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, 1998
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
WITH FUND INFORMATION
DECEMBER 31, 1998
Participant Directed
------------------------------------------------
U.S. Growth
Ralcorp Fixed Equity Government and
Stock Income Index Money Income
(In thousands) Fund Fund Fund Market Fund
- ----------------------------------------------- -------- ------- ------- ----------- -------
Assets
Investments:
Shares in registered investment
companies $ 7,021 $22,889 $ 11,289 $16,747
Ralcorp common stock $ 30,564
Notes receivable from participants
-------- ------- ------- ----------- -------
30,564 7,021 22,889 11,289 16,747
-------- ------- ------- ----------- -------
Liabilities
Due to Milnot plan (see Note 7) 2,488 315 1,494 656 1,200
Fees payable 4
-------- ------- ------- ----------- -------
2,492 315 1,494 656 1,200
-------- ------- ------- ----------- -------
Net Assets Available for Benefits $ 28,072 $ 6,706 $21,395 $ 10,633 $15,547
======== ======= ======= =========== =======
RALCORP HOLDINGS, INC.
SAVINGS INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
DECEMBER 31, 1998
Participant Directed
----------------------------------------
Inter- Parti-
Aggressive national Bond cipant
Balanced Growth Growth Index Loan
(In thousands) Fund Fund Fund Fund Fund Total
- ----------------------------------------------- --------- ----------- --------- ------ ------- --------
Assets
Investments:
Shares in registered investment
companies $ 13,023 $ 4,293 $ 4,648 $1,300 $ 81,210
Ralcorp common stock 30,564
Notes receivable from participants $ 4,812 4,812
--------- ----------- --------- ------ ------- --------
13,023 4,293 4,648 1,300 4,812 116,586
--------- ----------- --------- ------ ------- --------
Liabilities
Due to Milnot plan (see Note 7) 823 431 377 175 430 8,389
Fees payable 4
--------- ----------- --------- ------ ------- --------
823 431 377 175 430 8,393
--------- ----------- --------- ------ ------- --------
Net Assets Available for Benefits $ 12,200 $ 3,862 $ 4,271 $1,125 $ 4,382 $108,193
========= =========== ========= ====== ======= ========
<FN>
See the accompanying Notes to Financial Statements.
1
RALCORP HOLDINGS, INC.
SAVINGS INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
DECEMBER 31, 1997
Participant Directed
----------------------------------------------------------
U.S. Growth
Ralcorp Fixed Equity Government and
Stock Income Index Money Income Balanced
(In thousands) Fund Fund Fund Market Fund Fund
- ----------------------------------------------- -------- ------- ------- ---------- ------- ---------
Assets
Investments:
Shares in registered investment
companies $ 4,938 $17,981 $ 8,026 $15,171 $ 12,162
Common stock
Ralcorp Stock $ 28,029
General Mills Stock
Insurance company contracts 312
Notes receivable from participants
-------- ------- ------- ------- ------- ---------
28,029 5,250 17,981 8,026 15,171 12,162
Liabilities
Fees payable 4
-------- ------- ------- ------- ------- ---------
Net Assets Available for Benefits $ 28,025 $ 5,250 $17,981 $ 8,026 $15,171 $ 12,162
======== ======= ======= ======= ======= =========
RALCORP HOLDINGS, INC.
SAVINGS INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
DECEMBER 31, 1997
Participant Directed
------------------------------
Inter- Parti-
Aggressive national Bond General cipant
Growth Growth Index Mills Loan
(In thousands) Fund Fund Fund Fund Fund Total
- ----------------------------------------------- ----------- --------- ------ -------- ------- --------
Assets
Investments:
Shares in registered investment
companies $ 4,669 $ 4,496 $ 554 $ 67,997
Common stock
Ralcorp Stock 28,029
General Mills Stock $ 6,547 6,547
Insurance company contracts 312
Notes receivable from participants $ 5,371 5,371
----------- --------- ------ -------- ------- --------
4,669 4,496 554 6,547 5,371 108,256
Liabilities
Fees payable 4
----------- --------- ------ -------- ------- --------
Net Assets Available for Benefits $ 4,669 $ 4,496 $ 554 $ 6,547 $ 5,371 $108,252
=========== ========= ====== ======== ======= ========
<FN>
See the accompanying Notes to Financial Statements.
