MINNEAPOLIS, March 18, 2015 /PRNewswire/ -- General Mills
(NYSE: GIS) today reported results for the third quarter of fiscal
2015.
Third Quarter Results Summary
- Net sales for the 13 weeks ended
Feb. 22, 2015, totaled $4.35 billion, down 1 percent from last year's
third-quarter results due to foreign currency effects. On a
constant-currency basis, quarterly net sales grew 3
percent.
- Segment operating profit totaled
$698 million, up 1 percent. In
constant currency, segment operating profit rose 3
percent.
- Diluted earnings per share (EPS) totaled
56 cents compared to 64 cents a year ago.
- Adjusted diluted EPS, which excludes
certain items affecting comparability of results, totaled
70 cents in the third quarter of
2015, up 13 percent from 62 cents in
last year's third quarter. On a constant-currency basis, adjusted
diluted EPS grew 15 percent.
Constant-currency net sales, total and constant-currency
segment operating profit, adjusted diluted EPS and adjusted diluted
EPS growth rate in constant currency are each non-GAAP
measures. Please see Note 9 to the Consolidated Financial
Statements below for reconciliation of these measures to the
relevant GAAP measures.
General Mills Chairman and Chief Executive Officer Ken Powell said, "Our third-quarter results
reflect strengthened operating performance. Our U.S. Retail
segment posted net sales and profit growth including contributions
from the Annie's business acquired in October 2014.
Constant-currency net sales and profit growth accelerated for our
International segment. And the Convenience Stores and
Foodservice segment led our operating results, with sales up 6
percent and profit up 11 percent."
Third-quarter net sales of $4.35
billion were 1 percent below year-ago results, as foreign
currency exchange reduced net sales growth by 4 percentage
points. On a constant-currency basis, net sales grew 3
percent, including 1 point of growth contributed by the Annie's
acquisition. Pound volume was 1 percent below year-ago
levels. Net price realization and mix added 4 points of net
sales growth. Gross margin was below year-ago levels,
primarily reflecting negative product mix and restructuring
charges. Selling, general and administrative expenses
declined, driven by an 8 percent decrease in advertising and media
expense along with cost savings from restructuring actions.
Segment operating profit rose 1 percent to $698 million. General Mills posted
restructuring and project-related charges totaling $74 million pretax in the third quarter,
including $25 million recorded in
cost of sales. (Please see the Corporate Items section
below for more information on restructuring actions.)
Third-quarter net earnings attributable to General Mills totaled
$343 million and diluted EPS totaled
56 cents. Adjusted diluted EPS,
which excludes restructuring charges and certain other items
affecting comparability, totaled 70
cents, up 13 percent from 62
cents in last year's third quarter. Foreign currency
exchange reduced 2015 third-quarter adjusted diluted EPS by
approximately 1 cent.
Nine-month Results Summary
- Net sales through the first nine months of
fiscal 2015 totaled $13.3 billion,
down 2 percent from $13.6 billion a
year ago. On a constant-currency basis, nine-month net sales
essentially matched year-ago results.
- Nine-month segment operating profit
totaled $2.24 billion, down 8 percent
as reported and down 6 percent in constant currency.
- Diluted EPS totaled $1.67 compared to $2.18 a year ago.
- Adjusted diluted EPS totaled $2.11 this year to date, compared to $2.15 a year ago. Foreign currency exchange
reduced fiscal 2015 nine-month adjusted diluted EPS by
approximately 4 cents.
Through the first nine months of fiscal 2015, U.S. Retail
segment dollar market shares increased in categories representing
68 percent of the company's sales volume in Nielsen-measured
outlets. This included market share gains in RTE cereal,
yogurt and snacks. U.S. Retail products making particularly
strong contributions to nine-month net sales results included
Yoplait Original Style and Greek yogurt varieties; Cinnamon Toast
Crunch, Nature Valley granola and Cheerios Protein cereals; Fiber
One snack bar varieties and Cascadian Farm organic grain
snacks. In the Convenience Stores and Foodservice segment,
Pillsbury frozen breakfast items, Yoplait yogurt varieties and Big
G bowlpack cereals were strong net sales contributors.
International products posting strong nine-month sales
contributions included Old El Paso dinner kits in Canada, Europe and Australia; Yoki and La Saltena meal products
in Latin America; and Haagen-Dazs
superpremium ice cream in the Asia /
Pacific region.
U.S. Retail Segment Results
Third-quarter net sales for General Mills' U.S. Retail segment
totaled $2.65 billion, up 1 percent
from prior-year results. Net price realization and mix
contributed 3 points of net sales growth, while lower pound volume
reduced sales growth by 2 points. The Annie's business
acquired in October 2014 contributed
2 points of net sales growth and 1 point of pound volume
growth. The Yogurt and Snacks operating units drove the
quarterly net sales increase. Cereal unit net sales were
essentially unchanged from the prior-year level, while the Meals
and Baking Products units posted net sales declines for the
quarter. U.S. Retail segment operating profit grew 1 percent
to $521 million.
Through nine months, U.S. Retail net sales totaled $7.96 billion, down 3 percent from year-ago
results, with lower volume contributing 2 points of the net sales
decline, and negative price realization and mix contributing 1
point of decline. Segment operating profit of $1.59 billion was 12 percent below prior-year
results.
International Segment Summary
Third-quarter net sales for General Mills' consolidated
international businesses decreased 7 percent to $1.23 billion due to foreign exchange
effects. Pound volume matched year ago levels, and net price
realization and mix added 6 points of net sales growth. This
was offset by foreign currency exchange, which reduced net sales
growth by 13 points in the third quarter. On a
constant-currency basis, international segment net sales grew 6
percent in the quarter, including gains of 3 percent in the
Europe region, 4 percent in both
the Canada and the Asia / Pacific regions, and 20 percent in
Latin America. International segment operating profit totaled
$108 million, down 2 percent as
reported but up 10 percent in constant currency. (Please see
Note 9 for reconciliation of non-GAAP measures.)
Through the first nine months of fiscal 2015, International
segment net sales totaled $3.91
billion, down 3 percent. Foreign currency exchange
reduced net sales growth by 8 percentage points. On a
constant-currency basis, net sales grew 5 percent reflecting
favorable net price realization and mix. Pound volume
essentially matched year ago levels. Nine-month segment
operating profit growth totaled $389
million, essentially matching year-ago levels as reported
and up 8 percent on a constant-currency basis. (Please see Note
9).
Convenience Stores and Foodservice
Third-quarter net sales for the Convenience Stores and Foodservice
segment grew 6 percent to reach $465
million. Net price realization and mix contributed 7
points of net sales growth, while pound volume subtracted 1 point
of sales growth. Frozen breakfast items, yogurt, and cereal
led sales performance in the quarter. Segment operating
profit grew 11 percent to reach $69
million.
Through nine months, Convenience Stores and Foodservice segment
net sales grew 4 percent to reach $1.47
billion. Net price realization and mix contributed 5
points of net sales growth, while pound volume subtracted 1 point
of growth. Segment operating profit through the first nine
months of fiscal 2015 grew 14 percent to $252 million.
Joint Venture Summary
Combined after-tax earnings from the Cereal Partners Worldwide
(CPW) and Haagen-Dazs Japan (HDJ) joint ventures totaled
$13 million, significantly below
prior-year results due to foreign exchange effects and a
$4 million asset impairment charge
for CPW's South Africa
business. Constant-currency after-tax earnings from joint
ventures declined 36 percent. (Please see Note 9 below for
reconciliation of this non-GAAP measure.)
