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The cash flows related to the above financial instruments are classified in the Statements
of Cash Flows in a manner consistent with those of the transactions being hedged.
Recently Issued Accounting Standards: In June 1998, the Financial Accounting Standards
Board (the ‘‘FASB’’) issued Statement of Financial Accounting Standards (‘‘SFAS’’) No. 133,
‘‘Accounting for Derivative Instruments and Hedging Activities.’’ This statement establishes
accounting and reporting standards for derivative instruments. The statement requires
that an entity recognize all derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. In June 1999, the FASB issued SFAS
No. 137, ‘‘Accounting for Derivative Instruments and Hedging Activities – Deferral of the
Effective Date of FAS Statement 133,’’ which postponed the adoption date of SFAS No. 133.
As such, the company is not required to adopt the statement until Fiscal 2002. In June 2000,
the FASB issued SFAS No. 138, ‘‘Accounting for Certain Derivative Instruments and Certain
Hedging Activities – an Amendment of FASB Statement No. 133.’’ This statement amends the
accounting and reporting standards of SFAS No. 133 for certain derivative instruments and
certain hedging activities. The company is currently evaluating the effect that implementation
of the new standard will have on its results of operations and financial position.
In May 2000, the FASB Emerging Issues Task Force (the ‘‘EITF’’) issued new guidelines
entitled ‘‘Accounting for Certain Sales Incentives’’ which address the recognition, measurement
and income statement classification for certain sales incentives (e.g., coupons). These
guidelines will be effective for the company beginning in the second quarter of Fiscal 2001.
The implementation of these guidelines will require the company to make reclassifications
between selling, general and administrative expenses (‘‘SG&A’’) and sales.
In December 1999, the Securities and Exchange Commission (the ‘‘SEC’’) issued Staff
Accounting Bulletin (‘‘SAB’’) No. 101, ‘‘Revenue Recognition in Financial Statements.’’
SAB No. 101 provides guidance on the recognition, presentation and disclosure of revenue
in financial statements filed with the SEC. SAB No. 101 outlines the basic criteria that must be
met to recognize revenue and provides guidance for disclosure related to revenue recognition
policies. Management believes that the impact of SAB No. 101, which will be effective in the
fourth quarter of Fiscal 2001, will not have a material effect on its financial position or results
of operations.
2. ACQUISITIONS All of the following acquisitions have been accounted for as purchases and, accordingly, the
respective purchase prices have been allocated to the respective assets and liabilities based
upon their estimated fair values as of the acquisition date. Operating results of businesses
acquired have been included in the Consolidated Statements of Income from the respective
acquisition dates forward. Pro forma results of the company, assuming all of the following
acquisitions had been made at the beginning of each period presented, would not be
materially different from the results reported.
Fiscal 2000: The company acquired businesses for a total of $404.9 million, including
obligations to sellers of $10.4 million. The preliminary allocations of the purchase price resulted
in goodwill of $153.4 million and trademarks and other intangible assets of $134.8 million,
which are being amortized on a straight-line basis over periods not exceeding 40 years. Final
allocation of the purchase price is not expected to differ significantly from the preliminary
allocations and is expected to be completed in Fiscal 2001.
On December 7, 1999, the company completed the acquisition of United Biscuit’s European
Frozen and Chilled Division, one of the leading frozen food businesses in the U.K. and
Ireland, which produces frozen desserts and vegetarian/meat-free products, frozen pizzas,
frozen value-added potato products and fresh sandwiches. Also during Fiscal 2000, the
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