10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED FEBRUARY 27, 2022

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO

Commission file number: 001-01185

________________

GENERAL MILLS, INC.

(Exact name of registrant as specified in its charter)

Delaware	41-0274440
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

Number One General Mills Boulevard
Minneapolis, Minnesota	55426
(Address of principal executive offices)	(Zip Code)

(763)764-7600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.10 par value	GIS	New York Stock Exchange
1.000% Notes due 2023	GIS23A	New York Stock Exchange
0.125% Notes due 2025	GIS25A	New York Stock Exchange
0.450% Notes due 2026	GIS26	New York Stock Exchange
1.500% Notes due 2027	GIS27	New York Stock Exchange

________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☑		Accelerated filer ☐		Non-accelerated filer ☐	Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

Number of shares of Common Stock outstanding as of March 14, 2022: 602,212,031 (excluding 152,401,297 shares held in the treasury).

General Mills, Inc.

Table of Contents

	Page
PART I – Financial Information
Item 1. Financial Statements
Consolidated Statements of Earnings for the quarters and nine-month periods ended February 27, 2022 and February 28, 2021	4
Consolidated Statements of Comprehensive Income for the quarters and nine-month periods ended February 27, 2022 and February 28, 2021	5
Consolidated Balance Sheets as of February 27, 2022 and May 30, 2021	6
Consolidated Statements of Total Equity and Redeemable Interest for the quarters and nine-month periods ended February 27, 2022 and February 28, 2021	7
Consolidated Statements of Cash Flows for the nine-month periods ended February 27, 2022 and February 28, 2021	9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3. Quantitative and Qualitative Disclosures About Market Risk	40
Item 4. Controls and Procedures	41
PART II – Other Information
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 6. Exhibits	42
Signatures	43

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Consolidated Statements of Earnings
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions, Except per Share Data)

	Quarter Ended				Nine-Month Period Ended
	Feb. 27, 2022		Feb. 28, 2021			Feb. 27, 2022	Feb. 28, 2021
Net sales	$	4,537.7	$	4,520.0	$	14,101.6	$	13,603.4
Cost of sales		3,134.0		2,966.1		9,469.3		8,738.0
Selling, general, and administrative expenses		751.4		716.3		2,337.6		2,256.6
Divestitures gain		(170.1)		-		(170.1)		-
Restructuring, impairment, and other exit costs		7.1		11.0		5.1		11.9
Operating profit		815.3		826.6		2,459.7		2,596.9
Benefit plan non-service income		(27.1)		(33.4)		(84.4)		(99.6)
Interest, net		86.5		106.0		275.1		317.7
Earnings before income taxes and after-tax earnings from joint ventures		755.9		754.0		2,269.0		2,378.8
Income taxes		123.2		162.0		451.8		522.2
After-tax earnings from joint ventures		29.9		11.8		92.0		89.5
Net earnings, including earnings attributable to redeemable and noncontrolling interests		662.6		603.8		1,909.2		1,946.1
Net earnings attributable to redeemable and noncontrolling interests		2.3		8.1		24.7		23.1
Net earnings attributable to General Mills	$	660.3	$	595.7	$	1,884.5	$	1,923.0
Earnings per share – basic	$	1.09	$	0.97	$	3.10	$	3.13
Earnings per share – diluted	$	1.08	$	0.96	$	3.07	$	3.10

See accompanying notes to consolidated financial statements.

Consolidated Statements of Comprehensive Income
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions)

	Quarter Ended				Nine-Month Period Ended
	Feb. 27, 2022		Feb. 28, 2021		Feb. 27, 2022		Feb. 28, 2021
Net earnings, including earnings attributable to redeemable and noncontrolling interests	$	662.6	$	603.8	$	1,909.2	$	1,946.1
Other comprehensive (loss) income, net of tax:
Foreign currency translation		(122.5)		12.5		(184.9)		102.4
Other fair value changes:
Hedge derivatives		(30.8)		0.1		(10.4)		(10.1)
Reclassification to earnings:
Foreign currency translation		342.2		-		342.2		-
Amortization of losses and prior service costs		22.3		19.8		53.5		59.1
Hedge derivatives		30.2		5.4		34.4		4.7
Other comprehensive income, net of tax		241.4		37.8		234.8		156.1
Total comprehensive income		904.0		641.6		2,144.0		2,102.2
Comprehensive income (loss) attributable to redeemable and noncontrolling interests		2.3		21.0		(47.0)		107.5
Comprehensive income attributable to General Mills	$	901.7	$	620.6	$	2,191.0	$	1,994.7

See accompanying notes to consolidated financial statements.

Consolidated Balance Sheets
GENERAL MILLS, INC. AND SUBSIDIARIES
(In Millions, Except Par Value)
	Feb. 27, 2022		May 30, 2021
		(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	844.4	$	1,505.2
Receivables		1,750.4		1,638.5
Inventories		1,710.0		1,820.5
Prepaid expenses and other current assets		723.8		790.3
Total current assets		5,028.6		5,754.5
Land, buildings, and equipment		3,287.9		3,606.8
Goodwill		14,546.7		14,062.4
Other intangible assets		7,010.9		7,150.6
Other assets		1,269.7		1,267.6
Total assets	$	31,143.8	$	31,841.9
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	3,474.6	$	3,653.5
Current portion of long-term debt		600.7		2,463.8
Notes payable		724.3		361.3
Other current liabilities		2,039.4		1,787.2
Total current liabilities		6,839.0		8,265.8
Long-term debt		10,944.7		9,786.9
Deferred income taxes		2,166.0		2,118.4
Other liabilities		1,118.4		1,292.7
Total liabilities		21,068.1		21,463.8
Redeemable interest		-		604.9
Stockholders' equity:
Common stock, 754.6 shares issued, $0.10 par value		75.5		75.5
Additional paid-in capital		1,162.3		1,365.5
Retained earnings		17,713.1		17,069.8
Common stock in treasury, at cost, shares of 152.4 and 146.9		(7,015.3)		(6,611.2)
Accumulated other comprehensive loss		(2,122.7)		(2,429.2)
Total stockholders' equity		9,812.9		9,470.4
Noncontrolling interests		262.8		302.8
Total equity		10,075.7		9,773.2
Total liabilities and equity	$	31,143.8	$	31,841.9

See accompanying notes to consolidated financial statements.

Consolidated Statements of Total Equity and Redeemable Interest
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions, Except per Share Data)

	Quarter Ended
	Feb. 27, 2022			Feb. 28, 2021
	Shares	Amount		Shares	Amount
Total equity, beginning balance		$	9,804.7		$	8,852.6
Common stock, 1 billion shares authorized, $0.10 par value	754.6		75.5	754.6		75.5
Additional paid-in capital:
Beginning balance			1,365.1			1,333.3
Stock compensation plans			11.5			(8.3)
Unearned compensation related to stock unit awards			(19.1)			(0.5)
Earned compensation			31.7			20.7
Decrease in redemption value of redeemable interest			-			8.6
Reversal of cumulative redeemable interest value adjustments			(207.4)			-
Acquisition of noncontrolling interest			(19.5)			-
Ending balance			1,162.3			1,353.8
Retained earnings:
Beginning balance			17,363.2			16,374.2
Net earnings attributable to General Mills			660.3			595.7
Cash dividends declared ($0.51 and $0.51 per share)			(310.4)			(314.9)
Ending balance			17,713.1			16,655.0
Common stock in treasury:
Beginning balance	(151.4)		(6,915.2)	(143.2)		(6,365.4)
Shares purchased	(2.6)		(175.5)	-		(0.5)
Stock compensation plans	1.6		75.4	0.4		14.6
Ending balance	(152.4)		(7,015.3)	(142.8)		(6,351.3)
Accumulated other comprehensive loss:
Beginning balance			(2,364.1)			(2,867.6)
Other comprehensive income			241.4			24.9
Ending balance			(2,122.7)			(2,842.7)
Noncontrolling interests:
Beginning balance			280.2			302.6
Comprehensive income			2.3			3.7
Distributions to noncontrolling interest holders			(108.3)			(8.7)
Reclassification from redeemable interest			561.6			-
Reversal of cumulative redeemable interest value adjustments			207.4			-
Divestiture			(680.4)			-
Ending balance			262.8			297.6
Total equity, ending balance		$	10,075.7		$	9,187.9
Redeemable interest:
Beginning balance		$	561.6		$	587.7
Comprehensive income			-			17.3
Decrease in redemption value of redeemable interest			-			(8.6)
Distributions to redeemable interest holder			-			(0.4)
Reclassification to noncontrolling interest			(561.6)			-
Ending balance		$	-		$	596.0
See accompanying notes to consolidated financial statements.

Consolidated Statements of Total Equity and Redeemable Interest
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions, Except per Share Data)

	Nine-Month Period Ended
	Feb. 27, 2022			Feb. 28, 2021
	Shares	Amount		Shares	Amount
Total equity, beginning balance		$	9,773.2		$	8,349.5
Common stock, 1 billion shares authorized, $0.10 par value	754.6		75.5	754.6		75.5
Additional paid-in capital:
Beginning balance			1,365.5			1,348.6
Stock compensation plans			15.5			12.9
Unearned compensation related to stock unit awards			(91.3)			(78.2)
Earned compensation			85.4			68.9
Decrease in redemption value of redeemable interest			14.1			1.6
Reversal of cumulative redeemable interest value adjustments			(207.4)			-
Acquisition of noncontrolling interest			(19.5)			-
Ending balance			1,162.3			1,353.8
Retained earnings:
Beginning balance			17,069.8			15,982.1
Net earnings attributable to General Mills			1,884.5			1,923.0
Cash dividends declared ($2.04 and $2.02 per share)			(1,241.2)			(1,244.4)
Adoption of current expected credit loss accounting requirements			-			(5.7)
Ending balance			17,713.1			16,655.0
Common stock in treasury:
Beginning balance	(146.9)		(6,611.2)	(144.8)		(6,433.3)
Shares purchased	(8.8)		(550.5)	-		(0.6)
Stock compensation plans	3.3		146.4	2.0		82.6
Ending balance	(152.4)		(7,015.3)	(142.8)		(6,351.3)
Accumulated other comprehensive loss:
Beginning balance			(2,429.2)			(2,914.4)
Other comprehensive income			306.5			71.7
Ending balance			(2,122.7)			(2,842.7)
Noncontrolling interests:
Beginning balance			302.8			291.0
Comprehensive (loss) income			(17.8)			31.8
Distributions to noncontrolling interest holders			(110.8)			(25.2)
Reclassification from redeemable interest			561.6			-
Reversal of cumulative redeemable interest value adjustments			207.4			-
Divestiture			(680.4)			-
Ending balance			262.8			297.6
Total equity, ending balance		$	10,075.7		$	9,187.9
Redeemable interest:
Beginning balance		$	604.9		$	544.6
Comprehensive (loss) income			(29.2)			75.7
Decrease in redemption value of redeemable interest			(14.1)			(1.6)
Distributions to redeemable interest holder			-			(22.7)
Reclassification to noncontrolling interest			(561.6)			-
Ending balance		$	-		$	596.0
See accompanying notes to consolidated financial statements.

Consolidated Statements of Cash Flows
GENERAL MILLS, INC. AND SUBSIDIARIES
(Unaudited) (In Millions)
	Nine-Month Period Ended
	Feb. 27, 2022		Feb. 28, 2021
Cash Flows - Operating Activities
Net earnings, including earnings attributable to redeemable and noncontrolling interests	$	1,909.2	$	1,946.1
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		430.6		454.5
After-tax earnings from joint ventures		(92.0)		(89.5)
Distributions of earnings from joint ventures		49.0		41.9
Stock-based compensation		80.3		69.5
Deferred income taxes		81.3		110.9
Pension and other postretirement benefit plan contributions		(20.7)		(25.7)
Pension and other postretirement benefit plan costs		(10.6)		(25.5)
Divestitures gain		(170.1)		-
Restructuring, impairment, and other exit costs		(62.5)		5.7
Changes in current assets and liabilities, excluding the effects of acquisition and divestitures		91.5		(145.4)
Other, net		(57.9)		(134.6)
Net cash provided by operating activities		2,228.1		2,207.9
Cash Flows - Investing Activities
Purchases of land, buildings, and equipment		(350.6)		(346.4)
Acquisition		(1,201.3)		-
Proceeds from divestitures, net of cash divested		46.1		-
Investments in affiliates, net		30.1		18.1
Proceeds from disposal of land, buildings, and equipment		1.6		1.8
Other, net		12.3		(5.5)
Net cash used by investing activities		(1,461.8)		(332.0)
Cash Flows - Financing Activities
Change in notes payable		471.5		(96.9)
Issuance of long-term debt		1,935.2		1,576.5
Payment of long-term debt		(2,278.2)		(1,159.0)
Debt exchange participation incentive cash payment		-		(201.4)
Proceeds from common stock issued on exercised options		96.2		39.4
Purchases of common stock for treasury		(550.5)		(0.6)
Dividends paid		(934.1)		(932.4)
Distributions to noncontrolling and redeemable interest holders		(110.8)		(47.9)
Other, net		(26.8)		(30.4)
Net cash used by financing activities		(1,397.5)		(852.7)
Effect of exchange rate changes on cash and cash equivalents		(29.6)		53.2
(Decrease) increase in cash and cash equivalents		(660.8)		1,076.4
Cash and cash equivalents - beginning of year		1,505.2		1,677.8
Cash and cash equivalents - end of period	$	844.4	$	2,754.2
Cash Flow from changes in current assets and liabilities, excluding the effects of acquisition and divestitures:
Receivables	$	(214.5)	$	(119.2)
Inventories		102.5		(302.2)
Prepaid expenses and other current assets		41.5		58.8
Accounts payable		(14.0)		154.7
Other current liabilities		176.0		62.5
Changes in current assets and liabilities	$	91.5	$	(145.4)
See accompanying notes to consolidated financial statements.

