150 Years of GrowthBranded Growth • Global Growth • Shareholder Value Growth General Mills 2016 Annual Report Left: Wheaties cereal print ad, 1939 Below: Gold Medal flour recipe book, 1907 Our Fiscal 2016 Financial Highlights Change on In Millions, Except per Share, 52 Weeks Ended 53 Weeks Ended a Constant Profit Margin and Return on Capital Data May 29, 2016 May 31, 2015 Change Currency Basis* Net Sales $ 16,563 $ 17,630 – 6% – 2% Total Segment Operating Profit* $ 3,000 $ 3,035 – 1% + 1% Adjusted Operating Profit Margin* 16.8% 15.9% +90 basis points Net Earnings Attributable to General Mills $ 1,697 $ 1,221 + 39% Diluted Earnings per Share (EPS) $ 2.77 $ 1.97 + 41% Adjusted Diluted EPS, Excluding Certain Items Affecting Comparability* $ 2.92 $ 2.86 + 2% + 5% Adjusted Return on Average Total Capital* 11.3% 11.2% +10 basis points +40 basis points Average Diluted Shares Outstanding 612 619 – 1% Dividends per Share $ 1.78 $ 1.67 + 7% Adjusted Diluted Net Sales Total Segment Operating Profit* Earnings per Share* (dollars in millions) (dollars in millions) (dollars) ŬŪūŬ $16,658 ŬŪūŬ $3,012 ŬŪūŬ $2.56 ŬŪūŭ $17,774 ŬŪūŭ $3,223 ŬŪūŭ $2.72 ŬŪūŮ $17,910 ŬŪūŮ $3,154 ŬŪūŮ $2.82 ŬŪūů $17,630 ŬŪūů $3,035 ŬŪūů $2.86 ŬŪūŰ $16,563 ŬŪūŰ $3,000 ŬŪūŰ $2.92 *See page 31 for a discussion of these non-GAAP measures. 150 Years of Growth General Mills is celebrating its 150th anniversary this year! From our grain-milling roots in the upper Midwest of the U.S., we have grown to become a global packaged food company that generates nearly $18 billion in annual sales with products available in more than 100 markets worldwide. We owe our longevity to our ability to adapt to a changing marketplace and, with our Consumer First strategy, we are excited about our prospects for growth for the next 150 years. General Mills at a Glance U.S. Retail International Convenience Stores Joint Ventures Net Sales by Operating Unit Net Sales by Region and Foodservice Net Sales by Joint Venture Net Sales by Brand Type (not consolidated, proportionateLJshare) 13% 15% 12% 24% 18% 19% 43% 20% 52% 36% 23% 82% 21% 22% $10.0 Billion $4.6 Billion $1.9 Billion $1.0 Billion 24% Meals 43% Europe 52% Branded to 82% Cereal Partners Foodservice Worldwide (CPW) 23% Cereal 22% Asia/Pacific Operators 18% Häagen-Dazs Japan 21% Snacks 20% Canada 36% Branded to (HDJ) 19% Baking Products 15% Latin America Consumers 13% Yogurt and Other 12% Unbranded 2016 Annual Report 1 Ken Powell Chairman and Chief Executive Officer Total Shareholder Return (fiscal years, stock price appreciation plus reinvested dividends, compound To Our Shareholders annual growth) Fiscal 2016 was a milestone year for us at General 2016 Mills as we celebrated our 150th anniversary. 15% During our history, we have introduced some 2% of the most iconic food brands around the Latest 3 Years 12% world. We’ve grown globally and now compete 11% in more than 100 markets worldwide. And we’ve Latest 5 Years consistently delivered solid shareholder value. 13% Our operating performance this year slightly 12% exceeded our plan and we generated double-digit General Mills S&P 500 Index returns for our shareholders. And as our history Source: Bloomberg shows, we are adaptable and are positioning ourselves well for future growth. Dividends per Share 150 Years of Growth (dollars) Our company began with a single flour mill built in 1866 on the banks ofthe Mississippi River in Minneapolis, Minn. Over the years, our ŬŪūŬ 1.22 business portfolio expanded to include a broad range of industries — from flour to apparel, from toys to restaurants — before refocusing on ŬŪūŭ 1.32 consumer foods in 1995. We’ve grown our company by developing ŬŪūŮ 1.55 and nurturing great brands that consumers trust. Our seven largest brands— Cheerios , Betty Crocker, Pillsbury, Nature Valley, Yoplait, Old El Paso ŬŪūů 1.67 and Häagen-Dazs— each generate more than $1billion in annual retail sales. Most of our brands hold the No. 1 or No. 2 share positions in their ŬŪūŰ 1.78 ŬŪūű 1.92 New Annualized Rate 2 General Mills categories,categories, and they’vethey proven to be resilient as market conditions ananddLJconsumer tastestaste have changed through the years. WWe’vee’ve also grown bbyy substantially increasing our global presence. Over the past decadedecad alone, combined net sales for our consolidated International operationsoperat plus our 50- percent share of joint venture revenuesrevenues hhaveave momorere than doubled. Today, these businesses combined generategenerate nearlynearly $6$6LJbillionb in international net sales, or about one third of total companycompany sales.sa We’ve been increasing our global footprint byby acquacquiringiring new bbrandsr in international markets and expanding our current brandsbrands iintonto more markets around the world. A great example isLJour recent introdintroductionu of Yoplait yogurt in China; you can read about that on page 6 of this report. ByBy drivingdriving branded