<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q



       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED OCTOBER 5, 2002

                         COMMISSION FILE NUMBER: 1-8140

                             FLEMING COMPANIES, INC.
             (Exact name of registrant as specified in its charter)

                OKLAHOMA                            48-0222760
        (State of incorporation)                  (I.R.S. Employer
                                                 Identification No.)

                              1945 LAKEPOINTE DRIVE
                             LEWISVILLE, TEXAS 75029
                    (Address of principal executive offices)

                                 (972) 906-8000
                               (Telephone number)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes  X  No
    ---    ---


On October 31, 2002, 54,501,000 shares of the registrant's common stock, par
value $2.50 per share, were outstanding.

<PAGE>


                                TABLE OF CONTENTS



PART I.  FINANCIAL INFORMATION:

  Item 1.        Financial Statements

                      Condensed Consolidated Statements of Operations - 12 Weeks
                        Ended October 5, 2002, and October 6, 2001

                      Condensed Consolidated Statements of Operations - 40 Weeks
                        Ended October 5, 2002, and October 6, 2001

                      Condensed Consolidated Balance Sheets -
                        October 5, 2002, and December 29, 2001

                      Condensed Consolidated Statements of Cash Flows -
                        40 Weeks Ended October 5, 2002, and October 6, 2001

                      Notes to Condensed Consolidated Financial Statements

                      Independent Accountants' Review Report

  Item 2.        Management's Discussion and Analysis of
                      Financial Condition and Results of Operations

  Item 3.        Quantitative and Qualitative Disclosures
                      About Market Risk

  Item 4.        Controls and Procedures

PART II. OTHER INFORMATION:

  Item 1.        Legal Proceedings

  Item 6.        Exhibits and Reports on Form 8-K

  SIGNATURE



                                       2
<PAGE>


                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
FOR THE 12 WEEKS ENDED OCTOBER 5, 2002 AND OCTOBER 6, 2001
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
--------------------------------------------------------------------------------

<Table>
<Caption>
                                                       2002              2001
                                                   ------------      ------------
<S>                                                <C>               <C>
Net sales                                          $  3,972,649      $  3,531,640
Costs and expenses:
    Cost of sales                                     3,832,189         3,375,247
    Selling and administrative                          114,042           107,614
    Interest expense                                     34,267            27,110
    Interest income and other                            (5,451)           (4,795)
    Impairment/restructuring credit                          --              (609)
                                                   ------------      ------------
        Total costs and expenses                      3,975,047         3,504,567
                                                   ------------      ------------

    Income (loss) before income taxes                    (2,398)           27,073
    Taxes on income (loss)                                 (928)           10,565
                                                   ------------      ------------
    Income (loss) from continuing operations             (1,470)           16,508
                                                   ------------      ------------
Discontinued operations:
    Income (loss) before income taxes                   (31,624)            4,209
    Taxes on income (loss)                              (12,238)            1,642
                                                   ------------      ------------
    Income (loss) from discontinued operations          (19,386)            2,567
                                                   ------------      ------------

Net income (loss)                                  $    (20,856)     $     19,075
                                                   ============      ============

Basic income (loss) per share:
    Continuing operations (net of taxes)           $      (0.03)     $       0.38
    Discontinued operations (net of taxes)                (0.36)             0.06
                                                   ------------      ------------
    Net income (loss)                              $      (0.39)     $       0.44
                                                   ------------      ------------

Diluted income (loss) per share:
    Continuing operations (net of taxes)           $      (0.03)     $       0.35
    Discontinued operations (net of taxes)                (0.36)             0.05
                                                   ------------      ------------
    Net income (loss)                              $      (0.39)     $       0.40
                                                   ------------      ------------

Dividends paid per share                           $       0.02      $       0.02

Weighted average shares outstanding:
    Basic                                                53,950            43,728
    Diluted                                              53,950            51,032
                                                   ============      ============
</Table>


The accompanying notes are an integral part of these condensed consolidated
financial statements.


                                       3
<PAGE>

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
FOR THE 40 WEEKS ENDED OCTOBER 5, 2002 AND OCTOBER 6, 2001
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
--------------------------------------------------------------------------------

<Table>
<Caption>
                                                       2002              2001
                                                   ------------      ------------
<S>                                                <C>               <C>
Net sales                                          $ 11,425,643      $  9,767,863
Costs and expenses:
    Cost of sales                                    10,939,960         9,301,171
    Selling and administrative                          312,270           329,937
    Interest expense                                    110,501            96,893
    Interest income and other                           (20,254)          (19,768)
    Impairment/restructuring charges                     27,361            10,411
    Litigation charges                                       --            48,628
                                                   ------------      ------------
        Total costs and expenses                     11,369,838         9,767,272
                                                   ------------      ------------

    Income before income taxes                           55,805               591
    Taxes on income                                      21,456               236
                                                   ------------      ------------
    Income from continuing operations                    34,349               355
                                                   ------------      ------------
Discontinued operations:
    Income (loss) before income taxes                   (33,207)           35,314
    Taxes on income (loss)                              (12,701)           14,586
                                                   ------------      ------------
    Income (loss) from discontinued operations          (20,506)           20,728
                                                   ------------      ------------
Income before extraordinary charge                       13,843            21,083

Extraordinary charge from early retirement
    of debt, net of taxes                                (7,863)           (3,469)
                                                   ------------      ------------
Net income                                         $      5,980      $     17,614
                                                   ============      ============

Basic income (loss) per share:
    Continuing operations (net of taxes)           $       0.71      $       0.01
    Discontinued operations (net of taxes)                (0.43)             0.49
                                                   ------------      ------------
    Income before extraordinary charge                     0.28              0.50
    Extraordinary charge from early retirement
      of debt, net of taxes                               (0.16)            (0.08)
                                                   ------------      ------------
    Net income                                     $       0.12      $       0.42
                                                   ============      ============

Diluted income (loss) per share:
    Continuing operations (net of taxes)           $       0.70      $       0.01
    Discontinued operations (net of taxes)                (0.42)             0.46
                                                   ------------      ------------
    Income before extraordinary charge                     0.28              0.47
    Extraordinary charge from early retirement
      of debt, net of taxes                               (0.16)            (0.08)
                                                   ------------      ------------
    Net income                                     $       0.12      $       0.39
                                                   ============      ============

Dividends paid per share                           $       0.06      $       0.06

Weighted average shares outstanding:
    Basic                                                48,065            42,177
    Diluted                                              49,240            44,670
                                                   ============      ============
</Table>


The accompanying notes are an integral part of these condensed consolidated
financial statements.


                                       4
<PAGE>

CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED
(IN THOUSANDS)
--------------------------------------------------------------------------------

<Table>
<Caption>
                                                                 OCTOBER 5,       DECEMBER 29,
ASSETS                                                              2002              2001
                                                                ------------      ------------
<S>                                                             <C>               <C>
Current assets:
     Cash and cash equivalents                                  $     20,694      $     17,325
     Receivables, net                                                701,247           568,197
     Inventories                                                   1,110,843           902,933
     Assets held for sale                                            615,782           571,352
     Other current assets                                             79,681            88,133
                                                                ------------      ------------
         Total current assets                                      2,528,247         2,147,940
Investments and notes receivable, net                                 81,502           105,651
Investment in direct financing leases                                 69,029            83,118

Property and equipment                                             1,078,555         1,213,188
Less accumulated depreciation
     and amortization                                               (490,208)         (559,669)
                                                                ------------      ------------
Net property and equipment                                           588,347           653,519
Deferred income taxes                                                 68,528           105,453
Other assets                                                         187,991           143,240
Goodwill, net                                                        696,830           415,772
                                                                ------------      ------------

Total assets                                                    $  4,220,474      $  3,654,693
                                                                ============      ============


LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
     Accounts payable                                           $    985,272      $    952,037
     Current maturities of long-term debt                              4,326            29,865
     Current obligations under capital leases                         15,866            15,913
     Liabilities held for sale                                       146,740           157,001
     Other current liabilities                                       230,642           228,949
                                                                ------------      ------------
         Total current liabilities                                 1,382,846         1,383,765
Long-term debt                                                     1,839,175         1,427,929
Long-term obligations under capital leases                           196,173           217,427
Other liabilities                                                    129,718           127,353

Commitments and contingencies

Shareholders' equity:
     Common stock, $2.50 par value per share                         136,270           111,095
     Capital in excess of par value                                  711,574           567,720
     Reinvested earnings (deficit)                                  (115,180)         (121,160)
     Accumulated other comprehensive income:
         Additional minimum pension liability                        (59,436)          (59,436)
         Cumulative foreign currency translation adjustment             (666)               --
                                                                ------------      ------------
         Total shareholders' equity                                  672,562           498,219
                                                                ------------      ------------

Total liabilities and shareholders' equity                      $  4,220,474      $  3,654,693
                                                                ============      ============
</Table>


The accompanying notes are an integral part of these condensed consolidated
financial statements.


                                       5
<PAGE>


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
FOR THE 40 WEEKS ENDED OCTOBER 5, 2002, AND OCTOBER 6, 2001
(IN THOUSANDS)
--------------------------------------------------------------------------------

<Table>
<Caption>
                                                                2002            2001
                                                             ----------      ----------
<S>                                                          <C>             <C>
Cash flows from operating activities:
     Net income                                              $    5,980      $   17,614
     Adjustments to reconcile net income to
        net cash provided by operating activities:
        Depreciation and amortization                           123,926         126,127
        Amortization costs in interest expense                    6,598           4,929
        Credit losses                                             8,797          20,462
        Impairment/restructuring and related charges,
           net of impairment credit (not in other lines)         27,361          14,637
        Cash payments on impairment/restructuring
           and related charges                                  (21,669)        (58,450)
        Cost of early debt retirement                            13,119           5,787
     Change in assets and liabilities,
       excluding effect of acquisitions:
        Receivables                                              11,000         (63,321)
        Inventories                                             (69,962)       (217,352)
        Accounts payable                                       (104,882)         65,898
        Other assets and liabilities                           (117,873)        (61,048)
                                                             ----------      ----------
Net cash used in operating activities                          (117,605)       (144,717)
                                                             ----------      ----------
Cash flows from investing activities:
     Collections on notes receivable                             32,127          24,375
     Notes receivable funded                                    (14,225)        (20,704)
     Purchases of businesses, net of cash received             (295,058)       (120,670)
     Purchases of property and equipment                       (150,779)       (168,504)
     Proceeds from sale of property and equipment               164,268          13,286
     Proceeds from sale of businesses                                --         120,947
     Other investing activities                                  18,277          13,597
                                                             ----------      ----------
Net cash used in investing activities                          (245,390)       (137,673)
                                                             ----------      ----------
Cash flows from financing activities:
     Change in revolver                                        (140,000)        120,000
     Proceeds from long-term borrowings                         880,940         500,602
     Payments on long-term debt                                (489,047)       (342,755)
     Payments on capital issuance and debt retirement           (45,976)        (23,976)
     Principal payments on capital lease obligations            (15,408)        (15,092)
     Proceeds from sale of common stock                         178,703          59,252
     Dividends paid                                              (2,848)         (2,530)
                                                             ----------      ----------
Net cash provided by financing activities                       366,364         295,501
                                                             ----------      ----------

Net change in cash and cash equivalents                           3,369          13,111
Cash and cash equivalents, beginning of period                   17,325          30,380
                                                             ----------      ----------
Cash and cash equivalents, end of period                     $   20,694      $   43,491
                                                             ==========      ==========
Supplemental information:
     Cash paid for interest                                  $  139,462      $  122,484
     Cash refunded for income taxes                          $  (29,448)     $  (17,894)
                                                             ==========      ==========
</Table>


The accompanying notes are an integral part of these condensed consolidated
financial statements.

