GENERAL MILLS INCGIS
GENERAL MILLS INC Income Taxes Disclosure
INCOME TAXES
The components of earnings before income taxes and after-tax (loss) earnings from joint ventures and the corresponding income taxes
thereon are as follows:
Fiscal Year | |||
In Millions | 2026 | 2025 | 2024 |
Earnings before income taxes and after-tax (loss) earnings from joint ventures: | |||
United States | $441.7 | $2,493.2 | $2,907.0 |
Foreign | (36.2) | 341.8 | 121.3 |
Total earnings before income taxes and after-tax earnings (loss) from joint ventures | $405.5 | $2,835.0 | $3,028.3 |
Income taxes: | |||
Currently payable: | |||
Federal | $101.2 | $549.0 | $512.8 |
State and local | 65.6 | 80.1 | 72.0 |
Foreign | 44.3 | 65.5 | 58.2 |
Total current | 211.1 | 694.6 | 643.0 |
Deferred: | |||
Federal | 216.7 | (62.6) | 27.4 |
State and local | 1.9 | (3.3) | 9.7 |
Foreign | (15.4) | (55.0) | (85.6) |
Total deferred | 203.2 | (120.9) | (48.5) |
Total: | |||
Federal | 317.9 | 486.4 | 540.2 |
State and local | 67.5 | 76.8 | 81.7 |
Foreign | 28.9 | 10.5 | (27.4) |
Total income taxes | $414.3 | $573.7 | $594.5 |
In fiscal 2026, we recorded a $1,500.0 million impairment charge related to the North America Pet reporting unit goodwill, which is
not deductible for tax purposes. Please see Note 6 for additional information.
The following table reconciles the United States federal statutory income tax with our effective income tax for fiscal 2026:
Amount | Percent | |
United States federal statutory tax | $85.2 | 21.0% |
State and local income taxes, net of federal tax benefits (a) | 53.0 | 13.1 |
Foreign tax effects | ||
Switzerland | ||
Basis difference | 45.3 | 11.2 |
Other | (5.2) | (1.3) |
Other foreign jurisdictions | 11.3 | 2.8 |
Effect of cross-border laws (b) | (3.6) | (0.9) |
Tax Credits | ||
Research and development | (17.5) | (4.3) |
Other | (14.0) | (3.4) |
Changes in valuation allowances | (33.1) | (8.2) |
Nontaxable or nondeductible items | ||
Nondeductible goodwill | 347.5 | 85.7 |
Other | 5.5 | 1.4 |
Changes in unrecognized tax benefits | (9.5) | (2.4) |
Other adjustments | ||
Basis difference | (61.7) | (15.2) |
Other | 11.1 | 2.7 |
Effective income tax | $414.3 | 102.2% |
(a)State taxes in California, Georgia, Illinois, New Jersey, Pennsylvania, Texas, and Wisconsin comprised the majority (greater than 50 percent) of
the tax effect in this category.
(b)Includes the impact of any tax credits.
The following table reconciles the United States federal statutory income tax rate to the effective income tax rate for fiscal 2025 and
fiscal 2024.
