General Mills 10-Q 2023-02-26

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

OR

15(d)

OF

THE

SECURITIES

EXCHANGE

ACT

OF

1934

FOR THE QUARTERLY

PERIOD ENDED

FEBRUARY 26, 2023

☐

TRANSITION

REPORT

PURSUANT

TO

SECTION

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

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 “emergin

g

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

13,

2023:

587,354,488

(excluding

167,258,840

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 26, 2023 and

February 27, 2022

Consolidated Statements of Comprehensive Income for the quarters and nine-month periods ended February

26, 2023 and February 27, 2022

Consolidated Balance Sheets as of February 26, 2023 and May 29, 2022

Consolidated Statements of Total Equity and Redeemable Interest for the quarters and nine-month periods

ended February 26, 2023 and February 27, 2022

Consolidated Statements of Cash Flows for the nine-month periods ended February 26, 2023 and February

27, 2022

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Item 4. Controls and Procedures

PART II – Other Information

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

Item 6. Exhibits

Signatures

PART

I.

FINANCIAL INFORMATION

Item 1. Financial Statements

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. 26, 2023

Feb. 27, 2022

Feb. 26, 2023

Feb. 27, 2022

Net sales

$

5,125.9

$

4,537.7

$

15,064.2

$

14,101.6

Cost of sales

3,461.1

3,134.0

10,246.6

9,469.3

Selling, general, and administrative expenses

946.9

751.4

2,632.5

2,337.6

Divestitures gain, net

(13.7)

(170.1)

(444.6)

(170.1)

Restructuring, impairment, and other exit costs

1.4

7.1

14.1

5.1

Operating profit

730.2

815.3

2,615.6

2,459.7

Benefit plan non-service income

(21.6)

(27.1)

(65.0)

(84.4)

Interest, net

98.3

86.5

277.5

275.1

Earnings before income taxes and after-tax earnings

from

joint ventures

653.5

755.9

2,403.1

2,269.0

Income taxes

108.3

123.2

471.5

451.8

After-tax earnings from joint ventures

12.7

29.9

57.9

92.0

Net earnings, including earnings attributable to redeemable

and noncontrolling interests

557.9

662.6

1,989.5

1,909.2

Net earnings attributable to redeemable and

noncontrolling interests

4.8

2.3

10.5

24.7

Net earnings attributable to General Mills

$

553.1

$

660.3

$

1,979.0

$

1,884.5

Earnings per share – basic

$

0.94

$

1.09

$

3.32

$

3.10

Earnings per share – diluted

$

0.92

$

1.08

$

3.28

$

3.07

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. 26, 2023

Feb. 27, 2022

Feb. 26, 2023

Feb. 27, 2022

Net earnings, including earnings attributable to

redeemable and noncontrolling interests

$

557.9

$

662.6

$

1,989.5

$

1,909.2

Other comprehensive income (loss), net of tax:

Foreign currency translation

12.5

(122.5)

(98.7)

(184.9)

Other fair value changes:

Hedge derivatives

(5.7)

(30.8)

(23.2)

(10.4)

Reclassification to earnings:

Foreign currency translation

-

342.2

(7.4)

342.2

Hedge derivatives

18.9

30.2

18.5

34.4

Amortization of losses and prior service costs

13.9

22.3

42.2

53.5

Other comprehensive income (loss), net of tax

39.6

241.4

(68.6)

234.8

Total comprehensive

income

597.5

904.0

1,920.9

2,144.0

Comprehensive income (loss) attributable to

redeemable and noncontrolling interests

4.9

2.3

9.9

(47.0)

Comprehensive income attributable to General Mills

$

592.6

$

901.7

$

1,911.0

$

2,191.0

See accompanying notes to consolidated financial statements.

Consolidated Balance Sheets

GENERAL MILLS, INC. AND SUBSIDIARIES

(In Millions, Except Par Value)

Feb. 26, 2023

May 29, 2022

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

618.7

$

569.4

Receivables

1,770.2

1,692.1

Inventories

2,083.3

1,867.3

Prepaid expenses and other current assets

643.8

802.1

Assets held for sale

-

158.9

Total current

assets

5,116.0

5,089.8

Land, buildings, and equipment

3,353.6

3,393.8

Goodwill

14,487.8

14,378.5

Other intangible assets

6,968.0

6,999.9

Other assets

1,274.4

1,228.1

Total assets

$

31,199.8

$

31,090.1

LIABILITIES

AND EQUITY

Current liabilities:

Accounts payable

$

3,868.2

$

3,982.3

Current portion of long-term debt

2,487.2

1,674.2

Notes payable

959.8

811.4

Other current liabilities

2,103.1

1,552.0

Total current

liabilities

9,418.3

8,019.9

Long-term debt

8,140.2

9,134.8

Deferred income taxes

2,151.6

2,218.3

Other liabilities

1,006.0

929.1

Total liabilities

20,716.1

20,302.1

Stockholders' equity:

Common stock,

754.6

shares issued, $

0.10

par value

75.5

Additional paid-in capital

1,191.1

1,182.9

Retained earnings

19,226.5

18,532.6

Common stock in treasury,

at cost, shares of

166.2

and

155.7

(8,220.1)

(7,278.1)

Accumulated other comprehensive loss

(2,038.5)

(1,970.5)

Total stockholders' equity

10,234.5

10,542.4

Noncontrolling interests

249.2

245.6

Total equity

10,483.7

10,788.0

Total liabilities and equity

$

31,199.8

$

31,090.1

See accompanying notes to consolidated financial statements.

