# EDGAR Filing Document

**Accession Number:** 0000040704
**File Stem:** 0001193125-23-077864
**Filing Date:** 2023-3
**Character Count:** 142469
**Document Hash:** c6df593a352718c2043e8e365eca0f51
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-23-077864.hdr.sgml**: 20230323

**ACCESSION NUMBER**: 0001193125-23-077864

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 83

**CONFORMED PERIOD OF REPORT**: 20230226

**FILED AS OF DATE**: 20230323

**DATE AS OF CHANGE**: 20230323

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** GENERAL MILLS INC
- **CENTRAL INDEX KEY:** 0000040704
- **STANDARD INDUSTRIAL CLASSIFICATION:** GRAIN MILL PRODUCTS [2040]
- **IRS NUMBER:** 410274440
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 0530

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-01185
- **FILM NUMBER:** 23756278

**BUSINESS ADDRESS:**
- **STREET 1:** NUMBER ONE GENERAL MILLS BLVD
- **CITY:** MINNEAPOLIS
- **STATE:** MN
- **ZIP:** 55426
- **BUSINESS PHONE:** (763) 764-7600

**MAIL ADDRESS:**
- **STREET 1:** P O BOX 1113
- **CITY:** MINNEAPOLIS
- **STATE:** MN
- **ZIP:** 55440

# **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 26, 2023

☐ 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
(State or other jurisdiction of
incorporation or organization)

41-0274440
(I.R.S. Employer
Identification No.)

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

55426
(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 ☐

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 | 4 |
| Consolidated Statements of Comprehensive Income for the quarters and nine-month periods ended February 26, 2023 and February 27, 2022 | 5 |
| Consolidated Balance Sheets as of February 26, 2023 and May 29, 2022 | 6 |
| Consolidated Statements of Total Equity and Redeemable Interest for the quarters and nine-month periods ended February 26, 2023 and February 27, 2022 | 7 |
| Consolidated Statements of Cash Flows for the nine-month periods ended February 26, 2023 and February 27, 2022 | 9 |
| Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | 21 |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk | 39 |
| Item 4. Controls and Procedures | 40 |
| PART II - Other Information |  |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 40 |
| Item 6. Exhibits | 41 |
| Signatures | 42 |

3

# 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. 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.

4

# **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.

5

# **Consolidated Balance Sheets**  
 **GENERAL MILLS, INC. AND SUBSIDIARIES**  
 (In Millions, Except Par Value)

|  | Feb. 26, 2023 (Unaudited) | May 29, 2022 |
| --- | --- | --- |
| 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 | 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.

6

# **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, 1 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.

7

# **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, 1 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.

8

# **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.

9

# 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 consolidated 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.

10

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 $20 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 |

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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 related fair values were substantially in excess of the carrying values, except for the *Uncle Toby's* brand intangible asset. In addition, while having significant coverage as of our fiscal 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:

| In Millions | Quarter Ended |  | Nine-Month Period Ended |  |
| --- | --- | --- | --- | --- |
|  | 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 related to energy inputs and $295.0 million related to agricultural inputs. These contracts relate to inputs that generally will be utilized within the next 12 months.

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.

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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, 2023. 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.

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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 186 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 49 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 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.

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

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## (9) Stockholders' Equity

The following tables provide details of total comprehensive income:

| In Millions | Quarter Ended Feb. 26, 2023 |  |  |  | Quarter Ended Feb. 27, 2022 |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | General Mills |  | Noncontrolling Interests |  | General Mills |  | Noncontrolling Interests |  |
|  | Pretax | Tax | Net | Net | Pretax | Tax | Net | 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.

| In Millions | Nine-Month Period Ended Feb. 26, 2023 |  |  |  | Nine-Month Period Ended Feb. 27, 2022 |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | General Mills |  | Noncontrolling Interests |  | General Mills |  | Noncontrolling Interests |  |
|  | Pretax | Tax | Net | Net | Pretax | Tax | Net | Net |
| Net earnings, including earnings attributable to redeemable and noncontrolling interests |  |  | $1,979.0 | $10.5 |  |  | $1,884.5 | $7.2 |
| Other comprehensive (loss) income: |  |  |  |  |  |  |  |  |
| Foreign currency translation | $(83.3) | $(14.8) | (98.1) | (0.6) | $(166.6) | $53.7 | (112.9) | (25.0) |
| Other fair value changes: |  |  |  |  |  |  |  |  |
| Hedge derivatives | (29.3) | 6.1 | (23.2) | - | 8.0 | (18.9) | (10.9) | - |
| 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 | - |
| 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) |
| Total comprehensive income (loss) |  |  | $1,911.0 | $9.9 |  |  | $2,191.0 | $(17.8) |

(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.

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

| In Millions | Quarter Ended |  | Nine-Month Period Ended |  |
| --- | --- | --- | --- | --- |
|  | 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 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:

| In Millions | Quarter Ended |  | Nine-Month Period Ended |  |
| --- | --- | --- | --- | --- |
|  | 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 related to non-vested stock options, restricted stock units, and performance share units was $133.1 million. This expense will be recognized over 20 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:

| In Millions | Nine-Month Period Ended |  |
| --- | --- | --- |
|  | 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:

| In Millions | Nine-Month Period Ended |  |
| --- | --- | --- |
|  | Feb. 26, 2023 | Feb. 27, 2022 |
| Total grant date fair value | $105.4 | $79.0 |

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### (11) Earnings Per Share

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

| 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 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 :

| In Millions | Quarter Ended |  | Nine-Month Period Ended |  |
| --- | --- | --- | --- | --- |
|  | 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:

| In Millions | Quarter Ended |  | Nine-Month Period Ended |  |
| --- | --- | --- | --- | --- |
|  | 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:

| In Millions | Nine-Month Period Ended |  |
| --- | --- | --- |
|  | Feb. 26, 2023 | Feb. 27, 2022 |
| Net cash interest payments | $225.6 | $234.2 |
| Net income tax payments | $538.4 | $397.3 |

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#### (14) Retirement and Postemployment Benefits

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

| In Millions | Defined Benefit Pension Plans |  | Other Postretirement Benefit Plans |  | Postemployment Benefit Plans |  |
| --- | --- | --- | --- | --- | --- | --- |
|  | Quarter Ended |  | Quarter Ended |  | Quarter Ended |  |
|  | Feb. 26, 2023 | Feb. 27, 2022 | Feb. 26, 2023 | Feb. 27, 2022 | Feb. 26, 2023 | Feb. 27, 2022 |
| Service cost | $17.6 | $23.2 | $1.4 | $2.0 | $2.1 | $1.8 |
| Interest cost | 64.6 | 46.0 | 4.5 | 3.1 | 0.7 | 0.4 |
| Expected return on plan assets | (105.0) | (102.8) | (7.7) | (6.6) | - | - |
| Amortization of losses (gains) | 28.3 | 35.7 | (4.9) | (2.7) | 0.1 | 0.8 |
| Amortization of prior service costs (credits) | 0.4 | 0.2 | (5.9) | (5.3) | 0.1 | 0.1 |
| Other adjustments | - | - | - | - | 3.2 | 4.0 |
| Net expense (income) | $5.9 | $2.3 | $(12.6) | $(9.5) | $6.2 | $7.1 |

| In Millions | Defined Benefit Pension Plans |  | Other Postretirement Benefit Plans |  | Postemployment Benefit Plans |  |
| --- | --- | --- | --- | --- | --- | --- |
|  | Nine-Month Period Ended |  | Nine-Month Period Ended |  | Nine-Month Period Ended |  |
|  | Feb. 26, 2023 | Feb. 27, 2022 | Feb. 26, 2023 | Feb. 27, 2022 | Feb. 26, 2023 | Feb. 27, 2022 |
| Service cost | $52.7 | $70.4 | $4.0 | $5.8 | $6.3 | $5.3 |
| Interest cost | 193.8 | 138.4 | 13.5 | 9.4 | 2.3 | 1.1 |
| Expected return on plan assets | (315.0) | (308.5) | (23.3) | (20.0) | - | - |
| Amortization of losses (gains) | 85.0 | 106.1 | (14.6) | (8.1) | 0.2 | 2.3 |
| Amortization of prior service costs (credits) | 1.1 | 0.6 | (17.4) | (15.7) | 0.3 | 0.3 |
| Other adjustments | - | - | - | - | 9.1 | 9.7 |
| Curtailment gain | - | (14.3) | - | (5.7) | - | - |
| Net expense (income) | $17.6 | $(7.3) | $(37.8) | $(34.3) | $18.2 | $18.7 |

#### (15) Income Taxes

During the first quarter of fiscal 2023, the Inflation Reduction Act (IRA) was signed into law. The IRA introduces a Corporate Alternative Minimum Tax beginning in our fiscal 2024 and an excise tax on the repurchase of corporate stock starting after January 1, 2023. We do not currently expect the IRA to have a material impact on our financial results, including our annual estimated effective tax rate, or on our liquidity. The amount of excise tax on the repurchase of corporate stock was immaterial in the third quarter of fiscal 2023. We will continue to monitor and assess the impact the IRA may have on our business and financial results.

