Exhibit 99.1

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF MANAGEMENT RESPONSIBILITIES

     Management of Ralcorp Holdings, Inc. is responsible for the fairness and accuracy of the consolidated financial statements. The statements have been prepared in accordance with accounting principles generally accepted in the United States, and in the opinion of management, the financial statements present fairly the Company’s financial position, results of operations and cash flows.

     Management has established and maintains accounting and internal control systems that it believes are adequate to provide reasonable assurance that assets are safeguarded against loss from unauthorized use or disposition and that the financial records are reliable for preparing financial statements. The selection and training of qualified personnel, the establishment and communication of accounting and administrative policies and procedures and our Standards of Business Conduct for Officers and Employees are important elements of these control systems. We maintain a strong internal audit program that independently evaluates the adequacy and effectiveness of internal controls. Appropriate actions are taken by management to correct any control weaknesses identified in the audit process.

     The Board of Directors, through its Audit Committee consisting solely of independent directors, meets periodically with management and the independent registered public accounting firm to discuss internal control, auditing and financial reporting matters. To ensure independence, PricewaterhouseCoopers LLP has direct access to the Audit Committee.

     The Audit Committee reviewed and approved the Company’s annual financial statements and recommended to the full Board of Directors that they be included in the Annual Report.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

     Management of Ralcorp Holdings, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934. Under the supervision and with the participation of management, including the Co-Chief Executive Officers and Controller and Chief Accounting Officer, we conducted an evaluation of the effectiveness of our internal controls over financial reporting based on the criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on the evaluation under this framework, management concluded that our internal control over financial reporting was effective as of September 30, 2009 at the reasonable assurance level. We have excluded Harvest Manor Farms, LLC from the assessment of internal control over financial reporting as of September 30, 2009 because it was acquired by the Company in a purchase business combination during 2009. Harvest Manor’s assets and revenues represented 1% and 2%, respectively, of the related consolidated financial statement amounts as of and for the year ended September 30, 2009. The effectiveness of our internal control over financial reporting as of September 30, 2009 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report (on the following page).

/s/ Kevin J. Hunt		/s/ David P. Skarie		/s/ Thomas G. Granneman
Kevin J. Hunt Co-Chief Executive Officer		David P. Skarie Co-Chief Executive Officer		Thomas G. Granneman Controller and Chief Accounting Officer

November 30, 2009

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Ralcorp Holdings, Inc.:

     In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of earnings, of cash flows, and of shareholders’ equity present fairly, in all material respects, the financial position of Ralcorp Holdings, Inc. and its subsidiaries at September 30, 2009 and 2008, and the results of their operations and their cash flows for each of the three years in the period ended September 30, 2009 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2009, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on these financial statements and on the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included 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. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

     A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

     Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

     As described in Management’s Report on Internal Control Over Financial Reporting, management has excluded Harvest Manor Farms, LLC from its assessment of internal control over financial reporting as of September 30, 2009 because it was acquired by the Company in a purchase business combination during fiscal 2009. We have also excluded Harvest Manor Farms, LLC from our audit of internal control over financial reporting. Harvest Manor Farms, LLC is a wholly owned subsidiary, with total assets and total revenues representing 1% and 2% of the related consolidated financial statement amounts as of and for the year ended September 30, 2009.

RALCORP HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF EARNINGS

(Dollars in millions except per share data, shares in thousands)

		Year Ended September 30,
		2009				2008				2007
Net Sales		$	3,891.9			$	2,824.4			$	2,233.4
Cost of products sold			(2,834.1	)			(2,318.1	)			(1,819.2	)
Gross Profit			1,057.8				506.3				414.2
Selling, general and administrative expenses			(609.0	)			(328.4	)			(252.8	)
Interest expense, net			(99.0	)			(54.6	)			(42.3	)
Gain (loss) on forward sale contracts			17.6				111.8				(87.7	)
Gain on sale of securities			70.6				7.1				—
Restructuring charges			(.5	)			(1.7	)			(.9	)
Earnings before Income Taxes and Equity Earnings			437.5				240.5				30.5
Income taxes			(156.9	)			(86.7	)			(7.5	)
Earnings before Equity Earnings			280.6				153.8				23.0
Equity in earnings of Vail Resorts, Inc., net of related deferred income taxes			9.8				14.0				8.9
Net Earnings		$	290.4			$	167.8			$	31.9
Basic Earnings per Share		$	5.16			$	5.51			$	1.20
Diluted Earnings per Share		$	5.09			$	5.38			$	1.17
Weighted Average Shares for Basic Earnings per Share			56,166				30,321				26,382
Dilutive effect of:
Stock options			437				560				562
Restricted stock awards			207				98				39
Stock appreciation rights			151				89				67
Weighted Average Shares for Diluted Earnings per Share			56,961				31,068				27,050

See accompanying Notes to Consolidated Financial Statements.

RALCORP HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(In millions except share and per share data)

		September 30,
		2009				2008
Assets
Current Assets
Cash and cash equivalents		$	282.8			$	14.1
Marketable securities			12.0				9.2
Investment in Ralcorp Receivables Corporation			134.4				56.5
Receivables, net			135.9				160.1
Due from Kraft Foods Inc.			—				49.0
Inventories			365.9				337.0
Deferred income taxes			10.6				16.5
Prepaid expenses and other current assets			12.6				5.4
Total Current Assets			954.2				647.8
Investment in Vail Resorts, Inc.			—				126.0
Property, Net			913.1				903.1
Goodwill			2,386.6				2,454.3
Other Intangible Assets, Net			1,172.2				1,189.5
Other Assets			26.1				23.2
Total Assets		$	5,452.2			$	5,343.9
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts and notes payable		$	240.4			$	204.7
Due to Kraft Foods Inc.			13.6				—
Other current liabilities			225.0				187.2
Total Current Liabilities			479.0				391.9
Long-term Debt			1,611.4				1,668.8
Deferred Income Taxes			464.6				601.6
Other Liabilities			191.6				270.1
Total Liabilities			2,746.6				2,932.4
Commitments and Contingencies
Shareholders’ Equity
Common stock, par value $.01 per share
Authorized: 300,000,000 shares
Issued: 63,476,635 shares			.6				.6
Additional paid-in capital			1,931.4				1,919.6
Common stock in treasury, at cost (6,840,231 and 7,195,555 shares, respectively)			(244.8	)			(257.3	)
Retained earnings			1,059.3				768.9
Accumulated other comprehensive loss			(40.9	)			(20.3	)
Total Shareholders’ Equity			2,705.6				2,411.5
Total Liabilities and Shareholders’ Equity		$	5,452.2			$	5,343.9

See accompanying Notes to Consolidated Financial Statements.

