1
EXHIBIT 99.02
FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
ANNUAL REPORT
PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR FISCAL YEAR ENDED OCTOBER 31, 1997
COMMISSION FILE NUMBER 1-4171
KELLOGG COMPANY SALARIED
SAVINGS AND INVESTMENT PLAN
(Full Title of the Plan)
- - - - - - - - - - - - - - - - - -
KELLOGG COMPANY
(Name of Issuer)
ONE KELLOGG SQUARE
BATTLE CREEK, MICHIGAN 49016-3599
(Principal Executive Office)
2
KELLOGG COMPANY SALARIED
SAVINGS AND INVESTMENT PLAN
FINANCIAL STATEMENTS
AND ADDITIONAL INFORMATION
OCTOBER 31, 1997
3
KELLOGG COMPANY SALARIED
SAVINGS AND INVESTMENT PLAN
INDEX TO FINANCIAL STATEMENTS AND ADDITIONAL INFORMATION
PAGE
REPORT OF INDEPENDENT ACCOUNTANTS 1
FINANCIAL STATEMENTS AS OF OCTOBER 31, 1997
AND 1996 AND FOR THE YEARS THEN ENDED:
Statement of net assets available for benefits, with fund information 2-3
Statement of changes in net assets available for benefits, with
fund information 4-5
Notes to financial statements 6-10
ADDITIONAL INFORMATION:
Item 27a - Schedule of assets held for investment
purposes - October 31, 1997 11
Item 27b - Schedule of loans or fixed income obligations -
October 31, 1997 12-17
Item 27d - Schedule of reportable transactions -
year ended October 31, 1997 18
4
REPORT OF INDEPENDENT ACCOUNTANTS
To the ERISA Finance Committee
and Participants of the Kellogg Company
Salaried Savings and Investment Plan
In our opinion, the accompanying statements of net assets available for
benefits and the related statements of changes in net assets available for
benefits present fairly, in all material respects, the net assets available for
benefits of the Kellogg Company Salaried Savings and Investment Plan at October
31, 1997 and 1996, and the changes in net assets available for benefits for the
years then ended, in conformity with generally accepted accounting principles.
These financial statements are the responsibility of the plan's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for the
opinion expressed above.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included on
pages 11-18 is presented for purposes of additional analysis and is not a
required part of the basic financial statements but is additional information
required by ERISA. The fund information in the statements of net assets
available for benefits and the statements of changes in net assets available
for benefits is presented for purposes of additional analysis rather than to
present the net assets available for benefits and changes in net assets
available for benefits of each fund. The additional information and the fund
information have been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
PRICE WATERHOUSE LLP
Battle Creek, Michigan
March 16, 1998
5
KELLOGG COMPANY SALARIED 2
SAVINGS AND INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
OCTOBER 31, 1997
FIXED COMPANY
LOAN BOND INCOME EQUITY STOCK
TOTAL FUND FUND FUND FUND FUND
ASSETS:
Receivables:
Employer contributions $ 427,924 $ - $ 15,699 $ 101,037 $ 200,915 $ 110,273
Employee contributions 266,297 266,297
Interest 4,242 4,242
------------ ---------- ----------- ------------ ------------ -----------
Total receivables 698,463 15,699 371,576 200,915 110,273
------------ ---------- ----------- ------------ ------------ -----------
Investments:
Plan's interest in Master Trust 209,461,284 10,510,300 13,236,293 134,577,719 51,136,972
Guaranteed investment contracts 234,272,998 234,272,998
Loans to participants 4,696,214 4,696,214
TBC Pooled Funds Daily Liquidity 20,922 20,922
------------ ---------- ----------- ------------ ------------ -----------
Total investments 448,451,418 4,696,214 10,510,300 247,530,213 134,577,719 51,136,972
------------ ---------- ----------- ------------ ------------ -----------
Total assets 449,149,881 4,696,214 10,525,999 247,901,789 134,778,634 51,247,245
LIABILITIES:
Investment services fees payable 55,869 1,573 22,216 30,553 1,527
------------ ---------- ----------- ------------ ------------ -----------
Net assets available for benefits $449,094,012 $4,696,214 $10,524,426 $247,879,573 $134,748,081 $51,245,718
============ ========== =========== ============ ============ ===========
See accompanying notes to financial statements
6
