SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 1-12619
RALCORP HOLDINGS, INC.
SAVINGS INVESTMENT PLAN
RALCORP HOLDINGS, INC.
SUITE 2900
800 MARKET STREET
ST. LOUIS, MISSOURI 63101
RALCORP HOLDINGS, INC.
SAVINGS INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31,
------------
1999 1998
------------- ------------
ASSETS
Investments $ 111,467,447 $116,585,420
Due from Sugar Kake plan 3,038,607 -
------------- ------------
114,506,054 116,585,420
------------- ------------
LIABILITIES
Due to Milnot plan - 8,389,654
Fees payable 3,401 3,537
------------- ------------
3,401 8,393,191
------------- ------------
NET ASSETS AVAILABLE FOR BENEFITS $ 114,502,653 $108,192,229
============= ============
<FN>
See the accompanying Notes to Financial Statements.
1
RALCORP HOLDINGS, INC.
SAVINGS INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31,
-----------------------
1999 1998
------------- -------------
ADDITIONS
Investment income:
Interest and dividend income $ 5,265,619 $ 5,071,249
Net appreciation in fair value of investments 5,622,892 9,020,273
------------- -------------
10,888,511 14,091,522
------------- -------------
Contributions:
Employer 1,459,972 1,457,633
Participant 4,339,162 4,630,035
------------- -------------
5,799,134 6,087,668
------------- -------------
Asset transfers in 5,903,568 197,853
Other additions 4,145 -
------------- -------------
Total additions 22,595,358 20,377,043
------------- -------------
DEDUCTIONS
Benefits paid 16,872,746 11,982,103
Assets to be transferred to Milnot plan (630,744) 8,389,654
Administrative expenses 42,932 46,344
Other deductions - 17,847
------------- -------------
Total deductions 16,284,934 20,435,948
------------- -------------
NET INCREASE (DECREASE) 6,310,424 (58,905)
Net Assets Available for Benefits:
Beginning of year 108,192,229 108,251,134
------------- -------------
End of year $114,502,653 $108,192,229
============= =============
<FN>
See the accompanying Notes to Financial Statements.
2
SCHEDULE I
RALCORP HOLDINGS, INC.
SAVINGS INVESTMENT PLAN
Schedule of Assets Held for Investment Purposes
December 31, 1999
Identity of issuer,
borrower, lessor Fair
or similar party Description of Investment Cost Value
---------------------- ---------------------------- ----------- ------------
* The Vanguard Group 500 Index Fund $13,722,923 $ 24,379,975
* The Vanguard Group Explorer Fund 4,365,308 5,575,157
* The Vanguard Group Federal Money Market Fund 11,767,722 11,767,722
* The Vanguard Group International Growth Fund 4,049,180 5,473,996
* The Vanguard Group Total Bond Market Index Fund 1,285,829 1,228,539
* The Vanguard Group Wellington Fund 10,180,079 10,980,315
* The Vanguard Group Windsor II Fund 13,147,549 13,029,521
----------- ------------
Total Investment in Shares
in Registered Investment
Company 58,518,590 72,435,225
* The Vanguard Group Retirement Savings Trust 7,383,391 7,383,391
* Ralcorp Holdings, Inc. Common Stock 18,557,099 27,311,110
* Participant Loans Loans at 6.5% - 11.5% 4,337,721 4,337,721
----------- ------------
$88,796,801 $111,467,447
=========== ============
<FN>
* Party-in-interest
3
SCHEDULE II
RALCORP HOLDINGS, INC.
SAVINGS INVESTMENT PLAN
Schedule of Reportable Transactions*
Year Ended December 31, 1999
Current Value
Expense of Asset on
Identity Purchase Selling Lease Incurred with Cost of Transaction
of Party Description of Asset Price Price Rental Transaction Asset Date
- -------- ------------------------- ----------- ----------- ------- -------------- ----------- ------------
Vanguard 500 Index Fund $10,593,755 $ - $ - $ 10,593,755
Vanguard 500 Index Fund $13,233,355 - - $10,261,628 13,233,355
Vanguard Federal Money Market Fund 10,682,970 - - 10,682,970
Vanguard Federal Money Market Fund 10,204,267 - - 10,204,267 10,204,267
Vanguard Wellington Fund 2,593,164 - - 2,593,164
Vanguard Wellington Fund 4,147,354 - - 3,660,737 4,147,354
Vanguard Windsor II Fund 4,855,492 - - 4,855,492
Vanguard Windsor II Fund 6,195,572 - - 5,450,806 6,195,572
Vanguard Retirement Savings Trust 8,942,241 - - 8,942,241
Vanguard Retirement Savings Trust 1,558,850 - - 1,558,850 1,558,850
Vanguard Fixed Income Fund 4,126,094 - - 4,126,094
Vanguard Fixed Income Fund 4,804,930 - - 4,798,087 4,804,930
Ralcorp Stock Fund 8,068,816 - - 8,068,816
Ralcorp Stock Fund 14,047,299 - - 11,445,382 14,047,299
SCHEDULE II
RALCORP HOLDINGS, INC.
