Kellogg (K) 10-Q/A 2 Sep 09 2009 Q2 Quarterly report (amended) Financial data

CONSOLIDATED BALANCE SHEET

CONSOLIDATED BALANCE SHEET (USD $)
In Millions	Jul. 04, 2009	Jan. 03, 2009
Current assets
Cash and cash equivalents	$424	$255
Accounts receivable, net	1,191	1,100	[1]
Inventories:
Raw materials and supplies	223	203	[1]
Finished goods and materials in process	610	694	[1]
Deferred income taxes	105	112	[1]
Other prepaid assets	162	157	[1]
Total current assets	2,715	2,521	[1]
Property, net of accumulated depreciation of $4,405 and $4,171	2,977	2,933	[1]
Goodwill	3,639	3,637	[1]
Other Intangibles, net of accumulated amortization of $43 and $42	1,460	1,461	[1]
Pension	169	96	[1]
Other assets	302	298	[1]
Total assets	11,262	10,946	[1]
Current liabilities
Current maturities of long-term debt	1	1	[1]
Notes payable	508	1,387	[1]
Accounts payable	1,052	1,135	[1]
Accrued advertising and promotion	410	357	[1]
Accrued income taxes	0	51	[1]
Accrued salaries and wages	231	280	[1]
Other current liabilities	374	341	[1]
Total current liabilities	2,576	3,552	[1]
Long-term debt	4,808	4,068	[1]
Deferred income taxes	330	300	[1]
Pension liability	621	631	[1]
Other liabilities	955	940	[1]
Commitments and contingencies	0	0	[1]
Equity
Common stock, $.25 par value	105	105	[1]
Capital in excess of par value	441	438	[1]
Retained earnings	5,246	4,836	[1]
Treasury stock, at cost	(1,755)	(1,790)	[1]
Accumulated other comprehensive income (loss)	(2,069)	(2,141)	[1]
Total Kellogg Company equity	1,968	1,448	[1]
Noncontrolling interests	4	7	[1]
Total equity	1,972	1,455	[1]
Total liabilities and equity	$11,262	$10,946	[1]
[1]* Condensed from audited financial statements.

CONSOLIDATED BALANCE SHEET [Par

CONSOLIDATED BALANCE SHEET [Parentheticals] (USD $)
In Millions	Jul. 04, 2009	Jan. 03, 2009
Accumulated amortization (AccumulatedAmortization)
Accumulated amortization	$43	$42	[1]
Accumulated depreciation (AccumulatedDepreciation)
Accumulated depreciation	$4,405	$4,171	[1]
Common stock (CommonStock)
Common stock, par value per share	0.25	0.25	[1]
[1]* Condensed from audited financial statements.

CONSOLIDATED STATEMENT OF INCOM

CONSOLIDATED STATEMENT OF INCOME (USD $)
In Millions	3 Months Ended Jul. 04, 2009	3 Months Ended Jun. 28, 2008	6 Months Ended Jul. 04, 2009	6 Months Ended Jun. 28, 2008
Net sales	$3,229	$3,343	$6,398	$6,601
Cost of goods sold	1,825	1,899	3,692	3,793
Selling, general and administrative expense	851	914	1,624	1,733
Operating profit	553	530	1,082	1,075
Interest expense	67	77	134	159
Other income (expense), net	9	(8)	9	(19)
Income before income taxes	495	445	957	897
Income taxes	141	133	284	270
Earnings (loss) from joint ventures	(1)	0	(1)	0
Net income	353	312	672	627
Net income (loss) attributable to noncontrolling interests	(1)	0	(3)	0
Net income attributable to Kellogg Company	$354	$312	$675	$627
Per share amounts:
Basic	0.93	0.82	1.77	1.64
Diluted	0.92	0.82	1.76	1.63
Dividends per share	0.34	0.31	0.68	0.62
Average shares outstanding:
Basic	383	379	382	382
Diluted	383	382	383	386
Actual shares outstanding at period end			383	379