RALCORP HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

		Year Ended September 30,
		2009				2008				2007
Cash Flows from Operating Activities
Net earnings		$	290.4			$	167.8			$	31.9
Adjustments to reconcile net earnings to net cash flow provided by operating activities:
Depreciation and amortization			144.7				99.5				82.4
Sale of receivables, net			(50.0	)			4.2				45.8
Equity in earnings of Vail Resorts, Inc.			(15.4	)			(21.7	)			(13.7	)
(Gain) loss on forward sale contracts			(17.6	)			(111.8	)			87.7
Deferred income taxes			(40.3	)			13.1				(33.0	)
Stock-based compensation expense			13.4				11.5				8.2
Gain on sale of securities			(70.6	)			(7.1	)			—
Other changes in current assets and liabilities, net of effects of business acquisitions:
Decrease (increase) in receivables			9.2				(86.4	)			15.5
Change in due to/from Kraft Foods Inc.			62.6				(49.0	)			—
Increase in inventories			(9.8	)			(6.6	)			(14.7	)
(Increase) decrease in prepaid expenses and other current assets			(2.2	)			(1.1	)			5.7
(Decrease) increase in accounts payable and other current liabilities			(19.6	)			121.2				(4.7	)
Other, net			31.9				(.8	)			6.5
Net Cash Provided by Operating Activities			326.7				132.8				217.6
Cash Flows from Investing Activities
Business acquisitions, net of cash acquired			(55.0	)			(20.3	)			(331.9	)
Additions to property and intangible assets			(115.0	)			(62.5	)			(51.7	)
Proceeds from sale of property			.1				.2				.2
Purchases of securities			(16.2	)			(38.8	)			(8.9	)
Proceeds from sale or maturity of securities			95.9				50.4				4.8
Net Cash Used by Investing Activities			(90.2	)			(71.0	)			(387.5	)
Cash Flows from Financing Activities
Proceeds from issuance of long-term debt			400.0				—				200.0
Repayment of long-term debt			(389.7	)			(39.7	)			(29.0	)
Net (repayments) borrowings under credit arrangements			(22.1	)			(20.0	)			40.0
Advance proceeds from forward sale of securities			—				—				29.5
Purchase of treasury stock			—				(5.6	)			(78.8	)
Proceeds and tax benefits from exercise of stock awards			15.2				3.9				5.5
Change in book cash overdrafts			27.8				4.5				(7.2	)
Other, net			(1.3	)			.1				—
Net Cash Provided (Used) by Financing Activities			29.9				(56.8	)			160.0
Effect of Exchange Rate Changes on Cash			2.3				(.8	)			.7
Net Increase (Decrease) in Cash and Cash Equivalents			268.7				4.2				(9.2	)
Cash and Cash Equivalents, Beginning of Year			14.1				9.9				19.1
Cash and Cash Equivalents, End of Year		$	282.8			$	14.1			$	9.9

See accompanying Notes to Consolidated Financial Statements.

(Dollars in millions except per share data, shares in thousands)

																		Accum. Other
						Additional				Common								Comprehensive
		Common				Paid-In				Stock in				Retained				Income
		Stock				Capital				Treasury				Earnings				(Loss)				Total
Balance, September 30, 2006		$	.3			$	118.3			$	(187.7	)		$	569.2			$	(23.7	)		$	476.4
Net earnings															31.9								31.9
Minimum pension liability adjustment, net of $16.7 tax expense																			28.9				28.9
Cash flow hedging adjustments, net of $10.5 tax expense																			17.7				17.7
Foreign currency translation adjustment																			14.6				14.6
Comprehensive income																							93.1
Adjustment to initially apply FAS 158, net of $12.1 tax benefit																			(20.2	)			(20.2	)
Stock purchased (1,382 shares)											(78.8	)											(78.8	)
Stock options & stock appreciation rights exercised (154 shares)							.2				4.8												5.0
Restricted stock issued (142 shares)							(4.4	)			4.4												—
Stock-based compensation expense							8.2																8.2
Activity under deferred compensation plans (15 shares)							(.7	)			.4												(.3	)
Balance, September 30, 2007		$	.3			$	121.6			$	(256.9	)		$	601.1			$	17.3			$	483.4
Net earnings															167.8								167.8
Benefit plan adjustment, net of $.9 tax expense																			1.3				1.3
Cash flow hedging adjustments, net of $18.4 tax benefit																			(31.5	)			(31.5	)
Foreign currency translation adjustment																			(7.4	)			(7.4	)
Comprehensive income																							130.2
Common stock issued (30,466 shares)			.3				1,788.1																1,788.4
Stock purchased (100 shares)											(5.6	)											(5.6	)
Stock options & stock appreciation rights exercised (100 shares)							.4				3.5												3.9
Restricted stock issued (30 shares)							(1.1	)			1.1												—
Stock-based compensation expense							11.4																11.4
Activity under deferred compensation plans (16 shares)							(.8	)			.6												(.2	)
Balance, September 30, 2008		$	.6			$	1,919.6			$	(257.3	)		$	768.9			$	(20.3	)		$	2,411.5
Net earnings															290.4								290.4
Benefit plan adjustment, net of $14.5 tax benefit																			(20.7	)			(20.7	)
Cash flow hedging adjustments, net of $.3 tax expense																			3.2				3.2
Foreign currency translation adjustment																			(3.1	)			(3.1	)
Comprehensive income																							269.8
Stock options & stock appreciation rights exercised (402 shares)							(2.2	)			14.4												12.2
Restricted stock issued, net (48 shares)							.9				(1.9	)											(1.0	)
Stock-based compensation expense							12.2																12.2
Activity under deferred compensation plans (2 shares)							.9				—												.9
Balance, September 30, 2009		$	.6			$	1,931.4			$	(244.8	)		$	1,059.3			$	(40.9	)		$	2,705.6

See accompanying Notes to Consolidated Financial Statements.

RALCORP HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions except per share data)

NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Basis of Consolidation — The financial statements are presented on a consolidated basis and include the accounts of Ralcorp and its majority-owned subsidiaries, except Ralcorp Receivables Corporation (see Note 10). All significant intercompany transactions have been eliminated. The Company’s investment in Vail Resorts, Inc. was presented on the equity basis through June 2009 (see Note 5).

     Estimates — The financial statements have been prepared in conformity with generally accepted accounting principles, which require management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates and assumptions.

     Cash Equivalents include all highly liquid investments with original maturities of less than three months.

