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10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-Q

(Mark One)

☑

QUARTERLY

REPORT

PURSUANT

SECTION

15(d)

THE

SECURITIES

EXCHANGE

ACT

1934

FOR THE QUARTERLY

PERIOD ENDED

NOVEMBER 27, 2022

☐

TRANSITION

REPORT

PURSUANT

SECTION

15(d)

THE

SECURITIES

EXCHANGE

ACT

1934

FOR THE TRANSITION PERIOD FROM

Commission file number:

001-01185

________________

GENERAL MILLS, INC.

(Exact name of registrant as specified in its charter)

Delaware

41-0274440

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

Number One General Mills Boulevard

Minneapolis

Minnesota

55426

(Address of principal executive offices)

(Zip Code)

(763)

764-7600

(Registrant’s telephone number,

including area code)

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

Title of each class

Trading Symbol(s)

Name of each exchange

on which registered

Common Stock, $.10 par value

GIS

New York Stock Exchange

1.000% Notes due 2023

GIS23A

New York Stock Exchange

0.125% Notes due 2025

GIS25A

New York Stock Exchange

0.450% Notes due 2026

GIS26

New York Stock Exchange

1.500% Notes due 2027

GIS27

New York Stock Exchange

________________

Indicate

check

mark

whether

the

registrant

(1)

has

filed

all

reports

required

filed

Section

15(d)

the

Securities

Exchange Act of 1934

during the preceding 12

months (or for such shorter

period that the registrant

was required to file such

reports),

and (2) has been subject to such filing requirements for the past 90 days.

Yes

☑

☐

Indicate

check

mark

whether

the

registrant

has

submitted

electronically

every

Interactive

Data

File

required

submitted

pursuant to Rule

405 of Regulation

S-T during

the preceding 12

months (or for

such shorter period

that the registrant

was required

submit such files).

Yes

☑

☐

Indicate by check mark

whether the registrant is a

large accelerated filer,

an accelerated filer,

a non-accelerated filer,

smaller reporting

company,

emerging

growth

company.

See

the

definitions

“large

accelerated

filer,”

“accelerated

filer,”

“smaller

reporting

company,” and “emerging

growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

emerging

growth

company,

indicate

check

mark

the

registrant

has

elected

not

use

the

extended

transition

period

for

complying with any new or revised financial accounting standards provided

pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined

in Rule 12b-2 of the Exchange Act).

Yes

☐

☑

Number

of shares

of Common

Stock outstanding

as of

December 13,

2022:

589,610,717

(excluding

165,002,611

shares held

in the

treasury).

General Mills, Inc.

Table of Contents

Page

PART I – Financial Information

Item 1. Financial Statements

Consolidated Statements of Earnings for the quarters and six-month periods ended November 27, 2022 and

November 28, 2021

Consolidated Statements of Comprehensive Income for the quarters and six-month periods ended November

27, 2022 and November 28, 2021

Consolidated Balance Sheets as of November 27, 2022 and May 29, 2022

Consolidated Statements of Total Equity and Redeemable Interest for the quarters and six-month periods

ended November 27, 2022 and November 28, 2021

Consolidated Statements of Cash Flows for the six-month periods ended November 27, 2022 and November

28, 2021

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Item 4. Controls and Procedures

PART II – Other Information

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

Item 6. Exhibits

Signatures

PART

FINANCIAL INFORMATION

Item 1.

Financial Statements

Consolidated Statements of Earnings

GENERAL MILLS, INC. AND SUBSIDIARIES

(Unaudited) (In Millions, Except per Share Data)

Quarter Ended

Six-Month Period Ended

Nov. 27, 2022

Nov. 28, 2021

Nov. 27, 2022

Nov. 28, 2021

Net sales

5,220.7

5,024.0

9,938.3

9,563.9

Cost of sales

3,515.6

3,392.8

6,785.5

6,335.3

Selling, general, and administrative expenses

894.2

828.8

1,685.6

1,586.2

Divestitures gain, net

(430.9)

Restructuring, impairment, and other exit

costs (recoveries)

11.1

2.3

12.7

(2.0)

Operating profit

799.8

800.1

1,885.4

1,644.4

Benefit plan non-service income

(21.7)

(27.7)

(43.4)

(57.3)

Interest, net

91.5

92.7

179.2

188.6

Earnings before income taxes and after-tax earnings

from

joint ventures

730.0

735.1

1,749.6

1,513.1

Income taxes

147.1

159.7

363.2

328.6

After-tax earnings from joint ventures

25.4

33.0

45.2

62.1

Net earnings, including earnings attributable to redeemable

and noncontrolling interests

608.3

608.4

1,431.6

1,246.6

Net earnings attributable to redeemable and

noncontrolling interests

2.4

11.2

5.7

22.4

Net earnings attributable to General Mills

605.9

597.2

1,425.9

1,224.2

Earnings per share – basic

1.01

0.98

2.38

2.01

Earnings per share – diluted

1.01

0.97

2.36

1.99

See accompanying notes to consolidated financial statements.

Consolidated Statements of Comprehensive Income

GENERAL MILLS, INC. AND SUBSIDIARIES

(Unaudited) (In Millions)

Quarter Ended

Six-Month Period Ended

Nov. 27, 2022

Nov. 28, 2021

Nov. 27, 2022

Nov. 28, 2021

Net earnings, including earnings attributable to

redeemable and noncontrolling interests

608.3

608.4

1,431.6

1,246.6

Other comprehensive loss, net of tax:

Foreign currency translation

(115.0)

(38.5)

(111.2)

(62.4)

Other fair value changes:

Hedge derivatives

20.8

18.7

(17.5)

20.4

Reclassification to earnings:

Foreign currency translation

(7.4)

Hedge derivatives

1.0

(6.4)

(0.4)

4.2

Amortization of losses and prior service costs

14.2

22.8

28.3

31.2

Other comprehensive loss, net of tax

(79.0)

(3.4)

(108.2)

(6.6)

Total comprehensive

income

529.3

605.0

1,323.4

1,240.0

Comprehensive income (loss) attributable to

redeemable and noncontrolling interests

3.0

(25.8)

5.0

(49.3)

Comprehensive income attributable to General Mills

526.3

630.8

1,318.4

1,289.3

See accompanying notes to consolidated financial statements.

Consolidated Balance Sheets

GENERAL MILLS, INC. AND SUBSIDIARIES

(In Millions, Except Par Value)

Nov. 27, 2022

May 29, 2022

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

644.1

569.4

Receivables

1,834.0

1,692.1

Inventories

2,121.3

1,867.3

Prepaid expenses and other current assets

731.2

802.1

Assets held for sale

158.9

Total current

assets

5,330.6

5,089.8

Land, buildings, and equipment

3,358.0

3,393.8

Goodwill

14,476.0

14,378.5

Other intangible assets

6,974.8

6,999.9

Other assets

1,180.4

1,228.1

Total assets

31,319.8

31,090.1

LIABILITIES

AND EQUITY

Current liabilities:

Accounts payable

4,022.6

3,982.3

Current portion of long-term debt

1,964.3

1,674.2

Notes payable

1,153.4

811.4

Other current liabilities

2,067.9

1,552.0

Total current

liabilities

9,208.2

8,019.9

Long-term debt

8,622.5

9,134.8

Deferred income taxes

2,186.9

2,218.3

Other liabilities

930.1

929.1

Total liabilities

20,947.7

20,302.1

Stockholders' equity:

Common stock,

754.6

shares issued, $

0.10

par value

75.5

Additional paid-in capital

1,155.3

1,182.9

Retained earnings

18,991.9

18,532.6

Common stock in treasury,

at cost, shares of

164.4

and

155.7

(8,023.5)

(7,278.1)

Accumulated other comprehensive loss

(2,078.0)

(1,970.5)

Total stockholders' equity

10,121.2

10,542.4

Noncontrolling interests

250.9

245.6

Total equity

10,372.1

10,788.0

Total liabilities and equity

31,319.8

31,090.1

See accompanying notes to consolidated financial statements.

Consolidated Statements of Total

Equity and Redeemable Interest

GENERAL MILLS, INC. AND SUBSIDIARIES

(Unaudited) (In Millions, Except per Share Data)

Quarter Ended

Nov. 27, 2022

Nov. 28, 2021

Amount

Total equity,

beginning balance

10,825.6

9,985.9

Common stock,

billion shares authorized, $

0.10

par value

754.6

75.5

754.6

75.5

Additional paid-in capital:

Beginning balance

1,146.1

1,345.0

Stock compensation plans

(7.4)

(5.1)

Unearned compensation related to stock unit awards

(6.8)

(3.9)

Earned compensation

23.4

20.6

Decrease in redemption value of

redeemable interest

8.5

Ending balance

1,155.3

1,365.1

Retained earnings:

Beginning balance

19,027.6

17,384.5

Net earnings attributable to General Mills

605.9

597.2

Cash dividends declared ($

1.08

and $

1.02

per share)

(641.6)

(618.5)

Ending balance

18,991.9

17,363.2

Common stock in treasury:

Beginning balance

(160.3)

(7,676.0)

(148.3)

(6,715.0)

Shares purchased

(5.2)

(400.5)

(3.7)

(224.9)

Stock compensation plans

1.1

53.0

0.6

24.7

Ending balance

(164.4)

(8,023.5)

(151.4)

(6,915.2)

Accumulated other comprehensive loss:

Beginning balance

(1,998.4)

(2,397.7)

Comprehensive (loss) income

(79.6)

33.6

Ending balance

(2,078.0)

(2,364.1)

Noncontrolling interests:

Beginning balance

250.8

293.5

Comprehensive income (loss)

3.0

(11.9)

Distributions to noncontrolling interest holders

(2.9)

(1.4)

Ending balance

250.9

280.2

Total equity,

ending balance

10,372.1

9,804.7

Redeemable interest:

Beginning balance

584.0

Comprehensive loss

(13.9)

Decrease in redemption value of

redeemable interest

(8.5)

Ending balance

561.6

See accompanying notes to consolidated financial statements.

Consolidated Statements of Total

Equity and Redeemable Interest

GENERAL MILLS, INC. AND SUBSIDIARIES

(Unaudited) (In Millions, Except per Share Data)

Six-Month Period Ended

Nov. 27, 2022

Nov. 28, 2021

Amount

Total equity,

beginning balance

10,788.0

9,773.2

Common stock,

billion shares authorized, $

0.10

par value

754.6

75.5

754.6

75.5

Additional paid-in capital:

Beginning balance

1,182.9

1,365.5

Stock compensation plans

1.9

4.0

Unearned compensation related to stock unit awards

(85.8)

(72.2)

Earned compensation

56.3

53.7

Decrease in redemption value of

redeemable interest

14.1

Ending balance

1,155.3

1,365.1

Retained earnings:

Beginning balance

18,532.6

17,069.8

Net earnings attributable to General Mills

1,425.9

1,224.2

Cash dividends declared ($

1.62

and $

1.53

per share)

(966.6)

(930.8)

Ending balance

18,991.9

17,363.2

Common stock in treasury:

Beginning balance

(155.7)

(7,278.1)

(146.9)

(6,611.2)

Shares purchased

(12.1)

(901.3)

(6.2)

(375.0)

Stock compensation plans

3.4

155.9

1.7

71.0

Ending balance

(164.4)

(8,023.5)

(151.4)

(6,915.2)

Accumulated other comprehensive loss:

Beginning balance

(1,970.5)

(2,429.2)

Other comprehensive (loss) income

(107.5)

65.1

Ending balance

(2,078.0)

(2,364.1)

Noncontrolling interests:

Beginning balance

245.6

302.8

Comprehensive income (loss)

5.0

(20.1)

Distributions to noncontrolling interest holders

(4.8)

(2.5)

Divestiture

5.1

Ending balance

250.9

280.2

Total equity,

ending balance

10,372.1

9,804.7

Redeemable interest:

Beginning balance

604.9

Comprehensive loss

(29.2)

Decrease in redemption value of

redeemable interest

(14.1)

Ending balance

561.6

See accompanying notes to consolidated financial statements.

Consolidated Statements of Cash Flows

GENERAL MILLS, INC. AND SUBSIDIARIES

(Unaudited) (In Millions)

Six-Month Period Ended

Nov. 27, 2022

Nov. 28, 2021

Cash Flows - Operating Activities

Net earnings, including earnings attributable to redeemable and noncontrolling

interests

1,431.6

1,246.6

Adjustments to reconcile net earnings to net cash provided by operating activities:

Depreciation and amortization

273.9

286.9

After-tax earnings from joint ventures

(45.2)

(62.1)

Distributions of earnings from joint ventures

26.5

35.8

Stock-based compensation

57.6

47.9

Deferred income taxes

(48.1)

56.4

Pension and other postretirement benefit plan contributions

(12.7)

(12.5)

Pension and other postretirement benefit plan costs

(13.5)

(14.4)

Divestitures gain, net

(430.9)

Restructuring, impairment, and other exit costs

(13.7)

(44.2)

Changes in current assets and liabilities, excluding the effects of

acquisitions and divestitures

(64.4)

(88.7)

Other, net

39.6

46.1

Net cash provided by operating activities

1,200.7

1,497.8

Cash Flows - Investing Activities

Purchases of land, buildings, and equipment

(226.7)

(224.3)

Acquisition, net of cash acquired

(251.5)

(1,198.6)

Proceeds from divestitures, net of cash divested

610.7

Investments in affiliates, net

(1.4)

4.8

Proceeds from disposal of land, buildings, and equipment

0.5

1.5

Other, net

(6.5)

20.6

Net cash provided (used) by investing activities

125.1

(1,396.0)

Cash Flows - Financing Activities

Change in notes payable

353.4

854.2

Issuance of long-term debt

500.0

1,935.0

Payment of long-term debt

(600.0)

(2,221.7)

Proceeds from common stock issued on exercised options

118.5

26.1

Purchases of common stock for treasury

(901.3)

(375.0)

Dividends paid

(647.9)

(623.2)

Distributions to noncontrolling and redeemable interest holders

(4.8)

(2.5)

Other, net

(48.4)

(20.1)

Net cash used by financing activities

(1,230.5)

(427.2)

Effect of exchange rate changes on cash and cash equivalents

(20.6)

(35.1)

Increase (decrease) in cash and cash equivalents

74.7

(360.5)

Cash and cash equivalents - beginning of year

569.4

1,505.2

Cash and cash equivalents - end of period (includes $

123.7

million of cash classified as

held for sale as of November 28, 2021)

644.1

1,144.7

Cash Flow from changes in current assets and liabilities, excluding the effects

acquisitions and divestitures:

Receivables

(200.8)

(237.3)

Inventories

(278.5)

9.2

Prepaid expenses and other current assets

62.9

(1.2)

Accounts payable

112.5

(28.4)

Other current liabilities

239.5

169.0

Changes in current assets and liabilities

(64.4)

(88.7)

See accompanying notes to consolidated financial statements.