GENERAL MILLS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) Background

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 (GAAP) for interim financial information and with the rules and regulations for reporting on Form 10-Q. Accordingly, they do not include certain information and disclosures required for comprehensive financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal recurring nature, including the elimination of all intercompany transactions and any noncontrolling and redeemable interests’ share of those transactions. Operating results for the quarter ended February 27, 2022, are not necessarily indicative of the results that may be expected for the fiscal year ending May 29, 2022.

These statements should be read in conjunction with the Consolidated Financial Statements and footnotes included in our Annual Report on Form 10-K for the fiscal year ended May 30, 2021. The accounting policies used in preparing these Consolidated Financial Statements are the same as those described in Note 2 to the Consolidated Financial Statements in that Form 10-K.

Certain terms used throughout this report are defined in the “Glossary” section below.

(2) Acquisition and Divestitures

During the third quarter of fiscal 2022, we completed the sale of our interests in Yoplait SAS, Yoplait Marques SNC and Liberté Marques Sàrl to Sodiaal International (Sodiaal) in exchange for Sodiaal’s interest in our Canadian yogurt business, a modified agreement for the use of Yoplait and Liberté brands in the United States and Canada, and cash. We recorded a net pre-tax gain of $148.8 million on the sale of these businesses during the third quarter of fiscal 2022. These transactions are subject to sale price adjustments in future periods that could impact the net pre-tax gain recorded.

During the second quarter of fiscal 2022, we entered into definitive agreements to sell our European dough businesses. During the third quarter of fiscal 2022, we recorded a net pre-tax gain on sale of $21.3 million related to certain of these agreements and the remaining transactions are expected to close by the end of fiscal 2022, subject to appropriate labor consultations, regulatory approvals, and other customary closing conditions. The associated assets and liabilities have an immaterial impact on the presentation of our Consolidated Balance Sheets as of February 27, 2022.

During the first quarter of fiscal 2022, we acquired the Tyson Foods’ pet treats business for $1.2 billion in cash. We financed the transaction with a combination of cash on hand and short-term debt. We consolidated the Tyson Foods’ pet treats business into our Consolidated Balance Sheets and recorded goodwill of $759.4 million, indefinite-lived intangible assets for the Nudges, Top Chews and True Chews brands totaling $330.0 million in aggregate, and a finite-lived customer relationship asset of $40.0 million. The goodwill is included in the Pet reporting unit and is deductible for tax purposes. The pro forma effects of this acquisition were not material. The consolidated results of the Tyson Foods’ pet treat business are reported in our Pet operating segment on a one-month lag. Accordingly, our Consolidated Statements of Earnings include seven months of operating results for the acquired business for the nine-month period ended February 27, 2022. In the third quarter of fiscal 2022, we recorded a purchase price adjustment that resulted in a $2.9 million increase to goodwill.

(3) Restructuring, Impairment, and Other Exit Costs

Restructuring charges were as follows:

	Quarter Ended				Nine-Month Period Ended
In Millions	Feb. 27, 2022		Feb. 28, 2021		Feb. 27, 2022		Feb. 28, 2021
International manufacturing and logistics operations	$	1.7	$	-	$	14.3	$	-
Charges (recoveries) associated with restructuring actions previously announced		7.6		11.7		(6.4)		13.6
Total restructuring charges	$	9.3	$	11.7	$	7.9	$	13.6

In the third quarter of fiscal 2022, we did not undertake any new restructuring actions. We recorded $1.7 million of restructuring charges in the third quarter of fiscal 2022 and $14.3 million of restructuring charges in the nine-month period ended February 27, 2022, related to the restructuring actions in the International segment to drive efficiencies in manufacturing and logistics operations approved in the second quarter of fiscal 2022. We recorded $7.6 million of restructuring charges in the third quarter of fiscal 2022 and a $6.4 million net recovery of restructuring charges in the nine-month period ended February 27, 2022, related to restructuring actions

previously announced. We recorded $11.7 million of restructuring charges in the third quarter of fiscal 2021 and $13.6 million of restructuring charges in the nine-month period ended February 28, 2021, related to restructuring actions previously announced. The charges associated with restructuring actions previously announced primarily related to actions designed to better align our organizational structure and resources with strategic initiatives and drive efficiencies in manufacturing and logistics operations. We expect these actions to be completed by the end of fiscal 2024. Certain actions are subject to union negotiations and works counsel consultations, where required.

In the third quarter of fiscal 2022, we decreased the estimate of expected restructuring charges that we expect to incur related to actions designed to better align our organizational structure and resources with strategic initiatives to approximately $150 million to $160 million, of which approximately $120 million to $130 million will be cash. These charges are expected to consist primarily of severance and other benefits costs and other charges, including consulting and professional fees, contract termination costs, and fixed asset write-offs.

We paid net $70.4 million of cash in the nine-month period ended February 27, 2022, related to restructuring actions previously announced. We paid net $7.9 million of cash in the same period of fiscal 2021.

Restructuring charges are recorded in our Consolidated Statements of Earnings as follows:

	Quarter Ended				Nine-Month Period Ended
In Millions	Feb. 27, 2022		Feb. 28, 2021		Feb. 27, 2022		Feb. 28, 2021
Restructuring, impairment, and other exit costs	$	7.1	$	11.0	$	5.1	$	11.9
Cost of sales		2.2		0.7		2.8		1.7
Total restructuring charges	$	9.3	$	11.7	$	7.9	$	13.6

The roll forward of our restructuring and other exit cost reserves, included in other current liabilities, is as follows:

In Millions	Total
Reserve balance as of May 30, 2021	$	148.8
Fiscal 2022 charges, including foreign currency translation		1.4
Utilized in fiscal 2022		(61.4)
Reserve balance as of Feb. 27, 2022	$	88.8

The reserve balance primarily consists of expected severance payments associated with restructuring actions.

The charges recognized in the roll forward of our reserves for restructuring and other exit costs do not include items charged directly to expense (e.g., asset impairment charges, accelerated depreciation, the gain or loss on the sale of restructured assets, and the write-off of spare parts) and other periodic exit costs are recognized as incurred, as those items are not reflected in our restructuring and other exit cost reserves on our Consolidated Balance Sheets.

(4) Goodwill and Other Intangible Assets

The components of goodwill and other intangible assets are as follows:

In Millions	Feb. 27, 2022		May 30, 2021
Goodwill	$	14,546.7	$	14,062.4
Other intangible assets:
Intangible assets not subject to amortization:
Brands and other indefinite-lived intangibles		6,731.2		6,628.1
Intangible assets subject to amortization:
Franchise agreements, customer relationships, and other finite-lived intangibles		403.3		823.4
Less accumulated amortization		(123.6)		(300.9)
Intangible assets subject to amortization, net		279.7		522.5
Other intangible assets		7,010.9		7,150.6
Total	$	21,557.6	$	21,213.0

Based on the carrying value of finite-lived intangible assets as of February 27, 2022, annual amortization expense for each of the next five fiscal years is estimated to be approximately $20 million.

During the third quarter of fiscal 2022, we changed our organizational and management structure to streamline our global operations. As a result of these changes, we reassessed our operating segments as well as our reporting units. Under our new organizational structure, our chief operating decision maker assesses performance and makes decisions about resources to be allocated to our segments at the North America Retail, International, Pet, and North America Foodservice operating segment level. See Note 17 for additional information on our operating segments.

The changes in the carrying amount of goodwill during the nine-month period ended February 27, 2022, were as follows:

In Millions	North America Retail		Pet		North America Foodservice		International		Joint Ventures		Total
Balance as of May 30, 2021	$	6,689.3	$	5,300.5	$	648.8	$	978.2	$	445.6	$	14,062.4
Acquisition		-		762.3		-		-		-		762.3
Divestitures		-		-		-		(198.8)		-		(198.8)
Other activity, primarily foreign currency translation		(6.3)		-		-		(39.1)		(33.8)		(79.2)
Balance as of Feb. 27, 2022	$	6,683.0	$	6,062.8	$	648.8	$	740.3	$	411.8	$	14,546.7

The changes in the carrying amount of other intangible assets during the nine-month period ended February 27, 2022, were as follows:

In Millions		Total
Balance as of May 30, 2021	$	7,150.6
Acquisition		370.0
Divestitures		(621.8)
Intellectual property intangible asset		210.4
Other activity, primarily foreign currency translation		(98.3)
Balance as of Feb. 27, 2022	$	7,010.9

Our annual goodwill and indefinite-lived intangible assets impairment test was performed on the first day of the second quarter of fiscal 2022, and we determined there was no impairment of our intangible assets as their related fair values were substantially in excess of the carrying values, except for the Uncle Toby’s brand intangible asset.

The excess fair value as of the fiscal 2022 test date of the Uncle Toby’s brand intangible asset is as follows:

In Millions		Carrying Value of Intangible Asset			Excess Fair Value as of Fiscal 2022 Test Date
Uncle Toby's	$	55.0			7%

In addition, while having significant coverage as of our fiscal 2022 assessment date, the Progresso, Green Giant, and EPIC brand intangible assets had risk of decreasing coverage. We will continue to monitor these businesses for potential impairment.

The organizational changes also resulted in changes in certain reporting units, one level below the segment level, and were considered a triggering event that required a goodwill impairment test during the third quarter of fiscal 2022. We determined there was no impairment of the goodwill of the impacted reporting units as their related fair values were substantially in excess of the carrying values.

(5) Inventories

The components of inventories were as follows:

In Millions	Feb. 27, 2022		May 30, 2021
Raw materials and packaging	$	458.4	$	411.9
Finished goods		1,408.5		1,506.9
Grain		168.3		111.2
Excess of FIFO over LIFO cost		(325.2)		(209.5)
Total	$	1,710.0	$	1,820.5

(6) Risk Management Activities

Many commodities we use in the production and distribution of our products are exposed to market price risks. We utilize derivatives to manage price risk for our principal ingredients and energy costs, including grains (oats, wheat, and corn), oils (principally soybean), dairy products, natural gas, and diesel fuel. Our primary objective when entering into these derivative contracts is to achieve certainty with regard to the future price of commodities purchased for use in our supply chain. We manage our exposures through a combination of purchase orders, long-term contracts with suppliers, exchange-traded futures and options, and over-the-counter options and swaps. We offset our exposures based on current and projected market conditions and generally seek to acquire the inputs at as close as possible to or below our planned cost.

We use derivatives to manage our exposure to changes in commodity prices. We do not perform the assessments required to achieve hedge accounting for commodity derivative positions. Accordingly, the changes in the values of these derivatives are recorded currently in cost of sales in our Consolidated Statements of Earnings.

Although we do not meet the criteria for cash flow hedge accounting, we believe that these instruments are effective in achieving our objective of providing certainty in the future price of commodities purchased for use in our supply chain. Accordingly, for purposes of measuring segment operating performance, these gains and losses are reported in unallocated corporate items outside of segment operating results until such time that the exposure we are managing affects earnings. At that time we reclassify the gain or loss from unallocated corporate items to segment operating profit, allowing our operating segments to realize the economic effects of the derivative without experiencing any resulting mark-to-market volatility, which remains in unallocated corporate items.

Unallocated corporate items for the quarters and nine-month periods ended February 27, 2022, and February 28, 2021, included:

	Quarter Ended				Nine-Month Period Ended
In Millions	Feb. 27, 2022		Feb. 28, 2021		Feb. 27, 2022		Feb. 28, 2021
Net gain on mark-to-market valuation of certain commodity positions	$	72.3	$	51.0	$	119.3	$	95.0
Net (gain) loss on commodity positions reclassified from unallocated corporate items to segment operating profit		(48.1)		(3.9)		(118.7)		12.8
Net mark-to-market revaluation of certain grain inventories		(44.2)		8.6		15.6		10.2
Net mark-to-market valuation of certain commodity positions recognized in unallocated corporate items	$	(20.0)	$	55.7	$	16.2	$	118.0

As of February 27, 2022, the net notional value of commodity derivatives was $634.1 million, of which $147.7 million related to energy inputs and $486.4 million related to agricultural inputs. These contracts relate to inputs that generally will be utilized within the next 12 months.

The fair values of the derivative positions used in our risk management activities and other assets recorded at fair value were not material as of February 27, 2022 and were Level 1 or Level 2 assets and liabilities in the fair value hierarchy. We did not significantly change our valuation techniques from prior periods.

We offer certain suppliers access to third party services that allow them to view our scheduled payments online. The third party services also allow suppliers to finance advances on our scheduled payments at the sole discretion of the supplier and the third party. We have no economic interest in these financing arrangements and no direct relationship with the suppliers, the third parties, or any financial institutions concerning these services. All of our accounts payable remain as obligations to our suppliers as stated in our supplier agreements. As of February 27, 2022, $1,382.8 million of our total accounts payable were payable to suppliers who utilize these third party services. As of February 28, 2021, $1,420.3 million of our total accounts payable were payable to suppliers who utilize these third party services.

(7) Debt

The components of notes payable were as follows:

In Millions	Feb. 27, 2022		May 30, 2021
U.S. commercial paper	$	604.5	$	-
Financial institutions		119.8		361.3
Total	$	724.3	$	361.3

To ensure availability of funds, we maintain bank credit lines and have commercial paper programs available to us in the United States and Europe. We also have committed and asset-backed credit lines that support our foreign operations.

The following table details the fee-paid committed and uncommitted credit lines we had available as of February 27, 2022:

In Billions	Facility Amount		Borrowed Amount
Credit facility expiring:
April 2026	$	2.7	$	-
Total committed credit facilities		2.7		-
Uncommitted credit facilities		0.6		0.1
Total committed and uncommitted credit facilities	$	3.3	$	0.1

The credit facilities contain covenants, including a requirement to maintain a fixed charge coverage ratio of at least 2.5 times. We were in compliance with all credit facility covenants as of February 27, 2022.

