal 2024, we acquired a pet food business in Europe for $426 million cash, net of cash acquired. We expect to pay an
additional amount of approximately $8 million related to a holdback in the first quarter of fiscal 2025, contingent upon certain closing
requirements. During fiscal 2023, we acquired TNT Crust for $252 million cash, net of cash acquired. During fiscal 2023, we
completed the sale of our Helper main meals and Suddenly Salad side dishes business es for cash proceeds of $607 million.
We expect capital expenditures to be approximately 3.5 percent of reported net sales in fiscal 2025. These expenditures will fund
initiatives that are expected to fuel growth, support innovative products, and continue HMM initiatives throughout the supply chain.
25
Cash Flows from Financing Activities
Fiscal Year
In Millions
2024
2023
Change in notes payable
$
(20.5)
$
(769.3)
Issuance of long-term debt
2,065.2
2,324.4
Payment of long-term debt
(901.5)
(1,421.7)
Proceeds from common stock issued on exercised options
25.5
232.3
Purchases of common stock for treasury
(2,002.4)
(1,403.6)
Dividends paid
(1,363.4)
(1,287.9)
Distributions to noncontrolling and redeemable interest holders
(21.3)
(15.7)
Other, net
(53.9)
(62.6)
Net cash used by financing activities
$
(2,272.3)
$
(2,404.1)
Financing activities used $2.3 billion of cash in fiscal 2024 compared to $2.4 billion in fiscal 2023. We had $1,143 million of net debt
issuances in fiscal 202 4 compared to $133 million of net debt issuances in fiscal 2023. For more information on our debt issuances
and payments, please refer to Note 9 to the Consolidated Financial Statements in Item 8 of this report.
During fiscal 2024, we received $26 million of net proceeds from common stock issued on exercised options compared to
$232 million in fiscal 2023.
During fiscal 2024, we repurchased 29 million shares of our common stock for $2,002 million. During fiscal 2023, we repurchased 18
million shares of our common stock for $1,404 million.
Dividends paid in fiscal 2024 totaled $1,363 million, or $2.36 per share. Dividends paid in fiscal 2023 totaled $1,288 million, or $2.16
per share.
Selected Cash Flows from Joint Ventures
Selected cash flows from our joint ventures are set forth in the following table:
Fiscal Year
Inflow (Outflow), in Millions
2024
2023
Investments in affiliates, net
$
(2.7)
$
(32.2)
Dividends received
50.4
69.9
The following table details the fee-paid committed and uncommitted credit lines we had available as of May 26, 2024:
In Billions
Facility Amount
Borrowed Amount
Committed credit facility expiring April 2026
$
2.7
$
-
Uncommitted credit facilities
0.7
-
Total committed and uncommitted credit facilities
$
3.4
$
-
To ensure availability of funds, we maintain bank credit lines and have commercial paper programs available to us in the United States
and Europe.
We have material contractual obligations that arise in the normal course of business and we believe that cash flows from operations
will be adequate to meet our liquidity and capital needs for at least the next 12 months.
Certain of our long-term debt agreements, our credit facilities, and our noncontrolling interests contain restrictive covenants. As of
May 26, 2024, we were in compliance with all of these covenants.
We have $1,614 million of long-term debt maturing in the next 12 months that is classified as current, including $800 million of 4.0
percent fixed-rate notes due April 17, 2025, and €750 million of floating-rate notes due November 8, 2024. We believe that cash flows
26
from operations, together with available short- and long-term debt financing, will be adequate to meet our liquidity and capital needs
for at least the next 12 months.
As of May 26, 2024, our total debt, including the impact of derivative instruments designated as hedges, was 85 percent in fixed-rate
and 15 percent in floating-rate instruments, compared to 80 percent in fixed-rate and 20 percent in floating-rate instruments on May
28, 2023.
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 $252 million). The floating preferred return rate on GMC’s Class A Interests was
the sum of three-month Term SOFR plus 186 basis points. On June 1, 2024, the floating preferred return rate on GMC’s Class A
Interests was reset to the sum of the three-month Term SOFR plus 261 basis points. The preferred return rate is adjusted every three
years through a negotiated agreement with the Class A Interests holder or through a remarketing auction.
We have an option to purchase the Class A Interests for consideration equal to the then current capital account value, plus any unpaid
preferred return and the prescribed make-whole amount. If we purchase these interests, any change in the third-party holder’s capital
account from its original value will be charged directly to retained earnings and will increase or decrease the net earnings used to
calculate EPS in that period.
CRITICAL ACCOUNTING ESTIMATES
For a complete description of our significant accounting policies, please see Note 2 to the Consolidated Financial Statements in Item 8
of this report. Our critical accounting estimates are those that have a meaningful impact on the reporting of our financial condition and
results of operations. These estimates include our accounting for revenue recognition, valuation of long-lived assets, intangible assets,
income taxes, and defined benefit pension, other postretirement benefit, and postemployment benefit plans.
Revenue Recognition
Our revenues are reported net of variable consideration and consideration payable to our customers, including trade promotion,
consumer coupon redemption, and other reductions to the transaction price, including estimated allowances for returns, unsalable
product, and prompt pay discounts. Trade promotions are recorded using significant judgment of estimated participation and
performance levels for offered programs at the time of sale. Differences between the estimated and actual reduction to the transaction
price are recognized as a change in estimate in a subsequent period. Our accrued trade and coupon promotion liabilities were $425
million as of May 26, 2024, and $394 million as of May 28, 2023. Because these amounts are significant, if our estimates are
inaccurate we would have to make adjustments in subsequent periods that could have a significant effect on our results of operations.
Valuation of Long-Lived Assets
We estimate the useful lives of long -lived assets and make estimates concerning undiscounted cash flows to review for impairment
whenever events or changes in circumstances indicate that the carrying amount of an asset (or asset group) may not be recoverable.
Fair value is measured using discounted cash flows or independent appraisals, as appropriate.
Intangible Assets
Goodwill and other indefinite-lived intangible assets are not subject to amortization and are tested for impairment annually and
whenever events or changes in circumstances indicate that impairment may have occurred. Our estimates of fair value for goodwill
impairment testing are determined based on a discounted cash flow model. We use inputs from our long-range planning process to
determine growth rates for sales and profits. We also make estimates of discount rates, perpetuity growth assumptions, market
comparables, and other factors.
We evaluate the useful lives of our other intangible assets, mainly brands, to determine if they are finite or indefinite-lived. Reaching a
determination on useful life requires significant judgments and assumptions regarding the future effects of obsolescence, demand,
competition, other economic factors (such as the stability of the industry, known technological advances, legislative action that results
in an uncertain or changing regulatory environment, and expected changes in distribution channels), the level of required maintenance
expenditures, and the expected lives of other related groups of assets. Intangible assets that are deemed to have finite lives are
amortized on a straight-line basis over their useful lives, generally ranging from 4 to 30 years. Our estimate of the fair value of our
brand assets is based on a discounted cash flow model using inputs which include projected revenues from our long-range plan,
assumed royalty rates that could be payable if we did not own the brands, and a discount rate.
27
As of May 26, 2024, we had $22 billion of goodwill and indefinite-lived intangible assets. While we currently believe that the fair
value of each intangible exceeds its carrying value, and that those intangibles will contribute indefinitely to our cash flows, materially
different assumptions regarding future performance of our businesses or a different weighted-average cost of capital could result in
material impairment losses and amortization expense. We performed our fiscal 2024 assessment of our intangible assets as of the first
day of the second quarter of fiscal 2024. As a result of lower future profitability projections for our Latin America reporting unit, we
determined that the fair value of the reporting unit was less than its book value and recorded a $117 million non-cash goodwill
impairment charge. In addition, during the fourth quarter of fiscal 2024, we executed our fiscal 2025 planning process and preliminary
long-range planning process, which resulted in lower future sales and profitability projections for the businesses supporting our
Top
Chews
,
True Chews,
EPIC
assessment of these assets as of May 26, 2024, and determined that the fair value of these brand intangible assets no longer exceeded
the carrying values of the respective assets, resulting in $103 million of non-cash impairment charges. We recorded impairment
charges in restructuring, impairment, and other exit costs in our Consolidated Statements of Earnings. Our estimates of the fair values
were determined based on a discounted cash flow model using inputs which included our long-range cash flow projections for the
businesses, royalty rates, weighted-average cost of capital rates, and tax rates. These fair value s are Level 3 assets in the fair value
hierarchy.
All other intangible asset 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 2024 assessment date, the
Progresso
,
Nudges
,
brand intangible assets had risk of decreasing coverage. We will continue to monitor applicable businesses for potential impairment .
Income Taxes
We apply a more-likely-than-not threshold to the recognition and derecognition of uncertain tax positions. Accordingly, we recognize
the amount of tax benefit that has a greater than 50 percent likelihood of being ultimately realized upon settlement. Future changes in
judgment related to the expected ultimate resolution of uncertain tax positions will affect earnings in the period of such change. For
more information on income taxes, please see Note 15 to the Consolidated Financial Statements in Item 8 of this report.
Defined Benefit Pension, Other Postretirement Benefit, and Postemployment Benefit Plans
We have defined benefit pension plans covering many employees in the United States, Canada, Switzerland, and the United Kingdom.
We also sponsor plans that provide health care benefits to many of our retirees in the United States, Canada, and Brazil. Under certain
circumstances, we also provide accruable benefits, primarily severance, to former and inactive employees in the United States,
Canada, and Mexico. Please see Note 14 to the Consolidated Financial Statements in Item 8 of this report for a description of our
defined benefit pension, other postretirement benefit, and postemployment benefit plans.
We recognize benefits provided during retirement or following employment over the plan participants’ active working lives.
Accordingly, we make various assumptions to predict and measure costs and obligations many years prior to the settlement of our
obligations. Assumptions that require significant management judgment and have a material impact on the measurement of our net
periodic benefit expense or income and accumulated benefit obligations include the long-term rates of return on plan assets, the
interest rates used to discount the obligations for our benefit plans, and health care cost trend rates.
Expected Rate of Return on Plan Assets
Our expected rate of return on plan assets is determined by our asset allocation, our historical long-term investment performance, our
estimate of future long-term returns by asset class (using input from our actuaries, investment services, and investment managers), and
long-term inflation assumptions. We review this assumption annually for each plan; however, our annual investment performance for
one particular year does not, by itself, significantly influence our evaluation.
Our historical investment returns (compound annual growth rates) for our United States defined benefit pension and other
postretirement benefit plan assets were 0.6 percent in the 1-year period ended May 26, 2024, and returns of 2.3 percent, 4.5 percent,
7.5 percent, and 6.8 percent for the 5, 10, 15, and 20-year periods ended May 26, 2024.
On a weighted-average basis, the expected rate of return for all defined benefit plans was 7.13 percent for fiscal 2024, 6.70 percent for
fiscal 2023, and 5.85 percent for fiscal 2022. For fiscal 2025, we increased our weighted-average expected rate of return on plan assets
for our principal defined benefit pension and other postretirement plans in the United States to 7.70 percent due to higher prospective
long-term asset returns primarily on fixed income investments.
Lowering the expected long-term rate of return on assets by 100 basis points would increase our net pension and postretirement
expense by $58 million for fiscal 2025. A market-related valuation basis is used to reduce year-to-year expense volatility. The market-
related valuation recognizes certain investment gains or losses over a five-year period from the year in which they occur. Investment
gains or losses for this purpose are the difference between the expected return calculated using the market-related value of assets and
the actual return based on the market-related value of assets. Our outside actuaries perform these calculations as part of our
determination of annual expense or income.
28
Discount Rates
We estimate the service and interest cost components of the net periodic benefit expense for our United States and most of our
international defined benefit pension, other postretirement benefit, and postemployment benefit plans utilizing a full yield curve
approach by applying the specific spot rates along the yield curve used to determine the benefit obligation to the relevant projected
cash flows. Our discount rate assumptions are determined annually as of May 31 for our defined benefit pension, other postretirement
benefit, and postemployment benefit plan obligations. We work with our outside actuaries to determine the timing and amount of
expected future cash outflows to plan participants and, using the Aa Above Median corporate bond yield, to develop a forward interest
rate curve, including a margin to that index based on our credit risk. This forward interest rate curve is applied to our expected future
cash outflows to determine our discount rate assumptions.
Our weighted-average discount rates were as follows:
Defined Benefit
Pension Plans
Other
Postretirement
Benefit Plans
Postemployment
Benefit Plans
Effective rate for fiscal 2025 service costs
5.58
%
5.48
%
5.37
%
Effective rate for fiscal 2025 interest costs
5.40
%
5.28
%
5.05
%
Obligations as of May 31, 2024
5.52
%
5.52
%
5.05
%
Effective rate for fiscal 2024 service costs
5.27
%
5.15
%
5.00
%
Effective rate for fiscal 2024 interest costs
5.06
%
4.96
%
4.61
%
Obligations as of May 31, 2023
5.18
%
5.19
%
4.55
%
Effective rate for fiscal 2023 service costs
4.57
%
4.41
%
3.69
%
Effective rate for fiscal 2023 interest costs
4.03
%
3.80
%
3.35
%
Lowering the discount rates by 100 basis points would increase our net defined benefit pension, other postretirement benefit, and
postemployment benefit plan expense for fiscal 2025 by approximately $29 million. All obligation-related experience gains and losses
are amortized using a straight-line method over the average remaining service period of active plan participants or over the average
remaining lifetime of the remaining plan participants if the plan is viewed as “all or almost all” inactive participants.
Health Care Cost Trend Rates
We review our health care cost trend rates annually. Our review is based on data we collect about our health care claims experience
and information provided by our actuaries. This information includes recent plan experience, plan design, overall industry experience
and projections, and assumptions used by other similar organizations. Our initial health care cost trend rate is adjusted as necessary to
remain consistent with this review, recent experiences, and short-term expectations. Our initial health care cost trend rate assumption
is 7.3 percent for retirees age 65 and over and 7.3 percent for retirees under age 65 at the end of fiscal 2024. Rates are graded down
annually until the ultimate trend rate of 4.5 percent is reached in 2033 for all retirees. The trend rates are applicable for calculations
only if the retirees’ benefits increase as a result of health care inflation. The ultimate trend rate is adjusted annually, as necessary, to
approximate the current economic view on the rate of long-term inflation plus an appropriate health care cost premium. Assumed
trend rates for health care costs have an important effect on the amounts reported for the other postretirement benefit plans.
Any arising health care claims cost-related experience gain or loss is recognized in the calculation of expected future claims. Once
recognized, experience gains and losses are amortized using a straight-line method over the average remaining service period of active
plan participants or over the average remaining lifetime of the remaining plan participants if the plan is viewed as “all or almost all”
inactive participants.
Financial Statement Impact
In fiscal 2024, we recorded net defined benefit pension, other postretirement benefit, and postemployment benefit plan income of
$11 million compared to $6 million of income in fiscal 2023 and $26 million of income in fiscal 2022. As of May 26, 2024, we had
cumulative unrecognized actuarial net losses of $2 billion on our defined benefit pension plans and cumulative unrecognized actuarial
net gains of $185 million on our postretirement and postemployment benefit plans. These net unrecognized actuarial losses will result
in increases in our future net pension and postretirement benefit expenses because they currently exceed the corridors defined by
GAAP.
Actual future net defined benefit pension, other postretirement benefit, and postemployment benefit plan income or expense will
depend on investment performance, changes in future discount rates, changes in health care cost trend rates, and other factors related
to the populations participating in these plans.
29
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In March 2024, the SEC issued final rules on the enhancement and standardization of climate-related disclosures. The rules require
disclosure of, among other things: material climate-related risks; activities to mitigate or adapt to such risks; governance and
management of such risks; and material greenhouse gas (GHG) emissions from operations owned or controlled (Scope 1) and/or
indirect emissions from purchased energy consumed in operations (Scope 2). Additionally, the rules require disclosure in the notes to
the financial statements of the effects of severe weather events and other natural conditions, subject to certain materiality thresholds.
The SEC has issued a stay on the final rules due to litigation and the effective date is delayed indefinitely. We are in the process of
analyzing the impact of the rules on our disclosures.
In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09 requiring
enhanced income tax disclosures. The ASU requires disclosure of specific categories and disaggregation of information in the rate
reconciliation table. The ASU also requires disclosure of disaggregated information related to income taxes paid, income or loss from
continuing operations before income tax expense or benefit, and income tax expense or benefit from continuing operations. The
requirements of the ASU are effective for annual periods beginning after December 15, 2024, which for us is fiscal 2026. Early
adoption is permitted and the amendments should be applied on a prospective basis. Retrospective application is permitted. We are in
the process of analyzing the impact of the ASU on our related disclosures.
In November 2023, the FASB issued ASU 2023-07 requiring enhanced segment disclosures. The ASU requires disclosure of
significant segment expenses regularly provided to the chief operating decision maker (CODM) included within segment operating
profit or loss. Additionally, the ASU requires a description of how the CODM utilizes segment operating profit or loss to assess
segment performance. The requirements of the ASU are effective for annual periods beginning after December 15, 2023, and interim
periods within fiscal years beginning after December 15, 2024. For us, annual reporting requirements will be effective for our fiscal
2025 and interim reporting requirements will be effective beginning with our first quarter of fiscal 2026. Early adoption is permitted
and retrospective application is required for all periods presented. We are in the process of analyzing the impact of the ASU on our
related disclosures.
In December of 2021, the Organization for Economic Cooperation and Development (OECD) established a framework, referred to as
Pillar 2, designed to ensure large multinational enterprises pay a minimum 15 percent level of tax on the income arising in each
jurisdiction in which they operate. The earliest effective date is for taxable years beginning after December 31, 2023, which for us is
fiscal 2025. Numerous countries have already enacted the OECD model rules, and several other countries have drafted legislation.
We do not expect this legislation to have a material impact on our consolidated financial statements. We will continue to monitor and
evaluate new legislation and guidance, which could change our current assessment.
NON-GAAP MEASURES
We have included in this report measures of financial performance that are not defined by GAAP. We believe that these measures
provide useful information to investors and include these measures in other communications to investors.