GENERAL MILLS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(Unaudited)

(1) Background

The accompanying

Consolidated Financial

Statements of

General Mills,

Inc. (we,

us, our,

General Mills,

or the Company)

have been

prepared in

accordance with

accounting principles

generally accepted

in the

United States

(GAAP) for

interim financial

information

and with

the rules

and regulations

for reporting

on Form

10-Q. Accordingly,

they do

not include

certain information

and disclosures

required

for

comprehensive

financial

statements.

the

opinion

management,

all

adjustments

considered

necessary

for

fair

presentation have

been included

and are

of a

normal recurring

nature, including

the elimination

of all

intercompany transactions

and

any noncontrolling

and redeemable

interests’ share

of those

transactions. Operating

results for

the fiscal

quarter ended

November 27,

2022,

are not necessarily indicative of the results that may be expected for the fiscal year

ending May 28, 2023.

These

statements

should

read

conjunction

with

the

Consolidated

Financial

Statements

and

footnotes

included

our

Annual

Report on Form

10-K for the fiscal

year ended May

29, 2022. The

accounting policies used

in preparing these

Consolidated Financial

Statements are the same as those described in Note 2 to the Consolidated Financial

Statements in that Form 10-K.

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

(2) Acquisitions and Divestiture

During

the first

quarter

of fiscal

2023,

acquired

TNT Crust,

manufacturer

of high-quality

frozen pizza

crusts

for

regional

and

national pizza

chains, foodservice

distributors, and

retail outlets,

for a

purchase price

of $

253.0

million. We

financed the

transaction

with U.S. commercial paper.

We consoli

dated the TNT Crust business

into our Consolidated Balance

Sheets and recorded goodwill

154.3

million. The

goodwill is

included in

the North

America Foodservice

segment and

is not

deductible for

tax purposes.

The pro

forma

effects

this

acquisition

were

not

material.

have

conducted

preliminary

assessment

the

fair

value

the

acquired

assets

and

liabilities

the

TNT

Crust

business

and

will

continue

review

these

items

during

the

measurement

period.

new

information is obtained

about facts and circumstances

that existed at the

acquisition date, the

acquisition accounting will

be revised to

reflect the resulting adjustments to

current estimates of these items.

The consolidated results of the

TNT Crust business are reported

our North America Foodservice segment on a one-month lag.

During the

first quarter

of fiscal

2023,

we completed

the sale

of our

Helper main

meals and

Suddenly

Salad side

dishes business

Eagle Family Foods Group for $

606.8

million and recorded a pre-tax gain of $

442.2

million.

During

the

first

quarter

fiscal

2022,

acquired

Tyson

Foods’

pet

treats

business

for

1.2

billion

cash.

financed

the

transaction

with

combination

cash

hand

and

short-term

debt.

consolidated

the pet

treats

business

into

our

Consolidated

Balance

Sheets

and

recorded

goodwill

762.3

million,

indefinite-lived

intangible

assets

for

the

Nudges

Top

Chews

and

True

Chews

brands

totaling

330.0

million

aggregate,

and

finite-lived

customer

relationship

asset

40.0

million.

The

goodwill

included in the Pet segment and is deductible for tax purposes. The pro forma effects

of this acquisition were not material.

(3) Restructuring, Impairment, and Other Exit Costs

In the six-month period

ended November 27, 2022,

we did not undertake

any new restructuring

actions. We

recorded $

11.6

million of

restructuring

charges

the

second

quarter

fiscal

2023

and

13.9

million

restructuring

charges

the

six-month

period

ended

November 27,

2022, related

to restructuring

actions previously

announced.

recorded $

2.7

million of

restructuring charges

in the

second

quarter of

fiscal 2022

and

a $

1.4

million net

recovery of

restructuring

charges

in the

six-month

period

ended November

28,

2021, related to restructuring actions previously announced. We

expect these actions to be completed by the end of

fiscal 2024

the

second

quarter

fiscal

2023,

increased

the

estimate

restructuring

charges

that

expect

incur

our

previously announced

actions in the

International segment

to drive efficiencies

in manufacturing

and logistics operations.

As a result,

we recorded

a $

4.5

million increase

to our

restructuring reserve

primarily related

to estimated

severance charges.

expect to

incur

approximately

million

restructuring

charges

and

project-related

costs

these

actions,

which

approximately

million will be

cash. These charges

are expected

to consist of

approximately $

million of severance

and $

million of other

costs,

primarily

asset write-offs.

also

expect

incur

approximately

million

of project-related

costs.

expect

these actions

to be

completed by the end of

fiscal 2024

the

second

quarter

fiscal

2023,

increased

the

estimate

restructuring

charges

that

expect

incur

our

previously

announced

global

organizational

structure

and

resource

realignment

actions.

result,

recorded

4.1

million

increase to our

restructuring reserve primarily

related to estimated

severance charges.

expect to incur

approximately $

140

million

restructuring

charges

these

actions,

which

approximately

115

million

will

cash.

These

charges

are

expected

consist

approximately

105

million

severance

and

approximately

million

other

costs.

expect

these

actions

completed by the end of

fiscal 2023

paid

net

27.6

million

cash

the

six-month

period

ended

November

27,

2022,

restructuring

actions

previously

announced. We

paid net $

42.8

million of cash in the same period of fiscal 2022.

The roll forward of our restructuring and other exit cost reserves, included

in other current liabilities, is as follows:

In Millions

Total

Reserve balance as of May 29, 2022

36.8

Fiscal 2023 charges, including foreign currency translation

7.5

Utilized in fiscal 2023

(24.1)

Reserve balance as of Nov. 27, 2022

20.2

The reserve balance primarily consists of expected severance payments

associated with restructuring actions.

The charges

recognized in

the roll forward

of our reserves

for restructuring

and other exit

costs do not

include items

charged directly

to expense

(e.g., asset

impairment charges,

accelerated depreciation,

the gain

or loss

on the

sale of

restructured assets,

and the

write-

off

spare parts)

and other

periodic

exit costs

are

recognized

as incurred,

as those

items are

not reflected

in our

restructuring

and

other exit cost reserves on our Consolidated Balance Sheets.

(4) Goodwill and Other Intangible Assets

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

In Millions

Nov. 27, 2022

May 29, 2022

Goodwill

14,476.0

14,378.5

Other intangible assets:

Intangible assets not subject to amortization:

Brands and other indefinite-lived intangibles

6,706.6

6,725.8

Intangible assets subject to amortization:

Customer relationships and other finite-lived intangibles

401.9

400.3

Less accumulated amortization

(133.7)

(126.2)

Intangible assets subject to amortization, net

268.2

274.1

Other intangible assets

6,974.8

6,999.9

Total

21,450.8

21,378.4

Based

the carrying

value

finite-lived

intangible

assets as

November

27,

2022,

annual

amortization

expense

for

each of

the

next five fiscal years is estimated to be approximately $

million.

The changes in the carrying amount of goodwill during the six-month period

ended November 27, 2022, were as follows:

In Millions

North

America

Retail

Pet

North

America

Foodservice

International

Joint Ventures

Total

Balance as of May 29, 2022

6,552.9

6,062.8

648.8

721.6

392.4

14,378.5

Acquisition

154.3

Divestiture

(0.4)

Other activity, primarily

foreign currency translation

(6.4)

(37.5)

(12.5)

(56.4)

Balance as of Nov. 27, 2022

6,546.5

6,062.8

803.1

683.7

379.9

14,476.0

The changes in the carrying amount of other intangible assets during the six-month

period ended November 27, 2022, were as follows:

In Millions

Total

Balance as of May 29, 2022

6,999.9

Acquisition

3.8

Other activity, primarily

foreign currency translation

(28.9)

Balance as of Nov. 27, 2022

6,974.8

Our

annual

goodwill

and

indefinite-lived

intangible

assets

impairment

test

was

performed

the

first

day

the

second

quarter

fiscal

2023,

and

determined

there

was

impairment

our

intangible

assets

their

fair

values

were

substantially

excess of the

carrying values,

except for

the

Uncle Toby’s

brand intangible

asset. In addition,

while having

significant coverage

as of

our fiscal 2023

assessment date, the

Progresso

and

EPIC

brand intangible assets

had risk of decreasing

coverage. We

will continue to

monitor these businesses for potential impairment.

(5) Inventories

The components of inventories were as follows:

In Millions

Nov. 27, 2022

May 29, 2022

Raw materials and packaging

565.8

532.0

Finished goods

1,923.6

1,634.7

Grain

156.1

164.0

Excess of FIFO over LIFO cost

(524.2)

(463.4)

Total

2,121.3

1,867.3

(6) Risk Management Activities

Many commodities we

use in the

production and distribution

of our products

are exposed to

market price risks.

utilize derivatives

to manage price risk for our principal

ingredients and energy costs, including

grains (oats, wheat, and corn), oils

(principally soybean),

dairy products, natural

gas, and diesel fuel.

Our primary objective

when entering into

these derivative contracts

is to achieve

certainty

with

regard

the

future

price

commodities

purchased

for

use

our

supply

chain.

manage

our

exposures

through

combination of purchase orders, long-term

contracts with suppliers, exchange-traded

futures and options, and over-the-counter

options

and swaps.

offset

our exposures

based on

current and

projected market

conditions and

generally seek

to acquire

the inputs

at as

close as possible to or below our planned cost.

use derivatives

to manage

our exposure

to changes

in commodity

prices. We

do not

perform the

assessments required

to achieve

hedge

accounting

for

commodity

derivative

positions.

Accordingly,

the

changes

the

values

these

derivatives

are

recorded

currently in cost of sales in our Consolidated Statements of Earnings.

Although we do

not meet the

criteria for

cash flow hedge

accounting, we believe

that these instruments

are effective

in achieving our

objective of providing certainty

in the future price of commodities purchased

for use in our supply chain.

Accordingly, for

purposes of

measuring

segment

operating

performance,

these

gains

and

losses

are

reported

unallocated

corporate

items

outside

segment

operating results

until such

time that

the exposure

we are

managing affects

earnings. At

that time

we reclassify

the gain

or loss

from

unallocated

corporate

items

segment

operating

profit,

allowing

our

operating

segments

realize

the

economic

effects

the

derivative without experiencing any resulting mark-to-market volatility,

which remains in unallocated corporate items.

Unallocated corporate items for the quarters and six-month periods ended

November 27, 2022, and November 28, 2021, included:

Quarter Ended

Six-Month Period Ended

In Millions

Nov. 27, 2022

Nov. 28, 2021

Nov. 27, 2022

Nov. 28, 2021

Net (loss) gain on mark-to-market valuation of certain

commodity positions

(20.9)

16.6

(93.2)

47.0

Net gain on commodity positions reclassified from

unallocated corporate items to segment operating profit

(20.5)

(35.9)

(63.5)

(70.6)

Net mark-to-market revaluation of certain grain inventories

16.3

31.4

(43.1)

59.8

Net mark-to-market valuation of certain commodity

positions recognized in unallocated corporate items

(25.1)

12.1

(199.8)

36.2

As of

November

27,

2022,

the net

notional

value

commodity

derivatives

was $

429.4

million,

which

158.1

million

energy inputs and $

271.3

million related to agricultural inputs. These contracts relate to inputs that generally

will be utilized within the

months.

The

fair

values

the

derivative

positions

used

our

risk

management

activities

and

other

assets

recorded

fair

value

were

not

material

November

27,

2022

and

were

Level

assets

and

liabilities

the

fair

value

hierarchy.

did

not

significantly change our valuation techniques from prior periods.

offer

certain

suppliers

access

third

party

services

that

allow

them

view

our

scheduled

payments

online.

The

third-party

services also

allow suppliers

to finance

advances on

our scheduled

payments at

the sole

discretion of

the supplier

and the third

party.

have no

economic interest

in these

financing arrangements

and no

direct relationship

with the

suppliers, the

third parties,

or any

financial

institutions

concerning

these

services.

All

our

accounts

payable

remain

obligations

our

suppliers

stated

our

supplier agreements.

As of

November 27,

2022, $

1,477.4

million of

our total

accounts payable

were payable

to suppliers

who utilize

these third-party

services. As

of November

28,

2021, $

1,378.1

million

of our

total accounts

payable

were payable

to suppliers

who

utilize these third-party services.

During

the

second

quarter

fiscal

2023,

entered

into

500.0

million

notional

amount

interest

rate

swap

convert

our

500.0

million fixed rate notes due

November 18, 2025

, to a floating rate.

(7) Debt

The components of notes payable were as follows:

In Millions

Nov. 27, 2022

May 29, 2022

U.S. commercial paper

1,126.6

694.8

Financial institutions

26.8

116.6

Total

1,153.4

811.4

To ensure availability

of funds, we maintain bank credit lines and have commercial paper programs

available to us in the United States

and Europe.

The following table details the fee-paid committed and uncommitted credit

lines we had available as of November 27, 2022:

In Billions

Facility

Amount

Borrowed

Amount

Committed credit facility expiring April 2026

2.7

Uncommitted credit facilities

0.6

Total committed

and uncommitted credit facilities

3.3

The

credit

facilities

contain

covenants,

including

requirement

maintain

fixed

charge

coverage

ratio

least

2.5

times.

were in compliance with all credit facility covenants as of November 27, 2022.

Long-Term

Debt

The fair

values and

carrying amounts

of long-term

debt, including

the current

portion, were

9,875.3

million and

10,586.8

million,

respectively,

as of

November 27,

2022. The

fair value

of long-term

debt was

estimated using

market quotations

and discounted

cash

flows based

on our

current incremental

borrowing rates

for similar

types of

instruments. Long

-term debt

is a

Level 2

liability in

the

fair value hierarchy.

the

second

quarter

fiscal

2023,

issued

500.0

million

5.241

percent

notes

due

November 18, 2025

used

the

net

proceeds to repay a portion of our outstanding commercial paper and

for general corporate purposes.

In the

second quarter

of fiscal

2023, we

issued €

250.0

million of

floating-rate notes

due

May 16, 2023

used the

net proceeds

repay €

250.0

million of

0.0

percent fixed-rate notes due

November 11, 2022

the fourth

quarter

of fiscal

2022,

we repaid

850.0

million

3.7

percent

fixed

rate notes

due

October 17, 2023

, using

proceeds

from the issuance of commercial paper.

