UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 11-K

ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

KELLOGG COMPANY

(Name of Issuer)

ONE KELLOGG SQUARE
BATTLE CREEK, MICHIGAN 49016-3599
(Principal Executive Office)

 

 

Kellogg Company
Bakery, Confectionery, Tobacco Workers and Grain Millers
Savings and Investment Plan

		Page(s)
Report of Independent Registered Public Accounting Firm			1
Financial Statements
Statement of Net Assets Available for Benefits as of December 31, 2005 and 2004			2
Statement of Changes in Net Assets Available for Benefits for the Years Ended December 31, 2005 and 2004			3
Notes to Financial Statements			4–8
Supplemental Schedule
Schedule I: Schedule of Assets (Held at End of Year) as of December 31, 2005			9

Report of Independent Registered Public Accounting Firm

To the Participants and Administrator of the
Kellogg Company Bakery, Confectionery,
Tobacco Workers and Grain Millers Savings
and Investment Plan

In our opinion, the accompanying statements of net assets available for benefits and the related statements of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of the Kellogg Company Bakery, Confectionery, Tobacco Workers and Grain Millers Savings and Investment Plan (the “Plan”) at December 31, 2005 and 2004, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Plan’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

Battle Creek, Michigan
June 16, 2006

Kellogg Company
Bakery, Confectionery, Tobacco Workers and Grain Millers
Savings and Investment Plan

Statement of Net Assets Available for Benefits

		2005				2004
Assets
Plan’s interest in Master Trust (Note 4)		$	511,210,318			$	517,222,487
Loans to participants			6,899,002				6,477,038
Total assets			518,109,320				523,699,525
Liabilities
Accrued investment services fees			61,322				75,861
Total liabilities			61,322				75,861
Net assets available for benefits		$	518,047,998			$	523,623,664

The accompanying notes are an integral part of these financial statements.

Kellogg Company
Bakery, Confectionery, Tobacco Workers and Grain Millers
Savings and Investment Plan

Statement of Changes in Net Assets Available for Benefits

for the Years Ended December 31, 2005 and 2004

		2005				2004
Contributions
Employer		$	5,369,852			$	5,082,726
Employee			14,023,350				12,835,419
Rollovers from other qualified plans			953,685				593,801
Total contributions			20,346,887				18,511,946
Earnings on Investments
Plan’s interest in income of Master Trust (Note 4)			21,212,233				36,097,353
Interest income			356,181				348,766
Redemption fees			(46,660	)			(62,360	)
Total earnings on investments, net			21,521,754				36,383,759
Participant withdrawals			(47,458,846	)			(45,033,992	)
Trustee fees			14,539				(142,900	)
Net increase/(decrease)			(5,575,666	)			9,718,813
Net assets available for benefits
Beginning of year			523,623,664				513,904,851
End of year		$	518,047,998			$	523,623,664

The accompanying notes are an integral part of these financial statements.

Kellogg Company
Bakery, Confectionery, Tobacco Workers and Grain Millers
Savings and Investment Plan

Notes to Financial Statements

for the Years Ended December 31, 2005 and 2004

1.		Summary of Significant Accounting Policies
		Basis of Accounting
		The Kellogg Company Bakery, Confectionery, Tobacco Workers and Grain Millers Savings and Investment Plan (the “Plan”) operates as a qualified defined contribution plan and was established under Section 401(k) of the Internal Revenue Code. The accounts of the Plan are maintained on the accrual basis. Expenses of administration are paid by the Plan sponsor, Kellogg Company.
		Investments
		All investments are reported at current quoted market values except for guaranteed insurance contracts, which are reported at contract value and represent contributions made plus interest at the contract rate. These contracts are maintained in the Stable Value Fund of the Kellogg Company Master Trust.
		The Plan presents in the statement of changes in net assets available for benefits the Plan’s interest in income of Master Trust, which consists primarily of the realized gains or losses on the fair value of the Master Trust investments and the unrealized appreciation (depreciation) on those investments.
		Allocation of Net Investment Income to Participants
		Net investment income is allocated to participant accounts daily, in proportion to their respective ownership on that day.
		Risks and Uncertainties
		The Plan provides for various investment options in several investment securities. Investment securities are exposed to various risks, such as interest rate, market and credit. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible the changes in risk in the near term would materially affect participants’ account balances and the amounts reported in the statement of net assets available for benefits and the statement of changes in net assets available for benefits.
		Use of Estimates in the Preparation of Financial Statements
		The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Plan’s management to make estimates and assumptions that affect the reported amounts of net assets available for benefits at the date of the financial statements and changes in net assets available for benefits during the reporting period. Actual results could differ from those estimates.
2.		Provisions of the Plan
		The following description of the Plan is provided for general information purposes only. Participants should refer to the plan document for a more comprehensive description of the Plan’s provisions.

