SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C.
20549

---

### FORM
10-K/A

---

[X]
Annual
report pursuant to Section 13 or 15(d) of the
SecuritiesExchange Act of 1934 for the fiscal year ended
August 31, 2002
or[ ]
Transition
report pursuant to Section 13 or 15(d) of the
SecuritiesExchange Act of 1934 for the transition period
from
to
.


Commission File Number: 33317865Exchange
Act filing number:
050150

---

CENEX
HARVEST STATES COOPERATIVE
(Exact name of
registrant as specified in its
charter)

Minnesota
(State
or other jurisdictionof incorporation or
organization)
41-0251095
(IRS
EmployerIdentification
No.)


5500
Cenex Drive
Inver Grove Heights, Minnesota
55077
(Address of principal executive
offices)
(651)
451-5151
(Registrants telephone
number,including area
code)


---

SECURITIES
REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NONE

SECURITIES REGISTERED
PURSUANT TO SECTION 12(g) OF THE ACT:  NONE

---

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 [ ]



Indicate by check mark
if disclosure of delinquent filers pursuant to Item 405 of Regulation
S-K is not contained herein, and will not be contained, to the best of
the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or
any amendment to this Form 10-K: Not applicable

Indicate by
check mark whether the Registrant is an accelerated filer (as defined
in Rule 12b-2 of the Exchange
Act).   Yes
[ ]   No [X]



State the aggregate market
value of the voting stock held by non-affiliates of the registrant: The
registrant has no voting stock outstanding.

Indicate the
number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date: The registrant has no
common stock outstanding.



DOCUMENTS
INCORPORATED BY
REFERENCE

None.



---



CENEX
HARVEST STATES
COOPERATIVES

Explanatory
Note

This Amendment No. 1 on Form 10-K/A amends
the Registrants Annual Report on Form 10-K for the fiscal year
ended August 31, 2002, and is being filed solely to amend Item 8, Item
15(a)(1) and Item 15(a)(3) to include, pursuant to the requirements of
Section 210.3-09 of Regulation S-X and in place of those included in
the Annual Report, the separate financial statements of Ventura Foods,
LLC and subsidiary, a nonconsolidated 50% owned equity
investment. In addition, in connection with the filing of this
Amendment and pursuant to the rules of the Securities and Exchange
Commission, the Registrant is including with this Amendment certain
currently dated certifications. No other changes have been made to the
Annual Report. This Form 10-K/A does not modify or update the
disclosure contained in the Annual Report in any way other than as
required to reflect the amendments discussed above and reflected
below.

Item
8. Financial Statements and Supplementary Data

Item 8
is hereby amended to add and replace the current financial statements
of Ventura Foods, LLC and subsidiary, a non-consolidated
50% owned equity investment. The financial statements of
Ventura Foods, LLC, which are included in this Form 10-K/A following
the signatures, are hereby incorporated by reference in this Item
8.

Item 15.
Exhibits, Financial Statements and Reports Filed on Form
8-K

(a)(1) FINANCIAL
STATEMENTS

Item 15(a)(1) is hereby amended to
add and replace the
following:

|                                                                                                                                                                      |  |  |  |      | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  | ---- | 
|                                                                                                                                                                     
|Ventura
Foods, LLC and subsidiary, a non-consolidated 50% owned
equity
investment                                                                                     |  |  |  |      | 
|Independent
Auditors
Report                                                                                                                                          |  |  |  | F-27 | 
|Consolidated Balance
Sheets as of March 31, 2003 and
2002                                                                                                             |  |  |  | F-28 | 
|Consolidated
Statements of Income for the years ended March 31, 2003 and 2002, the
   three months ended March 31, 2001 and the year ended
December 31,
2000          |  |  |  | F-29 | 
|Consolidated
Statements of Members Capital for the years ended March 31, 2003
and 2002, the   three months ended March 31, 2001 and
the year ended December 31,
2000 |  |  |  | F-30 | 
|Consolidated
Statements of Cash Flows for the years ended March 31, 2003 and 2002,
the   three months ended March 31, 2001 and the year
ended December 31,
2000       |  |  |  | F-31 | 
|Notes to Consolidated
Financial Statements for the years ended March 31, 2003 and 2002, the
   three months ended March 31, 2001 and the year ended
December 31,
2000 |  |  |  | F-32 | 

(a)(3)
EXHIBITS

Item 15(a)(3) is amended to add the
following
exhibits:

|23.2 | Independent
Auditors
Consent                                                                                          
|---- | -----------------------------------------------------------------------------------------------------------------------
|99.4 | Certification
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906
of the Sarbanes-Oxley Act of
2002.
|99.5 | Certification
Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906
of the Sarbanes-Oxley Act of
2002.



---



SIGNATURES

Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended, the Registrant has duly caused this Report to
be signed on its behalf by the undersigned, thereunto duly
authorized.

CENEX HARVEST
STATES COOPERATIVES

> /s/ JOHN
> SCHMITZJohn SchmitzExecutive
> Vice President and Chief Financial
> Officer

Date:
June 27, 2003



---



SECTION
302 CERTIFICATIONS

I, John D.
Johnson, certify
that:

1.
I
have reviewed this annual report on Form 10-K/A of Cenex Harvest States
Cooperatives;2.
Based on my knowledge,
this annual 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 annual
report.3.
Based on my knowledge, the
financial statements, and other financial information included in this
annual 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 annual
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
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 annual 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 annual report (the
Evaluation Date);
andc.
presented in this annual 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 officers and I have disclosed,
based on our most recent evaluation, to the registrants auditors
and the audit committee of registrants board of directors (or
persons performing the equivalent
functions):


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; andb.
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 annual report whether 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.


