Cover and table of contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED FEBRUARY 27, 2022

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO

Commission file number: 001-01185

GENERAL MILLS, INC.

(Exact name of registrant as specified in its charter)

Delaware	41-0274440
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

Number One General Mills Boulevard
Minneapolis, Minnesota	55426
(Address of principal executive offices)	(Zip Code)

(763)764-7600

(Registrant’s telephone number, including area code)

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.10 par value	GIS	New York Stock Exchange
1.000% Notes due 2023	GIS23A	New York Stock Exchange
0.125% Notes due 2025	GIS25A	New York Stock Exchange
0.450% Notes due 2026	GIS26	New York Stock Exchange
1.500% Notes due 2027	GIS27	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☑		Accelerated filer ☐		Non-accelerated filer ☐	Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

Number of shares of Common Stock outstanding as of March 14, 2022: 602,212,031 (excluding 152,401,297 shares held in the treasury).

General Mills, Inc.

Table of Contents

	Page
PART I – Financial Information
Item 1. Financial Statements
Consolidated Statements of Earnings for the quarters and nine-month periods ended February 27, 2022 and February 28, 2021	4
Consolidated Statements of Comprehensive Income for the quarters and nine-month periods ended February 27, 2022 and February 28, 2021	5
Consolidated Balance Sheets as of February 27, 2022 and May 30, 2021	6
Consolidated Statements of Total Equity and Redeemable Interest for the quarters and nine-month periods ended February 27, 2022 and February 28, 2021	7
Consolidated Statements of Cash Flows for the nine-month periods ended February 27, 2022 and February 28, 2021	9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3. Quantitative and Qualitative Disclosures About Market Risk	40
Item 4. Controls and Procedures	41
PART II – Other Information
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 6. Exhibits	42
Signatures	43

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Consolidated Statements of Earnings
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions, Except per Share Data)

	Quarter Ended				Nine-Month Period Ended
	Feb. 27, 2022		Feb. 28, 2021			Feb. 27, 2022	Feb. 28, 2021
Net sales	$	4,537.7	$	4,520.0	$	14,101.6	$	13,603.4
Cost of sales		3,134.0		2,966.1		9,469.3		8,738.0
Selling, general, and administrative expenses		751.4		716.3		2,337.6		2,256.6
Divestitures gain		(170.1)		-		(170.1)		-
Restructuring, impairment, and other exit costs		7.1		11.0		5.1		11.9
Operating profit		815.3		826.6		2,459.7		2,596.9
Benefit plan non-service income		(27.1)		(33.4)		(84.4)		(99.6)
Interest, net		86.5		106.0		275.1		317.7
Earnings before income taxes and after-tax earnings from joint ventures		755.9		754.0		2,269.0		2,378.8
Income taxes		123.2		162.0		451.8		522.2
After-tax earnings from joint ventures		29.9		11.8		92.0		89.5
Net earnings, including earnings attributable to redeemable and noncontrolling interests		662.6		603.8		1,909.2		1,946.1
Net earnings attributable to redeemable and noncontrolling interests		2.3		8.1		24.7		23.1
Net earnings attributable to General Mills	$	660.3	$	595.7	$	1,884.5	$	1,923.0
Earnings per share – basic	$	1.09	$	0.97	$	3.10	$	3.13
Earnings per share – diluted	$	1.08	$	0.96	$	3.07	$	3.10

See accompanying notes to consolidated financial statements.

Consolidated Statements of Comprehensive Income
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions)

	Quarter Ended				Nine-Month Period Ended
	Feb. 27, 2022		Feb. 28, 2021		Feb. 27, 2022		Feb. 28, 2021
Net earnings, including earnings attributable to redeemable and noncontrolling interests	$	662.6	$	603.8	$	1,909.2	$	1,946.1
Other comprehensive (loss) income, net of tax:
Foreign currency translation		(122.5)		12.5		(184.9)		102.4
Other fair value changes:
Hedge derivatives		(30.8)		0.1		(10.4)		(10.1)
Reclassification to earnings:
Foreign currency translation		342.2		-		342.2		-
Amortization of losses and prior service costs		22.3		19.8		53.5		59.1
Hedge derivatives		30.2		5.4		34.4		4.7
Other comprehensive income, net of tax		241.4		37.8		234.8		156.1
Total comprehensive income		904.0		641.6		2,144.0		2,102.2
Comprehensive income (loss) attributable to redeemable and noncontrolling interests		2.3		21.0		(47.0)		107.5
Comprehensive income attributable to General Mills	$	901.7	$	620.6	$	2,191.0	$	1,994.7

See accompanying notes to consolidated financial statements.

Consolidated Balance Sheets
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions, Except Par Value)
	Feb. 27, 2022		May 30, 2021
		(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	844.4	$	1,505.2
Receivables		1,750.4		1,638.5
Inventories		1,710.0		1,820.5
Prepaid expenses and other current assets		723.8		790.3
Total current assets		5,028.6		5,754.5
Land, buildings, and equipment		3,287.9		3,606.8
Goodwill		14,546.7		14,062.4
Other intangible assets		7,010.9		7,150.6
Other assets		1,269.7		1,267.6
Total assets	$	31,143.8	$	31,841.9
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	3,474.6	$	3,653.5
Current portion of long-term debt		600.7		2,463.8
Notes payable		724.3		361.3
Other current liabilities		2,039.4		1,787.2
Total current liabilities		6,839.0		8,265.8
Long-term debt		10,944.7		9,786.9
Deferred income taxes		2,166.0		2,118.4
Other liabilities		1,118.4		1,292.7
Total liabilities		21,068.1		21,463.8
Redeemable interest		-		604.9
Stockholders' equity:
Common stock, 754.6 shares issued, $0.10 par value		75.5		75.5
Additional paid-in capital		1,162.3		1,365.5
Retained earnings		17,713.1		17,069.8
Common stock in treasury, at cost, shares of 152.4 and 146.9		(7,015.3)		(6,611.2)
Accumulated other comprehensive loss		(2,122.7)		(2,429.2)
Total stockholders' equity		9,812.9		9,470.4
Noncontrolling interests		262.8		302.8
Total equity		10,075.7		9,773.2
Total liabilities and equity	$	31,143.8	$	31,841.9

See accompanying notes to consolidated financial statements.

