UNITED STATES
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
[ ] Transition Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1997
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 Stock Bonus Savings 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
<PAGE>
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 Stock Bonus Savings Plan is subject to the Employee
Retirement Income Security Act of 1974 (ERISA), and the report of
Washington, Pittman & McKeever LLC, 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 LLC.
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 Stock Bonus Savings Plan
(Name of Plan)
/s/ DENNIS CORRY
(Dennis Corry)
Director - Employee Benefits
/s/ KATHLEEN KEARNEY
(Kathleen Kearney)
Manager - Benefit Plans
/s/ ANNE TUMMINARO
(Anne Tumminaro)
Manager - Employee and Management Services
Date: June 25, 1998
<Page 2>
Exhibit Index
Exhibit Paper (P) or
Number Description Electronic (E)
(a) The Quaker Stock Bonus E
Savings Plan Financial
Statements as of
December 31, 1997 and 1996
(b) Consent of Independent E
Public Accountants
<Page 3>
Exhibit (a)
THE QUAKER OATS COMPANY
THE QUAKER STOCK BONUS SAVINGS PLAN
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1997 AND 1996
TOGETHER WITH INDEPENDENT AUDITOR'S REPORT
<Page 4>
THE QUAKER OATS COMPANY
THE QUAKER STOCK BONUS SAVINGS PLAN
AS OF DECEMBER 31, 1997 AND 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
SCHEDULE OF REPORTABLE TRANSACTIONS 18
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS 19
<Page 5>
INDEPENDENT AUDITOR'S REPORT
To the Plan Committee of
THE QUAKER STOCK BONUS SAVINGS PLAN
of The Quaker Oats Company
We have audited the accompanying Statements of Net Assets Available for
Benefits of The Quaker Stock Bonus Savings Plan (Plan) as of December 31, 1997
and 1996, and the related Statements of Changes in Net Assets Available for
Benefits for the year ended December 31, 1997 and the six months ended December
31, 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, 1997 and 1996, and the changes in net assets available for
benefits for the year ended December 31, 1997 and the six months ended December
31, 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 LLC
Chicago, Illinois
June 19, 1998
<Page 6>
<TABLE>
THE QUAKER OATS COMPANY
THE QUAKER STOCK BONUS SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1997
(dollars in thousands)
<CAPTION>
Union Non-Union Union
(Non-ESOP) (ESOP) (Non-Sch. E) Non-
Stock Bonus Stock Bonus PAYSOP Schedule E Schedule E
Quaker Quaker Quaker Money Money
ASSETS Total Stock Fund Stock Fund Stock Fund Market Fund Market Fund
<S> <C> <C> <C> <C> <C> <C>
The Quaker Oats Company Common Stock, at
market (1,908,412 shares, cost $57,144) $100,669 $ 11,734 $ 88,020 $ 915 $ -- $ --
Collective Short-Term Investment Fund 1,464 50 85 1 188 1,140
Total investments 102,133 11,784 88,105 916 188 1,140
Contributions receivable - Employee 417 47 349 -- 2 19
Contributions receivable - Employer 205 28 177 -- -- --
Dividends and interest receivable 552 64 477 5 1 5
Total assets 103,307 11,923 89,108 921 191 1,164
LIABILITY
Interfund (receivable) payable -- (8) 23 -- (5) (10)
Total liabilities -- (8) 23 -- (5) (10)
NET ASSETS AVAILABLE FOR BENEFITS $103,307 $ 11,931 $ 89,085 $ 921 $ 196 $ 1,174
See accompanying notes to financial statements.
<Page 7>
THE QUAKER OATS COMPANY
THE QUAKER STOCK BONUS SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1996
(dollars in thousands)
<CAPTION>
Union Non-Union Union
(Non-ESOP) (ESOP) (Non-Sch. E) Non-
Stock Bonus Stock Bonus PAYSOP Schedule E Schedule E
Quaker Quaker Quaker Money Money
ASSETS Total Stock Fund Stock Fund Stock Fund Market Fund Market Fund
<S> <C> <C> <C> <C> <C> <C>
The Quaker Oats Company Common Stock, at
market (1,815,232 shares, cost $51,743) $ 69,206 $ 7,848 $ 60,706 $ 652 $ -- $ --
Collective Short-Term Investment Fund 1,376 65 264 2 150 895
Total investments 70,582 7,913 60,970 654 150 895
Contributions receivable - Employee 185 20 157 -- 1 7
Contributions receivable - Employer 174 19 155 -- -- --
Dividends and interest receivable 521 59 452 5 1 4
Total assets 71,462 8,011 61,734 659 152 906
LIABILITIES
Payable for Quaker stock purchased 179 15 164 -- -- --
Interfund payable (receivable) -- 1 (3) -- (1) 3
Total liabilities 179 16 161 -- (1) 3
NET ASSETS AVAILABLE FOR BENEFITS $ 71,283 $ 7,995 $ 61,573 $ 659 $ 153 $ 903
See accompanying notes to financial statements.