During fiscal 2022, the Brazilian tax authority, Secretaria da Receita Federal do Brasil (RFB), concluded audits of our 2012 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. 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 26, 2023, 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 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

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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 previously reported operating segment change. 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 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, 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 are reported in the region or country where the end customer 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, gains and losses on corporate investments, and other items that are not part of our measurement of segment operating performance. These include gains and losses arising from the revaluation of certain grain inventories and gains and losses from mark-to-market valuation of certain commodity positions until passed back to our operating segments. These items affecting operating profit are centrally managed at the corporate level and are excluded from the measure of segment profitability reviewed by executive management. Under our supply chain organization, our manufacturing, warehouse, and distribution activities are substantially integrated across our operations in order to maximize efficiency and productivity. As a result, fixed assets and depreciation and amortization expenses are neither maintained nor available by operating segment.

19

Our operating segment results were as follows:

| In Millions | Quarter Ended |  | Nine-Month Period Ended |  |
| --- | --- | --- | --- | --- |
|  | Feb. 26, 2023 | Feb. 27, 2022 | Feb. 26, 2023 | Feb. 27, 2022 |
| Net sales: |  |  |  |  |
| North America Retail | $3,232.0 | $2,811.9 | $9,593.9 | $8,567.1 |
| International | 700.6 | 721.0 | 2,024.8 | 2,566.0 |
| Pet | 645.5 | 567.7 | 1,818.3 | 1,649.1 |
| North America Foodservice | 547.8 | 437.1 | 1,627.2 | 1,319.4 |
| Total | $5,125.9 | $4,537.7 | $15,064.2 | $14,101.6 |
| Operating profit: |  |  |  |  |
| North America Retail | $786.9 | $611.5 | $2,401.8 | $1,935.5 |
| International | 42.4 | 35.9 | 95.0 | 155.9 |
| Pet | 102.6 | 110.6 | 312.3 | 357.3 |
| North America Foodservice | 82.4 | 35.2 | 217.5 | 174.9 |
| Total segment operating profit | $1,014.3 | $793.2 | $3,026.6 | $2,623.6 |
| Unallocated corporate items | 296.4 | 140.9 | 841.5 | 328.9 |
| 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 |

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

| In Millions | Quarter Ended |  | Nine-Month Period Ended |  |
| --- | --- | --- | --- | --- |
|  | Feb. 26, 2023 | Feb. 27, 2022 | Feb. 26, 2023 | Feb. 27, 2022 |
| U.S. Meals & Baking Solutions | $1,185.3 | $968.0 | $3,456.2 | $3,032.6 |
| U.S. Morning Foods | 918.6 | 858.0 | 2,731.1 | 2,514.4 |
| U.S. Snacks | 883.5 | 745.0 | 2,663.6 | 2,282.3 |
| Canada | 244.6 | 240.9 | 743.0 | 737.8 |
| Total | $3,232.0 | $2,811.9 | $9,593.9 | $8,567.1 |

Net sales by class of similar products were as follows:

| In Millions | Quarter Ended |  | Nine-Month Period Ended |  |
| --- | --- | --- | --- | --- |
|  | Feb. 26, 2023 | Feb. 27, 2022 | Feb. 26, 2023 | Feb. 27, 2022 |
| Snacks | $1,065.5 | $925.3 | $3,236.7 | $2,827.4 |
| Cereal | 801.9 | 754.4 | 2,427.5 | 2,227.6 |
| Convenient meals | 815.6 | 772.8 | 2,281.2 | 2,258.1 |
| Dough | 644.8 | 446.6 | 1,855.2 | 1,458.8 |
| Pet | 646.2 | 568.1 | 1,820.7 | 1,649.5 |
| Baking mixes and ingredients | 517.7 | 465.9 | 1,554.9 | 1,379.4 |
| Yogurt | 378.0 | 349.3 | 1,081.5 | 1,362.3 |
| Super-premium ice cream | 148.2 | 151.4 | 496.6 | 596.2 |
| Other | 108.0 | 103.9 | 309.9 | 342.3 |
| Total | $5,125.9 | $4,537.7 | $15,064.2 | $14,101.6 |

20

# Item 2. 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 16 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 80 basis points to 15.7 percent. Diluted earnings per share of $0.92 decreased 15 percent in the third quarter of fiscal 2023. 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 | 13% |  |  |
| 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) |  | 16% |  |  |
| Adjusted operating profit (a) | 807.0 | 19% | 15.7% | 20% |
| Adjusted diluted earnings per share (a) | $0.97 | 15% |  | 17% |

(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 | 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 |  | 14 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.

21

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 | 16 pts |
| Organic net sales growth | 16 pts |
| Foreign currency exchange | (1)pt |
| Acquisitions and divestitures | (2)pts |
| Net sales growth | 13 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 16 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 2022. 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 2023. 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 2022.

**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 2022. 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 items, partially offset by favorable changes in earnings mix by jurisdiction in fiscal 2023.

22

**After-tax earnings from joint ventures** for the third quarter of fiscal 2023 decreased to $13 million compared to $30 million in the same period in fiscal 2022, primarily driven by higher input costs and unfavorable nonrecurring discrete tax items at Cereal Partners Worldwide (CPW), partially offset by favorable net price realization and mix at CPW. On a constant-currency basis, after-tax earnings from joint ventures decreased 51 percent (see the “Non-GAAP Measures” section below for a description of our use of measures not defined by GAAP).

The components of our joint ventures’ net sales growth are shown in the following table:

# **Quarter Ended Feb. 26, 2023 vs.**

| Quarter Ended Feb. 27, 2022 | CPW | HDJ (a) | Total |
| --- | --- | --- | --- |
| Contributions from volume growth (b) | (13)pts | (2)pts |  |
| Net price realization and mix | 15 pts | 3 pts |  |
| Net sales growth in constant currency | 2 pts | 1 pt | 2 pts |
| Foreign currency exchange | (5)pts | (14)pts | (7)pts |
| Net sales growth | (3)pts | (13)pts | (5)pts |

Note: Table may not foot due to rounding.

(a) Häagen-Dazs Japan, Inc.

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

**Average diluted shares outstanding** decreased by 13 million in the third quarter of fiscal 2023 from the same period a year ago primarily due to share repurchases, partially offset by option exercises.

# **Nine-Month Results**

In the nine-month period ended February 26, 2023, net sales increased 7 percent compared to the same period last year, and organic net sales increased 12 percent compared to the same period last year. Operating profit increased 6 percent to $2,616 million, primarily driven by favorable net price realization and mix and a higher net gain on divestitures, partially offset by higher input costs, a decrease in contributions from volume growth, an unfavorable change to the mark-to-market valuation of certain commodity positions and grain inventories, an increase in SG&A expenses, and lower net corporate investment activity. Operating profit margin of 17.4 percent essentially matched the same period last year. Adjusted operating profit of $2,568 million increased 11 percent on a constant-currency basis, primarily driven by favorable net price realization and mix, partially offset by higher input costs, a decrease in contributions from volume growth, and an increase in SG&A expenses. Adjusted operating profit margin increased 60 basis points to 17.0 percent. Diluted earnings per share of $3.28 increased 7 percent in the nine-month period ended February 26, 2023, and adjusted diluted earnings per share of $3.18 increased 14 percent on a constant-currency basis compared to the same period last year (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 nine-month period ended February 26, 2023, follows:

| Nine-Month Period Ended Feb. 26, 2023 | In millions, except per share | Nine-Month Period Ended Feb. 26, 2023 vs. Feb. 27, 2022 | Percent of Net Sales | Constant-Currency Growth (a) |
| --- | --- | --- | --- | --- |
| Net sales | $15,064.2 | 7% |  |  |
| Operating profit | 2,615.6 | 6% | 17.4% |  |
| Net earnings attributable to General Mills | 1,979.0 | 5% |  |  |
| Diluted earnings per share | $3.28 | 7% |  |  |
| Organic net sales growth rate (a) |  | 12% |  |  |
| Adjusted operating profit (a) | 2,567.9 | 11% | 17.0% | 11% |
| Adjusted diluted earnings per share (a) | $3.18 | 13% |  | 14% |

(a) See the “Non-GAAP Measures” section below for our use of measures not defined by GAAP.

