8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): July 29, 2010

Kellogg Company

(Exact name of registrant as specified in its charter)

Delaware	1-4171	38-0710690
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

One Kellogg Square

Battle Creek, Michigan 49016-3599

(Address of principal executive offices, including zip code)

(269) 961-2000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

The information in this Current Report, including the attached Exhibit, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

On July 29, 2010, Kellogg Company issued a press release announcing financial results for the period ended July 3, 2010, a copy of which is attached as Exhibit 99.1.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit 99.1 Press Release dated July 29, 2010.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	KELLOGG COMPANY
Date: July 29, 2010	/s/ Ronald L. Dissinger
	Name:	Ronald L. Dissinger
	Title:	Senior Vice President and Chief Financial Officer

EXHIBIT INDEX

99.1 Financial results for the period ended July 3, 2010

EX-99.1

Exhibit 99.1

	Kellogg Company News
	For release:	July 29, 2010
	Analyst Contact:	Kathryn Koessel	(269) 961-9089
	Media Contact:	Kris Charles	(269) 961-3799

KELLOGG COMPANY REPORTS SECOND QUARTER 2010 RESULTS;

ADJUSTS 2010 EPS GUIDANCE TO 8 TO 10 PERCENT

BATTLE CREEK, Mich. – Kellogg Company (NYSE: K) today reported lower second quarter 2010 internal net sales, internal operating profit and currency-neutral earnings per share, reflecting weakness in the cereal category, lower Eggo sales, and the impact of the June 25 voluntary recall of select packages of breakfast cereals. The Company is reducing its 2010 internal net sales, internal operating profit, and currency-neutral earnings per share guidance.

Second quarter net earnings were $302 million, a 15 percent decline over the same quarter a year ago. Second quarter reported earnings per diluted share decreased 14 percent to $0.79 and decreased 11 percent on a currency-neutral basis. The estimated impact of the recall, including lost sales, reduced earnings per share by approximately $0.10 in the quarter and will reduce earnings per share by approximately $0.12 for the full year.

Reported net sales in the second quarter declined 5 percent to $3.1 billion. Internal net sales, excluding the effect of foreign currency translation, decreased 4 percent from the prior year. Total reported operating profit in the quarter decreased 13 percent to $483 million. Internal operating profit decreased 11 percent, driven primarily by the voluntary recall. Reported gross margin contracted 90 basis points to 42.6 percent in the quarter due to the impact of the recall.

“Our second quarter results reflect the deflationary environment in the cereal category, particularly in the US and UK, softer Eggo sales, and the voluntary cereal recall,” said David Mackay, Kellogg Company’s chief executive officer. “The second quarter performance was weaker than expected, and we have lowered our full-year guidance to reflect the cost of the recall and the difficult business environment. However, we are anticipating a stronger back half driven by increased innovation, reinvestment in our business, and gradual improvement in category trends.”

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North America

Kellogg North America posted a second quarter net sales decline of 5 percent on a reported basis and a 6 percent decline on an internal basis. The decline was primarily driven by 13 percent lower North America Retail Cereal internal net sales reflecting continued weakness in the cereal category, the impact of the voluntary cereal recall, and a reduction in customer inventories. Strong performance in Pop-Tarts and the wholesome snacks categories contributed to Retail Snacks internal net sales growth of 1 percent. The North America Frozen and Specialty Channels businesses posted an internal net sales decline of 9 percent, as a result of softer Eggo sales as we began to recover from our previous supply disruption.

North America operating profit declined 15 percent on a reported basis and 16 percent on an internal basis. The voluntary cereal recall adversely impacted North America operating profit by 13 percent.

International

Kellogg International posted a 5 percent decline in second quarter 2010 reported net sales. On an internal basis, excluding the effects of currency translation, net sales for Kellogg International were flat. Second quarter internal net sales in Europe were down 3 percent primarily due to weakness in the U.K. cereal business and lower results in the Russia snacks business. Latin America internal net sales rose 5 percent, and Asia Pacific internal net sales grew 3 percent.

Kellogg International operating profit was 7 percent lower on a reported basis. Operating profit was flat on an internal basis due to flat internal net sales combined with a rise in advertising expenditures.

Interest and Tax

In the second quarter 2010, Kellogg’s interest expense totaled $61 million, an improvement over the same quarter in 2009 as a result of lower debt. The second quarter effective tax rate was 29.7 percent.

