The aforementioned
overhead activity analysis will be extended to Europe and Latin America during
the first half of 1999. Management believes these initiatives will result in the
elimination of several hundred-employee positions, requiring separation benefit
costs to be incurred. Since the number of employees affected, their job
functions, and their locations have not yet been identified. The costs that may
have resulted are not known yet. Investment potential: We are pleased to report
that the Kellogg Company dividend rose in 1998 for the 42nd consecutive year,
with an increase of 5 cents per share to $.92. We also continued our program of
purchasing Kellogg share, with 1998 purchases totaling $239.7 million. Credit
assessment: counter parties on derivative financial and commodity contracts
expose The Company to credit loss in the event of nonperformance. This credit
loss is limited to the cost for replacing these contracts at current market
rates. Management believes that the probability of such loss is remote. Summary
and conclusion: The seeking out, training, and retention of a diverse, highly
talented workforce is central to Kellogg Company's commitment to be a
results-oriented organization ready for the challenges for the future and
focused on creating value for you, our shareowners.
Bibliography
The Kellogg Company is the world's leading producer of ready-to- Kellogg
Company, incorporated in Delaware in 1922. The subsidiaries that are engaged is
the manufacturer and marketing company of ready-to eat cereal and a leading
producer of grain-based convenience foods, including toaster pastries, frozen
waffles, cereal bars, and bagels. Among the latest new products now arriving on
grocery shelves nationwide are Rice Krispies Treats Squares, Scotcheroos, Nutri-Grain
Twists, S'Mores and Pop-Tarts Pastry Swirls, Cheese & Cherry. Headquartered in
Battle Creek, Michigan, Kellogg Company has a 92-year heritage of excellence and
a reputation for products that provide value and contribute to a healthy diet.
The Company's renewed commitment to growth in the marketplace is the primary
driver for our governing long-term shareowner value. Current global investment
opportunities are considerable and require a balancing of future profitable
growth with competitive returns in the near term. Kellogg products are
manufactured in 20 countries on 6 continents and distributed in more than 160
countries.
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