growthg and global growth, we’ve generated strong increasesincreases in shareholdershareho value over time. GeneralLJMills incorporated in 1928 and began tradingt on the New York Stock Exchange (NYSE) in GrowingGrowing OOurur CCoreore November of that year.ye As a matter of fact, GeneralLJMills is the 48th CeCerealreal BrBrandsands longest-trading companycom of the 2,400LJcompanies currently listed on the CheeriosCheerios is the best-sellingbest-selling cereal NYSE. Delivering vvaluea to our shareholders has been the cornerstone franchisefranchise in thethe U.S.U.S. andand HHoneyoney NuNutt of our existence, andan dividends are a key part of that. GeneralLJMills CCheeriosheerios is the best-sellinbest-sellingg cereal. andLJits predecessor firm have paid a dividend for 117 consecutive years. In fiscal 2016, we made five of the OthtfifOver the past five fiscali years, our annual dividend has grown at a top-selling Cheerios flavors gluten 10LJpercent compound rate. And our total shareholder return, which is a free, driving low single-digit retail combination of stock price appreciation plus dividends, has consistently sales growth on these varieties. We’ll outperformed the broader market, generating double-digit returns over transition two more Cheerios varieties nearly any extended period of time. Fiscal 2016 was no exception as our to gluten free in fiscal 2017. More shareholder return totaled 15LJpercent, well ahead of the S&P 500LJIndex. than half of U.S. consumers told us We attribute our longevity to our ability to adapt to changing they want to avoid artificial colors consumer needs, and never has that been more vital than today as and flavors. So we announced our consumers’ food interests are evolving rapidly. Increasingly, consumers commitment to remove artificial flavors value simplicity in their food, often in the form of fewer, natural and colors from artificial sources from ingredients. They seek foods that meet their definition of wellness, all of our cereals. Today, 90džpercent which can mean more protein, more whole grains, or less sugar. And of our cereals meet this claim, and we they’re snacking more than ever. Internationally, as the middle class continue to work on the remainder grows around the world, consumer demand for convenient, great- of our portfolio. In addition, all of our tasting food is expanding. In fiscal 2016, we brought a variety of cereals are free of high fructose corn renovation and innovation news to our brands designed to leverage syrup. By putting the consumer first, these changing consumer demands. we saw improved retail sales trends for our U.S. cereals in fiscal 2016. Fiscal 2016 Performance GeneralLJMills net sales for the fiscal year ended MayLJ29, 2016, declined 6LJpercent to $16.6LJbillion, reflecting the sale of the Green Giant vegetable business in North America, foreign currency headwinds 1941 andLJa comparison to a 53-week fiscal year in 2015. Excluding the Cheerios cereal impact of foreign exchange, our net sales declined 2LJpercent in was first introduced. fiscal 2016.* Total segment operating profit decreased 1LJpercent to Thirty-seven years later, $3.0LJbillion. On a constant- currency basis, total segment operating we launched a second variety: Honey Nut profit increased 1LJpercent. Cheerios. *See page 31 for a reconciliation of this and other non-GAAP measures used in this letter. 2016 Annual Report 3 Convenience Stores and Foodservice Segment Operating Profit (fiscal years, dollars in millions) 2016 Diluted earnings per share increased 41percent to $2.77 in fiscal 2016.Adjusted diluted earnings per share, which excludes certain 19.7% $379 items affecting comparability of results, rose 2percent to $2.92. 2009 Excluding the impact of foreign exchange, adjusted diluted earnings 8.9% $178 per share increased 5percent. Segment Operating Profit Net sales for U.S. Retail, our largest business segment, declined to Profit Margin $10.0billion, due in part to the divestiture of the Green Giant vegetable (operating profit divided by net sales) business and a comparison to last year’s 53-week fiscal year. As we saw consumer food preferences changing, we went to work to bring renovation and innovation news to many of our brands to drive growth. For example, we made product improvements to our NatureLJValley 1964 snacks and brought gluten-free messaging to 20percent of the line. General Mills We introduced the Annie’s organic brand to new categories, including entered the snack yogurt, soup and cereal. And we drove growth on many of our cereal food market with Bugles, brands with gluten-free messaging and the removal of artificial flavors Daisy*s and Whistles. In 1975, we introduced Nature and colors. In fiscal 2017, we’ll continue to innovate onour brands to Valley granola bars — and drive sales growth for us and our categories. the country has been eating up our snacks Our Convenience Stores and Foodservice segment had another ever since.