Kellogg Company Reports Third Quarter 2015 Results, On-Track for Full-Year 2015 and 2016

- Results for the third quarter were as expected.

- Improving trends in the U.S. Cereal business.

- The company is increasing guidance for 2015's operating cash flow after capital expenditure to $1.1 billion.

- The company continues to expect that it will meet previous currency-neutral guidance for net sales, operating profit, and earnings per share for the full-year 2015.

- Currency-neutral comparable net sales and operating profit are expected to be in-line with long-term growth targets in 2016.

Nov 03, 2015, 08:00 ET from Kellogg Company


BATTLE CREEK, Mich., Nov. 3, 2015 /PRNewswire/ -- Kellogg Company (NYSE: K) today announced third-quarter 2015 results that were in-line with expectations. The company expects to achieve its full-year guidance for currency-neutral comparable net sales, operating profit, and earnings per share. The company raised its guidance for 2015 operating cash flow after capital expenditure to $1.1 billion.

"The company's results for the third quarter continued the momentum that we saw earlier in the year. Our developing and emerging-market businesses performed well, and the trends in our developed businesses continued to show improvement over last year," said John Bryant, Kellogg Company's chairman and chief executive officer. "Our major productivity programs continue to progress well and we remain on-track to meet our objectives for 2015 and 2016."

Financial Summary:

Quarter ended

Year-to-date period ended

(millions, except per share data)

October 3,

2015

September 27,

2014

%

Change

October 3,

2015

September 27,

2014

%

Change

Reported Net Sales

$

3,329

$

3,639

(8.5)%

$

10,383

$

11,066

(6.2)%

Comparable Net Sales *

$

3,316

$

3,635

(8.8)%

$

10,352

$

11,057

(6.4)%

Currency-Neutral Comparable Net Sales *

$

3,671

$

3,635

1.0%

$

11,085

$

11,057

0.2%

Reported Operating Profit

$

334

$

365

(8.7)%

$

1,130

$

1,446

(21.9)%

Comparable Operating Profit *

$

465

$

531

(12.3)%

$

1,499

$

1,657

(9.5)%

Currency-Neutral Comparable

Operating Profit *

$

518

$

531

(2.3)%

$

1,595

$

1,657

(3.7)%

Reported Net Income (Loss) Attributable

to Kellogg Company

$

205

$

224

(8.4)%

$

655

$

925

(29.2)%

Comparable Net Income (Loss) Attributable to Kellogg Company *

$

301

$

340

(11.3)%

$

978

$

1,075

(9.0)%

Currency-Neutral Comparable Net Income

(Loss) Attributable to Kellogg Company *

$

344

$

340

0.9%

$

1,058

$

1,075

(1.7)%

Reported Diluted Earnings Per Share

$

0.58

$

0.62

(6.5)%

$

1.84

$

2.56

(28.1)%

Comparable Diluted Earnings Per Share *

$

0.85

$

0.94

(9.6)%

$

2.75

$

2.98

(7.7)%

Currency-Neutral Comparable Diluted

Earnings Per Share *

$

0.96

$

0.94

2.1%

$

2.97

$

2.98

(0.3)%

* Non-GAAP financial measures. See the tables herein for important information regarding these measures and a full reconciliation to the most comparable GAAP measure.

 

Third-quarter 2015 reported net sales decreased by 8.5 percent to $3.3 billion, due to the effect of currency translation. Currency-neutral comparable net sales increased by 1.0 percent in the quarter as the result of growth in Latin America, Asia, Canada, and the U.S. Specialty Channels business. Quarterly reported operating profit was $334 million, a decline of 8.7 percent. Reported results were affected by up-front costs associated with Project K and currency translation. Currency-neutral comparable operating profit declined by 2.3 percent, primarily due to the resetting of incentive compensation closer to targeted levels; the resetting of incentive compensation lowered operating profit growth by approximately 8 percentage points.

Reconciliation of Reported to Currency-Neutral Comparable Earnings Per Share

Third Quarter 2015 ($)

Reported EPS

0.58

Mark-to-Market

(0.04)

Project K

(0.18)

Integration and transaction costs

(0.02)

Acquisitions/Dispositions

0.01

53rd Week

Remeasurement of Venezuelan Business

(0.04)

Comparable EPS

0.85

Foreign Exchange

(0.11)

Currency-Neutral

Comparable EPS

0.96

 

Reported earnings for the third quarter of 2015 were $205 million, or $0.58 per share, a decrease of 6 percent from the $0.62 per share reported in the third quarter of last year. This quarter's reported earnings per share included negative impacts from the remeasurement of the Venezuelan business of $0.04 per share, mark-to-market accounting of $0.04 per share, costs associated with the Project K efficiency and effectiveness program of $0.18 per share, and $0.02 per share of integration and transaction costs. In addition, reported results included a benefit of $0.01 per share from acquisitions. Excluding all of these items, comparable third-quarter 2015 earnings were $0.85 per share. This result included a negative impact of $0.11 per share from currency translation; currency-neutral comparable earnings per share were $0.96 per share.

North America

Kellogg North America posted reported net sales of $2.3 billion in the third quarter, a reported decrease of 2.7 percent; currency-neutral comparable net sales decreased by 1.4 percent. The U.S. Morning Foods segment posted a currency-neutral comparable net sales decline of 2.6 percent. However, Kellogg-branded cereals gained share in the 12-week, publicly-available data. Currency-neutral comparable net sales in the U.S. Snacks segment decreased by 1.5 percent, although sequential performance improved. The U.S. Specialty Channels segment posted a 6.2 percent increase in currency-neutral comparable net sales in the quarter due to growth in both the Foodservice and Convenience channels. The North America Other segment, which is composed of the U.S. Frozen Foods, Kashi, and Canadian businesses, posted a 3.4 percent decrease in currency-neutral comparable net sales. Reported operating profit in North America decreased by 7.8 percent. Currency-neutral comparable operating profit declined by 3.0 percent; this decline was primarily due to the resetting of incentive compensation. The resetting of incentive compensation lowered North American operating profit growth by approximately 8 percentage points.

International

Reported net sales decreased by 12.8 percent in Europe in the third quarter. Currency-neutral comparable net sales decreased by 2.1 percent. In Latin America, reported net sales decreased by 37.1 percent; currency-neutral comparable net sales increased by 23.9 percent. Reported net sales in Asia Pacific decreased by 13.2 percent; currency-neutral comparable net sales increased by 2.2 percent as the result of double-digit growth in the Asian businesses.