Cash flow

Cash flow, defined as cash from operating activities less capital expenditures, was $446 million year-to-date. Reinforcing its commitment to returning cash to shareowners, Kellogg

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purchased $208 million of shares in the second quarter under its $2.5 billion three-year share repurchase authorization. For the first half of 2010, Kellogg repurchased $356 million of shares.

Kellogg Lowers 2010 Guidance

Kellogg continues to invest in its business to drive growth over the long term. Incorporating the challenges associated with the impact of the voluntary cereal recall and the current business environment, the Company lowered its 2010 guidance for full-year earnings per share growth on a currency-neutral basis to the range of 8 to 10 percent. The Company expects 2010 internal net sales growth to be in the flat to 1 percent range, and internal operating profit growth to be in the 4 to 6 percent range. Up-front costs for full-year 2010 are now expected to be approximately $0.12 per share compared with earlier estimates of $0.16 per share. Cash flow guidance was reduced to a range of $1.15 to $1.2 billion, in line with business results.

CEO Mackay concluded, “Our adjusted 2010 guidance reflects the challenges we faced in the first half as well as our commitment to reinvesting in our business for long-term sustainable growth. While the current environment remains challenging, our focus is on improving top-line growth, continuing to implement our cost savings and productivity initiatives, and reinvesting in our business. We remain committed to running the business the right way for the long term.”

Conference Call / Webcast

Kellogg will host a conference call to discuss these results on July 29, 2010 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 888-465-4043 in the U.S., and 201-604-5146 outside of the U.S. Members of the media and the public are invited to attend in a listen-only mode. Rebroadcast information is available at http://investor.kelloggs.com.

About Kellogg Company

With 2009 sales of nearly $13 billion, Kellogg Company is the world’s leading producer of cereal and a leading producer of convenience foods, including cookies, crackers, toaster pastries, cereal bars, fruit-flavored snacks, frozen waffles, and veggie foods. The Company’s brands include Kellogg’s^®, Keebler^®, Pop-Tarts^®, Eggo^®, Cheez-It^®, Nutri-Grain^®, Rice Krispies^®, BearNaked^®, Morningstar Farms^®, Famous Amos^®, Special K^®, All-Bran^®, Frosted Mini-Wheats^®, Club^® and

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Kashi^®. Kellogg products are manufactured in 18 countries and marketed in more than 180 countries around the world. For more information, visit the Kellogg Company web site at http://www.kelloggcompany.com.

Forward-Looking Statements Disclosure

This news release contains, or incorporates by reference, “forward-looking statements” with projections concerning, among other things, the Company’s strategy, 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, brand building, ROIC, working capital, growth, new products, innovation, cost reduction projects, and competitive pressures. Forward-looking statements include predictions of future results or activities and may contain the words “expects,” “believes,” “should,” “will,” “will deliver,” “anticipates,” “projects,” “estimates,” 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 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 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 publicly update them.

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Kellogg Company and Subsidiaries

CONSOLIDATED STATEMENT OF INCOME

(millions, except per share data)

	Quarter ended						Year-to-date period ended
(Results are unaudited)	July 3, 2010			July 4, 2009			July 3, 2010			July 4, 2009
Net sales	$	3,062		$	3,229		$	6,380		$	6,398
Cost of goods sold		1,757			1,825			3,650			3,692
Selling, general and administrative expense		822			851			1,610			1,624
Operating profit		483			553			1,120			1,082
Interest expense		61			67			126			134
Other income (expense), net		7			9			8			9
Income before income taxes		429			495			1,002			957
Income taxes		128			141			284			284
Earnings (loss) from joint ventures		—			(1	)		—			(1	)
Net income	$	301		$	353		$	718		$	672
Net income (loss) attributable to noncontrolling interests		(1	)		(1	)		(2	)		(3	)
Net income attributable to Kellogg Company	$	302		$	354		$	720		$	675
Per share amounts:
Basic	$	.80		$	.93		$	1.89		$	1.77
Diluted	$	.79		$	.92		$	1.88		$	1.76
Dividends per share	$	.3750		$	.3400		$	.7500		$	.6800
Average shares outstanding:
Basic		381			383			380			382
Diluted		384			383			384			383
Actual shares outstanding at period end								378			383

Kellogg Company and Subsidiaries

SELECTED OPERATING SEGMENT DATA

	Quarter ended						Year-to-date period ended
(millions)	July 3,			July 4,			July 3,			July 4,
(Results are unaudited)	2010			2009			2010			2009
Net sales
North America	$	2,064		$	2,176		$	4,339		$	4,387
Europe		560			617			1,166			1,174
Latin America		240			258			462			488
Asia Pacific (a)		198			178			413			349
Consolidated	$	3,062		$	3,229		$	6,380		$	6,398
Segment operating profit
North America	$	362		$	426		$	857		$	829
Europe		100			104			205			199
Latin America		47			57			92			106
Asia Pacific (a)		20			21			57			46
Corporate		(46	)		(55	)		(91	)		(98	)
Consolidated	$	483		$	553		$	1,120		$	1,082

(a) Includes Australia, Asia and South Africa.

