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 29, 2020 ☐ 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 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) R QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED AUGUST 30, 2020 £ 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 o ...

PART I General Mills' business operations, associated risks, property details, and legal standing [Item 1 Business](index=4&type=section&id=Item%201%20Business) General Mills is a global leader in branded consumer foods, foodservice, and pet food, operating across five segments with diverse product categories - General Mills is a leading global manufacturer and marketer of branded consumer foods, a leading supplier to North American foodservice, and a leading manufacturer and marketer in the wholesome natural pet food category, manufacturing products in 13 countries and marketing them in over 100[9](index=9&type=chunk) - The company manages its business under five operating segments: North America Retail; Convenience Stores & Foodservice; Europe & Australia; Asia & Latin America; and Pet[11](index=11&type=chunk) - Key product categories include snacks, ready-to-eat cereal, convenient meals, yogurt, wholesome natural pet food, super-premium ice cream, baking mixes and ingredients, and refrigerated and frozen dough[12](index=12&type=chunk) - Walmart Inc. and its affiliates accounted for **21% of consolidated net sales** and **30% of North America Retail segment net sales** in fiscal 2020[14](index=14&type=chunk) - The packaged and pet food categories are highly competitive, with competition based on product innovation, quality, price, brand recognition, marketing effectiveness, and consumer preferences[15](index=15&type=chunk) Research and Development Expenditures | Fiscal Year | Expenditure (Millions USD) | | :---------- | :------------------------- | | 2020 | 224 | | 2019 | 222 | - As of May 31, 2020, General Mills had approximately **35,000 full- and part-time employees**[28](index=28&type=chunk) [Item 1A Risk Factors](index=8&type=section&id=Item%201A%20Risk%20Factors) The company faces significant risks from the COVID-19 pandemic, intense competition, commodity price volatility, supply chain disruptions, and substantial debt - The COVID-19 pandemic has negatively impacted sales in away-from-home food outlets, caused workforce disruptions, and led to increased demand volatility in retail, potentially straining the supply chain[48](index=48&type=chunk)[49](index=49&type=chunk) - The consumer and pet food categories are highly competitive, with principal competitors including manufacturers and retailers with private label products, all possessing substantial resources, with competition based on product innovation, quality, price, brand recognition, marketing, and consumer preferences[50](index=50&type=chunk)[51](index=51&type=chunk) - Price changes for commodities (grains, dairy, sugar, oils, energy) can fluctuate widely due to external conditions like weather, climate change, and pandemics, potentially leading to unexpected cost increases and reduced margins if not offset by productivity or price increases[53](index=53&type=chunk) - Disruption to the supply chain due to weather, natural disaster, cyber-attack, pandemics, or third-party failures could impair the ability to manufacture or sell products, especially since many product lines are manufactured at a single location or sourced from a single supplier[58](index=58&type=chunk) - As of May 31, 2020, the company had total debt, redeemable interests, and noncontrolling interests of **$14.4 billion**, which could limit financing options and increase vulnerability to economic downturns[77](index=77&type=chunk) - As of May 31, 2020, the company had **$20.5 billion of goodwill and indefinite-lived intangible assets**, where changes in assumptions regarding future business performance or weighted-average cost of capital could lead to significant impairment losses[89](index=89&type=chunk)[90](index=90&type=chunk) [Item 1B Unresolved Staff Comments](index=14&type=section&id=Item%201B%20Unresolved%20Staff%20Comments) No unresolved staff comments from the SEC were reported - No unresolved staff comments were reported[95](index=95&type=chunk) [Item 2 Properties](index=14&type=section&id=Item%202%20Properties) General Mills operates 47 global production facilities, owns executive offices, and leases extensive warehouse and retail space worldwide - General Mills owns its principal executive offices and main research facilities in the Minneapolis, Minnesota metropolitan area[95](index=95&type=chunk) - As of May 31, 2020, the company operated **47 facilities for food product production globally**: **24 in the United States**, **4 in Greater China**, **1 in Asia/Middle East/Africa**, **2 in Canada**, **8 in Europe/Australia**, and **8 in Latin America and Mexico**[97](index=97&type=chunk) - The company utilizes approximately **15 million square feet of warehouse and distribution space**, nearly all of which is leased, primarily supporting the North America Retail segment[99](index=99&type=chunk) - As part of its Häagen-Dazs business, the company operates **500 (all leased)** and franchises **358 branded ice cream parlors** in various countries outside of the United States and Canada[100](index=100&type=chunk) [Item 3 Legal Proceedings](index=15&type=section&id=Item%203%20Legal%20Proceedings) No pending legal actions are expected to materially impact the company's financial position or operations - As of May 31, 2020, there were no claims or litigation pending that were reasonably likely to have a material adverse effect on the company's consolidated financial position or results of operations[101](index=101&type=chunk) [Item 4 Mine Safety Disclosures](index=15&type=section&id=Item%204%20Mine%20Safety%20Disclosures) No mine safety disclosures are applicable to the company - No mine safety disclosures are applicable[102](index=102&type=chunk) PART II Detailed financial information, market data, and management's analysis of General Mills' performance and outlook [Item 5 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=16&type=section&id=Item%205%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) General Mills' common stock is listed on the NYSE under 'GIS', with approximately 27,000 record holders as of June 2020 - The company's common stock is listed on the New York Stock Exchange under the symbol **"GIS"**[104](index=104&type=chunk) - As of June 15, 2020, there were approximately **27,000 record holders** of the common stock[104](index=104&type=chunk) [Item 6 Selected Financial Data](index=17&type=section&id=Item%206%20Selected%20Financial%20Data) A five-year summary of key financial data, including operating metrics, per-share data, balance sheet highlights, and cash flow information Selected Financial Data (Fiscal Years 2016-2020) | In Millions, Except Per Share Data, Percentages and Ratios | 2020 (a) | 2019 | Fiscal Year 2018 | 2017 | 2016 | | :--------------------------------------------------------- | :------- | :--- | :--------------- | :--- | :--- | | **Operating data:** | | | | | | | Net sales | $ 17,626.6 | $ 16,865.2 | $ 15,740.4 | $ 15,619.8 | $ 16,563.1 | | Gross margin (b) (d) | 6,129.9 | 5,756.8 | 5,435.6 | 5,567.8 | 5,843.3 | | Selling, general, and administrative expenses (d) | 3,151.6 | 2,935.8 | 2,850.1 | 2,888.8 | 3,141.4 | | Operating profit (d) | 2,953.9 | 2,515.9 | 2,419.9 | 2,492.1 | 2,719.1 | | Net earnings attributable to General Mills | 2,181.2 | 1,752.7 | 2,131.0 | 1,657.5 | 1,697.4 | | Advertising and media expense | 691.8 | 601.6 | 575.9 | 623.8 | 754.4 | | Research and development expense | 224.4 | 221.9 | 219.1 | 218.2 | 222.1 | | Average shares outstanding: | | | | | | | Diluted | 613.3 | 605.4 | 585.7 | 598.0 | 611.9 | | Earnings per share: | | | | | | | Diluted | $ 3.56 | $ 2.90 | $ 3.64 | $ 2.77 | $ 2.77 | | Adjusted diluted (b) (c) | $ 3.61 | $ 3.22 | $ 3.11 | $ 3.08 | $ 2.92 | | **Operating ratios:** | | | | | | | Gross margin as a percentage of net sales (d) | 34.8% | 34.1% | 34.5% | 35.6% | 35.3% | | Selling, general, and administrative expenses as a percentage of