Fourth Quarter
Highlights
- Net sales increased 21 percent to $5.0 billion and organic
net sales¹ were up 16 percent, primarily reflecting a significant
increase in at-home food demand driven by the COVID-19
pandemic.
- Operating profit of $830 million increased 16 percent;
constant-currency adjusted operating profit was up 24
percent.
- Diluted earnings per share (EPS) of $1.02 were up 9 percent;
adjusted diluted EPS of $1.10 increased 33 percent in constant
currency.
Full Year Highlights
- Net sales of $17.6 billion increased 5 percent from the
prior year; organic net sales were up 4 percent.
- Operating profit increased 17 percent to $3.0 billion;
constant-currency adjusted operating profit was up 7
percent.
- Diluted EPS of $3.56 were up 23 percent; adjusted diluted
EPS of $3.61 increased 12 percent in constant currency.
- Cash from operations totaled $3.7 billion, up 31 percent;
free cash flow of $3.2 billion increased 42 percent. The company
beat its fiscal 2020 deleverage target.
¹ Please see Note 7 to the Consolidated Financial Statements
below for reconciliation of this and other non-GAAP measures used
in this release.
General Mills (NYSE: GIS) today reported results for the fourth
quarter and fiscal year ended May 31, 2020. Fiscal 2020 was a
53-week year, with the extra week falling in the fourth
quarter.
“I’m proud of the way our organization has remained focused on
serving the needs of our consumers and communities while protecting
the health and safety of our employees throughout the COVID-19
pandemic,” said General Mills Chairman and Chief Executive Officer
Jeff Harmening. “Amid significant challenge and change in the world
around us, General Mills adapted and executed in fiscal 2020 to
deliver outstanding financial results while fulfilling our purpose
of making food the world loves. We’ve demonstrated extraordinary
agility to meet the unprecedented increase in demand for food at
home and to win across our categories.
“As we turn to fiscal 2021, we’ll maintain a sharp focus on the
near-term opportunity to meet continued elevated demand while
continuing to advance our long-term strategies by investing to
build our brands, strengthen our innovation, and enhance our
strategic capabilities. I remain confident that General Mills will
emerge from the pandemic a stronger company.”
Responding to COVID-19
The COVID-19 pandemic has had a profound impact on consumer
demand across the company’s major markets, including driving an
unprecedented increase in demand for food at home and a
corresponding decrease in away-from-home food demand resulting from
efforts to reduce virus transmission. The company estimates that
at-home food represented approximately 85 percent of its
pre-pandemic worldwide net sales and away-from-home food
represented the remaining 15 percent.
In the fourth quarter of fiscal 2020, elevated at-home food
demand accelerated net sales growth in the North America Retail
segment, where a significant share of net sales comes from
categories that were most impacted by at-home eating, including
meals, baking, and cereal. The impact of elevated at-home demand
was less pronounced in the Europe & Australia segment,
reflecting its lower proportion of net sales in those categories.
The Pet segment experienced increased demand early in the fourth
quarter from stock-up purchasing, which partially unwound by the
end of the quarter. Lower away-from-home food demand reduced growth
for the Convenience Stores & Foodservice and Asia & Latin
America segments.
During the global pandemic, General Mills’ most important
objectives remain the continued health and safety of its employees
and the ongoing ability to serve consumers around the world. The
company has implemented employee safety measures, based on guidance
from the CDC and WHO, across all its supply chain facilities,
including proper hygiene, social distancing, mask use, and
temperature screenings. To date, all General Mills manufacturing
and distribution facilities have continued to operate without
significant disruption related to COVID-19.
The company has risen to meet the needs of its communities
around the world during the pandemic, with a particular focus on
food security. During the fourth quarter, General Mills contributed
$10 million in monetary and food donations to organizations
addressing hunger and food access.
In response to changing consumer and customer needs, General
Mills has increased its agility and executed with excellence. The
company has partnered with its customers to prioritize production
of its most important products to increase capacity and maintain
strong service levels and has adapted content on its food websites
to encourage cooking education and drive stronger E-commerce sales.
Additionally, the company has taken actions to reinforce its
healthy liquidity position by refinancing short-term debt, and it
has maintained its strong capital discipline, which helped
contribute to a significant increase in free cash flow generation
in fiscal 2020.
General Mills is focused on delivering superior execution during
the COVID-19 situation while continuing to invest in its brands and
capabilities to ensure it emerges from the pandemic a stronger
company in a position to generate consistent, profitable growth and
top-tier returns for its shareholders.
Fourth Quarter Results
Summary
- Net sales of $5.0 billion increased 21 percent versus
last year, including 7 points of growth from an extra week of
results in this year’s fourth quarter and a 2-point headwind from
unfavorable foreign currency exchange. Organic net sales increased
16 percent, including double-digit growth in organic pound volume
and 3 points of favorable organic net price realization and mix.
Fourth-quarter net sales growth includes the impact of elevated
consumer demand driven by the COVID-19 pandemic.
- Gross margin increased 10 basis points to 35.2 percent
of net sales. Adjusted gross margin of 36.1 percent was up 80 basis
points, primarily driven by Holistic Margin Management (HMM) cost
savings and favorable manufacturing leverage, partially offset by
increased supply chain costs, including COVID-19-related
expenses.
- Operating profit increased 16 percent to $830
million. Operating profit margin of 16.5 percent was down 70
basis points. Adjusted operating profit of $888 million increased
24 percent in constant currency, primarily driven by higher net
sales, partially offset by higher selling, general, and
administrative (SG&A) expenses, including higher administrative
and media expenses. Adjusted operating profit margin increased 40
basis points to 17.7 percent.
- Net earnings attributable to General Mills totaled $626
million, up 10 percent from a year ago.
- Diluted EPS of $1.02 increased 9 percent. Adjusted
diluted EPS of $1.10 were up 33 percent from the prior year in
constant currency, primarily reflecting higher adjusted operating
profit, higher after-tax earnings from joint ventures, and a lower
adjusted effective tax rate, partially offset by higher average
diluted shares outstanding.
Full Year Results
Summary
- Net sales increased 5 percent to $17.6 billion,
including 2 points of growth from an extra week of results in this
year’s fourth quarter and a 1-point headwind from unfavorable
foreign currency exchange. Organic net sales increased 4 percent,
reflecting positive organic pound volume and favorable organic net
price realization and mix. The company estimates that changes in
consumer behavior resulting from COVID-19 increased full-year net
sales growth by approximately 3 percentage points.
- Gross margin increased 70 basis points to 34.8 percent
of net sales. Adjusted gross margin increased 80 basis points to
35.2 percent of net sales, driven primarily by HMM cost savings,
favorable net price realization and mix, and last year’s one-time
purchase accounting inventory adjustment related to the Blue
Buffalo acquisition, partially offset by input cost inflation and
increased supply chain costs related to COVID-19.
- Operating profit of $3.0 billion increased 17 percent
from the prior year. Operating profit margin of 16.8 percent
was up 190 basis points. Adjusted operating profit of $3.0 billion
increased 7 percent in constant currency, primarily driven by
higher net sales, partially offset by higher SG&A expenses,
including higher administrative and media expenses. Adjusted
operating profit margin increased 40 basis points to 17.3
percent.
- Net earnings attributable to General Mills totaled $2.2
billion, up 24 percent from the prior year.
- Diluted EPS of $3.56 increased 23 percent. Adjusted
diluted EPS of $3.61 was up 12 percent in constant currency,
primarily reflecting higher adjusted operating profit, lower net
interest expense, a lower adjusted effective tax rate, higher
non-service benefit plan income, and higher after-tax earnings from
joint ventures, partially offset by higher average diluted shares
outstanding.
Operating Segment
Results
Note: Tables may not foot due to rounding.
