UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
10-Q
(Mark One)
 
☑
 
QUARTERLY
 
REPORT
 
PURSUANT
 
TO
 
SECTION
 
13
 
OR
 
15(d)
 
OF
 
THE
 
SECURITIES
 
EXCHANGE
 
ACT
 
OF
 
1934
FOR THE QUARTERLY
 
PERIOD ENDED
AUGUST 27,NOVEMBER 26, 2023
☐
 
TRANSITION
 
REPORT
 
PURSUANT
 
TO
 
SECTION
 
13
 
OR
 
15(d)
 
OF
 
THE
 
SECURITIES
 
EXCHANGE
 
ACT
 
OF
 
1934
FOR THE TRANSITION PERIOD FROM
 
TO
 
Commission file number:
001-01185
________________
GENERAL MILLS, INC.
(Exact name of registrant as specified in its charter)
Delaware
 
41-0274440
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
Number One General Mills Boulevard
 
Minneapolis
,
Minnesota
55426
(Address of principal executive offices)
(Zip Code)
(763)
764-7600
(Registrant’s telephone number,
 
including area code)
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
 
Trading Symbol(s)
 
Name of each exchange
on which registered
Common Stock, $.10 par value
 
GIS
 
New York Stock Exchange
0.125% Notes due 2025
GIS 25A
New York Stock Exchange
0.450% Notes due 2026
 
GIS 26
 
New York Stock Exchange
1.500% Notes due 2027
 
GIS 27
 
New York Stock Exchange
3.907% Notes due 2029
GIS 29
New York Stock Exchange
________________
Indicate
 
by
 
check
 
mark
 
whether
 
the
 
registrant
 
(1)
 
has
 
filed
 
all
 
reports
 
required
 
to
 
be
 
filed
 
by
 
Section
 
13
 
or
 
15(d)
 
of
 
the
 
Securities
Exchange Act of 1934
 
during the preceding 12
 
months (or for such shorter
 
period that the registrant
 
was required to file such
 
reports),
and (2) has been subject to such filing requirements for the past 90 days.
 
Yes
☑
 
No
☐
Indicate
 
by
 
check
 
mark
 
whether
 
the
 
registrant
 
has
 
submitted
 
electronically
 
every
 
Interactive
 
Data
 
File
 
required
 
to
 
be
 
submitted
pursuant to Rule 405
 
of Regulation S-T (§
 
232.405 of this chapter) during
 
the preceding 12 months (or
 
for such shorter period that
 
the
registrant was required to submit such files).
Yes
 
☑
 
No
☐
Indicate by check mark
 
whether the registrant is a
 
large accelerated filer,
 
an accelerated filer,
 
a non-accelerated filer,
 
smaller reporting
company,
 
or
 
an
 
emerging
 
growth
 
company.
 
See
 
the
 
definitions
 
of
 
“large
 
accelerated
 
filer,”
 
“accelerated
 
filer,”
 
“smaller
 
reporting
company,” and “emerging
 
growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☑
Accelerated filer
☐
 
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
 
If
 
an
 
emerging
 
growth
 
company,
 
indicate
 
by
 
check
 
mark
 
if
 
the
 
registrant
 
has
 
elected
 
not
 
to
 
use
 
the
 
extended
 
transition
 
period
 
for
complying with any new or revised financial accounting standards provided
 
pursuant to Section 13(a) of the Exchange Act.
 
☐
Indicate by check mark whether the registrant is a shell company (as defined
 
in Rule 12b-2 of the Exchange Act).
Yes
☐
 
No
☑
Number of
 
of shares of
 
of Common Stock
 
Stock outstanding
 
as of
 
SeptemberDecember 13,
 
2023:
581,279,229567,890,100
 
(excluding
173,334,099186,723,228
 
shares held
 
in the
treasury).
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4
 
PART
 
I.
 
FINANCIAL INFORMATION
Item 1.
 
Financial Statements
Consolidated Statements of Earnings
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions, Except per Share Data)
Quarter Ended
Aug.Six-Month Period Ended
Nov. 26, 2023
Nov. 27, 2022
Nov. 26, 2023
Aug. 28,Nov. 27, 2022
Net sales
$
4,904.75,139.4
$
4,717.65,220.7
$
10,044.1
$
9,938.3
Cost of sales
3,134.23,373.5
3,269.93,515.6
6,507.7
6,785.5
Selling, general, and administrative expenses
839.3830.5
791.4894.2
1,669.8
1,685.6
Divestitures gain, net
-
-
-
(430.9)
Restructuring, impairment, and other exit costs
1.2123.6
1.611.1
124.8
12.7
Operating profit
930.0811.8
1,085.6799.8
1,741.8
1,885.4
Benefit plan non-service income
(17.0)(20.1)
(21.7)
(37.1)
(43.4)
Interest, net
117.0117.8
87.791.5
234.8
179.2
Earnings before income taxes and after-tax earnings
 
from
 
 
joint ventures
830.0714.1
1,019.6730.0
1,544.1
1,749.6
Income taxes
173.2136.0
216.1147.1
309.2
363.2
After-tax earnings from joint ventures
23.524.2
19.825.4
47.7
45.2
Net earnings, including earnings attributable to
noncontrolling interests
680.3602.3
823.3608.3
1,282.6
1,431.6
Net earnings attributable to noncontrolling interests
6.8
3.32.4
13.6
5.7
Net earnings attributable to General Mills
$
673.5595.5
$
820.0605.9
$
1,269.0
$
1,425.9
Earnings per share – basic
$
1.151.03
$
1.371.01
$
2.18
$
2.38
Earnings per share – diluted
$
1.141.02
$
1.351.01
$
2.16
$
2.36
See accompanying notes to consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5
 
Consolidated Statements of Comprehensive Income
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions)
Quarter Ended
Aug.Six-Month Period Ended
Nov. 26, 2023
Nov. 27, 2022
Nov. 26, 2023
Aug. 28,Nov. 27, 2022
Net earnings, including earnings attributable to
noncontrolling interests
$
680.3602.3
$
823.3608.3
$
1,282.6
$
1,431.6
Other comprehensive (loss) income,loss, net of tax:
Foreign currency translation
(18.1)(22.3)
3.8(115.0)
(40.4)
(111.2)
Other fair value changes:
Hedge derivatives
(2.3)1.9
(38.3)20.8
(0.4)
(17.5)
Reclassification to earnings:
Foreign currency translation
-
-
-
(7.4)
Hedge derivatives
0.2(2.4)
(1.4)1.0
(2.2)
(0.4)
Amortization of losses and prior service costs
9.19.2
14.114.2
18.3
28.3
Other comprehensive loss, net of tax
(11.1)(13.6)
(29.2)(79.0)
(24.7)
(108.2)
Total comprehensive
 
income
 
669.2588.7
794.1529.3
1,257.9
1,323.4
Comprehensive income attributable to noncontrolling
interests
6.97.1
2.03.0
14.0
5.0
Comprehensive income attributable to General Mills
$
662.3581.6
$
792.1526.3
$
1,243.9
$
1,318.4
See accompanying notes to consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6
 
Consolidated Balance Sheets
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions, Except Par Value)
Aug. 27,Nov. 26, 2023
May 28, 2023
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
490.9593.8
$
585.5
Receivables
1,791.11,758.8
1,683.2
Inventories
2,228.82,166.0
2,172.0
Prepaid expenses and other current assets
596.2527.0
735.7
Total current
 
assets
5,107.05,045.6
5,176.4
Land, buildings, and equipment
3,585.23,598.9
3,636.2
Goodwill
14,522.014,441.8
14,511.2
Other intangible assets
6,965.76,963.3
6,967.6
Other assets
1,139.81,183.8
1,160.3
Total assets
$
31,319.731,233.4
$
31,451.7
LIABILITIES
AND EQUITY
Current liabilities:
Accounts payable
$
3,705.83,824.4
$
4,194.2
Current portion of long-term debt
1,174.61,321.0
1,709.1
Notes payable
584.3799.2
31.7
Other current liabilities
1,603.11,957.6
1,600.7
Total current
 
liabilities
7,067.87,902.2
7,535.7
Long-term debt
10,523.510,530.5
9,965.1
Deferred income taxes
2,085.02,026.6
2,110.9
Other liabilities
1,128.01,142.2
1,140.0
Total liabilities
20,804.321,601.5
20,751.7
Stockholders' equity:
Common stock,
754.6
 
shares issued, $
0.10
 
par value
75.5
75.5
Additional paid-in capital
1,185.71,201.8
1,222.4
Retained earnings
20,163.620,080.9
19,838.6
Common stock in treasury,
 
at cost, shares of
173.4185.7
 
and
168.0
(8,874.3)(9,677.4)
(8,410.0)
Accumulated other comprehensive loss
(2,288.1)(2,302.0)
(2,276.9)
Total stockholders'
equity
10,262.49,378.8
10,449.6
Noncontrolling interests
253.0253.1
250.4
Total equity
10,515.49,631.9
10,700.0
Total liabilities and equity
$
31,319.731,233.4
$
31,451.7
See accompanying notes to consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7
 
Consolidated Statements of Total
 
Equity
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions, Except per Share Data)
Quarter Ended
Aug. 27,Nov. 26, 2023
Aug. 28,Nov. 27, 2022
Shares
Amount
Shares
Amount
Total equity,
 
beginning balance
$
10,700.010,515.4
$
10,788.010,825.6
Common stock,
1
 
billion shares authorized, $
0.10
 
par value
754.6
75.5
754.6
75.5
Additional paid-in capital:
Beginning balance
1,222.41,185.7
1,182.91,146.1
Stock compensation plans
7.3(6.5)
9.3(7.4)
Unearned compensation related to stock unit awards
(79.4)(0.5)
(79.0)(6.8)
Earned compensation
35.423.1
32.923.4
Ending balance
1,185.71,201.8
1,146.11,155.3
Retained earnings:
Beginning balance
19,838.620,163.6
18,532.619,027.6
Net earnings attributable to General Mills
673.5595.5
820.0605.9
Cash dividends declared ($
0.591.18
 
and $
0.541.08
 
per share)
(348.5)(678.2)
(325.0)(641.6)
Ending balance
20,163.620,080.9
19,027.618,991.9
Common stock in treasury:
Beginning balance
(168.0)(173.4)
(8,410.0)(8,874.3)
(155.7)(160.3)
(7,278.1)(7,676.0)
Shares purchased, including $
4.27.9
 
million of excise tax
(6.4)(12.4)
(504.7)(808.8)
(6.9)(5.2)
(500.8)(400.5)
Stock compensation plans
1.00.1
40.45.7
2.31.1
102.953.0
Ending balance
(173.4)(185.7)
(8,874.3)(9,677.4)
(160.3)(164.4)
(7,676.0)(8,023.5)
Accumulated other comprehensive loss:
Beginning balance
(2,276.9)(2,288.1)
(1,970.5)(1,998.4)
ComprehensiveOther comprehensive loss
(11.2)(13.9)
(27.9)(79.6)
Ending balance
(2,288.1)(2,302.0)
(1,998.4)(2,078.0)
Noncontrolling interests:
Beginning balance
250.4253.0
245.6250.8
Comprehensive income
6.97.1
2.03.0
Distributions to noncontrolling interest holders
(4.3)(7.7)
(1.9)(2.9)
DivestitureChange in ownership interest
0.7
-
5.1
Ending balance
253.0253.1
250.8250.9
Total equity,
 
ending balance
$
10,515.49,631.9
$
10,825.610,372.1
See accompanying notes to consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8
Consolidated Statements of Total
Equity
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions, Except per Share Data)
Six-Month Period Ended
Nov. 26, 2023
Nov. 27, 2022
Shares
Amount
Shares
Amount
Total equity,
beginning balance
$
10,700.0
$
10,788.0
Common stock,
1
billion shares authorized, $
0.10
par value
754.6
75.5
754.6
75.5
Additional paid-in capital:
Beginning balance
1,222.4
1,182.9
Stock compensation plans
0.8
1.9
Unearned compensation related to stock unit awards
(79.9)
(85.8)
Earned compensation
58.5
56.3
Ending balance
1,201.8
1,155.3
Retained earnings:
Beginning balance
19,838.6
18,532.6
Net earnings attributable to General Mills
1,269.0
1,425.9
Cash dividends declared ($
1.77
and $
1.62
per share)
(1,026.7)
(966.6)
Ending balance
20,080.9
18,991.9
Common stock in treasury:
Beginning balance
(168.0)
(8,410.0)
(155.7)
(7,278.1)
Shares purchased, including $
12.1
million of excise tax
(18.8)
(1,313.5)
(12.1)
(901.3)
Stock compensation plans
1.1
46.1
3.4
155.9
Ending balance
(185.7)
(9,677.4)
(164.4)
(8,023.5)
Accumulated other comprehensive loss:
Beginning balance
(2,276.9)
(1,970.5)
Other comprehensive loss
(25.1)
(107.5)
Ending balance
(2,302.0)
(2,078.0)
Noncontrolling interests:
Beginning balance
250.4
245.6
Comprehensive income
14.0
5.0
Distributions to noncontrolling interest holders
(12.0)
(4.8)
Change in ownership interest
0.7
-
Divestiture
-
5.1
Ending balance
253.1
250.9
Total equity,
ending balance
$
9,631.9
$
10,372.1
See accompanying notes to consolidated financial statements.
9
 
Consolidated Statements of Cash Flows
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions)
QuarterSix-Month Period Ended
Aug. 27,Nov. 26, 2023
Aug. 28,Nov. 27, 2022
Cash Flows - Operating Activities
Net earnings, including earnings attributable to noncontrolling interests
$
680.31,282.6
$
823.31,431.6
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization
137.2265.8
134.3273.9
After-tax earnings from joint ventures
(23.5)(47.7)
(19.8)(45.2)
Distributions of earnings from joint ventures
15.823.5
15.526.5
Stock-based compensation
35.358.5
33.557.6
Deferred income taxes
(14.5)(58.7)
9.2(48.1)
Pension and other postretirement benefit plan contributions
(7.4)(12.5)
(5.3)(12.7)
Pension and other postretirement benefit plan costs
(5.3)(13.5)
(6.7)(13.5)
Divestitures gain, net
-
(430.9)
Restructuring, impairment, and other exit costs
2.4123.1
(15.7)(13.7)
Changes in current assets and liabilities, excluding the effects of
 
 
acquisitions and divestitures
(457.4)(166.1)
(209.7)(64.4)
Other, net
15.240.8
61.139.6
Net cash provided by operating activities
378.11,495.8
388.81,200.7
Cash Flows - Investing Activities
Purchases of land, buildings, and equipment
(141.7)(293.9)
(90.9)(226.7)
Acquisition, net of cash acquired
-(25.5)
(252.1)(251.5)
Proceeds from divestitures, net of cash divested
-
610.7
Investments in affiliates, net
(1.5)
(1.4)
Proceeds from disposal of land, buildings, and equipment
0.1
0.5
Other, net
6.24.6
(1.9)(6.5)
Net cash (used) provided by investing activities
(135.5)(316.2)
265.8125.1
Cash Flows - Financing Activities
Change in notes payable
551.8766.9
188.0353.4
Issuance of long-term debt
500.0
500.0
Payment of long-term debt
(400.0)
(600.0)
Proceeds from common stock issued on exercised options
4.55.7
65.5118.5
Purchases of common stock for treasury
(500.5)(1,301.4)
(500.8)(901.3)
Dividends paid
(348.5)(691.0)
(325.0)(647.9)
Distributions to noncontrolling interest holders
(4.3)(12.0)
(1.9)(4.8)
Other, net
(37.2)(41.8)
(34.9)(48.4)
Net cash used by financing activities
(334.2)(1,173.6)
(609.1)(1,230.5)
Effect of exchange rate changes on cash and cash equivalents
(3.0)2.3
(20.5)(20.6)
(Decrease) Increase in cash and cash equivalents
(94.6)8.3
25.074.7
Cash and cash equivalents - beginning of year
585.5
569.4
Cash and cash equivalents - end of period
$
490.9593.8
$
594.4644.1
Cash Flow from changes in current assets and liabilities, excluding the effects
 
of
 
 
acquisitions and divestitures:
Receivables
$
(104.4)(69.2)
$
(91.1)(200.8)
Inventories
(54.3)13.8
(243.3)(278.5)
Prepaid expenses and other current assets
140.9209.0
79.562.9
Accounts payable
(443.8)(329.1)
(130.4)112.5
Other current liabilities
4.29.4
175.6239.5
Changes in current assets and liabilities
$
(457.4)(166.1)
$
(209.7)(64.4)
See accompanying notes to consolidated financial statements.
 
910
GENERAL MILLS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
(Unaudited)
(1) Background
The accompanying
 
Consolidated Financial
 
Statements of
 
General Mills,
 
Inc. (we,
 
us, our,
 
General Mills,
 
or the Company)
 
have been
prepared in
 
accordance with
 
accounting principles
 
generally accepted
 
in the
 
United States
 
(GAAP) for
 
interim financial
 
information
and with
 
the rules
 
and regulations
 
for reporting
 
on Form
 
10-Q. Accordingly,
 
they do
 
not include
 
certain information
 
and disclosures
required
 
for
 
comprehensive
 
financial
 
statements.
 