Date: June 27,
2003

> /s/ John D.
> JohnsonJohn D. JohnsonPresident and
> Chief Executive
> Officer



---



SECTION
302 CERTIFICATIONS

I, John Schmitz,
certify
that:

1.
I
have reviewed this annual report on Form 10-K/A
of Cenex Harvest States
Cooperatives;2.
Based on my knowledge,
this annual 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 annual
report.3.
Based on my knowledge, the
financial statements, and other financial information included in this
annual 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 annual
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
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 annual 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 annual report (the
Evaluation Date);
andc.
presented in this annual 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 officers and I have disclosed,
based on our most recent evaluation, to the registrants auditors
and the audit committee of registrants board of directors (or
persons performing the equivalent
functions):


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; andb.
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 annual report whether 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.


Date: June 27,
2003

> /s/ John
> SchmitzJohn SchmitzExecutive Vice
> President andChief Financial
> Officer



---



INDEPENDENT
AUDITORS' REPORT

Members
Committee Ventura Foods, LLC

We have audited
the accompanying consolidated balance sheets of Ventura Foods, LLC and
subsidiary (the Company) as of March 31, 2003
and 2002 and the related consolidated statements of income,
members capital and cash flows for the years ended
March 31, 2003 and 2002, the three months ended March 31,
2001 and the year ended December 31, 2000. These financial
statements are the responsibility of the Companys management.
Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in
accordance with auditing standards generally accepted in the United
States of America. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.

In our opinion, such consolidated financial
statements present fairly, in all material respects, the financial
position of Ventura Foods, LLC and subsidiary as of March 31, 2003
and 2002 and the results of their operations and their cash flows for
the years ended March 31, 2003 and 2002, the three months ended
March 31, 2001 and the year ended December 31, 2000 in
conformity with accounting principles generally accepted in the United
States of America.

As discussed in Note 2 to the
consolidated financial statements, the Company adopted Statement of
Financial Accounting Standards No. 142, Goodwill and Other
Intangible Assets, effective April 1,
2002.

/s/ Deloitte & Touche
LLP

Los Angeles, CaliforniaJune
16, 2003

F-27

---



VENTURA
FOODS, LLC AND SUBSIDIARYCONSOLIDATED BALANCE
SHEETSMARCH 31, 2003 AND
2002

|                                                                                                                                             |  | 2003 |   | 2002        | 
|-------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | - | ----------- | 
|                                                                                                                                            
|ASSETS
(Note 4)                                                                                                                              |  |     
|CURRENT
ASSETS:                                                                                                                              |  |      |   |             | 
|Cash
and cash equivalents (Note
2)                                                                                                           |  |      | $ | 2,800,000   | 
|Trade
receivablesnet of allowance for doubtful accounts
of      $1,909,000 and $1,543,000 at 2003 and 2002,
respectively (Notes 2, 4 and
5) |  |      |   | 64,313,000  | 
|Inventories
(Notes 2, 4 and
5)                                                                                                               |  |      |   | 92,366,000  | 
|Prepaid
expenses and other current
assets                                                                                                    |  |      |   | 5,922,000   | 
|Due
from Wilsey Foods, Inc. (Note
5)                                                                                                         |  |      |   | 309,000     | 
|Derivative
contract asset (Notes 2 and
5)                                                                                                    |  |      |   | 18,703,000  | 
|                                                                                                                                            
|Total
current
assets                                                                                                                         |  |      |   | 184,413,000 | 
|                                                                                                                                            
|PROPERTY
(Notes 2 and
4):                                                                                                                    |  |      |   |             | 
|Land,
buildings and
improvements                                                                                                             |  |      |   | 102,768,000 | 
|Machinery
and
equipment                                                                                                                      |  |      |   | 139,264,000 | 
|Construction-in-progress                                                                                                                     |  |      |   | 6,905,000   | 
|Other
property                                                                                                                               |  |      |   | 10,798,000  | 
|                                                                                                                                            
|Total                                                                                                                                        |  |      |   | 259,735,000 | 
|Less
accumulated depreciation and
amortization                                                                                               |  |      |   | 106,914,000 | 
|                                                                                                                                            
|Propertynet                                                                                                                                 |  |      |   | 152,821,000 | 
|GOODWILLNet
of amortization of $18,087,000 at 2003 and 2002 (Notes 2, 3 and
8)                                                              |  |      |   | 43,156,000  | 
|TRADEMARKSNet
of amortization of $8,526,000 and $8,685,000 at 2003 and
2002      (Notes 2 and
8)                                            |  |      |   | 19,318,000  | 
|                                                                                                                                             |  |      |   |             | 
|DEFERRED
COMPENSATION PLAN TRUST (Note
6)                                                                                                    |  |      |   | 13,574,000  | 
|                                                                                                                                             |  |      |   |             | 
|OTHER
ASSETSNet of amortization of $3,520,000 and $4,310,000 at 2003
and 2002      (Notes 2 and
8)                                          |  |      |   | 4,673,000   | 
|                                                                                                                                            
|TOTAL                                                                                                                                        |  |      | $ | 417,955,000 | 
|                                                                                                                                            
|LIABILITIES
AND MEMBERS
CAPITAL                                                                                                             |  |      |   |             | 
|CURRENT
LIABILITIES:                                                                                                                         |  |      |   |             | 
|Accounts
payable (Note
5)                                                                                                                    |  |      | $ | 58,395,000  | 
|Accrued
liabilities (Note
5)                                                                                                                 |  |      |   | 36,984,000  | 
|Dividends
payable                                                                                                                            |  |      |   | 5,748,000   | 
|Bank
lines of credit (Note
4)                                                                                                                |  |      |   | 20,500,000  | 
|Current
portion of long-term debt (Note
4)                                                                                                   |  |      |   | 74,228,000  | 
|Current
portion of long-term liabilityWilsey Foods, Inc. (Note
1)                                                                           |  |      |   |             | 
|Derivative
contract liability (Notes 2 and
5)                                                                                                |  |      |   | 12,162,000  | 
|                                                                                                                                            
|Total
current
liabilities                                                                                                                    |  |      |   | 208,017,000 | 
|LONG-TERM
DEBT (Note
4)                                                                                                                      |  |      |   | 22,950,000  | 
|DEFERRED
COMPENSATION OBLIGATIONS (Note
6)                                                                                                   |  |      |   | 20,496,000  | 
|                                                                                                                                            
|Total
liabilities                                                                                                                            |  |      |   | 251,463,000 | 
|COMMITMENTS
AND CONTINGENCIES (Notes 6 and
7)                                                                                                |  |      |   |             | 
|MEMBERS
CAPITAL                                                                                                                             |  |      |   | 166,492,000 | 
|                                                                                                                                            
|TOTAL                                                                                                                                        |  |      | $ | 417,955,000 | 
|                                                                                                                                            

See
notes to consolidated financial
statements.