CONSOLIDATED STATEMENT OF SHARE

CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY (USD $)
In Millions	Capital in excess of par value (AdditionalPaidInCapitalMember)	Retained earnings (RetainedEarningsMember)	Treasury stock	Accumulated other comprehensive income (loss)	Common stock (CommonStockMember)	Total Kellogg Company equity (ParentMember)	Noncontrolling interest		Total comprehensive income (loss)	Total
Shares, beginning balance at Dec. 29, 2007			29		419
Beginning balance at Dec. 29, 2007	$388	$4,217	($1,357)	($827)	$105	$2,526	$2	[1]		$2,528
Shares, beginning balance at Dec. 29, 2007			29		419
Beginning balance at Dec. 29, 2007	388	4,217	(1,357)	(827)	105	2,526	2	[1]		2,528
Common stock issued, value					0
Common stock issued, shares					0
Common stock repurchases			(650)			(650)				(650)
Common stock repurchases, shares			13
Business acquisitions							7	[1]		7
Net income (loss)		1,148				1,148	(2)	[1]	1,146	1,146
Dividends		(495)				(495)				(495)
Other comprehensive income (loss)				(1,314)		(1,314)			(1,314)	(1,314)
Stock compensation	51					51				51
Stock options exercised and other	(1)	(34)	217			182				182
Stock options exercised and other, shares			(5)
Ending balance at Jan. 03, 2009	438	4,836	(1,790)	(2,141)	105	1,448	7	[1]	(168)	1,455	[2]
Shares, ending balance at Jan. 03, 2009			37		419
Common stock issued, value					0
Common stock issued, shares					0
Net income (loss)		675				675	(3)	[1]	672	672
Dividends		(260)				(260)				(260)
Other comprehensive income (loss)				72		72			72	72
Stock compensation	22					22				22
Stock options exercised and other	(19)	(5)	35			11				11
Stock options exercised and other, shares			(1)
Ending balance at Jul. 04, 2009	$441	$5,246	($1,755)	($2,069)	$105	$1,968	$4	[1]	$744	$1,972
Shares, ending balance at Jul. 04, 2009			36		419
[1](a) Refer to Note 1 for further information.
[2]* Condensed from audited financial statements.

CONSOLIDATED STATEMENT OF CASH

CONSOLIDATED STATEMENT OF CASH FLOWS (USD $)
In Millions	6 Months Ended Jul. 04, 2009	6 Months Ended Jun. 28, 2008
Operating activities
Net income (loss)	$672	$627
Adjustments to reconcile net income to operating cash flows:
Depreciation and amortization	189	182
Deferred income taxes	30	(3)
Other	(8)	71
Postretirement benefit plan contributions	(84)	(48)
Changes in operating assets and liabilities:
Trade receivables	(192)	(207)
Inventories	64	(10)
Accounts payable	(84)	106
Accrued income taxes	62	0
Accrued interest	(2)	2
Accrued and prepaid advertising, promotion and trade allowances	60	3
Accrued salaries and wages	(60)	(95)
Exit plan - related reserves	11	0
All other current assets and liabilities	38	61
Net cash provided by operating activities	696	689
Investing activities
Additions to properties	(161)	(179)
Acquisitions of businesses, net of cash acquired	0	(133)
Property disposals	1	10
Net cash used in investing activities	(160)	(302)
Financing activities
Net issuances (reductions) of notes payable	(882)	152
Issuances of long-term debt	745	756
Reductions of long-term debt	0	(465)
Issuances of common stock	18	61
Common stock repurchases	0	(650)
Cash dividends	(260)	(236)
Other	2	9
Net cash used in financing activities	(377)	(373)
Effect of exchange rate changes on cash and cash equivalents	10	18
Increase in cash and cash equivalents	169	32
Cash and cash equivalents at beginning of period	255	524
Cash and cash equivalents at end of period	$424	$556

