MINNEAPOLIS, Dec. 17, 2014 /PRNewswire/ -- General Mills
(NYSE: GIS) today reported results for the second quarter of fiscal
2015.
Second Quarter Results Summary
- Net sales for the 13 weeks ended
Nov. 23, 2014, totaled $4.71 billion, down 3 percent from last year's
second quarter results. On a constant-currency basis, quarterly net
sales declined 1 percent.
- Segment operating profit totaled
$847 million, down 8 percent. In
constant currency, segment operating profit declined 6
percent.
- Diluted earnings per share (EPS) totaled
56 cents compared to 84 cents in last year's second quarter.
- Adjusted diluted EPS, which excludes
certain items affecting comparability of results, totaled
80 cents in the second quarter of
2015 compared to 83 cents in last
year's second quarter. On a constant-currency basis, adjusted
diluted EPS essentially matched prior-year results.
Constant-currency net sales, total and constant-currency
segment operating profit, adjusted diluted EPS and adjusted diluted
EPS in constant currency are each non-GAAP measures. Please
see Note 8 to the Consolidated Financial Statements below for
reconciliation of these measures to the relevant GAAP
measures.
General Mills Chairman and Chief Executive Officer Ken Powell said, "Second-quarter results were
broadly in line with the updated outlook we provided in early
November. Net sales declined for the quarter as anticipated,
reflecting continued weak food-industry trends in the U.S. and
slowing growth in key emerging markets. Adjusted diluted EPS
came in slightly better than our estimate, primarily due to
differences in expense timing. These quarterly results keep
us on track to achieve the full-year fiscal 2015 targets announced
last month."
Second-quarter net sales of $4.71
billion were 3 percent below year-ago results. Foreign
currency exchange reduced net sales growth by 2 percentage
points. Pound volume subtracted 2 points of net sales growth,
and net price realization and mix contributed 1 point of
growth. Gross margin was below year-ago levels reflecting the
lower net sales and product mix. Advertising and media
expense declined 9 percent. Segment operating profit totaled
$847 million, down 8 percent from
year-ago results. General Mills recorded restructuring
charges totaling $233 million pretax
in the second quarter, including $19
million recorded in cost of sales. (Please see the
Corporate Items section below for more information on restructuring
actions.) Second-quarter net earnings attributable to
General Mills totaled $346 million
and diluted earnings per share (EPS) totaled 56 cents. Adjusted diluted EPS, which
excludes restructuring expenses and certain other items affecting
comparability, totaled 80 cents this
year compared to 83 cents a year
ago. Foreign currency exchange reduced 2015 second-quarter
earnings per share by 3 cents.
Six Month Financial Summary
- Net sales through the first six months of
fiscal 2015 declined 3 percent to $8.98
billion. On a constant-currency basis, net sales declined 1
percent.
- First-half segment operating profit
totaled $1.54 billion, down 11
percent as reported and down 10 percent in constant
currency.
- Diluted EPS totaled $1.11 compared to $1.54 in last year's first half.
- First-half adjusted diluted EPS totaled
$1.41 this year compared to
$1.53 a year ago. Foreign currency
exchange reduced fiscal 2015 first half EPS by 3 cents.
Following a first quarter where year-to-year differences in
merchandising expense depressed reported net sales and gross
margin, results improved in the second quarter. Through the
first six months, U.S. Retail segment dollar market shares
increased in categories representing 68 percent of the company's
sales volume in Nielsen-measured outlets. U.S. Retail
products making particularly strong contributions to first-half net
sales results included Yoplait Original Style and Greek yogurt
varieties, Fiber One cookies and Fiber One Streusel snack bars,
Nature Valley breakfast biscuits, Cinnamon Toast Crunch and
Cheerios Protein cereals; and Chex gluten-free oatmeal. In
the Convenience Stores and Foodservice segment, Yoplait GoGurt and
Parfait Pro yogurt varieties, Nature Valley snacks, and bowlpack
cereals were strong net sales contributors.
International products posting strong first-half sales
contributions included Old El Paso taco shells and dinner kits in
Europe and Australia, Haagen Dazs Triple Sensations ice
cream varieties in Europe and
Asia, and Nature Valley snacks in
Canada.
U. S. Retail Segment Results
Second-quarter net sales for General Mills' U.S. Retail segment
totaled $2.86 billion, down 4 percent
from prior-year results. Lower pound volume subtracted 3
points of net sales growth, and unfavorable net price realization
and mix subtracted 1 point of growth. During the quarter, the
U.S. Retail businesses were realigned into five operating
units. The Snacks and Yogurt operating units posted net sales
gains for the quarter, while sales for the Cereal, Baking Products
and Meals units declined. Advertising and media expense was
10 percent below year-ago levels. Segment operating profit
totaled $616 million, down 10 percent
primarily due to the net sales decline.
Through the first six months, U.S. Retail net sales totaled
$5.31 billion, 4 percent below
prior-year results. Lower pound volume subtracted 3 points of
net sales growth and unfavorable net price realization and mix
subtracted 1 point of growth. Segment operating profit
totaled $1.07 billion, 17 percent
below last year.
International Segment Summary
Second-quarter net sales for General Mills' consolidated
international businesses decreased 6 percent to $1.32 billion. Pound volume matched
year-ago levels, and favorable net price realization and mix
contributed 3 points of net sales growth. Foreign currency
exchange reduced net sales growth by 9 percentage points. On
a constant-currency basis, International segment net sales grew 3
percent overall, with gains of 4 percent in Europe, 2 percent in the Asia / Pacific region and 14 percent in Latin
America. These gains were partially offset by a 7 percent net
sales decline in Canada that
reflected business disruption caused by a fire at a
co-packer. Advertising and media expense declined 5
percent. Segment operating profit totaled $134 million, down 12 percent as reported and
down 2 percent in constant currency. (Please see Note 8 for
reconciliation of non-GAAP measures.)
Through the first six months of fiscal 2015, International
segment net sales totaled $2.67
billion, down 2 percent. Foreign currency exchange
reduced net sales growth by 7 percentage points. On a
constant-currency basis, net sales grew 5 percent reflecting
favorable net price realization and mix. Pound volume
essentially matched prior-year levels. Six-month segment
operating profit totaled $280
million, up 1 percent as reported and up 7 percent in
constant-currency. (Please see Note 8.)
Convenience Stores and Foodservice
Second-quarter net sales for the Convenience Stores and
Foodservice segment grew 4 percent to reach $530 million. Net price realization and mix
contributed 5 points of net sales growth. Pound volume was 1
percent below year-ago levels. Yogurt, snacks, cereal and
frozen breakfast items led sales performance in the quarter.
Segment operating profit grew 13 percent to $96 million.
