UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
10-Q
(Mark One)
 
☑
 
QUARTERLY
 
REPORT
 
PURSUANT
 
TO
 
SECTION
 
13
 
OR
 
15(d)
 
OF
 
THE
 
SECURITIES
 
EXCHANGE
 
ACT
 
OF
 
1934
FOR THE QUARTERLY
 
PERIOD ENDED
NOVEMBER 26, 2023FEBRUARY 25, 2024
☐
 
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,
 
a
smaller reporting
reporting
company,
 
or
 
an
 
emerging
 
growth
 
company.
 
See
 
the
 
definitions
 
of
 
“large
 
accelerated
 
filer,”
 
“accelerated
 
filer,”
 
“smaller
reporting
reporting company,” and “emerging
 
“emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☑
Accelerated filer
☐
 
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
 
If
 
an
 
emerging
 
growth
 
company,
 
indicate
 
by
 
check
 
mark
 
if
 
the
 
registrant
 
has
 
elected
 
not
 
to
 
use
 
the
 
extended
 
transition
 
period
 
for
complying with any new or revised financial accounting standards provided
 
pursuant to Section 13(a) of the Exchange Act.
 
☐
Indicate by check mark whether the registrant is a shell company (as defined
 
in Rule 12b-2 of the Exchange Act).
Yes
☐
 
No
☑
Number
 
of
shares
 
of
Common
 
Stock
outstanding
 
as
of
 
December March
13,
 
2023:2024:
567,890,100564,548,763
 
(excluding
186,723,228190,080,991
 
shares
held
 
in
the
treasury).
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4
 
PART
 
I.
 
FINANCIAL INFORMATION
Item 1.
 
Financial StatementsStatements.
Consolidated Statements of Earnings
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions, Except per Share Data)
Quarter Ended
Six-MonthNine-Month Period Ended
Nov.Feb. 25, 2024
Feb. 26, 2023
Nov. 27, 2022Feb. 25, 2024
Nov.Feb. 26, 2023
Nov. 27, 2022
Net sales
$
5,139.45,099.2
$
5,220.75,125.9
$
10,044.115,143.3
$
9,938.315,064.2
Cost of sales
3,373.53,391.8
3,515.63,461.1
6,507.79,899.5
6,785.510,246.6
Selling, general, and administrative expenses
830.5790.9
894.2946.9
1,669.82,460.7
1,685.62,632.5
Divestitures gain, net
-
-(13.7)
-
(430.9)(444.6)
Restructuring, impairment, and other exit costs
123.65.8
11.11.4
124.8130.6
12.714.1
Operating profit
811.8910.7
799.8730.2
1,741.82,652.5
1,885.42,615.6
Benefit plan non-service income
(20.1)(18.6)
(21.7)(21.6)
(37.1)(55.7)
(43.4)(65.0)
Interest, net
117.8121.7
91.598.3
234.8356.5
179.2277.5
Earnings before income taxes and after-tax earnings
 
from
 
 
joint ventures
714.1807.6
730.0653.5
1,544.12,351.7
1,749.62,403.1
Income taxes
136.0149.3
147.1108.3
309.2458.5
363.2471.5
After-tax earnings from joint ventures
24.218.0
25.412.7
47.765.7
45.257.9
Net earnings, including earnings attributable to
 
noncontrolling interests
602.3676.3
608.3557.9
1,282.61,958.9
1,431.61,989.5
Net earnings attributable to noncontrolling interests
6.86.2
2.44.8
13.619.8
5.710.5
Net earnings attributable to General Mills
$
595.5670.1
$
605.9553.1
$
1,269.01,939.1
$
1,425.91,979.0
Earnings per share – basic
$
1.031.18
$
1.010.94
$
2.183.35
$
2.383.32
Earnings per share – diluted
$
1.021.17
$
1.010.92
$
2.163.33
$
2.363.28
See accompanying notes to consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5
 
Consolidated Statements of Comprehensive Income
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions)
Quarter Ended
Six-MonthNine-Month Period Ended
Nov.Feb. 25, 2024
Feb. 26, 2023
Nov. 27, 2022Feb. 25, 2024
Nov.Feb. 26, 2023
Nov. 27, 2022
Net earnings, including earnings attributable to
 
noncontrolling interests
$
602.3676.3
$
608.3557.9
$
1,282.61,958.9
$
1,431.61,989.5
Other comprehensive loss,income (loss), net of tax:
Foreign currency translation
(22.3)2.4
(115.0)12.5
(40.4)(38.0)
(111.2)(98.7)
Other fair value changes:
Hedge derivatives
1.9(6.9)
20.8(5.7)
(0.4)(7.3)
(17.5)(23.2)
Reclassification to earnings:
Foreign currency translation
-
-
-
(7.4)
Hedge derivatives
(2.4)(0.1)
1.018.9
(2.2)(2.3)
(0.4)18.5
Amortization of losses and prior service costs
9.29.1
14.213.9
18.327.4
28.342.2
Other comprehensive loss,income (loss), net of tax
(13.6)4.5
(79.0)39.6
(24.7)(20.2)
(108.2)(68.6)
Total comprehensive
 
income
 
588.7680.8
529.3597.5
1,257.91,938.7
1,323.41,920.9
Comprehensive income attributable to noncontrolling
 
interests
7.16.0
3.04.9
14.020.0
5.09.9
Comprehensive income attributable to General Mills
$
581.6674.8
$
526.3592.6
$
1,243.91,918.7
$
1,318.41,911.0
See accompanying notes to consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6
 
Consolidated Balance Sheets
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions, Except Par Value)
Nov. 26, 2023Feb. 25, 2024
May 28, 2023
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
593.8588.6
$
585.5
Receivables
1,758.81,771.1
1,683.2
Inventories
2,166.01,828.0
2,172.0
Prepaid expenses and other current assets
527.0466.8
735.7
Total current
 
assets
5,045.64,654.5
5,176.4
Land, buildings, and equipment
3,598.93,643.6
3,636.2
Goodwill
14,441.814,433.7
14,511.2
Other intangible assets
6,963.36,957.2
6,967.6
Other assets
1,183.81,171.5
1,160.3
Total assets
$
31,233.430,860.5
$
31,451.7
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
3,824.43,613.5
$
4,194.2
Current portion of long-term debt
1,321.0812.2
1,709.1
Notes payable
799.2686.7
31.7
Other current liabilities
1,957.61,949.5
1,600.7
Total current
 
liabilities
7,902.27,061.9
7,535.7
Long-term debt
10,530.511,015.1
9,965.1
Deferred income taxes
2,026.62,023.5
2,110.9
Other liabilities
1,142.21,068.7
1,140.0
Total liabilities
21,601.521,169.2
20,751.7
Stockholders'Stockholders’ equity:
Common stock,
754.6
 
shares issued, $
0.10
 
par value
75.5
75.5
Additional paid-in capital
1,201.81,210.3
1,222.4
Retained earnings
20,080.920,416.7
19,838.6
Common stock in treasury,
 
at cost, shares of
185.7190.1
 
and
168.0
(9,677.4)(9,968.4)
(8,410.0)
Accumulated other comprehensive loss
(2,302.0)(2,297.3)
(2,276.9)
Total stockholders'stockholders’
 
equity
9,378.89,436.8
10,449.6
Noncontrolling interests
253.1254.5
250.4
Total equity
9,631.99,691.3
10,700.0
Total liabilities and equity
$
31,233.430,860.5
$
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
Nov.Feb. 25, 2024
Feb. 26, 2023
Nov. 27, 2022
Shares
Amount
Shares
Amount
Total equity,
 
beginning balance
$
10,515.49,631.9
$
10,825.610,372.1
Common stock,
1
 
billion shares authorized, $
0.10
 
par value
754.6
75.5
754.6
75.5
Additional paid-in capital:
Beginning balance
1,185.71,201.8
1,146.11,155.3
Stock compensation plans
(6.5)(11.1)
(7.4)21.9
Unearned compensation related to stock unit awards
(0.5)1.8
(6.8)(14.8)
Earned compensation
23.117.8
23.428.7
Ending balance
1,201.81,210.3
1,155.31,191.1
Retained earnings:
Beginning balance
20,163.620,080.9
19,027.618,991.9
Net earnings attributable to General Mills
595.5670.1
605.9553.1
Cash dividends declared ($
1.180.59
 
and $
1.080.54
 
per share)
(678.2)(334.3)
(641.6)(318.5)
Ending balance
20,080.920,416.7
18,991.919,226.5
Common stock in treasury:
Beginning balance
(173.4)
(8,874.3)
(160.3)
(7,676.0)
Shares purchased, including $
7.9
million of excise tax
(12.4)
(808.8)
(5.2)
(400.5)
Stock compensation plans
0.1
5.7
1.1
53.0
Ending balance
(185.7)
(9,677.4)
(164.4)
(8,023.5)
Shares purchased, including excise tax of $
2.8
and
$
0.4
million
(4.7)
(303.1)
(2.9)
(251.0)
Stock compensation plans
0.3
12.1
1.1
54.4
Ending balance
(190.1)
(9,968.4)
(166.2)
(8,220.1)
Accumulated other comprehensive loss:
Beginning balance
(2,288.1)(2,302.0)
(1,998.4)(2,078.0)
Other comprehensive lossincome
(13.9)4.7
(79.6)39.5
Ending balance
(2,302.0)(2,297.3)
(2,078.0)(2,038.5)
Noncontrolling interests:
Beginning balance
253.0253.1
250.8250.9
Comprehensive income
7.16.0
3.04.9
Distributions to noncontrolling interest holders
(7.7)(4.6)
(2.9)
Change in ownership interest
0.7
-(6.6)
Ending balance
253.1254.5
250.9249.2
Total equity,
 
ending balance
$
9,631.99,691.3
$
10,372.110,483.7
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-MonthNine-Month Period Ended
Nov.Feb. 25, 2024
Feb. 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(10.3)
1.923.8
Unearned compensation related to stock unit awards
(79.9)(78.1)
(85.8)(100.6)
Earned compensation
58.576.3
56.385.0
Ending balance
1,201.81,210.3
1,155.31,191.1
Retained earnings:
Beginning balance
19,838.6
18,532.6
Net earnings attributable to General Mills
1,269.01,939.1
1,425.91,979.0
Cash dividends declared ($
1.772.36
 
and $
1.622.16
 
per share)
(1,026.7)(1,361.0)
(966.6)(1,285.1)
Ending balance
20,080.920,416.7
18,991.919,226.5
Common stock in treasury:
Beginning balance
(168.0)
(8,410.0)
(155.7)
(7,278.1)
Shares purchased, including excise tax of $
12.115.0
and
$
0.4
 
million of excise tax
(18.8)(23.5)
(1,313.5)(1,616.6)
(12.1)(15.0)
(901.3)(1,152.3)
Stock compensation plans
1.11.4
46.158.2
3.44.5
155.9210.3
Ending balance
(185.7)(190.1)
(9,677.4)(9,968.4)
(164.4)(166.2)
(8,023.5)(8,220.1)
Accumulated other comprehensive loss:
Beginning balance
(2,276.9)
(1,970.5)
Other comprehensive loss
(25.1)(20.4)
(107.5)(68.0)
Ending balance
(2,302.0)(2,297.3)
(2,078.0)(2,038.5)
Noncontrolling interests:
Beginning balance
250.4
245.6
Comprehensive income
14.020.0
5.09.9
Distributions to noncontrolling interest holders
(12.0)(16.6)
(4.8)(11.4)
Change in ownership interest
0.7
-
Divestiture
-
5.1
Ending balance
253.1254.5
250.9249.2
Total equity,
 
ending balance
$
9,631.99,691.3
$
10,372.110,483.7
See accompanying notes to consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9
 
Consolidated Statements of Cash Flows
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions)
Six-MonthNine-Month Period Ended
Nov.Feb. 25, 2024
Feb. 26, 2023
Nov. 27, 2022
Cash Flows - Operating Activities
Net earnings, including earnings attributable to noncontrolling interests
$
1,282.61,958.9
$
1,431.61,989.5
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization
265.8412.2
273.9411.0
After-tax earnings from joint ventures
(47.7)(65.7)
(45.2)(57.9)
Distributions of earnings from joint ventures
23.531.4
26.536.6
Stock-based compensation
58.576.7
57.686.7
Deferred income taxes
(58.7)(85.5)
(48.1)(71.2)
Pension and other postretirement benefit plan contributions
(12.5)(20.0)
(12.7)(20.2)
Pension and other postretirement benefit plan costs
(13.5)(20.2)
(13.5)(20.2)
Divestitures gain, net
-
(430.9)(444.6)
Restructuring, impairment, and other exit costs
123.1119.7
(13.7)(14.6)
Changes in current assets and liabilities, excluding the effects of
 
 
acquisitions and divestitures
(166.1)(9.6)
(64.4)21.3
Other, net
40.841.0
39.6110.6
Net cash provided by operating activities
1,495.82,438.9
1,200.72,027.0
Cash Flows - Investing Activities
Purchases of land, buildings, and equipment
(293.9)(485.6)
(226.7)(351.3)
Acquisition, net of cash acquired
(25.5)
(251.5)
Proceeds from divestitures, net of cash divested
-
610.7633.1
Investments in affiliates, net
(1.5)
(1.4)(30.8)
Proceeds from disposal of land, buildings, and equipment
0.10.2
0.50.8
Other, net
4.64.8
(6.5)(6.4)
Net cash (used) providedused by investing activities
(316.2)(507.6)
125.1(6.1)
Cash Flows - Financing Activities
Change in notes payable
766.9654.5
353.4159.2
Issuance of long-term debt
500.01,000.0
500.0501.8
Payment of long-term debt
(400.0)(900.0)
(600.0)
Proceeds from common stock issued on exercised options
5.711.1
118.5168.0
Purchases of common stock for treasury
(1,301.4)(1,601.6)
(901.3)(1,152.3)
Dividends paid
(691.0)(1,028.0)
(647.9)(967.4)
Distributions to noncontrolling interest holders
(12.0)(16.6)
(4.8)(11.4)
Other, net
(41.8)(47.0)
(48.4)(53.5)
Net cash used by financing activities
(1,173.6)(1,927.6)
(1,230.5)(1,955.6)
Effect of exchange rate changes on cash and cash equivalents
2.3(0.6)
(20.6)(16.0)
Increase in cash and cash equivalents
8.33.1
74.749.3
Cash and cash equivalents - beginning of year
585.5
569.4
Cash and cash equivalents - end of period
$
593.8588.6
$
644.1618.7
Cash Flow from changes in current assets and liabilities, excluding the effects
 
of
 
 
acquisitions and divestitures:
Receivables
$
(69.2)(83.8)
$
(200.8)(132.4)
Inventories
13.8347.8
(278.5)(237.0)
Prepaid expenses and other current assets
209.0269.4
62.9151.5
Accounts payable
(329.1)(543.7)
112.5(41.6)
Other current liabilities
9.40.7
239.5280.8
Changes in current assets and liabilities
$
(166.1)(9.6)
$
(64.4)21.3
See accompanying notes to consolidated financial statements.
 
