General Mills · 10-Q · Item 2 MD&A

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations.

INTRODUCTION

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in

conjunction with the MD&A included in our Annual Report on Form 10-K for the fiscal year ended May 25, 2025, for important

background regarding, among other things, our key business drivers. Significant trademarks and service marks used in our business

are set forth in italics herein. Certain terms used throughout this report are defined in the “Glossary” section below.

Our key priorities in fiscal 2026 are to return North America Retail to volume growth, accelerate North America Pet growth with an

expanded portfolio, and drive efficiencies to reinvest in growth. We expect category growth to be below our long-term projections,

reflecting less benefit from net price realization and mix T1amid a continued challenging consumer backdrop. To strengthen our

categories and market share performance, we plan to T2increase investment in consumer value, product news, innovation, and brand

building, guided by our remarkable experience framework. This included a significant strategic investment to launch Blue Buffalo into

the fast-growing United States fresh pet food sub-category in calendar 2025. We expect the combination of these growth investments,

input cost inflation, and normalization of corporate incentive will outpace expected Holistic Margin Management cost savings of 5

percent of cost of goods sold, savings from our global transformation initiative, and benefits from a 53rd week in fiscal 2026. In

addition, we expect T3the net impact of the divestitures of our North American yogurt businesses and the Whitebridge Pet Brands

acquisition will reduce adjusted operating profit growth by approximately 5 points in fiscal 2026.

CONSOLIDATED RESULTS OF OPERATIONS

Third Quarter Results

In the third quarter of fiscal 2026, net sales decreased 8 percent, including the net impact of the divestitures of our North American

yogurt businesses (Divestitures) and the acquisition of Whitebridge Pet Brands (Acquisition). Organic net sales decreased 3 percent

compared to the same period last year. Operating profit decreased 41 percent to $525 million, T4primarily driven by higher input costs, a

decrease in contributions from volume growth, a gain on divestiture related to the sale of our Canada yogurt business recorded in the

third quarter of fiscal 2025, and higher restructuring and transformation costs, partially offset by favorable net price realization and

mix and higher transaction costs recorded in fiscal 2025 related to the Divestitures and Acquisition. T5Operating profit margin of 11.8

percent decreased 660 basis points. Adjusted operating profit of $547 million decreased 32 percent on a constant-currency basis,

including the net impact of the Divestitures and Acquisition, primarily driven by higher input costs and a decrease in contributions

from volume growth, partially offset by favorable net price realization and mix. Adjusted operating profit margin decreased 420 basis

points to 12.3 percent. Diluted earnings per share of $0.56 decreased 50 percent in the third quarter of fiscal 2026. Adjusted diluted

earnings per share of $0.64 decreased 37 percent on a constant-currency basis compared to the third quarter of fiscal 2025. See the

“Non-GAAP Measures” section below for a description of our use of measures not defined by GAAP.

A summary of our consolidated financial results for the third quarter of fiscal 2026 follows:

In millions,

except per share

Quarter Ended

Percent

of Net

Sales

Constant-

Currency

Growth (a)

Net sales

(8)

%

Operating profit

%

Net earnings attributable to General Mills

%

Diluted earnings per share

%

Organic net sales growth rate (a)

(3)

%

Adjusted operating profit (a)

%

Adjusted diluted earnings per share (a)

%

(a)See the “Non-GAAP Measures” section below for our use of measures not defined by GAAP.

Consolidated net sales were as follows:

Quarter Ended

Net sales (in millions)

(8)

%

Contributions from volume growth (a)

pts

Net price realization and mix

1

pt

Foreign currency exchange

1

pt

Note: Table may not foot due to rounding.

(a)Measured in tons based on the stated weight of our product shipments.

Net sales in the third quarter of fiscal 2026 decreased 8 percent compared to the same period in fiscal 2025, T6driven by a decrease in

contributions from volume growth, partially offset by favorable net price realization and mix and favorable foreign currency exchange

impacts, and includes the net impact of the Divestitures and Acquisition.

Components of organic net sales growth are shown in the following table:

Contributions from organic volume growth (a)

(2)

pts

Organic net price realization and mix

(1)

pt

Organic net sales growth

(3)

pts

Foreign currency exchange

1

pt

Divestitures and acquisition

(6)

pts

Net sales growth

(8)

pts

Note: Table may not foot due to rounding.

(a)Measured in tons based on the stated weight of our product shipments.

Organic net sales decreased 3 percent in the third quarter of fiscal 2026, compared to the same period in fiscal 2025, driven by a

decrease in contributions from organic volume growth and unfavorable organic net price realization and mix.

Cost of sales decreased $133 million to $3,070 million in the third quarter of fiscal 2026, compared to the same period in fiscal 2025.

The decrease was primarily driven by a $349 million decrease attributable to lower volume, partially offset by a $202 million increase

attributable to product rate and mix, both of which include the net impact of the Divestitures and Acquisition. We recorded $8 million

of restructuring charges in cost of sales in the third quarter of fiscal 2026 (please refer to Note 3 to the Consolidated Financial

Statements in Part I, Item 1 of this report). In addition, we recorded a $17 million net decrease in cost of sales related to the mark-to-

market valuation of certain commodity positions and grain inventories in the third quarter of fiscal 2026, compared to a $23 million

net decrease in the third quarter of fiscal 2025.

Selling, general, and administrative (SG&A) expenses decreased $32 million to $813 million in the third quarter of fiscal 2026,

compared to the same period in fiscal 2025, primarily driven by lower other administrative costs, and including the net impact of the

Divestitures and Acquisition. SG&A expenses as a percent of net sales in the third quarter of fiscal 2026 increased 90 basis points

compared to the third quarter of fiscal 2025.

Divestitures loss (gain), net decreased $101 million, primarily due to a $96 million gain in the third quarter of fiscal 2025, related to

the sale of our Canada yogurt business (please refer to Note 2 to the Consolidated Financial Statements in Part I, Item I of this report).

Restructuring, transformation, impairment, and other exit costs (recoveries) totaled $24 million in the third quarter of fiscal

2026, compared to $1 million of net recoveries in the same period last year. In fiscal 2026, we approved a multi-year organizational

initiative to increase the competitiveness of our supply chain, and as a result, we recorded $17 million of charges in the third quarter of

fiscal 2026. In addition, we recorded $8 million of restructuring and transformation charges in the third quarter of fiscal 2026 related

to actions previously announced (please refer to Note 3 to the Consolidated Financial Statements in Part I, Item 1 of this report).

Benefit plan non-service income totaled $15 million in the third quarter of fiscal 2026, compared to $14 million in the same period

last year, primarily driven by lower interest costs partially offset by lower expected return on plan assets.

Interest, net for the third quarter of fiscal 2026 totaled $128 million, down $8 million from the third quarter of fiscal 2025, primarily

driven by lower average long-term debt levels.