For each of these non-GAAP financial measures, we are providing below a reconciliation of the differences between the non-GAAP
measure and the most directly comparable GAAP measure, an explanation of why we believe the non-GAAP measure provides useful
information to investors, and any additional material purposes for which our management or Board of Directors uses the non-GAAP
measure. These non-GAAP measures should be viewed in addition to, and not in lieu of, the comparable GAAP measure.
Significant Items Impacting Comparability
Several measures below are presented on an adjusted basis. The adjustments are either items resulting from infrequently occurring
events or items that, in management’s judgment, significantly affect the year-to-year assessment of operating results.
The following are descriptions of significant items impacting comparability of our results.
Goodwill and other intangible assets impairments
Non-cash goodwill and other intangible assets impairment charges related to our Latin America reporting unit and our
Top Chews
,
True Chews
, and
EPIC
this report.
Legal recovery
Legal recovery recorded in fiscal 2024.
30
Mark-to-market effects
Net mark-to-market valuation of certain commodity positions recognized in unallocated corporate items. Please see Note 8 to the
Consolidated Financial Statements in Item 8 of this report.
Restructuring charges and project-related costs
Restructuring charges and project-related costs related to commercial strategy restructuring actions and previously announced
restructuring actions in fiscal 2024. Restructuring charges and project-related costs for global supply chain actions, network
optimization actions, and previously announced restructuring actions in fiscal 2023. Please see Note 4 to the Consolidated Financial
Statements in Item 8 of this report.
Product recall, net
Costs related to the fiscal 2023 voluntary recall of certain international
Häagen-Dazs
ice cream products, net of recoveries.
Investment activity, net
Valuation adjustments and the gain on sale of certain corporate investments in fiscal 2024. Valuation adjustments and the loss on sale
of certain corporate investments in fiscal 2023.
Transaction costs
Transaction costs primarily related to the acquisition of a pet food business in Europe in fiscal 2024. Transaction costs primarily
related to the sale of our Helper main meals and Suddenly Salad side dish business in fiscal 2023. Please see Note 3 to the
Consolidated Financial Statements in Item 8 of this report.
Acquisition integration costs
Integration costs primarily resulting from the acquisition of TNT Crust in fiscal 2024 and fiscal 2023. Please see Note 3 to the
Consolidated Financial Statements in Item 8 of this report.
Divestitures gain, net
Net divestitures gain primarily related to the sale of our Helper main meals and Suddenly Salad side dishes business in fiscal 2023.
Please see Note 3 to the Consolidated Financial Statements in Item 8 of this report.
CPW restructuring charges
CPW restructuring charges related to previously announced restructuring actions.
Organic Net Sales Growth Rates
We provide organic net sales growth rates for our consolidated net sales and segment net sales. This measure is used in reporting to
our Board of Directors and executive management and as a component of the measurement of our performance for incentive
compensation purposes. We believe that organic net sales growth rates provide useful information to investors because they provide
transparency to underlying performance in our net sales by excluding the effect that foreign currency exchange rate fluctuations, as
well as acquisitions, divestitures, and a 53
rd
measures to reported net sales growth rates, the relevant GAAP measures, are included in our Consolidated Results of Operations and
Results of Segment Operations discussions in the MD&A above.
31
Adjusted Operating Profit and Related Constant-currency Growth Rate
This measure is used in reporting to our Board of Directors and executive management and as a component of the measurement of our
performance for incentive compensation purposes. We believe that this measure provides useful information to investors because it is
the operating profit measure we use to evaluate operating profit performance on a comparable year-to-year basis. Additionally, the
measure is evaluated on a constant-currency basis by excluding the effect that foreign currency exchange rate fluctuations have on
year-to-year comparability given the volatility in foreign currency exchange rates.
Our adjusted operating profit growth on a constant-currency basis is calculated as follows:
Fiscal Year
2024
2023
Change
Operating profit as reported
$
3,431.7
$
3,433.8
Flat
Goodwill and other intangible assets impairments
220.2
-
Legal recovery
(53.2)
-
Mark-to-market effects
(39.1)
291.9
Restructuring charges
38.8
61.0
Product recall, net
(30.3)
22.5
Investment activity, net
18.5
84.0
Transaction costs
14.0
0.4
Project-related costs
2.0
2.4
Acquisition integration costs
0.2
5.9
Divestitures gain, net
-
(444.6)
Adjusted operating profit
$
3,602.7
$
3,457.3
4
%
Foreign currency exchange impact
Flat
Adjusted operating profit growth, on a constant-currency basis
4
%
Note: Table may not foot due to rounding.
For more information on the reconciling items, please refer to the Significant Items Impacting Comparability section above.
32
Adjusted Diluted EPS and Related Constant-currency Growth Rate
This measure is used in reporting to our Board of Directors and executive management. We believe that this measure provides useful
information to investors because it is the profitability measure we use to evaluate earnings performance on a comparable year-to-year
basis.
The reconciliation of our GAAP measure, diluted EPS, to adjusted diluted EPS and the related constant-currency growth rate follows:
Fiscal Year
Per Share Data
2024
2023
Change
Diluted earnings per share, as reported
$
4.31
$
4.31
Flat
Goodwill and other intangible assets impairments
0.28
-
Legal recovery
(0.07)
-
Mark-to-market effects
(0.05)
0.37
Restructuring charges
0.05
0.08
Product recall, net
(0.04)
0.03
Investment activity, net
0.02
0.11
Transaction costs
0.02
-
Acquisition integration costs
-
0.01
Divestitures gain, net
-
(0.62)
Adjusted diluted earnings per share
$
4.52
$
4.30
5
%
Foreign currency exchange impact
Flat
Adjusted diluted earnings per share growth, on a constant-currency basis
6
%
Note: Table may not foot due to rounding.
For more information on the reconciling items, please refer to the Significant Items Impacting Comparability section above.
See our reconciliation below of the effective income tax rate as reported to the adjusted effective income tax rate for the tax impact of
each item affecting comparability.
33
Free Cash Flow Conversion Rate
We believe this measure provides useful information to investors because it is important for assessing our efficiency in converting
earnings to cash and returning cash to shareholders. The calculation of free cash flow conversion rate and net cash provided by
operating activities conversion rate, its equivalent GAAP measure, follows:
In Millions
Fiscal 2024
Net earnings, including earnings attributable to redeemable and noncontrolling interests, as reported
$
2,518.6
Goodwill and other intangible assets impairments, net of tax
161.8
Legal recovery, net of tax
(40.3)
Mark-to-market effects, net of tax
(30.1)
Restructuring charges, net of tax
28.4
Product recall, net, net of tax
(23.3)
Investment activity, net, net of tax
12.6
Transaction costs, net of tax
11.9
CPW restructuring charges, net of tax
2.0
Project-related costs, net of tax
1.3
Acquisition integration costs, net of tax
0.2
Adjusted net earnings, including earnings attributable to redeemable and noncontrolling interests
$
2,643.0
Net cash provided by operating activities
3,302.6
Purchases of land, buildings, and equipment
(774.1)
Free cash flow
$
2,528.5
Net cash provided by operating activities conversion rate
131%
Free cash flow conversion rate
96%
Note: Table may not foot due rounding.
For more information on the reconciling items, please refer to the Significant Items Impacting Comparability section above.
See our reconciliation below of the effective income tax rate as reported to the adjusted effective income tax rate for the tax impact of
each item affecting comparability.
34
Adjusted Operating Profit as a Percent of Net Sales (Adjusted Operating Profit Margin)
We believe this measure provides useful information to investors because it is important for assessing our operating profit margin on a
comparable year-to-year basis.
Our adjusted operating profit margins are calculated as follows:
Fiscal Year
Percent of Net Sales
2024
2023
Operating profit as reported
$
3,431.7
17.3
%
$
3,433.8
17.1
%
Goodwill and other intangible assets impairments
220.2
1.1
%
-
-
%
Legal recovery
(53.2)
(0.3)
%
-
-
%
Mark-to-market effects
(39.1)
(0.2)
%
291.9
1.5
%
Restructuring charges
38.8
0.2
%
61.0
0.3
%
Product recall, net
(30.3)
(0.2)
%
22.5
0.1
%
Investment activity, net
18.5
0.1
%
84.0
0.4
%
Transaction costs
14.0
0.1
%
0.4
-
%
Project-related costs
2.0
-
%
2.4
-
%
Acquisition integration costs
0.2
-
%
5.9
-
%
Divestitures gain, net
-
-
%
(444.6)
(2.2)
%
Adjusted operating profit
$
3,602.7
18.1
%
$
3,457.3
17.2
%
Note: Table may not foot due to rounding.
For more information on the reconciling items, please refer to the Significant Items Impacting Comparability section above.
35
Adjusted Effective Income Tax Rates
We believe this measure provides useful information to investors because it presents the adjusted effective income tax rate on a
comparable year-to-year basis.
Adjusted effective income tax rates are calculated as follows:
Fiscal Year Ended
2024
2023
In Millions
(Except Per Share Data)
Pretax
Earnings (a)
Income
Taxes
Pretax
Earnings (a)
Income
Taxes
As reported
$
3,028.3
$
594.5
$
3,140.5
$
612.2
Goodwill and other intangible assets impairments
220.2
58.4
-
-
Legal recovery
(53.2)
(12.9)
-
-
Mark-to-market effects
(39.1)
(9.0)
291.9
67.1
Restructuring charges
38.8
10.4
61.0
12.6
Product recall, net
(30.3)
(7.0)
22.5
5.2
Investment activity, net
18.5
5.9
84.0
18.0
Transaction costs
14.0
2.1
0.4
0.2
Project-related costs
2.0
0.7
2.4
0.8
Acquisition integration costs
0.2
0.1
5.9
1.3
Divestitures gain, net
-
-
(444.6)
(73.2)
As adjusted
$
3,199.4
$
643.1
$
3,164.0
$
644.1
Effective tax rate:
As reported
19.6%
19.5%
As adjusted
20.1%
20.4%
Sum of adjustments to income taxes
$
$
Average number of common shares - diluted EPS
579.5
601.2
Impact of income tax adjustments on adjusted diluted EPS
$
(0.08)
$
(0.05)
Note: Table may not foot due to rounding.
(a)
Earnings before income taxes and after-tax earnings from joint ventures.
For more information on the reconciling items, please refer to the Significant Items Impacting Comparability section above.
36
Constant-currency After-Tax Earnings from Joint Ventures Growth Rate
We believe that this measure provides useful information to investors because it provides transparency to underlying performance of
our joint ventures by excluding the effect that foreign currency exchange rate fluctuations have on year-to-year comparability given
volatility in foreign currency exchange markets.
After-tax earnings from joint ventures growth rate on a constant-currency basis are calculated as follows:
Fiscal 2024
Percentage change in after-tax earnings from joint ventures as reported
4
%
Impact of foreign currency exchange
(10)
pts
Percentage change in after-tax earnings from joint ventures on a constant-currency basis
14
%
Note: Table may not foot due to rounding.
Net Sales Growth Rate for Canada Operating Unit on a Constant-currency Basis
We believe this measure of our Canada operating unit net sales provides useful information to investors because it provides
transparency to the underlying performance for the Canada operating unit within our North America Retail segment by excluding the
effect that foreign currency exchange rate fluctuations have on year-to-year comparability given volatility in foreign currency
exchange markets.
Net sales growth rate for our Canada operating unit on a constant-currency basis is calculated as follows:
Fiscal 2024
Percentage change in net sales as reported
5
%
Impact of foreign currency exchange
(1)
pt
Percentage change in net sales on a constant-currency basis
6
%
Note: Table may not foot due to rounding.
Constant-currency Segment Operating Profit Growth Rates
We
believe that this measure provides useful information to investors because it provides transparency to underlying performance of
our segments by excluding the effect that foreign currency exchange rate fluctuations have on year-to-year comparability given
volatility in foreign currency exchange markets.
Our segments’ operating profit growth rates on a constant-currency basis are calculated as follows:
Fiscal 2024
Percentage Change
in Operating Profit
as Reported
Impact of Foreign
Currency Exchange
Percentage Change
in Operating Profit
on Constant-
Currency Basis
North America Retail
(3)
%
Flat
(3)
%
International
(23)
%
(3)
pts
(20)
%
Pet
9
%
Flat
9
%
North America Foodservice
9
%
Flat
9
%
Note: Table may not foot due to rounding.
Forward-Looking Financial Measures
Our fiscal 2025 outlook for organic net sales growth, constant-currency adjusted operating profit, adjusted diluted EPS, and free cash
flow conversion are non-GAAP financial measures that exclude, or have otherwise been adjusted for, items impacting comparability,
including the effect of foreign currency exchange rate fluctuations, restructuring charges, acquisition transaction and integration costs,
acquisitions, divestitures, and mark-to-market effects. We are not able to reconcile these forward-looking non-GAAP financial
measures to their most directly comparable forward-looking GAAP financial measures without unreasonable efforts because we are
unable to predict with a reasonable degree of certainty the actual impact of changes in foreign currency exchange rates and commodity
37
prices or the timing or impact of acquisitions, divestitures, and restructuring actions throughout fiscal 2025. The unavailable
information could have a significant impact on our fiscal 2025 GAAP financial results.
For fiscal 2025, we currently expect: foreign currency exchange rates (based on a blend of forward and forecasted rates and hedge
positions) and acquisitions and divestitures completed prior to fiscal 2025 will have no material impact to net sales growth and
restructuring charges to be immaterial.
ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk stemming from changes in interest and foreign exchange rates and commodity and equity prices.
Changes in these factors could cause fluctuations in our earnings and cash flows. In the normal course of business, we actively
manage our exposure to these market risks by entering into various hedging transactions, authorized under established policies that
place controls on these activities. The counterparties in these transactions are generally highly rated institutions. We establish credit
limits for each counterparty. Our hedging transactions include but are not limited to a variety of derivative financial instruments. For
information on interest rate, foreign exchange, commodity price, and equity instrument risk, please see Note 8 to the Consolidated
Financial Statements in Item 8 of this report.
VALUE AT RISK
The estimates in the table below are intended to measure the maximum potential fair value we could lose in one day from adverse
changes in market interest rates, foreign exchange rates, commodity prices, and equity prices under normal market conditions.
A
Monte Carlo value-at-risk (VAR) methodology was used to quantify the market risk for our exposures. The models assumed normal
market conditions and used a 95 percent confidence level.
The VAR calculation used historical interest and foreign exchange rates, and commodity and equity prices from the past year to
estimate the potential volatility and correlation of these rates in the future. The market data were drawn from the RiskMetrics™ data
set. The calculations are not intended to represent actual losses in fair value that we expect to incur. Further, since the hedging
instrument (the derivative) inversely correlates with the underlying exposure, we would expect that any loss or gain in the fair value of
our derivatives would be generally offset by an increase or decrease in the fair value of the underlying exposure. The positions
included in the calculations were: debt; investments; interest rate swaps; foreign exchange forwards; commodity swaps, futures, and
options; and equity instruments. The calculations do not include the underlying foreign exchange and commodities or equity-related
positions that are offset by these market-risk-sensitive instruments.
The table below presents the estimated maximum potential VAR arising from a one-day loss in fair value for our interest rate, foreign
currency, commodity, and equity market-risk-sensitive instruments outstanding as of May 26, 2024.
In Millions
May 26, 2024
Average During
Fiscal 2024
May 28, 2023
Analysis of Change
Interest rate instruments
$
53.5
$
56.0
$
65.3
Lower Market Volatility
Foreign currency instruments
29.8
30.1
36.7
Exchange Rate Volatility
Commodity instruments
4.5
5.1
7.6
Lower Market Volatility
Equity instruments
1.8
2.1
2.8
Lower Market Volatility
38
CAUTIONARY STATEMENT RELEVANT TO FORWARD -LOOKING INFORMATION FOR THE PURPOSE OF “SAFE
HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This report contains or incorporates by reference forward-looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995 that are based on our current expectations and assumptions. We also may make written or oral forward-looking
statements, including statements contained in our filings with the SEC and in our reports to shareholders.
The words or phrases “will likely result,” “are expected to,” “may continue,” “is anticipated,” “estimate,” “plan,” “project,” or similar
expressions identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such
statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results and
those currently anticipated or projected. We wish to caution you not to place undue reliance on any such forward-looking statements.
In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, we are identifying important
factors that could affect our financial performance and could cause our actual results in future periods to differ materially from any
current opinions or statements.
Our future results could be affected by a variety of factors, such as: disruptions or inefficiencies in the supply chain; competitive
dynamics in the consumer foods industry and the markets for our products, including new product introductions, advertising activities,
pricing actions, and promotional activities of our competitors; economic conditions, including changes in inflation rates, interest rates,
tax rates, or the availability of capital; product development and innovation; consumer acceptance of new products and product
improvements; consumer reaction to pricing actions and changes in promotion levels; acquisitions or dispositions of businesses or
assets; changes in capital structure; changes in the legal and regulatory environment, including tax legislation, labeling and advertising
regulations, and litigation; impairments in the carrying value of goodwill, other intangible assets, or other long -lived assets, or changes
in the useful lives of other intangible assets; changes in accounting standards and the impact of significant accounting estimates;
product quality and safety issues, including recalls and product liability; changes in consumer demand for our products; effectiveness
of advertising, marketing, and promotional programs; changes in consumer behavior, trends, and preferences, including weight loss
trends; consumer perception of health-related issues, including obesity; consolidation in the retail environment; changes in purchasing
and inventory levels of significant customers; fluctuations in the cost and availability of supply chain resources, including raw
materials, packaging, energy, and transportation; effectiveness of restructuring and cost saving initiatives; volatility in the market
value of derivatives used to manage price risk for certain commodities; benefit plan expenses due to changes in plan asset values and
discount rates used to determine plan liabilities; failure or breach of our information technology systems; foreign economic conditions,
including currency rate fluctuations; and political unrest in foreign markets and economic uncertainty due to terrorism or war.
You should also consider the risk factors that we identify in Item 1A of this report, which could also affect our future results.
We undertake no obligation to publicly revise any forward-looking statements to reflect events or circumstances after the date of those
statements or to reflect the occurrence of anticipated or unanticipated events.