                                       6
<PAGE>


FLEMING COMPANIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)


1. BASIS OF PRESENTATION

The preceding condensed consolidated financial statements of Fleming Companies,
Inc. have been prepared by us, without audit. In our opinion, all adjustments,
which consist of normal recurring adjustments, except as disclosed, necessary to
present fairly our financial position, results of operations and cash flows for
the periods presented have been made. These financial statements should be read
in conjunction with the audited financial statements and notes thereto included
in our Fiscal 2001 Annual Report on Form 10-K and Form 10-K/A.

The preparation of the condensed consolidated financial statements in conformity
with accounting principles generally accepted in the United States requires us
to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.

Certain prior period amounts have been reclassified to conform to the current
period classifications, including the reclassification of net sales and cost of
goods due to the adoption of EITF 01-9 in the first quarter of 2002. In 2002 and
2001, the effect of the decrease to both sales and cost of sales on the 12 week
amounts was less than $21 million and the effect on the 40 week amounts was less
than $63 million. This reclassification had no effect on gross margin or net
income. Prior period amounts have been reclassified for comparability.

During the third quarter of 2002, our Board approved a plan to divest our price
impact retail stores and we have reflected the operating results of the
component as discontinued operations in accordance with SFAS No. 144 -
Accounting for the Impairment or Disposal of Long-Lived Assets. As a result, we
will no longer be reporting multiple segments as our continuing operations are
all within one reportable segment. Prior period amounts have been reclassified
for comparability (see Footnote 4). Beginning with the third quarter of 2002,
our transfer pricing from distribution to retail will be recorded at market;
historically it has been recorded at cost.

In April 2002, the FASB issued SFAS No. 145 - Rescission of FASB Statements No.
4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections. We
had a refinancing transaction in the second quarter of 2002 that resulted in an
extraordinary charge (see Footnote 8). In 2003, this amount will be reclassified
to selling and administrative expense and taxes on income in accordance with
SFAS 145.

Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States have been condensed or omitted.


                                       7
<PAGE>


2. INVENTORY VALUATION

We use the LIFO method of inventory valuation for determining the cost of most
grocery and certain perishable inventories. The excess of current cost of LIFO
inventories over their stated value was $49.8 million ($14.8 million of which is
recorded in assets held for sale in current assets on the balance sheet) and
$46.4 million ($13.1 million of which is recorded in assets held for sale in
current assets on the balance sheet) at October 5, 2002 and December 29, 2001,
respectively.

3. EARNINGS PER SHARE

Both basic and diluted income (loss) per share from continuing operations are
computed based on income (loss) from continuing operations (adjusted for the
after-tax effect of interest expense relating to the 5 1/4% convertible senior
subordinated notes, if applicable) divided by weighted average shares as
appropriate for each calculation. Both basic and diluted income (loss) per share
from discontinued operations are based on income (loss) from discontinued
operations divided by weighted average shares as appropriate for each
calculation.

<Table>
<Caption>
(IN THOUSANDS, EXCEPT PER SHARE DATA)                   12 WEEKS ENDED                 40 WEEKS ENDED
                                                  --------------------------     --------------------------
                                                  OCTOBER 5,      OCTOBER 6,     OCTOBER 5,      OCTOBER 6,
                                                     2002            2001           2002            2001
                                                  ----------      ----------     ----------      ----------
<S>                                               <C>             <C>            <C>             <C>
Numerator:
Basic earnings (loss) from continuing
  operations before extraordinary charge          $   (1,470)     $   16,508     $   34,349      $      355
Basic earnings (loss) from discontinued
  operations before extraordinary charge             (19,386)          2,567        (20,506)         20,728
After-tax interest expense related to
  convertible debt                                        --           1,180             --              --
                                                  ----------      ----------     ----------      ----------
Diluted earnings (loss) before
  extraordinary charge                            $  (20,856)     $   20,255     $   13,843      $   21,083
                                                  ==========      ==========     ==========      ==========

Denominator:
Weighted average shares for
  basic earnings per share                            53,950          43,728         48,065          42,177
Effect of dilutive securities:
  Employee stock options                                  --           1,908            882           1,877
  Restricted stock compensation                           --             441            293             616
  Convertible debt securities                             --           4,955             --              --
                                                  ----------      ----------     ----------      ----------

    Dilutive potential common shares                      --           7,304          1,175           2,493
                                                  ----------      ----------     ----------      ----------

Weighted average shares for
  diluted earnings per share                          53,950          51,032         49,240          44,670
                                                  ==========      ==========     ==========      ==========
</Table>

For the 12 weeks ended October 5, 2002, we did not reflect 5.0 million of
weighted average shares or add back after-tax interest expense of $1.2 million
related to convertible debt due to


                                       8
<PAGE>


antidilution. We also did not reflect 0.2 million of weighted average shares for
both employee stock options and restricted stock compensation due to
antidilution. For the 40 weeks ended October 5, 2002 and October 6, 2001, we did
not reflect 5.0 million and 3.6 million, respectively, of weighted average
shares or add back after-tax interest expense of $4.0 million and $2.3 million,
respectively, related to convertible debt due to antidilution.

4. DISCONTINUED OPERATIONS

On September 24, 2002, the Board of Directors approved a plan to sell our price
impact retail grocery stores operating under the Rainbow and Food 4 Less
banners. The plan is based in part on our decision to focus on our core
distribution business. Results of operations of these stores represent a
component of our company and have been previously included in the retail
segment. The disposition of the retail stores is expected to occur in a series
of sales to multiple buyers beginning in the fourth quarter of 2002 and
completed in 2003. Expenses associated with support services that directly
support the retail operations have been reflected in discontinued operations.

As a result of the expected disposition, we have presented the associated assets
and liabilities of the component as held for sale in the accompanying
consolidated condensed balance sheets. We also have reflected the operating
results of the component as discontinued operations in the accompanying
consolidated condensed statements of operations.

The component's assets and liabilities classified as held for sale related to
discontinued operations as of October 5, 2002 and December 29, 2001 are as
follows:


<Table>
<Caption>
(In thousands)
                                                            October 5,     December 29,
Assets held for sale:                                          2002            2001
                                                            ----------     ------------
<S>                                                         <C>            <C>
  Current assets                                            $  150,387     $    133,417
  Property and equipment, net                                  288,901          266,136
  Other assets                                                 144,307          141,733
                                                            ----------     ------------
  Assets held for sale from discontinued operations            583,595          541,286

  Assets held for sale from impairment/restructuring
   charges (see Footnote 12)                                    32,187           30,066

                                                            ----------     ------------
  Total assets held for sale                                $  615,782     $    571,352
                                                            ==========     ============

Liabilities held for sale from discontinued operations:
  Current portion of capital lease obligations              $    6,240     $      5,497
  Accounts payable and accrued liabilities                      24,362           37,096
  Capital lease obligations                                    116,138          114,408

                                                            ----------     ------------
  Total liabilities held for sale                           $  146,740     $    157,001
                                                            ==========     ============
</Table>


                                       9
<PAGE>


Summary operating results for the component classified as discontinued
operations for the periods indicated below are as follows:

<Table>
<Caption>
(In thousands)                       12 Weeks Ended                      40 Weeks Ended
                              ------------------------------     ------------------------------
                               October 5,        October 6,       October 5,        October 6,
                                  2002              2001             2002              2001
                              ------------      ------------     ------------      ------------
<S>                           <C>               <C>              <C>               <C>
Net sales                     $    458,346      $    475,355     $  1,621,447      $  1,822,222

Income (loss) from
  discontinued operations     $    (19,386)     $      2,567     $    (20,506)     $     20,728
</Table>

5. COMPREHENSIVE INCOME

Our comprehensive income (loss) for the 12 and 40 weeks ended October 5, 2002,
totaled a loss of $22.2 million and income of $5.3 million, respectively, and
was comprised of reported net income (loss) and foreign currency translation
adjustment. Our comprehensive income for the 12 and 40 weeks ended October 6,
2001, totaled $19.1 million and $17.6 million, respectively, and was comprised
only of reported net income.

6. ACQUISITION OF CORE-MARK INTERNATIONAL, INC.

On June 18, 2002, we acquired Core-Mark International, Inc., a leading
piece-pick distributor to convenience stores and other retail customers in the
Western United States and Canada, for $217 million in cash (net of cash
acquired) and assumed its debt ($77 million of 11 3/8% senior subordinated notes
due 2003 and a $55 million accounts receivable securitization facility).
Core-Mark's 11 3/8% senior subordinated notes were called for redemption
immediately upon our acquisition. The $55 million accounts receivable
securitization facility was paid and terminated on July 18, 2002.

The acquisition was financed through our credit agreement along with the sale of
$200 million of 9 1/4% senior notes due 2010 and 9.2 million shares of common
stock (which grossed $178 million at $19.40 per share, and netted approximately
$170 million after the underwriting discount and other issuance costs). The
acquisition was accounted for under the purchase method, and the results of
Core-Mark have been included in our consolidated results from the date of
acquisition.

We have not finalized the allocation of the purchase price as of October 5,
2002. We have engaged a valuation firm to assist us in this process. Upon
completion of their work, we will adjust the preliminary purchase price
allocation in accordance with SFAS No. 141 - Business Combinations. The
estimation of this allocation, which is included as part of these financial
statements, is as follows: $31 million to property, plant and equipment, $49
million to working capital, $269 million to goodwill and other intangible assets
offset by $132 million of debt assumed.


                                       10
<PAGE>


The unaudited proforma combined historical results, as if Core-Mark had been
acquired at the beginning of fiscal 2002 and 2001, respectively, are estimated
in the following table:

<Table>
<Caption>
(IN MILLIONS, EXCEPT PER SHARE DATA)                 12 WEEKS ENDED                  40 WEEKS ENDED
                                               --------------------------     --------------------------
                                               OCTOBER 5,      OCTOBER 6,     OCTOBER 5,      OCTOBER 6,
                                                  2002            2001           2002            2001
                                               ----------      ----------     ----------      ----------
<S>                                            <C>             <C>            <C>             <C>
Net sales from continuing operations           $    3,973      $    4,436     $   13,032      $   12,305

Income (loss) from continuing operations       $       (2)     $       19     $       41      $        4
Income (loss) from discontinued operations            (19)              3            (20)             21
                                               ----------      ----------     ----------      ----------
Income (loss) before extraordinary charge      $      (21)     $       22     $       21      $       25
Net income (loss)                              $      (21)     $       22     $       13      $       22

Basic earnings per share:
  Income (loss) from continuing operations     $    (0.03)     $     0.45     $     0.86      $     0.10
  Income (loss) from discontinued operations        (0.36)           0.06          (0.43)           0.49
                                               ----------      ----------     ----------      ----------
  Income (loss) before extraordinary charge    $    (0.39)     $     0.51     $     0.43      $     0.59
  Net income (loss)                            $    (0.39)     $     0.51     $     0.27      $     0.51

Diluted earnings per share:
  Income (loss) from continuing operations     $    (0.03)     $     0.41     $     0.84      $     0.10
  Income (loss) from discontinued operations        (0.36)           0.05          (0.38)           0.46
                                               ----------      ----------     ----------      ----------
  Income (loss) before extraordinary charge    $    (0.39)     $     0.46     $     0.46      $     0.56
  Net income (loss)                            $    (0.39)     $     0.46     $     0.31      $     0.48
</Table>


The proforma results include amortization of other intangibles related to the
purchase for fiscal 2001 amounts and interest expense on debt incurred to
finance the acquisition. The proforma results are not necessarily indicative of
what actually would have occurred if the acquisition had been completed as of
the beginning of each fiscal period presented, nor are they necessarily
indicative of future consolidated results.