Accounting Policies

Accounting Policies
	6 Months Ended Jul. 04, 2009
Accounting policies
Accounting policies [Text Block]	Note 1 Accounting policies Basis of presentation The unaudited interim financial information of Kellogg Company (the Company) included in this report reflects normal recurring adjustments that management believes are necessary for a fair statement of the results of operations, financial position, equity and cash flows for the periods presented. This interim information should be read in conjunction with the financial statements and accompanying notes contained on pages 27 to 54 of the Company's 2008 Annual Report on Form 10-K. The condensed balance sheet data at January 3, 2009 was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States. The results of operations for the quarterly period ended July 4, 2009 are not necessarily indicative of the results to be expected for other interim periods or the full year. The accounting policies used in preparing these financial statements are the same as those applied in the prior year, except that the Company adopted new financial accounting standards in its 2009 fiscal year, as discussed within this Note. Fair value Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standard (SFAS) No. 157, Fair Value Measurements for non-financial assets and liabilities was adopted by the Company as of the beginning of its 2009 fiscal year. This was pursuant to FASB Staff Position (FSP) FAS 157-2, which delayed by one year the effective date of SFAS No. 157 for all non-financial assets and non-financial liabilities, except for those that are recognized or disclosed at fair value in the financial statements at least annually. Assets and liabilities subject to this deferral included goodwill, intangible assets, long-lived assets measured at fair value for impairment assessments and nonfinancial assets and liabilities initially measured at fair value in a business combination. The provisions of this standard, which were applied prospectively, did not have a significant impact on the Companys consolidated financial statements. FSP SFAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly, was adopted by the Company as of the quarter ended July 4, 2009. FSP SFAS 157-4 provides additional guidance for estimating fair value in accordance with SFAS No. 157 when the volume and level of activity for the asset or liability have significantly decreased. It clarifies and includes additional factors to consider in determining whether there has been a significant decrease in market activity for an asset or liability.In addition, the FSP amends SFAS No. 157 to require that a reporting entity disclose in interim and annual periods the inputs and valuation techniques used to measure fair value and a discussion of changes in valuation techniques and related inputs, if any, during the period. The adoption of FSP SFAS 157-4 on July 4, 2009 resulted in additional disclosures contained in Note 10. Disclosures about derivative instruments SFAS No. 161,

Acquisitions and Goodwill and O

Acquisitions and Goodwill and Other Intangible Assets
	6 Months Ended Jul. 04, 2009
Acquisitions and goodwill and other intangible assets
Acquisitions and goodwill and other intangible assets [Text Block]	Note 2 Acquisitions and goodwill and other intangible assets Acquisitions The Company made acquisitions in 2008 in order to expand its presence geographically. Navigable Foods During the quarter ended June28, 2008, the Company paid $28million in connection with its acquisition of a majority interest in the business of Zhenghang Food Company Ltd. (Navigable Foods). The acquisition of Navigable Foods closed on June 30, 2008, with a purchase price of $36 million in cash (net of cash received), including transaction fees. Navigable Foods, a manufacturer of cookies and crackers in the northern and northeastern regions of China, included approximately 1,800 employees, two manufacturing facilities and a sales and distribution network. Cash outflows of $28 million associated with the transaction, which represented advances to the seller and sellers lenders to satisfy various debt and other obligations of the seller, were classified as investing cash outflows in the Companys Consolidated Statement of Cash Flows for the year-to-date period ended June28, 2008. United Bakers Subsidiaries of the Company acquired substantially all of the equity interests in OJSC Kreker (doing business as United Bakers) and consolidated subsidiaries in January 2008. United Bakers is a leading producer of cereal, cookie and cracker products in Russia, with approximately 4,000 employees, six manufacturing facilities and a broad distribution network. The Company paid $110 million cash (net of $5 million cash acquired), including approximately $67 million to settle debt and other assumed obligations of the acquired entities. Of the total cash paid, $5 million was spent in 2007 for transaction fees and advances. The remaining amount of $105 million was classified as an investing activity cash outflow in the Companys Consolidated Statement of Cash Flows for the year-to-date period ended June 28, 2008. Goodwill and other intangible assets Intangible assets subject to amortization (millions) Gross carrying amount Accumulated amortization July 4, 2009 January 3, 2009 July 4, 2009 January 3, 2009 Trademarks $19 $19 $15 $14 Other 41 41 28 28 Total $60 $60 $43 $42 For intangible assets in the preceding table, amortization was less than $1 million for each of the current and prior year quarterly periods. The currently estimated aggregate annual amortization expense for full-year 2009 and each of the four succeeding fiscal years is approximately $2 million. Intangible assets not subject to amortization (millions) Total carrying amount July 4, 2009 January 3, 2009 Trademarks $1,443 $1,443 Changes in the carrying amount of goodwill for the year-to-date period ended July 4, 2009 are presented in the following table. Certain of the Companys goodwill balances are subject to foreign currency translation adjustments. Fluctuations in exchange rates contributed to the change in goodwill balance for the period.

