Kellogg Company Reports Solid Results, Reaffirms Full-Year Guidance

Kellogg Company Reports Solid Results, Reaffirms Full-Year Guidance

BATTLE CREEK, Mich., May 2, 2013 (GLOBE NEWSWIRE) -- Kellogg Company (NYSE:K)
today announced solid results that were in-line with the company's
expectations. First quarter 2013 reported net sales increased by 12.2 percent
to $3.9 billion. Internal net sales*, which exclude the effects of foreign
currency translation, acquisitions, dispositions, and integration costs, rose
by 2.2 percent over the same period. First quarter 2013 operating profit was
$503 million, a reported decrease of 4.5 percent; underlying internal
operating profit*, which excludes the effects of foreign currency translation,
acquisitions, dispositions, mark-to-market accounting, and integration costs,
decreased by 5.8 percent. As expected, the decline in underlying internal
operating profit* was largely due to the recognition of considerable
cost-of-goods-sold inflation in the quarter. Results in the first quarter
included a majority of the inflation, net of cost savings, that the company
expects to recognize for the full year.

Reported earnings for the first quarter 2013 were $311 million, or $0.85 per
diluted share, a decline of 13 percent from the $0.98 per diluted share
reported in the first quarter of last year. Comparable first quarter 2013
earnings*, which exclude the impact of mark-to-market accounting and
integration costs associated with the acquisition of Pringles, were $0.99 per
share, in-line with the company's expectations. This result included a
negative impact of $0.03 per share from the Venezuelan devaluation.

"Results in the first quarter were broadly as we expected, and we're pleased
to have a solid start to the year," said John Bryant, Kellogg Company's
president and chief executive officer. "We saw good comparable revenue growth
in many regions around the world and the Pringles business continued to post
strong results. As a result, we're also pleased to report that we're on-track
to meet our guidance for the full-year."

* Internal sales growth, underlying internal operating profit growth,
underlying internal operating profit, and comparable earnings are all non-GAAP
financial measures. See the tables herein for important information regarding
these measures and a full reconciliation to the most comparable GAAP measure.

North America

Kellogg North America net sales were $2.6 billion in the first quarter, a
reported increase of 8.1 percent; internal net sales increased by 1.7 percent.
The U.S. Morning Foods segment posted internal net sales growth of 1.6
percent. Internal net sales in the U.S. Snacks segment declined by 1.7
percent. The U.S. Specialty Channels segment posted 3.4 percent internal net
sales growth in the quarter and the North America Other segment, which is
comprised of the U.S. Frozen Foods and Canadian businesses, achieved 7.4
percent internal sales growth. Reported operating profit in North America
increased by 1.2 percent; internal operating profit declined by 3.5 percent,
largely as the result of the cost-of-goods-sold inflation.

International

Reported net sales increased by 28.7 percent in Europe in the quarter;
internal net sales increased by 2.6 percent, primarily as the result of good
growth in the United Kingdom. In Latin America, reported net sales increased
by 13.7 percent and internal net sales increased by 7.4 percent. Reported net
sales in Asia Pacific increased by 14.7 percent and internal net sales
increased by 0.3 percent, although consumption increased at a faster rate.

Interest and Tax

Kellogg's interest expense was $60 million in the first quarter. The company
recognized a one-time, pre-tax benefit of $26 million in the first quarter of
2012 as the result of hedging activities associated with the acquisition of
the Pringles business; this accounted for a majority of the year-over-year
increase in interest expense. The reported effective tax rate in the first
quarter of 2013 was 28.4 percent.

Cash flow

Cash flow, a non-GAAP measure, defined as cash from operating activities less
capital expenditures, was $236 million for the quarter. This was lower than
the $277 million posted in the first quarter of 2012; the decline was the
result of differences in the timing of capital expenditures. Cash flow for the
year is still anticipated to be in a range between $1.1 and $1.2 billion.

Kellogg repurchased $44 million of shares during the first quarter, less than
option proceeds of $259 million.

