SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED NOVEMBER 29, 1998
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____ TO _____
Commission file number: 1-1185
GENERAL MILLS, INC.
(Exact name of registrant as specified in its charter)
Delaware 41-0274440
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Number One General Mills Boulevard
Minneapolis, MN 55426
(Mail: P.O. Box 1113) (Mail: 55440)
(Address of principal executive offices) (Zip Code)
(612) 540-2311
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ___
As of December 18, 1998, General Mills had 153,352,325 shares of its $.10 par
value common stock outstanding (excluding 50,801,007 shares held in treasury).
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
<CAPTION>
GENERAL MILLS, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited) (In Millions, Except per Share Data)
Thirteen Weeks Ended Twenty-Six Weeks Ended
November 29, November 23, November 29, November 23,
1998 1997 1998 1997
----------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
Sales $ 1,677.4 $1,638.3 $ 3,150.5 $3,054.8
Costs and Expenses:
Cost of sales 699.0 690.4 1,282.7 1,272.1
Selling, general and administrative 667.8 657.2 1,301.9 1,245.9
Interest, net 29.4 27.3 59.2 58.5
Unusual items 51.6 166.8 51.6 166.4
--------- -------- --------- --------
Total Costs and Expenses 1,447.8 1,541.7 2,695.4 2,742.9
--------- -------- --------- --------
Earnings before Taxes and Earnings
(Losses) from Joint Ventures 229.6 96.6 455.1 311.9
Income Taxes 83.7 31.6 166.8 113.1
Earnings (Losses) from Joint Ventures (2.3) (.4) .3 .1
--------- -------- --------- --------
Net Earnings $ 143.6 $ 64.6 $ 288.6 $ 198.9
========= ======== ========= ========
Earnings per Share $ .94 $ .41 $ 1.88 $ 1.25
========= ====== ========= =========
Average Number of Common Shares 152.9 158.2 153.5 158.9
========= ========= ========= =========
Earnings per Share - Assuming Dilution $ .92 $ .40 $ 1.84 $ 1.22
========= ========= ========= =========
Average Number of Common Shares -
Assuming Dilution 156.7 162.3 157.1 163.0
========= ======== ========= ========
Dividends per Share $ .53 $ .53 $ 1.06 $ 1.06
========= ========= ========= =========
See accompanying notes to consolidated condensed financial statements.
</TABLE>
<TABLE>
<CAPTION>
GENERAL MILLS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In Millions)
(Unaudited) (Unaudited)
November 29, November 23, May 31,
1998 1997 1998
----------- ----------- -------
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 9.5 $ 29.9 $ 6.4
Receivables 468.4 442.8 395.1
Inventories:
Valued primarily at FIFO 206.5 219.7 168.3
Valued at LIFO (FIFO value exceeds LIFO by
$39.1, $48.2 and $39.1, respectively) 231.9 251.9 221.4
Prepaid expenses and other current assets 77.4 111.5 107.2
Deferred income taxes 119.9 103.8 136.9
--------- -------- ---------
Total Current Assets 1,113.6 1,159.6 1,035.3
--------- -------- ---------
Land, Buildings and Equipment, at Cost 2,592.0 2,416.8 2,489.0
Less accumulated depreciation (1,367.2) (1,243.9) (1,302.7)
--------- -------- ---------
Net Land, Buildings and Equipment 1,224.8 1,172.9 1,186.3
Intangibles 621.4 641.0 630.4
Other Assets 1,061.0 975.6 1,009.4
--------- -------- ---------
Total Assets $ 4,020.8 $3,949.1 $ 3,861.4
========= ======== =========
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable $ 638.8 $ 689.2 $ 593.1
Current portion of long-term debt 196.4 93.8 153.2
Notes payable 396.0 183.8 264.1
Accrued taxes 137.0 114.0 148.5
Other current liabilities 282.5 304.1 284.8
--------- -------- ---------
Total Current Liabilities 1,650.7 1,384.9 1,443.7
Long-term Debt 1,592.8 1,596.9 1,640.4
Deferred Income Taxes 282.3 271.3 284.8
Deferred Income Taxes - Tax Leases 120.2 136.4 129.1
Other Liabilities 177.5 170.4 173.2
--------- -------- ---------
Total Liabilities 3,823.5 3,559.9 3,671.2
--------- -------- --------
Stockholders' Equity:
Cumulative preference stock, none issued - - -
Common stock, 204.2 shares issued 626.8 596.8 619.6
Retained earnings 1,749.1 1,566.6 1,622.8
Less common stock in treasury, at cost,
shares of 51.2, 46.0 and 49.4, respectively (2,071.5) (1,660.8) (1,935.7)
Unearned compensation (73.0) (78.8) (75.4)