In
 
the
 
opinion
 
of
 
management,
 
all
 
adjustments
 
considered
 
necessary
 
for
 
a
 
fair
presentation have
 
been included
 
and are
 
of a
 
normal recurring
 
nature, including
 
the elimination
 
of all
 
intercompany transactions
 
and
any
 
noncontrolling
 
interests’
 
share
 
of
 
those
 
transactions.
 
Operating
 
results
 
for
 
the
 
fiscal
 
quarter
 
ended
 
AugustNovember
 
27,26,
 
2023,
 
are
not
necessarily indicative of the results that may be expected for the fiscal year ending
 
May 26, 2024.
 
These
 
statements
 
should
 
be
 
read
 
in
 
conjunction
 
with
 
the
 
Consolidated
 
Financial
 
Statements
 
and
 
footnotes
 
included
 
in
 
our
 
Annual
Report on Form
 
10-K for the fiscal
 
year ended May
 
28, 2023. The
 
accounting policies used
 
in preparing these
 
Consolidated Financial
Statements are the same as those described in Note 2 to the Consolidated Financial
 
Statements in that Form 10-K with the exception of
new requirements adopted in the first quarter of fiscal 2024.
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 discontinued
 
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
 
results of
operations or 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
 
(please see Note
 
6). The
 
rollforward requirement
 
is effective
 
in fiscal 2025.
The adoption did not have a material impact on our financial statements and related
 
disclosures.
Certain terms used throughout this report are defined in the “Glossary” section below.
(2) Acquisition and Divestiture
During
 
the first
 
quarter
 
of fiscal
 
2023,
 
we
 
acquired
 
TNT Crust,
 
a
 
manufacturer
 
of high-quality
 
frozen pizza
 
crusts
 
for
 
regional
 
and
national pizza
 
chains, foodservice
 
distributors, and
 
retail outlets,
 
for a
 
purchase price
 
of $
253.0
 
million. We
 
financed the
 
transaction
with U.S. commercial paper.
 
We consolidated
 
the TNT Crust business into
 
our Consolidated Balance Sheets
 
and recorded goodwill
 
of
$
156.7
 
million. The
 
goodwill is
 
included in
 
the North
 
America Foodservice
 
segment and
 
is not
 
deductible for
 
tax purposes.
 
The pro
forma effects of this acquisition were not material.
 
During the
 
first quarter
 
of fiscal
 
2023,
 
we completed
 
the sale
 
of our
 
Helper main
 
meals and
 
Suddenly
 
Salad side
 
dishes business
 
to
Eagle Family Foods Group for $
606.8
 
million and recorded a pre-tax gain of $
442.2
 
million.
(3) Restructuring, Impairment, and Other Exit Costs
During
Restructuring and impairment charges were as follows:
Quarter Ended
Six-Month Period Ended
In Millions
Nov. 26, 2023
Nov. 27, 2022
Nov. 26, 2023
Nov. 27, 2022
Goodwill impairment
$
117.1
$
-
$
117.1
$
-
Commercial strategy action
5.1
-
5.1
-
Charges associated with restructuring actions
previously announced
9.7
11.6
19.5
13.9
Total
$
131.9
$
11.6
$
141.7
$
13.9
In the second
quarter of fiscal
2024, we recorded
a $
117.1
million non-cash goodwill
impairment charge
related to our Latin
America
reporting unit.
Please see Note 4 for additional information.
11
In
the
 
first second
quarter
 
of
fiscal
2024,
 
we did not
 
undertake anyapproved
 
new a
restructuring
 
actions. action
to
enhance
the
go-to-market
commercial
strategy
and
associated
organizational
structure
of
our
Pet
segment.
We
 
recorded expect
to
incur
approximately
$
9.822
million
of
restructuring
charges
and
project-related expenses
related to
this action,
of which
approximately $
4
million will
be cash.
These charges
are expected
to consist
of
approximately
$
16
million
of
accelerated
depreciation
and
$
6
million
of
other
costs,
including
severance.
We
recognized
$
2.4
million of
accelerated depreciation
and $
2.7
million of other
costs, including
severance, in the
six-month period
ended November 26,
2023. We expect
this action to be completed by the end of fiscal 2026.
In
the
second
quarter
of
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
expect
to
incur
an
additional
$
11
million
of
restructuring
charges,
primarily
related
to
$
4
million
of
fixed
asset
impairments
recorded in the second quarter of fiscal 2024 and $
4
million of accelerated depreciation. We
expect to incur approximately $
36
million
of
restructuring
charges
and
project-related
costs,
of
which
approximately
$
18
million
will
be
cash.
These
charges
are
expected
to
consist of
approximately $
12
million of
severance and
$
24
million of
other costs,
primarily asset
write-offs. We
expect these
actions
to be completed by the end of fiscal 2025.
We recorded
$
9.7
 
million of restructuring charges in the second
quarter of fiscal 2024 and $
19.5
million of restructuring charges in the
six-month
period
ended
November
26,
2023,
related
to
restructuring
actions
previously
announced.
We
recorded
$
11.6
million
of
restructuring
charges
 
in
 
the first
second
 
quarter
 
of
fiscal
 
20242023
 
and
 
$
2.313.9
 
million
 
of
 
restructuring
 
charges
 
in
the
 
firstsix-month
 
quarterperiod
 
ofended
November
 
fiscal27,
 
2023 for2022,
related
to
restructuring
actions
 
previously
announced.
announced restructuring actions.
We
 
expect
these
actions
to
be
completed
by
the
end
of
fiscal 2025.
We
 
paid
net
 
$
7.418.6
 
million of
 
of cash
in
 
the first quarter
 
of fiscal 2024six-month
period ended
November
26,
2023,
 
related
to
 
restructuring actions
 
previously announced.actions.
 
We
 
paid
net
$
18.027.6
 
million of cash in the same period of fiscal 2023.
Restructuring and impairment charges and project-related
costs are recorded in our Consolidated Statements of Earnings as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
10
Restructuring and impairment charges and project-related
costs are recorded in our Consolidated Statement of Earnings as follows:
QuarterSix-Month Period Ended
In Millions
Aug.Nov. 26, 2023
Nov. 27, 2022
Nov. 26, 2023
Aug. 28,Nov. 27, 2022
Cost of sales
$
8.6
$
0.7
Restructuring, impairment, and other exit costs
1.2$
1.6123.6
$
11.1
$
124.8
$
12.7
Cost of sales
8.3
0.5
16.9
1.2
Total restructuring
 
and impairment charges
$
9.8131.9
$
2.311.6
$
141.7
$
13.9
Project-related costs classified in cost of sales
$
0.80.3
$
-
$
1.1
$
-
The roll forward of our restructuring and other exit cost reserves, included
 
in other current liabilities, is as follows:
In Millions
Total
Reserve balance as of May 28, 2023
$
47.7
Fiscal 2024 charges, including foreign currency translation
1.21.7
Utilized in fiscal 2024
(6.4)(16.3)
Reserve balance as of Aug. 27,Nov. 26, 2023
$
42.533.1
The reserve balance primarily consists of expected severance payments
 
associated with restructuring actions.
 
The charges
 
recognized in
 
the roll forward
 
of our reserves
 
for restructuring
 
and other exit
 
costs do not
 
include items
 
charged
 
directly
to expense
 
(e.g., asset
 
impairment charges,
 
accelerated depreciation,
 
the gain
 
or loss
 
on the
 
sale of
 
restructured assets,
 
and the
 
write-
off
 
of
 
spare parts)
 
and other
 
periodic
 
exit costs
 
are
 
recognized
 
as incurred,
 
as those
 
items are
 
not reflected
 
in our
 
restructuring
 
and
other exit cost reserves on our Consolidated Balance Sheets.
12
(4) Goodwill and Other Intangible Assets
The components of goodwill and other intangible assets are as follows:
 
 
In Millions
Aug. 27,Nov. 26, 2023
May 28, 2023
Goodwill
$
14,522.014,441.8
$
14,511.2
Other intangible assets:
Intangible assets not subject to amortization:
Brands and other indefinite-lived intangibles
6,715.06,717.2
6,712.4
Intangible assets subject to amortization:
Customer relationships and other finite-lived intangibles
386.9387.0
386.3
Less accumulated amortization
(136.2)(140.9)
(131.1)
Intangible assets subject to amortization, net
250.7246.1
255.2
Other intangible assets
6,965.76,963.3
6,967.6
Total
$
21,487.721,405.1
$
21,478.8
Based
on
 
the carrying
 
value
of
 
finite-lived
intangible
 
assets as
 
of August
 
27, November
26,
2023,
 
annual
amortization
 
expense
for
 
each of
 
the next
next five fiscal years is estimated to be approximately $
20
 
million.
The changes in the carrying amount of goodwill during the six-month period
ended November 26, 2023, were as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
11
The changes in the carrying amount of goodwill during the first quarter of fiscal 2024
were as follows:
In Millions
North America
Retail
Pet
North America
Foodservice
International
Corporate and
Joint Ventures
Total
Balance as of May 28, 2023
$
6,542.4
$
6,062.8
$
805.6
$
708.4
$
392.0
$
14,511.2
Acquisition
-
-
-
-
26.9
26.9
Impairment charge
-
-
-
(117.1)
-
(117.1)
Other activity, primarily
 
 
foreign currency translation
0.1(0.2)
-
(0.1)
8.213.3
2.67.8
10.820.8
Balance as of Aug. 27,Nov. 26, 2023
$
6,542.56,542.2
$
6,062.8
$
805.5
$
716.6604.6
$
394.6426.7
$
14,522.014,441.8
The changes in the carrying amount of other intangible assets during the first quartersix-month
 
of fiscal 2024period ended November 26, 2023, were as follows:
In Millions
Total
Balance as of May 28, 2023
$
6,967.6
Amortization, net of foreign currency translation
(1.9)(4.3)
Balance as of Aug. 27,Nov. 26, 2023
$
6,965.76,963.3
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
 
2023,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 $
117.1
million non-cash goodwill impairment
charge in restructuring,
impairment,
 
and
 
weother
 
determinedexit
 
therecosts
 
was
no
in
 
impairmentour
Consolidated
Statements
 
of
 
ourEarnings.
 
intangibleOur
 
assetsestimates
 
as
their
relatedof
 
fair
 
value
for
goodwill
impairment
testing were determined based on a discounted cash flow model and
the fair value is a Level 3 asset in the fair value hierarchy.
All other intangible
asset fair values
 
were
substantially
 
in
excess of the
 
the carrying values,
 
values, except for
 
the
True Chews
and
Uncle Toby’s
brand intangible
 
asset.assets. In addition,
 
addition, while having
 
having significant coverage
 
coverage as
of our
our fiscal 20232024
 
assessment date,
the
Progresso
,
Nudges
,
Top
Chews
,
 
and
EPIC
 
brand
intangible
assets
had
 
risk
of
decreasing
coverage.
 
We
 
will
continue
to
monitor
these
businesses
for
monitor these businesses for potential impairment.
13
(5) Inventories
The components of inventories were as follows:
In Millions
Aug. 27,Nov. 26, 2023
May 28, 2023
Finished goods
$
2,093.02,053.1
$
2,066.9
Raw materials and packaging
553.5528.0
572.2
Grain
130.1138.5
133.8
Excess of FIFO over LIFO cost
(547.8)(553.6)
(600.9)
Total
$
2,228.82,166.0
$
2,172.0
 
(6) Risk Management Activities
 
Many commodities we
 
use in the
 
production and distribution
 
of our products
 
are exposed to
 
market price risks.
 
We
 
utilize derivatives
to manage price risk for our principal
 
ingredients and energy costs, including
 
grains (oats, wheat, and corn), oils
 
(principally soybean),
dairy products, natural
 
gas, and diesel fuel.
 
Our primary objective
 
when entering into
 
these derivative contracts
 
is to achieve
 
certainty
with
 
regard
 
to
 
the
 
future
 
price
 
of
 
commodities
 
purchased
 
for
 
use
 
in
 
our
 
supply
 
chain.
 
We
 
manage
 
our
 
exposures
 
through
 
a
combination of purchase orders, long-term
 
contracts with suppliers, exchange-traded
 
futures and options, and over-the-counter
 
options
and swaps.
 
We
 
offset
 
our exposures
 
based on
 
current and
 
projected market
 
conditions and
 
generally seek
 
to acquire
 
the inputs
 
at as
close as possible to or below our planned cost.
We
 
use derivatives
 
to manage
 
our exposure
 
to changes
 
in commodity
 
prices. We
 
do not
 
perform the
 
assessments required
 
to achieve
hedge
 
accounting
 
for
 
commodity
 
derivative
 
positions.
 
Accordingly,
 
the
 
changes
 
in
 
the
 
values
 
of
 
these
 
derivatives
 
are
 
recorded
currently in cost of sales in our Consolidated Statements of Earnings.
Although we do
 
not meet the
 
criteria for
 
cash flow hedge
 
accounting, we believe
 
that these instruments
 
are effective
 
in achieving our
objective of providing certainty
 
in the future price of commodities purchased
 
for use in our supply chain.
 
Accordingly, for
 
purposes of
measuring
 
segment
 
operating
 
performance,
 
these
 
gains
 
and
 
losses
 
are
 
reported
 
in
 
unallocated
 
corporate
 
items
 
outside
 
of
 
segment
operating results
 
until such time
 
that the exposure
 
we are managmanaging
 
ing affects earnings.
 
earnings. At that time,
 
that time, we reclassify
 
reclassify the
gain or
 
loss from
unallocated
 
corporate
 
items
 
to
 
segment
 
operating
 
profit,
 
allowing
 
our
 
operating
 
segments
 
to
 
realize
 
the
 
economic
 
effects
 
of
 
the
derivative without experiencing any resulting mark-to-market volatility,
 
which remains in unallocated corporate items.
 
Unallocated corporate items for the quarters and six-month periods ended
November 26, 2023, and November 27, 2022, included:
 
 
 
 
 
 
 
 
 
Quarter Ended
12
Unallocated corporate items for the quarters ended August 27, 2023, and
August 28, 2022, included:
QuarterSix-Month Period Ended
In Millions
Aug.Nov. 26, 2023
Nov. 27, 2022
Nov. 26, 2023
Aug. 28,Nov. 27, 2022
Net gain (loss)loss on mark-to-market valuation of certain
 
 
commodity positions
$
28.4(38.2)
$
(72.3)(20.9)
$
(9.8)
$
(93.2)
Net loss (gain) on commodity positions reclassified from
 
 
unallocated corporate items to segment operating profit
3.214.6
(43.0)(20.5)
17.8
(63.5)
Net mark-to-market revaluation of certain grain inventories
13.3(1.5)
(59.4)16.3
11.8
(43.1)
Net mark-to-market valuation of certain commodity
 
 
positions recognized in unallocated corporate items
$
44.9(25.1)
$
(174.7)(25.1)
$
19.8
$
(199.8)
As of August 27,
November
26,
2023,
 
the net
notional
value
of
commodity
 
derivatives
was
$
278.2420.8
 
million,
of
which
$
113.2162.5
million
related
to
energy inputs and $
258.3
 
million related to energy
inputs and
$
165.0
million related
to agricultural
inputs. These
contracts relate
to inputs
that generally
 
will be
utilized within the
the next
12
 
months.
We also
 
also have
net investments
in foreign
 
subsidiaries that
are denominated
 
in euros.
As of
August 27, November 26,
 
2023, we
hedged a
portion
 
of
these investments with €
2,954.12,960.0
 
million of euro-denominated bonds.
The
 
fair
 
values
 
of
 
the
 
derivative
 
positions
 
used
 
in
 
our
 
risk
 
management
 
activities
 
and
 
other
 
assets
 
recorded
 
at
 
fair
 
value
 
were
 
not
material
as
of
 
August 27, November
26,
2023,
 
and
were
Level
 
1
or
Level
 
2
assets
and
 
liabilities
in
the
 
fair
value
 
hierarchy.
 
We
 
did
not significantly
significantly change our valuation techniques from prior periods.
 
14
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 August
 
27, November
26,
2023,
 
$
1,362.81,388.2
 
million
of
 
our
total
 
accounts
payable
 
were
payable
 
to
suppliers
 
who
utilize
 
these third-
partythird-party services.
 
As of
 
May 28,
 
2023, $
1,430.1
 
million of
 
our total
 
accounts payable
 
were payable
 
to suppliers
 
who utilize
 
these third-
partythird-party services.
(7) Debt
The components of notes payable were as follows:
 
 
In Millions
Aug. 27,Nov. 26, 2023
May 28, 2023
U.S. commercial paper
$
529.2730.7
$
-
Financial institutions
55.168.5
31.7
Total
$
584.3799.2
$
31.7
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 August 27,November 26, 2023:
 
In Billions
Facility
 
Amount
Borrowed
Amount
Committed credit facility expiring April 2026
$
2.7
$
-
Uncommitted credit facilities
0.6
-0.1
Total committed
 
and uncommitted credit facilities
$
3.3
$
-0.1
The
 
credit
 
facilities
 
contain
 
covenants,
 
including
 
a
 
requirement
 
to
 
maintain
 
a
 
fixed
 
charge
 
coverage
 
ratio
 
of
 
at
 
least
2.5
 
times.
We
were in compliance with all credit facility covenants as of August 27,November 26, 2023.
Long-Term
 
Debt
 
The fair values
 
and carrying
 
amounts of long-term
 
debt, including
 
the current portion,
 
were $
10,811.110,920.3
 
million and $
11,698.111,851.5
 
million,
respectively,
 
as
of
 
August
27,November 26,
 
2023.
The
 
fair
value
 
of
long-term
 
debt
was
 
estimated
using
 
market
quotations
 
and
discounted
 
cash
13
flows based
 
on our
 
current incremental
 
borrowing rates
 
for similar
 
types of
 
instruments. Long
 
-term debt
 
is a
 
Level 2
 
liability in
 
the
fair value hierarchy.
In the second
quarter of fiscal 2024,
we issued €
250.0
million of floating-rate
notes due
November 8, 2024
. We
used the net proceeds
to repay €
250.0
million of floating-rate notes due
November 10, 2023
.
In the
second quarter
of fiscal
2024, we
issued $
500.0
million of
5.5
percent fixed-rate
notes due
October 17, 2028
. We
used the
net
proceeds to repay $
400.0
million of floating-rate notes due
October 17, 2023
, and for general corporate purposes.
 
