GIS » Topics » LIQUIDITY

This excerpt taken from the GIS 10-Q filed Mar 20, 2008.

LIQUIDITY

During the nine-month period ended February 24, 2008, our operations generated $913.9 million of cash compared to $1,151.0 million of cash in the same period last year. The $237.1 million decrease in cash from operations was driven primarily by increased working capital (inventory and other current liabilities). Included in the increase in working capital is the $151.2 million of mark-to-market gains on our commodity derivatives and revaluation of our grain inventory. In addition, cash taxes paid in fiscal 2008 increased $101.8 million primarily driven by the increase in earnings in the nine-month period of fiscal 2008 versus the same period in fiscal 2007, and cash tax payments to settle various prior year income tax matters arising from IRS and related audits.

During the nine-month period ended February 24, 2008, inventory was a $442.9 million use of cash, mainly due to inflation in commodity prices and higher levels of raw material inventories.

Cash used by investing activities decreased $120.9 million from the nine-month period ended February 25, 2007. Last year’s period included the acquisition of the Uncle Tobys business by our CPW joint venture. This was partially offset by increased purchases of land, buildings, and equipment of $50.5 million in the nine-month period ended February 24, 2008 versus the same period last year.

Financing activities used $446.9 million of cash in the nine-month period ended February 24, 2008. Net cash provided by notes payable was $1,171.4 million. We used a significant amount of cash flows from notes payable to finance share repurchases and our repurchases of the Series B-1 interests in GMC and the Series A preferred stock of General Mills Capital, Inc. (GM Capital). We used the $700.0 million proceeds from the issuance of long-term debt to reduce outstanding commercial paper balances. Also, during fiscal 2008, we received $750.0 million as part of the settlement of a forward contract with Lehman Brothers and used the cash to reduce outstanding commercial paper balances.

On August 7, 2007, we repurchased for a net amount of $843.0 million all of the outstanding Series B-1 Interests in GMC as part of a required remarketing of those interests. The purchase price reflected the Series B-1 Interests’ original capital account balance of $835.0 million and $8.0 million of capital account appreciation attributable and paid to the third party holder of the Series B-1 Interests. The capital appreciation paid to the third party holder of the Series B-1 Interests was recorded as a reduction to retained earnings, a component of stockholders’ equity, on the Consolidated Balance Sheets, and reduced net earnings available to common stockholders in our basic and diluted earnings per share (EPS) calculations.

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We and the third party holder of all of GMC’s outstanding Class A limited membership interests (Class A Interests) agreed to reset, effective on June 28, 2007, the preferred rate of return applicable to the Class A Interests to the sum of 3 month LIBOR plus 65 basis points. On June 28, 2007, we sold $92.3 million of additional Class A Interests to the same third party. There was no gain or loss associated with these transactions. As of February 24, 2008, the carrying value of all outstanding Class A Interests on our Consolidated Balance Sheets was $242.3 million, and the capital account balance of the Class A Interests, upon which preferred distributions are calculated, was $248.1 million.

On June 28, 2007, we repurchased for $150.0 million all of the outstanding Series A preferred stock of our subsidiary GM Capital using proceeds from the sale of the Class A Interests and commercial paper. There was no gain or loss associated with this repurchase.

During the nine-month period ended February 24, 2008, we repurchased 23.8 million shares of common stock for $1,380.6 million.

The Board of Directors approved the retirement of 125.0 million shares of common stock in treasury effective December 10, 2007. This action reduced common stock by $12.5 million, reduced additional paid-in capital by $5,068.3 million, and reduced common stock in treasury by $5,080.8 million on our Consolidated Balance Sheets. In addition, on March 10, 2008, our Board of Directors approved a quarterly dividend of $0.40 per share, payable on May 1, 2008, to shareholders of record on April 10, 2008. During the nine-month period ended February 24, 2008, we paid $395.0 million in dividends compared to $376.7 million in the same period last year.

This excerpt taken from the GIS 10-Q filed Dec 19, 2007.

LIQUIDITY

During the six-month period ended November 25, 2007, our operations generated $443.7million of cash compared to $565.2 million of cash in the same period last year. The $121.5 million decrease in cash from operations was primarily due to increased working capital (accounts receivable and inventory).

During the six-month period ended November 25, 2007, $374.6 million of cash was used to increase inventories, mainly due to inflation in commodity prices and higher levels of raw material inventories.

Cash used by investing activities decreased $138.1 million from the six-month period ended November 26, 2006. Last year’s period included the acquisition of the Uncle Tobys business by our CPW joint venture.

Financing activities used $190.9 million of cash in the six-month period ended November 25, 2007. Net cash provided by notes payable was $744.0 million. We used a significant amount of cash flows from notes payable to finance share repurchases and our repurchases of the Series B-1 interests in GMC and the Series A preferred stock of General Mills Capital, Inc. We used the $700.0 million proceeds from the issuance of long-term debt to reduce outstanding commercial paper balances. Also, during fiscal 2008, we received $750.0 million as part of the settlement of a forward contract with Lehman Brothers and used the cash to reduce outstanding commercial paper balances.

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On August 7, 2007, we repurchased for a net amount of $843.0 million all of the outstanding Series B-1 Interests in GMC as part of a required remarketing of those interests. The purchase price reflected the Series B-1 Interests’ original capital account balance of $835.0 million and $8.0 million of capital account appreciation attributable and paid to the third party holder of the Series B-1 Interests. The capital appreciation paid to the third party holder of the Series B-1 Interests was recorded as a reduction to retained earnings, a component of stockholders’ equity, on the Consolidated Balance Sheets, and reduced net earnings available to common stockholders in our basic and diluted earnings per share (EPS) calculations.

We and the third party holder of all of GMC’s outstanding Class A limited membership interests (Class A Interests) agreed to reset, effective on June 28, 2007, the preferred rate of return applicable to the Class A Interests to the sum of 3 month LIBOR plus 65 basis points. On June 28, 2007, we sold $92.3 million of additional Class A Interests to the same third party. There was no gain or loss associated with these transactions. As of November 25, 2007, the carrying value of all outstanding Class A Interests on our Consolidated Balance Sheets was $242.3 million, and the capital account balance of the Class A Interests, upon which preferred distributions are calculated, was $248.1 million.

On June 28, 2007, we repurchased for $150.0 million all of the outstanding Series A preferred stock of our subsidiary General Mills Capital, Inc. using proceeds from the sale of the Class A Interests and commercial paper. There was no gain or loss associated with this repurchase.

During the six-month period ended November 25, 2007, we repurchased 21.0 million shares of common stock for $1,226.5 million. As of November 25, 2007, we had unpaid obligations associated with our share repurchases totaling $0.4 million included in other current liabilities. We settled these obligations shortly after the end of our fiscal quarter.

On December 10, 2007, our Board of Directors approved a quarterly dividend of 39 cents per share, payable on February 1, 2008, to shareholders of record on January 10, 2008. During the six-month period ended November 25, 2007, we paid $259.4 million in dividends compared to $247.4 million in the same period last year. In addition, the Board of Directors approved the retirement of 125.0 million shares of common stock in treasury effective December 10, 2007. This action will reduce common stock by $12.5 million, reduce additional paid-in capital by $5,068.3 million, and reduce common stock in treasury by $5,080.8 million on our Consolidated Balance Sheets as of that date.

EXCERPTS ON THIS PAGE:

10-Q
Mar 20, 2008
10-Q
Dec 19, 2007
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