Company Raises Full-Year Earnings Guidance
MINNEAPOLIS--(BUSINESS WIRE)--Sept. 17, 2008--General Mills (NYSE:
GIS) today reported results for the first quarter of fiscal 2009. Net
sales for the 13-weeks ended August 24, 2008, grew 14 percent to $3.5
billion. Volume increases (measured in pounds) contributed 4 points of
sales growth. Segment operating profits grew 9 percent to $632 million
despite higher input costs and a 17 percent increase in consumer
marketing investment. First-quarter net earnings totaled $279 million
after a net reduction related to mark-to-market valuation of certain
commodity positions (this non-cash item is discussed below in the
section titled Corporate Items). Diluted earnings per share (EPS)
totaled 79 cents, including a 17-cent net reduction related to
mark-to-market valuation. Excluding the mark-to-market impact,
earnings per share would have totaled 96 cents, up 19 percent from 81
cents per share earned in last year's first quarter.
Chairman and Chief Executive Officer Ken Powell said, "We're off
to a great start in 2009, powered by strong consumer demand for our
products in markets around the world. Our U.S. Retail sales grew 13
percent, International sales rose 15 percent, and Bakeries and
Foodservice sales were up 17 percent for the quarter. Operating
profits showed strong growth despite the input cost pressure and our
increased consumer marketing investment. This broad momentum has us
well on track to deliver solid sales and earnings growth for the full
year."
U.S. Retail Segment Results
First quarter net sales for General Mills' U.S. Retail segment
grew 13 percent to $2.3 billion, with gains recorded by every
division. Pound volume contributed 6 points of the growth. Operating
profits grew 11 percent to reach $526 million including a 16 percent
increase in consumer marketing expense.
Net sales for the Baking Products division grew 25 percent,
reflecting strong gains by Betty Crocker dessert mixes and Gold Medal
flour. Yoplait division net sales grew 19 percent, led by
contributions from Yoplait Light, Yo-Plus and Fiber One yogurts.
Snacks division net sales grew 14 percent with continued strong growth
by Nature Valley and Fiber One grain snack bars. Net sales for Big G
cereals grew 10 percent including gains by Multi-Grain Cheerios, Honey
Nut Cheerios, original Cheerios and the Fiber One cereal line. Meals
division net sales also grew 10 percent, led by Progresso
ready-to-serve soups and Green Giant vegetables. Pillsbury USA
division net sales grew 6 percent including gains from Grands biscuits
and Totino's frozen pizza and snacks. Net sales for the company's
Small Planet Foods organic business showed a strong double-digit
increase reflecting the June 2008 acquisition of the Larabar line of
fruit and nut energy bars, along with contributions from new varieties
of Cascadian Farm cereals and snack bars, and Muir Glen soups and
pasta sauces.
International Segment Results
First-quarter net sales for General Mills' international business
segment grew 15 percent to $690 million, including 6 points of growth
from foreign exchange. Pound volume matched prior-year levels.
Operating profits grew 11 percent to $79 million.
Sales growth was broad-based across the regions where the company
competes. Net sales in Europe grew 14 percent. Sales in Canada rose 9
percent. And sales in the Asia / Pacific region and Latin America grew
26 percent and 14 percent, respectively.
Bakeries & Foodservice Segment
First-quarter net sales for Bakeries & Foodservice grew 17 percent
to $517 million, reflecting price increases taken to combat higher
input costs. Pound volume declined 5 percent for the period. Net sales
to bakery channel customers grew 29 percent, sales to convenience
stores and vending accounts grew 10 percent, and sales to restaurants
and foodservice distributors grew 8 percent. Segment operating profits
totaled $27 million. This was below results for last year's first
quarter, when profits grew 17 percent to reach $34 million.
Joint Venture Summary
After-tax earnings from joint ventures grew 37 percent in the
first quarter of 2009 to reach $31 million. Prior-year results
included a $2 million after-tax charge associated with a Cereal
Partners Worldwide (CPW) restructuring initiative in the United
Kingdom. Net sales for CPW rose 21 percent in the quarter, and net
sales for the Haagen-Dazs joint venture in Japan grew 7 percent.
