CONSOLIDATED BALANCE SHEETS GENERAL MILLS, INC. AND SUBSIDIARIES In Millions, Except Par Value May 29, 2016 May 28, 2017 ASSETS Current assets: Cash and cash equivalents $ 763.7 1,360.8 $ 766.1 Receivables 1,430.1 Inventories 1,483.6 1,413.7 Prepaid expenses and other current assets 381.6 399.0 Total current assets 4,061.4 3,937.2 Land, buildings, and equipment 3,687.7 3,743.6 8,741.2 Goodwill 8,747.2 Other intangible assets 4,530.4 4,538.6 Other assets 785.9 751.7 Total assets $ 21,812.6 $ 21,712.3 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 2,119.8 2,046.5 Current portion of long-term debt Notes payable 604.7 1,103.4 1,234.1 269.8 Other current liabilities 1,372.2 1,595.0 5,014.7 Total current liabilities 5,330.8 Long-term debt 7,642.9 7,057.7 Deferred income taxes 1,719.4 1,399.6 Other liabilities 1,523.1 2,087.6 Total liabilities 16,216.2 15,559.6 Redeemable interest 910.9 845.6 Stockholders' equity: Common stock, 754.6 shares issued, $0.10 par value Additional paid-in capital Retained earnings 75.5 75.5 1,120.9 1,177.0 13,138.9 12,616.5 (7,762.9) (2,244.5) (6,326.6) (2,612.2) Common stock in treasury, at cost, shares of 177.7 and 157.8 Accumulated other comprehensive loss Total stockholders' equity 4,327.9 4,930.2 Noncontrolling interests Total equity Total liabilities and equity 357.6 376.9 5,307.1 4,685.5 $ 21,712.3 $21,812.6 See accompanying notes to consolidated financial statements. Fiscal Year 2015 (a) In Millions, Except Per Share Data, Percentages and Ratios 2017 2016 2014 2013 CONSOLIDATED STATEMENTS OF EARNINGS Operating data: $ 17,630.3 $ 17,774.1 $15,619.8 $ 16,563.1 17,909.6 Net sales Gross margin b) Selling, general, and administrative expenses Operating profit Total segment operating profit (e Divestitures loss (gain) Net earnings attributable to General Mills Advertising and media expense Research and development expense 5,563.8 5,829.5 5,949.2 6,369.8 6,423.9 3,328.0 2,801.3 3,118.9 3,474.3 3,552.3 GENERAL MILLS, INC. AND SUBSIDIARIES 2,566.4 2,707.4 2,077.3 2,957.4 2,851.8 2,952.6 2,999.5 3,035.0 3,153.9 3,222.9 (148.2) (65.5) 13.5 Fiscal Year 1,657.5 1,697.4 1,221.3 1,824.4 1,855.2 In Millions, Except per Share Data 2017 2016 2015 754.4 623.8 823.1 869.5 895.0 $ 17,630.3 Net sales $ 15,619.8 $ 16,563.1 243.6 218.2 222.1 229.4 237.9 Cost of sales 10,056.0 10,733.6 11,681.1 Average shares outstanding: Selling, general, and administrative expenses Divestitures loss (gain) Restructuring, impairment, and other exit costs Operating profit 3,118.9 3,328.0 2,801.3 Diluted 598.0 611.9 618.8 645.7 665.6 (148.2) 13.5 Earnings per share: 182.6 151.4 543.9 $ $ Diluted 2.77 2.77 1.97 2.83 2.79 2,566.4 2,707.4 2,077.3 Diluted, excluding certain items affecting comparability $ Operating ratios: Gross margin as a percentage of net sales $ 3.08 2.92 $ 2.86 $ 2.82 2.72 $ Interest, net 295.1 303.8 315.4 Earnings before income taxes and after-tax earnings from joint ventures 2,271.3 2,403.6 1,761.9 35.6% 33.7% 35.2% 35.6% 