General Mills today reported record sales and earnings for its fiscal 2001 third quarter. Diluted earnings per share totaled 54 cents, up 8 percent from the 50 cents per share earned in the same period last year. Earnings before interest and taxes increased 5 percent to $295.8 million. Third quarter interest expense was higher, as anticipated, due to increased debt levels associated with prior-year acquisitions and share repurchases. As a result, earnings after tax grew 3 percent to $157.5 million. Sales for the 13 weeks ended Feb. 25, 2001, grew 5 percent to $1.70 billion.

Chairman and Chief Executive Officer Steve Sanger said the results met expectations for General Mills' current businesses. "Our worldwide unit volume grew 6 percent in the quarter, including strong contributions from new products introduced during this period. Earnings growth was slightly lower in the quarter, consistent with the mix of sales. However, our current businesses remain on track to deliver double-digit EPS growth for the full 2001 fiscal year."

Through nine months, sales grew 5 percent to $5.27 billion. Earnings before interest and taxes rose to $948.3 million, up 7 percent from the previous year. Earnings after tax were up 3 percent to $519.1 million. Diluted earnings per share increased 10 percent to $1.78 from $1.62 a year ago, and diluted earnings per share excluding goodwill amortization (often called cash EPS) also rose 10 percent to $1.84.

U.S. OperationsGeneral Mills today reported record sales and earnings for its fiscal 2001 third quarter. Diluted earnings per share totaled 54 cents, up 8 percent from the 50 cents per share earned in the same period last year. Earnings before interest and taxes increased 5 percent to $295.8 million. Third quarter interest expense was higher, as anticipated, due to increased debt levels associated with prior-year acquisitions and share repurchases. As a result, earnings after tax grew 3 percent to $157.5 million. Sales for the 13 weeks ended Feb. 25, 2001, grew 5 percent to $1.70 billion.

Chairman and Chief Executive Officer Steve Sanger said the results met expectations for General Mills' current businesses. "Our worldwide unit volume grew 6 percent in the quarter, including strong contributions from new products introduced during this period. Earnings growth was slightly lower in the quarter, consistent with the mix of sales. However, our current businesses remain on track to deliver double-digit EPS growth for the full 2001 fiscal year."

Through nine months, sales grew 5 percent to $5.27 billion. Earnings before interest and taxes rose to $948.3 million, up 7 percent from the previous year. Earnings after tax were up 3 percent to $519.1 million. Diluted earnings per share increased 10 percent to $1.78 from $1.62 a year ago, and diluted earnings per share excluding goodwill amortization (often called cash EPS) also rose 10 percent to $1.84.

U.S. Operations

General Mills' domestic unit volume grew 4 percent in the quarter, on top of last year's strong performance when unit volume grew 8 percent. Convenience Foods (snacks and yogurt) posted a 9 percent unit volume gain for the quarter. Yogurt volume increased at a double-digit pace, led by strong growth for established Yoplait varieties, continued good performance by Go-Gurt, and the national expansion of Yoplait Expresse--the new yogurt in a tube for adults. Snacks growth included double-digit volume gains for fruit snacks, Pop Secret microwave popcorn, Bugles and Nature Valley granola bars. Combined unit volume for Betty Crocker products was down 2 percent. Unit volume for Betty Crocker baking products was flat. Betty Crocker dinner and side dish volume was lower, reflecting difficult comparisons for Helper dinner mixes. However, retail takeaway for Helper dinner mixes increased 7 percent in the quarter and is up 5 percent year-to-date. Foodservice volume rose 9 percent in the quarter, led by good performance from snacks, refrigerated yogurt, cereal, and higher volume in convenience stores. Through nine months, combined volume for the company's domestic noncereal businesses was up 8 percent.

Big G cereal shipments increased 1 percent in the quarter, on top of the 3 percent gain posted a year earlier. Expansion of new Milk n' Cereal bars and Harmony cereal for women to the remaining 75 percent of the U.S. drove Big G's growth. Through nine months, cereal category volume in all Nielsen measured outlets is down about 1 percent, and Big G's dollar market share is down 1 point to 32 percent. The majority of that share decline is due to a lower new-product contribution versus the same period a year ago. Big G expects its consumer volume trends to improve in the fourth quarter, as marketing activity accelerates behind new products. That includes the April launch of Wheaties Energy Crunch to stores nationwide. This new cereal is specially formulated with complex carbohydrates, protein and B-vitamins to help provide lasting energy.

International Operations

Combined unit volume for the company's international operations grew 15 percent in the quarter. Cereal Partners Worldwide (CPW), the company's joint venture with Nestle, reported an 8 percent volume gain. That reflected 5 percent growth in the U.K., along with broad-based gains across Latin America, Western Europe and Southeast Asia. Volume for Snack Ventures Europe (SVE), the company's joint venture with PepsiCo, grew 26 percent in the quarter. General Mills' joint venture earnings were $2.0 million in the quarter, compared to a $5.5 million loss a year earlier. Through nine months, joint venture earnings total $10.9 million, and the company expects to report additional joint venture earnings progress in the fourth quarter.

General Mills' wholly-owned business in Canada recorded a third-quarter volume gain of 4 percent, driven by strong performance from fruit snacks, Nature Valley granola bars and Helper dinner mixes. In addition, cereal volume grew modestly and cereal dollar share for the quarter was a record 24 percent. Through nine months, General Mills' combined international unit volume grew 11 percent, boosting the company's worldwide unit volume growth rate to 6 percent.

