MINNEAPOLIS, Dec. 17, 2015 /PRNewswire/ -- General Mills
(NYSE: GIS) today reported results for the second quarter of fiscal
2016.
Second Quarter Results Summary
- Net sales declined 6 percent to $4.42
billion, including a 1 point decline from acquisitions and
divestitures. On a constant-currency basis, net sales
declined 2 percent.
- Total segment operating profit totaled $839 million, down 1 percent. In constant
currency, total segment operating profit increased 2
percent.
- Diluted earnings per share (EPS) totaled 87 cents compared to 56
cents a year ago.
- Adjusted diluted EPS, which excludes certain items affecting
comparability of results, totaled 82
cents in the second quarter of 2016, up 2 percent. On
a constant-currency basis, adjusted diluted EPS increased 5
percent.
Please see Note 7 to the Consolidated Financial Statements
below for reconciliation of non-GAAP measures used in this
release.
General Mills Chairman and Chief Executive Officer Ken Powell said, "Our second-quarter results put
us in line with our expectations at the midway point in our fiscal
year. Constant-currency net sales declined modestly in the
quarter, due in part to the divestiture of our North American Green
Giant business. Our adjusted gross margin increased for the
third consecutive quarter, which, combined with our continued cost
savings efforts, helped drive mid single-digit constant-currency
growth in adjusted diluted EPS. Through six months, we've
posted 1 percent growth in net sales and double-digit growth in
segment operating profit and adjusted diluted EPS, each in constant
currency."
Net sales for the 13 weeks ended November
29, 2015, declined 6 percent to $4.42
billion. Foreign currency exchange reduced net sales
growth by 4 percentage points. Pound volume reduced net sales
growth by 3 percent, and net price realization and mix contributed
1 point of net sales growth. The divestiture of the Green
Giant business in November 2015 and
the acquisition of the Annie's business in October 2014 combined to reduce net sales by 1
point. Adjusted gross margin, which excludes mark-to-market
effects and certain other items affecting comparability, increased
60 basis points due to favorable price realization and
mix. Selling, general and administrative expenses
(SG&A) declined 9 percent, driven by savings from Project
Catalyst and other cost management initiatives, and a 15 percent
decrease in advertising and media expense (please see Note 3
below for more information on our restructuring actions).
Total segment operating profit declined 1 percent to $839 million. On a constant-currency basis,
total segment operating profit increased 2 percent. The
company recorded a $199 million gain
in the second quarter from the sale of the Green Giant business
(please see Note 2 below for more information on the Green Giant
divestiture). Restructuring and project-related charges totaled
$99 million pretax in the second
quarter, including $38 million
recorded in cost of sales (please see Note 3 below for more
information on these charges). Net earnings attributable
to General Mills totaled $530 million
and diluted EPS totaled 87
cents. Adjusted diluted EPS, which excludes certain
items affecting comparability, increased 2 percent to 82 cents. On a constant-currency basis,
second-quarter adjusted diluted EPS increased 5 percent.
Six Month Financial Summary
- Net sales through the first six months of fiscal 2016
declined 4 percent to $8.63
billion. On a constant-currency basis, net sales
increased 1 percent.
- First-half total segment operating profit totaled
$1.67 billion, up 8 percent from the
prior year. Constant-currency total segment operating profit
grew 12 percent.
- Diluted EPS totaled $1.56
compared to $1.11 in last year's
first half.
- First-half adjusted diluted EPS totaled $1.61, up 14 percent versus year-ago
levels. On a constant-currency basis, adjusted diluted EPS
increased 18 percent.
Through the first six months, General Mills returned to
constant-currency growth in net sales and posted double-digit
growth in total segment operating profit and adjusted diluted EPS
on a constant-currency basis. Acquisitions and divestitures
did not have a material impact on first-half net sales
growth. First-half adjusted gross margins expanded by 170
basis points. U.S. Retail products making particularly strong
contributions to first-half net sales results included Cinnamon
Toast Crunch and Lucky Charms cereals, Yoplait Greek yogurt, Nature
Valley grain snacks, Annie's soup and other natural and organic
products, Totino's hot snacks, and Progresso soup. In the
Convenience Stores and Foodservice segment, Pillsbury frozen
mini-bagels, Bugles and Chex Mix salty snacks, and Yoplait Greek
and Parfait Pro yogurt varieties were strong net sales
contributors. International products posting strong
first-half net sales contributions included Häagen-Dazs ice cream
and Old El Paso Mexican products in Europe, Nature Valley snacks in Canada, and Betty
Crocker sweet snacks in the Asia-Pacific region.
U.S. Retail Segment Results
Second-quarter net sales for General Mills' U.S. Retail segment
totaled $2.76 billion, down 4 percent
from the prior year due to lower pound volume. Acquisitions
and divestitures combined to reduce U.S. Retail net sales growth by
1 percent. Net sales for the U.S. Retail segment included 1
percent declines for the Snacks and Baking Products operating
units, while net sales for each of the remaining operating units
declined mid single-digits. U.S. Retail segment operating
profit totaled $600 million, down 3
percent due to lower net sales, including the net impact of the
Green Giant divestiture and the Annie's acquisition. This was
partially offset by benefit from our cost savings initiatives and
lower media expense.
Through the first six months, U.S. Retail net sales totaled
$5.29 billion, essentially unchanged
from the prior year. Acquisitions and divestitures
contributed 1 point of net sales growth. Lower pound volume
subtracted 2 points of net sales growth, while net price
realization and mix added 2 points of growth. Segment
operating profit totaled $1.23
billion, 15 percent above last year.
International Segment Results
Second-quarter net sales for General Mills' consolidated
international businesses declined 12 percent to $1.16 billion, as foreign currency exchange
reduced net sales growth by 15 percentage points. On a
constant-currency basis, net sales increased 3 percent. Pound
volume reduced net sales growth by 2 points, and net price
realization and mix added 5 points of growth.
Constant-currency net sales rose 17 percent in Latin America, 3 percent in Canada, and 2 percent in the Asia/Pacific region, and declined 2 percent in
Europe. International segment operating profit increased 1
percent to $136 million. On a
constant-currency basis, segment operating profit was up 19
percent, driven by favorable net price realization and lower input
costs.
Through the first six months of fiscal 2016, International
segment net sales totaled $2.36
billion, down 12 percent from the prior year. Foreign
currency exchange reduced net sales growth by 16 percentage
points. On a constant-currency basis, net sales grew 4
percent. Pound volume added 1 point of net sales growth,
while net price realization and mix added 3 points of growth.
Six-month segment operating profit totaled $253 million, down 10 percent as reported but up
8 percent in constant currency.
Convenience Stores and Foodservice Segment Results
Second-quarter net sales for the Convenience Stores and
Foodservice segment totaled $506
million, 4 percent below year-ago levels. Pound volume
reduced net sales growth by 3 points, and unfavorable net price
realization and mix reduced net sales growth by 1 point. Frozen
meals, yogurt, biscuits, and mixes led sales performance in the
quarter. Segment operating profit increased 7 percent to
$103 million, driven by benefit from
our administrative cost savings initiatives.
Through the first six months of fiscal 2016, Convenience Stores
and Foodservice net sales declined 2 percent to $984 million, driven by lower pound volume.