Accumulated other comprehensive income (34.1) (34.6) (41.1)
--------- -------- ---------
Total Stockholders' Equity 197.3 389.2 190.2
--------- -------- ---------
Total Liabilities and Equity $ 4,020.8 $3,949.1 $ 3,861.4
========= ======== =========
See accompanying notes to consolidated condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GENERAL MILLS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited) (In Millions)
Twenty-Six Weeks Ended
November 29, November 23,
1998 1997
----------- -----------
<S> <C> <C>
Cash Flows - Operating Activities:
Net earnings $288.6 $198.9
Adjustments to reconcile earnings to cash flow:
Depreciation and amortization 94.4 97.4
Deferred income taxes 12.1 (2.4)
Change in current assets and liabilities (112.8) (19.1)
Unusual items 51.6 166.4
Other, net (22.5) (11.5)
------ ------
Cash provided by continuing operations 311.4 429.7
Cash used by discontinued operations (2.1) (3.8)
------ ------
Net Cash Provided by Operating Activities 309.3 425.9
------ ------
Cash Flows - Investment Activities:
Purchases of land, buildings and equipment (123.8) (80.5)
Investments in businesses, intangibles and affiliates,
net of investment returns and dividends (8.8) 8.7
Purchases of marketable investments (4.8) (5.5)
Proceeds from sale of marketable investments 17.7 31.2
Other, net (11.6) (39.1)
------ ------
Net Cash Used by Investment Activities (131.3) (85.2)
------ ------
Cash Flows - Financing Activities:
Change in notes payable 129.2 (18.3)
Issuance of long-term debt 56.9 103.8
Payment of long-term debt (52.5) (77.8)
Common stock issued 32.0 53.4
Purchases of common stock for treasury (169.7) (215.2)
Dividends paid (163.1) (168.8)
Other, net (7.7) (.7)
------ ------
Net Cash Used by Financing Activities (174.9) (323.6)
------ ------
Increase in Cash and Cash Equivalents $ 3.1 $ 17.1
====== ======
See accompanying notes to consolidated condensed financial statements.
</TABLE>
<PAGE>
GENERAL MILLS, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(1) Background
These financial statements do not include certain information and footnotes
required by generally accepted accounting principles for complete financial
statements. However, in the opinion of management, all adjustments considered
necessary for a fair presentation have been included and are of a normal
recurring nature. Operating results for the twenty-six weeks ended November 29,
1998 are not necessarily indicative of the results that may be expected for the
fiscal year ending May 30, 1999.
These statements should be read in conjunction with the financial statements and
footnotes included in our annual report for the year ended May 31, 1998. The
accounting policies used in preparing these financial statements are the same as
those described in our annual report.
Certain amounts in the prior year financial statements have been reclassified to
conform to the current year presentation.
(2) Unusual Items
In the second quarter of fiscal 1999, we recorded restructuring charges of $51.6
million pretax, $32.3 million after tax ($.21 per diluted share) primarily
related to streamlining manufacturing and distribution activities that are
expected to deliver significant cost savings and contribute to future earnings
growth. The restructuring actions primarily reflect further streamlining of our
supply chain as part of the broad consolidation of these activities announced in
May 1998. Actions include consolidating manufacturing of certain products into
fewer locations, and consolidating warehouse, distribution and sales activities
across the company's packaged food, foodservice and milling operations. In
addition, the second-quarter charge includes our share of restructuring by Snack
Ventures Europe, our joint venture with PepsiCo, to improve its manufacturing
cost structure. Slightly more than half of the total charge reflects write-down
of assets; the remaining cash portion is primarily related to severance and
asset redeployment expenses. We expect that these restructuring activities will
be substantially completed by the end of fiscal 1999. Annual cost savings
beginning in fiscal 2000 are estimated at $16.8 million after tax ($.11 per
diluted share).
