BATTLE CREEK, Mich., Nov. 1, 2012 (GLOBE NEWSWIRE) -- Kellogg Company (NYSE:K) today announced third quarter 2012 reported net sales of $3.7 billion, an increase of 12.3 percent from the third quarter of 2011. Internal net sales increased by 2.8 percent in the third quarter. Reported operating profit was $479 million, an increase of 3.2 percent; internal operating profit declined by 4.9 percent. Higher commodity costs, last month's recall, and a high single-digit increase in brand-building investment all had an impact on operating profit. Internal results exclude the effects of foreign currency translation, the results from the recently-acquired Pringles business, integration costs, and divestitures.
Reported third quarter 2012 net earnings were $296 million, or $0.82 per diluted share, an increase of 2.5 percent from the $0.80 per diluted share reported in the third quarter of 2011. This quarter's reported earnings per share included approximately $0.04 of integration costs related to the acquisition of Pringles. The cost of the recall announced last month was approximately $0.06 per share, which was offset by better-than-expected performance from the Pringles business and certain below-the-line items.
"We're pleased with the improving trends in our underlying performance, which is in-line with our expectations and includes strong revenue growth in many of our businesses," said John Bryant, Kellogg Company's president and chief executive officer. "We're also pleased that the Pringles business performed better during the quarter than we had expected. While it's early, we remain optimistic regarding the potential of this iconic brand."
North America
Kellogg North America's third quarter reported net sales increased by 11.1 percent to $2.5 billion; internal net sales increased by 3.7 percent, including the impact of last month's recall. The U.S. Morning Foods and Kashi segment posted internal net sales growth of 5.4 percent. The segment posted strong performance in both the cereal and toaster pastry businesses during the quarter. Internal net sales growth in the U.S. Snacks business was 0.3 percent; this growth, however, built on the strong five percent growth posted in the third quarter of last year. The U.S. Specialty segment posted third quarter internal net sales growth of 5.5 percent. The North America Other segment reported internal net sales growth of 5.2 percent as the result of good rates of growth in the Frozen Foods business. Including the impact of the recall, North America's reported operating profit increased by 6.8 percent and internal operating profit decreased by 1.6 percent.
International
Kellogg International's reported net sales increased to $1.3 billion, or by 14.8 percent from the third quarter of 2011; internal net sales increased by one percent. The Latin American business posted quarterly internal net sales growth of 3.6 percent. Internal net sales of the European business decreased by 2.5 percent, a sequential improvement over the performance posted earlier this year, as expected. Within this segment, the U.K. business posted increased internal net sales. The Asia Pacific segment posted internal net sales growth of 6.8 percent in the quarter as the result of good performance in Australia, South Africa, and India. Kellogg International's reported third quarter 2012 operating profit declined by 2.7 percent; internal operating profit declined by 10.5 percent, due to results in Europe and a strong increase in investment in brand building in both Asia Pacific and Latin America.
Interest and Tax
Interest expense was $73 million in the third quarter. The effective tax rate was 28.8 percent.
Cash flow
Year-to-date cash flow, defined as cash from operating activities less capital expenditure, was $1,113 million through the end of the third quarter, a year-over-year increase of $236 million. This includes a working-capital benefit from the acquisition of Pringles and lower capital expenditure than in the comparable period of 2011.
Full-Year 2012 Guidance
The company reaffirmed its guidance for full-year internal net sales growth of between two and three percent. Due to the cost of last month's recall, the company now expects that full-year internal operating profit will decline between four and six percent. The company also reaffirmed its guidance for as-reported earnings per share to be in a range between $3.18 and $3.30 per share, including the cost of the recall and the anticipated impact of the Pringles acquisition.
Bryant continued, "Our third quarter results reflect the continued progress we have made in our performance and are testament to the hard work of Kellogg's employees around the world."