Through the first half of 2015, Convenience Stores and
Foodservice net sales grew 3 percent to $1.00 billion. Net price realization and
mix contributed 4 points of net sales growth, while pound volume
reduced sales growth by 1 point. Six-month segment operating
profit increased 15 percent to $184
million.
Joint Venture Summary
Combined after-tax earnings from the Cereal Partners Worldwide
(CPW) and Haagen-Dazs Japan (HDJ) joint ventures totaled
$27 million, up 4 percent.
Constant-currency after-tax earnings from joint ventures grew 13
percent. (Please see Note 8 below for reconciliation of
this non-GAAP measure). Constant-currency net sales grew
5 percent for HDJ and declined 3 percent for CPW. Through the
first six months of 2015, after-tax joint-venture earnings totaled
$53 million, up 6 percent as reported
and up 9 percent in constant currency.
Corporate Items
Unallocated corporate items totaled $73
million net expense in the second quarter of fiscal 2015,
compared to $49 million net expense a
year earlier. Excluding mark-to-market valuation effects and
restructuring costs in both years, unallocated corporate items
totaled $49 million net expense this
year compared to $70 million net
expense a year ago.
General Mills recorded restructuring, impairment and other exit
costs totaling $215 million pretax
during the second quarter. An additional $19 million of restructuring expense was recorded
in cost of sales.
Net interest expense rose 13 percent to $77 million in the second quarter, reflecting
increased debt due in part to the acquisition of Annie's completed
on Oct. 21, 2014. The effective
tax rate was 31.8 percent in this year's second quarter.
Excluding items affecting comparability, the adjusted effective tax
rate was 33.5 percent for the second quarter and 33.0 percent for
the first half of 2015. (Please see Note 8 for reconciliation of
this non-GAAP measure.)
Cash Flow Items
Cash provided by operating activities totaled $863 million through the first six months of
2015, down from the prior year primarily due to increased cash use
from changes in working capital and lower net earnings. Cash
payments related to restructuring actions totaled $10 million through the first half of 2015.
Capital investments through the first six months totaled
$318 million. Dividends paid
year-to-date rose to $503
million.
During the first half of 2015, General Mills repurchased nearly
19 million shares of common stock for an aggregate purchase price
of $969 million. The average number
of diluted shares outstanding decreased by 31 million during the
first half, reflecting the impact of repurchase activity during
both fiscal 2014 and 2015.
Outlook
Powell said, "The operating environment remains challenging but,
as we move into the second half of our fiscal year, we expect to
renew sales and profit growth." The company's second-half
marketing plans include a strong line-up of new product
introductions worldwide, along with product news on many key
established brands. Savings from the company's ongoing
Holistic Margin Management (HMM) program are targeted to exceed
$400 million in fiscal 2015, and
several incremental cost-reduction actions launched this year are
expected to contribute to margin improvement in the second
half. The company said these initiatives to streamline its
North American supply chain network and reduce overhead costs are
on track to generate $40 million in
cost savings in the second half of fiscal 2015.
Cumulative annual savings from these efforts are expected to total
between $260 and $280 million in
fiscal 2016, and exceed $350 million
in fiscal 2017.
General Mills reaffirmed its fiscal 2015 full-year
targets. Net sales in constant currency are expected to grow
at a low single-digit rate from the 2014 base of $17.9 billion. This includes an estimated 2
points of sales growth from the 53rd week in fiscal 2015
and approximately $120 million of
incremental sales from the Annie's acquisition. Total segment
operating profit in constant currency is expected to decline at a
low single-digit rate from prior-year results of $3.15 billion. Fiscal 2015 adjusted diluted
earnings per share (which excludes mark-to-market valuation
effects, currency devaluation and restructuring costs) are expected
to grow at a low-single-digit rate in constant currency from the
base of $2.82 earned in fiscal
2014. At current exchange rates the company estimates a
5-cent EPS headwind from currency
translation in 2015.
General Mills will hold a briefing for investors today,
December 17, 2014, beginning at
8:30 a.m. Eastern time. You may
access the web cast from General Mills' internet home page:
generalmills.com.
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
that are based on our current expectations and assumptions. These
forward-looking statements, including the statements under the
caption "Outlook," and statements made by Mr. Powell, are subject
to certain risks and uncertainties that could cause actual results
to differ materially from the potential results discussed in the
forward-looking statements. In particular, our predictions about
future net sales and earnings could be affected by a variety of
factors, including: competitive dynamics in the consumer foods
industry and the markets for our products, including new product
introductions, advertising activities, pricing actions, and
promotional activities of our competitors; economic conditions,
including changes in inflation rates, interest rates, tax rates, or
the availability of capital; product development and innovation;
consumer acceptance of new products and product improvements;
consumer reaction to pricing actions and changes in promotion
levels; acquisitions or dispositions of businesses or assets;
changes in capital structure; changes in the legal and regulatory
environment, including labeling and advertising regulations and
litigation; impairments in the carrying value of goodwill, other
intangible assets, or other long-lived assets, or changes in the
useful lives of other intangible assets; changes in accounting
standards and the impact of significant accounting estimates;
product quality and safety issues, including recalls and product
liability; changes in consumer demand for our products;
effectiveness of advertising, marketing, and promotional programs;
changes in consumer behavior, trends, and preferences, including
weight loss trends; consumer perception of health-related issues,
including obesity; consolidation in the retail environment; changes
in purchasing and inventory levels of significant customers;
fluctuations in the cost and availability of supply chain
resources, including raw materials, packaging, and energy;
disruptions or inefficiencies in the supply chain; volatility in
the market value of derivatives used to manage price risk for
certain commodities; benefit plan expenses due to changes in plan
asset values and discount rates used to determine plan liabilities;
failure or breach of our information technology systems; foreign
economic conditions, including currency rate fluctuations; and
political unrest in foreign markets and economic uncertainty due to
terrorism or war. The company undertakes no obligation to publicly
revise any forward-looking statement to reflect any future events
or circumstances.
Consolidated
Statements of Earnings and Supplementary Information
|
GENERAL MILLS, INC.
AND SUBSIDIARIES
|
(Unaudited) (In
Millions, Except per Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Six-Month Period
Ended
|
|
|
Nov.
23,
2014
|
|
|
Nov.
24,
2013
|
|
%
Change
|
|
|
Nov.
23,
2014
|
|
|
Nov.
