General Mills Reports Results for Fiscal 2006 Second Quarter.MINNEAPOLIS Minneapolis (mĭn'ēăp`əlĭs), city (1990 pop. 368,383), seat of Hennepin co., E Minn., at the head of navigation on the Mississippi River, at St. Anthony Falls; inc. 1856. -- Net Sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight Rose 3 Percent to $3.27 Billion Net Diluted Earnings Per Share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of Increased 5 Percent to 97 Cents Company Recently Increased Full-Year Earnings Guidance General Mills  This article or section may contain a proseline.Please help [ convert this timeline] into prose or, if necessary, a . (NYSE NYSE See: New York Stock Exchange :GIS (1) (Geographic Information System) An information system that deals with spatial information. Often called "mapping software," it links attributes and characteristics of an area to its geographic location. ) today reported results for the second quarter of fiscal 2006. Net sales for the 13 weeks ended Nov. 27, 2005, were $3.27 billion, up 3 percent from results for the same period a year ago. Unit volume grew 2 percent worldwide. Segment operating profits Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. of $647 million were 2 percent below strong prior-year results, reflecting higher advertising spending and freight The price or compensation paid for the transportation of goods by a carrier. Freight is also applied to the goods transported by such carriers. The liability of a carrier for freight damaged, lost, or destroyed during shipment is determined by contract, statute, or costs. Earnings after tax increased 1 percent to $370 million. Diluted earnings per share (EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ) rose 5 percent to 97 cents this year compared to 92 cents in last year's second quarter. EPS results for both years include the effect of accounting for contingently con·tin·gent adj. 1. Liable to occur but not with certainty; possible: "All salaries are reckoned on contingent as well as on actual services" Ralph Waldo Emerson. convertible debt. This reduced second-quarter EPS by 5 cents in each period. Through the first six months of fiscal 2006, General Mills' net sales were up 3 percent to $5.94 billion. Segment operating profits increased 7 percent to $1.15 billion. Earnings after tax grew 13 percent to $622 million, and diluted earnings per share rose 18 percent to $1.60 including 9 cents of dilution Dilution A reduction in earnings per share of common stock that occurs through the issuance of additional shares or the conversion of convertible securities. Notes: Adding to the number of shares outstanding reduces the value of holdings of existing shareholders. associated with accounting for contingently convertible debt. Chairman and Chief Executive Officer Steve v. t. 1. To pack or stow, as cargo in a ship's hold. See Steeve. Sanger Sanger, city (1990 pop. 16,839), Fresno co., S central Calif., in the San Joaquin Valley; inc. 1911. It is a shipping and processing center for a variety of agricultural products. Manufactures include sheet metal products, wine, machinery, and corrugated boxes. said, "We're we're Contraction of we are. we're we are pleased with our performance in the second quarter. The 3 percent net sales gain was on top of a 4 percent increase in last year's second quarter, and all three of our business segments posted sales growth for the period. And while higher input costs and increased advertising spending pressured margins, earnings per share exceeded our plan for the quarter." U.S. Retail Results Net sales for General Mills' domestic retail operations grew 3 percent in the second quarter to $2.34 billion, reflecting 2 percent unit volume growth and net price realization (specification) realization - A UML semantic relationship between a classifier that specifies a contract and another classifier that guarantees to carry it out. [Handout by Mr. David Gillibrand]. . Operating profits totaled $545 million, down 4 percent from prior-year profits that were up 5 percent from 2004 levels. The Meals division made the strongest dollar contribution to net sales growth, with a 9 percent increase driven by Progresso Progresso is a brand of Italian food products, mostly soup and beans, sold since 1949. Up until the 1970s, it was a family owned company. It is now owned by General Mills. It is often seen as an upmarket alternative to market leader Campbell's soup, and as a meal replacement. soup and Helper dinner mixes. Yoplait Yoplait (pronounced yo-play) is a company owned by two French holdings, SODIAAL and PAI Management, and is the second best selling brand in dairy products. History net sales grew 16 percent, reflecting continued strong performance from core product lines and new Chocolate chocolate, general term for the products of the seeds of the cacao or chocolate tree, used for making beverages or confectionery. The flavor of chocolate depends not only on the quality of the cocoa nibs (the remainder after the seeds are fermented, dried, and Whips! yogurt yogurt: see