Components of Fiscal 2020
Reported Net Sales Growth
Fourth Quarter
Volume
Price/Mix
Foreign Exchange
Reported Net Sales
North America Retail
44 pts
(7) pts
--
36%
Pet
44 pts
(7) pts
--
37%
Convenience Stores & Foodservice
(16) pts
(9) pts
--
(24)%
Europe & Australia
11 pts
--
(4) pts
6%
Asia & Latin America
8 pts
(9) pts
(11) pts
(12)%
Total
19 pts
3 pts
(2) pts
21%
Full Year
North America Retail
10 pts
(1) pt
--
8%
Pet
17 pts
2 pts
--
18%
Convenience Stores & Foodservice
(6) pts
(2) pts
--
(8)%
Europe & Australia
--
1 pt
(3) pts
(3)%
Asia & Latin America
(2) pts
(1) pt
(4) pts
(8)%
Total
4 pts
2 pts
(1) pt
5%
Components of Fiscal 2020
Organic Net Sales Growth
Fourth Quarter
Organic Volume
Organic Price/Mix
Organic Net Sales
Foreign Exchange
Acquisitions &
Divestitures
53rd Week
Reported Net Sales
North America Retail
35 pts
(7) pts
28%
--
--
9 pts
36%
Pet
44 pts
(7) pts
37%
--
--
--
37%
Convenience Stores & Foodservice
(21) pts
(8) pts
(29)%
--
--
4 pts
(24)%
Europe & Australia
4 pts
--
4%
(4) pts
--
7 pts
6%
Asia & Latin America
1 pt
(9) pts
(7)%
(11) pts
--
7 pts
(12)%
Total
12 pts
3 pts
16%
(2) pts
--
7 pts
21%
Full Year
North America Retail
8 pts
(1) pt
6%
--
--
2 pts
8%
Pet
17 pts
2 pts
18%
--
--
--
18%
Convenience Stores & Foodservice
(7) pts
(2) pts
(9)%
--
--
1 pt
(8)%
Europe & Australia
(2) pts
1 pt
(1)%
(3) pts
--
2 pts
(3)%
Asia & Latin America
(1) pt
(1) pt
(2)%
(4) pts
(3) pts
2 pts
(8)%
Total
2 pts
2 pts
4%
(1) pt
--
2 pts
5%
Fiscal 2020 Segment Operating
Profit Growth
Fourth Quarter
% Change as Reported
% Change in Constant
Currency
North America Retail
69%
69%
Pet
23%
23%
Convenience Stores & Foodservice
(67)%
(67)%
Europe & Australia
(22)%
(14)%
Asia & Latin America
NM
NM
Total
31%
32%
Full Year
North America Retail
15%
15%
Pet
46%
46%
Convenience Stores & Foodservice
(20)%
(20)%
Europe & Australia
(8)%
(3)%
Asia & Latin America
(74)%
(73)%
Total
10%
11%
North America Retail Segment
Fourth-quarter net sales for General Mills’ North America Retail
segment increased 36 percent to $3.20 billion, primarily reflecting
increased demand for food at home resulting from the COVID-19
pandemic as well as 9 points of additional sales from the 53rd
week. Organic net sales increased 28 percent, reflecting a strong
increase in organic pound volume. Organic net price realization and
mix was unfavorable in the quarter, driven by the mix of sales,
including significant growth for heavier products such as
refrigerated baked goods, dessert mixes, soup, and flour. Net sales
increased across all five operating units, including 75 percent
growth in U.S. Meals & Baking, 26 percent growth in U.S.
Cereal, 12 percent growth in Canada, 10 percent growth in U.S.
Snacks, and 10 percent growth in U.S. Yogurt. The segment’s leading
brands and superior execution led to excellent in-market
performance, including market share gains in 9 of its 10 largest
U.S. categories in the fourth quarter. Segment operating profit
increased 69 percent to $893 million, primarily driven by higher
volume, partially offset by higher SG&A expenses, including
higher media investment.
For the full year, North America Retail segment net sales
increased 8 percent to $10.75 billion, primarily driven by
increased at-home food demand and 2 points of additional sales from
the 53rd week. Organic net sales increased 6 percent. Segment
operating profit increased 15 percent to $2.63 billion, primarily
driven by higher volume, partially offset by higher SG&A
expenses, including higher media investment.
Pet Segment
Fourth-quarter net sales for the Pet segment increased 37
percent to $555 million, largely due to an extra month of results
as the segment’s calendar was aligned to the company’s May fiscal
year end. A significant increase in pound volume was partially
offset by unfavorable net price realization and mix, which
reflected the comparison against the year-ago period that included
significant net sales growth for the premium-priced Wilderness
sub-line as it was expanded to national distribution in the food,
drug, and mass channels. Segment operating profit increased 23
percent to $135 million, primarily driven by higher volume,
partially offset by unfavorable net price realization and mix and
higher SG&A expenses.
For the full year, Pet segment net sales increased 18 percent to
$1.69 billion, driven by positive contributions from volume growth
and positive net price realization and mix. All-channel retail
sales increased double digits for the full year. Segment operating
profit of $391 million was up 46 percent, primarily driven by
higher net sales and a $53 million one-time purchase accounting
inventory adjustment in the year-ago period, partially offset by
higher SG&A expenses.
Convenience Stores & Foodservice
Segment
Fourth-quarter net sales for the Convenience Stores &
Foodservice segment declined 24 percent to $393 million, reflecting
significantly reduced away-from-home food demand related to the
COVID-19 pandemic, partially offset by 4 points of additional sales
from the 53rd week. Organic net sales declined 29 percent. Segment
operating profit of $39 million was down 67 percent, driven by
lower net sales.
For the full year, Convenience Stores & Foodservice net
sales decreased 8 percent to $1.82 billion, primarily reflecting
reduced away-from-home food demand, partially offset by 1 point of
additional sales from the 53rd week. Organic net sales declined 9
percent. Segment operating profit of $337 million was down 20
percent, primarily driven by lower net sales.
Europe & Australia Segment
Fourth-quarter net sales for the Europe & Australia segment
increased 6 percent to $530 million, primarily driven by increased
demand for food at home resulting from the COVID-19 pandemic and 7
points of additional sales from the 53rd week, partially offset by
4 points of unfavorable foreign currency exchange. Organic net
sales increased 4 percent. Net sales growth in Old El Paso Mexican
food and Betty Crocker dessert mixes were partially offset by
declines in away-from-home channels. Segment operating profit of
$33 million was down 22 percent as reported and down 14 percent in
constant currency, primarily driven by higher SG&A expenses,
partially offset by higher net sales.
For the full year, Europe & Australia net sales decreased 3
percent to $1.84 billion, including 3 points of unfavorable foreign
currency exchange and 2 points of additional sales from the 53rd
week. Organic net sales decreased 1 percent. Net sales declines in
yogurt and ice cream were partially offset by growth in Mexican
food and dessert mixes. Segment operating profit of $114 million
was down 8 percent as reported and down 3 percent in constant
currency, reflecting higher input costs and lower volume, partially
offset by favorable net price realization and mix.
Asia & Latin America
Segment
Fourth-quarter net sales for the Asia & Latin America
segment declined 12 percent to $349 million, primarily driven by
reduced away-from-home food demand related to the COVID-19 pandemic
impacting consumer traffic in foodservice outlets and Häagen-Dazs
shops and 11 points of unfavorable foreign currency exchange,
partially offset by 7 points of additional sales from the 53rd week
and strong growth for Wanchai Ferry frozen dumplings in China and
Yoki meals and snacks in Brazil. Organic net sales were down 7
percent, with declines in Asia partially offset by growth in Latin
America. Segment operating profit declined $47 million to a loss of
$24 million in the quarter, driven by net sales declines on the
segment’s higher-margin businesses, as well as higher SG&A
expenses.
For the full year, Asia & Latin America net sales declined 8
percent to $1.53 billion, including 4 points of unfavorable foreign
currency exchange, a 3-point headwind from divestitures executed in
fiscal 2019, and 2 points of additional sales from the 53rd week.
Organic net sales were down 2 percent, with declines in Asia
partially offset by growth in Latin America. Segment operating
profit of $19 million was down 74 percent as reported and down 73
percent in constant currency, driven by higher input costs and
lower net sales.
Joint Venture Summary
Fourth-quarter net sales for Cereal Partners Worldwide (CPW)
increased 13 percent in constant currency, reflecting increased
at-home food demand due to the COVID-19 pandemic. Constant-currency
net sales for Häagen-Dazs Japan (HDJ) were down 13 percent in the
quarter, driven by lower volume. Combined after-tax earnings from
joint ventures in the quarter increased 68 percent to $34 million.
For the full year, after-tax earnings from joint ventures increased
27 percent to $91 million, primarily driven by net sales growth and
General Mills’ share of lower restructuring charges at CPW.
Other Income Statement
Items
Full-year unallocated corporate items totaled $509 million net
expense in fiscal 2020 compared to $340 million net expense a year
ago. Excluding mark-to-market valuation effects and other items
affecting comparability, unallocated corporate items totaled $429
million net expense this year compared to $303 million net expense
last year, primarily driven by compensation and benefits
expenses.
The company recorded $30 million, net, in pre-tax losses on
divestitures in fiscal 2019 (please see Note 2 below for more
information on these charges). Restructuring, impairment, and other
exit costs totaled $24 million this year compared to $275 million a
year ago. An additional $27 million of restructuring and
project-related charges were recorded in cost of sales this year
compared to $11 million a year ago (please see Note 3 below for
more information on these charges).
Net interest expense in fiscal 2020 totaled $466 million
compared to $522 million a year ago, primarily driven by lower
average debt balances. The effective tax rate for fiscal 2020 was
18.5 percent compared to 17.7 percent last year (please see Note 6
below for more information on our effective tax rate). The adjusted
effective tax rate was 20.7 percent compared to 21.8 percent a year
ago, primarily driven by the mix of earnings by market.