Conference Call / Webcast
Kellogg will host a conference call to discuss these results on November 1, 2012 at 9:30 a.m. Eastern Time. The conference call and accompanying presentation slides will be broadcast live over the Internet at http://investor.kelloggs.com. Analysts and institutional investors may participate in the Q&A session by dialing (888) 338-8373 in the U.S., and (973) 872-3000 outside of the U.S. Members of the media and the public are invited to attend in a listen-only mode. Rebroadcast information is available at http://investor.kelloggs.com.
About Kellogg Company
Driven to enrich and delight the world through foods and brands that matter, Kellogg Company (NYSE:K) is the world's leading producer of cereal, second largest producer of cookies and crackers and - through the May 2012 acquisition of the iconic Pringles® business - the world's second largest savory snacks company. In addition, Kellogg is a leading producer of frozen foods. Every day, our well-loved brands - produced in 18 countries and marketed in more than 180 countries - nourish families so they can flourish and thrive. With 2011 sales of more than $13 billion, these brands include Cheez-It®, Coco Pops®, Corn Flakes®, Eggo®, Frosted Flakes®, Kashi®, Keebler®, Kellogg's®, Mini-Wheats®, Pop-Tarts®, Pringles®, Rice Krispies®, Special K®, and many more. To learn more about Kellogg Company, including our corporate responsibility initiatives and rich heritage, please visit www.kelloggcompany.com.
The Kellogg Company logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3194
Forward-Looking Statements Disclosure
This news release contains, or incorporates by reference, "forward-looking statements" with projections concerning, among other things, the integration of the Pringles® business, the Company's strategy, and the Company's sales, earnings, margin, operating profit, costs and expenditures, interest expense, tax rate, capital expenditure, dividends, cash flow, debt reduction, share repurchases, costs, brand building, ROIC, working capital, growth, new products, innovation, cost reduction projects, and competitive pressures. Forward-looking statements include predictions of future results or activities and may contain the words "expects," "believes," "should," "will," "anticipates," "projects," "estimates," "implies," "can," or words or phrases of similar meaning.
The Company's actual results or activities may differ materially from these predictions. The Company's future results could also be affected by a variety of factors, including the ability to integrate the Pringles® business and the realization of the anticipated benefits from the acquisition in the amounts and at the times expected, the impact of competitive conditions; the effectiveness of pricing, advertising, and promotional programs; the success of innovation, renovation and new product introductions; the recoverability of the carrying value of goodwill and other intangibles; the success of productivity improvements and business transitions; commodity and energy prices; labor costs; disruptions or inefficiencies in supply chain; the availability of and interest rates on short-term and long-term financing; actual market performance of benefit plan trust investments; the levels of spending on systems initiatives, properties, business opportunities, integration of acquired businesses, and other general and administrative costs; changes in consumer behavior and preferences; the effect of U.S. and foreign economic conditions on items such as interest rates, statutory tax rates, currency conversion and availability; legal and regulatory factors including changes in food safety, advertising and labeling laws and regulations; the ultimate impact of product recalls; business disruption or other losses from war, terrorist acts or political unrest; and other items.
Forward-looking statements speak only as of the date they were made, and the Company undertakes no obligation to update them publicly.