10
GENERAL MILLS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED
 
FINANCIAL STATEMENTS
(Unaudited)
 
(1) Background
The accompanying
 
Consolidated Financial
 
Statements of
 
General Mills,
 
Inc. (we,
 
us, our,
 
General Mills,
 
or the Company)
 
have been
prepared in
 
accordance with
 
accounting principles
 
generally accepted
 
in the
 
United States
 
(GAAP) for
 
interim financial
 
information
and with
 
the rules
 
and regulations
 
for reporting
 
on Form
 
10-Q. Accordingly,
 
they do
 
not include
 
certain information
 
and disclosures
required
 
for
 
comprehensive
 
financial
 
statements.
 
In
 
the
 
opinion
 
of
 
management,
 
all
 
adjustments
 
considered
 
necessary
 
for
 
a
 
fair
presentation have
 
been included
 
and are
 
of a
 
normal recurring
 
nature, including
 
the elimination
 
of all
 
intercompany transactions
 
and
any
 
noncontrolling
 
interests’
 
share
 
of
 
those
 
transactions.
 
Operating
 
results
 
for
 
the
 
fiscal
 
quarter
 
ended
 
NovemberFebruary
 
26,25,
 
2023,2024,
 
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
 
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
 
associated obligation
outstanding
 
(please see Note
 
Note 6). The
 
The rollforward requirement
 
requirement is
effective
for us
 
in our
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
Restructuring and impairment charges were as follows:
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
Six-MonthNine-Month Period Ended
In Millions
Nov.Feb. 25, 2024
Feb. 26, 2023
Nov. 27, 2022Feb. 25, 2024
Nov.Feb. 26, 2023
Nov. 27, 2022
Goodwill impairment
$
117.1-
$
-
$
117.1
$
-
Commercial strategy actionactions
5.19.0
-
5.114.1
-
Charges(Recoveries) charges associated with restructuring actions
 
previously announced
9.7(3.1)
11.62.1
19.516.4
13.916.0
Total
 
$
131.95.9
$
11.62.1
$
141.7147.6
$
13.916.0
In
the
third
quarter
of
fiscal
2024,
we
did
not
undertake
any
new
restructuring
actions.
We
recorded
$
9.0
million
of
restructuring
charges
in
the
third
quarter
of
fiscal
2024
and
$
14.1
million
of
restructuring
charges
in
the
nine-month
period
ended
February
25,
2024, related to commercial strategy
actions approved in the second quarter
of fiscal 2024. We
recorded a $
3.1
million net recovery of
restructuring
charges
in
the
third
quarter
of
fiscal
2024
and
$
16.4
million
of
restructuring
charges
in
the
nine-month
period
ended
11
February
25,
2024,
related
to
restructuring
actions
previously
announced.
We
recorded
$
2.1
million
of
restructuring
charges
in
the
third quarter
of fiscal
2023
and $
16.0
million of
restructuring charges
in the
nine-month period
ended February
26, 2023,
related to
restructuring actions previously announced.
We expect these actions to
be completed by the end of fiscal 2026.
In the third
quarter of fiscal
2024, we decreased
the estimate of
restructuring charges
that we expect
to incur related
to our previously
announced
actions
to enhance
the
efficiency
of our
global
supply
chain
structure.
We
expect to
incur
approximately
$
44
million
of
restructuring charges and project-related costs related
to these actions, of which approximately $
25
million will be cash. These charges
are
expected
to
consist
of
approximately
$
24
million
of
severance
and
$
20
million
of
other
costs,
primarily
$
8
million
of
asset
impairment and $
13
million of asset write-offs. We
expect these actions to be completed by the end of fiscal 2025.
We
paid
net
$
27.9
million
of cash
in
the
nine-month
period
ended
February
25,
2024,
related
to
restructuring
actions.
We
paid
net
$
30.6
million of cash in the same period of fiscal 2023.
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
second
quarter
of
fiscal
2024,
we
approved
a
restructuring
action
to
enhance
the
go-to-market
commercial
strategy
and
associated
organizational
structure
of
our
Pet
segment.
We
expect
to
incur
approximately
$
22
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
second
quarter
of
fiscal
2023
and
$
13.9
million
of
restructuring
charges
in
the
six-month
period
ended
November
27,
2022,
related
to
restructuring
actions
previously
announced.
We
expect
these
actions
to
be
completed
by
the
end
of
fiscal 2025.
We
paid
net
$
18.6
million
of cash
in
the
six-month
period ended
November
26,
2023,
related
to
restructuring
actions.
We
paid
net
$
27.6
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
Six-MonthNine-Month Period Ended
In Millions
Nov.Feb. 25, 2024
Feb. 26, 2023
Nov. 27, 2022Feb. 25, 2024
Nov.Feb. 26, 2023
Nov. 27, 2022
Restructuring, impairment, and other exit costs
$
123.65.8
$
11.11.4
$
124.8130.6
$
12.714.1
Cost of sales
8.30.1
0.50.7
16.917.0
1.21.9
Total restructuring
 
and impairment charges
$
131.95.9
$
11.62.1
$
141.7147.6
$
13.916.0
Project-related costs classified in cost of sales
$
0.30.5
$
-
$
1.11.6
$
-
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,net recoveries, including foreign currency translation
1.7(0.1)
Utilized in fiscal 2024
(16.3)(27.7)
Reserve balance as of Nov. 26, 2023Feb. 25, 2024
$
33.119.9
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
Nov. 26, 2023Feb. 25, 2024
May 28, 2023
Goodwill
$
14,441.814,433.7
$
14,511.2
Other intangible assets:
Intangible assets not subject to amortization:
Brands and other indefinite-lived intangibles
6,717.26,715.7
6,712.4
Intangible assets subject to amortization:
Customer relationships and other finite-lived intangibles
387.0
386.3
Less accumulated amortization
(140.9)(145.5)
(131.1)
Intangible assets subject to amortization, net
246.1241.5
255.2
Other intangible assets
6,963.36,957.2
6,967.6
Total
$
21,405.121,390.9
$
21,478.8
12
Based on the
 
on
the carrying
value
of
 
finite-lived intangible assets
 
intangibleas of February
 
assets as
of
November
26,
2023,
25, 2024, 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-monthnine-month period
 
ended November 26, 2023,February 25, 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
(0.2)1.0
-
(0.1)
13.38.3
7.83.5
20.812.7
Balance as of Nov. 26, 2023Feb. 25, 2024
$
6,542.26,543.4
$
6,062.8
$
805.5
$
604.6599.6
$
426.7422.4
$
14,441.814,433.7
The changes in the carrying amount of other intangible assets during the six-monthnine-month
 
period ended November 26, 2023,February 25, 2024, were as follows:
 
 
 
 
 
 
In Millions
Total
Balance as of May 28, 2023
$
6,967.6
Amortization, net of foreign currency translation
(4.3)(10.4)
Balance as of Nov. 26, 2023Feb. 25, 2024
$
6,963.36,957.2
Our
 
annual
 
goodwill
 
and
 
indefinite-lived
 
intangible
 
assets
 
impairment
 
test
 
was
 
performed
 
on
 
the
 
first
 
day
 
of
 
the
 
second
 
quarter
 
of
fiscal 2024. As a
 
result of lower future profitability
 
projections for our Latin
 
America reporting unit, we
 
determined that the fair
 
value
of the reporting unit was
 
less than its book value and
 
recorded a $
117.1
 
million non-cash goodwill impairment
 
charge in restructuring,
impairment,
 
and
 
other
 
exit
 
costs
 
in
 
our
 
Consolidated
 
Statements
 
of
 
Earnings.
 
Our
 
estimates
 
of
 
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 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
 
had
 
risk
 
of
 
decreasing
 
coverage.
 
We
 
will
 
continue
 
to
 
monitor
 
these
 
businesses
 
for
potential impairment.
13
 
(5) Inventories
The components of inventories were as follows:
 
 
 
 
 
 
 
 
 
 
 
In Millions
Nov. 26, 2023Feb. 25, 2024
May 28, 2023
Finished goods
$
2,053.11,772.1
$
2,066.9
Raw materials and packaging
528.0501.2
572.2
Grain
138.5103.3
133.8
Excess of FIFO over LIFO cost
(553.6)(548.6)
(600.9)
Total
$
2,166.01,828.0
$
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.
13
Although we do
 
not meet the
 
criteria for
 
cash flow hedge
 
accounting, we believe
 
that these instruments
 
are effective
 
in achieving our
objective of providing certainty
 
in the future price of commodities purchased
 
for use in our supply chain.
 
Accordingly, for
 
purposes of
measuring
 
segment
 
operating
 
performance,
 
these
 
gains
 
and
 
losses
 
are
 
reported
 
in
 
unallocated
 
corporate
 
items
 
outside
 
of
 
segment
operating results
 
until such time
 
that the exposure
 
we are managing
 
affects earnings.
 
At that time,
 
we reclassify
 
the gain or
 
loss from
unallocated
 
corporate
 
items
 
to
 
segment
 
operating
 
profit,
 
allowing
 
our
 
operating
 
segments
 
to
 
realize
 
the
 
economic
 
effects
 
of
 
the
derivative without experiencing any resulting mark-to-market volatility,
 
which remains in unallocated corporate items.
 
Unallocated corporate items for the quarters and six-monthnine-month periods ended
 
NovemberFebruary 25, 2024, and February 26, 2023, and November 27, 2022, included:
 
 
 
 
 
 
 
Quarter Ended
Six-MonthNine-Month Period Ended
In Millions
Nov.Feb. 25, 2024
Feb. 26, 2023
Nov. 27, 2022Feb. 25, 2024
Nov.Feb. 26, 2023
Nov. 27, 2022
Net loss on mark-to-market valuation of certain
 
 
commodity positions
$
(38.2)(24.5)
$
(20.9)(30.2)
$
(9.8)(34.3)
$
(93.2)(123.4)
Net loss (gain) on commodity positions reclassified from
 
 
unallocated corporate items to segment operating profit
14.611.7
(20.5)(21.5)
17.829.5
(63.5)(85.0)
Net mark-to-market revaluation of certain grain inventories
(1.5)(12.9)
16.3(14.9)
11.8(1.1)
(43.1)(58.0)
Net mark-to-market valuation of certain commodity
 
 
positions recognized in unallocated corporate items
$
(25.1)(25.7)
$
(25.1)(66.6)
$
19.8(5.9)
$
(199.8)(266.4)
 
As
of
 
NovemberFebruary
 
26,25,
 
2023,2024,
 
the
net
 
notional
 
value
 
of
 
commodity
 
derivatives
 
was
 
$
420.8306.3
 
million,
 
of
 
which
 
$
162.5124.2
 
million
 
related
 
to
energy inputs and $
258.3182.1
 
million related to agricultural inputs. These contracts relate to inputs that generally
 
will be utilized within the
next
12
 
months.
We alsoIn
 
the
third
quarter
of
fiscal
2024,
in
advance
of
our
$
500.0
million
debt
issuance,
we
entered
into
and
settled
$
250.0
million
of
treasury locks, resulting in a gain of $
0.3
million.
We
also have net
investments in foreign
 
foreign subsidiaries
that are denominated
 
in euros. As of November 26,
 
2023,of February
25, 2024, we
hedged a portion
 
of
these investments with €
2,960.02,967.5
 
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
November
26,
2023, February 25, 2024,
 
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 February
 
As
of
November
26,
2023,
25, 2024, $
1,388.21,348.9
 
million
of
our
total
accounts
 
payable
were
payable
to
 
suppliers
who
utilize
these third-
third-partyparty services.
 
As of
 
May 28,
 
2023, $
1,430.1
 
million of
 
our total
 
accounts payable
 
were payable
 
to suppliers
 
who utilize
 
these third-
third-partyparty services.
 
(7) Debt
The components of notes payable were as follows:
 
 
 
 
 
 
 
 
 
 
In Millions
Nov. 26, 2023Feb. 25, 2024
May 28, 2023
U.S. commercial paper
$
730.7683.3
$
-
Financial institutions
68.53.4
31.7
Total
$
799.2686.7
$
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.
14
The following table details the fee-paid committed and uncommitted credit
 
lines we had available as of November 26, 2023:February 25, 2024:
 
 
 
 
 
 
 
 
 
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 November 26, 2023.February 25, 2024.
Long-Term
 
Debt
 
The fair values
 
and carrying
 
amounts of long-term
 
debt, including
 
the current portion,
 
were $
10,920.311,112.5
 
million and $
11,851.511,827.3
 
million,
respectively,
 
as of
 
November 26,February
 
2023. 25,
2024.
The
 
fair value
 
of long-term
 
debt was
 
was estimated
using
 
market quotations
 
and
discounted
 
cash
flows based
 
on our
 
current incremental
 
borrowing rates
 
for similar
 
types of
 
instruments. Long
 
-term debt
 
is a
 
Level 2
 
liability in
 
the
fair value hierarchy.
In
the
third
quarter of
fiscal
2024,
we
issued
$
500.0
million
of
4.7
percent
fixed-rate
notes due
January 30, 2027
. We
used
the
net
proceeds to repay $
500.0
million of
3.65
percent fixed-rate notes due
February 15, 2024
.
 
