filings.toolsItem 8. Financial Statements and Supplementary Data
163K characters. Original on sec.gov · Markdown
Item 8. Financial Statements and Supplementary Data
REPORT OF MANAGEMENT RESPONSIBILITIES
The
management
of
General
Mills,
Inc.
is
responsible
for
the
fairness
and
accuracy
of
the
consolidated
financial
statements.
The
statements
have
been
prepared
in
accordance
with
accounting
principles
that
are
generally
accepted
in
the
United
States,
using
management’s
best estimates and judgments where
appropriate. The financial information throughout
this Annual Report on Form
10-
K is consistent with our consolidated financial statements.
Management
has established
a system
of internal
controls that
provides
reasonable
assurance that
assets are
adequately
safeguarded
and
transactions
are
recorded
accurately
in
all
material
respects,
in
accordance
with
management’s
authorization.
We
maintain
a
strong
audit program
that independently
evaluates
the adequacy
and effectiveness
of internal
controls. Our
internal controls
provide
for
appropriate
separation
of
duties
and
responsibilities,
and
there
are
documented
policies
regarding
use
of
our
assets
and
proper
financial reporting. These formally stated and regularly communicated
policies demand highly ethical conduct from all employees.
The Audit
Committee of
the Board
of Directors
meets regularly
with management,
internal auditors,
and our
independent registered
public
accounting
firm
to
review
internal
control,
auditing,
and
financial
reporting
matters.
The
independent
registered
public
accounting firm, internal auditors, and employees have full and free access to
the Audit Committee at any time.
The Audit
Committee reviewed
and approved
the Company’s
annual financial
statements. The
Audit Committee
recommended,
and
the Board
of Directors
approved, that
the consolidated
financial statements
be included
in the
Annual Report.
The Audit
Committee
also appointed KPMG LLP to serve as the Company’s
independent registered public accounting firm for fiscal 2026.
/s/ J. L. Harmening
/s/ K. A. Bruce
J. L. Harmening
K. A. Bruce
Chief Executive Officer
Chief Financial Officer
June 25, 2025
Report of Independent Registered Public Accounting Firm
To the Stockholders
and Board of Directors
General Mills, Inc.:
Opinions on the Consolidated Financial Statements and Internal Control
Over Financial Reporting
We
have
audited
the
accompanying
consolidated
balance
sheets
of
General
Mills,
Inc. and
subsidiaries
(the
Company)
as
of
May 25, 2025, and May 26,
2024, the related consolidated
statements of earnings, comprehensive
income, total equity,
and cash flows
for
each
of
the
fiscal
years
in
the
three-year
period
ended
May 25, 2025,
and
the
related
notes
and
financial
statement
schedule
II
(collectively,
the consolidated
financial statements).
We
also have
audited the
Company’s
internal control
over financial
reporting as
of
May 25, 2025,
based
on
criteria
established
in
Internal
Control
–
Integrated
Framework
(2013)
issued
by
the
Committee
of
Sponsoring Organizations of the Treadway
Commission.
In our
opinion, the
consolidated financial
statements referred
to above
present fairly,
in all material
respects, the
financial position
of
the Company as
of May 25, 2025, and
May 26, 2024,
and the results of
its operations and
its cash flows for
each of the fiscal
years in
the three-year
period ended May 25,
2025, in conformity
with U.S. generally
accepted accounting
principles. Also in
our opinion,
the
Company maintained,
in all material
respects, effective
internal control
over financial
reporting as of
May 25, 2025, based
on criteria
established
in
Internal
Control
–
Integrated
Framework
(2013)
issued
by
the
Committee
of
Sponsoring
Organizations
of
the
Treadway Commission.
Basis for Opinions
The Company’s
management is responsible
for these consolidated
financial statements, for
maintaining effective
internal control over
financial
reporting,
and
for
its
assessment
of
the
effectiveness
of
internal
control
over
financial
reporting,
included
in
the
accompanying Management's
Report on
Internal Control
over Financial
Reporting. Our
responsibility is
to express
an opinion
on the
Company’s
consolidated financial
statements and an
opinion on
the Company’s
internal control
over financial reporting
based on
our
audits. We
are a
public accounting
firm registered
with the
Public Company
Accounting Oversight
Board (United
States) (PCAOB)
and are required to
be independent with
respect to the Company
in accordance with the
U.S. federal securities laws
and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted
our audits in accordance with the
standards of the PCAOB. Those standards require
that we plan and perform the audits
to obtain
reasonable assurance
about whether
the consolidated
financial statements
are free
of material
misstatement, whether
due to
error or fraud, and whether effective internal control over financial
reporting was maintained in all material respects.
Our audits of
the consolidated financial
statements included performing
procedures to assess
the risks of
material misstatement
of the
consolidated
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
consolidated
financial
statements. Our audits also included
evaluating the accounting principles
used and significant estimates made
by management, as well
as evaluating
the overall
presentation
of the
consolidated
financial
statements.
Our
audit of
internal
control over
financial
reporting
included obtaining an understanding
of internal control over financial
reporting, assessing the risk that
a material weakness exists,
and
testing and
evaluating the
design and
operating effectiveness
of internal
control based
on the
assessed risk.
Our audits
also included
performing
such other
procedures as
we considered
necessary in
the circumstances.
We
believe that
our audits
provide a
reasonable
basis for our opinions.
Definition and Limitations of Internal Control
Over Financial Reporting
A company’s
internal control over financial reporting is a
process designed to provide reasonable assurance
regarding the reliability of
financial reporting and
the preparation of
financial statements for
external purposes in
accordance with generally
accepted accounting
principles.
A
company’s
internal
control
over
financial
reporting
includes
those
policies
and
procedures
that
(1)
pertain
to
the
maintenance
of
records
that,
in
reasonable
detail,
accurately
and
fairly
reflect
the
transactions
and
dispositions
of
the
assets
of
the
company; (2) provide
reasonable assurance that
transactions are recorded
as necessary to permit
preparation of financial
statements in
accordance with
generally accepted
accounting principles,
and that
receipts and
expenditures of
the company
are being
made only
in
accordance
with
authorizations
of
management
and
directors
of
the
company;
and
(3)
provide
reasonable
assurance
regarding
prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s
assets that could have a material effect
on the financial statements.
Because of its inherent
limitations, internal control
over financial reporting may
not prevent or detect
misstatements. Also, projections
of any evaluation
of effectiveness to
future periods are
subject to the
risk that controls
may become inadequate
because of changes
in
conditions, or that the degree of compliance with the policies or procedures
may deteriorate.
Critical Audit Matter
The critical audit matter
communicated below is a
matter arising from the
current period audit of the
consolidated financial statements
that was communicated
or required to
be communicated to
the audit committee
and that: (1) relates
to accounts or
disclosures that are
material to
the consolidated
financial statements
and (2)
involved our
especially challenging,
subjective, or
complex judgments.
The
communication
of
a
critical
audit matter
does
not
alter
in any
way
our
opinion
on the
consolidated
financial
statements, taken
as a
whole, and
we are
not, by
communicating the
critical audit
matter below,
providing a
separate opinion
on the
critical audit
matter or
on the accounts or disclosures to which it relates.
Valuation
of goodwill and brand intangible assets
As discussed in Note 6 to the consolidated financial statements, the goodwill
and brands and other indefinite-lived intangibles
balances
as
of
May
25,
2025,
were
$15,622.4
million
and
$6,816.7
million,
respectively.
The
impairment
tests
for
these
assets, which
are performed
annually and
whenever
events or
changes in
circumstances
indicate that
impairment may
have
occurred, require
the Company
to estimate
the fair
value of
the reporting
units to
which goodwill
is assigned
as well
as the
brands and
other indefinite
-lived intangible
assets. The
fair value
estimates are
derived
from discounted
cash flow
analyses
that
require
the
Company
to make
judgments
about
highly subjective
matters,
including
future
operating
results,
including
revenue growth rates and operating margins,
and an estimate of the discount rates and royalty rates.
We
identified the
assessment of the
valuation of certain
goodwill and
brand intangible assets
as a critical
audit matter.
There
was
a
significant
degree
of
judgment
required
in
evaluating
audit
evidence,
which
consists
primarily
of
forward-looking
assumptions
about
future
operating
results,
specifically
the
revenue
growth
rates
and
operating
margins,
royalty
rates
and
subjective inputs used to estimate the discount rates.
The
following
are
the
primary
procedures
we
performed
to address
this critical
audit
matter.
We
evaluated
the
design
and
tested
the
operating
effectiveness
of
internal
controls
related
to
the valuation
of goodwill
and
brand
intangible
assets. This
included controls related
to the assumptions
about future operating
results and the discount
and royalty rates
used to measure
the fair
value of
the reporting
units and
brand intangible
assets. We
performed
sensitivity analyses
over the
revenue growth
rates, operating margins, brand
royalty rates and discount rates
to assess the impact of
other points within a range
of potential
assumptions.
We
evaluated
the
revenue
growth
rates
and
operating
margin
assumptions
by
comparing
them
to
recent
financial performance
and external
market and
industry data.
We
evaluated whether
these assumptions
were consistent
with
evidence obtained
in other areas
of the audit.
We
involved professionals with
specialized skills and
knowledge, who assisted
in
the
evaluation
of
certain
of the
Company’s
assumptions
including
discount
rate,
by
comparing
them
against
rate
ranges
that
were
independently
developed
using
publicly
available
market
data
for
comparable
entities
and
the
royalty
rates,
by
evaluating the methods, assumptions and market data used to estimate the royalty
rates.
/s/
KPMG
LLP
We have served
as the Company’s auditor since 1928.
Minneapolis, Minnesota
June 25, 2025
Consolidated Statements of Earnings
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions, Except per Share Data)
Fiscal Year
2025
2024
2023
Net sales
$
19,486.6
$
19,857.2
$
20,094.2
Cost of sales
12,753.6
12,925.1
13,548.4
Selling, general, and administrative expenses
3,445.8
3,259.0
3,500.4
Divestitures gain, net
(95.9)
-
(444.6)
Restructuring, transformation, impairment, and other exit costs
78.3
241.4
56.2
Operating profit
3,304.8
3,431.7
3,433.8
Benefit plan non-service income
(54.4)
(75.8)
(88.8)
Interest, net
524.2
479.2
382.1
Earnings before income taxes and after-tax earnings
from joint ventures
2,835.0
3,028.3
3,140.5
Income taxes
573.7
594.5
612.2
After-tax earnings from joint ventures
57.6
84.8
81.3
Net earnings, including earnings attributable to noncontrolling interests
2,318.9
2,518.6
2,609.6
Net earnings attributable to noncontrolling interests
23.7
22.0
15.7
Net earnings attributable to General Mills
$
2,295.2
$
2,496.6
$
2,593.9
Earnings per share — basic
$
4.12
$
4.34
$
4.36
Earnings per share — diluted
$
4.10
$
4.31
$
4.31
Dividends per share
$
2.40
$
2.36
$
2.16
See accompanying notes to consolidated financial statements.
Consolidated Statements of Comprehensive Income
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions)
Fiscal Year
2025
2024
2023
Net earnings, including earnings attributable to noncontrolling interests
$
2,318.9
$
2,518.6
$
2,609.6
Other comprehensive (loss) income, net of tax:
Foreign currency translation
(114.9)
(86.6)
(110.8)
Net actuarial income (loss)
17.2
(187.1)
(228.0)
Other fair value changes:
Hedge derivatives
(7.4)
(3.2)
1.3
Reclassification to earnings:
Foreign currency translation
33.9
-
(7.4)
Hedge derivatives
(0.2)
(2.5)
(18.7)
Amortization of losses and prior service costs
46.5
36.7
56.9
Other comprehensive loss, net of tax
(24.9)
(242.7)
(306.7)
Total comprehensive
income
2,294.0
2,275.9
2,302.9
Comprehensive income attributable to noncontrolling interests
24.1
22.1
15.4
Comprehensive income attributable to General Mills
$
2,269.9
$
2,253.8
$
2,287.5
See accompanying notes to consolidated financial statements.
Consolidated Balance Sheets
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions, Except Par Value)
May 25, 2025
May 26, 2024
ASSETS
Current assets:
Cash and cash equivalents
$
363.9
$
418.0
Receivables
1,795.9
1,696.2
Inventories
1,910.8
1,898.2
Prepaid expenses and other current assets
464.7
568.5
Assets held for sale
740.4
-
Total current
assets
5,275.7
4,580.9
Land, buildings, and equipment
3,632.6
3,863.9
Goodwill
15,622.4
14,750.7
Other intangible assets
7,081.4
6,979.9
Other assets
1,459.0
1,294.5
Total assets
$
33,071.1
$
31,469.9
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
4,009.5
$
3,987.8
Current portion of long-term debt
1,528.4
1,614.1
Notes payable
677.0
11.8
Other current liabilities
1,624.0
1,419.4
Liabilities held for sale
18.4
-
Total current
liabilities
7,857.3
7,033.1
Long-term debt
12,673.2
11,304.2
Deferred income taxes
2,100.8
2,200.6
Other liabilities
1,228.6
1,283.5
Total liabilities
23,859.9
21,821.4
Stockholders’ equity:
Common stock,
754.6
shares issued, $
0.10
par value
75.5
75.5
Additional paid-in capital
1,218.8
1,227.0
Retained earnings
21,917.8
20,971.8
Common stock in treasury,
at cost, shares of
212.2
and
195.5
(11,467.9)
(10,357.9)
Accumulated other comprehensive loss
(2,545.0)
(2,519.7)
Total stockholders’
equity
9,199.2
9,396.7
Noncontrolling interests
12.0
251.8
Total equity
9,211.2
9,648.5
Total liabilities and equity
$
33,071.1
$
31,469.9
See accompanying notes to consolidated financial statements.
Consolidated Statements of Total
Equity
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions, Except per Share Data)
Fiscal Year
2025
2024
2023
Shares
Amount
Shares
Amount
Shares
Amount
Total equity,
beginning balance
$
9,648.5
$
10,700.0
$
10,788.0
Common stock,
billion shares authorized, $
0.10
par value
754.6
75.5
754.6
75.5
754.6
75.5
Additional paid-in capital:
Beginning balance
1,227.0
1,222.4
1,182.9
Stock compensation plans
(19.4)
(11.7)
34.5
Unearned compensation related to stock unit awards
(79.6)
(78.1)
(104.7)
Earned compensation
90.8
94.4
109.7
Ending balance
1,218.8
1,227.0
1,222.4
Retained earnings:
Beginning balance
20,971.8
19,838.6
18,532.6
Net earnings attributable to General Mills
2,295.2
2,496.6
2,593.9
Cash dividends declared ($
2.40
, $
2.36
, and $
2.16
per share)
(1,338.7)
(1,363.4)
(1,287.9)
Capital appreciation paid to holder of Class A limited
membership interests in General Mills Cereals, LLC
(10.5)
-
-
Ending balance
21,917.8
20,971.8
19,838.6
Common stock in treasury:
Beginning balance
(195.5)
(10,357.9)
(168.0)
(8,410.0)
(155.7)
(7,278.1)
Shares purchased, including excise tax of $
10.6
million,
$
18.8
million, and $-
(18.7)
(1,213.5)
(29.2)
(2,021.2)
(18.0)
(1,403.6)
Stock compensation plans
2.0
103.5
1.7
73.3
5.7
271.7
Ending balance
(212.2)
(11,467.9)
(195.5)
(10,357.9)
(168.0)
(8,410.0)
Accumulated other comprehensive loss:
Beginning balance
(2,519.7)
(2,276.9)
(1,970.5)
Comprehensive loss
(25.3)
(242.8)
(306.4)
Ending balance
(2,545.0)
(2,519.7)
(2,276.9)
Noncontrolling interests:
Beginning balance
251.8
250.4
245.6
Comprehensive income
24.1
22.1
15.4
Distributions to noncontrolling interest holders
(21.6)
(21.3)
(15.7)
Repurchase of Class A limited membership interests in
General Mills Cereals, LLC
(242.3)
-
-
Change in ownership interest
-
0.6
-
Divestiture
-
-
5.1
Ending balance
12.0
251.8
250.4
Total equity,
ending balance
$
9,211.2
$
9,648.5
$
10,700.0
See accompanying notes to consolidated financial statements.
Consolidated Statements of Cash Flows
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions)
Fiscal Year
2025
2024
2023
Cash Flows - Operating Activities
Net earnings, including earnings attributable to noncontrolling interests
$
2,318.9
$
2,518.6
$
2,609.6
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization
539.0
552.7
546.6
After-tax earnings from joint ventures
(57.6)
(84.8)
(81.3)
Distributions of earnings from joint ventures
44.6
50.4
69.9
Stock-based compensation
91.7
95.3
111.7
Deferred income taxes
(120.9)
(48.5)
(22.2)
Pension and other postretirement benefit plan contributions
(30.8)
(30.1)
(30.1)
Pension and other postretirement benefit plan costs
(12.7)
(27.0)
(27.6)
Divestitures gain, net
(95.9)
-
(444.6)
Restructuring, transformation, impairment, and other exit costs
74.3
223.5
24.4
Changes in current assets and liabilities, excluding the effects of acquisitions and divestitures
192.4
10.6
(48.9)
Other, net
(24.8)
41.9
71.1
Net cash provided by operating activities
2,918.2
3,302.6
2,778.6
Cash Flows - Investing Activities
Purchases of land, buildings, and equipment
(625.3)
(774.1)
(689.5)
Acquisitions, net of cash acquired
(1,419.3)
(451.9)
(251.5)
Investments in affiliates, net
13.3
(2.7)
(32.2)
Proceeds from disposal of land, buildings, and equipment
1.1
0.8
1.3
Proceeds from divestitures, net of cash divested
241.8
-
633.1
Other, net
(6.5)
30.5
(7.6)
Net cash used by investing activities
(1,794.9)
(1,197.4)
(346.4)
Cash Flows - Financing Activities
Change in notes payable
667.1
(20.5)
(769.3)
Issuance of long-term debt
2,354.9
2,065.2
2,324.4
Payment of long-term debt
(1,300.0)
(901.5)
(1,421.7)
Repurchase of Class A limited membership interests in General Mills Cereals, LLC
(252.8)
-
-
Proceeds from common stock issued on exercised options
43.0
25.5
232.3
Purchases of common stock for treasury
(1,202.9)
(2,002.4)
(1,403.6)
Dividends paid
(1,338.7)
(1,363.4)
(1,287.9)
Distributions to noncontrolling interest holders
(21.6)
(21.3)
(15.7)
Other, net
(129.1)
(53.9)
(62.6)
Net cash used by financing activities
(1,180.1)
(2,272.3)
(2,404.1)
Effect of exchange rate changes on cash and cash equivalents
2.7
(0.4)
(12.0)
(Decrease) increase in cash and cash equivalents
(54.1)
(167.5)
16.1
Cash and cash equivalents - beginning of year
418.0
585.5
569.4
Cash and cash equivalents - end of year
$
363.9
$
418.0
$
585.5
Cash flow from changes in current assets and liabilities, excluding the effects of acquisitions
and divestitures:
Receivables
$
(79.0)
$
(1.8)
$
(41.2)
Inventories
(18.5)
287.6
(319.0)
Prepaid expenses and other current assets
80.8
167.0
61.6
Accounts payable
86.7
(251.2)
199.8
Other current liabilities
122.4
(191.0)
49.9
Changes in current assets and liabilities
$
192.4
$
10.6
$
(48.9)
See accompanying notes to consolidated financial statements.