2
RALCORP HOLDINGS, INC.
SAVINGS INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
YEAR ENDED DECEMBER 31, 1998
Participant Directed
-------------------------------------------------------------------
U.S. Growth
Ralcorp Fixed Equity Government and
Stock Income Index Money Income Balanced
(In thousands) Fund Fund Fund Market Fund Fund
- -------------------------------------------- --------- -------- -------- ------------ --------- ---------
Additions To Net Assets:
Contributions:
Participants $ 725 $ 132 $ 787 $ 880 $ 838 $ 594
Employer 1,456
--------- -------- -------- ------------ --------- ---------
2,181 132 787 880 838 594
--------- -------- -------- ------------ --------- ---------
Investment income:
Dividends and interest 354 358 567 1,688 1,441
Net appreciation (depreciation) in fair
value of investments 2,650 (3) 4,792 734 (5)
Asset transfers in 18 3 44 33 36 16
Other additions (12) (1) (4) (2)
--------- -------- -------- ------------ --------- ---------
2,656 354 5,193 596 2,456 1,452
--------- -------- -------- ------------ --------- ---------
Total Additions 4,837 486 5,980 1,476 3,294 2,046
--------- -------- -------- ------------ --------- ---------
Deductions From Net Assets:
Distribution to participants (2,093) (301) (2,010) (2,508) (1,843) (1,306)
Assets to be transferred to Milnot plan (2,488) (315) (1,494) (656) (1,200) (823)
Administrative expenses (24) (1) (5) (6) (5) (4)
--------- -------- -------- ------------ --------- ---------
(4,605) (617) (3,509) (3,170) (3,048) (2,133)
--------- -------- -------- ------------ --------- ---------
Net Increase (Decrease) Prior to Transfers 232 (131) 2,471 (1,694) 246 (87)
Interfund Transfers (185) 1,587 943 4,301 130 125
--------- -------- -------- ------------ --------- ---------
Net Increase (Decrease) 47 1,456 3,414 2,607 376 38
Net Assets, Beginning of Year 28,025 5,250 17,981 8,026 15,171 12,162
--------- -------- -------- ------------ --------- ---------
Net Assets, End of Year $ 28,072 $ 6,706 $21,395 $ 10,633 $ 15,547 $ 12,200
========= ======== ======== ============ ========= =========
3
RALCORP HOLDINGS, INC.
SAVINGS INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION (CONTINUED)
YEAR ENDED DECEMBER 31, 1998
Participant Directed
---------------------------------
Inter- Parti-
Aggressive national Bond General cipant
Growth Growth Index Mills Loan
(In thousands) Fund Fund Fund Fund Fund Total
- ---------------------------------------------------------- ------------ ---------- ------- --------- -------- ---------
Additions To Net Assets:
Contributions:
Participants $ 313 $ 265 $ 98 $ 4,632
Employer 1,456
------------ ---------- ------- --------- -------- ---------
313 265 98 6,088
------------ ---------- ------- --------- -------- ---------
Investment income:
Dividends and interest 37 92 59 $ 45 $ 430 5,071
Net appreciation (depreciation) in fair
value of investments 70 597 13 172 9,020
Asset transfers in 11 16 11 10 198
Other additions (1) 2 (18)
------------ ---------- ------- --------- -------- ---------
117 705 83 219 440 14,271
------------ ---------- ------- --------- -------- ---------
Total Additions 430 970 181 219 440 20,359
------------ ---------- ------- --------- -------- ---------
Deductions From Net Assets:
Distribution to participants (440) (443) (246) (55) (737) (11,982)
Assets to be transferred to Milnot plan (431) (377) (175) (430) (8,389)
Administrative expenses (1) (1) (47)
------------ ---------- ------- --------- -------- ---------
(872) (821) (421) (55) (1,167) (20,418)
------------ ---------- ------- --------- -------- ---------
Net Increase (Decrease) Prior to Transfers (442) 149 (240) 164 (727) (59)
Interfund Transfers (365) (374) 811 (6,711) (262) -
------------ ---------- ------- --------- -------- ---------
Net Increase (Decrease) (807) (225) 571 (6,547) (989) (59)
Net Assets, Beginning of Year 4,669 4,496 554 6,547 5,371 108,252
------------ ---------- ------- --------- -------- ---------
Net Assets, End of Year $ 3,862 $ 4,271 $1,125 $ - $ 4,382 $108,193
============ ========== ======= ========= ======== =========
<FN>
See the accompanying Notes to Financial Statements.