Six-month segment operating profit of $183
million essentially matched year-ago results that were up 15
percent.
Joint Venture Summary
Combined after-tax earnings from the Cereal Partners Worldwide
(CPW) and Häagen-Dazs Japan (HDJ) joint ventures totaled
$23 million in the second quarter,
down 15 percent. Constant-currency after-tax earnings from
joint ventures declined 6 percent due to lower volume for
HDJ. Constant-currency net sales grew 1 percent for CPW and
declined 10 percent for HDJ. Through the first six months of
2016, after-tax joint-venture earnings totaled $49 million, down 8 percent as reported but up 5
percent in constant currency.
Corporate Items
Unallocated corporate items totaled $72
million net expense in the second quarter of fiscal 2016,
compared to $73 million net expense a
year earlier. Excluding mark-to-market valuation effects and
restructuring and project-related charges, unallocated corporate
items totaled $42 million net expense
this year compared to $48 million net
expense a year ago.
Net interest expense totaled $74
million in this year's second quarter, compared to
$77 million a year ago. The
second-quarter effective tax rate was 37.4 percent, 5.6 percentage
points higher than prior year levels driven primarily by the tax
impacts of the sale of Green Giant. Excluding items affecting
comparability, the adjusted effective tax rate was 32.3 percent for
both the second quarter and the first half of 2016.
Cash Flow Items
Cash provided by operating activities totaled $1.16 billion in the second quarter, up 34
percent from the prior year due primarily to changes in working
capital and higher earnings. Capital investments through the
first six months totaled $294
million. Dividends paid year-to-date increased 6
percent to $531 million. During
the first half of 2016, General Mills repurchased 9.5 million
shares of common stock at an aggregate price of $549 million. Average diluted shares
outstanding for the first half totaled 614 million, down 2 percent
from last year's first-half average of 624 million.
Green Giant Divestiture
On November 2, 2015, General Mills
completed the sale of the North American Green Giant and
Le Sueur vegetable businesses to
B&G Foods, Inc., (NYSE: BGS) for $823
million in cash. General Mills will continue to
operate the Green Giant business in Europe and select other export markets under
license from B&G Foods. The company expects to use the
net proceeds for share repurchases and debt reduction. The
transaction generated a one-time, pre-tax gain on sale of
$199 million which was recorded in
the second quarter of 2016. General Mills expects the
transaction will reduce fiscal 2016 net sales growth and total
segment operating profit growth by approximately 2 percentage
points each, and will be dilutive to fiscal 2016 earnings per share
by approximately 7 cents, excluding
the gain on sale.
Updated Cost Savings Targets
In the first half of fiscal 2016, General Mills announced
incremental actions related to Project Century in North America and in our Europe region. The company now is
targeting $450 million in cumulative
cost savings by fiscal 2017 and $500
million by fiscal 2018 from the combination of Project
Century, Project Catalyst, Project Compass, and our policies and
practices update, including zero-based budgeting.
Outlook
Powell said, "Our first-half results keep us on track to deliver
the targets we outlined at the beginning of the year, adjusting for
the Green Giant sale. Our emphasis on Consumer First drove
positive results in a number of categories and markets, and we plan
to expand the impact more broadly in the second half in order to
strengthen our retail sales performance. At the same time, we
are committed to driving efficiency in our businesses and expanding
our margins. The incremental actions we took in the first
half of the year have enabled us to increase our overall cost
savings target to $500 million by
2018."
General Mills revised its 2016 full-year growth targets to
reflect the impact of the Green Giant divestiture:
- Net sales in constant currency are now expected to decline at a
low single-digit rate from the 2015 levels that included a 53rd
week.
- Total segment operating profit is expected to essentially match
last year's levels in constant currency.
- Constant-currency adjusted diluted EPS is expected to grow at a
low single-digit rate from the base of $2.86 earned in fiscal 2015. At current
exchange rates, the company estimates a 9-cent headwind from currency translation in
2016.
General Mills will hold a briefing for investors today,
December 17, 2015, beginning at
8:30 a.m. Eastern time. You may
access the web cast from General Mills' internet home page:
generalmills.com.
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
that are based on our current expectations and assumptions. These
forward-looking statements, including the statements under the
caption "Outlook," and statements made by Mr. Powell, are subject
to certain risks and uncertainties that could cause actual results
to differ materially from the potential results discussed in the
forward-looking statements. In particular, our predictions about
future net sales and earnings could be affected by a variety of
factors, including: competitive dynamics in the consumer foods
industry and the markets for our products, including new product
introductions, advertising activities, pricing actions, and
promotional activities of our competitors; economic conditions,
including changes in inflation rates, interest rates, tax rates, or
the availability of capital; product development and innovation;
consumer acceptance of new products and product improvements;
consumer reaction to pricing actions and changes in promotion
levels; acquisitions or dispositions of businesses or assets;
changes in capital structure; changes in the legal and regulatory
environment, including labeling and advertising regulations and
litigation; impairments in the carrying value of goodwill, other
intangible assets, or other long-lived assets, or changes in the
useful lives of other intangible assets; changes in accounting
standards and the impact of significant accounting estimates;
product quality and safety issues, including recalls and product
liability; changes in consumer demand for our products;
effectiveness of advertising, marketing, and promotional programs;
changes in consumer behavior, trends, and preferences, including
weight loss trends; consumer perception of health-related issues,
including obesity; consolidation in the retail environment; changes
in purchasing and inventory levels of significant customers;
fluctuations in the cost and availability of supply chain
resources, including raw materials, packaging, and energy;
disruptions or inefficiencies in the supply chain; effectiveness of
restructuring and cost savings 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
|
(Unaudited) (In
Millions, Except per Share Data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Six-Month Period
Ended
|
|
|
Nov.
29,
2015
|
|
|
Nov.
23,
2014
|
|
%
Change
|
|
|
Nov.
29,
2015
|
|
|
Nov.