<Page 8>
THE QUAKER OATS COMPANY
THE QUAKER STOCK BONUS SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997
(dollars in thousands)
<CAPTION>
Union Non-Union Union
(Non-ESOP) (ESOP) (Non-Sch.E) Non- Schedule E
Stock Bonus Stock Bonus PAYSOP Schedule E Money
Quaker Quaker Quaker Money Market
ADDITIONS Total Stock Fund Stock Fund Stock Fund Market Fund Fund
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends $ 2,139 $ 248 $ 1,871 $ 20 $ -- $ --
Interest 83 4 13 -- 9 57
Total investment income 2,222 252 1,884 20 9 57
Realized gain on The Quaker Oats Company
Common Stock - (Note 5) 1,334 153 1,177 4 -- --
Unrealized gain on The Quaker Oats Company
Common Stock - (Note 6) 26,062 3,042 22,772 248 -- --
Employee contributions 7,544 791 6,382 -- 42 329
Employer contributions 2,192 275 1,917 -- -- --
Contributions from other plans 44 -- 36 -- -- 8
Total additions 39,398 4,513 34,168 272 51 394
DEDUCTIONS
Distributions to participants 5,530 583 4,783 8 15 141
Dividends to participants 1,844 -- 1,844 -- -- --
Total deductions 7,374 583 6,627 8 15 141
Increase in net assets 32,024 3,930 27,541 264 36 253
Net assets available for benefits,
beginning of period 71,283 7,995 61,573 659 153 903
Interfund transfers, net -- 6 (29) (2) 7 18
NET ASSETS AVAILABLE FOR BENEFITS,
END OF PERIOD $103,307 $11,931 $ 89,085 $ 921 $ 196 $1,174
See accompanying notes to financial statements.
<Page 9)
THE QUAKER OATS COMPANY
THE QUAKER STOCK BONUS SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1996
(dollars in thousands)
<CAPTION>
Union Non-Union Union
(Non-ESOP) (ESOP) (Non-Sch. E) Non- Schedule E
Stock Bonus Stock Bonus PAYSOP Schedule E Money
Quaker Quaker Quaker Money Market
ADDITIONS Total Stock Fund Stock Fund Stock Fund Market Fund Fund
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends $ 1,029 $ 115 $ 904 $ 10 $ -- $ --
Interest 35 2 7 -- 4 22
Total investment income 1,064 117 911 10 4 22
Realized gain on The Quaker Oats Company
Common Stock - (Note 5) 1,009 9 994 6 -- --
Unrealized gain (loss) on The Quaker Oats Company
Common Stock - (Note 6) 6,765 676 6,101 (12) -- --
Employee contributions 3,378 378 2,846 -- 19 135
Employer contributions 1,008 123 885 -- -- --
Contributions from other plans 6 -- 4 -- 2 --
Total additions 13,230 1,303 11,741 4 25 157
DEDUCTIONS
Distributions to participants 6,234 157 5,964 15 3 95
Dividends to participants 912 -- 912 -- -- --
Total deductions 7,146 157 6,876 15 3 95
Increase (decrease) in net assets 6,084 1,146 4,865 (11) 22 62
Net assets available for benefits,
beginning of period 65,199 7,955 55,494 780 170 800
Interfund transfers, net -- (1,106) 1,214 (110) (39) 41
NET ASSETS AVAILABLE FOR BENEFITS,
END OF PERIOD $ 71,283 $ 7,995 $ 61,573 $ 659 $ 153 $ 903
See accompanying notes to financial statements.
<Page 10>
</TABLE>
THE QUAKER OATS COMPANY
THE QUAKER STOCK BONUS SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1997 AND 1996
NOTE 1 - THE QUAKER STOCK BONUS SAVINGS PLAN
The following brief description of The Quaker Stock Bonus Savings Plan (Plan)
provides only general information. The Plan document should be referred to for
the complete Plan provisions.
General
The Plan was adopted by The Quaker Oats Company (Company) and provides a
program under which eligible employees may acquire an ownership interest in the
Company and 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 year ended December 31, 1997 and 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 trustee, The Northern Trust Company (Northern Trust), is
responsible for the management and control of the Plan's assets and has certain
discretionary authority and control over such assets. Hewitt Associates is the
Plan's record keeper during the years reported herein. The Company pays all
expenses incurred by the Plan.
Eligibility
Under the current terms of the Plan, designated employees of the Company are
eligible to participate in the Plan on the first day of the month following the
date on which they complete one year of service.
Participants' Accounts
Participants in the Plan may invest in the Quaker Stock Fund or the Money
Market Fund.
