2003 ANNUAL REPORT With 2003 net sales of almost $9 billion, Kellogg Company is the world’s leading producer of cereal and a leading producer of convenience foods, including cookies, crackers, toaster pastries, cereal bars, frozen waffles, and meat alternatives. The Company’s brands include  Kellogg’s ® , Keebler ® , Pop-Tarts ® , Eggo ® , Cheez-It ® , Nutri-Grain ® , Rice Krispies ® , Murray ® , Austin ® , Morningstar Farms ® , Famous Amos ® , Carr‘s, Plantation, Ready Crust ® , and Kashi ® . Kellogg products are manufactured in 17 countries and marketed in over 180 countries around the world. (a) The Company uses this non-GAAP financial measure to focus management and investors on the amount of cash available for debt repayment, dividend distributions, acquisition opportunities, and share repurchase. Refer to Management’s Discussion and Analysis on page 25 for reconciliation to the comparable GAAP measure. TABLE OF CONTENTS (dollars in millions, except per share data) 2003 Change 2002 Change 2001 Change  Net sales $8,811.5 6% $8,304.1 10% $7,548.4 24% Gross profit as a % of net sales 44.4% -.6 pts 45.0% .8 pts 44.2% .1 pts Operating profit 1,544.1 2% 1,508.1 29% 1,167.9 18% Net earnings 787.1 9% 720.9 52% 473.6 -19% Net earnings per share  Basic 1.93 9% 1.77 51% 1.17 -19% Diluted 1.92 10% 1.75 51% 1.16 -20% Cash flow (net cash provided by operating  activities, reduced by capital expenditure) (a) 923.8 24% 74 6.4 -13% 855.5 32% Dividends per share $ 1.01 — $ 1.01 — $ 1.01 2% FINANCIAL HIGHLIGHTS 2 Letter to Share Owners 8 Growing Our Sales  17 Improving Our Profitability  18 Turning Our Profit Into Cash 19 Helping the Community 20 Providing Nutrition to Our Consumers  21 Living the K Values  22 Management’s Discussion and Analysis 31 Selected Financial Data 32 Consolidated Financial Statements 35 Notes to Consolidated Financial Statements 52 Management’s Responsibility for Financial  Statements 52 Report of Independent Auditors 54 Board of Directors 57 Share Owner Information 