-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VyBDajkX4au3L6iwJvda9JRKwCucZBV0+l2NTiQM/HYxAxaBu141VpYRr2X/hpcw bg+6h7DdQybZ8mhf0p0W4Q== 0000950124-02-001475.txt : 20020430 0000950124-02-001475.hdr.sgml : 20020430 ACCESSION NUMBER: 0000950124-02-001475 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20011031 FILED AS OF DATE: 20020429 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KELLOGG CO CENTRAL INDEX KEY: 0000055067 STANDARD INDUSTRIAL CLASSIFICATION: GRAIN MILL PRODUCTS [2040] IRS NUMBER: 380710690 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-04171 FILM NUMBER: 02623836 BUSINESS ADDRESS: STREET 1: ONE KELLOGG SQ STREET 2: P O BOX 3599 CITY: BATTLE CREEK STATE: MI ZIP: 49016-3599 BUSINESS PHONE: 6169612000 MAIL ADDRESS: STREET 1: ONE KELLOGG SQUARE STREET 2: P O BOX 3599 CITY: BATTLE CREEK STATE: MI ZIP: 49016-3599 11-K 1 k69127e11-k.txt ANNUAL REPORT ON FORM 11-K FORM 11-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR FISCAL YEAR ENDED OCTOBER 31, 2001 COMMISSION FILE NUMBER 1-4171 KELLOGG COMPANY SAVINGS AND INVESTMENT PLAN (Full Title of the Plan) -------------- KELLOGG COMPANY (Name of Issuer) ONE KELLOGG SQUARE BATTLE CREEK, MICHIGAN 49016-3599 (Principal Executive Office) KELLOGG COMPANY SAVINGS AND INVESTMENT PLAN INDEX TO FINANCIAL STATEMENTS AND ADDITIONAL INFORMATION - --------------------------------------------------------------------------------
PAGE REPORT OF INDEPENDENT ACCOUNTANTS 1 FINANCIAL STATEMENTS AS OF OCTOBER 31, 2001 AND 2000 AND FOR THE YEARS THEN ENDED: Statement of net assets available for benefits 2 Statement of changes in net assets available for benefits 3 Notes to financial statements 4-9 ADDITIONAL INFORMATION: Schedule of assets (held at end of year) - October 31, 2001 10 Schedule of reportable transactions - Year Ended October 31, 2001 11
REPORT OF INDEPENDENT ACCOUNTANTS To the Trustees and Participants of the Kellogg Company Savings and Investment Plan In our opinion, the accompanying statements of net assets available for benefits and the related statements of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of the Kellogg Company Savings and Investment Plan (the "Plan") at October 31, 2001 and 2000, and the changes in net assets available for benefits for the years then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Plan's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment purposes and reportable transactions are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. PricewaterhouseCoopers LLP Battle Creek, Michigan April 5, 2002 KELLOGG COMPANY 2 SAVINGS AND INVESTMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS - --------------------------------------------------------------------------------
OCTOBER 31, 2001 2000 ASSETS: Receivables: Employer contributions $ 5,608 $ - Employee contributions 22,449 Interest 934 ------------ ------------ Total receivables 28,991 - ------------ ------------ Investments: Plan's interest in Master Trust 425,504,045 472,394,424 Loans to participants 4,125,981 4,217,598 ------------ ------------ Total investments 429,630,026 476,612,022 ------------ ------------ Total assets 429,659,017 476,612,022 ------------ ------------ LIABILITIES: Benefits payable 17,041 Investment services fees 24,292 26,615 ------------ ------------ Total liabilities 24,292 43,656 ------------ ------------ Net assets available for benefits $429,634,725 $476,568,366 ============ ============
See accompanying notes to financial statements KELLOGG COMPANY 3 SAVINGS AND INVESTMENT PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS - --------------------------------------------------------------------------------
