# UNITED	STATES

# SECURITIES	AND	EXCHANGE	COMMISSION

R ANNUAL	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934	FOR	THE	FISCAL	YEAR	ENDED	May 31,	2020

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

# GENERAL	MILLS,	INC.

(Exact	name	of	registrant	as	specified	in	its	charter)

Delaware

(State	or	other	jurisdiction	of incorporation	or	organization)

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

(I.R.S.	Employer Identification	No.)

(Registrant's	telephone	number,	including	area	code)

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

|  |  | Name	of	each	exchange |
| :--- | :--- | :--- |
| Title\tof\teach\tclass | Trading\tSymbol(s) | on\twhich\tregistered |
| Common\tStock,\t$.10\tpar\tvalue | GIS | New\tYork\tStock\tExchange |
| 2.100%\tNotes\tdue\t2020 | GIS20 | New\tYork\tStock\tExchange |
| 1.000%\tNotes\tdue\t2023 | GIS23A | New\tYork\tStock\tExchange |
| 0.450%\tNotes\tdue\t2026 | GIS26 | New\tYork\tStock\tExchange |
| 1.500%\tNotes\tdue\t2027 | GIS27 | New\tYork\tStock\tExchange |

# Securities	registered	pursuant	to	Section	12(g)	of	the	Act:	None

Indicate	by	check	mark	if	the	registrant	is	a	well-known	seasoned	issuer,	as	defined	in	Rule	405	of	the	Securities	Act.	Yes	RNo	£

Indicate	by	check	mark	if	the	registrant	is	not	required	to	file	reports	pursuant	to	Section	13	or	Section	15(d)	of	the	Act.	Yes	£No	R

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

# Yes	RNo	£

Indicate	by	check	mark	whether	the	registrant	has	submitted	electronically	every	Interactive	Data	File	required	to	be	submitted	pursuant	to	Rule	405	of	Regulation	S-T during	the	preceding	12	months	(or	for	such	shorter	period	that	the	registrant	was	required	to	submit	such	files).	Yes	RNo	£

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

Large	accelerated	filer	R Accelerated	filer	£ Non-accelerated	filer	£

Smaller	reporting	company	£

# Emerging	growth	company	£

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

Indicate	by	check	mark	whether	the	registrant	has	filed	a	report	on	and	attestation	to	its	management's	assessment	of	the	effectiveness	of	its	internal	control	over financial	reporting	under	Section	404(b)	of	the	Sarbanes-Oxley	Act	(15	U.S.C.	7262(b))	by	the	registered	public	accounting	firm	that	prepared	or	issued	its	audit	report.

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

Yes	£No	R

Aggregate	market	value	of	Common	Stock	held	by	non-affiliates	of	the	registrant,	based	on	the	closing	price	of	$52.69	per	share	as	reported	on	the	New	York	Stock Exchange	on	November	24,	2019	(the	last	business	day	of	the	registrant's	most	recently	completed	second	fiscal	quarter):	$31,856.1	million.

# DOCUMENTS	INCORPORATED	BY	REFERENCE

Portions	of	the	registrant's	Proxy	Statement	for	its	2020	Annual	Meeting	of	Shareholders	are	incorporated	by	reference	into	Part	III.

# Table	of	Contents

| Item	1 | Business | 4 |
| :--- | :--- | :--- |
| Item\t1A | Risk\tFactors | 8 |
| Item\t1B | Unresolved\tStaff\tComments | 14 |
| Item\t2 | Properties | 14 |
| Item\t3 | Legal\tProceedings | 15 |
| Item\t4 | Mine\tSafety\tDisclosures | 15 |
| Part\tII |  |  |
| Item\t5 | Market\tfor\tRegistrant's\tCommon\tEquity,\tRelated\tStockholder\tMatters\tand\tIssuer\tPurchases\tof | 16 |
|  | Equity\tSecurities |  |
| Item\t6 | Selected\tFinancial\tData | 17 |
| Item\t7 | Management's\tDiscussion\tand\tAnalysis\tof\tFinancial\tCondition\tand\tResults\tof\tOperations | 18 |
| Item\t7A | Quantitative\tand\tQualitative\tDisclosures\tAbout\tMarket\tRisk | 43 |
| Item\t8 | Financial\tStatements\tand\tSupplementary\tData | 45 |
| Item\t9 | Changes\tin\tand\tDisagreements\tWith\tAccountants\ton\tAccounting\tand\tFinancial\tDisclosure | 97 |
| Item\t9A | Controls\tand\tProcedures | 97 |
| Item\t9B | Other\tInformation | 98 |
| Part\tIII |  |  |
| Item\t10 | Directors,\tExecutive\tOfficers\tand\tCorporate\tGovernance | 98 |
| Item\t11 | Executive\tCompensation | 98 |
| Item\t12 | Security\tOwnership\tof\tCertain\tBeneficial\tOwners\tand\tManagement\tand\tRelated\tStockholder\tMatters | 98 |
| Item\t13 | Certain\tRelationships\tand\tRelated\tTransactions,\tand\tDirector\tIndependence | 99 |
| Item\t14 | Principal\tAccounting\tFees\tand\tServices | 99 |
| Part\tIV |  |  |
| Item\t15 | Exhibits\tand\tFinancial\tStatement\tSchedules | 99 |
| Item\t16 | Form\t10-K\tSummary | 102 |

# PART	I

# ITEM	1	-	Business

General	Mills,	Inc.	was	incorporated	in	Delaware	in	1928.	The	terms	"General	Mills,"	"Company,"	"registrant,"	"we,"	"us,"	and	"our"	mean	General	Mills,	Inc.	and	all subsidiaries	included	in	the	Consolidated	Financial	Statements	in	Item	8	of	this	report	unless	the	context	indicates	otherwise.

Certain	terms	used	throughout	this	report	are	defined	in	a	glossary	in	Item	8	of	this	report.

# COMPANY	OVERVIEW

We	are	a	leading	global	manufacturer	and	marketer	of	branded	consumer	foods	sold	through	retail	stores.	We	also	are	a	leading	supplier	of	branded	and	unbranded	food products	to	the	North	American	foodservice	and	commercial	baking	industries.	We	are	also	a	leading	manufacturer	and	marketer	in	the	wholesome	natural	pet	food category.	We	manufacture	our	products	in	13	countries	and	market	them	in	more	than	100	countries.	In	addition	to	our	consolidated	operations,	we	have	50	percent interests	in	two	strategic	joint	ventures	that	manufacture	and	market	food	products	sold	in	more	than	130	countries	worldwide.

The	results	of	our	Pet	operating	segment	include	13	months	of	results	in	fiscal	2020	as	we	changed	the	Pet	operating	segment's	reporting	period	from	an	April	fiscal year	end	to	a	May	fiscal	year	end	to	match	our	fiscal	calendar.	Fiscal	2019	included	12	months	of	results,	and	fiscal	2018	did	not	include	results	for	the	Pet	operating segment.

We	manage	and	review	the	financial	results	of	our	business	under	five	operating	segments:	North	America	Retail;	Convenience	Stores	&	Foodservice;	Europe	& Australia;	Asia	&	Latin	America;	and	Pet.	See	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	(MD&A)	in	Item	7	of	this report	for	a	description	of	our	segments.

We	offer	a	variety	of	food	products	that	provide	great	taste,	nutrition,	convenience,	and	value	for	consumers	around	the	world.	Our	business	is	focused	on	the	following large,	global	categories:

 snacks,	including	grain,	fruit	and	savory	snacks,	nutrition	bars,	and	frozen	hot	snacks;

 ready-to-eat	cereal;

 convenient	meals,	including	meal	kits,	ethnic	meals,	pizza,	soup,	side	dish	mixes,	frozen	breakfast,	and	frozen	entrees;

 yogurt;

 wholesome	natural	pet	food;

 super-premium	ice	cream;

 baking	mixes	and	ingredients;	and

 refrigerated	and	frozen	dough.

Our	Cereal	Partners	Worldwide	(CPW)	joint	venture	with	Nestlé	S.A.	(Nestlé)	competes	in	the	ready-to-eat	cereal	category	in	markets	outside	North	America,	and	our Häagen-Dazs	Japan,	Inc.	(HDJ)	joint	venture	competes	in	the	super-premium	ice	cream	category	in	Japan.	For	net	sales	contributed	by	each	class	of	similar	products, please	see	Note	17	to	the	Consolidated	Financial	Statements	in	Item	8	of	this	report.

# Customers

Our	 primary	 customers	 are	 grocery	 stores,	 mass	 merchandisers,	 membership	 stores,	 natural	 food	 chains,	 drug,	 dollar	 and	 discount	 chains,	 e-commerce	 retailers, commercial	and	noncommercial	foodservice	distributors	and	operators,	restaurants,	convenience	stores,	and	pet	specialty	stores.	We	generally	sell	to	these	customers through	our	direct	sales	force.	We	use	broker	and	distribution	arrangements	for	certain	products	and	to	serve	certain	types	of	customers.	For	further	information	on	our customer	credit	and	product	return	practices,	please	refer	to	Note	2	to	the	Consolidated	Financial	Statements	in	Item	8	of	this	report.	During	fiscal	2020,	Walmart	Inc. and	its	affiliates	(Walmart)	accounted	for	21	percent	of	our	consolidated	net	sales	and	30	percent	of	net	sales	of	our	North	America	Retail	segment.	No	other	customer accounted	for	10	percent	or	more	of	our	consolidated	net	sales.	For	further	information	on	significant	customers,	please	refer	to	Note	8	to	the	Consolidated	Financial Statements	in	Item	8	of	this	report.

# Competition

The	packaged	and	pet	food	categories	are	highly	competitive,	with	numerous	manufacturers	of	varying	sizes	in	the	United	States	and	throughout	the	world.	The categories	in	which	we	participate	also	are	very	competitive.	Our	principal	competitors	in	these	categories	are	manufacturers,	as	well	as	retailers	with	their	own	branded products.	Competitors	market	and	sell	their	products	through	brick-and-mortar	stores	and	e-commerce.	All	of	our	principal	competitors	have	substantial	financial, marketing,	and	other	resources.	Competition	in	our	product	categories	is	based	on	product	innovation,	product	quality,	price,	brand	recognition	and	loyalty,	effectiveness of	marketing,	promotional	activity,	convenient	ordering	and	delivery	to	the	consumer,	and	the	ability	to	identify	and	satisfy	consumer	preferences.	Our	principal strategies	for	competing	in	each	of	our	segments	include	unique	consumer	insights, 4

effective	customer	relationships,	superior	product	quality,	innovative	advertising,	product	promotion,	product	innovation	aligned	with	consumers'	needs,	an	efficient supply	chain,	and	price.	In	most	product	categories,	we	compete	not	only	with	other	widely	advertised,	branded	products,	but	also	with	regional	brands	and	with	generic and	private	label	products	that	are	generally	sold	at	lower	prices.	Internationally,	we	compete	with	both	multi-national	and	local	manufacturers,	and	each	country includes	a	unique	group	of	competitors.

# Raw	materials,	ingredients,	and	packaging

The	principal	raw	materials	that	we	use	are	grains	(wheat,	oats,	and	corn),	dairy	products,	sugar,	fruits,	vegetable	oils,	meats,	nuts,	vegetables,	and	other	agricultural products.	We	also	use	substantial	quantities	of	carton	board,	corrugated,	plastic	and	metal	packaging	materials,	operating	supplies,	and	energy.	Most	of	these	inputs	for our	domestic	and	Canadian	operations	are	purchased	from	suppliers	in	the	United	States.	In	our	other	international	operations,	inputs	that	are	not	locally	available	in adequate	supply	may	be	imported	from	other	countries.	The	cost	of	these	inputs	may	fluctuate	widely	due	to	external	conditions	such	as	weather,	climate	change, product	scarcity,	limited	sources	of	supply,	commodity	market	fluctuations,	currency	fluctuations,	trade	tariffs,	pandemics	(including	the	COVID-19	pandemic),	and changes	in	governmental	agricultural	and	energy	policies	and	regulations.	We	have	some	long-term	fixed	price	contracts,	but	the	majority	of	our	inputs	are	purchased	on the	open	market.	We	believe	that	we	will	be	able	to	obtain	an	adequate	supply	of	needed	inputs.	Occasionally	and	where	possible,	we	make	advance	purchases	of	items significant	to	our	business	in	order	to	ensure	continuity	of	operations.	Our	objective	is	to	procure	materials	meeting	both	our	quality	standards	and	our	production	needs at	price	levels	that	allow	a	targeted	profit	margin.	Since	these	inputs	generally	represent	the	largest	variable	cost	in	manufacturing	our	products,	to	the	extent	possible,	we often	manage	the	risk	associated	with	adverse	price	movements	for	some	inputs	using	a	variety	of	risk	management	strategies.	We	also	have	a	grain	merchandising operation	that	provides	us	efficient	access	to,	and	more	informed	knowledge	of,	various	commodity	markets,	principally	wheat	and	oats.	This	operation	holds	physical inventories	that	are	carried	at	net	realizable	value	and	uses	derivatives	to	manage	its	net	inventory	position	and	minimize	its	market	exposures.

# RESEARCH	AND	DEVELOPMENT

Our	research	and	development	resources	are	focused	on	new	product	development,	product	improvement,	process	design	and	improvement,	packaging,	and	exploratory research	in	new	business	and	technology	areas.	Research	and	development	expenditures	were	$224	million	in	fiscal	2020	and	$222	million	in	fiscal	2019.

# TRADEMARKS	AND	PATENTS

Our	products	are	marketed	under	a	variety	of	valuable	trademarks.	Some	of	the	more	important	trademarks	used	in	our	global	operations	(set	forth	in	italics	in	this report)	include	Annie's,	Betty	Crocker,	Bisquick,	Blue	Buffalo,	Blue	Basics,	Blue	Freedom,	Blue	Wilderness,	Bugles,	Cascadian	Farm,	Cheerios,	Chex,	Cinnamon	Toast Crunch,	Cocoa	Puffs,	Cookie	Crisp,	EPIC,	Fiber	One,	Food	Should	Taste	Good,	Fruit	by	the	Foot,	Fruit	Gushers,	Fruit	Roll-Ups,	Gardetto's,	Go-Gurt,	Gold	Medal, Golden	Grahams,	Häagen-Dazs,	Helpers,	Jus-Rol,	Kitano,	Kix,	Lärabar,	Latina,	Liberté,	Lucky	Charms,	Muir	Glen,	Nature	Valley,	Oatmeal	Crisp,	Old	El	Paso,	Oui, Pillsbury,	Progresso,	Raisin	Nut	Bran,	Total,	Totino's,	Trix,	Wanchai	Ferry,	Wheaties,	Yoki,	and	Yoplait.	We	protect	these	marks	as	appropriate	through	registrations	in the	United	States	and	other	jurisdictions.	Depending	on	the	jurisdiction,	trademarks	are	generally	valid	as	long	as	they	are	in	use	or	their	registrations	are	properly maintained	and	they	have	not	been	found	to	have	become	generic.	Registrations	of	trademarks	can	also	generally	be	renewed	indefinitely	for	as	long	as	the	trademarks are	in	use.

Some	of	our	products	are	marketed	under	or	in	combination	with	trademarks	that	have	been	licensed	from	others	for	both	long-standing	products	(e.g.,	Reese's	Puffs	for cereal,	Green	Giant	for	vegetables	in	certain	countries,	and	Cinnabon	for	refrigerated	dough,	frozen	pastries,	and	baking	products)	and	shorter	term	promotional	products (e.g.,	fruit	snacks	sold	under	various	third	party	equities).

Our	cereal	trademarks	are	licensed	to	CPW	and	may	be	used	in	association	with	the	Nestlé	trademark.	Nestlé	licenses	certain	of	its	trademarks	to	CPW,	including	the Nestlé	and	Uncle	Toby's	trademarks.	The	Häagen-Dazs	trademark	is	licensed	royalty-free	and	exclusively	to	Nestlé	for	ice	cream	and	other	frozen	dessert	products	in	the United	States	and	Canada.	The	Häagen-Dazs	trademark	is	also	licensed	to	HDJ.	The	Pillsbury	brand	and	the	Pillsbury	Doughboy	character	are	subject	to	an	exclusive, royalty-free	license	that	was	granted	to	a	third	party	and	its	successors	in	the	dessert	mix	and	baking	mix	categories	in	the	United	States	and	under	limited	circumstances in	Canada	and	Mexico.

The	Yoplait	trademark	and	other	related	trademarks	are	owned	by	Yoplait	Marques	SNC,	an	entity	in	which	we	own	a	50	percent	interest.	These	marks	are	licensed exclusively	to	Yoplait	SAS,	an	entity	in	which	we	own	a	51	percent	interest.	Yoplait	SAS	licenses	these	trademarks	to	its	franchisees.	The	 Liberté	trademark	and	other related	trademarks	are	owned	by	Liberté	Marques	Sàrl,	an	entity	in	which	we	own	a	50	percent	interest.

We	continue	our	focus	on	developing	and	marketing	innovative,	proprietary	products,	many	of	which	use	proprietary	expertise,	recipes	and	formulations.	We	consider the	collective	rights	under	our	various	patents,	which	expire	from	time	to	time,	a	valuable	asset,	but	we	do	not	believe	that	our	businesses	are	materially	dependent	upon any	single	patent	or	group	of	related	patents.

# SEASONALITY

In	general,	demand	for	our	products	is	evenly	balanced	throughout	the	year.	However,	within	our	North	America	Retail	segment	demand	for	refrigerated	dough,	frozen baked	goods,	and	baking	products	is	stronger	in	the	fourth	calendar	quarter.	Demand	for	Progresso	soup	is	higher	during	the	fall	and	winter	months.	Internationally, within	our	Europe	&	Australia	and	Asia	&	Latin	America	segments,	demand	for	Häagen-Dazs	ice	cream	is	higher	during	the	summer	months	and	demand	for	baking mix	and	dough	products	increases	during	winter	months.	Due	to	the	offsetting	impact	of	these	demand	trends,	as	well	as	the	different	seasons	in	the	northern	and southern	hemispheres,	our	international	segments'	net	sales	are	generally	evenly	balanced	throughout	the	year.

# BACKLOG

Orders	are	generally	filled	within	a	few	days	of	receipt	and	are	subject	to	cancellation	at	any	time	prior	to	shipment.	In	the	fourth	quarter	of	fiscal	2020,	we	experienced increased	 demand	 in	 our	 retail	 businesses	 as	 the	 COVID-19	 pandemic	 and	 related	 governmental	 restrictions	 resulted	 in	 a	 significant	 increase	 in	 at-home	 food consumption.	We	have	taken	steps	to	increase	our	production	capacity	to	meet	the	increased	demand	for	our	retail	products,	including	increasing	production	time	at	our manufacturing	facilities	and	prioritizing	certain	product	lines	to	increase	manufacturing	efficiency.	Notwithstanding	these	efforts,	we	have	been,	and	continue	to	be, unable	to	fulfill	all	orders	we	receive	from	our	customers.

# WORKING	CAPITAL

A	description	of	our	working	capital	is	included	in	the	Liquidity	section	of	MD&A	in	Item	7	of	this	report.	Our	product	return	practices	are	described	in	Note	2	to	the Consolidated	Financial	Statements	in	Item	8	of	this	report.

# EMPLOYEES

# QUALITY	AND	SAFETY	REGULATION

The	manufacture	and	sale	of	consumer	and	pet	food	products	is	highly	regulated.	In	the	United	States,	our	activities	are	subject	to	regulation	by	various	federal government	 agencies,	 including	 the	 Food	 and	 Drug	 Administration,	 Department	 of	 Agriculture,	 Federal	 Trade	 Commission,	 Department	 of	 Commerce,	 and Environmental	Protection	Agency,	as	well	as	various	state	and	local	agencies.	Our	business	is	also	regulated	by	similar	agencies	outside	of	the	United	States.

# ENVIRONMENTAL	MATTERS

As	of	May	31,	2020,	we	were	involved	with	two	response	actions	associated	with	the	alleged	or	threatened	release	of	hazardous	substances	or	wastes	located	in Minneapolis,	Minnesota	and	Moonachie,	New	Jersey.

Our	operations	are	subject	to	the	Clean	Air	Act,	Clean	Water	Act,	Resource	Conservation	and	Recovery	Act,	Comprehensive	Environmental	Response,	Compensation, and	Liability	Act,	and	the	Federal	Insecticide,	Fungicide,	and	Rodenticide	Act,	and	all	similar	state,	local,	and	foreign	environmental	laws	and	regulations	applicable	to the	jurisdictions	in	which	we	operate.

Based	on	current	facts	and	circumstances,	we	believe	that	neither	the	results	of	our	environmental	proceedings	nor	our	compliance	in	general	with	environmental	laws	or regulations	will	have	a	material	adverse	effect	upon	our	capital	expenditures,	earnings,	or	competitive	position.

# INFORMATION	ABOUT	OUR	EXECUTIVE	OFFICERS

The	section	below	provides	information	regarding	our	executive	officers	as	of	July	2,	2020:

Richard	C.	Allendorf,	age	59,	is	General	Counsel	and	Secretary.	Mr.	Allendorf	joined	General	Mills	in	2001	from	The	Pillsbury	Company.	He	was	promoted	to	Vice President,	Deputy	General	Counsel	in	2010,	first	overseeing	the	legal	affairs	of	the	U.S.	Retail	segment	and	Consumer	Food	Sales	and	then,	in	2012,	overseeing	the legal	affairs	of	the	International	segment	and	Global	Ethics	and	Compliance.	He	was	named	to	his	present	position	in	February	2015.	Prior	to	joining	General	Mills,	he practiced	law	with	the	Shearman	and	Sterling	and	Mackall,	Crounse	and	Moore	law	firms.	He	was	in	finance	with	General	Electric	prior	to	his	legal	career.

Jodi	Benson,	age	55,	is	Chief	Innovation,	Technology	and	Quality	Officer.	Ms.	Benson	joined	General	Mills	in	2001	from	The	Pillsbury	Company.	She	held	a	variety	of positions	before	becoming	the	leader	of	our	One	Global	Dairy	Platform	from	2011	to	March	2016.	She	was	named	Vice	President	for	our	International	business segment	from	April	2016	to	March	2017,	and	Vice	President	of 6

the	Global	Innovation,	Technology,	and	Quality	Capabilities	Group	from	April	2017	to	July	2018.	She	was	named	to	her	current	position	in	August	2018.

Kofi	A.	Bruce,	age	50,	is	Chief	Financial	Officer.	Mr.	Bruce	joined	General	Mills	in	2009	as	Vice	President,	Treasurer	after	serving	in	a	variety	of	senior	management positions	with	Ecolab	and	Ford	Motor	Company.	He	served	as	Treasurer	until	2010	when	he	was	named	Vice	President,	Finance	for	Yoplait.	Mr.	Bruce	reassumed	his role	as	Vice	President,	Treasurer	from	2012	until	2014	when	he	was	named	Vice	President,	Finance	for	Convenience	Stores	&	Foodservice.	He	was	named	Vice President,	Controller	in	August	2017,	Vice	President,	Financial	Operations	in	September	2019,	and	to	his	present	position	in	February	2020.

John	R.	Church,	age	54,	is	Chief	Supply	Chain	and	Global	Business	Solutions	Officer.	Mr.	Church	joined	General	Mills	in	1988	as	a	Product	Developer	in	the	Big	G cereals	division	and	held	various	positions	before	becoming	Vice	President,	Engineering	in	2003.	In	2005,	his	role	was	expanded	to	include	development	of	the Company's	strategy	for	the	global	sourcing	of	raw	materials	and	manufacturing	capabilities.	He	was	named	Vice	President,	Supply	Chain	Operations	in	2007,	Senior Vice	President,	Supply	Chain	in	2008,	Executive	Vice	President,	Supply	Chain	in	2013,	and	to	his	present	position	in	June	2017.

Jeffrey	L.	Harmening,	age	53,	is	Chairman	of	the	Board	and	Chief	Executive	Officer.	Mr.	Harmening	joined	General	Mills	in	1994	and	served	in	various	marketing roles	in	the	Betty	Crocker,	Yoplait,	and	Big	G	cereal	divisions.	He	was	named	Vice	President,	Marketing	for	CPW	in	2003	and	Vice	President	of	the	Big	G	cereal division	in	2007.	In	2011,	he	was	promoted	to	Senior	Vice	President	for	the	Big	G	cereal	division.	Mr.	Harmening	was	appointed	Senior	Vice	President,	Chief	Executive Officer	of	CPW	in	2012.	Mr.	Harmening	returned	from	CPW	in	2014	and	was	named	Executive	Vice	President,	Chief	Operating	Officer,	U.S.	Retail.	He	became President,	Chief	Operating	Officer	in	July	2016.	He	was	named	Chief	Executive	Officer	in	June	2017	and	Chairman	of	the	Board	in	January	2018.	Mr.	Harmening	is	a director	of	The	Toro	Company.

Dana	M.	McNabb,	age	44,	is	Group	President,	Europe	&	Australia.	Ms.	McNabb	joined	General	Mills	in	1999	and	held	a	variety	of	marketing	roles	in	Cereal,	Snacks, Meals,	and	New	Products	before	becoming	Vice	President,	Marketing	for	CPW	in	2011	and	Vice	President,	Marketing	for	the	Circle	of	Champions	Business	Unit	in October	2015.	She	was	promoted	to	President,	U.S.	Cereal	Operating	Unit	in	December	2016	and	named	to	her	present	position	in	January	2020.

Jaime	Montemayor,	age	56,	is	Chief	Digital	and	Technology	Officer.	He	spent	21	years	at	PepsiCo,	Inc.,	serving	in	roles	of	increasing	responsibility,	including	most recently	as	Senior	Vice	President	and	Chief	Information	Officer	of	PepsiCo's	Americas	Foods	segment	from	2013	to	October	2015,	and	Senior	Vice	President	and	Chief Information	Officer,	Digital	Innovation,	Data	and	Analytics,	PepsiCo	from	November	2015	to	July	2016.	Mr.	Montemayor	served	as	Chief	Technology	Officer	of	7- Eleven	Inc.	from	April	2017	until	October	2017.	He	assumed	his	current	role	in	February	2020	after	founding	and	operating	a	digital	technology	consulting	company from	November	2017	until	January	2020.

Jon	J.	Nudi,	age	50,	is	Group	President,	North	America	Retail.	Mr.	Nudi	joined	General	Mills	in	1993	as	a	Sales	Representative	and	held	a	variety	of	roles	in	Consumer Foods	Sales.	In	2005,	he	moved	into	marketing	roles	in	the	Meals	division	and	was	elected	Vice	President	in	2007.	Mr.	Nudi	was	named	Vice	President;	President, Snacks,	in	2010,	Senior	Vice	President,	President,	Europe/Australasia	in	2014,	and	Senior	Vice	President;	President,	U.S.	Retail	in	September	2016.	He	was	named	to his	present	position	in	January	2017.

Shawn	P.	O'Grady,	age	56,	is	Group	President,	Convenience	Stores	&	Foodservice	and	Chief	Revenue	Development	Officer.	Mr.	O'Grady	joined	General	Mills	in	1990 and	held	several	marketing	roles	in	the	Snacks,	Meals,	and	Big	G	cereal	divisions.	He	was	promoted	to	Vice	President	in	1998	and	held	marketing	positions	in	the	Betty Crocker	and	Pillsbury	USA	divisions.	In	2004,	he	moved	into	Consumer	Foods	Sales,	becoming	Vice	President,	President,	U.S.	Retail	Sales	in	2007,	Senior	Vice President,	President,	Consumer	Foods	Sales	Division	in	2010,	and	Senior	Vice	President,	President,	Sales	&	Channel	Development	in	2012.	He	was	named	to	his current	position	in	January	2017.

Mark	A.	Pallot,	age	47,	is	Vice	President,	Chief	Accounting	Officer.	Mr.	Pallot	joined	General	Mills	in	2007	and	served	as	Director,	Financial	Reporting	until	August 2017,	when	he	was	named	Vice	President,	Assistant	Controller.	He	was	elected	to	his	present	position	in	February	2020.	Prior	to	joining	General	Mills,	Mr.	Pallot	held accounting	and	financial	reporting	positions	at	Residential	Capital,	LLC,	Metris,	Inc.,	CIT	Group	Inc.,	and	Ernst	&	Young,	LLP.

Ivan	Pollard,	age	58,	is	Global	Chief	Marketing	Officer.	Mr.	Pollard	assumed	his	current	role	in	July	2017	when	he	joined	General	Mills	from	The	Coca-Cola Company.	At	Coca-Cola,	from	2011	to	2014,	Mr.	Pollard	served	as	Vice	President,	Global	Connections	until	he	was	promoted	to	Senior	Vice	President,	Strategic Marketing,	a	role	he	held	until	June	2017.	Prior	to	joining	The	Coca-Cola	Company,	Mr.	Pollard	was	a	global	partner	at	Naked	Communications,	a	connections	planning company.	His	prior	communications	planning	experience	included	work	at	the	BMP,	DDP	Needham,	and	Wieden+Kennedy	advertising	agencies.

Bethany	Quam,	age	49,	is	Group	President,	Pet.	Ms.	Quam	joined	General	Mills	in	1993	and	held	a	variety	of	positions	before	becoming	Vice	President,	Strategic Planning	in	2007.	She	was	promoted	to	Vice	President,	Field	Sales,	Channels	in	2012,	Vice 7

President;	President,	Convenience	Stores	&	Foodservice	in	2014,	and	Senior	Vice	President;	President,	Europe	&	Australia	in	August	2016,	and	Group	President;

Europe	&	Australia	in	January	2017.	She	was	named	to	her	current	position	in	October	2019.

Sean	Walker,	age	54,	is	Group	President,	Asia	&	Latin	America.	Mr.	Walker	joined	General	Mills	in	1989	and	held	a	variety	of	positions	before	becoming	Vice President,	President	of	Latin	America	in	2009.	He	was	named	Senior	Vice	President,	President	Latin	America	in	2012	and	Senior	Vice	President,	Corporate	Strategy	in September	2016.	He	was	named	to	his	current	position	in	February	2019.

Jacqueline	Williams-Roll,	age	51,	is	Chief	Human	Resources	Officer.	Ms.	Williams-Roll	joined	General	Mills	in	1995.	She	held	human	resources	leadership	roles	in Supply	Chain,	Finance,	Marketing,	and	Organization	Effectiveness,	and	she	also	worked	a	large	part	of	her	career	on	businesses	outside	of	the	United	States.	She	was named	Vice	President,	Human	Resources,	International	in	2010,	and	then	promoted	to	Senior	Vice	President,	Human	Resources	Operations	in	2013.	She	was	named	to her	present	position	in	September	2014.	Prior	to	joining	General	Mills,	she	held	sales	and	management	roles	with	Jenny	Craig	International.

# WEBSITE	ACCESS

Our	website	is	www.GeneralMills.com.	We	make	available,	free	of	charge	in	the	"Investors"	portion	of	this	website,	annual	reports	on	Form	10-K,	quarterly	reports	on Form	10-Q,	current	reports	on	Form	8-K,	and	amendments	to	those	reports	filed	or	furnished	pursuant	to	Section	13(a)	or	15(d)	of	the	Securities	Exchange	Act	of	1934 (1934	Act)	as	soon	as	reasonably	practicable	after	we	electronically	file	such	material	with,	or	furnish	it	to,	the	Securities	and	Exchange	Commission	(SEC).	All	such filings	are	available	on	the	SEC's	website	at	www.sec.gov.	Reports	of	beneficial	ownership	filed	pursuant	to	Section	16(a)	of	the	1934	Act	are	also	available	on	our website.

# ITEM	1A	-	Risk	Factors

Our	business	is	subject	to	various	risks	and	uncertainties.	Any	of	the	risks	described	below	could	materially,	adversely	affect	our	business,	financial	condition,	and results	of	operations.

# Global	health	developments	and	economic	uncertainty	resulting	from	the	COVID-19	pandemic	could	materially	and	adversely	affect	our	business,	financial condition,	and	results	of	operations.

The	public	health	crisis	caused	by	the	COVID-19	pandemic	and	the	measures	being	taken	by	governments,	businesses,	including	us,	and	the	public	at	large	to	limit COVID-19's	spread	have	had,	and	we	expect	will	continue	to	have,	certain	negative	impacts	on	our	business,	financial	condition,	and	results	of	operations	including, without	limitation,	the	following:

 We	have	experienced,	and	may	continue	to	experience,	a	decrease	in	sales	of	certain	of	our	products	in	markets	around	the	world	that	have	been	affected	by	the COVID-19	pandemic.	In	particular,	sales	of	our	products	in	the	away-from-home	food	outlets	across	all	our	major	markets	have	been	negatively	affected	by reduced	consumer	traffic	resulting	from	shelter-in-place	regulations	or	recommendations	and	closings	of	restaurants,	schools	and	cafeterias.	If	the	COVID-19 pandemic	persists	or	intensifies,	its	negative	impacts	on	our	sales,	particularly	in	away-from-home	food	outlets,	could	be	more	prolonged	and	may	become more	severe.

 Deteriorating	economic	and	political	conditions	in	our	major	markets	affected	by	the	COVID-19	pandemic,	such	as	increased	unemployment,	decreases	in disposable	income,	declines	in	consumer	confidence,	or	economic	slowdowns	or	recessions,	could	cause	a	decrease	in	demand	for	our	products.

 We	have	experienced	minor	temporary	workforce	disruptions	in	our	supply	chain	as	a	result	of	the	COVID-19	pandemic.	We	have	implemented	employee safety	measures,	based	on	guidance	from	the	Centers	for	Disease	Control	and	Prevention	and	World	Health	Organization,	across	all	our	supply	chain	facilities, including	proper	hygiene,	social	distancing,	mask	use,	and	temperature	screenings.	These	measures	may	not	be	sufficient	to	prevent	the	spread	of	COVID-19 among	our	employees.	Illness,	travel	restrictions,	absenteeism,	or	other	workforce	disruptions	could	negatively	affect	our	supply	chain,	manufacturing,

distribution,	or	other	business	processes.	We	may	face	additional	production	disruptions	in	the	future,	which	may	place	constraints	on	our	ability	to	produce products	in	a	timely	manner	or	may	increase	our	costs.

 Changes	and	volatility	in	consumer	purchasing	and	consumption	patterns	may	increase	demand	for	our	products	in	one	quarter	(such	as	occurred	in	the	fourth quarter	of	fiscal	2020),	resulting	in	decreased	consumer	demand	for	our	products	in	subsequent	quarters.	While	we	experienced	increased	demand	for	our products	in	the	fourth	quarter	of	fiscal	2020,	this	increase	may	moderate	or	reverse	if	consumers	alter	their	purchasing	habits.	Short	term	or	sustained	increases in	consumer	demand	at	our	retail	customers	may	exceed	our	production	capacity	or	otherwise	strain	our	supply	chain.

 The	failure	of	third	parties	on	which	we	rely,	including	those	third	parties	who	supply	our	ingredients,	packaging,	capital	equipment	and	other	necessary operating	materials,	contract	manufacturers,	distributors,	contractors,	commercial	banks,	and	external	business	partners,	to	meet	their	obligations	to	us,	or significant	disruptions	in	their	ability	to	do	so,	may	negatively	impact	our	operations.

 Significant	changes	in	the	political	conditions	in	markets	in	which	we	manufacture,	sell,	or	distribute	our	products	(including	quarantines,	import/export restrictions,	price	controls,	governmental	or	regulatory	actions,	closures	or	other	restrictions	that	limit	or	close	our	operating	and	manufacturing	facilities, restrict	our	employees'	ability	to	travel	or	perform	necessary	business	functions,	or	otherwise	prevent	our	third-party	partners,	suppliers,	or	customers	from sufficiently	staffing	operations,	including	operations	necessary	for	the	production,	distribution,	and	sale	of	our	products)	could	adversely	impact	our	operations and	results.

 Actions	we	have	taken	or	may	take,	or	decisions	we	have	made	or	may	make,	as	a	consequence	of	the	COVID-19	pandemic	may	result	in	investigations,	legal claims	or	litigation	against	us.

# The	categories	in	which	we	participate	are	very	competitive,	and	if	we	are	not	able	to	compete	effectively,	our	results	of	operations	could	be	adversely	affected.

The	consumer	and	pet	food	categories	in	which	we	participate	are	very	competitive.	Our	principal	competitors	in	these	categories	are	manufacturers,	as	well	as	retailers with	their	own	branded	and	private	label	products.	Competitors	market	and	sell	their	products	through	brick-and-mortar	stores	and	e-commerce.	All	of	our	principal competitors	have	substantial	financial,	marketing,	and	other	resources.	In	most	product	categories,	we	compete	not	only	with	other	widely	advertised	branded	products, but	also	with	regional	brands	and	with	generic	and	private	label	products	that	are	generally	sold	at	lower	prices.	Competition	in	our	product	categories	is	based	on product	innovation,	product	quality,	price,	brand	recognition	and	loyalty,	effectiveness	of	marketing,	promotional	activity,	convenient	ordering	and	delivery	to	the consumer,	and	the	ability	to	identify	and	satisfy	consumer	preferences.	If	our	large	competitors	were	to	seek	an	advantage	through	pricing	or	promotional	changes,	we could	choose	to	do	the	same,	which	could	adversely	affect	our	margins	and	profitability.	If	we	did	not	do	the	same,	our	revenues	and	market	share	could	be	adversely affected.	Our	market	share	and	revenue	growth	could	also	be	adversely	impacted	if	we	are	not	successful	in	introducing	innovative	products	in	response	to	changing consumer	demands	or	by	new	product	introductions	of	our	competitors.	If	we	are	unable	to	build	and	sustain	brand	equity	by	offering	recognizably	superior	product quality,	we	may	be	unable	to	maintain	premium	pricing	over	generic	and	private	label	products.

# We	may	be	unable	to	maintain	our	profit	margins	in	the	face	of	a	consolidating	retail	environment.

There	has	been	significant	consolidation	in	the	grocery	industry,	resulting	in	customers	with	increased	purchasing	power.	In	addition,	large	retail	customers	may	seek	to use	their	position	to	improve	their	profitability	through	improved	efficiency,	lower	pricing,	increased	reliance	on	their	own	brand	name	products,	increased	emphasis	on generic	and	other	economy	brands,	and	increased	promotional	programs.	If	we	are	unable	to	use	our	scale,	marketing	expertise,	product	innovation,	knowledge	of consumers'	needs,	and	category	leadership	positions	to	respond	to	these	demands,	our	profitability	and	volume	growth	could	be	negatively	impacted.	In	addition,	the	loss of	any	large	customer	could	adversely	affect	our	sales	and	profits.	In	fiscal	2020,	Walmart	accounted	for	21	percent	of	our	consolidated	net	sales	and	30	percent	of	net sales	of	our	North	America	Retail	segment.	For	more	information	on	significant	customers,	please	see	Note	8	to	the	Consolidated	Financial	Statements	in	Item	8	of	this report.

# Price	changes	for	the	commodities	we	depend	on	for	raw	materials,	packaging,	and	energy	may	adversely	affect	our	profitability.

The	principal	raw	materials	that	we	use	are	commodities	that	experience	price	volatility	caused	by	external	conditions	such	as	weather,	climate	change,	product	scarcity, limited	 sources	 of	 supply,	 commodity	 market	 fluctuations,	 currency	 fluctuations,	 trade	 tariffs,	 pandemics	 (such	 as	 the	 COVID-19	 pandemic),	 and	 changes	 in governmental	agricultural	and	energy	policies	and	regulations.	Commodity	prices	have	become,	and	may	continue	to	be,	more	volatile	during	the	COVID-19	pandemic. Commodity	price	changes	may	result	in	unexpected	increases	in	raw	material,	packaging,	and	energy	costs.	If	we	are	unable	to	increase	productivity	to	offset	these increased	costs	or	increase	our	prices,	we	may	experience	reduced	margins	and	profitability.	We	do	not	fully	hedge	against	changes	in	commodity	prices,	and	the	risk management	procedures	that	we	do	use	may	not	always	work	as	we	intend.

# Volatility	in	the	market	value	of	derivatives	we	use	to	manage	exposures	to	fluctuations	in	commodity	prices	will	cause	volatility	in	our	gross	margins	and	net earnings.

We	utilize	derivatives	to	manage	price	risk	for	some	of	our	principal	ingredient	and	energy	costs,	including	grains	(oats,	wheat,	and	corn),	oils	(principally	soybean), dairy	products,	natural	gas,	and	diesel	fuel.	Changes	in	the	values	of	these	derivatives	are	recorded	in	earnings	currently,	resulting	in	volatility	in	both	gross	margin	and net	earnings.	These	gains	and	losses	are	reported	in	cost	of	sales	in	our	Consolidated	Statements	of	Earnings	and	in	unallocated	corporate	items	outside	our	segment operating	results	until	we	utilize	the	underlying	input	in	our	manufacturing	process,	at	which	time	the	gains	and	losses	are	reclassified	to	segment	operating	profit.	We also	record	our	grain	inventories	at	net	realizable	value.	We	may	experience	volatile	earnings	as	a	result	of	these	accounting	treatments.

# If	we	are	not	efficient	in	our	production,	our	profitability	could	suffer	as	a	result	of	the	highly	competitive	environment	in	which	we	operate.

Our	future	success	and	earnings	growth	depend	in	part	on	our	ability	to	be	efficient	in	the	production	and	manufacture	of	our	products	in	highly	competitive	markets. Gaining	additional	efficiencies	may	become	more	difficult	over	time.	Our	failure	to	reduce	costs	through	productivity	gains	or	by	eliminating	redundant	costs	resulting from	 acquisitions	 or	 divestitures	 could	 adversely	 affect	 our	 profitability	 and	 weaken	 our	 competitive	 position.	 Many	 productivity	 initiatives	 involve	 complex reorganization	of	manufacturing	facilities	and	production	lines.	Such	manufacturing	realignment	may	result	in	the	interruption	of	production,	which	may	negatively impact	product	volume	and	margins.	We	periodically	engage	in	restructuring	and	cost	savings	initiatives	designed	to	increase	our	efficiency	and	reduce	expenses.	If	we are	unable	to	execute	those	initiatives	as	planned,	we	may	not	realize	all	or	any	of	the	anticipated	benefits,	which	could	adversely	affect	our	business	and	results	of operations.

# Disruption	of	our	supply	chain	could	adversely	affect	our	business.

Our	ability	to	make,	move,	and	sell	products	is	critical	to	our	success.	Damage	or	disruption	to	raw	material	supplies	or	our	manufacturing	or	distribution	capabilities	due to	weather,	climate	change,	natural	disaster,	fire,	terrorism,	cyber-attack,	pandemics	(such	as	the	COVID-19	pandemic),	governmental	restrictions	or	mandates,	strikes, import/export	restrictions,	or	other	factors	could	impair	our	ability	to	manufacture	or	sell	our	products.	Many	of	our	product	lines	are	manufactured	at	a	single	location or	sourced	from	a	single	supplier.	The	failure	of	third	parties	on	which	we	rely,	including	those	third	parties	who	supply	our	ingredients,	packaging,	capital	equipment and	other	necessary	operating	materials,	contract	manufacturers,	distributors,	contractors,	and	external	business	partners,	to	meet	their	obligations	to	us,	or	significant disruptions	in	their	ability	to	do	so,	may	negatively	impact	our	operations.	Our	suppliers'	policies	and	practices	can	damage	our	reputation	and	the	quality	and	safety	of our	products.	Disputes	with	significant	suppliers,	including	disputes	regarding	pricing	or	performance,	could	adversely	affect	our	ability	to	supply	products	to	our customers	and	could	materially	and	adversely	affect	our	sales,	financial	condition,	and	results	of	operations.	Failure	to	take	adequate	steps	to	mitigate	the	likelihood	or potential	impact	of	such	events,	or	to	effectively	manage	such	events	if	they	occur,	particularly	when	a	product	is	sourced	from	a	single	location	or	supplier,	could adversely	affect	our	business	and	results	of	operations,	as	well	as	require	additional	resources	to	restore	our	supply	chain.

We	have	experienced	minor	temporary	workforce	disruptions	in	our	supply	chain	as	a	result	of	the	COVID-19	pandemic.	We	have	implemented	employee	safety measures,	based	on	guidance	from	the	Centers	for	Disease	Control	and	Prevention	and	World	Health	Organization,	across	all	our	supply	chain	facilities,	including proper	hygiene,	social	distancing,	mask	use,	and	 temperature	screenings.	These	measures	may	not	be	sufficient	 to	prevent	 the	spread	of	COVID-19	among	our employees.	Illness,	 travel	restrictions,	absenteeism,	or	other	workforce	disruptions	could	negatively	affect	our	supply	chain,	manufacturing,	distribution,	or	other business	processes.	We	may	face	additional	production	disruptions	in	the	future,	which	may	place	constraints	on	our	ability	to	produce	products	in	a	timely	manner	or may	increase	our	costs.

We	experienced	increased	demand	for	our	products	in	the	fourth	quarter	of	fiscal	2020	and	were,	and	continue	to	be,	unable	to	fill	all	customer	orders.	Short	term	or sustained	increases	in	consumer	demand	at	our	retail	customers	may	exceed	our	production	capacity	or	otherwise	strain	our	supply	chain.	Our	failure	to	meet	the demand	for	our	products	could	adversely	affect	our	business	and	results	of	operations.

# Concerns	with	the	safety	and	quality	of	our	products	could	cause	consumers	to	avoid	certain	products	or	ingredients.

We	could	be	adversely	affected	if	consumers	in	our	principal	markets	lose	confidence	in	the	safety	and	quality	of	certain	of	our	products	or	ingredients.	Adverse publicity	about	these	types	of	concerns,	whether	or	not	valid,	may	discourage	consumers	from	buying	our	products	or	cause	production	and	delivery	disruptions.

# If	our	products	become	adulterated,	misbranded,	or	mislabeled,	we	might	need	to	recall	those	items	and	may	experience	product	liability	claims	if	consumers or	their	pets	are	injured.

We	may	need	to	recall	some	of	our	products	if	they	become	adulterated,	misbranded,	or	mislabeled.	A	widespread	product	recall	could	result	in	significant	losses	due	to the	costs	of	a	recall,	the	destruction	of	product	inventory,	and	lost	sales	due	to	the	unavailability	of	product	for	a	period	of	time.	We	could	also	suffer	losses	from	a significant	product	liability	judgment	against	us.	A	significant	product	recall	or	product	liability	case	could	also	result	in	adverse	publicity,	damage	to	our	reputation, and	a	loss	of	consumer	confidence	in	our	products,	which	could	have	an	adverse	effect	on	our	business	results	and	the	value	of	our	brands.

# We	may	be	unable	to	anticipate	changes	in	consumer	preferences	and	trends,	which	may	result	in	decreased	demand	for	our	products.

Our	success	depends	in	part	on	our	ability	to	anticipate	the	tastes,	eating	habits,	and	purchasing	behaviors	of	consumers	and	to	offer	products	that	appeal	to	their preferences	in	channels	where	they	shop.	Consumer	preferences	and	category-level	consumption	may	change	from	time	to	time	and	can	be	affected	by	a	number	of different	trends	and	other	factors.	If	we	fail	to	anticipate,	identify	or	react	to	these	changes	and	trends,	such	as	adapting	to	emerging	e-commerce	channels,	or	to introduce	new	and	improved	products	on	a	timely	basis,	we	may	experience	reduced	demand	for	our	products,	which	would	in	turn	cause	our	revenues	and	profitability to	suffer.	Similarly,	demand	for	our	products	could	be	affected	by	consumer	concerns	regarding	the	health	effects	of	ingredients	such	as	sodium,	trans	fats,	genetically modified	organisms,	sugar,	processed	wheat,	grain-free	or	legume-rich	pet	food,	or	other	product	ingredients	or	attributes.

# We	may	be	unable	to	grow	our	market	share	or	add	products	that	are	in	faster	growing	and	more	profitable	categories.

The	food	industry's	growth	potential	is	constrained	by	population	growth.	Our	success	depends	in	part	on	our	ability	to	grow	our	business	faster	than	populations	are growing	in	the	markets	that	we	serve.	One	way	to	achieve	that	growth	is	to	enhance	our	portfolio	by	adding	innovative	new	products	in	faster	growing	and	more profitable	categories.	Our	future	results	will	also	depend	on	our	ability	to	increase	market	share	in	our	existing	product	categories.	If	we	do	not	succeed	in	developing innovative	products	for	new	and	existing	categories,	our	growth	and	profitability	could	be	adversely	affected.