Notes to Financial Statements
December 31, 2005 and 2004 and

for the Years Ended December 31, 2005 and 2004

		Plan Administration
		The following description of the Plan is administered by trustees appointed by Kellogg and employees represented by the Bakery, Confectionery, Tobacco Workers and Grain Millers Union.
		Redemption Fees
		Effective August 16, 2004 the Plan began charging a 2 percent redemption fee for transfers and/or reallocations of units that have been in a fund for less than five business days. Fees collected are used to help offset trustee expenses.
		Plan Participation and Contribution
		Generally, all Kellogg Company hourly employees belonging to the Bakery, Confectionery, Tobacco Workers and Grain Millers Union Local Nos. 3-G, 50-G, 252-G, 274-G and 401-G are eligible to participate in the Plan.
		Subject to limitations prescribed by the Internal Revenue Service, participants may elect to contribute from 1 percent to 50 percent of their annual wages. Participants were eligible to defer $14,000 in 2005 and $13,000 in 2004. Employee contributions are matched by Kellogg Company at a 100% rate on the first 3 percent and a 50 percent rate on the next 2 percent with 12.5 percent of the Company match restricted for investment in the Kellogg Company stock fund. Employees may contribute to the Plan from their date of hire; however, the monthly contributions are not matched by the Company until the participant has completed one year of service.
		Participants of the Plan may elect to invest the contributions to their accounts as well as their account balances in various equity, bond, fixed income or Kellogg Company stock funds or a combination thereof in multiples of one percent.
		Vesting
		Participant account balances are fully vested.
		Participant Loans
		Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their account balance. Participants may have only one loan outstanding at any time. Loan transactions are treated as transfers between the Loan fund and the other funds. Loan terms range from 12 to 60 months, except for principal residence loans, which must be repaid within 15 years (or 180 months). Interest is paid at a constant rate equal to one percent over the prime rate in the month the loan begins. Principal and interest are paid ratably through monthly payroll deductions. Loans that are considered to be uncollectible at year end result in the outstanding principal being considered a hardship withdrawal from the participant’s plan account.
		Participant Distributions
		Participants may request an in-service withdrawal of all or a portion of certain types of contributions under standard in-service withdrawal rules. The withdrawal of any participant

Notes to Financial Statements
December 31, 2005 and 2004 and

for the Years Ended December 31, 2005 and 2004

		contributions which were not previously subject to income tax is restricted by Internal Revenue Service regulations.
		Participants who terminate employment before retirement, by reasons other than death or disability, may remain in the Plan or receive payment of their account balances in a lump sum. If the account balance is $1,000 or less, the terminated participant will receive the account balance in a lump sum. Participants are eligible to retire from the Company at age 62, upon reaching 55 with 20 years of service, or after 30 years of service. Upon retirement, disability, or death, a participant’s account balance may be received in a lump sum or installment payments.
		Termination
		While the Company has expressed no intentions to do so, the Plan may be terminated at any time.
3.		Income Tax Status
		The Plan administrator has received a favorable letter from the Internal Revenue Service dated March 18, 2004 regarding the Plan’s qualification under applicable income tax regulations. The Plan administrator believes the Plan is designed and is currently being operated in compliance with the applicable requirements of the Internal Revenue Code.
4.		Kellogg Company Master Trust
		The Plan has an undivided interest in the net assets held in the Kellogg Company Master Trust in which interests are determined on the basis of cumulative funds specifically contributed on behalf of the Plan adjusted for an allocation of income. Such income allocation is based on the Plan’s funds available for investment during the year.
		Kellogg Company Master Trust net assets at December 31, 2005 and 2004 and the changes in net assets for the years ended December 31, 2005 and December 31, 2004 are as follows:

Notes to Financial Statements
December 31, 2005 and 2004 and

for the Years Ended December 31, 2005 and 2004

Kellogg Company Master Trust
Schedule of Net Assets of Master Trust Investment Accounts