7. CONTINGENCIES

Since August 29, 2002, several securities lawsuits have been filed against us
and certain of our officers in the United States District Court for the Eastern
District of Texas seeking court certification as a class action. In addition,
one related shareholders' derivative lawsuit has been filed against certain of
our officers and the members of our Board of Directors in the United States
District Court for the Eastern District of Texas.

We are engaged in other various legal proceedings which have arisen but have not
been fully adjudicated. These proceedings, in the opinion of management, will
not have a material adverse effect upon our consolidated financial position,
cash flows or results of operations when ultimately concluded.


                                       11
<PAGE>


8. DEBT

Long-term debt consists of the following:

<Table>
<Caption>
                                                            OCTOBER 5,       DECEMBER 29,
                                                               2002              2001
                                                           ------------      ------------
                                                                   (IN THOUSANDS)
<S>                                                        <C>               <C>
10 5/8 % senior subordinated notes due 2007                $    400,000      $    400,000
10 1/8 % senior notes due 2008                                  359,029           345,870
5 1/4 % convertible senior subordinated notes due 2009          150,000           150,000
9 1/4 % senior notes due 2010                                   200,000                --
9 7/8 % senior subordinated notes due 2012                      260,000                --
10 1/2 % senior subordinated notes due 2004                          --           250,000
Revolving credit, average interest rates of 3.9%
   for 2002 and 5.5% for 2001, due 2007                          60,000           200,000
Term loan, due 2002 to 2008, average interest
   rate of 4.1% for 2002 and 6.4% for 2001                      423,938           118,637
Debt discounts                                                   (9,466)           (6,713)
                                                           ------------      ------------
                                                              1,843,501         1,457,794
Less current maturities                                          (4,326)          (29,865)
                                                           ------------      ------------

Long-term debt                                             $  1,839,175      $  1,427,929
                                                           ============      ============
</Table>

Aggregate maturities of long-term debt for the next five years are approximately
as follows: in the remainder of 2002, $0 million; in 2003, $4 million; in 2004,
$4 million; in 2005, $4 million; and in 2006, $4 million.

On April 15, 2002, we issued $260 million of 9 7/8% senior subordinated notes
that mature on May 1, 2012. The net proceeds from this private placement were
used to redeem the 10 1/2% senior subordinated notes due 2004. These notes are
unsecured senior subordinated obligations, ranking the same as all other
existing and future senior subordinated indebtedness. The notes are effectively
subordinated to senior secured and senior unsecured indebtedness, including
loans under our senior secured credit facility. The 9 7/8% notes are guaranteed
by substantially all of our subsidiaries (see Footnote 9).

On June 18, 2002, we entered into a $975 million senior secured credit facility
to refinance our then existing $850 million senior secured credit facility. The
credit facility consists of a $550 million revolving facility maturing June 18,
2007 and a $424 million tranche B term loan maturing June 18, 2008. The new
credit facility is secured by all of our inventory and receivables, except for
the portion of receivables related to Core-Mark until the accounts receivable
securitization was paid on July 18, 2002. As of October 5, 2002, based upon the
most restrictive covenant, we had $285 million available to borrow under the
revolving facility. We amended our new credit agreement on October 18, 2002
primarily to facilitate the sale of our retail price impact stores.


                                       12
<PAGE>


In connection with the retirement of the 10 1/2% senior subordinated notes due
2004 and the refinancing of our $850 million senior secured credit facility, we
recognized an $8 million after-tax extraordinary charge ($13 million pre-tax and
$5 million of tax benefit) from the early retirement of debt during the second
quarter of 2002. The charge consisted of debt premium of $6.5 million on our
2004 notes, $3.4 million of unamortized debt issuance costs on our 2004 notes
and $3.2 million of unamortized debt issuance costs on our $850 million credit
agreement.

Also, on June 18, 2002, we issued $200 million of 9 1/4% senior notes that
mature June 15, 2010, ranking equal in right of payment with all other existing
and future senior unsecured debt. The notes are effectively subordinated to any
secured debt, including our senior secured credit facility, but rank senior to
all our existing and future subordinated debt. The notes were issued
simultaneously with the execution of our senior secured credit facility. The
9 1/4% notes are guaranteed by substantially all of our subsidiaries (see
Footnote 9).

In June 2002 and July 2002, we entered into two interest rate swap agreements
with a combined notional amount of $50 million. These swaps were tied to our
9 1/4% senior notes due 2010. The maturity, call dates, and call premiums
mirrored those of the notes. The swaps were designed for us to receive a fixed
rate of 9 1/4% per annum and pay a floating rate based on a spread plus the
3-month LIBOR. The floating rate reset quarterly beginning September 15, 2002.
We documented and designated these swaps to qualify as a fair value hedge.
During the third quarter, we unwound these swap agreements and received and
recorded $2 million as a deferred gain that is being amortized to reduce
interest expense over the remaining life of the related senior notes.

In April 2002, we entered into an interest rate swap agreement with a notional
amount of $50 million. This swap was tied to our 9 7/8% senior subordinated
notes due 2012. The maturity, call dates, and call premiums mirrored those of
the notes. The swap was designed for us to receive a fixed rate of 9 7/8% per
annum and pay a floating rate based on a spread plus the 3-month LIBOR. The
floating rate reset quarterly beginning May 1, 2002. We documented and
designated this swap to qualify as a fair value hedge. During the third quarter,
we unwound this swap agreement and received and recorded $4 million as a
deferred gain that is being amortized to reduce interest expense over the
remaining life of the related subordinated notes.

In 2001, we entered into interest rate swap agreements with a combined notional
amount of $210 million. The swaps are tied to our 10 1/8% senior notes due 2008.
The maturity, call dates, and call premiums mirror those of the notes. The swaps
are designed for us to receive a fixed rate of 10 1/8% per annum and pay a
floating rate based on a spread plus the 3-month LIBOR. The floating rates reset
quarterly. We have documented and designated these swaps to qualify as fair
value hedges. During the third quarter of 2002, we unwound all but one swap
agreement and received and recorded $4 million as a deferred gain that is being
amortized to reduce interest expense over the remaining life of the related
senior notes. At the end of the third quarter of 2002, in accordance with SFAS
133, the mark-to-market value of the remaining swap, with a notional value of
$50 million was recorded on our consolidated balance sheet as a $4 million
long-term asset offset by a change in fair value to the senior notes due 2008.

For all qualifying and highly effective fair value hedges, the changes in the
fair value of a derivative and the loss or gain on the hedged asset or liability
relating to the risk being hedged are


                                       13
<PAGE>


recorded currently in earnings. These amounts are recorded to interest income
and provide offset of one another. There was no net earnings impact relating to
our fair value hedges.

9. SUBSIDIARY GUARANTEE OF SENIOR NOTES AND SENIOR SUBORDINATED NOTES

The senior notes, convertible senior subordinated notes, and senior subordinated
notes are guaranteed by substantially all of Fleming's wholly-owned direct and
indirect subsidiaries. The guarantees are joint and several, full, complete and
unconditional. There are currently no restrictions on the ability of the
subsidiary guarantors to transfer funds to Fleming (the parent) in the form of
cash dividends, loans or advances.

The following condensed consolidating financial information depicts, in separate
columns, the parent company, those subsidiaries which are guarantors, those
subsidiaries which are non-guarantors, elimination and reclassification
adjustments and the consolidated total. The financial information may not
necessarily be indicative of the results of operations or financial position had
the subsidiaries been operated as independent entities.

CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION

<Table>
<Caption>
                                                                    OCTOBER 5, 2002
                                     --------------------------------------------------------------------------------
                                                                                       ELIMINATIONS
                                        PARENT                           NON-          AND RECLASS-
                                       COMPANY       GUARANTORS       GUARANTORS        IFICATIONS       CONSOLIDATED
                                     -----------     -----------     ------------      ------------      ------------
                                                                    (IN THOUSANDS)
<S>                                  <C>             <C>             <C>               <C>               <C>
             ASSETS
Current assets:
   Cash and cash equivalents         $    13,411     $     7,023     $        260      $         --      $     20,694
   Receivables, net                      458,413         250,700            4,139           (12,005)          701,247
   Inventories                           814,819         433,805               --          (137,781)        1,110,843
   Assets held for sale                       --              --               --           615,782           615,782
   Other current assets                   65,975          14,800              566            (1,660)           79,681
                                     -----------     -----------     ------------      ------------      ------------
      Total current assets             1,352,618         706,328            4,965           464,336         2,528,247
Investment in subsidiaries               446,078           5,356               --          (451,434)               --
Intercompany receivables                 616,733              --               --          (616,733)               --
Property and equipment, net              536,666         361,894            9,662          (319,875)          588,347
Goodwill,net                             401,941         436,672               --          (141,783)          696,830
Other assets                             377,851          31,877               --            (2,678)          407,050
                                     -----------     -----------     ------------      ------------      ------------
                                     $ 3,731,887     $ 1,542,127     $     14,627      $ (1,068,167)     $  4,220,474
                                     ===========     ===========     ============      ============      ============

LIABILITIES AND EQUITY (DEFICIT)
Current liabilities:
   Accounts payable                  $   748,225     $   252,350     $         89      $    (15,392)     $    985,272
   Intercompany payables                      --         596,751           19,982          (616,733)               --
   Liabilities held for sale                  --              --               --           146,740           146,740
   Other current liabilities             165,862          98,823              803           (14,654)          250,834
                                     -----------     -----------     ------------      ------------      ------------
      Total current liabilities          914,087         947,924           20,874          (500,039)        1,382,846
Obligations under capital leases         193,638         118,673               --          (116,138)          196,173
Long-term debt and other
   liabilities                         1,951,600          17,849               --              (556)        1,968,893
Equity (deficit)                         672,562         457,681           (6,247)         (451,434)          672,562
                                     -----------     -----------     ------------      ------------      ------------
                                     $ 3,731,887     $ 1,542,127     $     14,627      $ (1,068,167)     $  4,220,474
                                     ===========     ===========     ============      ============      ============
</Table>



                                       14
<PAGE>

CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION (CONTINUING)

<Table>
<Caption>

                                                             DECEMBER 29, 2001
                                   -------------------------------------------------------------------------
                                                                              ELIMINATIONS
                                      PARENT                       NON-       AND RECLASS-
                                     COMPANY     GUARANTORS     GUARANTORS     IFICATIONS      CONSOLIDATED
                                   -----------   -----------   -----------    -------------    -------------
                                                             (IN THOUSANDS)
<S>                                <C>           <C>           <C>            <C>              <C>
             ASSETS
Current assets:
   Cash and cash equivalents       $    10,175   $     6,876   $       274    $          --    $      17,325
   Receivables, net                    483,007       105,250            12          (20,072)         568,197
   Inventories                         817,012       198,386            --         (112,465)         902,933
   Assets held for sale                     --            --            --          571,352          571,352
   Other current assets                 84,676         4,950            99           (1,592)          88,133
                                   -----------   -----------   -----------    -------------    -------------
      Total current assets           1,394,870       315,462           385          437,223        2,147,940
Investment in subsidiaries              93,241         5,356            --          (98,597)              --
Intercompany receivables               470,545            --            --         (470,545)              --
Property and equipment, net            651,846       287,826         9,182         (295,335)         653,519
Goodwill,net                           401,180       153,010            --         (138,418)         415,772
Other assets                           379,658        47,861        13,413           (3,470)         437,462
                                   -----------   -----------   -----------    -------------    -------------
                                   $ 3,391,340   $   809,515   $    22,980    $    (569,142)   $   3,654,693
                                   ===========   ===========   ===========    =============    =============

