Reportable Segments

9 Months Ended

Oct. 01, 2016

Segment Reporting [Abstract]

Reportable Segments

Reportable segments

Kellogg Company is the world’s leading producer of cereal, second largest producer of cookies and crackers, and a leading producer of savory snacks and frozen foods. Additional product offerings include toaster pastries, cereal bars, fruit-flavored snacks and veggie foods. Kellogg products are manufactured and marketed globally. Principal markets for these products include the United States and United Kingdom.

The Company manages its operations through nine operating segments that are based on product category or geographic location. These operating segments are evaluated for similarity with regards to economic characteristics, products, production processes, types or classes of customers, distribution methods and regulatory environments to determine if they can be aggregated into reportable segments. The reportable segments are discussed in greater detail below.

The U.S. Morning Foods operating segment includes cereal, toaster pastries, and health and wellness beverages and bars.

U.S. Snacks includes cookies, crackers, cereal bars, savory snacks and fruit-flavored snacks.

U.S. Specialty primarily represents food away from home channels, including food service, convenience, vending, Girl Scouts and food manufacturing. The food service business is mostly non-commercial, serving institutions such as schools and hospitals. The convenience business includes traditional convenience stores as well as alternate retail outlets.

North America Other includes the U.S. Frozen, Kashi and Canada operating segments. As these operating segments are not considered economically similar enough to aggregate with other operating segments and are immaterial for separate disclosure, they have been grouped together as a single reportable segment.

The three remaining reportable segments are based on geographic location – Europe which consists principally of European countries; Latin America which consists of Central and South America and includes Mexico; and Asia Pacific which consists of Sub-Saharan Africa, Australia and other Asian and Pacific markets.

The measurement of reportable segment results is based on segment operating profit which is generally consistent with the presentation of operating profit in the Consolidated Statement of Income. Intercompany transactions between operating segments were insignificant in all periods presented.

	Quarter ended						Year-to-date period ended
(millions)	October 1, 2016			October 3, 2015			October 1, 2016			October 3, 2015
Net sales
U.S. Morning Foods	$	733		$	762		$	2,227		$	2,280
U.S. Snacks	796			795			2,431			2,484
U.S. Specialty	284			281			931			912
North America Other	402			426			1,222			1,298
Europe	594			628			1,821			1,885
Latin America	197			202			593			825
Asia Pacific	248			235			692			699
Consolidated	$	3,254		$	3,329		$	9,917		$	10,383
Operating profit
U.S. Morning Foods	$	144		$	110		$	457		$	368
U.S. Snacks (a)	78			62			230			302
U.S. Specialty	68			63			214			200
North America Other	43			44			135			140
Europe	78			73			216			191
Latin America (b)	27			7			70			2
Asia Pacific	21			14			50			36
Total Reportable Segments	459			373			1,372			1,239
Corporate (c)	(49		)	(39		)	(75		)	(109		)
Consolidated	$	410		$	334		$	1,297		$	1,130

(a) Includes a non-cash gain of $67 million associated with the deconsolidation of a VIE during the year-to-date period ended October 3, 2015.

(b) Includes non-cash losses totaling $13 million associated with the remeasurement of the financial statements of the Company's Venezuela subsidiary during the quarter ended October 3, 2015. Includes a non-cash loss of $13 million and $115 million associated with the remeasurement of the financial statements of the Company's Venezuela subsidiary during the year-to-date periods ended October 1, 2016 and October 3, 2015, respectively.

(c) Includes mark-to-market adjustments for pension plans, commodity and foreign currency contracts totaling $(31) million and ($27) million for the quarters ended October 1, 2016 and October 3, 2015, respectively. Includes mark-to-market adjustments for pension plans, commodity and foreign currency contracts totaling ($35) million and ($59) million for the year-to-date periods ended October 1, 2016 and October 3, 2015, respectively.