Constant-currency net sales declined 3 percent for CPW but grew 7
percent for HDJ. Through the first nine months of fiscal
2015, after-tax earnings from joint ventures totaled $66 million, down 9 percent as reported and down
5 percent in constant currency.
Corporate Items
Unallocated corporate items totaled $112
million net expense in the third quarter of fiscal 2015,
compared to $19 million net expense a
year earlier. Excluding mark-to-market valuation effects,
restructuring and project-related charges, Annie's integration
expenses and a $7 million foreign
exchange loss in this year's third quarter related to balance sheet
re-measurement for our Venezuelan subsidiary, unallocated corporate
items totaled $32 million net expense
this year compared to $42 million net
expense a year ago.
General Mills recorded restructuring, impairment and other exit
costs totaling $49 million pretax
during the third quarter. An additional $22 million of restructuring charges and
$3 million of project-related charges
were recorded in cost of sales.
Net interest expense rose 6 percent to $80 million, reflecting a higher debt level
partially offset by a lower average interest rate. The
effective tax rate was 25.5 percent in the third quarter.
Excluding items affecting comparability, the adjusted effective tax
rate was 27.5 percent for the third quarter and 31.3 percent for
the first nine months of 2015. (Please see Note 9 for
reconciliation of this non-GAAP measure.)
Cash Flow Items
Cash provided by operating activities totaled $1.56 billion through the first nine months of
2015, down from the prior year primarily due to lower net
earnings. Cash payments related to restructuring and
project-related actions totaled $47
million through the first nine months of 2015. Capital
investments through the first nine months totaled $491 million. Dividends paid year-to-date
totaled $751 million.
During the first nine months of 2015, General Mills repurchased
22 million shares of common stock for an aggregate purchase price
of $1.16 billion. The average
number of diluted shares outstanding decreased by 30 million
through the first nine months, reflecting the impact of repurchase
activity during both fiscal 2014 and 2015.
Outlook
Ken Powell said, "Our operating
results are beginning to show the positive effects of our
companywide focus on putting the Consumer First. Where we
have made improvements to established brands, launched new items,
and developed marketing messages that respond to consumers'
evolving preferences, we are seeing growth in our businesses.
We're developing plans for fiscal 2016 designed to build on this
momentum and expand the impact of our Consumer First strategic
focus."
General Mills said it continues to expect strong growth in the
fourth quarter of fiscal 2015, including incremental contributions
from the Annie's acquisition and the benefit of one extra week in
the period. The company also reaffirmed its fiscal 2015
full-year targets. Net sales in constant currency are
expected to grow at a low single-digit rate from the 2014 base of
$17.9 billion. This includes an
estimated 2 points of sales growth from the extra week and
incremental sales from the Annie's acquisition. Total segment
operating profit in constant currency is expected to decline at a
low single-digit rate from prior-year results of $3.15 billion. Fiscal 2015 adjusted diluted
earnings per share are expected to grow at a low-single-digit rate
in constant currency from the base of $2.82 earned in fiscal 2014. At current
exchange rates, the company estimates a 7-cent reduction to fiscal 2015 adjusted diluted
EPS from currency translation.
General Mills will hold a briefing for investors today,
March 18, 2015, beginning at
8:30 a.m. Eastern time. You may
access the web cast from General Mills' internet home
page: generalmills.com.
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
that are based on our current expectations and assumptions. These
forward-looking statements, including the statements under the
caption "Outlook," and statements made by Mr. Powell, are subject
to certain risks and uncertainties that could cause actual results
to differ materially from the potential results discussed in the
forward-looking statements. In particular, our predictions about
future net sales and earnings could be affected by a variety of
factors, including: 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 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 significant 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, and energy;
disruptions or inefficiencies in the supply chain; 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. The company undertakes no obligation to publicly
revise any forward-looking statement to reflect any future events
or circumstances.
Consolidated
Statements of Earnings and Supplementary Information
|
GENERAL MILLS, INC.
AND SUBSIDIARIES
|
(Unaudited) (In
Millions, Except per Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Nine-Month Period
Ended
|
|
|
Feb. 22,
2015
|
|
|
Feb. 23,
2014
|
|
%
Change
|
|
|
Feb. 22,
2015
|
|
|
Feb. 23,
2014
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
4,350.9
|
|
$
|
4,377.4
|
|
(0.6)
|
%
|
|
$
|
13,331.5
|
|
$
|
13,625.8
|
|
(2.2)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
2,975.0
|
|
|
2,864.7
|
|
3.9
|
%
|
|
|
8,897.8
|
|
|
8,738.4
|
|
1.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general, and administrative expenses
|
|
789.4
|
|
|
842.1
|
|
(6.3)
|
%
|
|
|
2,502.1
|
|
|
2,608.4
|
|
(4.1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
impairment, and other
exit
costs
|
|
49.3
|
|
|
-
|
|
NM
|
|
|
|
277.9
|
|
|
3.5
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
537.2
|
|
|
670.6
|
|
(19.9)
|
%
|
|
|
1,653.7
|
|
|
2,275.5
|
|
(27.3)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest,
net
|
|
80.0
|
|
|
75.5
|
|
6.0
|
%
|
|
|
235.8
|
|
|
223.0
|
|
5.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before
income taxes and after-tax
earnings from
joint ventures
|
|
457.2
|
|
|
595.1
|
|
(23.2)
|
%
|
|
|
1,417.9
|
|
|
2,052.5
|
|
(30.9)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
116.5
|
|
|
200.9
|
|
(42.0)
|
%
|
|
|
422.5
|
|
|
679.6
|
|
(37.8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After-tax earnings
from joint ventures
|
|
13.1
|
|
|
22.8
|
|
(42.5)
|
%
|
|
|
66.2
|
|
|
73.0
|
|
(9.3)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings,
including earnings attributable
to redeemable
and noncontrolling interests
|
|
353.8
|
|
|
417.0
|
|
(15.2)
|
%
|
|
|
1,061.6
|
|
|
1,445.9
|
|
(26.6)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to redeemable
and
noncontrolling interests
|
|
10.6
|
|
|
6.4
|
|
NM
|
|
|
|
27.1
|
|
|
26.1
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to General Mills
|
$
|
343.2
|
|
$
|
410.6
|
|
(16.4)
|
%
|
|
$
|
1,034.5
|
|
$
|
1,419.8
|
|
(27.1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
$
|
0.57
|
|
$
|
0.66
|
|
(13.6)
|
%
|
|
$
|
1.71
|
|
$
|
2.24
|
|
(23.7)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
diluted
|
$
|
0.56
|
|
$
|
0.64
|
|
(12.5)
|
%
|
|
$
|
1.67
|
|
$
|
2.18
|
|
(23.4)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per
share
|
$
|
0.41
|
|
$
|
0.38
|
|
7.9
|
%
|
|
$
|
1.23
|
|
$
|
1.14
|
|
7.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
Nine-Month Period
Ended
|
Comparisons as a % of
net sales:
|
|
Feb. 22,
2015
|
|
|
Feb. 23,
2014
|
|
Basis Pt
Change
|
|
|
|
Feb. 22,
2015
|
|
|
Feb. 23,
2014
|
|
Basis Pt
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
31.6%
|
|
|
34.6%
|
|
(300)
|
|
|
|
33.3%
|
|
|
35.9%
|
|
(260)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general, and administrative expenses
|
|
18.1%
|
|
|
19.2%
|
|
(110)
|
|
|
|
18.8%
|
|
|
19.1%
|
|
(30)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
12.4%
|
|
|
15.3%
|
|
(290)
|
|
|
|
12.4%
|
|
|
16.7%
|
|
(430)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to General Mills
|
|
7.9%
|
|
|
9.4%
|
|
(150)
|
|
|
|
7.8%
|
|
|
10.4%
|
|
(260)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
Nine-Month Period
Ended
|
Comparisons as a % of
net sales excluding
certain items
affecting comparability (a):
|
|
Feb. 22,
2015
|
|
|
Feb. 23,
2014
|
|
Basis Pt
Change
|
|
|
|
Feb. 22,
2015
|
|
|
Feb. 23,
2014
|
|
Basis Pt
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
33.2%
|
|
|
34.1%
|
|
(90)
|
|
|
|
34.3%
|
|
|
35.6%
|
|
(130)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
15.3%
|
|
|
14.8%
|
|
50
|
|
|
|
15.7%
|
|
|
16.4%
|
|
(70)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to General Mills
|
|
9.8%
|
|
|
9.1%
|
|
70
|
|
|
|
9.9%
|
|
|
10.2%
|
|
(30)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) See Note 9 for a
reconciliation of this measure not defined by generally accepted
accounting principles (GAAP).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying
notes to consolidated financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Segment
Results and Supplementary Information
|
|
|
|
|
GENERAL MILLS, INC.