23

Consolidated **net sales** were as follows:

|  | Nine-Month Period Ended |  |  |
| --- | --- | --- | --- |
|  | Feb. 26, 2023 | Feb. 26, 2023 vs. Feb. 27, 2022 | Feb. 27, 2022 |
| Net sales (in millions) | $15,064.2 | 7% | $14,101.6 |
| Contributions from volume growth (a) |  | (8) pts |  |
| Net price realization and mix |  | 16 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.

The 7 percent increase in net sales for the nine-month period ended February 26, 2023, was driven by favorable net price realization and mix, partially offset by a decrease in contributions from volume growth and unfavorable foreign currency exchange.

Components of organic net sales growth are shown in the following table:

# **Nine-Month Period Ended Feb. 26, 2023 vs.**

# **Nine-Month Period Ended Feb. 27, 2022**

| Contributions from organic volume growth (a) | (3)pts |
| --- | --- |
| Organic net price realization and mix | 16 pts |
| Organic net sales growth | 12 pts |
| Foreign currency exchange | (1)pt |
| Acquisition and divestitures | (4)pts |
| Net sales growth | 7 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 12 percent in the nine-month period ended February 26, 2023, driven by favorable organic net price realization and mix, partially offset by a decrease in contributions from organic volume growth.

**Cost of sales** increased $777 million to $10,247 million in the nine-month period ended February 26, 2023, compared to the same period in fiscal 2022. The increase was driven by a $1,229 million increase attributable to product rate and mix, partially offset by a $759 million decrease due to lower volume. We recorded a $266 million net increase in cost of sales related to the mark-to-market valuation of certain commodity positions and grain inventories in the nine-month period ended February 26, 2023, compared to a $16 million net decrease in the nine-month period ended February 27, 2022. In the nine-month period ended February 26, 2023, we recorded a $25 million charge related to a voluntary recall on certain international *Häagen-Dazs* ice cream products.

**SG&A expenses** increased $295 million to $2,632 million in the nine-month period ended February 26, 2023, compared to the same period in fiscal 2022, primarily driven by unfavorable valuation adjustments and the loss on sale of certain corporate investments, increased media and advertising expenses, an increase in certain compensation and benefits expenses, and an increase in charitable contributions in fiscal 2023. SG&A expenses as a percent of net sales increased 90 basis points in the nine-month period ended February 26, 2023, compared to the same period of fiscal 2022.

**Divestitures gain, net** totaled $445 million in the nine-month period ended February 26, 2023, primarily related to the sale of our Helper main meals and Suddenly Salad side dishes business. During the nine-month period ended February 27, 2022, we recorded a $170 million divestitures gain related to the sale of our interest 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).

**Restructuring, impairment, and other exit costs** totaled $14 million in the nine-month period ended February 26, 2023, compared to $5 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 $65 million in the nine-month period ended February 26, 2023, compared to $84 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.

24

**Interest, net** for the nine-month period ended February 26, 2023, increased $2 million to $278 million compared to the same period of fiscal 2022.

The **effective tax rate** for the nine-month period ended February 26, 2023, was 19.6 percent compared to 19.9 percent in the nine-month period ended February 27, 2022. The 0.3 percentage point decrease was primarily due to certain nonrecurring discrete tax benefits and favorable changes in earnings mix by jurisdiction, partially offset by certain unfavorable tax components related to the divestitures incurred in the nine-month period ended February 26, 2023. Our effective tax rate excluding certain items affecting comparability was 20.8 percent in the nine-month period ended February 26, 2023, compared to 21.7 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 0.9 percentage point decrease is primarily due to certain nonrecurring discrete tax benefits and favorable changes in earnings mix by jurisdiction in the nine-month period ended February 26, 2023.

**After-tax earnings from joint ventures** decreased to $58 million for the nine-month period ended February 26, 2023, compared to $92 million in the same period in fiscal 2022, primarily driven by higher input costs at CPW and HDJ and lower net sales at HDJ, partially offset by favorable net price realization and mix at CPW. On a constant-currency basis, after-tax earnings from joint ventures decreased 28 percent (see the “Non-GAAP Measures” section below for a description of our use of measures not defined by GAAP). The components of our joint ventures’ net sales growth are shown in the following table:

#### Nine-Month Period Ended Feb. 26, 2023 vs.

| Nine-Month Period Ended Feb. 27, 2022 | CPW | HDJ | Total |
| --- | --- | --- | --- |
| Contributions from volume growth (a) | (10)pts | (7)pts |  |
| Net price realization and mix | 13 pts | Flat |  |
| Net sales growth in constant currency | 3 pts | (6)pts | 1 pt |
| Foreign currency exchange | (10)pts | (17)pts | (11)pts |
| Net sales growth | (7)pts | (23)pts | (11)pts |

Note: Table may not foot due to rounding

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

**Average diluted shares outstanding** decreased by 11 million in the nine-month period ended February 26, 2023, from the same period a year ago primarily due to share repurchases, partially offset by option exercises.

#### SEGMENT OPERATING RESULTS

Our businesses are organized into four operating segments: North America Retail, International, Pet, and North America Foodservice. Please refer to Note 17 of the Consolidated Financial Statements in Part I, Item 1 of this report for a description of our operating segments.

#### North America Retail Segment Results

North America Retail net sales were as follows:

|  | Quarter Ended |  |  | Nine-Month Period Ended |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  | Feb. 26, 2023 | Feb. 26, 2023 vs Feb. 27, 2022 | Feb. 27, 2022 | Feb. 26, 2023 | Feb. 26, 2023 vs Feb. 27, 2022 | Feb. 27, 2022 |
| Net sales (in millions) | $3,232.0 | 15% | $2,811.9 | $9,593.9 | 12% | $8,567.1 |
| Contributions from volume growth (a) |  | (1)pt |  |  | (5)pts |  |
| Net price realization and mix |  | 17 pts |  |  | 17 pts |  |
| Foreign currency exchange |  | (1)pt |  |  | Flat |  |

Note: Table may not foot due to rounding.

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

North America Retail net sales increased 15 percent in the third quarter of fiscal 2023, compared to the same period in fiscal 2022, driven by favorable net price realization and mix, partially offset by a decrease in contributions from volume growth and unfavorable foreign currency exchange.

North America Retail net sales increased 12 percent in the nine-month period ended February 26, 2023, compared to the same period in fiscal 2022, driven by favorable net price realization and mix, partially offset by a decrease in contributions from volume growth.

25

The components of North America Retail organic net sales growth are shown in the following table:

|  | Quarter Ended Feb. 26, 2023 | Nine-Month Period Ended Feb. 26, 2023 |
| --- | --- | --- |
| Contributions from organic volume growth (a) | Flat | (4)pts |
| Organic net price realization and mix | 18 pts | 18 pts |
| Organic net sales growth | 18 pts | 14 pts |
| Foreign currency exchange | (1)pt | Flat |
| Divestitures (b) | (3)pts | (2)pts |
| Net sales growth | 15 pts | 12 pts |

Note: Table may not foot due to rounding.

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

(b) Divestitures primarily include the impact of the sale of our Helper main meals and Suddenly Salad side dishes businesses in fiscal 2023. Please see Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this report.

North America Retail organic net sales increased 18 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.

North America Retail organic net sales increased 14 percent in the nine-month period ended February 26, 2023, compared to the same period in fiscal 2022, driven by favorable organic net price realization and mix, partially offset by a decrease in contributions from organic volume growth.

North America Retail net sales percentage change by operating unit are shown in the following table:

|  | Quarter Ended Feb. 26, 2023 | Nine-Month Period Ended Feb. 26, 2023 |
| --- | --- | --- |
| U.S. Meals & Baking Solutions | 22% | 14% |
| U.S. Snacks | 19% | 17% |
| U.S. Morning Foods | 7% | 9% |
| Canada (a) | 2% | 1% |
| Total | 15% | 12% |

(a) On a constant-currency basis, Canada net sales increased 8 percent in the third quarter of fiscal 2023 and increased 6 percent for the nine-month period ended February 26, 2023, compared to the same periods in fiscal 2022. See the 'Non-GAAP Measures' section below for our use of this measure not defined by GAAP.

Segment operating profit increased 29 percent to $787 million in the third quarter of fiscal 2023, compared to $612 million in the same period in fiscal 2022, primarily driven by favorable net price realization and mix, partially offset by higher input costs and higher SG&A expenses. Segment operating profit increased 29 percent on a constant-currency basis in the third quarter of fiscal 2023 compared to the same period in fiscal 2022 (see the 'Non-GAAP Measures' section below for our use of this measure not defined by GAAP).