LIABILITIES AND EQUITY (DEFICIT)
Current liabilities:
   Accounts payable                $   861,445   $   109,311   $     1,035    $     (19,754)   $     952,037
   Intercompany payables                    --       443,066        27,479         (470,545)              --
   Liabilities held for sale                --            --            --          157,001          157,001
   Other current liabilities           264,744        27,880           713          (18,610)         274,727
                                   -----------   -----------   -----------    -------------    -------------
      Total current liabilities      1,126,189       580,257        29,227         (351,908)       1,383,765
Obligations under capital leases       213,292       118,543            --         (114,408)         217,427
Long-term debt and other
   liabilities                       1,553,640         5,871            --           (4,229)       1,555,282
Equity (deficit)                       498,219       104,844        (6,247)         (98,597)         498,219
                                   -----------   -----------   -----------    -------------    -------------
                                   $ 3,391,340   $   809,515   $    22,980    $    (569,142)   $   3,654,693
                                   ===========   ===========   ===========    =============    =============
</Table>




                                       15
<PAGE>

CONDENSED CONSOLIDATING OPERATING STATEMENT INFORMATION

<Table>
<Caption>
                                                                               12 WEEKS ENDED OCTOBER 5, 2002
                                               ----------------------------------------------------------------------------------
                                                                                                   ELIMINATIONS
                                                  PARENT                             NON-          AND RECLASS-
                                                 COMPANY        GUARANTORS        GUARANTORS        IFICATIONS       CONSOLIDATED
                                               -----------      -----------      ------------      ------------      ------------
                                                                                (IN THOUSANDS)
<S>                                            <C>              <C>              <C>               <C>               <C>
Net sales                                      $ 3,469,439      $   512,913      $         87      $     (9,790)     $  3,972,649
Costs and expenses:
    Cost of sales                                3,341,447          500,532                --            (9,790)        3,832,189
    Selling and administrative                      97,648           16,177               217                --           114,042
    Other                                           43,426          (14,449)             (161)               --            28,816
    Impairment/restructuring charge                     --               --                --                --                --
    Equity income from subsidiaries                 (6,282)              --                --             6,282                --
                                               -----------      -----------      ------------      ------------      ------------
       Total costs and expenses                  3,476,239          502,260                56            (3,508)        3,975,047
                                               -----------      -----------      ------------      ------------      ------------

Income (loss) before taxes                          (6,800)          10,653                31            (6,282)           (2,398)
Taxes on income (loss)                              (5,330)           4,389                13                --              (928)
                                               -----------      -----------      ------------      ------------      ------------
Income (loss) from continuing operations            (1,470)           6,264                18            (6,282)           (1,470)
Discontinued operations:
Income (loss) before taxes                         (31,624)          10,170                --           (10,170)          (31,624)
Taxes on income (loss)                             (12,238)           4,191                --            (4,191)          (12,238)
                                               -----------      -----------      ------------      ------------      ------------
Income (loss) from discontinued operations         (19,386)           5,979                --            (5,979)          (19,386)
                                               -----------      -----------      ------------      ------------      ------------

Income (loss) before extraordinary charge      $   (20,856)     $    12,243      $         18      $    (12,261)     $    (20,856)
                                               ===========      ===========      ============      ============      ============
</Table>


<Table>
<Caption>
                                                                       12 WEEKS ENDED OCTOBER 6, 2001
                                               ----------------------------------------------------------------------------------
                                                                                                   ELIMINATIONS
                                                  PARENT                             NON-          AND RECLASS-
                                                 COMPANY        GUARANTORS        GUARANTORS        IFICATIONS       CONSOLIDATED
                                               -----------      -----------      ------------      ------------      ------------
                                                                                (IN THOUSANDS)
<S>                                            <C>              <C>              <C>               <C>               <C>
Net sales                                      $ 3,119,770      $   411,451      $      9,965      $     (9,546)     $  3,531,640
Costs and expenses:
    Cost of sales                                2,980,656          397,162             6,975            (9,546)        3,375,247
    Selling and administrative                      93,116           10,742             3,756                --           107,614
    Other                                           23,642            3,955            (5,282)               --            22,315
    Impairment/restructuring charge (credit)          (716)             107                --                --              (609)
    Litigation charges                                  --               --                --                --                --
    Equity income from subsidiaries                 (2,354)              --                --             2,354                --

                                               -----------      -----------      ------------      ------------      ------------
       Total costs and expenses                  3,094,344          411,966             5,449            (7,192)        3,504,567
                                               -----------      -----------      ------------      ------------      ------------

Income (loss) before taxes                          25,426             (515)            4,516            (2,354)           27,073
Taxes on income (loss)                               8,918             (214)            1,861                --            10,565
                                               -----------      -----------      ------------      ------------      ------------
Income (loss) from continuing operations            16,508             (301)            2,655            (2,354)           16,508
Discontinued operations:
Income before taxes                                  4,209           11,850                --           (11,850)            4,209
Taxes on income                                      1,642            4,924                --            (4,924)            1,642
                                               -----------      -----------      ------------      ------------      ------------
Income from discontinued operations                  2,567            6,926                --            (6,926)            2,567
                                               -----------      -----------      ------------      ------------      ------------

Income before extraordinary charge             $    19,075      $     6,625      $      2,655      $     (9,280)     $     19,075
                                               ===========      ===========      ============      ============      ============
</Table>

                                       16
<PAGE>


CONDENSED CONSOLIDATING OPERATING STATEMENT INFORMATION

<Table>
<Caption>
                                                                         40 WEEKS ENDED OCTOBER 5, 2002
                                              ------------------------------------------------------------------------------------
                                                                                                    ELIMINATIONS
                                                 PARENT                              NON-           AND RECLASS-
                                                COMPANY          GUARANTORS        GUARANTORS        IFICATIONS       CONSOLIDATED
                                              ------------      ------------      ------------      ------------      ------------
                                                                                 (IN THOUSANDS)
<S>                                           <C>               <C>               <C>               <C>               <C>
Net sales                                     $  9,655,890      $  1,801,654      $        163      $    (32,064)     $ 11,425,643
Costs and expenses:
    Cost of sales                                9,234,299         1,737,725                --           (32,064)       10,939,960
    Selling and administrative                     265,775            46,254               241                --           312,270
    Other                                           91,172            (1,204)              279                --            90,247
    Impairment/restructuring charge                 27,361                --                --                --            27,361
    Equity income from subsidiaries                (10,891)               --                --            10,891                --

                                              ------------      ------------      ------------      ------------      ------------
       Total costs and expenses                  9,607,716         1,782,775               520           (21,173)       11,369,838
                                              ------------      ------------      ------------      ------------      ------------

Income (loss) before taxes                          48,174            18,879              (357)          (10,891)           55,805
Taxes on income (loss)                              13,825             7,778              (147)               --            21,456
                                              ------------      ------------      ------------      ------------      ------------
Income (loss) from continuing operations            34,349            11,101              (210)          (10,891)           34,349
Discontinued operations:
Loss before taxes                                  (33,207)          (16,334)               --            16,334           (33,207)
Taxes on loss                                      (12,701)           (6,729)               --             6,729           (12,701)
                                              ------------      ------------      ------------      ------------      ------------
Loss from continuing operations                    (20,506)           (9,605)               --             9,605           (20,506)
                                              ------------      ------------      ------------      ------------      ------------

Income (loss) before extraordinary charge     $     13,843      $      1,496      $       (210)     $     (1,286)     $     13,843
                                              ============      ============      ============      ============      ============
</Table>

<Table>
<Caption>
                                                                          40 WEEKS ENDED OCTOBER 6, 2001
                                              ------------------------------------------------------------------------------------
                                                                                                    ELIMINATIONS
                                                 PARENT                              NON-           AND RECLASS-
                                                COMPANY          GUARANTORS        GUARANTORS        IFICATIONS       CONSOLIDATED
                                              ------------      ------------      ------------      ------------      ------------
                                                                                 (IN THOUSANDS)
<S>                                           <C>               <C>               <C>               <C>               <C>
Net sales                                     $  8,419,264      $  1,319,707      $     48,047      $    (19,155)     $  9,767,863
Costs and expenses:
    Cost of sales                                8,048,743         1,235,975            35,608           (19,155)        9,301,171
    Selling and administrative                     230,159            86,203            13,575                --           329,937
    Other                                           48,126            31,516            (2,517)               --            77,125
    Impairment/restructuring charge (credit)        46,267           (35,856)               --                --            10,411
    Litigation charges                              48,628                --                --                --            48,628
    Equity income from subsidiaries                 (1,915)               --                --             1,915                --

                                              ------------      ------------      ------------      ------------      ------------
       Total costs and expenses                  8,420,008         1,317,838            46,666           (17,240)        9,767,272
                                              ------------      ------------      ------------      ------------      ------------

Income (loss) before taxes                            (744)            1,869             1,381            (1,915)              591
Taxes on income (loss)                              (1,099)              766               569                --               236
                                              ------------      ------------      ------------      ------------      ------------
Income from continuing operations                      355             1,103               812            (1,915)              355
Discontinued operations:
Income before taxes                                 35,314            38,926                --           (38,926)           35,314
Taxes on income                                     14,586            15,944                --           (15,944)           14,586
                                              ------------      ------------      ------------      ------------      ------------
Income from continuing operations                   20,728            22,982                --           (22,982)           20,728
                                              ------------      ------------      ------------      ------------      ------------

Income before extraordinary charge            $     21,083      $     24,085      $        812      $    (24,897)     $     21,083
                                              ============      ============      ============      ============      ============
</Table>

                                       17
<PAGE>

CONDENSED CONSOLIDATING CASH FLOWS INFORMATION

<Table>
<Caption>
                                                                             40 WEEKS ENDED OCTOBER 5, 2002
                                                     -----------------------------------------------------------------------------
                                                                                                       ELIMINATIONS
                                                      PARENT                             NON-          AND RECLASS-
                                                      COMPANY        GUARANTORS       GUARANTORS        IFICATIONS    CONSOLIDATED
                                                     ----------      ----------      ------------      ------------   ------------
                                                                                    (IN THOUSANDS)
<S>                                                  <C>             <C>             <C>               <C>            <C>
Net cash provided by (used in)
 operating activities                                $  321,759      $ (447,257)     $      7,893      $         --   $   (117,605)
                                                     ----------      ----------      ------------      ------------   ------------

Cash flows from investing activities:
Purchases of property and equipment                     (65,651)        (70,274)          (14,854)               --       (150,779)
Other                                                  (125,752)         16,907            14,234                --        (94,611)
                                                     ----------      ----------      ------------      ------------   ------------


Net cash used in investing activites                   (191,403)        (53,367)             (620)               --       (245,390)
                                                     ----------      ----------      ------------      ------------   ------------

Cash flows from financing activities:
Repayments on capital lease obligations                 (11,154)         (4,254)               --                --        (15,408)
Advance to (from) parent                               (497,738)        505,025            (7,287)               --             --
Other                                                   381,772              --                --                --        381,772
                                                     ----------      ----------      ------------      ------------   ------------

Net cash provided by (used in) financing activities    (127,120)        500,771            (7,287)               --        366,364
                                                     ----------      ----------      ------------      ------------   ------------

Net increase (decrease) in cash & cash equivalents        3,236             147               (14)               --          3,369

Cash and cash equivalents at beginning of period         10,175           6,876               274                --         17,325