The effective tax rate for the third quarter of fiscal 2026 was 24.3 percent compared to 19.8 percent for the third quarter of fiscal

2025. The 4.5 percentage point increase was primarily due to certain nonrecurring discrete tax benefits in fiscal 2025 and unfavorable

earnings mix by jurisdiction in fiscal 2026. Our effective tax rate excluding certain items affecting comparability was 24.0 percent in

the third quarter of fiscal 2026, compared to 21.0 percent in the same period last year (see the “Non-GAAP Measures” section below

for a description of our use of measures not defined by GAAP). The 3.0 percentage point increase was primarily due to certain

nonrecurring discrete tax benefits in fiscal 2025 and unfavorable earnings mix by jurisdiction in fiscal 2026.

The impacts of the One Big Beautiful Bill Act (OBBBA) are reflected in our results for the quarter ended February 22, 2026, and there

was no material impact to our income tax expense. We expect certain provisions of the OBBBA will change the timing of cash tax

payments in the current fiscal year and future periods. Please refer to Note 15 to the Consolidated Financial Statements in Part I, Item

1 of this report for additional information.

After-tax (loss) earnings from joint ventures for the third quarter of fiscal 2026 was a $6 million after-tax loss compared to after-tax

earnings of $14 million in the same period in fiscal 2025, primarily driven by our share of transaction costs related to certain assets

held for sale at Cereal Partners Worldwide (CPW). On a constant-currency basis, after-tax loss from joint ventures decreased 129

percent (see the “Non-GAAP Measures” section below for a description of our use of measures not defined by GAAP).

The components of our joint ventures’ net sales growth are shown in the following table:

CPW

HDJ (a)

Total

Contributions from volume growth (b)

(6)

pts

5

pts

Net price realization and mix

2

pts

(1)

pt

Net sales growth in constant currency

(4)

pts

3

pts

(3)

pts

Foreign currency exchange

8

pts

(1)

pt

7

pts

Net sales growth

4

pts

2

pts

4

pts

(a)Häagen-Dazs Japan, Inc. (HDJ).

(b)Measured in tons based on the stated weight of our product shipments.

Average diluted shares outstanding decreased by 18 million in the third quarter of fiscal 2026 from the same period a year ago

T7primarily due to share repurchases.

Nine-Month Results

In the nine-month period ended February 22, 2026, net sales decreased 7 percent, including the net impact of the Divestitures and

Acquisition. Organic net sales decreased 3 percent compared to the same period last year. Operating profit increased 6 percent to

$2,978 million, primarily driven by a divestiture gain related to the sale of our United States yogurt business, favorable net price

realization and mix, and lower SG&A expenses, partially offset by a decrease in contributions from volume growth, higher input costs,

and higher restructuring, transformation, and impairment charges. Operating profit margin of 21.6 percent increased 280 basis points

compared to the same period last year. Adjusted operating profit of $2,106 million decreased 23 percent on a constant-currency basis,

including the net impact of the Divestitures and Acquisition, primarily driven by a decrease in contributions from volume growth and

higher input costs, partially offset by favorable net price realization and mix and lower SG&A expenses. Adjusted operating profit

margin decreased 310 basis points to 15.2 percent. Diluted earnings per share of $3.56 in the nine-month period ended February 22,

2026, essentially matched the same period last year and adjusted diluted earnings per share of $2.60 decreased 25 percent on a

constant-currency basis compared to the same period last year (see the “Non-GAAP Measures” section below for a description of our

use of measures not defined by GAAP).

A summary of our consolidated financial results for the nine-month period ended February 22, 2026, follows:

In millions,

except per share

Nine-Month Period

Ended Feb. 22,

Percent of Net

Sales

Constant-

Currency

Growth (a)

Net sales

(7)

%

Operating profit

6

%

Net earnings attributable to General Mills

(4)

%

Diluted earnings per share

Flat

Organic net sales growth rate (a)

(3)

%

Adjusted operating profit (a)

%

Adjusted diluted earnings per share (a)

%

(a)See the “Non-GAAP Measures” section below for our use of measures not defined by GAAP.

Consolidated net sales were as follows:

Nine-Month Period Ended

Net sales (in millions)

(7)

%

Contributions from volume growth (a)

(9)

pts

Net price realization and mix

1

pt

Foreign currency exchange

1

pt

Note: Table may not foot due to rounding.

(a)Measured in tons based on the stated weight of our product shipments.

The 7 percent decrease in net sales for the nine-month period ended February 22, 2026, was driven by a decrease in contributions from

volume growth, partially offset by favorable net price realization and mix and favorable foreign currency exchange impacts, and

includes the net impact of the Divestitures and Acquisition.

Components of organic net sales growth are shown in the following table:

Nine-Month Period Ended Feb. 22, 2026 vs.

Contributions from organic volume growth (a)

(1)

pt

Organic net price realization and mix

(2)

pts

Organic net sales growth

(3)

pts

Foreign currency exchange

1

pt

Acquisition and divestitures

(5)

pts

Net sales growth

(7)

pts

Note: Table may not foot due to rounding.

(a)Measured in tons based on the stated weight of our product shipments.

Organic net sales decreased 3 percent in the nine-month period ended February 22, 2026, driven by unfavorable organic net price

realization and mix and a decrease in contributions from organic volume growth.

Cost of sales decreased $449 million to $9,223 million in the nine-month period ended February 22, 2026, compared to the same

period in fiscal 2025. The decrease was primarily driven by an $889 million decrease attributable to lower volume, partially offset by a

$417 million increase attributable to product rate and mix, both of which include the net impact of the Divestitures and Acquisition.

We recorded $13 million of restructuring charges in the nine-month period ended February 22, 2026, compared to $1 million of

restructuring charges in cost of sales in the same period last year (please refer to Note 3 to the Consolidated Financial Statements in

Part I, Item 1 of this report). In addition, we recorded a $13 million net decrease in cost of sales related to the mark-to-market

valuation of certain commodity positions and grain inventories in the nine-month period ended February 22, 2026, compared to a $24

million net decrease in the nine-month period ended February 23, 2025.

SG&A expenses decreased $51 million to $2,500 million in the nine-month period ended February 22, 2026, compared to the same

period in fiscal 2025, primarily driven by lower other administrative costs, and including the net impact of the Divestitures and

Acquisition. SG&A expenses as a percent of net sales increased 100 basis points in the nine-month period ended February 22, 2026,

compared to the same period of fiscal 2025.

Divestitures loss (gain), net totaled a $1,049 million gain in the nine-month period ended February 22, 2026, primarily related to the

sale of our United States yogurt business. During the nine-month period ended February 23, 2025, we recorded a $96 million

divestiture gain related to the sale of our Canada yogurt business (please refer to Note 2 to the Consolidated Financial Statements in

Part I, Item 1 of this report).

