RELATED PARTY TRANSACTIONS

ConAgra Foods’ executive, finance, tax and other corporate departments have historically performed services for the ConAgra Agricultural Products Business, and, pursuant to the Transition Services Agreement described in “Certain Relationships and Related Transactions—Ancillary Agreements” beginning on page 107, will continue to perform certain administrative and other services for us. Expenses incurred by ConAgra Foods and allocated to the ConAgra Agricultural Products Business were historically determined based on the specific services that were provided or were allocated based on ConAgra Foods’ investment in the ConAgra Agricultural Products Business in proportion to ConAgra Foods’ total investment in its subsidiaries. In addition, ConAgra Foods charged the ConAgra Agricultural Products Business finance charges on ConAgra Foods’ investment in and advances to the ConAgra Agricultural Products Business. We believe that such expense allocations were reasonable. It is not practical to estimate the expenses that would have been incurred by the ConAgra Agricultural Products Business if it had been operated on a stand-alone basis. Corporate allocations for the thirteen weeks ended May 25, 2003 totaled $7.2 million, of which $3.1 million represented selling, general and administrative charges and $4.1 million represented finance charges.

As part of the Acquisition, we entered into a transition services agreement with ConAgra Foods in which ConAgra Foods would provide certain information technology and other administrative services to us for a period of one year. As consideration for these services, we paid ConAgra Foods $7.5 million. For the fourteen- week period ended May 30, 2004, $1.9 million in expense was recognized by us for services performed pursuant to this agreement.

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Under the terms of our Management Agreement (as defined in “Certain Relationships and Related Transactions—Ancillary Agreements—Apollo Management Consulting Agreement” beginning on page 112), we retained Apollo to provide certain management consulting and financial advisory services, for which we pay Apollo an annual management fee of $1.0 million in quarterly payments of $250,000. In addition, as consideration for arranging the Acquisition and services pertaining to certain related financing transactions, we paid Apollo a fee of $5.0 million in January 2004, which was accounted for as part of the Acquisition.

MARKET RISK

The principal market risk affecting our business has been exposure to changes in energy prices and, to a lesser extent, foreign currency risks. We are currently exposed to market risks including exposure to changes in energy prices, with respect to which we currently pay market rates. As a result of the Acquisition and the Transactions, we are also and will continue to be subject to interest rate risk. Based upon the amounts outstanding under the existing revolving credit facility, on a pro forma basis after consummation of the Transactions as of May 30, 2004, a one percentage point change in the assumed weighted average interest rate on such credit facility would change our annual pro forma interest expense by $1.5 million.

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