                                                     ----------      ----------      ------------      ------------   ------------
Cash and cash equivalents at end of period           $   13,411      $    7,023      $        260      $         --   $     20,694
                                                     ==========      ==========      ============      ============   ============
</Table>

<Table>
<Caption>
                                                                           40 WEEKS ENDED OCTOBER 6, 2001
                                                     -----------------------------------------------------------------------------
                                                                                                       ELIMINATIONS
                                                      PARENT                             NON-          AND RECLASS-
                                                      COMPANY        GUARANTORS       GUARANTORS        IFICATIONS    CONSOLIDATED
                                                     ----------      ----------      ------------      ------------   ------------
                                                                                    (IN THOUSANDS)
<S>                                                  <C>             <C>             <C>               <C>            <C>
Net cash used in operating activities                $  (88,061)     $  (56,633)     $        (23)     $         --   $   (144,717)
                                                     ----------      ----------      ------------      ------------   ------------

Cash flows from investing activities:
Purchases of property and equipment                    (136,669)        (25,258)           (6,577)               --       (168,504)
Other                                                    24,615           6,136                80                --         30,831
                                                     ----------      ----------      ------------      ------------   ------------

Net cash used in investing activities                  (112,054)        (19,122)           (6,497)               --       (137,673)
                                                     ----------      ----------      ------------      ------------   ------------

Cash flows from financing activities:
Repayments on capital lease obligations                 (10,449)         (4,643)               --                --        (15,092)
Advance to (from) parent                                (82,068)         76,430             5,638                --             --
Other                                                   310,593              --                --                --        310,593
                                                     ----------      ----------      ------------      ------------   ------------

Net cash provided by financing activities               218,076          71,787             5,638                --        295,501
                                                     ----------      ----------      ------------      ------------   ------------

Net increase (decrease) in cash and
   cash equivalents                                      17,961          (3,968)             (882)               --         13,111

Cash and cash equivalents at beginning of period         22,487           6,753             1,140                --         30,380

                                                     ----------      ----------      ------------      ------------   ------------
Cash and cash equivalents at end of period           $   40,448      $    2,785      $        258      $         --   $     43,491
                                                     ==========      ==========      ============      ============   ============
</Table>


                                       18
<PAGE>


10. SALE-LEASEBACK OF REAL PROPERTY

During the second and third quarters of 2002, gross proceeds from sale-leaseback
transactions totaled $144 million and are included in the proceeds from sale of
property and equipment on the condensed consolidated statemets of cash flows.
These transactions resulted in a gain of $24 million that is being deferred over
the remaining life of the operating leases which range from 10 to 15 years.
Future minimum lease payments required from these sale-leaseback transactions
that have noncancelable lease terms exceeding one year are presented in the
following table:

<Table>
<Caption>
FISCAL YEAR                                      AMOUNT
---------------------------                  --------------
                                             (In thousands)
<S>                                          <C>
Remaining in 2002                               $   3,772
2003                                               15,087
2004                                               15,087
2005                                               15,087
2006                                               15,087
</Table>

11. SECOND QUARTER CHARGE

In the second quarter of 2002, we recorded a $27 million pre-tax charge related
to the closure of distribution facilities in Oklahoma City and Dallas and
certain integration costs related to recent acquisitions. The after-tax effect
was a charge of $16 million, or $0.34 per share. Certain other costs associated
with the closures will be expensed in the future as incurred.

The charge is comprised primarily of long-lived asset impairments, lease
obligations and severance related expenses for the closed distribution
facilities. The entire charge is reflected on the impairment/restructuring
charge (credit) line on the consolidated statement of operations and affects
continuing operations. The assets related to these closures are included in
assets held for sale.

The portion of the charge relating to workforce reductions totaled approximately
$4 million with a headcount of 410 and was fully paid during the third quarter.

Additionally, $5 million of the charge related to lease obligations which will
be reduced over the remaining lease terms as the facilities are no longer
operating. The charges and utilization have been recorded to-date as follows:

<Table>
<Caption>
                                                     AMOUNT
                                                 --------------
                                                 (In thousands)
<S>                                              <C>
        2002 Quarter 2 charge                    $        5,022

        2002 Quarter 3 terminations                        (508)
                                                 --------------

           Ending liability                      $        4,514
                                                 ==============
</Table>

The remainder of the charge relates to asset impairments.


                                       19
<PAGE>


12. HISTORICAL STRATEGIC PLAN CHARGES

In December 1998, we announced the implementation of a strategic plan designed
to improve the competitiveness of the retailers we serve and improve our
performance by building stronger operations that can better support long-term
growth. The four major initiatives of the strategic plan were to consolidate
distribution operations, grow distribution sales, improve retail performance,
and reduce overhead and operating expenses, in part by centralizing procurement
and other functions. Additionally, in 2000, we decided to reposition certain
retail operations into our price impact format and sell or close the remaining
conventional retail chains. By mid-2001, we had sold or closed all of our
conventional retail stores, and the plan was completed by the end of 2001.

The activity related to workforce reductions is as follows:


<Table>
<Caption>
                                          AMOUNT
                                      --------------
                                      (In thousands)
<S>                                   <C>
        2001 Ending liability         $       18,091

        2002 Quarter 1 terminations           (4,008)

        2002 Quarter 2 terminations           (2,567)

        2002 Quarter 3 terminations             (682)
                                      --------------
           Ending liability           $       10,834
                                      ==============
</Table>

The ending liability of approximately $11 million is primarily comprised of
estimated union pension withdrawal liabilities, but also includes accruals for
payments over time to associates whose employment is already severed. The
headcount related to severance was approximately 80 at the end of 2001. By the
end of the second quarter of 2002, essentially all impacted employees'
employment had been severed. All of the employee reductions in 2002 related to
this plan were from distribution operating units.

Additionally, the strategic plan included charges related to lease obligations.
Stores with remaining lease obligations as of year-end 2001 of approximately
$2.3 million were closed during the first quarter of 2002.

Assets held for sale related to our restructuring and included in current assets
at the end of the third quarter of 2002 were approximately $32 million (not
including amounts related to discontinued operations, see Footnote 4 for more
details), consisting of $26 million of distribution operating units and $6
million of retail stores. Included in the $32 million are amounts related to the
2002 closure of the distribution facilities in Oklahoma City and Dallas (see
Footnote 11) and divisions that have closed related to the strategic plan but
are not yet sold.


                                       20
<PAGE>


The net effect of the strategic plan in the third quarter of 2001 was a pre-tax
charge of $6 million. The after-tax effect was a charge of $4 million, or $0.07
per share. The third quarter of 2001 pre-tax charge consisted of the following
components:

o    Net impairment recovery of $2 million through sales of operations against
     which we had previously recorded long-lived asset impairments. This
     recovery is included in the impairment/restructuring line on our Condensed
     Consolidated Statement of Operations. Of the $2 million impairment
     recovery, $3 million of recovery related to continuing operations and a $1
     million charge related to discontinued operations.

o    Restructuring charges of $3 million. The restructuring charges consisted
     primarily of severance related expenses for the divested or closed
     operating units. The restructuring charges also included professional fees
     expensed as incurred related to the restructuring process. These costs are
     included in the impairment/restructuring line on our Condensed Consolidated
     Statement of Operations. Of the $3 million in restructuring charges, $2
     million related to continuing operations and $1 million related to
     discontinued operations.

o    Other disposition and related costs of $5 million. These costs are included
     on several lines of the Condensed Consolidated Statement of Operations as
     follows: $1 million of charges was included in net sales related primarily
     to adjust previously recorded gains on the sale of conventional retail
     stores; $1 million of charges was included in cost of sales and was
     primarily related to inventory markdowns for clearance for closed
     operations; $3 million of charges was included in selling and
     administrative expense as disposition related costs which were expensed as
     incurred. Of the $5 million in other disposition and related costs, $3
     million related to continuing operations and $2 million related to
     discontinued operations.

The net effect of the strategic plan for the first three quarters of 2001 was a
pre-tax charge of $19 million. The after-tax effect was a charge of $11 million,
or $0.23 per share. The charge for the first three quarters of 2001 consisted of
the following components:

o    Net impairment recovery of $42 million. The components included recovering,
     through sales of the related operations, previously recorded goodwill
     impairment of $15 million and long-lived asset impairment of $34 million.
     Also included was impairment of $7 million related to other long-lived
     assets. These costs are included in the impairment/restructuring line on
     our Condensed Consolidated Statement of Operations. Substantially all of
     the $42 million impairment recovery related to discontinued operations.

o    Restructuring charges of $16 million. The restructuring charges consisted
     primarily of severance related expenses for the divested or closed
     operating units. The restructuring charges also included professional fees
     expensed as incurred related to the restructuring process. These costs are
     included in the impairment/restructuring line on our Condensed Consolidated
     Statement of Operations. Of the $16 million restructuring charges, $10
     million related to continuing operations and $6 million related to
     discontinued operations.


                                       21
<PAGE>


o    Other disposition and related costs of $45 million. These costs are
     included on several lines of the Condensed Consolidated Statement of
     Operations as follows: less than $1 million of income was included in net
     sales related primarily to gains on the sale of conventional retail stores;
     $31 million of charges was included in cost of sales and was primarily
     related to inventory markdowns for clearance for closed operations; $14
     million of charges was included in selling and administrative expense as
     disposition related costs which were expensed as incurred. Of the $45
     million of other disposition and related costs, $14 million related to
     continuing operations and $31 million related to discontinued operations.

13. GOODWILL AND OTHER INTANGIBLE ASSETS

Effective January 1, 2002, we adopted SFAS No. 142 - Goodwill and Other
Intangible Assets. This standard requires a non-amortization approach to account
for purchased goodwill and other indefinite life intangibles. Under that
approach, goodwill and intangible assets with indefinite lives are not amortized
to earnings over a period of time. Instead, these amounts are reviewed for
impairment and expensed against earnings only in the periods in which the
recorded values are more than implied fair value.

SFAS 142 prescribes a two-phase process for impairment testing of goodwill. The
first phase screens for impairment and was completed prior to June 30, 2002. As
no impairment was detected, the second phase, which measures the impairment, was
not necessary. As required, we will perform subsequent evaluations annually
during the second quarter of each year, or more frequently if circumstances
indicate a possible impairment. Unamortized goodwill of $697 million relates to
continuing operations and $142 million relates to discontinued operations.