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
 
our long-term
debt agreements
 
contain restrictive
 
covenants.
As of November 26, 2023,February 25, 2024, 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.
15
Our noncontrolling interests contain restrictive covenants. As of November 26, 2023,February 25, 2024, 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.Feb. 25, 2024
Feb. 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
 
$
595.5670.1
$
6.86.2
$
605.9553.1
$
2.44.8
Other comprehensive income (loss) income::
Foreign currency translation
$
(32.4)10.7
$
9.8(8.1)
(22.6)2.6
0.3(0.2)
$
(144.7)3.4
$
29.19.0
(115.6)12.4
0.60.1
Other fair value changes:
Hedge derivatives
2.5
(0.6)(8.8)
1.9
(6.9)
-
26.8(6.3)
(6.0)0.6
20.8(5.7)
-
Reclassification to earnings:
Hedge derivatives (a)
(3.4)(0.3)
1.00.2
(2.4)(0.1)
-
1.823.1
(0.8)(4.2)
1.018.9
-
Amortization of losses and
 
prior service costs (b)
11.5
(2.3)(2.4)
9.29.1
-
18.318.1
(4.1)(4.2)
14.213.9
-
Other comprehensive income (loss) income
$
(21.8)13.1
$
7.9(8.4)
(13.9)4.7
0.3(0.2)
$
(97.8)38.3
$
18.21.2
(79.6)39.5
0.60.1
Total comprehensive income
$
581.6674.8
$
7.16.0
$
526.3592.6
$
3.04.9
(a)
 
(Gain) loss reclassified from AOCI into earnings is reported in interest, net for interest rate swaps and in cost of sales and SG&A expenses for foreign exchange contracts.
(b)
 
Loss reclassified from AOCI into earnings is reported in benefit plan non-service income.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six-Month
Nine-Month Period Ended
Six-MonthNine-Month Period Ended
Nov.Feb. 25, 2024
Feb. 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
 
$
1,269.01,939.1
$
13.619.8
$
1,425.91,979.0
$
5.710.5
Other comprehensive (loss) income:
Foreign currency translation
$
(54.4)(43.7)
$
13.65.5
(40.8)(38.2)
0.40.2
$
(86.7)(83.3)
$
(23.8)(14.8)
(110.5)(98.1)
(0.7)(0.6)
Other fair value changes:
Hedge derivatives
(0.2)(9.0)
(0.2)1.7
(0.4)(7.3)
-
(23.0)(29.3)
5.56.1
(17.5)(23.2)
-
Reclassification to earnings:
Foreign currency translation (a)
-
-
-
-
(7.4)
-
(7.4)
-
Hedge derivatives (b)
(4.7)(5.0)
2.52.7
(2.2)(2.3)
-
(0.1)23.0
(0.3)(4.5)
(0.4)18.5
-
Amortization of losses and
 
prior service costs (c)
23.034.5
(4.7)(7.1)
18.327.4
-
36.554.6
(8.2)(12.4)
28.342.2
-
Other comprehensive (loss) income
$
(36.3)(23.2)
$
11.22.8
(25.1)(20.4)
0.40.2
$
(80.7)(42.4)
$
(26.8)(25.6)
(107.5)(68.0)
(0.7)(0.6)
Total comprehensive income
$
1,243.91,918.7
$
14.020.0
$
1,318.41,911.0
$
5.09.9
(a)
 
Gain reclassified from AOCI into earnings is reported in the divestitures gain, netnet.
 
(b)
 
Gain(Gain) loss reclassified from AOCI into earnings is reported in interest, net for interest rate swaps and in cost of sales and SG&A expenses for foreign exchange contracts.
(c)
 
Loss reclassified from AOCI into earnings is reported in benefit plan non-service income.
16
Accumulated other comprehensive loss balances, net of tax effects,
 
were as follows:
 
 
 
 
 
 
 
 
 
 
In Millions
Nov. 26, 2023Feb. 25, 2024
May 28, 2023
Foreign currency translation adjustments
$
(749.4)(746.8)
$
(708.6)
Unrealized (loss) gain from hedge derivatives
3.3(3.7)
5.9
Pension, other postretirement, and postemployment benefits:
Net actuarial loss
(1,642.8)(1,630.1)
(1,670.6)
Prior service credits
86.983.3
96.4
Accumulated other comprehensive loss
$
(2,302.0)(2,297.3)
$
(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.
16
Compensation expense related to stock-based payments recognized
 
in the Consolidated Statements of Earnings was as follows:
 
 
 
 
 
 
 
 
 
Quarter Ended
Six-MonthNine-Month Period Ended
In Millions
Nov.Feb. 25, 2024
Feb. 26, 2023
Nov. 27, 2022Feb. 25, 2024
Nov.Feb. 26, 2023
Nov. 27, 2022
Compensation expense related to stock-based payments
$
23.118.2
$
24.129.1
$
58.576.7
$
57.686.7
Windfall tax benefits from stock-based payments
 
in income tax expense in our Consolidated Statements of Earnings were as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
Six-MonthNine-Month Period Ended
In Millions
Nov.Feb. 25, 2024
Feb. 26, 2023
Nov. 27, 2022Feb. 25, 2024
Nov.Feb. 26, 2023
Nov. 27, 2022
Windfall tax benefits from stock-based payments
$
0.51.2
$
5.66.2
$
8.910.1
$
18.424.6
As
 
of
 
NovemberFebruary
 
26,25,
 
2023,2024,
 
unrecognized
 
compensation
 
expense
 
related
 
to
 
non-vested
 
stock
 
options,
 
restricted
 
stock
 
units,
 
and
performance share units was $
149.8130.7
 
million. This expense will be recognized over
2321
 
months, on average.
Net cash proceeds from the exercise of stock options
 
less shares used for withholding taxes and the intrinsic
 
value of options exercised
were as follows:
 
 
 
 
 
 
Six-MonthNine-Month Period Ended
In Millions
Nov.Feb. 25, 2024
Feb. 26, 2023
Nov. 27, 2022
Net cash proceeds
$
5.711.1
$
118.5168.0
Intrinsic value of options exercised
$
2.33.4
$
55.781.8
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:
 
 
 
 
 
 
 
 
 
 
 
Six-MonthNine-Month Period Ended
Nov.Feb. 25, 2024
Feb. 26, 2023
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
21.421.5
%
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:
 
 
 
 
 
Six-MonthNine-Month Period Ended
In Millions
Nov.Feb. 25, 2024
Feb. 26, 2023
Nov. 27, 2022
Total grant date fair
 
value
$
87.491.1
$
102.6105.4
 
17
 
(11) Earnings Per Share
Basic and diluted earnings per share (EPS) were calculated using the following:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
Six-MonthNine-Month Period Ended
In Millions, Except per Share Data
Nov.Feb. 25, 2024
Feb. 26, 2023
Nov. 27, 2022Feb. 25, 2024
Nov.Feb. 26, 2023
Nov. 27, 2022
Net earnings attributable to General Mills
$
595.5670.1
$
605.9553.1
$
1,269.01,939.1
$
1,425.91,979.0
Average number
 
of common shares -– basic EPS
580.1569.5
595.9592.5
583.2578.6
598.0596.2
Incremental share effect from: (a)
Stock options
1.41.3
3.7
2.11.8
3.6
Restricted stock units and performance share units
1.92.0
2.42.8
2.1
2.42.6
Average number
 
of common shares -– diluted EPS
583.4572.8
602.0599.0
587.4582.5
604.0602.4
Earnings per share – basic
$
1.031.18
$
1.010.94
$
2.183.35
$
2.383.32
Earnings per share – diluted
$
1.021.17
$
1.010.92
$
2.163.33
$
2.363.28
(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-MonthNine-Month Period Ended
In Millions
Nov.Feb. 25, 2024
Feb. 26, 2023
Nov. 27, 2022Feb. 25, 2024
Nov.Feb. 26, 2023
Nov. 27, 2022
Anti-dilutive stock options, restricted stock units, and
 
performance share units
 
4.54.2
1.00.8
2.42.6
1.00.9
 
 
(12) Share Repurchases
Share repurchases were as follows:
 
 
 
 
 
 
 
 
 
 
Quarter Ended
Six-MonthNine-Month Period Ended
In Millions
Nov.Feb. 25, 2024
Feb. 26, 2023
Nov. 27, 2022Feb. 25, 2024
Nov.Feb. 26, 2023
Nov. 27, 2022
Shares of common stock
12.44.7
5.22.9
18.823.5
12.115.0
Aggregate purchase price
$
808.8303.1
$
400.5251.0
$
1,313.51,616.6
$
901.31,152.3
 
18
 
(13) Statements of Cash Flows
Our Consolidated Statements of Cash Flows include the following:
 
 
 
 
 
 
 
 
Six-MonthNine-Month Period Ended
In Millions
Nov.Feb. 25, 2024
Feb. 26, 2023
Nov. 27, 2022
Net cash interest payments
$
212.2294.6
$
154.3225.6
Net income tax payments
$
207.0462.3
$
365.4538.4
 
18
 
(14) Retirement and Postemployment Benefits
Components of net periodic benefit expense (income) are as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Defined Benefit
Pension Plans
Other Postretirement
 
Benefit Plans
Postemployment
Benefit Plans
Quarter Ended
Quarter Ended
Quarter Ended
In Millions
Nov.Feb. 25,
2024
Feb. 26,
2023
Nov. 27,Feb. 25,
20222024
Nov.Feb. 26,
2023
Nov. 27,Feb. 25,
20222024
Nov.Feb. 26,
2023
Nov. 27,
2022
Service cost
$
14.414.5
$
17.517.6
$
1.21.1
$
1.21.4
$
1.91.8
$
2.1
Interest cost
74.1
64.6
5.45.3
4.5
1.0
0.80.7
Expected return on plan assets
(106.0)(104.5)
(105.0)
(8.7)(8.6)
(7.8)(7.7)
-
-
Amortization of losses (gains)
21.521.6
28.428.3
(5.1)
(4.8)
(0.1)(4.9)
-
0.1
Amortization of prior service costs (credits)
0.50.4
0.30.4
(5.5)
(5.7)(5.9)
0.20.1
0.1
Other adjustments
-
-
-
-
2.6
2.9
Curtailment gain
(3.4)
-
-
-
-
-3.2
Net expense (income)
$
1.16.1
$
5.85.9
$
(12.7)(12.8)
$
(12.6)
$
5.65.5
$
5.96.2
Defined Benefit
 
Pension Plans
Other Postretirement
 
Benefit Plans
Postemployment
Benefit Plans
Six-MonthNine-Month
Period Ended
Six-MonthNine-Month
Period Ended
Six-MonthNine-Month
Period Ended
In Millions
Nov.Feb. 25,
2024
Feb. 26,
2023
Nov. 27,Feb. 25,
20222024
Nov.Feb. 26,
2023
Nov. 27,Feb. 25,
20222024
Nov.Feb. 26,
2023
Nov. 27,
2022
Service cost
$
28.643.1
$
35.152.7
$
2.43.5
$
2.64.0
$
3.75.5
$
4.26.3
Interest cost
148.3222.4
129.2193.8
10.716.0
9.013.5
2.03.0
1.62.3
Expected return on plan assets
(208.9)(313.4)
(210.0)(315.0)
(17.4)(26.0)
(15.6)(23.3)
-
-
Amortization of losses (gains)
43.064.6
56.785.0
(10.2)(15.3)
(9.7)(14.6)
(0.1)
0.10.2
Amortization of prior service costs (credits)
0.91.3
0.71.1
(10.9)(16.4)
(11.5)(17.4)
0.4
0.3
0.2
Other adjustments
-
-
-
-
5.27.8
5.99.1
Curtailment gain
(3.4)
-
-
-
-
-
Net expense (income)
$
8.514.6
$
11.717.6
$
(25.4)(38.2)
$
(25.2)(37.8)
$
11.116.6
$
12.018.2
 
 
 
(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
 
repurchase of corporate
 
stock starting after January
 
1,
2023.
 
The
 
IRA
 
does
 
not
 
have
 
a
 
material
 
impact
 
on
 
our
 
financial
 
results,
 
including
 
our
 
annual
 
estimated
 
effective
 
tax
 
rates
 
and
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
 
NovemberFebruary
 
26,25,
 
2023,2024,
 
we
 
are
 
unable
 
to
estimate any possible loss and have not recorded a loss contingency for
 
this matter.
 
 
 
(17) Business Segment and Geographic Information
We
 
operate
 
in
 
the
 
packaged
 
foods
 
industry.
 
Our
 
operating
 
segments
 
are
 
as
 
follows:
 
North
 
America
 
Retail,
 
International,
 
Pet,
 
and
North America Foodservice.
 
19
Our North America Retail
 
operating segment reflects business
 
with a wide variety of
 
grocery stores, mass merchandisers, membership
stores,
 
natural
 
food
 
chains,
 
drug,
 
dollar
 
and
 
discount
 
chains,
 
convenience
 
stores,
 
and
 
e-commerce
 
grocery
 
providers.
 
Our
 
product
categories
 
in
 
this
 
business
 
segment
 
include
 
ready-to-eat
 
cereals,
 
refrigerated
 
yogurt,
 
soup,
 
meal
 
kits,
 
refrigerated
 
and
 
frozen
 
dough
products,
 
dessert
 
and
 
baking
 
mixes,
 
frozen
 
pizza
 
and
 
pizza
 
snacks,
 
snack
 
bars,
 
fruit
 
snacks,
 
savory
 
snacks,
 
and
 
a
 
wide
 
variety
 
of
organic products including ready-to-eat cereal, frozen
 
and shelf-stable vegetables, meal kits, fruit snacks, and snack bars.
Our
 
International
 
operating
 
segment
 
consists
 
of
 
retail
 
and
 
foodservice
 
businesses
 
outside
 
of
 
the
 
United
 
States
 
and
 
Canada.
 
Our
product categories include super-premium
 
ice cream and frozen desserts, meal kits, salty snacks,
 
snack bars, dessert and baking mixes,
shelf
stableshelf-stable
 
vegetables,
 
and
 
pet
 
food
 
products.
 