In the first quarter of fiscal 1998, we recorded several unusual items resulting
in a net after-tax charge of $.1 million. We received an insurance settlement
from one of our carriers related to costs incurred in fiscal 1995 and 1996
(charged against fiscal 1994) from the improper use of a pesticide by an
independent contractor in treating some of the company's oat supplies. Our Snack
Ventures Europe joint venture recorded restructuring charges for productivity
initiatives primarily related to production consolidation. We also recorded
charges associated with restructuring our sales regions and our trade and
promotion organization.
In the second quarter of fiscal 1998, we recorded restructuring charges of
$166.8 million pretax, $100.1 million after tax ($.62 per diluted share)
primarily related to improving the cost structure of our North American cereal
operations. We shut down one cereal system at our Lodi, California facility and
closed our two smallest plants, located in South Chicago, Illinois and
Etobicoke, Ontario. The charges included approximately $137 million in non-cash
charges primarily related to asset write-offs, and approximately $30 million of
cash charges, primarily related to costs to dispose of assets and pay severance.
We expect that these restructuring activities will be substantially completed by
the end of fiscal 1999.
(3) Statements of Cash Flows
During the first six months, we made interest payments of $67.1 million (net of
amount capitalized) and paid $167.9 million in income taxes.
(4) Comprehensive Income
We adopted Statement of Financial Accounting Standards (SFAS) No. 130,
"Reporting Comprehensive Income," effective June 1, 1998. SFAS No. 130
establishes standards for reporting and display of comprehensive income and its
components, including all changes in equity during a period except those
resulting from investments by owners or distributions to owners. The following
table summarizes total comprehensive income for the periods presented (in
millions):
Thirteen Weeks Ended Twenty-Six Weeks Ended
Nov. 29, Nov. 23, Nov. 29, Nov. 23,
1998 1997 1998 1997
Net Earnings $143.6 $ 64.6 $288.6 $198.9
Other comprehensive
income (loss):
Unrealized gain
on securities 1.3 3.6 4.0 5.9
Foreign currency
translation adjustments 4.4 4.0 3.0 (3.6)
------ ------ ------ ------
5.7 7.6 7.0 2.3
------ ------ ------ ------
Total comprehensive income $149.3 $ 72.2 $295.6 $201.2
====== ====== ====== ======
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
Continuing operations generated $118.3 million less cash in the first half of
fiscal 1999 than in the same prior-year period. The decrease in cash provided by
operations as compared to last year was caused by a $93.7 million increase in
the unfavorable working capital change and by a $24.6 million decrease in cash
from operations, after adjustment for non-cash items.
Fiscal 1999 capital expenditures are estimated to be approximately $215 million.
During the first six months, capital expenditures totaled $123.8 million.
Our short-term outside financing is obtained through private placement of
commercial paper and bank notes. Our level of notes payable fluctuates based on
cash flow needs.
Our long-term outside financing is obtained primarily through our medium-term
note program. Activity through six months under this program consisted of the
issuance of $52.5 million in notes and debt payments of $50.0 million.
In the first half of fiscal 1999, we acquired 2.5 million shares of common stock
for our treasury for $169.7 million.
RESULTS OF OPERATIONS
All per share references in the following discussion are based on diluted
shares, except where indicated.
Second quarter sales of $1,677.4 million grew 2 percent from the prior year.
First half sales of $3,150.5 million grew 3 percent. Second quarter earnings
from operations of $175.9 million ($1.12 per share) before restructuring charges
of $32.3 million ($.21 per share) (See Note (2) Unusual Items), increased by 7
percent from $164.7 million ($1.01 per share) before restructuring charges of
$100.1 million ($.62 per share) (See Note (2) Unusual Items), reported last
year. Including restructuring charges, second quarter earnings this year and
last year were $143.6 million ($.92 per share), and $64.6 million ($.40 per
share), respectively. Cumulative earnings from operations of $320.9 million
($2.04 per share) before unusual items of $32.3 million ($.21 per share), were
up 7 percent from last year's $299.1 million ($1.83 per share) before unusual
items of $100.2 million, ($.62 per share). Including unusual items, first half
earnings this year and last year were $288.6 million ($1.84 per share), and
$198.9 million ($1.22 per share), respectively. Earnings per share of $1.12 and
$2.04 for the second quarter and first half were both up 11 percent from $1.01
and $1.83 before unusual items. Basic earnings per share of $1.15 and $2.09 for
the second quarter and first half were also both up 11 percent from $1.04 and
$1.88 before unusual items.