Long-Term Debt

The fair values and carrying amounts of long-term debt, including the current portion, were $11,841.5 million and $11,545.4 million, respectively, as of February 27, 2022. The fair value of long-term debt was estimated using market quotations and discounted cash flows based on our current incremental borrowing rates for similar types of instruments. Long-term debt is a Level 2 liability in the fair value hierarchy.

In the second quarter of fiscal 2022, we repaid €500.0 million of 0.0 percent fixed-rate notes due November 16, 2021 using proceeds from the issuance of €500.0 million of 0.125 percent fixed-rate notes due November 15, 2025.

In the second quarter of fiscal 2022, we issued €250.0 million of floating-rate notes due May 16, 2023. We used the net proceeds to repay a portion of our outstanding commercial paper and for general corporate purposes.

In the second quarter of fiscal 2022, we repaid $1,000.0 million of 3.15 percent fixed-rate notes due December 15, 2021 using proceeds from the issuance of $500.0 million of 2.25 percent notes due October 14, 2031 and commercial paper. The notes were redeemed on October 14, 2021.

In the first quarter of fiscal 2022, we issued €500.0 million of floating-rate notes due July 27, 2023. We used the net proceeds to repay €500.0 million of 0.0 percent fixed-rate notes due August 21, 2021.

In the first quarter of fiscal 2022, we repaid €200.0 million of 2.2 percent fixed-rate notes due June 24, 2021 using proceeds from the issuance of €50.0 million of 2.2 percent fixed-rate notes due November 29, 2021 and borrowings under a committed credit facility.

In the fourth quarter of fiscal 2021, we repaid $600.0 million of 3.2 percent fixed-rate notes and $850.0 million of floating-rate notes with cash on hand.

In the third quarter of fiscal 2021, we completed an offer to exchange certain series of outstanding notes for a combination of newly issued notes and cash. Holders exchanged $603.9 million of notes previously issued with rates between 4.15 percent and 5.4 percent for $605.2 million of newly issued 3.0 percent fixed-rate notes due February 1, 2051 and $201.4 million of cash, representing a participation incentive.

In the second quarter of fiscal 2021, we issued €500.0 million principal amount of 0.0 percent fixed-rate notes due November 16, 2021. We used the net proceeds to repay €200.0 million of 0.0 percent fixed-rate notes and for general corporate purposes.

In the first quarter of fiscal 2021, we issued €500.0 million principal amount of 0.0 percent fixed-rate notes due August 21, 2021. We used the net proceeds, together with cash on hand, to repay €500.0 million of 2.1 percent fixed-rate notes.

Certain of our long-term debt agreements contain restrictive covenants. As of February 27, 2022, we were in compliance with all of these covenants.

(8) Redeemable and Noncontrolling Interests

During the third quarter of fiscal 2022, we completed the sale of our interests in Yoplait SAS, Yoplait Marques SNC and Liberté Marques Sàrl to Sodiaal in exchange for Sodiaal’s interest in our Canadian yogurt business, a modified agreement for the use of Yoplait and Liberté brands in the United States and Canada, and cash. Please see Note 2 to the Consolidated Financial Statements.

Up to the date of the divestiture, Sodiaal held the remaining interests in each of the entities. On the acquisition date, we recorded the fair value of Sodiaal’s 49 percent euro-denominated interest in Yoplait SAS as a redeemable interest on our Consolidated Balance Sheets. Sodiaal had the right to put all or a portion of its redeemable interest to us at fair value until the divestiture closed in the third quarter of fiscal 2022. In connection with the divestiture, cumulative adjustments made to the redeemable interest related to the fair value put feature were reversed against additional paid-in capital, where changes in the redemption amount were historically recorded, and the resulting carrying value of the noncontrolling interests were included in the calculation of the gain on divestiture.

A subsidiary of Yoplait SAS had an exclusive milk supply agreement for its European operations with Sodiaal through November 28, 2021. Net purchases totaled $99.5 million for the six-month period ended November 28, 2021, and $155.0 million for the nine-month period ended February 28, 2021.

The third-party holder of the General Mills Cereals, LLC (GMC) Class A Interests receives quarterly preferred distributions from available net income based on the application of a floating preferred return rate to the holder’s capital account balance established in the most recent mark-to-market valuation (currently $251.5 million). On June 1, 2021, the floating preferred return rate on GMC’s Class A Interests was reset to the sum of three-month LIBOR plus 160 basis points. The preferred return rate is adjusted every three years through a negotiated agreement with the Class A Interest holder or through a remarketing auction.

Our noncontrolling interests contain restrictive covenants. As of February 27, 2022, we were in compliance with all of these covenants.

(9) Stockholders’ Equity

The following tables provide details of total comprehensive income:

		Quarter Ended										Quarter Ended
		Feb. 27, 2022										Feb. 28, 2021
		General Mills						Noncontrolling Interests		Redeemable Interest		General Mills						Noncontrolling Interests		Redeemable Interest
In Millions		Pretax		Tax		Net		Net		Net		Pretax		Tax		Net		Net		Net
Net earnings, including earnings attributable to redeemable and noncontrolling interests					$	660.3	$	2.3		-					$	595.7	$	1.1	$	7.0
Other comprehensive income (loss):
Foreign currency translation	$	(125.7)	$	3.2		(122.5)		-		-	$	(7.8)	$	6.7		(1.1)		2.6		11.0
Other fair value changes:
Hedge derivatives		(23.9)		(6.9)		(30.8)		-		-		2.5		(1.5)		1.0		-		(0.9)
Reclassification to earnings:
Foreign currency translation (a)		342.2		-		342.2		-		-		-		-		-		-		-
Amortization of losses and prior service costs (b)		28.8		(6.5)		22.3		-		-		25.6		(5.8)		19.8		-		-
Hedge derivatives (c)		23.1		7.1		30.2		-		-		6.8		(1.6)		5.2		-		0.2
Other comprehensive income (loss)	$	244.5	$	(3.1)		241.4		-		-	$	27.1	$	(2.2)		24.9		2.6		10.3
Total comprehensive income					$	901.7	$	2.3	$	-					$	620.6	$	3.7	$	17.3

(a)Loss reclassified from AOCI into earnings is reported in divestitures gain related to the divestiture of our interests in Yoplait SAS, Yoplait Marques SNC and Liberte Marques Sarl to Sodiaal in the third quarter of fiscal 2022.

(b)Loss reclassified from AOCI into earnings is reported in benefit plan non-service income.

(c)Loss reclassified from AOCI into earnings is reported in interest, net for interest rate swaps and in cost of sales and SG&A expenses for foreign exchange contracts.

		Nine-Month Period Ended										Nine-Month Period Ended
		Feb. 27, 2022										Feb. 28, 2021
		General Mills						Noncontrolling Interests		Redeemable Interest		General Mills						Noncontrolling Interests		Redeemable Interest
In Millions		Pretax		Tax		Net		Net		Net		Pretax		Tax		Net		Net		Net
Net earnings, including earnings attributable to redeemable and noncontrolling interests					$	1,884.5	$	7.2	$	17.5					$	1,923.0	$	3.9	$	19.2
Other comprehensive income (loss):
Foreign currency translation	$	(166.6)	$	53.7		(112.9)		(25.0)		(47.0)	$	(41.4)	$	58.3		16.9		27.9		57.6
Other fair value changes:
Hedge derivatives		8.0		(18.9)		(10.9)		-		0.5		(11.1)		2.0		(9.1)		-		(1.0)
Reclassification to earnings:
Foreign currency translation (a)		342.2		-		342.2
Amortization of losses and prior service costs (b)		68.8		(15.3)		53.5		-		-		76.7		(17.6)		59.1		-		-
Hedge derivatives (c)		23.0		11.6		34.6		-		(0.2)		6.7		(1.9)		4.8		-		(0.1)

Other comprehensive income (loss)	$	275.4	$	31.1		306.5		(25.0)		(46.7)	$	30.9	$	40.8		71.7		27.9		56.5
Total comprehensive income (loss)					$	2,191.0	$	(17.8)	$	(29.2)					$	1,994.7	$	31.8	$	75.7

(b)Loss reclassified from AOCI into earnings is reported in benefit plan non-service income.

(c)Loss reclassified from AOCI into earnings is reported in interest, net for interest rate swaps and in cost of sales and SG&A expenses for foreign exchange contracts.

Accumulated other comprehensive loss balances, net of tax effects, were as follows:

In Millions	Feb. 27, 2022		May 30, 2021
Foreign currency translation adjustments	$	(600.9)	$	(830.2)
Unrealized gain (loss) from:
Hedge derivatives		5.2		(18.5)
Pension, other postretirement, and postemployment benefits:
Net actuarial loss		(1,641.5)		(1,718.4)
Prior service credits		114.5		137.9
Accumulated other comprehensive loss	$	(2,122.7)	$	(2,429.2)

(10) Stock Plans

We have various stock-based compensation programs under which awards, including stock options, restricted stock, restricted stock units, and performance awards, may be granted to employees and non-employee directors. These programs and related accounting are described in Note 12 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended May 30, 2021.

Compensation expense related to stock-based payments recognized in the Consolidated Statements of Earnings was as follows:

	Quarter Ended				Nine-Month Period Ended
In Millions	Feb. 27, 2022		Feb. 28, 2021		Feb. 27, 2022		Feb. 28, 2021
Compensation expense related to stock-based payments	$	31.4	$	20.8	$	78.9	$	69.5

Compensation expense related to stock-based payments recognized in the Consolidated Statements of Earnings includes amounts recognized in restructuring, impairment, and other exit costs in fiscal 2022.

Windfall tax benefits from stock-based payments in income tax expense in our Consolidated Statements of Earnings were as follows:

	Quarter Ended				Nine-Month Period Ended
In Millions	Feb. 27, 2022		Feb. 28, 2021		Feb. 27, 2022		Feb. 28, 2021
Windfall tax benefits from stock-based payments	$	6.7	$	1.6	$	13.0	$	8.4

As of February 27, 2022, unrecognized compensation expense related to non-vested stock options, restricted stock units, and performance share units was $120.5 million. This expense will be recognized over 21 months, on average.

Net cash proceeds from the exercise of stock options less shares used for withholding taxes and the intrinsic value of options exercised were as follows:

	Nine-Month Period Ended
In Millions	Feb. 27, 2022		Feb. 28, 2021
Net cash proceeds	$	96.2	$	39.4
Intrinsic value of options exercised	$	44.4	$	24.2

We estimate the fair value of each stock option on the grant date using a Black-Scholes option-pricing model. Black-Scholes option-pricing models require us to make predictive assumptions regarding future stock price volatility, employee exercise behavior, and dividend yield. We estimate our future stock price volatility using the historical volatility over the expected term of the option, excluding time periods of volatility we believe a marketplace participant would exclude in estimating our stock price volatility. We also have considered, but did not use, implied volatility in our estimate, because trading activity in options on our stock, especially those with tenors of greater than 6 months, is insufficient to provide a reliable measure of expected volatility. Our method of selecting the other valuation assumptions is explained in Note 12 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended May 30, 2021.

The estimated fair values of stock options granted and the assumptions used for the Black-Scholes option-pricing model were as follows:

	Nine-Month Period Ended
	Feb. 27, 2022			Feb. 28, 2021
Estimated fair values of stock options granted	$	8.77		$	8.03
Assumptions:
Risk-free interest rate		1.5	%		0.7	%
Expected term		8.5	years		8.5	years
Expected volatility		20.2	%		19.5	%
Dividend yield		3.4	%		3.3	%

The total grant date fair value of restricted stock unit awards that vested during the period was as follows:

	Nine-Month Period Ended
In Millions	Feb. 27, 2022		Feb. 28, 2021
Total grant date fair value	$	79.0	$	73.0

(11) Earnings Per Share

Basic and diluted earnings per share (EPS) were calculated using the following:

	Quarter Ended				Nine-Month Period Ended
In Millions, Except per Share Data	Feb. 27, 2022		Feb. 28, 2021		Feb. 27, 2022		Feb. 28, 2021
Net earnings attributable to General Mills	$	660.3	$	595.7	$	1,884.5	$	1,923.0
Average number of common shares - basic EPS		606.8		615.0		608.6		614.6
Incremental share effect from: (a)
Stock options		2.9		2.0		2.4		2.6
Restricted stock units and performance share units		2.7		2.4		2.5		2.4
Average number of common shares - diluted EPS		612.4		619.4		613.5		619.6
Earnings per share – basic	$	1.09	$	0.97	$	3.10	$	3.13
Earnings per share – diluted	$	1.08	$	0.96	$	3.07	$	3.10

(a)Incremental shares from stock options, restricted stock units, and performance share units are computed by the treasury stock method.