     Receivables are reported at net realizable value. This value includes appropriate allowances for doubtful accounts, cash discounts, and other amounts which the Company does not ultimately expect to collect. The Company calculates the allowance for doubtful accounts based on historical losses and the economic status of, and its relationship with, its customers, especially those identified as “at risk.” A receivable is considered past due if payments have not been received within the agreed upon invoice terms. Receivables are written off against the allowance when the customer files for bankruptcy protection or is otherwise deemed to be uncollectible based upon the Company’s evaluation of the customer’s solvency. The Company’s primary concentration of credit risk is related to certain trade accounts receivable due from several highly leveraged or “at risk” customers. At September 30, 2009 and 2008, the amount of such receivables was immaterial. Consideration was given to the economic status of these customers when determining the appropriate allowance for doubtful accounts (see Note 11) and the fair value of the Company’s subordinated retained interest in accounts receivable (see Note 10).

     Inventories are generally valued at the lower of average cost (determined on a first-in, first-out basis) or market. Reported amounts have been reduced by an allowance for obsolete product and packaging materials based on a review of inventories on hand compared to estimated future usage and sales (see Note 9 and Note 11).

     Derivative Financial Instruments and Hedging — We enter into derivative contracts as economic hedges. Hedge accounting is only applied when the derivative is deemed to be highly effective at offsetting changes in fair values or anticipated cash flows of the hedged item or transaction. Earnings impacts for all designated hedges are reported in the statement of earnings within the same line item as the gain or loss on the item being hedged. Since the hedging activities relate to operations, related cash flows are included in the statement of cash flows in cash flows from operating activities. For a fair value hedge of a recognized asset or liability or unrecognized firm commitment, the entire change in fair value of the derivative is recorded in earnings as incurred. For a cash flow hedge of an anticipated transaction, the ineffective portion of the change in fair value of the derivative is recorded in earnings as incurred, whereas the effective portion is deferred in accumulated other comprehensive income in the balance sheet until the transaction is realized, at which time any deferred hedging gains or losses are recorded in earnings. For more information about our hedging activities, see Note 12.

     Property is recorded at cost, and depreciation expense is generally provided on a straight-line basis over the estimated useful lives of the properties. Estimated useful lives range from 3 to 15 years for machinery and equipment and 10 to 50 years for buildings and leasehold improvements. Total depreciation expense was $102.9, $70.3, and $58.7 in fiscal 2009, 2008, and 2007, respectively. Repair and maintenance costs incurred in connection with planned major maintenance activities are accounted for under the direct expensing method. At September 30, property consisted of:

		2009				2008
Land		$	26.9			$	26.9
Buildings and leasehold improvements			279.4				266.5
Machinery and equipment			1,076.3				996.0
Construction in progress			76.2				60.9
			1,458.8				1,350.3
Accumulated depreciation			(545.7	)			(447.2	)
		$	913.1			$	903.1

     Other Intangible Assets consist of computer software purchased or developed for internal use and customer relationships, trademarks, computer software, and miscellaneous intangibles acquired in business combinations (see Note 2). Amortization expense related to intangible assets, which is provided on a straight-line basis over the estimated useful lives of the assets, was $41.8, $29.2, and $23.7 in fiscal 2009, 2008, and 2007, respectively. For the intangible assets recorded as of September 30, 2009, amortization expense of $43.4, $40.9, $40.4, $39.2, and $35.3 is scheduled for fiscal 2010, 2011, 2012, 2013, and 2014, respectively. Other intangible assets consisted of:

		September 30, 2009												September 30, 2008
		Carrying				Accum.				Net				Carrying				Accum.				Net
		Amount				Amort.				Amount				Amount				Amort.				Amount
Computer software		$	52.8			$	(30.1	)		$	22.7			$	34.7			$	(24.2	)		$	10.5
Customer relationships			421.2				(82.0	)			339.2				422.2				(54.4	)			367.8
Trademarks/brands			816.0				(12.7	)			803.3				808.4				(6.3	)			802.1
Other			13.1				(6.1	)			7.0				13.1				(4.0	)			9.1
		$	1,303.1			$	(130.9	)		$	1,172.2			$	1,278.4			$	(88.9	)		$	1,189.5

     Recoverability of Assets — The Company continually evaluates whether events or circumstances have occurred which might impair the recoverability of the carrying value of its assets, including property, identifiable intangibles, goodwill, and investment in Ralcorp Receivables Corporation. An asset is deemed impaired and written down to its fair value if estimated related future cash flows are less than its carrying amount.

     Investments — The Company funds a portion of its deferred compensation liability by investing in certain mutual funds in the same amounts as selected by the participating employees. Because management’s intent is to invest in a manner that matches the deferral options chosen by the participants and those participants can elect to transfer amounts in or out of each of the designated deferral options at any time, these investments have been classified as trading assets and are stated at fair value in “Other Assets.” Both realized and unrealized gains and losses on these assets are included in “Selling, general and administrative expenses” and offset the related change in the deferred compensation liability.

     Revenue is recognized when title of goods is transferred to the customer, as specified by the shipping terms. Net sales reflect gross sales, including amounts billed to customers for shipping and handling, less sales discounts and allowances. Products are generally sold with no right of return except in the case of goods which do not meet product specifications or are damaged, and related reserves are maintained based on return history. If additional rights of return are granted, revenue recognition is deferred. Estimated reductions to revenue for customer incentive offerings are based upon customers’ redemption history.

     Cost of Products Sold includes, among other things, inbound and outbound freight costs and depreciation expense related to assets used in production, while storage and other warehousing costs are included in “Selling, general, and administrative expenses.” Storage and other warehousing costs totaled $69.3, $63.0, and $57.3 in fiscal 2009, 2008, and 2007, respectively.

     Advertising, Repair, and Maintenance Costs are expensed as incurred.

     Stock-based Compensation — The Company recognizes the cost of employee services received in exchange for awards of equity instruments based on the grant-date fair value of those awards (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award — the requisite service period (usually the vesting period). The Company followed the nominal vesting period approach prior to October 1, 2005 (for pro forma disclosure purposes) and must continue following that approach for awards outstanding as of that date, but applies the non-substantive vesting period approach to new grants that have retirement eligibility provisions. See Note 18 for disclosures related to stock-based compensation.

     Income Tax Expense is estimated based on taxes in each jurisdiction and includes the effects of both current tax exposures and the temporary differences resulting from differing treatment of items for tax and financial reporting purposes. These temporary differences result in deferred tax assets and liabilities. A valuation allowance is established against the related deferred tax assets to the extent that it is not more likely than not that the future benefits will be realized. Reserves are recorded for estimated exposures associated with the Company’s tax filing positions, which are subject to periodic audits by governmental taxing authorities. Interest due to an underpayment of income taxes is classified as income taxes. The Company considers the undistributed earnings of its foreign subsidiaries to be permanently invested, so no U.S. taxes have been provided for those earnings. See Note 4 for disclosures related to income taxes.