Restructuring, transformation, impairment, and other exit costs (recoveries) totaled $163 million in the nine-month period ended

February 22, 2026, compared to $3 million in the same period last year. In fiscal 2026, we approved a multi-year organizational

initiative to increase the competitiveness of our supply chain, and as a result, we recorded $64 million of charges in fiscal 2026. We

also recorded a $53 million non-cash impairment charge related to our Uncle Toby’s brand intangible asset in fiscal 2026. In addition,

we recorded $46 million of restructuring and transformation charges in the nine-month period ended February 22, 2026, related to

actions previously announced (please refer to Note 3 to the Consolidated Financial Statements in Part I, Item 1 of this report).

Benefit plan non-service income totaled $46 million in the nine-month period ended February 22, 2026, compared to $42 million in

the same period last year, primarily driven by lower interest costs partially offset by lower expected return on plan assets.

Interest, net for the nine-month period ended February 22, 2026, increased $3 million to $387 million compared to the same period of

fiscal 2025, primarily driven by higher average long-term debt levels.

The effective tax rate for the nine-month period ended February 22, 2026, was 24.8 percent compared to 20.5 percent in the same

period last year. The 4.3 percentage point increase was primarily due to certain unfavorable tax components related to the sale of our

United States yogurt business, certain nonrecurring discrete tax benefits in fiscal 2025, and unfavorable earnings mix by jurisdiction in

fiscal 2026. Our effective tax rate excluding certain items affecting comparability was 23.8 percent in the nine-month period ended

February 22, 2026, compared to 20.9 percent in the same period last year (see the “Non-GAAP Measures” section below for a

description of our use of measures not defined by GAAP). The 2.9 percentage point increase is primarily due to certain nonrecurring

discrete tax benefits in fiscal 2025 and unfavorable earnings mix by jurisdiction in fiscal 2026.

The impacts of the OBBBA are reflected in our results for the nine-month period ended February 22, 2026, and there was no material

impact to our income tax expense. We expect certain provisions of the OBBBA will change the timing of cash tax payments in the

current fiscal year and future periods. Please refer to Note 15 to the Consolidated Financial Statements in Part I, Item 1 of this report

for additional information.

After-tax (loss) earnings from joint ventures for the nine-month period ended February 22, 2026, was a $59 million after-tax loss

compared to after-tax earnings of $64 million in the same period in fiscal 2025, primarily driven by our $85 million pre-tax share of a

non-cash goodwill impairment charge at CPW in fiscal 2026, as a result of downward revisions of future sales and profitability

estimates in the Australian market. On a constant-currency basis, after-tax loss from joint ventures decreased 191 percent (see the

“Non-GAAP Measures” section below for a description of our use of measures not defined by GAAP).

The components of our joint ventures’ net sales growth are shown in the following table:

Nine-Month Period Ended Feb. 22, 2026 vs.

CPW

HDJ

Total

Contributions from volume growth (a)

(5)

pts

1

pt

Net price realization and mix

2

pts

2

pts

Net sales growth in constant currency

(3)

pts

3

pts

(2)

pts

Foreign currency exchange

5

pts

1

pt

4

pts

Net sales growth

2

pts

4

pts

2

pts

Note: Table may not foot due to rounding.

(a)Measured in tons based on the stated weight of our product shipments.

Average diluted shares outstanding decreased by 21 million in the nine-month period ended February 22, 2026, from the same

period a year ago primarily due to share repurchases.

SEGMENT OPERATING RESULTS

Our businesses are organized into four operating segments: North America Retail, International, North America Pet, and North

America Foodservice. Please refer to Note 16 to the Consolidated Financial Statements in Part I, Item 1 of this report for a description

of our operating segments.

North America Retail Segment Results

North America Retail net sales were as follows:

Quarter Ended

Nine-Month Period Ended

Net sales (in millions)

%

%

Contributions from volume growth (a)

pts

pts

Net price realization and mix

5

pts

3

pts

Foreign currency exchange

Flat

Flat

Note: Table may not foot due to rounding.

(a)Measured in tons based on the stated weight of our product shipments.

North America Retail net sales decreased 14 percent in the third quarter of fiscal 2026, compared to the same period in fiscal 2025,

driven by a decrease in contributions from volume growth, partially offset by favorable net price realization and mix, both of which

include the impact from the Divestitures.

North America Retail net sales decreased 13 percent in the nine-month period ended February 22, 2026, compared to the same period

in fiscal 2025, driven by a decrease in contributions from volume growth, partially offset by favorable net price realization and mix,

both of which include the impact from the Divestitures.

The components of North America Retail organic net sales growth are shown in the following table:

Quarter Ended

Nine-Month Period

Ended

Contributions from organic volume growth (a)

(3)

pts

(1)

pt

Organic net price realization and mix

(2)

pts

(3)

pts

Organic net sales growth

(4)

pts

(4)

pts

Foreign currency exchange

Flat

Flat

Divestitures (b)

(9)

pts

(9)

pts

Net sales growth

pts

pts

Note: Table may not foot due to rounding.

(a)Measured in tons based on the stated weight of our product shipments.

(b)Divestiture of the United States yogurt business in the first quarter of fiscal 2026 and the Canada yogurt business in the third quarter of fiscal

2025. Please refer to Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this report.

North America Retail organic net sales decreased 4 percent in the third quarter of fiscal 2026, compared to the same period in fiscal

2025, driven by a decrease in contributions from organic volume growth and unfavorable organic net price realization and mix.

North America Retail organic net sales decreased 4 percent in the nine-month period ended February 22, 2026, compared to the same

period in fiscal 2025, driven by unfavorable organic net price realization and mix and a decrease in contributions from organic volume

growth.

North America Retail net sales percentage change by operating unit are shown in the following table:

Quarter Ended

Nine-Month Period Ended

Big G Cereal & Canada (a)

U.S. Snacks

(7)%

(7)%

U.S. Meals & Baking Solutions

(3)%

(2)%

Total

(a)Upon completion of the United States yogurt business divestiture, the former U.S. Morning Foods and Canada operating units were combined

into a new Big G Cereal & Canada operating unit. Please refer to Note 16 to the Consolidated Financial Statements in Part I, Item 1 of this

report.

Segment operating profit decreased 33 percent to $436 million in the third quarter of fiscal 2026, including the impact of the

Divestitures, compared to $648 million in the same period in fiscal 2025, primarily driven by a decrease in contributions from volume

growth and higher input costs, partially offset by favorable net price realization and mix and lower SG&A expenses. Segment

operating profit decreased 33 percent on a constant-currency basis in the third quarter of fiscal 2026, compared to the same period in

fiscal 2025 (see the “Non-GAAP Measures” section below for our use of this measure not defined by GAAP).

Segment operating profit decreased 25 percent to $1,683 million in the nine-month period ended February 22, 2026, including the

impact of the Divestitures, compared to $2,256 million in the same period in fiscal 2025, primarily driven by a decrease in

contributions from volume growth and higher input costs, partially offset by favorable net price realization and mix and lower SG&A

expenses. Segment operating profit decreased 25 percent on a constant-currency basis in the nine-month period ended February 22,

2026, compared to the same period in fiscal 2025 (see the “Non-GAAP Measures” section below for our use of this measure not

defined by GAAP).