In the first
 
quarter of fiscal
 
2024, we issued
 
€
500.0
 
million of floating-rate
 
notes due
November 8, 2024
. We
 
used the net proceeds
 
to
repay €
500.0
 
million of floating-rate notes due
July 27, 2023
.
 
In the fourth quarter
 
of fiscal 2023, we
 
issued €
250.0
 
million of floating-rate notes
 
due
November 10, 2023
. We
 
used the net proceeds
to repay €
250.0
 
million of floating-rate notes due
May 16, 2023
.
In the
 
fourth quarter
 
of fiscal
 
2023, we
 
issued €
750.0
 
million of
3.907
 
percent fixed-rate
 
notes due
April 13, 2029
. We
 
used the
 
net
proceeds to repay €
500.0
 
million of
1.0
 
percent fixed-rate notes due
April 27, 2023
, and €
250.0
 
million of floating-rate notes due
May
16, 2023
.
In the fourth
 
quarter of fiscal
 
2023, we
 
issued $
1,000.0
 
million of
4.95
 
percent fixed-rate
 
notes due
March 29, 2033
. 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
 
$
500.0
 
million of
5.241
 
percent fixed-rate notes
 
due
November 18, 2025
. We
 
used the
net proceeds to repay a portion of our outstanding commercial paper and for general
 
corporate purposes.
15
In the
 
second quarter
 
of fiscal
 
2023, we
 
issued €
250.0
 
million of
 
floating-rate notes
 
due
May 16, 2023
. We
 
used the
 
net proceeds
 
to
repay €
250.0
 
million of
0.0
 
percent fixed-rate notes due
November 11, 2022
.
In the
 
second quarter
 
of fiscal
 
2023,
 
we repaid
 
$
500.0
 
million of
2.6
 
percent fixed-rate
 
notes due
October 12, 2022
, using
 
proceeds
from the issuance of commercial paper.
Certain
of
our
 
long-term
debt
agreements
 
contain
restrictive
 
covenants.
As of August 27,November 26, 2023, we were in compliance with all of
these covenants.
(8) Noncontrolling Interests
The
 
third-party
 
holder
 
of
 
the
 
General
 
Mills
 
Cereals,
 
LLC
 
(GMC)
 
Class A
 
Interests
 
receives
 
quarterly
 
preferred
 
distributions
 
from
available net
 
income based
 
on the application
 
of a
 
floating preferred
 
return rate
 
to the
 
holder’s capital
 
account balance
 
established in
the most recent
 
mark-to-market valuation
 
(currently $
251.5
 
million). The
 
floating preferred return
 
rate on GMC’s
 
Class A Interests is
the
 
sum
 
of
 
the
three-month Term SOFR
 
plus
186
 
basis
 
points.
 
The
 
preferred
 
return
 
rate
 
is
 
adjusted
 
every
three years
 
through
 
a
negotiated agreement with the Class A Interest holder or through
 
a remarketing auction.
Our noncontrolling interests contain restrictive covenants. As of August 27,November 26, 2023, we were in compliance with all of these
covenants.
(9) Stockholders’ Equity
The following tables provide details of total comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
Quarter Ended
Nov. 26, 2023
Nov. 27, 2022
General Mills
Noncontrolling
Interests
General Mills
Noncontrolling
Interests
In Millions
Pretax
Tax
Net
Net
Pretax
Tax
Net
Net
Net earnings, including earnings
attributable to noncontrolling interests
$
595.5
$
6.8
$
605.9
$
2.4
Other comprehensive (loss) income:
Foreign currency translation
$
(32.4)
$
9.8
(22.6)
0.3
$
(144.7)
$
29.1
(115.6)
0.6
Other fair value changes:
Hedge derivatives
2.5
(0.6)
1.9
-
26.8
(6.0)
20.8
-
Reclassification to earnings:
Hedge derivatives (a)
(3.4)
1.0
(2.4)
-
1.8
(0.8)
1.0
-
Amortization of losses and
prior service costs (b)
11.5
(2.3)
9.2
-
18.3
(4.1)
14.2
-
Other comprehensive (loss) income
$
(21.8)
$
7.9
(13.9)
0.3
$
(97.8)
$
18.2
(79.6)
0.6
Total comprehensive income
$
581.6
$
7.1
$
526.3
$
3.0
(a)
(Gain) loss reclassified from AOCI into earnings is reported in interest, net for interest rate swaps and in cost of sales and SG&A expenses for foreign exchange contracts.
(b)
Loss reclassified from AOCI into earnings is reported in benefit plan non-service income.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
14
(9) Stockholders’ Equity
The following tables provide details of total comprehensive income:
QuarterSix-Month Period Ended
QuarterSix-Month Period Ended
Aug. 27,Nov. 26, 2023
Aug. 28,Nov. 27, 2022
General Mills
Noncontrolling
Interests
General Mills
Noncontrolling
Interests
In Millions
Pretax
Tax
Net
Net
Pretax
Tax
Net
Net
Net earnings, including earnings
attributable to noncontrolling interests
 
$
673.51,269.0
$
6.813.6
$
820.01,425.9
$
3.35.7
Other comprehensive (loss) income:
Foreign currency translation
$
(22.0)(54.4)
$
3.813.6
(18.2)(40.8)
0.10.4
$
(48.0)(86.7)
$
53.1(23.8)
5.1(110.5)
(1.3)(0.7)
Other fair value changes:
Hedge derivatives
(2.7)(0.2)
0.4(0.2)
(2.3)(0.4)
-
(49.8)(23.0)
11.55.5
(38.3)(17.5)
-
Reclassification to earnings:
Foreign currency translation (a)
-
-
-
-
(7.4)
-
(7.4)
-
Hedge derivatives (a)(b)
(1.3)(4.7)
1.52.5
0.2(2.2)
-
(1.9)(0.1)
0.5(0.3)
(1.4)(0.4)
-
Amortization of losses and
 
prior service costs (b)(c)
11.523.0
(2.4)(4.7)
9.118.3
-
18.236.5
(4.1)(8.2)
14.128.3
-
Other comprehensive (loss) income
$
(14.5)(36.3)
$
3.311.2
(11.2)(25.1)
0.10.4
$
(88.9)(80.7)
$
61.0(26.8)
(27.9)(107.5)
(1.3)(0.7)
Total comprehensive income
$
662.31,243.9
$
6.914.0
$
$
792.11,318.4
$
2.05.0
(a)
 
(Gain) lossGain reclassified from AOCI into earnings is reported in the divestitures gain, net
(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.
(b)(c)
 
Loss reclassified from AOCI into earnings is reported in benefit plan non-service income.
16
Accumulated other comprehensive loss balances, net of tax effects,
 
were as follows:
 
In Millions
Aug. 27,Nov. 26, 2023
May 28, 2023
Foreign currency translation adjustments
$
(726.8)(749.4)
$
(708.6)
Unrealized gain from hedge derivatives
3.83.3
5.9
Pension, other postretirement, and postemployment benefits:
Net actuarial loss
(1,655.7)(1,642.8)
(1,670.6)
Prior service credits
90.686.9
96.4
Accumulated other comprehensive loss
$
(2,288.1)(2,302.0)
$
(2,276.9)
 
(10) Stock Plans
We
 
have various
 
stock-based compensation
 
programs under
 
which awards,
 
including stock
 
options, restricted
 
stock, restricted
 
stock
units, and performance
 
awards, may be granted
 
to employees and non-employee
 
directors. These programs
 
and related accounting
 
are
described in Note
 
12 to the
 
Consolidated Financial
 
Statements included
 
in our Annual
 
Report on Form
 
10-K for the
 
fiscal year ended
May 28, 2023.
Compensation expense related to stock-based payments recognized
 
in the Consolidated Statements of Earnings was as follows:
 
Quarter Ended
Six-Month Period Ended
In Millions
Aug.Nov. 26, 2023
Nov. 27, 2022
Nov. 26, 2023
Aug. 28,Nov. 27, 2022
Compensation expense related to stock-based payments
$
35.323.1
$
33.524.1
$
58.5
$
57.6
Windfall tax benefits from stock-based payments
 
in income tax expense in our Consolidated Statements of Earnings
were as follows:
Quarter Ended
Six-Month Period Ended
In Millions
Aug.Nov. 26, 2023
Nov. 27, 2022
Nov. 26, 2023
Aug. 28,Nov. 27, 2022
Windfall tax benefits from stock-based payments
$
8.40.5
$
12.85.6
$
8.9
$
18.4
As
 
of
 
AugustNovember
 
27,26,
 
2023,
 
unrecognized
 
compensation
 
expense
 
related
 
to
 
non-vested
 
stock
 
options,
 
restricted
 
stock
 
units,
 
and
performance share units was $
172.2149.8
 
million. This expense will be recognized over
2523
 
months, on average.
15
Net cash proceeds from the exercise of stock options
 
less shares used for withholding taxes and the intrinsic
 
value of options exercised
were as follows:
 
Quarter
Six-Month Period Ended
In Millions
Aug. 27,Nov. 26, 2023
Aug. 28,Nov. 27, 2022
Net cash proceeds
$
4.55.7
$
65.5118.5
Intrinsic value of options exercised
$
2.12.3
$
32.055.7
We estimate the fair value of each stock option on the grant date using a Black-Scholes option-pricing model. Black-Scholes option-
pricing models require us to make predictive assumptions regarding future stock price volatility, employee exercise behavior, and
dividend yield. We estimate our future stock price volatility using the historical volatility over the expected term of the option,
excluding time periods of volatility we believe a marketplace participant would exclude in estimating our stock price volatility. We
also have considered, but did not use, implied volatility in our estimate, because trading activity in options on our stock, especially
those with tenors of greater than 6 months, is insufficient to provide a reliable measure of expected volatility. Our method of selecting
the other valuation assumptions is explained in Note 12 to the Consolidated Financial Statements included in our Annual Report on
Form 10-K for the fiscal year ended May 28, 2023.
17
The
 
estimated
 
fair
 
values
 
of
 
stock
 
options
 
granted
 
and
 
the
 
assumptions
 
used
 
for
 
the
 
Black-Scholes
 
option-pricing
 
model
 
were
 
as
follows:
Quarter
Six-Month Period Ended
Aug. 27,Nov. 26, 2023
Aug. 28,Nov. 27, 2022
Estimated fair values of stock options granted
 
$
17.47
$
14.16
Assumptions:
Risk-free interest rate
4.0
%
3.3
%
Expected term
8.5
years
8.5
years
Expected volatility
21.4
%
20.9
%
Dividend yield
2.8
%
3.1
%
The total grant date fair value of restricted stock unit awards that vested during
 
the period was as follows:
Quarter
Six-Month Period Ended
In Millions
Aug. 27,Nov. 26, 2023
Aug. 28,Nov. 27, 2022
Total grant date fair
 
value
$
104.887.4
$
82.0102.6
(11) Earnings Per Share
Basic and diluted earnings per share (EPS) were calculated using the following:
Quarter Ended
Six-Month Period Ended
In Millions, Except per Share Data
Nov. 26, 2023
Nov. 27, 2022
Nov. 26, 2023
Nov. 27, 2022
Net earnings attributable to General Mills
$
595.5
$
605.9
$
1,269.0
$
1,425.9
Average number
of common shares - basic EPS
580.1
595.9
583.2
598.0
Incremental share effect from: (a)
Stock options
1.4
3.7
2.1
3.6
Restricted stock units and performance share units
1.9
2.4
2.1
2.4
Average number
of common shares - diluted EPS
583.4
602.0
587.4
604.0
Earnings per share – basic
$
1.03
$
1.01
$
2.18
$
2.38
Earnings per share – diluted
$
1.02
$
1.01
$
2.16
$
2.36
(a)
Incremental
shares
from
stock
options,
restricted
stock
units,
and
performance
share
units
are
computed
by
the
treasury
stock
method.
Stock
options,
restricted
stock
units,
and
performance
share units
excluded
from
our
computation
of
diluted
EPS
because
they
were not dilutive were as follows
:
Quarter Ended
Six-Month Period Ended
In Millions
Nov. 26, 2023
Nov. 27, 2022
Nov. 26, 2023
Nov. 27, 2022
Anti-dilutive stock options, restricted stock units, and
performance share units
4.5
1.0
2.4
1.0
(12) Share Repurchases
Share repurchases were as follows:
Quarter Ended
Six-Month Period Ended
In Millions
Nov. 26, 2023
Nov. 27, 2022
Nov. 26, 2023
Nov. 27, 2022
Shares of common stock
12.4
5.2
18.8
12.1
Aggregate purchase price
$
808.8
$
400.5
$
1,313.5
$
901.3
 
18
(13) Statements of Cash Flows
Our Consolidated Statements of Cash Flows include the following:
Six-Month Period Ended
In Millions
Nov. 26, 2023
Nov. 27, 2022
Net cash interest payments
$
212.2
$
154.3
Net income tax payments
$
207.0
$
365.4
(14) Retirement and Postemployment Benefits
Components of net periodic benefit expense (income) are as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
16
(11) Earnings Per Share
Basic and diluted earnings per share (EPS) were calculated using the following:
Quarter Ended
In Millions, Except per Share Data
Aug. 27, 2023
Aug. 28, 2022
Net earnings attributable to General Mills
$
673.5
$
820.0
Average
number of common shares - basic EPS
586.3
600.2
Incremental share effect from: (a)
Stock options
2.8
3.3
Restricted stock units and performance share units
2.3
2.5
Average
number of common shares - diluted EPS
591.4
606.0
Earnings per share – basic
$
1.15
$
1.37
Earnings per share – diluted
$
1.14
$
1.35
(a)
Incremental
shares
from
stock
options,
restricted
stock
units,
and
performance
share
units
are
computed
by
the
treasury
stock
method.
Stock
options,
restricted
stock
units,
and
performance
share units
excluded
from
our
computation
of
diluted
EPS
because
they
were not dilutive were as follows
:
Quarter Ended
In Millions
Aug. 27, 2023
Aug. 28, 2022
Anti-dilutive stock options, restricted stock units, and
performance share units
1.6
0.8
(12) Share Repurchases
Share repurchases were as follows:
Quarter Ended
In Millions
Aug. 27, 2023
Aug. 28, 2022
Shares of common stock
6.4
6.9
Aggregate purchase price
$
504.7
$
500.8
(13) Statements of Cash Flows
Our Consolidated Statements of Cash Flows include the following:
Quarter Ended
In Millions
Aug. 27, 2023
Aug. 28, 2022
Net cash interest payments
$
83.9
$
55.2
Net income tax payments
$
13.7
$
9.0
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
17
(14) Retirement and Postemployment Benefits
Components of net periodic benefit expense (income) are as follows:
Defined Benefit
Pension Plans
Other Postretirement
 
Benefit Plans
Postemployment
Benefit Plans
Quarter Ended
Quarter Ended
Quarter Ended
In Millions
Aug. 27,Nov. 26,
2023
Aug. 28,Nov. 27,
2022
Aug. 27,Nov. 26,
2023
Aug. 28,Nov. 27,
2022
Aug. 27,Nov. 26,
2023
Aug. 28,Nov. 27,
2022
Service cost
$
14.214.4
$
17.617.5
$
1.2
$
1.41.2
$
1.81.9
$
2.1
Interest cost
74.274.1
64.6
5.35.4
4.5
1.0
0.8
Expected return on plan assets
(102.9)(106.0)
(105.0)
(8.7)
(7.8)
-
-
Amortization of losses (gains)
21.5
28.328.4
(5.1)
(4.9)(4.8)
(0.1)
-
0.1
Amortization of prior service costs (credits)
0.40.5
0.40.3
(5.4)(5.5)
(5.8)(5.7)
0.10.2
0.1
Other adjustments
-
-
-
-
2.6
3.02.9
Curtailment gain
(3.4)
-
-
-
-
-
Net expense (income)
$
7.41.1
$
5.95.8
$
(12.7)
$
(12.6)
$
5.55.6
$
6.15.9
Defined Benefit
Pension Plans
Other Postretirement
Benefit Plans
Postemployment
Benefit Plans
Six-Month
Period Ended
Six-Month
Period Ended
Six-Month
Period Ended
In Millions
Nov. 26,
2023
Nov. 27,
2022
Nov. 26,
2023
Nov. 27,
2022
Nov. 26,
2023
Nov. 27,
2022
Service cost
$
28.6
$
35.1
$
2.4
$
2.6
$
3.7
$
4.2
Interest cost
148.3
129.2
10.7
9.0
2.0
1.6
Expected return on plan assets
(208.9)
(210.0)
(17.4)
(15.6)
-
-
Amortization of losses (gains)
43.0
56.7
(10.2)
(9.7)
(0.1)
0.1
Amortization of prior service costs (credits)
0.9
0.7
(10.9)
(11.5)
0.3
0.2
Other adjustments
-
-
-
-
5.2
5.9
Curtailment gain
(3.4)
-
-
-
-
-
Net expense (income)
$
8.5
$
11.7
$
(25.4)
$
(25.2)
$
11.1
$
12.0
 
(15) Income Taxes
During the second quarter of fiscal 2024, we received a notice of proposed adjustment
from the Internal Revenue Service associated
with a capital loss from fiscal 2019. We
believe that we have meritorious defenses 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.
During
 
the
 
first
 
quarter
 
of
 
fiscal
 
2023,
 
the
 
Inflation
 
Reduction
 
Act
 
(IRA)
 
was
 
signed
 
into
 
law.
 