23,
2014
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
4,424.9
|
|
$
|
4,712.2
|
|
(6.1)
|
%
|
|
$
|
8,632.8
|
|
$
|
8,980.6
|
|
(3.9)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
2,884.3
|
|
|
3,093.1
|
|
(6.8)
|
%
|
|
|
5,537.6
|
|
|
5,922.8
|
|
(6.5)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general, and administrative expenses
|
|
772.7
|
|
|
845.5
|
|
(8.6)
|
%
|
|
|
1,583.9
|
|
|
1,712.7
|
|
(7.5)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divestiture
(gain)
|
|
(199.1)
|
|
|
-
|
|
NM
|
|
|
|
(199.1)
|
|
|
-
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring,
impairment, and other exit
costs
|
|
61.3
|
|
|
214.6
|
|
(71.4)
|
%
|
|
|
121.4
|
|
|
228.6
|
|
(46.9)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
905.7
|
|
|
559.0
|
|
62.0
|
%
|
|
|
1,589.0
|
|
|
1,116.5
|
|
42.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest,
net
|
|
73.8
|
|
|
77.3
|
|
(4.5)
|
%
|
|
|
149.1
|
|
|
155.8
|
|
(4.3)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before
income taxes and after-tax
earnings from
joint ventures
|
|
831.9
|
|
|
481.7
|
|
72.7
|
%
|
|
|
1,439.9
|
|
|
960.7
|
|
49.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
311.5
|
|
|
153.4
|
|
103.1
|
%
|
|
|
510.1
|
|
|
306.0
|
|
66.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
After-tax earnings
from joint ventures
|
|
23.2
|
|
|
27.1
|
|
(14.4)
|
%
|
|
|
48.9
|
|
|
53.1
|
|
(7.9)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings,
including earnings attributable
to redeemable
and noncontrolling interests
|
|
543.6
|
|
|
355.4
|
|
53.0
|
%
|
|
|
978.7
|
|
|
707.8
|
|
38.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to redeemable
and
noncontrolling interests
|
|
14.1
|
|
|
9.3
|
|
NM
|
|
|
|
22.6
|
|
|
16.5
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to General Mills
|
$
|
529.5
|
|
$
|
346.1
|
|
53.0
|
%
|
|
$
|
956.1
|
|
$
|
691.3
|
|
38.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
basic
|
$
|
0.88
|
|
$
|
0.58
|
|
51.7
|
%
|
|
$
|
1.59
|
|
$
|
1.14
|
|
39.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share -
diluted
|
$
|
0.87
|
|
$
|
0.56
|
|
55.3
|
%
|
|
$
|
1.56
|
|
$
|
1.11
|
|
40.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per
share
|
$
|
0.44
|
|
$
|
0.41
|
|
7.3
|
%
|
|
$
|
0.88
|
|
$
|
0.82
|
|
7.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
Six-Month Period
Ended
|
Comparisons as a % of
net sales:
|
|
Nov.
29,
2015
|
|
|
Nov.
23,
2014
|
|
Basis Pt
Change
|
|
|
|
Nov.
29,
2015
|
|
|
Nov.
23,
2014
|
|
Basis Pt
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
34.8%
|
|
|
34.4%
|
|
40
|
|
|
|
35.8%
|
|
|
34.1%
|
|
170
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general, and administrative expenses
|
|
17.5%
|
|
|
18.0%
|
|
(50)
|
|
|
|
18.3%
|
|
|
19.1%
|
|
(80)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
20.5%
|
|
|
11.9%
|
|
860
|
|
|
|
18.4%
|
|
|
12.4%
|
|
600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to General Mills
|
|
12.0%
|
|
|
7.4%
|
|
460
|
|
|
|
11.1%
|
|
|
7.7%
|
|
340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
Six-Month Period
Ended
|
Comparisons as a % of
net sales excluding
certain items
affecting comparability (a):
|
|
Nov.
29,
2015
|
|
|
Nov.
23,
2014
|
|
Basis
Pt
Change
|
|
|
|
Nov.
29,
2015
|
|
|
Nov.
23,
2014
|
|
Basis Pt
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted gross
margin
|
|
35.5%
|
|
|
34.9%
|
|
60
|
|
|
|
36.6%
|
|
|
34.9%
|
|
170
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
operating profit
|
|
18.0%
|
|
|
17.0%
|
|
100
|
|
|
|
18.2%
|
|
|
15.8%
|
|
240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
earnings attributable to General Mills
|
|
11.3%
|
|
|
10.6%
|
|
70
|
|
|
|
11.4%
|
|
|
9.8%
|
|
160
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) See Note 7 for a
reconciliation of these measures 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
|
|
|
|
Nov.
29,
2015
|
|
|
Nov.
23,
2014
|
|
%
Change
|
|
|
|
Nov.
29,
2015
|
|
|
Nov.
23,
2014
|
|
%
Change
|
|
Net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Retail
|
$
|
2,761.9
|
|
$
|
2,861.6
|
|
(3.5)
|
%
|
|
$
|
5,293.1
|
|
$
|
5,305.9
|
|
(0.2)
|
%
|
|
International
|
|
1,157.2
|
|
|
1,321.1
|
|
(12.4)
|
%
|
|
|
2,356.2
|
|
|
2,672.2
|
|
(11.8)
|
%
|
|
Convenience
Stores and Foodservice
|
|
505.8
|
|
|
529.5
|
|
(4.5)
|
%
|
|
|
983.5
|
|
|
1,002.5
|
|
(1.9)
|
%
|
|
Total
|
$
|
4,424.9
|
|
$
|
4,712.2
|
|
(6.1)
|
%
|
|
$
|
8,632.8
|
|
$
|
8,980.6
|
|
(3.9)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Retail
|
$
|
600.4
|
|
$
|
616.1
|
|
(2.5)
|
%
|
|
$
|
1,230.1
|
|
$
|
1,073.3
|
|
14.6
|
%
|
|
International
|
|
136.2
|
|
|
134.3
|
|
1.4
|
%
|
|
|
253.2
|
|
|
280.3
|
|
(9.7)
|
%
|
|
Convenience
Stores and Foodservice
|
|
102.8
|
|
|
96.2
|
|
6.9
|
%
|
|
|
182.6
|
|
|
183.5
|
|
(0.5)
|
%
|
|
Total segment
operating profit
|
|
839.4
|
|
|
846.6
|
|
(0.8)
|
%
|
|
|
1,665.9
|
|
|
1,537.1
|
|
8.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated corporate
items
|
|
71.5
|
|
|
73.0
|
|
(2.0)
|
%
|
|
|
154.6
|
|
|
192.0
|
|
(19.5)
|
%
|
|
Divestiture
(gain)
|
|
(199.1)
|
|
|
-
|
|
NM
|
|
|
|
(199.1)
|
|
|
-
|
|
NM
|
|
|
Restructuring,
impairment, and
other exit
costs
|
|
61.3
|
|
|
214.6
|
|
(71.4)
|
%
|
|
|
121.4
|
|
|
228.6
|
|
(46.9)
|
%
|
|
Operating
profit
|
$
|
905.7
|
|
$
|
559.0
|
|
62.0
|
%
|
|
$
|
1,589.0
|
|
$
|
1,116.5
|
|
42.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
Six-Month Period
Ended
|
|
|
|
Nov.
29,
2015
|
|
|
Nov.
23,
2014
|
|
Basis Pt
Change
|
|
|
|
Nov.
29,
2015
|
|
|
Nov.
23,
2014
|
|
Basis
Pt
Change
|
|
|
Segment operating
profit as a
% of net
sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
Retail
|
|
21.7%
|
|
|
21.5%
|
|
20
|
|
|
|
23.2%
|
|
|
20.2%
|
|
300
|
|
|
International
|
|
11.8%
|
|
|
10.2%
|
|
160
|
|
|
|
10.7%
|
|
|
10.5%
|
|
20
|
|
|
Convenience
Stores and Foodservice
|
|
20.3%
|
|
|
18.2%
|
|
210
|
|
|
|
18.6%
|
|
|
18.3%
|
|
30
|
|
|
Total segment
operating profit
|
|
19.0%
|
|
|
18.0%
|
|
100
|
|
|
|
19.3%
|
|
|
17.1%
|
|
220
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying
notes to consolidated financial statements.
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Balance Sheets
|
GENERAL MILLS, INC.
AND SUBSIDIARIES
|
(In Millions, Except
Par Value)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nov.
29,
2015
|
|
|
Nov.