Consolidated Statements of Total Equity and Redeemable Interest
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions, Except per Share Data)

	Quarter Ended
	Feb. 27, 2022			Feb. 28, 2021
	Shares	Amount		Shares	Amount
Total equity, beginning balance		$	9,804.7		$	8,852.6
Common stock, 1 billion shares authorized, $0.10 par value	754.6		75.5	754.6		75.5
Additional paid-in capital:
Beginning balance			1,365.1			1,333.3
Stock compensation plans			11.5			(8.3)
Unearned compensation related to stock unit awards			(19.1)			(0.5)
Earned compensation			31.7			20.7
Decrease in redemption value of redeemable interest			-			8.6
Reversal of cumulative redeemable interest value adjustments			(207.4)			-
Acquisition of noncontrolling interest			(19.5)			-
Ending balance			1,162.3			1,353.8
Retained earnings:
Beginning balance			17,363.2			16,374.2
Net earnings attributable to General Mills			660.3			595.7
Cash dividends declared ($0.51 and $0.51 per share)			(310.4)			(314.9)
Ending balance			17,713.1			16,655.0
Common stock in treasury:
Beginning balance	(151.4)		(6,915.2)	(143.2)		(6,365.4)
Shares purchased	(2.6)		(175.5)	-		(0.5)
Stock compensation plans	1.6		75.4	0.4		14.6
Ending balance	(152.4)		(7,015.3)	(142.8)		(6,351.3)
Accumulated other comprehensive loss:
Beginning balance			(2,364.1)			(2,867.6)
Other comprehensive income			241.4			24.9
Ending balance			(2,122.7)			(2,842.7)
Noncontrolling interests:
Beginning balance			280.2			302.6
Comprehensive income			2.3			3.7
Distributions to noncontrolling interest holders			(108.3)			(8.7)
Reclassification from redeemable interest			561.6			-
Reversal of cumulative redeemable interest value adjustments			207.4			-
Divestiture			(680.4)			-
Ending balance			262.8			297.6
Total equity, ending balance		$	10,075.7		$	9,187.9
Redeemable interest:
Beginning balance		$	561.6		$	587.7
Comprehensive income			-			17.3
Decrease in redemption value of redeemable interest			-			(8.6)
Distributions to redeemable interest holder			-			(0.4)
Reclassification to noncontrolling interest			(561.6)			-
Ending balance		$	-		$	596.0
See accompanying notes to consolidated financial statements.

Consolidated Statements of Total Equity and Redeemable Interest
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions, Except per Share Data)

	Nine-Month Period Ended
	Feb. 27, 2022			Feb. 28, 2021
	Shares	Amount		Shares	Amount
Total equity, beginning balance		$	9,773.2		$	8,349.5
Common stock, 1 billion shares authorized, $0.10 par value	754.6		75.5	754.6		75.5
Additional paid-in capital:
Beginning balance			1,365.5			1,348.6
Stock compensation plans			15.5			12.9
Unearned compensation related to stock unit awards			(91.3)			(78.2)
Earned compensation			85.4			68.9
Decrease in redemption value of redeemable interest			14.1			1.6
Reversal of cumulative redeemable interest value adjustments			(207.4)			-
Acquisition of noncontrolling interest			(19.5)			-
Ending balance			1,162.3			1,353.8
Retained earnings:
Beginning balance			17,069.8			15,982.1
Net earnings attributable to General Mills			1,884.5			1,923.0
Cash dividends declared ($2.04 and $2.02 per share)			(1,241.2)			(1,244.4)
Adoption of current expected credit loss accounting requirements			-			(5.7)
Ending balance			17,713.1			16,655.0
Common stock in treasury:
Beginning balance	(146.9)		(6,611.2)	(144.8)		(6,433.3)
Shares purchased	(8.8)		(550.5)	-		(0.6)
Stock compensation plans	3.3		146.4	2.0		82.6
Ending balance	(152.4)		(7,015.3)	(142.8)		(6,351.3)
Accumulated other comprehensive loss:
Beginning balance			(2,429.2)			(2,914.4)
Other comprehensive income			306.5			71.7
Ending balance			(2,122.7)			(2,842.7)
Noncontrolling interests:
Beginning balance			302.8			291.0
Comprehensive (loss) income			(17.8)			31.8
Distributions to noncontrolling interest holders			(110.8)			(25.2)
Reclassification from redeemable interest			561.6			-
Reversal of cumulative redeemable interest value adjustments			207.4			-
Divestiture			(680.4)			-
Ending balance			262.8			297.6
Total equity, ending balance		$	10,075.7		$	9,187.9
Redeemable interest:
Beginning balance		$	604.9		$	544.6
Comprehensive (loss) income			(29.2)			75.7
Decrease in redemption value of redeemable interest			(14.1)			(1.6)
Distributions to redeemable interest holder			-			(22.7)
Reclassification to noncontrolling interest			(561.6)			-
Ending balance		$	-		$	596.0
See accompanying notes to consolidated financial statements.

