Reportable Segments

9 Months Ended

Sep. 30, 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)	September 30, 2017		October 1, 2016			September 30, 2017			October 1, 2016
Net sales
U.S. Morning Foods	$	710	$	733		$	2,108		$	2,227
U.S. Snacks	760		796			2,344			2,431
U.S. Specialty	290		284			961			931
North America Other	420		402			1,204			1,222
Europe	599		594			1,677			1,821
Latin America	240		197			696			593
Asia Pacific	254		248			724			692
Consolidated	$	3,273	$	3,254		$	9,714		$	9,917
Operating profit
U.S. Morning Foods	$	141	$	144		$	477		$	457
U.S. Snacks	14		78			(8		)	230
U.S. Specialty	76		68			242			214
North America Other	65		43			173			135
Europe	72		78			214			216
Latin America (a)	23		27			82			70
Asia Pacific	25		21			66			50
Total Reportable Segments	416		459			1,246			1,372
Corporate (b)	48		(49		)	31			(75		)
Consolidated	$	464	$	410		$	1,277		$	1,297

(a) Includes non-cash losses totaling $13 million associated with the remeasurement of the financial statements of the Company's Venezuela subsidiary during the year-to-date period ended October 1, 2016, respectively.

(b) Includes mark-to-market adjustments for pension and postretirement plans, commodity and foreign currency contracts totaling ($104) million and ($31) million for the quarters ended September 30, 2017 and October 1, 2016, respectively. Includes mark-to-market adjustments for pension and postretirement plans, commodity and foreign currency contracts totaling ($118) million and ($35) million for the year-to-date periods ended September 30, 2017 and October 1, 2016, respectively. See further discussion in Note 9 Employee benefits.