In the fourth quarter of fiscal 2022, we issued €

250.0

million of

0.0

percent fixed-rate notes due

November 11, 2022

. We used the net

proceeds for general corporate purposes.

In the second quarter of fiscal 2022, we issued €

500.0

million of

0.125

percent fixed-rate notes due

November 15, 2025

. We used the

net proceeds to repay a portion of our €

500.0

million of

0.0

percent fixed-rate notes due

November 16, 2021

, and for general corporate

purposes.

In the second quarter of fiscal 2022, we issued €

250.0

million of floating-rate notes due

May 16, 2023

. We used the net proceeds

repay a portion of our outstanding commercial paper and for general

corporate purposes.

In the second quarter of fiscal 2022, we issued $

500.0

million of

2.25

percent notes due

October 14, 2031

. We used the net proceeds

together with proceeds from the issuance of commercial paper,

to repay $

1,000.0

million of

3.15

percent fixed-rate notes due

December 15, 2021

In the first quarter of fiscal 2022, we issued €

500.0

million of floating-rate notes due

July 27, 2023

. We used the net proceeds to

repay

€

500.0

million of

0.0

percent fixed-rate notes due

August 21, 2021

In the first quarter of fiscal 2022, we repaid €

200.0

million of

2.2

percent fixed-rate notes due

June 24, 2021

, using proceeds from the

issuance of €

50.0

million of

2.2

percent fixed-rate notes due

November 29, 2021

, and borrowings under a committed credit facility.

Certain of our

long-term debt agreements

contain restrictive

covenants.

As of November 27, 2022, we were in compliance with all of

these covenants.

(8) Redeemable and Noncontrolling Interests

The

third-party

holder

the

General

Mills

Cereals,

LLC

(GMC)

Class A

Interests

receives

quarterly

preferred

distributions

from

available net

income based

on the application

of a

floating preferred

return rate

to the

holder’s capital

account balance

established in

the

most

recent

mark-to-market

valuation

(currently

251.5

million).

June 1,

2021,

the

floating

preferred

return

rate

GMC’s

Class A Interests

was reset

to the

sum of

three-month LIBOR

plus

160

basis points.

The preferred

return rate

is adjusted

every

three

years

through a negotiated agreement with the Class A Interest holder or through

a remarketing auction.

During

the

third

quarter

fiscal

2022,

completed

the

sale

our

interests

Yoplait

SAS,

Yoplait

Marques

SNC

and

Liberté

Marques

Sàrl

Sodiaal

International

(Sodiaal)

exchange

for

Sodiaal’s

interest

our

Canadian

yogurt

business,

modified

agreement for the use of

Yoplait

and

Liberté

brands in the United States and Canada, and cash.

Up to

the date

of the

divestiture, Sodiaal

held the remaining

interests in

each of

the entities.

On the

acquisition date,

we recorded

the

fair

value

Sodiaal’s

percent

euro-denominated

interest

Yoplait

SAS

redeemable

interest

our

Consolidated

Balance

Sheets. Sodiaal had

the right to

put all or

a portion of

its redeemable interest

to us at

fair value until

the divestiture closed

in the third

quarter of

fiscal 2022.

In connection

with the

divestiture, cumulative

adjustments made

to the

redeemable

interest related

to the

fair

value put feature were

reversed against additional paid-in

capital, where changes in the

redemption amount were historically recorded,

and the resulting carrying value of the noncontrolling interests were included

in the calculation of the gain on divestiture.

subsidiary of Yoplait

SAS had an exclusive

milk supply agreement

for its European operations

with Sodiaal through

November 28,

2021. Net purchases totaled $

99.5

million for the six-month period ended November 28, 2021.

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

covenants.

(9) Stockholders’ Equity

The following tables provide details of total comprehensive income:

Quarter Ended

Nov. 27, 2022

Nov. 28, 2021

General Mills

Noncontrolling

Interests

General Mills

Noncontrolling

Interests

Redeemable

Interest

In Millions

Pretax

Tax

Net

Pretax

Tax

Net

Net earnings, including earnings

attributable to redeemable and

noncontrolling interests

605.9

2.4

597.2

1.9

9.3

Other comprehensive (loss) income:

Foreign currency translation

(144.7)

29.1

(115.6)

0.6

(29.0)

27.8

(1.2)

(13.8)

(23.5)

Other fair value changes:

Hedge derivatives

26.8

(6.0)

20.8

29.1

(11.0)

18.1

0.6

Reclassification to earnings:

Hedge derivatives (a)

1.8

(0.8)

1.0

(12.1)

6.0

(6.1)

(0.3)

Amortization of losses and

prior service costs (b)

18.3

(4.1)

14.2

29.2

(6.4)

22.8

Other comprehensive (loss) income

(97.8)

18.2

(79.6)

0.6

17.2

16.4

33.6

(13.8)

(23.2)

Total comprehensive income (loss)

526.3

3.0

630.8

(11.9)

(13.9)

(a)

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

(b)

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

Six-Month Period Ended

Nov. 27, 2022

Nov. 28, 2021

General Mills

Noncontrolling

Interests

General Mills

Noncontrolling

Interests

Redeemable

Interest

In Millions

Pretax

Tax

Net

Pretax

Tax

Net

Net earnings, including earnings

attributable to redeemable and

noncontrolling interests

1,425.9

5.7

1,224.2

4.9

17.5

Other comprehensive (loss) income:

Foreign currency translation

(86.7)

(23.8)

(110.5)

(0.7)

(40.9)

50.5

9.6

(25.0)

(47.0)

Other fair value changes:

Hedge derivatives

(23.0)

5.5

(17.5)

31.9

(12.0)

19.9

0.5

Reclassification to earnings:

Foreign currency translation (a)

(7.4)

Hedge derivatives (b)

(0.1)

(0.3)

(0.4)

(0.1)

4.5

4.4

(0.2)

Amortization of losses and

prior service costs (c)

36.5

(8.2)

28.3

40.0

(8.8)

31.2

Other comprehensive (loss) income

(80.7)

(26.8)

(107.5)

(0.7)

30.9

34.2

65.1

(25.0)

(46.7)

Total comprehensive income (loss)

1,318.4

5.0

1,289.3

(20.1)

(29.2)

(a)

Gain reclassified from AOCI into earnings is reported in the divestitures gain, net.

(b)

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

(c)

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

Accumulated other comprehensive loss balances, net of tax effects,

were as follows:

In Millions

Nov. 27, 2022

May 29, 2022

Foreign currency translation adjustments

(708.6)

(590.7)

Unrealized gain from hedge derivatives

5.4

23.3

Pension, other postretirement, and postemployment benefits:

Net actuarial loss

(1,477.0)

(1,513.4)

Prior service credits

102.2

110.3

Accumulated other comprehensive loss

(2,078.0)

(1,970.5)

(10) Stock Plans

have various

stock-based compensation

programs under

which awards,

including stock

options, restricted

stock, restricted

stock

units, and performance

awards, may be granted

to employees and non-employee

directors. These programs

and related accounting

are

described in Note

12 to the

Consolidated Financial

Statements included

in our Annual

Report on Form

10-K for the

fiscal year ended

May 29, 2022.

Compensation expense related to stock-based payments recognized

in the Consolidated Statements of Earnings was as follows:

Quarter Ended

Six-Month Period Ended

In Millions

Nov. 27, 2022

Nov. 28, 2021

Nov. 27, 2022

Nov. 28, 2021

Compensation expense related to stock-based payments

24.1

13.9

57.6

47.5

Compensation

expense

stock-based

payments

recognized

the

Consolidated

Statements

Earnings

includes

amounts

recognized in restructuring, impairment, and other exit costs in fiscal 2022.

Windfall tax benefits from stock-based payments

in income tax expense in our Consolidated Statements of Earnings were as follows:

Quarter Ended

Six-Month Period Ended

In Millions

Nov. 27, 2022

Nov. 28, 2021

Nov. 27, 2022

Nov. 28, 2021

Windfall tax benefits from stock-based payments

5.6

1.6

18.4

6.3

November

27,

2022,

unrecognized

compensation

expense

non-vested

stock

options,

restricted

stock

units,

and

performance share units was $

147.4

million. This expense will be recognized over

months, on average.

Net cash proceeds from the exercise of stock options

less shares used for withholding taxes and the intrinsic

value of options exercised

were as follows:

Six-Month Period Ended

In Millions

Nov. 27, 2022

Nov. 28, 2021

Net cash proceeds

118.5

26.1

Intrinsic value of options exercised

55.7

12.1

We estimate the fair value of each stock option on the grant date using a Black-Scholes option-pricing model. Black-Scholes option-

pricing models require us to make predictive assumptions regarding future stock price volatility, employee exercise behavior, and

dividend yield. We estimate our future stock price volatility using the historical volatility over the expected term of the option,

excluding time periods of volatility we believe a marketplace participant would exclude in estimating our stock price volatility. We

also have considered, but did not use, implied volatility in our estimate, because trading activity in options on our stock, especially

those with tenors of greater than 6 months, is insufficient to provide a reliable measure of expected volatility. Our method of selecting

the other valuation assumptions is explained in Note 12 to the Consolidated Financial Statements included in our Annual Report on

Form 10-K for the fiscal year ended May 29, 2022.

The

estimated

fair

values

stock

options

granted

and

the

assumptions

used

for

the

Black-Scholes

option-pricing

model

were

follows:

Six-Month Period Ended

Nov. 27, 2022

Nov. 28, 2021

Estimated fair values of stock options granted

14.16

8.77

Assumptions:

Risk-free interest rate

3.3

1.5

Expected term

8.5

years

8.5

years

Expected volatility

20.9

20.2

Dividend yield

3.1

3.4

The total grant date fair value of restricted stock unit awards that vested during

the period was as follows:

Six-Month Period Ended

In Millions

Nov. 27, 2022

Nov. 28, 2021

Total grant date fair

value

102.6

76.0

(11) Earnings Per Share

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

Quarter Ended

Six-Month Period Ended

In Millions, Except per Share Data

Nov. 27, 2022

Nov. 28, 2021

Nov. 27, 2022

Nov. 28, 2021

Net earnings attributable to General Mills

605.9

597.2

1,425.9

1,224.2

Average number

of common shares - basic EPS

595.9

608.6

598.0

609.5

Incremental share effect from: (a)

Stock options

3.7

2.2

3.6

2.1

Restricted stock units and performance share units

2.4

2.2

2.4

2.2

Average number

of common shares - diluted EPS

602.0

613.0

604.0

613.8

Earnings per share – basic

1.01

0.98

2.38

2.01

Earnings per share – diluted

1.01

0.97

2.36

1.99

(a)

Incremental

from

stock

options,

restricted

stock

units,

and

performance

units

are

computed

the

treasury

stock

method.

Stock

options,

restricted

stock

units,

and

performance

share units

excluded

from

our

computation

diluted

EPS

because

they

were not dilutive were as follows

Quarter Ended

Six-Month Period Ended

In Millions

Nov. 27, 2022

Nov. 28, 2021

Nov. 27, 2022

Nov. 28, 2021

Anti-dilutive stock options, restricted stock units, and

performance share units

1.0

4.6

1.0

4.7

(12) Share Repurchases

Share repurchases were as follows:

Quarter Ended

Six-Month Period Ended

In Millions

Nov. 27, 2022

Nov. 28, 2021

Nov. 27, 2022

Nov. 28, 2021

Shares of common stock

5.2

3.7

12.1

6.2

Aggregate purchase price

400.5

224.9

901.3

375.0

(13) Statements of Cash Flows

Our Consolidated Statements of Cash Flows include the following:

Six-Month Period Ended

In Millions

Nov. 27, 2022

Nov. 28, 2021

Net cash interest payments

154.3

185.7

Net income tax payments

365.4

271.1

(14) Retirement and Postemployment Benefits

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

Defined Benefit

Pension Plans

Other Postretirement

Benefit Plans

Postemployment

Benefit Plans

Six-Month

Period Ended

Six-Month

Period Ended

Six-Month

Period Ended

In Millions

Nov. 27,

2022

Nov. 28,

2021

Nov. 27,

2022

Nov. 28,

2021

Nov. 27,

2022

Nov. 28,

2021

Service cost

35.1

47.2

2.6

3.8

4.2

3.5

Interest cost

129.2

92.4

9.0

6.3

1.6

0.7

Expected return on plan assets

(210.0)

(205.7)

(15.6)

(13.4)

Amortization of losses (gains)

56.7

70.4

(9.7)

(5.4)

0.1

1.5

Amortization of prior service costs (credits)

0.7

0.4

(11.5)

(10.4)

0.2

Other adjustments

5.9

5.7

Curtailment gain

(14.3)

(5.7)

Net expense (income)

11.7

(9.6)

(25.2)

(24.8)

12.0

11.6

(15) Income Taxes

During

the

first

quarter

fiscal

2023,

the

Inflation

Reduction

Act

(IRA)

was

signed

into

law.

The

IRA

introduces

Corporate

Alternative Minimum Tax

beginning in our fiscal 2024

and an excise tax on the

repurchase of corporate

stock starting after January

2023. We

do not

currently expect the

IRA to have

a material impact

on our financial

results, including our

annual estimated effective

tax

rate,

our

liquidity.

will

continue

monitor

and

assess

the

impact

the

IRA

may

have

our

business

and

financial

results.

During fiscal

2022, the

Brazilian tax

authority,

Secretaria da

Receita Federal

do Brasil

(RFB), concluded

audits of

our 2012

through

2018

tax

return

years.

These

audits

included

review

our

determinations

amortization

certain

goodwill

arising

from

the

acquisition of

Yoki

Alimentos S.A.

The RFB

has proposed

adjustments that

effectively

eliminate the

goodwill amortization

benefits

related to this transaction. We

believe we have meritorious defenses and intend to continue to contest the disallowance

for all years.

(16) Contingencies

During

fiscal

2020,

received

notice

from

the

tax

authorities of

the

State of

São

Paulo,

Brazil

regarding

our

compliance

with

its

state sales tax requirements.

As a result, we

have been assessed additional

state sales taxes, interest,

and penalties. We

believe that we

have

meritorious

defenses

against

this

claim

and

will

vigorously

defend

our

position.

November

27,

2022,

are

unable

estimate any possible loss and have not recorded a loss contingency for

this matter.

(17) Business Segment and Geographic Information

operate

the

packaged

foods

industry.

fiscal

2022,

completed

new

organization

structure

streamline

our

global

operations.

This

global

reorganization

required

reevaluate

our

operating

segments.

