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): February 2, 2012
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
(Registrants 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 February 2, 2012, Kellogg Company issued a press release announcing financial results for the period ended December 31, 2011, 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 February 2, 2012 |
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: February 2, 2012 | /S/ RONALD L. DISSINGER | |||
Name: | Ronald L. Dissinger | |||
Title: | Senior Vice President and Chief Financial Officer |
EXHIBIT INDEX
99.1 | Press Release dated February 2, 2012 |
Exhibit 99.1
|
Kellogg Company News | |||
For release: | February 2, 2012 | |||
Analyst Contact: | Simon Burton, CFA (269) 961-6636 | |||
Media Contact: | Kris Charles (269) 961-3799 |
KELLOGG COMPANY REPORTS STRONG FOURTH-QUARTER 2011 RESULTS AND REAFFIRMS GUIDANCE FOR 2012
BATTLE CREEK, Mich. Kellogg Company (NYSE: K) today announced that fourth quarter reported net sales increased to $3.0 billion, or by 5.4 percent from the fourth quarter of 2010. Internal net sales, which exclude the effects of foreign currency translation, increased by 6.0 percent over the same period. Fourth-quarter 2011 operating profit was $397 million, a reported increase of 20.3 percent; internal operating profit increased by 20.5 percent.
Full-year 2011 reported net sales increased to $13.2 billion, or by 6.5 percent from the $12.4 billion posted in 2010. Internal net sales increased by 4.5 percent over the same period. Reported full-year 2011 operating profit was $2.0 billion, a decline of 0.7 percent; internal operating profit, which excludes the effects of foreign currency translation, declined by 2.9 percent. This anticipated decline was the result of the companys supply-chain initiatives, the reinstatement of incentive compensation costs, and continued high-levels of commodity inflation.
Full-year reported net earnings were $1.2 billion, or $3.38 per diluted share, an increase of 2.4% from full-year 2010 earnings of $3.30 per share. Full-year, currency-neutral 2011 earnings per share were unchanged from the previous year. Fourth quarter reported net earnings were $232 million, or $0.64 per diluted share, an increase of 25% from fourth quarter 2010 reported earnings of $0.51 per diluted share.
In 2011 we started to build a foundation upon which we can grow, said John Bryant, Kellogg Companys president and chief executive officer. We are pleased to have again posted very strong revenue growth and we have continued to make the investments necessary for future growth. Without the impact of the compensation costs and the supply-chain investment, our underlying operating profit increased in line with the companys long-term target of mid single-digit growth. We will further improve our supply chain in 2012, but, as importantly, we will also focus our efforts on increasing investment in brand building and launching even stronger innovation.
- more -
North America
Kellogg North America reported net sales growth of 5.6% in 2011 and 6.6% in the fourth quarter. Internal sales growth was 5.3% in 2011 and 6.7% in the fourth quarter. North America Retail Cereal posted internal net sales growth of 3.9% in 2011 and 1.5% in the fourth quarter. North America Retail Snacks posted internal net sales growth of 4.7% in 2011 and a strong 8.1% growth rate in the fourth quarter. The North America Frozen and Specialty Channels businesses delivered strong internal revenue growth: sales increased by 9.7% in 2011 and by 13.5% in the fourth quarter.
North American operating profit increased by 18% on both a reported and internal basis in the fourth quarter. Full-year North American reported operating profit declined by 0.8%; full-year internal operating profit declined by 1.2% as the result of the previously mentioned supply-chain initiatives, the reinstatement of incentive compensation costs, and continued high-levels of commodity inflation.
International
Kellogg International reported net sales growth of 8.3% in 2011 and 2.9% in the fourth quarter. Internal sales growth was 2.8% for the full year and 4.7% in the fourth quarter. The Latin American business posted internal sales growth of 10.3% in 2011; internal growth in the fourth quarter was 15.1 percent. Full-year growth was driven by strong underlying sales in our Mexican business. Internal net sales in our European business decreased at a 0.7% rate for the full year and by 1.3% in the fourth quarter. The Asia Pacific business posted internal sales growth of 4.1% for the full year and 8.2% in the fourth quarter.