Interest and Tax

Kellogg's interest expense was $56 million in the third quarter. The comparable effective tax rate* in the quarter was 25.2 percent; this was due to tax-planning initiatives and several discrete items.

Cash flow

Year-to-date cash flow,* a non-GAAP measure defined as cash from operating activities less capital expenditures, was $580 million through the end of the third quarter. The company now expects that full-year cash flow will be approximately $1.1 billion; this increase in expectations is due to the better-than-expected performance of working-capital initiatives.

Kellogg Raises Guidance for Operating Cash Flow After Capital Expenditure, Reaffirms Other Full-Year 2015 Currency-Neutral Comparable Guidance

The company reaffirmed previous guidance for currency-neutral comparable net sales, operating profit, and earnings per share in 2015; the company raised guidance for full-year cash flow. Currency-neutral comparable net sales are expected to remain approximately unchanged year-over-year. Kellogg expects full-year 2015 currency-neutral comparable operating profit to decrease at a rate between two and four percent. Full-year 2015 currency-neutral comparable earnings per share are anticipated to be in a range between two percent lower and approximately unchanged. The estimates for currency-neutral comparable operating profit and currency-neutral comparable earnings per share include a negative impact of between three and four percentage points from the rebasing of incentive compensation for 2015. Guidance for both operating profit and earnings per share excludes the impact of mark-to-market adjustments, 2014's 53rd week, integration costs, costs related to Project K, acquisitions, dispositions, foreign-currency translation, remeasurement of the Venezuelan business, and other items that could affect comparability. Cash flow is now expected to be approximately $1.1 billion, which includes the impact of the cash required by Project K.

Kellogg Reaffirms Previous Guidance for 2016, Provides Guidance for Earnings Per Share

In addition, Kellogg Company continues to expect that, in 2016, it will achieve its long-term target for currency-neutral comparable net sales of between 1 percent and 3 percent, and its long-term target for operating profit growth of between 4 percent and 6 percent. The company still expects to meet its long-term target for currency-neutral comparable operating profit growth even if current sales-growth trends continue and 2016's currency-neutral comparable net sales growth is at the lower end of the company's long-term target range. This confidence is the result of good productivity programs, continued execution of Project K, and the anticipated implementation of zero-based budgeting. The company expects growth in currency-neutral comparable earnings per share of between 6 and 8 percent.

Conference Call / Webcast

Kellogg will host a conference call to discuss these results on Tuesday, November 3rd, 2015 at 9:30 a.m. Eastern Time. The conference call and accompanying presentation slides will be broadcast live over the Internet at http://investor.kelloggs.com. Analysts and institutional investors may participate in the Q&A session by dialing (855) 209-8258 in the U.S., and (412) 542-4104 outside of the U.S. Members of the media and the public are invited to attend in a listen-only mode. Information regarding the rebroadcast is available at http://investor.kelloggs.com.

About Kellogg Company

At Kellogg Company (NYSE: K), we are driven to enrich and delight the world through foods and brands that matter. With 2014 sales of approximately $14.6 billion, Kellogg is the world's leading cereal company; second largest producer of cookies and crackers; a leading producer of savory snacks; and a leading North American frozen foods company. Every day, our well-loved brands nourish families so they can flourish and thrive. These brands include Kellogg's®, Keebler®, Special K®, Pringles®, Kellogg's Frosted Flakes®, Pop-Tarts®, Kellogg's Corn Flakes®, Rice Krispies®, Kashi®, Cheez-It®, Eggo®, Coco Pops®, Mini-Wheats®, and many more. To learn more about our responsible business leadership, foods that delight and how we strive to make a difference in our communities around the world, visit www.kelloggcompany.com.

Use of Non-GAAP Financial Measures

Certain financial measures have been provided on a non-GAAP (Generally Accepted Accounting Principles) basis. Management believes the use of such non-GAAP measures provides increased transparency and assists investors in understanding the underlying operating performance of the company and its segments and in the analysis of ongoing operating trends. All non-GAAP financial measures have been reconciled with the most directly comparable GAAP financial measures in the attachments provided with the release.

Forward-Looking Statements Disclosure

This news release contains, or incorporates by reference, "forward-looking statements" with projections concerning, among other things, the Company's efficiency-and-effectiveness program (Project K), the integration of acquired businesses, the Company's strategy, zero-based budgeting, and the Company's sales, earnings, margin, operating profit, costs and expenditures, interest expense, tax rate, capital expenditure, dividends, cash flow, debt reduction, share repurchases, costs, charges, rates of return, brand building, ROIC, working capital, growth, new products, innovation, cost reduction projects, workforce reductions, savings, and competitive pressures. Forward-looking statements include predictions of future results or activities and may contain the words "expects," "believes," "should," "will," "anticipates," "projects," "estimates," "implies," "can," or words or phrases of similar meaning.

The Company's actual results or activities may differ materially from these predictions. The Company's future results could also be affected by a variety of factors, including the ability to implement Project K as planned, whether the expected amount of costs associated with Project K will differ from forecasts, whether the Company will be able to realize the anticipated benefits from Project K in the amounts and times expected, the ability to realize the anticipated benefits and synergies from business acquisitions in the amounts and at the times expected, the impact of competitive conditions; the effectiveness of pricing, advertising, and promotional programs; the success of innovation, renovation and new product introductions; the recoverability of the carrying value of goodwill and other intangibles; the success of productivity improvements and business transitions; commodity and energy prices; labor costs; disruptions or inefficiencies in supply chain; the availability of and interest rates on short-term and long-term financing; actual market performance of benefit plan trust investments; the levels of spending on systems initiatives, properties, business opportunities, integration of acquired businesses, and other general and administrative costs; changes in consumer behavior and preferences; the effect of U.S. and foreign economic conditions on items such as interest rates, statutory tax rates, currency conversion and availability; legal and regulatory factors including changes in food safety, advertising and labeling laws and regulations; the ultimate impact of product recalls; business disruption or other losses from war, terrorist acts or political unrest; and other items.

Forward-looking statements speak only as of the date they were made, and the Company undertakes no obligation to update them publicly.