Under

our

new

organization

structure,

our

chief operating decision maker assesses performance

and makes decisions about resources to be allocated to

our operating segments as

follows: North America Retail; International; Pet; and North America

Foodservice.

have restated

our net

sales by segment

and segment

operating profit

to reflect our

previously reported

operating segment

change.

These

segment

changes

had

effect

previously

reported

consolidated

net

sales,

operating

profit,

net

earnings

attributable

General Mills, or earnings per share.

Our North America Retail

operating segment reflects business

with a wide variety of

grocery stores, mass merchandisers, membership

stores,

natural

food

chains,

drug,

dollar

and

discount

chains,

convenience

stores,

and

e-commerce

grocery

providers.

Our

product

categories

this

business

segment

include

ready-to-eat

cereals,

refrigerated

yogurt,

soup,

meal

kits,

refrigerated

and

frozen

dough

products,

dessert

and

baking

mixes,

frozen

pizza

and

pizza

snacks,

snack

bars,

fruit

snacks,

savory

snacks,

and

wide

variety

organic products

including ready-to-eat

cereal, frozen

and shelf-stable vegetables,

meal kits, fruit

snacks, snack

bars, and

refrigerated

yogurt.

Our

International

operating

segment

consists

retail

and

foodservice

businesses

outside

the

United

States

and

Canada.

Our

product categories include super-premium

ice cream and frozen desserts, meal kits, salty snacks,

snack bars, dessert and baking mixes,

and

shelf

stable

vegetables.

also

sell

super-premium

ice

cream

and

frozen

desserts

directly

consumers

through

owned

retail

shops. Our

International segment

also includes

products manufactured

in the United

States for

export, mainly

to Caribbean

and Latin

American markets, as well as

products we manufacture

for sale to our international

joint ventures. Revenues from

export activities are

reported in the region or country where the end customer is located.

Our Pet operating segment includes

pet food products sold primarily in the

United States and Canada in national

pet superstore chains,

e-commerce retailers,

grocery stores,

regional pet

store chains,

mass merchandisers,

and veterinary

clinics and

hospitals. Our

product

categories include dog and cat food (dry

foods, wet foods,

and treats) made with whole meats, fruits,

vegetables and other high-quality

natural

ingredients.

Our

tailored

pet

product

offerings

address

specific

dietary,

lifestyle,

and

life-stage

needs

and

span

different

product types, diet types, breed sizes for dogs, lifestages, flavors, product

functions,

and textures and cuts for wet foods.

Our

North

America

Foodservice

segment

consists

foodservice

businesses

the

United

States

and

Canada.

Our

major

product

categories

our

North

America

Foodservice

operating

segment

are

ready-to-eat

cereals,

snacks,

refrigerated

yogurt,

frozen

meals,

unbaked and

fully baked

frozen dough products,

baking mixes,

and bakery

flour.

Many products we

sell are branded

to the consumer

and nearly

all are

branded to

our customers.

sell to

distributors and

operators in

many customer

channels including

foodservice,

vending, and supermarket bakeries.

Operating profit

for these

segments excludes

unallocated corporate

items, gain

or loss

on divestitures,

and restructuring,

impairment,

and

other

exit

costs.

Unallocated

corporate

items

include

corporate

overhead

expenses,

variances

planned

North

American

employee

benefits

and

incentives,

certain

charitable

contributions,

restructuring

initiative

project-related

costs,

gains

and

losses

corporate investments,

and other

items that

are not

part of

our measurement

of segment

operating performance.

These include

gains

and

losses

arising

from

the

revaluation

certain

grain

inventories

and

gains

and

losses

from

mark-to-market

valuation

certain

commodity positions

until passed back

to our operating

segments. These items

affecting operating

profit are centrally

managed at

the

corporate

level

and

are

excluded

from

the

measure

segment

profitability

reviewed

executive

management.

Under

our

supply

chain organization, our manufacturing,

warehouse, and distribution activities are substantially integrated

across our operations in order

to maximize

efficiency

and productivity.

As a

result, fixed

assets and

depreciation and

amortization expenses

are neither

maintained

nor available by operating segment.

Our operating segment results were as follows:

Quarter Ended

Six-Month Period Ended

In Millions

Nov. 27, 2022

Nov. 28, 2021

Nov. 27, 2022

Nov. 28, 2021

Net sales:

North America Retail

3,373.1

3,044.6

6,361.9

5,755.2

International

671.7

914.4

1,324.2

1,845.0

Pet

592.9

593.4

1,172.8

1,081.4

North America Foodservice

583.0

471.6

1,079.4

882.3

Total

5,220.7

5,024.0

9,938.3

9,563.9

Operating profit:

North America Retail

837.1

675.4

1,614.9

1,324.0

International

17.8

59.4

52.6

120.0

Pet

86.6

131.5

209.7

246.7

North America Foodservice

81.5

67.9

135.1

139.7

Total segment operating

profit

1,023.0

934.2

2,012.3

1,830.4

Unallocated corporate items

212.1

131.8

545.1

188.0

Divestitures gain, net

(430.9)

Restructuring, impairment, and other exit costs (recoveries)

11.1

2.3

12.7

(2.0)

Operating profit

799.8

800.1

1,885.4

1,644.4

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

Quarter Ended

Six-Month Period Ended

In Millions

Nov. 27, 2022

Nov. 28, 2021

Nov. 27, 2022

Nov. 28, 2021

U.S. Meals & Baking Solutions

1,321.7

1,203.1

2,270.9

2,064.6

U.S. Morning Foods

908.5

826.7

1,812.5

1,656.4

U.S. Snacks

892.9

757.2

1,780.1

1,537.3

Canada

250.0

257.6

498.4

496.9

Total

3,373.1

3,044.6

6,361.9

5,755.2

Net sales by class of similar products were as follows:

Quarter Ended

Six-Month Period Ended

In Millions

Nov. 27, 2022

Nov. 28, 2021

Nov. 27, 2022

Nov. 28, 2021

Snacks

1,102.8

947.6

2,171.2

1,902.1

Cereal

810.9

742.2

1,625.6

1,473.2

Convenient meals

786.4

789.8

1,465.6

1,485.3

Dough

745.6

607.0

1,210.4

1,012.2

Pet

593.7

593.4

1,174.5

1,081.4

Baking mixes and ingredients

563.7

517.2

1,037.2

913.5

Yogurt

357.5

507.1

703.5

1,013.0

Super-premium ice cream

164.9

200.0

348.4

444.8

Other

95.2

119.7

201.9

238.4

Total

5,220.7

5,024.0

9,938.3

9,563.9

Item 2.

Management’s Discussion and Analysis

of Financial Condition and Results of Operations.

INTRODUCTION

This

Management’s

Discussion

and

Analysis

Financial

Condition

and

Results

Operations

(MD&A)

should

read

conjunction

with

the

MD&A

included

our

Annual

Report

Form

10-K

for

the

fiscal

year

ended

May

29,

2022

for

important

background

regarding,

among other

things, our

key business

drivers.

Significant

trademarks and

service marks

used in

our business

are set forth in

italics

herein. Certain terms used throughout this report are defined in the

“Glossary” section below.

We expect

the largest factors impacting our

performance in fiscal 2023 will be

the economic health of consumers, the

inflationary cost

environment, and the frequency and

severity of disruptions in the supply

chain. We

anticipate double-digit input cost inflation

in fiscal

2023

and

are

addressing

inflation

headwinds

with

Holistic

Margin

Management

(HMM)

cost

savings

and

net

price

realization

generated

through

our

Strategic

Revenue

Management

(SRM)

capability.

are

planning

for

volume

elasticities

increase

but

remain below historical levels and supply chain disruptions to slowly moderate

in fiscal 2023 compared to fiscal 2022 levels.

CONSOLIDATED

RESULTS

OF OPERATIONS

Second Quarter Results

In the

second quarter

of fiscal

2023,

net sales

increased

4 percent

and organic

net sales

increased

percent compared

to the

same

period

last

year.

Operating

profit

essentially

matched

the

second

quarter

fiscal

2022

$800 million

favorable

net

price

realization and

mix was offset

by higher

input costs, a

decrease in contributions

from volume growth

lower net corporate

investment

activity,

an unfavorable change to

the mark-to-market valuation

of certain commodity

positions and grain

inventories, and an increase

certain

selling,

general

and

administrative

(SG&A)

expenses.

Operating

profit

margin

15.3

percent

decreased

60 basis

points.

Adjusted

operating

profit

of $880

million

increased

percent

constant-currency

basis,

primarily

driven

favorable

net

price

realization and

mix, partially offset

by higher

input costs,

a decrease

in contributions

from volume

growth, and

an increase in

SG&A

expenses. Adjusted

operating profit

margin increased

60 basis points

to 16.9

percent. Diluted

earnings per

share of

$1.01 increased

percent in the

second quarter of

fiscal 2023. Adjusted

diluted earnings

per share of

$1.10 increased

12 percent on a

constant-currency

basis compared

the

second

quarter

fiscal

2022.

See

the

“Non-GAAP

Measures”

section

below

for

description

our

use

measures not defined by GAAP.

A summary of our consolidated financial results for the second quarter

of fiscal 2023 follows:

Quarter Ended Nov. 27, 2022

In millions,

except per share

Quarter Ended

Nov. 27, 2022 vs.

Nov. 28, 2021

Percent

of Net

Sales

Constant-

Currency

Growth (a)

Net sales

5,220.7

Operating profit

799.8

Flat

15.3

Net earnings attributable to General Mills

605.9

Diluted earnings per share

1.01

Organic net sales growth rate (a)

Adjusted operating profit (a)

879.7

16.9

Adjusted diluted earnings per share (a)

1.10

(a)

See the "Non-GAAP Measures" section below for our use of measures not defined by GAAP.

Consolidated

net sales

were as follows:

Quarter Ended

Nov. 27, 2022

Nov. 27, 2022 vs.

Nov. 28, 2021

Net sales (in millions)

5,220.7

5,024.0

Contributions from volume growth (a)

(12)

pts

Net price realization and mix

pts

Foreign currency exchange

(1)

Note: Table may not foot due to rounding.

(a)

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

Net sales in

the second quarter

of fiscal 2023

increased 4 percent

compared to the

same period in

fiscal 2022, driven

by favorable net

price

realization

and

mix,

partially

offset

decrease

contributions

from

volume

growth

and

unfavorable

foreign

currency

exchange.

Components of organic net sales growth are shown in the following

table:

Quarter Ended Nov. 27, 2022 vs.

Quarter Ended Nov. 28, 2021

Contributions from organic volume growth (a)

(6)

pts

Organic net price realization and mix

pts

Organic net sales growth

pts

Foreign currency exchange

(1)

Acquisitions and divestitures

(5)

pts

Net sales growth

pts

Note: Table may not foot due to rounding.

(a)

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

Organic

net sales

increased 11

percent in

the second

quarter of

fiscal 2023

compared to

the same

period in

fiscal 2022,

as favorable

organic net price realization and mix was partially offset

by a decrease in contributions from organic volume growth.

Cost of sales

increased $123 million to $3,516 million in the second quarter of

fiscal 2023 compared to the same period in fiscal 2022.

The increase

was primarily

driven by

a $489 million

increase attributable

to product

rate and

mix partially

offset

by a

$406 million

decrease attributable

to lower volume.

recorded a $25 million

net increase in

cost of sales

related to the

mark-to-market valuation

of certain commodity positions and grain inventories in the second

quarter of fiscal 2023 compared to a $12 million net decrease in the

second

quarter of

fiscal 2022.

In the

second quarter

of fiscal

2023, we

recorded a

$3 million charge

to a

voluntary recall

certain international

Häagen-Dazs

ice cream products.

SG&A

expenses

increased

$65 million

$894 million

the

second

quarter

fiscal

2023,

compared

the

same

period

fiscal

2022,

primarily

driven

valuation

adjustments

and

the

loss

sale

certain

corporate

investments

and

increased

media

and

advertising expenses

in fiscal

2023.

SG&A expenses

as a

percent of

net sales

in the

second quarter

of fiscal

2023 increased

60 basis

points compared to the second quarter of fiscal 2022.

Restructuring,

impairment,

and other

exit costs

totaled $11

million of

expense in

the second

quarter of

fiscal 2023,

compared

$2 million of expense

in the same period

last year (please refer

to Note 3

to the Consolidated

Financial Statements in

Part I, Item

1 of

this report).

Benefit plan non-service income

totaled $22 million in the second quarter

of fiscal 2023, compared to $28

million in the same period

last year, primarily reflecting an increase

in interest costs, partially offset by lower amortization of losses.

Interest,

net

for

the

second

quarter

fiscal

2023

totaled

$92 million,

down

$1 million

from

the

second

quarter

fiscal

2022,

primarily driven by lower average long-term debt levels, partially offset

by higher interest rates.

The

effective tax rate

for the second quarter

of fiscal 2023 was 20.2

percent compared to 21.7

percent for the second

quarter of fiscal

2022.

The

1.5

percentage

point

decrease

was

primarily

due

certain

nonrecurring

discrete

tax

benefits

and

favorable

changes

earnings mix

by jurisdiction

in fiscal

2023. Our

effective tax

rate excluding

certain items

affecting comparability

was 21.1 percent

the

second

quarter

fiscal

2023,

compared

22.3

percent

the

same

period

last

year

(see

the

“Non-GAAP

Measures”

section

below for a description

of our use of

measures not defined by

GAAP). The 1.2 percentage

point decrease was

primarily due to

certain

nonrecurring discrete tax benefits and favorable changes in earnings

mix by jurisdiction in fiscal 2023.

After-tax earnings from joint

ventures

for the second quarter of fiscal 2023

decreased to $25 million compared to $33 million

in the

same period

in fiscal 2022,

primarily driven

by higher

input costs at

Cereal Partners Worldwide

(CPW) and Häagen

-Dazs Japan, Inc.

(HDJ) and

lower net

sales at

HDJ, partially

offset by

favorable net

price realization

and mix

at CPW.

On a

constant-currency basis,

after-tax earnings

from joint

ventures decreased

8 percent (see the

“Non-GAAP Measures”

section below

for a description

of our

use

of measures not defined by GAAP).

The components of our joint ventures’ net sales growth are shown in the following

table:

Quarter Ended Nov. 27, 2022 vs.

Quarter Ended Nov. 28, 2021

CPW

HDJ

Total

Contributions from volume growth (a)

(13)

pts

(10)

pts

Net price realization and mix

pts

(1)

Net sales growth in constant currency

pts

(10)

pts

(1)

Foreign currency exchange

(14)

pts

(20)

pts

(15)

pts

Net sales growth

(11)

pts

(30)

pts

(16)

pts

Note: Table may not foot due to rounding.

