<PAGE> 1
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 (NO FEE REQUIRED)
For the transition period from _______ to _______
Commission File Number: 001-13537
----------
INTERNATIONAL HOME FOODS 401(k) SAVINGS PLAN
(Full title of the plan)
INTERNATIONAL HOME FOODS, INC.
(Exact name of issuer as specified in its charter)
1633 LITTLETON ROAD, PARSIPPANY, N.J. 07054
(Address of principal executive offices) (Zip code)
DELAWARE 13-3377322
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
<PAGE> 2
INTERNATIONAL HOME FOODS 401(k) SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
<TABLE>
<CAPTION>
PAGE(S)
-------
<S> <C>
Report of Independent Accountants 2
Financial Statements:
Statement of Net Assets Available for Plan Benefits with
Fund Information, at December 31, 1998 3
Statement of Net Assets Available for Plan Benefits with
Fund Information, at December 31, 1997 4
Statement of Changes in Net Assets Available for Plan Benefits with
Fund Information, for the year ended December 31, 1998 5
Notes to Financial Statements 6-11
Supplemental Schedules:
* Line 27a - Schedule of Assets Held for Investment Purposes,
At December 31, 1998 12
* Line 27d - Schedule of Reportable Transactions, for the year
Ended December 31, 1998 13
Signature 14
</TABLE>
* Refers to Line item in Form 5500 (Annual Return/Report of Employee Benefit
Plans) filed with the Department of Labor for the Plan year ended December
31, 1998
1
<PAGE> 3
REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrators of
International Home Foods 401(k) Savings Plan:
In our opinion, the accompanying statements of net assets available for plan
benefits and the related statements of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
plan benefits of International Home Foods 401(k) Savings Plan (the "Plan") at
December 31, 1998 and 1997 and the changes in net assets available for plan
benefits for the year ended December 31, 1998, 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 supplemental schedules of assets held
for investment purposes at December 31, 1998 and reportable transactions for the
year then ended 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. The fund information in the statements of net assets available for plan
benefits and the statement of changes in net assets available for plan 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 plan
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.
PricewaterhouseCoopers LLP
New York, New York
June 23, 1999
2
<PAGE> 4
INTERNATIONAL HOME FOODS 401(k) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
At December 31, 1998
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
-------------------------------------------------------------------------------
SCHWAB COLUMBIA DAVIS NEW YORK
RETIREMENT FIXED-INCOME DODGE & COX SAFECO VENTURE FUND
MONEY FUND SECURITIES FUND BALANCED FUND EQUITY FUND CLASS A
------------- --------------- ------------- ----------- --------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value:
Shares of registered investment companies:
Schwab Retirement Money Fund $ 10,883,230
Columbia Fixed-Income Securities Fund $ 1,453,916
Dodge & Cox Balanced Fund $ 12,364,522
Safeco Equity Fund $ 8,777,691
Davis New York Venture Fund Class A $ 9,129,811
Baron Asset Fund
GAM International Fund
IHF Stock Fund
International Home Foods Loan Pool
------------- ------------- ------------- ------------ --------------
Total investments 10,883,230 1,453,916 12,364,522 8,777,691 9,129,811
------------- ------------- ------------- ------------ --------------
Receivables:
Participant contributions
Employer contributions
------------- ------------- ------------- ------------ --------------
Total receivables -- -- -- -- --
------------- ------------- ------------- ------------ --------------
Net assets available for plan benefits $ 10,883,230 $ 1,453,916 $ 12,364,522 $ 8,777,691 $ 9,129,811
============= ============= ============= ============ ==============
<CAPTION>
PARTICIPANT DIRECTED
----------------------------------------
GAM IHF INTERNATIONAL
BARON ASSET INTERNATIONAL STOCK HOME FOODS