International Segment Results

International net sales were as follows:

Quarter Ended

Nine-Month Period Ended

Net sales (in millions)

7

%

6

%

Contributions from volume growth (a)

2

pts

1

pt

Net price realization and mix

(2)

pts

1

pt

Foreign currency exchange

6

pts

4

pts

Note: Table may not foot due to rounding.

(a)Measured in tons based on the stated weight of our product shipments.

International net sales increased 7 percent in the third quarter of fiscal 2026, compared to the same period in fiscal 2025, driven by

favorable foreign currency exchange impacts and an increase in contributions from volume growth, partially offset by unfavorable net

price realization and mix.

International net sales increased 6 percent in the nine-month period ended February 22, 2026, compared to the same period in fiscal

2025, driven by favorable foreign currency exchange impacts, an increase in contributions from volume growth, and favorable net

price realization and mix.

The components of International organic net sales growth are shown in the following table:

Quarter Ended

Nine-Month Period

Ended

Contributions from organic volume growth (a)

3

pts

2

pts

Organic net price realization and mix

(2)

pts

1

pt

Organic net sales growth

1

pt

3

pts

Foreign currency exchange

6

pts

4

pts

Net sales growth

7

pts

6

pts

Note: Table may not foot due to rounding.

(a)Measured in tons based on the stated weight of our product shipments.

International organic net sales increased 1 percent in the third quarter of fiscal 2026, compared to the same period in fiscal 2025,

driven by an increase in contributions from organic volume growth, partially offset by unfavorable organic net price realization and

mix.

International organic net sales increased 3 percent in the nine-month period ended February 22, 2026, compared to the same period in

fiscal 2025, driven by an increase in contributions from organic volume growth and favorable organic net price realization and mix.

Segment operating profit increased 87 percent to $34 million in the third quarter of fiscal 2026, compared to $18 million in the same

period in fiscal 2025, primarily driven by favorable net price realization and mix, lower SG&A expenses, and an increase in

contributions from volume growth, partially offset by higher input costs. Segment operating profit increased 82 percent on a constant-

currency basis in the third quarter of fiscal 2026, compared to the same period in fiscal 2025 (see the “Non-GAAP Measures” section

below for our use of this measure not defined by GAAP).

Segment operating profit increased 104 percent to $128 million in the nine-month period ended February 22, 2026, compared to $63

million in the same period in fiscal 2025, primarily driven by favorable net price realization and mix, partially offset by higher input

costs and higher SG&A expenses. Segment operating profit increased 100 percent on a constant-currency basis in the nine-month

period ended February 22, 2026, compared to the same period in fiscal 2025 (see the “Non-GAAP Measures” section below for our

use of this measure not defined by GAAP).

North America Pet Segment Results

North America Pet net sales were as follows:

Quarter Ended

Nine-Month Period Ended

Net sales (in millions)

3

%

6

%

Contributions from volume growth (a)

(3)

pts

Flat

Net price realization and mix

6

pts

6

pts

Foreign currency exchange

Flat

Flat

Note: Table may not foot due to rounding.

(a)Measured in tons based on the stated weight of our product shipments.

North America Pet net sales increased 3 percent in the third quarter of fiscal 2026, compared to the same period in fiscal 2025, driven

by favorable net price realization and mix, partially offset by a decrease in contributions from volume growth, both of which include

the impact of the Acquisition.

North America Pet net sales increased 6 percent in the nine-month period ended February 22, 2026, compared to the same period in

fiscal 2025, driven by favorable net price realization and mix, which includes the impact of the Acquisition.

The components of North America Pet organic net sales growth are shown in the following table:

Quarter Ended

Nine-Month Period

Ended

Contributions from organic volume growth (a)

(6)

pts

(4)

pts

Organic net price realization and mix

3

pts

2

pts

Organic net sales growth

(3)

pts

(2)

pts

Foreign currency exchange

Flat

Flat

Acquisition (b)

6

pts

9

pts

Net sales growth

3

pts

6

pts

Note: Table may not foot due to rounding.

(a)Measured in tons based on the stated weight of our product shipments.

(b)Acquisition of Whitebridge Pet Brands business in fiscal 2025. Please refer to Note 2 to the Consolidated Financial Statements in Part I, Item 1

of this report.

North America Pet organic net sales decreased 3 percent in the third quarter of fiscal 2026, compared to the same period in fiscal

2025, driven by a decrease in contributions from organic volume growth, partially offset by favorable organic net price realization and

mix.

North America Pet organic net sales decreased 2 percent in the nine-month period ended February 22, 2026, compared to the same

period in fiscal 2025, driven by a decrease in contributions from organic volume growth, partially offset by favorable organic net price

realization and mix.

Segment operating profit increased 1 percent to $103 million in the third quarter of fiscal 2026, including the impact of the

Acquisition, compared to $102 million in the same period in fiscal 2025. Segment operating profit was essentially flat on a constant-

currency basis in the third quarter of fiscal 2026, compared to the same period in fiscal 2025 (see the “Non-GAAP Measures” section

below for our use of this measure not defined by GAAP).

Segment operating profit decreased 6 percent to $339 million in the nine-month period ended February 22, 2026, including the impact

of the Acquisition, compared to $361 million in the same period in fiscal 2025, primarily driven by higher input costs and higher

SG&A expenses, partially offset by favorable net price realization and mix and an increase in contributions from volume growth.

Segment operating profit decreased 6 percent on a constant-currency basis in the nine-month period ended February 22, 2026,

compared to the same period in fiscal 2025 (see the “Non-GAAP Measures” section below for our use of this measure not defined by

GAAP).

North America Foodservice Segment Results

North America Foodservice net sales were as follows:

Quarter Ended

Nine-Month Period Ended

Net sales (in millions)

%

(7)

%

Contributions from volume growth (a)

(7)

pts

(5)

pts

Net price realization and mix

(3)

pts

(2)

pts

Foreign currency exchange

Flat

Flat

Note: Table may not foot due to rounding.

(a)Measured in tons based on the stated weight of our product shipments.

North America Foodservice net sales decreased 11 percent in the third quarter of fiscal 2026, compared to the same period in fiscal

2025, driven by a decrease in contributions from volume growth and unfavorable net price realization and mix, both of which include

the impact from the Divestitures.

North America Foodservice net sales decreased 7 percent in the nine-month period ended February 22, 2026, compared to the same

period in fiscal 2025, driven by a decrease in contributions from volume growth and unfavorable net price realization and mix, both of

which include the impact from the Divestitures.

The components of North America Foodservice organic net sales growth are shown in the following table:

Quarter Ended

Nine-Month Period

Ended

Contributions from organic volume growth (a)

(3)

pts

(1)

pt

Organic net price realization and mix

(1)

pt

Flat

Organic net sales growth

(3)

pts

(1)

pt

Foreign currency exchange

Flat

Flat

Divestitures (b)

(7)

pts

(6)

pts

Net sales growth

pts

(7)

pts

Note: Table may not foot due to rounding.