fermented milk. yogurt Semisolid, fermented, often flavoured milk food. Yogurt is known and consumed in almost all parts of the world. . Snacks net sales grew 8 percent, led by Nature Valley granola bars and Chex Mix This Chex Mix may contain original research or unverified claims. Please help Wikipedia by adding references. See the for details. This article has been tagged since September 2007. . Baking baking: see cooking. baking Process of cooking by dry heat, especially in an oven. Baked products include bread, cookies, pies, and pastries. Products net sales rose 3 percent in the second quarter, reflecting price realization and favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. mix, including strong performance from new Warm Delights single-serve microwaveable desserts. Big G cereal cereal or grain Any grass yielding starchy seeds suitable for food. The most commonly cultivated cereals are wheat, rice, rye, oats, barley, corn, and sorghum. As human food, cereals are usually marketed in raw grain form or as ingredients of food products. net sales were 2 percent below prior-year results. Pillsbury Pills·bur·y , Charles Alfred 1842-1899. American manufacturer who founded (1869) C.A. Pillsbury and Company, one of the largest flour-milling enterprises of the 19th century. USA net sales declined 4 percent for the quarter, with lower results from refrigerated re·frig·er·ate tr.v. re·frig·er·at·ed, re·frig·er·at·ing, re·frig·er·ates 1. To cool or chill (a substance). 2. To preserve (food) by chilling. cookies and Totino's Totino's and Jeno's are brands of frozen pizza owned by General Mills, which collectively are reportedly the best selling economy frozen pizza brands in the United States. Totino's was acquired by General Mills, when that company purchased Pillsbury. . Total consumer purchases of the company's products grew in the quarter, as composite composite, alternate common name for Asteraceae or Compositae, the aster family. composite - aggregate sales for major product lines were up 4 percent. Through the first six months of 2006, General Mills U.S. Retail net sales were up 2 percent to $4.14 billion and operating profits were up 3 percent to $951 million. International Segment Results Net sales for General Mills' consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: International businesses grew 8 percent in the second quarter to reach $472 million. Unit volume rose 5 percent, and foreign exchange contributed 2 points of growth. Operating profits grew to $56 million, a 14 percent increase from year-ago results. Through the first six months, International segment net sales grew 9 percent to reach $918 million and operating profits rose 38 percent to exceed $117 million. Bakeries and Foodservice The foodservice (or food service) industry (US English; catering industry in British English) encompasses those places, institutions, and companies responsible for any meal eaten away from home. Segment Results Second-quarter net sales for General Mills' Bakeries and Foodservice segment totaled $465 million, up 2 percent from year-ago results. Unit volume essentially matched prior-year levels. Operating profits also matched prior-year results and totaled $46 million. Through the first six months, Bakeries and Foodservice net sales were up slightly to $882 million and operating profits were up 14 percent to $79 million. Joint Venture Summary Earnings after tax from joint ventures totaled $21 million in the second quarter, down from $24 million a year earlier due to the absence of earnings from the divested Snack Ventures Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). (SVE SVEspecial visceral efferent. ) joint venture. Cereal Partners Worldwide Cereal Partners Worldwide S.A. is a joint venture between General Mills and Nestlé, established in 1990 to produce breakfast cereals. The company is headquartered in Lausanne, Switzerland, and markets cereals in more than 130 countries (except for the U.S. and Canada). , the company's ready-to-eat Adj. 1. ready-to-eat - food products that are prepared in advance and can be eaten as sold ready-made - made for purchase and immediate use cereal joint venture with Nestle, posted a 4 percent net sales gain for the period. Net sales for the Haagen-Dazs joint ventures in Asia also grew 4 percent, and net sales for 8th Continent continent, largest unit of landmasses on the earth. The continents include Eurasia (conventionally regarded as two continents, Europe and Asia), Africa, North America, South America, Australia, and Antarctica. , the company's joint venture with DuPont Dupont, DuPont, Du Pont, or du Pont may refer to: Companies