4
RALCORP HOLDINGS, INC.
SAVINGS INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION
YEAR ENDED DECEMBER 31, 1997
Participant Directed
---------------------------------------------------------------
U.S. Growth
Ralcorp Fixed Equity Government and
Stock Income Index Money Income Balanced
(In thousands) Fund Fund Fund Market Fund Fund
- ---------------------------------------------------------- --------- -------- -------- ----------- -------- ---------
Additions To Net Assets
Contributions:
Participants $ 1,723 $ 135 $ 523 $ 744 $ 621 $ 464
Employer 2,015
--------- -------- -------- ----------- -------- ---------
3,738 135 523 744 621 464
--------- -------- -------- ----------- -------- ---------
Investment income:
Dividends and interest 99 331 372 376 1,351 1,014
Net appreciation (depreciation) in fair
value of investments 8,694 (5) 3,928 1,990 1,111
Other additions 9 9 17 (16) 15 12
--------- -------- -------- ----------- -------- ---------
8,802 335 4,317 360 3,356 2,137
--------- -------- -------- ----------- -------- ---------
Total Additions 12,540 470 4,840 1,104 3,977 2,601
--------- -------- -------- ----------- -------- ---------
Deductions From Net Assets
Distribution to participants (2,715) (1,122) (1,785) (1,930) (1,419) (1,401)
Administrative expenses (24) (1) (4) (4) (4) (3)
--------- -------- -------- ----------- -------- ---------
(2,739) (1,123) (1,789) (1,934) (1,423) (1,404)
--------- -------- -------- ----------- -------- ---------
Net Increase (Decrease) Prior to Transfers 9,801 (653) 3,051 (830) 2,554 1,197
Transfer to Ralston Resorts Savings
Investment Plan (844) (477) (1,247) (432) (1,452) (837)
Interfund Transfers (19,343) (467) 3,563 2,120 4,338 2,247
--------- -------- -------- ----------- -------- ---------
Net Increase (Decrease) (10,386) (1,597) 5,367 858 5,440 2,607
Net Assets, Beginning of Year 38,411 6,847 12,614 7,168 9,731 9,555
--------- -------- -------- ----------- -------- ---------
Net Assets, End of Year $ 28,025 $ 5,250 $17,981 $ 8,026 $15,171 $ 12,162
========= ======== ======== =========== ======== =========
5
RALCORP HOLDINGS, INC.
