General Mills
2 0 1 5 A N N U A L R E P O R T
Making Food People Love
U.S. Retail
Convenience Stores
and Foodservice
International
Fiscal 2015 Financial Summary
In millions, except per share and
return on capital data
53 Weeks Ended
May 31, 2015
52 Weeks Ended
May 25, 2014
Change
Change on a Constant
Currency Basis *
Net Sales
$ 17,630
$ 17,910
Segment Operating Profi t*
$ 3,035
$ 3,154
Net Earnings Attributable to General Mills
$ 1,221
$ 1,824
Diluted Earnings per Share (EPS)
$ 1.97
$ 2.83
– 2%
– 4%
– 33%
– 30%
+ 1%
– 2%
Adjusted Diluted EPS, Excluding Certain Items
Aff ecting Comparability*
$ 2.86
$ 2.82
+ 1%
+ 4%
Return on Average Total Capital*
Average Diluted Shares Outstanding
11.2%
619
646
11.6%
–40 basis points
–20 basis points
– 4%
+ 8%
Adjusted Diluted
Earnings per Share*
(dollars)
2011
2012
2013
2014
2015
2.48
2.56
2.72
2.82
2.86
Dividends per Share
$ 1.67
$ 1.55
Net Sales
(dollars in millions)
Segment Operating Profi t*
(dollars in millions)
2011
2012
2013
2014
2015
14,880
16,658
17,774
17,910
17,630
2011
2012
2013
2014
2015
2,946
3,012
3,223
3,154
3,035
*(cid:17)See page 31 for discussion of non-GAAP measures.
Making Food People Love
At General Mills, we serve the world by making
food people love. We’re putting the consumer
fi rst, understanding their food preferences, how
they shop and how they cook today, and respond-
ing quickly to those desires. By focusing on
consumer needs, we expect to drive market-
leading growth for General Mills and deliver
superior returns to our shareholders.
Joint Ventures
General Mills at a Glance
13%
26%
17%
13%
16%
19%
41%
20%
33%
54%
20%
22%
22%
84%
U.S. Retail
Net Sales
by Operating Unit
$10.5 Billion
26% Meals
22% Cereal
20% Snacks
$5.1 Billion
41% Europe
22% Canada
20% Asia/Pacifi c
19% Baking Products
17% Latin America
13% Yogurt and Other
International
Net Sales by Region
Convenience Stores
and Foodservice
Net Sales by Brand Type
Joint Ventures
Net Sales by Joint Venture
(not consolidated,
proportionate share)
$2.0 Billion
$1.1 Billion
54% Branded to
84% Cereal Partners
Foodservice Operators
Worldwide (CPW)
33% Branded to Consumers
16% Häagen-Dazs
13% Unbranded
Japan (HDJ)
2015 ANNUAL REPORT
1
General Mills
Total Shareholder Return
(fi scal years, stock price appreciation
plus reinvested dividends, compound
annual growth)
16%
13%
8%
2015
Latest
3 Years
Latest
5 Years
Source: Bloomberg
Dividends per Share
(dollars)
1.67
1.55
1.32
1.22
1.12
2011
2012 2013 2014
2015
To Our Shareholders:
Ken Powell
Chairman and
Chief Executive Offi cer
General Mills 2015 operating performance
was mixed. Where we had product news and
marketing messages that were on-trend
with consumers’ evolving food preferences, our
businesses grew. But we didn’t have enough of
these initiatives to lift our sales in the aggregate,
and our profi t growth was less than originally
targeted. Strategic actions that we’ve taken
during the year will position us for stronger
performance in 2016.
General Mills net sales for the fi scal year ended May 31, 2015,
declined 2 percent to $17.6 billion, as unfavorable foreign
exchange off set the benefi ts of a 53rd week in the fi scal year
and six months of incremental contribution from the Annie’s, Inc.
(Annie’s) organic foods business we acquired in October 2014.
Excluding the impact of foreign exchange, our net sales increased
1 percent in fi scal 2015.* Total segment operating profi t declined
4 percent to $3.0 billion. On a constant-currency basis, total
segment operating profi t declined 2 percent.
Diluted earnings per share totaled $1.97 in 2015, below the prior
year primarily due to restructuring costs, an impairment charge
and a one-time tax expense. Adjusted diluted earnings per share,
which excludes these and certain other items aff ecting compara-
bility of results, rose 1 percent to $2.86. Excluding the impact of
foreign exchange, adjusted diluted earnings per share increased
4 percent.
* See page 31 for a reconciliation of this and other non-GAAP measures used in
this letter.
2
GENERAL MILLS
Net sales for U.S. Retail, our largest business seg-
ment, declined 1 percent to $10.5 billion. Our brands
achieved share gains in categories representing
65 percent of our retail sales in Nielsen-measured
channels, but overall sales trends in many categories
were weak, refl ecting the impact of changing
consumer food preferences.
Consumers are increasingly interested in natural
foods with simple ingredients and are limiting things
like gluten, simple carbohydrates and artifi cial ingre-
dients. They also are looking for more protein, fi ber,
whole grains and organic products. And they are
snacking more than ever. In categories where we
applied a “consumer fi rst” approach and responded to
these changes, we posted good growth. For example,
retail sales for our grain snacks grew 4 percent, and
we gained nearly two points of market share on the
strength of our Nature Valley and Fiber One brands.
Yoplait yogurt generated solid sales and share gains,
led by strong performance on our Greek variet-
ies, and we saw a resurgence of interest in Yoplait
Original yogurt as we emphasized its all-family
snack appeal.
Our Convenience Stores and Foodservice segment
had outstanding results in fi scal 2015. Net sales
reached the $2 billion mark, a 4 percent increase over
last year. And segment operating profi t grew 15 per-
cent to a record $353 million. We remain focused
on six key product platforms in foodservice channels:
Growing Our Core with Yoplait
By putting the consumer fi rst, we gener-
ated 7 percent retail sales growth and
gained nearly a point of market share for our
U.S. Retail yogurt business in fi scal 2015.
Consumers like the health benefi ts of yogurt,
and Greek varieties remain the largest seg-
ment of the $8 billion U.S. yogurt category.
We’ve been promoting the great taste of
our Yoplait Greek varieties, and launched
Yoplait Greek 100 Whips! for consumers
who prefer a lighter yogurt texture with just
100 calories per serving. We also renewed
growth on Yoplait Original yogurt by adver-
tising its all-family appeal as a great-tasting,
good-for-you snack. We recently reduced
sugar across this line by 25 percent. And
retail sales for our kid-oriented yogurts
returned to growth, driven by the removal
of artifi cial colors and fl avors. We have more
consumer-fi rst innovation coming in 2016,
including Yoplait Plenti, a combination of
grains and seeds mixed into delicious Yoplait
Greek yogurt, for consumers looking for a
heartier yogurt experience.
2015 ANNUAL REPORT
3
Our Five Global Categories Are Large and Growing
Category
Ready-to-eat Cereal
Ice Cream
Yogurt
Convenient Meals
Sweet and Savory Snacks
* Projected 5-year compound rate
Source: Euromonitor, calendar 2014
2014 Retail
Sales in Billions
Projected
Growth*
$ 28
$ 71
$ 83
$ 118
$ 287
4%
7%
8%
5%
6%
Product renovation and new items
that met changing consumer interests
generated good growth in fi scal 2015.
cereal, snacks, yogurt, mixes, biscuits and frozen
breakfast. These priority businesses, which account
for more than 70 percent of the segment’s operating
profi t, posted combined net sales growth of 9 percent
for the year.
Net sales for our International segment declined
5 percent to $5.1 billion, and segment operating profi t
declined 2 percent, refl ecting negative foreign cur-
rency translation eff ects. On a constant-currency
basis, International net sales grew 6 percent and seg-
ment operating profi t rose 9 percent. This included
constant-currency net sales gains of 17 percent in
Latin America, 5 percent in the Asia/Pacifi c region
and 5 percent in the Europe region.
In addition to these three operating segments, we
hold 50-percent non-consolidated interests in two
joint ventures outside of North America. Together,
Cereal Partners Worldwide (CPW) and Häagen-Dazs
Japan (HDJ) contributed $84 million in after-tax
earnings in fi scal 2015. This was 6 percent below last
year’s results, refl ecting unfavorable foreign currency
exchange. On a constant-currency basis, after-tax
earnings from joint ventures matched year-ago levels.
In fi scal 2015, we returned $2.2 billion to share-
holders through share repurchases and dividends.
We repurchased approximately 22 million shares
of common stock, reducing our average number of
shares outstanding by 4 percent. We also increased
our annual dividend by 8 percent, including raising our
quarterly dividend rate eff ective with our May 2015
payment. The new annualized rate of $1.76 represents
a yield of roughly 3 percent at recent prices for
General Mills stock. General Mills and its predeces-
sor fi rm have paid shareholder dividends without
interruption or reduction for 116 years, and our plans
call for increasing our dividend as our earnings grow.
Our total shareholder return, which is a combination
of stock price appreciation and dividends, totaled
8 percent in fi scal 2015. This lagged the broader
market, as the S&P 500 Index generated 13 percent
return for the year. Over the past fi ve, 10, 15 and even
20 years, General Mills has consistently delivered
double-digit returns to shareholders. We outper-
formed the broader market during all of those time
periods except during the most recent fi ve fi scal
years, when the S&P 500 Index posted a strong
17 percent annual compound return to shareholders.
4
GENERAL MILLS
Our Business Portfolio is a Strategic Advantage
5% 1%
10%
20%
10%
5%
18%
15%
16%
Fiscal 2015
Net Sales by Platform
$18.7 Billion*
20% Cereal
18% Snacks
16% Yogurt
15% Convenient Meals
5% Super-premium
Ice Cream
10% Dough
10% Baking Mixes and
Ingredients
5% Vegetables
1% Other
* Non-GAAP measure. Includes $17.6 billion consolidated net sales
plus $0.9 billion proportionate share of CPW (cereal) net sales plus
$0.2 billion proportionate share of HDJ (ice cream) net sales.
General Mills Long-term Growth Model
Our Priorities for Fiscal 2016
Growth Factor
Compound Growth Rate
Net Sales
Low single-digit
Segment Operating Profi t
Mid single-digit
Adjusted Diluted
Earnings per Share
Dividend Yield
High single-digit
2 to 3 percent
Total Return to Shareholders
Double-digit
We remain committed to our long-term growth
model and believe that our businesses can generate
low single- digit net sales growth, mid single-digit
segment operating profi t growth and high single-digit
growth in adjusted diluted earnings per share. When
you add in a dividend yield of between 2 and 3 percent,
we should deliver double-digit returns to shareholders
over the long term.
Our focus is on fi ve global growth categories(cid:28)—(cid:28)
cereal, ice cream, yogurt, convenient meals and
sweet and savory snacks. According to Euromonitor,
sales in these categories are projected to grow at
attractive rates because they are on-trend with the
consumer food trends described earlier. More than
70 percent of our worldwide sales are concentrated
in these fi ve platforms, so we see strong opportuni-
ties to grow our brands in these categories.
As we enter fi scal 2016, we are dedicated to acceler-
ating sales growth, which will refl ect one less week
in the fi scal year. We’ll drive growth by responding
to changing consumer demands and reshaping our
product portfolio and our organization. This will gen-
erate funds we can reinvest in our business. We have
three key priorities described below.
Drive More from the Core
Our product portfolio is built on a core of well-known,
iconic brands that have stood the test of time. We
continue to renovate these brands to keep them rel-
evant to today’s consumer and innovate to introduce
2015 ANNUAL REPORT
5
Expanding Our Natural and
Organic Food Portfolio
U.S. industry sales for natural and organic
foods have been growing at a double-digit
pace over the past three years. And sales
are projected to continue to grow at a
double-digit rate. We’ve been building our
capabilities for sourcing, manufacturing
and marketing natural and organic brands
for the past 15 years. With the acquisition
of Annie’s, Inc. in October 2014, we’re now
the fourth-largest natural and organic food
manufacturer in the U.S. We have strong
levels of innovation coming in 2016 across
our brands, including new Cascadian Farm
cereals, Annie’s soups and Food Should
Taste Good snack bars. We see great oppor-
tunities to grow our brands by innovating,
and by increasing their distribution in nat-
ural and organic stores and in traditional
grocery outlets.
new products that meet changing consumer needs. For example,
nearly 30 percent of U.S. consumers have purchased gluten-free
products as recently as our fourth fi scal quarter, so we’ve
increased our gluten-free cereal off erings to include varieties of
granola and hot oatmeal. And starting this summer, fi ve varieties
of Cheerios will be gluten free. For consumers desiring more sim-
ple ingredients, we are removing artifi cial fl avors and colors from
artifi cial sources from all of our Big G cereals by December 2017.
In our Convenience Stores and Foodservice business, we con-
tinue to innovate on our Pillsbury line of frozen breakfast items
served in K-12 schools. This line of pancakes, waffl es, French
toast and bagels can be heated right in the package(cid:28)—(cid:28) quick and
easy preparation for foodservice operators(cid:28)—(cid:28) and kids love
the great taste of these portable breakfast treats. We’re now
expanding this concept to school lunchrooms with a heat-and-
serve line of Old El Paso gorditas.
Around the world, consumer preferences are changing, too. Our
International business has been innovating on our global brands,
launching Häagen-Dazs super-premium ice cream stick bars in
France, new vegetable-packed varieties of Wanchai Ferry dump-
lings in China, and a line of Nature Valley popcorn bars in the UK.
These are just a few examples of the initiatives we have underway
to grow our core brands. We have more exciting product news
coming across all of our business segments throughout fi scal
2016 that we believe will generate sales and profi t growth.
Reshape Our Portfolio for Growth
We’ve been reshaping our business through acquisitions, divesti-
tures and expansion of our existing brands into new geographies.
In the U.S., we’ve been growing our natural and organic portfolio
over the past 15 years. It started with the 2000 acquisition
of Small Planet Foods, which included Cascadian Farm and Muir
Glen brands. Since then, we’ve added to our portfolio with
Lärabar nutrition bars, Immaculate baking products, Food Should
Taste Good snacks, and Mountain High and Liberté yogurt. With
the addition of a full year of results for Annie’s, our natural and
organic sales total nearly $700 million, and we expect this port-
folio to exceed $1 billion in annual sales by 2020.
Over the past decade, we’ve taken actions to focus our
Convenience Stores and Foodservice portfolio. The result is a
portfolio that leverages our well-known consumer brands(cid:28)—(cid:28)
more than 85 percent of our sales come from products that are
branded to foodservice operators or the fi nal consumer. And
6
GENERAL MILLS
we’ve signifi cantly improved our segment operat-
ing profi t margin from 8.6 percent in fi scal 2008 to
17.7 percent today.
We’ve also been growing our International businesses
by expanding our presence in emerging markets and
through strategic acquisitions, such as Yoki in Brazil.
This summer, we brought an existing brand into a
new market with the introduction of Yoplait yogurt
in China. The Yoplait brand originated in France
50 years ago and today is available in more than
50 markets worldwide. We’re now competing in the
$10 billion yogurt category in China with three yogurt
off erings: a thick and creamy French-style yogurt, a
fruit-on-the-bottom variety and a drinkable yogurt
containing fresh fruit. We are excited about the
growth prospects we see for Yoplait and the strong
contributions it can make to our $725 million business
in China.
Fund Our Future
We believe our business requires a balanced approach
to drive growth(cid:28)—(cid:28) balanced between protecting our
margins, investing in our business for future growth
and providing solid returns to our shareholders over
the long term. While our primary focus is on driving
topline growth, we also look for opportunities to
increase productivity and reduce expenses. Through
Holistic Margin Management (HMM), we’ve been
able to remove non-value adding costs across the
company. Since 2010, we’ve generated a cumulative
$2.4 billion in savings in our cost of sales.
During fi scal 2015, we took additional signifi cant
actions to streamline our organization and improve
our operating effi ciency. Through Project Century,
we are simplifying our North American supply chain,
better balancing manufacturing and distribution, and
adding fl exibility to adjust for future growth.
Project Catalyst is focused on increasing our orga-
nizational eff ectiveness across our U.S. businesses.
We’ve created a new structure that allows us to be
faster and more agile, so we can quickly adjust to a
changing marketplace. We’re also making changes
to our policies and practices that reduce overhead
expense. And most recently, we announced Project
Compass, which is our initiative to increase organi-
zational eff ectiveness within our International
business segment.
Reshaping Our Convenience Stores and Foodservice Portfolio
U.S. consumers spend more than $650 billion annually for food eaten away
from home, and our Convenience Stores and Foodservice team has been
reshaping its portfolio to drive growth in this industry. We’ve been focusing
on our highest-margin businesses and divesting lower-margin performers.
The result has been double-digit segment operating profi t growth com-
pounded over the past seven years, and a 900-basis-point increase in profi t
margin. We’re also emphasizing our six focus platforms(cid:28)—(cid:28) cereal, snacks,
yogurt, mixes, biscuits and frozen breakfast(cid:28)—(cid:28) whose combined sales have
been compounding at a 5 percent rate in recent years. We compete in
large and growing channels in the foodservice industry, including K-12 schools,
colleges and universities, and convenience stores. We’re now expanding our
presence in the fresh bakery section of convenience stores with our Pillsbury
line of grab-and-go baked goods.
Convenience Stores
and Foodservice Segment
Operating Profi t
(fi scal years, dollars in millions)
353
17.7%
170
8.6%
2008
2015
Segment
Operating Profi t
Profi t Margin
(operating
profi t divided
by net sales)
2015 ANNUAL REPORT
7
Growing Our International
Core with Old El Paso
Despite slow economic growth and a
challenging marketplace, General Mills
posted 5 percent constant-currency net
sales growth in fi scal 2015 in our Europe region,
which also includes Australia and New Zealand. This
performance was led by Old El Paso Mexican foods.
Old El Paso is a global brand(cid:28)—(cid:28) it’s available in 60 markets
worldwide. The convenience of these Mexican dinner kits,
combined with innovative new products, is a great fi t for consumers
everywhere who like to experiment with foods with ethnic fl avors.
In our Europe region, net sales for Old El Paso grew by double digits on
the strength of our Stand ’n Stuff tortillas, supported by strong levels
of advertising. In 2016, we’ll introduce an Old El Paso Restaurante line
in European markets. These kits contain high-quality ingredients and
zesty fl avor combinations for a restaurant-quality meal at home.
International Performance
by Geographic Region
(fi scal 2015, dollars in millions)
Europe
Canada
Asia/Pacifi c
Net Sales
$ 2,126
$ 1,105
$ 1,024
Latin America
$ 873
Total International
$ 5,128
% Change on
a Constant
Currency Basis*
5%
Flat
5%
17%
6%
*See page 31 for discussion of non-GAAP measures.
We delivered $75 million in cost savings from these
actions in fi scal 2015 and expect this to grow to
between $285 million and $310 million in fi scal 2016
from all our initiatives combined. A portion of these
savings is being reinvested into the business through
activities like consumer-focused promotions and
product development and renovation(cid:28)—(cid:28) actions that
drive future sales growth.
Our People Drive Our Success
The skill and talent of our 42,000 employees around
the world gives me confi dence we will achieve our
performance goals. Their hard work and dedica-
tion is truly a competitive advantage for us. Several
members of our leadership team have announced
their retirement in the past fi scal year. Marc Belton,
Mike Davis, Luis Merizalde, Rick Palmore and Kris
Wenker all made signifi cant contributions to General
Mills, and I want to thank them for their dedication to
our company during their careers here. In addition,
I’d like to thank Ray Gilmartin, Judy Hope and Hilda
Ochoa-Brillembourg, who are retiring from our board of
directors in September. They have provided invaluable
counsel during their many years of service on our board.
In closing, I want to thank you for your investment
in General Mills. We are keenly focused on driving
value for you, our shareholders. We appreciate
your confi dence in our strategies and our company.
And we look forward to reporting on continued
strong performance in the future as we make food
people love.
Kendall J. Powell
Chairman and Chief Executive Offi cer
August 1, 2015
8
GENERAL MILLS
Financial Review
Contents
Financial Summary
Selected Financial Data
Management’s Discussion and Analysis of Financial
Condition and Results of Operations
Non-GAAP Measures
Reports of Management and Independent Registered
Public Accounting Firm
Consolidated Financial Statements
Notes to Consolidated Financial Statements
1 Basis of Presentation and Reclassifi cations
2 Summary of Signifi cant Accounting Policies
3 Acquisition and Divestiture
4 Restructuring, Impairment, and Other Exit Costs
5 Investments in Unconsolidated Joint Ventures
6 Goodwill and Other Intangible Assets
7 Financial Instruments, Risk Management Activities, and Fair Values
8 Debt
9 Redeemable and Noncontrolling Interests
10 Stockholders’ Equity
11 Stock Plans
12 Earnings per Share
13 Retirement Benefi ts and Postemployment Benefi ts
14 Income Taxes
15 Leases, Other Commitments, and Contingencies
16 Business Segment and Geographic Information
17 Supplemental Information
18 Quarterly Data
Glossary
Total Return to Stockholders
10
12
13
31
37
39
44
44
47
48
50
51
52
61
63
63
66
68
69
76
78
78
80
82
83
85
2015 ANNUAL REPORT
9
Financial Summary
Adjusted Gross Margin*
(percent of net sales)
INCREASING OUR EFFICIENCY
2008
2009
2010
2011
201 2
2013
2014
2015
* See page 31 for discussion of
non-GAAP measures.
35.1%
36.4%
39.7%
39.4%
36.9%
36.2%
35.4%
34.7%
Cash Flow from Operations
(dollars in millions)
2011
201 2
2013
2014
2015
1,531
2,407
2,926
2,541
2,543
Core Working Capital
(dollars in millions)
2011
201 2
2013
2014
2015
1,776
1,654
1,569
1,432
1,244
For the past several years, we have been increasing our
productivity and effi ciency to off set input cost infl ation
and fuel our consumer-fi rst initiatives. Input cost infl a-
tion has been averaging 4 to 5 percent over the past fi ve
years, and we expect costs to remain infl ationary for
the foreseeable future. Holistic Margin Management
(HMM) is our company-wide initiative to use produc-
tivity savings, mix management and price realization
to off set input cost infl ation, protect margins and gen-
erate funds to reinvest in sales-generating activities.
Th anks to HMM actions that helped drive savings in
our cost of sales, we’ve been able to hold our gross
margin relatively steady for the past eight years. Th is
period was marked by signifi cant volatility of input
costs from year to year and a change in our product
mix as we acquired new businesses.
To ensure we remain competitive in the marketplace,
we took additional actions in fi scal 2015 to increase our
effi ciency. Project Century is our eff ort to streamline
our North American supply chain. Project Catalyst is
focused on increasing our organizational eff ectiveness
across our U.S. businesses. And in June, we launched
Project Compass to increase organizational eff ective-
ness within our International business segment. We
also are making changes to policies and practices that
reduce overhead expense across the company.
Combined, these initiatives generated $75 million in
cost savings in fi scal 2015, and we expect to achieve
$285 million to $310 million in cost savings in fi scal 2016.
GENERATING CASH
Our businesses have a long history of strong cash gen-
eration. Over the past fi ve years, we produced a cumula-
tive $11.9 billion of operating cash fl ow.
Our discipline on core working capital, which is
accounts receivable plus inventories less accounts pay-
able, has contributed to our operating cash fl ow. Over
the past several years, we’ve been able to reduce our
core working capital primarily through improvements
in managing our accounts payable. Since 2011, our core
working capital has declined by nearly 30 percent,
while our net sales have grown by nearly 20 percent
during that time period. In fi scal 2015, we reduced our
core working capital by 13 percent.
10
GENERAL MILLS
Fixed Asset Investment
(percent of net sales)
USES OF CASH
2011
2012
2013
2014
2015
4.4%
4.1%
3.4%
3.7%
4.0%
Dividends Paid
(dollars in millions)
2011
201 2
2013
2014
2015
729
800
868
983
1,018
Average Diluted Shares Outstanding
(shares in millions)
2011
2012
2013
2014
2015
665
667
666
646
619
Return on Average Total Capital*
(percent)
2011
2012
2013
2014
2015
* See page 31 for discussion of
non-GAAP measures.
13.7%
12.7%
12.0%
11.6%
11.2%
Our fi rst priority for this cash is investment in growth
opportunities and cost-saving projects we’ve identifi ed
across our businesses. On average, our annual fi xed
asset investment represents 4 percent of net sales. In
fi scal 2015, fi xed asset investments totaled $712 million,
in line with our 4 percent of net sales average. In fi scal
2016, we expect to invest approximately $840 million
in capital expenditures, including initiatives related to
Project Century and projects to increase our production
capacity on growing businesses.
Aft er capital investment, we prioritize cash returns to
shareholders through dividends and share repurchases.
Cash dividends to shareholders totaled more than
$1 billion in fi scal 2015. Since fi scal 2011, our dividends
per share have grown at an 11 percent compound rate.
In March 2015, our board of directors approved a 7 per-
cent increase in the quarterly dividend rate eff ective
with the May 2015 payment. Th e current annualized
rate of $1.76 represents a yield of roughly 3 percent at
recent market prices for General Mills stock. General
Mills and its predecessor fi rm have paid regular divi-
dends without interruption or reduction for 116 years,
and our goal is to continue increasing dividends over
time, in line with our earnings growth.
We also return cash to shareholders through share
repurchases. Since 2011, our share repurchase activ-
ity has lowered average diluted shares outstanding by
roughly 2 percent a year, consistent with our long-term
share reduction target. Th at’s despite the fact that we
used cash to fund the strategic acquisitions of Yoplait
International, Yoki and Annie’s during that time. In fi s-
cal 2015, we repurchased 22 million shares for a total
of $1.2 billion.
Net income growth and disciplined uses of cash are
the drivers of increasing returns on average total cap-
ital (ROC). General Mills ROC has declined in recent
years, primarily due to the acquisitions of Yoplait
International, Yoki and Annie’s. Our plans for 2016 call
for improved ROC, powered by earnings growth and
continued prudent capital management.
2015 ANNUAL REPORT
11
Selected Financial Data
Th e following table sets forth selected fi nancial data for each of the fi scal years in the fi ve-year period ended
May 31, 2015:
In Millions, Except Per Share Data, Percentages and Ratios
2015 (a)
2014
2013
2012
2011
Fiscal Year
Operating data:
Net sales
Gross margin (b)
Selling, general, and administrative expenses
Total segment operating profi t (c)
Divestiture (gain)
$ 17,630.3
$ 17,909.6
$ 17,774.1 $ 16,657.9 $ 14,880.2
5,949.2
6,369.8
6,423.9
6,044.7
5,953.5
3,328.0
3,474.3
3,552.3
3,380.7
3,192.0
3,035.0
3,153.9
3,222.9
3,011.6
2,945.6
—
(65.5)
—
—
(17.4)
Net earnings attributable to General Mills
1,221.3
1,824.4
1,855.2
1,567.3
1,798.3
Advertising and media expense
Research and development expense
Average shares outstanding:
Diluted
Earnings per share:
Diluted
$
Diluted, excluding certain items aff ecting comparability (c) $
Operating ratios:
Gross margin as a percentage of net sales
Selling, general, and administrative expenses as a
percentage of net sales
Total segment operating profi t
as a percentage of net sales (c)
Eff ective income tax rate
Return on average total capital (b) (c)
Balance sheet data:
Land, buildings, and equipment
Total assets
Long-term debt, excluding current portion
Total debt (b)
Cash fl ow data:
Net cash provided by operating activities
Capital expenditures
Fixed charge coverage ratio (b)
Operating cash fl ow to debt ratio (b)
Share data:
Low stock price
High stock price
Closing stock price
Cash dividends per common share
823.1
229.4
869.5
243.6
895.0
237.9
913.7
245.4
843.7
235.0
618.8
645.7
665.6
666.7
664.8
1.97
2.86
$
$
2.83
2.82
$
$
2.79 $
2.72
$
2.35
2.56
$
$
2.70
2.48
33.7%
35.6%
36.1%
36.3%
40.0%
18.9%
19.4%
20.0%
20.3%
21.5%
17.2%
33.3%
11.2%
17.6%
33.3%
11.6%
18.1%
29.2%
12.0%
18.1%
32.1%
12.7%
19.8%
29.7%
13.7%
$ 3,783.3
$ 3,941.9
$ 3,878.1 $ 3,652.7 $ 3,345.9
21,964.5
23,145.7
22,658.0
21,096.8
18,674.5
7,607.7
6,423.5
5,926.1
6,161.9
5,542.5
9,223.9
8,785.8
7,969.1
7,429.6
6,885.1
$ 2,542.8
$ 2,541.0
$ 2,926.0 $ 2,407.2 $ 1,531.1
712.4
5.54
663.5
8.04
613.9
7.62
675.9
6.26
648.8
7.03
27.6%
28.9%
36.7%
32.4%
22.2%
$
48.86
$
46.86
$
37.55 $
34.95 $
33.57
57.14
56.15
1.67
54.40
53.81
1.55
50.93
48.98
1.32
41,000
41.05
39.08
1.22
34,500
39.95
39.29
1.12
35,000
Number of full- and part-time employees
42,000
43,000
(a) Fiscal 2015 was a 53-week year; all other fi scal years were 52 weeks.
(b) See “Glossary” on page 83 of this report for defi nition.
(c) See “Non-GAAP Measures” on page 31 of this report for our discussion of this measure not defi ned by generally accepted accounting principles.
1 2
GENERAL MILLS
Management’s Discussion and Analysis of
Financial Condition and Results of Operations
EXECUTIVE OVERVIEW
We are a global consumer foods company. We develop
distinctive value-added food products and market them
under unique brand names. We work continuously to
improve our core products and to create new products
that meet consumers’ evolving needs and preferences.
In addition, we build the equity of our brands over time
with strong consumer-directed marketing, innovative
new products, and eff ective merchandising. We believe
our brand-building strategy is the key to winning and
sustaining leading share positions in markets around
the globe.
Our fundamental fi nancial goal is to generate supe-
rior returns for our stockholders over the long term.
We believe that increases in net sales, segment oper-
ating profi t, earnings per share (EPS), and return on
average total capital are the key drivers of fi nancial per-
formance for our business.
Our long-term growth objectives are to consistently
deliver:
• low single-digit annual growth in net sales;
• mid single-digit annual growth in total segment
operating profi t;
• high single-digit annual growth in diluted EPS
excluding certain items aff ecting comparability; and
• improvement in return on average total capital.
We believe that this financial performance, cou-
pled with an attractive dividend yield, should result in
long-term value creation for stockholders. We return
a substantial amount of cash to stockholders through
dividends and share repurchases.
Our fi scal 2015 performance was mixed. Our two
smaller operating segments delivered growth. Operating
profi t for the Convenience Stores and Foodservice seg-
ment increased 15 percent to an all-time high of $353
million. Operating results for the International segment
were muted by a signifi cant negative impact from for-
eign currency exchange and slowing economic growth
in key emerging markets, but the segment achieved
good margin expansion and profi t growth in constant
currency. Results for our U.S. Retail segment were dis-
appointing, as both net sales and segment operating
profi t declined. Our brands achieved share gains in
categories representing 65 percent of our products’
sales in measured U.S. retail channels, but overall sales
trends in many categories were weak, refl ecting the
impact of changing consumer food preferences.
Our consolidated net sales for the fi scal year ended
May 31, 2015, declined 2 percent to $17.6 billion, as
unfavorable foreign exchange off set the benefi ts of a
53rd week and six months of incremental contribu-
tion from the Annie’s Inc. (Annie’s) natural and organic
foods business acquired in October 2014. On a con-
stant-currency basis, net sales increased 1 percent.
Total segment operating profi t of $3.0 billion declined
4 percent and 2 percent in constant currency. Diluted
EPS declined 30 percent to $1.97 per share. Adjusted
diluted EPS, which excludes certain items aff ecting
comparability of results, rose 1 percent to $2.86 per
share and increased 4 percent on a constant-currency
basis. Th ese results were in line with our expectations
which were revised in the second quarter of fi scal 2015.
Our return on average total capital declined 40 basis
points to 11.2 percent. (See the “Non-GAAP Measures”
section below for discussion of total segment operat-
ing profit, adjusted diluted EPS, constant-currency
nets sales growth rates, constant-currency total seg-
ment operating profi t growth rate, constant-currency
adjusted diluted EPS growth rate, and return on aver-
age total capital, which are not defi ned by generally
accepted accounting principles (GAAP)).
Net cash provided by operations totaled $2.5 billion
in fi scal 2015. Th is cash generation supported capital
investments totaling $712 million in fi scal 2015. We
also returned signifi cant cash to stockholders through
an 8 percent dividend increase, and share repurchases
totaling $1.2 billion.
We recorded the following achievements related to
our other key operating objectives for fi scal 2015:
• Product improvements on established brands and
new-product introductions designed to respond to
evolving consumer food preferences generated good
growth for a variety of our product lines. Examples
included renewed sales growth for our U.S. Yogurt
operating unit; strong sales contributions from pro-
tein-enriched cereal varieties; robust consumer demand
across international markets for new Old El Paso
Mexican food items; and double-digit growth for our
U.S. portfolio of natural and organic food products.
• Th e acquisition of Annie’s in October 2014 signifi -
cantly expanded our scale and participation in the
attractive U.S. natural and organic food category.
Combined net sales in the U.S. for our portfolio of
natural and organic brands exceeded $570 million in
fi scal 2015.
2015 ANNUAL REPORT
13
• We increased our share of U.S. cereal category mea-
sured dollar sales.
• We increased our share of U.S. yogurt category mea-
sured dollar sales, including strong gains in the Greek
yogurt segment, and renewed sales growth in the reg-
ular and child yogurt segments. Our international
yogurt operations expanded to China with fi rst pro-
duction and order shipments to the Shanghai market
commencing near the end of the fi scal year.
• We generated strong levels of supply chain produc-
tivity savings in 2015 through our ongoing Holistic
Margin Management (HMM) efforts. Beyond this
program, we began several new cost savings ini-
tiatives during the fi scal year. Project Century is our
eff ort to simplify our North American supply chain.