FUND FUND FUND LOAN POOL OTHER TOTAL
------------ ------------ ---------- ------------- ------ ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value:
Shares of registered investment companies:
Schwab Retirement Money Fund $ 10,883,230
Columbia Fixed-Income Securities Fund 1,453,916
Dodge & Cox Balanced Fund 12,364,522
Safeco Equity Fund 8,777,691
Davis New York Venture Fund Class A 9,129,811
Baron Asset Fund $ 2,772,079 2,772,079
GAM International Fund $ 1,036,525 1,036,525
IHF Stock Fund $ 471,395 471,395
International Home Foods Loan Pool $ 1,362,193 1,362,193
------------ ----------- ---------- ------------ -------- ------------
Total investments 2,772,079 1,036,525 471,395 1,362,193 -- 48,251,362
------------ ----------- ---------- ------------ -------- ------------
Receivables:
Participant contributions 109,246 109,246
Employer contributions 33,197 33,197
------------ ----------- ---------- ------------ -------- ------------
Total receivables -- -- -- -- 142,443 142,443
------------ ----------- ---------- ------------ -------- ------------
Net assets available for plan benefits $ 2,772,079 $ 1,036,525 $ 471,395 $ 1,362,193 $142,443 $ 48,393,805
============ =========== ========== ============ ======== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 5
INTERNATIONAL HOME FOODS 401(k) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
At December 31, 1997
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
-----------------------------------------------------------------------------
SCHWAB COLUMBIA DAVIS NEW YORK
RETIREMENT FIXED-INCOME DODGE & COX SAFECO VENTURE FUND
MONEY FUND SECURITIES FUND BALANCED FUND EQUITY FUND CLASS A
----------- --------------- ------------- ----------- --------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value:
Shares of registered investment companies:
Schwab Retirement Money Fund $10,597,647
Columbia Fixed-Income Securities Fund $ 926,157
Dodge & Cox Balanced Fund $13,676,138
Safeco Equity Fund $ 4,932,991
Davis New York Venture Fund Class A $ 7,018,184
Heartland Value Fund
Templeton Foreign Fund
International Home Foods Loan Plan
----------- ----------- ----------- ----------- -----------
Total investments 10,597,647 926,157 13,676,138 4,932,991 7,018,184
----------- ----------- ----------- ----------- -----------
Receivables:
Participant contributions
Employer contributions
----------- ----------- ----------- ----------- -----------
Total receivables -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Net assets available for plan benefits $10,597,647 $ 926,157 $13,676,138 $ 4,932,991 $ 7,018,184
=========== =========== =========== =========== ===========
<CAPTION>
PARTICIPANT DIRECTED
--------------------------
INTERNATIONAL
HEARTLAND TEMPLETON HOME FOODS
VALUE FUND FOREIGN FUND LOAN POOL OTHER TOTAL
----------- ------------ ------------- --------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value:
Shares of registered investment companies:
Schwab Retirement Money Fund $ 10,597,647
Columbia Fixed-Income Securities Fund 926,157
Dodge & Cox Balanced Fund 13,676,138
Safeco Equity Fund 4,932,991
Davis New York Venture Fund Class A 7,018,184
Heartland Value Fund $ 1,861,025 1,861,025
Templeton Foreign Fund $ 981,523 981,523
International Home Foods Loan Plan $ 1,274,597 1,274,597
----------- ----------- ----------- --------- ------------
Total investments 1,861,025 981,523 1,274,597 -- 41,268,262
----------- ----------- ----------- --------- ------------
Receivables:
Participant contributions 82,801 82,801
Employer contributions 46,428 46,428
----------- ----------- ----------- --------- ------------
Total receivables -- -- -- 129,229 129,229
----------- ----------- ----------- --------- ------------
Net assets available for plan benefits $ 1,861,025 $ 981,523 $ 1,274,597 $ 129,229 $ 41,397,491
=========== =========== =========== ========= ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 6
INTERNATIONAL HOME FOODS 401(k) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND
INFORMATION
For the year ended December 31, 1998