Corporate Items
Corporate unallocated expense totaled $159 million in the first
quarter of 2009, up from $54 million in the same period a year ago.
This primarily reflects the mark-to-market impact of $91 million in
the first quarter of 2009, compared to $1 million in last year's first
quarter.
Restructuring, impairment and other exit costs totaled $3 million
expense in this year's first quarter, compared to $14 million expense
a year ago. Net interest expense of $89 million was below prior-year
expense of $113 million due to lower debt levels and rates. The
effective tax rate for the quarter was 34.9 percent compared to 32.8
percent in last year's first quarter. General Mills' estimated tax
rate for the full 2009 fiscal year remains 35 percent.
Cash Flow Items
Operating activities generated $226 million of cash in the first
quarter of 2009, compared to $21 million of cash generated in the same
period last year. The increase was primarily due to reduced use of
cash for working capital. Capital expenditures during the quarter were
$129 million this year compared to $68 million a year ago. Dividends
grew to $148 million.
During the first quarter of 2009, General Mills repurchased 8
million of the company's common shares at an average price of
approximately $63 per share. Average diluted shares outstanding for
the quarter were 350 million. This was higher than last year's
first-quarter average of 345 million outstanding shares. However, for
2009 in total, General Mills expects average diluted shares
outstanding to decline 1 percent from the 2008 level.
Fiscal 2009 Outlook
"Sales and profit results for the first quarter exceeded our
expectations," said Powell. "This strong start increases our
confidence that 2009 will be another year of good growth for our
company, even though we continue to estimate our input cost inflation
at 9 percent."
The company said that fiscal 2009 net sales are expected to grow
at a mid single-digit rate, driven primarily by price and mix. Segment
operating profits are also expected to grow at a mid single-digit
rate. Diluted earnings per share as reported will continue to include
mark-to-market valuation of commodity positions, but the company
cannot predict its effect on earnings. In addition, the company will
record a gain on the sale of its Pop Secret microwave popcorn business
in the second quarter of 2009. Excluding that gain, and assuming no
mark-to-market impact in fiscal 2009, the company updated its earnings
guidance to a range of $3.81 to $3.85 per share. Previously, the
company's 2009 earnings guidance was a range of $3.78 to $3.83 per
share.
General Mills will hold a briefing for investors today, September
17, 2008, beginning at 8:30 a.m. EDT. You may access the web cast from
General Mills' corporate home page: www.generalmills.com.
Total company segment operating profit is a non-GAAP measure.
Reconciliation of this measure to the relevant GAAP measure (operating
profit) appears in the attached operating segment results schedule.
Earnings per share excluding mark-to-market valuation of certain
commodity positions is also a non-GAAP measure. Reconciliation of this
measure to the relevant GAAP measure (earnings per share) appears in
Note 7 to the attached consolidated financial statements.
This press release contains forward-looking statements within the
meaning of The Private Securities Litigation Reform Act of 1995 that
are based on management's current expectations and assumptions. These
forward-looking statements, including the statements under the caption
"Fiscal 2009 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 or tax rates; 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 laws and regulations,
including labeling and advertising regulations; 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 hedge price risk for certain commodities; benefit
plan expenses due to changes in plan asset values and discount rates
used to determine plan liabilities; failure of our information
technology systems; resolution of uncertain income tax matters;
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 statements to reflect any future events or
circumstances.