net sales (d) | 17.9% | 17.4% | 18.1% | 18.5% | 19.0% | | Operating profit as a percentage of net sales (d) | 16.8% | 14.9% | 15.4% | 16.0% | 16.4% | | Adjusted operating profit as a percentage of net sales (b) (c) (d) | 17.3% | 16.9% | 16.6% | 17.6% | 16.8% | | Effective income tax rate | 18.5% | 17.7% | 2.7% | 28.8% | 31.4% | | **Balance sheet data:** | | | | | | | Land, buildings, and equipment | $ 3,580.6 | $ 3,787.2 | $ 4,047.2 | $ 3,687.7 | $ 3,743.6 | | Total assets | 30,806.7 | 30,111.2 | 30,624.0 | 21,812.6 | 21,712.3 | | Long-term debt, excluding current portion | 10,929.0 | 11,624.8 | 12,668.7 | 7,642.9 | 7,057.7 | | Total debt (b) | 13,539.5 | 14,490.0 | 15,818.6 | 9,481.7 | 8,430.9 | | **Cash flow data:** | | | | | | | Net cash provided by operating activities (e) | $ 3,676.2 | $ 2,807.0 | $ 2,841.0 | $ 2,415.2 | $ 2,764.2 | | Capital expenditures | 460.8 | 537.6 | 622.7 | 684.4 | 729.3 | | Free cash flow (b) | 3,215.4 | 2,269.4 | 2,218.3 | 1,730.8 | 2,034.9 | | **Share data:** | | | | | | | Cash dividends per common share | $ 1.96 | $ 1.96 | $ 1.96 | $ 1.92 | $ 1.78 | [Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%207%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A reviews fiscal 2020's strong financial performance, driven by at-home food demand, and outlines 2021 priorities amid pandemic uncertainty [Executive Overview](index=18&type=section&id=EXECUTIVE%20OVERVIEW) Fiscal 2020 results exceeded targets due to pandemic-driven at-home food demand, with 2021 priorities focused on growth, efficiency, and debt reduction - Fiscal 2020 results significantly exceeded initial annual targets for organic net sales growth, constant-currency growth in adjusted operating profit and adjusted diluted EPS, and free cash flow conversion, driven by elevated at-home food demand during the COVID-19 pandemic[109](index=109&type=chunk) - Key priorities achieved in fiscal 2020 included accelerating organic net sales growth, maintaining strong adjusted operating profit margins, and reducing leverage[109](index=109&type=chunk) Fiscal 2020 Consolidated Performance Highlights | Metric | Value | Change vs. FY2019 | | :----------------------------------- | :---------------- | :---------------- | | Consolidated Net Sales | $17.6 billion | +5% | | Organic Net Sales Growth | | +4% | | Operating Profit | $3.0 billion | +17% | | Adjusted Operating Profit (constant-currency) | $3.0 billion | +7% | | Diluted EPS | $3.56 | +23% | | Adjusted Diluted EPS (constant-currency) | $3.61 | +12% | | Net Cash Provided by Operations | $3.7 billion | 166% conversion | | Free Cash Flow | $3.2 billion | 143% conversion | | Total Debt Reduction | $1.0 billion | | | Net Debt-to-Operating Cash Flow | 3.2 | | | Net Debt-to-Adjusted EBITDA | 3.2 (target 3.5) | | - Fiscal 2021 priorities are to compete effectively, drive efficiency to fuel investment, and reduce leverage to increase financial flexibility, with performance heavily dependent on the relative balance of at-home versus away-from-home consumer food demand, which remains highly uncertain due to the COVID-19 pandemic[113](index=113&type=chunk)[114](index=114&type=chunk) [Fiscal 2020 Consolidated Results of Operations](index=19&type=section&id=FISCAL%202020%20CONSOLIDATED%20RESULTS%20OF%20OPERATIONS) Fiscal 2020 saw 5% net sales growth to $17.6 billion, 17% operating profit increase, and 23% diluted EPS growth, driven by pandemic demand - Fiscal 2020 included **53 weeks** compared to 52 weeks in fiscal 2019, and **13 months of Pet operating segment results** compared to 12 months in fiscal 2019[117](index=117&type=chunk) Fiscal 2020 Consolidated Financial Results Summary | Metric | Fiscal 2020 (Millions USD) | Fiscal 2020 vs. Fiscal 2019 Change | Percent of Net Sales | | :----------------------------------- | :------------------------- | :--------------------------------- | :------------------- | | Net sales | 17,626.6 | 5 % | | | Operating profit | 2,953.9 | 17 % | 16.8 % | | Net earnings attributable to General Mills | 2,181.2 | 24 % | | | Diluted earnings per share | $ 3.56 | 23 % | | | Organic net sales growth rate (a) | | 4 % | | | Adjusted operating profit (a) | 3,058.0 | 7 % | 17.3 % | | Adjusted diluted earnings per share (a) | $ 3.61 | 12 % | | Net Sales Growth Components (Fiscal 2020 vs. 2019) | Component | Contribution to Net Sales Growth | | :---------------------------- | :------------------------------- | | Contributions from volume growth | 4 pts | | Net price realization and mix | 2 pts | | Foreign currency exchange | (1) pt | | **Total Net Sales Growth** | **5 %** | | *53rd week contribution* | *2 pts (volume)* | | *COVID-19 pandemic impact* | *~3 pts* | Organic Net Sales Growth Components (Fiscal 2020 vs. 2019) | Component | Contribution to Organic Net Sales Growth | | :---------------------------------- | :--------------------------------------- | | Contributions from organic volume growth | 2 pts | | Organic net price realization and mix | 2 pts | | **Organic Net Sales Growth** | **4 %** | | *COVID-19 pandemic impact* | *~3 pts* | - Gross margin increased **6%** in fiscal 2020, with gross margin as a percent of net sales increasing **70 basis points to 34.8%**[126](index=126&type=chunk) - Restructuring, impairment, and other exit costs totaled **$24 million** in fiscal 2020, a significant decrease from **$275 million** in fiscal 2019, which included $193 million of impairment charges related to brand intangible assets and $15 million for manufacturing assets[129](index=129&type=chunk) - After-tax earnings from joint ventures increased **27% to $91 million** in fiscal 2020, primarily due to higher net sales at Cereal Partners Worldwide (CPW) and lower restructuring charges[132](index=132&type=chunk) [Results of Segment Operations](index=22&type=section&id=RESULTS%20OF%20SEGMENT%20OPERATIONS) Segment performance varied in fiscal 2020, with North America Retail and Pet growing, while other segments declined due to pandemic impacts Segment Net Sales and Operating Profit (Fiscal 2020 vs. 2019) | Segment | Fiscal 2020 Net Sales (Millions USD) | % of Total Net Sales | Fiscal 2019 Net Sales (Millions USD) | % of Total Net Sales | Fiscal 2020 Segment Operating Profit (Millions USD) | % of Total Segment Operating Profit | Fiscal 2019 Segment Operating Profit (Millions USD) | % of Total Segment Operating Profit | | :----------------------------- | :----------------------------------- | :------------------- | :----------------------------------- | :------------------- | :-------------------------------------------------- | :---------------------------------- | :-------------------------------------------------- | :---------------------------------- | | North America Retail | $ 10,750.5 | 61% | $ 9,925.2 | 59% | $ 2,627.0 | 75% | $ 2,277.2 | 72% | | Europe & Australia | 1,838.9 | 10% | 1,886.7 | 11% | 113.8 | 3% | 123.3 | 4% | | Convenience Stores & Foodservice | 1,816.4 | 10% | 1,969.1 | 12% | 337.2 | 10% | 419.5 | 13% | | Pet | 1,694.6 | 10% | 1,430.9 | 8% | 390.7 | 11% | 268.4 | 9% | | Asia & Latin America | 1,526.2 | 9% | 1,653.3 | 10% | 18.7 | 1% | 72.4 | 2% | | **Total** | **$ 17,626.6** | **100%** | **$ 16,865.2** | **100%** | **$ 3,487.4** | **100%** | **$ 3,160.8** | **100%** | - North America Retail net sales increased **8% to $10,750.5 million**, primarily driven by the COVID-19 pandemic's impact, with organic net sales up **6%**, and segment operating profit increased **15% to $2,627 million**[138](index=138&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk) - Europe & Australia net sales decreased **3% to $1,838.9 million** due to unfavorable foreign currency exchange, with organic net sales down **1%**, and segment operating profit decreased **8% to $114 million**[143](index=143&type=chunk)[145](index=145&type=chunk)[146](index=146&type=chunk) - Convenience Stores & Foodservice net sales decreased **8% to $1,816.4 million**, primarily due to the COVID-19 pandemic's impact on away-from-home channels, with organic net sales down **9%**, and segment operating profit decreased **20% to $337 million**[148](index=148&type=chunk)[149](index=149&type=chunk)[151](index=151&type=chunk) - Pet segment net sales