Kellogg Company and Subsidiaries

CONSOLIDATED STATEMENT OF CASH FLOWS

(millions)

	Year-to-date period ended
	July 3,			July 4,
(unaudited)	2010			2009
Operating activities
Net income	$	718		$	672
Adjustments to reconcile net income to operating cash flows:
Depreciation and amortization		178			189
Deferred income taxes		(52	)		30
Other		73			(8	)
Postretirement benefit plan contributions		(36	)		(84	)
Changes in operating assets and liabilities		(288	)		(103	)
Net cash provided by operating activities		593			696
Investing activities
Additions to properties		(147	)		(161	)
Other		2			1
Net cash used in investing activities		(145	)		(160	)
Financing activities
Net issuances (reductions) of notes payable		110			(882	)
Issuances of long-term debt		—			745
Reductions of long-term debt		(1	)		—
Net issuances of common stock		148			18
Common stock repurchases (a)		(266	)		—
Cash dividends		(286	)		(260	)
Other		6			2
Net cash used in financing activities		(289	)		(377	)
Effect of exchange rate changes on cash and cash equivalents		(22	)		10
Increase in cash and cash equivalents		137			169
Cash and cash equivalents at beginning of period		334			255
Cash and cash equivalents at end of period	$	471		$	424
Supplemental Financial Data:
Cash Flow (operating cash flow less property additions) (b)	$	446		$	535

(a) Common stock repurchases in the year-to-date period ended July 3, 2010 were $356; $90 million of these purchases were paid in the third quarter of 2010.

(b) 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)

	July 3,			January 2,
	2010			2010
	(unaudited)			*
Current assets
Cash and cash equivalents	$	471		$	334
Accounts receivable, net		1,144			1,093
Inventories:
Raw materials and supplies		224			214
Finished goods and materials in process		661			696
Deferred income taxes		141			128
Other prepaid assets		151			93
Total current assets		2,792			2,558
Property, net of accumulated depreciation of $4,491 and $4,520		2,916			3,010
Goodwill		3,639			3,643
Other intangibles, net of accumulated amortization of $46 and $45		1,457			1,458
Pension		185			160
Other assets		396			371
Total assets	$	11,385		$	11,200
Current liabilities
Current maturities of long-term debt	$	954		$	1
Notes payable		158			44
Accounts payable		1,075			1,077
Accrued advertising and promotion		408			409
Accrued income taxes		12			33
Accrued salaries and wages		187			322
Other current liabilities		470			402
Total current liabilities		3,264			2,288
Long-term debt		3,915			4,835
Deferred income taxes		428			425
Pension liability		440			430
Other liabilities		954			947
Commitments and contingencies
Equity
Common stock, $.25 par value		105			105
Capital in excess of par value		481			472
Retained earnings		5,903			5,481
Treasury stock, at cost		(2,010	)		(1,820	)
Accumulated other comprehensive income (loss)		(2,096	)		(1,966	)
Total Kellogg Company equity		2,383			2,272
Noncontrolling interests		1			3
Total equity		2,384			2,275
Total liabilities and equity	$	11,385		$	11,200

* Condensed from audited financial statements.