GENERAL MILLS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS AND SUPPLEMENTARY INFORMATION
(Unaudited) (In Millions, Except per Share Data)
Quarter Ended
----------------------------
Aug. 24, Aug. 26,
2008 2007 % Change
--------- --------- --------
Net sales $3,497.3 $3,072.0 13.8%
Cost of sales 2,305.6 1,915.8 20.3%
Selling, general, and administrative
expenses 719.4 631.6 13.9%
Restructuring, impairment, and other
exit costs 2.7 14.5 (81.4%)
--------- --------- --------
Operating profit 469.6 510.1 (7.9%)
Interest, net 88.7 113.3 (21.7%)
--------- --------- --------
Earnings before income taxes and after-
tax earnings from joint ventures 380.9 396.8 (4.0%)
Income taxes 133.2 130.3 2.2%
After-tax earnings from joint ventures 30.8 22.4 37.5%
--------- --------- --------
Net earnings $ 278.5 $ 288.9 (3.6%)
========= ========= ========
Earnings per share - basic $ 0.83 $ 0.85 (2.4%)
========= ========= ========
Earnings per share - diluted $ 0.79 $ 0.81 (2.5%)
========= ========= ========
Dividends per share $ 0.43 $ 0.39 10.3%
========= ========= ========
Quarter Ended
----------------------------
Aug. 24, Aug. 26, Basis Pt
Comparisons as a % of net sales: 2008 2007 Change
--------- --------- --------
Gross margin 34.1% 37.6% (350)
Selling, general, and administrative
expenses 20.6% 20.6% -
Operating profit 13.4% 16.6% (320)
Net earnings 8.0% 9.4% (140)
Quarter Ended
----------------------------
Comparisons as a % of net sales excluding
impact of mark-to-market valuation Aug. 24, Aug. 26, Basis Pt
related to certain commodity positions: 2008 2007 Change
--------- --------- --------
Gross margin 36.7% 37.7% (100)
Operating profit 16.0% 16.6% (60)
Net earnings 9.6% 9.4% 20
See Note 7 for a reconciliation of this measure not defined by
generally accepted accounting principles ("GAAP").
See accompanying notes to consolidated financial statements.
GENERAL MILLS, INC. AND SUBSIDIARIES
OPERATING SEGMENT RESULTS AND SUPPLEMENTARY INFORMATION
(Unaudited) (In Millions)
Quarter Ended
-----------------------------
Aug. 24, Aug. 26,
2008 2007 % change
----------------------------------------------------------------------
Net sales:
U.S. Retail $2,290.3 $2,031.7 12.7%
International 690.1 599.4 15.1%
Bakeries and Foodservice 516.9 440.9 17.2%
----------------------------------------------------------------------
Total $3,497.3 $3,072.0 13.8%
----------------------------------------------------------------------
Operating profit:
U.S. Retail $ 526.3 $ 473.3 11.2%
International 78.5 71.0 10.6%
Bakeries and Foodservice 26.7 34.0 (21.5%)
----------------------------------------------------------------------
Total segment operating profit 631.5 578.3 9.2%
Unallocated corporate items 159.2 53.7 196.5%
Restructuring, impairment, and other
exit costs 2.7 14.5 (81.4%)
----------------------------------------------------------------------
Operating profit $ 469.6 $ 510.1 (7.9%)
----------------------------------------------------------------------
Quarter Ended
-----------------------------
Aug. 24, Aug. 26, Basis Pt
2008 2007 Change
-----------------------------
Segment operating profit as a % of net
sales:
U.S. Retail 23.0% 23.3% (30)
International 11.4% 11.8% (40)
Bakeries and Foodservice 5.2% 7.7% (250)
----------------------------------------------------------------------
Total segment operating profit 18.1% 18.8% (70)
----------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
GENERAL MILLS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Millions, Except Par Value)
Aug. 24, Aug. 26, May 25,
2008 2007 2008
------------ ------------ ----------
ASSETS (Unaudited) (Unaudited)
Current assets:
Cash and cash equivalents $ 654.9 $ 410.2 $ 661.0
Receivables 1,166.7 1,064.0 1,081.6
Inventories 1,600.7 1,554.8 1,366.8
Deferred income taxes - 73.3 -
Prepaid expenses and other
current assets 403.9 375.8 510.6
------------ ------------ ----------
Total current assets 3,826.2 3,478.1 3,620.0
Land, buildings, and equipment 3,052.0 2,963.1 3,108.1
Goodwill 6,792.9 6,685.5 6,786.1
Other intangible assets 3,745.3 3,729.4 3,777.2
Other assets 1,745.6 1,621.8 1,750.2
