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
For the Fiscal Year Ended December 31, 1997
Commission File Number 1-4582
RALSTON PURINA COMPANY
SAVINGS INVESTMENT PLAN
RALSTON PURINA COMPANY
CHECKERBOARD SQUARE
ST. LOUIS, MISSOURI 63164
<PAGE>
<TABLE>
<CAPTION>
RALSTON PURINA COMPANY SAVINGS INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
U.S.
ESOP Government
Preferred RAL Equity Fixed Money Participant
Stock Stock Index Income Market Loan Balanced
Fund Fund Fund Fund Fund Fund Fund
---------- -------- ------- ------- ------- ------------ -----------
ASSETS
INVESTMENTS, AT FAIR VALUE (Note 2)
Short-term investments $ 57 $ 1,528 $ - $ 1,561 $ - $ - $ -
Shares in registered
investment company 67,413 19,279 17,748 30,089
Common stock - RAL Stock 147,952
Preferred stock
Allocated 433,014
Unallocated 99,245
Notes receivable from participants 31,201
---------- -------- ------- ------- ------- ------------ -----------
TOTAL INVESTMENTS 532,316 149,480 67,413 20,840 17,748 31,201 30,089
INSURANCE COMPANY CONTRACTS, AT
CONTRACT VALUE (Note 2) 39,661
RECEIVABLES
Interest and dividends receivable 6
---------- -------- ------- ------- ------- ------------ -----------
TOTAL RECEIVABLES 6 - - - - - -
---------- -------- ------- ------- ------- ------------ ------------
TOTAL ASSETS 532,322 149,480 67,413 60,501 17,748 31,201 30,089
---------- -------- ------- ------- ------- ------------ -----------
LIABILITIES
Current maturities of notes payable 51,682
Accrued plan expenses - 31 5
---------- -------- ------- ------- ------- ------------ -----------
TOTAL LIABILITIES 51,682 31 - 5 - - -
---------- -------- ------- ------- ------- ------------ -----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 480,640 $149,449 $67,413 $60,496 $17,748 $ 31,201 $ 30,089
========== ======== ======= ======= ======= ============ ===========
<S> <C> <C> <C> <C>
Growth Inter-
Aggressive and national
Growth Income Growth
Fund Fund Fund Total
-------- --------- ------- --------
ASSETS
INVESTMENTS, AT FAIR VALUE (Note 2)
Short-term investments $ - $ - $ - $ 3,146
Shares in registered
investment company 10,247 32,269 14,578 191,623
Common stock - RAL Stock 147,952
Preferred stock
Allocated 433,014
Unallocated 99,245
Notes receivable from participants 31,201
------- ------ ------ -------
TOTAL INVESTMENTS 10,247 32,269 14,578 906,181
INSURANCE COMPANY CONTRACTS, AT
CONTRACT VALUE (Note 2) 39,661
RECEIVABLES
Interest and dividends receivable 6
------- ------ ------ -------
TOTAL RECEIVABLES - - - 6
-------- --------- ------- --------
TOTAL ASSETS 10,247 32,269 14,578 945,848
-------- --------- ------- --------
LIABILITIES
Current maturities of notes payable 51,682
Accrued plan expenses 36
-------- --------- ------- --------
TOTAL LIABILITIES - - - 51,718
-------- --------- ------- --------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 10,247 $ 32,269 $14,578 $894,130
======== ========= ======= ========
<FN>
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
RALSTON PURINA COMPANY SAVINGS INVESTMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
U.S.
