General Mills (NYSE: GIS) yesterday reported record results for its fiscal 2001 second quarter. Diluted earnings per share totaled 70 cents, up 13 percent from the 62 cents per share earned in the same period last year. Diluted EPS excluding goodwill amortization (often called cash EPS) also grew 13 percent, to 72 cents. Results for the current quarter included income of $4.8 million after tax, or approximately 2 cents per diluted share, representing General Mills' portion of a class-action settlement of alleged price-fixing charges brought against several vitamin manufacturers in 1999. Excluding this income, diluted EPS grew 10 percent in the quarter.

For the 13 weeks ended Nov. 26, 2000, earnings before interest and taxes increased 8 percent to $356.4 million. Interest expense for the quarter was higher, as anticipated, due to increased debt levels associated with prior year acquisitions and share repurchase activity. As a result, earnings after tax grew 5 percent to $202.7 million. Sales grew 4 percent, in line with domestic unit volume growth.

Chairman and Chief Executive Officer Steve Sanger said the results met expectations, and keep General Mills' current businesses on track to meet full-year financial objectives. ``We were up against some difficult comparisons in the second quarter,'' Sanger said. ``Last year, our U.S. shipments grew 5 percent excluding acquisitions, and 8 percent in total. Our good performance year-to-date puts us on pace to deliver double-digit growth in earnings per share for 2001, excluding the impact of our impending acquisition of Pillsbury.''

First-Half Results

Through six months, General Mills' diluted earnings per share totaled $1.25, up 12 percent from $1.12 in fiscal 2000. Diluted EPS before goodwill amortization (cash EPS) increased 11 percent to $1.28. First-half earnings before interest and taxes grew 8 percent to $652.5 million, and earnings after tax grew 3 percent to $361.6 million. Six-month sales rose 5 percent to $3.57 billion.

U.S. Operations

General Mills' domestic unit volume grew 4 percent in the second quarter and 5 percent through the first half. Excluding incremental volume from the Gardetto's baked snacks business (acquired August 1999) and Small Planet organic foods (acquired January 2000), first-half domestic volume was up 4 percent.

In the second quarter, retail noncereal businesses led volume growth with a combined increase of 8 percent. Convenience Foods (snacks and yogurt) posted a 12 percent unit volume gain. Yogurt shipments and retail volume both grew at a double-digit pace on continued strong performance by established Yoplait products and new Go-Gurt. Yoplait Expresse -- the new yogurt in a tube for adult consumers -- performed well in its initial markets, and expanded distribution is planned early in calendar 2001. Snacks volume growth included gains of 12 percent for fruit snacks, 16 percent for salty snacks (Chex Mix, Gardetto's snack mix and Bugles) and 23 percent for Nature Valley granola bars. Combined unit volume for baking products, dinner and side dish mixes grew 1 percent, as declines in family flour and Bisquick baking mix shipments were offset by gains of 3 percent for total dessert mix products and 3 percent for Helper dinner mixes. Through the first half of fiscal 2001, combined volume for the company's retail noncereal businesses was up 9 percent.

Big G cereal shipments declined 2 percent in the second quarter and 1 percent for the first half, reflecting a significantly lower level of new-product activity compared with the same period a year earlier. Second-quarter consumer volume for Big G also was down slightly, but the company's market share was essentially unchanged at 28 percent for the quarter. Big G's top established brands continued to perform well, recording combined volume and market share growth. This established brand strength and effective merchandising strategies benefited first-half profit results. New Big G Milk 'n Cereal Bars and Harmony cereal for women performed well in the 25 percent of the country where they were introduced in August 2000. Distribution of these products will be expanded to the remaining 75 percent of the U.S. beginning Jan. 2, 2001.

Foodservice unit volume grew 8 percent in the second quarter and 11 percent through the first half, led by higher convenience store volumes, and double-digit growth for snacks and yogurt in other foodservice channels.

International Operations

Combined unit volume for the company's international operations grew 11 percent in the second quarter. Snack Ventures Europe (SVE), the company's joint venture with PepsiCo, reported a 16 percent volume gain for the period, with good performance in western European markets and continuing recovery in Russia. Volume for Cereal Partners Worldwide (CPW), the company's joint venture with Nestle, grew 5 percent in the quarter. In the U.K., CPW volume declined slightly due to lower private label cereal shipments, but branded cereal volume grew. CPW's overall volume gain for the quarter reflected good category growth and market share increases in Latin America, Southeast Asia, and several European markets including Spain and Portugal. General Mills' joint venture earnings totaled $8.9 million through the first half, up 35 percent from the prior year.

For General Mills' wholly owned business in Canada, second-quarter volume grew modestly following 15 percent growth in the first quarter. Through six months, General Mills' combined international unit volume grew 11 percent, boosting the company's worldwide unit volume growth rate to 6 percent for the year-to-date.

Shares Outstanding

As a result of the company's share repurchase program, average basic shares outstanding for the second quarter totaled 282.9 million, 7 percent lower than the 303.5 million average a year earlier. Average diluted shares also were down 7 percent, to 290.2 million. In the first half of fiscal 2001, the company repurchased approximately 4 million shares of common stock at an average price of $35 per share.

Interest expense for the quarter totaled $52.4 million, up from the prior year's level due to higher debt levels associated with acquisitions and General Mills' repurchase of 23.2 million shares of common stock in fiscal 2000. The company's effective tax rate for the quarter was 35.3 percent, in line with last year's second quarter and the full-year fiscal 2000 rate.