     Recently Issued Accounting Standards — Significant developments in accounting rules are discussed below.

     In June 2009, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (FAS) 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles — a replacement of FASB Statement No. 162.” The Accounting Standards Codification (ASC) combines all authoritative standards into a comprehensive, topically organized online database. Following this Statement, which is now included in ASC Topic 105, “Generally Accepted Accounting Principles” (GAAP), the FASB will not issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts. Instead, it will issue Accounting Standards Updates (ASU) to update the ASC. Since the launch of the ASC on July 1, 2009, only one level of authoritative U.S. GAAP for non-governmental entities exists, other than guidance issued by the Securities and Exchange Commission. This Statement became effective for Ralcorp’s annual and interim reporting periods ending after September 15, 2009, but did not have a material impact on the Company’s financial statements.

     In September 2006, the FASB issued (FAS) 157, “Fair Value Measurements,” now included in ASC Topic 820, “Fair Value Measurements and Disclosures.” This Statement defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. This Statement was effective for Ralcorp as of October 1, 2008; but, FSP FAS 157-2 (also included in ASC 820) permitted a one-year deferral for non-financial assets and liabilities not recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The adoption of ASC 820 for financial assets and liabilities did not have a material impact on the Company’s results of operations or financial position, and we do not believe the adoption of ASC 820 for non-financial assets and liabilities, effective October 1, 2009, will have a material impact on our consolidated financial statements. Required disclosures are included in Note 13.

     In February 2007, the FASB issued FAS 159, “The Fair Value Option for Financial Assets and Financial Liabilities,” now included in ASC Topic 825, “Financial Instruments.” This Statement permits entities to choose to measure many financial instruments and certain other items at fair value. This Statement was effective as of the beginning of Ralcorp’s 2009 fiscal year, but it did not have an effect on our consolidated financial statements as we did not elect this fair value option for any items.

     In December 2007, the FASB issued FAS 141(R), “Business Combinations,” now included in ASC Topic 805, “Business Combinations,” which replaces FAS 141. This Statement establishes principles and requirements for how an acquirer in a business combination recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any controlling interest; recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of business combinations. This Statement is effective for acquisitions completed after the beginning of Ralcorp’s 2010 fiscal year.

     In March 2008, the FASB issued FAS 161, “Disclosures about Derivative Instruments and Hedging Activities,” now included in ASC Topic 815, “Derivatives and Hedging.” This Statement changes the disclosure requirements for derivative instruments and hedging activities to include enhanced disclosures about how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for, and how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and

cash flows. This Statement was effective for Ralcorp beginning with its financial statements for March 31, 2009. Required disclosures are included in Note 12.

     In April 2008, the FASB issued FSP FAS 142-3, “Determination of the Useful Life of Intangible Assets,” now included in ASC Topic 350, “Intangibles-Goodwill and Other,” which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FAS 142, “Goodwill and Other Intangible Assets.” This FSP will be effective for financial statements issued for Ralcorp’s 2010 fiscal year. The FSP’s guidance for determining the useful life of a recognized intangible asset must be applied prospectively to intangible assets acquired after the effective date (October 1, 2009 for Ralcorp). The FSP’s disclosure requirements must be applied prospectively to all intangible assets recognized as of, and subsequent to, the effective date.

     In April 2009, the FASB issued FSP 157-4, FSP FAS 107-1 and APB 28-1, and FSP FAS 115-2 and FAS 124-2, all of which were effective for Ralcorp beginning in the third quarter of fiscal 2009. FSP 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly,” now included in ASC Topic 820, “Fair Value Measurements and Disclosures,” provides guidelines for making fair value measurements more consistent with the principles presented in FAS 157 (also included in ASC Topic 820). FSP FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments,” now included in ASC Topic 270, “Interim Reporting,” enhances consistency in financial reporting by increasing the frequency of fair value disclosures. FSP FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments,” now included in ASC Topic 320, “Investments - Debt and Equity Securities,” provides additional guidance designed to create greater clarity and consistency in accounting for and presenting impairment losses on securities. The adoption of these FSPs did not have a material impact on the Company’s financial statements.

     In May 2009, the FASB issued FAS 165, “Subsequent Events,” now included in ASC Topic 855, “Subsequent Events.” This Statement introduces the concept of financial statements being available to be issued. It requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date, that is, whether the date represents the date the financial statements were issued or were available to be issued. This disclosure should alert all users of financial statements that an entity has not evaluated subsequent events after that date in the set of financial statements being presented. The Company adopted this standard for the interim reporting period ended June 30, 2009. The adoption of this statement did not have a material impact on the Company’s financial statements.

     In June 2009, the FASB issued FAS 166, “Accounting for Transfers of Financial Assets — an Amendment of FASB Statement No. 140,” now included in ASC Topic 860, “Transfers and Servicing.” The standard eliminates the concept of a qualifying special-purpose entity, creates more stringent conditions for reporting a transfer of a portion of a financial asset as a sale, clarifies other sale-accounting criteria, and changes the initial measurement of a transferor’s interest in transferred financial assets. This Statement will be effective for Ralcorp’s 2011 fiscal year. The Company is currently evaluating the impact of the adoption of this Statement.

     In June 2009, the FASB issued FAS 167, “Amendments to FASB Interpretation No. 46(R),” now included in ASC Topic 810, “Consolidation.” The new standard eliminates FASB Interpretation 46(R) (FIN 46(R)) exceptions for consolidating qualifying special-purpose entities, contains new criteria for determining the primary beneficiary, and increases the frequency of required reassessments to determine whether a company is the primary beneficiary of a variable interest entity. ASC 810 also contains a new requirement that any term, transaction, or arrangement that does not have a substantive effect on an entity’s status as a variable interest entity, a company’s power over a variable interest entity, or a company’s obligation to absorb losses or its right to receive benefits of an entity must be disregarded in applying FIN 46(R) provisions. The elimination of the qualifying special-purpose entity concept and its consolidation exceptions means more entities will be subject to consolidation assessments and reassessments. This Statement requires additional disclosures regarding an entity’s involvement in a variable interest entity. This Statement is effective for Ralcorp’s 2011 fiscal year. The Company is currently evaluating the impact of the adoption of this statement.

     Reclassifications — Certain prior years’ amounts have been reclassified to conform to the current year’s presentation.