Cash Flow
Generation, Cash Returns, and Deleverage
Fiscal 2020 cash provided by
operating activities totaled $3.68 billion, up 31 percent from the
prior year, primarily driven by changes in current assets and
liabilities and higher net earnings, partially offset by changes in
non-cash restructuring, impairment, and other exit costs and
deferred income taxes. The increase in operating cash flow included
both structural improvements and timing benefits from
COVID-19-driven volume increases in the fourth quarter. Capital
investments totaled $461 million compared to $538 million a year
ago. Full-year free cash flow conversion was 143 percent of
adjusted after-tax earnings. Dividends paid totaled $1.20 billion,
average diluted shares outstanding increased 1 percent to 613
million, and debt was reduced by $950 million. The net
debt-to-operating cash flow ratio was 3.2x compared to 5.0x a year
ago, and the net-debt-to-adjusted-EBITDA ratio was 3.2x compared to
3.9x in fiscal 2019.
Fiscal 2021
Outlook and Priorities
General Mills expects the largest
factor impacting its fiscal 2021 performance will be relative
balance of at-home versus away-from-home consumer food demand. This
balance will be determined by factors such as consumers’ ability
and willingness to eat in restaurants, the proportion of people
working from home, the reopening of schools, and changes in
consumers’ income levels. While the COVID-19 pandemic has
significantly influenced each of these factors in recent months,
the magnitude and duration of its future impact remains highly
uncertain. As a result, the company is not currently providing an
outlook for fiscal 2021 growth in organic net sales, adjusted
operating profit, and adjusted diluted EPS.
The company expects consumer concerns about COVID-19 virus
transmission and the recession to drive elevated demand for food at
home, relative to pre-pandemic levels. The company is tracking the
level of virus control, the possibility of a second-wave outbreak,
the availability of a vaccine, GDP growth, unemployment rates,
consumer confidence, and wage growth, among other factors, to
assess the likely magnitude and duration of elevated at-home food
demand.
General Mills has outlined three key priorities for fiscal 2021
that will allow it to deliver competitive performance in the short
term while continuing to advance its long-term goals:
- Compete effectively, everywhere we play, leading to
increased brand penetration, competitive service levels,
strengthened customer partnerships, and market share gains in the
company’s key categories. General Mills expects net sales growth in
fiscal 2021 will be positively impacted by its superior execution
as well as elevated at-home food demand, relative to the
pre-pandemic period. The company anticipates headwinds to fiscal
2021 net sales growth from comparisons against the 53rd week, the
extra month of Pet results, and the pandemic-related increase in
demand in the fourth quarter of fiscal 2020. Additionally, fiscal
2021 net sales growth may be negatively impacted by a potential
reduction in consumers’ at-home food inventory, which has been
elevated during the pandemic.
- Drive efficiency to fuel investment. The company
anticipates that the combination of benefits from its HMM
initiatives and volume leverage and headwinds from input cost
inflation, increased investment in brands and capabilities, higher
costs to service elevated demand, and higher ongoing health and
safety-related expenses will result in an adjusted operating profit
margin that is approximately in line with fiscal 2020 levels.
- Reduce leverage to increase financial flexibility. The
company expects to make further progress in fiscal 2021 in reducing
its net-debt-to-adjusted-EBITDA ratio, which stood at 3.2x at the
end of fiscal 2020.
General Mills will issue pre-recorded management remarks today,
July 1, 2020, at approximately 6:20 a.m. Central time (7:20 a.m.
Eastern time) and will hold a live, webcasted question and answer
session beginning at 8:00 a.m. Central time (9:00 a.m. Eastern
time). The pre-recorded remarks and the webcast will be made
available at www.generalmills.com/investors.
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 “Fiscal 2021 Outlook and Priorities,” and statements made
by Mr. Harmening, 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: the impact of
the coronavirus (COVID-19) pandemic on our business, suppliers,
consumers, customers, and employees; disruptions or inefficiencies
in the supply chain, including any impact of the coronavirus
(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 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;
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. 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
(In Millions, Except per Share
Data)
Fiscal Year
2020
% Change
2019
% Change
2018
(Unaudited)
Net sales
$
17,626.6
5 %
$
16,865.2
7 %
$
15,740.4
Cost of sales
11,496.7
3 %
11,108.4
8 %
10,304.8
Selling, general, and administrative
expenses
3,151.6
7 %
2,935.8
3 %
2,850.1
Divestitures loss
-
NM
30.0
NM
-
Restructuring, impairment, and other exit
costs
24.4
(91%)
275.1
66 %
165.6
Operating profit
2,953.9
17 %
2,515.9
4 %
2,419.9
Benefit plan non-service income
(112.8)
28 %
(87.9)
(2%)
(89.4)
Interest, net
466.5
(11%)
521.8
40 %
373.7
Earnings before income taxes and after-tax
earnings from joint ventures
2,600.2
25 %
2,082.0
(3%)
2,135.6
Income taxes
480.5
31 %
367.8
NM
57.3
After-tax earnings from joint ventures
91.1
27 %
72.0
(15%)
84.7
Net earnings, including earnings
attributable to redeemable and noncontrolling interests
2,210.8
24 %
1,786.2
(17%)
2,163.0
Net earnings attributable to redeemable
and noncontrolling interests
29.6
(12%)
33.5
5 %
32.0
Net earnings attributable to General
Mills
$
2,181.2
24 %
$
1,752.7
(18%)
$
2,131.0
Earnings per share - basic
$
3.59
23 %
$
2.92
(21%)
$
3.69
Earnings per share - diluted
$
3.56
23 %
$
2.90
(20%)
$
3.64
Dividends per share
$
1.96
-
$
1.96
-
$
1.96
Fiscal Year
Comparisons as a % of net sales:
2020
Basis Pt Change
2019
Basis Pt Change
2018
Gross margin
34.8 %
70
34.1 %
(40)
34.5 %
Selling, general, and administrative
expenses
17.9 %
50
17.4 %
(70)
18.1 %
Operating profit
16.8 %
190
14.9 %
(50)
15.4 %
Net earnings attributable to General
Mills
12.4 %
200
10.4 %
(310)
13.5 %
Fiscal Year
Adjusted comparisons as a % of net sales
(a):
2020
Basis Pt Change
2019
Basis Pt Change
2018
Adjusted gross margin
35.2 %
80
34.4 %
(10)
34.5 %
Adjusted operating profit
17.3 %
40
16.9 %
30
16.6 %
Adjusted net earnings attributable to
General Mills
12.6 %
100
11.6 %
-
11.6 %
(a) See Note 7 for a reconciliation of
these measures not defined by generally accepted accounting
principles (GAAP).
See accompanying notes to the consolidated
financial statements.
Consolidated Statements of
Earnings and Supplementary Information
GENERAL MILLS, INC. AND
SUBSIDIARIES
(Unaudited) (In Millions, Except
per Share Data)
Quarter Ended
May 31, 2020
May 26, 2019
% Change
Net sales
$
5,023.0
$
4,161.7
21 %
Cost of sales
3,254.9
2,700.4
21 %
Selling, general, and administrative
expenses
927.1
743.2
25 %
Divestiture gain
-
(5.4)
NM
Restructuring, impairment, and other exit
costs
11.5
7.4
55 %
Operating profit
829.5
716.1
16 %
Benefit plan non-service income
(22.1)
(24.6)
(10%)
Interest, net
118.6
124.8
(5%)
Earnings before income taxes and after-tax
earnings from joint ventures
733.0
615.9
19 %
Income taxes
139.6
54.7
155 %
After-tax earnings from joint ventures
33.6
20.0
68 %
Net earnings, including earnings
attributable to redeemable and noncontrolling interests
627.0
581.2
8 %
Net earnings attributable to redeemable
and noncontrolling interests
1.3
11.0
(88%)
Net earnings attributable to General
Mills
$
625.7
$
570.2
10 %
Earnings per share - basic
$
1.03
$
0.95
8 %
Earnings per share - diluted
$
1.02
$
0.94
9 %
Quarter Ended
Comparisons as a % of net sales:
May 31, 2020
May 26, 2019
Basis Pt Change
Gross margin
35.2 %
35.1 %
10
Selling, general, and administrative
expenses
18.5 %
17.9 %
60
Operating profit
16.5 %
17.2 %
(70)
Net earnings attributable to General
Mills
12.5 %
13.7 %
(120)
Quarter Ended
Adjusted comparisons as a % of net sales
(a):
May 31, 2020
May 26, 2019
Basis Pt Change
Adjusted gross margin
36.1 %
35.3 %
80
Adjusted operating profit
17.7 %
17.3 %
40
Adjusted net earnings attributable to
General Mills
13.4 %
12.2 %
120
(a) See Note 7 for a reconciliation of
these measures not defined by GAAP.
See accompanying notes to the consolidated
financial statements.