The
 
IRA
 
introduces
 
a
 
Corporate
Alternative Minimum Tax
 
beginning in our fiscal 2024
 
and an excise tax on the
 
the repurchase of corporate
 
stock starting after January
 
1,
2023. We
 
do The
IRA
does
not expect the IRA to
have
a
material
impact
on
our
financial
 
results,
including
our
annual
estimated
effective
tax
 
rate, orrates
and
on our liquidity.
19
(16) Contingencies
During
 
fiscal
 
2020,
 
we
 
received
 
notice
 
from
 
the
 
tax
 
authorities of
 
the
 
State of
 
São
 
Paulo,
 
Brazil
 
regarding
 
our
 
compliance
 
with
 
its
state sales tax requirements.
 
As a result, we
 
have been assessed additional
 
state sales taxes, interest,
 
and penalties. We
 
believe that we
have
meritorious
defenses
against
this
claim
and
will
vigorously
defend
 
our
position.
As
of August 27,
November
26,
2023,
we
are
unable
to estimate
estimate any possible loss and have not recorded a loss contingency for
this matter.
(17) Business Segment and Geographic Information
We
 
operate
 
in
 
the
 
packaged
 
foods
 
industry.
 
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,
and
shelf
 
stable
 
vegetables.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
 
products manufactured in
 
in the United States
 
States for
export, mainly
 
to
Caribbean
and Latin
American markets, as well as products we
 
products we manufacture
for sale to our international
joint ventures. Revenues from
 
from
export activities are
reported in the region or country where the end customer
is located.
Our Pet operating segment includes
 
pet food products sold primarily in the
 
United States and Canada in national
 
pet superstore chains,
e-commerce retailers,
 
grocery stores,
 
regional pet
 
store chains,
 
mass merchandisers,
 
and veterinary
 
clinics and
 
hospitals. Our
 
product
categories include dog and cat food (dry
 
foods, wet foods, and treats) made with
 
whole meats, fruits, vegetables and other
 
high-quality
natural
 
ingredients.
 
Our
 
tailored
 
pet
 
product
 
offerings
 
address
 
specific
 
dietary,
 
lifestyle,
 
and
 
life-stage
 
needs
 
and
 
span
 
different
product types, diet types, breed sizes for dogs, lifestages, flavors, product
 
functions,
 
and textures and cuts for wet foods.
Our
 
North
 
America
 
Foodservice
 
segment
 
consists
 
of
 
foodservice
 
businesses
 
in
 
the
 
United
 
States
 
and
 
Canada.
 
Our
 
major
 
product
categories
 
in
 
our
 
North
 
America
 
Foodservice
 
operating
 
segment
 
are
 
ready-to-eat
 
cereals,
 
snacks,
 
refrigerated
 
yogurt,
 
frozen
 
meals,
unbaked and
 
fully baked
 
frozen dough products,
 
baking mixes,
 
and bakery
 
flour.
 
Many products we
 
sell are branded
 
to the consumer
18
and nearly
 
all are
 
branded to
 
our customers.
 
We
 
sell to
 
distributors and
 
operators in
 
many customer
 
channels including
 
foodservice,
vending, and supermarket bakeries.
Operating profit
 
for these
 
segments excludes
 
unallocated corporate
 
items, gain
 
or loss
 
on divestitures,
 
and restructuring,
 
impairment,
and
 
other
 
exit
 
costs.
 
Unallocated
 
corporate
 
items
 
include
 
corporate
 
overhead
 
expenses,
 
variances
 
to
 
planned
 
North
 
American
employee
 
benefits
 
and
 
incentives,
 
certain
 
charitable
 
contributions,
 
restructuring
 
initiative
 
project-related
 
costs,
 
gains
 
and
 
losses
 
on
corporate investments,
 
and other
 
items that
 
are not
 
part of
 
our measurement
 
of segment
 
operating performance.
 
These include
 
gains
and
 
losses
 
arising
 
from
 
the
 
revaluation
 
of
 
certain
 
grain
 
inventories
 
and
 
gains
 
and
 
losses
 
from
 
mark-to-market
 
valuation
 
of
 
certain
commodity positions
 
until passed back
 
to our operating
 
segments. These items
 
affecting operating
 
profit are centrally
 
managed at
 
the
corporate
 
level
 
and
 
are
 
excluded
 
from
 
the
 
measure
 
of
 
segment
 
profitability
 
reviewed
 
by
 
executive
 
management.
 
Under
 
our
 
supply
chain organization, our manufacturing,
 
warehouse, and distribution activities are substantially integrated
 
across our operations in order
to maximize
 
efficiency
 
and productivity.
 
As a
 
result, fixed
 
assets and
 
depreciation and
 
amortization expenses
 
are neither
 
maintained
nor available by operating segment.
20
Our operating segment results were as follows:
Quarter Ended
In Millions
Aug. 27, 2023
Aug. 28, 2022
Net sales:
North America Retail
$
3,073.0
$
2,988.8
International
715.8
652.5
Pet
579.9
579.9
North America Foodservice
536.0
496.4
Total
$
4,904.7
$
4,717.6
Operating profit:
North America Retail
$
798.2
$
777.8
International
50.0
34.8
Pet
111.2
123.1
North America Foodservice
59.1
53.6
Total segment operating
profit
$
1,018.5
$
989.3
Unallocated corporate items
87.3
333.0
Divestitures gain, net
-
(430.9)
Restructuring, impairment, and other exit costs
1.2
1.6
Operating profit
$
930.0
$
1,085.6
Net sales for our North America Retail operating units were as follows:
 
Quarter Ended
In Millions
Aug. 27, 2023
Aug. 28, 2022
U.S. Snacks
$
954.5
$
887.2
U.S. Meals & Baking Solutions
941.9
949.2
U.S. Morning Foods
927.8
904.0
Canada
248.8
248.4
Total
$
3,073.0
$
2,988.8
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
19
Quarter Ended
Six-Month Period Ended
In Millions
Nov. 26, 2023
Nov. 27, 2022
Nov. 26, 2023
Nov. 27, 2022
Net sales:
North America Retail
$
3,305.0
$
3,373.1
$
6,378.0
$
6,361.9
International
683.1
671.7
1,398.9
1,324.2
Pet
569.3
592.9
1,149.2
1,172.8
North America Foodservice
582.0
583.0
1,118.0
1,079.4
Total
$
5,139.4
$
5,220.7
$
10,044.1
$
9,938.3
Operating profit:
North America Retail
$
859.9
$
837.1
$
1,658.1
$
1,614.9
International
34.6
17.8
84.6
52.6
Pet
102.5
86.6
213.7
209.7
North America Foodservice
95.5
81.5
154.6
135.1
Total segment operating
profit
$
1,092.5
$
1,023.0
$
2,111.0
$
2,012.3
Unallocated corporate items
157.1
212.1
244.4
545.1
Divestitures gain, net
-
-
-
(430.9)
Restructuring, impairment, and other exit costs
123.6
11.1
124.8
12.7
Operating profit
$
811.8
$
799.8
$
1,741.8
$
1,885.4
Net sales for our North America Retail operating units were as follows:
Quarter Ended
Six-Month Period Ended
In Millions
Nov. 26, 2023
Nov. 27, 2022
Nov. 26, 2023
Nov. 27, 2022
U.S. Meals & Baking Solutions
$
1,343.3
$
1,321.7
$
2,285.2
$
2,270.9
U.S. Snacks
836.3
892.9
1,790.8
1,780.1
U.S. Morning Foods
856.9
908.5
1,784.7
1,812.5
Canada
268.5
250.0
517.3
498.4
Total
$
3,305.0
$
3,373.1
$
6,378.0
$
6,361.9
Net sales by class of similar products were as follows:
 
Quarter Ended
Six-Month Period Ended
In Millions
Aug.Nov. 26, 2023
Nov. 27, 2022
Nov. 26, 2023
Aug. 28,Nov. 27, 2022
Snacks
$
1,136.71,037.3
$
1,068.41,102.8
$
2,174.0
$
2,171.2
Cereal
817.9776.9
814.7810.9
1,594.8
1,625.6
Convenient meals
665.5785.1
679.2786.4
1,450.6
1,465.6
Dough
775.1
745.6
1,310.0
1,210.4
Pet
579.9572.3
580.8593.7
Dough1,152.2
534.9
464.81,174.5
Baking mixes and ingredients
466.5562.3
473.5563.7
1,028.8
1,037.2
Yogurt
368.4364.9
346.0357.5
733.3
703.5
Super-premium ice cream
224.0168.3
183.5164.9
392.3
348.4
Other
110.997.2
106.795.2
208.1
201.9
Total
$
4,904.75,139.4
$
4,717.65,220.7
$
10,044.1
$
9,938.3
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2021
Item 2.
 
Management’s Discussion and Analysis
 
of Financial Condition and Results of Operations.
INTRODUCTION
This
 
Management’s
 
Discussion
 
and
 
Analysis
 
of
 
Financial
 
Condition
 
and
 
Results
 
of
 
Operations
 
(MD&A)
 
should
 
be
 
read
 
in
conjunction
 
with
 
the
 
MD&A
 
included
 
in
 
our
 
Annual
 
Report
 
on
 
Form
 
10-K
 
for
 
the
 
fiscal
 
year
 
ended
 
May
 
28,
 
2023,
 
for
 
important
background
 
regarding,
 
among other
 
things, our
 
key business
 
drivers.
 
Significant
 
trademarks and
 
service marks
 
used in
 
our business
are set forth in
italics
herein. Certain terms used throughout this report are defined in the
 
“Glossary” section below.
We
expect the largest
 
factors impacting our performance
 
in fiscal 2024
 
will be the economic
 
health of consumers, the
 
moderating rate
of
input
 
cost inflation
 
,inflation,
 
and
 
the
increasing
 
stability
of
 
the
supply
 
chain environment
 
.environment.
 
We
anticipate
input
cost
inflation
of
approximately
5
percent
in
fiscal
2024
and
 
expect
 
to drive
 
organic
net sales
growth
in
fiscal 2024
through strong
marketing, innovation,
in-store support,
and net
price realization
generated through
our Strategic
Revenue
Management (SRM)
capability,
most of
which will
be carried
over from
SRM actions
taken in
fiscal 2023.
We
anticipate input
cost
inflation of
approximately 5
percent in
fiscal 2024
and expect
to generate
 
higher
levels
 
of
Holistic
 
Margin
Management
 
(HMM)
cost
savings
savings compared to fiscal 2023.
CONSOLIDATED
 
RESULTS
 
OF OPERATIONS
FirstSecond Quarter Results
In
the first
second
 
quarter
of
fiscal
 
2024,
net
sales
 
and
organic
net
 
sales increased 4
decreased
2
 
percent
compared
to
 
the
same
period
 
last
year.
Operating
profit
increased 2
percent
to $812
million,
primarily
driven
by favorable
net price
realization
and
mix
and lower
selling,
general and
administrative (SG&A)
expenses,
including a
decrease in
certain compensation
and benefits
expenses,
partially offset
by
goodwill
impairment
and
restructuring
charges,
a
decrease
in
contributions
from
volume
growth,
and
higher
input
costs.
 
Operating
profit decreasedmargin
 
14of 15.8 percent
 
to $930increased 50
 
million, primarilybasis points. Adjusted
 
driven byoperating profit
 
a net
gain on
divestitures
in fiscal
2023, higher
input costs,
and
an
increase in selling,
general and administrative
(SG&A) expenses, includingof $989 million
 
increased media and
advertising expenses, partially
offset
by favorable net price
realization and mix
and a favorable change
to the mark-to-market valuation
of certain commodity positions
and
grain
inventories.
Operating
profit
margin
of
19.013
 
percent on a
 
decreased
400
basis
points.
Adjusted
operating
profit
of
$899
millionconstant-
increased 2 percent on
a constant-currencycurrency basis, primarily
 
driven by favorable
net price realization
 
realization and mix and
lower SG&A expenses,
including a decrease
in certain
compensation
and
benefits
expenses,
partially
offset
 
by higher
input costs, an
 
increase in SG&Aa
 
expenses, includingdecrease
in
contributions
from
volume
growth
and
higher
input
costs.
Adjusted operating profit margin
 
increased media and240 basis points to
 
advertising expenses, and19.3 percent. Diluted earnings
 
a decrease inper share of $1.02 increased
 
contributions from1 percent in
volumethe
 
growth.second
quarter
of
fiscal
2024.
 
Adjusted
 
operating
profit
margin
decreased
40
basis
points
to
18.3
percent.
Diluteddiluted
 
earnings
 
per
 
share
 
of
 
$1.14
decreased 16 percent in the first1.25
 
increased
14
percent
on
a
constant-currency
basis
compared to the
second quarter of fiscal 2024. Adjusted diluted
 
earnings per share of $1.09 decreased 1
percent on a constant-
currency basis compared
to the first quarter
of fiscal 2023.
See the “Non-GAAP
 
Measures” section below
 
for a description of
 
of our use
of measures
not defined by GAAP.
A summary of our consolidated financial results for the firstsecond quarter of
 
of fiscal 2024 follows:
 
Quarter Ended Aug. 27,Nov. 26, 2023
In millions,
except per share
Quarter Ended
Aug. 27,Nov. 26, 2023 vs.
Aug. 28,Nov. 27, 2022
Percent
of Net
Sales
Constant-
Currency
Growth (a)
Net sales
 
$
4,904.75,139.4
4(2)
%
Operating profit
930.0811.8
(14)2
%
19.015.8
%
Net earnings attributable to General Mills
673.5595.5
(18)(2)
%
Diluted earnings per share
$
1.141.02
(16)1
%
Organic net sales growth rate (a)
4(2)
%
Adjusted operating profit (a)
899.0989.4
212
%
18.319.3
%
213
%
Adjusted diluted earnings per share (a)
$
1.091.25
(2)14
%
(1)14
%
(a)
 
See the "Non-GAAP Measures" section below for our use of measures not defined by
 
GAAP.
Consolidated
net sales
 
were as follows:
 
Quarter Ended
Aug. 27,Nov. 26, 2023
Aug. 27,Nov. 26, 2023 vs.
 
Aug. 28,Nov. 27, 2022
Aug. 28,Nov. 27, 2022
Net sales (in millions)
$
4,904.75,139.4
4%(2)%
$
4,717.65,220.7
Contributions from volume growth (a)
(2)(4)
pts
Net price realization and mix
63
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 the
second quarter of
fiscal 2024 decreased
2 percent compared
to the same period
in fiscal 2023,
driven by a decrease
in
contributions from volume growth, partially offset by
favorable net price realization and mix.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
21
Net sales
in the
first quarter
of fiscal
2024
increased 4
percent compared
to the
same period
in fiscal
2023,
driven by
favorable
net
price realization and mix, partially offset by a decrease in
contributions from volume growth.22
Components of organic net sales growth are shown in the following
 
table:
 
 
Quarter Ended Aug. 27,Nov. 26, 2023 vs.
Quarter Ended Aug. 28,Nov. 27, 2022
Contributions from organic volume growth (a)
(2)(4)
pts
Organic net price realization and mix
73
pts
Organic net sales growth
4(2)
pts
Foreign currency exchange
Flat
AcquisitionsAcquisition and divestitures
Flat
Net sales growth
4(2)
pts
Note: Table may
 
not foot due to rounding.
(a)
 
Measured in tons based on the stated weight of our product shipments.
Organic
net sales increased 4
decreased
2 percent
 
in
the first second
quarter of
fiscal
2024
compared
 
to the
same
period in
fiscal
2023,
driven by favorable
organic net price realization and mix, partially offset
 
by a
decrease in contributions from organic volume growth,
 
.partially offset by favorable organic net price realization
and mix.
Cost
of
 
sales
decreased $136
$142 million
 
to $3,134
$3,374
 
million
in
 
the first
 
second
quarter
of
fiscal
2024
compared
to
the
same
period
in
fiscal
2023.
The
decrease
was
primarily
driven
by
a
$153 million
decline
attributable
to
lower
volume,
partially
offset
by
a
$6
million
increase
attributable
to
product
rate
and
mix.
We
recorded
a
$25 million
net
increase
in cost
of
sales related
to
the
mark-to-market
valuation
of
certain
commodity
positions
and
grain
inventories
in
second
quarter
of
fiscal
2024,
compared
to
a
$25 million
net
increase
in
the
second
quarter
of
fiscal
2023.
We
also
recorded
$8
million
of
restructuring
charges
in
cost
of
sales
in
the
second
quarter of
 
fiscal 2024
 
compared(please refer
to Note
3 to
 
the sameConsolidated
 
period in
fiscal 2023.
The decrease included
a $54 million decrease attributable
to lower volume and
a $150 million increase attributable
to product rate and
mix. We
recorded a
$45 million
net decreaseFinancial Statements
 
in costPart
 
of salesI, Item
 
related to
the mark-to-market
valuation1 of
 
certain commodity
positions
and grain inventories in the first quarter of fiscal 2024
compared to a $175 million net increase in the first quarter
of fiscal 2023.this report).
 