Through the first half, earnings from joint ventures totaled $39 million after tax. Corporate Items Interest expense for the quarter totaled $103 million, 18 percent below last year's second quarter primarily due to lower debt levels. Corporate unallocated expense in the second quarter totaled $2 million. In last year's second quarter, corporate unallocated expense totaled $20 million, including $8 million of identified items expense (primarily accelerated depreciation Accelerated Depreciation Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years of the life of an asset. Notes: The straight-line depreciation method spreads the cost evenly over the life of an asset. ). Restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and other exit costs totaled $2 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta in the second quarter of 2006 compared to $3 million pre-tax in the second quarter of 2005. The effective tax rate for the second quarter was 35.4 percent, essentially in line with the company's expectations for the full year. Last year's second-quarter tax rate was lower due to the resolution of certain tax items. Cash Flow Summary Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses totaled $763 million through November November: see month. 2005, up from $523 million in the prior year. Capital expenditures through the first six months totaled $113 million, compared to $154 million in the first half of fiscal 2005. Outlook Commenting on the year, Sanger noted, "Through the first half, we achieved net sales growth, price realization and margin expansion in all three of our operating segments. This performance drove strong growth on our bottom line and has put us ahead of plan as we move into the second half of 2006. "Our earnings expectations for the second half include significant year-over-year increases in consumer marketing expense and input costs," he continued. "But based on our good first-half performance, we raised our 2006 earnings guidance as announced on December December: see month. 12 to a range of $2.80 to $2.85 per share, including an estimated 8 cents of dilution associated with accounting for contingently convertible debt." The company also recently announced an increase in the quarterly dividend to a rate of 34 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. . General Mills will hold a briefing for investors today, December 22, 2005, beginning at 8:30 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy . You may access the web cast from General Mills' corporate home page: www.generalmills.com. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of The Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 that are based on management's current expectations and assumptions. These forward-looking statements, including the statements under the caption "Outlook" and statements made by Mr. Sanger, are subject to certain risks and uncertainties that could cause actual results to differ materially from the potential results discussed in the forward-looking statements. In particular, our predictions about future net sales, volume and earnings could be affected by a variety of factors, including: 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 COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. ; actions of competitors other than as described above; economic conditions, including changes in inflation rates, interest rates or tax rates; 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 laws and regulations, including changes in accounting standards and labeling and advertising regulations; changes in customer 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 obesity, condition resulting from excessive storage of fat in the body. Obesity has been defined as a weight more than 20% above what is considered normal according to standard age, height, and weight tables, or by a complex formula known as the body mass index. ; 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; benefit plan expenses due to changes in plan asset values and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. discount rates used to determine plan liabilities; foreign economic conditions, including currency rate fluctuations; and political unrest Unrest is a sociological phenomenon, for instance:
2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or .
GENERAL MILLS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited) (In Millions, Except per Share Data)
13 Weeks Ended 26 Weeks Ended
-----------------------------------
Nov. 27, Nov. 28, Nov. 27, Nov. 28,
2005 2004 2005 2004
-------- -------- -------- --------
Net Sales $3,273 $3,168 $5,935 $5,753
Costs and Expenses:
Cost of sales 1,928 1,889 3,485 3,470
Selling, general and
administrative 700 637 1,342 1,248
Interest, net 103 125 193 238
Restructuring and other exit
costs 2 3 11 43
-------- -------- -------- --------
Total Costs and Expenses 2,733 2,654 5,031 4,999
-------- -------- -------- --------
Earnings before Income Taxes and
Earnings from Joint Ventures 540 514 904 754
Income Taxes 191 171 321 254
Earnings from Joint Ventures 21 24 39 50
-------- -------- -------- --------
Net Earnings $370 $367 $622 $550
======== ======== ======== ========
Earnings per Share - Basic $1.04 $.99 $1.73 $1.47
======== ======== ======== ========
Earnings per Share - Diluted $.97 $.92 $1.60 $1.36
======== ======== ======== ========
Dividends per Share $.33 $.31 $.66 $.62
======== ======== ======== ========
See accompanying notes.