F-28

---



VENTURA
FOODS, LLC AND SUBSIDIARYCONSOLIDATED
STATEMENTS OF INCOMEYEARS ENDED MARCH 31, 2003 AND 2002,
THE THREE MONTHS ENDED MARCH 31, 2001AND THE YEAR ENDED
DECEMBER 31,
2000

|                                                    |  | Year
Ended March 31,
2003 |   | Year Ended March
31, 2002 |  | Three
Months Ended March 31,
2001 |             | Year
EndedDecember 31,
2000 |  
|--------------------------------------------------- |  | ------------------------- | - | ------------------------- |  | --------------------------------- | ----------- | --------------------------- | -
|                                                   
|NET SALES (Notes 2
and
5)                           |  |                           | $ | 1,096,425,000             |  | $                                 | 965,521,000 |                             | $
|COST
OF GOODS SOLD (Notes 2 and
5)                  |  |                           |   | 912,702,000               |  |                                   | 791,061,000 |                             |  
|                                                   
|GROSS
PROFIT                                        |  |                           |   | 183,723,000               |  |                                   | 174,460,000 |                             |  
|                                                   
|OPERATING
EXPENSES:                                 |  |                           |   |                           |  |                                   |             |                             |  
|Selling,
general and administrative (Notes 2 and
5) |  |                           |   | 105,424,000               |  |                                   | 91,827,000  |                             |  
|Amortization
of intangibles (Notes 2 and
8)         |  |                           |   | 223,000                   |  |                                   | 6,227,000   |                             |  
|                                                   
|Total
operating
expenses                            |  |                           |   | 105,647,000               |  |                                   | 98,054,000  |                             |  
|                                                   
|OPERATING
INCOME                                    |  |                           |   | 78,076,000                |  |                                   | 76,406,000  |                             |  
|INTEREST
EXPENSENet (Note
4)                       |  |                           |   | 6,785,000                 |  |                                   | 7,474,000   |                             |  
|OTHER
EXPENSE (INCOME) (Note
7)                     |  |                           |   | 733,000                   |  |                                   | (1,554,000  | )                           |  
|                                                   
|NET
INCOME                                          |  |                           | $ | 70,558,000                |  | $                                 | 70,486,000  |                             | $
|                                                   

See
notes to consolidated financial
statements.

F-29

---



VENTURA
FOODS, LLC AND SUBSIDIARYCONSOLIDATED
STATEMENTS OF MEMBERS CAPITALYEARS ENDED MARCH 31,
2003 AND 2002, THE THREE MONTHS ENDED MARCH 31, 2001AND THE
YEAR ENDED DECEMBER 31,
2000

|                              |  | Wilsey
Foods, Inc. |   | Cenex
Harvest States
Cooperatives |   | Total |            
|----------------------------- |  | ------------------ | - | --------------------------------- | - | ----- | -----------
|                             
|BALANCE,
JANUARY 1,
2000      |  |                    | $ | 67,315,000                        |   | $     | 44,877,000 
|Net
income                    |  |                    |   | 30,593,000                        |   |       | 26,913,000 
|Transfer
of interest (Note
1) |  |                    |   | (11,775,000                       | ) |       | 11,775,000 
|Dividends                     |  |                    |   | (23,288,000                       | ) |       | (20,720,000
|                             
|BALANCE,
DECEMBER 31,
2000    |  |                    |   | 62,845,000                        |   |       | 62,845,000 
|Net
income                    |  |                    |   | 7,184,000                         |   |       | 7,184,000  
|Dividends                     |  |                    |   | (4,157,000                        | ) |       | (4,157,000 
|                             
|BALANCE,
MARCH 31,
2001       |  |                    |   | 65,872,000                        |   |       | 65,872,000 
|Net
income                    |  |                    |   | 35,243,000                        |   |       | 35,243,000 
|Dividends                     |  |                    |   | (25,757,000                       | ) |       | (25,757,000
|                             
|BALANCE,
MARCH 31,
2002       |  |                    |   | 75,358,000                        |   |       | 75,358,000 
|Net
income                    |  |                    |   | 35,279,000                        |   |       | 35,279,000 
|Dividends                     |  |                    |   | (27,391,000                       | ) |       | (27,391,000
|                             
|BALANCE,
MARCH 31,
2003       |  |                    | $ | 83,246,000                        |   | $     | 83,246,000 
|                             

See
notes to consolidated financial
statements.

F-30

---



VENTURA
FOODS, LLC AND SUBSIDIARYCONSOLIDATED
STATEMENTS OF CASH FLOWSYEARS ENDED MARCH 31, 2003 AND
2002, THE THREE MONTHS ENDED MARCH 31, 2001AND THE YEAR
ENDED DECEMBER 31,
2000

