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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[ ] Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
[X] Transition Report Pursuant to Section 15(d) of the Securities Exchange Act
of 1934
For the transition period from July 1, 1996 to December 31, 1996
Commission file number 1-12
Full title of the Plan and the address of the Plan,
if different from that of the issuer named below:
The Quaker Investment Plan
Name of issuer of the securities held pursuant to the Plan and the address of
its principal executive office:
The Quaker Oats Company
P.O. Box 049001
Chicago, Illinois 60604-9001
Item 1. See Item 4.
Item 2. See Item 4.
Item 3. See Item 4.
Item 4. Financial Statements and Exhibits
(a) Financial Statements
The Quaker Investment Plan is subject to the Employee Retirement
Income Security Act of 1974 (ERISA), and the report of Washington,
Pittman & McKeever, independent public accountants, as prepared in
accordance with the financial reporting requirements of ERISA is
attached hereto and incorporated into this report.
(b) Exhibit
Consent of Independent Public Accountants - Washington, Pittman &
McKeever.
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the administrators of the Plan have duly caused this annual report to be signed
on their behalf by the undersigned hereunto duly authorized.
The Quaker Investment Plan
(Name of Plan)
DENNIS M. CORRY
(Dennis M. Corry)
Senior Manager - Benefit Plans
KATHLEEN KEARNEY
(Kathleen Kearney)
Manager - Benefit Plans
ANNE TUMMINARO
(Anne Tumminaro)
Manager - Employee and Management Services
Date: June 25, 1997
2
Exhibit Index
Exhibit Paper (P) or
Number Description Electronic (E)
(a) The Quaker Investment E
Plan Financial Statements
as of December 31, 1996 and
June 30, 1996
(b) Consent of Independent E
Public Accountants
3
Exhibit (a)
THE QUAKER OATS COMPANY
THE QUAKER INVESTMENT PLAN
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1996 AND JUNE 30, 1996
TOGETHER WITH INDEPENDENT AUDITOR'S REPORT
4
THE QUAKER OATS COMPANY
THE QUAKER INVESTMENT PLAN
AS OF DECEMBER 31, 1996 AND JUNE 30, 1996
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITOR'S REPORT 6
STATEMENTS OF NET ASSETS AVAILABLE FOR
BENEFITS 7-8
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS 9-10
NOTES TO FINANCIAL STATEMENTS 11-16
SCHEDULE OF ASSETS HELD FOR
INVESTMENT PURPOSES 17-18
SCHEDULE OF REPORTABLE TRANSACTIONS 19
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS 20
5
INDEPENDENT AUDITOR'S REPORT
To the Plan Committee of
THE QUAKER INVESTMENT PLAN
of The Quaker Oats Company
We have audited the accompanying Statements of Net Assets Available for
Benefits of The Quaker Investment Plan (Plan) as of December 31, 1996 and June
30, 1996, and the related Statements of Changes in Net Assets Available for
Benefits for the six months ended December 31, 1996 and the year ended June 30,
1996. 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 in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1996 and June 30, 1996, and the changes in net assets available
for benefits for the six months ended December 31, 1996 and the year ended June
30, 1996 in conformity with generally accepted accounting principles.
Our audits were made 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 of Reportable Transactions are presented for
the purpose of additional analysis and are not a required part of the basic
financial statements. These schedules contain 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
supplemental schedules 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.
WASHINGTON, PITTMAN & McKEEVER
Chicago, Illinois
June 12, 1997
6
<TABLE>
THE QUAKER OATS COMPANY
THE QUAKER INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1996
(dollars in thousands)
<CAPTION>
Quaker Money
Stock Diversified Market Bond Loan
Total Fund Fund Fund Fund Fund
ASSETS
<S> <C> <C> <C> <C> <C> <C>
Investments, at market -
The Quaker Oats Company common stock
(2,293,417 shares, cost $53,221) $ 87,433 $87,433 $ -- $ -- $ -- $ --
Marketable Securities (cost $122,190) 148,254 -- 131,124 -- 17,130 --
Short-Term Investments (cost $5,567) 5,589 -- 5,589 -- -- --
Collective Short-Term
Investment Fund 44,803 514 3,369 40,672 248 --
286,079 87,947 140,082 40,672 17,378 --
Participant loans 5,886 -- -- -- -- 5,886
Total investments 291,965 87,947 140,082 40,672 17,378 5,886
Employee contributions receivable 230 42 154 27 7 --
Accrued dividends and interest receivable 1,056 655 215 185 1 --
Interfund transfers receivable (payable) -- 1,013 (1,236) 322 (99) --
Total assets 293,251 89,657 139,215 41,206 17,287 5,886
LIABILITY
Payable for investments purchased 114 114 -- -- -- --
NET ASSETS AVAILABLE FOR BENEFITS $293,137 $89,543 $139,215 $41,206 $17,287 $5,886
See accompanying notes to financial statements.
