Cover Page
Cover Page | 3 Months Ended |
Apr. 03, 2021shares | |
Entity Information [Line Items] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Entity Registrant Name | KELLOGG COMPANY |
Document Period End Date | Apr. 3, 2021 |
Document Transition Report | false |
Entity File Number | 1-4171 |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 38-0710690 |
Entity Address, Address Line One | One Kellogg Square |
Entity Address, Address Line Two | P.O. Box 3599 |
Entity Address, City or Town | Battle Creek |
Entity Address, State or Province | MI |
Entity Address, Postal Zip Code | 49016-3599 |
City Area Code | 269 |
Local Phone Number | 961-2000 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding (in shares) | 340,496,336 |
Amendment Flag | false |
Document Fiscal Period Focus | Q1 |
Document Fiscal Year Focus | 2021 |
Entity Central Index Key | 0000055067 |
Current Fiscal Year End Date | --01-01 |
Common stock | |
Entity Information [Line Items] | |
Title of 12(b) Security | Common Stock, $.25 par value per share |
Trading Symbol | K |
Security Exchange Name | NYSE |
1.750% Senior Notes Due 2021 [Member] | |
Entity Information [Line Items] | |
Title of 12(b) Security | 1.750% Senior Notes due 2021 |
Trading Symbol | K 21 |
Security Exchange Name | NYSE |
0.800% Senior Notes Due 2022 [Member] | |
Entity Information [Line Items] | |
Title of 12(b) Security | 0.800% Senior Notes due 2022 |
Trading Symbol | K 22A |
Security Exchange Name | NYSE |
1.000% Senior Notes Due 2024 [Member] | |
Entity Information [Line Items] | |
Title of 12(b) Security | 1.000% Senior Notes due 2024 |
Trading Symbol | K 24 |
Security Exchange Name | NYSE |
1.250% Senior Notes Due 2025 [Member] | |
Entity Information [Line Items] | |
Title of 12(b) Security | 1.250% Senior Notes due 2025 |
Trading Symbol | K 25 |
Security Exchange Name | NYSE |
Consolidated Balance Sheet (Una
Consolidated Balance Sheet (Unaudited) - USD ($) $ in Millions | Apr. 03, 2021 | Jan. 02, 2021 |
Current assets | ||
Cash and cash equivalents | $ 391 | $ 435 |
Accounts receivable, net | 1,660 | 1,537 |
Inventories | 1,319 | 1,284 |
Other current assets | 269 | 226 |
Total current assets | 3,639 | 3,482 |
Property, net | 3,636 | 3,713 |
Operating lease right-of-use assets | 641 | 658 |
Goodwill | 5,768 | 5,799 |
Other intangibles, net | 2,449 | 2,491 |
Investments in unconsolidated entities | 397 | 391 |
Other assets | 1,534 | 1,462 |
Total assets | 18,064 | 17,996 |
Current liabilities | ||
Current maturities of long-term debt | 605 | 627 |
Notes payable | 428 | 102 |
Accounts payable | 2,476 | 2,471 |
Current operating lease liabilities | 120 | 117 |
Accrued advertising and promotion | 775 | 776 |
Other current liabilities | 981 | 1,145 |
Total current liabilities | 5,385 | 5,238 |
Long-term debt | 6,655 | 6,746 |
Operating lease liabilities | 502 | 520 |
Deferred income taxes | 634 | 562 |
Pension liability | 726 | 769 |
Other liabilities | 507 | 525 |
Commitments and contingencies | ||
Equity | ||
Common stock, $.25 par value | 105 | 105 |
Capital in excess of par value | 954 | 972 |
Retained earnings | 8,506 | 8,326 |
Treasury stock, at cost | (4,762) | (4,559) |
Accumulated other comprehensive income (loss) | (1,665) | (1,732) |
Total Kellogg Company equity | 3,138 | 3,112 |
Noncontrolling interests | 517 | 524 |
Total equity | 3,655 | 3,636 |
Total liabilities and equity | $ 18,064 | $ 17,996 |
Consolidated Balance Sheet (U_2
Consolidated Balance Sheet (Unaudited) (Parenthetical) - $ / shares | Apr. 03, 2021 | Jan. 02, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.25 | $ 0.25 |
Consolidated Statement of Incom
Consolidated Statement of Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Income Statement [Abstract] | ||
Net sales | $ 3,584 | $ 3,412 |
Cost of goods sold | 2,418 | 2,268 |
Selling, general and administrative expense | 694 | 685 |
Operating profit | 472 | 459 |
Interest expense | 59 | 64 |
Other income (expense), net | 69 | 51 |
Income before income taxes | 482 | 446 |
Income taxes | 109 | 94 |
Earnings (loss) from unconsolidated entities | (2) | (2) |
Net income | 371 | 350 |
Net income attributable to noncontrolling interests | 3 | 3 |
Net income attributable to Kellogg Company | $ 368 | $ 347 |
Per share amounts: | ||
Basic earnings (in dollars per share) | $ 1.07 | $ 1.01 |
Diluted earnings (in dollars per share) | $ 1.07 | $ 1.01 |
Average shares outstanding: | ||
Basic (in shares) | 342 | 342 |
Diluted (in shares) | 344 | 344 |
Actual shares outstanding at period end (in shares) | 340 | 343 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 371 | $ 350 |
Other comprehensive income (loss), pre-tax: | ||
Foreign currency translation adjustments, pre-tax | 33 | (241) |
Cash flow hedges, pre-tax: | ||
Unrealized gain (loss) on cash flow hedges, pre-tax | 78 | (65) |
Reclassification to net income, pre-tax | 5 | 2 |
Postretirement and postemployment benefits reclassification to net income, pre-tax: | ||
Net experience (gain) loss | (1) | (1) |
Available-for-sale securities, pre-tax | ||
Unrealized gain (loss) on available-for-sale securities, pre-tax | (2) | (3) |
Other comprehensive income (loss), pre-tax | 113 | (308) |
Other comprehensive income (loss), tax (expense) benefit | ||
Foreign currency translation adjustments, tax (expense) benefit | (34) | (20) |
Cash flow hedges, tax (expense) benefit: | ||
Unrealized gain (loss) on cash flow hedges, tax (expense) benefit | (21) | 17 |
Reclassification to net income, tax (expense) benefit | (1) | 0 |
Postretirement and postemployment benefits reclassification to net income, tax (expense) benefit: | ||
Net experience loss, tax (expense) benefit | 0 | 0 |
Available-for-sale securities, tax (expense) benefit | ||
Unrealized gain (loss) on available-for-sale securities, tax (expense) benefit | 0 | 0 |
Other comprehensive income (loss), tax (expense) benefit | (56) | (3) |
Other comprehensive income (loss), after tax: | ||
Foreign currency translation adjustments, after-tax | (1) | (261) |
Cash flow hedges, after tax | ||
Unrealized gain (loss) on cash flow hedges, after-tax | 57 | (48) |
Reclassification to net income, after-tax | 4 | 2 |
Postretirement and postemployment benefits reclassification to net income, after-tax: | ||
Net experience (gain) loss, after-tax | (1) | (1) |
Available-for-sale securities, after tax | ||
Unrealized gain (loss) on available-for-sale securities, after-tax | (2) | (3) |
Other comprehensive income (loss) | 57 | (311) |
Comprehensive income | 428 | 39 |
Net income attributable to noncontrolling interests | 3 | 3 |
Other comprehensive income (loss) attributable to noncontrolling interests | (10) | (32) |
Comprehensive income attributable to Kellogg Company | $ 435 | $ 68 |
Consolidated Statement of Equit
Consolidated Statement of Equity (Unaudited) - USD ($) shares in Millions, $ in Millions | Total | Common stock | Capital in excess of par value | Retained earnings | Treasury stock | Accumulated other comprehensive income (loss) | Total Kellogg Company equity | Non-controlling interests |
Balance (in shares) at Dec. 28, 2019 | 421 | 79 | ||||||
Balance at Dec. 28, 2019 | $ 105 | $ 921 | $ 7,859 | $ (4,690) | $ (1,448) | $ 2,747 | $ 567 | |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Dec. 28, 2019 | $ 3,314 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 350 | 347 | 347 | 3 | ||||
Dividends, Common Stock | (195) | (195) | (195) | |||||
Other comprehensive income (loss) | (311) | (279) | (279) | (32) | ||||
Stock compensation | 19 | 19 | 19 | |||||
Stock options exercised and other | 35 | (29) | (1) | $ 65 | 35 | |||
Stock options exercised and other (in shares) | (1) | |||||||
Balance (in shares) at Mar. 28, 2020 | 421 | 78 | ||||||
Balance at Mar. 28, 2020 | $ 105 | 911 | 8,010 | $ (4,625) | (1,727) | 2,674 | 538 | |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Mar. 28, 2020 | 3,212 | |||||||
Balance (in shares) at Jan. 02, 2021 | 421 | 77 | ||||||
Balance at Jan. 02, 2021 | 3,112 | $ 105 | 972 | 8,326 | $ (4,559) | (1,732) | 3,112 | 524 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Jan. 02, 2021 | 3,636 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Common stock repurchased | $ (240) | $ (240) | (240) | |||||
Common stock repurchased (in shares) | 4 | 4 | ||||||
Net income | $ 371 | 368 | 368 | 3 | ||||
Dividends, Common Stock | (195) | (195) | (195) | |||||
Other comprehensive income (loss) | 57 | 67 | 67 | (10) | ||||
Stock compensation | 20 | 20 | 20 | |||||
Stock options exercised and other | 6 | (38) | 7 | $ 37 | 6 | |||
Stock options exercised and other (in shares) | 0 | |||||||
Balance (in shares) at Apr. 03, 2021 | 421 | 81 | ||||||
Balance at Apr. 03, 2021 | 3,138 | $ 105 | $ 954 | $ 8,506 | $ (4,762) | $ (1,665) | $ 3,138 | $ 517 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest at Apr. 03, 2021 | $ 3,655 |
Consolidated Statement of Equ_2
Consolidated Statement of Equity Consolidated Statement of Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared - per share | $ 0.57 | $ 0.57 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Operating activities | ||
Net income | $ 371 | $ 350 |
Adjustments to reconcile net income to operating cash flows: | ||
Depreciation and amortization | 112 | 117 |
Postretirement benefit plan expense (benefit) | (68) | (39) |
Deferred income taxes | 17 | 8 |
Stock compensation | 20 | 19 |
Other | 13 | (11) |
Postretirement benefit plan contributions | (2) | (6) |
Changes in operating assets and liabilities, net of acquisitions: | ||
Trade receivables | (155) | (194) |
Inventories | (50) | 1 |
Accounts payable | 118 | 44 |
All other current assets and liabilities | (141) | 102 |
Net cash provided by (used in) operating activities | 235 | 391 |
Investing activities | ||
Additions to properties | (173) | (112) |
Issuance of notes receivable | (20) | (18) |
Repayments of notes receivable | 28 | 0 |