24,
2013
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
4,712.2
|
|
$
|
4,875.7
|
|
(3.4)
|
%
|
|
$
|
8,980.6
|
|
$
|
9,248.4
|
|
(2.9)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
3,093.1
|
|
|
3,114.0
|
|
(0.7)
|
%
|
|
|
5,922.8
|
|
|
5,873.7
|
|
0.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general, and administrative expenses
|
|
845.5
|
|
|
890.9
|
|
(5.1)
|
%
|
|
|
1,712.7
|
|
|
1,766.3
|
|
(3.0)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
impairment, and other
exit
costs
|
|
214.6
|
|
|
0.7
|
|
NM
|
|
|
|
228.6
|
|
|
3.5
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
559.0
|
|
|
870.1
|
|
(35.8)
|
%
|
|
|
1,116.5
|
|
|
1,604.9
|
|
(30.4)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest,
net
|
|
77.3
|
|
|
68.7
|
|
12.5
|
%
|
|
|
155.8
|
|
|
147.5
|
|
5.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before
income taxes and after-tax
earnings from
joint ventures
|
|
481.7
|
|
|
801.4
|
|
(39.9)
|
%
|
|
|
960.7
|
|
|
1,457.4
|
|
(34.1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
153.4
|
|
|
266.7
|
|
(42.5)
|
%
|
|
|
306.0
|
|
|
478.7
|
|
(36.1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After-tax earnings
from joint ventures
|
|
27.1
|
|
|
26.1
|
|
3.8
|
%
|
|
|
53.1
|
|
|
50.2
|
|
5.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings,
including earnings attributable
to redeemable
and noncontrolling interests
|
|
355.4
|
|
|
560.8
|
|
(36.6)
|
%
|
|
|
707.8
|
|
|
1,028.9
|
|
(31.2)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to redeemable
and
noncontrolling interests
|
|
9.3
|
|
|
10.9
|
|
NM
|
|
|
|
16.5
|
|
|
19.7
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to General Mills
|
$
|
346.1
|
|
$
|
549.9
|
|
(37.1)
|
%
|
|
$
|
691.3
|
|
$
|
1,009.2
|
|
(31.5)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
$
|
0.58
|
|
$
|
0.87
|
|
(33.3)
|
%
|
|
$
|
1.14
|
|
$
|
1.58
|
|
(27.8)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
diluted
|
$
|
0.56
|
|
$
|
0.84
|
|
(33.3)
|
%
|
|
$
|
1.11
|
|
$
|
1.54
|
|
(27.9)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per
share
|
$
|
0.41
|
|
$
|
0.38
|
|
7.9
|
%
|
|
$
|
0.82
|
|
$
|
0.76
|
|
7.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
Six-Month Period
Ended
|
Comparisons as a % of
net sales:
|
|
Nov.
23,
2014
|
|
|
Nov.
24,
2013
|
|
Basis
Pt
Change
|
|
|
|
Nov.
23,
2014
|
|
|
Nov.
24,
2013
|
|
Basis
Pt
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
34.4%
|
|
|
36.1%
|
|
(170)
|
|
|
|
34.1%
|
|
|
36.5%
|
|
(240)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general, and administrative expenses
|
|
18.0%
|
|
|
18.3%
|
|
(30)
|
|
|
|
19.1%
|
|
|
19.1%
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
11.9%
|
|
|
17.8%
|
|
(590)
|
|
|
|
12.4%
|
|
|
17.4%
|
|
(500)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to General Mills
|
|
7.4%
|
|
|
11.3%
|
|
(390)
|
|
|
|
7.7%
|
|
|
10.9%
|
|
(320)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
Six-Month Period
Ended
|
Comparisons as a % of
net sales excluding
certain items
affecting comparability (a):
|
|
Nov.
23,
2014
|
|
|
Nov.
24,
2013
|
|
Basis
Pt
Change
|
|
|
|
Nov.
23,
2014
|
|
|
Nov.
24,
2013
|
|
Basis
Pt
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
34.9%
|
|
|
35.7%
|
|
(80)
|
|
|
|
34.9%
|
|
|
36.3%
|
|
(140)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
17.0%
|
|
|
17.4%
|
|
(40)
|
|
|
|
15.8%
|
|
|
17.2%
|
|
(140)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to General Mills
|
|
10.6%
|
|
|
11.0%
|
|
(30)
|
|
|
|
9.8%
|
|
|
10.8%
|
|
(100)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) See Note 8 for a
reconciliation of this measure not defined by generally accepted
accounting principles (GAAP).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying
notes to consolidated financial statements.
|
|
|
|
|
|
|
|
|
|
|
Operating Segment
Results and Supplementary Information
|
|
|
|
|
GENERAL MILLS, INC.
AND SUBSIDIARIES
|
|
|
|
|
(Unaudited) (In
Millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
Six-Month Period
Ended
|
|
|
Fiscal
Year
|
|
|
Nov.
23,
2014
|
|
|
Nov.
24,
2013
|
|
%
Change
|
|
|
|
Nov.
23,
2014
|
|
|
Nov.
24,
2013
|
|
%
Change
|
|
|
2014
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Retail
|
$
|
2,861.6
|
|
$
|
2,965.4
|
|
(3.5)
|
%
|
|
$
|
5,305.9
|
|
$
|
5,549.5
|
|
(4.4)
|
%
|
|
$
|
10,604.9
|
International
|
|
1,321.1
|
|
|
1,403.3
|
|
(5.9)
|
%
|
|
|
2,672.2
|
|
|
2,724.1
|
|
(1.9)
|
%
|
|
|
5,385.9
|
Convenience
Stores and Foodservice
|
|
529.5
|
|
|
507.0
|
|
4.4
|
%
|
|
|
1,002.5
|
|
|
974.8
|
|
2.8
|
%
|
|
|
1,918.8
|
Total
|
$
|
4,712.2
|
|
$
|
4,875.7
|
|
(3.4)
|
%
|
|
$
|
8,980.6
|
|
$
|
9,248.4
|
|
(2.9)
|
%
|
|
$
|
17,909.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Retail
|
$
|
616.1
|
|
$
|
681.6
|
|
(9.6)
|
%
|
|
$
|
1,073.3
|
|
$
|
1,293.5
|
|
(17.0)
|
%
|
|
$
|
2,311.5
|
International
|
|
134.3
|
|
|
153.2
|
|
(12.3)
|
%
|
|
|
280.3
|
|
|
278.8
|
|
0.5
|
%
|
|
|
535.1
|
Convenience
Stores and Foodservice
|
|
96.2
|
|
|
84.9
|
|
13.3
|
%
|
|
|
183.5
|
|
|
159.0
|
|
15.4
|
%
|
|
|
307.3
|
Total segment
operating profit
|
|
846.6
|
|
|
919.7
|
|
(8.0)
|
%
|
|
|
1,537.1
|
|
|
1,731.3
|
|
(11.2)
|
%
|
|
|
3,153.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated corporate
items
|
|
73.0
|
|
|
48.9
|
|
49.3
|
|
|
|
192.0
|
|
|
122.9
|
|
56.2
|
%
|
|
|
196.2
|
Divestiture
(gain)
|
|
-
|
|
|
-
|
|
NM
|
|
|
|
-
|
|
|
-
|
|
NM
|
|
|
|
(65.5)
|
Restructuring,
impairment, and
other exit
costs
|
|
214.6
|
|
|
0.7
|
|
NM
|
|
|
|
228.6
|
|
|
3.5
|
|
NM
|
|
|
|
3.6
|
Venezuela currency
devaluation
|
|
-
|
|
|
-
|
|
NM
|
|
|
|
-
|
|
|
-
|
|
NM
|
|
|
|
62.2
|
Operating
profit
|
$
|
559.0
|
|
$
|
870.1
|
|
(35.8)
|
%
|
|
$
|
1,116.5
|
|
$
|
1,604.9
|
|
(30.4)
|
%
|
|
$
|
2,957.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
Six-Month Period
Ended
|
|
|
|
|
|
Nov.