Segment operating profit increased 24 percent to $2,402 million in the nine-month period ended February 26, 2023, compared to $1,936 million in the same period in fiscal 2022, primarily driven by favorable net price realization and mix, partially offset by higher input costs, a decrease in contributions from volume growth, and higher SG&A expenses. Segment operating profit increased 24 percent on a constant-currency basis in the nine-month period ended February 26, 2023, compared to the same period in fiscal 2022 (see the 'Non-GAAP Measures' section below for our use of this measure not defined by GAAP).

26

## International Segment Results

International net sales were as follows:

|  | Quarter Ended |  |  | Nine-Month Period Ended |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  | Feb. 26, 2023 | Feb. 26, 2023 vs Feb. 27, 2022 | Feb. 27, 2022 | Feb. 26, 2023 | Feb. 26, 2023 vs Feb. 27, 2022 | Feb. 27, 2022 |
| Net sales (in millions) | $700.6 | (3)% | $721.0 | $2,024.8 | (21)% | $2,566.0 |
| Contributions from volume growth (a) |  | (10)pts |  |  | (31)pts |  |
| Net price realization and mix |  | 11 pts |  |  | 15 pts |  |
| Foreign currency exchange |  | (4)pts |  |  | (5)pts |  |

Note: Table may not foot due to rounding.

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

International net sales decreased 3 percent in the third quarter of fiscal 2023, compared to the same period in fiscal 2022, driven by a decrease in contributions from volume growth, including the impact of volume declines from divestitures, and unfavorable foreign currency exchange, partially offset by favorable net price realization and mix.

International net sales decreased 21 percent in the nine-month period ended February 26, 2023, compared to the same period in fiscal 2022, driven by a decrease in contributions from volume growth, including the impact of volume declines from divestitures and the voluntary recall on certain international *Häagen-Dazs* ice cream products, and unfavorable foreign currency exchange, partially offset by favorable net price realization and mix.

The components of International organic net sales growth are shown in the following table:

|  | Quarter Ended | Nine-Month Period Ended |
| --- | --- | --- |
|  | Feb. 26, 2023 | Feb. 26, 2023 |
| Contributions from organic volume growth (a) | (4)pts | (6)pts |
| Organic net price realization and mix | 11 pts | 9 pts |
| Organic net sales growth | 8 pts | 3 pts |
| Foreign currency exchange | (4)pts | (5)pts |
| Divestitures (b) | (6)pts | (19)pts |
| Net sales growth | (3)pts | (21)pts |

Note: Table may not foot due to rounding.

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

(b) Divestitures primarily include the impact of the sale of our interests in Yoplait SAS, Yoplait Marques SNC, and Liberté Marques Sàrl and our European dough businesses in fiscal 2022. Please see Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this report.

International organic net sales increased 8 percent in the third quarter of fiscal 2023 and 3 percent in the nine-month period ended February 26, 2023, compared to the same periods in fiscal 2022, driven by favorable organic net price realization and mix, partially offset by a decrease in contributions from organic volume growth.

Segment operating profit increased 18 percent to $42 million in the third quarter of fiscal 2023, compared to $36 million in the same period in fiscal 2022, primarily driven by favorable net price realization and mix and a decrease in SG&A expenses, partially offset by higher input costs and a decrease in contributions from volume growth, including the impact of volume declines from divestitures. Segment operating profit increased 27 percent on a constant-currency basis in the third quarter of fiscal 2023 compared to the same period in fiscal 2022 (see the 'Non-GAAP Measures' section below for our use of this measure not defined by GAAP).

Segment operating profit decreased 39 percent to $95 million in the nine-month period ended February 26, 2023, compared to $156 million in the same period in fiscal 2022, primarily driven by a decrease in contributions from volume growth, including the impact of volume declines from divestitures and the voluntary recall on certain international *Häagen-Dazs* ice cream products, and higher input costs, partially offset by favorable net price realization and mix and a decrease in SG&A expenses. Segment operating profit decreased 33 percent on a constant-currency basis in the nine-month period ended February 26, 2023, compared to the same period in fiscal 2022 (see the 'Non-GAAP Measures' section below for our use of this measure not defined by GAAP).

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## Pet Segment Results

Pet net sales were as follows:

|  | Quarter Ended |  |  | Nine-Month Period Ended |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  | Feb. 26, 2023 | Feb. 26, 2023 vs Feb. 27, 2022 | Feb. 27, 2022 | Feb. 26, 2023 | Feb. 26, 2023 vs Feb. 27, 2022 | Feb. 27, 2022 |
| Net sales (in millions) | $645.5 | 14% | $567.7 | $1,818.3 | 10% | $1,649.1 |
| Contributions from volume growth (a) |  | 6 pts |  |  | (2)pts |  |
| Net price realization and mix |  | 8 pts |  |  | 13 pts |  |
| Foreign currency exchange |  | Flat |  |  | Flat |  |

Note: Table may not foot due to rounding.

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

Pet net sales increased 14 percent in the third quarter of fiscal 2023, compared to the same period in fiscal 2022, driven by favorable net price realization and mix and an increase in contributions from volume growth.

Pet net sales increased 10 percent during the nine-month period ended February 26, 2023, compared to the same period in fiscal 2022, driven by favorable net price realization and mix, partially offset by a decrease in contributions from volume growth.

The components of Pet organic net sales growth are shown in the following table:

|  | Quarter Ended | Nine-Month Period Ended |
| --- | --- | --- |
|  | Feb. 26, 2023 | Feb. 26, 2023 |
| Contributions from organic volume growth (a) | 6 pts | (3)pts |
| Organic net price realization and mix | 8 pts | 12 pts |
| Organic net sales growth | 14 pts | 9 pts |
| Foreign currency exchange | Flat | Flat |
| Acquisition (b) | Flat | 1 pt |
| Net sales growth | 14 pts | 10 pts |

Note: Table may not foot due to rounding.

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

(b) Acquisition of Tyson Foods' pet treats business in fiscal 2022. Please see Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this report.

Pet organic net sales increased 14 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 and an increase in contributions from organic volume growth.

Pet organic net sales increased 9 percent in the nine-month period ended February 26, 2023, compared to the same period in fiscal 2022, driven by favorable organic net price realization and mix, partially offset by a decrease in contributions from organic volume growth.

Segment operating profit decreased 7 percent to $103 million in the third quarter of fiscal 2023, compared to $111 million in the same period in fiscal 2022, primarily driven by higher input costs and higher SG&A expenses, partially offset by favorable net price realization and mix and an increase in contributions from volume growth. Segment operating profit decreased 7 percent on a constant-currency basis in the third quarter of fiscal 2023 compared to the same period in fiscal 2022 (see the 'Non-GAAP Measures' section below for our use of this measure not defined by GAAP).

Segment operating profit decreased 13 percent to $312 million in the nine-month period ended February 26, 2023, compared to $357 million in the same period in fiscal 2022, primarily driven by higher input costs, an increase in SG&A expenses, and a decrease in contributions from volume growth, partially offset by favorable net price realization and mix. Segment operating profit decreased 13 percent on a constant-currency basis in the nine-month period ended February 26, 2023, compared to the same period in fiscal 2022 (see the 'Non-GAAP Measures' section below for our use of this measure not defined by GAAP).

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## North America Foodservice Segment Results

North America Foodservice net sales were as follows:

|  | Quarter Ended |  |  | Nine-Month Period Ended |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  | Feb. 26, 2023 | Feb. 26, 2023 vs Feb. 27, 2022 | Feb. 27, 2022 | Feb. 26, 2023 | Feb. 26, 2023 vs Feb. 27, 2022 | Feb. 27, 2022 |
| Net sales (in millions) | $547.8 | 25% | $437.1 | $1,627.2 | 23% | $1,319.4 |
| Contributions from volume growth (a) |  | 6 pts |  |  | 2 pts |  |
| Net price realization and mix |  | 20 pts |  |  | 21 pts |  |
| Foreign currency exchange |  | Flat |  |  | Flat |  |

Note: Table may not foot due to rounding.

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

North America Foodservice net sales increased 25 percent in the third quarter of fiscal 2023, compared to the same period in fiscal 2022, driven by favorable net price realization and mix and an increase in contributions from volume growth.

North America Foodservice net sales increased 23 percent in the nine-month period ended February 26, 2023, compared to the same period in fiscal 2022, driven by favorable net price realization and mix, including market index pricing on bakery flour, and an increase in contributions from volume growth.

The components of North America Foodservice organic net sales growth are shown in the following table:

|  | Quarter Ended | Nine-Month Period Ended |
| --- | --- | --- |
|  | Feb. 26, 2023 | Feb. 26, 2023 |
| Contributions from organic volume growth (a) | 1 pt | (1)pt |
| Organic net price realization and mix | 18 pts | 19 pts |
| Organic net sales growth | 19 pts | 18 pts |
| Foreign currency exchange | Flat | Flat |
| Acquisition (b) | 6 pts | 5 pts |
| Net sales growth | 25 pts | 23 pts |

Note: Table may not foot due to rounding.

