Reportable Segments

12 Months Ended

Dec. 30, 2017

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

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 has the following reportable segments: U.S. Morning Foods; U.S. Snacks; U.S. Specialty; North America Other; Europe; Latin America; and Asia Pacific. The Company manages its operations through 10 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 reportable segment includes primarily cereal and toaster pastries.

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 retailing outlets.

North America Other includes the U.S. Frozen, Kashi, Canada, and RXBAR 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 3 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 immaterial for all periods presented.

(millions)	2017		2016			2015
Net sales
U.S. Morning Foods	$	2,778	$	2,931		$	2,992
U.S. Snacks	3,067		3,198			3,234
U.S. Specialty	1,249		1,214			1,181
North America Other	1,616		1,598			1,687
Europe	2,291		2,377			2,497
Latin America	955		780			1,015
Asia Pacific	967		916			919
Consolidated	$	12,923	$	13,014		$	13,525
Operating profit
U.S. Morning Foods	$	601	$	593		$	474
U.S. Snacks	115		324			385
U.S. Specialty	312		279			260
North America Other	230		181			178
Europe	279		205			247
Latin America	108		84			9
Asia Pacific	86		70			54
Total Reportable Segments	1,731		1,736			1,607
Corporate	215		(341		)	(516		)
Consolidated	$	1,946	$	1,395		$	1,091
Depreciation and amortization (a)
U.S. Morning Foods	$	120	$	122		$	123
U.S. Snacks	146		159			135
U.S. Specialty	13		11			11
North America Other	51		56			74
Europe	80		114			120
Latin America	37		22			28
Asia Pacific	33		30			29
Total Reportable Segments	480		514			520
Corporate	1		3			14
Consolidated	$	481	$	517		$	534

(a) Includes asset impairment charges as discussed in Note 14.

Certain items such as interest expense and income taxes, while not included in the measure of reportable segment operating results, are regularly reviewed by Management for the Company’s internationally-based reportable segments as shown below.

(millions)	2017			2016			2015
Interest expense
North America	$	3		$	5		$	5
Europe	16			8			5
Latin America	2			4			5
Asia Pacific	2			2			2
Corporate	233			387			210
Consolidated	$	256		$	406		$	227
Income taxes
Europe	$	(38	)	$	(17	)	$	10
Latin America	33			30			34
Asia Pacific	12			14			—
Corporate & North America	405			206			115
Consolidated	$	412		$	233		$	159

Management reviews balance sheet information, including total assets, based on geography. For all North American-based operating segments, balance sheet information is reviewed by Management in total and not on an individual operating segment basis.

(millions)	2017			2016			2015
Total assets
North America	$	10,867		$	10,533		$	10,363
Europe	4,057			3,824			3,742
Latin America	1,094			1,136			587
Asia Pacific	1,225			1,158			1,106
Corporate	1,426			1,248			1,184
Elimination entries	(2,319		)	(2,788		)	(1,731		)
Consolidated	$	16,350		$	15,111		$	15,251
Additions to long-lived assets
North America	$	329		$	318		$	342
Europe	106			125			110
Latin America	32			24			23
Asia Pacific	30			36			76
Corporate	4			4			2
Consolidated	$	501		$	507		$	553

The Company’s largest customer, Wal-Mart Stores, Inc. and its affiliates, accounted for approximately 20% of consolidated net sales during 2017, 20% in 2016, and 21% in 2015, comprised principally of sales within the United States.

Supplemental geographic information is provided below for net sales to external customers and long-lived assets:

(millions)	2017		2016		2015
Net sales
United States	$	8,196	$	8,438	$	8,560
All other countries	4,727		4,576		4,965
Consolidated	$	12,923	$	13,014	$	13,525
Long-lived assets
United States	$	2,195	$	2,208	$	2,220
All other countries	1,521		1,361		1,401
Consolidated	$	3,716	$	3,569	$	3,621

Supplemental product information is provided below for net sales to external customers:

(millions)	2017		2016		2015
Snacks	$	6,700	$	6,660	$	6,698
Cereal	5,270		5,440		5,871
Frozen	953		914		956
Consolidated	$	12,923	$	13,014	$	13,525