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
----------------------------------------------------------------------------
SCHWAB COLUMBIA DAVIS NEW YORK
RETIREMENT FIXED-INCOME DODGE & COX SAFECO VENTURE FUND
MONEY FUND SECURITIES FUND BALANCED FUND EQUITY FUND CLASS A
------------ --------------- ------------- ------------ --------------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation) in
fair value in investments $ -- $ (4,374) $ (261,315) $ 1,002,401 $ 862,965
Dividends 437,359 72,290 1,084,645 405,580 205,295
Interest on loans allocated to
borrowers' accounts 21,294 2,680 29,989 16,083 16,962
------------ ------------ ------------ ------------ ------------
458,653 70,596 853,319 1,424,064 1,085,222
------------ ------------ ------------ ------------ ------------
Contributions:
Participant 522,413 155,433 936,608 955,125 1,045,962
Employer 168,892 30,001 224,266 219,571 263,673
------------ ------------ ------------ ------------ ------------
691,305 185,434 1,160,874 1,174,696 1,309,635
------------ ------------ ------------ ------------ ------------
Rollovers 7,474 27,473 91,316 395,680 227,646
Transfers from other plans 2,187,453 232,890 998,386 1,195,605 641,748
Loan Repayments 103,262 13,882 114,835 96,339 92,481
------------ ------------ ------------ ------------ ------------
Total additions 3,448,147 530,275 3,218,730 4,286,384 3,356,732
------------ ------------ ------------ ------------ ------------
Deductions:
Benefits paid to participants 2,266,090 273,623 2,677,312 1,076,520 1,756,097
Forfeitures (56,663) 2,110 15,747 8,428 13,814
Loans issued 247,767 31,073 181,191 102,762 122,923
Loan defaults -- -- -- -- --
Administrative expenses 21,829 2,966 29,545 15,591 16,780
------------ ------------ ------------ ------------ ------------
Total deductions 2,479,023 309,772 2,903,795 1,203,301 1,909,614
------------ ------------ ------------ ------------ ------------
Net increase prior to interfund transfers 969,124 220,503 314,935 3,083,083 1,447,118
Interfund transfers (683,541) 307,256 (1,626,551) 761,617 664,509
------------ ------------ ------------ ------------ ------------
Net increase 285,583 527,759 (1,311,616) 3,844,700 2,111,627
Net assets available for plan benefits:
Beginning of period 10,597,647 926,157 13,676,138 4,932,991 7,018,184
------------ ------------ ------------ ------------ ------------
End of year $ 10,883,230 $ 1,453,916 $ 12,364,522 $ 8,777,691 $ 9,129,811
============ ============ ============ ============ ============
<CAPTION>
PARTICIPANT DIRECTED
--------------------------------------------
GAM IHF INTERNATIONAL
BARON ASSET INTERNATIONAL STOCK HOME FOODS
FUND FUND FUND LOAN POOL OTHER TOTAL
------------ ------------- ------------- ------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation (depreciation) in
fair value in investments $ 98,164 $ (23,498) $ 19,828 $ -- $ -- $ 1,694,171
Dividends 2,965 17,024 -- -- -- 2,225,158
Interest on loans allocated to
borrowers' accounts 12,490 3,862 1,685 -- -- 105,045
------------ ------------ ------------ ------------ ------------ ------------
113,619 (2,612) 21,513 -- -- 4,024,374
------------ ------------ ------------ ------------ ------------ ------------
Contributions:
Participant 616,339 210,273 26,625 -- 26,445 4,495,223
Employer 148,790 55,768 7,281 -- (13,231) 1,105,011
------------ ------------ ------------ ------------ ------------ ------------
765,129 266,041 33,906 -- 13,214 5,600,234
------------ ------------ ------------ ------------ ------------ ------------
Rollovers 173,613 24,813 12,853 -- -- 960,868
Transfers from other plans 102,778 77,532 -- 127,146 -- 5,563,538
Loan Repayments 49,705 15,193 4,288 (489,985) -- --
------------ ------------ ------------ ------------ ------------ ------------
Total additions 1,204,844 380,967 72,560 (362,839) 13,214 16,149,014
------------ ------------ ------------ ------------ ------------ ------------
Deductions:
Benefits paid to participants 389,551 325,553 -- -- -- 8,764,746
Forfeitures 12,017 4,547 -- -- -- --
Loans issued 43,587 5,473 9,474 (744,250) -- --
Loan defaults -- -- -- 293,815 -- 293,815