The Quaker Stock Fund invests in common stock of the Company. Effective
June 1, 1994, a portion of the Plan was designated as an Employee Stock
Ownership Plan (ESOP), within the meaning of Section 4975(e)(7) of the
Internal Revenue Code. An ESOP account is maintained for each participant
included in a group listed on Schedule E of the Plan. Effective June 30,
1994, the Quaker Stock Sharing Plan (PAYSOP) was merged into the Plan
and the net assets of the PAYSOP were transferred into the Plan. Such assets
transferred into the Plan were separately maintained as PAYSOP accounts
<Page 11>
THE QUAKER OATS COMPANY
THE QUAKER STOCK BONUS SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1997 AND 1996
NOTE 1 - THE QUAKER STOCK BONUS SAVINGS PLAN (Continued)
until June 30, 1995, at which time the PAYSOP accounts were merged into the
ESOP accounts. Those participants who did not have ESOP accounts had their
PAYSOP accounts converted into special ESOP subaccounts. A non-ESOP account is
maintained for each participant, consisting of the portion of the participant's
account that is not included in an ESOP or PAYSOP account.
The Money Market Fund invests in short-term fixed-income securities.
Contributions
The Plan allows participants to contribute 1 percent to 15 percent of their
earnings, depending upon their location, in whole percentage increments, to the
Plan before federal and most state withholding taxes are computed.
Participants have the option to change their investment election once a month.
Participants may elect to invest their contributions in either the Quaker Stock
Fund or the Money Market Fund. The Company contributes an additional 50
percent of a participant's contributions to the Quaker Stock Fund to a maximum
of 4 percent of a participant's eligible earnings. Once a year, participants
have the option to transfer all or a portion of their monies they have
accumulated in the Money Market Fund to the Quaker Stock Fund in multiples of
25 percent. Once a year, participants who are at least age 59 1/2 or who
become totally and permanently disabled may transfer funds, in multiples of 25
percent, between the two funds.
The Plan provides for discretionary cash contributions by the Company.
Participants may contribute to the Plan any portion of distributions received
from other qualified plans when the contributions qualify as a tax-free
rollover.
Participants may elect to deposit excess funds from The Quaker Flex Plan to the
Plan. The Company does not provide additional contributions on these funds.
Generally, all contributions are not subject to federal income taxes until
distributed to the participant or the participant's beneficiary.
Distributions
All dividends received with respect to Company stock held on the record date a)
in a participant's ESOP account, and b) in a participant's PAYSOP account, if
the participant's group is listed on Schedule E of the Plan, are distributed to
participants no later than 90 days after the end of the Plan year in which the
dividends are received.
A participant may elect in writing to receive distribution of all or a
portion of his account if he is at least age 59 1/2 or if he is
totally and permanently disabled as determined by the Company with the
<Page 12>
THE QUAKER OATS COMPANY
THE QUAKER STOCK BONUS SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1997 AND 1996
NOTE 1 - THE QUAKER STOCK BONUS SAVINGS PLAN (Continued)
advice of a medical doctor. Additionally, a participant may receive the
portion of his account consisting of participant contributions (and, for those
not listed on Schedule E, excluding any amounts that have been invested in the
Quaker Stock Fund for less than two full Plan years after the year in which
they were invested) in the event of a hardship. Hardship withdrawals occur
when funds are required for purchasing or making capital expenditures for a
primary residence, financing the post-secondary education of a participant or
the participant's family, or alleviating an immediate and substantial financial
hardship.
Effective June 1, 1994, a participant may elect to withdraw a portion of his
ESOP or PAYSOP account if the participant: a) is an employee; b) has completed
at least 10 years of service since becoming a participant in the ESOP
(including years of participation in the PAYSOP prior to June 30, 1994); and c)
is at least age 55. Generally, the annual maximum amount subject to this
election is 25 percent of the participant's account balance, reduced by any
amounts previously distributed under this provision.
If a participant's employment with the Company is terminated, the Plan will
distribute the account balance to the participant or the participant's
beneficiary. A participant may 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; or b) 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 Internal Revenue Service regulations. If
the distribution is made through installment payments, a 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 did not apply to accounts under $3,500 at the end of the six-month
transition period ended December 31, 1996.
Plan Terminations
The Plan may be terminated at any time by action of the Company's Board of
Directors or Executive Committee of the Board. In the event of the Plan
termination, the value of the accounts determined as of the effective date of
such termination shall be held for the benefit of participants, former
participants or their beneficiaries.
<Page 13>
THE QUAKER OATS COMPANY
THE QUAKER STOCK BONUS SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1997 AND 1996
NOTE 2 - PLAN CHANGES SUBSEQUENT TO FISCAL YEAR END
Management Change
The Plan's administrative committee appointed The Fidelity Management Trust
Company (FMTC) as the new trustee and The Fidelity Institutional Retirement
Services Company as the new record keeper for the Plan, effective June 1, 1998.