36.1% 655.2 586.8 Income taxes 755.2 Selling, general, and administrative expenses as a After-tax earnings from joint ventures Net earnings, including earnings attributable to redeemable and noncontrolling interests Net earnings attributable to redeemable and noncontrolling interests 85.0 88.4 84.3 percentage of net sales Operating profit as a percentage of net sales Adjusted operating profit 19.4% 17.9% 18.8% 18.9% 20.0% 1,701.1 1,736.8 1,259.4 16.3% 11.8% 16.4% 16.5% 16.0% 43.6 39.4 38.1 $ 1,697.4 $ 1,657.5 Net earnings attribut able to General Mills 1,221.3 as a percentage of net sales (b) (c) Total segment operating profit 18.1% 16.8% 15.9% 16.2% 16.3% Earnings per share basic Earnings per share diluted Dividends per share $ 2.82 2.83 2.02 $ 2.77 2.77 1.97 $ as a percentage of net sales Effective income tax rate 18.9% 18.1% 17.2% 17.6% 18.1% $ 1.92 1.78 1.67 $ $ 28.8% 31.4% 33.3% 33.3% 29.2% See accompanying notes to consolidated financial statements. Return on average total capital 12.7% 12.9% 9.1% 12.5% 13.4% Adjusted return on average total capital b)e) 11.6% 11.3% 11.2% 11.6% 12.0% Balance sheet data: $ 3,687.7 Land, buildings, and equipment Total assets $3,743.6 $ 3,941.9 3,878.1 3,783.3 21,812.6 23,044.7 21,712.3 21,832.0 22,505.7 6,396.6 Long-term debt, excluding current portion 7,642.9 7,057.7 7,575.3 5,901.8 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Total debt (b) 9,481.7 8,430.9 9,191.5 8,758.9 7,944.8 Cash flow data: $ 2,313.3 $ 2,542.8 712.4 $ 2,926.0 613.9 $ 2,629.8 $ 2,541.0 Net cash provided by operating activities Capital expenditures Free cash flow (b) (e) GENERAL MILLS, INC. AND SUBSIDIARIES 729.3 684.4 663.5 1,628.9 1,900.5 1,830.4 1,877.5 2,312.1 Fixed charge coverage ratio () Operating cash flow to debt ratio (b) 7.26 7.40 5.54 8.04 7.62 Fiscal Year 24.4% 31.2% 27.7% 29.0% 36.8% 2016 In Millions 2017 2015 Share data: $ 1,701.1 $ 1,259.4 1,736.8 Net earnings, including earnings attributable to redeemable and noncontrolling interests Other comprehensive income (loss), net of tax: Foreign currency translation Net actuarial income (loss) Low stock price $ $ 55.91 54.12 48.86 46.86 37.55 High stock price Closing stock price 72.64 65.36 57.14 54.40 50.93 (957.9) (358.4) (108.7) (325.9) 6.3 57.32 62.87 56.15 53.81 48.98 197.9 Cash dividends per common share 1.92 1.78 1.67 1.55 1.32 Other fair value changes: Number of full- and part-time employees 38,000 39,000 42,000 43,000 41,000 Securities 0.8 0.1 0.8 Hedge derivatives Reclassification to earnings: Hedge derivatives 53.3 16.0 4.1 (25.7) (9.5) 4.9 Amortization of losses and prior service costs Other comprehensive income (loss), net of tax Total comprehensive income Comprehensive income (loss) attributable to redeemable 122.5 128.6 105.1 (299.4) (1,201.4) 355.1 2,056.2 1,437.4 58.0 (192.9) and noncontrolling interests Comprehensive income attributable to General Mills 31.0 41.5 $ 2,025.2 1,395.9 250.9 See accompanying notes to consolidated financial statements.