Administrative expenses 4,808 2,471 149 -- -- 94,139
------------ ------------ ------------ ------------ ------------ ------------
Total deductions 449,963 338,044 9,623 (450,435) -- 9,152,700
------------ ------------ ------------ ------------ ------------ ------------
Net increase prior to interfund transfers 754,881 42,923 62,937 87,596 13,214 6,996,314
Interfund transfers 156,173 12,079 408,458 -- -- --
------------ ------------ ------------ ------------ ------------ ------------
Net increase 911,054 55,002 471,395 87,596 13,214 6,996,314
Net assets available for plan benefits:
Beginning of period 1,861,025 981,523 -- 1,274,597 129,229 41,397,491
------------ ------------ ------------ ------------ ------------ ------------
End of year $ 2,772,079 $ 1,036,525 $ 471,395 $ 1,362,193 $ 142,443 $ 48,393,805
============ ============ ============ ============ ============ ============
</TABLE>
The accompanying notes are in integral part of these financial statements.
5
<PAGE> 7
INTERNATIONAL HOME FOODS 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
1. PLAN DESCRIPTION:
The following description of the International Home Foods 401(k)
Savings Plan (the "Plan") provides only general information. A complete
description of the Plan, including eligibility requirements and vesting
provisions, is contained in the plan document, a copy of which can be
obtained from the Plan Administrator.
GENERAL
Effective November 1, 1996, American Home Products Corporation sold a
majority interest in its subsidiary, International Home Foods, Inc.
("IHF" or "the Company") and its subsidiaries. Concurrent with this
transaction, IHF became a separate entity and established the Plan. The
Plan is a defined contribution plan designed to provide eligible
employees with tax-advantaged, long-term savings for retirement and is
subject to the provisions of the Employee Retirement Security Act of
1974 ("ERISA").
Effective October 1, 1997, IHF acquired Creative Products, Inc. All of
the assets from the Creative Products 401(k) Savings Plan were
transferred into the Plan on December 15, 1998. Related activity prior
to the date of transfer is not included in the accompanying financial
statements. These transfers totaled $1,565,069 and are also included in
"Transfers from other plans" on the 1998 Statement of Changes in Net
Assets.
Effective January 1, 1998 and July 1, 1998, respectively, hourly
workers from the Milton, Pennsylvania and Fort Worth, Texas plants,
respectively, were added to the plan as participants. These
participants are not entitled to the Company contributions.
Effective September 8, 1998, IHF acquired the Libby's brand of retail
and international canned meat products ("Libby's") and their
participating employees were immediately added to the Plan. All of the
assets of those employees, which were part of Nestle's retirement
plans, were transferred into the Plan on December 18, 1998. Related
activity prior to the date of transfer is not included in the
accompanying financial statements. These transfers totaled $3,998,469
and are also included in "Transfers from other plans" on the 1998
Statement of Changes in Net Assets.
IHF completed other acquisitions during 1998, however, no additional
employees, other than those mentioned above, were added to the Plan in
1998.
VESTING
Participants are fully vested in their own contributions and rollover
accounts. Participants are 25 percent vested in employer contributions
after two years of service, and the percentage increases 25 percent
annually thereafter, so that employees vest in employer contributions
100 percent after five years.
6
<PAGE> 8
INTERNATIONAL HOME FOODS 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's
contribution and allocations of the Company's contribution and Plan
earnings and is charged with an allocation of administrative expenses,
exclusive of recordkeeping expenses. Allocations of administrative
expenses are based on participant earnings or account balances, as
defined in the Plan document. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's
vested account.
