Kellogg Company and Subsidiaries Consolidated Statement of Earnings Consolidated Statement of Shareholders’ Equity Earning Our Stripes 32 (millions, except per share data) 2003 2002 2001 Net sales $8,811.5 $8,304.1 $7,548.4 Cost of goods sold 4,898.9 4,569.0 4,211.4 Selling, general, and administrative expense 2,368.5 2,227.0 2,135.8 Restructuring charges — — 33.3 Operating profit $1,544.1 $1,508.1 $ 1,167.9 Interest expense 371.4 391.2 351.5 Other income (expense), net (3.2) 27.4 (23.9) Earnings before income taxes and cumulative effect of accounting change $1,169.5 $1,144.3 $ 792.5 Income taxes 382.4 423.4 317.9 Earnings before cumulative effect of accounting change $ 787.1 $ 720.9 $ 474.6 Cumulative effect of accounting change (net of tax) — — (1.0) Net earnings $ 787.1 $ 720.9 $ 473.6 Per share amounts: Earnings before cumulative effect of accounting change: Basic $ 1.93 $ 1.77 $ 1.17 Diluted 1.92 1.75 1.16 Net earnings: Basic 1.93 1.77 1.17 Diluted 1.92 1.75 1.16 Refer to Notes to Consolidated Financial Statements. Refer to Notes to Consolidated Financial Statements. Accumulated Capital in other Total Total Common stock excess of Retained Treasury stock comprehensive shareholders’ comprehensive (millions) shares amount par value earnings shares amount income equity income Balance, January 1, 2001 415.5  $103.8  $102.0  $ 1,501.0  9.8  ($ 374.0) ($ 435.3) $ 897.5 Net earnings 473.6  473.6  $ 473.6  Dividends (409.8) (409.8) Other comprehensive income (116.1) (116.1) (116.1) Stock options exercised and other (10.5) (.1) (1.0) 36.9  26.3  Balance, December 31, 2001 415.5 $103.8 $ 91.5 $ 1,564.7 8.8  ($ 337.1) ($ 551.4) $ 871.5  $ 357.5 Common stock repurchases 3.1 (101.0) (101.0) Net earnings 720.9 720.9 720.9 Dividends (412.6) (412.6) Other comprehensive income (302.0) (302.0) (302.0) Stock options exercised and other (41.6) (4.3) 159.9  118.3 Balance, December 28, 2002 415.5  $103.8  $ 49.9  $ 1,873.0  7.6  ($ 278.2) ($ 853.4) $ 895.1 $ 418.9 Common stock repurchases 2.9 (90.0) (90.0) Net earnings 787.1 787.1 787.1 Dividends (412.4) (412.4) Other comprehensive income 124.2 124.2 124.2 Stock options exercised and other (25.4) (4.7) 164.6 139.2 Balance, December 27, 2003 415.5 $103.8 $ 24.5 $2,247.7 5.8  ($203.6) ($729.2) $1,443.2 $911.3