Consolidated Statements of Total

Equity and Redeemable Interest

GENERAL MILLS, INC. AND SUBSIDIARIES

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

Quarter Ended

Feb. 26, 2023

Feb. 27, 2022

Shares

Amount

Shares

Amount

Total equity,

beginning balance

$

10,372.1

$

9,804.7

Common stock,

billion shares authorized, $

0.10

par value

754.6

75.5

754.6

75.5

Additional paid-in capital:

Beginning balance

1,155.3

1,365.1

Stock compensation plans

21.9

11.5

Unearned compensation related to stock unit awards

(14.8)

(19.1)

Earned compensation

28.7

31.7

Reversal of cumulative redeemable interest

value adjustments

-

(207.4)

Acquisition of noncontrolling interest

-

(19.5)

Ending balance

1,191.1

1,162.3

Retained earnings:

Beginning balance

18,991.9

17,363.2

Net earnings attributable to General Mills

553.1

660.3

Cash dividends declared ($

0.54

and $

0.51

per share)

(318.5)

(310.4)

Ending balance

19,226.5

17,713.1

Common stock in treasury:

Beginning balance

(164.4)

(8,023.5)

(151.4)

(6,915.2)

Shares purchased

(2.9)

(251.0)

(2.6)

(175.5)

Stock compensation plans

1.1

54.4

1.6

75.4

Ending balance

(166.2)

(8,220.1)

(152.4)

(7,015.3)

Accumulated other comprehensive loss:

Beginning balance

(2,078.0)

(2,364.1)

Other comprehensive income

39.5

241.4

Ending balance

(2,038.5)

(2,122.7)

Noncontrolling interests:

Beginning balance

250.9

280.2

Comprehensive income

4.9

2.3

Distributions to noncontrolling interest holders

(6.6)

(108.3)

Reclassification from redeemable interest

-

561.6

Reversal of cumulative redeemable interest

value adjustments

-

207.4

Divestiture

-

(680.4)

Ending balance

249.2

262.8

Total equity,

ending balance

$

10,483.7

$

10,075.7

Redeemable interest:

Beginning balance

$

-

$

561.6

Reclassification to noncontrolling interest

-

(561.6)

Ending balance

$

-

$

-

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. 26, 2023

Feb. 27, 2022

Shares

Amount

Shares

Amount

Total equity,

beginning balance

$

10,788.0

$

9,773.2

Common stock,

billion shares authorized, $

0.10

par value

754.6

75.5

754.6

75.5

Additional paid-in capital:

Beginning balance

1,182.9

1,365.5

Stock compensation plans

23.8

15.5

Unearned compensation related to stock unit awards

(100.6)

(91.3)

Earned compensation

85.0

85.4

Decrease in redemption value of

redeemable interest

-

14.1

Reversal of cumulative redeemable interest

value adjustments

-

(207.4)

Acquisition of noncontrolling interest

-

(19.5)

Ending balance

1,191.1

1,162.3

Retained earnings:

Beginning balance

18,532.6

17,069.8

Net earnings attributable to General Mills

1,979.0

1,884.5

Cash dividends declared ($

2.16

and $

2.04

per share)

(1,285.1)

(1,241.2)

Ending balance

19,226.5

17,713.1

Common stock in treasury:

Beginning balance

(155.7)

(7,278.1)

(146.9)

(6,611.2)

Shares purchased

(15.0)

(1,152.3)

(8.8)

(550.5)

Stock compensation plans

4.5

210.3

3.3

146.4

Ending balance

(166.2)

(8,220.1)

(152.4)

(7,015.3)

Accumulated other comprehensive loss:

Beginning balance

(1,970.5)

(2,429.2)

Other comprehensive (loss) income

(68.0)

306.5

Ending balance

(2,038.5)

(2,122.7)

Noncontrolling interests:

Beginning balance

245.6

302.8

Comprehensive income (loss)

9.9

(17.8)

Distributions to noncontrolling interest holders

(11.4)

(110.8)

Reclassification from redeemable interest

-

561.6

Reversal of cumulative redeemable interest

value adjustments

-

207.4

Divestiture

5.1

(680.4)

Ending balance

249.2

262.8

Total equity,

ending balance

$

10,483.7

$

10,075.7

Redeemable interest:

Beginning balance

$

-

$

604.9

Comprehensive loss

-

(29.2)

Decrease in redemption value of

redeemable interest

-

(14.1)

Reclassification to noncontrolling interest

-

(561.6)

Ending balance

$

-

$

-

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. 26, 2023

Feb. 27, 2022

Cash Flows - Operating Activities

Net earnings, including earnings attributable to redeemable and noncontrolling

interests

$

1,989.5

$

1,909.2

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

Depreciation and amortization

411.0

430.6

After-tax earnings from joint ventures

(57.9)