39
ITEM 8 - Financial Statements and Supplementary Data
REPORT OF MANAGEMENT RESPONSIBILITIES
The management of General Mills, Inc. is responsible for the fairness and accuracy of the consolidated financial statements. The
statements have been prepared in accordance with accounting principles that are generally accepted in the United States, using
management’s best estimates and judgments where appropriate. The financial information throughout this Annual Report on Form 10-
K is consistent with our consolidated financial statements.
Management has established a system of internal controls that provides reasonable assurance that assets are adequately safeguarded
and transactions are recorded accurately in all material respects, in accordance with management’s authorization. We maintain a
strong audit program that independently evaluates the adequacy and effectiveness of internal controls. Our internal controls provide
for appropriate separation of duties and responsibilities, and there are documented policies regarding use of our assets and proper
financial reporting. These formally stated and regularly communicated policies demand highly ethical conduct from all employees.
The Audit Committee of the Board of Directors meets regularly with management, internal auditors, and our independent registered
public accounting firm to review internal control, auditing, and financial reporting matters. The independent registered public
accounting firm, internal auditors, and employees have full and free access to the Audit Committee at any time.
The Audit Committee reviewed and approved the Company’s annual financial statements. The Audit Committee recommended, and
the Board of Directors approved, that the consolidated financial statements be included in the Annual Report. The Audit Committee
also appointed KPMG LLP to serve as the Company’s independent registered public accounting firm for fiscal 2025.
/s/ J. L. Harmening /s/ K. A. Bruce
J. L. Harmening K. A. Bruce
Chief Executive Officer Chief Financial Officer
June 26, 2024
40
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
General Mills, Inc.:
Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting
We have audited the accompanying consolidated balance sheets of General Mills, Inc. and subsidiaries (the Company) as of
May 26, 2024, and May 28, 2023, the related consolidated statements of earnings, comprehensive income, total equity and redeemable
interest, and cash flows for each of the years in the three-year period ended May 26, 2024, and the related notes and financial
statement schedule II (collectively, the consolidated financial statements). We also have audited the Company’s internal control over
financial reporting as of May 26, 2024, based on criteria established in
Internal Control – Integrated Framework (2013)
Committee of Sponsoring Organizations of the Treadway Commission.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of
the Company as of May 26, 2024, and May 28, 2023, and the results of its operations and its cash flows for each of the years in the
three-year period ended May 26, 2024, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the
Company maintained, in all material respects, effective internal control over financial reporting as of May 26, 2024, based on criteria
established in
Internal Control – Integrated Framework (2013)
Treadway Commission.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over
financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the
accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the
Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to
error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the
consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included
performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable
basis for our opinions.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect
on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
41
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements
that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are
material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The
communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a
whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or
on the accounts or disclosures to which it relates.
Valuation of goodwill and brand intangible assets
As discussed in Note 6 to the consolidated financial statements, the goodwill and brands and other indefinite-lived intangibles
balances as of May 26, 2024, were $14,750.7 million and $6,728.6 million, respectively. The impairment tests for these
assets, which are performed annually and whenever events or changes in circumstances indicate that impairment may have
occurred, require the Company to estimate the fair value of the reporting units to which goodwill is assigned as well as the
brands and other indefinite -lived intangible assets. The fair value estimates are derived from discounted cash flow analyses
that require the Company to make judgments about highly subjective matters, including future operating results, including
revenue growth rates and operating margins, and an estimate of the discount rates and royalty rates.
We identified the assessment of the valuation of certain goodwill and brand intangible assets as a critical audit matter. There
was a significant degree of judgment required in evaluating audit evidence, which consists primarily of forward-looking
assumptions about future operating results, specifically the revenue growth rates and operating margins, royalty rates and
subjective inputs used to estimate the discount rates.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and
tested the operating effectiveness of internal controls related to the valuation of goodwill and brand intangible assets. This
included controls related to the assumptions about future operating results and the discount and royalty rates used to measure
the fair value of the reporting units and brands intangible assets. We performed sensitivity analyses over the revenue growth
rates, operating margins, brand royalty rates and discount rates to assess the impact of other points within a range of potential
assumptions. We evaluated the revenue growth rates and operating margin assumptions by comparing them to recent
financial performance and external market and industry data. We evaluated whether these assumptions were consistent with
evidence obtained in other areas of the audit. We involved professionals with specialized skills and knowledge, who assisted
in the evaluation of the Company’s discount rates by comparing them against rate ranges that were independently developed
using publicly available market data for comparable entities and the royalty rates by evaluating the methods, assumptions and
market data used to estimate the royalty rates.
/s/
We have served as the Company’s auditor since 1928.
June 26, 2024
42
Consolidated Statements of Earnings
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions, Except per Share Data)
Fiscal Year
2024
2023
2022
Net sales
$
$
$
Cost of sales
Selling, general, and administrative expenses
Divestitures gain, net
(444.6 )
(194.1 )
Restructuring, impairment, and other exit costs (recoveries)
(26.5 )
Operating profit
Benefit plan non-service income
(75.8 )
(88.8 )
(113.4 )
Interest, net
Earnings before income taxes and after-tax earnings from joint ventures
Income taxes
After-tax earnings from joint ventures
Net earnings, including earnings attributable to redeemable and
Net earnings attributable to redeemable and noncontrolling interests
Net earnings attributable to General Mills
$
$
$
Earnings per share — basic
$
$
$
Earnings per share — diluted
$
$
$
Dividends per share
$
$
$
See accompanying notes to consolidated financial statements.
43
Consolidated Statements of Comprehensive Income
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions)
Fiscal Year
2024
2023
2022
Net earnings, including earnings attributable to
$
$
$
Other comprehensive (loss) income, net of tax:
Foreign currency translation
(86.6 )
(110.8 )
(175.9 )
Net actuarial (loss) income
(187.1 )
(228.0 )
Other fair value changes:
Hedge derivatives
(3.2 )
Reclassification to earnings:
Foreign currency translation
(7.4 )
Hedge derivatives
(2.5 )
(18.7 )
Amortization of losses and prior service costs
Other comprehensive (loss) income, net of tax
(242.7 )
(306.7 )
Total comprehensive income
Comprehensive income (loss) attributable to
(45.2 )
Comprehensive income attributable to General Mills
$
$
$
See accompanying notes to consolidated financial statements.
44
Consolidated Balance Sheets
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions, Except Par Value)
May 26, 2024
May 28, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
$
Receivables
Inventories
Prepaid expenses and other current assets
Total current assets
Land, buildings, and equipment
Goodwill
Other intangible assets
Other assets
Total assets
$
$
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
$
Current portion of long-term debt
Notes payable
Other current liabilities
Total current liabilities
Long-term debt
Deferred income taxes
Other liabilities
Total liabilities
Stockholders’ equity:
Common stock,
Additional paid-in capital
Retained earnings
Common stock in treasury, at cost, shares of
(10,357.9 )
(8,410.0 )
Accumulated other comprehensive loss
(2,519.7 )
(2,276.9 )
Total stockholders’ equity
Noncontrolling interests
Total equity
Total liabilities and equity
$
$
See accompanying notes to consolidated financial statements.
45
Consolidated Statements of Total Equity and Redeemable Interest
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions, Except per Share Data)
Fiscal Year
2024
2023
2022
Shares
Amount
Shares
Amount
Shares
Amount
Total equity, beginning balance
$
$
$
Common stock,
Additional paid-in capital:
Beginning balance
Stock compensation plans
(11.7 )
Unearned compensation related to stock unit awards
(78.1 )
(104.7 )
(92.2 )
Earned compensation
Decrease in redemption value of
Reversal of cumulative redeemable interest
(207.4 )
Acquisition of noncontrolling interest
(19.5 )
Ending balance
Retained earnings:
Beginning balance
Net earnings attributable to General Mills
Cash dividends declared ($
, $
, and $
(1,363.4 )
(1,287.9 )
(1,244.5 )
Ending balance
Common stock in treasury:
Beginning balance
(168.0 )
(8,410.0 )
(155.7 )
(7,278.1 )
(146.9 )
(6,611.2 )
Shares purchased, including excise tax of $
N/A
(29.2 )
(2,021.2 )
(18.0 )
(1,403.6 )
(13.5 )
(876.8 )
Stock compensation plans
Ending balance
(195.5 )
(10,357.9 )
(168.0 )
(8,410.0 )
(155.7 )
(7,278.1 )
Accumulated other comprehensive loss:
Beginning balance
(2,276.9 )
(1,970.5 )
(2,429.2 )
Comprehensive (loss) income
(242.8 )
(306.4 )
Ending balance
(2,519.7 )
(2,276.9 )
(1,970.5 )
Noncontrolling interests:
Beginning balance
Comprehensive income (loss)
(16.0 )
Distributions to noncontrolling interest holders
(21.3 )
(15.7 )
(129.8 )
Reclassification from redeemable interest
Reversal of cumulative redeemable interest
Change in ownership interest
Divestiture
(680.4 )
Ending balance
Total equity, ending balance
$
$
$
Redeemable interest:
Beginning balance
$
$
$
Comprehensive loss
(29.2 )
Decrease in redemption value of
(14.1 )
Reclassification to noncontrolling interest
(561.6 )
Ending balance
$
$
$
See accompanying notes to consolidated financial statements.
46
Consolidated Statements of Cash Flows
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions)
Fiscal Year
2024
2023
2022
Cash Flows - Operating Activities
Net earnings, including earnings attributable to redeemable and noncontrolling interests
$
$
$
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization
After-tax earnings from joint ventures
(84.8 )
(81.3 )
(111.7 )
Distributions of earnings from joint ventures
Stock-based compensation
Deferred income taxes
(48.5 )
(22.2 )
Pension and other postretirement benefit plan contributions
(30.1 )
(30.1 )
(31.3 )
Pension and other postretirement benefit plan costs
(27.0 )
(27.6 )
(30.1 )
Divestitures gain, net
(444.6 )
(194.1 )
Restructuring, impairment, and other exit costs (recoveries)
(117.1 )
Changes in current assets and liabilities, excluding the effects of acquisitions and divestitures
(48.9 )
Other, net
(50.7 )
Net cash provided by operating activities
Cash Flows - Investing Activities
Purchases of land, buildings, and equipment
(774.1 )
(689.5 )
(568.7 )
Acquisitions, net of cash acquired
(451.9 )
(251.5 )
(1,201.3 )
Investments in affiliates, net
(2.7 )
(32.2 )
Proceeds from disposal of land, buildings, and equipment
Proceeds from divestitures, net of cash divested
Other, net
(7.6 )
(13.5 )
Net cash used by investing activities
(1,197.4 )
(346.4 )
(1,690.7 )
Cash Flows - Financing Activities
Change in notes payable
(20.5 )
(769.3 )
Issuance of long-term debt
Payment of long-term debt
(901.5 )
(1,421.7 )
(3,140.9 )
Proceeds from common stock issued on exercised options
Purchases of common stock for treasury
(2,002.4 )
(1,403.6 )
(876.8 )
Dividends paid
(1,363.4 )
(1,287.9 )
(1,244.5 )
Distributions to redeemable and noncontrolling interest holders
(21.3 )
(15.7 )
(129.8 )
Other, net
(53.9 )
(62.6 )
(28.0 )
Net cash used by financing activities
(2,272.3 )
(2,404.1 )
(2,503.2 )
Effect of exchange rate changes on cash and cash equivalents
(0.4 )
(12.0 )
(58.0 )
(Decrease) increase in cash and cash equivalents
(167.5 )
(935.8 )
Cash and cash equivalents - beginning of year
Cash and cash equivalents - end of year
$
$
$
Cash flow from changes in current assets and liabilities, excluding the effects of acquisitions and
Receivables
$
(1.8 )
$
(41.2 )
$
(166.3 )
Inventories
(319.0 )
(85.8 )
Prepaid expenses and other current assets
(35.3 )
Accounts payable
(251.2 )
Other current liabilities
(191.0 )
Changes in current assets and liabilities
$
$
(48.9 )
$
See accompanying notes to consolidated financial statements.
47
Notes to Consolidated Financial Statements
GENERAL MILLS, INC. AND SUBSIDIARIES
NOTE 1. BASIS OF PRESENTATION AND RECLASSIFICATIONS
Basis of Presentation
Our Consolidated Financial Statements include the accounts of General Mills, Inc. and all subsidiaries in which we have a controlling
financial interest. Intercompany transactions and accounts, including any noncontrolling and redeemable interests’ share of those
transactions, are eliminated in consolidation.
Our fiscal year ends on the last Sunday in May. Our India business is on an April fiscal year end.
Certain reclassifications to our previously reported financial information have been made to conform to the current period
presentation.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash and Cash Equivalents
We consider all investments purchased with an original maturity of three months or less to be cash equivalents.
Inventories
All inventories in the United States other than grain are valued at the lower of cost, using the last-in, first-out (LIFO) method, or
market. Grain inventories are valued at net realizable value, and all related cash contracts and derivatives are valued at fair value, with
all net changes in value recorded in earnings currently.
Inventories outside of the United States are generally valued at the lower of cost, using the first-in, first-out (FIFO) method, or net
realizable value.
Shipping costs associated with the distribution of finished product to our customers are recorded as cost of sales and are recognized
when the related finished product is shipped to and accepted by the customer.
Land, Buildings, Equipment, and Depreciation
Land is recorded at historical cost. Buildings and equipment, including capitalized interest and internal engineering costs, are recorded
at cost and depreciated over estimated useful lives, primarily using the straight-line method. Ordinary maintenance and repairs are
charged to cost of sales. Buildings are usually depreciated over
depreciated over
retired, the accounts are relieved of its cost and related accumulated depreciation and the resulting gains and losses, if any, are
recognized in earnings.
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an
asset (or asset group) may not be recoverable. An impairment loss would be recognized when estimated undiscounted future cash
flows from the operation and disposition of the asset group are less than the carrying amount of the asset group. Asset groups have
identifiable cash flows and are largely independent of other asset groups. Measurement of an impairment loss would be based on the
excess of the carrying amount of the asset group over its fair value. Fair value is measured using a discounted cash flow model or
independent appraisals, as appropriate.
Goodwill and Other Intangible Assets
Goodwill is not subject to amortization and is tested for impairment annually and whenever events or changes in circumstances
indicate that impairment may have occurred. We perform our annual goodwill and indefinite-lived intangible assets impairment test as
of the first day of the second quarter of the fiscal year. Impairment testing is performed for each of our reporting units. We compare
the carrying value of a reporting unit, including goodwill, to the fair value of the unit. Carrying value is based on the assets and
liabilities associated with the operations of that reporting unit, which often requires allocation of shared or corporate items among
reporting units. If the carrying amount of a reporting unit exceeds its fair value, impairment has occurred. We recognize an
impairment charge for the amount by which the carrying amount of the reporting unit exceeds its fair value up to the total amount of
goodwill allocated to the reporting unit. Our estimates of fair value are determined based on a discounted cash flow model. Growth
rates for sales and profits are determined using inputs from our long-range planning process. We also make estimates of discount rates,
perpetuity growth assumptions, market comparables, and other factors.
We evaluate the useful lives of our other intangible assets, mainly brands, to determine if they are finite or indefinite-lived. Reaching a
determination on useful life requires significant judgments and assumptions regarding the future effects of obsolescence, demand,
competition, other economic factors (such as the stability of the industry, known technological advances, legislative action that results
48
in an uncertain or changing regulatory environment, and expected changes in distribution channels), the level of required maintenance
expenditures, and the expected lives of other related groups of assets. Intangible assets that are deemed to have finite lives are
amortized on a straight-line basis, over their useful lives, generally ranging from
Our indefinite-lived intangible assets, mainly intangible assets primarily associated with the
Blue Buffalo
,
,
Totino’s
,
Old El
Paso
,
Progresso
,
,
Nudges
, and
Häagen-Dazs
in circumstances indicate that their carrying value may not be recoverable. Our estimate of the fair value of the brands is based on a
discounted cash flow model using inputs which included projected revenues from our long-range plan, assumed royalty rates that
could be payable if we did not own the brands, and a discount rate.
Our finite-lived intangible assets, primarily acquired customer relationships, are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when
estimated undiscounted future cash flows from the operation and disposition of the asset are less than the carrying amount of the asset.
Assets generally have identifiable cash flows and are largely independent of other assets. Measurement of an impairment loss would
be based on the excess of the carrying amount of the asset over its fair value. Fair value is measured using a discounted cash flow
model or other similar valuation model, as appropriate.
Leases
We determine whether an arrangement is a lease at inception. When our lease arrangements include lease and non-lease components,
we account for lease and non-lease components (e.g. common area maintenance) separately based on their relative standalone prices.
Any lease arrangements with an initial term of 12 months or less are not recorded on our Consolidated Balance Sheets, and we
recognize lease costs for these lease arrangements on a straight-line basis over the lease term. Many of our lease arrangements provide
us with options to exercise one or more renewal terms or to terminate the lease arrangement. We include these options when we are
reasonably certain to exercise them in the lease term used to establish our right of use assets and lease liabilities. Generally, our lease
agreements do not include an option to purchase the leased asset, residual value guarantees, or material restrictive covenants.
We have certain lease arrangements with variable rental payments. Our lease arrangements for our Häagen-Dazs retail shops often
include rental payments that are based on a percentage of retail sales. We have other lease arrangements that are adjusted periodically
based on an inflation index or rate. The future variability of these payments and adjustments are unknown, and therefore they are not
included as minimum lease payments used to determine our right of use assets and lease liabilities. Variable rental payments are
recognized in the period in which the obligation is incurred.
As most of our lease arrangements do not provide an implicit interest rate, we apply an incremental borrowing rate based on the
information available at the commencement date of the lease arrangement to determine the present value of lease payments.
Investments in Unconsolidated Joint Ventures
Our investments in companies over which we have the ability to exercise significant influence are stated at cost plus our share of
undistributed earnings or losses. We receive royalty income from certain joint ventures, incur various expenses (primarily research
and development), and record the tax impact of certain joint venture operations that are structured as partnerships. In addition, we
make advances to our joint ventures in the form of loans or capital investments. We also sell certain raw materials, semi-finished
goods, and finished goods to the joint ventures, generally at market prices.