increased **18% to $1,694.6 million**, driven by volume growth and favorable net price realization, including the impact of an extra month in fiscal 2020, with organic net sales also increasing **18%**, and segment operating profit increased **46% to $391 million**[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) - Asia & Latin America net sales decreased **8% to $1,526.2 million**, primarily due to the COVID-19 pandemic and unfavorable foreign currency exchange, with organic net sales down **2%**, and segment operating profit decreased **74% to $19 million**[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk) [Unallocated Corporate Items](index=26&type=section&id=UNALLOCATED%20CORPORATE%20ITEMS) Unallocated corporate expenses rose to $509 million in fiscal 2020, driven by compensation, a product recall, and investment losses - Unallocated corporate expense increased **$169 million to $509 million** in fiscal 2020, primarily driven by compensation and benefits expenses[162](index=162&type=chunk) - In fiscal 2020, a **$19 million charge** related to a product recall in the international Green Giant business was recorded[162](index=162&type=chunk) - Net losses related to certain investment valuation adjustments and the loss on sale of certain corporate investments totaled **$8 million** in fiscal 2020, compared to $23 million of gains in fiscal 2019[162](index=162&type=chunk) [Impact of Inflation](index=27&type=section&id=IMPACT%20OF%20INFLATION) Input cost inflation was 4% in fiscal 2020 and 2019, with 3% expected in 2021, mitigated by HMM and risk management - Input cost inflation was **4%** in fiscal 2020 and **4%** in fiscal 2019, primarily on commodity inputs[164](index=164&type=chunk) - The company expects input cost inflation of approximately **3%** in fiscal 2021[164](index=164&type=chunk) - General Mills minimizes inflation effects through Holistic Margin Management (HMM), planning, and operating practices[164](index=164&type=chunk) [Liquidity](index=27&type=section&id=LIQUIDITY) Operating cash flow increased to $3.7 billion in fiscal 2020, enabling $1.0 billion debt reduction and consistent dividends - The primary source of liquidity is cash flow from operations, which generated **$3.7 billion** in fiscal 2020, an **$869 million increase** from fiscal 2019[165](index=165&type=chunk)[167](index=167&type=chunk) - Cash provided by operations in fiscal 2020 represented a conversion rate of **166% of net earnings**, and free cash flow was **$3.2 billion** at a conversion rate of **143% of adjusted net earnings**[110](index=110&type=chunk) - Capital investments totaled **$461 million** in fiscal 2020, a decrease of **$77 million** from fiscal 2019[110](index=110&type=chunk)[170](index=170&type=chunk) - The company reduced total debt outstanding by **$1.0 billion** in fiscal 2020[110](index=110&type=chunk) - Dividends paid in fiscal 2020 totaled **$1,196 million**, or **$1.96 per share**, consistent with fiscal 2019[173](index=173&type=chunk) - As of May 31, 2020, **$566 million of cash and cash equivalents** were held in foreign jurisdictions, which can now be repatriated without further U.S. income tax liability due to the Tax Cuts and Jobs Act (TCJA)[166](index=166&type=chunk) [Capital Resources](index=29&type=section&id=CAPITAL%20RESOURCES) Total debt decreased to $13.5 billion in fiscal 2020, improving leverage ratios, supported by credit facilities and new note issuances Total Capital (May 31, 2020 vs. May 26, 2019) | In Millions | May 31, 2020 | May 26, 2019 | | :-------------------------- | :----------- | :----------- | | Notes payable | $ 279.0 | $ 1,468.7 | | Current portion of long-term debt | 2,331.5 | 1,396.5 | | Long-term debt | 10,929.0 | 11,624.8 | | **Total debt** | **13,539.5** | **14,490.0** | | Redeemable interest | 544.6 | 551.7 | | Noncontrolling interests | 291.0 | 313.2 | | Stockholders' equity | 8,058.5 | 7,054.5 | | **Total capital** | **$ 22,433.6** | **$ 22,409.4** | Credit Facilities (May 31, 2020) | In Billions | Facility Amount | Borrowed Amount | | :---------------------------------- | :-------------- | :-------------- | | Credit facility expiring: | | | | May 2022 | $ 2.7 | $ - | | September 2022 | 0.2 | - | | **Total committed credit facilities** | **2.9** | **-** | | Uncommitted credit facilities | 0.6 | 0.2 | | **Total committed and uncommitted credit facilities** | **$ 3.5** | **$ 0.2** | - The net debt-to-operating cash flow ratio declined to **3.2** in fiscal 2020 from 5.0 in fiscal 2019, and the net debt-to-adjusted EBITDA ratio declined to **3.2** from 3.9, consistent with plans to reduce leverage[180](index=180&type=chunk) - As of May 31, 2020, the redemption value of Sodiaal's **49% redeemable interest in Yoplait SAS was $545 million**, which approximates its fair value[181](index=181&type=chunk) [Off-Balance Sheet Arrangements and Contractual Obligations](index=30&type=section&id=OFF-BALANCE%20SHEET%20ARRANGEMENTS%20AND%20CONTRACTUAL%20OBLIGATIONS) Off-balance sheet arrangements are immaterial, with $130 million in guarantees and $16.4 billion in future contractual obligations - As of May 31, 2020, General Mills has issued guarantees and comfort letters of **$130 million** for the debt and other obligations of non-consolidated affiliates, mainly Cereal Partners Worldwide (CPW)[184](index=184&type=chunk) - Off-balance sheet arrangements were not material as of May 31, 2020[184](index=184&type=chunk) Future Estimated Cash Payments Under Contractual Obligations (as of May 31, 2020) | In Millions | Total | 2021 | 2022 - 2023 | 2024 - 2025 | 2026 and Thereafter | | :-------------------------- | :----------- | :------ | :---------- | :---------- | :------------------ | | Long-term debt (a) | $ 13,318.5 | $ 2,331.3 | $ 2,277.1 | $ 2,550.0 | $ 6,160.1 | | Accrued interest | 92.8 | 92.8 | - | - | - | | Operating leases (b) | 412.5 | 115.4 | 171.5 | 91.9 | 33.7 | | Finance leases (b) | 0.2 | 0.1 | 0.1 | - | - | | Purchase obligations (c) | 2,548.8 | 2,271.7 | 191.7 | 57.3 | 28.1 | | **Total contractual obligations** | **16,372.8** | **4,811.3** | **2,640.4** | **2,699.2** | **6,221.9** | | Other long-term obligations (d) | 1,167.1 | - | - | - | - | | **Total long-term obligations** | **$ 17,539.9** | **$ 4,811.3** | **$ 2,640.4** | **$ 2,699.2** | **$ 6,221.9** | - The company does not expect to be required to make any contributions to its domestic defined benefit plans in fiscal 2021[185](index=185&type=chunk) [Significant Accounting Estimates](index=31&type=section&id=SIGNIFICANT%20ACCOUNTING%20ESTIMATES) Key accounting estimates, including asset valuations, revenue recognition, and defined benefit plans, incorporate COVID-19 impacts and significant judgment - Significant accounting estimates include revenue recognition, valuation of long-lived assets, intangible assets, redeemable interest, stock-based compensation, income taxes, and defined benefit pension, other postretirement benefit, and postemployment benefit plans[188](index=188&type=chunk) - The company has considered the potential impacts of the COVID-19 pandemic in its significant accounting estimates as of May 31, 2020, and will continue to evaluate its nature and extent[189](index=189&type=chunk) - As of May 31, 2020, General Mills had **$20 billion of goodwill and indefinite-lived intangible assets**, with no impairment indicators present as of that date, but the Europe & Australia reporting unit and Progresso brand had lower excess fair value, and the Pillsbury brand had a risk of decreasing coverage[194](index=194&type=chunk)[196](index=196&type=chunk) - The weighted-average expected rate of return on plan assets for all defined benefit plans was **6.95% for fiscal 2020** and has been lowered to **5.67% for fiscal 2021**[208](index=208&type=chunk) - Weighted-average discount rates for obligations as of May 31, 2020, were **3.20% for defined benefit pension plans**, **3.02% for other postretirement benefit plans**, and **1.85% for postemployment benefit plans**[212](index=212&type=chunk) - In fiscal 2020, the company recorded net defined benefit pension, other postretirement benefit, and postemployment benefit plan income of **$2 million**, compared