# Economic	downturns	could	limit	consumer	demand	for	our	products.

The	willingness	of	consumers	to	purchase	our	products	depends	in	part	on	local	economic	conditions.	In	periods	of	economic	uncertainty,	consumers	may	purchase more	generic,	private	label,	and	other	economy	brands	and	may	forego	certain	purchases	altogether.	In	those	circumstances,	we	could	experience	a	reduction	in	sales	of higher	margin	products	or	a	shift	in	our	product	mix	to	lower	margin	offerings.	In	addition,	as	a	result	of	economic	conditions	or	competitive	actions,	we	may	be	unable to	raise	our	prices	sufficiently	to	protect	margins.	Consumers	may	also	reduce	the	amount	of	food	that	they	consume	away	from	home	at	customers	that	purchase products	from	our	Convenience	Stores	&	Foodservice	segment.	Any	of	these	events	could	have	an	adverse	effect	on	our	results	of	operations.

# Our	results	may	be	negatively	impacted	if	consumers	do	not	maintain	their	favorable	perception	of	our	brands.

Maintaining	and	continually	enhancing	the	value	of	our	many	iconic	brands	is	critical	to	the	success	of	our	business.	The	value	of	our	brands	is	based	in	large	part	on	the degree	to	which	consumers	react	and	respond	positively	to	these	brands.	Brand	value	could	diminish	significantly	due	to	a	number	of	factors,	including	consumer perception	that	we	have	acted	in	an	irresponsible	manner,	adverse	publicity	about	our	products,	our	failure	to	maintain	the	quality	of	our	products,	the	failure	of	our products	to	deliver	consistently	positive	consumer	experiences,	concerns	about	food	safety,	or	our	products	becoming	unavailable	to	consumers.	Consumer	demand	for our	products	may	also	be	impacted	by	changes	in	the	level	of	advertising	or	promotional	support.	The	use	of	social	and	digital	media	by	consumers,	us,	and	third	parties increases	the	speed	and	extent	that	information	or	misinformation	and	opinions	can	be	shared.	Negative	posts	or	comments	about	us,	our	brands,	or	our	products	on social	or	digital	media	could	seriously	damage	our	brands	and	reputation.	If	we	do	not	maintain	the	favorable	perception	of	our	brands,	our	business	results	could	be negatively	impacted.

# Our	international	operations	are	subject	to	political	and	economic	risks.

In	fiscal	2020,	24	percent	of	our	consolidated	net	sales	were	generated	outside	of	the	United	States.	We	are	accordingly	subject	to	a	number	of	risks	relating	to	doing business	internationally,	any	of	which	could	significantly	harm	our	business.	These	risks	include:

 political	and	economic	instability;

 exchange	controls	and	currency	exchange	rates;

 tariffs	on	products	and	ingredients	that	we	import	and	export;

 nationalization	or	government	control	of	operations;

 compliance	with	anti-corruption	regulations;

 uncertainty	relating	to	the	impact	of	the	United	Kingdom's	exit	from	the	European	Union;

 foreign	tax	treaties	and	policies;	and

 restriction	on	the	transfer	of	funds	to	and	from	foreign	countries,	including	potentially	negative	tax	consequences.

Our	financial	performance	on	a	U.S.	dollar	denominated	basis	is	subject	to	fluctuations	in	currency	exchange	rates.	These	fluctuations	could	cause	material	variations	in our	results	of	operations.	Our	principal	exposures	are	to	the	Australian	dollar,	Brazilian	real,	British	pound	sterling,	Canadian	dollar,	Chinese	renminbi,	euro,	Japanese yen,	Mexican	peso,	and	Swiss	franc.	From	time	to	time,	we	enter	into	agreements	that	are	intended	to	reduce	the	effects	of	our	exposure	to	currency	fluctuations,	but these	agreements	may	not	be	effective	in	significantly	reducing	our	exposure.

A	strengthening	in	the	U.S.	dollar	relative	to	other	currencies	in	the	countries	in	which	we	operate,	such	as	has	generally	occurred	during	the	COVID-19	pandemic	to- date,	would	negatively	affect	our	reported	results	of	operations	and	financial	results	due	to	currency	translation	losses	and	currency	transaction	losses.

# New	regulations	or	regulatory-based	claims	could	adversely	affect	our	business.

Our	 facilities	 and	 products	 are	 subject	 to	 many	 laws	 and	 regulations	 administered	 by	 the	 United	 States	 Department	 of	Agriculture,	 the	 Federal	 Food	 and	 Drug Administration,	 the	Occupational	Safety	and	Health	Administration,	and	other	federal,	state,	 local,	and	foreign	governmental	agencies	relating	 to	 the	production, packaging,	labelling,	storage,	distribution,	quality,	and	safety	of	food	products	and	the	health	and	safety	of	our	employees.	Our	failure	to	comply	with	such	laws	and regulations	could	subject	us	to	lawsuits,	administrative	penalties,	and	civil	remedies,	including	fines,	injunctions,	and	recalls	of	our	products.	We	advertise	our	products and	could	be	the	target	of	claims	relating	to	alleged	false	or	deceptive	advertising	under	federal,	state,	and	foreign	laws	and	regulations.	We	may	also	be	subject	to	new laws	or	regulations	restricting	our	right	to	advertise	our	products,	including	restrictions	on	the	audience	to	whom	products	are	marketed.	Changes	in	laws	or	regulations that	impose	additional	regulatory	requirements	on	us	could	increase	our	cost	of	doing	business	or	restrict	our	actions,	causing	our	results	of	operations	to	be	adversely affected.

Significant	 COVID-19	 related	 changes	 in	 the	 political	 conditions	 in	 markets	 in	 which	 we	 manufacture,	 sell	 or	 distribute	 our	 products	 (including	 quarantines, import/export	restrictions,	price	controls,	governmental	or	regulatory	actions,	closures	or	other	restrictions	that	limit	or	close	our	operating	and	manufacturing	facilities, restrict	our	employees'	ability	to	travel	or	perform	necessary	business	functions	or	otherwise	prevent	our	third-party	partners,	suppliers,	or	customers	from	sufficiently staffing	operations,	including	operations	necessary	for	the	production,	distribution,	sale,	and	support	of	our	products)	could	adversely	impact	our	operations	and	results.

We	are	subject	to	various	federal,	state,	local,	and	foreign	environmental	laws	and	regulations.	Our	failure	to	comply	with	environmental	laws	and	regulations	could subject	us	to	lawsuits,	administrative	penalties,	and	civil	remedies.	We	are	currently	party	to	a	variety	of	environmental	remediation	obligations.	Due	to	regulatory complexities,	uncertainties	inherent	in	litigation,	and	the	risk	of	unidentified	contaminants	on	current	and	former	properties	of	ours,	the	potential	exists	for	remediation, liability,	indemnification,	and	compliance	costs	to	differ	from	our	estimates.	We	cannot	guarantee	that	our	costs	in	relation	to	these	matters,	or	compliance	with environmental	laws	in	general,	will	not	exceed	our	established	liabilities	or	otherwise	have	an	adverse	effect	on	our	business	and	results	of	operations.

# We	have	a	substantial	amount	of	indebtedness,	which	could	limit	financing	and	other	options	and	in	some	cases	adversely	affect	our	ability	to	pay	dividends.

As	of	May	31,	2020,	we	had	total	debt,	redeemable	interests,	and	noncontrolling	interests	of	$14.4	billion.	The	agreements	under	which	we	have	issued	indebtedness	do not	prevent	us	from	incurring	additional	unsecured	indebtedness	in	the	future.	Our	level	of	indebtedness	may	limit	our:

 ability	to	obtain	additional	financing	for	working	capital,	capital	expenditures,	or	general	corporate	purposes,	particularly	if	the	ratings	assigned	to	our	debt securities	by	rating	organizations	were	revised	downward;	and

 flexibility	to	adjust	to	changing	business	and	market	conditions	and	may	make	us	more	vulnerable	to	a	downturn	in	general	economic	conditions.

There	are	various	financial	covenants	and	other	restrictions	in	our	debt	instruments	and	noncontrolling	interests.	If	we	fail	to	comply	with	any	of	these	requirements,	the related	indebtedness,	and	other	unrelated	indebtedness,	could	become	due	and	payable	prior	to	its	stated	maturity	and	our	ability	to	obtain	additional	or	alternative financing	may	also	be	adversely	affected.

Our	ability	to	make	scheduled	payments	on	or	to	refinance	our	debt	and	other	obligations	will	depend	on	our	operating	and	financial	performance,	which	in	turn	is subject	to	prevailing	economic	conditions	and	to	financial,	business,	and	other	factors	beyond	our	control.

# Global	capital	and	credit	market	issues	could	negatively	affect	our	liquidity,	increase	our	costs	of	borrowing,	and	disrupt	the	operations	of	our	suppliers	and customers.

We	depend	on	stable,	liquid,	and	well-functioning	capital	and	credit	markets	to	fund	our	operations.	Although	we	believe	that	our	operating	cash	flows,	financial	assets, access	to	capital	and	credit	markets,	and	revolving	credit	agreements	will	permit	us	to	meet	our	financing	needs	for	the	foreseeable	future,	there	can	be	no	assurance	that future	volatility	or	disruption	in	the	capital	and	credit	markets	will	not	impair	our	liquidity	or	increase	our	costs	of	borrowing.	We	also	utilize	interest	rate	derivatives	to reduce	the	volatility	of	our	financing	costs.	If	we	are	not	effective	in	hedging	this	volatility,	we	may	experience	an	increase	in	our	costs	of	borrowing.	Our	business	could also	be	negatively	impacted	if	our	suppliers	or	customers	experience	disruptions	resulting	from	tighter	capital	and	credit	markets	or	a	slowdown	in	the	general	economy.

The	COVID-19	pandemic	has	increased	volatility	and	pricing	in	the	capital	markets.	We	may	not	have	access	to	preferred	sources	of	liquidity	when	needed	or	on	terms we	find	acceptable,	and	our	borrowing	costs	could	increase.	An	economic	or	credit	crisis	could	occur	and	impair	credit	availability	and	our	ability	to	raise	capital	when needed.	A	disruption	in	the	financial	markets	may	have	a	negative	effect	on	our	derivative	counterparties	and	could	impair	our	banking	or	other	business	partners,	on whom	we	rely	for	access	to	capital	and	as	counterparties	to	our	derivative	contracts.

From	time	to	time,	we	issue	variable	rate	securities	based	on	interbank	offered	rates	(IBORs)	and	enter	into	interest	rate	swaps	that	contain	a	variable	element	based	on an	IBOR.	There	is	currently	uncertainty	whether	certain	IBORs	will	continue	to	be	available	after	2021.	If	certain	IBORs	cease	to	be	available,	we	may	need	to	amend affected	agreements,	and	we	cannot	predict	what	alternative	index	would	be	negotiated	with	our	counterparties	and	security	holders.	As	a	result,	our	interest	expense could	increase	and	our	available	cash	flow	for	general	corporate	requirements	may	be	adversely	affected.

# Volatility	in	the	securities	markets,	interest	rates,	and	other	factors	could	substantially	increase	our	defined	benefit	pension,	other	postretirement	benefit,	and postemployment	benefit	costs.

We	sponsor	a	number	of	defined	benefit	plans	for	employees	in	the	United	States,	Canada,	and	various	foreign	locations,	including	defined	benefit	pension,	retiree	health and	welfare,	severance,	and	other	postemployment	plans.	Our	major	defined	benefit	pension	plans	are	funded	with	trust	assets	invested	in	a	globally	diversified	portfolio of	securities	and	other	investments.	Changes	in	interest	rates,	mortality	rates,	health	care	costs,	early	retirement	rates,	investment	returns,	and	the	market	value	of	plan assets	can	affect	the	funded	status	of	our	defined	benefit	plans	and	cause	volatility	in	the	net	periodic	benefit	cost	and	future	funding	requirements	of	the	plans.	A significant	increase	in	our	obligations	or	future	funding	requirements	could	have	a	negative	impact	on	our	results	of	operations	and	cash	flows	from	operations.

# Our	business	operations	could	be	disrupted	if	our	information	technology	systems	fail	to	perform	adequately	or	are	breached.

Information	technology	serves	an	important	role	in	the	efficient	and	effective	operation	of	our	business.	We	rely	on	information	technology	networks	and	systems, including	the	internet,	to	process,	transmit,	and	store	electronic	information	to	manage	a	variety	of	business	processes	and	to	comply	with	regulatory,	legal,	and	tax requirements.	Our	information	technology	systems	and	infrastructure	are	critical	to	effectively	manage	our	key	business	processes	including	digital	marketing,	order entry	and	fulfillment,	supply	chain	management,	finance,	administration,	and	other	business	processes.	These	technologies	enable	internal	and	external	communication among	our	locations,	employees,	suppliers,	customers,	and	others	and	include	the	receipt	and	storage	of	personal	information	about	our	employees,	consumers,	and proprietary	business	information.	Our	information	technology	systems,	some	of	which	are	dependent	on	services	provided	by	third	parties,	may	be	vulnerable	to damage,	interruption,	or	shutdown	due	to	any	number	of	causes	such	as	catastrophic	events,	natural	disasters,	fires,	power	outages,	systems	failures,	telecommunications failures,	security	breaches,	computer	viruses,	hackers,	employee	error	or	malfeasance,	and	other	causes.	Increased	cyber-security	threats	pose	a	potential	risk	to	the security	and	viability	of	our	information	technology	systems,	as	well	as	the	confidentiality,	integrity,	and	availability	of	the	data	stored	on	those	systems.	The	failure	of our	information	technology	systems	to	perform	as	we	anticipate	could	disrupt	our	business	and	result	in	transaction	errors,	processing	inefficiencies,	data	loss,	legal claims	or	proceedings,	regulatory	penalties,	and	the	loss	of	sales	and	customers.	Any	interruption	of	our	information	technology	systems	could	have	operational, reputational,	legal,	and	financial	impacts	that	may	have	a	material	adverse	effect	on	our	business.

# A	change	in	the	assumptions	regarding	the	future	performance	of	our	businesses	or	a	different	weighted-average	cost	of	capital	used	to	value	our	reporting units	or	our	indefinite-lived	intangible	assets	could	negatively	affect	our	consolidated	results	of	operations	and	net	worth.

As	of	May	31,	2020,	we	had	$20.5	billion	of	goodwill	and	indefinite-lived	intangible	assets.	Goodwill	for	each	of	our	reporting	units	is	tested	for	impairment	annually and	whenever	events	or	changes	in	circumstances	indicate	that	impairment	may	have	occurred.	We	compare	the	carrying	value	of	the	reporting	unit,	including	goodwill, to	the	fair	value	of	the	reporting	unit.	If	the	fair	value	of	the	reporting	unit	is	less	than	the	carrying	value	of	the	reporting	unit,	including	goodwill,	impairment	has occurred.	Our	estimates	of	fair	value	are	determined	based	on	a	discounted	cash	flow	model.	Growth	rates	for	sales	and	profits	are	determined	using	inputs	from	our long-range	planning	process.	We	also	make	estimates	of	discount	rates,	perpetuity	growth	assumptions,	market	comparables,	and	other	factors.	If	current	expectations	for growth	rates	for	sales	and	profits	are	not	met,	or	other	market	factors	and	macroeconomic	conditions	that	could	be	affected	by	the	COVID-19	pandemic	or	otherwise were	to	change,	then	our	reporting	units	could	become	significantly	impaired.	Our	Europe	&	Australia	reporting	unit	had	experienced	declining	business	performance, and	we	continue	to	monitor	this	business.	While	we	currently	believe	that	our	goodwill	is	not	impaired,	different	assumptions	regarding	the	future	performance	of	our businesses	could	result	in	significant	impairment	losses.

We	evaluate	the	useful	lives	of	our	intangible	assets,	primarily	intangible	assets	associated	with	the	Blue	Buffalo,	Pillsbury,	Totino's,	Progresso,	Yoplait,	Old	El	Paso, Yoki,	Häagen-Dazs,	and	Annie's	brands,	to	determine	if	they	are	finite	or	indefinite-lived.	Reaching	a	determination	on	useful	life	requires	significant	judgments	and assumptions	regarding	the	future	effects	of	obsolescence,	demand,	competition,	other	economic	factors	(such	as	the	stability	of	the	industry,	known	technological advances,	legislative	action	that	results	in	an	uncertain	or	changing	regulatory	environment,	and	expected	changes	in	distribution	channels),	the	level	of	required maintenance	expenditures,	and	the	expected	lives	of	other	related	groups	of	assets.

Our	indefinite-lived	intangible	assets	are	also	tested	for	impairment	annually	and	whenever	events	or	changes	in	circumstances	indicate	that	impairment	may	have occurred.	Our	estimate	of	the	fair	value	of	the	brands	is	based	on	a	discounted	cash	flow	model	using	inputs	including	projected	revenues	from	our	long-range	plan, assumed	royalty	rates	which	could	be	payable	if	we	did	not	own	the	brands,	and	a	discount	rate.	If	current	expectations	for	growth	rates	for	sales	and	margins	are	not met,	or	other	market	factors	and	macroeconomic	conditions	that	could	be	affected	by	the	COVID-19	pandemic	or	otherwise	were	to	change,	then	our	indefinite-lived intangible	assets	could	become	significantly	impaired.	Our	Pillsbury	and	Progresso	brands	had	experienced	declining	business	performance,	and	we	continue	to	monitor these	businesses.

For	further	information	on	goodwill	and	intangible	assets,	please	refer	to	Note	6	to	the	Consolidated	Financial	Statements	in	Item	8	of	this	report.

# Our	failure	to	successfully	integrate	acquisitions	into	our	existing	operations	could	adversely	affect	our	financial	results.

From	time	to	time,	we	evaluate	potential	acquisitions	or	joint	ventures	that	would	further	our	strategic	objectives.	Our	success	depends,	in	part,	upon	our	ability	to integrate	acquired	and	existing	operations.	If	we	are	unable	to	successfully	integrate	acquisitions,	our	financial	results	could	suffer.	Additional	potential	risks	associated with	acquisitions	include	additional	debt	leverage,	the	loss	of	key	employees	and	customers	of	the	acquired	business,	the	assumption	of	unknown	liabilities,	the	inherent risk	associated	with	entering	a	geographic	area	or	line	of	business	in	which	we	have	no	or	limited	prior	experience,	failure	to	achieve	anticipated	synergies,	and	the impairment	of	goodwill	or	other	acquisition-related	intangible	assets.

# ITEM	1B	-	Unresolved	Staff	Comments

# None.

# ITEM	2	-	Properties

We	own	our	principal	executive	offices	and	main	research	facilities,	 which	 are	 located	 in	 the	 Minneapolis,	 Minnesota	 metropolitan	 area.	We	 operate	 numerous manufacturing	facilities	and	maintain	many	sales	and	administrative	offices,	warehouses,	and	distribution	centers	around	the	world.

As	of	May	31,	2020,	we	operated	47	facilities	for	the	production	of	a	wide	variety	of	food	products.	Of	these	facilities,	24	are	located	in	the	United	States	(1	of	which	is leased),	4	in	the	Greater	China	region,	1	in	the	Asia/Middle	East/Africa	Region,	2	in	Canada	(1	of	which	is	leased),	8	in	Europe/Australia,	and	8	in	Latin	America	and Mexico.	The	following	is	a	list	of	the	locations	of	our	principal	production	facilities,	which	primarily	support	the	segment	noted:

# North	America	Retail

•	St.	Hyacinthe,	Canada •	Irapuato,	Mexico •	Buffalo,	New	York

•	Covington,	Georgia •	Reed	City,	Michigan •	Cincinnati,	Ohio

•	Belvidere,	Illinois •	Fridley,	Minnesota •	Wellston,	Ohio

•	Geneva,	Illinois •	Hannibal,	Missouri •	Murfreesboro,	Tennessee

•	Cedar	Rapids,	Iowa

•	Albuquerque,	New	Mexico

•	Milwaukee,	Wisconsin

# Convenience	Stores	&	Foodservice

# Europe	&	Australia

•	Rooty	Hill,	Australia

•	Arras,	France

•	Labatut,	France

# Asia	&	Latin	America

•	Cambara,	Brazil

•	Campo	Novo	do	Pareceis,	Brazil

•	Nova	Prata,	Brazil

•	Paranavai,	Brazil

•	Pouso	Alegre,	Brazil

•	Le	Mans,	France

•	Moneteau,	France

•	Vienne,	France

•	Recife,	Brazil

•	Ribeirao	Claro,	Brazil

•	Guangzhou,	China

•	Nanjing,	China

•	Sanhe,	China

•	Inofita,	Greece

•	San	Adrian,	Spain

•	Shanghai,	China

•	Nashik,	India

•	Joplin,	Missouri •	Richmond,	Indiana

We	operate	numerous	grain	elevators	in	the	United	States	in	support	of	our	domestic	manufacturing	activities.	We	also	utilize	approximately	15	million	square	feet	of warehouse	and	distribution	space,	nearly	all	of	which	is	leased,	that	primarily	supports	our	North	America	Retail	segment.	We	own	and	lease	a	number	of	dedicated sales	and	administrative	offices	around	the	world,	totaling	approximately	3	million	square	feet.	We	have	additional	warehouse,	distribution,	and	office	space	in	our	plant locations.

As	part	of	our	Häagen-Dazs	business	in	our	Europe	&	Australia	and	Asia	&	Latin	America	segments,	we	operate	500	(all	leased)	and	franchise	358	branded	ice	cream parlors	in	various	countries	around	the	world,	all	outside	of	the	United	States	and	Canada.

# ITEM	3	-	Legal	Proceedings

We	are	the	subject	of	various	pending	or	threatened	legal	actions	in	the	ordinary	course	of	our	business.	All	such	matters	are	subject	to	many	uncertainties	and	outcomes that	are	not	predictable	with	assurance.	In	our	opinion,	there	were	no	claims	or	litigation	pending	as	of	May	31,	2020,	that	were	reasonably	likely	to	have	a	material adverse	effect	on	our	consolidated	financial	position	or	results	of	operations.	See	the	information	contained	under	the	section	entitled	"Environmental	Matters"	in	Item	1 of	this	report	for	a	discussion	of	environmental	matters	in	which	we	are	involved.

# ITEM	4	-	Mine	Safety	Disclosures

# PART	II

# ITEM	5	-	Market	for	Registrant's	Common	Equity,	Related	Stockholder	Matters	and	Issuer	Purchases	of	Equity	Securities

Our	common	stock	is	listed	on	the	New	York	Stock	Exchange	under	the	symbol	"GIS."	On	June	15,	2020,	there	were	approximately	27,000	record	holders	of	our common	stock.

# ITEM	6	-	Selected	Financial	Data

The	following	table	sets	forth	selected	financial	data	for	each	of	the	fiscal	years	in	the	five-year	period	ended	May	31,	2020:

| In	Millions,	Except	Per	Share	Data,	Percentages	and	Ratios | 2020	(a) | 2019 | 2018 | 2017 | 2016 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Operating\tdata: |  |  |  |  |  |
| Net\tsales | $17,626.6 | $16,865.2 | $15,740.4 | $15,619.8 | $16,563.1 |
| Gross\tmargin\t(b)\t(d) | 6,129.9 | 5,756.8 | 5,435.6 | 5,567.8 | 5,843.3 |
| Selling,\tgeneral,\tand\tadministrative\texpenses\t(d) | 3,151.6 | 2,935.8 | 2,850.1 | 2,888.8 | 3,141.4 |
| Operating\tprofit\t(d) | 2,953.9 | 2,515.9 | 2,419.9 | 2,492.1 | 2,719.1 |
| Net\tearnings\tattributable\tto\tGeneral\tMills | 2,181.2 | 1,752.7 | 2,131.0 | 1,657.5 | 1,697.4 |
| Advertising\tand\tmedia\texpense | 691.8 | 601.6 | 575.9 | 623.8 | 754.4 |
| Research\tand\tdevelopment\texpense | 224.4 | 221.9 | 219.1 | 218.2 | 222.1 |
| Average\tshares\toutstanding: |  |  |  |  |  |
| Diluted | 613.3 | 605.4 | 585.7 | 598.0 | 611.9 |
| Earnings\tper\tshare: |  |  |  |  |  |
| Diluted | $3.56 | $2.90 | $3.64 | $2.77 | $2.77 |
| Adjusted\tdiluted\t(b)\t(c) | $3.61 | $3.22 | $3.11 | $3.08 | $2.92 |
| Operating\tratios: |  |  |  |  |  |
| Gross\tmargin\tas\ta\tpercentage\tof\tnet\tsales\t(d) | 34.8% | 34.1% | 34.5% | 35.6% | 35.3% |
| Selling,\tgeneral,\tand\tadministrative\texpenses\tas\ta\tpercentage\tof\tnet\tsales\t(d) | 17.9% | 17.4% | 18.1% | 18.5% | 19.0% |
| Operating\tprofit\tas\ta\tpercentage\tof\tnet\tsales\t(d) | 16.8% | 14.9% | 15.4% | 16.0% | 16.4% |
| Adjusted\toperating\tprofit\tas\ta\tpercentage\tof\tnet\tsales\t(b)\t(c)\t(d) | 17.3% | 16.9% | 16.6% | 17.6% | 16.8% |
| Effective\tincome\ttax\trate | 18.5% | 17.7% | 2.7% | 28.8% | 31.4% |
| Balance\tsheet\tdata: |  |  |  |  |  |
| Land,\tbuildings,\tand\tequipment | $3,580.6 | $3,787.2 | $4,047.2 | $3,687.7 | $3,743.6 |
| Total\tassets | 30,806.7 | 30,111.2 | 30,624.0 | 21,812.6 | 21,712.3 |
| Long-term\tdebt,\texcluding\tcurrent\tportion | 10,929.0 | 11,624.8 | 12,668.7 | 7,642.9 | 7,057.7 |
| Total\tdebt\t(b) | 13,539.5 | 14,490.0 | 15,818.6 | 9,481.7 | 8,430.9 |
| Cash\tflow\tdata: |  |  |  |  |  |
| Net\tcash\tprovided\tby\toperating\tactivities\t(e) | $3,676.2 | $2,807.0 | $2,841.0 | $2,415.2 | $2,764.2 |
| Capital\texpenditures | 460.8 | 537.6 | 622.7 | 684.4 | 729.3 |
| Free\tcash\tflow\t(b) | 3,215.4 | 2,269.4 | 2,218.3 | 1,730.8 | 2,034.9 |
| Share\tdata: |  |  |  |  |  |
| Cash\tdividends\tper\tcommon\tshare | $1.96 | $1.96 | $1.96 | $1.92 | $1.78 |
| (a) |  |  |  |  |  |

(b) See	"Glossary"	in	Item	8	of	this	report	for	definition.

(c) See	"Non-GAAP	Measures"	in	Item	7	of	this	report	for	our	discussion	of	this	measure	not	defined	by	generally	accepted	accounting	principles.

(d) In	fiscal	2019,	we	retrospectively	adopted	new	accounting	requirements	related	to	the	presentation	of	net	periodic	defined	benefit	pension	expense,	net	periodic postretirement	benefit	expense,	and	net	periodic	postemployment	benefit	expense.	Please	see	Note	2	to	the	Consolidated	Financial	Statements	in	Item	8	of	this report.

(e) In	fiscal	2018,	we	adopted	new	requirements	for	the	accounting	and	presentation	of	stock-based	payments.	This	resulted	in	the	reclassification	of	realized	windfall tax	benefits	and	employee	tax	withholdings	in	our	Consolidated	Statements	of	Cash	Flows.	Please	see	Note	2	to	the	Consolidated	Financial	Statements	in	Item	8	of this	report.

# ITEM	7	-	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations

# EXECUTIVE	OVERVIEW

We	are	a	global	packaged	foods	company.	We	develop	distinctive	value-added	food	products	and	market	them	under	unique	brand	names.	We	work	continuously	to improve	our	core	products	and	to	create	new	products	that	meet	consumers'	evolving	needs	and	preferences.	In	addition,	we	build	the	equity	of	our	brands	over	time with	strong	consumer-directed	marketing,	innovative	new	products,	and	effective	merchandising.	We	believe	our	brand-building	strategy	is	the	key	to	winning	and sustaining	leading	share	positions	in	markets	around	the	globe.

Our	fundamental	financial	goal	is	to	generate	superior	returns	for	our	shareholders	over	the	long	term.	We	believe	achieving	that	goal	requires	us	to	generate	a	consistent balance	of	net	sales	growth,	margin	expansion,	cash	conversion,	and	cash	return	to	shareholders	over	time.

Fiscal	2020	was	a	year	of	significant	challenge	and	change	in	the	external	environment,	and	we	adapted	and	executed	to	deliver	strong	financial	results	while	remaining focused	on	the	health	and	safety	of	our	employees	and	our	company	purpose	of	making	food	the	world	loves.	Prior	to	the	outbreak	of	the	COVID-19	pandemic,	we expected	to	meet	or	exceed	each	of	our	key	fiscal	2020	financial	targets.	The	virus	outbreak	had	a	profound	impact	on	consumer	demand	across	our	major	markets, including	driving	an	unprecedented	increase	in	demand	for	food	at	home	and	a	corresponding	decrease	in	demand	for	away-from-home	food,	resulting	from	efforts	to reduce	virus	transmission.	After	the	onset	of	the	pandemic,	elevated	at-home	food	demand	accelerated	net	sales	growth	in	the	fourth	quarter	in	the	North	America	Retail segment,	where	a	significant	share	of	net	sales	comes	from	categories	that	were	most	impacted	by	at-home	eating,	including	meals,	baking,	and	cereal.	The	impact	of elevated	at-home	demand	was	less	pronounced	in	the	Europe	&	Australia	segment,	reflecting	its	lower	proportion	of	net	sales	in	those	categories.	The	Pet	segment experienced	increased	demand	early	in	the	fourth	quarter	from	stock-up	purchasing,	which	partially	unwound	by	the	end	of	the	quarter.	Lower	away-from-home	food demand	reduced	growth	for	the	Convenience	Stores	&	Foodservice	and	Asia	&	Latin	America	segments.	Consequently,	our	full-year	results	significantly	exceeded	our initial	annual	targets	for	organic	net	sales	growth,	constant-currency	growth	in	adjusted	operating	profit	and	adjusted	diluted	earnings	per	share	(EPS),	and	free	cash	flow conversion.

We	delivered	on	the	three	key	priorities	we	outlined	at	the	beginning	of	fiscal	2020:

First,	we	accelerated	our	organic	net	sales	growth	rate	compared	to	our	fiscal	2019	performance,	driven	by	strong	execution	to	meet	elevated	demand	during	the COVID-19	pandemic,	healthy	levels	of	innovation,	and	a	significant	increase	in	capabilities	and	brand-building	investment.	We	experienced	robust	growth	in organic	net	sales	in	North	America	Retail,	aided	by	our	ability	to	meet	the	pandemic-related	increase	in	demand	for	meals	and	baking	categories	during	the	fourth quarter,	as	well	as	consistently	strong	results	in	U.S.	cereal	and	important	improvements	in	U.S.	snack	bars	and	U.S.	yogurt	throughout	the	year.	We	exceeded	our organic	net	sales	growth	goal	for	our	Pet	segment,	driven	by	a	successful	expansion	of	BLUE	into	additional	customer	outlets	and	a	significant	increase	in household	penetration	for	the	brand.	Organic	net	sales	results	in	our	Convenience	Stores	&	Foodservice,	Europe	&	Australia,	and	Asia	&	Latin	America	segments were	below	fiscal	2019	levels,	due	to	a	slow	start	to	the	year	in	each	of	those	segments,	as	well	as	the	pandemic-related	headwinds	impacting	Convenience	Stores	& Foodservice	and	Asia	&	Latin	America	in	the	second	half	of	the	year.

Second,	we	maintained	our	strong	adjusted	operating	profit	margins.	The	combination	of	our	continued	strong	levels	of	Holistic	Margin	Management	(HMM) savings,	volume	growth,	and	positive	net	price	realization	and	mix	offset	input	cost	inflation	and	increased	investments	in	brand	building	and	capabilities,	resulting in	significant	growth	in	constant-currency	adjusted	operating	profit	and	adjusted	diluted	EPS.

Third,	we	reduced	our	leverage.	Our	continued	cash	discipline	delivered	a	significant	reduction	in	core	working	capital	and	strong	free	cash	flow	conversion, resulting	in	reduced	debt	and	an	important	decrease	in	our	leverage	ratio.

Our	consolidated	net	sales	for	fiscal	2020	rose	5	percent	to	$17.6	billion.	On	an	organic	basis,	net	sales	increased	4	percent	compared	to	year-ago	levels.	Operating	profit of	$3.0	billion	increased	17	percent.	Adjusted	operating	profit	of	$3.0	billion	increased	7	percent	on	a	constant-currency	basis.	Diluted	EPS	of	$3.56	was	up	23	percent compared	to	fiscal	2019	results.	Adjusted	diluted	EPS	of	$3.61	increased	12	percent	on	a	constant-currency	basis	(See	the	"Non-GAAP	Measures"	section	below	for	a description	of	our	use	of	measures	not	defined	by	generally	accepted	accounting	principles	(GAAP)).

Net	cash	provided	by	operations	totaled	$3.7	billion	in	fiscal	2020	representing	a	conversion	rate	of	166	percent	of	net	earnings,	including	earnings	attributable	to redeemable	and	noncontrolling	interests.	This	cash	generation	supported	capital	investments	totaling	$461	million,	and	our	resulting	free	cash	flow	was	$3.2	billion	at	a conversion	rate	of	143	percent	of	adjusted	net	earnings,	including	earnings	attributable	to	redeemable	and	noncontrolling	interests.	We	also	returned	cash	to	shareholders through	dividends	totaling	$1.2	billion	and	reduced	total	debt	outstanding	by	$1.0	billion.	Our	ratio	of	net	debt-to-operating	cash	flow	was	3.2	in	fiscal	2020,	and	our 18

net	debt-to-adjusted	earnings	before	net	interest,	income	taxes,	depreciation	and	amortization	(net	debt-to-adjusted	EBITDA)	ratio	was	3.2,	which	was	favorable	to	our fiscal	2020	target	of	3.5	(See	the	"Non-GAAP	Measures"	section	below	for	a	description	of	our	use	of	measures	not	defined	by	GAAP).

A	detailed	review	of	our	fiscal	2020	performance	compared	to	fiscal	2019	appears	below	in	the	section	titled	"Fiscal	2020	Consolidated	Results	of	Operations."	A detailed	review	of	our	fiscal	2019	performance	compared	to	our	fiscal	2018	performance	is	set	forth	in	Part	II,	Item	7	of	our	Form	10-K	for	the	fiscal	year	ended	May	26, 2019	under	the	caption	"Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	–	Fiscal	2019	Results	of	Consolidated	Operations," which	is	incorporated	herein	by	reference.

We	have	outlined	three	key	priorities	for	fiscal	2021	that	we	expect	will	allow	us	to	generate	competitive	performance	while	continuing	to	advance	our	long-term	goals:

1) Compete	effectively,	everywhere	we	play,	leading	to	increased	brand	penetration,	competitive	service	levels,	strengthened	customer	partnerships,	and	market share	gains	in	our	key	categories.	We	expect	net	sales	growth	in	fiscal	2021	will	be	positively	impacted	by	superior	execution	as	well	as	elevated	at-home	food demand,	relative	to	the	pre-pandemic	period.	We	anticipate	headwinds	to	fiscal	2021	net	sales	growth	from	comparisons	against	the	53rd	week,	the	extra	month of	Pet	segment	results,	and	the	pandemic-related	increase	in	demand	in	the	fourth	quarter	of	fiscal	2020.	Additionally,	fiscal	2021	net	sales	growth	may	be negatively	impacted	by	a	potential	reduction	in	consumers'	at-home	food	inventory,	which	has	been	elevated	during	the	pandemic.

2) Drive	efficiency	to	fuel	investment.	We	anticipate	that	the	combination	of	benefits	from	our	HMM	initiatives	and	volume	leverage	and	headwinds	from	input cost	inflation,	increased	investment	in	our	brands	and	capabilities,	higher	costs	to	service	elevated	demand,	and	higher	ongoing	health	and	safety-related expenses	will	result	in	an	adjusted	operating	profit	margin	that	is	approximately	in	line	with	fiscal	2020	levels.

3) Reduce	leverage	to	increase	financial	flexibility.	We	expect	to	make	further	progress	in	fiscal	2021	in	reducing	our	net	debt-to-adjusted	EBITDA	ratio.

We	expect	the	largest	factor	impacting	our	fiscal	2021	performance	will	be	relative	balance	of	at-home	versus	away-from-home	consumer	food	demand.	This	balance will	be	determined	by	factors	such	as	consumers'	ability	and	willingness	to	eat	in	restaurants,	the	proportion	of	people	working	from	home,	the	reopening	of	schools,	and changes	in	consumers'	income	levels.	While	the	COVID-19	pandemic	has	significantly	influenced	each	of	these	factors	in	recent	months,	the	magnitude	and	duration	of its	future	impact	remains	highly	uncertain.

We	expect	consumer	concerns	about	COVID-19	virus	transmission	and	the	recession	to	drive	elevated	demand	for	food	at	home,	relative	to	pre-pandemic	levels.	We	are tracking	the	level	of	virus	control,	the	possibility	of	a	second-wave	outbreak,	the	availability	of	a	vaccine,	GDP	growth,	unemployment	rates,	consumer	confidence,	and wage	growth,	among	other	factors,	to	assess	the	likely	magnitude	and	duration	of	elevated	at-home	food	demand.

# FISCAL	2020	CONSOLIDATED	RESULTS	OF	OPERATIONS

Fiscal	2020	had	53	weeks	compared	to	52	weeks	in	fiscal	2019.	Fiscal	2020	includes	13	months	of	Pet	operating	segment	results	as	we	changed	the	Pet	operating segment's	reporting	period	from	an	April	fiscal	year	end	to	a	May	fiscal	year	end	to	match	our	fiscal	calendar.	Fiscal	2019	included	12	months	of	Pet	operating	segment results.

In	fiscal	2020,	net	sales	increased	5	percent	compared	to	last	year	and	organic	net	sales	increased	4	percent	compared	to	last	year.	Operating	profit	margin	of	16.8	percent was	up	190	basis	points	from	year-ago	levels	primarily	driven	by	favorable	net	price	realization	and	mix	in	fiscal	2020,	impairment	charges	recorded	for	certain intangible	and	manufacturing	assets	in	fiscal	2019,	and	the	impact	of	the	53 	week	in	fiscal	2020,	partially	offset	by	higher	selling,	general,	and	administrative	(SG&A) rd expenses	in	fiscal	2020.	Adjusted	operating	profit	margin	increased	40	basis	points	to	17.3	percent,	primarily	driven	by	favorable	net	price	realization	and	mix	in	fiscal 2020,	the	impact	of	the	53 	week	in	fiscal	2020,	and	the	purchase	accounting	inventory	adjustment	in	fiscal	2019	related	to	our	acquisition	of	Blue	Buffalo	Products, rd Inc.	(Blue	Buffalo),	partially	offset	by	higher	SG&A	expenses	in	fiscal	2020.	Diluted	earnings	per	share	of	$3.56	increased	23	percent	compared	to	fiscal	2019.	Adjusted diluted	earnings	per	share	of	$3.61	increased	12	percent	on	a	constant-currency	basis	(see	the	"Non-GAAP	Measures"	section	below	for	a	description	of	our	use	of measures	not	defined	by	GAAP).

# A	summary	of	our	consolidated	financial	results	for	fiscal	2020	follows:

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

Consolidated	net	sales	were	as	follows:

| Net	sales	(in	millions) | $17,626.6 | 5 % | 5 % | $16,865.2 |
| :--- | :--- | :--- | :--- | :--- |
| Contributions\tfrom\tvolume\tgrowth\t(a) |  | 4 | pts |  |
| Net\tprice\trealization\tand\tmix |  | 2 | pts |  |
| Foreign\tcurrency\texchange |  | (1)pt | (1)pt |  |

Note:	Table	may	not	foot	due	to	rounding

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

The	5	percent	increase	in	net	sales	in	fiscal	2020	reflects	higher	contributions	from	volume	growth	and	favorable	net	price	realization	and	mix,	partially	offset	by unfavorable	foreign	currency	exchange.	The	53 	week	in	fiscal	2020	contributed	2	percentage	points	of	net	sales	growth,	reflecting	2	percentage	points	of	growth	from rd volume.	The	fiscal	2020	increase	in	net	sales	growth	includes	approximately	3	points	of	net	sales	growth	due	to	the	impact	of	the	COVID-19	pandemic.

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

| Contributions	from	organic	volume	growth	(a) | 2 | pts |
| :--- | :--- | :--- |
| Organic\tnet\tprice\trealization\tand\tmix | 2 | pts |
| Organic\tnet\tsales\tgrowth | 4 | pts |
| Foreign\tcurrency\texchange | (1)pt | (1)pt |
| Divestitures | Flat |  |
| 53rd\tweek | 2 | pts |
| Net\tsales\tgrowth | 5 | pts |

Organic	net	sales	in	fiscal	2020	increased	4	percent	compared	to	fiscal	2019,	driven	by	increased	contributions	from	organic	volume	growth	and	favorable	organic	net price	realization	and	mix.	The	increase	in	organic	net	sales	growth	includes	approximately	3	points	of	organic	net	sales	growth	due	to	the	impact	of	the	COVID-19 pandemic.

The	disclosed	impacts	attributable	to	the	COVID-19	pandemic	on	net	sales	and	organic	net	sales	were	calculated	based	upon	net	sales	in	excess	of	our	expectations	prior to	the	net	increase	in	demand	resulting	from	the	COVID-19	pandemic.	The	impacts	disclosed	are	approximate	and	reflect	our	best	estimate	of	the	impact	of	the	COVID- 19	pandemic.

Cost	of	sales	increased	$388	million	in	fiscal	2020	to	$11,497	million.	The	increase	was	primarily	driven	by	a	$397	million	increase	due	to	higher	volume.	In	fiscal 2020,	we	recorded	a	$19	million	charge	related	to	a	product	recall	in	our	international	Green	Giant	business,	an	$18	million	increase	in	certain	compensation	and benefits	expenses,	and	a	$1	million	increase	attributable	to	product	rate	and	mix.	In	fiscal	2019,	we	recorded	a	$53	million	charge	related	to	the	fair	value	adjustment	of inventory	acquired	in	the	Blue	Buffalo	acquisition.	We	recorded	a	$25	million	net	increase	in	cost	of	sales	related	to	mark-to-market	valuation	of	certain	commodity positions	and	grain	inventories	in	fiscal	2020	compared	to	a	net	increase	of	$36	million	in	fiscal	2019	(please	see	Note	8	to	the	Consolidated	Financial	Statements	in	Item 8	of	this	report	for	additional	information).	In	fiscal	2020,	we	recorded	$26	million	of

restructuring	charges	in	cost	of	sales	compared	to	$10	million	in	fiscal	2019.	We	also	recorded	$2	million	of	restructuring	initiative	project-related	costs	in	cost	of	sales	in fiscal	2020	compared	to	$1	million	in	fiscal	2019	(please	see	Note	4	to	the	Consolidated	Financial	Statements	in	Item	8	of	this	report	for	additional	information).

Gross	margin	increased	6	percent	in	fiscal	2020	versus	fiscal	2019.	Gross	margin	as	a	percent	of	net	sales	increased	70	basis	points	to	34.8	percent	compared	to	fiscal 2019.

SG&A	expenses increased	$216	million	 to	$3,152	million	 in	fiscal	2020	compared	 to	fiscal	2019.	The	 increase	 in	SG&A	expenses	primarily	reflects	 increased compensation	and	benefits	expenses	and	media	and	advertising	expenses,	partially	offset	by	lower	other	consumer-related	expenses.	SG&A	expenses	as	a	percent	of	net sales	in	fiscal	2020	increased	50	basis	points	compared	to	fiscal	2019.

Divestitures	loss	totaled	$30	million	in	fiscal	2019	from	the	sale	of	our	La	Salteña	fresh	pasta	and	refrigerated	dough	business	in	Argentina	and	the	sale	of	our	yogurt business	in	China.

Restructuring, impairment,	 and	 other	 exit	 costs	totaled	 $24	 million in	 fiscal	 2020	 compared	 to	 $275	 million	 in	 fiscal	 2019.	We	 did	 not	 undertake	 any	 new restructuring	actions	in	fiscal	2020.	In	fiscal	2019,	we	recorded	$193	million	of	impairment	charges	related	to	certain	brand	intangible	assets	and	a	$15	million	charge related	to	the	impairment	of	certain	manufacturing	assets	in	our	North	America	Retail	and	Asia	&	Latin	America	segments.	In	fiscal	2019,	we	also	recorded	$80	million of	restructuring	charges	related	to	actions	to	drive	efficiencies	in	targeted	areas	of	our	global	supply	chain.	Please	see	Note	4	to	the	Consolidated	Financial	Statements	in Item	8	of	this	report	for	additional	information.

Benefit	plan	non-service	income	totaled	$113	million	in	fiscal	2020	compared	to	$88	million	in	fiscal	2019,	primarily	reflecting	lower	interest	costs	(please	see	Note	2 to	the	Consolidated	Financial	Statements	in	Item	8	of	this	report	for	additional	information).

Interest,	net	for	fiscal	2020	totaled	$466	million,	$56	million	lower	than	fiscal	2019,	primarily	driven	by	lower	average	debt	levels.

Our	effective tax	 rate	for	fiscal	2020	was	18.5	percent	compared	to	17.7	percent	in	fiscal	2019.	The	0.8	percentage	point	increase	was	primarily	due	to	certain nonrecurring	discrete	tax	benefits	in	fiscal	2019,	partially	offset	by	the	benefit	from	the	reorganization	of	certain	wholly-owned	subsidiaries	and	favorable	changes	in earnings	mix	by	jurisdiction	in	fiscal	2020.	Our	adjusted	effective	tax	rate	was	20.7	percent	in	fiscal	2020	compared	to	21.8	percent	in	fiscal	2019	(see	the	"Non-GAAP Measures"	section	below	for	a	description	of	our	use	of	measures	not	defined	by	GAAP).

After-tax	earnings	from	joint	ventures	increased	27	percent	to	$91	million	in	fiscal	2020	compared	to	fiscal	2019,	primarily	driven	by	higher	net	sales	at	CPW partially	reflecting	the	impact	of	the	COVID-19	pandemic	in	the	month	of	March	and	our	share	of	lower	after-tax	restructuring	charges	compared	to	fiscal	2019.	On	a constant-currency	basis,	after-tax	earnings	from	joint	ventures	increased	31	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:

| measures	not	defined	by	GAAP).	The	components	of	our	joint	ventures'	net	sales	growth	are	shown	in	the	following	table: |  |  |  |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Fiscal\t2020\tvs.\tFiscal\t2019 | CPW |  | HDJ | HDJ | Total |  |
| Contributions\tfrom\tvolume\tgrowth\t(a) | 2 | pts | (11)pts | (11)pts |  |  |
| Net\tprice\trealization\tand\tmix | 3 | pts | 7 | pts |  |  |
| Net\tsales\tgrowth\tin\tconstant\tcurrency | 4 | pts | (4)pts | (4)pts | 3 | pts |
| Foreign\tcurrency\texchange | (4)pts | (4)pts | 3 | pts | (3)pts | (3)pts |
| Net\tsales\tgrowth | Flat |  | (1)pt | (1)pt | Flat |  |

Average	diluted	shares	outstanding	increased	by	8	million	in	fiscal	2020	from	fiscal	2019	due	to	option	exercises.

# RESULTS	OF	SEGMENT	OPERATIONS

Our	businesses	are	organized	into	five	operating	segments:	North	America	Retail;	Convenience	Stores	&	Foodservice;	Europe	&	Australia;	Asia	&	Latin	America;	and Pet.	Fiscal	2020	includes	13	months	of	Pet	operating	segment	results	as	we	changed	the	Pet	operating	segment's	reporting	period	from	an	April	fiscal	year	end	to	a	May fiscal	year	end	to	match	our	fiscal	calendar.	Fiscal	2019	included	12	months	of	results.