23,
2014
|
|
|
May
31,
2015
|
|
|
|
(Unaudited)
|
|
|
(Unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents
|
|
$
|
649.8
|
|
$
|
894.5
|
|
$
|
334.2
|
Receivables
|
|
|
1,461.3
|
|
|
1,705.8
|
|
|
1,386.7
|
Inventories
|
|
|
1,455.0
|
|
|
1,893.4
|
|
|
1,540.9
|
Deferred
income taxes
|
|
|
98.6
|
|
|
98.5
|
|
|
100.1
|
Prepaid
expenses and other current assets
|
|
|
382.9
|
|
|
391.9
|
|
|
423.8
|
|
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
|
4,047.6
|
|
|
4,984.1
|
|
|
3,785.7
|
|
|
|
|
|
|
|
|
|
|
Land, buildings, and
equipment
|
|
|
3,588.4
|
|
|
3,824.2
|
|
|
3,783.3
|
Goodwill
|
|
|
8,602.1
|
|
|
9,078.7
|
|
|
8,874.9
|
Other intangible
assets
|
|
|
4,471.0
|
|
|
5,127.9
|
|
|
4,677.0
|
Other
assets
|
|
|
879.6
|
|
|
1,159.2
|
|
|
811.2
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
21,588.7
|
|
$
|
24,174.1
|
|
$
|
21,932.1
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
1,704.1
|
|
$
|
1,656.7
|
|
$
|
1,684.0
|
Current
portion of long-term debt
|
|
|
1,100.2
|
|
|
750.7
|
|
|
1,000.4
|
Notes
payable
|
|
|
306.7
|
|
|
2,071.4
|
|
|
615.8
|
Other
current liabilities
|
|
|
1,858.4
|
|
|
1,614.9
|
|
|
1,589.9
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
4,969.4
|
|
|
6,093.7
|
|
|
4,890.1
|
|
|
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
7,416.6
|
|
|
7,683.4
|
|
|
7,575.3
|
Deferred income
taxes
|
|
|
1,508.3
|
|
|
1,761.5
|
|
|
1,550.3
|
Other
liabilities
|
|
|
1,711.8
|
|
|
1,623.9
|
|
|
1,744.8
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
15,606.1
|
|
|
17,162.5
|
|
|
15,760.5
|
|
|
|
|
|
|
|
|
|
|
Redeemable
interest
|
|
|
817.4
|
|
|
901.4
|
|
|
778.9
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock, 754.6 shares issued, $0.10 par value
|
|
|
75.5
|
|
|
75.5
|
|
|
75.5
|
Additional paid-in capital
|
|
|
1,155.4
|
|
|
1,260.3
|
|
|
1,296.7
|
Retained
earnings
|
|
|
12,416.0
|
|
|
11,975.3
|
|
|
11,990.8
|
Common
stock in treasury, at cost,
shares of 161.3, 157.9 and 155.9
|
|
|
(6,442.9)
|
|
|
(6,079.2)
|
|
|
(6,055.6)
|
Accumulated other comprehensive loss
|
|
|
(2,407.0)
|
|
|
(1,559.6)
|
|
|
(2,310.7)
|
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
|
4,797.0
|
|
|
5,672.3
|
|
|
4,996.7
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling
interests
|
|
|
368.2
|
|
|
437.9
|
|
|
396.0
|
|
|
|
|
|
|
|
|
|
|
Total
equity
|
|
|
5,165.2
|
|
|
6,110.2
|
|
|
5,392.7
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
equity
|
|
$
|
21,588.7
|
|
$
|
24,174.1
|
|
$
|
21,932.1
|
|
|
|
|
|
|
|
|
|
|
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. 29,
2015
|
|
Nov. 23,
2014
|
Cash Flows -
Operating Activities
|
|
|
|
|
|
Net
earnings, including earnings attributable to redeemable
|
|
|
|
|
|
and noncontrolling interests
|
$
|
978.7
|
|
$
|
707.8
|
Adjustments to reconcile net earnings to net cash
|
|
|
|
|
|
provided by operating activities:
|
|
|
|
|
|
Depreciation and amortization
|
|
292.5
|
|
|
290.4
|
After-tax earnings from joint ventures
|
|
(48.9)
|
|
|
(53.1)
|
Distributions of earnings from joint ventures
|
|
28.6
|
|
|
28.9
|
Stock-based compensation
|
|
52.7
|
|
|
64.9
|
Deferred income taxes
|
|
(32.7)
|
|
|
13.2
|
Tax
benefit on exercised options
|
|
(44.7)
|
|
|
(26.8)
|
Pension and other postretirement benefit plan
contributions
|
|
(22.7)
|
|
|
(24.4)
|
Pension and other postretirement benefit plan costs
|
|
58.9
|
|
|
46.0
|
Divestiture (gain)
|
|
(199.1)
|
|
|
-
|
Restructuring, impairment, and other exit costs
|
|
89.8
|
|
|
236.6
|
Changes in current assets and liabilities,
|
|
|
|
|
|
excluding the effects of acquisitions and divestiture
|
|
57.0
|
|
|
(414.4)
|
Other, net
|
|
(54.1)
|
|
|
(5.9)
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
1,156.0
|
|
|
863.2
|
|
|
|
|
|
|
Cash Flows -
Investing Activities
|
|
|
|
|
|
Purchases of land, buildings, and equipment
|
|
(293.5)
|
|
|
(317.6)
|
Acquisitions, net of cash acquired
|
|
-
|
|
|
(822.3)
|
Investments in affiliates, net
|
|
11.7
|
|
|
(32.3)
|
Proceeds
from disposal of land, buildings, and equipment
|
|
1.2
|
|
|
1.1
|
Proceeds
from divestiture
|
|
822.7
|
|
|
-
|
Other,
net
|
|
(19.1)
|
|
|
(0.1)
|
|
|
|
|
|
|
Net cash provided (used) by investing activities
|
|
523.0
|
|
|
(1,171.2)
|
|
|
|
|
|
|
Cash Flows -
Financing Activities
|
|
|
|
|
|
Change
in notes payable
|
|
(293.7)
|
|
|
922.3
|
Issuance
of long-term debt
|
|
-
|
|
|
1,274.5
|
Payment
of long-term debt
|
|
(0.3)
|
|
|
(393.3)
|
Proceeds
from common stock issued on exercised options
|
|
64.5
|
|
|
35.9
|
Tax
benefit on exercised options
|
|
44.7
|
|
|
26.8
|
Purchases of common stock for treasury
|
|
(549.0)
|
|
|
(968.8)
|
Dividends paid
|
|
(530.9)
|
|
|
(503.2)
|
Distributions to noncontrolling and redeemable interest
holders
|
|
(77.2)
|
|
|
(20.5)
|
Other,
net
|
|
0.1
|
|
|
(4.0)
|
|
|
|
|
|
|
Net cash provided (used) by financing activities
|
|
(1,341.8)
|
|
|
369.7
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
(21.6)
|
|
|
(34.5)
|
Increase in cash and
cash equivalents
|
|
315.6
|
|
|
27.2
|
Cash and cash
equivalents - beginning of year
|
|
334.2
|
|
|
867.3
|
Cash and cash
equivalents - end of period
|
$
|
649.8
|
|
$
|
894.5
|
|
|
|
|
|
|
Cash Flow from
Changes in Current Assets and Liabilities,
excluding the
effects of acquisitions and divestiture:
|
|
|
|
|
|
Receivables
|
$
|
(109.9)
|
|
$
|
(248.8)
|
Inventories
|
|
(196.2)
|
|
|
(309.6)
|
Prepaid
expenses and other current assets
|
|
18.6
|
|
|
(6.6)
|
Accounts
payable
|
|
56.3
|
|
|
139.7
|
Other
current liabilities
|
|
288.2
|
|
|
10.9
|
|
|
|
|
|
|
Changes in current
assets and liabilities
|
$
|
57.0
|
|
$
|
(414.4)
|
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.