NOTE 2 — ACQUISITIONS AND GOODWILL

     Each of the following acquisitions was accounted for using the purchase method of accounting, whereby the results of operations of each of the following acquisitions are included in the consolidated statements of earnings from the date of acquisition. The purchase price, including costs of acquisition, was allocated to acquired assets and liabilities based on their estimated fair values at the date of acquisition, and any excess was allocated to goodwill, as shown in the following table. For the fiscal 2009 acquisition of Harvest Manor Farms, the allocation is subject to change pending the completion of certain valuations (primarily intangible assets and deferred tax assets and liabilities).

		Harvest				Post				Pastries				Bloomfield				Cottage
		Manor				Foods				Plus				Bakers				Bakery
Cash		$	—			$	73.3			$	—			$	1.5			$	.1
Receivables			14.2				2.6				—				12.8				8.5
Inventories			20.3				103.9				.1				10.2				5.5
Other current assets			.2				—				—				.5				.4
Property			8.1				469.8				.8				25.6				39.1
Goodwill			14.8				1,794.8				10.6				47.3				57.6
Other intangible assets			16.7				946.8				—				55.4				83.5
Other assets			—				—				—				.2				15.2
Total assets acquired			74.3				3,391.2				11.5				153.5				209.9
Accounts payable			(10.4	)			—				—				(13.7	)			(11.0	)
Other current liabilities			(4.6	)			(17.0	)			(.7	)			(1.4	)			(3.2	)
Long-term debt			—				(964.5	)			—				—				—
Deferred income taxes			—				(448.0	)			—				—				5.0
Other liabilities			(.1	)			(74.0	)			(.4	)			(.8	)			(15.2	)
Total liabilities assumed			(15.1	)			(1,503.5	)			(1.1	)			(15.9	)			(24.4	)
Net assets acquired		$	59.2			$	1,887.7			$	10.4			$	137.6			$	185.5

Fiscal 2009

     In a cash transaction on March 20, 2009, the Company acquired Harvest Manor Farms, LLC, a leading manufacturer of high quality private label and Hoody’s branded snack nuts with annual net sales of approximately $180. Harvest Manor Farms operates a manufacturing facility in El Paso, TX and is now part of Ralcorp’s Snacks, Sauces & Spreads segment. The assigned goodwill is deductible for tax purposes. The purchase price allocation included $16.5 of customer relationships and trademarks subject to amortization over a weighted average amortization period of approximately 13 years.

Fiscal 2008

     On August 4, 2008, the Company acquired Post Foods from Kraft Foods Inc. Ralcorp issued 30,465,318 shares of its common stock and assumed $964.5 of debt. For accounting purposes, the market price of the shares was assumed to be $58.70 per share, which was the average daily closing market price for three business days before and after the announcement of the acquisition (November 15, 2007). Post Foods, which is included in the Cereals segment, is the third-largest branded ready-to-eat cereal manufacturer in the U.S., with over 100 years of history in the industry. Post Foods operates manufacturing facilities in Battle Creek, MI, Modesto, CA, Jonesboro, AR, and Niagara Falls, ON (Canada). The assigned goodwill is not deductible for tax purposes. The purchase price allocation included $701.7 of brand related intangibles assigned indefinite useful lives as well as $245.1 of customer relationships, brand related intangibles, and other intangibles subject to amortization over a weighted average amortization period of approximately 20 years. Finished goods inventory acquired in the acquisition was valued essentially as if Ralcorp were a distributor purchasing the inventory. This resulted in a one-time allocation of purchase price to acquired inventory which was $23.4 higher than the historical manufacturing cost of the inventory. All of the $23.4 inventory valuation adjustment was recognized in cost of products sold during fiscal 2008. The Company is also incurring significant costs related to the transitioning of Post Foods into Ralcorp operations, which are expected to continue into fiscal 2010. During fiscal 2009, the Company completed its analyses of deferred income tax liabilities, property, identifiable intangibles, and other assets and liabilities acquired, and adjusted goodwill by a total of $80.9 (primarily due to a $77.9 reduction in estimated acquired deferred income tax liabilities).

Fiscal 2007

     On August 14, 2007, the Company acquired certain assets and lease obligations of Pastries Plus of Utah, Inc. in a cash transaction. Pastries Plus was a competing manufacturer of branded and private label thaw-and-sell cookies with annual gross sales of approximately $10. The business was integrated into the Lofthouse operations of the Frozen Bakery Products segment. The assigned goodwill is deductible for tax purposes.

     On March 16, 2007, the Company acquired Bloomfield Bakers and its affiliate, Lovin Oven L.L.C., in a cash transaction. Bloomfield Bakers, which is included in Ralcorp’s Cereals segment, is a leading manufacturer of nutritional and cereal bars and natural and organic specialty cookies, crackers, and cereals. The acquired business, which had net sales of $188 for its fiscal year ended December 31, 2006, operates two leased manufacturing facilities in Azusa and Los Alamitos, CA and employs approximately 500 people. The assigned goodwill is deductible for tax purposes. The purchase price allocation included $55.4 of customer relationships and other intangibles subject to amortization over a weighted average amortization period of approximately 8 years.

     On November 10, 2006, the Company acquired Cottage Bakery, Inc. in a cash transaction. Cottage Bakery, a leading manufacturer of frozen par-baked breads and frozen dough sold in the in-store bakery and foodservice channels, operates one manufacturing facility in Lodi, CA and employs approximately 690 people. For its fiscal year ended June 30, 2006, Cottage Bakery had gross sales of approximately $125. The acquired business, which enhanced Ralcorp’s existing frozen bakery offerings, is reported within the Frozen Bakery Products segment. The assigned goodwill is not deductible for tax purposes. The purchase price allocation included $83.5 of customer relationships and other intangibles subject to amortization over a weighted average amortization period of approximately 14 years.

Pro Forma Information

     The following unaudited pro forma information shows Ralcorp’s results of operations as if the fiscal 2009 and 2008 business combinations had been completed as of the beginning of each period presented. These pro forma results may not necessarily reflect the actual results of operations that would have been achieved, nor are they necessarily indicative of future results of operations.