Shares Outstanding and Financial Items

As a result of the company's share repurchase program, average basic shares outstanding for the quarter declined 5 percent to 284.3 million. Average diluted shares were down 4 percent, to 293.8 million. Through nine months, the company has repurchased approximately 4.8 million shares at an average price of $33 per share, including the effect of put and call options.

Interest expense for the quarter totaled $55.4 million, up from the prior year's level due to higher debt levels associated with fiscal 2000 acquisitions and share repurchases. The company's effective tax rate for the quarter was 35.3 percent, essentially even with last year's rate in the period.

Outlook

"General Mills current businesses continue to deliver solid topline and bottomline growth," Sanger said. "In addition, we expect our acquisition of Pillsbury to close late in our fourth quarter. Our integration plans are complete, so as soon as we receive regulatory clearance we'll be ready to go."

General Mills will hold a conference call and webcast to discuss third quarter results today at 10 AM EST. To access the webcast, log on to General Mills corporate home page at 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 of regulatory approvals. 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       39 Weeks Ended
                              -------------------  -------------------
                               Feb. 25,  Feb. 27,  Feb. 25,  Feb. 27,
                                 2001      2000     2001(a)    2000
                              --------- ---------  --------- ---------

Sales                         $1,701.6  $1,619.6   $5,271.7  $5,010.4

Costs & Expenses:
    Cost of sales                708.0     650.6    2,114.4   2,000.2
    Selling, general and
     administrative              697.8     687.4    2,209.0   2,124.6
    Interest, net                 55.4      36.5      162.6     103.3
                              --------- ---------  --------- ---------

      Total Costs and Expenses 1,461.2   1,374.5    4,486.0   4,228.1
                              --------- ---------  --------- ---------

Earnings before Taxes and
 Earnings
   (Losses) from Joint
    Ventures                     240.4     245.1      785.7     782.3

Income Taxes                      84.9      86.3      277.5     277.9

Earnings (Losses) from Joint
 Ventures                          2.0      (5.5)      10.9       1.1
                              --------- ---------  --------- ---------

Net Earnings                  $  157.5  $  153.3   $  519.1  $  505.5
                              ========= =========  ========= =========

Earnings per Share - Basic    $    .55  $    .51   $   1.83  $   1.67
                              ========= =========  ========= =========

Average Number of Shares         284.3     299.9      283.6     302.5
                              ========= =========  ========= =========


Earnings per Share - Diluted  $    .54  $    .50   $   1.78  $   1.62
                              ========= =========  ========= =========

Average Number of Shares -
    Assuming Dilution            293.8     306.3      291.5     311.2
                              ========= =========  ========= =========


(a) Nine-month results include $4.8 million after-tax income
(approximately $.02 per share) for vitamin class-action settlement
proceeds recorded in the second quarter.



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

                                   (Unaudited) (Unaudited)
                                   -----------------------
                                    Feb. 25,     Feb. 27,     May 28,
                                      2001         2000         2000
                                   ---------    ---------    ---------
ASSETS
Current Assets:
 Cash and cash equivalents         $   77.3     $   47.5     $   25.6
 Receivables                          573.8        481.7        500.6
 Inventories                          539.9        529.6        510.5
 Prepaid expenses and other            85.2         82.7         87.7
 Deferred income taxes                 74.5         97.2         65.9
                                   ---------    ---------    ---------
   Total Current Assets             1,350.7      1,238.7      1,190.3
                                   ---------    ---------    ---------

Land, Buildings and Equipment       3,121.0      2,903.0      2,949.2
 Less accumulated depreciation     (1,647.1)    (1,505.6)    (1,544.3)
                                   ---------    ---------    ---------
   Net Land, Building and Equipment 1,473.9      1,397.4      1,404.9
Intangibles                           870.3        871.5        870.3
Other Assets                        1,300.6      1,089.1      1,108.2
                                   ---------    ---------    ---------

Total Assets                       $4,995.5     $4,596.7     $4,573.7
                                   =========    =========    =========

LIABILITIES AND EQUITY
Current Liabilities:
 Accounts payable                  $  496.8     $  614.0     $  641.5
 Current portion of debt               50.8        408.9        413.5
 Notes payable                        929.4        795.4      1,085.8
 Accrued taxes                        142.0        153.9        104.9
 Other current liabilities            301.2        365.1        283.4
                                   ---------    ---------    ---------
   Total Current Liabilities        1,920.2      2,337.3      2,529.1
Long-term Debt                      2,521.4      1,641.8      1,760.3
Deferred Income Taxes                 320.8        303.6        297.2
Deferred Income Taxes-Tax Leases       78.5         95.2         89.8
Other Liabilities                     189.2        184.1        186.1
                                   ---------    ---------    ---------
   Total Liabilities                5,030.1      4,562.0      4,862.5
                                   ---------    ---------    ---------

Stockholders' Equity:
 Common stock                         715.1        670.2        680.6
 Retained earnings                  2,399.7      2,002.8      2,113.9
 Less common stock in treasury     (3,015.3)    (2,504.8)    (2,934.9)
 Unearned compensation                (57.3)       (64.9)       (62.7)
 Accumulated other comprehensive
  income                              (76.8)       (68.6)       (85.7)
                                   ---------    ---------    ---------
   Total Stockholders' Equity         (34.6)        34.7       (288.8)
                                   ---------    ---------    ---------

Total Liabilities and Equity       $4,995.5     $4,596.7     $4,573.7
                                   =========    =========    =========