|
|
|
(2)
|
During the second
quarter of fiscal 2016, we sold our North American Green Giant
product lines for $822.7 million in cash, and we recorded a pre-tax
gain of $199.1 million. We received net cash proceeds of $787.9
million after transaction related costs. After the divestiture we
retained a brand intangible asset of $30.1 million related to our
continued use of the Green Giant brand in certain markets
outside of North America.
|
|
|
|
On October 21,
2014, we acquired Annie's, Inc. (Annie's), a publicly traded food
company headquartered in Berkeley, California, for an aggregate
purchase price of $821.2 million, which we funded by issuing debt.
We consolidated Annie's into our Consolidated Balance Sheets and
recorded goodwill of $589.8 million, an indefinite lived intangible
asset for the Annie's brand of $244.5 million and a finite
lived customer relationship asset of $23.9 million. The pro forma
effects of this acquisition were not material.
|
|
|
(3)
|
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. 29,
2015
|
|
Nov. 23,
2014
|
|
|
Nov. 29,
2015
|
|
Nov. 23,
2014
|
Cost of
sales
|
$
|
21.8
|
$
|
18.6
|
|
$
|
43.6
|
$
|
18.6
|
Restructuring,
impairment, and other exit costs
|
|
61.3
|
|
214.6
|
|
|
121.4
|
|
228.6
|
Total restructuring
charges
|
$
|
83.1
|
$
|
233.2
|
|
$
|
165.0
|
$
|
247.2
|
Project-related costs
classified in cost of sales
|
$
|
16.2
|
$
|
-
|
|
$
|
29.3
|
$
|
-
|
In the first quarter of fiscal 2016, we approved Project
Compass, a restructuring plan designed to enable our International
segment to accelerate long-term growth through increased
organizational effectiveness and reduced administrative expense. In
connection with this project, we expect to eliminate approximately
725 to 775 positions. We expect to incur approximately $62 to $65 million of net expenses relating to
this action of which approximately $61
million will be cash. We recorded $2.1 million of restructuring charges in the
second quarter of fiscal 2016 and $53.6
million in the six-month period ended November 29, 2015 related to this action. We
expect this action to be completed by the end of fiscal 2017.
Project Century (Century) began in fiscal 2015 as a review of
our North American manufacturing and distribution network to
streamline operations and identify potential capacity reductions.
In the second quarter of fiscal 2016, we broadened the scope of
Project Century to identify opportunities to streamline our supply
chain outside of North America. As
part of the expanded project, we notified employees and their
representatives of the proposal, pending consultation, to close the
manufacturing facility in our International segment supply chain
located in Berwick, United
Kingdom. If implemented, this action would affect
approximately 265 positions. We would expect, subject to the
proposal proceeding, to incur total restructuring charges of
approximately $46 to $51 million,
including approximately $10 million
of severance expense and $36 million to $41
million of other charges, primarily fixed asset write-offs.
These expenses include cash charges of approximately $21 million. We would expect to record
approximately $24 to $29 million
pre-tax of restructuring charges in the third quarter of fiscal
2016 and we would expect these actions to be completed by the end
of fiscal 2017.
As part of Century, in the second quarter of fiscal 2016, we
notified the employees and their representatives of our decision to
close our manufacturing facility in East Tamaki, New Zealand in our International segment
supply chain. This action will affect approximately 20 positions,
and we expect to incur less than $1
million of net expenses relating to this action, most of
which will be cash. We recorded $0.4
million of restructuring charges in the second quarter of
fiscal 2016 relating to this action. We expect these actions to be
completed by the end of fiscal 2017.
As part of Century, in the first quarter of fiscal 2016, we
notified the union member employees and union representatives at
our West Chicago, Illinois
facility of our decision to close this plant in our U.S. Retail
segment supply chain. This action will affect approximately 500
positions, and we expect to incur approximately $123 million of net expenses relating to this
action, of which approximately $55
million will be cash. We recorded $64
million of restructuring charges in the second quarter of
fiscal 2016 and the six-month period ended November 29, 2015 relating to this action. We
expect this action to be completed by the end of fiscal 2019.
As part of Century, in the first quarter of fiscal 2016, we
notified the employees at our snacks manufacturing facility in
Joplin, Missouri of our decision
to close this plant in our U.S. Retail segment supply chain. This
action will affect approximately 120 positions, and we expect to
incur approximately $12 million of
net expenses relating to this action, of which approximately
$5 million will be cash. We recorded
$2.9 million of restructuring charges
in the second quarter of fiscal 2016 and $7.8 million in the six-month period ended
November 29, 2015 relating to this
action. We expect this action to be completed by the end of fiscal
2018.
Also, we recorded $13.7 million in
the second quarter of fiscal 2016 and $39.2
million in the six-month period ended November 29, 2015, of restructuring charges
related to Century actions previously announced.
During the six-month period ended November 29, 2015, we paid $75.2 million in cash related to restructuring
initiatives.
In addition to restructuring charges, we expect to incur
approximately $105 million of
additional project-related costs, which will be recorded in cost of
sales, all of which will be cash. We recorded project-related costs
in cost of sales of $16.2 million in
the second quarter of fiscal 2016 and $29.3
million in the six-month period ended November 29, 2015.
|
|
In
Millions
|
Quarter
Ended
Nov. 29,
2015
|
Quarter
Ended
Nov. 23,
2014
|
Six-Month Period
Ended
Nov. 29,
2015
|
Six-Month Period
Ended
Nov. 23,
2014
|
|
|
Charge
|
Cash
|
Charge
|
Cash
|
Charge
|
Cash
|
Charge
|
Cash
|
Compass
|
$ 2.1
|
$ 16.9
|
$ -
|
$ -
|
$ 53.6
|
$ 25.5
|
$ -
|
$ -
|
|
Total Century
(a)
|
81.0
|
7.3
|
88.9
|
6.5
|
111.2
|
13.1
|
88.9
|
6.5
|
|
Catalyst
|
-
|
15.9
|
145.0
|
1.8
|
0.2
|
35.6
|
145.0
|
1.8
|
|
Combination of
certain operational facilities
|
-
|
0.8
|
(0.1)
|
-
|
-
|
1.0
|
13.9
|
-
|
|
Other
|
-
|
-
|
(0.6)
|
1.0
|
-
|
-
|
(0.6)
|
2.2
|
|
Total restructuring
charges
|
83.1
|
40.9
|
233.2
|
9.3
|
165.0
|
75.2
|
247.2
|
10.5
|
|
Project-related
costs
|
16.2
|
15.0
|
0.7
|
-
|
29.3
|
27.2
|
0.7
|
-
|
|
Restructuring charges
and project-related costs
|
$ 99.3
|
$ 55.9
|
$ 233.9
|
$ 9.3
|
$ 194.3
|
$ 102.4
|
$ 247.9
|
$ 10.5
|
|
(a) Includes $21.8
million and $18.6 million of restructuring charges recorded in cost
of sales during the second quarter of fiscal 2016 and fiscal 2015,
respectively,
|
|
and $43.6 million and
$18.6 million for the six-month periods ended November 29, 2015 and
November 23, 2014, respectively.