|                                                                                            |  | Year
Ended March 31, 2003 |   | Year
Ended March 31, 2002 |   | Three
Months Ended March 31,
2001 |             | Year EndedDecember 31,
2000 |  
|------------------------------------------------------------------------------------------- |  | ------------------------- | - | ------------------------- | - | --------------------------------- | ----------- | --------------------------- | -
|                                                                                           
|CASH FLOWS
FROM OPERATING
ACTIVITIES:                                                       |  |                           |   |                           |   |                                   |             |                             |  
|Net
income                                                                                  |  |                           | $ | 70,558,000                |   | $                                 | 70,486,000  |                             | $
|Adjustments
to reconcile net income to net cash provided by
   operating
activities:        |  |                           |   |                           |   |                                   |             |                             |  
|Depreciation
and
amortization                                                               |  |                           |   | 12,416,000                |   |                                   | 12,186,000  |                             |  
|Amortization
of
intangibles                                                                 |  |                           |   | 223,000                   |   |                                   | 6,227,000   |                             |  
|Deferred
rent                                                                               |  |                           |   | 515,000                   |   |                                   |             |                             |  
|Loss
(gain) on disposal of
assets                                                           |  |                           |   | 872,000                   |   |                                   | 324,000     |                             |  
|Derivative
contract
asset                                                                   |  |                           |   | 2,637,000                 |   |                                   | (1,803,000  | )                           |  
|Changes
in operating assets and
liabilities:                                                |  |                           |   |                           |   |                                   |             |                             |  
|Trade
receivables                                                                           |  |                           |   | (7,174,000                | ) |                                   | (771,000    | )                           |  
|Inventories                                                                                 |  |                           |   | (29,567,000               | ) |                                   | 3,881,000   |                             |  
|Prepaid
expenses and other current
assets                                                   |  |                           |   | (3,639,000                | ) |                                   | (793,000    | )                           |  
|Accounts
payable                                                                            |  |                           |   | 6,350,000                 |   |                                   | (4,491,000  | )                           |  
|Accrued
liabilities                                                                         |  |                           |   | 10,685,000                |   |                                   | 2,893,000   |                             |  
|Deferred
compensation
obligations                                                           |  |                           |   | 4,815,000                 |   |                                   | 4,866,000   |                             |  
|Due
from/to
affiliates                                                                      |  |                           |   | (309,000                  | ) |                                   | 47,000      |                             |  
|                                                                                           
|Net
cash provided by operating
activities                                                   |  |                           |   | 68,382,000                |   |                                   | 93,052,000  |                             |  
|                                                                                           
|CASH
FLOWS FROM INVESTING
ACTIVITIES:                                                       |  |                           |   |                           |   |                                   |             |                             |  
|Acquisition
of
property                                                                     |  |                           |   | (16,062,000               | ) |                                   | (13,268,000 | )                           |  
|Proceeds
from sale of
assets                                                                |  |                           |   | 1,845,000                 |   |                                   | 69,000      |                             |  
|Acquisitionsnet
of cash acquired (Note
3)                                                  |  |                           |   |                           |   |                                   |             |                             |  
|Acquisition
of
trademarks                                                                   |  |                           |   |                           |   |                                   |             |                             |  
|Investment
in rabbi
trust                                                                   |  |                           |   |                           |   |                                   | (13,976,000 | )                           |  
|Other
assets                                                                                |  |                           |   | (1,332,000                | ) |                                   | (48,000     | )                           |  
|                                                                                           
|Net
cash used in investing
activities                                                       |  |                           |   | (15,549,000               | ) |                                   | (27,223,000 | )                           |  
|                                                                                           
|CASH
FLOWS FROM FINANCING
ACTIVITIES:                                                       |  |                           |   |                           |   |                                   |             |                             |  
|Repayment
of long-term
debt                                                                 |  |                           |   | (12,758,000               | ) |                                   | (12,603,000 | )                           |  
|Net
borrowings from (payments on) line of
credit                                            |  |                           |   | 12,500,000                |   |                                   | 3,000,000   |                             |  
|Payment
to Wilsey Foods, Inc. (Note
1)                                                      |  |                           |   | (491,000                  | ) |                                   | (487,000    | )                           |  
|Dividends
paid                                                                              |  |                           |   | (58,584,000               | ) |                                   | (60,589,000 | )                           |  
|                                                                                           
|Net
cash (used in) provided by financing
activities                                         |  |                           |   | (59,333,000               | ) |                                   | (70,679,000 | )                           |  
|                                                                                           
|NET
(DECREASE) INCREASE IN CASH AND   CASH
EQUIVALENTS                                      |  |                           |   | (6,500,000                | ) |                                   | (4,850,000  | )                           |  
|CASH
AND CASH EQUIVALENTS, BEGINNING OF
PERIOD                                              |  |                           |   | 9,300,000                 |   |                                   | 14,150,000  |                             |  
|                                                                                           
|CASH
AND CASH EQUIVALENTS, END OF
PERIOD                                                    |  |                           | $ | 2,800,000                 |   | $                                 | 9,300,000   |                             | $
|                                                                                           
|SUPPLEMENTAL
DISCLOSURE OF CASH FLOW   INFORMATIONCash paid
during the period for
interest |  |                           | $ | 7,183,000                 |   | $                                 | 8,129,000   |                             | $
|                                                                                           

See
notes to consolidated financial
statements.

F-31

---



VENTURA
FOODS, LLC AND SUBSIDIARYNOTES TO CONSOLIDATED
FINANCIAL STATEMENTSYEARS ENDED MARCH 31, 2003 AND 2002,
THE THREE MONTHS ENDEDMARCH 31, 2001 AND THE YEAR ENDED
DECEMBER 31,
2000

1.  GENERAL
MATTERS

Ventura Foods, LLC and its subsidiary
(the Company) is a processor and distributor of
edible oils used in food preparation and a packager of food products.
The Company sells its products to national and regional restaurant
chains, food wholesalers and retail chains.

The Company was
formed pursuant to a Joint Venture Agreement
(the Agreement) dated August 30, 1996 between
Wilsey Foods, Inc. (Wilsey) and Cenex Harvest States
Cooperatives (CHS) whereby substantially all the assets
and liabilities of Wilsey and Holsum Foods (a division of CHS) were
transferred and assigned, with certain exclusions, to the Company.
Wilsey is a majority-owned subsidiary of Mitsui & Co., Ltd. From
the period of inception through March 31, 2000, Wilsey and CHS
owned 60% and 40%, respectively, of the
Company. On March 31, 2000, Wilsey sold a 10% interest
in the Company to CHS. Accordingly, Wilsey and CHS each own
50% of the Company.

At the formation date, a
liability equal to the net deferred income tax liability of Wilsey at
August 30, 1996 was assumed by the Company and was included in
long-term liabilityWilsey Foods, Inc. The amount was payable in
five equal annual installments of $487,000 plus a final installment of
$491,000. The final installment of $491,000 was paid during fiscal
2003.