Consolidated Statements of Cash Flows
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions)
	Nine-Month Period Ended
	Feb. 27, 2022		Feb. 28, 2021
Cash Flows - Operating Activities
Net earnings, including earnings attributable to redeemable and noncontrolling interests	$	1,909.2	$	1,946.1
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		430.6		454.5
After-tax earnings from joint ventures		(92.0)		(89.5)
Distributions of earnings from joint ventures		49.0		41.9
Stock-based compensation		80.3		69.5
Deferred income taxes		81.3		110.9
Pension and other postretirement benefit plan contributions		(20.7)		(25.7)
Pension and other postretirement benefit plan costs		(10.6)		(25.5)
Divestitures gain		(170.1)		-
Restructuring, impairment, and other exit costs		(62.5)		5.7
Changes in current assets and liabilities, excluding the effects of acquisition and divestitures		91.5		(145.4)
Other, net		(57.9)		(134.6)
Net cash provided by operating activities		2,228.1		2,207.9
Cash Flows - Investing Activities
Purchases of land, buildings, and equipment		(350.6)		(346.4)
Acquisition		(1,201.3)		-
Proceeds from divestitures, net of cash divested		46.1		-
Investments in affiliates, net		30.1		18.1
Proceeds from disposal of land, buildings, and equipment		1.6		1.8
Other, net		12.3		(5.5)
Net cash used by investing activities		(1,461.8)		(332.0)
Cash Flows - Financing Activities
Change in notes payable		471.5		(96.9)
Issuance of long-term debt		1,935.2		1,576.5
Payment of long-term debt		(2,278.2)		(1,159.0)
Debt exchange participation incentive cash payment		-		(201.4)
Proceeds from common stock issued on exercised options		96.2		39.4
Purchases of common stock for treasury		(550.5)		(0.6)
Dividends paid		(934.1)		(932.4)
Distributions to noncontrolling and redeemable interest holders		(110.8)		(47.9)
Other, net		(26.8)		(30.4)
Net cash used by financing activities		(1,397.5)		(852.7)
Effect of exchange rate changes on cash and cash equivalents		(29.6)		53.2
(Decrease) increase in cash and cash equivalents		(660.8)		1,076.4
Cash and cash equivalents - beginning of year		1,505.2		1,677.8
Cash and cash equivalents - end of period	$	844.4	$	2,754.2
Cash Flow from changes in current assets and liabilities, excluding the effects of acquisition and divestitures:
Receivables	$	(214.5)	$	(119.2)
Inventories		102.5		(302.2)
Prepaid expenses and other current assets		41.5		58.8
Accounts payable		(14.0)		154.7
Other current liabilities		176.0		62.5
Changes in current assets and liabilities	$	91.5	$	(145.4)
See accompanying notes to consolidated financial statements.

GENERAL MILLS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) Background

The accompanying Consolidated Financial Statements of General Mills, Inc. (we, us, our, General Mills, or the Company) have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and with the rules and regulations for reporting on Form 10-Q. Accordingly, they do not include certain information and disclosures required for comprehensive financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal recurring nature, including the elimination of all intercompany transactions and any noncontrolling and redeemable interests’ share of those transactions. Operating results for the quarter ended February 27, 2022, are not necessarily indicative of the results that may be expected for the fiscal year ending May 29, 2022.

These statements should be read in conjunction with the Consolidated Financial Statements and footnotes included in our Annual Report on Form 10-K for the fiscal year ended May 30, 2021. The accounting policies used in preparing these Consolidated Financial Statements are the same as those described in Note 2 to the Consolidated Financial Statements in that Form 10-K.

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

(2) Acquisition and Divestitures

During the third quarter of fiscal 2022, we completed the sale of our interests in Yoplait SAS, Yoplait Marques SNC and Liberté Marques Sàrl to Sodiaal International (Sodiaal) in exchange for Sodiaal’s interest in our Canadian yogurt business, a modified agreement for the use of Yoplait and Liberté brands in the United States and Canada, and cash. We recorded a net pre-tax gain of $148.8 million on the sale of these businesses during the third quarter of fiscal 2022. These transactions are subject to sale price adjustments in future periods that could impact the net pre-tax gain recorded.

During the second quarter of fiscal 2022, we entered into definitive agreements to sell our European dough businesses. During the third quarter of fiscal 2022, we recorded a net pre-tax gain on sale of $21.3 million related to certain of these agreements and the remaining transactions are expected to close by the end of fiscal 2022, subject to appropriate labor consultations, regulatory approvals, and other customary closing conditions. The associated assets and liabilities have an immaterial impact on the presentation of our Consolidated Balance Sheets as of February 27, 2022.

During the first quarter of fiscal 2022, we acquired the Tyson Foods’ pet treats business for $1.2 billion in cash. We financed the transaction with a combination of cash on hand and short-term debt. We consolidated the Tyson Foods’ pet treats business into our Consolidated Balance Sheets and recorded goodwill of $759.4 million, indefinite-lived intangible assets for the Nudges, Top Chews and True Chews brands totaling $330.0 million in aggregate, and a finite-lived customer relationship asset of $40.0 million. The goodwill is included in the Pet reporting unit and is deductible for tax purposes. The pro forma effects of this acquisition were not material. The consolidated results of the Tyson Foods’ pet treat business are reported in our Pet operating segment on a one-month lag. Accordingly, our Consolidated Statements of Earnings include seven months of operating results for the acquired business for the nine-month period ended February 27, 2022. In the third quarter of fiscal 2022, we recorded a purchase price adjustment that resulted in a $2.9 million increase to goodwill.

(3) Restructuring, Impairment, and Other Exit Costs

Restructuring charges were as follows:

	Quarter Ended				Nine-Month Period Ended
In Millions	Feb. 27, 2022		Feb. 28, 2021		Feb. 27, 2022		Feb. 28, 2021
International manufacturing and logistics operations	$	1.7	$	-	$	14.3	$	-
Charges (recoveries) associated with restructuring actions previously announced		7.6		11.7		(6.4)		13.6
Total restructuring charges	$	9.3	$	11.7	$	7.9	$	13.6

In the third quarter of fiscal 2022, we did not undertake any new restructuring actions. We recorded $1.7 million of restructuring charges in the third quarter of fiscal 2022 and $14.3 million of restructuring charges in the nine-month period ended February 27, 2022, related to the restructuring actions in the International segment to drive efficiencies in manufacturing and logistics operations approved in the second quarter of fiscal 2022. We recorded $7.6 million of restructuring charges in the third quarter of fiscal 2022 and a $6.4 million net recovery of restructuring charges in the nine-month period ended February 27, 2022, related to restructuring actions

previously announced. We recorded $11.7 million of restructuring charges in the third quarter of fiscal 2021 and $13.6 million of restructuring charges in the nine-month period ended February 28, 2021, related to restructuring actions previously announced. The charges associated with restructuring actions previously announced primarily related to actions designed to better align our organizational structure and resources with strategic initiatives and drive efficiencies in manufacturing and logistics operations. We expect these actions to be completed by the end of fiscal 2024. Certain actions are subject to union negotiations and works counsel consultations, where required.

In the third quarter of fiscal 2022, we decreased the estimate of expected restructuring charges that we expect to incur related to actions designed to better align our organizational structure and resources with strategic initiatives to approximately $150 million to $160 million, of which approximately $120 million to $130 million will be cash. These charges are expected to consist primarily of severance and other benefits costs and other charges, including consulting and professional fees, contract termination costs, and fixed asset write-offs.