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

(b) Acquisition of TNT Crust in fiscal 2023. Please see Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this report.

North America Foodservice organic net sales increased 19 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 and an increase in contributions from organic volume growth.

North America Foodservice organic net sales increased 18 percent in the nine-month period ended February 26, 2023, compared to the same period in fiscal 2022, driven by favorable organic net price realization and mix, including market index pricing on bakery flour, partially offset by a decrease in contributions from organic volume growth.

Segment operating profit increased 134 percent to $82 million in the third quarter of fiscal 2023, compared to $35 million in the same period in fiscal 2022, primarily driven by favorable net price realization and mix, partially offset by higher input costs. Segment operating profit increased 134 percent on a constant-currency basis in the third quarter of fiscal 2023 compared to the same period in fiscal 2022 (see the 'Non-GAAP Measures' section below for our use of this measure not defined by GAAP).

Segment operating profit increased 24 percent to $218 million in the nine-month period ended February 26, 2023, compared to $175 million in the same period in fiscal 2022, primarily driven by favorable net price realization and mix, partially offset by higher input costs and an increase in SG&A expenses. Segment operating profit increased 24 percent on a constant-currency basis in the nine-month period ended February 26, 2023, compared to the same period in fiscal 2022 (see the 'Non-GAAP Measures' section below for our use of this measure not defined by GAAP).

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## UNALLOCATED CORPORATE ITEMS

Unallocated corporate expense totaled $296 million in the third quarter of fiscal 2023, compared to $141 million in the same period in fiscal 2022. In the third quarter of fiscal 2023, we recorded a $67 million net increase in expense related to the mark-to-market valuation of certain commodity positions and grain inventories compared to a $20 million net increase in expense in the same period last year. We recorded $20 million of net losses related to valuation adjustments on certain corporate investments in the third quarter of fiscal 2023, compared to $11 million of net gains related to the sale of certain corporate investments and valuation adjustments in the third quarter of fiscal 2022. In addition, we recorded $1 million of integration costs primarily related to our acquisition of TNT Crust in the third quarter of fiscal 2023, compared to $4 million of integration costs related to our acquisition of Tyson Foods' pet treats business in the third quarter of fiscal 2022. In the third quarter of fiscal 2022, we recorded $9 million of transaction costs related to the sale of our interests in Yoplait SAS, Yoplait Marques SNC, and Liberté Marques Sàrl and the sale of our European dough businesses. In addition, certain compensation and benefits expenses and charitable contributions increased in the third quarter of fiscal 2023, compared to the same period last year.

Unallocated corporate expense totaled $842 million in the nine-month period ended February 26, 2023, compared to $329 million in the same period last year. We recorded a $266 million net increase in expense related to the mark-to-market valuation of certain commodity positions and grain inventories in the nine-month period ended February 26, 2023, compared to a $16 million net decrease in expense in the same period last year. We recorded $82 million of net losses related to valuation adjustments and the sale of corporate investments in the nine-month period ended February 26, 2023, compared to $21 million of net gains in the same period last year. In the nine-month period ended February 26, 2023, we recorded a $26 million charge related to a voluntary recall on certain international *Häagen-Dazs* ice cream products. In addition, we recorded $5 million of integration costs primarily related to our acquisition of TNT Crust in the nine-month period ended February 26, 2023, compared to $20 million of integration costs related to our acquisition of Tyson Foods' pet treats business in the nine-month period ended February 27, 2022. In the nine-month period ended February 26, 2023, we recorded $2 million of transaction costs primarily related to the sale of our Helper main meals and Suddenly Salad side dishes business compared to $57 million of transaction costs related to the sale of our interests in Yoplait SAS, Yoplait Marques SNC, Liberté Marques Sàrl and the sale of our European dough businesses. In addition, we recorded a $20 million recovery related to a Brazil indirect tax item and a $13 million insurance recovery in the nine-month period ended February 27, 2022. In addition, certain compensation and benefits expenses and charitable contributions increased in the nine-month period ended February 26, 2023, compared to the same period last year.

## LIQUIDITY AND CAPITAL RESOURCES

During the nine-month period ended February 26, 2023, cash provided by operations was $2,027 million compared to $2,228 million in the same period last year. The $201 million decrease was primarily driven by an increase in inventory and higher cash income tax payments in the nine-month period ended February 26, 2023, as compared to the same period a year ago.

Cash used by investing activities during the nine-month period ended February 26, 2023, was $6 million compared to cash used of $1,462 million for the same period in fiscal 2022. During the first quarter of the 2023, we completed the sale of the Helper main meals and Suddenly Salad side dishes business for $607 million cash. In the first quarter of fiscal 2023, we acquired TNT Crust for $252 million cash, net of cash acquired. In the first quarter of fiscal 2022, we acquired the Tyson Foods' pet treats business for an aggregate purchase price of $1.2 billion.

Cash used by financing activities during the nine-month period ended February 26, 2023, was $1,956 million compared to $1,398 million of cash used by financing activities in the same period in fiscal 2022. We paid $967 million of dividends in the nine-month period ended February 26, 2023, compared to $934 million in the same period last year. We purchased $1,152 million of shares of common stock in the nine-month period ended February 26, 2023, compared to $550 million in the same period in fiscal 2022. In addition, we had $61 million of net debt issuances in the nine-month period ended February 26, 2023, compared to $128 million of net debt issuances in the same period a year ago.

As of February 26, 2023, we had $553 million of cash and cash equivalents in foreign jurisdictions. In anticipation of repatriating funds from foreign jurisdictions, we record local country withholding taxes on our international earnings, as applicable. Furthermore, we may repatriate our cash and cash equivalents held by our foreign subsidiaries without such funds being subject to further U.S. income tax liability. Earnings prior to fiscal 2018 from our foreign subsidiaries remain permanently reinvested in those jurisdictions.

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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 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 $252 million). The floating preferred return rate on GMC's Class A Interests is the sum of the three-month Term SOFR plus 186 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.

We have an option to purchase the Class A Interests for consideration equal to the then current capital account value, plus any unpaid preferred return and the prescribed make-whole amount. If we purchase these interests, any change in the third-party holder's capital account from its original value will be charged directly to retained earnings and will increase or decrease the net earnings used to calculate EPS in that period.

To ensure availability of funds, we maintain bank credit lines and have commercial paper programs available to us in the United States and Europe.

Certain of our long-term debt agreements, our credit facilities, and our noncontrolling interests contain restrictive covenants. As of February 26, 2023, we were in compliance with all of these covenants.

We have $2,487 million of long-term debt maturing in the next 12 months that is classified as current, including €500 million of 1.00 percent fixed-rate notes due April 27, 2023, €250 million of 0.00 percent fixed-rate notes due May 16, 2023, €250 million of floating-rate notes due May 16, 2023, €500 million of 0.00 percent fixed-rate notes due July 27, 2023, and $400 million of floating-rate notes due October 17, 2023. We believe that cash flows from operations, together with available short- and long-term debt financing, will be adequate to meet our liquidity and capital needs for at least the next 12 months.

#### CRITICAL ACCOUNTING ESTIMATES

Our significant accounting policies are described in Note 2 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended May 29, 2022. The accounting policies used in preparing our interim fiscal 2023 Consolidated Financial Statements are the same as those described in our Form 10-K.

Our critical accounting estimates are those that have meaningful impact on the reporting of our financial condition and results of operations. These estimates include our accounting for revenue recognition, valuation of long-lived assets, intangible assets, stock-based compensation, income taxes, and defined benefit pension, other postretirement benefit, and postemployment benefit plans. The assumptions and methodologies used in the determination of those estimates as of February 26, 2023, are the same as those described in our Annual Report on Form 10-K for the fiscal year ended May 29, 2022.

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 related fair values were substantially in excess of the carrying values, except for the *Uncle Toby's* brand intangible asset. In addition, while having significant coverage as of our fiscal 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.

#### RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In December 2022, the Financial Accounting Standards Board (FASB) issued optional accounting guidance for a limited period of time to ease the potential burden in accounting for reference rate reform. The new standard provides expedients and exceptions to existing accounting requirements for contract modifications and hedge accounting related to transitioning from discontinued reference rates, such as LIBOR, to alternative reference rates, if certain criteria are met. The new accounting requirements can be applied through December 31, 2024. We are in the process of reviewing our contracts and arrangements that will be affected by a discontinued reference rate and are analyzing the impact of this guidance on our results of operations and financial position.

