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 25, 2024

☐

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

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

3.650% Notes due 2030

GIS 30A

New York Stock Exchange

3.850% Notes due 2034

GIS 34

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 (§

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

☑

☐

Indicate

check

mark

whether

the

registrant

large

accelerated

filer,

accelerated

filer,

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 11,

2024:

555,158,898

(excluding

199,454,430

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 25, 2024 and August 27, 2023

Consolidated Statements of Comprehensive Income for the quarters ended August 25, 2024 and August 27,

2023

Consolidated Balance Sheets as of August 25, 2024 and May 26, 2024

Consolidated Statements of Total Equity for the quarters ended August 25, 2024 and August 27, 2023

Consolidated Statements of Cash Flows for the quarters ended August 25, 2024 and August 27, 2023

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 5. Other Information

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. 25, 2024

Aug. 27, 2023

Net sales

4,848.1

4,904.7

Cost of sales

3,159.3

3,134.2

Selling, general, and administrative expenses

855.1

839.3

Restructuring, impairment, and other exit costs

2.2

1.2

Operating profit

831.5

930.0

Benefit plan non-service income

(13.9)

(17.0)

Interest, net

123.6

117.0

Earnings before income taxes and after-tax earnings

from joint ventures

721.8

830.0

Income taxes

157.4

173.2

After-tax earnings from joint ventures

19.2

23.5

Net earnings, including earnings attributable to noncontrolling interests

583.6

680.3

Net earnings attributable to noncontrolling interests

3.7

6.8

Net earnings attributable to General Mills

579.9

673.5

Earnings per share – basic

1.03

1.15

Earnings per share – diluted

1.03

1.14

See accompanying notes to consolidated financial statements.

Consolidated Statements of Comprehensive Income

GENERAL MILLS, INC. AND SUBSIDIARIES

(Unaudited) (In Millions)

Quarter Ended

Aug. 25, 2024

Aug. 27, 2023

Net earnings, including earnings attributable to

noncontrolling interests

583.6

680.3

Other comprehensive (loss) income, net of tax:

Foreign currency translation

(61.9)

(18.1)

Other fair value changes:

Hedge derivatives

(6.0)

(2.3)

Reclassification to earnings:

Hedge derivatives

0.2

Amortization of losses and prior service costs

11.6

9.1

Other comprehensive loss, net of tax

(56.3)

(11.1)

Total comprehensive

income

527.3

669.2

Comprehensive income attributable to noncontrolling

interests

4.2

6.9

Comprehensive income attributable to General Mills

523.1

662.3

See accompanying notes to consolidated financial statements.

Consolidated Balance Sheets

GENERAL MILLS, INC. AND SUBSIDIARIES

(In Millions, Except Par Value)

Aug. 25, 2024

May 26, 2024

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

468.1

418.0

Receivables

1,843.8

1,696.2

Inventories

1,996.4

1,898.2

Prepaid expenses and other current assets

505.3

568.5

Total current

assets

4,813.6

4,580.9

Land, buildings, and equipment

3,776.3

3,863.9

Goodwill

14,787.7

14,750.7

Other intangible assets

6,982.8

6,979.9

Other assets

1,408.8

1,294.5

Total assets

31,769.2

31,469.9

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable

3,823.4

3,987.8

Current portion of long-term debt

1,640.0

1,614.1

Notes payable

249.1

11.8

Other current liabilities

1,576.9

1,419.4

Total current

liabilities

7,289.4

7,033.1

Long-term debt

11,431.3

11,304.2

Deferred income taxes

2,195.3

2,200.6

Other liabilities

1,326.6

1,283.5

Total liabilities

22,242.6

21,821.4

Stockholders’ equity:

Common stock,

754.6

shares issued, $

0.10

par value

75.5

Additional paid-in capital

1,164.6

1,227.0

Retained earnings

21,213.9

20,971.8

Common stock in treasury,

at cost, shares of

198.8

and

195.5

(10,601.9)

(10,357.9)

Accumulated other comprehensive loss

(2,576.5)

(2,519.7)

Total stockholders’

equity

9,275.6

9,396.7

Noncontrolling interests

251.0

251.8

Total equity

9,526.6

9,648.5

Total liabilities and equity

31,769.2

31,469.9

See accompanying notes to consolidated financial statements.