to $24 million of expense in fiscal 2019[215](index=215&type=chunk) [Recently Issued Accounting Pronouncements](index=35&type=section&id=RECENTLY%20ISSUED%20ACCOUNTING%20PRONOUNCEMENTS) New FASB guidance on LIBOR transition, income taxes, and credit losses are being reviewed, with immaterial impacts expected - The company is reviewing the impact of new FASB optional accounting guidance for reference rate reform (LIBOR transition), which provides expedients for contract modifications and hedge accounting[218](index=218&type=chunk) - New FASB accounting requirements related to income taxes, effective for fiscal 2022, are not expected to have a material impact on results of operations or financial position[219](index=219&type=chunk) - New FASB requirements for credit losses on financial instruments, effective for fiscal 2021, will be adopted using a modified retrospective approach, with an immaterial cumulative effect adjustment to retained earnings expected[220](index=220&type=chunk) [Non-GAAP Measures](index=35&type=section&id=NON-GAAP%20MEASURES) Non-GAAP measures are used for investor information and compensation, with reconciliations provided for adjusted metrics and growth rates - Non-GAAP financial measures are included to provide useful information to investors, for reporting to the Board of Directors and executive management, and as a component of incentive compensation[221](index=221&type=chunk)[224](index=224&type=chunk)[225](index=225&type=chunk) - Adjustments to non-GAAP measures typically exclude items resulting from infrequently occurring events or those that significantly affect year-to-year assessment of operating results[223](index=223&type=chunk) Adjusted Diluted EPS and Constant-Currency Growth Rate (Fiscal Years 2016-2020) | Per Share Data | 2020 | 2019 | 2020 vs. 2019 Change | 2018 | 2017 | 2016 | | :------------------------------------------- | :----- | :----- | :------------------- | :----- | :----- | :----- | | Diluted earnings per share, as reported | $ 3.56 | $ 2.90 | 23 % | $ 3.64 | $ 2.77 | $ 2.77 | | Tax items (a) | (0.09) | (0.12) | | 0.07 | - | - | | Restructuring charges (b) | 0.06 | 0.10 | | 0.11 | 0.26 | 0.26 | | Project-related costs (b) | - | - | | 0.01 | 0.05 | 0.06 | | Mark-to-market effects (c) | 0.03 | 0.05 | | (0.04) | (0.01) | (0.07) | | Product recall (d) | 0.03 | - | | - | - | - | | CPW restructuring charges (e) | 0.01 | 0.02 | | - | - | - | | Investment activity, net (f) | - | (0.03) | | - | - | - | | Net tax benefit (g) | - | (0.01) | | (0.89) | - | - | | Divestitures loss (gain) (h) | - | 0.03 | | - | 0.01 | (0.10) | | Acquisition transaction and integration costs (i) | - | 0.03 | | 0.10 | - | - | | Asset impairments (j) | - | 0.26 | | 0.11 | - | - | | Legal recovery (k) | - | (0.01) | | - | - | - | | **Adjusted diluted earnings per share** | **$ 3.61** | **$ 3.22** | **12 %** | **$ 3.11** | **$ 3.08** | **$ 2.92** | | Foreign currency exchange impact | | | Flat | | | | | **Adjusted diluted earnings per share growth, on a constant-currency basis** | | | **12 %** | | | | Net Debt-to-Adjusted EBITDA Ratio (Fiscal 2020 vs. 2019) | In Millions | Fiscal 2020 | Fiscal Year 2019 | | :---------------------------------------------------------------------------------------------------------- | :---------- | :--------------- | | Total debt (a) | $ 13,539.5 | $ 14,490.0 | | Cash | 1,677.8 | 450.0 | | **Net debt** | **$ 11,861.7** | **$ 14,040.0** | | Net earnings, including earnings attributable to redeemable and noncontrolling interests, as reported | $ 2,210.8 | $ 1,786.2 | | Income taxes | 480.5 | 367.8 | | Interest, net | 466.5 | 521.8 | | Depreciation and amortization | 594.7 | 620.1 | | **EBITDA** | **3,752.5** | **3,295.9** | | After-tax earnings from joint ventures | (91.1) | (72.0) | | Restructuring charges (b) | 50.2 | 77.6 | | Project-related costs (b) | 1.5 | 1.3 | | Mark-to-market effects (c) | 24.7 | 36.0 | | Product recall (d) | 19.3 | - | | Investment activity, net (e) | 8.4 | (22.8) | | Divestitures loss (f) | - | 30.0 | | Acquisition integration costs (g) | - | 25.6 | | Asset impairments (h) | - | 207.4 | | Legal recovery (i) | - | (16.2) | | Hyperinflationary accounting (j) | - | 3.2 | | **Adjusted EBITDA** | **$ 3,765.6** | **$ 3,566.0** | | **Net debt-to-adjusted EBITDA ratio** | **3.2** | **3.9** | [Item 7A Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%207A%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages market risks from interest rates, foreign exchange, commodities, and equity prices using derivatives and VAR analysis - General Mills is exposed to market risk stemming from changes in interest and foreign exchange rates and commodity and equity prices, which are actively managed through various hedging transactions[256](index=256&type=chunk) - A Monte Carlo Value at Risk (VAR) methodology is used to quantify market risk, estimating the maximum potential fair value loss in one day from adverse market changes under normal conditions, using a **95% confidence level**[257](index=257&type=chunk) Estimated Maximum Potential VAR (Fiscal 2020 Average) | In Millions | May 31, 2020 Average Fair Value Impact | | :----------------------- | :------------------------------------- | | Interest rate instruments | $ 78.8 | | Foreign currency instruments | 19.3 | | Commodity instruments | 2.6 | | Equity instruments | 5.0 | [Item 8 Financial Statements and Supplementary Data](index=45&type=section&id=Item%208%20Financial%20Statements%20and%20Supplementary%20Data) Audited consolidated financial statements, including statements of earnings, balance sheets, and cash flows, with notes and auditor's report, are presented [Report of Management Responsibilities](index=45&type=section&id=REPORT%20OF%20MANAGEMENT%20RESPONSIBILITIES) Management is responsible for the accuracy of GAAP-compliant financial statements and internal controls, overseen by the Audit Committee - Management is responsible for the fairness and accuracy of the consolidated financial statements, prepared in accordance with U.S. GAAP[263](index=263&type=chunk) - A system of internal controls is maintained to provide reasonable assurance that assets are safeguarded and transactions are recorded accurately[264](index=264&type=chunk) - The Audit Committee of the Board of Directors reviews and approves the company's annual financial statements and oversees internal control, auditing, and financial reporting matters[265](index=265&type=chunk)[266](index=266&type=chunk) [Report of Independent Registered Public Accounting Firm](index=46&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) KPMG issued an unqualified opinion on financial statements and internal controls, highlighting goodwill and intangible asset valuation as a critical audit matter - KPMG LLP issued an unqualified opinion on the consolidated financial statements for the three-year period ended May 31, 2020, and on the effectiveness of internal control over financial reporting as of May 31, 2020[267](index=267&type=chunk)[268](index=268&type=chunk) - The company changed its method of accounting for leases as of May 27, 2019, due to the adoption of Accounting Standards Update 2016-02, Leases (Topic 842)[269](index=269&type=chunk) - The evaluation of valuation of goodwill and brands and other indefinite-lived intangible assets was identified as a critical audit matter, requiring significant judgment in assessing future operating results, revenue growth rates, operating margins, royalty rates, and discount rates[275](index=275&type=chunk)[276](index=276&type=chunk) [Consolidated Statements of Earnings](index=48&type=section&id=Consolidated%20Statements%20of%20Earnings) The statements detail net sales, operating profit, and diluted EPS for fiscal years 2018-2020, showing strong performance in 2020 Consolidated Statements of Earnings (Fiscal Years 2018-2020) | In Millions, Except per Share Data | 2020 | 2019 | 2018 | | :--------------------------------- | :--------- | :--------- | :--------- | | Net sales | $ 17,626.6 | $ 16,865.2 | $ 15,740.4 | | Cost of sales | 11,496.7 | 11,108.4 | 10,304.8 | | Selling, general, and administrative expenses | 3,151.6 | 2,935.8 | 2,850.1 | | Divestitures