Kellogg Company and Subsidiaries

Analysis of net sales and operating profit performance

Second quarter of 2010 versus 2009

(dollars in millions)	North America			Europe			Latin America			Asia Pacific (a)			Corporate			Consolidated
2010 net sales	$	2,064		$	560		$	240		$	198		$	—		$	3,062
2009 net sales	$	2,176		$	617		$	258		$	178		$	—		$	3,229
% change - 2010 vs. 2009:
Volume (tonnage) (b)		-5.3	%		-3.3	%		-6.1	%		3.9	%		—			-4.5	%
Pricing/mix		-.5	%		.8	%		10.8	%		-.5	%		—			.6	%
Subtotal - internal business		-5.8	%		-2.5	%		4.7	%		3.4	%		—			-3.9	%
Foreign currency impact		.7	%		-6.8	%		-12.0	%		8.5	%		—			-1.3	%
Total change		-5.1	%		-9.3	%		-7.3	%		11.9	%		—			-5.2	%
(dollars in millions)	North America			Europe			Latin America			Asia Pacific (a)			Corporate			Consolidated
2010 operating profit	$	362		$	100		$	47		$	20		$	(46	)	$	483
2009 operating profit	$	426		$	104		$	57		$	21		$	(55	)	$	553
% change - 2010 vs. 2009:
Internal business		-16.2	%		6.3	%		-9.9	%		-10.3	%		16.7	%		-11.1	%
Foreign currency impact		.9	%		-9.6	%		-7.1	%		9.8	%		—			-1.5	%
Total change		-15.3	%		-3.3	%		-17.0	%		-.5	%		16.7	%		-12.6	%

(a) Includes Australia, Asia, and South Africa.

(b) We measure the volume impact (tonnage) on revenues based on the stated weight of our product shipments.

Kellogg Company and Subsidiaries

Analysis of net sales and operating profit performance

Year-to-date 2010 versus 2009

(dollars in millions)	North America			Europe			Latin America			Asia Pacific (a)			Corporate			Consolidated
2010 net sales	$	4,339		$	1,166		$	462		$	413		$	—		$	6,380
2009 net sales	$	4,387		$	1,174		$	488		$	349		$	—		$	6,398
% change – 2010 vs. 2009:
Volume (tonnage) (b)		-2.1	%		-1.0	%		-3.7	%		-.7	%		—			-2.0	%
Pricing/mix		.1	%		.7	%		6.8	%		3.0	%		—			.9	%
Subtotal – internal business		-2.0	%		-.3	%		3.1	%		2.3	%		—			-1.1	%
Foreign currency impact		.9	%		-.4	%		-8.5	%		16.3	%		—			.8	%
Total change		-1.1	%		-.7	%		-5.4	%		18.6	%		—			-.3	%
(dollars in millions)	North America			Europe			Latin America			Asia Pacific (a)			Corporate			Consolidated
2010 operating profit	$	857		$	205		$	92		$	57		$	(91	)	$	1,120
2009 operating profit	$	829		$	199		$	106		$	46		$	(98	)	$	1,082
% change – 2010 vs. 2009:
Internal business		2.1	%		5.2	%		-5.0	%		.9	%		8.1	%		2.9	%
Foreign currency impact		1.2	%		-2.1	%		-8.2	%		23.1	%		—			.6	%
Total change		3.3	%		3.1	%		-13.2	%		24.0	%		8.1	%		3.5	%

(a) Includes Australia, Asia, and South Africa.

(b) We measure the volume impact (tonnage) on revenues based on the stated weight of our product shipments.

Kellogg Company and Subsidiaries

Up-Front Costs*

$ millions

	Quarter ended July 3, 2010								Year-to-date period ended July 3, 2010
	Cost of goods sold		Selling, general and administrative expense			Total			Cost of goods sold		Selling, general and administrative expense			Total
2010
North America	$	6	$	1		$	7		$	13	$	5		$	18
Europe		5		(1	)		4			8		—			8
Latin America		1		—			1			1		—			1
Asia Pacific		—		1			1			1		2			3
Corporate		—		2			2			—		2			2
Total	$	12	$	3		$	15		$	23	$	9		$	32
	Quarter ended July 4, 2009								Year-to-date period ended July 4, 2009
	Cost of goods sold		Selling, general and administrative expense			Total			Cost of goods sold		Selling, general and administrative expense			Total
2009
North America	$	18	$	11		$	29		$	35	$	11		$	46
Europe		9		—			9			10		—			10
Latin America		1		—			1			2		—			2
Asia Pacific		1		—			1			1		—			1
Corporate		—		—			—			—		—			—
Total	$	29	$	11		$	40		$	48	$	11		$	59
2010 Variance - better(worse) than 2009
North America	$	12	$	10		$	22		$	22	$	6		$	28
Europe		4		1			5			2		—			2
Latin America		—		—			—			1		—			1
Asia Pacific		1		(1	)		—			—		(2	)		(2	)
Corporate		—		(2	)		(2	)		—		(2	)		(2	)
Total	$	17	$	8		$	25		$	25	$	2		$	27

* Up-front costs are charges incurred by the Company which will result in future cash savings and/or reduced depreciation