ESOP Government
Preferred RAL Equity Fixed Money Participant
Stock Stock Index Income Market Loan Balanced
Fund Fund Fund Fund Fund Fund Fund
----------- ----------- ------- -------- ------- ------------ -----------
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income $ 21,155 $ 1,238 $ 1,374 $ 3,624 $ 857 $ 2,574 $ 2,536
Net realized and unrealized gain/(loss)
on investments 103,789 48,469 14,389 77 2,917
----------- ----------- ------- -------- ------- ------------ -----------
124,944 49,707 15,763 3,701 857 2,574 5,453
Contributions
Employer 17,750 252 245 277 361 445
Employee 23,776 2,107 2,515 1,740 959 1,601
----------- ----------- ------- -------- ------- ------------ -----------
41,526 2,359 2,760 2,017 1,320 - 2,046
Loan Repayments 3,578 1,891 3,244 2,919 (14,033) 896
---------- ----------- ------- ------- -------- ------------ -----------
TOTAL ADDITIONS 166,470 55,644 20,414 8,962 5,096 (11,459) 8,395
----------- ----------- ------- -------- ------- ------------ -----------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid 18,898 7,238 2,599 5,076 1,897 1,490 1,713
ESOP interest expense 7,939
Loan withdrawals 5,728 3,629 1,558 2,065 1,687 (16,955) 973
Administrative expenses 176 19 11 16 15 9
----------- ----------- ------- -------- ------- ------------ ------------
TOTAL DEDUCTIONS 32,741 10,886 4,168 7,157 3,599 (15,465) 2,695
----------- ----------- ------- -------- ------- ------------ -----------
Net Increase Prior to Interfund Transfers 133,729 44,758 16,246 1,805 1,497 4,006 5,700
Interfund Transfers (35,677) 23,011 5,414 (909) 766 - 2,229
----------- ----------- ------- -------- ------- ------------ -----------
NET INCREASE 98,052 67,769 21,660 896 2,263 4,006 7,929
Net Assets Available for Plan Benefits
Beginning of year 382,588 81,680 45,753 59,600 15,485 27,195 22,160
----------- ----------- ------- -------- ------- ------------ -----------
End of year $ 480,640 $ 149,449 $67,413 $60,496 $17,748 $ 31,201 $ 30,089
=========== =========== ======= ======== ======= ============ ===========
<S> <C> <C> <C> <C>
Growth Inter-
Aggressive and national
Growth Income Growth
Fund Fund Fund Total
-------- --------- ------- --------
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
Investment income $ 1,015 $ 2,916 $ 617 $ 37,906
Net realized and unrealized gain/(loss)
on investments 134 4,130 (130) 173,775
-------- --------- -------- --------
1,149 7,046 487 211,681
Contributions
Employer 111 280 121 19,842
Employee 978 2,059 1,047 36,782
-------- --------- ------- -------
1,089 2,339 1,168 56,624
Loan Repayments 385 730 390 -
-------- --------- ------- --------
TOTAL ADDITIONS 2,623 10,115 2,045 268,305
-------- --------- ------- --------
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
Benefits paid 264 1,147 437 40,759
ESOP interest expense 7,939
Loan withdrawals 258 714 343 -
Administrative expenses 3 5 3 257
-------- --------- ------- --------
TOTAL DEDUCTIONS 525 1,866 783 48,955
-------- --------- ------- --------
Net Increase Prior to Interfund Transfers 2,098 8,249 1,262 219,350
Interfund Transfers (394) 5,210 350 -
-------- --------- ------- --------
NET INCREASE 1,704 13,459 1,612 219,350
Net Assets Available for Plan Benefits
Beginning of year 8,543 18,810 12,966 674,780
-------- --------- ------- --------
End of year $10,247 $ 32,269 $14,578 $894,130
======== ========= ======= ========
<FN>
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
RALSTON PURINA COMPANY SAVINGS INVESTMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS WITH FUND INFORMATION
DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
U.S.