AND SUBSIDIARIES
|
|
|
|
|
(Unaudited) (In
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
Nine-Month Period
Ended
|
|
|
Fiscal
Year
|
|
|
Feb. 22,
2015
|
|
|
Feb. 23,
2014
|
|
%
Change
|
|
|
|
Feb. 22,
2015
|
|
|
Feb. 23,
2014
|
|
%
Change
|
|
|
2014
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Retail
|
$
|
2,651.9
|
|
$
|
2,618.5
|
|
1.3
|
%
|
|
$
|
7,957.8
|
|
$
|
8,168.0
|
|
(2.6)
|
%
|
|
$
|
10,604.9
|
International
|
|
1,233.9
|
|
|
1,322.4
|
|
(6.7)
|
%
|
|
|
3,906.1
|
|
|
4,046.5
|
|
(3.5)
|
%
|
|
|
5,385.9
|
Convenience
Stores and Foodservice
|
|
465.1
|
|
|
436.5
|
|
6.6
|
%
|
|
|
1,467.6
|
|
|
1,411.3
|
|
4.0
|
%
|
|
|
1,918.8
|
Total
|
$
|
4,350.9
|
|
$
|
4,377.4
|
|
(0.6)
|
%
|
|
$
|
13,331.5
|
|
$
|
13,625.8
|
|
(2.2)
|
%
|
|
$
|
17,909.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Retail
|
$
|
520.8
|
|
$
|
516.6
|
|
0.8
|
%
|
|
$
|
1,594.1
|
|
$
|
1,810.1
|
|
(11.9)
|
%
|
|
$
|
2,311.5
|
International
|
|
108.4
|
|
|
110.5
|
|
(1.9)
|
%
|
|
|
388.7
|
|
|
389.3
|
|
(0.2)
|
%
|
|
|
535.1
|
Convenience
Stores and Foodservice
|
|
69.0
|
|
|
62.4
|
|
10.6
|
%
|
|
|
252.5
|
|
|
221.4
|
|
14.0
|
%
|
|
|
307.3
|
Total segment
operating profit
|
|
698.2
|
|
|
689.5
|
|
1.3
|
%
|
|
|
2,235.3
|
|
|
2,420.8
|
|
(7.7)
|
%
|
|
|
3,153.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated corporate
items
|
|
111.7
|
|
|
18.9
|
|
491.0
|
%
|
|
|
303.7
|
|
|
141.8
|
|
114.2
|
%
|
|
|
258.4
|
Divestiture
(gain)
|
|
-
|
|
|
-
|
|
NM
|
|
|
|
-
|
|
|
-
|
|
NM
|
|
|
|
(65.5)
|
Restructuring,
impairment, and
other exit
costs
|
|
49.3
|
|
|
-
|
|
NM
|
|
|
|
277.9
|
|
|
3.5
|
|
NM
|
|
|
|
3.6
|
Operating
profit
|
$
|
537.2
|
|
$
|
670.6
|
|
(19.9)
|
%
|
|
$
|
1,653.7
|
|
$
|
2,275.5
|
|
(27.3)
|
%
|
|
$
|
2,957.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
Nine-Month Period
Ended
|
|
|
|
|
|
Feb. 22,
2015
|
|
|
Feb. 23,
2014
|
|
Basis Pt
Change
|
|
|
|
Feb. 22,
2015
|
|
|
Feb. 23,
2014
|
|
Basis Pt
Change
|
|
|
|
|
Segment operating
profit as a
% of net
sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Retail
|
|
19.6%
|
|
|
19.7%
|
|
(10)
|
|
|
|
20.0%
|
|
|
22.2%
|
|
(220)
|
|
|
|
|
International
|
|
8.8%
|
|
|
8.4%
|
|
40
|
|
|
|
10.0%
|
|
|
9.6%
|
|
40
|
|
|
|
|
Convenience
Stores and Foodservice
|
|
14.8%
|
|
|
14.3%
|
|
50
|
|
|
|
17.2%
|
|
|
15.7%
|
|
150
|
|
|
|
|
Total segment
operating profit
|
|
16.0%
|
|
|
15.8%
|
|
20
|
|
|
|
16.8%
|
|
|
17.8%
|
|
(100)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying
notes to consolidated financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Balance Sheets
|
GENERAL MILLS, INC.