2.  ACCOUNTING
POLICIES

Basis of Presentation and
Principles of ConsolidationThe consolidated financial
statements include the accounts of Ventura Foods, LLC and its
100%-owned subsidiary, Ventura Jets, Inc. All material
intercompany transactions have been
eliminated.

Fiscal Year
EndDuring 2001, the Company changed its fiscal year
end to March 31. Prior to such change, the Companys fiscal year
end had been December 31.

Cash and Cash
EquivalentsThe Company considers all highly liquid
investments purchased with a maturity of three months or less to be
cash
equivalents.

InventoriesInventories
consist of the following at
March 31:

|                         |  | 2003 |   | 2002       | 
|------------------------ |  | ---- | - | ---------- | 
|                        
|Bulk
oil                 |  |      | $ | 38,751,000 | 
|Finished
goods           |  |      |   | 34,119,000 | 
|Ingredients
and
supplies |  |      |   | 19,496,000 | 
|                        
|Total                    |  |      | $ | 92,366,000 | 
|                        

Inventories
are accounted for at the lower of cost or market, using the first-in,
first-out method. Cost for inventories produced or modified by the
Company through a manufacturing process includes fixed and variable
production costs and raw materials costs, and in-bound freight costs.
Cost for inventories purchased for resale includes the cost of the
product and freight and handling costs incurred to place the product at
the Companys point of sale.

Derivative
Financial InstrumentsThe Companys use of
derivative financial instruments is limited to forwards, futures and
certain other delivery contracts as discussed below. The Company enters
into these contracts to limit its exposure to price volatility of
various food oils that are critical to its processing and distribution
activities. It is the Companys policy to remain substantially
hedged with respect to edible oil product price risk; derivative
contracts are used to maintain this hedged position. Forward purchase
and sales contracts with established market participants as well as
exchange traded futures contracts are entered into in amounts necessary
to protect against price changes on raw materials needed for the
Companys food oil processing and distribution activities. The
Company also enters into purchase and sales commitments with major
suppliers and customers at a specified premium or discount

F-32

---



from a future market price (Basis
Contracts). Additionally, the Companys policies do not
permit speculative trading of such contracts. All of these qualify as
derivatives under Statement of Financial Accounting Standards
(SFAS) No. 133, Accounting for Derivative
Instruments and Hedging Activities, and are stated at market
value. Changes in market value are recognized in the consolidated
statements of income, through cost of sales, in the periods such
changes occur. The adoption of SFAS No. 133 on January 1,
2001 did not have a significant impact on the Companys results
of operations, as the Company historically recorded its financial
instruments at market value. Prior to the adoption of SFAS
No. 133, the market value of futures contracts, Basis Contracts,
and forward purchase and sales contracts were recorded as a component
of inventory. Beginning with the adoption of SFAS No. 133, the
market value of these contracts is now recorded separately on the
consolidated balance sheets as derivative contract assets or
liabilities. These contracts have maturities of less than one
year.

The following summarizes the Companys various
derivative contracts outstanding at March 31, 2003 and 2002
(pounds and dollars in
thousands)

|Forward
Contracts and
Commitments |  | Pounds |  | Net
Unrealized Gain
(Loss) | 
|--------------------------------- |  | ------ |  | -------------------------- | 
|                                 
|March
31,
2003                    |  |        |  |                            | 
|Forward
purchases                 |  |        |  | 334,100                    | 
|Forward
sales                     |  |        |  | 433,300                    | 
|Basis
purchase                    |  |        |  | 259,800                    | 
|Basis
sales                       |  |        |  | 17,500                     | 
|Futures
contracts                 |  |        |  | 146,000                    | 
|                                 
|                                  |  |        |  | 1,190,700                  | 
|                                 
|March
31,
2002                    |  |        |  |                            | 
|Forward
purchases                 |  |        |  | 490,500                    | 
|Forward
sales                     |  |        |  | 454,100                    | 
|Basis
purchase                    |  |        |  | 390,300                    | 
|Basis
sales                       |  |        |  | 62,600                     | 
|Futures
contracts                 |  |        |  | 96,100                     | 
|                                 
|                                  |  |        |  | 1,493,600                  | 
|                                 

The
fair value of futures contracts is determined from quotes listed on the
Chicago Board of Trade or other market makers. Forward purchase and
sales contracts are with various counterparties, and the fair values of
such contracts, are determined from the market price of the underlying
product.

The Company is exposed to loss in the event of
nonperformance by the other parties to the contracts. However, the
Company does not anticipate nonperformance by
counterparties.

Property and
DepreciationProperty is stated at cost. Depreciation
and amortization are provided for using the straight-line method over
the estimated useful lives of the assets, as
follows:

|Buildings               |  |  |  | 40
years    | 
|----------------------- |  |  |  | ----------- | 
|Leasehold
improvements  |  |  |  | 319
years  | 
|Machinery and
equipment |  |  |  | 1025
years | 
|Other property          |  |  |  | 320
years  | 

Fair Value
of Financial InstrumentsThe Company estimates the
fair value of financial instruments using the following methods and
assumptions:

Accounts Receivable and
Accounts PayableThe carrying amounts approximate fair
value due to the short maturities of these
instruments.

Lines of
CreditThe carrying amounts approximate fair value, as the
interest rates are based upon variable reference
rates.

Long-Term DebtThe
fair value of long-term fixed rate debt is estimated based upon
prevailing market interest rates available to the Company. The Company
estimates the fair value on the $25,573,000 6.55% fixed
rate debt as of March 31, 2003 to be $27,804,000.

F-33

---



Futures
ContractsThe fair value of futures contracts (used for
hedging purposes) is determined from quotes listed principally on the
Chicago Board of Trade.

Concentration of Credit
RiskDuring the years ended March 31, 2003 and
2002, the three months ended March 31, 2001 and the year ended
December 31, 2000, net sales to one customer were 23%,
22%, 22% and 21% of total net
sales, respectively. This customer represents approximately
23% and 19% of trade receivables at
March 31, 2003 and 2002, respectively. The Company performs
ongoing credit evaluations of its customers and maintains an allowance
for potential credit losses.