ESOP Government
Preferred RAL Equity Fixed Money Participant
Stock Stock Index Income Market Loan Balanced
Fund Fund Fund Fund Fund Fund Fund
---------- -------- ------- ------- ------- ------------ -----------
ASSETS
INVESTMENTS, AT FAIR VALUE (Note 2)
Shares in registered
investment company $ 295 $ 411 $45,753 $19,833 $15,485 $ - $ 22,160
Common stock - RAL Stock 81,313
Preferred stock
Allocated 330,998
Unallocated 150,624
Notes receivable from participants 27,195
---------- -------- ------- ------- ------ ----------- -----------
TOTAL INVESTMENTS 481,917 81,724 45,753 19,833 15,485 27,195 22,160
INSURANCE COMPANY CONTRACTS, AT 34,651
CONTRACT VALUE (Note 2)
RECEIVABLES
Interest and dividends receivable 21 276
Due from Ralston Purina Company 4,840
---------- -------- ------- ------- ------ ----------- ------------
TOTAL RECEIVABLES 21 - - 5,116 - - -
---------- -------- ------- ------- ------- ----------- ------------
TOTAL ASSETS 481,938 81,724 45,753 59,600 15,485 27,195 22,160
---------- -------- ------- ------- ------- ----------- -----------
LIABILITIES
Current maturities of notes payable 47,668
Accrued plan expenses 44
Notes payable 51,682
---------- -------- ------- ------- ------- ----------- ------------
TOTAL LIABILITIES 99,350 44 - - - - -
---------- -------- ------- ------- ------- ----------- ------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 382,588 $ 81,680 $45,753 $59,600 $15,485 $ 27,195 $ 22,160
========== ======== ======= ======= ======= ============ ===========
<S> <C> <C> <C> <C>
Growth Inter-
Aggressive and national
Growth Income Growth
Fund Fund Fund Total
------- --------- ------- --------
ASSETS
INVESTMENTS, AT FAIR VALUE (Note 2)
Shares in registered
investment company $ 8,543 $ 18,810 $12,966 $144,256
Common stock - RAL Stock 81,313
Preferred stock
Allocated 330,998
Unallocated 150,624
Notes receivable from participants 27,195
------- -------- ------ -------
TOTAL INVESTMENTS 8,543 18,810 12,966 734,386
INSURANCE COMPANY CONTRACTS, AT
CONTRACT VALUE (Note 2) 34,651
RECEIVABLES
Interest and dividends receivable 297
Due from Ralston Purina Company 4,840
------- -------- ------- -------
TOTAL RECEIVABLES - - - 5,137
------- -------- ------- --------
TOTAL ASSETS 8,543 18,810 12,966 774,174
------- -------- ------- --------
LIABILITIES
Current maturities of notes payable 47,668
Accrued plan expenses 44
Notes payable 51,682
------- -------- ------ -------
TOTAL LIABILITIES - - - 99,394
------- -------- ------ -------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 8,543 $ 18,810 $12,966 $674,780
======= ========= ======= ========
<FN>
See Notes to Financial Statements
</TABLE>
<PAGE>
RALSTON PURINA COMPANY
----------------------
SAVINGS INVESTMENT PLAN
-----------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - DESCRIPTION OF THE PLAN
- --------------------------------------
The following is a summary description of the Ralston Purina Company Savings
Investment Plan (the Plan) and provides only general information. Participants
should refer to the Plan document for a more complete description of the Plan's
provisions.
GENERAL - The Plan is a defined-contribution pension plan, established for the
purpose of enabling employees to enhance their long-range financial security
through regular savings with the benefit of Ralston Purina Company (the Company)
matching contributions.
The Plan is subject to certain provisions of the Employee Retirement Income
Security Act of 1974, as amended (ERISA). However, benefits under the Plan are
not eligible for plan termination insurance provided by the Pension Benefit
Guaranty Corporation under Title IV of ERISA.
PLAN PARTICIPATION - Participation in the Plan is open to substantially all
domestic employees of the Company and its designated subsidiaries. Participants
may contribute to the Plan upon enrollment; however, one year of credited
service is required in order to receive Company matching contributions (see
"Contributions" below).
CONTRIBUTIONS - Participants may make basic contributions of 2% to 12% of their
compensation, in 1% increments, on a pre-tax basis, subject to certain limits
imposed by the Internal Revenue Service (IRS). For employees first hired before
July 1, 1993, basic contributions not exceeding 6% of the participant's
compensation will be matched 100% by the Company. This match may be modified at
the discretion of the Company. For employees first hired after July 1, 1993,
after one year of service, the Company will match such basic contribution by
initially contributing 20% of the maximum Company match, increasing in 20%
increments for each additional year of service up to a maximum of 100% of the
maximum Company match after five years of service.