[Kellogg Company Financial News]

Kellogg Company and Subsidiaries CONSOLIDATED STATEMENT OF INCOME (millions, except per share data)

Quarter ended

Year-to-date period ended

(Results are unaudited)

October 3, 2015

September 27, 2014

October 3, 2015

September 27, 2014

Net sales

$

3,329

$

3,639

$

10,383

$

11,066

Cost of goods sold

2,096

2,347

6,664

6,859

Selling, general and administrative expense

899

927

2,589

2,761

Operating profit

334

365

1,130

1,446

Interest expense

56

54

168

156

Other income (expense), net

(6)

1

(78)

14

Income before income taxes

272

312

884

1,304

Income taxes

66

86

227

373

Earnings (loss) from unconsolidated affiliates

(1)

(1)

(3)

(5)

Net income

$

205

$

225

$

654

$

926

Net income (loss) attributable to noncontrolling interests

1

(1)

1

Net income attributable to Kellogg Company

$

205

$

224

$

655

$

925

Per share amounts:

Basic

$

0.58

$

0.63

$

1.85

$

2.58

Diluted

$

0.58

$

0.62

$

1.84

$

2.56

Dividends per share

$

0.50

$

0.49

$

1.48

$

1.41

Average shares outstanding:

Basic

354

358

354

359

Diluted

356

360

356

361

Actual shares outstanding at period end

354

355

 

Kellogg Company and Subsidiaries SELECTED OPERATING SEGMENT DATA (millions)

Quarter ended

Year-to-date period ended

(Results are unaudited)

October 3, 2015

September 27, 2014

October 3, 2015

September 27, 2014

Net sales

U.S. Morning Foods

$

762

$

782

$

2,280

$

2,340

U.S. Snacks

795

807

2,484

2,522

U.S. Specialty

281

270

912

918

North America Other

426

470

1,298

1,416

Europe

628

720

1,885

2,192

Latin America

202

320

825

918

Asia Pacific

235

270

699

760

Consolidated

$

3,329

$

3,639

$

10,383

$

11,066

Operating profit

U.S. Morning Foods

$

110

$

115

$

368

$

378

U.S. Snacks

62

59

302

269

U.S. Specialty

63

59

200

209

North America Other

44

69

140

226

Europe

73

59

191

174

Latin America

7

50

2

145

Asia Pacific

14

18

36

39

Total Reportable Segments

373

429

1,239

1,440

Corporate

(39)

(64)

(109)

6

Consolidated

$

334

$

365

$

1,130

$

1,446

 

Kellogg Company and Subsidiaries CONSOLIDATED STATEMENT OF CASH FLOWS (millions)

Year-to-date period ended

(unaudited)

October 3, 2015

September 27, 2014

Operating activities

Net income

$

654

$

926

Adjustments to reconcile net income to operating cash flows:

Depreciation and amortization

387

375

Postretirement benefit plan expense (benefit)

(68)

(73)

Deferred income taxes

(61)

2

Venezuela remeasurement expense

165

VIE deconsolidation

(49)

Other

67

Postretirement benefit plan contributions

(21)

(44)

Changes in operating assets and liabilities, net of acquisitions

(132)

(9)

Net cash provided by (used in) operating activities

942

1,177

Investing activities

Additions to properties

(362)

(355)

Acquisitions, net of cash acquired

(161)

Investments in unconsolidated affiliates

(456)

(6)

Other

43

13

Net cash provided by (used in) investing activities

(936)

(348)

Financing activities

Net issuances (reductions) of notes payable

533

339

Issuances of long-term debt

672

952

Reductions of long-term debt

(604)

(959)

Net issuances of common stock

196

164

Common stock repurchases

(381)

(690)

Cash dividends

(523)

(506)

Other

(3)

12

Net cash provided by (used in) financing activities

(110)

(688)

Effect of exchange rate changes on cash and cash equivalents

(40)

12

Increase (decrease) in cash and cash equivalents

(144)

153

Cash and cash equivalents at beginning of period

443

273

Cash and cash equivalents at end of period

299

$

426

Supplemental financial data:

Net cash provided by (used in) operating activities

$

942

$

1,177

Additions to properties

(362)

(355)

Cash Flow (operating cash flow less property additions) (a)

$

580

$

822

(a)

We use this non-GAAP measure of cash flow to focus management and investors on the amount of cash available for debt reduction, dividend distributions, acquisition opportunities, and share repurchase.

 

Kellogg Company and Subsidiaries CONSOLIDATED BALANCE SHEET (millions, except per share data)

October 3, 2015

January 3, 2015

(unaudited)

*

Current assets

Cash and cash equivalents

$

299

$

443

Accounts receivable, net

1,457

1,276

Inventories:

Raw materials and supplies

320

327

Finished goods and materials in process

890

952

Deferred income taxes

193

184

Other prepaid assets

194

158

Total current assets

3,353

3,340

Property, net of accumulated depreciation of $5,535 and $5,526

3,594

3,769

Investments in unconsolidated affiliates

454

1

Goodwill

4,988

4,971

Other intangibles, net of accumulated amortization of $45 and $43

2,281

2,295

Pension

283

250

Other assets

565

527

Total assets

$

15,518

$

15,153

Current liabilities

Current maturities of long-term debt

$

756

$

607

Notes payable

1,363

828

Accounts payable

1,610

1,528

Accrued advertising and promotion

500

446

Accrued income taxes

25

39

Accrued salaries and wages

292

320

Other current liabilities

526

596

Total current liabilities

5,072

4,364

Long-term debt

5,830

5,935

Deferred income taxes

765

726

Pension liability

731

777

Nonpension postretirement benefits

56

82

Other liabilities

391

418

Commitments and contingencies

Equity

Common stock, $.25 par value

105

105

Capital in excess of par value

721

678

Retained earnings

6,815

6,689

Treasury stock, at cost

(3,656)

(3,470)

Accumulated other comprehensive income (loss)

(1,322)

(1,213)

Total Kellogg Company equity

2,663

2,789

Noncontrolling interests

10

62

Total equity

2,673

2,851

Total liabilities and equity

$

15,518

$

15,153

 * Condensed from audited financial statements.

 

Kellogg Company and Subsidiaries Analysis of net sales and operating profit performance Third Quarter of 2015 versus 2014

Exhibit 1

(dollars in millions)

U.S.

Morning 

Foods

U.S.

Snacks

U.S.