Project Catalyst is focused on increasing the agility and
eff ectiveness of our U.S. Retail and corporate organi-
zations, and we are making changes to various corpo-
rate policies and practices to reduce overhead expense.
Together, these three initiatives generated more than
$75 million in cost savings during fi scal 2015, and they
are expected to produce a cumulative $260 to $280 mil-
lion in savings in fi scal 2016.
• We delivered strong cash returns to stockholders
through dividends of $1.67 per share and share repur-
chases totaling $1.2 billion. Share repurchase activity
in fi scal 2015 and 2014 reduced the average number of
diluted shares outstanding in fi scal 2015 by 4 percent
from fi scal 2014.
A detailed review of our fi scal 2015 performance
appears below in the section titled “Fiscal 2015
Consolidated Results of Operations.”
Our sales and earnings growth targets for fi scal 2016
refl ect the impact of one less week compared to fi scal
2015. Th e Annie’s business will contribute 6 months
of incremental results. We expect foreign currency
exchange will continue to have a negative impact on
reported results for our international operations, and
we expect the operating environment in our large
developing markets (China and Brazil) to remain uncer-
tain. We estimate our input cost infl ation for fi scal 2016
at 2 percent. With these assumptions in mind:
• We expect fi scal 2016 net sales to essentially match
2015 levels in constant currency, refl ecting the impact
of one less week of business.
• We expect fi scal 2016 total segment operating profi t
to increase at a low-single-digit rate in constant cur-
rency, as HMM and our more recent cost-saving initia-
tives increase our effi ciency and improve margins.
• We expect fi scal 2016 adjusted diluted EPS to increase
at a mid-single-digit rate in constant currency.
• Our fi scal 2016 plans call for continued strong cash
returns to stockholders. Th e current annualized divi-
dend rate of $1.76 per share is up 5 percent from the
annual dividend paid in 2015. Share repurchases in
fi scal 2016 are expected to result in a net reduction
in average diluted shares outstanding of approximately
1 percent.
Certain terms used throughout this report are
defi ned in a glossary on page 83 of this report.
FISCAL 2015 CONSOLIDATED RESULTS OF
OPERATIONS
Fiscal 2015 had 53 weeks compared to 52 weeks in
fi scal 2014.
Fiscal 2015 net sales declined 2 percent to $17,630
million and increased 1 percent on a constant-cur-
rency basis. In fi scal 2015, net earnings attributable
to General Mills were $1,221 million, down 33 percent
from $1,824 million in fi scal 2014, and we reported
diluted EPS of $1.97 in fi scal 2015, down 30 percent
from $2.83 in fi scal 2014. Fiscal 2015 results include
restructuring-related charges, an indefinite-lived
intangible asset impairment charge, tax impact of the
repatriation of foreign earnings, losses from the mark-
to-market valuation of certain commodity positions
and grain inventories, integration costs resulting from
the acquisition of Annie’s, and the impact of Venezuela
currency devaluation. Fiscal 2014 results include the
impact of Venezuela currency devaluation, a gain on the
divestiture of certain grain elevators, losses from the
mark-to-market valuation of certain commodity posi-
tions and grain inventories, and restructuring charges
related to our fi scal 2012 productivity and cost savings
plan. Diluted EPS excluding these items aff ecting com-
parability totaled $2.86 in fi scal 2015, up 1 percent from
$2.82 in fi scal 2014. Diluted EPS excluding certain items
aff ecting comparability on a constant-currency basis
increased 4 percent compared to fi scal 2014 (see the
“Non-GAAP Measures” section below for a description
of our use of these measures not defi ned by GAAP).
1 4
GENERAL MILLS
Net sales declined 2 percent to $17,630 million in fi s-
cal 2015 from $17,910 in fi scal 2014. Th e components of
net sales growth are shown in the following table:
Contributions from volume growth (a)
Net price realization and mix
Foreign currency exchange
Net sales growth
Fiscal 2015
vs. 2014
(1) pt
2 pts
(3) pts
(2) pts
(a) Measured in tons based on the stated weight of our product shipments.
Th e 53rd week in fi scal 2015 contributed approxi-
mately 1 percentage point of net sales growth, refl ect-
ing 1 percentage point of growth from volume.
Cost of sales increased $141 million in fi scal 2015 to
$11,681 million. In fi scal 2015, we recorded a $90 million
net increase in cost of sales related to mark-to-mar-
ket valuation of certain commodity positions and grain
inventories as described in Note 7 to the Consolidated
Financial Statements on page 52 of this report, com-
pared to a net decrease of $49 million in fi scal 2014. In
fi scal 2015, we recorded $60 million of restructuring
charges in cost of sales. Product mix drove a $17 million
increase in cost of sales. We also recorded a $3 million
foreign exchange loss in fi scal 2015 related to Venezuela
currency devaluation compared to a $23 million loss in
fi scal 2014. Lower volume drove a $68 million decrease
in cost of sales.
We also expect to incur approximately $65 million
of restructuring initiative project-related cash costs and
recorded $13 million of these costs in cost of sales in
fi scal 2015 (please refer to Note 4 to the Consolidated
Financial Statements on page 48 of this report).
Gross margin declined 7 percent in fi scal 2015 versus
fi scal 2014. Gross margin as a percent of net sales of
34 percent decreased 190 basis points compared to
fi scal 2014.
Selling, general and administrative (SG&A) expenses
decreased $146 million in fi scal 2015 versus fi scal 2014
primarily due to a 5 percent decrease in advertising
and media expense, and savings from Project Catalyst
(please refer to Note 4 to the Consolidated Financial
Statements on page 48 of this report) and our other
cost management initiatives. In fi scal 2015, we recorded
a $5 million charge related to Venezuela currency deval-
uation compared to a $39 million charge in fi scal 2014.
In addition, we recorded $16 million of integration
costs in fi scal 2015 related to our acquisition of Annie’s.
SG&A expenses as a percent of net sales decreased 50
basis points compared to fi scal 2014.
Restructuring, impairment, and other exit costs
totaled $544 million in fi scal 2015 compared to $4 mil-
lion in fi scal 2014.
During the fourth quarter of fi scal 2015, we made a
strategic decision to redirect certain resources support-
ing our Green Giant business in our U.S. Retail segment
to other businesses within the segment. As a result,
we recorded a $260 million impairment charge in the
fourth quarter of fi scal 2015 related to the Green Giant
brand intangible asset.
Restructuring charges recorded in restructuring,
impairment, and other exit costs were $284 million in
fi scal 2015 compared to $4 million in fi scal 2014. Total
charges associated with our restructuring initiatives
recognized in fiscal 2015 and 2014 consisted of the
following:
In Millions
Total Century (a)
Catalyst
International
Other
Total restructuring charges (a)
Project-related costs recorded in costs of sales
As Reported
Estimated
Fiscal 2015
Fiscal 2014
Future
Total
Charge
Cash
Charge
Cash
Charge
Cash
Charge
Cash
Savings(b)
$ 181.8 $ 12.0
$ —
$ —
$ 111 $ 109 $ 293 $ 121
148.4
45.0
13.9
(0.6)
6.5
0.1
343.5
63.6
13.2
9.7
—
1.0
2.6
3.6
—
—
6.0
16.4
—
1
—
73
148
118
8
—
15
—
14
—
22.4
112
190
456
253
—
52
55
65
65
Restructuring charges and project-related costs $ 356.7 $ 73.3
$ 3.6 $ 22.4
$ 164 $ 245 $ 521 $ 318
Future cumulative annual savings
$ 350
(a) Includes $59.6 million of restructuring charges recorded in cost of sales during fi scal 2015.
(b) Cumulative annual savings estimated by fi scal 2017. Includes savings from SG&A cost reduction projects.
Please refer to Note 4 to the Consolidated Financial Statements on page 48 of this report for more information
regarding our restructuring activities.
2015 ANNUAL REPORT
15
Th ere were no divestitures in fi scal 2015. During fi s-
cal 2014, we recorded a divestiture gain of $66 million
related to the sale of certain grain elevators in our U.S.
Retail segment.
Interest, net for fi scal 2015 totaled $315 million, $13
million higher than fi scal 2014. Average interest bear-
ing instruments increased $1,370 million, generating a
$55 million increase in net interest. Th e average inter-
est rate decreased 47 basis points, including the eff ect
of the mix of debt, generating a $42 million decrease in
net interest.
Our consolidated eff ective tax rate for fi scal 2015 of
33.3 percent was consistent with fi scal 2014. Th e 4.5
percentage point impact resulting from the repatriation
of $606 million of foreign earnings in fi scal 2015 was
off set by changes in earnings mix by country, certain
favorable discrete items, and favorable state tax rate
changes.
Aft er-tax earnings from joint ventures for fi scal
2015 decreased to $84 million compared to $90 million
in fi scal 2014 primarily driven by unfavorable foreign
currency exchange and an asset impairment charge
of $3 million at Cereal Partners Worldwide (CPW) in
South Africa. Th e change in net sales for each joint
venture is set forth in the following table:
As Reported
Fiscal 2015
vs. 2014
Constant Currency Basis
Fiscal 2015
vs. 2014
CPW
(10)%
Häagen-Dazs Japan, Inc. (HDJ)
(4)
Joint Ventures
(9)%
(2)%
6
(1)%
The components of our joint ventures’ net sales
growth are shown in the following table:
Fiscal 2015 vs. Fiscal 2014
Contributions from volume growth
Net price realization and mix
Foreign currency exchange
Net sales growth
CPW
(1) pt
(1) pt
(8) pts
(10) pts
HDJ
(5) pts
11 pts
(10) pts
(4) pts
Average diluted shares outstanding decreased by
27 million in fi scal 2015 from fi scal 2014 due to share
repurchases.
FISCAL 2015 CONSOLIDATED BALANCE SHEET
ANALYSIS
Cash and cash equivalents decreased $533 million
from fi scal 2014, as discussed in the “Liquidity” section
below.
Receivables decreased $97 million from fi scal 2014,
primarily driven by timing of sales.
Inventories decreased $19 million from fi scal 2014.
Prepaid expenses and other current assets increased
$15 million from fi scal 2014.
Land, buildings, and equipment decreased $159 mil-
lion from fi scal 2014, primarily driven by $108 million
related to restructuring activities.
Goodwill and other intangible assets decreased $113
million from fi scal 2014, driven by foreign exchange
and a $260 million impairment charge related to an
indefi nite-lived intangible asset, partially off set by the
$858 million of intangible assets recorded in the acqui-
sition of Annie’s.
Other assets decreased $302 million from fiscal
2014, largely driven by a decrease in the funded status
of our defi ned benefi t pension plans primarily due to
the adoption of new mortality tables for the annual
remeasurement of the obligations associated with
these plans.
Accounts payable increased $73 million from fi scal
2014, primarily driven by the extension of payment
terms and the timing of payments.
Notes payable and long-term debt, including current
portion, increased $438 million from fi scal 2014, pri-
marily driven by $1,107 million of net long-term debt
issuances, partially off set by net commercial paper
payments.
Th e current and noncurrent portions of net deferred
income taxes liability decreased $142 million from fi s-
cal 2014, primarily as a result of changes in the funded
status of our defi ned benefi t pension and postretire-
ment plans.
Other current liabilities increased $140 million from
fi scal 2014, primarily driven by the establishment of
restructuring reserves related to the actions taken in
fi scal 2015.
Other liabilities increased $102 million from fi scal
2014, largely driven by an increase in our defi ned bene-
fi t pension and postretirement plans liabilities primarily
due to the adoption of new mortality tables for the
annual remeasurement of the obligations associated
with these plans.
1 6
GENERAL MILLS
Redeemable interest decreased $205 million from fi s-
cal 2014, primarily driven by foreign exchange.
Retained earnings increased $204 million from fi scal
2014, refl ecting fi scal 2015 net earnings of $1,221 mil-
lion less dividends declared of $1,018 million. Treasury
stock increased $836 million from fi scal 2014, driven
by $1,162 million of share repurchases, partially off -
set by $326 million related to stock-based compensa-
tion plans. Additional paid in capital increased $65
million from fi scal 2014, primarily driven by redeemable
interest revaluation, partially off set by stock compen-
sation activity. AOCI increased by $970 million from
fi scal 2014.
Noncontrolling interests decreased $75 million from
fi scal 2014, primarily driven by foreign exchange.
FISCAL 2014 CONSOLIDATED RESULTS OF
OPERATIONS
Our consolidated results for fi scal 2014 include one addi-
tional quarter of operating activity from the acquisition
of Yoki Alimentos S.A. (Yoki) in Brazil, one additional
quarter of operating activity from the assumption of
the Canadian Yoplait franchise license, and three addi-
tional quarters of operating activity from the acqui-
sition of Immaculate Baking Company in the United
States. Collectively, these items are referred to as “new
businesses” in comparing our fi scal 2014 results to
fi scal 2013.
Fiscal 2014 net sales grew 1 percent to $17,910 million
including 1 percentage point of growth contributed by
new businesses and 1 percentage point of unfavorable
foreign currency exchange. In fi scal 2014, net earn-
ings attributable to General Mills were $1,824 million,
down 2 percent from $1,855 million in fi scal 2013, and
we reported diluted EPS of $2.83 in fi scal 2014, up 1
percent from $2.79 in fi scal 2013. Fiscal 2014 results
include a gain on the divestiture of certain grain ele-
vators, the impact of Venezuela currency devaluation,
gains from the mark-to-market valuation of certain
commodity positions and grain inventories, and restruc-
turing charges related to our fi scal 2012 productivity
and cost savings plan. Fiscal 2013 results include the
eff ects from various discrete tax items, the impact of
Venezuela currency devaluation, restructuring charges
related to our fi scal 2012 productivity and cost savings
plan, integration costs resulting from the acquisition
of Yoki, and gains from the mark-to-market valuation
of certain commodity positions and grain inventories.
Diluted EPS excluding these items aff ecting comparabil-
ity totaled $2.82 in fi scal 2014, up 4 percent from $2.72
in fi scal 2013 (see the “Non-GAAP Measures” section
below for a description of our use of this measure not
defi ned by GAAP).
Net sales grew 1 percent in fi scal 2014 to $17,910
from $17,774 in fi scal 2013. Th e components of net
sales growth are shown in the following table:
Contributions from volume growth (a)
Net price realization and mix
Foreign currency exchange
Net sales growth
Fiscal 2014
vs. 2013
1 pt
1 pt
(1) pt
1 pt
(a) Measured in tons based on the stated weight of our product shipments.
Net sales growth included 1 percentage point of
growth from new businesses. Contributions from vol-
ume growth included 2 percentage points from new
businesses.
Cost of sales increased $190 million in fi scal 2014
to $11,540 million. Higher volume drove an $115 mil-
lion increase in cost of sales. Product mix also drove
an $130 million increase in cost of sales. In fi scal 2014,
we recorded a $49 million net decrease in cost of sales
related to mark-to-market valuation of certain commod-
ity positions and grain inventories as described in Note
7 to the Consolidated Financial Statements on page 52
of this report, compared to a net decrease of $4 million
in fi scal 2013. We also recorded a $23 million foreign
exchange loss in fi scal 2014 related to the Venezuela
currency devaluation compared to a $16 million loss in
fi scal 2013. In fi scal 2013, we also recorded a $17 million
non-recurring expense related to the assumption of the
Canadian Yoplait franchise license.
Gross margin declined 1 percent in fi scal 2014 versus
fi scal 2013. Gross margin as a percent of net sales of 36
percent was unchanged compared to fi scal 2013.
SG&A expenses decreased $78 million in fi scal 2014
versus fi scal 2013. Th e decrease in SG&A expenses was
primarily driven by a 3 percent decrease in advertis-
ing and media expense, a smaller contribution to the
General Mills Foundation, a decrease in incentive com-
pensation expense, and lower pension expense com-
pared to fi scal 2013. In fi scal 2014, we recorded a $39
million charge related to Venezuela currency devalua-
tion compared to a $9 million charge in fi scal 2013. In
addition, we recorded $12 million of integration costs
2015 ANNUAL REPORT
17
The components of our joint ventures’ net sales
growth are shown in the following table:
Fiscal 2014 vs. Fiscal 2013
Contributions from volume growth
Net price realization and mix
Foreign currency exchange
Net sales growth
CPW
Flat
Flat
(1) pt
(1) pt
HDJ
11 pts
(2) pts
(17) pts
(8) pts
Average diluted shares outstanding decreased by 20
million in fi scal 2014 from fi scal 2013 due primarily to
the repurchase of 36 million shares, partially off set by
the issuance of 7 million shares related to stock com-
pensation plans.
in fi scal 2013 related to our acquisition of Yoki. SG&A
expenses as a percent of net sales decreased 1 percent
compared to fi scal 2013.
During fi scal 2014, we recorded a divestiture gain of
$66 million related to the sale of certain grain elevators
in our U.S. Retail segment. Th ere were no divestitures
in fi scal 2013.
Interest, net for fi scal 2014 totaled $302 million, $15
million lower than fi scal 2013. Th e average interest rate
decreased 41 basis points, including the eff ect of the mix
of debt, generating a $31 million decrease in net inter-
est. Average interest bearing instruments increased
$367 million, generating a $16 million increase in
net interest.
Our consolidated eff ective tax rate for fi scal 2014 was
33.3 percent compared to 29.2 percent in fi scal 2013.
Th e 4.1 percentage point increase was primarily related
to the restructuring of our General Mills Cereals, LLC
(GMC) subsidiary during the fi rst quarter of fi scal 2013,
which resulted in a $63 million decrease to deferred
income tax liabilities related to the tax basis of the
investment in GMC and certain distributed assets, with
a corresponding non-cash reduction to income taxes.
During fi scal 2013, we also recorded a $34 million dis-
crete decrease in income tax expense and an increase
in our deferred tax assets related to certain actions
taken to restore part of the tax benefi ts associated
with Medicare Part D subsidies which had previously
been reduced in fi scal 2010 with the enactment of the
Patient Protection and Aff ordable Care Act, as amended
by the Health Care and Education Reconciliation Act of
2010. Our fi scal 2013 tax expense also includes a $12
million charge associated with the liquidation of a cor-
porate investment.
Aft er-tax earnings from joint ventures for fi scal
2014 decreased to $90 million compared to $99 million
in fi scal 2013 primarily driven by increased consumer
spending at CPW and unfavorable foreign currency
exchange from HDJ. Th e change in net sales for each
joint venture is set forth in the following table:
As Reported
Fiscal 2014
vs. 2013
Constant Currency Basis
Fiscal 2014
vs. 2013
CPW
HDJ
Joint Ventures
(1)%
(8)
(2)%
Flat
9%
2%
1 8
GENERAL MILLS
RESULTS OF SEGMENT OPERATIONS
Our businesses are organized into three operating
segments: U.S. Retail; International; and Convenience
Stores and Foodservice.
Beginning in the first quarter of fiscal 2015, we
changed how we assess segment operating performance
to exclude the asset and liability remeasurement impact
from hyperinflationary economies. This impact is
now included in unallocated corporate items. All peri-
ods presented have been changed to conform to this
presentation.
Th e following tables provide the dollar amount and percentage of net sales and operating profi t from each
segment for fi scal years 2015, 2014, and 2013:
In Millions
Net Sales
U.S. Retail
International
Convenience Stores and Foodservice
Total
Segment Operating Profi t
U.S. Retail
International
Convenience Stores and Foodservice
Total
2015
Fiscal Year
2014
2013
Dollars
Percent
of Total
Dollars
Percent
of Total
Dollars
Percent
of Total
$10,507.0
60%
$10,604.9
59%
$10,614.9
5,128.2
1,995.1
29
11
5,385.9
1,918.8
30
11
5,200.2
1,959.0
60%
29
11
$17,630.3
100%
$17,909.6
100%
$17,774.1
100%
$2,159.3
71%
$2,311.5
522.6
353.1
17
12
535.1
307.3
73%
17
10
$2,392.9
515.4
314.6
74%
16
10
$3,035.0
100%
$3,153.9
100%
$3,222.9
100%
Segment operating profi t excludes unallocated cor-
porate items, gain on divestitures, and restructuring,
impairment, and other exit costs because these items
aff ecting operating profi t are centrally managed at
the corporate level and are excluded from the mea-
sure of segment profi tability reviewed by our executive
management.
U.S. Retail Segment Beginning with the second quar-
ter of fi scal 2015, we realigned certain operating units
within our U.S. Retail operating segment. We also
changed the name of our Yoplait operating unit to
Yogurt and our Big G operating unit to Cereal. Frozen
Foods transitioned into Meals and Baking Products.
Small Planet Foods transitioned into Snacks, Cereal,
and Meals. Th e Yogurt operating unit was unchanged.
We revised the amounts previously reported in the net
sales and net sales percentage change by operating
unit within our U.S. Retail segment to conform to the
new operating unit structure. Th ese realignments had
no eff ect on previously reported consolidated net sales,
operating segments’ net sales, operating profi t, segment
operating profi t, net earnings attributable to General
Mills, or EPS. In addition, results from the acquired
Annie’s business are included in the Meals and Snacks
operating units.
Our U.S. Retail segment refl ects business with a wide
variety of grocery stores, mass merchandisers, mem-
bership stores, natural food chains, and drug, dollar
and discount chains operating throughout the United
States. Our product categories in this business segment
are ready-to-eat cereals, refrigerated yogurt, soup, meal
kits, shelf stable and frozen vegetables, refrigerated
and frozen dough products, dessert and baking mixes,
frozen pizza and pizza snacks, grain, fruit and savory
snacks, and a wide variety of organic products includ-
ing meal kits, granola bars, and cereal.
In fi scal 2015, net sales for our U.S. Retail segment
were $10,507 million, down 1 percent compared to fi scal
2014. In fi scal 2014, net sales for this segment totaled
$10,605 million, fl at compared to fi scal 2013.
2015 ANNUAL REPORT
19
Th e components of U.S. Retail net sales growth are
shown in the following table:
Contributions from volume growth (a)
Net price realization and mix
Net sales growth
Fiscal 2015
vs. 2014
Fiscal 2014
vs. 2013
(1) pt
Flat
(1) pt
Flat
Flat
Flat
(a) Measured in tons based on the stated weight of our product shipments.
Th e acquisition of Annie’s added 1 percentage point
of net sales growth, refl ecting 1 percentage point of
growth from volume in fi scal 2015. Th e 53rd week
in fi scal 2015 contributed approximately 1 percentage
point of net sales growth, refl ecting 1 percentage point
of growth from volume.
Net sales for our U.S. retail operating units are shown
in the following table:
Fiscal Year
In Millions
2015
2014
2013
Meals
Cereal
Snacks
$ 2,674.3
$ 2,772.4
$ 2,836.0
2,330.1
2,410.2
2,407.8
2,134.4
1,997.8
1,867.6
Baking Products
1,969.8
2,096.1
2,133.9
Yogurt and other
1,398.4
1,328.4
1,369.6
Total
$ 10,507.0
$ 10,604.9 $ 10,614.9
U.S. Retail net sales percentage change by operating
unit are shown in the following table:
Fiscal 2015
vs. 2014
Fiscal 2014
vs. 2013
International Segment Our International segment
consists of retail and foodservice businesses outside
of the United States. Our product categories include
ready-to-eat cereals, shelf stable and frozen vegetables,
meal kits, refrigerated and frozen dough products, des-
sert and baking mixes, frozen pizza snacks, refriger-
ated yogurt, grain and fruit snacks, and super-premium
ice cream and frozen desserts. We also sell super-pre-
mium ice cream and frozen desserts directly to con-
sumers 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 is
located.
Net sales for our International segment were down
5 percent in fi scal 2015 compared to fi scal 2014, to
$5,128 million. Net sales totaled $5,386 million in fi scal
2014, up 4 percent from $5,200 million in fi scal 2013.
Th e components of International net sales growth are
shown in the following table:
Contributions from volume growth (a)
Net price realization and mix
Foreign currency exchange
Net sales growth
Fiscal 2015
vs. 2014
Fiscal 2014
vs. 2013
Flat
6 pts
(11) pts
(5) pts
5 pts
3 pts
(4) pts
4 pts
(a) Measured in tons based on the stated weight of our product shipments.
Meals
Cereal
Baking Products
Snacks
Yogurt
Total
(4)%
(3)
(6)
7
5
(2)%
Flat
(2)
7
(3)
Th e 53rd week in fi scal 2015 contributed approxi-
mately 1 percentage point of net sales growth, refl ect-
ing 1 percentage point of growth from volume.
Net sales for our International segment by geographic
region are shown in the following table:
(1)%
Flat
Segment operating profi t of $2,159 million in fi scal
2015 declined $152 million, or 7 percent, from fi scal 2014.
Th e decrease was primarily driven by lower volume and
an increase in supply chain costs, partially off set by a 6
percent reduction in advertising and media expense.
Segment operating profi t of $2,312 million in fi scal
2014 declined $81 million, or 3 percent, from fi scal 2013.
Th e decrease refl ected higher trade spending, partially
off set by a 1 percent reduction in advertising and media
expense.
In Millions
Europe (a)
Canada
Asia/Pacifi c
Latin America
Total
Fiscal Year
2015
2014
2013
$2,126.5
$2,188.8
$2,214.6
1,105.1
1,195.3
1,210.5
1,023.5
981.8
873.1
1,020.0
899.1
876.0
$5,128.2
$5,385.9
$5,200.2
(a) Fiscal 2013 net sales for the Europe region include an additional month
of results.
20
GENERAL MILLS
International change in net sales by geographic
region are shown in the following table:
Percentage Change in
Net Sales as Reported
Percentage Change in
Net Sales on Constant
Currency Basis (a)
Fiscal 2015 Fiscal 2014
vs. 2013
vs. 2014
Fiscal 2015 Fiscal 2014
vs. 2013
vs. 2014
Europe
Canada
Asia/Pacifi c
Latin America
Total
(3)%
(1)%
5%
(4)%
(8)
4
(14)
(1)
9
16
(5)%
4%
Flat
5
17
6%
5
9
38
8%
(a) See the “Non-GAAP Measures” section below for our use of this measure.
Segment operating profi t for fi scal 2015 declined
2 percent to $523 million from $535 million in fi scal
2014, primarily driven by unfavorable foreign currency
exchange and higher input costs, partially off set by
favorable net price realization and mix. International
segment operating profi t increased 9 percent on a con-
stant-currency basis in fi scal 2015 compared to fi scal
2014 (see the “Non-GAAP Measures” section below for
our use of this measure).
Segment operating profi t for fi scal 2014 grew 4 per-
cent to $535 million from $515 million in fi scal 2013,
primarily driven by volume growth, favorable net price
realization and mix, and an additional quarter of results
from the Yoki acquisition, partially off set by unfavor-
able foreign currency and higher input costs. In addi-
tion, we recorded a $17 million non-recurring expense
related to the assumption of the Canadian Yoplait
franchise license in fi scal 2013. International segment
operating profi t increased 10 percent on a constant-cur-
rency basis in fi scal 2014 compared to fi scal 2013 (see
the “Non-GAAP Measures” section below for our use of
this measure).
Convenience Stores and Foodservice Segment In our
Convenience Stores and Foodservice segment our major
product categories are ready-to-eat cereals, snacks,
refrigerated yogurt, frozen breakfasts, unbaked and
fully baked frozen dough products, baking mixes, and
fl our. Many products we sell are branded to the con-
sumer and nearly all are branded to our customers. We
sell to distributors and operators in many customer
channels including foodservice, convenience stores,
vending, and supermarket bakeries. Substantially all
of this segment’s operations are located in the United
States.
For fi scal 2015, net sales for our Convenience Stores
and Foodservice segment increased 4 percent to $1,995
million. For fi scal 2014, net sales decreased 2 percent to
$1,919 million compared to $1,959 million in fi scal 2013.
Th e components of Convenience Stores and Foodservice
net sales growth are shown in the following table:
Fiscal 2015
vs. 2014
Fiscal 2014
vs. 2013
Contributions from volume growth (a)
Net price realization and mix
Foreign currency exchange
Net sales growth
1 pt
3 pts
NM
4 pts
(1) pt
(1) pt
NM
(2) pts
(a) Measured in tons based on the stated weight of our product shipments.
Th e 53rd week in fi scal 2015 contributed approxi-
mately 2 percentage points of net sales growth, refl ect-
ing 2 percentage points of growth from volume.
In fi scal 2015, segment operating profi t was $353
million, up 15 percent from $307 million in fi scal 2014.
Th e increase was primarily driven by favorable net
price realization and mix and higher volume.
In fi scal 2014, segment operating profi t was $307 mil-
lion, down 2 percent from $315 million in fi scal 2013.
Th e decrease was primarily driven by volume declines,
unfavorable net price realization, and investments to
protect and grow the business.
Unallocated Corporate Items Beginning in the fi rst
quarter of fi scal 2015, we changed how we assess seg-
ment operating performance to exclude the asset and
liability remeasurement impact from hyperinfl ation-
ary economies. Th is impact is now included in unallo-
cated corporate items. All periods presented have been
changed to conform to this presentation.
Unallocated corporate items include corporate over-
head expenses, variances to planned domestic employee
benefi ts and incentives, contributions to the General
Mills Foundation, asset and liability remeasurement
impact of hyperinfl ationary economies, restructuring
initiative project-related costs, and other items that
are not part of our measurement of segment operat-
ing performance. Th is includes gains and losses from
mark-to-market valuation of certain commodity posi-
tions until passed back to our operating segments in
accordance with our policy as discussed in Note 7 to
the Consolidated Financial Statements on page 52 of
this report.
2015 ANNUAL REPORT
21
For fi scal 2015, unallocated corporate expense totaled
$414 million compared to $258 million last year. In
fi scal 2015, we recorded a $90 million net increase in
expense related to mark-to-market valuation of certain
commodity positions and grain inventories, compared
to a $49 million net decrease in expense in fi scal 2014.
In addition, we recorded $60 million of restructur-
ing charges, and $13 million of restructuring initiative
project-related costs in cost of sales in fi scal 2015. We
recorded an $8 million foreign exchange loss related
to the remeasurement of assets and liabilities of our
Venezuelan subsidiary compared to $62 million in fi scal
2014. We also recorded $16 million of integration costs
resulting from the acquisition of Annie’s in fi scal 2015.
For fi scal 2014, unallocated corporate expense totaled
$258 million compared to $351 million in fi scal 2013. In
fi scal 2014, we recorded a $49 million net decrease in
expense related to mark-to-market valuation of certain
commodity positions and grain inventories, compared
to a $4 million net decrease in expense in the prior
year. Compensation and benefi t expenses decreased
$59 million and the contribution to the General Mills
Foundation decreased in fi scal 2014 compared to fi scal
2013. We also recorded a $62 million foreign exchange
loss related to the remeasurement of assets and liabil-
ities of our Venezuelan subsidiary in fi scal 2014 com-
pared to $25 million in fi scal 2013. In fi scal 2013, we
also recorded $12 million of integration costs related to
the acquisition of Yoki.
Venezuela is a highly infl ationary economy, and we
remeasure the value of the assets and liabilities of our
Venezuelan subsidiary based on the exchange rate at
which we expect to remit dividends in U.S. dollars. In
February 2014, the Venezuelan government established
a new foreign exchange market mechanism (SICAD 2)
and at that time indicated that it would be the mar-
ket through which U.S. dollars would be obtained for
the remittance of dividends. On February 12, 2015, the
Venezuelan government replaced SICAD 2 with a new
foreign exchange market mechanism (SIMADI). We
expect to be able to access U.S. dollars through the
SIMADI market. SIMADI has signifi cantly higher for-
eign exchange rates than those available through the
other foreign exchange mechanisms. In fi scal 2015,
we recorded an $8 million foreign exchange loss in
unallocated corporate items resulting from the remea-
surement of assets and liabilities of our Venezuelan
subsidiary at the SIMADI rate of 199 bolivars per U.S.
dollar. Our Venezuela operations represent less than
1 percent of our consolidated assets, liabilities, net sales,
and segment operating profi t. As of May 31, 2015, we
had $0.3 million of non-U.S. dollar cash balances in
Venezuela.
IMPACT OF INFLATION
Our gross margin performance in fi scal 2015 refl ects
the impact of 2 percent input cost infl ation, primarily
on commodities inputs. We expect input cost infl ation
of 2 percent in fi scal 2016. We attempt to minimize
the eff ects of infl ation through HMM, planning, and
operating practices. Our risk management practices are
discussed on page 36 of this report.
LIQUIDITY
Th e primary source of our liquidity is cash fl ow from
operations. Over the most recent three-year period, our
operations have generated $8.0 billion in cash. A sub-
stantial portion of this operating cash fl ow has been
returned to stockholders through share repurchases
and dividends. We also use cash from operations to
fund our capital expenditures and acquisitions. We typ-
ically use a combination of cash, notes payable, and
long-term debt to fi nance signifi cant acquisitions and
major capital expansions.
As of May 31, 2015, we had $311 million of cash and
cash equivalents held in foreign jurisdictions which will
be used to fund foreign operations and acquisitions.
During the fourth quarter of fi scal 2015, we approved a
one-time repatriation of $606 million of foreign earn-
ings. Th is action reduced the economic cost of funding
current restructuring initiatives and the acquisition of
Annie’s completed in fi scal 2015. We recorded a discrete
income tax charge of $79 million in fi scal 2015 related
to this action, and we expect to make approximately
$24 million in related cash income tax payments
related to this action. We have previously asserted that
our foreign earnings are permanently reinvested and
will only be repatriated in a tax-neutral manner, and
this one-time repatriation does not change this ongo-
ing assertion.
