U.S. Retail Cereal  Our U.S. Retail Cereal business had another outstand- ing year in 2003. It posted net sales growth of 7%, even though it compared with a similarly strong 6% gain in 2002. This growth on top of growth led to a fourth consecutive year in which we increased our share of the U.S. cereal category. That we can contin- ue to grow in a category considered to be fully devel- oped is a testament to the power of brand building in this business. We also benefited from new products.  Fruit Harvest TM , Tony’s Cinnamon Krunchers TM , and  Smorz TM were new brands launched early in the year, followed by brand extensions like Maple & Brown Sugar Frosted Mini- Wheats ® , and  Special K ®  Vanilla Almond. Our  Kashi ® natural cereal brand continued its strong growth, aided by new products like  Organic Promise TM  Autumn Wheat TM , and  Seven in the Morning TM ; the latter serves up a nutritional seven grains, seven grams of protein, and seven grams of fiber per serving.  In 2003, we continued to both increase and improve our advertising and consumer promotions in this business. Strong advertising campaigns lifted several brands, such as  Froot Loops ® and  Rice Krispies ® .  Apple Jacks ® grew when children voted to add blue “carrots“ to the cereal. Disney ® toys in the box helped drive growth in  Kellogg’s Frosted Flakes ® and  Smacks ® . A weight-loss campaign again lifted sales for  Special K ® and  Special K ® Red Berries. We launched promotional cereals and inserts tied to popular movies like the “Cat In the Hat”, and holiday-themed versions of brands like  Rice Krispies . These are all examples of bringing excitement to the category, adding value for the consumer, and contribut- ing positively to our key  Volume to Value metrics. Our sales force continued to execute well at the store level, as our in-store representatives were successful at reduc- ing out-of-stock products and increasing feature and display activity. The combination of all these efforts led to sales and share momentum in our U.S. cereal busi- ness and reaffirmation of Kellogg Company’s position as a key partner to our retailer customers. Europe U.S. Other U.S. Retail Snacks U.S. Retail Cereal Latin Am. % of KELLOGG NET SALES All Other Year-Over-Year % Change U.S. Retail Cereal: Internal Net Sales Growth 2% 6% 7% 2001 2002 2003 Kellogg Company 9