Kellogg Annual Report

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K e llo g g Co m pa n y
2009 annual report

strength of

The

®

Sustainable DePenDAble
11 Leadership Financials/Form 10-K Brands and Trademarks 1 Selected Financial Data 12 Financial Statements 27 ™

strength of

the



Table of ConTenTs 4 Financial Highlights 6 Letter to Shareowners

Management’s Discussion & Analysis 13 Notes to Financial Statements 31

Shareowner Information

and



PeRFoRmAnCe


FoR moRe thAn A CentuRy,
Kellogg Company has been dedicated to producing great-tasting, high-quality, nutritious foods that consumers around the world know and love. With 2009 sales of nearly $13 billion, Kellogg Company is the world’s leading producer of cereal, as well as a leading producer of convenience foods, including cookies, crackers, toaster pastries, cereal bars, frozen waffles and vegetarian foods. We market more than 1,500 products in over 180 countries, and our brands include such trusted names as Kellogg’s, Keebler, Special K, Pop-Tarts, Eggo, Cheez-It, Nutri-Grain, Rice Krispies, Mother’s, Morningstar Farms, Murray Sugar Free, Townhouse, All-Bran, Frosted Mini-Wheats, Club, Kashi, Bear Naked, Just Right, Guardian, Optivita, Chocos, Trésor, Frosties, Sucrilhos, Vector, Muslix and Zucaritas. Kellogg products are manufactured in 18 countries around the world. We enter 2010 with a rich history of success and a steadfast commitment to continue delivering sustainable and dependable growth in the future. Kellogg Company

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2009 Annual Report

®

strength of
Our peOple
Committed to excellence, passionate about achieving our goals, eagerly embracing new challenges

The



Our business mOdel
Resilient and proven, relevant in all economies, drives long-term health of the company

Our brands
Recognized and loved around the world, in strong categories, responsive to advertising and brand building ™

People. Passion. Pride.

TM

®

Our strategy
Focused and consistent, delivers sustainable and dependable performance ®


®

®

®



®


page 2

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2009 Annual Report

Kellogg Company

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page 3

strength of
2009
kelloggcompanyfinancialhighlights
NET SALES
(millions $)

the



k elloggcompan yfi nancialhighlights

OPERATING PROFIT

(millions $)

EPS

($) (diluted)

In 2009, we delivered strong, high-quality results while continuing to build an even stronger Kellogg Company for the future. $3.16
2.76 2.99
(dollars in millions, except per share data)

11,776 9,614 10,177 10,907

12,822 $12,575 1,681 1,750 1,766

1,868

1,953

$2,001

2009 $12,575 42.9 % $ 2,001 $ 1,212 $ 3.17 $ 3.16 $ 1,266 $ 1.43

2008(a) $ 12,822 41.9% $ 1,953 $ 1,148 $ $ $ $ 3.01 2.99 806 1.30

2007 $ 11,776 44.0% $ 1,868 $ 1,103 $ $ 2.79 2.76

2006 $ 10,907 44.2% $ 1,766 $ 1,004 $ $ $ $ 2.53 2.51 957 1.14 $

2005 $10,177 44.9% $ 1,750 980 $ 2.38 $ 2.36 $ 769

2004(a) $ 9,614 44.9% $ 1,681 $ 891 $ 2.16 $ 2.14 $ 950 $ 1.01

5-YR CAGR (b) 6% 4% 6% 8% 8% 6% 7%

2.14

2.36

2.51

Net sales Gross profit as a % of net sales Operating profit Net income attributable to Kellogg Company Basic per share amount Diluted per share amount Cash flow (net cash provided by operating activities, reduced by capital expenditures) (c) Dividends paid per share

5-year CAGR(a) 6%
’04 ’05 ’06 ’07 ’08 ’09 ’04 ’05
Net sales were strong again in 2009, despite the weak economy’s pressure on consumers.

5-year CAGR(a) 4%
’06 ’07 ’08 ’09 ’04 ’05
Once again, we increased operating profit dollars while continuing to invest in our business and cost-savings programs.

5-year CAGR(a) 8%
’06 ’07 ’08 ’09
2009 EPS increased 6% over 2008, the 8th consecutive year of growth.

$ 1,031 $ 1.20

$ 1.06

CASH FLOW (b) (millions $)

RETURN ON INVESTED CAPITAL (c) (%)

DIVIDENDS

($ per share)

$1,266
950 769 957 1,031 806 14.3 15.1 15.4 16.6 17.8

lonG-TeRM AnnuAl GRoWTh TARGeTS:

2009 DelIveRY target 2009 3%...
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