-----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, Ia/1h9f86GmjrciV6odsZLWbUgqFpp0wiH8ookqvi+QpNbJFFnnGgsgLsNU4nwA6 08SXQoQDdfL4lgHmNEpVSA== 0000950124-03-002165.txt : 20030626 0000950124-03-002165.hdr.sgml : 20030626 20030626141624 ACCESSION NUMBER: 0000950124-03-002165 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20021231 FILED AS OF DATE: 20030626 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: 03758342 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 k77827e11vk.txt ANNUAL REPORT ON FORM 11-K FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002 COMMISSION FILE NUMBER 1-4171 THE KELLOGG COMPANY - BAKERY, CONFECTIONERY, TOBACCO WORKERS AND GRAIN MILLERS 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 BAKERY, CONFECTIONERY, TOBACCO WORKERS AND GRAIN MILLERS SAVINGS AND INVESTMENT PLAN CONTENTS FOR THE YEAR ENDED DECEMBER 31, 2002 AND THE TWO MONTHS ENDED DECEMBER 31, 2001
PAGE(S) REPORT OF INDEPENDENT AUDITORS.................................................................................1 FINANCIAL STATEMENTS Statement of Net Assets Available for Benefits....................................................................2 Statement of Changes in Net Assets Available for Benefits.........................................................3 Notes to Financial Statements...................................................................................4-8 SUPPLEMENTAL SCHEDULES Schedule I: Schedule of Assets (Held at End of Year)........................................................9
Note: Other schedules required by Section 2520.103-10 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act ("ERISA") of 1974 have been omitted because they are not applicable. REPORT OF INDEPENDENT AUDITORS To the Trustees and Participants of the Kellogg Company Bakery, Confectionery, Tobacco Workers and Grain Millers 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 Bakery, Confectionery, Tobacco Workers and Grain Millers Savings and Investment Plan (the "Plan") at December 31, 2002 and 2001, and the changes in net assets available for benefits for the year ended December 31, 2002 and the two months ended December 31, 2001, 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 schedule of assets (held at end of year) is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is 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. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. Battle Creek, Michigan June 13, 2003 1 KELLOGG COMPANY BAKERY, CONFECTIONERY, TOBACCO WORKERS AND GRAIN MILLERS SAVINGS AND INVESTMENT PLAN STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 2002 AND DECEMBER 31, 2001
2002 2001 ASSETS Receivables Employer contributions $ - $ 72,905 Employee contributions 179,221 Interest 8,018 ------------ ------------ Total receivables - 260,144 ------------ ------------ Investments Plan's interest in Master Trust 481,915,045 493,505,408 Loans to participants 6,893,580 7,002,483 ------------ ------------ Total investments 488,808,625 500,507,891 ------------ ------------ Total assets 488,808,625 500,768,035 ------------ ------------ LIABILITIES Accrued investment service fees 27,765 34,459 ------------ ------------ Total liabilities 27,765 34,459 ------------ ------------ Net assets available for benefits $488,780,860 $500,733,576 ============ ============
See accompanying notes to financial statements 2 KELLOGG COMPANY BAKERY, CONFECTIONERY, TOBACCO WORKERS AND GRAIN MILLERS SAVINGS AND INVESTMENT PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE FOR THE YEAR TWO MONTHS ENDED ENDED DECEMBER 31, 2002 DECEMBER 31, 2001 Contributions Employer $ 4,879,653 $ 814,470 Employee 12,131,802 2,007,008 Rollovers from other qualified plans 849,629 ------------- ------------- Total contributions 17,861,084 2,821,478 ------------- ------------- Earnings on Investments Plan's interest in income of Master Trust 6,827,742 11,641,598 Interest income 521,872 84,336 Trustee fees (89,648) (21,070) ------------- ------------- Total earnings on investments, net 7,259,966 11,704,864 ------------- ------------- Participant withdrawals (36,616,379) (7,960,760) Net transfers between Plans (457,387) ------------- ------------- Net increase (decrease) (11,952,716) 6,565,582 Net assets available for benefits at beginning of year 500,733,576 494,167,994 ------------- ------------- Net assets available for benefits at end of year $ 488,780,860 $ 500,733,576 ============= =============