GENERAL MILLS, INC. AND SUBSIDIARIES
OPERATING SEGMENTS
(Unaudited) (In Millions)
13 Weeks Ended 26 Weeks Ended
----------------- -----------------
Nov. 27, Nov. 28, Nov. 27, Nov. 28,
2005 2004 2005 2004
-------- -------- -------- --------
Net Sales
U.S. Retail $2,336 $2,276 $4,135 $4,036
International 472 436 918 840
Bakeries and Foodservice 465 456 882 877
-------- -------- -------- --------
Total $3,273 $3,168 $5,935 $5,753
======== ======== ======== ========
Segment Operating Profit
U.S. Retail $545 $567 $951 $921
International 56 49 117 85
Bakeries and Foodservice 46 46 79 69
-------- -------- -------- --------
Total 647 662 1,147 1,075
Unallocated corporate items (2) (20) (39) (40)
Interest, net (103) (125) (193) (238)
Restructuring and other exit costs (2) (3) (11) (43)
-------- -------- -------- --------
Earnings before Income Taxes and
Earnings from Joint Ventures $540 $514 $904 $754
======== ======== ======== ========
See accompanying notes.
GENERAL MILLS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Millions)
(Unaudited) (Unaudited)
Nov. 27, Nov. 28, May 29,
2005 2004 2005
----------- ----------- ----------
ASSETS
Current Assets:
Cash and cash equivalents $730 $561 $573
Receivables 1,167 1,146 1,034
Inventories 1,258 1,233 1,037
Prepaid expenses and other
current assets 179 180 203
Deferred income taxes 186 187 208
----------- ----------- ----------
Total Current Assets 3,520 3,307 3,055
----------- ----------- ----------
Land, Buildings and Equipment, at
Cost 5,498 5,426 5,468
Less accumulated depreciation (2,619) (2,371) (2,461)
----------- ----------- ----------
Net Land, Buildings and
Equipment 2,879 3,055 3,007
Goodwill 6,667 6,725 6,684
Other Intangible Assets 3,694 3,637 3,636
Other Assets 1,700 1,925 1,684
----------- ----------- ----------
Total Assets $18,460 $18,649 $18,066
=========== =========== ==========
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable $1,235 $1,132 $1,136
Current portion of long-term debt 589 19 1,638
Notes payable 2,081 347 299
Other current liabilities 1,249 857 1,111
----------- ----------- ----------
Total Current Liabilities 5,154 2,355 4,184
Long-term Debt 3,995 7,429 4,255
Deferred Income Taxes 1,843 1,814 1,851
Other Liabilities 938 933 967
----------- ----------- ----------
Total Liabilities 11,930 12,531 11,257
----------- ----------- ----------
Minority Interests 1,134 1,135 1,133
Stockholders' Equity:
Common stock, 502 shares issued,
$.10 par value 50 50 50
Additional paid-in capital 5,710 5,613 5,691
Retained earnings 4,882 4,041 4,501
Common stock in treasury (5,140) (4,623) (4,460)
Unearned compensation (101) (87) (114)
Accumulated other comprehensive
income (loss) (5) (11) 8
----------- ----------- ----------
Total Stockholders' Equity 5,396 4,983 5,676
----------- ----------- ----------
Total Liabilities and Equity $18,460 $18,649 $18,066
=========== =========== ==========
See accompanying notes.
GENERAL MILLS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (In Millions)
26 Weeks Ended
-----------------
Nov. 27, Nov. 28,
2005 2004
-------- --------
Cash Flows - Operating Activities:
Net earnings $622 $550
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 211 221
Deferred income taxes (3) 12
Changes in current assets and liabilities (77) (271)
Tax benefit on exercised options 15 17
Pension and other postretirement activity (28) (52)
Restructuring and other exit costs 11 43
Other, net 12 3
-------- --------
Net Cash Provided by Operating Activities 763 523
-------- --------
Cash Flows - Investing Activities:
Purchases of land, buildings and equipment (106) (149)
Investments in businesses and intangibles (7) (5)
Investments in affiliates, net of investment
returns and dividends 28 13
Purchases of marketable investments - (1)
Proceeds from sale of marketable securities 1 25
Proceeds from disposal of land, buildings &
equipment 2 10
Other, net (29) (6)
-------- --------
Net Cash Used by Investing Activities (111) (113)
-------- --------
Cash Flows - Financing Activities:
Change in notes payable 1,780 (257)
Issuance of long-term debt - 1
Payment of long-term debt (1,333) (221)
Proceeds from issuance of preferred stock of
subsidiary
to minority interest investors - 835
Common stock issued 53 44
Purchases of common stock for treasury (752) (759)
Dividends paid (241) (231)
Other, net (2) (12)
-------- --------
Net Cash Used by Financing Activities (495) (600)
-------- --------
Increase (decrease) in Cash and Cash Equivalents 157 (190)
Cash and Cash Equivalents - Beginning of Year 573 751
-------- --------
Cash and Cash Equivalents - End of Period $730 $561
======== ========
Cash Flows from Changes in Current Assets and
Liabilities:
Receivables $(151) $(136)
Inventories (219) (150)
Prepaid expenses and other current assets 25 41
Accounts payable 105 (17)
Other current liabilities 163 (9)
-------- --------
Changes in Current Assets and Liabilities $(77) $(271)
======== ========
GENERAL MILLS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) In the second quarter of fiscal 2006, we recorded restructuring
and other exit costs of $2 million, primarily associated with an
additional asset impairment recognized at one of our production
plants. In the second quarter of fiscal 2005, we recorded $3
million of restructuring and other exit costs associated with
restructuring actions previously announced.