Kellogg Internationals reported full-year operating profit increased by 4% and internal operating profit decreased by 2.4 percent. Kellogg Internationals fourth quarter reported and internal operating profit increased by 32.3% and 33.1%, respectively. Latin Americas internal operating profit declined by 9.9% in the fourth quarter. Europes fourth-quarter internal operating profit decreased by 11.2% due to a continued difficult trading environment in the United Kingdom and higher input costs. Asia Pacifics internal operating profit increased by 430.3% in the quarter driven by an impairment charge associated with our Chinese business that occurred in the fourth quarter of 2010. Without the impact of this charge, operating profit would have increased by approximately 50 percent.
- more -
- 2 -
Interest and Tax
Kelloggs interest expense totaled $55 million in the fourth quarter, an improvement from the same quarter in 2010. The reported effective tax rate for the quarter was 32 percent; the tax rate for the full year was 29 percent.
Cash flow
Cash flow, defined as cash from operating activities less capital expenditures, was slightly more than $1 billion for the full year. Kellogg repurchased approximately $800 million of shares during the year and has approximately $650 million of its $2.5 billion three-year share repurchase authorization remaining.
Kellogg Reaffirms 2012 Earnings Guidance
The Company reaffirmed its guidance for internal net sales growth, which is expected to increase by 4 to 5 percent, greater than long-term annual targets and reflecting both improvement in price/mix and a stronger innovation pipeline. Kellogg expects full-year operating profit to be unchanged or slightly greater as the company continues to invest in future growth. Full-year, currency-neutral earnings per share are anticipated to grow between 2% and 4% including the impact of continued investments in supply chain, an update of the companys SAP platform, an increase in the level of investment in brand building, and a benefit from the three-year $2.5 billion share repurchase program.
Bryant continued, We remain very pleased with our revenue growth and the underlying strength of our businesses. We participate in attractive categories and our brand-building and innovation programs are strong. While we recognize that 2011 and 2012 are transition years, we are confident that we are making the right investments in the company, and in future growth.
Conference Call / Webcast
Kellogg will host a conference call to discuss these results on February 2, 2012 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) 338-8373 in the U.S., and (973) 872-3000 outside
- more -
- 3 -
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 2011 sales of more than $13 billion, Kellogg Company (NYSE: K) is the worlds leading producer of cereal and a leading producer of snacks and frozen foods. Our well-loved brands produced in 18 countries and marketed in more than 180 countries include Cheez-It®, Coco Pops®, Corn Flakes®, Eggo®, Frosted Flakes®, Kashi®, Keebler®, Kelloggs®, Mini-Wheats®, Pop-Tarts®, Rice Krispies®, Special K®, and many more. To learn more about Kellogg Company, including our corporate responsibility initiatives and rich heritage, please visit 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 Companys strategy, and the Companys 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, anticipates, projects, estimates, implies, can, or words or phrases of similar meaning.
The Companys actual results or activities may differ materially from these predictions. The Companys 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
- more -
- 4 -
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 publicly update them.
