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summary of conference call
Shuai Chen
Principles of Financial Management and Marketing
Ashley Wright
09/17/2013

Summary of Earnings Conference Call from General Mills, Q1 2014

The earing conference call is mainly about the fiscal 2014 1st quarter results of General Mills, which include the reports from Don Mulligan (Executive Vice President; Chief Financial Officer), Jim Murphy (Senior Vice President; President-Big G Cereals), Ken Powell (Chairman of the Board; Chief Executive Officer) for investors, copartners and other relevant persons and the Q&As between them.

Firstly, Don offers a first quarter fiscal 2014 financial summary, which contains the benefits and rate changes of net sales, segment operating profit, net earnings and diluted EPS. The U.S. retail net sales increase by a little bit while the international parts behave well. Performance of gross margin is not as much as it in Q1 F13 due to the inflation weighted towards 1st half and will be 3% for year in total. Spending of global media also grows compared with Q1 F13 since there are more advertisements for the new products. What’s more, benefits from segment operating profit and joint ventures increase to an acceptable level. Don also mentions that the low growth is mainly affected by three other factors, the unallocated corporate expense, the tax rate and the lower outstanding of average diluted shares, however, the core working capital acts well and increases by a rate of double-digit. A financial outlook shows that the growth targets of net sales and segment operating profit will be around a single-digit.

Then comes the U.S. cereal business update introduced by Jim Murphy. He talks about the benefits and the popularity of cereal, which shows that the cereal is becoming the most fashionable choice for American breakfast. Based on the situation, the General Mills cereal dollar shares increase a little bit than the year of 2008. But the decrease of cereal category affected by three factors, which include subpar

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