SEPARATION TRANSACTION (Notes)

9 Months Ended

Sep. 27, 2025

Discontinued Operations and Disposal Groups [Abstract]

Discontinued operations

SEPARATION TRANSACTION

During the fourth quarter of 2023, the Company completed the separation of its North America cereal business resulting in two independent companies, Kellanova and WK Kellogg Co ("WKKC").

In connection with the separation, WKKC entered into several agreements with Kellanova that govern the relationship of the parties following the spin-off including a Separation and Distribution Agreement, a Manufacturing and Supply Agreement (“Supply Agreement”), a Tax Matters Agreement, Employee Matters Agreement, Transition Services Agreement (“TSA”), and various lease agreements.

Pursuant to the TSA, both Kellanova and WKKC agreed to provide certain services to each other, on an interim, transitional basis from and after the separation and the distribution for up to 2 years following the spin-off. The TSA covers various services such as supply chain, IT, commercial, sales, Finance, HR, R&D and other Corporate. The remuneration to be paid for such services is generally intended to allow the company providing the services to recover all of its costs and expenses of providing such services. Cost reimbursements recorded during the quarter ended September 27, 2025 were not material and as of September 27, 2025, the provision of services under the TSA had concluded. Kellanova recorded approximately $18 million of cost reimbursements related to the TSA for the year-to-date period ended September 27, 2025, of which $8 million is recognized in cost of goods sold (COGS) and $10 million in selling, general, and administrative expense (SGA) in the Consolidated Statement of Income. For the quarter and year-to-date periods ended September 28, 2024, cost reimbursements related to the TSA were $37 million and $128 million, respectively, of which $22 million and $84 million is recognized in COGS, respectively, and $15 million and $44 million in SGA, respectively, in the Consolidated Statement of Income. These reimbursements are a direct offset within the Consolidated Statement of Income to the costs incurred related to providing services under the TSA.

Pursuant to the Supply Agreement, Kellanova will continue to supply certain inventory to WKKC for a period of up to 3 years following the spin-off. During the quarter and year-to-date period ended September 27, 2025, the Company recognized net sales to WKKC of $7 million and $25 million, respectively, and cost of sales of $6 million and $22 million, respectively. During the quarter and year-to-date periods ended September 28, 2024, the Company recognized net sales to WKKC of $9 million and $35 million, respectively, and cost of sales of $7 million and $30 million, respectively.