CONSOLIDATED BALANCE SHEETS GENERAL MILLS, INC. AND SUBSIDIARIES In Millions, Except Par Value May 29, 2016 May 28, 2017 ASSETS Current assets: Cash and cash equivalents $ 763.7 1,360.8 $ 766.1 Receivables 1,430.1 Inventories 1,483.6 1,413.7 Prepaid expenses and other current assets 381.6 399.0 Total current assets 4,061.4 3,937.2 Land, buildings, and equipment 3,687.7 3,743.6 8,741.2 Goodwill 8,747.2 Other intangible assets 4,530.4 4,538.6 Other assets 785.9 751.7 Total assets $ 21,812.6 $ 21,712.3 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 2,119.8 2,046.5 Current portion of long-term debt Notes payable 604.7 1,103.4 1,234.1 269.8 Other current liabilities 1,372.2 1,595.0 5,014.7 Total current liabilities 5,330.8 Long-term debt 7,642.9 7,057.7 Deferred income taxes 1,719.4 1,399.6 Other liabilities 1,523.1 2,087.6 Total liabilities 16,216.2 15,559.6 Redeemable interest 910.9 845.6 Stockholders' equity: Common stock, 754.6 shares issued, $0.10 par value Additional paid-in capital Retained earnings 75.5 75.5 1,120.9 1,177.0 13,138.9 12,616.5 (7,762.9) (2,244.5) (6,326.6) (2,612.2) Common stock in treasury, at cost, shares of 177.7 and 157.8 Accumulated other comprehensive loss Total stockholders' equity 4,327.9 4,930.2 Noncontrolling interests Total equity Total liabilities and equity 357.6 376.9 5,307.1 4,685.5 $ 21,712.3 $21,812.6 See accompanying notes to consolidated financial statements. Fiscal Year 2015 (a) In Millions, Except Per Share Data, Percentages and Ratios 2017 2016 2014 2013 CONSOLIDATED STATEMENTS OF EARNINGS Operating data: $ 17,630.3 $ 17,774.1 $15,619.8 $ 16,563.1 17,909.6 Net sales Gross margin b) Selling, general, and administrative expenses Operating profit Total segment operating profit (e Divestitures loss (gain) Net earnings attributable to General Mills Advertising and media expense Research and development expense 5,563.8 5,829.5 5,949.2 6,369.8 6,423.9 3,328.0 2,801.3 3,118.9 3,474.3 3,552.3 GENERAL MILLS, INC. AND SUBSIDIARIES 2,566.4 2,707.4 2,077.3 2,957.4 2,851.8 2,952.6 2,999.5 3,035.0 3,153.9 3,222.9 (148.2) (65.5) 13.5 Fiscal Year 1,657.5 1,697.4 1,221.3 1,824.4 1,855.2 In Millions, Except per Share Data 2017 2016 2015 754.4 623.8 823.1 869.5 895.0 $ 17,630.3 Net sales $ 15,619.8 $ 16,563.1 243.6 218.2 222.1 229.4 237.9 Cost of sales 10,056.0 10,733.6 11,681.1 Average shares outstanding: Selling, general, and administrative expenses Divestitures loss (gain) Restructuring, impairment, and other exit costs Operating profit 3,118.9 3,328.0 2,801.3 Diluted 598.0 611.9 618.8 645.7 665.6 (148.2) 13.5 Earnings per share: 182.6 151.4 543.9 $ $ Diluted 2.77 2.77 1.97 2.83 2.79 2,566.4 2,707.4 2,077.3 Diluted, excluding certain items affecting comparability $ Operating ratios: Gross margin as a percentage of net sales $ 3.08 2.92 $ 2.86 $ 2.82 2.72 $ Interest, net 295.1 303.8 315.4 Earnings before income taxes and after-tax earnings from joint ventures 2,271.3 2,403.6 1,761.9 35.6% 33.7% 35.2% 35.6% 36.1% 655.2 586.8 Income taxes 755.2 Selling, general, and administrative expenses as a After-tax earnings from joint ventures Net earnings, including earnings attributable to