7
THE QUAKER OATS COMPANY
THE QUAKER INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF JUNE 30, 1996
(dollars in thousands)
<CAPTION>
Quaker Money
Stock Diversified Market Bond Loan
Total Fund Fund Fund Fund Fund
ASSETS
<S> <C> <C> <C> <C> <C> <C>
Investments, at market -
The Quaker Oats Company common stock
(2,302,937 shares, cost $50,800) $ 78,008 $78,008 $ -- $ -- $ -- $ --
Marketable Securities (cost $116,087) 133,856 -- 116,061 -- 17,795 --
Short-Term Investments (cost $8,251) 8,275 -- 8,275 -- -- --
Collective Short-Term
Investment Fund 48,443 301 7,554 40,498 90 --
268,582 78,309 131,890 40,498 17,885 --
Participant loans 6,242 -- -- -- -- 6,242
Total investments 274,824 78,309 131,890 40,498 17,885 6,242
Employee contributions receivable 540 143 305 60 32 --
Accrued dividends and interest receivable 1,015 662 174 178 1 --
Receivable for investments sold 639 -- 639 -- -- --
Interfund transfers receivable (payable) -- 552 (748) 283 (87) --
Total assets 277,018 79,666 132,260 41,019 17,831 6,242
LIABILITY
Payable for investments purchased 299 -- 299 -- -- --
NET ASSETS AVAILABLE FOR BENEFITS $276,719 $79,666 $131,961 $41,019 $17,831 $6,242
See accompanying notes to financial statements.
8
THE QUAKER OATS COMPANY
THE QUAKER INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1996
(dollars in thousands)
<CAPTION>
Quaker Money
Stock Diversified Market Bond Loan
ADDITIONS Total Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends $ 2,468 $ 1,337 $ 1,131 $ -- $ -- $ --
Interest 1,641 119 397 1,106 19 --
Total investment income 4,109 1,456 1,528 1,106 19 --
Realized gain on investments - (Note 5) 12,006 3,023 8,360 -- 623 --
Unrealized gain on investments -
(Note 6) 15,297 7,004 7,813 -- 480 --
Employee contributions 5,009 1,606 2,540 531 332 --
Contributions from other plans 1,914 391 1,159 304 60 --
Total additions 38,335 13,480 21,400 1,941 1,514 --
DEDUCTIONS
Distributions to participants 21,917 4,705 9,968 5,808 1,436 --
Increase (decrease) in net assets 16,418 8,775 11,432 (3,867) 78 --
Net assets available for benefits,
beginning of period 276,719 79,666 131,961 41,019 17,831 6,242
Interfund transfers, net -- 1,102 (4,178) 4,054 (622) (356)
NET ASSETS AVAILABLE FOR BENEFITS,
END OF PERIOD $293,137 $89,543 $139,215 $41,206 $17,287 $5,886
See accompanying notes to financial statements.
9
THE QUAKER OATS COMPANY
THE QUAKER INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED JUNE 30, 1996
(dollars in thousands)
<CAPTION>
Quaker Money
Stock Diversified Market Bond Loan
ADDITIONS Total Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Dividends $ 5,001 $ 2,795 $ 2,206 $ -- $ -- $ --
Interest 3,811 256 811 2,693 51 --
Total investment income 8,812 3,051 3,017 2,693 51 --
Realized gain on investments - (Note 5) 31,414 8,832 21,880 -- 702 --
Unrealized (loss) gain on investments -
(Note 6) (6,010) (4,973) (1,153) -- 116 --
Employee contributions 10,469 3,831 4,659 1,253 726 --
Contributions from other plans 2,835 681 1,607 438 109 --
Total additions 47,520 11,422 30,010 4,384 1,704 --
DEDUCTIONS
Distributions to participants 41,865 13,091 13,107 13,903 1,764 --
Increase (decrease) in net assets 5,655 (1,669) 16,903 (9,519) (60) --
Net assets available for benefits,
beginning of period 271,064 90,852 102,101 55,223 14,996 7,892
Interfund transfers, net -- (9,517) 12,957 (4,685) 2,895 (1,650)
NET ASSETS AVAILABLE FOR BENEFITS,
END OF PERIOD $276,719 $79,666 $131,961 $41,019 $17,831 $6,242
See accompanying notes to financial statements.