Stock options, restricted stock units, and performance share units excluded from our computation of diluted EPS because they were not dilutive were as follows:

Quarter Ended

Nine-Month Period Ended

In Millions

Feb. 27, 2022

Feb. 28, 2021

Feb. 27, 2022

Feb. 28, 2021

Anti-dilutive stock options, restricted stock units, and

performance share units

1.0

4.8

4.5

3.4

(12) Share Repurchases

Share repurchases were as follows:

	Quarter Ended					Nine-Month Period Ended
In Millions	Feb. 27, 2022		Feb. 28, 2021		Feb. 27, 2022		Feb. 28, 2021
Shares of common stock		2.6		-		8.8		-
Aggregate purchase price	$	175.5	$	0.5	$	550.5	$	0.6

(13) Statements of Cash Flows

Our Consolidated Statements of Cash Flows include the following:

	Nine-Month Period Ended
In Millions	Feb. 27, 2022		Feb. 28, 2021
Net cash interest payments	$	234.2	$	286.1
Net income tax payments	$	397.3	$	459.8

(14) Retirement and Postemployment Benefits

Components of net periodic benefit (income) expense are as follows:

		Defined Benefit Pension Plans				Other Postretirement Benefit Plans				Postemployment Benefit Plans
		Quarter Ended				Quarter Ended				Quarter Ended
In Millions		Feb. 27, 2022		Feb. 28, 2021		Feb. 27, 2022		Feb. 28, 2021		Feb. 27, 2022		Feb. 28, 2021
Service cost	$	23.2	$	26.1	$	2.0	$	2.0	$	1.8	$	2.3
Interest cost		46.0		48.0		3.1		4.5		0.4		0.4
Expected return on plan assets		(102.8)		(105.3)		(6.6)		(8.7)		-		-
Amortization of losses (gains)		35.7		27.1		(2.7)		(1.3)		0.8		0.7
Amortization of prior service costs (credits)		0.2		0.3		(5.3)		(1.3)		0.1		0.1
Other adjustments		-		-		-		-		4.0		2.1
Net expense (income)	$	2.3	$	(3.8)	$	(9.5)	$	(4.8)	$	7.1	$	5.6

		Defined Benefit Pension Plans				Other Postretirement Benefit Plans				Postemployment Benefit Plans
		Nine-Month Period Ended				Nine-Month Period Ended				Nine-Month Period Ended
In Millions		Feb. 27, 2022		Feb. 28, 2021		Feb. 27, 2022		Feb. 28, 2021		Feb. 27, 2022		Feb. 28, 2021
Service cost	$	70.4	$	78.1	$	5.8	$	6.3	$	5.3	$	6.9
Interest cost		138.4		143.9		9.4		13.5		1.1		1.2
Expected return on plan assets		(308.5)		(315.4)		(20.0)		(26.0)		-		-
Amortization of losses (gains)		106.1		81.1		(8.1)		(3.8)		2.3		2.1
Amortization of prior service costs (credits)		0.6		0.9		(15.7)		(4.1)		0.3		0.5
Other adjustments		-		-		-		-		9.7		6.5
Curtailment gain		(14.3)		-		(5.7)		-		-		-
Net (income) expense	$	(7.3)	$	(11.4)	$	(34.3)	$	(14.1)	$	18.7	$	17.2

(15) Income Taxes

During the first quarter of fiscal 2022, the Brazilian tax authority, Secretaria da Receita Federal do Brasil (RFB), concluded audits of our 2016 through 2018 tax return years. These audits included a review of our determinations of amortization of certain goodwill arising from the acquisition of Yoki Alimentos S.A. The RFB has proposed adjustments that effectively eliminate the goodwill amortization benefits related to this transaction. The RFB had previously proposed adjustments related to the goodwill amortization associated with our 2012 through 2015 tax return years. We believe we have meritorious defenses and intend to continue to contest the disallowance for all years.

(16) Contingencies

During fiscal 2020, we received notice from the tax authorities of the State of São Paulo, Brazil regarding our compliance with its state sales tax requirements. As a result, we have been assessed additional state sales taxes, interest, and penalties. We believe that we have meritorious defenses against this claim and will vigorously defend our position. As of February 27, 2022, we are unable to estimate any possible loss and have not recorded a loss contingency for this matter.

(17) Business Segment and Geographic Information

We operate in the packaged foods industry. In the third quarter of fiscal 2022, we completed a new organization structure to streamline our global operations. This global reorganization required us to reevaluate our operating segments. Under our new organization structure, our chief operating decision maker assesses performance and makes decisions about resources to be allocated to our operating segments as follows: North America Retail; International; Pet; and North America Foodservice.

We have restated our net sales by segment and segment operating profit to reflect our new operating segments. These segment changes had no effect on previously reported consolidated net sales, operating profit, net earnings attributable to General Mills, or earnings per share.

Our North America Retail operating segment includes convenience store businesses from our former Convenience Stores & Foodservice segment. Within our North America Retail operating segment, our former U.S. Cereal operating unit and U.S. Yogurt operating unit have been combined into the U.S. Morning Foods operating unit. Additionally, the U.S. Meals & Baking Solutions operating unit combines the former U.S. Meals & Baking operating unit with certain businesses from the U.S. Snacks operating unit. The Canada operating unit excludes Canada foodservice businesses which are now included in our North America Foodservice operating segment. The resulting North America Foodservice operating segment exclusively includes our foodservice business. Our International operating segment combines our former Europe & Australia and Asia & Latin America operating segments. Our Pet operating segment is unchanged.

Our North America Retail operating segment reflects business with a wide variety of grocery stores, mass merchandisers, membership stores, natural food chains, drug, dollar and discount chains, convenience stores, and e-commerce grocery providers. Our product categories in this business segment include ready-to-eat cereals, refrigerated yogurt, soup, meal kits, refrigerated and frozen dough products, dessert and baking mixes, frozen pizza and pizza snacks, snack bars, fruit snacks, savory snacks, and a wide variety of organic products including ready-to-eat cereal, frozen and shelf-stable vegetables, meal kits, fruit snacks, snack bars, and refrigerated yogurt.

Our International operating segment consists of retail and foodservice businesses outside of the United States and Canada. Our product categories include super-premium ice cream and frozen desserts, meal kits, refrigerated and frozen dough products, salty snacks, snack bars, dessert and baking mixes, and shelf stable vegetables. We also sell super-premium ice cream and frozen desserts directly to consumers through owned retail shops. Our International segment also includes products manufactured in the United States for export, mainly to Caribbean and Latin American markets, as well as products we manufacture for sale to our international joint ventures. Revenues from export activities and franchise fees are reported in the region or country where the end customer or franchisee is located.

Our Pet operating segment includes pet food products sold primarily in the United States and Canada in national pet superstore chains, e-commerce retailers, grocery stores, regional pet store chains, mass merchandisers, and veterinary clinics and hospitals. Our product categories include dog and cat food (dry foods, wet foods, and treats) made with whole meats, fruits, vegetables and other high-quality natural ingredients. Our tailored pet product offerings address specific dietary, lifestyle, and life-stage needs and span different product types, diet types, breed sizes for dogs, lifestages, flavors, product functions, and textures and cuts for wet foods.

Our North America Foodservice segment consists of foodservice businesses in the United States and Canada. Our major product categories in our North America Foodservice operating segment are ready-to-eat cereals, snacks, refrigerated yogurt, frozen meals, unbaked and fully baked frozen dough products, baking mixes, and bakery flour. Many products we sell are branded to the consumer and nearly all are branded to our customers. We sell to distributors and operators in many customer channels including foodservice, vending, and supermarket bakeries.

Operating profit for these segments excludes unallocated corporate items, gain or loss on divestitures, and restructuring, impairment, and other exit costs. Unallocated corporate items include corporate overhead expenses, variances to planned North American employee benefits and incentives, certain charitable contributions, restructuring initiative project-related costs, and other items that are not part of our measurement of segment operating performance. These include gains and losses arising from the revaluation of certain grain inventories and gains and losses from mark-to-market valuation of certain commodity positions until passed back to our operating segments. These items affecting operating profit are centrally managed at the corporate level and are excluded from the measure of segment profitability reviewed by executive management. Under our supply chain organization, our manufacturing, warehouse, and distribution activities are substantially integrated across our operations in order to maximize efficiency and productivity. As a result, fixed assets and depreciation and amortization expenses are neither maintained nor available by operating segment.

Our operating segment results were as follows:

		Quarter Ended				Nine-Month Period Ended
In Millions	Feb. 27, 2022			Feb. 28, 2021	Feb. 27, 2022		Feb. 28, 2021
Net sales:
North America Retail	$	2,811.9	$	2,786.0	$	8,567.1	$	8,539.3
International		721.0		939.8		2,566.0		2,710.9
Pet		567.7		436.3		1,649.1		1,288.0
North America Foodservice		437.1		357.9		1,319.4		1,065.2
Total	$	4,537.7	$	4,520.0	$	14,101.6	$	13,603.4
Operating profit:
North America Retail	$	611.5	$	628.8	$	1,935.5	$	2,076.8
International		35.9		41.4		155.9		180.8
Pet		110.6		102.3		357.3		311.9
North America Foodservice		35.2		40.6		174.9		137.6
Total segment operating profit	$	793.2	$	813.1	$	2,623.6	$	2,707.1
Unallocated corporate items		140.9		(24.5)		328.9		98.3
Divestitures gain		(170.1)		-		(170.1)		-
Restructuring, impairment, and other exit costs		7.1		11.0		5.1		11.9
Operating profit	$	815.3	$	826.6	$	2,459.7	$	2,596.9

Net sales for our North America Retail operating units were as follows:

	Quarter Ended				Nine-Month Period Ended
In Millions	Feb. 27, 2022		Feb. 28, 2021		Feb. 27, 2022		Feb. 28, 2021
U.S. Meals & Baking Solutions	$	968.0	$	990.7	$	3,032.6	$	3,169.0
U.S. Morning Foods		858.0		823.2		2,514.4		2,495.8
U.S. Snacks		745.0		726.8		2,282.3		2,172.0
Canada		240.9		245.3		737.8		702.5
Total	$	2,811.9	$	2,786.0	$	8,567.1	$	8,539.3

Net sales by class of similar products were as follows:

	Quarter Ended				Nine-Month Period Ended
In Millions	Feb. 27, 2022		Feb. 28, 2021		Feb. 27, 2022		Feb. 28, 2021
Snacks	$	925.3	$	871.9	$	2,827.4	$	2,608.6
Convenient meals		772.8		785.0		2,258.1		2,334.8
Cereal		754.4		715.4		2,227.6		2,168.7
Pet		568.1		436.3		1,649.5		1,288.0
Dough		446.6		498.0		1,458.8		1,456.8
Baking mixes and ingredients		465.9		416.8		1,379.4		1,293.6
Yogurt		349.3		505.3		1,362.3		1,513.5
Super-premium ice cream		151.4		164.0		596.2		596.4
Other		103.9		127.3		342.3		343.0
Total	$	4,537.7	$	4,520.0	$	14,101.6	$	13,603.4

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations.

INTRODUCTION

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in conjunction with the MD&A included in our Annual Report on Form 10-K for the fiscal year ended May 30, 2021 for important background regarding, among other things, our key business drivers. Significant trademarks and service marks used in our business are set forth in italics herein. Certain terms used throughout this report are defined in the “Glossary” section below.

As the COVID-19 pandemic continues, we expect the largest factors impacting our fiscal 2022 performance will be the relative balance of at-home versus away-from-home consumer food demand and the elevated cost environment, including input cost inflation and costs related to supply chain disruption, all of which remain uncertain. We expect at-home food volume will decline year over year across most of our core markets, though will remain above pre-pandemic levels. Conversely, we expect away-from-home food volume to continue to recover, though not fully to pre-pandemic levels. Additionally, we expect increased net price realization across all food channels throughout our core markets, in response to significant input cost inflation. We will continue to evaluate the nature and extent of the impact to our business and consolidated results of operations.

CONSOLIDATED RESULTS OF OPERATIONS

Third Quarter Results

In the third quarter of fiscal 2022, net sales essentially matched the same period last year, and organic net sales increased 4 percent compared to the same period last year. Operating profit decreased 1 percent to $815 million, primarily driven by higher input costs, an unfavorable change to the mark-to-market valuation of certain commodity positions and grain inventories, volume declines, and lower net corporate investment activity, partially offset by favorable net price realization and mix and gains on divestitures. Operating profit margin of 18.0 percent decreased 30 basis points. Adjusted operating profit of $676 million decreased 6 percent on a constant-currency basis, primarily driven by higher input costs and volume declines, partially offset by favorable net price realization and mix, and a decrease in certain selling, general, and administrative (SG&A) expenses. Adjusted operating profit margin decreased 90 basis points to 14.9 percent. Diluted earnings per share of $1.08 increased 13 percent in the third quarter of fiscal 2022. Adjusted diluted earnings per share of $0.84 increased 2 percent on a constant-currency basis compared to the third quarter of fiscal 2021. See the “Non-GAAP Measures” section below for a description of our use of measures not defined by GAAP.

A summary of our consolidated financial results for the third quarter of fiscal 2022 follows:

Quarter Ended Feb. 27, 2022	In millions, except per share		Quarter Ended Feb. 27, 2022 vs. Feb. 28, 2021		Percent of Net Sales		Constant-Currency Growth (a)
Net sales	$	4,537.7	Flat
Operating profit		815.3	(1)	%	18.0	%
Net earnings attributable to General Mills		660.3	11	%
Diluted earnings per share	$	1.08	13	%
Organic net sales growth rate (a)			4	%
Adjusted operating profit (a)		676.5	(5)	%	14.9	%	(6)	%
Adjusted diluted earnings per share (a)	$	0.84	2	%			2	%
(a) See the "Non-GAAP Measures" section below for our use of measures not defined by GAAP.

Consolidated net sales were as follows:

	Quarter Ended
	Feb. 27, 2022		Feb. 27, 2022 vs. Feb. 28, 2021		Feb. 28, 2021
Net sales (in millions)	$	4,537.7	Flat		$	4,520.0
Contributions from volume growth (a)			(10)	pts
Net price realization and mix			11	pts
Foreign currency exchange			Flat
Note: Table may not foot due to rounding.
(a) Measured in tons based on the stated weight of our product shipments.

Net sales in the third quarter of fiscal 2022 matched the same period in fiscal 2021, driven by favorable net price realization and mix, offset by a decrease in contributions from volume growth.

Components of organic net sales growth are shown in the following table:

Quarter Ended Feb. 27, 2022 vs.
Quarter Ended Feb. 28, 2021
Contributions from organic volume growth (a)	(4)	pts
Organic net price realization and mix	7	pts
Organic net sales growth	4	pts
Foreign currency exchange	Flat
Acquisition and divestitures	(3)	pts
Net sales growth	Flat
Note: Table may not foot due to rounding.
(a) Measured in tons based on the stated weight of our product shipments.

Organic net sales increased 4 percent in the third quarter of fiscal 2022 as favorable organic net price realization and mix was partially offset by a decrease in contributions from organic volume growth.