Consolidated Statements of Total

Equity

GENERAL MILLS, INC. AND SUBSIDIARIES

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

Quarter Ended

Aug. 25, 2024

Aug. 27, 2023

Amount

Total equity,

beginning balance

9,648.5

10,700.0

Common stock,

billion shares authorized, $

0.10

par value

754.6

75.5

754.6

75.5

Additional paid-in capital:

Beginning balance

1,227.0

1,222.4

Stock compensation plans

(5.2)

7.3

Unearned compensation related to stock unit awards

(77.1)

(79.4)

Earned compensation

19.9

35.4

Ending balance

1,164.6

1,185.7

Retained earnings:

Beginning balance

20,971.8

19,838.6

Net earnings attributable to General Mills

579.9

673.5

Cash dividends declared ($

0.60

and $

0.59

per share)

(337.8)

(348.5)

Ending balance

21,213.9

20,163.6

Common stock in treasury:

Beginning balance

(195.5)

(10,357.9)

(168.0)

(8,410.0)

Shares purchased, including excise tax of $

2.2

and

4.2

million

(4.5)

(302.2)

(6.4)

(504.7)

Stock compensation plans

1.2

58.2

1.0

40.4

Ending balance

(198.8)

(10,601.9)

(173.4)

(8,874.3)

Accumulated other comprehensive loss:

Beginning balance

(2,519.7)

(2,276.9)

Comprehensive loss

(56.8)

(11.2)

Ending balance

(2,576.5)

(2,288.1)

Noncontrolling interests:

Beginning balance

251.8

250.4

Comprehensive income

4.2

6.9

Distributions to noncontrolling interest holders

(5.0)

(4.3)

Ending balance

251.0

253.0

Total equity,

ending balance

9,526.6

10,515.4

See accompanying notes to consolidated financial statements.

Consolidated Statements of Cash Flows

GENERAL MILLS, INC. AND SUBSIDIARIES

(Unaudited) (In Millions)

Quarter Ended

Aug. 25, 2024

Aug. 27, 2023

Cash Flows - Operating Activities

Net earnings, including earnings attributable to noncontrolling interests

583.6

680.3

Adjustments to reconcile net earnings to net cash provided by operating

activities:

Depreciation and amortization

139.6

137.2

After-tax earnings from joint ventures

(19.2)

(23.5)

Distributions of earnings from joint ventures

23.1

15.8

Stock-based compensation

20.3

35.3

Deferred income taxes

16.2

(14.5)

Pension and other postretirement benefit plan contributions

(7.5)

(7.4)

Pension and other postretirement benefit plan costs

(3.2)

(5.3)

Restructuring, impairment, and other exit costs

0.2

2.4

Changes in current assets and liabilities, excluding the effects of

acquisitions and divestitures

(107.6)

(457.4)

Other, net

(21.3)

15.2

Net cash provided by operating activities

624.2

378.1

Cash Flows - Investing Activities

Purchases of land, buildings, and equipment

(140.3)

(141.7)

Acquisition, net of cash acquired

(7.7)

Proceeds from disposal of land, buildings, and equipment

0.6

Other, net

(0.6)

6.2

Net cash used by investing activities

(148.0)

(135.5)

Cash Flows - Financing Activities

Change in notes payable

238.0

551.8

Proceeds from common stock issued on exercised options

9.4

4.5

Purchases of common stock for treasury

(300.0)

(500.5)

Dividends paid

(337.8)

(348.5)

Distributions to noncontrolling interest holders

(5.0)

(4.3)

Other, net

(34.0)

(37.2)

Net cash used by financing activities

(429.4)

(334.2)

Effect of exchange rate changes on cash and cash equivalents

3.3

(3.0)

Increase (decrease) in cash and cash equivalents

50.1

(94.6)

Cash and cash equivalents - beginning of year

418.0

585.5

Cash and cash equivalents - end of period

468.1

490.9

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

acquisitions and divestitures:

Receivables

(145.6)

(104.4)

Inventories

(95.7)

(54.3)

Prepaid expenses and other current assets

59.7

140.9

Accounts payable

(76.4)

(443.8)

Other current liabilities

150.4

4.2

Changes in current assets and liabilities

(107.6)

(457.4)

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

interests’

those

transactions.