		2009				2008
Net sales		$	3,977.8			$	3,918.6
Net earnings			290.9				253.4
Basic earnings per share			5.17				4.44
Diluted earnings per share			5.09				4.45

Goodwill

     The changes in the carrying amount of goodwill by reportable segment (see Note 19) were as follows:

						Frozen				Snacks,
						Bakery				Sauces
		Cereals				Products				& Spreads				Total
Balance, September 30, 2007		$	40.1			$	351.0			$	178.2			$	569.3
Goodwill acquired			1,875.7				—				—				1,875.7
Purchase price allocation adjustment			7.1				4.9				—				12.0
Currency translation adjustment			—				(2.7	)			—				(2.7	)
Balance, September 30, 2008		$	1,922.9			$	353.2			$	178.2			$	2,454.3
Goodwill acquired			—				—				14.8				14.8
Purchase price allocation adjustment			(80.9	)			—				—				(80.9	)
Income tax adjustments			—				(1.1	)			—				(1.1	)
Currency translation adjustment			(.3	)			(.2	)			—				(.5	)
Balance, September 30, 2009		$	1,841.7			$	351.9			$	193.0			$	2,386.6

NOTE 3 — RESTRUCTURING CHARGES

     In fiscal 2008, the Company closed its plant in Billerica, MA, and transferred the production to other facilities within the Snacks, Sauces & Spreads segment. In addition to employee termination benefits for approximately 90 employees, charges for this project included a write-off of abandoned property.

     In fiscal 2007, the Company closed its plant in Blue Island, IL, terminating 86 employees, and moved production to other facilities within the Frozen Bakery Products segment. In addition to employee termination benefits, charges for this project included costs to clean up the facility and a charge to write-off remaining inventories.

     There were no significant restructuring reserves at September 30, 2009 or 2008. The following table details the amounts included in the statements of earnings as “Restructuring charges” for fiscal 2009, 2008, and 2007, along with the corresponding cumulative charges for these restructuring projects through September 30, 2009. No significant future charges are expected for any of these projects.

		2009				2008				2007				Cumulative
Billerica — Employee termination benefits		$	—			$	1.1			$	—			$	1.1
Billerica — Write-off of abandoned property			—				.3				—				.3
Blue Island — Employee termination benefits			—				—				.7				.7
Blue Island — Other associated charges			.5				.3				.2				1.0
		$	.5			$	1.7			$	.9			$	3.1

NOTE 4 — INCOME TAXES

The provision for income taxes consisted of the following:

		2009				2008				2007
Current:
Federal		$	178.1			$	57.1			$	40.9
State			24.9				7.1				2.8
Foreign			(.2	)			.1				1.6
			202.8				64.3				45.3
Deferred:
Federal			(38.3	)			22.0				(34.0	)
State			(2.6	)			3.5				(3.0	)
Foreign			(5.0	)			(3.1	)			(.8	)
			(45.9	)			22.4				(37.8	)
Income taxes			156.9				86.7				7.5
Deferred income taxes on equity earnings			5.6				7.7				4.8
Total provision for income taxes		$	162.5			$	94.4			$	12.3

     The foreign deferred income taxes shown above include benefits of operating loss carryforwards of $10.5, $3.0, and $.5 in 2009, 2008, and 2007, respectively.

     A reconciliation of income taxes with amounts computed at the statutory federal rate follows:

		2009				2008				2007
Computed tax at federal statutory rate (35%)		$	158.5			$	91.7			$	15.7
State income taxes, net of federal tax benefit			17.7				7.9				.1
Domestic production activities deduction			(7.2	)			(2.8	)			(1.1	)
Adjustments to reserve for uncertain tax positions			.4				(.2	)			(1.9	)
Other, net (none in excess of 5% of computed tax)			(6.9	)			(2.2	)			(.5	)
		$	162.5			$	94.4			$	12.3

     Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets (liabilities) were as follows:

		September 30, 2009												September 30, 2008
		Assets				Liabilities				Net				Assets				Liabilities				Net
Current:
Accrued liabilities		$	9.2			$	—			$	9.2			$	9.2			$	—			$	9.2
Inventories			.1				—				.1				6.4				—				6.4
Other items			1.3				—				1.3				.9				—				.9
			10.6				—				10.6				16.5				—				16.5
Noncurrent:
Property			—				(158.3	)			(158.3	)			—				(223.8	)			(223.8	)
Intangible assets			—				(417.4	)			(417.4	)			—				(414.4	)			(414.4	)
Equity investment in Vail			—				—				—				—				(39.0	)			(39.0	)
Forward sale contracts			—				—				—				2.0				—				2.0
Pension			18.9				—				18.9				6.4				—				6.4
Other postretirement benefits			35.1				—				35.1				32.9				—				32.9
Deferred compensation			13.0				—				13.0				10.4				—				10.4
Insurance reserves			7.6				—				7.6				8.1				—				8.1
NOL and tax credit carryforwards			17.5				—				17.5				8.4				—				8.4
Other items			21.3				—				21.3				11.7				(.6	)			11.1
			113.4				(575.7	)			(462.3	)			79.9				(677.8	)			(597.9	)
Total deferred taxes			124.0				(575.7	)			(451.7	)			96.4				(677.8	)			(581.4	)
Valuation allowance (noncurrent)			(2.3	)							(2.3	)			(3.7	)							(3.7	)
Net deferred taxes		$	121.7			$	(575.7	)		$	(454.0	)		$	92.7			$	(677.8	)		$	(585.1	)

     As of September 30, 2009, the Company had state operating loss carryforwards totaling approximately $11.3, of which approximately $1.4 will expire in 2011-2013 and $9.9 will expire in 2023-2029, and foreign operating loss carryforwards totaling approximately $44.1, which will expire in 2025-2029. As of September 30, 2009, the Company had state tax credit carryforwards totaling approximately $2.0, of which approximately $1.6 have no expiration date and the remainder will expire in 2016-2023. Due to the uncertainty of the realization of certain tax carryforwards (specifically due to a lack of evidence that sufficient taxable income would be generated in certain states), the Company carried a valuation allowance against these carryforward benefits in the amount of $1.8 as of September 30, 2008 and $1.7 as of September 30, 2007), which was management’s estimate of the amount of deferred tax assets that were not more likely than not to be realized. Based on significant increases in taxable income generated in the related states during the year and expected for future years, the Company reduced this portion of its valuation allowance to zero as of September 30, 2009.

     For fiscal 2009, 2008, and 2007, total foreign source earnings or loss before income taxes was less than $5.0. As of September 30, 2009, no provision for income taxes was made for approximately $19.1 of the cumulative undistributed earnings of one of the Company’s Canadian subsidiaries (other than approximately $1.5 of Canadian withholding taxes paid), because those earnings are not taxable in Canada (except for the withholding tax required by treaty) and would become taxable in the U.S. only to the extent that they are repatriated in the future. Since the Company considers the undistributed earnings to be permanently invested in Canada, the related deferred tax liability (which is estimated to be approximately $6.7 as of September 30, 2009) has not been recorded, and a valuation allowance was recorded against the foreign tax credit for the cumulative Canadian taxes paid of $2.3, $1.8, and $1.0 as of September 30, 2009, 2008, and 2007, respectively.