In September 2022, the FASB issued Accounting Standards Update (ASU) 2022-04 requiring enhanced disclosures related to supplier financing programs. The ASU requires disclosure of the key terms of the program and a rollforward of the related obligation during

31

the annual period, including the amount of obligations confirmed and obligations subsequently paid. The new disclosure requirements are effective for fiscal years beginning after December 15, 2022, with the exception of the rollforward requirement, which is effective for fiscal years beginning after December 15, 2023, which for us is the first quarter of fiscal 2024 for the primary requirement and the first quarter of fiscal 2025 for the rollforward requirement. Early adoption is permitted. We have historically presented the key terms of these programs and the associated obligation outstanding. We do not expect this ASU to have a material impact on our financial statements and related disclosures.

## NON-GAAP MEASURES

We have included in this report measures of financial performance that are not defined by GAAP. We believe that these measures provide useful information to investors, and include these measures in other communications to investors.

For each of these non-GAAP financial measures, we are providing below a reconciliation of the differences between the non-GAAP measure and the most directly comparable GAAP measure, an explanation of why we believe the non-GAAP measure provides useful information to investors, and any additional material purposes for which our management or Board of Directors uses the non-GAAP measure. These non-GAAP measures should be viewed in addition to, and not in lieu of, the comparable GAAP measure.

### *Significant Items Impacting Comparability*

Several measures below are presented on an adjusted basis. The adjustments are either items resulting from infrequently occurring events or items that, in management's judgment, significantly affect the year-to-year assessment of operating results.

The following are descriptions of significant items impacting comparability of our results.

#### Divestitures gain, net

Net divestitures gain primarily related to the sale of our Helper main meals and Suddenly Salad side dishes business in fiscal 2023. Divestitures gain related to the sale of our interests in Yoplait SAS, Yoplait Marques SNC, and Liberté Marques Sàrl and the sale of a European dough business in fiscal 2022. Please see Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this report.

#### Mark-to-market effects

Net mark-to-market valuation of certain commodity positions recognized in unallocated corporate items. Please see Note 6 to the Consolidated Financial Statements in Part I, Item 1 of this report.

#### Investment activity, net

Valuation adjustments and the loss on sale of certain corporate investments in fiscal 2023. Valuation adjustments and the gain on sale of certain corporate investments in fiscal 2022.

#### Product recall

Voluntary recall costs recorded in fiscal 2023 related to certain international *Häagen-Dazs* ice cream products.

#### Restructuring charges

Restructuring charges for previously announced restructuring actions recorded in fiscal 2023 and fiscal 2022. Please see Note 3 to the Consolidated Financial Statements in Part I, Item 1 of this report.

#### Acquisition integration costs

Integration costs primarily resulting from the acquisition of TNT Crust in fiscal 2023. Integration costs resulting from the acquisition of Tyson Foods' pet treats business in fiscal 2022. Please see Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this report.

#### Transaction costs

Transaction costs primarily related to the sale of our Helper main meals and Suddenly Salad side dishes business in fiscal 2023. Transaction costs related to the sale of our interests in Yoplait SAS, Yoplait Marques SNC, and Liberté Marques Sàrl and the sale of our European dough businesses in fiscal 2022. Please see Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this report.

#### Non-income tax recovery

Recovery related to a Brazil indirect tax item recorded in fiscal 2022.

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### Organic Net Sales Growth Rates

We provide organic net sales growth rates for our consolidated net sales and segment net sales. This measure is used in reporting to our Board of Directors and executive management and as a component of the measurement of our performance for incentive compensation purposes. We believe that organic net sales growth rates provide useful information to investors because they provide transparency to underlying performance in our net sales by excluding the effect that foreign currency exchange rate fluctuations, acquisitions, divestitures, and a 53$^{rd}$ week, when applicable, have on year-to-year comparability. A reconciliation of these measures to reported net sales growth rates, the relevant GAAP measures, are included in our Consolidated Results of Operations and Results of Segment Operations discussions in the MD&A above.

### Adjusted Operating Profit as a Percent of Net Sales (Adjusted Operating Profit Margin)

We believe this measure provides useful information to investors because it is important for assessing our operating profit margin on a comparable basis.

Our adjusted operating profit margins are calculated as follows:

| In Millions | Quarter Ended |  |  |  |
| --- | --- | --- | --- | --- |
|  | Feb. 26, 2023 |  | Feb. 27, 2022 |  |
|  | Value | Percent of Net Sales | Value | Percent of Net Sales |
| Operating profit as reported | $730.2 | 14.2% | $815.3 | 18.0% |
| Divestitures gain, net | (13.7) | (0.3)% | (170.1) | (3.7)% |
| Mark-to-market effects | 66.6 | 1.3% | 20.0 | 0.4% |
| Investment activity, net | 20.1 | 0.4% | (11.1) | (0.2)% |
| Product recall | 1.1 | - % | - | - % |
| Restructuring charges | 2.1 | - % | 9.3 | 0.2% |
| Acquisition integration costs | 0.7 | - % | 4.3 | 0.1% |
| Transaction costs | - | - % | 8.6 | 0.2% |
| Non-income tax recovery | - | - % | 0.2 | - % |
| Adjusted operating profit | $807.0 | 15.7% | $676.5 | 14.9% |

| In Millions | Nine-Month Period Ended |  |  |  |
| --- | --- | --- | --- | --- |
|  | Feb. 26, 2023 |  | Feb. 27, 2022 |  |
|  | Value | Percent of Net Sales | Value | Percent of Net Sales |
| Operating profit as reported | $2,615.6 | 17.4% | $2,459.7 | 17.4% |
| Divestitures gain, net | (444.6) | (3.0)% | (170.1) | (1.2)% |
| Mark-to-market effects | 266.4 | 1.8% | (16.2) | (0.1)% |
| Investment activity, net | 82.1 | 0.5% | (20.9) | (0.1)% |
| Product recall | 25.5 | 0.2% | - | - % |
| Restructuring charges | 16.0 | 0.1% | 7.9 | 0.1% |
| Acquisition integration costs | 5.0 | - % | 20.2 | 0.1% |
| Transaction costs | 2.0 | - % | 56.8 | 0.4% |
| Non-income tax recovery | - | - % | (20.4) | (0.1)% |
| Adjusted operating profit | $2,567.9 | 17.0% | $2,317.0 | 16.4% |

Note: Tables may not foot due to rounding.

For more information on the reconciling items, please refer to the Significant Items Impacting Comparability section above.

33

### Adjusted Operating Profit Growth on a Constant-currency Basis

This measure is used in reporting to our Board of Directors and executive management and as a component of the measurement of our performance for incentive compensation purposes. We believe that this measure provides useful information to investors because it is the operating profit measure we use to evaluate operating profit performance on a comparable year-to-year basis. The measure is evaluated on a constant-currency basis by excluding the effect that foreign currency exchange rate fluctuations have on year-to-year comparability given the volatility in foreign currency exchange rates.

Our adjusted operating profit growth on a constant-currency basis is calculated as follows:

|  | Quarter Ended |  |  | Nine-Month Period Ended |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  | Feb. 26, 2023 | Feb. 27, 2022 | Change | Feb. 26, 2023 | Feb. 27, 2022 | Change |
| Operating profit as reported | $730.2 | $815.3 | (10)% | $2,615.6 | $2,459.7 | 6% |
| Divestitures gain, net | (13.7) | (170.1) |  | (444.6) | (170.1) |  |
| Mark-to-market effects | 66.6 | 20.0 |  | 266.4 | (16.2) |  |
| Investment activity, net | 20.1 | (11.1) |  | 82.1 | (20.9) |  |
| Product recall | 1.1 | - |  | 25.5 | - |  |
| Restructuring charges | 2.1 | 9.3 |  | 16.0 | 7.9 |  |
| Acquisition integration costs | 0.7 | 4.3 |  | 5.0 | 20.2 |  |
| Transaction costs | - | 8.6 |  | 2.0 | 56.8 |  |
| Non-income tax recovery | - | 0.2 |  | - | (20.4) |  |
| Adjusted operating profit | $807.0 | $676.5 | 19% | $2,567.9 | $2,317.0 | 11% |
| Foreign currency exchange impact |  |  | (1)pt |  |  | (1)pt |
| Adjusted operating profit growth, on a constant-currency basis |  |  | 20% |  |  | 11% |

Note: Table may not foot due to rounding.

For more information on the reconciling items, please refer to the Significant Items Impacting Comparability section above.

### Adjusted Diluted EPS and Related Constant-currency Growth Rates

This measure is used in reporting to our Board of Directors and executive management. We believe that this measure provides useful information to investors because it is the profitability measure we use to evaluate earnings performance on a comparable year-to-year basis.