See accompanying notes to financial statements 3 KELLOGG COMPANY BAKERY, CONFECTIONERY, TOBACCO WORKERS AND GRAIN MILLERS SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2002 AND 2001 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The Plan operates as a qualified defined contribution plan and was established under Section 401(k) of the Internal Revenue Code. The accounts of the Plan are maintained on the accrual basis. Expenses of administration are paid by the Plan sponsor, Kellogg Company. CHANGE IN PLAN YEAR On November 1, 2001, the Kellogg Company Bakery, Confectionery, Tobacco Workers and Grain Millers Savings and Investment Plan ("the Plan") was amended, resulting in a change in the Plan's year end to December 31. Previously, the Plan year began on November 1 and ended on October 31. As such, the Plan reported on a short Plan year for the two months ended December 31, 2001. 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 Plan's interest in income of Master Trust, which consists primarily of the realized gains or losses on the fair value of the Master Trust investments 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. RISKS AND UNCERTAINTIES The Plan provides for various investment options in several investment securities. Investment securities are exposed to various risks, such as interest rate, market and credit. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible the changes in risk in the near term would materially affect participants' account balances and the amounts reported in the statement of net assets available for benefits and the statement of changes in net assets available for benefits. 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 trustees appointed by Kellogg and employees represented by the Bakery, Confectionery, Tobacco Workers and Grain Millers Union. 4 KELLOGG COMPANY BAKERY, CONFECTIONERY, TOBACCO WORKERS AND GRAIN MILLERS SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2002 AND 2001 PLAN PARTICIPATION AND CONTRIBUTION Generally, all Kellogg Company hourly employees belonging to the Bakery, Confectionery, Tobacco Workers and Grain Millers Union Local Nos. 3-G, 50-G, 252-G, 274-G and 401-G are eligible to participate in the Plan. Subject to limitations prescribed by the Internal Revenue Service, participants may elect to contribute from 1 percent to 50 percent of their annual wages. Total deferrals in any taxable year may not exceed $11,000 (or $10,500 in 2001). Until September 29, 2002, employee contributions not exceeding 5 percent of wages were 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. Effective September 29, 2002 employee contributions are matched by Kellogg Company at a 100% rate on the first 3 percent and a 50 percent rate on the next 2 percent 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. 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 request an in-service withdrawal of all or a portion of certain types of contributions under standard in-service withdrawal rules. The withdrawal of any participant contributions which were not previously subject to income tax is restricted by Internal Revenue Service regulations. 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 or installment payments. If the account balance is $5,000 or less, the terminated participant will receive the account balance in a lump sum or installment payments. 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. 5 KELLOGG COMPANY BAKERY, CONFECTIONERY, TOBACCO WORKERS AND GRAIN MILLERS SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2002 AND 2001 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. 3. INCOME TAX STATUS The Plan administrator has received a favorable letter from the Internal Revenue Service dated November 19, 1997 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. The Plan administrator believes the Plan is designed and is currently being operated in compliance with the applicable requirements of the Internal Revenue Code. The Plan was submitted to the IRS in February 2002, for the purpose of requesting a favorable determination letter as to its on-going non-qualified status. 4. KELLOGG COMPANY MASTER 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 December 31, 2002 and 2001 and the changes in net assets for the year ended December 31, 2002 and the two months ended December 31, 2001 are as follows: 6 KELLOGG COMPANY BAKERY, CONFECTIONERY, TOBACCO WORKERS AND GRAIN MILLERS SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2002 AND 2001 4. KELLOGG COMPANY MASTER TRUST SCHEDULE OF ASSETS AND LIABILITIES FOR MASTER TRUST INVESTMENT ACCOUNTS