     The Company adopted the provisions of ASC 740, “Income Taxes,” related to unrecognized tax benefits as of October 1, 2007. Unrecognized tax benefits at that date and related accrued interest totaled approximately $1.8. Minor adjustments reduced the total amount to approximately $1.6 at September 30, 2008 and then increased it to approximately $2.0 at September 30, 2009, all of which would affect the effective tax rate if recognized. Federal returns for tax years after September 30, 2006 remain subject to examination, along with various state returns for the past two to seven years and Canadian returns for the past three years. Two state uncertainties are currently being addressed with the state taxing authority and are expected to be resolved within the next 12 months. Related unrecognized tax benefits totaling approximately $1.2 were classified as “Other current liabilities” on the balance sheet as of September 30, 2009, while approximately $.8 of unrecognized tax benefits were classified in “Other Liabilities.”

NOTE 5 — EQUITY INVESTMENT IN VAIL RESORTS, INC.

     On January 3, 1997, the Company sold its ski resorts holdings (Resort Operations) to Vail Resorts, Inc. (Vail) in exchange for 7,554,406 shares of Vail common stock (NYSE:MTN). In March 2006, the Company sold 100,000 of its shares of Vail Resorts for a total of $3.8. The shares had a carrying value of $1.2, so the transaction resulted in a $2.6 pre-tax gain. In August and September 2008, the Company sold and additional 368,700 shares for a total of $13.7. The shares had a carrying value of $6.6, so the transaction resulted in a $7.1 pre-tax gain. During 2009, the Company sold its remaining 7,085,706 shares (including those subject to forward sale contracts, as discussed in Note 6) for a total of $211.9. The shares had a carrying value of $141.3, so the transactions resulted in a $70.6 gain. The Company held no shares of Vail Resorts at September 30, 2009. As of September 30, 2008, the carrying value of the Company’s investment in Vail was $126.0 and the corresponding market value was $247.6.

     Vail’s fiscal year ends July 31, so the Company reports equity earnings on a two-month time lag. The Company’s ownership percentage was 20.2% as of July 31, 2008. Until June 2009, the equity method of accounting was appropriate because we had significant influence over Vail due to our ownership percentage and the fact that two of the Company’s directors (Messrs. Micheletto and Stiritz) served as directors of Vail.

     On January 3, 1997, the date of the exchange, the Company’s equity interest in the underlying net assets of Vail exceeded the net book value of the net assets contributed by the Company to Vail by $37.5. This excess was being amortized ratably to the investment in Vail over an estimated 20 years and was reduced proportionally by sales of shares. The unamortized excess was $14.5 as of September 30, 2008. The amount of retained earnings that represented undistributed earnings of Vail was $49.0 as of September 30, 2008.

     Vail’s summarized financial information follows:

		Year Ended				Year Ended				Year Ended
		July 31, 2009				July 31, 2008				July 31, 2007
Net revenues		$	977.0			$	1,152.2			$	940.5
Total operating expenses			870.9				976.2				812.3
Income from operations		$	106.1			$	176.0			$	128.2
Net income		$	49.0			$	102.9			$	61.4
		July 31, 2009				July 31, 2008
Current assets		$	229.0			$	358.9
Noncurrent assets			1,655.5				1,567.1
Total assets		$	1,884.5			$	1,926.0
Current liabilities		$	251.4			$	367.0
Noncurrent liabilities			837.0				800.3
Minority interest			30.8				29.9
Stockholders’ equity			765.3				728.8
Total liabilities and stockholders’ equity		$	1,884.5			$	1,926.0

NOTE 6 — FORWARD SALE CONTRACTS

     During the quarter ended December 31, 2005, Ralcorp entered into a forward sale contract relating to 1.78 million shares of its Vail common stock with maturity dates of November 21, 2008 and November 22, 2010. During the quarter ended June 30, 2006, the Company entered into a similar agreement relating to 1.97 million additional shares, with maturity dates of November 18, 2009 and November 16, 2011. A third contract was entered into during the quarter ended December 31, 2006, relating to 1.2 million additional shares, with a maturity date of November 15, 2013. Ralcorp received $50.5, $60.0, and $29.5, respectively, under the discounted advance payment feature of the contracts. Amortization of the corresponding $11.0, $15.5, and $17.6 discounts is included in “Interest expense, net” on the statements of earnings and totaled $5.1 in 2009 and $8.7 in 2008. On November 21, 2008, the first tranche of the initial contract was settled and Ralcorp delivered 890,000 shares, and on June 4, 2009, all remaining contracts were settled and Ralcorp delivered 3,503,263 shares. The components of the total liability are shown in the following table.

		Value of				Accumulated				Total
		Advance				(Gain) Loss				Contract
		Proceeds				on Derivative				Liability
Advance proceeds received		$	140.0			$	—			$	140.0
Amortization of discount			20.7				—				20.7
Gain on derivative component			—				(15.7	)			(15.7	)
Balance at September 30, 2008		$	160.7			$	(15.7	)		$	145.0
Amortization of discount			5.1				—				5.1
Gain on derivative component			—				(20.6	)			(20.6	)
Contract settlement			(165.8	)			36.3				(129.5	)
Balance at September 30, 2009		$	—			$	—			$	—

     The forward sale agreements had a dual nature and purpose. The advance proceeds component acted as a financing arrangement collateralized by the underlying Vail shares. The derivative component, which was based on a price collar on Vail shares, acted as a hedge of the future sale of the underlying shares. Because Ralcorp accounted for its investment in Vail Resorts using the equity method, these contracts were not eligible for hedge accounting. Therefore, any gains or losses on the contracts, whether realized or unrealized, were immediately recognized in earnings.

NOTE 7 — EARNINGS PER SHARE

     The following schedule shows common stock options and stock appreciation rights (SARs) which were outstanding and could potentially dilute basic earnings per share in the future but which were not included in the computation of diluted earnings per share for the periods indicated because to do so would have been antidilutive. See Note 18 for more information about outstanding options and SARs.