Specialty

North

America

Other

North

America

Europe

Latin

America

Asia

Pacific

Corporate

Consolidated

2015 net sales

$

762

$

795

$

281

$

426

$

2,264

$

628

$

202

$

235

$

$

3,329

2014 net sales

$

782

$

807

$

270

$

470

$

2,329

$

720

$

320

$

270

$

$

3,639

% change - 2015 vs. 2014:

As Reported

(2.6)

%

(1.5)

%

4.6

%

(9.4)

%

(2.7)

%

(12.8)

%

(37.1)

%

(13.2)

%

%

(8.5)

%

Project K

%

%

%

0.1

%

0.1

%

(0.3)

%

%

%

%

%

Integration and transaction costs

%

%

%

%

%

%

%

(0.4)

%

%

%

Acquisitions/divestitures

%

%

(1.6)

%

%

(0.2)

%

2.3

%

%

%

%

0.3

%

Comparable growth

(2.6)

%

(1.5)

%

6.2

%

(9.5)

%

(2.6)

%

(14.8)

%

(37.1)

%

(12.8)

%

%

(8.8)

%

Foreign currency impact

%

%

%

(6.1)

%

(1.2)

%

(12.7)

%

(61.0)

%

(15.0)

%

%

(9.8)

%

Currency-Neutral Comparable growth

(2.6)

%

(1.5)

%

6.2

%

(3.4)

%

(1.4)

%

(2.1)

%

23.9

%

2.2

%

%

1.0

%

Volume (tonnage)

(2.4)

%

(1.8)

%

(2.6)

%

7.3

%

%

(1.6)

%

Pricing/mix

1.0

%

(0.3)

%

26.5

%

(5.1)

%

%

2.6

%

(dollars in millions)

U.S.

Morning 

Foods

U.S.

Snacks

U.S.

Specialty

North

America

Other

North

America

Europe

Latin

America

Asia

Pacific

Corporate

Consolidated

2015 operating profit

$

110

$

62

$

63

$

44

$

279

$

73

7

$

14

$

(39)

$

334

2014 operating profit

$

115

$

59

$

59

$

69

$

302

$

59

$

50

$

18

(64)

$

365

% change - 2015 vs. 2014:

As Reported

(4.8)

%

4.3

%

5.6

%

(34.8)

%

(7.8)

%

22.4

%

(85.0)

%

(29.5)

%

41.1

%

(8.7)

%

Mark-to-market

%

%

%

%

%

%

%

%

9,053.6

%

7.4

%

Project K

(12.0)

%

19.3

%

(0.9)

%

(13.1)

%

(3.3)

%

18.9

%

(0.3)

%

15.6

%

(8,936.0)

%

(1.6)

%

VIE deconsolidation

%

%

%

%

%

%

%

%

%

%

Integration and transaction costs

%

%

%

%

%

6.4

%

(1.2)

%

(12.5)

%

(5.9)

%

%

Acquisitions/divestitures

%

%

0.1

%

%

%

2.2

%

%

%

%

0.3

%

Venezuela remeasurement

%

%

%

%

%

%

(26.7)

%

%

%

(2.5)

%

Comparable growth

7.2

%

(15.0)

%

6.4

%

(21.7)

%

(4.5)

%

(5.1)

%

(56.8)

%

(32.6)

%

(70.6)

%

(12.3)

%

Foreign currency impact

0.3

%

%

%

(8.1)

%

(1.5)

%

(8.5)

%

(71.9)

%

(12.6)

%

2.3

%

(10.0)

%

Currency-Neutral Comparable growth

6.9

%

(15.0)

%

6.4

%

(13.6)

%

(3.0)

%

3.4

%

15.1

%

(20.0)

%

(72.9)

%

(2.3)

%

For more information on the reconciling items in the table above, please refer to the Significant items impacting comparability section.

 

Kellogg Company and Subsidiaries Analysis of net sales and operating profit performance Year-to-date 2015 versus 2014

Exhibit 2

(dollars in millions)

U.S.

Morning

Foods

U.S.

Snacks

U.S.

Specialty

North

America

Other

North

America

Europe

Latin

America

Asia

Pacific

Corporate

Consolidated

2015 net sales

$

2,280

$

2,484

$

912

$

1,298

$

6,974

$

1,885

$

825

$

699

$

$

10,383

2014 net sales

$

2,340

$

2,522

$

918

$

1,416

$

7,196

$

2,192

$

918

$

760

$

$

11,066

% change - 2015 vs. 2014:

As Reported

(2.6)

%

(1.5)

%

(0.6)

%

(8.4)

%

(3.1)

%

(14.0)

%

(10.2)

%

(8.1)

%

%

(6.2)

%

Project K

%

%

%

(0.1)

%

%

(0.1)

%

%

%

%

(0.1)

%

Integration and transaction costs

%

%

%

%

%

%

%

(0.2)

%

%

%

Acquisitions/divestitures

%

%

(1.0)

%

%

(0.2)

%

1.8

%

%

%

%

0.3

%

Differences in shipping days

%

%

%

%

%

(0.1)

%

%

%

%

%

Comparable growth

(2.6)

%

(1.5)

%

0.4

%

(8.3)

%

(2.9)

%

(15.6)

%

(10.2)

%

(7.9)

%

%

(6.4)

%

Foreign currency impact

%

%

%

(4.7)

%

(0.9)

%

(14.4)

%

(28.3)

%

(12.2)

%

%

(6.6)

%

Currency-Neutral Comparable growth

(2.6)

%

(1.5)

%

0.4

%

(3.6)

%

(2.0)

%

(1.2)

%

18.1

%

4.3

%

%

0.2

%

Volume (tonnage)

(1.9)

%

(1.0)

%

0.9

%

7.2

%

%

(0.9)

%

Pricing/mix

(0.1)

%

(0.2)

%

17.2

%

(2.9)

%

%

1.1

%

(dollars in millions)

U.S.

Morning

Foods

U.S.

Snacks

U.S.