</TABLE>
10
THE QUAKER OATS COMPANY
THE QUAKER INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1996 AND JUNE 30, 1996
NOTE 1 - THE QUAKER INVESTMENT PLAN
The following brief description of The Quaker Investment Plan (Plan) provides
only general information. The Plan document should be referred to for the
complete Plan provisions.
General
The Plan covers salaried domestic employees of The Quaker Oats Company
(Company) and certain domestic subsidiaries. The Plan is solely funded by
employee contributions. Under the Plan, eligible salaried employees may
accumulate funds on a pretax basis for long-term retirement savings. The Plan
is intended to qualify as a cash or deferred arrangement under Section 401(k)
of the Internal Revenue Code and is subject to the provisions of the Employee
Retirement Income Security Act of 1974.
This report discusses the six-month transition period ended December 31, 1996.
The Plan year end changed from a June 30 fiscal-year end to a fiscal year
aligned with the calendar year beginning January 1, 1997.
Overall responsibility for administering the Plan rests with the Plan's
administrative committee which is appointed by the Board of Directors of the
Company. The Plan's administrative committee has appointed Hewitt Associates
as the Plan's record keeper. The Plan's trustee, The Northern Trust Company,
is responsible for the management and control of the Plan's assets and has
certain discretionary authority and control over such assets. The Company
pays all expenses incurred by the Plan.
Eligibility
Effective July 1, 1994, the Plan was amended to allow salaried employees
participation in the Plan on the date of employment or, if employed less than
six months, effective July 1, 1994. Prior to this Plan amendment, salaried
employees were eligible to participate in the Plan after six months of
employment and acceptance as an approved employee, or after a twelve-month
period during which the employee had at least 998 hours of employment and was
still employed by the Company.
11
THE QUAKER OATS COMPANY
THE QUAKER INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1996 AND JUNE 30, 1996
NOTE 1 - THE QUAKER INVESTMENT PLAN (CONTINUED)
Contributions
Participants in the Plan are allowed to defer receipt of, and have placed in
the Plan, up to 7 percent of their earnings. Contributions are not subject to
Federal income tax until distributed to the participants or their
beneficiaries. Plan participants may invest in one or more of the Plan's four
funds: the Quaker Stock Fund, the Diversified Fund, the Bond Fund, or the Money
Market Fund. The Plan allows participants to transfer their accounts, in
multiples of 25 percent, among funds once a month. Participants may also
change the percent of their earnings contributed to the Plan once a month. The
Plan allows employees the option to deposit excess funds from The Quaker Flex
Plan to the Plan. The Plan also allows a participant to contribute to the Plan
a lump-sum distribution received from other qualified plans when the
contribution qualifies as a tax-free roll-over.
Distributions
Participants may elect in writing to receive all or a portion of their
accounts if they are at least age 59 1/2 years or if they are totally and
permanently disabled as determined by the Company with the advice of a medical
doctor. The participant's account will then be valued as of the latest
available valuation date before distribution. If only a portion of the account
is distributed, the remaining balance will continue to be adjusted for
contributions, net earnings, gains and losses as of each valuation date.
Participants may receive a distribution of a portion of their accounts in the
event of a hardship. Hardship means when funds are required for purchasing or
making capital expenditures for a primary residence, financing the post-
secondary education of the participant or the participant's family or
alleviating existing financial hardship.