Cost of sales increased $168 million to $3,134 million in the third quarter of fiscal 2022 compared to the same period in fiscal 2021. The increase was primarily driven by a $406 million increase attributable to product rate and mix partially offset by a $315 million decrease attributable to lower volume. We recorded a $20 million net increase in cost of sales related to the mark-to-market valuation of certain commodity positions and grain inventories in the third quarter of fiscal 2022 compared to a $56 million net decrease in the third quarter of fiscal 2021. In addition, we recorded $2 million of restructuring charges in cost of sales in the third quarter of fiscal 2022 compared to $1 million in the third quarter of fiscal 2021 (please refer to Note 3 to the Consolidated Financial Statements in Part I, Item 1 of this report).

SG&A expenses increased $35 million to $751 million in the third quarter of fiscal 2022, compared to the same period in fiscal 2021, primarily driven by lower net corporate investment activity. SG&A expenses as a percent of net sales in the third quarter of fiscal 2022 increased 70 basis points compared to the third quarter of fiscal 2021.

During the third quarter of fiscal 2022, we recorded a $170 million divestitures gain related to the sale of our interests in Yoplait SAS, Yoplait Marques SNC and Liberté Marques Sàrl, and a European dough business (please refer to Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this report).

Restructuring, impairment, and other exit costs totaled $7 million in the third quarter of fiscal 2022, compared to $11 million in the same period last year (please refer to Note 3 to the Consolidated Financial Statements in Part I, Item 1 of this report).

Benefit plan non-service income totaled $27 million in the third quarter of fiscal 2022, compared to $33 million in the same period last year, primarily reflecting higher amortization of losses.

Interest, net for the third quarter of fiscal 2022 totaled $86 million, down $20 million from the third quarter of fiscal 2021, primarily driven by lower average long-term debt levels.

The effective tax rate for the third quarter of fiscal 2022 was 16.3 percent compared to 21.5 percent in the same period last year. The 5.2 percentage point decrease was primarily due to certain non-taxable components of the divestitures gains and favorable changes in earnings mix by jurisdiction, partially offset by certain discrete tax benefits recorded in the third quarter of fiscal 2021. Our effective tax rate excluding certain items affecting comparability was 21.0 percent in the third quarter of fiscal 2022, compared to 21.6 percent in the same period last year (see the “Non-GAAP Measures” section below for a description of our use of measures not defined by GAAP). The 0.6 percentage point decrease was primarily due to favorable changes in earnings mix by jurisdiction, partially offset by certain discrete tax benefits recorded in the third quarter of fiscal 2021.

After-tax earnings from joint ventures for the third quarter of fiscal 2022 increased to $30 million compared to $12 million in the same period in fiscal 2021, primarily driven by lower SG&A expenses at Cereal Partners Worldwide (CPW). On a constant-currency basis, after-tax earnings from joint ventures increased 167 percent (see the “Non-GAAP Measures” section below for a description of our use of measures not defined by GAAP). The components of our joint ventures’ net sales growth are shown in the following table:

Quarter Ended Feb. 27, 2022 vs.
Quarter Ended Feb. 28, 2021	CPW		HDJ (a)		Total
Contributions from volume growth (b)	Flat		9	pts
Net price realization and mix	2	pts	Flat
Net sales growth in constant currency	1	pt	9	pts	3	pts
Foreign currency exchange	(5)	pts	(10)	pts	(6)	pts
Net sales growth	(4)	pts	(1)	pt	(3)	pts
Note: Table may not foot due to rounding.
(a) Häagen-Dazs Japan, Inc. (HDJ)
(b) Measured in tons based on the stated weight of our product shipments.

Average diluted shares outstanding decreased by 7 million in the third quarter of fiscal 2022 from the same period a year ago primarily due to share repurchases, partially offset by option exercises.

Nine-Month Results

In the nine-month period ended February 27, 2022, net sales and organic net sales increased 4 percent compared to the same period last year. Operating profit decreased 5 percent to $2,460 million, primarily driven by higher input costs, an unfavorable change to the mark-to-market valuation of certain commodity positions and grain inventories, lower net corporate investment activity, and higher transaction and integration costs, partially offset by favorable net price realization and mix and gains on divestitures. Operating profit margin of 17.4 percent decreased 170 basis points. Adjusted operating profit of $2,317 million decreased 5 percent on a constant-currency basis, primarily driven by higher input costs and volume declines, partially offset by favorable net price realization and mix and a decrease in certain SG&A expenses. Adjusted operating profit margin decreased 130 basis points to 16.4 percent. Diluted earnings per share of $3.07 decreased 1 percent in the nine-month period ended February 27, 2022, and adjusted diluted earnings per share of $2.82 decreased 2 percent on a constant-currency basis compared to the same period last year (see the “Non-GAAP Measures” section below for a description of our use of measures not defined by GAAP).

A summary of our consolidated financial results for the nine-month period ended February 27, 2022, follows:

Nine-Month Period Ended Feb. 27, 2022	In millions, except per share		Nine-Month Period Ended Feb. 27, 2022 vs. Feb. 28, 2021		Percent of Net Sales		Constant-Currency Growth (a)
Net sales	$	14,101.6	4	%
Operating profit		2,459.7	(5)	%	17.4	%
Net earnings attributable to General Mills		1,884.5	(2)	%
Diluted earnings per share	$	3.07	(1)	%
Organic net sales growth rate (a)			4	%
Adjusted operating profit (a)		2,317.0	(4)	%	16.4	%	(5)	%
Adjusted diluted earnings per share (a)	$	2.82	(2)	%			(2)	%
(a) See the "Non-GAAP Measures" section below for our use of measures not defined by GAAP.

Consolidated net sales were as follows:

	Nine-Month Period Ended
	Feb. 27, 2022		Feb. 27, 2022 vs. Feb. 28, 2021		Feb. 28, 2021
Net sales (in millions)	$	14,101.6	4	%	$	13,603.4
Contributions from volume growth (a)			(4)	pts
Net price realization and mix			7	pts
Foreign currency exchange			1	pt
Note: Table may not foot due to rounding.
(a) Measured in tons based on the stated weight of our product shipments.

The 4 percent increase in net sales for the nine-month period ended February 27, 2022, was driven by favorable net price realization and mix and favorable foreign currency exchange, partially offset by a decrease in contributions from volume growth.

Components of organic net sales growth are shown in the following table:

Nine-Month Period Ended Feb. 27, 2022 vs.
Nine-Month Period Ended Feb. 28, 2021
Contributions from organic volume growth (a)	(1)	pt
Organic net price realization and mix	5	pts
Organic net sales growth	4	pts
Foreign currency exchange	1	pt
Acquisition and divestitures	(1)	pt
Net sales growth	4	pts
Note: Table may not foot due to rounding

(a)Measured in tons based on the stated weight of our product shipments.

Organic net sales increased 4 percent in the nine-month period ended February 27, 2022, driven by favorable organic net price realization and mix, partially offset by a decrease in contributions from organic volume growth.

Cost of sales increased $731 million to $9,469 million in the nine-month period ended February 27, 2022, compared to the same period in fiscal 2021. The increase was driven by a $964 million increase attributable to product rate and mix, partially offset by a $336 million decrease due to lower volume. We recorded a $16 million net decrease in cost of sales related to the mark-to-market valuation of certain commodity positions and grain inventories in the nine-month period ended February 27, 2022, compared to a $118 million net decrease in the nine-month period ended February 28, 2021. In addition, we recorded $3 million of restructuring charges in cost of sales in the nine-month period ended February 27, 2022, compared to $2 million of restructuring charges in the same period last year (please refer to Note 3 to the Consolidated Financial Statements in Part I, Item 1 of this report).

SG&A expenses increased $81 million to $2,338 million in the nine-month period ended February 27, 2022, compared to the same period in fiscal 2021, primarily driven by lower net corporate investment activity, higher transaction costs and acquisition integration costs, partially offset by a non-income tax recovery recorded in the nine-month period ended February 27, 2022. SG&A expenses as a percent of net sales were unchanged in the nine-month period ended February 27, 2022, compared to the same period of fiscal 2021.

During the nine-month period ended February 27, 2022, we recorded a $170 million divestitures gain related to the sale of our interests in Yoplait SAS, Yoplait Marques SNC and Liberté Marques Sàrl, and a European dough business (please refer to Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this report).

Restructuring, impairment, and other exit costs totaled $5 million in the nine-month period ended February 27, 2022, compared to $12 million in the same period last year (please refer to Note 3 to the Consolidated Financial Statements in Part I, Item 1 of this report).

Benefit plan non-service income totaled $84 million in the nine-month period ended February 27, 2022, compared to $100 million in the same period last year, primarily reflecting higher amortization of losses.

Interest, net for the nine-month period ended February 27, 2022, decreased $43 million to $275 million compared to the same period of fiscal 2021, primarily driven by lower average long-term debt balances.

The effective tax rate for the nine-month period ended February 27, 2022, was 19.9 percent compared to 22.0 percent in the same period last year. The 2.1 percentage point decrease was primarily due to certain non-taxable components of the divestitures gains and favorable changes in earnings mix by jurisdiction in fiscal 2022, partially offset by certain discrete benefits in the nine-month period ended February 28, 2021. Our effective tax rate excluding certain items affecting comparability was 21.7 percent in the nine-month period ended February 27, 2022, compared to 21.9 percent in the same period last year (see the “Non-GAAP Measures” section below for a description of our use of measures not defined by GAAP). The 0.2 percentage point decrease is primarily due to favorable changes in earnings mix by jurisdiction in fiscal 2022, partially offset by certain discrete benefits in the nine-month period ended February 28, 2021.

After-tax earnings from joint ventures increased to $92 million for the nine-month period ended February 27, 2022 compared to $90 million in the same period in fiscal 2021, primarily driven by lower SG&A expenses at CPW and higher net sales at HDJ, partially offset by higher input costs and lower net sales at CPW. On a constant-currency basis, after-tax earnings from joint ventures increased 5 percent (see the “Non-GAAP Measures” section below for a description of our use of measures not defined by GAAP). The components of our joint ventures’ net sales growth are shown in the following table:

Nine-Month Period Ended Feb. 27, 2022 vs.
Nine-Month Period Ended Feb. 28, 2021	CPW		HDJ		Total
Contributions from volume growth (a)	(2)	pts	9	pts
Net price realization and mix	1	pt	1	pt
Net sales growth in constant currency	(2)	pts	10	pts	1	pt
Foreign currency exchange	(1)	pt	(7)	pts	(2)	pts
Net sales growth	(2)	pts	3	pts	(1)	pt
Note: Table may not foot due to rounding
(a) Measured in tons based on the stated weight of our product shipments.

Average diluted shares outstanding decreased by 6 million in the nine-month period ended February 27, 2022, from the same period a year ago primarily due to share repurchases, partially offset by option exercises.

SEGMENT OPERATING RESULTS

In the third quarter of fiscal 2022, we announced a new organization structure to streamline our global operations. As a result of this global reorganization, beginning in the third quarter of fiscal 2022, we are reporting results for our four operating segments as follows: North America Retail, International, Pet, and North America Foodservice. We have restated our net sales by segment and segment operating profit amounts to reflect our new operating segments. These segment changes had no effect on previously reported consolidated net sales, operating profit, net earnings attributable to General Mills, or earnings per share. Please refer to Note 17 of the Consolidated Financial Statements in Part I, Item 1 of this report for a description of our operating segments.

Our North America Retail operating segment includes convenience store businesses from our former Convenience Stores & Foodservice segment. Within our North America Retail operating segment, our former U.S. Cereal operating unit and U.S. Yogurt operating unit have been combined into the U.S. Morning Foods operating unit. Additionally, the U.S. Meals & Baking Solutions operating unit combines the former U.S. Meals & Baking operating unit with certain businesses from the U.S. Snacks operating unit. The Canada operating unit excludes Canada foodservice businesses which are now included in our North America Foodservice operating segment. The resulting North America Foodservice operating segment exclusively includes our foodservice businesses. Our International operating segment combines our former Europe & Australia and Asia & Latin America operating segments. Our Pet operating segment is unchanged.

North America Retail Segment Results

North America Retail net sales were as follows:

	Quarter Ended						Nine-Month Period Ended
	Feb. 27, 2022		Feb. 27, 2022 vs Feb. 28, 2021		Feb. 28, 2021		Feb. 27, 2022		Feb. 27, 2022 vs Feb. 28, 2021		Feb. 28, 2021
Net sales (in millions)	$	2,811.9	1	%	$	2,786.0	$	8,567.1	Flat		$	8,539.3
Contributions from volume growth (a)			(8)	pts					(7)	pts
Net price realization and mix			9	pts					7	pts
Foreign currency exchange			Flat						Flat

Note: Table may not foot due to rounding.

(a)Measured in tons based on the stated weight of our product shipments.

North America Retail net sales increased 1 percent in the third quarter of fiscal 2022 compared to the same period in fiscal 2021, driven by favorable net price realization and mix, partially offset by a decrease in contributions from volume growth.

North America Retail net sales for the nine-month period ended February 27, 2022, essentially matched the same period in fiscal 2021, as favorable net price realization and mix was offset by a decrease in contributions from volume growth.

The components of North America Retail organic net sales growth are shown in the following table:

	Quarter Ended		Nine-Month Period Ended
	Feb. 27, 2022		Feb. 27, 2022
Contributions from organic volume growth (a)	(8)	pts	(7)	pts
Organic net price realization and mix	9	pts	7	pts
Organic net sales growth	1	pt	Flat
Foreign currency exchange	Flat		Flat
Net sales growth	1	pt	Flat

Note: Table may not foot due to rounding.

(a)Measured in tons based on the stated weight of our product shipments.

North America Retail organic net sales increased 1 percent in the third quarter of fiscal 2022 compared to the same period in fiscal 2021, driven by favorable organic net price realization and mix, partially offset by a decrease in contributions from organic volume growth.