OCTOBER 31, 2001 2000 Contributions: Employer $ 5,959,618 $ 6,191,555 Employee 15,713,791 16,347,944 Rollovers from other qualified plans 749,021 10,457,407 ------------- ------------- Total contributions 22,422,430 32,996,906 ------------- ------------- Earnings on Investments: Plan's interest in (loss) income of Master Trust (18,700,675) 8,481,098 Interest income 378,683 383,476 Trustee fees (92,909) (90,814) Administrative fees (495,313) (151,307) ------------- ------------- Total (loss) earnings on investments, net (18,910,214) 8,622,453 ------------- ------------- Participant withdrawals (50,539,117) (74,776,476) Net transfers between Plans 93,260 ------------- ------------- Net decrease (46,933,641) (33,157,117) Net assets available for benefits at beginning of year 476,568,366 509,725,483 ------------- ------------- Net assets available for benefits at end of year $ 429,634,725 $ 476,568,366 ------------- -------------
See accompanying notes to financial statements KELLOGG COMPANY 4 SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The Kellogg Company Savings and Investment Plan ("the Plan") operates as a qualified defined contribution plan and was established under Section 401(k) of the Internal Revenue Code. Through October 31, 1999, the Plan was named the Kellogg Company Salaried Savings and Investment Plan. On November 1,1999, the Plan name was amended to be the Kellogg Company Savings and Investment Plan. The accounts of the Plan are maintained on the accrual basis. Expenses of administration are paid by the Plan. INVESTMENTS All investments are reported at current quoted market values except for guaranteed insurance contracts, which are reported at contract value and represent contributions made plus interest at the contract rate. These contracts are maintained in the Stable Value Fund of the Kellogg Company Master Trust. The Plan presents in the statement of changes in net assets available for benefits the net appreciation (depreciation) in the fair value of its investments which consists of the realized gains or losses and the unrealized appreciation (depreciation) on those investments. ALLOCATION OF NET INVESTMENT INCOME TO PARTICIPANTS Net investment income is allocated to participant accounts daily, in proportion to their respective ownership on that day. USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS The preparation of financial statements in conformity with generally accepted accounting principles requires the Plan's management to make estimates and assumptions that affect the reported amounts of net assets available for benefits at the date of the financial statements and changes in net assets available for benefits during the reporting period. Actual results could differ from those estimates. 2. PROVISIONS OF THE PLAN PLAN ADMINISTRATION The Plan is administered by the ERISA Administration Committee appointed by Kellogg Company. PLAN PARTICIPATION Generally, all salaried employees of Kellogg Company and its U.S. subsidiaries and employees of the Company's Worthington Foods subsidiary covered by a collective bargaining agreement are eligible to participate in the Plan. KELLOGG COMPANY 5 SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 2. PROVISIONS OF THE PLAN (CONTINUED) Subject to limitations prescribed by the Internal Revenue Service, participants may elect to contribute from 1 percent to 21 percent of their annual wages. Total deferrals in any taxable year may not exceed $10,500. Employee contributions not exceeding 5 percent of wages are matched by Kellogg Company at an 80 percent rate, with 12.5 percent of the Company match restricted for investment in the Kellogg Company stock fund. Employees may contribute to the Plan from their date of hire; however, the monthly contributions are not matched by the Company until the participant has completed one year of service. Participants of the Plan may elect to invest the contributions to their accounts as well as their account balances in various equity, bond, fixed income or Kellogg Company stock funds or a combination thereof in multiples of one percent. Following is a summary of the Plan's investment options: The BOND INDEX FUND invests only in top-rated securities, as well as certain mortgage-backed securities to compensate for yield. This fund seeks to meet or exceed the total return of the Lehman Brothers Government/Corporate Bond Index, a standard benchmark for this type of fund. The STABLE VALUE