We
 
also
 
sell
 
super-premium
 
ice
 
cream
 
and
 
frozen
 
desserts
 
directly
 
to
 
consumers
through owned
 
retail shops. Our
 
International segment
 
also includes products
 
manufactured in
 
the United States
 
for export, mainly
 
to
Caribbean and Latin American markets, as well as products we
 
manufacture for sale to our international joint ventures. Revenues
 
from
export activities are reported in the region or country where the end customer
 
is located.
Our Pet operating segment includes
 
pet food products sold primarily in the
 
United States and Canada in national
 
pet superstore chains,
e-commerce retailers,
 
grocery stores,
 
regional pet
 
store chains,
 
mass merchandisers,
 
and veterinary
 
clinics and
 
hospitals. Our
 
product
categories include dog and cat food (dry
 
foods, wet foods, and treats) made with
 
whole meats, fruits, vegetables and other
 
high-quality
natural
 
ingredients.
 
Our
 
tailored
 
pet
 
product
 
offerings
 
address
 
specific
 
dietary,
 
lifestyle,
 
and
 
life-stage
 
needs
 
and
 
span
 
different
product types, diet types, breed sizes for dogs, lifestages, flavors, product
 
functions,
 
and textures and cuts for wet foods.
Our
 
North
 
America
 
Foodservice
 
segment
 
consists
 
of
 
foodservice
 
businesses
 
in
 
the
 
United
 
States
 
and
 
Canada.
 
Our
 
major
 
product
categories
 
in
 
our
 
North
 
America
 
Foodservice
 
operating
 
segment
 
are
 
ready-to-eat
 
cereals,
 
snacks,
 
refrigerated
 
yogurt,
 
frozen
 
meals,
unbaked and
 
fully baked
 
frozen dough products,
 
baking mixes,
 
and bakery
 
flour.
 
Many products we
 
sell are branded
 
to the consumer
and nearly
 
all are
 
branded to
 
our customers.
 
We
 
sell to
 
distributors and
 
operators in
 
many customer
 
channels including
 
foodservice,
vending, and supermarket bakeries.
Operating profit
 
for these
 
segments excludes
 
unallocated corporate
 
items, gain
 
or loss
 
on divestitures,
 
and restructuring,
 
impairment,
and
other
 
exit
costs.
 
Results from
certain businesses
managed by
our Gold
Medal Ventures
entity are
included within
corporate and
other net
sales and
unallocated corporate
items within
operating
profit. Unallocated
 
corporate
items
 
also include
 
corporate overhead
overhead
expenses,
 
variances
 
to
 
planned
 
North
 
American
employee
 
benefits
 
and
 
incentives,
 
certain
 
charitable
 
contributions,
 
restructuring
initiative
 
project-related
 
costs,
 
gains
 
and
 
losses
 
on
corporate
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
commodity
positions
 
until
passed
back
 
to
our
operating
 
segments. These items
 
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
 
supply
chain organization, our manufacturing,operations
 
warehouse, and distribution activities are substantially integratedin
 
across our operations in order
to
to
maximize
 
efficiency
 
and
productivity.
 
As
a
 
result,
fixed
 
assets and
 
and
depreciation and amortization expenses are neither maintained nor available
 
amortization expenses
are neither
maintained
nor available by operating segment.
 
 
 
 
 
 
20
 
Our operating segment results were as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
Six-MonthNine-Month Period Ended
In Millions
Nov.Feb. 25, 2024
Feb. 26, 2023
Nov. 27, 2022Feb. 25, 2024
Nov.Feb. 26, 2023
Nov. 27, 2022
Net sales:
North America Retail
$
3,305.03,242.1
$
3,373.13,232.0
$
6,378.09,620.1
$
6,361.99,593.9
International
683.1680.1
671.7700.6
1,398.92,079.0
1,324.22,024.8
Pet
569.3624.5
592.9645.5
1,149.21,773.7
1,172.81,818.3
North America Foodservice
582.0551.7
583.0547.8
1,118.01,669.7
1,079.41,627.2
Total segment net
sales
$
5,139.45,098.4
$
5,220.75,125.9
$
10,044.115,142.5
$
9,938.315,064.2
Corporate and other
0.8
-
0.8
-
Total net sales
$
5,099.2
$
5,125.9
$
15,143.3
$
15,064.2
Operating profit:
North America Retail
$
859.9752.2
$
837.1786.9
$
1,658.12,410.3
$
1,614.92,401.8
International
34.618.2
17.842.4
84.6102.8
52.695.0
Pet
102.5128.3
86.6102.6
213.7342.0
209.7312.3
North America Foodservice
95.581.7
81.582.4
154.6236.3
135.1217.5
Total segment operating
 
profit
$
1,092.5980.4
$
1,023.01,014.3
$
2,111.03,091.4
$
2,012.33,026.6
Unallocated corporate items
157.163.9
212.1296.4
244.4308.3
545.1841.5
Divestitures gain, net
-
-(13.7)
-
(430.9)(444.6)
Restructuring, impairment, and other exit costs
123.65.8
11.11.4
124.8130.6
12.714.1
Operating profit
$
811.8910.7
$
799.8730.2
$
1,741.82,652.5
$
1,885.42,615.6
Net sales for our North America Retail operating units were as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
Six-MonthNine-Month Period Ended
In Millions
Nov.Feb. 25, 2024
Feb. 26, 2023
Nov. 27, 2022Feb. 25, 2024
Nov.Feb. 26, 2023
Nov. 27, 2022
U.S. Meals & Baking Solutions
$
1,343.31,168.5
$
1,321.71,185.3
$
2,285.23,453.7
$
2,270.9
U.S. Snacks
836.3
892.9
1,790.8
1,780.13,456.2
U.S. Morning Foods
856.9940.7
908.5918.6
1,784.72,725.4
1,812.52,731.1
U.S. Snacks
869.2
883.5
2,660.0
2,663.6
Canada
268.5263.7
250.0244.6
517.3781.0
498.4743.0
Total
$
3,305.03,242.1
$
3,373.13,232.0
$
6,378.09,620.1
$
6,361.99,593.9
Net sales by class of similar products were as follows:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Quarter Ended
Six-MonthNine-Month Period Ended
In Millions
Nov.Feb. 25, 2024
Feb. 26, 2023
Nov. 27, 2022Feb. 25, 2024
Nov.Feb. 26, 2023
Nov. 27, 2022
Snacks
$
1,037.31,052.4
$
1,102.81,065.5
$
2,174.03,226.4
$
2,171.23,236.7
Cereal
776.9843.4
810.9801.9
1,594.82,438.2
1,625.62,427.5
Convenient meals
785.1840.2
786.4815.6
1,450.62,290.8
1,465.62,281.2
Dough
775.1605.1
745.6644.8
1,310.01,915.1
1,210.41,855.2
Pet
572.3627.6
593.7646.2
1,152.21,779.8
1,174.51,820.7
Baking mixes and ingredients
562.3507.5
563.7517.7
1,028.81,536.3
1,037.21,554.9
Yogurt
364.9367.0
357.5378.0
733.31,100.3
703.51,081.5
Super-premium ice cream
168.3142.0
164.9148.2
392.3534.3
348.4496.6
Other
97.2114.0
95.2108.0
208.1322.1
201.9309.9
Total
$
5,139.45,099.2
$
5,220.75,125.9
$
10,044.115,143.3
$
9,938.315,064.2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
21
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,
 
and
 
the
 
increasing
 
stability
 
of
 
the
 
supply
 
chain
 
environment.
 
We
 
anticipate
 
input
 
cost
 
inflation
 
of
approximately
 
54
 
percent
 
in
 
fiscal
 
2024
 
and
 
expect
 
to
 
generate
 
higher
 
levels
 
of
 
Holistic
 
Margin
 
Management
 
(HMM)
 
cost
 
savings
compared to fiscal 2023.
CONSOLIDATED
 
RESULTS
 
OF OPERATIONS
SecondThird Quarter Results
In
the
second
third quarter
of
fiscal
2024,
 
net
sales
and
organic
net
sales
decreased
 
2
1 percent
compared
to
the
same
period
 
last
year. Operating
Operating
profit
 
increased 2
25
 
percent
 
to $812
$911
 
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 offseta
 
by
goodwillfavorable
 
impairmentchange
in the
mark-to-market
valuation
of
certain
commodity
positions
 
and
 
restructuringgrain
inventories,
 
charges,and
net
recoveries
from
the
fiscal
2023
voluntary
recall
on
certain
international
Häagen-Dazs
ice
cream
products,
partially
offset
by
higher
input
costs
and
 
a
 
decrease
 
in
 
contributions
 
from
 
volume
 
growth,
and
higher
input
costs.growth.
 
Operating
profit margin
 
of 15.8 percent
increased 50
basis points. Adjusted
operating profit
 
of $989 million
increased 13
percent on a
constant-
currency basis, primarily
driven by favorable
net price realization
and mix and
lower SG&A expenses,
including a decrease
in certain
compensation
and
benefits
expenses,
partially
offset
by
a
decrease
in
contributions
from
volume
growth
and
higher
input
costs.
Adjusted operating profit margin
increased 240 basis points to
19.3 percent. Diluted earnings
per share of $1.02 increased
1 percent in
the
second
quarter
 
of
 
fiscal17.9
 
2024.percent
increased
370
basis
points.
 
Adjusted
 
dilutedoperating
 
earnings
per
shareprofit
 
of
 
$1.25914
million
 
increased
 
14
 
percent
 
on
 
a
 
constant-currency
 
basis,
compared to the
 
secondprimarily
driven
by
favorable
net
price
realization
and
mix
and
a
decrease
in
certain
compensation
and
benefits
expenses,
partially
offset
by
higher input costs and
a decrease in contributions
from volume growth.
Adjusted operating profit margin
increased 220 basis points to
17.9 percent. Diluted earnings per
share of $1.17 increased 27 percent
in the third quarter of fiscal
 
2024. Adjusted diluted earnings per
share of
$1.17 increased
22 percent
on a
constant-currency
basis compared
to the
third quarter
of fiscal
2023.
See the “Non-GAAP
 
“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 secondthird quarter of
 
of fiscal 2024 follows:
 
Quarter Ended Nov. 26, 2023Feb. 25, 2024
In millions,
except per share
Quarter Ended
Nov.Feb. 25, 2024 vs.
Feb. 26, 2023 vs.
Nov. 27, 2022
Percent
of Net
Sales
Constant-
Currency
Growth (a)
Net sales
 
$
5,139.45,099.2
(2)(1)
%
Operating profit
811.8910.7
225
%
15.817.9
%
Net earnings attributable to General Mills
595.5670.1
(2)21
%
Diluted earnings per share
$
1.021.17
127
%
Organic net sales growth rate (a)
(2)(1)
%
Adjusted operating profit (a)
989.4914.5
1213
%
19.317.9
%
1314
%
Adjusted diluted earnings per share (a)
$
1.251.17
1421
%
1422
%
(a)
 
See the "Non-GAAP Measures"“Non-GAAP Measures” section below for our use of measures not defined by
 
GAAP.
Consolidated
net sales
 
were as follows:
 
Quarter Ended
Nov.Feb. 25, 2024
Feb. 25, 2024 vs.
Feb. 26, 2023
Nov.Feb. 26, 2023 vs.
Nov. 27, 2022
Nov. 27, 2022
Net sales (in millions)
$
5,139.45,099.2
(2)(1)
%
$
5,220.75,125.9
Contributions from volume growth (a)
(4)(2)
pts
Net price realization and mix
32
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
 
secondthird quarter of
 
of fiscal
2024 decreased
 
21 percent compared
 
compared to
the same period
 
period in
fiscal 2023,
 
driven by
a decrease
 
in
contributions from volume growth, partially offset by
 
favorable net price realization and mix.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
22
Components of organic net sales growth are shown in the following
 
table:
 
 
Quarter Ended Nov. 26, 2023Feb. 25, 2024 vs.
Quarter Ended Nov. 27, 2022Feb. 26, 2023
Contributions from organic volume growth (a)
(4)(2)
pts
Organic net price realization and mix
32
pts
Organic net sales growth
(2)(1)
ptspt
Foreign currency exchange
Flat
Acquisition and divestitures
Flat
Net sales growth
(2)(1)
ptspt
Note: Table may
 
not foot due to rounding.
(a)
 
Measured in tons based on the stated weight of our product shipments.
Organic
 
net
sales
 
decreased
 
2 percent1
 
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.
Cost
of
sales
decreased
$142 million
to
$3,374
millionpercent
 
in
 
the
 
secondthird
 
quarter
 
of
 
fiscal
 
2024
 
compared
 
to
 
the
 
same
 
period
 
in
 
fiscal
2023.
 
2023,
driven
by
a
decrease in contributions from organic volume growth,
partially offset by favorable organic net price realization
and mix.
Cost of
sales
decreased $69 million
to $3,392
million in
the third
quarter of
fiscal 2024
compared to
the same
period in
fiscal 2023.
The
 
decrease
 
was
primarily
 
driven
 
by
 
a $74
 
$153 million
 
decline
 
attributable
 
to
 
lower
 
volume,
 
partially
 
offset
 
by
 
a
 
$646
 
million
increase
 
increase
attributable
to
product
 
rate
and
mix.
We
 
recorded
a
$25 $26 million
 
net
increase
in cost
 
of
sales related
to
 
the
mark-to-market
valuation
 
of
certain
 
commodity
 
positions
 
and
 
grain
 
inventories
 
in
 
secondthe third
 
quarter
of
 
fiscal
 
2024,
 
compared
 
to
 
a $67
 
$25 million
 
net
increase
 
in
 
the
third quarter of fiscal 2023.
 
second
Divestitures gain, net
 
totaled $14 million in the third quarter of fiscal 2023.
Selling, general,
and administrative
(SG&A)
expenses
decreased
$156 million
to $791 million
in the
third quarter
 
of fiscal
2024,
compared
to
the
same
period
in
 
fiscal
 
2023.2023,
 
Weprimarily
 
alsodriven
 
recordedby
 
$8a
 
million
of
restructuring
chargesdecrease
 
in
 
costcertain
compensation
and
benefits
expenses,
net
recoveries from
the fiscal 2023
voluntary recall
 
of certain international
Häagen-Dazs
ice cream products
 
sales,
 
and favorable net
corporate
investment activity.
SG&A expenses
as a
percent of
net sales in
 
the third
 
second
quarter of
 
fiscal 2024
 
(please referdecreased 300
 
to Note
3 to
the Consolidated
Financial Statements
in Part
I, Item
1 of
this report).
In the
second
quarter of
fiscal 2023,
we recorded
a $3
million charge
related to
a voluntary
recall on
certain international
Häagen-Dazs
ice cream
products.
SG&A
expenses
decreased
$64 million
to $830 million
in the
second
quarter
of fiscal
2024,basis points
 
compared
to the
same period
in fiscal
2023,
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 second
quarter of fiscal 2024 decreased 90 basis points compared
to the secondthird quarter
of fiscal 2023.
Restructuring, impairment,
 
and other exit
 
costs
totaled $124$6 million
 
in the second
quarter of fiscal
2024, compared to
$11 million
in the
same period
last year.
In the
secondthird quarter
 
of fiscal 2024,
 
2024, wecompared to $1 million
 
recorded ain the
same
 
$117period
 
million non-cashlast
 
goodwill impairment
charge
related to our Latin America
reporting unit.year.
 