(a)Measured in tons based on the stated weight of our product shipments.

(b)Divestiture of the United States yogurt business in the first quarter of fiscal 2026 and the Canada yogurt business in the third quarter of fiscal

2025. Please refer to Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this report.

North America Foodservice organic net sales decreased 3 percent in the third quarter of fiscal 2026, compared to the same period in

fiscal 2025, driven by a decrease in contributions from organic volume growth and unfavorable organic net price realization and mix.

North America Foodservice organic net sales decreased 1 percent in the nine-month period ended February 22, 2026, compared to the

same period in fiscal 2025, driven by a decrease in contributions from organic volume growth.

Segment operating profit decreased 32 percent to $56 million in the third quarter of fiscal 2026, including the impact from the

Divestitures, compared to $82 million in the same period in fiscal 2025, primarily driven by unfavorable net price realization and mix,

a decrease in contributions from volume growth, and higher input costs. Segment operating profit decreased 32 percent on a constant-

currency basis in the third quarter of fiscal 2026, compared to the same period in fiscal 2025 (see the “Non-GAAP Measures” section

below for our use of this measure not defined by GAAP).

Segment operating profit decreased 15 percent to $232 million in the nine-month period ended February 22, 2026, including the

impact from the Divestitures, compared to $272 million in the same period in fiscal 2025, primarily driven by a decrease in

contributions from volume growth and higher input costs. Segment operating profit decreased 15 percent on a constant-currency basis

in the nine-month period ended February 22, 2026, compared to the same period in fiscal 2025 (see the “Non-GAAP Measures”

section below for our use of this measure not defined by GAAP).

UNALLOCATED CORPORATE ITEMS

Unallocated corporate expenses totaled $75 million in the third quarter of fiscal 2026, compared to $56 million in the same period in

fiscal 2025. We recorded $8 million of restructuring charges in cost of sales in the third quarter of fiscal 2026. In the third quarter of

fiscal 2026, we recorded a $17 million net decrease in expense related to the mark-to-market valuation of certain commodity positions

and grain inventories, compared to a $23 million net decrease in expense in the same period last year. Certain compensation and

benefit related expenses increased in the third quarter of fiscal 2026 compared to the same period of last year. We recorded $2 million

of transaction costs primarily related to the Divestitures in the third quarter of fiscal 2026, compared to $24 million of transaction costs

related to the Divestitures in the same period last year. In addition, we recorded $3 million of net gains related to valuation

adjustments on certain corporate investments in the third quarter of fiscal 2026, compared to $2 million of net losses in the third

quarter of fiscal 2025. We recorded $2 million of integration costs in the third quarter of fiscal 2026 compared to $3 million of

integration costs during the same period last year, related to the Acquisition and the fiscal 2024 acquisition of a pet food business in

Europe.

Unallocated corporate expenses totaled $289 million in the nine-month period ended February 22, 2026, compared to $244 million in

the same period in fiscal 2025. We recorded $13 million of restructuring charges in cost of sales in the nine-month period ended

February 22, 2026, compared to $1 million of restructuring charges in cost of sales in the same period in fiscal 2025. In the nine-

month period ended February 22, 2026, we recorded a $13 million net decrease in expense related to the mark-to-market valuation of

certain commodity positions and grain inventories, compared to a $24 million net decrease in expense in the same period last year.

Certain compensation and benefit related expenses increased in the nine-month period ended February 22, 2026, compared to the same

period of fiscal 2025. We recorded $17 million of transaction costs primarily related to the Divestitures in the nine-month period

ended February 22, 2026, compared to $33 million of transaction costs related to the Divestitures and the Acquisition in the same

period last year. In the nine-month period ended February 22, 2026, we recorded $10 million of net gains related to valuation

adjustments on certain corporate investments, compared to $5 million of net losses related to valuation adjustments of certain

corporate investments in the same period in fiscal 2025.

LIQUIDITY AND CAPITAL RESOURCES

During the nine-month period ended February 22, 2026, cash provided by operations was $1,614 million compared to $2,307 million

in the same period last year. The $692 million decrease was primarily driven by a $1,047 million decrease in net earnings excluding

the pretax gain on the Divestitures, which includes the related net impact of the Divestitures and Acquisition. This was partially offset

by a $153 million change in deferred income taxes, primarily driven by a change in the timing of cash tax payments due to certain

provisions of the OBBBA, a $123 million change in after-tax loss (earnings) from joint ventures, including a non-cash impairment

charge to goodwill at CPW in fiscal 2026, and a $113 million change in restructuring, transformation, impairment, and other exit costs

(recoveries), including the non-cash impairment charge to our Uncle Toby's brand intangible asset in fiscal 2026.

Cash provided by investing activities during the nine-month period ended February 22, 2026, was $1,433 million compared to cash

used by investing activities of $1,579 million for the same period in fiscal 2025. In the first quarter of fiscal 2026, we completed the

sale of our United States yogurt business for $1,798 million cash. We also received an additional $6 million of cash related to a sale

price adjustment related to the sale of our Canada yogurt business in the first quarter of fiscal 2026. In the third quarter of fiscal 2025,

we completed the sale of our Canada yogurt business for $242 million cash. During the third quarter of fiscal 2025, we acquired

Whitebridge Pet Brands for $1,410 million cash, net of cash acquired. In addition, we spent $356 million on purchases of land,

buildings, and equipment in the nine-month period ended February 22, 2026, compared to $405 million in the same period last year.

Cash used by financing activities during the nine-month period ended February 22, 2026, was $2,644 million compared to $610

million in the same period in fiscal 2025. We had $1,119 million of net debt payments in the nine-month period ended February 22,

2026, compared to $1,397 million of net debt issuances in the same period a year ago. In addition, we paid $500 million for purchases

of common stock for treasury in the nine-month period ended February 22, 2026, compared to $902 million in the same period in

fiscal 2025. We paid $987 million of dividends in the nine-month period ended February 22, 2026, compared to $1,008 million in the

same period last year.

As of February 22, 2026, we had $698 million of cash and cash equivalents in foreign jurisdictions. In anticipation of repatriating

funds from foreign jurisdictions, we record local country withholding taxes on our international earnings, as applicable. We may

repatriate our cash and cash equivalents held by our foreign subsidiaries without such funds being subject to further U.S. income tax

liability. Earnings prior to fiscal 2018 from our foreign subsidiaries remain permanently reinvested in those jurisdictions.

The following table details the credit facilities and lines of credit we had available as of February 22, 2026:

In Millions

Borrowing

Capacity

Borrowed

Amount

Committed credit facility expiring October 2029

$—

Uncommitted credit facilities and lines of credit

Total

To ensure availability of funds, we maintain bank credit lines and have commercial paper programs available to us in the United States

and Europe.