Participants may also, subject to IRS limitations, make supplemental, unmatched
contributions of 1% to 10% of their compensation, in 1% increments. Such
contributions are made on an after-tax basis. Participant contributions, both
pre-tax and after-tax, may not exceed 15% of their compensation. The Company
has imposed, on highly compensated employees, a pre-tax contribution limit of
10% and a supplemental contribution limit of 4%.
INVESTMENT OPTIONS - The leveraged employee stock ownership plan (ESOP), a
10-year program, was available for participation beginning February 1, 1989,
following the creation of the ESOP Preferred Stock Fund (ESOP Fund). Beginning
February 1, 1989, a participant's basic contribution of up to 6% of his
compensation and the Company matching contributions thereon are invested
primarily in the ESOP Fund. The ESOP Fund invests exclusively in Series A 6.75%
ESOP Convertible Preferred Stock of the Company (Preferred Stock). See Note 3
for further discussion of the ESOP Fund.
<PAGE>
Basic contributions in excess of 6% and supplemental contributions are invested
by the Trustee at the participant's direction, in the investment funds offered
by the Plan and selected by the participant. The funds available are listed on
the face of the financial statements. Participants can allocate the investment
of these contributions to any of the investment funds maintained pursuant to the
Plan except the ESOP Fund and the Participant Loan Fund.
VESTING - Employee contributions and earnings thereon vest immediately, while
Company matching contributions and earnings thereon vest over a period of four
years at a rate of 25% per year for each year of Company service. Participants
are 100% vested in Company matching contributions and earnings thereon after 4
years of service. In the event of a participant's retirement, death, or total
and permanent disability, Company contributions and earnings thereon become 100%
vested, even if the participant has rendered fewer than 4 years of service.
PLAN WITHDRAWALS - Plan withdrawals of basic, pre-tax contributions may be made
prior to termination or retirement for cases of financial hardship or at the age
of 59 1/2. Hardship distributions are limited to the amount required to meet
the need created by the hardship and are made at the discretion of the Plan
administrator (see "Plan Administration" below). Supplemental, after-tax
contributions and earnings thereon may be withdrawn at any time.
PARTICIPANT LOANS - Participants may borrow from their accounts subject to the
provisions of the Plan. Loans are limited to the lesser of $50,000 or 50% of
the vested amount in the participant's account, reduced by other outstanding
participant loan balances on the date of the loan. The minimum loan amount is
$1,000. Participants pay interest on such loans, at a fixed rate of 1
percentage point above the prime rate on the date of the loan. Participant
loans can be short or long-term, up to a maximum loan period of 5 years for
general purpose loans and 10 years for the purchase of a principal residence.
Loan repayments are made through payroll deduction each pay period. A
promissory note in the amount of the loan must be delivered to the Trustee, and,
in the event of the participant's termination, the unpaid balance and accrued
interest become due immediately and payable in full.
FORFEITURES - Upon the participant's termination of employment, 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. Forfeitures, net of amounts
restored, are used to reduce future Company contributions required under the
Plan. Forfeitures were $286,000 and $207,000 for the years ended December 31,
1997 and 1996, respectively.
PLAN ADMINISTRATION - The Plan is administered by the Company. Management of
Plan assets is under the direction of Ralston's Employee Benefit Asset
Investment Committee (EBAIC). Members of the EBAIC are Company employees and
are appointed by one of the Company's co-Chief Executive Officers. Vanguard
Fiduciary Trust Company is Trustee of the majority of the funds and assets of
the Plan. Bankers Trust Company, however, serves as Trustee of the ESOP Fund
and certain other assets. As Trustees, Vanguard Fiduciary Trust Company and
Bankers Trust Company have the authority to hold, manage and protect the assets
of the Plan in accordance with the provisions of the Plan and their respective
Trust Agreements.