Operating

results

for

the

fiscal

quarter

ended

August

25,

2024,

are

not

necessarily indicative of the results that may be expected for the fiscal year ending

May 25, 2025.

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

26, 2024. 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 Divestiture

During the fourth quarter

of fiscal 2024, we acquired

a pet food business in Europe,

for a purchase price of $

434.1

million, net of cash

acquired.

During

the

first

quarter

fiscal

2025,

paid

7.7

million

purchase

price

holdback

after

certain

closing

conditions

were

met.

financed

the

transaction

with

cash

hand.

consolidated

the

business

into

our

Consolidated

Balance

Sheets

and

recorded

goodwill

317.7

million,

indefinite-lived

brand

intangible

asset

118.4

million

and

finite-lived

customer

relationship

asset

14.2

million.

The

goodwill

included

the

International

segment

and

not

deductible

for

tax

purposes. The pro forma effects

of this acquisition were not

material. We

have conducted a preliminary assessment

of the fair value of

the acquired

assets and

liabilities of

the business

and we

are continuing

our review

of these

items during

the measurement

period. If

new

information

obtained

about

facts

and

circumstances

that

existed

the

acquisition

date,

the

acquisition

accounting

will

revised

reflect

the

resulting

adjustments

current

estimates

those

items.

The

consolidated

results

are

reported

our

International operating segment on a one-month lag beginning in fiscal 2025.

September

12,

2024,

subsequent

the

end

the

first

quarter

fiscal

2025,

entered

into

definitive

agreements

sell

our

North

American

Yogurt

businesses

affiliates

Groupe

Lactalis

S.A.

(Lactalis)

and

Sodiaal

International

(Sodiaal)

for

approximately

2.1

billion.

expect

these

divestitures

calendar

year

2025,

subject

regulatory

approvals

and

other

customary closing conditions.

(3) Restructuring, Impairment, and Other Exit Costs

the

first

quarter

fiscal

2025,

did

not

undertake

any

new

restructuring

actions.

recorded

2.9

million

restructuring

charges

the

first

quarter

fiscal

2025

and

9.8

million

restructuring

charges

the

first

quarter

fiscal

2024

restructuring actions previously announced.

We expect these actions to

be completed by the end of fiscal 2026.

paid net $

2.7

million of cash in

the first quarter

of fiscal 2025

related to restructuring

actions. We

paid net $

7.4

million of cash

the same period of fiscal 2024.

Restructuring and impairment charges and project-related

costs are recorded in our Consolidated Statements of Earnings as follows:

Quarter Ended

In Millions

Aug. 25, 2024

Aug. 27, 2023

Restructuring, impairment, and other exit costs

2.2

1.2

Cost of sales

0.7

8.6

Total restructuring

charges

2.9

9.8

Project-related costs classified in cost of sales

0.1

0.8

(4) Goodwill and Other Intangible Assets

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

In Millions

Aug. 25, 2024

May 26, 2024

Goodwill

14,787.7

14,750.7

Other intangible assets:

Intangible assets not subject to amortization:

Brands and other indefinite-lived intangibles

6,735.9

6,728.6

Intangible assets subject to amortization:

Customer relationships and other finite-lived intangibles

402.9

402.2

Less accumulated amortization

(156.0)

(150.9)

Intangible assets subject to amortization, net

246.9

251.3

Other intangible assets

6,982.8

6,979.9

Total

21,770.5

21,730.6

Based on

the carrying

value of

finite-lived intangible

assets as

of August

25, 2024,

annual amortization

expense for

each of

the next

five fiscal years is estimated to be approximately $

million.

The changes in the carrying amount of goodwill during the first quarter of fiscal 2025

were as follows:

In Millions

North

America

Retail

North

America

Pet

North

America

Foodservice

International

(a)

Corporate

and Joint

Ventures

Total

Balance as of May 26, 2024

6,541.9

6,062.8

805.5

917.1

423.4

14,750.7

Other activity, primarily

foreign currency translation

1.4

23.0

12.6

37.0

Balance as of Aug. 25, 2024

6,543.3

6,062.8

805.5

940.1

436.0

14,787.7

(a)

The carrying amounts of goodwill within the International segment as of

May 26, 2024, and August 25, 2024, were net of

accumulated impairment losses of $

117.1

million.