The second-quarter earnings gain reflected good unit volume growth for our major
businesses, including a 5 percent increase in Big G cereal volume, as well as
strong productivity gains. Results for the quarter met our expectations. Through
the first half of fiscal 1999, our earnings per share grew at a double-digit
rate.
During the quarter, we announced restructuring actions, primarily related to
streamlining supply chain activities, that are expected to deliver annual cost
savings beginning in fiscal 2000 of approximately 11 cents per share. Charges
associated with these actions totaled $32.3 million after-tax, or 21 cents per
share. Last year's second-quarter results included an unusual charge of $100.1
million after tax, or 62 cents per share, primarily related to restructuring our
North American cereal operations.
In the United States, our total retail unit volume was up 3 percent for both the
second quarter and first half. Big G cereals led second-quarter performance,
with 5 percent volume growth that reflected strong gains for Cheerios, Total,
and other established brands. New Honey Nut Chex cereal, available in 20 percent
of the U.S. since August 1998, also contributed to the volume increase. This new
extension of the Chex brand family is recording consistently strong market
shares where available, and distribution will be expanded nationally in March
1999. Big G's second-quarter performance outpaced the industry. Category pound
volume in all measured outlets was down for the period, versus 2 percent growth
in the prior year. Through six months, Big G cereals' pound market share was
25.5 percent and dollar share was 31.1 percent.
Combined unit volume for our other retail food businesses grew 1 percent in the
quarter and 3 percent in the first half. Convenience foods volume (yogurt and
snacks) was up 1 percent in the second quarter, following a 9 percent
first-quarter increase. Yoplait and Colombo yogurt, Chex Mix snacks and Pop
Secret microwave popcorn led the second-quarter growth. Volume for the Betty
Crocker baking, dinner and side dish mix businesses also grew 1 percent in the
quarter. Foodservice volume was down 5 percent, as growth in core cereal
segments and snacks was offset by declines in frozen yogurt and baking mixes.
Unit volume for our international operations grew 5 percent in the second
quarter. Cereal Partners Worldwide, our joint venture with Nestle, achieved 7
percent volume growth. Strong performance in western Europe, Poland and Mexico
more than offset market-related softness in Russia, Brazil and the ASEAN
countries. Volume for Snack Ventures Europe was down 4 percent overall,
reflecting divestiture of the BN cookie business as well as sharp volume
declines in Russia. However, volume for continuing businesses was up 8 percent.
Second quarter volume in Canada was up 14 percent, with cereal volume growing at
an even stronger rate. Through six months, total international volume was up 7
percent.
During the second quarter, General Mills repurchased .6 million shares of common
stock. Through six months, share repurchases totaled 2.5 million shares at an
average price of approximately $66 per share. Average shares outstanding
(diluted) totaled 156.7 million for the second quarter compared to 162.3 million
in the prior year, reflecting shares issued in the February 1997 Ralcorp
acquisition. Interest expense in the second quarter totaled $29.4 million, up
from $27.3 million last year reflecting higher debt levels primarily associated
with share repurchase activity.
Our tax rates (excluding unusual items) for the second quarter and first half of
fiscal 1999 were 36.6 percent and 36.7 percent, respectively, compared to 37.3
percent and 37.5 percent in last year's second quarter and first half. Our
reported tax rates for the first six months of fiscal 1999 and 1998 were 36.7
percent and 36.3 percent, respectively.
<PAGE>
YEAR 2000
The year 2000 issue is the result of computer programs written using two digits
(rather than four) to define years. Computers or other equipment with
date-sensitive software may recognize "00" as 1900 rather than 2000. This could
result in system failures or miscalculations. If we, or our significant
customers, suppliers or other third parties fail to correct year 2000 issues,
our ability to operate our businesses could be adversely affected.
We have completed the assessment, inventory and classification of year 2000
issues on all of our information systems infrastructure and non-technical assets
(e.g., plant production equipment). Any systems which are year 2000 deficient
will be modified, upgraded or replaced (and if replaced, tested for compliance).
Project plans anticipate all existing, critical information systems
infrastructure to be year 2000 compliant by early in calendar 1999 and all plant
production equipment to be year 2000 compliant by the middle of calendar 1999.