| Kellogg Company and Subsidiaries | ||||
| CONSOLIDATED STATEMENT OF INCOME | ||||
| (millions, except per share data) | ||||
| Quarter ended | Year-to-date period ended | |||
| (Results are unaudited) | September 29, 2012 | October 1, 2011 | September 29, 2012 | October 1, 2011 |
| Net sales | $3,720 | $3,312 | $10,634 | $10,183 |
| Cost of goods sold | 2,278 | 1,962 | 6,407 | 5,969 |
| Selling, general and administrative expense | 963 | 886 | 2,728 | 2,635 |
| Operating profit | 479 | 464 | 1,499 | 1,579 |
| Interest expense | 73 | 58 | 195 | 178 |
| Other income (expense), net | 11 | (9) | 31 | (10) |
| Income before income taxes | 417 | 397 | 1,335 | 1,391 |
| Income taxes | 120 | 107 | 379 | 394 |
| Earnings (loss) from joint ventures | (1) | -- | (1) | -- |
| Net income | $296 | $290 | $955 | $997 |
| Net income (loss) attributable to noncontrolling interests | -- | -- | -- | (2) |
| Net income attributable to Kellogg Company | $296 | $290 | $955 | $999 |
| Per share amounts: | ||||
| Basic | $.83 | $.81 | $2.67 | $2.75 |
| Diluted | $.82 | $.80 | $2.66 | $2.73 |
| Dividends per share | $.440 | $.430 | $1.300 | $1.240 |
| Average shares outstanding: | ||||
| Basic | 358 | 360 | 357 | 363 |
| Diluted | 359 | 363 | 359 | 365 |
| Actual shares outstanding at period end | 358 | 359 | ||
| Kellogg Company and Subsidiaries | ||||
| SELECTED OPERATING SEGMENT DATA | ||||
| (millions) | ||||
| Quarter ended | Year-to-date period ended | |||
| (Results are unaudited) |
September 29, 2012 |
October 1, 2011 |
September 29, 2012 |
October 1, 2011 |
| Net sales | ||||
| U.S. Morning Foods & Kashi | $946 | $897 | $2,826 | $2,782 |
| U.S. Snacks | 865 | 727 | 2,410 | 2,181 |
| U.S. Specialty | 264 | 234 | 864 | 789 |
| North America Other | 388 | 359 | 1,125 | 1,060 |
| Europe | 685 | 585 | 1,836 | 1,840 |
| Latin America | 292 | 274 | 836 | 816 |
| Asia Pacific | 280 | 236 | 737 | 715 |
| Consolidated | $3,720 | $3,312 | $10,634 | $10,183 |
| Operating profit | ||||
| U.S. Morning Foods & Kashi | $137 | $134 | $479 | $491 |
| U.S. Snacks | 116 | 94 | 351 | 329 |
| U.S. Specialty | 62 | 64 | 188 | 185 |
| North America Other | 66 | 65 | 206 | 198 |
| Europe | 84 | 84 | 234 | 287 |
| Latin America | 35 | 43 | 134 | 152 |
| Asia Pacific | 29 | 23 | 79 | 79 |
| Total Reportable Segments | 529 | 507 | 1,671 | 1,721 |
| Corporate | (50) | (43) | (172) | (142) |
| Consolidated | $479 | $464 | $1,499 | $1,579 |
| Kellogg Company and Subsidiaries | ||
| CONSOLIDATED STATEMENT OF CASH FLOWS | ||
| (millions) | ||
| Year-to-date period ended | ||
| (unaudited) |
September 29, 2012 |
October 1, 2011 |
| Operating activities | ||
| Net income | $955 | $997 |
| Adjustments to reconcile net income to | ||
| operating cash flows: | ||
| Depreciation and amortization | 302 | 270 |
| Deferred income taxes | (40) | (2) |
| Other | 57 | 133 |
| Postretirement benefit plan contributions | (43) | (187) |
| Changes in operating assets and liabilities | 144 | 58 |
| Net cash provided by operating activities | 1,375 | 1,269 |
| Investing activities | ||
| Additions to properties | (262) | (392) |