Investments in unconsolidated entities | (10) | 0 |
Acquisition of cost method investments | 0 | (3) |
Purchases of available for sale securities | (2) | (65) |
Sales of available for sale securities | 5 | 5 |
Other | (17) | (9) |
Net cash provided by (used in) investing activities | (189) | (202) |
Financing activities | ||
Net issuances (reductions) of notes payable | 326 | 549 |
Reductions of long-term debt | (4) | (3) |
Net issuances of common stock | 18 | 46 |
Common stock repurchases | (240) | 0 |
Cash dividends | (195) | (195) |
Collateral received on derivative instruments | 0 | 80 |
Net cash provided by (used in) financing activities | (95) | 477 |
Effect of exchange rate changes on cash and cash equivalents | 5 | (47) |
Increase (decrease) in cash and cash equivalents | (44) | 619 |
Cash and cash equivalents at beginning of period | 435 | 397 |
Cash and cash equivalents at end of period | 391 | 1,016 |
Supplemental cash flow disclosures of non-cash investing activities | ||
Additions to properties included in accounts payable | $ 97 | $ 87 |
Accounting Policies
Accounting Policies | 3 Months Ended |
Apr. 03, 2021 | |
Accounting Policies [Abstract] | |
Accounting Policies | Accounting policies Basis of presentation The unaudited interim financial information of Kellogg Company (the Company) included in this report reflects all adjustments, all of which are of a normal and recurring nature, that management believes are necessary for a fair statement of the results of operations, comprehensive income, financial position, equity and cash flows for the periods presented. This interim information should be read in conjunction with the financial statements and accompanying footnotes within the Company’s 2020 Annual Report on Form 10-K. The condensed balance sheet information at January 2, 2021 was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States. The results of operations for the quarter ended April 3, 2021 are not necessarily indicative of the results to be expected for other interim periods or the full year. Accounts payable The Company has agreements with third parties to provide accounts payable tracking systems which facilitate participating suppliers’ ability to monitor and, if elected, sell payment obligations from the Company to designated third-party financial institutions. Participating suppliers may, at their sole discretion, make offers to sell one or more payment obligations of the Company prior to their scheduled due dates at a discounted price to participating financial institutions. The Company’s goal is to capture overall supplier savings, in the form of payment terms or vendor funding, and the agreements facilitate the suppliers’ ability to sell payment obligations, while providing them with greater working capital flexibility. The Company has no economic interest in the sale of these suppliers’ receivables and no direct financial relationship with the financial institutions concerning these services. The Company’s obligations to its suppliers, including amounts due and scheduled payment dates, are not impacted by suppliers’ decisions to sell amounts under the arrangements. However, the Company’s right to offset balances due from suppliers against payment obligations is restricted by the agreements for those payment obligations that have been sold by suppliers. The payment of these obligations by the Company is included in cash used in operating activities in the Consolidated Statement of Cash Flows. As of April 3, 2021, $913 million of the Company’s outstanding payment obligations had been placed in the accounts payable tracking system, and participating suppliers had sold $665 million of those payment obligations to participating financial institutions. As of January 2, 2021, $909 million of the Company’s outstanding payment obligations had been placed in the accounts payable tracking system, and participating suppliers had sold $670 million of those payment obligations to participating financial institutions. |
Sale of Accounts Receivable
Sale of Accounts Receivable | 3 Months Ended |
Apr. 03, 2021 | |
Transfers and Servicing of Financial Assets [Abstract] | |
Transfers and Servicing of Financial Assets [Text Block] | Sale of accounts receivable The Company has a program in which a discrete group of customers are allowed to extend their payment terms in exchange for the elimination of early payment discounts (Extended Terms Program). The Company has two Receivable Sales Agreements (Monetization Programs) described below, which are intended to directly offset the impact the Extended Terms Program would have on the days-sales-outstanding (DSO) metric that is critical to the effective management of the Company's accounts receivable balance and overall working capital. The Monetization Programs sell, on a revolving basis, certain trade accounts receivable invoices to third party financial institutions. Transfers under these agreements are accounted for as sales of receivables resulting in the receivables being de-recognized from the Consolidated Balance Sheet. The Monetization Programs provide for the continuing sale of certain receivables on a revolving basis until terminated by either party; however the maximum receivables that may be sold at any time is $1,033 million. The Company has no retained interest in the receivables sold, however the Company does have collection and administrative responsibilities for the sold receivables. The Company has not recorded any servicing assets or liabilities as of April 3, 2021 and January 2, 2021 for these agreements as the fair value of these servicing arrangements as well as the fees earned were not material to the financial statements. Accounts receivable sold of $785 million and $783 million remained outstanding under these arrangements as of April 3, 2021 and January 2, 2021, respectively. The proceeds from these sales of receivables are included in cash from operating activities in the Consolidated Statement of Cash Flows in the period of sale. The recorded net loss on sale of receivables was $2 million for the quarter ended April 3, 2021 and was $6 million for the quarter ended March 28, 2020. The recorded loss is included in Other income and expense, net (OIE). Other programs |
Equity
Equity | 3 Months Ended |
Apr. 03, 2021 | |
Equity [Abstract] | |
Equity | Equity Earnings per share Basic earnings per share is determined by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is similarly determined, except that the denominator is increased to include the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued. Dilutive potential common shares consist principally of employee stock options issued by the Company, restricted stock units, and to a lesser extent, certain contingently issuable performance shares. There were 12 million and 7 million anti-dilutive potential common shares excluded from the calculation for the quarters ended April 3, 2021 and March 28, 2020, respectively. Please refer to the Consolidated Statement of Income for basic and diluted earnings per share for the quarters ended April 3, 2021 and March 28, 2020. Share repurchases In February 2020, the board of directors approved a new authorization to repurchase up to $1.5 billion of our common stock through December 2022. During the quarter ended April 3, 2021, the Company repurchased approximately 4 million shares of common stock for a total of $240 million. During the quarter ended March 28, 2020, the Company did not repurchase any shares of common stock. Comprehensive income Comprehensive income includes net income and all other changes in equity during a period except those resulting from investments by or distributions to shareholders. Other comprehensive income consists of foreign currency translation adjustments, fair value adjustments associated with cash flow hedges, adjustments for net experience losses and prior service cost related to employee benefit plans, and adjustments for unrealized gains and losses on available-for-sale securities, net of related tax effects. Reclassifications out of Accumulated other comprehensive income (AOCI) for the quarters ended April 3, 2021 and March 28, 2020, consisted of the following: (millions) Details about AOCI Amount reclassified Line item impacted Quarter ended Quarter ended (Gains) losses on cash flow hedges: Interest rate contracts (a) $ 5 $ 2 Interest expense $ 5 $ 2 Total before tax (1) — Tax expense (benefit) $ 4 $ 2 Net of tax Amortization of postretirement and postemployment benefits: Net experience (gain) loss (b) $ (1) $ (1) OIE $ (1) $ (1) Total before tax — — Tax expense (benefit) $ (1) $ (1) Net of tax Total reclassifications $ 3 $ 1 Net of tax (a) See Derivative instruments and fair value measurements note (b) See Employee benefits note Accumulated other comprehensive income (loss), net of tax, as of April 3, 2021 and January 2, 2021 consisted of the following: (millions) April 3, January 2, Foreign currency translation adjustments $ (1,659) $ (1,668) Cash flow hedges — unrealized net gain (loss) 4 (57) Postretirement and postemployment benefits: Net experience gain (loss) 1 2 Prior service credit (cost) (12) (12) Available-for-sale securities unrealized net gain (loss) 1 3 Total accumulated other comprehensive income (loss) $ (1,665) $ (1,732) |
Employee Benefits
Employee Benefits | 3 Months Ended |
Apr. 03, 2021 | |
Retirement Benefits [Abstract] | |