<PAGE>
PLAN TERMINATION - The Company may, by action of its Board of Directors,
terminate the Plan with respect to all participating companies. In case of such
termination, participants shall be fully vested in Company matching
contributions credited to their accounts and, subject to Plan provisions and
applicable law, the total amount in each participant's account shall be
distributed to the participant or for the participant's benefit.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ----------------------------------------------------------
The significant accounting policies followed by the Plan are described below:
BASIS OF ACCOUNTING - The financial statements of the Plan are prepared using
the accrual basis of accounting such that income and related assets, and
expenses and related liabilities, are recognized in the plan year to which they
relate.
INVESTMENT VALUATION - The Plan's investments are stated at fair value, except
for insurance company contracts, which are stated at contract value. Shares of
registered investment companies are valued at quoted market prices, which
represent the net asset value of shares held by the Plan at year end. Company
stock (RAL Stock) is recorded at fair value, based on the closing market price
of the stock on the last business day of the Plan year. Participant loans are
valued at cost, which approximates fair value.
Investments with insurance companies are all benefit-responsive investment
contracts reported at contract value, which approximates fair value. Contract
value represents contributions made under the contract, plus earnings, less Plan
withdrawals and administrative expenses. The average yield for the investment
contracts, except for Executive Life contracts which are discussed in Note 5,
was 6.1% and 6.0% for the years ended December 31, 1997 and 1996, respectively.
The weighted average crediting rate for these contracts was 6.5% at December 31,
1997 and 1996.
INCOME RECOGNITION - Interest income is recognized when earned and dividend
income is recognized on the date of record. Realized gains and losses are
determined using the average cost method.
BENEFIT PAYMENTS - Benefits are recorded when paid.
USE OF ESTIMATES - The preparation of these financial statements requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, and revenues and expenses during the reporting period.
Actual results could differ from those estimates.
<PAGE>
NOTE 3 - EMPLOYEE STOCK OWNERSHIP PLAN (ESOP) PROVISION
- ---------------------------------------------------------------
The Company has authorized shares of Preferred Stock to be held by the Ralston
Purina Collective Trust for Savings Investment Plans (ESOT). The Preferred
Stock assets of the Plan are held in the ESOT. The shares are convertible into
Company common stock (RAL Stock) and have a guaranteed minimum value of $110.83
per share. In accordance with provisions of the Certificate of Designation of
the ESOP Preferred Stock, one share of Preferred Stock is convertible into 2.29
shares of RAL Stock. (This conversion factor changed subsequent to the Plan's
year end. See Note 8.) During the year, the Company converted shares of its
Preferred Stock to meet ongoing share redemption requirements of the ESOP and
2,500,890 shares of Preferred Stock, of the 4,600,000 authorized, remain issued
and outstanding as of December 31, 1997.
Financing for the purchase of the Preferred Stock was provided from the proceeds
of a $500 million 8.25% fixed rate, 10-year private placement issue (ESOP Notes)
by the ESOT. Semi-annual payments of $27.5 million were made during the Plan
year ended December 31, 1997. Payment of principal and interest on the ESOP
Notes is unconditionally guaranteed by the Company.
Shares of Preferred Stock are allocated to individual participants' accounts
based on the total amount of basic matched and Company matching contributions
divided by the guaranteed minimum value of the Preferred Stock. Dividends paid
by the Company on the Preferred Stock that have been credited to participants'
accounts may be used by the Plan to repay the ESOP Notes, and, if so, additional
shares, equal in value to the dividends credited, will be allocated to the
individual participants' accounts. If the dividends are not applied to loan
payments, the dividends are paid directly, in cash, to the individual
participants.
Upon maturity of the ESOP Notes on December 31, 1998, the Company may redeem
the outstanding shares of the Preferred Stock, in cash or in shares of RAL
Stock, at the guaranteed minimum value. Prior to redemption, the trustee of the
ESOT may elect to convert the shares of Preferred Stock into shares of RAL Stock
at the conversion rate then in effect (see Note 8). Upon such redemption or
conversion, the shares of RAL Stock or cash received by the trustee will be
deposited in the RAL Stock fund of the Plan and credited to participant accounts
in that fund.