Operating Segment Results and
Supplementary Information
GENERAL MILLS, INC. AND
SUBSIDIARIES
(In Millions)
Fiscal Year
2020
% Change
2019
% Change
2018
(Unaudited)
Net sales:
North America Retail
$
10,750.5
8 %
$
9,925.2
(2%)
$
10,115.4
Europe & Australia
1,838.9
(3%)
1,886.7
(5%)
1,984.6
Convenience Stores & Foodservice
1,816.4
(8%)
1,969.1
2 %
1,930.2
Pet
1,694.6
18 %
1,430.9
NM
-
Asia & Latin America
1,526.2
(8%)
1,653.3
(3%)
1,710.2
Total
$
17,626.6
5 %
$
16,865.2
7 %
$
15,740.4
Operating profit:
North America Retail
$
2,627.0
15 %
$
2,277.2
3 %
$
2,217.4
Europe & Australia
113.8
(8%)
123.3
(13%)
142.1
Convenience Stores & Foodservice
337.2
(20%)
419.5
7 %
392.6
Pet
390.7
46 %
268.4
NM
-
Asia & Latin America
18.7
(74%)
72.4
83 %
39.6
Total segment operating profit
3,487.4
10 %
3,160.8
13 %
2,791.7
Unallocated corporate items
509.1
50 %
339.8
65 %
206.2
Divestitures loss
-
NM
30.0
NM
-
Restructuring, impairment, and other exit
costs
24.4
(91%)
275.1
66 %
165.6
Operating profit
$
2,953.9
17 %
$
2,515.9
4 %
$
2,419.9
Fiscal 2020 includes 13 months of Pet operating segment results
as we changed the Pet operating segment’s reporting period from an
April fiscal year-end to a May fiscal year-end to match our fiscal
calendar. Fiscal 2019 included 12 months of results while fiscal
2018 did not include Pet operating segment results.
See accompanying notes to the consolidated financial
statements.
Operating Segment Results and
Supplementary Information
GENERAL MILLS, INC. AND
SUBSIDIARIES
(Unaudited) (In Millions)
Quarter Ended
May 31, 2020
May 26, 2019
% Change
Net sales:
North America Retail
$
3,196.4
$
2,341.7
36 %
Europe & Australia
530.0
499.5
6 %
Convenience Stores & Foodservice
393.1
519.0
(24%)
Pet
554.6
405.6
37 %
Asia & Latin America
348.9
395.9
(12%)
Total
$
5,023.0
$
4,161.7
21 %
Operating profit:
North America Retail
$
892.6
$
527.7
69 %
Europe & Australia
32.7
41.9
(22%)
Convenience Stores & Foodservice
38.8
116.1
(67%)
Pet
135.0
110.1
23 %
Asia & Latin America
(23.9)
22.8
NM
Total segment operating profit
1,075.2
818.6
31 %
Unallocated corporate items
234.2
100.5
133 %
Divestiture gain
-
(5.4)
NM
Restructuring, impairment, and other exit
costs
11.5
7.4
55 %
Operating profit
$
829.5
$
716.1
16 %
The fourth quarter of fiscal 2020 includes 4 months of Pet
operating segment results as we changed the Pet operating segment’s
reporting period from an April fiscal year-end to a May fiscal
year-end to match our fiscal calendar. The fourth quarter of fiscal
2019 included 3 months of results.
See accompanying notes to the consolidated financial
statements.
Consolidated Balance
Sheets
GENERAL MILLS, INC. AND
SUBSIDIARIES
(In Millions, Except Par
Value)
May 31, 2020
May 26, 2019
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
1,677.8
$
450.0
Receivables
1,615.1
1,679.7
Inventories
1,426.3
1,559.3
Prepaid expenses and other current
assets
402.1
497.5
Total current assets
5,121.3
4,186.5
Land, buildings, and equipment
3,580.6
3,787.2
Goodwill
13,923.2
13,995.8
Other intangible assets
7,095.8
7,166.8
Other assets
1,085.8
974.9
Total assets
$
30,806.7
$
30,111.2
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
3,247.7
$
2,854.1
Current portion of long-term debt
2,331.5
1,396.5
Notes payable
279.0
1,468.7
Other current liabilities
1,633.3
1,367.8
Total current liabilities
7,491.5
7,087.1
Long-term debt
10,929.0
11,624.8
Deferred income taxes
1,947.1
2,031.0
Other liabilities
1,545.0
1,448.9
Total liabilities
21,912.6
22,191.8
Redeemable interest
544.6
551.7
Stockholders' equity:
Common stock, 754.6 shares issued, $0.10
par value
75.5
75.5
Additional paid-in capital
1,348.6
1,386.7
Retained earnings
15,982.1
14,996.7
Common stock in treasury, at cost, shares
of 144.8 and 152.7
(6,433.3)
(6,779.0)
Accumulated other comprehensive loss
(2,914.4)
(2,625.4)
Total stockholders' equity
8,058.5
7,054.5
Noncontrolling interests
291.0
313.2
Total equity
8,349.5
7,367.7
Total liabilities and equity
$
30,806.7
$
30,111.2
See accompanying notes to consolidated
financial statements.
Consolidated Statements of
Cash Flows
GENERAL MILLS, INC. AND
SUBSIDIARIES
(In Millions)
Fiscal Year
2020
2019
(Unaudited)
Cash Flows - Operating Activities
Net earnings, including earnings
attributable to redeemable and noncontrolling interests
$
2,210.8
$
1,786.2
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization
594.7
620.1
After-tax earnings from joint ventures
(91.1)
(72.0)
Distributions of earnings from joint
ventures
76.5
86.7
Stock-based compensation
94.9
84.9
Deferred income taxes
(29.6)
93.5
Pension and other postretirement benefit
plan contributions
(31.1)
(28.8)
Pension and other postretirement benefit
plan costs
(32.3)
6.1
Divestitures loss
-
30.0
Restructuring, impairment, and other exit
costs
43.6
235.7
Changes in current assets and liabilities,
excluding the effects of divestitures
793.9
(7.5)
Other, net
45.9
(27.9)
Net cash provided by operating
activities
3,676.2
2,807.0
Cash Flows - Investing Activities
Purchases of land, buildings, and
equipment
(460.8)
(537.6)
Investments in affiliates, net
(48.0)
0.1
Proceeds from disposal of land, buildings,
and equipment
1.7
14.3
Proceeds from divestitures
-
26.4
Other, net
20.9
(59.7)
Net cash used by investing activities
(486.2)
(556.5)
Cash Flows - Financing Activities
Change in notes payable
(1,158.6)
(66.3)
Issuance of long-term debt
1,638.1
339.1
Payment of long-term debt
(1,396.7)
(1,493.8)
Proceeds from common stock issued on
exercised options
263.4
241.4
Purchases of common stock for treasury
(3.4)
(1.1)
Dividends paid
(1,195.8)
(1,181.7)
Investments in redeemable interest
-
55.7
Distributions to noncontrolling and
redeemable interest holders
(72.5)
(38.5)
Other, net
(16.0)
(31.2)
Net cash used by financing activities
(1,941.5)
(2,176.4)
Effect of exchange rate changes on cash
and cash equivalents
(20.7)
(23.1)
Increase in cash and cash equivalents
1,227.8
51.0
Cash and cash equivalents - beginning of
year
450.0
399.0
Cash and cash equivalents - end of
year
$
1,677.8
$
450.0
Cash flow from changes in current assets
and liabilities, excluding the effects of divestitures:
Receivables
$
37.9
$
(42.7)
Inventories
103.1
53.7
Prepaid expenses and other current
assets
94.2
(114.3)
Accounts payable
392.5
162.4
Other current liabilities
166.2
(66.6)
Changes in current assets and
liabilities
$
793.9
$
(7.5)
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.
Our fiscal year ends on the last
Sunday in May. Fiscal year 2020 consists of 53 weeks, while fiscal
years 2019 and 2018 consisted of 52 weeks.
As part of a long-term plan to
conform the fiscal year ends of all our operations, in fiscal 2020
we changed the reporting period of our Pet segment from an April
fiscal year-end to a May fiscal year-end to match our fiscal
calendar. Accordingly, our fiscal 2020 results include 13 months of
Pet segment results compared to 12 months in fiscal 2019. The
impact of this change was not material to our consolidated results
of operations and, therefore, we did not restate prior period
financial statements for comparability. Our India business is on an
April fiscal year end.
The disclosed impacts
attributable to the COVID-19 pandemic on net sales and organic net
sales were calculated based upon net sales in excess of our
expectations prior to the net increase in demand resulting from the
COVID-19 pandemic. The impacts disclosed are approximate and
reflect our best estimate of the impact of the COVID-19
pandemic.
In the first quarter of fiscal
2020, we adopted new accounting requirements for hedge accounting.
The new standard amends the hedge accounting recognition and
presentation requirements to better align an entity’s risk
management activities and financial reporting. The new standard
also simplifies the application of hedge accounting guidance. The
adoption did not have a material impact on our results of
operations or financial position.
