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## Our Disciplined Uses of Cash 

Our businesses are strong generators of cash. In fi scal 2010 alone, cash flow from operations totaled $2.2 billion, up 19 percent from the prior year. 

We invested $650 million of this cash in capital projects to support growth oppor- tunities in our businesses. Our plan for fiscal 2011 calls for $700 million in capital investment, including projects to expand U.S. cereal and yogurt manufacturing capacity, and increase production of Wanchai Ferry  and Häagen-Dazs  products in international markets. 

In fiscal 2010, we reduced debt by more than $600 million, resulting in total debt of $6.4 billion at the year’s end. Our operating-cash-fl ow-to-debt ratio increased more than 8 percentage points to 34 percent. And our fi xed-charge-cov- erage ratio improved to 6.4 times. Debt refinancing actions we completed in 2010 

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will con tribute to an expected decline in interest expense for 2011. 

We return significant cash to share- holders through dividends and share repur- chases. We paid dividends of $644 mil lion in 2010, representing 42 percent of net earnings. Our dividend rate increased twice during the year, and in June 2010, our board of directors approved a 17 percent increase in the annualized dividend rate effective with the August 2010 quarterly payment. General Mills and its predeces- sor firm have paid regular dividends with- out interruption or reduction for 112 years, and our goal is to continue increasing dividends over time as our earnings grow. 

Share repurchases are part of our long-term growth model. Since 2007, we’ve reduced diluted shares outstanding by an average of 2 percent per year. In June 2010, the board of directors approved a new repurchase authorization for 100 million shares. 

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Over 40 percent of our capital spending in 2010 was on growth projects. For example, we’ve added production capacity for our growing Yoplait  yogurt business. 

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