(92.0)

Distributions of earnings from joint ventures

36.6

49.0

Stock-based compensation

86.7

80.3

Deferred income taxes

(71.2)

81.3

Pension and other postretirement benefit plan contributions

(20.2)

(20.7)

Pension and other postretirement benefit plan costs

(20.2)

(10.6)

Divestitures gain, net

(444.6)

(170.1)

Restructuring, impairment, and other exit costs

(14.6)

(62.5)

Changes in current assets and liabilities, excluding the effects of

acquisitions and divestitures

21.3

91.5

Other, net

110.6

(57.9)

Net cash provided by operating activities

2,027.0

2,228.1

Cash Flows - Investing Activities

Purchases of land, buildings, and equipment

(351.3)

(350.6)

Acquisition, net of cash acquired

(251.5)

(1,201.3)

Proceeds from divestitures, net of cash divested

633.1

46.1

Investments in affiliates, net

(30.8)

30.1

Proceeds from disposal of land, buildings, and equipment

0.8

1.6

Other, net

(6.4)

12.3

Net cash used by investing activities

(6.1)

(1,461.8)

Cash Flows - Financing Activities

Change in notes payable

159.2

471.5

Issuance of long-term debt

501.8

1,935.2

Payment of long-term debt

(600.0)

(2,278.2)

Proceeds from common stock issued on exercised options

168.0

96.2

Purchases of common stock for treasury

(1,152.3)

(550.5)

Dividends paid

(967.4)

(934.1)

Distributions to noncontrolling and redeemable interest holders

(11.4)

(110.8)

Other, net

(53.5)

(26.8)

Net cash used by financing activities

(1,955.6)

(1,397.5)

Effect of exchange rate changes on cash and cash equivalents

(16.0)

(29.6)

Increase (decrease) in cash and cash equivalents

49.3

(660.8)

Cash and cash equivalents - beginning of year

569.4

1,505.2

Cash and cash equivalents - end of period

$

618.7

$

844.4

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

of

acquisitions and divestitures:

Receivables

$

(132.4)

$

(214.5)

Inventories

(237.0)

102.5

Prepaid expenses and other current assets

151.5

41.5

Accounts payable

(41.6)

(14.0)

Other current liabilities

280.8

176.0

Changes in current assets and liabilities

$

21.3

$

91.5

See accompanying notes to consolidated financial statements.

GENERAL MILLS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(Unaudited)

(1) Background

The accompanying

Consolidated Financial

Statements of

General Mills,

Inc. (we,

us, our,

General Mills,

or the Company)

have been

prepared in

accordance with

accounting principles

generally accepted

in the

United States

(GAAP) for

interim financial

information

and with

the rules

and regulations

for reporting

on Form

10-Q. Accordingly,

they do

not include

certain information

and disclosures

required

for

comprehensive

financial

statements.

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 fiscal

quarter ended

February 26,

2023,

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

ending May 28, 2023.

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

29, 2022. The

accounting policies used

in preparing these

Consolidated Financial

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

Statements in that Form 10-K.

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

(2) Acquisitions and Divestitures

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 consol

idated the TNT Crust business

into our Consolidated Balance

Sheets and recorded goodwill

of

$

154.3

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.

We

have

conducted

a

preliminary

assessment

of

the

fair

value

of

the

acquired

assets

and

liabilities

of

the

TNT

Crust

business

and

will

continue

to

review

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 these items.

The consolidated results of the

TNT Crust business are reported

in

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

During the

first quarter

of fiscal

2023,

we completed

the sale

of our

Helper main

meals and

Suddenly

Salad side

dishes business

to

Eagle Family Foods Group for $

606.8

million and recorded a pre-tax gain of $

442.2

million.

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.

During the third quarter of fiscal 2022, we sold a European dough business

and recorded a net pre-tax gain on sale of $

21.3

million.

During

the

first

quarter

of

fiscal

2022,

we

acquired

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 pet

treats

business

into

our

Consolidated

Balance

Sheets

and

recorded

goodwill

of

$

762.3

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 segment and is deductible for tax purposes. The pro forma

effects of this acquisition were not material.

(3) Restructuring, Impairment, and Other Exit Costs

In the nine-month period ended February 26, 2023, we did not undertake

any new restructuring actions. We

recorded $

2.1

million of

restructuring charges in the third quarter of fiscal 2023 and $

16.0

million of restructuring charges in the nine-month period ended

February 26, 2023, related to restructuring actions previously announced.

We recorded $

9.3

million of restructuring charges in the

third quarter of fiscal 2022 and $

7.9

million of restructuring charges in the nine-month period ended

February 27, 2022, related to

restructuring actions previously announced.

We

expect these actions to be completed by the end of

fiscal 2024

.

We paid net $

30.6

million of cash in the nine-month period ended February 26, 2023, related to restructuring

actions previously

announced. We

paid net $

70.4

million of cash in the same period of fiscal 2022.