KELLOGG COMPANY SALARIED 3
SAVINGS AND INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
OCTOBER 31, 1996
FIXED COMPANY
LOAN BOND INCOME EQUITY STOCK
TOTAL FUND FUND FUND FUND FUND
ASSETS:
Receivables:
Employer contributions $ 372,162 $ - $ 14,708 $ 120,899 $ 125,311 $ 111,244
Employee contributions 3,296 3,296
Interest 19,702 19,702
------------ ---------- ---------- ------------ ----------- -----------
Total receivables 395,160 14,708 143,897 125,311 111,244
------------ ---------- ---------- ------------ ----------- -----------
Investments:
Plan's interest in Master Trust 130,008,126 9,333,237 84,379,931 36,294,958
Interfund borrowings (16,615) 16,615
Guaranteed investment contracts 262,368,944 262,368,944
Loans to participants 4,650,237 4,650,237
TBC Pooled Funds Daily Liquidity 5,386,548 5,386,548
------------ ---------- ---------- ------------ ----------- -----------
Total investments 402,413,855 4,650,237 9,333,237 267,738,877 84,396,546 36,294,958
------------ ---------- ---------- ------------ ----------- -----------
Net assets available for benefits $402,809,015 $4,650,237 $9,347,945 $267,882,774 $84,521,857 $36,406,202
============ ========== ========== ============ =========== ===========
See accompanying notes to financial statements
7
KELLOGG COMPANY SALARIED 4
SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED OCTOBER 31, 1997
FIXED COMPANY
LOAN BOND INCOME EQUITY STOCK
TOTAL FUND FUND FUND FUND FUND
Contributions:
Employer $ 5,720,190 $ - $ 227,627 $ 1,704,900 $ 2,305,661 $ 1,482,002
Employee 13,930,880 612,257 4,537,488 6,567,524 2,213,611
Loans repaid (2,504,968) 72,536 976,226 981,527 474,679
Rollover from other qualified plans 3,258,456 132,940 231,832 512,818 1,693,361 687,505
------------ ----------- ----------- ------------ ------------ -----------
Total contributions 22,909,526 (2,372,028) 1,144,252 7,731,432 11,548,073 4,857,797
------------ ----------- ----------- ------------ ------------ -----------
Earnings on Investments:
Plan's interest in income of Master Trust 42,838,918 846,887 877,745 28,602,004 12,512,282
Interest income 16,935,316 406,769 16,528,547
Trustee fees (16,540) (380) (10,980) (3,575) (1,605)
Administrative fees (210,509) (4,370) (142,590) (45,761) (17,788)
------------ ----------- ----------- ------------ ------------ -----------
Total earnings on investments, net 59,547,185 406,769 842,137 17,252,722 28,552,668 12,492,889
------------ ----------- ----------- ------------ ------------ -----------
Net transfers between funds 164,008 (15,749,040) 15,499,371 85,661
Participant withdrawals (36,330,356) (189,123) (886,131) (28,472,787) (4,524,626) (2,257,689)
New loans distributions 2,179,693 (89,823) (880,617) (839,830) (369,423)
Net transfers between Plans 158,642 20,666 2,038 115,089 (9,432) 30,281
------------ ----------- ----------- ------------ ------------ -----------
Net increase (decrease) 46,284,997 45,977 1,176,481 (20,003,201) 50,226,224 14,839,516
Net assets available for benefits at
beginning of year 402,809,015 4,650,237 9,347,945 267,882,774 84,521,857 36,406,202
------------ ----------- ----------- ------------ ------------ -----------
Net assets available for benefits at
end of year $449,094,012 $ 4,696,214 $10,524,426 $247,879,573 $134,748,081 $51,245,718
============ =========== =========== ============ ============ ===========
See accompanying notes to financial statements
8
KELLOGG COMPANY SALARIED 5
SAVINGS AND INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED OCTOBER 31, 1996
FIXED COMPANY
LOAN BOND INCOME EQUITY STOCK
TOTAL FUND FUND FUND FUND FUND
Contributions:
Employer $ 5,359,464 $ - $ 211,000 $ 1,927,927 $ 1,474,352 $ 1,746,185
Employee 12,956,687 611,442 5,179,614 4,261,610 2,904,021
Loans repaid (2,086,990) 66,617 899,071 585,481 535,821
Rollover from other qualified plans 392,994 45,796 33,086 205,038 109,074
------------ ----------- ---------- ------------ ----------- -----------
Total contributions 18,709,145 (2,086,990) 934,855 8,039,698 6,526,481 5,295,101
------------ ----------- ---------- ------------ ----------- -----------
Earnings on Investments:
Plan's interest in income of Master Trust 10,509,961 421,398 1,261 14,388,278 (4,300,976)
Interest income 19,313,397 422,481 18,890,916