We paid net $70.4 million of cash in the nine-month period ended February 27, 2022, related to restructuring actions previously announced. We paid net $7.9 million of cash in the same period of fiscal 2021.

Restructuring charges are recorded in our Consolidated Statements of Earnings as follows:

	Quarter Ended				Nine-Month Period Ended
In Millions	Feb. 27, 2022		Feb. 28, 2021		Feb. 27, 2022		Feb. 28, 2021
Restructuring, impairment, and other exit costs	$	7.1	$	11.0	$	5.1	$	11.9
Cost of sales		2.2		0.7		2.8		1.7
Total restructuring charges	$	9.3	$	11.7	$	7.9	$	13.6

The roll forward of our restructuring and other exit cost reserves, included in other current liabilities, is as follows:

In Millions	Total
Reserve balance as of May 30, 2021	$	148.8
Fiscal 2022 charges, including foreign currency translation		1.4
Utilized in fiscal 2022		(61.4)
Reserve balance as of Feb. 27, 2022	$	88.8

The reserve balance primarily consists of expected severance payments associated with restructuring actions.

The charges recognized in the roll forward of our reserves for restructuring and other exit costs do not include items charged directly to expense (e.g., asset impairment charges, accelerated depreciation, the gain or loss on the sale of restructured assets, and the write-off of spare parts) and other periodic exit costs are recognized as incurred, as those items are not reflected in our restructuring and other exit cost reserves on our Consolidated Balance Sheets.

(4) Goodwill and Other Intangible Assets

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

In Millions	Feb. 27, 2022		May 30, 2021
Goodwill	$	14,546.7	$	14,062.4
Other intangible assets:
Intangible assets not subject to amortization:
Brands and other indefinite-lived intangibles		6,731.2		6,628.1
Intangible assets subject to amortization:
Franchise agreements, customer relationships, and other finite-lived intangibles		403.3		823.4
Less accumulated amortization		(123.6)		(300.9)
Intangible assets subject to amortization, net		279.7		522.5
Other intangible assets		7,010.9		7,150.6
Total	$	21,557.6	$	21,213.0

Based on the carrying value of finite-lived intangible assets as of February 27, 2022, annual amortization expense for each of the next five fiscal years is estimated to be approximately $20 million.

During the third quarter of fiscal 2022, we changed our organizational and management structure to streamline our global operations. As a result of these changes, we reassessed our operating segments as well as our reporting units. Under our new organizational structure, our chief operating decision maker assesses performance and makes decisions about resources to be allocated to our segments at the North America Retail, International, Pet, and North America Foodservice operating segment level. See Note 17 for additional information on our operating segments.

The changes in the carrying amount of goodwill during the nine-month period ended February 27, 2022, were as follows:

In Millions	North America Retail		Pet		North America Foodservice		International		Joint Ventures		Total
Balance as of May 30, 2021	$	6,689.3	$	5,300.5	$	648.8	$	978.2	$	445.6	$	14,062.4
Acquisition		-		762.3		-		-		-		762.3
Divestitures		-		-		-		(198.8)		-		(198.8)
Other activity, primarily foreign currency translation		(6.3)		-		-		(39.1)		(33.8)		(79.2)
Balance as of Feb. 27, 2022	$	6,683.0	$	6,062.8	$	648.8	$	740.3	$	411.8	$	14,546.7

The changes in the carrying amount of other intangible assets during the nine-month period ended February 27, 2022, were as follows:

In Millions		Total
Balance as of May 30, 2021	$	7,150.6
Acquisition		370.0
Divestitures		(621.8)
Intellectual property intangible asset		210.4
Other activity, primarily foreign currency translation		(98.3)
Balance as of Feb. 27, 2022	$	7,010.9

Our annual goodwill and indefinite-lived intangible assets impairment test was performed on the first day of the second quarter of fiscal 2022, 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.

The excess fair value as of the fiscal 2022 test date of the Uncle Toby’s brand intangible asset is as follows:

In Millions		Carrying Value of Intangible Asset			Excess Fair Value as of Fiscal 2022 Test Date
Uncle Toby's	$	55.0			7%

In addition, while having significant coverage as of our fiscal 2022 assessment date, the Progresso, Green Giant, and EPIC brand intangible assets had risk of decreasing coverage. We will continue to monitor these businesses for potential impairment.

The organizational changes also resulted in changes in certain reporting units, one level below the segment level, and were considered a triggering event that required a goodwill impairment test during the third quarter of fiscal 2022. We determined there was no impairment of the goodwill of the impacted reporting units as their related fair values were substantially in excess of the carrying values.

(5) Inventories

The components of inventories were as follows:

In Millions	Feb. 27, 2022		May 30, 2021
Raw materials and packaging	$	458.4	$	411.9
Finished goods		1,408.5		1,506.9
Grain		168.3		111.2
Excess of FIFO over LIFO cost		(325.2)		(209.5)
Total	$	1,710.0	$	1,820.5

(6) Risk Management Activities

Many commodities we use in the production and distribution of our products are exposed to market price risks. We utilize derivatives to manage price risk for our principal ingredients and energy costs, including grains (oats, wheat, and corn), oils (principally soybean), dairy products, natural gas, and diesel fuel. Our primary objective when entering into these derivative contracts is to achieve certainty with regard to the future price of commodities purchased for use in our supply chain. We manage our exposures through a combination of purchase orders, long-term contracts with suppliers, exchange-traded futures and options, and over-the-counter options and swaps. We offset our exposures based on current and projected market conditions and generally seek to acquire the inputs at as close as possible to or below our planned cost.

We use derivatives to manage our exposure to changes in commodity prices. We do not perform the assessments required to achieve hedge accounting for commodity derivative positions. Accordingly, the changes in the values of these derivatives are recorded currently in cost of sales in our Consolidated Statements of Earnings.

Although we do not meet the criteria for cash flow hedge accounting, we believe that these instruments are effective in achieving our objective of providing certainty in the future price of commodities purchased for use in our supply chain. Accordingly, for purposes of measuring segment operating performance, these gains and losses are reported in unallocated corporate items outside of segment operating results until such time that the exposure we are managing affects earnings. At that time we reclassify the gain or loss from unallocated corporate items to segment operating profit, allowing our operating segments to realize the economic effects of the derivative without experiencing any resulting mark-to-market volatility, which remains in unallocated corporate items.