In addition, we assess our investments in our joint ventures if we have reason to believe an impairment may have occurred including,
but not limited to, as a result of ongoing operating losses, projected decreases in earnings, increases in the weighted-average cost of
capital, or significant business disruptions. The significant assumptions used to estimate fair value include revenue growth and
profitability, royalty rates, capital spending, depreciation and taxes, foreign currency exchange rates, and a discount rate. By their
nature, these projections and assumptions are uncertain. If we were to determine the current fair value of our investment was less than
the carrying value of the investment, then we would assess if the shortfall was of a temporary or permanent nature and write down the
investment to its fair value if we concluded the impairment is other than temporary.
Revenue Recognition
Our revenues primarily result from contracts with customers, which are generally short-term and have a single performance obligation
– the delivery of product. We recognize revenue for the sale of packaged foods at the point in time when our performance obligation
has been satisfied and control of the product has transferred to our customer, which generally occurs when the shipment is accepted by
our customer. Sales include shipping and handling charges billed to the customer and are reported net of variable consideration and
consideration payable to our customers, including trade promotion, consumer coupon redemption and other reductions to the
transaction price, including estimated allowances for returns, unsalable product, and prompt pay discounts. Sales, use, value-added,
and other excise taxes are not included in revenue. Trade promotions are recorded using significant judgment of estimated
participation and performance levels for offered programs at the time of sale. Differences between estimated and actual reductions to
the transaction price are recognized as a change in estimate in a subsequent period. We generally do not allow a right of return.
49
However, on a limited case-by-case basis with prior approval, we may allow customers to return product. In limited circumstances,
product returned in saleable condition is resold to other customers or outlets. Receivables from customers generally do not bear
interest. Payment terms and collection patterns vary around the world and by channel, and are short-term, and as such, we do not have
any significant financing components. Our allowance for doubtful accounts represents our estimate of expected credit losses related to
our trade receivables. We pool our trade receivables based on similar risk characteristics, such as geographic location, business
channel, and other account data. To estimate our allowance for doubtful accounts, we leverage information on historical losses, asset-
specific risk characteristics, current conditions, and reasonable and supportable forecasts of future conditions. Account balances are
written off against the allowance when we deem the amount is uncollectible. Please see Note 17 for a disaggregation of our revenue
into categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic
factors. We do not have material contract assets or liabilities arising from our contracts with customers.
Environmental Costs
Environmental costs relating to existing conditions caused by past operations that do not contribute to current or future revenues are
expensed. Liabilities for anticipated remediation costs are recorded on an undiscounted basis when they are probable and reasonably
estimable, generally no later than the completion of feasibility studies or our commitment to a plan of action.
Advertising Production Costs
We expense the production costs of advertising the first time that the advertising takes place.
Research and Development
All expenditures for research and development (R&D) are charged against earnings in the period incurred. R&D includes expenditures
for new product and manufacturing process innovation, and the annual expenditures are comprised primarily of internal salaries,
wages, consulting, and supplies attributable to R&D activities. Other costs include depreciation and maintenance of research facilities,
including assets at facilities that are engaged in pilot plant activities.
Foreign Currency Translation
For all significant foreign operations, the functional currency is the local currency. Assets and liabilities of these operations are
translated at the period-end exchange rates. Income statement accounts are translated using the average exchange rates prevailing
during the period. Translation adjustments are reflected within accumulated other comprehensive loss (AOCI) in stockholders’ equity.
Gains and losses from foreign currency transactions are included in net earnings for the period, except for gains and losses on
investments in subsidiaries for which settlement is not planned for the foreseeable future and foreign exchange gains and losses on
instruments designated as net investment hedges. These gains and losses are recorded in AOCI.
Derivative Instruments
All derivatives are recognized on our Consolidated Balance Sheets at fair value based on quoted market prices or our estimate of their
fair value, and are recorded in either current or noncurrent assets or liabilities based on their maturity. Changes in the fair values of
derivatives are recorded in net earnings or other comprehensive income, based on whether the instrument is designated and effective
as a hedge transaction and, if so, the type of hedge transaction. Gains or losses on derivative instruments reported in AOCI are
reclassified to earnings in the period the hedged item affects earnings. If the underlying hedged transaction ceases to exist, any
associated amounts reported in AOCI are reclassified to earnings at that time. Cash flows from derivative instruments are primarily
reported in cash flows from operating activities in our Consolidated Statements of Cash Flows.
Stock-based Compensation
We generally measure compensation expense for grants of restricted stock units and performance share units using the value of a share
of our stock on the date of grant. We estimate the value of stock option grants using a Black-Scholes valuation model. Generally,
stock-based compensation is recognized straight line over the vesting period. Our stock-based compensation expense is recorded in
selling, general , and administrative (SG&A) expenses and cost of sales in our Consolidated Statements of Earnings and allocated to
each reportable segment in our segment results.
Certain equity-based compensation plans contain provisions that accelerate vesting of awards upon retirement, termination, or death of
eligible employees and directors. We consider a stock-based award to be vested when the employee’s or director’s retention of the
award is no longer contingent on providing subsequent service. Accordingly, the related compensation cost is generally recognized
immediately for awards granted to retirement-eligible individuals or over the period from the grant date to the date retirement
eligibility is achieved, if less than the stated vesting period.
We report the benefits of tax deductions in excess of recognized compensation cost as an operating cash flow.
Defined Benefit Pension, Other Postretirement Benefit, and Postemployment Benefit Plans
We sponsor several domestic and foreign defined benefit plans to provide pension, health care, and other welfare benefits to retired
employees. Under certain circumstances, we also provide accruable benefits, primarily severance, to former or inactive employees in
the United States, Canada, and Mexico. We recognize an obligation for any of these benefits that vest or accumulate with service.
50
Postemployment benefits that do not vest or accumulate with service (such as severance based solely on annual pay rather than years
of service) are charged to expense when incurred. Our postemployment benefit plans are unfunded.
We recognize the underfunded or overfunded status of a defined benefit pension plan as an asset or liability and recognize changes in
the funded status in the year in which the changes occur through AOCI.
Use of Estimates
Preparing our Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States
requires us to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosures of contingent assets
and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.
These estimates include our accounting for revenue recognition, valuation of long-lived assets, intangible assets, income taxes, and
defined benefit pension, other postretirement benefit and postemployment benefit plans. Actual results could differ from our estimates.
New Accounting Standards
In the first quarter of fiscal 2024, we adopted optional accounting guidance to ease the burden in accounting for reference rate reform.
The new standard provides temporary expedients and exceptions to existing accounting requirements for contract modifications and
hedge accounting related to transitioning from discounted reference rates. This resulted in modifying contracts, where necessary, to
apply a new reference rate, primarily SOFR. The adoption of this accounting guidance did not have a material impact on our results of
operations and financial position.
In the first quarter of fiscal 2024, we adopted new requirements for enhanced disclosures related to supplier financing programs. The
new standard requires disclosure of the key terms of the program and a rollforward of the related obligation during the annual period,
including the amount of obligations confirmed and obligations subsequently paid. We have historically presented the key terms of
these programs and the associated obligation outstanding. The rollforward requirement is effective for fiscal years beginning after
December 15, 2023, which for us is the first quarter of fiscal 2025. The adoption of this guidance did not have a material impact on
our financial statements and related disclosures.
NOTE 3. ACQUISITIONS AND DIVESTITURES
During the fourth quarter of fiscal 2024, we acquired a pet food business in Europe, for a purchase price of $
acquired. The purchase price includes approximately $
fiscal 2025, contingent upon certain closing requirements. We financed the transaction with cash on hand. We consolidated the
business into our Consolidated Balance Sheets and recorded goodwill of $
$
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 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 will be
reported as part of our International operating segment in future periods on a one-month lag. Accordingly, in fiscal 2024, our
Consolidated Statements of Earnings do not include results of this business.
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 $
with U.S. commercial paper. We consolidated the TNT Crust business into our Consolidated Balance Sheets and recorded goodwill of
$
forma effects of this acquisition were not material.
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 $
In fiscal 2022, we sold our European dough businesses and recorded a net pre-tax gain on sale of $
During the third quarter of fiscal 2022, we sold 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
Liberté
brands in the United States and Canada, and cash. We recorded a net pre-tax gain of $
these businesses.
51
During the first quarter of fiscal 2022, we acquired Tyson Foods’ pet treats business for $
transaction with a combination of cash on hand and short-term debt. We consolidated Tyson Foods’ pet treats business into our
Consolidated Balance Sheets and recorded goodwill of $
Nudges
,
Top
Chews
, and
True Chews
The goodwill is included in the Pet reporting unit and is deductible for tax purposes. The pro forma effects of this acquisition were not
material.
NOTE 4. RESTRUCTURING, IMPAIRMENT, AND OTHER EXIT COSTS
INTANGIBLE ASSET IMPAIRMENTS
In fiscal 2024, we recorded a $
see Note 6 for additional information.
In fiscal 2024, we recorded $
Top Chews
,
True Chews
,
and
EPIC
intangible assets. Please see Note 6 for additional information.
RESTRUCTURING INITIATIVES
We view our restructuring activities as actions that help us meet our long-term growth targets and are evaluated against internal rate of
return and net present value targets. Each restructuring action normally takes one to two years to complete. At completion (or as each
major stage is completed in the case of multi-year programs), the project begins to deliver cash savings and/or reduced depreciation.
These activities result in various restructuring costs, including asset write-offs, exit charges including severance, contract termination
fees, and decommissioning and other costs. Accelerated depreciation associated with restructured assets, as used in the context of our
disclosures regarding restructuring activity, refers to the increase in depreciation expense caused by shortening the useful life or
updating the salvage value of depreciable fixed assets to coincide with the end of production under an approved restructuring plan.
Any impairment of the asset is recognized immediately in the period the plan is approved.
Restructuring charges recorded in fiscal 2024 were as follows:
In Millions
Commercial strategy actions
$
Charges associated with restructuring actions previously announced
Total restructuring charges
$
In fiscal 2024, we approved restructuring actions to enhance the go-to-market commercial strategy and related organizational structure
of our Pet segment. We expect to incur approximately $
actions, of which approximately $
accelerated depreciation and $
and $
In fiscal 2024, 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 $
long-lived asset impairment charge. We have incurred approximately $
related to these actions, of which approximately $
severance and $
these actions and record immaterial charges in fiscal 2025.
Certain actions are subject to union negotiations and works counsel consultations, where required.
We paid net $
52
Restructuring charges recorded in fiscal 2023 were as follows:
In Millions
Global supply chain actions
$
Network optimization actions
Charges associated with restructuring actions previously announced
Total restructuring charges
$
Restructuring charges recorded in fiscal 2022 were as follows:
In Millions
International manufacturing and logistics operations
$
Net recoveries associated with restructuring actions previously announced
(38.2 )
Total net restructuring recoveries
$
(23.2 )
Restructuring and impairment charges and project-related costs are classified in our Consolidated Statements of Earnings as follows:
Fiscal Year
In Millions
2024
2023
2022
Restructuring, impairment, and other exit costs (recoveries)
$
$
$
(26.5 )
Cost of sales
Total restructuring and impairment charges (recoveries)
(23.2 )
Project-related costs classified in cost of sales
$
$
$
The roll forward of our restructuring and other exit cost reserves, included in other current liabilities, is as follows:
In Millions
Severance
Other Exit
Costs
Total
Reserve balance as of May 30, 2021
$
$
$
Fiscal 2022 charges, including foreign currency translation
Reserve adjustment
(34.0 )
(34.0 )
Utilized in fiscal 2022
(80.1 )
(1.3 )
(81.4 )
Reserve balance as of May 29, 2022
Fiscal 2023 charges, including foreign currency translation
Utilized in fiscal 2023
(29.4 )
(1.4 )
(30.8 )
Reserve balance as of May 28, 2023
Fiscal 2024 charges, including foreign currency translation
Utilized in fiscal 2024
(32.8 )
(0.2 )
(33.0 )
Reserve balance as of May 26, 2024
$
$
$
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, the gain or loss on the sale of restructured assets, and the write-off of spare parts) and other
periodic exit costs recognized as incurred, as those items are not reflected in our restructuring and other exit cost reserves on our
Consolidated Balance Sheets.
NOTE 5. INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES
We have a
approximately
manufactures private label cereals for customers in the United Kingdom. We have guaranteed a portion of CPW’s debt and its pension
obligation in the United Kingdom.
We also have a
Häagen-Dazs
ice
cream products and frozen novelties.
Results from our CPW and HDJ joint ventures are reported for the
53
Joint venture related balance sheet activity is as follows:
In Millions
May 26, 2024
May 28, 2023
Cumulative investments
$
$
Goodwill and other intangible assets
Aggregate advances included in cumulative investments
Joint venture earnings and cash flow activity is as follows:
Fiscal Year
In Millions
2024
2023
2022
Sales to joint ventures
$
$
$
Net advances (repayments)
(15.4 )
Dividends received
Summary combined financial information for the joint ventures on a 100 percent basis is as follows:
Fiscal Year
In Millions
2024
2023
2022
Net sales:
CPW
$
$
$
HDJ
Total net sales
Gross margin
Earnings before income taxes
Earnings after income taxes
In Millions
May 26, 2024
May 28, 2023
Current assets
$
$
Noncurrent assets
Current liabilities
Noncurrent liabilities
NOTE 6. GOODWILL AND OTHER INTANGIBLE ASSETS
The components of goodwill and other intangible assets are as follows:
In Millions
May 26, 2024
May 28, 2023
Goodwill
$
$
Other intangible assets:
Intangible assets not subject to amortization:
Brands and other indefinite-lived intangibles
Intangible assets subject to amortization:
Customer relationships and other finite-lived intangibles
Less accumulated amortization
(150.9 )
(131.1 )
Intangible assets subject to amortization
Other intangible assets
Total
$
$
Based on the carrying value of finite-lived intangible assets as of May 26, 2024, amortization expense for each of the next five fiscal
years is estimated to be approximately $
54
The changes in the carrying amount of goodwill for fiscal 2022, 2023, and 2024 are as follows:
In Millions
North
America
Retail
Pet
North
America
Foodservice
International
Corporate
and Joint
Ventures
Total
Balance as of May 30, 2021
$
$
$
$
$
$
Acquisition
Divestitures
(201.8 )
(201.8 )
Reclassified to assets held for sale
(130.0 )
(130.0 )
Other activity, primarily foreign
(6.4 )
(54.8 )
(53.2 )
(114.4 )
Balance as of May 29, 2022
Acquisition
Divestitures
(2.0 )
(0.4 )
(2.4 )
Other activity, primarily foreign
(8.5 )
(12.8 )
(0.4 )
(21.7 )
Balance as of May 28, 2023
Acquisitions
Impairment charge
(117.1 )
(117.1 )
Other activity, primarily foreign
(0.5 )
(0.1 )
Balance as of May 26, 2024
$
$
$
$
$
$
The changes in the carrying amount of other intangible assets for fiscal 2022, 2023, and 2024 are as follows:
In Millions
Total
Balance as of May 30, 2021
$
Acquisition
Divestitures
(621.8 )
Intellectual property intangible asset
Other activity, primarily amortization and foreign currency translation
(109.3 )
Balance as of May 29, 2022
Acquisition
Divestiture
(3.6 )
Other activity, primarily amortization and foreign currency translation
(32.5 )
Balance as of May 28, 2023
Acquisition
Impairment charges
(103.1 )
Other activity, primarily amortization and foreign currency translation
(17.2 )
Balance as of May 26, 2024
$
Our annual goodwill and indefinite-lived intangible assets impairment test was performed on the first day of the second quarter of
fiscal 2024. As a result of lower future profitability projections for our Latin America reporting unit, we determined that the fair value
of the reporting unit was less than its book value and recorded a $
during the fourth quarter of fiscal 2024, we executed our fiscal 2025 planning process and preliminary long-range planning process,
which resulted in lower future sales and profitability projections for the businesses supporting our
Top Chews
,
True Chews
, and
EPIC
brand intangible assets. As a result of this triggering event, we performed an interim impairment assessment of these assets as of May
26, 2024, and determined that the fair value of these brand intangible assets no longer exceeded the carrying values of the respective
assets, resulting in $
other exit costs in our Consolidated Statements of Earnings. Our estimates of the fair values were determined based on a discounted
cash flow model using inputs which included our long-range cash flow projections for the businesses, royalty rates, weighted -average
cost of capital rates, and tax rates. These fair values are Level 3 assets in the fair value hierarchy.
55
All other intangible asset fair values were substantially in excess of the carrying values, except for the
Uncle Toby’s
asset. In addition, while having significant coverage as of our fiscal 2024 assessment date, the
Progresso
,
,
and
brand intangible assets had risk of decreasing coverage. We will continue to monitor applicable businesses for potential impairment.
We did not identify any indicators of impairment for all other goodwill and indefinite-lived intangible assets as of May 26, 2024.
NOTE 7. LEASES
Our lease portfolio primarily consists of operating lease arrangements for certain warehouse and distribution space, office space, retail
shops, production facilities, rail cars, production and distribution equipment, automobiles, and office equipment. Our lease costs
associated with finance leases and sale-leaseback transactions and our lease income associated with lessor and sublease arrangements
are not material to our Consolidated Financial Statements.
Components of our lease cost are as follows:
Fiscal Year
In Millions
2024
2023
2022
Operating lease cost
$
$
$
Variable lease cost
Short-term lease cost
Maturities of our operating and finance lease obligations by fiscal year are as follows:
In Millions
Operating Leases
Finance Leases
Fiscal 2025
$
$
Fiscal 2026
Fiscal 2027
Fiscal 2028
Fiscal 2029
After fiscal 2029
Total noncancelable future lease obligations
$
$
Less: Interest
(55.2 )
(0.1 )
Present value of lease obligations
$
$
The lease payments presented in the table above exclude $
committed to but have not yet commenced as of May 26, 2024.