Trustee fees (38,253) (737) (27,760) (4,888) (4,868)
Administrative fees (252,891) (5,080) (183,020) (37,200) (27,591)
------------ ----------- ---------- ------------ ----------- -----------
Total earnings on investments, net 29,532,214 422,481 415,581 18,681,397 14,346,190 (4,333,435)
------------ ----------- ---------- ------------ ----------- -----------
Net transfers between funds 1,645,007 (16,245,305) 18,920,456 (4,320,158)
Participant withdrawals (37,781,580) (312,680) (563,265) (29,844,720) (3,831,863) (3,229,052)
New loans distributions 1,685,686 (47,886) (858,857) (369,807) (409,136)
Net transfers between Plans 2,130 358 1,178 594
------------ ----------- ---------- ------------ ----------- -----------
Net increase (decrease) 10,461,909 (291,503) 2,384,292 (20,227,429) 35,592,635 (6,996,086)
Net assets available for benefits at
beginning of year 392,347,106 4,941,740 6,963,653 288,110,203 48,929,222 43,402,288
------------ ----------- ---------- ------------ ----------- -----------
Net assets available for benefits at
end of year $402,809,015 $ 4,650,237 $9,347,945 $267,882,774 $84,521,857 $36,406,202
============ =========== ========== ============ =========== ===========
See accompanying notes to financial statements
9
KELLOGG COMPANY SALARIED 6
SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The Kellogg Company Salaried Savings and Investment Plan ("the Plan")
operates as a qualified defined contribution plan and was established under
Section 401(k) of the Internal Revenue Code. The accounts of the Plan are
maintained on the accrual basis. Expenses of administration are paid by the
Plan.
INVESTMENTS
All investments are reported at current quoted market values except for
guaranteed insurance contracts, which are reported at contract value and
represent contributions made plus interest at the contract rate. The
following investments exceeded five percent of the net assets available for
benefits at October 31, 1997 or 1996:
INTEREST OCTOBER 31,
DESCRIPTION RATE 1997 1996
Putnam Horizon Managed Synthetic
GIC Fund Variable $ 31,701,110 $ 30,048,621
Brundage Story & Rose Managed
Synthetic GIC Fund Variable 32,009,730 30,184,431
John Hancock GAC #5917-10001 8.82% 16,173,608 40,670,332
Allstate Life Ins. GAC #5686-01 8.13% 28,210,134 26,089,091
John Hancock GAC #7606 7.87% 27,302,372 25,310,440
New York Life GAC #30320002 6.72% 32,347,720 30,310,832
Plan's interest in Master Trust Variable 209,461,284 130,008,126
ALLOCATION OF NET INVESTMENT INCOME TO PARTICIPANTS
Net investment income related to the respective investment options is
allocated monthly to participant accounts in proportion to their respective
ownership at the beginning of the month.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Plan's management to make
estimates and assumptions that affect the reported amounts of net assets
available for benefits at the date of the financial statements and changes
in net assets available for benefits during the reporting period. Actual
results could differ from those estimates.
2. PROVISIONS OF THE PLAN
PLAN ADMINISTRATION
The Plan is administered by the ERISA Administrative Committee appointed by
Kellogg Company.
10
KELLOGG COMPANY SALARIED 7
SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
2. PROVISIONS OF THE PLAN (CONTINUED)
PLAN PARTICIPATION
Generally, all salaried employees of Kellogg Company and its U.S.
subsidiaries are eligible to participate in the Plan.
Subject to limitations prescribed by the Internal Revenue Service,
participants may elect to contribute from 1 percent to 16 percent of their
annual wages. Employee contributions not exceeding 5 percent of wages are
matched by Kellogg Company at an 80 percent rate, with 12.5 percent of the
Company match restricted for investment in the Kellogg Company stock fund.
Employees may contribute to the Plan from their date of hire; however, the
monthly contributions are not matched by the Company until the participant
has completed one year of service.
Participants of the Plan may elect to invest the contributions to their
accounts as well as their account balances in an equity, bond, fixed income
or Kellogg Company stock fund or a combination thereof in multiples of one
percent.