Employee Benefits | Employee benefitsThe Company sponsors a number of U.S. and foreign pension plans as well as other nonpension postretirement and postemployment plans to provide various benefits for its employees. These plans are described within the footnotes to the Consolidated Financial Statements included in the Company’s 2020 Annual Report on Form 10-K. Components of Company benefit plan (income) expense for the periods presented are included in the tables below. Excluding the service cost component, these amounts are included within Other income (expense) in the Consolidated Statement of Income. Pension Quarter ended (millions) April 3, 2021 March 28, 2020 Service cost $ 9 $ 9 Interest cost 25 35 Expected return on plan assets (78) (85) Amortization of unrecognized prior service cost 2 2 Recognized net (gain) loss (9) 14 Total pension (income) expense $ (51) $ (25) Other nonpension postretirement Quarter ended (millions) April 3, 2021 March 28, 2020 Service cost $ 3 $ 3 Interest cost 5 8 Expected return on plan assets (23) (23) Amortization of unrecognized prior service cost (2) (2) Total postretirement benefit (income) expense $ (17) $ (14) Postemployment Quarter ended (millions) April 3, 2021 March 28, 2020 Service cost $ 1 $ 1 Recognized net (gain) loss (1) (1) Total postemployment benefit expense $ — $ — For the quarter ended April 3, 2021, the Company recognized a ga in of $9 million, rel ated to the remeasurement of a U.S. pension plan. For the quarter ended March 28, 2020, the Company recognized a loss of $14 million, related to the remeasurement of a U.S. pension plan. The remeasurements were the result of distributions that exceeded or are expected to exceed service and interest costs resulting in settlement accounting for that particul ar plan. The amount of the remeasurements recognized were due primarily to changes in the discount rate relative to the previous measurements. Company contributions to employee benefit plans are summarized as follows: (millions) Pension Nonpension postretirement Total Quarter ended: April 3, 2021 $ 1 $ 1 $ 2 March 28, 2020 $ 3 $ 3 $ 6 Full year: Fiscal year 2021 (projected) $ 6 $ 19 $ 25 Fiscal year 2020 (actual) $ 8 $ 24 $ 32 Plan funding strategies may be modified in response to management's evaluation of tax deductibility, market conditions, and competing investment alternatives. |
Income Taxes
Income Taxes | 3 Months Ended |
Apr. 03, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income taxes The consolidated effective tax rate for the quarters ended April 3, 2021 and March 28, 2020 w as 23% a nd 21%, respectively. As of April 3, 2021, the Company classified $19 million of unrecognized tax benefits as a net current tax liability. Management's estimate of reasonably possible changes in unrecognized tax benefits during the next twelve months consists of the current liability expected to be settled within one year, offset by approximately $3 million of projected additions related primarily to ongoing intercompany transfer pricing activity. Management is currently unaware of any issues under review that could result in significant additional payments, accruals or other material deviation in this estimate. The Company’s total gross unrecognized tax benefits as of April 3, 2021 was $65 million. Of this balance, $56 million represents the amount that, if recognized, would affect the Company’s effective income tax rate in future periods. |
Derivative Instruments and Fair
Derivative Instruments and Fair Value Measurements | 3 Months Ended |
Apr. 03, 2021 | |
Derivative Instruments and Fair Value Measurements [Abstract] | |
Derivative Instruments and Fair Value Measurements | Derivative instruments and fair value measurements The Company is exposed to certain market risks such as changes in interest rates, foreign currency exchange rates, and commodity prices, which exist as a part of its ongoing business operations. Management uses derivative and nonderivative financial instruments and commodity instruments, including futures, options, and swaps, where appropriate, to manage these risks. Instruments used as hedges must be effective at reducing the risk associated with the exposure being hedged. The Company designates derivatives and nonderivative hedging instruments as cash flow hedges, fair value hedges, net investment hedges, and uses other contracts to reduce volatility in interest rates, foreign currency and commodities. As a matter of policy, the Company does not engage in trading or speculative hedging transactions. Derivative instruments are classified on the Consolidated Balance Sheet based on the contractual maturity of the instrument or the timing of the underlying cash flows of the instrument for derivatives with contractual maturities beyond one year. Any collateral associated with derivative instruments is classified as other assets or other current liabilities on the Consolidated Balance Sheet depending on whether the counterparty collateral is in an asset or liability position. Margin deposits related to exchange-traded commodities are recorded in accounts receivable, net on the Consolidated Balance Sheet. On the Consolidated Statement of Cash Flows, cash flows associated with derivative instruments are classified according to the nature of the underlying hedged item. Cash flows associated with collateral and margin deposits on exchange-traded commodities are classified as investing cash flows when the collateral account is in an asset position and as financing cash flows when the collateral account is in a liability position. Total notional amounts of the Company’s derivative instruments as of April 3, 2021 and January 2, 2021 were as follows: (millions) April 3, January 2, Foreign currency exchange contracts $ 3,278 $ 2,856 Cross-currency contracts 1,383 1,411 Interest rate contracts 3,035 2,632 Commodity contracts 640 314 Total $ 8,336 $ 7,213 Following is a description of each category in the fair value hierarchy and the financial assets and liabilities of the Company that were included in each category at April 3, 2021 and January 2, 2021, measured on a recurring basis. Level 1 – Financial assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market. For the Company, level 1 financial assets and liabilities consist primarily of commodity derivative contracts. Level 2 – Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. For the Company, level 2 financial assets and liabilities consist of interest rate swaps, cross-currency swaps and over-the-counter commodity and currency contracts. The Company’s calculation of the fair value of interest rate swaps is derived from a discounted cash flow analysis based on the terms of the contract and the interest rate curve. Over-the-counter commodity derivatives are valued using an income approach based on the commodity index prices less the contract rate multiplied by the notional amount. Foreign currency contracts are valued using an income approach based on forward rates less the contract rate multiplied by the notional amount. Cross-currency contracts are valued based on changes in the spot rate at the time of valuation compared to the spot rate at the time of execution, as well as the change in the interest differential between the two currencies. The Company’s calculation of the fair value of level 2 financial assets and liabilities takes into consideration the risk of nonperformance, including counterparty credit risk. Level 3 – Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability. The Company did not have any level 3 financial assets or liabilities as of April 3, 2021 or January 2, 2021. The following table presents assets and liabilities that were measured at fair value in the Consolidated Balance Sheet on a recurring basis as of April 3, 2021 and January 2, 2021: Derivatives designated as hedging instruments April 3, 2021 January 2, 2021 (millions) Level 1 Level 2 Total Level 1 Level 2 Total Assets: Cross-currency contracts: Other current assets $ — $ 31 $ 31 $ — $ 14 $ 14 Other assets — 11 11 — 16 16 Interest rate contracts: Other current assets — 3 3 — — — Other assets (a) — 130 130 — 60 60 Total assets $ — $ 175 $ 175 $ — $ 90 $ 90 Liabilities: Cross-currency contracts: Other current liabilities $ — $ (2) $ (2) $ — $ (13) $ (13) Other Liabilities — (16) (16) — (21) (21) Interest rate contracts: Other current liabilities — (1) (1) — (3) (3) Other liabilities (a) — (4) (4) — — — Total liabilities $ — $ (23) $ (23) $ — $ (37) $ (37) (a) The fair value of the related hedged portion of the Company's long-term debt, a level 2 liability, was $1.2 billion as of April 3, 2021 and $0.8 billion as of January 2, 2021. Derivatives not designated as hedging instruments April 3, 2021 January 2, 2021 (millions) Level 1 Level 2 Total Level 1 Level 2 Total Assets: Foreign currency exchange contracts: Other current assets $ — $ 41 $ 41 $ — $ 48 $ 48 Other assets — 3 3 — — — Interest rate contracts: Other current assets — 4 4 — 4 4 Other assets — 3 3 — 13 13 Commodity contracts: Other current assets 7 — 7 9 — 9 Total assets $ 7 $ 51 $ 58 $ 9 $ 65 $ 74 Liabilities: Foreign currency exchange contracts: Other current liabilities $ — $ (71) $ (71) $ — $ (73) $ (73) Other liabilities — (6) (6) — (4) (4) Interest rate contracts: Other current liabilities — (6) (6) — (6) (6) Other liabilities — (11) (11) — (22) (22) Commodity contracts: Other current liabilities (8) — (8) (1) — (1) Total liabilities $ (8) $ (94) $ (102) $ (1) $ (105) $ (106) The Company has designated its outstanding foreign currency denominated debt as a net investment hedge of a portion of the Company’s investment in its subsidiaries’ foreign currency denominated net assets. The carrying value of this debt, including current and long-term, was approximately $2.7 billion as of April 3, 2021 and $2.8 billion as of January 2, 2021. The following amounts were recorded on the Consolidated Balance Sheet related to cumulative basis adjustments for existing fair value hedges as of April 3, 2021 and January 2, 2021. (millions) Line Item in the Consolidated Balance Sheet in which the hedged item is included Carrying amount of the hedged liabilities Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged liabilities (a) April 3, January 2, April 3, January 2, Interest rate contracts Long-term debt $ 2,956 $ 2,568 $ 20 $ 25 (a) The hedged long-term debt includes $15 million and $16 million of hedging adjustment on