10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-Q

(Mark One)

☑

QUARTERLY

REPORT

PURSUANT

SECTION

15(d)

THE

SECURITIES

EXCHANGE

ACT

1934

FOR THE QUARTERLY

PERIOD ENDED

AUGUST 28, 2022

☐

TRANSITION

REPORT

PURSUANT

SECTION

15(d)

THE

SECURITIES

EXCHANGE

ACT

1934

FOR THE TRANSITION PERIOD FROM

Commission file number:

001-01185

________________

GENERAL MILLS, INC.

(Exact name of registrant as specified in its charter)

Delaware

41-0274440

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

Number One General Mills Boulevard

Minneapolis

Minnesota

55426

(Address of principal executive offices)

(Zip Code)

(763)

764-7600

(Registrant’s telephone number,

including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange

on which registered

Common Stock, $.10 par value

GIS

New York Stock Exchange

1.000% Notes due 2023

GIS23A

New York Stock Exchange

0.125% Notes due 2025

GIS25A

New York Stock Exchange

0.450% Notes due 2026

GIS26

New York Stock Exchange

1.500% Notes due 2027

GIS27

New York Stock Exchange

________________

Indicate

check

mark

whether

the

registrant

(1)

has

filed

all

reports

required

filed

Section

15(d)

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

☑

☐

Indicate

check

mark

whether

the

registrant

has

submitted

electronically

every

Interactive

Data

File

required

submitted

pursuant to Rule

405 of Regulation

S-T during

the preceding 12

months (or for

such shorter period

that the registrant

was required

submit such files).

Yes

☑

☐

Indicate by check mark

whether the registrant is a

large accelerated filer,

an accelerated filer,

a non-accelerated filer,

smaller reporting

company,

emerging

growth

company.

See

the

definitions

“large

accelerated

filer,”

“accelerated

filer,”

“smaller

reporting

company,” and “emerging

growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

emerging

growth

company,

indicate

check

mark

the

registrant

has

elected

not

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

☐

☑

Number of

shares of

Common Stock

outstanding

as of

September 14,

2022:

593,535,650

(excluding

161,077,678

shares held

in the

treasury).

General Mills, Inc.

Table of Contents

Page

PART I – Financial Information

Item 1. Financial Statements

Consolidated Statements of Earnings for the quarters ended August 28, 2022 and August 29, 2021

Consolidated Statements of Comprehensive Income for the quarters ended August 28, 2022 and August 29,

2021

Consolidated Balance Sheets as of August 28, 2022 and May 29, 2022

Consolidated Statements of Total Equity and Redeemable Interest for the quarters ended August 28, 2022 and

August 29, 2021

Consolidated Statements of Cash Flows for the quarters ended August 28, 2022 and August 29, 2021

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Item 4. Controls and Procedures

PART II – Other Information

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Item 6. Exhibits

Signatures

PART

FINANCIAL INFORMATION

Item 1.

Financial Statements

Consolidated Statements of Earnings

GENERAL MILLS, INC. AND SUBSIDIARIES

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

Quarter Ended

Aug. 28, 2022

Aug. 29, 2021

Net sales

4,717.6

4,539.9

Cost of sales

3,269.9

2,942.5

Selling, general, and administrative expenses

791.4

757.4

Divestitures gain, net

(430.9)

Restructuring, impairment, and other exit costs (recoveries)

1.6

(4.3)

Operating profit

1,085.6

844.3

Benefit plan non-service income

(21.7)

(29.6)

Interest, net

87.7

95.9

Earnings before income taxes and after-tax earnings

from

joint ventures

1,019.6

778.0

Income taxes

216.1

168.9

After-tax earnings from joint ventures

19.8

29.1

Net earnings, including earnings attributable to redeemable

and noncontrolling interests

823.3

638.2

Net earnings attributable to redeemable and

noncontrolling interests

3.3

11.2

Net earnings attributable to General Mills

820.0

627.0

Earnings per share – basic

1.37

1.03

Earnings per share – diluted

1.35

1.02

See accompanying notes to consolidated financial statements.