In the
first quarter
 
second
quarter of fiscal
 
fiscal 2023,
 
we recorded
 
a $21$3
 
million
charge
 
related to
 
to a voluntary
 
voluntary recall on
 
on certain
international
Häagen-Dazs
 
ice cream
cream products.
SG&A
 
Weexpenses
decreased
 
also recorded $9$64 million
 
to $830 million of restructuring
 
charges and $1in the
 
million of restructuringsecond
 
initiative project-relatedquarter
 
costs of fiscal
2024,
compared
to the
same period
in fiscal
cost2023,
primarily driven
by a
decrease in
certain compensation
and benefits
expenses
and net
favorable corporate
investment activity.
SG&A expenses as a percent of net sales in the firstsecond
 
quarter of fiscal 2024 decreased 90 basis points compared
 
to $1 million of restructuring
charges in the first
second quarter of fiscal 2023 (please
refer to Note 3 to the Consolidated Financial Statements in Part I, Item 1 of this report).
SG&A expenses
increased $48 million
to $839 million in
the first quarter
of fiscal 2024,
compared to the
same period in
fiscal 2023,
primarily driven
by increased
media and
advertising expenses.
SG&A expenses
as a
percent of
net sales
in the
first quarter
of fiscal
2024 increased 30 basis points compared to the first quarter of fiscal 2023.
Divestitures
gain,
net
totaled $431
million in
the first
quarter of
fiscal 2023,
primarily related
to the
sale of
our Helper
main meals
and
Suddenly
Salad
side
dishes
business
(please
refer
to
Note
2
to
the
Consolidated
Financial
Statements
in
Part
I,
Item
1
of
this
report).
Restructuring, impairment,
 
and other exit
 
costs
totaled $1$124 million
 
in the firstsecond
 
quarter of fiscal
 
2024, compared to
 
compared to $2
$11 million in the
same period last year (please refer to Note 3 to the Consolidated Financial
Statements in Part I, Item 1 of this report).
Benefit plan
non-service income
totaled $17 million
in the
 
firstsame period
last year.
In the
second quarter
 
of fiscal
 
2024, comparedwe
recorded a
$117
million non-cash
goodwill impairment
charge
related to our Latin America
reporting unit.
In the second quarter of fiscal
2024, we approved a restructuring
action to enhance the go-
to-market commercial strategy
and related organizational
structure of our Pet
segment, and as a
result, recorded $4 million
of charges.
In
addition,
we
also
recorded
$2
million
of
charges
in
the
second
quarter
of
fiscal
2024
related
 
to $22 million
 
actions
previously
announced
compared to $11
million in the same
 
period last year
(please refer to Note
3 to the Consolidated
Financial Statements in
Part I, Item 1
of this report).
Benefit plan non-service income
totaled $20 million in the second quarter
of fiscal 2024, compared to $22
million in the same period
last year,
primarily reflecting
an increase
 
in interest
costs, partially
offset by
lower amortization of losses.
 
of losses
and higher
expected return
on plan assets.
Interest,
 
net
for
 
the
 
firstsecond
 
quarter
 
of
 
fiscal
 
2024
 
totaled
 
$117118 million,
 
up
 
$2926 million
 
from
 
the
 
firstsecond
 
quarter
 
of
fiscal
 
2023,
primarily
primarily driven by higher interest rates and higher average long-term debt
levels.
The
effective tax rate
 
for the firstsecond quarter
of fiscal
2024 was 20.9 19.0
percent compared to 20.2
 
to 21.2 percent for the firstsecond
 
quarter of fiscal 2023.
2023.
The
 
0.31.2
 
percentage
 
point
 
decrease
 
was
 
primarily
 
due
 
to
 
certainfavorable
 
unfavorablechanges
in
earnings
mix
by
jurisdiction
and
certain
nonrecurring
discrete
 
tax
 
components
related
to
the
divestituresbenefits
 
in
 
the
 
first
quarter of
fiscal 2023,
partially offset
by certain
nonrecurring discrete
tax benefits
in the
first quarter
of fiscal
2023 and
unfavorable
earnings mix
by jurisdiction
in the
first quarter
of fiscal
2024. Our
effective
tax rate
excluding certain
items affecting
comparability
was
21.1
percent
in
the
firstsecond
 
quarter
 
of
 
fiscal
 
2024.
Our
effective
tax
rate
excluding
certain
items
affecting
comparability
was 20.8
percent in
the second
quarter of
fiscal 2024,
 
compared
to
 
19.7
21.1 percent
 
in
the
 
same
period
 
last
year
 
(see the
“Non-GAAP
 
the
“Non-GAAP
Measures”
 
section
 
below
 
for
 
a
 
description
 
of
 
our
 
use
 
of
 
measures
 
not
 
defined
 
by
 
GAAP).
 
The
 
1.40.3
 
percentage
 
point
increase
was
decrease was primarily
due
to
certain
nonrecurring
discrete
tax
benefits
favorable earnings mix by jurisdiction in
 
the
first
quarter
of
fiscal
2023
and
unfavorable
earnings
mix
by
jurisdiction in the first second quarter of fiscal 2024.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
22
23
After-tax earnings from joint
 
earnings from
joint ventures
 
for the
first second quarter
of fiscal
2024
increaseddecreased to $24 million compared to
 
$2425 million compared
to $20 million
in the
same period in fiscal 2023,
 
primarily driven by foreign currency exchange and higher input costs at Cereal Partners
Worldwide (CPW)
and Häagen-Dazs
Japan, Inc. (HDJ),
partially offset
by higher net
 
sales as a result of favorabledriven by
 
favorable net price
realization and mix
 
at Cereal PartnersCPW and
WorldwideHDJ. On a constant-currency
 
(CPW) andbasis, after-tax earnings
 
favorable
discrete tax
items at
CPW,
partially
offset
by higher
input
costs at
CPW and
Häagen-Dazs
Japan,
Inc. (HDJ). On
a constant-currency basis,
after-tax earnings from
joint ventures increased 26
 
5 percent (see the “Non-GAAP
 
“Non-GAAP Measures” section
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:
 
Quarter Ended Aug. 27,Nov. 26, 2023 vs.
Quarter Ended Aug. 28,Nov. 27, 2022
CPW
HDJ
Total
Contributions from volume growth (a)
(11)(6)
pts
(5)(1)
ptspt
Net price realization and mix
1917
pts
96
pts
Net sales growth in constant currency
811
pts
46
pts
710
pts
Foreign currency exchange
1
pt
(5)(2)
pts
Flat(3)
pts
(2)
pts
Net sales growth
910
pts
(1)2
ptpts
78
pts
Note: Table may
 
not foot due to rounding.
(a)
 
Measured in tons based on the stated weight of our product shipments.
Average
 
diluted
shares
 
outstanding
decreased by
19 million
in the
second quarter
of fiscal
2024 from
the same
period a
year ago
primarily due to share repurchases.
Six-Month Results
In the
six-month period
ended November
26, 2023,
net sales
and organic
net sales
increased 1
percent compared
to the
same period
last year.
Operating profit
decreased 8 percent
to $1,742 million,
primarily driven
by a net
gain on
divestitures in fiscal
2023, higher
input
costs, goodwill
impairment
and restructuring
charges,
and
a decrease
in contributions
from volume
growth,
partially offset
by
favorable
net price
realization
and
mix and
a favorable
change
to the
mark-to-market
valuation
of certain
commodity positions
and
grain
inventories.
Operating
profit
margin
of
17.3
percent
decreased
170
basis
points.
Adjusted
operating
profit
of
$1,888
million
increased 7 percent on
a constant-currency basis, primarily
driven by favorable net price
realization and mix, partially offset
by higher
input
costs,
a
decrease
in
contributions
from
volume
growth
and
an
increase
in
certain
SG&A
expenses.
Adjusted
operating
profit
margin
increased
110
basis points
to
18.8 percent
.
Diluted earnings
per
share of
$2.16 decreased
8 percent
in
the six-month
period
ended
November
26,
2023,
and
adjusted
diluted
earnings
per
share
of
$2.34
increased
6
percent
on
a
constant-currency
basis
compared
to
the
same
period last
year
(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 the six-month period
ended November 26, 2023, follows:
Six-Month Period Ended Nov.
26, 2023
In millions,
except per share
Six-Month Period
Ended Nov. 26,
2023 vs. Nov. 27,
2022
Percent of Net
Sales
Constant-
Currency
Growth (a)
Net sales
$
10,044.1
1
%
Operating profit
1,741.8
(8)
%
17.3
%
Net earnings attributable to General Mills
1,269.0
(11)
%
Diluted earnings per share
$
2.16
(8)
%
Organic net sales growth rate (a)
1
%
Adjusted operating profit (a)
1,888.4
7
%
18.8
%
7
%
Adjusted diluted earnings per share (a)
$
2.34
6
%
6
%
(a)
See the "Non-GAAP Measures" section below for our use of measures not defined by GAAP.
24
Consolidated
net sales
were as follows:
Six-Month Period Ended
Nov. 26, 2023
Nov. 26, 2023 vs.
Nov. 27, 2022
Nov. 27, 2022
Net sales (in millions)
$
10,044.1
1
%
$
9,938.3
Contributions from volume growth (a)
(3)
pts
Net price realization and mix
4
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 increase
in net
sales for
the six-month
period ended
November 26,
2023, was
driven
by favorable
net price
realization
and mix, partially offset by a decrease in contributions
from volume growth.
Components of organic net sales growth are shown in the following
table:
Six-Month Period Ended Nov.
26, 2023 vs.
Six-Month Period Ended Nov.
27, 2022
Contributions from organic volume growth (a)
(3)
pts
Organic net price realization and mix
5
pts
Organic net sales growth
1
pt
Foreign currency exchange
Flat
Acquisition 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
increased
1
percent
in
the
six-month
period
ended
November
26,
2023,
driven
 
by
 
15favorable
organic
net
price
realization and mix, partially offset by a decrease in
contributions from organic volume growth.
Cost
of
sales
decreased
$278 million
to
$6,508
 
million
 
in
 
the
 
firstsix-month
 
quarterperiod
ended
November
26,
2023,
compared
to
the
same
period
in
fiscal
2023.
The
decrease
was
primarily
driven
by
a
$207
million
decline
due
to
lower
volume,
partially
offset
by
a
$156 million increase attributable
to product rate and mix.
We recorded
a $20 million net decrease in
cost of sales related to
the mark-
to-market
valuation
 
of
certain
commodity
positions
and
grain
inventories
in
the
six-month
period
ended
November
26,
2023,
compared to a
$200 million net increase
in the six-month
period ended November
27, 2022. In the
six-month period ended
November
27, 2022,
we recorded
a $24 million
charge related
to a voluntary
recall on
certain international
Häagen-Dazs
ice cream
products. In
addition,
we
recorded
$17
million
of
restructuring
charges
and
$1
million
of
restructuring
initiative
project-related
costs in
cost
of
sales in the
six-month period
ended November
26, 2023,
compared to $1
million of restructuring
charges in
the same period
last year
(please refer to Note 3 to the Consolidated Financial Statements in Part I, Item 1 of
this report).
SG&A expenses
decreased $16
million to
$1,670 million in
the six-month
period ended
November 26,
2023, compared
to the
same
period in fiscal
2023, primarily driven
by net favorable
corporate investment activity,
partially offset
by higher media
and advertising
expenses.
SG&A expenses as
a percent
of net sales
decreased 40
basis points compared
to the six-month
period ended November
26,
2023, compared to the same period of fiscal 2023.
Divestitures
gain,
net
totaled
$431
million
in
the
six-month
period
ended
November
27,
2022,
primarily
related
to the
sale of
our
Helper main meals
and Suddenly Salad
side dishes business (please
refer to Note 2
to the Consolidated Financial
Statements in Part
I,
Item 1 of this report).
Restructuring, impairment,
and other exit
costs
totaled $125 million
in the six-month period
ended November 26,
2023, compared
to $13 million in the same period
last year. In
fiscal 2024, we recorded a $117
million non-cash goodwill impairment
charge related to
our
Latin
America
reporting
unit.
In
 
fiscal
 
2024,
 
fromwe
approved
a
restructuring
action
to
enhance
the
go-to-market
and
associated
organization structure of
our Pet segment,
and as a result,
we recorded $4 million
of charges in the
six-month period ended
November
26,
2023. In
addition,
we recorded
$3
million of
charges
related to
related
to actions
previously
announced
in the
six-month period
ended
November
26,
2023,
compared
to
$13
million
in
 
the
 
same
 
period
 
aof
fiscal
2023
(please
refer
to
Note
3
to
the
Consolidated
Financial Statements in Part I, Item 1 of this report).
25
Benefit plan non-service
income
totaled $37 million
in the six-month
period ended November
26, 2023, compared
to $43 million
in
the same period last year, primarily reflecting
an increase in interest costs, partially offset by lower amortization of
losses.
Interest, net
for the six-month
period ended November
26, 2023, increased
$56 million to $235 million
compared to the
same period
of fiscal 2023, primarily driven by higher interest rates and higher average
long-term debt levels.
The
effective
tax rate
for
the six-month
period ended
November
26, 2023,
was 20.0
percent compared
to 20.8
percent in
the same
period
last
year.
The
0.8
percentage
point
decrease
was
primarily
due
to
unfavorable
tax
components
related
to
the
divestitures
in
fiscal 2023
and favorable
earnings mix
by jurisdiction
in fiscal
2024,
partially offset
by certain
nonrecurring
discrete tax
benefits in
fiscal
2023.
Our
effective
tax
rate
excluding
certain
items
affecting
comparability
was
21.0
percent
in
the
six-month
period
ended
November
26,
2023,
compared
to
20.4
percent
in
the
same
period
last
 
year
 
ago(see
the
“Non-GAAP
Measures”
section
below
for
a
description of
our use
of measures
not defined
by GAAP).
The 0.6
percentage point
increase is primarily
due to
certain nonrecurring
discrete tax benefits in fiscal 2023.
After-tax
earnings from
joint ventures
increased
to $48 million
for the
six-month period
ended November
26, 2023,
compared to
$45 million
in the
same period
in fiscal
2023,
primarily
due to
higher
net sales
driven by
favorable
net price
realization and
mix at
CPW
and
HDJ, 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:
Six-Month Period Ended Nov.
26, 2023 vs.
Six-Month Period Ended Nov.
27, 2022
CPW
HDJ
Total
Contributions from volume growth (a)
(8)
pts
(3)
pts
Net price realization and mix
18
pts
8
pts
Net sales growth in constant currency
10
pts
5
pts
9
pts
Foreign currency exchange
Flat
(4)
pts
(1)
pt
Net sales growth
9
pts
1
pt
8
pts
Note: Table may not foot due to rounding
(a)
Measured in tons based on the stated weight of our product shipments.
Average
diluted
shares
outstanding
decreased
by
17 million
in
the
six-month
period
ended
November
26,
2023,
from
the
same
period a year ago primarily due to share repurchases, partially offset
by option
exercises.
SEGMENT OPERATING
 
RESULTS
Our businesses are
 
organized into
 
four operating segments:
 
North America Retail,
 
International,
 
Pet, and North
 
America Foodservice.
Please
 
refer
 
to
 
Note
 
17
 
of
 
the
 
Consolidated
 
Financial
 
Statements
 
in
 
Part
 
I,
 
Item
 
1
 
of
 
this
 
report
 
for
 
a
 
description
 
of
 
our
 
operating
segments.
North America Retail Segment Results
North America Retail net sales were as follows:
 
Quarter Ended
Aug. 27,Six-Month Period Ended
Nov. 26,
2023
Aug. 27,Nov. 26, 2023 vs
Aug. 28,Nov. 27, 2022
Aug. 28,Nov. 27,
2022
Nov. 26,
2023
Nov. 26, 2023 vs
Nov. 27, 2022
Nov. 27,
2022
Net sales (in millions)
$
3,073.03,305.0
3(2)
%
$
2,988.83,373.1
6,378.0
Flat
$
6,361.9
Contributions from volume growth (a)
(5)
pts
(5)
pts
Net price realization and mix
84
pts
6
pts
Foreign currency exchange
Flat
Flat
Note: Table may
 
not foot due to rounding.
(a)
 
Measured in tons based on the stated weight of our product shipments.
North
America
 
Retail
net
 
sales decreased
 
increased
3
2 percent
 
in
the
 
first
second quarter
 
of
fiscal
 
2024,
 
compared
to
 
the
same
 
period
in
 
fiscal
2023,
driven by favorable net price realization and mix, partially offset
by a decrease in contributions from volume growth.growth, partially offset
by favorable net price realization and mix.
North America Retail net sales in the six-month period ended November 26, 2023,
essentially matched the same period in fiscal 2023.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2326
The components of North America Retail organic net
 
sales growth are shown in the following table:
 