Exit or Disposal Activities

Exit or Disposal Activities
	6 Months Ended Jul. 04, 2009
Exit or disposal activities
Exit or disposal activities [Text Block]	Note 3 Exit or disposal activities The Company views its continued spending on cost-reduction activities as part of its ongoing operating principles to provide greater visibility in achieving its long-term profit growth targets. Activities undertaken are currently expected to recover cash implementation costs within a five-year period of completion. Each cost-reduction activity is normally up to three years in duration. Upon completion (or as each major stage is completed in the case of multi-year programs), the project begins to deliver cash savings and/or reduced depreciation. 2009 activities During the second quarter of 2009, the Company incurred $18 million of costs related to plans which will result in cost of goods sold (COGS) and selling, general and administrative (SGA) savings. The COGS programs are Kelloggs lean, efficient, and agile network (K LEAN) and a European manufacturing optimization in Bremen, Germany. The SGA program focuses on the efficiency and effectiveness of various support functions. Total charges for the quarter and year-to-date periods ended July 4, 2009 for all programs were as follows: Employee severance Other cash costs (a) Total (millions) Quarter ended July 4, 2009 Year-to-date period ended July 4, 2009 Quarter ended July 4, 2009 Year-to-date period ended July 4, 2009 Quarter ended July 4, 2009 Year-to-date period ended July 4, 2009 COGS programs $9 $13 $4 $4 $13 $17 SGA programs 5 5 - - 5 5 Total $14 $18 $4 $4 $18 $22 (a) Primarily includes expenditures for equipment removal and relocation. K LEAN seeks to optimize the global manufacturing network, reduce waste, develop best practices on a global basis and reduce capital expenditures. The Company expects to incur approximately $25 million of costs for 2009 and an additional $20 million in 2010. The charges represent cash payments for severance and other cash costs associated with the elimination of hourly and salaried positions at various global manufacturing facilities. Costs for this plan impacted the operating segments for the quarter and year-to-date as follows (in millions): North America - $6 and $10; Europe - $1 and $1. The Company incurred $6 million of costs in the second quarter related to a manufacturing optimization program in Bremen, Germany which will result in future cash savings through the elimination of employee positions. The charges were recorded in the Europe operating segment. The program will be complete in 2009, with total program costs expected to be $7 million representing cash payments for employee severance. During the second quarter of 2009, the Company incurred $5 million of costs for SGA programs which will result in an improvement in the efficiency and effectiveness of various support functions. The programs realign these functions to provide greater consistency across processes, procedures and capabilities in order to support the global organi

Other Income

Other Income (Expense), Net
	6 Months Ended Jul. 04, 2009
Other income (expense), net
Other income (expense), net [Text Block]	Note 4 Other income (expense), net Other income (expense), net includes non-operating items such as interest income, charitable donations, gains and losses on Company Owned Life Insurance (COLI), foreign exchange gains and losses and costs related to commodity options. The Company recognized net foreign exchange gains of $5 million and $11 million, respectively, for the quarter and year-to-date periods ended July 4, 2009, as compared to losses of $7 million and $13 million, respectively, for the quarter and year-to-date periods ended June 28, 2008. Gains on COLI, due to changes in cash surrender value, were $9 million and $7 million, respectively, for the quarter and year-to-date periods ended July 4, 2009, as compared to losses of $4 million and $1 million, respectively, for the quarter and year-to-date periods ended June 28, 2008. Charitable donations totaled $4 million for the quarter and year-to-date periods ended July 4, 2009, as compared to $1 million for the year-to-date period ended June 28, 2008. Charitable donations during the quarter ended July 4, 2009 primarily consisted of the Companys donation of one full days worth of cereal production to the hunger relief food-bank network, Feeding America. No charitable donations were made in the second quarter of 2008.

Equity

Equity
	6 Months Ended Jul. 04, 2009
Equity (Equity)
Equity [Text Block]	Note 5 Equity Earnings per share Basic net earnings per share is determined by dividing net income attributable to Kellogg Company by the weighted average number of common shares outstanding during the period. Diluted net earnings per share is similarly determined, except that the denominator is increased to include the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued. Dilutive potential common shares are comprised principally of employee stock options issued by the Company, and to a lesser extent, certain contingently issuable performance shares. Basic net earnings per share is reconciled to diluted net earnings per share in the following table. The total number of anti-dilutive potential common shares excluded from the reconciliation were 24 million and 20 million for the quarter and year-to-date periods ended July 4, 2009, respectively. Anti-dilutive potential common shares excluded from the reconciliation totaled 5 million for both the quarter and year-to-date periods ended June 28, 2008. Quarters ended July 4, 2009 and June 28, 2008: Net income Average Net (millions, except attributable to shares earnings per share data) Kellogg Company outstanding per share 2009 Basic $354 383 $ .93 Dilutive potential common shares - - (.01) Diluted $354 383 $ .92 2008 Basic $312 379 $ .82 Dilutive potential common shares - 3 - Diluted $312 382 $ .82 Year-to-date periods ended July 4, 2009 and June 28, 2008: Net income Average Net (millions, except attributable to shares earnings per share data) Kellogg Company outstanding per share 2009 Basic $675 382 $ 1.77 Dilutive potential common shares - 1 (.01) Diluted $675 383 $ 1.76 2008 Basic $627 382 $ 1.64 Dilutive potential common shares - 4 (.01) Diluted $627 386 $ 1.63 During the year-to-date period ended July 4, 2009, the Company issued 0.2 million shares to employees and directors under various benefit plans and stock purchase programs, as further discussed in Note 7. On February 4, 2009, the Board of Directors authorized the repurchase of $650 million of the Companys common stock during 2009 for general corporate purposes and to offset issuances for employee benefit programs. No purchases were made under this program. Comprehensive income Comprehensive income includes net income and all other changes in equity during a period except those resulting from investments by or distributions to shareholders. Other comprehensive income for all periods presented consists of foreign currency translation adjustments, fair value adjustment