AND SUBSIDIARIES
|
(In Millions, Except
Par Value)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Feb. 22,
2015
|
|
|
Feb. 23,
2014
|
|
|
May 25,
2014
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
$
|
784.2
|
|
$
|
847.1
|
|
$
|
867.3
|
Receivables
|
|
|
1,585.3
|
|
|
1,648.1
|
|
|
1,483.6
|
Inventories
|
|
|
1,585.1
|
|
|
1,559.6
|
|
|
1,559.4
|
Deferred
income taxes
|
|
|
120.7
|
|
|
103.6
|
|
|
74.1
|
Prepaid
expenses and other current assets
|
|
|
389.1
|
|
|
399.2
|
|
|
409.1
|
|
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
|
4,464.4
|
|
|
4,557.6
|
|
|
4,393.5
|
|
|
|
|
|
|
|
|
|
|
Land, buildings, and
equipment
|
|
|
3,725.4
|
|
|
3,797.0
|
|
|
3,941.9
|
Goodwill
|
|
|
8,935.1
|
|
|
8,648.9
|
|
|
8,650.5
|
Other intangible
assets
|
|
|
4,993.3
|
|
|
5,011.7
|
|
|
5,014.3
|
Other
assets
|
|
|
1,264.9
|
|
|
909.8
|
|
|
1,145.5
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
23,383.1
|
|
$
|
22,925.0
|
|
$
|
23,145.7
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
1,481.3
|
|
$
|
1,360.3
|
|
$
|
1,611.3
|
Current
portion of long-term debt
|
|
|
1,750.6
|
|
|
1,203.8
|
|
|
1,250.6
|
Notes
payable
|
|
|
1,897.9
|
|
|
545.3
|
|
|
1,111.7
|
Other
current liabilities
|
|
|
1,572.7
|
|
|
1,574.2
|
|
|
1,449.9
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
6,702.5
|
|
|
4,683.6
|
|
|
5,423.5
|
|
|
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
6,642.6
|
|
|
7,179.6
|
|
|
6,423.5
|
Deferred income
taxes
|
|
|
1,792.7
|
|
|
1,474.4
|
|
|
1,666.0
|
Other
liabilities
|
|
|
1,594.7
|
|
|
1,822.0
|
|
|
1,643.2
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
16,732.5
|
|
|
15,159.6
|
|
|
15,156.2
|
|
|
|
|
|
|
|
|
|
|
Redeemable
interest
|
|
|
801.5
|
|
|
987.3
|
|
|
984.1
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock, 754.6 shares issued, $0.10 par value
|
|
|
75.5
|
|
|
75.5
|
|
|
75.5
|
Additional paid-in capital
|
|
|
1,293.2
|
|
|
1,216.0
|
|
|
1,231.8
|
Retained
earnings
|
|
|
12,070.4
|
|
|
11,636.5
|
|
|
11,787.2
|
Common
stock in treasury, at cost,
shares of 158.6, 138.4 and 142.3
|
|
|
(6,160.1)
|
|
|
(4,979.7)
|
|
|
(5,219.4)
|
Accumulated other comprehensive loss
|
|
|
(1,837.8)
|
|
|
(1,640.6)
|
|
|
(1,340.3)
|
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
|
5,441.2
|
|
|
6,307.7
|
|
|
6,534.8
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling
interests
|
|
|
407.9
|
|
|
470.4
|
|
|
470.6
|
|
|
|
|
|
|
|
|
|
|
Total
equity
|
|
|
5,849.1
|
|
|
6,778.1
|
|
|
7,005.4
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
equity
|
|
$
|
23,383.1
|
|
$
|
22,925.0
|
|
$
|
23,145.7
|
|
|
|
|
|
|
|
|
|
|
See accompanying
notes to consolidated financial statements.
|
|
|
|
|
|
|
Consolidated
Statements of Cash Flows
|
GENERAL MILLS, INC.
AND SUBSIDIARIES
|
(Unaudited) (In
Millions)
|
|
Nine-Month Period
Ended
|
|
|
Feb. 22,
2015
|
|
|
Feb. 23,
2014
|
Cash Flows -
Operating Activities
|
|
|
|
|
|
Net
earnings, including earnings attributable to redeemable
|
|
|
|
|
|
and noncontrolling interests
|
$
|
1,061.6
|
|
$
|
1,445.9
|
Adjustments to reconcile net earnings to net cash
|
|
|
|
|
|
provided by operating activities:
|
|
|
|
|
|
Depreciation and amortization
|
|
443.7
|
|
|
442.1
|
After-tax earnings from joint ventures
|
|
(66.2)
|
|
|
(73.0)
|
Distributions of earnings from joint ventures
|
|
36.8
|
|
|
41.6
|
Stock-based compensation
|
|
84.5
|
|
|
87.4
|
Deferred income taxes
|
|
31.2
|
|
|
95.8
|
Tax
benefit on exercised options
|
|
(56.6)
|
|
|
(45.6)
|
Pension and other postretirement benefit plan
contributions
|
|
(35.3)
|
|
|
(37.3)
|
Pension and other postretirement benefit plan costs
|
|
68.3
|
|
|
93.0
|
Restructuring, impairment, and other exit costs
|
|
275.2
|
|
|
(13.8)
|
Changes in current assets and liabilities,
|
|
|
|
|
|
excluding the effects of acquisitions
|
|
(182.2)
|
|
|
(186.2)
|
Other, net
|
|
(99.6)
|
|
|
(125.7)
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
1,561.4
|
|
|
1,724.2
|
|
|
|
|
|
|
Cash Flows -
Investing Activities
|
|
|
|
|
|
Purchases of land, buildings, and equipment
|
|
(490.9)
|
|
|
(416.4)
|
Acquisitions, net of cash acquired
|
|
(822.3)
|
|
|
-
|
Investments in affiliates, net
|
|
(92.1)
|
|
|
(46.0)
|
Proceeds
from disposal of land, buildings, and equipment
|
|
1.3
|
|
|
5.2
|
Exchangeable note
|
|
-
|
|
|
29.3
|
Other,
net
|
|
(4.3)
|
|
|
(2.4)
|
|
|
|
|
|
|
Net cash used by investing activities
|
|
(1,408.3)
|
|
|
(430.3)
|
|
|
|
|
|
|
Cash Flows -
Financing Activities
|
|
|
|
|
|
Change
in notes payable
|
|
766.4
|
|
|
6.8
|
Issuance
of long-term debt
|
|
1,274.6
|
|
|
1,673.0
|
Payment
of long-term debt
|
|
(395.6)
|
|
|
(744.5)
|
Proceeds
from common stock issued on exercised options
|
|
103.1
|
|
|
42.6
|
Tax
benefit on exercised options
|
|
56.6
|
|
|
45.6
|
Purchases of common stock for treasury
|
|
(1,161.7)
|
|
|
(1,403.2)
|
Dividends paid
|
|
(751.3)
|
|
|
(729.4)
|
Addition
of noncontrolling interest
|
|
-
|
|
|
17.6
|
Distributions to noncontrolling and redeemable interest
holders
|
|
(24.0)
|
|
|
(76.5)
|
Other,
net
|
|
(14.6)
|
|
|
(2.2)
|
|
|
|
|
|
|
Net cash used by financing activities
|
|
(146.5)
|
|
|
(1,170.2)
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
(89.7)
|
|
|
(18.0)
|
Increase (decrease)
in cash and cash equivalents
|
|
(83.1)
|
|
|
105.7
|
Cash and cash
equivalents - beginning of year
|
|
867.3
|
|
|
741.4
|
|
|
|
|
|
|
Cash and cash
equivalents - end of period
|
$
|
784.2
|
|
$
|
847.1
|
|
|
|
|
|
|
Cash Flow from
Changes in Current Assets and Liabilities,
excluding the
effects of acquisitions:
|
|
|
|
|
|
Receivables
|
$
|
(176.4)
|
|
$
|
(207.8)
|
Inventories
|
|
(50.8)
|
|
|
(30.1)
|
Prepaid
expenses and other current assets
|
|
(11.7)
|
|
|
36.6
|
Accounts
payable
|
|
(18.9)
|
|
|
(18.8)
|
Other
current liabilities
|
|
75.6
|
|
|
33.9
|
|
|
|
|
|
|
Changes in current
assets and liabilities
|
$
|
(182.2)
|
|
$
|
(186.2)
|
See accompanying
notes to consolidated financial statements.
|
|
|
|
|
|
GENERAL MILLS, INC.
AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
|
(Unaudited)
|
|
|
|
|
(1)
|
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 for annual and interim financial information. In the
opinion of management, all adjustments considered necessary for a
fair presentation have been included and are of a normal recurring
nature.
|
|
|
|
Beginning in the
first quarter of fiscal 2015, we changed how we assess operating
segment performance to exclude the asset and liability
remeasurement impact of hyperinflationary economies. This impact is
now included in unallocated corporate items. All periods presented
have been changed to conform to this presentation.
|
|
|
(2)
|
Beginning with the
second quarter of fiscal 2015, we realigned certain operating units
within our U.S. Retail operating segment. We also changed the name
of our Yoplait operating unit to Yogurt and our Big G operating
unit to Cereal. Frozen Foods transitioned into Meals and Baking
Products. Small Planet Foods transitioned into Snacks, Cereal, and
Meals. Yogurt was unchanged. We revised the amounts previously
reported in the net sales percentage change by operating unit
within our U.S. Retail segment. These realignments had no effect on
previously reported consolidated net sales, operating segments' net
sales, operating profit, segment operating profit, net earnings
attributable to General Mills or earnings per share.
|
|
|
(3)
|
Venezuela is a highly
inflationary economy and as such, we remeasure the value of the
assets and liabilities of our Venezuelan subsidiary based on the
exchange rate at which we expect to remit dividends in U.S.
dollars. In February 2014, the Venezuelan government established a
new foreign exchange market mechanism ("SICAD 2") and at that time
indicated that it would be the market through which U.S. dollars
would be obtained for the remittance of dividends. On February 12,
2015, the Venezuelan government replaced SICAD 2 with a new foreign
exchange market mechanism ("SIMADI"). We expect to be able to
access U.S. dollars through the SIMADI market. SIMADI has
significantly higher foreign exchange rates than those available
through the other foreign exchange mechanisms. In the nine-month
period ended February 22, 2015, we recorded a $7 million foreign
exchange loss in unallocated corporate items resulting from the
remeasurement of assets and liabilities of our Venezuelan
subsidiary at the SIMADI rate of 171 bolivars per U.S. dollar. Our
Venezuela operations represent less than 1 percent of our
consolidated assets, liabilities, net sales, and segment operating
profit. As of February 22, 2015, we had $0.4 million of non-U.S.
dollar cash balances in Venezuela.
|
|
|
(4)
|
On October 21,
2014, we acquired Annie's, Inc. (Annie's), a publicly traded food
company headquartered in Berkeley, California, for an aggregate
purchase price of $821.2 million, which we funded by issuing debt.
We consolidated Annie's into our Consolidated Balance Sheets and
recorded goodwill of $589.8 million, an indefinite lived intangible
asset for the Annie's brand of $244.5 million and a finite
lived customer relationship asset of $23.9 million. The pro forma
effects of this acquisition were not material.
|
|
|
(5)
|
We are currently
pursuing several multi-year restructuring initiatives designed to
increase our efficiency and focus our business behind our key
growth strategies. Charges related to these activities were as
follows:
|
|
|
|
|
Quarter
Ended
|
|
|
Nine-Month Period Ended
|
In
Millions
|
|
Feb. 22,
2015
|
|
Feb. 23,
2014
|
|
|
Feb. 22,
2015
|
|
Feb. 23,
2014
|
Cost of
sales
|
$
|
21.9
|
$
|
-
|
|
$
|
40.5
|
$
|
-
|
Restructuring,
impairment, and other exit costs
|
|
49.3
|
|
-
|
|
|
277.9
|
|
3.5
|
Total restructuring
charges
|
$
|
71.2
|
$
|
-
|
|
$
|
318.4
|
$
|
3.5
|
Project-related costs
classified in cost of sales
|
$
|
2.8
|
$
|
-
|
|
$
|
3.5
|
$
|
-
|
During the second quarter of fiscal 2015, we approved Project
Catalyst, a restructuring plan to increase organizational
effectiveness and reduce overhead expense. In connection with this
project, we expect to eliminate approximately 800 positions
primarily in the United States. We
expect to incur approximately $146
million of net expenses relating to these actions of which
approximately $127 million will be
cash. We expect these actions to be largely completed by the end of
fiscal 2015.
Project Century (Century) is a review of our North American
manufacturing and distribution network to streamline operations and
identify potential capacity reductions. In addition to the actions
taken at certain facilities described below, we incurred
$17 million of restructuring charges
in the nine-month period ended February 22,
2015 related to Century of which $6
million was cash.
As part of Century, we approved actions in the third quarter of
fiscal 2015 to reduce our refrigerated dough capacity and exit our
Midland, Ontario, Canada and
New Albany, Indiana facilities,
which support our U.S. Retail, International and Convenience Stores
and Foodservice supply chains. The Midland action will affect approximately 100
positions and we expect to incur approximately $20 million of net expenses relating to this
action, of which approximately $12
million will be cash. We recorded $6
million of restructuring charges in the third quarter of
fiscal 2015. The New Albany action
will affect approximately 400 positions and we expect to incur
approximately $88 million of net
expense relating to this action of which approximately $44 million will be cash. We recorded
$47 million of restructuring charges
in the third quarter of fiscal 2015. We anticipate these actions
will be completed by the end of fiscal 2018.
During the second quarter of fiscal 2015, we approved a
restructuring plan to consolidate yogurt manufacturing capacity and
exit our Methuen, Massachusetts
facility in our U.S. Retail and Convenience Stores and Foodservice
supply chains as part of Century. This action will affect
approximately 250 positions. We recorded $9
million of restructuring charges in the third quarter of
fiscal 2015 and $35 million in the
nine-month period ended February 22,
2015. We expect to incur approximately $70 million of net expenses relating to this
action of which approximately $20
million will be cash. We expect this action to be
completed by the end of fiscal 2016.
Also as part of Century, during the second quarter of fiscal
2015, we approved a restructuring plan to eliminate excess cereal
and dry mix capacity and exit our Lodi,
California facility in our U.S. Retail supply
chain. This action will affect approximately 430 positions. We
recorded $9 million of restructuring
charges in the third quarter of fiscal 2015 and $54 million in the nine month period ended
February 22, 2015. We expect to incur
approximately $100 million of net
expenses relating to this action of which approximately
$38 million will be cash. We expect
this action to be completed by the end of fiscal 2016.
During the first quarter of fiscal 2015, we approved a plan to
combine certain Yoplait and General Mills operational facilities
within our International segment to increase efficiencies and
reduce costs. This action will affect approximately 240
positions. We recorded $14
million of restructuring charges in the nine month period
ended February 22, 2015. We expect to
incur approximately $15 million of
net expenses relating to this action of which approximately
$14 million will be cash. We expect
this action to be completed in fiscal 2016.
In addition to restructuring charges, we expect to incur
approximately $66 million of
additional project-related costs all of which will be cash and will
be recorded in cost of sales. We recorded $3
million in the third quarter of fiscal 2015 and $4 million in the nine-month period ended
February 22, 2015 for project-related
costs.
Restructuring charges and project-related costs are summarized
as follows:
|
|
In
Millions
|
Quarter
Ended Feb. 22,
2015
|
Nine-Month
Period
Ended Feb. 22,
2015
|
Estimated
Future
|
Estimated
Total
|
Estimated
Savings (a)
|
|
Charge
|
Cash
|
Charge
|
Cash
|
Charge
|
Cash
|
Charge
|
Cash
|
Total
Century
|
$ 69.9
|
$ 1.7
|
$ 158.8
|
$ 8.3
|
$ 136
|
$ 111
|
$ 295
|
$ 120
|
|
Catalyst
|
1.3
|
28.3
|
146.3
|
30.1
|
-
|
97
|
146
|
127
|
|
International
|
-
|
2.7
|
13.8
|
4.7
|
1
|
9
|
15
|
14
|
|
Other
|
-
|
-
|
(0.5)
|
0.1
|
-
|
-
|
-
|
-
|
|
Total restructuring
charges
|
71.2
|
32.7
|
318.4
|
43.2
|
137
|
217
|
456
|
261
|
|
Project-related
costs
|
2.8
|
2.8
|
3.5
|
3.5
|
62
|
62
|
66
|
66
|
|
Restructuring charges
and project-related costs
|
$ 74.0
|
$ 35.5
|
$ 321.9
|
$ 46.7
|
$ 199
|
$ 279
|
$ 522
|
$ 327
|
$ 350
|
(a) Cumulative
savings targeted by fiscal 2017. Includes savings from SG&A
cost reduction projects.