discontinued hedging relationships as of April 3, 2021 and January 2, 2021, respectively. The Company has elected to not offset the fair values of derivative assets and liabilities executed with the same counterparty that are generally subject to enforceable netting agreements. However, if the Company were to offset and record the asset and liability balances of derivatives on a net basis, the amounts presented in the Consolidated Balance Sheet as of April 3, 2021 and January 2, 2021 would be adjusted as detailed in the following table: As of April 3, 2021: Gross Amounts Not Offset in the Amounts Financial Cash Collateral Net Total asset derivatives $ 233 $ (94) $ 3 $ 142 Total liability derivatives $ (125) $ 94 $ 31 $ — As of January 2, 2021: Gross Amounts Not Offset in the Amounts Financial Cash Collateral Net Total asset derivatives $ 164 $ (116) $ — $ 48 Total liability derivatives $ (143) $ 116 $ 5 $ (22) The effect of derivative instruments on the Consolidated Statements of Income and Comprehensive Income for the quarters ended April 3, 2021 and March 28, 2020 was as follows: Derivatives and non-derivatives in net investment hedging relationships (millions) Gain (loss) Gain (loss) excluded from assessment of hedge effectiveness Location of gain (loss) in income of excluded component April 3, March 28, April 3, March 28, Foreign currency denominated long-term debt $ 103 $ 9 $ — $ — Cross-currency contracts 27 66 5 9 Interest expense Total $ 130 $ 75 $ 5 $ 9 Derivatives not designated as hedging instruments (millions) Location of gain Gain (loss) April 3, March 28, Foreign currency exchange contracts COGS $ (17) $ 51 Foreign currency exchange contracts Other income (expense), net (1) 9 Foreign currency exchange contracts SG&A 4 4 Interest rate contracts Interest expense 1 — Commodity contracts COGS 12 (24) Total $ (1) $ 40 The effect of fair value and cash flow hedge accounting on the Consolidated Income Statement for the quarters ended April 3, 2021 and March 28, 2020: April 3, 2021 March 28, 2020 (millions) Interest Expense Interest Expense Total amounts of income and expense line items presented in the Consolidated Income Statement in which the effects of fair value or cash flow hedges are recorded $ 59 $ 64 Gain (loss) on fair value hedging relationships: Interest contracts: Hedged items 6 (1) Derivatives designated as hedging instruments (7) 2 Gain (loss) on cash flow hedging relationships: Interest contracts: Amount of gain (loss) reclassified from AOCI into income (5) (2) During the next 12 months, the Company expects $16 million of net deferred losses reported in AOCI at April 3, 2021 to be reclassified to income, assuming market rates remain constant through contract maturities. Certain of the Company’s derivative instruments contain provisions requiring the Company to post collateral on those derivative instruments that are in a liability position if the Company’s credit rating is at or below BB+ (S&P), or Baa1 (Moody’s). The fair value of all derivative instruments with credit-risk-related contingent features in a liability position on April 3, 2021 was not material. In addition, certain derivative instruments contain provisions that would be triggered in the event the Company defaults on its debt agreements. There were no collateral posting as of April 3, 2021 triggered by credit-risk-related contingent features. Other fair value measurements April 3, 2021 January 2, 2021 Unrealized Unrealized (millions) Cost Gain (Loss) Market Value Cost Gain (Loss) Market Value Corporate bonds $ 58 $ 1 $ 59 $ 62 $ 3 $ 65 During the quarter ended April 3, 2021, the Company sold approximately $5 million of investments in level 2 corporate bonds. The resulting gain from the sale of these investments was less than $1 million dollars and was recorded in Other income and (expense). The market values of the Company's investments in level 2 corporate bonds were based on matrices or models from pricing vendors. Unrealized gains and losses were included in the Consolidated Statement of Comprehensive Income. Additionally, these investments were recorded within Other current assets and Other assets on the Consolidated Balance Sheet, based on the maturity of the individual security. The maturity dates of the securities range from 2022 to 2036. The Company reviews its investment portfolio for any unrealized losses that would be deemed other-than-temporary and requires the recognition of an impairment loss in earnings. If the cost of an investment exceeds its fair value, the Company evaluates, among other factors, general market conditions, the duration and extent to which the fair value is less than its cost, the Company's intent to hold the investment, and whether it is more likely than not that the Company will be required to sell the investment before recovery of the cost basis. The Company also considers the type of security, related industry and sector performance, and published investment ratings. Once a decline in fair value is determined to be other-than-temporary, an impairment charge is recorded and a new cost basis in the investment is established. If conditions within individual markets, industry segments, or macro-economic environments deteriorate, the Company could incur future impairments. Financial instruments The carrying values of the Company’s short-term items, including cash, cash equivalents, accounts receivable, accounts payable, notes payable and current maturities of long-term debt approximate fair value. The fair value of the Company’s long-term debt, which are level 2 liabilities, is calculated based on broker quotes. The fair value and carrying value of the Company's long-term debt was $7.3 billion and $6.7 billion, respectively, as of April 3, 2021. The fair value and carrying value of the Company's long-term debt were $7.7 billion and $6.7 billion, respectively, as of January 2, 2021. Counterparty credit risk concentration and collateral requirements The Company is exposed to credit loss in the event of nonperformance by counterparties on derivative financial and commodity contracts. Management believes a concentration of credit risk with respect to derivative counterparties is limited due to the credit ratings and use of master netting and reciprocal collateralization agreements with the counterparties and the use of exchange-traded commodity contracts. Master netting agreements apply in situations where the Company executes multiple contracts with the same counterparty. Certain counterparties represent a concentration of credit risk to the Company. If those counterparties fail to perform according to the terms of derivative contracts, this would result in a loss to the Company of approximately $109 million, net of collateral already received from those counterparties, as of April 3, 2021. For certain derivative contracts, reciprocal collateralization agreements with counterparties call for the posting of collateral in the form of cash, treasury securities or letters of credit if a fair value loss position to the Company or its counterparties exceeds a certain amount. In addition, the Company is required to maintain cash margin accounts in connection with its open positions for exchange-traded commodity derivative instruments executed with the counterparty that are subject to enforceable netting agreements. As of April 3, 2021, the Company posted $34 million in margin deposits for exchange-traded commodity derivative instruments, which was reflected as an increase in accounts receivable, net on the Consolidated Balance Sheet. Management believes concentrations of credit risk with respect to accounts receivable is limited due to the generally high credit quality of the Company’s major customers, as well as the large number and geographic dispersion of smaller customers. However, the Company conducts a disproportionate amount of business with a small number of large multinational grocery retailers, with the five largest accounts encompassing approximately 24% of consolidated trade receivables at April 3, 2021. |
Reportable Segments
Reportable Segments | 3 Months Ended |
Apr. 03, 2021 | |
Segment Reporting [Abstract] | |
Reportable Segments | Reportable segments Kellogg Company is the world’s leading producer of cereal, second largest producer of crackers, and a leading producer of savory snacks and frozen foods. Additional product offerings include toaster pastries, cereal bars, veggie foods and noodles. Kellogg products are manufactured and marketed globally. Principal markets for these products include the United States, United Kingdom, and Nigeria. The Company manages its operations through four operating segments that are based on geographic location – North America which includes U.S. businesses and Canada; Europe which consists principally of European countries; Latin America which consists of Central and South America and includes Mexico; and AMEA (Asia Middle East Africa) which consists of Africa, Middle East, Australia and other Asian and Pacific markets. These operating segments also represent our reportable segments. 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. Reportable segment results were as follows: Quarter ended (millions) April 3, March 28, Net sales North America $ 2,130 $ 2,097 Europe 578 526 Latin America 236 227 AMEA 640 562 Consolidated $ 3,584 $ 3,412 Operating profit North America $ 379 $ 366 Europe 80 69 Latin America 27 22 AMEA 63 46 Total Reportable Segments 549 503 Corporate (77) (44) Consolidated $ 472 $ 459 Supplemental product information is provided below for net sales to external customers: Quarter ended (millions) April 3, March 28, Snacks $ 1,647 $ 1,554 Cereal 1,374 1,325 Frozen 297 294 Noodles and other 266 239 Consolidated $ 3,584 $ 3,412 |
Supplemental Financial Statemen
Supplemental Financial Statement Data | 3 Months Ended |