|
|
In
Millions
|
Six-Month Period
Ended
Nov. 29,
2015
|
Fiscal Year
Ended
May 31,
2015
|
Estimated
Future
|
Estimated
Total
|
Estimated
Savings
(b)
|
|
Charge
|
Cash
|
Charge
|
Cash
|
Charge
|
Cash
|
Charge
|
Cash
|
Compass
|
$ 53.6
|
$ 25.5
|
$ -
|
$ -
|
$ 10
|
$ 36
|
$ 64
|
$ 61
|
|
Total Century
(a)
|
111.2
|
13.1
|
181.8
|
12.0
|
127
|
147
|
420
|
172
|
|
Catalyst
|
0.2
|
35.6
|
148.4
|
45.0
|
-
|
37
|
149
|
118
|
|
Combination of
certain operational facilities
|
-
|
1.0
|
13.9
|
6.5
|
1
|
4
|
15
|
12
|
|
Other
|
-
|
-
|
(0.6)
|
0.1
|
-
|
-
|
-
|
-
|
|
Total restructuring
charges
|
165.0
|
75.2
|
343.5
|
63.6
|
139
|
224
|
648
|
363
|
|
Project-related
costs
|
29.3
|
27.2
|
13.2
|
9.7
|
63
|
68
|
105
|
105
|
|
Restructuring charges
and project-related costs
|
$ 194.3
|
$ 102.4
|
$ 356.7
|
$ 73.3
|
$ 201
|
$ 292
|
$ 753
|
$ 468
|
$ 500
|
(a) Includes $43.6
million and $59.6 million of restructuring charges recorded in cost
of sales during fiscal 2016 and fiscal 2015,
respectively.
|
(b) Cumulative annual
savings targeted by fiscal 2018. Includes savings from SG&A
cost reduction projects.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4)
|
Unallocated corporate
expense totaled $72 million in the second quarter of fiscal 2016
compared to $73 million in the same period in fiscal 2015. In the
second quarter of fiscal 2016, we recorded $22 million of
restructuring charges and $16 million of restructuring initiative
project-related costs compared to $19 million of restructuring
charges and $1 million of restructuring initiative project-related
costs in the same period last year. In addition, we recorded a $8
million net decrease in expense related to the mark-to-market
valuations of certain commodity positions and grain inventories
compared to a $5 million net increase in expense in the second
quarter of fiscal 2015. The decrease also includes cost savings
from Project Catalyst and other cost management
initiatives.
|
|
|
|
Unallocated corporate
expense totaled $155 million in the six-month period ended November
29, 2015, compared to $192 million in the same period last year. In
the six-month period ended November 29, 2015, we recorded $44
million of restructuring charges and $29 million of restructuring
initiative project-related costs compared to $19 million of
restructuring charges and $1 million of restructuring initiative
project-related costs in the same period last year. In addition, we
recorded a $10 million net decrease in expense related to the
mark-to-market valuations of certain commodity positions and grain
inventories in the six-month period ended November 29, 2015
compared to a $54 million net increase in expense in the same
period a year ago. The decrease also includes cost savings from
Project Catalyst and other cost management initiatives.
|
|
|
(5)
|
Basic and diluted
earnings per share (EPS) were calculated as follows:
|
|
|
Quarter
Ended
|
|
Six-Month Period
Ended
|
In Millions,
Except per Share Data
|
|
|
Nov. 29,
2015
|
|
|
Nov. 23,
2014
|
|
|
Nov. 29,
2015
|
|
|
Nov. 23,
2014
|
Net earnings
attributable to General Mills
|
|
$
|
529.5
|
|
$
|
346.1
|
|
$
|
956.1
|
|
$
|
691.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
common shares - basic EPS
|
|
|
599.4
|
|
|
602.6
|
|
|
600.8
|
|
|
607.6
|
Incremental share
effect from: (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
options
|
|
|
9.8
|
|
|
11.3
|
|
|
10.1
|
|
|
11.7
|
Restricted
stock, restricted stock units, and other
|
|
|
3.2
|
|
|
4.5
|
|
|
3.2
|
|
|
4.5
|
Average number of
common shares - diluted EPS
|
|
|
612.4
|
|
|
618.4
|
|
|
614.1
|
|
|
623.8
|
Earnings per share -
basic
|
|
$
|
0.88
|
|
$
|
0.58
|
|
$
|
1.59
|
|
$
|
1.14
|
Earnings per share -
diluted
|
|
$
|
0.87
|
|
$
|
0.56
|
|
$
|
1.56
|
|
$
|
1.11
|
|
(a)
|
Incremental shares
from stock options and restricted stock units are computed by the
treasury stock method.
|
|
|
|
(6)
|
The effective tax
rate for the six-month period ended November 29, 2015 was 35.4
percent compared to 31.8 percent for the six-month period ended
November 23, 2014. The 3.6 percentage point increase was primarily
related to significant non-deductible expenses related to the Green
Giant divestiture in the second quarter of fiscal 2016.
|
|
|
|
(7)
|
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 certain items affecting
comparability, (3) diluted EPS excluding certain items affecting
comparability growth rates 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 net
sales growth rates for our International segment, (8)
constant-currency after-tax earnings from joint ventures growth
rates, (9) earnings comparisons as a percent of net sales excluding
certain items affecting comparability, 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 follows:
|
|
|
|
|
Percentage Change
in
Net Sales as Reported
|
Impact of
Foreign
Currency Exchange
|
Percentage Change
in Net Sales
on Constant-Currency Basis
|
|
Quarter Ended Nov.