(a)

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

Average

diluted shares

outstanding

decreased by

11 million

in the

second quarter

of fiscal

2023 from

the same

period a

year ago

primarily due to share repurchases, partially offset by option

exercises.

Six-Month Results

In the

six-month period

ended November

27, 2022,

net sales

increased 4

percent compared

to the

same period

last year,

and organic

net

sales

increased

percent

compared

the

same

period

last

year.

Operating

profit

increased

percent

$1,885 million,

primarily

driven

favorable

net

price

realization

and

mix

and

net

gain

divestitures,

partially

offset

higher

input

costs,

decrease in contributions from

volume growth, an unfavorable

change to the mark-to-market

valuation of certain commodity

positions

and

grain

inventories,

lower

net

corporate

investment

activity,

and

increase

SG&A

expenses.

Operating

profit

margin

percent

increased

180

basis

points

compared

the

same

period

last

year.

Adjusted

operating

profit

$1,761 million

increased

8 percent

constant-currency

basis,

primarily

driven

favorable

net

price

realization

and

mix,

partially

offset

higher

input

costs,

decrease

contributions

from

volume

growth,

and

increase

SG&A

expenses.

Adjusted

operating

profit

margin

increased 50

basis points

compared to

the same

period in fiscal

2022. Diluted

earnings per

share of $2.36

increased 19

percent in

the

six-month

period

ended

November

27,

2022,

and

adjusted

diluted

earnings

per

$2.21 increased

percent

constant-

currency basis

compared

to the

same period

last year

(see the

“Non-GAAP Measures”

section below

for a

description of

our use

measures not defined by GAAP).

A summary of our consolidated financial results for the six-month period

ended November 27, 2022, follows:

Six-Month Period Ended Nov.

27, 2022

In millions,

except per

Six-Month

Period Ended

Nov. 27, 2022

vs. Nov. 28,

2021

Percent of Net

Sales

Constant-

Currency

Growth (a)

Net sales

9,938.3

Operating profit

1,885.4

19.0

Net earnings attributable to General Mills

1,425.9

Diluted earnings per share

2.36

Organic net sales growth rate (a)

Adjusted operating profit (a)

1,760.9

17.7

Adjusted diluted earnings per share (a)

2.21

(a)

See the "Non-GAAP Measures" section below for our use of measures not defined by GAAP.

Consolidated

net sales

were as follows:

Six-Month Period Ended

Nov. 27, 2022

Nov. 27, 2022 vs.

Nov. 28, 2021

Net sales (in millions)

9,938.3

9,563.9

Contributions from volume growth (a)

(12)

pts

Net price realization and mix

pts

Foreign currency exchange

(1)

Note: Table may not foot due to rounding.

(a)

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

The 4

percent increase

in net

sales for

the six-month

period ended

November 27,

2022, was

driven

by favorable

net price

realization

and mix, partially offset by a decrease in contributions

from volume

growth and unfavorable foreign currency exchange.

Components of organic net sales growth are shown in the following

table:

Six-Month Period Ended Nov.

27, 2022 vs.

Six-Month Period Ended Nov.

28, 2021

Contributions from organic volume growth (a)

(5)

pts

Organic net price realization and mix

pts

Organic net sales growth

pts

Foreign currency exchange

(1)

Acquisition and divestitures

(5)

pts

Net sales growth

pts

Note: Table may not foot due to rounding

(a)

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

Organic

net

sales

increased

percent

the

six-month

period

ended

November

27,

2022,

driven

favorable

organic

net

price

realization and mix, partially offset by a decrease in

contributions from organic volume growth.

Cost

sales

increased

$450 million

$6,786 million

the

six-month

period

ended

November

27,

2022,

compared

the

same

period

in fiscal

2022.

The increase

was

driven

by a

$939 million

increase

attributable

to product

rate

and

mix,

partially

offset

$749

million

decrease due

to lower

volume.

recorded

a $200

million

net increase

in cost

of sales

to the

mark-to-market

valuation

certain

commodity

positions

and

grain

inventories

the

six-month

period

ended

November

27,

2022,

compared

$36 million net

decrease in

the six-month

period ended

November 28,

2021. In

the six-month

period ended

November 27, 2022,

recorded a $24 million charge related to a voluntary recall

on certain international

Häagen-Dazs

ice cream products.

SG&A expenses

increased

$99 million

to $1,686 million

in the

six-month period

ended November

27, 2022,

compared to

the same

period

in fiscal

2022, primarily

driven

by valuation

adjustments and

the loss

on sale

of certain

corporate investments

in fiscal

2023

and a recovery related to a Brazil indirect tax item in fiscal

2022. SG&A expenses as a percent of net sales increased

40 basis points in

the six-month period ended November 27, 2022, compared to the same period

of fiscal 2022.

Divestitures

gain,

net

totaled

$431

million

the

six-month

period

ended

November

27,

2022,

primarily

to the

sale of

our

Helper main meals

and Suddenly Salad

side dishes business (please

refer to Note 2

to the Consolidated Financial

Statements in Part I,

Item 1 of this report).

Restructuring,

impairment,

and

other

exit

costs

(recoveries)

totaled

$13 million

expense

the

six-month

period

ended

November 27,

2022, compared

to $2 million

of net recoveries

in the same

period last year

(please refer

to Note 3

to the Consolidated

Financial Statements in Part I, Item 1 of this report).

Benefit plan non-service

income

totaled $43 million

in the six-month

period ended November

27, 2022,

compared to $57 million

the same period last year, primarily reflecting

an increase in interest costs, partially offset by lower amortization

of losses.

Interest, net

for the

six-month period

ended November

27, 2022,

decreased $9 million

to $179 million

compared to

the same

period

of fiscal 2022, primarily driven by lower average long-term debt balances

partially offset by higher interest rates.

The

effective

tax

rate

for

the six-month

period

ended

November

27,

2022,

was

20.8

percent

compared

21.7

percent

the

six-

month

period

ended

November

28,

2021.

The

0.9

percentage

point

decrease

was

primarily

due

certain

nonrecurring

discrete

tax

benefits and favorable changes in

earnings mix by jurisdiction

in fiscal 2023, partially offset

by unfavorable tax components

related to

the divestitures

incurred

in the

six-month

period ended

November 27,

2022. Our

effective

tax rate

excluding certain

items affecting

comparability was

20.4 percent in

the six-month

period ended

November 27,

2022, compared

to 22.0

percent in

the same

period last

year

(see

the

“Non-GAAP

Measures”

section

below

for

description

our

use

measures

not

defined

GAAP).

The

1.6

percentage

point

decrease

primarily

due

certain

nonrecurring

discrete

tax

benefits

and

favorable

changes

earnings

mix

jurisdiction in fiscal 2023.

After-tax

earnings from

joint ventures

decreased

to $45 million

for the

six-month

period ended

November 27,

2022 compared

$62 million

in the

same period

in fiscal

2022,

primarily

driven by

higher input

costs at

CPW and

HDJ and

lower

net sales

at HDJ

partially offset by favorable net price realization

and mix at CPW.

On a constant-currency basis, after-tax earnings from

joint ventures

decreased 17

percent (see the

“Non-GAAP Measures”

section below

for a description

of our use

of measures

not defined

by GAAP).

The components of our joint ventures’ net sales growth are shown in the following

table:

Six-Month Period Ended Nov.

27, 2022 vs.

Six-Month Period Ended Nov.

28, 2021

CPW

HDJ

Total

Contributions from volume growth (a)

(9)

pts

(9)

pts

Net price realization and mix

pts

(1)

Net sales growth in constant currency

pts

(9)

pts

Flat

Foreign currency exchange

(12)

pts

(18)

pts

(13)

pts

Net sales growth

(9)

pts

(28)

pts

(14)

pts

Note: Table may not foot due to rounding

(a)

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

Average

diluted

outstanding

decreased

10 million

the

six-month

period

ended

November

27,

2022,

from

the

same

period a year ago primarily due to share repurchases, partially offset

by option exercises.

SEGMENT OPERATING

RESULTS

Our businesses are

organized into four

operating segments: North

America Retail; International;

Pet, and North

America Foodservice.

Please

refer

Note

the

Consolidated

Financial

Statements

Part

Item

this

report

for

description

our

operating

segments.

North America Retail Segment Results

North America Retail net sales were as follows:

Quarter Ended

Six-Month Period Ended

Nov. 27,

2022

Nov. 27, 2022 vs

Nov. 28, 2021

Nov. 28,

2021

Nov. 27,

2022

Nov. 27, 2022 vs

Nov. 28, 2021

Nov. 28,

2021

Net sales (in millions)

3,373.1

3,044.6

6,361.9

5,755.2

Contributions from volume growth (a)

(8)

pts

(7)

pts

Net price realization and mix

pts

Foreign currency exchange

(1)

Flat

Note: Table may not foot due to rounding.

(a)

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

North America

Retail net

sales increased

11 percent

in the second

quarter of

fiscal 2023

compared to

the same

period in

fiscal 2022,

driven by

favorable net price

realization and

mix, partially offset

by a decrease

in contributions from

volume growth

and unfavorable

foreign currency exchange.

North America

Retail net sales

increased 11

percent in the

six-month period

ended November 27,

2022, compared

to the same

period

in fiscal 2022, driven by favorable net price realization and mix, partially offset

by a decrease in contributions from volume growth.

The components of North America Retail organic net

sales growth are shown in the following table:

Quarter Ended

Six-Month Period Ended

Nov. 27, 2022

Contributions from organic volume growth (a)

(7)

pts

(6)

pts

Organic net price realization and mix

pts

Organic net sales growth

pts

Foreign currency exchange

(1)

Flat

Divestiture (b)

(2)

pts

(2)

pts

Net sales growth

pts

Note: Table may not foot due to rounding.

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

(b) Divestiture of Helper main meals and Suddenly Salad side dishes businesses in fiscal 2023. Please see Note 2 to the Consolidated Financial

Statements in Part I, Item 1 of this report.

North

America

Retail

organic

net

sales

increased

percent

the

second

quarter

fiscal

2023

and

the

six-month

period

ended

November 27,

2022, compared

to the same

periods

in fiscal 2022

driven by

favorable organic

net price realization

and mix, partially

offset by a decrease in contributions from organic

volume growth.

North America Retail net sales percentage change by operating unit

are shown in the following table:

Quarter Ended

Six-Month Period Ended

Nov. 27, 2022

U.S. Snacks

U.S. Meals & Baking Solutions

U.S. Morning Foods

Canada (a)

(3)

Flat

Total

(a)

On a constant-currency basis, Canada net sales increased 4 percent in the second quarter of fiscal 2023 and increased 6 percent for the six-month

period ended

November 27,

2022, compared

to the

same periods

in fiscal

2022. See

the "Non-GAAP

Measures" section

below for

our use

this measure not defined by GAAP.

Segment

operating

profit increased

percent

to $837 million

in the

second

quarter of

fiscal 2023

compared

to $675 million

in the

same

period

fiscal

2022,

primarily

driven

favorable

net

price

realization

and

mix,

partially

offset

higher

input

costs,

decrease

contributions

from

volume

growth,

and

higher

SG&A

expenses.

Segment

operating

profit

increased

percent

constant-currency

basis

the

second

quarter

fiscal

2023

compared

the

same

period

fiscal

2022

(see

the

“Non-GAAP

Measures” section below for our use of this measure not defined by GAAP).

Segment

operating

profit

increased

percent

$1,615 million

the

six-month

period

ended

November

27,

2022,

compared

$1,324 million in the

same period in fiscal

2022, primarily driven by

favorable net price realization

and mix, partially offset

by higher

input

costs,

decrease

contributions

from

volume

growth,

and

higher

SG&A

expenses.

Segment

operating

profit

increased

percent on

a constant-currency

basis in

the six-month

period ended

November 27,

2022, compared

to the

same period

in fiscal

2022

(see the “Non-GAAP Measures” section below for our use of this measure

not defined by GAAP).

International Segment Results

International net sales were as follows:

Quarter Ended

Six-Month Period Ended

Nov. 27,

2022

Nov. 27, 2022 vs

Nov. 28, 2021

Nov. 28,

2021

Nov. 27,

2022

Nov. 27, 2022 vs

Nov. 28, 2021

Nov. 28,

2021

Net sales (in millions)

671.7

(27)

914.4

1,324.2

(28)

1,845.0

Contributions from volume growth (a)

(39)

pts

(39)

pts

Net price realization and mix

pts

Foreign currency exchange

(6)

pts

(6)

pts

Note: Table may not foot due to rounding.

(a)

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

International

net

sales

decreased

percent

the

second

quarter

fiscal

2023

and

percent

the

six-month

period

ended

November

27,

2022,

compared

the

same

periods

fiscal

2022,

driven

decrease

contributions

from

volume

growth,

including

the

impact

of volume

declines

from

divestitures

and

the

voluntary

recall

on certain

international

Häagen-Dazs

ice

cream

products,

and unfavorable foreign currency exchange, partially offset

by favorable net price realization and mix.

The components of International organic net sales growth

are shown in the following table:

Quarter Ended

Six-Month Period Ended

Nov. 27, 2022

Contributions from organic volume growth (a)

(7)

pts

(7)

pts

Organic net price realization and mix

pts

Organic net sales growth

pts

Foreign currency exchange

(6)

pts

(6)

pts

Divestitures (b)

(26)

pts

(24)

pts

Net sales growth

(27)

pts

(28)

pts

Note: Table may not foot due to rounding.

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

(b) Divestitures primarily include the impact of the sale of our interests in Yoplait SAS, Yoplait

Marques SNC, and Liberté Marques Sàrl and our

European dough businesses in fiscal 2022.

International

organic

net

sales increased

5 percent

in the

second quarter

of fiscal

2023

compared

to the

same

period in

fiscal

2022,

driven by favorable organic net price realization

and mix, partially offset by a decrease in contributions from organic

volume growth.

International organic

net sales increased

1 percent in the

six-month period ended

November 27, 2022,

compared to the same

period in

fiscal

2022,

driven

favorable

organic

net

price

realization

and

mix,

partially

offset

decrease

contributions

from

organic

volume growth.

Segment operating profit

decreased 70 percent to

$18 million in the second

quarter of fiscal 2023

from $59 million in the

same period

fiscal

2022,

primarily

driven by

higher

input

costs and

decrease

contributions

from

volume

growth,

including

the

impact

volume declines from divestitures and the voluntary recall on certain

international

Häagen-Dazs

ice cream products, partially offset by

favorable

net

price

realization

and

mix

and

decrease

SG&A

expenses.