The changes in the carrying amount of other intangible assets during the first quarter

of fiscal 2025 were as follows:

In Millions

Total

Balance as of May 26, 2024

6,979.9

Foreign currency translation, net of amortization

2.9

Balance as of Aug. 25, 2024

6,982.8

Our

annual

goodwill

and

indefinite-lived

intangible

assets

impairment

test

was

performed

the

first

day

the

second

quarter

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 addition,

during the

fourth quarter

of fiscal

2024, we

executed our

fiscal 2025

planning process

and preliminary

long-range planning

process,

which resulted in

lower future sales and

profitability projections for

the businesses supporting

our

Top

Chews

True Chews

, and

EPIC

brand intangible assets.

As a result of

this triggering event,

we performed an

interim impairment assessment

of these assets

as of May

26, 2024,

and determined

that the

fair value

of these

brand intangible

assets no

longer exceeded

the carrying

values of

the respective

assets, resulting in $

103.1

million of non-cash impairment charges.

We recorded

impairment charges in restructuring,

impairment, and

other exit

costs in

our Consolidated

Statements of

Earnings. Our

estimates of

the fair

values were

determined based

on a

discounted

cash flow model

using inputs which

included our long-range

cash flow projections

for the businesses,

royalty rates, weighted

-average

cost of capital rates, and tax rates. These fair values are Level 3 assets in the fair value hierarchy.

All other intangible

asset fair values

were substantially

in excess of

the carrying

values, except for

the

Uncle Toby’s

brand intangible

asset. In

addition,

while having

significant

coverage as

of our

fiscal 2024

assessment date,

the

Progresso

Nudges

, and

True

Chews

brand intangible assets had risk of decreasing coverage. We

will continue to monitor these businesses for potential impairment.

(5) Inventories

The components of inventories were as follows:

In Millions

Aug. 25, 2024

May 26, 2024

Finished goods

1,975.1

1,827.7

Raw materials and packaging

488.4

500.5

Grain

79.3

111.1

Excess of FIFO over LIFO cost

(546.4)

(541.1)

Total

1,996.4

1,898.2

(6) Risk Management Activities

Many commodities we

use in the

production and distribution

of our products

are exposed to

market price risks.

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

the

future

price

commodities

purchased

for

use

our

supply

chain.

manage

our

exposures

through

combination of purchase orders, long-term

contracts with suppliers, exchange-traded

futures and options, and over-the-counter

options

and swaps.

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.

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

the

values

these

derivatives

are

recorded

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

Although we do

not meet the

criteria for

cash flow hedge

accounting, we believe

that these instruments

are effective

in achieving our

objective of providing certainty

in the future price of commodities purchased

for use in our supply chain.

Accordingly, for

purposes of

measuring

segment

operating

performance,

these

gains

and

losses

are

reported

unallocated

corporate

items

outside

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

segment

operating

profit,

allowing

our

operating

segments

realize

the

economic

effects

the

derivative without experiencing any resulting mark-to-market volatility,

which remains in unallocated corporate items.

Unallocated corporate items for the quarters ended August 25, 2024, and

August 27, 2023, included:

Quarter Ended

In Millions

Aug. 25, 2024

Aug. 27, 2023

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

commodity positions

(37.7)

28.4

Net loss on commodity positions reclassified from

unallocated corporate items to segment operating profit

17.2

3.2

Net mark-to-market revaluation of certain grain inventories

(8.3)

13.3

Net mark-to-market valuation of certain commodity

positions recognized in unallocated corporate items

(28.8)

44.9

August

25,

2024,

the

net

notional

value

commodity

derivatives

was

233.4

million,

which

118.6

million

agricultural inputs and $

114.8

million related to energy inputs. These contracts relate to inputs

that generally will be utilized within the

months.

also have

net investments

in foreign

subsidiaries that

are denominated

in euros.

As of

August 25,

2024, we

hedged a

portion

these investments with €

3,979.4

million of euro-denominated bonds.

The

fair

values

the

derivative

positions

used

our

risk

management

activities

and

other

assets

recorded

fair

value

were

not

material as of

August 25, 2024,

and were Level

1 or Level

2 assets and

liabilities in the

fair value

hierarchy.

did not significantly

change our valuation techniques from prior periods.

offer

certain

suppliers

access

third-party

services

that

allow

them

view

SEC Form 10-Q filed by General Mills Inc.