22
GENERAL MILLS
Cash Flows from Operations
In Millions
2015
2014
2013
Fiscal Year
Net earnings, including
earnings attributable to
redeemable and
noncontrolling interests
$1,259.4 $1,861.3 $1,892.5
Depreciation and amortization
588.3
585.4
588.0
Aft er-tax earnings
from joint ventures
(84.3)
(89.6)
(98.8)
Distributions of earnings
from joint ventures
72.6
90.5
115.7
Stock-based compensation
106.4
108.5
100.4
Deferred income taxes
25.3
172.5
81.8
Tax benefi t on exercised options
(74.6)
(69.3)
(103.0)
Pension and other postretirement
benefi t plan contributions
(49.5)
(49.7)
(223.2)
Pension and other postretirement
benefi t plan costs
Divestiture (gain)
Restructuring, impairment,
91.3
124.1
131.2
—
(65.5)
—
and other exit costs
531.1
(18.8)
(60.2)
Changes in current assets
and liabilities, excluding the
eff ects of acquisitions
214.7
(32.2)
471.1
Other, net
Net cash provided by
operating activities
(137.9)
(76.2)
30.5
$2,542.8 $2,541.0 $2,926.0
In fi scal 2015, our operations generated $2.5 billion
of cash, fl at compared to fi scal 2014. Th e $247 million
change in current assets and liabilities was primarily
driven by the timing of trade and promotion accruals,
changes in tax accruals, and changes in derivative posi-
tions. Th is was largely off set by lower net earnings,
which included a $260 million non-cash impairment
charge and $271 million of non-cash restructuring
charges, and a $147 million change in net deferred
income taxes.
We strive to grow core working capital at or below
the rate of growth in our net sales. For fi scal 2015, core
working capital decreased 13 percent, primarily due to
a decrease in accounts receivable and an increase in
accounts payable, compared to a net sales decline of 2
percent. In fi scal 2014, core working capital decreased 9
percent, compared to net sales growth of 1 percent, and
in fi scal 2013, core working capital decreased 5 percent,
compared to net sales growth of 7 percent.
In fi scal 2014, our operations generated $2.5 billion of
cash compared to $2.9 billion in fi scal 2013. Th e $385
million decrease was primarily due to a $503 million
change in current assets and liabilities. Th e change
in current assets and liabilities was primarily driven
by a $403 million change in other current liabilities
largely due to changes in trade promotion and income
tax accruals, and a $107 million change in inventory.
In addition, in fi scal 2013 we made a $200 million
voluntary contribution to our principal domestic pen-
sion plans.
Cash Flows from Investing Activities
In Millions
2015
2014
2013
Fiscal Year
Purchases of land, buildings,
and equipment
Acquisitions,
net of cash acquired
Investments in affi liates, net
Proceeds from disposal of land,
$ (712.4)
$ (663.5) $ (613.9)
(822.3)
(102.4)
—
(898.0)
(54.9)
(40.4)
buildings, and equipment
11.0
6.6
Proceeds from divestiture
—
121.6
24.2
—
Exchangeable note
Other, net
Net cash used by
27.9
(4.0)
29.3
16.2
(0.9)
(3.5)
investing activities
$(1,602.2)
$(561.8) $(1,515.4)
In fiscal 2015, cash used by investing activities
increased by $1.0 billion from fi scal 2014. We invested
$712 million in land, buildings, and equipment in fi s-
cal 2015, $49 million more than the same period last
year. In the second quarter of fi scal 2015, we acquired
Annie’s, a publicly traded food company headquartered
in Berkeley, California, for an aggregate purchase price
of $809 million, net of $12 million of cash acquired. We
made $102 million of investments in affi liates, primarily
CPW, in fi scal 2015. In addition, we received $28 million
in payments from Sodiaal International (Sodiaal) in fi s-
cal 2015 against the $132 million exchangeable note we
purchased in fi scal 2012.
In fiscal 2014, cash used by investing activities
decreased by $954 million from fi scal 2013. We invested
$664 million in land, buildings, and equipment in fi scal
2014, $50 million more than in fi scal 2013. We made
$55 million of investments in affi liates, primarily CPW,
in fi scal 2014. In the fourth quarter of fi scal 2014, we
sold certain grain elevators for $124 million in cash,
2015 ANNUAL REPORT
23
accelerated repurchase programs. Th e authorization
has no specifi ed termination date.
During fi scal 2015, we repurchased 22 million shares
of our common stock for $1,162 million. During fi scal
2014, we repurchased 36 million shares of our com-
mon stock for $1,745 million. During fi scal 2013, we
repurchased 24 million shares of our common stock for
$1,015 million.
Dividends paid in fi scal 2015 totaled $1,018 million,
or $1.67 per share, an 8 percent per share increase
from fi scal 2014. Dividends paid in fi scal 2014 totaled
$983 million, or $1.55 per share, a 17 percent per share
increase from fi scal 2013 dividends of $1.32 per share.
On March 10, 2015, our Board of Directors approved a
5 percent dividend increase, eff ective with the May 1,
2015 payment, to an annualized rate of $1.76 per share.
Selected Cash Flows from Joint Ventures
Selected cash fl ows from our joint ventures are set
forth in the following table:
Infl ow (Outfl ow), in Millions
2015
2014
2013
Advances to joint ventures, net
$(102.4)
$(54.9)
$(36.7)
Dividends received
72.6
90.5
115.7
Fiscal Year
CAPITAL RESOURCES
Total capital consisted of the following:
In Millions
Notes payable
May 31, 2015
May 25, 2014
$
615.8
$ 1,111.7
Current portion of long-term debt
Long-term debt
1,000.4
7,607.7
1,250.6
6,423.5
Total debt
Redeemable interest
Noncontrolling interests
Stockholders’ equity
Total capital
9,223.9
8,785.8
778.9
396.0
984.1
470.6
4,996.7
6,534.8
$15,395.5
$16,775.3
including a working capital adjustment fi nalized in the
fi rst quarter of fi scal 2015. In addition we received $29
million in payments from Sodiaal in fi scal 2014 against
the exchangeable note.
We expect capital expenditures to be approximately
$840 million in fi scal 2016. Th ese expenditures will
fund initiatives that are expected to fuel International
growth, support innovative products, and continue
HMM initiatives throughout the supply chain.
Cash Flows from Financing Activities
Fiscal Year
In Millions
2015
2014
2013
Change in notes payable
$ (509.8) $ 572.9 $ (44.5)
Issuance of long-term debt
2,253.2
1,673.0 1,001.1
Payment of long-term debt
(1,145.8) (1,444.8)
(542.3)
Proceeds from common stock
issued on exercised options
163.7 108.1 300.8
Tax benefi t on exercised options
74.6
69.3 103.0
Purchases of common
stock for treasury
Dividends paid
Addition of
(1,161.9) (1,745.3) (1,044.9)
(1,017.7) (983.3) (867.6)
noncontrolling interest
—
17.6
—
Distributions to noncontrolling
and redeemable interest holders
(25.0)
(77.4)
(39.2)
Other, net
Net cash used by
(16.1)
(14.2)
(6.6)
fi nancing activities
$ (1,384.8) $ (1,824.1) $ (1,140.2)
Net cash used by fi nancing activities decreased by
$439 million in fi scal 2015. We had $204 million less
net debt issuances in fi scal 2015 than the same period a
year ago. For more information on our debt issuances
and payments, please refer to Note 8 to the Consolidated
Financial Statements on page 61 of this report.
During fi scal 2015, we received $164 million in pro-
ceeds from common stock issued on exercised options
compared to $108 million in fi scal 2014, an increase of
$56 million. During fi scal 2013, we received $301 million
in proceeds from common stock issued on exercised
options.
In May 2014, our Board of Directors authorized the
repurchase of up to 100 million shares of our common
stock. Purchases under the authorization can be made
in the open market or in privately negotiated trans-
actions, including the use of call options and other
derivative instruments, Rule 10b5-1 trading plans, and
24
GENERAL MILLS
Th e following table details the fee-paid committed
and uncommitted credit lines we had available as of
May 31, 2015:
In Billions
Credit facility expiring:
April 2017
May 2019
June 2019
Total committed credit facilities
Uncommitted credit facilities
Total committed and
Facility
Amount
Borrowed
Amount
$ 1.7
1.0
0.2
2.9
0.5
$ —
—
0.1
0.1
0.1
uncommitted credit facilities
$3.4
$0.2
To ensure availability of funds, we maintain bank
credit lines suffi cient to cover our outstanding notes
payable. Commercial paper is a continuing source of
short-term fi nancing. We have commercial paper pro-
grams available to us in the United States and Europe.
We also have uncommitted and asset-backed credit
lines that support our foreign operations. Th e credit
facilities contain several covenants, including a require-
ment to maintain a fi xed charge coverage ratio of at
least 2.5 times.
Certain of our long-term debt agreements, our credit
facilities, and our noncontrolling interests contain
restrictive covenants. As of May 31, 2015, we were in
compliance with all of these covenants.
We have $1,000 million of long-term debt maturing
in the next 12 months that is classifi ed as current. We
believe that cash fl ows from operations, together with
available short- and long-term debt fi nancing, will be
adequate to meet our liquidity and capital needs for at
least the next 12 months.
As of May 31, 2015, our total debt, including the
impact of derivative instruments designated as hedges,
was 72 percent in fi xed-rate and 28 percent in fl oat-
ing-rate instruments, compared to 71 percent in fi xed-
rate and 29 percent in fl oating-rate instruments on
May 25, 2014.
Improvement in return on average total capital is one
of our key performance measures (see the “Non-GAAP
Measures” section below for our discussion of this mea-
sure, which is not defi ned by GAAP). Return on average
total capital decreased 40 basis points from 11.6 percent
in fi scal 2014 to 11.2 percent in fi scal 2015 as fi scal 2015
earnings declined. On a constant-currency basis, return
on average total capital decreased 20 basis points. We
also believe that our fi xed charge coverage ratio and
the ratio of operating cash fl ow to debt are important
measures of our fi nancial strength. Our fi xed charge
coverage ratio in fi scal 2015 was 5.54 compared to 8.04
in fi scal 2014. Th e measure decreased from fi scal 2014
as earnings before income taxes and aft er-tax earnings
from joint ventures decreased by $893 million includ-
ing a $260 million non-cash pretax charge related to
an indefi nite-lived intangible asset impairment and a
$344 million pretax increase in restructuring charges
in fi scal 2015. Our operating cash fl ow to debt ratio
decreased 1.3 percentage points to 27.6 percent in fi scal
2015, driven by an increase in total debt.
We have a 51 percent controlling interest in Yoplait
SAS and a 50 percent interest in Yoplait Marques SNC
and Liberté Marques Sàrl. Sodiaal holds the remaining
interests in each of these entities. We consolidate these
entities into our consolidated fi nancial statements. We
record Sodiaal’s 50 percent interest in Yoplait Marques
SNC and Liberté Marques Sàrl as noncontrolling inter-
ests, and their 49 percent interest in Yoplait SAS as a
redeemable interest on our Consolidated Balance Sheets.
Th ese euro- and Canadian dollar-denominated interests
are reported in U.S. dollars on our Consolidated Balance
Sheets. Sodiaal has the ability to put a limited portion
of its redeemable interest to us at fair value once per
year through a maximum term expiring December
2020. As of May 31, 2015, the redemption value of the
redeemable interest was $779 million which approxi-
mates its fair value.
Th e third-party holder of the General Mills Cereals,
LLC (GMC) Class A Interests receives quarterly pre-
ferred distributions from available net income based on
the application of a fl oating preferred return rate, to
the holder’s capital account balance established in the
most recent mark-to-market valuation (currently $252
million). For fi scal 2015, the fl oating preferred rate was
equal to the sum of three-month LIBOR plus 110 basis
points. Th e preferred return rate is adjusted every three
years through a negotiated agreement with the Class
A Interest holder or through a remarketing auction.
On June 1, 2015, subsequent to our year-end, the fl oat-
ing preferred return rate on GMC’s Class A Interests
was reset to the sum of three-month LIBOR plus 125
basis points.
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
2015 ANNUAL REPORT
25
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.
OFF-BALANCE SHEET ARRANGEMENTS AND
CONTRACTUAL OBLIGATIONS
As of May 31, 2015, we have issued guarantees and
comfort letters of $434 million for the debt and other
obligations of consolidated subsidiaries, and guarantees
and comfort letters of $258 million for the debt and
other obligations of non-consolidated affi liates, mainly
CPW. In addition, off-balance sheet arrangements
are generally limited to the future payments under
non-cancelable operating leases, which totaled $400
million as of May 31, 2015.
As of May 31, 2015, we had invested in fi ve variable
interest entities (VIEs). None of our VIEs are material to
our results of operations, fi nancial condition, or liquid-
ity as of and for the year ended May 31, 2015.
Th e following table summarizes our future estimated
cash payments under existing contractual obligations,
including payments due by period:
Payments Due by Fiscal Year
In Millions
Total
2021 and
2016 2017 - 18 2019 - 20 Th ereaft er
Long-term debt (a)
$ 8,615.4 $1,000.0 $1,707.5 $1,650.0 $4,257.9
Accrued interest
91.8
91.8
—
—
—
Operating leases (b)
400.5
108.4
133.1
77.4
81.6
Capital leases
1.5
0.6
0.6
0.3
—
Purchase obligations (c) 2,363.8 2,124.2
141.8
65.5
32.3
Total contractual
obligations
11,473.0 3,325.0 1,983.0 1,793.2 4,371.8
Other long-term
obligations (d)
1,738.2
—
—
—
—
Total long-term
obligations
$13,211.2 $3,325.0 $1,983.0 $1,793.2 $4,371.8
(a) Amounts represent the expected cash payments of our long-term
debt and do not include $1 million for capital leases or $8 million for net
unamortized bond premiums and discounts and fair value adjustments.
(b) Operating leases represents the minimum rental commitments under
non-cancelable operating leases.
(c) Th e majority of the purchase obligations represent commitments for
raw material and packaging to be utilized in the normal course of busi-
ness and for consumer marketing spending commitments that support our
brands. For purposes of this table, arrangements are considered purchase
obligations if a contract specifi es all signifi cant terms, including fi xed or
minimum quantities to be purchased, a pricing structure, and approximate
timing of the transaction. Most arrangements are cancelable without a
signifi cant penalty and with short notice (usually 30 days). Any amounts
refl ected on the Consolidated Balance Sheets as accounts payable and
accrued liabilities are excluded from the table above.
(d) Th e fair value of our foreign exchange, equity, commodity, and grain
derivative contracts with a payable position to the counterparty was $133
million as of May 31, 2015, based on fair market values as of that date.
Future changes in market values will impact the amount of cash ultimately
paid or received to settle those instruments in the future. Other long-term
obligations mainly consist of liabilities for accrued compensation and ben-
efi ts, including the underfunded status of certain of our defi ned benefi t
pension, other postretirement benefi t, and postemployment benefi t plans,
and miscellaneous liabilities. We expect to pay $22 million of benefi ts from
our unfunded postemployment benefi t plans and $14 million of deferred
compensation in fi scal 2016. We are unable to reliably estimate the amount
of these payments beyond fi scal 2016. As of May 31, 2015, our total lia-
bility for uncertain tax positions and accrued interest and penalties was
$196 million.
SIGNIFICANT ACCOUNTING ESTIMATES
For a complete description of our signifi cant account-
ing policies, see Note 2 to the Consolidated Financial
Statements on page 44 of this report. Our signifi cant
accounting estimates are those that have a meaning-
ful impact on the reporting of our fi nancial condition
and results of operations. Th ese estimates include our
accounting for promotional expenditures, valuation of
long-lived assets, intangible assets, redeemable interest,
stock-based compensation, income taxes, and defi ned
benefit pension, other postretirement benefit, and
post-employment benefi t plans.
Promotional Expenditures Our promotional activities
are conducted through our customers and directly or
indirectly with end consumers. Th ese activities include:
payments to customers to perform merchandising
activities on our behalf, such as advertising or in-store
displays; discounts to our list prices to lower retail shelf
prices; payments to gain distribution of new products;
coupons, contests, and other incentives; and media and
advertising expenditures. Th e recognition of these costs
requires estimation of customer participation and per-
formance levels. Th ese estimates are based on the fore-
casted customer sales, the timing and forecasted costs
of promotional activities, and other factors. Diff erences
between estimated expenses and actual costs are recog-
nized as a change in management estimate in a subse-
quent period. Our accrued trade, coupon, and consumer
marketing liabilities were $565 million as of May 31,
2015, and $578 million as of May 25, 2014. Because
our total promotional expenditures (including amounts
classifi ed as a reduction of revenues) are signifi cant, if
our estimates are inaccurate we would have to make
26
GENERAL MILLS
adjustments in subsequent periods that could have a
material eff ect on our results of operations.
Valuation of Long-Lived Assets We estimate the useful
lives of long-lived assets and make estimates concern-
ing undiscounted cash fl ows to review for impairment
whenever events or changes in circumstances indicate
that the carrying amount of an asset (or asset group)
may not be recoverable. Fair value is measured using
discounted cash fl ows or independent appraisals, as
appropriate.
Intangible Assets Goodwill and other indefi nite lived
intangible assets are not subject to amortization and are
tested for impairment annually and whenever events
or changes in circumstances indicate that impair-
ment may have occurred. Our estimates of fair value
for goodwill impairment testing are determined based
on a discounted cash fl ow model. We use inputs from
our long-range planning process to determine growth
rates for sales and profi ts. We also make estimates of
discount rates, perpetuity growth assumptions, market
comparables, and other factors.
We evaluate the useful lives of our other intangible
assets, mainly brands, to determine if they are fi nite or
indefi nite-lived. Reaching a determination on useful life
requires signifi cant judgments and assumptions regard-
ing the future eff ects of obsolescence, demand, compe-
tition, other economic factors (such as the stability of
the industry, known technological advances, legislative
action that results in an uncertain or changing regula-
tory environment, and expected changes in distribution
channels), the level of required maintenance expendi-
tures, and the expected lives of other related groups of
assets. Intangible assets that are deemed to have defi -
nite lives are amortized on a straight-line basis, over
their useful lives, generally ranging from 4 to 30 years.
Our estimate of the fair value of our brand assets is
based on a discounted cash fl ow model using inputs
which include projected revenues from our long-range
plan, assumed royalty rates that could be payable if we
did not own the brands, and a discount rate.
As of May 31, 2015, we had $13.1 billion of good-
will and indefi nite-lived intangible assets. While we
currently believe that the fair value of each intangi-
ble exceeds its carrying value and that those intan-
gibles so classifi ed will contribute indefi nitely to our
cash fl ows, materially diff erent assumptions regarding
future performance of our businesses or a diff erent
weighted-average cost of capital (WACC) could result in
signifi cant impairment losses and amortization expense.
We performed our fi scal 2015 assessment of our intan-
gible assets as of November 24, 2014. As of our annual
assessment date, there was no impairment of any of
our intangible assets as their related fair values were
substantially in excess of the carrying values, except
for the Mountain High, Uncle Toby’s, and Green Giant
brands. Th e excess fair value above the carrying value
of these brand assets were as follows:
In Millions
Mountain High
Uncle Toby’s
Green Giant
Excess Fair
Value Above
Carrying
Value
3%
7%
13%
Carrying
Value
$ 35.4
$ 57.7
$ 425.9
At the end of the fourth quarter of fi scal 2015, we
made a strategic decision to redirect certain resources
supporting our Green Giant business in our U.S. Retail
segment to other businesses within the segment.
Th erefore, future sales and profi tability projections in
our long-range plan for this business declined. As a
result of this triggering event, we performed an interim
impairment assessment of the Green Giant brand
intangible asset as of May 31, 2015, and determined that
the fair value of the brand asset no longer exceeded the
carrying value of the asset. Signifi cant assumptions
used in that assessment included our updated long-
range cash fl ow projections for the Green Giant busi-
ness, an updated royalty rate, a WACC, and a tax rate.
We recorded a $260 million impairment charge in the
fourth quarter of fi scal 2015 related to this asset.
Our Green Giant, Uncle Toby’s and Mountain
High brands have experienced declining business
performance, and we will continue to monitor these
businesses.
Redeemable Interest During the third quarter of fi s-
cal 2015, we adjusted the redemption value of Sodiaal’s
redeemable interest in Yoplait SAS based on a dis-
counted cash fl ow model. Th e signifi cant assumptions
used to estimate the redemption value include projected
revenue growth and profi tability from our long-range
plan, capital spending, depreciation and taxes, foreign
currency exchange rates, and a discount rate. As of
May 31, 2015, the redemption value of the redeemable
interest was $779 million.
2015 ANNUAL REPORT
27
Stock-based Compensation The valuation of stock
options is a significant accounting estimate that
requires us to use judgments and assumptions that
are likely to have a material impact on our fi nancial
statements. Annually, we make predictive assumptions
regarding future stock price volatility, employee exer-
cise behavior, dividend yield, and the forfeiture rate. For
more information on these assumptions, please refer
to Note 11 to the Consolidated Financial Statements on
page 66 of this report.
Th e estimated fair values of stock options granted
and the assumptions used for the Black-Scholes
option-pricing model were as follows:
Fiscal Year
2015
2014
2013
Estimated fair values of
stock options granted
$ 7.22
$ 6.03
$ 3.65
Assumptions:
Risk-free interest rate
2.6%
2.6%
1.6%
Expected term
Expected volatility
Dividend yield
8.5 years 9.0 years 9.0 years
17.5%
17.4%
17.3%
3.1%
3.1%
3.5%
Th e risk-free interest rate for periods during the
expected term of the options is based on the U.S.
Treasury zero-coupon yield curve in eff ect at the time
of grant. An increase in the expected term by 1 year,
leaving all other assumptions constant, would increase
the grant date fair value by 2 percent. If all other
assumptions are held constant, a one percentage point
increase in our fi scal 2015 volatility assumption would
increase the grant date fair value of our fi scal 2015
option awards by 7 percent.
To the extent that actual outcomes diff er from our
assumptions, we are not required to true up grant-
date fair value-based expense to fi nal intrinsic values.
However, these diff erences can impact the classifi ca-
tion of cash tax benefi ts realized upon exercise of stock
options, as explained in the following two paragraphs.
Furthermore, historical data has a signifi cant bearing
on our forward-looking assumptions. Signifi cant vari-
ances between actual and predicted experience could
lead to prospective revisions in our assumptions, which
could then signifi cantly impact the year-over-year com-
parability of stock-based compensation expense.
Any corporate income tax benefi t realized upon exer-
cise or vesting of an award in excess of that previously
recognized in earnings (referred to as a windfall tax
benefi t) is presented in the Consolidated Statements of
Cash Flows as a fi nancing cash fl ow. Th e actual impact
on future years’ fi nancing cash fl ows will depend, in
part, on the volume of employee stock option exercises
during a particular year and the relationship between
the exercise-date market value of the underlying stock
and the original grant-date fair value previously deter-
mined for fi nancial reporting purposes.
Realized windfall tax benefi ts are credited to addi-
tional paid-in capital within the Consolidated Balance
Sheets. Realized shortfall tax benefi ts (amounts which
are less than that previously recognized in earnings) are
fi rst off set against the cumulative balance of windfall
tax benefi ts, if any, and then charged directly to income
tax expense, potentially resulting in volatility in our
consolidated eff ective income tax rate. We calculated a
cumulative amount of windfall tax benefi ts for the pur-
pose of accounting for future shortfall tax benefi ts and
currently have suffi cient cumulative windfall tax bene-
fi ts to absorb projected arising shortfalls, such that we
do not currently expect future earnings to be aff ected
by this provision. However, as employee stock option
exercise behavior is not within our control, it is possible
that materially diff erent reported results could occur if
diff erent assumptions or conditions were to prevail.
Income Taxes We apply a more-likely-than-not thresh-
old to the recognition and derecognition of uncertain
tax positions. Accordingly, we recognize the amount of
tax benefi t that has a greater than 50 percent likelihood
of being ultimately realized upon settlement. Future
changes in judgment related to the expected ultimate
resolution of uncertain tax positions will aff ect earnings
in the quarter of such change. For more information on
income taxes, please refer to Note 14 to the Consolidated
Financial Statements on page 76 of this report.
Defined Benefit Pension, Other Postretirement
Benefi t, and Postemployment Benefi t Plans We have
defi ned benefi t pension plans covering many employees
in the United States, Canada, France, and the United
Kingdom. We also sponsor plans that provide health
care benefi ts to many of our retirees in the United
States, Canada, and Brazil. Under certain circumstances,
we also provide accruable benefi ts to former or inactive
employees in the United States, Canada, and Mexico,
and members of our Board of Directors, including sev-
erance and certain other benefi ts payable upon death.
Please refer to Note 13 to the Consolidated Financial
28
GENERAL MILLS
Statements on page 69 of this report for a description
of our defi ned benefi t pension, other postretirement
benefi t, and postemployment benefi t plans.
We recognize benefi ts provided during retirement or
following employment over the plan participants’ active
working lives. Accordingly, we make various assump-
tions to predict and measure costs and obligations
many years prior to the settlement of our obligations.
Assumptions that require significant management
judgment and have a material impact on the measure-
ment of our net periodic benefi t expense or income and
accumulated benefi t obligations include the long-term
rates of return on plan assets, the interest rates used
to discount the obligations for our benefi t plans, and
health care cost trend rates.
Expected Rate of Return on Plan Assets Our expected
rate of return on plan assets is determined by our
asset allocation, our historical long-term investment
performance, our estimate of future long-term returns
by asset class (using input from our actuaries, invest-
ment services, and investment managers), and long-
term infl ation assumptions. We review this assumption
annually for each plan, however, our annual investment
performance for one particular year does not, by itself,
signifi cantly infl uence our evaluation.
Our historical investment returns (compound annual
growth rates) for our United States defi ned benefi t
pension and other postretirement benefi t plan assets
were 6.5 percent, 11.7 percent, 8.1 percent, 7.8 percent,
and 9.6 percent for the 1, 5, 10, 15, and 20 year periods
ended May 31, 2015.
On a weighted-average basis, the expected rate of
return for all defi ned benefi t plans was 8.53 percent for
fi scal 2015, 8.53 percent for fi scal 2014, and 8.53 per-
cent for fi scal 2013.
Lowering the expected long-term rate of return on
assets by 100 basis points would increase our net pen-
sion and postretirement expense by $62 million for fi scal
2016. A market-related valuation basis is used to reduce
year-to-year expense volatility. Th e market-related valu-
ation recognizes certain investment gains or losses over
a fi ve-year period from the year in which they occur.
Investment gains or losses for this purpose are the dif-
ference between the expected return calculated using
the market-related value of assets and the actual return
based on the market-related value of assets. Our out-
side actuaries perform these calculations as part of our
determination of annual expense or income.
Discount Rates Our discount rate assumptions are
determined annually as of the last day of our fi scal year
for our defi ned benefi t pension, other postretirement
benefi t, and postemployment benefi t plan obligations.
We work with our outside actuaries to determine the
timing and amount of expected future cash outfl ows
to plan participants and, using the Aa Above Median
corporate bond yield, to develop a forward interest rate
curve, including a margin to that index based on our
credit risk. Th is forward interest rate curve is applied
to our expected future cash outfl ows to determine our
discount rate assumptions.
Our weighted-average discount rates were as follows:
Defi ned
Other
Benefi t Postretirement Postemployment
Benefi t
Benefi t
Pension
Plans
Plans
Plans
Obligations as of
May 31, 2015, and
fi scal 2016 expense
4.38%
4.20%
3.55%
Obligations as of
May 25, 2014, and
fi scal 2015 expense
4.54%
Fiscal 2014 expense
4.54%
4.51%
4.52%
3.82%
3.70%
Lowering the discount rates by 100 basis points would
increase our net defi ned benefi t pension, other post-
retirement benefi t, and postemployment benefi t plan
expense for fi scal 2016 by approximately $167 million.
All obligation-related experience gains and losses are
amortized using a straight-line method over the average
remaining service period of active plan participants.
Health Care Cost Trend Rates We review our health
care cost trend rates annually. Our review is based on
data we collect about our health care claims experi-
ence and information provided by our actuaries. Th is
information includes recent plan experience, plan
design, overall industry experience and projections, and
assumptions used by other similar organizations. Our
initial health care cost trend rate is adjusted as neces-
sary to remain consistent with this review, recent expe-
riences, and short-term expectations. Our initial health
care cost trend rate assumption is 7.3 percent for retir-
ees age 65 and over and 6.5 percent for retirees under
age 65 at the end of fi scal 2015. Rates are graded down
annually until the ultimate trend rate of 5.0 percent
is reached in 2025 for all retirees. Th e trend rates are
applicable for calculations only if the retirees’ benefi ts
2015 ANNUAL REPORT
29
increase as a result of health care infl ation. Th e ulti-
mate trend rate is adjusted annually, as necessary, to
approximate the current economic view on the rate of
long-term infl ation plus an appropriate health care cost
premium. Assumed trend rates for health care costs
have an important eff ect on the amounts reported for
the other postretirement benefi t plans.
A one percentage point change in the health care
cost trend rate would have the following eff ects:
In Millions
Eff ect on the aggregate of the
service and interest cost
One
One
Percentage Percentage
Point
Decrease
Point
Increase
components in fi scal 2016
$ 3.7
$ (3.2)
Eff ect on the other postretirement
accumulated benefi t obligation
as of May 31, 2015
77.1
(68.9)
Any arising health care claims cost-related experience
gain or loss is recognized in the calculation of expected
future claims. Once recognized, experience gains and
losses are amortized using a straight-line method over
15 years, resulting in at least the minimum amortiza-
tion required being recorded.
Financial Statement Impact In fi scal 2015, we recorded
net defi ned benefi t pension, other postretirement ben-
efi t, and postemployment benefi t plan expense of $153
million compared to $140 million of expense in fi scal
2014 and $159 million of expense in fi scal 2013. As of
May 31, 2015, we had cumulative unrecognized actu-
arial net losses of $1.7 billion on our defi ned benefi t
pension plans and $81 million on our postretirement
and postemployment benefi t plans, mainly as the result
of liability increases from lower interest rates, partially
off set by recent increases in the values of plan assets.
Th ese unrecognized actuarial net losses will result in
increases in our future pension and postretirement
benefi t expenses because they currently exceed the cor-
ridors defi ned by GAAP.
Assumed mortality rates of plan participants are a
critical estimate in measuring the expected payments
a participant will receive over their lifetime and the
amount of expense we recognize. On October 27, 2014,
the Society of Actuaries published RP-2014 Mortality
Tables and Mortality Improvement Scale MP-2014,
which both refl ect improved longevity. We adopted the
change to the mortality assumptions to remeasure our
defi ned benefi t pension plans and other postretirement
benefi t plans obligations, which increased the total of
these obligations by $437 million. In addition, these
assumptions increased the fi scal 2016 expense associ-
ated with these plans by $72 million.
Actual future net defi ned benefi t pension, other post-
retirement benefi t, and postemployment benefi t plan
income or expense will depend on investment perfor-
mance, changes in future discount rates, changes in
health care cost trend rates, and other factors related
to the populations participating in these plans.
RECENTLY ISSUED ACCOUNTING
PRONOUNCEMENTS
In May 2015, the Financial Accounting Standards
Board (FASB) issued new accounting requirements for
the presentation of certain investments using the net
asset value, providing a practical expedient to exclude
such investments from categorization within the fair
value hierarchy and make a separate disclosure. Th e
requirements of the new standard are eff ective for
annual reporting periods beginning aft er December 15,
2015, and interim periods within those annual periods,
which for us is the fi rst quarter of fi scal 2017. We do
not expect this guidance to have a material impact on
our results of operations or fi nancial position.
In April 2015, the FASB issued new accounting
requirements that permit reporting entities with a fi s-
cal year-end that does not coincide with a month-end
to apply a practical expedient to measure defi ned ben-
efi t plan assets and obligations using the month-end
that is closest to the entity’s fi scal year-end and apply
the practice consistently to all plans. Th e requirements
of the new standard are eff ective for annual reporting
periods beginning aft er December 15, 2015, and interim
periods within those annual periods, which for us is
the fi rst quarter of fi scal 2017. We do not expect this
guidance to have a material impact on our results of
operations or fi nancial position.
In May 2014, the FASB issued new accounting
requirements for the recognition of revenue from con-
tracts with customers. Th e requirements of the new
standard are eff ective for annual reporting periods
beginning aft er December 15, 2016, and interim periods
within those annual periods, which for us is the fi rst
quarter of fi scal 2018. We do not expect this guidance
30
GENERAL MILLS
Net sales growth rates on a constant-currency basis
is calculated as follows:
Percentage change in total net sales
Impact of foreign currency exchange
Percentage change in total net sales
Fiscal
2015
2014
(2) %
(3) pts
1 %
(1) pts
on a constant-currency basis
1 %
2 %
Diluted EPS Excluding Certain Items Affecting
Comparability and Related Constant Currency
Growth Rate Th is measure is used in reporting to our
executive management and as a component of the
Board of Directors’ measurement of our performance
for incentive compensation purposes. We believe that
this measure provides useful information to investors
because it is the profi tability measure we use to eval-
uate earnings performance on a comparable year-over-
year basis. Th e adjustments are either items resulting
from infrequently occurring events or items that, in
management’s judgment, signifi cantly aff ect the year-
over-year assessment of operating results.
to have a material impact on our results of operations
or fi nancial position.
In June 2014, the FASB issued new accounting
requirements for share-based payment awards issued
based upon specifi c performance targets. Th e require-
ments of the new standard are eff ective for annual
reporting periods beginning aft er December 15, 2015,
and interim periods within those annual periods, which
for us is the fi rst quarter of fi scal 2017. We do not
expect this guidance to have a material impact on our
results of operations or fi nancial position.
NON-GAAP MEASURES
We have included in this report measures of fi nancial
performance that are not defi ned by GAAP. We believe
that these measures provide useful information to
investors, and include these measures in other commu-
nications to investors.
For each of these non-GAAP fi nancial measures, we
are providing below a reconciliation of the diff erences
between the non-GAAP measure and the most directly
comparable GAAP measure, an explanation of why
our management or the Board of Directors believes
the non-GAAP measure provides useful information
to investors and any additional purposes for which
our management or Board of Directors uses the non-
GAAP measure. Th ese non-GAAP measures should be
viewed in addition to, and not in lieu of, the comparable
GAAP measure.
Constant Currency Net Sales Growth Rates This
measure is used in reporting to our executive manage-
ment and as a component of the Board of Directors’
measurement of our performance for incentive com-
pensation purposes. We believe that this measure
provides useful information to investors because it pro-
vides transparency to underlying performance in our
consolidated net sales by excluding the eff ect that for-
eign currency exchange rate fl uctuations have on the
year-to-year comparability given volatility in foreign
currency exchange markets.