VESTING
Participant account balances are fully vested.
PARTICIPANT LOANS
Participants may borrow from their fund accounts a minimum of $1,000 up to a
maximum equal to the lesser of $50,000 or 50% of their account balance.
Loan transactions are treated as transfers between the Loan fund and the
other funds. Loan terms range from 12 to 60 months. Interest is paid at a
constant rate equal to one percent over the prime rate in the month the loan
begins. Principal and interest are paid ratably through monthly payroll
deductions. Loans that are considered to be uncollectible at year end
result in the outstanding principal being considered a hardship withdrawal
from the participant's plan account.
PARTICIPANT DISTRIBUTIONS
Participants may elect to withdraw all or a portion of their contributions
made after October 31, 1978, plus related net investment income. The
withdrawal of any participant contributions which were not previously
subject to income tax is restricted by Internal Revenue Service regulations.
Under certain circumstances and subject to approval by the Trustees,
participants may request withdrawal of a portion of Company contributions
and their own contributions made prior to November 1, 1978, including net
investment income thereon.
Participants who terminate employment before retirement, by reasons other
than death or disability, may remain in the Plan or receive payment of their
account balances in a lump sum. If the account balance is less than $3,500
the terminated participant will receive the account balance in a lump sum.
Participants are eligible to retire from the Company at age 62, upon
reaching 55 with 20 years of service, or after 30 years of service. Upon
retirement, disability, or death, a participant's account balance may be
received in a lump sum or installment payments.
11
KELLOGG COMPANY SALARIED 8
SAVINGS AND INVESTMENT PLAN
3. INCOME TAX STATUS
The Plan administrator has received a favorable letter from the Internal
Revenue Service regarding the Plan's qualification under applicable income
tax regulations as an entity exempt from federal income taxes.
4. MASTER TRUST
Assets of the Plan have been combined for investment purposes with assets of
the Kellogg Company American Federation of Grain Millers Savings and
Investment Plan and Kellogg Company sponsored pension plans in a Master
Trust.
The Plan has an undivided interest in the net assets held in the Master
Trust in which interests are determined on the basis of cumulative funds
specifically contributed on behalf of the Plan adjusted for an allocation of
income. Such income allocation is based on the Plan's funds available for
investment during the year.
Master Trust net assets at October 31, 1997 and 1996 and the changes in net
assets for the periods then ended are as follows:
12
KELLOGG COMPANY SALARIED 9
SAVINGS AND INVESTMENT PLANS
NOTES TO FINANCIAL STATEMENTS
4. MASTER TRUST (CONTINUED)
KELLOGG COMPANY MASTER TRUST
SCHEDULE OF ASSETS AND LIABILITIES FOR MASTER TRUST INVESTMENT ACCOUNTS
PENSION PLANS SAVINGS & INVESTMENT PLANS TOTAL
10/31/96 10/31/97 10/31/96 10/31/97 10/31/96 10/31/97
---------------------------- --------------------------- ----------------------------
CASH/EQUIVALENTS:
Non-Interest Bearing $1,316 ($535,778) $431 ($32,619) $1,747 ($568,397)
Interest Bearing Cash $2,771,776 $2,683,385 $0 $0 $2,771,776 $2,683,385