The Company maintains cash
deposits with various financial institutions. The Company periodically
evaluates the credit standing of these financial institutions and has
not sustained any credit losses relating to such
balances.

Marketable
SecuritiesThe Companys marketable securities
comprise equity securities that have been classified as trading
securities. The equity securities are carried at fair market value
based upon quoted market prices. Unrealized gains and losses on equity
securities are recognized in net income and totaled $666,000 and
$(264,000) for the years ended March 31, 2003 and 2002, respectively
(see Note 6).

Goodwill and
TrademarksThe Company adopted SFAS No. 142,
Goodwill and Other Intangible Assets, effective April 1,
2002, the first day of its 2003 fiscal year. As a result, goodwill and
indefinite life intangible assets (trademarks) are no
longer amortized, but reviewed for impairment annually, or more
frequently if certain impairment indicators arise. See Note 8 for the
effect of adopting SFAS No. 142.

Other identifiable
intangible assets consist of patents, deferred financing costs and
other assets, which are amortized using the straight-line method over 5
to 15 years.

Impairment of Long-Lived
AssetsLong-lived assets, including identifiable
intangibles, are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. In performing the review for recoverability, future cash
flows expected to result from the use of the asset and its eventual
disposition are estimated. If the sum of the expected future cash flows
(undiscounted and without interest charges) is less than the carrying
amount of the asset, an impairment loss is recorded under the
discounted future cash flow method.

Advertising
CostsThe Company expenses advertising costs in the
period incurred. For the years ended March 31, 2003 and 2002, the
three months ended March 31, 2001 and the year ended
December 31, 2000, the Company incurred advertising expenses of
approximately $9,039,000, $7,100,000, $1,300,000 and $6,100,000,
respectively.

Income TaxesThe
Company is a limited liability company and has no liability for federal
and state income taxes. Income is taxed to the members based on their
allocated share of taxable income or loss. However, certain states tax
the income of limited liability companies. The Companys
liability for such state income taxes is not
significant.

Revenue
RecognitionThe Company is a processor and distributor
of edible oils used in food preparation and a packager of food
products. Revenue is recognized upon transfer of title to the customer,
which occurs generally upon shipment. In certain instances, title is
transferred upon receipt by the customer, at which time the Company
records revenue. Amounts billed to the customer as part of a sales
transaction related to shipping and handling are included in sales.
Revenue is recorded net of discounts, rebates and certain sales
incentives.

Use of EstimatesThe
preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and 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.

ReclassificationsCertain
reclassifications have been made to the prior periods financial
statements to conform to the 2003 presentation.

F-34

---



Recent Accounting
PronouncementsIn June 2001, the Financial Accounting
Standards Board (FASB) issued SFAS No. 143,
Accounting for Asset Retirement Obligations, which
addresses financial accounting and reporting for obligations associated
with the retirement of tangible long-lived assets and the associated
asset retirement costs. As required, the Company will apply the
provisions of SFAS No. 143 prospectively to retirements of
tangible long-lived assets, if any, initiated for fiscal years
beginning after June 15, 2002.

In July 2001, the FASB
issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, which addresses financial
accounting and reporting for the impairment or disposal of long-lived
assets and supersedes SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of, and the accounting and reporting provisions of
Accounting Principles Board Opinion No. 30, Reporting the
Results of OperationsReporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions.This statement retains the
requirements of SFAS No. 121 to (a) recognize an impairment
loss only if the carrying amount of a long-lived asset is not
recoverable from its undiscounted cash flows and (b) measure an
impairment loss as the difference between the carrying amount and fair
value of the asset, and establishes a single accounting model, based on
the framework established in SFAS No. 121, for long-lived assets
to be disposed of by sale. The adoption of SFAS No. 144 did not
have a material impact on the Companys consolidated financial
statements.

In November 2001, the Emerging Issues Task
Force (EITF) issued EITF Issue No. 01-09,
Accounting for Consideration Given by a Vendor to a Customer or
Reseller of the Vendors Products, which addresses the
accounting for consideration given by a vendor or a reseller of the
vendors products. This new guidance requires companies to report
certain consideration given by a vendor to a customer as a reduction in
revenues rather than as marketing expense. This consensus was required
to be adopted no later than the first quarter of 2002, and upon
adoption, companies were required to retroactively reclassify such
amounts in previously issued financial statements to comply with the
income statement classification requirements of the consensus. The
Company adopted the provisions of EITF Issue No. 01-09 during
fiscal 2003. The effect of the adoption of EITF Issue No. 01-09
was a reduction in both revenues and selling, general and
administrative expenses of $690,000, $207,000, $29,000 and $267,000 for
the years ended March 31, 2003 and 2002, the three months ended
March 31, 2001 and the year ended December 31, 2000,
respectively.

In June 2002, the FASB issued SFAS
No. 146, Accounting for Costs Associated with Exit or Disposal
Activities. SFAS No. 146 addresses financial accounting and reporting
for costs associated with exit or disposal activities and nullifies EITF Issue
No. 94-03, Liability Recognition for Certain Employee Termination
Benefits and Other Costs to Exit an Activity (Including Certain Costs Incurred
in Restructuring). This statement requires that the fair value of an initial
liability for a cost associated with an exit or disposal activity be recognized
when the liability is incurred as opposed to when the entity commits to an exit
plan, thereby eliminating the definition and requirements for recognition of
exit costs. The provisions of SFAS No. 146 are effective for exit or disposal
activities that are initiated after December 31, 2002. As required, the Company
will apply the provisions of SFAS No. 146 prospectively to exit or disposal
activities, if any, initiated after December 31, 2002.