loss | - | 30.0 | - | | Restructuring, impairment, and other exit costs | 24.4 | 275.1 | 165.6 | | Operating profit | 2,953.9 | 2,515.9 | 2,419.9 | | Benefit plan non-service income | (112.8) | (87.9) | (89.4) | | Interest, net | 466.5 | 521.8 | 373.7 | | Earnings before income taxes and after-tax earnings from joint ventures | 2,600.2 | 2,082.0 | 2,135.6 | | Income taxes | 480.5 | 367.8 | 57.3 | | After-tax earnings from joint ventures | 91.1 | 72.0 | 84.7 | | Net earnings, including earnings attributable to redeemable and noncontrolling interests | 2,210.8 | 1,786.2 | 2,163.0 | | Net earnings attributable to redeemable and noncontrolling interests | 29.6 | 33.5 | 32.0 | | Net earnings attributable to General Mills | $ 2,181.2 | $ 1,752.7 | $ 2,131.0 | | Earnings per share - basic | $ 3.59 | $ 2.92 | $ 3.69 | | Earnings per share - diluted | $ 3.56 | $ 2.90 | $ 3.64 | | Dividends per share | $ 1.96 | $ 1.96 | $ 1.96 | [Consolidated Statements of Comprehensive Income](index=49&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Statements present net earnings and other comprehensive income/loss components, including foreign currency and actuarial adjustments Consolidated Statements of Comprehensive Income (Fiscal Years 2018-2020) | In Millions | 2020 | 2019 | 2018 | | :----------------------------------------------------------------------- | :---------- | :---------- | :---------- | | Net earnings, including earnings attributable to redeemable and noncontrolling interests | $ 2,210.8 | $ 1,786.2 | $ 2,163.0 | | Other comprehensive income (loss), net of tax: | | | | | Foreign currency translation | (169.1) | (82.8) | (37.0) | | Net actuarial (loss) income | (224.6) | (253.4) | 140.1 | | Other fair value changes: | | | | | Securities | - | - | 1.2 | | Hedge derivatives | 3.2 | 12.1 | (50.8) | | Reclassification to earnings: | | | | | Securities | - | (2.0) | (5.1) | | Hedge derivatives | 4.1 | 0.9 | 17.4 | | Amortization of losses and prior service costs | 77.9 | 84.6 | 117.6 | | Other comprehensive (loss) income, net of tax | (308.5) | (240.6) | 183.4 | | Total comprehensive income | 1,902.3 | 1,545.6 | 2,346.4 | | Comprehensive income (loss) attributable to redeemable and noncontrolling interests | 10.1 | (10.7) | 70.5 | | Comprehensive income attributable to General Mills | $ 1,892.2 | $ 1,556.3 | $ 2,275.9 | [Consolidated Balance Sheets](index=50&type=section&id=Consolidated%20Balance%20Sheets) Balance sheets show financial position, with total assets increasing to $30.8 billion and total liabilities decreasing in fiscal 2020 Consolidated Balance Sheets (May 31, 2020 vs. May 26, 2019) | In Millions | May 31, 2020 | May 26, 2019 | | :---------------------------------------- | :----------- | :----------- | | **ASSETS** | | | | Current assets: | | | | Cash and cash equivalents | $ 1,677.8 | $ 450.0 | | Receivables | 1,615.1 | 1,679.7 | | Inventories | 1,426.3 | 1,559.3 | | Prepaid expenses and other current assets | 402.1 | 497.5 | | **Total current assets** | **5,121.3** | **4,186.5** | | Land, buildings, and equipment | 3,580.6 | 3,787.2 | | Goodwill | 13,923.2 | 13,995.8 | | Other intangible assets | 7,095.8 | 7,166.8 | | Other assets | 1,085.8 | 974.9 | | **Total assets** | **$ 30,806.7** | **$ 30,111.2** | | **LIABILITIES AND EQUITY** | | | | Current liabilities: | | | | Accounts payable | $ 3,247.7 | $ 2,854.1 | | Current portion of long-term debt | 2,331.5 | 1,396.5 | | Notes payable | 279.0 | 1,468.7 | | Other current liabilities | 1,633.3 | 1,367.8 | | **Total current liabilities** | **7,491.5** | **7,087.1** | | Long-term debt | 10,929.0 | 11,624.8 | | Deferred income taxes | 1,947.1 | 2,031.0 | | Other liabilities | 1,545.0 | 1,448.9 | | **Total liabilities** | **21,912.6** | **22,191.8** | | Redeemable interest | 544.6 | 551.7 | | Stockholders' equity: | | | | Common stock, 754.6 shares issued, $0.10 par value | 75.5 | 75.5 | | Additional paid-in capital | 1,348.6 | 1,386.7 | | Retained earnings | 15,982.1 | 14,996.7 | | Common stock in treasury, at cost, shares of 144.8 and 152.7 | (6,433.3) | (6,779.0) | | Accumulated other comprehensive loss | (2,914.4) | (2,625.4) | | **Total stockholders' equity** | **8,058.5** | **7,054.5** | | Noncontrolling interests | 291.0 | 313.2 | | **Total equity** | **8,349.5** | **7,367.7** | | **Total liabilities and equity** | **$ 30,806.7** | **$ 30,111.2** | [Consolidated Statements of Total Equity and Redeemable Interest](index=51&type=section&id=Consolidated%20Statements%20of%20Total%20Equity%20and%20Redeemable%20Interest) Statements detail changes in total equity and redeemable interest, including retained earnings, dividends, and comprehensive income Consolidated Statements of Total Equity and Redeemable Interest (Fiscal Years 2018-2020) | In Millions | 2020 | 2019 | 2018 | | :----------------------------------------------------------------------- | :---------- | :---------- | :---------- | | Total equity, beginning balance | $ 7,367.7 | $ 6,492.4 | $ 4,685.5 | | Common stock | 75.5 | 75.5 | 75.5 | | Additional paid-in capital, ending balance | 1,348.6 | 1,386.7 | 1,202.5 | | Retained earnings, ending balance | 15,982.1 | 14,996.7 | 14,459.6 | | Common stock in treasury, ending balance | (6,433.3) | (6,779.0) | (7,167.5) | | Accumulated other comprehensive loss, ending balance | (2,914.4) | (2,625.4) | (2,429.0) | | Noncontrolling interests, ending balance | 291.0 | 313.2 | 351.3 | | **Total equity, ending balance** | **$ 8,349.5** | **$ 7,367.7** | **$ 6,492.4** | | Redeemable interest, ending balance | $ 544.6 | $ 551.7 | $ 776.2 | [Consolidated Statements of Cash Flows](index=52&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash flow statements show operating cash increasing to $3.7 billion in fiscal 2020, with reduced investing and financing outflows Consolidated Statements of Cash Flows (Fiscal Years 2018-2020) | In Millions | 2020 | 2019 | 2018 | | :----------------------------------------------------------------------- | :---------- | :---------- | :---------- | | **Cash Flows - Operating Activities** | | | | | Net earnings, including earnings attributable to redeemable and noncontrolling interests | $ 2,210.8 | $ 1,786.2 | $ 2,163.0 | | Adjustments to reconcile net earnings to net cash provided by operating activities: | | | | | Depreciation and amortization | 594.7 | 620.1 | 618.8 | | After-tax earnings from joint ventures | (91.1) | (72.0) | (84.7) | | Distributions of earnings from joint ventures | 76.5 | 86.7 | 113.2 | | Stock-based compensation | 94.9 | 84.9 | 77.0 | | Deferred income taxes | (29.6) | 93.5 | (504.3) | | Pension and other postretirement benefit plan contributions | (31.1) | (28.8) | (31.8) | | Pension and other postretirement benefit plan costs | (32.3) | 6.1 | 4.6 | | Divestitures loss | - | 30.0 | - | | Restructuring, impairment, and other exit costs | 43.6 | 235.7 | 126.0 | | Changes in current assets and liabilities, excluding the effects of acquisitions and divestitures | 793.9 | (7.5) | 542.1 | | Other, net | 45.9 | (27.9) | (182.9) | | **Net cash provided by operating activities** | **3,676.2** | **2,807.0** | **2,841.0** | | **Cash Flows - Investing Activities** | | | | | Purchases of land, buildings, and equipment | (460.8) | (537.6) | (622.7) | | Acquisition, net of cash acquired | - | - | (8,035.8) | | Investments in affiliates, net | (48.0) | 0.1 | (17.3) | | Proceeds from disposal of land, buildings, and equipment | 1.7 | 14.3 | 1.4 | | Proceeds from divestitures | - | 26.4 | - | | Other, net | 20.9 | (59.7) | (11.0) | | **Net cash used by investing activities** | **(486.2)** | **(556.5)** | **(8,685.4)** | | **Cash Flows - Financing Activities** | | | | | Change in notes payable | (1,158.6) | (66.3) | 327.5 | | Issuance of long-term debt | 1,638.1 | 339.1 | 6,550.0 | | Payment of long-term debt | (1,396.7) | (1,493.8) | (600.1) | | Proceeds from common stock issued on exercised options | 263.4 | 241.4 | 99.3 | | Proceeds from common stock issued | - | - | 969.9 | | Purchases of common stock for treasury | (3.4) | (1.1) | (601.6) | | Dividends paid | (1,195.8) | (1,181.7) | (1,139.7) | | Investments in redeemable interest | - | 55.7 | - | | Distributions to noncontrolling and redeemable interest holders | (72.5) | (38.5) | (51.8) | | Other, net | (16.0) | (31.2) | (108.0) | | **Net cash (used) provided by financing activities** | **(1,941.5)** | **(2,176.4)** | **5,445.5** | | Effect of exchange rate changes on cash and cash equivalents | (20.7) | (23.1) | 31.8 | | Increase (decrease) in cash and cash equivalents | 1,227.8 | 51.0 | (367.1) | | Cash and cash equivalents - beginning of year | 450.0 | 399.0 | 766.1 | | **Cash and cash equivalents - end of year** | **$ 1,677.8** | **$ 450.0** | **$ 399.0** | [Notes to Consolidated Financial Statements](index=53&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Detailed notes provide disclosures on accounting policies, asset valuations, debt, equity, and segment information, crucial for financial understanding [NOTE 1. BASIS OF PRESENTATION AND RECLASSIFICATIONS](index=53&type=section&id=NOTE%201.