Apr. 03, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Balance Sheet Disclosures [Text Block] | Supplemental Financial Statement Data Consolidated Balance Sheet (millions) April 3, 2021 (unaudited) January 2, 2021 Trade receivables $ 1,413 $ 1,272 Allowance for credit losses (22) (19) Refundable income taxes 19 66 Other receivables 250 218 Accounts receivable, net $ 1,660 $ 1,537 Raw materials and supplies $ 339 $ 338 Finished goods and materials in process 980 946 Inventories $ 1,319 $ 1,284 Intangible assets not subject to amortization $ 2,015 $ 2,068 Intangible assets subject to amortization, net 434 423 Other intangibles, net $ 2,449 $ 2,491 |
Contingencies
Contingencies | 3 Months Ended |
Apr. 03, 2021 | |
Loss Contingency [Abstract] | |
Contingencies | Contingencies The Company is subject to various legal proceedings, claims, and governmental inspections or investigations in the ordinary course of business covering matters such as general commercial, governmental regulations, antitrust and trade regulations, product liability, environmental, intellectual property, workers’ compensation, employment and other actions. These matters are subject to uncertainty and the outcome is not predictable with assurance. The Company uses a combination of insurance and self-insurance for a number of risks, including workers’ compensation, general liability, automobile liability and product liability. In 2016, a class action complaint was filed against Kellogg in the Northern District of California relating to statements made on packaging for certain products. In August 2019, the Court ruled in favor of the plaintiff regarding certain statements made on the Company’s products and ordered the parties to conduct settlement discussions related to all matters in dispute. In October 2019, the plaintiff filed a motion to the Court to approve a settlement between Kellogg and the class. During 2019, the Company concluded that the contingency related to the unfavorable ruling was probable and estimable, resulting in a liability being recorded. In February 2020, the Court denied plaintiff’s motion to approve the settlement and the parties are continuing arbitration. This litigation, including any potential settlement, is not expected to have a material impact on the Company’s consolidated financial statements. The Company will continue to evaluate the likelihood of potential outcomes as the litigation continues. The Company has established accruals for certain matters where losses are deemed probable and reasonably estimable. There are other claims and legal proceedings pending against the Company for which accruals have not been established. It is reasonably possible that some of these matters could result in an unfavorable judgment against the Company and could require payment of claims in amounts that cannot be estimated at April 3, 2021. Based upon current information, management does not expect any of the claims or legal proceedings pending against the Company to have a material impact on the Company’s consolidated financial statements. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 3 Months Ended |
Apr. 03, 2021 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The unaudited interim financial information of Kellogg Company (the Company) included in this report reflects all adjustments, all of which are of a normal and recurring nature, that management believes are necessary for a fair statement of the results of operations, comprehensive income, financial position, equity and cash flows for the periods presented. This interim information should be read in conjunction with the financial statements and accompanying footnotes within the Company’s 2020 Annual Report on Form 10-K. The condensed balance sheet information at January 2, 2021 was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States. The results of operations for the quarter ended April 3, 2021 are not necessarily indicative of the results to be expected for other interim periods or the full year. |
Accounts payable | Accounts payableThe Company has agreements with third parties to provide accounts payable tracking systems which facilitate participating suppliers’ ability to monitor and, if elected, sell payment obligations from the Company to designated third-party financial institutions. Participating suppliers may, at their sole discretion, make offers to sell one or more payment obligations of the Company prior to their scheduled due dates at a discounted price to participating financial institutions. The Company’s goal is to capture overall supplier savings, in the form of payment terms or vendor funding, and the agreements facilitate the suppliers’ ability to sell payment obligations, while providing them with greater working capital flexibility. The Company has no economic interest in the sale of these suppliers’ receivables and no direct financial relationship with the financial institutions concerning these services. The Company’s obligations to its suppliers, including amounts due and scheduled payment dates, are not impacted by suppliers’ decisions to sell amounts under the arrangements. However, the Company’s right to offset balances due from suppliers against payment obligations is restricted by the agreements for those payment obligations that have been sold by suppliers. |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Equity [Abstract] | |
Reclassifications Out of AOCI | Reclassifications out of Accumulated other comprehensive income (AOCI) for the quarters ended April 3, 2021 and March 28, 2020, consisted of the following: (millions) Details about AOCI Amount reclassified Line item impacted Quarter ended Quarter ended (Gains) losses on cash flow hedges: Interest rate contracts (a) $ 5 $ 2 Interest expense $ 5 $ 2 Total before tax (1) — Tax expense (benefit) $ 4 $ 2 Net of tax Amortization of postretirement and postemployment benefits: Net experience (gain) loss (b) $ (1) $ (1) OIE $ (1) $ (1) Total before tax — — Tax expense (benefit) $ (1) $ (1) Net of tax Total reclassifications $ 3 $ 1 Net of tax (a) See Derivative instruments and fair value measurements note (b) See Employee benefits note |
Summary of Accumulated Other Comprehensive Income (Loss) | Accumulated other comprehensive income (loss), net of tax, as of April 3, 2021 and January 2, 2021 consisted of the following: (millions) April 3, January 2, Foreign currency translation adjustments $ (1,659) $ (1,668) Cash flow hedges — unrealized net gain (loss) 4 (57) Postretirement and postemployment benefits: Net experience gain (loss) 1 2 Prior service credit (cost) (12) (12) Available-for-sale securities unrealized net gain (loss) 1 3 Total accumulated other comprehensive income (loss) $ (1,665) $ (1,732) |
Employee Benefits (Tables)
Employee Benefits (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Retirement Benefits [Abstract] | |
Components of Plan Benefit Expense | Pension Quarter ended (millions) April 3, 2021 March 28, 2020 Service cost $ 9 $ 9 Interest cost 25 35 Expected return on plan assets (78) (85) Amortization of unrecognized prior service cost 2 2 Recognized net (gain) loss (9) 14 Total pension (income) expense $ (51) $ (25) Other nonpension postretirement Quarter ended (millions) April 3, 2021 March 28, 2020 Service cost $ 3 $ 3 Interest cost 5 8 Expected return on plan assets (23) (23) Amortization of unrecognized prior service cost (2) (2) Total postretirement benefit (income) expense $ (17) $ (14) Postemployment Quarter ended (millions) April 3, 2021 March 28, 2020 Service cost $ 1 $ 1 Recognized net (gain) loss (1) (1) Total postemployment benefit expense $ — $ — |
Contributions to Employee Benefit Plans | Company contributions to employee benefit plans are summarized as follows: (millions) Pension Nonpension postretirement Total Quarter ended: April 3, 2021 $ 1 $ 1 $ 2 March 28, 2020 $ 3 $ 3 $ 6 Full year: Fiscal year 2021 (projected) $ 6 $ 19 $ 25 Fiscal year 2020 (actual) $ 8 $ 24 $ 32 |
Derivative Instruments and Fa_2
Derivative Instruments and Fair Value Measurements (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Derivative Instruments and Fair Value Measurements [Abstract] | |
Schedule of Total Notional Amounts of Derivative Instruments | Total notional amounts of the Company’s derivative instruments as of April 3, 2021 and January 2, 2021 were as follows: (millions) April 3, January 2, Foreign currency exchange contracts $ 3,278 $ 2,856 Cross-currency contracts 1,383 1,411 Interest rate contracts 3,035 2,632 Commodity contracts 640 314 Total $ 8,336 $ 7,213 |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The following table presents assets and liabilities that were measured at fair value in the Consolidated Balance Sheet on a recurring basis as of April 3, 2021 and January 2, 2021: Derivatives designated as hedging instruments April 3, 2021 January 2, 2021 (millions) Level 1 Level 2 Total Level 1 Level 2 Total Assets: Cross-currency contracts: Other current assets $ — $ 31 $ 31 $ — $ 14 $ 14 Other assets — 11 11 — 16 16 Interest rate contracts: Other current assets — 3 3 — — — Other assets (a) — 130 130 — 60 60 Total assets $ — $ 175 $ 175 $ — $ 90 $ 90 Liabilities: Cross-currency contracts: Other current liabilities $ — $ (2) $ (2) $ — $ (13) $ (13) Other Liabilities — (16) (16) — (21) (21) Interest rate contracts: Other current liabilities — (1) (1) — (3) (3) Other liabilities (a) — (4) (4) — — — Total liabilities $ — $ (23) $ (23) $ — $ (37) $ (37) (a) The fair value of the related hedged portion of the Company's long-term debt, a level 2 liability, was $1.2 billion as of April 3, 2021 and $0.8 billion as of January 2, 2021. Derivatives not designated as hedging instruments April 3, 2021 January 2, 2021 (millions) Level 1 Level 2 Total Level 1 Level 2 Total Assets: Foreign currency exchange contracts: Other current assets $ — $ 41 $ 41 $ — $ 48 $ 48 Other assets — 3 3 — — — Interest rate contracts: Other current assets — 4 4 — 4 4 Other assets — 3 3 — 13 13 Commodity contracts: Other current assets 7 — 7 9 — 9 Total assets $ 7 $ 51 $ 58 $ 9 $ 65 $ 74 Liabilities: Foreign currency exchange contracts: Other current liabilities $ — $ (71) $ (71) $ — $ (73) $ (73) Other liabilities — (6) (6) — (4) (4) Interest rate contracts: Other current liabilities — (6) (6) — (6) (6) Other liabilities — (11) (11) — (22) (22) Commodity contracts: Other current liabilities (8) — (8) (1) — (1) Total liabilities $ (8) $ (94) $ (102) $ (1) $ (105) $ (106) |
