General Mills General Mills Number One General Mills Boulevard A Portfolio for Global Growth Minneapolis, MN 55426-1347 2011 Report Annual GeneralMills.com Annual Report 2011 What started 70 years ago as a brand new cereal has become a mainstay on millions of breakfast tables. Today, one of every eight boxes of cereal sold in the U.S. is a Cheerios variety. Shareholder Information World Headquarters Transfer Agent and Registrar Notice of Annual Meeting Number One General Mills Boulevard Our transfer agent can assist you with Th e annual meeting of shareholders will WE HAVE A Minneapolis, MN 55426-1347 a variety of services, including change be held at 11 a.m., Central Daylight Time, Phone: (763) 764-7600 of address or questions about dividend Sept. 26, 2011, at the Children’s Th eatre checks. Company, 2400 Th ird Avenue South, PORTFOLIO BUILT FOR Website Minneapolis, MN 55404-3597. GeneralMills.com Wells Fargo Bank, N.A. 161 North Concord Exchange A ticket or proof of share ownership will GLOBAL GROWTH. Markets P.O. Box 64854 be required for admission. Please refer New York Stock Exchange St. Paul, MN 55164-0854 to our Proxy Statement for information Trading Symbol: GIS Phone: (800) 670-4763 or (651) 450-4084 concerning admission to the meeting. From ready-to-eat cereal to convenient meals to wholesome snacks, we WellsFargo.com/shareownerservices compete in growing food categories that are on-trend with consumer Independent Auditor General Mills Direct Stock Purchase Plan KPMG LLP Electronic Access to Proxy Statement, Th is plan provides a convenient and tastes around the world. Our brands hold leading market positions in more 4200 Wells Fargo Center Annual Report and Form 10-K economical way to invest in General Mills than 100 markets worldwide, with great opportunities for expansion. 90 South Seventh Street Shareholders who have access to the stock. You can increase your ownership Minneapolis, MN 55402-3900 Internet are encouraged to enroll in the over time through purchases of common Phone: (612) 305-5000 electronic delivery program. Please see stock and reinvestment of cash dividends, Investor Inquiries the Investors section of our website, without paying brokerage commissions General Shareholder Information: GeneralMills.com, or go directly to the and other fees on your purchases and Investor Relations Department website, ICSDelivery.com/GIS and follow reinvestments. For more information (800) 245-5703 or (763) 764-3202 the instructions to enroll. If your General and a copy of a plan prospectus, go to Mills shares are not registered in your the Investors section of our website at Analysts/Investors: name, contact your bank or broker to GeneralMills.com. Kristen S. Wenker enroll in this program. Vice President, Investor Relations (763) 764-2607 Holiday Gift Boxes Visit us on the Web We have a variety of websites that appeal to consumers around the world. Below is a selection of our most popular sites. For a more complete list, see the “Our websites” General Mills at a Glance page on GeneralMills.com. U.S. Sites International Sites U.S. Retail International Bakeries and Foodservice Joint Ventures Cheerios.com HaagenDazs.com.cn (China) Net sales by division Net sales by region Net sales by customer type Net sales by joint venture Pillsbury.com HaagenDazs.fr (France) (not consolidated, proportionate share) Yoplait.com NatureValley.co.uk (United Kingdom) 2% General Mills Gift Boxes are a part of Larabar.com OldElPaso.com.au (Australia) 8% 13% 12% 15% many shareholders’ December holiday 13% 23% 31% BettyCrocker.com LifeMadeDelicious.ca (Canada) traditions. To request an order form, call Get recipes, cooking tips and view Get recipes, promotions and entertaining us toll free at (888) 469-7809 or write, instructional videos ideas for many of our brands including your name, street address, city, state, zip code and phone number BoxTops4Education.com (including area code) to: Sign up to support your school 15%% 27% 30% EatBetterAmerica.com Th is Report is Printed on Recycled Paper 2011 General Mills Holiday Gift Box 21% 29% 58% Simple ways to eat healthy, including Department 7803 healthier versions of your favorite recipes 10% 18% 85% P.O. Box 5011 Stacy, MN 55078-5011 QueRicaVida.com $10.2 Billion $2.9 Billion $1.8 Billion $1.2 Billion Recipes and nutritional information for Or you can place an order online at: 23% Big G Cereals 31%% Europe 58% B akeries & National 85% Cereal Partners Hispanic consumers Restaurant Accounts Worldwide (CPW) GMIHolidayGift Box.com 21%% Meals 29% Asia/Pacific Tablespoon.com 18% Pillsbury USA 27%% Canada 30% Foodservice Distributors 15% Häagen-Dazs Japan Design by Addison Printing by GLS Companies GLS