| Acquisitions, net of cash acquired | (2,674) | -- |
| Other | 8 | 11 |
| Net cash used in investing activities | (2,928) | (381) |
| Financing activities | ||
| Net issuances of notes payable | 112 | 689 |
| Issuances of long-term debt | 1,727 | 397 |
| Reductions of long-term debt | -- | (946) |
| Net issuances of common stock | 87 | 265 |
| Common stock repurchases | (63) | (693) |
| Cash dividends | (464) | (452) |
| Other | (2) | 10 |
| Net cash provided by (used in) financing activities | 1,397 | (730) |
| Effect of exchange rate changes on cash and cash equivalents | 1 | (20) |
| Increase (decrease) in cash and cash equivalents | (155) | 138 |
| Cash and cash equivalents at beginning of period | 460 | 444 |
| Cash and cash equivalents at end of period | $305 | $582 |
| Supplemental financial data: | ||
| Cash Flow (operating cash flow less property additions) (a) | $1,113 | $877 |
| (a) We use this non-GAAP measure of cash flow to focus management and investors on the amount of cash available for debt reduction, dividend distributions, acquisition opportunities, and share repurchase. | ||
| Kellogg Company and Subsidiaries | ||
| CONSOLIDATED BALANCE SHEET | ||
| (millions, except per share data) | ||
|
September 29, 2012 |
December 31, 2011 |
|
| (unaudited) | * | |
| Current assets | ||
| Cash and cash equivalents | $305 | $460 |
| Accounts receivable, net | 1,414 | 1,188 |
| Inventories: | ||
| Raw materials and supplies | 292 | 247 |
| Finished goods and materials in process | 987 | 885 |
| Deferred income taxes | 172 | 149 |
| Other prepaid assets | 136 | 98 |
| Total current assets | 3,306 | 3,027 |
| Property, net of accumulated depreciation | ||
| of $5,132 and $4,847 | 3,599 | 3,281 |
| Goodwill | 5,025 | 3,623 |
| Other intangibles, net of accumulated amortization | ||
| of $50 and $49 | 2,255 | 1,454 |
| Pension | 233 | 150 |
| Other assets | 436 | 366 |
| Total assets | $14,854 | $11,901 |
| Current liabilities | ||
| Current maturities of long-term debt | $1,510 | $761 |
| Notes payable | 362 | 234 |
| Accounts payable | 1,338 | 1,189 |
| Accrued advertising and promotion | 533 | 410 |
| Accrued income taxes | 16 | 66 |
| Accrued salaries and wages | 250 | 242 |
| Other current liabilities | 505 | 411 |
| Total current liabilities | 4,514 | 3,313 |
| Long-term debt | 6,065 | 5,037 |
| Deferred income taxes | 643 | 637 |
| Pension liability | 564 | 560 |
| Nonpension postretirement benefits | 199 | 188 |
| Other liabilities | 431 | 404 |
| Commitments and contingencies | ||
| Equity | ||
| Common stock, $.25 par value | 105 | 105 |
| Capital in excess of par value | 553 | 522 |
| Retained earnings | 7,196 | 6,721 |
| Treasury stock, at cost | (3,095) | (3,130) |
| Accumulated other comprehensive income (loss) | (2,323) | (2,458) |
| Total Kellogg Company equity | 2,436 | 1,760 |
| Noncontrolling interests | 2 | 2 |
| Total equity | 2,438 | 1,762 |
| Total liabilities and equity | $14,854 | $11,901 |
| * Condensed from audited financial statements. | ||
| Kellogg Company and Subsidiaries | ||||||||||
| Analysis of net sales and operating profit performance | ||||||||||