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 29, 2022

$

36.8

Fiscal 2023 charges, including foreign currency translation

8.6

Utilized in fiscal 2023

(26.5)

Reserve balance as of Feb. 26, 2023

$

18.9

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. 26, 2023

May 29, 2022

Goodwill

$

14,487.8

$

14,378.5

Other intangible assets:

Intangible assets not subject to amortization:

Brands and other indefinite-lived intangibles

6,708.2

6,725.8

Intangible assets subject to amortization:

Customer relationships and other finite-lived intangibles

385.5

400.3

Less accumulated amortization

(125.7)

(126.2)

Intangible assets subject to amortization, net

259.8

274.1

Other intangible assets

6,968.0

6,999.9

Total

$

21,455.8

$

21,378.4

Based on the

carrying value of

finite-lived intangible assets

as of February

26, 2023, annual amortization

expense for each of

the next

five fiscal years is estimated to be approximately $

million.

The changes in the carrying amount of goodwill during the nine-month period

ended February 26, 2023, were as follows:

In Millions

North

America

Retail

Pet

North

America

Foodservice

International

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

-

154.3

-

154.3

Divestitures

(2.0)

-

(0.4)

-

(2.4)

Other activity, primarily

foreign currency translation

(8.5)

-

(27.2)

(6.9)

(42.6)

Balance as of Feb. 26, 2023

$

6,542.4

$

6,062.8

$

803.1

$

694.0

$

385.5

$

14,487.8

The changes in the carrying amount of other intangible assets during the nine-month

period ended February 26, 2023, were as follows:

In Millions

Total

Balance as of May 29, 2022

$

6,999.9

Acquisition

3.8

Divestiture

(3.6)

Other activity, primarily

foreign currency translation

(32.1)

Balance as of Feb. 26, 2023

$

6,968.0

Our

annual

goodwill

and

indefinite-lived

intangible

assets

impairment

test

was

performed

on

the

first

day

of

the

second

quarter

of

fiscal

2023,

and

we

determined

there

was

no

impairment

of

our

intangible

assets

as

their

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 2023

assessment date, the

Progresso

and

EPIC

brand intangible assets

had risk of decreasing

coverage. We

will continue to

monitor these businesses for potential impairment.

(5) Inventories

The components of inventories were as follows:

In Millions

Feb. 26, 2023

May 29, 2022

Raw materials and packaging

$

560.2

$

532.0

Finished goods

1,929.7

1,634.7

Grain

148.6

164.0

Excess of FIFO over LIFO cost

(555.2)

(463.4)

Total

$

2,083.3

$

1,867.3

(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 26, 2023, and February 27, 2022, included:

Quarter Ended

Nine-Month Period Ended

In Millions

Feb. 26, 2023

Feb. 27, 2022

Feb. 26, 2023

Feb. 27, 2022

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

commodity positions

$

(30.2)

$

72.3

$

(123.4)

$

119.3

Net gain on commodity positions reclassified from

unallocated corporate items to segment operating profit

(21.5)

(48.1)

(85.0)

(118.7)

Net mark-to-market revaluation of certain grain inventories

(14.9)

(44.2)

(58.0)

15.6

Net mark-to-market valuation of certain commodity

positions recognized in unallocated corporate items

$

(66.6)

$

(20.0)

$

(266.4)

$

16.2

As

of

February

26,

2023,

the

net

notional

value

of

commodity

derivatives

was

$

448.0

million,

of

which

$

153.0

million

energy inputs and $

295.0

million related to agricultural inputs. These contracts relate to inputs that generally

will be utilized within the

As of February 26, 2023, the notional value of foreign exchange derivatives was $

1,111.8

million.

We

also have net

investments in

foreign subsidiaries

that are denominated

in euros. As

of February

26, 2023, we

hedged a portion

of

these investments with €

2,942.8

million of euro-denominated bonds.

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 26, 2023,

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.

During

the third

quarter of

fiscal 2023,

in advance

of a

planned debt

refinancing,

we entered

into a

€

250.0

million notional

amount

forward-starting interest rate swap.

During

the

second

quarter

of

fiscal

2023,

we

entered

into

a

$

500.0

million

notional

amount

interest

rate

swap

to

convert

our

$

500.0

million fixed rate notes due

November 18, 2025

, to a floating rate.

Subsequent

to

the

end

of

the

third

quarter

of

fiscal

2023,

in

advance

of

planned

debt

refinancings,

we

entered

into

€

500.0

million

notional amount of forward-starting interest rate swaps and $

350.0

million notional amount of treasury locks.

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 26,

2023, $

1,483.9

million of

our

total accounts

payable were

payable

to suppliers

who utilize

these

third-party

services.

As

of

February

27,

2022,

$

1,382.8

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. 26, 2023

May 29, 2022

U.S. commercial paper

$

948.1

$

694.8

Financial institutions

11.7

116.6

Total

$

959.8

$

811.4

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 fee-paid committed and uncommitted credit

lines we had available as of February 26, 2023:

In Billions

Facility

Amount

Borrowed

Amount

Committed credit facility expiring April 2026

$

2.7

$

-

Uncommitted credit facilities

0.6

-

Total committed

and uncommitted credit facilities

$

3.3

$

-

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 26, 2023.

Long-Term

Debt

The fair

values and

carrying amounts

of long-term

debt, including

the current

portion, were

$

9,840.9

million and

$

10,627.4

million,

respectively,

as of

February

26,

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

2023,

we

issued

$

500.0

million

of

5.241

percent

notes

due

November 18, 2025

.