Debt

Debt
	6 Months Ended Jul. 04, 2009
Debt
Debt Disclosure [Text Block]	Note 6 Debt On May 18, 2009, the Company issued $750 million of seven-year 4.45% fixed rate U.S. Dollar Notes, and used net proceeds of $745 million from these Notes to retire a portion of its commercial paper. The Notes contain customary covenants that limit the ability of the Company and its restricted subsidiaries (as defined) to incur certain liens or enter into certain sale and lease-back transactions. There is also a change of control provision. As of July 4, 2009 and January 3, 2009, Notes Payable included commercial paper outstanding in the amount of $466 million and $1,310 million, respectively. In May 2009, the Company entered into interest rate swaps with notional amounts totaling $750 million, which effectively converted its existing 5.125% U.S. Dollar Notes due 2012 from a fixed rate to a floating rate obligation for the remainder of the five-year term. These derivative instruments, which were designated as fair value hedges of the debt obligation, resulted in an effective interest rate of 3.49% as of July 4, 2009. The fair value adjustment for the interest rate swaps of $6 million was recorded as a decrease in long-term debt on the Companys Consolidated Balance Sheet at July 4, 2009. In May 2009, the Company entered into interest rate swaps with notional amounts totaling $400 million, which effectively converted a portion of its existing 6.6% U.S. Dollar Notes due 2011 from a fixed rate to a floating rate obligation for the remainder of the 10-year term. These derivative instruments, which were designated as fair value hedges of the debt obligation, resulted in an effective interest rate of 5.87% as of July 4, 2009 on the portion of the debt related to the interest rate swaps. The fair value adjustment for the interest rate swaps of $2 million was recorded as an increase in long-term debt on the Companys Consolidated Balance Sheet at July 4, 2009.

Stock Compensation

Stock Compensation
	6 Months Ended Jul. 04, 2009
Stock compensation (StockCompensation)
Stock compensation [Text Block]	Note 7 Stock compensation The Company uses various equity-based compensation programs to provide long-term performance incentives for its global workforce. Currently, these incentives consist principally of stock options, and to a lesser extent, executive performance shares and restricted stock grants. Additionally, the Company awards restricted stock to its non-employee directors. These awards are administered through several plans, described as follows. The 2009 Long-Term Incentive Plan (2009 Plan), approved by shareholders in the second quarter of 2009, permits awards to employees and officers in the form of incentive and non-qualified stock options, performance units, restricted stock or restricted stock units, and stock appreciation rights. The 2009 Plan authorizes the issuance of a total of (a) 27 million shares; plus (b) the total number of shares as to which awards granted under the 2009 Plan or the 2003 or 2001 Incentive Plans expire or are forfeited, terminated or settled in cash, with no more than 5 million shares to be issued in satisfaction of performance units, performance-based restricted shares and other awards (excluding stock options and stock appreciation rights), and with additional annual limitations on awards or payments to individual participants. The Non-Employee Director Stock Plan was approved by shareholders in 2009 and allows each eligible non-employee director to receive shares of the Companys common stock annually. The number of shares granted pursuant to each annual award will be determined by the Nominating and Governance Committee of the Board of Directors. Shares are placed in the Kellogg Company Grantor Trust for Non-Employee Directors (the Grantor Trust). Under the terms of the Grantor Trust, shares are available to a director only upon termination of service on the Board. The Company classifies pre-tax stock compensation expense in selling, general and administrative expense principally within its corporate operations. For the periods presented, compensation expense for all types of equity-based programs and the related income tax benefit recognized were as follows: Quarter ended Year-to-date period ended (millions) July 4, 2009 June 28, 2008 July 4, 2009 June 28, 2008 Pre-tax compensation expense $15 $32 $28 $53 Related income tax benefit $5 $12 $10 $19 Pre-tax compensation expense for the quarter and year-to-date periods ended June 28, 2008 included $4 million of expense related to the modification of certain stock options to eliminate the accelerated ownership feature (AOF) and $13 million representing cash compensation to holders of modified stock options to replace the value of the AOF, which is discussed on pages 42 and 43 of the Companys 2008 Annual Report on Form 10-K. As of July 4, 2009, total stock-based compensation cost related to non-vested awards not yet recognized was approximately $40 million and the weighted-average period over which this amount is expected to be recognized was approximately 2 years. Stock options During

