For U.S. federal income tax purposes, the aggregate tax basis of the Ralcorp common stock received in the merger, including any fractional share interests with respect to which cash was received in lieu of shares, should equal the aggregate tax basis in the Kraft common stock tendered and exchanged in the exchange offer and the holding period of the Ralcorp common stock received by each Kraft common stock holder should include the period during which the Kraft common stock tendered and exchanged in the exchange offer was held. If all of the exchanged Kraft shares had the same tax basis and holding period, such basis generally should be allocated pro rata among the Ralcorp shares received in the merger, including any fractional share interests for which cash was received in lieu of shares, and the Ralcorp shares should each have the same holding period.

For example, if you owned 1,000 shares of KFT that were all acquired on the same day at the same price with a cost basis of $30,000 ($30 per share), and you tendered all your shares, since the exchange was subject to proration, you would have exchanged 8.0255%* of your tendered KFT holdings, or 80 shares of KFT. Your 80 shares of Kraft would be exchanged for 52.848 shares of RAH (80 multiplied by 0.6606 exchange ratio), of which the 0.848 fractional share would be paid to you in cash. Since you exchanged 8.0% of your holdings, then 8.0% of your cost basis in your KFT shares is assigned to the RAH shares received, including any fractional shares. In this example, your newly received RAH shares (including fractional shares) would have a basis of $2,400 (8.0% multiplied by $30,000), and your remaining KFT shares would have a basis of $27,600 (92.0% multiplied by $30,000). Based on this example, your RAH shares would have a basis of $45.41 per share ($2,400 divided by 52.848 shares), which means your fractional share has a basis of $38.51 (0.848 multiplied by $45.41).

If you tendered KFT shares that were acquired at different prices so that all of such shares do not have the same cost basis or on different dates so that all of such shares do not have the same holding period, please consult your tax advisor as to proper method of allocating your basis among the RAH shares received and as to the proper method of determining your holding period for such RAH shares.

The above information is for general reference and you should consult your own tax advisor as the particular federal, state, local and foreign tax consequences of the exchange offer and merger to you, including the proper allocation of basis among the shares received in the transaction."

* Revised as of 9/18/08 to reflect a typographical error in the pro ration factor.