                                       22
<PAGE>

In accordance with SFAS 142, the effect of this accounting change is reflected
prospectively. Supplemental comparative disclosure, as if the change had been
retroactively applied to the 12 and 40 weeks ended October 6, 2001, is as
follows (in thousands, except per share amounts):

<Table>
<Caption>
                                                        12 WEEKS ENDED                 40 WEEKS ENDED
                                                     2002            2001           2002            2001
                                                  ----------      ----------     ----------      ----------
<S>                                               <C>             <C>            <C>             <C>
INCOME (LOSS) FROM CONTINUING OPERATIONS:
  Reported income (loss)                          $   (1,470)     $   16,508     $   34,349      $      355
  Goodwill amortization, net of tax                       --           3,088             --          10,026
                                                  ----------      ----------     ----------      ----------
  Adjusted income (loss)                          $   (1,470)     $   19,596     $   34,349      $   10,381
                                                  ==========      ==========     ==========      ==========

INCOME (LOSS) FROM DISCONTINUED OPERATIONS:
  Reported income (loss)                          $  (19,386)     $    2,567     $  (20,506)     $   20,728
  Goodwill amortization, net of tax                       --           1,420             --           4,550
                                                  ----------      ----------     ----------      ----------
  Adjusted income (loss)                          $  (19,386)     $    3,987     $  (20,506)     $   25,278
                                                  ==========      ==========     ==========      ==========

BASIC INCOME (LOSS) PER SHARE:
  Reported income (loss) from
    continuing operations                         $    (0.03)     $     0.38     $     0.71      $     0.01
  Goodwill amortization, net of tax                       --            0.07             --            0.24
                                                  ----------      ----------     ----------      ----------
  Adjusted income (loss) from
    continuing operations                         $    (0.03)     $     0.45     $     0.71      $     0.25
                                                  ==========      ==========     ==========      ==========

  Reported income (loss) from
    discontinued operations                       $    (0.36)     $     0.06     $    (0.43)     $     0.49
  Goodwill amortization, net of tax                       --            0.03             --            0.11
                                                  ----------      ----------     ----------      ----------
  Adjusted income (loss) from
    discontinued operations                       $    (0.36)     $     0.09     $    (0.43)     $     0.60
                                                  ==========      ==========     ==========      ==========

DILUTED NET INCOME (LOSS) PER SHARE:
  Reported income (loss) from
    continuing operations                         $    (0.03)     $     0.35     $     0.70      $     0.01
  Goodwill amortization, net of tax                       --            0.06             --            0.21
                                                  ----------      ----------     ----------      ----------
  Adjusted income (loss) from
    continuing operations                         $    (0.03)     $     0.41     $     0.70      $     0.22
                                                  ==========      ==========     ==========      ==========

  Reported income (loss) from
    discontinued operations                       $    (0.36)     $     0.05     $    (0.42)     $     0.46
  Goodwill amortization, net of tax                       --            0.03             --            0.10
                                                  ----------      ----------     ----------      ----------
  Adjusted income (loss) from
    discontinued operations                       $    (0.36)     $     0.08     $    (0.42)     $     0.56
                                                  ==========      ==========     ==========      ==========
</Table>


Supplemental comparative disclosure for net income (loss) for the 12 and 40
weeks ended October 6, 2001, would be affected by the same adjustments as those
reflected above.


                                       23
<PAGE>


For the 12 and 40 weeks ended October 5, 2002, we recorded additional goodwill
and other intangible assets of $283 million, primarily related to the
acquisition of Core-Mark (see Footnote 6). Other intangibles, excluding debt
issuance costs, included in other assets on our consolidated balance sheet
consisted of the following:

<Table>
<Caption>
(In thousands)                    OCTOBER 5, 2002                         DECEMBER 29, 2001
                        -------------------------------------  -------------------------------------
                          GROSS                     OTHER       GROSS                      OTHER
                        CARRYING   ACCUMULATED   INTANGIBLES,  CARRYING   ACCUMULATED   INTANGIBLES,
                         AMOUNT   AMORTIZATION       NET        AMOUNT   AMORTIZATION       NET
                        --------  ------------   ------------  --------  ------------   ------------
<S>                     <C>       <C>            <C>           <C>       <C>            <C>
Customer incentives     $122,963  $    (39,781)  $     83,182  $111,605  $    (33,463)  $     78,142
Tradenames                 5,800        (3,926)         1,874     5,800        (3,480)         2,320
Other                      8,106        (5,595)         2,511     6,390        (3,455)         2,935
                        --------  ------------   ------------  --------  ------------   ------------

Other intangibles       $136,869  $    (49,302)  $     87,567  $123,795  $    (40,398)  $     83,397
                        ========  ============   ============  ========  ============   ============
</Table>


Amortization expense of other intangibles disclosed above for the 12 and 40
weeks ended October 5, 2002 was $10.7 million and $23.0 million, respectively.
Estimated amortization expense, excluding any future acquisitions, for each of
the next five fiscal years is as follows:

<Table>
<Caption>
FISCAL YEAR                AMOUNT
--------------------    --------------
                        (In thousands)
<S>                     <C>
           2002              $ 29,075
           2003                23,412
           2004                20,117
           2005                15,285
           2006                 8,144
</Table>

14. RECENT DEVELOPMENTS

In 2003, we will begin recording expense for stock options in accordance with
the fair value model under SFAS No. 123 - Accounting for Stock-Based
Compensation. The Financial Accounting Standards Board is currently addressing
the transition rules related to SFAS No. 123. The current rules provide that
recognition of expense would apply to grants of stock-based awards made after
adopting the fair value method.


                                       24
<PAGE>


INDEPENDENT ACCOUNTANTS' REVIEW REPORT


TO THE BOARD OF DIRECTORS AND SHAREHOLDERS
FLEMING COMPANIES, INC.

We have reviewed the accompanying condensed consolidated balance sheet of
Fleming Companies, Inc. and subsidiaries as of October 5, 2002, and the related
condensed consolidated statements of operations for the 12 and 40 weeks ended
October 5, 2002 and October 6, 2001 and condensed consolidated statements of
cash flows for the 40 weeks ended October 5, 2002 and October 6, 2001. These
financial statements are the responsibility of the company's management.

We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and of making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with auditing standards generally accepted in the United States of
America, the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.

Based on our reviews, we are not aware of any material modifications that should
be made to such condensed consolidated financial statements for them to be in
conformity with accounting principles generally accepted in the United States of
America.

We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the consolidated balance sheet of
Fleming Companies Inc. and subsidiaries as of December 29, 2001, and the related
consolidated statements of operations, shareholders' equity, and cash flows for
the year then ended (not presented herein); and in our report dated February 13,
2002, we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of December 29, 2001 is fairly stated,
in all material respects, in relation to the consolidated balance sheet from
which it has been derived.


DELOITTE & TOUCHE LLP

Dallas, Texas
October 23, 2002



                                       25
<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

GENERAL

After we purchased Core-Mark International, Inc. in June 2002, we began an
evaluation of strategic alternatives related to our price impact retail stores.
After completing this strategic evaluation, we announced in September of 2002
our decision to divest all 110 of our price impact supermarkets, which we
operate under the Food 4 Less and Rainbow Foods banners and focus on our core
distribution business. We have begun negotiations with potential buyers for
substantially all of these stores, including self-distributing chains and
regional and independent supermarket operators. We believe that the disposition
of these retail assets will occur through a series of sales to multiple buyers,
beginning in the fourth quarter of 2002 and be completed in 2003. The divested
stores have been presented as discontinued operations in accordance with SFAS
144.

Concurrently with the completion of the Core-Mark acquisition on June 18, 2002,
we entered into a $975 million credit agreement consisting of a $425 million
tranche B term loan and a $550 million revolving credit facility. We also sold
$200 million aggregate principal amount of 9 1/4% senior notes due 2010 and 9.2
million shares of common stock at $19.40 per share. In connection with the
consummation of these transactions, we repaid all borrowings outstanding under
our previously existing $850 million credit agreement. On October 18, 2002, we
amended our credit agreement primarily to facilitate the sale of our price
impact retail stores. Our results of operations include the results of Core-Mark
from the date of acquisition.

In April 2002, we acquired Head Distributing Company, an Atlanta, Georgia based
piece-pick distributor. Our results of operations included the results of Head
Distributing from the date of acquisition. Also, in June 2002, we purchased
inventory and other personal property from Albertson's Inc. located at its
Tulsa, Oklahoma distribution center and entered into an operating lease of this
distribution center.

We recorded net income (loss) from continuing operations for the 12 and 40 weeks
ended October 5, 2002 of a $2 million loss and a $34 million income,
respectively. Losses from discontinued operations for the 12 and 40 weeks ended
October 5, 2002 were $19 million and $21 million, respectively. EBITDAL from
continuing operations for the 12 and 40 weeks ended October 5, 2002 was $65
million and $250 million, respectively. EBITDAL from discontinued operations for
the 12 and 40 weeks ended October 5, 2002 was a loss of $12 million and income
of $34 million, respectively.



                                       26
<PAGE>


The following table sets forth the calculation of EBITDAL from continuing and
discontinued operations (in millions):

<Table>
<Caption>
                                                    12 WEEKS ENDED               40 WEEKS ENDED
                                             OCTOBER 5,      OCTOBER 6,     OCTOBER 5,     OCTOBER 6,
                                                2002            2001           2002           2001
                                             ----------      ----------     ----------     ----------
<S>                                          <C>             <C>            <C>            <C>
Income (loss) from continuing operations
    before extraordinary charge              $       (2)     $       17     $       34     $        1
Add back:
    Taxes on income (loss)                           (1)             11             21             --
    Depreciation/amortization                        31              26             82             83
    Interest expense                                 34              27            110             97
    LIFO adjustments                                  3              --              3             --
                                             ----------      ----------     ----------     ----------
       EBITDAL - continuing operations       $       65      $       81     $      250     $      181
                                             ==========      ==========     ==========     ==========
</Table>

<Table>
<Caption>
                                                    12 WEEKS ENDED               40 WEEKS ENDED
                                             OCTOBER 5,      OCTOBER 6,     OCTOBER 5,     OCTOBER 6,
                                                2002            2001           2002           2001
                                             ----------      ----------     ----------     ----------
<S>                                          <C>             <C>            <C>            <C>
Income (loss) from discontinued operations
    before extraordinary charge              $      (19)     $        3     $      (21)    $       21
Add back:
    Taxes on income (loss)                          (12)              2            (12)            15
    Depreciation/amortization                        11              12             42             43
    Interest expense                                  7               8             24             31
    LIFO adjustments                                  1              (2)             1             (3)
                                             ----------      ----------     ----------     ----------
       EBITDAL - discontinued operations     $      (12)     $       23     $       34     $      107
                                             ==========      ==========     ==========     ==========
</Table>

EBITDAL is earnings before extraordinary items, interest expense, income taxes,
depreciation and amortization, equity investment results and LIFO provision. We
present EBITDAL to help us describe our ability to generate cash flows that can
be used to service our debt; however, conditions may require conservation of
funds for other uses. EBITDAL is a non-GAAP liquidity measure commonly used in
our industry and should not be considered as an alternative measure of our net
income or cash flows from operations as computed in accordance with GAAP.
Amounts presented may not be comparable to similar measures disclosed by other
companies.


                                       27
<PAGE>


RESULTS OF CONTINUING OPERATIONS

Set forth in the following table is information regarding our continuing net
sales and certain components of income (loss) from continuing operations
expressed as a percent of sales which are referred to in the accompanying
discussion:


<Table>
<Caption>
                                             OCTOBER 5,       OCTOBER 6,
FOR THE 12 WEEKS ENDED                          2002             2001
                                             ----------       ----------
<S>                                          <C>              <C>
Net sales                                        100.00%          100.00%

Gross margin                                       3.54             4.43
Less:
Selling and administrative                         2.87             3.05
Interest expense                                   0.86             0.77
Interest income and other                         (0.13)           (0.14)
Impairment/restructuring credit                      --            (0.02)
                                             ----------       ----------

Total expenses                                     3.60             3.66
                                             ----------       ----------

Income (loss) before taxes                        (0.06)            0.77
Taxes on income (loss)                            (0.02)            0.30
                                             ----------       ----------
Income (loss) from continuing operations          (0.04)%           0.47%
</Table>


<Table>
<Caption>
                                         OCTOBER 5,       OCTOBER 6,
FOR THE 40 WEEKS ENDED                      2002             2001
                                         ----------       ----------
<S>                                      <C>              <C>
Net sales                                    100.00%          100.00%

Gross margin                                   4.25             4.78
Less:
Selling and administrative                     2.73             3.38
Interest expense                               0.97             0.99
Interest income and other                     (0.18)           (0.20)
Impairment/restructuring charges               0.24             0.11
Litigation charges                               --             0.50
                                         ----------       ----------

Total expenses                                 3.76             4.78
                                         ----------       ----------

Income before taxes                            0.49               --
Taxes on income                                0.19               --
                                         ----------       ----------
Income from continuing operations              0.30%              --%
</Table>


                                       28
<PAGE>


NET SALES.
Net sales from continuing operations for the 12 weeks ended October 5, 2002,
increased by $441 million, or 12.5%, to $4.0 billion from the same period in
2001. Year to date, net sales increased by $1.66 billion, or 17.0% (34% of this
increase was attributable to growth in Kmart sales), to $11.4 billion from the
same period in 2001. Net growth for the 12-week period was mainly a result of
Core-Mark sales for the full 12 weeks (16 weeks year to date) along with
increased activity from our Albertson's agreement offset by decreased activity
with Kmart, our largest customer. The decline in sales to Kmart for the 12 weeks
ended October 5, 2002 compared to the same period in the prior year was due to
the closing of Kmart stores in 2002 related to its bankruptcy reorganization
compared to increased sales in the last half of 2001 due to the startup of the
Kmart contract. Kmart accounted for 20% and 31% of our net sales during the
third quarter of 2002 and 2001, respectively, and 23% and 21% for the first
three quarters of 2002 and 2001, respectively.