Employee Benefits

Employee Benefits
	6 Months Ended Jul. 04, 2009
Employee benefits
Employee benefits [Text Block]	Note 8 Employee benefits The Company sponsors a number of U.S. and foreign pension, other nonpension postretirement and postemployment plans to provide various benefits for its employees. These plans are described on pages 44 to 48 of the Companys 2008 Annual Report on Form 10-K. Components of Company plan benefit expense for the periods presented are included in the tables below. Pension Quarter ended Year-to-date period ended (millions) July 4, 2009 June 28, 2008 July 4, 2009 June 28, 2008 Service cost $20 $21 $40 $44 Interest cost 51 51 98 101 Expected return on plan assets (81) (77) (157) (154) Amortization of unrecognized prior service cost 3 3 6 6 Recognized net loss 12 9 23 18 Curtailment and special termination benefits - - - 7 Total pension expense - Company plans $5 $7 $10 $22 Other nonpension postretirement Quarter ended Year-to-date period ended (millions) July 4, 2009 June 28, 2008 July 4, 2009 June 28, 2008 Service cost $4 $5 $9 $9 Interest cost 17 16 33 33 Expected return on plan assets (17) (16) (34) (32) Amortization of unrecognized prior service cost (1) - (1) - Recognized net loss 3 2 6 4 Postretirement benefit expense $6 $7 $13 $14 Postemployment Quarter ended Year-to-date period ended (millions) July 4, 2009 June 28, 2008 July 4, 2009 June 28, 2008 Service cost $2 $1 $3 $2 Interest cost 1 1 2 2 Recognized net loss 1 1 2 2 Postemployment benefit expense $4 $3 $7 $6 Management currently plans to contribute approximately $85 million to its defined benefit pension plans and $15 million to its retiree health and welfare benefit plans during 2009, for a total of $100 million. During 2008, the Company contributed approximately $354 million to defined benefit pension plans and $97 million to retiree health and welfare benefit plans, for a total of $451 million. Plan funding strategies are periodically modified to reflect managements current evaluation of tax deductibility, market conditions and competing investment alternatives.

Income Taxes

Income Taxes
	6 Months Ended Jul. 04, 2009
Income taxes (IncomeTaxes)
Income taxes [Text Block]	Note 9 Income taxes Effective income tax rate The consolidated effective income tax rate was approximately 29% for the quarter ended July 4, 2009, as compared to 30% for the comparable quarter of 2008. During the second quarter of 2009, the Company finalized a foreign tax return which decreased the cost of a repatriation plan executed in 2008. The second quarter 2008 provision for income taxes included two significant, but partially-offsetting adjustments. The Company recorded a charge of $33 million related to the planned repatriation of $700 million, which was offset by foreign tax credit related items of $18 million, reducing the net cost of repatriation to $15 million. Reserves for uncertain tax positions were reduced by $18 million related to the settlement of audits in various tax jurisdictions The year-to-date consolidated effective tax rate through two quarters for 2009 as well as 2008 was 30%. Uncertain tax positions As of July 4, 2009, the Company classified approximately $29 million of unrecognized tax benefits as a current liability, representing several individually insignificant income tax positions under examination in various jurisdictions. Managements estimate of reasonably possible changes in unrecognized tax benefits during the next twelve months is comprised of the aforementioned current liability balance expected to be settled within one year, offset by approximately $5 million of projected additions related primarily to ongoing intercompany transfer pricing activity. Management is currently unaware of any issues under review that could result in significant additional payments, accruals or other material deviation in this estimate. Following is a reconciliation of the Companys total gross unrecognized tax benefits for the year-to-date period ended July 4, 2009. Approximately $111 million of this total represents the amount that, if recognized, would affect the Companys effective income tax rate in future periods. (millions) January 3, 2009 $132 Tax positions related to current year: Additions 4 Reductions - Tax positions related to prior years: Additions 2 Reductions (3) Settlements (4) July 4, 2009 $131 The current portion of the Companys unrecognized tax benefits is presented in the balance sheet within accrued income taxes and the amount expected to be settled after one year is recorded in other liabilities. The Company classifies income tax-related interest and penalties as interest expense and SGA expense, respectively. For the year-to-date period ending July 4, 2009, the Company recognized expense of $2 million for tax related interest and had approximately $30 million accrued.