The	following	tables	provide	the	dollar	amount	and	percentage	of	net	sales	and	operating	profit	from	each	segment	for	fiscal	2020	and	fiscal	2019:

|  |  | Fiscal	Year |  |  |
| :--- | :--- | :--- | :--- | :--- |
|  |  | 2020 | 2019 |  |
| In\tMillions | Dollars | Percent\tof\tTotal | Dollars | Percent\tof\tTotal |
| Net\tSales |  |  |  |  |
| North\tAmerica\tRetail | $10,750.5 | 61% | \t$9,925.2 | 59% |
| Europe\t&\tAustralia | 1,838.9 | 10 | 1,886.7 | 11 |
| Convenience\tStores\t&\tFoodservice | 1,816.4 | 10 | 1,969.1 | 12 |
| Pet | 1,694.6 | 10 | 1,430.9 | 8 |
| Asia\t&\tLatin\tAmerica | 1,526.2 | 9 | 1,653.3 | 10 |
| Total | $17,626.6 | 100% | \t$16,865.2 | 100% |
| Segment\tOperating\tProfit |  |  |  |  |
| North\tAmerica\tRetail | $2,627.0 | 75% | \t$2,277.2 | 72% |
| Europe\t&\tAustralia | 113.8 | 3 | 123.3 | 4 |
| Convenience\tStores\t&\tFoodservice | 337.2 | 10 | 419.5 | 13 |
| Pet | 390.7 | 11 | 268.4 | 9 |
| Asia\t&\tLatin\tAmerica | 18.7 | 1 | 72.4 | 2 |
| Total | $3,487.4 | 100% | \t$3,160.8 | 100% |

Segment	operating	profit	as	reviewed	by	our	executive	management	excludes	unallocated	corporate	items,	net	gain/loss	on	divestitures,	and	restructuring,	impairment, and	other	exit	costs	that	are	centrally	managed.

# NORTH	AMERICA	RETAIL	SEGMENT

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,	and	e-commerce	grocery	providers.	Our	product	categories	in	this	business	segment	are	ready-to-eat	cereals,	refrigerated	yogurt,	soup,	meal kits,	refrigerated	and	frozen	dough	products,	dessert	and	baking	mixes,	frozen	pizza	and	pizza	snacks,	snack	bars,	fruit	snacks,	savory	snacks,	and	a	wide	variety	of organic	products	including	ready-to-eat	cereal,	frozen	and	shelf-stable	vegetables,	meal	kits,	fruit	snacks,	snack	bars,	and	refrigerated	yogurt.

North	America	Retail	net	sales	were	as	follows:

The	8	percent	increase	in	North	America	Retail	net	sales	for	fiscal	2020	was	primarily	driven	by	the	impact	of	the	COVID-19	pandemic.	The	increase	in	net	sales includes	an	 increase	 in	contributions	from	volume	growth,	 including	2	percentage	points	resulting	from	 the	53rd	week,	partially	offset	by	unfavorable	net	price realization	and	mix.

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

| The	components	of	North	America	Retail	organic	net	sales	growth	are	shown	in	the	following	table: |  |  |  |  |
| :--- | :--- | :--- | :--- | :--- |
|  |  |  | Fiscal\t2020\tvs.\t2019\tPercentage\tChange |  |
| Contributions\tfrom\torganic\tvolume\tgrowth\t(a) | Contributions\tfrom\torganic\tvolume\tgrowth\t(a) | Contributions\tfrom\torganic\tvolume\tgrowth\t(a) | 8 | pts |
| Organic\tnet\tprice\trealization\tand\tmix | Organic\tnet\tprice\trealization\tand\tmix | Organic\tnet\tprice\trealization\tand\tmix | (1)pt | (1)pt |
| Organic\tnet\tsales\tgrowth | Organic\tnet\tsales\tgrowth | Organic\tnet\tsales\tgrowth | 6 | pts |
| Foreign\tcurrency\texchange | Foreign\tcurrency\texchange | Foreign\tcurrency\texchange | Flat |  |
| 53 | rd | \tweek | 2 | pts |
| Net\tsales\tgrowth | Net\tsales\tgrowth | Net\tsales\tgrowth | 8 | pts |

North	America	Retail	organic	net	sales	increased	6	percent	in	fiscal	2020	compared	to	fiscal	2019,	primarily	driven	by	the	impact	of	the	COVID-19	pandemic.	The increase	in	organic	net	sales	includes	an	increase	in	contributions	from	organic	volume	growth,	partially	offset	by	unfavorable	organic	net	price	realization	and	mix.

Net	sales	for	our	North	America	Retail	operating	units	are	shown	in	the	following	table:

(a)	On	a	constant	currency	basis,	Canada	operating	unit	net	sales	increased	5	percent	in	fiscal	2020.	See	the	"Non-GAAP	Measures"	section	below	for	our	use	of	this measure	not	defined	by	GAAP.

Segment	operating	profit	increased	15	percent	to	$2,627	million	in	fiscal	2020,	compared	to	$2,277	million	in	fiscal	2019,	primarily	driven	by	higher	contributions	from volume	growth	and	the	impact	of	the	53 	week	in	fiscal	2020.	Segment	operating	profit	increased	15	percent	on	a	constant-currency	basis	in	fiscal	2020	compared	to rd fiscal	2019	(see	the	"Non-GAAP	Measures"	section	below	for	our	use	of	this	measure	not	defined	by	GAAP).

# EUROPE	&	AUSTRALIA	SEGMENT

Our	Europe	&	Australia	operating	segment	reflects	retail	and	foodservice	businesses	in	the	greater	Europe	and	Australia	regions.	Our	product	categories	include refrigerated	yogurt,	meal	kits,	snack	bars,	super-premium	ice	cream,	refrigerated	and	frozen	dough	products,	shelf	stable	vegetables,	and	dessert	and	baking	mixes. Revenues	from	franchise	fees	are	reported	in	the	region	or	country	where	the	franchisee	is	located.

Europe	&	Australia	net	sales	were	as	follows:

The	3	percent	decrease	in	Europe	&	Australia	net	sales	in	fiscal	2020	was	driven	by	unfavorable	foreign	currency	exchange,	partially	offset	by	favorable	net	price realization	and	mix.	Fiscal	2020	net	sales	includes	growth	from	the	impact	of	the	COVID-19	pandemic.

The	components	of	Europe	&	Australia	organic	net	sales	growth	are	shown	in	the	following	table:

The	1	percent	decrease	in	Europe	&	Australia	organic	net	sales	growth	in	fiscal	2020	was	driven	by	a	decrease	in	contributions	from	organic	volume	growth,	partially offset	by	favorable	organic	net	price	realization	and	mix.	Fiscal	2020	organic	net	sales	includes	growth	from	the	impact	of	the	COVID-19	pandemic.

Segment	operating	profit	decreased	8	percent	to	$114	million	in	fiscal	2020	compared	to	fiscal	2019,	primarily	driven	by	higher	input	costs	and	lower	contributions	from volume	growth,	partially	offset	by	favorable	net	price	realization	and	mix.	Segment	operating	profit	decreased	3	percent	on	a	constant-currency	basis	in	fiscal	2020 compared	to	fiscal	2019	(see	the	"Non-GAAP	Measures"	section	below	for	our	use	of	this	measure	not	defined	by	GAAP).

# CONVENIENCE	STORES	&	FOODSERVICE	SEGMENT

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

Convenience	Stores	&	Foodservice	net	sales	were	as	follows:

Convenience	Stores	&	Foodservice	net	sales	decreased	8	percent	in	fiscal	2020	primarily	driven	by	the	impact	of	the	COVID-19	pandemic	on	away-from-home channels.	The	decrease	in	net	sales	includes	a	decrease	in	contributions	from	volume	growth	and	unfavorable	net	price	realization	and	mix.

The	components	of	Convenience	Stores	&	Foodservice	organic	net	sales	growth	are	shown	in	the	following	table:

The	9	percent	decrease	in	Convenience	Stores	&	Foodservice	organic	net	sales	growth	in	fiscal	2020	was	primarily	driven	by	the	impact	of	the	COVID-19	pandemic. The	decrease	in	organic	net	sales	growth	includes	a	decrease	in	contributions	from	organic	volume	growth	and	unfavorable	organic	net	price	realization	and	mix.

Segment	operating	profit	decreased	20	percent	to	$337	million	in	fiscal	2020,	compared	to	$420	million	in	fiscal	2019,	primarily	driven	by	lower	contributions	from volume	growth	and	unfavorable	net	price	realization	and	mix.

# PET	SEGMENT

Our	Pet	operating	segment	includes	pet	food	products	sold	primarily	in	the	United	States	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,	and	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.

Fiscal	2020	includes	13	months	of	Pet	operating	segment	results	as	we	changed	the	Pet	operating	segment's	reporting	period	from	an	April	fiscal	year	end	to	a	May fiscal	year	end	to	match	our	fiscal	calendar.	Fiscal	2019	included	12	months	of	results.

# Pet	net	sales	were	as	follows:

Pet	net	sales	increased	18	percent	in	fiscal	2020	compared	to	fiscal	2019,	driven	by	an	increase	in	contributions	from	volume	growth,	including	the	impact	of	an	extra month	in	the	period,	and	favorable	net	price	realization	and	mix.	Fiscal	2020	net	sales	includes	growth	from	the	impact	of	the	COVID-19	pandemic.

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

The	18	percent	increase	in	Pet	organic	net	sales	growth	in	fiscal	2020	was	driven	by	an	increase	in	contributions	from	organic	volume	growth,	including	the	impact	of	an extra	month	in	the	period,	and	favorable	organic	net	price	realization	and	mix.	Fiscal	2020	organic	net	sales	includes	growth	from	the	impact	of	the	COVID-19 pandemic.

Pet	operating	profit	increased	46	percent	to	$391	million	in	fiscal	2020,	compared	to	$268	million	in	fiscal	2019,	primarily	driven	by	a	$53	million	purchase	accounting adjustment	related	to	inventory	acquired	in	fiscal	2019,	an	increase	in	contributions	from	volume	growth,	favorable	net	price	realization	and	mix,	and	the	impact	of	an extra	month	in	the	period,	partially	offset	by	higher	SG&A	expenses.

# ASIA	&	LATIN	AMERICA	SEGMENT

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

# Asia	&	Latin	America	net	sales	were	as	follows:

Asia	&	Latin	America	net	sales	decreased	8	percent	in	fiscal	2020	compared	to	fiscal	2019,	primarily	driven	by	the	impact	of	the	COVID-19	pandemic.	The	decrease	in net	sales	includes	unfavorable	foreign	currency	exchange,	a	decrease	in	contributions	from	volume	growth,	and	unfavorable	net	price	realization	and	mix.

The	components	of	Asia	&	Latin	America	organic	net	sales	growth	are	shown	in	the	following	table:

(b)	Impact	of	the	divestiture	of	our	La	Salteña	business	in	Argentina	and	our	Yoplait	business	in	China.

The	2	percent	decrease	in	Asia	&	Latin	America	organic	net	sales	in	fiscal	2020	was	primarily	driven	by	the	impact	of	the	COVID-19	pandemic.	The	decrease	in	organic net	sales	growth	includes	unfavorable	organic	net	price	realization	and	mix	and	a	decrease	in	contributions	from	organic	volume	growth.

Segment	operating	profit	decreased	74	percent	to	$19	million	in	fiscal	2020,	compared	to	$72	million	in	fiscal	2019,	primarily	driven	by	an	increase	in	input	costs	and lower	contributions	from	volume	growth.	Segment	operating	profit	decreased	73	percent	on	a	constant-currency	basis	in	fiscal	2020	compared	to	fiscal	2019	(see	the "Non-GAAP	Measures"	section	below	for	our	use	of	this	measure	not	defined	by	GAAP).

# UNALLOCATED	CORPORATE	ITEMS

Unallocated	corporate	items	include	corporate	overhead	expenses,	variances	to	planned	domestic	employee	benefits	and	incentives,	contributions	to	the	General	Mills Foundation,	asset	and	liability	remeasurement	impact	of	hyperinflationary	economies,	restructuring	initiative	project-related	costs,	and	other	items	that	are	not	part	of	our measurement	of	segment	operating	performance.	This	includes	gains	and	losses	from	the	mark-to-market	valuation	of	certain	commodity	positions	until	passed	back	to our	operating	segments	in	accordance	with	our	policy	as	discussed	in	Note	8	to	the	Consolidated	Financial	Statements	in	Item	8	of	this	report.

In	fiscal	2020,	unallocated	corporate	expense	increased	$169	million	to	$509	million	compared	to	$340	million	last	year,	primarily	driven	by	compensation	and	benefits expenses.	In	fiscal	2020,	we	recorded	a	$25	million	net	increase	in	expense	related	to	mark-to-market	valuation	of	certain	commodity	positions	and	grain	inventories compared	to	a	$36	million	net	increase	in	expense	in	the	prior	year.	In	addition,	we	recorded	$26	million	of	restructuring	charges,	and	$2	million	of	restructuring initiative	project-related	costs	in	cost	of	sales	in	fiscal	2020,	compared	to	$10	million	of	restructuring	charges	and	$1	million	of	restructuring	initiative	project-related costs	in	cost	of	sales	in	fiscal	2019.	We	also	recorded	a	$19	million	charge	related	to	a	product	recall	in	our	international	Green	Giant	business	in	fiscal	2020.	In	fiscal 2020,	we	recorded	$8	million	of	net	losses	related	to	certain	investment	valuation	adjustments	and	the	loss	on	sale	of	certain	corporate	investments,	compared	to	$23 million	of	gains	in	fiscal	2019.	In	fiscal	2019,	we	recorded	a	$16	million	gain	from	a	legal	recovery	related	to	our	Yoplait	SAS	subsidiary	and	$26	million	of	integration costs	related	to	our	acquisition	of	Blue	Buffalo.	In	addition,	we	recorded	a	$3	million	loss	related	to	the	impact	of	hyperinflationary	accounting	for	our	Argentina subsidiary	in	fiscal	2019.

# IMPACT	OF	INFLATION

We	experienced	 input	cost	 inflation	of	4	percent	 in	fiscal	2020	and	4	percent	 in	fiscal	2019,	primarily	on	commodity	 inputs.	We	expect	 input	cost	 inflation	of approximately	3	percent	in	fiscal	2021.	We	attempt	to	minimize	the	effects	of	inflation	through	HMM,	planning,	and	operating	practices.	Our	risk	management	practices are	discussed	in	Item	7A	of	this	report.

# LIQUIDITY

The	primary	source	of	our	liquidity	is	cash	flow	from	operations.	Over	the	most	recent	two-year	period,	our	operations	have	generated	$6.5	billion	in	cash.	A	substantial portion	of	this	operating	cash	flow	has	been	returned	to	shareholders	through	dividends.	We	also	use	cash	from	operations	to	fund	our	capital	expenditures	and acquisitions.	We	 typically	use	a	combination	of	cash,	notes	payable,	and	 long-term	debt,	and	occasionally	 issue	shares	of	common	stock,	 to	finance	significant acquisitions.	Our	sources	of	liquidity	were	not	materially	impacted	from	the	COVID-19	pandemic.

As	of	May	31,	2020,	we	had	$566	million	of	cash	and	cash	equivalents	held	in	foreign	jurisdictions.	As	a	result	of	the	Tax	Cuts	and	Jobs	Act	(TCJA),	the	historic undistributed	earnings	of	our	foreign	subsidiaries	were	taxed	in	the	U.S.	via	the	one-time	repatriation	tax	in	fiscal	2018.	We	have	re-evaluated	our	assertion	and	have concluded	that	although	earnings	prior	to	fiscal	2018	will	remain	permanently	reinvested,	we	will	no	longer	make	a	permanent	reinvestment	assertion	beginning	with	our fiscal	2018	earnings.	As	part	of	the	accounting	for	the	TCJA,	we	recorded	local	country	withholding	taxes	related	to	certain	entities	from	which	we	began	repatriating undistributed	earnings	and	will	continue	to	record	local	country	withholding	taxes	on	all	future	earnings.	As	a	result	of	the	transition	tax,	we	may	repatriate	our	cash	and cash	equivalents	held	by	our	foreign	subsidiaries	without	such	funds	being	subject	to	further	U.S.	income	tax	liability.

# Cash	Flows	from	Operations

|  | Fiscal	Year |  |
| :--- | :--- | :--- |
| In\tMillions | 2020 | 2019 |
| Net\tearnings,\tincluding\tearnings\tattributable\tto\tredeemable\tand\tnoncontrolling\tinterests | $2,210.8 | $1,786.2 |
| Depreciation\tand\tamortization | 594.7 | 620.1 |
| After-tax\tearnings\tfrom\tjoint\tventures | (91.1) | (72.0) |
| Distributions\tof\tearnings\tfrom\tjoint\tventures | 76.5 | 86.7 |
| Stock-based\tcompensation | 94.9 | 84.9 |
| Deferred\tincome\ttaxes | (29.6) | 93.5 |
| Pension\tand\tother\tpostretirement\tbenefit\tplan\tcontributions | (31.1) | (28.8) |
| Pension\tand\tother\tpostretirement\tbenefit\tplan\tcosts | (32.3) | 6.1 |
| Divestitures\tloss | - | 30.0 |
| Restructuring,\timpairment,\tand\tother\texit\tcosts | 43.6 | 235.7 |
| Changes\tin\tcurrent\tassets\tand\tliabilities,\texcluding\tthe\teffects\tof\tacquisitions\tand\tdivestitures | 793.9 | (7.5) |
| Other,\tnet | 45.9 | (27.9) |
| Net\tcash\tprovided\tby\toperating\tactivities | $3,676.2 | $2,807.0 |

During	fiscal	2020,	cash	provided	by	operations	was	$3,676	million	compared	to	$2,807	million	in	the	same	period	last	year.	The	$869	million	increase	was	primarily driven	by	an	$801	million	change	in	current	assets	and	liabilities	and	a	$425	million	increase	in	net	earnings,	partially	offset	by	a	$192	million	change	in	non-cash restructuring,	impairment,	and	other	exit	costs	and	a	$123	million	change	in	deferred	income	taxes.	The	$801	million	change	in	current	assets	and	liabilities	was primarily	driven	by	a	$233	million	change	in	other	current	liabilities,	primarily	driven	by	changes	in	income	taxes	payable,	trade	and	advertising	accruals,	and	incentive accruals,	a	$230	million	change	in	accounts	payable	as	a	result	of	increased	spending	on	raw	materials	and	packaging	as	well	as	the	continued	extension	of	payment terms,	and	a	$208	million	change	in	prepaid	and	other	current	assets,	primarily	driven	by	the	timing	of	certain	tax	payments	and	receipts.

We	strive	to	grow	core	working	capital	at	or	below	the	rate	of	growth	in	our	net	sales.	For	fiscal	2020,	core	working	capital	decreased	$591	million,	compared	to	a	net sales	increase	of	5	percent,	primarily	driven	by	the	increase	in	accounts	payable	and	lower	inventory	balances.	In	fiscal	2019,	core	working	capital	decreased	$195 million,	compared	to	a	net	sales	increase	of	7	percent.

# Cash	Flows	from	Investing	Activities

|  | Fiscal	Year |  |
| :--- | :--- | :--- |
| In\tMillions | 2020 | 2019 |
| Purchases\tof\tland,\tbuildings,\tand\tequipment | $(460.8) | $(537.6) |
| Investments\tin\taffiliates,\tnet | (48.0) | 0.1 |
| Proceeds\tfrom\tdisposal\tof\tland,\tbuildings,\tand\tequipment | 1.7 | 14.3 |
| Proceeds\tfrom\tdivestitures | - | 26.4 |
| Other,\tnet | 20.9 | (59.7) |
| Net\tcash\tused\tby\tinvesting\tactivities | $(486.2) | $(556.5) |

In	fiscal	2020,	we	used	$486	million	of	cash	through	investing	activities	compared	to	$556	million	in	fiscal	2019.	We	invested	$461	million	in	land,	buildings,	and equipment	in	fiscal	2020,	$77	million	less	than	fiscal	2019.

We	expect	capital	expenditures	to	be	approximately	3.5	percent	of	reported	net	sales	in	fiscal	2021.	These	expenditures	will	fund	initiatives	that	are	expected	to	fuel growth,	support	innovative	products,	and	continue	HMM	initiatives	throughout	the	supply	chain.

# Cash	Flows	from	Financing	Activities

| In	Millions | 2020 | 2019 |
| :--- | :--- | :--- |
| Change\tin\tnotes\tpayable | $(1,158.6) | $(66.3) |
| Issuance\tof\tlong-term\tdebt | 1,638.1 | 339.1 |
| Payment\tof\tlong-term\tdebt | (1,396.7) | (1,493.8) |
| Proceeds\tfrom\tcommon\tstock\tissued\ton\texercised\toptions | 263.4 | 241.4 |
| Purchases\tof\tcommon\tstock\tfor\ttreasury | (3.4) | (1.1) |
| Dividends\tpaid | (1,195.8) | (1,181.7) |
| Investments\tin\tredeemable\tinterest | - | 55.7 |
| Distributions\tto\tredeemable\tand\tnoncontrolling\tinterest\tholders | (72.5) | (38.5) |
| Other,\tnet | (16.0) | (31.2) |
| Net\tcash\tused\tby\tfinancing\tactivities | $(1,941.5) | $(2,176.4) |

Financing	activities	used	$1.9	billion	of	cash	in	fiscal	2020	compared	to	$2.2	billion	in	fiscal	2019.	We	had	$917	million	of	net	debt	repayments	in	fiscal	2020	compared to	$1.2	billion	of	net	debt	repayments	in	fiscal	2019.	For	more	information	on	our	debt	issuances	and	payments,	please	refer	to	Note	9	to	the	Consolidated	Financial Statements	in	Item	8	of	this	report.

During	fiscal	2020,	we	received	$263	million	of	net	proceeds	from	common	stock	issued	on	exercised	options	compared	to	$241	million	in	fiscal	2019.

Share	repurchases	in	fiscal	2020	and	2019	were	insignificant.

# Selected	Cash	Flows	from	Joint	Ventures

Selected	cash	flows	from	our	joint	ventures	are	set	forth	in	the	following	table:

|  |  | Fiscal	Year |
| :--- | :--- | :--- |
| Inflow\t(Outflow),\tin\tMillions | 2020 | 2019 |
| Investments\tin\taffiliates,\tnet | $(48.0) | $(0.1) |
| Dividends\treceived | 76.5 | 86.7 |

# CAPITAL	RESOURCES

Total	capital	consisted	of	the	following:

| In	Millions | May	31,	2020 | May	26,	2019 |
| :--- | :--- | :--- |
| Notes\tpayable | $279.0 | $1,468.7 |
| Current\tportion\tof\tlong-term\tdebt | 2,331.5 | 1,396.5 |
| Long-term\tdebt | 10,929.0 | 11,624.8 |
| Total\tdebt | 13,539.5 | 14,490.0 |
| Redeemable\tinterest | 544.6 | 551.7 |
| Noncontrolling\tinterests | 291.0 | 313.2 |
| Stockholders'\tequity | 8,058.5 | 7,054.5 |
| Total\tcapital | $22,433.6 | $22,409.4 |

The	following	table	details	the	fee-paid	committed	and	uncommitted	credit	lines	we	had	available	as	of	May	31,	2020:

| In	Billions | Facility	Amount | Borrowed	Amount |
| :--- | :--- | :--- |
| Credit\tfacility\texpiring: |  |  |
| May\t2022 | $2.7 | $- |
| September\t2022 | 0.2 | - |
| Total\tcommitted\tcredit\tfacilities | 2.9 | - |
| Uncommitted\tcredit\tfacilities | 0.6 | 0.2 |
| Total\tcommitted\tand\tuncommitted\tcredit\tfacilities | $3.5 | $0.2 |

To	ensure	availability	of	funds,	we	maintain	bank	credit	lines	and	have	commercial	paper	programs	available	to	us	in	the	United	States	and	Europe.	In	response	to uncertainty	surrounding	the	availability	and	cost	of	commercial	paper	borrowings	as	a	result	of	the	COVID-19	pandemic,	we	issued	$750	million	of	fixed-rate	notes	in April	2020	and	reduced	our	borrowings	under	commercial	paper	programs.	As	the	COVID-19	pandemic	evolves,	we	will	continue	to	evaluate	its	impact	to	our	sources of	liquidity.	We	also	have	uncommitted	and	asset-backed	credit	lines	that	support	our	foreign	operations.

Certain	 of	 our	 long-term	 debt	 agreements,	 our	 credit	 facilities,	 and	 our	 noncontrolling interests	 contain	 restrictive	 covenants.	As	 of	 May	 31,	 2020,	 we	 were in compliance	with	all	of	these	covenants.

We	have	$2,332	million	of	long-term	debt	maturing	in	the	next	12	months	that	is	classified	as	current,	including	$100	million	of	6.61	percent	medium-term	notes	due	for remarketing	in	October	2020,	€500	million	of	2.1	percent	notes	due	November	2020,	€200	million	of	0.0	percent	notes	due	November	2020,	$4	million	of	floating-rate medium	term	notes	due	for	remarketing	in	November	2020,	$850	million	of	floating-rate	notes	due	April	2021,	and	$600	million	of	3.2	percent	notes	due	April	2021. We	believe	that	cash	flows	from	operations,	together	with	available	short-	and	long-term	debt	financing,	will	be	adequate	to	meet	our	liquidity	and	capital	needs	for	at least	the	next	12	months.

As	of	May	31,	2020,	our	total	debt,	including	the	impact	of	derivative	instruments	designated	as	hedges,	was	87	percent	in	fixed-rate	and	13	percent	in	floating-rate instruments,	compared	to	74	percent	in	fixed-rate	and	26	percent	in	floating-rate	instruments	on	May	26,	2019.

Our	net	debt	to	operating	cash	flow	ratio	declined	to	3.2	in	fiscal	2020	from	5.0	in	fiscal	2019,	primarily	driven	by	an	increase	in	cash	provided	by	operations.	Our	net debt-to-adjusted	EBITDA	ratio	declined	to	3.2	in	fiscal	2020	from	3.9	in	fiscal	2019,	consistent	with	our	plans	to	reduce	our	leverage	following	our	acquisition	of	Blue Buffalo	(see	the	"Non-GAAP	Measures"	section	below	for	our	use	of	this	measure	not	defined	by	GAAP).

We	have	a	51	percent	controlling	interest	in	Yoplait	SAS	and	a	50	percent	interest	in	Yoplait	Marques	SNC	and	Liberté	Marques	Sàrl.	Sodiaal	International	(Sodiaal) holds	the	remaining	interests	in	each	of	these	entities.	We	consolidate	these	entities	into	our	consolidated	financial	statements.	We	record	Sodiaal's	50	percent	interest	in Yoplait	Marques	SNC	and	Liberté	Marques	Sàrl	as	noncontrolling	interests,	and	its	49	percent	interest	in	Yoplait	SAS	as	a	redeemable	interest	on	our	Consolidated Balance	Sheets.	These	euro-	and	Canadian	dollar-denominated	interests	are	reported	in	U.S.	dollars	on	our	Consolidated	Balance	Sheets.	Sodiaal	has	the	ability	to	put	all or	a	portion	of	its	redeemable	interest	to	us	at	fair	value	once	per	year,	up	to	three	times	before	December	2024.	As	of	May	31,	2020,	the	redemption	value	of	the redeemable	interest	was	$545	million	which	approximates	its	fair	value.

During	fiscal	2019,	Sodiaal	invested	$56	million	in	Yoplait	SAS.

The	third-party	holder	of	the	General	Mills	Cereals,	LLC	(GMC)	Class	A	Interests	receives	quarterly	preferred	distributions	from	available	net	income	based	on	the application	of	a	floating	preferred	return	rate	to	the	holder's	capital	account	balance	established	in	the	most	recent	mark-to-market	valuation	(currently	$252	million).	On June	1,	2018,	the	floating	preferred	return	rate	on	GMC's	Class	A	Interests	was	reset	to	the	sum	of	three-month	LIBOR	plus	142.5	basis	points.	The	preferred	return	rate is	adjusted	every	three	years	through	a	negotiated	agreement	with	the	Class	A	Interest	holder	or	through	a	remarketing	auction.

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

# OFF-BALANCE	SHEET	ARRANGEMENTS	AND	CONTRACTUAL	OBLIGATIONS

As	of	May	31,	2020,	we	have	issued	guarantees	and	comfort	letters	of	$130	million	for	the	debt	and	other	obligations	of	non-consolidated	affiliates,	mainly	CPW.	In addition,	off-balance	sheet	arrangements	were	not	material	as	of	May	31,	2020.

As	of	May	31,	2020,	we	invested	in	three	variable	interest	entities	(VIEs).	None	of	our	VIEs	are	material	to	our	results	of	operations,	financial	condition,	or	liquidity	as of	and	for	the	fiscal	year	ended	May	31,	2020.

Our	defined	benefit	plans	in	the	United	States	are	subject	to	the	requirements	of	the	Pension	Protection	Act	(PPA).	In	the	future,	the	PPA	may	require	us	to	make additional	contributions	to	our	domestic	plans.	We	do	not	expect	to	be	required	to	make	any	contributions	in	fiscal	2021.

The	following	table	summarizes	our	future	estimated	cash	payments	under	existing	contractual	obligations,	including	payments	due	by	period:

|  |  |  | Payments	Due	by	Fiscal	Year |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
| In\tMillions | Total | 2021 | 2022\t-\t2023 | 2024\t-\t2025 | 2026\tand\tThereafter |
| Long-term\tdebt\t(a) | $13,318.5 | $2,331.3 | $2,277.1 | $2,550.0 | $6,160.1 |
| Accrued\tinterest | 92.8 | 92.8 | - | - | - |
| Operating\tleases\t(b) | 412.5 | 115.4 | 171.5 | 91.9 | 33.7 |
| Finance\tleases\t(b) | 0.2 | 0.1 | 0.1 | - | - |
| Purchase\tobligations\t(c) | 2,548.8 | 2,271.7 | 191.7 | 57.3 | 28.1 |
| Total\tcontractual\tobligations | 16,372.8 | 4,811.3 | 2,640.4 | 2,699.2 | 6,221.9 |
| Other\tlong-term\tobligations\t(d) | 1,167.1 | - | - | - | - |
| Total\tlong-term\tobligations | $17,539.9 | $4,811.3 | $2,640.4 | $2,699.2 | $6,221.9 |

(a) Amounts	represent	the	expected	cash	payments	of	our	long-term	debt	and	do	not	include	$0.2	million	for	finance	leases	or	$58.4	million	for	net	unamortized debt	issuance	costs,	premiums	and	discounts,	and	fair	value	adjustments.

(b) See	Note	7	to	the	Consolidated	Financial	Statements	in	Item	8	of	this	report	for	more	information	on	our	lease	arrangements.

(c) The	majority	of	the	purchase	obligations	represent	commitments	for	raw	material	and	packaging	to	be	utilized	in	the	normal	course	of	business	and	for consumer	marketing	spending	commitments	that	support	our	brands.	For	purposes	of	this	table,	arrangements	are	considered	purchase	obligations	if	a	contract specifies	all	significant	terms,	including	fixed	or	minimum	quantities	to	be	purchased,	a	pricing	structure,	and	approximate	timing	of	the	transaction.	Most arrangements	are	cancelable	without	a	significant	penalty	and	with	short	notice	(usually	30	days).	Any	amounts	reflected	on	the	Consolidated	Balance	Sheets	as accounts	payable	and	accrued	liabilities	are	excluded	from	the	table	above.

(d) The	fair	value	of	our	foreign	exchange,	equity,	commodity,	and	grain	derivative	contracts	with	a	payable	position	to	the	counterparty	was	$43.1	million	as	of May	31,	2020,	based	on	fair	market	values	as	of	that	date.	Future	changes	in	market	values	will	impact	the	amount	of	cash	ultimately	paid	or	received	to	settle those	instruments	in	the	future.	Other	long-term	obligations	mainly	consist	of	liabilities	for	accrued	compensation	and	benefits,	including	the	underfunded status	of	certain	of	our	defined	benefit	pension,	other	postretirement	benefit,	and	postemployment	benefit	plans,	and	miscellaneous	liabilities.	We	expect	to	pay approximately	$24	million	of	benefits	from	our	unfunded	postemployment	benefit	plans	and	approximately	$21	million	of	deferred	compensation	in	fiscal 2021.	We	are	unable	to	reliably	estimate	the	amount	of	these	payments	beyond	fiscal	2021.	As	of	May	31,	2020,	our	total	liability	for	uncertain	tax	positions and	accrued	interest	and	penalties	was	$175.8	million.

# SIGNIFICANT	ACCOUNTING	ESTIMATES

For	a	complete	description	of	our	significant	accounting	policies,	please	see	Note	2	to	the	Consolidated	Financial	Statements	in	Item	8	of	this	report.	Our	significant accounting	estimates	are	 those	 that	have	a	meaningful	 impact	on	 the	reporting	of	our	financial	condition	and	results	of	operations.	These	estimates	 include	our accounting	for	revenue	recognition,	valuation	of	long-lived	assets,	intangible	assets,	redeemable	interest,	stock-based	compensation,	income	taxes,	and	defined	benefit pension,	other	postretirement	benefit,	and	postemployment	benefit	plans.

# Considerations	related	to	the	COVID-19	pandemic

The	impact	that	the	recent	COVID-19	pandemic	will	have	on	our	consolidated	results	of	operations	is	uncertain.	We	saw	increased	orders	from	retail	customers	across all	geographies	in	response	to	increased	consumer	demand	for	food	at	home.	We	also	experienced	a	COVID-19-related	decrease	in	consumer	traffic	in	away-from-home food	outlets	during	the	third	and	fourth	quarters	of	fiscal	2020.	Near-term	elevated	retail	customer	orders	may	unwind	in	the	coming	months,	and	we	are	unable	to predict	the	nature	and	timing	of	when	that	impact	may	occur,	if	at	all.	We	have	considered	the	potential	impacts	of	the	COVID-19	pandemic	in	our	significant accounting	estimates	as	of	May	31,	2020,	and	will	continue	to	evaluate	the	nature	and	extent	of	the	impact	to	our	business	and	consolidated	results	of	operations.

# Revenue	Recognition

Our	revenues	are	reported	net	of	variable	consideration	and	consideration	payable	to	our	customers,	including	trade	promotion,	consumer	coupon	redemption	and	other reductions	to	the	transaction	price,	including	estimated	allowances	for	returns,	unsalable	product,	and	prompt	pay	discounts.	Trade	promotions	are	recorded	using significant	judgment	of	estimated	participation	and	performance	levels	for	offered	programs	at	the	time	of	sale.	Differences	between	the	estimated	and	actual	reduction to	the	transaction	price	is	recognized	as	a	change	in	estimate	in	a	subsequent	period.	Our	accrued	trade	and	coupon	promotion	liabilities	were	$471	million	as	of	May	31, 2020,	and	$410	million	as	of	May	26,	2019.	Because	these	amounts	are	significant,	if	our	estimates	are	inaccurate	we	would	have	to	make	adjustments	in	subsequent periods	that	could	have	a	significant	effect	on	our	results	of	operations.

# Valuation	of	Long-Lived	Assets

We	estimate	the	useful	lives	of	long-lived	assets	and	make	estimates	concerning	undiscounted	cash	flows	to	review	for	impairment	whenever	events	or	changes	in circumstances	indicate	that	the	carrying	amount	of	an	asset	(or	asset	group)	may	not	be	recoverable.	Fair	value	is	measured	using	discounted	cash	flows	or	independent appraisals,	as	appropriate.

# Intangible	Assets

Goodwill	 and	 other	 indefinite-lived	 intangible	 assets	 are	 not	 subject	 to	 amortization	 and	 are	 tested	 for	 impairment	 annually	 and	 whenever	 events	 or	 changes	 in circumstances	indicate	that	impairment	may	have	occurred.	Our	estimates	of	fair	value	for	goodwill	impairment	testing	are	determined	based	on	a	discounted	cash	flow model.	We	use	inputs	from	our	long-range	planning	process	to	determine	growth	rates	for	sales	and	profits.	We	also	make	estimates	of	discount	rates,	perpetuity	growth assumptions,	market	comparables,	and	other	factors.

We	evaluate	the	useful	lives	of	our	other	intangible	assets,	mainly	brands,	to	determine	if	they	are	finite	or	indefinite-lived.	Reaching	a	determination	on	useful	life requires	significant	judgments	and	assumptions	regarding	the	future	effects	of	obsolescence,	demand,	competition,	other	economic	factors	(such	as	the	stability	of	the industry,	 known	 technological	 advances,	 legislative	 action	 that	 results	 in	 an	 uncertain	 or	 changing	 regulatory	 environment,	 and	 expected	 changes	 in	 distribution channels),	the	level	of	required	maintenance	expenditures,	and	the	expected	lives	of	other	related	groups	of	assets.	Intangible	assets	that	are	deemed	to	have	finite	lives are	amortized	on	a	straight-line	basis	over	their	useful	lives,	generally	ranging	from	4	to	30	years.	Our	estimate	of	the	fair	value	of	our	brand	assets	is	based	on	a discounted	cash	flow	model	using	inputs	which	include	projected	revenues	from	our	long-range	plan,	assumed	royalty	rates	that	could	be	payable	if	we	did	not	own	the brands,	and	a	discount	rate.

As	of	May	31,	2020,	we	had	$20	billion	of	goodwill	and	indefinite-lived	intangible	assets.	We	assessed	our	goodwill	and	brand	intangible	assets	for	potential	impairment indicators	using	quantitative	and	qualitative	factors,	including	the	estimated	impacts	of	the	COVID-19	pandemic,	as	of	May	31,	2020,	and	concluded	that	no	impairment indicators	were	present	as	of	that	date.	While	we	currently	believe	that	the	fair	value	of	each	intangible	exceeds	its	carrying	value	and	that	those	intangibles	will contribute	indefinitely	to	our	cash	flows,	materially	different	assumptions	regarding	future	performance	of	our	businesses	or	a	different	weighted-average	cost	of	capital could	result	in	material	impairment	losses	and	amortization	expense.	We	performed	our	fiscal	2020	assessment	of	our	intangible	assets	as	of	the	first	day	of	the	second quarter	of	fiscal	2020,	and	we	determined	there	was	no	impairment	of	our	intangible	assets	as	their	related	fair	values	were	substantially	in	excess	of	the	carrying	values, except	for	the	Europe	&	Australia	reporting	unit	and	the	Progresso	brand	intangible	asset.

The	excess	fair	value	as	of	the	fiscal	2020	test	date	of	the	Europe	&	Australia	reporting	unit	and	the	Progresso	brand	intangible	asset	were	as	follows:

|  |  | Excess	Fair	Value	as	of	Fiscal |
| :--- | :--- | :--- |
| In\tMillions | Carrying\tValue\tof\tIntangible\tAsset | 2020\tTest\tDate |
| Europe\t&\tAustralia | $672.6 | 14% |
| Progresso | $330.0 | 5% |

In	addition,	while	having	significant	coverage	as	of	our	fiscal	2020	assessment	date,	the	Pillsbury	brand	intangible	asset	had	risk	of	decreasing	coverage.	We	will continue	to	monitor	our	businesses	for	potential	impairment.

# Redeemable	Interest

The	significant	assumptions	used	to	estimate	the	redemption	value	of	the	redeemable	interest	include	projected	revenue	growth	and	profitability	from	our	long-range plan,	capital	spending,	depreciation	and	taxes,	foreign	currency	exchange	rates,	and	a	discount	rate.	As	of	May	31,	2020,	the	redemption	value	of	the	redeemable	interest was	$545	million.

# Stock-based	Compensation

The	valuation	of	stock	options	is	a	significant	accounting	estimate	that	requires	us	to	use	judgments	and	assumptions	that	are	likely	to	have	a	material	impact	on	our financial	statements.	Annually,	we	make	predictive	assumptions	regarding	future	stock	price	volatility,	employee	exercise	behavior,	dividend	yield,	and	the	forfeiture rate.	For	more	information	on	these	assumptions,	please	see	Note	12	to	the	Consolidated	Financial	Statements	in	Item	8	of	this	report.

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

|  |  | Fiscal	Year |  |
| :--- | :--- | :--- | :--- |
|  | 2020 | 2019 | 2018 |
| Estimated\tfair\tvalues\tof\tstock\toptions\tgranted | $7.10 | $5.35 | $6.18 |
| Assumptions: |  |  |  |
| Risk-free\tinterest\trate | 2.0 % | 2.9 % | 2.2 % |
| Expected\tterm | 8.5 years | 8.5 years | 8.2 years |
| Expected\tvolatility | 17.4 % | 16.3 % | 15.8 % |
| Dividend\tyield | 3.6 % | 4.3 % | 3.6 % |

The	risk-free	interest	rate	for	periods	during	the	expected	term	of	the	options	is	based	on	the	U.S.	Treasury	zero-coupon	yield	curve	in	effect	at	the	time	of	grant.	An increase	in	the	expected	term	by	1	year,	leaving	all	other	assumptions	constant,	would	increase	the	grant	date	fair	value	by	1	percent.	If	all	other	assumptions	are	held constant,	a	one	percentage	point	increase	in	our	fiscal	2020	volatility	assumption	would	increase	the	grant	date	fair	value	of	our	fiscal	2020	option	awards	by	7	percent.

To	the	extent	that	actual	outcomes	differ	from	our	assumptions,	we	are	not	required	to	true	up	grant-date	fair	value-based	expense	to	final	intrinsic	values.	Historical	data has	a	significant	bearing	on	our	forward-looking	assumptions.	Significant	variances	between	actual	and	predicted	experience	could	lead	to	prospective	revisions	in	our assumptions,	which	could	then	significantly	impact	the	year-over-year	comparability	of	stock-based	compensation	expense.

Any	corporate	income	tax	benefit	realized	upon	exercise	or	vesting	of	an	award	in	excess	of	that	previously	recognized	in	earnings	(referred	to	as	a	windfall	tax	benefit) is	presented	in	the	Consolidated	Statements	of	Cash	Flows	as	an	operating	cash	flow.	The	actual	impact	on	future	years'	cash	flows	will	depend,	in	part,	on	the	volume	of employee	stock	option	exercises	during	a	particular	year	and	the	relationship	between	the	exercise-date	market	value	of	the	underlying	stock	and	the	original	grant-date fair	value	previously	determined	for	financial	reporting	purposes.

Realized	windfall	tax	benefits	and	shortfall	tax	deficiencies	related	to	the	exercise	or	vesting	of	stock-based	awards	are	recognized	in	the	Consolidated	Statement	of Earnings.	Because	employee	stock	option	exercise	behavior	is	not	within	our	control,	it	is	possible	that	significantly	different	reported	results	could	occur	if	different assumptions	or	conditions	were	to	prevail.

# Income	Taxes

We	apply	a	more-likely-than-not	threshold	to	the	recognition	and	derecognition	of	uncertain	tax	positions.	Accordingly,	we	recognize	the	amount	of	tax	benefit	that	has a	greater	than	50	percent	likelihood	of	being	ultimately	realized	upon	settlement.	Future	changes	in

judgment	related	to	the	expected	ultimate	resolution	of	uncertain	tax	positions	will	affect	earnings	in	the	quarter	of	such	change.	For	more	information	on	income	taxes, please	see	Note	15	to	the	Consolidated	Financial	Statements	in	Item	8	of	this	report.

# Defined	Benefit	Pension,	Other	Postretirement	Benefit,	and	Postemployment	Benefit	Plans

We	have	defined	benefit	pension	plans	covering	many	employees	in	the	United	States,	Canada,	Switzerland,	France,	and	the	United	Kingdom.	We	also	sponsor	plans that	provide	health	care	benefits	to	many	of	our	retirees	in	the	United	States,	Canada,	and	Brazil.	Under	certain	circumstances,	we	also	provide	accruable	benefits, primarily	severance,	to	former	and	inactive	employees	in	the	United	States,	Canada,	and	Mexico.	Please	see	Note	14	to	the	Consolidated	Financial	Statements	in	Item	8 of	this	report	for	a	description	of	our	defined	benefit	pension,	other	postretirement	benefit,	and	postemployment	benefit	plans.

We	recognize	benefits	provided	during	retirement	or	following	employment	over	the	plan	participants'	active	working	lives.	Accordingly,	we	make	various	assumptions to	predict	and	measure	costs	and	obligations	many	years	prior	to	the	settlement	of	our	obligations.	Assumptions	that	require	significant	management	judgment	and	have a	material	impact	on	the	measurement	of	our	net	periodic	benefit	expense	or	income	and	accumulated	benefit	obligations	include	the	long-term	rates	of	return	on	plan assets,	the	interest	rates	used	to	discount	the	obligations	for	our	benefit	plans,	and	health	care	cost	trend	rates.

# Expected	Rate	of	Return	on	Plan	Assets

Our	expected	rate	of	return	on	plan	assets	is	determined	by	our	asset	allocation,	our	historical	long-term	investment	performance,	our	estimate	of	future	long-term returns	by	asset	class	(using	input	from	our	actuaries,	investment	services,	and	investment	managers),	and	long-term	inflation	assumptions.	We	review	this	assumption annually	for	each	plan;	however,	our	annual	investment	performance	for	one	particular	year	does	not,	by	itself,	significantly	influence	our	evaluation.

Our	historical	investment	returns	(compound	annual	growth	rates)	for	our	United	States	defined	benefit	pension	and	other	postretirement	benefit	plan	assets	were	15.4 percent,	8.5	percent,	10.1	percent,	8.2	percent,	and	7.9	percent	for	the	1,	5,	10,	15,	and	20	year	periods	ended	May	31,	2020.

On	a	weighted-average	basis,	the	expected	rate	of	return	for	all	defined	benefit	plans	was	6.95	percent	for	fiscal	2020,	7.25	percent	for	fiscal	2019,	and	7.88	percent	for fiscal	2018.	For	fiscal	2021,	we	lowered	our	weighted-average	expected	rate	of	return	on	plan	assets	for	our	principal	defined	benefit	pension	and	other	postretirement plans	in	the	United	States	to	5.67	percent	due	to	asset	allocation	changes	and	expected	asset	returns.

Lowering	the	expected	long-term	rate	of	return	on	assets	by	100	basis	points	would	increase	our	net	pension	and	postretirement	expense	by	$79	million	for	fiscal	2021. A	market-related	valuation	basis	is	used	to	reduce	year-to-year	expense	volatility.	The	market-related	valuation	recognizes	certain	investment	gains	or	losses	over	a	five- year	period	from	the	year	in	which	they	occur.	Investment	gains	or	losses	for	this	purpose	are	the	difference	between	the	expected	return	calculated	using	the	market- related	value	of	assets	and	the	actual	return	based	on	the	market-related	value	of	assets.	Our	outside	actuaries	perform	these	calculations	as	part	of	our	determination	of annual	expense	or	income.

# Discount	Rates

We	estimate	the	service	and	interest	cost	components	of	the	net	periodic	benefit	expense	for	our	United	States	and	most	of	our	international	defined	benefit	pension, other	postretirement	benefit,	and	postemployment	benefit	plans	utilizing	a	full	yield	curve	approach	by	applying	the	specific	spot	rates	along	the	yield	curve	used	to determine	the	benefit	obligation	to	the	relevant	projected	cash	flows.	Our	discount	rate	assumptions	are	determined	annually	as	of	May	31	for	our	defined	benefit pension,	other	postretirement	benefit,	and	postemployment	benefit	plan	obligations.	We	work	with	our	outside	actuaries	to	determine	the	timing	and	amount	of	expected future	cash	outflows	to	plan	participants	and,	using	the	Aa	Above	Median	corporate	bond	yield,	to	develop	a	forward	interest	rate	curve,	including	a	margin	to	that	index based	on	our	credit	risk.	This	forward	interest	rate	curve	is	applied	to	our	expected	future	cash	outflows	to	determine	our	discount	rate	assumptions.

# Our	weighted-average	discount	rates	were	as	follows:

|  | Defined	Benefit	Pension | Other	Postretirement	Benefit | Postemployment	Benefit |
| :--- | :--- | :--- | :--- |
|  | Plans | Plans | Plans |
| Effective\trate\tfor\tfiscal\t2021\tservice\tcosts | 3.59 % | 3.44 % | 2.54 % |
| Effective\trate\tfor\tfiscal\t2021\tinterest\tcosts | 2.54 % | 2.32 % | 1.41 % |
| Obligations\tas\tof\tMay\t31,\t2020 | 3.20 % | 3.02 % | 1.85 % |
| Effective\trate\tfor\tfiscal\t2020\tservice\tcosts | 4.19 % | 4.04 % | 3.51 % |
| Effective\trate\tfor\tfiscal\t2020\tinterest\tcosts | 3.47 % | 3.28 % | 2.84 % |
| Obligations\tas\tof\tMay\t31,\t2019 | 3.91 % | 3.79 % | 3.10 % |
| Effective\trate\tfor\tfiscal\t2019\tservice\tcosts | 4.34 % | 4.27 % | 3.99 % |
| Effective\trate\tfor\tfiscal\t2019\tinterest\tcosts | 3.92 % | 3.80 % | 3.37 % |

Lowering	the	discount	rates	by	100	basis	points	would	increase	our	net	defined	benefit	pension,	other	postretirement	benefit,	and	postemployment	benefit	plan	expense for	fiscal	2021	by	approximately	$54	million.	All	obligation-related	experience	gains	and	losses	are	amortized	using	a	straight-line	method	over	the	average	remaining service	period	of	active	plan	participants	or	over	the	average	remaining	lifetime	of	the	remaining	plan	participants	if	the	plan	is	viewed	as	"all	or	almost	all"	inactive participants.