                           Full-Year 2013 Guidance

The company reaffirmed its guidance for full-year reported net sales growth of
approximately seven percent. Earnings per share growth, excluding the impact
of mark-to-market accounting, is still expected to be between five and seven
percent. Integration costs associated with the acquisition of the Pringles
business are still expected to be in a range between $0.12 and $0.14 per
share. As a result, earnings excluding the impact of mark-to-market accounting
and integration costs are still anticipated to be between $3.82 and $3.91 per
share.

                        Share Repurchase Authorization

The company also announced that the Board of Directors approved a share
repurchase authorization of $1 billion, which expires in April of 2014. This
authorization supersedes the existing authorization and is intended to allow
the company to repurchase shares to offset the impact of proceeds from the
exercise of options through the end of 2013, and to begin the company's 2014
purchase plan.

                          Conference Call / Webcast

Kellogg will host a conference call to discuss these results on May 2, 2013 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 (877) 270-2148 in the U.S., and
(412) 902-6510 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

At Kellogg Company (NYSE:K), we are driven to enrich and delight the world
through foods and brands that matter. With 2012 sales of $14.2 billion,
Kellogg is the world's leading cereal company; second largest producer of
cookies and crackers; a leading producer of savory snacks; and a leading North
American frozen foods company. Every day, our well-loved brands nourish
families so they can flourish and thrive. These brands include Kellogg's®,
Keebler®, Special K®, Pringles®, Frosted Flakes®, Pop-Tarts®, Corn Flakes®,
Rice Krispies®, Kashi®, Cheez-It®, Eggo®, Coco Pops®, Mini-Wheats®, and many
more. To learn more about our responsible business leadership, foods that
delight and how we strive to make a difference in our communities around the
world, visit www.kelloggcompany.com.

                      Use of Non-GAAP Financial Measures

Certain financial measures have been provided on a non-GAAP (Generally
Accepted Accounting Principles) basis. Management believes the use of such
non-GAAP measures provides increased transparency and assists investors in
understanding the underlying operating performance of the company and its
segments and in the analysis of ongoing operating trends. All non-GAAP
financial measures have been reconciled with the most directly comparable GAAP
financial measures in the attachments provided with the release.

                    Forward-Looking Statements Disclosure

This news release contains, or incorporates by reference, "forward-looking
statements" with projections concerning, among other things, the integration
of the Pringles® business, 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,"
"anticipates," "projects," "estimates," "implies," "can," 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 ability to realize the anticipated benefits and
synergies from the Pringles acquisition in the amounts and at the times
expected, 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 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 update them publicly.

Kellogg Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
(millions, except per share data)

                                                          Quarter ended
                                                          March 30, March 31,
(Results are unaudited)                                    2013      2012
                                                                   
Net sales                                                  $3,861    $3,440
                                                                   
Cost of goods sold                                         2,468     $2,087
Selling, general and administrative expense                890       826
                                                                   
Operating profit                                           503       527
                                                                   
Interest expense                                           60        33
Other income (expense), net                                (7)      13
                                                                   
Income before income taxes                                436       507
Income taxes                                               124       156
Earnings (loss) from joint ventures                        (1)       --
Net income                                                 $311      $351
Net income (loss) attributable to noncontrolling           --       --
interests
Net income attributable to Kellogg Company                $311      $351
                                                                   
Per share amounts:                                                  
Basic                                                      $.86      $.98
Diluted                                                    $.85      $.98
                                                                   
Dividends per share                                        $.4400    $.4300
                                                                   
Average shares outstanding:                                          
Basic                                                      363       357
Diluted                                                    366       359
                                                                   
Actual shares outstanding at period end                    366       357


Kellogg Company and Subsidiaries
SELECTED OPERATING SEGMENT DATA
                                  
(millions)
                         Quarter ended
                         March 30, March 31,
(Results are unaudited)   2013      2012
                                  
Net sales                          
U.S. Morning Foods        $911      $897
U.S. Snacks               901       786
U.S. Specialty            379       348
North America Other       403       368
Europe                   692       538
Latin America            308       270
Asia Pacific              267       233
Consolidated              $3,861    $3,440
                                  