North America Retail organic net sales for the nine-month period ended February 27, 2022, essentially matched the same period in fiscal 2021, as favorable organic net price realization and mix was offset by a decrease in contributions from organic volume growth.

North America Retail net sales percentage change by operating unit are shown in the following table:

	Quarter Ended		Nine-Month Period Ended
	Feb. 27, 2022		Feb. 27, 2022
U.S. Meals & Baking Solutions	(2)	%	(4)	%
U.S. Morning Foods	4	%	1	%
U.S. Snacks	3	%	5	%
Canada (a)	(2)	%	5	%
Total	1	%	Flat

(a)On a constant-currency basis, Canada net sales decreased 2 percent in the third quarter of fiscal 2022, compared to the same period in fiscal 2021. On a constant-currency basis, Canada net sales increased 1 percent for the nine-month period ended February 27, 2022, compared to the same period in fiscal 2021. See the "Non-GAAP Measures" section below for our use of this measure not defined by GAAP.

Segment operating profit decreased 3 percent to $612 million in the third quarter of fiscal 2022 compared to $629 million in the same period in fiscal 2021, primarily driven by higher input costs and a decrease in contributions from volume growth, partially offset by favorable net price realization and mix and a decrease in SG&A expenses. Segment operating profit decreased 3 percent on a constant-currency basis in the third quarter of fiscal 2022 compared to the same period in fiscal 2021 (see the “Non-GAAP Measures” section below for our use of this measure not defined by GAAP).

Segment operating profit decreased 7 percent to $1,936 million in the nine-month period ended February 27, 2022, compared to $2,077 million in the same period in fiscal 2021, primarily driven by higher input costs and a decrease in contributions from volume growth, partially offset by favorable net price realization and mix and a decrease in SG&A expenses. Segment operating profit decreased 7 percent on a constant-currency basis in the nine-month period ended February 27, 2022, compared to the same period in fiscal 2021 (see the “Non-GAAP Measures” section below for our use of this measure not defined by GAAP).

International Segment Results

International net sales were as follows:

	Quarter Ended						Nine-Month Period Ended
	Feb. 27, 2022		Feb. 27, 2022 vs Feb. 28, 2021		Feb. 28, 2021		Feb. 27, 2022		Feb. 27, 2022 vs Feb. 28, 2021		Feb. 28, 2021
Net sales (in millions)	$	721.0	(23)	%	$	939.8	$	2,566.0	(5)	%	$	2,710.9
Contributions from volume growth (a)			(34)	pts					(14)	pts
Net price realization and mix			12	pts					7	pts
Foreign currency exchange			(2)	pts					1	pt
Note: Table may not foot due to rounding.
(a) Measured in tons based on the stated weight of our product shipments.

International net sales decreased 23 percent in the third quarter of fiscal 2022 compared to the same period in fiscal 2021, driven by a decrease in contributions from volume growth, including the impact of volume declines from divestitures, and unfavorable foreign currency exchange, partially offset by favorable net price realization and mix.

International net sales decreased 5 percent in the nine-month period ended February 27, 2022, compared to the same period in fiscal 2021, driven by a decrease in contributions from volume growth, including the impact of volume declines from divestitures, partially offset by favorable net price realization and mix and favorable foreign currency exchange.

The components of International organic net sales growth are shown in the following table:

		Quarter Ended		Nine-Month Period Ended
		Feb. 27, 2022			Feb. 27, 2022
Contributions from organic volume growth (a)		(3)	pts		Flat
Organic net price realization and mix		2	pts		1	pt
Organic net sales growth		(1)	pt		1	pt
Foreign currency exchange		(2)	pts		1	pt
Divestitures (b)		(20)	pts		(8)	pts
Net sales growth		(23)	pts		(5)	pts
Note: Table may not foot due to rounding.
(a)	Measured in tons based on the stated weight of our product shipments.
(b)	Please see Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this report. Divestitures also includes the impact of our sale of the Laticínios Carolina business in Brazil in fiscal 2021.

International organic net sales decreased 1 percent in the third quarter of fiscal 2022 compared to the same period in fiscal 2021, driven by a decrease in contributions from organic volume growth, partially offset by favorable organic net price realization and mix.

International organic net sales increased 1 percent in the nine-month period ended February 27, 2022, compared to the same period in fiscal 2021, driven by favorable organic net price realization and mix.

Segment operating profit decreased 13 percent to $36 million in the third quarter of fiscal 2022 from $41 million in the same period in fiscal 2021, primarily driven by higher input costs and a decrease in contributions from volume growth, including the impact of volume declines from divestitures, partially offset by favorable net price realization and mix and a decrease in SG&A expenses. Segment operating profit decreased 16 percent on a constant-currency basis in the third quarter of fiscal 2022 compared to the same period in fiscal 2021 (see the “Non-GAAP Measures” section below for our use of this measure not defined by GAAP).

Segment operating profit decreased 14 percent to $156 million in the nine-month period ended February 27, 2022, compared to $181 million in the same period in fiscal 2021, primarily driven by higher input costs and a decrease in contributions from volume growth, including the impact of volume declines from divestitures, partially offset by favorable net price realization and mix, a decrease in SG&A expenses, and favorable foreign currency exchange. Segment operating profit decreased 18 percent on a constant-currency basis in the nine-month period ended February 27, 2022, compared to the same period in fiscal 2021 (see the “Non-GAAP Measures” section below for our use of this measure not defined by GAAP).

Pet Segment Results

Pet net sales were as follows:

	Quarter Ended						Nine-Month Period Ended
	Feb. 27, 2022		Feb. 27, 2022 vs Feb. 28, 2021		Feb. 28, 2021		Feb. 27, 2022		Feb. 27, 2022 vs Feb. 28, 2021		Feb. 28, 2021
Net sales (in millions)	$	567.7	30	%	$	436.3	$	1,649.1	28	%	$	1,288.0
Contributions from volume growth (a)			7	pts					11	pts
Net price realization and mix			23	pts					17	pts
Foreign currency exchange			Flat						Flat
Note: Table may not foot due to rounding.
(a) Measured in tons based on the stated weight of our product shipments.

Pet net sales increased 30 percent during the third quarter of fiscal 2022 compared to the same period in fiscal 2021, driven by favorable net price realization and mix and an increase in contributions from volume growth, including incremental volume from the acquisition of the Tyson Foods’ pet treats business.

Pet net sales increased 28 percent in the nine-month period ended February 27, 2022, compared to the same period in fiscal 2021, driven by favorable net price realization and mix and an increase in contributions from volume growth, including incremental volume from the acquisition of the Tyson Foods’ pet treats business.

The components of Pet organic net sales growth are shown in the following table:

	Quarter Ended		Nine-Month Period Ended
	Feb. 27, 2022		Feb. 27, 2022
Contributions from organic volume growth (a)	3	pts	8	pts
Organic net price realization and mix	13	pts	9	pts
Organic net sales growth	16	pts	16	pts
Acquisition (b)	14	pts	12	pts
Foreign currency exchange	Flat		Flat
Net sales growth	30	pts	28	pts

Note: Table may not foot due to rounding.

(a) Measured in tons based on the stated weight of our product shipments.

(b) Please see Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this report.

Pet organic net sales increased 16 percent in the third quarter of fiscal 2022 compared to the same period in fiscal 2021, driven by favorable organic net price realization and mix and an increase in contributions from organic volume growth.

Pet organic net sales increased 16 percent in the nine-month period ended February 27, 2022, compared to the same period in fiscal 2021, driven by favorable organic net price realization and mix and an increase in contributions from organic volume growth.

Segment operating profit increased 8 percent to $111 million in the third quarter of fiscal 2022 compared to $102 million in the same period in fiscal 2021, primarily driven by favorable net price realization and mix and an increase in contributions from volume growth, including incremental volume from the acquisition of the Tyson Foods’ pet treats business, partially offset by higher input costs and an increase in SG&A expenses. Segment operating profit increased 8 percent on a constant-currency basis in the third quarter of fiscal 2022 compared to the same period in fiscal 2021 (see the “Non-GAAP Measures” section below for our use of this measure not defined by GAAP).

Segment operating profit increased 15 percent to $357 million in the nine-month period ended February 27, 2022, compared to $312 million in the same period in fiscal 2021, primarily driven by favorable net price realization and mix and an increase in contributions from volume growth, including incremental volume from the acquisition of the Tyson Foods’ pet treats business, partially offset by higher input costs, an increase in SG&A expenses, and a one-time inventory adjustment and other acquisition-related expenses of $12 million related to the acquired pet treat business. Segment operating profit increased 15 percent on a constant-currency basis in the nine-month period ended February 27, 2022, compared to the same period in fiscal 2021 (see the “Non-GAAP Measures” section below for our use of this measure not defined by GAAP).

North America Foodservice Segment Results

North America Foodservice net sales were as follows:

	Quarter Ended						Nine-Month Period Ended
	Feb. 27, 2022		Feb. 27, 2022 vs Feb. 28, 2021		Feb. 28, 2021		Feb. 27, 2022		Feb. 27, 2022 vs Feb. 28, 2021		Feb. 28, 2021
Net sales (in millions)	$	437.1	22	%	$	357.9	$	1,319.4	24	%	$	1,065.2
Contributions from volume growth (a)			4	pts					8	pts
Net price realization and mix			18	pts					16	pts
Note: Table may not foot due to rounding.
(a) Measured in tons based on the stated weight of our product shipments.

North America Foodservice net sales increased 22 percent in the third quarter of fiscal 2022 compared to the same period in fiscal 2021, driven by favorable net price realization and mix and an increase in contributions from volume growth.

North America Foodservice net sales increased 24 percent in the nine-month period ended February 27, 2022, compared to the same period in fiscal 2021, driven by favorable net price realization and mix and an increase in contributions from volume growth.

The components of North America Foodservice organic net sales growth are shown in the following table:

	Quarter Ended		Nine-Month Period Ended
	Feb. 27, 2022		Feb. 27, 2022
Contributions from organic volume growth (a)	4	pts	8	pts
Organic net price realization and mix	18	pts	16	pts
Organic net sales growth	22	pts	24	pts
Net sales growth	22	pts	24	pts

Note: Table may not foot due to rounding.

(a)Measured in tons based on the stated weight of our product shipments.

North America Foodservice organic net sales increased 22 percent in the third quarter of fiscal 2022 compared to the same period in fiscal 2021, driven by favorable organic net price realization and mix and an increase in contributions from organic volume growth.

North America Foodservice organic net sales increased 24 percent in the nine-month period ended February 27, 2022, compared to the same period in fiscal 2021, driven by favorable organic net price realization and mix and an increase in contributions from organic volume growth.

Segment operating profit decreased 13 percent to $35 million in the third quarter of fiscal 2022 compared to $41 million in the same period in fiscal 2021, primarily driven by higher input costs, partially offset by favorable net price realization and mix.

Segment operating profit increased 27 percent to $175 million in the nine-month period ended February 27, 2022, compared to $138 million in the same period in fiscal 2021, primarily driven by favorable net price realization and mix and an increase in contributions from volume growth, partially offset by higher input costs.

UNALLOCATED CORPORATE ITEMS

Unallocated corporate expense totaled $141 million in the third quarter of fiscal 2022 compared to $24 million of income in the same period in fiscal 2021. We recorded a $20 million net increase in expense related to the mark-to-market valuation of certain commodity positions and grain inventories in the third quarter of fiscal 2022 compared to a $56 million net decrease in expense in the same period last year. We recorded $11 million of net gains related to the sale of certain corporate investments and valuation adjustments in the third quarter of fiscal 2022 compared to $59 million in the third quarter of fiscal 2021. In the third quarter of fiscal 2022, we recorded $4 million of integration costs related to our acquisition of Tyson Foods’ pet treats business and $9 million of transaction costs related to the sale of our interests in Yoplait SAS, Yoplait Marques SNC, and Liberté Marques Sàrl and a European dough business. We recorded $2 million of restructuring charges in cost of sales in the third quarter of fiscal 2022 compared to $1 million in the same period last year. We also recorded an $8 million favorable adjustment related to a product recall in our international Green Giant business in the third quarter of fiscal 2021.

Unallocated corporate expense totaled $329 million in the nine-month period ended February 27, 2022, compared to $98 million in the same period last year. We recorded a $16 million net decrease in expense related to the mark-to-market valuation of certain commodity positions and grain inventories in the nine-month period ended February 27, 2022, compared to a $118 million net decrease in expense in the same period last year. We recorded $21 million of net gains related to the sale of corporate investments and valuation adjustments in the nine-month period ended February 27, 2022, compared to $78 million in the same period last year. In the nine-month period ended February 27, 2022, we recorded $20 million of integration costs related to our acquisition of Tyson Foods’ pet treats business and $57 million of transaction costs related to the sale of our interests in Yoplait SAS, Yoplait Marques SNC, and Liberté Marques Sàrl and a European dough business. In addition, we recorded a $20 million recovery related to a Brazil indirect tax item and a $13 million insurance recovery in the nine-month period ended February 27, 2022. We also recorded $3 million of restructuring charges in costs of sales, compared to $2 million in the same period last year.

LIQUIDITY AND CAPITAL RESOURCES

During the nine-month period ended February 27, 2022, cash provided by operations was $2,228 million compared to $2,208 million in the same period last year. The $20 million increase was primarily driven by a $237 million change in current assets and liabilities, partially offset by $170 million in divestitures gain, and a $37 million decrease in net earnings. The $237 million change in current assets and liabilities is primarily driven by a $405 million change in inventories, partially offset by a $169 million change in accounts payable.