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

2023, we

issued €

250.0

million of

floating-rate notes

due

May 16, 2023

.

We

used the

net proceeds

to

repay €

250.0

million of

0.0

percent fixed-rate notes due

November 11, 2022

.

In

the fourth

quarter

of fiscal

2022,

we repaid

$

850.0

million

of

3.7

percent

fixed

rate notes

due

October 17, 2023

, using

proceeds

from the issuance of commercial paper.

In the fourth quarter of fiscal 2022, we issued €

250.0

million of

0.0

percent fixed-rate notes due

November 11, 2022

. We used the net

proceeds for general corporate purposes.

In the second quarter of fiscal 2022, we issued €

500.0

million of

0.125

percent fixed-rate notes due

November 15, 2025

. We used the

net proceeds to repay a portion of our €

500.0

million of

0.0

percent fixed-rate notes due

November 16, 2021

, and for general corporate

purposes.

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 issued $

500.0

million of

2.25

percent notes due

October 14, 2031

. We used the net proceeds

together with proceeds from the issuance of commercial paper,

to repay $

1,000.0

million of

3.15

percent fixed-rate notes due

December 15, 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.

Certain of

our long-term

debt agreements

contain restrictive

covenants.

As of February 26, 2023, we were in compliance with all of

these covenants.

(8) Redeemable and Noncontrolling Interests

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). The

floating preferred return

rate on GMC’s

Class A Interests is

the

sum

of

the

three-month Term SOFR

plus

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.

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

percent 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

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,

Net purchases totaled $

99.5

million for the six-month period ended November 28, 2021.

Our noncontrolling interests contain restrictive covenants. As of February 26, 2023, we were in compliance with all of these

covenants.

(9) Stockholders’ Equity

The following tables provide details of total comprehensive income:

Quarter Ended

Feb. 26, 2023

Feb. 27, 2022

General Mills

Noncontrolling

Interests

General Mills

Noncontrolling

Interests

In Millions

Pretax

Tax

Net

Pretax

Tax

Net

Net earnings, including earnings

attributable to noncontrolling interests

$

553.1

$

4.8

$

660.3

$

2.3

Other comprehensive income (loss):

Foreign currency translation

$

3.4

$

9.0

12.4

0.1

$

(125.7)

$

3.2

(122.5)

-

Other fair value changes:

Hedge derivatives

(6.3)

0.6

(5.7)

-

(23.9)

(6.9)

(30.8)

-

Reclassification to earnings:

Foreign currency translation (a)

-

342.2

-

342.2

-

Hedge derivatives (b)

23.1

(4.2)

18.9

-

23.1

7.1

30.2

-

Amortization of losses and

prior service costs (c)

18.1

(4.2)

13.9

-

28.8

(6.5)

22.3

-

Other comprehensive income

$

38.3

$

1.2

39.5

0.1

$

244.5

$

(3.1)

241.4

-

Total comprehensive income

$

592.6

$

4.9

$

901.7

$

2.3

(a)

Loss reclassified from AOCI into earnings is reported in the divestitures gain.

(b)

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.

(c)

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

Nine-Month Period Ended

Feb. 26, 2023

Feb. 27, 2022

General Mills

Noncontrolling

Interests

General Mills

Noncontrolling

Interests

Redeemable

Interest

In Millions

Pretax

Tax

Net

Pretax

Tax

Net

Net earnings, including earnings

attributable to redeemable and

noncontrolling interests

$

1,979.0

$

10.5

$

1,884.5

$

7.2

$

17.5

Other comprehensive (loss) income:

Foreign currency translation

$

(83.3)

$

(14.8)

(98.1)

(0.6)

$

(166.6)

$

53.7

(112.9)

(25.0)

(47.0)

Other fair value changes:

Hedge derivatives

(29.3)

6.1

(23.2)

-

8.0

(18.9)

(10.9)

-

0.5

Reclassification to earnings:

Foreign currency translation (a)

(7.4)

-

(7.4)

-

342.2

-

342.2

-

Hedge derivatives (b)

23.0

(4.5)

18.5

-

23.0

11.6

34.6

-

(0.2)

Amortization of losses and

prior service costs (c)

54.6

(12.4)

42.2

-

68.8

(15.3)

53.5

-

Other comprehensive (loss) income

$

(42.4)

$

(25.6)

(68.0)

(0.6)

$

275.4

$

31.1

306.5

(25.0)

(46.7)

Total comprehensive income (loss)

$

1,911.0

$

9.9

$

2,191.0

$

(17.8)

$

(29.2)

(a)

(Gain) loss reclassified from AOCI into earnings is reported in the divestitures gain.

(b)

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.

(c)

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

Accumulated other comprehensive loss balances, net of tax effects,

were as follows:

In Millions

Feb. 26, 2023

May 29, 2022

Foreign currency translation adjustments

$

(696.2)

$

(590.7)

Unrealized gain from hedge derivatives

18.6

23.3

Pension, other postretirement, and postemployment benefits:

Net actuarial loss

(1,459.1)

(1,513.4)

Prior service credits

98.2

110.3

Accumulated other comprehensive loss

$

(2,038.5)

$

(1,970.5)

(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 29, 2022.