In September 2002, the EITF issued EITF Issue
No. 02-16, Accounting by a Customer (Including a Reseller)
for Certain Consideration Received from a Vendor, which
addresses the accounting for consideration received by the reseller of
the vendors products. This new guidance provides that the
consideration represents a reimbursement of costs incurred by the
customer to sell the vendors products and is generally presumed
to be a reduction of the cost of the vendors products and,
therefore, should be characterized as a reduction of cost of sales in
the customers income statement. The Company adopted EITF Issue
No. 02-16 during fiscal 2003. The effect of the adoption of EITF Issue
No. 02-16 was a reduction in cost of goods sold and other income of
$2,987,000, $1,628,000, $256,000 and $991,000 for the years ended
March 31, 2003 and 2002, the three months ended March 31,
2001 and the year ended December 31, 2000,
respectively.

In November 2002, the FASB issued FASB
Interpretation No. (FIN) 45,
Guarantors Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of
Others.

F-35

---



FIN 45 elaborates on the disclosures to be
made by a guarantor about its obligations under certain guarantees. FIN
45 also clarifies that a guarantor is required to recognize, at the
inception of a guarantee, a liability for the fair value of the
obligation undertaken in issuing the guarantee. FIN 45 specifically
identifies certain obligations that are excluded from the provisions
related to recognizing a liability at inception; however, these
guarantees are subject to the disclosure requirements of FIN 45. The
initial recognition and measurement provisions of FIN 45 are applicable
on a prospective basis to guarantees issued or modified after December
31, 2002. The disclosure requirements are effective for all annual
periods ending after December 15, 2002. The adoption of FIN 45 did not
have a material impact on the Companys consolidated financial
statements.

On April 30, 2003, the FASB issued SFAS
No. 149, Amendment of Statement 133 on Derivative
Instruments and Hedging Activities. SFAS No. 149 amends and
clarifies accounting for derivative instruments, including certain
derivative instruments embedded in other contracts, and for hedging
activities under SFAS No. 133. The new guidance amends SFAS
No. 133 for decisions made as part of the Derivatives
Implementation Group (DIG) process that effectively
required amendments to SFAS No. 133, and decisions made in
connection with other FASB projects dealing with financial instruments
and in connection with implementation issues raised in relation to the
application of the definition of a derivative and characteristics of a
derivative that contains financing components. In addition, it
clarifies when a derivative contains a financing component that
warrants special reporting in the statement of cash flows. SFAS
No. 149 is effective for contracts entered into or modified after
June 30, 2003 and for hedging relationships designated after June 30,
2003. The Company is currently assessing, but has not yet determined,
the impact this statement will have on its consolidated financial
statements.

3.  ACQUISITIONS

During
the year ended December 31, 2000, the Company acquired
substantially all the assets and liabilities of Sona and Hollen for
$5,740,000. Sona and Hollen was a portion packing company located in
Los Alamitos, California. The acquisition has been accounted for
as a purchase, and accordingly, the purchase price has been allocated
based on the estimated fair values of the assets acquired. The excess
of the purchase price over the fair value of the assets acquired,
approximately $4,276,000, was recorded as goodwill. Prior to the
adoption of SFAS No. 142 on April 1, 2002, goodwill had been
amortized using a 15-year life (see Note 8).

The
following is a summary of the assets acquired at estimated fair market
value:

|Inventories                       |  |  | $ | 637,000   | 
|--------------------------------- |  |  | - | --------- | 
|Prepaid
expenses and other
assets |  |  |   | 208,000   | 
|Property and
equipment            |  |  |   | 600,000   | 
|Trademark                         |  |  |   | 19,000    | 
|Goodwill                          |  |  |   | 4,276,000 | 
|                                 
|Net
assets of business
acquired   |  |  | $ | 5,740,000 | 
|                                 

4.  LINES
OF CREDIT AND LONG-TERM DEBT

Lines of
CreditAt March 31, 2003, the Company had a
revolving line-of-credit agreement with a banking group to provide for
borrowings of up to an aggregate of $72,000,000. Outstanding borrowings
at March 31, 2003 and 2002 were $20,500,000 and $8,000,000,
respectively. The applicable interest rates are based, at the option of
the Company, at a London Interbank Offered Rate (LIBOR)
or a term federal funds rate (TFFR) option. The
weighted-average interest rate at March 31, 2003 and 2002 was
1.72% and 2.24%, respectively. The lines of
credit mature at varying dates between November 2003 and February
2004.

Long-Term DebtAt
March 31, 2003 and 2002, balances outstanding on term loans with a
banking group were $71,605,000 and $81,905,000, respectively. The
interest rate applicable to these term loans is based, at the option of
the Company, at a TFFR-based, LIBOR-based or a fixed rate option. The
weighted-average interest rate on such borrowings at March 31,
2003 and 2002 was 6.53% and 6.59%,
respectively. The term loans with the banking group mature on December
23, 2003.

F-36

---



At March 31, 2003 and 2002,
balances outstanding on a term loan with a bank were $25,573,000 and
$28,031,000, respectively. The agreement requires quarterly principal
and interest payments of $1,058,000. The interest rate on this term
loan is fixed at 6.55%. The term loan with the bank matures
in October 2011.

The term loans are collateralized by
substantially all property, equipment and intellectual property rights,
and the lines of credit are collateralized by substantially all trade
receivables and inventories of the Company. The lines of credit and
term loan agreements contain various covenants, including compliance
with tangible net worth (as defined) and other financial ratios,
restrictions on the payment of dividends, and restrictions on the
incurrence of additional debt.

Annual maturities of
long-term debt at March 31, 2003 are as
follows:

|2004                 |  |  | $ | 74,228,000 | 
|-------------------- |  |  | - | ---------- | 
|2005                 |  |  |   | 2,799,000  | 
|2006                 |  |  |   | 2,987,000  | 
|2007                 |  |  |   | 3,187,000  | 
|2008                 |  |  |   | 3,401,000  | 
|Thereafter           |  |  |   | 10,576,000 | 
|                    
|Total                |  |  |   | 97,178,000 | 
|Less
current
portion |  |  |   | 74,228,000 | 
|                    
|Long-term
debt       |  |  | $ | 22,950,000 | 
|                    

5.  TRANSACTIONS
WITH AFFILIATES

At March 31, 2003, the Company had a
receivable balance of $309,000 due from Wilsey for reimbursement of
expenses paid by the Company on behalf of Wilsey.

