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Market Update : 
Kellogg Company Q4 Earnings Call Transcript
Author: 123jump.com Staff
123jump.com
Last Update: 1:28 AM ET February 16 2010


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A. D. David Mackay

Thanks Judy.

Operator

Our next question comes from Eric Katzman of Deutsche Bank. Please state your question.

Eric Katzman - Deutsche Bank

Hi, good morning everybody. Two just detailed ones and then a broader picture one. The interest expense hit from the refinancing, how much was that?

Ronald Dissinger

Approximately seven pennies.

Eric Katzman - Deutsche Bank

Seven cents, okay, and then the charitable contribution in the other income line, how much was that?

Ronald Dissinger

That’s approximately four pennies.

Eric Katzman - Deutsche Bank

Four pennies, okay, and then the – I guess the broader question. Can you help me understand why, maybe this follows up a little on Judy''s question, but why SG&A as percentage of sales in the quarter was so high? You''ve been running roughly 26%, 27% of sales and yet this quarter it jumped to close to 30%, 31%. What''s happening there and do you think that''s kind of what – well just why don''t we go there?

Ronald Dissinger

There are really two key items there Eric. First is, you can recollect we had indicated on previous calls that we were going to increase our advertising investment double digit in the back half of the year.

Eric Katzman - Deutsche Bank

Yeah, but we''ve been doing that forever so I''m not buying that one.

Ronald Dissinger

But those are the results. I mean we increased our advertising significantly in the fourth quarter and in addition to that our up-front costs were up significantly as well. It was the highest investment we had in upfront costs within SG&A.


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