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 ten 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. Snacks operating segment includes cookies, crackers, cereal bars, savory snacks and fruit-flavored snacks.

U.S. Morning Foods includes primarily cereal and toaster pastries.

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, 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 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. Certain immaterial reclassifications have been made to the prior year amounts to conform with current year presentation.



	Quarter ended
(millions)	March 31, 2018			April 1, 2017
Net sales
U.S. Snacks	$	762		$	795
U.S. Morning Foods	691			708
U.S. Specialty	398			393
North America Other	479			392
Europe	587			513
Latin America	232			220
Asia Pacific	252			227
Consolidated	$	3,401		$	3,248
Operating profit
U.S. Snacks	$	102		$	(36	)
U.S. Morning Foods	150			157
U.S. Specialty	80			96
North America Other	67			49
Europe	74			66
Latin America	22			33
Asia Pacific	27			22
Total Reportable Segments	522			387
Corporate	(12		)	(107		)
Consolidated	$	510		$	280

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



	Quarter ended
(millions)	March 31, 2018		April 1, 2017
Snacks	$	1,775	$	1,717
Cereal	1,351		1,298
Frozen	275		233
Consolidated	$	3,401	$	3,248