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Cash flow

In 2009, Kellogg delivered record cash flow, defined as cash from operating activities less capital expenditures, generating $1.27 billion for the year. By comparison in 2008, the Company generated $806 million in cash flow including a discretionary pension contribution. Capital expenditures totaled $377 million during 2009.

Kellogg raised its 2010 guidance for full-year earnings per share growth on a currency-neutral basis to be in the range of 11 to 13 percent. Assuming no foreign exchange impact, this implies earnings per share of $3.51 to $3.57. The Company reaffirmed its 2 to 3 percent 2010 internal net sales growth guidance, in line with long-term targets. The Company also reiterated its 2010 internal operating profit growth guidance in the high single-digit range, above its long-term annual targets. Up-front costs for full-year 2010 are expected to be approximately $0.16 per share, a decrease from $0.26 per share in 2009, positively impacting operating profit and net earnings.

CEO Mackay concluded, "We enter 2010 with confidence in hitting our growth expectations, driving solid top-line growth, investing in our brands as well as implementing further cost-savings initiatives through our three-year billion dollar plus cost savings challenge. With excellent financial visibility, we remain confident in our ability to deliver long-term sustainable, dependable performance."