Specialty

North

America

Other

North

America

Europe

Latin

America

Asia

Pacific

Corporate

Consolidated

2015 operating profit

$

368

$

302

$

200

$

140

$

1,010

$

191

2

$

36

(109)

$

1,130

2014 operating profit

$

378

$

269

$

209

$

226

$

1,082

$

174

$

145

$

39

$

6

$

1,446

% change - 2015 vs. 2014:

As Reported

(2.7)

%

12.2

%

(4.4)

%

(37.8)

%

(6.6)

%

9.4

%

(98.4)

%

(8.2)

%

(1,805.2)

%

(21.9)

%

Mark-to-market

%

%

%

%

%

%

%

%

(1,750.1)

%

(6.4)

%

Project K

(2.5)

%

4.1

%

(0.4)

%

(13.9)

%

(3.1)

%

5.3

%

(0.9)

%

15.8

%

92.0

%

(3.3)

%

VIE deconsolidation

%

21.4

%

%

%

5.6

%

%

%

%

%

4.1

%

Integration and transaction costs

%

%

%

%

%

5.1

%

(0.7)

%

(11.2)

%

(47.0)

%

%

Acquisitions/divestitures

%

%

%

%

%

1.5

%

%

%

%

0.2

%

Differences in shipping days

%

%

%

%

%

(0.2)

%

%

%

%

%

Venezuela remeasurement

%

%

%

%

%

%

(76.2)

%

%

(17.3)

%

(7.0)

%

Comparable growth

(0.2)

%

(13.3)

%

(4.0)

%

(23.9)

%

(9.1)

%

(2.3)

%

(20.6)

%

(12.8)

%

(82.8)

%

(9.5)

%

Foreign currency impact

0.3

%

%

%

(5.2)

%

(0.9)

%

(9.5)

%

(30.3)

%

(14.0)

%

(91.2)

%

(5.8)

%

Currency-Neutral Comparable growth

(0.5)

%

(13.3)

%

(4.0)

%

(18.7)

%

(8.2)

%

7.2

%

9.7

%

1.2

%

8.4

%

(3.7)

%

For more information on the reconciling items in the table above, please refer to the Significant items impacting comparability section.

 

Kellogg Company and Subsidiaries Restructuring and cost reduction activities (Pre-tax millions)

Exhibit 3

Quarter ended October 3, 2015

Year-to-date period ended October 3, 2015

Net Sales

Cost of

goods

sold

Selling, general

and

administrative

expense

Total

Net Sales

Cost of

goods

sold

Selling, general

and

administrative

expense

Total

2015

U.S. Morning Foods

$

$

27

$

3

$

30

$

$

43

$

8

$

51

U.S. Snacks

10

5

15

23

11

34

U.S. Specialty

1

1

3

3

North America Other

10

1

11

2

35

3

40

Europe

2

7

3

12

2

43

11

56

Latin America

1

1

2

2

Asia Pacific

2

2

8

2

10

Corporate

13

13

47

47

Total

$

2

$

57

$

26

$

85

$

4

$

154

$

85

$

243

Quarter ended September 27, 2014

Year-to-date period ended September 27, 2014

Net Sales

Cost of

goods

sold

Selling, general

and

administrative

expense

Total

Net Sales

Cost of

goods

sold

Selling, general

and

administrative

expense

Total

2014

U.S. Morning Foods

$

$

12

$

3

$

15

$

$

36

$

5

$

41

U.S. Snacks

30

2

32

39

3

42

U.S. Specialty

1

1

1

1

2

North America Other

2

2

8

3

11

Europe

21

2

23

30

33

63

Latin America

1

1

1

5

6

Asia Pacific

11

11

17

5

22

Corporate

(13)

20

7

(12)

49

37

Total

$

$

64

$

28

$

92

$

$

120

$

104

$

224

2015 Variance - better(worse) than 2014

U.S. Morning Foods

$

$

(15)

$

$

(15)

$

$

(7)

$

(3)

$

(10)

U.S. Snacks

20

(3)

17

16

(8)

8

U.S. Specialty

1

(2)

(1)

North America Other

(8)

(1)

(9)

(2)

(27)

(29)

Europe

(2)

14

(1)

11

(2)

(13)

22

7

Latin America

(1)

5

4

Asia Pacific

9

9

9

3

12

Corporate

(13)

7

(6)

(12)

2

(10)

Total

$

(2)

$

7

$

2

$

7

$

(4)

$

(34)

$

19

$

(19)

For more information on the reconciling items in the table above, please refer to the Significant items impacting comparability section.

 

Kellogg Company and Subsidiaries Integration and transaction costs (Pre-tax millions)

Exhibit 4

Quarter ended October 3, 2015

Year-to-date period ended October 3, 2015

Net Sales

Cost of goods

sold

Selling, general and

administrative

expense

Total

Net Sales

Cost of goods

sold

Selling, general and

administrative

expense

Total

2015

Europe

$

$

$

$

$

$

5

$

3

$

8

Latin America

1

1

2

1

1

2

Asia Pacific

1

1

3

5

1

5

4

10

Corporate

1

1

2

2

Total

$

1

$

2

$

5

$

8

$

1

$

11

$

10

$

22

Quarter ended September 27, 2014

Year-to-date period ended September 27, 2014

Net Sales

Cost of goods

sold

Selling, general and

administrative

expense

Total

Net Sales

Cost of goods

sold

Selling, general and

administrative

expense

Total

2014

Europe

$

$

5

$

2

$

7

$

$

14

$

7

$

21

Latin America

Asia Pacific

1

1

2

1

3

Corporate

1

1

Total

$

$

6

$

2

$

8

$

$

16

$

9

$

25

2015 Variance - better(worse) than 2014

Europe

$

$

5

$

2

$

7

$

$

9

$

4

$

13

Latin America

(1)

(1)

(2)

(1)

(1)

(2)

Asia Pacific

(1)

(3)

(4)

(1)

(3)

(3)

(7)

Corporate

(1)

(1)

(1)

(1)

Total

$

(1)

$

4

$

(3)

$

$

(1)

$

5

$

(1)

$

3

For more information on the reconciling items in the table above, please refer to the Significant items impacting comparability section.

 

Kellogg Company and Subsidiaries Venezuela remeasurement (Pre-tax millions)

Exhibit 5

Quarter ended October 3, 2015

Year-to-date period ended October 3, 2015

Cost of

goods

sold

Selling, general

and

administrative

expense

Other

(income)

expense

Total

Cost of

goods

sold

Selling, general

and

administrative

expense

Other

(income)

expense

Total

2015

Latin America

$

10

$

3

$

$

13

$

109

$

6

$

10

$

125

Corporate

1

39

40

Total

$

10

$

3

$

$

13

$

110

$

6

$

49

$

165

Quarter ended September 27, 2014

Year-to-date period ended September 27, 2014

Cost of

goods

sold

Selling, general

and

administrative

expense

Other

(income)

expense

Total

Cost of

goods

sold

Selling, general

and

administrative

expense

Other

(income)

expense

Total

2014

Latin America

$

$

$

$

$

$

$

$

Corporate

Total

$

$

$

$

$

$

$

$

2015 Variance - better(worse) than 2014

Latin America

$

(10)

$

(3)

$

$

(13)

$

(109)

$

(6)

$

(10)

$

(125)

Corporate

(1)

(39)

(40)

Total

$

(10)

$

(3)

$

$

(13)

$

(110)

$

(6)

$

(49)

$

(165)

For more information on the reconciling items in the table above, please refer to the Significant items impacting comparability section.