Schedule of Derivative Instruments in Statement of Financial Position Fair Value | The following amounts were recorded on the Consolidated Balance Sheet related to cumulative basis adjustments for existing fair value hedges as of April 3, 2021 and January 2, 2021. (millions) Line Item in the Consolidated Balance Sheet in which the hedged item is included Carrying amount of the hedged liabilities Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged liabilities (a) April 3, January 2, April 3, January 2, Interest rate contracts Long-term debt $ 2,956 $ 2,568 $ 20 $ 25 (a) The hedged long-term debt includes $15 million and $16 million of hedging adjustment on discontinued hedging relationships as of April 3, 2021 and January 2, 2021, respectively. |
Schedule of Offsetting Assets | As of April 3, 2021: Gross Amounts Not Offset in the Amounts Financial Cash Collateral Net Total asset derivatives $ 233 $ (94) $ 3 $ 142 Total liability derivatives $ (125) $ 94 $ 31 $ — As of January 2, 2021: Gross Amounts Not Offset in the Amounts Financial Cash Collateral Net Total asset derivatives $ 164 $ (116) $ — $ 48 Total liability derivatives $ (143) $ 116 $ 5 $ (22) |
Schedule of Offsetting Liabilities | As of April 3, 2021: Gross Amounts Not Offset in the Amounts Financial Cash Collateral Net Total asset derivatives $ 233 $ (94) $ 3 $ 142 Total liability derivatives $ (125) $ 94 $ 31 $ — As of January 2, 2021: Gross Amounts Not Offset in the Amounts Financial Cash Collateral Net Total asset derivatives $ 164 $ (116) $ — $ 48 Total liability derivatives $ (143) $ 116 $ 5 $ (22) |
Schedule of the Effect of Derivative Instruments on the Consolidated Statements of Income and Comprehensive Income | The effect of derivative instruments on the Consolidated Statements of Income and Comprehensive Income for the quarters ended April 3, 2021 and March 28, 2020 was as follows: Derivatives and non-derivatives in net investment hedging relationships (millions) Gain (loss) Gain (loss) excluded from assessment of hedge effectiveness Location of gain (loss) in income of excluded component April 3, March 28, April 3, March 28, Foreign currency denominated long-term debt $ 103 $ 9 $ — $ — Cross-currency contracts 27 66 5 9 Interest expense Total $ 130 $ 75 $ 5 $ 9 Derivatives not designated as hedging instruments (millions) Location of gain Gain (loss) April 3, March 28, Foreign currency exchange contracts COGS $ (17) $ 51 Foreign currency exchange contracts Other income (expense), net (1) 9 Foreign currency exchange contracts SG&A 4 4 Interest rate contracts Interest expense 1 — Commodity contracts COGS 12 (24) Total $ (1) $ 40 The effect of fair value and cash flow hedge accounting on the Consolidated Income Statement for the quarters ended April 3, 2021 and March 28, 2020: April 3, 2021 March 28, 2020 (millions) Interest Expense Interest Expense Total amounts of income and expense line items presented in the Consolidated Income Statement in which the effects of fair value or cash flow hedges are recorded $ 59 $ 64 Gain (loss) on fair value hedging relationships: Interest contracts: Hedged items 6 (1) Derivatives designated as hedging instruments (7) 2 Gain (loss) on cash flow hedging relationships: Interest contracts: Amount of gain (loss) reclassified from AOCI into income (5) (2) |
Available-for-sale securities | April 3, 2021 January 2, 2021 Unrealized Unrealized (millions) Cost Gain (Loss) Market Value Cost Gain (Loss) Market Value Corporate bonds $ 58 $ 1 $ 59 $ 62 $ 3 $ 65 |
Reportable Segments (Tables)
Reportable Segments (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Reportable Segment Information | Reportable segment results were as follows: Quarter ended (millions) April 3, March 28, Net sales North America $ 2,130 $ 2,097 Europe 578 526 Latin America 236 227 AMEA 640 562 Consolidated $ 3,584 $ 3,412 Operating profit North America $ 379 $ 366 Europe 80 69 Latin America 27 22 AMEA 63 46 Total Reportable Segments 549 503 Corporate (77) (44) Consolidated $ 472 $ 459 |
Revenue from External Customers by Products and Services | Supplemental product information is provided below for net sales to external customers: Quarter ended (millions) April 3, March 28, Snacks $ 1,647 $ 1,554 Cereal 1,374 1,325 Frozen 297 294 Noodles and other 266 239 Consolidated $ 3,584 $ 3,412 |
Supplemental Financial Statem_2
Supplemental Financial Statement Data (Tables) | 3 Months Ended |
Apr. 03, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Financial Data Consolidated Balance Sheet [Table Text Block] | Consolidated Balance Sheet (millions) April 3, 2021 (unaudited) January 2, 2021 Trade receivables $ 1,413 $ 1,272 Allowance for credit losses (22) (19) Refundable income taxes 19 66 Other receivables 250 218 Accounts receivable, net $ 1,660 $ 1,537 Raw materials and supplies $ 339 $ 338 Finished goods and materials in process 980 946 Inventories $ 1,319 $ 1,284 Intangible assets not subject to amortization $ 2,015 $ 2,068 Intangible assets subject to amortization, net 434 423 Other intangibles, net $ 2,449 $ 2,491 |
Accounting Policies - Narrative
Accounting Policies - Narrative (Details) - USD ($) $ in Millions | Apr. 03, 2021 | Jan. 02, 2021 |
Accounting Policies [Abstract] | ||
Obligations placed in accounts payable tracking system | $ 913 | $ 909 |
Obligations sold by participating suppliers | $ 665 | $ 670 |
Sale of Accounts Receivable - N
Sale of Accounts Receivable - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Apr. 03, 2021 | Mar. 28, 2020 | Jan. 02, 2021 | |
Monetization Program | Other income (expense) | |||
Transfer of Financial Assets Accounted for as Sales [Line Items] | |||
Gain (Loss) on Sale of Accounts Receivable | $ (2) | $ (6) | |
Monetization Program | Maximum [Member] | |||
Transfer of Financial Assets Accounted for as Sales [Line Items] | |||
Transfers of Accounts Receivable Agreements | 1,033 | ||
Monetization Program | Sold And Outstanding | |||
Transfer of Financial Assets Accounted for as Sales [Line Items] | |||
Transfer of Financial Assets Accounted for as Sales, Amount Derecognized | 785 | $ 783 | |
Kellogg Foreign Subsidiaries Other Program | |||
Transfer of Financial Assets Accounted for as Sales [Line Items] | |||
Transfers of Accounts Receivable Agreements | $ 16 | $ 55 |
Equity - Narrative (Details)
Equity - Narrative (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | ||
Apr. 03, 2021 | Mar. 28, 2020 | Feb. 29, 2020 | |
Equity, Class of Treasury Stock [Line Items] | |||
Anti-dilutive potential common shares excluded from reconciliation | 12 | 7 | |
Common stock repurchased (in shares) | 4 | ||
Common stock repurchased | $ 240 | ||
February 2020 Share Repurchase Program | |||
Equity, Class of Treasury Stock [Line Items] | |||
Stock repurchase program, authorized amount | $ 1,500 |
Equity - Reclassifications Out
Equity - Reclassifications Out of AOCI (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Apr. 03, 2021 | Mar. 28, 2020 | ||
Derivative Instruments, Gain (Loss) [Line Items] | |||
COGS | $ 2,418 | $ 2,268 | |
SG&A | (694) | (685) | |
Interest expense | 59 | 64 | |
Net experience (gain) loss | 1 | 1 | |
Other (Income) expense | 69 | 51 | |
Total before tax | 482 | 446 | |
Tax expense (benefit) | (109) | (94) | |
Net income | 371 | 350 | |
Reclassification out of Accumulated Other Comprehensive Income | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Net income | 3 | 1 | |
Reclassification out of Accumulated Other Comprehensive Income | (Gains) losses on cash flow hedges | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total before tax | 5 | 2 | |
Tax expense (benefit) | (1) | 0 | |
Net income | 4 | 2 | |
Reclassification out of Accumulated Other Comprehensive Income | (Gains) losses on cash flow hedges | Interest rate contracts | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Interest expense | [1] | 5 | 2 |
Reclassification out of Accumulated Other Comprehensive Income | Amortization of postretirement and postemployment benefits | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total before tax | (1) | (1) | |
Tax expense (benefit) | 0 | 0 | |
Net income | (1) | (1) | |
Reclassification out of Accumulated Other Comprehensive Income | Amortization of postretirement and postemployment benefits | Other income (expense) | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Net experience (gain) loss | [2] | $ (1) | $ (1) |
[1] | See Derivative instruments and fair value measurements note | ||
[2] | See Employee benefits note |
Equity - Summary of Accumulated
Equity - Summary of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | Apr. 03, 2021 | Jan. 02, 2021 |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Foreign currency translation adjustments | $ (1,659) | $ (1,668) |
Cash flow hedges — unrealized net gain (loss) | 4 | (57) |
Postretirement and postemployment benefits: | ||
Net experience gain (loss) | 1 | 2 |
Prior service credit (cost) | (12) | (12) |
Available-for-sale securities unrealized net gain (loss) | 1 | 3 |
Total accumulated other comprehensive income (loss) | $ (1,665) | $ (1,732) |
Employee Benefits - Components
Employee Benefits - Components of Plan Benefit Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Pension | Global Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 9 | $ 9 |
Interest cost | 25 | 35 |
Expected return on plan assets | (78) | (85) |
Amortization of unrecognized prior service cost (gain) | 2 | 2 |