The reconciliation of our GAAP measure, diluted EPS, to adjusted diluted EPS and the related constant-currency growth rates follows:

| Per Share Data | Quarter Ended |  |  | Nine-Month Period Ended |  |  |
| --- | --- | --- | --- | --- | --- | --- |
|  | Feb. 26, 2023 | Feb. 27, 2022 | Change | Feb. 26, 2023 | Feb. 27, 2022 | Change |
| Diluted earnings per share, as reported | $0.92 | $1.08 | (15)% | $3.28 | $3.07 | 7% |
| Divestitures gain, net | (0.08) | (0.28) |  | (0.62) | (0.28) |  |
| Mark-to-market effects | 0.09 | 0.03 |  | 0.34 | (0.02) |  |
| Investment activity, net | 0.03 | (0.01) |  | 0.11 | (0.03) |  |
| Product recall | - | - |  | 0.03 | - |  |
| Restructuring charges | - | 0.02 |  | 0.02 | 0.01 |  |
| Acquisition integration costs | - | 0.01 |  | 0.01 | 0.03 |  |
| Transaction costs | - | 0.01 |  | - | 0.07 |  |
| Non-income tax recovery | - | - |  | - | (0.02) |  |
| Adjusted diluted earnings per share | $0.97 | $0.84 | 15% | $3.18 | $2.82 | 13% |
| Foreign currency exchange impact |  |  | (1)pt |  |  | (1)pt |
| Adjusted diluted earnings per share growth, on a constant-currency basis |  |  | 17% |  |  | 14% |

Note: Table may not foot due to rounding.

For more information on the reconciling items, please refer to the Significant Items Impacting Comparability section above.

See our reconciliation below of the effective income tax rate as reported to the adjusted effective income tax rate for the tax impact of each item affecting comparability.

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### ***Constant-currency After-tax Earnings from Joint Ventures Growth Rates***

We believe that this measure provides useful information to investors because it provides transparency to underlying performance of our joint ventures by excluding the effect that foreign currency exchange rate fluctuations have on year-to-year comparability given volatility in foreign currency exchange markets.

After-tax earnings from joint ventures growth rates on a constant-currency basis are calculated as follows:

|  | Percentage Change in After-Tax Earnings from Joint Ventures as Reported | Impact of Foreign Currency Exchange | Percentage Change in After-Tax Earnings from Joint Ventures on Constant-Currency Basis |
| --- | --- | --- | --- |
| Quarter Ended Feb. 26, 2023 | (58)% | (7)pts | (51)% |
| Nine-Month Period Ended Feb. 26, 2023 | (37)% | (9)pts | (28)% |

Note: Table may not foot due to rounding.

### ***Net Sales Growth Rates for Our Canada Operating Unit on Constant-currency Basis***

We believe that this measure of our Canada operating unit net sales provides useful information to investors because it provides transparency to the underlying performance for the Canada operating unit within our North America Retail segment by excluding the effect that foreign currency exchange rate fluctuations have on year-to-year comparability given volatility in foreign currency exchange markets.

Net sales growth rates for our Canada operating unit on a constant-currency basis are calculated as follows:

|  | Percentage Change in Net Sales as Reported | Impact of Foreign Currency Exchange | Percentage Change in Net Sales on Constant- Currency Basis |
| --- | --- | --- | --- |
| Quarter Ended Feb. 26, 2023 | 2% | (6)pts | 8% |
| Nine-Month Period Ended Feb. 26, 2023 | 1% | (6)pts | 6% |

Note: Table may not foot due to rounding.

### ***Constant-currency Segment Operating Profit Growth Rates***

We believe that this measure provides useful information to investors because it provides transparency to underlying performance of our segments by excluding the effect that foreign currency exchange rate fluctuations have on year-to-year comparability given volatility in foreign currency exchange markets.

35

Our segments' operating profit growth rates on a constant-currency basis are calculated as follows:

|  | Quarter Ended Feb. 26, 2023 |  |  |
| --- | --- | --- | --- |
|  | Percentage Change in Operating Profit as Reported | Impact of Foreign Currency Exchange | Percentage Change in Operating Profit on Constant-Currency Basis |
| North America Retail | 29% | Flat | 29% |
| International | 18% | (8)pts | 27% |
| Pet | (7)% | Flat | (7)% |
| North America Foodservice | 134% | Flat | 134% |

|  | Nine-Month Period Ended Feb. 26, 2023 |  |  |
| --- | --- | --- | --- |
|  | Percentage Change in Operating Profit as Reported | Impact of Foreign Currency Exchange | Percentage Change in Operating Profit on Constant-Currency Basis |
| North America Retail | 24% | Flat | 24% |
| International | (39)% | (6)pts | (33)% |
| Pet | (13)% | Flat | (13)% |
| North America Foodservice | 24% | Flat | 24% |

Note: Tables may not foot due to rounding.

#### Adjusted Effective Income Tax Rates

We believe this measure provides useful information to investors because it presents the adjusted effective income tax rate on a comparable year-to-year basis.

Adjusted effective income tax rates are calculated as follows:

| In Millions (Except Per Share Data) | Quarter Ended |  |  |  | Nine-Month Period Ended |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Feb. 26, 2023 |  | Feb. 27, 2022 |  | Feb. 26, 2023 |  | Feb. 27, 2022 |  |
|  | Pretax Earnings (a) | Income Taxes | Pretax Earnings (a) | Income Taxes | Pretax Earnings (a) | Income Taxes | Pretax Earnings (a) | Income Taxes |
| As reported | $653.5 | $108.3 | $755.9 | $123.2 | $2,403.1 | $471.5 | $2,269.0 | $451.8 |
| Divestitures gain, net | (13.7) | 28.7 | (170.1) | 0.4 | (444.6) | (73.2) | (170.1) | 0.4 |
| Mark-to-market effects | 66.6 | 15.3 | 20.0 | 4.6 | 266.4 | 61.3 | (16.2) | (3.7) |
| Investment activity, net | 20.1 | 4.5 | (11.1) | (0.2) | 82.1 | 18.0 | (20.9) | 0.3 |
| Product recall | 1.1 | 0.3 | - | - | 25.5 | 5.9 | - | - |
| Restructuring charges | 2.1 | 0.7 | 9.3 | 1.7 | 16.0 | 4.5 | 7.9 | 3.6 |
| Acquisition integration costs | 0.7 | 0.1 | 4.3 | 1.0 | 5.0 | 1.1 | 20.2 | 4.6 |
| Transaction costs | - | - | 8.6 | (1.2) | 2.0 | 0.6 | 56.8 | 11.2 |
| Non-income tax recovery | - | - | 0.2 | 0.1 | - | - | (20.4) | (6.9) |
| As adjusted | $730.3 | $157.8 | $617.1 | $129.5 | $2,355.4 | $489.6 | $2,126.3 | $461.3 |
| Effective tax rate: |  |  |  |  |  |  |  |  |
| As reported |  | 16.6% |  | 16.3% |  | 19.6% |  | 19.9% |
| As adjusted |  | 21.6% |  | 21.0% |  | 20.8% |  | 21.7% |
| Sum of adjustment to income taxes |  | $49.5 |  | $6.4 |  | $18.1 |  | $9.5 |
| Average number of common shares - diluted EPS |  | 599.0 |  | 612.4 |  | 602.4 |  | 613.5 |
| Impact of income tax adjustments on adjusted diluted EPS |  | $(0.08) |  | $(0.01) |  | $(0.03) |  | $(0.02) |

Note: Table may not foot due to rounding.

(a) Earnings before income taxes and after-tax earnings from joint ventures.

For more information on the reconciling items, please refer to the Significant Items Impacting Comparability section above.

36

## Glossary

**AOCI.** Accumulated other comprehensive income (loss).

**Adjusted diluted EPS.** Diluted EPS adjusted for certain items affecting year-to-year comparability.

**Adjusted operating profit.** Operating profit adjusted for certain items affecting year-to-year comparability.

**Adjusted operating profit margin.** Operating profit adjusted for certain items affecting year-over-year comparability, divided by net sales.

**Constant currency.** Financial results translated to United States dollars using constant foreign currency exchange rates based on the rates in effect for the comparable prior-year period. To present this information, current period results for entities reporting in currencies other than United States dollars are translated into United States dollars at the average exchange rates in effect during the corresponding period of the prior fiscal year, rather than the actual average exchange rates in effect during the current fiscal year. Therefore, the foreign currency impact is equal to current year results in local currencies multiplied by the change in the average foreign currency exchange rate between the current fiscal period and the corresponding period of the prior fiscal year.

**Core working capital.** Accounts receivable plus inventories less accounts payable.

**Derivatives.** Financial instruments such as futures, swaps, options, and forward contracts that we use to manage our risk arising from changes in commodity prices, interest rates, foreign exchange rates, and stock prices.