|
|
|
|
|
(6)
|
For the third quarter
of fiscal 2015, unallocated corporate expense totaled $112 million
compared to $19 million in the same period last year. We recorded a
$44 million net increase in expense related to the mark-to-market
valuations of certain commodity positions and grain inventories in
the third quarter of fiscal 2015, compared to a $23 million net
decrease in expense in the third quarter of fiscal 2014. In
addition, we recorded $22 million of restructuring charges and $3
million of restructuring initiative project-related costs in the
third quarter of fiscal 2015. We also recorded a $7 million foreign
exchange loss related to the remeasurement of assets and
liabilities of our Venezuelan subsidiary and $4 million of
integration costs resulting from the acquisition of Annie's in the
third quarter of fiscal 2015.
|
|
|
|
|
|
For the nine-month
period ended February 22, 2015, unallocated corporate expense
totaled $304 million compared to $142 million in the same period
last year. We recorded a $98 million net increase in expense
related to the mark-to-market valuations of certain commodity
positions and grain inventories in the nine-month period ended
February 22, 2015, compared to a $43 million net decrease in
expense in the nine-month period ended February 23, 2014. In
addition, we recorded $40 million of restructuring charges and $4
million of restructuring initiative project-related costs in the
nine-month period ended February 22, 2015. We also recorded $8
million of integration costs resulting from the acquisition of
Annie's and a $7 million foreign exchange loss related to the
remeasurement of assets and liabilities of our Venezuelan
subsidiary in the nine-month period ended February 22,
2015.
|
|
|
|
|
(7)
|
Basic and diluted
earnings per share (EPS) were calculated as follows:
|
|
|
|
|
|
Quarter
Ended
|
|
Nine-Month Period
Ended
|
In Millions,
Except per Share Data
|
|
|
Feb. 22,
2015
|
|
|
Feb. 23,
2014
|
|
|
Feb. 22,
2015
|
|
|
Feb. 23,
2014
|
Net earnings
attributable to General Mills
|
|
$
|
343.2
|
|
$
|
410.6
|
|
$
|
1,034.5
|
|
$
|
1,419.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
common shares - basic EPS
|
|
|
598.2
|
|
|
623.5
|
|
|
604.5
|
|
|
633.3
|
Incremental share
effect from: (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
options
|
|
|
11.1
|
|
|
11.9
|
|
|
11.5
|
|
|
12.3
|
Restricted
stock, restricted stock units, and other
|
|
|
4.5
|
|
|
4.8
|
|
|
4.3
|
|
|
4.6
|
Average number of
common shares - diluted EPS
|
|
|
613.8
|
|
|
640.2
|
|
|
620.3
|
|
|
650.2
|
Earnings per share -
basic
|
|
$
|
0.57
|
|
$
|
0.66
|
|
$
|
1.71
|
|
$
|
2.24
|
Earnings per share -
diluted
|
|
$
|
0.56
|
|
$
|
0.64
|
|
$
|
1.67
|
|
$
|
2.18
|
(a) Incremental shares from stock options and restricted
stock units are computed by the treasury stock
method.
|
|
|
|
|
(8)
|
The effective tax
rate for the nine-month period ended February 22, 2015, was 29.8
percent compared to 33.1 percent for the nine-month period ended
February 23, 2014. The 3.3 percentage point decrease was primarily
due to certain favorable discrete items and changes in earnings mix
by country.
|
|
|
|
|
(9)
|
We have included ten
measures in this release that are not defined by generally accepted
accounting principles (GAAP): (1) constant-currency net sales
growth rates, (2) diluted EPS excluding mark-to-market valuation of
certain commodity positions and grain inventories ("mark-to-market
effects"), restructuring charges ("restructuring charges"),
restructuring initiative project-related costs ("project-related
costs"), the impact of currency devaluation in Venezuela
("Venezuela currency devaluation"), and integration costs resulting
from the acquisition of Annie's ("acquisition integration costs")
(collectively, these 5 items are referred to as "certain items
affecting comparability" in this footnote), (3) diluted EPS
excluding certain items affecting comparability growth rate on a
constant-currency basis, (4) total segment operating profit, (5)
constant-currency total segment operating profit growth rates, (6)
constant-currency International segment operating profit growth
rates, (7) constant-currency after-tax earnings from joint
ventures, (8) earnings comparisons as a percent of net sales
excluding certain items affecting comparability, (9)
constant-currency net sales growth rates for our International
segment in total and by region, and (10) effective income tax rates
excluding certain items affecting comparability. We believe that
these measures provide useful supplemental information to assess
our operating performance. These measures are reconciled below to
the measures as reported in accordance with GAAP, and should be
viewed in addition to, and not in lieu of, our diluted EPS and
operating performance measures as calculated in accordance with
GAAP.
|
|
|
|
|
|
Certain measures in
this release are presented excluding the impact of foreign currency
exchange. 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.
|
|
|
|
|
|
Constant-currency net
sales growth rates follow:
|
|
|
|
|
|
|
Quarter Ended Feb.
22, 2015
|
|
|
|
Percentage
Change
in Net Sales as
Reported
|
Impact of
Foreign
Currency
Exchange
|
Percentage Change
in
Net Sales on Constant
Currency Basis
|
|
Total Net
Sales
|
|
(1)%
|
(4)pts
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine-Month Period
Ended Feb. 22, 2015
|
|
|
|
Percentage
Change
in Net Sales as
Reported
|
Impact of
Foreign
Currency
Exchange
|
Percentage Change
in
Net Sales on Constant
Currency Basis
|
|
Total Net
Sales
|
|
(2)%
|
(2)pts
|
Flat
|
|
Diluted EPS excluding
certain items affecting comparability and the related
constant-currency growth rates follow:
|
|
|
|
|
Quarter
Ended
|
|
Nine-Month
Period
Ended
|
|
Fiscal
Year
|
|
Per Share
Data
|
|
Feb. 22,
2015
|
|
|
Feb. 23,
2014
|
Change
|
|
|
|
Feb. 22,
2015
|
|
|
Feb. 23,
2014
|
|
Change
|
|
|
|
2014
|
|
Diluted earnings per
share, as reported
|
$
|
0.56
|
|
$
|
0.64
|
(12)
|
%
|
|
$
|
1.67
|
|
$
|
2.18
|
|
(23)
|
%
|
|
$
|
2.83
|
|
Mark-to-market
effects (a)
|
|
0.05
|
|
|
(0.02)
|
|
|
|
|
0.10
|
|
|
(0.04)
|
|
|
|
|
|
(0.05)
|
|
Restructuring
charges (b)
|
|
0.07
|
|
|
-
|
|
|
|
|
0.32
|
|
|
0.01
|
|
|
|
|
|
0.01
|
|
Project-related costs (b)
|
|
-
|
|
|
-
|
|
|
|
|
-
|
|
|
-
|
|
|
|
|
|
-
|
|
Venezuela
currency devaluation (c)
|
|
0.01
|
|
|
-
|
|
|
|
|
0.01
|
|
|
-
|
|
|
|
|
|
0.09
|
|
Acquisition
integration costs (d)
|
|
0.01
|
|
|
-
|
|
|
|
|
0.01
|
|
|
-
|
|
|
|
|
|
-
|
|
Divestiture
gain, net (e)
|
|
-
|
|
|
-
|
|
|
|
|
-
|
|
|
-
|
|
|
|
|
|
(0.06)
|
|
Diluted earnings per
share, excluding
certain
items affecting
comparability
|
$
|
0.70
|
|
$
|
0.62
|
13
|
%
|
|
$
|
2.11
|
|
$
|
2.15
|
|
(2)
|
%
|
|
$
|
2.82
|
|
Foreign currency
exchange impact
|
|
|
|
|
|
(2)
|
%
|
|
|
|
|
|
|
|
(2)
|
%
|
|
|
|
|
Diluted earnings per
share growth,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
excluding certain items affecting
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
comparability, on a constant currency
basis
|
|
|
|
|
|
15
|
%
|
|
|
|
|
|
|
|
Flat
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
See Note
6.
