Equity

12 Months Ended

Dec. 31, 2011

Equity [Abstract]

Equity [Text Block]

NOTE4

EQUITY

Earnings per share

Basic 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 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 consist principally of employee stock options issued by the Company, and to a lesser extent, certain contingently issuable performance shares. Basic earnings per share is reconciled to diluted earnings per share in the following table:

			Net income	Average
			attributable to	shares		Earnings
(millions, except per share data)			Kellogg Company	outstanding		per share
2011
	Basic	$	1,231	362	$	3.40
	Dilutive potential common shares			2		(0.02)
	Diluted	$	1,231	364	$	3.38
2010
	Basic	$	1,247	376	$	3.32
	Dilutive potential common shares			2		(0.02)
	Diluted	$	1,247	378	$	3.30
2009
	Basic	$	1,212	382	$	3.17
	Dilutive potential common shares			2		(0.01)
	Diluted	$	1,212	384	$	3.16

The total number of anti-dilutive potential common shares excluded from the reconciliation for each period was (in millions): 2011-4.2; 2010-4.9; 2009-12.2.

Stock transactions

The Company issues shares to employees and directors under various equity-based compensation and stock purchase programs, as further discussed in Note 7. The number of shares issued during the periods presented was (in millions): 2011–7; 2010–5; 2009–3. The Company issued shares totaling less than one million in each of the years presented under Kellogg DirectTM, a direct stock purchase and dividend reinvestment plan for U.S. shareholders.

On April 23, 2010, the Company's board of directors authorized a $2.5 billion three-year share repurchase program for 2010 through 2012. During 2011, the Company repurchased 15million shares of common stock for a total of $793million. During 2010, the Company repurchased 21 million shares of common stock for a total of $1,057 million, of which $1,052 was paid during the year and $5 million was payable at January 1, 2011. During 2009, the Company repurchased 4 million shares of common stock at a total cost of $187 million.

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 years presented consists of foreign currency translation adjustments, fair value adjustments associated with cash flow hedges and adjustments for net experience losses and prior service cost related to employee benefit plans. In 2011, other comprehensive income also includes fair value adjustments associated with net investment hedges of foreign subsidiaries.

During 2011, the Company's postretirement and postemployment plans incurred net experience losses totaling $492 million, net of tax, due primarily to losses on plan assets and discount rate reductions. During 2010, the Company amended its U.S. postretirement healthcare benefit plan, which resulted in a $17 million decrease of a deferred tax asset and is included in tax expense with prior service credit (cost) arising during the period.

							Tax
					Pre-tax		(expense)		After-tax
(millions)					amount		or benefit		amount
2011
Net income								$	1,229
Other comprehensive loss:
	Foreign currency translation adjustments			$	(105)	$	(2)		(107)
	Cash flow hedges:
			Unrealized gain (loss) on cash flow hedges		(51)		18		(33)
			Reclassification to net earnings		(2)		1		(1)
	Postretirement and postemployment benefits:
		Amounts arising during the period:
			Net experience gain (loss)		(728)		236		(492)
			Prior service credit (cost)		(3)		1		(2)
		Reclassification to net earnings:
			Net experience loss		131		(47)		84
			Prior service cost		11		(4)		7
				$	(747)	$	203		(544)
Total comprehensive income								$	685
2010
Net income								$	1,240
Other comprehensive income:
	Foreign currency translation adjustments			$	(18)	$	-		(18)
	Cash flow hedges:
			Unrealized gain (loss) on cash flow hedges		51		(21)		30
			Reclassification to net earnings		34		(9)		25
	Postretirement and postemployment benefits:
		Amounts arising during the period:
			Net experience gain (loss)		(71)		30		(41)
			Prior service credit (cost)		(8)		(13)		(21)
		Reclassification to net earnings:
			Net experience loss		102		(32)		70
			Prior service cost		11		(4)		7
				$	101	$	(49)		52
Total comprehensive income								$	1,292
2009
Net income								$	1,208
Other comprehensive income:
	Foreign currency translation adjustments			$	65	$	-		65
	Cash flow hedges:
			Unrealized gain (loss) on cash flow hedges		(6)		3		(3)
			Reclassification to net earnings		(3)		-		(3)
	Postretirement and postemployment benefits:
		Amounts arising during the period:
			Net experience gain (loss)		161		(72)		89
			Prior service credit (cost)		(33)		11		(22)
		Reclassification to net earnings:
			Net experience loss		63		(21)		42
			Prior service cost		11		(4)		7
				$	258	$	(83)		175
Total comprehensive income								$	1,383

Accumulated other comprehensive income (loss) as of December 31, 2011 and January 1, 2011 consisted of the following:
			December 31,		January 1,
(millions)			2011		2011
Foreign currency translation adjustments		$	(896)	$	(789)
Cash flow hedges — unrealized net gain (loss)			(9)		25
Postretirement and postemployment benefits:
	Net experience loss		(1,483)		(1,075)
	Prior service cost		(70)		(75)
Total accumulated other comprehensive income (loss)		$	(2,458)	$	(1,914)