SAVINGS INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
WITH FUND INFORMATION (CONTINUED)
YEAR ENDED DECEMBER 31, 1997
Participant Directed
---------------------------------
Inter- Parti-
Aggressive national Bond General cipant
Growth Growth Index Mills Loan
(In thousands) Fund Fund Fund Fund Fund Total
- ---------------------------------------------------------- ------------ ---------- ------- --------- -------- ---------
Additions To Net Assets
Contributions:
Participants $ 295 $ 250 $ 45 $ 4,800
Employer 2,015
------------ ---------- ------- --------- -------- ---------
295 250 45 6,815
------------ ---------- ------- --------- -------- ---------
Investment income:
Dividends and interest 458 202 16 $ 311 $ 431 4,961
Net appreciation (depreciation) in fair
value of investments 38 (35) 14 2,298 18,033
Other additions 22 16 84
------------ ---------- ------- --------- -------- ---------
518 183 30 2,609 431 23,078
------------ ---------- ------- --------- -------- ---------
Total Additions 813 433 75 2,609 431 29,893
------------ ---------- ------- --------- -------- ---------
Deductions From Net Assets
Distribution to participants (536) (697) (3) (1,569) (1,295) (14,472)
Administrative expenses (1) (1) (6) (48)
------------ ---------- ------- --------- -------- ---------
(537) (698) (3) (1,575) (1,295) (14,520)
------------ ---------- ------- --------- -------- ---------
Net Increase (Decrease) Prior to Transfers 276 (265) 72 1,034 (864) 15,373
Transfer to Ralston Resorts Savings
Investment Plan (501) (776) (903) (7,469)
Interfund Transfers 507 356 482 6,416 (219) -
------------ ---------- ------- --------- -------- ---------
Net Increase (Decrease) 282 (685) 554 6,547 (1,083) 7,904
Net Assets, Beginning of Year 4,387 5,181 6,454 100,348
------------ ---------- ------- --------- -------- ---------
Net Assets, End of Year $ 4,669 $ 4,496 $ 554 $ 6,547 $ 5,371 $108,252
============ ========== ======= ========= ======== =========
<FN>
See the accompanying Notes to Financial Statements.
6
SCHEDULE I
RALCORP HOLDINGS, INC.
SAVINGS INVESTMENT PLAN
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998
Identity of issuer,
borrower, lessor Fair
or similar party Description of Investment Cost Value
- ----------------------------- --------------------------------------------- --------- ---------
($ in thousands)
Ralcorp Holdings, Inc.* Common Stock $ 21,932 $ 30,564
--------- ---------
The Vanguard Group* 500 Index Fund 13,367 22,889
The Vanguard Group* Windsor II Fund 13,740 16,747
The Vanguard Group* Wellington Fund 11,243 13,023
The Vanguard Group* Federal Money Market Fund 11,289 11,289
The Vanguard Group* Retirement Savings Trust 7,041 7,021
The Vanguard Group* International Growth Fund 3,883 4,648
The Vanguard Group* Explorer Fund 3,842 4,293
The Vanguard Group* Total Bond Market Index Fund 1,282 1,300
--------- ---------
Total Investment in Shares in Registered
Investment Company 65,687 81,210
--------- ---------
Participant Loan Fund* Participant loans, interest rate 6.5% - 11.5% 4,812 4,812
--------- ---------
$ 92,431 $ 116,586
========= =========
<FN>
* Party-in-interest
7
SCHEDULE II
RALCORP HOLDINGS, INC.
SAVINGS INVESTMENT PLAN
ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS*
YEAR ENDED DECEMBER 31, 1998
Expense Current Value
Incurred of Asset on
Identity of Party Involved/ Purchase Selling Lease with Cost of Transaction Gain or
Description of Asset Price Price Rental Transaction Asset Date (Loss)
- ---------------------------- ----------- ----------- ------ ----------- ----------- ------------- -----------
RALCORP STOCK FUND $10,855,771 $ - $ - $ 10,855,771
$10,958,173 - - $ 9,213,142 10,958,173 $ 1,745,031
FIXED INCOME FUND 5,311,898 - - 5,311,898
3,537,578 - - 3,531,099 3,537,578 6,479
FEDERAL MONEY MARKET FUND 13,744,533 - - 13,744,533
10,477,631 - - 10,477,631 10,477,631 -
VANGUARD WELLINGTON FUND 4,061,887 - - 4,061,887
3,195,621 - - 2,744,402 3,195,621 451,219
VANGUARD 500 INDEX FUND 7,078,207 - - 7,078,207
6,961,410 - - 5,474,039 6,961,410 1,487,371
VANGUARD WINDSOR II FUND 6,168,864 - - 6,168,864
5,325,964 - - 4,492,103 5,325,964 833,861
GENERAL MILLS FUND 44,440 - - 44,440
6,766,222 - - 5,620,080 6,766,222 1,146,142
<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.
8
RALCORP HOLDINGS, INC.
SAVINGS INVESTMENTS 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
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. In addition, the Plan requires completion of one year
of credited service with the Company prior to participation in the Plan. At
December 31, 1998 and 1997, there were a total of 1,953 and 2,052 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.