Fair Value Measurements

Fair Value Measurements
	6 Months Ended Jul. 04, 2009
Fair Value Measurements
Fair value measurements [Text Block]	Note 10 Fair value measurements As required by SFAS No. 157, Fair Value Measurements, the Company has categorized its financial assets and liabilities into a three-level fair value hierarchy, based on the nature of the inputs used in determining fair value. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (level 1) and the lowest priority to unobservable inputs (level 3). Following is a description of each category in the fair value hierarchy and the financial assets and liabilities of the Company that are included in each category at July 4, 2009. Level 1 Financial assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market. For the Company, level 1 financial assets and liabilities consist primarily of commodity derivative contracts. Level 2 Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. For the Company, level 2 financial assets and liabilities consist of interest rate swaps and over-the-counter commodity and currency contracts. The Companys calculation of the fair value of interest rate swaps is derived from a discounted cash flow analysis based on the terms of the contract and the interest rate curve. Commodity derivatives are valued using an income approach based on the commodity index prices less the contract rate multiplied by the notional amount. Foreign currency contracts are valued using an income approach based on forward rates less the contract rate multiplied by the notional amount. Level 3 Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect managements own assumptions about the assumptions a market participant would use in pricing the asset or liability. The Company does not have any level 3 financial assets or liabilities. The following table presents the Companys fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of July 4, 2009 and January 3, 2009: (millions) Level 1 Level 2 Level 3 Total July 4, 2009 January 3, 2009 July 4, 2009 January 3, 2009 July 4, 2009 January 3, 2009 July 4, 2009 January 3, 2009 Assets: Derivatives (recorded in other current assets) $19 $9 $27 $34 $- $- $46 $43 Derivatives (recorded in other assets) - - 40 43 - - 40 43 Total assets $19 $9 $67 $77 $- $- $86 $86 Liabilities: Derivatives (recorded in other current liabilities) $(14) $- $(24) $(17) $- $- $(38) $(17)

Derivative Instruments and Hedg

Derivative Instruments and Hedging Activities
	6 Months Ended Jul. 04, 2009
Derivative instruments and hedging activities
Derivative instruments and hedging activities [Text Block]	Note 11 Derivative instruments and hedging activities SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities, was adopted by the Company as of the beginning of its 2009 fiscal year, as discussed in Note 1. The Company is exposed to certain market risks such as changes in interest rates, foreign currency exchange rates, and commodity prices, which exist as a part of its ongoing business operations. Management uses derivative financial and commodity instruments, including futures, options, and swaps, where appropriate, to manage these risks. Instruments used as hedges must be effective at reducing the risk associated with the exposure being hedged and must be designated as a hedge at the inception of the contract. In accordance with SFAS No. 133, the Company designates derivatives as cash flow hedges, fair value hedges, net investment hedges, or other contracts used to reduce volatility in the translation of foreign currency earnings to U.S. dollars. The fair value of derivative instruments is recorded in other current assets, other assets, other current liabilities or other liabilities. Gains and losses representing either hedge ineffectiveness, hedge components excluded from the assessment of effectiveness, or hedges of translational exposure are recorded in the Consolidated Statement of Income in other income (expense), net. Within the Consolidated Statement of Cash Flows, settlements of cash flow and fair value hedges are classified as an operating activity; settlements of all other derivatives are classified as a financing activity. As a matter of policy, the Company does not engage in trading or speculative hedging transactions. Cash flow hedges Qualifying derivatives are accounted for as cash flow hedges when the hedged item is a forecasted transaction. Gains and losses on these instruments are recorded in other comprehensive income until the underlying transaction is recorded in earnings. When the hedged item is realized, gains or losses are reclassified from accumulated other comprehensive income (loss) (AOCI) to the Consolidated Statement of Income on the same line item as the underlying transaction. Fair value hedges Qualifying derivatives are accounted for as fair value hedges when the hedged item is a recognized asset, liability, or firm commitment. Gains and losses on these instruments are recorded in earnings, offsetting gains and losses on the hedged item. Net investment hedges Qualifying derivative and nonderivative financial instruments are accounted for as net investment hedges when the hedged item is a nonfunctional currency investment in a subsidiary. Gains and losses on these instruments are included in foreign currency translation adjustments in AOCI. Other contracts The Company also periodically enters into foreign currency forward contracts and options to reduce volatility in the translation of foreign currency earnings to U.S. dollars. Gains and losses on these instruments are recorded in other income (expense), net, generally reducing the exposure to translation volatility during a full-year period. Foreign currency exchange risk The Company