- more -
- 5 -
Kellogg Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
(millions, except per share data)
Quarter ended | Year ended | |||||||||||||||
(Results are unaudited) |
December 31, 2011 |
January 1, 2011 |
December 31, 2011 |
January 1, 2011 |
||||||||||||
Net sales |
$ | 3,015 | $ | 2,860 | $ | 13,198 | $ | 12,397 | ||||||||
Cost of goods sold |
1,781 | 1,670 | 7,750 | 7,108 | ||||||||||||
Selling, general and administrative expense |
837 | 861 | 3,472 | 3,299 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating profit |
397 | 329 | 1,976 | 1,990 | ||||||||||||
Interest expense |
55 | 60 | 233 | 248 | ||||||||||||
Other income (expense), net |
(1 | ) | (9 | ) | (11 | ) | | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Income before income taxes |
341 | 260 | 1,732 | 1,742 | ||||||||||||
Income taxes |
109 | 75 | 503 | 502 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income |
$ | 232 | $ | 185 | $ | 1,229 | $ | 1,240 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) attributable to noncontrolling interests |
| (4 | ) | (2 | ) | (7 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income attributable to Kellogg Company |
$ | 232 | $ | 189 | $ | 1,231 | $ | 1,247 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Per share amounts: |
||||||||||||||||
Basic |
$ | .65 | $ | .51 | $ | 3.40 | $ | 3.32 | ||||||||
Diluted |
$ | .64 | $ | .51 | $ | 3.38 | $ | 3.30 | ||||||||
Dividends per share |
$ | .430 | $ | .405 | $ | 1.670 | $ | 1.560 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Average shares outstanding: |
||||||||||||||||
Basic |
358 | 368 | 362 | 376 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Diluted |
360 | 370 | 364 | 378 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Actual shares outstanding at period end |
357 | 366 | ||||||||||||||
|
|
|
|
- more -
- 6 -
Kellogg Company and Subsidiaries
SELECTED OPERATING SEGMENT DATA
(millions) |
||||||||||||||||
Quarter ended | Year ended | |||||||||||||||
(Results are unaudited) |
December 31, 2011 |
January 1, 2011 |
December 31, 2011 |
January 1, 2011 |
||||||||||||
Net sales |
||||||||||||||||
North America |
$ | 2,061 | $ | 1,933 | $ | 8,873 | $ | 8,402 | ||||||||
Europe |
494 | 500 | 2,334 | 2,230 | ||||||||||||
Latin America |
233 | 214 | 1,049 | 923 | ||||||||||||
Asia Pacific (a) |
227 | 213 | 942 | 842 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Consolidated |
$ | 3,015 | $ | 2,860 | $ | 13,198 | $ | 12,397 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Segment operating profit |
||||||||||||||||
North America (b) |
$ | 350 | $ | 296 | $ | 1,553 | $ | 1,565 | ||||||||
Europe |
51 | 57 | 338 | 364 | ||||||||||||
Latin America |
24 | 27 | 176 | 153 | ||||||||||||
Asia Pacific (a) |
27 | (8 | ) | 106 | 74 | |||||||||||
Corporate (b) |
(55 | ) | (43 | ) | (197 | ) | (166 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Consolidated |
$ | 397 | $ | 329 | $ | 1,976 | $ | 1,990 | ||||||||
|
|
|
|
|
|
|
|
(a) | Includes Australia, Asia and South Africa. |
(b) | Research and Development expense totaling $3 million for the quarter ended January 1, 2011 and $11 million for the year ended January 1, 2011 was reallocated to Corporate from North America. |
- more -
- 7 -
Kellogg Company and Subsidiaries
CONSOLIDATED STATEMENT OF CASH FLOWS
(millions)
Year ended | ||||||||
December 31, | January 1, | |||||||
(unaudited) |
2011 | 2011 | ||||||
Operating activities |
||||||||
Net income |
$ | 1,229 | $ | 1,240 | ||||
Adjustments to reconcile net income to operating cash flows: |
||||||||
Depreciation and amortization |
369 | 392 | ||||||
Deferred income taxes |
84 | 266 | ||||||
Other |
(22 | ) | 97 | |||||
Postretirement benefit plan contributions |
(192 | ) | (643 | ) | ||||