In the first quarter of fiscal
2020, we adopted new requirements for the accounting, presentation
and classification of leases. This results in certain leases being
capitalized as a right of use asset with a related liability on our
Consolidated Balance Sheets. We performed a comprehensive review of
our lease portfolio, implemented lease accounting software, and
developed a centralized business process with corresponding
controls. We adopted this guidance utilizing the cumulative effect
adjustment approach, which required application of the guidance at
the adoption date and elected certain practical expedients
permitted under the transition guidance, including not reassessing
whether existing contracts contain leases and carrying forward the
historical classification of those leases. In addition, we elected
not to recognize leases with an initial term of 12 months or less
on our Consolidated Balance Sheet and to continue our historical
treatment of land easements, under permitted elections. This
guidance did not have a material impact on retained earnings, our
Consolidated Statements of Earnings, or our Consolidated Statement
of Cash Flows. As of May 31, 2020, we reported right of use assets
net of accumulated amortization in other assets of $365 million,
current lease liabilities in other current liabilities of $102
million, and non-current lease liabilities in other liabilities of
$277 million on our Consolidated Balance Sheet.
(2)
During the third quarter of
fiscal 2019, we sold our La Salteña fresh pasta and refrigerated
dough business in Argentina, and recorded a pre-tax loss of $35
million. During the fourth quarter of fiscal 2019, we sold our
yogurt business in China to a new Yoplait franchisee, and recorded
a pre-tax gain of $5 million.
(3)
Restructuring and impairment
charges and project-related costs are recorded in our Consolidated
Statements of Earnings as follows:
Quarter Ended
Fiscal Year
In Millions
May 31, 2020
May 26, 2019
2020
2019
2018
Cost of sales
$
1.5
$
9.6
$
25.8
$
9.9
$
14.0
Restructuring, impairment, and other exit
costs
11.5
7.4
24.4
275.1
165.6
Total restructuring and impairment
charges
13.0
17.0
50.2
285.0
179.6
Project-related costs classified in cost
of sales
$
0.4
$
-
$
1.5
$
1.3
$
11.3
In fiscal 2020, we did not
undertake any new restructuring actions. We recorded $50 million of
restructuring charges for previously announced restructuring
actions. We expect these actions to be completed by the end of
fiscal 2022.
In fiscal 2019, we approved
restructuring actions to drive efficiencies in targeted areas of
our global supply chain. In connection with these actions, we
recorded $80 million of restructuring charges, consisting of $23
million of severance expense and $57 million of other costs,
primarily asset write-offs.
In addition, in fiscal 2019, we
recorded $193 million of charges related to the impairment of
Progresso, Food Should Taste Good, and Mountain High brand
intangible assets in restructuring, impairment, and other exit
costs. We also recorded a $15 million charge related to the
impairment of certain manufacturing assets in our North America
Retail and Asia & Latin America segments.
(4)
In the fourth quarter of fiscal
2020, unallocated corporate expense increased $134 million to $234
million compared to $100 million last year, primarily driven by
compensation and benefits expenses. We recorded a $24 million net
increase in expense related to mark-to-market valuations of certain
commodity positions and grain inventories in the fourth quarter of
fiscal 2020, compared to an immaterial amount in the fourth quarter
of fiscal 2019. We also recorded a $19 million charge related to a
product recall in our international Green Giant business in the
fourth quarter of fiscal 2020. In addition, we recorded $2 million
of restructuring charges in cost of sales in the fourth quarter of
fiscal 2020 compared to $10 million of restructuring charges in the
fourth quarter of fiscal 2019. In the fourth quarter of fiscal
2020, we recorded $2 million of net losses related to certain
investment valuation adjustments compared to a $10 million gain
recorded in the fourth quarter of fiscal 2019. In addition, we
recorded $4 million of acquisition integration costs related to our
acquisition of Blue Buffalo Products, Inc. (Blue Buffalo) in the
fourth quarter of fiscal 2019.
In fiscal 2020, unallocated
corporate expense increased $169 million to $509 million compared
to $340 million last year, primarily driven by compensation and
benefits expenses. In fiscal 2020, we recorded a $25 million net
increase in expense related to mark-to-market valuation of certain
commodity positions and grain inventories compared to a $36 million
net increase in expense in the prior year. In addition, we recorded
$26 million of restructuring charges, and $2 million of
restructuring initiative project-related costs in cost of sales in
fiscal 2020, compared to $10 million of restructuring charges and
$1 million of restructuring initiative project-related costs in
cost of sales in fiscal 2019. We also recorded a $19 million charge
related to a product recall in our international Green Giant
business in fiscal 2020. In fiscal 2020, we recorded $8 million of
net losses related to certain investment valuation adjustments and
the loss on sale of certain corporate investments compared to $23
million of gains in fiscal 2019. In fiscal 2019, we recorded a $16
million gain from a legal recovery related to our Yoplait SAS
subsidiary and $26 million of integration costs related to our
acquisition of Blue Buffalo. In addition, we recorded a $3 million
loss related to the impact of hyperinflationary accounting for our
Argentina subsidiary in fiscal 2019.
(5)
Basic and diluted earnings per
share (EPS) were calculated as follows:
Quarter Ended
Fiscal Year
In Millions, Except per Share
Data
May 31, 2020
May 26, 2019
2020
2019
2018
Net earnings attributable to General
Mills
$
625.7
$
570.2
$
2,181.2
$
1,752.7
$
2,131.0
Average number of common shares - basic
EPS
610.9
603.7
608.1
600.4
576.8
Incremental share effect from: (a)
Stock options
2.5
3.1
2.7
3.1
6.9
Restricted stock units, performance share
units, and other
2.8
2.5
2.5
1.9
2.0
Average number of common shares - diluted
EPS
616.1
609.3
613.3
605.4
585.7
Earnings per share - basic
$
1.03
$
0.95
$
3.59
$
2.92
$
3.69
Earnings per share - diluted
$
1.02
$
0.94
$
3.56
$
2.90
$
3.64
(a) Incremental shares from stock options,
restricted stock units, and performance share units are computed by
the treasury stock method.
(6)
The effective tax rate for the
fourth quarter of fiscal 2020 was 19.0 percent compared to 8.9
percent for the fourth quarter of fiscal 2019. The 10.1 percentage
point increase in our effective tax rate as compared to the prior
year was primarily due to the recognition of a capital loss
carryback benefit of $73 million in the fourth quarter of fiscal
2019. Our adjusted effective tax rate was 19.1 percent in the
fourth quarter of fiscal 2020 compared to 20.6 percent in the
fourth quarter of fiscal 2019 (see Note 7 below for a description
of our use of measures not defined by GAAP).
The effective tax rate for fiscal
2020 was 18.5 percent compared to 17.7 percent in fiscal 2019. The
0.8 percentage point increase was primarily due to certain
nonrecurring discrete tax benefits in fiscal 2019, partially offset
by the $53 million net benefit from the reorganization of certain
wholly-owned subsidiaries and favorable changes in earnings mix by
jurisdiction in fiscal 2020. Our adjusted effective tax rate was
20.7 percent in fiscal 2020 compared to 21.8 percent in fiscal 2019
(see Note 7 below for a description of our use of measures not
defined by GAAP).
(7)
We have included measures in this
release that are not defined by GAAP. 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.
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 Board of Directors’
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, as well as
acquisitions, divestitures, and a 53rd 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 Operating Segment Results above.
Certain measures in this release
are presented excluding the impact of foreign currency exchange
(constant-currency). 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. We believe that
these constant-currency measures provide useful information to
investors because they provide transparency to underlying
performance by excluding the effect that foreign currency exchange
rate fluctuations have on period-to-period comparability given
volatility in foreign currency exchange markets.
In addition, 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.
Adjusted Diluted EPS and Related
Constant-currency Growth Rates
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 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:
Quarter Ended
Fiscal Year
Per Share Data
May 31, 2020
May 26, 2019
Change
2020
2019
Change
Diluted earnings per share, as
reported
$
1.02
$
0.94
9 %
$
3.56
$
2.90
23 %
Tax items (a)
-
(0.12)
(0.09)
(0.12)
Restructuring charges (b)(l)
0.01
0.02
0.06
0.10
Mark-to-market effects (c)(l)
0.03
-
0.03
0.05
Product recall (d)(l)
0.03
-
0.03
-
CPW restructuring charges (e)(l)
-
-
0.01
0.02
Investment activity, net (f)(l)
-
(0.01)
-
(0.03)
Net tax benefit (g)
-
-
-
(0.01)
Divestitures loss (h)(l)
-
-
-
0.03
Acquisition integration costs (i)(l)
-
-
-
0.03
Asset impairments (j)(l)
-
-
-
0.26
Legal recovery (k)(l)
-
-
-
(0.01)
Adjusted diluted earnings per share
$
1.10
$
0.83
33 %
$
3.61
$
3.22
12 %
Foreign currency exchange impact
Flat
Flat
Adjusted diluted earnings per share
growth, on a constant-currency basis
33 %
12 %
Note: Table may not foot due to
rounding.
(a) Discrete tax benefit related
to the reorganization of certain wholly owned subsidiaries in
fiscal 2020 and a discrete tax benefit related to a capital loss
carryback recorded in fiscal 2019. See Note 6.
(b) Restructuring charges for
previously announced restructuring actions. See Note 3.
(c) Net mark-to-market valuation
of certain commodity positions recognized in unallocated corporate
items. See Note 4.
(d) Product recall costs related
to our international Green Giant business. See Note 4.