Cash used by investing activities during the nine-month period ended February 27, 2022, was $1,462 million compared to $332 million for the same period in fiscal 2021. In the first quarter of fiscal 2022, we acquired the Tyson Foods’ pet treats business for an aggregate purchase price of $1.2 billion. During the third quarter of fiscal 2022, we sold our interests in Yoplait SAS, Yoplait Marques SNC and Liberté Marques Sàrl for cash proceeds of $17 million, net of cash divested as part of the sale. We also completed the sale of a European dough business in the third quarter of fiscal 2022 for cash proceeds of $29 million. In addition, we spent $351 million on purchases of land, buildings, and equipment in the first nine months of fiscal 2022 compared to $346 million in the same period last year.

Cash used by financing activities during the nine-month period ended February 27, 2022, was $1,398 million compared to $853 million used in the same period in fiscal 2021. We had $128 million of net debt issuances in the nine-month period ended February 27, 2022, compared to $321 million of net debt issuances in the same period a year ago. We paid $934 million of dividends in the nine-month period ended February 27, 2022, compared to $932 million in the same period last year. We also purchased $550 million of shares of common stock in the nine-month period ended February 27, 2022.

Our sources of liquidity were not materially impacted by the COVID-19 pandemic. As the COVID-19 pandemic evolves, we will continue to evaluate its impact to our sources of liquidity.

As of February 27, 2022, we had $802 million of cash and cash equivalents in foreign jurisdictions. In anticipation of repatriating funds from foreign jurisdictions, we record local country withholding taxes on our international earnings, as applicable. Furthermore, we may repatriate our cash and cash equivalents held by our foreign subsidiaries without such funds being subject to further U.S. income tax liability. Earnings prior to fiscal 2018 from our foreign subsidiaries remain permanently reinvested in those jurisdictions.

The following table details the fee-paid committed and uncommitted credit lines we had available as of February 27, 2022:

In Billions	Facility Amount		Borrowed Amount
Credit facility expiring:
April 2026	$	2.7	$	-
Total committed credit facilities		2.7		-
Uncommitted credit facilities		0.6		0.1
Total committed and uncommitted credit facilities	$	3.3	$	0.1

The third-party holder of the General Mills Cereals, LLC (GMC) Class A Interests receives quarterly preferred distributions from available net income based on the application of a floating preferred return rate to the holder’s capital account balance established in the most recent mark-to-market valuation (currently $252 million). On June 1, 2021, the floating preferred return rate on GMC’s Class A Interests was reset to the sum of three-month LIBOR plus 160 basis points. The preferred return rate is adjusted every three years through a negotiated agreement with the Class A Interest holder or through a remarketing auction.

We have an option to purchase the Class A Interests for consideration equal to the then current capital account value, plus any unpaid preferred return and the prescribed make-whole amount. If we purchase these interests, any change in the third-party holder’s capital account from its original value will be charged directly to retained earnings and will increase or decrease the net earnings used to calculate EPS in that period.

To ensure availability of funds, we maintain bank credit lines and have commercial paper programs available to us in the United States and Europe. We also have uncommitted and asset-backed credit lines that support our foreign operations.

Certain of our long-term debt agreements, our credit facilities, and our noncontrolling interests contain restrictive covenants. As of February 27, 2022, we were in compliance with all of these covenants.

We have $601 million of long-term debt maturing in the next 12 months that is classified as current, including $500 million of 2.60 percent notes to be redeemed on October 12, 2022, and $100 million of 7.47 percent fixed-rate notes due October 15, 2022. We believe that cash flows from operations, together with available short- and long-term debt financing, will be adequate to meet our liquidity and capital needs for at least the next 12 months.

SIGNIFICANT ACCOUNTING ESTIMATES

Our significant accounting policies are described in Note 2 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended May 30, 2021. The accounting policies used in preparing our interim fiscal 2022 Consolidated Financial Statements are the same as those described in our Form 10-K.

Our significant accounting estimates are those that have meaningful impact on the reporting of our financial condition and results of operations. These estimates include our accounting for revenue recognition, valuation of long-lived assets, intangible assets, redeemable interest, stock-based compensation, income taxes, and defined benefit pension, other postretirement benefit, and postemployment benefit plans. The assumptions and methodologies used in the determination of those estimates as of February 27, 2022, are the same as those described in our Annual Report on Form 10-K for the fiscal year ended May 30, 2021.

With the organizational change, we also reassessed our reporting units one level below the segment level. We considered the new organization structure to be a triggering event that required a subsequent goodwill impairment test of certain reporting units during the third quarter of fiscal 2022. We determined there was no impairment of the goodwill of the impacted reporting units as their related fair values were substantially in excess of the carrying values.

The excess fair value as of the fiscal 2022 test date of the Uncle Toby’s brand intangible asset is as follows:

In Millions		Carrying Value of Intangible Asset			Excess Fair Value as of Fiscal 2022 Test Date
Uncle Toby's	$	55.0			7%

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In March 2020, the Financial Accounting Standards Board (FASB) issued optional accounting guidance for a limited period of time to ease the potential burden in accounting for reference rate reform. The new standard provides expedients and exceptions to existing accounting requirements for contract modifications and hedge accounting related to transitioning from discontinued reference rates, such as LIBOR, to alternative reference rates, if certain criteria are met. The new accounting requirements can be applied as of the beginning of the interim period including March 12, 2020, or any date thereafter, through December 31, 2022. We are in the process of reviewing our contracts and arrangements that will be affected by a discontinued reference rate and are analyzing the impact of this guidance on our results of operations and financial position.

NON-GAAP MEASURES

We have included in this report measures of financial performance that are not defined by GAAP. We believe that these measures provide useful information to investors, and include these measures in other communications to investors.

For each of these non-GAAP financial measures, we are providing below a reconciliation of the differences between the non-GAAP measure and the most directly comparable GAAP measure, an explanation of why we believe the non-GAAP measure provides useful information to investors, and any additional material purposes for which our management or Board of Directors uses the non-GAAP measure. These non-GAAP measures should be viewed in addition to, and not in lieu of, the comparable GAAP measure.

Significant Items Impacting Comparability

Several measures below are presented on an adjusted basis. The adjustments are either items resulting from infrequently occurring events or items that, in management’s judgment, significantly affect the year-to-year assessment of operating results.

The following are descriptions of significant items impacting comparability of our results.

Divestitures gain

Divestitures gain related to the sale of our interests in Yoplait SAS, Yoplait Marques SNC, and Liberté Marques Sàrl and the sale of a European dough business in fiscal 2022. Please see Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this report.

Transaction costs

Transaction costs related to the sale of our interests in Yoplait SAS, Yoplait Marques SNC, and Liberté Marques Sàrl and the definitive agreements and sale of our European dough businesses in fiscal 2022. Please see Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this report.

Non-income tax recovery

Recovery related to a Brazil indirect tax item recorded in fiscal 2022.

Acquisition integration costs

Integration costs resulting from the acquisition of Tyson Foods’ pet treats business. Please see Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this report.

Investment activity, net

Valuation adjustments and the gain on sale of certain corporate investments in fiscal 2022 and fiscal 2021.

Mark-to-market effects

Net mark-to-market valuation of certain commodity positions recognized in unallocated corporate items. Please see Note 6 to the Consolidated Financial Statements in Part I, Item 1 of this report.

Restructuring charges

Restructuring charges for International supply chain optimization actions and previously announced restructuring actions in fiscal 2022. Restructuring charges for previously announced restructuring actions in fiscal 2021. Please see Note 3 to the Consolidated Financial Statements in Part I, Item 1 of this report.

Product recall

Product recall adjustment recorded in fiscal 2021 related to our international Green Giant business.

Organic Net Sales Growth Rates

We provide organic net sales growth rates for our consolidated net sales and segment net sales. This measure is used in reporting to our Board of Directors and executive management and as a component of the measurement of our performance for incentive compensation purposes. We believe that organic net sales growth rates provide useful information to investors because they provide transparency to underlying performance in our net sales by excluding the effect that foreign currency exchange rate fluctuations, acquisitions, divestitures, and a 53^rd week, when applicable, have on year-to-year comparability. A reconciliation of these measures to reported net sales growth rates, the relevant GAAP measures, are included in our Consolidated Results of Operations and Results of Segment Operations discussions in the MD&A above.

Adjusted Operating Profit as a Percent of Net Sales (Adjusted Operating Profit Margin)

We believe this measure provides useful information to investors because it is important for assessing our operating profit margin on a comparable basis.

Our adjusted operating profit margins are calculated as follows:

	Quarter Ended
		Feb. 27, 2022			Feb. 28, 2021
In Millions		Value	Percent of Net Sales			Value	Percent of Net Sales
Operating profit as reported	$	815.3	18.0	%	$	826.6	18.3	%
Divestitures gain		(170.1)	(3.7)	%		-	-	%
Transaction costs		8.6	0.2	%		-	-	%
Non-income tax recovery		0.2	-			-	-	%
Acquisition integration costs		4.3	0.1	%		-	-	%
Investment activity, net		(11.1)	(0.2)	%		(59.3)	(1.3)	%
Mark-to-market effects		20.0	0.4	%		(55.7)	(1.2)	%
Restructuring charges		9.3	0.2	%		11.7	0.3	%
Product recall		-	-	%		(7.8)	(0.2)	%
Adjusted operating profit	$	676.5	14.9	%	$	715.6	15.8	%

	Nine-Month Period Ended
		Feb. 27, 2022			Feb. 28, 2021
In Millions		Value	Percent of Net Sales			Value	Percent of Net Sales
Operating profit as reported	$	2,459.7	17.4	%	$	2,596.9	19.1	%
Divestitures gain		(170.1)	(1.2)	%		-	-	%
Transaction costs		56.8	0.4	%		-	-	%
Non-income tax recovery		(20.4)	(0.1)	%		-	-	%
Acquisition integration costs		20.2	0.1	%		-	-	%
Investment activity, net		(20.9)	(0.1)	%		(78.3)	(0.6)	%
Mark-to-market effects		(16.2)	(0.1)	%		(118.0)	(0.9)	%
Restructuring charges		7.9	0.1	%		13.6	0.1	%
Product recall		-	-	%		(0.7)	-	%
Adjusted operating profit	$	2,317.0	16.4	%	$	2,413.6	17.7	%

Note: Tables may not foot due to rounding.

For more information on the reconciling items, please refer to the Significant Items Impacting Comparability section above.

Adjusted Operating Profit Growth on a Constant-currency Basis

This measure is used in reporting to our Board of Directors and executive management and as a component of the measurement of our performance for incentive compensation purposes. We believe that this measure provides useful information to investors because it is the operating profit measure we use to evaluate operating profit performance on a comparable year-to-year basis. The measure is evaluated on a constant-currency basis by excluding the effect that foreign currency exchange rate fluctuations have on year-to-year comparability given the volatility in foreign currency exchange rates.

Our adjusted operating profit growth on a constant-currency basis is calculated as follows:

		Quarter Ended						Nine-Month Period Ended
	Feb. 27, 2022		Feb. 28, 2021		Change		Feb. 27, 2022		Feb. 28, 2021		Change
Operating profit as reported	$	815.3	$	826.6	(1)	%	$	2,459.7	$	2,596.9	(5)	%
Divestitures gain		(170.1)		-				(170.1)		-
Transaction costs		8.6		-				56.8		-
Investment activity, net		(11.1)		(59.3)				(20.9)		(78.3)
Non-income tax recovery		0.2		-				(20.4)		-
Acquisition integration costs		4.3		-				20.2		-
Mark-to-market effects		20.0		(55.7)				(16.2)		(118.0)
Restructuring charges		9.3		11.7				7.9		13.6
Product recall		-		(7.8)				-		(0.7)
Adjusted operating profit	$	676.5	$	715.6	(5)	%	$	2,317.0	$	2,413.6	(4)	%
Foreign currency exchange impact					Flat						Flat
Adjusted operating profit growth, on a constant-currency basis					(6)	%					(5)	%

Note: Table may not foot due to rounding.

For more information on the reconciling items, please refer to the Significant Items Impacting Comparability section above.

Adjusted Diluted EPS and Related Constant-currency Growth Rates

This measure is used in reporting to our Board of Directors and executive management. We believe that this measure provides useful information to investors because it is the profitability measure we use to evaluate earnings performance on a comparable year-to-year basis.

The reconciliation of our GAAP measure, diluted EPS, to adjusted diluted EPS and the related constant-currency growth rates follows:

	Quarter Ended						Nine-Month Period Ended
Per Share Data	Feb. 27, 2022		Feb. 28, 2021		Change		Feb. 27, 2022		Feb. 28, 2021		Change
Diluted earnings per share, as reported	$	1.08	$	0.96	13	%	$	3.07	$	3.10	(1)	%
Divestitures gain		(0.28)		-				(0.28)		-
Transaction costs		0.01		-				0.07		-
Non-income tax recovery		-		-				(0.02)		-
Acquisition integration costs		0.01		-				0.03		-
Investment activity, net		(0.01)		(0.08)				(0.03)		(0.10)
Mark-to-market effects		0.03		(0.07)				(0.02)		(0.15)
Restructuring charges		0.02		0.02				0.01		0.02
Product recall		-		(0.01)				-		-
Adjusted diluted earnings per share	$	0.84	$	0.82	2	%	$	2.82	$	2.88	(2)	%
Foreign currency exchange impact					Flat						Flat
Adjusted diluted earnings per share growth, on a constant-currency basis					2	%					(2)	%

Note: Table may not foot due to rounding.

For more information on the reconciling items, please refer to the Significant Items Impacting Comparability section above.

See our reconciliation below of the effective income tax rate as reported to the adjusted effective income tax rate for the tax impact of each item affecting comparability.

Constant-currency After-tax Earnings from Joint Ventures Growth Rates

We believe that this measure provides useful information to investors because it provides transparency to underlying performance of our joint ventures by excluding the effect that foreign currency exchange rate fluctuations have on year-to-year comparability given volatility in foreign currency exchange markets.

After-tax earnings from joint ventures growth rates on a constant-currency basis are calculated as 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 Feb. 27, 2022		154	%	(12)	pts	167	%
Nine-Month Period Ended Feb. 27, 2022		3	%	(2)	pts	5	%
Note: Table may not foot due to rounding.