# Health	Care	Cost	Trend	Rates

We	review	our	health	care	cost	trend	rates	annually.	Our	review	is	based	on	data	we	collect	about	our	health	care	claims	experience	and	information	provided	by	our actuaries.	 This	 information	 includes	 recent	 plan	 experience,	 plan	 design,	 overall	 industry	 experience	 and	 projections,	 and	 assumptions	 used	 by	 other	 similar organizations.	Our	initial	health	care	cost	trend	rate	is	adjusted	as	necessary	to	remain	consistent	with	this	review,	recent	experiences,	and	short-term	expectations.	Our initial	health	care	cost	trend	rate	assumption	is	6.5	percent	for	retirees	age	65	and	over	and	6.2	percent	for	retirees	under	age	65	at	the	end	of	fiscal	2020.	Rates	are	graded down	annually	until	the	ultimate	trend	rate	of	4.5	percent	is	reached	in	2029	for	all	retirees.	The	trend	rates	are	applicable	for	calculations	only	if	the	retirees'	benefits increase	as	a	result	of	health	care	inflation.	The	ultimate	trend	rate	is	adjusted	annually,	as	necessary,	to	approximate	the	current	economic	view	on	the	rate	of	long-term inflation	plus	an	appropriate	health	care	cost	premium.	Assumed	trend	rates	for	health	care	costs	have	an	important	effect	on	the	amounts	reported	for	the	other postretirement	benefit	plans.

Any	arising	health	care	claims	cost-related	experience	gain	or	loss	is	recognized	in	the	calculation	of	expected	future	claims.	Once	recognized,	experience	gains	and losses	are	amortized	using	a	straight-line	method	over	the	average	remaining	service	period	of	active	plan	participants	or	over	the	average	remaining	lifetime	of	the remaining	plan	participants	if	the	plan	is	viewed	as	"all	or	almost	all"	inactive	participants.

# Financial	Statement	Impact

In	fiscal	2020,	we	recorded	net	defined	benefit	pension,	other	postretirement	benefit,	and	postemployment	benefit	plan	income	of	$2	million	compared	to	$24	million	of expense	in	fiscal	2019	and	$23	million	of	expense	in	fiscal	2018.	As	of	May	31,	2020,	we	had	cumulative	unrecognized	actuarial	net	losses	of	$2	billion	on	our	defined benefit	pension	plans	and	cumulative	unrecognized	actuarial	net	gains	of	$114	million	on	our	postretirement	and	postemployment	benefit	plans,	mainly	as	the	result	of liability	increases	from	lower	interest	rates,	partially	offset	by	recent	increases	in	the	values	of	plan	assets.	These	unrecognized	actuarial	net	losses	will	result	in	increases in	our	future	pension	and	postretirement	benefit	expenses	because	they	currently	exceed	the	corridors	defined	by	GAAP.

Actual	future	net	defined	benefit	pension,	other	postretirement	benefit,	and	postemployment	benefit	plan	income	or	expense	will	depend	on	investment	performance, changes	in	future	discount	rates,	changes	in	health	care	cost	trend	rates,	and	other	factors	related	to	the	populations	participating	in	these	plans.

# RECENTLY	ISSUED	ACCOUNTING	PRONOUNCEMENTS

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

In	December	2019,	the	FASB	issued	new	accounting	requirements	related	to	income	taxes.	The	new	standard	simplifies	the	accounting	for	income	taxes	by	removing certain	exceptions	related	to	the	approach	for	intraperiod	tax	allocation,	the	recognition	of	deferred	tax	liabilities	for	outside	basis	differences,	and	the	methodology	for calculating	income	taxes	in	interim	periods.	The	new	standard	also	simplifies	aspects	of	accounting	for	franchise	taxes	and	enacted	changes	in	tax	laws	or	rates	and clarifies	accounting	for	transactions	that	result	in	a	step-up	in	the	tax	basis	of	goodwill.	The	requirements	of	the	new	standard	are	effective	for	annual	reporting	periods beginning	after	December	15,	2020,	and	interim	periods	within	those	annual	periods,	which	for	us	is	the	first	quarter	of	fiscal	2022.	Early	adoption	is	permitted.	We	do not	expect	this	guidance	to	have	a	material	impact	on	our	results	of	operations	or	financial	position.

In	June	2016,	the	FASB	issued	new	accounting	requirements	related	to	the	measurement	of	credit	losses	on	financial	instruments,	including	trade	receivables.	The	new accounting	requirements	replace	the	incurred	loss	impairment	model	with	a	forward-looking	expected	credit	loss	model,	which	will	generally	result	in	earlier	recognition of	credit	losses.	The	requirements	of	the	new	standard	and	subsequent	amendments	are	effective	for	annual	reporting	periods	beginning	after	December	15,	2019,	and interim	periods	within	those	annual	periods,	which	for	us	is	the	first	quarter	of	fiscal	2021.	We	will	adopt	this	guidance	in	the	first	quarter	of	fiscal	2021	using	a	modified retrospective	transition	approach.	We	expect	to	record	an	immaterial	cumulative	effect	adjustment	to	retained	earnings	as	of	the	effective	date	to	align	our	calculation	of credit	losses	to	the	new	model	with	consideration	of	the	economic	implications	of	the	COVID-19	pandemic.	We	do	not	expect	this	guidance	to	have	a	material	impact	on our	results	of	operations	or	financial	position.

# NON-GAAP	MEASURES

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

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

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

# Organic	Net	Sales	Growth	Rates

We	provide	organic	net	sales	growth	rates	for	our	consolidated	net	sales	and	segment	net	sales.	This	measure	is	used	in	reporting	to	our	Board	of	Directors	and	executive management	and	as	a	component	of	the	measurement	of	our	performance	for	incentive	compensation	purposes.	We	believe	that	organic	net	sales	growth	rates	provide useful	information	to	investors	because	they	provide	transparency	to	underlying	performance	in	our	net	sales	by	excluding	the	effect	that	foreign	currency	exchange	rate fluctuations,	as	well	as	acquisitions,	divestitures,	and	a	53 	week,	when	applicable,	have	on	year-to-year	comparability.	A	reconciliation	of	these	measures	to	reported rd 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	Diluted	EPS	and	Related	Constant-currency	Growth	Rate

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

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

| Per	Share	Data | 2020 | 2019 | Change | 2018 | 2017 | 2016 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Diluted\tearnings\tper\tshare,\tas\treported | $3.56 | $2.90 | 23 % | $3.64 | $2.77 | $2.77 |
| Tax\titems\t(a) | (0.09) | (0.12) |  | 0.07 | - | - |
| Restructuring\tcharges\t(b) | 0.06 | 0.10 |  | 0.11 | 0.26 | 0.26 |
| Project-related\tcosts\t(b) | - | - |  | 0.01 | 0.05 | 0.06 |
| Mark-to-market\teffects\t(c) | 0.03 | 0.05 |  | (0.04) | (0.01) | (0.07) |
| Product\trecall\t(d) | 0.03 | - |  | - | - | - |
| CPW\trestructuring\tcharges\t(e) | 0.01 | 0.02 |  | - | - | - |
| Investment\tactivity,\tnet\t(f) | - | (0.03) |  | - | - | - |
| Net\ttax\tbenefit\t(g) | - | (0.01) |  | (0.89) | - | - |
| Divestitures\tloss\t(gain)\t(h) | - | 0.03 |  | - | 0.01 | (0.10) |
| Acquisition\ttransaction\tand\tintegration\tcosts\t(i) | - | 0.03 |  | 0.10 | - | - |
| Asset\timpairments\t(j) | - | 0.26 |  | 0.11 | - | - |
| Legal\trecovery\t(k) | - | (0.01) |  | - | - | - |
| Adjusted\tdiluted\tearnings\tper\tshare | $3.61 | $3.22 | 12 % | $3.11 | $3.08 | $2.92 |
| Foreign\tcurrency\texchange\timpact |  |  | Flat |  |  |  |

(a) Discrete	tax	benefit	related	to	the	reorganization	of	certain	wholly	owned	subsidiaries	in	fiscal	2020	and	a	discrete	tax	benefit	related	to	a	capital	loss	carryback	recorded	in fiscal	2019.	Please	see	Note	15	to	the	Consolidated	Financial	Statements	in	Item	8	of	this	report.	Fiscal	2018	represents	a	prior	year	income	tax	expense	adjustment.

(b) Restructuring	and	project-related	charges	for	previously	announced	restructuring	actions.	Please	see	Note	4	to	the	Consolidated	Financial	Statements	in	Item	8	of	this	report.

(c) Net	mark-to-market	valuation	of	certain	commodity	positions	recognized	in	unallocated	corporate	items.	Please	see	Note	8	to	the	Consolidated	Financial	Statements	in	Item	8 of	this	report.

(d) Product	recall	costs	related	to	our	international	Green	Giant	business.

(e) CPW	restructuring	charges	related	to	initiatives	designed	to	improve	profitability	and	growth	that	were	approved	in	fiscal	2018	and	2019.

(f) Valuation	gains	on	certain	corporate	investments.

(g) Net	tax	benefit	resulting	from	TCJA	accounting.	Please	see	Note	15	to	the	Consolidated	Financial	Statements	in	Item	8	of	this	report.

(h) Loss	on	the	sale	of	our	La	Salteña	refrigerated	dough	business	in	Argentina	and	gain	on	the	sale	of	our	yogurt	business	in	China	in	fiscal	2019.	Please	see	Note	3	to	the Consolidated	Financial	Statements	in	Item	8	of	this	report.	Loss	on	the	sale	of	our	Martel,	Ohio	manufacturing	facility	in	fiscal	2017.	Fiscal	2016	represents	the	gain	on	the sale	of	our	North	American	Green	Giant	product	lines,	the	loss	on	the	sale	of	our	General	Mills	de	Venezuela	CA	subsidiary,	and	the	loss	on	the	sale	of	our	General	Mills Argentina	S.A.	foodservice	business.

(i) Costs	related	to	the	acquisition	of	Blue	Buffalo.	Fiscal	2019	represented	acquisition	integration	costs,	while	fiscal	2018	represented	acquisition	transaction	and	integration costs	and	interest,	net	related	to	the	debt	issued	to	finance	the	acquisition.

(j) Impairment	charges	related	to	our	Progresso,	Food	Should	Taste	Good,	and	Mountain	High	brand	intangible	assets	and	certain	manufacturing	assets	in	our	North	America Retail	and	Asia	&	Latin	America	segments	in	fiscal	2019.	Impairment	charges	related	to	our	Yoki,	Mountain	High,	and	Immaculate	Baking	brand	intangible	assets	in	fiscal 2018.	Please	see	Note	6	to	the	Consolidated	Financial	Statements	in	Item	8	of	this	report.

(k) Represents	a	legal	recovery	related	to	our	Yoplait	SAS	subsidiary.

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.

# Free	Cash	Flow	Conversion	Rate

We	believe	this	measure	provides	useful	information	to	investors	because	it	is	important	for	assessing	our	efficiency	in	converting	earnings	to	cash	and	returning	cash	to shareholders.	The	calculation	of	free	cash	flow	conversion	rate	and	net	cash	provided	by	operating	activities	conversion	rate,	its	equivalent	GAAP	measure,	follows:

| In	Millions | Fiscal	2020 |
| :--- | :--- |
| Net\tearnings,\tincluding\tearnings\tattributable\tto\tredeemable\tand\tnoncontrolling\tinterests,\tas\treported | $2,210.8 |
| Tax\titem\t(a) | $(53.1) |
| Restructuring\tcharges,\tnet\tof\ttax\t(b) | 39.0 |
| Project-related\tcosts,\tnet\tof\ttax\t(b) | 1.2 |
| Mark-to-market\teffects,\tnet\tof\ttax\t(c) | 19.0 |
| Product\trecall,\tnet\tof\ttax\t(d) | 17.1 |
| CPW\trestructuring\tcosts,\tnet\tof\ttax\t(e) | 5.0 |
| Investment\tactivity,\tnet,\tnet\tof\ttax\t(f) | 3.0 |
| Adjusted\tnet\tearnings,\tincluding\tearnings\tattributable\tto\tredeemable\tand\tnoncontrolling\tinterests | $2,241.8 |
| Net\tcash\tprovided\tby\toperating\tactivities | 3,676.2 |
| Purchases\tof\tland,\tbuildings,\tand\tequipment | (460.8) |
| Free\tcash\tflow | $3,215.4 |
| Net\tcash\tprovided\tby\toperating\tactivities\tconversion\trate | 166% |
| Free\tcash\tflow\tconversion\trate | 143% |

Note:	Table	may	not	foot	due	rounding.

(a) Discrete	tax	benefit	related	to	the	reorganization	of	certain	wholly	owned	subsidiaries.	Please	see	Note	15	to	the	Consolidated	Financial	Statements	in	Item	8	of	this	report.

(f) Valuation	adjustments	and	the	loss	on	sale	of	certain	corporate	investments.

# Constant-currency	After-Tax	Earnings	from	Joint	Ventures	Growth	Rate

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

After-tax	earnings	from	joint	ventures	growth	rates	on	a	constant-currency	basis	are	calculated	as	follows:

# Net	Sales	Growth	Rate	for	Canada	Operating	Unit	on	a	Constant-currency	Basis

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

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

| Net	sales	growth	rate	for	our	Canada	operating	unit	on	a	constant-currency	basis	is	calculated	as	follows: |  |  |
| :--- | :--- | :--- |
|  | Fiscal\t2020 | Fiscal\t2020 |
| Percentage\tchange\tin\tnet\tsales\tas\treported | 4 | % |
| Impact\tof\tforeign\tcurrency\texchange | (1) pt | (1) pt |
| Percentage\tchange\tin\tnet\tsales\ton\ta\tconstant-currency\tbasis | 5 | % |

# Constant-currency	Segment	Operating	Profit	Growth	Rates

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

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

|  | Percentage	Change	in	Operating | Percentage	Change	in	Operating | Impact	of	Foreign	Currency | Profit	on	Constant-Currency | Profit	on	Constant-Currency |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  | Profit\tas\tReported | Profit\tas\tReported | Exchange | Basis |  |
| North\tAmerica\tRetail | 15 | % | Flat | 15 | % |
| Europe\t&\tAustralia | (8) |  | (5) pts | (3) |  |
| Asia\t&\tLatin\tAmerica | (74) % | (74) % | (1) pt | (73) % | (73) % |

# Adjusted	Effective	Income	Tax	Rates

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

# Adjusted	effective	income	tax	rates	are	calculated	as	follows:

# Fiscal	Year	Ended

|  | May	31,	2020 |  | May	26,	2019 |  | May	27,	2018 | May	27,	2018 | May	28,	2017 |  | May	29,	2016 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Pretax | Income | Pretax | Income | Pretax | Income | Pretax | Income | Pretax | Income |
| In\tMillions | Earnings\t(a) | Taxes | Earnings\t(a) | Taxes | Earnings\t(a) | Taxes | Earnings\t(a) | Taxes | Earnings\t(a) | Taxes |
| As\treported | $2,600.2 | $480.5 | $2,082.0 | $367.8 | $2,135.6 | $57.3 | $2,271.3 | $655.2 | $2,403.6 | $755.2 |
| Tax\titems\t(b) | - | 53.1 | - | 72.9 | - | (40.9) | - | - | - | - |
| Restructuring\tcharges\t(c) | 50.2 | 11.2 | 77.6 | 14.6 | 82.7 | 21.4 | 224.1 | 70.2 | 229.8 | 69.0 |
| Project-related\tcosts\t(c) | 1.5 | 0.3 | 1.3 | 0.2 | 11.3 | 3.3 | 43.9 | 15.7 | 57.5 | 20.7 |
| Mark-to-market\teffects\t(d) | 24.7 | 5.7 | 36.0 | 8.3 | (32.1) | (10.0) | (13.9) | (5.1) | (62.8) | (23.2) |
| Product\trecall\t(e) | 19.3 | 2.2 | - | - | - | - | - | - | - | - |
| Investment\tactivity,\tnet\t(f) | 8.4 | 5.4 | (22.8) | (5.2) | - | - | - | - | - | - |
| Net\ttax\tbenefit\t(g) | - | - | - | 7.2 | - | 523.5 | - | - | - | - |
| Divestitures\tloss\t(gain)\t(h) | - | - | 30.0 | 13.6 | - | - | 13.5 | 4.3 | (148.2) | (82.2) |
| Acquisition\ttransaction\tand\tintegration\tcosts |  |  |  |  |  |  |  |  |  |  |
| (i) | - | - | 25.6 | 5.9 | 83.9 | 25.4 | - | - | - | - |
| Asset\timpairments\t(j) | - | - | 207.4 | 47.7 | 96.9 | 32.0 | - | - | - | - |
| Legal\trecovery\t(k) | - | - | (16.2) | (5.4) | - | - | - | - | - | - |
| Hyperinflationary\taccounting\t(l) | - | - | 3.2 | - | - | - | - | - | - | - |
| As\tadjusted | $2,704.3 | $558.5 | $2,424.1 | $527.6 | $2,378.3 | $612.0 | $2,538.9 | $740.3 | $2,479.9 | $739.5 |
| Effective\ttax\trate: |  |  |  |  |  |  |  |  |  |  |
| As\treported |  | 18.5% |  | 17.7% |  | 2.7% |  | 28.8% |  | 31.4% |
| As\tadjusted |  | 20.7% |  | 21.8% |  | 25.7% |  | 29.2% |  | 29.8% |
| Sum\tof\tadjustments\tto\tincome\ttaxes |  | $78.0 |  | $159.8 |  | $554.7 |  | $85.1 |  | $(15.7) |
| Average\tnumber\tof\tcommon\tshares\t-\tdiluted |  |  |  |  |  |  |  |  |  |  |
| EPS |  | 613.3 |  | 605.4 |  | 585.7 |  | 598.0 |  | 611.9 |
| Impact\tof\tincome\ttax\tadjustments\ton\tadjusted |  |  |  |  |  |  |  |  |  |  |
| diluted\tEPS |  | $(0.13) |  | $(0.26) |  | $(0.95) |  | $(0.14) |  | $0.03 |

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

(b) Discrete	tax	benefit	related	to	the	reorganization	of	certain	wholly	owned	subsidiaries	in	fiscal	2020	and	a	discrete	tax	benefit	related	to	a	capital	carryback	recorded	in	fiscal 2019.	Please	see	Note	15	to	the	Consolidated	Financial	Statements	in	Item	8	of	this	report.	Fiscal	2018	represents	a	prior	year	income	tax	expense	adjustment.

(c) Restructuring	and	project-related	charges	for	previously	announced	restructuring	actions.	Please	see	Note	4	to	the	Consolidated	Financial	Statements	in	Item	8	of	this	report.

(d) Net	mark-to-market	valuation	of	certain	commodity	positions	recognized	in	unallocated	corporate	items.	Please	see	Note	8	to	the	Consolidated	Financial	Statements	in	Item 8	of	this	report

(e) Product	recall	costs	related	to	our	international	Green	Giant	business.

(f) Valuation	losses	and	the	loss	on	sale	of	certain	corporate	investments	in	fiscal	2020.	Valuation	gains	on	certain	corporate	investments	in	fiscal	2019.

(i) Costs	related	to	the	acquisition	of	Blue	Buffalo.	Fiscal	2019	represented	acquisition	integration	costs,	while	fiscal	2018	represented	acquisition	transaction	and	integration costs	and	interest,	net	related	to	the	debt	issued	to	finance	the	transaction.

(l) Represents	the	impact	of	hyperinflationary	accounting	for	our	Argentina	subsidiary,	which	was	sold	in	fiscal	2019.

# 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	year-to-year	basis.

# Our	adjusted	operating	profit	margins	are	calculated	as	follows:

| Percent	of	Net	Sales | 2020 |  | 2019 |  | 2018 |  | 2017 |  | 2016 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Operating\tprofit\tas\treported | $2,953.9 | 16.8 % | $2,515.9 | 14.9 % | $2,419.9 | 15.4 % | $2,492.1 | 16.0 % | $2,719.1 16.4 % | $2,719.1 16.4 % |
| Restructuring\tcharges\t(a) | 50.2 | 0.3 % | 77.6 | 0.5 % | 82.7 | 0.5 % | 221.9 | 1.4 % | 209.3 | 1.3 % |
| Project-related\tcosts\t(a) | 1.5 | - % | 1.3 | - % | 11.3 | 0.1 % | 43.9 | 0.3 % | 57.5 | 0.4 % |
| Mark-to-market\teffects\t(b) | 24.7 | 0.1 % | 36.0 | 0.2 % | (32.1) | (0.2)% | (13.9) | (0.1)% | (62.8)(0.4)% | (62.8)(0.4)% |
| Product\trecall\t(c) | 19.3 | 0.1 % | - | - % | - | - % | - | - % | - | - % |
| Investment\tactivity,\tnet\t(d) | 8.4 | - % | (22.8) | (0.1)% | - | - % | - | - % | - | - % |
| Divestitures\tloss\t(gain)\t(e) | - | - % | 30.0 | 0.2 % | - | - % | 6.5 | - % | (148.2)(0.9)% | (148.2)(0.9)% |
| Acquisition\ttransaction\tand |  |  |  |  |  |  |  |  |  |  |
| integration\tcosts\t(f) | - | - % | 25.6 | 0.1 % | 34.0 | 0.2 % | - | - % | - | - % |
| Asset\timpairments\t(g) | - | - % | 207.4 | 1.2 % | 96.9 | 0.6 % | - | - % | - | - % |
| Legal\trecovery\t(h) | - | - % | (16.2) | (0.1)% | - | - % | - | - % | - | - % |
| Hyperinflationary\taccounting\t(i) | - | - % | 3.2 | - % | - | - % | - | - % | - | - % |
| Adjusted\toperating\tprofit | $3,058.0 | 17.3 % | $2,858.0 | 16.9 % | $2,612.7 | 16.6 % | $2,750.5 | 17.6 % | $2,774.9 16.8 % | $2,774.9 16.8 % |

(a) Restructuring	and	project-related	charges	for	previously	announced	restructuring	actions.	Please	see	Note	4	to	the	Consolidated	Financial	Statements	in	Item	8	of	this	report.

(b) Net	mark-to-market	valuation	of	certain	commodity	positions	recognized	in	unallocated	corporate	items.	Please	see	Note	8	to	the	Consolidated	Financial	Statements	in	Item 8	of	this	report.

(c) Product	recall	costs	related	to	our	international	Green	Giant	business.

(d) Valuation	losses	and	the	loss	on	sale	of	certain	corporate	investments	in	fiscal	2020.	Valuation	gains	on	certain	corporate	investments	in	fiscal	2019.

(e) Loss	on	the	sale	of	our	La	Salteña	refrigerated	dough	business	in	Argentina	and	gain	on	the	sale	of	our	yogurt	business	in	China	in	fiscal	2019.	Please	see	Note	3	to	the Consolidated	Financial	Statements	in	Item	8	of	this	report.	Loss	on	the	sale	of	our	Martel,	Ohio	manufacturing	facility	in	fiscal	2017.	Fiscal	2016	represents	the	gain	on	the sale	of	our	North	American	Green	Giant	product	lines,	the	loss	on	the	sale	of	our	General	Mills	de	Venezuela	CA	subsidiary,	and	the	loss	on	the	sale	of	our	General	Mills Argentina	S.A.	foodservice	business.

(f) Costs	related	to	the	acquisition	of	Blue	Buffalo.	Fiscal	2019	represented	acquisition	integration	costs,	while	fiscal	2018	represented	acquisition	transaction	and	integration costs.

(g) Impairment	charges	related	to	our	Progresso,	Food	Should	Taste	Good,	and	Mountain	High	brand	intangible	assets	and	certain	manufacturing	assets	in	our	North	America Retail	and	Asia	&	Latin	America	segments	in	fiscal	2019.	Impairment	charges	related	to	our	Yoki,	Mountain	High,	and	Immaculate	Baking	brand	intangible	assets	in	fiscal 2018.	Please	see	Note	6	to	the	Consolidated	Financial	Statements	in	Item	8	of	this	report.

(h) Represents	a	legal	recovery	related	to	our	Yoplait	SAS	subsidiary.

(i) Represents	the	impact	of	hyperinflationary	accounting	for	our	Argentina	subsidiary,	which	was	sold	in	fiscal	2019.

# Adjusted	Operating	Profit	Growth	on	a	Constant-currency	Basis

We	believe	that	this	measure	provides	useful	information	to	investors	because	it	is	the	operating	profit	measure	we	use	to	evaluate	operating	profit	performance	on	a comparable	 year-to-year	 basis.	Additionally, the	 measure is	 evaluated	 on	 a	 constant-currency	 basis	 by	 excluding the	 effect that foreign	 currency	 exchange rate fluctuations	have	on	year-to-year	comparability	given	the	volatility	in	foreign	currency	exchange	rates.

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

|  | 2020 | 2019 | Change |  |
| :--- | :--- | :--- | :--- | :--- |
| Operating\tprofit\tas\treported | $2,953.9 | $2,515.9 | 17 | % |
| Restructuring\tcharges\t(a) | 50.2 | 77.6 |  |  |
| Project-related\tcosts\t(a) | 1.5 | 1.3 |  |  |
| Mark-to-market\teffects\t(b) | 24.7 | 36.0 |  |  |
| Product\trecall\t(c) | 19.3 | - |  |  |
| Investment\tactivity,\tnet\t(d) | 8.4 | (22.8) |  |  |
| Divestitures\tloss\t(e) | - | 30.0 |  |  |
| Acquisition\tintegration\tcosts\t(f) | - | 25.6 |  |  |
| Asset\timpairments\t(g) | - | 207.4 |  |  |
| Legal\trecovery\t(h) | - | (16.2) |  |  |
| Hyperinflationary\taccounting\t(i) | - | 3.2 |  |  |
| Adjusted\toperating\tprofit | $3,058.0 | $2,858.0 | 7 | % |
| Foreign\tcurrency\texchange\timpact |  |  | Flat |  |
| Adjusted\toperating\tprofit\tgrowth,\ton\ta\tconstant-currency\tbasis |  |  | 7 | % |

(e) Loss	on	the	sale	of	our	La	Salteña	and	refrigerated	dough	business	in	Argentina	and	the	gain	on	the	sale	of	our	yogurt	business	in	China.	Please	see	Note	3	to	the Consolidated	Financial	Statements	in	Item	8	of	this	report.

(f) Integration	costs	resulting	from	the	acquisition	of	Blue	Buffalo	in	fiscal	2018.

(g) Impairment	charges	related	to	our	Progresso,	Food	Should	Taste	Good,	and	Mountain	High	brand	intangible	assets	and	certain	manufacturing	assets	in	our	North	America Retail	and	Asia	&	Latin	America	segments.	Please	see	Note	6	to	the	Consolidated	Financial	Statements	in	Item	8	of	this	report.

# Net	Debt-to-Adjusted	Earnings	before	Net	Interest,	Income	Taxes,	Depreciation	and	Amortization	(EBITDA)	Ratio

We	believe	that	this	measure	provides	useful	information	to	investors	because	it	is	an	indicator	of	our	ability	to	incur	additional	debt	and	to	service	our	existing	debt.

The	reconciliation	of	adjusted	EBITDA	to	net	earnings,	including	earnings	attributable	to	redeemable	and	noncontrolling	interests,	its	GAAP	equivalent,	as	well	as	the calculation	of	the	net	debt-to-adjusted	EBITDA	ratio	are	as	follows:

| In	Millions | 2020 | 2019 |
| :--- | :--- | :--- |
| Total\tdebt\t(a) | $13,539.5 | $14,490.0 |
| Cash | 1,677.8 | 450.0 |
| Net\tdebt | $11,861.7 | $14,040.0 |
| Net\tearnings,\tincluding\tearnings\tattributable\tto\tredeemable\tand\tnoncontrolling\tinterests,\tas\treported | $2,210.8 | $1,786.2 |
| Income\ttaxes | 480.5 | 367.8 |
| Interest,\tnet | 466.5 | 521.8 |
| Depreciation\tand\tamortization | 594.7 | 620.1 |
| EBITDA | 3,752.5 | 3,295.9 |
| After-tax\tearnings\tfrom\tjoint\tventures | (91.1) | (72.0) |
| Restructuring\tcharges\t(b) | 50.2 | 77.6 |
| Project-related\tcosts\t(b) | 1.5 | 1.3 |
| Mark-to-market\teffects\t(c) | 24.7 | 36.0 |
| Product\trecall\t(d) | 19.3 | - |
| Investment\tactivity,\tnet\t(e) | 8.4 | (22.8) |
| Divestitures\tloss\t(f) | - | 30.0 |
| Acquisition\tintegration\tcosts\t(g) | - | 25.6 |
| Asset\timpairments\t(h) | - | 207.4 |
| Legal\trecovery\t(i) | - | (16.2) |
| Hyperinflationary\taccounting\t(j) | - | 3.2 |
| Adjusted\tEBITDA | $3,765.6 | $3,566.0 |
| Net\tdebt-to-adjusted\tEBITDA\tratio | 3.2 | 3.9 |

(a) Notes	payable	and	long-term	debt,	including	current	portion.

(e) Valuation	losses	and	the	loss	on	sale	of	certain	corporate	investments	in	fiscal	2020.	Valuation	gains	on	certain	corporate	investments	in	fiscal	2019.

(f) Loss	on	the	sale	of	our	La	Salteña	refrigerated	dough	business	in	Argentina	and	the	gain	on	the	sale	of	our	yogurt	business	in	China.	Please	see	Note	3	to	the	Consolidated Financial	Statements	in	Item	8	of	this	report.

(g) Integration	costs	resulting	from	the	acquisition	of	Blue	Buffalo	in	fiscal	2018.

(h) Impairment	charges	related	to	our	Progresso,	Food	Should	Taste	Good,	and	Mountain	High	brand	intangible	assets	and	certain	manufacturing	assets	in	our	North	America Retail	and	Asia	&	Latin	America	segments.	Please	see	Note	6	to	the	Consolidated	Financial	Statements	in	Item	8	of	this	report.

(i) Represents	a	legal	recovery	related	to	our	Yoplait	SAS	subsidiary.

(j) Represents	the	impact	of	hyperinflationary	accounting	for	our	Argentina	subsidiary,	which	was	sold	in	fiscal	2019.

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

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

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

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

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

You	should	also	consider	the	risk	factors	that	we	identify	in	Item	1A	of	this	report,	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	7A	-	Quantitative	and	Qualitative	Disclosures	About	Market	Risk

We	are	exposed	to	market	risk	stemming	from	changes	in	interest	and	foreign	exchange	rates	and	commodity	and	equity	prices.	Changes	in	these	factors	could	cause fluctuations	in	our	earnings	and	cash	flows.	In	the	normal	course	of	business,	we	actively	manage	our	exposure	to	these	market	risks	by	entering	into	various	hedging transactions,	authorized	under	established	policies	 that	place	clear	controls	on	 these	activities.	The	counterparties	 in	 these	 transactions	are	generally	highly	rated institutions.	We	establish	credit	limits	for	each	counterparty.	Our	hedging	transactions	include	but	are	not	limited	to	a	variety	of	derivative	financial	instruments.	For information	on	interest	rate,	foreign	exchange,	commodity	price,	and	equity	instrument	risk,	please	see	Note	8	to	the	Consolidated	Financial	Statements	in	Item	8	of	this report.

# VALUE	AT	RISK

The	estimates	in	the	table	below	are	intended	to	measure	the	maximum	potential	fair	value	we	could	lose	in	one	day	from	adverse	changes	in	market	interest	rates, foreign	exchange	rates,	commodity	prices,	and	equity	prices	under	normal	market	conditions.	A	Monte	Carlo	value-at-risk	(VAR)	methodology	was	used	to	quantify	the market	risk	for	our	exposures.	The	models	assumed	normal	market	conditions	and	used	a	95	percent	confidence	level.

The	VAR	calculation	used	historical	interest	and	foreign	exchange	rates,	and	commodity	and	equity	prices	from	the	past	year	to	estimate	the	potential	volatility	and correlation	of	these	rates	in	the	future.	The	market	data	were	drawn	from	the	RiskMetrics™	data	set.	The	calculations	are	not	intended	to	represent	actual	losses	in	fair value	that	we	expect	to	incur.	Further,	since	the	hedging	instrument	(the	derivative)	inversely	correlates	with	the	underlying	exposure,	we	would	expect	that	any	loss	or gain	in	the	fair	value	of	our	derivatives	would	be	generally	offset	by	an	increase	or	decrease	in	the	fair	value	of	the	underlying	exposure.	The	positions	included	in	the calculations	were:	debt;	investments;	interest	rate	swaps;	foreign	exchange	forwards;	commodity	swaps,	futures,	and	options;	and	equity	instruments.	The	calculations	do not	include	the	underlying	foreign	exchange	and	commodities	or	equity-related	positions	that	are	offset	by	these	market-risk-sensitive	instruments.

The	table	below	presents	the	estimated	maximum	potential	VAR	arising	from	a	one-day	loss	in	fair	value	for	our	interest	rate,	foreign	currency,	commodity,	and	equity market-risk-sensitive	instruments	outstanding	as	of	May	31,	2020	and	May	26,	2019,	and	the	average	fair	value	impact	during	the	year	ended	May	31,	2020.

| In	Millions | May	31,	2020 | Average	during	fiscal	2020 | May	26,	2019 |
| :--- | :--- | :--- | :--- |
| Interest\trate\tinstruments | $78.8 | $80.3 | $74.4 |
| Foreign\tcurrency\tinstruments | 19.3 | 15.3 | 16.8 |
| Commodity\tinstruments | 2.6 | 3.0 | 4.1 |
| Equity\tinstruments | 5.0 | 2.9 | 2.3 |

# ITEM	8	-	Financial	Statements	and	Supplementary	Data

# REPORT	OF	MANAGEMENT	RESPONSIBILITIES

The	management	of	General	Mills,	Inc.	is	responsible	for	the	fairness	and	accuracy	of	the	consolidated	financial	statements.	The	statements	have	been	prepared	in accordance	with	accounting	principles	that	are	generally	accepted	in	the	United	States,	using	management's	best	estimates	and	judgments	where	appropriate.	The financial	information	throughout	this	Annual	Report	on	Form	10-K	is	consistent	with	our	consolidated	financial	statements.

Management	has	established	a	system	of	internal	controls	that	provides	reasonable	assurance	that	assets	are	adequately	safeguarded	and	transactions	are	recorded accurately	in	all	material	respects,	in	accordance	with	management's	authorization.	We	maintain	a	strong	audit	program	that	independently	evaluates	the	adequacy	and effectiveness	of	internal	controls.	Our	internal	controls	provide	for	appropriate	separation	of	duties	and	responsibilities,	and	there	are	documented	policies	regarding	use of	our	assets	and	proper	financial	reporting.	These	formally	stated	and	regularly	communicated	policies	demand	highly	ethical	conduct	from	all	employees.

The	Audit	Committee	of	the	Board	of	Directors	meets	regularly	with	management,	internal	auditors,	and	our	independent	registered	public	accounting	firm	to	review internal	control,	auditing,	and	financial	reporting	matters.	The	independent	registered	public	accounting	firm,	internal	auditors,	and	employees	have	full	and	free	access to	the	Audit	Committee	at	any	time.

The	Audit	Committee	reviewed	and	approved	the	Company's	annual	financial	statements.	The	Audit	Committee	recommended,	and	the	Board	of	Directors	approved, that	the	consolidated	financial	statements	be	included	in	the	Annual	Report.	The	Audit	Committee	also	appointed	KPMG	LLP	to	serve	as	the	Company's	independent registered	public	accounting	firm	for	fiscal	2021.

J.	L.	Harmening

Chief	Executive	Officer

Chief	Financial	Officer

# Report	of	Independent	Registered	Public	Accounting	Firm

# To	the	Stockholders	and	Board	of	Directors

# Opinions	on	the	Consolidated	Financial	Statements	and	Internal	Control	Over	Financial	Reporting

We	have	audited	the	accompanying	consolidated	balance	sheets	of	General	Mills,	Inc.	and	subsidiaries	(the	"Company")	as	of	May	31,	2020	and	May	26,	2019,	the related	consolidated	statements	of	earnings,	comprehensive	income,	total	equity	and	redeemable	interest,	and	cash	flows	for	each	of	the	years	in	the	three-year	period ended	May	31,	2020,	and	 the	related	notes	and	financial	statement	schedule	II	(collectively,	 the	"consolidated	financial	statements").	We	also	have	audited	 the Company's	internal	control	over	financial	reporting	as	of	May	31,	2020,	based	on	criteria	established	in	Internal	Control	–	Integrated	Framework	(2013)	issued	by	the Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission.

In	our	opinion,	the	consolidated	financial	statements	referred	to	above	present	fairly,	in	all	material	respects,	the	financial	position	of	the	Company	as	of	May	31,	2020 and	May	26,	2019,	and	the	results	of	its	operations	and	its	cash	flows	for	each	of	the	fiscal	years	in	the	three-year	period	ended	May	31,	2020,	in	conformity	with	U.S. generally	accepted	accounting	principles.	Also	in	our	opinion,	the	Company	maintained,	in	all	material	respects,	effective	internal	control	over	financial	reporting	as	of May	31,	2020	based	on	criteria	established	in	Internal	Control	–	Integrated	Framework	(2013)	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway Commission.

# Change	in	Accounting	Principle

As	discussed	in	Note	2	to	the	consolidated	financial	statements,	the	Company	has	changed	its	method	of	accounting	for	leases	as	of	May	27,	2019	due	to	the	adoption	of Accounting	Standards	Update	2016-02,	Leases	(Topic	842),	and	related	amendments.

# Basis	for	Opinions

The	Company's	management	is	responsible	for	these	consolidated	financial	statements,	for	maintaining	effective	internal	control	over	financial	reporting,	and	for	its assessment	of	the	effectiveness	of	internal	control	over	financial	reporting,	included	in	the	accompanying	Management's	Report	on	Internal	Control	over	Financial Reporting.	Our	responsibility	is	to	express	an	opinion	on	the	Company's	consolidated	financial	statements	and	an	opinion	on	the	Company's	internal	control	over financial	reporting	based	on	our	audits.	We	are	a	public	accounting	firm	registered	with	the	Public	Company	Accounting	Oversight	Board	(United	States)	("PCAOB") and	are	required	to	be	independent	with	respect	to	the	Company	in	accordance	with	the	U.S.	federal	securities	laws	and	the	applicable	rules	and	regulations	of	the Securities	and	Exchange	Commission	and	the	PCAOB.

We	conducted	our	audits	in	accordance	with	the	standards	of	the	PCAOB.	Those	standards	require	that	we	plan	and	perform	the	audits	to	obtain	reasonable	assurance about	whether	the	consolidated	financial	statements	are	free	of	material	misstatement,	whether	due	to	error	or	fraud,	and	whether	effective	internal	control	over	financial reporting	was	maintained	in	all	material	respects.

Our	audits	of	the	consolidated	financial	statements	included	performing	procedures	to	assess	the	risks	of	material	misstatement	of	the	consolidated	financial	statements, whether	due	to	error	or	fraud,	and	performing	procedures	that	respond	to	those	risks.	Such	procedures	included	examining,	on	a	test	basis,	evidence	regarding	the amounts	and	disclosures	in	the	consolidated	financial	statements.	Our	audits	also	included	evaluating	the	accounting	principles	used	and	significant	estimates	made	by management,	as	well	as	evaluating	the	overall	presentation	of	the	consolidated	financial	statements.	Our	audit	of	internal	control	over	financial	reporting	included obtaining	an	understanding	of	internal	control	over	financial	reporting,	assessing	the	risk	that	a	material	weakness	exists,	and	testing	and	evaluating	the	design	and operating	effectiveness	of	internal	control	based	on	the	assessed	risk.	Our	audits	also	included	performing	such	other	procedures	as	we	considered	necessary	in	the circumstances.	We	believe	that	our	audits	provide	a	reasonable	basis	for	our	opinions.

# Definition	and	Limitations	of	Internal	Control	Over	Financial	Reporting

A	company's	internal	control	over	financial	reporting	is	a	process	designed	to	provide	reasonable	assurance	regarding	the	reliability	of	financial	reporting	and	the preparation	of	financial	statements	for	external	purposes	in	accordance	with	generally	accepted	accounting	principles.	A	company's	internal	control	over	financial reporting	includes	those	policies	and	procedures	that	(1)	pertain	to	the	maintenance	of	records	that,	in	reasonable	detail,	accurately	and	fairly	reflect	the	transactions	and dispositions	of	the	assets	of	the	company;	(2)	provide	reasonable	assurance	that	transactions	are	recorded	as	necessary	to	permit	preparation	of	financial	statements	in accordance	with	generally	accepted	accounting	principles,	and	that	receipts	and	expenditures	of	the	company	are	being	made	only	in	accordance	with	authorizations	of management	 and	 directors	 of	 the	 company;	 and	 (3)	 provide	 reasonable	 assurance	 regarding	 prevention	 or	 timely	 detection	 of	 unauthorized	 acquisition,	 use,	 or disposition	of	the	company's	assets	that	could	have	a	material	effect	on	the	financial	statements.

Because	of	its	inherent	limitations,	internal	control	over	financial	reporting	may	not	prevent	or	detect	misstatements.	Also,	projections	of	any	evaluation	of	effectiveness to	future	periods	are	subject	to	the	risk	that	controls	may	become	inadequate	because	of	changes	in	conditions,	or	that	the	degree	of	compliance	with	the	policies	or procedures	may	deteriorate.

# Critical	Audit	Matter

The	critical	audit	matter	communicated	below	is	a	matter	arising	from	the	current	period	audit	of	the	consolidated	financial	statements	that	was	communicated	or required	to	be	communicated	to	the	audit	committee	and	that:	(1)	relates	to	accounts	or	disclosures	that	are	material	to	the	consolidated	financial	statements	and	(2) involved	our	especially	challenging,	subjective,	or	complex	judgments.	The	communication	of	a	critical	audit	matter	does	not	alter	in	any	way	our	opinion	on	the consolidated	financial	statements,	taken	as	a	whole,	and	we	are	not,	by	communicating	the	critical	audit	matter	below,	providing	a	separate	opinion	on	the	critical	audit matter	or	on	the	accounts	or	disclosures	to	which	it	relates.

# Evaluation	of	valuation	of	goodwill	and	brands	and	other	indefinite-lived	intangible	assets

As	discussed	in	Note	6	to	the	consolidated	financial	statements,	the	goodwill	and	brand	and	other	indefinite-lived	intangibles	balances	as	of	May	31,	2020	were $13,923.2	million	and	$6,561.4	million,	respectively.	The	impairment	tests	for	these	assets,	which	are	performed	annually	and	whenever	events	or	changes	in circumstances	indicate	that	impairment	may	have	occurred,	require	the	Company	to	estimate	the	fair	value	of	the	reporting	units	to	which	goodwill	is	assigned	as well	as	the	brand	and	other	indefinite-lived	intangible	assets.	The	fair	value	estimates	are	derived	from	discounted	cash	flow	analyses	that	require	the	Company	to make	judgments	about	highly	subjective	matters,	including	future	operating	results,	including	revenue	growth	rates	and	operating	margins,	and	an	estimate	of	the discount	rates	and	royalty	rates.

We	identified	the	evaluation	of	valuation	of	goodwill	and	brands	and	other	indefinite-lived	intangible	assets	as	a	critical	audit	matter.	There	was	a	significant	degree of	judgment	required	in	evaluating	audit	evidence,	which	consists	primarily	of	forward	looking	assumptions	about	future	operating	results,	specifically	the	revenue growth	rates,	operating	margins,	royalty	rates	and	subjective	inputs	used	to	estimate	the	discount	rates.

The	primary	procedures	we	performed	to	address	this	critical	audit	matter	included	the	following.	We	evaluated	the	design	and	tested	the	operating	effectiveness	of internal	controls	related	to	the	critical	audit	matter.	This	included	controls	related	to	the	assumptions	about	future	operating	results	and	the	discount	and	royalty	rates used	to	measure	the	reporting	unit	and	brand	and	other	intangible	fair	values.	We	performed	sensitivity	analyses	over	the	revenue	growth	rates,	operating	margins, brand	royalty	rates	and	discount	rates	to	assess	the	impact	of	other	points	within	a	range	of	potential	assumptions.	We	evaluated	the	revenue	growth	rates	and operating	margin	assumptions	by	comparing	them	to	recent	financial	performance	and	external	market	and	industry	data.	We	evaluated	whether	these	assumptions were	consistent	with	evidence	obtained	in	other	areas	of	the	audit.	Professionals	with	specialized	skill	and	knowledge	were	used	to	assist	in	the	evaluation	of	the Company's	discount	rates	and	royalty	rates	by	comparing	them	against	rate	ranges	that	were	independently	developed	using	publicly	available	market	data	for comparable	entities.

# /s/	KPMG	LLP

We	have	served	as	the	Company's	auditor	since	1928.

Minneapolis,	Minnesota July	2,	2020

# Consolidated	Statements	of	Earnings

# GENERAL	MILLS,	INC.	AND	SUBSIDIARIES

(In	Millions,	Except	per	Share	Data)

|  | 2020 | 2019 | 2018 |
| :--- | :--- | :--- | :--- |
| Net\tsales | $17,626.6 | \t $16,865.2 | \t$15,740.4 |
| Cost\tof\tsales | 11,496.7 | 11,108.4 | 10,304.8 |
| Selling,\tgeneral,\tand\tadministrative\texpenses | 3,151.6 | 2,935.8 | 2,850.1 |
| Divestitures\tloss | - | 30.0 | - |
| Restructuring,\timpairment,\tand\tother\texit\tcosts | 24.4 | 275.1 | 165.6 |
| Operating\tprofit | 2,953.9 | 2,515.9 | 2,419.9 |
| Benefit\tplan\tnon-service\tincome | (112.8) | (87.9) | (89.4) |
| Interest,\tnet | 466.5 | 521.8 | 373.7 |
| Earnings\tbefore\tincome\ttaxes\tand\tafter-tax\tearnings\tfrom\tjoint\tventures | 2,600.2 | 2,082.0 | 2,135.6 |
| Income\ttaxes | 480.5 | 367.8 | 57.3 |
| After-tax\tearnings\tfrom\tjoint\tventures | 91.1 | 72.0 | 84.7 |
| Net\tearnings,\tincluding\tearnings\tattributable\tto\tredeemable\tand\tnoncontrolling\tinterests | 2,210.8 | 1,786.2 | 2,163.0 |
| Net\tearnings\tattributable\tto\tredeemable\tand\tnoncontrolling\tinterests | 29.6 | 33.5 | 32.0 |
| Net\tearnings\tattributable\tto\tGeneral\tMills | $2,181.2 | \t $1,752.7 | \t$2,131.0 |
| Earnings\tper\tshare\t-\tbasic | $3.59 | \t $2.92 | \t$3.69 |
| Earnings\tper\tshare\t-\tdiluted | $3.56 | \t $2.90 | \t$3.64 |
| Dividends\tper\tshare | $1.96 | \t $1.96 | \t$1.96 |

See	accompanying	notes	to	consolidated	financial	statements.