| Third quarter of 2012 versus 2011 | ||||||||||
| U.S. | ||||||||||
| Morning Foods | U.S. | U.S. | North America | North | Latin | Asia | Corp- | Consoli- | ||
| (dollars in millions) | & Kashi | Snacks | Specialty | Other | America | Europe | America | Pacific | orate | dated |
| 2012 net sales | $ 946 | $ 865 | $ 264 | $ 388 | $ 2,463 | $ 685 | $ 292 | $ 280 | $ -- | $ 3,720 |
| 2011 net sales | $ 897 | $ 727 | $ 234 | $ 359 | $ 2,217 | $ 585 | $ 274 | $ 236 | $ -- | $ 3,312 |
| % change - 2012 vs. 2011: | ||||||||||
| Volume (tonnage) (a) | .5% | -2.2% | -3.5% | 9.0% | -- | .1% | ||||
| Pricing/mix | 3.2% | -.3% | 7.1% | -2.2% | -- | 2.7% | ||||
| Subtotal - internal business (b) | 5.4% | .3% | 5.5% | 5.2% | 3.7% | -2.5% | 3.6% | 6.8% | -- | 2.8% |
| Acquisitions (c) | --% | 18.7% | 7.4% | 3.2% | 7.4% | 25.7% | 6.6% | 18.4% | -- | 11.3% |
| Dispositions (d) | --% | --% | --% | --% | --% | --% | --% | -2.8% | -- | -.2% |
| Foreign currency impact | --% | --% | --% | -.2% | --% | -6.0% | -3.6% | -3.9% | -- | -1.6% |
| Total change | 5.4% | 19.0% | 12.9% | 8.2% | 11.1% | 17.2% | 6.6% | 18.5% | -- | 12.3% |
| U.S. | ||||||||||
| Morning Foods | U.S. | U.S. | North America | North | Latin | Asia | Corp- | Consoli- | ||
| (dollars in millions) | & Kashi | Snacks | Specialty | Other | America | Europe | America | Pacific | orate | dated |
| 2012 operating profit | $ 137 | $ 116 | $ 62 | $ 66 | $ 381 | $ 84 | $ 35 | $ 29 | $ (50) | $ 479 |
| 2011 operating profit | $ 134 | $ 94 | $ 64 | $ 65 | $ 357 | $ 84 | $ 43 | $ 23 | $ (43) | $ 464 |
| % change - 2012 vs. 2011: | ||||||||||
| Internal business (b) | 2.7% | -3.0% | -8.6% | -1.4% | -1.6% | -7.7% | -16.7% | -3.4% | -6.1% | -4.9% |
| Acquisitions (c) | --% | 33.5% | 5.5% | 3.2% | 10.4% | 19.1% | 2.0% | 27.3% | -6.4% | 12.4% |
| Dispositions (d) | --% | --% | --% | --% | --% | --% | --% | 7.9% | --% | .4% |
| Integration impact (e) | --% | -7.8% | --% | --% | -2.1% | -7.9% | -.8% | -2.6% | -7.8% | -3.9% |
| Foreign currency impact | -.1% | --% | --% | --% | .1% | -4.0% | -.6% | -.8% | --% | -.8% |
| Total change | 2.6% | 22.7% | -3.1% | 1.8% | 6.8% | -.5% | -16.1% | 28.4% | -20.3% | 3.2% |
| (a) We measure the volume impact (tonnage) on revenues based on the stated weight of our product shipments. | ||||||||||
| (b) Internal net sales and operating profit growth for 2012, exclude the impact of acquisitions, divestitures, integration costs and impact of currency. Internal net sales and operating profit growth are non-GAAP financial measures which are reconciled to the directly comparable measures in accordance with U.S. GAAP within these tables. | ||||||||||
| (c) Impact of results for the quarter ended September 29, 2012 from the acquisition of Pringles. | ||||||||||
| (d) Impact of results for the quarter ended September 29, 2012 from the divestiture of Navigable Foods. | ||||||||||
| (e) Includes impact of integration costs associated with the Pringles acquisition. | ||||||||||
| Kellogg Company and Subsidiaries | ||||||||||
| Analysis of net sales and operating profit performance | ||||||||||
| Year-to-date 2012 versus 2011 | ||||||||||