Changes in operating assets and liabilities |
127 | (344 | ) | |||||
|
|
|
|
|||||
Net cash provided by operating activities |
1,595 | 1,008 | ||||||
|
|
|
|
|||||
Investing activities |
||||||||
Additions to properties |
(594 | ) | (474 | ) | ||||
Other |
7 | 9 | ||||||
|
|
|
|
|||||
Net cash used in investing activities |
(587 | ) | (465 | ) | ||||
|
|
|
|
|||||
Financing activities |
||||||||
Net issuances (reductions) of notes payable |
189 | (1 | ) | |||||
Issuances of long-term debt |
895 | 987 | ||||||
Reductions of long-term debt |
(945 | ) | (1 | ) | ||||
Net issuances of common stock |
291 | 204 | ||||||
Common stock repurchases |
(798 | ) | (1,052 | ) | ||||
Cash dividends |
(604 | ) | (584 | ) | ||||
Other |
15 | 8 | ||||||
|
|
|
|
|||||
Net cash used in financing activities |
(957 | ) | (439 | ) | ||||
|
|
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents |
(35 | ) | 6 | |||||
|
|
|
|
|||||
Increase in cash and cash equivalents |
16 | 110 | ||||||
Cash and cash equivalents at beginning of period |
444 | 334 | ||||||
|
|
|
|
|||||
Cash and cash equivalents at end of period |
$ | 460 | $ | 444 | ||||
|
|
|
|
|||||
Supplemental financial data: |
||||||||
Cash Flow (operating cash flow less property additions) (a) |
$ | 1,001 | $ | 534 | ||||
|
|
|
|
(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. |
- more -
- 8 -
Kellogg Company and Subsidiaries
CONSOLIDATED BALANCE SHEET
(millions, except per share data)
December 31, | January 1, | |||||||
2011 | 2011 | |||||||
(unaudited) | * | |||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | 460 | $ | 444 | ||||
Accounts receivable, net |
1,188 | 1,190 | ||||||
Inventories: |
||||||||
Raw materials and supplies |
247 | 224 | ||||||
Finished goods and materials in process |
885 | 832 | ||||||
Deferred income taxes |
149 | 110 | ||||||
Other prepaid assets |
98 | 115 | ||||||
|
|
|
|
|||||
Total current assets |
3,027 | 2,915 | ||||||
Property, net of accumulated depreciation of $4,847 and $4,690 |
3,281 | 3,128 | ||||||
Goodwill |
3,623 | 3,628 | ||||||
Other intangibles, net of accumulated amortization of $49 and $47 |
1,454 | 1,456 | ||||||
Pension |
150 | 333 | ||||||
Other assets |
366 | 387 | ||||||
|
|
|
|
|||||
Total assets |
$ | 11,901 | $ | 11,847 | ||||
|
|
|
|
|||||
Current liabilities |
||||||||
Current maturities of long-term debt |
$ | 761 | $ | 952 | ||||
Notes payable |
234 | 44 | ||||||
Accounts payable |
1,189 | 1,149 | ||||||
Accrued advertising and promotion |
410 | 405 | ||||||
Accrued income taxes |
66 | 60 | ||||||
Accrued salaries and wages |
242 | 153 | ||||||
Other current liabilities |
411 | 421 | ||||||
|
|
|
|
|||||
Total current liabilities |
3,313 | 3,184 | ||||||
Long-term debt |
5,037 | 4,908 | ||||||
Deferred income taxes |
637 | 697 | ||||||
Pension liability |
560 | 265 | ||||||
Nonpension postretirement benefits |
188 | 214 | ||||||
Other liabilities |
404 | 425 | ||||||
Commitments and contingencies |
||||||||
Equity |
||||||||
Common stock, $.25 par value |
105 | 105 | ||||||
Capital in excess of par value |
522 | 495 | ||||||
Retained earnings |
6,721 | 6,122 | ||||||
Treasury stock, at cost |
(3,130 | ) | (2,650 | ) | ||||
Accumulated other comprehensive income (loss) |
(2,458 | ) | (1,914 | ) | ||||
|
|
|
|
|||||
Total Kellogg Company equity |
1,760 | 2,158 | ||||||
Noncontrolling interests |
2 | (4 | ) | |||||
|
|
|
|
|||||
Total equity |
1,762 | 2,154 | ||||||
|
|
|
|
|||||
Total liabilities and equity |
$ | 11,901 | $ | 11,847 | ||||
|
|
|
|
* | Condensed from audited financial statements. |
- more -
- 9 -
Kellogg Company and Subsidiaries
Analysis of net sales and operating profit performance
Fourth quarter of 2011 versus 2010 | ||||||||||||||||||||||||
(dollars in millions) |
North America |