# Consolidated	Statements	of	Comprehensive	Income

(In	Millions)

|  | 2020 | 2019 | 2018 |
| :--- | :--- | :--- | :--- |
| Net\tearnings,\tincluding\tearnings\tattributable\tto\tredeemable\tand\tnoncontrolling\tinterests | $2,210.8 | \t $1,786.2 | \t$2,163.0 |
| Other\tcomprehensive\tincome\t(loss),\tnet\tof\ttax: |  |  |  |
| Foreign\tcurrency\ttranslation | (169.1) | (82.8) | (37.0) |
| Net\tactuarial\t(loss)\tincome | (224.6) | (253.4) | 140.1 |
| Other\tfair\tvalue\tchanges: |  |  |  |
| Securities | - | - | 1.2 |
| Hedge\tderivatives | 3.2 | 12.1 | (50.8) |
| Reclassification\tto\tearnings: |  |  |  |
| Securities | - | (2.0) | (5.1) |
| Hedge\tderivatives | 4.1 | 0.9 | 17.4 |
| Amortization\tof\tlosses\tand\tprior\tservice\tcosts | 77.9 | 84.6 | 117.6 |
| Other\tcomprehensive\t(loss)\tincome,\tnet\tof\ttax | (308.5) | (240.6) | 183.4 |
| Total\tcomprehensive\tincome | 1,902.3 | 1,545.6 | 2,346.4 |
| Comprehensive\tincome\t(loss)\tattributable\tto\tredeemable\tand\tnoncontrolling\tinterests | 10.1 | (10.7) | 70.5 |
| Comprehensive\tincome\tattributable\tto\tGeneral\tMills | $1,892.2 | $1,556.3 | $2,275.9 |

# Consolidated	Balance	Sheets

# (In	Millions,	Except	Par	Value)

|  | May	31,	2020 | May	26,	2019 |
| :--- | :--- | :--- |
| ASSETS |  |  |
| Current\tassets: |  |  |
| Cash\tand\tcash\tequivalents | $1,677.8 | $450.0 |
| Receivables | 1,615.1 | 1,679.7 |
| Inventories | 1,426.3 | 1,559.3 |
| Prepaid\texpenses\tand\tother\tcurrent\tassets | 402.1 | 497.5 |
| Total\tcurrent\tassets | 5,121.3 | 4,186.5 |
| Land,\tbuildings,\tand\tequipment | 3,580.6 | 3,787.2 |
| Goodwill | 13,923.2 | 13,995.8 |
| Other\tintangible\tassets | 7,095.8 | 7,166.8 |
| Other\tassets | 1,085.8 | 974.9 |
| Total\tassets | $30,806.7 | $30,111.2 |
| LIABILITIES\tAND\tEQUITY |  |  |
| Current\tliabilities: |  |  |
| Accounts\tpayable | $3,247.7 | $2,854.1 |
| Current\tportion\tof\tlong-term\tdebt | 2,331.5 | 1,396.5 |
| Notes\tpayable | 279.0 | 1,468.7 |
| Other\tcurrent\tliabilities | 1,633.3 | 1,367.8 |
| Total\tcurrent\tliabilities | 7,491.5 | 7,087.1 |
| Long-term\tdebt | 10,929.0 | 11,624.8 |
| Deferred\tincome\ttaxes | 1,947.1 | 2,031.0 |
| Other\tliabilities | 1,545.0 | 1,448.9 |
| Total\tliabilities | 21,912.6 | 22,191.8 |
| Redeemable\tinterest | 544.6 | 551.7 |
| Stockholders'\tequity: |  |  |
| Common\tstock,\t754.6\tshares\tissued,\t$0.10\tpar\tvalue | 75.5 | 75.5 |
| Additional\tpaid-in\tcapital | 1,348.6 | 1,386.7 |
| Retained\tearnings | 15,982.1 | 14,996.7 |
|  | (6,433.3) | (6,779.0) |
| Accumulated\tother\tcomprehensive\tloss | (2,914.4) | (2,625.4) |
| Total\tstockholders'\tequity | 8,058.5 | 7,054.5 |
| Noncontrolling\tinterests | 291.0 | 313.2 |
| Total\tequity | 8,349.5 | 7,367.7 |
| Total\tliabilities\tand\tequity | $30,806.7 | $30,111.2 |

# Consolidated	Statements	of	Total	Equity	and	Redeemable	Interest

|  |  | 2020 |  | 2019 | 2018 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Shares | Amount | Shares | Amount | Shares | Amount |
| Total\tequity,\tbeginning\tbalance |  | $7,367.7 |  | $6,492.4 | $4,685.5 | $4,685.5 |
| Common\tstock | 754.6 | 75.5 | 754.6 | 75.5 | 754.6 | 75.5 |
| Additional\tpaid-in\tcapital: |  |  |  |  |  |  |
| Beginning\tbalance |  | 1,386.7 |  | 1,202.5 |  | 1,120.9 |
| Shares\tissued |  | - |  | - |  | (39.1) |
| Stock\tcompensation\tplans |  | (12.1) |  | (96.4) |  | (57.9) |
| Unearned\tcompensation\trelated\tto\tstock\tunit\tawards |  | (85.7) |  | (71.3) |  | (58.1) |
| Earned\tcompensation |  | 92.8 |  | 82.8 |  | 77.0 |
| (Increase)\tdecrease\tin\tredemption\tvalue\tof\tredeemable\tinterest |  | (33.1) |  | 269.1 |  | 159.7 |
| Ending\tbalance |  | 1,348.6 |  | 1,386.7 |  | 1,202.5 |
| Retained\tearnings: |  |  |  |  |  |  |
| Beginning\tbalance |  | 14,996.7 |  | 14,459.6 |  | 13,138.9 |
| Comprehensive\tincome |  | 2,181.2 |  | 1,752.7 |  | 2,131.0 |
| Cash\tdividends\tdeclared\t($1.96,\t$1.96,\tand\t$1.96\tper\tshare) |  | (1,195.8) |  | (1,181.7) |  | (1,139.7) |
| Reclassification\tof\tcertain\tincome\ttax\teffects |  | - |  | - |  | 329.4 |
| Adoption\tof\trevenue\trecognition\taccounting\trequirements |  | - |  | (33.9) |  | - |
| Ending\tbalance |  | 15,982.1 |  | 14,996.7 |  | 14,459.6 |
| Common\tstock\tin\ttreasury: |  |  |  |  |  |  |
| Beginning\tbalance | (152.7) | (6,779.0) | (161.5) | (7,167.5) | (177.7) | (7,762.9) |
| Shares\tpurchased | (0.1) | (3.4) | - | (1.1) | (10.9) | (601.6) |
| Shares\tissued | - | - | - | - | 22.7 | 1,009.0 |
| Stock\tcompensation\tplans | 8.0 | 349.1 | 8.8 | 389.6 | 4.4 | 188.0 |
| Ending\tbalance | (144.8) | (6,433.3) | (152.7) | (6,779.0) | (161.5) | (7,167.5) |
| Accumulated\tother\tcomprehensive\tloss: |  |  |  |  |  |  |
| Beginning\tbalance |  | (2,625.4) |  | (2,429.0) |  | (2,244.5) |
| Comprehensive\t(loss)\tincome |  | (289.0) |  | (196.4) |  | 144.9 |
| Reclassification\tof\tcertain\tincome\ttax\teffects |  | - |  | - |  | (329.4) |
| Ending\tbalance |  | (2,914.4) |  | (2,625.4) |  | (2,429.0) |
| Noncontrolling\tinterests: |  |  |  |  |  |  |
| Beginning\tbalance |  | 313.2 |  | 351.3 |  | 357.6 |
| Comprehensive\tincome |  | 10.3 |  | 0.4 |  | 26.9 |
| Distributions\tto\tredeemable\tand\tnoncontrolling\tinterest\tholders |  | (32.5) |  | (38.5) |  | (33.2) |
| Ending\tbalance |  | 291.0 |  | 313.2 |  | 351.3 |
| Total\tequity,\tending\tbalance |  | $8,349.5 |  | $7,367.7 | $6,492.4 | $6,492.4 |
| Redeemable\tinterest: |  |  |  |  |  |  |
| Beginning\tbalance |  | 551.7 |  | 776.2 |  | 910.9 |
| Comprehensive\t(loss)\tincome |  | (0.2) |  | (11.1) |  | 43.6 |
| Increase\tin\tinvestment\tin\tredeemable\tinterest |  | - |  | 55.7 |  | - |
| Increase\t(decrease)\tin\tredemption\tvalue\tof\tredeemable\tinterest |  | 33.1 |  | (269.1) |  | (159.7) |
| Distributions\tto\tredeemable\tand\tnoncontrolling\tinterest\tholders |  | (40.0) |  | - |  | (18.6) |
| Ending\tbalance |  | $544.6 |  | $551.7 | $776.2 | $776.2 |

# Consolidated	Statements	of	Cash	Flows

|  | 2020 | 2019 | 2018 |
| :--- | :--- | :--- | :--- |
| Cash\tFlows\t-\tOperating\tActivities |  |  |  |
| Net\tearnings,\tincluding\tearnings\tattributable\tto\tredeemable\tand\tnoncontrolling\tinterests | $2,210.8 | $1,786.2 | $2,163.0 |
| Adjustments\tto\treconcile\tnet\tearnings\tto\tnet\tcash\tprovided\tby\toperating\tactivities: |  |  |  |
| Depreciation\tand\tamortization | 594.7 | 620.1 | 618.8 |
| After-tax\tearnings\tfrom\tjoint\tventures | (91.1) | (72.0) | (84.7) |
| Distributions\tof\tearnings\tfrom\tjoint\tventures | 76.5 | 86.7 | 113.2 |
| Stock-based\tcompensation | 94.9 | 84.9 | 77.0 |
| Deferred\tincome\ttaxes | (29.6) | 93.5 | (504.3) |
| Pension\tand\tother\tpostretirement\tbenefit\tplan\tcontributions | (31.1) | (28.8) | (31.8) |
| Pension\tand\tother\tpostretirement\tbenefit\tplan\tcosts | (32.3) | 6.1 | 4.6 |
| Divestitures\tloss | - | 30.0 | - |
| Restructuring,\timpairment,\tand\tother\texit\tcosts | 43.6 | 235.7 | 126.0 |
| Changes\tin\tcurrent\tassets\tand\tliabilities,\texcluding\tthe\teffects\tof\tacquisitions\tand\tdivestitures | 793.9 | (7.5) | 542.1 |
| Other,\tnet | 45.9 | (27.9) | (182.9) |
| Net\tcash\tprovided\tby\toperating\tactivities | 3,676.2 | 2,807.0 | 2,841.0 |
| Cash\tFlows\t-\tInvesting\tActivities |  |  |  |
| Purchases\tof\tland,\tbuildings,\tand\tequipment | (460.8) | (537.6) | (622.7) |
| Acquisition,\tnet\tof\tcash\tacquired | - | - | (8,035.8) |
| Investments\tin\taffiliates,\tnet | (48.0) | 0.1 | (17.3) |
| Proceeds\tfrom\tdisposal\tof\tland,\tbuildings,\tand\tequipment | 1.7 | 14.3 | 1.4 |
| Proceeds\tfrom\tdivestitures | - | 26.4 | - |
| Other,\tnet | 20.9 | (59.7) | (11.0) |
| Net\tcash\tused\tby\tinvesting\tactivities | (486.2) | (556.5) | (8,685.4) |
| Cash\tFlows\t-\tFinancing\tActivities |  |  |  |
| Change\tin\tnotes\tpayable | (1,158.6) | (66.3) | 327.5 |
| Issuance\tof\tlong-term\tdebt | 1,638.1 | 339.1 | 6,550.0 |
| Payment\tof\tlong-term\tdebt | (1,396.7) | (1,493.8) | (600.1) |
| Proceeds\tfrom\tcommon\tstock\tissued\ton\texercised\toptions | 263.4 | 241.4 | 99.3 |
| Proceeds\tfrom\tcommon\tstock\tissued | - | - | 969.9 |
| Purchases\tof\tcommon\tstock\tfor\ttreasury | (3.4) | (1.1) | (601.6) |
| Dividends\tpaid | (1,195.8) | (1,181.7) | (1,139.7) |
| Investments\tin\tredeemable\tinterest | - | 55.7 | - |
| Distributions\tto\tnoncontrolling\tand\tredeemable\tinterest\tholders | (72.5) | (38.5) | (51.8) |
| Other,\tnet | (16.0) | (31.2) | (108.0) |
| Net\tcash\t(used)\tprovided\tby\tfinancing\tactivities | (1,941.5) | (2,176.4) | 5,445.5 |
| Effect\tof\texchange\trate\tchanges\ton\tcash\tand\tcash\tequivalents | (20.7) | (23.1) | 31.8 |
| Increase\t(decrease)\tin\tcash\tand\tcash\tequivalents | 1,227.8 | 51.0 | (367.1) |
| Cash\tand\tcash\tequivalents\t-\tbeginning\tof\tyear | 450.0 | 399.0 | 766.1 |
| Cash\tand\tcash\tequivalents\t-\tend\tof\tyear | $1,677.8 | $450.0 | $399.0 |
| Cash\tflow\tfrom\tchanges\tin\tcurrent\tassets\tand\tliabilities,\texcluding\tthe\teffects\tof\tacquisitions\tand\tdivestitures: |  |  |  |
| Receivables | $37.9 | $(42.7) | $(122.7) |
| Inventories | 103.1 | 53.7 | 15.6 |
| Prepaid\texpenses\tand\tother\tcurrent\tassets | 94.2 | (114.3) | (10.7) |
| Accounts\tpayable | 392.5 | 162.4 | 575.3 |
| Other\tcurrent\tliabilities | 166.2 | (66.6) | 84.6 |
| Changes\tin\tcurrent\tassets\tand\tliabilities | $793.9 | $(7.5) | $542.1 |

# Notes	to	Consolidated	Financial	Statements

# NOTE	1.	BASIS	OF	PRESENTATION	AND	RECLASSIFICATIONS

# Basis	of	Presentation

Our	Consolidated	Financial	Statements	include	the	accounts	of	General	Mills,	Inc.	and	all	subsidiaries	in	which	we	have	a	controlling	financial	interest.	Intercompany transactions	and	accounts,	including	any	noncontrolling	and	redeemable	interests'	share	of	those	transactions,	are	eliminated	in	consolidation.

Our	fiscal	year	ends	on	the	last	Sunday	in	May.	Fiscal	year	2020	consisted	of	53	weeks,	while	fiscal	years	2019	and	2018	consisted	of	52	weeks.

Certain	reclassifications	to	our	previously	reported	financial	information	have	been	made	to	conform	to	the	current	period	presentation.	See	Note	2	for	additional information.

# Change	in	Reporting	Period

As	part	of	a	long-term	plan	to	conform	the	fiscal	year	ends	of	all	our	operations,	in	fiscal	2020	we	changed	the	reporting	period	of	our	Pet	segment	from	an	April	fiscal year-end	to	a	May	fiscal	year-end	to	match	our	fiscal	calendar.	Accordingly,	our	fiscal	2020	results	include	13	months	of	Pet	segment	results	compared	to	12	months	in fiscal	2019.	The	impact	of	this	change	was	not	material	to	our	consolidated	results	of	operations	and,	therefore,	we	did	not	restate	prior	period	financial	statements	for comparability.	Our	India	business	is	on	an	April	fiscal	year	end.

# NOTE	2.	SUMMARY	OF	SIGNIFICANT	ACCOUNTING	POLICIES

# Cash	and	Cash	Equivalents

We	consider	all	investments	purchased	with	an	original	maturity	of	three	months	or	less	to	be	cash	equivalents.

# Inventories

All	inventories	in	the	United	States	other	than	grain	are	valued	at	the	lower	of	cost,	using	the	last-in,	first-out	(LIFO)	method,	or	market.	Grain	inventories	are	valued	at net	realizable	value,	and	all	related	cash	contracts	and	derivatives	are	valued	at	fair	value,	with	all	net	changes	in	value	recorded	in	earnings	currently.

Inventories	outside	of	the	United	States	are	generally	valued	at	the	lower	of	cost,	using	the	first-in,	first-out	(FIFO)	method,	or	net	realizable	value.

Shipping	costs	associated	with	the	distribution	of	finished	product	to	our	customers	are	recorded	as	cost	of	sales,	and	are	recognized	when	the	related	finished	product	is shipped	to	and	accepted	by	the	customer.

# Land,	Buildings,	Equipment,	and	Depreciation

Land	is	recorded	at	historical	cost.	Buildings	and	equipment,	including	capitalized	interest	and	internal	engineering	costs,	are	recorded	at	cost	and	depreciated	over estimated	useful	lives,	primarily	using	the	straight-line	method.	Ordinary	maintenance	and	repairs	are	charged	to	cost	of	sales.	Buildings	are	usually	depreciated	over	40 years,	and	equipment,	furniture,	and	software	are	usually	depreciated	over	3	to	10	years.	Fully	depreciated	assets	are	retained	in	buildings	and	equipment	until	disposal. When	an	item	is	sold	or	retired,	the	accounts	are	relieved	of	its	cost	and	related	accumulated	depreciation	and	the	resulting	gains	and	losses,	if	any,	are	recognized	in earnings.	As	of	May	31,	2020,	assets	held	for	sale	were	insignificant.

Long-lived	assets	are	reviewed	for	impairment	whenever	events	or	changes	in	circumstances	indicate	that	the	carrying	amount	of	an	asset	(or	asset	group)	may	not	be recoverable.	An	impairment	loss	would	be	recognized	when	estimated	undiscounted	future	cash	flows	from	the	operation	and	disposition	of	the	asset	group	are	less	than the	carrying	amount	of	the	asset	group.	Asset	groups	have	identifiable	cash	flows	and	are	largely	independent	of	other	asset	groups.	Measurement	of	an	impairment	loss would	be	based	on	the	excess	of	the	carrying	amount	of	the	asset	group	over	its	fair	value.	Fair	value	is	measured	using	a	discounted	cash	flow	model	or	independent appraisals,	as	appropriate.

# Goodwill	and	Other	Intangible	Assets

Goodwill	is	not	subject	to	amortization	and	is	tested	for	impairment	annually	and	whenever	events	or	changes	in	circumstances	indicate	that	impairment	may	have occurred.	We	perform	our	annual	goodwill	and	indefinite-lived	intangible	assets	impairment	test	as	of	the	first	day	of	the	second	quarter	of	the	fiscal	year.	Impairment testing	is	performed	for	each	of	our	reporting	units.	We	compare	the	carrying	value	of	a	reporting	unit,	including	goodwill,	to	the	fair	value	of	the	unit.	Carrying	value	is based	on	the	assets	and	liabilities	associated	with	the	operations	of	that	reporting	unit,	which	often	requires	allocation	of	shared	or	corporate	items	among	reporting units.	If	the	carrying	amount	of	a	reporting	unit	exceeds	its	fair	value,	impairment	has	occurred.	We	recognize	an 53

impairment	charge	for	the	amount	by	which	the	carrying	amount	of	the	reporting	unit	exceeds	its	fair	value	up	to	the	total	amount	of	goodwill	allocated	to	the	reporting unit.	Our	estimates	of	fair	value	are	determined	based	on	a	discounted	cash	flow	model.	Growth	rates	for	sales	and	profits	are	determined	using	inputs	from	our	long- range	planning	process.	We	also	make	estimates	of	discount	rates,	perpetuity	growth	assumptions,	market	comparables,	and	other	factors.

We	evaluate	the	useful	lives	of	our	other	intangible	assets,	mainly	brands,	to	determine	if	they	are	finite	or	indefinite-lived.	Reaching	a	determination	on	useful	life requires	significant	judgments	and	assumptions	regarding	the	future	effects	of	obsolescence,	demand,	competition,	other	economic	factors	(such	as	the	stability	of	the industry,	 known	 technological	 advances,	 legislative	 action	 that	 results	 in	 an	 uncertain	 or	 changing	 regulatory	 environment,	 and	 expected	 changes	 in	 distribution channels),	the	level	of	required	maintenance	expenditures,	and	the	expected	lives	of	other	related	groups	of	assets.	Intangible	assets	that	are	deemed	to	have	finite	lives are	amortized	on	a	straight-line	basis,	over	their	useful	lives,	generally	ranging	from	4	to	30	years.

Our	indefinite-lived	intangible	assets,	mainly	intangible	assets	primarily	associated	with	the	Blue	Buffalo,	Pillsbury,	Totino's,	Yoplait,	Old	El	Paso,	Progresso,	Annie's, Häagen-Dazs,	and	Yoki	brands,	are	also	tested	for	impairment	annually	and	whenever	events	or	changes	in	circumstances	indicate	that	their	carrying	value	may	not	be recoverable.	Our	estimate	of	the	fair	value	of	the	brands	is	based	on	a	discounted	cash	flow	model	using	inputs	which	included	projected	revenues	from	our	long-range plan,	assumed	royalty	rates	that	could	be	payable	if	we	did	not	own	the	brands,	and	a	discount	rate.

Our	finite-lived	intangible	assets,	primarily	acquired	franchise	agreements	and	customer	relationships,	are	reviewed	for	impairment	whenever	events	or	changes	in circumstances	indicate	that	the	carrying	amount	of	an	asset	may	not	be	recoverable.	An	impairment	loss	would	be	recognized	when	estimated	undiscounted	future	cash flows	from	the	operation	and	disposition	of	the	asset	are	less	than	the	carrying	amount	of	the	asset.	Assets	generally	have	identifiable	cash	flows	and	are	largely independent	of	other	assets.	Measurement	of	an	impairment	loss	would	be	based	on	the	excess	of	the	carrying	amount	of	the	asset	over	its	fair	value.	Fair	value	is measured	using	a	discounted	cash	flow	model	or	other	similar	valuation	model,	as	appropriate.

# Leases

We	determine	whether	an	arrangement	is	a	lease	at	inception.	When	our	lease	arrangements	include	lease	and	non-lease	components,	we	account	for	lease	and	non-lease components	(e.g.	common	area	maintenance)	separately	based	on	their	relative	standalone	prices.

Any	lease	arrangements	with	an	initial	term	of	12	months	or	less	are	not	recorded	on	our	Consolidated	Balance	Sheet,	and	we	recognize	lease	costs	for	these	lease arrangements	on	a	straight-line	basis	over	the	lease	term.	Many	of	our	lease	arrangements	provide	us	with	options	to	exercise	one	or	more	renewal	terms	or	to	terminate the	lease	arrangement.	We	include	these	options	when	we	are	reasonably	certain	to	exercise	them	in	the	lease	term	used	to	establish	our	right	of	use	assets	and	lease liabilities.	Generally,	our	lease	agreements	do	not	include	an	option	to	purchase	the	leased	asset,	residual	value	guarantees,	or	material	restrictive	covenants.

We	have	certain	lease	arrangements	with	variable	rental	payments.	Our	lease	arrangements	for	our	Häagen-Dazs	retail	shops	often	include	rental	payments	that	are	based on	a	percentage	of	retail	sales.	We	have	other	lease	arrangements	that	are	adjusted	periodically	based	on	an	inflation	index	or	rate.	The	future	variability	of	these payments	and	adjustments	are	unknown,	and	therefore	they	are	not	included	as	minimum	lease	payments	used	to	determine	our	right	of	use	assets	and	lease	liabilities. Variable	rental	payments	are	recognized	in	the	period	in	which	the	obligation	is	incurred.

As	 most	 of	 our	 lease	 arrangements	 do	 not	 provide	 an	 implicit	 interest	 rate,	 we	 apply	 an incremental	 borrowing rate	 based	 on the information	 available	 at the commencement	date	of	the	lease	arrangement	to	determine	the	present	value	of	lease	payments.

# Investments	in	Unconsolidated	Joint	Ventures

Our	investments	in	companies	over	which	we	have	the	ability	to	exercise	significant	influence	are	stated	at	cost	plus	our	share	of	undistributed	earnings	or	losses.	We receive	royalty	income	from	certain	joint	ventures,	incur	various	expenses	(primarily	research	and	development),	and	record	the	tax	impact	of	certain	joint	venture operations	that	are	structured	as	partnerships.	In	addition,	we	make	advances	to	our	joint	ventures	in	the	form	of	loans	or	capital	investments.	We	also	sell	certain	raw materials,	semi-finished	goods,	and	finished	goods	to	the	joint	ventures,	generally	at	market	prices.

In	addition,	we	assess	our	investments	in	our	joint	ventures	if	we	have	reason	to	believe	an	impairment	may	have	occurred	including,	but	not	limited	to,	as	a	result	of ongoing	 operating	 losses,	 projected	 decreases	 in	 earnings,	 increases	 in	 the	 weighted-average	 cost	 of	 capital,	 or	 significant	 business	 disruptions.	 The	 significant assumptions	used	to	estimate	fair	value	include	revenue	growth	and	profitability,	royalty	rates,	capital	spending,	depreciation	and	taxes,	foreign	currency	exchange	rates, and	a	discount	rate.	By	their	nature,	these	projections	and	assumptions	are	uncertain.	If	we	were	to	determine	the	current	fair	value	of	our	investment	was	less	than	the carrying	value	of	the	investment,	then	we	would	assess	if	the	shortfall	was	of	a	temporary	or	permanent	nature	and	write	down	the	investment	to	its	fair	value	if	we concluded	the	impairment	is	other	than	temporary.

We	have	a	51	percent	controlling	interest	in	Yoplait	SAS,	a	consolidated	entity.	Sodiaal	International	(Sodiaal)	holds	the	remaining	49 54

percent	interest	in	Yoplait	SAS.	Sodiaal	has	the	ability	to	put	all	or	a	portion	of	its	redeemable	interest	to	us	at	fair	value	once	per	year,	up	to	three	times	before December	2024.	This	put	option	requires	us	to	classify	Sodiaal's	interest	as	a	redeemable	interest	outside	of	equity	on	our	Consolidated	Balance	Sheets	for	as	long	as	the put	is	exercisable	by	Sodiaal.	When	the	put	is	no	longer	exercisable,	the	redeemable	interest	will	be	reclassified	to	noncontrolling	interests	on	our	Consolidated	Balance Sheets.	We	adjust	the	value	of	the	redeemable	interest	through	additional	paid-in	capital	on	our	Consolidated	Balance	Sheets	quarterly	to	the	redeemable	interest's redemption	 value,	 which	 approximates	 its	 fair	 value.	 The	 significant	 assumptions	 used	 to	 estimate	 the	 redemption	 value	 include	 projected	 revenue	 growth	 and profitability	from	our	long-range	plan,	capital	spending,	depreciation,	taxes,	foreign	currency	exchange	rates,	and	a	discount	rate.

Our	revenues	primarily	result	from	contracts	with	customers,	which	are	generally	short-term	and	have	a	single	performance	obligation	–	the	delivery	of	product.	We recognize	revenue	for	the	sale	of	packaged	foods	at	the	point	in	time	when	our	performance	obligation	has	been	satisfied	and	control	of	the	product	has	transferred	to	our customer,	which	generally	occurs	when	the	shipment	is	accepted	by	our	customer.	Sales	include	shipping	and	handling	charges	billed	to	the	customer	and	are	reported net	 of	 variable	 consideration	 and	 consideration	 payable	 to	 our	 customers,	 including	 trade	 promotion,	 consumer	 coupon	 redemption	 and	 other	 reductions	 to	 the transaction	price,	including	estimated	allowances	for	returns,	unsalable	product,	and	prompt	pay	discounts.	Sales,	use,	value-added,	and	other	excise	taxes	are	not included	in	revenue.	Trade	promotions	are	recorded	using	significant	judgment	of	estimated	participation	and	performance	levels	for	offered	programs	at	the	time	of sale.	Differences	between	estimated	and	actual	reductions	to	the	transaction	price	are	recognized	as	a	change	in	estimate	in	a	subsequent	period.	We	generally	do	not allow	a	right	of	return.	However,	on	a	limited	case-by-case	basis	with	prior	approval,	we	may	allow	customers	to	return	product.	In	limited	circumstances,	product returned	in	saleable	condition	is	resold	to	other	customers	or	outlets.	Receivables	from	customers	generally	do	not	bear	interest.	Payment	terms	and	collection	patterns vary	around	the	world	and	by	channel,	and	are	short-term,	and	as	such,	we	do	not	have	any	significant	financing	components.	Our	allowance	for	doubtful	accounts represents	our	estimate	of	probable	non-payments	and	credit	losses	in	our	existing	receivables,	as	determined	based	on	a	review	of	past	due	balances	and	other	specific account	data.	Account	balances	are	written	off	against	the	allowance	when	we	deem	the	amount	is	uncollectible.	Please	see	Note	17	for	a	disaggregation	of	our	revenue into	categories	that	depict	how	the	nature,	amount,	timing,	and	uncertainty	of	revenue	and	cash	flows	are	affected	by	economic	factors.	We	do	not	have	material	contract assets	or	liabilities	arising	from	our	contracts	with	customers.

# Environmental	Costs

Environmental	costs	relating	to	existing	conditions	caused	by	past	operations	that	do	not	contribute	to	current	or	future	revenues	are	expensed.	Liabilities	for	anticipated remediation	costs	are	recorded	on	an	undiscounted	basis	when	they	are	probable	and	reasonably	estimable,	generally	no	later	than	the	completion	of	feasibility	studies	or our	commitment	to	a	plan	of	action.

# Advertising	Production	Costs

We	expense	the	production	costs	of	advertising	the	first	time	that	the	advertising	takes	place.

All	 expenditures	 for	 research	 and	 development	 (R&D)	 are	 charged	 against	 earnings	 in	 the	 period	 incurred.	 R&D	 includes	 expenditures	 for	 new	 product	 and manufacturing	process	 innovation,	and	 the	annual	expenditures	are	comprised	primarily	of	 internal	salaries,	wages,	consulting,	and	supplies	attributable	 to	R&D activities.	Other	costs	include	depreciation	and	maintenance	of	research	facilities,	including	assets	at	facilities	that	are	engaged	in	pilot	plant	activities.

# Foreign	Currency	Translation

For	all	significant	foreign	operations,	the	functional	currency	is	the	local	currency.	Assets	and	liabilities	of	these	operations	are	translated	at	the	period-end	exchange rates.	Income	statement	accounts	are	translated	using	the	average	exchange	rates	prevailing	during	the	period.	Translation	adjustments	are	reflected	within	accumulated other	comprehensive	loss	(AOCI)	in	stockholders'	equity.	Gains	and	losses	from	foreign	currency	transactions	are	included	in	net	earnings	for	the	period,	except	for gains	and	losses	on	investments	in	subsidiaries	for	which	settlement	is	not	planned	for	the	foreseeable	future	and	foreign	exchange	gains	and	losses	on	instruments designated	as	net	investment	hedges.	These	gains	and	losses	are	recorded	in	AOCI.

# Derivative	Instruments

All	derivatives	are	recognized	on	our	Consolidated	Balance	Sheets	at	fair	value	based	on	quoted	market	prices	or	our	estimate	of	their	fair	value,	and	are	recorded	in either	current	or	noncurrent	assets	or	liabilities	based	on	their	maturity.	Changes	in	the	fair	values	of	derivatives	are	recorded	in	net	earnings	or	other	comprehensive income,	based	on	whether	the	instrument	is	designated	and	effective	as	a	hedge	transaction	and,	if	so,	the	type	of	hedge	transaction.	Gains	or	losses	on	derivative instruments	reported	in	AOCI	are	reclassified	to	earnings	in	the	period	the	hedged	item	affects	earnings.	If	the	underlying	hedged	transaction	ceases	to	exist,	any associated	amounts	reported	in	AOCI	are	reclassified	to	earnings	at	that	time.

We	generally	measure	compensation	expense	for	grants	of	restricted	stock	units	and	performance	share	units	using	the	value	of	a	share	of	our	stock	on	the	date	of	grant. We	estimate	the	value	of	stock	option	grants	using	a	Black-Scholes	valuation	model.	Generally,

stock-based	compensation	is	recognized	straight	line	over	the	vesting	period.	Our	stock-based	compensation	expense	is	recorded	in	selling,	general	and	administrative (SG&A)	expenses	and	cost	of	sales	in	our	Consolidated	Statements	of	Earnings	and	allocated	to	each	reportable	segment	in	our	segment	results.

Certain	equity-based	compensation	plans	contain	provisions	that	accelerate	vesting	of	awards	upon	retirement,	termination,	or	death	of	eligible	employees	and	directors. We	consider	a	stock-based	award	to	be	vested	when	the	employee's	or	director's	retention	of	the	award	is	no	longer	contingent	on	providing	subsequent	service. Accordingly,	the	related	compensation	cost	is	generally	recognized	immediately	for	awards	granted	to	retirement-eligible	individuals	or	over	the	period	from	the	grant date	to	the	date	retirement	eligibility	is	achieved,	if	less	than	the	stated	vesting	period.

We	report	the	benefits	of	tax	deductions	in	excess	of	recognized	compensation	cost	as	an	operating	cash	flow.

We	 sponsor	 several	 domestic	 and	 foreign	 defined	 benefit	 plans	 to	 provide	 pension,	 health	 care,	 and	 other	 welfare	 benefits	 to	 retired	 employees.	 Under	 certain circumstances,	we	also	provide	accruable	benefits,	primarily	severance,	to	former	or	inactive	employees	in	the	United	States,	Canada,	and	Mexico.	We	recognize	an obligation	for	any	of	these	benefits	that	vest	or	accumulate	with	service.	Postemployment	benefits	that	do	not	vest	or	accumulate	with	service	(such	as	severance	based solely	on	annual	pay	rather	than	years	of	service)	are	charged	to	expense	when	incurred.	Our	postemployment	benefit	plans	are	unfunded.

We	recognize	the	underfunded	or	overfunded	status	of	a	defined	benefit	pension	plan	as	an	asset	or	liability	and	recognize	changes	in	the	funded	status	in	the	year	in which	the	changes	occur	through	AOCI.

# Use	of	Estimates

Preparing	our	Consolidated	Financial	Statements	in	conformity	with	accounting	principles	generally	accepted	in	the	United	States	requires	us	to	make	estimates	and assumptions	that	affect	reported	amounts	of	assets	and	liabilities,	disclosures	of	contingent	assets	and	liabilities	at	the	date	of	the	financial	statements,	and	the	reported amounts	of	revenues	and	expenses	during	the	reporting	period.	These	estimates	include	our	accounting	for	revenue	recognition,	valuation	of	long-lived	assets,	intangible assets,	redeemable	interest,	stock-based	compensation,	income	taxes,	and	defined	benefit	pension,	other	postretirement	benefit	and	postemployment	benefit	plans. Actual	results	could	differ	from	our	estimates.

# New	Accounting	Standards

In	the	fourth	quarter	of	fiscal	2020,	we	adopted	new	accounting	requirements	related	to	the	annual	disclosure	requirements	for	defined	benefit	pension	and	other postretirement	benefit	plans.	The	new	standard	modifies	specific	disclosures	to	improve	usefulness	to	financial	statement	users.	We	adopted	the	requirements	of	the	new standard	using	a	retrospective	approach.	The	adoption	of	this	guidance	did	not	impact	our	results	of	operations	or	financial	position.

In	the	first	quarter	of	fiscal	2020,	we	adopted	new	accounting	requirements	for	hedge	accounting.	The	new	standard	amends	the	hedge	accounting	recognition	and presentation	requirements	to	better	align	an	entity's	risk	management	activities	and	financial	reporting.	The	new	standard	also	simplifies	the	application	of	hedge accounting	guidance.	The	adoption	did	not	have	a	material	impact	on	our	results	of	operations	or	financial	position.

In	the	first	quarter	of	fiscal	2020,	we	adopted	new	requirements	for	the	accounting,	presentation,	and	classification	of	leases.	This	results	in	certain	leases	being capitalized	as	a	right	of	use	asset	with	a	related	liability	on	our	Consolidated	Balance	Sheet.	We	performed	a	review	of	our	lease	portfolio,	implemented	lease	accounting software,	and	developed	a	centralized	business	process	with	corresponding	controls.	We	adopted	this	guidance	utilizing	the	cumulative	effect	adjustment	approach, which	 required	 application	 of	 the	 guidance	 at	 the	 adoption	 date,	 and	 elected	 certain	 practical	 expedients	 permitted	 under	 the	 transition	 guidance,	 including	 not reassessing	whether	existing	contracts	contain	leases	and	carrying	forward	the	historical	classification	of	those	leases.	In	addition,	we	elected	not	to	recognize	leases	with an	initial	term	of	12	months	or	less	on	our	Consolidated	Balance	Sheet	and	to	continue	our	historical	treatment	of	land	easements,	under	permitted	elections.	This guidance	did	not	have	a	material	impact	on	retained	earnings,	our	Consolidated	Statements	of	Earnings,	or	our	Consolidated	Statements	of	Cash	Flows.	See	Note	7	to the	Consolidated	Financial	Statements	for	additional	information	on	the	impact	to	our	Consolidated	Balance	Sheet.

In	the	first	quarter	of	fiscal	2019,	we	adopted	new	accounting	requirements	related	to	the	presentation	of	net	periodic	defined	benefit	pension	expense,	net	periodic postretirement	benefit	expense,	and	net	periodic	postemployment	benefit	expense	(collectively	"net	periodic	benefit	expense").	The	new	standard	requires	the	service cost	component	of	net	periodic	benefit	expense	to	be	recorded	in	the	same	line	items	as	other	employee	compensation	costs	within	our	Consolidated	Statements	of Earnings.	Other	components	of	net	periodic	benefit	expense	must	be	presented	separately	outside	of	operating	profit	in	our	Consolidated	Statements	of	Earnings.	In addition,	the	new	standard	requires	that	only	the	service	cost	component	of	net	periodic	benefit	expense	is	eligible	for	capitalization.	The	new	standard	requires retrospective	adoption	of	the	presentation	of	net	periodic	benefit	expense	and	prospective	application	of	the	capitalization	of	the	service	cost	component.	The	impact	of the	adoption	of	this	standard	on	our	results	of	operations	was	a	decrease	to	our	operating	profit	of	$87.9	million	and	$89.4	million	and	a	corresponding	increase	to benefit	plan	non-service	income	of	$87.9 56

million	and	$89.4	million	for	fiscal	2019	and	fiscal	2018,	respectively.	There	were	no	changes	to	our	reported	segment	operating	profit.

In	the	first	quarter	of	fiscal	2019,	we	adopted	new	accounting	requirements	for	the	recognition	of	revenue	from	contracts	with	customers.	Under	the	new	standard,	we apply	 a	 principles-based	 five	 step	 model	 to	 recognize	 revenue	 upon	 the	 transfer	 of	 control	 of	 promised	 goods	 to	 customers	 and	 in	 an	 amount	 that	 reflects	 the consideration	for	which	we	expect	 to	be	entitled	 to	 in	exchange	for	 those	goods.	We	did	not	 identify	any	material	differences	resulting	from	applying	 the	new requirements	to	our	revenue	contracts.	Additionally,	we	did	not	identify	any	significant	changes	to	our	business	processes,	systems,	and	controls	to	support	recognition and	disclosure	requirements	under	the	new	guidance.	We	adopted	the	requirements	of	the	new	standard	and	subsequent	amendments	to	all	contracts	in	the	first	quarter	of fiscal	2019	using	the	cumulative	effect	approach.	We	recorded	a	$33.9	million	cumulative	effect	adjustment	net	of	income	tax	effects	to	the	opening	balance	of	fiscal 2019	retained	earnings,	a	decrease	to	deferred	income	taxes	of	$11.4	million,	and	an	increase	to	other	current	liabilities	of	$45.3	million	related	to	the	timing	of recognition	of	certain	promotional	expenditures.

In	the	third	quarter	of	fiscal	2018,	we	adopted	new	accounting	requirements	that	codify	Securities	and	Exchange	Commission	(SEC)	Staff	Accounting	Bulletin	No.	118, as	it	relates	to	allowing	for	recognition	of	provisional	amounts	related	to	the	U.S.	Tax	Cuts	and	Jobs	Act	(TCJA)	in	the	event	that	the	accounting	is	not	complete	and	a reasonable	estimate	can	be	made.	Where	necessary	information	is	not	available,	prepared,	or	analyzed	to	determine	a	reasonable	estimate,	no	provisional	amount	should be	recorded.	The	guidance	allows	for	a	measurement	period	of	up	to	one	year	from	the	enactment	date	to	finalize	the	accounting	related	to	the	TCJA.	In	fiscal	2019,	we completed	our	accounting	for	the	tax	effects	of	the	TCJA.

In	the	third	quarter	of	fiscal	2018,	we	adopted	new	accounting	requirements	that	provide	the	option	to	reclassify	stranded	income	tax	effects	resulting	from	the	TCJA from	AOCI	to	retained	earnings.	We	elected	to	reclassify	the	stranded	income	tax	effects	of	the	TCJA	of	$ 329.4	million	from	AOCI	 to	retained	earnings.	This reclassification	consisted	of	deferred	taxes	originally	recorded	in	AOCI	that	exceeded	the	newly	enacted	federal	corporate	tax	rate.	The	new	accounting	requirements allowed	for	adjustments	to	reclassification	amounts	in	subsequent	periods	as	a	result	of	changes	to	the	provisional	amounts	recorded.

In	the	first	quarter	of	fiscal	2018,	we	adopted	new	requirements	for	the	accounting	and	presentation	of	stock-based	payments.	The	adoption	of	this	guidance	resulted	in the	prospective	recognition	of	realized	windfall	and	shortfall	tax	benefits	related	to	the	exercise	or	vesting	of	stock-based	awards	in	our	Consolidated	Statements	of Earnings	instead	of	additional	paid-in	capital	within	our	Consolidated	Balance	Sheets.	We	retrospectively	adopted	the	guidance	related	to	reclassification	of	realized windfall	tax	benefits,	which	resulted	in	reclassifications	of	cash	provided	by	financing	activities	to	operating	activities	in	our	Consolidated	Statements	of	Cash	Flows. Additionally,	we	retrospectively	adopted	the	guidance	related	to	reclassification	of	employee	tax	withholdings,	which	resulted	in	reclassifications	of	cash	used	by operating	activities	to	financing	activities	in	our	Consolidated	Statements	of	Cash	Flows.	Stock-based	compensation	expense	continues	to	reflect	estimated	forfeitures.

In	the	first	quarter	of	fiscal	2018,	we	adopted	new	accounting	requirements	that	permit	reporting	entities	to	measure	a	goodwill	impairment	loss	by	the	amount	by	which a	reporting	unit's	carrying	value	exceeds	the	reporting	unit's	fair	value.	Previously,	goodwill	impairment	losses	were	required	to	be	measured	by	determining	the	implied fair	value	of	goodwill.	The	adoption	of	this	guidance	did	not	impact	our	results	of	operations	or	financial	position.

# NOTE	3.	DIVESTITURES

During	the	third	quarter	of	fiscal	2019,	we	sold	our	La	Salteña	fresh	pasta	and	refrigerated	dough	business	in	Argentina,	and	recorded	a	pre-tax	loss	of	$35.4	million. During	the	fourth	quarter	of	fiscal	2019,	we	sold	our	yogurt	business	in	China	and	simultaneously	entered	into	a	new	Yoplait	license	agreement	with	the	purchaser	for their	use	of	the	Yoplait	brand.	We	recorded	a	pre-tax	gain	of	$5.4	million.

# NOTE	4.	RESTRUCTURING,	IMPAIRMENT,	AND	OTHER	EXIT	COSTS

# ASSET	IMPAIRMENTS

In	fiscal	2019,	we	recorded	a	$192.6	million	charge	related	to	the	impairment	of	our	Progresso,	Food	Should	Taste	Good,	and	Mountain	High	brand	intangible	assets	in restructuring,	impairment,	and	other	exit	costs.

In	fiscal	2019,	we	recorded	a	$14.8	million	charge	in	restructuring,	impairment,	and	other	exit	costs	related	to	the	impairment	of	certain	manufacturing	assets	in	our North	America	Retail	and	Asia	&	Latin	America	segments.

In	 fiscal	 2018,	 we	 recorded	 a	 $96.9	 million	 charge related to the impairment	 of	 our	Yoki,	 Mountain	 High, and	Immaculate	 Baking	 brand intangible	 assets in restructuring,	impairment,	and	other	exit	costs.

# RESTRUCTURING	INITIATIVES

We	view	our	restructuring	activities	as	actions	that	help	us	meet	our	long-term	growth	targets.	Activities	we	undertake	must	meet	internal	rate	of	return	and	net	present value	targets.	Each	restructuring	action	normally	takes	one	to	two	years	to	complete.	At	completion	(or	as	each	major	stage	is	completed	in	the	case	of	multi-year programs),	the	project	begins	to	deliver	cash	savings	and/or	reduced	depreciation.	These	activities	result	in	various	restructuring	costs,	including	asset	write-offs,	exit charges	including	severance,	contract	termination	fees,	and	decommissioning	and	other	costs.	Accelerated	depreciation	associated	with	restructured	assets,	as	used	in	the context	of	our	disclosures	regarding	restructuring	activity,	refers	to	the	increase	in	depreciation	expense	caused	by	shortening	the	useful	life	or	updating	the	salvage value	of	depreciable	fixed	assets	to	coincide	with	the	end	of	production	under	an	approved	restructuring	plan.	Any	impairment	of	the	asset	is	recognized	immediately	in the	period	the	plan	is	approved.

In	fiscal	2020,	we	did	not	undertake	any	new	restructuring	actions	and	recorded	$50.2	million	of	restructuring	charges	for	previously	announced	restructuring	actions.

In	fiscal	2019,	we	recorded	$77.6	million	of	restructuring	charges	primarily	related	to	approved	restructuring	actions	to	drive	efficiencies	in	targeted	areas	of	our	global supply	chain.	In	fiscal	2020,	we	increased	the	estimate	of	expected	severance	charges	by	$3	million	and	decreased	the	estimate	of	other	exit	costs	related	to	these	actions by	$4	million.	We	now	expect	to	spend	a	total	of	approximately	$24	million	of	cash	related	to	these	actions.	Certain	actions	are	subject	to	union	negotiations	and	works counsel	consultations,	where	required.	We	expect	these	actions	to	be	completed	by	the	end	of	fiscal	2022.	The	remaining	expense	to	be	incurred	is	approximately	$8 million	of	other	exit	costs.

We	paid	net	$6.6	million	of	cash	related	to	restructuring	actions	previously	announced	in	fiscal	2020,	compared	to	$49.3	million	in	fiscal	2019.

Charges	recorded	in	fiscal	2019	were	as	follows:

| Expense,	in	Millions |  |
| :--- | :--- |
| Global\tcost\tsavings\tinitiatives | $49.3 |
| Charges\tassociated\twith\trestructuring\tactions\tpreviously\tannounced | 33.4 |
| Total | $82.7 |

Restructuring	and	impairment	charges	and	project-related	costs	are	classified	in	our	Consolidated	Statements	of	Earnings	as	follows:

|  |  | Fiscal	Year |  |
| :--- | :--- | :--- | :--- |
| In\tMillions | 2020 | 2019 | 2018 |
| Cost\tof\tsales | $25.8 | $9.9 | $14.0 |
| Restructuring,\timpairment,\tand\tother\texit\tcosts | 24.4 | 275.1 | 165.6 |
| Total\trestructuring\tand\timpairment\tcharges | 50.2 | 285.0 | 179.6 |
| Project-related\tcosts\tclassified\tin\tcost\tof\tsales | $1.5 | $1.3 | $11.3 |

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

| In	Millions | Severance | Termination | Other	Exit	Costs | Total |
| :--- | :--- | :--- | :--- | :--- |
| Reserve\tbalance\tas\tof\tMay\t28,\t2017 | $81.8 | $0.7 | $2.5 | $85.0 |
| Fiscal\t2018\tcharges,\tincluding\tforeign\tcurrency\ttranslation | 40.8 | 0.2 | (0.7) | 40.3 |
| Utilized\tin\tfiscal\t2018 | (56.6) | (0.8) | (1.1) | (58.5) |
| Reserve\tbalance\tas\tof\tMay\t27,\t2018 | 66.0 | 0.1 | 0.7 | 66.8 |
| Fiscal\t2019\tcharges,\tincluding\tforeign\tcurrency\ttranslation | 7.7 | 2.5 | 1.4 | 11.6 |
| Utilized\tin\tfiscal\t2019 | (37.2) | (2.6) | (2.1) | (41.9) |
| Reserve\tbalance\tas\tof\tMay\t26,\t2019 | 36.5 | - | - | 36.5 |
| Fiscal\t2020\tcharges,\tincluding\tforeign\tcurrency\ttranslation | (5.0) | 0.8 | 1.7 | (2.5) |
| Utilized\tin\tfiscal\t2020 | (13.7) | (0.8) | (1.7) | (16.2) |
| Reserve\tbalance\tas\tof\tMay\t31,\t2020 | $17.8 | $- | $- | $17.8 |

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,	the	gain	or	loss	on	the	sale	of	restructured	assets,	and	the	write-off	of	spare	parts)	and	other	periodic	exit	costs	recognized	as	incurred,	as	those	items	are	not reflected	in	our	restructuring	and	other	exit	cost	reserves	on	our	Consolidated	Balance	Sheets.