Recognized net (gain) loss | (9) | 14 |
Total plan benefit (income) expense | (51) | (25) |
Other Nonpension Postretirement | U.S. and Canada | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 3 | 3 |
Interest cost | 5 | 8 |
Expected return on plan assets | (23) | (23) |
Amortization of unrecognized prior service cost (gain) | (2) | (2) |
Total plan benefit (income) expense | (17) | (14) |
Postemployment | Global Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 1 | 1 |
Recognized net (gain) loss | (1) | (1) |
Total plan benefit (income) expense | $ 0 | $ 0 |
Employee Benefits - Component_2
Employee Benefits - Components of Plan Benefit Expense Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
UNITED STATES | Pension | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Recognized net (gain) loss | $ (9) | $ 14 |
Employee Benefits - Contributio
Employee Benefits - Contributions to Employee Benefit Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | Jan. 02, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Employer contributions to employee benefit plans | $ 2 | $ 6 | $ 32 |
Total current year projected employer contributions | 25 | ||
Global Plans | Pension | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer contributions to employee benefit plans | 1 | 3 | 8 |
Total current year projected employer contributions | 6 | ||
U.S. and Canada | Nonpension postretirement | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer contributions to employee benefit plans | 1 | $ 3 | $ 24 |
Total current year projected employer contributions | $ 19 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Income Tax Contingency [Line Items] | ||
Effective income tax rate | 23.00% | 21.00% |
Unrecognized tax benefits | $ 65 | |
Projected additions to unrecognized tax benefits | 3 | |
Unrecognized tax benefits that would affect the effective income tax rate | 56 | |
Income tax related interest accrued | 14 | |
Other current liabilities | ||
Income Tax Contingency [Line Items] | ||
Unrecognized tax benefits | $ 19 |
Derivative Instruments and Fa_3
Derivative Instruments and Fair Value Measurements - Narrative (Details) $ in Millions | 3 Months Ended |
Apr. 03, 2021USD ($) | |
Derivative [Line Items] | |
Net deferred losses reported in AOCI to be reclassified into income in the next twelve months | $ (16) |
Concentration of risk, derivative instruments assets | 109 |
Collateral posted | 0 |
Exchange-traded commodity | |
Derivative [Line Items] | |
Margin deposits | $ 34 |
Five Largest Accounts | Customer Concentration Risk | Trade receivables | |
Derivative [Line Items] | |
Concentration percentage | 24.00% |
Derivative Instruments and Fa_4
Derivative Instruments and Fair Value Measurements - Schedule of Total Notional Amounts of Derivative Instruments (Details) - USD ($) $ in Millions | Apr. 03, 2021 | Jan. 02, 2021 |
Derivatives, Fair Value [Line Items] | ||
Notional amount of derivative | $ 8,336 | $ 7,213 |
Foreign currency exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount of derivative | 3,278 | 2,856 |
Cross currency interest rate contract | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount of derivative | 1,383 | 1,411 |
Interest rate contracts | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount of derivative | 3,035 | 2,632 |
Commodity contracts | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount of derivative | $ 640 | $ 314 |
Derivative Instruments and Fa_5
Derivative Instruments and Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Millions | Apr. 03, 2021 | Jan. 02, 2021 | ||
Derivatives, Fair Value [Line Items] | ||||
Fair Value Of Related Hedge Portion Of Long Term Debt | $ 1,200 | $ 800 | ||
Long-term debt total, carrying value | 6,700 | 6,700 | ||
Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 175 | 90 | ||
Liabilities | (23) | (37) | ||
Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 58 | 74 | ||
Liabilities | (102) | (106) | ||
Level 1 | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 0 | 0 | ||
Liabilities | 0 | 0 | ||
Level 1 | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 7 | 9 | ||
Liabilities | (8) | (1) | ||
Level 2 | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 175 | 90 | ||
Liabilities | (23) | (37) | ||
Level 2 | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 51 | 65 | ||
Liabilities | (94) | (105) | ||
Cross currency interest rate contract | Other current assets | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 31 | 14 | ||
Cross currency interest rate contract | Other current assets | Level 1 | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 0 | 0 | ||
Cross currency interest rate contract | Other current assets | Level 2 | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 31 | 14 | ||
Cross currency interest rate contract | Other assets | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 11 | 16 | ||
Cross currency interest rate contract | Other assets | Level 1 | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 0 | 0 | ||
Cross currency interest rate contract | Other assets | Level 2 | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 11 | 16 | ||
Cross currency interest rate contract | Other current liabilities | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liabilities | (2) | (13) | ||
Cross currency interest rate contract | Other current liabilities | Level 1 | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liabilities | 0 | 0 | ||
Cross currency interest rate contract | Other current liabilities | Level 2 | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liabilities | (2) | (13) | ||
Cross currency interest rate contract | Other liabilities | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liabilities | (16) | (21) | ||
Cross currency interest rate contract | Other liabilities | Level 1 | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liabilities | 0 | 0 | ||
Cross currency interest rate contract | Other liabilities | Level 2 | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liabilities | (16) | (21) | ||
Foreign currency exchange contracts | Other current assets | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 41 | 48 | ||
Foreign currency exchange contracts | Other current assets | Level 1 | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 0 | 0 | ||
Foreign currency exchange contracts | Other current assets | Level 2 | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 41 | 48 | ||
Foreign currency exchange contracts | Other assets | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 3 | 0 | ||
Foreign currency exchange contracts | Other assets | Level 1 | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 0 | 0 | ||
Foreign currency exchange contracts | Other assets | Level 2 | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 3 | 0 | ||
Foreign currency exchange contracts | Other current liabilities | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liabilities | (71) | (73) | ||
Foreign currency exchange contracts | Other current liabilities | Level 1 | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liabilities | 0 | 0 | ||
Foreign currency exchange contracts | Other current liabilities | Level 2 | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liabilities | (71) | (73) | ||
Foreign currency exchange contracts | Other liabilities | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liabilities | (6) | (4) | ||
Foreign currency exchange contracts | Other liabilities | Level 1 | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liabilities | 0 | 0 | ||
Foreign currency exchange contracts | Other liabilities | Level 2 | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liabilities | (6) | (4) | ||
Interest rate contracts | Other current assets | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 3 | 0 | ||
Interest rate contracts | Other current assets | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 4 | 4 | ||
Interest rate contracts | Other current assets | Level 1 | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 0 | 0 | ||
Interest rate contracts | Other current assets | Level 1 | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 0 | 0 | ||
Interest rate contracts | Other current assets | Level 2 | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 3 | 0 | ||
Interest rate contracts | Other current assets | Level 2 | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 4 | 4 | ||
Interest rate contracts | Other assets | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 130 | 60 | ||
Interest rate contracts | Other assets | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 3 | 13 | ||
Interest rate contracts | Other assets | Level 1 | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 0 | 0 | ||
Interest rate contracts | Other assets | Level 1 | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 0 | 0 | ||
Interest rate contracts | Other assets | Level 2 | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | [1] | 130 | 60 | |
Interest rate contracts | Other assets | Level 2 | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 3 | 13 | ||
Interest rate contracts | Other current liabilities | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liabilities | (1) | (3) | ||
Interest rate contracts | Other current liabilities | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liabilities | (6) | (6) | ||
Interest rate contracts | Other current liabilities | Level 1 | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liabilities | 0 | 0 | ||
Interest rate contracts | Other current liabilities | Level 1 | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liabilities | 0 | 0 | ||
Interest rate contracts | Other current liabilities | Level 2 | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liabilities | (1) | (3) | ||
Interest rate contracts | Other current liabilities | Level 2 | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liabilities | (6) | (6) | ||
