Chapter 20- Pension Disclosures

KELLOGG CO.

Notes to Consolidated Financial Statements

NOTE 9 PENSION BENEFITS (partial)

Expense

The components of pension expense are presented in the following table. Pension expense for defined contribution plans relates principally to multiemployer plans in which the Company participates on behalf of certain unionized workforces in the United States. The amounts for 2007 and 2006 include charges of approximately $6million and $4million, respectively, for the Company’s current estimate of a multiemployer plan withdrawal liability, which is further described in Note3.

(millions) / 2007 / 2006 / 2005
Service cost / $ / 96 / $ / 94 / $ / 80
Interest cost / 188 / 172 / 160
Expected return on plan assets / (282 / ) / (257 / ) / (229 / )
Amortization of unrecognized prior service cost / 13 / 12 / 10
Recognized net loss / 64 / 80 / 65
Curtailment and special termination benefits
- net loss / 4 / 17 / 2
Pension expense:
Defined benefit plans / 83 / 118 / 88
Defined contribution plans / 25 / 19 / 32
Total / $ / 108 / $ / 137 / $ / 120

Any arising obligation-related experience gain or loss is amortized using a straight-line method over the average remaining service period of active plan participants. Any asset-related experience gain or loss is recognized as described on page49. The estimated net experience loss and prior service cost for defined benefit pension plans that will be amortized from accumulated other comprehensive income into pension expense over the next fiscal year are approximately $35million and $13million, respectively.

Net losses from curtailment and special termination benefits recognized in 2006 are related primarily to plant workforce reductions in the United States and United Kingdom, as further described in Note3.

Certain of the Company’s subsidiaries sponsor 401(k) or similar savings plans for active employees. Expense related to these plans was (in millions): 2007–$36; 2006–$33; 2005–$30. Company contributions to these savings plans approximate annual expense. Company contributions to multiemployer and other defined contribution pension plans approximate the amount of annual expense presented in the preceding table.