2015 ANNUAL REPORT
31
Th e reconciliation of our GAAP measure, diluted EPS, to diluted EPS excluding certain items aff ecting comparabil-
ity and the related constant-currency growth rate follows:
Per Share Data
Diluted earnings per share, as reported
Mark-to-market eff ects (a)
Divestiture gain, net (b)
Tax items (c)
Acquisition integration costs (d)
Venezuela currency devaluation (e)
Restructuring costs (f)
Project-related costs (f)
Indefi nite-lived intangible asset impairment (g)
Diluted earnings per share, excluding
2015
2014
Fiscal Year
Change
2013
2012
2011
$1.97
0.09
—
0.13
0.02
0.01
0.35
0.01
0.28
$ 2.83
(0.05)
(0.06)
—
—
0.09
0.01
—
—
(30)%
$ 2.79
—
—
(0.13)
0.01
0.03
0.02
—
—
$2.35
0.10
—
—
0.01
—
0.10
—
—
$ 2.70
(0.09)
—
(0.13)
—
—
—
—
—
certain items aff ecting comparability
$2.86
$ 2.82
Foreign currency exchange impact
Diluted earnings per share growth, excluding
certain items aff ecting comparability, on a
constant-currency basis
(a) See Note 7 to the Consolidated Financial Statements on page 52 of this report.
(b) See Note 3 to the Consolidated Financial Statements on page 47 of this report.
1%
(3)pts
4%
$ 2.72
$2.56
$ 2.48
(c) Th e fi scal 2015 tax item is related to the one-time repatriation of foreign earnings in fi scal 2015. Th e fi scal 2013 tax items consist of a reduction to income
taxes related to the restructuring of our GMC subsidiary and an increase to income taxes related to the liquidation of a corporate investment. Additionally,
fi scal 2013 includes changes in deferred taxes associated with the Medicare Part D subsidies related to the Patient Protection and Aff ordable Care Act, as
amended by the Health Care and Education Reconciliation Act of 2010. Th e fi scal 2011 tax item represents the eff ects of court decisions and audit settle-
ments on uncertain tax matters.
(d) Integration costs resulting from the acquisitions of Annie’s in fi scal 2015, Yoki in fi scal 2013, and Yoplait SAS and Yoplait Marques SNC in fi scal 2012.
(e) See Note 7 to the Consolidated Financial Statements on page 52 of this report.
(f) See Note 4 to the Consolidated Financial Statements on page 48 of this report.
(g) See Note 6 to the Consolidated Financial Statements on page 51 of this report.
Total Segment Operating Profi t and Related Constant
Currency Growth Rate Th is measure is used in report-
ing to our executive management and as a compo-
nent of the Board of Directors’ measurement of our
performance for incentive compensation purposes. We
believe that this measure provides useful information
to investors because it is the profi tability measure we
use to evaluate segment performance. A reconciliation
of total segment operating profi t to operating profi t,
the relevant GAAP measure, is included in Note 16 to
the Consolidated Financial Statements on page 78 of
this report.
Total segment operating profi t growth rate on a
constant-currency basis is calculated as follows:
Percentage change in total segment
operating profi t as reported
Impact of foreign currency exchange
Percentage change in total
segment operating profi t on a
Fiscal
2015
2014
(4) %
(2) pts
(2) %
(1) pt
constant-currency basis
(2) %
(1) %
32
GENERAL MILLS
Net Sales Growth Rates for Our International Segment on Constant-Currency Basis We believe this measure of
our International segment and region net sales provides useful information to investors because it provides transpar-
ency to the underlying performance by excluding the eff ect that foreign currency exchange rate fl uctuations have on
year-to-year comparability given volatility in foreign currency exchange markets.
Percentage
Change in
Net Sales
as Reported
(3)%
(8)
4
(14)
(5)%
Fiscal 2015
Impact of
Foreign
Currency
Exchange
Percentage
Change in
Net Sales
on Constant
Currency Basis
Percentage
Change in
Net Sales
as Reported
Fiscal 2014
Impact of
Foreign
Currency
Exchange
Percentage
Change in
Net Sales
on Constant
Currency Basis
(8) pts
(8)
(1)
(31)
(11) pts
5%
Flat
5
17
6%
(1)%
(1)
9
16
4%
3 pts
(6)
—
(22)
(4) pts
(4)%
5
9
38
8%
Europe
Canada
Asia/Pacifi c
Latin America
Total International
Constant Currency International Segment Operating
Profi t Growth Rate We believe that this measure pro-
vides useful information to investors because it pro-
vides transparency to underlying performance of the
International segment by excluding the effect that
foreign currency exchange rate fl uctuations have on
year-to-year comparability given volatility in foreign
currency exchange markets.
International segment operating profi t growth rate
on a constant-currency basis is calculated as follows:
Fiscal
2015
2014
Percentage change in International
segment operating profi t as reported
Impact of foreign currency exchange
(2) %
(11) pts
4 %
(6) pts
Percentage change in International
segment operating profi t on a
constant-currency basis
9 %
10 %
Constant Currency Joint Venture Earnings Aft er Tax Growth Rate We believe that this measure provides useful
information to investors because it provides transparency to underlying performance of our joint ventures by exclud-
ing the eff ect that foreign currency rate fl uctuations have on year-to-year comparability given volatility in foreign
currency exchange markets.
Total Joint Ventures
(6)%
(6) pts
Flat
Percentage Change
in Aft er-tax Earnings
From Joint Ventures
as Reported
Impact of Foreign
Currency Exchange
Percentage Change
in Aft er-tax Earnings
From Joint Ventures
on a Constant
Currency Basis
2015 ANNUAL REPORT
33
Return on Average Total Capital Change in return on average total capital is a measure used in reporting to our
executive management and as a component of the Board of Director’s measurement of our performance for incentive
compensation purposes. We believe that this measure provides useful information to investors because it is import-
ant for assessing the utilization of capital and it eliminates certain items that aff ect year-to-year comparability.
In Millions
2015
2014
2013
2012
2011
2010
Fiscal Year
Net earnings, including earnings attributable to
redeemable and noncontrolling interests
$ 1,259.4 $ 1,861.3 $ 1,892.5 $ 1,589.1 $ 1,803.5
Interest, net, aft er-tax
199.8
190.9
201.2
238.9
243.5
Earnings before interest, aft er-tax
1,459.2
2,052.2
2,093.7
1,828.0
2,047.0
Mark-to-market eff ects
Divestiture gain, net
Tax items
Acquisition integration costs
Venezuela currency devaluation
Restructuring costs
Project-related costs
Indefi nite-lived intangible impairment
Earnings before interest, aft er-tax for
56.5
(30.5)
—
(36.0)
78.6
10.4
8.0
217.7
8.3
176.9
—
—
57.8
3.6
—
—
(2.8)
—
(85.4)
8.8
20.8
15.9
—
—
65.6
(60.0)
—
—
9.7
—
64.3
—
—
—
(88.9)
—
—
—
—
—
return on capital calculation
$ 2,015.6 $ 2,047.1 $ 2,051.0 $ 1,967.6 $ 1,898.1
Current portion of long-term debt
$ 1,000.4 $ 1,250.6 $ 1,443.3 $
741.2 $ 1,031.3 $
107.3
Notes payable
Long-term debt
Total debt
Redeemable interest
Noncontrolling interests
Stockholders’ equity
Total capital
Accumulated other comprehensive loss
Aft er-tax earnings adjustments (a)
Adjusted total capital
Adjusted average total capital
Return on average total capital
Change in return on average total capital
Foreign currency exchange impact
Change in return on average total capital
on a constant-currency basis
615.8
1,111.7
599.7
526.5
311.3
1,050.1
7,607.7
6,423.5
5,926.1
6,161.9
5,542.5
5,268.5
9,223.9
8,785.8
7,969.1
7,429.6
6,885.1
6,425.9
778.9
396.0
984.1
470.6
967.5
456.3
847.8
461.0
—
—
246.7
245.1
4,996.7
6,534.8
6,672.2
6,421.7
6,365.5
5,402.9
15,395.5
16,775.3
16,065.1
15,160.1
13,497.3 12,073.9
2,310.7
1,340.3
1,585.3
1,743.7
1,010.8
1,486.9
347.1
(209.3)
(204.2)
(161.5)
(301.1)
(152.2)
$ 18,053.3 $ 17,906.3 $ 17,446.2 $ 16,742.3 $ 14,207.0 $ 13,408.6
$ 17,979.8 $ 17,676.2 $ 17,094.2 $ 15,474.6 $ 13,807.8
11.2%
11.6%
12.0%
12.7%
13.7%
(40) bps
(20) bps
(20) bps
(a) Sum of current year and previous year aft er-tax adjustments.
34
GENERAL MILLS
Adjusted Gross Margin We believe that this measure provides useful information to investors because it provides
transparency to underlying gross margin performance by excluding the eff ects of items resulting from infrequently
occurring events or items that, in management’s judgment, signifi cantly aff ect the year-over-year assessment of
operating results.
In Millions
Net sales
2015
2014
2013
2012
2011
2010
2009
2008
$ 17,630.3
$ 17,909.6
$ 17,774.1
$ 16,657.9
$ 14,880.2
$ 14,635.6
$ 14,555.8 $ 13,548.0
Gross margin as reported
5,949.2
6,369.8
6,423.9
6,044.7
5,953.5
5,800.2
5,174.9
4,816.2
Fiscal Year
Mark-to-market eff ects
Restructuring charges
Project-related costs
Venezuela currency
89.7
59.6
13.2
(48.5)
(4.4)
104.2
(95.2)
—
—
—
—
—
—
—
—
—
—
7.1
—
—
—
118.9
(57.0)
—
—
—
—
—
—
devaluation
3.2
22.6
16.0
Adjusted gross margin
$ 6,114.9
$ 6,343.9
$ 6,435.5
$ 6,148.9
$ 5,858.3
$ 5,807.3
$ 5,293.8 $ 4,759.2
Gross margin % of net sales
As reported
As adjusted
33.7%
34.7%
35.6%
35.4%
36.1%
36.2%
36.3%
36.9%
40.0%
39.4%
39.6%
39.7%
35.6%
36.4%
35.5%
35.1%
CAUTIONARY STATEMENT RELEVANT TO
FORWARD-LOOKING INFORMATION FOR THE
PURPOSE OF “SAFE HARBOR” PROVISIONS
OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
Th is report contains or incorporates by reference for-
ward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 that
are based on our current expectations and assump-
tions. We also may make written or oral forward-look-
ing statements, including statements contained in our
fi lings with the SEC 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 “for-
ward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. Such
statements are subject to certain risks and uncertain-
ties that could cause actual results to diff er 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 aff ect
our fi nancial performance and could cause our actual
results in future periods to diff er materially from any
current opinions or statements.
Our future results could be aff ected by a variety of
factors, such as: competitive dynamics in the consumer
foods industry and the markets for our products,
including new product introductions, advertising activ-
ities, pricing actions, and promotional activities of our
competitors; economic conditions, including changes
in infl ation rates, interest rates, tax rates, or the avail-
ability 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 dispo-
sitions of businesses or assets; changes in capital struc-
ture; changes in the legal and regulatory environment,
including labeling and advertising regulations and liti-
gation; 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
signifi cant accounting estimates; product quality and
safety issues, including recalls and product liability;
changes in consumer demand for our products; eff ec-
tiveness 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 pur-
chasing and inventory levels of signifi cant customers;
fl uctuations in the cost and availability of supply chain
resources, including raw materials, packaging, and
2015 ANNUAL REPORT
35
energy; disruptions or ineffi ciencies in the supply chain;
eff ectiveness of restructuring and cost savings initia-
tives; volatility in the market value of derivatives used
to manage price risk for certain commodities; benefi t
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; for-
eign economic conditions, including currency rate fl uc-
tuations; and political unrest in foreign markets and
economic uncertainty due to terrorism or war.
Quantitative and Qualitative Disclosures
About Market Risk
We are exposed to market risk stemming from changes
in interest and foreign exchange rates and commod-
ity and equity prices. Changes in these factors could
cause fl uctuations in our earnings and cash fl ows. In
the normal course of business, we actively manage our
exposure to these market risks by entering into vari-
ous hedging transactions, authorized under established
policies that place clear controls on these activities.
Th e counterparties in these transactions are generally
highly rated institutions. We establish credit limits for
each counterparty. Our hedging transactions include
but are not limited to a variety of derivative fi nancial
instruments. For information on interest rate, foreign
exchange, commodity price, and equity instrument
risk, please see Note 7 to the Consolidated Financial
Statements on page 52 of this report.
VALUE AT RISK
Th e estimates in the table below are intended to mea-
sure the maximum potential fair value we could lose in
one day from adverse changes in market interest rates,
foreign exchange rates, commodity prices, and equity
prices under normal market conditions. A Monte Carlo
value-at-risk (VAR) methodology was used to quantify
the market risk for our exposures. Th e models assumed
normal market conditions and used a 95 percent confi -
dence level.
Th e VAR calculation used historical interest and for-
eign exchange rates, and commodity and equity prices
from the past year to estimate the potential volatility
and correlation of these rates in the future. Th e market
You should also consider the risk factors that we
identify in Item 1A of our 2015 Form 10-K, which could
also aff ect our future results.
We undertake no obligation to publicly revise any
forward-looking statements to refl ect events or circum-
stances aft er the date of those statements or to refl ect
the occurrence of anticipated or unanticipated events.
data were drawn from the RiskMetrics™ data set. Th e
calculations are not intended to represent actual losses
in fair value that we expect to incur. Further, since the
hedging instrument (the derivative) inversely correlates
with the underlying exposure, we would expect that
any loss or gain in the fair value of our derivatives
would be generally off set by an increase or decrease in
the fair value of the underlying exposure. Th e positions
included in the calculations were: debt; investments;
interest rate swaps; foreign exchange forwards; com-
modity swaps, futures and options; and equity instru-
ments. Th e calculations do not include the underlying
foreign exchange and commodities or equity-related
positions that are off set by these market-risk-sensitive
instruments.
Th e table below presents the estimated maximum
potential VAR arising from a one-day loss in fair value
for our interest rate, foreign currency, commodity, and
equity market-risk-sensitive instruments outstanding
as of May 31, 2015, and May 25, 2014, and the average
fair value impact during the year ended May 31, 2015.
In Millions
Fair Value Impact
May 31,
2015
Average
During
fi scal 2015
May 25,
2014
Interest rate instruments
$25.1
$23.7
$32.7
Foreign currency instruments
17.9
Commodity instruments
Equity instruments
3.7
1.2
8.8
3.7
1.2
7.2
3.0
1.1
36
GENERAL MILLS
Reports of Management and Independent
Registered Public Accounting Firm
REPORT OF MANAGEMENT RESPONSIBILITIES
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Th e management of General Mills, Inc. is responsible
for the fairness and accuracy of the consolidated fi nan-
cial statements. Th e statements have been prepared in
accordance with accounting principles that are gener-
ally accepted in the United States, using management’s
best estimates and judgments where appropriate. Th e
fi nancial information throughout the Annual Report on
Form 10-K is consistent with our consolidated fi nancial
statements.
Management has established a system of inter-
nal controls that provides reasonable assurance that
assets are adequately safeguarded and transactions are
recorded accurately in all material respects, in accor-
dance with management’s authorization. We maintain
a strong audit program that independently evaluates
the adequacy and eff ectiveness of internal controls.
Our internal controls provide for appropriate separa-
tion of duties and responsibilities, and there are docu-
mented policies regarding use of our assets and proper
fi nancial reporting. Th ese formally stated and regularly
communicated policies demand highly ethical conduct
from all employees.
Th e Audit Committee of the Board of Directors meets
regularly with management, internal auditors, and our
independent registered public accounting fi rm to review
internal control, auditing, and fi nancial reporting mat-
ters. The independent registered public accounting
fi rm, internal auditors, and employees have full and free
access to the Audit Committee at any time.
Th e Audit Committee reviewed and approved the
Company’s annual financial statements. The Audit
Committee recommended, and the Board of Directors
approved, that the consolidated fi nancial statements be
included in the Annual Report. Th e Audit Committee
also appointed KPMG LLP to serve as the Company’s
independent registered public accounting firm for
fi scal 2016.
K. J. Powell
Chairman of the Board
and Chief Executive Offi cer
D. L. Mulligan
Executive Vice President
and Chief Financial
Offi cer
July 6, 2015
Th e Board of Directors and Stockholders
General Mills, Inc.:
We have audited the accompanying consolidated bal-
ance sheets of General Mills, Inc. and subsidiaries as of
May 31, 2015 and May 25, 2014, and the related consol-
idated statements of earnings, comprehensive income,
total equity and redeemable interest, and cash fl ows for
each of the fi scal years in the three-year period ended
May 31, 2015. In connection with our audits of the
consolidated fi nancial statements, we have audited the
accompanying fi nancial statement schedule. We also
have audited General Mills, Inc.’s internal control over
fi nancial reporting as of May 31, 2015, based on criteria
established in Internal Control – Integrated Framework
(2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).
General Mills, Inc.’s management is responsible for
these consolidated fi nancial statements and fi nancial
statement schedule, for maintaining eff ective internal
control over fi nancial reporting, and for its assessment
of the eff ectiveness of internal control over fi nancial
reporting, included in Management’s Report on Internal
Control over Financial Reporting. Our responsibility is
to express an opinion on these consolidated fi nancial
statements and fi nancial statement schedule and an
opinion on the Company’s internal control over fi nan-
cial reporting based on our audits.
We conducted our audits in accordance with the
standards of the Public Company Accounting Oversight
Board (United States). Th ose standards require that we
plan and perform the audits to obtain reasonable assur-
ance about whether the fi nancial statements are free of
material misstatement and whether eff ective internal
control over fi nancial reporting was maintained in all
material respects. Our audits of the consolidated fi nan-
cial statements included examining, on a test basis, evi-
dence supporting the amounts and disclosures in the
fi nancial statements, assessing the accounting princi-
ples used and signifi cant estimates made by manage-
ment, and evaluating the overall fi nancial statement
presentation. Our audit of internal control over fi nan-
cial reporting included obtaining an understanding
of internal control over fi nancial reporting, assessing
the risk that a material weakness exists, and testing
and evaluating the design and operating eff ectiveness
2015 ANNUAL REPORT
37
of internal control based on the assessed risk. Our
audits also included performing such other procedures
as we considered necessary in the circumstances. We
believe that our audits provide a reasonable basis for
our opinions.
A company’s internal control over fi nancial reporting
is a process designed to provide reasonable assurance
regarding the reliability of fi nancial reporting and the
preparation of fi nancial statements for external pur-
poses in accordance with generally accepted account-
ing principles. A company’s internal control over
fi nancial reporting includes those policies and proce-
dures that (1) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly refl ect
the transactions and dispositions of the assets of the
Company; (2) provide reasonable assurance that trans-
actions are recorded as necessary to permit preparation
of fi nancial statements in accordance with generally
accepted accounting principles, and that receipts and
expenditures of the Company are being made only in
accordance with authorizations of management and
directors of the Company; and (3) provide reasonable
assurance regarding prevention or timely detection
of unauthorized acquisition, use, or disposition of the
Company’s assets that could have a material eff ect on
the fi nancial statements.
Because of its inherent limitations, internal control
over fi nancial reporting may not prevent or detect
misstatements. Also, projections of any evaluation
of eff ectiveness to future periods are subject to the
risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
In our opinion, the consolidated fi nancial statements
referred to above present fairly, in all material respects,
the fi nancial position of General Mills, Inc. and subsid-
iaries as of May 31, 2015 and May 25, 2014, and the
results of their operations and their cash fl ows for each
of the fi scal years in the three-year period ended May
31, 2015, in conformity with U.S. generally accepted
accounting principles. Also in our opinion, the accom-
panying fi nancial statement schedule, when considered
in relation to the basic consolidated fi nancial state-
ments taken as a whole, presents fairly, in all material
respects, the information set forth therein. Also in our
opinion, General Mills, Inc. maintained, in all material
respects, eff ective internal control over fi nancial report-
ing as of May 31, 2015, based on criteria established
in Internal Control – Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations
of the Treadway Commission.
Minneapolis, Minnesota
July 6, 2015
38
GENERAL MILLS
Consolidated Statements of Earnings
GENERAL MILLS, INC. AND SUBSIDIARIES
In Millions, Except per Share Data
Net sales
Cost of sales
Selling, general, and administrative expenses
Divestiture (gain)
Restructuring, impairment, and other exit costs
Operating profi t
Interest, net
Fiscal Year
2015
2014
2013
$ 17,630.3
$ 17,909.6
$ 17,774.1
11,681.1
11,539.8
11,350.2
3,328.0
3,474.3
3,552.3
—
543.9
(65.5)
3.6
—
19.8
2,077.3
2,957.4
2,851.8
315.4
302.4
316.9
Earnings before income taxes and aft er-tax earnings from joint ventures
1,761.9
2,655.0
2,534.9
Income taxes
Aft er-tax earnings from joint ventures
586.8
84.3
883.3
89.6
741.2
98.8
Net earnings, including earnings attributable to redeemable and noncontrolling interests
1,259.4
1,861.3
1,892.5
Net earnings attributable to redeemable and noncontrolling interests
Net earnings attributable to General Mills
Earnings per share - basic
Earnings per share - diluted
Dividends per share
See accompanying notes to consolidated fi nancial statements.
38.1
36.9
37.3
$ 1,221.3
$ 1,824.4
$ 1,855.2
$
$
$
2.02
1.97
1.67
$
$
$
2.90
2.83
1.55
$
$
$
2.86
2.79
1.32
2015 ANNUAL REPORT
39
Consolidated Statements of
Comprehensive Income
GENERAL MILLS, INC. AND SUBSIDIARIES
In Millions
Net earnings, including earnings attributable to
redeemable and noncontrolling interests
Other comprehensive income (loss), net of tax:
Foreign currency translation
Net actuarial income (loss)
Other fair value changes:
Securities
Hedge derivatives
Reclassifi cation to earnings:
Hedge derivatives
Amortization of losses and prior service costs
Other comprehensive income (loss), net of tax
Total comprehensive income
Comprehensive income (loss) attributable to redeemable
and noncontrolling interests
Comprehensive income attributable to General Mills
See accompanying notes to consolidated fi nancial statements.
Fiscal Year
2015
2014
2013
$ 1,259.4
$ 1,861.3 $
1,892.5
(957.9)
(358.4)
(11.3)
206.0
0.8
4.1
0.3
5.0
4.9
(4.6)
105.1
107.6
(1,201.4)
303.0
58.0
2,164.3
0.8
45.0
0.8
24.6
12.2
98.8
182.2
2,074.7
(192.9)
94.9
61.1
$
250.9
$ 2,069.4
$
2,013.6
40
GENERAL MILLS
Consolidated Balance Sheets
GENERAL MILLS, INC. AND SUBSIDIARIES
In Millions, Except Par Value
ASSETS
Current assets:
Cash and cash equivalents
Receivables
Inventories
Deferred income taxes
Prepaid expenses and other current assets
Total current assets
Land, buildings, and equipment
Goodwill
Other intangible assets
Other assets
Total assets
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
Current portion of long-term debt
Notes payable
Other current liabilities
Total current liabilities
Long-term debt
Deferred income taxes
Other liabilities
Total liabilities
Redeemable interest
Stockholders’ equity:
Common stock, 754.6 shares issued, $0.10 par value
Additional paid-in capital
Retained earnings
Common stock in treasury, at cost, shares of 155.9 and 142.3
Accumulated other comprehensive loss
Total stockholders’ equity
Noncontrolling interests
Total equity
Total liabilities and equity
See accompanying notes to consolidated fi nancial statements.
May 31, 2015 May 25, 2014
$
334.2 $
867.3
1,386.7
1,483.6
1,540.9
1,559.4
100.1
423.8
74.1
409.1
3,785.7
4,393.5
3,783.3
3,941.9
8,874.9
4,677.0
8,650.5
5,014.3
843.6
1,145.5
$ 21,964.5 $ 23,145.7
$ 1,684.0 $ 1,611.3
1,000.4
1,250.6
615.8
1,111.7
1,589.9
1,449.9
4,890.1
5,423.5
7,607.7
6,423.5
1,550.3
1,666.0
1,744.8
1,643.2
15,792.9
15,156.2
778.9
984.1
75.5
75.5
1,296.7
1,231.8
11,990.8
11,787.2
(6,055.6)
(5,219.4)
(2,310.7)
4,996.7
(1,340.3)
6,534.8
396.0
470.6
5,392.7
7,005.4
$ 21,964.5 $ 23,145.7
2015 ANNUAL REPORT
41
Consolidated Statements of Total Equity
and Redeemable Interest
GENERAL MILLS, INC. AND SUBSIDIARIES
$.10 Par Value Common Stock
(One Billion Shares Authorized)
Issued
Treasury
Par
Shares Amount
Additional
Paid-In
Capital
Shares
Amount
Accumulated
Other
Retained Comprehensive Noncontrolling
Interests
Earnings
Loss
Total Redeemable
Interest
Equity
754.6
$75.5 $1,308.4 (106.1) $(3,177.0) $ 9,958.5
1,855.2
$(1,743.7)
158.4
$461.0 $6,882.7
18.3 2,031.9
$ 847.8
42.8
(1,111.1)
(30.0)
(24.2)
(1,014.9)
(38.6)
16.5
504.7
(80.5)
100.4
(93.1)
(1,111.1)
(1,044.9)
466.1
(80.5)
100.4
(93.1)
93.1
(23.0)
(23.0)
(16.2)
754.6
75.5
1,166.6
(113.8) (3,687.2) 10,702.6
(1,585.3)
456.3 7,128.5
967.5
1,824.4
245.0
24.9
2,094.3
70.0
30.0
(35.6) (1,775.3)
13.8
7.1
243.1
(739.8)
(91.3)
108.5
4.2
(739.8)
(1,745.3)
256.9
(91.3)
108.5
4.2
17.6
17.6
(4.2)
754.6
75.5
1,231.8
(142.3) (5,219.4) 11,787.2
(1,340.3)
(28.2)
470.6
(28.2)
7,005.4
(49.2)
984.1
1,221.3
(970.4)
(70.0)
180.9
(122.9)
(22.3) (1,161.9)
(1,017.7)
(38.1)
8.7
325.7
(80.8)
111.1
83.2
(10.5)
(1,017.7)
(1,161.9)
287.6
(80.8)
111.1
20.7
0.6
83.2
20.7
(9.9)
(83.2)
(25.9)
(25.9)
0.9
In Millions, Except per Share Data
Balance as of May 27, 2012
Total comprehensive income
Cash dividends declared
($1.70 per share)
Shares purchased
Stock compensation plans (includes
income tax benefi ts of $103.0)
Unearned compensation related
to restricted stock unit awards
Earned compensation
Increase in redemption
value of redeemable
interest
Distributions to noncontrolling
interest holders
Balance as of May 26, 2013
Total comprehensive
income
Cash dividends declared
($1.17 per share)
Shares purchased
Stock compensation plans (includes
income tax benefi ts of $69.3)
Unearned compensation related
to restricted stock unit awards
Earned compensation
Decrease in redemption
value of redeemable interest
Addition of noncontrolling interest
Distributions to noncontrolling
interest holders
Balance as of May 25, 2014
Total comprehensive
income (loss)
Cash dividends declared
($1.67 per share)
Shares purchased
Stock compensation plans (includes
income tax benefi ts of $74.6)
Unearned compensation related
to restricted stock unit awards
Earned compensation
Decrease in redemption
value of redeemable
interest
Addition of noncontrolling interest
Acquisition of interest in subsidiary
Distributions to redeemable and
noncontrolling interest holders
Balance as of May 31, 2015
754.6
$75.5 $1,296.7 (155.9) $(6,055.6) $11,990.8
$(2,310.7)
$396.0 $5,392.7
$778.9
See accompanying notes to consolidated fi nancial statements.
42
GENERAL MILLS
Consolidated Statements of Cash Flows
GENERAL MILLS, INC. AND SUBSIDIARIES
In Millions
Cash Flows - Operating Activities
Net earnings, including earnings attributable to redeemable and noncontrolling interests
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization
Aft er-tax earnings from joint ventures
Distributions of earnings from joint ventures
Stock-based compensation
Deferred income taxes
Tax benefi t on exercised options
Pension and other postretirement benefi t plan contributions
Pension and other postretirement benefi t plan costs
Divestiture (gain)
Restructuring, impairment, and other exit costs
Changes in current assets and liabilities, excluding the eff ects of acquisitions
Other, net
Net cash provided by operating activities
Cash Flows - Investing Activities
Purchases of land, buildings, and equipment
Acquisitions, net of cash acquired
Investments in affi liates, net
Proceeds from disposal of land, buildings, and equipment
Proceeds from divestiture
Exchangeable note
Other, net
Net cash used by investing activities
Cash Flows - Financing Activities
Change in notes payable
Issuance of long-term debt
Payment of long-term debt
Proceeds from common stock issued on exercised options
Tax benefi t on exercised options
Purchases of common stock for treasury
Dividends paid
Addition of noncontrolling interest
Distributions to noncontrolling and redeemable interest holders
Other, net
Net cash used by fi nancing activities
Eff ect of exchange rate changes on cash and cash equivalents
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents - beginning of year
Cash and cash equivalents - end of year
Cash Flow from Changes in Current Assets and Liabilities, excluding the eff ects of acquisitions:
Receivables
Inventories
Prepaid expenses and other current assets
Accounts payable
Other current liabilities
Changes in current assets and liabilities
See accompanying notes to consolidated fi nancial statements.
Fiscal Year
2015
2014
2013
$ 1,259.4
$ 1,861.3
$ 1,892.5
588.3
(84.3)
72.6
106.4
25.3
(74.6)
(49.5)
91.3
—
531.1
214.7
(137.9)
2,542.8
(712.4)
(822.3)
(102.4)
11.0
—
27.9
(4.0)
(1,602.2)
(509.8)
2,253.2
(1,145.8)
163.7
74.6
(1,161.9)
(1,017.7)
—
(25.0)
(16.1)
(1,384.8)
(88.9)
(533.1)
867.3
334.2
$
$
$
6.8
(24.2)
(50.5)
145.8
136.8
214.7
585.4
(89.6)
90.5
108.5
172.5
(69.3)
(49.7)
124.1
(65.5)
(18.8)
(32.2)
(76.2)
2,541.0
(663.5)
—
(54.9)
6.6
121.6
29.3
(0.9)
(561.8)
572.9
1,673.0
(1,444.8)
108.1
69.3
(1,745.3)
(983.3)
17.6
(77.4)
(14.2)
(1,824.1)
(29.2)
125.9
741.4
867.3
$
$
(41.0)
(88.3)
10.5
191.5
(104.9)
(32.2)
$
588.0
(98.8)
115.7
100.4
81.8
(103.0)
(223.2)
131.2
—
(60.2)
471.1
30.5
2,926.0
(613.9)
(898.0)
(40.4)
24.2
—
16.2
(3.5)
(1,515.4)
(44.5)
1,001.1
(542.3)
300.8
103.0
(1,044.9)
(867.6)
—
(39.2)
(6.6)
(1,140.2)
(0.2)
270.2
471.2
$ 741.4
$
(44.6)
18.7
(64.3)
263.6
297.7
$ 471.1
2015 ANNUAL REPORT
43
Notes to Consolidated Financial Statements
GENERAL MILLS, INC. AND SUBSIDIARIES
NOTE 1. BASIS OF PRESENTATION AND
RECLASSIFICATIONS
Shipping costs associated with the distribution of
fi nished product to our customers are recorded as cost
of sales, and are recognized when the related fi nished
product is shipped to and accepted by the customer.
Basis of Presentation Our Consolidated Financial
Statements include the accounts of General Mills, Inc.
and all subsidiaries in which we have a controlling
financial interest. Intercompany transactions and
accounts, including any noncontrolling and redeemable
interests’ share of those transactions, are eliminated in
consolidation.
Our fi scal year ends on the last Sunday in May. Fiscal
year 2015 consisted of 53 weeks, while fi scal years 2014
and 2013 consisted of 52 weeks.
Change in Reporting Period As part of a long-term
plan to conform the fi scal year ends of all our opera-
tions, in fi scal 2013 we changed the reporting period of
Europe and Australia within our International segment
from an April fi scal year end to a May fi scal year end
to match our fi scal calendar. Accordingly, in the year
of change, our results included 13 months of results
from the aff ected operations compared to 12 months in
following fi scal years. Th e impact of these changes was
not material to our consolidated results of operations.
Our Yoplait SAS, Yoplait Marques SNC, Yoki Alimentos
S.A. (Yoki), and India businesses remain on an April
fi scal year end.
Certain reclassifi cations to our previously reported
fi nancial information have been made to conform to
the current period presentation.
NOTE 2. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Cash and Cash Equivalents We consider all invest-
ments purchased with an original maturity of three
months or less to be cash equivalents.
Inventories All inventories in the United States other
than grain are valued at the lower of cost, using the
last-in, fi rst-out (LIFO) method, or market. Grain inven-
tories and all related cash contracts and derivatives are
valued at market with all net changes in value recorded
in earnings currently.
Inventories outside of the United States are generally
valued at the lower of cost, using the fi rst-in, fi rst-out
(FIFO) method, or market.
Land, Buildings, Equipment, and Depreciation Land
is recorded at historical cost. Buildings and equipment,
including capitalized interest and internal engineering
costs, are recorded at cost and depreciated over esti-
mated useful lives, primarily using the straight-line
method. Ordinary maintenance and repairs are charged
to cost of sales. Buildings are usually depreciated over
40 to 50 years, and equipment, furniture, and soft ware
are usually depreciated over 3 to 10 years. Fully depre-
ciated assets are retained in buildings and equipment
until disposal. When an item is sold or retired, the
accounts are relieved of its cost and related accumu-
lated depreciation and the resulting gains and losses,
if any, are recognized in earnings. As of May 31, 2015,
assets held for sale were insignifi cant.