In the second quarter of
fiscal
 
2024,
we
approved a
restructuring
 
action actions
to
enhance
the go-
go-to-market
to-market
commercial
strategy
 
and related
associated
organizational
 
structure of our Pet
 
of
our
Pet segment,
and
as a
 
result, recorded $4 million
of charges.
In
addition,
 
we
also
 
recorded
 
$2
8 million
 
of
restructuring
 
charges
 
in
 
the
 
secondthird
quarter of
 
fiscal 2024.
In addition,
we recorded
a $3
million net
recovery of
restructuring charges
in the
third quarter
 
of
fiscal
 
2024
related
 
to
 
actions
 
previously
 
announced
(please
refer
to
Note
3
to
the
Consolidated
Financial
Statements
in
Part
I,
Item
1
of
this
report).
Benefit plan
non-service income
totaled $19 million
in the
third quarter
of fiscal
2024,
compared to $11
 
$22 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
and higher
 
expected returninterest costs, partially offset by lower amortization of losses.
on plan assets.
Interest,
 
net
for
the
 
second
third quarter
 
of
fiscal
 
2024
totaled
 
$118122 million,
up
 
$2623 million
from
 
the
second third
 
quarter
of
 
fiscal 2023,
 
2023,primarily
primarily driven by higher interest rates and higher average long-term debt
levels.
The
effective
tax
rate
 
for
the second third
quarter
 
of fiscal
2024
was 19.018.5
 
percent
compared
to 20.216.6
 
percent
for
the second
third
 
quarter
of fiscal
2023.
 
The
 
1.21.9
 
percentage
 
point
 
decreaseincrease
 
was
 
primarily
 
due
 
to
 
certain
favorable
 
changestax
components
related
to
the
divestitures
 
in
 
earningsfiscal
2023, partially
 
mix
offset by
 
jurisdiction
and
certain
nonrecurring
 
discrete
tax
 
benefits
in
the
second
quarter
of
fiscal
2024.
Our
effective
tax
rate
excluding
certain
items
affecting
comparability
was 20.8
percent in
 
the secondthird
 
quarter of
 
fiscal 2024.
Our effective
tax rate
excluding
certain items affecting
comparability was 18.4
percent in the third
quarter of fiscal 2024,
 
compared to 21.6
 
21.1 percent in the same
 
in theperiod
last
 
same period
last year
 
(see
the
“Non-GAAP
 
Measures”
 
section
 
below
 
for
 
a
 
description
 
of
 
our
 
use
 
of
 
measures
 
not
 
defined
 
by
 
GAAP).
 
The
 
0.3
percentage
point3.2
percentage point decrease was primarily due to favorable earnings mix by jurisdiction incertain nonrecurring discrete
 
tax benefits in the secondthird quarter of fiscal 2024.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
23
After-tax earnings from joint
 
from
joint ventures
 
for the second
third quarter
of fiscal
2024
decreased to $24 million comparedincreased to
 
$2518 million compared
to $13 million
in the
same
period
in
fiscal
2023,
 
primarily
due
to
higher
net
sales
driven
by foreign currency exchange
favorable
net
price
realization
and higher input costs
mix
at
Cereal
Partners
Worldwide
(CPW) and
discrete tax
items at Cereal Partners
Worldwide (CPW)
and Häagen-Dazs
Japan, Inc. (HDJ),CPW,
 
partially offset
 
by higher net
 
sales driven by
favorable net price
realization and mixinput costs
 
at CPW and
Häagen-Dazs Japan,
Inc. (HDJ).
HDJ. On
a
constant-currency
 
basis,
after-tax
earnings
 
from
joint
ventures
increased
 
5 64
percent (see
(see
the “Non-GAAP
“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:
 
Quarter Ended Nov. 26, 2023Feb. 25, 2024 vs.
Quarter Ended Nov. 27, 2022Feb. 26, 2023
CPW
HDJ
Total
Contributions from volume growth (a)
(6)(4)
pts
(1)(9)
ptpts
Net price realization and mix
1716
pts
67
pts
Net sales growth in constant currency
11
pts
6(2)
pts
109
pts
Foreign currency exchange
(2)(4)
pts
(3)(10)
pts
(2)(5)
pts
Net sales growth
107
pts
2(12)
pts
83
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 26
million
 
in
the
 
second third
quarter
 
of
fiscal
 
2024
from
 
the
same
 
period
a
 
year
ago
primarily due to share repurchases.repurchases, partially offset by option
exercises.
Six-MonthNine-Month Results
In the
 
six-monthnine-month period
 
ended NovemberFebruary
 
26, 2023,25, 2024,
 
net sales
 
and organic
 
net sales
 
increased 1
 
percent compared
 
to the
 
same period
last
year.
 
Operating
profit
 
decreased 8 increased
1
percent
 
to $1,742
$2,652
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 in
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 oninventories,
 
a constant-currency basis, primarily
 
driven by favorable net pricedecrease
 
realization in
certain
compensation
and mix,
benefits
expense,
favorable
net
corporate
investment
activity,
and
net
recoveries
from
the
fiscal
2023
voluntary
recall on certain
international
Häagen-Dazs
ice cream products
compared to
recall-related charges
in fiscal 2023,
partially offset
 
by highera
net
gain
on
divestitures
in
fiscal
2023,
higher
input
 
costs,
 
a
 
decrease
 
in
 
contributions
 
from
 
volume
 
growth,
 
higher
impairment
and
restructuring
charges,
and higher
media and
 
anadvertising expenses.
 
increaseOperating
profit margin
of 17.5
percent increased
10 basis
points
compared to
the same
period last
year.
Adjusted operating
profit of
$2,803 million
increased 9
percent on
a constant-currency
basis,
primarily
driven
by
favorable
net
price
realization
and
mix
and
a
decrease
 
in
 
certain
 
SG&Acompensation
 
expenses.and
benefits
expenses,
partially
offset by higher input
costs and a decrease in
contributions from volume growth.
 
Adjusted
operating
profit
margin
 
increased 150 basis
points to 18.5
 
110
basis points
to
18.8 percent
.
percent. Diluted earnings
 
per share of $3.33
increased 2 percent in
the nine-month period
ended February 25, 2024,
and
adjusted diluted
earnings per
 
share of
 
$2.16 decreased3.51 increased
 
811 percent
 
inon a
constant-currency basis
compared to
 
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
“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-monthnine-month period
 
ended November 26, 2023,February 25, 2024, follows:
Six-MonthNine-Month Period Ended Nov.
26, 2023Feb. 25, 2024
In millions,
except per share
Six-Month PeriodNine-Month
Period Ended Nov. 26,
2023Feb. 25, 2024 vs. Nov. 27,
2022Feb. 26, 2023
Percent of Net
Sales
Constant-
Currency
 
Growth (a)
Net sales
 
$
10,044.115,143.3
1
%
Operating profit
1,741.82,652.5
(8)1
%
17.317.5
%
Net earnings attributable to General Mills
1,269.01,939.1
(11)(2)
%
Diluted earnings per share
$
2.163.33
(8)2
%
Organic net sales growth rate (a)
1
%
Adjusted operating profit (a)
1,888.42,802.9
79
%
18.818.5
%
79
%
Adjusted diluted earnings per share (a)
$
2.343.51
610
%
611
%
(a)
 
See the "Non-GAAP Measures"“Non-GAAP Measures” section below for our use of measures not defined by GAAP.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
24
Consolidated
net sales
 
were as follows:
Six-MonthNine-Month Period Ended
Nov.Feb. 25, 2024
Feb. 25, 2024 vs.
Feb. 26, 2023
Nov.Feb. 26, 2023 vs.
Nov. 27, 2022
Nov. 27, 2022
Net sales (in millions)
$
10,044.115,143.3
1
%
$
9,938.315,064.2
Contributions from volume growth (a)
(3)
pts
Net price realization and mix
43
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-monthnine-month
 
period ended
 
November 26,February 25,
 
2023,2024, 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-MonthNine-Month Period Ended Nov.
26, 2023Feb. 25, 2024 vs.
Six-MonthNine-Month Period Ended Nov.
27, 2022Feb. 26, 2023
Contributions from organic volume growth (a)
(3)
pts
Organic net price realization and mix
54
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 roundingrounding.
(a)
 
Measured in tons based on the stated weight of our product shipments.
Organic
 
net
 
sales
 
increased
 
1
 
percent
 
in
 
the
 
six-monthnine-month
 
period
 
ended
 
NovemberFebruary
 
26,25,
 
2023,2024,
 
driven
 
by
 
favorable
 
organic
 
net
 
price
realization and mix, partially offset by a decrease in
 
contributions from organic volume growth.
 
Cost
 
of
 
sales
 
decreased
 
$278347 million
 
to
 
$6,5089,900
 
million
 
in
 
the
 
six-monthnine-month
 
period
 
ended
 
NovemberFebruary
 
26,25,
 
2023,2024,
 
compared
 
to
 
the
 
same
period
 
in
 
fiscal
 
2023.
 
The
 
decrease
 
was
 
primarily
 
driven
 
by
 
a
 
$207281
 
million
 
decline
 
due
 
to
 
lower
 
volume,
 
partially
 
offset
 
by
 
a
$156202 million increase attributable
 
attributable to
product rate
and mix. We
 
We recorded a
 
a $20$6 million net decrease
increase in
 
cost of
sales related to
 
to the
mark-
to-market
 
valuation
 
of
 
certain
 
commodity
 
positions
 
and
 
grain
 
inventories
 
in
 
the
 
six-monthnine-month
 
period
 
ended
 
NovemberFebruary
 
26,25,
 
2023,2024,
compared to a
 
$200266 million net increase
 
in the six-monthnine-month
 
period ended NovemberFebruary
 
27, 2022.26, 2023. In the
 
six-monththe nine-month period ended
 
Novemberended February
27, 2022,26, 2023,
 
we recorded
 
a $24$25 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
 
$12
 
million
 
of
 
restructuring
 
initiative
 
project-related
 
costs in
 
cost
 
of
sales in the
 
six-monthnine-month period
 
ended NovemberFebruary
 
26, 2023,25, 2024, compared
 
compared to $1$2 million
 
million of restructuring charges
 
charges in the same
 
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$171
 
million to
 
$1,6702,461 million in the
 
the six-monthnine-month period
 
period ended February
 
November 26,
2023,25, 2024, compared
 
to the
same
period
in
fiscal
2023,
primarily
driven
by
a
decrease
in
certain
compensation
and
benefits
expenses,
favorable
net
corporate
investment activity,
and net recoveries
from the fiscal
 
2023 primarily drivenvoluntary
 
by net favorablerecall on
 
corporate investment activity,certain international
Häagen-Dazs
ice cream products
in fiscal 2024, partially offset
 
by higher media and advertising
 
and advertising
expenses.
SG&A expenses as
a percent
 
of net sales
decreased 40130 basis
basis points compared
toin the six-month
nine-month period ended November
26,
2023,February 25, 2024, compared to the same
period of fiscal 2023.
 
Divestitures
 
gain,
 
net
 
totaled
 
$431445
 
million
 
in
 
the
 
six-monthnine-month
 
period
 
ended
 
NovemberFebruary
 
27,26,
 
2022,2023,
 
primarily
 
related
 
to the
 
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$131 million in
 
in the six-monthnine-month period
 
ended November 26,February 25,
 
2023,2024, compared
to $13$14 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,
 
we
 
approved
 
a
restructuring
 
actionactions
 
to
 
enhance
 
the
 
go-to-market
 
and
 
associated
organization
structure
of
 
our
Pet
segment,
 
and
as
a
result,
 
we
recorded $4
$13
million
 
of
charges
in
the
 
six-month period endednine-month
 
November
26,period
 
2023. ended
February
25,
2024.
In
 
addition,
 
we
also
recorded
 
$31
 
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
 
samenine-month
period ended February 25, 2024 (please refer to Note 3 to the Consolidated
 
period
of
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$56 million
 
in the six-monthnine-month
 
period ended NovemberFebruary
 
26, 2023,25, 2024, compared
 
to $43$65 million
 
in
the same period last year, primarily reflecting
 
an increase inhigher interest costs, partially offset by lower amortization of
 
losses.
Interest, net
 
for the six-monthnine-month
 
period ended NovemberFebruary
 
26, 2023, increased25, 2024,
 
$56increased $79 million
to $235$356 million
 
compared to the
 
same period
of fiscal 2023, primarily driven by higher interest rates and higher average
 
average long-term debt levels.
The
effective
 
tax rate
 
for
 
the six-monthnine-month
 
period ended
 
NovemberFebruary
 
26, 2023,25,
 
2024, was 20.0
19.5
 
percent compared
 
to 20.819.6
 
percent in
 
the same
period
 
last
 
year.
 
The
 
0.80.1
 
percentage
 
point
 
decrease
 
was
 
primarily
 
due
 
to
 
unfavorablecertain
nonrecurring
discrete
 
tax
 
components
related
to
the
divestituresbenefits
 
in
fiscal 2023
 
and favorable
earnings mix
by jurisdiction
in fiscal
 
2024,
partially offset
 
by certain
 
nonrecurring
discretefavorable tax
 
benefits in
fiscalcomponents related
 
to the
divestitures in
fiscal 2023.
 