Currently we are on schedule to meet this timetable. Based on assessments and
testing to date, we do not expect the financial impact of addressing internal
system year 2000 issues to be material to our financial position, results of
operations or cash flows. Total costs are estimated to be approximately $26
million, of which about half has been incurred to date.
We have surveyed significant customers, suppliers and other third parties
critical to our business operations to determine their year 2000 compliance.
Contingency plans will be in place by the middle of calendar 1999 to address any
third party failures that may disrupt our operations. These plans will continue
to be evaluated and modified through the year 2000 transition period as
additional information becomes available. However these contingency plans will
not guarantee that circumstances beyond our control will not adversely impact
our operations.
Our year 2000 compliance program is an ongoing process and the risk assessments
and timetable described above are forward-looking statements which are subject
to change. Factors that may cause such changes include, among others, the
ability to timely remediate all date-sensitive computer-related assets; the
actions of third parties, such as public utilities; and the occurrence of
broad-based systemic failures.
<PAGE>
PART II
Item 4. Submission of Matters to a Vote of Security Holders.
(a) The Annual Meeting of Stockholders was held on September 28, 1998.
(b) All directors nominated were elected at the Annual Meeting.
(c) For the election of directors, the results were as follows:
Richard M. Bressler For 130,429,685
Withheld 1,174,146
Livio D. DeSimone For 130,517,700
Withheld 1,086,131
William T. Esrey For 130,422,188
Withheld 1,181,643
Charles W. Gaillard For 130,514,606
Withheld 1,089,225
Raymond V. Gilmartin For 130,756,461
Withheld 847,370
Judith R. Hope For 130,452,972
Withheld 1,150,859
Kenneth A. Macke For 130,454,286
Withheld 1,149,545
Michael D. Rose For 130,438,445
Withheld 1,165,386
Stephen W. Sanger For 130,505,851
Withheld 1,097,980
A. Michael Spence For 130,487,198
Withheld 1,116,633
Dorothy A. Terrell For 130,488,867
Withheld 1,114,964
Raymond G. Viault For 130,533,174
Withheld 1,070,657
C. Angus Wurtele For 130,511,484
Withheld 1,092,347
The ratification of the appointment of KPMG Peat Marwick LLP as auditors for
fiscal 1999 was approved:
For: 131,132,272
Against: 302,846
Abstain: 168,713
The proposal to adopt the 1998 Senior Management Stock Plan (the "1998 Plan")
was approved:
For: 96,862,271
Against: 33,608,062
Abstain: 1,133,498
The stockholder proposal requesting that the directors take action to adopt
cumulative voting was rejected:
For: 29,157,667
Against: 82,179,238
Abstain: 8,279,940
Broker Non-Vote: 11,986,986
The stockholder proposal requesting that the directors refrain from making
charitable contributions was rejected:
For: 4,598,148
Against: 111,971,565
Abstain: 3,047,132
Broker Non-Vote: 11,986,986
Item 5. Other Information.
This report contains certain forward-looking statements which are based on
management's current views and assumptions regarding future events and financial
performance. These statements are qualified by reference to the section
"Cautionary Statement Relevant to Forward-Looking Information" in Item 1 of our
Annual Report on Form 10-K for the fiscal year ended May 31, 1998, which lists
important factors that could cause actual results to differ materially from
those discussed in this report.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit 11 Statement of Computation of Earnings per Share.
Exhibit 12 Statement of Ratio of Earnings to Fixed Charges.
Exhibit 27 Financial Data Schedule.
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the second
quarter of fiscal 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GENERAL MILLS, INC.
(Registrant)
Date January 8, 1999 /s/ S. S. Marshall
--------------- -------------------------------------
S. S. Marshall
Senior Vice President,
General Counsel
Date January 8, 1999 /s/ K. L. Thome
--------------- -------------------------------------
K. L. Thome
Senior Vice President,
Financial Operations
Exhibit 11
GENERAL MILLS, INC.