Net Sales Growth Rates for Our Canada Operating Unit on Constant-currency Basis

We believe that this measure of our Canada operating unit net sales provides useful information to investors because it provides transparency to the underlying performance for the Canada operating unit within our North America Retail segment by excluding the effect that foreign currency exchange rate fluctuations have on year-to-year comparability given volatility in foreign currency exchange markets.

Net sales growth rates for our Canada operating unit on a constant-currency basis are calculated as follows:

	Percentage Change in Net Sales as Reported		Impact of Foreign Currency Exchange		Percentage Change in Net Sales on Constant- Currency Basis
Quarter Ended Feb. 27, 2022	(2)	%	Flat		(2)	%
Nine-Month Period Ended Feb. 27, 2022	5	%	4	pts	1	%
Note: Table may not foot due to rounding.

Constant-currency Segment Operating Profit Growth Rates

We believe that this measure provides useful information to investors because it provides transparency to underlying performance of our segments by excluding the effect that foreign currency exchange rate fluctuations have on year-to-year comparability given volatility in foreign currency exchange markets.

Our segments’ operating profit growth rates on a constant-currency basis are calculated as follows:

	Quarter Ended Feb. 27, 2022
	Percentage Change in Operating Profit as Reported		Impact of Foreign Currency Exchange		Percentage Change in Operating Profit on Constant-Currency Basis
North America Retail	(3)	%	Flat		(3)	%
International	(13)	%	2	pts	(16)	%
Pet	8	%	Flat		8	%
North America Foodservice	(13)	%	Flat		(13)	%

	Nine-Month Period Ended Feb. 27, 2022
	Percentage Change in Operating Profit as Reported		Impact of Foreign Currency Exchange		Percentage Change in Operating Profit on Constant-Currency Basis
North America Retail	(7)	%	Flat		(7)	%
International	(14)	%	4	pts	(18)	%
Pet	15	%	Flat		15	%
North America Foodservice	27	%	Flat		27	%
Note: Tables may not foot due to rounding.

Adjusted Effective Income Tax Rates

We believe this measure provides useful information to investors because it presents the adjusted effective income tax rate on a comparable year-to-year basis.

Adjusted effective income tax rates are calculated as follows:

	Quarter Ended								Nine-Month Period Ended
	Feb. 27, 2022				Feb. 28, 2021				Feb. 27, 2022				Feb. 28, 2021
In Millions (Except Per Share Data)	Pretax Earnings (a)		Income Taxes		Pretax Earnings (a)		Income Taxes		Pretax Earnings (a)		Income Taxes		Pretax Earnings (a)		Income Taxes
As reported	$	755.9	$	123.2	$	754.0	$	162.0	$	2,269.0	$	451.8	$	2,378.8	$	522.2
Divestitures gain		(170.1)		0.4		-		-		(170.1)		0.4		-		-
Transaction costs		8.6		(1.2)		-		-		56.8		11.2		-		-
Investment activity, net		(11.1)		(0.2)		(59.3)		(11.7)		(20.9)		0.3		(78.3)		(16.1)
Non-income tax recovery		0.2		0.1		-		-		(20.4)		(6.9)		-		-
Acquisition integration costs		4.3		1.0		-		-		20.2		4.6		-		-
Mark-to-market effects		20.0		4.6		(55.7)		(12.8)		(16.2)		(3.7)		(118.0)		(27.1)
Restructuring charges		9.3		1.7		11.7		2.0		7.9		3.6		13.6		2.5
Product recall		-		-		(7.8)		(0.9)		-		-		(0.7)		(0.1)
As adjusted	$	617.1	$	129.5	$	643.1	$	138.6	$	2,126.3	$	461.3	$	2,195.5	$	481.4
Effective tax rate:
As reported				16.3%				21.5%				19.9%				22.0%
As adjusted				21.0%				21.6%				21.7%				21.9%
Sum of adjustment to income taxes			$	6.4			$	(23.4)			$	9.5			$	(40.8)
Average number of common shares - diluted EPS				612.4				619.4				613.5				619.6
Impact of income tax adjustments on adjusted diluted EPS			$	(0.01)			$	0.03			$	(0.02)			$	0.06

Note: Table may not foot due to rounding.

(a) Earnings before income taxes and after-tax earnings from joint ventures.

For more information on the reconciling items, please refer to the Significant Items Impacting Comparability section above.

Glossary

AOCI. Accumulated other comprehensive income (loss).

Adjusted diluted EPS. Diluted EPS adjusted for certain items affecting year-to-year comparability.

Adjusted operating profit. Operating profit adjusted for certain items affecting year-to-year comparability.

Adjusted operating profit margin. Operating profit adjusted for certain items affecting year-over-year comparability, divided by net sales.

Constant currency. Financial results translated to United States dollars using constant foreign currency exchange rates based on the rates in effect for the comparable prior-year period. 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.

Core working capital. Accounts receivable plus inventories less accounts payable.

COVID-19. Coronavirus disease (COVID-19) is an infectious disease caused by a novel coronavirus. In March 2020, the World Health Organization declared COVID-19 a global pandemic.

Derivatives. Financial instruments such as futures, swaps, options, and forward contracts that we use to manage our risk arising from changes in commodity prices, interest rates, foreign exchange rates, and stock prices.

Euribor. Euro Interbank Offered Rate.

Fair value hierarchy. For purposes of fair value measurement, we categorize assets and liabilities into one of three levels based on the assumptions (inputs) used in valuing the asset or liability. Level 1 provides the most reliable measure of fair value, while Level 3 generally requires significant management judgment. The three levels are defined as follows:

Level 1:Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2: Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

Level 3:Unobservable inputs reflecting management’s assumptions about the inputs used in pricing the asset or liability.

Free cash flow. Net cash provided by operating activities less purchases of land, buildings, and equipment.

Generally Accepted Accounting Principles (GAAP). Guidelines, procedures, and practices that we are required to use in recording and reporting accounting information in our financial statements.

Goodwill. The difference between the purchase price of acquired companies plus the fair value of any noncontrolling and redeemable interests and the related fair values of net assets acquired.

Gross margin. Net sales less cost of sales.

Hedge accounting. Accounting for qualifying hedges that allows changes in a hedging instrument’s fair value to offset corresponding changes in the hedged item in the same reporting period. Hedge accounting is permitted for certain hedging instruments and hedged items only if the hedging relationship is highly effective, and only prospectively from the date a hedging relationship is formally documented.

Holistic Margin Management (HMM). Company-wide initiative to use productivity savings, mix management, and price realization to offset input cost inflation, protect margins, and generate funds to reinvest in sales-generating activities.

Interest bearing instruments. Notes payable, long-term debt, including current portion, cash and cash equivalents, and certain interest bearing investments classified within prepaid expenses and other current assets and other assets.

LIBOR. London Interbank Offered Rate.

Mark-to-market. The act of determining a value for financial instruments, commodity contracts, and related assets or liabilities based on the current market price for that item.

Net mark-to-market valuation of certain commodity positions. Realized and unrealized gains and losses on derivative contracts that will be allocated to segment operating profit when the exposure we are hedging affects earnings.

Net price realization. The impact of list and promoted price changes, net of trade and other price promotion costs.

Net realizable value. The estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.

Noncontrolling interests. Interests of subsidiaries held by third parties.

Notional amount. The amount of a position or an agreed upon amount in a derivative contract on which the value of financial instruments are calculated.

OCI. Other Comprehensive Income.

Organic net sales growth. Net sales growth adjusted for foreign currency translation, acquisitions, divestitures and a 53^rd fiscal week, when applicable.

Project-related costs. Costs incurred related to our restructuring initiatives not included in restructuring charges.

Redeemable interest. Interest of subsidiaries held by a third party that can be redeemed outside of our control and therefore cannot be classified as a noncontrolling interest in equity.

Reporting unit. An operating segment or a business one level below an operating segment.

Strategic Revenue Management (SRM). A company-wide capability focused on generating sustainable benefits from net price realization and mix by identifying and executing against specific opportunities to apply tools including pricing, sizing, mix management, and promotion optimization across each of our businesses.

Supply chain input costs. Costs incurred to produce and deliver product, including costs for ingredients and conversion, inventory management, logistics, and warehousing.

Translation adjustments. The impact of the conversion of our foreign affiliates’ financial statements to United States dollars for the purpose of consolidating our financial statements.

Variable interest entities (VIEs). A legal structure that is used for business purposes that either (1) does not have equity investors that have voting rights and share in all the entity’s profits and losses or (2) has equity investors that do not provide sufficient financial resources to support the entity’s activities.

Working capital. Current assets and current liabilities, all as of the last day of our fiscal year.

CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This report contains or incorporates by reference forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on our current expectations and assumptions. We also may make written or oral forward-looking statements, including statements contained in our filings with the Securities and Exchange Commission and in our reports to stockholders.

The words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “plan,” “project,” or similar expressions identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results and those currently anticipated or projected. We wish to caution you not to place undue reliance on any such forward-looking statements.

In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, we are identifying important factors that could affect our financial performance and could cause our actual results in future periods to differ materially from any current opinions or statements.

Our future results could be affected by a variety of factors, such as: the impact of the COVID-19 pandemic on our business, suppliers, consumers, customers, and employees; disruptions or inefficiencies in the supply chain, including any impact of the COVID-19 pandemic; competitive dynamics in the consumer foods industry and the markets for our products, including new product introductions, advertising activities, pricing actions, and promotional activities of our competitors; economic conditions, including changes in inflation rates, interest rates, tax rates, or the availability of capital; product development and innovation; consumer acceptance of new products and product improvements; consumer reaction to pricing actions and changes in promotion levels; acquisitions or dispositions of businesses or assets; changes in capital structure; changes in the legal and regulatory environment, including tax legislation, labeling and advertising regulations, and litigation; impairments in the carrying value of goodwill, other intangible assets, or other long-lived assets, or changes in the useful lives of other intangible assets; changes in accounting standards and the impact of significant accounting estimates; product quality and safety issues, including recalls and product liability; changes in consumer demand for our products; effectiveness of advertising, marketing, and promotional programs; changes in consumer behavior, trends, and preferences, including weight loss trends; consumer perception of health-related issues, including obesity; consolidation in the retail environment; changes in purchasing and inventory levels of significant customers; fluctuations in the cost and availability of supply chain resources, including raw materials, packaging, energy, and transportation; effectiveness of restructuring and cost saving initiatives; volatility in the market value of derivatives used to manage price risk for certain commodities; benefit plan expenses due to changes in plan asset values and discount rates used to determine plan liabilities; failure or breach of our information technology systems; foreign economic conditions, including currency rate fluctuations; and political unrest in foreign markets and economic uncertainty due to terrorism or war.

You should also consider the risk factors that we identify in Item 1A of Part I of our Annual Report on Form 10-K for the fiscal year ended May 30, 2021 which could also affect our future results.

We undertake no obligation to publicly revise any forward-looking statements to reflect events or circumstances after the date of those statements or to reflect the occurrence of anticipated or unanticipated events.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The estimated maximum potential value-at-risk arising from a one-day loss in fair value for our interest rate, foreign exchange, commodity, and equity market-risk-sensitive instruments outstanding as of February 27, 2022, was as follows:

In Millions		One-day Loss in Fair Value		Change During Nine-Month Period Ended Feb. 27, 2022	Analysis of Change
Interest rate instruments	$	37	$	-	Immaterial
Foreign currency instruments		21		(5)	Lower Exchange Rate Volatility
Commodity instruments		10		6	Larger Portfolio & Higher Market Volatility
Equity instruments		3		-	Immaterial

For additional information, see Item 7A of Part II of our Annual Report on Form 10-K for the fiscal year ended May 30, 2021.

Item 4. Controls and Procedures.

We, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based on our evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of February 27, 2022, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 is (1) recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, in a manner that allows timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) during the quarter ended February 27, 2022 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

The following table sets forth information with respect to shares of our common stock that we purchased during the quarter ended February 27, 2022:

Period	Total Number of Shares Purchased (a)		Average Price Paid Per Share	Total Number of Shares Purchased as Part of a Publicly Announced Program (b)	Maximum Number of Shares that may yet be Purchased Under the Program (b)
November 29, 2021 - January 2, 2022	1,123,376	$	65.37	1,123,376	27,146,154
January 3, 2022 - January 30, 2022	858,678		68.32	858,678	26,287,476
January 31, 2022 - February 27, 2022	636,699		67.83	636,699	25,650,777
Total	2,618,753	$	66.93	2,618,753	25,650,777

(a)The total number of shares purchased includes shares of common stock withheld for the payment of withholding taxes upon the distribution of deferred option units.

(b)On May 6, 2014, our Board of Directors approved an authorization for the repurchase of up to 100,000,000 shares of our common stock. Purchases can be made in the open market or in privately negotiated transactions, including the use of call options and other derivative instruments, Rule 10b5-1 trading plans, and accelerated repurchase programs. The Board did not specify an expiration date for the authorization.

PART II. OTHER INFORMATION

Item 6.	Exhibits.
3.1	By-Laws of General Mills, Inc. (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed January 28, 2022).
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	Financial Statements from the Quarterly Report on Form 10-Q of the Company for the quarter ended February 27, 2022, formatted in Inline Extensible Business Reporting Language: (i) Consolidated Statements of Earnings; (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets; (iv) Consolidated Statements of Total Equity and Redeemable Interest; (v) Consolidated Statements of Cash Flows; and (vi) Notes to Consolidated Financial Statements.
104	Cover Page, formatted in Inline Extensible Business Reporting Language and contained in Exhibit 101.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	GENERAL MILLS, INC.
	(Registrant)

Date: March 23, 2022	/s/ Mark A. Pallot
	Mark A. Pallot
	Vice President, Chief Accounting Officer
	(Principal Accounting Officer and Duly Authorized Officer)