SAVINGS INVESTMENT PLAN
Schedule of Reportable Transactions*
Year Ended December 31, 1999
Identity Gain or
of Party Description of Asset (Loss)
- -------- ------------------------- -----------
Vanguard 500 Index Fund
Vanguard 500 Index Fund $ 2,971,727
Vanguard Federal Money Market Fund
Vanguard Federal Money Market Fund -
Vanguard Wellington Fund
Vanguard Wellington Fund 486,617
Vanguard Windsor II Fund
Vanguard Windsor II Fund 744,766
Vanguard Retirement Savings Trust
Vanguard Retirement Savings Trust -
Vanguard Fixed Income Fund
Vanguard Fixed Income Fund 6,843
Ralcorp Stock Fund
Ralcorp Stock Fund 2,601,917
<FN>
*Transactions or series of transactions in excess of 5% of the current value of
the Plan's assets as of the beginning of the Plan year as defined in Section
2520.103-6 of the Department of Labor Rules and Regulations for Reporting and
Disclosure of ERISA.
4
RALCORP HOLDINGS, INC.
SAVINGS INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - DESCRIPTION OF PLAN
The following description of the Ralcorp Holdings, Inc. (Ralcorp or the Company)
Savings Investment Plan (the Plan) provides only general information.
Participants should refer to the plan document for a more complete description
of the Plan's provisions.
Plan Purpose. The Plan is a defined contribution plan whose purpose is to
permit deferrals of compensation by eligible employees of the Company and its
subsidiaries to enable them to share in the Company's performance through
participation in the Ralcorp Stock Fund and to provide them with an attractive,
convenient vehicle for accumulating capital for their future economic security.
The Plan is subject to certain provisions of the Employee Retirement Income
Security Act of 1974, as amended (ERISA). The Plan is designed to meet ERISA's
reporting and disclosure and fiduciary responsibility requirements, as well as
to meet the minimum standards for participation and vesting. The Plan is not,
however, subject to ERISA's minimum funding standards, nor are benefits under
the Plan eligible for termination insurance provided by the Pension Benefit
Guaranty Corporation (PBGC).
Eligibility. All regular sales, administrative and clerical employees and
certain production employees, depending on the terms and conditions of
employment, who receive regular compensation from a payroll subject to FICA in
the United States are eligible to participate to the extent permitted by the
Plan or applicable law, with the exception of Martin Gillet employees. In
addition, the Plan requires completion of one year of credited service with the
Company prior to participation in the Plan. At December 31, 1999 and 1998,
there were a total of 1,723 and 1,953 participants, respectively, in the Plan.
Plan Administration. The Plan is administered by the Company. Except as to
matters required by the terms of the Plan to be decided by the Company's Board
of Directors (the Board), the Company's Benefits Administration Committee (BAC)
has the right to interpret the Plan and to decide certain matters arising under
the Plan. The Board has designated the Company's Employee Benefit Trustees
Committee (EBTC) as having certain rights and obligations to control and manage
plan assets, to select investment funds available for investment by plan
participants, and to appoint and remove the trustee and any investment managers
retained in connection with the investment of plan assets.
Plan Contributions. Participants may make maximum contributions to the Plan
equal to the lesser of $30,000 or 15% of their compensation for that year. The
pre-tax contribution amount is limited to $10,000 per calendar year. Subject to
such limitations, participants may make basic contributions of 2% to 12% of
their compensation, in 1% increments, on a pre-tax basis.