NOTE 4 - INVESTMENTS AND RELATED PARTY TRANSACTIONS
- ----------------------------------------------------------
Attachment I, "Schedule of Assets Held for Investment Purposes," summarizes the
costs and fair values of investments held by the Plan at December 31, 1997 and
1996, and also identifies assets that represent more than 5% of Plan net assets
and related party transactions.
<PAGE>
NOTE 5 - EXECUTIVE LIFE GUARANTEED INVESTMENT CONTRACTS
- --------------------------------------------------------------
Prior to 1991, the Plan's Fixed Income Fund invested in two guaranteed
investment contracts (GIC's) issued by the Executive Life Insurance Company
(Executive Life). Executive Life was placed in conservatorship in 1991, and
the GIC's were frozen at their April 11, 1991 valuation. Subsequently,
Executive Life's net assets were transferred to Aurora National Life Assurance
Company (Aurora).
Subsequent to the transfer of Executive Life's net assets to Aurora through Plan
year 1997, the Plan received a total of $12.9 million of its $14 million claim
for the GIC's. The Company has protected the Fixed Income Fund from the
Executive Life GIC losses by making a payment of $5.1 million to the Fixed
Income Fund of the Plan during 1997, representing the $1.1 million deficiency in
the original claim of $14 million and accrued interest that would have been
earned by the GIC's from the time Executive Life was placed in conservatorship
through September 25, 1997, the date of the Company's payment to the Plan. The
Company made this payment upon approval from, and in accordance with an
agreement with, the Internal Revenue Service. As of December 31, 1997, these
GIC's are no longer investments in the Plan.
NOTE 6 - INCOME TAX STATUS
- -------------------------------
The Plan has received a determination from the IRS that the Plan constitutes a
qualified plan and that the trust holding the Plan's assets 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 and are therefore not taxed when distributed from the Plan.
Earnings related to these supplemental contributions are not subject to federal
income tax as long as they remain in the Plan; however, such earnings are taxed
when distributed from the Plan.
NOTE 7 - OTHER MATTERS
- --------------------------
On December 3, 1997, the Company sold its Protein Technologies International
subsidiary (Protein). During December 1997, Protein participants' shares of
Preferred Stock in the ESOP Fund were mandatorily converted into RAL Stock, in
accordance with the terms of the Preferred Stock shares, and placed into the RAL
Stock Fund. Subsequently, and similarly to other Company terminated employees,
Protein employees were given the option to retain all or a portion of their
accounts in the funds within the Plan except the ESOP Fund, to roll all or a
portion of their account into other qualified plans or individual retirement
accounts (IRA's), and/or to take cash or stock distributions from the Plan, in
accordance with Department of Labor Regulations, ERISA and the Internal Revenue
Code.
<PAGE>
NOTE 8 - SUBSEQUENT EVENTS
- ------------------------------
On April 1, 1998, the Company effected a spin-off to shareholders of its
Agricultural Products business (Agri). The new company is Agribrands
International, Inc. During April 1998, Agri participants' shares of Preferred
Stock in the ESOP Fund were mandatorily converted into RAL Stock, in accordance
with the terms of the Preferred Stock shares, and placed into the RAL Stock
Fund. Subsequently, Agri employees' Plan assets, including shares of Company
stock in the RAL Stock Fund, were transferred to the Agribrands International,
Inc. qualified plan, in accordance with Internal Revenue Service regulations.
As of the date these assets were transferred, Agri employees are no longer
participants of the Plan.
In conjunction with the spin-off, the conversion ratio for ESOP Preferred Stock
(see Note 3) changed from 2.29 shares of RAL Stock for one share of Preferred
Stock to 2.37 shares. Additionally, as of April 1, 1998, all participants of
the RAL Stock Fund became entitled to receive, and later received, one share of
Agribrands International, Inc. stock for every 10 shares of RAL Stock held.