23,
2014
|
|
|
Nov.
24,
2013
|
|
Basis
Pt
Change
|
|
|
|
Nov.
23,
2014
|
|
|
Nov.
24,
2013
|
|
Basis
Pt
Change
|
|
|
|
|
Segment operating
profit as a
% of net
sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Retail
|
|
21.5%
|
|
|
23.0%
|
|
(150)
|
|
|
|
20.2%
|
|
|
23.3%
|
|
(310)
|
|
|
|
|
International
|
|
10.2%
|
|
|
10.9%
|
|
(70)
|
|
|
|
10.5%
|
|
|
10.2%
|
|
30
|
|
|
|
|
Convenience
Stores and Foodservice
|
|
18.2%
|
|
|
16.7%
|
|
150
|
|
|
|
18.3%
|
|
|
16.3%
|
|
200
|
|
|
|
|
Total segment
operating profit
|
|
18.0%
|
|
|
18.9%
|
|
(90)
|
|
|
|
17.1%
|
|
|
18.7%
|
|
(160)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying
notes to consolidated financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Balance Sheets
|
GENERAL MILLS, INC.
AND SUBSIDIARIES
|
(In Millions, Except
Par Value)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nov.
23,
2014
|
|
|
Nov.
24,
2013
|
|
|
May
25,
2014
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
$
|
894.5
|
|
$
|
774.2
|
|
$
|
867.3
|
Receivables
|
|
|
1,705.8
|
|
|
1,725.5
|
|
|
1,483.6
|
Inventories
|
|
|
1,893.4
|
|
|
1,752.3
|
|
|
1,559.4
|
Deferred
income taxes
|
|
|
98.5
|
|
|
110.8
|
|
|
74.1
|
Prepaid
expenses and other current assets
|
|
|
394.2
|
|
|
413.0
|
|
|
409.1
|
|
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
|
4,986.4
|
|
|
4,775.8
|
|
|
4,393.5
|
|
|
|
|
|
|
|
|
|
|
Land, buildings, and
equipment
|
|
|
3,824.2
|
|
|
3,809.0
|
|
|
3,941.9
|
Goodwill
|
|
|
9,078.7
|
|
|
8,646.5
|
|
|
8,650.5
|
Other intangible
assets
|
|
|
5,127.9
|
|
|
5,020.4
|
|
|
5,014.3
|
Other
assets
|
|
|
1,186.5
|
|
|
900.4
|
|
|
1,145.5
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
24,203.7
|
|
$
|
23,152.1
|
|
$
|
23,145.7
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
1,656.7
|
|
$
|
1,424.1
|
|
$
|
1,611.3
|
Current
portion of long-term debt
|
|
|
750.7
|
|
|
852.8
|
|
|
1,250.6
|
Notes
payable
|
|
|
2,071.4
|
|
|
1,051.3
|
|
|
1,111.7
|
Other
current liabilities
|
|
|
1,614.9
|
|
|
1,661.9
|
|
|
1,449.9
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
6,093.7
|
|
|
4,990.1
|
|
|
5,423.5
|
|
|
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
7,713.1
|
|
|
6,740.6
|
|
|
6,423.5
|
Deferred income
taxes
|
|
|
1,761.5
|
|
|
1,450.3
|
|
|
1,666.0
|
Other
liabilities
|
|
|
1,623.8
|
|
|
1,874.2
|
|
|
1,643.2
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
17,192.1
|
|
|
15,055.2
|
|
|
15,156.2
|
|
|
|
|
|
|
|
|
|
|
Redeemable
interest
|
|
|
901.4
|
|
|
1,010.4
|
|
|
984.1
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock, 754.6 shares issued, $0.10 par value
|
|
|
75.5
|
|
|
75.5
|
|
|
75.5
|
Additional paid-in capital
|
|
|
1,260.3
|
|
|
1,164.2
|
|
|
1,231.8
|
Retained
earnings
|
|
|
11,975.3
|
|
|
11,465.5
|
|
|
11,787.2
|
Common
stock in treasury, at cost,
shares of 157.9, 128.2 and 142.3
|
|
|
(6,079.2)
|
|
|
(4,465.1)
|
|
|
(5,219.4)
|
Accumulated other comprehensive loss
|
|
|
(1,559.6)
|
|
|
(1,606.7)
|
|
|
(1,340.3)
|
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
|
5,672.3
|
|
|
6,633.4
|
|
|
6,534.8
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling
interests
|
|
|
437.9
|
|
|
453.1
|
|
|
470.6
|
|
|
|
|
|
|
|
|
|
|
Total
equity
|
|
|
6,110.2
|
|
|
7,086.5
|
|
|
7,005.4
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
equity
|
|
$
|
24,203.7
|
|
$
|
23,152.1
|
|
$
|
23,145.7
|
|
|
|
|
|
|
|
|
|
|
See accompanying
notes to consolidated financial statements.
|
|
|
|
|
|
|
Consolidated
Statements of Cash Flows
|
GENERAL MILLS, INC.
AND SUBSIDIARIES
|
(Unaudited) (In
Millions)
|
|
Six-Month Period
Ended
|
|
|
Nov.
23,
2014
|
|
|
Nov.