 

Kellogg Company and Subsidiaries Reconciliation of Non-GAAP Amounts - Reported Net Sales to Currency-Neutral Comparable Net Sales

Exhibit 6

Quarter ended October 3, 2015

(millions)

U.S.

Morning

Foods

U.S.

Snacks

U.S.

Specialty

North

America

Other

Europe

Latin

America

Asia

Pacific

Corporate

Kellogg

Consolidated

Reported Net Sales

$

762

$

795

$

281

$

426

$

628

$

202

$

235

$

$

3,329

Project K

(2)

(2)

Integration and transaction costs

(1)

(1)

Acquisitions/divestitures

16

16

Differences in shipping days

Comparable Net Sales

$

762

$

795

$

281

$

426

$

614

$

202

$

236

$

$

3,316

Foreign currency impact

(29)

(91)

(195)

(40)

(355)

Currency-Neutral Comparable Net Sales

$

762

$

795

$

281

$

455

$

705

$

397

$

276

$

$

3,671

Quarter ended September 27, 2014

(millions)

U.S.

Morning

Foods

U.S.

Snacks

U.S.

Specialty

North

America

Other

Europe

Latin

America

Asia

Pacific

Corporate

Kellogg

Consolidated

Reported Net Sales

$

782

$

807

$

270

$

470

$

720

$

320

$

270

$

$

3,639

Project K

Integration and transaction costs

Acquisitions/divestitures

4

4

Differences in shipping days

Comparable Net Sales

$

782

$

807

$

266

$

470

$

720

$

320

$

270

$

$

3,635

Foreign currency impact

Currency-Neutral Comparable Net Sales

$

782

$

807

$

266

$

470

$

720

$

320

$

270

$

$

3,635

For more information on the reconciling items in the table above, please refer to the Significant items impacting comparability section.

 

Kellogg Company and Subsidiaries Reconciliation of Non-GAAP Amounts - Reported Net Sales to Currency-Neutral Comparable Net Sales

Exhibit 7

Year-to-date period ended October 3, 2015

 

(millions)

U.S.

Morning

Foods

U.S.

Snacks

U.S.

Specialty

North

America

Other

Europe

Latin

America

Asia

Pacific

Corporate

Kellogg

Consolidated

Reported Net Sales

$

2,280

$

2,484

$

912

$

1,298

$

1,885

$

825

$

699

$

$

10,383

Project K

(2)

(2)

(4)

Integration and transaction costs

(1)

(1)

Acquisitions/ divestitures

39

39

Differences in shipping days

(3)

(3)

Comparable Net Sales

$

2,280

$

2,484

$

912

$

1,300

$

1,851

$

825

$

700

$

$

10,352

Foreign currency impact

(66)

(314)

(260)

(93)

(733)

Currency-Neutral Comparable Net Sales

$

2,280

$

2,484

$

912

$

1,366

$

2,165

$

1,085

$

793

$

$

11,085

Year-to-date period ended September 27, 2014

(millions)

U.S.

Morning

Foods

U.S.

Snacks

U.S.

Specialty

North

America

Other

Europe

Latin

America

Asia

Pacific

Corporate

Kellogg

Consolidated

Reported Net Sales

$

2,340

$

2,522

$

918

$

1,416

$

2,192

$

918

$

760

$

$

11,066

Project K

Integration and transaction costs

Acquisitions/ divestitures

9

9

Differences in shipping days

Comparable Net Sales

$

2,340

$

2,522

$

909

$

1,416

$

2,192

$

918

$

760

$

$

11,057

Foreign currency impact

Currency-Neutral Comparable Net Sales

$

2,340

$

2,522

$

909

$

1,416

$

2,192

$

918

$

760

$

$

11,057

For more information on the reconciling items in the table above, please refer to the Significant items impacting comparability section.

 

Kellogg Company and Subsidiaries Reconciliation of Non-GAAP Amounts - Reported Operating Profit to Currency-Neutral Comparable Operating Profit

Exhibit 8

Quarter ended October 3, 2015

 

(millions)

U.S.

Morning

Foods

U.S.

Snacks

U.S.

Specialty

North

America

Other

Europe

Latin

America

Asia

Pacific

Corporate

Kellogg

Consolidated

Reported Operating Profit

$

110

$

62

$

63

$

44

$

73

$

7

$

14

$

(39)

$

334

Mark-to-market

(27)

(27)

Project K

(30)

(15)

(1)

(11)

(12)

(1)

(2)

(13)

(85)

VIE deconsolidation

Integration and transaction costs

(2)

(5)

(1)

(8)

Acquisitions/divestitures

2

2

Venezuela remeasurement

(13)

(13)

Comparable Operating

Profit

$

140

$

77

$

64

$

55

$

83

$

23

$

21

$

2

$

465

Foreign currency impact

1

(7)

(8)

(35)

(4)

(53)

Currency-Neutral Comparable Operating

Profit

$

139

$

77

$

64

$

62

$

91

$

58

$

25

$

2

$

518

Quarter ended September 27, 2014

(millions)

U.S.

Morning

Foods

U.S.

Snacks

U.S.

Specialty

North

America

Other

Europe

Latin

America

Asia

Pacific

Corporate

Kellogg

Consolidated

Reported Operating Profit

$

115

$

59

$

59

$

69

$

59

$

50

$

18

$

(64)

$

365

Mark-to-market

(66)

(66)

Project K

(15)

(32)

(1)

(2)

(23)

(1)

(11)

(7)

(92)

VIE deconsolidation

Integration and transaction costs

(7)

(1)

(8)

Acquisitions/divestitures

Venezuela remeasurement

Comparable Operating

Profit

$

130

$

91

$

60

$

71

$

89

$

51

$

30

$

9

$

531

Foreign currency impact

Currency-Neutral Comparable Operating

Profit

$

130

$

91

$

60

$

71

$

89

$

51

$

30

$

9

$

531

For more information on the reconciling items in the table above, please refer to the Significant items impacting comparability section.