Long-lived assets are reviewed for impairment when-
ever events or changes in circumstances indicate that
the carrying amount of an asset (or asset group) may
not be recoverable. An impairment loss would be recog-
nized when estimated undiscounted future cash fl ows
from the operation and disposition of the asset group
are less than the carrying amount of the asset group.
Asset groups have identifi able cash fl ows and are largely
independent of other asset groups. Measurement of an
impairment loss would be based on the excess of the
carrying amount of the asset group over its fair value.
Fair value is measured using a discounted cash fl ow
model or independent appraisals, as appropriate.
Goodwill and Other Intangible Assets Goodwill is not
subject to amortization and is tested for impairment
annually and whenever events or changes in circum-
stances indicate that impairment may have occurred.
Impairment testing is performed for each of our report-
ing units. We compare the carrying value of a reporting
unit, including goodwill, to the fair value of the unit.
Carrying value is based on the assets and liabilities
associated with the operations of that reporting unit,
which oft en requires allocation of shared or corporate
items among reporting units. If the carrying amount
of a reporting unit exceeds its fair value, we revalue
all assets and liabilities of the reporting unit, excluding
goodwill, to determine if the fair value of the net assets
is greater than the net assets including goodwill. If the
4 4
GENERAL MILLS
fair value of the net assets is less than the carrying
amount of net assets including goodwill, impairment
has occurred. Our estimates of fair value are deter-
mined based on a discounted cash fl ow model. Growth
rates for sales and profi ts are determined using inputs
from our long-range planning process. We also make
estimates of discount rates, perpetuity growth assump-
tions, market comparables, and other factors.
We evaluate the useful lives of our other intangible
assets, mainly brands, to determine if they are fi nite or
indefi nite-lived. Reaching a determination on useful life
requires signifi cant judgments and assumptions regard-
ing the future eff ects of obsolescence, demand, compe-
tition, other economic factors (such as the stability of
the industry, known technological advances, legislative
action that results in an uncertain or changing regula-
tory environment, and expected changes in distribution
channels), the level of required maintenance expendi-
tures, and the expected lives of other related groups of
assets. Intangible assets that are deemed to have defi -
nite lives are amortized on a straight-line basis, over
their useful lives, generally ranging from 4 to 30 years.
Our indefi nite-lived intangible assets, mainly intan-
gible assets primarily associated with the Pillsbury,
Totino’s, Progresso, Green Giant, Yoplait, Old El Paso,
Yoki, Häagen-Dazs, and Annie’s brands, are also tested
for impairment annually and whenever events or
changes in circumstances indicate that their carrying
value may not be recoverable. Our estimate of the fair
value of the brands is based on a discounted cash fl ow
model using inputs which included projected revenues
from our long-range plan, assumed royalty rates that
could be payable if we did not own the brands, and a
discount rate.
Our fi nite-lived intangible assets, primarily acquired
franchise agreements and customer relationships, are
reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of
an asset may not be recoverable. An impairment loss
would be recognized when estimated undiscounted
future cash fl ows from the operation and disposition
of the asset are less than the carrying amount of the
asset. Assets generally have identifi able cash fl ows and
are largely independent of other assets. Measurement
of an impairment loss would be based on the excess of
the carrying amount of the asset over its fair value. Fair
value is measured using a discounted cash fl ow model
or other similar valuation model, as appropriate.
Investments in Unconsolidated Joint Ventures Our
investments in companies over which we have the abil-
ity to exercise signifi cant infl uence are stated at cost
plus our share of undistributed earnings or losses. We
receive royalty income from certain joint ventures,
incur various expenses (primarily research and develop-
ment), and record the tax impact of certain joint ven-
ture operations that are structured as partnerships. In
addition, we make advances to our joint ventures in
the form of loans or capital investments. We also sell
certain raw materials, semi-fi nished goods, and fi nished
goods to the joint ventures, generally at market prices.
In addition, we assess our investments in our joint
ventures if we have reason to believe an impairment
may have occurred including, but not limited to, ongo-
ing operating losses, projected decreases in earn-
ings, increases in the weighted average cost of capital
or signifi cant business disruptions. Th e signifi cant
assumptions used to estimate fair value include revenue
growth and profi tability, royalty rates, capital spend-
ing, depreciation and taxes, foreign currency exchange
rates, and a discount rate. By their nature, these pro-
jections and assumptions are uncertain. If we were to
determine the current fair value of our investment was
less than the carrying value of the investment, then
we would assess if the shortfall was of a temporary or
permanent nature and write down the investment to
its fair value if we concluded the impairment is other
than temporary.
Redeemable Interest We have a 51 percent controlling
interest in Yoplait SAS, a consolidated entity. Sodiaal
International (Sodiaal) holds the remaining 49 percent
interest in Yoplait SAS. Sodiaal has the ability to put a
limited portion of its redeemable interest to us at fair
value through a maximum term expiring December
2020. Th is put option requires us to classify Sodiaal’s
interest as a redeemable interest outside of equity on
our Consolidated Balance Sheets for as long as the put
is exercisable by Sodiaal. When the put is no longer
exercisable, the redeemable interest will be reclassifi ed
to noncontrolling interests on our Consolidated Balance
Sheets. We adjust the value of the redeemable interest
through additional paid-in capital on our Consolidated
Balance Sheets quarterly to the redeemable interest’s
redemption value, which approximates its fair value.
During the third quarter of fi scal 2015, we adjusted the
redeemable interest’s redemption value based on a dis-
counted cash fl ow model. Th e signifi cant assumptions
2015 ANNUAL REPORT
45
used to estimate the redemption value include projected
revenue growth and profi tability from our long-range
plan, capital spending, depreciation, taxes, foreign cur-
rency exchange rates, and a discount rate.
other supplies attributable to time spent on R&D activ-
ities. Other costs include depreciation and maintenance
of research facilities, including assets at facilities that
are engaged in pilot plant activities.
Revenue Recognition We recognize sales revenue when
the shipment is accepted by our customer. Sales include
shipping and handling charges billed to the customer
and are reported net of consumer coupon redemption,
trade promotion and other costs, including estimated
allowances for returns, unsalable product, and prompt
pay discounts. Sales, use, value-added, and other excise
taxes are not recognized in revenue. Coupons are
recorded when distributed, based on estimated redemp-
tion rates. Trade promotions are recorded based on esti-
mated participation and performance levels for off ered
programs at the time of sale. We generally do not allow
a right of return. However, on a limited case-by-case
basis with prior approval, we may allow customers
to return product. In limited circumstances, product
returned in saleable condition is resold to other cus-
tomers or outlets. Receivables from customers gener-
ally do not bear interest. Terms and collection patterns
vary around the world and by channel. Th e allowance
for doubtful accounts represents our estimate of prob-
able non-payments and credit losses in our existing
receivables, as determined based on a review of past
due balances and other specifi c account data. Account
balances are written off against the allowance when
we deem the amount is uncollectible.
Environmental Environmental costs relating to existing
conditions caused by past operations that do not contrib-
ute to current or future revenues are expensed. Liabilities
for anticipated remediation costs are recorded on an
undiscounted basis when they are probable and reason-
ably estimable, generally no later than the completion of
feasibility studies or our commitment to a plan of action.
Advertising Production Costs We expense the produc-
tion costs of advertising the fi rst time that the adver-
tising takes place.
Research and Development All expenditures for
research and development (R&D) are charged against
earnings in the year incurred. R&D includes expen-
ditures for new product and manufacturing process
innovation, and the annual expenditures are comprised
primarily of internal salaries, wages, consulting, and
Foreign Currency Translation For all significant
foreign operations, the functional currency is the
local currency. Assets and liabilities of these opera-
tions are translated at the period-end exchange rates.
Income statement accounts are translated using the
average exchange rates prevailing during the period.
Translation adjustments are refl ected within accumu-
lated other comprehensive loss (AOCI) in stockholders’
equity. Gains and losses from foreign currency transac-
tions are included in net earnings for the period, except
for gains and losses on investments in subsidiaries for
which settlement is not planned for the foreseeable
future and foreign exchange gains and losses on instru-
ments designated as net investment hedges. Th ese
gains and losses are recorded in AOCI.
Derivative Instruments All derivatives are recognized
on the Consolidated Balance Sheets at fair value based
on quoted market prices or our estimate of their fair
value, and are recorded in either current or noncurrent
assets or liabilities based on their maturity. Changes in
the fair values of derivatives are recorded in net earnings
or other comprehensive income, based on whether the
instrument is designated and eff ective as a hedge trans-
action and, if so, the type of hedge transaction. Gains or
losses on derivative instruments reported in AOCI are
reclassifi ed to earnings in the period the hedged item
aff ects earnings. If the underlying hedged transaction
ceases to exist, any associated amounts reported in AOCI
are reclassifi ed to earnings at that time. Any ineff ective-
ness is recognized in earnings in the current period.
Stock-based Compensation We generally measure
compensation expense for grants of restricted stock
units using the value of a share of our stock on the
date of grant. We estimate the value of stock option
grants using a Black-Scholes valuation model. Stock
compensation is recognized straight line over the vest-
ing period. Our stock compensation expense is recorded
in selling, general and administrative (SG&A) expenses
and cost of sales in the Consolidated Statements of
Earnings and allocated to each reportable segment in
our segment results.
46
GENERAL MILLS
NOTE 3. ACQUISITION AND DIVESTITURE
On October 21, 2014, we acquired Annie’s, Inc. (Annie’s),
a publicly traded food company headquartered in
Berkeley, California, for an aggregate purchase price
of $821.2 million, which we funded by issuing debt.
We consolidated Annie’s into our Consolidated Balance
Sheets and recorded goodwill of $589.8 million, an
indefi nite lived intangible asset for the Annie’s brand of
$244.5 million, and a fi nite lived customer relationship
asset of $23.9 million. Th e pro forma eff ects of this
acquisition were not material.
During the fourth quarter of fi scal 2014, we sold
certain grain elevators in our U.S. Retail segment for
$124.0 million in cash and recorded a pre-tax gain of
$65.5 million.
Certain equity-based compensation plans contain
provisions that accelerate vesting of awards upon
retirement, termination, or death of eligible employees
and directors. We consider a stock-based award to be
vested when the employee’s retention of the award is
no longer contingent on providing subsequent service.
Accordingly, the related compensation cost is recog-
nized immediately for awards granted to retirement-
eligible individuals or over the period from the grant
date to the date retirement eligibility is achieved, if less
than the stated vesting period.
We report the benefi ts of tax deductions in excess of
recognized compensation cost as a fi nancing cash fl ow,
thereby reducing net operating cash fl ows and increas-
ing net fi nancing cash fl ows.
Defined Benefit Pension, Other Postretirement
Benefi t, and Postemployment Benefi t Plans We spon-
sor several domestic and foreign defi ned benefi t plans
to provide pension, health care, and other welfare ben-
efi ts to retired employees. Under certain circumstances,
we also provide accruable benefi ts to former or inactive
employees in the United States and Canada and mem-
bers of our Board of Directors, including severance and
certain other benefi ts payable upon death. We recog-
nize an obligation for any of these benefi ts that vest
or accumulate with service. Postemployment benefi ts
that do not vest or accumulate with service (such as
severance based solely on annual pay rather than years
of service) are charged to expense when incurred. Our
postemployment benefi t plans are unfunded.
We recognize the underfunded or overfunded status
of a defi ned benefi t pension plan as an asset or liability
and recognize changes in the funded status in the year
in which the changes occur through AOCI.
Use of Estimates Preparing our Consolidated Financial
Statements in conformity with accounting principles
generally accepted in the United States requires us to
make estimates and assumptions that aff ect reported
amounts of assets and liabilities, disclosures of contin-
gent assets and liabilities at the date of the fi nancial
statements, and the reported amounts of revenues and
expenses during the reporting period. Th ese estimates
include our accounting for promotional expenditures,
valuation of long-lived assets, intangible assets, redeem-
able interest, stock-based compensation, income taxes,
and defi ned benefi t pension, other postretirement ben-
efi t and postemployment benefi t plans. Actual results
could diff er from our estimates.
2015 ANNUAL REPORT
47
NOTE 4. RESTRUCTURING, IMPAIRMENT, AND
OTHER EXIT COSTS
Intangible Asset Impairment In fiscal 2015, we
recorded a $260 million charge related to the impair-
ment of our Green Giant brand intangible asset in
restructuring, impairment, and other exit costs. See
Note 6 for additional information.
Restructuring Initiatives We view our restructuring
activities as actions that help us meet our long-term
growth targets. Activities we undertake must meet
internal rate of return and net present value targets.
Each restructuring action normally takes one to two
years to complete. At completion (or as each major stage
is completed in the case of multi-year programs), the
project begins to deliver cash savings and/or reduced
depreciation. Th ese activities result in various restruc-
turing costs, including asset write-off s, exit charges
including severance, contract termination fees, and
decommissioning and other costs. Accelerated depre-
ciation associated with restructured assets, as used in
the context of our disclosures regarding restructuring
activity, refers to the increase in depreciation expense
caused by shortening the useful life or updating the
salvage value of depreciable fi xed assets to coincide
with the end of production under an approved restruc-
turing plan. Any impairment of the asset is recognized
immediately in the period the plan is approved.
We are currently pursuing several multi-year restruc-
turing initiatives designed to increase our effi ciency
and focus our business behind our key growth strat-
egies. Charges recorded in fi scal 2015 related to these
initiatives were as follows:
Expense, in Millions
Project Catalyst
Project Century
Combination of certain
operational facilities
Charges associated with
restructuring actions
previously announced
Total
Severance
$121.5
44.3
Asset
Write-off s
Pension
Related
Accelerated
Depreciation
$12.3
42.3
$ 6.6
31.2
$ —
53.1
Other
$ 8.0
10.9
Total
$148.4
181.8
13.0
0.7
—
—
0.2
13.9
(0.6)
$178.2
—
$55.3
—
$37.8
—
$53.1
—
$19.1
(0.6)
$343.5
During the second quarter of fi scal 2015, we approved
Project Catalyst, a restructuring plan to increase orga-
nizational eff ectiveness and reduce overhead expense.
In connection with this project, we expect to eliminate
approximately 800 positions primarily in the United
States. We expect to incur approximately $148 mil-
lion of net expenses relating to these actions of which
approximately $118 million will be cash. Th ese actions
were largely completed in fi scal 2015.
Project Century (Century) is a review of our North
American manufacturing and distribution network to
streamline operations and identify potential capacity
reductions. In addition to the actions taken at certain
facilities described below, we incurred $17.2 million of
restructuring charges in fi scal 2015 related to Century
of which $6.0 million was cash.
As part of Century, we approved actions in the
third quarter of fi scal 2015 to reduce our refrigerated
dough capacity and exit our Midland, Ontario, Canada
and New Albany, Indiana facilities, which support our
U.S. Retail, International, and Convenience Stores and
Foodservice supply chains. Th e Midland action will
aff ect approximately 100 positions, and we expect to
incur approximately $21 million of net expenses relat-
ing to this action, of which approximately $12 million
will be cash. We recorded $6.5 million of restructuring
charges relating to this action in fi scal 2015. Th e New
Albany action will aff ect approximately 400 positions,
and we expect to incur approximately $84 million of
net expenses relating to this action of which approxi-
mately $44 million will be cash. We recorded $51.3 mil-
lion of restructuring charges relating to this action in
fi scal 2015. We anticipate these actions will be com-
pleted by the end of fi scal 2018.
During the second quarter of fi scal 2015, we approved
a restructuring plan to consolidate yogurt manufac-
turing capacity and exit our Methuen, Massachusetts
facility in our U.S. Retail and Convenience Stores and
48
GENERAL MILLS
Foodservice supply chains as part of Century. Th is
action will affect approximately 250 positions. We
recorded $43.6 million of restructuring charges in fi scal
2015. We expect to incur approximately $69 million of
net expenses relating to this action of which approxi-
mately $18 million will be cash. We expect this action
to be completed by the end of fi scal 2016.
Also as part of Century, during the second quarter of
fi scal 2015, we approved a restructuring plan to elim-
inate excess cereal and dry mix capacity and exit our
Lodi, California facility in our U.S. Retail supply chain.
Th is action will aff ect approximately 430 positions. We
recorded $63.2 million of restructuring charges in fi scal
2015. We expect to incur approximately $102 million of
net expenses relating to this action of which approxi-
mately $41 million will be cash. We expect this action
to be completed by the end of fi scal 2016.
During the fi rst quarter of fi scal 2015, we approved
a plan to combine certain Yoplait and General Mills
operational facilities within our International segment
to increase effi ciencies and reduce costs. Th is action
will aff ect approximately 240 positions. We recorded
$13.9 million of restructuring charges in fi scal 2015.
We expect to incur approximately $15 million of net
expenses relating to this action and to make approx-
imately $14 million in cash payments. We expect this
action to be completed by the end of fi scal 2016.
In fi scal 2015, we paid $63.6 million in cash related to
restructuring initiatives.
In addition to restructuring charges, we expect to
incur approximately $65 million of additional proj-
ect-related costs, which will be recorded in cost of sales,
all of which will be cash. We recorded $13.2 million in
cost of sales for project-related costs in fi scal 2015.
Subsequent to our fi scal 2015 year end, in the fi rst
quarter of fi scal 2016, we approved Project Compass, a
restructuring plan designed to enable our International
segment to accelerate long-term growth through
increased organizational effectiveness and reduced
administrative expense. In connection with this ini-
tiative, we expect to eliminate approximately 675 to
725 positions. We expect to record total restructur-
ing charges of approximately $57 to $62 million, pri-
marily reflecting one-time employee termination
benefi ts, of which approximately $54 to $57 million
will be recorded in the fi rst quarter of fi scal 2016. We
expect approximately $54 to $59 million of the total
expense will result in future cash expenditures. Th ese
restructuring actions are expected to be completed by
the end of fi scal 2017.
Restructuring charges and project-related costs are
classifi ed in our Consolidated Statements of Earnings
as follows:
In Millions
Cost of sales
Restructuring, impairment,
and other exit costs
Total restructuring charges
Project-related costs classifi ed
Fiscal Year
2015
2014
2013
$ 59.6
$ —
$ —
283.9
343.5
3.6
3.6
19.8
19.8
in cost of sales
$ 13.2
$ —
$ —
In fi scal 2014, we recorded restructuring, impairment,
and other exit costs pursuant to approved plans as
follows:
Expense, in Millions
Charges associated with restructuring
actions previously announced
Total
$3.6
$3.6
In fi scal 2014, the restructuring charge related to
a productivity and cost savings plan approved in the
fourth quarter of fiscal 2012. These restructuring
actions were completed in fi scal 2014. In fi scal 2014,
we paid $22.4 million in cash related to restructuring
actions.
In fi scal 2013, we recorded restructuring, impairment,
and other exit costs pursuant to approved plans as
follows:
Expense, in Millions
Charges associated with restructuring
actions previously announced
Total
$19.8
$19.8
In fi scal 2013, the restructuring charge was primarily
related to a productivity and cost savings plan approved
in the fourth quarter of fi scal 2012, consisting of $10.6
million of employee severance expense and other exit
costs of $8.0 million. In fi scal 2013, we paid $79.9 mil-
lion in cash related to restructuring actions.
2015 ANNUAL REPORT
4 9
Th e roll forward of our restructuring and other exit
cost reserves, included in other current liabilities, is as
follows:
Results from our CPW and HDJ joint ventures are
reported for the 12 months ended March 31.
Joint venture related balance sheet activity follows:
In Millions
Cumulative investments
Goodwill and other intangibles
Aggregate advances included in
May 31,
2015
May 25,
2014
$530.6
$ 507.5
465.1
563.2
cumulative investments
390.3
332.0
Joint venture earnings and cash fl ow activity follows:
Fiscal Year
In Millions
2015
2014
2013
Sales to joint ventures
$ 11.6
$ 12.1 $ 12.3
Net advances
Dividends received
102.4
54.9
36.7
72.6
90.5
115.7
Summary combined fi nancial information for the
joint ventures on a 100 percent basis follows:
In Millions
Net sales:
CPW
HDJ
Total net sales
Gross margin
Fiscal Year
2015
2014
2013
$1,894.5 $2,107.9 $2,132.2
370.2
386.9
420.5
2,264.7 2,494.8 2,552.7
925.4 1,030.3 1,057.3
Earnings before income taxes
220.9
219.1
260.3
Earnings aft er income taxes
170.7
168.8
201.6
In Millions
Current assets
Noncurrent assets
Current liabilities
Noncurrent liabilities
May 31,
2015
May 25,
2014
$ 800.1 $ 1,031.1
962.1
1,484.8
1,129.8
1,779.0
118.2
110.3
In Millions
Reserve balance as of
Other
Exit
Severance Termination Costs
Contract
Total
May 27, 2012
$ 83.1
$ 2.7 $ 0.1 $ 85.9
2013 charges, including
foreign currency translation 10.6
—
—
10.6
Utilized in 2013
(74.2)
(2.7) (0.1) (77.0)
Reserve balance as of
May 26, 2013
19.5
—
—
19.5
2014 charges, including
foreign currency translation
6.4
Utilized in 2014
(22.4)
—
—
—
6.4
—
(22.4)
Reserve balance as of
May 25, 2014
2015 charges, including
3.5
—
—
3.5
foreign currency translation 176.4
0.6 8.1 185.1
Utilized in 2015
(61.3)
—
(6.5)
(67.8)
Reserve balance as of
May 31, 2015
$ 118.6
$ 0.6 $ 1.6 $ 120.8
Th e 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, the gain or loss on the sale of
restructured assets, and the write-off of spare parts) and
other periodic exit costs recognized as incurred, as those
items are not refl ected in our restructuring and other
exit cost reserves on our Consolidated Balance Sheets.
NOTE 5. INVESTMENTS IN UNCONSOLIDATED
JOINT VENTURES
We have a 50 percent equity interest in Cereal Partners
Worldwide (CPW), which manufactures and markets
ready-to-eat cereal products in more than 130 coun-
tries outside the United States and Canada. CPW also
markets cereal bars in several European countries and
manufactures private label cereals for customers in
the United Kingdom. We have guaranteed a portion of
CPW’s debt and its pension obligation in the United
Kingdom.
We also have a 50 percent equity interest in Häagen-
Dazs Japan, Inc. (HDJ). Th is joint venture manufactures
and markets Häagen-Dazs ice cream products and fro-
zen novelties.
50
GENERAL MILLS
NOTE 6. GOODWILL AND OTHER
INTANGIBLE ASSETS
Th e components of goodwill and other intangible assets
are as follows:
May 31,
2015
May 25,
2014
$ 8,874.9 $ 8,650.5
In Millions
Goodwill
Other intangible assets:
Intangible assets not subject
to amortization:
Brands and other
indefi nite-lived intangibles
4,262.1
4,504.1
Intangible assets subject to amortization:
Franchise agreements, customer
relationships, and other
fi nite-lived intangibles
Less accumulated amortization
Intangible assets subject to amortization
Other intangible assets
Total
544.0
(129.1)
414.9
4,677.0
630.7
(120.5)
510.2
5,014.3
$13,551.9 $13,664.8
Based on the carrying value of fi nite-lived intangi-
ble assets as of May 31, 2015, amortization expense
for each of the next fi ve fi scal years is estimated to be
approximately $28 million.
Th e changes in the carrying amount of goodwill for
fi scal 2013, 2014, and 2015 are as follows:
In Millions
U.S.
Joint
Retail International Foodservice Ventures
Convenience
Stores and
Total
—
—
—
14.4
32.7
18.3
28.2
378.8
Balance as of
May 27, 2012 $5,813.2 $ 989.9 $921.1 $458.3 $8,182.5
407.0
Acquisitions
Other activity,
primarily foreign
currency translation —
Balance as of
May 26, 2013 5,841.4 1,387.0
Divestiture
—
Other activity,
primarily foreign
currency translation —
Balance as of
May 25, 2014 5,829.2
Acquisition
589.8
Other activity,
primarily foreign
currency translation —
Balance as of
921.1 472.7 8,622.2
(12.2)
921.1 498.2 8,650.5
589.8
1,402.0
—
(12.2)
(268.7)
15.0
(96.7)
(365.4)
40.5
25.5
—
—
—
—
—
—
During the second quarter of fi scal 2015, we reor-
ganized certain reporting units within our U.S. Retail
operating segment. Our chief operating decision maker
continues to assess performance and make decisions
about resources to be allocated to our segments at the
U.S. Retail, International, and Convenience Stores and
Foodservice operating segment level.
We performed our fi scal 2015 impairment assess-
ment as of the fi rst day of the third quarter of fi s-
cal 2015, and determined there was no impairment of
goodwill for any of our reporting units as their related
fair values were substantially in excess of their carry-
ing values.
Th e changes in the carrying amount of other intangi-
ble assets for fi scal 2013, 2014, and 2015 are as follows:
In Millions
U.S.
Retail
International
Joint
Ventures
Total
Balance as of
May 27, 2012
Acquisitions
Other activity,
primarily foreign
currency translation
Balance as of
May 26, 2013
Other activity,
primarily foreign
currency translation
Balance as of
May 25, 2014
Acquisition
Impairment charge
Other activity,
primarily foreign
currency translation
Balance as of
May 31, 2015
$3,297.0
20.0
$1,344.1
290.7
$63.8 $4,704.9
310.7
—
(4.6)
3.4
0.7
(0.5)
3,312.4
1,638.2
64.5 5,015.1
(4.9)
3.6
0.5
(0.8)
3,307.5
268.4
(260.0)
1,641.8
—
—
65.0 5,014.3
268.4
(260.0)
—
—
(4.0)
(340.3)
(1.4)
(345.7)
$3,311.9
$1,301.5
$63.6 $4,677.0
We performed our fi scal 2015 impairment assessment
as of the fi rst day of the third quarter of fi scal 2015.
As of our assessment date, there was no impairment
of any of our indefi nite-lived intangible assets as their
related fair values were substantially in excess of the
carrying values, except for the Mountain High, Uncle
Toby’s, and Green Giant brands.
May 31, 2015 $6,419.0 $1,133.3 $921.1 $401.5 $8,874.9
2015 ANNUAL REPORT
51
As of the annual assessment date, excess fair value
above the carrying value of these brand assets was as
follows:
In Millions
Mountain High
Uncle Toby’s
Green Giant
Excess Fair
Value Above
Carrying
Value
3%
7%
13%
Carrying
Value
$ 35.4
$ 57.7
$ 425.9
At the end of the fourth quarter of fi scal 2015, we made
a strategic decision to redirect certain resources support-
ing our Green Giant business in our U.S. Retail segment to
other businesses within the segment. Th erefore, future
sales and profi tability projections in our long-range plan
for this business declined. As a result of this trigger-
ing event, and in connection with the preparation of this
report, we performed an interim impairment assessment
of the Green Giant brand intangible asset as of May 31,
2015, and determined that the fair value of the brand
asset no longer exceeded the carrying value of the asset.
Signifi cant assumptions used in that assessment included
our updated long- range cash fl ow projections for the
Green Giant business, an updated royalty rate, a weight-
ed-average cost of capital, and a tax rate. We recorded a
$260 million impairment charge in restructuring, impair-
ment, and other exit costs during the fourth quarter of
fi scal 2015 related to this asset.
We will continue to monitor these businesses for
potential impairment.
NOTE 7. FINANCIAL INSTRUMENTS, RISK
MANAGEMENT ACTIVITIES, AND FAIR VALUES
Financial Instruments
Th e carrying values of cash and cash equivalents, receiv-
ables, accounts payable, other current liabilities, and
notes payable approximate fair value. Marketable secu-
rities are carried at fair value. As of May 31, 2015, and
May 25, 2014, a comparison of cost and market values of
our marketable debt and equity securities is as follows:
Cost
Market
Value
Gross
Gains
Gross
Losses
Fiscal Year Fiscal Year Fiscal Year Fiscal Year
In Millions
2015
2014 2015
2014 2015 2014 2015
2015
Available for sale:
Debt securities
$2.6 $318.6 $ 2.6 $318.8 $ —
$0.2 $ —
$ —
Equity securities
1.8
1.8 8.3
7.2 6.5
5.4 —
—
Total
$4.4 $320.4 $10.9 $326.0 $6.5 $5.6 $ —
$ —
Th ere were no realized gains or losses from sales of
available-for-sale marketable securities. Gains and losses
are determined by specifi c identifi cation. Classifi cation of
marketable securities as current or noncurrent is depen-
dent upon our intended holding period, the security’s
maturity date, or both. Th e aggregate unrealized gains
and losses on available-for-sale securities, net of tax
eff ects, are classifi ed in AOCI within stockholders’ equity.
Scheduled maturities of our marketable securities are
as follows:
In Millions
Available for Sale
Cost
Market
Value
Under 1 year (current)
$ 2.5
$ 2.5
From 1 to 3 years
From 4 to 7 years
Equity securities
Total
—
0.1
1.8
—
0.1
8.3
$ 4.4
$ 10.9
As of May 31, 2015, cash and cash equivalents total-
ing $40.1 million were pledged as collateral for deriv-
ative contracts. As of May 31, 2015, $4.1 million of
certain accounts receivable were pledged as collateral
against a foreign uncommitted line of credit.
Th e fair value and carrying amounts of long-term
debt, including the current portion, were $8,996.6 mil-
lion and $8,608.1 million, respectively, as of May 31, 2015.
Th e fair value of long-term debt was estimated using
market quotations and discounted cash fl ows based
on our current incremental borrowing rates for simi-
lar types of instruments. Long-term debt is a Level 2
liability in the fair value hierarchy.
Risk Management Activities
As a part of our ongoing operations, we are exposed to
market risks such as changes in interest and foreign
currency exchange rates and commodity and equity
prices. To manage these risks, we may enter into var-
ious derivative transactions (e.g., futures, options, and
swaps) pursuant to our established policies.
Commodity Price Risk
Many commodities we use in the production and dis-
tribution 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
52
GENERAL MILLS
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 off set our exposures
based on current and projected market conditions and
generally seek to acquire the inputs at as close to our
planned cost as possible.
We use derivatives to manage our exposure to
changes in commodity prices. We do not perform
the assessments required to achieve hedge account-
ing 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 fl ow
hedge accounting, we nonetheless believe that these
instruments are eff ective 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 cor-
porate items outside of segment operating results until
such time that the exposure we are managing aff ects
earnings. At that time we reclassify the gain or loss
from unallocated corporate items to segment operating
profi t, allowing our operating segments to realize the
economic eff ects of the derivative without experiencing
any resulting mark-to-market volatility, which remains
in unallocated corporate items.
Unallocated corporate items for fi scal 2015, 2014 and
2013 included:
In Millions
2015
2014
2013
Fiscal Year
Net loss on mark-to-market
valuation of commodity positions $ (163.7)
Net loss on commodity
positions reclassifi ed from
unallocated corporate items
to segment operating profi t
Net mark-to-market revaluation
of certain grain inventories
Net mark-to-market valuation
of certain commodity positions
(10.4)
84.4
$ (4.9)
$ (7.6)
51.2
13.7
2.2
(1.7)
recognized in unallocated
corporate items
$ (89.7)
$ 48.5
$ 4.4
As of May 31, 2015, the net notional value of com-
modity derivatives was $384.0 million, of which $214.7
million related to agricultural inputs and $169.3 million
related to energy inputs. Th ese contracts relate to inputs
that generally will be utilized within the next 12 months.
Interest Rate Risk
We are exposed to interest rate volatility with regard
to future issuances of fi xed-rate debt, and existing
and future issuances of fl oating-rate debt. Primary
exposures include U.S. Treasury rates, LIBOR, Euribor,
and commercial paper rates in the United States and
Europe. We use interest rate swaps, forward-starting
interest rate swaps, and treasury locks to hedge our
exposure to interest rate changes, to reduce the vola-
tility of our fi nancing costs, and to achieve a desired
proportion of fi xed versus fl oating-rate debt, based on
current and projected market conditions. Generally
under these swaps, we agree with a counterparty to
exchange the diff erence between fi xed-rate and fl oat-
ing-rate interest amounts based on an agreed upon
notional principal amount.
Floating Interest Rate Exposures — Floating-to-
fi xed interest rate swaps are accounted for as cash
fl ow hedges, as are all hedges of forecasted issuances
of debt. Eff ectiveness is assessed based on either the
perfectly eff ective hypothetical derivative method or
changes in the present value of interest payments on
the underlying debt. Eff ective gains and losses deferred
to AOCI are reclassifi ed into earnings over the life of
the associated debt. Ineff ective gains and losses are
recorded as net interest. Th e amount of hedge ineff ec-
tiveness was less than $1 million in each of fi scal 2015,
2014, and 2013.
Fixed Interest Rate Exposures — Fixed-to-fl oating
interest rate swaps are accounted for as fair value
hedges with eff ectiveness assessed based on changes
in the fair value of the underlying debt and derivatives,
using incremental borrowing rates currently available
on loans with similar terms and maturities. Ineff ective
gains and losses on these derivatives and the under-
lying hedged items are recorded as net interest. Th e
amount of hedge ineff ectiveness was a $1.6 million gain
in fi scal 2015 and less than $1 million in fi scal 2014
and 2013.
In advance of planned debt fi nancing, we entered
into €600.0 million of forward starting swaps with an
average fi xed rate of 0.5 percent. All of these forward
starting swaps were cash settled for $6.5 million during
2015 ANNUAL REPORT
53
Th e following table summarizes the notional amounts
and weighted-average interest rates of our interest rate
derivatives. Average fl oating rates are based on rates as
of the end of the reporting period.
In Millions
May 31,
2015
May 25,
2014
Pay-fl oating swaps – notional amount
$ 1,250.0 $ 250.0
Average receive rate
Average pay rate
1.6%
0.9%
0.7%
0.5%
Th e swap contracts mature at various dates from fi s-
cal 2016 to 2020 as follows:
In Millions
2016
2017
2018
2019
2020
Total
Pay Floating
$ 250.0
—
500.0
—
500.0
$ 1,250.0
the fourth quarter of fi scal 2015, coincident with the
issuance of our €500 million 8-year fi xed-rate notes
and €400 million 12-year fi xed-rate notes.