Quarter Ended
Aug. 27,Six-Month Period Ended
Nov. 26, 2023
Nov. 26, 2023
Contributions from organic volume growth (a)
(4)(5)
pts
(5)
pts
Organic net price realization and mix
84
pts
6
pts
Organic net sales growth
4(2)
pts
1
pt
Foreign currency exchange
Flat
Flat
Divestiture (b)
Flat
(1)
pt
Net sales growth
3(2)
pts
Flat
Note: Table may
 
not foot due to rounding.
(a) Measured in tons based on the stated weight of our product shipments.
(b) Divestiture of our Helper main meals and Suddenly Salad side dishes businesses in
 
fiscal 2023. Please see Note 2 to the
 
Consolidated Financial Statements in Part I, Item 1 of this report.
North
America Retail
organic
 
net sales
increased 4 decreased 2
 
percent in
the firstsecond
 
quarter of
fiscal 2024
 
,
compared to
the same
 
period in fiscal
2023,
 
fiscaldriven by a decrease in contributions
from organic volume growth,
partially offset by favorable
organic net price realization and
mix.
North America
Retail organic
net sales increased
1 percent in
the six-month
period ended November
26, 2023, compared
to the same
period
in fiscal
2023,
 
driven by
 
favorable
organic
 
net price
 
realization
and
 
mix, partially
 
partially offset
 
by a
 
decrease in
 
contributions from
 
organic
volumefrom
organic volume growth.
North America Retail net sales percentage change by operating unit are shown
 
in the following table:
 
Quarter Ended
Aug. 27,Six-Month Period Ended
Nov. 26, 2023
U.S. Snacks
8
%
U.S. Morning Foods
3
%Nov. 26, 2023
Canada (a)
Flat7
%
4
%
U.S. Meals & Baking Solutions
(1)2
%
1
%
U.S. Snacks
(6)
%
1
%
U.S. Morning Foods
(6)
%
(2)
%
Total
3(2)
%
Flat
(a)
 
On a constant-currency basis,
 
basis, Canada net
sales increased 49 percent
 
percent in the firstsecond quarter of
 
of fiscal 2024 and
increased 6 percent in
the six-month
period
ended November
26, 2023,
 
compared to
the same period
periods in
in
fiscal 2023.
See the "Non-GAAP
"Non-GAAP Measures"
section below for our use of this measure not
defined by GAAP.
Segment
operating
 
profit
increased
3
 
percent
to
 
$798860 million
in
the
 
first second
quarter
of
 
fiscal 2024
 
,
compared
to $778
$837 million
 
in
the same
same period
in fiscal
2023, primarily
driven by
favorable net
price realization
and mix,
partially offset
by a decrease
in contributions
from
volume
growth,
higher
input
costs,
and
an
increase
in
SG&A
expenses.
Segment
operating
profit
increased
3
percent
on
a
constant-currency
basis
in
the
second
quarter
of
fiscal
2024,
compared
to
the
same
period
in
 
fiscal
2023
(see
the
“Non-GAAP
Measures” section below for our use of this measure not defined by GAAP).
Segment
operating
profit
increased
3
percent
to
$1,658 million
in
the
six-month
period
ended
November
26,
2023,
compared
to
$1,615 million
in
the
same
period
in
fiscal
2023,
 
primarily
driven
 
by
favorable
 
net
price
 
realization
and
 
mix,
partially
 
offset
by
a
decrease in contributions
from volume growth,
 
higher input costs,
 
costs, aand an increase
 
decrease in
contributions from volume
growth, and an
increase in SG&A expenses,
,
 
including increased media
 
and advertising expenses. Segment
advertising
expenses.
Segment
operating
 
profit
 
increased
 
3
 
percent
 
on
 
a
 
constant-currency
 
basis
 
in
 
the
 
firstsix-month
 
quarterperiod
 
ofended
November
 
fiscal26,
 
20242023,
 
compared
to
 
the
same
 
period
 
in fiscal
2023
fiscal 2023 (see
(see the “Non-GAAP
“Non-GAAP Measures”
section below
for our
use of this measure
 
this
measure not defined by GAAP).
International Segment Results
International net sales were as follows:
Quarter Ended
Aug. 27,
2023
Aug. 27, 2023 vs
Aug. 28, 2022
Aug. 28,
2022
Net sales (in millions)
$
715.8
10
%
$
652.5
Contributions from volume growth (a)
(5)
pts
Net price realization and mix
13
pts
Foreign currency exchange
1
pt
Note: Table may
not foot due to rounding.
(a)
Measured in tons based on the stated weight of our product shipments.
International net sales increased 10 percent in the first quarter of fiscal 2024,
compared to the same period in fiscal 2023 which
included the impact of the voluntary recall on certain international
Häagen-Dazs
ice cream products, driven by favorable net price
realization and mix and favorable foreign currency exchange, partially
offset by a decrease in contributions from volume growth.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
27
International Segment Results
International net sales were as follows:
 
Quarter Ended
Six-Month Period Ended
Nov. 26,
2023
Nov. 26, 2023 vs
Nov. 27, 2022
Nov. 27,
2022
Nov. 26,
2023
Nov. 26, 2023 vs
Nov. 27, 2022
Nov. 27,
2022
Net sales (in millions)
$
683.1
2
%
$
671.7
$
1,398.9
6
%
$
1,324.2
Contributions from volume growth (a)
(4)
pts
(4)
pts
Net price realization and mix
3
pts
8
pts
Foreign currency exchange
2
pts
2
pts
Note: Table may
 
not foot due to rounding.
24(a)
Measured in tons based on the stated weight of our product shipments.
International net sales increased 2 percent in the second quarter of fiscal 2024
,
compared to the same period in fiscal 2023 that
included the impact of the voluntary recall on certain international
Häagen-Dazs
ice cream products, driven by favorable net price
realization and mix and favorable foreign currency exchange, partially offset
by a decrease in contributions from volume growth.
International net sales increased 6 percent in the six-month period
ended November 26, 2023, compared to the same period in fiscal
2023 that included the impact of the voluntary recall on certain international
Häagen-Dazs
ice cream products, driven by favorable net
price realization and mix and favorable foreign currency exchange, partially
offset by a decrease in contributions from volume growth.
The components of International organic net sales growth
 
are shown in the following table:
 
Quarter Ended
Aug. 27,Six-Month Period Ended
Nov. 26, 2023
Nov. 26, 2023
Contributions from organic volume growth (a)
(5)(4)
pts
(4)
pts
Organic net price realization and mix
133
pts
8
pts
Organic net sales growth
9Flat
4
pts
Foreign currency exchange
12
ptpts
2
pts
Net sales growth
102
pts
6
pts
Note: Table may
 
not foot due to rounding.
(a) Measured in tons based on the stated weight of our product shipments.
International organic net
 
sales increased 9 percent
in the firstsecond quarter of
 
of fiscal 2024 essentially
 
compared tomatched the same period
 
in fiscal 2023 whichthat included
the
includedimpact
of the
 
impact of
the voluntary
 
recall on
 
certain
international
Häagen-Dazs
 
ice
cream products
as a
decrease
in
contributions from
organic
volume growth was offset by favorable organic
net price realization and mix.
International organic
net sales increased
4 percent in the
six-month period ended
November 26, 2023,
compared to the same
period in
fiscal
2023
that
included
the
impact
of
the
voluntary
recall
on
certain
international
Häagen-Dazs
ice
cream
 
products,
 
driven by
 
by
favorable organic
net
price realization and mix, partially offset
by a decrease in
contributions from organic volume growth.
Segment operating
profit increased
44 94 percent
 
to $50$35 million
in the
first second quarter
of fiscal
2024,
 
compared to
$35 $18 million in
the same
period
 
in
 
fiscal
 
2023,
 
primarily
 
driven
 
by
 
favorable
 
net
 
price
 
realization
 
and
 
mix
 
and
 
the
 
voluntary
 
recall
 
on
 
certain
 
international
Häagen-Dazs
 
ice cream products
 
products in
fiscal 2023,
 
partially offset
 
by higher input
 
input costs.
Segment operating
 
profit increased 100
 
52 percent
on
a
 
constant-currency
 
basis
in
 
the
first second
 
quarter
of
 
fiscal
2024,
 
compared
to
 
the
same
 
period
 
in
fiscal
 
2023
 
(see
the
 
“Non-GAAP
Measures” section below for our use of this measure not defined by GAAP).
Pet Segment Results
Pet net sales were as follows:
 
Quarter Ended
Aug. 27,
2023
Aug. 27, 2023 vs
Aug. 28, 2022
Aug. 28,
2022
Net sales (in millions)
$
579.9
Flat
$
579.9
Contributions from volume growth (a)
(5)
pts
Net price realization and mix
5
pts
Foreign currency exchange
Flat
Note: Table mayoperating
 
not foot due to rounding.
(a)profit
 
Measured in tons based on the stated weight of our product shipments.
Pet netincreased
 
sales 61
percent
to
$85
million
in
 
the first
 
quarter ofsix-month
 
fiscal 2024period
 
matched ended
November
26,
2023,
compared
to
$53 million in
the same
 
period in
 
fiscal 2023,
 
asprimarily driven
by favorable
 
net price realization
 
realization and mix
 
was
offset by a decrease in contributions from volume growth.
The components of Pet organic net sales growth are shown in the followingmix and
 
table:the voluntary
recall on
certain international
Häagen-Dazs
 
Quarter Ended
Aug. 27, 2023
Contributions from organic volume growth (a)
(5)
pts
Organic net price realization and mix
5
pts
Organic net sales growth
Flat
Foreign currency exchange
Flat
Net sales growth
Flat
Note: Table mayice cream
 
not foot due to rounding.
(a) Measured in tons based on the stated weight of our product shipments.
Pet
organic
net
salesproducts
 
in
the
first
quarter
of
fiscal
2024
matched
the
same
period
in
fiscal
 
2023,
 
aspartially offset
 
favorableby higher
 
organicinput costs.
 
netSegment operating
 
priceprofit
realization and mix was offset by a decrease in contributions fromincreased 68
 
organic volume growth.percent on a
constant-currency basis in
Segment operating profit decreased 10 percent
the six-month period
ended November 26,
2023, compared
 
to $111 million in the
first quarter of fiscal 2024,
compared to $123 million in the same
period
in
fiscal
2023,
primarily
driven
by
higher
input
costs,
a
decrease
in
contributions
from
volume
growth,
and
an
increase
 
in
SG&Afiscal 2023 (see the “Non-GAAP Measures” section below for our use of this measure
 
expenses,
partially
offset
not defined by
favorable
net
price
realization
and
mix.
Segment
operating
profit
decreased
10
percent
on
a GAAP).
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
28
Pet Segment Results
Pet net sales were as follows:
 
25
constant-currency basis Quarter Ended
Six-Month Period Ended
Nov. 26,
2023
Nov. 26, 2023 vs
Nov. 27, 2022
Nov. 27,
2022
Nov. 26,
2023
Nov. 26, 2023 vs
Nov. 27, 2022
Nov. 27,
2022
Net sales (in millions)
$
569.3
(4)
%
$
592.9
$
1,149.2
(2)
%
$
1,172.8
Contributions from volume growth (a)
(11)
pts
(8)
pts
Net price realization and mix
7
pts
6
pts
Foreign currency exchange
Flat
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 the second
quarter of fiscal 2024,
compared to the same period in fiscal 2023,
driven by a decrease
in contributions from volume growth, partially offset by
favorable net price realization and mix.
Pet
net
sales
decreased
2
percent
in
 
the first
six-month
period
ended
November
26,
2023,
compared
to
the
same
period
in
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:
Quarter Ended
Six-Month Period Ended
Nov. 26, 2023
Nov. 26, 2023
Contributions from organic volume growth (a)
(11)
pts
(8)
pts
Organic net price realization and mix
7
pts
6
pts
Organic net sales growth
(4)
pts
(2)
pts
Foreign currency exchange
Flat
Flat
Net sales growth
(4)
pts
(2)
pts
Note: Table may
not foot due to rounding.
(a) Measured in tons based on the stated weight of our product shipments.
Pet organic net
sales decreased 4 percent
in the second quarter
 
of fiscal 2024,
 
compared to the same
period in fiscal 2023,
driven by a
decrease in contributions from organic volume growth,
partially offset by favorable organic net price
realization and mix.
Pet organic
net sales
decreased
2 percent
in the
six-month period
ended November
26, 2023,
compared
to the
 
same period
in fiscal
2023,
driven by a decrease in contributions
from organic volume growth,
partially offset by favorable
organic net price realization and
mix.
Segment
operating
profit
increased 18
percent
to $102
million
in
 
the second
quarter
of fiscal
2024,
compared
to $87
million
in
the
same period
in fiscal
2023, primarily
driven by
favorable net
price realization
and mix,
partially offset
by a decrease
in contributions
from volume
growth and
an increase in
SG&A expenses.
Segment operating
profit increased
18 percent
on a
constant-currency basis
in the second quarter of fiscal 2024,
compared to the same period in fiscal 2023 (see
the “Non-GAAP Measures” section
section below for our
use of this measure not defined by GAAP).
Segment
operating
profit
increased
2
percent
to
$214 million
in
the
six-month
period
ended
November
26,
2023,
compared
to
$210 million
in
the
same
period
in
fiscal
2023,
primarily
driven
by
favorable
net
price
realization
and
mix,
partially
offset
by
a
decrease
in
contributions
from
volume
growth,
higher
input
costs,
and
an
increase
in
SG&A
expenses.
Segment
operating
profit
increased 2
percent on
a constant-currency
basis in
the six-month
period ended
November 26,
2023, compared
to the
same period
in
fiscal 2023 (see the “Non-GAAP Measures” section below for our use of this measure
not defined by GAAP).
29
North America Foodservice Segment Results
North America Foodservice net sales were as follows:
 
Quarter Ended
Aug. 27,Six-Month Period Ended
Nov. 26,
2023
Aug. 27,Nov. 26, 2023 vs
Aug. 28,Nov. 27, 2022
Aug. 28,Nov. 27,
2022
Nov. 26,
2023
Nov. 26, 2023 vs
Nov. 27, 2022
Nov. 27,
2022
Net sales (in millions)
$
536.0582.0
8Flat
$
583.0
1,118.0
4
%
$
496.41,079.4
Contributions from volume growth (a)
7(1)
pt
3
pts
Net price realization and mix
Flat
1
pt
Foreign currency exchange
Flat
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 8 percent in the first
second quarter of fiscal 2024 compared to
essentially matched the same period in fiscal 2023,2023.
North
America Foodservice
net sales
increased
4 percent
in the
six-month period
ended November
26, 2023,
compared to
the same
period in fiscal 2023, driven by an increase in contributions from volume growth
and favorable
net price realization and mix.
The components of North America Foodservice organic
 
net sales growth are shown in the following table:
 
Quarter Ended
Aug. 27,Six-Month Period Ended
Nov. 26, 2023
Nov. 26, 2023
Contributions from organic volume growth (a)
4(1)
ptspt
1
pt
Organic net price realization and mix
1
pt
Flat
Organic net sales growth
4Flat
2
pts
Foreign currency exchange
Flat
Flat
Acquisition (b)
4Flat
2
pts
Net sales growth
8Flat
4
pts
Note: Table may
 
not foot due to rounding.
(a) Measured in tons based on the stated weight of our product shipments.
(b) Acquisition of TNT Crust in fiscal 2023. Please see Note 2 to the Consolidated Financial Statements
 
in Part I, Item 1 of this report.
North America Foodservice organic net sales in the second
 
quarter of fiscal 2024, essentially matched the same period in fiscal 2023.
North America Foodservice
 
organic
net sales
 
increased 42 percent
 
percent in
the first
quarter of
fiscal 2024,
compared to
the samesix-month
 
period inended November
26, 2023, compared
to the
same period in fiscal 2023, driven by an increase in contributions from organic
 
volume growth.
Segment operating
profit increased
10 17 percent
 
to $59
$96 million in
the first
second quarter of
fiscal 2024,
 
compared to
$54 $82 million in
the same
period
in
 
fiscal
2023,
 
primarily
driven
 
by
favorable
 
net
price
realization
 
and
mix,
partially
offset
by
higher
input
costs. mix.
 
