grams were $9.9 million, comprised of $6.4 million for severance and $3.5 million for asset removal. At the end of 2002, all restruc- turing programs were complete and remaining reserves of $1.4 million consisted solely of long-term contractual obligations for employee severance. Taking into account all of these major initiatives, plus other various plant productivity and overhead reduction projects, the Company recorded total charges of approximately $71 million during 2003, comprised of $40 million in asset write-offs, $8 million for pension settlements, and $23 million in severance and other cash exit costs. These charges were recorded principally in cost of goods sold and impacted the Company’s operating segments as follows (in millions): U.S.-$36, Europe-$21, Latin America-$8, all other-$6. Reserves for exit costs at December 27, 2003, were approximately $19 million, principally representing severance to be paid out dur- ing the first half of 2004. As a result of the Keebler acquisition in March 2001, the Company assumed $14.9 million of reserves for severance and facility clo- sures related to Keebler’s ongoing restructuring and acquisition-re- lated synergy initiatives. Approximately $5 million of those re- serves were utilized in 2001, with the remainder being attributable primarily to noncancelable lease obligations extending through 2006. During 2003, the Company recorded in SGA an impairment loss of $10 million to reduce the carrying value of a contract-based intan- gible asset. The asset is associated with a long-term licensing agreement principally in the United States and the decline in value was based on the proportionate decline in estimated future cash flows to be derived from the contract versus original projections. Cost of goods sold for 2002 includes an impairment loss of $5 million related to the Company’s manufacturing facility in China, representing a decline in real estate market value subse- quent to an original impairment loss recognized for this prop- erty in 1997. The Company completed a sale of this facility in late 2003, and the carrying value of the property approximated the net sales proceeds. Operating profit for 2001 includes net restructuring charges of $33.3 million ($20.5 million after tax or $.05 per share), com- prised of $48.3 million in charges and $15.0 million in credits. The 2001 charges of $48.3 million are related to preparing Kellogg for the Keebler integration and continued actions support- ing the Company’s growth strategy. Specific initiatives included a headcount reduction of about 30 in U.S. and global Company management, rationalization of product offerings and other ac- tions to combine the Kellogg and Keebler logistics systems, and re- ductions in convenience foods capacity in Southeast Asia. Approximately two-thirds of the charges were comprised of asset write-offs with the remainder consisting of employee separation benefits and other cash costs. Other income (expense), net includes non-operating items such as interest income, foreign exchange gains and losses, charitable do- nations, and gains on asset sales. Other income (expense), net for 2003 includes a credit of approximately $17 million related to fa- vorable legal settlements; a charge of $8 million for a contribution to the Kellogg’s Corporate Citizenship Fund, a private trust estab- lished for charitable giving; and a charge of $6.5 million to recog- nize the impairment of a cost-basis investment in an e-commerce business venture. Other income (expense), net for 2002 consists primarily of a $24.7 million credit related to legal settlements. The 2001 credits of $15.0 million result from adjustments to vari- ous restructuring and asset disposal reserves. With numerous multi-year streamlining initiatives nearing completion in late 2001, management conducted an assessment of post-2001 reserve needs, which resulted in net reductions of $8.8 million for cash outlays and $6.2 million for asset disposals. (Asset disposal re- serves are reported within Property, net, on the Consolidated Balance Sheet.) The reduction in cash outlays relates primarily to lower-than-anticipated employee severance and asset removal ex- penditures, and higher-than-anticipated asset sale proceeds. Basic net earnings per share is determined by dividing net earn- ings by the weighted average number of common shares out- standing during the period. Diluted net earnings per share is simi- larly determined, except that the denominator is increased to include the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued. Dilutive potential common shares are comprised princi- pally of employee stock options issued by the Company. Basic net earnings per share is reconciled to diluted net earnings per share as follows: Total cash outlays incurred for restructuring programs were ap- proximately $8 million in 2002 and $35 million in 2001. At the end of 2001, remaining reserves related to all restructuring pro- Earnings per share Note 5 Equity Other income (expense), net Note 4  Prior years-exit activities 2003-impairments Prior years-impairments Kellogg Company 39