During the second quarter of fi scal 2015, we entered
into swaps to convert $500.0 million of 1.4 percent
fi xed-rate notes due October 20, 2017, and $500.0 mil-
lion of 2.2 percent fi xed-rate notes due October 21,
2019, to fl oating rates.
In advance of planned debt fi nancing, we entered
into $250.0 million of treasury locks with an average
fi xed rate of 1.99 percent. All of these treasury locks
were cash settled for $17.9 million during the third
quarter of fi scal 2014, coincident with the issuance of
our $500.0 million 10-year fi xed-rate notes.
During the third quarter of fi scal 2013, we entered
into swaps to convert $250.0 million of 0.875 percent
fi xed-rate notes due January 29, 2016, to fl oating rates.
As of May 31, 2015, the pre-tax amount of cash-set-
tled interest rate hedge gain or loss remaining in AOCI
which will be reclassifi ed to earnings over the remain-
ing term of the related underlying debt follows:
In Millions
5.7% notes due February 15, 2017
5.65% notes due February 15, 2019
3.15% notes due December 15, 2021
1.0% notes due April 27, 2023
3.65% notes due February 15, 2024
1.5% notes due April 27, 2027
5.4% notes due June 15, 2040
4.15% notes due February 15, 2043
Net pre-tax hedge loss in AOCI
Gain/(Loss)
$ (3.8)
1.8
(64.7)
(1.9)
15.5
(3.9)
(14.0)
10.9
$(60.1)
54
GENERAL MILLS
Th e following tables reconcile the net fair values of assets and liabilities subject to off setting arrangements that
are recorded in the Consolidated Balance Sheets to the net fair values that could be reported in the Consolidated
Balance Sheets:
May 31, 2015
Assets
Gross Amounts Not
Off set in the
Balance Sheet (e)
Liabilities
Gross Amounts Not
Off set in the
Balance Sheet (e)
Gross
Gross
Assets
Amounts of Off set in
Recognized
Instruments Received Amount (c) Liabilities
Cash
Collateral
Net
Net
the Balance Amounts of
Financial
Sheet (a) Liabilities (b) Instruments Pledged Amount (d)
Net
Cash
Collateral
Gross
Gross
Liabilities
Amounts of Off set in
Recognized the Balance Amounts of Financial
Net
In Millions
Assets
Sheet (a)
Assets (b)
Commodity
contracts
$ 10.1
$ —
$ 10.1
$ (1.3)
$ —
$ 8.8 $ (59.4)
$ —
$ (59.4)
$ 1.3 $ 40.1 $ (18.0)
Interest rate
contracts
Foreign
exchange
4.0
—
4.0
—
—
4.0
—
—
—
—
—
—
contracts
25.9
—
25.9
(12.5)
—
13.4
(65.3)
—
(65.3)
12.5
—
(52.8)
Total
$ 40.0
$ —
$ 40.0 $ (13.8)
$ —
$ 26.2 $ (124.7)
$ —
$ (124.7) $ 13.8 $ 40.1 $ (70.8)
(a) Includes related collateral off set in the Consolidated Balance Sheets.
(b) Net fair value as recorded in the Consolidated Balance Sheets.
(c) Fair value of assets that could be reported net in the Consolidated Balance Sheets.
(d) Fair value of liabilities that could be reported net in the Consolidated Balance Sheets.
(e) Fair value of assets and liabilities reported on a gross basis in the Consolidated Balance Sheets.
May 25, 2014
Assets
Gross Amounts Not
Off set in the
Balance Sheet (e)
Liabilities
Gross Amounts Not
Off set in the
Balance Sheet (e)
Gross
Gross
Assets
Amounts of Off set in
Recognized
Instruments Received Amount (c) Liabilities
Cash
Collateral
Net
Net
the Balance Amounts of
Financial
Sheet (a) Liabilities (b) Instruments Pledged Amount (d)
Net
Cash
Collateral
Gross
Gross
Liabilities
Amounts of Off set in
Recognized the Balance Amounts of Financial
Net
In Millions
Assets
Sheet (a)
Assets (b)
Commodity
contracts
$ 19.1
$ —
$ 19.1
$ (3.4)
$ —
$ 15.7
$ (4.0)
$ —
$ (4.0)
$ 3.4 $ —
$ (0.6)
Interest rate
contracts
Foreign
exchange
0.7
—
0.7
—
—
0.7
—
—
—
—
—
—
contracts
10.5
—
10.5
(8.0)
—
2.5
(19.1)
—
(19.1)
8.0
—
(11.1)
Total
$ 30.3
$ —
$ 30.3 $ (11.4)
$ —
$ 18.9 $ (23.1)
$ —
$ (23.1) $ 11.4 $ —
$ (11.7)
(a) Includes related collateral off set in the Consolidated Balance Sheets.
(b) Net fair value as recorded in the Consolidated Balance Sheets.
(c) Fair value of assets that could be reported net in the Consolidated Balance Sheets.
(d) Fair value of liabilities that could be reported net in the Consolidated Balance Sheets.
(e) Fair value of assets and liabilities reported on a gross basis in the Consolidated Balance Sheets.
2015 ANNUAL REPORT
55
foreign exchange market mechanism (SIMADI). We
expect to be able to access U.S. dollars through the
SIMADI market. SIMADI has signifi cantly higher for-
eign exchange rates than those available through the
other foreign exchange mechanisms. In fi scal 2015,
we recorded an $8.0 million foreign exchange loss in
unallocated corporate items resulting from the remea-
surement of assets and liabilities of our Venezuelan
subsidiary at the SIMADI rate of 199 bolivars per U.S.
dollar. Our Venezuela operations represent less than 1
percent of our consolidated assets, liabilities, net sales,
and segment operating profi t. As of May 31, 2015, we
had $0.3 million of non-U.S. dollar cash balances in
Venezuela.
Equity Instruments
Equity price movements affect our compensation
expense as certain investments made by our employ-
ees in our deferred compensation plan are revalued.
We use equity swaps to manage this risk. As of May
31, 2015, the net notional amount of our equity swaps
was $124.2 million. Th ese swap contracts mature in
fi scal 2016.
Foreign Exchange Risk
Foreign currency fl uctuations aff ect our net invest-
ments in foreign subsidiaries and foreign currency cash
fl ows related to third party purchases, intercompany
loans, product shipments, and foreign-denominated
debt. We are also exposed to the translation of foreign
currency earnings to the U.S. dollar. Our principal expo-
sures are to the Australian dollar, Brazilian real, British
pound sterling, Canadian dollar, Chinese renminbi,
euro, Japanese yen, Mexican peso, and Swiss franc.
We mainly use foreign currency forward contracts to
selectively hedge our foreign currency cash fl ow expo-
sures. We also generally swap our foreign-denominated
commercial paper borrowings and nonfunctional cur-
rency intercompany loans back to U.S. dollars or the
functional currency of the entity with foreign exchange
exposure; the gains or losses on these derivatives off -
set the foreign currency revaluation gains or losses
recorded in earnings on the associated borrowings. We
generally do not hedge more than 18 months forward.
As of May 31, 2015, the net notional value of foreign
exchange derivatives was $1,448.5 million. Th e amount
of hedge ineff ectiveness was less than $1 million in
each of fi scal 2015, 2014, and 2013.
We also have many net investments in foreign sub-
sidiaries that are denominated in euros. We previously
hedged a portion of these net investments by issu-
ing euro-denominated commercial paper and foreign
exchange forward contracts. During the fourth quarter
of fi scal 2015, we entered into a net investment hedge
for a portion of our net investment in foreign opera-
tions denominated in euros by issuing €900.0 million
of euro-denominated bonds. During the second quarter
of fi scal 2014, we entered into a net investment hedge
for a portion of our net investment in foreign opera-
tions denominated in euros by issuing €500.0 million
of euro-denominated bonds. As of May 31, 2015, we
had deferred net foreign currency transaction gains of
$10.7 million in AOCI associated with hedging activity.
Venezuela is a highly infl ationary economy and we
remeasure the value of the assets and liabilities of our
Venezuelan subsidiary based on the exchange rate at
which we expect to remit dividends in U.S. dollars. In
February 2014, the Venezuelan government established
a new foreign exchange market mechanism (SICAD 2)
and at that time indicated that it would be the mar-
ket through which U.S. dollars would be obtained for
the remittance of dividends. On February 12, 2015, the
Venezuelan government replaced SICAD 2 with a new
56
GENERAL MILLS
Fair Value Measurements And Financial Statement Presentation
Th e fair values of our assets, liabilities, and derivative positions recorded at fair value and their respective levels in
the fair value hierarchy as of May 31, 2015 and May 25, 2014, were as follows:
In Millions
Level 1 Level 2 Level 3
Total
Level 1 Level 2 Level 3
Total
May 31, 2015
May 31, 2015
Fair Values of Assets
Fair Values of Liabilities
Derivatives designated as hedging instruments:
Interest rate contracts (a) (b)
Foreign exchange contracts (c) (d)
Total
Derivatives not designated as hedging instruments:
Foreign exchange contracts (c) (d)
Commodity contracts (c) (e)
Grain contracts (c) (e)
Total
Other assets and liabilities reported at fair value:
Marketable investments (a) (f)
Long-lived assets (g)
Indefi nite-lived intangible asset (h)
Total
$ — $ 4.0 $ — $ 4.0 $ — $
— $ — $ —
—
—
25.5
29.5
—
25.5
— (23.3)
— (23.3)
— 29.5
— (23.3)
— (23.3)
—
7.2
—
0.4
2.9
3.3
—
0.4
— 10.1
3.3
—
—
—
—
(42.0)
— (42.0)
(59.4) — (59.4)
(7.8)
(7.8) —
7.2
6.6
—
13.8
— (109.2) — (109.2)
8.3
2.6
—
10.9
—
—
37.8
—
37.8
— 154.3 154.3
8.3 40.4 154.3 203.0
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Total assets, liabilities, and derivative positions recorded at fair value
$15.5 $76.5 $154.3 $246.3 $ — $(132.5) $ — $(132.5)
(a) Th ese contracts and investments are recorded as prepaid expenses and other current assets, other assets, other current liabilities or other liabilities, as
appropriate, based on whether in a gain or loss position. Certain marketable investments are recorded as cash and cash equivalents.
(b) Based on LIBOR and swap rates.
(c) Th ese contracts are recorded as prepaid expenses and other current assets or as other current liabilities, as appropriate, based on whether in a gain or
loss position.
(d) Based on observable market transactions of spot currency rates and forward currency prices.
(e) Based on prices of futures exchanges and recently reported transactions in the marketplace.
(f) Based on prices of common stock and bond matrix pricing.
(g) We recorded $30.3 million in non-cash impairment charges in fi scal 2015 to write down certain long-lived assets to their fair value. Fair value was based
on recently reported transactions for similar assets in the marketplace. Th ese assets had a carrying value of $68.1 million and were associated with the
restructuring actions described in Note 4.
(h) We recorded a $260.0 million non-cash impairment charge in fi scal 2015 to write down our Green Giant brand asset to its fair value of $154.3 million. Th is
asset had a carrying value of $414.3 million. See Note 6 for additional information.
2015 ANNUAL REPORT
57
In Millions
Level 1 Level 2 Level 3
Total
Level 1 Level 2 Level 3
Total
May 25, 2014
May 25, 2014
Fair Values of Assets
Fair Values of Liabilities
Derivatives designated as hedging instruments:
Interest rate contracts (a) (b)
Foreign exchange contracts (c) (d)
Total
Derivatives not designated as hedging instruments:
Foreign exchange contracts (c) (d)
Commodity contracts (c) (e)
Grain contracts (c) (e)
Total
Other assets and liabilities reported at fair value:
Marketable investments (a) (f)
Total
Total assets, liabilities, and derivative positions
recorded at fair value
$ — $ 0.7 $ — $ 0.7
$ — $ —
$ — $ —
—
9.9
—
10.6
—
—
9.9
— (12.6)
— (12.6)
10.6 — (12.6)
— (12.6)
—
0.6
—
0.6 —
(6.5)
11.1
8.0 —
19.1 —
(4.0)
—
7.5
—
7.5 —
(4.9)
11.1 16.1
—
27.2 — (15.4)
—
—
—
—
(6.5)
(4.0)
(4.9)
(15.4)
7.2 318.8
7.2 318.8
— 326.0
—
— 326.0 —
— —
—
—
—
—
$ 18.3 $ 345.5 $ — $ 363.8
$ — $ (28.0) $ — $ (28.0)
(a) Th ese contracts and investments are recorded as prepaid expenses and other current assets, other assets, other current liabilities or other liabilities, as
appropriate, based on whether in a gain or loss position. Certain marketable investments are recorded as cash and cash equivalents.
(b) Based on LIBOR and swap rates.
(c) Th ese contracts are recorded as prepaid expenses and other current assets or as other current liabilities, as appropriate, based on whether in a gain or loss
position.
(d) Based on observable market transactions of spot currency rates and forward currency prices.
(e) Based on prices of futures exchanges and recently reported transactions in the marketplace.
(f) Based on prices of common stock and bond matrix pricing.
We did not signifi cantly change our valuation techniques from prior periods.
58
GENERAL MILLS
Information related to our cash fl ow hedges, fair value hedges, and other derivatives not designated as hedging
instruments for the fi scal years ended May 31, 2015, and May 25, 2014, follows:
In Millions
Derivatives in Cash Flow Hedging Relationships:
Amount of gain (loss) recognized in
Interest Rate Foreign Exchange
Contracts
Contracts
Equity
Contracts
Commodity
Contracts
Total
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
Fiscal Year
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
other comprehensive income (OCI) (a)
$(5.9) $10.6 $13.3 $0.6 $ —
$ — $ — $ — $7.4 $11.2
Amount of net gain (loss) reclassifi ed
from AOCI into earnings (a) (b)
(10.6) (11.7)
5.0 16.4
—
—
—
— (5.6)
4.7
Amount of net gain (loss) recognized
in earnings (c)
Derivatives in Fair Value Hedging Relationships:
Amount of net gain recognized
in earnings (d)
Derivatives in Net Investment Hedging Relationships:
Amount of loss recognized in OCI (a)
Derivatives Not Designated as Hedging Instruments:
Amount of net gain (loss) recognized in earnings (d)
(a) Eff ective portion.
(0.6)
—
0.1 (0.1)
—
—
—
— (0.5)
(0.1)
1.6
0.2
—
—
—
—
—
—
1.6
0.2
—
— (6.9)
—
—
—
—
— (6.9)
—
—
— (54.3) (20.0)
9.6
9.8 (163.7)
(4.9) (208.4) (15.1)
(b) Gain (loss) reclassifi ed 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.
(c) Gain (loss) recognized in earnings is related to the ineff ective portion of the hedging relationship, including SG&A expenses for foreign exchange contracts
and interest, net for interest rate contracts. No amounts were reported as a result of being excluded from the assessment of hedge eff ectiveness.
(d) Gain recognized in earnings is reported in interest, net for interest rate contracts, in cost of sales for commodity contracts, and in SG&A expenses for
equity contracts and foreign exchange contracts.
2015 ANNUAL REPORT
59
our International segment accounted for 24 percent of
its fi scal 2015 net sales, and the fi ve largest custom-
ers in our Convenience Stores and Foodservice segment
accounted for 44 percent of its fi scal 2015 net sales.
We enter into interest rate, foreign exchange, and
certain commodity and equity derivatives, primarily
with a diversifi ed group of highly rated counterparties.
We continually monitor our positions and the credit
ratings of the counterparties involved and, by policy,
limit the amount of credit exposure to any one party.
Th ese transactions may expose us to potential losses
due to the risk of nonperformance by these counter-
parties; however, we have not incurred a material loss.
We also enter into commodity futures transactions
through various regulated exchanges.
Th e amount of loss due to the credit risk of the
counterparties, should the counterparties fail to per-
form according to the terms of the contracts, is $16.7
million against which we do not hold collateral. Under
the terms of our swap agreements, some of our trans-
actions require collateral or other security to support
fi nancial instruments subject to threshold levels of
exposure and counterparty credit risk. Collateral assets
are either cash or U.S. Treasury instruments and are
held in a trust account that we may access if the coun-
terparty defaults.
We off er certain suppliers access to a third party ser-
vice that allows them to view our scheduled payments
online. Th e third party service also allows suppliers to
fi nance advances on our scheduled payments at the
sole discretion of the supplier and the third party. We
have no economic interest in these fi nancing arrange-
ments and no direct relationship with the suppliers,
the third party, or any fi nancial institutions concerning
this service. All of our accounts payable remain as obli-
gations to our suppliers as stated in our supplier agree-
ments. As of May 31, 2015, $448.6 million of our total
accounts payable is payable to suppliers who utilize this
third party service.
Amounts Recorded In Accumulated Other
Comprehensive Loss
As of May 31, 2015, the aft er-tax amounts of unrealized
gains and losses in AOCI related to hedge derivatives
follows:
In Millions
Aft er-Tax Gain/(Loss)
Unrealized losses from interest rate cash fl ow hedges
$ (36.5)
Unrealized gains from foreign currency cash fl ow hedges
7.7
Aft er-tax loss in AOCI related to hedge derivatives
$ (28.8)
Th e net amount of pre-tax gains and losses in AOCI
as of May 31, 2015, that we expect to be reclassifi ed
into net earnings within the next 12 months is $2.3
million of gain.
Credit-Risk-Related Contingent Features
Certain of our derivative instruments contain pro-
visions that require us to maintain an investment
grade credit rating on our debt from each of the major
credit rating agencies. If our debt were to fall below
investment grade, the counterparties to the deriva-
tive instruments could request full collateralization on
derivative instruments in net liability positions. Th e
aggregate fair value of all derivative instruments with
credit-risk-related contingent features that were in a
liability position on May 31, 2015, was $81.5 million.
We have posted $25.0 million of collateral under these
contracts. If the credit-risk-related contingent features
underlying these agreements had been triggered on
May 31, 2015, we would have been required to post
$56.5 million of collateral to counterparties.
Concentrations Of Credit And Counterparty
Credit Risk
During fi scal 2015, Wal-Mart Stores, Inc. and its affi li-
ates (Wal-Mart) accounted for 21 percent of our consol-
idated net sales and 30 percent of our net sales in the
U.S. Retail segment. No other customer accounted for
10 percent or more of our consolidated net sales. Wal-
Mart also represented 7 percent of our net sales in the
International segment and 9 percent of our net sales in
the Convenience Stores and Foodservice segment. As
of May 31, 2015, Wal-Mart accounted for 29 percent of
our U.S. Retail receivables, 6 percent of our International
receivables, and 9 percent of our Convenience Stores
and Foodservice receivables. Th e fi ve largest customers
in our U.S. Retail segment accounted for 54 percent of
its fi scal 2015 net sales, the fi ve largest customers in
60
GENERAL MILLS
NOTE 8. DEBT
Notes Payable Th e components of notes payable and
their respective weighted-average interest rates at the
end of the periods were as follows:
May 31, 2015
May 25, 2014
Weighted-
average
Interest
Rate
Notes
Payable
Weighted-
average
Interest
Rate
Notes
Payable
In Millions
U.S. commercial paper
$432.0
0.3% $1,007.6
0.2%
Financial institutions
183.8
9.5
104.1
12.1
Total
$615.8
3.0% $1,111.7
1.3%
To ensure availability of funds, we maintain bank
credit lines suffi cient to cover our outstanding notes
payable. Commercial paper is a continuing source of
short-term fi nancing. We have commercial paper pro-
grams available to us in the United States and Europe.
We also have uncommitted and asset-backed credit
lines that support our foreign operations.
Th e following table details the fee-paid committed
and uncommitted credit lines we had available as of
May 31, 2015:
In Billions
Credit facility expiring:
April 2017
May 2019
June 2019
Total committed credit facilities
Uncommitted credit facilities
Total committed and uncommitted
Facility
Amount
Borrowed
Amount
$ 1.7
$ —
1.0
0.2
2.9
0.5
—
0.1
0.1
0.1
credit facilities
$ 3.4
$ 0.2
In June 2014, our subsidiary, Yoplait S.A.S. entered
into a €200.0 million fee-paid committed credit facility
that is scheduled to expire in June 2019.
In May 2014, we entered into a $1.0 billion fee-paid
committed credit facility that is scheduled to expire in
May 2019. Concurrent with the execution of this credit
facility, we terminated our credit facility that provided
$1.0 billion of revolving credit which was scheduled to
expire in April 2015.
Th e credit facilities contain covenants, including a
requirement to maintain a fi xed charge coverage ratio
of at least 2.5 times. We were in compliance with all
credit facility covenants as of May 31, 2015.
Long-Term Debt In April 2015, we issued €500.0 mil-
lion principal amount of 1.0 percent fi xed-rate notes due
April 27, 2023 and €400.0 million principal amount of
1.5 percent fi xed-rate notes due April 27, 2027. Interest
on the notes is payable annually in arrears. Th e notes
due April 27, 2023 may be redeemed in whole, or in
part, at our option at any time prior to January 27, 2023
for a specifi ed make whole amount and any time on or
aft er that date at par. Th e notes due April 27, 2027
may be redeemed in whole, or in part, at our option at
any time prior to January 27, 2027 for a specifi ed make
whole amount and any time on or aft er that date at
par. Th ese notes are senior unsecured obligations that
include a change of control repurchase provision. Th e
net proceeds were used for general corporate purposes
and to reduce our commercial paper borrowings.
In March 2015, we repaid $750.0 million of 5.2 per-
cent notes.
In October 2014, we issued $500.0 million aggregate
principal amount of 1.4 percent fi xed-rate notes due
October 20, 2017 and $500.0 million aggregate princi-
pal amount of 2.2 percent fi xed-rate notes due October
21, 2019. Interest on the notes is payable semi-annually
in arrears. Th e notes may be redeemed in whole, or in
part, at our option at any time at the applicable redemp-
tion price. Th e notes are senior unsecured obligations
that include a change of control repurchase provision.
Th e net proceeds were used to fund our acquisition of
Annie’s and for general corporate purposes.
In June 2014, we issued €200.0 million principal
amount of 2.2 percent fixed-rate senior unsecured
notes due June 24, 2021 in a private placement off er-
ing. Interest on the notes is payable semi-annually in
arrears. Th e notes may be redeemed in whole, or in
part, at our option at any time for a specifi c make-
whole amount and include a change of control repur-
chase provision. The net proceeds were used to
refi nance existing debt.
In June 2014, we repaid €290.0 million of float-
ing-rate notes.
In May 2014, we repaid $400.0 million of float-
ing-rate notes and $300.0 million of 1.55 percent notes.
In January 2014, we issued $500.0 million aggregate
principal amount of 3.65 percent fi xed-rate notes due
February 15, 2024 and $250.0 million aggregate princi-
pal amount of fl oating-rate notes due January 28, 2016.
Interest on the fi xed-rate notes is payable semi-annu-
ally in arrears. Th e fi xed-rate notes may be redeemed
in whole, or in part, at our option at any time prior to
2015 ANNUAL REPORT
61
November 15, 2023 for a specifi ed make whole amount
and any time on or aft er that date at par. Th e fl oat-
ing-rate notes bear interest equal to three-month
LIBOR plus 20 basis points, subject to quarterly reset.
Interest on the fl oating-rate notes is payable quarterly
in arrears. Th e fl oating-rate notes are not redeemable
prior to maturity. Th e fi xed-rate and fl oating-rate notes
are senior unsecured obligations that include a change
of control repurchase provision. Th e net proceeds were
used for general corporate purposes and to reduce our
commercial paper borrowings.
In November 2013, we issued €500.0 million aggre-
gate principal amount of 2.1 percent fi xed-rate notes
due November 16, 2020. Interest on the notes is pay-
able annually in arrears. Th e notes may be redeemed
in whole, or in part, at our option at any time prior to
August 16, 2020 for a specifi ed make whole amount
and any time on or aft er that date at par. Th ese notes
are senior unsecured obligations that include a change
of control repurchase provision. Th e net proceeds were
used for general corporate purposes and to reduce our
commercial paper borrowings.
A summary of our long-term debt is as follows:
In Millions
May 31, 2015
May 25, 2014
5.65% notes due February 15, 2019
$1,150.0
$1,150.0
5.7% notes due February 15, 2017
1,000.0
1,000.0
3.15% notes due December 15, 2021
1,000.0
1,000.0
5.2% notes due March 17, 2015
—
750.0
Euro-denominated 2.1% notes due
November 16, 2020
549.4
681.5
Euro-denominated 1.0% notes due
April 27, 2023
1.4% notes due October 20, 2017
5.4% notes due June 15, 2040
4.15% notes due February 15, 2043
3.65% notes due February 15, 2024
549.4
500.0
500.0
500.0
500.0
2.2% notes due October 21, 2019
500.0
—
—
500.0
500.0
500.0
—
Floating-rate notes due January 29, 2016
500.0
500.0
Euro-denominated 1.5% notes due
April 27, 2027
439.5
Floating-rate notes due December 15, 2014
—
0.875% notes due January 29, 2016
250.0
Floating-rate notes due January 28, 2016
250.0
—
395.3
250.0
250.0
Euro-denominated 2.2% notes due
In August 2013, we repaid $700.0 million of 5.25
June 24, 2021
219.7
—
percent notes.
Medium-term notes, 0.02% to 6.44%,
due fi scal 2017 or later
Other, including capital leases
204.2
204.2
(4.1)
(6.9)
8,608.1
7,674.1
Less amount due within one year
(1,000.4)
(1,250.6)
Total long-term debt
$7,607.7
$6,423.5
Principal payments due on long-term debt in the
next fi ve years based on stated contractual maturities,
our intent to redeem, or put rights of certain note hold-
ers are $1,000.4 million in fi scal 2016, $1,103.4 million in
fi scal 2017, $604.5 million in fi scal 2018, $1,150.2 million
in fi scal 2019, and $500.1 million in fi scal 2020.
Certain of our long-term debt agreements contain
restrictive covenants. As of May 31, 2015, we were in
compliance with all of these covenants.
As of May 31, 2015, the $60.1 million pre-tax loss
recorded in AOCI associated with our previously des-
ignated interest rate swaps will be reclassifi ed to net
interest over the remaining lives of the hedged trans-
actions. Th e amount expected to be reclassifi ed from
AOCI to net interest in fi scal 2016 is a $10.6 million
pre-tax loss.
62
GENERAL MILLS
NOTE 9. REDEEMABLE AND
NONCONTROLLING INTERESTS
Our principal redeemable and noncontrolling interests
relate to our Yoplait SAS, Yoplait Marques SNC, Liberté
Marques Sàrl, and General Mills Cereals, LLC (GMC)
subsidiaries. In addition, we have six foreign subsid-
iaries that have noncontrolling interests totaling $8.2
million as of May 31, 2015.
We have a 51 percent controlling interest in Yoplait
SAS and a 50 percent interest in Yoplait Marques SNC
and Liberté Marques Sàrl. Sodiaal holds the remaining
interests in each of the entities. On the acquisition date,
we recorded the $904.4 million fair value of Sodiaal’s
49 percent euro-denominated interest in Yoplait SAS
as a redeemable interest on our Consolidated Balance
Sheets. Sodiaal has the ability to put a limited portion of
its redeemable interest to us at fair value once per year
through a maximum term expiring December 2020.
We adjust the value of the redeemable interest through
additional paid-in capital on our Consolidated Balance
Sheets quarterly to the redeemable interest’s redemp-
tion value, which approximates its fair value. Yoplait
SAS pays dividends annually if it meets certain fi nan-
cial metrics set forth in its shareholders agreement. As
of May 31, 2015, the redemption value of the euro-de-
nominated redeemable interest was $778.9 million.
In addition, a subsidiary of Yoplait SAS has entered
into an exclusive milk supply agreement for its European
operations with Sodiaal at market-determined prices
through July 1, 2021. Net purchases totaled $271.3 mil-
lion for fi scal 2015 and $311.2 million for fi scal 2014.
On the acquisition dates, we recorded the $281.4
million fair value of Sodiaal’s 50 percent euro-denom-
inated interest in Yoplait Marques SNC and 50 per-
cent Canadian dollar-denominated interest in Liberté
Marques Sàrl as noncontrolling interests on our
Consolidated Balance Sheets. Yoplait Marques SNC
earns a royalty stream through a licensing agreement
with Yoplait SAS for the rights to Yoplait and related
trademarks. Liberté Marques Sàrl earns a royalty stream
through licensing agreements with certain Yoplait group
companies for the rights to Liberté and related trade-
marks. Th ese entities pay dividends annually based on
their available cash as of their fi scal year end.
During fi scal 2015, we paid $17.7 million of dividends
to Sodiaal under the terms of the Yoplait SAS and
Yoplait Marques SNC shareholder agreements.
Th e holder of the GMC Class A Interests receives
quarterly preferred distributions from available net
income based on the application of a floating pre-
ferred return rate, to the holder’s capital account bal-
ance established in the most recent mark-to-market
valuation (currently $251.5 million). In fi scal 2015, the
fl oating preferred return rate was equal to the sum of
three-month LIBOR plus 110 basis points. Th e preferred
return rate is adjusted every three years through a
negotiated agreement with the Class A Interest holder
or through a remarketing auction. On June 1, 2015, sub-
sequent to our year-end, the fl oating preferred return
rate on GMC’s Class A interests was reset to the sum of
three-month LIBOR plus 125 basis points.
For fi nancial reporting purposes, the assets, liabilities,
results of operations, and cash fl ows of our non-wholly
owned subsidiaries are included in our Consolidated
Financial Statements. Th e third-party investor’s share
of the net earnings of these subsidiaries is refl ected
in net earnings attributable to redeemable and non-
controlling interests in the Consolidated Statements of
Earnings.
Our noncontrolling interests contain restrictive cove-
nants. As of May 31, 2015, we were in compliance with
all of these covenants.
NOTE 10. STOCKHOLDERS’ EQUITY
Cumulative preference stock of 5.0 million shares, with-
out par value, is authorized but unissued.
On May 6, 2014, our Board of Directors authorized
the repurchase of up to 100 million shares of our com-
mon stock. Purchases under the authorization 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. Th e authorization
has no specifi ed termination date.
During fi scal 2015, we repurchased 22.3 million shares
of common stock for an aggregate purchase price of
$1,161.9 million. During fi scal 2014, we repurchased 35.6
million shares of common stock for an aggregate pur-
chase price of $1,774.4 million. During fi scal 2013, we
repurchased 24.2 million shares of common stock for
an aggregate purchase price of $1,014.9 million.
During the fourth quarter of fi scal 2013, we entered
into an Accelerated Share Repurchase (ASR) agree-
ment with an unrelated third party fi nancial institution
to repurchase an aggregate of $300.0 million of our
2015 ANNUAL REPORT
63
outstanding common stock. Under the ASR agreement,
we paid $300.0 million to the fi nancial institution and
received 5.5 million shares of common stock with a
fair value of $270.0 million during the fourth quarter
of 2013. We received an additional 0.6 million shares
of common stock upon completion of the ASR agree-
ment during the fi rst quarter of fi scal 2014. As of May
26, 2013, we recorded this transaction as an increase
in treasury stock of $270.0 million, and recorded the
remaining $30.0 million as a decrease to additional
paid-in capital on our Consolidated Balance Sheets.
Upon completion of the ASR agreement in the fi rst
quarter of fi scal 2014, we reclassifi ed the $30.0 million
to treasury stock from additional paid-in capital on our
Consolidated Balance Sheets.
Th e following table provides details of total comprehensive income:
Pretax
General Mills
Tax
Net
Noncontrolling
Interests
Net
Redeemable
Interests
Net
Fiscal 2015
$ 1,221.3
$ 8.2
$ 29.9
In Millions
Net earnings, including earnings
attributable to redeemable and
noncontrolling interests
Other comprehensive income (loss):
Foreign currency translation
Net actuarial loss
Other fair value changes:
Securities
Hedge derivatives
Reclassifi cation to earnings:
$ (727.9)
(561.1)
$ —
202.7
(727.9)
(358.4)
1.3
13.6
(0.5)
(4.8)
0.8
8.8
1.2
105.1
(970.4)
$
250.9
Hedge derivatives (a)
0.7
0.5
Amortization of losses and
prior service costs (b)
Other comprehensive loss
Total comprehensive income (loss)
170.2
(1,103.2)
(65.1)
132.8
(78.2)
—
—
—
—
—
(78.2)
$ (70.0)
(151.8)
—
—
(4.7)
3.7
—
(152.8)
$ (122.9)
(a) Loss reclassifi ed 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.
(b) Loss reclassifi ed from AOCI into earnings is reported in SG&A expense.
64
GENERAL MILLS
In Millions
Net earnings, including earnings
attributable to redeemable and
noncontrolling interests
Other comprehensive income (loss):
Foreign currency translation
Net actuarial income
Other fair value changes:
Securities
Hedge derivatives
Reclassifi cation to earnings:
Hedge derivatives (a)
Amortization of losses and
prior service costs (b)
Other comprehensive income
Total comprehensive income
Pretax
General Mills
Tax
Net
Noncontrolling
Interests
Net
Redeemable
Interests
Net
Fiscal 2014
$ 1,824.4
$ 5.8
$ 31.1
$ (71.8)
327.2
$
—
(121.2)
0.5
14.4
(0.2)
(7.0)
(71.8)
206.0
0.3
7.4
19.1
—
—
—
41.4
—
—
(2.4)
(4.7)
0.2
(4.5)
—
(0.1)
172.7
438.3
(65.1)
(193.3)
107.6
245.0
$ 2,069.4
—
19.1
$ 24.9
—
38.9
$ 70.0
(a) Gain reclassifi ed 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.
(b) Loss reclassifi ed from AOCI into earnings is reported in SG&A expense.