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. 26, 2023

Feb. 27, 2022

Feb. 26, 2023

Feb. 27, 2022

Compensation expense related to stock-based payments

$

29.1

$

31.4

$

86.7

$

78.9

Compensation

expense

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. 26, 2023

Feb. 27, 2022

Feb. 26, 2023

Feb. 27, 2022

Windfall tax benefits from stock-based payments

$

6.2

$

6.7

$

24.6

$

13.0

As

of

February

26,

2023,

unrecognized

compensation

expense

non-vested

stock

options,

restricted

stock

units,

and

performance share units was $

133.1

million. This expense will be recognized over

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. 26, 2023

Feb. 27, 2022

Net cash proceeds

$

168.0

$

96.2

Intrinsic value of options exercised

$

81.8

$

44.4

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 29, 2022.

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. 26, 2023

Feb. 27, 2022

Estimated fair values of stock options granted

$

14.16

$

8.77

Assumptions:

Risk-free interest rate

3.3

%

1.5

%

Expected term

8.5

years

8.5

years

Expected volatility

20.9

%

20.2

%

Dividend yield

3.1

%

3.4

%

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. 26, 2023

Feb. 27, 2022

Total grant date fair

value

$

105.4

$

79.0

(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. 26, 2023

Feb. 27, 2022

Feb. 26, 2023

Feb. 27, 2022

Net earnings attributable to General Mills

$

553.1

$

660.3

$

1,979.0

$

1,884.5

Average number

of common shares - basic EPS

592.5

606.8

596.2

608.6

Incremental share effect from: (a)

Stock options

3.7

2.9

3.6

2.4

Restricted stock units and performance share units

2.8

2.7

2.6

2.5

Average number

of common shares - diluted EPS

599.0

612.4

602.4

613.5

Earnings per share – basic

$

0.94

$

1.09

$

3.32

$

3.10

Earnings per share – diluted

$

0.92

$

1.08

$

3.28

$

3.07

(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. 26, 2023

Feb. 27, 2022

Feb. 26, 2023

Feb. 27, 2022

Anti-dilutive stock options, restricted stock units, and

performance share units

0.8

1.0

0.9

4.5

(12) Share Repurchases

Share repurchases were as follows:

Quarter Ended

Nine-Month Period Ended

In Millions

Feb. 26, 2023

Feb. 27, 2022

Feb. 26, 2023

Feb. 27, 2022

Shares of common stock

2.9

2.6

15.0

8.8

Aggregate purchase price

$

251.0

$

175.5

$

1,152.3

$

550.5

(13) Statements of Cash Flows

Our Consolidated Statements of Cash Flows include the following:

Nine-Month Period Ended

In Millions

Feb. 26, 2023

Feb. 27, 2022

Net cash interest payments

$

225.6

$

234.2

Net income tax payments

$

538.4

$

397.3

(14) Retirement and Postemployment Benefits

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

Defined Benefit

Pension Plans

Item 2. Management’s Discussion and Analysis

Management’s Discussion and Analysis

of Financial Condition and Results of Operations.

INTRODUCTION

This

Management’s

Discussion

and

Analysis

of

Financial

Condition

and

Results

of

Operations

(MD&A)

should

be

read

in

conjunction

with

the

MD&A

included

in

our

Annual

Report

on

Form

10-K

for

the

fiscal

year

ended

May

29,

2022

for

important

background

regarding,

among other

things, our

key business

drivers.

Significant

trademarks and

service marks

used in

our business

are set forth in

italics

herein. Certain terms used throughout this report are defined in the

“Glossary” section below.

We expect

the largest factors impacting our

performance in fiscal 2023 will be

the economic health of consumers, the

inflationary cost

environment, and the frequency and

severity of disruptions in the supply

chain. We

anticipate double-digit input cost inflation

in fiscal

2023

and

are

addressing

inflation

headwinds

with

Holistic

Margin

Management

(HMM)

cost

savings

and

net

price

realization

generated

through

our

Strategic

Revenue

Management

(SRM)

capability.

We

are

planning

for

volume

elasticities

to

increase

but

remain below historical levels and supply chain disruptions to slowly moderate

in fiscal 2023 compared to fiscal 2022 levels.

CONSOLIDATED

RESULTS

OF OPERATIONS

Third Quarter Results

In

the

third

quarter

of

fiscal

2023,

net

sales

increased

13 percent

and

organic

net

sales

increased

percent

compared

to

the

same

period last

year.

Operating profit

decreased 10

percent to

$730 million,

primarily driven

by higher

input costs,

an increase

in selling,

general

and

administrative

(SG&A)

expenses,

a

lower

net

gain

on

divestitures,

and

an

unfavorable

change

to

the

mark-to-market

valuation of

certain commodity

positions and

grain inventories,

partially offset

by favorable

net price

realization and

mix. Operating

profit margin of 14.2 percent decreased

380 basis points. Adjusted operating profit of

$807 million increased 20 percent on

a constant-

currency

basis,

primarily

driven

by favorable

net price

realization

and

mix,

partially

offset

by higher

input

costs

and

an increase

in

SG&A

expenses.