The Company contributes a maximum of $.50 for each dollar contributed by
participants, up to 6% of the participants' pre-tax earnings. The Company
match is graduated based on years of service as follows: one year of service
equates to a 15% Company match, two years of service equates to a 30% Company
match and three or more years of service entitles the employee to the maximum
Company match of 50%. Participant contributions may be invested in any of the
available investment funds, while the Company match is invested solely in the
Ralcorp Stock Fund. Participant contributions and earnings thereon are vested
and non-forfeitable from the time made. Company matching contributions and
earnings thereon vest at a rate of 25% for each year of credited Company service
by the participant.
Participants may also, subject to the $30,000 and 15% limitations, make
supplemental, unmatched contributions of 1% to 10% of their compensation, in 1%
increments. Such contributions are made on an after-tax basis and are
immediately vested.
5
RALCORP HOLDINGS, INC.
SAVINGS INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
Employees of several of the Company's production facilities are subject to
different pre-tax limits, matching contribution levels and are not eligible to
make supplemental contributions.
Investment of Funds. All contributions will be deposited by the Company in
trust funds held by Vanguard Fiduciary Trust Company (Trustee) or any successor
selected by the EBTC. The value of the trust funds change according to
increases or decreases in market value of the assets, gain or loss on sale of
assets and income from dividends and interest held therein. In addition,
Vanguard performs all record keeping functions for the Plan.
The Trustee will maintain as many separate investment funds within its trust
funds, with such different investment objectives, as the EBTC deems advisable.
During the plan years ended December 31, 1999 and 1998, participants were able
to allocate their contributions among the following investment options:
Vanguard 500 Index Fund, Vanguard Explorer Fund, Vanguard Federal Money Market
Fund, Vanguard International Growth Fund, Vanguard Total Bond Market Index Fund,
Vanguard Wellington Fund, Vanguard Windsor II Fund, Vanguard Retirement Savings
Trust, Ralcorp Stock Fund and Fixed Income I Fund.
Plan Withdrawals, Loans and Forfeitures. Upon termination of a participant,
retirement, disability, or death, or in the event of termination of the Plan
without establishment of a successor plan, the amount in the trust fund credited
to each participant which is vested will be distributed to the participant or to
the participant's beneficiary or other legal representative. Under the Plan, a
participant may elect from several payment alternatives regarding the timing and
nature of distributions. Plan withdrawals may be made prior to termination or
retirement for cases of hardship. Such distributions are limited to the amount
required to meet the need created by the hardship and are made in accordance
with guidelines determined by the Company.
The Company may, subject to certain rules and regulations, permit a participant
to borrow from the trust funds. Such loans will be permitted for any purpose
provided certain plan conditions and certain other conditions as prescribed by
federal law are met.
Upon termination, any Company matching contribution and the earnings thereon
which are not vested will be forfeited, but will be restored if the participant
again becomes an eligible employee within five years after termination. Amounts
forfeited are used to reduce Company matching contributions required under the
Plan. Forfeitures, net of amounts restored, during the years ended December 31,
1999 and 1998 were $16,600 and $8,935, respectively, and are included in
employer contributions on the Statement of Changes in Net Assets Available for
Benefits for the years ended December 31, 1999 and 1998.
Plan Amendments and Termination. The Board, and in certain limited
circumstances the EBTC and the Chief Executive Officer of the Company, may amend
the Plan. The Board may also terminate the Plan or direct that Company matching
contributions cease. In such cases, non-forfeitable rights to the Company
matching contributions credited to a participant's account shall automatically
vest in such participant. Under the Plan, a participant may elect from several
alternative rules regarding the timing and nature of distribution.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed by the Plan are described below:
Basis of Accounting. The accompanying financial statements are prepared using
the accrual basis of accounting.
Use of Estimates. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of additions to and deductions from net
assets during the reporting period. Actual results could differ from those
estimates.
6
RALCORP HOLDINGS, INC.
SAVINGS INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
Investments. Plan investments in common stock, collective trusts, and shares of
registered investment companies are carried at fair market value based on
closing prices on the last business day of the plan year. Interest income is
recognized as earned and dividend income is recognized on the date of record.
Participant loans are valued at cost, which approximates fair value. Units of
the Retirement Savings Trust are valued at net asset value at year-end. The
Ralcorp Stock Fund is valued at its year-end unit closing price (comprised of
year-end market price plus uninvested cash position). Purchases and sales of
investments are recorded on a trade-date basis. Net appreciation in fair value
of investments is comprised of net realized and unrealized gains and losses.