%20BASIS%20OF%20PRESENTATION%20AND%20RECLASSIFICATIONS) This note details the basis of financial statement presentation, fiscal year structure, and reporting period changes for the Pet segment - The Consolidated Financial Statements include General Mills, Inc. and all subsidiaries with a controlling financial interest, eliminating intercompany transactions[284](index=284&type=chunk) - Fiscal year 2020 consisted of **53 weeks**, while fiscal years 2019 and 2018 consisted of **52 weeks**[285](index=285&type=chunk) - In fiscal 2020, the Pet operating segment's reporting period changed from an April fiscal year-end to a May fiscal year-end, resulting in **13 months of results** for fiscal 2020 compared to 12 months in fiscal 2019, a change not material to consolidated results[286](index=286&type=chunk) [NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=53&type=section&id=NOTE%202.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines key accounting policies for inventories, asset impairment, revenue recognition, derivatives, and the adoption of new accounting standards - U.S. inventories (excluding grain) are valued at the lower of cost (LIFO) or market, grain inventories are valued at net realizable value with related derivatives at fair value, and international inventories are generally valued at the lower of cost (FIFO) or net realizable value[288](index=288&type=chunk) - Goodwill and other indefinite-lived intangible assets are tested for impairment annually and whenever events or changes in circumstances indicate impairment, using discounted cash flow models for fair value estimates[292](index=292&type=chunk)[293](index=293&type=chunk)[295](index=295&type=chunk) - Revenue is recognized when control of the product transfers to the customer, net of variable consideration such as trade promotions, coupons, and estimated allowances for returns[304](index=304&type=chunk) - All derivatives are recognized on the Consolidated Balance Sheets at fair value, with changes recorded in net earnings or other comprehensive income based on hedge designation and effectiveness[309](index=309&type=chunk) - In the first quarter of fiscal 2020, the company adopted new requirements for lease accounting, capitalizing certain leases as right-of-use assets with related liabilities on the Consolidated Balance Sheet[318](index=318&type=chunk) - In the first quarter of fiscal 2019, new accounting requirements for revenue recognition were adopted, applying a principles-based five-step model, which did not result in material differences or significant changes to business processes[321](index=321&type=chunk) [NOTE 3. DIVESTITURES](index=57&type=section&id=NOTE%203.%20DIVESTITURES) Fiscal 2019 saw two divestitures, including La Salteña in Argentina (loss) and China yogurt business (gain) - During the third quarter of fiscal 2019, General Mills sold its La Salteña fresh pasta and refrigerated dough business in Argentina, recording a pre-tax loss of **$35.4 million**[326](index=326&type=chunk) - During the fourth quarter of fiscal 2019, the company sold its yogurt business in China, recording a pre-tax gain of **$5.4 million**, and simultaneously entered into a new Yoplait license agreement with the purchaser[326](index=326&type=chunk) [NOTE 4. RESTRUCTURING, IMPAIRMENT, AND OTHER EXIT COSTS](index=57&type=section&id=NOTE%204.%20RESTRUCTURING%2C%20IMPAIRMENT%2C%20AND%20OTHER%20EXIT%20COSTS) Fiscal 2019 included $192.6 million in brand impairment and $77.6 million in restructuring charges, with $50.2 million in 2020 for prior actions - In fiscal 2019, General Mills recorded a **$192.6 million charge** for the impairment of Progresso, Food Should Taste Good, and Mountain High brand intangible assets[327](index=327&type=chunk) - In fiscal 2019, a **$14.8 million charge** was recorded for the impairment of certain manufacturing assets in the North America Retail and Asia & Latin America segments[327](index=327&type=chunk) - In fiscal 2019, **$77.6 million of restructuring charges** were recorded, primarily for approved actions to drive efficiencies in the global supply chain[330](index=330&type=chunk) - In fiscal 2020, no new restructuring actions were undertaken, but **$50.2 million of restructuring charges** were recorded for previously announced actions[329](index=329&type=chunk) Restructuring and Impairment Charges by Classification (Fiscal Years 2018-2020) | In Millions | 2020 | 2019 | 2018 | | :---------------------------------------- | :---- | :---- | :---- | | Cost of sales | $ 25.8 | $ 9.9 | $ 14.0 | | Restructuring, impairment, and other exit costs | 24.4 | 275.1 | 165.6 | | **Total restructuring and impairment charges** | **50.2** | **285.0** | **179.6** | | Project-related costs classified in cost of sales | $ 1.5 | $ 1.3 | $ 11.3 | [NOTE 5. INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES](index=59&type=section&id=NOTE%205.%20INVESTMENTS%20IN%20UNCONSOLIDATED%20JOINT%20VENTURES) General Mills holds 50% interests in CPW and HDJ, with cumulative investments of $481.4 million and combined net sales of $2.0 billion in fiscal 2020 - General Mills has a **50% interest in Cereal Partners Worldwide (CPW)**, which manufactures and markets ready-to-eat cereal products in over 130 countries outside the United States and Canada[335](index=335&type=chunk) - The company also holds a **50% interest in Häagen-Dazs Japan, Inc. (HDJ)**, which manufactures and markets Häagen-Dazs ice cream products and frozen novelties in Japan[336](index=336&type=chunk) Joint Venture Related Balance Sheet Activity (May 31, 2020 vs. May 26, 2019) | In Millions | May 31, 2020 | May 26, 2019 | | :---------------------------------------- | :----------- | :----------- | | Cumulative investments | $ 481.4 | $ 452.9 | | Goodwill and other intangibles | 460.5 | 472.1 | | Aggregate advances included in cumulative investments | 279.5 | 249.0 | Joint Venture Earnings and Cash Flow Activity (Fiscal Years 2018-2020) | In Millions | 2020 | 2019 | 2018 | | :-------------------------- | :---- | :---- | :---- | | Sales to joint ventures | $ 5.9 | $ 4.2 | $ 7.4 | | Net advances (repayments) | 48.0 | (0.1) | 17.3 | | Dividends received | 76.5 | 86.7 | 113.2 | Summary Combined Financial Information for Joint Ventures (100% Basis, Fiscal Years 2018-2020) | In Millions | 2020 | 2019 | 2018 | | :------------------------------- | :---------- | :---------- | :---------- | | Net sales: | | | | | CPW | $ 1,654.3 | $ 1,647.7 | $ 1,734.0 | | HDJ | 391.3 | 396.2 | 430.4 | | **Total net sales** | **2,045.6** | **2,043.9** | **2,164.4** | | Gross margin | 785.3 | 744.4 | 853.6 | | Earnings before income taxes | 214.0 | 155.4 | 216.2 | | Earnings after income taxes | 176.5 | 111.9 | 176.7 | [NOTE 6. GOODWILL AND OTHER INTANGIBLE ASSETS](index=60&type=section&id=NOTE%206.