29, 2015
|
|
(6)%
|
(4)pts
|
(2)%
|
|
Six-Month Period
Ended Nov. 29, 2015
|
|
(4)%
|
(5)pts
|
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. 29,
2015
|
|
|
Nov. 23,
2014
|
Change
|
|
|
|
Nov. 29,
2015
|
|
|
Nov. 23,
2014
|
|
Change
|
|
|
|
2015
|
|
Diluted earnings per
share, as reported
|
$
|
0.87
|
|
$
|
0.56
|
55
|
%
|
|
$
|
1.56
|
|
$
|
1.11
|
|
40
|
%
|
|
$
|
1.97
|
|
Mark-to-market
effects (a)
|
|
(0.01)
|
|
|
-
|
|
|
|
|
(0.01)
|
|
|
0.05
|
|
|
|
|
|
0.09
|
|
Divestiture
(gain) (b)
|
|
(0.14)
|
|
|
-
|
|
|
|
|
(0.14)
|
|
|
-
|
|
|
|
|
|
-
|
|
Restructuring
costs (c)
|
|
0.08
|
|
|
0.24
|
|
|
|
|
0.17
|
|
|
0.25
|
|
|
|
|
|
0.35
|
|
Project-related costs (c)
|
|
0.02
|
|
|
-
|
|
|
|
|
0.03
|
|
|
-
|
|
|
|
|
|
0.01
|
|
Tax items
(d)
|
|
-
|
|
|
-
|
|
|
|
|
-
|
|
|
-
|
|
|
|
|
|
0.13
|
|
Acquisition
integration costs (e)
|
|
-
|
|
|
-
|
|
|
|
|
-
|
|
|
-
|
|
|
|
|
|
0.02
|
|
Venezuela
currency devaluation (f)
|
|
-
|
|
|
-
|
|
|
|
|
-
|
|
|
-
|
|
|
|
|
|
0.01
|
|
Indefinite-lived intangible asset impairment (g)
|
|
-
|
|
|
-
|
|
|
|
|
-
|
|
|
-
|
|
|
|
|
|
0.28
|
|
Diluted earnings per
share, excluding
certain
items affecting comparability
|
$
|
0.82
|
|
$
|
0.80
|
2
|
%
|
|
$
|
1.61
|
|
$
|
1.41
|
|
14
|
%
|
|
$
|
2.86
|
|
Foreign currency
exchange impact
|
|
|
|
|
|
(3)
|
%
|
|
|
|
|
|
|
|
(4)
|
%
|
|
|
|
|
Diluted earnings per
share growth,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
excluding certain items affecting
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
comparability, on a constant-currency basis
|
|
|
|
|
|
5
|
%
|
|
|
|
|
|
|
|
18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
See Note
4.
|
(b)
|
See Note
2.
|
(c)
|
See Note
3.
|
(d)
|
The fiscal 2015 tax
item is related to the one-time repatriation of foreign earnings in
fiscal 2015.
|
(e)
|
Integration costs
resulting from the acquisition of Annie's in fiscal
2015.
|
(f)
|
Impact of remeasuring
the assets and liabilities of our Venezuelan subsidiary following
currency devaluation in fiscal 2014.
|
(g)
|
Impact of an
impairment charge related to our Green Giant brand
intangible asset in fiscal 2015.
|
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
follows:
|
|
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
|
Quarter Ended Nov.
29, 2015
|
|
(1)%
|
(3) pts
|
2%
|
Six-Month Period
Ended Nov. 29, 2015
|
|
8 %
|
(4) pts
|
12%
|
Constant-currency International segment operating profit growth
rates follows:
|
|
|
Percentage Change
in
Segment Operating Profit as
Reported
|
Impact of
Foreign
Currency
Exchange
|
Percentage Change
in
International Segment Operating
Profit on Constant-Currency Basis
|
|
Quarter Ended Nov.
29, 2015
|
|
1 %
|
(18) pts
|
19%
|
|
Six-Month Period
Ended Nov. 29, 2015
|
|
(10)%
|
(18) pts
|
8%
|
Constant-currency International segment region net sales growth
rates follow:
|
|
|
Quarter Ended Nov.
29, 2015
|
|
|
|
Percentage Change
in
Net Sales as
Reported
|
Impact of
Foreign
Currency
Exchange
|
Percentage Change
in
Net Sales on Constant-
Currency Basis
|
|
Europe
|
|
(13)
|
%
|
(11)
|
pts
|
(2)
|
%
|
|
Canada
|
|
(13)
|
|
(16)
|
|
3
|
|
|
Asia/Pacific
|
|
(3)
|
|
(5)
|
|
2
|
|
|
Latin
America
|
|
(21)
|
|
(38)
|
|
17
|
|
|
Total
International
|
|
(12)
|
%
|
(15)
|
pts
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Six-Month Period
Ended Nov. 29, 2015
|
|
|
|
Percentage Change
in
Net Sales
as
Reported
|
Impact of
Foreign
Currency
Exchange
|
Percentage Change
in
Net Sales on Constant-
Currency Basis
|
|
Europe
|
|
(12)
|
%
|
(14)
|
pts
|
2
|
%
|
|
Canada
|
|
(12)
|
|
(16)
|
|
4
|
|
|
Asia/Pacific
|
|
(1)
|
|
(3)
|
|
2
|
|
|
Latin
America
|
|
(23)
|
|
(32)
|
|
9
|
|
|
Total
International
|
|
(12)
|
%
|
(16)
|
pts
|
4
|
%
|
Constant-currency after-tax earnings from joint ventures growth
rates follows:
|
|
Percentage Change
in After-tax
Earnings from Joint Ventures
as
Reported
|
Impact of
Foreign
Currency
Exchange
|
Percentage Change
in After-tax
Earnings from Joint Ventures
on Constant-Currency Basis
|
Quarter Ended Nov.
29, 2015
|
|
(15)%
|
(9) pts
|
(6)%
|
Six-Month Period
Ended Nov. 29, 2015
|
|
(8)%
|
(13) pts
|
5 %
|
Earnings comparisons as a percent of net sales excluding certain
items affecting comparability follow:
|
|
Quarter
Ended
|
|
In
Millions
|
|
Nov. 29,
2015
|
|
|
Nov. 23,
2014
|
|
|
Comparisons as a %
of Net Sales
|
|
Value
|
|
Percent
of
Net
Sales
|
|
|
|
Value
|
|
Percent
of
Net
Sales
|
|
|
Gross margin as
reported (a)
|
$
|
1,540.6
|
|
34.8
|
%
|
|
$
|
1,619.1
|
|
34.4
|
%
|
|
Mark-to-market
effects (b)
|
|
(7.7)
|
|
(0.2)
|
%
|
|
|
5.1
|
|
0.1
|
%
|
|
Restructuring
charges (c)
|
|
21.8
|
|
0.5
|
%
|
|
|
18.6
|
|
0.4
|
%
|
|
Project-related costs (c)
|
|
16.2
|
|
0.4
|
%
|
|
|
0.7
|
|
-
|
%
|
|
Adjusted gross
margin
|
$
|
1,570.9
|
|
35.5
|
%
|
|
$
|
1,643.5
|
|
34.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit as
reported
|
$
|
905.7
|
|
20.5
|
%
|
|
$
|
559.0
|
|
11.9
|
%
|
|
Mark-to-market
effects (b)
|
|
(7.7)
|
|
(0.2)
|
%
|
|
|
5.1
|
|
0.1
|
%
|
|
Restructuring
charges (c)
|
|
83.1
|
|
1.9
|
%
|
|
|
233.2
|
|
5.0
|
%
|
|
Project-related costs (c)
|
|
16.2
|
|
0.3
|
%
|
|
|
0.7
|
|
-
|
%
|
|
Divestiture
(gain), (d)
|
|
(199.1)
|
|
(4.5)
|
%
|
|
|
-
|
|
-
|
%
|
|
Acquisition
integration costs (e)
|
|
-
|
|
-
|
%
|
|
|
3.5
|
|
-
|
%
|
|
Adjusted operating
profit
|
$
|
798.2
|
|
18.0
|
%
|
|
$
|
801.5
|
|
17.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to General Mills as reported
|
$
|
529.5
|
|
12.0
|
%
|
|
$
|
346.1
|
|
7.4
|
%
|
|
Mark-to-market
effects, net of tax (b)
|
|
(4.9)
|
|
(0.1)
|
%
|
|
|
3.2
|
|
0.1
|
%
|
|
Restructuring
charges, net of tax (c)
|
|
52.8
|
|
1.2
|
%
|
|
|
147.0
|
|
3.1
|
%
|
|
Project-related costs, net of tax (c)
|
|
10.3
|
|
0.2
|
%
|
|
|
0.4
|
|
-
|
%
|
|
Divestiture
(gain), net of tax (d)
|
|
(88.1)
|
|
(2.0)
|
%
|
|
|
-
|
|
-
|
%
|
|
Acquisition
integration costs, net of tax (e)
|
|
-
|
|
-
|
%
|
|
|
2.7
|
|
-
|
%
|
|
Adjusted net earnings
attributable to General Mills
|
$
|
499.6
|
|
11.3
|
%
|
|
$
|
499.4
|
|
10.6
|
%
|
|
|
(a)
|
Net sales less cost
of sales.