| U.S. | ||||||||||
| Morning Foods | U.S. | U.S. | North | North | Latin | Asia | Corp- | Consoli- | ||
| (dollars in millions) | & Kashi | Snacks | Specialty | America Other | America | Europe | America | Pacific | orate | dated |
| 2012 net sales | $ 2,826 | $ 2,410 | $ 864 | $ 1,125 | $ 7,225 | $ 1,836 | $ 836 | $ 737 | $ -- | $ 10,634 |
| 2011 net sales | $ 2,782 | $ 2,181 | $ 789 | $ 1,060 | $ 6,812 | $ 1,840 | $ 816 | $ 715 | $ -- | $ 10,183 |
| % change - 2012 vs. 2011: | ||||||||||
| Volume (tonnage) (a) | -1.0% | -6.1% | -2.7% | 3.9% | -- | -1.8% | ||||
| Pricing/mix | 4.0% | .6% | 8.6% | -1.8% | -- | 3.5% | ||||
| Subtotal - internal business (b) | 1.6% | 2.2% | 6.7% | 5.8% | 3.0% | -5.5% | 5.9% | 2.1% | -- | 1.7% |
| Acquisitions (c) | --% | 8.3% | 2.9% | 1.4% | 3.2% | 10.9% | 2.4% | 8.0% | -- | 4.9% |
| Dispositions (d) | --% | --% | --% | --% | --% | --% | --% | -3.3% | -- | -.2% |
| Foreign currency impact | --% | --% | --% | -1.1% | -.1% | -5.6% | -5.9% | -3.7% | -- | -2.0% |
| Total change | 1.6% | 10.5% | 9.6% | 6.1% | 6.1% | -.2% | 2.4% | 3.1% | -- | 4.4% |
| U.S. | ||||||||||
| Morning Foods | U.S. | U.S. | North | North | Latin | Asia | Corp- | Consoli- | ||
| (dollars in millions) | & Kashi | Snacks | Specialty | America Other | America | Europe | America | Pacific | orate | dated |
| 2012 operating profit | $ 479 | $ 351 | $ 188 | $ 206 | $ 1,224 | $ 234 | $ 134 | $ 79 | $ (172) | $ 1,499 |
| 2011 operating profit | $ 491 | $ 329 | $ 185 | $ 198 | $ 1,203 | $ 287 | $ 152 | $ 79 | $ (142) | $ 1,579 |
| % change - 2012 vs. 2011: | ||||||||||
| Internal business (b) | -2.6% | -2.6% | -1.1% | 4.5% | -1.2% | -16.3% | -7.4% | -11.4% | -2.1% | -5.4% |
| Acquisitions (c) | --% | 11.9% | 2.7% | 1.1% | 3.9% | 6.1% | .6% | 7.9% | -2.1% | 4.3% |
| Dispositions (d) | --% | --% | --% | --% | --% | --% | --% | 6.7% | --% | .4% |
| Integration impact (e) | --% | -2.6% | --% | --% | -.7% | -4.9% | -.3% | -1.8% | -17.8% | -3.2% |
| Foreign currency impact | .1% | --% | --% | -1.3% | -.3% | -3.5% | -4.4% | -.7% | --% | -1.2% |
| Total change | -2.5% | 6.7% | 1.6% | 4.3% | 1.7% | -18.6% | -11.5% | .7% | -22.0% | -5.1% |
| (a) We measure the volume impact (tonnage) on revenues based on the stated weight of our product shipments. | ||||||||||
| (b) Internal net sales and operating profit growth for 2012, exclude the impact of acquisitions, divestitures, transaction and integration costs and impact of currency. Internal net sales and operating profit growth are non-GAAP financial measures which are reconciled to the directly comparable measures in accordance with U.S. GAAP within these tables. | ||||||||||
| (c) Impact of results for the year-to-date period ended September 29, 2012 from the acquisition of Pringles. | ||||||||||
| (d) Impact of results for the year-to-date period ended September 29, 2012 from the divestiture of Navigable Foods. | ||||||||||
| (e) Includes impact of transaction and integration costs associated with the Pringles acquisition. | ||||||||||
| Kellogg Company and Subsidiaries | ||||||
| Up-Front Costs* | ||||||
| $ millions | ||||||