# NOTE	5.	INVESTMENTS	IN	UNCONSOLIDATED	JOINT	VENTURES

We	have	a	50	percent	interest	in	Cereal	Partners	Worldwide	(CPW),	which	manufactures	and	markets	ready-to-eat	cereal	products	in	more	than	130	countries	outside	the United	States	and	Canada.	CPW	also	markets	cereal	bars	in	several	European	countries	and	manufactures	private	label	cereals	for	customers	in	the	United	Kingdom.	We have	guaranteed	a	portion	of	CPW's	debt	and	its	pension	obligation	in	the	United	Kingdom.

We	 also	 have	 a	50	percent interest in	Häagen-Dazs	Japan,	Inc.	(HDJ).	This joint	venture	manufactures	and	markets	Häagen-Dazs	ice	cream	products	and	frozen novelties.

Results	from	our	CPW	and	HDJ	joint	ventures	are	reported	for	the	12	months	ended	March	31.

Joint	venture	related	balance	sheet	activity	is	as	follows:

| In	Millions | May	31,	2020 | May	26,	2019 |
| :--- | :--- | :--- |
| Cumulative\tinvestments | $481.4 | $452.9 |
| Goodwill\tand\tother\tintangibles | 460.5 | 472.1 |
| Aggregate\tadvances\tincluded\tin\tcumulative\tinvestments | 279.5 | 249.0 |

Joint	venture	earnings	and	cash	flow	activity	is	as	follows:

|  |  | Fiscal	Year |  |
| :--- | :--- | :--- | :--- |
| In\tMillions | 2020 | 2019 | 2018 |
| Sales\tto\tjoint\tventures | $5.9 | $4.2 | $7.4 |
| Net\tadvances\t(repayments) | 48.0 | (0.1) | 17.3 |
| Dividends\treceived | 76.5 | 86.7 | 113.2 |

Summary	combined	financial	information	for	the	joint	ventures	on	a	100	percent	basis	is	as	follows:

|  |  | Fiscal	Year |  |
| :--- | :--- | :--- | :--- |
| In\tMillions | 2020 | 2019 | 2018 |
| Net\tsales: |  |  |  |
| CPW | $1,654.3 | $1,647.7 | $1,734.0 |
| HDJ | 391.3 | 396.2 | 430.4 |
| Total\tnet\tsales | 2,045.6 | 2,043.9 | 2,164.4 |
| Gross\tmargin | 785.3 | 744.4 | 853.6 |
| Earnings\tbefore\tincome\ttaxes | 214.0 | 155.4 | 216.2 |
| Earnings\tafter\tincome\ttaxes | 176.5 | 111.9 | 176.7 |

| In	Millions | May	31,	2020 | May	26,	2019 |
| :--- | :--- | :--- |
| Current\tassets | $870.0 | $895.6 |
| Noncurrent\tassets | 781.4 | 839.2 |
| Current\tliabilities | 1,365.6 | 1,517.3 |
| Noncurrent\tliabilities | 104.2 | 77.1 |

# NOTE	6.	GOODWILL	AND	OTHER	INTANGIBLE	ASSETS

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

| In	Millions | May	31,	2020 | May	26,	2019 |
| :--- | :--- | :--- |
| Goodwill | $13,923.2 | $13,995.8 |
| Other\tintangible\tassets: |  |  |
| Intangible\tassets\tnot\tsubject\tto\tamortization: |  |  |
| Brands\tand\tother\tindefinite-lived\tintangibles | 6,561.4 | 6,590.8 |
| Intangible\tassets\tsubject\tto\tamortization: |  |  |
| Franchise\tagreements,\tcustomer\trelationships,\tand\tother\tfinite-lived\tintangibles | 777.8 | 786.1 |
| Less\taccumulated\tamortization | (243.4) | (210.1) |
| Intangible\tassets\tsubject\tto\tamortization | 534.4 | 576.0 |
| Other\tintangible\tassets | 7,095.8 | 7,166.8 |
| Total | $21,019.0 | $21,162.6 |

Based	 on the	 carrying	 value	 of finite-lived intangible	 assets	 as	 of	May	31,	2020,	amortization	expense	for	each	of the	 next	 five	 fiscal	 years is	 estimated to	 be approximately	$40	million.

The	changes	in	the	carrying	amount	of	goodwill	for	fiscal	2018,	2019,	and	2020	are	as	follows:

|  |  |  | Convenience |  |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | North\tAmerica |  | Stores\t& | Europe\t& | Asia\t&\tLatin |  |  |
| In\tMillions | Retail | Pet | Foodservice | Australia | America | Joint\tVentures | Total |
| Balance\tas\tof\tMay\t28,\t2017 | $6,406.5 | $- | $918.8 | $700.8 | $312.4 | $408.7 | $8,747.2 |
| Acquisition | - | 5,294.9 | - | - | - | - | 5,294.9 |
| Other\tactivity,\tprimarily\tforeign\tcurrency |  |  |  |  |  |  |  |
| translation | 4.1 | - | - | 29.1 | (27.4) | 17.1 | 22.9 |
| Balance\tas\tof\tMay\t27,\t2018 | 6,410.6 | 5,294.9 | 918.8 | 729.9 | 285.0 | 425.8 | \t14,065.0 |
| Divestitures | - | - | - | - | (0.5) | - | (0.5) |
| Purchase\taccounting\tadjustment | - | 5.6 | - | - | - | - | 5.6 |
| Other\tactivity,\tprimarily\tforeign\tcurrency |  |  |  |  |  |  |  |
| translation | (4.1) | - | - | (29.5) | (24.3) | (16.4) | (74.3) |
| Balance\tas\tof\tMay\t26,\t2019 | 6,406.5 | 5,300.5 | 918.8 | 700.4 | 260.2 | 409.4 | \t13,995.8 |
| Other\tactivity,\tprimarily\tforeign\tcurrency |  |  |  |  |  |  |  |
| translation | (2.8) | - | - | (9.7) | (56.4) | (3.7) | (72.6) |
| Balance\tas\tof\tMay\t31,\t2020 | $6,403.7 | $5,300.5 | $918.8 | $690.7 | $203.8 | $405.7 | $13,923.2 |

The	changes	in	the	carrying	amount	of	other	intangible	assets	for	fiscal	2018,	2019,	and	2020	are	as	follows:

| In	Millions | Total |
| :--- | :--- |
| Balance\tas\tof\tMay\t28,\t2017 | $4,530.4 |
| Acquisition | 3,015.0 |
| Impairment\tcharge | (96.9) |
| Other\tactivity,\tprimarily\tamortization\tand\tforeign\tcurrency\ttranslation | (3.4) |
| Balance\tas\tof\tMay\t27,\t2018 | $7,445.1 |
| Impairment\tcharge | (192.6) |
| Other\tactivity,\tprimarily\tamortization\tand\tforeign\tcurrency\ttranslation | (85.7) |
| Balance\tas\tof\tMay\t26,\t2019 | $7,166.8 |
| Other\tactivity,\tprimarily\tamortization\tand\tforeign\tcurrency\ttranslation | (71.0) |
| Balance\tas\tof\tMay\t31,\t2020 | $7,095.8 |

Our	annual	goodwill	and	indefinite-lived	intangible	assets	impairment	test	was	performed	on	the	first	day	of	the	second	quarter	of	fiscal	2020,	and	we	determined	there was	no	impairment	of	our	intangible	assets	as	their	related	fair	values	were	substantially	in	excess	of	the	carrying	values,	except	for	the	Europe	&	Australia	reporting	unit and	the	Progresso	brand	intangible	asset.

The	excess	fair	values	as	of	the	fiscal	2020	test	date	of	the	Europe	&	Australia	reporting	unit	and	the	Progresso	brand	intangible	asset	were	as	follows:

In	addition,	while	having	significant	coverage	as	of	our	fiscal	2020	assessment	date,	the	Pillsbury	brand	intangible	asset	had	risk	of	decreasing	coverage.	We	will continue	to	monitor	these	businesses	for	potential	impairment.

We	did	not	identify	any	indicators	of	impairment,	including	impacts	of	the	recent	COVID-19	pandemic,	for	any	goodwill	or	indefinite-lived	intangible	assets	as	of	May 31,	2020.

In	fiscal	2019,	as	a	result	of	lower	sales	projections	in	our	long-range	plans	for	the	businesses	supporting	the	Progresso,	Food	Should	Taste	Good,	and	Mountain	High brand	intangible	assets,	we	recorded	a	$192.6	million	impairment	charge	in	restructuring,	impairment,	and	other	exit	costs.	In	fiscal	2018,	we	recorded	a	$96.9	million charge	 related	 to	 the	 impairment	 of	 our	Yoki,	Mountain	High, and	Immaculate	Baking	 brand intangible	 assets	 in	 restructuring,	 impairment,	 and	 other	 exit	 costs. Significant	assumptions	used	in	these	assessments	included	our	long-range	cash	flow	projections	for	the	businesses,	royalty	rates,	weighted-average	cost	of	capital	rates, and	tax	rates.

# NOTE	7.	LEASES

Our	lease	portfolio	primarily	consists	of	operating	lease	arrangements	for	certain	warehouse	and	distribution	space,	office	space,	retail	shops,	production	facilities,	rail cars,	production	and	distribution	equipment,	automobiles,	and	office	equipment.	Our	lease	costs	associated	with	finance	leases	and	sale-leaseback	transactions	and	our lease	income	associated	with	lessor	and	sublease	arrangements	are	not	material	to	our	Consolidated	Financial	Statements.

Components	of	our	lease	cost	are	as	follows:

|  | Fiscal	Year |
| :--- | :--- |
| In\tMillions | 2020 |
| Operating\tlease\tcost | $133.5 |
| Variable\tlease\tcost | 14.4 |
| Short-term\tlease\tcost | 23.3 |

Rent	expense	under	all	operating	leases	from	continuing	operations	was	$184.9	million	in	fiscal	2019	and	$189.4	million	in	fiscal	2018.

Maturities	of	our	operating	and	finance	lease	obligations	by	fiscal	year	are	as	follows:

| In	Millions | Operating	Leases | Finance	Leases |
| :--- | :--- | :--- |
| Fiscal\t2021 | $115.4 | $0.1 |
| Fiscal\t2022 | 97.6 | 0.1 |
| Fiscal\t2023 | 73.9 | - |
| Fiscal\t2024 | 56.8 | - |
| Fiscal\t2025 | 35.1 | - |
| After\tfiscal\t2025 | 33.7 | - |
| Total\tnoncancelable\tfuture\tlease\tobligations | $412.5 | $0.2 |
| Less:\tInterest | (33.5) | - |
| Present\tvalue\tof\tlease\tobligations | $379.0 | $0.2 |

The	lease	payments	presented	in	the	table	above	exclude	$46.2	million	of	minimum	lease	payments	for	operating	leases	we	have	committed	to	but	have	not	yet commenced	as	of	May	31,	2020.

Noncancelable	future	operating	lease	commitments	as	of	May	26,	2019,	were	as	follows:

| In	Millions |  |
| :--- | :--- |
| Fiscal\t2020 | $120.0 |
| Fiscal\t2021 | 101.7 |
| Fiscal\t2022 | 85.0 |
| Fiscal\t2023 | 63.8 |
| Fiscal\t2024 | 49.1 |
| After\tfiscal\t2024 | 63.0 |
| Total\tnoncancelable\tfuture\tlease\tcommitments | $482.6 |

Supplemental	operating	cash	flow	information	and	non-cash	activity	related	to	our	operating	leases	are	as	follows:

|  | Fiscal	Year |
| :--- | :--- |
| In\tMillions | 2020 |
| Cash\tpaid\tfor\tamounts\tincluded\tin\tthe\tmeasurement\tof\tlease\tliabilities | $131.0 |
| Right\tof\tuse\tassets\tobtained\tin\texchange\tfor\tnew\tlease\tliabilities | $46.3 |

# NOTE	8.	FINANCIAL	INSTRUMENTS,	RISK	MANAGEMENT	ACTIVITIES,	AND	FAIR	VALUES

# FINANCIAL	INSTRUMENTS

The	carrying	values	of	cash	and	cash	equivalents,	receivables,	accounts	payable,	other	current	liabilities,	and	notes	payable	approximate	fair	value.	Marketable	securities are	carried	at	fair	value.	As	of	May	31,	2020,	and	May	26,	2019,	a	comparison	of	cost	and	market	values	of	our	marketable	debt	and	equity	securities	is	as	follows:

|  | Cost | Cost | Fair	Value | Fair	Value | Gross	Gains | Gross	Gains | Gross	Losses | Gross	Losses |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Fiscal\tYear |  | Fiscal\tYear |  | Fiscal\tYear |  | Fiscal\tYear | Fiscal\tYear |
| In\tMillions | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 |
| Available\tfor\tsale\tdebt\tsecurities | $56.7 | $34.3 | $56.7 | $34.3 | $- | $- | $- | $- |
| Equity\tsecurities | 0.3 | 0.6 | 4.9 | 18.5 | 4.6 | 17.9 | - | - |
| Total | $57.0 | $34.9 | $61.6 | $52.8 | $4.6 | $17.9 | $- | $- |

During	fiscal	2020,	we	received	$16.0	million	of	proceeds	and	recorded	$4.0	million	of	realized	losses	from	the	sale	of	marketable	securities.	There	were	no	realized gains	or	losses	from	sales	of	marketable	securities	in	fiscal	2019.	Gains	and	losses	are	determined	by	specific	identification.	Classification	of	marketable	securities	as current	or	noncurrent	is	dependent	upon	our	intended	holding	period	and	the	security's	maturity	date.	The	aggregate	unrealized	gains	and	losses	on	available-for-sale debt	securities,	net	of	tax	effects,	are	classified	in	AOCI	within	stockholders'	equity.

Scheduled	maturities	of	our	marketable	securities	are	as	follows:

|  |  | Marketable	Securities |
| :--- | :--- | :--- |
| In\tMillions | Cost | Fair\tValue |
| Under\t1\tyear\t(current) | $56.7 | $56.7 |
| Equity\tsecurities | 0.3 | 4.9 |
| Total | $57.0 | $61.6 |

As	of	May	31,	2020,	we	had	$2.3	million	of	marketable	debt	securities	and	$15.9	million	of	cash	and	cash	equivalents	pledged	as	collateral	for	derivative	contracts.	As of	May	31,	2020,	$43.5	million	of	certain	accounts	receivable	were	pledged	as	collateral	against	a	foreign	uncommitted	line	of	credit.

The	fair	value	and	carrying	amounts	of	long-term	debt,	including	the	current	portion,	were	$14,538.4	million	and	$13,260.5	million,	respectively,	as	of	May	31,	2020. 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.

# RISK	MANAGEMENT	ACTIVITIES

As	a	part	of	our	ongoing	operations,	we	are	exposed	to	market	risks	such	as	changes	in	interest	and	foreign	currency	exchange	rates	and	commodity	and	equity	prices. To	manage	these	risks,	we	may	enter	into	various	derivative	transactions	(e.g.,	futures,	options,	and	swaps)	pursuant	to	our	established	policies.

# COMMODITY	PRICE	RISK

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

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

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

Unallocated	corporate	items	for	fiscal	2020,	2019,	and	2018	included:

| In	Millions | 2020 | 2019 | 2018 |
| :--- | :--- | :--- | :--- |
| Net\t(loss)\tgain\ton\tmark-to-market\tvaluation\tof\tcommodity\tpositions | $(63.0) | $(39.0) | $14.3 |
| Net\tloss\ton\tcommodity\tpositions\treclassified\tfrom\tunallocated\tcorporate\titems\tto\tsegment\toperating\tprofit | 35.6 | 10.0 | 11.3 |
| Net\tmark-to-market\trevaluation\tof\tcertain\tgrain\tinventories | 2.7 | (7.0) | 6.5 |
| Net\tmark-to-market\tvaluation\tof\tcertain\tcommodity\tpositions\trecognized\tin\tunallocated\tcorporate\titems | $(24.7) | $(36.0) | $32.1 |

As	of	May	31,	2020,	the	net	notional	value	of	commodity	derivatives	was	$234.5	million,	of	which	$159.4	million	related	to	agricultural	inputs	and	$75.1	million	related to	energy	inputs.	These	contracts	relate	to	inputs	that	generally	will	be	utilized	within	the	next	12	months.

# INTEREST	RATE	RISK

We	are	exposed	to	interest	rate	volatility	with	regard	to	future	issuances	of	fixed-rate	debt,	and	existing	and	future	issuances	of	floating-rate	debt.	Primary	exposures include	U.S.	Treasury	rates,	LIBOR,	Euribor,	and	commercial	paper	rates	in	the	United	States	and	Europe.	We	use	interest	rate	swaps,	forward-starting	interest	rate swaps,	and	treasury	locks	to	hedge	our	exposure	to	interest	rate	changes,	to	reduce	the	volatility	of	our	financing	costs,	and	to	achieve	a	desired	proportion	of	fixed	rate versus	floating-rate	debt,	based	on	current	and	projected	market	conditions.	Generally	under	these	swaps,	we	agree	with	a	counterparty	to	exchange	the	difference between	fixed-rate	and	floating-rate	interest	amounts	based	on	an	agreed	upon	notional	principal	amount.

Floating	Interest	Rate	Exposures	—	Floating-to-fixed	interest	rate	swaps	are	accounted	for	as	cash	flow	hedges,	as	are	all	hedges	of	forecasted	issuances	of	debt. Effectiveness	is	assessed	based	on	either	the	perfectly	effective	hypothetical	derivative	method	or	changes	in	the	present	value	of	interest	payments	on	the	underlying debt.	Effective	gains	and	losses	deferred	to	AOCI	are	reclassified	into	earnings	over	the	life	of	the	associated	debt.

Fixed	Interest	Rate	Exposures	—	Fixed-to-floating	interest	rate	swaps	are	accounted	for	as	fair	value	hedges	with	effectiveness	assessed	based	on	changes	in	the	fair value	of	the	underlying	debt	and	derivatives,	using	incremental	borrowing	rates	currently	available	on	loans	with	similar	terms	and	maturities.

In	advance	of	planned	debt	financing,	we	entered	into	$750.0	million	notional	amount	of	treasury	locks	due	April	02,	2020	with	an	average	fixed	rate	of	0.67	percent. All	of	these	treasury	locks	were	cash	settled	for	$1.4	million	during	the	fourth	quarter	of	fiscal	2020,	concurrent	with	the	issuance	of	our	$750.0	million	10-year	fixed rate	notes. 64

In	advance	of	planned	debt	financing,	in	the	fourth	quarter	of	fiscal	2020,	we	entered	into	$300.0	million	notional	amount	of	treasury	locks	due	January	13,	2022	with	an average	fixed	rate	of	0.85	percent.

During	the	third	quarter	of	fiscal	2020,	we	entered	into	a	€600.0	million	notional	amount	interest	rate	swap	to	convert	our	€600.0	million	fixed	rate	notes	due	January	15, 2026,	to	a	floating	rate.

During	the	second	quarter	of	fiscal	2020,	we	entered	into	a	$500.0	million	notional	amount	interest	rate	swap	to	convert	a	portion	of	our	$850.0	million	floating-rate notes	due	April	16,	2021,	to	a	fixed	rate.

As	of	May	31,	2020,	the	pre-tax	amount	of	cash-settled	interest	rate	hedge	gain	or	loss	remaining	in	AOCI,	which	will	be	reclassified	to	earnings	over	the	remaining	term of	the	related	underlying	debt,	follows:

| In	Millions | Gain/(Loss) |
| :--- | :--- |
| 3.15%\tnotes\tdue\tDecember\t15,\t2021 | $(15.2) |
| 2.6%\tnotes\tdue\tOctober\t12,\t2022 | 1.7 |
| 1.0%\tnotes\tdue\tApril\t27,\t2023 | (0.7) |
| 3.7%\tnotes\tdue\tOctober\t17,\t2023 | (1.1) |
| 3.65%\tnotes\tdue\tFebruary\t15,\t2024 | 6.6 |
| 4.0%\tnotes\tdue\tApril\t17,\t2025 | (2.8) |
| 3.2%\tnotes\tdue\tFebruary\t10,\t2027 | 11.4 |
| 1.5%\tnotes\tdue\tApril\t27,\t2027 | (2.3) |
| 4.2%\tnotes\tdue\tApril\t17,\t2028 | (8.0) |
| 4.55%\tnotes\tdue\tApril\t17,\t2038 | (9.8) |
| 5.4%\tnotes\tdue\tJune\t15,\t2040 | (11.2) |
| 4.15%\tnotes\tdue\tFebruary\t15,\t2043 | 8.9 |
| 4.7%\tnotes\tdue\tApril\t17,\t2048 | (13.2) |
| Net\tpre-tax\thedge\tloss\tin\tAOCI | $(35.7) |

The	following	table	summarizes	the	notional	amounts	and	weighted-average	interest	rates	of	our	interest	rate	derivatives.	Average	floating	rates	are	based	on	rates	as	of the	end	of	the	reporting	period.

| In	Millions | May	31,	2020 | May	26,	2019 |
| :--- | :--- | :--- |
| Pay-floating\tswaps\t-\tnotional\tamount | $666.1 | $500.0 |
| Average\treceive\trate | 0.4 % | 2.2 % |
| Average\tpay\trate | 0.3 % | 3.1 % |
| Pay-fixed\tswaps\t-\tnotional\tamount | $500.0 | $- |
| Average\treceive\trate | 1.7 % | - % |
| Average\tpay\trate | 2.1 % | - % |

The	floating	rate	swap	contracts	outstanding	as	of	May	31,	2020,	mature	in	fiscal	2021.	The	fixed	rate	swap	contracts	outstanding	as	of	May	31,	2020,	mature	in	fiscal 2026.

# FOREIGN	EXCHANGE	RISK

Foreign	currency	fluctuations	affect	our	net	investments	in	foreign	subsidiaries	and	foreign	currency	cash	flows	related	to	third	party	purchases,	intercompany	loans, product	shipments,	and	foreign-denominated	debt.	We	are	also	exposed	to	the	translation	of	foreign	currency	earnings	to	the	U.S.	dollar.	Our	principal	exposures	are	to the	Australian	dollar,	Brazilian	real,	British	pound	sterling,	Canadian	dollar,	Chinese	renminbi,	euro,	Japanese	yen,	Mexican	peso,	and	Swiss	franc.	We	primarily	use foreign	currency	forward	contracts	to	selectively	hedge	our	foreign	currency	cash	flow	exposures.	We	also	generally	swap	our	foreign-denominated	commercial	paper borrowings	and	nonfunctional	currency	intercompany	loans	back	to	U.S.	dollars	or	the	functional	currency	of	the	entity	with	foreign	exchange	exposure.	The	gains	or losses	on	these	derivatives	offset	the	foreign	currency	revaluation	gains	or	losses	recorded	in	earnings	on	the	associated	borrowings.	We	generally	do	not	hedge	more than	18	months	in	advance.

As	of	May	31,	2020,	the	net	notional	value	of	foreign	exchange	derivatives	was	$967.2	million.

We	also	have	net	 investments	 in	foreign	subsidiaries	 that	are	denominated	 in	euros.	We	previously	hedged	a	portion	of these	net investments	by issuing	euro- denominated	commercial	paper	and	foreign	exchange	forward	contracts.	As	of	May	31,	2020,	we	hedged 65

a	portion	of	these	net	investments	with	€2,200.0	million	of	euro	denominated	bonds.	As	of	May	31,	2020,	we	had	deferred	net	foreign	currency	transaction	losses	of $29.9	million	in	AOCI	associated	with	net	investment	hedging	activity.

# EQUITY	INSTRUMENTS

Equity	price	movements	affect	our	compensation	expense	as	certain	investments	made	by	our	employees	in	our	deferred	compensation	plan	are	revalued.	We	use	equity swaps	to	manage	this	risk.	As	of	May	31,	2020,	the	net	notional	amount	of	our	equity	swaps	was	$146.9	million.	These	swap	contracts	mature	in	fiscal	2021.

# FAIR	VALUE	MEASUREMENTS	AND	FINANCIAL	STATEMENT	PRESENTATION

The	fair	values	of	our	assets,	liabilities,	and	derivative	positions	recorded	at	fair	value	and	their	respective	levels	in	the	fair	value	hierarchy	as	of	May	31,	2020,	and	May 26,	2019,	were	as	follows:

|  |  | Fair	Values	of	Assets |  |  |  | Fair	Values	of	Liabilities | Fair	Values	of	Liabilities |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In\tMillions | Level\t1 | Level\t2 | Level\t3 | Total | Level\t1 | Level\t2 | Level\t3 | Total |
| Derivatives\tdesignated\tas\thedging\tinstruments: |  |  |  |  |  |  |  |  |
| Interest\trate\tcontracts\t(a)\t(b) | $- | $5.6 | $- | $5.6 | $- | $(7.8) | $- | $(7.8) |
| Foreign\texchange\tcontracts\t(a)\t(c) | - | 19.8 | - | 19.8 | - | (3.8) | - | (3.8) |
| Total | - | 25.4 | - | 25.4 | - | (11.6) | - | (11.6) |
| Derivatives\tnot\tdesignated\tas\thedging\tinstruments: |  |  |  |  |  |  |  |  |
| Foreign\texchange\tcontracts\t(a)\t(c) | - | 18.8 | - | 18.8 | - | (0.2) | - | (0.2) |
| Commodity\tcontracts\t(a)\t(d) | 4.6 | 1.6 | - | 6.2 | (3.4) | (26.7) | - | (30.1) |
| Grain\tcontracts\t(a)\t(d) | - | 5.0 | - | 5.0 | - | (1.2) | - | (1.2) |
| Total | 4.6 | 25.4 | - | 30.0 | (3.4) | (28.1) | - | (31.5) |
| Other\tassets\tand\tliabilities\treported\tat\tfair\tvalue: |  |  |  |  |  |  |  |  |
| Marketable\tinvestments\t(a)\t(e) | 4.9 | 56.7 | - | 61.6 | - | - | - | - |
| Total | 4.9 | 56.7 | - | 61.6 | - | - | - | - |
| Total\tassets,\tliabilities,\tand\tderivative\tpositions\trecorded |  |  |  |  |  |  |  |  |
| at\tfair\tvalue | $9.5 | $107.5 | $- | $117.0 | $(3.4) | $(39.7) | $- | $(43.1) |

(a) These	contracts	and	investments	are	recorded	as	prepaid	expenses	and	other	current	assets,	other	assets,	other	current	liabilities	or	other	liabilities,	as appropriate,	based	on	whether	in	a	gain	or	loss	position.	Certain	marketable	investments	are	recorded	as	cash	and	cash	equivalents.

(b) 	Based	on	LIBOR	and	swap	rates.	As	of	May	31,	2020,	the	carrying	amount	of	hedged	debt	designated	as	the	hedged	item	in	a	fair	value	hedge	was	$670.9 million	and	was	classified	on	the	Consolidated	Balance	Sheet	within	long-term	debt.	As	of	May	31,	2020,	the	cumulative	amount	of	fair	value	hedging	basis adjustments	was	$4.8	million.

(c) Based	on	observable	market	transactions	of	spot	currency	rates	and	forward	currency	prices.

(d) Based	on	prices	of	futures	exchanges	and	recently	reported	transactions	in	the	marketplace.

(e) 	Based	on	prices	of	common	stock	and	bond	matrix	pricing.

|  | May	26,	2019 | May	26,	2019 | May	26,	2019 | May	26,	2019 | May	26,	2019 | May	26,	2019 | May	26,	2019 | May	26,	2019 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | Fair\tValues\tof\tAssets | Fair\tValues\tof\tAssets |  |  | Fair\tValues\tof\tLiabilities | Fair\tValues\tof\tLiabilities |  |
| In\tMillions | Level\t1 | Level\t2 | Level\t3 | Total | Level\t1 | Level\t2 | Level\t3 | Total |
| Derivatives\tdesignated\tas\thedging\tinstruments: |  |  |  |  |  |  |  |  |
| Interest\trate\tcontracts\t(a)\t(b) | $- $- $- $- $- | $- $- $- $- $- | $- $- $- $- $- | $- $- $- $- $- | $- $- $- $- $- | $(1.9) | $- | $(1.9) |
| Foreign\texchange\tcontracts\t(a)\t(c) | - | 12.9 | - | 12.9 | - | (3.3) | - | (3.3) |
| Total | - | 12.9 | - | 12.9 | - | (5.2) | - | (5.2) |
| Derivatives\tnot\tdesignated\tas\thedging\tinstruments: |  |  |  |  |  |  |  |  |
| Foreign\texchange\tcontracts\t(a)\t(c) | - | 2.4 | - | 2.4 | - | (1.9) | - | (1.9) |
| Commodity\tcontracts\t(a)\t(d) | 1.4 | 5.2 | - | 6.6 | (4.4) | (3.5) | - | (7.9) |
| Grain\tcontracts\t(a)\t(d) | - | 6.7 | - | 6.7 | - | (2.3) | - | (2.3) |
| Total | 1.4 | 14.3 | - | 15.7 | (4.4) | (7.7) | - | (12.1) |
| Other\tassets\tand\tliabilities\treported\tat\tfair\tvalue: |  |  |  |  |  |  |  |  |
| Marketable\tinvestments\t(a)\t(e) | 18.5 | 34.3 | - | 52.8 | - | - | - | - |
| Long-lived\tassets\t(f) | - | 19.0 | - | 19.0 | - | - | - | - |
| Indefinite-lived\tintangible\tassets\t(g) | - | - | 330.0 | 330.0 | - | - | - | - |
| Total | 18.5 | 53.3 | 330.0 | 401.8 | - | - | - | - |
| Total\tassets,\tliabilities,\tand\tderivative\tpositions\trecorded |  |  |  |  |  |  |  |  |
| at\tfair\tvalue | $19.9 | $80.5 | $330.0 | $430.4 | $(4.4) | $(12.9) | $- | $(17.3) |

(b) 	Based	on	LIBOR	and	swap	rates.	As	of	May	26,	2019,	the	carrying	amount	of	hedged	debt	designated	as	the	hedged	item	in	a	fair	value	hedge	was	$493.3 million	and	was	classified	on	the	Consolidated	Balance	Sheet	within	the	current	portion	of	long-term	debt.	As	of	May	26,	2019,	the	cumulative	amount	of	fair value	hedging	basis	adjustments	was	$6.7	million.

(f) We	recorded	$61.2	million	in	non-cash	impairment	charges	in	fiscal	2019	to	write	down	certain	long-lived	assets	to	their	fair	value.	Fair	value	was	based	on recently	 reported	 transactions	 for	 similar	 assets	 in	 the	 marketplace.	 These	 assets	 had	 a	 carrying	 value	 of	 $80.2	 million	 and	 were	 associated	 with	 the restructuring	actions	described	in	Note	4.

We	did	not	significantly	change	our	valuation	techniques	from	prior	periods.

Information	related	to	our	cash	flow	hedges,	fair	value	hedges,	and	other	derivatives	not	designated	as	hedging	instruments	for	the	fiscal	years	ended	May	31,	2020,	and May	26,	2019,	follows:

|  | Interest	Rate | Interest	Rate | Foreign	Exchange | Foreign	Exchange |  |  | Commodity |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Contracts | Contracts | Contracts | Contracts | \t Equity\tContracts | \t Equity\tContracts | Contracts | Contracts | Total | Total |
|  | Fiscal\tYear | Fiscal\tYear | Fiscal\tYear |  | Fiscal\tYear |  | Fiscal\tYear |  | Fiscal\tYear | Fiscal\tYear |
| In\tMillions | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 |
| Derivatives\tin\tCash\tFlow\tHedging\tRelationships: |  |  |  |  |  |  |  |  |  |  |
| Amount\tof\tgain\t(loss)\trecognized\tin\tother |  |  |  |  |  |  |  |  |  |  |
| comprehensive\tincome\t(OCI) | $(6.9) | $- | $11.3 | $15.7 | $- | $- | $- | $- | $4.4 | $15.7 |
| Amount\tof\tnet\tgain\t(loss)\treclassified\tfrom\tAOCI |  |  |  |  |  |  |  |  |  |  |
| into\tearnings\t(a) | (9.5) | (9.0) | 4.6 | 8.4 | - | - | - | - | (4.9) | (0.6) |
| Amount\tof\tnet\tgain\trecognized\tin\tearnings\t(b) | - | - | - | 0.5 | - | - | - | - | - | 0.5 |
| Derivatives\tin\tFair\tValue\tHedging\tRelationships: |  |  |  |  |  |  |  |  |  |  |
| Amount\tof\tnet\tgain\t(loss)\trecognized\tin\tearnings\t(c) | (4.9) | 2.4 | - | - | - | - | - | - | (4.9) | 2.4 |
| Derivatives\tNot\tDesignated\tas\tHedging\tInstruments: |  |  |  |  |  |  |  |  |  |  |
| Amount\tof\tnet\tgain\t(loss)\trecognized\tin\tearnings\t(b) | (1.4) | - | 15.7 | 7.5 | 8.6 | 0.7 | (55.6) | (33.6) | (32.7) | \t(25.4) |

(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.	For	the	fiscal	year	ended	May	31,	2020,	the	amount	of	gain	reclassified	from	AOCI	into	cost	of	sales	was	$5.1	million	and	the	amount	of	loss reclassified	from	AOCI	into	SG&A	was	$0.5	million.	For	the	fiscal	year	ended	May	26,	2019,	the	amount	of	gain	reclassified	from	AOCI	into	cost	of	sales	was $10.5	million	and	the	amount	of	loss	reclassified	from	AOCI	into	SG&A	was	$2.1	million.

(b) Gain	recognized	in	earnings	is	related	to	the	ineffective	portion	of	the	hedging	relationship,	reported	in	SG&A	expenses	for	foreign	exchange	contracts	and interest,	net	for	interest	rate	contracts.	No	amounts	were	reported	as	a	result	of	being	excluded	from	the	assessment	of	hedge	effectiveness.

(c) Gain	(loss)	recognized	in	earnings	is	reported	in	interest,	net	for	interest	rate	contracts,	in	cost	of	sales	for	commodity	contracts,	and	in	SG&A	expenses	for equity	contracts	and	foreign	exchange	contracts. 68

The	following	tables	reconcile	the	net	fair	values	of	assets	and	liabilities	subject	to	offsetting	arrangements	that	are	recorded	in	our	Consolidated	Balance	Sheets	to	the net	fair	values	that	could	be	reported	in	our	Consolidated	Balance	Sheets:

|  |  |  | Assets |  |  |  |  |  | Liabilities |  |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  |  | Gross\tAmounts\tNot\tOffset | Gross\tAmounts\tNot\tOffset | Gross\tAmounts\tNot\tOffset |  |  |  |  | Gross\tAmounts\tNot |  |  |
|  |  |  |  | in\tthe\nBalance\tSheet\t(e) |  |  |  |  |  | Offset\tin\tthe\nBalance\tSheet\t(e) |  |  |
|  |  | Gross |  |  |  |  |  | Gross |  |  |  |  |
|  |  | Liabilities |  |  |  |  |  | Assets | Net |  |  |  |
|  | Gross | Offset\tin | Net |  |  |  | Gross | Offset\tin | Amounts |  |  |  |
|  | Amounts\tof | the | Amounts |  | Cash | Net | Amounts\tof | the | of |  | Cash | Net |
|  | Recognized | Balance | of\tAssets | Financial | Collateral | Amount | Recognized | Balance | Liabilities | Financial | Collateral | Amount |
| In\tMillions | Assets | Sheet\t(a) | (b) | Instruments | Received | (c) | Liabilities | Sheet\t(a) | (b) | Instruments | Pledged | (d) |
| Commodity |  |  |  |  |  |  |  |  |  |  |  |  |
| contracts | $6.2 | $- | $6.2 | $(4.2) | $- | $2.0 | $(30.1) | $- | $(30.1) | $4.2 | $15.9 | $(10.0) |
| Interest\trate |  |  |  |  |  |  |  |  |  |  |  |  |
| contracts | 6.0 | - | 6.0 | (0.8) | - | 5.2 | (8.0) | - | (8.0) | 0.8 | - | (7.2) |
| Foreign |  |  |  |  |  |  |  |  |  |  |  |  |
| exchange |  |  |  |  |  |  |  |  |  |  |  |  |
| contracts | 38.6 | - | 38.6 | (3.7) | - | 34.9 | (4.0) | - | (4.0) | 3.7 | - | (0.3) |
| Equity |  |  |  |  |  |  |  |  |  |  |  |  |
| contracts | 8.6 | - | 8.6 | - | - | 8.6 | - | - | - | - | - | - |
| Total | $59.4 | $- | $59.4 | $(8.7) | $- | $50.7 | $(42.1) | $- | $(42.1) | $8.7 | $15.9 | $(17.5) |

(a) 	Includes	related	collateral	offset	in	our	Consolidated	Balance	Sheets.

(b) 	Net	fair	value	as	recorded	in	our	Consolidated	Balance	Sheets.

(c) 	Fair	value	of	assets	that	could	be	reported	net	in	our	Consolidated	Balance	Sheets.

(d) Fair	value	of	liabilities	that	could	be	reported	net	in	our	Consolidated	Balance	Sheets.

(e) Fair	value	of	assets	and	liabilities	reported	on	a	gross	basis	in	our	Consolidated	Balance	Sheets.

# AMOUNTS	RECORDED	IN	ACCUMULATED	OTHER	COMPREHENSIVE	LOSS

As	of	May	31,	2020,	the	after-tax	amounts	of	unrealized	gains	and	losses	in	AOCI	related	to	hedge	derivatives	follows:

The	net	amount	of	pre-tax	gains	and	losses	in	AOCI	as	of	May	31,	2020,	that	we	expect	to	be	reclassified	into	net	earnings	within	the	next	12	months	is	a	$12.9	million net	gain.

# CREDIT-RISK-RELATED	CONTINGENT	FEATURES

Certain	of	our	derivative	instruments	contain	provisions	that	require	us	to	maintain	an	investment	grade	credit	rating	on	our	debt	from	each	of	the	major	credit	rating agencies.	If	our	debt	were	to	fall	below	investment	grade,	the	counterparties	to	the	derivative	instruments	could	request	full	collateralization	on	derivative	instruments	in net	liability	positions.	The	aggregate	fair	value	of	all	derivative	instruments	with	credit-risk-related	contingent	features	that	were	in	a	liability	position	on	May	31,	2020, was	$31.4	million.	We	have	posted	no	collateral	under	these	contracts.	If	the	credit-risk-related	contingent	features	underlying	these	agreements	had	been	triggered	on May	31,	2020,	we	would	have	been	required	to	post	$31.4	million	of	collateral	to	counterparties.

# CONCENTRATIONS	OF	CREDIT	AND	COUNTERPARTY	CREDIT	RISK

During	fiscal	2020,	customer	concentration	was	as	follows:

| Percent	of	total | Consolidated | North	America<br>Retail | Convenience<br>Stores	&amp;<br>Foodservice | Europe	&amp;<br>Australia | Asia	&amp;	Latin<br>America | Pet |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Walmart\t(a): |  |  |  |  |  |  |
| Net\tsales | 21% | 30% | 8% | 1% | 5% | 12% |
| Accounts\treceivable |  | 22% | 6% | 1% | 7% | 9% |
| Five\tlargest\tcustomers: |  |  |  |  |  |  |
| Net\tsales |  | 54% | 45% | 24% | 12% | 64% |

(a)	Includes	Walmart	Inc.	and	its	affiliates.

No	customer	other	than	Walmart	accounted	for	10	percent	or	more	of	our	consolidated	net	sales.

We	enter	into	interest	rate,	foreign	exchange,	and	certain	commodity	and	equity	derivatives,	primarily	with	a	diversified	group	of	highly	rated	counterparties.	We continually	monitor	our	positions	and	the	credit	ratings	of	the	counterparties	involved	and,	by	policy,	limit	the	amount	of	credit	exposure	to	any	one	party.	These transactions	may	expose	us	to	potential	losses	due	to	the	risk	of	nonperformance	by	these	counterparties;	however,	we	have	not	incurred	a	material	loss.	We	also	enter into	commodity	futures	transactions	through	various	regulated	exchanges.

The	amount	of	loss	due	to	the	credit	risk	of	the	counterparties,	should	the	counterparties	fail	to	perform	according	to	the	terms	of	the	contracts,	is	$14.2	million,	against which	we	do	not	hold	collateral.	Under	the	terms	of	our	swap	agreements,	some	of	our	transactions	require	collateral	or	other	security	to	support	financial	instruments subject	to	threshold	levels	of	exposure	and	counterparty	credit	risk.	Collateral	assets	are	either	cash	or	U.S.	Treasury	instruments	and	are	held	in	a	trust	account	that	we may	access	if	the	counterparty	defaults.

We	offer	certain	suppliers	access	to	third	party	services	that	allow	them	to	view	our	scheduled	payments	online.	The	third	party	services	also	allow	suppliers	to	finance advances	on	our	scheduled	payments	at	the	sole	discretion	of	the	supplier	and	the	third	party.	We	have	no	economic	interest	in	these	financing	arrangements	and	no direct	relationship	with	the	suppliers,	the	third	parties,	or	any	financial	institutions	concerning	this	service.	All	of	our	accounts	payable	remain	as	obligations	to	our suppliers	as	stated	in	our	supplier	agreements.	As	of	May	31,	2020,	$1,328.9	million	of	our	accounts	payable	is	payable	to	suppliers	who	utilize	these	third	party services. 70

# NOTE	9.	DEBT

# NOTES	PAYABLE

The	components	of	notes	payable	and	their	respective	weighted-average	interest	rates	at	the	end	of	the	periods	were	as	follows:

|  | May	31,	2020 | May	31,	2020 |  | May	26,	2019 | May	26,	2019 |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Weighted-\tAverage | Weighted-\tAverage |  | Weighted-\tAverage | Weighted-\tAverage |  |
| In\tMillions | Notes\tPayable | Interest\tRate |  | Notes\tPayable | Interest\tRate |  |
| U.S.\tcommercial\tpaper | $99.9 | 3.6 | % | $1,298.5 | 2.7 | % |
| Financial\tinstitutions | 179.1 | 5.1 |  | 170.2 | 9.0 |  |
| Total | $279.0 | 4.6 | % | $1,468.7 | 3.4 | % |

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

| In	Billions | Facility	Amount | Borrowed	Amount |
| :--- | :--- | :--- |
| Credit\tfacility\texpiring: |  |  |
| May\t2022 | $2.7 | $- |
| September\t2022 | 0.2 | - |
| Total\tcommitted\tcredit\tfacilities | 2.9 | - |
| Uncommitted\tcredit\tfacilities | 0.6 | 0.2 |
| Total\tcommitted\tand\tuncommitted\tcredit\tfacilities | $3.5 | $0.2 |

The	credit	facilities	contain	covenants,	including	a	requirement	to	maintain	a	fixed	charge	coverage	ratio	of	at	least	2.5	times.	We	were	in	compliance	with	all	credit facility	covenants	as	of	May	31,	2020.

# LONG-TERM	DEBT

In	April	2020,	we	issued	$750.0	million	of	2.875	percent	fixed-rate	notes	due	April	15,	2030.	We	used	the	net	proceeds	to	repay	a	portion	of	our	outstanding	commercial paper	and	for	general	corporate	purposes.

In	October	2019,	we	repaid	$500.0	million	of	2.20	percent	fixed-rate	notes	with	proceeds	from	commercial	paper.

In	March	2019,	we	issued	€300.0	million	of	0.0	percent	fixed-rate	notes	due	January	15,	2020.	We	used	the	net	proceeds,	together	with	cash	on	hand,	to	repay	our	€300.0 million	floating	rate	notes.

In	February	2019,	we	repaid	$1,150.0	million	of	5.65	percent	fixed-rate	notes	with	proceeds	from	commercial	paper.

# A	summary	of	our	long-term	debt	is	as	follows:

| In	Millions | May	31,	2020 | May	26,	2019 |
| :--- | :--- | :--- |
| 4.2%\tnotes\tdue\tApril\t17,\t2028 | $1,400.0 | $1,400.0 |
| 3.15%\tnotes\tdue\tDecember\t15,\t2021 | 1,000.0 | 1,000.0 |
| 3.7%\tnotes\tdue\tOctober\t17,\t2023 | 850.0 | 850.0 |
| Floating-rate\tnotes\tdue\tApril\t16,\t2021 | 850.0 | 850.0 |
| 4.0%\tnotes\tdue\tApril\t17,\t2025 | 800.0 | 800.0 |
| 3.2%\tnotes\tdue\tFebruary\t10,\t2027 | 750.0 | 750.0 |
| 2.875%\tnotes\tdue\tApril\t15,\t2030 | 750.0 | - |
| Euro-denominated\t0.45%\tnotes\tdue\tJanuary\t15,\t2026 | 666.1 | - |
| 4.7%\tnotes\tdue\tApril\t17,\t2048 | 650.0 | 650.0 |
| 3.2%\tnotes\tdue\tApril\t16,\t2021 | 600.0 | 600.0 |
| Euro-denominated\t2.1%\tnotes\tdue\tNovember\t16,\t2020 | 555.1 | 560.1 |
| Euro-denominated\t1.0%\tnotes\tdue\tApril\t27,\t2023 | 555.1 | 560.1 |
| Euro-denominated\tfloating-rate\tnotes\tdue\tJanuary\t15,\t2020 | - | 560.1 |
| 4.55%\tnotes\tdue\tApril\t17,\t2038 | 500.0 | 500.0 |
| 2.6%\tnotes\tdue\tOctober\t12,\t2022 | 500.0 | 500.0 |
| 5.4%\tnotes\tdue\tJune\t15,\t2040 | 500.0 | 500.0 |
| 4.15%\tnotes\tdue\tFebruary\t15,\t2043 | 500.0 | 500.0 |
| 3.65%\tnotes\tdue\tFebruary\t15,\t2024 | 500.0 | 500.0 |
| 2.2%\tnotes\tdue\tOctober\t21,\t2019 | - | 500.0 |
| Euro-denominated\t1.5%\tnotes\tdue\tApril\t27,\t2027 | 444.0 | 448.1 |
| Floating-rate\tnotes\tdue\tOctober\t17,\t2023 | 400.0 | 400.0 |
| Euro-denominated\t0.0%\tnotes\tdue\tJanuary\t15,\t2020 | - | 336.1 |
| Euro-denominated\t2.2%\tnotes\tdue\tJune\t24,\t2021 | 222.0 | 224.0 |
| Euro-denominated\t0.0%\tnotes\tdue\tNovember\t16,\t2020 | 222.0 | - |
| Medium-term\tnotes,\t0.56%\tto\t6.61%,\tdue\tfiscal\t2021\tor\tlater | 104.2 | 104.2 |
| Other,\tincluding\tdebt\tissuance\tcosts\tand\tfinance\tleases | (58.0) | (71.4) |
|  | 13,260.5 | 13,021.3 |
| Less\tamount\tdue\twithin\tone\tyear | (2,331.5) | (1,396.5) |
| Total\tlong-term\tdebt | $10,929.0 | $11,624.8 |

Principal	payments	due	on	long-term	debt	and	finance	leases	in	the	next	five	fiscal	years	based	on	stated	contractual	maturities,	our	intent	to	redeem,	or	put	rights	of certain	note	holders	are	as	follows:

| In	Millions |  |
| :--- | :--- |
| Fiscal\t2021 | $2,331.5 |
| Fiscal\t2022 | 1,222.1 |
| Fiscal\t2023 | 1,055.1 |
| Fiscal\t2024 | 1,750.0 |
| Fiscal\t2025 | 800.0 |

Certain	of	our	long-term	debt	agreements	contain	restrictive	covenants.	As	of	May	31,	2020,	we	were	in	compliance	with	all	of	these	covenants.

As	of	May	31,	2020,	the	$35.7	million	pre-tax	loss	recorded	in	AOCI	associated	with	our	previously	designated	interest	rate	swaps	will	be	reclassified	to	net	interest over	the	remaining	lives	of	the	hedged	transactions.	The	amount	expected	to	be	reclassified	from	AOCI	to	net	interest	in	fiscal	2021	is	a	$9.4	million	pre-tax	loss.

# NOTE	10.	REDEEMABLE	AND	NONCONTROLLING	INTERESTS

Our	principal	redeemable	and	noncontrolling	interests	relate	to	our	Yoplait	SAS,	Yoplait	Marques	SNC,	Liberté	Marques	Sàrl,	and	General	Mills	Cereals,	LLC	(GMC) subsidiaries.	In	addition,	we	have	4	foreign	subsidiaries	that	have	noncontrolling	interests	totaling	$4.7	million	as	of	May	31,	2020.