Unallocated corporate items for the quarters and nine-month periods ended February 27, 2022, and February 28, 2021, included:

	Quarter Ended				Nine-Month Period Ended
In Millions	Feb. 27, 2022		Feb. 28, 2021		Feb. 27, 2022		Feb. 28, 2021
Net gain on mark-to-market valuation of certain commodity positions	$	72.3	$	51.0	$	119.3	$	95.0
Net (gain) loss on commodity positions reclassified from unallocated corporate items to segment operating profit		(48.1)		(3.9)		(118.7)		12.8
Net mark-to-market revaluation of certain grain inventories		(44.2)		8.6		15.6		10.2
Net mark-to-market valuation of certain commodity positions recognized in unallocated corporate items	$	(20.0)	$	55.7	$	16.2	$	118.0

As of February 27, 2022, the net notional value of commodity derivatives was $634.1 million, of which $147.7 million related to energy inputs and $486.4 million related to agricultural inputs. These contracts relate to inputs that generally will be utilized within the next 12 months.

The fair values of the derivative positions used in our risk management activities and other assets recorded at fair value were not material as of February 27, 2022 and were Level 1 or Level 2 assets and liabilities in the fair value hierarchy. We did not significantly change our valuation techniques from prior periods.

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. All of our accounts payable remain as obligations to our suppliers as stated in our supplier agreements. As of February 27, 2022, $1,382.8 million of our total accounts payable were payable to suppliers who utilize these third party services. As of February 28, 2021, $1,420.3 million of our total accounts payable were payable to suppliers who utilize these third party services.

(7) Debt

The components of notes payable were as follows:

In Millions	Feb. 27, 2022		May 30, 2021
U.S. commercial paper	$	604.5	$	-
Financial institutions		119.8		361.3
Total	$	724.3	$	361.3

To ensure availability of funds, we maintain bank credit lines and have commercial paper programs available to us in the United States and Europe. We also have committed and asset-backed credit lines that support our foreign operations.

The following table details the fee-paid committed and uncommitted credit lines we had available as of February 27, 2022:

In Billions	Facility Amount		Borrowed Amount
Credit facility expiring:
April 2026	$	2.7	$	-
Total committed credit facilities		2.7		-
Uncommitted credit facilities		0.6		0.1
Total committed and uncommitted credit facilities	$	3.3	$	0.1

The credit facilities contain covenants, including a requirement to maintain a fixed charge coverage ratio of at least 2.5 times. We were in compliance with all credit facility covenants as of February 27, 2022.

Long-Term Debt

The fair values and carrying amounts of long-term debt, including the current portion, were $11,841.5 million and $11,545.4 million, respectively, as of February 27, 2022. The fair value of long-term debt was estimated using market quotations and discounted cash flows based on our current incremental borrowing rates for similar types of instruments. Long-term debt is a Level 2 liability in the fair value hierarchy.

In the second quarter of fiscal 2022, we repaid €500.0 million of 0.0 percent fixed-rate notes due November 16, 2021 using proceeds from the issuance of €500.0 million of 0.125 percent fixed-rate notes due November 15, 2025.

In the second quarter of fiscal 2022, we issued €250.0 million of floating-rate notes due May 16, 2023. We used the net proceeds to repay a portion of our outstanding commercial paper and for general corporate purposes.

In the second quarter of fiscal 2022, we repaid $1,000.0 million of 3.15 percent fixed-rate notes due December 15, 2021 using proceeds from the issuance of $500.0 million of 2.25 percent notes due October 14, 2031 and commercial paper. The notes were redeemed on October 14, 2021.

In the first quarter of fiscal 2022, we issued €500.0 million of floating-rate notes due July 27, 2023. We used the net proceeds to repay €500.0 million of 0.0 percent fixed-rate notes due August 21, 2021.

In the first quarter of fiscal 2022, we repaid €200.0 million of 2.2 percent fixed-rate notes due June 24, 2021 using proceeds from the issuance of €50.0 million of 2.2 percent fixed-rate notes due November 29, 2021 and borrowings under a committed credit facility.

In the fourth quarter of fiscal 2021, we repaid $600.0 million of 3.2 percent fixed-rate notes and $850.0 million of floating-rate notes with cash on hand.

In the third quarter of fiscal 2021, we completed an offer to exchange certain series of outstanding notes for a combination of newly issued notes and cash. Holders exchanged $603.9 million of notes previously issued with rates between 4.15 percent and 5.4 percent for $605.2 million of newly issued 3.0 percent fixed-rate notes due February 1, 2051 and $201.4 million of cash, representing a participation incentive.

In the second quarter of fiscal 2021, we issued €500.0 million principal amount of 0.0 percent fixed-rate notes due November 16, 2021. We used the net proceeds to repay €200.0 million of 0.0 percent fixed-rate notes and for general corporate purposes.

In the first quarter of fiscal 2021, we issued €500.0 million principal amount of 0.0 percent fixed-rate notes due August 21, 2021. We used the net proceeds, together with cash on hand, to repay €500.0 million of 2.1 percent fixed-rate notes.

Certain of our long-term debt agreements contain restrictive covenants. As of February 27, 2022, we were in compliance with all of these covenants.

(8) Redeemable and Noncontrolling Interests

During the third quarter of fiscal 2022, we completed the sale of our interests in Yoplait SAS, Yoplait Marques SNC and Liberté Marques Sàrl to Sodiaal in exchange for Sodiaal’s interest in our Canadian yogurt business, a modified agreement for the use of Yoplait and Liberté brands in the United States and Canada, and cash. Please see Note 2 to the Consolidated Financial Statements.

Up to the date of the divestiture, Sodiaal held the remaining interests in each of the entities. On the acquisition date, we recorded the fair value of Sodiaal’s 49 percent euro-denominated interest in Yoplait SAS as a redeemable interest on our Consolidated Balance Sheets. Sodiaal had the right to put all or a portion of its redeemable interest to us at fair value until the divestiture closed in the third quarter of fiscal 2022. In connection with the divestiture, cumulative adjustments made to the redeemable interest related to the fair value put feature were reversed against additional paid-in capital, where changes in the redemption amount were historically recorded, and the resulting carrying value of the noncontrolling interests were included in the calculation of the gain on divestiture.