(e) CPW restructuring charges
related to initiatives designed to improve profitability and growth
that were approved in fiscal 2018 and 2019.
(f) Valuation gains on certain
corporate investments. See Note 4.
(g) Net tax benefit resulting
from Tax Cuts and Jobs Act (TCJA) accounting.
(h) Loss on the sale of our La
Salteña refrigerated dough business in Argentina and gain on the
sale of our yogurt business in China. See Note 2.
(i) Integration costs resulting
from the acquisition of Blue Buffalo in fiscal 2018. See Note
4.
(j) Impairment charges related to
our Progresso, Food Should Taste Good, and Mountain High brand
intangible assets and certain manufacturing assets in our North
America Retail and Asia & Latin America segments. See Note
3.
(k) Represents a legal recovery
related to our Yoplait SAS subsidiary. See Note 4.
(l) See reconciliation of
adjusted effective income tax rate below for tax impact of
adjustment.
Total Segment Operating Profit
This measure is used in reporting to our executive management
and as a component of the Board of Directors’ measurement of our
performance for incentive compensation purposes. We believe that
this measure provides useful information to investors because it is
the profitability measure we use to evaluate segment performance. 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 is
calculated as follows:
Percentage Change in Total
Segment Operating Profit as Reported
Impact of Foreign Currency
Exchange
Percentage Change in Total
Segment Operating Profit on a Constant-Currency Basis
Quarter Ended May 31, 2020
31 %
(1)
pt
32 %
Fiscal Year Ended May 31, 2020
10 %
Flat
11 %
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.
Our segments' operating profit growth rates on a
constant-currency basis are calculated as follows:
Quarter Ended May 31,
2020
Percentage Change in Operating
Profit as Reported
Impact of Foreign Currency
Exchange
Percentage Change in Operating
Profit on a Constant-Currency Basis
North America Retail
69
%
Flat
69
%
Europe & Australia
(22)
%
(8)
pts
(14)
%
Fiscal Year Ended May 31,
2020
Percentage Change in Operating
Profit as Reported
Impact of Foreign Currency
Exchange
Percentage Change in Operating
Profit on a Constant-Currency Basis
North America Retail
15
%
Flat
15
%
Europe & Australia
(8)
(5)
pts
(3)
Asia & Latin America
(74)
%
(1)
pt
(73)
%
Note: Tables may not foot due to
rounding.
Adjusted Earnings Comparisons as a Percent
of Net Sales
We believe that these measures provide useful information to
investors because they are important for assessing our adjusted
earnings comparisons as a percent of net sales on a comparable
year-to-year basis.
Our adjusted earnings comparisons as a percent of net sales are
calculated as follows:
Quarter Ended
In Millions
May 31, 2020
May 26, 2019
Comparisons as a % of Net Sales
Value
Percent of Net Sales
Value
Percent of Net Sales
Gross margin as reported (a)
$
1,768.1
35.2
%
$
1,461.3
35.1
%
Restructuring charges (b)
1.5
-
%
9.6
0.2
%
Project-related costs (b)
0.4
-
%
-
-
%
Mark-to-market effects (c)
23.7
0.5
%
(0.4)
-
%
Product recall (d)
19.3
0.4
%
-
-
%
Adjusted gross margin
$
1,813.0
36.1
%
$
1,470.5
35.3
%
Operating profit as reported
$
829.5
16.5
%
$
716.1
17.2
%
Restructuring charges (b)
13.0
0.3
%
16.6
0.4
%
Project-related costs (b)
0.4
-
%
-
-
%
Mark-to-market effects (c)
23.7
0.5
%
(0.4)
-
%
Product recall (d)
19.3
0.4
%
-
-
%
Investment activity, net (e)
1.7
-
%
(9.8)
(0.3)
%
Divestiture gain (f)
-
-
%
(5.4)
(0.1)
%
Acquisition integration costs (g)
-
-
%
4.3
0.1
%
Asset impairments (h)
-
-
%
0.4
-
%
Adjusted operating profit
$
887.7
17.7
%
$
721.8
17.3
%
Net earnings attributable to General Mills
as reported
$
625.7
12.5
%
$
570.2
13.7
%
Restructuring charges, net of tax
(b)(k)
9.8
0.2
%
14.4
0.4
%
Project-related costs, net of tax
(b)(k)
0.3
-
%
0.1
-
%
Mark-to-market effects, net of tax
(c)(k)
18.3
0.4
%
(0.3)
-
%
Product recall, net of tax (d)(k)
17.1
0.3
%
-
-
%
Investment activity, net, net of tax
(e)(k)
1.4
-
%
(7.6)
(0.2)
%
Divestiture gain, net of tax (f)(k)
-
-
%
(2.6)
(0.1)
%
Acquisition integration costs, net of tax
(g)(k)
-
-
%
3.3
0.1
%
Asset impairments, net of tax (h)(k)
-
-
%
0.3
-
%
Tax items (i)
-
-
%
(72.9)
(1.8)
%
CPW restructuring charges, net of tax
(j)
0.5
-
%
2.5
0.1
%
Adjusted net earnings attributable to
General Mills
$
673.1
13.4
%
$
507.4
12.2
%
Note: Table may not foot due to
rounding.
(a) Net sales less cost of
sales.
(b) Restructuring and
project-related charges for previously announced restructuring
actions. See Note 3.
(c) Net mark-to-market valuation
of certain commodity positions recognized in unallocated corporate
items. See Note 4.
(d) Product recall costs related
to our international Green Giant business. See Note 4.
(e) Valuation losses on certain
corporate investments in fiscal 2020. Valuation gains on certain
corporate investments in fiscal 2019. See Note 4.
(f) Gain on the sale of our
yogurt business in China. See Note 2.
(g) Integration costs resulting
from the acquisition of Blue Buffalo in fiscal 2018. See Note
4.
(h) Impairment charges related to
certain manufacturing assets in our North America Retail and Asia
& Latin America segments. See Note 3.
(i) Discrete tax benefit related
to a capital loss carryback. See Note 6.
(j) CPW restructuring charges
related to initiatives designed to improve profitability and growth
that were approved in fiscal 2018 and 2019.
(k) See reconciliation of
adjusted effective income tax rate below for tax impact of
adjustment.
Fiscal Year
In Millions
2020
2019
2018
Comparisons as a % of Net Sales
Value
Percent of Net Sales
Value
Percent of Net Sales
Value
Percent of Net Sales
Gross margin as reported (a)
$
6,129.9
34.8
%
$
5,756.8
34.1%
$
5,435.6
34.5%
Restructuring charges (b)
25.8
0.1
%
9.9
0.1%
14.0
0.1%
Project-related costs (b)
1.5
-
%
1.3
-%
11.3
0.1%
Mark-to-market effects (c)
24.7
0.1
%
36.0
0.2%
(32.1)
(0.2)%
Product recall (d)
19.3
0.1
%
-
-%
-
-%
Hyperinflationary accounting (e)
-
-
%
1.4
-%
-
-%
Adjusted gross margin
$
6,201.2
35.2
%
$
5,805.4
34.4%
$
5,428.8
34.5%
Operating profit as reported
$
2,953.9
16.8
%
$
2,515.9
14.9%
$
2,419.9
15.4%
Restructuring charges (b)
50.2
0.3
%
77.6
0.5%
82.7
0.5%
Project-related costs (b)
1.5
-
%
1.3
-%
11.3
0.1%
Mark-to-market effects (c)
24.7
0.1
%
36.0
0.2%
(32.1)
(0.2)%
Product recall (d)
19.3
0.1
%
-
-%
-
-%
Hyperinflationary accounting (e)
-
-
%
3.2
-%
-
-%
Investment activity, net (f)
8.4
-
%
(22.8)
(0.1)%
-
-%
Divestitures loss (g)
-
-
%
30.0
0.2%
-
-%
Acquisition transaction and integration
costs (h)
-
-
%
25.6
0.1%
34.0
0.2%
Asset impairments (i)
-
-
%
207.4
1.2%
96.9
0.6%
Legal recovery (j)
-
-
%
(16.2)
(0.1)%
-
-%
Adjusted operating profit
$
3,058.0
17.3
%
$
2,858.0
16.9%
$
2,612.7
16.6%
Net earnings attributable to General Mills
as reported
$
2,181.2
12.4
%
$
1,752.7
10.4%
$
2,131.0
13.5%
Restructuring charges, net of tax
(b)(n)
39.0
0.2
%
62.6
0.3%
61.4
0.4%
Project-related costs, net of tax
(b)(n)
1.2
-
%
1.1
-%
8.0
-%
Mark-to-market effects, net of tax
(c)(n)
19.0
0.1
%
27.7
0.2%
(22.1)
(0.1)%
Product recall, net of tax (d)(n)
17.1
0.1
%
-
-%
-
-%
Hyperinflationary accounting, net of tax
(e)(n)
-
-
%
3.2
-%
-
-%
Investment activity, net, net of tax
(f)(n)
3.0
-
%
(17.6)
(0.1)%
-
-%
Divestitures loss, net of tax (g)(n)
-
-
%
19.2
0.1%
-
-%
Acquisition transaction and integration
costs, net of tax (h)(n)
-
-
%
19.7
0.1%
58.5
0.4%
Asset impairments, net of tax (i)(n)
-
-
%
158.7
0.9%
64.9
0.4%
Legal recovery, net of tax (j)(n)
-
-
%
(5.5)
-%
-
-%
Tax items (k)
(53.1)
(0.3)
%
(72.9)
(0.4)%
40.9
0.3%
CPW restructuring charges, net of tax
(l)
5.0
-
%
11.1
0.1%
1.8
-%
Net tax benefit (m)
-
-
%
(7.2)
-%
(523.5)
(3.3)%
Adjusted net earnings attributable to
General Mills
$
2,212.3
12.6
%
$
1,952.8
11.6%
$
1,820.9
11.6%
Note: Table may not foot due to
rounding.
