This summary is based on the third quarter fiscal 2008 earnings call conducted by General Mills Inc. (GIS: chart) on March 19, 2008.

Management:

- VP IR: Kris Wenker
- CFO: Don Mulligan
- CEO: Ken Powell

Key Investors Issues

- Earnings were up 60.8% to $430.1 million or $1.23 a share from $267.5 million or 74 cents a share in the prior year.
- Net sales grew 12% to $3.4 billion from $3.1 billion in the prior year.
- The firm announced an increase in the quarterly dividend rate to 40 cents per share, and repurchased 2.8 million shares at an average price of $55.00.

Year to Date Highlights:

- Net sales have grown 8% to $10.18 billion from $9.4 billion in the prior year.
- Earnings after tax grew 21% to $1.11 billion and earnings per share are up 25% to $3.19.
- Capital expenditures totaled $299 million compared to $249 million in the same period last year.

Third Quarter Highlights

Earnings rose 60.8% to $430.1 million or $1.23 a share from $267.5 million or 74 cents a share in fiscal 2007 driven by volume and net sales increases across businesses.

- The firm benefited from certain non cash items, i.e. it received a favorable ruling on a tax case for which a reserve had already been established, and reversing that contingency reduced book income tax expense by $30 million or 9 cents per share.
- In addition, valuing the current commodity positions at market prices resulted in a non cash gain of $151 million pretax or 27 cents per share, relating to hedges of open commodity positions as well as grain inventories.
- Net sales grew 12% to $3.4 billion from $3.1 billion in the prior year due to good pound volume growth, up 6% and favourable pricing, as each of the segments contributed to the increase.

Gross margin of 39.8% was almost 5 percentage points above the comparable period last year as mark to market valuation of commodity positions, productivity and pricing offset significantly higher input costs.

- Mark to market valuation of commodity positions helped drive an increase in the reported gross margin to 37.7%.
- The results include a 13% increase in consumer marketing expense, which is expected to sales growth.
- On March 10, 2008, the firm announced an increase in the quarterly dividend rate to 40 cents per share, for the seventh time in the last 16 quarters and raised planned dividends for 2008 to $1.57 per share.
- The firm also repurchased 2.8 million shares at an average price of $55.00.

Segment Highlights:

- U.S. Retail sales grew 9% to $2.30 billion, with gains recorded by every division.
- Pound volume rose 8% and operating profits grew 9% to $486 million.
- Snacks division net sales grew 16% reflecting continued strong consumer demand for Nature Valley grain snacks, Fiber One bars and fruit snacks.
- Baking Products division net sales also rose 16% fueled by double-digit volume growth.

Yoplait division net sales grew 14% led by Yoplait Light yogurt, Yo-Plus yogurt with probiotic cultures and fiber, and introductory shipments of new Fiber One yogurt.

- Meals division net sales rose 8%, reflecting growth by Progresso ready-to-serve soups and Green Giant frozen vegetables.
- Pillsbury USA division net sales also grew 8%, including gains by Pillsbury refrigerated dough products and Totino''s pizza rolls.
- Net sales for Big G cereals grew 3%, led by Cheerios varieties and the Fiber One cereal franchise while sales for the Small Planet Foods organic business rose 14%.

- International net sales rose 20% to $613 million as pound volume contributed 4 points of growth, pricing and mix added 5 points of growth, and foreign currency exchange accounted for 10 points of the increase.
- Sales in Latin America / South Africa and in the Asia / Pacific region rose at strong double-digit rates.
- Net sales in Europe rose 17% and in Canada, sales grew 13% primarily reflecting favorable currency exchange.

In Canada, brand building investments on Multi-Grain Cheerios and the launch of Sweet and Salty Nature Valley bars drove growth on these priority brands.

- In Europe, Green Giant, Betty Crocker mixes and Nature Valley bars are selling well, particularly in the UK.
- In the Asia Pacific region, a strong Haagen-Dazs moon cake season and Wanchai Ferry growth are driving double digit sales increases in China.
- In Latin America, sales increased 35% with good growth by Diablitos in Venezuela and Nature Valley bars which we launched in Latin America last March.

- Bakeries and Foodservice segment sales grew 13% to $492 million, due to price increases and favorable mix.
- Pound volume essentially matched prior-year levels.
- Operating profits grew 68% to $56 million, reflecting gains associated with grain merchandising activities.