|
|
|
(b)
|
See Note
5.
|
|
|
(c)
|
See Note 3. The
impact of project-related costs is less than $.01 on diluted EPS
for the third quarter and the nine-month period ended February 22,
2015.
|
|
|
(d)
|
See Note
4.
|
|
|
(e)
|
During the fourth
quarter of fiscal 2014, we sold certain grain elevators in our U.S.
Retail segment.
|
|
A reconciliation of
total segment operating profit to the relevant GAAP measure,
operating profit, is included in the Statements of Operating
Segment Results.
|
|
|
|
Constant-currency
total segment operating profit growth rates follow:
|
|
|
|
|
|
Quarter Ended Feb.
22, 2015
|
|
|
|
Percentage Change
in Total
Segment Operating Profit as
Reported
|
Impact of
Foreign
Currency
Exchange
|
Percentage Change
in Total
Segment Operating Profit on
Constant Currency Basis
|
|
Total Segment
Operating Profit
|
|
1%
|
(2) pts
|
3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine-Month Period
Ended Feb. 22, 2015
|
|
|
|
Percentage Change
in Total
Segment Operating Profit as
Reported
|
Impact of
Foreign
Currency
Exchange
|
Percentage Change
in Total
Segment Operating Profit on
Constant Currency Basis
|
|
Total Segment
Operating Profit
|
|
(8)%
|
(2) pts
|
(6)%
|
|
Constant-currency
International segment operating profit growth rates
follow:
|
|
|
|
|
|
Quarter Ended Feb.
22, 2015
|
|
|
|
Percentage Change
in
Segment Operating Profit as
Reported
|
Impact of
Foreign
Currency
Exchange
|
Percentage Change
in Segment
Operating Profit on Constant
Currency Basis
|
|
International Segment
Operating Profit
|
|
(2)%
|
(12)
pts
|
10%
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine-Month Period
Ended Feb. 22, 2015
|
|
|
|
Percentage Change
in
Segment Operating Profit as
Reported
|
Impact of
Foreign
Currency
Exchange
|
Percentage Change
in Segment
Operating Profit on Constant
Currency Basis
|
|
International Segment
Operating Profit
|
|
Flat
|
(8)
pts
|
8%
|
|
Constant-currency
International net sales growth rates follow:
|
|
|
|
|
|
Quarter Ended Feb.
22, 2015
|
|
|
|
Percentage Change
in
Net Sales
as
Reported
|
Impact of
Foreign
Currency
Exchange
|
Percentage Change
in
Net Sales on Constant
Currency Basis
|
|
Europe
|
|
(8)
|
%
|
(11)
|
pts
|
3
|
%
|
|
Canada
|
|
(5)
|
|
(9)
|
|
4
|
|
|
Asia/Pacific
|
|
2
|
|
(2)
|
|
4
|
|
|
Latin
America
|
|
(14)
|
|
(34)
|
|
20
|
|
|
Total
International
|
|
(7)
|
%
|
(13)
|
pts
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine-Month Period
Ended Feb. 22, 2015
|
|
|
|
Percentage Change
in
Net Sales
as Reported
(a)
|
Impact of
Foreign
Currency
Exchange
|
Percentage Change
in
Net Sales on Constant
Currency Basis
|
|
Europe
|
|
Flat
|
|
(4)
|
pts
|
4
|
%
|
|
Canada
|
|
(8)
|
%
|
(6)
|
|
(2)
|
|
|
Asia/Pacific
|
|
2
|
|
(1)
|
|
3
|
|
|
Latin
America
|
|
(12)
|
|
(30)
|
|
18
|
|
|
Total
International
|
|
(3)
|
%
|
(8)
|
pts
|
5
|
%
|
|
Constant-currency
after-tax earnings from joint ventures follow:
|
|
|
|
|
|
Quarter Ended Feb.
22, 2015
|
|
|
|
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
|
|
Total Joint
Ventures
|
|
(43)%
|
(7)
pts
|
(36)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine-Month Period
Ended Feb. 22, 2015
|
|
|
|
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
|
|
Total Joint
Ventures
|
|
(9)%
|
(4)
pts
|
(5)%
|
|
Earnings comparisons
as a percent of net sales excluding certain items affecting
comparability follow:
|
|
|
|
|
Quarter
Ended
|
|
In
Millions
|
|
Feb. 22,
2015
|
|
|
Feb. 23,
2014
|
|
|
Comparisons as a %
of Net Sales
|
|
Value
|
|
Percent
of
Net
Sales
|
|
|
|
Value
|
|
Percent
of
Net
Sales
|
|
|
Gross margin as
reported (a)
|
$
|
1,375.9
|
|
31.6
|
%
|
|
$
|
1,512.7
|
|
34.6
|
%
|
|
Mark-to-market
effects (b)
|
|
43.7
|
|
1.0
|
%
|
|
|
(22.8)
|
|
(0.5)
|
%
|
|
Restructuring
charges (c)
|
|
21.9
|
|
0.5
|
%
|
|
|
-
|
|
-
|
%
|
|
Project-related costs (c)
|
|
2.8
|
|
0.1
|
%
|
|
|
-
|
|
-
|
%
|
|
Venezuela
currency devaluation (d)
|
|
2.9
|
|
-
|
%
|
|
|
-
|
|
-
|
%
|
|
Adjusted gross
margin
|
$
|
1,447.2
|
|
33.2
|
%
|
|
$
|
1,489.9
|
|
34.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit as
reported
|
$
|
537.2
|
|
12.3
|
%
|
|
$
|
670.6
|
|
15.3
|
%
|
|
Mark-to-market
effects (b)
|
|
43.7
|
|
1.0
|
%
|
|
|
(22.8)
|
|
(0.5)
|
%
|
|
Restructuring
charges (c)
|
|
71.2
|
|
1.6
|
%
|
|
|
-
|
|
-
|
%
|
|
Project-related costs (c)
|
|
2.8
|
|
0.1
|
%
|
|
|
-
|
|
-
|
%
|
|
Venezuela
currency devaluation (d)
|
|
7.2
|
|
0.2
|
%
|
|
|
-
|
|
-
|
%
|
|
Acquisition
integration costs (e)
|
|
4.1
|
|
0.1
|
%
|
|
|
-
|
|
-
|
%
|
|
Adjusted operating
profit
|
$
|
666.2
|
|
15.3
|
%
|
|
$
|
647.8
|
|
14.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to General Mills as reported
|
$
|
343.2
|
|
7.9
|
%
|
|
$
|
410.6
|
|
9.4
|
%
|
|
Mark-to-market
effects, net of tax (b)
|
|
27.5
|
|
0.6
|
%
|
|
|
(14.4)
|
|
(0.3)
|
%
|
|
Restructuring
charges, net of tax (c)
|
|
45.4
|
|
1.0
|
%
|
|
|
-
|
|
-
|
%
|
|
Project-related costs, net of tax (c)
|
|
1.8
|
|
-
|
%
|
|
|
-
|
|
-
|
%
|
|
Venezuela
currency devaluation, net of tax (d)
|
|
7.2
|
|
0.2
|
%
|
|
|
-
|
|
-
|
%
|
|
Acquisition
integration costs, net of tax (e)
|
|
2.5
|
|
0.1
|
%
|
|
|
-
|
|
-
|
%
|
|
Adjusted net earnings
attributable to General Mills
|
$
|
427.6
|
|
9.8
|
%
|
|
$
|
396.2
|
|
9.1
|
%
|
|
|
(a)
|
Net sales less cost
of sales.