---------------------------- --------------------------- ----------------------------
TOTAL CASH/EQUIVALENTS $2,773,092 $2,147,607 $431 ($32,619) $2,773,523 $2,114,988
---------------------------- --------------------------- ----------------------------
RECEIVABLES $60,900,475 $100,949,571 $274,793 $11,609,621 $61,175,268 $112,559,192
---------------------------- --------------------------- ----------------------------
GENERAL INVESTMENTS:
Long Term U.S. Gov't Securities $50,267,438 $26,106,325 $7,389,825 $18,251,094 $57,657,263 $44,357,419
Short Term U.S. Gov't Securities $0 $0 $402,416 $133,414 $402,416 $133,414
Long Term U.S. Municipal Securities $0 $0 $0 $0 $0 $0
Corporate Debt - Long Term $14,301,477 $39,280,506 $7,648,217 $7,542,524 $21,949,694 $46,823,030
Corporate Debt - Short Term $0 $3,142,545 $25,139 $100,380 $25,139 $3,242,925
Corporate Stocks - Preferred $1,838,037 $1,697,910 $0 $0 $1,838,037 $1,697,910
Corporate Stocks - Convertible $5,419,318 $0 $0 $0 $5,419,318 $0
Corporate Stocks - Common $477,113,443 $568,799,792 $252,507,733 $380,020,756 $729,621,176 $948,820,548
Real Estate Pooled Funds $17,810,044 $0 $0 $0 $17,810,044 $0
Value of Interest in Pooled Funds $8,948,629 $94,003,448 $333,995 $14,663,025 $9,282,624 $108,666,473
Guaranteed Investment Contracts $68,035,400 $41,790,582 $0 $0 $68,035,400 $41,790,582
---------------------------- --------------------------- ----------------------------
TOTAL INVESTMENTS $643,733,786 $774,821,108 $268,307,325 $420,711,193 $912,041,111 $1,195,532,301
---------------------------- --------------------------- ----------------------------
TOTAL ASSETS $707,407,353 $877,918,286 $268,582,549 $432,288,195 $975,989,902 $1,310,206,481
---------------------------- --------------------------- ----------------------------
PAYABLES
Unsettled Trades ($62,117,871) ($103,169,276) $0 ($14,289,335) ($62,117,871) ($117,458,611)
Investment Services Fees $0 ($495,436) $0 ($96,265) $0 ($591,701)
---------------------------- --------------------------- ----------------------------
TOTAL LIABILITIES ($62,117,871) ($103,664,712) $0 ($14,385,600) ($62,117,871) ($118,050,312
---------------------------- --------------------------- ----------------------------
NET ASSETS $645,289,482 $774,253,574 $268,582,549 $417,902,595 $913,872,031 $1,192,156,169
============================ =========================== ============================
Percentage Interest held by the Plan 0.0% 0.0% 48.4% 50.1% 14.2% 17.6%
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KELLOGG COMPANY SALARIED 10
SAVINGS AND INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
4. MASTER TRUST (CONTINUED)
KELLOGG COMPANY MASTER TRUST
SCHEDULE OF INCOME AND EXPENSES, CHANGE IN NET ASSETS
AND NET INCREASE (DECREASE) IN NET ASSETS OF MASTER TRUST INVESTMENT ACCOUNTS
PENSION PLANS SAVINGS & INVESTMENT PLANS TOTAL
10/31/96 10/31/97 10/31/96 10/31/97 10/31/96 10/31/97
---------------------------- ----------------------------- -----------------------------
Transfer of Assets Into
Investment Account $60,000,541 $187,169,786 $471,493,020 $441,501,150 $531,493,561 $628,670,936
Earnings on Investments
Interest $7,804,578 $10,683,275 $1,153,223 $1,679,043 $8,957,801 $12,362,318
Dividends $2,789,517 $4,790,038 $2,829,397 $2,409,770 $5,618,914 $7,199,808
Corporate Actions $1,597,268 $86,594 $0 $0 $1,597,268 $86,594