The weighted-average remaining lease term and weighted-average discount rate for our operating leases are as follows:
May 26, 2024
May 28, 2023
Weighted-average remaining lease term
years
years
Weighted-average discount rate
%
%
Supplemental operating cash flow information and non-cash activity related to our operating leases are as follows:
Fiscal Year
In Millions
2024
2023
Cash paid for amounts included in the measurement of lease liabilities
$
$
Right of use assets obtained in exchange for new lease liabilities
$
$
56
NOTE 8. FINANCIAL INSTRUMENTS, RISK MANAGEMENT ACTIVITIES, AND FAIR VALUES
FINANCIAL INSTRUMENTS
The carrying values of cash and cash equivalents, receivables, accounts payable, other current liabilities, and notes payable
approximate fair value. Marketable securities are carried at fair value. As of May 26, 2024, and May 28, 2023, a comparison of cost
and market values of our marketable debt and equity securities is as follows:
Cost
Fair Value
Gross Unrealized Gains
Gross Unrealized Losses
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
In Millions
2024
2023
2024
2023
2024
2023
2024
2023
Available for sale
$
$
$
$
$
$
$
$
Equity securities
Total
$
$
$
$
$
$
$
$
Net realized losses from sales of marketable securities were $
are determined by specific identification.
Classification of marketable securities as current or noncurrent is dependent upon our intended holding period and the security’s
maturity date. The aggregate unrealized gains and losses on available for sale debt securities, net of tax effects, are classified in AOCI
within stockholders’ equity.
Scheduled maturities of our marketable securities are as follows:
Marketable Securities
In Millions
Cost
Fair Value
Under 1 year (current)
$
$
Equity securities
Total
$
$
As of May 26, 2024, we had $
RISK MANAGEMENT ACTIVITIES
As a part of our ongoing operations, we are exposed to market risks such as changes in interest and foreign currency exchange rates
and commodity and equity prices. To manage these risks, we may enter into various derivative transactions (e.g., futures, options, and
swaps) pursuant to our established policies.
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 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.
57
Unallocated corporate items for fiscal 2024, 2023, and 2022 included:
Fiscal Year
In Millions
2024
2023
2022
Net (loss) gain on mark-to-market valuation of commodity positions
$
(15.4 )
$
(154.4 )
$
Net loss (gain) on commodity positions reclassified from unallocated corporate
(89.5 )
(188.0 )
Net mark-to-market revaluation of certain grain inventories
(48.0 )
Net mark-to-market valuation of certain commodity positions recognized in
$
$
(291.9 )
$
As of May 26, 2024, the net notional value of commodity derivatives was $
agricultural inputs and $
next
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, SOFR, 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.
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.
During the third quarter of fiscal 2024, in advance of our $
treasury locks, resulting in a gain of $
During the fourth quarter of fiscal 2023, in advance of planned debt financing, we entered into €
swaps. The forward-starting swap agreements were terminated during the fourth quarter of fiscal 2023, in conjunction with the
Company’s issuance of a €
-year fixed-rate note. Upon termination, a loss of $
will be amortized through interest expense over the respective term of the debt.
During the fourth quarter of fiscal 2023, in advance of planned debt financing, we entered into $
treasury locks were terminated during the fourth quarter of fiscal 2023, in conjunction with the Company’s issuance of a $
million
-year fixed-rate note. Upon termination, a loss of $
interest expense over the respective term of the debt.
During the second quarter of fiscal 2023, we entered into a $
fixed rate notes due
, to a floating rate.
58
As of May 26, 2024, 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:
In Millions
Gain/(Loss)
% notes due
April 17, 2025
$
(0.5 )
% notes due
February 10, 2027
% notes due
April 27, 2027
(1.0 )
% notes due
April 17, 2028
(4.0 )
% notes due
April 13, 2029
(4.1 )
% notes due
October 14, 2031
% notes due
March 29, 2033
(1.2 )
% notes due
April 17, 2038
(7.6 )
% notes due
June 15, 2040
(9.0 )
% notes due
February 15, 2043
% notes due
April 17, 2048
(11.3 )
Net pre-tax hedge loss in AOCI
$
(12.2 )
The following table summarizes the notional amounts and weighted-average interest rates of our interest rate derivatives. Average
floating rates are based on rates as of the end of the reporting period.
In Millions
May 26, 2024
May 28, 2023
Pay-floating swaps - notional amount
$
$
Average receive rate
%
%
Average pay rate
%
%
The floating-rate swap contracts outstanding as of May 26, 2024, mature in fiscal 2026.
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.
As of May 26, 2024, the net notional value of foreign exchange derivatives was $
We also have net investments in foreign subsidiaries that are denominated in euros. We hedged a portion of these net investments by
issuing euro-denominated commercial paper and foreign exchange forward contracts. As of May 26, 2024, we hedged a portion of
these net investments with €
transaction gains of $
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 26, 2024, the net notional amount of our equity
swaps was $
59
FAIR VALUE MEASUREMENTS AND FINANCIAL STATEMENT PRESENTATION
The fair values of our assets, liabilities, and derivative positions recorded at fair value and their respective levels in the fair value
hierarchy as of May 26, 2024, and May 28, 2023, were as follows:
May 26, 2024
May 26, 2024
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)
$
$
$
$
$
$
(39.8 )
$
$
(39.8 )
Foreign exchange contracts (a) (c)
(5.1 )
(5.1 )
Total
(44.9 )
(44.9 )
Derivatives not designated as hedging
Foreign exchange contracts (a) (c)
(5.2 )
(5.2 )
Commodity contracts (a) (d)
(12.1 )
(12.1 )
Grain contracts (a) (d)
(6.5 )
(6.5 )
Total
(23.8 )
(23.8 )
Other assets and liabilities reported at fair value:
Marketable investments (a) (e)
Indefinite-lived intangible asset (f)
Total
Total assets, liabilities, and derivative positions
$
$
$
$
$
$
(68.7 )
$
$
(68.7 )
(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 EURIBOR, SOFR, and swap rates. As of May 26, 2024, the carrying amount of hedged debt designated as the hedged
item in a fair value hedge was $
of May 26, 2024, the cumulative amount of fair value hedging basis adjustments was $
(c) Based on observable market transactions of spot currency rates and forward currency prices.
(d) Based on prices of futures exchanges and recently reported transactions in the marketplace.
(e) Based on prices of common stock, mutual fund net asset values, and bond matrix pricing.
(f) See Note 6.
60
May 28, 2023
May 28, 2023
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)
$
$
$
$
$
$
(62.2 )
$
$
(62.2 )
Foreign exchange contracts (a) (c)
(2.5 )
(2.5 )
Total
(64.7 )
(64.7 )
Derivatives not designated as hedging
Foreign exchange contracts (a) (c)
(5.6 )
(5.6 )
Commodity contracts (a) (d)
(29.3 )
(29.3 )
Grain contracts (a) (d)
(11.8 )
(11.8 )
Total
(46.7 )
(46.7 )
Other assets and liabilities reported at fair value:
Marketable investments (a) (e) (f)
Long-lived assets (g)
Total
Total assets, liabilities, and derivative positions
$
$
$
$
$
$
(111.4 )
$
$
(111.4 )
(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 EURIBOR and swap rates. As of May 28, 2023, the carrying amount of hedged debt designated as the hedged item in a
fair value hedge was $
2023, the cumulative amount of fair value hedging basis adjustments was $
(c) Based on observable market transactions of spot currency rates and forward currency prices.
(d) Based on prices of futures exchanges and recently reported transactions in the marketplace.
(e) Based on prices of common stock, mutual fund net asset values, and bond matrix pricing.
(f) The level 3 marketable investment represents an equity security without a readily determinable fair value. During fiscal 2023, we
(g) We recorded $
Fair value was based on recently reported transactions for similar assets in the marketplace. These assets had a carrying value of
$
We did not significantly change our valuation techniques from prior periods.
The fair value of our long-term debt is estimated using Level 2 inputs based on quoted prices for those instruments. Where quoted
prices are not available, fair value is estimated using discounted cash flows and market-based expectations for interest rates, credit risk
and the contractual terms of the debt instruments. As of May 26, 2024, the fair value and carrying amount of our long-term debt,
including the current portion, were $
and fair value of our long-term debt, including the current portion, were $
61
Information related to our cash flow hedges, fair value hedges, and other derivatives not designated as hedging instruments for the
fiscal years ended May 26, 2024, and May 28, 2023, follows:
Interest Rate
Contracts
Foreign
Exchange
Contracts
Equity
Contracts
Commodity
Contracts
Total
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
In Millions
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
Derivatives in Cash Flow Hedging
Amount of (loss) gain recognized in
$
$
(6.4 )
$
(4.3 )
$
$
$
$
$
$
(4.3 )
$
Amount of net gain reclassified from
Amount of net gain recognized in
Derivatives in Fair Value Hedging
Amount of net loss recognized
(0.2 )
(4.9 )
(0.2 )
(4.9 )
Derivatives Not Designated as
Amount of net (loss) gain recognized
(8.5 )
(46.2 )
(3.4 )
(152.6 )
(202.2 )
(a) Gain 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. For the fiscal year ended May 26, 2024, the amount of gain reclassified from AOCI into
cost of sales was $
ended May 28, 2023, the amount of gain reclassified from AOCI into cost of sales was $
reclassified from AOCI into SG&A was $
(b) 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.
(c) (Loss) gain recognized in earnings is related to the ineffective portion of the hedging relationship, reported in SG&A expenses for
foreign exchange contracts and interest, net for interest rate contracts.
from the assessment of hedge effectiveness.
The following tables reconcile the net fair values of assets and liabilities subject to offsetting arrangements that are recorded in our
Consolidated Balance Sheets to the net fair values that could be reported in our Consolidated Balance Sheets:
May 26, 2024
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
$
$
$
$
(3.2 )
$
$
$
(12.1 )
$
$
(12.1 )
$
$
$
(5.4 )
Interest rate contracts
(49.4 )
(49.4 )
(23.1 )
Foreign exchange contracts
(3.9 )
(10.3 )
(10.3 )
(6.4 )
Equity contracts
(0.2 )
(0.2 )
(0.2 )
Total
$
$
$
$
(7.1 )
$
$
$
(72.0 )
$
$
(72.0 )
$
$
$
(35.1 )
(a) Includes related collateral offset in our Consolidated Balance Sheets.
(b) Net fair value as recorded in our Consolidated Balance Sheets.
(c) Fair value of assets that could be reported net 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.
62
May 28, 2023
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
$
$
$
$
(0.5 )
$
$
$
(29.3 )
$
$
(29.3 )
$
$
$
(12.6 )
Interest rate contracts
(69.2 )
(69.2 )
(24.9 )
Foreign exchange contracts
(4.2 )
(8.2 )
(8.2 )
(4.0 )
Equity contracts
(1.0 )
(1.5 )
(1.5 )
(0.5 )
Total
$
$
$
$
(5.7 )
$
$
$
(108.2 )
$
$
(108.2 )
$
$
$
(42.0 )
(a) Includes related collateral offset in our Consolidated Balance Sheets.
(b) Net fair value as recorded in our Consolidated Balance Sheets.
(c) Fair value of assets that could be reported net 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.
AMOUNTS RECORDED IN ACCUMULATED OTHER COMPREHENSIVE LOSS
As of May 26, 2024, the after-tax amounts of unrealized gains in AOCI related to hedge derivatives follows:
In Millions
After-Tax Gain/(Loss)
Unrealized losses from interest rate cash flow hedges
$
(7.3 )
Unrealized gains from foreign currency cash flow hedges
After-tax gains in AOCI related to hedge derivatives
$
The net amount of pre-tax gains and losses in AOCI as of May 26, 2024, that we expect to be reclassified into net earnings within the
next 12 months is a $
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 26, 2024, was $
We have posted $
CONCENTRATIONS OF CREDIT AND COUNTERPARTY CREDIT RISK
During fiscal 2024, customer concentration was as follows:
Percent of total
Consolidated
North America
Retail
North America
Foodservice
International
Pet
Walmart (a):
Net sales
%
%
%
%
%
Accounts receivable
%
%
%
%
Five largest customers:
Net sales
%
%
%
%
(a) Includes Walmart Inc. and its affiliates.
No customer other than Walmart accounted for
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.
63
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 $
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 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, including not providing any form of guarantee and not pledging assets as security to
the third parties or financial institutions. All of our accounts payable remain as obligations to our suppliers as stated in our supplier
agreements. As of May 26, 2024, $
party services. As of May 28, 2023, $
party services.
NOTE 9. DEBT
NOTES PAYABLE
The components of notes payable and their respective weighted-average interest rates at the end of the periods were as follows:
May 26, 2024
May 28, 2023
In Millions
Notes Payable
Weighted-
Average
Interest Rate
Notes Payable
Weighted-
Average
Interest Rate
Financial institutions
$
%
$
%
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 May 26, 2024:
In Billions
Facility
Amount
Borrowed
Amount
Committed credit facility expiring April 2026
$
$
Uncommitted credit facilities
Total committed and uncommitted credit facilities
$
$
The credit facilities contain covenants, including a requirement to maintain a fixed charge coverage ratio of at least
LONG-TERM DEBT
In the fourth quarter of fiscal 2024, we issued €
. We used the net
proceeds for general corporate purposes.
In the fourth quarter of fiscal 2024, we issued €
. We used the net
proceeds for general corporate purposes.
In the third quarter of fiscal 2024, we issued $
. We used the net
proceeds to repay $
.
In the second quarter of fiscal 2024, we issued €
. We used the net proceeds
to repay €
.
In the second quarter of fiscal 2024, we issued $
. We used the net
proceeds to repay $
, and for general corporate purposes.
64
In the first quarter of fiscal 2024, we issued €
. We used the net proceeds to
repay €
.
In the fourth quarter of fiscal 2023, we issued €
. We used the net proceeds
to repay €
.
In the fourth quarter of fiscal 2023, we issued €
. We used the net
proceeds to repay €
.
In the fourth quarter of fiscal 2023, we issued $
. We used the net
proceeds to repay our outstanding commercial paper and for general corporate purposes.
In the second quarter of fiscal 2023, we issued $
. 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 €
. We used the net proceeds to
repay €
.
In the second quarter of fiscal 2023, we repaid $
, using proceeds
from the issuance of commercial paper.
65
A summary of our long-term debt is as follows:
In Millions
May 26, 2024
May 28, 2023
% notes due
April 17, 2028
$
$
% notes due
March 29, 2033
Euro-denominated
% notes due
April 13, 2029
% notes due
April 17, 2025
% notes due
February 10, 2027
% notes due
April 15, 2030
Euro-denominated
% notes due
January 15, 2026
% notes due
February 1, 2051
Euro-denominated
% notes due
November 15, 2025
Euro-denominated floating rate notes due
November 8, 2024
Euro-denominated
% notes due
October 23, 2030
Euro-denominated
% notes due
April 23, 2034
% notes due
November 18, 2025
% notes due
January 30, 2027
% notes due
October 17, 2028
% notes due
October 14, 2031
% notes due
April 17, 2048
% notes due
February 15, 2043
Euro-denominated
% notes due
April 27, 2027
% notes due
June 15, 2040
% notes due
April 17, 2038
Euro-denominated floating rate notes due
November 8, 2024
Medium-term notes,
% to
%, due fiscal
Euro-denominated floating rate notes due
July 27, 2023
% notes due
February 15, 2024
Floating rate notes due
October 17, 2023
Euro-denominated floating rate notes due
November 10, 2023
Other
(275.8 )
(298.0 )
Less amount due within one year
(1,614.1 )
(1,709.1 )
Total long-term debt
$
$
Principal payments due on long-term debt and finance leases in the next five fiscal years based on stated contractual maturities, our
intent to redeem, or put rights of certain note holders are as follows:
In Millions
Fiscal 2025
$
Fiscal 2026
Fiscal 2027
Fiscal 2028
Fiscal 2029
Certain of our long-term debt agreements contain restrictive covenants.
66
As of May 26, 2024, the $
will be reclassified to net interest over the remaining lives of the hedged transactions. The amount expected to be reclassified from
AOCI to net interest in fiscal 2025 is a $
NOTE 10. REDEEMABLE AND NONCONTROLLING INTERESTS
Our principal noncontrolling interest relates to our General Mills Cereals, LLC (GMC) subsidiar y.
The third-party holder of the 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 $
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 in exchange for Sodiaal’s interest in our Canadian yogurt business, a modified agreement for the use of
Yoplait
Liberté
brands in the United States and Canada, and cash. Please see Note 3 to the Consolidated Financial Statements.
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
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.
We paid dividends of $
Marques Sàrl shareholder agreements.
For financial reporting purposes, the assets, liabilities, results of operations, and cash flows of our non-wholly owned consolidated
subsidiaries are included in our Consolidated Financial Statements. The third-party investor’s share of the net earnings of these
subsidiaries is reflected in net earnings attributable to redeemable and noncontrolling interests in our Consolidated Statements of
Earnings.
NOTE 11. STOCKHOLDERS’ EQUITY
Cumulative preference stock of
On June 27, 2022, our Board of Directors authorized the repurchase of up to
the authorization can be made in the open market or in privately negotiated transactions, including the use of call options and other
derivative instruments, Rule 10b5-1 trading plans, and accelerated repurchase programs. The authorization has no specified
termination date.
Share repurchases were as follows:
Fiscal Year
In Millions
2024
2023
2022
Shares of common stock
Aggregate purchase price
$
$
$
67
The following tables provide details of total comprehensive income:
Fiscal 2024
General Mills
Noncontrolling
Interests
In Millions
Pretax
Tax
Net
Net
Net earnings, including earnings attributable to
$
$
Other comprehensive (loss) income:
Foreign currency translation
$
(98.4 )
$
(86.7 )
Net actuarial loss
(239.4 )
(187.1 )
Other fair value changes:
Hedge derivatives
(4.4 )
(3.2 )
Reclassification to earnings:
Hedge derivatives (a)
(4.1 )
(2.5 )
Amortization of losses and prior service costs (b)
(9.8 )
Other comprehensive (loss) income
(299.8 )
(242.8 )
Total comprehensive income
$
$
(a) Gain 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.