Notes to Consolidated Financial Statements
GENERAL MILLS, INC. AND SUBSIDIARIES
NOTE 1. BASIS OF PRESENTATION
AND RECLASSIFICATIONS
Basis of Presentation
Our Consolidated Financial
Statements include the
accounts of General
Mills, Inc. and all
subsidiaries in which
we have a controlling
financial interest. Intercompany transactions and accounts are eliminated
in consolidation.
Our fiscal year
ends on the
last Sunday in
May.
Our India business
is on an
April fiscal year
end. In addition,
the consolidated results
of certain recent acquisitions are reported on a one-month lag. Please see Note 3 for
more information.
Certain reclassifications to our previously reported financial information
have been made to conform to the current period
presentation.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Cash and Cash Equivalents
We consider all investments
purchased with an original maturity of three months or less to be cash equivalents.
Inventories
All
inventories
in
the
United
States
other
than
grain
are
valued
at
the
lower
of
cost,
using
the
last-in,
first-out
(LIFO)
method,
or
market. Grain inventories are
valued at net realizable
value, and all related cash
contracts and derivatives are valued
at fair value, with
all net changes in value recorded in earnings currently.
Inventories
outside
of the
United
States are
generally
valued
at
the lower
of
cost, using
the
first-in,
first-out
(FIFO) method,
or net
realizable value.
Shipping
costs associated
with the
distribution of
finished product
to our
customers are
recorded as
cost of
sales and
are recognized
when the related finished product is shipped to and accepted by the customer.
Land, Buildings, Equipment, and Depreciation
Land is recorded at historical cost.
Buildings and equipment, including
capitalized interest and internal engineering
costs, are recorded
at
cost
and
depreciated
over
estimated
useful
lives,
primarily
using
the
straight-line
method.
Ordinary
maintenance
and
repairs
are
charged
to
cost
of
sales.
Buildings
are
usually
depreciated
over
years,
and
equipment,
furniture,
and
software
are
usually
depreciated over
to
years. Fully depreciated assets are retained
in buildings and equipment until disposal.
When an item is sold or
retired,
the
accounts
are
relieved
of
its
cost
and
related
accumulated
depreciation
and
the
resulting
gains
and
losses,
if
any,
are
recognized in earnings.
Long-lived assets
are reviewed
for impairment
whenever events
or changes
in circumstances
indicate that
the carrying
amount of
an
asset
(or
asset
group)
may
not
be
recoverable.
An
impairment
loss
would
be
recognized
when
estimated
undiscounted
future
cash
flows from
the operation
and disposition
of the
asset group
are less
than the
carrying amount
of the
asset group.
Asset groups
have
identifiable cash
flows and
are largely
independent of
other asset groups.
Measurement of
an impairment
loss would
be based
on the
excess
of
the
carrying
amount of
the
asset group
over
its fair
value.
Fair
value
is measured
using
a discounted
cash
flow model
or
independent appraisals, as appropriate.
Goodwill and Other Intangible Assets
Goodwill
is
not
subject
to
amortization
and
is
tested
for
impairment
annually
and
whenever
events
or
changes
in
circumstances
indicate that impairment may have
occurred. We
perform our annual goodwill and
indefinite-lived intangible assets impairment
test as
of the
first day
of the
second quarter
of the
fiscal year.
Impairment testing
is performed
for each
of our
reporting units.
We
compare
the
carrying
value
of
a
reporting
unit,
including
goodwill,
to
the
fair
value
of
the
unit.
Carrying
value
is
based
on
the
assets
and
liabilities
associated
with
the
operations
of
that
reporting
unit,
which
often
requires
allocation
of
shared
or
corporate
items
among
reporting
units.
If
the
carrying
amount
of
a
reporting
unit
exceeds
its
fair
value,
impairment
has
occurred.
We
recognize
an
impairment charge
for the
amount by
which the carrying
amount of
the reporting
unit exceeds
its fair
value up
to the
total amount
of
goodwill allocated
to the
reporting unit.
Our estimates
of fair
value are
determined based
on a
discounted
cash flow
model. Growth
rates for sales and profits are determined using inputs from our long-range
planning process. We also make
estimates of discount rates,
perpetuity growth assumptions, market comparables, and other factors.
We evaluate the
useful lives of our other intangible assets, mainly brands, to
determine if they are finite or indefinite-lived.
Reaching a
determination
on
useful
life
requires
significant
judgments
and
assumptions
regarding
the
future
effects
of
obsolescence,
demand,
competition, other economic
factors (such as the
stability of the industry,
known technological advances,
legislative action that
results
in an uncertain or
changing regulatory environment,
and expected changes in
distribution channels), the level
of required maintenance
expenditures,
and
the
expected
lives
of
other
related
groups
of
assets.
Intangible
assets
that
are
deemed
to
have
finite
lives
are
amortized on a straight-line basis, over their useful lives, generally ranging
from
to
years.
Our
indefinite-lived
intangible
assets,
mainly
intangible
assets
primarily
associated
with
the
Blue
Buffalo
,
Pillsbury
,
Totino’s
,
Progresso
,
Old
El
Paso
,
Tiki
Pets
,
Annie’s
,
Nudges
,
Edgard
&
Cooper
,
and
Häagen-Dazs
brands,
are
also
tested
for
impairment
annually and
whenever events
or changes
in circumstances
indicate that
their carrying
value may
not be recoverable.
Our estimate
of
the fair
value of
the brands
is based
on a
discounted cash
flow model
using inputs
which included
projected revenues
from our
long-
range plan, assumed royalty rates that could be payable if we did not own
the brands, and a discount rate.
Our finite-lived intangible
assets, primarily acquired
customer relationships, are
reviewed for impairment
whenever events or changes
in circumstances indicate
that the carrying amount
of an asset may not
be recoverable. An impairment
loss would be recognized
when
estimated undiscounted future cash
flows from the operation and disposition
of the asset are less than the
carrying amount of the asset.
Assets generally
have identifiable
cash flows
and are
largely independent
of other
assets. Measurement
of an
impairment loss
would
be
based on
the
excess of
the carrying
amount of
the asset
over
its fair
value.
Fair
value
is measured
using
a discounted
cash
flow
model or other similar valuation model, as appropriate.
Leases
We
determine whether
an arrangement
is a lease
at inception.
When our
lease arrangements
include lease and
non-lease components,
we account for lease and non-lease components (e.g.,
common area maintenance) separately based on their relative standalone prices.
Any
lease
arrangements
with
an
initial
term
of
months
or
less
are
not
recorded
on
our
Consolidated
Balance
Sheets,
and
we
recognize lease costs for these
lease arrangements on a straight-line
basis over the lease term. Many
of our lease arrangements provide
us with
options to
exercise one
or more
renewal terms
or to
terminate the
lease arrangement.
We
include these
options when
we are
reasonably certain
to exercise them
in the lease
term used to
establish our
right of use
assets and lease
liabilities. Generally,
our lease
agreements do not include an option to purchase the leased asset, residual value guarantees,
or material restrictive covenants.
We
have
certain
lease
arrangements
with
variable
rental
payments.
Our
lease
arrangements
for
our
Häagen-Dazs
retail
shops
often
include rental payments
that are based
on a percentage
of retail sales. We
have other lease
arrangements that are
adjusted periodically
based on
an inflation
index or rate.
The future
variability of these
payments and
adjustments are
unknown, and
therefore they
are not
included
as
minimum
lease
payments
used
to
determine
our
right
of
use
assets
and
lease
liabilities.
Variable
rental
payments
are
recognized in the period in which the obligation is incurred.
As
most
of
our
lease
arrangements
do
not
provide
an
implicit
interest
rate,
we
apply
an
incremental
borrowing
rate
based
on
the
information available at the commencement date of the lease arrangement
to determine the present value of lease payments.
Investments in Unconsolidated Joint Ventures
Our
investments
in
companies
over
which
we
have
the
ability
to
exercise
significant
influence
are
stated
at
cost
plus
our
share
of
undistributed
earnings
or
losses.
We
receive
royalty
income
from
certain
joint
ventures,
incur
various
expenses
(primarily
research
and
development),
and
record
the
tax
impact
of
certain
joint
venture
operations
that
are
structured
as
partnerships.
In
addition,
we
make
advances
to
our
joint
ventures
in
the
form
of
loans
or
capital
investments.
We
also
sell
certain
raw
materials,
semi-finished
goods, and finished goods to the joint ventures, generally at market prices.
In addition,
we assess our
investments in our
joint ventures if
we have reason
to believe an
impairment may have
occurred including,
but not
limited to,
as a
result of
ongoing operating
losses, projected
decreases in
earnings, increases
in the
weighted-average
cost of
capital,
or
significant
business
disruptions.
The
significant
assumptions
used
to
estimate
fair
value
include
revenue
growth
and
profitability,
royalty
rates,
capital
spending,
depreciation
and
taxes,
foreign
currency
exchange
rates,
and
a
discount
rate.
By
their
nature, these projections
and assumptions are uncertain.
If we were to
determine the current
fair value of our
investment was less than
the carrying value of
the investment, then we
would assess if the
shortfall was of a temporary
or permanent nature and
write down the
investment to its fair value if we concluded the impairment is other than temporary.
Revenue Recognition
Our revenues primarily result
from contracts with customers,
which are generally short-term
and have a single performance
obligation
– the
delivery of
product. We
recognize revenue
for the
sale of packaged
foods at the
point in
time when our
performance obligation
has been satisfied and control of the
product has transferred to our customer,
which generally occurs when the shipment
is accepted by
our customer.
Sales include
shipping and
handling charges
billed to
the customer
and are
reported
net of
variable consideration
and
consideration
payable
to
our
customers,
including
trade
promotion,
consumer
coupon
redemption
and
other
reductions
to
the
transaction
price,
including
estimated allowances
for
returns, unsalable
product,
and
prompt
pay
discounts.
Sales, use,
value-added,
and
other
excise
taxes
are
not
included
in
revenue.
Trade
promotions
are
recorded
using
significant
judgment
of
estimated
participation and
performance levels
for offered
programs at
the time
of sale.
Differences between
estimated and
actual reductions
to
the
transaction
price
are
recognized
as
a
change
in
estimate
in
a
subsequent
period.
We
generally
do
not
allow
a
right
of
return.
However,
on a
limited case-by-case
basis with
prior
approval, we
may
allow customers
to return
product. In
limited circumstances,
product
returned
in
saleable
condition
is
resold
to
other
customers
or
outlets.
Receivables
from
customers
generally
do
not
bear
interest. Payment terms and
collection patterns vary around
the world and by
channel, and are short-term,
and as such, we do
not have
any significant financing components.
Our allowance for doubtful
accounts represents our estimate of
expected credit losses related
to
our
trade
receivables.
We
pool
our
trade
receivables
based
on
similar
risk
characteristics,
such
as
geographic
location,
business
channel, and other
account data. To
estimate our allowance
for doubtful
accounts, we leverage
information on historical
losses, asset-
specific
risk
characteristics,
current
conditions,
and reasonable
and
supportable
forecasts of
future
conditions.
Account
balances
are
written off
against the
allowance when
we deem
the amount
is uncollectible.
Please see
Note 17
for a
disaggregation of
our revenue
into
categories
that
depict
how
the
nature,
amount,
timing,
and
uncertainty
of
revenue
and
cash
flows
are
affected
by
economic
factors. We do
not have material contract assets or liabilities arising from our contracts with customers.
Environmental Costs
Environmental costs
relating to
existing conditions
caused by
past operations
that do
not contribute
to current
or future
revenues are
expensed. Liabilities
for anticipated
remediation costs
are recorded
on an
undiscounted basis
when they
are probable
and reasonably
estimable, generally no later than the completion of feasibility studies or our commitment
to a plan of action.
Advertising Production Costs
We expense the
production costs of advertising the first time that the advertising takes place.
Research and Development
All expenditures for research and development
(R&D) are charged against earnings in the period
incurred. R&D includes expenditures
for
new
product
and
manufacturing
process
innovation,
and
the
annual
expenditures
are
comprised
primarily
of
internal
salaries,
wages, consulting, and supplies
attributable to R&D activities.
Other costs include depreciation
and maintenance of research
facilities,
including assets at facilities that are engaged in pilot plant activities.
Foreign Currency Translation
For
all
significant
foreign
operations,
the
functional
currency
is
the
local
currency.
Assets
and
liabilities
of
these
operations
are
translated
at
the
period-end
exchange
rates.
Income
statement
accounts
are
translated
using
the
average
exchange
rates
prevailing
during the period. Translation
adjustments are reflected within
accumulated other comprehensive
loss (AOCI) in stockholders’
equity.
Gains
and
losses
from
foreign
currency
transactions
are
included
in
net
earnings
for
the
period,
except
for
gains
and
losses
on
investments
in
subsidiaries
for
which
settlement
is not
planned
for
the foreseeable
future and
foreign
exchange
gains and
losses
on
instruments designated as net investment hedges. These gains and losses are recorded
in AOCI.
Derivative Instruments
All derivatives are recognized
on our Consolidated
Balance Sheets at fair
value based on quoted
market prices or our
estimate of their
fair value,
and are
recorded in
either current
or noncurrent
assets or
liabilities based
on their
maturity.
Changes in
the fair
values of
derivatives are
recorded in
net earnings
or other
comprehensive income,
based on
whether the
instrument is
designated and
effective
as
a
hedge
transaction
and,
if
so,
the
type
of
hedge
transaction.
Gains
or
losses
on
derivative
instruments
reported
in
AOCI
are
reclassified
to
earnings
in
the
period
the
hedged
item
affects
earnings.
If
the
underlying
hedged
transaction
ceases
to
exist,
any
associated amounts
reported
in AOCI
are reclassified
to earnings
at that
time. Cash
flows from
derivative
instruments are
primarily
reported in cash flows from operating activities in our Consolidated
Statements of Cash Flows.
Stock-based Compensation
We generally
measure compensation expense for grants of restricted stock
units and performance share units using the value of
a share
of
our
stock
on
the
date
of
grant.
We
estimate
the
value
of
stock
option
grants
using
a
Black-Scholes
valuation
model.
Generally,
stock-based
compensation
is recognized
straight
line over
the
vesting
period.
Our stock-based
compensation
expense is
recorded
in
selling, general
,
and administrative
(SG&A) expenses
and cost
of sales
in our
Consolidated Statements
of Earnings
and allocated
to
each reportable segment in our segment results.
Certain equity-based compensation plans contain provisions
that accelerate vesting of awards upon retirement, termination,
or death of
eligible
employees
and
directors.
We
consider
a
stock-based
award
to
be vested
when
the employee’s
or
director’s
retention
of
the
award
is
no
longer
contingent
on
providing
subsequent
service.
Accordingly,
the
related
compensation
cost
for
awards
granted
to
retirement-eligible individuals is recognized from the grant date over
an accelerated stated vesting period.
We report the
benefits of tax deductions in excess of recognized compensation cost as an operating
cash flow.
Defined Benefit Pension, Other Postretirement Benefit, and Postemployment
Benefit Plans
We
sponsor
several domestic
and foreign
defined
benefit plans
to provide
pension, health
care, and
other welfare
benefits to
retired
employees. Under
certain circumstances,
we also
provide accruable
benefits, primarily
severance, to
former or
inactive employees
in
the
United
States,
Canada,
and
Mexico.
We
recognize
an
obligation
for
any
of
these
benefits
that
vest
or
accumulate
with
service.
Postemployment benefits
that do not
vest or
accumulate with
service (such
as severance
based solely
on annual pay
rather than
years
of service) are charged to expense when incurred. Our postemployment
benefit plans are unfunded.
We
recognize the underfunded
or overfunded status
of a defined
benefit pension plan
as an asset
or liability and
recognize changes
in
the funded status in the year in which the changes occur through AOCI.
Use of Estimates
Preparing
our
Consolidated
Financial
Statements
in
conformity
with
accounting
principles
generally
accepted
in
the
United
States
requires
us to
make estimates
and assumptions
that affect
reported amounts
of assets
and
liabilities, disclosures
of contingent
assets
and liabilities
at the
date of
the financial
statements, and
the reported
amounts of
revenues and
expenses during
the reporting
period.
These
estimates
include
our
accounting
for
revenue
recognition,
valuation
of
long-lived
assets, intangible
assets,
income
taxes,
and
defined benefit pension, other postretirement benefit and postemployment
benefit plans. Actual results could differ from our
estimates.
New Accounting Standards
In the
fourth quarter
of fiscal
2025,
we adopted
new accounting
requirements
related
to enhanced
segment disclosure
requirements.
The
new
standard
requires
disclosure
of
significant
segment
expenses
regularly
provided
to
the
chief
operating
decision
maker
(CODM) included within segment
operating profit or loss
as well as a description
of how the CODM utilizes
segment operating profit
or loss to assess segment performance.
We adopted
the requirements of the new standard using
a retrospective approach. The adoption
of
this
accounting
guidance
did
not
have
a
material
impact
on
our
results
of
operations
and
financial
position.
See
Note
to
the
consolidated Financial Statements for additional information on the
impact to our related disclosure.
In
the
first
quarter
of
fiscal
2024,
we
adopted
new
requirements
for
enhanced
disclosures
related
to
supplier
financing
programs,
except for the rollforward
requirement, which we adopted
in the fourth quarter of
fiscal 2025. The new
standard requires disclosure of
the key terms
of the program and
a rollforward of
the related obligation
during the annual
period, including the
amount of obligations
confirmed
and
obligations
subsequently
paid.
We
have
historically
presented
the
key
terms
of
these
programs
and
the
associated
obligation
outstanding.
The
adoption
of
this
guidance
did
not
have
a
material
impact
on
our
results
of
operations
and
financial
position. See Note 8 to the consolidated Financial Statements for additional
information on the impact to our related disclosure.
In the first quarter
of fiscal 2024, we
adopted optional accounting guidance
to ease the burden
in accounting for reference
rate reform.
The new
standard provides
temporary expedients
and exceptions
to existing
accounting requirements
for contract
modifications
and
hedge
accounting
related
to transitioning
from
discounted
reference
rates. This
resulted
in
modifying
contracts,
where necessary,
to
apply a new reference rate,
primarily SOFR. The adoption of
this accounting guidance did not
have a material impact on our results
of
operations and financial position.
NOTE 3. ACQUISITIONS AND DIVESTITURES
During
the
third
quarter
of
fiscal
2025,
we
acquired
NX
Pet
Holding,
Inc.,
representing
Whitebridge
Pet
Brands’
North
American
premium cat feeding
and pet treating
business, for a
purchase price of
$
1.4
billion (Whitebridge Pet
Brands acquisition). We
financed
the transaction
with cash
on hand
and new
debt. We
consolidated Whitebridge
Pet Brands
into our
Consolidated Balance
Sheets and
recorded goodwill of
$
1,086.7
million, an indefinite-lived
intangible asset for
the
Tiki Pets
brand totaling $
289.0
million, and a finite-
lived customer
relationship asset
of $
31.0
million. The
goodwill is
included in
the North
America Pet
segment and
is 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
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
those
items.
The
consolidated
results
are
reported
in
our
North America Pet operating segment on a one-month lag.
During
the
second
quarter
of
fiscal
2025,
we
entered
into
definitive
agreements
to
sell
our
North
American
yogurt
businesses
to
affiliates of Groupe Lactalis S.A. (Lactalis) and
Sodiaal International (Sodiaal) for approximately $
2.1
billion. During the third quarter
of
fiscal
2025,
we
completed
the
sale
of
our
Canada
yogurt
business
to
Sodiaal
and
recorded
a
pre-tax
gain
of
$
95.9
million.
