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These excerpts taken from the GIS 10-K filed Jul 11, 2008. Defined Contribution
Plans The General Mills Savings Plan is a
defined contribution plan that covers salaried and nonunion
employees. It had net assets of $2,309.9 million as of
May 25, 2008 and $2,303.0 million as of May 27,
2007. This plan is a 401(k) savings plan that includes a number
of investment funds and an Employee Stock Ownership Plan (ESOP).
We sponsor another savings plan for certain hourly employees
with net assets of $16.0 million as of May 25, 2008.
Our total recognized expense related to defined contribution
plans was $61.9 million in fiscal 2008, $48.3 million
in fiscal 2007, and $45.5 million in fiscal 2006.
The ESOP originally purchased our common stock principally with
funds borrowed from third parties and guaranteed by us. The ESOP
shares are included in net shares outstanding for the purposes
of calculating EPS. The ESOP’s third-party debt was repaid
on June 30, 2007. The ESOP’s only assets are our
common stock and temporary cash balances. The ESOP’s share
of the total defined contribution expense was $52.3 million
in fiscal 2008, $40.1 million in fiscal 2007, and
$37.6 million in fiscal 2006. The ESOP’s expense was
calculated by the “shares allocated” method.
The ESOP used our common stock to convey benefits to employees
and, through increased stock ownership, to further align
employee interests with those of stockholders. We matched a
percentage of employee contributions to the General Mills
Savings Plan with a base match plus a variable year end match
that depended on annual results. Employees received our match in
the form of common stock.
Our cash contribution to the ESOP was calculated so as to pay
off enough debt to release sufficient shares to make our match.
The ESOP used our cash contributions to the plan, plus the
dividends received on the ESOP’s leveraged shares, to make
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principal and interest payments on the ESOP’s debt. As loan
payments were made, shares became unencumbered by debt and were
committed to be allocated. The ESOP allocated shares to
individual employee accounts on the basis of the match of
employee payroll savings (contributions), plus reinvested
dividends received on previously allocated shares. The ESOP
incurred net interest of less than $1.0 million in each of
fiscal 2007 and 2006. The ESOP used dividends of
$2.5 million in fiscal 2007 and $3.9 million in 2006,
along with our contributions of less than $1.0 million in
each of fiscal 2007 and 2006 to make interest and principal
payments.
The number of shares of our common stock allocated to
participants in the ESOP was 5.2 million as of May 25,
2008 and 5.4 million as of May 27, 2007.
Defined Contribution Plans The General Mills Savings Plan is a defined contribution plan that covers salaried and nonunion employees. It had net assets of $2,309.9 million as of May 25, 2008 and $2,303.0 million as of May 27, 2007. This plan is a 401(k) savings plan that includes a number of investment funds and an Employee Stock Ownership Plan (ESOP). We sponsor another savings plan for certain hourly employees with net assets of $16.0 million as of May 25, 2008. Our total recognized expense related to defined contribution plans was $61.9 million in fiscal 2008, $48.3 million in fiscal 2007, and $45.5 million in fiscal 2006. The ESOP originally purchased our common stock principally with funds borrowed from third parties and guaranteed by us. The ESOP shares are included in net shares outstanding for the purposes of calculating EPS. The ESOP’s third-party debt was repaid on June 30, 2007. The ESOP’s only assets are our common stock and temporary cash balances. The ESOP’s share of the total defined contribution expense was $52.3 million in fiscal 2008, $40.1 million in fiscal 2007, and $37.6 million in fiscal 2006. The ESOP’s expense was calculated by the “shares allocated” method. The ESOP used our common stock to convey benefits to employees and, through increased stock ownership, to further align employee interests with those of stockholders. We matched a percentage of employee contributions to the General Mills Savings Plan with a base match plus a variable year end match that depended on annual results. Employees received our match in the form of common stock. Our cash contribution to the ESOP was calculated so as to pay off enough debt to release sufficient shares to make our match. The ESOP used our cash contributions to the plan, plus the dividends received on the ESOP’s leveraged shares, to make
Table of Contentsprincipal and interest payments on the ESOP’s debt. As loan payments were made, shares became unencumbered by debt and were committed to be allocated. The ESOP allocated shares to individual employee accounts on the basis of the match of employee payroll savings (contributions), plus reinvested dividends received on previously allocated shares. The ESOP incurred net interest of less than $1.0 million in each of fiscal 2007 and 2006. The ESOP used dividends of $2.5 million in fiscal 2007 and $3.9 million in 2006, along with our contributions of less than $1.0 million in each of fiscal 2007 and 2006 to make interest and principal payments. The number of shares of our common stock allocated to participants in the ESOP was 5.2 million as of May 25, 2008 and 5.4 million as of May 27, 2007. | EXCERPTS ON THIS PAGE:
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