Fiscal 2023
General Mills
Noncontrolling
Interests
In Millions
Pretax
Tax
Net
Net
Net earnings, including earnings attributable to
$
$
Other comprehensive (loss) income:
Foreign currency translation
$
(110.2 )
$
(0.3 )
(110.5 )
(0.3 )
Net actuarial loss
(295.5 )
(228.0 )
Other fair value changes:
Hedge derivatives
(2.5 )
Reclassification to earnings:
Foreign currency translation (a)
(7.4 )
(7.4 )
Hedge derivatives (b)
(24.7 )
(18.7 )
Amortization of losses and prior service costs (c)
(16.0 )
Other comprehensive loss
(361.1 )
(306.4 )
(0.3 )
Total comprehensive income
$
$
(a) Gain reclassified from AOCI into earnings is reported in the divestitures gain.
(b) Gain 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.
68
Fiscal 2022
General Mills
Noncontrolling
Interests
Redeemable
Interest
In Millions
Pretax
Tax
Net
Net
Net
Net earnings, including earnings attributable to
$
$
$
Other comprehensive income (loss):
Foreign currency translation
$
(188.5 )
$
(102.7 )
(26.2 )
(47.0 )
Net actuarial gain
(30.8 )
Other fair value changes:
Hedge derivatives
(23.6 )
Reclassification to earnings:
Foreign currency translation (a)
Hedge derivatives (b)
(0.2 )
Amortization of losses and prior service costs (c)
(21.6 )
Other comprehensive income (loss)
(26.2 )
(46.7 )
Total comprehensive income (loss)
$
$
(16.0 )
$
(29.2 )
(a) Loss reclassified from AOCI into earnings is reported in divestitures gain related to the divestiture of our interests in Yoplait
SAS, Yoplait Marques SNC, and Liberte Marques Sarl to Sodiaal in the third quarter of fiscal 2022.
(b) Loss (gain) 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.
In fiscal 2024, 2023, and 2022, except for certain reclassifications to earnings, changes in other comprehensive income (loss) were
primarily non-cash items.
Accumulated other comprehensive loss balances, net of tax effects, were as follows:
In Millions
May 26, 2024
May 28, 2023
Foreign currency translation adjustments
$
(795.3 )
$
(708.6 )
Unrealized gain from hedge derivatives
Pension, other postretirement, and postemployment benefits:
Net actuarial loss
(1,806.3 )
(1,670.6 )
Prior service credits
Accumulated other comprehensive loss
$
(2,519.7 )
$
(2,276.9 )
NOTE 12. STOCK PLANS
We use broad-based stock plans to help ensure that management’s interests are aligned with those of our shareholders. As of May 26,
2024, a total of
shares of unrestricted stock under the 2022 Stock Compensation Plan (2022 Plan). The 2022 Plan also provides for the issuance of
cash-settled share-based units, stock appreciation rights, and performance-based stock awards. Stock-based awards now outstanding
include some granted under the 2017 Stock Compensation Plan, under which no further awards may be granted. The stock plans
provide for potential accelerated vesting of awards upon retirement, termination, or death of eligible employees and directors.
69
Stock Options
The estimated fair values of stock options granted and the assumptions used for the Black-Scholes option-pricing model were as
follows:
Fiscal Year
2024
2023
2022
Estimated fair values of stock options granted
$
$
$
Assumptions:
Risk-free interest rate
%
%
%
Expected term
years
years
years
Expected volatility
%
%
%
Dividend yield
%
%
%
Our expected term represents the period of time that options granted are expected to be outstanding based on historical data to
estimate option exercises and employee terminations within the valuation model. Separate groups of employees have similar historical
exercise behavior and therefore were aggregated into a single pool for valuation purposes. The weighted-average expected term for all
employee groups is presented in the table above. The risk-free interest rate for periods during the expected term of the options is based
on the U.S. Treasury zero-coupon yield curve in effect at the time of grant.
Any corporate income tax benefit realized upon exercise or vesting of an award in excess of that previously recognized in earnings
(referred to as a windfall tax benefit) is presented in our Consolidated Statements of Cash Flows as an operating cash flow. Realized
windfall tax benefits and shortfall tax deficiencies related to the exercise or vesting of stock-based awards are recognized in the
Consolidated Statements of Earnings.
Windfall tax benefits from stock-based payments in income tax expense in our Consolidated Statements of Earnings were as follows:
Fiscal Year
In Millions
2024
2023
2022
Windfall tax benefits from stock-based payments
$
$
$
Under the 2022 Plan, options may be priced at
four-year graded vesting or four-year cliff vesting. Options generally expire within
of May 26, 2024, stock option awards outstanding include some granted under the 2017 Stock Compensation Plan.
Information on stock option activity follows:
Options
Outstanding
(Thousands)
Weighted-Average
Exercise Price Per
Share
Weighted-Average
Remaining
Contractual Term
(Years)
Aggregate Intrinsic
Value (Millions)
Balance as of May 28, 2023
$
$
Granted
Exercised
(471.7 )
Forfeited or expired
(123.9 )
Outstanding as of May 26, 2024
$
$
Exercisable as of May 26, 2024
$
$
70
Stock-based compensation expense related to stock option awards was as follows:
Fiscal Year
In Millions
2024
2023
2022
Compensation expense related to stock option awards
$
$
$
Net cash proceeds from the exercise of stock options less shares used for minimum withholding taxes and the intrinsic value of
options exercised were as follows:
Fiscal Year
In Millions
2024
2023
2022
Net cash proceeds
$
$
$
Intrinsic value of options exercised
$
$
$
Restricted Stock, Restricted Stock Units, and Performance Share Units
Stock and units settled in stock subject to a restricted period and a purchase price, if any (as determined by the Compensation
Committee of the Board of Directors), may be granted to key employees under the 2022 Plan. Under the 2022 Plan, restricted stock
and restricted stock units are generally issued with four-year graded vesting or four-year cliff vesting. Performance share units are
earned primarily based on our future achievement of three-year goals for average organic net sales growth and cumulative operating
cash flow and a relative total shareholder return modifier. Performance share units are settled in common stock and are generally
subject to a three-year performance and vesting period. The sale or transfer of these awards is restricted during the vesting period.
Participants holding restricted stock, but not restricted stock units or performance share units, are entitled to vote on matters submitted
to holders of common stock for a vote. These awards accumulate dividends from the date of grant, but participants only receive
payment if the awards vest. As of May 26, 2024, restricted stock units and performance share units include some granted under the
2017 Stock Compensation Plan
Information on restricted stock unit and performance share unit activity follows:
Equity Classified
Liability Classified
Share-Settled Units
(Thousands)
Weighted-Average
Grant-Date Fair
Value
Share-Settled Units
(Thousands)
Weighted-Average
Grant-Date Fair
Value
Non-vested as of May 28, 2023
$
$
Granted
Vested
(1,571.8 )
(18.4 )
Forfeited
(370.1 )
(4.0 )
Non-vested as of May 26, 2024
$
$
Fiscal Year
2024
2023
2022
Number of units granted (thousands)
Weighted-average price per unit
$
$
$
The total grant-date fair value of restricted stock unit awards that vested was $
2023, and $
As of May 26, 2024, unrecognized compensation expense related to non-vested stock options, restricted stock units, and performance
share units was $
, on average.
Stock-based compensation expense related to restricted stock units and performance share units was as follows:
Fiscal Year
In Millions
2024
2023
2022
Compensation expense related to restricted stock units and performance
$
$
$
71
Compensation expense related to stock-based payments recognized in our Consolidated Statements of Earnings includes amounts
recognized in restructuring, impairment, and other exit costs for fiscal year 2022.
NOTE 13. EARNINGS PER SHARE
Basic and diluted EPS were calculated using the following:
Fiscal Year
In Millions, Except per Share Data
2024
2023
2022
Net earnings attributable to General Mills
$
$
$
Average number of common shares - basic EPS
Incremental share effect from: (a)
Stock options
Restricted stock units and performance share units
Average number of common shares - diluted EPS
Earnings per share — basic
$
$
$
Earnings per share — diluted
$
$
$
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:
Fiscal Year
In Millions
2024
2023
2022
Anti-dilutive stock options, restricted stock units,
NOTE 14. RETIREMENT BENEFITS AND POSTEMPLOYMENT BENEFITS
Defined Benefit Pension Plans
We have defined benefit pension plans covering many employees in the United States, Canada, Switzerland, and the United Kingdom.
Benefits for salaried employees are based on length of service and final average compensation. Benefits for hourly employees include
various monthly amounts for each year of credited service. Our funding policy is consistent with the requirements of applicable laws.
We made
any contributions to our principal U.S. plans in fiscal 2025. Our principal U.S. retirement plan covering salaried employees has a
provision that any excess pension assets would be allocated to active participants if the plan is terminated within
in control. All salaried employees hired on or after June 1, 2013, are eligible for a retirement program that does not include a defined
benefit pension plan.
Other Postretirement Benefit Plans
We also sponsor plans that provide health care benefits to many of our retirees in the United States, Canada, and Brazil. The U.S.
salaried health care benefit plan is contributory, with retiree contributions based on years of service. We make decisions to fund
related trusts for certain employees and retirees on an annual basis. We made
or fiscal 2023. We do not expect to be required to make any contributions to these plans in fiscal 2025.
Health Care Cost Trend Rates
Assumed health care cost trends are as follows:
Fiscal Year
2024
2023
Health care cost trend rate for next year
% and
%
% and
%
Rate to which the cost trend rate is assumed to decline (ultimate rate)
%
%
Year that the rate reaches the ultimate trend rate
72
We review our health care cost trend rates annually. Our review is based on data we collect about our health care claims experience
and information provided by our actuaries. This information includes recent plan experience, plan design, overall industry experience
and projections, and assumptions used by other similar organizations. Our initial health care cost trend rate is adjusted as necessary to
remain consistent with this review, recent experiences, and short-term expectations. Our initial health care cost trend rate assumption
is
the ultimate trend rate of
retirees’ benefits increase as a result of health care inflation. The ultimate trend rate is adjusted annually, as necessary, to approximate
the current economic view on the rate of long-term inflation plus an appropriate health care cost premium. Assumed trend rates for
health care costs have an important effect on the amounts reported for the other postretirement benefit plans.
Postemployment Benefit Plans
Under certain circumstances, we also provide accruable benefits, primarily severance, to former or inactive employees in the United
States, Canada, and Mexico. We recognize an obligation for any of these benefits that vest or accumulate with service.
Postemployment benefits that do not vest or accumulate with service (such as severance based solely on annual pay rather than years
of service) are charged to expense when incurred. Our postemployment benefit plans are unfunded.
Summarized financial information about defined benefit pension, other postretirement benefit, and postemployment benefit plans is
presented below:
Defined Benefit Pension
Plans
Other
Postretirement
Benefit Plans
Postemployment
Benefit Plans
Fiscal Year
Fiscal Year
Fiscal Year
In Millions
2024
2023
2024
2023
2024
2023
Change in Plan Assets:
Fair value at beginning of year
$
$
$
$
Actual return on assets
(23.2 )
(413.5 )
(6.6 )
Employer contributions
Plan participant contributions
Benefits payments
(349.5 )
(344.6 )
(44.9 )
(22.4 )
Foreign currency
(4.9 )
Fair value at end of year (a)
$
$
$
$
Change in Projected Benefit Obligation:
Benefit obligation at beginning of year
$
$
$
$
$
$
Service cost
Interest cost
Plan amendment
(9.6 )
Curtailment/other
(13.9 )
(8.5 )
Plan participant contributions
Medicare Part D reimbursements
Actuarial gain
(174.4 )
(538.1 )
(14.1 )
(22.5 )
(10.7 )
Benefits payments
(339.1 )
(336.1 )
(45.7 )
(45.5 )
(24.3 )
(18.5 )
Foreign currency
(5.0 )
(0.2 )
(0.4 )
(0.2 )
Projected benefit obligation at end of year (a)
$
$
$
$
$
$
Plan assets (less) more than benefit obligation as of
$
(362.0 )
$
(192.1 )
$
$
$
(129.0 )
$
(131.0 )
(a) Plan assets and obligations are measured as of
, and
.
During fiscal 2024 and fiscal 2023, the decreases in defined benefit pension obligations and other postretirement obligations were
primarily driven by actuarial gains due to an increase in the discount rate in each respective year.
As of May 26, 2024, other postretirement benefit plans had benefit obligations of $
2023, other postretirement benefit plans had benefit obligations of $
Postemployment benefit plans are not funded and had benefit obligations of $
and May 28, 2023, respectively.
73
The accumulated benefit obligation for all defined benefit pension plans was $
$
Amounts recognized in AOCI as of May 26, 2024, and May 28, 2023, are as follows:
Defined Benefit
Pension Plans
Other Postretirement
Benefit Plans
Postemployment
Benefit Plans
Total
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
In Millions
2024
2023
2024
2023
2024
2023
2024
2023
Net actuarial (loss) gain
$
(1,991.1 )
$
(1,859.7 )
$
$
$
(5.6 )
$
$
(1,806.3 )
$
(1,670.6 )
Prior service (costs) credits
(9.8 )
(4.8 )
(1.1 )
Amounts recorded in accumulated
$
(2,000.9 )
$
(1,864.5 )
$
$
$
$
$
(1,724.6 )
$
(1,574.2 )
Plans with accumulated benefit obligations in excess of plan assets as of May 26, 2024, and May 28, 2023 are as follows:
Defined Benefit Pension Plans
Fiscal Year
In Millions
2024
2023
Projected benefit obligation
$
$
Accumulated benefit obligation
Plan assets at fair value
Components of net periodic benefit expense are as follows:
Defined Benefit Pension Plans
Other Postretirement Benefit
Plans
Postemployment Benefit Plans
Fiscal Year
Fiscal Year
Fiscal Year
In Millions
2024
2023
2022
2024
2023
2022
2024
2023
2022
Service cost
$
$
$
$
$
$
$
$
$
Interest cost
Expected return on
(417.7 )
(420.5 )
(411.1 )
(34.7 )
(31.1 )
(26.7 )
Amortization of losses
(20.4 )
(19.3 )
(10.9 )
Amortization of prior
(21.8 )
(23.2 )
(20.9 )
Other adjustments
(0.1 )
Settlement or
(4.0 )
(0.7 )
(18.4 )
(5.5 )
Net expense (income)
$
$
$
(10.1 )
$
(50.9 )
$
(50.6 )
$
(43.9 )
$
$
$
Assumptions
Weighted-average assumptions used to determine fiscal year-end benefit obligations are as follows:
Defined Benefit Pension
Plans
Other Postretirement
Benefit Plans
Postemployment Benefit
Plans
Fiscal Year
Fiscal Year
Fiscal Year
2024
2023
2024
2023
2024
2023
Discount rate
%
%
%
%
%
%
Rate of salary increases
74
Weighted-average assumptions used to determine fiscal year net periodic benefit expense are as follows:
Defined Benefit Pension Plans
Other Postretirement Benefit
Plans
Postemployment Benefit Plans
Fiscal Year
Fiscal Year
Fiscal Year
2024
2023
2022
2024
2023
2022
2024
2023
2022
Discount rate
%
%
%
%
%
%
%
%
%
Service cost
Interest cost
Rate of
Expected long-term
Discount Rates
We
estimate the service and interest cost components of the net periodic benefit expense for our United States and most of our
international defined benefit pension, other postretirement benefit, and postemployment benefit plans utilizing a full yield curve
approach by applying the specific spot rates along the yield curve used to determine the benefit obligation to the relevant projected
cash flows. Our discount rate assumptions are determined annually as of May 31 for our defined benefit pension, other postretirement
benefit, and postemployment benefit plan obligations. We also use discount rates as of May 31 to determine defined benefit pension,
other postretirement benefit, and postemployment benefit plan income and expense for the following fiscal year. We work with our
outside actuaries to determine the timing and amount of expected future cash outflows to plan participants and, using the Aa Above
Median corporate bond yield, to develop a forward interest rate curve, including a margin to that index based on our credit risk. This
forward interest rate curve is applied to our expected future cash outflows to determine our discount rate assumptions.
75
Fair Value of Plan Assets
The fair values of our pension and postretirement benefit plans’ assets and their respective levels in the fair value hierarchy by asset
category were as follows:
May 31, 2024
May 31, 2023
In Millions
Level 1
Level 2
Level 3
Total
Assets
Level 1
Level 2
Level 3
Total
Assets
Fair value measurement of pension
plan assets:
Equity (a)
$
$
$
$
$
$
$
$
Fixed income (b)
Real asset investments (c)
Other investments (d)
Cash and accruals
Fair value measurement of pension
$
$
$
$
$
$
$
$
Assets measured at net asset value (e)
Total pension plan assets
$
$
Fair value measurement of
postretirement benefit plan assets:
Fixed income (b)
$
$
$
$
$
$
$
$
Cash and accruals
Fair value measurement of
$
$
$
$
$
$
$
$
Assets measured at net asset value (e)
Total postretirement benefit
$
$
(a) Primarily publicly traded common stock for purposes of total return and to maintain equity exposure consistent with policy
allocations. Investments include: United States and international public equity securities, mutual funds, and equity futures valued
at closing prices from national exchanges, commingled funds valued at fair value using the unit values provided by the investment
managers, and certain private equity securities valued using a matrix of pricing inputs reflecting assumptions based on the best
information available.
(b) Primarily government and corporate debt securities and futures for purposes of total return, managing fixed income exposure to
policy allocations, and duration targets. Investments include: fixed income securities and bond futures generally valued at closing
prices from national exchanges, fixed income pricing models, and independent financial analysts; and fixed income commingled
funds valued at unit values provided by the investment managers, which are based on the fair value of the underlying investments.
(c) Publicly traded common stocks in energy, real estate, and infrastructure for the purpose of total return. Investments include:
energy, real estate, and infrastructure securities generally valued at closing prices from national exchanges, and commingled
funds valued at unit values provided by the investment managers, which are based on the fair value of the underlying investments.