Our
effective
 
tax
rate
 
excluding certain
certain
items
affecting
 
comparability
 
was
21.0 20.1
 
percent
 
in
the
 
six-monthnine-month
 
period ended
 
ended
NovemberFebruary 25,
 
26,
2023,2024,
 
compared
to
 
20.4
20.8 percent
 
in the
the
same
period
 
last
year
(see (see
 
the
“Non-GAAP
“Non-GAAP Measures”
 
section
below
 
for a description
 
a
description of
our use
 
of measures not
 
not defined
by GAAP).
The 0.7 percentage point decrease is primarily due to certain nonrecurring discrete
 
The 0.6
percentage point
increase is primarily
due to
certain nonrecurring
discrete tax benefits in fiscal 2023.2024.
After-tax
 
earnings from
 
joint ventures
 
increased
 
to $48$66 million
 
for the
 
six-month periodnine-month
 
period ended November
 
26, 2023,February 25,
 
2024, compared
to
$4558 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 ventures
increased 25
percent (see
 
the “Non-GAAP
 
Measures” section
 
below for
 
a description
 
of our use
 
use of measures
 
measures not defined
 
defined by
GAAP).
GAAP). The components of our joint ventures’ net sales growth are shown in the following
 
the following table:
Six-MonthNine-Month Period Ended Nov.
26, 2023Feb. 25, 2024 vs.
Six-MonthNine-Month Period Ended Nov.
27, 2022Feb. 26, 2023
CPW
HDJ
Total
Contributions from volume growth (a)
(8)(7)
pts
(3)(5)
pts
Net price realization and mix
1817
pts
8
pts
Net sales growth in constant currency
10
pts
53
pts
9
pts
Foreign currency exchange
Flat(1)
(4)pt
(6)
pts
(1)(2)
ptpts
Net sales growth
9
pts
1(4)
ptpts
86
pts
Note: Table may not foot due to roundingrounding.
(a)
 
Measured in tons based on the stated weight of our product shipments.
Average
 
diluted
 
shares
 
outstanding
 
decreased
 
by
 
1720 million
 
in
 
the
 
six-monthnine-month
 
period
 
ended
 
NovemberFebruary
 
26,25,
 
2023,2024,
 
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
Six-MonthNine-Month Period Ended
Nov.Feb. 25,
2024
Feb. 25, 2024 vs
Feb. 26, 2023
Feb. 26,
2023
Nov.Feb. 25,
2024
Feb. 25, 2024 vs
Feb. 26, 2023 vs
Nov. 27, 2022
Nov. 27,
2022
Nov.Feb. 26,
2023
Nov. 26, 2023 vs
Nov. 27, 2022
Nov. 27,
2022
Net sales (in millions)
$
3,305.0
(2)
%
$
3,373.1
6,378.03,242.1
Flat
$
6,361.93,232.0
$
9,620.1
Flat
$
9,593.9
Contributions from volume growth (a)
(5)(2)
pts
(5)(4)
pts
Net price realization and mix
43
pts
65
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
2 percent
 
in the
second third quarter
of fiscal
2024,
compared to
the same
period in
 
fiscal 2023,
driven by a decrease in contributions from volume growth, partially offset2024 and nine-month period ended
 
by favorable net price realization and mix.
North America Retail net sales in the six-month period ended November 26, 2023,
February 25, 2024, essentially matched
the same period periods
in fiscal 2023.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
26
The components of North America Retail organic net
 
sales growth are shown in the following table:
 
Quarter Ended
Six-MonthNine-Month Period Ended
Nov. 26, 2023Feb. 25, 2024
Nov. 26, 2023Feb. 25, 2024
Contributions from organic volume growth (a)
(5)(2)
pts
(5)(4)
pts
Organic net price realization and mix
43
pts
65
pts
Organic net sales growth
(2)
ptsFlat
1
pt
Foreign currency exchange
Flat
Flat
Divestiture (b)
Flat
(1)
ptFlat
Net sales growth
(2)
ptsFlat
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 decreased 2
percent in the secondthird quarter
 
quarter of fiscal 2024
,
compared to essentially matched 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. 2023.
North America
 
Retail organic
 
net sales increased
 
1 percent in
 
in the six-monthnine
 
-month period ended November
 
26, 2023, comparedended February
 
25, 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.
North America Retail net sales percentage change by operating unit are shown
 
in the following table:
 
Quarter Ended
Six-MonthNine-Month Period Ended
Nov. 26, 2023Feb. 25, 2024
Nov. 26, 2023Feb. 25, 2024
Canada (a)
78
%
45
%
U.S. Meals & Baking Solutions
2(1)
%
1
%Flat
U.S. Snacks
(6)(2)
%
1
%Flat
U.S. Morning Foods
(6)2
%
(2)
%Flat
Total
(2)
%Flat
Flat
(a)
 
On a
constant-currency
 
basis, Canada net
 
net sales
increased 98
percent in
the third
quarter of
fiscal 2024
and increased
7 percent
 
in the second quarter
of fiscal 2024 and
increased 6 percent in
the six-monthnine
 
-month period
 
ended NovemberFebruary
 
26, 2023,25, 2024,
 
compared to
 
the same
 
periods in
 
fiscal 2023.
 
See the
 
"“Non-GAAP Measures"Measures
”
section below for our use of this measure not defined by GAAP.
Segment operating profit decreased
 
operating
profit
increased
3
4 percent
to
$860 $752 million
 
in
the
second
third quarter
of
 
fiscal 2024,
 
,compared to $787 million in the
 
comparedsame
to
$837 million
period in
 
the
same periodfiscal 2023,
 
in fiscalprimarily driven
 
2023, primarilyby higher
 
driven by
favorable net
price realizationinput costs
 
and mix,a
decrease in
contributions from
volume growth,
 
partially offset
 
by a decrease
favorable net price
 
in contributions
from
volume
growth,
higher
input
costs,
realization and
an
increase
in
SG&A
expenses. mix.
 
Segment
operating
profit
 
increased
3
decreased 4 percent
 
on
a
constant-currency
 
basis
in
the
 
secondthird quarter
quarter
of
fiscal
2024,
 
compared
to
the
 
same
period
in
 
fiscal
2023
(see (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
$1,658of $2,410 million
in
the
 
six-month
nine-month period
ended
 
NovemberFebruary 25, 2024,
 
26,
2023,
compared
to
$1,615 million
in
essentially matched the
same
 
period in
in
fiscal
 
2023
 
primarily
driven
byas
 
favorable
 
net
 
price
 
realization
 
and
 
mix
 
was
partially
 
offset
 
by
 
a
decrease in contributionshigher
 
from volume growth,input
 
higher input costs,
and an increase
in SG&A expenses,
including increased media
and
advertising
expenses.
Segment
operating
profit
increased
3
percent
on
 
a
 
constant-currency
basisdecrease
 
in
 
thecontributions
 
six-monthfrom
volume growth,
and an
increase in
SG&A expenses.
Segment operating
profit on
a constant-currency
basis in
the nine-month
 
period
ended February
 
ended
November25, 2024,
 
26,
2023,
compared toessentially matched
 
the same
 
period in
 
in fiscal
2023
 
(see the
 
“Non-GAAP Measures”
 
section below
 
for our
use of
this
measure not defined by GAAP).
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
27
International Segment Results
International net sales were as follows:
 
Quarter Ended
Six-MonthNine-Month Period Ended
Nov.Feb. 25,
2024
Feb. 25, 2024 vs
Feb. 26, 2023
Feb. 26,
2023
Nov.Feb. 25,
2024
Feb. 25, 2024 vs
Feb. 26, 2023 vs
Nov. 27, 2022
Nov. 27,
2022
Nov.Feb. 26,
2023
Nov. 26, 2023 vs
Nov. 27, 2022
Nov. 27,
2022
Net sales (in millions)
$
683.1680.1
2(3)
%
$
671.7700.6
$
1,398.92,079.0
63
%
$
1,324.22,024.8
Contributions from volume growth (a)
(4)
pts
(4)
pts
Net price realization and mix
3Flat
pts
85
pts
Foreign currency exchange
2Flat
pts1
2
ptspt
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 2 decreased 3
percent in the second
third quarter of
fiscal 2024, compared
 
,
compared to the same
period in
fiscal 2023, thatdriven
by a
decrease in contributions from volume growth.
International
net sales
increased 3
percent in
the nine-month
period ended
February 25,
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
Six-MonthNine-Month Period Ended
Nov. 26, 2023Feb. 25, 2024
Nov. 26, 2023Feb. 25, 2024
Contributions from organic volume growth (a)
(4)
pts
(4)
pts
Organic net price realization and mix
3Flat
pts
85
pts
Organic net sales growth
Flat(3)
4pts
2
pts
Foreign currency exchange
2Flat
pts1
2
ptspt
Net sales growth
2(3)
pts
63
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 in the second quarter
 
of fiscal 2024 essentiallydecreased
 
matched the same period3
 
in fiscal 2023 that included
the
impact
of the
voluntary
recall on
certain
international
Häagen-Dazs
ice
cream products
as a
decreasepercent
 
in
 
the
third
quarter
of
fiscal
2024,
compared
to
the
same
period
in
fiscal
2023,
driven by a decrease in contributions from organic volume
 
organic
volume growth was offset by favorable organic
net price realization and mix.growth.
International organic
 
net sales increased
 
42 percent in the
 
six-monththe nine-month period ended
 
November 26, 2023,ended February 25,
 
2024, compared to
the same period
 
period in
fiscal
 
2023
 
that
 
included
 
the
 
impact
 
of
 
the
 
voluntary
 
recall
 
on
 
certain
 
international
Häagen-Dazs
 
ice
 
cream
 
products,
 
driven
 
by
favorable organic net price realization and mix, partially offset
 
by a decrease in contributions from organic volume growth.
Segment operating
profit decreased 57
percent to
$18 million in the
third quarter
of fiscal 2024,
compared to $42
million in the
same
period in
fiscal 2023,
primarily driven
by higher
input costs
and a
decrease in
contributions from
volume growth.
Segment operating
profit decreased 53 percent
on a constant-currency basis
in the third 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 94
8
percent
 
to $35
$103
million
in
the
nine-month
period
ended
February
25,
2024,
compared
to
$95 million
in
the
same
period
in
fiscal
2023,
primarily
driven
by
favorable
net
price
realization
and
mix,
the
voluntary
recall
on
certain
international
Häagen-Dazs
ice
cream
products
in
fiscal
2023,
and
a
decrease
in
SG&A
expenses,
partially
offset
by
higher
input costs and a decrease
in contributions from volume growth.
Segment operating profit increased
14 percent on a constant-currency
basis in the secondnine
-month period ended
February 25, 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).
28
Pet Segment Results
Pet net sales were as follows:
Quarter Ended
Nine-Month Period Ended
Feb. 25,
2024
Feb. 25, 2024 vs
Feb. 26, 2023
Feb. 26,
2023
Feb. 25,
2024
Feb. 25, 2024 vs
Feb. 26, 2023
Feb. 26,
2023
Net sales (in millions)
$
624.5
(3)
%
$
645.5
$
1,773.7
(2)
%
$
1,818.3
Contributions from volume growth (a)
(5)
pts
(7)
pts
Net price realization and mix
2
pts
5
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
3 percent
in the
third 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
nine-month
period
ended
February
25,
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.
The components of Pet organic net sales growth are shown in the following
table:
Quarter Ended
Nine-Month Period Ended
Feb. 25, 2024
Feb. 25, 2024
Contributions from organic volume growth (a)
(5)
pts
(7)
pts
Organic net price realization and mix
2
pts
5
pts
Organic net sales growth
(3)
pts
(2)
pts
Foreign currency exchange
Flat
Flat
Net sales growth
(3)
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 3
percent in
the third
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 nine-month
period
ended February
25, 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.
Segment
operating
profit
increased
25
percent
to
$128
million
in
the
third
quarter
of
fiscal
2024,
compared
to
$103 million
in
the
same
period
in
fiscal
2023,
primarily
driven
by
lower
input
costs
and
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
25 percent on a
constant-currency basis in the third quarter of fiscal 2024,
 
compared to $18 million in 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
10
percent
to
$342 million
in
the
nine-month
period
ended
February
25,
2024,
compared
to
$312 million
in
the
same
period
 
in
 
fiscal
 
2023,
 
primarily
 
driven
 
by
 
favorable
 
net
 
price
 
realization
 
and
 
mix
 
and
 
thelower
 
voluntaryinput
 
recallcosts,
partially
 
on
certain
international
Häagen-Dazs
ice cream products
in fiscal 2023,
partially offset
 
by higher input
 
costs. Segment operating
profit increased 100
percent
on a
 
constant-currencydecrease
 
basis in
 
the secondcontributions
 
quarter offrom
 
fiscal 2024,volume
 
compared togrowth
 
the sameand
 
periodan
increase
 
in fiscal
 
2023SG&A
 
(see theexpenses.
 