Pooled Fund Distributions $4,177,043 $2,662,638 $0 $0 $4,177,043 $2,662,638
Miscellaneous $125 $2,762 $0 $0 $125 $2,762
Net Realized Gain/(Loss) $26,178,076 $84,030,675 $18,018,388 $10,375,664 $44,196,464 $94,406,339
---------------------------- ----------------------------- -----------------------------
TOTAL ADDITIONS $102,547,148 $289,425,768 $493,494,028 $455,965,627 $596,041,176 $745,391,395
---------------------------- ----------------------------- -----------------------------
Transfer of Assets Out of
Investment Account ($38,227,387) ($197,877,441) ($437,982,138) ($378,952,686) ($476,209,525) ($576,830,127)
Fees and Commissions ($1,487,578) ($1,627,714) ($58,996) ($180,330) ($1,546,574) ($1,808,044)
---------------------------- ----------------------------- -----------------------------
TOTAL DISTRIBUTIONS ($39,714,965) ($199,505,155) ($438,041,134) ($379,133,016) ($477,756,099) ($578,638,171)
---------------------------- ----------------------------- -----------------------------
Change in Unrealized Appreciation $25,931,479 $39,043,479 ($8,466,574) $72,487,435 $17,464,905 $111,530,914
---------------------------- ----------------------------- -----------------------------
NET CHANGE IN ASSETS $88,763,662 $128,964,092 $46,986,320 $149,320,046 $135,749,982 $278,284,138
Net Assets at Beginning of Year $556,525,820 $645,289,482 $221,596,229 $268,582,549 $778,122,049 $913,872,031
---------------------------- ----------------------------- -----------------------------
Net Assets at End of Year $645,289,482 $774,253,574 $268,582,549 $417,902,595 $913,872,031 $1,192,156,169
============================ ============================= =============================
14
KELLOGG COMPANY SALARIED 11
SAVINGS AND INVESTMENT PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES - OCTOBER 31, 1997
MARKET UNREALIZED
SECURITY DESCRIPTION COST PRICE VALUE GAIN/LOSS
TBC, Inc. Pooled Employee Funds
Daily Liquidity Fund $ 20,922 1.00 $ 20,922 $ -
Loans to participants 4,696,214 1.00 4,696,214
Brundage Story & Rose Managed
Synthetic GIC Fund Variable Rate 32,009,730 1.00 32,009,730
John Hancock GAC #5917-10001
8.82% 6/1/97 16,173,608 1.00 16,173,608
Principal Mutual GAC #4-11730-01
5.30% 12/1/98 9,164,266 1.00 9,164,266
Putnam Horizon Managed Synthetic
GIC Variable Rate 6/1/99 31,701,110 1.00 31,701,110
Peoples Security Ins Co #BDA00379FR
5.15% 12/1/97 3,470,011 1.00 3,470,011
Allstate Life Insurance GAC #5686-01
8.13% 12/1/98 28,210,134 1.00 28,210,134
Commonwealth Life #ADA00668FR
7.64% 6/1/98 11,920,750 1.00 11,920,750
John Hancock GAC #7606
7.87% 12/1/98 27,302,372 1.00 27,302,372
Commonwealth Life GIC
6.19% 6/1/98 5,049,058 1.00 5,049,058
Metropolitan Life GIC
6.27% 6/1/99 11,930,193 1.00 11,930,193
New York Life GIC
6.20% 6/1/98 3,846,890 1.00 3,846,890
New York Life #GA30320002
6.72% 6/1/00 32,347,720 1.00 32,347,720
Security Life of Denver #FA433
6.34% 12/1/01 14,188,410 1.00 14,188,410
Metropolitan LIfe #24667
6.5% 12/1/01 6,958,746 1.00 6,958,746
------------ ------------ --------
$238,990,134 $238,990,134 $ -
============ ============ ========
15
KELLOGG COMPANY SALARIED 12
SAVINGS AND INVESTMENT PLAN
ITEM 27b - SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS - OCTOBER 31, 1997
AMOUNT RECEIVED
ORIGINAL DURING REPORTING UNPAID
IDENTITY AND ADDRESS AMOUNT YEAR BALANCE AT TERMS AMOUNT OVERDUE