Europe | Latin America |
Asia Pacific (a) |
Corporate | Consoli- dated |
||||||||||||||||||
2011 net sales |
$ | 2,061 | $ | 494 | $ | 233 | $ | 227 | $ | | $ | 3,015 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2010 net sales |
$ | 1,933 | $ | 500 | $ | 214 | $ | 213 | $ | | $ | 2,860 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
% change2011 vs. 2010: |
||||||||||||||||||||||||
Volume (tonnage) (b) |
-.1 | % | -4.3 | % | 3.8 | % | -1.0 | % | | -.6 | % | |||||||||||||
Pricing/mix |
6.8 | % | 3.0 | % | 11.3 | % | 9.2 | % | | 6.6 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Subtotalinternal business |
6.7 | % | -1.3 | % | 15.1 | % | 8.2 | % | | 6.0 | % | |||||||||||||
Foreign currency impact |
-.1 | % | .1 | % | -5.7 | % | -2.0 | % | | -.6 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total change |
6.6 | % | -1.2 | % | 9.4 | % | 6.2 | % | | 5.4 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
(dollars in millions) |
North America (c) |
Europe | Latin America |
Asia Pacific (a) |
Corporate (c) | Consoli- dated |
||||||||||||||||||
2011 operating profit |
$ | 350 | $ | 51 | $ | 24 | $ | 27 | $ | (55 | ) | $ | 397 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2010 operating profit |
$ | 296 | $ | 57 | $ | 27 | $ | (8 | ) | $ | (43 | ) | $ | 329 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
% change2011 vs. 2010: |
||||||||||||||||||||||||
Internal business |
18.0 | % | -11.2 | % | -9.9 | % | 430.3 | % | -28.4 | % | 20.5 | % | ||||||||||||
Foreign currency impact |
| % | .2 | % | -.8 | % | -6.6 | % | | -.2 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total change |
18.0 | % | -11.0 | % | -10.7 | % | 423.7 | % | -28.4 | % | 20.3 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(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. |
(c) | Research and Development expense totaling $3 million for the quarter ended January 1, 2011 was reallocated to Corporate from North America. |
- more -
- 10 -
Kellogg Company and Subsidiaries
Analysis of net sales and operating profit performance
Year ended 2011 versus 2010 | ||||||||||||||||||||||||
(dollars in millions) |
North America |
Europe | Latin America |
Asia Pacific (a) |
Corporate | Consoli- dated |
||||||||||||||||||
2011 net sales |
$ | 8,873 | $ | 2,334 | $ | 1,049 | $ | 942 | $ | | $ | 13,198 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2010 net sales |
$ | 8,402 | $ | 2,230 | $ | 923 | $ | 842 | $ | | $ | 12,397 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
% change - 2011 vs. 2010: |
||||||||||||||||||||||||
Volume (tonnage) (b) |
.7 | % | -3.1 | % | .8 | % | -.2 | % | | | % | |||||||||||||
Pricing/mix |
4.6 | % | 2.4 | % | 9.5 | % | 4.3 | % | | 4.5 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Subtotal - internal business |
5.3 | % | -.7 | % | 10.3 | % | 4.1 | % | | 4.5 | % | |||||||||||||
Foreign currency impact |
.3 | % | 5.3 | % | 3.4 | % | 7.7 | % | | 2.0 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total change |
5.6 | % | 4.6 | % | 13.7 | % | 11.8 | % | | 6.5 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
(dollars in millions) |
North America (c) |
Europe | Latin America |
Asia Pacific (a) |
Corporate (c) | Consoli- dated |
||||||||||||||||||
2011 operating profit |
$ | 1,553 | $ | 338 | $ | 176 | $ | 106 | $ | (197 | ) | $ | 1,976 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2010 operating profit |
$ | 1,565 | $ | 364 | $ | 153 | $ | 74 | $ | (166 | ) | $ | 1,990 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
% change - 2011 vs. 2010: |
||||||||||||||||||||||||
Internal business |
-1.2 | % | -12.5 | % | 8.7 | % | 32.9 | % | -18.4 | % | -2.9 | % | ||||||||||||
Foreign currency impact |