                                  
Operating profit                  
U.S. Morning Foods        $163      $153
U.S. Snacks               106       123
U.S. Specialty            78        71
North America Other       75        70
Europe                   71        70
Latin America            48        51
Asia Pacific              21        33
Total Reportable Segments 562       571
Corporate                (59)      (44)
Consolidated              $503      $527



Kellogg Company and Subsidiaries
CONSOLIDATED STATEMENT OF CASH FLOWS
(millions)
                                            Quarter ended
                                            March 30,     March 31,
(unaudited)                                  2013          2012
                                                          
Operating activities                                       
Net income                                   $311           $351
Adjustments to reconcile net income                        
tooperating cash flows:
Depreciation and amortization                113            95
Postretirement benefit plan expense          (4)            (5)
(benefit)
Deferred income taxes                        11             (54)
Other                                       23             (1)
Postretirement benefit plan contributions    (31)           (25)
Changes in operating assets and liabilities, (85)           (21)
net of acquisitions
Net cash provided by (used in) operating     338            340
activities
Investing activities                                       
Additions to properties                      (102)          (63)
Other                                        --           6
Net cash provided by (used in) investing     (102)          (57)
activities
                                                          
Financing activities                                       
Net reductions of notes payable              (226)          (178)
Issuances of long-term debt                  645            --
Reductions of long-term debt                 (749)          --
Net issuances of common stock                265            41
Common stock repurchases                    (44)          (63)
Cash dividends                               (160)          (153)
Other                                        9             (2)
Net cash provided by (used in) financing     (260)          (355)
activities
Effect of exchange rate changes on cash and  (5)           16
cash equivalents
Decrease in cash and cash equivalents        (29)           (56)
Cash and cash equivalents at beginning of    281            460
period
Cash and cash equivalents at end of period   $252           $404
                                                                           
Supplemental financial data:                               
Net cash provided by (used in) operating     $338           $340
activities
Additions to properties                      (102)          (63)
Cash Flow (operating cash flow less property $236           $277
additions) (a)
                                                          
(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.


Kellogg Company and Subsidiaries
CONSOLIDATED BALANCE SHEET
(millions, except per share data)
                                                     March 30,   December 29,
                                                     2013        2012
                                                     (unaudited) *
                                                                
Current assets                                                   
Cash and cash equivalents                             $252        $281
Accounts receivable, net                              1,588      1,454
Inventories:                                                     
Raw materials and supplies                            312        300
Finished goods and materials in process               972        1,065
Deferred income taxes                                 168        152
Other prepaid assets                                  170        128
                                                                
Total current assets                                  3,462       3,380
                                                                
Property, net of accumulated depreciation of $5,227   3,745       3,782
and $5,209
Goodwill                                              5,058       5,053
Other intangibles, net of accumulated amortization of 2,346       2,359
$55 and $53
Pension                                               163         145
Other assets                                          450         465
Total assets                                          $15,224     $15,184
                                                                
Current liabilities                                              
Current maturities of long-term debt                  $1          $755
Notes payable                                         838         1,065
Accounts payable                                      1,447       1,402
Accrued advertising and promotion                     459         517
Accrued income taxes                                  87         46
Accrued salaries and wages                            201         266
Other current liabilities                             535         472
                                                                
Total current liabilities                             3,568       4,523
                                                                
Long-term debt                                        6,717       6,082
Deferred income taxes                                 563         523
Pension liability                                     873         886
Nonpension postretirement benefits                    277         281
Other liabilities                                     384         409
                                                                
Commitments and contingencies                                    
                                                                
Equity                                                           
Common stock, $.25 par value                          105         105
Capital in excess of par value                        583         573
Retained earnings                                     5,749       5,615
Treasury stock, at cost                               (2,709)     (2,943)
Accumulated other comprehensive income (loss)         (947)       (931)
Total Kellogg Company equity                          2,781       2,419
Noncontrolling interests                              61          61
Total equity                                          2,842       2,480
Total liabilities and equity                          $15,224     $15,184
* Condensed from audited financial statements.