A subsidiary of Yoplait SAS had an exclusive milk supply agreement for its European operations with Sodiaal through November 28, 2021. Net purchases totaled $99.5 million for the six-month period ended November 28, 2021, and $155.0 million for the nine-month period ended February 28, 2021.

The third-party holder of the General Mills Cereals, LLC (GMC) Class A Interests receives quarterly preferred distributions from available net income based on the application of a floating preferred return rate to the holder’s capital account balance established in the most recent mark-to-market valuation (currently $251.5 million). On June 1, 2021, the floating preferred return rate on GMC’s Class A Interests was reset to the sum of three-month LIBOR plus 160 basis points. The preferred return rate is adjusted every three years through a negotiated agreement with the Class A Interest holder or through a remarketing auction.

Our noncontrolling interests contain restrictive covenants. As of February 27, 2022, we were in compliance with all of these covenants.

(9) Stockholders’ Equity

The following tables provide details of total comprehensive income:

		Quarter Ended										Quarter Ended
		Feb. 27, 2022										Feb. 28, 2021
		General Mills						Noncontrolling Interests		Redeemable Interest		General Mills						Noncontrolling Interests		Redeemable Interest
In Millions		Pretax		Tax		Net		Net		Net		Pretax		Tax		Net		Net		Net
Net earnings, including earnings attributable to redeemable and noncontrolling interests					$	660.3	$	2.3		-					$	595.7	$	1.1	$	7.0
Other comprehensive income (loss):
Foreign currency translation	$	(125.7)	$	3.2		(122.5)		-		-	$	(7.8)	$	6.7		(1.1)		2.6		11.0
Other fair value changes:
Hedge derivatives		(23.9)		(6.9)		(30.8)		-		-		2.5		(1.5)		1.0		-		(0.9)
Reclassification to earnings:
Foreign currency translation (a)		342.2		-		342.2		-		-		-		-		-		-		-
Amortization of losses and prior service costs (b)		28.8		(6.5)		22.3		-		-		25.6		(5.8)		19.8		-		-
Hedge derivatives (c)		23.1		7.1		30.2		-		-		6.8		(1.6)		5.2		-		0.2
Other comprehensive income (loss)	$	244.5	$	(3.1)		241.4		-		-	$	27.1	$	(2.2)		24.9		2.6		10.3
Total comprehensive income					$	901.7	$	2.3	$	-					$	620.6	$	3.7	$	17.3

(a)Loss reclassified from AOCI into earnings is reported in divestitures gain related to the divestiture of our interests in Yoplait SAS, Yoplait Marques SNC and Liberte Marques Sarl to Sodiaal in the third quarter of fiscal 2022.

(b)Loss reclassified from AOCI into earnings is reported in benefit plan non-service income.

(c)Loss reclassified from AOCI into earnings is reported in interest, net for interest rate swaps and in cost of sales and SG&A expenses for foreign exchange contracts.

		Nine-Month Period Ended										Nine-Month Period Ended
		Feb. 27, 2022										Feb. 28, 2021
		General Mills						Noncontrolling Interests		Redeemable Interest		General Mills						Noncontrolling Interests		Redeemable Interest
In Millions		Pretax		Tax		Net		Net		Net		Pretax		Tax		Net		Net		Net
Net earnings, including earnings attributable to redeemable and noncontrolling interests					$	1,884.5	$	7.2	$	17.5					$	1,923.0	$	3.9	$	19.2
Other comprehensive income (loss):
Foreign currency translation	$	(166.6)	$	53.7		(112.9)		(25.0)		(47.0)	$	(41.4)	$	58.3		16.9		27.9		57.6
Other fair value changes:
Hedge derivatives		8.0		(18.9)		(10.9)		-		0.5		(11.1)		2.0		(9.1)		-		(1.0)
Reclassification to earnings:
Foreign currency translation (a)		342.2		-		342.2
Amortization of losses and prior service costs (b)		68.8		(15.3)		53.5		-		-		76.7		(17.6)		59.1		-		-
Hedge derivatives (c)		23.0		11.6		34.6		-		(0.2)		6.7		(1.9)		4.8		-		(0.1)

Other comprehensive income (loss)	$	275.4	$	31.1		306.5		(25.0)		(46.7)	$	30.9	$	40.8		71.7		27.9		56.5
Total comprehensive income (loss)					$	2,191.0	$	(17.8)	$	(29.2)					$	1,994.7	$	31.8	$	75.7

(b)Loss reclassified from AOCI into earnings is reported in benefit plan non-service income.

(c)Loss reclassified from AOCI into earnings is reported in interest, net for interest rate swaps and in cost of sales and SG&A expenses for foreign exchange contracts.

Accumulated other comprehensive loss balances, net of tax effects, were as follows:

In Millions	Feb. 27, 2022		May 30, 2021
Foreign currency translation adjustments	$	(600.9)	$	(830.2)
Unrealized gain (loss) from:
Hedge derivatives		5.2		(18.5)
Pension, other postretirement, and postemployment benefits:
Net actuarial loss		(1,641.5)		(1,718.4)
Prior service credits		114.5		137.9
Accumulated other comprehensive loss	$	(2,122.7)	$	(2,429.2)

(10) Stock Plans

We have various stock-based compensation programs under which awards, including stock options, restricted stock, restricted stock units, and performance awards, may be granted to employees and non-employee directors. These programs and related accounting are described in Note 12 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended May 30, 2021.

Compensation expense related to stock-based payments recognized in the Consolidated Statements of Earnings was as follows:

	Quarter Ended						Nine-Month Period Ended
In Millions	Feb. 27, 2022			Feb. 28, 2021			Feb. 27, 2022			Feb. 28, 2021
Compensation expense related to stock-based payments	$	31.4		$	20.8		$	78.9		$	69.5

Compensation expense related to stock-based payments recognized in the Consolidated Statements of Earnings includes amounts recognized in restructuring, impairment, and other exit costs in fiscal 2022.