Certain of our long-term debt agreements and our credit facilities contain restrictive covenants. As of February 22, 2026, we were in

compliance with all of these covenants.

We have $2,138 million of long-term debt maturing in the next 12 months that is classified as current, including €250 million of

floating-rate notes due April 22, 2026, €500 million of floating-rate notes redeemable April 22, 2026, $500 million of 4.7 percent

fixed-rate notes due January 30, 2027, and $750 million of 3.2 percent fixed-rate notes due February 10, 2027. We believe that cash

flows from operations, together with available short- and long-term debt financing, will be adequate to meet our liquidity and capital

needs for at least the next 12 months.

CRITICAL ACCOUNTING ESTIMATES

Our significant accounting policies are described in Note 2 to the Consolidated Financial Statements included in our Annual Report on

Form 10-K for the fiscal year ended May 25, 2025. The accounting policies used in preparing our interim fiscal 2026 Consolidated

Financial Statements are the same as those described in our Form 10-K. Please refer to Note 1 to the Consolidated Financial

Statements in Part I, Item 1 of this report for additional information.

Our critical accounting estimates are those that have meaningful impact on the reporting of our financial condition and results of

operations. These estimates include our accounting for revenue recognition, valuation of long-lived assets, intangible assets, income

taxes, and defined benefit pension, other postretirement benefit, and postemployment benefit plans. The assumptions and

methodologies used in the determination of those estimates as of February 22, 2026, are the same as those described in our Annual

Report on Form 10-K for the fiscal year ended May 25, 2025.

Our annual goodwill and indefinite-lived intangible assets impairment test was performed on the first day of the second quarter of

fiscal 2026. As a result of lower future sales and profitability projections for the business supporting our Uncle Toby’s brand

intangible asset, we determined that the fair value of the brand intangible asset was less than its book value and recorded a $53 million

non-cash impairment charge. We recorded the impairment charge in restructuring, transformation, impairment, and other exit costs in

our Consolidated Statements of Earnings. Our estimate of the fair value was determined based on a discounted cash flow model using

inputs which included our long-range cash flow projections for the business, the royalty rate, the weighted-average cost of capital rate,

and the tax rate. The fair value is a Level 3 asset in the fair value hierarchy.

All other intangible asset fair values were substantially in excess of the carrying values. In addition, while having significant coverage

as of our fiscal 2026 assessment date, the Progresso, Nudges, True Chews, and Kitano brand intangible assets had risk of decreasing

coverage. We will continue to monitor these businesses for potential impairment.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In September 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2025-06,

amending the accounting for costs related to internal-use software. The ASU removes reference to software development project

stages. Additionally, the ASU requires capitalization of software costs to begin when management has authorized and committed to

funding the software and it is probable that the project will be completed and the software will be used to perform the function

intended. The requirements of the new standard are effective for annual periods beginning after December 15, 2027, and interim

periods within those annual periods, which for us is the first quarter of fiscal 2029. Early adoption is permitted and the amendments

may be applied on a prospective, retrospective, or modified basis. We are in the process of analyzing the impact on our results of

operations and financial position.

In November 2024, the FASB issued ASU 2024-03 requiring additional income statement disclosures. The ASU requires the

disaggregation of specific categories of expenses underlying the line items presented on the income statement. Additionally, the ASU

requires enhanced disclosure of selling expenses. The requirements of the ASU are effective for annual periods beginning after

December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. For us, annual reporting requirements

will be effective for fiscal 2028 and interim reporting requirements will be effective beginning with our first quarter of fiscal 2029.

Early adoption is permitted and the amendments should be applied on a prospective basis. Retrospective application is permitted. We

are in the process of analyzing the impact of the ASU on our related disclosures.

In December 2023, the FASB issued ASU 2023-09 requiring enhanced income tax disclosures. The ASU requires disclosure of

specific categories and disaggregation of information in the rate reconciliation table. The ASU also requires disclosure of

disaggregated information related to income taxes paid, income or loss from continuing operations before income tax expense or

benefit, and income tax expense or benefit from continuing operations. The requirements of the ASU are effective for annual periods

beginning after December 15, 2024, which for us is fiscal 2026. Early adoption is permitted and the amendments should be applied on

a prospective basis. Retrospective application is permitted. We are in the process of analyzing the impact of the ASU on our related

disclosures.

NON-GAAP MEASURES

We have included in this report measures of financial performance that are not defined by GAAP. We believe that these measures

provide useful information to investors, and include these measures in other communications to investors.

For each of these non-GAAP financial measures, we are providing below a reconciliation of the differences between the non-GAAP

measure and the most directly comparable GAAP measure, an explanation of why we believe the non-GAAP measure provides useful

information to investors, and any additional material purposes for which our management or Board of Directors uses the non-GAAP

measure. These non-GAAP measures should be viewed in addition to, and not in lieu of, the comparable GAAP measure.

Significant Items Impacting Comparability

Several measures below are presented on an adjusted basis. The adjustments are either items resulting from infrequently occurring

events or items that, in management’s judgment, significantly affect the year-to-year assessment of operating results.

The following are descriptions of significant items impacting comparability of our results.

Divestitures loss (gain), net

Net divestitures gain primarily related to the sale of our United States yogurt business in fiscal 2026 and Canada yogurt business in

fiscal 2025. Please refer to Note 2 to the Consolidated Financial Statements in Part I, Item 1 of this report.

CPW asset impairments and transaction costs

CPW non-cash goodwill impairment charge related to the Australian market, and other asset impairment charges and transaction costs

related to certain assets held for sale recorded in fiscal 2026.

Restructuring and transformation charges (recoveries)

Restructuring and transformation charges related to supply chain actions and previously announced actions recorded in fiscal 2026.

Restructuring charges (recoveries) related to previously announced restructuring actions recorded in fiscal 2025. Please refer to Note 3

to the Consolidated Financial Statements in Part I, Item 1 of this report.

Other intangible assets impairment

Non-cash impairment charge related to our Uncle Toby’s brand intangible asset in fiscal 2026. Please refer to Note 4 to the

Consolidated Financial Statements in Part I, Item 1 of this report.

Transaction costs

Fiscal 2026 transaction costs primarily related to the sale of our United States yogurt business. Fiscal 2025 transaction costs related to

the Whitebridge Pet Brands acquisition and the sale of our North American yogurt businesses. Please refer to Note 2 to the

Consolidated Financial Statements in Part I, Item 1 of this report.

Mark-to-market effects

Net mark-to-market valuation of certain commodity positions recognized in unallocated corporate items. Please refer to Note 6 to the

Consolidated Financial Statements in Part I, Item 1 of this report.

Investment activity, net

Valuation adjustments of certain corporate investments in fiscal 2026 and fiscal 2025.