OF OBLIGOR OF LOAN ------------------- YEAR END ---------------------------------- -------------------
PRINCIPAL INTEREST LOAN DATE INTEREST RATE MATURITY PRINCIPAL INTEREST
John B. Zuzo $2,000 $165 $86 $1,755 06/30/96 9.3% 06/30/01 $1,755 $68
967 Hillbrook
Battle Creek, MI 49015
Stephen J. Peltz 19,000 - - 13,924 01/31/95 9.5% 01/31/00 13,924 772
4561 Fine Lake Road
Battle Creek, MI 49017
Michael J. O'Boyle 5,000 161 43 3,002 08/31/94 8.3% 08/31/99 3,002 145
231 Tidyman Road
Reisterstown, MD 21136
L. S. Sipple 2,000 1,181 49 173 05/31/96 9.8% 05/31/97 173 3
P.O. Box 983
Monroeville, NJ 08343
Lauri L. Smith 9,500 - - 5,380 06/30/95 10.0% 06/30/97 5,380 493
4641 Arlington Park Drive
Lakeland, FL 33801
Michael S. Lyons 4,624 847 309 3,535 06/30/96 9.3% 06/30/00 3,535 27
1716 Wheeland Drive
Williamsport, PA 17701
Daniel R. Barch 6,400 - - 5,362 03/31/95 10.0% 03/31/00 5,362 492
403 N. Leonard
Liberty, MO 64068
16
KELLOGG COMPANY SALARIED 13
SAVINGS AND INVESTMENT PLAN
ITEM 27b - SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS - OCTOBER 31, 1997
AMOUNT RECEIVED
ORIGINAL DURING REPORTING UNPAID
IDENTITY AND ADDRESS AMOUNT YEAR BALANCE AT TERMS AMOUNT OVERDUE
OF OBLIGOR OF LOAN ------------------- YEAR END ---------------------------------- -------------------
PRINCIPAL INTEREST LOAN DATE INTEREST RATE MATURITY PRINCIPAL INTEREST
Janice B. Wilkes $5,572 $582 $157 $2,943 08/31/94 8.3% 08/31/99 $2,943 $101
1818 Englewood Way
Snellville, GA 30278
Allen M. Hintz 9,500 277 22 2,878 08/31/94 8.3% 08/31/97 2,878 198
40597 Slife Road
La Grange, OH 44050
Kenneth E. Stamm 3,600 290 40 2,329 02/29/96 9.5% 02/28/98 2,329 185
469 N. Wattles Road
Battle Creek, MI 49017
James A. Byrd 5,000 - - 3,936 08/31/94 8.3% 08/31/99 3,936 190
1374 Merrybrook
Kalamazoo, MI 49004
Gary W. Shoffner 20,000 14,044 114 309 01/31/95 9.5% 01/31/00 309 22
3464 Center Road
Hastings, MI 49058
Stephen R. Crane 20,000 - - 14,958 02/28/95 9.5% 02/29/00 14,958 1,066
16435 M-89
Augusta, MI 49012
Robert L. Birt 10,000 - - 6,326 08/31/94 8.3% 08/31/99 6,326 348
4910 Arcaida
Omaha, NE 68114
17
KELLOGG COMPANY SALARIED 14
SAVINGS AND INVESTMENT PLAN
ITEM 27b - SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS - OCTOBER 31, 1997
AMOUNT RECEIVED
ORIGINAL DURING REPORTING UNPAID
IDENTITY AND ADDRESS AMOUNT YEAR BALANCE AT TERMS AMOUNT OVERDUE
OF OBLIGOR OF LOAN ------------------- YEAR END ---------------------------------- -------------------
PRINCIPAL INTEREST LOAN DATE INTEREST RATE MATURITY PRINCIPAL INTEREST
Linda F. Carter-Thomas $12,000 $568 $175 $7,626 11/30/94 8.8% 11/30/97 $7,626 $445
517 S. Moorland Dr.
Battle Creek, MI 49015
Veronica L. Riley 10,000 2,330 418 7,670 10/31/96 9.3% 10/31/98 7,670 118
258 E. Michigan Ave.
Kalamazoo, MI 49007
Robyn Smith 1,000 - - 767 02/28/95 9.5% 02/28/97 767 67
500 Fort St.
Papillion, NE 68046
Karlee M. Smith 1,000 29 23 971 06/30/97 9.5% 06/30/02 971 -
256 Hunter St.
Battle Creek, MI 49017
Rosetta M. Albright 25,000 - - 19,558 08/31/94 8.3% 08/31/99 19,558 1,479
950 Hester Rd.
Memphis, TN 38116
John Flood 6,100 261 185 5,839 12/31/96 9.3% 12/31/01 5,839 225
374 Casca Cove
Collierville, TN 38017
Kimberly C. Rankhorn 1,124 249 11 102 04/30/95 10.0% 04/30/97 102 6
185 High St.
Rossville, TN 38066
18
KELLOGG COMPANY SALARIED 15
SAVINGS AND INVESTMENT PLAN
ITEM 27b - SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS - OCTOBER 31, 1997