Kellogg Company and Subsidiaries
Reconciliation of Non-GAAP Amounts - Reported Operating Profit Growth to
Underlying Internal Operating Profit Growth
                                                        
                                                        Quarter ended
                                                        March 30, 2013
                                                        
Reported Operating Profit Growth                         -4.5%
Acquisitions/Dispositions                                7.6%
Integration costs                                        -3.8%
Foreign currency                                         -1.4%
Internal Operating Profit Growth^(a)                     -6.9%
Mark-to-market^(b)                                       -1.1%
Underlying Internal Operating Profit Growth^(c)          -5.8%
                                                        
(a) Internal operating profit growth excludes the impact of foreign currency,
and, if applicable, acquisitions, dispositions, and transaction and
integration costs associated with the acquisition of Pringles.The Company
believes the use of this non-GAAP measure provides increased transparency and
assists in understanding underlying operating performance.This non-GAAP
measure is reconciled to the directly comparable measure in accordance with
U.S. GAAP within this table.
                                                        
(b) Includes mark-to-market adjustments for pension plans and commodity
contracts as reflected in cost of goods sold.Actuarial gains/losses for
pension plans are recognized in the year they occur.In 2012, asset returns
exceeded expectations but discount rates fell almost 100 basis points for
pension plans resulting in a net loss.A portion of the 2012 pension
mark-to-market adjustment was capitalized as an inventoriable cost at the end
of 2012.This amount has been recorded in earnings in the current
quarter.Mark-to-market adjustments for commodities reflect the changes in the
fair value of contracts for the difference between contract and market prices
for the underlying commodities.The resulting gains/losses are recognized in
the quarter they occur.
                                                        
(c) Underlying internal operating profit growth excludes the impact of foreign
currency translation, pension and commodity mark-to-market adjustments, and,
if applicable, acquisitions, dispositions, and transaction and integration
costs associated with the acquisition of Pringles.The Company believes the
use of this non-GAAP measure provides increased transparency and assists in
understanding the underlying operating performance.This non-GAAP measure is
reconciled to the directly comparable measure in accordance with U.S. GAAP
within this table.


Kellogg Company and Subsidiaries
                                                                            
Analysis of net sales and operating profit performance
                                                                            
First quarter of 2013 versus 2012
                                                                            
(dollars in  U.S.    U.S.   U.S.      North   North           Latin   Asia    Corp-   Consoli-
millions)    Morning Snacks Specialty America America  Europe America Pacific orate   dated
             Foods                    Other
2013 net     $911  $901 $379    $403  $2,594 $692 $308  $267  $--  $3,861
sales
2012 net     $897  $786 $348    $368  $2,399 $538 $270  $233  $--  $3,440
sales
% change -
2013 vs.                                                                     
2012:
Volume
(tonnage)                                 1.2%     1.6%   .2%     5.0%    --    1.4%
(a)
Pricing/mix                               .5%      1.0%   7.2%    -4.7%   --    .8%
Subtotal -
internal     1.6%    -1.7%  3.4%      7.4%    1.7%     2.6%   7.4%    .3%     --    2.2%
business (b)
Acquisitions --%     16.3%  5.3%      3.2%    6.6%     27.3%  8.6%    20.8%   --    11.0%
(c)
Dispositions --%     --%    --%       --%     --%      --%    --%     -1.7%   --    -.1%
(d)
Integration  --%     --%    --%       -.2%    -.1%     --%    --%     -.4%    --    -.1%
impact (e)
Foreign
currency     --%     --%    --%       -.6%    -.1%     -1.2%  -2.3%   -4.3%   --    -.8%
impact
Total change 1.6%    14.6%  8.7%      9.8%    8.1%     28.7%  13.7%   14.7%   --    12.2%