Consolidated Statements of Comprehensive Income

GENERAL MILLS, INC. AND SUBSIDIARIES

(Unaudited) (In Millions)

Quarter Ended

Aug. 28, 2022

Aug. 29, 2021

Net earnings, including earnings attributable to

redeemable and noncontrolling interests

823.3

638.2

Other comprehensive income (loss), net of tax:

Foreign currency translation

3.8

(23.9)

Other fair value changes:

Hedge derivatives

(38.3)

1.7

Reclassification to earnings:

Foreign currency translation

(7.4)

Hedge derivatives

(1.4)

10.6

Amortization of losses and prior service costs

14.1

8.4

Other comprehensive loss, net of tax

(29.2)

(3.2)

Total comprehensive

income

794.1

635.0

Comprehensive income (loss) attributable to

redeemable and noncontrolling interests

2.0

(23.5)

Comprehensive income attributable to General Mills

792.1

658.5

See accompanying notes to consolidated financial statements.

Consolidated Balance Sheets

GENERAL MILLS, INC. AND SUBSIDIARIES

(In Millions, Except Par Value)

Aug. 28, 2022

May 29, 2022

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

594.4

569.4

Receivables

1,730.4

1,692.1

Inventories

2,089.9

1,867.3

Prepaid expenses and other current assets

719.3

802.1

Assets held for sale

158.9

Total current

assets

5,134.0

5,089.8

Land, buildings, and equipment

3,358.6

3,393.8

Goodwill

14,454.6

14,378.5

Other intangible assets

6,979.4

6,999.9

Other assets

1,180.6

1,228.1

Total assets

31,107.2

31,090.1

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable

3,786.3

3,982.3

Current portion of long-term debt

2,095.4

1,674.2

Notes payable

991.9

811.4

Other current liabilities

1,721.9

1,552.0

Total current

liabilities

8,595.5

8,019.9

Long-term debt

8,474.6

9,134.8

Deferred income taxes

2,262.4

2,218.3

Other liabilities

949.1

929.1

Total liabilities

20,281.6

20,302.1

Stockholders' equity:

Common stock,

754.6

shares issued, $

0.10

par value

75.5

Additional paid-in capital

1,146.1

1,182.9

Retained earnings

19,027.6

18,532.6

Common stock in treasury,

at cost, shares of

160.3

and

155.7

(7,676.0)

(7,278.1)

Accumulated other comprehensive loss

(1,998.4)

(1,970.5)

Total stockholders' equity

10,574.8

10,542.4

Noncontrolling interests

250.8

245.6

Total equity

10,825.6

10,788.0

Total liabilities and equity

31,107.2

31,090.1

See accompanying notes to consolidated financial statements.

Consolidated Statements of Total

Equity and Redeemable Interest

GENERAL MILLS, INC. AND SUBSIDIARIES

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

Quarter Ended

Aug. 28, 2022

Aug. 29, 2021

Amount

Total equity,

beginning balance

10,788.0

9,773.2

Common stock,

billion shares authorized, $

0.10

par value

754.6

75.5

754.6

75.5

Additional paid-in capital:

Beginning balance

1,182.9

1,365.5

Stock compensation plans

9.3

9.1

Unearned compensation related to stock unit awards

(79.0)

(68.3)

Earned compensation

32.9

33.1

Decrease in redemption value of

redeemable interest

5.6

Ending balance

1,146.1

1,345.0

Retained earnings:

Beginning balance

18,532.6

17,069.8

Net earnings attributable to General Mills

820.0

627.0

Cash dividends declared ($

0.54

and $

0.51

per share)

(325.0)

(312.3)

Ending balance

19,027.6

17,384.5

Common stock in treasury:

Beginning balance

(155.7)

(7,278.1)

(146.9)

(6,611.2)

Shares purchased

(6.9)

(500.8)

(2.5)

(150.1)

Stock compensation plans

2.3

102.9

1.1

46.3

Ending balance

(160.3)

(7,676.0)

(148.3)

(6,715.0)

Accumulated other comprehensive loss:

Beginning balance

(1,970.5)

(2,429.2)

Comprehensive (loss) income

(27.9)

31.5

Ending balance

(1,998.4)

(2,397.7)

Noncontrolling interests:

Beginning balance

245.6

302.8

Comprehensive income (loss)

2.0

(8.2)

Distributions to noncontrolling interest holders

(1.9)

(1.1)

Divestiture

5.1

Ending balance

250.8

293.5

Total equity,

ending balance

10,825.6

9,985.8

Redeemable interest:

Beginning balance

604.9

Comprehensive loss

(15.3)

Decrease in redemption value of

redeemable interest

(5.6)

Ending balance

584.0

See accompanying notes to consolidated financial statements.