We	have	a	51	percent	controlling	interest	in	Yoplait	SAS	and	a	50	percent	interest	in	Yoplait	Marques	SNC	and	Liberté	Marques	Sàrl.	Sodiaal	holds	the	remaining interests	in	each	of	the	entities.	On	the	acquisition	date,	we	recorded	the	$904.4	million	fair	value	of	Sodiaal's	49	percent	euro-denominated	interest	in	Yoplait	SAS	as	a redeemable	interest	on	our	Consolidated	Balance	Sheets.	Sodiaal	has	the	ability	to	put	all	or	a	portion	of	its	redeemable	interest	to	us	at	fair	value	once	per	year,	up	to three	times	before	December	2024.	We	adjust	the	value	of	the	redeemable	interest	through	additional	paid-in	capital	on	our	Consolidated	Balance	Sheets	quarterly	to	the redeemable	interest's	redemption	value,	which	approximates	its	fair	value.	Yoplait	SAS	pays	dividends	annually	if	it	meets	certain	financial	metrics	set	forth	in	its shareholders'	agreement.	As	of	May	31,	2020,	the	redemption	value	of	the	euro-denominated	redeemable	interest	was	$544.6	million.

On	the	acquisition	dates,	we	recorded	the	$281.4	million	fair	value	of	Sodiaal's	50	percent	euro-denominated	interest	in	Yoplait	Marques	SNC	and	50	percent	Canadian dollar-denominated	interest	in	Liberté	Marques	Sàrl	as	noncontrolling	interests	on	our	Consolidated	Balance	Sheets.	Yoplait	Marques	SNC	earns	a	royalty	stream through	a	 licensing	agreement	with	Yoplait	SAS	for	 the	rights	 to	Yoplait	and	related	 trademarks.	Liberté	Marques	Sàrl	earns	a	royalty	stream	 through	 licensing agreements	with	certain	Yoplait	group	companies	for	the	rights	to	Liberté	and	related	trademarks.	These	entities	pay	dividends	annually	based	on	their	available	cash	as of	their	fiscal	year	end.

We	paid	dividends	of	$56.9	million	in	fiscal	2020	and	$22.0	million	in	fiscal	2019	to	Sodiaal	under	the	terms	of	the	Yoplait	SAS,	Yoplait	Marques	SNC,	and	Liberté Marques	Sàrl	shareholder	agreements.

A	subsidiary	of	Yoplait	SAS	has	entered	into	an	exclusive	milk	supply	agreement	for	its	European	operations	with	Sodiaal	at	market-determined	prices	through	July	1, 2021.	Net	purchases	totaled	$201.8	million	for	fiscal	2020	and	$210.8	million	for	fiscal	2019.

The	holder	of	the	GMC	Class	A	Interests	receives	quarterly	preferred	distributions	from	available	net	income	based	on	the	application	of	a	floating	preferred	return	rate to	the	holder's	capital	account	balance	established	in	the	most	recent	mark-to-market	valuation	(currently	$251.5	million).	On	June	1,	2018,	the	floating	preferred	return rate	on	GMC's	Class	A	interests	was	reset	to	the	sum	of	three-month	LIBOR	plus	142.5	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.

For	financial	reporting	purposes,	the	assets,	liabilities,	results	of	operations,	and	cash	flows	of	our	non-wholly	owned	consolidated	subsidiaries	are	included	in	our Consolidated	Financial	Statements.	The	third-party	investor's	share	of	the	net	earnings	of	these	subsidiaries	is	reflected	in	net	earnings	attributable	to	redeemable	and noncontrolling	interests	in	our	Consolidated	Statements	of	Earnings.

Our	noncontrolling	interests	contain	restrictive	covenants.	As	of	May	31,	2020,	we	were	in	compliance	with	all	of	these	covenants.

# NOTE	11.	STOCKHOLDERS'	EQUITY

Cumulative	preference	stock	of	5.0	million	shares,	without	par	value,	is	authorized	but	unissued.

On	May	6,	2014,	our	Board	of	Directors	authorized	the	repurchase	of	up	to	100	million	shares	of	our	common	stock.	Purchases	under	the	authorization	can	be	made	in the	open	market	or	in	privately	negotiated	transactions,	including	the	use	of	call	options	and	other	derivative	instruments,	Rule	10b5-1	trading	plans,	and	accelerated repurchase	programs.	The	authorization	has	no	specified	termination	date.

On	March	27,	2018,	we	issued	22.7	million	shares	of	the	Company's	common	stock,	par	value	$0.10	per	share,	at	a	public	offering	price	of	$44.00	per	share	for	total proceeds	of	$1.0	billion.	We	paid	$30.1	million	in	issuance	costs	that	were	recorded	in	additional	paid-in	capital.	The	net	proceeds	of	$969.9	million	were	used	to	finance a	portion	of	the	acquisition	of	Blue	Buffalo	Pet	Products,	Inc.	("Blue	Buffalo").

# Share	repurchases	were	as	follows:

# Fiscal	Year

| In	Millions | 2020 | 2019 | 2018 |
| :--- | :--- | :--- | :--- |
| Shares\tof\tcommon\tstock | 0.1 | - | 10.9 |
| Aggregate\tpurchase\tprice | $3.4 | $1.1 | $601.6 |

The	following	table	provides	details	of	total	comprehensive	income:

|  |  |  |  | Noncontrolling | Redeemable |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | General\tMills |  | Interests | Interest |
| In\tMillions | Pretax | Tax | Net | Net | Net |
| Net\tearnings,\tincluding\tearnings\tattributable\tto\tredeemable\tand |  |  |  |  |  |
| noncontrolling\tinterests |  |  | $2,181.2 | $12.9 | $16.7 |
| Other\tcomprehensive\tincome\t(loss): |  |  |  |  |  |
| Foreign\tcurrency\ttranslation | $(149.1) | $- | (149.1) | (2.6) | (17.4) |
| Net\tactuarial\tloss | (290.2) | 65.6 | (224.6) | - | - |
| Other\tfair\tvalue\tchanges: |  |  |  |  |  |
| Hedge\tderivatives | 4.4 | (1.2) | 3.2 | - | - |
| Reclassification\tto\tearnings: |  |  |  |  |  |
| Hedge\tderivatives\t(a) | 4.3 | (0.7) | 3.6 | - | 0.5 |
| Amortization\tof\tlosses\tand\tprior\tservice\tcosts\t(b) | 101.3 | (23.4) | 77.9 | - | - |
| Other\tcomprehensive\tloss | (329.3) | 40.3 | (289.0) | (2.6) | (16.9) |
| Total\tcomprehensive\tincome\t(loss) |  |  | $1,892.2 | $10.3 | $(0.2) |
| (a) |  |  |  |  |  |

(a) 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.	Please	refer	to	Note	2.

|  |  |  |  | Noncontrolling | Redeemable |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | General\tMills |  | Interests | Interest |
| In\tMillions | Pretax | Tax | Net | Net | Net |
| Net\tearnings,\tincluding\tearnings\tattributable\tto\tredeemable\tand |  |  |  |  |  |
| noncontrolling\tinterests |  |  | $1,752.7 | $13.9 | $19.6 |
| Other\tcomprehensive\tincome\t(loss): |  |  |  |  |  |
| Foreign\tcurrency\ttranslation | $(38.3) | $- | (38.3) | (13.5) | (31.0) |
| Net\tactuarial\tloss | (325.6) | 72.2 | (253.4) | - | - |
| Other\tfair\tvalue\tchanges: |  |  |  |  |  |
| Hedge\tderivatives | 15.9 | (3.7) | 12.2 | - | (0.1) |
| Reclassification\tto\tearnings: |  |  |  |  |  |
| Securities\t(a) | (2.6) | 0.6 | (2.0) | - | - |
| Hedge\tderivatives\t(b) | 0.1 | 0.4 | 0.5 | - | 0.4 |
| Amortization\tof\tlosses\tand\tprior\tservice\tcosts\t(c) | 107.5 | (22.9) | 84.6 | - | - |
| Other\tcomprehensive\tloss | (243.0) | 46.6 | (196.4) | (13.5) | (30.7) |
| Total\tcomprehensive\tincome\t(loss) |  |  | $1,556.3 | $0.4 | $(11.1) |
| (a) |  |  |  |  |  |

(a) Gain	reclassified	from	AOCI	into	earnings	is	reported	in	interest,	net	for	securities.

(b) 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.	Please	refer	to	Note	2.

|  |  |  |  | Noncontrolling | Redeemable |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | General\tMills |  | Interests | Interest |
| In\tMillions | Pretax | Tax | Net | Net | Net |
| Net\tearnings,\tincluding\tearnings\tattributable\tto\tredeemable\tand |  |  |  |  |  |
| noncontrolling\tinterests |  |  | $2,131.0 | $13.4 | $18.6 |
| Other\tcomprehensive\tincome\t(loss): |  |  |  |  |  |
| Foreign\tcurrency\ttranslation | $(76.9) | $- | (76.9) | 13.5 | 26.4 |
| Net\tactuarial\tincome | 185.5 | (45.4) | 140.1 | - | - |
| Other\tfair\tvalue\tchanges: |  |  |  |  |  |
| Securities | 1.8 | (0.6) | 1.2 | - | - |
| Hedge\tderivatives | (64.7) | 14.2 | (50.5) | - | (0.3) |
| Reclassification\tto\tearnings: |  |  |  |  |  |
| Securities\t(a) | (6.6) | 1.5 | (5.1) | - | - |
| Hedge\tderivatives\t(b) | 24.9 | (6.4) | 18.5 | - | (1.1) |
| Amortization\tof\tlosses\tand\tprior\tservice\tcosts\t(c) | 176.8 | (59.2) | 117.6 | - | - |
| Other\tcomprehensive\tincome | 240.8 | (95.9) | 144.9 | 13.5 | 25.0 |
| Total\tcomprehensive\tincome |  |  | $2,275.9 | $26.9 | $43.6 |

(b) Loss	(gain)	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.

In	fiscal	2020,	2019,	and	2018,	except	for	reclassifications	to	earnings,	changes	in	other	comprehensive	income	(loss)	were	primarily	non-cash	items.

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

| In	Millions | May	31,	2020 | May	26,	2019 |
| :--- | :--- | :--- |
| Foreign\tcurrency\ttranslation\tadjustments | $(889.0) | $(739.9) |
| Unrealized\tloss\tfrom: |  |  |
| Hedge\tderivatives | (12.6) | (19.4) |
| Pension,\tother\tpostretirement,\tand\tpostemployment\tbenefits: |  |  |
| Net\tactuarial\tloss | (2,022.5) | (1,880.5) |
| Prior\tservice\tcredits | 9.7 | 14.4 |
| Accumulated\tother\tcomprehensive\tloss | $(2,914.4) | $(2,625.4) |

In	fiscal	2018,	we	adopted	new	accounting	requirements	that	provide	the	option	to	reclassify	stranded	income	tax	effects	resulting	from	the	TCJA	from	AOCI	to	retained earnings.	We	elected	to	reclassify	the	stranded	income	tax	effects	of	the	TCJA	of	$329.4	million	from	AOCI	to	retained	earnings.	Please	see	Note	15	for	additional information.

# NOTE	12.	STOCK	PLANS

We	use	broad-based	stock	plans	to	help	ensure	that	management's	interests	are	aligned	with	those	of	our	shareholders.	As	of	May	31,	2020,	a	total	of	26.4	million shares	were	available	for	grant	in	the	form	of	stock	options,	restricted	stock,	restricted	stock	units,	and	shares	of	unrestricted	stock	under	the	2017	Stock	Compensation Plan	(2017	Plan).	The	2017	Plan	also	provides	for	the	issuance	of	cash-settled	share-based	units,	stock	appreciation	rights,	and	performance-based	stock	awards.	Stock- based	awards	now	outstanding	include	some	granted	under	the	2009	and	2011	stock	plans	and	the	2006	and	2011	compensation	plans	for	non-employee	directors,	under which	no	further	awards	may	be	granted.	The	stock	plans	provide	for	potential	accelerated	vesting	of	awards	upon	retirement,	 termination,	or	death	of	eligible employees	and	directors.

# Stock	Options

|  | 2020 | 2019 | 2018 |
| :--- | :--- | :--- | :--- |
| Estimated\tfair\tvalues\tof\tstock\toptions\tgranted | $7.10 | $5.35 | $6.18 |
| Assumptions: |  |  |  |
| Risk-free\tinterest\trate | 2.0 % | 2.9 % | 2.2 % |
| Expected\tterm | 8.5 years | 8.5 years | 8.2 years |
| Expected\tvolatility | 17.4 % | 16.3 % | 15.8 % |
| Dividend\tyield | 3.6 % | 4.3 % | 3.6 % |

We	estimate	the	fair	value	of	each	option	on	the	grant	date	using	a	Black-Scholes	option-pricing	model,	which	requires	us	to	make	predictive	assumptions	regarding future	stock	price	volatility,	employee	exercise	behavior,	dividend	yield,	and	the	forfeiture	rate.	We	estimate	our	future	stock	price	volatility	using	the	historical volatility	over	the	expected	term	of	the	option,	excluding	time	periods	of	volatility	we	believe	a	marketplace	participant	would	exclude	in	estimating	our	stock	price volatility.	We	also	have	considered,	but	did	not	use,	implied	volatility	in	our	estimate,	because	trading	activity	in	options	on	our	stock,	especially	those	with	tenors	of greater	than	6	months,	is	insufficient	to	provide	a	reliable	measure	of	expected	volatility.

Our	expected	term	represents	the	period	of	time	that	options	granted	are	expected	to	be	outstanding	based	on	historical	data	to	estimate	option	exercises	and	employee terminations	within	the	valuation	model.	Separate	groups	of	employees	have	similar	historical	exercise	behavior	and	therefore	were	aggregated	into	a	single	pool	for valuation	purposes.	The	weighted-average	expected	term	for	all	employee	groups	is	presented	in	the	table	above.	The	risk-free	interest	rate	for	periods	during	the expected	term	of	the	options	is	based	on	the	U.S.	Treasury	zero-coupon	yield	curve	in	effect	at	the	time	of	grant.

Any	corporate	income	tax	benefit	realized	upon	exercise	or	vesting	of	an	award	in	excess	of	that	previously	recognized	in	earnings	(referred	to	as	a	windfall	tax	benefit) is	presented	in	our	Consolidated	Statements	of	Cash	Flows	as	an	operating	cash	flow.	Realized	windfall	tax	benefits	and	shortfall	tax	deficiencies	related	to	the	exercise or	vesting	of	stock-based	awards	are	recognized	in	the	Consolidated	Statement	of	Earnings.	We	recognized	windfall	tax	benefits	from	stock-based	payments	in	income tax	expense	in	our	Consolidated	Statements	of	Earnings	of	$27.3	million	in	fiscal	2020,	$24.5	million	in	fiscal	2019,	and	$25.5	million	in	fiscal	2018.

Options	may	be	priced	at	100	percent	or	more	of	the	fair	market	value	on	the	date	of	grant,	and	generally	vest	four	years	after	the	date	of	grant.	Options	generally	expire within	10	years	and	one	month	after	the	date	of	grant.

Information	on	stock	option	activity	follows:

|  | Outstanding | Weighted-Average | Weighted-Average	Remaining | Aggregate	Intrinsic |
| :--- | :--- | :--- | :--- | :--- |
|  | (Thousands) | Exercise\tPrice\tPer\tShare | Contractual\tTerm\t(Years) | Value\t(Millions) |
| Balance\tas\tof\tMay\t26,\t2019 | 23,653.0 | $47.12 | 4.82 | $180.00 |
| Granted | 2,065.0 | 53.70 |  |  |
| Exercised | (7,066.0) | 37.98 |  |  |
| Forfeited\tor\texpired | (487.4) | 55.91 |  |  |
| Outstanding\tas\tof\tMay\t31,\t2020 | 18,164.6 | $51.21 | 5.53 | $222.6 |
| Exercisable\tas\tof\tMay\t31,\t2020 | 8,706.4 | $47.28 | 3.25 | $137.3 |

Stock-based	compensation	expense	related	to	stock	option	awards	was	$13.4	million	in	fiscal	2020,	$14.7	million	in	fiscal	2019,	and	$15.5	million	in	fiscal	2018. Compensation	 expense	 related	 to	 stock-based	 payments	 recognized	 in	 our	 Consolidated	 Statements	 of	 Earnings	 includes	 amounts	 recognized	 in	 restructuring, impairment,	and	other	exit	costs	for	fiscal	2018.

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

| In	Millions | 2020 | 2019 | 2018 |
| :--- | :--- | :--- | :--- |
| Net\tcash\tproceeds | $263.4 | $241.4 | $99.3 |
| Intrinsic\tvalue\tof\toptions\texercised | $132.9 | $126.7 | $83.6 |

# Restricted	Stock,	Restricted	Stock	Units,	and	Performance	Share	Units

Stock	and	units	settled	in	stock	subject	to	a	restricted	period	and	a	purchase	price,	if	any	(as	determined	by	the	Compensation	Committee	of	the	Board	of	Directors),	may be	granted	to	key	employees	under	the	2017	Plan.	Restricted	stock	and	restricted	stock	units	generally	vest	and	become	unrestricted	four	years	after	the	date	of	grant. Performance	share	units	are	earned	primarily	based	on	our	future	achievement	of	three-year	goals	for	average	organic	net	sales	growth	and	cumulative	free	cash	flow. Performance	share	units	are	settled	in	common	stock	and	are	generally	subject	to	a	three	year	performance	and	vesting	period.	The	sale	or	transfer	of	these	awards	is restricted	during	the	vesting	period.	Participants	holding	restricted	stock,	but	not	restricted	stock	units	or	performance	share	units,	are	entitled	to	vote	on	matters submitted	to	holders	of	common	stock	for	a	vote.	These	awards	accumulate	dividends	from	the	date	of	grant,	but	participants	only	receive	payment	if	the	awards	vest.

Information	on	restricted	stock	unit	and	performance	share	unit	activity	follows:

|  | Equity	Classified |  | Liability	Classified |  |
| :--- | :--- | :--- | :--- | :--- |
|  | Share-Settled\tUnits | Weighted-Average | Share-Settled\tUnits | Weighted-Average |
|  | (Thousands) | Grant-Date\tFair\tValue | (Thousands) | Grant-Date\tFair\tValue |
| Non-vested\tas\tof\tMay\t26,\t2019 | 4,272.3 | $53.87 | 108.1 | $55.45 |
| Granted | 1,913.4 | 53.27 | 34.2 | 53.64 |
| Vested | (1,039.7) | 55.81 | (29.5) | 56.38 |
| Forfeited\tor\texpired | (220.5) | 53.00 | (9.5) | 53.73 |
| Non-vested\tas\tof\tMay\t31,\t2020 | 4,925.5 | $53.26 | 103.3 | $54.75 |

|  |  | Fiscal	Year |  |
| :--- | :--- | :--- | :--- |
|  | 2020 | 2019 | 2018 |
| Number\tof\tunits\tgranted\t(thousands) | 1,947.6 | 1,848.2 | 1,551.3 |
| Weighted-average\tprice\tper\tunit | $53.28 | $46.14 | $55.12 |

The	total	grant-date	fair	value	of	restricted	stock	unit	awards	that	vested	was	$59.7	million	in	fiscal	2020	and	$47.1	million	in	fiscal	2019.

As	of	May	31,	2020,	unrecognized	compensation	expense	related	to	non-vested	stock	options,	restricted	stock	units,	and	performance	share	units	was	$104.0	million. This	expense	will	be	recognized	over	20	months,	on	average.

Stock-based	compensation	expense	related	to	restricted	stock	units	and	performance	share	units	was	$81.5	million	for	fiscal	2020,	$70.2	million	for	fiscal	2019,	and $62.4	 million	 for	 fiscal	 2018.	 Compensation	 expense	 related	 to	 stock-based	 payments	 recognized	 in	 our	 Consolidated	 Statements	 of	 Earnings	 includes	 amounts recognized	in	restructuring,	impairment,	and	other	exit	costs	for	fiscal	2019	and	2018.

# NOTE	13.	EARNINGS	PER	SHARE

Basic	and	diluted	EPS	were	calculated	using	the	following:

| In	Millions,	Except	per	Share	Data | 2020 | 2019 | 2018 |
| :--- | :--- | :--- | :--- |
| Net\tearnings\tattributable\tto\tGeneral\tMills | $2,181.2 | $1,752.7 | $2,131.0 |
| Average\tnumber\tof\tcommon\tshares\t-\tbasic\tEPS | 608.1 | 600.4 | 576.8 |
| Incremental\tshare\teffect\tfrom:\t(a) |  |  |  |
| Stock\toptions | 2.7 | 3.1 | 6.9 |
| Restricted\tstock\tunits,\tperformance\tshare\tunits,\tand\tother | 2.5 | 1.9 | 2.0 |
| Average\tnumber\tof\tcommon\tshares\t-\tdiluted\tEPS | 613.3 | 605.4 | 585.7 |
| Earnings\tper\tshare\t-\tbasic | $3.59 | $2.92 | $3.69 |
| Earnings\tper\tshare\t-\tdiluted | $3.56 | $2.90 | $3.64 |

(a)	Incremental	shares	from	stock	options,	restricted	stock	units,	and	performance	share	units	are	computed	by	the	treasury	stock	method.	Stock	options,	restricted	stock units,	and	performance	share	units	excluded	from	our	computation	of	diluted	EPS	because	they	were	not	dilutive	were	as	follows:

|  |  | Fiscal	Year |  |
| :--- | :--- | :--- | :--- |
| In\tMillions | 2020 | 2019 | 2018 |
| Anti-dilutive\tstock\toptions,\trestricted\tstock\tunits,\tand\tperformance\tshare\tunits | 8.4 | 14.1 | 8.9 |

# NOTE	14.	RETIREMENT	BENEFITS	AND	POSTEMPLOYMENT	BENEFITS

# Defined	Benefit	Pension	Plans

We	have	defined	benefit	pension	plans	covering	many	employees	in	the	United	States,	Canada,	Switzerland,	France,	and	the	United	Kingdom.	Benefits	for	salaried employees	are	based	on	length	of	service	and	final	average	compensation.	Benefits	for	hourly	employees	include	various	monthly	amounts	for	each	year	of	credited service.	Our	funding	policy	is	consistent	with	the	requirements	of	applicable	laws.	We	made	no	voluntary	contributions	to	our	principal	U.S.	plans	in	fiscal	2020	or	fiscal 2019.	We	do	not	expect	to	be	required	to	make	any	contributions	in	fiscal	2021.	Our	principal	domestic	retirement	plan	covering	salaried	employees	has	a	provision	that any	excess	pension	assets	would	be	allocated	to	active	participants	if	the	plan	is	terminated	within	five	years	of	a	change	in	control.	All	salaried	employees	hired	on	or after	June	1,	2013,	are	eligible	for	a	retirement	program	that	does	not	include	a	defined	benefit	pension	plan.

In	fiscal	2018,	we	approved	an	amendment	to	reorganize	the	U.S.	qualified	defined	benefit	pension	plans	and	the	supplemental	pension	plans	that	resulted	in	the	spinoff of	a	portion	of	the	General	Mills	Pension	Plan	(the	Plan)	and	the	2005	Supplemental	Retirement	Plan	and	the	Supplemental	Retirement	Plan	(Grandfathered)	(together, the	Supplemental	Plans)	into	new	plans	effective	May	31,	2018.	The	benefits	offered	to	the	plans'	participants	were	unchanged.	The	result	of	the	reorganization	was	the creation	of	the	General	Mills	Pension	Plan	I	(Plan	I)	and	the	2005	Supplemental	Retirement	Plan	I	and	the	Supplemental	Retirement	Plan	I	(Grandfathered)	(together, the	Supplemental	Plans	I).	The	reorganization	was	made	 to	facilitate	a	 targeted	 investment	strategy	over	 time	and	 to	provide	additional	flexibility	 in	evaluating opportunities	to	reduce	risk	and	volatility.	Actuarial	gains	and	losses	associated	with	the	Plan	and	the	Supplemental	Plans	are	amortized	over	the	average	remaining service	life	of	the	active	participants.	Actuarial	gains	and	losses	associated	with	the	Plan	I	and	the	Supplemental	Plans	I	are	amortized	over	the	average	remaining	life	of the	participants.

# Other	Postretirement	Benefit	Plans

We	also	sponsor	plans	that	provide	health	care	benefits	to	many	of	our	retirees	in	the	United	States,	Canada,	and	Brazil.	The	United	States	salaried	health	care	benefit plan	is	contributory,	with	retiree	contributions	based	on	years	of	service.	We	make	decisions	to	fund	related	trusts	for	certain	employees	and	retirees	on	an	annual	basis. We	made	no	voluntary	contributions	to	these	plans	in	fiscal	2020	or	fiscal	2019.	We	do	not	expect	to	be	required	to	make	any	contributions	in	fiscal	2021.

Assumed	health	care	cost	trends	are	as	follows:

|  | Fiscal	Year | Fiscal	Year |  |  |
| :--- | :--- | :--- | :--- | :--- |
|  | 2020 | 2020 | 2019 | 2019 |
| Health\tcare\tcost\ttrend\trate\tfor\tnext\tyear | 6.2%\tand\t6.5% | 6.2%\tand\t6.5% | 6.4%\tand\t6.7% | 6.4%\tand\t6.7% |
| Rate\tto\twhich\tthe\tcost\ttrend\trate\tis\tassumed\tto\tdecline\t(ultimate\trate) | 4.5 | % | 4.5 | % |
| Year\tthat\tthe\trate\treaches\tthe\tultimate\ttrend\trate | 2029 |  | 2029 |  |

# Postemployment	Benefit	Plans

Under	certain	circumstances,	we	also	provide	accruable	benefits,	primarily	severance,	to	former	or	inactive	employees	in	the	United	States,	Canada,	and	Mexico.	We recognize	an	obligation	for	any	of	these	benefits	that	vest	or	accumulate	with	service.	Postemployment	benefits	that	do	not	vest	or	accumulate	with	service	(such	as severance	based	solely	on	annual	pay	rather	than	years	of	service)	are	charged	to	expense	when	incurred.	Our	postemployment	benefit	plans	are	unfunded.

Summarized	financial	information	about	defined	benefit	pension,	other	postretirement	benefit,	and	postemployment	benefit	plans	is	presented	below:

|  | Defined	Benefit	Pension | Defined	Benefit	Pension | Other	Postretirement	Benefit | Other	Postretirement	Benefit | Postemployment	Benefit | Postemployment	Benefit |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Plans\nFiscal\tYear | Plans\nFiscal\tYear | Plans\nFiscal\tYear | Plans\nFiscal\tYear | Plans\nFiscal\tYear |  |
| In\tMillions | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 |
| Change\tin\tPlan\tAssets: |  |  |  |  |  |  |
| Fair\tvalue\tat\tbeginning\tof\tyear | $6,291.6 | $6,177.4 | $753.8 | $726.1 |  |  |
| Actual\treturn\ton\tassets | 983.7 | 391.9 | 65.0 | 41.3 |  |  |
| Employer\tcontributions | 32.9 | 30.4 | 0.1 | 0.1 |  |  |
| Plan\tparticipant\tcontributions | 6.7 | 3.9 | 13.8 | 15.0 |  |  |
| Benefits\tpayments | (317.2) | (305.2) | (39.2) | (28.7) |  |  |
| Foreign\tcurrency | (4.5) | (6.8) | - | - |  |  |
| Fair\tvalue\tat\tend\tof\tyear\t(a) | $6,993.2 | $6,291.6 | $793.5 | $753.8 |  |  |
| Change\tin\tProjected\tBenefit\tObligation: |  |  |  |  |  |  |
| Benefit\tobligation\tat\tbeginning\tof\tyear | $6,750.7 | $6,416.0 | $824.1 | $871.8 | $128.0 | $126.7 |
| Service\tcost | 92.7 | 94.6 | 9.4 | 9.9 | 8.3 | 7.6 |
| Interest\tcost | 230.5 | 248.0 | 27.1 | 33.1 | 2.6 | 3.0 |
| Plan\tamendment | 1.2 | - | - | - | - | 1.7 |
| Curtailment/other | (1.2) | (0.7) | - | - | - | - |
| Plan\tparticipant\tcontributions | 6.7 | 3.9 | 13.8 | 15.0 | - | - |
| Medicare\tPart\tD\treimbursements | - | - | 2.7 | 2.5 | - | - |
| Actuarial\tloss\t(gain) | 881.8 | 301.8 | (38.3) | (45.4) | 17.7 | 2.6 |
| Benefits\tpayments | (317.7) | (305.8) | (63.5) | (62.2) | (6.2) | (13.2) |
| Foreign\tcurrency | (4.5) | (7.1) | (1.6) | (0.6) | (0.1) | (0.4) |
| Projected\tbenefit\tobligation\tat\tend\tof\tyear\t(a) | $7,640.2 | $6,750.7 | $773.7 | $824.1 | $150.3 | $128.0 |
| Plan\tassets\tless\tthan\tbenefit\tobligation\tas\tof\tfiscal\tyear\tend | $(647.0) | $(459.1) | $19.8 | $(70.3) | $(150.3) | $(128.0) |

During	fiscal	2020,	the	increase	in	defined	benefit	pension	benefit	obligations	was	primarily	driven	by	actuarial	losses	due	to	a	decrease	in	the	discount	rate	and	an update	in	mortality	rates.	The	decrease	in	other	postretirement	obligations	was	primarily	driven	by	a	decrease	in	expected	future	claims,	partially	offset	by	losses	due	to	a decrease	in	the	discount	rate.

During	fiscal	2019,	the	increase	in	defined	benefit	pension	benefit	obligations	was	primarily	driven	by	actuarial	losses	due	to	a	decrease	in	the	discount	rate.	The decrease	in	other	postretirement	obligations	was	primarily	driven	by	a	decrease	in	expected	future	claims,	partially	offset	by	losses	due	to	a	decrease	in	the	discount	rate.

As	of	May	31,	2020,	other	postretirement	benefit	plans	had	benefit	obligations	of	$479.4	million	that	exceeded	plan	assets	of	$248.0	million.	As	of	May	26,	2019,	other postretirement	benefit	plans	had	benefit	obligations	of	$498.4	million	that	exceeded	plan	assets	of	$233.7	million.	Postemployment	benefit	plans	are	not	funded	and	had benefit	obligations	of	$150.3	million	and	$128.0	million	as	of	May	31,	2020	and	May	26,	2019,	respectively.

|  |  |  | Other	Postretirement | Other	Postretirement | Postemployment | Postemployment |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Defined\tBenefit\tPension\tPlans | Defined\tBenefit\tPension\tPlans | Benefit\tPlans | Benefit\tPlans | Benefit\tPlans | Benefit\tPlans | Total | Total |
|  | Fiscal\tYear | Fiscal\tYear | Fiscal\tYear | Fiscal\tYear | Fiscal\tYear | Fiscal\tYear | Fiscal\tYear | Fiscal\tYear |
| In\tMillions | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 |
| Net\tactuarial\t(loss)\tgain | $(2,136.6) | $(1,961.6) | $129.5 | $81.0 | $(15.4) | $0.1 | $(2,022.5) | $(1,880.5) |
| Prior\tservice\t(costs)\tcredits | (6.0) | (5.9) | 21.0 | 26.3 | (5.3) | (6.0) | 9.7 | 14.4 |
| Amounts\trecorded\tin\taccumulated\tother |  |  |  |  |  |  |  |  |
| comprehensive\tloss | $(2,142.6) | $(1,967.5) | \t$150.5 | $107.3 | $(20.7) | $(5.9) | $(2,012.8) | $(1,866.1) |

Plans	with	accumulated	benefit	obligations	in	excess	of	plan	assets	as	of	May	31,	2020	and	May	26,	2019	are	as	follows:

Components	of	net	periodic	benefit	expense	are	as	follows:

|  |  | Fiscal	Year |  |  | Fiscal	Year |  | Fiscal	Year | Fiscal	Year |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In\tMillions | 2020 | 2019 | 2018 | 2020 | 2019 | 2018 | 2020 | 2019 | \t2018 |
| Service\tcost | $92.7 | $94.6 | $102.9 | $9.4 | $9.9 | $11.6 | $8.3 | $7.6 | $8.6 |
| Interest\tcost | 230.5 | 248.0 | 217.9 | 27.1 | 33.1 | 30.1 | 2.6 | 3.0 | 2.3 |
| Expected\treturn\ton\tplan\tassets | (449.9) | (445.8) | (480.2) | (42.1) | (40.4) | (52.2) | - | - | - |
| Amortization\tof\tlosses\t(gains) | 106.0 | 109.8 | 177.0 | (2.1) | 0.6 | 0.8 | 0.4 | 0.1 | 0.8 |
| Amortization\tof\tprior\tservice\tcosts |  |  |  |  |  |  |  |  |  |
| (credits) | 1.6 | 1.5 | 1.9 | (5.5) | (5.5) | (5.4) | 0.9 | 0.7 | 0.6 |
| Other\tadjustments | - | - | - | - | - | - | 17.7 | 6.7 | 6.7 |
| Settlement\tor\tcurtailment\tlosses | - | 0.3 | - | - | - | - | - | - | - |
| Net\t(income)\texpense | $(19.1) | $8.4 | $19.5 | $(13.2) | $(2.3) | $(15.1) | $29.9 | $18.1 | $19.0 |

# Assumptions

Weighted-average	assumptions	used	to	determine	fiscal	year-end	benefit	obligations	are	as	follows:

|  | Defined	Benefit	Pension	Plans | Defined	Benefit	Pension	Plans | Other	Postretirement	Benefit	Plans | Other	Postretirement	Benefit	Plans | Postemployment	Benefit	Plans | Postemployment	Benefit	Plans |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Fiscal\tYear |  | Fiscal\tYear |  | Fiscal\tYear |  |
|  | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 |
| Discount\trate | 3.20 % | 3.91 % | 3.02 % | 3.79 % | 1.85 % | 3.10 % |
| Rate\tof\tsalary\tincreases | 4.44 | 4.17 | - | - | 4.51 | 4.47 |

Weighted-average	assumptions	used	to	determine	fiscal	year	net	periodic	benefit	expense	are	as	follows:

|  | Defined	Benefit	Pension	Plans | Defined	Benefit	Pension	Plans | Defined	Benefit	Pension	Plans | Other	Postretirement	Benefit	Plans | Other	Postretirement	Benefit	Plans | Other	Postretirement	Benefit	Plans | Postemployment	Benefit	Plans | Postemployment	Benefit	Plans | Postemployment	Benefit	Plans |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | Fiscal\tYear |  |  | Fiscal\tYear |  |  | Fiscal\tYear |  |
|  | 2020 | 2019 | 2018 | 2020 | 2019 | 2018 | 2020 | 2019 | 2018 |
| Discount\trate | 3.91 % | 4.20 % | 4.08 % | 3.79 % | 4.17 % | 3.92 % | 3.10 % | 3.60 % | 2.87 % |
| Service\tcost\teffective\trate | 4.19 | 4.34 | 4.37 | 4.04 | 4.27 | 4.27 | 3.51 | 3.99 | 3.54 |
| Interest\tcost\teffective\trate | 3.47 | 3.92 | 3.45 | 3.28 | 3.80 | 3.24 | 2.84 | 3.37 | 2.67 |
| Rate\tof\tsalary\tincreases | 4.17 | 4.27 | 4.25 | - | - | - | 4.47 | 4.44 | 4.46 |
| Expected\tlong-term\trate\tof\treturn\ton\tplan |  |  |  |  |  |  |  |  |  |
| assets | 6.95 | 7.25 | 7.88 | 5.67 | 5.67 | 7.59 | - | - | - |

We	estimate	the	service	and	interest	cost	components	of	the	net	periodic	benefit	expense	for	our	United	States	and	most	of	our	international	defined	benefit	pension, other	postretirement	benefit,	and	postemployment	benefit	plans	utilizing	a	full	yield	curve	approach	by	applying	the	specific	spot	rates	along	the	yield	curve	used	to determine	the	benefit	obligation	to	the	relevant	projected	cash	flows.	Our	discount	rate	assumptions	are	determined	annually	as	of	May	31	for	our	defined	benefit pension,	other	postretirement	benefit,	and	postemployment	benefit	plan	obligations.	We	also	use	discount	rates	as	of	May	31	to	determine	defined	benefit	pension,	other postretirement	benefit,	and	postemployment	benefit	plan	income	and	expense	for	the	following	fiscal	year.	We	work	with	our	outside	actuaries	to	determine	the	timing and	amount	of	expected	future	cash	outflows	to	plan	participants	and,	using	the	Aa	Above	Median	corporate	bond	yield,	to	develop	a	forward	interest	rate	curve, including	a	margin	to	that	index	based	on	our	credit	risk.	This	forward	interest	rate	curve	is	applied	to	our	expected	future	cash	outflows	to	determine	our	discount	rate assumptions.

# Fair	Value	of	Plan	Assets

The	fair	values	of	our	pension	and	postretirement	benefit	plans'	assets	and	their	respective	levels	in	the	fair	value	hierarchy	by	asset	category	were	as	follows:

|  |  | Fiscal	Year	2020 |  | Total |  | Fiscal	Year	2019 | Fiscal	Year	2019 | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| In\tMillions | Level\t1 | Level\t2 | Level\t3 | Assets | Level\t1 | Level\t2 | Level\t3 | Assets |
| Fair\tvalue\tmeasurement\tof\tpension\tplan\tassets: |  |  |  |  |  |  |  |  |
| Equity\t(a) | $1,039.6 | $777.7 | $- | $1,817.3 | $1,226.2 | $664.6 | $- | $1,890.8 |
| Fixed\tincome\t(b) | 1,833.3 | 1,667.4 | - | 3,500.7 | 1,635.5 | 1,144.9 | - | 2,780.4 |
| Real\tasset\tinvestments\t(c) | 223.4 | 0.1 | - | 223.5 | 179.4 | 59.9 | - | 239.3 |
| Other\tinvestments\t(d) | - | - | 0.2 | 0.2 | - | - | 0.3 | 0.3 |
| Cash\tand\taccruals | 180.3 | - | - | 180.3 | 186.5 | - | - | 186.5 |
| Fair\tvalue\tmeasurement\tof\tpension\tplan\tassets | $3,276.6 | $2,445.2 | $0.2 | $5,722.0 | \t$3,227.6 | $1,869.4 | $0.3 | $5,097.3 |
| Assets\tmeasured\tat\tnet\tasset\tvalue\t(e) |  |  |  | 1,271.2 |  |  |  | 1,194.3 |
| Total\tpension\tplan\tassets\t(f) |  |  |  | \t$6,993.2 |  |  |  | \t$6,291.6 |
| Fair\tvalue\tmeasurement\tof\tpostretirement\tbenefit |  |  |  |  |  |  |  |  |
| plan\tassets: |  |  |  |  |  |  |  |  |
| Equity\t(a) | $- | $46.9 | $- | $46.9 | \t$- | $66.8 | $- | $66.8 |
| Fixed\tincome\t(b) | 157.5 | 268.4 | - | 425.9 | 139.7 | 241.4 | - | 381.1 |
| Real\tasset\tinvestments\t(c) | 0.1 | - | - | 0.1 | 0.3 | - | - | 0.3 |
| Cash\tand\taccruals | 16.7 | - | - | 16.7 | 11.1 | - | - | 11.1 |
| Fair\tvalue\tmeasurement\tof\tpostretirement\tbenefit |  |  |  |  |  |  |  |  |
| plan\tassets | $174.3 | $315.3 | $- | $489.6 | \t$151.1 | $308.2 | $- | $459.3 |
| Assets\tmeasured\tat\tnet\tasset\tvalue\t(e) |  |  |  | 303.9 |  |  |  | 294.5 |
| Total\tpostretirement\tbenefit\tplan\tassets\t(f) |  |  |  | \t$793.5 |  |  |  | \t$753.8 |

(a) Primarily	publicly	traded	common	stock	for	purposes	of	total	return	and	to	maintain	equity	exposure	consistent	with	policy	allocations.	Investments	include: United	States	and	international	equity	securities,	mutual	funds,	and	equity	futures	valued	at	closing	prices	from	national	exchanges,	and	commingled	funds valued	at	unit	values	provided	by	the	investment	managers,	which	are	based	on	the	fair	value	of	the	underlying	investments.

(b) 	Primarily	government	and	corporate	debt	securities	and	futures	for	purposes	of	total	return,	managing	fixed	income	exposure	to	policy	allocations,	and duration	targets.	Investments	include:	fixed	income	securities	and	bond	futures	generally	valued	at	closing	prices	from	national	exchanges,	fixed	income pricing	models,	and	independent	financial	analysts;	and	fixed	income	commingled	funds	valued	at	unit	values	provided	by	the	investment	managers,	which	are based	on	the	fair	value	of	the	underlying	investments.

(c) 	Publicly	 traded	 common	 stocks	 in	 energy,	 real	 estate,	 and	 infrastructure	 for	 the	 purpose	 of	 total	 return.	 Investments	 include:	 energy,	 real	 estate,	 and infrastructure	securities	generally	valued	at	closing	prices	from	national	exchanges,	and	commingled	funds	valued	at	unit	values	provided	by	the	investment managers,	which	are	based	on	the	fair	value	of	the	underlying	investments.

(d) Insurance	and	annuity	contracts	to	provide	a	stable	stream	of	income	for	pension	retirees.	Fair	values	are	based	on	the	fair	value	of	the	underlying	investments and	contract	fair	values	established	by	the	providers.

(e) Primarily	private	investments	and	common	collective	trusts	that	are	measured	at	fair	value	using	the	net	asset	value	per	share	(or	its	equivalent)	practical expedient	and	have	not	been	classified	in	the	fair	value	hierarchy.

There	were	no	material	changes	in	our	level	3	investments	in	fiscal	2020	and	fiscal	2019.

Weighted-average	asset	allocations	for	our	defined	benefit	pension	and	other	postretirement	benefit	plans	are	as	follows:

|  | Defined	Benefit	Pension	Plans | Defined	Benefit	Pension	Plans | Defined	Benefit	Pension	Plans |  | Other	Postretirement	Benefit	Plans | Other	Postretirement	Benefit	Plans | Other	Postretirement	Benefit	Plans | Other	Postretirement	Benefit	Plans |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | 2020 | Fiscal\tYear | 2019 |  | 2020 | Fiscal\tYear | 2019 |  |
| Asset\tcategory: |  |  |  |  |  |  |  |  |
| United\tStates\tequities | 19.7 | % | 20.3 | % | 18.1 | % | 19.1 | % |
| International\tequities | 11.0 |  | 12.5 |  | 9.8 |  | 11.2 |  |
| Private\tequities | 6.2 |  | 8.1 |  | 4.4 |  | 4.9 |  |
| Fixed\tincome | 52.8 |  | 46.7 |  | 64.8 |  | 61.3 |  |
| Real\tassets | 10.3 |  | 12.4 |  | 2.9 |  | 3.5 |  |
| Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |

The	investment	objective	for	our	defined	benefit	pension	and	other	postretirement	benefit	plans	is	to	secure	the	benefit	obligations	to	participants	at	a	reasonable	cost	to us.	Our	goal	is	to	optimize	the	long-term	return	on	plan	assets	at	a	moderate	level	of	risk.	The	defined	benefit	pension	plan	and	other	postretirement	benefit	plan portfolios	are	broadly	diversified	across	asset	classes.	Within	asset	classes,	the	portfolios	are	further	diversified	across	investment	styles	and	investment	organizations. For	the	U.S.	defined	benefit	pension	plans,	the	long-term	investment	policy	allocation	is:	17	percent	to	equities	in	the	United	States;	11	percent	to	international	equities; 9	percent	to	private	equities;	50	percent	to	fixed	income;	and	13	percent	to	real	assets	(real	estate,	energy,	and	infrastructure).	For	other	U.S.	postretirement	benefit	plans, the	long-term	investment	policy	allocations	are:	18	percent	to	equities	in	the	United	States;	10	percent	to	international	equities;	4	percent	to	private	equities;	65	percent	to fixed	income;	and	3	percent	to	real	assets	(real	estate,	energy,	and	timber).	The	actual	allocations	to	these	asset	classes	may	vary	tactically	around	the	long-term	policy allocations	based	on	relative	market	valuations.

# Contributions	and	Future	Benefit	Payments

We	do	not	expect	to	be	required	to	make	contributions	to	our	defined	benefit	pension,	other	postretirement	benefit,	and	postemployment	benefit	plans	in	fiscal	2021. Actual	fiscal	2021	contributions	could	exceed	our	current	projections,	as	influenced	by	our	decision	to	undertake	discretionary	funding	of	our	benefit	trusts	and	future changes	in	regulatory	requirements.	Estimated	benefit	payments,	which	reflect	expected	future	service,	as	appropriate,	are	expected	to	be	paid	from	fiscal	2021	to	fiscal 2030	as	follows:

|  | Defined	Benefit | Other	Postretirement	Benefit | Medicare |  |
| :--- | :--- | :--- | :--- | :--- |
| In\tMillions | Pension\tPlans | Plans\tGross\tPayments | Subsidy\tReceipts | \t Postemployment\tBenefit\tPlans |
| Fiscal\t2021 | $325.4 | $43.5 | $3.4 | $24.5 |
| Fiscal\t2022 | 331.8 | 44.5 | 3.7 | 19.6 |
| Fiscal\t2023 | 338.6 | 45.6 | 3.5 | 18.1 |
| Fiscal\t2024 | 345.9 | 46.7 | 2.8 | 16.8 |
| Fiscal\t2025 | 354.5 | 48.0 | 2.9 | 15.6 |
| Fiscal\t2026-2030 | 1,899.7 | 247.0 | 14.4 | 63.6 |

# Defined	Contribution	Plans

The	General	Mills	Savings	Plan	is	a	defined	contribution	plan	that	covers	domestic	salaried,	hourly,	nonunion,	and	certain	union	employees.	This	plan	is	a	401(k) savings	plan	that	includes	a	number	of	investment	funds,	including	a	Company	stock	fund	and	an	Employee	Stock	Ownership	Plan	(ESOP).	We	sponsor	another	money purchase	plan	for	certain	domestic	hourly	employees	with	net	assets	of	$20.6	million	as	of	May	31,	2020,	and	$22.3	million	as	of	May	26,	2019.	We	also	sponsor defined	contribution	plans	in	many	of	our	foreign	locations.	Our	total	recognized	expense	related	to	defined	contribution	plans	was	$90.1	million	in	fiscal	2020,	$52.7 million	in	fiscal	2019,	and	$49.2	million	in	fiscal	2018.

We	match	a	percentage	of	employee	contributions	to	the	General	Mills	Savings	Plan.	The	Company	match	is	directed	to	investment	options	of	the	participant's choosing.	The	number	of	shares	of	our	common	stock	allocated	to	participants	in	the	ESOP	was	4.6	million	as	of	May	31,	2020,	and	5.1	million	as	of	May	26,	2019.	The ESOP's	only	assets	are	our	common	stock	and	temporary	cash	balances.

The	Company	stock	fund	and	the	ESOP	collectively	held	$464.8	million	and	$410.1	million	of	Company	common	stock	as	of	May	31,	2020,	and	May	26,	2019, respectively.