%20GOODWILL%20AND%20OTHER%20INTANGIBLE%20ASSETS) Goodwill and intangible assets totaled $21.0 billion as of May 2020, with no impairment found in fiscal 2020, but some assets had lower excess fair values Goodwill and Other Intangible Assets (May 31, 2020 vs. May 26, 2019) | In Millions | May 31, 2020 | May 26, 2019 | | :----------------------------------------------------------------------- | :----------- | :----------- | | Goodwill | $ 13,923.2 | $ 13,995.8 | | Other intangible assets: | | | | Intangible assets not subject to amortization: | | | | Brands and other indefinite-lived intangibles | 6,561.4 | 6,590.8 | | Intangible assets subject to amortization: | | | | Franchise agreements, customer relationships, and other finite-lived intangibles | 777.8 | 786.1 | | Less accumulated amortization | (243.4) | (210.1) | | Intangible assets subject to amortization | 534.4 | 576.0 | | **Other intangible assets** | **7,095.8** | **7,166.8** | | **Total** | **$ 21,019.0** | **$ 21,162.6** | - Amortization expense for finite-lived intangible assets is estimated to be approximately **$40 million** for each of the next five fiscal years[342](index=342&type=chunk) - The annual impairment test for goodwill and indefinite-lived intangible assets in fiscal 2020 found no impairment, with fair values substantially exceeding carrying values, except for the Europe & Australia reporting unit and the Progresso brand intangible asset[344](index=344&type=chunk) Excess Fair Value as of Fiscal 2020 Test Date | In Millions | Carrying Value of Intangible Asset | Excess Fair Value as of Fiscal 2020 Test Date | | :---------------------- | :--------------------------------- | :-------------------------------------------- | | Europe & Australia | $ 672.6 | 14% | | Progresso | $ 330.0 | 5% | - The Pillsbury brand intangible asset, while having significant coverage, had a risk of decreasing coverage as of the fiscal 2020 assessment date[345](index=345&type=chunk) - In fiscal 2019, a **$192.6 million impairment charge** was recorded for the Progresso, Food Should Taste Good, and Mountain High brand intangible assets due to lower sales projections[347](index=347&type=chunk) [NOTE 7. LEASES](index=62&type=section&id=NOTE%207.%20LEASES) The company's lease portfolio consists mainly of operating leases, with $133.5 million in costs and $379.0 million in obligations in fiscal 2020 - The lease portfolio primarily consists of operating lease arrangements for warehouse and distribution space, office space, retail shops, production facilities, rail cars, production and distribution equipment, automobiles, and office equipment[349](index=349&type=chunk) Components of Lease Cost (Fiscal Year 2020) | In Millions | Fiscal Year 2020 | | :------------------ | :--------------- | | Operating lease cost | $ 133.5 | | Variable lease cost | 14.4 | | Short-term lease cost | 23.3 | Maturities of Operating and Finance Lease Obligations (as of May 31, 2020) | In Millions | Operating Leases | Finance Leases | | :-------------------------- | :--------------- | :------------- | | Fiscal 2021 | $ 115.4 | $ 0.1 | | Fiscal 2022 | 97.6 | 0.1 | | Fiscal 2023 | 73.9 | - | | Fiscal 2024 | 56.8 | - | | Fiscal 2025 | 35.1 | - | | After fiscal 2025 | 33.7 | - | | **Total noncancelable future lease obligations** | **$ 412.5** | **$ 0.2** | | Less: Interest | (33.5) | - | | **Present value of lease obligations** | **$ 379.0** | **$ 0.2** | Weighted-Average Lease Term and Discount Rate (May 31, 2020) | Metric | May 31, 2020 | | :----------------------------------- | :----------- | | Weighted-average remaining lease term | 4.6 years | | Weighted-average discount rate | 4.1 % | [NOTE 8. FINANCIAL INSTRUMENTS, RISK MANAGEMENT ACTIVITIES, AND FAIR VALUES](index=63&type=section&id=NOTE%208.%20FINANCIAL%20INSTRUMENTS%2C%20RISK%20MANAGEMENT%20ACTIVITIES%2C%20AND%20FAIR%20VALUES) General Mills manages market risks using derivatives for interest rates, foreign exchange, commodities, and equity, with fair values categorized by hierarchy - The company uses derivatives (futures, options, swaps) to manage market risks from changes in interest rates, foreign currency exchange rates, and commodity and equity prices[358](index=358&type=chunk) - Commodity derivatives are not designated for hedge accounting; changes in their values are recorded in cost of sales, with economic effects reclassified to segment operating profit when the underlying exposure affects earnings[361](index=361&type=chunk)[362](index=362&type=chunk) - Interest rate swaps, forward-starting interest rate swaps, and treasury locks are used to hedge interest rate exposure and manage financing costs[364](index=364&type=chunk) - Foreign currency forward contracts are primarily used to hedge foreign currency cash flow exposures, and euro-denominated bonds hedge net investments in foreign subsidiaries[371](index=371&type=chunk)[372](index=372&type=chunk) - Equity swaps are used to manage the risk from equity price movements affecting compensation expense related to deferred compensation plan investments[373](index=373&type=chunk) Fair Value Measurements of Assets and Liabilities (May 31, 2020) | In Millions | Level 1 | Level 2 | Level 3 | Total Assets | | :----------------------------------------------------------------------- | :------ | :------ | :------ | :----------- | | Derivatives designated as hedging instruments: | | | | | | Interest rate contracts | $ - | $ 5.6 | $ - | $ 5.6 | | Foreign exchange contracts | - | 19.8 | - | 19.8 | | Derivatives not designated as hedging instruments: | | | | | | Foreign exchange contracts | - | 18.8 | - | 18.8 | | Commodity contracts | 4.6 | 1.6 | - | 6.2 | | Grain contracts | - | 5.0 | - | 5.0 | | Other assets and liabilities reported at fair value: | | | | | | Marketable investments | 4.9 | 56.7 | - | 61.6 | | **Total assets, liabilities, and derivative positions recorded at fair value** | **$ 9.5** | **$ 107.5** | **$ -** | **$ 117.0** | | In Millions | Level 1 | Level 2 | Level 3 | Total Liabilities | | :----------------------------------------------------------------------- | :------ | :------ | :------ | :---------------- | | Derivatives designated as hedging instruments: | | | | | | Interest rate contracts | $ - | $ (7.8) | $ - | $ (7.8) | | Foreign exchange contracts | - | (3.8) | - | (3.8) | | Derivatives not designated as hedging instruments: | | | | | | Foreign exchange contracts | - | (0.2) | - | (0.2) | | Commodity contracts | (3.4) | (26.7) | - | (30.1) | | Grain contracts | - | (1.2) | - | (1.2) | | Other assets and liabilities reported at fair value: | | | | | | Marketable investments | - | - | - | - | | **Total assets, liabilities, and derivative positions recorded at fair value** | **$ (3.4)** | **$ (39.7)** | **$ -** | **$ (43.1)** | - Certain derivative instruments contain provisions requiring an investment grade credit rating; if triggered, the company would need to post **$31.4 million of collateral** as of May 31, 2020[383](index=383&type=chunk) - Walmart accounted for **21% of consolidated net sales** and **22% of accounts receivable** in fiscal 2020, with no other customer accounting for 10% or more of consolidated net sales[384](index=384&type=chunk) [NOTE 9. DEBT](index=71&type=section&id=NOTE%209.%20DEBT) Notes payable decreased to $279.0 million, with $2.9 billion in undrawn credit facilities and $13.3 billion in total long-term debt as of May 2020 Notes Payable (May 31, 2020 vs. May 26, 2019) | In Millions | May 31, 2020 Notes Payable | Weighted-Average Interest Rate | May 26, 2019 Notes Payable | Weighted-Average Interest Rate | | :------------------------ | :------------------------- | :----------------------------- | :------------------------- | :----------------------------- | | U.S. commercial paper | $ 99.9 | 3.6 % | $ 1,298.5 | 2.7 % | | Financial institutions | 179.1 | 5.1 | 170.2 | 9.0 | | **Total** | **$ 279.0** | **4.6 %** | **$ 1,468.7** | **3.4 %** | Credit Facilities (May 31, 2020) | In Billions | Facility Amount | Borrowed Amount | | :---------------------------------- | :-------------- | :-------------- | | Credit facility expiring: | | | | May 2022 | $ 2.7 | $ - | | September 2022 | 0.2 | - | | **Total committed credit facilities** | **2.9** | **-** | | Uncommitted credit facilities | 0.6 | 0.2 | | **Total committed and uncommitted credit facilities** | **$ 3.5** | **$ 0.2** | - In April 2020, General Mills issued **$750.0 million of 2.875% fixed-rate notes due April 15, 2030**, using proceeds to repay commercial paper and for general corporate purposes[390](index=390&type=chunk) - In January 2020, the company issued **€600.0 million of 0.45% fixed-rate notes due 2026** and **€200.0 million of 0.0% fixed-rate notes due 2020**, using proceeds to repay existing floating-rate and fixed-rate notes[391](index=391&type=chunk) - As of May 31, 2020, the fair value and carrying amounts of long-term debt, including the current portion, were **$14,538.4 million** and **$13,260.5 million**, respectively[357](index=357&type=chunk)[394](index=394&type=chunk) [NOTE 10. REDEEMABLE AND NONCONTROLLING INTERESTS](index=72&type=section&id=NOTE%2010.