Net realized gain (loss) is the difference between sale proceeds and historical
cost using the average cost method. Unrealized gain (loss) is the difference
between the market value of an investment at the end of the plan year and the
market value of the same investment at the beginning of the plan year or at its
acquisition date if acquired during the plan year. Capital gain distributions
are included in dividend income.
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 that changes in risks
in the near term could materially affect the amounts reported in the Statement
of Net Assets Available for Benefits.
Payment of Benefits. Benefits are recorded when paid. Benefits payable were
$522,346 at December 31, 1999.
NOTE 3 - INVESTMENTS
The Plan's investments are held in a trust fund. The following table presents
the carrying value of investments. Investments that represent five percent or
more of the Plan's net assets are separately disclosed.
December 31,
-----------------------------
1999 1998
------------- -------------
INVESTMENTS AT FAIR VALUE AS DETERMINED
BY QUOTED MARKET PRICE
Common stock:
Ralcorp Holdings, Inc. $ 27,311,110 $ 30,564.402
Mutual funds:
Vanguard 500 Index Fund 24,379,975 22,888,630
Vanguard Explorer Fund 5,575,157 4,292,955
Vanguard Federal Money Market Fund 11,767,722 11,289,018
Vanguard International Growth Fund 5,473,996 4,647,579
Vanguard Wellington Fund 10,980,315 13,023,072
Vanguard Windsor II 13,029,521 16,747,138
Vanguard Retirement Savings Trust 7,383,391 7,021,373
Other 1,228,539 1,299,649
------------- -------------
107,129,726 111,773,816
INVESTMENTS AT COST WHICH APPROXIMATES
FAIR VALUE
Participant loans 4,337,721 4,811,604
------------- -------------
$ 111,467,447 $ 116,585,420
============= =============
7
RALCORP HOLDINGS, INC.
SAVINGS INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
During 1999 and 1998, the Plan's investments (including investments bought,
sold, and held during the year) appreciated in value as follows:
Year Ended December 31,
-----------------------------
1999 1998
------------- -------------
INVESTMENTS AT FAIR VALUE AS DETERMINED
BY QUOTED MARKET PRICE
Common stock $ 2,724,012 $ 2,822,807
Mutual funds 2,898,880 6,197,466
------------- -------------
$ 5,622,892 $ 9,020,273
============= =============
NOTE 4 - RELATED PARTY TRANSACTIONS
Certain plan investments are shares of Ralcorp common stock. Ralcorp is the
plan sponsor and, therefore, these transactions qualify as party-in-interest.
At December 31, 1999, these shares had a total cost of $18,557,099 and market
value of $27,311,110. At December 31, 1998, these shares had a total cost of
$21,932,486 and market value of $30,564,402. During 1999, the Plan purchased
$8,092,839 and sold $14,084,015 of such assets. During 1998, the Plan purchased
$10,864,942 and sold $10,973,593 of such assets.
Certain plan investments are shares of mutual funds managed by Vanguard.
Vanguard is the trustee as defined by the Plan and, therefore, these
transactions qualify as party-in-interest. At December 31, 1999, these shares
had a total cost of $65,901,981 and market value of $79,818,616. At December
31, 1998, these shares had a total cost of $65,686,632 and market value of
$81,209,414. During 1999, the Plan purchased $42,066,267 and sold $39,335,032
of such assets. During 1998, the Plan purchased $34,577,001 and sold
$29,640,984 of such assets. Fees incurred by the Plan for the investment
management services amounted to $42,932 and $46,344 for the years ended December
31, 1999 and 1998, respectively.
NOTE 5 - INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
that the Plan does in fact constitute a qualified plan and that the trust is
exempt from income tax under the Internal Revenue Code of 1986, as amended.
Participants' basic contributions, Company matching contributions and earnings
of plan investments are not subject to federal income tax until distributed from
the Plan. Supplemental contributions are made from a participant's after-tax
compensation. Earnings related to these supplemental contributions are not,
however, subject to federal income tax as long as they remain in the Plan.
NOTE 6 - ASSET TRANSFERS
On August 25, 1998, the Company completed the purchase of Sugar Kake Cookie,
Inc. The $3,038,607 of assets related to participant balances in the Sugar Kake
401(k) profit sharing plan were merged into the Plan on January 3, 2000. The
transfer of those assets was approved on October 22, 1999. Accordingly, this
amount has been recorded as a receivable due from the Sugar Kake plan and as an
'asset transfer in' in the accompanying financial statements as of and for the
year ended December 31, 1999.