Segment

operating

profit

decreased

percent

constant-currency

basis

the

second

quarter

fiscal

2023

compared

the

same

period

fiscal

2022

(see

the

“Non-GAAP

Measures” section below for our use of this measure not defined by GAAP).

Segment operating profit decreased 56

percent to $53 million in the six-month

period ended November 27, 2022, from $120

million in

the same

period in

fiscal 2022,

primarily driven

by a

decrease in

contributions from

volume growth,

including the

impact of

volume

declines from

divestitures and

the voluntary

recall on

certain international

Häagen-Dazs

ice cream

products,

and higher

input costs,

partially offset

by favorable

net price

realization and

mix and

a decrease

in SG&A

expenses. Segment

operating profit

decreased 51

percent on

a constant-currency

basis in

the six-month

period ended

November 27,

2022, compared

to the

same period

in fiscal

2022

(see the “Non-GAAP Measures” section below for our use of this measure

not defined by GAAP).

Pet Segment Results

Pet net sales were as follows:

Quarter Ended

Six-Month Period Ended

Nov. 27,

2022

Nov. 27, 2022 vs

Nov. 28, 2021

Nov. 28,

2021

Nov. 27,

2022

Nov. 27, 2022 vs

Nov. 28, 2021

Nov. 28,

2021

Net sales (in millions)

592.9

Flat

593.4

1,172.8

1,081.4

Contributions from volume growth (a)

(11)

pts

(6)

pts

Net price realization and mix

pts

Foreign currency exchange

Flat

Note: Table may not foot due to rounding.

(a)

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

Pet net sales

in the second

quarter of fiscal

2023 essentially

matched the same

period in fiscal

2022, as

favorable net price

realization

and mix was offset by a decrease in contributions from volume

growth.

Pet net sales

increased 8

percent during

the six-month

period ended November

27, 2022, compared

to the same

period in fiscal

2022,

driven by favorable net price realization and mix, partially offset by

a decrease in contributions from volume growth.

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

table:

Quarter Ended

Six-Month Period Ended

Nov. 27, 2022

Contributions from organic volume growth (a)

(11)

pts

(7)

pts

Organic net price realization and mix

pts

Organic net sales growth

Flat

pts

Foreign currency exchange

Flat

Acquisition (b)

Flat

pts

Net sales growth

Flat

pts

Note: Table may not foot due to rounding.

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

(b) Acquisition of Tyson Foods’ pet treats business in fiscal 2022. Please see Note 2 to the Consolidated Financial Statements in Part I, Item 1 of

this report.

Pet organic

net sales

in the

second quarter

of fiscal

2023 essentially

matched the

same period

in fiscal

2022 as

favorable organic

net

price realization and mix was offset by a decrease in contributions

from organic volume growth.

Pet organic

net sales

increased

6 percent

in the

six-month

period

ended November

27,

2022,

compared

to the

same period

in fiscal

2022,

driven by

favorable organic

net price

realization and

mix,

partially offset

by a

decrease in

contributions from

organic

volume

growth.

Segment

operating

profit

decreased

percent

$87 million

the

second

quarter

fiscal

2023

compared

$132 million

the

same period in fiscal 2022,

primarily driven by higher

input costs and a decrease in

contributions from volume

growth, partially offset

by favorable

net price

realization and

mix. Segment

operating profit

decreased 34

percent on

a constant-currency

basis in

the second

quarter of

fiscal 2023

compared to

the same

period in

fiscal 2022

(see the

“Non-GAAP Measures”

section below

for our

use of

this

measure not defined by GAAP).

Segment

operating

profit

decreased

percent

$210 million

the

six-month

period

ended

November

27,

2022,

compared

$247 million

the

same

period

fiscal

2022,

primarily

driven

higher

input

costs,

decrease

contributions

from

volume

growth,

and

increase

SG&A

expenses,

partially

offset

favorable

net

price

realization

and

mix.

Segment

operating

profit

decreased 15 percent

on a constant-currency

basis in the six-month

period ended November

27, 2022, compared

to the same period

fiscal 2022 (see the “Non-GAAP Measures” section below for our use of this measure

not defined by GAAP).

North America Foodservice Segment Results

North America Foodservice net sales were as follows:

Quarter Ended

Six-Month Period Ended

Nov. 27,

2022

Nov. 27, 2022 vs

Nov. 28, 2021

Nov. 28,

2021

Nov. 27,

2022

Nov. 27, 2022 vs

Nov. 28, 2021

Nov. 28,

2021

Net sales (in millions)

583.0

471.6

1,079.4

882.3

Contributions from volume growth (a)

pts

Net price realization and mix

pts

Foreign currency exchange

Flat

Note: Table may not foot due to rounding.

(a)

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

North America

Foodservice net

sales increased

24 percent

in the

second quarter

of fiscal

2023 compared

to the

same period

in fiscal

2022,

driven

favorable

net

price

realization

and

mix,

including

market

index

pricing

bakery

flour,

and

increase

contributions from volume growth.

North America

Foodservice net

sales increased

22 percent

in the

six-month period

ended November

27, 2022,

compared to

the same

period

fiscal

2022,

driven

favorable

net

price

realization

and

mix,

including

market

index

pricing

bakery

flour,

and

increase in contributions from volume growth.

The components of North America Foodservice organic

net sales growth

are shown in the following table:

Quarter Ended

Six-Month Period Ended

Nov. 27, 2022

Contributions from organic volume growth (a)

(2)

pts

(3)

pts

Organic net price realization and mix

pts

Organic net sales growth

pts

Foreign currency exchange

Flat

Acquisition (b)

pts

Net sales growth

pts

Note: Table may not foot due to rounding.

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

(b) Acquisition of TNT Crust in fiscal 2023. Please see Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this report.

North America Foodservice organic

net sales increased 17 percent in

the second quarter of fiscal 2023

and the six-month period ended

November 27, 2022, compared

to the same periods

in fiscal 2022,

driven by favorable organic

net price realization and

mix, including

market index pricing on bakery flour, partially

offset by a decrease in contributions from organic

volume growth.

Segment operating profit increased

20 percent to $82

million in the second

quarter of fiscal 2023

compared to $68 million in

the same

period in fiscal 2022,

primarily driven by favorable

net price realization and

mix, partially offset

by higher input costs

and an increase

in SG&A

expenses.

Segment operating

profit increased

20 percent

on a

constant-currency basis

in the

second quarter

of fiscal

2023

compared to the

same period in

fiscal 2022 (see

the “Non-GAAP Measures”

section below for

our use of

this measure not

defined by

GAAP).

Segment

operating

profit

decreased

percent

$135

million

the

six-month

period

ended

November

27,

2022,

compared

$140 million

in the

same period

in fiscal

2022,

primarily

driven by

higher input

costs and

an increase

in SG&A

expenses,

partially

offset by favorable net

price realization and mix.

Segment operating profit decreased

3 percent on a constant-currency

basis in the six-

month period

ended November

27, 2022,

compared to

the same

period in

fiscal 2022

(see the

“Non-GAAP Measures”

section below

for our use of this measure not defined by GAAP).

UNALLOCATED

CORPORATE

ITEMS

Unallocated corporate expense

totaled $212 million in

the second quarter

of fiscal 2023,

compared to $132 million

in the same period

in fiscal

2022. In

the second

quarter of

fiscal 2023,

we recorded

a $25 million

net increase

in expense

related to

the mark-to-market

valuation of

certain commodity

positions and

grain inventories

compared to

a $12 million

net decrease

in expense

in the same

period

last

year.

recorded

$36 million

net

losses

valuation

adjustments

and

the

sale

corporate

investment

the

second quarter of fiscal 2023,

compared to $10 million of

net gains in the second

quarter of fiscal 2022.

In the second quarter of

fiscal

2023,

recorded

million

charge

voluntary

recall

certain

international

Häagen-Dazs

ice

cream

products.

addition, we

recorded $3

million of

integration costs

primarily related

to our

acquisition of

TNT Crust

in the

second quarter

of fiscal

2023 compared to $4 million of integration

costs related to our acquisition of Tyson

Foods’ pet treats business in the

second quarter of

fiscal 2022. In the second

quarter of fiscal 2023, we recorded

$2 million of transaction costs

primarily related to the

sale of our Helper

main meals and Suddenly

Salad side dishes business

compared to $38 million

of transaction costs related to

the sale of our

interests in

Yoplait

SAS, Yoplait

Marques SNC, and Liberté Marques Sàrl

and the sale of our European dough

businesses in the second quarter of

fiscal 2022.

Unallocated corporate

expense totaled

$545 million

in the

six-month period

ended November

27, 2022,

compared to

$188 million

the

same

period

last

year.

recorded

$200

million

net

increase

expense

the

mark-to-market

valuation

certain

commodity positions and grain

inventories in the six-month period

ended November 27, 2022, compared

to a $36 million net decrease

expense

the

same

period

last

year.

recorded

$62

million

net

losses

valuation

adjustments

and

the

sale

corporate investments in the six-month

period ended November 27, 2022,

compared to $10 million of net

gains in the same period last

year.

the

six-month

period

ended

November

27,

2022,

recorded

$24

million

charge

voluntary

recall on

certain

international

Häagen-Dazs

ice

cream

products.

addition,

recorded

million

integration

costs

primarily

our

acquisition of

TNT Crust

in the

six-month period

ended November

27, 2022,

compared to

$16 million

of integration

costs related

our acquisition of Tyson

Foods’ pet treats business

in the six-month

period ended November 28,

2021.

In the six-month period

ended

November 27,

2022, we recorded

$2 million of

transaction costs primarily

related to

the sale of

our Helper

main meals and

Suddenly

Salad

side

dishes

business

compared

to $48

million

transaction

costs related

the

sale of

our

interests in

Yopla

it SAS,

Yoplait

Marques SNC, Liberté

Marques Sàrl and

the sale of

our European

dough businesses. In

addition, we

recorded a $21

million recovery

related to a Brazil indirect tax item and a $13 million insurance recovery

in the six-month period ended November 28, 2021.

LIQUIDITY

AND CAPITAL

RESOURCES

During the

six-month period

ended November

27, 2022,

cash provided by

operations was

$1,201 million compared

to $1,498 million

in the

same period

last year.

The $297

million decrease

was primarily

driven by

an increase in

inventory and

higher cash

income tax

payments in the six-month period ended November 27, 2022 as compared

to the same period a year ago.

Cash provided by investing activities during the

six-month period ended November 27, 2022, was $125

million compared to cash used

of $1,396 million

for the

same period

in fiscal

2022. During

the first

quarter of

the 2023,

we completed

the sale

of the

Helper main

meals and Suddenly

Salad side dishes

business for

$607 million

cash. In

the first

quarter of

fiscal 2023,

we acquired

TNT Crust

for

$252

million

cash, net

of cash

acquired.

In the

first quarter

of fiscal

2022,

we acquired

the Tyson

Foods’

pet treats

business

for

aggregate purchase price

of $1.2 billion. In

addition, we spent $227

million on purchases of

land, buildings, and

equipment in the six-

months ended November 27, 2022, compared to $224 million in

the same period last year.

Cash

used

financing

activities

during

the

six-month

period

ended

November

27,

2022,

was

$1,230

million

compared

$427 million

cash

used

financing

activities

the

same

period

fiscal

2022.

paid

$648

million

dividends

the

six-

month period ended November

27, 2022, compared to

$623 million in the same period

last year.

We purchased

$901 million of shares

of common

stock in the

six-month period

ended November 27,

2022, compared

to $375 million

in the same

period in fiscal

2022.

addition, we

had $253

million of

net debt

issuances in

the six-month

period ended

November 27,

2022, compared

to $568 million

net debt issuances in the same period a year ago.

As of

November

27,

2022, we

had

$542 million

of cash

and cash

equivalents

in foreign

jurisdictions. In

anticipation

of repatriating

funds from

foreign jurisdictions,

we record

local country

withholding taxes

on our

international earnings,

as applicable.

Furthermore,

may

repatriate

our

cash

and

cash

equivalents

held

our

foreign

subsidiaries

without

such

funds

being

subject

further

U.S.

income tax liability.

Earnings prior to fiscal 2018 from our foreign subsidiaries remain permanent

ly reinvested in those jurisdictions.

The following table details the fee-paid committed and uncommitted credit

lines we had available as of November 27, 2022:

In Billions

Facility

Amount

Borrowed

Amount

Committed credit facility expiring April 2026

2.7

Uncommitted credit facilities

0.6

Total committed

and uncommitted credit facilities

3.3

The

third-party

holder

the

General

Mills

Cereals,

LLC

(GMC)

Class

Interests

receives

quarterly

preferred

distributions

from

available net

income based

on the application

of a

floating preferred

return rate

to the

holder’s capital

account balance

established in

the

most

recent

mark-to-market

valuation

(currently

$252 million).

June 1,

2021,

the

floating

preferred

return

rate

GMC’s

Class A Interests

was reset

to the

sum of

three-month LIBOR

plus 160

basis points.

The preferred

return rate

is adjusted

every three

years through a negotiated agreement with the Class A Interest holder

or through a remarketing auction.

have an option

to purchase the

Class A Interests for

consideration equal to

the then current

capital account value,

plus any unpaid

preferred return

and the

prescribed make-whole

amount. If

we purchase

these interests,

any change

in the

third-party holder’s

capital

account

from

its

original

value

will

charged

directly

retained

earnings

and

will

increase

decrease

the

net

earnings

used

calculate EPS in that period.

To ensure availability

of funds, we maintain bank credit lines and have commercial paper programs

available to us in the United States

and Europe.

Certain

our

long-term

debt

agreements,

our

credit

facilities,

and

our

noncontrolling

interests

contain

restrictive

covenants.

November 27, 2022, we were in compliance with all of these covenants.

have

$1,964

million

long-term

debt

maturing

the

months

that

classified

current,

including

$400

million

floating-rate

notes

due

October

17,

2023,

€500

million

1.00

percent

fixed-rate

notes

due

April

27,

2023,

€250

million

0.00

percent

fixed-rate

notes

due

May

16,

2023,

€500

million

0.00

percent

fixed-rate

notes

due

July

27,

2023,

and

€250

million

floating-rate notes

due May

16, 2023.

believe that

cash flows

from operations,

together with

available short-

and long-term

debt

financing, will be adequate to meet our liquidity and capital needs for

at least the next 12 months.

CRITICAL ACCOUNTING ESTIMATES

Our significant accounting policies are described in Note 2

to the Consolidated Financial Statements included

in our Annual Report on

Form

10-K for

the fiscal

year ended

May 29,

2022. The

accounting policies

used in

preparing our

interim fiscal

2023

Consolidated

Financial Statements are the same as those described in our Form 10-K.