|
|
|
(b)
|
See Note
4.
|
|
|
(c)
|
See Note
3.
|
|
|
(d)
|
See Note
2.
|
|
|
(e)
|
Integration costs
resulting from the acquisition of Annie's, Inc.
|
|
|
Six-Month Period
Ended
|
|
In
Millions
|
|
Nov. 29,
2015
|
|
|
Nov. 23,
2014
|
|
|
Comparisons as a %
of Net Sales
|
|
Value
|
|
Percent
of
Net
Sales
|
|
|
|
Value
|
|
Percent
of
Net
Sales
|
|
|
Gross margin as
reported (a)
|
$
|
3,095.2
|
|
35.8
|
%
|
|
$
|
3,057.8
|
|
34.1
|
%
|
|
Mark-to-market
effects (b)
|
|
(10.4)
|
|
(0.1)
|
%
|
|
|
54.3
|
|
0.6
|
%
|
|
Restructuring
charges (c)
|
|
43.6
|
|
0.5
|
%
|
|
|
18.6
|
|
0.2
|
%
|
|
Project-related costs (c)
|
|
29.3
|
|
0.4
|
%
|
|
|
0.7
|
|
-
|
%
|
|
Adjusted gross
margin
|
$
|
3,157.7
|
|
36.6
|
%
|
|
$
|
3,131.4
|
|
34.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit as
reported
|
$
|
1,589.0
|
|
18.4
|
%
|
|
$
|
1,116.5
|
|
12.4
|
%
|
|
Mark-to-market
effects (b)
|
|
(10.4)
|
|
(0.1)
|
%
|
|
|
54.3
|
|
0.6
|
%
|
|
Restructuring
charges (c)
|
|
165.0
|
|
1.9
|
%
|
|
|
247.2
|
|
2.8
|
%
|
|
Project-related costs (c)
|
|
29.3
|
|
0.3
|
%
|
|
|
0.7
|
|
-
|
%
|
|
Divestiture
(gain) (d)
|
|
(199.1)
|
|
(2.3)
|
%
|
|
|
-
|
|
-
|
%
|
|
Acquisition
integration costs (e)
|
|
-
|
|
-
|
%
|
|
|
3.5
|
|
-
|
%
|
|
Adjusted operating
profit
|
$
|
1,573.8
|
|
18.2
|
%
|
|
$
|
1,422.2
|
|
15.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to General Mills as reported
|
$
|
956.1
|
|
11.1
|
%
|
|
$
|
691.3
|
|
7.7
|
%
|
|
Mark-to-market
effects, net of tax (b)
|
|
(6.6)
|
|
(0.1)
|
%
|
|
|
34.2
|
|
0.4
|
%
|
|
Restructuring
charges, net of tax (c)
|
|
109.0
|
|
1.2
|
%
|
|
|
151.8
|
|
1.7
|
%
|
|
Project-related costs, net of tax (c)
|
|
18.5
|
|
0.2
|
%
|
|
|
0.4
|
|
-
|
%
|
|
Divestiture
(gain), net of tax (d)
|
|
(88.1)
|
|
(1.0)
|
%
|
|
|
-
|
|
-
|
%
|
|
Acquisition
integration costs, net of tax (e)
|
|
-
|
|
-
|
%
|
|
|
2.7
|
|
-
|
%
|
|
Adjusted net earnings
attributable to General Mills
|
$
|
988.9
|
|
11.4
|
%
|
|
$
|
880.4
|
|
9.8
|
%
|
|
|
(a)
|
Net sales less cost
of sales.
|
|
|
(b)
|
See Note
4.
|
|
|
(c)
|
See Note
3.
|
|
|
(d)
|
See Note
2.
|
|
|
(e)
|
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. 29,
2015
|
|
Nov. 23,
2014
|
|
Nov. 29,
2015
|
|
Nov. 23,
2014
|
|
In
Millions
|
Pretax
Earnings (a)
|
Income
Taxes
|
|
Pretax
Earnings (a)
|
Income
Taxes
|
|
Pretax
Earnings (a)
|
Income
Taxes
|
|
Pretax
Earnings (a)
|
Income
Taxes
|
|
As
reported
|
$ 831.9
|
$ 311.5
|
|
$ 481.7
|
$ 153.4
|
|
$ 1,439.9
|
$ 510.1
|
|
$ 960.7
|
$ 306.0
|
|
Mark-to-market effects (b)
|
(7.7)
|
(2.8)
|
|
5.1
|
1.9
|
|
(10.4)
|
(3.8)
|
|
54.3
|
20.1
|
|
Restructuring charges (c)
|
83.1
|
30.3
|
|
233.2
|
86.2
|
|
165.0
|
53.9
|
|
247.2
|
90.8
|
|
Project-related costs (c)
|
16.2
|
5.9
|
|
0.7
|
0.3
|
|
29.3
|
10.8
|
|
0.7
|
0.3
|
|
Divestiture (gain) (d)
|
(199.1)
|
(111.0)
|
|
-
|
-
|
|
(199.1)
|
(111.0)
|
|
-
|
-
|
|
Acquisition integration costs (e)
|
-
|
-
|
|
3.5
|
0.8
|
|
-
|
-
|
|
3.5
|
0.8
|
|
As
adjusted
|
$ 724.4
|
$ 233.9
|
|
$ 724.2
|
$ 242.6
|
|
$ 1,424.7
|
$ 460.0
|
|
$ 1,266.4
|
$ 418.0
|
|
Effective tax
rate:
|
|
|
|
|
|
|
|
|
|
|
|
|
As
reported
|
|
37.4%
|
|
|
31.8%
|
|
|
35.4%
|
|
|
31.8%
|
|
As
adjusted
|
|
32.3%
|
|
|
33.5%
|
|
|
32.3%
|
|
|
33.0%
|
|
|
(a)
|
Earnings before
income taxes and after-tax earnings from joint ventures.
|
|
|
(b)
|
See Note
4.
|
|
|
(c)
|
See Note
3.
|
|
|
(d)
|
See Note
2.
|
|
|
(e)
|
Integration costs
resulting from the acquisition of Annie's, Inc.
|
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SOURCE General Mills