# NOTE	15.	INCOME	TAXES

The	components	of	earnings	before	income	taxes	and	after-tax	earnings	from	joint	ventures	and	the	corresponding	income	taxes	thereon	are	as	follows:

| In	Millions | 2020 | 2019 | 2018 |
| :--- | :--- | :--- | :--- |
| Earnings\tbefore\tincome\ttaxes\tand\tafter-tax\tearnings\tfrom\tjoint\tventures: |  |  |  |
| United\tStates | $2,402.1 | $1,788.2 | $1,884.0 |
| Foreign | 198.1 | 293.8 | 251.6 |
| Total\tearnings\tbefore\tincome\ttaxes\tand\tafter-tax\tearnings\tfrom\tjoint\tventures | $2,600.2 | $2,082.0 | $2,135.6 |
| Income\ttaxes: |  |  |  |
| Currently\tpayable: |  |  |  |
| Federal | $381.0 | $151.9 | $441.2 |
| State\tand\tlocal | 55.3 | 35.3 | 35.2 |
| Foreign | 73.8 | 84.6 | 85.2 |
| Total\tcurrent | 510.1 | 271.8 | 561.6 |
| Deferred: |  |  |  |
| Federal | 67.8 | 86.7 | (478.5) |
| State\tand\tlocal | (56.6) | 21.6 | 15.7 |
| Foreign | (40.8) | (12.3) | (41.5) |
| Total\tdeferred | (29.6) | 96.0 | (504.3) |
| Total\tincome\ttaxes | $480.5 | $367.8 | $57.3 |

The	following	table	reconciles	the	United	States	statutory	income	tax	rate	with	our	effective	income	tax	rate:

|  | 2020 | 2019 | 2018 |
| :--- | :--- | :--- | :--- |
| United\tStates\tstatutory\trate | 21.0 % | 21.0 % | 29.4 % |
| State\tand\tlocal\tincome\ttaxes,\tnet\tof\tfederal\ttax\tbenefits | 2.0 | 2.5 | 1.7 |
| Foreign\trate\tdifferences | (0.8) | - | (2.0) |
| Provisional\tnet\ttax\tbenefit | - | (0.4) | (24.5) |
| Stock\tbased\tcompensation | (1.1) | (1.2) | (1.2) |
| Subsidiary\treorganization\t(a) | (2.0) | - | - |
| Capital\tloss\t(b) | - | (3.7) | - |
| Prior\tperiod\ttax\tadjustment | - | - | 1.9 |
| Domestic\tmanufacturing\tdeduction | - | - | (1.9) |
| Other,\tnet | (0.6) | (0.5) | (0.7) |
| Effective\tincome\ttax\trate | 18.5 % | 17.7 % | 2.7 % |

(a) During	fiscal	2020,	we	recorded	a	$53.1	million	decrease	to	our	deferred	income	tax	liabilities	associated	with	the	reorganization	of	certain	wholly	owned subsidiaries.

(b) During	fiscal	2019,	we	recorded	a	discrete	benefit	related	to	a	capital	loss	carryback	of	$72.9	million.

The	tax	effects	of	temporary	differences	that	give	rise	to	deferred	tax	assets	and	liabilities	are	as	follows:

| In	Millions | May	31,	2020 | May	26,	2019 |
| :--- | :--- | :--- |
| Accrued\tliabilities | $61.8 | $50.9 |
| Compensation\tand\temployee\tbenefits | 171.4 | 196.6 |
| Pension | 148.2 | 103.2 |
| Tax\tcredit\tcarryforwards | 12.5 | 7.3 |
| Stock,\tpartnership,\tand\tmiscellaneous\tinvestments | 80.2 | 104.2 |
| Capital\tlosses | 65.9 | 73.1 |
| Net\toperating\tlosses | 146.6 | 141.7 |
| Other | 87.0 | 71.3 |
| Gross\tdeferred\ttax\tassets | 773.6 | 748.3 |
| Valuation\tallowance | 214.2 | 213.7 |
| Net\tdeferred\ttax\tassets | 559.4 | 534.6 |
| Brands | 1,415.0 | 1,472.6 |
| Fixed\tassets | 378.3 | 377.8 |
| Intangible\tassets | 246.8 | 259.7 |
| Tax\tlease\ttransactions | 21.5 | 23.9 |
| Inventories | 33.0 | 39.0 |
| Stock,\tpartnership,\tand\tmiscellaneous\tinvestments | 338.1 | 330.0 |
| Unrealized\thedges | 22.4 | 27.9 |
| Other | 51.4 | 34.7 |
| Gross\tdeferred\ttax\tliabilities | 2,506.5 | 2,565.6 |
| Net\tdeferred\ttax\tliability | $1,947.1 | $2,031.0 |

We	have	established	a	valuation	allowance	against	certain	of	the	categories	of	deferred	tax	assets	described	above	as	current	evidence	does	not	suggest	we	will	realize sufficient	taxable	income	of	the	appropriate	character	(e.g.,	ordinary	income	versus	capital	gain	income)	within	the	carryforward	period	to	allow	us	to	realize	these deferred	tax	benefits.

Information	about	our	valuation	allowance	follows:

| In	Millions | May	31,	2020 |
| :--- | :--- |
| Pillsbury\tacquisition\tlosses | $108.3 |
| State\tand\tforeign\tloss\tcarryforwards | 28.2 |
| Capital\tloss\tcarryforwards | 65.8 |
| Other | 11.9 |
| Total | $214.2 |

# Our	foreign	loss	carryforwards	expire	as	follows:

| In	Millions | May	31,	2020 |
| :--- | :--- |
| Expire\tin\tfiscal\t2021\tand\t2022 | $3.7 |
| Expire\tin\tfiscal\t2023\tand\tbeyond | 20.8 |
| Do\tnot\texpire | 119.0 |
| Total\tforeign\tloss\tcarryforwards | $143.5 |

On	March	27,	2020,	the	Coronavirus	Aid,	Relief,	and	Economic	Security	Act	(CARES	Act)	was	signed	into	law.	The	CARES	Act	and	related	notices	include	several significant	provisions,	including	delaying	certain	payroll	tax	payments	and	estimated	income	tax	payments	that	we	expect	to	defer	to	future	periods.	We	expect	the deferral	of	certain	payroll	tax	payments	to	continue	into	fiscal	2021.	We	do	not	currently	expect	the	CARES	Act	to	have	a	material	impact	on	our	financial	results, including	on	our	annual	estimated	effective	tax	rate	or	on	our	liquidity.	We	will	continue	to	monitor	and	assess	the	impact	the	CARES	Act	and	similar	legislation	in other	countries	may	have	on	our	business	and	financial	results.

On	December	22,	2017,	the	TCJA	was	signed	into	law.	The	TCJA	resulted	in	significant	revisions	to	the	U.S.	corporate	income	tax	system,	including	a	reduction	in	the U.S.	corporate	income	tax	rate,	implementation	of	a	territorial	system,	and	a	one-time	deemed	repatriation	tax	on	untaxed	foreign	earnings.	As	a	result	of	the	TCJA,	we recorded	a	provisional	benefit	of	$523.5	million	during	fiscal	2018.	During	fiscal	2019,	we	completed	our	accounting	for	the	tax	effects	of	the	TCJA	and	recorded	a benefit	of	$7.2	million	which	included	adjustments	to	the	transition	tax	and	the	measurement	of	our	net	U.S.	deferred	tax	liability.	While	our	accounting	for	the	recorded impact	of	the	TCJA	is	deemed	to	be	complete,	these	amounts	were	based	on	prevailing	regulations	and	currently	available	information,	and	any	additional	guidance issued	by	the	Internal	Revenue	Service	(IRS)	could	impact	the	aforementioned	amounts	in	future	periods.

The	legislation	also	included	provisions	that	affected	our	fiscal	2019	and	forward	results,	including	but	not	limited	to:	a	reduction	in	the	U.S.	corporate	tax	rate	on domestic	operations;	the	creation	of	a	new	minimum	tax	called	the	base	erosion	anti-abuse	tax;	a	new	provision	that	taxes	U.S.	allocated	expenses	as	well	as	currently taxes	certain	income	from	foreign	operations	(Global	Intangible	Low	Tax	Income	or	GILTI);	a	new	limitation	on	deductible	interest	expense;	the	repeal	of	the	domestic manufacturing	deduction;	and	limitations	on	the	deductibility	of	certain	executive	compensation.

As	of	May	31,	2020,	we	have	not	recognized	a	deferred	tax	liability	for	unremitted	earnings	of	approximately	$2.3	billion	from	our	foreign	operations	because	we currently	believe	our	subsidiaries	have	invested	the	undistributed	earnings	indefinitely	or	the	earnings	will	be	remitted	in	a	tax-neutral	transaction.	It	is	not	practicable for	us	to	determine	the	amount	of	unrecognized	tax	expense	on	these	reinvested	earnings.	Deferred	taxes	are	recorded	for	earnings	of	our	foreign	operations	when	we determine	that	such	earnings	are	no	longer	indefinitely	reinvested.	As	a	result	of	the	TCJA,	we	re-evaluated	our	assertion	and	have	concluded	that	although	earnings prior	to	fiscal	2018	will	remain	permanently	reinvested,	we	will	no	longer	make	a	permanent	reinvestment	assertion	beginning	with	our	fiscal	2018	earnings.	As	part	of the	accounting	for	the	TCJA,	we	recorded	local	country	withholding	taxes	related	to	certain	entities	from	which	we	began	repatriating	undistributed	earnings	and	will continue	to	record	local	country	withholding	taxes	on	all	future	earnings.

We	are	subject	to	federal	income	taxes	in	the	United	States	as	well	as	various	state,	local,	and	foreign	jurisdictions.	A	number	of	years	may	elapse	before	an	uncertain tax	position	is	audited	and	finally	resolved.	While	it	is	often	difficult	to	predict	the	final	outcome	or	the	timing	of	resolution	of	any	particular	uncertain	tax	position,	we believe	that	our	liabilities	for	income	taxes	reflect	the	most	likely	outcome.	We	adjust	these	liabilities,	as	well	as	the	related	interest,	in	light	of	changing	facts	and circumstances.	Settlement	of	any	particular	position	would	usually	require	the	use	of	cash.

The	number	of	years	with	open	tax	audits	varies	depending	on	the	tax	jurisdiction.	Our	major	taxing	jurisdiction	is	the	United	States	(federal	and	state).	Various	tax examinations	by	United	States	state	taxing	authorities	could	be	conducted	for	any	open	tax	year,	which	vary	by	jurisdiction,	but	are	generally	from	3	to	5	years.

Several	state	and	foreign	examinations	are	currently	in	progress.	We	do	not	expect	these	examinations	to	result	in	a	material	impact	on	our	results	of	operations	or financial	position.	We	have	effectively	settled	all	issues	with	the	IRS	for	fiscal	years	2015	and	prior.

During	fiscal	2017,	the	Brazilian	tax	authority,	Secretaria	da	Receita	Federal	do	Brasil	(RFB),	concluded	audits	of	our	2012	and	2013	tax	return	years.	These	audits included	a	review	of	our	determinations	of	amortization	of	certain	goodwill	arising	from	the	acquisition	of	Yoki	Alimentos	S.A.	The	RFB	has	proposed	adjustments	that effectively	eliminate	 the	goodwill	amortization	benefits	related	 to	 this	 transaction.	During	fiscal	2020,	we	received	proposed	adjustments	related	 to	 the	goodwill amortization	benefits	for	our	2014	and	2015	tax	return	years.	We	believe	we	have	meritorious	defenses	and	intend	to	contest	the	disallowance.

We	apply	a	more-likely-than-not	threshold	to	the	recognition	and	derecognition	of	uncertain	tax	positions.	Accordingly,	we	recognize	the	amount	of	tax	benefit	that	has a	greater	than	50	percent	likelihood	of	being	ultimately	realized	upon	settlement.	Future	changes	in	judgment	related	to	the	expected	ultimate	resolution	of	uncertain	tax positions	will	affect	earnings	in	the	period	of	such	change.

The	following	table	sets	forth	changes	in	our	total	gross	unrecognized	tax	benefit	liabilities,	excluding	accrued	interest,	for	fiscal	2020	and	fiscal	2019.	Approximately $79.3	million	of	this	total	in	fiscal	2020	represents	the	amount	that,	if	recognized,	would	affect	our	effective	income	tax	rate	in	future	periods.	This	amount	differs	from the	gross	unrecognized	tax	benefits	presented	in	the	table	because	certain	of	the	liabilities	below	would	impact	deferred	taxes	if	recognized.	We	also	would	record	a decrease	in	U.S.	federal	income	taxes	upon	recognition	of	the	state	tax	benefits	included	therein.

| In	Millions | 2020 | 2019 |
| :--- | :--- | :--- |
| Balance,\tbeginning\tof\tyear | $139.1 | $196.3 |
| Tax\tpositions\trelated\tto\tcurrent\tyear: |  |  |
| Additions | 18.7 | 19.5 |
| Reductions | - | (0.1) |
| Tax\tpositions\trelated\tto\tprior\tyears: |  |  |
| Additions | 2.3 | 3.8 |
| Reductions | (6.0) | (13.2) |
| Settlements | (2.9) | (41.0) |
| Lapses\tin\tstatutes\tof\tlimitations | (3.3) | (26.2) |
| Balance,\tend\tof\tyear | $147.9 | $139.1 |

As	of	May	31,	2020,	we	expect	to	pay	approximately	$0.1	million	of	unrecognized	tax	benefit	liabilities	and	accrued	interest	within	the	next	12	months.	We	are	not	able to	reasonably	estimate	the	timing	of	future	cash	flows	beyond	12	months	due	to	uncertainties	in	the	timing	of	tax	audit	outcomes.	The	remaining	amount	of	our unrecognized	tax	liability	was	classified	in	other	liabilities.

We	report	accrued	interest	and	penalties	related	to	unrecognized	tax	benefit	liabilities	in	income	tax	expense.	For	fiscal	2020,	we	recognized	$3.2	million	of	tax-related net	interest	and	penalties,	and	had	$27.9	million	of	accrued	interest	and	penalties	as	of	May	31,	2020.	For	fiscal	2019,	we	recognized	$0.5	million	of	tax-related	net interest	and	penalties,	and	had	$26.0	million	of	accrued	interest	and	penalties	as	of	May	26,	2019.

# NOTE	16.	COMMITMENTS	AND	CONTINGENCIES

As	of	May	31,	2020,	we	have	issued	guarantees	and	comfort	letters	of	$129.8	million	for	the	debt	and	other	obligations	of	non-consolidated	affiliates,	mainly	CPW.	Off- balance	sheet	arrangements	were	not	material	as	of	May	31,	2020.

During	the	second	quarter	of	fiscal	2020,	we	received	notice	from	the	tax	authorities	of	the	State	of	São	Paulo,	Brazil	regarding	our	compliance	with	its	state	sales	tax requirements.	As	a	result,	we	have	been	assessed	additional	state	sales	taxes,	interest,	and	penalties.	We	believe	that	we	have	meritorious	defenses	against	this	claim	and will	vigorously	defend	our	position.	As	of	May	31,	2020,	we	are	unable	to	estimate	any	possible	loss	and	have	not	recorded	a	loss	contingency	for	this	matter.

# NOTE	17.	BUSINESS	SEGMENT	AND	GEOGRAPHIC	INFORMATION

We	operate	in	the	packaged	foods	industry.	Our	operating	segments	are	as	follows:	North	America	Retail;	Convenience	Stores	&	Foodservice;	Europe	&	Australia;	Asia &	Latin	America;	and	Pet.

Our	major	product	categories	in	our	Convenience	Stores	&	Foodservice	operating	segment	are	ready-to-eat	cereals,	snacks,	refrigerated	yogurt,	frozen	meals,	unbaked and	fully	baked	frozen	dough	products,	baking	mixes,	and	bakery	flour.	Many	products	we

sell	are	branded	to	the	consumer	and	nearly	all	are	branded	to	our	customers.	We	sell	to	distributors	and	operators	in	many	customer	channels	including	foodservice, convenience	stores,	vending,	and	supermarket	bakeries	in	the	United	States.

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

Our	operating	segment	results	were	as	follows:

| In	Millions | 2020 | 2019 | 2018 |
| :--- | :--- | :--- | :--- |
| Net\tsales: |  |  |  |
| North\tAmerica\tRetail | $10,750.5 | $9,925.2 | $10,115.4 |
| Europe\t&amp;\tAustralia | 1,838.9 | 1,886.7 | 1,984.6 |
| Convenience\tStores\t&amp;\tFoodservice | 1,816.4 | 1,969.1 | 1,930.2 |
| Pet | 1,694.6 | 1,430.9 | - |
| Asia\t&amp;\tLatin\tAmerica | 1,526.2 | 1,653.3 | 1,710.2 |
| Total | $17,626.6 | $16,865.2 | $15,740.4 |
| Operating\tprofit: |  |  |  |
| North\tAmerica\tRetail | $2,627.0 | $2,277.2 | $2,217.4 |
| Europe\t&amp;\tAustralia | 113.8 | 123.3 | 142.1 |
| Convenience\tStores\t&amp;\tFoodservice | 337.2 | 419.5 | 392.6 |
| Pet | 390.7 | 268.4 | - |
| Asia\t&amp;\tLatin\tAmerica | 18.7 | 72.4 | 39.6 |
| Total\tsegment\toperating\tprofit | $3,487.4 | $3,160.8 | $2,791.7 |
| Unallocated\tcorporate\titems | 509.1 | 339.8 | 206.2 |
| Divestitures\tloss | - | 30.0 | - |
| Restructuring,\timpairment,\tand\tother\texit\tcosts | 24.4 | 275.1 | 165.6 |
| Operating\tprofit | $2,953.9 | $2,515.9 | $2,419.9 |

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

|  |  | Fiscal	Year |  |
| :--- | :--- | :--- | :--- |
| In\tMillions | 2020 | 2019 | 2018 |
| U.S.\tMeals\t&amp;\tBaking | $4,408.5 | $3,839.8 | $3,865.7 |
| U.S.\tCereal | 2,434.1 | 2,255.4 | 2,251.8 |
| U.S.\tSnacks | 2,091.9 | 2,060.9 | 2,140.5 |
| U.S.\tYogurt\tand\tother | 919.0 | 906.7 | 927.4 |
| Canada | 897.0 | 862.4 | 930.0 |
| Total | $10,750.5 | $9,925.2 | $10,115.4 |

Net	sales	by	class	of	similar	products	were	as	follows:

|  |  | Fiscal	Year |  |
| :--- | :--- | :--- | :--- |
| In\tMillions | 2020 | 2019 | 2018 |
| Snacks | $3,529.7 | $3,487.4 | $3,549.3 |
| Cereal | 2,874.1 | 2,672.8 | 2,679.8 |
| Convenient\tmeals | 2,814.3 | 2,538.6 | 2,572.7 |
| Yogurt | 2,056.6 | 2,113.1 | 2,235.0 |
| Dough | 1,801.1 | 1,661.9 | 1,653.4 |
| Pet | 1,694.6 | 1,430.9 | - |
| Baking\tmixes\tand\tingredients | 1,674.2 | 1,663.7 | 1,709.7 |
| Super-premium\tice\tcream | 718.1 | 812.7 | 803.2 |
| Vegetables\tand\tother | 463.9 | 484.1 | 537.3 |
| Total | $17,626.6 | $16,865.2 | $15,740.4 |

During	the	first	quarter	of	fiscal	2020,	we	made	certain	changes	in	the	classification	of	products	and	updated	fiscal	2019	and	fiscal	2018	net	sales	figures	to	match	the current-year	presentation.

The	following	tables	provide	financial	information	by	geographic	area:

| In	Millions | 2020 | 2019 | 2018 |
| :--- | :--- | :--- | :--- |
| Net\tsales: |  |  |  |
| United\tStates | $13,364.5 | $12,462.8 | $11,115.6 |
| Non-United\tStates | 4,262.1 | 4,402.4 | 4,624.8 |
| Total | $17,626.6 | $16,865.2 | $15,740.4 |

| In	Millions | May	31,	2020 | May	26,	2019 |
| :--- | :--- | :--- |
| Cash\tand\tcash\tequivalents: |  |  |
| United\tStates | $1,112.0 | $51.0 |
| Non-United\tStates | 565.8 | 399.0 |
| Total | $1,677.8 | $450.0 |

| In	Millions | May	31,	2020 | May	26,	2019 |
| :--- | :--- | :--- |
| Land,\tbuildings,\tand\tequipment: |  |  |
| United\tStates | $2,761.6 | $2,872.8 |
| Non-United\tStates | 819.0 | 914.4 |
| Total | $3,580.6 | $3,787.2 |

# NOTE	18.	SUPPLEMENTAL	INFORMATION

The	components	of	certain	Consolidated	Balance	Sheet	accounts	are	as	follows:

| In	Millions | May	31,	2020 | May	26,	2019 |
| :--- | :--- | :--- |
| Receivables: |  |  |
| Customers | $1,648.3 | $1,708.5 |
| Less\tallowance\tfor\tdoubtful\taccounts | (33.2) | (28.8) |
| Total | $1,615.1 | $1,679.7 |

| In	Millions | May	31,	2020 | May	26,	2019 |
| :--- | :--- | :--- |
| Inventories: |  |  |
| Finished\tgoods | $1,142.6 | $1,245.9 |
| Raw\tmaterials\tand\tpackaging | 392.2 | 434.9 |
| Grain | 93.6 | 92.0 |
| Excess\tof\tFIFO\tover\tLIFO\tcost\t(a) | (202.1) | (213.5) |
| Total | $1,426.3 | $1,559.3 |

(a)	Inventories	of	$892.6	million	as	of	May	31,	2020,	and	$974.8	million	as	of	May	26,	2019,	were	valued	at	LIFO.	The	difference	between	replacement	cost	and	the stated	LIFO	inventory	value	is	not	materially	different	from	the	reserve	for	the	LIFO	valuation	method.

| In	Millions | May	31,	2020 | May	26,	2019 |
| :--- | :--- | :--- |
| Prepaid\texpenses\tand\tother\tcurrent\tassets: |  |  |
| Prepaid\texpenses | $194.5 | $189.0 |
| Other\treceivables | 85.2 | 250.2 |
| Derivative\treceivables | 70.6 | 42.2 |
| Grain\tcontracts | 5.0 | 6.7 |
| Miscellaneous | 46.8 | 9.4 |
| Total | $402.1 | $497.5 |

| In	Millions | May	31,	2020 | May	26,	2019 |
| :--- | :--- | :--- |
| Land,\tbuildings,\tand\tequipment: |  |  |
| Equipment | $6,428.0 | $6,548.3 |
| Buildings | 2,412.6 | 2,477.2 |
| Capitalized\tsoftware | 668.5 | 631.6 |
| Construction\tin\tprogress | 373.5 | 343.8 |
| Land | 66.1 | 73.6 |
| Equipment\tunder\tfinance\tlease | 5.8 | 5.7 |
| Buildings\tunder\tfinance\tlease | 0.3 | 0.3 |
| Total\tland,\tbuildings,\tand\tequipment | 9,954.8 | 10,080.5 |
| Less\taccumulated\tdepreciation | (6,374.2) | (6,293.3) |
| Total | $3,580.6 | $3,787.2 |

| In	Millions | May	31,	2020 | May	26,	2019 |
| :--- | :--- | :--- |
| Other\tassets: |  |  |
| Investments\tin\tand\tadvances\tto\tjoint\tventures | $566.7 | $452.9 |
| Right\tof\tuse\toperating\tlease\tassets | 365.2 | - |
| Pension\tassets | 21.2 | 323.5 |
| Life\tinsurance | 19.5 | 22.7 |
| Miscellaneous | 113.2 | 175.8 |
| Total | $1,085.8 | $974.9 |

| In	Millions | May	31,	2020 | May	26,	2019 |
| :--- | :--- | :--- |
| Other\tcurrent\tliabilities: |  |  |
| Accrued\ttrade\tand\tconsumer\tpromotions | $550.4 | $484.4 |
| Accrued\tpayroll | 430.4 | 345.5 |
| Current\tportion\tof\toperating\tlease\tliabilities | 102.0 | - |
| Accrued\tinterest,\tincluding\tinterest\trate\tswaps | 92.8 | 92.6 |
| Accrued\ttaxes | 80.3 | 37.5 |
| Derivative\tpayable,\tprimarily\tcommodity-related | 39.2 | 13.2 |
| Dividends\tpayable | 20.7 | 19.2 |
| Restructuring\tand\tother\texit\tcosts\treserve | 17.8 | 36.5 |
| Grain\tcontracts | 1.2 | 2.3 |
| Miscellaneous | 298.5 | 336.6 |
| Total | $1,633.3 | $1,367.8 |

| In	Millions | May	31,	2020 | May	26,	2019 |
| :--- | :--- | :--- |
| Other\tnoncurrent\tliabilities: |  |  |
| Accrued\tcompensation\tand\tbenefits,\tincluding\tobligations\tfor\tunderfunded\tother\tpostretirement |  |  |
| benefit\tand\tpostemployment\tbenefit\tplans | $958.7 | $1,153.3 |
| Noncurrent\tportion\tof\toperating\tlease\tliabilities | 277.0 | - |
| Accrued\ttaxes | 238.6 | 227.1 |
| Miscellaneous | 70.7 | 68.5 |
| Total | $1,545.0 | $1,448.9 |

Certain	Consolidated	Statements	of	Earnings	amounts	are	as	follows:

| In	Millions | 2020 | 2019 | 2018 |
| :--- | :--- | :--- | :--- |
| Depreciation\tand\tamortization | $594.7 | $620.1 | $618.8 |
| Research\tand\tdevelopment\texpense | 224.4 | 221.9 | 219.1 |
| Advertising\tand\tmedia\texpense\t(including\tproduction\tand\tcommunication\tcosts) | 691.8 | 601.6 | 575.9 |

The	components	of	interest,	net	are	as	follows:

|  |  | Fiscal	Year |  |
| :--- | :--- | :--- | :--- |
| Expense\t(Income),\tin\tMillions | 2020 | 2019 | 2018 |
| Interest\texpense | $475.1 | $530.2 | $389.5 |
| Capitalized\tinterest | (2.6) | (2.8) | (4.1) |
| Interest\tincome | (6.0) | (5.6) | (11.7) |
| Interest,\tnet | $466.5 | $521.8 | $373.7 |

Certain	Consolidated	Statements	of	Cash	Flows	amounts	are	as	follows:

|  |  | Fiscal	Year |  |
| :--- | :--- | :--- | :--- |
| In\tMillions | 2020 | 2019 | 2018 |
| Cash\tinterest\tpayments | $418.5 | $500.1 | $269.5 |
| Cash\tpaid\tfor\tincome\ttaxes | 403.3 | 440.8 | 489.4 |

# NOTE	19.	QUARTERLY	DATA	(UNAUDITED)

Summarized	quarterly	data	for	fiscal	2020	and	fiscal	2019	follows:

| Amounts | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Net\tsales | $4,002.5 | $4,094.0 | $4,420.8 | $4,411.2 | $4,180.3 | $4,198.3 | $5,023.0 | $4,161.7 |
| Gross\tmargin | 1,389.5 | 1,342.8 | 1,569.1 | 1,509.7 | 1,403.2 | 1,443.0 | 1,768.1 | 1,461.3 |
| Net\tearnings\tattributable\tto\tGeneral |  |  |  |  |  |  |  |  |
| Mills | 520.6 | 392.3 | 580.8 | 343.4 | 454.1 | 446.8 | 625.7 | 570.2 |
| EPS: |  |  |  |  |  |  |  |  |
| Basic | $0.86 | $0.66 | $0.96 | $0.57 | $0.75 | $0.74 | $1.03 | $0.95 |
| Diluted | $0.85 | $0.65 | $0.95 | $0.57 | $0.74 | $0.74 | $1.02 | $0.94 |

During	the	fourth	quarter	of	fiscal	2020,	we	changed	the	reporting	period	of	our	Pet	segment	from	an	April	fiscal	year	end	to	a	May	fiscal	year	end	to	match	our	fiscal calendar.	Accordingly,	our	fiscal	2020	fourth	quarter	results	include	4	months	of	Pet	segment	results	compared	to	3	months	in	the	fourth	quarter	of	fiscal	2019.	The fourth	quarter	of	fiscal	2020	also	included	an	additional	week	of	results	across	all	other	segments.	In	the	fourth	quarter	of	fiscal	2020,	we	recorded	$19.3	million	of expense	due	to	a	product	recall	related	to	our	international	Green	Giant	business	and	$11.5	million	of	restructuring	charges.

During	the	fourth	quarter	of	fiscal	2019,	we	sold	our	yogurt	business	in	China	and	simultaneously	entered	into	a	new	Yoplait	license	agreement	with	the	purchaser	for their	use	of	the	Yoplait	brand.	We	recorded	a	gain	of	$5.4	million.	In	the	fourth	quarter	of	fiscal	2019,	we	recorded	restructuring	and	impairment	charges	of	$7.4	million. We	recorded	$4.3	million	of	integration	costs	related	to	the	acquisition	of	Blue	Buffalo	and	$9.8	million	of	gains	related	to	an	investment	valuation	adjustment	in	the fourth	quarter	of	fiscal	2019.	We	also	recorded	a	tax	benefit	of	$72.9	million	in	the	fourth	quarter	of	fiscal	2019.	Please	see	Note	15	for	more	information. 94

# Glossary

Accelerated	depreciation	associated	with	restructured	assets.	The	increase	in	depreciation	expense	caused	by	updating	the	salvage	value	and	shortening	the	useful life	of	depreciable	fixed	assets	to	coincide	with	the	end	of	production	under	an	approved	restructuring	plan,	but	only	if	impairment	is	not	present.

# AOCI.	Accumulated	other	comprehensive	income	(loss).

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

Adjusted	EBITDA.	The	calculation	of	earnings	before	income	taxes	and	after-tax	earnings	from	joint	ventures,	net	interest,	and	depreciation	and	amortization	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-to-year	comparability,	divided	by	net	sales.

Constant	currency.	Financial	results	translated	to	United	States	dollars	using	constant	foreign	currency	exchange	rates	based	on	the	rates	in	effect	for	the	comparable prior-year	period.	To	present	this	information,	current	period	results	for	entities	reporting	in	currencies	other	than	United	States	dollars	are	translated	into	United	States dollars	at	the	average	exchange	rates	in	effect	during	the	corresponding	period	of	the	prior	fiscal	year,	rather	than	the	actual	average	exchange	rates	in	effect	during	the current	fiscal	year.	Therefore,	the	foreign	currency	impact	is	equal	to	current	year	results	in	local	currencies	multiplied	by	the	change	in	the	average	foreign	currency exchange	rate	between	the	current	fiscal	period	and	the	corresponding	period	of	the	prior	fiscal	year.

Core	working	capital.	Accounts	receivable	plus	inventories	less	accounts	payable,	all	as	of	the	last	day	of	our	fiscal	year.

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

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

Earnings	 before interest, taxes,	 depreciation	 and	 amortization (EBITDA).	The	 calculation	 of	 earnings	 before income taxes	 and	 after-tax	 earnings	 from joint ventures,	net	interest,	depreciation	and	amortization.

# Euribor.	European	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.

Focus	6	platforms.	The	Focus	6	platforms	for	the	Convenience	Stores	&	Foodservice	segment	consist	of	cereal,	yogurt,	snacks,	frozen	meals,	frozen	biscuits,	and	frozen baked	goods.

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

Free	cash	flow	conversion	rate.	Free	cash	flow	divided	by	our	net	earnings,	including	earnings	attributable	to	redeemable	and	noncontrolling	interests	adjusted	for certain	items	affecting	year-to-year	comparability.

GDP.	Gross	domestic	product.

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	redeemable	and	noncontrolling	interests	and	the	related	fair	values of	net	assets	acquired.

# Gross	margin.	Net	sales	less	cost	of	sales.

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

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

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

# LIBOR.	London	Interbank	Offered	Rate.

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

Net	debt.	Long-term	debt,	current	portion	of	long-term	debt,	and	notes	payable,	less	cash	and	cash	equivalents.

Net	debt-to-adjusted	EBITDA	ratio.	Net	debt	divided	by	Adjusted	EBITDA.

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	consolidated	subsidiaries	held	by	third	parties.

Notional	principal	amount.	The	principal	amount	on	which	fixed-rate	or	floating-rate	interest	payments	are	calculated.

OCI.	Other	comprehensive	income	(loss).

Operating cash flow conversion rate.	Net	 cash	 provided	 by	 operating	 activities,	 divided	 by	 net	 earnings, including	 earnings	 attributable to redeemable	 and noncontrolling	interests.

Operating	cash	flow	to	net	debt	ratio.	Net	debt	divided	by	cash	provided	by	operating	activities.

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

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

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

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

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

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

TCJA.	U.S.	Tax	Cuts	and	Jobs	Act	which	was	signed	into	law	on	December	22,	2017.

Total	debt.	Notes	payable	and	long-term	debt,	including	current	portion.

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.

# ITEM	9	-	Changes	in	and	Disagreements	With	Accountants	on	Accounting	and	Financial	Disclosure

# ITEM	9A	Controls	and	Procedures

We,	under	the	supervision	and	with	the	participation	of	our	management,	including	our	Chief	Executive	Officer	and	Chief	Financial	Officer,	have	evaluated	the effectiveness	of	the	design	and	operation	of	our	disclosure	controls	and	procedures	(as	defined	in	Rule	13a-15(e)	under	the	1934	Act).	Based	on	that	evaluation,	our Chief	Executive	Officer	and	Chief	Financial	Officer	have	concluded	that,	as	of	May	31,	2020,	our	disclosure	controls	and	procedures	were	effective	to	ensure	that information	required	to	be	disclosed	by	us	in	reports	that	we	file	or	submit	under	the	1934	Act	is	(1)	recorded,	processed,	summarized,	and	reported	within	the	time periods	specified	in	applicable	rules	and	forms,	and	(2)	accumulated	and	communicated	to	our	management,	including	our	Chief	Executive	Officer	and	Chief	Financial Officer,	in	a	manner	that	allows	timely	decisions	regarding	required	disclosure.

There	were	no	changes	in	our	internal	control	over	financial	reporting	(as	defined	in	Rule	13a-15(f)	under	the	1934	Act)	during	our	fiscal	quarter	ended	May	31,	2020, that	have	materially	affected,	or	are	reasonably	likely	to	materially	affect,	our	internal	control	over	financial	reporting.

# MANAGEMENT'S	REPORT	ON	INTERNAL	CONTROL	OVER	FINANCIAL	REPORTING

The	management	of	General	Mills,	Inc.	is	responsible	for	establishing	and	maintaining	adequate	internal	control	over	financial	reporting,	as	such	term	is	defined	in	Rule 13a-15(f)	under	the	1934	Act.	The	Company's	internal	control	system	was	designed	to	provide	reasonable	assurance	to	our	management	and	the	Board	of	Directors regarding	the	preparation	and	fair	presentation	of	published	financial	statements.	Under	the	supervision	and	with	the	participation	of	management,	including	our	Chief Executive	Officer	and	Chief	Financial	Officer,	we	conducted	an	assessment	of	the	effectiveness	of	our	internal	control	over	financial	reporting	as	of	May	31,	2020.	In making	this	assessment,	management	used	the	criteria	set	forth	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission	(COSO)	in	Internal Control	–	Integrated	Framework	(2013).

Based	on	our	assessment	using	the	criteria	set	forth	by	COSO	in	Internal	Control	–	Integrated	Framework	(2013),	management	concluded	that	our	internal	control	over financial	reporting	was	effective	as	of	May	31,	2020.

KPMG	LLP,	our	independent	registered	public	accounting	firm,	has	issued	a	report	on	the	effectiveness	of	the	Company's	internal	control	over	financial	reporting.

Chief	Executive	Officer Chief	Financial	Officer

Our	 independent	registered	public	accounting	firm's	attestation	report	on	our internal	control	over	financial	reporting is included in the	"Report	of	Independent Registered	Public	Accounting	Firm"	in	Item	8	of	this	report.

# ITEM	9B	-	Other	Information

# PART	III

# ITEM	10	-	Directors,	Executive	Officers	and	Corporate	Governance

The	information	contained	in	the	sections	entitled	"Proposal	Number	1	-	Election	of	Directors,"	"Shareholder	Director	Nominations,"	and	"Delinquent	Section	16(a) Reports"	contained	in	our	definitive	Proxy	Statement	for	our	2020	Annual	Meeting	of	Shareholders	is	incorporated	herein	by	reference.

Information	regarding	our	executive	officers	is	set	forth	in	Item	1	of	this	report.

The	information	regarding	our	Audit	Committee,	including	the	members	of	the	Audit	Committee	and	audit	committee	financial	experts,	set	forth	in	the	section	entitled "Board	Committees	and	Their	Functions"	contained	in	our	definitive	Proxy	Statement	for	our	2020	Annual	Meeting	of	Shareholders	is	incorporated	herein	by	reference.

We	have	adopted	a	Code	of	Conduct	applicable	to	all	employees,	including	our	principal	executive	officer,	principal	financial	officer,	and	principal	accounting	officer.	A copy	of	the	Code	of	Conduct	is	available	on	our	website	at	www.GeneralMills.com.	We	intend	to	post	on	our	website	any	amendments	to	our	Code	of	Conduct	and	any waivers	from	our	Code	of	Conduct	for	principal	officers.

# ITEM	11	-	Executive	Compensation

The	information	contained	in	the	sections	entitled	"Executive	Compensation,"	"Director	Compensation,"	and	"Overseeing	Risk	Management"	in	our	definitive	Proxy Statement	for	our	2020	Annual	Meeting	of	Shareholders	is	incorporated	herein	by	reference.

# ITEM	12	-	Security	Ownership	of	Certain	Beneficial	Owners	and	Management	and	Related	Stockholder	Matters

The	information	contained	in	the	section	entitled	"Ownership	of	General	Mills	Common	Stock	by	Directors,	Officers	and	Certain	Beneficial	Owners"	in	our	definitive Proxy	Statement	for	our	2020	Annual	Meeting	of	Shareholders	is	incorporated	herein	by	reference.

# Equity	Compensation	Plan	Information

The	following	table	provides	certain	information	as	of	May	31,	2020,	with	respect	to	our	equity	compensation	plans:

|  | Number	of	Securities	to	be	Issued Weighted-Average	Exercise	Price | Number	of	Securities	to	be	Issued Weighted-Average	Exercise	Price | Number	of	Securities	Remaining	Available	for | Number	of	Securities	Remaining	Available	for |
| :--- | :--- | :--- | :--- | :--- |
|  | upon\tExercise\tof\tOutstanding | of\tOutstanding\tOptions, | Future\tIssuance\tUnder\tEquity\tCompensation\tPlans | Future\tIssuance\tUnder\tEquity\tCompensation\tPlans |
| Plan\tCategory | Options,\tWarrants\tand\tRights\t(1) | Warrants\tand\tRights\t(2)\t(a) | (Excluding\tSecurities\tReflected\tin\tColumn\t(1))\t(3) | (Excluding\tSecurities\tReflected\tin\tColumn\t(1))\t(3) |
| Equity\tcompensation\tplans\tapproved |  |  |  |  |
| by\tsecurity\tholders | 25,632,281\n(b) | $51.21 | 26,444,888 | (d) |
| Equity\tcompensation\tplans\tnot |  |  |  |  |
| approved\tby\tsecurity\tholders | 115,477 (c) | - | - |  |
| Total | 25,747,758 | $51.21 | 26,444,888 |  |

(a) Only	includes	the	weighted-average	exercise	price	of	outstanding	options,	whose	weighted-average	term	is	5.53	years.

(c) Includes	115,477	restricted	stock	units	that	have	vested	and	been	deferred.	These	awards	were	made	in	lieu	of	salary	increases	and	certain	other	compensation and	benefits.	We	granted	these	awards	under	our	1998	Employee	Stock	Plan,	which	provided	for	the	issuance	of	stock	options,	restricted	stock,	and	restricted stock	units	to	attract	and	retain	employees	and	to	align	their	interests	with	those	of	shareholders.	We	discontinued	the	1998	Employee	Stock	Plan	in	September 2003,	and	no	future	awards	may	be	granted	under	that	plan.

(d) Includes	stock	options,	restricted	stock,	restricted	stock	units,	shares	of	unrestricted	stock,	stock	appreciation	rights,	and	performance	awards	that	we	may award	under	our	2017	Stock	Compensation	Plan,	which	had	26,444,888	shares	available	for	grant	at	May	31,	2020.

# ITEM	13	-	Certain	Relationships	and	Related	Transactions,	and	Director	Independence

The	information	set	forth	in	the	section	entitled	"Board	Independence	and	Related	Person	Transactions"	contained	in	our	definitive	Proxy	Statement	for	our	2020 Annual	Meeting	of	Shareholders	is	incorporated	herein	by	reference.

# ITEM	14	-	Principal	Accounting	Fees	and	Services

The	information	contained	in	the	section	entitled	"Independent	Registered	Public	Accounting	Firm	Fees"	in	our	definitive	Proxy	Statement	for	our	2020	Annual	Meeting of	Shareholders	is	incorporated	herein	by	reference.

# PART	IV

# ITEM	15	–	Exhibits	and	Financial	Statement	Schedules

# 1. Financial	Statements:

The	following	financial	statements	are	included	in	Item	8	of	this	report:

Consolidated	Statements	of	Total	Equity	and	Redeemable	Interest	for	the	fiscal	years	ended	May	31,	2020,	May	26,	2019,	and	May	27,	2018.

# 2. Financial	Statement	Schedule:

II	–	Valuation	and	Qualifying	Accounts

10.3* 2007	Stock	Compensation	Plan	(incorporated	herein	by	reference	to	Exhibit	10.6	to	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	fiscal quarter	ended	August	29,	2010).

2009	Stock	Compensation	Plan	(incorporated	herein	by	reference	to	Exhibit	10.7	to	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	fiscal quarter	ended	August	29,	2010).

10.5* 2011	Stock	Compensation	Plan	(incorporated	herein	by	reference	to	Exhibit	10.6	to	the	Company's	Annual	Report	on	Form	10-K	for	the	fiscal	year ended	May	31,	2015).

10.12* 2005	Supplemental	Retirement	Plan	(incorporated	herein	by	reference	to	Exhibit	10.12	to	the	Company's	Annual	Report	on	Form	10-K	for	the	fiscal year	ended	May	27,	2018).

10.13* Deferred	Compensation	Plan	(Grandfathered)	(incorporated	herein	by	reference	to	Exhibit	10.14	to	the	Company's	Quarterly	Report	on	Form	10-Q for	the	fiscal	quarter	ended	February	22,	2009).

10.15* Executive	Survivor	Income	Plan	(incorporated	herein	by	reference	to	Exhibit	10.6	to	the	Company's	Annual	Report	on	Form	10-K	for	the	fiscal	year ended	May	29,	2005).

10.16* Supplemental	Benefits	Trust	Agreement,	amended	and	restated	as	of	September	26,	1988,	between	the	Company	and	Norwest	Bank	Minnesota, N.A.	(incorporated	herein	by	reference	to	Exhibit	10.3	to	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	fiscal	quarter	ended	November	27, 2011).

10.17* Supplemental	Benefits	Trust	Agreement,	dated	September	26,	1988,	between	the	Company	and	Norwest	Bank	Minnesota,	N.A.	(incorporated	herein by	reference	to	Exhibit	10.4	to	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	fiscal	quarter	ended	November	27,	2011).

10.30 Addendum	No.	10	to	the	Protocol	of	Cereal	Partners	Worldwide,	effective	January	1,	2010,	among	the	Company,	Nestle	S.A.,	and	CPW	S.A. (incorporated	herein	by	reference	to	Exhibit	10.1	to	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	fiscal	quarter	ended	February	28,	2010).

10.31+ Addendum	No.	11	 to	 the	Protocol	of	Cereal	Partners	Worldwide,	effective	July	17,	2012,	among	 the	Company,	Nestle	S.A.,	and	CPW	S.A. (incorporated	herein	by	reference	to	Exhibit	10.1	to	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	fiscal	quarter	ended	August	26,	2012).

10.32 Five-Year	Credit	Agreement,	dated	as	of	May	18,	2016,	among	the	Company,	the	several	financial	institutions	from	time	to	time	party	to	the agreement,	and	Bank	of	America,	N.A.,	as	Administrative	Agent	(incorporated	herein	by	reference	to	Exhibit	10.1	to	the	Company's	Current	Report on	Form	8-K	filed	May	18,	2016).

104 Cover	Page,	formatted	in	Inline	Extensible	Business	Reporting	Language	and	contained	in	Exhibit	101.

* Management	contract	or	compensatory	plan	or	arrangement	required	to	be	filed	as	an	exhibit	pursuant	to	Item	15	of	Form	10-K.

+ Confidential	information	has	been	omitted	from	the	exhibit	and	filed	separately	with	the	SEC	pursuant	to	Rule	24b-2	of	the	Securities	Exchange	Act	of	1934.

Pursuant	to	Item	601(b)(4)(iii)	of	Regulation	S-K,	copies	of	certain	instruments	defining	the	rights	of	holders	of	our	long-term	debt	are	not	filed	and,	in	lieu	thereof,	we agree	to	furnish	copies	to	the	SEC	upon	request.

Not	Applicable.

# Signatures

Pursuant	to	the	requirements	of	Section	13	or	15(d)	of	the	Securities	Exchange	Act	of	1934,	the	registrant	has	duly	caused	this	report	to	be	signed	on	its	behalf	by	the undersigned,	thereunto	duly	authorized.

Pursuant	to	the	requirements	of	the	Securities	Exchange	Act	of	1934,	this	report	has	been	signed	below	by	the	following	persons	on	behalf	of	the	registrant	and	in	the capacities	and	on	the	dates	indicated.

| Signature | Title | Date |
| :--- | :--- | :--- |
| /s/\tJeffrey\tL\tHarmening | Chairman\tof\tthe\tBoard,\tChief\tExecutive\tOfficer,\tand\tDirector | July\t2,\t2020 |
| Jeffrey\tL.\tHarmening | (Principal\tExecutive\tOfficer) |  |
| /s/\tKofi\tA.\tBruce | Chief\tFinancial\tOfficer | July\t2,\t2020 |
| Kofi\tA.\tBruce | (Principal\tFinancial\tOfficer) |  |
| /s/\tMark\tA.\tPallot | Vice\tPresident,\tChief\tAccounting\tOfficer | July\t2,\t2020 |
| Mark\tA.\tPallot | (Principal\tAccounting\tOfficer) |  |
| /s/\tR.\tKerry\tClark\nR.\tKerry\tClark | Director | July\t2,\t2020 |
| /s/\tDavid\tM.\tCordani\nDavid\tM.\tCordani | Director | July\t2,\t2020 |
| /s/\tRoger\tW.\tFerguson\tJr.\nRoger\tW.\tFerguson\tJr. | Director | July\t2,\t2020 |
| /s/\tMaria\tG.\tHenry\nMaria\tG.\tHenry | Director | July\t2,\t2020 |
| /s/\tJo\tAnn\tJenkins\nJo\tAnn\tJenkins | Director | July\t2,\t2020 |
| /s/\tElizabeth\tC.\tLempres\nElizabeth\tC.\tLempres | Director | July\t2,\t2020 |
| /s/\tDiane\tL.\tNeal\nDiane\tL.\tNeal | Director | July\t2,\t2020 |
| /s/\tSteve\tOdland\nSteve\tOdland | Director | July\t2,\t2020 |
| /s/\tMaria\tA.\tSastre\nMaria\tA.\tSastre | Director | July\t2,\t2020 |
| /s/\tEric\tD.\tSprunk | Director | July\t2,\t2020 |

# Schedule	II	-	Valuation	of	Qualifying	Accounts

| In	Millions | 2020 | 2019 | 2018 |
| :--- | :--- | :--- | :--- |
| Allowance\tfor\tdoubtful\taccounts: |  |  |  |
| Balance\tat\tbeginning\tof\tyear | $28.8 | $28.4 | $24.3 |
| Additions\tcharged\tto\texpense | 25.9 | 23.9 | 26.7 |
| Bad\tdebt\twrite-offs | (22.9) | (22.7) | (26.9) |
| Other\tadjustments\tand\treclassifications | 1.4 | (0.8) | 4.3 |
| Balance\tat\tend\tof\tyear | $33.2 | $28.8 | $28.4 |
| Valuation\tallowance\tfor\tdeferred\ttax\tassets: |  |  |  |
| Balance\tat\tbeginning\tof\tyear | $213.7 | $176.0 | $231.8 |
| Additions\tcharged\tto\texpense | 4.2 | (5.2) | 2.4 |
| Adjustments\tdue\tto\tacquisitions,\ttranslation\tof\tamounts,\tand\tother | (3.7) | 42.9 | (58.2) |
| Balance\tat\tend\tof\tyear | $214.2 | $213.7 | $176.0 |
| Reserve\tfor\trestructuring\tand\tother\texit\tcharges: |  |  |  |
| Balance\tat\tbeginning\tof\tyear | $36.5 | $66.8 | $85.0 |
| Additions\tcharged\tto\texpense,\tincluding\ttranslation\tamounts | (2.5) | 11.6 | 40.3 |
| Net\tamounts\tutilized\tfor\trestructuring\tactivities | (16.2) | (41.9) | (58.5) |
| Balance\tat\tend\tof\tyear | $17.8 | $36.5 | $66.8 |
| Reserve\tfor\tLIFO\tvaluation: |  |  |  |
| Balance\tat\tbeginning\tof\tyear | $213.5 | $213.2 | $209.1 |
| (Decrease)\tincrease | (11.4) | 0.3 | 4.1 |
| Balance\tat\tend\tof\tyear | $202.1 | $213.5 | $213.2 |


what is the sales growth rate from 2017 to 2018?