PARTICIPANT LOANS
A participant may borrow a minimum of $1,000; the maximum is the lesser
of 50% of the vested account balance or $50,000. The participant may
have three outstanding loans at any time.
Interest is charged on outstanding loan balances at the prime rate (as
quoted in the Wall Street Journal on the first day of each month) plus
1 percent. Interest rates on loans in 1998 ranged from 7.0% to 10.0%.
The loans are funded from the existing vested 401(k) account balances
on a pro rata basis from each of the existing accounts and investment
funds. The loans are generally repaid through mandatory payroll
deductions. The loan repayment period may not exceed five years unless
the loan is for the purchase of a primary residence, in which case, the
participant will have up to 15 years to repay. If the participant fails
to repay a loan within 90 days of termination, the outstanding loan
balance(s) is treated as a default and becomes taxable to the
participant.
CONTRIBUTIONS
Effective January 1, 1998, participants may contribute up to 22 percent
of annual compensation, as defined in the Plan, subject to limitations
imposed by the Internal Revenue Service. Company contributions to
eligible participant accounts equal 50 percent of the first 6 percent
of eligible compensation that an eligible participant contributes to
the Plan.
INVESTMENT OPTIONS
Upon achieving the eligibility requirements as set forth in the plan
document, a participant may direct contributions in any of the
following eight investment options:
SCHWAB RETIREMENT MONEY FUND --Seeks to provide a consistent rate of
return while preserving capital and minimizing risk.
COLUMBIA FIXED-INCOME SECURITIES FUND --Seeks total return consistent
with prudent investment management.
DODGE & COX BALANCED FUND --Seeks income, conservation of principal,
and long-term growth of principal and income.
7
<PAGE> 9
INTERNATIONAL HOME FOODS 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
SAFECO EQUITY FUND --Seeks capital appreciation by investing primarily
in equity securities of companies with earnings that are expected to
grow at an above-average rate.
DAVIS NEW YORK VENTURE FUND CLASS A --Seeks maximum capital growth.
BARON ASSET FUND --Seeks rapid capital growth by primarily investing in
small to medium-sized companies that are expected to demonstrate growth
in earnings and revenue.
GAM INTERNATIONAL FUND --Invests primarily in stocks and debt
securities of companies and governments outside the United States.
IHF STOCK FUND --Invests in common stock of International Home Foods,
Inc.
Effective May 27, 1998, the Company replaced the Heartland Value Fund
and the Templeton Foreign Fund ("the Old Funds") with the Baron Asset
Fund and the GAM International Fund (the "Replacement Funds"),
respectively. These Replacement Funds have the same investment strategy
as the Old Funds. The activity of the Replacement Funds has been
aggregated with the Old Funds they replaced.
FORFEITURES
Forfeitures from a participant's company matching account are used to
reduce company matching contributions in the plan year in which
forfeitures are determined to occur. Forfeitures in 1998 totaled
$56,663.
PAYMENT OF BENEFITS
Upon terminating employment with IHF, the participant will receive 100%
of his or her employee, prior employer and rollover account balances.
The participant will also receive employer contributions subject to the
vesting requirements noted in the "Vesting" section of this note.
The normal form of benefit is a lump sum payment. The participant may
voluntarily defer payment of 401(k) benefits beyond retirement, but may
not defer payment past the age of 70-1/2.
PLAN AMENDMENTS
Effective July 1, 1998, Article 12 of the Plan (provisions relating to
employer stock) was amended. The amendment allows for participant
investment in IHF stock. Other provisions of the amendment relate to
voting rights, fiduciary duties, and trustee notification. Effective
September 8, 1998 and October 1, 1998, respectively, the Company
amended the Plan to include employees from Libby's and Creative
Products, Inc., respectively (see Note 1-General).
8
<PAGE> 10
INTERNATIONAL HOME FOODS 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The financial statements of the Plan are prepared in accordance with
generally accepted accounting principles. The significant accounting
policies followed by the Plan are as follows:
METHOD OF ACCOUNTING
The accompanying financial statements are prepared on the accrual basis
of accounting.
