• Leveraging our Leading Brands • Utilizing our Worldwide Infrastructure We Are Up to the Challenge Kellogg Company 7 Carlos M. Gutierrez Chairman of the Board  Chief Executive Officer We are first and foremost a branded food company. We are not interested in participating in private label or low- margin segments, where the economics do not allow us to add value through brand building and innovation. Kellogg brands have several advantages. They are known and trusted in markets all over the world. They extend effectively into close-in categories, such as wholesome snacks, and they transfer easily across coun- tries and regions.  We will continue to leverage and extend our brands across our geographic and product portfolio. Here’s a great example of what we can do: In recent years, Special K ® cereal led to  Special K ® Red Berries cereal, which in turn, led to  Special K TM bars. Today,  Special K is a $500 million worldwide brand sold in 40 countries.  It would require billions of dollars and many decades to even attempt to replicate our worldwide infrastructure. Moreover, because of our focused strategy, we have fairly consistent portfolios across the globe. We see this as an advantage for Kellogg. It enables us to transfer our best ideas quickly around the world, and across business units. These ideas can be proven innovations and brand-building concepts, but they can also include productivity enhancements and management processes and practices. In late 2000, we laid out our plan to return Kellogg to sustainable growth. We changed our strategy and our organizational structure. The year 2001 was to be a year of transition. We purchased Keebler Foods, the largest acquisition in our history. We essentially overhauled the entire Company while still achieving our earnings goals. In 2002, we planned for a year of acceleration in sales and earnings, and we actually exceeded our targets that year. By 2003, our business was expected to exhibit mo- mentum, and it did: We surpassed our sales and earnings growth targets while reinvesting for the future. The success of these past three years is evidence that we are up to the challenge of generating sustainable earnings and cash flow growth in the future. The en- tire organization is intensely focused on executing our plans, earning our stripes each and every day. Our goal is to be a dependable, long-term investment for you. We are grateful for your confidence in our special Company, and we trust you are as optimistic about our future as we are. 