Subsequent to the end of fiscal 2025, the regulatory review for the
sale of our United States yogurt business to Lactalis was completed,
and
the
transaction
was
cleared
to
close
subject
to
completion
of
other
customary
closing
conditions.
We
expect
to
close
the
transaction and
record a
pre-tax gain
on the
sale of
this business in
the first
quarter of
fiscal 2026.
We
have classified
relevant assets
and
liabilities
associated
with
our
United
States yogurt
business as
held
for
sale in
our Consolidated
Balance
Sheets
as of
May
25,
The components of assets held for sale and liabilities held for sale are as follows:
In Millions
May 25, 2025
Inventories
$
56.2
Prepaid expenses and other current assets
15.3
Land, buildings, and equipment
230.5
Goodwill
252.6
Other intangible assets
160.7
Other assets
25.1
Assets held for sale
$
740.4
Other current liabilities
$
8.9
Other liabilities
9.5
Liabilities held for sale
$
18.4
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
of
fiscal
2025,
we
paid
$
7.7
million
related
to
a
purchase price
holdback
after closing
conditions
were
met.
We
financed
the
transaction
with
cash
on
hand. We
consolidated
the
business
into
our
Consolidated
Balance Sheets
and
recorded
goodwill
of
$
317.5
million,
an
indefinite-lived
brand
intangible
asset
of
$
118.4
million
and
a
finite-lived
customer
relationship asset
of $
14.2
million. The
goodwill is
included in
the International
segment and
is not
deductible for
tax purposes.
The
pro forma effects
of this acquisition were
not material. The consolidated
results are reported
in our International operating
segment on
a one-month lag.
During
the first
quarter
of fiscal
2023,
we
acquired
TNT Crust,
a
manufacturer
of high-quality
frozen pizza
crusts
for
regional
and
national pizza
chains, foodservice
distributors, and
retail outlets,
for a
purchase price
of $
253.0
million. We
financed the
transaction
with U.S. commercial paper.
We consolidated
the TNT Crust business into
our Consolidated Balance Sheets
and recorded goodwill of
$
156.7
million. The
goodwill is
included in
the North
America Foodservice
segment and
is not
deductible for
tax purposes.
The pro
forma effects of this acquisition were not material.
During the
first quarter
of fiscal
2023,
we completed
the sale
of our
Helper main
meals and
Suddenly
Salad side
dishes business
to
Eagle Family Foods Group for $
606.8
million and recorded a pre-tax gain of $
442.2
million.
NOTE 4. RESTRUCTURING,
TRANSFORMATION,
IMPAIRMENT,
AND OTHER EXIT COSTS
INTANGIBLE ASSET
IMPAIRMENTS
In fiscal 2024, we
recorded a $
117.1
million non-cash goodwill impairment
charge related to
our Latin America reporting
unit. Please
see Note 6 for additional information.
In fiscal
2024, we
recorded $
103.1
million of
non-cash impairment
charges related
to our
Top
Chews
,
True
Chews
,
and
EPIC
brand
intangible assets. Please see Note 6 for additional information.
RESTRUCTURING AND TRANSFORMATION
INITIATIVES
We
view our
restructuring
and transformation
activities as
actions that
help us
meet our
long-term
growth
targets
and are
evaluated
against internal
rate of
return and
net present
value targets.
Each project
normally takes
one to
two years
to complete.
At completion
(or
as each
major
stage
is completed
in
the case
of multi-year
programs),
the project
begins
to
deliver
cash
savings and/or
reduced
depreciation. These activities result
in various restructuring and
transformation costs, including asset
write-offs, exit charges
including
severance,
contract
termination
fees,
and
decommissioning
and
other
costs.
Accelerated
depreciation
associated
with
restructured
assets, as
used in
the context
of our
disclosures regarding
restructuring activity,
refers to
the increase
in depreciation
expense caused
by shortening the
useful life or
updating the salvage
value of depreciable
fixed assets to
coincide with the
end of production
under an
approved project plan. Any impairment of the asset is recognized immediately
in the period the plan is approved.
Restructuring and transformation charges recorded
in fiscal 2025 were as follows:
In Millions
Global transformation initiative
$
70.1
Charges associated with restructuring actions previously
announced
17.4
Total restructuring
and transformation charges
$
87.5
In
fiscal
2025,
we
approved
a
multi-year
global
transformation
initiative
to
drive
increased
productivity
by
enhancing
end-to-end
business
processes,
enabled
by
targeted
organizational
actions.
We
expect
to
incur
approximately
$
million
of
transformation
charges related
to these actions, of
which approximately $
million will be
cash. These charges
are expected to
consist primarily of
severance and other benefit costs, as well
as other charges, including
consulting and professional fees. We
recognized $
68.7
million of
severance and
other benefit costs
and $
1.4
million of other
costs in
fiscal 2025
related to these
actions. We
expect these
actions to be
completed by the end of fiscal 2028.
In fiscal
2025, we
increased the
estimate of
restructuring charges
that we
expect to
incur related
to our previously
announced actions
in the International segment to optimize
our Häagen-Dazs shops network. As a result,
we expect to incur approximately $
million of
incremental
restructuring
charges
related
to
these
actions,
of
which,
approximately
$
million
will
be
cash.
These
incremental
charges are expected
to consist of approximately
$
million of asset write-offs,
$
million of severance, and
$
million of other costs.
We
expect to
incur total
restructuring charges
of approximately
$
million, of
which approximately
$
million will be
cash related
to these actions.
We expect these actions to
be completed by the end of fiscal 2026.
Certain actions are subject to union negotiations and works counsel consultations,
where required.
We paid
net $
13.2
million of cash related to
restructuring and transformation
actions in fiscal 2025.
We paid
net $
35.5
million of cash
in fiscal 2024.
Restructuring charges recorded in fiscal 2024 were
as follows:
In Millions
Commercial strategy actions
$
18.6
Charges associated with restructuring actions previously
announced
20.2
Total restructuring
charges
$
38.8
Restructuring charges recorded in fiscal 2023 were
as follows:
In Millions
Global supply chain actions
$
36.2
Network optimization actions
6.4
Charges associated with restructuring actions previously
announced
18.4
Total restructuring
charges
$
61.0
Restructuring,
transformation,
and
impairment
charges
and
restructuring
initiative
project-related
costs
are
classified
in
our
Consolidated Statements of Earnings as follows:
Fiscal Year
In Millions
2025
2024
2023
Restructuring, transformation, impairment, and other exit costs
$
78.3
$
241.4
$
56.2
Cost of sales
9.2
17.6
4.8
Total restructuring,
transformation, and impairment charges
87.5
259.0
61.0
Restructuring initiative project-related costs classified in cost of
sales
$
0.5
$
2.0
$
2.4
The roll forward of our restructuring, transformation, and other exit
cost reserves, included in other current liabilities, is as follows:
In Millions
Severance
Other Exit
Costs
Total
Reserve balance as of May 29, 2022
$
35.4
$
1.4
$
36.8
Fiscal 2023 charges, including foreign currency translation
41.6
0.1
41.7
Utilized in fiscal 2023
(29.4)
(1.4)
(30.8)
Reserve balance as of May 28, 2023
47.6
0.1
47.7
Fiscal 2024 charges, including foreign currency translation
-
0.1
0.1
Utilized in fiscal 2024
(32.8)
(0.2)
(33.0)
Reserve balance as of May 26, 2024
14.8
-
14.8
Fiscal 2025 charges, including foreign currency translation
70.1
-
70.1
Utilized in fiscal 2025
(7.8)
-
(7.8)
Reserve balance as of May 25, 2025
$
77.1
$
-
$
77.1
The charges
recognized in
the roll
forward of
our reserves
for restructuring,
transformation,
and other
exit costs do
not include
items
charged
directly
to
expense
(e.g.,
asset
impairment
charges,
the
gain
or
loss
on
the
sale
of
restructured
assets,
and
the
write-off
of
spare parts)
and other
periodic exit
costs recognized
as incurred,
as those
items are
not reflected
in our
restructuring, transformation,
and other exit cost reserves on our Consolidated Balance Sheets.
NOTE 5. INVESTMENTS IN UNCONSOLIDATED
JOINT VENTURES
We
have a
percent interest
in Cereal
Partners Worldwide
(CPW), which
manufactures and
markets ready-to-eat
cereal products
in
approximately
countries
outside
the
United
States
and
Canada.
CPW
also
markets
cereal
bars
in
European
countries
and
manufactures private label cereals for
customers in the United Kingdom.
We have
guaranteed a portion of CPW’s
debt and its pension
obligation in the United Kingdom.
We
also have
a
percent interest
in Häagen-Dazs
Japan, Inc.
(HDJ). This joint
venture manufactures
and markets
Häagen-Dazs
ice
cream products and frozen novelties.
Results from our CPW and HDJ joint ventures are reported for the
12 months
ended March 31.
Joint venture related balance sheet activity is as follows:
In Millions
May 25, 2025
May 26, 2024
Cumulative investments
$
431.8
$
368.9
Goodwill and other intangible assets
469.9
448.9
Aggregate advances included in cumulative investments
314.6
280.8
Joint venture earnings and cash flow activity is as follows:
Fiscal Year
In Millions
2025
2024
2023
Sales to joint ventures
$
7.8
$
4.8
$
5.8
Net (repayments) advances
(13.3)
2.7
32.2
Dividends received
44.6
50.4
69.9
Summary combined financial information for the joint ventures on
a 100 percent basis is as follows:
Fiscal Year
In Millions
2025
2024
2023
Net sales:
CPW
$
1,647.3
$
1,718.5
$
1,618.9
HDJ
323.1
319.3
338.5
Total net sales
1,970.4
2,037.8
1,957.4
Gross margin
686.8
672.2
667.7
Earnings before income taxes
89.4
145.2
169.3
Earnings after income taxes
61.5
119.9
126.9
In Millions
May 25, 2025
May 26, 2024
Current assets
$
751.0
$
777.4
Noncurrent assets
788.3
784.0
Current liabilities
1,314.1
1,310.6
Noncurrent liabilities
96.3
88.2
NOTE 6. GOODWILL AND OTHER INTANGIBLE
ASSETS
The components of goodwill and other intangible assets are as follows:
In Millions
May 25, 2025
May 26, 2024
Goodwill
$
15,622.4
$
14,750.7
Other intangible assets:
Intangible assets not subject to amortization:
Brands and other indefinite-lived intangibles
6,816.7
6,728.6
Intangible assets subject to amortization:
Customer relationships and other finite-lived intangibles
420.9
402.2
Less accumulated amortization
(156.2)
(150.9)
Intangible assets subject to amortization
264.7
251.3
Other intangible assets
7,081.4
6,979.9
Total
$
22,703.8
$
21,730.6
Based on
the carrying
value of
finite-lived intangible
assets as of
May 25,
2025, amortization
expense for
each of
the next five
fiscal
years is estimated to be approximately $
million.
The changes in the carrying amount of goodwill for fiscal 2023, 2024, and 2025
are as follows:
In Millions
North
America
Retail
North
America Pet
North
America
Foodservice
International
(a)
Corporate
and Joint
Ventures
Total
Balance as of May 29, 2022
$
6,552.9
$
6,062.8
$
648.8
$
721.6
$
392.4
$
14,378.5
Acquisition
-
-
156.8
-
-
156.8
Divestitures
(2.0)
-
-
(0.4)
-
(2.4)
Other activity, primarily
foreign
currency translation
(8.5)
-
-
(12.8)
(0.4)
(21.7)
Balance as of May 28, 2023
6,542.4
6,062.8
805.6
708.4
392.0
14,511.2
Acquisitions
-
-
-
318.1
26.9
345.0
Impairment charge
-
-
-
(117.1)
-
(117.1)
Other activity, primarily
foreign
currency translation
(0.5)
-
(0.1)
7.7
4.5
11.6
Balance as of May 26, 2024
6,541.9
6,062.8
805.5
917.1
423.4
14,750.7
Acquisition
-
1,086.7
-
-
-
1,086.7
Divestiture
(14.6)
-
-
-
-
(14.6)
Reclassified to assets held for sale
(202.6)
-
(50.0)
-
-
(252.6)
Other activity, primarily
foreign
currency translation
(1.2)
-
-
34.6
18.8
52.2
Balance as of May 25, 2025
$
6,323.5
$
7,149.5
$
755.5
$
951.7
$
442.2
$
15,622.4
(a)
The
carrying
amounts
of
goodwill
within
the
International
segment
as
of
May
26,
2024,
and
May
25,
2025,
were
net
of
accumulated impairment losses of $
117.1
million.
The changes in the carrying amount of other intangible assets for fiscal 2023, 2024, and
2025 are as follows:
In Millions
Total
Balance as of May 29, 2022
$
6,999.9
Acquisition
3.8
Divestiture
(3.6)
Other activity, primarily
amortization and foreign currency translation
(32.5)
Balance as of May 28, 2023
6,967.6
Acquisition
132.6
Impairment charges
(103.1)
Other activity, primarily
amortization and foreign currency translation
(17.2)
Balance as of May 26, 2024
6,979.9
Acquisition
320.0
Divestiture
(44.4)
Reclassified to assets held for sale
(160.7)
Other activity, primarily
amortization and foreign currency translation
(13.4)
Balance as of May 25, 2025
$
7,081.4
Our
annual
goodwill
and
indefinite-lived
intangible
assets
impairment
test
was
performed
on
the
first
day
of
the
second
quarter
of
fiscal
2025,
and
we
determined
there
was
no
impairment
of
our
intangible
assets
as
their
related
fair
values
were
substantially
in
excess of the
carrying values,
except for
the
Uncle Toby’s
brand intangible
asset. In addition,
while having
significant coverage
as of
our
fiscal
2025
assessment
date,
the
Progresso
,
Nudges
,
True
Chews
,
and
Kitano
brand
intangible
assets
had
risk
of
decreasing
coverage. We will continue
to monitor these businesses for potential impairment.
We did not
identify any indicators of impairment for all other goodwill and indefinite-lived
intangible assets as of May 25, 2025.
In fiscal
2024, as
a result
of lower
future profitability
projections for
our Latin
America reporting
unit, we
recorded a
$
117.1
million
non-cash
goodwill
impairment
charge.
In
addition,
as
a
result
of
lower
future
sales
and
profitability
projections
for
the
businesses
supporting
our
Top
Chews
,
True
Chews
,
and
EPIC
brand
intangible
assets,
we
recorded
$
103.1
million
of
non-cash
impairment
charges
in
fiscal
We
recorded
impairment
charges
in
restructuring, transformation, 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.
NOTE 7. LEASES
Our lease portfolio primarily
consists of operating lease
arrangements for certain
warehouse and distribution space,
office space, retail
shops,
production
facilities,
rail
cars,
production
and
distribution
equipment,
automobiles,
and
office
equipment.
Our
lease
costs
associated with finance
leases and
sale-leaseback transactions
and our
lease income associated
with lessor and
sublease arrangements
are not material to our Consolidated Financial Statements.
Components of our lease cost are as follows:
Fiscal Year
In Millions
2025
2024
2023
Operating lease cost
$
145.7
$
128.9
$
127.6
Variable
lease cost
7.5
8.9
6.1
Short-term lease cost
32.6
32.2
30.0
Maturities of our operating and finance lease obligations by fiscal year are
as follows:
In Millions
Operating Leases
Finance Leases
Fiscal 2026
$
134.0
$
-
Fiscal 2027
99.5
0.6
Fiscal 2028
78.7
0.4
Fiscal 2029
57.9
-
Fiscal 2030
31.6
-
After fiscal 2030
72.2
-
Total noncancelable
future lease obligations
$
473.9
$
1.0
Less: Interest
(55.8)
-
Present value of lease obligations
$
418.1
$
1.0
The
lease
payments
presented
in
the
table
above
exclude
$
82.5
million
of
minimum
lease
payments
for
operating
leases
we
have
committed to but have not yet commenced as of May 25, 2025.
The weighted-average remaining lease term and weighted-average
discount rate for our operating leases are as follows:
May 25, 2025
May 26, 2024
Weighted-average
remaining lease term
5.0
years
5.4
years
Weighted-average
discount rate
4.9
%
4.9
%
In addition, we had $
25.1
million of right of use assets and $
19.3
million of related lease liabilities classified as held for sale as of May
25, 2025.
Supplemental operating cash
flow information and non
-cash activity related to our
operating leases, including those
classified as held-
for-sale, are as follows:
Fiscal Year
In Millions
2025
2024
Cash paid for amounts included in the measurement of lease liabilities
$
152.7
$
129.7
Right of use assets obtained in exchange for new lease liabilities
$
163.4
$
139.8
NOTE 8. FINANCIAL INSTRUMENTS, RISK MANAGEMENT ACTIVITIES,
AND FAIR VALUES
FINANCIAL INSTRUMENTS
The
carrying
values
of
cash
and
cash
equivalents,
receivables,
accounts
payable,
other
current
liabilities,
and
notes
payable
approximate fair
value. Marketable
securities are
carried at
fair value.
As of
May 25,
2025, and
May 26,
2024, a
comparison of
cost
and market values of our marketable debt and equity securities is as follows:
Cost
Fair Value
Gross Unrealized Gains
Gross Unrealized Losses
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
In Millions
2025
2024
2025
2024
2025
2024
2025
2024
Available for
sale
debt securities
$
2.3
$
2.3
$
2.3
$
2.3
$
-
$
-
$
-
$
-
Equity securities
0.3
0.3
4.9
4.6
4.6
4.3
-
-
Total
$
2.6
$
2.6
$
7.2
$
6.9
$
4.6
$
4.3
$
-
$
-
There
were
no
net
realized
gains
or
losses
on
the
sale
of
marketable
securities
in
fiscal
Net
realized
losses
on
the
sale
of
marketable securities were $
7.6
million in fiscal 2024. Gains and losses are determined by specific identification.
Classification
of
marketable
securities
as
current
or
noncurrent
is
dependent
upon
our
intended
holding
period
and
the
security’s
maturity date. The
aggregate unrealized gains
and losses on available
for sale debt securities,
net of tax effects,
are classified in AOCI
within stockholders’ equity.
Scheduled maturities of our marketable securities are as follows:
Marketable Securities
In Millions
Cost
Fair Value
Under 1 year (current)
$
2.3
$
2.3
Equity securities
0.3
4.9
Total
$
2.6
$
7.2
As of May 25, 2025, we had $
2.3
million of marketable debt securities pledged as collateral for derivative contracts.
RISK MANAGEMENT ACTIVITIES
As a
part of
our ongoing
operations, we
are exposed
to market
risks such
as changes
in interest
and foreign
currency exchange
rates
and commodity and
equity prices. To
manage these risks, we
may enter into various
derivative transactions (e.g.,
futures, options, and
swaps) pursuant to our established policies.
COMMODITY PRICE RISK
Many commodities we
use in the
production and distribution
of our products
are exposed to
market price risks.
We
utilize derivatives
to manage price risk for our principal
ingredients and energy costs, including
grains (oats, wheat, and corn), oils
(principally soybean),
dairy products, natural
gas, and diesel fuel.
Our primary objective
when entering into
these derivative contracts
is to achieve
certainty
with
regard
to
the
future
price
of
commodities
purchased
for
use
in
our
supply
chain.