FUND invests primarily in investment contracts issued by a diversified group of insurance companies and other financial institutions. This fund seeks to provide a generally steady level of current income, plus stability of principal. The U.S. EQUITY INDEX FUND buys and holds securities in the same capitalization weight ratio as they appear in the S&P 500 Index. Securities are traded only when there is contribution or redemption activity, a change in the composition of the S&P 500 Index or the receipt of dividend income. The KELLOGG COMPANY STOCK FUND provides returns in the form of dividend income and stock price changes. Return is based solely on the Company's stock performance. The LARGE COMPANY EQUITY FUND is a value-oriented growth and income fund. The fund seeks investment opportunities in U.S. common stocks that are not overly recommended and are considered to be good values. The SMALL COMPANY EQUITY FUND invests primarily in common stocks of small, rapidly growing U.S. companies. The fund seeks to provide long-term growth of capital and income by investing in U.S.-based equity securities. The INTERNATIONAL EQUITY FUND invests in common and preferred stocks, convertibles, American Depositary Receipts, Global Depositary Receipts, bonds (generally rated "A" or better), government securities, nonconvertible preferred stocks, and cash. At least 65% of assets will be invested in issuers in Europe or the Pacific Basin. The CONSERVATIVE PRE-MIXED FUND is a combination of the Fixed Income Fund (10%), the Bond Index Fund (50%), the U.S. Equity Index Fund (20%), the International Equity Fund (10%) and the Small Company Equity Fund (10%). KELLOGG COMPANY 6 SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 2. PROVISIONS OF THE PLAN (CONTINUED) The AGGRESSIVE PRE-MIXED FUND is a combination of the U.S. Equity Index Fund (25%), the Large Company Equity Fund (25%), the International Equity Fund (20%) and the Small Company Equity Fund (30%). VESTING Participant account balances are fully vested. PARTICIPANT LOANS Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their account balance. Participants may have only one loan outstanding at any time. Loan transactions are treated as transfers between the Loan fund and the other funds. Loan terms range from 12 to 60 months. Interest is paid at a constant rate equal to one percent over the prime rate in the month the loan begins. Principal and interest are paid ratably through monthly payroll deductions. Loans that are considered to be uncollectible at year end result in the outstanding principal being considered a hardship withdrawal from the participant's plan account. PARTICIPANT DISTRIBUTIONS Participants may elect to withdraw all or a portion of their contributions made after October 31, 1978, plus related net investment income. The withdrawal of any participant contributions which were not previously subject to income tax is restricted by Internal Revenue Service regulations. Under certain circumstances and subject to approval by the Trustees, participants may request withdrawal of a portion of Company contributions and their own contributions made prior to November 1, 1978, including net investment income thereon. Participants who terminate employment before retirement, by reasons other than death or disability, may remain in the Plan or receive payment of their account balances in a lump sum. If the account balance is less than $5,000, the terminated participant will receive the account balance in a lump sum. Participants are eligible to retire from the Company at age 62, upon reaching 55 with 20 years of service, or after 30 years of service. Upon retirement, disability, or death, a participant's account balance may be received in a lump sum or installment payments. TERMINATION While the Company has expressed no intentions to do so, the Plan may be terminated at any time. In the event of termination of the Plan, the account of each participant will be fully vested. KELLOGG COMPANY 7 SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 3. INCOME TAX STATUS