                                                                            
(dollars in  U.S.    U.S.   U.S.      North   North           Latin   Asia    Corp-   Consoli-
millions)    Morning Snacks Specialty America America  Europe America Pacific orate   dated
             Foods                    Other
2013
operating    $163  $106 $78     $75   $422   $71  $48   $21   $(59) $503
profit
2012
operating    $153  $123 $71     $70   $417   $70  $51   $33   $(44) $527
profit
% change -
2013 vs.                                                                     
2012:
Internal     5.9%    -25.6% 6.4%      4.5%    -3.5%    .1%    -5.6%   -30.6%  -19.7%  -6.9%
business (b)
Acquisitions --%     15.3%  4.6%      3.9%    5.9%     14.2%  6.2%    15.2%   -3.1%   7.9%
(c)
Dispositions --%     --%    --%       --%     --%      --%    --%     -4.7%   --%     -.3%
(d)
Integration  --%     -3.0%  --%       -1.2%   -1.1%    -11.1% -.3%    -14.2%  -6.3%   -3.8%
impact (e)
Foreign
currency     --%     -%     --%       -.7%    -.1%     -2.0%  -7.6%   -1.7%   -1.0%   -1.4%
impact
Total change 5.9%    -13.3% 11.0%     6.5%    1.2%     1.2%   -7.3%   -36.0%  -30.1%  -4.5%
                                                                            
(a) The Company measures the volume impact (tonnage) on revenues based on the stated weight of
product shipments.
(b) Internal net sales and operating profit growth for 2013 exclude the impact of
acquisitions, divestitures, integration costs and the impact of currency.Internal net sales
and operating profit growth are non-GAAP financial measures which are reconciled to the
directly comparable measures in accordance with U.S. GAAP within these tables.
(c) Impact of results for the quarter ended March 30, 2013 from the acquisition of Pringles.
(d) Impact of results for the quarter ended March 30, 2013 from the divestiture of Navigable
Foods.
(e) Includes impact of integration costs associated with the Pringles acquisition.


Kellogg Company and Subsidiaries
Up-Front Costs*
$ millions
                                                              
                          Quarter ended March 30, 2013
                           Cost of goods  Selling, general and
                          sold           administrative         Total
                                          expense
2013                                                           
U.S. Morning Foods         $1           $2                   $3
U.S. Snacks                1             2                     3
U.S. Specialty             --            1                     1
North America Other        --            --                    --
Europe                     --            --                    --
Latin America              --            --                    --
Asia Pacific               6             --                    6
Corporate                  --            --                    --
Total                      $8           $5                   $13
                                                              
                          Quarter ended March 31, 2012
                           Cost of goods  Selling, general and
                          sold           administrative         Total
                                          expense
2012                                                           
U.S. Morning Foods         $2           $2                   $4
U.S. Snacks                2             1                     3
U.S. Specialty             --            --                    --
North America Other        --            1                     1
Europe                     1             --                    1
Latin America              --            --                    --
Asia Pacific               --            --                    --
Corporate                  --            --                    --
Total                      $5           $4                   $9
                                                                          
2013 Variance -                                                
better(worse) than 2012
U.S. Morning Foods         $1           $--                  $1
U.S. Snacks                1             (1)                   --
U.S. Specialty             --            (1)                   (1)
North America Other        --            1                     1
Europe                     1             --                    1
Latin America              --            --                    --
Asia Pacific               (6)           --                    (6)
Corporate                  --            --                    --
Total                      $(3)         $(1)                 $(4)
                                                              
* Up-front costs are charges incurred by the Company which will result
in future cash savings and/or reduced depreciation.


Kellogg Company and Subsidiaries
Transaction and Integration Costs*
$ millions
                                                                  
              Quarter ended March 30, 2013
                          Cost of   Selling, general
              Net Sales  goods     and                 Other          Total
                          sold      administrative      Income/Expense
                                    expense
2013                                                               
U.S. Snacks    $--      $--     $3                $--          $3
North America  1         --       --                 --            1
Other
Europe         --        3        5                  --            8
Asia Pacific   1         1        3                  --            5
Corporate      --        --       3                  --            3
Total          $2       $4      $14               $--          $20
                                                                  
              Quarter ended March 31, 2012
                          Cost of   Selling, general
              Net Sales  goods     and                 Other          Total
                          sold      administrative      Income/Expense
                                    expense
2012                                                               
U.S. Snacks    $--      $--     $--               $--          $--
North America  --        --       --                 --            --
Other
Europe         --        --       --                 --            --
Asia Pacific   --        --       --                 --            --
Corporate      --        --       --                 --            --
Total          $--      $--     $--               $--          $--