We
manage
our
exposures
through
a
combination of purchase orders, long-term
contracts with suppliers, exchange-traded
futures and options, and over-the-counter
options
and swaps.
We
offset
our exposures
based on
current and
projected market
conditions and
generally seek
to acquire
the inputs
at as
close as possible to or below our planned cost.
We
use derivatives
to manage
our exposure
to changes
in commodity
prices. We
do not
perform the
assessments required
to achieve
hedge accounting for
commodity derivative positions.
Accordingly,
the changes in
the values of
these derivatives are
recorded in
cost
of sales in our Consolidated Statements of Earnings.
Although we do
not meet the
criteria for
cash flow hedge
accounting, we believe
that these instruments
are effective
in achieving our
objective of providing certainty
in the future price of commodities purchased
for use in our supply chain.
Accordingly, for
purposes of
measuring
segment
operating
performance
these
gains
and
losses
are
reported
in
unallocated
corporate
items
outside
of
segment
operating results
until such time
that the exposure
we are managing
affects earnings.
At that time,
we reclassify
the gain or
loss from
unallocated
corporate
items
to
segment
operating
profit,
allowing
our
operating
segments
to
realize
the
economic
effects
of
the
derivative without experiencing any resulting mark-to-market volatility,
which remains in unallocated corporate items.
Unallocated corporate items for fiscal 2025, 2024, and 2023 included:
Fiscal Year
In Millions
2025
2024
2023
Net loss on mark-to-market valuation of commodity positions
$
(37.4)
$
(15.4)
$
(154.4)
Net loss (gain) on commodity positions reclassified from unallocated corporate
items to segment operating profit
52.8
40.0
(89.5)
Net mark-to-market revaluation of certain grain inventories
0.3
14.5
(48.0)
Net mark-to-market valuation of certain commodity positions recognized
in
unallocated corporate items
$
15.7
$
39.1
$
(291.9)
As
of
May
25,
2025,
the
net
notional
value
of
commodity
derivatives
was
$
227.1
million,
of
which
$
134.6
million
related
to
agricultural inputs and
$
92.5
million related to
energy inputs. These
contracts relate to
inputs that generally
will be utilized
within the
next
months.
INTEREST RATE RISK
We
are
exposed
to
interest
rate
volatility
with
regard
to
future
issuances
of
fixed-rate
debt,
and
existing
and
future
issuances
of
floating-rate debt. Primary exposures include U.S. Treasury
rates, SOFR, Euribor, and
commercial paper rates in the United States and
Europe.
We
use
interest
rate
swaps,
forward-starting
interest
rate
swaps,
and
treasury
locks
to
hedge
our
exposure
to
interest
rate
changes,
to
reduce
the
volatility
of
our
financing
costs,
and
to
achieve
a
desired
proportion
of
fixed-rate
versus
floating-rate
debt,
based
on
current
and
projected
market
conditions.
Generally
under
these
swaps,
we
agree
with
a
counterparty
to
exchange
the
difference between fixed-rate and floating-rate
interest amounts based on an agreed upon notional principal amount.
Floating Interest
Rate Exposures
— Floating-to-fixed
interest rate
swaps are
accounted for
as cash
flow hedges,
as are
all hedges
of
forecasted
issuances
of
debt.
Effectiveness
is
assessed
based
on
either
the
perfectly
effective
hypothetical
derivative
method
or
changes in the
present value of
interest payments on
the underlying debt.
Effective gains
and losses deferred
to AOCI are
reclassified
into earnings over the life of the associated debt.
Fixed
Interest
Rate
Exposures
—
Fixed-to-floating
interest
rate
swaps
are
accounted
for
as
fair
value
hedges
with
effectiveness
assessed
based
on
changes
in
the
fair
value
of
the
underlying
debt
and
derivatives,
using
incremental
borrowing
rates
currently
available on loans with similar terms and maturities.
During
the fourth
quarter of
fiscal 2025,
we entered
into a
€
750.0
million
notional amount
interest rate
swap to
convert
our
€
750.0
million fixed-rate notes due
April 17, 2032
, to a floating rate.
During the
second quarter of
fiscal 2025, in
advance of planned
debt financing,
we entered into
$
350.0
million of treasury
locks. The
treasury locks were terminated during the second quarter of fiscal
2025, in conjunction with the Company’s
issuance of $
750.0
million
of
fixed-rate
notes
due
January 30, 2035
.
Upon
termination,
a
gain
of $
0.1
million
was recognized
in AOCI
and
will be
amortized
through interest expense over the respective term of the debt.
During the
second quarter
of fiscal
2025, we
entered into
a $
750.0
million notional
amount interest
rate swap
to convert
our $
750.0
million of fixed-rate notes due
January 30, 2030
, to a floating rate.
During the second quarter of fiscal 2025, our
$
500.0
million notional amount interest rate swap to convert
our $
500.0
million of fixed-
rate notes due
November 18, 2025
to a floating
rate was called
by the counterparty
prior to the
maturity date. The
previously existing
swap was designated
as a fair value
hedge, and concurrent
with the swap
being called, we
ceased recording market
value adjustments
to the associated hedged debt.
During the
third quarter
of fiscal 2024,
in advance
of our
$
500.0
million debt
issuance, we
entered into
and settled
$
250.0
million of
treasury locks, resulting in a gain of $
0.3
million.
As of May 25,
2025,
the pre-tax amount
of cash-settled interest
rate hedge gain
or loss remaining
in AOCI, which
will be reclassified
to earnings over the remaining term of the related underlying debt, follows:
In Millions
Gain (Loss)
3.2
% notes due
February 10, 2027
$
2.9
1.5
% notes due
April 27, 2027
(0.6)
4.2
% notes due
April 17, 2028
(3.0)
3.907
% notes due
April 13, 2029
(3.4)
2.25
% notes due
October 14, 2031
12.6
4.95
% notes due
March 29, 2033
(1.1)
5.25
% notes due
January 30, 2035
0.1
4.55
% notes due
April 17, 2038
(7.0)
5.4
% notes due
June 15, 2040
(8.4)
4.15
% notes due
February 15, 2043
7.0
4.7
% notes due
April 17, 2048
(10.9)
Net pre-tax hedge loss in AOCI
$
(11.8)
The
following
table
summarizes
the
notional
amounts
and
weighted-average
interest
rates
of
our
interest
rate
derivatives.
Average
floating rates are based on rates as of the end of the reporting period.
In Millions, Except Average
Rate Data
May 25, 2025
May 26, 2024
Pay-floating swaps - notional amount
$
2,283.9
$
1,150.8
Average
receive rate
3.1
%
2.5
%
Average pay rate
4.0
%
4.9
%
As of May 25, 2025, the net notional amount and maturity dates of our floating-rate
swap contracts outstanding are as follows:
In Millions
Notional Amount
Fiscal 2026
$
681.7
Fiscal 2030
750.0
Fiscal 2032
852.2
Total
$
2,283.9
FOREIGN EXCHANGE RISK
Foreign currency
fluctuations affect
our net
investments in
foreign subsidiaries
and foreign
currency cash
flows related
to third
party
purchases,
intercompany
loans, product
shipments, and
foreign-denominated
debt.
We
are also
exposed
to the
translation of
foreign
currency
earnings
to
the
U.S.
dollar.
Our
principal
exposures
are
to
the
Australian
dollar,
Brazilian
real,
British
pound
sterling,
Canadian
dollar,
Chinese renminbi,
euro, Japanese
yen, Mexican
peso, and
Swiss franc.
We
primarily
use foreign
currency forward
contracts to selectively hedge our
foreign currency cash flow exposures.
We also
generally swap our foreign-denominated
commercial
paper
borrowings
and
nonfunctional
currency
intercompany
loans
back
to U.S.
dollars
or
the
functional
currency
of the
entity
with
foreign exchange exposure.
The gains or losses
on these derivatives offset
the foreign currency
revaluation gains or losses
recorded in
earnings on the associated borrowings. We
generally do not hedge more than 18 months in advance.
As of May 25, 2025, the net notional value of foreign exchange derivatives
was $
831.3
million.
We
also have
net investments
in foreign
subsidiaries that
are denominated
in euros.
We
hedged a portion
of these net
investments by
issuing
euro-denominated
commercial
paper
and
foreign
exchange
forward
contracts.
As of
May
25,
2025,
we
hedged
a
portion
of
these net
investments
with €
4,742.8
million of
euro denominated
bonds. As
of May
25, 2025,
we had
deferred
net foreign
currency
transaction losses of $
123.5
million in AOCI associated with net investment hedging activity.
EQUITY INSTRUMENTS
Equity
price
movements
affect
our
compensation
expense
as
certain
investments
made
by
our
employees
in
our
deferred
compensation plan
are revalued. We
use equity swaps
to manage this
risk. As of
May 25, 2025,
the net notional
amount and maturity
dates of our equity swap contracts outstanding are as follows:
In Millions
Notional Amount
Fiscal 2026
$
194.5
Fiscal 2027
8.2
Total
$
202.7
FAIR VALUE
MEASUREMENTS AND FINANCIAL STATEMENT
PRESENTATION
The
fair
values
of
our
assets,
liabilities,
and
derivative
positions
recorded
at
fair
value
and
their
respective
levels
in
the
fair
value
hierarchy as of May 25, 2025, and May 26, 2024, were as follows:
May 25, 2025
May 25, 2025
Fair Values
of Assets
Fair Values
of Liabilities
In Millions
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Derivatives designated as hedging instruments:
Interest rate contracts (a) (b)
$
-
$
5.0
$
-
$
5.0
$
-
$
(11.4)
$
-
$
(11.4)
Foreign exchange contracts (a) (c)
-
4.1
-
4.1
-
(13.5)
-
(13.5)
Total
-
9.1
-
9.1
-
(24.9)
-
(24.9)
Derivatives not designated as hedging
instruments:
Foreign exchange contracts (a) (c)
-
0.2
-
0.2
-
(1.3)
-
(1.3)
Commodity contracts (a) (d)
0.6
0.9
-
1.5
(0.2)
(7.4)
-
(7.6)
Grain contracts (a) (d)
-
2.2
-
2.2
-
(4.0)
-
(4.0)
Total
0.6
3.3
-
3.9
(0.2)
(12.7)
-
(12.9)
Other assets and liabilities reported at fair value:
Marketable investments (a) (e)
4.9
2.3
-
7.2
-
-
-
-
Long-lived assets (f)
-
2.0
-
2.0
-
-
-
-
Total
4.9
4.3
-
9.2
-
-
-
-
Total assets, liabilities, and
derivative positions
recorded at fair value
$
5.5
$
16.7
$
-
$
22.2
$
(0.2)
$
(37.6)
$
-
$
(37.8)
(a)
These contracts and investments
are recorded as prepaid
expenses and other current
assets, other assets, other
current liabilities or
other liabilities,
as appropriate,
based on
whether in
a gain
or loss
position. Certain
marketable investments
are recorded
as cash
and cash equivalents.
(b)
Based on
EURIBOR,
SOFR, and
swap rates.
As of
May 25, 2025,
the carrying
amount of
hedged debt
designated as
the hedged
item in a fair
value hedge was $
2,280.6
million, of which
$
675.6
million and $
1,605.0
million was classified
on the Consolidated
Balance
Sheets
within
current
portion
of
long-term
debt
and
long-term
debt,
respectively.
As of
May 25,
2025,
the
cumulative
amount of fair value hedging basis adjustments was $
3.2
million.
(c)
Based on observable market transactions of spot currency rates and forward
currency prices.
(d)
Based on prices of futures exchanges and recently reported transactions in the
marketplace.
(e)
Based on prices of common stock, mutual fund net asset values, and bond matrix
pricing.
(f)
We
recorded immaterial
non-cash impairment
charges in
fiscal 2025
to write
down certain
long-lived
assets to
their fair
value.
Fair
value
was based
on
recently
reported
transactions
for
similar
assets
in
the
marketplace.
These
assets
were
associated
with
previously announced restructuring actions described in Note 4.
May 26, 2024
May 26, 2024
Fair Values
of Assets
Fair Values
of Liabilities
In Millions
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Derivatives designated as hedging instruments:
Interest rate contracts (a) (b)
$
-
$
-
$
-
$
-
$
-
$
(39.8)
$
-
$
(39.8)
Foreign exchange contracts (a) (c)
-
5.7
-
5.7
-
(5.1)
-
(5.1)
Total
-
5.7
-
5.7
-
(44.9)
-
(44.9)
Derivatives not designated as hedging
instruments:
Foreign exchange contracts (a) (c)
-
-
-
-
-
(5.2)
-
(5.2)
Commodity contracts (a) (d)
2.1
1.1
-
3.2
-
(12.1)
-
(12.1)
Grain contracts (a) (d)
-
7.9
-
7.9
-
(6.5)
-
(6.5)
Total
2.1
9.0
-
11.1
-
(23.8)
-
(23.8)
Other assets and liabilities reported at fair value:
Marketable investments (a) (e)
4.6
2.3
-
6.9
-
-
-
-
Indefinite-lived intangible assets (f)
-
-
25.0
25.0
-
-
-
-
Total
4.6
2.3
25.0
31.9
-
-
-
-
Total assets, liabilities, and
derivative positions
recorded at fair value
$
6.7
$
17.0
$
25.0
$
48.7
$
-
$
(68.7)
$
-
$
(68.7)
(a)
These contracts and investments
are recorded as prepaid
expenses and other current
assets, other assets, other
current liabilities or
other liabilities,
as appropriate,
based on
whether in
a gain
or loss
position. Certain
marketable investments
are recorded
as cash
and cash equivalents.
(b)
Based on
EURIBOR,
SOFR, and
swap rates.
As of
May 26, 2024,
the carrying
amount of
hedged debt
designated as
the hedged
item in a
fair value hedge
was $
1,116.6
million and was
classified on the
Consolidated Balance Sheets
within long-term
debt. As
of May 26, 2024, the cumulative amount of fair value hedging basis adjustments
was $
34.2
million.
(c)
Based on observable market transactions of spot currency rates and forward
currency prices.
(d)
Based on prices of futures exchanges and recently reported transactions in the
marketplace.
(e)
Based on prices of common stock, mutual fund net asset values, and bond matrix pricing.
(f)
See Note 6.
We did not
significantly change our valuation techniques from prior periods.
The
fair value
of our
long-term
debt
is estimated
using
Level 2
inputs based
on quoted
prices
for
those
instruments. Where
quoted
prices are not available, fair value is estimated using
discounted cash flows and market-based expectations
for interest rates, credit risk
and
the
contractual
terms
of
the
debt
instruments.
As
of
May
25,
2025,
the
fair
value
and
carrying
amount
of
our
long-term
debt,
including the
current portion,
were $
13,579.5
million and
$
14,201.6
million, respectively.
As of
May 26,
2024, the
carrying amount
and fair value of our long-term debt, including the current portion, were
$
12,148.7
million and $
12,918.3
million, respectively.
Information
related
to our
cash flow
hedges,
fair value
hedges, and
other
derivatives
not designated
as hedging
instruments for
the
fiscal years ended May 25, 2025, and May 26, 2024, follows:
Interest Rate
Contracts
Foreign
Exchange
Contracts
Equity
Contracts
Commodity
Contracts
Total
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
In Millions
2025
2024
2025
2024
2025
2024
2025
2024
2025
2024
Derivatives in Cash Flow Hedging
Relationships:
Amount of gain (loss) recognized in
other comprehensive income (OCI)
$
0.1
$
-
$
(8.1)
$
(4.3)
$
-
$
-
$
-
$
-
$
(8.0)
$
(4.3)
Amount of net (loss) gain reclassified
from AOCI into earnings (a)
(0.2)
0.9
2.5
3.2
-
-
-
-
2.3
4.1
Amount of net gain recognized in
earnings (b)
-
0.3
-
-
-
-
-
-
-
0.3
Derivatives in Fair Value
Hedging
Relationships:
Amount of net gain (loss) recognized
in earnings (b)
3.0
(0.2)
-
-
-
-
-
-
3.0
(0.2)
Derivatives Not Designated as
Hedging Instruments:
Amount of net (loss) gain recognized
in earnings (c)
$
-
$
-
$
(16.0)
$
(8.5)
$
6.3
$
21.6
$
(22.0)
$
15.1
$
(31.7)
$
28.2
(a)
(Loss) gain reclassified
from AOCI into earnings
is reported in interest,
net for interest rate
swaps and in cost
of sales and SG&A
expenses for foreign
exchange contracts. For the
fiscal year ended May 25,
2025, the amount of
gain reclassified from AOCI
into
cost of sales
was $
12.7
million and
the amount of
loss reclassified from
AOCI into SG&A
was $
10.2
million. For
the fiscal year
ended
May 26,
2024,
the
amount
of
gain
reclassified
from
AOCI
into
cost
of
sales
was
$
7.0
million
and
the
amount
of
loss
reclassified from AOCI into SG&A was $
3.8
million.
(b)
Gain (loss) recognized in earnings is reported in interest, net for interest rate
contracts.
(c)
(Loss) gain recognized in
earnings is reported in SG&A
and after-tax earnings from
joint ventures for foreign
exchange contracts,
SG&A for equity contracts, and cost of sales for commodity contracts.
The following
tables reconcile
the net
fair values
of assets
and
liabilities subject
to offsetting
arrangements
that are
recorded
in our
Consolidated Balance Sheets to the net fair values that could be reported
in our Consolidated Balance Sheets:
May 25, 2025
Assets
Liabilities
Gross Amounts Not Offset
in the Balance Sheet (d)
Gross Amounts Not Offset
in the Balance Sheet (d)
In Millions
Gross
Amounts of
Recognized
Assets
Gross
Liabilities
Offset in the
Balance Sheet
Net Amounts
of Assets
(a)
Financial
Instruments
Cash
Collateral
Received
Net Amount
(b)
Gross
Amounts of
Recognized
Liabilities
Gross Assets
Offset in the
Balance Sheet
Net Amounts
of Liabilities
(a)
Financial
Instruments
Cash
Collateral
Pledged
Net Amount
(c)
Commodity contracts
$
1.5
$
-
$
1.5
$
(1.0)
$
-
$
0.5
$
(7.6)
$
-
$
(7.6)
$
1.0
$
-
$
(6.6)
Interest rate contracts
4.6
-
4.6
(2.2)
-
2.4
(18.3)
-
(18.3)
2.2
-
(16.1)
Foreign exchange contracts
4.3
-
4.3
(3.8)
-
0.5
(14.8)
-
(14.8)
3.8
-
(11.0)
Equity contracts
3.8
-
3.8
(1.0)
-
2.8
(1.0)
-
(1.0)
1.0
-
-
Total
$
14.2
$
-
$
14.2
$
(8.0)
$
-
$
6.2
$
(41.7)
$
-
$
(41.7)
$
8.0
$
-
$
(33.7)
(a)
Net fair value as recorded in our Consolidated Balance Sheets.
(b)
Fair value of assets that could be reported net in our Consolidated Balance Sheets.
(c)
Fair value of liabilities that could be reported net in our Consolidated Balance Sheets.
(d)
Fair value of assets and liabilities reported on a gross basis in our Consolidated Balance Sheets.