Adjusted

operating

profit

margin

increased

basis

points

to

15.7

percent.

Diluted

earnings

per

share

of

$0.92

decreased

percent

in

the

third

quarter

of

fiscal

Adjusted

diluted

earnings

per

share

of

$0.97

increased

17 percent

on

a

constant-currency basis

compared to

the third

quarter of

fiscal 2022.

See the

“Non-GAAP Measures”

section below

for a

description

of our use of measures not defined by GAAP.

A summary of our consolidated financial results for the third quarter of

fiscal 2023 follows:

Quarter Ended Feb. 26, 2023

In millions,

except per share

Quarter Ended

Feb. 26, 2023 vs.

Feb. 27, 2022

Percent

of Net

Sales

Constant-

Currency

Growth (a)

Net sales

$

5,125.9

%

Operating profit

730.2

(10)

%

14.2

%

Net earnings attributable to General Mills

553.1

(16)

%

Diluted earnings per share

$

0.92

(15)

%

Organic net sales growth rate (a)

%

Adjusted operating profit (a)

807.0

%

15.7

%

Adjusted diluted earnings per share (a)

$

0.97

%

(a)

See the "Non-GAAP Measures" section below for our use of measures not defined

by GAAP.

Consolidated

net sales

were as follows:

Quarter Ended

Feb. 26, 2023

Feb. 26, 2023 vs.

Feb. 27, 2022

Net sales (in millions)

$

5,125.9

13%

$

4,537.7

Contributions from volume growth (a)

Flat

Net price realization and mix

pts

Foreign currency exchange

(1)

pt

Note: Table may

not foot due to rounding.

(a)

Measured in tons based on the stated weight of our product shipments.

Net sales in

the third

quarter of

fiscal 2023

increased 13

percent compared

to the

same period

in fiscal

2022, driven

by favorable

net

price realization and mix, partially offset by unfavorable

foreign currency exchange.

Components of organic net sales growth are shown in the following

table:

Quarter Ended Feb. 26, 2023 vs.

Quarter Ended Feb. 27, 2022

Contributions from organic volume growth (a)

Flat

Organic net price realization and mix

pts

Organic net sales growth

pts

Foreign currency exchange

(1)

pt

Acquisitions and divestitures

(2)

pts

Net sales growth

pts

Note: Table may

not foot due to rounding.

(a)

Measured in tons based on the stated weight of our product shipments.

Organic

net

sales

increased

percent

in

the

third

quarter

of

fiscal

2023

compared

to

the

same

period

in

fiscal

2022

driven

by

favorable organic net price realization and mix.

Cost of

sales

increased $327 million

to $3,461

million in the

third quarter

of fiscal 2023

compared to

the same

period in fiscal

The

increase

was primarily

driven

by

a

$290 million

increase

attributable

to

product

rate and

mix,

partially

offset

by

a

$10 million

decrease attributable

to lower volume.

We

recorded a $67

million net increase

in cost of

sales related to

the mark-to-market

valuation

of certain

commodity positions

and grain

inventories in

the third

quarter of

fiscal 2023

compared to

a $20 million

net increase

in the

third quarter of fiscal 2022.

Divestitures gain, net

totaled $14 million in

the third quarter of fiscal 2023,

compared to $170 million recorded

in the third quarter of

fiscal 2022.

In fiscal

2022,

we sold

our

interests in

Yoplait

SAS, Yoplait

Marques

SNC,

and

Liberté

Marques

Sàrl and

a European

dough business (please refer to Note 2 to the Consolidated Financial Statements in

Part I, Item 1 of this report).

SG&A

expenses

increased

$196

million

to

$947 million

in

the

third

quarter

of

fiscal

2023,

compared

to

the

same

period

in

fiscal

2022,

primarily

driven

by increased

media

and advertising

expenses,

an increase

in certain

compensation

and benefits

expenses,

an

increase

in

charitable

contributions,

and

unfavorable

valuation

adjustments

on

certain

corporate

investments

in

fiscal

SG&A

expenses as

a percent

of net

sales in

the third

quarter of

fiscal 2023

increased 190

basis points

compared to

the third

quarter of

fiscal

Restructuring, impairment,

and other exit

costs

totaled $1 million in

the third quarter

of fiscal 2023,

compared to $7 million

in the

same period last year (please refer to Note 3 to the Consolidated Financial

Statements in Part I, Item 1 of this report).

Benefit plan

non-service income

totaled $22 million

in the

third quarter

of fiscal

2023, compared

to $27 million

in the

same period

last year,

primarily reflecting

an increase

in interest

costs, partially

offset by

lower amortization

of losses

and higher

expected return

on plan assets.

Interest,

net

for

the third

quarter

of fiscal

2023

totaled

$98 million,

up $12

million

from the

third

quarter of

fiscal

2022,

primarily

driven by higher interest rates, partially offset by lower

average long-term debt levels.