9
RALCORP HOLDINGS, INC.
SAVINGS INVESTMENTS PLAN
NOTES TO FINANCIAL STATEMENTS
Prior to April 1, 1997, for employees first hired by Ralston Purina Company
(Ralston) before June 30, 1993 and who were employed by the Company on April 1,
1994, the Company made a 100% matching contribution on the first 6% of such
participant's basic contributions; both the participant's basic contribution, up
to 6% of their compensation, and the Company match were invested solely in the
Ralcorp Stock Fund. Participant basic contributions in excess of 6% of their
compensation were invested in any of the other Plan investment funds. For
employees not meeting the hiring date criteria, the Company match each year was
20% of that year's current maximum Company match for each year of service,
reaching 100% after five years.
Effective on April 1, 1997, for each dollar contributed by participants, up to
6% of pre-tax earnings, the Company contributes $.50. Also effective on this
date, participant contributions may be invested in any of the available
investment funds, while the Company match is invested solely in the Ralcorp
Stock Fund. 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 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 (including service prior to April 1, 1994 with Ralston)
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.
Employees of several of the Company's production facilities are subject to
different matching contribution levels and are not eligible to make supplemental
contributions.
Investment of Funds. All contributions will be deposited by the Company in a
trust fund held by Vanguard Fiduciary Trust Company (Trustee) or any successor
selected by the EBTC. The value of the trust funds will 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.
As of December 31, 1998, the following funds have been established for
participants: the Ralcorp Common Stock Fund, the Vanguard Bond Index Fund, the
Vanguard Retirement Savings Trust Fund, the Vanguard 500 Index Fund, the
Vanguard Federal Money Market Fund, the Vanguard Windsor II Fund, the Vanguard
Wellington Fund, the Vanguard Explorer Fund, and the Vanguard International
Growth Fund.
10
RALCORP HOLDINGS, INC.
SAVINGS INVESTMENTS PLAN
NOTES TO FINANCIAL STATEMENTS
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 him, his beneficiary
or other legal representative. Under the Plan, a participant may elect from
several payment alternatives on 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 will be used to reduce Company matching contributions required under
the Plan. Forfeitures net of amounts restored during the years ended December
31, 1998 and 1997 were $8,935 and $26,269, respectively, and are included in
employer contributions on the Statements of Changes in Net Assets Available for
Benefits with Fund Information for the years ended December 31, 1998 and 1997.
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 on 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 these
estimates.
11
RALCORP HOLDINGS, INC.
SAVINGS INVESTMENTS PLAN
NOTES TO FINANCIAL STATEMENTS
Investments. Plan investments in common stock 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. Plan investments in
various insurance company contracts are carried at contract value, which
approximates fair value. Participant loans are valued at cost, which
approximates fair value. 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 proceeds and costs, 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.
Payment of Benefits. Benefits are recorded when paid.
NOTE 3: INVESTMENTS
Except for its investment contract with an insurance company, the Plan's
investments are held in a trust fund. The following table presents the carrying
value of investments. Investments that represent 5 percent or more of the
Plan's net assets are separately identified.
December 31,
---------------------------
(In thousands) 1998 1997
- ---------------------------------------------------------------------------
INVESTMENTS AT FAIR VALUE AS DETERMINED
BY QUOTED MARKET PRICE
Common stocks:
Ralcorp Holdings, Inc. $ 30,564 $ 28,029
General Mills, Inc. - 6,547
Mutual funds:
Vanguard 500 Index Fund 22,889 17,981
Vanguard Windsor II 16,747 15,171
Vanguard Wellington Fund 13,023 12,162
Vanguard Federal Money Market Fund 11,289 8,026
Vanguard Retirement Savings Trust 7,021 4,938
Other 10,241 9,719
---------------------------
111,774 102,573
INVESTMENTS AT ESTIMATED FAIR VALUE
Participant loans 4,812 5,371
INVESTMENTS AT CONTRACT VALUE
Investment contract with American
International Life Assurance - 312
---------------------------
$116,586 $108,256
===========================
12
RALCORP HOLDINGS, INC.
