GENERAL MILLS INCGIS
GENERAL MILLS INC Income Taxes Disclosure
NOTE 15. INCOME TAXES
The components of earnings before income taxes and after-tax earnings from joint ventures and the corresponding income taxes
thereon are as follows:
Fiscal Year
In Millions
2025
2024
2023
Earnings before income taxes and after-tax earnings from joint ventures:
United States
$
2,493.2
$
2,907.0
$
2,740.5
Foreign
341.8
121.3
400.0
Total earnings before income taxes and after-tax earnings from joint ventures
$
2,835.0
$
3,028.3
$
3,140.5
Income taxes:
Currently payable:
Federal
$
549.0
$
512.8
$
487.1
State and local
80.1
72.0
82.2
Foreign
65.5
58.2
65.1
Total current
694.6
643.0
634.4
Deferred:
Federal
(62.6)
27.4
9.6
State and local
(3.3)
9.7
(8.1)
Foreign
(55.0)
(85.6)
(23.7)
Total deferred
(120.9)
(48.5)
(22.2)
Total income taxes
$
573.7
$
594.5
$
612.2
The following table reconciles the United States statutory income tax rate with our effective income tax rate:
Fiscal Year
2025
2024
2023
United States statutory rate
21.0
%
21.0
%
21.0
%
State and local income taxes, net of federal tax benefits
2.1
2.1
1.5
Foreign rate differences
(1.7)
(1.6)
(1.0)
Research and development tax credit
(1.5)
(1.2)
-
Stock based compensation
(0.2)
(0.3)
(1.0)
Divestitures, net
(0.3)
-
(0.8)
Other, net
0.8
(0.4)
(0.2)
Effective income tax rate
20.2
%
19.6
%
19.5
%
The tax effects of temporary differences that give rise to deferred tax assets and liabilities are as follows:
In Millions
May 25, 2025
May 26, 2024
Accrued liabilities
$
42.9
$
43.6
Compensation and employee benefits
144.3
147.7
Unrealized hedges
23.1
-
Pension
74.2
83.0
Tax credit carryforwards
58.1
48.6
Stock, partnership, and miscellaneous investments
4.0
3.6
Capitalized research and development
305.5
103.6
Prepayments
65.9
-
Capital losses
28.5
71.7
Net operating losses
265.2
259.6
Other
161.1
92.3
Gross deferred tax assets
1,172.8
853.7
Valuation allowance
253.7
255.5
Net deferred tax assets
919.1
598.2
Brands
1,436.0
1,429.4
Fixed assets
496.1
393.2
Intangible assets
247.3
195.8
Tax lease transactions
-
3.4
Inventories
31.3
34.2
Stock, partnership, and miscellaneous investments
512.2
439.7
Unrealized hedges
-
20.2
Other
110.9
115.4
Gross deferred tax liabilities
2,833.8
2,631.3
Net deferred tax liability
$
1,914.7
$
2,033.1
We have established a valuation allowance against certain of the categories of deferred tax assets described above as current evidence
does not suggest we will realize sufficient taxable income of the appropriate character (e.g., ordinary income versus capital gain
income) within the carryforward period to allow us to realize these deferred tax benefits.
Information about our valuation allowance follows:
In Millions
May 25, 2025
Pillsbury acquisition losses
$
106.4
State and foreign loss carryforwards
59.0
Capital loss carryforwards
20.9
Other
67.4
Total
$
253.7
As of May 25, 2025, we believe it is more-likely-than-not that the remainder of our deferred tax assets are realizable.
Information about our tax loss carryforwards follows
In Millions
May 25, 2025
Foreign loss carryforwards
$
256.0
Federal operating loss carryforwards
2.3
State operating loss carryforwards
6.9
Total tax loss carryforwards
$
265.2
Our foreign loss carryforwards expire as follows:
In Millions
May 25, 2025
Expire in fiscal 2026 and 2027
$
2.9
Expire in fiscal 2028 and beyond
13.9
Do not expire (a)
239.2
Total foreign loss carryforwards
$
256.0
(a) Of the total foreign loss carryforwards, $
218.6
The United States Congress is currently drafting new tax legislation referred to as the One Big Beautiful Bill Act. We will continue to
monitor developments as the legislation progresses and evaluate any potential impacts on our financial statements.
In December 2021, the Organization for Economic Cooperation and Development (OECD) established a framework, referred to as
Pillar 2, designed to ensure large multinational enterprises pay a minimum 15 percent level of tax on the income arising in each
jurisdiction in which they operate. Numerous countries have already enacted the OECD model rules effective for taxable years
beginning after December 31, 2023, which for us was fiscal 2025. There was no material impact on our consolidated financial
statements. Several other countries have enacted or drafted legislation that is not yet effective for us, and we do not expect this
legislation to have a material impact on our consolidated financial statements. We will continue to monitor for new legislation and
guidance and evaluate any potential impact on our consolidated financial statements.