Such participants had the option to sell all or some of such stock, subsequent
to the date of receipt, and transfer the proceeds received to other funds within
the Plan. Participants have until March 31, 1999 to sell any remaining
Agribrands International Inc. common stock held in the Plan as of that
date and transfer the proceeds to any other fund within the Plan, except to
the ESOP Fund.
On May 28, 1998, the Company declared a three-for-one stock split to
shareholders of record at the close of business on June 22, 1998. Employee
shareholders who are participants in the RAL Stock Fund of the Plan will receive
two additional shares of RAL Stock for each share then owned. These additional
shares will be credited to the participants' accounts on July 15, 1998. In
conjunction with this stock split, the conversion ratio for ESOP Preferred Stock
changed from 2.37 shares of RAL Stock for one share of Preferred Stock to 7.12
shares.
<PAGE>
<TABLE>
<CAPTION>
ATTACHMENT I
RALSTON PURINA COMPANY SAVINGS INVESTMENT PLAN
EIN 43-0470580 PLAN NO. 140
ITEM 27A - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
($000'S EXCEPT FOR SHARE/UNIT DATA)
DECEMBER 31, 1997 DECEMBER 31, 1996
----------------- -----------------
NUMBER OF FAIR NUMBER OF
DESCRIPTION OF INVESTMENT SHARES COST VALUE SHARES COST
------------------------------------------------------------- ---------- -------- -------- ---------- --------
<C> <S> <C> <C> <C> <C>
** Vanguard Money Market Reserve Fund - Prime Portfolio 3,146 3,146 3,146 - -
** Vanguard Short-Term Corporate Bond Fund 1,123,587 12,049 12,209 1,299,443 12,891
** Vanguard Index Trust - 500 Portfolio 748,455 40,965 67,413 * 661,556 31,466
** Vanguard Money Market Reserve Fund - Federal Portfolio 17,747,825 17,748 17,748 15,484,569 15,485
** Vanguard Wellington Fund 1,021,698 25,060 30,089 847,414 19,313
** Vanguard Explorer Fund 185,288 9,660 10,247 158,711 7,907
** Vanguard Windsor II Fund 1,127,498 25,985 32,269 789,354 15,993
** Vanguard International Growth Portfolio 889,434 13,510 14,578 787,748 11,369
** Vanguard Investment Contract Trust Fund 7,069,990 7,070 7,070 7,544,613 7,545
-------- -------- --------
Total Investment in Shares in Registered
Investment Company 155,193 194,769 121,969
** Ralston Purina Company Common Stock 1,591,961 75,652 147,952 * 1,108,180 50,730
-------- -------- --------
Total Investment in Common Stock 75,652 147,952 50,730
** Ralston Purina Co. Series A ESOP Convertible Preferred Stock 2,500,890 277,174 532,259 * 2,866,307 317,672
American Inter Life Insurance Contract Separate Account 2,121 2,121 2,124
Hartford Insurance Contract Separate Account 3,329 3,329 6,235
Metropolitan Insurance Contract Separate Account - - 2,573
Natwest Insurance Contract Separate Account 4,235 4,235 -
New York Life Insurance Contract Separate Account 4,169 4,169 3,913
Peoples Security Life Insurance Contract Separate Account 4,182 4,182 3,916
Union Bank Switzerland Insurance Contract Separate Account 7,819 7,819 7,348
West Landesbank Insurance Contract Separate Account 8,138 8,138 7,629
Rabobank Insurance Contract Separate Account 2,648 2,648 -
Rabobank Nederland Insurance Contract Separate Account 3,020 3,020 -
Executive Life Insurance Contract Separate Account - - 913
-------- -------- --------
Total Insurance Company Contracts 39,661 39,661 34,651
Notes Receivable from Participants (7% to 9.75% interest) 31,201 31,201 27,195
-------- -------- --------
$578,881 $945,842 $552,217
======== ======== ========
FAIR
DESCRIPTION OF INVESTMENT VALUE
- ------------------------------------------------------------- --------
<S> <C>
** Vanguard Money Market Reserve Fund - Prime Portfolio -
** Vanguard Short-Term Corporate Bond Fund 12,994
** Vanguard Index Trust - 500 Portfolio 45,753 *
** Vanguard Money Market Reserve Fund - Federal Portfolio 15,485
** Vanguard Wellington Fund 22,160
** Vanguard Explorer Fund 8,543
** Vanguard Windsor II Fund 18,810
** Vanguard International Growth Portfolio 12,966
** Vanguard Investment Contract Trust Fund 7,545
--------