Windfall tax benefits from stock-based payments in income tax expense in our Consolidated Statements of Earnings were as follows:

	Quarter Ended						Nine-Month Period Ended
In Millions	Feb. 27, 2022			Feb. 28, 2021			Feb. 27, 2022			Feb. 28, 2021
Windfall tax benefits from stock-based payments	$	6.7		$	1.6		$	13.0		$	8.4

As of February 27, 2022, unrecognized compensation expense related to non-vested stock options, restricted stock units, and performance share units was $120.5 million. This expense will be recognized over 21 months, on average.

Net cash proceeds from the exercise of stock options less shares used for withholding taxes and the intrinsic value of options exercised were as follows:

	Nine-Month Period Ended
In Millions	Feb. 27, 2022		Feb. 28, 2021
Net cash proceeds	$	96.2	$	39.4
Intrinsic value of options exercised	$	44.4	$	24.2

We estimate the fair value of each stock option on the grant date using a Black-Scholes option-pricing model. Black-Scholes option-pricing models require us to make predictive assumptions regarding future stock price volatility, employee exercise behavior, and dividend yield. We estimate our future stock price volatility using the historical volatility over the expected term of the option, excluding time periods of volatility we believe a marketplace participant would exclude in estimating our stock price volatility. We also have considered, but did not use, implied volatility in our estimate, because trading activity in options on our stock, especially those with tenors of greater than 6 months, is insufficient to provide a reliable measure of expected volatility. Our method of selecting the other valuation assumptions is explained in Note 12 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended May 30, 2021.

The estimated fair values of stock options granted and the assumptions used for the Black-Scholes option-pricing model were as follows:

	Nine-Month Period Ended
	Feb. 27, 2022			Feb. 28, 2021
Estimated fair values of stock options granted	$	8.77		$	8.03
Assumptions:
Risk-free interest rate		1.5	%		0.7	%
Expected term		8.5	years		8.5	years
Expected volatility		20.2	%		19.5	%
Dividend yield		3.4	%		3.3	%

The total grant date fair value of restricted stock unit awards that vested during the period was as follows:

	Nine-Month Period Ended
In Millions	Feb. 27, 2022			Feb. 28, 2021
Total grant date fair value	$	79.0		$	73.0

(11) Earnings Per Share

Basic and diluted earnings per share (EPS) were calculated using the following:

	Quarter Ended				Nine-Month Period Ended
In Millions, Except per Share Data	Feb. 27, 2022		Feb. 28, 2021		Feb. 27, 2022		Feb. 28, 2021
Net earnings attributable to General Mills	$	660.3	$	595.7	$	1,884.5	$	1,923.0
Average number of common shares - basic EPS		606.8		615.0		608.6		614.6
Incremental share effect from: (a)
Stock options		2.9		2.0		2.4		2.6
Restricted stock units and performance share units		2.7		2.4		2.5		2.4
Average number of common shares - diluted EPS		612.4		619.4		613.5		619.6
Earnings per share – basic	$	1.09	$	0.97	$	3.10	$	3.13
Earnings per share – diluted	$	1.08	$	0.96	$	3.07	$	3.10

(a)Incremental shares from stock options, restricted stock units, and performance share units are computed by the treasury stock method.

Stock options, restricted stock units, and performance share units excluded from our computation of diluted EPS because they were not dilutive were as follows:

			Quarter Ended						Nine-Month Period Ended
	In Millions	Feb. 27, 2022			Feb. 28, 2021			Feb. 27, 2022			Feb. 28, 2021
	Anti-dilutive stock options, restricted stock units, and performance share units		1.0			4.8			4.5			3.4

(12) Share Repurchases

Share repurchases were as follows:

	Quarter Ended					Nine-Month Period Ended
In Millions	Feb. 27, 2022		Feb. 28, 2021		Feb. 27, 2022		Feb. 28, 2021
Shares of common stock		2.6		-		8.8		-
Aggregate purchase price	$	175.5	$	0.5	$	550.5	$	0.6

(13) Statements of Cash Flows

Our Consolidated Statements of Cash Flows include the following:

	Nine-Month Period Ended
In Millions	Feb. 27, 2022		Feb. 28, 2021
Net cash interest payments	$	234.2	$	286.1
Net income tax payments	$	397.3	$	459.8

(14) Retirement and Postemployment Benefits

Components of net periodic benefit (income) expense are as follows:

		Defined Benefit Pension Plans				Other Postretirement Benefit Plans				Postemployment Benefit Plans
		Quarter Ended				Quarter Ended				Quarter Ended
In Millions		Feb. 27, 2022		Feb. 28, 2021		Feb. 27, 2022		Feb. 28, 2021		Feb. 27, 2022		Feb. 28, 2021
Service cost	$	23.2	$	26.1	$	2.0	$	2.0	$	1.8	$	2.3
Interest cost		46.0		48.0		3.1		4.5		0.4		0.4
Expected return on plan assets		(102.8)		(105.3)		(6.6)		(8.7)		-		-
Amortization of losses (gains)		35.7		27.1		(2.7)		(1.3)		0.8		0.7
Amortization of prior service costs (credits)		0.2		0.3		(5.3)		(1.3)		0.1		0.1
Other adjustments		-		-		-		-		4.0		2.1
Net expense (income)	$	2.3	$	(3.8)	$	(9.5)	$	(4.8)	$	7.1	$	5.6

		Defined Benefit Pension Plans				Other Postretirement Benefit Plans				Postemployment Benefit Plans
		Nine-Month Period Ended				Nine-Month Period Ended				Nine-Month Period Ended
In Millions		Feb. 27, 2022		Feb. 28, 2021		Feb. 27, 2022		Feb. 28, 2021		Feb. 27, 2022		Feb. 28, 2021
Service cost	$	70.4	$	78.1	$	5.8	$	6.3	$	5.3	$	6.9
Interest cost		138.4		143.9		9.4		13.5		1.1		1.2
Expected return on plan assets		(308.5)		(315.4)		(20.0)		(26.0)		-		-
Amortization of losses (gains)		106.1		81.1		(8.1)		(3.8)		2.3		2.1
Amortization of prior service costs (credits)		0.6		0.9		(15.7)		(4.1)		0.3		0.5
Other adjustments		-		-		-		-		9.7		6.5
Curtailment gain		(14.3)		-		(5.7)		-		-		-
Net (income) expense	$	(7.3)	$	(11.4)	$	(34.3)	$	(14.1)	$	18.7	$	17.2

(15) Income Taxes

During the first quarter of fiscal 2022, the Brazilian tax authority, Secretaria da Receita Federal do Brasil (RFB), concluded audits of our 2016 through 2018 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. The RFB had previously proposed adjustments related to the goodwill amortization associated with our 2012 through 2015 tax return years. We believe we have meritorious defenses and intend to continue to contest the disallowance for all years.

