Reportable Segments

6 Months Ended

Jul. 01, 2017

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)	July 1, 2017		July 2, 2016		July 1, 2017			July 2, 2016
Net sales
U.S. Morning Foods	$	679	$	727	$	1,398		$	1,494
U.S. Snacks	803		803		1,584			1,635
U.S. Specialty	276		271		671			647
North America Other	391		406		784			820
Europe	566		629		1,078			1,227
Latin America	234		204		456			396
Asia Pacific	238		228		470			444
Consolidated	$	3,187	$	3,268	$	6,441		$	6,663
Operating profit
U.S. Morning Foods	$	176	$	165	$	336		$	313
U.S. Snacks	22		69		(22		)	152
U.S. Specialty	70		60		166			146
North America Other	59		47		108			92
Europe	76		68		142			138
Latin America (a)	26		20		59			43
Asia Pacific	19		12		41			29
Total Reportable Segments	448		441		830			913
Corporate (b)	5		8		(17		)	(26		)
Consolidated	$	453	$	449	$	813		$	887

(a) Includes non-cash losses totaling $7 million and $13 million associated with the remeasurement of the financial statements of the Company's Venezuela subsidiary during the quarter and year-to-date periods ended July 2, 2016, respectively.

(b) Includes mark-to-market adjustments for pension and postretirement plans, commodity and foreign currency contracts totaling $7 million and $20 million for the quarters ended July 1, 2017 and July 2, 2016, respectively. Includes mark-to-market adjustments for pension and postretirement plans, commodity and foreign currency contracts totaling ($14) million and ($4) million for the year-to-date periods ended July 1, 2017 and July 2, 2016, respectively.