**Euribor.** Euro Interbank Offered Rate.

**Fair value hierarchy.** For purposes of fair value measurement, we categorize assets and liabilities into one of three levels based on the assumptions (inputs) used in valuing the asset or liability. Level 1 provides the most reliable measure of fair value, while Level 3 generally requires significant management judgment. The three levels are defined as follows:

- Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.
- Level 2: Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.
- Level 3: Unobservable inputs reflecting management's assumptions about the inputs used in pricing the asset or liability.

**Free cash flow.** Net cash provided by operating activities less purchases of land, buildings, and equipment.

**Generally Accepted Accounting Principles (GAAP).** Guidelines, procedures, and practices that we are required to use in recording and reporting accounting information in our financial statements.

**Goodwill.** The difference between the purchase price of acquired companies plus the fair value of any noncontrolling and redeemable interests and the related fair values of net assets acquired.

**Gross margin.** Net sales less cost of sales.

**Hedge accounting.** Accounting for qualifying hedges that allows changes in a hedging instrument's fair value to offset corresponding changes in the hedged item in the same reporting period. Hedge accounting is permitted for certain hedging instruments and hedged items only if the hedging relationship is highly effective, and only prospectively from the date a hedging relationship is formally documented.

**Holistic Margin Management (HMM).** Company-wide initiative to use productivity savings, mix management, and price realization to offset input cost inflation, protect margins, and generate funds to reinvest in sales-generating activities.

**Interest bearing instruments.** Notes payable, long-term debt, including current portion, cash and cash equivalents, and certain interest bearing investments classified within prepaid expenses and other current assets and other assets.

**LIBOR.** London Interbank Offered Rate.

**Mark-to-market.** The act of determining a value for financial instruments, commodity contracts, and related assets or liabilities based on the current market price for that item.

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**Net mark-to-market valuation of certain commodity positions.** Realized and unrealized gains and losses on derivative contracts that will be allocated to segment operating profit when the exposure we are hedging affects earnings.

**Net price realization.** The impact of list and promoted price changes, net of trade and other price promotion costs.

**Net realizable value.** The estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.

**Noncontrolling interests.** Interests of subsidiaries held by third parties.

**Notional amount.** The amount of a position or an agreed upon amount in a derivative contract on which the value of financial instruments are calculated.

**OCI.** Other Comprehensive Income.

**Organic net sales growth.** Net sales growth adjusted for foreign currency translation, acquisitions, divestitures and a 53$^{rd}$ fiscal week, when applicable.

**Project-related costs.** Costs incurred related to our restructuring initiatives not included in restructuring charges.

**Redeemable interest.** Interest of subsidiaries held by a third party that can be redeemed outside of our control and therefore cannot be classified as a noncontrolling interest in equity.

**Reporting unit.** An operating segment or a business one level below an operating segment.

**SOFR.** Secured Overnight Financing Rate.

**Strategic Revenue Management (SRM).** A company-wide capability focused on generating sustainable benefits from net price realization and mix by identifying and executing against specific opportunities to apply tools including pricing, sizing, mix management, and promotion optimization across each of our businesses.

**Supply chain input costs.** Costs incurred to produce and deliver product, including costs for ingredients and conversion, inventory management, logistics, and warehousing.

**Translation adjustments.** The impact of the conversion of our foreign affiliates' financial statements to United States dollars for the purpose of consolidating our financial statements.

**Variable interest entities (VIEs).** A legal structure that is used for business purposes that either (1) does not have equity investors that have voting rights and share in all the entity's profits and losses or (2) has equity investors that do not provide sufficient financial resources to support the entity's activities.

**Working capital.** Current assets and current liabilities, all as of the last day of our fiscal year.

38

# **CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF 'SAFE HARBOR' PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995**

This report contains or incorporates by reference forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on our current expectations and assumptions. We also may make written or oral forward-looking statements, including statements contained in our filings with the Securities and Exchange Commission and in our reports to stockholders.

The words or phrases 'will likely result,' 'are expected to,' 'will continue,' 'is anticipated,' 'estimate,' 'plan,' 'project,' or similar expressions identify 'forward-looking statements' within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results and those currently anticipated or projected. We caution you not to place undue reliance on any such forward-looking statements.

In connection with the 'safe harbor' provisions of the Private Securities Litigation Reform Act of 1995, we are identifying important factors that could affect our financial performance and could cause our actual results in future periods to differ materially from any current opinions or statements.

Our future results could be affected by a variety of factors, such as: the impact of the COVID-19 pandemic on our business, suppliers, consumers, customers, and employees; disruptions or inefficiencies in the supply chain, including any impact of the COVID-19 pandemic; competitive dynamics in the consumer foods industry and the markets for our products, including new product introductions, advertising activities, pricing actions, and promotional activities of our competitors; economic conditions, including changes in inflation rates, interest rates, tax rates, or the availability of capital; product development and innovation; consumer acceptance of new products and product improvements; consumer reaction to pricing actions and changes in promotion levels; acquisitions or dispositions of businesses or assets; changes in capital structure; changes in the legal and regulatory environment, including tax legislation, labeling and advertising regulations, and litigation; impairments in the carrying value of goodwill, other intangible assets, or other long-lived assets, or changes in the useful lives of other intangible assets; changes in accounting standards and the impact of critical accounting estimates; product quality and safety issues, including recalls and product liability; changes in consumer demand for our products; effectiveness of advertising, marketing, and promotional programs; changes in consumer behavior, trends, and preferences, including weight loss trends; consumer perception of health-related issues, including obesity; consolidation in the retail environment; changes in purchasing and inventory levels of significant customers; fluctuations in the cost and availability of supply chain resources, including raw materials, packaging, energy, and transportation; effectiveness of restructuring and cost saving initiatives; volatility in the market value of derivatives used to manage price risk for certain commodities; benefit plan expenses due to changes in plan asset values and discount rates used to determine plan liabilities; failure or breach of our information technology systems; foreign economic conditions, including currency rate fluctuations; and political unrest in foreign markets and economic uncertainty due to terrorism or war.

You should also consider the risk factors that we identify in Item 1A of Part I of our Annual Report on Form 10-K for the fiscal year ended May 29, 2022 which could also affect our future results.

We undertake no obligation to publicly revise any forward-looking statements to reflect events or circumstances after the date of those statements or to reflect the occurrence of anticipated or unanticipated events.

# **Item 3. 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 | $47 | $6 | Rising interest rates |
| Foreign currency instruments | 38 | 18 | Increase in portfolio basis |
| Commodity instruments | 9 | (4) | Decrease in commodity prices |
| Equity instruments | 3 | 1 | 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.

39

# Item 4. 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.

40

# PART II. OTHER INFORMATION

| Item 6. | 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. |
| 101 | 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. |
| 104 | Cover Page, formatted in Inline Extensible Business Reporting Language and contained in Exhibit 101. |

41

# 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)

42

## Exhibit 31.1

#### Exhibit 31.1
I, Jeffrey L. Harmening, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of General Mills, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact

necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading

with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all

material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods

presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures

(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in

Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under

our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is

made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be

designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the

preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our

conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this

report based on such evaluation; and

(d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the

registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has

materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over

financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons

performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting

which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial

information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the

registrant's internal control over financial reporting.

Date: March 23, 2023

/s/ Jeffrey L. Harmening

Jeffrey L. Harmening

Chief Executive Officer

## Exhibit 31.2

#### Exhibit 31.2
I, Kofi A. Bruce, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of General Mills, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact

necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading

with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all

material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods

presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures

(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in

Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under

our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is

made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be

designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the

preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our

conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this

report based on such evaluation; and

(d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the

registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has

materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over

financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons

performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting

which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial

information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the

registrant's internal control over financial reporting.

Date: March 23, 2023

/s/ Kofi A. Bruce

Kofi A. Bruce

Chief Financial Officer

## Exhibit 32.1

#### Exhibit 32.1
I, Jeffrey L. Harmening, Chief Executive Officer of General Mills, Inc. (the "Company"), certify, pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1) the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended February 26, 2023 (the "Report") fully complies

with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations

of the Company.

Dated: March 23, 2023

/s/ Jeffrey L. Harmening

Jeffrey L. Harmening

Chief Executive Officer

## Exhibit 32.2

#### Exhibit 32.2
I, Kofi A. Bruce, Chief Financial Officer of General Mills, Inc. (the "Company"), certify, pursuant to Section 906 of the Sarbanes-

Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1) the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended February 26, 2023 (the "Report") fully complies

with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations

of the Company.

Dated: March 23, 2023

/s/ Kofi A. Bruce

Kofi A. Bruce

Chief Financial Officer