(d) Insurance and annuity contracts to provide a stable stream of income for pension retirees. Fair values are based on the fair value
of the underlying investments and contract fair values established by the providers .
(e) Primarily limited partnerships, trust-owned life insurance, common collective trusts, and certain private equity securities that are
measured at fair value using the net asset value per share (or its equivalent) practical expedient and have not been classified in the
fair value hierarchy.
There were
securities previously priced using non-observable inputs resulted in the transfer of $
were
Expected Rate of Return on Plan Assets
Our expected rate of return on plan assets is determined by our asset allocation, our historical long-term investment performance, our
estimate of future long-term returns by asset class (using input from our actuaries, investment services, and investment managers), and
long-term inflation assumptions. We review this assumption annually for each plan; however, our annual investment performance for
one particular year does not, by itself, significantly influence our evaluation.
76
Weighted-average asset allocations for our defined benefit pension and other postretirement benefit plans are as follows:
Defined Benefit Pension Plans
Other Postretirement Benefit Plans
Fiscal Year
Fiscal Year
2024
2023
2024
2023
Asset category:
United States equities
%
%
%
%
International equities
Private equities
Fixed income
Real assets
Total
%
%
%
%
The investment objective for our defined benefit pension and other postretirement benefit plans is to secure the benefit obligations to
participants at a reasonable cost to us. Our goal is to optimize the long-term return on plan assets at a moderate level of risk. The
defined benefit pension plan and other postretirement benefit plan portfolios are broadly diversified across asset classes. Within asset
classes, the portfolios are further diversified across investment styles and investment organizations. For the U.S. defined benefit
pension plans, the long-term investment policy allocation is:
equities;
For other U.S. postretirement benefit plans, the long-term investment policy allocations are:
asset classes may vary tactically around the long-term policy allocations based on relative market valuations.
Contributions and Future Benefit Payments
We do
t expect to be required to make contributions to our defined benefit pension, other postretirement benefit, and
postemployment benefit plans in fiscal 2025. Actual fiscal 2025 contributions could exceed our current projections, as influenced by
our decision to undertake discretionary funding of our benefit trusts and future changes in regulatory requirements. Estimated benefit
payments, which reflect expected future service, as appropriate, are expected to be paid from fiscal 2025 to fiscal 2034 as follows:
In Millions
Defined Benefit
Pension Plans
Other
Postretirement
Benefit Plans
Gross Payments
Postemployment
Benefit Plans
Fiscal 2025
$
$
$
Fiscal 2026
Fiscal 2027
Fiscal 2028
Fiscal 2029
Fiscal 2030-2034
Defined Contribution Plans
The General Mills Savings Plan is a defined contribution plan that covers domestic salaried, hourly, nonunion, and certain union
employees. This plan is a 401(k) savings plan that includes a number of investment funds, including a Company stock fund and an
Employee Stock Ownership Plan (ESOP). We sponsor another money purchase plan for certain domestic hourly employees with net
assets of $
of our foreign locations. Our total recognized expense related to defined contribution plans was $
$
We match a percentage of employee contributions to the General Mills Savings Plan. The Company match is directed to investment
options of the participant’s choosing. The number of shares of our common stock allocated to participants in the ESOP was
million as of May 26, 2024, and
balances.
The Company stock fund and the ESOP collectively held $
2024, and May 28, 2023, respectively.
77
NOTE 15. INCOME TAXES
The components of earnings before income taxes and after-tax earnings from joint ventures and the corresponding income taxes
thereon are as follows:
Fiscal Year
In Millions
2024
2023
2022
Earnings before income taxes and after-tax earnings from joint ventures:
United States
$
$
$
Foreign
Total earnings before income taxes and after-tax earnings from joint ventures
$
$
$
Income taxes:
Currently payable:
Federal
$
$
$
State and local
Foreign
Total current
Deferred:
Federal
State and local
(8.1 )
Foreign
(85.6 )
(23.7 )
(31.1 )
Total deferred
(48.5 )
(22.2 )
Total income taxes
$
$
$
The following table reconciles the United States statutory income tax rate with our effective income tax rate:
Fiscal Year
2024
2023
2022
United States statutory rate
%
%
%
State and local income taxes, net of federal tax benefits
Foreign rate differences
(1.6 )
(1.0 )
(1.1 )
Research and development tax credit
(1.2 )
Stock based compensation
(0.3 )
(1.0 )
(0.6 )
Capital loss (a)
(1.7 )
Divestitures, net
(0.8 )
(1.2 )
Other, net
(0.4 )
(0.2 )
(0.2 )
Effective income tax rate
%
%
%
(a) During fiscal 2022, we released a $
used against divestiture gains.
78
The tax effects of temporary differences that give rise to deferred tax assets and liabilities are as follows:
In Millions
May 26, 2024
May 28, 2023
Accrued liabilities
$
$
Compensation and employee benefits
Pension
Tax credit carryforwards
Stock, partnership, and miscellaneous investments
Capitalized research and development
Capital losses
Net operating losses
Other
Gross deferred tax assets
Valuation allowance
Net deferred tax assets
Brands
Fixed assets
Intangible assets
Tax lease transactions
Inventories
Stock, partnership, and miscellaneous investments
Unrealized hedges
Other
Gross deferred tax liabilities
Net deferred tax liability
$
$
We have established a valuation allowance against certain of the categories of deferred tax assets described above as current evidence
does not suggest we will realize sufficient taxable income of the appropriate character (e.g., ordinary income versus capital gain
income) within the carryforward period to allow us to realize these deferred tax benefits.
Information about our valuation allowance follows:
In Millions
May 26, 2024
Pillsbury acquisition losses
$
State and foreign loss carryforwards
Capital loss carryforwards
Other
Total
$
As of May 26, 2024, we believe it is more-likely-than-not that the remainder of our deferred tax assets are realizable.
Information about our tax loss carryforwards follows
:
In Millions
May 26, 2024
Foreign loss carryforwards
$
Federal operating loss carryforwards
State operating loss carryforwards
Total tax loss carryforwards
$
79
Our foreign loss carryforwards expire as follows:
In Millions
May 26, 2024
Expire in fiscal 2025 and 2026
$
Expire in fiscal 2027 and beyond
Do not expire (a)
Total foreign loss carryforwards
$
(a) Of the total foreign loss carryforwards, $
On August 16, 2022, 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. The IRA did not
have a material impact on our financial results, including our annual estimated effective tax rates and liquidity.
As of May 26, 2024, we have
t recognized a deferred tax liability for unremitted earnings of approximately $
foreign operations because we currently believe our subsidiaries have invested the undistributed earnings indefinitely or the earnings
will be remitted in a tax-neutral transaction. It is not practicable for us to determine the amount of unrecognized tax expense on these
reinvested earnings. Deferred taxes are recorded for earnings of our foreign operations when we determine that such earnings are no
longer indefinitely reinvested. All earnings prior to fiscal 2018 remain permanently reinvested. Earnings from fiscal 2018 and later are
not permanently reinvested and local country withholding taxes are recorded on earnings each year.
We are subject to federal income taxes in the United States as well as various state, local, and foreign jurisdictions. A number of years
may elapse before an uncertain tax position is audited and finally resolved. While it is often difficult to predict the final outcome or the
timing of resolution of any particular uncertain tax position, we believe that our liabilities for income taxes reflect the most likely
outcome. We adjust these liabilities, as well as the related interest, in light of changing facts and circumstances. Settlement of any
particular position would usually require the use of cash.
The number of years with open tax audits varies depending on the tax jurisdiction. Our major taxing jurisdiction is the United States
(federal and state). Various tax examinations by United States state taxing authorities could be conducted for any open tax year, which
vary by jurisdiction, but are generally from
The Internal Revenue Service (IRS) is currently auditing our federal tax returns for fiscal 2018 through 2022. Several state and foreign
examinations are currently in progress. We do not expect these examinations to result in a material impact on our results of operations
or financial position. During fiscal 2024, we received a notice of proposed adjustment from the IRS associated with a capital loss from
fiscal 2019. We believe that we have meritorious defense against this assessment and will vigorously defend our position. We do not
expect the resolution of the proposed adjustment to have a material impact on our financial position or liquidity. We have effectively
settled all issues with the IRS for fiscal years 2015 and prior.
The Brazilian tax authority, Secretaria da Receita Federal do Brasil (RFB), has 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.
We apply a more-likely-than-not threshold to the recognition and derecognition of uncertain tax positions. Accordingly, we recognize
the amount of tax benefit that has a greater than 50 percent likelihood of being ultimately realized upon settlement. Future changes in
judgment related to the expected ultimate resolution of uncertain tax positions will affect earnings in the period of such change.
80
The following table sets forth changes in our total gross unrecognized tax benefit liabilities, excluding accrued interest, for fiscal 2024
and fiscal 2023. Approximately $
effective income tax rate in future periods. This amount differs from the gross unrecognized tax benefits presented in the table because
certain portions of the liabilities below would impact deferred taxes if recognized. We also would record a decrease in U.S. federal
income taxes upon recognition of the state tax benefits included therein.
Fiscal Year
In Millions
2024
2023
Balance, beginning of year
$
$
Tax positions related to current year:
Additions
Tax positions related to prior years:
Additions
Reductions
(55.2 )
(0.9 )
Settlements
(0.8 )
(4.7 )
Lapses in statutes of limitations
(7.1 )
(6.9 )
Balance, end of year
$
$
As of May 26, 2024, we do
t expect to pay unrecognized tax benefit liabilities and accrued interest within the next 12 months. We
are not able to reasonably estimate the timing of future cash flows beyond 12 months due to uncertainties in the timing of tax audit
outcomes. Our unrecognized tax benefit liability was classified in other liabilities.
We report accrued interest and penalties related to unrecognized tax benefit liabilities in income tax expense. For fiscal 2024, we
recognized a net benefit of $
as of May 26, 2024. For fiscal 2023, we recognized $
accrued interest and penalties as of May 28, 2023.
NOTE 16. COMMITMENTS AND CONTINGENCIES
As of May 26, 2024, we have issued guarantees and comfort letters of $
consolidated affiliates, mainly CPW. Off-balance sheet arrangements were not material as of May 26, 2024.
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
May 26, 2024
, we are unable to estimate
any possible loss and have not recorded a loss contingency for this matter.
NOTE 17. BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION
We operate in the packaged foods industry. Our operating segments are as follows: North America Retail, International, Pet, and
North America Foodservice.
Our North America Retail operating segment reflects business with a wide variety of grocery stores, mass merchandisers, membership
stores, natural food chains, drug, dollar and discount chains, convenience stores, and e-commerce grocery providers. Our product
categories in this business segment include ready-to-eat cereals, refrigerated yogurt, soup, meal kits, refrigerated and frozen dough
products, dessert and baking mixes, frozen pizza and pizza snacks, snack bars, fruit snacks, savory snacks, and a wide variety of
organic products including ready-to-eat cereal, frozen and shelf-stable vegetables, meal kits, fruit snacks and snack bars.
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,
shelf-stable vegetables, and pet food products. 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
81
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. Results from certain businesses managed by our Gold Medal Ventures entity are included within corporate and
other net sales and unallocated corporate items within operating profit. Unallocated corporate items also include corporate overhead
expenses, variances to planned North American employee benefits and incentives, certain charitable contributions, restructuring
initiative project-related costs, gains and losses on corporate investments, and other items that are not part of our measurement of
segment operating performance. These include gains and losses arising from the revaluation of certain grain inventories and gains and
losses from mark-to-market valuation of certain commodity positions until passed back to our operating segments. These items
affecting operating profit are centrally managed at the corporate level and are excluded from the measure of segment profitability
reviewed by executive management. Under our supply chain organization, our manufacturing, warehouse, and distribution activities
are substantially integrated across our operations in order to maximize efficiency and productivity. As a result, fixed assets and
depreciation and amortization expenses are neither maintained nor available by operating segment.
Our operating segment results were as follows:
Fiscal Year
In Millions
2024
2023
2022
Net sales:
North America Retail
$
$
$
International
Pet
North America Foodservice
Total segment net sales
$
$
$
Corporate and other
Total net sales
$
$
$
Operating profit:
North America Retail
$
$
$
International
Pet
North America Foodservice
Total segment operating profit
$
$
$
Unallocated corporate items
Divestitures gain, net
(444.6 )
(194.1 )
Restructuring, impairment, and other exit costs (recoveries)
(26.5 )
Operating profit
$
$
$
Net sales for our North America Retail operating units were as follows:
Fiscal Year
In Millions
2024
2023
2022
U.S. Meals & Baking Solutions
$
$
$
U.S. Morning Foods
U.S. Snacks
Canada
Total
$
$
$
82
Net sales by class of similar products were as follows:
Fiscal Year
In Millions
2024
2023
2022
Snacks
$
$
$
Cereal
Convenient meals
Dough
Pet
Baking mixes and ingredients
Yogurt
Super-premium ice cream
Other
Total
$
$
$
The following tables provide financial information by geographic area:
Fiscal Year
In Millions
2024
2023
2022
Net sales:
United States
$
$
$
Non-United States
Total
$
$
$
In Millions
May 26, 2024
May 28, 2023
Cash and cash equivalents:
United States
$
$
Non-United States
Total
$
$
In Millions
May 26, 2024
May 28, 2023
Land, buildings, and equipment:
United States
$
$
Non-United States
Total
$
$
NOTE 18. SUPPLEMENTAL INFORMATION
The components of certain Consolidated Balance Sheets accounts are as follows:
In Millions
May 26, 2024
May 28, 2023
Receivables:
Customers
$
$
Less allowance for doubtful accounts
(25.0 )
(26.9 )
Total
$
$
83
In Millions
May 26, 2024
May 28, 2023
Inventories:
Finished goods
$
$
Raw materials and packaging
Grain
Excess of FIFO over LIFO cost (a)
(541.1 )
(600.9 )
Total
$
$
(a) Inventories of $
2024, LIFO inventory layers were reduced. Results of operations were not materially affected by these liquidations of LIFO
inventory. The difference between replacement cost and the stated LIFO inventory value is not materially different from the
reserve for the LIFO valuation method.
In Millions
May 26, 2024
May 28, 2023
Prepaid expenses and other current assets:
Prepaid expenses
$
$
Other receivables
Derivative receivables
Grain contracts
Marketable investments
Miscellaneous
Total
$
$
In Millions
May 26, 2024
May 28, 2023
Land, buildings, and equipment:
Equipment
$
$
Buildings
Construction in progress
Capitalized software
Land
Equipment under finance lease
Buildings under finance lease
Total land, buildings, and equipment
Less accumulated depreciation
(7,236.5 )
(6,933.4 )
Total
$
$
In Millions
May 26, 2024
May 28, 2023
Other assets:
Investments in and advances to joint ventures
$
$
Right of use operating lease assets
Deferred income taxes
Pension assets
Life insurance
Miscellaneous
Total
$
$
84
In Millions
May 26, 2024
May 28, 2023
Other current liabilities:
Accrued trade and consumer promotions
$
$
Accrued payroll
Current portion of operating lease liabilities
Accrued interest, including interest rate swaps
Accrued taxes
Dividends payable
Derivative payables
Restructuring and other exit costs reserve
Grain contracts
Miscellaneous
Total
$
$
In Millions
May 26, 2024
May 28, 2023
Other non-current liabilities:
Accrued compensation and benefits, including obligations for underfunded other
$
$
Non-current portion of operating lease liabilities
Accrued taxes
Miscellaneous
Total
$
$
Certain Consolidated Statements of Earnings amounts are as follows:
Fiscal Year
In Millions
2024
2023
2022
Depreciation and amortization
$
$
$
Research and development expense
Advertising and media expense (including production and
The components of interest, net are as follows:
Fiscal Year
In Millions
2024
2023
2022
Interest expense
$
$
$
Capitalized interest
(11.4 )
(4.4 )
(3.8 )
Interest income
(18.8 )
(14.0 )
(3.8 )
Interest, net
$
$
$
Certain Consolidated Statements of Cash Flows amounts are as follows:
Fiscal Year
In Millions
2024
2023
2022
Cash interest payments
$
$
$
Cash paid for income taxes
85
NOTE 19. QUARTERLY DATA (UNAUDITED)
Summarized quarterly data for fiscal 2024 and fiscal 2023 follows:
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
In Millions, Except Per
2024
2023
2024
2023
2024
2023
2024
2023
Net sales
$
$
$
$
$
$
$
$
Gross margin
Net earnings attributable to
EPS:
Basic
$
$
$
$
$
$
$
$
Diluted
$
$
$
$
$
$
$
$
In the fourth quarter of fiscal 2024, we recorded $
Top Chews
,
True
Chews
, and
EPIC
transaction costs related to our acquisition of a pet food business in Europe .
In the fourth quarter fiscal 2023, we approved restructuring actions to enhance the efficiency of our global supply chain structure and
recorded $
shops network and recorded $
recall of certain international
Häagen-Dazs
ice cream products as a result of an insurance recovery.
86
Glossary
AOCI.
Adjusted diluted EPS.
Adjusted operating profit.
Adjusted operating profit margin.
sales.
Constant currency.
rates in effect for the comparable prior-year period
.
currencies other than United States dollars are translated into United States dollars at the average exchange rates in effect during the
corresponding period of the prior fiscal year, rather than the actual average exchange rates in effect during the current fiscal year
.
Therefore, the foreign currency impact is equal to current year results in local currencies multiplied by the change in the average
foreign currency exchange rate between the current fiscal period and the corresponding period of the prior fiscal year.
Core working capital.
Derivatives.
changes in commodity prices, interest rates, foreign exchange rates, and equity prices.
Earnings before interest, taxes, depreciation and amortization (EBITDA
)
.
after-tax earnings from joint ventures, net interest, depreciation and amortization.
Euribor.
Fair value hierarchy.
the assumptions (inputs) used in valuing the asset or liability. Level 1 provides the most reliable measure of fair value, while Level 3
generally requires significant management judgment. The three levels are defined as follows:
Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2: Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in
active markets or quoted prices for identical assets or liabilities in inactive markets .
Level 3: Unobservable inputs reflecting management’s assumptions about the inputs used in pricing the asset or liability.
Free cash flow.