“Non-GAAP
Measures” section below for our use of this measure not defined by GAAP).
Segment
 
operating
 
profit
increased
61
percent
to
$85
million
in
the
six-month
period
ended
November
26,
2023,
compared
to
$53 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
in fiscal
2023,
partially offset
by higher
input costs.
Segment operating
profit
increased 6810
 
percent on a
 
constant-currency basis in
 
the six-monthnine-month period
 
ended November 26,February 25,
 
2023,2024, compared
 
to the same period
 
period in
fiscal 2023 (see the “Non-GAAP Measures” section below for our use of this measure
 
not defined by GAAP).
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
28
Pet Segment Results
Pet 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)
$
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
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
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
Six-MonthNine-Month Period Ended
Nov.Feb. 25,
2024
Feb. 25, 2024 vs
Feb. 26, 2023
Feb. 26,
2023
Nov.Feb. 25,
2024
Feb. 25, 2024 vs
Feb. 26, 2023 vs
Nov. 27, 2022
Nov. 27,
2022
Nov.Feb. 26,
2023
Nov. 26, 2023 vs
Nov. 27, 2022
Nov. 27,
2022
Net sales (in millions)
$
582.0551.7
Flat
$
583.0
1,118.0
41
%
$
1,079.4547.8
$
1,669.7
3
%
$
1,627.2
Contributions from volume growth (a)
(1)Flat
pt
32
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 in the second quarter of fiscal 2024
essentially matched the same period in fiscal 2023.
North
 
America
Foodservice
 
net
sales
 
increased
 
41
percent
in
the
third
quarter
of
fiscal
2024,
compared
to
the
same
period
in
fiscal
2023,
driven by slightly favorable net price realization and mix and a slight increase in contributions
from volume growth.
North
America
Foodservice net
sales increased
3 percent
 
in the
 
six-month periodnine-month
 
period ended November
 
26, 2023,February 25,
2024,
 
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
Six-MonthNine-Month Period Ended
Nov. 26, 2023Feb. 25, 2024
Nov. 26, 2023Feb. 25, 2024
Contributions from organic volume growth (a)
(1)
ptFlat
1
pt
Organic net price realization and mix
1
ptFlat
Flat
Organic net sales growth
Flat1
2pt
pts1
pt
Foreign currency exchange
Flat
Flat
Acquisition (b)
Flat
21
ptspt
Net sales growth
Flat1
4pt
3
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
increased 1
percent in
the secondthird
 
quarter of
fiscal 2024, essentially matched
compared to
the same
period in
fiscal 2023.
2023,
driven
by
slightly
favorable
organic
net
price
realization
and
mix
and
a
slight
increase
in
contributions
from
organic
volume growth.
North America Foodservice
 
organic net sales
 
sales increased 2 percent1
 
percent in the six-month
 
nine-month period ended November
 
26, 2023,ended February 25,
2024, compared
 
to the
same period in fiscal 2023, driven by an increase in contributions from organic
 
volume growth.
Segment operating
profit increased 17decreased
1 percent
 
to $96 $82
million in
the second third
quarter of
fiscal 2024,
 
compared to $82
$82 million in
the same
period in fiscal
 
fiscal 2023, primarily driven by
 
primarily drivenhigher input costs and
an increase in SG&A
expenses, partially offset
 
by favorable
net price
realization
 
and
mix.
 
Segment
operating
 
profit increased
 
17 decreased
1
percent
on
 
a
constant-currency
 
basis
 
in
 
the
 
secondthird
 
quarter
 
of
 
fiscal
 
2024,
compared
to
the
 
same
period
in
 
fiscal
2023
(see (see
 
the “Non-GAAP Measures”
 
“Non-GAAP
Measures” section below for
our use of
this measure not
defined by
GAAP).
Segment
 
operating
 
profit
 
increased
 
149
 
percent
 
to
 
$155236
 
million
 
in
 
the
 
six-monthnine-month
 
period
 
ended
 
NovemberFebruary
 
26,25,
 
2023,2024,
 
compared
 
to
$135218 million in
 
the same
 
period in
 
fiscal 2023,
 
primarily driven
 
by favorable
 
net price
 
realization and
 
mix, partially
 
offset by
 
higher
input costs.costs and
an increase in SG&A
expenses.
 
Segment operating profit
 
profit increased
14 9 percent
 
on a constant-currency
 
constant-currency basis
in the nine-
six-monthmonth period
ended November
26,
2023,February 25, 2024,
 
compared
to
the
same
period
in
fiscal
 
2023
(see
(see the
“Non-GAAP
“Non-GAAP Measures”
section
 
below
for
our
use
of
this
measure
not
our use of this measure not defined by GAAP).
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
30
UNALLOCATED
 
CORPORATE
 
ITEMS
Unallocated corporate expenses totaled $157 million
 
totaled $64 million in
the secondthird 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 and
grain inventories, compared
 
to a $25$296 million in the
 
net increasesame period in
fiscal
 
in expense in2023.
In
 
the same period
last year. We
 
recorded $20 million of net losses related to valuationthird
 
adjustments on certain corporate investments in the second quarter
of
 
fiscal
 
2024,
 
comparedcertain
 
to
$36 million
of
net
losses
related
to
valuation
adjustmentscompensation
 
and
 
benefits
expenses
and
charitable
contributions
decreased
compared to the
 
losssame period last year.
 
onIn the third
 
salequarter of fiscal 2024
,
we recorded a $26 million
net increase in expense
related to
the mark-to-market valuation
 
of certain commodity
 
certainpositions and grain inventories
 
corporate,
compared to a $67 million
net increase in expense
investments in the same period
 
second quarter oflast year.
 
fiscal 2023. We
 
recorded $8$3 million
 
of restructuring chargesnet losses related
 
to valuation adjustments
on certain corporate
investments in
the secondthird quarter
 
of fiscal 2024.
2024, compared
In
to $20 million
of net
losses in
 
the secondthird
 
quarter of
 
fiscal 2023,2023.
In the
third quarter
of fiscal
2024,
 
we
recorded
a $3
$31 million
 
chargeof net recoveries
 
related
to a
voluntary
 
recall on
certain
 
international
Häagen-
Dazsagen-Dazs
 
ice cream products. In addition, we recorded $3products
in fiscal 2023, compared to a $1 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 decreasedcharge
 
in the second quarter of fiscal
2024, compared to
the same period last year.
We recorded
$1 million of restructuring charges in cost of
sales in the
third quarter of
fiscal 2023.
In addition, we
recorded $1 million
of integration costs
primarily related
to our acquisition
of
TNT Crust in the third quarter of fiscal 2023.
Unallocated corporate
 
expenses totaled $244$308
 
million in the
 
six-monthnine-month period
 
ended NovemberFebruary
 
26, 2023,25, 2024, compared
 
to $545$842 million
in
the
 
same
 
period
 
last
 
year.
 
We
 
recorded
 
a
 
$206
 
million
 
net
 
decreaseincrease
 
in
 
expense
 
related
 
to
 
the
 
mark-to-market
 
valuation
 
of
 
certain
commodity
 
positions
 
and
 
grain
 
inventories
 
in
 
the
 
six-monthnine-month
 
period
 
ended
 
NovemberFebruary
 
26,25,
 
2023,2024,
 
compared
 
to
 
a
 
$200266
 
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-monthnine-month period ended February
 
ended November 27,25, 2024, certain compensation and
 
2022, we recordedbenefits
expenses and
 
a $24 million chargecharitable contributions
 
related to a voluntarydecreased compared
 
recall on certain
international
Häagen-Dazs
iceto the same
 
cream
products.period last year.
 
We
 
recorded
$17 $25
 
million of net
 
oflosses related
to valuation adjustments on certain
 
restructuringcorporate investments in the nine-month
 
chargesperiod ended February 25, 2024,
 
compared to $82 million
of net
losses related
to valuation
adjustments 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 cost sale
 
of salescertain
corporate investments
 
in the
 
same period
 
last year.
 
In addition,the
nine-
month period ended
February 25, 2024,
 
we recorded
$4 $31 million
 
of integrationnet recoveries related
 
to a voluntary recall
on certain international
Häagen-Dazs
ice
cream
products
in
fiscal
2023,
compared
to
a
$26
million
charge
in
the
same
period
last
year.
We
recorded
$17
million of restructuring
charges and $2
million of restructuring
initiative project-related costs in
cost of sales in
the nine-month period
ended February 25,
2024, compared to
$2 million of restructuring
charges in cost
of sales in the
same period last year.
In addition, we
recorded $5 million of
integration costs primarily related
related to our
acquisition of TNT
 
Crust and $2
million of
 
transaction costs primarily
related
 
related to the
 
sale of
our
 
Helper main
 
main meals
and Suddenly
Suddenly Salad
 
side dishes
business
 
in the
 
six-month periodnine-month
 
period ended November
 
27, 2022. CertainFebruary
 
compensation and
benefits expenses26,
decreased in the six-month period ended November 26, 2023, compared
to the same period last year.2023.
LIQUIDITY
 
AND CAPITAL
 
RESOURCES
During the
 
six-monthnine-month period
 
ended NovemberFebruary
 
26, 2023,25, 2024,
 
cash provided by
 
by operations
was $2,439 million
compared to
 
$1,496 million compared
to $1,2012,027 million
in the
 
same period
 
last year.
 
The $295$412
 
million increase
 
was mainly
 
driven by
 
a $282$414
 
million increase
 
in net
 
earnings, excluding
 
the
$431445 million net divestitures gain in fiscal 2023.
Cash used by
investing activities during the six-month
 
the nine-month period
ended November 26, 2023,February 25,
2024, was $316 $508
million compared to
 
to cash providedused by
by investing activities
of $125$6 million
 
for the
same period
in fiscal
 
2023. During
the first
quarter of
fiscal 2023,
we 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 completed the
 
saleacquired
ofTNT
 
the
Helper main
meals
and Suddenly
Salad side
dishes
businessCrust
 
for
 
$607252
 
million
 
cash.cash,
 
In
the
first
quarternet
 
of
 
fiscal
2023,
we
acquired TNT
Crust for
$252 million
cash, net
of cash
 
acquired.
 
In
addition,
 
we
spent
 
$294 486
million
 
on
purchases
 
of
land,
 
buildings,
and
and equipment in the sixnine months ended November 26, 2023,February 25, 2024, compared
 
to $227$351 million in the same period last year.
Cash
 
used
 
by
 
financing
 
activities
 
during
 
the
 
six-monthnine-month
 
period
 
ended
 
NovemberFebruary
 
26,25,
 
2023,2024,
 
was
 
$1,1741,928
 
million
 
compared
 
to
$1,2301,956 million
of cash
 
used by financing activities
 
financingin the same period
 
activitiesin fiscal 2023. We
paid $1,028 million of
dividends in the nine-
month period
ended February 25,
2024, compared
to $967 million in
the same period
last year.
We
paid $1,602 million
for purchases
of common
stock for
treasury in
the nine-month
period ended
February 25,
2024, compared
to $1,152
million in
 
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
$901
million
in
the
same
period
in
fiscal 2023.
 
In addition,
 
we had
 
$867754 million
 
of net
 
debt issuances
 
in the
 
six-monthnine-month period
 
ended NovemberFebruary
 
26, 2023,25, 2024,
 
compared to
$25361 million of net debt issuances in the same period a year ago.
 
As
of
 
NovemberFebruary
 
26,25,
 
2023, 2024,
we
 
had
 
$473511 million
 
of
cash
 
and
cash
 
equivalents
 
in
foreign
 
jurisdictions. In
 
anticipation
 
of
repatriating
funds from
 
foreign jurisdictions,
 
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 tax liability.
 
Earnings prior to fiscal 2018 from our foreign subsidiaries remain permanently
 
reinvested in those jurisdictions.
31
The following table details the fee-paid committed and uncommitted credit
 
lines we had available as of November 26, 2023:February 25, 2024:
 
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
November 26, 2023,February 25, 2024, we were in compliance with all of these covenants.
 
We
 
have $1,321
$812
million
 
of
long-term
debt
 
maturing
in
the
 
next
12
months
 
that
is
classified
 
as current, including
 
$500 million ofcurrent,
 
3.65
percent fixed-rate
notes due
February 15,
2024, andincluding
 
€750
million
 
of
floating-rate notes
 
notes due November
 
November 8, 2024.
 
2024. We
 
believe that
 
cash
flows from
 
from operations, together
 
together with available
 
available short-
 
and long-term
debt financing,
will be adequate to meet our liquidity and capital needs for
 
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
 
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
adopted in the first quarter of fiscal 2024. Please see Note 1
 
to the Consolidated Financial Statements in Part I, Item 1 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 estimates as
of February 25,
2024, are the
same as those
 
estimates as of November 26, 2023, are the same as those described
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
 
result of lower future profitability
 
projections for our Latin
 
America reporting unit, we
 
we determined that the fair
 
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
 
other
 
exit
 
costs
 
in
 
our
 
Consolidated
 
Statements
 
of
 
Earnings.
 
Our
 
estimates
 
of
 
fair
 
value
 
for
 
goodwill
 
impairment
testing
 
were
 
determined
 
based
 
on
 
a
 
discounted
 
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
 
had
 
risk
 
of
 
decreasing
 
coverage.
 
We
 
will
 
continue
 
to
 
monitor
 
these
 
businesses
 
for
potential impairment.
RECENTLY
 
ISSUED ACCOUNTING PRONOUNCEMENTS
In November 2023,March 2024, the Financial Accounting
 
Standards Board (FASB)Securities and Exchange Commission
 
issued Accounting Standards Updatefinal rules on
 
(ASU) 2023-07 requiring
enhanced segment disclosures.the enhancement and standardization
 
of climate-related
disclosures. The ASU requires
rules require
 
disclosure of, significant
 
segment expenses regularlyamong other
 
provided to thethings: material
 
chief operating
decisionclimate-related risks;
 
maker (CODM)activities to
 
included
within
segment operating
profitmitigate or
 
loss.adapt to
 
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.such
 
 
 
 
 
 
32
risks; governance
 
and management of
 
32
Insuch risks; and
 
Decembermaterial greenhouse gas
 
2023,(GHG) emissions from
operations owned
or controlled
(Scope
1)
and/or
indirect
emissions
from
purchased
energy
consumed
in
operations
(Scope
2).
Additionally,
 
the
 
FASBrules
 
require
disclosure in the notes to the financial statements of the effects of
severe weather events and other natural conditions, subject to
certain
materiality thresholds. The rules will become effective
on a phased-in timeline starting in fiscal years beginning
in calendar year 2025,
which for us is fiscal 2026. We
are in the process of analyzing the impact of the rules on our disclosures.
In December 2023, the
Financial Accounting Standards Board
(FASB) issued
 
ASUAccounting Standards Update (ASU)
 
2023-09 requiring
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,
benefit,
and
 
income
tax
 
expense
or
benefit
 
from
continuing
 
operations. The
 
The
requirements
of
 
the
ASU
are
 
effective
for
 
annual
periods
beginning
beginning
after
December
15,
2024,
 
which
for
us
is
fiscal
2026.
 