Acquisition integration costs

Integration costs related to the Whitebridge Pet Brands acquisition in fiscal 2025 and the acquisition of a pet food business in Europe

in fiscal 2024 recorded in fiscal 2026 and fiscal 2025. Please refer to Note 2 to the Consolidated Financial Statements in Part I, Item 1

of this report.

Project-related costs

Restructuring initiative project-related costs related to previously announced restructuring actions recorded in fiscal 2025.

Organic Net Sales Growth Rates

We provide organic net sales growth rates for our consolidated net sales and segment net sales. This measure is used in reporting to

our Board of Directors and executive management and as a component of the measurement of our performance for incentive

compensation purposes. We believe that organic net sales growth rates provide useful information to investors because they provide

transparency to underlying performance in our net sales by excluding the effect that foreign currency exchange rate fluctuations,

acquisitions, divestitures, and a 53rd week, when applicable, have on year-to-year comparability. A reconciliation of these measures to

reported net sales growth rates, the relevant GAAP measures, are included in our Consolidated Results of Operations and Results of

Segment Operations discussions in the MD&A above.

Adjusted Operating Profit as a Percent of Net Sales (Adjusted Operating Profit Margin)

We believe this measure provides useful information to investors because it is important for assessing our operating profit margin on a

comparable basis.

Our adjusted operating profit margins are calculated as follows:

Quarter Ended

In Millions

Value

Percent of

Net Sales

Value

Percent of

Net Sales

Operating profit as reported

Divestiture loss (gain)

Restructuring and transformation charges (recoveries)

—%

Transaction costs

—%

Mark-to-market effects

Investment activity, net

—%

Acquisition integration costs

—%

Project-related costs

—

—%

—%

Adjusted operating profit

Nine-Month Period Ended

In Millions

Value

Percent of

Net Sales

Value

Percent of

Net Sales

Operating profit as reported

Divestitures gain, net

Restructuring and transformation charges

—%

Other intangible assets impairment

—

—%

Transaction costs

Mark-to-market effects

Investment activity, net

—%

Acquisition integration costs

—%

—%

Project-related costs

—

—%

—%

Adjusted operating profit

Note: Tables may not foot due to rounding.

For more information on the reconciling items, see the Significant Items Impacting Comparability section above.

Adjusted Operating Profit and Related Constant-currency Growth Rate

This measure is used in reporting to our Board of Directors and executive management and as a component of the measurement of our

performance for incentive compensation purposes. We believe that this measure provides useful information to investors because it is

the operating profit measure we use to evaluate operating profit performance on a comparable year-to-year basis. Additionally, the

measure is evaluated on a constant-currency basis by excluding the effect that foreign currency exchange rate fluctuations have on

year-to-year comparability given the volatility in foreign currency exchange markets.

Our adjusted operating profit growth on a constant-currency basis is calculated as follows:

Quarter Ended

Nine-Month Period Ended

In Millions

Change

Change

Operating profit as reported

6%

Divestitures loss (gain), net

Restructuring and transformation

charges (recoveries)

Other intangible assets impairment

—

—

—

Transaction costs

Mark-to-market effects

Investment activity, net

Acquisition integration costs

Project-related costs

—

—

Adjusted operating profit

Foreign currency exchange impact

Flat

Flat

Adjusted operating profit growth, on a

constant-currency basis

Note: Table may not foot due to rounding.

For more information on the reconciling items, see the Significant Items Impacting Comparability section above.

Adjusted Diluted EPS and Related Constant-currency Growth Rate

This measure is used in reporting to our Board of Directors and executive management. We believe that this measure provides useful

information to investors because it is the profitability measure we use to evaluate earnings performance on a comparable year-to-year

basis.

The reconciliation of our GAAP measure, diluted EPS, to adjusted diluted EPS and the related constant-currency growth rates follows:

Quarter Ended

Nine-Month Period Ended

Per Share Data

Change

Change

Diluted earnings per share, as reported

Flat

Divestitures gain, net

—

CPW asset impairments and

transaction costs

Restructuring and

transformation charges

—

Other intangible assets impairment

—

—

—

Transaction costs

—

Mark-to-market effects

Investment activity, net

—

Acquisition integration costs

—

—

—

Adjusted diluted earnings per share

Foreign currency exchange impact

1 pt

Flat

Adjusted diluted earnings per share

growth, on a constant-currency basis

Note: Table may not foot due to rounding.

For more information on the reconciling items, see the Significant Items Impacting Comparability section above.

See our reconciliation below of the effective income tax rate as reported to the adjusted effective income tax rate for the tax impact of each item

affecting comparability.

Constant-currency After-tax (Loss) Earnings from Joint Ventures Growth Rates

We believe that this measure provides useful information to investors because it provides transparency to underlying performance of

our joint ventures by excluding the effect that foreign currency exchange rate fluctuations have on year-to-year comparability given

volatility in foreign currency exchange markets.

After-tax (loss) earnings from joint ventures growth rates on a constant-currency basis are calculated as follows:

Percentage Change in

After-Tax (Loss) Earnings

from Joint Ventures as Reported

Impact of Foreign

Currency

Exchange

Percentage Change in After-Tax

(Loss) Earnings from Joint Ventures

on Constant-Currency Basis

pts

(1)

pt

Note: Table may not foot due to rounding.

Constant-currency Segment Operating Profit Growth Rates

We believe that this measure provides useful information to investors because it provides transparency to underlying performance of

our segments by excluding the effect that foreign currency exchange rate fluctuations have on year-to-year comparability given

volatility in foreign currency exchange markets.

Our segments’ operating profit growth rates on a constant-currency basis are calculated as follows:

Percentage Change in

Operating Profit

as Reported

Impact of Foreign

Currency

Exchange

Percentage Change in

Operating Profit on

Constant-Currency Basis

North America Retail

Flat

International

4 pts

North America Pet

1%

Flat

Flat

North America Foodservice

Flat

Percentage Change in

Operating Profit

as Reported

Impact of Foreign

Currency

Exchange

Percentage Change in

Operating Profit on

Constant-Currency Basis

North America Retail

Flat

International

4 pts

North America Pet

(6)%

Flat

(6)%

North America Foodservice

Flat

Note: Tables may not foot due to rounding.

Adjusted Effective Income Tax Rates

We believe this measure provides useful information to investors because it presents the adjusted effective income tax rate on a

comparable year-to-year basis.

Adjusted effective income tax rates are calculated as follows:

Quarter Ended

Nine-Month Period Ended

In Millions

(Except Per Share Data)

Pretax

Earnings

(a)

Income

Taxes

Pretax

Earnings

(a)

Income

Taxes

Pretax

Earnings

(a)

Income

Taxes

Pretax

Earnings

(a)

Income

Taxes

As reported

Divestitures loss (gain), net

Restructuring and transformation

charges (recoveries)

Other intangible assets impairment

—

—

—

—

—

—

Transaction costs

Mark-to-market effects

Investment activity, net

Acquisition integration costs

Project-related costs

—

—

—

—

—

As adjusted

Effective tax rate:

As reported

As adjusted

Sum of adjustments to income taxes

Average number of common

shares - diluted EPS

Impact of income tax adjustments

on adjusted diluted EPS

Note: Table may not foot due to rounding.