24,
2013
|
Cash Flows -
Operating Activities
|
|
|
|
|
|
Net
earnings, including earnings attributable to redeemable
|
|
|
|
|
|
and noncontrolling interests
|
$
|
707.8
|
|
$
|
1,028.9
|
Adjustments to reconcile net earnings to net cash
|
|
|
|
|
|
provided by operating activities:
|
|
|
|
|
|
Depreciation and amortization
|
|
290.4
|
|
|
297.6
|
After-tax earnings from joint ventures
|
|
(53.1)
|
|
|
(50.2)
|
Distributions of earnings from joint ventures
|
|
28.9
|
|
|
25.6
|
Stock-based compensation
|
|
64.9
|
|
|
64.6
|
Deferred income taxes
|
|
13.2
|
|
|
67.9
|
Tax
benefit on exercised options
|
|
(26.8)
|
|
|
(39.5)
|
Pension and other postretirement benefit plan
contributions
|
|
(24.4)
|
|
|
(24.7)
|
Pension and other postretirement benefit plan costs
|
|
46.0
|
|
|
62.3
|
Restructuring, impairment, and other exit costs
|
|
236.6
|
|
|
(11.1)
|
Changes in current assets and liabilities,
|
|
|
|
|
|
excluding the effects of acquisitions
|
|
(414.4)
|
|
|
(338.9)
|
Other, net
|
|
(5.9)
|
|
|
(73.6)
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
863.2
|
|
|
1,008.9
|
|
|
|
|
|
|
Cash Flows -
Investing Activities
|
|
|
|
|
|
Purchases of land, buildings, and equipment
|
|
(317.6)
|
|
|
(268.8)
|
Acquisitions, net of cash acquired
|
|
(822.3)
|
|
|
-
|
Investments in affiliates, net
|
|
(32.3)
|
|
|
(46.9)
|
Proceeds
from disposal of land, buildings, and equipment
|
|
1.1
|
|
|
1.0
|
Other,
net
|
|
(0.1)
|
|
|
(2.7)
|
|
|
|
|
|
|
Net cash used by investing activities
|
|
(1,171.2)
|
|
|
(317.4)
|
|
|
|
|
|
|
Cash Flows -
Financing Activities
|
|
|
|
|
|
Change
in notes payable
|
|
922.3
|
|
|
455.1
|
Issuance
of long-term debt
|
|
1,274.5
|
|
|
923.0
|
Payment
of long-term debt
|
|
(393.3)
|
|
|
(720.3)
|
Proceeds
from common stock issued on exercised options
|
|
35.9
|
|
|
27.5
|
Tax
benefit on exercised options
|
|
26.8
|
|
|
39.5
|
Purchases of common stock for treasury
|
|
(968.8)
|
|
|
(863.9)
|
Dividends paid
|
|
(503.2)
|
|
|
(489.8)
|
Distributions to noncontrolling and redeemable interest
holders
|
|
(20.5)
|
|
|
(24.6)
|
Other,
net
|
|
(4.0)
|
|
|
(0.7)
|
|
|
|
|
|
|
Net cash provided (used) by financing activities
|
|
369.7
|
|
|
(654.2)
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
(34.5)
|
|
|
(4.5)
|
Increase in cash and
cash equivalents
|
|
27.2
|
|
|
32.8
|
Cash and cash
equivalents - beginning of year
|
|
867.3
|
|
|
741.4
|
|
|
|
|
|
|
Cash and cash
equivalents - end of period
|
$
|
894.5
|
|
$
|
774.2
|
|
|
|
|
|
|
Cash Flow from
Changes in Current Assets and Liabilities,
excluding the
effects of acquisitions:
|
|
|
|
|
|
Receivables
|
$
|
(248.8)
|
|
$
|
(277.1)
|
Inventories
|
|
(309.6)
|
|
|
(214.4)
|
Prepaid
expenses and other current assets
|
|
(6.6)
|
|
|
53.1
|
Accounts
payable
|
|
139.7
|
|
|
38.9
|
Other
current liabilities
|
|
10.9
|
|
|
60.6
|
|
|
|
|
|
|
Changes in current
assets and liabilities
|
$
|
(414.4)
|
|
$
|
(338.9)
|
See accompanying
notes to consolidated financial statements.
|
|
|
|
|
|
GENERAL MILLS, INC.
AND SUBSIDIARIES
|
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
|
(Unaudited)
|
|
|
|
(1)
|
The accompanying
Consolidated Financial Statements of General Mills, Inc. (we, us,
our, General Mills, or the Company) have been prepared in
accordance with accounting principles generally accepted in the
United States for annual and interim financial information. In the
opinion of management, all adjustments considered necessary for a
fair presentation have been included and are of a normal recurring
nature.
|
|
|
|
Beginning in the
first quarter of fiscal 2015, we have changed how we assess
operating segment performance to exclude the asset and liability
remeasurement impact of hyperinflationary economies. This impact is
now included in unallocated corporate items. All periods presented
have been changed to conform to this presentation.
|
|
|
(2)
|
Beginning with the
second quarter of fiscal 2015, we realigned certain operating units
within our U.S. Retail operating segment. We also changed the name
of our Yoplait operating unit to Yogurt and our Big G operating
unit to Cereal. Frozen Foods transitioned into Meals and Baking
Products. Small Planet Foods transitioned into Snacks, Cereal, and
Meals. Yogurt was unchanged. We revised the amounts previously
reported in the net sales percentage change by operating unit
within our U.S. Retail segment. These realignments had no effect on
previously reported consolidated net sales, operating segments' net
sales, operating profit, segment operating profit, net earnings
attributable to General Mills or earnings per share.
|
|
|
(3)
|
On October 21,
2014, we acquired Annie's, Inc. (Annie's), a publically traded food
company headquartered in Berkeley, California, for an aggregate
purchase price of $821.2 million, which we funded by issuing debt.
We consolidated Annie's into our Consolidated Balance Sheets and
recorded goodwill of $589.8 million, an indefinite lived intangible
asset for the Annie's brand of $244.5 million and a finite
lived customer relationship asset of $23.9 million. The pro forma
effects of this acquisition were not material.
|
|
|
(4)
|
We are currently
pursuing several multi-year restructuring initiatives designed to
increase our efficiency and focus our business behind our key
growth strategies. Charges related to these activities were as
follows:
|
|
|
Quarter
Ended
|
|
|
Six-Month
Period
Ended
|
In
Millions
|
|
Nov.
23, 2014
|
|
Nov.
24, 2013
|
|
|
Nov. 23,
2014
|
|
Nov. 24,
2013
|
Cost of
sales
|
$
|
18.6
|
$
|
-
|
|
$
|
18.6
|
$
|
-
|
Restructuring,
impairment, and other exit costs
|
|
214.6
|
|
0.7
|
|
|
228.6
|
|
3.5
|
Total
|
$
|
233.2
|
$
|
0.7
|
|
$
|
247.2
|
$
|
3.5
|
|
During the second
quarter of fiscal 2015, we approved Project Catalyst, a
restructuring plan to increase organizational effectiveness and
reduce overhead expense. In connection with this project, we expect
to eliminate approximately 700 to 800 positions primarily in the
United States. We expect to incur approximately $160 million of net
expenses relating to these actions of which approximately $123
million will be cash. We expect these actions to be largely
completed by the end of fiscal 2015.
|
|
|
|
Project Century is a
review of our North American manufacturing and distribution network
to streamline operations and identify potential capacity reductions
which we expect to complete by the end of fiscal 2017. During the
second quarter of fiscal 2015, we approved a restructuring plan to
consolidate yogurt manufacturing capacity and exit our Methuen, MA
facility in our U.S. Retail and Convenience Stores and Foodservice
supply chains as part of Project Century. This action will
affect approximately 250 positions. We expect to incur
approximately $65 million of net expenses relating to this action
of which approximately $17 million will be cash. We expect
this action to be completed by the end of fiscal 2016.