Outlook

Looking ahead to the second half of fiscal 2001, Sanger said, ``Our current businesses remain on track to deliver double-digit earnings per share growth for the year. Our plans for integrating General Mills and Pillsbury are essentially complete, and we'll be ready to hit the ground running as soon as we receive the remaining regulatory approval. As we indicated last week, the Federal Trade Commission is well along in its review, and we expect the transaction to close early in calendar 2001. Our work in planning the integration of the two companies has further increased our confidence that the combination will create enhanced value for General Mills shareholders.''

General Mills will hold a conference call and Webcast to discuss second quarter results today at 3:00 p.m. EST. To access the Webcast, log on to General Mills' Internet home page at http://www.generalmills.com

This press release contains forward-looking statements based on management's current expectations and assumptions. Such statements are subject to certain risks and uncertainties that could cause actual results to differ. In particular, our predictions about the Pillsbury acquisition could be affected by the timing and process required to complete regulatory review; integration problems; failure to achieve synergies; unanticipated liabilities; inexperience in new business lines; and changes in the competitive environment. In addition, our future results also could be affected by a variety of factors such as: competitive dynamics in the U.S. ready-to-eat cereal market, including pricing and promotional spending levels by competitors; the impact of competitive products and pricing; product development; actions of competitors other than as described above; acquisitions or disposals of business assets; changes in capital structure; changes in laws and regulations, including changes in accounting standards; customer demand; effectiveness of advertising and marketing spending or programs; consumer perception of health-related issues; economic conditions, including currency rate fluctuations. The company undertakes no obligation to publicly revise any forward-looking statements to reflect future events or circumstances.

                             GENERAL MILLS, INC.
                     CONSOLIDATED STATEMENTS OF EARNINGS
               (Unaudited) (In Millions, Except per Share Data)

                                  13 Weeks Ended         26 Weeks Ended
                               Nov. 26,    Nov. 28,    Nov. 26,    Nov. 28,
                                 2000        1999        2000        1999

    Sales                      $1,895.2    $1,817.2    $3,570.1    $3,390.8

    Costs & Expenses:
      Cost of sales               753.1       728.2     1,406.4     1,349.6
      Selling, general and
       administrative             785.7       760.0     1,511.2     1,437.2
      Interest, net                52.4        34.1       107.2        66.8

        Total Costs and
         Expenses               1,591.2     1,522.3     3,024.8     2,853.6

    Earnings before Taxes and
     Earnings from Joint Ventures 304.0       294.9       545.3       537.2

    Income Taxes                  107.2       104.3       192.6       191.6

    Earnings from Joint Ventures    5.9         3.1         8.9         6.6

    Net Earnings                 $202.7      $193.7      $361.6      $352.2

    Earnings per Share - Basic     $.72        $.64       $1.28       $1.16

    Average Number of Shares      282.9       303.5       283.3       303.9

    Earnings per Share - Diluted   $.70        $.62       $1.25       $1.12

    Average Number of Shares -
     Assuming Dilution            290.2       313.1       290.3       313.7





                             GENERAL MILLS, INC.
                    CONSOLIDATED CONDENSED BALANCE SHEETS
                                (In Millions)

                                    (Unaudited)     (Unaudited)
                                      Nov. 26,        Nov. 28,       May 28,
                                        2000            1999          2000
    ASSETS
    Current Assets:
      Cash and cash equivalents         $66.9           $70.4         $25.6
      Receivables                       588.9           562.5         500.6
      Inventories                       562.2           497.3         510.5
      Prepaid expenses and other         83.8            80.4          87.7
      Deferred income taxes              65.9            94.8          65.9
        Total Current Assets          1,367.7         1,305.4       1,190.3

    Land, Buildings and Equipment     3,060.0         2,843.4       2,949.2
      Less accumulated depreciation  (1,608.8)       (1,469.5)     (1,544.3)
        Net Land, Building and
         Equipment                    1,451.2         1,373.9       1,404.9
    Intangibles                         870.3           830.3         870.3
    Other Assets                      1,210.2         1,084.7       1,108.2

    Total Assets                     $4,899.4        $4,594.3      $4,573.7

    LIABILITIES AND EQUITY
    Current Liabilities:
      Accounts payable                 $568.9          $672.4        $641.5
      Current portion of debt           347.8            98.7         413.5
      Notes payable                   1,117.1           893.7       1,085.8
      Accrued taxes                     160.6           167.2         104.9
      Other current liabilities         256.2           259.7         283.4
        Total Current Liabilities     2,450.6         2,091.7       2,529.1
    Long-term Debt                    2,026.4         1,664.7       1,760.3
    Deferred Income Taxes               307.2           296.2         297.2
    Deferred Income Taxes-Tax Leases     82.2           100.5          89.8
    Other Liabilities                   193.9           184.5         186.1
        Total Liabilities             5,060.3         4,337.6       4,862.5

    Stockholders' Equity:
      Common stock                      695.2           679.9         680.6
      Retained earnings               2,320.2         2,013.1       2,113.9
      Less common stock in treasury  (3,026.2)       (2,307.3)     (2,934.9)
      Unearned compensation             (60.7)          (66.5)        (62.7)
      Accumulated other comprehensive
       income                           (89.4)          (62.5)        (85.7)
        Total Stockholders' Equity     (160.9)          256.7        (288.8)

    Total Liabilities and Equity     $4,899.4        $4,594.3      $4,573.7