------------ ------------ ----------
Total assets $ 19,162.0 $ 18,477.9 $19,041.6
============ ============ ==========
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 886.5 $ 893.6 $ 937.3
Current portion of long-term
debt 215.3 1,946.5 442.0
Notes payable 2,104.2 3,560.6 2,208.8
Deferred income taxes 36.6 - 28.4
Other current liabilities 1,222.4 1,104.7 1,239.8
------------ ------------ ----------
Total current liabilities 4,465.0 7,505.4 4,856.3
Long-term debt 5,043.2 3,003.8 4,348.7
Deferred income taxes 1,462.7 1,421.2 1,454.6
Other liabilities 1,882.3 1,846.5 1,923.9
------------ ------------ ----------
Total liabilities 12,853.2 13,776.9 12,583.5
------------ ------------ ----------
Minority interests 242.3 242.3 242.3
Stockholders' equity:
Common stock, 377.3, 502.3, and
377.3 shares issued, $0.10 par
value 37.7 50.2 37.7
Additional paid-in capital 1,231.8 5,969.0 1,149.1
Retained earnings 6,641.7 5,901.2 6,510.7
Common stock in treasury, at
cost, shares of 41.9, 181.2,
and 39.8 (1,910.1) (7,364.2) (1,658.4)
Accumulated other comprehensive
income (loss) 65.4 (97.5) 176.7
------------ ------------ ----------
Total stockholders' equity 6,066.5 4,458.7 6,215.8
------------ ------------ ----------
Total liabilities and equity $ 19,162.0 $ 18,477.9 $19,041.6
============ ============ ==========
See accompanying notes to consolidated financial statements.
GENERAL MILLS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (In Millions)
Quarter Ended
--------------------
Aug. 24, Aug. 26,
2008 2007
--------- ----------
Cash Flows - Operating Activities
Net earnings $ 278.5 $ 288.9
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 111.6 108.2
After-tax earnings from joint ventures (30.8) (22.4)
Stock-based compensation 55.2 55.1
Deferred income taxes 16.7 (17.0)
Tax benefit on exercised options (51.5) (8.3)
Distributions of earnings from joint ventures 16.6 16.4
Pension, other postretirement, and
postemployment benefit costs (22.9) (16.3)
Restructuring, impairment, and other exit
costs (income) (0.4) 13.9
Changes in current assets and liabilities (158.2) (409.2)
Other, net 11.1 11.9
--------- ----------
Net cash provided by operating activities 225.9 21.2
--------- ----------
Cash Flows - Investing Activities
Purchases of land, buildings, and equipment (128.6) (67.9)
Acquisitions - 1.3
Investments in affiliates, net 4.1 (2.3)
Proceeds from disposal of land, buildings, and
equipment 0.2 11.2
Other, net (0.7) 6.6
--------- ----------
Net cash used by investing activities (125.0) (51.1)
--------- ----------
Cash Flows - Financing Activities
Change in notes payable (103.2) 2,297.2
Issuance of long-term debt 700.0 -
Payment of long-term debt (231.6) -
Repurchase of Series B-1 limited membership
interests in General Mills Cereals, LLC (GMC) - (843.0)
Repurchase of General Mills Capital, Inc.
preferred stock - (150.0)
Proceeds from sale of Class A limited
membership interests in GMC - 92.3
Proceeds from common stock issued on exercised
options 161.8 30.6
Tax benefit on exercised options 51.5 8.3
Purchases of common stock for treasury (498.9) (1,278.7)
Dividends paid (147.5) (132.1)
Other, net (4.4) (0.8)
--------- ----------
Net cash provided (used) by financing
activities (72.3) 23.8
--------- ----------
Effect of exchange rate changes on cash and cash
equivalents (34.7) (0.8)
--------- ----------
Decrease in cash and cash equivalents (6.1) (6.9)
Cash and cash equivalents - beginning of year 661.0 417.1
--------- ----------
Cash and cash equivalents - end of period $ 654.9 $ 410.2
========= ==========
Cash Flow from Changes in Current Assets and
Liabilities
Receivables $ (103.6) $ (109.3)
Inventories (247.2) (378.8)
Prepaid expenses and other current assets 102.1 65.0
Accounts payable 12.8 114.7
Other current liabilities 77.7 (100.8)
--------- ----------
Changes in current assets and liabilities $ (158.2) $ (409.2)
========= ==========
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, or the Company) have been prepared in
accordance with accounting principles generally accepted in the
United States for 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.