|
|
|
|
Also as part of
Project Century, during the second quarter of fiscal 2015, we
approved a restructuring plan to eliminate excess cereal and dry
mix capacity and exit our Lodi, CA facility in our U.S. Retail
supply chain. This action will affect approximately 430
positions. We expect to incur approximately $123 million of net
expenses relating to this action of which approximately $24 million
will be cash. We expect this action to be completed by the end of
fiscal 2016.
|
|
|
|
During the first
quarter of fiscal 2015, we approved a plan to combine certain
Yoplait and General Mills operational facilities within our
International segment to increase efficiencies and reduce
costs. This action will affect approximately 240
positions. We expect to incur approximately $15 million of net
expenses relating to this action of which approximately $14 million
will be cash. We expect this action to be completed in fiscal
2016.
|
|
|
(5)
|
For the second
quarter of fiscal 2015, unallocated corporate expense totaled $73
million compared to $49 million in the same period last year. We
recorded a $5 million net increase in expense related to the
mark-to-market valuations of certain commodity positions and grain
inventories in the second quarter of fiscal 2015, compared to a $21
million net decrease in expense in the second quarter of fiscal
2014.
|
|
|
|
For the six-month
period ended November 23, 2014, unallocated corporate expense
totaled $192 million compared to $123 million in the same period
last year. We recorded a $54 million net increase in expense
related to the mark-to-market valuations of certain commodity
positions and grain inventories in the six-month period ended
November 23, 2014, compared to a $20 million net decrease in
expense in the six-month period ended November 24, 2013.
|
|
|
(6)
|
Basic and diluted
earnings per share (EPS) were calculated as follows:
|
|
|
Quarter
Ended
|
|
Six-Month Period
Ended
|
In Millions,
Except per Share Data
|
|
|
Nov.
23,
2014
|
|
|
Nov.
24,
2013
|
|
|
Nov.
23,
2014
|
|
|
Nov.
24,
2013
|
Net earnings
attributable to General Mills
|
|
$
|
346.1
|
|
$
|
549.9
|
|
$
|
691.3
|
|
$
|
1,009.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
common shares - basic EPS
|
|
|
602.6
|
|
|
633.2
|
|
|
607.6
|
|
|
638.1
|
Incremental share
effect from: (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
options
|
|
|
11.3
|
|
|
12.2
|
|
|
11.7
|
|
|
12.5
|
Restricted
stock, restricted stock units, and other
|
|
|
4.5
|
|
|
4.6
|
|
|
4.5
|
|
|
4.5
|
Average number of
common shares - diluted EPS
|
|
|
618.4
|
|
|
650.0
|
|
|
623.8
|
|
|
655.1
|
Earnings per share -
basic
|
|
$
|
0.58
|
|
$
|
0.87
|
|
$
|
1.14
|
|
$
|
1.58
|
Earnings per share -
diluted
|
|
$
|
0.56
|
|
$
|
0.84
|
|
$
|
1.11
|
|
$
|
1.54
|
(a) Incremental
shares from stock options and restricted stock units are computed
by the treasury stock method.
|
(7)
|
The effective tax
rate for the six-month period ended November 23, 2014 was 31.8
percent compared to 32.8 percent for the six-month period ended
November 24, 2013. The 1.0 percentage point decrease was primarily
due to favorable state audit settlements and tax law
changes.
|
|
|
(8)
|
We have included ten
measures in this release that are not defined by generally accepted
accounting principles (GAAP): (1) constant currency net sales
growth rates, (2) diluted EPS excluding mark-to-market valuation of
certain commodity positions and grain inventories ("mark-to-market
effects"), restructuring costs ("restructuring costs"), and
integration costs resulting from the acquisition of Annie's
("acquisition integration costs") (collectively, these 3 items are
referred to as "certain items affecting comparability" in this
footnote), (3) diluted EPS excluding certain items affecting
comparability growth rate on a constant currency basis, (4) total
segment operating profit, (5) constant currency total segment
operating profit growth rates, (6) constant currency International
segment operating profit growth rates, (7) constant currency
after-tax earnings from joint ventures, (8) earnings comparisons as
a percent of net sales excluding certain items affecting
comparability, (9) constant currency net sales growth rates for our
International segment in total and by region, and (10) effective
income tax rates excluding certain items affecting comparability.
We believe that these measures provide useful supplemental
information to assess our operating performance. These measures are
reconciled below to the measures as reported in accordance with
GAAP, and should be viewed in addition to, and not in lieu of, our
diluted EPS and operating performance measures as calculated in
accordance with GAAP.
|
|
|
|
Certain measures in
this release are presented excluding the impact of foreign currency
exchange. To present this information, current period results for
entities reporting in currencies other than United States dollars
are translated into United States dollars at the average exchange
rates in effect during the corresponding period of the prior fiscal
year, rather than the actual average exchange rates in effect
during the current fiscal year. Therefore, the foreign currency
impact is equal to current year results in local currencies
multiplied by the change in the average foreign currency exchange
rate between the current fiscal period and the corresponding period
of the prior fiscal year.
|
|
Constant currency net
sales growth rates follow:
|
|
|
|
|
|
Quarter Ended Nov.
23, 2014
|
|
|
|
Percentage
Change
in Net Sales
as
Reported
|
Impact of
Foreign
Currency
Exchange
|
Percentage Change
in
Net Sales
on Constant
Currency
Basis
|
|
Total Net
Sales
|
|
(3)
|
%
|
(2)
|
|
(1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Six-Month Period
Ended Nov. 23, 2014
|
|
|
|
Percentage
Change
in Net Sales
as
Reported
|
Impact of
Foreign
Currency
Exchange
|
Percentage Change
in
Net Sales on
Constant
Currency
Basis
|
|
Total Net
Sales
|
|
(3)
|
%
|
(2)
|
|
(1)
|
%
|
|
Diluted EPS excluding
certain items affecting comparability and the related constant
currency growth rates follow:
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Six-Month
Period
Ended
|
|
Fiscal
Year
|
|
|
Per Share
Data
|
|
Nov.
23,
2014
|
|
|
Nov.
24,
2013
|
Change
|
|
|
|
Nov.
23,
2014
|
|
|
Nov.