		2005				2004
Cash/equivalents
Interest bearing cash		$	13,672,373			$	15,615,882
Total cash/equivalents			13,672,373				15,615,882
Receivables			893,621				1,116,271
General Investments
Long Term U.S. Govt. Securities			17,245,904				15,322,171
Short Term U.S. Govt. Securities			16,279,545				9,591,890
Corporate Debt — Long-Term			8,198,000				12,813,238
Corporate Debt — Short-Term			8,960,891				6,537,040
Corporate Stocks — Kellogg Company Common Stock			127,144,034				113,775,950
Commingled Funds			200,780,541				212,891,676
Shares of Registered Investment Company			317,499,870				282,032,008
Guaranteed Insurance Contracts			633,675,888				634,279,171
Long Term Government Bonds — International			836,553				1,575,196
Short Term Government Bonds — International			2,082,500				1,629,354
Short Term International Corporate Bonds			716,700				—
Total general investments			1,333,420,426				1,290,447,694
Total investments			1,347,986,420				1,307,179,847
Payables
Other payables			(356,673	)			(175,924	)
Unsettled Trades			(589,880	)			—
Total liabilities			(946,553	)			(175,924	)
Net Assets		$	1,347,039,867			$	1,307,003,923
Percentage interest held by the Plan			38.0	%			39.6	%

Notes to Financial Statements
December 31, 2005 and 2004 and

for the Years Ended December 31, 2005 and 2004

Kellogg Company Master Trust
Schedule of Changes in Net Assets of Master Trust Investment Accounts

		2005				2004
Transfer of assets from Keebler Company Local 184-L 401(k) Plan		$	—			$	2,395,447
Transfer of assets from Mountain Top 401(k) Plan			1,420,446				—
Earnings on investments
Interest			31,565,638				30,552,802
Dividends			7,598,087				6,366,300
Net realized gain (loss)
Kellogg Company Common Stock			5,252,512				11,044,446
Commingled Funds			6,640,105				6,076,947
Corporate Debt — Short Term			17,462				(72,165	)
Corporate Debt — Long Term			4,875				(34,712	)
US Govt. Securities — Short Term			(133,374	)			(149,346	)
US Govt. Securities — Long Term			54,678				73,635
International Bond — Short Term			(35,071	)			(17,903	)
International Bond — Long Term			(1,165	)			(7,706	)
Shares of Registered Investment Co.			27,772,797				17,980,537
Net realized gain			39,572,819				34,893,733
Total additions			80,156,990				74,208,282
Net transfer of assets out of investment account			(26,515,304	)			(20,477,691	)
Fees and commissions			(599,986	)			(597,515	)
Total distributions			(27,115,290	)			(21,075,206	)
Change in unrealized appreciation (depreciation):
Kellogg Company Common Stock			(9,157,055	)			3,571,974
Commingled Funds			2,724,158				15,082,158
Corporate Debt — Short Term			(330,761	)			3,115
Corporate Debt — Long Term			(117,444	)			(213,582	)
US Govt. Securities — Short Term			(288,436	)			56,750
US Govt. Securities — Long Term			(165,279	)			(295,908	)
International Bond — Long Term			(7,866	)			(67,929	)
Shares of Registered Investment Co.			(5,558,416	)			13,640,436
International Bond — Short Term			(104,657	)			—
Changes in unrealized appreciation			(13,005,756	)			31,777,014
Net change in assets			40,035,944				84,910,090
Net assets
Beginning of year			1,307,003,923				1,222,093,833
End of year		$	1,347,039,867			$	1,307,003,923

Kellogg Company
Bakery, Confectionery, Tobacco Workers and Grain Millers
Savings and Investment Plan

Schedule of Assets (Held at End of Year)

as of December 31, 2005		Schedule I

(a)		(b)		(c)		(e)
				Description of Investment Including Maturity
		Identity of Issue, Borrower, Lessor		Date, Rate of Interest, Collateral, Par or
		or Similar Party		Maturity Value		Current Value
		Loans to participants (interest rate of 5.00% to 10.00%)				$	6,899,002

Kellogg Company
Bakery, Confectionery, Tobacco Workers and Grain Millers
Savings and Investment Plan

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: June 29, 2006		The Kellogg Company Bakery, Confectionery, Tobacco Workers and Grain Millers Savings and Investment Plan
		By		/s/ Jeffrey M. Boromisa
				Jeffrey M. Boromisa
				Senior Vice President and Chief Financial Officer
				Kellogg Company

Table of Contents

EXHIBIT INDEX

EXHIBIT NO.		DESCRIPTION
EX-23		Consent of Independent Registered Public Accounting Firm