 

Kellogg Company and Subsidiaries Reconciliation of Non-GAAP Amounts - Reported Operating Profit to Currency-Neutral Comparable Operating Profit

Exhibit 9

Year-to-date period ended October 3, 2015

 

(millions)

U.S.

Morning

Foods

U.S.

Snacks

U.S.

Specialty

North

America

Other

Europe

Latin

America

Asia

Pacific

Corporate

Kellogg

Consolidated

Reported Operating Profit

$

368

$

302

$

200

$

140

$

191

$

2

$

36

$

(109)

$

1,130

Mark-to-market

(59)

(59)

Project K

(51)

(34)

(3)

(40)

(56)

(2)

(10)

(47)

(243)

VIE deconsolidation

67

67

Integration and

transaction costs

(8)

(2)

(10)

(2)

(22)

Acquisitions/divestitures

4

4

Venezuela remeasurement

(115)

(1)

(116)

Comparable Operating

Profit

$

419

$

269

$

203

$

180

$

251

$

121

$

56

$

$

1,499

Foreign currency impact

2

(13)

(25)

(45)

(9)

(6)

(96)

Currency-Neutral Comparable Operating Profit

$

417

$

269

$

203

$

193

$

276

$

166

$

65

$

6

$

1,595

Year-to-date period ended September 27, 2014

(millions)

U.S.

Morning Foods

U.S.

Snacks

U.S.

Specialty

North

America

Other

Europe

Latin

America

Asia

Pacific

Corporate

Kellogg

Consolidated

Reported Operating Profit

$

378

$

269

$

209

$

226

$

174

$

145

$

39

$

6

$

1,446

Mark-to-market

38

38

Project K

(41)

(42)

(2)

(11)

(63)

(6)

(22)

(37)

(224)

VIE deconsolidation

Integration and

transaction costs

(21)

(3)

(1)

(25)

Acquisitions/divestitures

Venezuela remeasurement

Comparable Operating

Profit

$

419

$

311

$

211

$

237

$

258

$

151

$

64

$

6

$

1,657

Foreign currency impact

Currency-Neutral Comparable Operating Profit

$

419

$

311

$

211

$

237

$

258

$

151

$

64

$

6

$

1,657

For more information on the reconciling items in the table above, please refer to the Significant items impacting comparability section.

 

 

Kellogg Company and Subsidiaries Reconciliation of Non-GAAP Amounts - Reported Net Income Attributable to Kellogg to Currency-Neutral Comparable Net Income Attributable to Kellogg

Exhibit 10

Quarter ended

Year-to-date period ended

(millions)

October 3, 2015

September 27, 2014

October 3, 2015

September 27, 2014

Reported Net Income Attributable to Kellogg

$

205

$

224

$

655

$

925

Mark-to-market

(17)

(42)

(41)

30

Project K

(63)

(68)

(174)

(162)

VIE deconsolidation

50

Integration and transaction costs

(6)

(6)

(17)

(18)

Acquisitions/divestitures

3

4

Venezuela remeasurement

(13)

(145)

Comparable Net Income Attributable to Kellogg

$

301

$

340

978

1,075

Foreign currency impact

(43)

(80)

Currency-Neutral Comparable Net Income Attributable to Kellogg

$

344

340

$

1,058

$

1,075

For more information on the reconciling items in the table above, please refer to the Significant items impacting comparability section.

 

Kellogg Company and Subsidiaries Reconciliation of Non-GAAP Amounts - Reported EPS to Currency-Neutral Comparable EPS

Exhibit 11

Quarter ended

Year-to-date period ended

October 3, 2015

September 27, 2014

October 3, 2015

September 27, 2014

Reported EPS

$

0.58

$

0.62

$

1.84

$

2.56

Mark-to-market

(0.04)

(0.11)

(0.11)

0.08

Project K

(0.18)

(0.19)

(0.49)

(0.45)

VIE deconsolidation

0.14

Integration and transaction costs

(0.02)

(0.02)

(0.05)

(0.05)

Acquisitions/divestitures

0.01

0.01

Venezuela remeasurement

(0.04)

(0.41)

Comparable EPS

$

0.85

$

0.94

$

2.75

$

2.98

Foreign currency impact

(0.11)

(0.22)

Currency-Neutral Comparable EPS

$

0.96

$

0.94

$

2.97

$

2.98

For more information on the reconciling items in the table above, please refer to the Significant items impacting comparability section.

 

Kellogg Company and Subsidiaries Reconciliation of Non-GAAP Amounts - Reported Effective Tax Rate to Currency-Neutral Comparable Effective Tax Rate

Exhibit 12

Quarter ended

Year-to-date period ended

October 3, 2015

September 27, 2014

October 3, 2015

September 27, 2014

Reported Effective Tax Rate

24.2

%

27.7

%

25.7

%

28.6

%

 Mark-to-market

(1.1)

%

(1.3)

%

(0.3)

%

(0.3)

%

Project K

(0.2)

%

0.5

%

(0.5)

%

0.2

%

 VIE deconsolidation

%

%

(1.2)

%

%

Integration and transaction costs

0.1

%

%

0.1

%

%

 Acquisitions/divestitures

(0.6)

%

%

(0.2)

%

%

 Venezuela remeasurement

0.8

%

%

2.0

%

%

Comparable Effective Tax Rate

25.2

%

28.5

%

25.8

%

28.7

%

Foreign currency impact

0.6

%

%

0.7

%

%

Currency-Neutral Comparable Effective Tax Rate

24.6

%

28.5

%

25.1

%

28.7

%

For more information on the reconciling items in the table above, please refer to the Significant items impacting comparability section.

 

Significant items impacting comparability

Project K

During 2013, we announced Project K, a four-year efficiency and effectiveness program. The program is expected to generate a significant amount of savings that will be invested in key strategic areas of focus for the business. We expect that this investment will drive future growth in revenues, gross margin, operating profit, and cash flow. We recorded pre-tax charges related to this program of $85 million and $243 million for the quarter and year-to-date periods ended October 3, 2015, respectively. We also recorded charges of $92 million and $224 million for the quarter and year-to-date periods ended September 27, 2014, respectively.

Acquisitions and dispositions

In September 2015, we announced a joint venture with Tolaram Africa to develop snacks and breakfast foods for the West African market. In addition, Kellogg acquired 50 percent of Multipro, a premier sales and distribution company in Nigeria and Ghana as well as the right to acquire a stake in Tolaram Africa Foods (which owns 49 percent of Dufil Prima) in the future. Dufil Prima manufactures and markets several leading food brands, including Indomie noodles, which are often consumed at breakfast, as well as Minimie snacks, Power oil and Power pasta.