redeemable and noncontrolling interests Net earnings attributable to redeemable and noncontrolling interests 85.0 88.4 84.3 percentage of net sales Operating profit as a percentage of net sales Adjusted operating profit 19.4% 17.9% 18.8% 18.9% 20.0% 1,701.1 1,736.8 1,259.4 16.3% 11.8% 16.4% 16.5% 16.0% 43.6 39.4 38.1 $ 1,697.4 $ 1,657.5 Net earnings attribut able to General Mills 1,221.3 as a percentage of net sales (b) (c) Total segment operating profit 18.1% 16.8% 15.9% 16.2% 16.3% Earnings per share basic Earnings per share diluted Dividends per share $ 2.82 2.83 2.02 $ 2.77 2.77 1.97 $ as a percentage of net sales Effective income tax rate 18.9% 18.1% 17.2% 17.6% 18.1% $ 1.92 1.78 1.67 $ $ 28.8% 31.4% 33.3% 33.3% 29.2% See accompanying notes to consolidated financial statements. Return on average total capital 12.7% 12.9% 9.1% 12.5% 13.4% Adjusted return on average total capital b)e) 11.6% 11.3% 11.2% 11.6% 12.0% Balance sheet data: $ 3,687.7 Land, buildings, and equipment Total assets $3,743.6 $ 3,941.9 3,878.1 3,783.3 21,812.6 23,044.7 21,712.3 21,832.0 22,505.7 6,396.6 Long-term debt, excluding current portion 7,642.9 7,057.7 7,575.3 5,901.8 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Total debt (b) 9,481.7 8,430.9 9,191.5 8,758.9 7,944.8 Cash flow data: $ 2,313.3 $ 2,542.8 712.4 $ 2,926.0 613.9 $ 2,629.8 $ 2,541.0 Net cash provided by operating activities Capital expenditures Free cash flow (b) (e) GENERAL MILLS, INC. AND SUBSIDIARIES 729.3 684.4 663.5 1,628.9 1,900.5 1,830.4 1,877.5 2,312.1 Fixed charge coverage ratio () Operating cash flow to debt ratio (b) 7.26 7.40 5.54 8.04 7.62 Fiscal Year 24.4% 31.2% 27.7% 29.0% 36.8% 2016 In Millions 2017 2015 Share data: $ 1,701.1 $ 1,259.4 1,736.8 Net earnings, including earnings attributable to redeemable and noncontrolling interests Other comprehensive income (loss), net of tax: Foreign currency translation Net actuarial income (loss) Low stock price $ $ 55.91 54.12 48.86 46.86 37.55 High stock price Closing stock price 72.64 65.36 57.14 54.40 50.93 (957.9) (358.4) (108.7) (325.9) 6.3 57.32 62.87 56.15 53.81 48.98 197.9 Cash dividends per common share 1.92 1.78 1.67 1.55 1.32 Other fair value changes: Number of full- and part-time employees 38,000 39,000 42,000 43,000 41,000 Securities 0.8 0.1 0.8 Hedge derivatives Reclassification to earnings: Hedge derivatives 53.3 16.0 4.1 (25.7) (9.5) 4.9 Amortization of losses and prior service costs Other comprehensive income (loss), net of tax Total comprehensive income Comprehensive income (loss) attributable to redeemable 122.5 128.6 105.1 (299.4) (1,201.4) 355.1 2,056.2 1,437.4 58.0 (192.9) and noncontrolling interests Comprehensive income attributable to General Mills 31.0 41.5 $ 2,025.2 1,395.9 250.9 See accompanying notes to consolidated financial statements.

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter13: Financial Statement Analysis

Section: Chapter Questions

Problem 13.10E

See similar textbooks

	Fiscal 2017	Fiscal 2016
Gross margin, as reported	35.6%	35.2%
Mark-to-market effects	(0.1)	(0.4)
Restructuring costs	0.3	0.5
Project-related costs	0.3	0.3
Adjusted gross margin	36.1%	35.6%