24,
2013
|
|
Change
|
|
|
|
2014
|
|
Diluted earnings per
share, as reported
|
$
|
0.56
|
|
$
|
0.84
|
(33)
|
%
|
|
$
|
1.11
|
|
$
|
1.54
|
|
(28)
|
%
|
|
$
|
2.83
|
|
Mark-to-market
effects (a)
|
|
-
|
|
|
(0.02)
|
|
|
|
|
0.05
|
|
|
(0.02)
|
|
|
|
|
|
(0.05)
|
|
Restructuring
costs (b)
|
|
0.24
|
|
|
0.01
|
|
|
|
|
0.25
|
|
|
0.01
|
|
|
|
|
|
0.01
|
|
Venezuela
currency devaluation (c)
|
|
-
|
|
|
-
|
|
|
|
|
-
|
|
|
-
|
|
|
|
|
|
0.09
|
|
Divestiture
gain, net (d)
|
|
-
|
|
|
-
|
|
|
|
|
-
|
|
|
-
|
|
|
|
|
|
(0.06)
|
|
Diluted earnings per
share, excluding
certain
items affecting
comparability (e)
|
$
|
0.80
|
|
$
|
0.83
|
(4)
|
%
|
|
$
|
1.41
|
|
$
|
1.53
|
|
(8)
|
%
|
|
$
|
2.82
|
|
Foreign currency
exchange impact
|
|
|
|
|
|
(4)
|
%
|
|
|
|
|
|
|
|
(2)
|
%
|
|
|
|
|
Diluted earnings per
share growth,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
excluding certain items affecting
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
comparability, on a constant currency
basis
|
|
|
|
|
|
Flat
|
|
|
|
|
|
|
|
|
(6)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) See Note
5.
|
|
|
|
(b) See Note
4.
|
|
|
|
(c) Impact of
remeasuring the assets and liabilities of our Venezuelan subsidiary
following currency devaluation in fiscal 2014.
|
|
|
|
(d) During the fourth
quarter of fiscal 2014, we sold certain grain elevators in our U.S.
Retail segment.
|
|
|
|
(e) Items affecting
comparability include integration costs resulting from the
acquisition of Annie's in fiscal 2015. The impact on diluted
earnings per share, excluding certain items affecting comparability
was less than $.01 for both the quarter and six-month periods ended
November 23, 2014.
|
|
|
|
A reconciliation of
total segment operating profit to the relevant GAAP measure,
operating profit, is included in the Statements of Operating
Segment Results.
|
|
|
|
Constant currency
total segment operating profit growth rates follow:
|
|
|
|
|
|
Quarter Ended Nov.
23, 2014
|
|
|
|
Percentage Change
in Total
Segment Operating
Profit as
Reported
|
Impact of
Foreign
Currency
Exchange
|
Percentage Change
in Total Segment
Operating Profit
on Constant
Currency
Basis
|
|
Total Segment
Operating Profit
|
|
(8)
|
%
|
(2)
|
pts
|
(6)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Six-Month Period
Ended Nov. 23, 2014
|
|
|
|
Percentage Change
in Total
Segment Operating
Profit as
Reported
|
Impact of
Foreign
Currency
Exchange
|
Percentage Change
in Total Segment
Operating Profit
on Constant
Currency
Basis
|
|
Total Segment
Operating Profit
|
|
(11)
|
%
|
(1)
|
pt
|
(10)
|
%
|
|
Constant currency
International segment operating profit growth rates
follow:
|
|
|
|
|
|
Quarter Ended Nov.
23, 2014
|
|
|
|
Percentage Change
in
Segment Operating
Profit as
Reported
|
Impact of
Foreign
Currency
Exchange
|
Percentage Change
in Segment
Operating Profit
on Constant
Currency
Basis
|
|
International Segment
Operating Profit
|
|
(12)
|
%
|
(10)
|
pts
|
(2)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Six-Month Period
Ended Nov. 23, 2014
|
|
|
|
Percentage Change
in
Segment Operating
Profit as
Reported
|
Impact of
Foreign
Currency
Exchange
|
Percentage Change
in Segment
Operating Profit
on Constant
Currency
Basis
|
|
International Segment
Operating Profit
|
|
1
|
%
|
(6)
|
pts
|
7
|
%
|
|
Constant currency
International net sales growth rates follow:
|
|
|
|
|
|
Quarter Ended Nov.
23, 2014
|
|
|
|
Percentage
Change in
Net
Sales
as
Reported
|
Impact of
Foreign
Currency
Exchange
|
Percentage Change
in
Net Sales on
Constant
Currency
Basis
|
|
Europe
|
|
Flat
|
|
(4)
|
pts
|
4
|
%
|
|
Canada
|
|
(13)
|
%
|
(6)
|
|
(7)
|
|
|
Asia/Pacific
|
|
1
|
|
(1)
|
|
2
|
|
|
Latin
America
|
|
(17)
|
|
(31)
|
|
14
|
|
|
Total
International
|
|
(6)
|
%
|
(9)
|
pts
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Six-Month Period
Ended Nov. 23, 2014
|
|
|
|
Percentage Change
in
Net
Sales
as Reported
(a)
|
Impact of
Foreign
Currency
Exchange
|
Percentage Change
in
Net Sales on
Constant
Currency
Basis
|
|
Europe
|
|
4
|
%
|
-
|
|
4
|
%
|
|
Canada
|
|
(10)
|
|
(6)
|
pts
|
(4)
|
|
|
Asia/Pacific
|
|
3
|
|
-
|
|
3
|
|
|
Latin
America
|
|
(11)
|
|
(28)
|
|
17
|
|
|
Total
International
|
|
(2)
|
%
|
(7)
|
pts
|
5
|
%
|
|
Constant currency
after-tax earnings from joint ventures follow:
|
|
|
|
|
|
Quarter Ended Nov.