Early
adoption is permitted
 
and the amendments
should be applied
 
applied on
a prospective
 
basis. Retrospective application
is permitted. We
are in
the process of analyzing the impact of the ASU on our related disclosures.
In
November
2023,
the
FASB
issued
ASU
2023-07
requiring
enhanced
segment
disclosures.
The
ASU
requires
disclosure
of
significant
segment
expenses
regularly
provided
to
the
chief
operating
decision
maker
(CODM)
included
within
segment
operating
profit
or
loss.
Additionally,
the
ASU
requires
a
description
of
how
the
CODM
utilizes
segment
operating
profit
or
loss
to
assess
segment performance.
The requirements
of the
ASU are effective
for annual
periods beginning
after December
15, 2023,
and interim
periods within
fiscal years
beginning after
December 15,
2024. For
us, annual
reporting requirements
will be
effective for
our fiscal
2025 and
interim reporting
requirements will
be effective
beginning with
our first
quarter of
fiscal 2026.
Early adoption
is permitted
and retrospective
 
application is
 
permitted. required
for all
periods presented.
We
 
are in
 
the process
 
of analyzing
 
the impact
 
of the
 
ASU on
 
our related
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.unit
in
fiscal
2024.
 
Please
see
 
Note
 
4
 
to
 
the
Consolidated
Financial
Consolidated Financial Statements in Part I, Item 1 of this report.
Product recall, net
Costs related to the fiscal 2023 voluntary recall of certain international
Häagen-Dazs
ice cream products, net of recoveries.
Restructuring charges and project-related costs
Restructuring
 
charges
 
and
 
project-related
 
costs
 
related
 
to
 
a
commercial
 
strategy
 
restructuring
 
actionactions
 
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.
33
Transaction costs
Immaterial
 
transaction
 
costs
 
incurred
 
in
 
fiscal
 
2024.
 
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.
Product recall
Costs related to the fiscal 2023 voluntary recall of certain international
Häagen-Dazs
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.
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.
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.
34
Adjusted Operating Profit as a Percent of Net Sales (Adjusted Operating Profit
 
Margin)
We believe
 
this measure provides useful information
 
to investors because it is important
 
for assessing our operating profit margin
 
on a
comparable basis.
Our adjusted operating profit margins are calculated as follows:
Quarter Ended
Nov.Feb. 25, 2024
Feb. 26, 2023
Nov. 27, 2022
In Millions
Value
Percent of
Net Sales
Value
 
Percent of
Net Sales
Operating profit as reported
$
811.8910.7
15.817.9
%
$
799.8730.2
15.314.2
%
Goodwill impairmentProduct recall, net
117.1(31.1)
2.3(0.6)
%
-1.1
-
%
Restructuring charges
14.85.9
0.30.1
%
11.62.1
0.2-
%
Investment activity, net
19.62.7
0.40.1
%
35.720.1
0.70.4
%
Mark-to-market effects
25.125.7
0.5
%
25.166.6
0.51.3
%
Project-related costs
0.30.5
-
%
-
-
%
Transaction costs
0.6
-
%
1.8
-
%
Product recall
0.2
-
%
2.9
0.1
%
Acquisition integration costs
-
-
%
2.80.7
0.1-
%
Divestitures gain, net
-
-
%
(13.7)
(0.3)
%
Adjusted operating profit
$
989.4914.5
19.317.9
%
$
879.7807.0
16.915.7
%
Six-MonthNine-Month Period Ended
Nov.Feb. 25, 2024
Feb. 26, 2023
Nov. 27, 2022
In Millions
Value
 
Percent of
Net Sales
Value
 
Percent of
Net Sales
Operating profit as reported
$
1,741.82,652.5
17.317.5
%
$
1,885.42,615.6
19.017.4
%
Goodwill impairment
117.1
1.20.8
%
-
-
%
Restructuring chargesProduct recall, net
24.6(30.7)
(0.2)
%
25.5
0.2
%
13.9Restructuring charges
30.5
0.2
%
16.0
0.1
%
Investment activity, net
22.525.2
0.2
%
62.082.1
0.60.5
%
Mark-to-market effects
(19.8)5.9
(0.2)-
%
199.8266.4
2.01.8
%
Project-related costs
1.11.6
-
%
-
-
%
Transaction costs
0.6
-
%
2.0
-
%
Product recall
0.4
-
%
24.4
0.2
%
Acquisition integration costs
0.2
-
%
4.35.0
-
%
Divestitures gain, net
-
-
%
(430.9)(444.6)
(4.3)(3.0)
%
Adjusted operating profit
$
1,888.42,802.9
18.818.5
%
$
1,760.92,567.9
17.717.0
%
Note: Tables
 
may not foot due to rounding.
 
For more information on the reconciling items, please refer to the Significant Items Impacting Comparability section above.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3435
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
Six-MonthNine-Month Period Ended
Nov.Feb. 25, 2024
Feb. 26, 2023
Nov. 27, 2022
Change
Nov.Feb. 25, 2024
Feb. 26, 2023
Nov. 27, 2022
Change
Operating profit as reported
$
811.8910.7
$
799.8730.2
225
%
$
1,741.82,652.5
$
1,885.42,615.6
(8)1
%
Goodwill impairment
117.1-
-
117.1
-
Product recall, net
(31.1)
1.1
(30.7)
25.5
Restructuring charges
14.85.9
11.62.1
24.630.5
13.916.0
Investment activity, net
19.62.7
35.720.1
22.525.2
62.082.1
Mark-to-market effects
25.125.7
25.166.6
(19.8)5.9
199.8266.4
Project-related costs
0.30.5
-
1.11.6
-
Transaction costs
0.6-
1.8-
0.6
2.0
Product recall
0.2
2.9
0.4
24.4
Acquisition integration costs
-
2.80.7
0.2
4.35.0
Divestitures gain, net
-
-(13.7)
-
(430.9)(444.6)
Adjusted operating profit
$
989.4914.5
$
879.7807.0
1213
%
$
1,888.42,802.9
$
1,760.92,567.9
79
%
Foreign currency exchange impact
Flat
Flat
Adjusted operating profit growth,
 
 
on a constant-currency basis
1314
%
79
%
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-MonthNine-Month Period Ended
Per Share Data
Nov.Feb. 25, 2024
Feb. 26, 2023
Nov. 27, 2022
Change
Nov.Feb. 25, 2024
Feb. 26, 2023
Nov. 27, 2022
Change
Diluted earnings per share, as reported
$
1.021.17
$
1.010.92
127
%
$
2.163.33
$
2.363.28
(8)2
%
Goodwill impairment
0.14-
-
0.14
-
Product recall, net
(0.04)
-
(0.04)
0.03
Restructuring charges
0.020.01
0.02-
0.030.04
0.02
Investment activity, net
0.03
0.04
0.03
0.08
Mark-to-market effects-
0.03
0.03
(0.03)0.11
0.25Mark-to-market effects
Product recall0.04
-0.09
-0.01
-
0.030.34
Acquisition integration costs
-
0.01-
-
0.01
Divestitures gain, net
-
-(0.08)
-
(0.54)(0.62)
Adjusted diluted earnings per share
$
1.251.17
$
1.100.97
1421
%
$
2.343.51
$
2.213.18
610
%
Foreign currency exchange impact
Flat(1)
pt
(1)
pt
Adjusted diluted earnings per share
 
 
growth, on a constant-currency basis
1422
%
611
%
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.
 
 
 
 
 
 
 
 
 
 
 
35
36
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 Nov. 26,
2023Feb. 25, 2024
(5)42
%
(9)(22)
pts
564
%
Six-MonthNine-Month Period Ended Nov.
26, 2023Feb. 25, 2024
614
%
(8)(11)
pts
1425
%
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 Nov. 26,
2023Feb. 25, 2024
78
%
Flat
8
%
Nine-Month Period Ended Feb. 25, 2024
5
%
(2)
pts
9
%
Six-Month Period Ended Nov.
26, 2023
4
%
(2)
pts
67
%
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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3637
Our segments’ operating profit growth rates on a constant-currency
 
basis are calculated as follows:
 
Quarter Ended Nov. 26, 2023Feb. 25, 2024
Percentage Change in
Operating Profit
as Reported
Impact of Foreign
Currency
Exchange
Percentage Change in Operating
Profit on Constant-Currency
Basis
North America Retail
3(4)
%
Flat
3(4)
%
International
94(57)
%
(6)(4)
pts
100(53)
%
Pet
1825
%
Flat
1825
%
North America Foodservice
17(1)
%
Flat
17(1)
%
Six-MonthNine-Month Period Ended Nov.
26, 2023Feb. 25, 2024
Percentage Change in
Operating Profit
as Reported
Impact of Foreign
Currency
Exchange
Percentage Change in Operating
Profit on Constant-Currency
Basis
North America Retail
3Flat
Flat
Flat
International
8
%
(6)
pts
14
%
Pet
10
%
Flat
3
%
International
61
%
(7)
pts
68
%
Pet
2
%
Flat
210
%
North America Foodservice
149
%
Flat
149
%
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
 
Six-MonthNine-Month Period Ended
Nov.Feb. 25, 2024
Feb. 26, 2023
Nov. 27, 2022Feb. 25, 2024
Nov.Feb. 26, 2023
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
$
714.1807.6
$
136.0149.3
$
730.0653.5
$
147.1108.3
$
1,544.12,351.7
$
309.2458.5
$
1,749.62,403.1
$
363.2471.5
Goodwill impairment
117.1-
34.7-
-
-
117.1
34.7
-
-
Product recall, net
(31.1)
(7.2)
1.1
0.3
(30.7)
(7.1)
25.5
5.9
Restructuring charges
14.85.9
(1.2)
2.1
0.7
30.5
8.0
16.0
4.5
11.6
3.2
24.6
9.2
13.9
3.8
Investment activity, net
19.62.7
4.22.2
35.720.1
13.04.5
22.525.2
5.27.4
62.082.1
13.518.0
Mark-to-market effects
25.125.7
5.76.0
25.166.6
5.815.3
(19.8)5.9
(4.6)1.4
199.8266.4
46.061.3
Project-related costs
0.30.5
0.1
-
-
1.11.6
0.40.5
-
-
Transaction costs
0.6-
-
1.8-
0.6-
0.6
-
2.0
0.6
Product recall
0.2
-
2.9
0.7
0.4
0.1
24.4
5.6
Acquisition integration costs
-
-
2.80.7
0.70.1
0.2
0.1
4.35.0
1.01.1
Divestitures gain, net
-
-
-(13.7)
28.7
-
-
-(444.6)
(430.9)
(101.9)(73.2)
As adjusted
$
891.7811.3
$
185.2149.4
$
809.9730.3
$
171.0157.8
$
1,690.82,502.1
$
354.2503.6
$
1,625.12,355.4
$
331.8489.6
Effective tax rate:
As reported
19.0%18.5%
20.2%16.6%
20.0%19.5%
20.8%19.6%
As adjusted
20.8%18.4%
21.1%21.6%
21.0%20.1%
20.4%20.8%
Sum of adjustment to income taxes
$
49.40.1
$
23.949.5
$
45.1
$
(31.4)18.1
Average number
 
of common shares
- diluted EPS
583.4572.8
602.0599.0
587.4582.5
604.0602.4
Impact of income tax adjustments
on adjusted diluted EPS
$
(0.08)
$
(0.04)-
$
(0.08)
$
0.05(0.08)
$
(0.03)
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.
3738
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
 
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.
 
 
3839
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.
 
 
 
 
 
 
 
 
 
 
3940
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 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
 
breach of our information technology systems; foreign
 
economic conditions,
including currency rate fluctuations; and political unrest in foreign markets
 
and economic uncertainty due to terrorism or war.
You
 
should also
 
consider the risk
 
factors that we
 
identify in Item
 
1A of 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 November 26,February 25, 2024,
 
2023, was as follows:
 
In Millions
One-day Risk
of Loss
Change During
Six-MonthNine-Month
Period Ended
Nov. 26, 2023Feb. 25, 2024
Analysis of Change
Interest rate instruments
$
5755
$
(9)(11)
Lower interest rate volatility
Foreign currency instruments
2826
(8)(11)
Net price stability in portfolio
Commodity instruments
65
(1)(3)
ImmaterialDecrease in commodity prices
Equity instruments
2
(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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4041
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 February
 
as
of
November
26,
2023,
25, 2024, our
disclosure
 
controls
and
procedures
were
 
effective
to
ensure
 
that information
information required to
 
be disclosed
by us
 
in reports
that we file
 
file or submit under
 
under the
Securities Exchange Act
 
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
 
communicatedreported
 
towithin
 
ourthe
 
management,time
 
includingperiods
 
ourspecified
 
Chiefin
 
Executive
OfficerSecurities
 
and
 
ChiefExchange
 
Commission
rules
and
forms,
and
(2)
accumulated and
communicated to
our management,
including our
Chief Executive
Officer and
Chief Financial
 
Officer,
 
in a
 
amanner
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
November
26,
2023,
February 25, 2024, 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
November 26, 2023:February 25, 2024:
Period
Total
 
Number
 
of Shares
Purchased (a)
Average
Price Paid
Per Share
Total
 
Number of Shares
Purchased as Part of a Publicly
Announced Program (b)
Maximum Number of Shares
that may yet be Purchased
Under the Program (b)
August 28,November 27, 2023 -
September 24,December 31, 2023
1,885,4272,167,357
$
64.3965.65
1,885,4272,167,357
76,589,93263,863,833
September 25, 2023January 1, 2024 -
OctoberJanuary 28, 2024
1,794,160
64.76
1,794,160
62,069,673
January 29, 2023
3,286,392
62.75
3,286,392
73,303,540
October 30, 20232024 -
 
November 26, 2023February 25, 2024
7,272,350685,856
64.9565.03
7,272,350685,856
66,031,19061,383,817
Total
12,444,1694,647,373
$
64.2965.21
12,444,1694,647,373
66,031,19061,383,817
(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.
 
During
 
the
 
fiscal
 
quarter
 
ended
 
NovemberFebruary
 
26,25,
 
2023,2024,
 
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.
 
4142
PART
 
II. OTHER INFORMATION
Item 6.
Exhibits.
 
3.1
31.1
 
31.2
 
32.1
 
32.2
 
101
Financial Statements
from the
 
Quarterly Report
on Form
 
10-Q of
the Company
 
for the
quarter ended November
 
26,February 25,
2023,2024,
 
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.
 
 
 
4243
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: DecemberMarch 20, 20232024
/s/ Mark A. Pallot
Mark A. Pallot
Vice President, Chief Accounting
 
Officer
(Principal Accounting Officer and Duly Authorized
 
Officer)