(2) As a part of our ongoing operations, we are exposed to market
risks such as changes in interest rates, foreign currency
exchange rates, and commodity prices. To manage these risks, we
may enter into various derivative transactions (e.g., futures,
options, and swaps) pursuant to our established policies.
As a result of the rising compliance costs and the complexity
associated with the application of hedge accounting, we elected
to discontinue the use of hedge accounting for all commodity
derivative positions entered into after the beginning of fiscal
2008. Accordingly, the changes in the values of these derivatives
are recorded in cost of sales in our Consolidated Statements of
Earnings currently.
Regardless of designation for accounting purposes, we believe all
of our commodity hedges are economic hedges of our risk
exposures, and as a result we consider these derivatives to be
hedges for purposes of measuring segment operating performance.
Thus, these gains and losses are reported in unallocated
corporate expenses outside of segment operating results until
such time that the exposure we are hedging affects earnings. At
that time we reclassify the hedge gain or loss from unallocated
corporate expenses to segment operating profit, allowing our
operating segments to realize the economic effects of the hedge
without experiencing any resulting mark-to-market volatility,
which remains in unallocated corporate expenses. We no longer
have any open commodity derivatives previously accounted for as
cash flow hedges.
Unallocated corporate items totaled $159 million of expense in the
first quarter of fiscal 2009 compared to $54 million of expense
in the same period in fiscal 2008. In the first quarter of fiscal
2009, we recorded a $91 million net increase in expense related
to mark-to-market valuation of certain commodity positions and
grain inventories, compared to a net increase of $1 million in
the first quarter of fiscal 2008. We incurred $10 million of
incremental employee compensation costs, primarily stock-based
compensation, and $6 million of unfavorable foreign exchange,
compared to the first quarter of fiscal 2008, partially offset by
$11 million of costs incurred in the same period last year
related to the remarketing of the Class A and Series B-1
interests in GMC.
(3) During the first quarter of fiscal 2009 we reached a definitive
agreement to sell our Pop-Secret microwave popcorn product line
for $190 million in cash. The transaction was completed on
September 15, 2008, and we expect to record a pre-tax gain of
approximately $130 million during the second quarter of fiscal
2009. We expect to receive pre-tax cash proceeds of approximately
$160 million, net of transaction-related costs.
Also during the first quarter of fiscal 2009, we acquired Humm
Foods, Inc. (Humm), the maker of Larabar fruit and nut energy
bars. We issued 0.9 million shares of our common stock with a
value of $55 million to the shareholders of Humm as consideration
for the acquisition. We have recorded the entire purchase price
less tangible assets acquired as goodwill pending completion of
purchase accounting.
(4) We recorded costs of restructuring, impairment, and other exit
activities as follows:
Quarter Ended
------------------
Aug. 24, Aug. 26,
In Millions 2008 2007
----------------------------------------------------------------------
Closure of Allentown, Pennsylvania frozen waffle
plant $ - $ 10.1
Closure of Trenton, Ontario frozen dough plant 2.0 8.5
Restructuring of production scheduling and
discontinuation of cake products line at
Chanhassen, Minnesota plant 0.7 3.0
Gain on sale of previously closed Vallejo,
California plant - (7.1)
----------------------------------------------------------------------
Total $ 2.7 $ 14.5
----------------------------------------------------------------------
During the first quarter of fiscal 2009, we recorded $2 million
of decommissioning costs related to the closure of our Trenton,
Ontario frozen dough facility. We expect to make limited use of
the plant during fiscal 2009 while we evaluate sublease or lease
termination options. We also recorded a $1 million charge
related to the previously announced restructuring action at our
Chanhassen, Minnesota facility.
The charges we expect to incur in fiscal 2009 with respect to
these fiscal 2008 restructuring actions total $22 million.