May 26, 2024
Assets
Liabilities
Gross Amounts Not Offset
in the Balance Sheet (e)
Gross Amounts Not Offset
in the Balance Sheet (e)
In Millions
Gross
Amounts of
Recognized
Assets
Gross
Liabilities
Offset in the
Balance
Sheet (a)
Net
Amounts of
Assets
(b)
Financial
Instruments
Cash
Collateral
Received
Net Amount
(c)
Gross
Amounts of
Recognized
Liabilities
Gross
Assets
Offset in the
Balance
Sheet (a)
Net
Amounts of
Liabilities
(b)
Financial
Instruments
Cash
Collateral
Pledged
Net Amount
(d)
Commodity contracts
$
3.2
$
-
$
3.2
$
(3.2)
$
-
$
-
$
(12.1)
$
-
$
(12.1)
$
3.2
$
3.5
$
(5.4)
Interest rate contracts
-
-
-
-
-
-
(49.4)
-
(49.4)
-
26.3
(23.1)
Foreign exchange contracts
5.7
-
5.7
(3.9)
-
1.8
(10.3)
-
(10.3)
3.9
-
(6.4)
Equity contracts
4.4
-
4.4
-
-
4.4
(0.2)
-
(0.2)
-
-
(0.2)
Total
$
13.3
$
-
$
13.3
$
(7.1)
$
-
$
6.2
$
(72.0)
$
-
$
(72.0)
$
7.1
$
29.8
$
(35.1)
(a)
Includes related collateral offset in our Consolidated Balance Sheets.
(b)
Net fair value as recorded in our Consolidated Balance Sheets.
(c)
Fair value of assets that could be reported net in our Consolidated Balance Sheets.
(d)
Fair value of liabilities that could be reported net in our Consolidated Balance Sheets.
(e)
Fair value of assets and liabilities reported on a gross basis in our Consolidated Balance Sheets.
AMOUNTS RECORDED IN ACCUMULATED
OTHER COMPREHENSIVE LOSS
As of May 25, 2025, the after-tax amounts of unrealized
losses in AOCI related to hedge derivatives follows:
In Millions
After-Tax
Loss
Unrealized loss from interest rate cash flow hedges
$
(7.1)
Unrealized loss from foreign currency cash flow hedges
(0.3)
After-tax loss in AOCI related to hedge derivatives
$
(7.4)
The net amount
of pre-tax gains and
losses in AOCI as
of May 25,
2025, that we expect
to be reclassified
into net earnings
within the
next 12 months is a $
2.1
million net gain.
CREDIT-RISK-RELATED
CONTINGENT FEATURES
Certain of our
derivative instruments contain
provisions that require
us to maintain an
investment grade credit rating
on our debt
from
each
of
the
major
credit
rating
agencies.
If
our
debt
were
to
fall
below
investment
grade,
the
counterparties
to
the
derivative
instruments
could
request
full
collateralization
on
derivative
instruments
in
net
liability
positions.
The
aggregate
fair
value
of
all
derivative instruments with credit-risk-related
contingent features that were in
a liability position on May
25, 2025, was $
24.8
million.
We have
posted no collateral under
these contracts. If the credit-risk-related
contingent features underlying these
agreements had been
triggered on May 25, 2025, we would have been required to post $
24.8
million of collateral to counterparties.
CONCENTRATIONS OF
CREDIT AND COUNTERPARTY
CREDIT RISK
During fiscal 2025, customer concentration was as follows:
Percent of total
Consolidated
North America
Retail
North America
Foodservice
International
North America
Pet
Walmart (a):
Net sales
%
%
%
%
%
Accounts receivable
%
%
%
%
Five largest customers:
Net sales
%
%
%
%
(a)
Includes Walmart Inc.
and its affiliates.
No customer other than Walmart
accounted for
percent or more of our consolidated net sales.
We
enter
into
interest
rate,
foreign
exchange,
and
certain
commodity
and
equity
derivatives,
primarily
with
a
diversified
group
of
highly rated
counterparties. We
continually monitor
our positions and
the credit ratings
of the counterparties
involved and,
by policy,
limit
the
amount
of
credit
exposure
to
any
one
party.
These
transactions
may
expose
us
to
potential
losses
due
to
the
risk
of
nonperformance
by
these
counterparties;
however,
we
have
not
incurred
a
material
loss.
We
also
enter
into
commodity
futures
transactions through various regulated exchanges.
The amount
of loss due
to the credit
risk of the
counterparties, should
the counterparties
fail to
perform according
to the terms
of the
contracts,
is $
6.3
million. We
have
no
collateral
held against
these contracts.
Under the
terms of
our swap
agreements,
some of
our
transactions
require
collateral
or
other
security
to
support
financial
instruments
subject
to
threshold
levels
of
exposure
and
counterparty
credit
risk.
Collateral
assets
are
either
cash
or
U.S.
Treasury
instruments
and
are
held
in
a
trust
account
that
we
may
access if the counterparty defaults.
We
offer
certain
suppliers
access
to
third-party
services
that
allow
them
to
view
our
scheduled
payments
online.
The
third-party
services also
allow suppliers
to finance
advances on
our scheduled
payments at
the sole
discretion of
the supplier
and the third
party.
We
have no
economic interest
in these
financing arrangements
and no
direct relationship
with the
suppliers, the
third parties,
or any
financial institutions
concerning these
services, including
not providing
any form
of guarantee
and not
pledging assets
as security
to
the third
parties or
financial institutions.
All of
our accounts
payable remain
as obligations
to our
suppliers as
stated in
our supplier
agreements.
The
roll
forward
of
our
obligations,
included
in
accounts payable
,
payable
to
suppliers
who
utilize
these
third-party
services
is
as
follows:
In Millions
Total
Balance as of May 26, 2024
$
1,404.4
Additions, including foreign currency translation
4,116.8
Payments
(4,093.7)
Balance as of May 25, 2025
$
1,427.5
NOTE 9. DEBT
NOTES PAYABLE
The components of notes payable and their respective weighted-average
interest rates at the end of the periods were as follows:
May 25, 2025
May 26, 2024
In Millions
Notes Payable
Weighted-
Average
Interest Rate
Notes Payable
Weighted-
Average
Interest Rate
U.S. commercial paper
$
669.4
4.5
%
$
-
-
%
Financial institutions
7.6
5.8
11.8
8.8
Total
$
677.0
4.5
%
$
11.8
8.8
%
To ensure availability
of funds, we maintain bank credit lines and have commercial paper programs
available to us in the United States
and Europe.
The following table details the credit facilities and lines of credit we had available
as of May 25, 2025:
In Millions
Borrowing
Capacity
Borrowed
Amount
Committed credit facility expiring October 2029
$
2,700.0
$
-
Uncommitted credit facilities and lines of credit
703.7
7.6
Total
$
3,403.7
$
7.6
In
the
second
quarter
of fiscal
2025,
we
entered
into
a
$
2.7
billion
fee-paid
committed
credit
facility
that
is
scheduled
to
expire
in
October 2029. Concurrent with the execution of this credit facility,
we terminated our existing $
2.7
billion credit facility.
The
credit
facilities
contain
covenants,
including
a
requirement
to
maintain
a
fixed
charge
coverage
ratio
of
at
least
2.5
times.
We
were in compliance with all credit facility covenants as of May 25, 2025.
LONG-TERM DEBT
In
the
fourth
quarter
of
fiscal
2025,
we
issued
€
750.0
million
of
3.6
percent
fixed-rate
notes
due
April 17, 2032
.
We
used
the
net
proceeds
to
repay
$
800.0
million
of
4.0
percent
fixed-rate
notes
due
April 17, 2025
and
a
portion
of
our
outstanding
commercial
paper, as well as for general corporate
purposes.
In the third
quarter of fiscal 2025,
we repaid $
500.0
million of
5.241
percent fixed-rate notes
due
November 18, 2025
, using proceeds
from the issuance of commercial paper.
In the second quarter of
fiscal 2025, we issued $
750.0
million of
4.875
percent fixed-rate notes due
January 30, 2030
. We
used the net
proceeds to fund the Whitebridge Pet Brands acquisition.
In the second
quarter of fiscal
2025, we issued
$
750.0
million of
5.25
percent fixed-rate notes
due
January 30, 2035
. We
used the net
proceeds to fund the Whitebridge Pet Brands acquisition.
In the
second quarter
of fiscal
2025, we
issued €
250.0
million of
floating-rate notes
due
April 22, 2026
. We
used the
net proceeds
to
repay €
250.0
million of floating-rate notes due
November 8, 2024
.
In the
second quarter
of fiscal
2025, we
issued €
500.0
million of
floating-rate notes
due
October 22, 2026
. We
used the
net proceeds
to repay €
500.0
million of floating-rate notes due
November 8, 2024
.
In the
fourth quarter
of fiscal 2024,
we issued €
500.0
million of
3.65
percent fixed-rate
notes due
October 23, 2030
. We
used the
net
proceeds for general corporate purposes.
In
the fourth
quarter
of fiscal
2024,
we issued
€
500.0
million
of
3.85
percent
fixed-rate notes
due
April 23, 2034
.
We
used
the net
proceeds for general corporate purposes.
In
the
third
quarter of
fiscal
2024,
we
issued
$
500.0
million
of
4.7
percent
fixed-rate
notes due
January 30, 2027
. We
used
the
net
proceeds to repay $
500.0
million of
3.65
percent fixed-rate notes due
February 15, 2024
.
In the second
quarter of fiscal 2024,
we issued €
250.0
million of floating-rate
notes due
November 8, 2024
. We
used the net proceeds
to repay €
250.0
million of floating-rate notes due
November 10, 2023
.
In the
second quarter
of fiscal
2024, we
issued $
500.0
million of
5.5
percent fixed-rate
notes due
October 17, 2028
. We
used the
net
proceeds to repay $
400.0
million of floating-rate notes due
October 17, 2023
, and for general corporate purposes.
In the first
quarter of fiscal
2024, we issued
€
500.0
million of floating-rate
notes due
November 8, 2024
. We
used the net proceeds
to
repay €
500.0
million of floating-rate notes due
July 27, 2023
.
A summary of our long-term debt is as follows:
In Millions, Except Weighted-Average
Interest Data
Weighted-Average
Interest Rate (a)
May 25, 2025
May 26, 2024
Notes due fiscal 2025
-
%
$
-
$
1,613.5
Notes due fiscal 2026
0.8
1,533.9
1,693.2
Notes due fiscal 2027
3.1
2,276.5
1,687.8
Notes due fiscal 2028
4.2
1,400.0
1,400.0
Notes due fiscal 2029
4.5
1,352.2
1,313.5
Notes due fiscal 2030
3.9
1,500.0
750.0
Notes due fiscal 2031 - 2051
4.1
6,389.7
4,736.1
Net impact of unamortized debt discounts, debt issuance
costs, interest rate swaps, and finance leases
(250.7)
(275.8)
14,201.6
12,918.3
Less amount due within one year
(1,528.4)
(1,614.1)
Total long-term debt
$
12,673.2
$
11,304.2
(a)
Weighted average
interest rates as of May 25, 2025.
The following table details the currency of our outstanding bonds:
In Millions
May 25, 2025
May 26, 2024
US Dollar
$
9,055.3
$
8,855.3
Euro
$
5,397.0
$
4,338.8
Certain of our
long-term debt agreements
contain restrictive
covenants.
As of May 25, 2025, we were in compliance with all of these
covenants.
The $
11.8
million pre-tax loss recorded in AOCI as of May 25, 2025 associated
with our previously designated interest rate swaps will
be reclassified
to net
interest over
the remaining
lives of
the hedged
transactions. The
amount expected
to be reclassified
from AOCI
to net interest in fiscal 2026 is a $
0.1
million pre-tax gain.
NOTE 10. NONCONTROLLING INTERESTS
Our principal noncontrolling
interest related to our General
Mills Cereals, LLC (GMC)
subsidiary. The
third-party holder of the GMC
Class
A
limited
membership
interests (GMC
Class
A
Interests)
received
quarterly
preferred
distributions
from
available
net
income
based on the
application of a floating
preferred return rate
to the holder’s
capital account balance
established in the
most recent mark-
to-market valuation.
On June 1,
2024, the floating
preferred return
rate was reset
to the sum
of the
three-month Term SOFR
plus
basis points.
During the
fourth quarter
of fiscal 2025,
we purchased
the outstanding
GMC Class A
Interests from
the third-party
holder for
$
252.8
million. The purchase
price reflected the
GMC Class A Interests’
original capital account balance
of $
242.3
million and $
10.5
million
primarily
related
to
capital
account
appreciation
attributable
and
paid
to
the
third-party
holder
of
the
Class
A
Interests.
The
capital
appreciation paid to the third-party holder of the Class A Interests was recorded
as a direct reduction to retained earnings, a component
of stockholders’
equity,
on the Consolidated
Balance Sheets, and
reduced net earnings
available to common
stockholders in our
basic
and diluted earnings per share (EPS) calculations.
For
financial
reporting
purposes,
the
assets,
liabilities,
results
of
operations,
and
cash
flows
of
our
non-wholly
owned
consolidated
subsidiaries
are
included
in
our
Consolidated
Financial
Statements.
The
third-party
investor’s
share
of
the
net
earnings
of
these
subsidiaries is reflected in net earnings attributable to noncontrolling
interests in our Consolidated Statements of Earnings.
NOTE 11. STOCKHOLDERS’
EQUITY
Cumulative preference stock of
5.0
million shares, without par value, is authorized but unissued.
On June 27, 2022, our Board of Directors authorized the
repurchase of up to
million shares of our common stock. Purchases under
the authorization
can be
made in
the open
market or
in privately
negotiated
transactions, including
the use
of call
options and
other
derivative
instruments,
Rule
10b5-1
trading
plans,
and
accelerated
repurchase
programs.
The
authorization
has
no
specified
termination date.
Share repurchases were as follows:
Fiscal Year
In Millions
2025
2024
2023
Shares of common stock
18.7
29.2
18.0
Aggregate purchase price
$
1,213.5
$
2,021.2
$
1,403.6
The following tables provide details of total comprehensive income:
Fiscal 2025
General Mills
Noncontrolling
Interests
In Millions
Pretax
Tax
Net
Net
Net earnings, including earnings attributable to
noncontrolling interests
$
2,295.2
$
23.7
Other comprehensive (loss) income:
Foreign currency translation
$
(161.9)
$
46.6
(115.3)
0.4
Net actuarial gain
21.3
(4.1)
17.2
-
Other fair value changes:
Hedge derivatives
(8.0)
0.6
(7.4)
-
Reclassification to earnings:
Foreign currency translation (a)
33.9
-
33.9
-
Hedge derivatives (b)
(2.3)
2.1
(0.2)
-
Amortization of losses and prior service costs (c)
58.1
(11.6)
46.5
-
Other comprehensive (loss) income
$
(58.9)
$
33.6
(25.3)
0.4
Total comprehensive
income
$
2,269.9
$
24.1
(a)
Loss reclassified from AOCI into earnings is reported in divestitures gain, net.
(b)
Gain reclassified
from AOCI
into earnings
is reported
in interest,
net for
interest rate
swaps and
in cost
of sales
and SG&A
expenses for foreign exchange contracts.
(c)
Loss reclassified from AOCI into earnings is reported in benefit plan non-service
income.
Fiscal 2024
General Mills
Noncontrolling
Interests
In Millions
Pretax
Tax
Net
Net
Net earnings, including earnings attributable to
noncontrolling interests
$
2,496.6
$
22.0
Other comprehensive (loss) income:
Foreign currency translation
$
(98.4)
$
11.7
(86.7)
0.1
Net actuarial loss
(239.4)
52.3
(187.1)
-
Other fair value changes:
Hedge derivatives
(4.4)
1.2
(3.2)
-
Reclassification to earnings:
Hedge derivatives (a)
(4.1)
1.6
(2.5)
-
Amortization of losses and prior service costs (b)
46.5
(9.8)
36.7
-
Other comprehensive (loss) income
$
(299.8)
$
57.0
(242.8)
0.1
Total comprehensive
income
$
2,253.8
$
22.1
(a)
Gain reclassified
from AOCI
into earnings
is reported
in interest,
net for
interest rate
swaps and
in cost
of sales
and SG&A
expenses for foreign exchange contracts.
(b)
Loss reclassified from AOCI into earnings is reported in benefit plan non-service
income.
Fiscal 2023
General Mills
Noncontrolling
Interests
In Millions
Pretax
Tax
Net
Net
Net earnings, including earnings attributable to
noncontrolling interests
$
2,593.9
$
15.7
Other comprehensive (loss) income:
Foreign currency translation
$
(110.2)
$
(0.3)
(110.5)
(0.3)
Net actuarial loss
(295.5)
67.5
(228.0)
-
Other fair value changes:
Hedge derivatives
3.8
(2.5)
1.3
-
Reclassification to earnings:
Foreign currency translation (a)
(7.4)
-
(7.4)
-
Hedge derivatives (b)
(24.7)
6.0
(18.7)
-
Amortization of losses and prior service costs (c)
72.9
(16.0)
56.9
-
Other comprehensive loss
$
(361.1)
$
54.7
(306.4)
(0.3)
Total comprehensive
income
$
2,287.5
$
15.4
(a)
Gain reclassified from AOCI into earnings is reported in divestitures gain,
net.
(b)
Gain reclassified
from AOCI
into earnings
is reported
in interest,
net for
interest rate
swaps and
in cost
of sales
and SG&A
expenses for foreign exchange contracts.
(c)
Loss reclassified from AOCI into earnings is reported in benefit plan non-service
income.
In
fiscal
2025,
2024,
and
2023,
except
for
certain
reclassifications
to
earnings,
changes
in other
comprehensive
(loss) income
were
primarily non-cash items.
Accumulated other comprehensive loss balances, net of tax effects,
were as follows:
In Millions
May 25, 2025
May 26, 2024
Foreign currency translation adjustments
$
(876.7)
$
(795.3)
Unrealized (loss) gain
from hedge derivatives
(7.4)
0.2
Pension, other postretirement, and postemployment benefits:
Net actuarial loss
(1,726.8)
(1,806.3)
Prior service credits
65.9
81.7
Accumulated other comprehensive loss
$
(2,545.0)
$
(2,519.7)
NOTE 12. STOCK PLANS
We
use broad-based stock
plans to help
ensure that management’s
interests are aligned
with those of
our shareholders. As
of May 25,
2025,
a total
of
29.5
million shares
were available
for grant
in the
form of
stock options,
restricted
stock, restricted
stock units,
and
shares
of unrestricted
stock under
the 2022
Stock Compensation
Plan
(2022
Plan). The
2022
Plan
also provides
for
the issuance
of
cash-settled
share-based
units, stock
appreciation
rights, and
performance-based
stock awards.
Stock-based
awards now
outstanding
include
some
granted
under
the
2017
Stock
Compensation
Plan,
under
which
no
further
awards
may
be
granted.
The
stock
plans
provide for potential accelerated vesting of awards upon retirement,
termination, or death of eligible employees and directors.
Stock Options
The
estimated
fair
values
of
stock
options
granted
and
the
assumptions
used
for
the
Black-Scholes
option-pricing
model
were
as
follows:
Fiscal Year
2025
2024
2023
Estimated fair values of stock options granted
$
13.26
$
17.47
$
14.16
Assumptions:
Risk-free interest rate
4.5
%
4.0
%
3.3
%
Expected term
8.5
years
8.5
years
8.5
years
Expected volatility
21.6
%
21.5
%
20.9
%
Dividend yield
3.8
%
2.8
%
3.1
%
We
estimate the
fair value
of each
option on
the grant
date using
a Black-Scholes
option-pricing
model, which
requires us
to make
predictive assumptions
regarding future
stock price volatility,
employee exercise
behavior, dividend
yield, and
the forfeiture
rate. We
estimate our future
stock price volatility
using the historical
volatility over
the expected term
of the option,
excluding time
periods of
volatility we believe a marketplace participant would
exclude in estimating our stock price volatility.