2013 Variance - better(worse) than                                   
2012
U.S. Snacks    $--      $--     $(3)              $--          $(3)
North America  (1)       --       --                 --            (1)
Other
Europe         --        (3)      (5)                --            (8)
Asia Pacific   (1)       (1)      (3)                --            (5)
Corporate      --        --       (3)                --            (3)
Total          $(2)     $(4)    $(14)             $--          $(20)
                                                                  
* Transaction and integration costs are charges incurred by the Company as a
direct result of the work performed for the acquisition of the Pringles
business.No transaction costs were incurred during the quarter ended March
30, 2013.


Kellogg Company and Subsidiaries
RECAST SEGMENT DATA
                                                              

2012         Quarter ended                        Year-to-date period ended
(millions)
             March    June 30, September December June 30, September December
            31,      2012     29,       29,      2012     29,       29,
             2012              2012      2012              2012      2012
                                                              
Net Sales                                                      
(Recast*)
U.S. Morning $897   $892   $903    $841   $1,789 $2,692  $3,533
Foods
U.S. Snacks  786     850     908      856     1,636   2,544    3,400
U.S.         348     252     264      257     600     864      1,121
Specialty
North
America      368     369     388      360     737     1,125    1,485
Other
North
America      2,399   2,363   2,463    2,314   4,762   7,225    9,539
Total
Europe       538     613     685      691     1,151   1,836    2,527
Latin        270     274     292      285     544     836      1,121
America
Asia Pacific 233     224     280      273     457     737      1,010
Consolidated $3,440 $3,474 $3,720  $3,563 $6,914 $10,634 $14,197
                                                              
                                                              
Operating
Profit                                                         
(Recast*)
U.S. Morning $153   $178   $134    $123   $331   $465    $588
Foods
U.S. Snacks  123     121     117      115     244     361      476
U.S.         71      56      62       52      127     189      241
Specialty
North
America      70      70      67       58      140     207      265
Other
North
America      417     425     380      348     842     1,222    1,570
Total
Europe       70      64      76       51      134     210      261
Latin        51      48      36       32      99      135      167
America
Asia Pacific 33      17      29       6       50      79       85
Total
Reportable   571     554     521      437     1,125   1,646    2,083
Segments
Corporate    (44)    (35)    (8)      (434)   (79)    (87)     (521)
Consolidated $527   $519   $513    $3     $1,046 $1,559  $1,562

*During the first quarter of 2013, the Kashi operating segment was
eliminated.The Kashi financial results have been recast between U.S. Morning
Foods and U.S. Snacks.

2012         Quarter ended                        Year-to-date period ended
(millions)
             March    June 30, September December June 30, September December
            31,      2012     29,       29,      2012     29,       29,
             2012              2012      2012              2012      2012
                                                              
Net Sales
(As                                                            
originally
reported)
U.S. Morning
Foods &      $941   $939   $946    $881   $1,880 $2,826  $3,707
Kashi
U.S. Snacks  742     803     865      816     1,545   2,410    3,226
U.S.         348     252     264      257     600     864      1,121
Specialty
North
America      368     369     388      360     737     1,125    1,485
Other
North
America      2,399   2,363   2,463    2,314   4,762   7,225    9,539
Total
Europe       538     613     685      691     1,151   1,836    2,527
Latin        270     274     292      285     544     836      1,121
America
Asia Pacific 233     224     280      273     457     737      1,010
Consolidated $3,440 $3,474 $3,720  $3,563 $6,914 $10,634 $14,197
                                                              
                                                              
Operating Profit (As                                            
originally reported)
U.S. Morning
Foods &      $157   $181   $135    $122   $338   $473    $595
Kashi
U.S. Snacks  119     118     116      116     237     353      469
U.S.         71      56      62       52      127     189      241
Specialty
North
America      70      70      67       58      140     207      265
Other
North
America      417     425     380      348     842     1,222    1,570
Total
Europe       70      64      76       51      134     210      261
Latin        51      48      36       32      99      135      167
America
Asia Pacific 33      17      29       6       50      79       85
Total
Reportable   571     554     521      437     1,125   1,646    2,083
Segments
Corporate    (44)    (35)    (8)      (434)   (79)    (87)     (521)
Consolidated $527   $519   $513    $3     $1,046 $1,559  $1,562