VALUATION OF INVESTMENTS AND INCOME RECOGNITION
Investments are valued at fair value on the trade date as reported by
the respective fund managers. Dividends are recorded on the ex-dividend
date. Investments in the common stock of IHF are valued at readily
available common quoted market prices as of the valuation date.
The Plan presents in the statements of changes in net assets available
for benefits, the net appreciation (depreciation) in the fair value of
its investments, which consists of the realized gains or losses and the
unrealized appreciation (depreciation) on those investments.
ADMINISTRATIVE EXPENSES
Record-keeping and certain administrative expenses related to the plan
are borne by IHF. Effective in the second quarter of 1999, these
expenses will be shared by the plan participants. Investment and
transaction fees are incurred directly by the Plan.
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 disclosures of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenue
and expenses during the reporting period. Actual results could differ
from those estimates.
RISKS AND UNCERTAINTIES
The plan provides for various investment options in any combination of
stocks, bonds, fixed income securities, mutual funds, and other
investment securities. Investment securities are exposed to various
risks, such as interest rate, market and credit risks. 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 would materially affect participants' account balances and the
amounts reported in the statement of net assets available for benefits
and statement of changes in net assets available for benefits.
9
<PAGE> 11
INTERNATIONAL HOME FOODS 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
3. PLAN INVESTMENTS
Investments held by the Plan at December 31, 1998 and 1997 are
summarized in the following table:
<TABLE>
<CAPTION>
FAIR VALUE
-----------------------------
1998 1997
----------- -----------
<S> <C> <C>
Schwab Retirement Money Fund $10,883,230 * $10,597,647 *
Columbia Fixed-Income Securities Fund 1,453,916 926,157
Dodge & Cox Balanced Fund 12,364,522 * 13,676,138 *
Safeco Equity Fund 8,777,691 * 4,932,991 *
Davis New York Venture Fund Class A 9,129,811 * 7,018,184 *
Baron Asset Fund 2,772,079 * -
GAM International Fund 1,036,525 -
IHF Stock Fund 471,395 -
International Home Foods Loan Pool 1,362,193 1,274,597
Heartland Value Fund - 1,861,025
Templeton Foreign Fund - 981,523
----------- -----------
$48,251,362 $41,268,262
=========== ===========
</TABLE>
* Investment represents more than 5% of net assets available for
benefits.
4. TAX STATUS:
The U.S. Treasury Department, in a letter dated September 10, 1998,
advised the Plan's management that the amended Plan in 1998 constitutes
a qualified plan under Section 401(a) of the Internal Revenue Code
("IRC") and is, therefore, exempt from federal income taxes under
Section 501(a). The Plan has been amended since receiving the
determination letter. However, the Plan Administrator believes that the
plan is currently designed and being operated in compliance with the
applicable requirements of the IRC, and is, therefore, exempt from
federal income taxes at the financial statement date.
5. PLAN TERMINATION:
Although it has not expressed any intent to do so, IHF has the right
under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of
plan termination, participants will become 100 percent vested in their
accounts.