|
|
|
(b)
|
See Note
6.
|
|
|
(c)
|
See Note
5.
|
|
|
(d)
|
See Note
3.
|
|
|
(e)
|
See Note
4.
|
|
|
Nine-Month Period
Ended
|
|
In
Millions
|
|
Feb. 22,
2015
|
|
|
Feb. 23,
2014
|
|
|
Comparisons as a %
of Net Sales
|
|
Value
|
|
Percent
of
Net
Sales
|
|
|
|
Value
|
|
Percent
of
Net
Sales
|
|
|
Gross margin as
reported (a)
|
$
|
4,433.7
|
|
33.3
|
%
|
|
$
|
4,887.4
|
|
35.9
|
%
|
|
Mark-to-market
effects (b)
|
|
98.0
|
|
0.7
|
%
|
|
|
(43.0)
|
|
(0.3)
|
%
|
|
Restructuring
charges (c)
|
|
40.5
|
|
0.3
|
%
|
|
|
-
|
|
-
|
%
|
|
Project-related costs (c)
|
|
3.5
|
|
-
|
%
|
|
|
-
|
|
-
|
%
|
|
Venezuela
currency devaluation (d)
|
|
2.9
|
|
-
|
%
|
|
|
-
|
|
-
|
%
|
|
Adjusted gross
margin
|
$
|
4,578.6
|
|
34.3
|
%
|
|
$
|
4,844.4
|
|
35.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit as
reported
|
$
|
1,653.7
|
|
12.4
|
%
|
|
$
|
2,275.5
|
|
16.7
|
%
|
|
Mark-to-market
effects (b)
|
|
98.0
|
|
0.7
|
%
|
|
|
(43.0)
|
|
(0.3)
|
%
|
|
Restructuring
charges (c)
|
|
318.4
|
|
2.4
|
%
|
|
|
3.5
|
|
-
|
%
|
|
Project-related costs (c)
|
|
3.5
|
|
-
|
%
|
|
|
-
|
|
-
|
%
|
|
Venezuela
currency devaluation (d)
|
|
7.2
|
|
0.1
|
%
|
|
|
-
|
|
-
|
%
|
|
Acquisition
integration costs (e)
|
|
7.6
|
|
0.1
|
%
|
|
|
-
|
|
-
|
%
|
|
Adjusted operating
profit
|
$
|
2,088.4
|
|
15.7
|
%
|
|
$
|
2,236.0
|
|
16.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to General Mills as reported
|
$
|
1,034.5
|
|
7.8
|
%
|
|
$
|
1,419.8
|
|
10.4
|
%
|
|
Mark-to-market
effects, net of tax (b)
|
|
61.7
|
|
0.5
|
%
|
|
|
(27.1)
|
|
(0.2)
|
%
|
|
Restructuring
charges, net of tax (c)
|
|
197.2
|
|
1.5
|
%
|
|
|
3.1
|
|
-
|
%
|
|
Project-related costs, net of tax (c)
|
|
2.2
|
|
-
|
%
|
|
|
-
|
|
-
|
%
|
|
Venezuela
currency devaluation, net of tax (d)
|
|
7.2
|
|
0.1
|
%
|
|
|
-
|
|
-
|
%
|
|
Acquisition
integration costs, net of tax (e)
|
|
5.2
|
|
-
|
%
|
|
|
-
|
|
-
|
%
|
|
Adjusted net earnings
attributable to General Mills
|
$
|
1,308.0
|
|
9.9
|
%
|
|
$
|
1,395.8
|
|
10.2
|
%
|
|
|
(a)
|
Net sales less cost
of sales.
|
|
|
(b)
|
See Note
6.
|
|
|
(c)
|
See Note
5.
|
|
|
(d)
|
See Note
3.
|
|
|
(e)
|
See Note
4.
|
|
A reconciliation of
the effective income tax rate as reported to the effective income
tax rate excluding certain items affecting comparability
follows:
|
|
|
|
|
Quarter
Ended
|
|
Nine-Month Period
Ended
|
|
|
Feb. 22,
2015
|
|
Feb. 23,
2014
|
|
Feb. 22,
2015
|
|
Feb. 23,
2014
|
|
In
Millions
|
Pretax
Earnings (a)
|
Income
Taxes
|
|
Pretax
Earnings (a)
|
Income
Taxes
|
|
Pretax
Earnings (a)
|
Income
Taxes
|
|
Pretax
Earnings (a)
|
Income
Taxes
|
|
As
reported
|
$ 457.2
|
$ 116.5
|
|
$ 595.1
|
$ 200.9
|
|
$ 1,417.9
|
$ 422.5
|
|
$ 2,052.5
|
$ 679.6
|
|
Mark-to-market effects (b)
|
43.7
|
16.2
|
|
(22.8)
|
(8.4)
|
|
98.0
|
36.3
|
|
(43.0)
|
(15.9)
|
|
Restructuring charges (c)
|
71.2
|
25.8
|
|
-
|
-
|
|
318.4
|
116.6
|
|
3.5
|
0.4
|
|
Project-related costs (c)
|
2.8
|
1.0
|
|
-
|
-
|
|
3.5
|
1.3
|
|
-
|
-
|
|
Venezuela currency devaluation (d)
|
7.2
|
-
|
|
-
|
-
|
|
7.2
|
-
|
|
-
|
-
|
|
Acquisition integration costs (e)
|
4.1
|
1.6
|
|
-
|
-
|
|
7.6
|
2.4
|
|
-
|
-
|
|
As
adjusted
|
$ 586.2
|
$ 161.1
|
|
$ 572.3
|
$ 192.5
|
|
$ 1,852.6
|
$ 579.1
|
|
$ 2,013.0
|
$ 664.1
|
|
Effective tax
rate:
|
|
|
|
|
|
|
|
|
|
|
|
|
As
reported
|
|
25.5%
|
|
|
33.8%
|
|
|
29.8%
|
|
|
33.1%
|
|
As
adjusted
|
|
27.5%
|
|
|
33.6%
|
|
|
31.3%
|
|
|
33.0%
|
|
|
(a)
|
Earnings before
income taxes and after-tax earnings from joint ventures.
|
|
|
(b)
|
See Note
6.
|
|
|
(c)
|
See Note
5.
|
|
|
(d)
|
See Note
3.
|
|
|
(e)
|
See Note
4.
|
Logo -
http://photos.prnewswire.com/prnh/20130218/MM61906LOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/general-mills-reports-fiscal-2015-third-quarter-results-300052301.html
SOURCE General Mills