On August 16, 2022, the Inflation Reduction Act (IRA) was signed into law. The IRA introduces a Corporate Alternative Minimum
Tax beginning in our fiscal 2024 and an excise tax on the repurchase of corporate stock starting after January 1, 2023. The IRA did not
have a material impact on our financial results, including our annual effective tax rates and liquidity.
As of May 25, 2025, we have
no
t recognized a deferred tax liability for unremitted earnings of approximately $
2.3
foreign operations because we currently believe our subsidiaries have invested the undistributed earnings indefinitely or the earnings
will be remitted in a tax-neutral transaction. It is not practicable for us to determine the amount of unrecognized tax expense on these
reinvested earnings. Deferred taxes are recorded for earnings of our foreign operations when we determine that such earnings are no
longer indefinitely reinvested. All earnings prior to fiscal 2018 remain permanently reinvested. Earnings from fiscal 2018 and later are
not permanently reinvested and local country withholding taxes are recorded on earnings each year.
We are subject to federal income taxes in the United States as well as various state, local, and foreign jurisdictions. A number of years
may elapse before an uncertain tax position is audited and finally resolved. While it is often difficult to predict the final outcome or the
timing of resolution of any particular uncertain tax position, we believe that our liabilities for income taxes reflect the most likely
outcome. We adjust these liabilities, as well as the related interest, in light of changing facts and circumstances. Settlement of any
particular position would usually require the use of cash.
The number of years with open tax audits varies depending on the tax jurisdiction. Our major taxing jurisdiction is the United States
(federal and state). Various tax examinations by United States state taxing authorities could be conducted for any open tax year, which
vary by jurisdiction, but are generally from
3
5
The Internal Revenue Service (IRS) is currently auditing our federal tax returns for fiscal 2018 through 2022. Several state and foreign
examinations are currently in progress. We do not expect these examinations to result in a material impact on our results of operations
or financial position. During fiscal 2024, we received a notice of proposed adjustment from the IRS associated with a capital loss from
fiscal 2019. We believe that we have meritorious defense against this assessment and will vigorously defend our position. We do not
expect the resolution of the proposed adjustment to have a material impact on our financial position or liquidity. We have effectively
settled all issues with the IRS for fiscal years 2015 and prior.
The Brazilian tax authority, Secretaria da Receita Federal do Brasil (RFB), has concluded audits of our 2012 through 2020 tax return
years. These audits included a review of our determinations of amortization of certain goodwill arising from the acquisition of Yoki
Alimentos S.A. The RFB has proposed adjustments that effectively eliminate the goodwill amortization benefits related to this
transaction. We believe we have meritorious defenses and intend to continue to contest the disallowance for all years. Tax return years
2012 through 2013 have been resolved with no adjustments.
We apply a more-likely-than-not threshold to the recognition and derecognition of uncertain tax positions. Accordingly, we recognize
the amount of tax benefit that has a greater than 50 percent likelihood of being ultimately realized upon settlement. Future changes in
judgment related to the expected ultimate resolution of uncertain tax positions will affect earnings in the period of such change.
The following table sets forth changes in our total gross unrecognized tax benefit liabilities, excluding accrued interest, for fiscal 2025
and fiscal 2024. Approximately $
98.2
effective income tax rate in future periods. This amount differs from the gross unrecognized tax benefits presented in the table because
certain portions of the liabilities below would impact deferred taxes if recognized.
We
also would record a decrease in U.S. federal
income taxes upon recognition of the state tax benefits included therein.
Fiscal Year
In Millions
2025
2024
Balance, beginning of year
$
149.0
$
181.2
Tax positions related to current year:
Additions
48.7
24.6
Tax positions related to prior years:
Additions
13.0
6.3
Reductions
(2.8)
(55.2)
Settlements
(2.6)
(0.8)
Lapses in statutes of limitations
(6.3)
(7.1)
Balance, end of year
$
199.0
$
149.0
As of May 25, 2025, we do
no
t expect to pay unrecognized tax benefit liabilities and accrued interest within the next 12 months. We
are not able to reasonably estimate the timing of future cash flows beyond 12 months due to uncertainties in the timing of tax audit
outcomes. Our unrecognized tax benefit liability was classified in other liabilities.
We report accrued interest and penalties related to unrecognized tax benefit liabilities in income tax expense. For fiscal 2025, we
recognized a net expense of $
2.7
27.0
penalties as of May 25, 2025. For fiscal 2024, we recognized a net benefit of $
6.1
had $
24.2
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Jun 26, 2025 | Showing above |
| 2024 | Jun 26, 2024 | |
| 2023 | Jun 28, 2023 | |
| 2022 | Jun 30, 2022 | |
| 2021 | Jun 30, 2021 | |
| 2020 | Jul 2, 2020 | |
| 2019 | Jun 28, 2019 | |
| 2018 | Jun 29, 2018 | |
| 2017 | Jun 29, 2017 | |
| 2016 | Jun 30, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.