%20REDEEMABLE%20AND%20NONCONTROLLING%20INTERESTS) Redeemable and noncontrolling interests include Sodiaal's 49% stake in Yoplait SAS ($544.6 million) and GMC Class A Interests - General Mills has a **51% controlling interest in Yoplait SAS** and a **50% interest in Yoplait Marques SNC and Liberté Marques Sàrl**, with Sodiaal International holding the remaining interests[399](index=399&type=chunk) - Sodiaal's **49% euro-denominated interest in Yoplait SAS** is classified as a redeemable interest, with a redemption value of **$544.6 million** as of May 31, 2020, and Sodiaal has a put option to sell all or a portion of this interest to General Mills at fair value once per year, up to three times before December 2024[399](index=399&type=chunk) - The holder of the General Mills Cereals, LLC (GMC) Class A Interests receives quarterly preferred distributions based on a floating preferred return rate applied to a capital account balance of **$251.5 million**[403](index=403&type=chunk) - Dividends of **$56.9 million** were paid to Sodiaal in fiscal 2020 under shareholder agreements for Yoplait SAS, Yoplait Marques SNC, and Liberté Marques Sàrl[401](index=401&type=chunk) - A subsidiary of Yoplait SAS has an exclusive milk supply agreement with Sodiaal, with net purchases totaling **$201.8 million** for fiscal 2020[401](index=401&type=chunk) [NOTE 11. STOCKHOLDERS' EQUITY](index=73&type=section&id=NOTE%2011.%20STOCKHOLDERS%27%20EQUITY) Stockholders' equity components include common stock, retained earnings, treasury stock, and AOCI, with 26.4 million shares available for grant - As of May 31, 2020, a total of **26.4 million shares** were available for grant under the 2017 Stock Compensation Plan[416](index=416&type=chunk) - The Board of Directors authorized the repurchase of up to **100 million shares of common stock**, with no specified termination date[407](index=407&type=chunk) Share Repurchases (Fiscal Years 2018-2020) | In Millions | 2020 | 2019 | 2018 | | :----------------------- | :---- | :---- | :---- | | Shares of common stock | 0.1 | - | 10.9 | | Aggregate purchase price | $ 3.4 | $ 1.1 | $ 601.6 | - In March 2018, **22.7 million shares of common stock** were issued for **$1.0 billion** to finance a portion of the Blue Buffalo acquisition[408](index=408&type=chunk) Accumulated Other Comprehensive Loss Balances (Net of Tax Effects, May 31, 2020 vs. May 26, 2019) | In Millions | May 31, 2020 | May 26, 2019 | | :----------------------------------------------------------------------- | :----------- | :----------- | | Foreign currency translation adjustments | $ (889.0) | $ (739.9) | | Unrealized loss from: | | | | Hedge derivatives | (12.6) | (19.4) | | Pension, other postretirement, and postemployment benefits: | | | | Net actuarial loss | (2,022.5) | (1,880.5) | | Prior service credits | 9.7 | 14.4 | | **Accumulated other comprehensive loss** | **$ (2,914.4)** | **$ (2,625.4)** | [NOTE 12. STOCK PLANS](index=75&type=section&id=NOTE%2012.%20STOCK%20PLANS) Stock plans, including options and restricted units, align interests, with $13.4 million in option expense and $81.5 million for other units in fiscal 2020 Estimated Fair Values of Stock Options Granted and Assumptions (Fiscal Years 2018-2020) | | 2020 | 2019 | 2018 | | :----------------------------- | :---------- | :---------- | :---------- | | Estimated fair values of stock options granted | $ 7.10 | $ 5.35 | $ 6.18 | | Assumptions: | | | | | Risk-free interest rate | 2.0 % | 2.9 % | 2.2 % | | Expected term | 8.5 years | 8.5 years | 8.2 years | | Expected volatility | 17.4 % | 16.3 % | 15.8 % | | Dividend yield | 3.6 % | 4.3 % | 3.6 % | Stock Option Activity (May 31, 2020) | | Options Outstanding (Thousands) | Weighted-Average Exercise Price Per Share | | :----------------------------- | :------------------------------ | :---------------------------------------- | | Balance as of May 26, 2019 | 23,653.0 | $ 47.12 | | Granted | 2,065.0 | 53.70 | | Exercised | (7,066.0) | 37.98 | | Forfeited or expired | (487.4) | 55.91 | | **Outstanding as of May 31, 2020** | **18,164.6** | **$ 51.21** | | Exercisable as of May 31, 2020 | 8,706.4 | $ 47.28 | - Stock-based compensation expense related to stock option awards was **$13.4 million** in fiscal 2020[421](index=421&type=chunk) - Restricted stock units and performance share units generally vest over **four years** and **three years**, respectively, and accumulate dividends if they vest[424](index=424&type=chunk) - Stock-based compensation expense related to restricted stock units and performance share units was **$81.5 million** for fiscal 2020[428](index=428&type=chunk) - As of May 31, 2020, unrecognized compensation expense related to non-vested stock options, restricted stock units, and performance share units was **$104.0 million**, to be recognized over an average of **20 months**[427](index=427&type=chunk) [NOTE 13. EARNINGS PER SHARE](index=77&type=section&id=NOTE%2013.%20EARNINGS%20PER%20SHARE) This note details the calculation of basic and diluted EPS, with fiscal 2020 diluted EPS at $3.56 based on 613.3 million shares Basic and Diluted EPS Calculation (Fiscal Years 2018-2020) | In Millions, Except per Share Data | 2020 | 2019 | 2018 | | :--------------------------------- | :---------- | :---------- | :---------- | | Net earnings attributable to General Mills | $ 2,181.2 | $ 1,752.7 | $ 2,131.0 | | Average number of common shares - basic EPS | 608.1 | 600.4 | 576.8 | | Incremental share effect from: | | | | | Stock options | 2.7 | 3.1 | 6.9 | | Restricted stock units, performance share units, and other | 2.5 | 1.9 | 2.0 | | **Average number of common shares - diluted EPS** | **613.3** | **605.4** | **585.7** | | Earnings per share - basic | $ 3.59 | $ 2.92 | $ 3.69 | | **Earnings per share - diluted** | **$ 3.56** | **$ 2.90** | **$ 3.64** | - Anti-dilutive stock options, restricted stock units, and performance share units totaling **8.4 million** in fiscal 2020 were excluded from the diluted EPS computation[429](index=429&type=chunk) [NOTE 14. RETIREMENT BENEFITS AND POSTEMPLOYMENT BENEFITS](index=78&type=section&id=NOTE%2014.%20RETREMENT%20BENEFITS%20AND%20POSTEMPLOYMENT%20BENEFITS) The company sponsors defined benefit and contribution plans, with pension obligations increasing in fiscal 2020 due to actuarial losses - General Mills sponsors defined benefit pension plans in the United States, Canada, Switzerland, France, and the United Kingdom, with no voluntary contributions to principal U.S. plans in fiscal 2020 or 2019, and none expected in fiscal 2021[430](index=430&type=chunk) - The company also sponsors plan

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ________________ (Mark One) R QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED FEBRUARY 23, 2020 £ 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- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ________________ (Mark One) R QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED NOVEMBER 24, 2019 £ 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) | --- | |--- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ________________ (Mark One) R QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED AUGUST 25, 2019 £ 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 41-02 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED May 26, 2019 ☐ 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 ...

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 February 24, 2019 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR | --- | --- | --- | |-------------------------------------------------------------------------------------------------|------------------------------------------------------------------ ...