2002 2001 Cash/Equivalents Interest bearing cash $ 21,986,590 $ 20,270,332 --------------- --------------- Total cash/equivalents 21,986,590 20,270,332 --------------- --------------- Receivables 2,227,281 3,264,407 --------------- --------------- General Investments Long Term U.S. Gov't Securities 21,757,942 13,158,671 Short Term U.S. Gov't Securities 19,216,568 4,099,850 Corporate Debt - Long Term 4,944,928 11,246,043 Corporate Debt - Short Term 7,262,014 3,415,615 Corporate Stocks - Common 95,922,038 88,363,576 Commingled Funds 164,020,605 181,917,720 Shares of Registered Investment Company 100,512,901 79,622,761 Guaranteed Investment Contracts 674,814,554 524,256,792 --------------- --------------- Total Investments 1,088,451,550 906,081,028 --------------- --------------- Total investments 1,112,665,421 929,615,767 --------------- --------------- Payables Unsettled trades (6,909,233) (409,909) --------------- --------------- Total liabilities (6,909,233) (409,909) --------------- --------------- Net assets $ 1,105,756,188 $ 929,205,858 =============== =============== Percentage interest held by the Plan 43.6% 53.1%
7 KELLOGG COMPANY BAKERY, CONFECTIONERY, TOBACCO WORKERS AND GRAIN MILLERS SAVINGS AND INVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2002 AND 2001 4. KELLOGG COMPANY MASTER TRUST SCHEDULE OF CHANGES IN NET ASSETS OF MASTER TRUST INVESTMENT ACCOUNTS
FOR THE YEAR FOR THE ENDED TWO MONTHS ENDED DECEMBER 31, 2002 DECEMBER 31, 2001 Transfers from prior Trustees $ 211,752,913 $ - Earnings on investments Interest 34,075,591 5,560,100 Dividends 7,584,737 2,021,123 Net realized gain (loss) (14,486,361) 4,938,051 --------------- --------------- Total additions 238,926,880 12,519,274 --------------- --------------- Net transfer of assets out of investment account (25,570,131) (8,573,355) Fees and commissions (543,969) (82,194) --------------- --------------- Total distributions (26,114,100) (8,655,549) --------------- --------------- Change in unrealized appreciation (depreciation) (36,262,450) 13,125,161 --------------- --------------- Net change in assets 176,550,330 16,988,886 Net assets at beginning of year 929,205,858 912,216,972 --------------- --------------- Net assets at end of year $ 1,105,756,188 $ 929,205,858 =============== ===============
8 KELLOGG COMPANY BAKERY, CONFECTIONERY, TOBACCO WORKERS AND GRAIN MILLERS SAVINGS AND INVESTMENT PLAN SCHEDULE OF ASSETS (HELD AT END OF YEAR) DECEMBER 31, 2002 SCHEDULE I
(a) (b) (c) (e) DESCRIPTION OF INVESTMENT INCLUDING MATURITY IDENTITY OF ISSUE, BORROWER, LESSOR DATE, RATE OF INTEREST, COLLATERAL, PAR OR OR SIMILAR PARTY MATURITY VALUE CURRENT VALUE Loans to participants (interest rate $ 6,893,580 of 5.25% to 13.69%)
9 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: June 26, 2003 The Kellogg Company - Bakery, Confectionery, Tobacco Workers and Grain Millers Savings and Investment Plan By: /s/ John A. Bryant ------------------------------------- John A. Bryant Executive Vice President and Chief Financial Officer, Kellogg Company INDEX TO EXHIBITS TO FORM 11-K EXHIBIT NUMBER DESCRIPTION OF DOCUMENT 23 Consent of Independent Auditors. 99.1 Section 906 Certification by John Bryant. 99.2 Section 906 Certification by Carlos Gutierrez. EX-23 3 k77827exv23.txt CONSENT OF INDEPENDENT AUDITORS EXHIBIT 23 CONSENT OF INDEPENDENT AUDITORS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 33-27294) of Kellogg Company of our report dated June 13, 2003 relating to the financial statements of The Kellogg Company - Bakery, Confectionery, Tobacco Workers and Grain Millers Savings and Investment Plan, which appears in this Form 11-K. /s/ PricewaterhouseCoopers LLP Battle Creek, Michigan June 26, 2003 EX-99.1 4 k77827exv99w1.txt 906 CERTIFICATION OF CHIEF EXECUTIVE OFFICER EXHIBIT 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of The Kellogg Company - Bakery, Confectionery, Tobacco Workers And Grain Millers Savings And Investment Plan (the "Plan") on Form 11-K for the period ending December 31, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Carlos M. Gutierrez, Chairman of the Board, President and Chief Executive Officer of Kellogg Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Plan. /s/ Carlos M. Gutierrez ----------------------------- Carlos M. Gutierrez, Chairman of the Board, President and Chief Executive Officer June 26, 2003 EX-99.2 5 k77827exv99w2.txt 906 CERTIFICATION OF CHIEF FINANCIAL OFFICER EXHIBIT 99.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of The Kellogg Company - Bakery, Confectionery, Tobacco Workers and Grain Millers Savings And Investment Plan (the "Plan") on Form 11-K for the period ending December 31, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, John A. Bryant, Executive Vice President and Chief Financial Officer of Kellogg Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Plan. /s/ John A. Bryant ----------------------------- John A. Bryant Executive Vice President and Chief Financial Officer June 26, 2003 -----END PRIVACY-ENHANCED MESSAGE-----