Segment
operating
 
profit increased
 
1017 percent on
 
on a
constant-currency
 
basis in
the first
quarter of
fiscal 2024
compared to
the same
period in
fiscal 2023 (see the “Non-GAAP Measures” section below for our use of this measure
not defined by GAAP).
UNALLOCATED
CORPORATE
ITEMS
Unallocated corporate
expenses totaled $87
million in the
first quarter of
fiscal 2024, compared
to $333 million
 
in the same
period in
fiscal
2023.
In
 
the
 
firstsecond
 
quarter
 
of
 
fiscal
 
2024,
 
we
recorded
a
$45 million
net
decrease
in
expense
relatedcompared
 
to
 
the
 
same
period
in
fiscal
2023
(see
the
“Non-GAAP
Measures” section below for our use of this measure not defined by GAAP).
Segment
operating
profit
increased
14
percent
to
$155
million
in
the
six-month
period
ended
November
26,
2023,
compared
to
$135 million in
the same
period in
fiscal 2023,
primarily driven
by favorable
net price
realization and
mix, partially
offset by
higher
input costs.
Segment operating
profit increased
14 percent
on a
constant-currency basis
in the
six-month period
ended November
26,
2023,
compared
to
the
same
period
in
fiscal
2023
(see
the
“Non-GAAP
Measures”
section
below
for
our
use
of
this
measure
not
defined by GAAP).
30
UNALLOCATED
CORPORATE
ITEMS
Unallocated corporate expenses totaled $157 million
in the second quarter of fiscal 2024,
compared to $212 million in the same period
in fiscal
2023. In
the second
quarter of
fiscal 2024,
we recorded
a $25 million
net increase
in expense
related to
the mark-to-market
valuation of
certain commodity positions
 
positions and
grain inventories, compared to
 
to a $175$25 million
net increase in expense
 
in expense in
the same period
last year.
We
 
recorded $3$20 million
of net losses
related to valuation
 
adjustments on certain
corporate investments
in the firstsecond quarter
of
 
of
fiscal
 
2024,
 
compared
 
to
 
$2636 million
 
of
 
net
 
losses
 
related
 
to
 
valuation
 
adjustments
 
and
 
the
 
loss
 
on
 
sale
 
of
 
certain
 
corporate
investments in the
second quarter of
fiscal 2023. We
recorded $8 million
of restructuring charges
 
in
the
first
second quarter
 
of fiscal 2024.
fiscal
2023.
In
 
the
first second
 
quarter
of
 
fiscal
2023,
 
we
 
recorded
 
a
$22 $3
 
million
 
charge
 
related
 
to a
 
a
voluntary
 
recall
on
 
certain
 
international
Häagen-Dazsagen-
Dazs
 
ice cream products. In addition, we recorded $3
million of integration costs primarily related to our acquisition of TNT Crust and
$2 million
of transaction
costs primarily
related to
the sale
of our
Helper main
meals and
Suddenly Salad
side dishes
business in
the
second quarter of fiscal 2023. Certain
compensation and benefits expenses decreased
in the second quarter of fiscal
2024, compared to
the same period last year.
Unallocated corporate
expenses totaled $244
million in the
six-month period
ended November
26, 2023, compared
to $545 million in
the
same
period
last
year.
We
recorded
a
$20
million
net
decrease
in
expense
related
to
the
mark-to-market
valuation
of
certain
commodity
positions
and
grain
inventories
in
the
six-month
period
ended
November
26,
2023,
compared
to
a
$200
million
net
increase in expense in the
same period last year.
We recorded
$22 million of net losses related
to valuation adjustments and the
sale of
corporate
investments in
the six-month
period ended
November 26,
2023, compared
to $62
million of
net losses
in the
same period
last year.
In the six-month period
ended November 27,
2022, we recorded
a $24 million charge
related to a voluntary
recall on certain
international
Häagen-Dazs
ice
 
cream
 
products.
 
We
 
recorded
 
$917
 
million
 
of
 
restructuring
 
charges
 
and
 
$1
million
 
of
 
restructuring
initiative
 
project-related
 
costs
 
in
 
cost
 
of
 
sales
 
in
 
the
 
first quartersix-month
 
ofperiod
 
fiscalended
 
2024,November
26,
2023,
 
compared
 
to
 
$1
 
million
 
of
restructuring
 
charges
 
in cost
 
of sales
 
in the
 
same period
 
last year.
 
In addition,
 
we recorded
 
$24 million
 
of integration
 
costs primarily
related to our
acquisition of TNT
Crust and $2
million of
transaction costs primarily
related to the
sale of our
Helper main
meals and
Suddenly Salad
side dishes business
in the
six-month period
ended November
27, 2022. Certain
compensation and
benefits expenses
decreased in the first quarter of fiscal 2023.six-month period ended November 26, 2023, compared
 
26to the same period last year.
LIQUIDITY
 
AND CAPITAL
 
RESOURCES
During the first quarter of
 
fiscal 2024, six-month period
ended November
26, 2023,
cash provided by operations
 
operations was $378
$1,496 million compared to $389
 
to $1,201 million
in the
same period
last
year.
 
The $11 million$295
 
decrease million increase
was mainly
 
driven by
 
a $248$282
million increase
in net
earnings, excluding
the
$431 million net divestitures gain in fiscal 2023.
Cash used by investing activities during the six-month
period ended November 26, 2023, was $316 million compared
to cash provided
by investing activities of $125 million
 
changefor the same period in fiscal
 
current assets and2023. During the first quarter
 
liabilities andof fiscal 2023, we completed the
 
a $46
million changesale
in
other
non-cash
items
in
net
earnings,
including
changes
inof
 
the
 
valuationHelper main
 
ofmeals
 
certainand Suddenly
 
corporateSalad side
 
investments.dishes
 
Thesebusiness
 
were
partially
offset
by afor
 
$288 607
million
 
increasecash.
 
in
net
earnings,
excluding
the
$431 million
net
divestitures
gain
in fiscal
2023.
The $248
million
change in current assets and liabilities is primarily driven by a $313 million
change in the timing of accounts payable.
Cash
used
by
investing
activities
duringIn
 
the
 
first
 
quarter
 
of
 
fiscal
 
20242023,
we
acquired TNT
Crust for
$252 million
cash, net
of cash
acquired.
In addition,
we spent
$294 million
on purchases
of land,
buildings,
and equipment in the six months ended November 26, 2023, compared
to $227 million in the same period last year.
Cash
used
by
financing
activities
during
the
six-month
period
ended
November
26,
2023,
 
was
 
$1361,174
 
million
 
compared
 
to
$1,230 million
 
of cash
 
provided
used by
 
investingfinancing
activities in
activities
the same
period in
fiscal 2023.
We
paid
$691 million
 
of dividends
in the
six-
month period ended November 26, 2023, compared
to $648 million in the same period last year.
We paid $1,30
2
million for purchases
of
common
stock
for
treasury
in
the
six-month
period
ended
November
26,
2023,
compared
to
 
$266 901
million
 
forin
 
the
 
same
 
period
 
in
fiscal
2023.
 
During
the
first
quarter
of
the
2023,In addition,
 
we had
 
completed
the
sale
of
the
Helper main meals and Suddenly Salad side dishes
business for $607 million cash. In the
first quarter of fiscal 2023, we acquired
TNT
Crust for $252
million cash, net of cash acquired. In addition, we spent $142 million
on purchases of land, buildings, and equipment in
the first quarter of fiscal 2024 compared to $91 million in the same period
last year.
Cash used
by financing
activities during
the first
quarter of
fiscal 2024
was $334 million
compared
to $609$867 million
 
of cashnet
 
used by
financing activitiesdebt issuances
 
in the
 
samesix-month period
 
in fiscal 202ended November
 
3. We
paid $348 million
of dividends
in the
first quarter
of fiscal
2024, compared
to $325 million
in the
same period
last year.
We
paid $500
million for
purchases of
common stock
for treasury
in the first
quarter of
fiscal 2024, consistent with the same period in fiscal26, 2023,
 
.compared to
In addition, we had $552$253 million of net debt issuances in the first
quarter of
fiscal 2024 compared to $188 million of net debt issuances in the first quarter
of fiscal 2023.same period a year ago.
 
As of August
 
27, November
26,
2023, we
had
 
$425473 million
of cash
 
and cash
equivalents
 
in foreign
jurisdictions. In
 
anticipation
of repatriating
funds from
 
fundsforeign jurisdictions,
we record
local country
withholding taxes
on our
international earnings,
as applicable.
Furthermore,
fromwe
may
repatriate
our
cash
and
cash
equivalents
held
by
our
 
foreign
 
jurisdictions,subsidiaries
 
we
record
local
country
withholding
taxes
on
our
international
earnings,
as
applicable.
Furthermore,
we
may repatriate our
cash and cash equivalents
held by our
foreign subsidiaries without
 
such
funds
being
 
subject
to
further
 
U.S. income
income tax liability.
Earnings prior
to fiscal 2018 from our foreign subsidiaries remain permanently reinvested
 
reinvested in those jurisdictions.
The following table details the fee-paid committed and uncommitted credit
 
lines we had available as of August 27,November 26, 2023:
 
In Billions
Facility
 
Amount
Borrowed
Amount
Committed credit facility expiring April 2026
$
2.7
$
-
Uncommitted credit facilities
0.6
-0.1
Total committed
 
and uncommitted credit facilities
$
3.3
$
-0.1
31
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
 
is
the sum of three
 
-month Term
 
SOFR plus 186
 
basis points. The preferred
 
return rate is adjusted
 
every three years
 
through a negotiated
agreement with the Class A Interest holder or through a remarketing auction.
 
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.
 
To ensure availability
 
of funds, we maintain bank credit lines and have commercial paper programs
 
available to us in the United States
and Europe.
Certain
 
of
 
our
 
long-term
 
debt
 
agreements,
 
our
 
credit
 
facilities,
 
and
 
our
 
noncontrolling
 
interests
 
contain
 
restrictive
 
covenants.
 
As
 
of
August 27,November 26, 2023, we were in compliance with all of these covenants.
 
We
 
have
$1,175
$1,321 million
 
of
long-term
debt
 
maturing
in
the
 
next
12
months
 
that
is
classified
 
as
current,
including
 
$400
500 million
of
floating-rate
notes
due
October
17,
2023,
€250
million
of
floating-rate
notes
due
November
10,
2023,
and
$500
million
of
 
3.65
percent fixed-rate
 
notes due
 
February 15,
 
2024, and
€750 million
of floating-rate
notes due
November 8,
2024. We
 
believe that
 
cash
flows from
 
from operations, together
 
together with available
 
available short-
 
and long-long-term
term debt financing,
will be adequate
to meet
our liquidity
and capital
needs
for at least the next 12 months.
CRITICAL ACCOUNTING ESTIMATES
Our significant accounting policies are described in Note 2
 
to the Consolidated Financial Statements included
 
in our Annual Report on
Form
 
10-K for
 
the fiscal
 
year ended
 
May 28,
 
2023. The
 
accounting policies
 
used in
 
preparing our
 
interim fiscal
 
2024
Consolidated
Financial
 
Statements
 
are
 
the
 
same
 
as
 
those
 
described
 
in
 
our
 
Form
 
10-K
 
with
 
the
 
exception
 
of
 
the
 
new
 
accounting
 
requirements
27
adopted in the first quarter of fiscal 2024. Please see Note 1
 
to the Consolidated Financial Statements in Part I, Item 1 of
 
of this report for
additional information.
Our
 
critical
 
accounting
 
estimates
 
are
 
those
 
that
 
have
 
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,
 
stock-
based compensation,
 
income taxes,
 
and defined
 
benefit pension,
 
other postretirement
 
benefit, and
 
postemployment benefit
 
plans. The
assumptions and methodologies used
in the determination of those
 
those estimates as of August
27,November 26, 2023, are the
same as those described in
in our Annual Report on Form 10-K for the fiscal year ended May 28, 2023.
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
 
2023,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
restructuring,
impairment,
 
and
 
weother
exit
costs
in
our
Consolidated
Statements
of
Earnings.
Our
estimates
of
fair
value
for
goodwill
impairment
testing
were
 
determined
 
therebased
 
wason
 
noa
 
impairmentdiscounted
cash
flow
model
using
inputs
from
our
long-range
planning
process
to
determine
growth
rates
for
sales
and
profits.
Other
significant
assumptions
include
weighted
average
cost
 
of
 
capital
rates,
perpetuity
growth
assumptions, market comparables, and tax rates. The fair value is a Level 3
asset in the fair value hierarchy.
All other intangible
asset fair values
were substantially
in excess of
the carrying
values, except for
the
True Chews
and
Uncle Toby’s
brand intangible
assets. In
addition, while
having significant
coverage as
of our
fiscal 2024
assessment date,
the
Progresso
,
Nudges
,
Top
Chews
,
and
EPIC
brand
 
intangible
 
assets
 
as
their
related
fair
values
were
substantially
in
excess of the
carrying values,
except for
the
Uncle Toby’s
brand intangible
asset. In addition,
while having
significant coverage
as of
our fiscal 2023
assessment date, the
Progresso
and
EPIC
brand intangible assets had
 
risk
of
decreasing
coverage.
 
We
 
will
continue
to
monitor
these
businesses
for
monitor these businesses for potential impairment.
RECENTLY
ISSUED ACCOUNTING PRONOUNCEMENTS
In November 2023, the Financial Accounting
Standards Board (FASB)
issued Accounting Standards Update
(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.
32
In
December
2023,
the
FASB
issued
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.
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 impairment
Non-cash
goodwill
impairment
charge
related
to our
Latin America
reporting
unit.
Please see
Note
4
to
the
Consolidated
Financial
Statements in Part I, Item 1 of this report.
Restructuring charges and project-related costs
Restructuring
charges
and
project-related
costs
related
to
a
commercial
strategy
restructuring
action
and
previously
announced
restructuring actions
recorded in
fiscal 2024.
Restructuring charges
for previously
announced restructuring
actions recorded
in fiscal
2023. Please see Note 3 to the Consolidated Financial Statements in Part I, Item 1
of this report.
Investment activity, net
Valuation
adjustments of
certain corporate
investments in
fiscal 2024.
Valuation
adjustments and the
loss on sale
of certain corporate
investments in fiscal 2023.
Mark-to-market effects
Net
 
mark-to-market
 
valuation
 
of
 
certain
 
commodity
 
positions
 
recognized
 
in
 
unallocated
 
corporate
 
items.
 
Please
 
see
 
Note
 
6
 
to
 
the
Consolidated Financial Statements in Part I, Item 1 of this report.
Restructuring charges and project-relatedTransaction costs
RestructuringImmaterial
 
charges and
project-relatedtransaction
 
costs for
 
previously announced
restructuring actions
recorded in
fiscal 2024.
Restructuring
charges
for
previously
announced
restructuring
actions
recordedincurred
 
in
 
fiscal
 
2023.2024.
 
PleaseTransaction
 
seecosts
 
Noteprimarily
 
3related
 
to
 
the
 
Consolidatedsale
 
Financialof
our
Helper
main
meals
and
Suddenly Salad side dishes
business in fiscal 2023. Please
see Note 2 to the
Consolidated Financial Statements in Part
I, Item 1 of
this
report.
Investment activity, netProduct recall
ValuationCosts related to the fiscal 2023 voluntary recall of certain international
Häagen-Dazs
 
adjustments of
certain corporate
investments in
fiscal 2024. Valuation
adjustments and
the loss on
sale of certain
corporate
investments in fiscal 2023.ice cream products.
 
Acquisition integration costs
Integration
 
costs
 
primarily
 
resulting
 
from
 
the
 
acquisition
 
of
 
TNT
 
Crust
 
in
 
fiscal
 
2024
 
and
 
fiscal
 
2023.
 
Please
 
see
 
Note
 
2
 
to
 
the
Consolidated Financial Statements in Part I, Item 1 of this report.
Product recall
Costs related to the fiscal 2023 voluntary recall of certain international
Häagen-Dazs
ice cream products.
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 2 to the Consolidated Financial Statements in Part I, Item 1 of this report.
Transaction costs
Transaction costs primarily related
to the sale of our Helper main meals and Suddenly
Salad side dishes business in fiscal 2023.
Please
see Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this report.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
28
33
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,
acquisitions, divestitures,
 
and a 53
rd
 
week, when applicable,
 
have on year-to-year comparability.
 
A reconciliation of
 
these 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.
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 basis.
Our adjusted operating profit margins are calculated as follows:
Quarter Ended
Aug. 27,Nov. 26, 2023
Aug. 28,Nov. 27, 2022
In Millions
Value
Percent of
Net Sales
Value
 
Percent of
Net Sales
Operating profit as reported
$
930.0811.8
19.015.8
%
$
1,085.6799.8
23.015.3
%
Mark-to-market effectsGoodwill impairment
(44.9)117.1
(0.9)2.3
%
174.7-
3.7-
%
Restructuring charges
9.814.8
0.20.3
%
2.311.6
-0.2
%
Investment activity, net
2.919.6
0.10.4
%
26.335.7
0.60.7
%
Mark-to-market effects
25.1
0.5
%
25.1
0.5
%
Project-related costs
0.80.3
-
%
-
-
%
Acquisition integrationTransaction costs
0.20.6
-
%
1.51.8
-
%
Product recall
0.2
-
%
21.52.9
0.50.1
%
Acquisition integration costs
-
-
%
2.8
0.1
%
Adjusted operating profit
$
989.4
19.3
%
$
879.7
16.9
%
Six-Month Period Ended
Nov. 26, 2023
Nov. 27, 2022
In Millions
Value
Percent of
Net Sales
Value
Percent of
Net Sales
Operating profit as reported
$
1,741.8
17.3
%
$
1,885.4
19.0
%
Goodwill impairment
117.1
1.2
%
-
-
%
Restructuring charges
24.6
0.2
%
13.9
0.1
%
Investment activity, net
22.5
0.2
%
62.0
0.6
%
Mark-to-market effects
(19.8)
(0.2)
%
199.8
2.0
%
Project-related costs
1.1
-
%
-
-
%
Transaction costs
0.6
-
%
2.0
-
%
Product recall
0.4
-
%
24.4
0.2
%
Acquisition integration costs
0.2
-
%
4.3
-
%
Divestitures gain, net
-
-
%
(430.9)
(9.1)
%
Transaction costs
-
-
%
0.2
-(4.3)
%
Adjusted operating profit
$
899.01,888.4
18.318.8
%
$
881.21,760.9
18.717.7
%
Note: Table Tables
may not foot due to rounding.
 