.4 | % | 5.4 | % | 6.1 | % | 10.3 | % | | 2.2 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total change |
-.8 | % | -7.1 | % | 14.8 | % | 43.2 | % | -18.4 | % | -.7 | % | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(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. |
(c) | Research and Development expense totaling $11 million for the year-to-date period ended January 1, 2011 was reallocated to Corporate from North America. |
- more -
- 11 -
Kellogg Company and Subsidiaries
Up-Front costs* and Impairment Charges
$ millions
Quarter ended December 31, 2011 | Year ended December 31, 2011 | |||||||||||||||||||||||
Cost of goods sold (a) |
Selling, general
and administrative expense |
Total | Cost of goods sold (a) |
Selling, general
and administrative expense |
Total | |||||||||||||||||||
2011 |
||||||||||||||||||||||||
North America |
$ | 5 | $ | 4 | $ | 9 | $ | 19 | $ | 23 | $ | 42 | ||||||||||||
Europe |
3 | 1 | 4 | 15 | 1 | 16 | ||||||||||||||||||
Latin America |
| | | | 1 | 1 | ||||||||||||||||||
Asia Pacific |
| | | 2 | | 2 | ||||||||||||||||||
Corporate |
| | | | | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total up-front costs |
$ | 8 | $ | 5 | $ | 13 | $ | 36 | $ | 25 | $ | 61 | ||||||||||||
China impairment (b) |
$ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended January 1, 2011 | Year ended January 1, 2011 | |||||||||||||||||||||||
Cost of goods sold |
Selling, general
and administrative expense |
Total | Cost of goods sold |
Selling, general
and administrative expense |
Total | |||||||||||||||||||
2010 |
||||||||||||||||||||||||
North America |
$ | 4 | $ | 2 | $ | 6 | $ | 17 | $ | 20 | $ | 37 | ||||||||||||
Europe |
3 | 2 | 5 | 14 | 3 | 17 | ||||||||||||||||||
Latin America |
1 | 1 | 2 | 3 | 1 | 4 | ||||||||||||||||||
Asia Pacific |
1 | | 1 | 3 | 2 | 5 | ||||||||||||||||||
Corporate |
| | | | 3 | 3 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total up-front costs |
$ | 9 | $ | 5 | $ | 14 | $ | 37 | $ | 29 | $ | 66 | ||||||||||||
China impairment (b) |
$ | 8 | $ | 21 | $ | 29 | $ | 8 | $ | 21 | $ | 29 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2011 Variance - better(worse) than 2010 |
|
|||||||||||||||||||||||
North America |
$ | (1 | ) | $ | (2 | ) | $ | (3 | ) | $ | (2 | ) | $ | (3 | ) | $ | (5 | ) | ||||||
Europe |
| 1 | 1 | (1 | ) | 2 | 1 | |||||||||||||||||
Latin America |
1 | 1 | 2 | 3 | | 3 | ||||||||||||||||||
Asia Pacific |
1 | | 1 | 1 | 2 | 3 | ||||||||||||||||||
Corporate |
| | | | 3 | 3 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total up-front costs |
$ | 1 | $ | | $ | 1 | $ | 1 | $ | 4 | $ | 5 | ||||||||||||
China impairment |
$ | 8 | $ | 21 | $ | 29 | $ | 8 | $ | 21 | $ | 29 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
* | Up-front costs are charges incurred by the Company which will result in future cash savings and/or reduced depreciation. They include expense associated with capital projects across our supply chain network. |
(a) | Includes expense associated with capital projects across our supply chain network incurred primarily in North America, totaling $5 million and $21 million for the quarter ended and year ended December 31, 2011, respectively. |
(b) | 2010 operating profit was impacted by $26 million. The difference of $3 million was allocated to a non-controlling interest shareholder. |
###
- 12 -
S'ME8^U_MVAF]S.>S *K,)1/C94$#U,SZF6LGWCOI
M+=;>[V:4;W&[).C3>$B,N.VL 222:F7^1]\3/CQWI/\P>YOE=
MM[$;DZ5Z+Z;I4S$.X:7(2X["3;CDS>[,WORDJL0W\8I\QLO:G6M8$-,LDOCR
M3%5+Z`8@]G.5^7]\EW;=N:4638]OL=3@ZZJ7+/XHT'55(X)!0`DZL"N#T:_O
M-_?GW:]LXO;[VV]BKRZL?<3F;?W:-K5U6646XAM(+%E?])X;RYW&,D2$+JME
MKVU(K)^2)Z'[2^1-9M/X5=39S:?755N6;9/7^/RF\<]N[/\`9-9/N>OH,%N]
MANFCP\^TXMT4$]&8,/(C-CA<3U$KEBD;\PML=UO3QAAIZ?R.L*GWF5R7RM9\G+V+[H?L#+N?+";?;^46YML;'SNV\+OO&;9BR>U^R-R8.