If a participant's employment with the Company is terminated, the Plan will
distribute the participant's account balance to the participant or the
participant's beneficiary. A participant may elect to defer the lump-sum
distribution or the start of installment payments until age 70 1/2. If a
participant terminates employment, attains age 65 in a Plan year, and no
distribution or deferral election is received by the 15th day after the end of
the Plan year, an automatic lump-sum distribution will be made. A participant
may elect in writing to receive the distribution in one of the following ways:
(a) in a lump sum; (b) in a partial distribution; or (c) in approximately equal
annual installments over a chosen period. The period chosen, however, must be
no longer than the participant's life expectancy when distributions begin as
determined by the Internal Revenue Service regulations. If the distribution is
made through installment payments, the participant's remaining account balance
will continue to be adjusted for net earnings and gains and losses as of each
valuation date. If a participant's account value is $3,500 or less, an
automatic lump-sum distribution will be made as soon as practicable after the
end of the Plan year in which termination occurs. This provision does not
apply to accounts under $3,500 at the end of the transition period ending
December 31, 1996.
12
THE QUAKER OATS COMPANY
THE QUAKER INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1996 AND JUNE 30, 1996
NOTE 1 - THE QUAKER INVESTMENT PLAN (CONTINUED)
Loans
Plan participants may obtain loans from their account balances subject to the
following terms and restrictions which are effective for loan applications
received after September 15, 1989:
(a) Participants may borrow up to 50 percent of their account
balance including the highest loan balance in the previous one-year
period, but not more than $50,000 or less than $1,000.
(b) The terms of such loans shall not exceed five years and the rate
of interest to be applied will be the Northern Trust prime rate plus
1 percent.
(c) Repayments on the loan are to be made directly through payroll
deductions for active employees.
(d) Loans made to a participant shall be secured by the participant's non-
forfeitable interest from one or more of the funds in which a
participant's account is invested prior to the making of such loans.
Participants with an outstanding loan (for at least a year) may request an
additional loan. The additional loan will have a separate payment schedule
from the existing loan. Participants cannot exceed two outstanding loans.
Plan Termination
The Plan may be terminated at any time by the action of the Board of Directors
or Executive Committee of the Board. In the event of termination of the Plan,
the accounts shall be held for the benefit of the participants, former
participants or their beneficiaries.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The accompanying financial statements are prepared on the accrual basis of
accounting. Interest income is recorded as earned and dividend income is
recorded as of the record date.
The preparation of the financial statements in conformity with Generally
Accepted Accounting Principles (GAAP) requires the Plan's management to use
estimates and assumptions that affect the accompanying financial statements and
disclosures. Actual results could differ from these estimates and assumptions.
13
THE QUAKER OATS COMPANY
THE QUAKER INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1996 AND JUNE 30, 1996
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Investment Valuation
Investments are included in the accompanying Statements of Net Assets Available
for Benefits at fair market value. Fair market value is based on published
market prices.
Net realized and unrealized gains and losses for the period are reflected in
the accompanying Statement of Changes in Net Assets Available for Benefits.
The net realized gain or loss on the investments sold is calculated as the
difference between the proceeds received and the average cost of the
investments. The net realized gain or loss on the distribution of investments
is calculated as the difference between the fair market value on the date of
distribution and the average cost of the investments. The net unrealized gain
or loss is calculated as the difference between the fair market value of the
investments less the cost of the investments at the end of the Plan year and
the fair market value of the investments less the cost of the investment at the
beginning of the Plan year.
Purchases and sales of securities, including related gains and losses, are
recognized on the transaction trade date. Brokerage commissions increase the
cost or decrease the sale proceeds on the security transactions.
NOTE 3 - TRUST INVESTMENTS
Participants in the Plan may invest in the Quaker Stock Fund (common stock of
the Company), the Diversified Fund (primarily common and preferred stock of
corporations other than the Company and/or interest-bearing securities), the
Bond Fund (primarily corporate bonds with an average credit rating of "A" and
with maturities of up to 30 years), or the Money Market Fund (primarily short-
term fixed-income securities). The Trustee is authorized to keep such portion
of any of the Investment Funds as may seem advisable, from time to time, in
cash or cash equivalents and/or in short-term fixed-income investments.
The value of each unit in a participant's account as of December 31, 1996 and
June 30, 1996 for each of the four funds was as follows:
Unit Value
December 31 June 30
Quaker Stock Fund $ 28.26 $ 24.78
Diversified Fund $ 23.72 $ 20.73
Money Market Fund $ 7.24 $ 7.04
Bond Fund $ 2.50 $ 2.35
14
THE QUAKER OATS COMPANY
THE QUAKER INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1996 AND JUNE 30, 1996
(dollars in thousands)
NOTE 4 - FEDERAL INCOME TAXES
The Plan obtained its latest determination letter on May 22, 1996, in which the
Internal Revenue Service stated that the Plan, as then designed, was in
compliance with the applicable requirements of the Internal Revenue Code. The
Plan has been amended since receiving the determination letter. However, the
Plan administrator believes the Plan is currently designed and being operated
in compliance with the applicable requirements of the Internal Revenue Code.