The

effective

tax

rate

for

the third

quarter

of fiscal

2023

was 16.6

percent

compared

to 16.3

percent

for

the

third

quarter

of fiscal

The

0.3 percentage

point increase

was primarily

due to

certain unfavorable

nonrecurring discrete

tax items,

partially offset

by

favorable changes in

earnings mix by jurisdiction

in fiscal 2023. Our effective

tax rate excluding certain

items affecting comparability

was

21.6 percent

in

the

third

quarter

of

fiscal

2023,

compared

to

21.0

percent

in

the

same

period

last

year

(see

the

“Non-GAAP

Measures”

section

below

for

a

description

of

our

use

of

measures

not

defined

by

GAAP).

The

0.6

percentage

point

increase

was

primarily

due

to

certain

unfavorable

nonrecurring

discrete

tax

item

Showing the first 8K of 72K characters. Open the full section

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Quantitative and Qualitative Disclosures About Market Risk.

The

estimated

maximum

potential

value-at-risk

arising

from

a

one-day

loss

in

fair

value

for

our

interest

rate,

foreign

exchange,

commodity, and equity

market-risk-sensitive instruments outstanding as of February 26, 2023,

was as follows:

In Millions

One-day Risk

of Loss

Change During

Nine-Month

Period Ended

Feb. 26, 2023

Analysis of Change

Interest rate instruments

$

Rising interest rates

Foreign currency instruments

Increase in portfolio basis

Commodity instruments

(4)

Decrease in commodity prices

Equity instruments

Immaterial

For additional information, see Item 7A of Part II of our Annual Report on Form 10-K

for the fiscal year ended May 29, 2022.

Item 4. Controls and Procedures.

Controls and Procedures.

We,

under the

supervision and

with the

participation of

our management,

including our

Chief Executive

Officer and

Chief Financial

Officer,

have

evaluated

the

effectiveness

of

the design

and

operation

of

our

disclosure

controls

and

procedures

(as

defined

in

Rule

13a-15(e)

under

the

Securities

Exchange

Act

of

1934).

Based

on

our

evaluation,

our

Chief

Executive

Officer

and

Chief

Financial

Officer have concluded

that, as of February

26, 2023, our disclosure

controls and procedures were

effective to ensure

that information

required to

be disclosed

by us

in reports

that we file

or submit

under the

Securities Exchange

Act of

1934 is (1)

recorded, processed,

summarized,

and

reported

within

the

time

periods

specified

in

Securities

and

Exchange

Commission

rules

and

forms,

and

(2)

accumulated and

communicated to

our management,

including our

Chief Executive

Officer and

Chief Financial

Officer,

in a

manner

that allows timely decisions regarding required disclosure.

There were no changes in our internal

control over financial reporting (as defined

in Rule 13a-15(f) under the Securities Exchange

Act

of 1934) during

the quarter ended February

26, 2023 that materially

affected, or are

reasonably likely to

materially affect, our

internal

control over financial reporting.

PART

II.

OTHER INFORMATION

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

The

following

table

sets forth

information

with

respect

to

shares

of

our

common

stock

that we

purchased

during

the quarter

ended

February 26, 2023:

Period

Total

Number

of Shares

Purchased (a)

Average

Price Paid

Per Share

Total

Number of Shares

Purchased as Part of a Publicly

Announced Program (b)

Maximum Number of Shares

that may yet be Purchased

Under the Program (b)

November 28, 2022 -

January 1, 2023

1,961,407

$

84.61

1,961,407

88,860,531

January 2, 2023 -

January 29, 2023

1,016,544

82.85

1,016,544

87,843,987

January 30, 2023 -

February 26, 2023

2,330

77.99

2,330

87,841,657

Total

2,980,281

$

84.00

2,980,281

87,841,657

(a)

The total number

of shares purchased

includes shares of

common stock withheld

for the payment

of withholding taxes

upon the distribution

of

deferred option units.

(b)

On June

27, 2022,

our Board

of Directors

approved a

new authorization

for the

repurchase of

up to

100,000,000 shares

of our

common stock

and terminated

the prior

authorization. Purchases

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 Board

did not

specify an

expiration date for the authorization.

PART

II. OTHER INFORMATION

Item 6. Exhibits.

Exhibits.

31.1

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2

Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Financial Statements

from the

Quarterly Report

on Form

10-Q of

the Company

for the

quarter ended

February 26,

2023,

formatted

in

Inline

Extensible

Business

Reporting

Language:

(i)

Consolidated

Statements

of

Earnings;

(ii)

Consolidated

Statements

of

Comprehensive

Income,

(iii)

Consolidated

Balance

Sheets;

(iv)

Consolidated

Statements of Total

Equity and Redeemable

Interest; (v) Consolidated

Statements of Cash

Flows; and (vi)

Notes to

Consolidated Financial Statements.

Cover Page, formatted in Inline Extensible Business Reporting Language

and contained in Exhibit 101.

SIGNATURES

Pursuant

to

the

requirements

of

the

Securities

Exchange

Act

of

1934,

the

registrant

has

duly

caused

this

report

to

be

signed

on

its

behalf by the undersigned thereunto duly authorized.

GENERAL MILLS, INC.

(Registrant)

Date: March 23, 2023

/s/ Mark A. Pallot

Mark A. Pallot

Vice President, Chief Accounting

Officer

(Principal Accounting Officer and Duly Authorized

Officer)