The Plan administrator has received a favorable letter from the Internal Revenue Service dated November 25, 1996 regarding the Plan's qualification under applicable income tax regulations as an entity exempt from federal income taxes. The Plan has been amended since receiving the determination letter. However, the Plan administrator believes the Plan is designed and is currently being operated in compliance with the applicable requirements of the Internal Revenue Code. 4. KELLOGG COMPANY MASTER TRUST Through May 31, 2001, assets of the Plan have been combined for investment purposes with assets of the Kellogg Company Bakery, Confectionery, Tobacco Workers and Grain Millers Savings and Investment Plan and Kellogg Company sponsored pension plans in the Kellogg Company Master Trust. On June 1, 2001, the assets of the Kellogg Company sponsored pension plans were transferred from the Kellogg Company Master Trust to the Kellogg Company Master Retirement Trust. The Plan has an undivided interest in the net assets held in the Kellogg Company Master Trust in which interests are determined on the basis of cumulative funds specifically contributed on behalf of the Plan adjusted for an allocation of income. Such income allocation is based on the Plan's funds available for investment during the year. Kellogg Company Master Trust net assets at October 31, 2001 and 2000 and the changes in net assets for the periods then ended are as follows: KELLOGG COMPANY 8 SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 4. KELLOGG COMPANY MASTER TRUST (CONTINUED) KELLOGG COMPANY MASTER TRUST SCHEDULE OF ASSETS AND LIABILITIES FOR MASTER TRUST INVESTMENT ACCOUNTS
PENSION PLANS SAVINGS & INVESTMENT PLANS TOTAL 10/31/01 10/31/00 10/31/01 10/31/00 10/31/01 10/31/00 ----------------------------- ----------------------------- ------------------------------ CASH/EQUIVALENTS: Non-Interest Bearing $ 0 $ 0 $ 0 $ 190,786 $ 0 $ 190,786 Interest Bearing Cash 23,743 $ 15,268,851 472,627 15,268,851 496,370 ----------------------------- ----------------------------- ------------------------------ TOTAL CASH/EQUIVALENTS 23,743 15,268,851 663,413 15,268,851 687,156 ----------------------------- ----------------------------- ------------------------------ RECEIVABLES 39,320,271 2,472,616 3,323,841 2,472,616 42,644,112 ----------------------------- ----------------------------- ------------------------------ GENERAL INVESTMENTS: Long Term U.S. Gov't Securities 194,205,671 20,021,549 10,019,273 20,021,549 204,224,944 Short Term U.S. Gov't Securities (28,334) 2,077,233 2,077,233 (28,334) Corporate Debt - Long Term 100,421,709 10,902,625 6,747,697 10,902,625 107,169,406 Corporate Debt - Short Term 2,758,280 2,758,280 Corporate Stocks - Preferred 902,900 902,900 Corporate Stocks - Convertible 1,060,539 1,060,539 Corporate Stocks - Common 651,736,336 334,188,529 454,948,112 334,188,529 1,106,684,448 Real Estate Pooled Funds 7,654,432 7,654,432 Value of Interest in Pooled Funds 24,333,746 14,015,544 38,349,290 Guaranteed Investment Contracts 531,282,331 499,923,163 531,282,331 499,923,163 ----------------------------- ----------------------------- ------------------------------ TOTAL INVESTMENTS 980,286,999 901,230,547 985,653,789 901,230,547 1,965,940,788 ----------------------------- ----------------------------- ------------------------------ TOTAL ASSETS 1,019,631,013 918,972,014 989,641,043 918,972,014 2,009,272,056 ----------------------------- ----------------------------- ------------------------------ PAYABLES Unsettled Trades (138,538,930) (6,755,042) (347,078) (6,755,042) (138,886,008) Investment Service Fees (983,952) (983,952) ----------------------------- ----------------------------- ------------------------------ TOTAL LIABILITIES (139,522,882) (6,755,042) (347,078) (6,755,042) (139,869,960) ----------------------------- ----------------------------- ------------------------------ NET ASSETS $ 0 $ 880,108,131 $912,216,972 $989,293,965 $912,216,972 $1,869,402,096 ============================= ============================= ============================== Percentage Interest held by the Plan 46.6% 47.8% 46.6% 25.3%