In Millions
Net earnings, including earnings
attributable to redeemable and
noncontrolling interests
Other comprehensive income (loss):
Foreign currency translation
Net actuarial income
Other fair value changes:
Securities
Hedge derivatives
Reclassifi cation to earnings:
Hedge derivatives (a)
Amortization of losses and
prior service costs (b)
Other comprehensive income
Total comprehensive income
Pretax
General Mills
Tax
Net
Noncontrolling
Interests
Net
Redeemable
Interests
Net
Fiscal 2013
$ 1,855.2
$ 8.0
$ 29.3
$ (19.8)
76.3
$ —
(31.3)
1.2
33.5
(0.4)
(10.4)
(19.8)
45.0
0.8
23.1
15.0
(4.5)
10.5
159.9
266.1
(61.1)
(107.7)
98.8
158.4
$ 2,013.6
10.3
—
—
—
—
—
10.3
$ 18.3
10.3
—
—
1.5
1.7
—
13.5
$ 42.8
(a) Loss reclassifi ed 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.
(b) Loss reclassifi ed from AOCI into earnings is reported in SG&A expense.
2015 ANNUAL REPORT
65
In fi scal 2015, 2014, and 2013, except for reclassifi -
cations to earnings, changes in other comprehensive
income (loss) were primarily non-cash items.
Stock Options The estimated fair values of stock
options granted and the assumptions used for the
Black-Scholes option-pricing model were as follows:
Accumulated other comprehensive loss balances, net
of tax eff ects, were as follows:
Fiscal Year
2015
2014
2013
In Millions
May 31, 2015
May 25, 2014
Estimated fair values of
Foreign currency translation
adjustments
Unrealized gain (loss) from:
Securities
Hedge derivatives
Pension, other postretirement,
and postemployment benefi ts:
stock options granted
$ 7.22
$ 6.03
$ 3.65
$ (536.6) $
191.3
Assumptions:
3.7
(28.8)
2.9
(38.8)
Risk-free interest rate
2.6%
2.6%
1.6%
Expected term
8.5 years
9.0 years
9.0 years
Expected volatility
17.5%
17.4%
Dividend yield
3.1%
3.1%
17.3%
3.5%
Net actuarial loss
(1,756.1)
(1,469.2)
Prior service credits (costs)
7.1
(26.5)
Accumulated other comprehensive loss $ (2,310.7)
$ (1,340.3)
NOTE 11. STOCK PLANS
We use broad-based stock plans to help ensure that
management’s interests are aligned with those of our
stockholders. As of May 31, 2015, a total of 27.1 mil-
lion shares were available for grant in the form of
stock options, restricted stock, restricted stock units,
and shares of unrestricted stock under the 2011
Stock Compensation Plan (2011 Plan) and the 2011
Compensation Plan for Non-Employee Directors. Th e
2011 Plan also provides for the issuance of cash-set-
tled share-based units, stock appreciation rights, and
performance based stock awards. Stock-based awards
now outstanding include some granted under the 2001,
2005, 2006, 2007, and 2009 stock plans, under which
no further awards may be granted. Th e stock plans
provide for accelerated vesting of awards upon retire-
ment, termination, or death of eligible employees and
directors.
The valuation of stock options is a significant
accounting estimate that requires us to use judgments
and assumptions that are likely to have a material
impact on our fi nancial statements. We estimate the
fair value of each option on the grant date using a
Black-Scholes option-pricing model, which requires us
to make predictive assumptions regarding future stock
price volatility, employee exercise behavior, dividend
yield, and the forfeiture rate. 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 insuffi cient to provide a reliable measure of
expected volatility.
Our expected term represents the period of time
that options granted are expected to be outstanding
based on historical data to estimate option exercises
and employee terminations within the valuation model.
Separate groups of employees have similar historical
exercise behavior and therefore were aggregated into a
single pool for valuation purposes. Th e weighted-aver-
age expected term for all employee groups is presented
in the table above. Th e risk-free interest rate for peri-
ods during the expected term of the options is based on
the U.S. Treasury zero-coupon yield curve in eff ect at
the time of grant.
Any corporate income tax benefi t realized upon exer-
cise or vesting of an award in excess of that previously
recognized in earnings (referred to as a windfall tax
benefi t) is presented in the Consolidated Statements of
Cash Flows as a fi nancing cash fl ow.
66
GENERAL MILLS
Net cash proceeds from the exercise of stock options
less shares used for minimum withholding taxes and
the intrinsic value of options exercised were as follows:
In Millions
2015
2014
2013
Fiscal Year
Net cash proceeds
Intrinsic value of
$ 163.7
$ 108.1
$ 300.8
options exercised
$ 201.9
$ 166.6
$ 297.2
Restricted Stock, Restricted Stock Units, and
Performance Share Units Stock and units settled in
stock subject to a restricted period and a purchase price,
if any (as determined by the Compensation Committee
of the Board of Directors), may be granted to key
employees under the 2011 Plan. Restricted stock and
restricted stock units generally vest and become unre-
stricted four years aft er the date of grant. Performance
share units are earned based on our future achievement
of three-year goals for average organic net sales growth
and cumulative free cash fl ow. Performance share units
are subject to a four year vesting period and will be set-
tled with common stock one year following the comple-
tion of the three-year performance period. Th e sale or
transfer of these awards is restricted during the vest-
ing period. Participants holding restricted stock, but
not restricted stock units or performance share units,
are entitled to vote on matters submitted to holders
of common stock for a vote. Th ese awards accumulate
dividends from the date of grant, but participants only
receive payment if the awards vest.
Realized windfall tax benefi ts are credited to addi-
tional paid-in capital within the Consolidated Balance
Sheets. Realized shortfall tax benefi ts (amounts which
are less than that previously recognized in earnings)
are fi rst off set against the cumulative balance of wind-
fall tax benefi ts, if any, and then charged directly to
income tax expense, potentially resulting in volatility
in our consolidated eff ective income tax rate. We calcu-
lated a cumulative memo balance of windfall tax ben-
efi ts for the purpose of accounting for future shortfall
tax benefi ts.
Options may be priced at 100 percent or more of the
fair market value on the date of grant, and generally
vest four years aft er the date of grant. Options gen-
erally expire within 10 years and one month aft er the
date of grant.
Information on stock option activity follows:
Weighted-
Average
Exercise
Weighted-
Average
Exercise
Exercisable Price Per Outstanding Price Per
Share
(Th ousands)
(Th ousands)
Options
Options
Share
Balance as of
May 27, 2012
39,564.9 $ 25.27
60,942.7 $ 27.96
Granted
Exercised
Forfeited or expired
Balance as of
3,407.7
38.15
(16,534.6)
23.49
(143.7)
34.06
May 26, 2013
29,290.3
27.69
47,672.1
30.22
Granted
Exercised
Forfeited or expired
Balance as of
2,789.8
48.33
(6,181.3)
24.78
(111.6)
38.74
May 25, 2014
29,452.8
28.37
44,169.0
32.10
Granted
Exercised
Forfeited or expired
Balance as of
2,253.1
(7,297.2)
53.70
26.68
(47.7)
43.73
May 31, 2015
26,991.5 $ 30.44
39,077.2 $ 34.35
Stock-based compensation expense related to stock
option awards was $18.1 million in fi scal 2015, $18.2
million in fi scal 2014, and $17.5 million in fi scal 2013.
Compensation expense related to stock-based pay-
ments recognized in the Consolidated Statements of
Earnings includes amounts recognized in restructuring,
impairment, and other exit costs for fi scal 2015.
2015 ANNUAL REPORT
67
Information on restricted stock unit, performance share units, and cash-settled share-based units activity follows:
Equity Classifi ed
Liability Classifi ed
Share-
Settled
Units
(Th ousands)
Weighted-
Average
Grant-Date
Fair Value
Share-
Settled
Units
(Th ousands)
Weighted-
Average
Grant-Date
Fair Value
Cash-Settled
Share-Based
Units
(Th ousands)
Weighted-
Average
Grant-Date
Fair Value
Non-vested as of May 25, 2014
Granted
Vested
Forfeited, expired, or reclassifi ed
Non-vested as of May 31, 2015
7,893.7
1,658.7
(2,978.7)
(338.1)
6,235.6
$40.81
53.44
35.19
46.13
$46.44
249.5
49.5
(55.7)
(6.3)
237.0
$25.67
53.70
37.68
45.41
$44.84
822.8
$36.52
—
37.40
37.40
$
—
—
(822.1)
(0.7)
—
Fiscal Year
Number of units granted (thousands)
Weighted average price per unit
Th e total grant-date fair value of restricted stock
unit awards that vested during fi scal 2015 was $133.7
million, and $104.6 million vested during fi scal 2014.
As of May 31, 2015, unrecognized compensation
expense related to non-vested stock options, restricted
stock units, and performance share units was $101.9
million. Th is expense will be recognized over 17 months,
on average.
Stock-based compensation expense related to
restricted stock units, performance share units, and
cash-settled share-based payment awards was $96.6
million for fi scal 2015, $107.0 million for fi scal 2014, and
$128.9 million for fi scal 2013. Compensation expense
related to stock-based payments recognized in the
Consolidated Statements of Earnings includes amounts
recognized in restructuring, impairment, and other exit
costs for fi scal 2015.
2015
2014
2013
1,708.2
2,144.1
2,404.9
$53.45
$48.49
$38.41
NOTE 12. EARNINGS PER SHARE
Basic and diluted EPS were calculated using the
following:
In Millions, Except per Share Data
2015
2014
2013
Net earnings attributable
to General Mills
$1,221.3 $1,824.4 $1,855.2
Fiscal Year
Average number of common
shares - basic EPS
Incremental share eff ect from: (a)
Stock options
Restricted stock, restricted
603.3
628.6
648.6
11.3
12.3
12.0
stock units, and other
4.2
4.8
5.0
Average number of common
shares - diluted EPS
618.8
645.7
665.6
Earnings per share - basic
Earnings per share - diluted
$ 2.02 $ 2.90 $
$ 1.97 $ 2.83 $
2.86
2.79
(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:
In Millions
2015
2014
2013
Fiscal Year
Anti-dilutive stock options,
restricted stock units, and
performance share units
2.1
1.7
0.6
6 8
GENERAL MILLS
NOTE 13. RETIREMENT BENEFITS AND
POSTEMPLOYMENT BENEFITS
Defi ned Benefi t Pension Plans We have defi ned benefi t
pension plans covering many employees in the United
States, Canada, France, and the United Kingdom.
Benefi ts for salaried employees are based on length of
service and fi nal average compensation. Benefi ts for
hourly employees include various monthly amounts
for each year of credited service. Our funding policy
is consistent with the requirements of applicable laws.
We made no voluntary contributions to our principal
U.S. plans in fi scal 2015 and 2014, and made a $200.0
million voluntary contribution in fi scal 2013. We do not
expect to be required to make any contributions in fi s-
cal 2016. Our principal domestic retirement plan cover-
ing salaried employees has a provision that any excess
pension assets would be allocated to active participants
if the plan is terminated within fi ve years of a change
in control. In fi scal 2012, we announced changes to
our U.S. defi ned benefi t pension plans. All new salaried
employees hired on or aft er June 1, 2013 are eligible
for a new retirement program that does not include a
defi ned benefi t pension plan. Current salaried employ-
ees remain in the existing defi ned benefi t pension plan
with adjustments to benefi ts.
Other Postretirement Benefi t Plans We also sponsor
plans that provide health care benefi ts to many of our
retirees in the United States, Canada, and Brazil. Th e
United States salaried health care benefi t plan is con-
tributory, with retiree contributions based on years of
service. We make decisions to fund related trusts for
certain employees and retirees on an annual basis. We
made $24.0 million in voluntary contributions to these
plans in fi scal 2015 and $24.0 million in voluntary con-
tributions to these plans in fi scal 2014.
Health Care Cost Trend Rates Assumed health care
cost trends are as follows:
Fiscal Year
2015
2014
Health care cost trend rate
for next year
6.5% and 7.3%
6.5% and 7.3%
Rate to which the cost
trend rate is assumed to
decline (ultimate rate)
5.0%
5.0%
Year that the rate reaches the
ultimate trend rate
2025
2025
We review our health care cost trend rates annu-
ally. Our review is based on data we collect about our
health care claims experience and information provided
by our actuaries. Th is information includes recent plan
experience, plan design, overall industry experience
and projections, and assumptions used by other simi-
lar organizations. Our initial health care cost trend rate
is adjusted as necessary to remain consistent with this
review, recent experiences, and short-term expectations.
Our initial health care cost trend rate assumption is 7.3
percent for retirees age 65 and over and 6.5 percent for
retirees under age 65 at the end of fi scal 2015. Rates are
graded down annually until the ultimate trend rate of
5.0 percent is reached in 2025 for all retirees. Th e trend
rates are applicable for calculations only if the retirees’
benefi ts increase as a result of health care infl ation. Th e
ultimate trend rate is adjusted annually, as necessary,
to approximate the current economic view on the rate
of long-term infl ation plus an appropriate health care
cost premium. Assumed trend rates for health care costs
have an important eff ect on the amounts reported for
the other postretirement benefi t plans.
A one percentage point change in the health care
cost trend rate would have the following eff ects:
In Millions
One
One
Percentage Percentage
Point
Decrease
Point
Increase
Eff ect on the aggregate of the service and
interest cost components in fi scal 2016
$ 3.7
$ (3.2)
Eff ect on the other postretirement
accumulated benefi t obligation as of
May 31, 2015
77.1
(68.9)
The Patient Protection and Affordable Care Act,
as amended by the Health Care and Education
Reconciliation Act of 2010 (collectively, the Act) was
signed into law in March 2010. Th e Act codifi es health
care reforms with staggered eff ective dates from 2010
to 2018. Estimates of the future impacts of several of
the Act’s provisions are incorporated into our postre-
tirement benefi t liability.
Postemployment Benefi t Plans Under certain circum-
stances, we also provide accruable benefi ts to former
or inactive employees in the United States, Canada, and
Mexico, and members of our Board of Directors, including
severance and certain other benefi ts payable upon death.
We recognize an obligation for any of these benefi ts that
vest or accumulate with service. Postemployment benefi ts
2015 ANNUAL REPORT
69
that do not vest or accumulate with service (such as severance based solely on annual pay rather than years of service)
are charged to expense when incurred. Our postemployment benefi t plans are unfunded.
We use our fi scal year end as the measurement date for our defi ned benefi t pension and other postretirement
benefi t plans.
Summarized fi nancial information about defi ned benefi t pension, other postretirement benefi t, and postemploy-
ment benefi t plans is presented below:
Defi ned Benefi t
Pension Plans
Fiscal Year
Other
Postretirement
Benefi t Plans
Fiscal Year
Postemployment
Benefi t Plans
Fiscal Year
In Millions
2015
2014
2015
2014
2015
2014
Change in Plan Assets:
Fair value at beginning of year
Actual return on assets
Employer contributions
Plan participant contributions
Benefi ts payments
Foreign currency
Fair value at end of year
Change in Projected Benefi t Obligation:
Benefi t obligation at beginning of year
Service cost
Interest cost
Plan amendment
Curtailment/other
Plan participant contributions
Medicare Part D reimbursements
Actuarial loss (gain)
Benefi ts payments
Foreign currency
Projected benefi t obligation at end of year
Plan assets less than benefi t
obligation as of fi scal year end
$5,611.8 $ 5,066.1
740.2
25.6
6.7
(231.4)
4.6
$5,758.5 $ 5,611.8
373.6
24.1
10.3
(244.9)
(16.4)
$ 517.3 $ 436.9
59.1
24.1
13.5
(16.3)
—
$ 582.8 $ 517.3
44.0
24.1
13.6
(16.2)
—
$5,618.0 $ 5,381.4
133.0
239.5
17.8
—
6.7
—
67.6
(231.6)
3.6
$ 6,252.1 $ 5,618.0
137.0
249.2
1.9
19.9
10.3
—
479.7
(245.5)
(18.4)
$ 1,074.8 $ 1,148.2
22.7
50.5
18.2
(2.9)
13.5
4.3
(119.4)
(59.3)
(1.0)
$ 1,079.6 $ 1,074.8
22.4
46.9
(42.4)
3.4
13.6
3.2
23.5
(62.8)
(3.0)
$ 145.3
7.5
4.3
—
9.5
—
—
(0.4)
(19.1)
(0.5)
$ 146.6
$ 145.4
7.7
4.1
—
3.7
—
—
1.8
(17.2)
(0.2)
$ 145.3
$ (493.6) $
(6.2)
$ (496.8) $ (557.5)
$ (146.6) $ (145.3)
Assumed mortality rates of plan participants are a critical estimate in measuring the expected payments a partic-
ipant will receive over their lifetime and the amount of expense we recognize. On October 27, 2014, the Society of
Actuaries published RP-2014 Mortality Tables and Mortality Improvement Scale MP-2014, which both refl ect improved
longevity. We adopted the change to the mortality assumptions to remeasure our defi ned benefi t pension plans and
other postretirement benefi t plans obligations, which increased the total of these obligations by $436.7 million.
Th e accumulated benefi t obligation for all defi ned benefi t pension plans was $5,750.4 million as of May 31, 2015,
and $5,093.1 million as of May 25, 2014.
Amounts recognized in AOCI as of May 31, 2015, and May 25, 2014, are as follows:
Defi ned Benefi t
Pension Plans
Fiscal Year
Other
Postretirement
Benefi t Plans
Fiscal Year
Postemployment
Benefi t Plans
Fiscal Year
Total
Fiscal Year
In Millions
2015
2014
2015
2014
2015
2014
2015
2014
Net actuarial loss
Prior service (costs) credits
Amounts recorded in accumulated
$(1,674.9) $(1,389.2)
(26.1)
(13.8)
$(72.2)
23.8
$(70.2)
4.0
$ (9.0)
(2.9)
$ (9.8)
(4.4)
$(1,756.1) $(1,469.2)
(26.5)
7.1
other comprehensive loss
$(1,688.7) $(1,415.3)
$(48.4)
$(66.2)
$(11.9)
$(14.2)
$(1,749.0) $ (1,495.7)
70
GENERAL MILLS
Plans with accumulated benefi t obligations in excess of plan assets are as follows:
In Millions
Projected benefi t obligation
Accumulated benefi t obligation
Plan assets at fair value
Defi ned Benefi t
Pension Plans
Fiscal Year
Other
Postretirement
Benefi t Plans
Fiscal Year
Postemployment
Benefi t Plans
Fiscal Year
2015
2014
2015
2014
2015
2014
$512.3
$433.1
$
—
$
—
$ —
$ —
440.6
375.6
1,074.8 1,070.0
143.5
145.3
—
—
582.8
517.3
—
—
Components of net periodic benefi t expense are as follows:
In Millions
Service cost
Interest cost
Defi ned Benefi t
Pension Plans
Fiscal Year
Other
Postretirement
Benefi t Plans
Fiscal Year
Postemployment
Benefi t Plans
Fiscal Year
2015
2014
2013
2015
2014
2013
2015
2014
2013
$ 137.0 $ 133.0 $ 124.4
$ 22.4 $ 22.7
$ 21.6
$ 7.5
$ 7.7
$ 7.8
249.2
239.5
237.3
46.9
50.5
52.1
Expected return on plan assets
(476.4)
(455.6)
(428.0)
(40.2)
(34.6)
(32.1)
Amortization of losses
141.7
151.0
136.0
4.9
15.4
17.1
Amortization of prior service
costs (credits)
Other adjustments
Settlement or curtailment losses
7.4
5.6
6.2
15.1
18.0
—
—
—
—
(1.6)
3.3
1.3
(3.4)
(3.4)
—
(2.9)
—
—
4.3
—
0.7
2.4
9.5
—
4.1
—
0.6
2.4
3.7
—
4.4
—
2.1
1.9
11.4
—
Net expense
$ 92.0 $ 73.5 $ 75.9
$ 37.0
$ 47.7
$ 55.3
$ 24.4
$ 18.5
$ 27.6
We expect to recognize the following amounts in net periodic benefi t expense in fi scal 2016:
In Millions
Amortization of losses
Amortization of prior service costs (credits)
Defi ned Benefi t
Pension Plans
Other Postretirement
Benefi t Plans
Postemployment
Benefi t Plans
$ 189.9
4.7
$ 6.7
(5.4)
$ 0.7
2.4
Assumptions Weighted-average assumptions used to determine fi scal year-end benefi t obligations are as follows:
Discount rate
Rate of salary increases
Defi ned Benefi t
Pension Plans
Other
Postretirement
Benefi t Plans
Postemployment
Benefi t Plans
Fiscal Year
Fiscal Year
Fiscal Year
2015
2014
2015
2014
2015
2014
4.38%
4.54%
4.20%
4.51%
3.55%
3.82%
4.09
4.44
—
—
4.36
4.44
2015 ANNUAL REPORT
7 1
Weighted-average assumptions used to determine fi scal year net periodic benefi t expense are as follows:
Defi ned Benefi t
Pension Plans
Fiscal Year
Other
Postretirement
Benefi t Plans
Fiscal Year
Postemployment
Benefi t Plans
Fiscal Year
2015
2014
2013
2015
2014
2013
2015
2014
2013
Discount rate
4.54%
4.54%
4.85%
4.51%
4.52%
4.70%
3.82%
3.70%
3.86%
Rate of salary increases
4.44
4.44
4.44
—
—
—
4.44
4.44
4.45
Expected long-term rate of
return on plan assets
8.53
8.53
8.53
8.13
8.11
8.13
—
—
—
Discount Rates Our discount rate assumptions are
determined annually as of the last day of our fi scal year
for our defi ned benefi t pension, other postretirement
benefi t, and postemployment benefi t plan obligations.
We also use the same discount rates to determine
defi ned benefi t pension, other postretirement benefi t,
and postemployment benefi t plan income and expense
for the following fi scal year. We work with our out-
side actuaries to determine the timing and amount of
expected future cash outfl ows to plan participants and,
using the Aa Above Median corporate bond yield, to
develop a forward interest rate curve, including a mar-
gin to that index based on our credit risk. Th is forward
interest rate curve is applied to our expected future cash
outfl ows to determine our discount rate assumptions.
Fair Value of Plan Assets Th e fair values of our pen-
sion and postretirement benefit plans’ assets and
their respective levels in the fair value hierarchy at
May 31, 2015 and May 25, 2014, by asset category were
as follows:
72
GENERAL MILLS
In Millions
Level 1
Level 2
Level 3
Total
Assets
Level 1
Level 2
Level 3
Total
Assets
May 31, 2015
May 25, 2014
Fair value measurement
of pension plan assets:
Equity (a)
Fixed income (b)
Real asset investments (c)
Other investments (d)
Cash and accruals
Total fair value measurement
$ 1,634.4 $ 1,010.3 $ 542.9 $ 3,187.6
$ 1,305.4 $ 793.9 $ 568.2 $ 2,667.5
486.3
1,158.5
—
1,644.8
586.3
1,347.7
—
1,934.0
124.3
116.7
498.1
739.1
98.2
128.3
602.9
829.4
—
186.6
—
—
0.4
0.4
—
—
186.6
180.6
—
—
0.3
0.3
—
180.6
of pension plan assets
$ 2,431.6 $ 2,285.5 $ 1,041.4 $ 5,758.5
$ 2,170.5 $ 2,269.9 $ 1,171.4 $ 5,611.8
Fair value measurement
of postretirement benefi t
plan assets:
Equity (a)
Fixed income (b)
Real asset investments (c)
Other investments (d)
Cash and accruals
Fair value measurement of
postretirement benefi t
$ 134.0 $ 120.6 $
23.7 $ 278.3
$
86.6 $ 129.1 $
21.1 $ 236.8
14.0
0.2
73.7
25.7
—
16.6
87.7
42.5
—
168.9
5.4
—
—
—
168.9
5.4
18.5
—
—
65.8
19.3
152.4
6.6
—
—
17.9
84.3
37.2
—
—
152.4
6.6
plan assets
$ 153.6 $ 388.9 $
40.3 $ 582.8
$ 111.7 $ 366.6 $
39.0 $ 517.3
(a) Primarily publicly traded common stock and private equity partnerships for purposes of total return and to maintain equity exposure consistent with
policy allocations. Investments include: United States and international equity securities, mutual funds, and equity futures valued at closing prices from
national exchanges; and commingled funds, privately held securities, and private equity partnerships valued at unit values or net asset values provided by
the investment managers, which are based on the fair value of the underlying investments. Various methods are used to determine fair values and may
include the cost of the investment, most recent fi nancing, and expected cash fl ows. For some of these investments, realization of the estimated fair value
is dependent upon transactions between willing sellers and buyers.
(b) Primarily government and corporate debt securities for purposes of total return and managing fi xed income exposure to policy allocations. Investments
include: fi xed income securities and bond futures generally valued at closing prices from national exchanges, fi xed income pricing models, and independent
fi nancial analysts; and fi xed income commingled funds valued at unit values provided by the investment managers, which are based on the fair value of the
underlying investments.
(c) Publicly traded common stock and limited partnerships in the energy and real estate sectors for purposes of total return. Investments include: energy and
real estate securities generally valued at closing prices from national exchanges; and commingled funds, private securities, and limited partnerships valued
at unit values or net asset values provided by the investment managers, which are generally based on the fair value of the underlying investments.
(d) Global balanced fund of equity, fi xed income, and real estate securities for purposes of meeting Canadian pension plan asset allocation policies, and insur-
ance and annuity contracts to provide a stable stream of income for retirees and to fund postretirement medical benefi ts. Fair values are derived from unit
values provided by the investment managers, which are generally based on the fair value of the underlying investments and contract fair values from the
providers.
2015 ANNUAL REPORT
73
Th e following table is a roll forward of the Level 3 investments of our pension and postretirement benefi t plans’
assets during the years ended May 31, 2015 and May 25, 2014:
In Millions
Pension benefi t plan assets:
Equity
Real asset investments
Other investments
Balance as of
May 25, 2014
Net
Transfers
Out
Fiscal 2015
Net Purchases,
Sales, Issuances, Net Gain Balance as of
(Loss) May 31, 2015
and Settlements
$ 568.2
$ —
$ (61.0)
$ 35.7 $ 542.9
602.9
0.3
—
—
(18.2)
(86.6)
498.1
0.2
(0.1)
0.4
Fair value activity of level 3 pension plan assets
$ 1,171.4
$ —
$ (79.0)
$ (51.0)
$ 1,041.4
Postretirement benefi t plan assets:
Equity
Real asset investments
$
21.1
$ —
$ 0.3
$ 2.3 $
23.7
17.9
—
0.5
(1.8)
16.6
Fair value activity of level 3 postretirement benefi t plan assets
$
39.0
$ —
$ 0.8
$ 0.5 $
40.3
In Millions
Pension benefi t plan assets:
Equity
Real asset investments
Other investments
Fiscal 2014
Balance as of
May 26, 2013
Net
Transfers
Out
Net Purchases,
Sales, Issuances,
and Settlements
Net Balance as of
Gain May 25, 2014
$ 559.3
$ —
$ (59.0)
$ 67.9 $ 568.2
430.4
0.3
—
—
(25.5)
198.0
602.9
—
—
0.3
Fair value activity of level 3 pension plan assets
$ 990.0
$ —
$ (84.5)
$ 265.9 $ 1,171.4
Postretirement benefi t plan assets:
Equity
Real asset investments
$
20.2
$ —
$ (0.7)
$ 1.6 $
21.1
14.5
(4.2)
1.4
6.2
17.9
Fair value activity of level 3 postretirement benefi t plan assets
$
34.7
$ (4.2)
$ 0.7
$ 7.8 $
39.0
Th e net change in level 3 assets attributable to unre-
alized losses at May 31, 2015, was $113.4 million for our
pension plan assets, and $1.5 million for our postretire-
ment benefi t plan assets.
Expected Rate of Return on Plan Assets Our expected
rate of return on plan assets is determined by our
asset allocation, our historical long-term investment
performance, our estimate of future long-term returns
by asset class (using input from our actuaries, invest-
ment services, and investment managers), and long-
term infl ation assumptions. We review this assumption
annually for each plan, however, our annual investment
performance for one particular year does not, by itself,
signifi cantly infl uence our evaluation.
74
GENERAL MILLS
In Millions
2016
2017
2018
2019
2020
Other
Defi ned
Benefi t
Pension
Subsidy
Benefi t Plans
Plans Gross Payments Receipts
Postretirement Medicare Postemployment
Benefi t
Plans
$ 264.7
$ 60.8
$ 4.8
$ 21.9
278.1
288.3
298.6
309.3
64.8
67.7
69.6
70.8
362.3
5.2
5.6
6.0
5.5
23.6
18.5
17.3
16.1
15.2
66.7
2021-2025
1,700.0
Defi ned Contribution Plans Th e General Mills Savings
Plan is a defi ned contribution plan that covers domestic
salaried, hourly, nonunion, and certain union employ-
ees. Th is plan is a 401(k) savings plan that includes
a number of investment funds, including a Company
stock fund and an Employee Stock Ownership Plan
(ESOP). We sponsor another money purchase plan for
certain domestic hourly employees with net assets of
$21.9 million as of May 31, 2015, and $20.6 million as
of May 25, 2014. We also sponsor defi ned contribution
plans in many of our foreign locations. Our total recog-
nized expense related to defi ned contribution plans was
$44.0 million in fi scal 2015, $44.8 million in fi scal 2014,
and $46.0 million in fi scal 2013.
We match a percentage of employee contributions to
the General Mills Savings Plan. Th e Company match
is directed to investment options of the participant’s
choosing. Th e number of shares of our common stock
allocated to participants in the ESOP was 7.5 million as
of May 31, 2015, and 8.4 million as of May 25, 2014. Th e
ESOP’s only assets are our common stock and tempo-
rary cash balances.
Th e Company stock fund and the ESOP held $655.6
million and $708.2 million of Company common stock
as of May 31, 2015, and May 25, 2014.
Weighted-average asset allocations for the past two
fi scal years for our defi ned benefi t pension and other
postretirement benefi t plans are as follows:
Defi ned Benefi t
Pension Plans
Other Postretirement
Benefi t Plans
Fiscal Year
Fiscal Year
2015
2014
2015
2014
Asset category:
United States equities 28.9%
25.5%
38.7%
38.4%
International equities
18.4
13.9
24.1
Private equities
Fixed income
Real assets
9.5
30.3
12.9
10.3
35.5
14.8
4.1
26.3
6.8
24.0
4.1
26.3
7.2
Total
100.0%
100.0% 100.0%
100.0%
Th e investment objective for our defi ned benefi t pen-
sion and other postretirement benefi t plans is to secure
the benefi t obligations to participants at a reasonable
cost to us. Our goal is to optimize the long-term return
on plan assets at a moderate level of risk. Th e defi ned
benefi t pension plan and other postretirement bene-
fi t plan portfolios are broadly diversifi ed across asset
classes. Within asset classes, the portfolios are further
diversifi ed across investment styles and investment
organizations. For the defi ned benefi t pension plans,
the long-term investment policy allocation is: 25 per-
cent to equities in the United States; 15 percent to
international equities; 10 percent to private equities; 35
percent to fi xed income; and 15 percent to real assets
(real estate, energy, and timber). For other postretire-
ment benefi t plans, the long-term investment policy
allocations are: 30 percent to equities in the United
States; 20 percent to international equities; 10 percent
to private equities; 30 percent to fi xed income; and 10
percent to real assets (real estate, energy, and timber).
Th e actual allocations to these asset classes may vary
tactically around the long-term policy allocations based
on relative market valuations.
Contributions and Future Benefi t Payment We do
not expect to be required to make contributions to our
defi ned benefi t pension, other postretirement benefi t,
and postemployment benefi t plans in fi scal 2016. Actual
fi scal 2016 contributions could exceed our current pro-
jections, as infl uenced by our decision to undertake
discretionary funding of our benefi t trusts and future
changes in regulatory requirements. Estimated bene-
fi t payments, which refl ect expected future service, as
appropriate, are expected to be paid from fi scal 2016 to
2025 as follows:
2015 ANNUAL REPORT
75
0.8
169.0
—
—
5.6
78.9
6.1
89.3
74.5
13.0
71.4
117.7
215.4
1,148.2
1,346.3
446.5
—
221.6
1,139.3
1,373.4
499.4
2.0
208.4
204.2
50.8
59.7
53.1
60.6
Earnings before income
taxes and aft er-tax earnings
from joint ventures:
Total earnings before income
taxes and aft er-tax earnings
Income taxes:
Currently payable:
Federal
State and local
Foreign
Total current
Deferred:
Federal
State and local
Foreign
Total deferred
Total income taxes
NOTE 14. INCOME TAXES
Th e components of earnings before income taxes and
aft er-tax earnings from joint ventures and the corre-
sponding income taxes thereon are as follows:
Th e tax eff ects of temporary diff erences that give
rise to deferred tax assets and liabilities are as follows:
In Millions
May 31, 2015
May 25, 2014
Accrued liabilities
$
98.0
$ 106.0
Compensation and employee benefi ts
536.2
546.0
In Millions
2015
2014
2013
Pension
Fiscal Year
Unrealized hedges
United States
Foreign
$1,338.6 $2,181.4 $2,051.2
Capital losses
423.3
473.6
483.7
Net operating losses
from joint ventures
$ 1,761.9 $ 2,655.0 $ 2,534.9
Valuation allowance
Tax credit carryforwards
Stock, partnership, and
miscellaneous investments
384.1
427.9
Other
Gross deferred tax assets
1,363.6
1,360.9
Net deferred tax assets
Brands
$ 392.7 $ 526.7 $ 493.4
Fixed assets
29.3
37.8
39.5
Pension
139.5
146.3
126.5
Intangible assets
561.5
710.8
659.4
Tax lease transactions
Inventories
Stock, partnership, and
70.3
159.1
(8.7)
21.3
(36.3)
(7.9)
25.3
172.5
68.8
19.2
(6.2)
81.8
miscellaneous investments
472.5
470.7
Unrealized hedges
Other
—
14.2
22.8
45.0
$ 586.8 $ 883.3 $ 741.2
Gross deferred tax liabilities
2,598.4
2,731.2
Net deferred tax liability
$ 1,450.2
$ 1,591.9
Th e following table reconciles the United States statu-
tory income tax rate with our eff ective income tax rate:
Fiscal Year
2015
2014
2013
35.0%
35.0%
35.0%
United States statutory rate
State and local income taxes,
net of federal tax benefi ts
Foreign rate diff erences
Repatriation of foreign earnings
0.7
(3.1)
4.5
Deferred taxes for Medicare subsidies —
GMC subsidiary restructure
Domestic manufacturing deduction
Other, net
—
(2.9)
(0.9)
1.4
(0.1)
—
—
—
(2.3)
(0.7)
1.3
(0.6)
—
(1.3)
(2.5)
(2.1)
(0.6)
Eff ective income tax rate
33.3%
33.3%
29.2%
We have established a valuation allowance against
certain of the categories of deferred tax assets described
above as current evidence does not suggest we will real-
ize suffi cient taxable income of the appropriate charac-
ter (e.g., ordinary income versus capital gain income)
within the carryforward period to allow us to realize
these deferred tax benefi ts.