GROSS MARGIN.
Gross margin from continuing operations for the 12 and 40 weeks ended October 5,
2002 decreased as a percentage of net sales to 3.54% and 4.25%, respectively,
from 4.43% and 4.78%, respectively, for the same periods in 2001. The decrease
in gross margin rate was due, in part, to a change in the mix of product sales
resulting from a greater concentration on high growth, lower margin piece-pick
sales. These sales increased as a result of the Core-Mark and Head Distributing
acquisitions. In addition, a $3.0 million provision for LIFO is included in
continuing operations for the 12 and 40 weeks ended October 5, 2002. There was
no LIFO provision recorded in continuing operations in the prior year comparable
periods.

SELLING AND ADMINISTRATIVE EXPENSES.
Selling and administrative expenses from continuing operations for the 12 and 40
weeks ended October 5, 2002 decreased as a percentage of net sales to 2.87% and
2.73%, respectively, for 2002 from 3.05% and 3.38%, respectively, in 2001. The
improvement is a result of sales growth without a corresponding increase in
fixed operating costs and company-wide cost savings initiatives.

OPERATING EARNINGS.
We measure operating earnings as sales less cost of sales less selling and
administrative expenses. Operating earnings from continuing operations as a
percentage of net sales for the 12 and 40 weeks ended October 5, 2002 were 0.67%
and 1.52%, respectively, compared to 1.38% and 1.40%, respectively, for the same
periods in 2001. The change in operating earnings is a combination of the
explanations included in net sales, gross margin and selling and administrative
expenses described above.

INTEREST EXPENSE.
Interest expense from continuing operations for the third quarter of 2002
increased $7 million to $34 million compared to the same period in 2001 and
increased $14 million year to date compared to the same period in 2001. The
increase in the third quarter was a result of higher debt balances compared to
the prior year quarter. Year to date also increased due to higher debt balances
but was partially offset by lower average interest rates for the same time
period. The second quarter of 2002 and the first quarter of 2001 each included
$3 million of interest expense incurred on debt during the call period for the
early retirement of debt.


                                       29
<PAGE>


INTEREST INCOME AND OTHER.
Interest income from continuing operations of $5 million for the third quarter
of 2002 and $20 million for the first three quarters of 2002 was relatively flat
for the same periods of 2001. Interest income in the second quarter of 2002 and
the first quarter of 2001 each included approximately $1 million of interest
income from cash deposited with a trustee during the call period for the early
retirement of debt.

IMPAIRMENT/RESTRUCTURING CHARGE.
In the second quarter of 2002, we incurred a $27 million pre-tax charge in
continuing operations related to the closure of two distribution facilities and
certain integration costs related to recent acquisitions. See Note 11 in the
notes to the condensed consolidated financial statements for further discussion
of the charge.

The strategic plan was fully implemented by the end of 2001 and thus there has
been no charge in 2002. See Note 12 in the notes to the condensed consolidated
financial statements for further discussion regarding the strategic plan.

DISCONTINUED OPERATIONS.
On September 24, 2002, the Board of Directors approved a plan to sell our price
impact retail grocery stores operating under the Rainbow and Food 4 Less
banners. The plan is based in part on our decision to focus on our core
distribution business. Results of operations of these stores represent a
component of our company and have been previously included in the retail
segment. The disposition of the retail stores is expected to occur in a series
of sales to multiple buyers beginning in the fourth quarter of 2002 and
completed in 2003. Expenses associated with support services that directly
support the retail operations have been reflected in discontinued operations.
For the 12 and 40 weeks ended October 5, 2002, losses from discontinued
operations were $19.4 million and $20.5 million, respectively, compared to
income from discontinued operations of $2.6 million and $20.7, respectively, for
the same time periods in 2001. We expect to apply the proceeds from the sale of
these stores to reduce outstanding debt under our credit facility.

TAXES ON INCOME.
The effective tax rates for the total company for the 40 weeks of 2002 and 2001
were 38.7% and 41.3% (before extraordinary charges), respectively. These were
both blended rates taking into account operations activity as well as various
permanent and timing differences. The effective tax rate for 2002 was favorably
impacted as a result of a refund generated through a change in treatment by the
IRS of a closed statute relating to an earlier return year. The 2001 effective
tax rate also took into account write-offs of non-deductible goodwill. The tax
amount for the third quarter of both years was derived using the 40 week tax
amount with that year's estimated effective tax rate compared to the tax amount
recorded for the first 28 weeks of the year.

EXTRAORDINARY CHARGE.
We reflected extraordinary after-tax charges of $8 million ($13 million pre-tax)
in the second quarter of 2002 and $3 million ($6 million pre-tax) in the first
quarter of 2001, due to the early retirement of debt. See Footnote 8 in the
notes to the condensed consolidated financial statements for further discussion.
In 2003, these amounts will be reclassified to selling and administrative
expense and taxes on income in accordance with SFAS 145.


                                       30
<PAGE>


KMART DEVELOPMENTS.
On January 22, 2002, Kmart and certain of its U.S. subsidiaries filed voluntary
petitions for relief under Chapter 11 of the U.S. Bankruptcy Code. Kmart, our
largest customer, accounted for 23% of our net sales from continuing operations
for both the 40 weeks ended October 5, 2002 and the year ended December 29,
2001. We have a 10-year written distribution agreement with Kmart. Pursuant to
this bankruptcy, Kmart may, however, assume or reject our distribution agreement
at any time. Kmart named us as a "critical vendor" in the bankruptcy proceeding
and granted to us a second priority lien on its inventory to secure the payment
of weekly receivables to us arising after the date of the bankruptcy filing.

The impact of Kmart's bankruptcy filing on our future financial results will
depend greatly upon whether Kmart assumes or rejects our distribution agreement
and upon the success of Kmart's reorganization. If, for example, Kmart assumes
our distribution agreement and obtains bankruptcy court approval of its plan of
reorganization (which Kmart has not yet filed), then it is likely that our
future financial results will not be adversely impacted. If, however, Kmart
rejects our distribution agreement or, to the contrary, assumes our distribution
agreement but fails to obtain bankruptcy court approval of a plan of
reorganization, then we may lose our sales to Kmart, may choose to close or
consolidate certain distribution facilities, may eliminate excess inventory, and
may suffer other damages, including the loss of a portion of our pre-petition
receivable. If certain of these circumstances occur, we could assert a claim
against Kmart for damages in addition to the claim we have already filed.

CERTAIN ACCOUNTING MATTERS.
The FASB issued SFAS No. 143 - Accounting for Asset Retirement Obligations. We
are studying the impact that SFAS 143 has on our financial statements and
planning to implement it in fiscal year 2003, as required. The FASB issued SFAS
No. 144 - Accounting for the Impairment or Disposal of Long-Lived Assets. We
implemented SFAS 144 as of the beginning of fiscal year 2002, as required. It
had no significant impact on our financial statements. In April 2002, the FASB
issued SFAS No. 145 - Rescission of FASB Statements No. 4, 44, and 64, Amendment
of FASB Statement No. 13, and Technical Corrections. We had a refinancing
transaction in 2002 that has resulted in an extraordinary charge. In 2003 these
amounts will be reclassified to selling and administrative expense in accordance
with SFAS 145. In August 2002, the FASB issued SFAS No. 146 - Accounting for
Costs Associated with Exit or Disposal Activities. The standard currently has no
impact on our financial statements, and we will implement it in fiscal year
2003, as required. In December 2001, the AICPA's Accounting Standards Executive
Committee issued Statement of Position (SOP) 01-6, Accounting by Certain
Entities (Including Entities With Trade Receivables) That Lend to or Finance the
Activities of Others. We implemented SOP 01-6 as of the beginning of fiscal year
2002, as required, with no impact on our financial statements. This SOP provides
guidance on the accounting for and disclosure of amounts due to us from
customers included in our accounts and notes receivable.


                                       31
<PAGE>


CRITICAL ACCOUNTING POLICIES AND ESTIMATES.
There have been no significant changes to critical accounting policies and
estimates since the issuance of our 2001 Form 10-K other than the following. We
have estimated the proceeds we expect to receive upon completing the sales of
our price impact retail operations. Our estimates were based on our current
negotiations and other potential outcomes. We have not yet reached final
agreements on these sales. There could be changes in the final sales agreements
that might differ from our estimates.

LIQUIDITY AND CAPITAL RESOURCES

For the year-to-date period ended October 5, 2002, our principal source of
liquidity was borrowings under our credit facility. Our principal sources of
capital were the issuance of common stock, the issuance of long-term senior debt
and the sale-leaseback of six case-pick distribution centers.

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES.
Net cash used in operating activities was $118 million for the three quarters
ended October 5, 2002 compared to a $145 million use of cash for the same period
in 2001. The primary use of cash was for working capital. During the third
quarter of 2002, cash provided by operations of $8 million was primarily driven
by improvements in working capital, specifically accounts payable and inventory
in continuing operations. This compares to a use of cash of $81 million for the
12 weeks ended October 6, 2001, which was primarily driven by a build in
inventory.

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES.
Total investment-related activity resulted in a $245 million use of cash for the
three quarters ended October 5, 2002 compared to a $138 million use of cash in
the same period of 2001.

Cash expended for businesses acquired was $295 million for the three quarters
ended October 5, 2002 (primarily as a result of our acquisition of Core-Mark and
Head Distributing), compared to $121 million cash expended for businesses
acquired during the same period in 2001.

Cash expended for the purchase of property and equipment totaled $151 million
for the three quarters ended October 5, 2002 compared to $169 million for the
same period in 2001. We intend to spend a total of approximately $185 million on
our capital programs in 2002 compared to $238 million spent in 2001. We estimate
capital expenditures of $135 million in 2003. The planned reduction is primarily
related to our decision to divest our price impact retail stores.

Cash proceeds from the sale of property and equipment was $164 million,
primarily related to the sale-leaseback of six case-pick distribution centers
located in Phoenix, Massillon, Salt Lake City, Miami, Sacramento and Memphis
(see Footnote 10 for sale-leaseback details) for the three quarters ended
October 5, 2002 compared to $13 million from the sale of property and equipment
during the same period in 2001.

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES.
Net cash generated by financing activities was $366 million for the three
quarters ended October 5, 2002 compared to $296 million for the same period last
year.


                                       32
<PAGE>


On April 15, 2002, we sold $260 million of 9 7/8% senior subordinated notes due
2012. The net proceeds were used to redeem the 10 1/2% senior subordinated notes
due 2004.