Kellogg Company and Subsidiaries
Reconciliation of Non-GAAP Amounts - Reported Operating Profit
to Comparable Operating Profit
                                                          
                                        Quarter ended
                                        March 30,          March 31,
                                         2013               2012
                                                          
Reported Operating Profit                $503.2           $526.7
Mark-to-market^(a)                       (53.7)            (50.6)
Underlying Operating Profit^(b)          $556.9           $577.3
Pringles integration costs               (20.1)            --
Comparable Operating Profit^(c)          $577.0           $577.3
                                                          
                                                          
(a) Includes mark-to-market adjustments for pension plans and commodity
contracts as reflected in cost of goods sold.Actuarial gains/losses for
pension plans are recognized in the year they occur.In 2012, asset returns
exceeded expectations but discount rates fell almost 100 basis points for
pension plans resulting in a net loss.A portion of the 2012 pension
mark-to-market adjustment was capitalized as an inventoriable cost at the end
of 2012.This amount has been recorded in earnings in the current quarter.In
2011, asset returns were lower than expected and discount rates declined.A
portion of the 2011 pension mark-to-market adjustment was capitalized as an
inventoriable cost at the end of 2011.This amount was recorded in earnings in
the first quarter of 2012.Mark-to-market adjustments for commodities reflect
the changes in the fair value of contracts for the difference between contract
and market prices for the underlying commodities.The resulting gains/losses
are recognized in the quarter they occur.
                                                          
(b) Underlying Operating Profit excludes the impact of mark-to-market
adjustments on pension plans and commodity contracts.The Company believes the
use of this non-GAAP measure provides increased transparency and assists in
understanding underlying operating performance.This non-GAAP measure is
reconciled to the directly comparable measure in accordance with U.S. GAAP
within this table.
                                                          
(c) Comparable Operating Profit is a non-GAAP measure that excludes the impact
of mark-to-market adjustments on pension plans and commodity contracts, and
the impact of integration costs related to the acquisition of the Pringles
business.


Kellogg Company and Subsidiaries
Reconciliation of Non-GAAP Amounts - Reported EPS
to Comparable EPS
                                                         
                                     Quarter ended
                                     March 30,            March 31,
                                      2013                 2012
                                                         
Reported EPS                          $0.85              $0.98
Mark-to-market^(a)                    (0.10)              (0.10)
Underlying EPS^(b)                    $0.95              $1.08
Pringles Integration costs            (0.04)              --
Comparable EPS^(c)                    $0.99              $1.08
                                                         
(a) Includes mark-to-market adjustments for pension plans and commodity
contracts as reflected in cost of goods sold.Actuarial gains/losses for
pension plans are recognized in the year they occur.In 2012, asset returns
exceeded expectations but discount rates fell almost 100 basis points for
pension plans resulting in a net loss.A portion of the 2012 pension
mark-to-market adjustment was capitalized as an inventoriable cost at the end
of 2012.This amount has been recorded in earnings in the current quarter.In
2011, asset returns were lower than expected and discount rates declined.A
portion of the 2011 pension mark-to-market adjustment was capitalized as an
inventoriable cost at the end of 2011.This amount was recorded in earnings in
the first quarter of 2012.Mark-to-market adjustments for commodities reflect
the changes in fair value of contracts for the difference between contract and
market prices for the underlying commodities.The resulting gains/losses are
recognized in the quarter they occur.
                                                         
(b) Underlying EPS is a non-GAAP measure that excludes the impact of pension
and commodity mark-to-market adjustments.
                                                         
(c) Comparable EPS is a non-GAAP measure that excludes the impact of
mark-to-market adjustments on pension plans and commodity contracts, and the
impact of integration costs related to the acquisition of the Pringles
business.

CONTACT: Analyst Contact:
         Simon Burton, CFA
         (269) 961-6636
        
         Media Contact:
         Kris Charles
         (269) 961-3799

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