Of the total valuation allowance of $215.4 million,
the majority relates to a deferred tax asset for losses
recorded as part of the Pillsbury acquisition in the
amount of $160.9 million and $47.8 million relates to
various state and foreign loss carryforwards. As of May
31, 2015, we believe it is more-likely-than-not that the
remainder of our deferred tax assets are realizable.
We have $89.9 million of operating loss carryfor-
wards. Of this amount, $78.7 million is foreign loss
carryforwards and the carryforward periods are as fol-
lows: $50.2 million do not expire; $3.8 million expire in
fi scal 2016 and 2017; and $24.7 million expire in fi scal
2018 and beyond. Th e remaining $11.2 million are state
76
GENERAL MILLS
operating loss carryforwards, the majority of which
expire aft er 2023.
We have not recognized a deferred tax liability for
unremitted earnings of approximately $1.9 billion from
our foreign operations because our subsidiaries have
invested or will invest the undistributed earnings indef-
initely, or the earnings will be remitted in a tax-neutral
transaction. It is not practicable for us to determine the
amount of unrecognized deferred tax liabilities on these
indefi nitely reinvested earnings. Deferred taxes are
recorded for earnings of our foreign operations when
we determine that such earnings are no longer indef-
initely reinvested. In fi scal 2015, we approved a one-
time repatriation of $606.1 million of foreign earnings
to reduce the economic cost of funding current restruc-
turing initiatives and the acquisition of Annie’s com-
pleted in fi scal 2015. We recorded a discrete tax charge
of $78.6 million in fi scal 2015 related to this action. We
have previously asserted that our foreign earnings are
permanently reinvested and will only be repatriated in
a tax-neutral manner, and this one-time repatriation
does not change this on-going assertion.
In fi scal 2010, we recorded a non-cash income tax
charge and decrease to our deferred tax assets of $35.0
million related to a reduction of the tax deductibility of
retiree health cost to the extent of any Medicare Part
D subsidy received beginning in fi scal 2013 under the
Patient Protection and Aff ordable Care Act, as amended
by the Health Care and Education Reconciliation Act
of 2010. During fi scal 2013, we took certain actions
to restore part of the tax benefits associated with
Medicare Part D subsidies and recorded a $33.7 mil-
lion discrete decrease to income tax expense and an
increase to our deferred tax assets.
During the fi rst quarter of fi scal 2013, in conjunction
with the consent of the Class A investor, we restruc-
tured our GMC subsidiary through the distribution of
its manufacturing assets, stock, inventory, cash, and
certain intellectual property to a wholly owned sub-
sidiary. GMC retained the remaining intellectual prop-
erty. Immediately following this restructuring, the Class
A Interests were sold by the then current holder to
another unrelated third party investor. As a result
of these transactions, we recorded a $63.3 million
decrease to deferred income tax liabilities related to the
tax basis of the investment in GMC and certain dis-
tributed assets, with a corresponding discrete non-cash
reduction to income taxes in fi scal 2013.
We are subject to federal income taxes in the United
States as well as various state, local, and foreign juris-
dictions. A number of years may elapse before an
uncertain tax position is audited and fi nally resolved.
While it is oft en diffi cult to predict the fi nal outcome or
the timing of resolution of any particular uncertain tax
position, we believe that our liabilities for income taxes
refl ect the most likely outcome. We adjust these liabili-
ties, as well as the related interest, in light of changing
facts and circumstances. Settlement of any particular
position would usually require the use of cash.
Th e number of years with open tax audits varies
depending on the tax jurisdiction. Our major taxing
jurisdictions include the United States (federal and
state) and Canada. Various tax examinations by United
States state taxing authorities could be conducted for
any open tax year, which vary by jurisdiction, but are
generally from 3 to 5 years.
Several state and foreign examinations are currently
in progress. We do not expect these examinations to
result in a material impact on our results of operations
or fi nancial position.
During fi scal 2014, the Internal Revenue Service con-
cluded its fi eld examination of our 2011 and 2012 tax
years. Th e audit closure and related adjustments did
not have a material impact on our results of opera-
tions or fi nancial position. As of May 31, 2015, we have
eff ectively settled all issues with the Internal Revenue
Service for fi scal years 2012 and prior.
We apply a more-likely-than-not threshold to the rec-
ognition and derecognition of uncertain tax positions.
Accordingly, we recognize the amount of tax benefi t
that has a greater than 50 percent likelihood of being
ultimately realized upon settlement. Future changes in
judgment related to the expected ultimate resolution of
uncertain tax positions will aff ect earnings in the quar-
ter of such change.
Th e following table sets forth changes in our total
gross unrecognized tax benefit liabilities, excluding
accrued interest, for fi scal 2015 and 2014. Approximately
$84 million of this total in fi scal 2015 represents the
amount that, if recognized, would aff ect our eff ective
income tax rate in future periods. Th is amount diff ers
from the gross unrecognized tax benefi ts presented in
the table because certain of the liabilities below would
impact deferred taxes if recognized. We also would
record a decrease in U.S. federal income taxes upon rec-
ognition of the state tax benefi ts included therein.
2015 ANNUAL REPORT
7 7
In Millions
Fiscal Year
2015
2014
Noncancelable future lease commitments are:
Balance, beginning of year
$150.9
$216.2
Tax positions related to current year:
Additions
34.8
26.5
Tax positions related to prior years:
Additions
Reductions
Settlements
Lapses in statutes of limitations
17.4
(21.8)
(12.0)
(8.2)
15.1
(94.5)
(5.4)
(7.0)
Balance, end of year
$161.1
$150.9
As of May 31, 2015, we expect to pay approximately
$1.4 million of unrecognized tax benefi t liabilities and
accrued interest within the next 12 months. We are not
able to reasonably estimate the timing of future cash
fl ows beyond 12 months due to uncertainties in the
timing of tax audit outcomes. Th e remaining amount
of our unrecognized tax liability was classifi ed in other
liabilities.
We report accrued interest and penalties related
to unrecognized tax benefi t liabilities in income tax
expense. For fi scal 2015, we recognized a net benefi t of
$0.2 million of tax-related net interest and penalties,
and had $35.2 million of accrued interest and penalties
as of May 31, 2015. For fi scal 2014, we recognized a net
benefi t of $4.6 million of tax-related net interest and
penalties, and had $42.0 million of accrued interest and
penalties as of May 25, 2014.
In Millions
Fiscal 2016
Fiscal 2017
Fiscal 2018
Fiscal 2019
Fiscal 2020
Aft er Fiscal 2020
Total noncancelable future
lease commitments
Less: interest
Operating
Leases
Capital
Leases
$ 108.4
$ 0.6
76.2
56.9
45.0
32.4
81.6
$ 400.5
0.4
0.2
0.2
0.1
—
$ 1.5
(0.1)
$ 1.4
Present value of obligations under capital leases
Th ese future lease commitments will be partially off -
set by estimated future sublease receipts of approxi-
mately $4 million. Depreciation on capital leases is
recorded as depreciation expense in our results of
operations.
As of May 31, 2015, we have issued guarantees and
comfort letters of $434.4 million for the debt and other
obligations of consolidated subsidiaries, and guarantees
and comfort letters of $258.5 million for the debt and
other obligations of non-consolidated affi liates, mainly
CPW. In addition, off-balance sheet arrangements
are generally limited to the future payments under
non-cancelable operating leases, which totaled $400.5
million as of May 31, 2015.
NOTE 15. LEASES, OTHER COMMITMENTS,
AND CONTINGENCIES
NOTE 16. BUSINESS SEGMENT AND
GEOGRAPHIC INFORMATION
The Company’s leases are generally for warehouse
space and equipment. Rent expense under all operating
leases from continuing operations was $193.5 million,
$189.0 million, and $187.9 million in fi scal 2015, 2014,
and 2013, respectively.
Some operating leases require payment of property
taxes, insurance, and maintenance costs in addition to
the rent payments. Contingent and escalation rent in
excess of minimum rent payments and sublease income
netted in rent expense were insignifi cant.
We operate in the consumer foods industry. We have
three operating segments by type of customer and geo-
graphic region as follows: U.S. Retail, 59.6 percent of
our fi scal 2015 consolidated net sales; International, 29.1
percent of our fi scal 2015 consolidated net sales; and
Convenience Stores and Foodservice, 11.3 percent of our
fi scal 2015 consolidated net sales.
Beginning in the fi rst quarter of fi scal 2015, we have
changed how we assess operating segment perfor-
mance to exclude the asset and liability remeasurement
impact from hyperinfl ationary economies. Th is impact
is now included in unallocated corporate items. All peri-
ods presented have been changed to conform to this
presentation.
Beginning with the second quarter of fi scal 2015, we
realigned certain operating units within our U.S. Retail
operating segment. We also changed the name of our
78
GENERAL MILLS
Yoplait operating unit to Yogurt and our Big G operat-
ing unit to Cereal. Frozen Foods transitioned into Meals
and Baking Products. Small Planet Foods transitioned
into Snacks, Cereal, and Meals. Th e Yogurt operating
unit was unchanged. We revised the amounts previously
reported in the net sales and net sales percentage change
by operating unit within our U.S. Retail segment to con-
form to the new operating unit structure. Th ese realign-
ments had no eff ect on previously reported consolidated
net sales, operating segments’ net sales, operating profi t,
segment operating profit, net earnings attributable
to General Mills, or EPS. In addition, results from the
acquired Annie’s business are included in the Meals and
Snacks operating units. Our chief operating decision
maker continues to assess performance and make deci-
sions about resources to be allocated to our segments
at the U.S. Retail, International, and Convenience Stores
and Foodservice operating segment level.
Our U.S. Retail segment refl ects business with a wide
variety of grocery stores, mass merchandisers, mem-
bership stores, natural food chains, and drug, dollar
and discount chains operating throughout the United
States. Our product categories in this business segment
are ready-to-eat cereals, refrigerated yogurt, soup, meal
kits, shelf stable and frozen vegetables, refrigerated
and frozen dough products, dessert and baking mixes,
frozen pizza and pizza snacks, grain, fruit and savory
snacks, and a wide variety of organic products includ-
ing meal kits, granola bars, and cereal.
Our International segment consists of retail and
foodservice businesses outside of the United States.
Our product categories include ready-to-eat cereals,
shelf stable and frozen vegetables, meal kits, refriger-
ated and frozen dough products, dessert and baking
mixes, frozen pizza snacks, refrigerated yogurt, grain
and fruit snacks, and super-premium ice cream and fro-
zen desserts. 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 inter-
national joint ventures. Revenues from export activities
and franchise fees are reported in the region or country
where the end customer is located.
In our Convenience Stores and Foodservice segment our
major product categories are ready-to-eat cereals, snacks,
refrigerated yogurt, frozen breakfasts, unbaked and fully
baked frozen dough products, baking mixes, and fl our.
Many products we sell are branded to the consumer and
nearly all are branded to our customers. We sell to distrib-
utors and operators in many customer channels including
foodservice, convenience stores, vending, and supermar-
ket bakeries. Substantially all of this segment’s operations
are located in the United States.
Operating profi t for these segments excludes unal-
located corporate items and restructuring, impair-
ment, and other exit costs. Unallocated corporate
items include corporate overhead expenses, variances
to planned domestic employee benefi ts and incentives,
contributions to the General Mills Foundation, asset
and liability remeasurement impact of hyperinfl ationary
economies, restructuring initiative project-related costs,
and other items that are not part of our measurement
of segment operating performance. Th ese 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. Th ese items aff ecting
operating profi t are centrally managed at the corporate
level and are excluded from the measure of segment
profi tability 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
effi ciency and productivity. As a result, fi xed assets and
depreciation and amortization expenses are neither
maintained nor available by operating segment.
Our operating segment results were as follows:
In Millions
Net sales:
U.S. Retail
Fiscal Year
2015
2014
2013
$10,507.0 $10,604.9 $10,614.9
International
5,128.2
5,385.9
5,200.2
Convenience Stores
and Foodservice
1,995.1
1,918.8
1,959.0
Total
Operating profi t:
U.S. Retail
International
Convenience Stores
$17,630.3 $17,909.6 $17,774.1
$ 2,159.3 $ 2,311.5 $ 2,392.9
522.6
535.1
515.4
and Foodservice
353.1
307.3
314.6
Total segment operating profi t 3,035.0
3,153.9
3,222.9
Unallocated corporate items
413.8
258.4
351.3
Divestiture (gain)
—
(65.5)
—
Restructuring, impairment,
and other exit costs
543.9
3.6
19.8
Operating profi t
$ 2,077.3 $ 2,957.4 $ 2,851.8
2015 ANNUAL REPORT
79
Net sales by class of similar products were as follows:
NOTE 17. SUPPLEMENTAL INFORMATION
In Millions
Snacks
Yogurt
Fiscal Year
2015
2014
2013
$ 3,392.0 $ 3,232.5 $ 3,024.0
2,938.3
2,964.7
2,908.4
Convenient meals
2,810.3
2,844.2
2,802.9
2,771.3
2,860.1
2,889.2
Th e components of certain Consolidated Balance Sheet
accounts are as follows:
In Millions
Receivables:
May 31,
2015
May 25,
2014
1,877.0
1,890.2
1,944.7
From customers
$ 1,412.0 $ 1,504.6
Cereal
Dough
Baking mixes and ingredients 1,867.7
1,996.4
1,999.5
Less allowance for doubtful accounts
(25.3)
(21.0)
Vegetables
937.3
1,014.7
1,089.5
Total
$ 1,386.7 $ 1,483.6
Super-premium ice cream
Other
Total
769.5
266.9
756.6
350.2
717.1
398.8
$17,630.3 $17,909.6 $17,774.1
In Millions
Inventories:
May 31,
2015
May 25,
2014
Th e following table provides fi nancial information by
geographic area:
In Millions
Net sales:
Fiscal Year
2015
2014
2013
United States
$12,501.8 $12,523.0 $12,573.1
Non-United States
5,128.5
5,386.6
5,201.0
Total
$17,630.3 $17,909.6 $17,774.1
Raw materials and packaging
$ 390.8 $ 419.0
Finished goods
Grain
Excess of FIFO over LIFO cost (a)
Total
1,268.6
1,260.2
95.7
97.1
(214.2)
(216.9)
$ 1,540.9 $ 1,559.4
(a) Inventories of $867.5 million as of May 31, 2015, and $904.2 million as
of May 25, 2014, were valued at LIFO. During fi scal 2015, LIFO inventory
layers were reduced. Results of operations were not materially aff ected
by these liquidations of LIFO inventory. Th e diff erence between replace-
ment cost and the stated LIFO inventory value is not materially diff er-
ent from the reserve for the LIFO valuation method.
In Millions
Cash and cash equivalents:
United States
Non-United States
Total
In Millions
Land, buildings, and equipment:
United States
Non-United States
Total
May 31,
2015
May 25,
2014
In Millions
May 31,
2015
May 25,
2014
Prepaid expenses and other current assets:
$
22.9 $
27.2
311.3
840.1
$
334.2 $ 867.3
Other receivables
Prepaid expenses
Derivative receivables,
May 31,
2015
May 25,
2014
$ 2,727.5 $ 2,756.6
1,055.8
1,185.3
primarily commodity-related
Grain contracts
Miscellaneous
Total
$ 3,783.3 $ 3,941.9
In Millions
Land, buildings, and equipment:
Land
Buildings
Buildings under capital lease
Equipment
Equipment under capital lease
Capitalized soft ware
Construction in progress
$
148.8 $ 153.9
169.3
187.2
80.9
3.3
21.5
33.3
7.5
27.2
$
423.8 $ 409.1
May 31,
2015
May 25,
2014
$
96.0 $ 106.9
2,272.7
2,228.4
0.3
0.3
6,091.1
5,979.7
9.8
9.0
499.0
468.0
622.2
600.8
Total land, buildings, and equipment
9,591.1
9,393.1
Less accumulated depreciation
(5,807.8)
(5,451.2)
Total
$ 3,783.3 $ 3,941.9
80
GENERAL MILLS
May 31,
2015
May 25,
2014
Th e components of interest, net are as follows:
Fiscal Year
Expense (Income), In Millions
2015
2014
2013
Interest expense
Capitalized interest
Interest income
Interest, net
$335.5
$323.4
$333.8
(6.9)
(4.9)
(13.2)
(16.1)
(4.3)
(12.6)
$315.4
$302.4
$316.9
Certain Consolidated Statements of Cash Flows
amounts are as follows:
In Millions
2015
2014
2013
Cash interest payments
$305.3
$288.3
$293.0
Cash paid for income taxes
562.6
757.2
569.4
Fiscal Year
In Millions
Other assets:
Investments in and advances
to joint ventures
Pension assets
Exchangeable note with related party
Life insurance
Miscellaneous
Total
In Millions
Accrued payroll
Dividends payable
Accrued taxes
Accrued interest, including
interest rate swaps
Grain contracts
$ 530.6 $ 507.5
138.2
432.2
30.7
26.6
68.2
25.8
117.5
111.8
$ 843.6
$1,145.5
May 31,
2015
May 25,
2014
361.8
390.1
27.9
20.7
91.8
7.8
33.5
63.1
92.5
4.8
3.5
Other current liabilities:
Accrued trade and consumer promotions $ 564.7 $ 578.2
Restructuring and other exit costs reserve 120.8
Derivative payable
Miscellaneous
Total
In Millions
Other noncurrent liabilities:
Accrued compensation and benefi ts,
including obligations for underfunded
other postretirement benefi t and
122.9
23.1
271.5
261.1
$1,589.9 $1,449.9
May 31,
2015
May 25,
2014
postemployment benefi t plans
$1,451.4 $1,341.9
Accrued taxes
Miscellaneous
Total
202.5
195.6
90.9
105.7
$1,744.8
$1,643.2
Certain Consolidated Statements of Earnings amounts
are as follows:
In Millions
2015
2014
2013
Depreciation and amortization
$588.3
$585.4
$588.0
Fiscal Year
Research and
development expense
229.4
243.6
237.9
Advertising and media
expense (including production
and communication costs)
823.1
869.5
895.0
2015 ANNUAL REPORT
81
NOTE 18. QUARTERLY DATA (UNAUDITED)
Summarized quarterly data for fi scal 2015 and fi scal 2014 follows:
In Millions, Except Per Share Amounts
2015
2014
2015
2014
2015
2014
2015
2014
First Quarter
Fiscal Year
Second Quarter
Fiscal Year
Th ird Quarter
Fiscal Year
Fourth Quarter
Fiscal Year
Net sales
Gross margin
Net earnings attributable
to General Mills
EPS:
Basic
Diluted
Dividends per share
Market price of common stock:
High
Low
$4,268.4 $4,372.7
$4,712.2 $4,875.7
$4,350.9 $4,377.4
$4,298.8 $4,283.8
1,438.7 1,613.0
1,619.1 1,761.7
1,375.9 1,512.7
1,515.5 1,482.4
345.2
459.3
346.1
549.9
343.2
410.6
186.8
404.6
$
$
$
0.56 $
0.71
0.55 $
0.70
0.41 $
0.38
$
$
$
0.58 $
0.87
0.56 $
0.84
0.41 $
0.38
$
$
$
0.57 $
0.66
0.56 $
0.64
0.41 $
0.38
$
$
$
0.31 $
0.66
0.30 $
0.65
0.44 $
0.41
$ 55.56 $ 52.73
$ 53.82 $ 51.53
$ 55.11 $ 51.50
$ 57.14 $ 54.40
$ 50.15 $ 47.08
$ 48.86 $ 47.41
$ 51.13 $ 46.86
$ 51.70 $ 49.66
At the end of the fourth quarter of fi scal 2015, we made a strategic decision to redirect certain resources sup-
porting our Green Giant business in our U.S. Retail segment to other businesses within the segment. Th erefore, we
recorded a $260 million impairment charge in the fourth quarter of fi scal 2015 related to the Green Giant brand
intangible asset. See Note 6 for additional information.
During the fourth quarter of fi scal 2015, we approved a one-time repatriation of $606.1 million of foreign earnings
and recorded a discrete income tax charge of $78.6 million.
During the fourth quarter of fi scal 2014, we sold certain grain elevators in our U.S. Retail segment and recorded a
pre-tax gain of $65.5 million.
82
GENERAL MILLS
Glossary
Accelerated depreciation associated with restructured
assets. Th e increase in depreciation expense caused by
updating the salvage value and shortening the useful
life of depreciable fi xed assets to coincide with the end
of production under an approved restructuring plan,
but only if impairment is not present.
AOCI. Accumulated other comprehensive income
(loss).
Average total capital. Notes payable, long-term debt
including current portion, redeemable interest, noncon-
trolling interests, and stockholders’ equity excluding
AOCI, and certain aft er-tax earnings adjustments are
used to calculate return on average total capital. Th e
average is calculated using the average of the begin-
ning of fi scal year and end of fi scal year Consolidated
Balance Sheet amounts for these line items.
Constant currency. Financial results translated to
U.S. dollars using constant foreign currency exchange
rates based on the rates in eff ect 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 eff ect
during the corresponding period of the prior fi scal year,
rather than the actual average exchange rates in eff ect
during the current fi scal year. Th erefore, 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
fi scal period and the corresponding period of the prior
fi scal year.
Core working capital. Accounts receivable plus
inventories less accounts payable, all as of the last day
of our fi scal year.
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. European Interbank Off ered Rate.
Fair value hierarchy. For purposes of fair value mea-
surement, 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 gen-
erally requires signifi cant management judgment. Th e
three levels are defi ned 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 liabili-
ties in inactive markets.
Level 3: Unobservable inputs refl ecting management’s
assumptions about the inputs used in pricing
the asset or liability.
Fixed charge coverage ratio. Th e sum of earnings
before income taxes and fi xed charges (before tax),
divided by the sum of the fi xed charges (before tax) and
interest.
Generally Accepted Accounting Principles (GAAP).
Guidelines, procedures, and practices that we are
required to use in recording and reporting accounting
information in our fi nancial statements.
Goodwill. Th e diff erence between the purchase price
of acquired companies plus the fair value of any non-
controlling 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 off set corresponding changes in the hedged item in
the same reporting period. Hedge accounting is permit-
ted for certain hedging instruments and hedged items
only if the hedging relationship is highly eff ective, and
only prospectively from the date a hedging relationship
is formally documented.
Interest bearing instruments. Notes payable, long-
term debt, including current portion, cash and cash
equivalents, and certain interest bearing investments
classifi ed within prepaid expenses and other current
assets and other assets.
2015 ANNUAL REPORT
83
Supply chain input costs. Costs incurred to produce
and deliver product, including costs for ingredients
and conversion, inventory management, logistics, and
warehousing.
Total debt. Notes payable and long-term debt, includ-
ing current portion.
Transaction gains and losses. Th e impact on our
Consolidated Financial Statements of foreign exchange
rate changes arising from specifi c transactions.
Translation adjustments. Th e impact of the con-
version of our foreign affi liates’ fi nancial statements to
U.S. dollars for the purpose of consolidating our fi nan-
cial 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 profi ts and losses or (2) has
equity investors that do not provide suffi cient fi nancial
resources to support the entity’s activities.
Working capital. Current assets and current liabili-
ties, all as of the last day of our fi scal year.
LIBOR. London Interbank Off ered Rate.
Mark-to-market. Th e act of determining a value
for fi nancial instruments, commodity contracts, and
related assets or liabilities based on the current market
price for that item.
Net mark-to-market valuation of certain commod-
ity positions. Realized and unrealized gains and losses
on derivative contracts that will be allocated to seg-
ment operating profi t when the exposure we are hedg-
ing aff ects earnings.
Net price realization. Th e impact of list and pro-
moted price changes, net of trade and other price pro-
motion costs.
Noncontrolling interests. Interests of subsidiaries
held by third parties.
Notional principal amount. Th e principal amount on
which fi xed-rate or fl oating-rate interest payments are
calculated.
OCI. Other comprehensive income (loss).
Operating cash fl ow to debt ratio. Net cash provided
by operating activities, divided by the sum of notes
payable and long-term debt, including the current
portion.
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 classifi ed as a noncon-
trolling interest in equity.
Reporting unit. An operating segment or a business
one level below an operating segment.
Return on average total capital. Net earnings attrib-
utable to General Mills, excluding aft er-tax net interest,
and adjusted for certain items aff ecting year-over-year
comparability, divided by average total capital.
Segment operating profi t margin. Segment operat-
ing profi t divided by net sales for the segment.
84
GENERAL MILLS
Total Return to Stockholders
Th ese line graphs compare the cumulative total return
for holders of our common stock with the cumulative
total return of the Standard & Poor’s 500 Stock Index
and Standard & Poor’s 500 Packaged Foods Index for
the last fi ve-year and ten-year fi scal periods. Th e graphs
assume the investment of $100 in each of General Mills’
common stock and the specifi ed indexes at the begin-
ning of the applicable period, and assume the reinvest-
ment of all dividends.
On June 19, 2015, there were approximately 32,000
record holders of our common stock.
Total Return to Stockholders
5 Years
x
e
d
n
I
n
r
u
t
e
R
l
a
t
o
T
x
e
d
n
I
n
r
u
t
e
R
l
a
t
o
T
240
220
200
180
160
140
120
100
80
60
40
20
0
May 10
May 11
May 12
May 13
May 14
May 15
Total Return to Stockholders
10 Years
320
300
280
260
240
220
200
180
160
140
120
100
80
60
40
20
0
May 05 May 06 May 07 May 08 May 09 May 10 May 11 May 12 May 13 May 14 May 15
General Mills (GIS)
S&P 500
S&P Packaged Foods
2015 ANNUAL REPORT
85
Board of Directors
As of August 1, 2015
Bradbury H. Anderson(cid:3)2*,(cid:3)5
Retired Chief Executive Offi cer
and Vice Chairman,
Best Buy Co., Inc.
(electronics retailer)
R. Kerry Clark(cid:3)3,(cid:3)4*
Retired Chairman and
Chief Executive Offi cer,
Cardinal Health, Inc.
(medical services and supplies)
David M. Cordani(cid:3)1,(cid:3)2
President and Chief Executive
Offi cer, Cigna Corporation
(health insurance and services)
Henrietta H. Fore(cid:3)1,(cid:3)5
Chairman and
Chief Executive Offi cer,
Holsman International
(manufacturing, consulting
and investing)
Raymond V. Gilmartin(cid:3)1,(cid:3)2,(cid:3)+
Retired Chairman, President
and Chief Executive Offi cer,
Merck & Company, Inc.
(pharmaceuticals)
Judith Richards Hope(cid:3)2,(cid:3)4,(cid:3)+
Retired Professor of Law,
Georgetown University
Law Center
Paul Danos(cid:3)3,(cid:3)5*
Dean Emeritus,
Tuck School of Business and
Laurence F. Whittemore Professor
of Business Administration,
Dartmouth College
Heidi G. Miller(cid:3)1*,(cid:3)3
Retired President,
JPMorgan International,
JPMorgan Chase & Co.
(banking and fi nancial services)
Hilda Ochoa-Brillembourg(cid:3)1,(cid:3)5,(cid:3)+
Founder, Chairman and
Chief Executive Offi cer,
Strategic Investment Group
(investment management)
Robert L. Ryan(cid:3)1,(cid:3)3*
Retired Senior Vice President
and Chief Financial Offi cer,
Medtronic, Inc.
(medical technology)
Steve Odland(cid:3)2,(cid:3)4
President and Chief Executive
Offi cer, Committee for Economic
Development (public policy)
and Former Chairman and Chief
Executive Offi cer, Offi ce Depot,
Inc. (offi ce products retailer)
Kendall J. Powell
Chairman and Chief Executive
Offi cer, General Mills, Inc.
Michael D. Rose(cid:3)2,(cid:3)4,(cid:3)**
Retired Chairman of the Board,
First Horizon National Corporation
(banking and fi nancial services)
Dorothy A. Terrell(cid:3)4,(cid:3)5
Managing Partner, FirstCap
Advisors (venture capital)
Board Committees
1 Audit
2 Compensation
3 Finance
4 Corporate Governance
5 Public Responsibility
* Denotes Committee Chair
** Denotes Independent
Lead Director
+Retiring September 2015
Senior Management
As of August 1, 2015
Richard C. Allendorf
Senior Vice President;
General Counsel and Secretary
John M. Foraker
Vice President; President,
Annie’s Foods
Elizabeth M. Nordlie
Vice President;
President, Baking
Gary Chu
Senior Vice President;
President, Greater China
John R. Church
Executive Vice President,
Supply Chain
David V. Clark
Vice President;
President, Yoplait USA
David E. Dudick Sr.
Senior Vice President;
President, General Mills Canada
Mary J. Ekman
Senior Vice President,
U.S. Retail Finance
Peter C. Erickson
Executive Vice President,
Innovation, Technology
and Quality
Olivier Faujour
Vice President;
President, Yoplait International
Jeff rey L. Harmening
Executive Vice President;
Chief Operating Offi cer,
U.S. Retail
David P. Homer
Senior Vice President;
Chief Executive Offi cer,
Cereal Partners Worldwide
Christina Law
Vice President;
President, Asia, Middle East
and Africa
Michele S. Meyer
Senior Vice President;
President, Meals
Donal L. Mulligan
Executive Vice President;
Chief Financial Offi cer
James H. Murphy
Senior Vice President;
President, Big G Cereals
Kimberly A. Nelson
Senior Vice President,
External Relations; President,
General Mills Foundation
Jonathon J. Nudi
Senior Vice President;
President, Europe,
Australia and New Zealand
Rebecca L. O’Grady
Vice President;
President, Häagen-Dazs
Strategic Business Unit
Shawn P. O’Grady
Senior Vice President;
President, Sales and
Channel Development
Christopher D. O’Leary
Executive Vice President;
Chief Operating Offi cer,
International
Kendall J. Powell
Chairman and
Chief Executive Offi cer
Bethany C. Quam
Vice President;
President, Convenience Stores
and Foodservice
86
GENERAL MILLS
Ann W. H. Simonds
Senior Vice President;
Chief Marketing Offi cer
Anton V. Vincent
Vice President;
President, Snacks
Sean N. Walker
Senior Vice President;
President, Latin America
Kristen S. Wenker(cid:3)+
Senior Vice President,
Investor Relations
Jacqueline R. Williams-Roll
Senior Vice President,
Human Resources
Keith A. Woodward
Senior Vice President;
Treasurer
Jerald A. Young
Vice President; Controller
+Retiring September 2015
Shareholder Information
World Headquarters
Number One General Mills Boulevard
Minneapolis, MN 55426-1347
Phone: (763) 764-7600
Transfer Agent and Registrar
Our transfer agent can assist you with a
variety of services, including change of address
or questions about dividend checks:
Wells Fargo Bank, N.A.
1110 Centre Pointe Curve
Mendota Heights, MN 55120-4100
Phone: (800) 670-4763 or (651) 450-4084
shareowneronline.com
Electronic Access to Proxy Statement,
Annual Report and Form 10-K
Shareholders who have access to the Internet
are encouraged to enroll in the electronic
delivery program. Please see the Investors
section of GeneralMills.com, or go directly
to the website, ICSDelivery.com/GIS and follow
the instructions to enroll. If your General Mills
shares are not registered in your name, contact
your bank or broker to enroll in this program.
Website
GeneralMills.com
Markets
New York Stock Exchange
Trading Symbol: GIS
Independent Auditor
KPMG LLP
4200 Wells Fargo Center
90 South Seventh Street
Minneapolis, MN 55402-3900
Phone: (612) 305-5000
Investor Inquiries
General Shareholder Information:
Investor Relations Department
(800) 245-5703 or (763) 764-3202
Analysts/Investors:
Jeff Siemon
Director, Investor Relations
Phone: (763) 764-2301
Notice of Annual Meeting
The annual meeting of shareholders will be
held at 8:30 a.m., Central Daylight Time,
Tuesday, Sept. 29, 2015, at the Hilton Hotel
Minneapolis, 1001 Marquette Avenue South,
Minneapolis, MN 55403. Proof of share
ownership is required for admission. Please
refer to the Proxy Statement for information
concerning admission to the meeting.
General Mills Direct Stock Purchase Plan
This plan provides a convenient and economical
way to invest in General Mills stock. You can
increase your ownership over time through
purchases of common stock and reinvestment
of cash dividends, without paying brokerage
commissions and other fees on your purchases
and reinvestments. For more information and
a copy of a plan prospectus, go to the Investors
section of GeneralMills.com
Global Responsibility Report
We are committed to creating economic, social and environmental value
around the world as we pursue our purpose of making food people love.
Our eff orts include providing convenient, nutritious food for consumers
globally, building strong communities through philanthropy and volun-
teerism, and developing sustainable business practices that reduce our
impact on the environment.
For a comprehensive review of our commitment to stand among the
most socially responsible food companies in the world, see our Global
Responsibility Report available at GeneralMills.com/Responsibility.
Holiday Gift Boxes
General Mills Gift Boxes are a part of many shareholders’ December
holiday traditions. To request an order form, call us toll-free at
(888) 496-7809 or write, including your name, street address, city,
state, ZIP code and phone number (including area code) to:
2015 General Mills Holiday Gift Box
Department 10432
P.O. Box 5015
Stacy, MN 55078-5015
Or you can place an order online at: GMIHolidayGiftBox.com
Please contact us after October 1, 2015.
This report is printed
on recycled paper.
©2015 General Mills
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Number One General Mills Boulevard
Minneapolis, MN 55426-1347
GeneralMills.com