In the first 26 weeks of fiscal 2006, we recorded restructuring
and other exit costs of $11 million, consisting of $10 million of
charges related to an asset impairment recognized at one of our
production plants and $1 million of charges associated with
restructuring actions previously announced. In the first 26 weeks
of fiscal 2005, we recorded restructuring and other exit costs of
$43 million, consisting of $38 million of charges associated with
supply chain initiatives to further increase asset utilization and
reduce manufacturing and sourcing costs, and $5 million of charges
associated with restructuring actions previously announced.
The fiscal 2005 supply chain actions also resulted in certain
associated expenses, primarily adjustments to the depreciable life
of the assets necessary to reflect the shortened asset lives which
coincided with final production dates. These associated expenses
were recorded as cost of sales. In the second quarter of fiscal
2006, there were no associated expenses recorded in cost of sales;
in the second quarter of fiscal 2005, the associated expense
recorded in cost of sales was $8 million. For the first 26 weeks
of fiscal 2006, the expense recorded in cost of sales was $2
million; for the first 26 weeks of fiscal 2005, the expense
recorded in cost of sales was $13 million.
(2) In the third quarter of fiscal 2005, we adopted Emerging Issues
Task Force (EITF) Issue No. 04-8, "The Effect of Contingently
Convertible Debt on Diluted Earnings per Share" (EITF 04-8). The
adoption of EITF 04-8 reduced our previously reported diluted
earnings per share by $0.05 for the second quarter of fiscal 2005
and by $0.08 for the first 26 weeks of fiscal 2005.
On October 28, 2005, we repurchased our zero coupon convertible
debentures in the aggregate principal amount of $1.33 billion,
including $77 million of accreted original issue discount. These
debentures had an aggregate principal amount at maturity of $1.86
billion. There was no gain or loss associated with this
repurchase. Following this repurchase, there are $371 million in
aggregate principal amount at maturity of the debentures, or $265
million of current accreted value, still outstanding. We used the
proceeds from the issuance of commercial paper to fund the
purchase price of the debentures. We also have reclassified the
remaining zero coupon convertible debentures to long-term debt
based on the put rights of the holders.
We recently completed a consent solicitation related to our
debentures and also made an irrevocable election to satisfy in
cash future repurchases or conversion of the debentures that
remain outstanding. As a result of these actions, beginning in the
third quarter of fiscal 2006 no shares of common stock underlying
the debentures will be considered outstanding for purposes of
calculating our diluted earnings per share.
Basic and diluted earnings per share (EPS) were calculated as
follows:
In Millions, Except Per Share Data 13 Weeks Ended 26 Weeks Ended
----------------------------------------------------------------------
Nov. 27, Nov. 28, Nov. 27, Nov. 28,
2005 2004 2005 2004
-----------------------------------
Net earnings - as reported $370 $367 $622 $550
Interest on contingently
convertible debentures,
after tax 3 5 8 10
-----------------------------------
Net earnings for diluted EPS
calculation $373 $372 $630 $560
-----------------------------------
Average number of common shares --
basic EPS 355 370 360 375
Incremental share effect from:
Stock options 5 6 6 6
Restricted stock, stock rights and
other 2 1 2 1
Contingently convertible
debentures 22 29 25 29
-----------------------------------
Average number of common shares --
diluted EPS 384 406 393 411
-----------------------------------
Earnings per Share - Basic $1.04 $.99 $1.73 $1.47
Earnings per Share - Diluted $.97 $.92 $1.60 $1.36
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