Our

critical

accounting

estimates

are

those

that

have

meaningful

impact

the

reporting

our

financial

condition

and

results

operations.

These

estimates

include

our

accounting

for

revenue

recognition,

valuation

long-lived

assets,

intangible

assets,

stock-

based compensation,

income taxes,

and defined

benefit pension,

other postretirement

benefit, and

postemployment benefit

plans. The

assumptions and methodologies used in the determination of those

estimates as of November 27, 2022, are the same as those described

in our Annual Report on Form 10-K for the fiscal year ended May 29, 2022.

Our

annual

goodwill

and

indefinite-lived

intangible

assets

impairment

test

was

performed

the

first

day

the

second

quarter

fiscal

2023,

and

determined

there

was

impairment

our

intangible

assets

their

fair

values

were

substantially

excess of the

carrying values,

except for

the

Uncle Toby’s

brand intangible

asset. In addition,

while having

significant coverage

as of

our fiscal 2023

assessment date, the

Progresso

and

EPIC

brand intangible assets had

risk of decreasing coverage.

will continue to

monitor these businesses for potential impairment.

RECENTLY

ISSUED ACCOUNTING PRONOUNCEMENTS

In September 2022, the Financial Accounting Standards

Board (FASB)

issued Accounting Standards Update (ASU) 2022-04 requiring

enhanced

disclosures

supplier

financing

programs.

The

ASU

requires

disclosure

the

key

terms

the

program

and

rollforward

the

obligation

during

the

annual

period,

including

the

amount

obligations

confirmed

and

obligations

subsequently

paid.

The

new

disclosure

requirements

are

effective

for

fiscal

years

beginning

after

December

15,

2022,

with

the

exception

of the

rollforward requirement,

which is

effective

for fiscal

years beginning

after December

15, 2023,

which for

us is

the

first

quarter

fiscal

2024

for

the

primary

requirement

and

the

first

quarter

fiscal

2025

for

the

rollforward

requirement.

Early

adoption is

permitted. We

have historically

presented the

key terms

of these

programs and

the associated

obligation outstanding.

do not expect this ASU to have a material impact on our financial statements and

related disclosures.

In March

2020, the FASB

issued optional

accounting guidance

for a limited

period of time

to ease the

potential burden

in accounting

for

reference

rate

reform.

The

new

standard

provides

expedients

and

exceptions

existing

accounting

requirements

for

contract

modifications and hedge accounting

related to transitioning from discontinued

reference rates, such as LIBOR, to

alternative reference

rates, if

certain criteria

are met.

The new

accounting requirements

can be

applied as

of the

beginning of

the interim

period including

March 12,

2020,

any

date

thereafter,

through

December 31,

2022.

are

the

process

reviewing

our

contracts

and

arrangements

that

will

affected

discontinued

reference

rate

and

are

analyzing

the

impact

this guidance

our

results

operations and financial position.

NON-GAAP MEASURES

have

included

this

report

measures

financial

performance

that

are not

defined

GAAP.

believe

that

these

measures

provide useful information to investors, and include these measures in other

communications to investors.

For each

of these

non-GAAP financial

measures, we

are providing

below a

reconciliation of

the differences

between the

non-GAAP

measure and the most

directly comparable GAAP measure,

an explanation of why

we believe the non-GAAP

measure provides useful

information to

investors, and

any additional

material purposes

for which

our management

or Board

of Directors

uses the

non-GAAP

measure. These non-GAAP measures should be viewed in addition to, and not

in lieu of, the comparable GAAP measure.

Significant Items Impacting Comparability

Several

measures

below

are

presented

adjusted

basis.

The

adjustments

are

either

items

resulting

from

infrequently

occurring

events or items that, in management’s

judgment, significantly affect the year-to-year

assessment of operating results.

The following are descriptions of significant items impacting comparability

of our results.

Divestitures

gain, net

Net divestitures

gain primarily

related to

the sale

of our

Helper main

meals and

Suddenly Salad

side dishes

business in

fiscal 2023.

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

Mark-to-market effects

Net

mark-to-market

valuation

certain

commodity

positions

recognized

unallocated

corporate

items.

Please

see

Note

the

Consolidated Financial Statements in Part I, Item 1 of this report.

Investment activity,

net

Valuation

adjustments and the

loss on sale of

certain corporate investments

in fiscal 2023.

Valuation

adjustments and the

gain on sale

of certain corporate investments in fiscal 2022.

Product recall

Voluntary

recall costs recorded in fiscal 2023 related to certain international

Häagen-Dazs

ice cream products.

Restructuring charges (recoveries)

Restructuring charges

for previously announced

restructuring actions recorded

in fiscal 2023

and fiscal 2022.

Please see Note 3

to the

Consolidated Financial Statements in Part I, Item 1 of this report.

Acquisition integration costs

Integration costs

primarily resulting

from the acquisition

of TNT Crust

in fiscal 2023.

Integration costs

resulting from

the acquisition

of Ty

son Foods’ pet

treats business in fiscal

2022. Please see

Note 2 to

the Consolidated Financial

Statements in Part

I, Item 1

of this

report.

Transaction costs

Transaction

costs

primarily

the

sale

our

Helper

main

meals

and

Suddenly

Salad

side

dishes

business

fiscal

2023.

Transaction

costs related

to the sale

of our

interests in

Yoplait

SAS, Yoplait

Marques SNC,

and Liberté

Marques Sàrl

and the sale

our

European

dough

businesses in

fiscal

2022.

Please see

Note

the

Consolidated

Financial

Statements

Part

Item

this

report.

Non-income tax recovery

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

Organic Net Sales Growth Rates

provide organic

net sales

growth rates

for our

consolidated net

sales and

segment net

sales. This

measure is

used in

reporting to

our

Board

Directors

and

executive

management

and

component

the

measurement

our

performance

for

incentive

compensation purposes.

believe that

organic net

sales growth

rates provide

useful information

to investors

because they

provide

transparency

underlying

performance

our

net

sales

excluding

the

effect

that

foreign

currency

exchange

rate

fluctuations,

acquisitions, divestitures,

and a 53

week, when applicable,

have on year-to-year comparability.

A reconciliation of

these measures to

reported net

sales growth

rates, the

relevant GAAP

measures, are

included in

our Consolidated

Results of

Operations and

Results of

Segment Operations discussions in the MD&A above.

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

Profit Margin)

We believe

this measure provides useful information

to investors because it is important

for assessing our operating profit margin

on a

comparable basis.

Our adjusted operating profit margins are calculated as follows:

Quarter Ended

Nov. 27, 2022

Nov. 28, 2021

In Millions

Value

Percent of

Net Sales

Value

Percent of

Net Sales

Operating profit as reported

799.8

15.3

800.1

15.9

Mark-to-market effects

25.1

0.5

(12.1)

(0.2)

Investment activity, net

35.7

0.7

(10.5)

(0.2)

Product recall

2.9

0.1

Restructuring charges

11.6

0.2

2.7

0.1

Acquisition integration costs

2.8

0.1

3.5

0.1

Transaction costs

1.8

37.6

0.7

Adjusted operating profit

879.7

16.9

821.3

16.3

Six-Month Period Ended

Nov. 27, 2022

Nov. 28, 2021

In Millions

Value

Percent of

Net Sales

Value

Percent of

Net Sales

Operating profit as reported

1,885.4

19.0

1,644.4

17.2

Divestitures gain, net

(430.9)

(4.3)

Mark-to-market effects

199.8

2.0

(36.2)

(0.4)

Investment activity, net

62.0

0.6

(9.8)

(0.1)

Product recall

24.4

0.2

Restructuring charges (recoveries)

13.9

0.1

(1.4)

Acquisition integration costs

4.3

15.9

0.2

Transaction costs

2.0

48.2

0.5

Non-income tax recovery

(20.6)

(0.2)

Adjusted operating profit

1,760.9

17.7

1,640.5

17.2

Note: Tables

may not foot due to rounding.

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

Adjusted Operating Profit Growth on a Constant-currency Basis

This measure is used in reporting

to our Board of Directors and

executive management and as a

component of the measurement of

our

performance for

incentive compensation purposes.

believe that

this measure provides

useful information

to investors because

it is

the

operating

profit

measure

use

evaluate

operating

profit

performance

comparable

year-to-year

basis.

The

measure

evaluated on

a constant-currency

basis by

excluding the

effect that

foreign currency

exchange rate

fluctuations have

on year-to-year

comparability given the volatility in foreign currency exchange rates.

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

as follows:

Quarter Ended

Six-Month Period Ended

Nov. 27, 2022

Nov. 28, 2021

Change

Nov. 27, 2022

Nov. 28, 2021

Change

Operating profit as reported

799.8

800.1

Flat

1,885.4

1,644.4

Divestitures gain, net

(430.9)

Mark-to-market effects

25.1

(12.1)

199.8

(36.2)

Investment activity, net

35.7

(10.5)

62.0

(9.8)

Product recall

2.9

24.4

Restructuring charges (recoveries)

11.6

2.7

13.9

(1.4)

Acquisition integration costs

2.8

3.5

4.3

15.9

Transaction costs

1.8

37.6

2.0

48.2

Non-income tax recovery

(20.6)

Adjusted operating profit

879.7

821.3

1,760.9

1,640.5

Foreign currency exchange impact

Flat

(1)

Adjusted operating profit growth,

on a constant-currency basis

Note: Table may not foot due to rounding.

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

Adjusted Diluted EPS and Related Constant-currency Growth Rates

This measure

is used in

reporting to

our Board of

Directors and executive

management. We

believe that

this measure provides

useful

information to

investors because it

is the profit

ability measure we

use to evaluate

earnings performance on

a comparable year-to-year

basis.

The reconciliation of our GAAP measure, diluted EPS, to adjusted diluted

EPS and the related constant-currency growth rates follows:

Quarter Ended

Six-Month Period Ended

Per Share Data

Nov. 27, 2022

Nov. 28, 2021

Change

Nov. 27, 2022

Nov. 28, 2021

Change

Diluted earnings per share, as reported

1.01

0.97

2.36

1.99

Divestitures gain, net

(0.54)

Mark-to-market effects

0.03

(0.02)

0.25

(0.05)

Investment activity, net

0.04

(0.02)

0.08

(0.02)

Product recall

0.03

Restructuring charges (recoveries)

0.02

(0.01)

Acquisition integration costs

0.01

0.02

Transaction costs

0.05

0.06

Non-income tax recovery

(0.02)

Adjusted diluted earnings per share

1.10

0.99

2.21

1.98

Foreign currency exchange impact

(1)

Adjusted diluted earnings per share

growth, on a constant-currency basis

Note: Table may not foot due to rounding.

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

See our reconciliation

below of the effective

income tax rate as

reported to the adjusted

effective income tax

rate for the tax

impact of

each item affecting comparability.

Constant-currency After-tax Earnings from Joint Ventures

Growth Rates

believe that

this measure

provides useful

information to

investors because

it provides

transparency to

underlying performance

our joint

ventures by

excluding the

effect

that foreign

currency exchange

rate fluctuations

have on

year-to-year

comparability given

volatility in foreign currency exchange markets.

After-tax earnings from joint ventures growth rates on a constant-currency

basis are calculated as follows:

Percentage Change in

After-Tax

Earnings from Joint

Ventures

as Reported

Impact of Foreign

Currency

Exchange

Percentage Change in After-Tax

Earnings from Joint Ventures

on Constant-Currency Basis

Quarter Ended Nov. 27,

2022

(23)

(15)

pts

(8)

Six-Month Period Ended Nov.

27, 2022

(27)

(10)

pts

(17)

Note: Table may

not foot due to rounding.

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

Basis

believe

that

this

measure

our

Canada

operating

unit

net

sales

provides

useful

information

investors

because

provides

transparency to

the underlying

performance for

the Canada operating

unit within our

North America

Retail segment

by excluding

the

effect

that

foreign

currency

exchange

rate

fluctuations

have

year-to-year

comparability

given

volatility

foreign

currency

exchange markets.

Net sales growth rates for our Canada operating unit on a constant-currency

basis are calculated as follows:

Percentage Change in

Net Sales

as Reported

Impact of Foreign

Currency

Exchange

Percentage Change in

Net Sales on Constant-

Currency Basis

Quarter Ended Nov. 27,

2022

(3)

(7)

pts

Six-Month Period Ended Nov.

27, 2022

Flat

(5)

pts

Note: Table may

not foot due to rounding.

Constant-currency Segment Operating Profit Growth Rates

believe that

this measure

provides useful

information to

investors because

it provides

transparency to

underlying performance

our

segments

excluding

the

effect

that

foreign

currency

exchange

rate

fluctuations

have

year-to-year

comparability

given

volatility in foreign currency exchange markets.

Our segments’ operating profit growth rates on a constant-currency

basis are calculated as follows:

Quarter Ended Nov. 27, 2022

Percentage Change in

Operating Profit

as Reported

Impact of Foreign

Currency

Exchange

Percentage Change in Operating

Profit on Constant-Currency

Basis

North America Retail

Flat

International

(70)

(2)

pts

(68)

Pet

(34)

Flat

(34)

North America Foodservice

Flat

Six-Month Period Ended Nov.

27, 2022

Percentage Change in

Operating Profit

as Reported

Impact of Foreign

Currency

Exchange

Percentage Change in Operating

Profit on Constant-Currency

Basis

North America Retail

Flat

International

(56)

(5)

pts

(51)

Pet

(15)

Flat

(15)

North America Foodservice

(3)

Flat

(3)

Note: Tables may not

foot due to rounding.

Adjusted Effective Income Tax

Rates

believe

this

measure

provides

useful

information

investors

because

presents

the

adjusted

effective

income

tax

rate

comparable year-to-year basis.