(a) Net sales less cost of
sales.
(b) Restructuring and
project-related charges for previously announced restructuring
actions. See Note 3.
(c) Net mark-to-market valuation
of certain commodity positions recognized in unallocated corporate
items. See Note 4.
(d) Product recall costs related
to our international Green Giant business. See Note 4.
(e) Represents the impact of
hyperinflationary accounting for our Argentina subsidiary, which
was sold in fiscal 2019. See Note 4.
(f) Valuation losses and the loss
on sale of certain corporate investments in fiscal 2020. Valuation
gains on certain corporate investments in fiscal 2019. See Note
4.
(g) Loss on the sale of our La
Salteña refrigerated dough business in Argentina and gain on the
sale of our yogurt business in China. See Note 2.
(h) Costs related to the
acquisition of Blue Buffalo. Fiscal 2019 represented acquisition
integration costs. See Note 4. Fiscal 2018 represented acquisition
transaction and integration costs and interest, net related to the
debt issued to finance the acquisition.
(i) Impairment charges related to
our Progresso, Food Should Taste Good, and Mountain High brand
intangible assets and certain manufacturing assets in our North
America Retail and Asia & Latin America segments in fiscal
2019. See Note 3. Impairment charges related to our Yoki, Mountain
High, and Immaculate Baking brand intangible assets in fiscal
2018.
(j) Represents a legal recovery
related to our Yoplait SAS subsidiary. See Note 4.
(k) Discrete tax benefit related
to the reorganization of certain wholly owned subsidiaries in
fiscal 2020 and a discrete tax benefit related to a capital loss
carryback recorded in fiscal 2019. See Note 6. Fiscal 2018
represents a prior year income tax expense adjustment.
(l) CPW restructuring charges
related to initiatives designed to improve profitability and growth
that were approved in fiscal 2018 and 2019.
(m) Net tax benefit resulting
from TCJA accounting.
(n) See reconciliation of
adjusted effective income tax rate below for tax impact of
adjustment.
Adjusted Operating Profit Growth on a
Constant-currency Basis
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.
Our adjusted operating profit growth on a constant-currency
basis is calculated as follows:
Quarter Ended
Fiscal Year
May 31, 2020
May 26, 2019
Change
2020
2019
Change
Operating profit growth as reported
$
829.5
$
716.1
16 %
$
2,953.9
$
2,515.9
17 %
Restructuring charges (a)
13.0
16.6
50.2
77.6
Project-related costs (a)
0.4
-
1.5
1.3
Mark-to-market effects (b)
23.7
(0.4)
24.7
36.0
Product recall (c)
19.3
-
19.3
-
Investment activity, net (d)
1.7
(9.8)
8.4
(22.8)
Divestitures (gain) loss (e)
-
(5.4)
-
30.0
Acquisition integration costs (f)
-
4.3
-
25.6
Asset impairments (g)
-
0.4
-
207.4
Legal recovery (h)
-
-
-
(16.2)
Hyperinflationary accounting (i)
-
-
-
3.2
Adjusted operating profit
$
887.7
$
721.8
23 %
$
3,058.0
$
2,858.0
7 %
Foreign currency exchange impact
(1) pt
Flat
Adjusted operating profit growth on a
constant-currency basis
24 %
7 %
Note: Table may not foot due to
rounding.
(a) Restructuring and
project-related charges for previously announced restructuring
actions. See Note 3.
(b) Net mark-to-market valuation
of certain commodity positions recognized in unallocated corporate
items. See Note 4.
(c) Product recall costs related
to our international Green Giant business. See Note 4.
(d) Valuation losses and the loss
on sale of certain corporate investments in fiscal 2020. Valuation
gains on certain corporate investments in fiscal 2019. See Note
4.
(e) Loss on the sale of our La
Salteña refrigerated dough business in Argentina and gain on the
sale of our yogurt business in China. See Note 2.
(f) Integration costs resulting
from the acquisition of Blue Buffalo in fiscal 2018. See Note
4.
(g) Impairment charges related to
our Progresso, Food Should Taste Good, and Mountain High brand
intangible assets and certain manufacturing assets in our North
America Retail and Asia & Latin America segments. See Note
3.
(h) Represents a legal recovery
related to our Yoplait SAS subsidiary. See Note 4.
(i) Represents the impact of
hyperinflationary accounting for our Argentina subsidiary, which
was sold in fiscal 2019. See Note 4.
Adjusted Effective Income Tax
Rates
We believe this measure provides useful information to investors
because it presents the adjusted effective tax rate on a comparable
year-to-year basis.
Adjusted effective income tax rates are calculated as
follows:
Quarter Ended
May 31, 2020
May 26, 2019
May 27, 2018
In Millions
Pretax Earnings (a)
Income Taxes
Pretax Earnings (a)
Income Taxes
Pretax Earnings (a)
Income Taxes
As reported
$
733.0
$
139.6
$
615.9
$
54.7
$
423.9
$
86.4
Tax items (b)
-
-
-
72.9
-
(0.4)
Restructuring charges (c)
13.0
3.2
16.6
2.1
55.4
14.7
Project-related costs (c)
0.4
0.1
-
(0.1)
2.9
0.8
Mark-to-market effects (d)
23.7
5.5
(0.4)
(0.1)
(28.6)
(8.9)
Product recall (e)
19.3
2.2
-
-
-
-
Investment activity, net (f)
1.7
0.3
(9.8)
(2.2)
-
-
Net tax benefit (g)
-
-
-
-
-
19.7
Divestiture gain (h)
-
-
(5.4)
-
-
-
Acquisition transaction and integration
costs (i)
-
-
4.3
1.0
64.5
19.8
Asset impairments (j)
-
-
0.4
-
96.9
32.0
As adjusted
$
791.2
$
150.9
$
621.6
$
128.3
$
615.0
$
164.1
Effective tax rate:
As reported
19.0%
8.9%
20.4%
As adjusted
19.1%
20.6%
26.7%
Sum of adjustments to income taxes
$
11.4
$
73.6
$
77.7
Average number of common shares - diluted
EPS
616.1
609.3
593.5
Impact of income tax adjustments on
adjusted diluted EPS
$
(0.02)
$
(0.12)
$
(0.13)
Note: Table may not foot due to
rounding.
(a) Earnings before income taxes
and after-tax earnings from joint ventures.
(b) Discrete tax benefit related
to a capital loss carryback. See Note 6. Fiscal 2018 represents a
prior year income tax expense adjustment.
(c) Restructuring and
project-related charges for previously announced restructuring
actions. See Note 3.
(d) Net mark-to-market valuation
of certain commodity positions recognized in unallocated corporate
items. See Note 4.
(e) Product recall costs related
to our international Green Giant business. See Note 4.
(f) Valuation losses on certain
corporate investments in fiscal 2020. Valuation gains on certain
corporate investments in fiscal 2019. See Note 4.
(g) Net tax benefit resulting
from TCJA accounting.
(h) Gain on the sale of our
yogurt business in China. See Note 2.
(i) Costs related to the
acquisition of Blue Buffalo. Fiscal 2019 represented acquisition
integration costs. See Note 4. Fiscal 2018 represented acquisition
transaction and integration costs and interest, net related to the
debt issued to finance the transaction.
(j) Impairment charges related to
certain manufacturing assets in our North America Retail and Asia
& Latin America segments in fiscal 2019. See Note 3. Impairment
charges related to our Yoki, Mountain High, and Immaculate Baking
brand intangible assets in fiscal 2018.
