Corporate unallocated expense totaled a net $43 million for the quarter compared to $37 million net expense a year ago. Fiscal 2007 results include the incremental effects of adopting SFAS 123R for stock-based compensation, which represented $40 million pretax expense in the quarter. Prior year first-quarter corporate expense included a $10 million charge to write down the asset value of a low-income housing investment.

Restructuring and other exit items contributed income of $2 million in the quarter, including a $9 million gain on the sale of a former manufacturing facility in Spain and a $6 million charge associated with divestiture of a par-baked bread business that was part of our Bakeries and Foodservice segment.

Interest expense for the quarter totaled $105 million, up 17 percent due to higher rates. The effective tax rate for the quarter was 35.8 percent.

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Net interest expense for the quarter totaled $101 million, down 6 percent due primarily to lower debt levels. Last year’s interest expense included $12 million of interest income resulting from the resolution of certain tax issues. The effective tax rate for the third quarter of 2006 was 34.7 percent, reflecting the year-to-date impact of a change in the annual effective tax rate from 35.5 percent to 35.3 percent. Last year’s third-quarter taxes included $45 million in expense representing a portion of the taxes for disposition of General Mills’ interest in the SVE joint venture. As reported, last year’s third-quarter tax rate was 46.5 percent.

        Corporate unallocated items totaled $19 million expense in the third quarter of 2006 compared to $19 million income in 2005, primarily reflecting higher employee benefit costs. Restructuring and other exit costs totaled $5 million pre-tax in the third quarter of 2006 compared to $3 million in last year’s third quarter. Last year’s third quarter also included $3 million of related expenses recorded in cost of sales.

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).

        Restructuring and other exit costs totaled $2 million pre-tax 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.

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General Mills’ total debt as of May 29, 2005, was $6,192 million, down $2,034 million from the end of fiscal 2004. Net interest expense in 2005 totaled $455 million, down 10 percent from the prior year due to the lower debt level, favorable rates, and $12 million of interest income recorded in the third quarter from the resolution of certain tax issues. The effective tax rate was 34.1 percent in the fourth quarter and 36.6 percent for the fiscal year, including the impact of taxes on the gain from business dispositions. Average diluted shares outstanding for the year decreased 1 percent to 409 million. For the fourth quarter, average diluted shares outstanding were 407 million, 2 percent below the year-ago period.

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Unallocated corporate items totaled $19 million income for the quarter compared to last year’s income of $27 million.

For the first thirty-nine weeks of fiscal 2005, unallocated corporate items totaled $21 million expense, compared to last year’s expense of $9 million. Last year’s expense included $34 million of merger-related costs associated with the integration of Pillsbury. The remaining change is primarily the result of variances in actual selling and administrative expenses incurred versus amounts allocated to the operating segments.

Interest expense for the quarter totaled $107 million, below last year’s third quarter due to lower debt levels and $12 million of interest income resulting from the resolution of certain tax issues. The effective tax rate for the third quarter was 46.5 percent, including the impact of the SVE-related taxes. Diluted shares outstanding decreased by 2 percent to 405 million, reflecting the October 2004 repurchase of 16.6 million General Mills shares from Diageo.

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Unallocated Corporate Items totaled $20 million expense for the quarter compared to last year’s expense of $37 million. Last year’s expense included $19 million of merger-related costs associated with the integration of Pillsbury, largely accounting for the difference.

For the first half, Unallocated Corporate Items totaled $40 million, compared to last year’s expense of $36 million. Last year’s expense included $34 million of merger-related costs associated with the integration of Pillsbury. The remaining change is primarily the result of variances in actual selling and administrative expenses incurred versus amounts allocated to the operating segments.