Voluntary Product Withdrawal

Voluntary Product Withdrawal
	6 Months Ended Jul. 04, 2009
Voluntary product withdrawal
Voluntary product withdrawal [Text Block]	Note 12 Voluntary product withdrawal In January and February, 2009, the Company recalled certain products because they included ingredients that had the potential to be contaminated with salmonella. The recall stemmed from the U.S. Food and Drug Administration and other authorities investigations of Peanut Corporation of America, which supplied the Company with peanut paste and other ingredients. The recall represented a Type I subsequent event and in accordance with U.S. GAAP, the Company recorded certain costs associated with the recall in its 2008 financial results. See Note 15 of the Companys 2008 Annual Report on Form 10-K for further information on the recall. The Company incurred additional costs associated with the recall for product manufactured and sold in 2009. The recall reduced North Americas operating profit for the quarter and year-to-date periods ended July 4, 2009 by $4 million or $0.01 of earnings per diluted share and $31 million or $0.06 of earnings per diluted share, respectively. Estimated customer returns and consumer rebates were recorded as a reduction of net sales; costs associated with returned product and the disposal and write-off of inventory were recorded as cost of goods sold; and other recall costs were recorded as selling, general and administrative expenses. The following table presents a summary of the total charges for the quarter and year-to-date periods ended July 4, 2009. Quarter ended Year-to-date period ended (millions) July 4, 2009 July 4, 2009 Reduction of net sales $(1) $12 Cost of goods sold 5 18 Selling, general and administrative - 1 Total $4 $31 The costs in the above table represent actual costs incurred, which exclude the impact of lost sales.

Subsequent Events

Subsequent Events
	6 Months Ended Jul. 04, 2009
Subsequent events
Subsequent events [Text Block]	Note 13 Subsequent events SFAS No. 165, Subsequent Events was adopted by the Company as of the quarter ended July 4, 2009 as discussed in Note 1. SFAS No. 165 requires disclosure of the date through which subsequent events have been evaluated. The Company evaluated subsequent events through the time of filing of the Quarterly Report on Form 10-Q on August 7, 2009.

Operating Segments

Operating Segments
	6 Months Ended Jul. 04, 2009
Operating segments
Operating segment [Text Block]	Note 14 Operating segments Kellogg Company is the worlds leading producer of cereal and a leading producer of convenience foods, including cookies, crackers, toaster pastries, cereal bars, fruit snacks, frozen waffles and veggie foods. Kellogg products are manufactured and marketed globally. Principal markets for these products include the United States and United Kingdom. The Company currently manages its operations in four geographic operating segments, comprised of North America and the three International operating segments of Europe, Latin America and Asia Pacific. Quarter ended Year-to-date period ended July 4, June 28, July 4, June 28, (millions) 2009 2008 2009 2008 Net sales North America $2,176 $2,127 $4,387 $4,275 Europe 617 746 1,174 1,423 Latin America 258 283 488 536 Asia Pacific (a) 178 187 349 367 Consolidated $3,229 $3,343 $6,398 $6,601 Segment operating profit North America $426 $380 $829 $783 Europe 104 122 199 234 Latin America 57 60 106 105 Asia Pacific (a) 21 22 46 53 Corporate (55) (54) (98) (100) Consolidated $553 $530 $1,082 $1,075 (a) Includes Australia, Asia and South Africa.

Document Information

Document Information
	6 Months Ended Jul. 04, 2009
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2009-07-04

Entity Information

Entity Information (USD $)
	6 Months Ended Jul. 04, 2009	Aug. 01, 2009	Jun. 28, 2008
Entity Information [Line Items]
Entity Registrant Name	Kellogg Company
Entity Central Index Key	0000055067
Current Fiscal Year End Date	--01-02
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$13,800,000,000
Entity Common Stock, Shares Outstanding		382,841,485