Therefore, the Plan administrator believes that the Plan was qualified and the
related trust was tax-exempt as of December 31, 1996 and June 30, 1996.
NOTE 5 - REALIZED GAIN ON INVESTMENTS IN SECURITIES
The realized gain on investments in securities was as follows:
Six Months Ended Year Ended
December 31, 1996 June 30, 1996
Aggregate Aggregate
Cost of Cost of
Securities Realized Securities Realized
Sold/Distributed Gain Sold/Distributed Gain
Quaker Stock Fund $ 5,577 $ 3,023 $ 15,135 $ 8,832
Diversified Fund 111,775 8,360 163,233 21,880
Bond Fund 1,241 623 1,410 702
$118,593 $12,006 $179,778 $31,414
NOTE 6 - UNREALIZED GAIN (LOSS) ON INVESTMENTS IN SECURITIES
The unrealized gain (loss) on investments in securities was as follows:
Six Months Ended Year Ended
December 31, 1996 June 30, 1996
Unrealized gain, beginning of year $45,001 $ 51,011
Unrealized gain (loss) during the year 15,297 (6,010)
UNREALIZED GAIN, END OF YEAR $60,298 $ 45,001
15
THE QUAKER OATS COMPANY
THE QUAKER INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1996 AND JUNE 30, 1996
(dollars in thousands)
NOTE 7 - CURRENT VALUE GAIN
Based on the Current Value reporting requirements of the Department of Labor
and the Internal Revenue Service instructions for Form 5500, the net realized
gain on the investments sold is calculated as the difference between proceeds
received and the fair market value of investments on the first day of the Plan
year or the acquisition date if purchased during the Plan year. The net
realized gain on the distribution of investments is calculated as the
difference between fair market value of investments on the date of distribution
and the fair market value of investments on the first day of the Plan year.
The net unrealized gain is calculated as the difference between the fair market
value of investments at the end of the Plan year and the fair market value at
the beginning of the Plan year. The net realized gain and net unrealized gain
were as follows:
Six Months Ended Year Ended
December 31, 1996 June 30, 1996
Net realized gain on investments $ 3,893 $13,535
Net unrealized gain on investments 23,410 11,869
NET GAIN ON INVESTMENTS $27,303 $25,404
NOTE 8 - RECONCILIATION OF THE FORM 5500 TO THE FINANCIAL STATEMENTS
The following is a reconciliation of net assets available for benefits per the
Form 5500 to the financial statements:
As of As of
December 31, 1996 June 30, 1996
Net assets available for benefits per the
Form 5500 $291,393 $268,917
Add: Distributions payable to participants 1,744 7,802
NET ASSETS AVAILABLE FOR BENEFITS PER
THE FINANCIAL STATEMENTS $293,137 $276,719
The following is a reconciliation of benefits paid to participants per the Form
5500 to the financial statements:
Six Months Ended Year Ended
December 31, 1996 June 30,1996
Distributions to participants per the Form 5500 $15,859 $41,958
Add: Distributions payable, beginning of year 7,802 7,709
Less: Distributions payable, end of year 1,744 7,802
DISTRIBUTIONS TO PARTICIPANTS PER THE
FINANCIAL STATEMENTS $21,917 $41,865
16
THE QUAKER OATS COMPANY
THE QUAKER INVESTMENT PLAN
FORM 5500 ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1996
(dollars in thousands)
Schedule I
Page 1 of 2
Market
Description Number of Shares Cost Value
Company Stock
The Quaker Oats Company Common Stock * 2,293,417 $53,221 $87,433
Marketable Securities
Common Stocks -
ADR C.S. Hldg. Sponsored ADR 98,700 2,499 2,527