SAVINGS INVESTMENTS PLAN
NOTES TO FINANCIAL STATEMENTS
During 1998 and 1997 the Plan's investments (including investments bought, sold,
and held during the year) appreciated in value as follows:
Year Ended
December 31,
-------------------
(In thousands) 1998 1997
- ------------------------------------------------------------------
INVESTMENTS AT FAIR VALUE AS DETERMINED
BY QUOTED MARKET PRICE
Common stocks $ 2,822 $ 10,992
Mutual funds 6,198 7,041
-------- ---------
$ 9,020 $ 18,033
======== =========
NOTE 4: UNIT ACCOUNTING
The Company allocates units to participant accounts for the Ralcorp Stock Fund
and the Fixed Income Fund. On December 31, 1998, the total number of units
allocated to each of these funds and the applicable net asset value (NAV) of
each unit was as follows:
Units Outstanding NAV per Unit
----------------- ------------
Ralcorp Stock Fund 2,690,528 $ 11.36
Fixed Income Fund 700,037 $ 10.03
NOTE 5: 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, 1998 these shares had a total cost of $21,932,486 and market
value of $30,564,402. During the year, 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, 1998 these shares
had a total cost of $65,686,632 and market value of $81,209,414. During the
year, the Plan purchased $34,577,001 and sold $29,640,984 of such assets. Fees
paid by the Plan for the investment management services amounted to
approximately $47,000 for the year ended December 31, 1998.
13
RALCORP HOLDINGS, INC.
SAVINGS INVESTMENTS PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 6: 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 7: PLAN TRANSFERS
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 approximately $8.4
million as of December 31, 1998. The transfer of Beech-Nut participant balances
from all funds except the Ralcorp Stock Fund was completed on January 31, 1999
and totaled approximately $6.1 million. Beech-Nut participant balances in the
Ralcorp Stock Fund as of January 31, 1999 will remain in the Plan until August
31, 1999, when they will be transferred to the Milnot plan for those individuals
who remain employed by Milnot on that date.
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 these assets, approximately $6.7 million, were transferred to
the U.S. Government Money Market Fund.
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 with Fund Information 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, which is reported in the financial statements as an interfund transfer,
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. No contributions or transfers to the fund are permitted by
the Plan.
14
RALCORP HOLDINGS, INC.
SAVINGS INVESTMENTS PLAN
NOTES TO FINANCIAL STATEMENTS
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. Distributions
reported in 1998 include any distributions requested under this provision.
The account balances of certain Plan participants who were employed by the
Company's all-season resort subsidiary, Ralston Resorts, were transferred to the
Ralston Resorts Savings Investment Plan (Resorts SIP). Prior to this transfer,
sponsorship of the Resorts SIP had been transferred to Vail Resorts, Inc., which
had acquired Ralston Resorts on January 3, 1997. The amount of such transfers
is reflected on the Statement of Changes in Net Assets Available for Benefits
with Fund Information for the year ended December 31, 1997.
15
REPORT OF INDEPENDENT ACCOUNTANTS
June 11, 1999
To the Participants and the
Plan Administrator of the
Ralcorp Holdings, Inc.
Savings 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 Ralcorp Holdings, Inc. Savings Investment Plan (the "Plan") at December
31, 1998 and 1997, and the changes in net assets available for benefits for the
years then ended in conformity with generally accepted accounting principles.
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
generally accepted auditing standards 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 additional information included in
the supplemental schedules 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. The fund information in the statements of net assets
available for benefits and the statement of changes in net assets available for
benefits is presented for purposes of additional analysis rather than to present
the net assets available for plan benefits and changes in net assets available
for benefits of each fund. These supplemental schedules and fund information
are the responsibility of the Plan's management. The supplemental schedules and
fund information have been subjected to the auditing procedures applied in the
audits of the basic financial statements 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
- --------------------------------
16
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 _______________________________________
D. J. Sescleifer, Chairman
Ralcorp Holdings, Inc.
Employee Benefit Trustees Committee
June 29, 1999
17