(16) Contingencies

During fiscal 2020, we received notice from the tax authorities of the State of São Paulo, Brazil regarding our compliance with its state sales tax requirements. As a result, we have been assessed additional state sales taxes, interest, and penalties. We believe that we have meritorious defenses against this claim and will vigorously defend our position. As of February 27, 2022, we are unable to estimate any possible loss and have not recorded a loss contingency for this matter.

(17) Business Segment and Geographic Information

We operate in the packaged foods industry. In the third quarter of fiscal 2022, we completed a new organization structure to streamline our global operations. This global reorganization required us to reevaluate our operating segments. Under our new organization structure, our chief operating decision maker assesses performance and makes decisions about resources to be allocated to our operating segments as follows: North America Retail; International; Pet; and North America Foodservice.

We have restated our net sales by segment and segment operating profit to reflect our new operating segments. These segment changes had no effect on previously reported consolidated net sales, operating profit, net earnings attributable to General Mills, or earnings per share.

Our North America Retail operating segment includes convenience store businesses from our former Convenience Stores & Foodservice segment. Within our North America Retail operating segment, our former U.S. Cereal operating unit and U.S. Yogurt operating unit have been combined into the U.S. Morning Foods operating unit. Additionally, the U.S. Meals & Baking Solutions operating unit combines the former U.S. Meals & Baking operating unit with certain businesses from the U.S. Snacks operating unit. The Canada operating unit excludes Canada foodservice businesses which are now included in our North America Foodservice operating segment. The resulting North America Foodservice operating segment exclusively includes our foodservice business. Our International operating segment combines our former Europe & Australia and Asia & Latin America operating segments. Our Pet operating segment is unchanged.

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, snack bars, and refrigerated yogurt.

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, refrigerated and frozen dough products, salty snacks, snack bars, dessert and baking mixes, and shelf stable vegetables. 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 and franchise fees are reported in the region or country where the end customer or franchisee is located.

Our Pet operating segment includes pet food products sold primarily in the United States and Canada in national pet superstore chains, e-commerce retailers, grocery stores, regional pet store chains, mass merchandisers, and veterinary clinics and hospitals. Our product categories include dog and cat food (dry foods, wet foods, and treats) made with whole meats, fruits, vegetables and other high-quality natural ingredients. Our tailored pet product offerings address specific dietary, lifestyle, and life-stage needs and span different product types, diet types, breed sizes for dogs, lifestages, flavors, product functions, and textures and cuts for wet foods.

Our North America Foodservice segment consists of foodservice businesses in the United States and Canada. Our major product categories in our North America Foodservice operating segment are ready-to-eat cereals, snacks, refrigerated yogurt, frozen meals, unbaked and fully baked frozen dough products, baking mixes, and bakery flour. Many products we sell are branded to the consumer and nearly all are branded to our customers. We sell to distributors and operators in many customer channels including foodservice, vending, and supermarket bakeries.

Operating profit for these segments excludes unallocated corporate items, gain or loss on divestitures, and restructuring, impairment, and other exit costs. Unallocated corporate items include corporate overhead expenses, variances to planned North American employee benefits and incentives, certain charitable contributions, restructuring initiative project-related costs, 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:

		Quarter Ended				Nine-Month Period Ended
In Millions	Feb. 27, 2022			Feb. 28, 2021	Feb. 27, 2022		Feb. 28, 2021
Net sales:
North America Retail	$	2,811.9	$	2,786.0	$	8,567.1	$	8,539.3
International		721.0		939.8		2,566.0		2,710.9
Pet		567.7		436.3		1,649.1		1,288.0
North America Foodservice		437.1		357.9		1,319.4		1,065.2
Total	$	4,537.7	$	4,520.0	$	14,101.6	$	13,603.4
Operating profit:
North America Retail	$	611.5	$	628.8	$	1,935.5	$	2,076.8
International		35.9		41.4		155.9		180.8
Pet		110.6		102.3		357.3		311.9
North America Foodservice		35.2		40.6		174.9		137.6
Total segment operating profit	$	793.2	$	813.1	$	2,623.6	$	2,707.1
Unallocated corporate items		140.9		(24.5)		328.9		98.3
Divestitures gain		(170.1)		-		(170.1)		-
Restructuring, impairment, and other exit costs		7.1		11.0		5.1		11.9
Operating profit	$	815.3	$	826.6	$	2,459.7	$	2,596.9

Net sales for our North America Retail operating units were as follows:

	Quarter Ended				Nine-Month Period Ended
In Millions	Feb. 27, 2022		Feb. 28, 2021		Feb. 27, 2022		Feb. 28, 2021
U.S. Meals & Baking Solutions	$	968.0	$	990.7	$	3,032.6	$	3,169.0
U.S. Morning Foods		858.0		823.2		2,514.4		2,495.8
U.S. Snacks		745.0		726.8		2,282.3		2,172.0
Canada		240.9		245.3		737.8		702.5
Total	$	2,811.9	$	2,786.0	$	8,567.1	$	8,539.3

Net sales by class of similar products were as follows:

	Quarter Ended				Nine-Month Period Ended
In Millions	Feb. 27, 2022		Feb. 28, 2021		Feb. 27, 2022		Feb. 28, 2021
Snacks	$	925.3	$	871.9	$	2,827.4	$	2,608.6
Convenient meals		772.8		785.0		2,258.1		2,334.8
Cereal		754.4		715.4		2,227.6		2,168.7
Pet		568.1		436.3		1,649.5		1,288.0
Dough		446.6		498.0		1,458.8		1,456.8
Baking mixes and ingredients		465.9		416.8		1,379.4		1,293.6
Yogurt		349.3		505.3		1,362.3		1,513.5
Super-premium ice cream		151.4		164.0		596.2		596.4
Other		103.9		127.3		342.3		343.0
Total	$	4,537.7	$	4,520.0	$	14,101.6	$	13,603.4

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