Consolidated Statements of Cash Flows

GENERAL MILLS, INC. AND SUBSIDIARIES

(Unaudited) (In Millions)

Quarter Ended

Aug. 28, 2022

Aug. 29, 2021

Cash Flows - Operating Activities

Net earnings, including earnings attributable to redeemable and noncontrolling

interests

823.3

638.2

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

Depreciation and amortization

134.3

145.8

After-tax earnings from joint ventures

(19.8)

(29.1)

Distributions of earnings from joint ventures

15.5

22.6

Stock-based compensation

33.5

26.8

Deferred income taxes

9.2

19.6

Pension and other postretirement benefit plan contributions

(5.3)

(5.4)

Pension and other postretirement benefit plan costs

(6.7)

(7.2)

Divestitures gain, net

(430.9)

Restructuring, impairment, and other exit costs

(15.7)

(19.5)

Changes in current assets and liabilities, excluding the effects of

acquisitions and divestitures

(209.7)

(389.5)

Other, net

61.1

(32.5)

Net cash provided by operating activities

388.8

369.8

Cash Flows - Investing Activities

Purchases of land, buildings, and equipment

(90.9)

(104.0)

Acquisition, net of cash acquired

(252.1)

(1,198.6)

Proceeds from divestitures, net of cash divested

610.7

Investments in affiliates, net

5.7

Proceeds from disposal of land, buildings, and equipment

0.3

Other, net

(1.9)

(1.3)

Net cash provided (used) by investing activities

265.8

(1,297.9)

Cash Flows - Financing Activities

Change in notes payable

188.0

698.7

Issuance of long-term debt

582.2

Payment of long-term debt

(612.1)

Proceeds from common stock issued on exercised options

65.5

7.9

Purchases of common stock for treasury

(500.8)

(150.1)

Dividends paid

(325.0)

(312.3)

Distributions to noncontrolling and redeemable interest holders

(1.9)

(1.1)

Other, net

(34.9)

(18.2)

Net cash (used) provided by financing activities

(609.1)

195.0

Effect of exchange rate changes on cash and cash equivalents

(20.5)

(18.1)

Increase (decrease) in cash and cash equivalents

25.0

(751.2)

Cash and cash equivalents - beginning of year

569.4

1,505.2

Cash and cash equivalents - end of period

594.4

754.0

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

acquisitions and divestitures:

Receivables

(91.1)

(145.3)

Inventories

(243.3)

(116.1)

Prepaid expenses and other current assets

79.5

39.0

Accounts payable

(130.4)

(214.9)

Other current liabilities

175.6

47.8

Changes in current assets and liabilities

(209.7)

(389.5)

See accompanying notes to consolidated financial statements.

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.

the

opinion

management,

all

adjustments

considered

necessary

for

fair

presentation have

been included

and are

of a

normal recurring

nature, including

the elimination

of all

intercompany transactions

and

any

noncontrolling

and

redeemable

interests’

those

transactions.

Operating

results

for

the

fiscal

quarter

ended

August

28,

2022,

are not necessarily indicative of the results that may be expected for the fiscal year

ending May 28, 2023.

These

statements

should

read

conjunction

with

the

Consolidated

Financial

Statements

and

footnotes

included

our

Annual

Report on Form

10-K for the fiscal

year ended May

29, 2022. The

accounting policies used

in preparing these

Consolidated Financial

Statements are the same as those described in Note 2 to the Consolidated Financial

Statements in that Form 10-K.

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

(2) Acquisition and Divestitures

During

the first

quarter

of fiscal

2023,

acquired

TNT Crust,

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

154.3

million. The

goodwill is

included in

the North

America Foodservice

segment and

is not

deductible for

tax purposes.

The pro

forma

effects

this

acquisition

were

not

material.

have

conducted

preliminary

assessment

the

fair

value

the

acquired

assets

and

liabilities

the

TNT

Crust

business

and

will

continue

review

these

items

during

the

measurement

period.

new

information is obtained

about facts and circumstances

that existed at the

acquisition date, the

acquisition accounting will

be revised to

reflect the resulting adjustments to

current estimates of these items.

The consolidated results of the

TNT Crust business are reported

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

During the

first quarter

of fiscal

2023,

we completed

the sale

of our

Helper main

meals and

Suddenly

Salad side

dishes business

Eagle Family Foods Group for $

606.8

million and recorded a pre-tax gain of $

442.2

million.

SEC Form 10-Q filed by General Mills Inc.