For more information on the reconciling items, please refer to the Significant Items Impacting Comparability section above.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
29
34
Adjusted Operating Profit Growth on a Constant-currency Basis
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.
 
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:
 
Quarter Ended
Aug.Six-Month Period Ended
Nov. 26, 2023
Nov. 27, 2022
Change
Nov. 26, 2023
Aug. 28,Nov. 27, 2022
Change
Operating profit as reported
$
930.0811.8
$
1,085.6799.8
(14)2
%
Mark-to-market effects$
(44.9)1,741.8
174.7$
1,885.4
(8)
%
Goodwill impairment
117.1
-
117.1
-
Restructuring charges
9.814.8
2.311.6
24.6
13.9
Investment activity, net
2.919.6
26.335.7
22.5
62.0
Mark-to-market effects
25.1
25.1
(19.8)
199.8
Project-related costs
0.80.3
-
Acquisition integration1.1
-
Transaction costs
0.20.6
1.51.8
0.6
2.0
Product recall
0.2
21.52.9
0.4
24.4
Acquisition integration costs
-
2.8
0.2
4.3
Divestitures gain, net
-
(430.9)
Transaction costs-
-
0.2(430.9)
Adjusted operating profit
$
899.0989.4
$
881.2879.7
212
%
$
1,888.4
$
1,760.9
7
%
Foreign currency exchange impact
Flat
Flat
Adjusted operating profit growth,
on a constant-currency basis
213
%
7
%
Note: Table may not foot due to rounding.
For more information on the reconciling items, please refer to the Significant Items Impacting Comparability section above.
Adjusted Diluted EPS and Related Constant-currency Growth Rates
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 rates follows:
 
Quarter Ended
Six-Month Period Ended
Per Share Data
Aug.Nov. 26, 2023
Nov. 27, 2022
Change
Nov. 26, 2023
Aug. 28,Nov. 27, 2022
Change
Diluted earnings per share, as reported
$
1.141.02
$
1.351.01
(16)1
%
Mark-to-market effects$
(0.06)2.16
0.22$
2.36
(8)
%
Goodwill impairment
0.14
-
0.14
-
Restructuring charges
0.010.02
-0.02
0.03
0.02
Investment activity, net
-0.03
0.04
0.03
0.08
Mark-to-market effects
0.03
0.03
(0.03)
0.25
Product recall
-
-
-
0.03
Acquisition integration costs
-
0.01
-
0.01
Divestitures gain, net
-
-
-
(0.54)
Adjusted diluted earnings per share
$
1.091.25
$
1.111.10
(2)14
%
$
2.34
$
2.21
6
%
Foreign currency exchange impact
Flat
(1)
pt
Adjusted diluted earnings per share
growth, on a constant-currency basis
(1)14
%
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.
 
 
 
 
 
 
 
 
 
 
 
3035
Constant-currency After-tax Earnings from Joint Ventures
 
Growth Rates
 
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 rates on a constant-currency
 
basis are calculated as follows:
 
Percentage Change in
After-Tax
 
Earnings from Joint
Ventures
 
as Reported
Impact of Foreign
Currency
Exchange
Percentage Change in After-Tax
Earnings from Joint Ventures
on Constant-Currency Basis
Quarter Ended Aug. 27, Nov. 26,
2023
19(5)
%
(7)(9)
pts
5
%
Six-Month Period Ended Nov.
26, 2023
6
%
(8)
pts
14
%
Note: Table may
 
not foot due to rounding.
Net Sales Growth Rates for Our Canada Operating Unit on Constant-currency
 
Basis
 
We
 
believe
 
that
 
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 rates for our Canada operating unit on a constant-currency
 
basis are calculated as follows:
 
Percentage Change in
Net Sales
as Reported
Impact of Foreign
Currency
Exchange
Percentage Change in
Net Sales on Constant-
Currency Basis
Quarter Ended Aug. 27, Nov. 26,
2023
Flat7
(4)%
(2)
pts
9
%
Six-Month Period Ended Nov.
26, 2023
4
%
(2)
pts
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:
Quarter Ended Aug. 27, 2023
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
44
%
(8)
pts
52
%
Pet
(10)
%
Flat
(10)
%
North America Foodservice
10
%
Flat
10
%
Note: Table may
not foot due to rounding.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
31
36
Our segments’ operating profit growth rates on a constant-currency
basis are calculated as follows:
Quarter Ended Nov. 26, 2023
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
94
%
(6)
pts
100
%
Pet
18
%
Flat
18
%
North America Foodservice
17
%
Flat
17
%
Six-Month Period Ended Nov.
26, 2023
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
61
%
(7)
pts
68
%
Pet
2
%
Flat
2
%
North America Foodservice
14
%
Flat
14
%
Note: Tables may not
foot due to rounding.
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:
 
 
Quarter Ended
 
Aug.Six-Month Period Ended
Nov. 26, 2023
Nov. 27, 2022
Nov. 26, 2023
Aug. 28,Nov. 27, 2022
In Millions
(Except Per Share Data)
Pretax
Earnings
(a)
Income
Taxes
Pretax
Earnings
(a)
Income
Taxes
Pretax
Earnings
(a)
Income
Taxes
Pretax
Earnings
(a)
Income
Taxes
As reported
$
830.0714.1
$
173.2136.0
$
1,019.6730.0
$
216.1147.1
Mark-to-market effects$
(44.9)1,544.1
(10.3)$
174.7309.2
40.2$
1,749.6
$
363.2
Goodwill impairment
117.1
34.7
-
-
117.1
34.7
-
-
Restructuring charges
9.814.8
4.74.5
2.311.6
0.63.2
24.6
9.2
13.9
3.8
Investment activity, net
2.919.6
1.04.2
26.335.7
0.513.0
22.5
5.2
62.0
13.5
Mark-to-market effects
25.1
5.7
25.1
5.8
(19.8)
(4.6)
199.8
46.0
Project-related costs
0.80.3
0.30.1
-
-
Acquisition integration1.1
0.4
-
-
Transaction costs
0.20.6
0.1-
1.51.8
0.30.6
0.6
-
2.0
0.6
Product recall
 
0.2
-
2.9
0.7
0.4
0.1
21.524.4
4.95.6
Acquisition integration costs
-
-
2.8
0.7
0.2
0.1
4.3
1.0
Divestitures gain, net
-
-
(430.9)
(101.9)
Transaction costs-
-
-
0.2-
-(430.9)
(101.9)
As adjusted
$
799.1891.7
$
169.0185.2
$
815.2809.9
$
160.8171.0
$
1,690.8
$
354.2
$
1,625.1
$
331.8
Effective tax rate:
As reported
20.9%19.0%
21.2%20.2%
20.0%
20.8%
As adjusted
20.8%
21.1%
19.7%21.0%
20.4%
Sum of adjustment to income taxes
$
(4.3)49.4
$
(55.3)23.9
$
45.1
$
(31.4)
Average number
 
of common shares
- diluted EPS
591.4583.4
606.0602.0
587.4
604.0
Impact of income tax adjustments
on adjusted diluted EPS
$
0.01(0.08)
$
0.09(0.04)
$
(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.
3237
Glossary
AOCI
. Accumulated other comprehensive income (loss).
Adjusted diluted EPS.
 
Diluted EPS adjusted for certain items affecting year-to-year
 
comparability.
Adjusted operating profit.
 
Operating profit adjusted for certain items affecting year-to-year
 
comparability.
Adjusted operating profit
 
margin.
Operating profit adjusted
 
for certain items
 
affecting year-over-year
 
comparability,
 
divided by net
sales.
Constant currency.
 
Financial results
 
translated to
 
United States
 
dollars using
 
constant foreign
 
currency exchange
 
rates based
 
on the
rates
 
in
 
effect
 
for
 
the
 
comparable
 
prior-year
 
period.
 
To
 
present
 
this
 
information,
 
current
 
period
 
results
 
for
 
entities
 
reporting
 
in
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.
 
Accounts receivable plus inventories less accounts payable.
Derivatives.
Financial instruments such
 
as futures, swaps,
 
options, and forward
 
contracts that we
 
use to manage
 
our risk arising
 
from
changes in commodity prices, interest rates, foreign exchange rates, and stock
 
prices.
Euribor.
 
Euro Interbank Offered Rate.
Fair value
 
hierarchy.
For purposes
 
of fair
 
value measurement,
 
we categorize
 
assets and
 
liabilities into
 
one of
 
three levels
 
based on
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.
 
Net cash provided by operating activities less purchases of land, buildings, and equipment.
Generally Accepted
 
Accounting Principles
 
(GAAP).
Guidelines, procedures,
 
and practices
 
that we
 
are required
 
to use in
 
in recording
and reporting accounting information in our financial statements.
Goodwill.
The difference
 
between the purchase
 
price of acquired
 
companies plus the fair
 
value of any noncontrolling
 
and redeemable
interests and the related fair values of net assets acquired.
 
Gross margin.
 
Net sales less cost of sales.
Hedge accounting.
Accounting for qualifying
 
hedges that allows changes in
 
a hedging instrument’s
 
fair value to offset
 
corresponding
changes in
 
the hedged
 
item in
 
the same
 
reporting period.
 
Hedge accounting
 
is permitted
 
for certain
 
hedging instruments
 
and hedged
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).
 
Company-wide initiative to
 
use productivity savings, mix
 
management, and price realization
to offset input cost inflation, protect margins,
 
and generate funds to reinvest in sales-generating activities.
Interest
 
bearing
 
instruments.
Notes
 
payable,
 
long-term
 
debt,
 
including
 
current
 
portion,
 
cash
 
and
 
cash
 
equivalents,
 
and
 
certain
interest bearing investments classified within prepaid expenses and other current
 
assets and other assets.
 
Mark-to-market.
The act of determining a value for
 
financial instruments, commodity contracts, and
 
related assets or liabilities based
on the current market price for that item.
 
 
3338
Net
 
mark-to-market
 
valuation of
 
certain
 
commodity
 
positions.
Realized
 
and
 
unrealized
 
gains
 
and
 
losses on
 
derivative
 
contracts
that will be allocated to segment operating profit when the exposure we are hedging
 
affects earnings.
Net price realization.
The impact of list and promoted price changes, net of trade and other price
 
promotion costs.
Net realizable
 
value.
The estimated
 
selling price
 
in the
 
ordinary course
 
of business,
 
less reasonably
 
predictable costs
 
of completion,
disposal, and transportation.
 
Noncontrolling interests.
Interests of subsidiaries held by third parties.
 
Notional
 
amount.
The
 
amount
 
of
 
a
 
position
 
or
 
an
 
agreed
 
upon
 
amount
 
in
 
a
 
derivative
 
contract
 
on
 
which
 
the
 
value
 
of
 
financial
instruments are calculated.
OCI.
Other Comprehensive Income.
 
Organic net sales growth
. Net sales growth adjusted
 
for foreign currency translation,
 
acquisitions, divestitures and a
 
53
rd
 
fiscal week,
when applicable.
Project-related costs.
Costs incurred related to our restructuring initiatives not included in restructuring
 
charges.
Reporting unit
. An operating segment or a business one level below an operating
 
segment.
SOFR.
 
Secured Overnight Financing Rate.
Strategic
 
Revenue
 
Management
 
(SRM).
 
A
 
company-wide
 
capability
 
focused
 
on
 
generating
 
sustainable
 
benefits
 
from
 
net
 
price
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.
 
Costs incurred
 
to produce
 
and deliver
 
product,
 
including costs
 
for
 
ingredients
 
and
 
conversion, inventory
management, logistics, and warehousing.
Translation
 
adjustments.
The impact
 
of the conversion
 
of our foreign
 
affiliates’ financial
 
statements to United
 
States dollars
 
for the
purpose of consolidating our financial statements.
Working capital
. Current assets and current liabilities, all as of the last day of our fiscal year.
 
 
 
 
 
 
 
 
 
 
3439
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
 
Securities
 
and
 
Exchange
 
Commission
 
and
 
in
 
our
 
reports
 
to
stockholders.
The words or
 
phrases “will likely
 
result,” “are expected
 
to,” “will 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
 
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
 
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 critical
 
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
 
or breach of our information technology systems; foreign
 
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 Part
 
I of our
 
Annual Report on
 
Form 10-K for
 
the fiscal year
ended May 28, 2023, 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.
Item 3.
 
Quantitative and Qualitative Disclosures About Market Risk.
 
The
 
estimated
 
maximum
 
potential
 
value-at-risk
 
arising
 
from
 
a
 
one-day
 
loss
 
in
 
fair
 
value
 
for
 
our
 
interest
 
rate,
 
foreign
 
exchange,
commodity, and equity
 
market-risk-sensitive instruments outstanding as of August 27, 2023,November 26,
 
2023, was as follows:
 
In Millions
One-day Risk
of Loss
Change During
QuarterSix-Month
Period Ended
Aug. 27,Nov. 26, 2023
Analysis of Change
Interest rate instruments
$
5957
$
(6)(9)
Lower interest rate volatility
Foreign currency instruments
3628
(8)
Net price stability in portfolio
Commodity instruments
6
(1)
Immaterial
Commodity instruments
5
(3)
Decrease in commodity prices
Equity instruments
32
-(1)
Immaterial
For additional information, see Item 7A of Part II of our Annual Report on Form 10-K
 
for the fiscal year ended May 28, 2023.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3540
Item 4.
 
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
 
Securities
 
Exchange
 
Act
 
of
 
1934).
 
Based
 
on
 
our
 
evaluation,
 
our
 
Chief
 
Executive
 
Officer
 
and
 
Chief
 
Financial
Officer
have
 
concluded
that,
 
as
of
 
August 27,November
26,
 
2023,
our
 
disclosure
controls
 
and
procedures
 
were
effective
 
to
ensure
 
that information
information required to
 
be disclosed
by us
 
in reports that we
 
that we file or submit under
 
or submitthe Securities Exchange Act
 
under the
Securities Exchange
Act of
1934 is (1)
 
recorded, processed,
processed, summarized,
and reported
within the
time periods
specified in
Securities and
Exchange Commission
rules and
forms, and
(2)
accumulated
 
and
 
reportedcommunicated
 
withinto
 
theour
 
timemanagement,
 
periodsincluding
 
specifiedour
 
inChief
 
SecuritiesExecutive
Officer
 
and
 
ExchangeChief
 
Commission
rules
and
forms,
and
(2)
accumulated and
communicated to
our management,
including our
Chief Executive
Officer and
Chief Financial
 
Officer,
 
in a
 
mannera
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 Securities Exchange
 
Act
of
1934)
 
during
the
 
quarter
ended
 
August 27,November
26,
 
2023,
that
 
materially
affected,
 
or
are
reasonably
 
likely
to
 
materially
affect,
 
our internal
internal control
over financial reporting.
PART
 
II.
 
OTHER INFORMATION
Item 2.
 
Unregistered Sales of Equity Securities and Use of Proceeds.
 
The
 
following
 
table
 
sets forth
 
information
 
with
 
respect
 
to
 
shares
 
of
 
our
 
common
 
stock
 
that we
 
purchased
 
during
 
the quarter
 
ended
August 27,November 26, 2023:
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 Program (b)
May 29,August 28, 2023 -
July 2,September 24, 2023
3,648,0251,885,427
$
80.4064.39
3,648,0251,885,427
81,214,84476,589,932
July 3,September 25, 2023 -
July 30,October 29, 2023
2,739,4853,286,392
77.1862.75
2,739,4853,286,392
78,475,35973,303,540
July 31,October 30, 2023 -
 
August 27,November 26, 2023
-7,272,350
-64.95
-7,272,350
78,475,35966,031,190
Total
6,387,51012,444,169
$
79.0264.29
6,387,51012,444,169
78,475,35966,031,190
(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
 
an 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.
Item 5.
 
Other Information.
 
None.During
 
the
fiscal
quarter
ended
November
26,
2023,
no
director
or
officer
of
the
Company
adopted
or
terminated
a
“Rule
10b5-1
trading arrangement” or “
non-Rule
10b5-1
trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
 
3641
PART
 
II. OTHER INFORMATION
Item 6.
Exhibits.
 
10.1
10.2
10.3
31.1
 
31.2
 
32.1
 
32.2
 
101
Financial Statements from the
 
Statements
from
the Quarterly
Report
on Form
 
10-Q
of the
Company
 
for the quarter ended November
 
the quarter
ended
August
27,26,
2023,
 
formatted
 
in
 
Inline
 
Extensible
 
Business
 
Reporting
 
Language:
 
(i)
 
Consolidated
 
Statements
 
of
 
Earnings;
 
(ii)
Consolidated
 
Statements
 
of
 
Comprehensive
 
Income,
 
(iii)
 
Consolidated
 
Balance
 
Sheets;
 
(iv)
 
Consolidated
Statements of
 
Total
 
Equity; (v)
 
Consolidated Statements
 
of Cash
 
Flows; and
 
(vi) Notes
 
to Consolidated
 
Financial
Statements.
 
104
Cover Page, formatted in Inline Extensible Business Reporting Language
 
and contained in Exhibit 101.
 
 
3742
SIGNATURES
Pursuant
 
to
 
the
 
requirements
 
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.
(Registrant)
Date: SeptemberDecember 20, 2023
/s/ Mark A. Pallot
Mark A. Pallot
Vice President, Chief Accounting
 
Officer
(Principal Accounting Officer and Duly Authorized
 
Officer)