We also have
considered, but did
not use, implied
volatility in our estimate,
because trading activity in
options on our stock,
especially those with
tenors of greater than
6 months, is insufficient to provide a reliable measure of expected volatility.
Our
expected
term
represents
the
period
of
time
that
options
granted
are
expected
to
be
outstanding
based
on
historical
data
to
estimate option exercises and employee
terminations within the valuation
model. Separate groups of employees
have similar historical
exercise behavior and therefore
were aggregated into a
single pool for valuation
purposes. The weighted-average expected
term for all
employee groups is presented in the table
above. The risk-free interest rate for
periods during the expected term of
the options is based
on the U.S. Treasury zero-coupon yield curve in
effect at the time of grant.
Any corporate
income tax
benefit realized
upon exercise
or vesting
of an
award in
excess of
that previously
recognized in
earnings
(referred to
as a
windfall tax
benefit) is
presented in
our Consolidated
Statements of
Cash Flows
as an
operating cash
flow.
Realized
windfall
tax
benefits
and
shortfall
tax
deficiencies
related
to
the
exercise
or
vesting
of
stock-based
awards
are
recognized
in
the
Consolidated Statements
of Earnings.
Windfall tax benefits from stock-based payments
in income tax expense in our Consolidated Statements of Earnings were as follows:
Fiscal Year
In Millions
2025
2024
2023
Windfall tax benefits from stock-based payments
$
5.3
$
10.2
$
32.3
Under the 2022 Plan,
options may be priced
at
percent or more of the
fair market value on the
date of grant, generally issued
with
four-year
graded vesting or
four-year
cliff vesting. Options
generally expire within
10 years and one month
after the date of
grant. As
of May 25, 2025, stock option awards outstanding include some granted under
the 2017 Stock Compensation Plan.
Information on stock option activity follows:
Options
Outstanding
(Thousands)
Weighted-Average
Exercise Price Per
Share
Weighted-Average
Remaining
Contractual Term
(Years)
Aggregate Intrinsic
Value (Millions)
Balance as of May 26, 2024
12,044.4
$
59.19
5.0
$
120.5
Granted
1,322.3
63.51
Exercised
(780.9)
54.57
Forfeited or expired
(152.2)
67.29
Outstanding as of May 25, 2025
12,433.6
$
59.84
4.7
$
14.4
Exercisable as of May 25, 2025
8,071.6
$
56.31
3.1
$
14.4
Stock-based compensation expense related to stock option awards was as follows:
Fiscal Year
In Millions
2025
2024
2023
Compensation expense related to stock option awards
$
15.8
$
13.9
$
12.3
Net
cash
proceeds
from
the
exercise
of
stock
options
less
shares
used
for
minimum
withholding
taxes
and
the
intrinsic
value
of
options exercised were as follows:
Fiscal Year
In Millions
2025
2024
2023
Net cash proceeds
$
43.0
$
25.5
$
232.3
Intrinsic value of options exercised
$
11.7
$
7.6
$
118.7
Restricted Stock, Restricted Stock Units, and Performance Share
Units
Stock
and
units
settled
in
stock
subject
to
a
restricted
period
and
a
purchase
price,
if
any
(as
determined
by
the
Compensation
Committee of
the Board
of Directors),
may be
granted to
key employees
under the
2022 Plan.
Under the
2022 Plan,
restricted stock
and
restricted
stock
units
are
generally
issued
with
four-year
graded
vesting
or
four-year
cliff
vesting.
Performance
share
units
are
earned primarily
based on
our future
achievement of
three-year goals
for average
organic net
sales growth
and cumulative
operating
cash
flow
and
a
relative
total
shareholder
return
modifier.
Performance
share
units
are
settled
in
common
stock
and
are
generally
subject
to
a
three-year
performance
and
vesting
period.
The
sale
or
transfer
of
these
awards
is
restricted
during
the
vesting
period.
Participants holding restricted stock,
but not restricted stock units
or performance share units, are
entitled to vote on
matters submitted
to
holders
of
common
stock
for
a
vote.
These
awards
accumulate
dividends
from
the
date
of
grant,
but
participants
only
receive
payment
if the
awards vest.
As of
May 25,
2025,
restricted stock
units and
performance share
units include
some granted
under the
2017 Stock Compensation Plan.
Information on restricted stock unit and performance share unit activity
follows:
Equity Classified
Liability Classified
Share-Settled Units
(Thousands)
Weighted-Average
Grant-Date Fair
Value
Share-Settled Units
(Thousands)
Weighted-Average
Grant-Date Fair
Value
Non-vested as of May 26, 2024
4,590.1
$
66.94
69.1
$
67.49
Granted
1,671.8
63.37
26.2
63.27
Vested
(1,768.0)
63.35
(27.3)
65.28
Forfeited
(403.6)
68.26
(9.1)
67.56
Non-vested as of May 25, 2025
4,090.3
$
66.90
58.9
$
66.63
Fiscal Year
2025
2024
2023
Number of units granted (thousands)
1,698.0
1,517.8
2,066.4
Weighted-average
price per unit
$
63.37
$
73.38
$
69.77
The
total
grant-date
fair
value
of
restricted
stock
unit
awards
that
vested
was
$
113.8
million
in
fiscal
2025,
$
92.9
million
in
fiscal
2024, and $
107.4
million in fiscal 2023.
As of May
25, 2025, unrecognized
compensation expense
related to non-vested
stock options, restricted
stock units, and
performance
share units was $
116.5
million. This expense will be recognized over
19 months
, on average.
Stock-based compensation expense related to restricted stock units
and performance share units was as follows:
Fiscal Year
In Millions
2025
2024
2023
Compensation expense related to restricted stock units and performance
share units
$
75.9
$
81.4
$
99.4
NOTE 13. EARNINGS PER SHARE
Basic and diluted EPS were calculated using the following:
Fiscal Year
In Millions, Except per Share Data
2025
2024
2023
Net earnings attributable to General Mills - as reported
$
2,295.2
$
2,496.6
$
2,593.9
Capital appreciation paid on Class A Interests in GMC (a)
(10.5)
-
-
Net earnings for EPS calculation
$
2,284.7
$
2,496.6
$
2,593.9
Average number
of common shares - basic EPS
554.5
575.5
594.8
Incremental share effect from: (b)
Stock options
1.2
1.8
3.6
Restricted stock units and performance share units
1.8
2.2
2.8
Average number
of common shares - diluted EPS
557.5
579.5
601.2
Earnings per share — basic
$
4.12
$
4.34
$
4.36
Earnings per share — diluted
$
4.10
$
4.31
$
4.31
(a)
Please see Note 10 for additional information.
(b)
Incremental shares from
stock options, restricted
stock units, and performance
share units are computed
by the treasury stock
method.
Stock
options,
restricted
stock
units,
and
performance
share
units
excluded
from
our
computation
of
diluted
EPS
because they were not dilutive were as follows:
Fiscal Year
In Millions
2025
2024
2023
Anti-dilutive stock options, restricted stock units,
and performance share units
4.7
2.1
0.8
NOTE 14. RETIREMENT BENEFITS AND POSTEMPLOYMENT BENEFITS
Defined Benefit Pension Plans
We have
defined benefit pension plans covering
many employees in the United States,
Canada, Switzerland, and the United
Kingdom.
Benefits for salaried
employees are based
on length of service
and final average
compensation. Benefits for
hourly employees include
various monthly
amounts for each
year of credited
service. Our funding
policy is consistent
with the requirements
of applicable laws.
We made
no
voluntary contributions to our
principal U.S. plans in fiscal
2025 or fiscal 2024.
We do
no
t expect to be required
to make
any
contributions
to
our
principal
U.S.
plans
in
fiscal
Our
principal
U.S.
retirement
plan
covering
salaried
employees
has
a
provision that any excess pension assets would be allocated to active participants
if the plan is terminated within
five years
of a change
in control.
All salaried employees
hired on
or after June 1,
2013, are
eligible for
a retirement program
that does not
include a defined
benefit pension plan.
Other Postretirement Benefit Plans
We
also
sponsor
plans
that
provide
health
care
benefits
to
many
of our
retirees
in
the United
States,
Canada,
and
Brazil.
The
U.S.
salaried
health
care
benefit
plan
is
contributory,
with
retiree
contributions
based
on
years
of
service.
We
make
decisions
to
fund
related trusts
for certain
employees and
retirees on an
annual basis.
We
made
no
voluntary contributions
to these
plans in fiscal
2025
or fiscal 2024. We
do
no
t expect to be required to make any contributions to these plans in fiscal 2026.
Health Care Cost Trend
Rates
Assumed health care cost trends are as follows:
Fiscal Year
2025
2024
Health care cost trend rate for next year
7.9
% and
7.9
%
7.3
% and
7.3
%
Rate to which the cost trend rate is assumed to decline (ultimate rate)
4.5
%
4.5
%
Year
that the rate reaches the ultimate trend rate
2034
2033
We
review our
health care
cost trend
rates annually.
Our review
is based
on data
we collect
about our
health care
claims experience
and information
provided by our
actuaries. This information
includes recent
plan experience,
plan design, overall
industry experience
and projections, and
assumptions used by other
similar organizations.
Our initial health
care cost trend
rate is adjusted
as necessary to
remain consistent
with this
review,
recent experiences,
and short-term
expectations. Our
initial health
care cost
trend rate
assumption
is
7.9
percent for retirees age
65 and over and for
retirees under age 65 at
the end of fiscal 2025.
Rates are graded down annually
until
the
ultimate
trend
rate
of
4.5
percent
is
reached
in
2034
for
all
retirees.
The
trend
rates
are
applicable
for
calculations
only
if
the
retirees’ benefits increase
as a result of
health care inflation. The
ultimate trend rate is
adjusted annually,
as necessary,
to approximate
the current
economic
view on
the rate
of long-term
inflation plus
an appropriate
health
care cost
premium.
Assumed trend
rates for
health care costs have an important effect on the amounts reported
for the other postretirement benefit plans.
Postemployment Benefit Plans
Under certain
circumstances, we
also provide
accruable benefits,
primarily severance,
to former
or inactive
employees in
the United
States,
Canada,
and
Mexico.
We
recognize
an
obligation
for
any
of
these
benefits
that
vest
or
accumulate
with
service.
Postemployment benefits
that do not
vest or
accumulate with
service (such
as severance
based solely
on annual pay
rather than
years
of service) are charged to expense when incurred. Our postemployment
benefit plans are unfunded.
Summarized
financial
information
about
defined
benefit
pension,
other
postretirement
benefit,
and
postemployment
benefit
plans
is
presented below:
Defined Benefit Pension
Plans
Other
Postretirement
Benefit Plans
Postemployment
Benefit Plans
Fiscal Year
Fiscal Year
Fiscal Year
In Millions
2025
2024
2025
2024
2025
2024
Change in Plan Assets:
Fair value at beginning of year
$
5,439.7
$
5,778.6
$
463.2
$
456.0
Actual return on assets
188.6
(23.2)
35.7
45.6
Employer contributions
30.7
30.0
0.1
0.1
Plan participant contributions
2.4
2.0
6.6
6.4
Benefits payments
(349.5)
(349.5)
(47.6)
(44.9)
Foreign currency
5.3
1.8
-
-
Fair value at end of year (a)
$
5,317.2
$
5,439.7
$
458.0
$
463.2
Change in Projected Benefit Obligation:
Benefit obligation at beginning of year
$
5,801.7
$
5,970.7
$
403.0
$
430.6
$
129.0
$
131.0
Service cost
51.8
56.8
4.3
4.7
7.0
7.4
Interest cost
306.9
296.5
21.1
21.3
4.0
4.0
Plan amendment
0.4
1.2
-
-
-
(9.6)
Curtailment/other
-
(13.9)
-
-
8.1
10.2
Plan participant contributions
2.4
2.0
6.6
6.4
-
-
Actuarial (gain) loss
(191.4)
(174.4)
(48.1)
(14.1)
(2.1)
10.3
Benefits payments
(349.5)
(339.1)
(49.0)
(45.7)
(22.9)
(24.3)
Foreign currency
5.2
1.9
(0.5)
(0.2)
-
-
Projected benefit obligation at end of year (a)
$
5,627.5
$
5,801.7
$
337.4
$
403.0
$
123.1
$
129.0
Plan assets (less) more than benefit obligation as of
fiscal year end (b)
$
(310.3)
$
(362.0)
$
120.6
$
60.2
$
(123.1)
$
(129.0)
(a)
Plan assets and obligations are measured as of
May 31, 2025
, and
May 31, 2024
.
During fiscal
2025, the
decrease in
defined benefit
pension obligations
was primarily
driven by
actuarial gains
due to
an increase
in
the discount
rate, and
the decrease
in other
postretirement obligations
was primarily
driven by
actuarial gains
due to plan
experience.
During fiscal 2024,
the decreases in defined
benefit pension obligations
and other postretirement
obligations were primarily
driven by
actuarial gains due to an increase in the discount rate.
As of May 25, 2025,
other postretirement benefit plans
had benefit obligations of
$
9.4
million that are unfunded.
As of May 26, 2024,
other
postretirement
benefit
plans had
benefit
obligations
of $
11.5
million
that are
unfunded.
Postemployment
benefit plans
are
not
funded and had benefit obligations of $
123.1
million and $
129.0
million as of May 25, 2025, and May 26, 2024, respectively.
The
accumulated
benefit
obligation
for
all
defined
benefit
pension
plans
was
$
5,540.2
million
as
of
May 25,
2025,
and
$
5,684.1
million as of May 26, 2024.
Amounts recognized in AOCI as of May 25, 2025, and May 26, 2024, are as follows:
Defined Benefit Pension
Plans
Other Postretirement
Benefit Plans
Postemployment
Benefit Plans
Total
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
In Millions
2025
2024
2025
2024
2025
2024
2025
2024
Net actuarial (loss) gain
$
(1,935.4)
$
(1,991.1)
$
212.7
$
190.4
$
(4.1)
$
(5.6)
$
(1,726.8)
$
(1,806.3)
Prior service (costs) credits
(7.5)
(9.8)
67.4
84.7
6.0
6.8
65.9
81.7
Amounts recorded in accumulated
other comprehensive loss
$
(1,942.9)
$
(2,000.9)
$
280.1
$
275.1
$
1.9
$
1.2
$
(1,660.9)
$
(1,724.6)
Plans with accumulated benefit obligations in excess of plan assets as of May
25, 2025, and May 26, 2024 are as follows:
Defined Benefit Pension Plans
Fiscal Year
In Millions
2025
2024
Projected benefit obligation
$
449.7
$
449.4
Accumulated benefit obligation
440.1
438.8
Plan assets at fair value
16.3
12.0
Components of net periodic benefit expense are as follows:
Defined Benefit Pension Plans
Other Postretirement Benefit
Plans
Postemployment Benefit Plans
Fiscal Year
Fiscal Year
Fiscal Year
In Millions
2025
2024
2023
2025
2024
2023
2025
2024
2023
Service cost
$
51.8
$
56.8
$
70.3
$
4.3
$
4.7
$
5.1
$
7.0
$
7.4
$
8.4
Interest cost
306.9
296.5
258.5
21.1
21.3
17.9
4.0
4.0
3.1
Expected return on
plan assets
(420.1)
(417.7)
(420.5)
(35.9)
(34.7)
(31.1)
-
-
-
Amortization of losses
(gains)
100.4
86.5
113.2
(20.5)
(20.4)
(19.3)
0.5
0.1
0.4
Amortization of prior
service costs
(credits)
1.4
1.8
1.5
(22.1)
(21.8)
(23.2)
(1.6)
0.3
0.3
Other adjustments
-
-
-
-
-
-
11.5
8.3
10.4
Settlement or
curtailment gains
-
(4.0)
(0.7)
-
-
-
-
-
-
Net expense (income)
$
40.4
$
19.9
$
22.3
$
(53.1)
$
(50.9)
$
(50.6)
$
21.4
$
20.1
$
22.6
Assumptions
Weighted-average
assumptions used to determine fiscal year-end benefit obligations are
as follows:
Defined Benefit Pension
Plans
Other Postretirement
Benefit Plans
Postemployment Benefit
Plans
Fiscal Year
Fiscal Year
Fiscal Year
2025
2024
2025
2024
2025
2024
Discount rate
5.79
%
5.52
%
5.67
%
5.52
%
5.04
%
5.05
%
Rate of salary increases
3.88
4.23
-
-
4.13
4.46
Weighted-average
assumptions used to determine fiscal year net periodic benefit expense are as follows:
Defined Benefit Pension Plans
Other Postretirement Benefit
Plans
Postemployment Benefit Plans
Fiscal Year
Fiscal Year
Fiscal Year
2025
2024
2023
2025
2024
2023
2025
2024
2023
Discount rate
5.52
%
5.18
%
4.39
%
5.52
%
5.19
%
4.36
%
5.05
%
4.55
%
3.62
%
Service cost
effective rate
5.58
5.27
4.57
5.58
5.15
4.41
5.37
5.00
3.69
Interest cost
effective rate
5.40
5.06
4.03
5.38
4.96
3.80
5.05
4.61
3.35
Rate of
salary increases
4.23
4.20
4.18
-
-
-
4.46
4.46
4.46
Expected long-term
rate of return on
plan assets
7.63
7.13
6.70
7.79
7.34
6.76
-
-
-
Discount Rates
We
estimate
the
service
and
interest
cost
components
of
the
net
periodic
benefit
expense
for
our
United
States
and
most
of
our
international
defined
benefit
pension,
other
postretirement
benefit,
and
postemployment
benefit
plans
utilizing
a
full
yield
curve
approach
by applying
the specific
spot rates
along
the yield
curve used
to determine
the benefit
obligation
to the
relevant projected
cash flows. Our
discount rate assumptions
are determined annually
as of May 31
for our defined
benefit pension, other
postretirement
benefit, and
postemployment benefit
plan obligations.
We
also use
discount rates
as of
May 31 to
determine defined
benefit pension,
other
postretirement benefit,
and
postemployment
benefit plan
income and
expense for
the following
fiscal year.
We
work with
our
outside actuaries
to determine
the timing
and amount
of expected
future cash
outflows to
plan participants
and, using
the Aa
Above
Median corporate
bond yield,
to develop
a forward
interest rate
curve, including
a margin
to that
index based on
our credit
risk. This
forward interest rate curve is applied to our expected future cash outflows
to determine our discount rate assumptions.