(5) Basic and diluted earnings per share (EPS) were calculated as
follows:
Quarter Ended
------------------
Aug. 24, Aug. 26,
In Millions, Except per Share Data 2008 2007
----------------------------------------------------------------------
Net earnings - as reported $ 278.5 $ 288.9
Capital appreciation paid on Series B-1 interests
in GMC (a) - (8.0)
----------------------------------------------------------------------
Net earnings for basic and diluted EPS
calculations $ 278.5 $ 280.9
----------------------------------------------------------------------
Average number of common shares - basic EPS 336.4 329.9
Incremental share effect from:
Stock options 11.2 11.0
Restricted stock, restricted stock units, and
other 2.9 2.6
Forward purchase contract (b) - 1.4
----------------------------------------------------------------------
Average number of common shares - diluted EPS 350.5 344.9
----------------------------------------------------------------------
----------------------------------------------------------------------
Earnings per share - basic $ 0.83 $ 0.85
Earnings per share - diluted $ 0.79 $ 0.81
----------------------------------------------------------------------
(a) On August 7, 2007, we repurchased all of the Series B-1 limited
membership interests in General Mills Cereals, LLC for $843
million, of which $8 million related to capital appreciation
paid to the third party holders of the interests and reduced
net earnings available to common stockholders in our basic and
diluted earnings per share calculations.
(b) On October 15, 2007, we settled a forward purchase contract with
Lehman Brothers by issuing 14.3 million shares of common stock
in exchange for $750 million.
(6) The effective tax rate for the first quarter of fiscal 2009 was
34.9 percent compared to 32.8 percent for the first quarter of
fiscal 2008. The 2.1 percentage point increase in the effective
tax rate is primarily due to a 1.7 percentage point reduction in
benefits from foreign tax credits.
(7) We have included three measures in this release that are not
defined by generally accepted accounting principles: (1) diluted
earnings per share excluding mark-to-market valuation of certain
commodity positions ("mark-to-market effects"), (2) earnings
comparisons as a percent of net sales excluding mark-to-market
effects, and (3) total segment operating profit. We believe that
these measures provide useful supplemental information to assess
our operating performance. These measures should be viewed in
addition to, and not in lieu of, our diluted earnings per share
and operating performance measures as calculated in accordance
with GAAP.
Quarter Ended
-------------------
Aug. 24, Aug. 26,
Per Share Data 2008 2007
----------------------------------------------------------------------
Diluted earnings per share, as reported $ 0.79 $ 0.81
Less: mark-to-market effects (a) (0.17) -
----------------------------------------------------------------------
Diluted earnings per share, excluding mark-to-
market effects $ 0.96 $ 0.81
----------------------------------------------------------------------
(a) See Note 2.
Key operating performance measures, excluding impact of
mark-to-market effects, as a percent of net sales are reconciled below
to the measures as reported in accordance with GAAP.
Quarter Ended
-----------------------------------------
Aug. 24, 2008 Aug. 26, 2007
------------------- --------------------
Comparisons as a %
of Net Sales
Excluding Mark-
to-Market Percent of Percent of Basis Pt
Effects Value Net Sales Value Net Sales Change
----------------------------------------------------------------------
Gross margin as
reported (a) $1,191.7 34.1 % $1,156.2 37.6 % (350)
Less: mark-to-
market effects (91.4) (2.6) (0.6) (0.1) (250)
----------------------------------------------------------------------
Adjusted gross
margin 1,283.1 36.7 1,156.8 37.7 (100)
Operating profit
as reported 469.6 13.4 510.1 16.6 (320)
Less: mark-to-
market effects (91.4) (2.6) (0.6) - (260)
----------------------------------------------------------------------
Adjusted operating
profit 561.0 16.0 510.7 16.6 (60)
Net earnings as
reported 278.5 8.0 288.9 9.4 (140)
Less: mark-to-
market effects,
net of tax (57.6) (1.6) (0.4) - (160)
----------------------------------------------------------------------
Adjusted net
earnings $ 336.1 9.6 % $ 289.3 9.4 % 20
----------------------------------------------------------------------
(a) Net sales less cost of sales.
A reconciliation of total segment operating profit to the relevant
GAAP measure, operating profit, is included in the Statements of
Operating Segment Results.
CONTACT: General Mills
Analysts:
Kris Wenker, 763-764-2607
or
Media:
Tom Forsythe, 763-764-6364
SOURCE: General Mills