Fiscal Year | ||
2025 | 2024 | |
United States federal statutory tax | 21.0% | 21.0% |
State and local income taxes, net of federal tax benefits | 2.1 | 2.1 |
Foreign rate differences | (1.7) | (1.6) |
Research and development tax credit | (1.5) | (1.2) |
Stock based compensation | (0.2) | (0.3) |
Divestitures, net | (0.3) | — |
Other, net | 0.8 | (0.4) |
Effective income tax rate | 20.2% | 19.6% |
Net income tax payments for fiscal 2026 were as follows:
In Millions | Fiscal Year 2026 |
United States — federal | $258.7 |
United States — state and local | 72.1 |
Foreign | 60.1 |
Total income taxes paid, net of refunds | $390.9 |
Net income tax payments for fiscal 2025 and fiscal 2024 were as follows:
Fiscal Year | ||
In Millions | 2025 | 2024 |
Total income taxes paid, net of refunds | $599.2 | $660.5 |
The tax effects of temporary differences that give rise to deferred tax assets and liabilities are as follows:
In Millions | May 31, 2026 | May 25, 2025 |
Accrued liabilities | $40.4 | $42.9 |
Compensation and employee benefits | 119.1 | 144.3 |
Unrealized hedges | 17.5 | 23.1 |
Pension | 62.9 | 74.2 |
Tax credit carryforwards | 89.8 | 58.1 |
Stock, partnership, and miscellaneous investments | 2.8 | 4.0 |
Capitalized research and development | 39.8 | 305.5 |
Prepayments | — | 65.9 |
Capital losses | 26.5 | 28.5 |
Net operating losses | 35.7 | 265.2 |
Other | 138.3 | 161.1 |
Gross deferred tax assets | 572.8 | 1,172.8 |
Valuation allowance | 214.6 | 253.7 |
Net deferred tax assets | 358.2 | 919.1 |
Brands | 1,341.5 | 1,436.0 |
Fixed assets | 394.3 | 496.1 |
Intangible assets | 199.0 | 247.3 |
Inventories | 33.7 | 31.3 |
Stock, partnership, and miscellaneous investments | 532.5 | 512.2 |
Other | 123.0 | 110.9 |
Gross deferred tax liabilities | 2,624.0 | 2,833.8 |
Net deferred tax liability | $2,265.8 | $1,914.7 |
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.
Deferred income taxes classified as held for sale as of May 31, 2026, are excluded from the amounts above. See Note 3 for additional
information.
Information about our valuation allowance follows:
In Millions | May 31, 2026 |
Pillsbury acquisition losses | $109.0 |
State and foreign loss carryforwards | 50.1 |
Capital loss carryforwards | 26.5 |
Other | 29.0 |
Total | $214.6 |
As of May 31, 2026, 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 31, 2026 |
Foreign loss carryforwards | $28.0 |
Federal operating loss carryforwards | 1.3 |
State operating loss carryforwards | 6.4 |
Total tax loss carryforwards | $35.7 |
Our foreign loss carryforwards expire as follows:
In Millions | May 31, 2026 |
Expire in fiscal 2027 and 2028 | $1.3 |
Expire in fiscal 2029 and beyond | 9.2 |
Do not expire | 17.5 |
Total foreign loss carryforwards | $28.0 |
On July 4, 2025, legislation known as the One Big Beautiful Bill Act (OBBBA) was signed into law. The OBBBA makes changes to
the United States corporate income tax system, including, among other provisions, the immediate expensing of research and
development expenditures, and 100 percent bonus depreciation on qualified property. The impacts of the OBBBA are reflected in our
results for the fiscal year ended May 31, 2026, and there was no material impact to our income tax expense. As of the fiscal year ended
May 31, 2026, certain provisions of the OBBBA have impacted the timing of cash tax payments.
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.
As of May 31, 2026, we have not recognized a deferred tax liability for unremitted earnings from 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 to 5 years.
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 2026
and fiscal 2025. Approximately $94.5 million of this total in fiscal 2026 represents the amount that, if recognized, would affect our
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. Our unrecognized tax benefit liability was classified in other
liabilities.
Fiscal Year | ||
In Millions | 2026 | 2025 |
Balance, beginning of year | $199.0 | $149.0 |
Tax positions related to current year: | ||
Additions | 51.2 | 48.7 |
Tax positions related to prior years: | ||
Additions | 2.8 | 13.0 |
Reductions | (38.1) | (2.8) |
Settlements | (6.3) | (2.6) |
Lapses in statutes of limitations | (4.7) | (6.3) |
Balance, end of year | $203.9 | $199.0 |
We report accrued interest and penalties related to unrecognized tax benefit liabilities in income tax expense. For fiscal 2026, we
recognized a net expense of $3.0 million of tax-related net interest and penalties, and had $29.1 million of accrued interest and
penalties as of May 31, 2026. For fiscal 2025, we recognized a net expense of $2.7 million of tax-related net interest and penalties, and
had $27.0 million of accrued interest and penalties as of May 25, 2025.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Jul 1, 2026 | Showing above |
| 2025 | Jun 26, 2025 | |
| 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.