(a) Earnings before income taxes and after-tax (loss) earnings from joint ventures.

For more information on the reconciling items, please see the Significant Items Impacting Comparability section above.

Glossary

AOCI. Accumulated other comprehensive income (loss).

Adjusted diluted EPS. Diluted EPS adjusted for certain items affecting year-to-year comparability.

Adjusted operating profit. Operating profit adjusted for certain items affecting year-to-year comparability.

Adjusted operating profit margin. Operating profit adjusted for certain items affecting year-over-year comparability, divided by net

sales.

Constant currency. Financial results translated to United States dollars using constant foreign currency exchange rates based on the

rates in effect for the comparable prior-year period. To present this information, current period results for entities reporting in

currencies other than United States dollars are translated into United States dollars at the average exchange rates in effect during the

corresponding period of the prior fiscal year, rather than the actual average exchange rates in effect during the current fiscal year.

Therefore, the foreign currency impact is equal to current year results in local currencies multiplied by the change in the average

foreign currency exchange rate between the current fiscal period and the corresponding period of the prior fiscal year.

Derivatives. Financial instruments such as futures, swaps, options, and forward contracts that we use to manage our risk arising from

changes in commodity prices, interest rates, foreign exchange rates, and stock prices.

Fair value hierarchy. For purposes of fair value measurement, we categorize assets and liabilities into one of three levels based on

the assumptions (inputs) used in valuing the asset or liability. Level 1 provides the most reliable measure of fair value, while Level 3

generally requires significant management judgment. The three levels are defined as follows:

Level 1:Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2: Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in

active markets or quoted prices for identical assets or liabilities in inactive markets.

Level 3:Unobservable inputs reflecting management’s assumptions about the inputs used in pricing the asset or liability.

Free cash flow. Net cash provided by operating activities less purchases of land, buildings, and equipment.

Generally Accepted Accounting Principles (GAAP). Guidelines, procedures, and practices that we are required to use in recording

and reporting accounting information in our financial statements.

Goodwill. The difference between the purchase price of acquired companies plus the fair value of any noncontrolling interests and the

related fair values of net assets acquired.

Gross margin. Net sales less cost of sales.

Hedge accounting. Accounting for qualifying hedges that allows changes in a hedging instrument’s fair value to offset corresponding

changes in the hedged item in the same reporting period. Hedge accounting is permitted for certain hedging instruments and hedged

items only if the hedging relationship is highly effective, and only prospectively from the date a hedging relationship is formally

documented.

Holistic Margin Management (HMM). Company-wide initiative to use productivity savings, mix management, and price realization

to offset input cost inflation, protect margins, and generate funds to reinvest in sales-generating activities.

Mark-to-market. The act of determining a value for financial instruments, commodity contracts, and related assets or liabilities based

on the current market price for that item.

Net mark-to-market valuation of certain commodity positions. Realized and unrealized gains and losses on derivative contracts

that will be allocated to segment operating profit when the exposure we are hedging affects earnings.

Net price realization. The impact of list and promoted price changes, net of trade and other price promotion costs.

Noncontrolling interests. Interests of subsidiaries held by third parties.

Notional amount. The amount of a position or an agreed upon amount in a derivative contract on which the value of financial

instruments are calculated.

OCI. Other Comprehensive Income (Loss).

Organic net sales growth. Net sales growth adjusted for foreign currency translation, acquisitions, divestitures and a 53rd fiscal week,

when applicable.

Project-related costs. Costs incurred related to our restructuring initiatives not included in restructuring charges.

Reporting unit. An operating segment or a business one level below an operating segment.

SOFR. Secured Overnight Financing Rate.

Strategic Revenue Management (SRM). A company-wide capability focused on generating sustainable benefits from net price

realization and mix by identifying and executing against specific opportunities to apply tools including pricing, sizing, mix

management, and promotion optimization across each of our businesses.

Supply chain input costs. Costs incurred to produce and deliver product, including costs for ingredients and conversion, inventory

management, logistics, and warehousing.

Translation adjustments. The impact of the conversion of our foreign affiliates’ financial statements to United States dollars for the

purpose of consolidating our financial statements.

CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF “SAFE

HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This report contains or incorporates by reference forward-looking statements within the meaning of the Private Securities Litigation

Reform Act of 1995 that are based on our current expectations and assumptions. We also may make written or oral forward-looking

statements, including statements contained in our filings with the Securities and Exchange Commission and in our reports to

stockholders.

The words or phrases “will likely result,” “are expected to,” “may continue,” “is anticipated,” “estimate,” “plan,” “project,” or similar

expressions identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such

statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results and

those currently anticipated or projected. We caution you not to place undue reliance on any such forward-looking statements.

In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, we are identifying important

factors that could affect our financial performance and could cause our actual results in future periods to differ materially from any

current opinions or statements.

Our future results could be affected by a variety of factors, such as: imposed and threatened tariffs by the United States and its trading

partners; disruptions or inefficiencies in the supply chain; competitive dynamics in the consumer foods industry and the markets for

our products, including new product introductions, advertising activities, pricing actions, and promotional activities of our

competitors; economic conditions, including changes in inflation rates, interest rates, tax rates, tariffs, or the availability of capital;

product development and innovation; consumer acceptance of new products and product improvements; consumer reaction to pricing

actions and changes in promotion levels; acquisitions or dispositions of businesses or assets; changes in capital structure; changes in

the legal and regulatory environment, including tax legislation, labeling and advertising regulations, and litigation; impairments in the

carrying value of goodwill, other intangible assets, or other long-lived assets, or changes in the useful lives of other intangible assets;

changes in accounting standards and the impact of critical accounting estimates; product quality and safety issues, including recalls

and product liability; changes in consumer demand for our products; effectiveness of advertising, marketing, and promotional

programs; changes in consumer behavior, trends, and preferences, including weight loss trends; consumer perception of health-related

issues, including obesity; consolidation in the retail environment; changes in purchasing and inventory levels of significant customers;

fluctuations in the cost and availability of supply chain resources, including raw materials, packaging, energy, and transportation;

effectiveness of restructuring, transformation, and cost saving initiatives; volatility in the market value of derivatives used to manage

price risk for certain commodities; benefit plan expenses due to changes in plan asset values and discount rates used to determine plan

liabilities; failure or breach of our information technology systems; foreign economic conditions, including currency rate fluctuations

and tariffs; and political unrest in foreign markets and economic uncertainty due to terrorism or war.

You should also consider the risk factors that we identify in Item 1A of Part I of our Annual Report on Form 10-K for the fiscal year

ended May 25, 2025, which could also affect our future results.

We undertake no obligation to publicly revise any forward-looking statements to reflect events or circumstances after the date of those

statements or to reflect the occurrence of anticipated or unanticipated events.