8
RALCORP HOLDINGS, INC.
SAVINGS INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
During 1998, the Company completed the purchases of Flavor House, Inc. and
Nutcracker Brands, Inc. The $2,864,961 of assets related to participant
balances in those companies' 401(k) profit sharing plans were merged into the
Plan on May 28, 1999. Accordingly, this amount has been recorded as an 'asset
transfer in' in the accompanying Statement of Changes in Net Assets Available
for Benefits for the year ended December 31, 1999.
On September 10, 1998, the Company sold Beech-Nut Nutrition Corporation
(Beech-Nut), a wholly-owned subsidiary, to The Milnot Company (Milnot). As a
result of the sale, the Plan incurred a liability to transfer Beech-Nut
participant balances to the Milnot plan. This liability was estimated to be
$8,389,654 as of December 31, 1998. The actual liability was determined to be
$7,758,910 and this amount was transferred to the Milnot plan in 1999. The
difference between the estimated amount to be transferred and the actual amount
transferred was due to employee terminations and a decline in market value of
participant asset balances. The estimated liability as of December 31, 1998 and
the subsequent reduction in such estimated liability are reflected in the
Statement of Changes in Net Assets Available for Benefits for the years ended
December 31, 1999 and 1998.
On April 21, 1997, the Company completed the purchase of the Wortz Company. The
assets related to participant balances in the Wortz 401(k) Savings Plan were
merged with the Plan effective June 30, 1998. This transfer is shown on the
"Asset transfers in" line of the Statement of Changes in Net Assets Available
for Benefits for the year ended December 31, 1998.
On January 31, 1997 the Company sold its branded cereal and snack business
(Branded Business) to General Mills, Inc. (General Mills). This transaction
resulted in a distribution of General Mills stock to Ralcorp shareholders of
record on January 31, 1997. The Plan received its distribution of General Mills
stock and created the General Mills Fund to hold the stock. Participants were
allocated their respective shares of General Mills stock based on their Ralcorp
Stock Fund balance. On January 30, 1998 assets in the General Mills Fund were
liquidated. Prior to the liquidation, participants were able to elect into
which funds they wanted their balance reinvested. Immediately upon liquidation,
the proceeds resulting from the sale of the remaining assets in the General
Mills Fund, approximately $6.7 million, were transferred to the Vanguard Federal
Money Market Fund.
The assets of former Ralcorp employees which were hired by General Mills as a
result of the sale of the Branded Business are maintained by the Plan. These
participants are permitted to transfer assets among Plan funds, but are not
permitted to make contributions or receive new loans. A restated plan filed
with the IRS during 1998 contains a provision that allows participants who
remain employed by General Mills to request a distribution of their account
balance prior to December 31, 1999. After that date they can only receive a
distribution after they have incurred a separation of service. "Benefits paid"
reported in 1999 and 1998 include any distributions requested under this
provision.
9
(on PricewaterhouseCoopers letterhead)
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator of
the Ralcorp Holdings, Inc.
Savings Investment Plan
In our opinion, the accompanying statement of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Ralcorp Holdings, Inc. Savings Investment Plan (the "Plan") at December
31, 1999 and 1998, 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. 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 auditing standards generally accepted in the
United States, which 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 the opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental Schedules of Assets
Held for Investment Purposes and Reportable Transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are 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. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial staements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
/s/ PricewaterhouseCoopers LLP
- --------------------------------
May 12, 2000
10
SIGNATURE
The Plan.
Pursuant to the requirements of the Securities Exchange Act of 1934, the members
of the Ralcorp Holdings, Inc. Employee Benefit Trustees Committee have duly
caused this annual report to be signed by the undersigned hereunto duly
authorized.
RALCORP HOLDINGS, INC.
EMPLOYEE BENEFIT TRUSTEES COMMITTEE
By /s/ T. G. Granneman
-------------------------------------
T. G. Granneman, Chairman
Ralcorp Holdings, Inc.
Employee Benefit Trustees Committee
June 27, 2000
11
EXHIBIT INDEX
Exhibits
- --------
23 Consent of Independent Accounts
12