COMPUTATION OF EARNINGS PER SHARE
(In Millions, Except per Share Data)
<TABLE>
<CAPTION>
Thirteen Weeks Ended Twenty-Six Weeks Ended
November 29, November 23, November 29, November 23,
1998 1997 1998 1997
--------- -------- --------- --------
<S> <C> <C> <C> <C>
Net Earnings $143.6 $ 64.6 $288.6 $198.9
====== ====== ====== ======
Average Number of Common Shares -
Basic EPS (a) 152.9 158.2 153.5 158.9
Incremental Share Effect from:
-Stock options (b) 3.8 4.0 3.5 4.0
-Restricted stock, stock rights
and puts .- .1 .1 .1
------ ------ ----- -----
Average Number of Common Shares -
Diluted EPS 156.7 162.3 157.1 163.0
====== ====== ----- ======
Earnings per Share - Basic $ .94 $ .41 $ 1.88 $ 1.25
====== ====== ====== ======
Earnings per Share - Assuming
Dilution $ .92 $ .40 $ 1.84 $ 1.22
====== ====== ====== ======
Notes to Exhibit 11:
(a) Computed as the weighted average of net shares outstanding on stock-exchange
trading days.
(b) Incremental shares from stock options are computed by the "treasury stock"
method. This method first determines the number of shares issuable under
stock options that had an option price below the average market price for
the period, and then deducts the number of shares that could have been
repurchased with the proceeds of options exercised.
</TABLE>
Exhibit 12
<TABLE>
<CAPTION>
RATIO OF EARNINGS TO FIXED CHARGES
Twenty-Six Weeks Ended Fiscal Year Ended
November 29, November 23, May 31, May 25, May 26, May 28, May 29,
1998 1997 1998 1997 1996 1995 1994
------------------------- ---------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings
to Fixed Charges 7.32 5.36 5.63 6.54 6.94 4.10 6.18
For purposes of computing the ratio of earnings to fixed charges, earnings
represent pretax income from continuing operations, plus pretax earnings or
losses of joint ventures plus fixed charges (net of capitalized interest). Fixed
charges represent interest (whether expensed or capitalized) and one-third (the
proportion deemed representative of the interest factor) of rents of continuing
operations.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from our
Form 10-Q for the twenty-six week period ended November 29, 1998, and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-30-1999
<PERIOD-START> JUN-1-1998
<PERIOD-END> NOV-29-1998
<CASH> 9,500,000
<SECURITIES> 0
<RECEIVABLES> 468,400,000
<ALLOWANCES> 0
<INVENTORY> 438,400,000
<CURRENT-ASSETS> 1,113,600,000
<PP&E> 2,592,000,000
<DEPRECIATION> (1,367,200,000)
<TOTAL-ASSETS> 4,020,800,000
<CURRENT-LIABILITIES> 1,650,700,000
<BONDS> 1,592,800,000
0
0
<COMMON> 626,800,000
<OTHER-SE> (429,500,000)
<TOTAL-LIABILITY-AND-EQUITY> 4,020,800,000
<SALES> 3,150,500,000
<TOTAL-REVENUES> 3,150,500,000
<CGS> 1,282,700,000
<TOTAL-COSTS> 1,282,700,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 59,200,000
<INCOME-PRETAX> 455,100,000
<INCOME-TAX> 166,800,000
<INCOME-CONTINUING> 288,600,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 288,600,000
<EPS-PRIMARY> .18
<EPS-DILUTED> .18
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from our
Form 10-Q for the twenty-six week period ended November 23, 1997, and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-START> MAY-26-1997
<PERIOD-END> NOV-23-1997
<CASH> 29,900,000
<SECURITIES> 0
<RECEIVABLES> 442,800,000
<ALLOWANCES> 0
<INVENTORY> 471,600,000
<CURRENT-ASSETS> 1,159,600,000
<PP&E> 2,416,800,000
<DEPRECIATION> (1,243,900,000)
<TOTAL-ASSETS> 3,949,100,000
<CURRENT-LIABILITIES> 1,384,900,000
<BONDS> 1,596,900,000
0
0
<COMMON> 596,800,000
<OTHER-SE> (207,600,000)
<TOTAL-LIABILITY-AND-EQUITY> 3,949,100,000
<SALES> 3,054,800,000
<TOTAL-REVENUES> 3,054,800,000
<CGS> 1,272,100,000
<TOTAL-COSTS> 1,272,100,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 58,500,000
<INCOME-PRETAX> 311,900,000
<INCOME-TAX> 113,100,000
<INCOME-CONTINUING> 198,900,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 198,900,000
<EPS-PRIMARY> .12
<EPS-DILUTED> .12
</TABLE>