The investment funds, previously managed by Northern Trust, will be managed by
FMTC. On June 1, 1998, the assets of the Plan were transferred from Northern
Trust to FMTC.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
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.
The accompanying financial statements have been prepared on the accrual basis
of accounting. Interest income is recorded as earned and dividend income is
recorded as of the record date.
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 investments at
the beginning of the Plan year.
Security purchases and sales, 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.
<Page 14>
THE QUAKER OATS COMPANY
THE QUAKER STOCK BONUS SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1997 AND 1996
(dollars in thousands)
NOTE 4 - FEDERAL INCOME TAXES
The Plan obtained its latest determination letter on August 20, 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.
The Plan administrator believes that the Plan was qualified and the related
trust was tax exempt as of December 31, l997 and 1996.
NOTE 5 - REALIZED GAIN ON INVESTMENTS
The realized gain on Quaker Common Stock was as follows:
<TABLE>
<CAPTION>
Year Ended Six Months Ended
December 31, 1997 December 31, 1996
<S> <C> <C>
Proceeds from the sale/distribution of Quaker stock $ 4,075 $ 5,093
Less: Cost of investments sold/distributed 2,741 4,084
REALIZED GAIN ON INVESTMENTS $ 1,334 $ 1,009
NOTE 6 - UNREALIZED GAIN ON INVESTMENTS
The unrealized gain on Quaker Common Stock was as follows:
<CAPTION>
Year Ended Six Months Ended
December 31, 1997 December 31, 1996
<S> <C> <C>
Unrealized gain, beginning of period $ 17,463 $ 10,698
Unrealized gain during the period 26,062 6,765
UNREALIZED GAIN, END OF PERIOD $ 43,525 $ 17,463
</TABLE>
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 the 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.
<Page 15>
THE QUAKER OATS COMPANY
THE QUAKER STOCK BONUS SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1997 AND 1996
(dollars in thousands)
NOTE 7 - CURRENT VALUE GAIN (Continued)
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:
Year Ended Six Months Ended
December 31, 1997 December 31, 1996
Net realized gain on investments $ 482 $ 202
Net unrealized gain on investments 26,914 7,572
NET GAIN IN FAIR VALUE OF INVESTMENTS $ 27,396 $ 7,774
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:
<TABLE>
<CAPTION>
As of As of
December 31, 1997 December 31, 1996
<S> <C> <C>
Net assets available for benefits per the Form 5500 $ 103,306 $ 71,126
Add: Distributions payable to participants 1 157
NET ASSETS AVAILABLE FOR BENEFITS PER THE
FINANCIAL STATEMENTS $ 103,307 $ 71,283
The following is a reconciliation of benefits paid to participants per the Form
5500 to the financial statements:
<CAPTION>
Year Ended Six Months Ended
December 31, 1997 December 31, 1996
<S> <C> <C>
Distributions to participants per the Form 5500 $ 5,374 $ 5,120
Add: Distributions payable, beginning of period 157 1,271
Less: Distributions payable, end of period 1 157
DISTRIBUTIONS TO PARTICIPANTS PER THE
FINANCIAL STATEMENTS $ 5,530 $ 6,234
</TABLE>
<Page 16>
THE QUAKER OATS COMPANY
THE QUAKER STOCK BONUS SAVINGS PLAN
FORM 5500 ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1997
(dollars in thousands)
Number of Market
Description Shares Cost Value
The Quaker Oats Company Common Stock * 1,908,412 $57,144 $100,669
Collective Short-Term Investment Fund 1,464 1,464
Total Investments $58,608 $102,133
* Identifies a party-in-interest to the Plan.
<Page 17>
<TABLE>
THE QUAKER OATS COMPANY
THE QUAKER STOCK BONUS SAVINGS PLAN
FORM 5500 ITEM 27D - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(dollars in thousands, except average price data)
<CAPTION>
Average Purchase Transaction Cost of Current Value on Net
and Sale Price Fees Asset Transaction Date Gain
<S> <C> <C> <C> <C> <C>
Description
The Quaker Oats Company Common Stock
187,180 shares purchased in 91 transactions $ 43.45 $ 9 $ 8,142 $ 8,142 --
70,928 shares sold in 31 transactions $ 44.14 $ 4 $ 2,073 $ 3,131 $ 1,054
</TABLE>
<Page 18>
Exhibit (b)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated June 19, 1998 (and all references to our Firm) included in or made a part
of the Form 11-K. It should be noted that we have not audited any financial
statements of The Quaker Stock Bonus Savings Plan subsequent to December 31,
1997 or performed any audit procedures subsequent to the date of our report.
WASHINGTON, PITTMAN & McKEEVER LLC
Chicago, Illinois
June 19, 1998
<Page 19>