KELLOGG COMPANY 9 SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 4. KELLOGG COMPANY MASTER TRUST (CONTINUED) KELLOGG COMPANY MASTER TRUST SCHEDULE OF INCOME AND EXPENSES, CHANGES IN NET ASSETS AND NET INCREASE (DECREASE) IN NET ASSETS OF MASTER TRUST INVESTMENT ACCOUNTS
PENSION PLANS SAVINGS & INVESTMENT PLANS TOTAL 10/31/01 10/31/00 10/31/01 10/31/00 10/31/01 10/31/00 ------------------------------- ------------------------------- --------------------------------- Transfer of Assets Into Investment Account $ 36,648,054 $ 43,770,563 $ 714,055,873 $ 634,660,118 $ 750,703,927 $ 678,430,681 Earnings on Investments Interest 8,833,924 13,452,506 32,788,527 34,233,989 41,622,451 47,686,495 Dividends 2,952,001 4,332,396 4,335,875 4,300,646 7,287,876 8,633,042 Corporate Actions 247,797 247,797 Pooled Fund Income 221,702 471,987 221,702 471,987 Miscellaneous (97,541) (57,530) (3) (97,541) (57,533) Net Realized Gain/(Loss) 32,433,806 75,156,499 (7,923,772) 23,830,925 24,510,034 98,987,424 ------------------------------- ------------------------------- --------------------------------- TOTAL ADDITIONS 80,991,946 137,374,218 743,256,503 697,025,675 824,248,449 834,399,893 ------------------------------- ------------------------------- --------------------------------- Transfer of Assets Out of Investment Account (68,736,883) (98,028,663) (771,745,394) (800,395,482) (840,482,277) (898,424,145) Fees and Commissions (909,924) (3,257,254) (502,897) (541,627) (1,412,821) (3,798,881) Transfers To Kellogg Company Master Retirement Trust (839,885,857) (839,885,857) ------------------------------- ------------------------------- --------------------------------- TOTAL DISTRIBUTIONS (909,532,664) (101,285,917) (772,248,291) (800,937,109) (1,681,780,955) (902,223,026) ------------------------------- ------------------------------- --------------------------------- Change in Unrealized Appreciation (51,567,413) (34,599,231) (48,085,205) (45,648,925) (99,652,618) (80,248,156) ------------------------------- ------------------------------- --------------------------------- NET CHANGE IN ASSETS (880,108,131) 1,489,070 (77,076,993) (149,560,359) (957,185,124) (148,071,289) Net Assets at Beginning of Year 880,108,131 878,619,061 989,293,965 1,138,854,324 1,869,402,096 2,017,473,385 ------------------------------- ------------------------------- --------------------------------- Net Assets at End of Year $ 0 $ 880,108,131 $ 912,216,972 $ 989,293,965 $ 912,216,972 $1,869,402,096 =============================== =============================== =================================
KELLOGG COMPANY 10 SAVINGS AND INVESTMENT PLAN SCHEDULE OF ASSETS (HELD AT END OF YEAR) - OCTOBER 31, 2001 - --------------------------------------------------------------------------------
MARKET SECURITY DESCRIPTION COST VALUE Loans to participants $ - $ 4,125,981 ---------------- ---------------
KELLOGG COMPANY 11 SAVINGS AND INVESTMENT PLAN SCHEDULE OF REPORTABLE TRANSACTIONS - YEAR ENDED OCTOBER 31, 2001 - --------------------------------------------------------------------------------
CURRENT VALUE AT TRANSACTION DATE ----------------------------------- COST OF NET NET NET SECURITIES REALIZED IDENTITY OF ISSUE PURCHASE PRICE SALES PRICE SOLD GAIN None
12 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. Date: April 29, 2002 Kellogg Company Savings and Investment Plan /s/ John A. Bryant ------------------------------------- John A. Bryant Senior Vice President and Chief Financial Officer, Kellogg Company 13 EXHIBIT PAGE 23 Consent of Independent Accountants 14 EX-23 3 k69127ex23.txt CONSENT OF INDEPENDENT ACCOUNTANTS 14 EXHIBIT 23 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 33-27293) of Kellogg Company of our report dated April 5, 2002 relating to the financial statements of Kellogg Company Savings and Investment Plan, which appears in this Form 11-K. /s/ PricewaterhouseCoopers LLP Battle Creek, Michigan April 29, 2002 -----END PRIVACY-ENHANCED MESSAGE-----