10
<PAGE> 12
INTERNATIONAL HOME FOODS 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
6. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits
per the financial statements to the Form 5500 (Annual Return/Report of
Employee Benefit Plans):
<TABLE>
<CAPTION>
AT
DECEMBER 31, 1998
-----------------
<S> <C>
Net assets available for plan benefits
Per the financial statements $ 48,393,805
Deduct: benefits payable at December 31, 1998 (12,029)
------------
Net assets available for benefits per the Form 5500 $ 48,381,776
============
</TABLE>
<TABLE>
<CAPTION>
AT
DECEMBER 31, 1997
-----------------
<S> <C>
Net assets available for plan benefits
Per the financial statements $ 41,397,491
Deduct: benefits payable at December 31, 1997 (144,151)
------------
Net assets available for benefits per the Form 5500 $ 41,253,340
============
</TABLE>
The following is a reconciliation of benefits paid to participants per
the financial statements to the Form 5500:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31, 1998
-----------------
<S> <C>
Benefits paid to participants per the
financial statements $ 8,764,746
Add: benefits payable at December 31, 1998 12,029
Deduct: benefits payable at December 31, 1997 (144,151)
------------
Benefits paid to participants per the Form 5500 $ 8,632,624
============
</TABLE>
11
<PAGE> 13
INTERNATIONAL HOME FOODS 401(k) SAVINGS PLAN
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
As of the year ended December 31, 1998
<TABLE>
<CAPTION>
IDENTITY OF ISSUE AND DESCRIPTION OF INVESTMENT COST FAIR VALUE
- ------------------------------------------------- ----------- -----------
<S> <C> <C>
Schwab Retirement Money Fund $10,883,230 $10,883,230
Columbia Fixed-Income Securities Fund 1,456,464 1,453,916
Dodge & Cox Balanced Fund 12,975,397 12,364,522
Safeco Equity Fund 7,734,179 8,777,691
Davis New York Venture Fund Class A 8,141,686 9,129,811
Baron Asset Fund 2,608,156 2,772,079
GAM International Fund 1,117,153 1,036,525
IHF Stock Fund 450,902 471,395
International Home Foods Loan Pool, 7.0% to 10.0% 0 1,362,193
----------- -----------
Total investments $45,367,167 $48,251,362
=========== ===========
</TABLE>
12
<PAGE> 14
INTERNATIONAL HOME FOODS 401(k) SAVINGS PLAN
LINE 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
For the year ended December 31, 1998
<TABLE>
<CAPTION>
DESCRIPTION PURCHASE SELLING CURRENT NET GAIN
NAME OF PARTY OF ASSET PRICE PRICE EXPENSES(1) COST VALUE OR (LOSS)
- ------------- ----------------------- ---------- -------- ----------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Baron Asset Fund $3,537,613 $3,537,613 $3,537,613
151 transactions
Baron Asset Fund $759,315 867,452 759,315 $(108,137)
121 transactions
Heartland Value Fund 837,149 837,149 837,149
121 transactions
Heartland Value Fund 2,816,154 2,901,719 2,816,154 (85,565)
47 transactions
Davis NY Venture Fund Class A 4,240,109 4,240,109 4,240,109
316 transactions
Davis NY Venture Fund Class A 2,781,714 2,674,456 2,781,714 107,258
252 transactions
Dodge & Cox Balanced Fund 4,327,658 4,327,658 4,327,658
305 transactions
Dodge & Cox Balanced Fund 5,149,010 5,216,131 5,149,010 (67,121)
313 transactions
Safeco Equity Fund 4,767,485 4,767,485 4,767,485
317 transactions
Safeco Equity Fund 1,823,539 1,636,285 1,823,539 187,254
230 transactions
Schwab Retirement Money Fund 5,288,816 5,288,816 5,288,816
314 transactions
Schwab Retirement Money Fund 4,955,882 4,955,882 4,955,882
252 transactions
</TABLE>
(1) No expenses are incurred with individual transactions
13
<PAGE> 15
SIGNATURE
FORM 11-K
INTERNATIONAL HOME FOODS 401(k) SAVINGS PLAN
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Treasurer has duly caused this annual report to be signed on
its behalf by the undersigned thereunto duly authorized.
/s/ Lynne Misericordia
-----------------------------------
Lynne Misericordia
Treasurer
14
<PAGE> 16
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
23 Consent of Independent Accountants
</TABLE>
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Forms S-8 (Nos. 333-43297, 333-62097 and 333-62099) of
International Home Foods Inc. of our report dated June 23, 1999 relating to the
financial statements and supplemental schedules of International Home Foods
401(k) Savings Plan, which appears in this Form 11-K.
PricewaterhouseCoopers LLP
New York, New York
June 25, 1999