Adjusted effective income tax rates are calculated as follows:

Quarter Ended

Six-Month Period Ended

Nov. 27, 2022

Nov. 28, 2021

Nov. 27, 2022

Nov. 28, 2021

In Millions

(Except Per Share Data)

Pretax

Earnings

(a)

Income

Taxes

Pretax

Earnings

(a)

Income

Taxes

Pretax

Earnings

(a)

Income

Taxes

Pretax

Earnings

(a)

Income

Taxes

As reported

730.0

147.1

735.1

159.7

1,749.6

363.2

1,513.1

328.6

Divestitures gain, net

(430.9)

(101.9)

Mark-to-market effects

25.1

5.8

(12.1)

(2.8)

199.8

46.0

(36.2)

(8.3)

Investment activity, net

35.7

13.0

(10.5)

0.3

62.0

13.5

(9.8)

0.5

Product recall

2.9

0.7

24.4

5.6

Restructuring charges

(recoveries)

11.6

3.2

2.7

2.8

13.9

3.8

(1.4)

1.9

Acquisition integration costs

2.8

0.7

3.5

0.8

4.3

1.0

15.9

3.6

Transaction costs

1.8

0.6

37.6

7.8

2.0

0.6

48.2

12.4

Non-income tax recovery

(20.6)

(7.0)

As adjusted

809.9

171.0

756.4

168.8

1,625.1

331.8

1,509.2

331.8

Effective tax rate:

As reported

20.2%

21.7%

20.8%

21.7%

As adjusted

21.1%

22.3%

20.4%

22.0%

Sum of adjustment to

income taxes

23.9

8.9

(31.4)

3.1

Average number

of common

shares - diluted EPS

602.0

613.0

604.0

613.8

Impact of income tax adjustments

on adjusted diluted EPS

(0.04)

(0.01)

0.05

Note: Table may not foot due to rounding.

(a)

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

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

Glossary

AOCI

. Accumulated other comprehensive income (loss).

Adjusted diluted EPS.

Diluted EPS adjusted for certain items affecting year-to-year

comparability.

Adjusted operating profit.

Operating profit adjusted for certain items affecting year-to-year

comparability.

Adjusted operating profit

margin.

Operating profit adjusted

for certain items

affecting year-over-year

comparability,

divided by net

sales.

Constant currency.

Financial results

translated to

United States

dollars using

constant foreign

currency exchange

rates based

on the

rates

effect

for

the

comparable

prior-year

period.

present

this

information,

current

period

results

for

entities

reporting

currencies other

than United

States dollars

are translated

into United

States dollars

at the

average exchange

rates in

effect during

the

corresponding

period

the

prior

fiscal

year,

rather

than

the

actual

average

exchange

rates

effect

during

the

current

fiscal

year.

Therefore,

the

foreign

currency

impact

equal

current

year

results

local

currencies

multiplied

the

change

the

average

foreign currency exchange rate between the current fiscal period and the corresponding

period of the prior fiscal year.

Core working capital.

Accounts receivable plus inventories less accounts payable.

Derivatives.

Financial instruments such

as futures, swaps,

options, and forward

contracts that we

use to manage

our risk arising

from

changes in commodity prices, interest rates, foreign exchange rates, and

stock prices.

Euribor.

Euro Interbank Offered Rate.

Fair value

hierarchy.

For purposes

of fair

value measurement,

we categorize

assets and

liabilities into

one of

three levels

based on

the assumptions

(inputs) used

in valuing

the asset or

liability.

Level 1 provides

the most reliable

measure of

fair value, while

Level 3

generally requires significant management judgment. The three levels are

defined as follows:

Level 1:

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

Level 2:

Observable inputs other than quoted prices included in

Level 1, such as quoted prices for similar assets or liabilities in

active markets or quoted prices for identical assets or liabilities in inactive markets.

Level 3:

Unobservable inputs reflecting management’s

assumptions about the inputs used in pricing the asset or liability.

Free cash flow.

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

Generally Accepted

Accounting Principles

(GAAP).

Guidelines, procedures,

and practices

that we

are required

to use in

recording

and reporting accounting information in our financial statements.

Goodwill.

The difference

between the purchase

price of acquired

companies plus the fair

value of any

noncontrolling and redeemable

interests and the related fair values of net assets acquired.

Gross margin.

Net sales less cost of sales.

Hedge accounting.

Accounting for qualifying

hedges that allows changes in

a hedging instrument’s

fair value to offset

corresponding

changes in

the hedged

item in

the same

reporting period.

Hedge accounting

is permitted

for certain

hedging instruments

and hedged

items

only

the

hedging

relationship

highly

effective,

and

only

prospectively

from

the

date

hedging

relationship

formally

documented.

Holistic Margin Management

(HMM).

Company-wide initiative to

use productivity savings, mix

management, and price realization

to offset input cost inflation, protect margins,

and generate funds to reinvest in sales-generating activities.

Interest

bearing

instruments.

Notes

payable,

long-term

debt,

including

current

portion,

cash

and

cash

equivalents,

and

certain

interest bearing investments classified within prepaid expenses and other current

assets and other assets.

LIBOR.

London Interbank Offered Rate.

Mark-to-market.

The act of determining a value for

financial instruments, commodity contracts, and

related assets or liabilities based

on the current market price for that item.

Net

mark-to-market

valuation of

certain

commodity

positions.

Realized

and

unrealized

gains

and

losses on

derivative

contracts

that will be allocated to segment operating profit when the exposure we are hedging

affects earnings.

Net price realization.

The impact of list and promoted price changes, net of trade and other price

promotion costs.

Net realizable

value.

The estimated

selling price

in the

ordinary course

of business,

less reasonably

predictable costs

of completion,

disposal, and transportation.

Noncontrolling interests.

Interests of subsidiaries held by third parties.

Notional

amount.

The

amount

position

agreed

upon

amount

derivative

contract

which

the

value

financial

instruments are calculated.

OCI.

Other Comprehensive Income.

Organic net sales growth

. Net sales growth adjusted

for foreign currency translation,

acquisitions, divestitures and a

fiscal week,

when applicable.

Project-related costs.

Costs incurred related to our restructuring initiatives not included in restructuring

charges.

Redeemable interest.

Interest of subsidiaries held by a third party

that can be redeemed outside of our

control and therefore cannot be

classified as a noncontrolling interest in equity.

Reporting unit

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

segment.

Strategic

Revenue

Management

(SRM).

company-wide

capability

focused

generating

sustainable

benefits

from

net

price

realization

and

mix

identifying

and

executing

against

specific

opportunities

apply

tools

including

pricing,

sizing,

mix

management, and promotion optimization across each of our businesses.

Supply chain

input costs.

Costs incurred

to produce

and deliver

product,

including costs

for

ingredients

and

conversion, inventory

management, logistics, and warehousing.

Translation

adjustments.

The impact

of the conversion

of our foreign

affiliates’ financial

statements to United

States dollars

for the

purpose of consolidating our financial statements.

Variable

interest

entities (VIEs).

A legal

structure

that is

used for

business purposes

that either

(1) does

not have

equity investors

that have voting

rights and share in

all the entity’s

profits and losses or

(2) has equity

investors that do not

provide sufficient financial

resources to support the entity’s activities.

Working capital

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

CAUTIONARY STATEMENT

RELEVANT

TO FORWARD

-LOOKING INFORMATION

FOR THE PURPOSE OF “SAFE

HARBOR” PROVISIONS OF THE PRIVATE

SECURITIES LITIGATION

REFORM ACT OF 1995

This report

contains or

incorporates by

reference

forward-looking

statements within

the meaning

of the

Private Securities

Litigation

Reform Act

of 1995

that are

based on

our current

expectations and

assumptions. We

also may

make written

or oral

forward-looking

statements,

including

statements

contained

our

filings

with

the

Securities

and

Exchange

Commission

and

our

reports

stockholders.

The words or

phrases “will likely

result,” “are expected

to,” “will continue,”

“is anticipated,” “estimate,”

“plan,” “project,” or

similar

expressions identify

“forward-looking statements”

within the

meaning of

the Private

Securities Litigation

Reform Act

of 1995.

Such

statements are

subject to

certain risks

and uncertainties

that could

cause actual

results to

differ

materially from

historical results

and

those currently anticipated or projected. We

wish to caution you not to place undue reliance on any such forward-looking statements.

In connection

with the “safe

harbor” provisions

of the Private

Securities Litigation

Reform Act of

1995, we are

identifying important

factors

that could

affect

our financial

performance

and could

cause our

actual results

in future

periods

to differ

materially from

any

current opinions or statements.

Our future results could

be affected

by a variety of

factors, such as: the impact

of the COVID-19 pandemic

on our business, suppliers,

consumers,

customers,

and

employees;

disruptions

inefficiencies

the

supply

chain,

including

any

impact

the

COVID-19

pandemic;

competitive

dynamics

the

consumer

foods

industry

and

the

markets

for

our

products,

including

new

product

introductions,

advertising

activities,

pricing

actions,

and

promotional

activities

our

competitors;

economic

conditions,

including

changes

inflation

rates,

interest

rates,

tax

rates,

the

availability

capital;

product

development

and

innovation;

consumer

acceptance

new

products

and

product

improvements;

consumer

reaction

pricing

actions

and

changes

promotion

levels;

acquisitions

dispositions

businesses

assets;

changes

capital

structure;

changes

the

legal

and

regulatory

environment,

including

tax

legislation,

labeling

and

advertising

regulations,

and

litigation;

impairments

the

carrying

value

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 critical

accounting

estimates; product

quality and

safety issues,

including

recalls and

product

liability; changes

consumer

demand

for

our

products;

effectiveness

advertising,

marketing,

and

promotional

programs;

changes

consumer

behavior,

trends,

and

preferences,

including

weight

loss

trends;

consumer

perception

health-related

issues,

including

obesity;

consolidation

in the

retail environment;

changes in

purchasing and

inventory levels

of significant

customers; fluctuations

in the

cost

and

availability

supply

chain

resources,

including

raw

materials,

packaging,

energy,

and

transportation;

effectiveness

restructuring

and

cost

saving

initiatives;

volatility

the

market

value

derivatives

used

manage

price

risk

for

certain

commodities; benefit plan

expenses due to

changes in plan

asset values and discount

rates used to

determine plan liabilities;

failure or

breach of

our information

technology systems;

foreign economic

conditions, including

currency rate

fluctuations; and

political unrest

in foreign markets and economic uncertainty due to terrorism or war.

You

should also

consider the risk

factors that we

identify in Item

1A of Part

I of our

Annual Report on

Form 10-K for

the fiscal year

ended May 29, 2022 which could also affect our future results.

We undertake

no obligation to publicly revise any forward-looking

statements to reflect events or circumstances

after the date of those

statements or to reflect the occurrence of anticipated or unanticipated events.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

The

estimated

maximum

potential

value-at-risk

arising

from

one-day

loss

fair

value

for

our

interest

rate,

foreign

exchange,

commodity, and equity

market-risk-sensitive instruments outstanding as of November 27,

2022, was as follows:

In Millions

One-day Risk

of Loss

Change During

Six-Month

Period Ended

Nov. 27, 2022

Analysis of Change

Interest rate instruments

Rising interest rates

Foreign currency instruments

Increase in portfolio basis

Commodity instruments

(2)

Decrease in commodity prices

Equity instruments

Immaterial

For additional information, see Item 7A of Part II of our Annual Report on Form 10-K

for the fiscal year ended May 29, 2022.

Item 4.

Controls and Procedures.

We,

under the

supervision and

with the

participation of

our management,

including our

Chief Executive

Officer and

Chief Financial

Officer,

have

evaluated

the

effectiveness

the design

and

operation

our

disclosure

controls

and

procedures

(as

defined

Rule

13a-15(e)

under

the

Securities

Exchange

Act

1934).

Based

our

evaluation,

our

Chief

Executive

Officer

and

Chief

Financial

Officer

have

concluded

that,

November

27,

2022,

our

disclosure

controls

and

procedures

were

effective

ensure

that

information required to

be disclosed by us

in reports that we

file or submit under

the Securities Exchange Act

of 1934 is (1)

recorded,

processed, summarized,

and reported

within the

time periods

specified in

Securities and

Exchange Commission

rules and

forms, and

(2)

accumulated

and

communicated

our

management,

including

our

Chief

Executive

Officer

and

Chief

Financial

Officer,

manner that allows timely decisions regarding required disclosure.

There were no changes in our internal

control over financial reporting (as defined

in Rule 13a-15(f) under the Securities Exchange

Act

1934)

during

the

quarter

ended

November

27,

2022

that

materially

affected,

are

reasonably

likely

materially

affect,

our

internal control over financial reporting.

PART

II.

OTHER INFORMATION

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

The

following

table

sets forth

information

with

respect

our

common

stock

that we

purchased

during

the quarter

ended

November 27, 2022:

Period

Total

Number

of Shares

Purchased (a)

Average

Price Paid

Per Share

Total

Number of Shares

Purchased as Part of a Publicly

Announced Program (b)

Maximum Number of Shares

that may yet be Purchased

Under the Program (b)

August 29, 2022 -

October 2, 2022

1,888,000

76.66

1,888,000

94,104,938

October 3, 2022 -

October 30, 2022

1,905,000

77.19

1,905,000

92,199,938

October 31, 2022 -

November 27, 2022

1,378,000

78.53

1,378,000

90,821,938

Total

5,171,000

77.35

5,171,000

90,821,938

(a)

The total number

of shares purchased

includes shares of

common stock withheld

for the payment

of withholding taxes

upon the distribution

deferred option units.

(b)

On June

27, 2022,

our Board

of Directors

approved a

new authorization

for the

repurchase of

up to

100,000,000 shares

of our

common stock

and terminated

the prior

authorization. Purchases

can be

made in

the open

market or

in privately

negotiated transactions,

including the

use of

call options

and other

derivative instruments,

Rule 10b5-1

trading plans,

and accelerated

repurchase programs.

The Board

did not

specify an

expiration date for the authorization.

PART

II. OTHER INFORMATION

Item 6.

Exhibits.

10.1

General Mills, Inc. 2022 Stock Compensation Plan (incorporated herein by reference to Exhibit 10.1 to the

Company's Current Report on Form 8-K filed September 30, 2022).

31.1

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2

Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101

Financial Statements from the

Quarterly Report on Form

10-Q of the Company

for the quarter ended November

27,

2022,

formatted

Inline

Extensible

Business

Reporting

Language:

(i)

Consolidated

Statements

Earnings;

(ii)

Consolidated

Statements

Comprehensive

Income,

(iii)

Consolidated

Balance

Sheets;

(iv)

Consolidated

Statements of Total

Equity and Redeemable

Interest; (v) Consolidated

Statements of Cash

Flows; and (vi)

Notes to

Consolidated Financial Statements.

104

Cover Page, formatted in Inline Extensible Business Reporting Language

and contained in Exhibit 101.

SIGNATURES

Pursuant

the

requirements

the

Securities

Exchange

Act

1934,

the

registrant

has

duly

caused

this

report

signed

its

behalf by the undersigned thereunto duly authorized.

GENERAL MILLS, INC.

(Registrant)

Date: December 20, 2022

/s/ Mark A. Pallot

Mark A. Pallot

Vice President, Chief Accounting

Officer

(Principal Accounting Officer and Duly Authorized

Officer)