Free cash flow conversion rate.
noncontrolling interests adjusted for certain items affecting year-to-year comparability.
Generally accepted accounting principles (GAAP).
and reporting accounting information in our financial statements.
Goodwill.
interests and the related fair values of net assets acquired.
Gross margin.
Hedge accounting.
changes in the hedged item in the same reporting period
.
items only if the hedging relationship is highly effective, and only prospectively from the date a hedging relationship is formally
documented.
Holistic Margin Management (HMM).
to offset input cost inflation, protect margins , and generate funds to reinvest in sales-generating activities.
87
Interest bearing instruments.
interest bearing investments classified within prepaid expenses and other current assets and other assets.
Mark-to-market.
on the current market price for that item.
Net debt.
Net debt-to-adjusted EBITDA ratio.
Net mark-to-market valuation of certain commodity positions.
that will be allocated to segment operating profit when the exposure we are hedging affects earnings.
Net price realization.
Net realizable value.
The estimated selling price in the ordinary course of business, less reasonably predictable costs of completion,
disposal, and transportation.
Noncontrolling interests.
Notional principal amount.
OCI.
Operating cash flow conversion rate.
attributable to redeemable and noncontrolling interests.
Operating cash flow to net debt ratio.
Organic net sales growth.
rd
week impact, when applicable.
Project-related costs.
Redeemable interest.
therefore cannot be classified as a noncontrolling interest in equity.
Reporting unit.
SOFR.
Secured Overnight Financing Rate.
Strategic Revenue Management (SRM).
realization and mix by identifying and executing against specific opportunities to apply tools including pricing, sizing, mix
management, and promotion optimization across each of our businesses.
Supply chain input costs.
management, logistics, and warehousing.
Total debt.
Translation adjustments.
purpose of consolidating our financial statements.
Working capital.
ITEM 9 - Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
None.
88
ITEM 9A - Controls and Procedures
We, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial
Officer, have evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule
13a-15(e) under the 1934 Act). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that,
as of May 26, 2024, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in
reports that we file or submit under the 1934 Act is (1) recorded, processed, summarized, and reported within the time periods
specified in applicable rules and forms, and (2) accumulated and communicated to our management, including our Chief Executive
Officer and Chief Financial Officer, in a manner that allows timely decisions regarding required disclosure.
There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the 1934 Act) during our
fiscal quarter ended May 26, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over
financial reporting.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The management of General Mills, Inc. is responsible for establishing and maintaining adequate internal control over financial
reporting, as such term is defined in Rule 13a-15(f) under the 1934 Act. The Company’s internal control system was designed to
provide reasonable assurance to our management and the Board of Directors regarding the preparation and fair presentation of
published financial statements. Under the supervision and with the participation of management, including our Chief Executive
Officer and Chief Financial Officer, we conducted an assessment of the effectiveness of our internal control over financial reporting as
of May 26, 2024. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO) in
Internal Control – Integrated Framework (2013)
.
Based on our assessment using the criteria set forth by COSO in
Internal Control – Integrated Framework (2013)
, management
concluded that our internal control over financial reporting was effective as of May 26, 2024.
KPMG LLP, our independent registered public accounting firm, has issued a report on the effectiveness of the Company’s internal
control over financial reporting.
/s/ J. L. Harmening /s/ K. A. Bruce
J. L. Harmening K. A. Bruce
Chief Executive Officer Chief Financial Officer
June 26, 2024
Our independent registered public accounting firm’s attestation report on our internal control over financial reporting is included in the
“Report of Independent Registered Public Accounting Firm” in Item 8 of this report.
ITEM 9B - Other Information
During the fiscal quarter ended May 26, 2024, no director or officer of the Company
adopted
terminated
arrangement” or “
non-Rule
10b5-1
ITEM 9C - Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
PART III
ITEM 10 - Directors, Executive Officers and Corporate Governance
The information contained in the sections entitled “Proposal Number 1 - Election of Directors,” “Shareholder Director Nominations,”
and “Delinquent Section 16(a) Reports” contained in our definitive Proxy Statement for our 2024 Annual Meeting of Shareholders is
incorporated herein by reference. The information regarding our insider trading policy set forth in the section entitled “Key Policies –
Supplemental Information” contained in our definitive Proxy Statement for our 2024 Annual Meeting of Shareholders is incorporated
herein by reference.
Information regarding our executive officers is set forth in Item 1 of this report.
89
The information regarding our Audit Committee, including the members of the Audit Committee and audit committee financial
experts, set forth in the section entitled “Board Committees and Their Functions” contained in our definitive Proxy Statement for our
2024 Annual Meeting of Shareholders is incorporated herein by reference.
We have adopted a Code of Conduct applicable to all employees, including our principal executive officer, principal financial officer,
and principal accounting officer. A copy of the Code of Conduct is available on our website at https://www.general mills.com.
We
intend to post on our website any amendments to our Code of Conduct and any waivers from our Code of Conduct for principal
officers.
ITEM 11 - Executive Compensation
The information contained in the sections entitled “Executive Compensation,” “Director Compensation,” and “Overseeing Risk
Management” in our definitive Proxy Statement for our 2024 Annual Meeting of Shareholders is incorporated herein by reference.
ITEM 12 - Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information contained in the section entitled “Ownership of General Mills Common Stock by Directors, Officers and Certain
Beneficial Owners” in our definitive Proxy Statement for our 2024 Annual Meeting of Shareholders is incorporated herein by
reference.
Equity Compensation Plan Information
The following table provides certain information as of May 26, 2024, with respect to our equity compensation plans:
Plan Category
Number of Securities to be
Issued upon Exercise of
Outstanding Options,
Warrants and Rights (1)
Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and
Rights (2) (a)
Number of Securities Remaining
Available for Future Issuance Under
Equity Compensation Plans (Excluding
Securities Reflected in Column (1)) (3)
Equity compensation plans
18,812,894
(b)
$
59.19
32,590,666
(d)
Equity compensation plans
92,110
(c)
-
-
Total
18,905,004
$
59.19
32,590,666
(a)
Only includes the weighted-average exercise price of outstanding options, whose weighted-average term is 5.05 years.
(b)
Includes 12,044,367 stock options, 3,335,148 restricted stock units, 1,323,984 performance share units (assuming pay out for
target performance), and 2,109,395 restricted stock units that have vested and been deferred.
(c)
Includes 92,110 restricted stock units that have vested and been deferred. These awards were made in lieu of salary increases
and certain other compensation and benefits. We granted these awards under our 1998 Employee Stock Plan, which provided
for the issuance of stock options, restricted stock, and restricted stock units to attract and retain employees and to align their
interest with those of shareholders. We discontinued the 1998 Employee Stock Plan in September 2003, and no future awards
may be granted under that plan.
(d)
Includes stock options, restricted stock, restricted stock units, shares of unrestricted stock, stock appreciation rights, and
performance awards that we may award under our 2022 Stock Compensation Plan, which has 32,590,666 shares available for
grant at May 26, 2024.
ITEM 13 - Certain Relationships and Related Transactions, and Director Independence
The information set forth in the section entitled “Board Independence and Related Person Transactions” contained in our definitive
Proxy Statement for our 2024 Annual Meeting of Shareholders is incorporated herein by reference.
ITEM 14 - Principal Accountant Fees and Services
The information contained in the section entitled “Independent Registered Public Accounting Firm Fees” in our definitive Proxy
Statement for our 2024 Annual Meeting of Shareholders is incorporated herein by reference.
90
PART IV
ITEM 15 – Exhibits and Financial Statement Schedules
1. Financial Statements:
The following financial statements are included in Item 8 of this report:
Consolidated Statements of Earnings for the fiscal years ended May 26, 2024, May 28, 2023, and May 29, 2022.
Consolidated Statements of Comprehensive Income for the fiscal years ended May 26, 2024, May 28, 2023, and May 29,
2022.
Consolidated Balance Sheets as of May 26, 2024 and May 28, 2023.
Consolidated Statements of Cash Flows for the fiscal years ended May 26, 2024, May 28, 2023, and May 29, 2022.
Consolidated Statements of Total Equity and Redeemable Interest for the fiscal years ended May 26, 2024, May 28, 2023,
and May 29, 2022.
Notes to Consolidated Financial Statements.
Report of Management Responsibilities.
Report of Independent Registered Public Accounting Firm. PCAOB ID:
.
2. Financial Statement Schedule:
For the fiscal years ended May 26, 2024, May 28, 2023, and May 29, 2022:
II – Valuation and Qualifying Accounts
91
3.
Exhibits
:
Exhibit No.
Description
Amended and Restated Certificate of Incorporation of the Company (incorporated herein by
reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed October 1, 2021).
By-laws of the Company (incorporated herein by reference to Exhibit 3 to the Company’s
Current Report on Form 8-K filed January 30, 2024).
Indenture, dated as of February 1, 1996, between the Company and U.S. Bank National
Association (f/k/a First Trust of Illinois, National Association) (incorporated herein by
reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-3 filed February
6, 1996 (File no. 333-00745)).
First Supplemental Indenture, dated as of May 18, 2009, between the Company and U.S. Bank
National Association (incorporated herein by reference to Exhibit 4.2 to Registrant’s Annual
Report on Form 10-K for the fiscal year ended May 31, 2009).
Description of the Company’s registered securities.
2001 Compensation Plan for Non-Employee Directors (incorporated herein by reference to
Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended
August 29, 2010).
2006 Compensation Plan for Non-Employee Directors (incorporated herein by reference to
Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended
August 29, 2010).
2011 Stock Compensation Plan (incorporated herein by reference to Exhibit 10.6 to the
Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2015).
2011 Compensation Plan for Non-Employee Directors (incorporated herein by reference to
Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended
November 27, 2011).
2016 Compensation Plan for Non-Employee Directors (incorporated herein by reference to
Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended
November 27, 2016).
Executive Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the Company’s
Quarterly Report on Form 10-Q for the fiscal quarter ended November 28, 2010).
Separation Pay and Benefits Program for Officers (incorporated herein by reference to Exhibit
10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended February
23, 2020).
Supplemental Savings Plan (incorporated herein by reference to Exhibit 10.4 to the Company’s
Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2021).
Supplemental Retirement Plan (Grandfathered) (incorporated herein by reference to Exhibit
10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended February
28, 2021).
2005 Supplemental Retirement Plan (incorporated herein by reference to Exhibit 10.3 to the
Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2021).
Deferred Compensation Plan (Grandfathered) (incorporated herein by reference to Exhibit
10.14 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended February
22, 2009).
2005 Deferred Compensation Plan (incorporated herein by reference to Exhibit 10.5 to the
Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2021).
Executive Survivor Income Plan (incorporated herein by reference to Exhibit 10.6 to the
Company’s Annual Report on Form 10-K for the fiscal year ended May 29, 2005).
92
Supplemental Benefits Trust Agreement, amended and restated as of September 26, 1988,
between the Company and Norwest Bank Minnesota, N.A. (incorporated herein by reference to
Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended
November 27, 2011).
Supplemental Benefits Trust Agreement, dated September 26, 1988, between the Company and
Norwest Bank Minnesota, N.A. (incorporated herein by reference to Exhibit 10.4 to the
Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 27, 2011).
Form of Performance Share Unit Award Agreement (incorporated herein by reference to
Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended
August 27, 2023).
Form of Stock Option Agreement (incorporated herein by reference to Exhibit 10.2 to the
Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended August 27, 2023).
Form of Restricted Stock Unit Agreement (incorporated herein by reference to Exhibit 10.3 to
the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended August 27, 2023).
Deferred Compensation Plan for Non-Employee Directors (incorporated herein by reference to
Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended
November 26, 2017).
2017 Stock Compensation Plan (incorporated herein by reference to Exhibit 10.2 to the
Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 26, 2017).
Supplemental Retirement Plan I (Grandfathered) (incorporated herein by reference to Exhibit
10.2 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended February
28, 2021).
Supplemental Retirement Plan I (incorporated herein by reference to Exhibit 10.6 to the
Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended February 28, 2021).
2022 Stock Compensation Plan (incorporated herein by reference to Exhibit 10.1 to the
Company's Current Report on Form 8-K filed September 30, 2022).
Agreements, dated November 29, 1989, by and between the Company and Nestle S.A.
(incorporated herein by reference to Exhibit 10.15 to the Company’s Annual Report on Form
10-K for the fiscal year ended May 28, 2000).
Protocol of Cereal Partners Worldwide, dated November 21, 1989, and Addendum No. 1 to
Protocol, dated February 9, 1990, between the Company and Nestle S.A. (incorporated herein
by reference to Exhibit 10.16 to the Company’s Annual Report on Form 10-K for the fiscal
year ended May 27, 2001).
Addendum No. 2 to the Protocol of Cereal Partners Worldwide, dated March 16, 1993,
between the Company and Nestle S.A. (incorporated herein by reference to Exhibit 10.18 to the
Company’s Annual Report on Form 10-K for the fiscal year ended May 30, 2004).
Addendum No. 3 to the Protocol of Cereal Partners Worldwide, effective as of March 15, 1993,
between the Company and Nestle S.A. (incorporated herein by reference to Exhibit 10.2 to the
Company’s Annual Report on Form 10-K for the fiscal year ended May 28, 2000).
+
Addendum No. 4, effective as August 1, 1998, and Addendum No. 5, effective as April 1,
2000, to the Protocol of Cereal Partners Worldwide between the Company and Nestle S.A.
(incorporated herein by reference to Exhibit 10.26 to the Company’s Annual Report on Form
10-K for the fiscal year ended May 31, 2009).
Addendum No. 10 to the Protocol of Cereal Partners Worldwide, effective January 1, 2010,
among the Company, Nestle S.A., and CPW S.A. (incorporated herein by reference to Exhibit
10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended February
28, 2010).
Five-Year Credit Agreement, dated as of April 12, 2021, as amended April 3, 2023, among the
Company, the several financial institutions from time to time party to the agreement, and Bank
of America, N.A., as Administrative Agent (incorporated herein by reference to Exhibit 10.30
to the Company’s Annual Report on Form 10-K for the fiscal year ended May 28, 2023).
93
Insider trading policies of the Company
Subsidiaries of the Company.
Consent of Independent Registered Public Accounting Firm.
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
Mandatory Executive Compensation Clawback Policy.
101
The following materials from the Company’s Annual Report on Form 10-K for the fiscal year
ended May 26, 2024, formatted in Inline Extensible Business Reporting Language: (i) the
Consolidated Balance Sheets; (ii) the Consolidated Statements of Earnings; (iii) the
Consolidated Statements of Comprehensive Income; (iv) the Consolidated Statements of Total
Equity and Redeemable Interest; (v) the Consolidated Statements of Cash Flows; (vi) the Notes
to Consolidated Financial Statements; and (vii) Schedule II – Valuation of Qualifying
Accounts.
104
Cover Page, formatted in Inline Extensible Business Reporting Language and contained in
Exhibit 101.
_____________
* Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 15 of Form
10-K.
+ Confidential information has been omitted from the exhibit and filed separately with the SEC pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934.
Pursuant to Item 601(b)(4)(iii) of Regulation S-K, copies of certain instruments defining the rights of holders of our long-term debt are
not filed and, in lieu thereof, we agree to furnish copies to the SEC upon request.
ITEM 16 - Form 10-K Summary
Not Applicable.
94
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
GENERAL MILLS, INC.
Date: June 26, 2024
By /s/ Mark A. Pallot
Name: Mark A. Pallot
Title: Vice President, Chief Accounting Officer
95
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Jeffrey L Harmening
Jeffrey L. Harmening
Chairman of the Board, Chief Executive Officer, and Director
(Principal Executive Officer)
June 26, 2024
/s/ Kofi A. Bruce
Kofi A. Bruce
Chief Financial Officer
(Principal Financial Officer)
June 26, 2024
/s/ Mark A. Pallot
Mark A. Pallot
Vice President, Chief Accounting Officer
(Principal Accounting Officer)
June 26, 2024
/s/ R. Kerry Clark
R. Kerry Clark
Director
June 26, 2024
/s/ Benno O. Dorer
Benno O. Dorer
Director
June 26, 2024
/s/ C. Kim Goodwin
Director
June 26, 2024
C. Kim Goodwin
/s/ Maria G. Henry
Maria G. Henry
Director
June 26, 2024
/s/ Jo Ann Jenkins
Jo Ann Jenkins
Director
June 26, 2024
/s/ Elizabeth C. Lempres
Elizabeth C. Lempres
Director
June 26, 2024
/s/ John G. Morikis
John. G. Morikis
Director
June 26, 2024
/s/ Diane L. Neal
Diane L. Neal
Director
June 26, 2024
/s/ Steve Odland
Steve Odland
Director
June 26, 2024
/s/ Maria A. Sastre
Maria A. Sastre
Director
June 26, 2024
/s/ Eric D. Sprunk
Eric D. Sprunk
Director
June 26, 2024
/s/ Jorge A. Uribe
Jorge A. Uribe
Director
June 26, 2024
96
General Mills, Inc. and Subsidiaries
Schedule II - Valuation of Qualifying Accounts
Fiscal Year
In Millions
2024
2023
2022
Allowance for doubtful accounts:
Balance at beginning of year
$
$
$
Additions charged to expense
Bad debt write-offs
(29.4 )
(28.6 )
(26.4 )
Other adjustments and reclassifications
(0.1 )
(2.4 )
(4.3 )
Balance at end of year
$
$
$
Valuation allowance for deferred tax assets:
Balance at beginning of year
$
$
$
Additions charged (benefits) to expense
(2.3 )
(41.6 )
Adjustments due to acquisitions, translation of amounts, and other
(1.4 )
(3.0 )
(2.5 )
Balance at end of year
$
$
$
Reserve for restructuring and other exit charges:
Balance at beginning of year
$
$
$
Additions charged to expense, including translation amounts
Reserve adjustment
(34.0 )
Net amounts utilized for restructuring activities
(33.0 )
(30.8 )
(81.4 )
Balance at end of year
$
$
$
Reserve for LIFO valuation:
Balance at beginning of year
$
$
$
Increase
(59.8 )
Balance at end of year
$
$
$