Fair Value
of Plan Assets
The fair
values of
our pension
and postretirement
benefit plans’
assets and
their respective
levels in
the fair
value hierarchy
by asset
category were as follows:
May 31, 2025
May 31, 2024
In Millions
Level 1
Level 2
Level 3
Total
Assets
Level 1
Level 2
Level 3
Total
Assets
Fair value measurement of pension
plan assets:
Equity (a)
$
200.6
$
383.8
$
-
$
584.4
$
225.9
$
391.4
$
-
$
617.3
Fixed income (b)
1,529.7
2,019.2
-
3,548.9
1,497.0
2,014.4
-
3,511.4
Real asset investments (c)
59.7
-
-
59.7
82.6
-
-
82.6
Other investments (d)
-
-
0.1
0.1
-
-
0.1
0.1
Cash and accruals
137.2
0.1
-
137.3
158.3
0.1
-
158.4
Fair value measurement of pension
plan assets
$
1,927.2
$
2,403.1
$
0.1
$
4,330.4
$
1,963.8
$
2,405.9
$
0.1
$
4,369.8
Assets measured at net asset value (e)
986.8
1,069.9
Total pension plan
assets
$
5,317.2
$
5,439.7
Fair value measurement of
postretirement benefit plan assets:
Fixed income (b)
$
90.5
$
-
$
-
$
90.5
$
95.1
$
-
$
-
$
95.1
Cash and accruals
33.7
-
-
33.7
24.9
-
-
24.9
Fair value measurement of
postretirement benefit
plan assets
$
124.2
$
-
$
-
$
124.2
$
120.0
$
-
$
-
$
120.0
Assets measured at net asset value (e)
333.8
343.2
Total postretirement
benefit
plan assets
$
458.0
$
463.2
(a)
Primarily
publicly
traded
common
stock
for
purposes
of
total
return
and
to
maintain
equity
exposure
consistent
with
policy
allocations.
Investments
include:
United
States
and
international
public
equity
securities,
and
equity
futures
valued
at
closing
prices
from
national
exchanges,
commingled
funds
valued
at
fair
value
using
the
unit
values
provided
by
the
investment
managers,
and certain
private equity
securities valued
using
a matrix
of pricing
inputs reflecting
assumptions
based on
the best
information available.
(b)
Primarily government
and corporate
debt securities
and futures
for purposes
of total
return, managing
fixed income
exposure to
policy allocations, and
duration targets. Investments
include: fixed income
securities and bond
futures generally valued
at closing
prices from
national exchanges,
fixed income
pricing models,
and independent
financial analysts;
and fixed
income commingled
funds valued at unit values provided by the investment managers, which
are based on the fair value of the underlying investments.
(c)
Publicly traded common stocks in
energy,
real estate, and infrastructure for
the purpose of total return, which
are generally valued
at closing prices from national exchanges.
(d)
Insurance and
annuity contracts
to provide
a stable
stream of
income for
pension retirees.
Fair values
are based
on the
fair value
of the underlying investments and contract fair values established by the providers.
(e)
Primarily limited
partnerships, trust-owned
life insurance,
common collective
trusts, and
certain private
equity securities
that are
measured at fair value using
the net asset value per
share (or its equivalent) practical
expedient and have not been
classified in the
fair value hierarchy.
There were
no
transfers into or out of level 3 investments in fiscal 2025. During fiscal
2024, the initial public offering of certain equity
securities
previously
priced
using
non-observable
inputs
resulted
in
the
transfer
of
$
34.3
million
out
of
level
investments.
There
were
no
transfers into level 3 investments in fiscal 2024.
Expected Rate of Return on Plan Assets
Our expected
rate of return
on plan assets
is determined
by our asset
allocation, our
historical long-term
investment performance,
our
estimate of future long-term returns
by asset class (using input from our
actuaries, investment services, and investment
managers), and
long-term inflation
assumptions. We
review this assumption
annually for
each plan; however,
our annual
investment performance
for
one particular year does not, by itself, significantly influence our evaluation.
Weighted-average
asset allocations for our defined benefit pension and other postretirement benefit plans are
as follows:
Defined Benefit Pension Plans
Other Postretirement Benefit Plans
Fiscal Year
Fiscal Year
2025
2024
2025
2024
Asset category:
United States equities
6.4
%
7.2
%
26.0
%
27.8
%
International equities
4.4
4.1
14.9
14.4
Private equities
9.3
10.2
9.1
11.2
Fixed income
70.9
68.3
50.0
46.6
Real assets
9.0
10.2
-
-
Total
100.0
%
100.0
%
100.0
%
100.0
%
The investment
objective for
our defined
benefit pension
and other
postretirement benefit
plans is
to secure
the benefit
obligations to
participants
at
a
reasonable
cost
to
us.
Our
goal
is
to
optimize
the
long-term
return
on
plan
assets
at
a
moderate
level
of
risk.
The
defined benefit
pension plan
and other postretirement
benefit plan
portfolios are
broadly diversified
across asset
classes. Within
asset
classes,
the
portfolios
are
further
diversified
across
investment
styles
and
investment
organizations.
For
the
U.S.
defined
benefit
pension
plans,
the
long-term
investment
policy
allocation
is:
percent
to
equities
in
the
United
States;
percent
to
international
equities;
percent to private
equities;
percent to fixed
income; and
percent to real
assets (real estate,
energy,
and infrastructure).
For other U.S. postretirement benefit plans, the long-term investment
policy allocations are:
percent to equities in the United States;
percent to international
equities;
percent to total
private equities; and
percent to fixed
income.
The actual allocations
to these
asset classes may vary tactically around the long-term policy allocations based
on relative market valuations.
Contributions and Future Benefit Payments
We
do
no
t
expect
to
be
required
to
make
contributions
to
our
defined
benefit
pension,
other
postretirement
benefit,
and
postemployment benefit
plans in
fiscal 2026.
Actual fiscal
2026 contributions
could exceed
our current
projections, as
influenced by
our decision
to undertake
discretionary funding
of our benefit
trusts and
future changes
in regulatory
requirements. Estimated
benefit
payments, which reflect expected future service, as appropriate, are
expected to be paid from fiscal 2026 to fiscal 2035 as follows:
In Millions
Defined Benefit
Pension Plans
Other
Postretirement
Benefit Plans
Gross Payments
Postemployment
Benefit Plans
Fiscal 2026
$
360.9
$
30.9
$
22.8
Fiscal 2027
367.0
28.6
19.2
Fiscal 2028
372.7
28.0
17.6
Fiscal 2029
378.1
27.4
15.5
Fiscal 2030
382.9
26.7
13.9
Fiscal 2031-2035
1,965.2
121.2
56.9
Defined Contribution Plans
The
General
Mills
Savings
Plan
is
a
defined
contribution
plan
that
covers
domestic
salaried,
hourly,
nonunion,
and
certain
union
employees.
This plan
is a
401(k)
savings plan
that includes
a number
of investment
funds, including
a Company
stock fund
and an
Employee Stock
Ownership Plan
(ESOP). We
sponsor another
money purchase
plan for
certain domestic
hourly employees
with net
assets of $
19.7
million as of May 25, 2025, and $
19.5
million as of May 26, 2024. We
also sponsor defined contribution plans in many
of
our
foreign
locations.
Our
total
recognized
expense
related
to
defined
contribution
plans
was
$
96.1
million
in
fiscal
2025,
$
94.0
million in fiscal 2024, and $
97.2
million in fiscal 2023.
We
match a
percentage of
employee contributions
to the
General Mills
Savings Plan.
The Company
match is
directed to
investment
options
of
the
participant’s
choosing.
The
number
of
shares
of
our
common
stock
allocated
to
participants
in
the
ESOP
was
3.2
million as
of May
25, 2025,
and
3.5
million as
of May
26, 2024.
The ESOP’s
only assets
are our
common stock
and temporary
cash
balances.
The Company stock fund and the ESOP collectively held
$
292.7
million and $
393.0
million of Company common stock as of May 25,
2025, and May 26, 2024, respectively.
NOTE 15. INCOME TAXES
The
components
of
earnings
before
income
taxes
and
after-tax
earnings
from
joint
ventures
and
the
corresponding
income
taxes
thereon are as follows:
Fiscal Year
In Millions
2025
2024
2023
Earnings before income taxes and after-tax earnings
from joint ventures:
United States
$
2,493.2
$
2,907.0
$
2,740.5
Foreign
341.8
121.3
400.0
Total earnings
before income taxes and after-tax earnings from joint ventures
$
2,835.0
$
3,028.3
$
3,140.5
Income taxes:
Currently payable:
Federal
$
549.0
$
512.8
$
487.1
State and local
80.1
72.0
82.2
Foreign
65.5
58.2
65.1
Total current
694.6
643.0
634.4
Deferred:
Federal
(62.6)
27.4
9.6
State and local
(3.3)
9.7
(8.1)
Foreign
(55.0)
(85.6)
(23.7)
Total deferred
(120.9)
(48.5)
(22.2)
Total income
taxes
$
573.7
$
594.5
$
612.2
The following table reconciles the United States statutory income tax rate
with our effective income tax rate:
Fiscal Year
2025
2024
2023
United States statutory rate
21.0
%
21.0
%
21.0
%
State and local income taxes, net of federal tax benefits
2.1
2.1
1.5
Foreign rate differences
(1.7)
(1.6)
(1.0)
Research and development tax credit
(1.5)
(1.2)
-
Stock based compensation
(0.2)
(0.3)
(1.0)
Divestitures, net
(0.3)
-
(0.8)
Other, net
0.8
(0.4)
(0.2)
Effective income tax rate
20.2
%
19.6
%
19.5
%
The tax effects of temporary differences that
give rise to deferred tax assets and liabilities are as follows:
In Millions
May 25, 2025
May 26, 2024
Accrued liabilities
$
42.9
$
43.6
Compensation and employee benefits
144.3
147.7
Unrealized hedges
23.1
-
Pension
74.2
83.0
Tax credit carryforwards
58.1
48.6
Stock, partnership, and miscellaneous investments
4.0
3.6
Capitalized research and development
305.5
103.6
Prepayments
65.9
-
Capital losses
28.5
71.7
Net operating losses
265.2
259.6
Other
161.1
92.3
Gross deferred tax assets
1,172.8
853.7
Valuation
allowance
253.7
255.5
Net deferred tax assets
919.1
598.2
Brands
1,436.0
1,429.4
Fixed assets
496.1
393.2
Intangible assets
247.3
195.8
Tax lease transactions
-
3.4
Inventories
31.3
34.2
Stock, partnership, and miscellaneous investments
512.2
439.7
Unrealized hedges
-
20.2
Other
110.9
115.4
Gross deferred tax liabilities
2,833.8
2,631.3
Net deferred tax liability
$
1,914.7
$
2,033.1
We
have established a
valuation allowance against
certain of the
categories of deferred
tax assets described
above as current
evidence
does
not
suggest
we
will
realize
sufficient
taxable
income
of
the
appropriate
character
(e.g.,
ordinary
income
versus
capital
gain
income) within the carryforward period to allow us to realize these deferred tax
benefits.
Information about our valuation allowance follows:
In Millions
May 25, 2025
Pillsbury acquisition losses
$
106.4
State and foreign loss carryforwards
59.0
Capital loss carryforwards
20.9
Other
67.4
Total
$
253.7
As of May 25, 2025, we believe it is more-likely-than-not that the remainder
of our deferred tax assets are realizable.
Information about our tax loss carryforwards follows
:
In Millions
May 25, 2025
Foreign loss carryforwards
$
256.0
Federal operating loss carryforwards
2.3
State operating loss carryforwards
6.9
Total tax loss carryforwards
$
265.2
Our foreign loss carryforwards expire as follows:
In Millions
May 25, 2025
Expire in fiscal 2026 and 2027
$
2.9
Expire in fiscal 2028 and beyond
13.9
Do not expire (a)
239.2
Total foreign loss carryforwards
$
256.0
(a)
Of the total foreign loss carryforwards, $
218.6
million are held in Brazil for which we have not recorded a valuation allowance.
The United States Congress
is currently drafting new
tax legislation referred to
as the One Big Beautiful
Bill Act. We
will continue to
monitor developments as the legislation progresses and evaluate any
potential impacts on our financial statements.
In
December
2021,
the
Organization
for
Economic
Cooperation
and
Development
(OECD)
established
a
framework,
referred
to
as
Pillar
2,
designed
to
ensure
large
multinational
enterprises
pay
a
minimum
percent
level
of
tax
on
the
income
arising
in
each
jurisdiction
in
which
they
operate.
Numerous
countries
have
already
enacted
the
OECD
model
rules
effective
for
taxable
years
beginning
after
December
31,
2023,
which
for
us
was
fiscal
There
was
no
material
impact
on
our
consolidated
financial
statements.
Several
other
countries
have
enacted
or
drafted
legislation
that
is
not
yet
effective
for
us,
and
we
do
not
expect
this
legislation
to
have
a
material
impact
on
our
consolidated
financial
statements.
We
will
continue
to monitor
for
new
legislation
and
guidance and evaluate any potential impact on our consolidated financial
statements.
On August
16, 2022,
the Inflation
Reduction Act
(IRA) was
signed into
law.
The IRA
introduces
a Corporate
Alternative Minimum
Tax beginning
in our fiscal 2024 and an excise tax on the repurchase of corporate stock starting after
January 1, 2023. The IRA did not
have a material impact on our financial results, including our annual
effective tax rates and liquidity.
As of
May 25,
2025, we
have
no
t recognized
a deferred
tax liability
for unremitted
earnings of
approximately $
2.3
billion from
our
foreign operations
because we
currently believe
our subsidiaries
have invested
the undistributed
earnings indefinitely
or the
earnings
will be remitted
in a tax-neutral
transaction. It
is not practicable
for us to
determine the amount
of unrecognized
tax expense on
these
reinvested earnings.
Deferred taxes
are recorded
for earnings
of our
foreign operations
when we
determine that
such earnings
are no
longer indefinitely reinvested. All
earnings prior to fiscal 2018
remain permanently reinvested. Earnings
from fiscal 2018 and later
are
not permanently reinvested and local country withholding taxes are
recorded on earnings each year.
We are
subject to federal income
taxes in the United States
as well as various state, local,
and foreign jurisdictions. A
number of years
may elapse before an uncertain tax position is audited and finally resolved.
While it is often difficult to predict the final outcome or the
timing
of
resolution
of
any
particular
uncertain
tax
position,
we
believe
that
our
liabilities
for
income
taxes
reflect
the
most
likely
outcome.
We
adjust
these
liabilities,
as
well
as
the
related
interest,
in
light
of
changing
facts
and
circumstances.
Settlement
of
any
particular position would usually require the use of cash.
The number
of years
with open
tax audits
varies depending
on the
tax jurisdiction.
Our major
taxing jurisdiction
is the
United States
(federal and state). Various
tax examinations by United States state taxing
authorities could be conducted for any
open tax year,
which
vary by jurisdiction, but are generally from
to
years.
The Internal Revenue Service (IRS) is currently auditing
our federal tax returns for fiscal 2018 through 2022.
Several state and foreign
examinations are currently in
progress. We
do not expect these examinations
to result in a material
impact on our results
of operations
or financial position. During fiscal 2024,
we received a notice of proposed adjustment
from the IRS associated with a
capital loss from
fiscal 2019.
We
believe that we
have meritorious defense
against this assessment
and will vigorously
defend our position.
We
do not
expect the
resolution of
the proposed
adjustment to
have a material
impact on
our financial
position or
liquidity.
We
have effectively
settled all issues with the IRS for fiscal years 2015 and prior.
The Brazilian
tax authority,
Secretaria da
Receita Federal
do Brasil (RFB),
has concluded
audits of
our 2012
through 2020
tax return
years. These
audits included
a review
of our
determinations of
amortization of
certain goodwill
arising from
the acquisition
of Yoki
Alimentos
S.A.
The
RFB
has
proposed
adjustments
that
effectively
eliminate
the
goodwill
amortization
benefits
related
to
this
transaction. We
believe we have meritorious defenses
and intend to continue to contest
the disallowance for all years.
Tax return
years
2012 through 2013 have been resolved with no adjustments.
We
apply a more-likely-than-not
threshold to the
recognition and derecognition
of uncertain tax
positions. Accordingly,
we recognize
the amount of
tax benefit that
has a greater
than 50 percent
likelihood of being
ultimately realized upon
settlement. Future changes
in
judgment related to the expected ultimate resolution of uncertain tax positions
will affect earnings in the period of such change.
The following table sets forth
changes in our total gross
unrecognized tax benefit liabilities,
excluding accrued interest,
for fiscal 2025
and
fiscal 2024.
Approximately
$
98.2
million of
this total
in fiscal
2025
represents the
amount that,
if recognized,
would affect
our
effective income tax rate in future periods.
This amount differs from the gross unrecognized
tax benefits presented in the table because
certain
portions of
the liabilities
below
would
impact deferred
taxes if
recognized.
We
also would
record
a decrease
in U.S.
federal
income taxes upon recognition of the state tax benefits included therein.
Fiscal Year
In Millions
2025
2024
Balance, beginning of year
$
149.0
$
181.2
Tax positions related
to current year:
Additions
48.7
24.6
Tax positions related
to prior years:
Additions
13.0
6.3
Reductions
(2.8)
(55.2)
Settlements
(2.6)
(0.8)
Lapses in statutes of limitations
(6.3)
(7.1)
Balance, end of year
$
199.0
$
149.0
As of
May 25,
2025, we do
no
t expect
to pay unrecognized
tax benefit
liabilities and
accrued interest
within the
next 12
months. We
are not
able to
reasonably estimate
the timing
of future
cash flows
beyond 12
months due
to uncertainties
in the
timing of
tax audit
outcomes. Our unrecognized tax benefit liability was classified in other
liabilities.
We
report
accrued
interest
and
penalties
related
to
unrecognized
tax
benefit
liabilities
in
income
tax
expense.
For
fiscal
2025,
we
recognized
a
net
expense
of
$
2.7
million
of
tax-related
net
interest
and
penalties,
and
had
$
27.0
million
of
accrued
interest
and
penalties as of
May 25, 2025. For
fiscal 2024, we recognized
a net benefit of
$
6.1
million of tax-related net
interest and penalties, and
had $
24.2
million of accrued interest and penalties as of May 26, 2024.
NOTE 16. COMMITMENTS AND CONTINGENCIES
As
of
May
25,
2025,
we
have
issued
guarantees
with
various
terms
of
$
163.5
million
for
the
debt
and
other
obligations
of
non-
consolidated affiliates, mainly CPW.
This amount represents the
maximum potential obligation that
we could be required to pay
under
the guarantees.
We
have determined
the likelihood
of any
significant
amounts being
paid under
these guarantees
to be
remote.
Off-
balance sheet arrangements were not material as of May 25, 2025.
NOTE 17. BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION
We
operate
in
the
packaged
foods
industry.
Our
operating
segments
are
as
follows:
North
America
Retail,
International,
North
America Pet,
and North
America Foodservice.
In the
first quarter
of fiscal
2025, we
renamed the
Pet segment
to the
North America
Pet segment to reflect that
pet food results outside
North America are recorded
in the International segment.
There were no changes to
the composition of our
reportable segments or information
reviewed by our CODM and
no impact on our historical
segment operating
results.
Our North America Retail
operating segment reflects business
with a wide variety of
grocery stores, mass merchandisers, membership
stores,
natural
food
chains,
drug,
dollar
and
discount
chains,
convenience
stores,
and
e-commerce
grocery
providers.
Our
product
categories
in
this
business
segment
include
ready-to-eat
cereals,
refrigerated
yogurt,
soup,
meal
kits,
refrigerated
and
frozen
dough
products,
dessert
and
baking
mixes,
frozen
pizza
and
pizza
snacks,
snack
bars,
fruit
snacks,
savory
snacks,
and
a
wide
variety
of
organic products including ready-to-eat cereal, frozen
and shelf-stable vegetables, meal kits, fruit snacks and snack bars.
Our
International
operating
segment
consists
of
retail
and
foodservice
businesses
outside
of
the
United
States
and
Canada.
Our
product categories include super-premium
ice cream and frozen desserts, meal kits, salty snacks,
snack bars, dessert and baking mixes,
shelf-stable
vegetables,
and
pet
food
products.