At the end of the third quarter of 2002, outstanding borrowings under the credit
facility totaled $424 million of term loans and $60 million of revolver loans.
The credit facility also supports $77 million of letters of credit.

On June 18, 2002, we purchased Core-Mark International, Inc. In conjunction with
the acquisition, we refinanced our $850 million senior secured credit facility
with a $975 million senior secured credit facility, sold $200 million of 9 1/4%
senior notes due June 15, 2010 and sold 9.2 million shares of common stock at
$19.40 per share, raising $178 million of gross proceeds ($170 million net of
underwriting discount and other issuance costs).

As part of our acquisition of Core-Mark, we assumed $132 million of additional
debt, consisting of $77 million of 11 3/8% senior subordinated notes and a $55
million accounts receivable securitization. On June 18, we deposited $80 million
in a trust to be used to redeem the 11 3/8% senior subordinated notes, including
an amount to cover accrued interest and the redemption premium and received a
satisfaction and discharge to release us from this debt. Simultaneously, on June
18, we deposited $55 million in a trust which was used to redeem the accounts
receivable securitization, including an amount to cover accrued interest. The
redemption of the accounts receivable securitization took place during the third
quarter of 2002.

Our principal sources of liquidity and capital are expected to be cash flows
from operating activities and our ability to borrow under our credit facility,
in addition, lease financing may be employed for our distribution facilities and
equipment. We believe these sources will be adequate to meet working capital
needs in the normal course of business for the next 12 months.

CONTINGENCIES

See Footnote 7 in our notes to the consolidated financial statements and Item 1,
Part II of this report.

FORWARD-LOOKING INFORMATION

This report includes forward-looking statements regarding future events and our
future financial performance. These forward-looking statements and our business
are subject to a number of factors that could cause actual results to differ
materially from those stated in this report, including without limitation:
unanticipated problems with product procurement; adverse effects of the changing
industry and increased competition; sales declines and loss of customers;
exposure to litigation and other contingent losses; elimination of sales to
Kmart due to their rejection of our distribution agreement; the ability of Kmart
to continue as a going concern, to operate pursuant to the terms of its
debtor-in-possession financing, or to complete its reorganization according to
its plan; the inability to integrate acquired companies and to achieve operating
improvements at those companies; increases in labor costs and disruptions in
labor relations with union bargaining units representing our associates; our
ability to successfully sell our retail price-impact stores; and negative
effects of our substantial indebtedness and the limitations imposed by
restrictive covenants contained in our debt instruments. These and other risk
factors are described in our Securities and Exchange Commission reports,
including but not limited to the 10-K Report for the 2001 fiscal year. The


                                       33
<PAGE>


forward-looking statements speak only as of the date made as we undertake no
obligation to update forward-looking statements to reflect developments or
information obtained after the date of this report.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In order to help maintain liquidity and finance business operations, we obtain
long-term credit commitments from banks and other financial institution lenders
under which term loans and revolving loans are made. Such loans carry variable
interest rates based on the London interbank offered interest rate ("LIBOR")
plus a borrowing margin for different interest periods, such as one week, one
month, and other periods up to one year. To assist in managing our debt
maturities and diversify our sources of debt capital, we also use long-term debt
which carries fixed interest rates. Additionally, we use interest rate swap
agreements to manage our ratio of fixed-to-floating rate debt in a
cost-effective manner. See Footnote 8 in the notes to the condensed consolidated
financial statements for a further discussion.

With our acquisition of Core-Mark, we now conduct business in western Canada.
However, changes in the U.S./Canadian rate of currency exchange historically
have had no material impact on the overall results of the Canadian operation, as
virtually all revenues and expenses of such operations are Canadian dollars.

SUMMARY OF FINANCIAL INSTRUMENTS
(In millions, except rates)

<Table>
<Caption>
                                                                           MATURITIES OF PRINCIPAL BY FISCAL YEAR
                                                                    -----------------------------------------------------
                                       FAIR VALUE    FAIR VALUE                                                    THERE-
                                       AT 12/29/01   AT 10/05/02     2002     2003      2004     2005      2006    AFTER
                                       -----------   -----------    ------   ------    ------   ------    ------   ------
<S>                                    <C>           <C>            <C>      <C>       <C>      <C>       <C>      <C>
DEBT WITH VARIABLE INTEREST RATES
Principal payable                      $       318           476        --        4         4        4         4      467
Average variable rate payable                  4.0%          4.1%   Based on Libor plus a margin

DEBT WITH FIXED INTEREST RATES
Principal payable                      $     1,124           815         -       --        --       --        --     1,365
Average fixed rate payable                     9.7%          9.6%      5.7%     5.1%      0.0%     0.0%      0.0%      9.6%
</Table>


ITEM 4.  CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our Exchange Act reports is recorded,
processed, summarized and reported within the time periods specified in the
SEC's rules and forms, and that such information is accumulated and communicated
to our management, including our Chief Executive Officer and Chief Financial
Officer, as appropriate, to allow timely decisions regarding required
disclosure. In designing and evaluating our disclosure controls and procedures,
our management recognized that any controls and procedures, no matter how well
designed and operated, can provide only


                                       34
<PAGE>


reasonable assurance of achieving the desired control objectives, and our
management necessarily was required to apply its judgment in evaluating the
cost-benefit relationship of possible controls and procedures. We also have
investments in certain unconsolidated entities. As we do not control or manage
these entities, our disclosure controls and procedures with respect to these
entities are necessarily substantially more limited than those we maintain with
respect to our consolidated subsidiaries.

Within 90 days prior to the date of this report, we carried out an evaluation,
under the supervision and with the participation of our management, including
our Chief Executive Officer and Chief Financial Officer, of the effectiveness of
the design and operation of our disclosure controls and procedures. Based on the
foregoing, our Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures were effective.

There have been no significant changes in our internal controls or in other
factors that could significantly affect our internal controls subsequent to the
date we completed our evaluation.


                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

We are a party to or threatened with various litigation and contingent loss
situations arising in the ordinary course of our business including disputes
with customers and vendors, owners or creditors of financially troubled or
failed customers, suppliers, landlords and lessees, employees, insurance
carriers and tax authorities. In this regard, we have arbitration claims pending
from and against one of our former convenience store customers, Clark Retail
Enterprises, Inc., regarding the required mix of annual minimum purchases under
a supply agreement and related product service charges. We believe that Clark
failed to purchase the required mix of products as it said it would, making the
supply agreement subject to rescission and making Clark liable to us for
damages. Clark contends that we breached the supply agreement in several
respects, making us liable to Clark for damages. Clark has not yet specified in
the arbitration the amount of damages it is seeking from us. An unfavorable
outcome for us in this arbitration could impact our financial results, but we do
not expect that such an impact would be material to our financial position.

Since August 29, 2002, several securities lawsuits have been filed against us
and certain of our officers in the United States District Court for the Eastern
District of Texas seeking court certification as a class action. To date, these
complaints collectively raise various categories of claims: (a) we allegedly
issued false and misleading positive statements, including statements about our
price impact retail supermarkets; (b) we allegedly issued financial results
which improperly included certain income from vendor deductions; and (c) other
alleged accounting irregularities. In addition, one related derivative lawsuit
has been filed on behalf of Fleming against certain of our officers and the
members of our Board of Directors in the United States District Court for the
Eastern District of Texas. This complaint alleges a breach of fiduciary duty in
connection with the claims described in clause (a) above.


                                       35
<PAGE>


Distributors of cigarettes and other tobacco products are facing a number of
significant issues that could impact the business environment. These issues
include new government regulation that could increase our cost of business,
litigation affecting tobacco manufacturers and new or additional taxes on
cigarettes and other tobacco products that could result in a material reduction
in the consumption of such products in the United States.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits:

  EXHIBIT NUMBER

         3.1      Certificate of Incorporation, incorporated by reference to
                  Exhibit 3.1 to Form 10-Q for quarter ended April 17, 1999

         3.2      By-Laws, incorporated by reference to Exhibit 3.2 to Form 10-Q
                  for quarter ended April 17, 1999

         4.29     First Amendment, dated October 18, 2002, to that certain
                  Credit Agreement, dated as of June 18, 2002, incorporated by
                  reference to Exhibit 10.1 to Form 8-K filed October 23, 2002

         10.66*   Letter Agreement with William H. Marquard, dated September 13,
                  2002

         10.67*   Letter Agreement with Thomas Dahlen, dated July 12, 2002

         15       Letter from Independent Accountants as to Unaudited Interim
                  Financial Information, filed herewith

  *  Management contract, compensatory plan or arrangement.

 (b) Reports on Form 8-K:

On August 6, 2002, we filed a Current Report on Form 8-K pursuant to Item 9 -
Registration FD Disclosure announcing that a slide presentation made to
investors and analysts was publicly available.

On August 12, 2002, we filed a Current Report on Form 8-K pursuant to Item 9 -
Regulation FD Disclosure, attaching the written statements under oath of our
Principal Executive Officer and our Principal Financial Officer that we filed
with the SEC in accordance with the SEC's June 27, 2002 Order (File No. 4-460).

On September 25, 2002, we filed a Current Report on Form 8-K pursuant to Item 9
- Regulation FD Disclosure, announcing that we plan to divest our retail
operations and provide updated financial guidance, as well as a slide
presentation that was made available to investors.

None of these Current Reports on Form 8-K are incorporated into this report or
into any other filing of Fleming, regardless of any general incorporation
language in such filing.


                                       36
<PAGE>


                                    SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                       FLEMING COMPANIES, INC.


November 5, 2002                       /s/ MARK D. SHAPIRO
                                       ---------------------------------------
                                       Mark D. Shapiro
                                       Senior Vice President
                                       Finance and Operations Control
                                       (Duly Authorized Officer of Registrant
                                       and Principal Accounting Officer)



                                       37
<PAGE>


                                 CERTIFICATIONS

I, Mark S. Hansen, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Fleming Companies,
Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

         a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

         b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

         c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
the registrant's board of directors (or persons performing the equivalent
function):

         a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

         b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


                                       38
<PAGE>


Date: November 5, 2002


/s/ MARK S. HANSEN
---------------------------------------------
Mark S. Hansen
Chairman of the Board and Chief Executive Officer





                                       39
<PAGE>


I, Neal J. Rider, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Fleming Companies,
Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

         a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

         b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

         c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
the registrant's board of directors (or persons performing the equivalent
function):

         a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

         b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.



                                       40
<PAGE>


Date: November 5, 2002


/s/ NEAL J. RIDER
---------------------------------------------------
Neal J. Rider
Executive Vice President and Chief Financial Officer


                                       41
<PAGE>


                                 EXHIBIT INDEX


<Table>
<Caption>
       EXHIBIT
       NUMBER                          DESCRIPTION
       -------                         -----------
<S>               <C>
         3.1      Certificate of Incorporation, incorporated by reference to
                  Exhibit 3.1 to Form 10-Q for quarter ended April 17, 1999

         3.2      By-Laws, incorporated by reference to Exhibit 3.2 to Form 10-Q
                  for quarter ended April 17, 1999

         4.29     First Amendment, dated October 18, 2002, to that certain
                  Credit Agreement, dated as of June 18, 2002, incorporated by
                  reference to Exhibit 10.1 to Form 8-K filed October 23, 2002

         10.66*   Letter Agreement with William H. Marquard, dated September 13,
                  2002

         10.67*   Letter Agreement with Thomas Dahlen, dated July 12, 2002

         15       Letter from Independent Accountants as to Unaudited Interim
                  Financial Information, filed herewith
</Table>

  *  Management contract, compensatory plan or arrangement.