Total Investment in Shares in Registered
Investment Company 144,256
** Ralston Purina Company Common Stock 81,313 *
--------
Total Investment in Common Stock 81,313
** Ralston Purina Co. Series A ESOP Convertible Preferred Stock 481,622 *
American Inter Life Insurance Contract Separate Account 2,124
Hartford Insurance Contract Separate Account 6,235
Metropolitan Insurance Contract Separate Account 2,573
Natwest Insurance Contract Separate Account -
New York Life Insurance Contract Separate Account 3,913
Peoples Security Life Insurance Contract Separate Account 3,916
Union Bank Switzerland Insurance Contract Separate Account 7,348
West Landesbank Insurance Contract Separate Account 7,629
Rabobank Insurance Contract Separate Account -
Rabobank Nederland Insurance Contract Separate Account -
Executive Life Insurance Contract Separate Account 913
--------
Total Insurance Company Contracts 34,651
Notes Receivable from Participants (7% to 9.75% interest) 27,195
--------
$769,037
========
<FN>
* Investment represents 5% or more of the Plan's net assets.
** Investment represents allowable transaction with a party-in-interest.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ATTACHMENT II
RALSTON PURINA COMPANY SAVINGS INVESTMENT PLAN
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
FOR THE YEAR ENDED DECEMBER 31, 1997
($000'S)
<S> <C>
Investment in Shares in Registered Investment Company $ 21,517
Investment in Common Stock 48,469
Investment in Preferred Stock 103,789
--------
Net Realized and Unrealized Gain on Investments $173,775
========
</TABLE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
May 15, 1998
To the Participants and the Plan
Administrator of the Ralston Purina
Company Savings Investment Plan
In our opinion, the accompanying statements of net assets available for plan
benefits and the related statement of changes in net assets available for plan
benefits present fairly, in all material respects, the net assets available for
plan benefits of the Ralston Purina Company Savings Investment Plan at December
31, 1997 and 1996, and the changes in net assets available for plan benefits for
the year ended December 31, 1997, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Plan Administrator; 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 the Plan Administrator, and evaluating
the overall financial statement presentation. We believe that our audits provide
a reasonable basis for the opinion expressed above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
Attachments I and II is presented for purposes of additional analysis and is not
a required part of the basic financial statements but is additional information
required by ERISA. The Fund Information in the statement of net assets 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 plan benefits of each
fund. The additional information and Fund Information have been subjected to the
auditing procedures applied in the audit 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.
PRICE WATERHOUSE LLP
------------------------------
PRICE WATERHOUSE LLP
800 Market Street
St. Louis, Missouri
63101
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, Ralston
Purina Company as Plan Administrator of the Savings Investment Plan, has duly
caused this annual report to be signed by the undersigned thereunto duly
authorized.
RALSTON PURINA COMPANY
By: /s/ James R. Elsesser
James R. Elsesser, Vice President
and Chief Financial Officer
Ralston Purina Company
June 30, 1998
<PAGE>
EXHIBIT INDEX
Exhibits
- ----------
23 Consent of Independent Accountants
(provided electronically)
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Company's
Registration Statements on Form S-8 (Nos. 2-96616, 33-677, 2-77778, 2-83297,
2-81753, 33-17875, 33-25396, 33-25674, 33-19911, 333-02033) of our report dated
May 15, 1998 appearing on page 13 of the Ralston Purina Company Savings
Investment Plan's Annual Report on Form 11-K for the year ended December 31,
1997.
/s/ Price Waterhouse LLP
- ----------------------
Price Waterhouse LLP
St. Louis, Missouri
June 29, 1998