| Quarter ended September 29, 2012 | Year-to-date period ended September 29, 2012 | |||||
| Cost of goods sold (a) | Selling, general and administrative expense | Total | Cost of goods sold (a) | Selling, general and administrative expense | Total | |
| 2012 | ||||||
| U.S. Morning Foods & Kashi | $ 3 | $ 1 | $ 4 | $ 7 | $ 4 | $ 11 |
| U.S. Snacks | 2 | 2 | 4 | 4 | 6 | 10 |
| U.S. Specialty | -- | -- | -- | -- | 1 | 1 |
| North America Other | 2 | -- | 2 | 2 | 1 | 3 |
| Europe | -- | -- | -- | 3 | -- | 3 |
| Latin America | -- | -- | -- | -- | -- | -- |
| Asia Pacific | -- | 1 | 1 | -- | 1 | 1 |
| Corporate | -- | -- | -- | -- | -- | -- |
| Total | $ 7 | $ 4 | $ 11 | $ 16 | $ 13 | $ 29 |
| Quarter ended October 1, 2011 | Year-to-date period ended October 1, 2011 | |||||
| Cost of goods sold (a) | Selling, general and administrative expense | Total | Cost of goods sold (a) | Selling, general and administrative expense | Total | |
| 2011 | ||||||
| U.S. Morning Foods & Kashi | $ -- | $ 1 | $ 1 | $ 6 | $ 3 | $ 9 |
| U.S. Snacks | 2 | 8 | 10 | 5 | 15 | 20 |
| U.S. Specialty | -- | -- | -- | -- | 1 | 1 |
| North America Other | 1 | -- | 1 | 3 | -- | 3 |
| Europe | 4 | -- | 4 | 12 | -- | 12 |
| Latin America | -- | -- | -- | -- | 1 | 1 |
| Asia Pacific | -- | -- | -- | 2 | -- | 2 |
| Corporate | -- | -- | -- | -- | -- | -- |
| Total | $ 7 | $ 9 | $ 16 | $ 28 | $ 20 | $ 48 |
| 2012 Variance - better(worse) than 2011 | ||||||
| U.S. Morning Foods & Kashi | $ (3) | $ -- | $ (3) | $ (1) | $ (1) | $ (2) |
| U.S. Snacks | -- | 6 | 6 | 1 | 9 | 10 |
| U.S. Specialty | -- | -- | -- | -- | -- | -- |
| North America Other | (1) | -- | (1) | 1 | (1) | -- |
| Europe | 4 | -- | 4 | 9 | -- | 9 |
| Latin America | -- | -- | -- | -- | 1 | 1 |
| Asia Pacific | -- | (1) | (1) | 2 | (1) | 1 |
| Corporate | -- | -- | -- | -- | -- | -- |
| Total | $ -- | $ 5 | $ 5 | $ 12 | $ 7 | $ 19 |
| * Up-front costs are charges incurred by the Company which will result in future cash savings and/or reduced depreciation. | ||||||
| (a) Includes expense associated with capital projects across our supply chain network incurred primarily in North America. | ||||||
| Kellogg Company and Subsidiaries | ||||||||
| Transaction and Integration Costs* | ||||||||
| $ millions | ||||||||
| Quarter ended September 29, 2012 | Year-to-date period ended September 29, 2012 | |||||||
| Cost of goods sold | Selling, general and administrative expense | Other Income/Expense | Total | Cost of goods sold | Selling, general and administrative expense | Other Income/Expense | Total | |
| 2012 | ||||||||
| U.S. Snacks | $ -- | $ 8 | $ -- | $ 8 | $ -- | $ 9 | $ -- | $ 9 |
| Europe | 1 | 6 | -- | 7 | 1 | 13 | -- | 14 |
| Asia Pacific | -- | -- | -- | -- | -- | 1 | -- | 1 |
| Corporate | -- | 3 | -- | 3 | -- | 25 | 5 | 30 |
| Total | $ 1 | $ 17 | $ -- | $ 18 | $ 1 | $ 48 | $ 5 | $ 54 |
| * Transaction and integration costs are charges incurred by the Company as a direct result of the work performed for the acquisition of the Pringles business. No transaction costs were incurred during the quarter ended September 29, 2012. | ||||||||