MINNEAPOLIS — Net income at General Mills, Inc. rose 18% in fiscal 2011, lifted by an increase in mark-to-market valuation of certain commodity positions along with a net benefit from certain tax items. Full-year results also benefitted from a strong fourth quarter, in which higher sales helped to drive a 51% gain in earnings.

Net income in the year ended May 29 totaled $1,798.3 million, equal to $2.80 per share on the common stock, up from $1,530.5 million, or $2.32 per share, in the same period a year ago. Net sales in the year rose 2% to $14,880.2 million from $14,635.6 million. General Mills attributed 1 percentage point of net sales growth to increased pound volume and 1 point to price and mix.

For the fourth quarter ended May 29, net income was $320.2 million, or 50c per share, up from $211.9 million, or 32c per share, in the same period a year ago. Net sales were $3,634.3 million, up 3% from $3,529.2 million.

“This past year represented a challenging operating environment for food manufacturers, as we experienced the return and rapid acceleration of cost inflation for various food ingredients and energy,” said Ken Powell, chairman and chief executive officer. “We’re generally pleased with our 2011 sales and profit results, which met the key targets we set for the year and represent performance consistent with our long-term growth model.”

Despite a gain of 4% in the fourth quarter, operating profit within the company’s U.S. Retail segment fell 2% during fiscal 2011 to $2,347.9 million, bogged down by higher input costs. Net sales for the full year were down 0.4%, to $10,163.9 million.

“Net sales for the Big G cereal division were 2% below year-ago sales that grew 5%,” General Mills said. “Meals division net sales declined 1%, as growth for Old El Paso Mexican products, Progresso soup, and Wanchai Ferry and Macaroni Grill frozen entrees was offset by softness in Helper dinner mixes and Green Giant canned vegetables. Pillsbury division net sales declined 2%, reflecting lower sales for Totino’s frozen pizza. Baking Products division net sales were 4% below year-ago results. Snacks division net sales grew 5% in fiscal 2011, led by Nature Valley and Fiber One grain snack bars. Yoplait division net sales grew 1%, and net sales for the Small Planet Foods organic and natural foods division rose 13%, led by double-digit growth by Larabar fruit and nut bars.”

General Mills said media expense for the segment, which rose 22% in fiscal 2010, fell 9% during fiscal 2011.

Operating profit in the Bakeries and Foodservice segment rose 51% in the fourth quarter and 16% in the full year, while sales increased 11% and 6% in the fourth quarter and full year, respectively. At $306.3 million, fiscal 2011 operating profit within the segment was driven by net price realization, effective customer channel and product strategies, and increased grain merchandising earnings, the company said.

Full-year net sales in the Bakeries and Foodservice segment, at $1,840.8 million, benefitted from 6 percentage points of growth related to pricing and mix, while pound volume essentially matched prior-year levels.

“Net sales to food service distributors and operators grew 3%, net sales to convenience store and vending customers grew 11%, and net sales to bakery and national restaurant accounts increased 6%,” General Mills said.

Operating profit in the International segment totaled $291.4 million in fiscal 2011, up 52% from fiscal 2010, driven in large part by a gain of 81% in the fourth quarter. Net sales rose 7% for the year to $2,875.5 million, and 17% for the fourth quarter, to $778.5 million.

General Mills said pound volume contributed 6 percentage points to the sales growth in the International segment, while price and mix added 1 point.

Capital expenditures totaled $649 million in 2011, reflecting new manufacturing capacity to support fast-growing product lines such as grain snack bars and multi-pack yogurt, as well as investments in cost-savings related projects.

Looking ahead to fiscal 2012, Mr. Powell said General Mills expects another year of good sales and earnings growth.

“Our business plan assumes significantly higher costs for ingredients and energy — we’re estimating 2012 input cost inflation of 10% to 11%,” he said. “We expect our H.M.M. (holistic margin management) discipline of cost savings, mix management and price realization to largely — but not completely — offset this cost pressure. We believe the operating environment in many developed markets will remain challenging over the next 12 months. As a result, our plan assumes 2012 pound volume will be slightly below 2011 levels. We believe that expected net price realization, together with a strong line-up of new products and marketing initiatives, should drive mid single-digit growth in our net sales in 2012.”

The company said segment operating profits are expected to grow at a low single-digit rate in fiscal 2012, including increased media investment that is expected to grow at least in line with sales. Diluted earnings per share are expected to increase to approximately $2.60 to $2.62 before any effects of mark-to-market valuation. The e.p.s. guidance represents growth of 5% to 6% from 2011 results of $2.48 per share excluding mark-to-market effects and certain tax items.