AMOUNT RECEIVED
ORIGINAL DURING REPORTING UNPAID
IDENTITY AND ADDRESS AMOUNT YEAR BALANCE AT TERMS AMOUNT OVERDUE
OF OBLIGOR OF LOAN ------------------- YEAR END ---------------------------------- -------------------
PRINCIPAL INTEREST LOAN DATE INTEREST RATE MATURITY PRINCIPAL INTEREST
L. Hibbler $5,596 $1,166 $66 $ 692 08/31/94 8.3% 08/31/97 $ 692 $ 19
3851 N. Advantage Way, #106
Memphis, TN 38128
Darryl D. Pugh 8,437 1,205 557 6,552 03/31/96 9.3% 03/31/01 6,552 -
646 W. Naranja Ave.
Mesa, AZ 85210
Lillian Goodlow 1,000 74 52 926 12/31/96 9.3% 12/31/01 926 7
401 N. Locust St.
Florence, AL 35630
Jerri S. Bridges 3,000 686 74 1,135 11/30/95 9.8% 11/30/97 1,135 37
1742 Central Ave.
Memphis, TN 38104
Lincoln Richardson, Jr. 10,000 - - 7,871 08/31/94 8.3% 08/31/99 7,871 541
1201 Kelley Court
Pinole, CA 94564
Beverly K. Carter 2,600 175 3 59 11/30/94 8.8% 11/30/96 59 3
1308 Hodges Ave.
Ruston, LA 71270
Robert D. Crawford 16,000 1,201 658 12,864 12/31/95 9.8% 12/31/00 12,864 627
308 Oakwood Dr.
Papillion, NE 68133
19
KELLOGG COMPANY SALARIED 16
SAVINGS AND INVESTMENT PLAN
ITEM 27b - SCHEUDLE OF LOANS OR FIXED INCOME OBLIGATIONS - OCTOBER 31, 1997
AMOUNT RECEIVED
ORIGINAL DURING REPORTING UNPAID
IDENTITY AND ADDRESS AMOUNT YEAR BALANCE AT TERMS AMOUNT OVERDUE
OF OBLIGOR OF LOAN ------------------- YEAR END ---------------------------------- -------------------
PRINCIPAL INTEREST LOAN DATE INTEREST RATE MATURITY PRINCIPAL INTEREST
Rhonda Brown $2,500 $134 $38 $2,366 09/30/96 9.3% 09/30/98 $2,366 $91
101 Collin Green Dr.
Prosper, TX 75078
Gertie M. Barlow 10,000 - - 7,871 08/31/94 8.3% 08/31/99 7,871 595
9755 Mockingbird Dr., #13
Omaha, NE 68103
Annette H. Gonzales 2,019 539 20 92 04/30/95 10.0% 04/30/97 92 3
6403 Lynngate Dr.
Spring, TX 77373
Leticia Tampa 1,000 77 28 656 02/28/95 9.5% 02/29/00 656 31
6242 Warner Ave., Apt 23E
Huntington Beach, CA 92647
Benjamin Ardelean 15,000 1,720 422 7,768 08/31/94 8.3% 08/31/99 7,768 267
20920 Woodland Glen, #203
Northville, MI 48167
L. Robinson-Semien 4,000 2,325 93 14 11/30/94 8.8% 11/30/98 14 1
2728 Almondridge Dr.
Antioch, CA 94509
Terrence D. Drace 24,000 - - 19,999 09/30/94 8.8% 09/30/99 19,999 1,605
431 Concord St.
Lodi, CA 95240
20
KELLOGG COMPANY SALARIED 17
SAVINGS AND INVESTMENT PLAN
ITEM 27b - SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS - OCTOBER 31, 1997
AMOUNT RECEIVED
ORIGINAL DURING REPORTING UNPAID
IDENTITY AND ADDRESS AMOUNT YEAR BALANCE AT TERMS AMOUNT OVERDUE
OF OBLIGOR OF LOAN ------------------- YEAR END ---------------------------------- -------------------
PRINCIPAL INTEREST LOAN DATE INTEREST RATE MATURITY PRINCIPAL INTEREST
Judith A. Bieger $18,000 $2,013 $1,182 $15,987 09/30/96 9.3% 09/30/01 $15,987 $ -
5020 Rodeo Circle
Antioch, CA 94509
Daniel Perez 13,000 209 57 10,024 08/31/94 8.3% 08/31/99 10,024 758
10410 Singleton Rd.
San Jose, CA 95111
21
KELLOGG COMPANY SALARIED 18
SAVINGS AND INVESTMENT PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS - YEAR ENDED OCTOBER 31, 1997 (1)
CURRENT VALUE AT TRANSACTION DATE
--------------------------------- COST OF NET
NET NET SECURITIES REALIZED
IDENTITY OF ISSUE PURCHASE PRICE SALES PRICE SOLD GAIN
TBC Inc., Pooled Employee Funds -
Daily Liquidity Fund $60,654,537 $67,820,163 $67,820,163 $ -
John Hancock GAC #5917-10001
8.30% 6/1/95 1,544,616 26,041,340 26,041,340
(1) Represents Plan's interest in a transaction (or a series of transactions
of the same issue) in excess of five percent of the Plan's assets
available at November 1, 1996.