by Printing Addison Design by Please contact us aft er Oct. 1, 2011. Download coupons, recipes and more for ©2011 General Mills 15% Yoplait 13% Latin America 12% Convenience Stores 13%% Snacks a variety of our brands 8% Baking Products 2% Small Planet Foods/Other Fiscal 2011 Financial Highlights Fiscal Year Ended (In millions, except per share and return on capital data) May 29, 2011 May 30, 2010 Change Net Sales $ 14,880 $ 14,636 + 2% Segment Operating Profi t a 2,946 2,840 + 4 Net Earnings Attributable to General Mills 1,798 1,530 + 18 Diluted Earnings per Share (EPS) 2.70 2.24 + 20 Adjusted Diluted EPS, Excluding Certain Items Aff ecting Comparabilityb 2.48 2.30 + 8 Return on Average Total Capitala 13.7% 13.8% - 10 basis pts. Average Diluted Shares Outstanding 665 683 - 3 Dividends per Share $ 1.12 $ 0.96 + 17 Net Sales Segment Operating Profita Adjusted Diluted Earnings per Shareb Dollars in millions Dollars in millions Dollars 11 14,880 11 2,946 11 14,8802.48 10 14,636 10 2,840 10 2.3014,636 09 14,556 09 2,624 09 1.99 14,556 08 13,548 08 2,394 08 1.76 13,548 07 12,304 07 2,273 07 1.59 12,304 Average Diluted Shares Outstanding Dividends per Share Return on Average Total Capitala Shares in millions Dollars Percent 11 665 11 1.12 11 13.7 10 683 10 0.96 10 13.8 09 687 09 0.86 09 12.3 08 694 08 0.78 08 11.7 07 720 07 0.72 07 11.0 a See page 85 for discussion of non-GAAP measures. b Results exclude certain items aff ecting comparability. See page 85 for discussion of non-GAAP measures. Annual Report 2011 1 To Our Shareholders Ken Powell Chairman and Chief Executive Offi cer I’m pleased to report that General Mills achieved good and natural products. Sales for Big G ready-to-eat cereals sales and earnings growth in fi scal 2011. Our results met declined slightly, along with sales for the U.S. cereal category the key targets we had set for the year, and represented overall. But we maintained our share of cereal category sales performance consistent with our long-term growth model. in ACNielsen-measured channels, and our market share Th e company’s progress in 2011 extended a strong record grew on an all-channel basis. of business growth in recent years. Our Bakeries and Foodservice segment, which competes Net sales for the fi scal year ended May 29, 2011, grew primarily in U.S. channels for food eaten away from home, 2 percent to reach $14.9 billion. Segment operating profi t soundly outpaced industry trends. Net sales for this busi- rose 4 percent to exceed $2.9 billion. And diluted earnings ness segment grew 6 percent to $1.8 billion. Th is included per share (EPS) increased 20 percent to $2.70. Th e EPS 3 percent growth in sales to foodservice distributors and an comparison included changes in mark-to-market valuation 11 percent increase in sales to convenience store customers. of certain commodity positions in both years, as well as Segment operating profi t rose 16 percent to exceed the certain tax items that resulted in a net earnings benefi t in $300 million mark for the fi rst time in company history. 2011 and a charge in 2010. Adjusted diluted earnings per Our International segment results were strong across share, which excludes these items from both years, grew the board. Net sales rose 7 percent to nearly $2.9 billion. 8 percent to $2.48. Excluding the impact of foreign currency exchange rates, We were generally pleased with these results because constant-currency net sales grew in each of the four regions fi scal 2011 presented a truly challenging environment for where we compete, including gains of 7 percent in Europe food manufacturers. Widespread price promotion took and 9 percent in the Asia/Pacifi c region. International place across the food industry for much of last year. Costs segment operating profi t totaled $291 million, up sharply for food ingredients and energy, which had moderated in from the prior year that included negative eff ects from the prior year, began rising again and the cost infl ation Venezuelan currency devaluation and other foreign exchange accelerated as the year went on. In addition, consumers in items. Excluding foreign exchange eff ects, profi t still grew at developed markets remained cautious in a still uncertain a double-digit rate. economic environment. Results for our U.S. Retail segment Our Cereal Partners Worldwide (CPW) and Häagen- refl ected these challenges, with net sales of $10.2 billion Dazs Japan (HDJ) joint ventures contributed a combined essentially matching year-ago levels and operating profi t of $96 million in aft er-tax earnings in 2011. Combined $2.3 billion declining 2 percent from record performance CPW and HDJ net sales, which are not consolidated in in 2010.