M`T_5?5E::/=-3@3@JC.58S>=HWDGK:.CDETQ0B.G]R=L7+?+7M1R0.<]]BBO
M>8[B&*2%)44&.21`RP15,E&0LWBS+0LBDA5':SDN3#<;;;3EGW7=(]=NMPTJ01/9V4P2.&9XH58RL\[45?!?K
M7M7^9/\`S`Z7L;M_?-1D*?:^:I/D3W]V!N;(EH,7UQU[N';LE7AJ.JR>0B3%
MT+T[TF&QL,;M%BJ"TB1-3T;((-Y8VO
G`SE8X]L5CZ8,BC\\>?6X'[R_P"O
MG^ZT@_Y]G\QC-=X=OYCX@=9Y;)XSJ#I/<.0PW:,*-1QP]A=O;>RLM+6Q5+TY
MGJ9-O]?5-(::F@>2(29,U$LT+&"D=,+_`'R]P)]ZWA^4]O=EVBR
X,C[M=0
M.-DL315C0F*V65@%$D@4#4^E5U/IUE:(J_#U&WW7_NY>P_W-A![?;7O-I<^\
M'-$>J6:\N(X;_=?HTDE?Z*P:=V2V@!FE9(!*R@DW$\OAHR@3\(OFOVO\#>XZ
MKN;J.CVUE,QEMH9+86X<-NO'R5^+S&UW_OC?O30;0NWR;;R9-?JFDW3V-\)6-/[1DC
MW-+?7Y]L*Q_\+IU<%\:_B7\>_B+LO^XW0'6>WMA8ZII\5%N#+45(D^ZMY5.'
MII*:BR>\MT5"OF-QU\7W$SH:B5HH'J)?"D2NR^Y;Y:Y2Y?Y1M#9[#;)`K!=;
M\9)"H-#(Y[F(JQ`)TJ6;2%J>N?/O![Z^['OUS%_6;W6WN]W:^1I3#'(Y%O:K
M,P9X[2V6D-M&2J`K$BZ@B:RQ4'JGGY.?\)W?C7WKW#E>UNO^T-X]%46[MP_Q
MW>?7NWMK;:W!M`&6FHHLA%L"%Y,!5;*ERM9!/63&I?,TR554_A@A@5(1$G,G
MW?N7]YW5]RVRZDL(Y7+/$L:R1@D"OA=R&,$U8@ZU!-%"J`HZ">RG][9[T>U?
MMW;\@\R;-MO,TNW6G@6=]
F-HY,?'0U6`VA-BL%AZ3:6W*MS-++%3QM5U)G*55541QP+%(?)
M'M?RSR,#/9*UQNK<9Y@C2+VZ2L5%`C0]Q(%7.HAW90H&'GWG/ON>]WWJ)X+7
MG:XM]NY1MEHFU[<;B&Q=Q(76XN8Y;B=KFY4:45Y&\.,(#!%"SRF3A\^?YG7Q
M=^#&!JL#V;D1OSM#.X*NGP71^WHA79C.4JH<)1UJQSR%9Q)ID7$S>/