23, 2014
|
|
|
|
Percentage Change
in After-tax
Earnings from
Joint Ventures
as
Reported
|
Impact of
Foreign
Currency
Exchange
|
Percentage Change
in After-tax
Earnings from
Joint Ventures
on
Constant Currency Basis
|
|
Total Joint
Ventures
|
|
4
|
%
|
(9)
|
pts
|
13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Six-Month Period
Ended Nov. 23, 2014
|
|
|
|
Percentage Change
in After-tax
Earnings from
Joint Ventures
as
Reported
|
Impact of
Foreign
Currency
Exchange
|
Percentage Change
in After-tax
Earnings from
Joint Ventures
on Constant
Currency Basis
|
|
Total Joint
Ventures
|
|
6
|
%
|
(3)
|
pts
|
9
|
%
|
|
Earnings comparisons
as a percent of net sales excluding certain items affecting
comparability follow:
|
|
|
|
|
Quarter
Ended
|
|
In
Millions
|
|
Nov. 23,
2014
|
|
|
Nov. 24,
2013
|
|
|
Comparisons as a %
of Net Sales
|
|
Value
|
|
Percent
of
Net
Sales
|
|
|
|
Value
|
|
Percent
of
Net
Sales
|
|
|
Gross margin as
reported (a)
|
$
|
1,619.1
|
|
34.4
|
%
|
|
$
|
1,761.7
|
|
36.1
|
%
|
|
Mark-to-market
effects (b)
|
|
5.1
|
|
0.1
|
%
|
|
|
(21.0)
|
|
(0.4)
|
%
|
|
Restructuring
costs (c)
|
|
18.6
|
|
0.4
|
%
|
|
|
-
|
|
-
|
%
|
|
Adjusted gross
margin
|
$
|
1,642.8
|
|
34.9
|
%
|
|
$
|
1,740.7
|
|
35.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit as
reported
|
$
|
559.0
|
|
11.9
|
%
|
|
$
|
870.1
|
|
17.8
|
%
|
|
Mark-to-market
effects (b)
|
|
5.1
|
|
0.1
|
%
|
|
|
(21.0)
|
|
(0.4)
|
%
|
|
Restructuring
costs (c)
|
|
233.9
|
|
5.0
|
%
|
|
|
0.7
|
|
-
|
%
|
|
Acquisition
integration costs (d)
|
|
3.5
|
|
-
|
%
|
|
|
-
|
|
-
|
%
|
|
Adjusted operating
profit
|
$
|
801.5
|
|
17.0
|
%
|
|
$
|
849.8
|
|
17.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to General Mills as reported
|
$
|
346.1
|
|
7.4
|
%
|
|
$
|
549.9
|
|
11.3
|
%
|
|
Mark-to-market
effects, net of tax (b)
|
|
3.2
|
|
0.1
|
%
|
|
|
(13.2)
|
|
(0.3)
|
%
|
|
Restructuring
costs, net of tax (c)
|
|
147.4
|
|
3.1
|
%
|
|
|
0.5
|
|
-
|
%
|
|
Acquisition
integration costs, net of tax (d)
|
|
2.7
|
|
-
|
%
|
|
|
-
|
|
-
|
%
|
|
Adjusted net earnings
attributable to General Mills
|
$
|
499.4
|
|
10.6
|
%
|
|
$
|
537.2
|
|
11.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six-Month Period
Ended
|
|
In
Millions
|
|
Nov. 23,
2014
|
|
|
Nov. 24,
2013
|
|
|
Comparisons as a %
of Net Sales
|
|
Value
|
|
Percent
of
Net
Sales
|
|
|
|
Value
|
|
Percent
of
Net
Sales
|
|
|
Gross margin as
reported (a)
|
$
|
3,057.8
|
|
34.1
|
%
|
|
$
|
3,374.7
|
|
36.5
|
%
|
|
Mark-to-market
effects (b)
|
|
54.3
|
|
0.6
|
%
|
|
|
(20.2)
|
|
(0.2)
|
%
|
|
Restructuring
costs (c)
|
|
18.6
|
|
0.2
|
%
|
|
|
-
|
|
-
|
%
|
|
Adjusted gross
margin
|
$
|
3,130.7
|
|
34.9
|
%
|
|
$
|
3,354.5
|
|
36.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit as
reported
|
$
|
1,116.5
|
|
12.4
|
%
|
|
$
|
1,604.9
|
|
17.4
|
%
|
|
Mark-to-market
effects (b)
|
|
54.3
|
|
0.6
|
%
|
|
|
(20.2)
|
|
(0.2)
|
%
|
|
Restructuring
costs (c)
|
|
247.9
|
|
2.8
|
%
|
|
|
3.5
|
|
-
|
%
|
|
Acquisition
integration costs (d)
|
|
3.5
|
|
-
|
%
|
|
|
-
|
|
-
|
%
|
|
Adjusted operating
profit
|
$
|
1,422.2
|
|
15.8
|
%
|
|
$
|
1,588.2
|
|
17.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to General Mills as reported
|
$
|
691.3
|
|
7.7
|
%
|
|
$
|
1,009.2
|
|
10.9
|
%
|
|
Mark-to-market
effects, net of tax (b)
|
|
34.2
|
|
0.4
|
%
|
|
|
(12.7)
|
|
(0.1)
|
%
|
|
Restructuring
costs, net of tax (c)
|
|
152.2
|
|
1.7
|
%
|
|
|
3.1
|
|
-
|
%
|
|
Acquisition
integration costs, net of tax (d)
|
|
2.7
|
|
-
|
%
|
|
|
-
|
|
-
|
%
|
|
Adjusted net earnings
attributable to General Mills
|
$
|
880.4
|
|
9.8
|
%
|
|
$
|
999.6
|
|
10.8
|
%
|
|
(a) Net sales less
cost of sales.
|
|
|
(b) See Note
5.
|
|
|
(c) See Note
4.
|
|
|
(d) Integration costs
resulting from the acquisition of Annie's, Inc.
|
|
|
A reconciliation of
the effective income tax rate as reported to the effective income
tax rate excluding certain items affecting comparability
follows:
|
|
|
|
|
Quarter Ended
|
|
Six-Month Period
Ended
|
|
|
Nov. 23,
2014
|
|
Nov. 24,
2013
|
|
Nov. 23,
2014
|
|
Nov. 24,
2013
|
|
In
Millions
|
Pretax
Earnings
(a)
|
Income
Taxes
|
|
Pretax
Earnings
(a)
|
Income
Taxes
|
|
Pretax
Earnings
(a)
|
Income
Taxes
|
|
Pretax
Earnings
(a)
|
Income
Taxes
|
|
As
reported
|
$ 481.7
|
$ 153.4
|
|
$ 801.4
|
$ 266.7
|
|
$ 960.7
|
$ 306.0
|
|
$ 1,457.4
|
$ 478.7
|
|
Mark-to-market effects (b)
|
5.1
|
1.9
|
|
(21.0)
|
(7.8)
|
|
54.3
|
20.1
|
|
(20.2)
|
(7.5)
|
|
Restructuring costs (c)
|
233.9
|
86.5
|
|
0.7
|
0.2
|
|
247.9
|
91.1
|
|
3.5
|
0.4
|
|
Acquisition integration costs (d)
|
3.5
|
0.8
|
|
-
|
-
|
|
3.5
|
0.8
|
|
-
|
-
|
|
As
adjusted
|
$ 724.2
|
$ 242.6
|
|
$ 781.1
|
$ 259.1
|
|
$ 1,266.4
|
$ 418.0
|
|
$ 1,440.7
|
$ 471.6
|
|
Effective tax
rate:
|
|
|
|
|
|
|
|
|
|
|
|
|
As
reported
|
|
31.8%
|
|
|
33.3%
|
|
|
31.8%
|
|
|
32.8%
|
|
As
adjusted
|
|
33.5%
|
|
|
33.2%
|
|
|
33.0%
|
|
|
32.7%
|
|
(a) Earnings before
income taxes and after-tax earnings from joint ventures.
|
|
|
(b) See Note
5.
|
|
|
(c) See Note
4.
|
|
|
(d) Integration costs
resulting from the acquisition of Annie's, Inc.
|
|
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SOURCE General Mills