ADR Elf Aquitaine Sponsored 93,000 3,673 4,208
ADR Nokia Corp. Sponsored 38,800 1,491 2,236
ADR Novartis A.G. Sponsored 85,385 3,772 4,874
ADR Peninsular & Oriental Steam Nav Co. Sponsored 97,600 1,949 1,971
ADR Phillips Electronics N.V. 106,600 3,367 4,264
ADR Rhone Poulenc S.A. Sponsored 95,500 2,552 3,235
Aetna Inc. 20,950 1,366 1,676
Allegheny Teledyne Inc. 50,600 1,041 1,164
Allstate Corp. 66,218 2,056 3,832
American Home Products Corp. 60,400 3,106 3,541
Amoco Corp. 47,950 3,148 3,866
AMR Corp. 30,200 2,552 2,661
Banc One Corp. 71,500 2,712 3,075
Boeing Co. 38,850 3,334 4,138
Bristol Myers Squibb Co. 33,900 2,924 3,695
Burlington Northern Santa Fe Corp. 38,850 2,555 3,356
Citicorp 32,100 1,457 3,306
Dow Chemical Co. 47,650 3,722 3,734
Dun & Bradstreet Corp. 83,050 1,940 1,972
DuPont, E.I. DeNemours & Company 36,050 2,631 3,393
Federated Department Stores Inc. 87,500 2,363 2,986
General Instr. Corp. 41,000 949 892
General Motors Corp. 77,050 3,971 4,295
Grace, W.R. & Co. 41,500 2,020 2,148
Hasbro Inc. 42,200 1,498 1,640
Host Marriot Corp. 87,600 1,378 1,402
International Business Machines Corp. 24,350 2,522 3,689
ITT Inds. Inc. 60,800 3,419 2,637
Loews Corp. 30,950 2,425 2,917
Mattel Inc. 29,321 547 814
MCI Communications Corp. 103,000 3,266 3,367
* Identifies a party-in-interest to the Plan.
17
THE QUAKER OATS COMPANY
THE QUAKER INVESTMENT PLAN
FORM 5500 ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1996
(dollars in thousands)
Schedule I
Page 2 of 2
Market
Description Number of Shares Cost Value
Common Stocks (continued)
Motorola Inc. 42,350 2,136 2,594
Northrop Gruman Corp. 34,900 2,380 2,888
Nynex Corp. 81,300 3,639 3,913
Pacific Telesis Group 125,500 4,238 4,612
Raytheon Co. 59,450 2,855 2,861
Scripps Howard Inc. 55,200 1,780 1,932
Tenet Healthcare Corp. 89,100 1,712 1,949
Travelers Group Inc. 66,966 1,486 3,039
Union Pacific Corp. 70,750 3,181 4,254
Wal-Mart Stores, Inc. 144,500 3,623 3,287
Wells Fargo & Co. 13,900 3,410 3,750
WMX Technology Inc. 78,000 2,622 2,534
Corporate Bonds -
Quaker Master Trust - Wells Fargo Bonds 687,725 10,923 17,130
Total Marketable Securities 122,190 148,254
Short-Term Investments
Coca Cola Co.
Coupon, $700 due 1/10/97 700 698 699
Ford Motor Car Co.
Coupon, $2,800 due 1/07/97 2,800 2,782 2,798
Lucent Technologies, Inc.
Coupon, $2,100 due 1/29/97 2,100 2,087 2,092
Total Short-Term Investments 5,567 5,589
Collective Short-Term Investment Fund 44,803 44,803
Participant Loans (9.25%) 5,886 5,886
TOTAL INVESTMENTS $231,667 $291,965
18
THE QUAKER OATS COMPANY
THE QUAKER INVESTMENT PLAN
FORM 5500 ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1996
(dollars in thousands)
Schedule II
Purchase
and Transaction Cost of Current Net
Sale Price Fees Asset Value Gain
Description
Quaker Stock Fund -
The Quaker Oats Company
common stock
234,899 shares purchased
in 16 transactions $34.006 $10 $7,998 $7,998 --
194,720 shares sold
in 12 transactions $35.717 $10 $4,464 $6,965 $2,491
19
Exhibit (b)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated June 12, 1997 (and references to our Firm) included in or made a part of
this Form 11-K. It should be noted that we have not audited any financial
statements of The Quaker Investment Plan subsequent to December 31, 1996 or
performed any audit procedures subsequent to the date of our report.
WASHINGTON, PITTMAN & McKEEVER
Chicago, Illinois
June 20, 1997
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