Interest rate contracts | Other liabilities | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liabilities | (4) | 0 | ||
Interest rate contracts | Other liabilities | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liabilities | (11) | (22) | ||
Interest rate contracts | Other liabilities | Level 1 | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liabilities | 0 | 0 | ||
Interest rate contracts | Other liabilities | Level 1 | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liabilities | 0 | 0 | ||
Interest rate contracts | Other liabilities | Level 2 | Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liabilities | (4) | [1] | 0 | |
Interest rate contracts | Other liabilities | Level 2 | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liabilities | (11) | (22) | ||
Commodity contracts | Other current assets | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 7 | 9 | ||
Commodity contracts | Other current assets | Level 1 | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 7 | 9 | ||
Commodity contracts | Other current assets | Level 2 | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Assets | 0 | 0 | ||
Commodity contracts | Other current liabilities | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liabilities | (8) | (1) | ||
Commodity contracts | Other current liabilities | Level 1 | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liabilities | (8) | (1) | ||
Commodity contracts | Other current liabilities | Level 2 | Not Designated as Hedging Instrument | ||||
Derivatives, Fair Value [Line Items] | ||||
Liabilities | 0 | 0 | ||
Net Investment Hedging | ||||
Derivatives, Fair Value [Line Items] | ||||
Long-term debt total, carrying value | $ 2,700 | $ 2,800 | ||
[1] | The fair value of the related hedged portion of the Company's long-term debt, a level 2 liability, was $1.2 billion as of April 3, 2021 and $0.8 billion as of January 2, 2021. |
Derivative Instruments and Fa_6
Derivative Instruments and Fair Value Measurements - Schedule of Cumulative Basis Adjustments for Fair Value Hedges (Details) - USD ($) $ in Millions | Apr. 03, 2021 | Jan. 02, 2021 | |
Derivatives, Fair Value [Line Items] | |||
Long-term debt | $ 6,655 | $ 6,746 | |
Carrying amount of hedged liability | Fair Value Hedges | Interest rate contracts | Designated as Hedging Instrument | |||
Derivatives, Fair Value [Line Items] | |||
Long-term debt | 2,956 | 2,568 | |
Cumulative fair value adjustment | Fair Value Hedges | Interest rate contracts | Designated as Hedging Instrument | |||
Derivatives, Fair Value [Line Items] | |||
Long-term debt | [1] | 20 | 25 |
Hedging adjustment | Discontinued Hedges | Interest rate contracts | |||
Derivatives, Fair Value [Line Items] | |||
Long-term debt | $ 15 | $ 16 | |
[1] | The hedged long-term debt includes $15 million and $16 million of hedging adjustment on discontinued hedging relationships as of April 3, 2021 and January 2, 2021, respectively. |
Derivative Instruments and Fa_7
Derivative Instruments and Fair Value Measurements - Schedule of Offsetting Assets and Liabilities (Details) - USD ($) $ in Millions | Apr. 03, 2021 | Jan. 02, 2021 |
Offsetting [Abstract] | ||
Asset derivatives, Amounts Presented in the Consolidated Balance Sheet | $ 233 | $ 164 |
Asset derivatives, Financial Instruments, Gross Amounts Not Offset in the Consolidated Balance Sheet | (94) | (116) |
Asset derivatives, Cash Collateral Posted, Gross Amounts Not Offset in the Consolidated Balance Sheet | 3 | 0 |
Asset derivatives, Net Amount | 142 | 48 |
Liability derivatives, Amounts Presented in the Consolidated Balance Sheet | (125) | (143) |
Liability derivatives, Financial Instruments, Gross Amounts Not Offset in the Consolidated Balance Sheet | 94 | 116 |
Liability derivatives, Cash Collateral Received, Gross Amounts Not Offset in the Consolidated Balance Sheet | 31 | 5 |
Liability derivatives, net amount | $ 0 | $ (22) |
Derivative Instruments and Fa_8
Derivative Instruments and Fair Value Measurements - Effect of Derivative Instruments on the Consolidated Statements of Income and Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in AOCI | $ 78 | $ (65) |
Not Designated as Hedging Instrument | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in income | (1) | 40 |
Not Designated as Hedging Instrument | Foreign currency exchange contracts | COGS | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in income | (17) | 51 |
Not Designated as Hedging Instrument | Foreign currency exchange contracts | Selling, General and Administrative Expenses | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in income | 4 | 4 |
Not Designated as Hedging Instrument | Foreign currency exchange contracts | Interest expense | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in income | 1 | 0 |
Not Designated as Hedging Instrument | Foreign currency exchange contracts | Other income (expense), net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in income | (1) | 9 |
Not Designated as Hedging Instrument | Commodity contracts | COGS | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in income | 12 | (24) |
Net Investment Hedging | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in AOCI | 130 | 75 |
Gain (Loss) from Components Excluded from Assessment of Fair Value Hedge Effectiveness, Net | 5 | 9 |
Net Investment Hedging | Foreign currency denominated long-term debt | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in AOCI | 103 | 9 |
Gain (Loss) from Components Excluded from Assessment of Fair Value Hedge Effectiveness, Net | 0 | 0 |
Net Investment Hedging | Cross currency interest rate contract | Interest expense | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in AOCI | 27 | 66 |
Gain (Loss) from Components Excluded from Assessment of Fair Value Hedge Effectiveness, Net | $ 5 | $ 9 |
Derivative Instruments and Fa_9
Derivative Instruments and Fair Value Measurements - Schedule of Effect of Fair Value and Cash Flow Hedge Accounting on Consolidated Statement of Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Interest Expense, Debt | $ 59 | $ 64 |
Interest rate contracts | Interest expense | Designated as Hedging Instrument | Fair Value Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Hedged items | 6 | (1) |
Derivatives designated as hedging instruments | (7) | 2 |
Interest rate contracts | Interest expense | Designated as Hedging Instrument | Cash Flow Hedging | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) reclassified from AOCI into income | $ (5) | $ (2) |
Derivative Instruments and F_10
Derivative Instruments and Fair Value Measurements - Schedule of Other Fair Value Measurements (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Jan. 02, 2021 | |
Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale securities, cost | $ 58 | $ 62 |
Available-for-sale securities, unrealized gain (loss) | 1 | 3 |
Available-for-sale securities, market value | 59 | $ 65 |
Level 2 | ||
Debt Securities, Available-for-sale [Line Items] | ||
Available-for-sale securities, market value | 5 | |
Other income (expense), net | Level 2 | Corporate bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Gain on sale of available-for-sale securities | $ 1 |
Derivative Instruments and F_11
Derivative Instruments and Fair Value Measurements - Schedule of Fair Value of Long-term Debt (Details) - USD ($) $ in Billions | Apr. 03, 2021 | Jan. 02, 2021 |
Derivative Instruments and Fair Value Measurements [Abstract] | ||
Long-term debt, fair value | $ 7.3 | $ 7.7 |
Long-term debt total, carrying value | $ 6.7 | $ 6.7 |
Reportable Segments (Details)
Reportable Segments (Details) $ in Millions | 3 Months Ended | |
Apr. 03, 2021USD ($) | Mar. 28, 2020USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of operating segments | 4 | |
Net sales | $ 3,584 | $ 3,412 |
Operating profit | 472 | 459 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Operating profit | 549 | 503 |
Operating Segments | North America | ||
Segment Reporting Information [Line Items] | ||
Net sales | 2,130 | 2,097 |
Operating profit | 379 | 366 |
Operating Segments | Europe | ||
Segment Reporting Information [Line Items] | ||
Net sales | 578 | 526 |
Operating profit | 80 | 69 |
Operating Segments | Latin America | ||
Segment Reporting Information [Line Items] | ||
Net sales | 236 | 227 |
Operating profit | 27 | 22 |
Operating Segments | AMEA | ||
Segment Reporting Information [Line Items] | ||
Net sales | 640 | 562 |
Operating profit | 63 | 46 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Operating profit | $ (77) | $ (44) |
Reportable Segments Supplementa
Reportable Segments Supplemental Product Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 03, 2021 | Mar. 28, 2020 | |
Segment Reporting Information [Line Items] | ||
Net sales | $ 3,584 | $ 3,412 |
Snacks | ||
Segment Reporting Information [Line Items] | ||
Net sales | 1,647 | 1,554 |
Cereal | ||
Segment Reporting Information [Line Items] | ||
Net sales | 1,374 | 1,325 |
Frozen | ||
Segment Reporting Information [Line Items] | ||
Net sales | 297 | 294 |
Noodles and other | ||
Segment Reporting Information [Line Items] | ||
Net sales | $ 266 | $ 239 |
Supplemental Financial Statem_3
Supplemental Financial Statement Data - Consolidated Balance Sheet (Unaudited) (Details) - USD ($) $ in Millions | Apr. 03, 2021 | Jan. 02, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Trade receivables | $ 1,413 | $ 1,272 |
Allowance for doubtful accounts | (22) | (19) |
Redundable income taxes | 19 | 66 |
Other receivables | 250 | 218 |
Accounts receivable, net | 1,660 | 1,537 |
Raw materials and supplies | 339 | 338 |
Finished goods and materials in process | 980 | 946 |
Inventories | 1,319 | 1,284 |
Intangible assets not subject to amortization | 2,015 | 2,068 |
Intangible assets subject to amortization, net | 434 | 423 |
Other intangibles, net | $ 2,449 | $ 2,491 |