Fiscal Year Ended
May 31, 2020
May 26, 2019
May 27, 2018
In Millions
Pretax Earnings (a)
Income Taxes
Pretax Earnings (a)
Income Taxes
Pretax Earnings (a)
Income Taxes
As reported
$
2,600.2
$
480.5
$
2,082.0
$
367.8
$
2,135.6
$
57.3
Tax items (b)
-
53.1
-
72.9
-
(40.9)
Restructuring charges (c)
50.2
11.2
77.6
14.6
82.7
21.4
Project-related costs (c)
1.5
0.3
1.3
0.2
11.3
3.3
Mark-to-market effects (d)
24.7
5.7
36.0
8.3
(32.1)
(10.0)
Product recall (e)
19.3
2.2
-
-
-
-
Investment activity, net (f)
8.4
5.4
(22.8)
(5.2)
-
-
Net tax benefit (g)
-
-
-
7.2
-
523.5
Divestitures loss (h)
-
-
30.0
13.6
-
-
Acquisition transaction and integration
costs (i)
-
-
25.6
5.9
83.9
25.4
Asset impairments (j)
-
-
207.4
47.7
96.9
32.0
Legal recovery (k)
-
-
(16.2)
(5.4)
-
-
Hyperinflationary accounting (l)
-
-
3.2
-
-
-
As adjusted
$
2,704.3
$
558.5
$
2,424.1
$
527.6
$
2,378.3
$
612.0
Effective tax rate:
As reported
18.5%
17.7%
2.7%
As adjusted
20.7%
21.8%
25.7%
Sum of adjustments to income taxes
$
78.0
$
159.8
$
554.7
Average number of common shares - diluted
EPS
613.3
605.4
585.7
Impact of income tax adjustments on
adjusted diluted EPS
$
(0.13)
$
(0.26)
$
(0.95)
Note: Table may not foot due to
rounding.
(a) Earnings before income taxes
and after-tax earnings from joint ventures.
(b) Discrete tax benefit related
to the reorganization of certain wholly owned subsidiaries in
fiscal 2020 and a discrete tax benefit related to a capital loss
carryback recorded in fiscal 2019. See Note 6. Fiscal 2018
represents a prior year income tax expense adjustment.
(c) Restructuring and
project-related charges for previously announced restructuring
actions. See Note 3.
(d) Net mark-to-market valuation
of certain commodity positions recognized in unallocated corporate
items. See Note 4.
(e) Product recall costs related
to our international Green Giant business. See Note 4.
(f) Valuation losses and the loss
on sale of certain corporate investments in fiscal 2020. Valuation
gains on certain corporate investments in fiscal 2019. See Note
4.
(g) Net tax benefit resulting
from TCJA accounting.
(h) Loss on the sale of our La
Salteña refrigerated dough business in Argentina and gain on the
sale of our yogurt business in China. See Note 2.
(i) Costs related to the
acquisition of Blue Buffalo. Fiscal 2019 represented acquisition
integration costs. See Note 4. Fiscal 2018 represented acquisition
transaction and integration costs and interest, net related to the
debt issued to finance the acquisition.
(j) Impairment charges related to
our Progresso, Food Should Taste Good, and Mountain High brand
intangible assets and certain manufacturing assets in our North
America Retail and Asia & Latin America segments in fiscal
2019. See Note 3. Impairment charges related to our Yoki, Mountain
High, and Immaculate Baking brand intangible assets in fiscal
2018.
(k) Represents a legal recovery
related to our Yoplait SAS subsidiary. See Note 4.
(l) Represents the impact of
hyperinflationary accounting for our Argentina subsidiary, which
was sold in fiscal 2019. See Note 4.
Free Cash Flow Conversion Rate
We believe this measure provides useful information to investors
because it is important for assessing our efficiency in converting
earnings to cash and returning cash to shareholders. The
calculation of free cash flow conversion rate and net cash provided
by operating activities conversion rate, its equivalent GAAP
measure, follows:
Fiscal Year
In Millions
2020
2019
Net earnings, including earnings
attributable to redeemable and noncontrolling interests, as
reported
$
2,210.8
$
1,786.2
Tax item (a)
$
(53.1)
$
(72.9)
Restructuring charges, net of tax
(b)(m)
39.0
63.0
Project-related costs, net of tax
(b)(m)
1.2
1.1
Mark-to-market effects, net of tax
(c)(m)
19.0
27.7
Product recall, net of tax (d)(m)
17.1
-
CPW restructuring costs, net of tax
(e)
5.0
11.1
Investment activity, net, net of tax
(f)(m)
3.0
(17.6)
Net tax benefit (g)
-
(7.2)
Acquisition integration costs, net of tax
(h)(m)
-
19.7
Divestitures loss, net of tax (i)(m)
-
16.4
Asset impairments, net of tax (j)(m)
-
159.7
Hyperinflationary accounting, net of tax
(k)(m)
-
3.2
Legal recovery, net of tax (l)(m)
-
(10.8)
Adjusted net earnings, including earnings
attributable to redeemable and noncontrolling interests
$
2,241.8
$
1,979.6
Net cash provided by operating
activities
3,676.2
2,807.0
Purchases of land, buildings, and
equipment
(460.8)
(537.6)
Free cash flow
$
3,215.4
$
2,269.4
Net cash provided by operating activities
conversion rate
166%
157%
Free cash flow conversion rate
143%
115%
Note: Table may not foot due to
rounding.
(a) Discrete tax benefit related
to the reorganization of certain wholly owned subsidiaries. See
Note 6.
(b) Restructuring and
project-related charges for previously announced restructuring
actions. See Note 3.
(c) Net mark-to-market valuation
of certain commodity positions recognized in unallocated corporate
items. See Note 4.
(d) Product recall costs related
to our international Green Giant business. See Note 4.
(e) CPW restructuring charges
related to initiatives designed to improve profitability and growth
that were approved in fiscal 2018 and 2019.
(f) Valuation adjustments and the
loss on sale of certain corporate investments. See Note 4.
(g) Net tax benefit resulting
from TCJA accounting.
(h) Integration costs resulting
from the acquisition of Blue Buffalo in fiscal 2018. See Note
4.
(i) Loss on the sale of our La
Salteña refrigerated dough business in Argentina and gain on the
sale of our yogurt business in China. See Note 2.
(j) Impairment charges related to
our Progresso, Food Should Taste Good, and Mountain High brand
intangible assets and certain manufacturing assets in our North
America Retail and Asia & Latin America segments. See Note
3.
(k) Represents the impact of
hyperinflationary accounting for our Argentina subsidiary, which
was sold in fiscal 2019. See Note 4.
(l) Represents a legal recovery
related to our Yoplait SAS subsidiary. See Note 4.
(m) See reconciliation of
adjusted effective income tax rate for tax impact of
adjustment.
Net Debt-to-Adjusted Earnings before Net
Interest, Income Taxes, Depreciation and Amortization (EBITDA)
Ratio
We believe that this measure provides useful information to
investors because it is an indicator of our ability to incur
additional debt and to service our existing debt.
The reconciliation of adjusted EBITDA to net earnings, including
earnings attributable to redeemable and noncontrolling interests,
its GAAP equivalent, as well as the calculation of the net
debt-to-adjusted EBITDA ratio are as follows:
Fiscal Year
In Millions
2020
2019
Total debt (a)
$
13,539.5
$
14,490.0
Cash
1,677.8
450.0
Net debt
$
11,861.7
$
14,040.0
Net earnings, including earnings
attributable to redeemable and noncontrolling interests, as
reported
$
2,210.8
$
1,786.2
Income taxes
480.5
367.8
Interest, net
466.5
521.8
Depreciation and amortization
594.7
620.1
EBITDA
3,752.5
3,295.9
After-tax earnings from joint ventures
(91.1)
(72.0)
Restructuring charges (b)
50.2
77.6
Project-related costs (b)
1.5
1.3
Mark-to-market effects (c)
24.7
36.0
Product recall (d)
19.3
-
Investment activity, net (e)
8.4
(22.8)
Divestitures loss (f)
-
30.0
Acquisition integration costs (g)
-
25.6
Asset impairments (h)
-
207.4
Legal recovery (i)
-
(16.2)
Hyperinflationary accounting (j)
-
3.2
Adjusted EBITDA
$
3,765.6
$
3,566.0
Net debt-to-adjusted EBITDA ratio
3.2
3.9
Note: Table may not foot due to
rounding.
(a) Notes payable and long-term
debt, including current portion.
(b) Restructuring and
project-related charges for previously announced restructuring
actions. See Note 3.
(c) Net mark-to-market valuation
of certain commodity positions recognized in unallocated corporate
items. See Note 4.
(d) Product recall costs related
to our international Green Giant business.
(e) Valuation adjustments and the
loss on sale of certain corporate investments. See Note 4.
(f) Loss on the sale of our La
Salteña refrigerated dough business in Argentina and gain on the
sale of our yogurt business in China. See Note 2.
(g) Integration costs resulting
from the acquisition of Blue Buffalo in fiscal 2018. See Note
4.
(h) Impairment charges related to
our Progresso, Food Should Taste Good, and Mountain High brand
intangible assets and certain manufacturing assets in our North
America Retail and Asia & Latin America segments. See Note
3.
(i) Represents a legal recovery
related to our Yoplait SAS subsidiary. See Note 4.
(j) Represents the impact of
hyperinflationary accounting for our Argentina subsidiary, which
was sold in fiscal 2019. See Note 4.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200701005465/en/
(analysts) Jeff Siemon: 763-764-2301
(media) Kelsey Roemhildt: 763-764-6364
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