		First				Second				Third				Fourth
		Quarter				Quarter				Quarter				Quarter
Fiscal 2009
SARs at $56.56 per share			435,000				435,000				405,000				—
SARs at $66.07 per share			538,000				538,000				508,000				503,500
SARs at $65.45 per share			25,000				25,000				25,000				25,000
SARs at $58.79 per share			—				—				8,000				8,000
Fiscal 2008
SARs at $56.56 per share			435,000				435,000				435,000				435,000
Fiscal 2007
Stock options at $35.31 per share		10,281					—				—				—
Stock options at $45.25 per share		152,000					—				—				—
SARs at $48.99 per share			435,000				—				435,000				—
SARs at $56.56 per share			—				—				—				457,500

NOTE 8 — SUPPLEMENTAL EARNINGS STATEMENT AND CASH FLOW INFORMATION

		2009				2008				2007
Repair and maintenance expenses		$	104.1			$	71.0			$	68.3
Advertising and promotion expenses			133.4				28.1				12.8
Research and development expenses			19.2				11.5				10.2
Interest paid			98.7				38.6				31.7
Income taxes paid, net of refunds			192.6				50.0				43.1
Cash received from the exercise of stock options			8.4				2.8				3.3
Tax benefits realized from exercised stock options and similar awards			6.8				1.1				2.2

NOTE 9 — SUPPLEMENTAL BALANCE SHEET INFORMATION

		September 30,
		2009				2008
Receivables, net
Trade		$	122.2			$	140.7
Other			15.7				19.8
			137.9				160.5
Allowance for doubtful accounts			(2.0	)			(.4	)
		$	135.9			$	160.1
Inventories
Raw materials and supplies		$	152.4			$	135.2
Finished products			217.0				204.4
			369.4				339.6
Allowance for obsolete inventory			(3.5	)			(2.6	)
		$	365.9			$	337.0
Accounts and Notes Payable
Trade		$	147.6			$	134.6
Book cash overdrafts			65.4				36.7
Other items			27.4				33.4
		$	240.4			$	204.7
Other Current Liabilities
Advertising and promotion		$	52.0			$	50.8
Compensation			49.8				34.5
Current portion of forward sale contracts			—				29.3
Current portion of long-term debt			45.6				.3
Other items			77.6				72.3
		$	225.0			$	187.2
Other Liabilities
Forward sale contracts		$	—			$	115.7
Other items			191.6				154.4
		$	191.6			$	270.1

NOTE 10 — SALE OF RECEIVABLES

     To provide additional liquidity, on September 24, 2001 the Company entered into an agreement to sell, on an ongoing basis, trade accounts receivable to a wholly owned, bankruptcy-remote subsidiary named Ralcorp Receivables Corporation (RRC). As of September 30, 2009, the accounts receivable of the Western Waffles, Cottage Bakery, Medallion, Bloomfield Bakers, Post Foods, and Harvest Manor businesses have not been incorporated into the sale agreement and were not being sold to RRC. RRC can then sell up to $75.0 of ownership interests in qualifying receivables to a bank commercial paper conduit, which issues commercial paper to investors. Ralcorp continues to service the receivables as agent for RRC and the bank conduit. RRC is a qualifying special purpose entity under ASC Topic 860, and the sale of Ralcorp receivables to RRC is considered a true sale for accounting, tax, and legal purposes. Therefore, the trade receivables sold and the related commercial paper borrowings are not recorded on Ralcorp’s consolidated balance sheets. However, the Company’s consolidated balance sheets reflect an investment in RRC that in substance represents a subordinated retained interest in the trade receivables sold. As of September 30, 2009, the outstanding balance of receivables (net of an allowance for doubtful accounts) sold to RRC was $134.4 and the Company elected not to sell any to the conduit, resulting in a retained interest of $134.4 reflected on the Company’s consolidated balance sheet as an “Investment in Ralcorp Receivables Corporation.” As of September 30, 2008, the outstanding balance of receivables sold to RRC was $106.5 and proceeds received from the conduit were $50.0, resulting in a retained interest of $56.5. Discounts related to the sale of receivables to the conduit totaled $.5 and $1.9 for the years ended September 30, 2009 and September 30, 2008 respectively, and are included on the statements of earnings in “Selling, general and administrative expenses”. The agreement contains cross-default language so that an event of default under any agreement governing “Material Indebtedness” of the Company would trigger an “Amortization Event” (each term as defined in the agreement).

NOTE 11 — ALLOWANCES FOR DOUBTFUL ACCOUNTS AND OBSOLETE INVENTORY

		2009				2008				2007
Allowance for Doubtful Accounts
Balance, beginning of year		$	.4			$	.6			$	.4
Provision charged to expense			2.1				(.4	)			—
Write-offs, less recoveries			—				(.1	)			(.2	)
Acquisitions			.1				—				.2
Transfers to Ralcorp Receivables Corporation			(.6	)			.3				.2
Balance, end of year		$	2.0			$	.4			$	.6
Allowance for Obsolete Inventory
Balance, beginning of year		$	2.6			$	2.2			$	3.1
Provision charged to expense			8.5				8.1				4.9
Write-offs of inventory			(8.1	)			(7.7	)			(6.2	)
Acquisitions			.5				—				.4
Balance, end of year		$	3.5			$	2.6			$	2.2

NOTE 12 — DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING

     In the ordinary course of business, the Company is exposed to commodity price risks related to the acquisition of raw materials and supplies, interest rate risks related to debt, and foreign currency exchange rate risks related to our Canadian subsidiaries. Authorized individuals within the Company may utilize derivative financial instruments, including (but not limited to) futures contracts, option contracts, forward contracts and swaps, to manage certain of these exposures by hedging when it is practical to do so. The terms of these instruments generally do not exceed eighteen months for commodities, five years for interest rates, and two years for foreign currency. The Company is not permitted to engage in speculative or leveraged transactions and will not hold or issue financial instruments for trading purposes.

     As of September 30, 2009, the Company’s derivative instruments consisted of cash flow and fair value hedges on ingredients purchases (options, futures, and swaps) and cash flow hedges on variable interest payments (interest rate swap); and receipts of foreign currency-denominated accounts receivable (foreign exchange forward contracts). The Company hedges approximately 65% to 90% of our needs related to oats, wheat, corn, soybean oil, natural gas, and diesel fuel and 40% to 70% of our corrugate packaging needs over a six to twelve month period. Floating rate notes totaling $50.0 are swapped to fixed at 4.76% through December 2009. At September 30, 2009, the Company held foreign exchange forward contracts with a total notional amount of $48.0. During the past several years, the Company was party to forward sale contracts relating to some of its shares of Vail Resorts, Inc. common stock which were not designated as hedging instruments and which were settled in June 2009 (see Note 6).

     The following table shows the fair value and Balance Sheet location of the Company’s derivative instruments as of September 30, 2009, all of which were designated as hedging instruments under ASC Topic 815.

						Fair
		Balance Sheet Location				Value
Liability Derivatives:
Commodity contracts		Other current liabilities				$	7.8
Interest rate contracts		Other current liabilities					.4
						$	8.2
Asset Derivatives:
Foreign exchange contracts		Prepaid expenses and other current assets				$	7.8
Commodity contracts		Prepaid expenses and other current assets					.2
						$	8.0