We
also
sell
super-premium
ice
cream
and
frozen
desserts
directly
to
consumers
through owned
retail shops. Our
International segment
also includes products
manufactured in
the United States
for export, mainly
to
Caribbean and Latin American markets, as well as products we
manufacture for sale to our international joint ventures. Revenues
from
export activities are reported in the region or country where the end customer
is located.
Our North
America Pet
operating segment
includes pet
food products
sold primarily
in the
United States
and Canada
in national
pet
superstore
chains,
e-commerce
retailers,
grocery
stores,
regional
pet
store
chains,
mass
merchandisers,
and
veterinary
clinics
and
hospitals. Our product categories include dog and
cat food (dry foods, wet foods, and treats) made with whole meats,
fruits, vegetables
and
other
high-quality
natural
ingredients.
Our
tailored
pet product
offerings
address
specific
dietary,
lifestyle,
and
life-stage
needs
and span
different product
types, diet types,
breed sizes
for dogs,
life stages, flavors,
product functions,
and textures
and cuts
for wet
foods.
Our
North
America
Foodservice
segment
consists
of
foodservice
businesses
in
the
United
States
and
Canada.
Our
major
product
categories
in
our
North
America
Foodservice
operating
segment
are
ready-to-eat
cereals,
snacks,
refrigerated
yogurt,
frozen
meals,
unbaked and
fully baked
frozen dough products,
baking mixes,
and bakery
flour.
Many products we
sell are branded
to the consumer
and nearly
all are
branded to
our customers.
We
sell to
distributors and
operators in
many customer
channels including
foodservice,
vending, and supermarket bakeries.
Our CODM
is the
Chairman of
the Board
and Chief
Executive Officer.
The CODM
predominantly uses
segment operating
profit in
the
annual
planning
process
which
includes
segment
operating
profit
performance
targets.
The
CODM
assesses
progress
against
performance targets
by comparing
segment operating
profit actual-to-plan variances
on a monthly
basis. The performance
assessment
completed by the
CODM is used to
determine whether resource
allocations require adjustment
and contributes to
the determination of
incentive compensation.
Operating
profit
for
these
segments
excludes
unallocated
corporate
items,
gain
or
loss
on
divestitures,
and
restructuring,
transformation,
impairment,
and
other
exit
costs.
Results
from
certain
businesses
managed
by
our
Strategic
Growth
Office
are
included within corporate and other net
sales and unallocated corporate items
within operating profit. Unallocated
corporate items also
include
corporate
overhead
expenses,
variances
to
planned
North
American
employee
benefits
and
incentives,
certain
charitable
contributions, restructuring
initiative project-related
costs, gains and
losses on corporate
investments, and
other items that
are not part
of our
measurement
of segment
operating
performance.
These include
gains and
losses arising
from the
revaluation of
certain
grain
inventories
and
gains
and
losses
from
mark-to-market
valuation
of
certain
commodity
positions
until
passed
back
to
our
operating
segments.
These items
affecting
operating profit
are centrally
managed
at the
corporate level
and
are excluded
from the
measure
of
segment
profitability
reviewed by
executive
management.
Under
our
supply chain
organization,
our
manufacturing,
warehouse,
and
distribution activities
are substantially
integrated across
our operations
in order
to maximize
efficiency
and productivity.
As a
result,
fixed assets and depreciation and amortization expenses are neither maintained
nor available by operating segment.
Our operating segment results were as follows:
Fiscal Year
2025
In Millions
North
America
Retail
International
North
America Pet
North
America
Foodservice
Total
Segment net sales
$
11,907.0
$
2,797.8
$
2,470.8
$
2,300.9
$
19,476.5
Corporate and other net sales
10.1
Total net sales
$
19,486.6
Cost of sales
$
7,472.1
$
2,110.6
$
1,476.4
$
1,772.9
Selling, general, and
administrative expenses
1,705.0
590.8
493.4
172.6
Segment operating profit
$
2,729.9
$
96.4
$
501.0
$
355.4
$
3,682.7
Unallocated corporate items
395.5
Divestitures gain, net
(95.9)
Restructuring, transformation,
impairment, and other
exit costs
78.3
Operating profit
$
3,304.8
Fiscal Year
2024
In Millions
North
America
Retail
International
North
America Pet
North
America
Foodservice
Total
Segment net sales
$
12,473.4
$
2,746.5
$
2,375.8
$
2,258.7
$
19,854.4
Corporate and other net sales
2.8
Total net sales
$
19,857.2
Cost of sales
$
7,650.8
$
2,073.4
$
1,446.8
$
1,781.9
Selling, general, and
administrative expenses
1,742.2
547.9
443.1
161.3
Segment operating profit
$
3,080.4
$
125.2
$
485.9
$
315.5
$
4,007.0
Unallocated corporate items
333.9
Restructuring, transformation,
impairment, and other
exit costs
241.4
Operating profit
$
3,431.7
Fiscal Year
2023
In Millions
North
America
Retail
International
North
America Pet
North
America
Foodservice
Total
Net sales
$
12,659.9
$
2,769.5
$
2,473.3
$
2,191.5
$
20,094.2
Cost of sales
7,782.2
2,055.2
1,611.7
1,749.5
Selling, general, and
administrative expenses
1,696.4
552.5
416.1
152.0
Segment operating profit
$
3,181.3
$
161.8
$
445.5
$
290.0
$
4,078.6
Unallocated corporate items
1,033.2
Divestitures gain, net
(444.6)
Restructuring, transformation,
impairment, and other
exit costs
56.2
Operating profit
$
3,433.8
Net sales for our North America Retail operating units were as follows:
Fiscal Year
In Millions
2025
2024
2023
U.S. Meals & Baking Solutions
$
4,238.9
$
4,324.3
$
4,426.3
U.S. Morning Foods
3,439.9
3,561.8
3,620.1
U.S. Snacks
3,356.3
3,538.9
3,611.0
Canada
871.9
1,048.4
1,002.5
Total
$
11,907.0
$
12,473.4
$
12,659.9
Net sales by class of similar products were as follows:
Fiscal Year
In Millions
2025
2024
2023
Snacks
$
4,187.4
$
4,327.3
$
4,431.5
Cereal
3,078.6
3,187.5
3,209.5
Convenient meals
2,816.1
2,906.5
2,961.6
Pet
2,585.8
2,382.7
2,476.0
Dough
2,384.2
2,423.6
2,390.5
Baking mixes and ingredients
1,940.2
1,996.0
2,037.3
Yogurt
1,391.6
1,482.5
1,472.9
Super-premium ice cream
721.6
728.7
703.7
Other
381.1
422.4
411.2
Total
$
19,486.6
$
19,857.2
$
20,094.2
The following tables provide financial information by geographic area:
Fiscal Year
In Millions
2025
2024
2023
Net sales:
United States
$
15,780.4
$
16,062.2
$
16,322.2
Non-United States
3,706.2
3,795.0
3,772.0
Total
$
19,486.6
$
19,857.2
$
20,094.2
In Millions
May 25, 2025
May 26, 2024
Cash and cash equivalents:
United States
$
47.8
$
87.8
Non-United States
316.1
330.2
Total
$
363.9
$
418.0
In Millions
May 25, 2025
May 26, 2024
Land, buildings, and equipment:
United States
$
3,036.6
$
3,155.3
Non-United States
596.0
708.6
Total
$
3,632.6
$
3,863.9
NOTE 18. SUPPLEMENTAL
INFORMATION
The components of certain Consolidated Balance Sheets accounts are as follows:
In Millions
May 25, 2025
May 26, 2024
Receivables:
Customers
$
1,829.1
$
1,721.2
Less allowance for doubtful accounts
(33.2)
(25.0)
Total
$
1,795.9
$
1,696.2
In Millions
May 25, 2025
May 26, 2024
Inventories:
Finished goods
$
1,883.9
$
1,827.7
Raw materials and packaging
460.0
500.5
Grain
112.5
111.1
Excess of FIFO over LIFO cost (a)
(545.6)
(541.1)
Total
$
1,910.8
$
1,898.2
(a)
Inventories
of
$
1,305.6
million
as
of
May
25,
2025,
and
$
1,135.3
million
as
of
May
26,
2024,
were
valued
at
LIFO.
The
difference between
replacement cost
and the
stated LIFO
inventory value
is not
materially different
from the
reserve for
the
LIFO valuation method.
In Millions
May 25, 2025
May 26, 2024
Prepaid expenses and other current assets:
Prepaid expenses
$
269.0
$
266.1
Other receivables
141.2
221.6
Derivative receivables
11.6
20.8
Miscellaneous
42.9
60.0
Total
$
464.7
$
568.5
In Millions
May 25, 2025
May 26, 2024
Land, buildings, and equipment:
Equipment
$
6,722.2
$
6,985.6
Buildings
2,535.8
2,640.2
Construction in progress
598.1
899.9
Capitalized software
531.6
506.8
Land
50.4
57.3
Equipment under finance lease
7.3
10.3
Buildings under finance lease
0.3
0.3
Total land,
buildings, and equipment
10,445.7
11,100.4
Less accumulated depreciation
(6,813.1)
(7,236.5)
Total
$
3,632.6
$
3,863.9
In Millions
May 25, 2025
May 26, 2024
Other assets:
Investments in and advances to joint ventures
$
431.9
$
397.9
Right of use operating lease assets
399.1
366.1
Deferred income taxes
186.1
167.5
Pension assets
144.7
89.1
Miscellaneous
297.2
273.9
Total
$
1,459.0
$
1,294.5
In Millions
May 25, 2025
May 26, 2024
Other current liabilities:
Accrued trade and consumer promotions
$
527.2
$
502.3
Accrued payroll
311.7
304.7
Accrued interest, including interest rate swaps
148.9
88.1
Current portion of operating lease liabilities
115.3
102.2
Accrued taxes
102.1
82.1
Restructuring, transformation, and other exit costs reserve
77.1
14.8
Derivative payables
31.5
20.6
Dividends payable
22.9
20.9
Miscellaneous
287.3
283.7
Total
$
1,624.0
$
1,419.4
In Millions
May 25, 2025
May 26, 2024
Other non-current liabilities:
Accrued compensation and benefits, including obligations for underfunded
other
postretirement benefit and postemployment benefit plans
$
642.5
$
708.6
Non-current portion of operating lease liabilities
302.8
282.8
Accrued taxes
215.9
186.8
Miscellaneous
67.4
105.3
Total
$
1,228.6
$
1,283.5
Please see Note 3 for additional information on certain assets and liabilities classified as held
for sale as of May 25, 2025.
Certain Consolidated Statements of Earnings amounts are as follows:
Fiscal Year
In Millions
2025
2024
2023
Depreciation and amortization
$
539.0
$
552.7
$
546.6
Research and development expense
256.6
257.8
257.6
Advertising and media expense (including production and
communication costs)
847.5
824.6
810.0
The components of interest, net are as follows:
Fiscal Year
In Millions
2025
2024
2023
Interest expense
$
559.6
$
509.4
$
400.5
Capitalized interest
(10.8)
(11.4)
(4.4)
Interest income
(24.6)
(18.8)
(14.0)
Interest, net
$
524.2
$
479.2
$
382.1
Certain Consolidated Statements of Cash Flows amounts are as follows:
Fiscal Year
In Millions
2025
2024
2023
Cash interest payments
$
474.4
$
464.4
$
337.1
Cash paid for income taxes
599.2
660.5
682.6
NOTE 19. QUARTERLY
DATA
(UNAUDITED)
Summarized quarterly data for fiscal 2025 and fiscal 2024 follows:
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
In Millions, Except Per
Share Amounts
2025
2024
2025
2024
2025
2024
2025
2024
Net sales
$
4,848.1
$
4,904.7
$
5,240.1
$
5,139.4
$
4,842.2
$
5,099.2
$
4,556.2
$
4,713.9
Gross margin
1,688.8
1,770.5
1,931.1
1,765.9
1,639.1
1,707.4
1,474.0
1,688.3
Net earnings attributable to
General Mills
579.9
673.5
795.7
595.5
625.6
670.1
294.0
557.5
EPS:
Basic
$
1.03
$
1.15
$
1.43
$
1.03
$
1.14
$
1.18
$
0.53
$
0.98
Diluted
$
1.03
$
1.14
$
1.42
$
1.02
$
1.12
$
1.17
$
0.53
$
0.98
In
the
fourth
quarter
of
fiscal
2025,
we
approved
a
multi-year
global
transformation
initiative
to
drive
increased
productivity
by
enhancing
end-to-end
business
processes
and
recorded
$
70.1
million
of
charges.
We
also
recorded
$
17.4
million
of
restructuring
charges
related to
actions previously
announced.
Additionally,
we purchased
the outstanding
GMC Class
A Interests
from
the third-
party
holder
for
$
252.8
million,
which
reflected
an
original
capital
account
balance
of
$
242.3
million
and
$
10.5
million
primarily
related
to
capital
account
appreciation.
We
also
recorded
$
16.2
million
of
transaction
costs,
primarily
related
to
the
definitive
agreement to
sell our
U.S. yogurt
business, and
$
6.7
million of
integration costs
related to
the fiscal
2025 acquisition
of Whitebridge
Pet Brands and the fiscal 2024 acquisition of a pet food business in Europe.
In
the
fourth
quarter
of
fiscal
2024,
we
recorded
$
103.1
million
of
non-cash
impairment
charges
related
to
our
Top
Chews
,
True
Chews
, and
EPIC
brand intangible
assets. We
also recorded
a $
53.2
million legal
recovery.
In addition,
we recorded
$
13.4
million of
transaction costs related to our acquisition of a pet food business in Europe.
Glossary
AOCI.
Accumulated other comprehensive income (loss).
Adjusted diluted EPS.
Diluted EPS adjusted for certain items affecting year-to-year
comparability.
Adjusted operating profit.
Operating profit adjusted for certain items affecting year-to-year
comparability.
Adjusted
operating
profit
margin.
Operating
profit
adjusted
for
certain
items
affecting
year-to-year
comparability,
divided by
net
sales.
Constant currency.
Financial results
translated to
United States
dollars using
constant foreign
currency exchange
rates based
on the
rates
in
effect
for
the
comparable
prior-year
period
.
To
present
this
information,
current
period
results
for
entities
reporting
in
currencies other
than United
States dollars
are translated
into United
States dollars
at the
average exchange
rates in
effect during
the
corresponding
period
of
the
prior
fiscal
year,
rather
than
the
actual
average
exchange
rates
in
effect
during
the
current
fiscal
year
.
Therefore,
the
foreign
currency
impact
is
equal
to
current
year
results
in
local
currencies
multiplied
by
the
change
in
the
average
foreign currency exchange rate between the current fiscal period and the corresponding
period of the prior fiscal year.
Core working capital.
Accounts receivable plus inventories less accounts payable, all as of the last day of our fiscal
year.
Derivatives.
Financial instruments such
as futures, swaps,
options, and forward
contracts that we
use to manage
our risk arising
from
changes in commodity prices, interest rates, foreign exchange rates, and equity
prices.
Earnings
before
interest,
taxes,
depreciation
and
amortization
(EBITDA
)
.
The
calculation
of earnings
before
income taxes
and
after-tax earnings from joint ventures, net interest, depreciation
and amortization.
Euribor.
European Interbank Offered Rate.
Fair value
hierarchy.
For purposes
of fair
value measurement,
we categorize
assets and
liabilities into
one of
three levels
based on
the assumptions
(inputs) used
in valuing
the asset or
liability.
Level 1 provides
the most reliable
measure of
fair value, while
Level 3
generally requires significant management judgment. The three levels
are defined as follows:
Level 1:
Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2:
Observable inputs other
than quoted prices included
in Level 1, such
as quoted prices for
similar assets or liabilities
in
active markets or quoted prices for identical assets or liabilities in inactive markets
.
Level 3:
Unobservable inputs reflecting management’s
assumptions about the inputs used in pricing the asset or liability.
Free cash flow.
Net cash provided by operating activities less purchases of land, buildings, and equipment
.
Free
cash
flow
conversion
rate.
Free
cash
flow
divided
by
our
net
earnings,
including
earnings
attributable
to
noncontrolling
interests adjusted for certain items affecting year-to-year
comparability.
Generally
accepted accounting
principles (GAAP).
Guidelines, procedures,
and practices
that we
are required
to use
in recording
and reporting accounting information in our financial statements.
Goodwill.
The difference between
the purchase price of acquired
companies plus the fair value
of any noncontrolling interests and
the
related fair values of net assets acquired.
Gross margin.
Net sales less cost of sales.
Hedge accounting.
Accounting for qualifying
hedges that allows changes in
a hedging instrument’s
fair value to offset
corresponding
changes in
the hedged
item in
the same
reporting period
.
Hedge accounting
is permitted
for certain
hedging instruments
and hedged
items
only
if
the
hedging
relationship
is
highly
effective,
and
only
prospectively
from
the
date
a
hedging
relationship
is
formally
documented.
Holistic Margin Management
(HMM).
Company-wide initiative to
use productivity savings, mix
management,
and price realization
to offset input cost inflation, protect margins
,
and generate funds to reinvest in sales-generating activities.
Mark-to-market.
The act of determining a value for
financial instruments, commodity contracts, and
related assets or liabilities based
on the current market price for that item.
Net debt.
Long-term debt, current portion of long-term debt, and notes payable,
less cash and cash equivalents.
Net
mark-to-market
valuation of
certain
commodity
positions.
Realized
and
unrealized
gains
and
losses on
derivative
contracts
that will be allocated to segment operating profit when the exposure we are hedging
affects earnings.
Net price realization.
The impact of list and promoted price changes, net of trade and other price
promotion costs.
Net realizable
value.
The estimated
selling price
in the
ordinary course
of business,
less reasonably
predictable costs
of completion,
disposal, and transportation.
Noncontrolling interests.
Interests of consolidated subsidiaries held by third parties.
Notional principal amount.
The principal amount on which fixed-rate or floating-rate interest payments
are calculated.
OCI.
Other comprehensive income (loss).
Operating
cash
flow
conversion
rate.
Net
cash
provided
by
operating
activities,
divided
by
net
earnings,
including
earnings
attributable to noncontrolling interests.
Organic net
sales growth.
Net sales growth
adjusted for
foreign currency
translation, as
well as
acquisitions, divestitures,
and a
rd
week impact, when applicable.
Project-related costs.
Costs incurred related to our restructuring initiatives not included in restructuring
charges.
Reporting unit.
An operating segment or a business one level below an operating
segment.
SOFR.
Secured Overnight Financing Rate.
Strategic
Revenue
Management
(SRM).
A
Company-wide
capability
focused
on
generating
sustainable
benefits
from
net
price
realization
and
mix
by
identifying
and
executing
against
specific
opportunities
to
apply
tools
including
pricing,
sizing,
mix
management, and promotion optimization across each of our businesses.
Supply chain
input costs.
Costs incurred
to produce
and deliver
product,
including costs
for
ingredients
and
conversion, inventory
management, logistics, and warehousing.
Total
debt.
Notes payable and long-term debt, including current portion.
Translation
adjustments.
The impact
of the conversion
of our foreign
affiliates’ financial
statements to United
States dollars
for the
purpose of consolidating our financial statements.
Working capital.
Current assets and current liabilities, all as of the last day of our fiscal year.
ITEM 9 - Changes in and Disagreements With
Accountants on Accounting and Financial Disclosure
None.
Previous: Item 7A. QUANTITATIVE · Next: Item 9A. Controls and Procedures