In September 2015, we completed the acquisition of Mass Foods, Egypt's leading cereal company for $46 million, or $44 million net of cash and cash equivalents acquired. The impact of the acquisition was not material to net sales or operating profit reported in the European reportable segment for the quarter and year-to-date periods ended October 3, 2015.

In January 2015, we completed the acquisition of a majority interest in Bisco Misr, the number one packaged biscuits company in Egypt for $125 million, or $117 million net of cash and cash equivalents acquired. The acquisition added $16 million and $39 million in incremental net sales to our reported results in the European reportable segment for the quarter and year-to-date periods ended October 3, 2015, respectively. The acquisition added $2 million and $4 million of incremental operating profit to our reported results for the quarter and year-to-date periods ended October 3, 2015, respectively.

During the quarter ended September 27, 2014, we entered into an agreement to sell our vegan and vegetarian canned-meat substitute business unit under the Loma Linda brand to Atlantic Natural Foods (ANF), LLC of Nashville, N.C. The disposition negatively impacted reported net sales in the U.S. Specialty reportable segment by approximately $4 million and $9 million for the quarter and year-to-date periods ended October 3, 2015, respectively.

Integration and transaction costs

We have incurred integration costs related to the integration of the 2015 acquisition of Bisco Misr and the 2012 acquisition of Pringles as we move these businesses into the Kellogg business model. In addition, we have incurred transaction costs for the September 2015 acquisition of Mass Foods and the September 2015 entry into a joint venture with Tolaram Africa. We recorded pre-tax integration and transaction costs of $8 million and $22 million for the quarter and year-to-date periods ended October 3, 2015, respectively. We recorded pre-tax integration charges of $8 million and $25 million for the quarter and year-to-date periods ended September 27, 2014, respectively.

Mark-to-market accounting for pension plans, commodities and certain foreign currency contracts

We recognize mark-to-market adjustments for pension plans, commodity contracts, and certain foreign currency contracts as incurred. Actuarial gains/losses for pension plans are recognized in the year they occur. Changes between contract and market prices for commodities contracts and certain foreign currency contracts result in gains/losses that are recognized in the quarter they occur. We recorded pre-tax mark-to-market charges of $27 million and $59 million for the quarter and year-to-date periods ended October 3, 2015, respectively. We recorded a pre-tax mark-to-market charge of $66 million and a pre-tax mark-to-market benefit of $38 million for the quarter and year-to-date periods ended September 27, 2014, respectively.

VIE deconsolidation

During the quarter ended July 4, 2015, a series of previously executed agreements between Kellogg's and a third party variable interest entity (VIE) were terminated resulting in our determination that we are no longer the primary beneficiary of the VIE.  Accordingly, we deconsolidated the financial statements of the VIE as of the end of the quarter.  As a result of the agreement terminations and related settlements, we recognized a loss of $19 million in Other income (expense), net for the year-to-date period ended October 3, 2015.

In connection with the deconsolidation that occurred during the quarter ended July 4, 2015, we derecognized all assets and liabilities of the VIE, including an allocation of a portion of goodwill from the U.S. Snacks operating segment, resulting in a $67 million non-cash gain, which was recorded within operating profit. 

Venezuela remeasurement and long-lived asset impairment

While we continue to qualify for participation in CENCOEX at the official rate, there has been a continued reduction in the level of U.S. dollars available to exchange, in part due to recent declines in the price of oil and the overall decline of the macroeconomic environment within the country. We have experienced an increase in the amount of time it takes to exchange bolivars for U.S. dollars through the CENCOEX exchange during the year. Given this economic backdrop, and upon review of U.S. dollar cash needs in our Venezuela operations as of the quarter ended July 4, 2015, we concluded that we were no longer able to obtain sufficient U.S. dollars on a timely basis through the CENCOEX exchange to support our Venezuela operations resulting in a decision to remeasure our Venezuela subsidiary's financial statements using the SIMADI rate. We have evaluated all of the facts and circumstances surrounding our Venezuelan business and determined that as of October 3, 2015 the SIMADI rate continues to be the appropriate rate to use for remeasuring our Venezuelan subsidiary's financial statements.

In connection with the change from the CENCOEX rate to the SIMADI rate that occurred in the quarter ended July 4, 2015, we evaluated the carrying value of our non-monetary assets for impairment and lower of cost or market adjustments. As a result of moving from the CENCOEX official rate to the SIMADI rate, we recorded pre-tax charges totaling $152 million in the quarter ended July 4, 2015, including $112 million in the Latin America operating segment and $40 million in the Corporate operating segment. Of the total charges, $100 million was recorded in COGS, $3 million was recorded in SGA, and $49 million was recorded in Other income (expense), net. These charges consist of $47 million related to the remeasurement of net monetary assets denominated in Venezuelan bolivar at the SIMADI exchange rate (recorded in Other income (expense), net), $56 million related to reducing inventory to the lower of cost or market (recorded in COGS) and $49 million related to the impairment of long-lived assets in Venezuela (recorded primarily in COGS).

As expected, during the quarter ended October 3, 2015, our Venezuelan subsidiary utilized assets that continued to be remeasured at historical exchange rates. This resulted in an additional unfavorable impact of $13 million in the Latin America operating segment, including an impact to COGS of $10 million and SGA of $3 million.

As of October 3, 2015, certain non-monetary assets related to our Venezuelan subsidiary continue to be remeasured at historical exchange rates.  As these assets are utilized by our Venezuelan subsidiary during the remainder of 2015 they will be recognized in the income statement at historical exchange rates resulting in an unfavorable impact of approximately $8 million during the remainder of 2015. Including this impact, the total impact of moving from the CENCOEX official rate to the SIMADI rate is anticipated to be $173 million on a pre-tax basis, or approximately $.43 on a fully-diluted EPS basis for 2015.

Foreign currency translation

We evaluate the operating results of our business on a currency-neutral basis. We determine currency-neutral operating results by dividing or multiplying, as appropriate, the current-period local currency operating results by the currency exchange rates used to translate our financial statements in the comparable prior-year period to determine what the current period U.S. dollar operating results would have been if the currency exchange rate had not changed from the comparable prior-year period.

 

SOURCE Kellogg Company



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