Included
in accounts payable at March 31, 2003 and 2002 were $8,035,000 and
$5,976,000, respectively, payable to CHS for purchases of oil.
Purchases from CHS for the years ended March 31, 2003 and 2002,
the three months ended March 31, 2001 and the year ended
December 31, 2000 were $66,682,000, $47,745,000, $8,575,000 and
$48,916,000, respectively. Sales to CHS for the years ended
March 31, 2003 and 2002, the three months ended March 31,
2001 and the year ended December 31, 2000 totaled $1,056,000,
$883,000, $109,000 and $950,000, respectively.

Included in
accounts payable at March 31, 2003 and 2002 were $790,000 and
$817,000, respectively, payable to Mitsui USA for the Companys
participation in Mitsui USAs insurance plans. During the
years ended March 31, 2003 and 2002, the three months ended
March 31, 2001 and the year ended December 31, 2000, the
Company recorded expenses of $9,402,000, $8,487,000, $1,380,000 and
$5,049,000, respectively, in connection with its participation in such
plans.

Included in trade receivables at March 31, 2003
and 2002 were $123,000 and $69,000, respectively, of receivables from
Mitsui USA for product sales. Sales to Mitsui USA for the years ended
March 31, 2003 and 2002, the three months ended March 31,
2001 and the year ended December 31, 2000 totaled $1,423,000,
$1,406,000, $341,000 and $1,569,000, respectively.

Forward
purchase contracts as of March 31, 2003 included commitments for
purchases of 86,964,000 pounds of oil from CHS. The Company recognized
gains (losses) of $1,081,000, $934,000, $1,788,000 and $(363,000) on
such related party commitments for the years ended March 31, 2003
and 2002, the three months ended March 31, 2001 and the year ended
December 31, 2000,
respectively.

6.  EMPLOYEE
BENEFIT PLANS

The Company has long-term incentive
arrangements for certain key executives. Benefits under the initial
plan were based on earnings over a three-to-five year period (as
defined) from January 1, 1997 through December 31, 2001. An
amount equal to the obligation incurred under the plan was contributed
to a rabbi trust that would be available to general creditors in the
event of bankruptcy. The trust holds investments primarily in
marketable securities that are recorded at market value (classified as
trading securities). The assets in the trust are to be distributed to
the employees upon retirement. The liability

F-37

---



under the arrangements was $13,574,000 and
$14,240,000 as of March 31, 2003 and 2002, respectively, and is
included in deferred compensation obligation in the accompanying
consolidated balance sheets.

On January 1, 2002, the
Company established new long-term incentive arrangements with certain
key executives. Under these arrangements, the amount of additional
compensation is based on the attainment of cumulative income-based or
equity-based targets over a two- to three-year period. At the end of
the defined periods, amounts earned by individual executives will be
contributed to a rabbi trust, unless representatives of Wilsey and CHS
elect to pay such amounts directly to the respective key executives. At
March 31, 2003 and 2002, a liability for the plan of $4,702,000
and $439,000, respectively, is classified as long-term deferred
compensation obligation in the accompanying consolidated balance
sheets.

For the years ended March 31, 2003 and 2002,
the three months ended March 31, 2001 and the year ended
December 31, 2000, the Company recognized compensation expense
under the long-term incentive arrangements of $4,264,000, $5,658,000,
$750,000 and $5,889,000, respectively.

The Company has a
combined 401(k) and defined contribution profit-sharing plan (the
Plan) covering substantially all employees not covered by
collective bargaining agreements. Under the Plan, employees can make
annual voluntary contributions not to exceed the lesser of an amount
equal to 15% of their compensation or limits established by
the Internal Revenue Code. The Company is required, by the Plan, to
make certain matching contributions of up to 4% of each
participants salary and may make discretionary profit-sharing
contributions. The Company also established a 401(k) defined
contribution plan covering employees under certain collective
bargaining agreements. Under this plan, employees can make annual
voluntary contributions of up to 15% of their compensation.
Expense for the years ended March 31, 2003 and 2002, the three
months ended March 31, 2001 and the year ended December 31,
2000 was $6,484,000, $5,855,000, $1,343,000 and $5,139,000,
respectively. Certain of the Companys union employees are
participants in multi-employer plans. Payments to multi-employer
pension plans are negotiated in various collective bargaining
agreements and aggregated $2,367,000, $1,162,000, $416,000 and
$1,641,000 for the years ended March 31, 2003 and 2002, the three
months ended March 31, 2001 and the year ended December 31,
2000, respectively. The actuarial present value of accumulated plan
benefits and net assets available for benefits to union employees under
these multi-employer pension plans is not available, as the Company
does not administer these plans.

Effective January 1,
1999, the Company established a Supplemental Executive Retirement Plan
for certain of its employees. The projected benefit obligation as of
March 31, 2003 and 2002 was $2,955,000 and $2,049,000,
respectively. A liability of $2,220,000 and $1,668,000 as of
March 31, 2003 and 2002, respectively, is included in long-term
deferred compensation obligation in the accompanying consolidated
balance sheets. The plan is unfunded. During the years ended
March 31, 2003 and 2002, the three months ended March 31,
2001 and the year ended December 31, 2000, the Company recorded an
expense related to the plan of $552,000, $111,000, $420,000 and
$379,000, respectively.

The assumptions used in the
measurement of the Companys benefit obligation are as
follows:

|                              |  | March
31 |  | December 31 |  
|----------------------------- |  | -------- |  | ----------- | -
|                             
|
|                             
|Discount
rate                 |  |          |  | 6.0         | %
|Rate
of compensation
increase |  |          |  | 3.0         | %

The
Company accrues the actuarially determined amount necessary to fund the
participants benefits in accordance with the requirements of the
Employee Retirement Income Security Act of
1974.

F-38

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7.  COMMITMENTS
AND CONTINGENCIES

Future minimum annual payments
under noncancelable operating leases with lease terms in excess of one
year at March 31, 2003 are as follows:

|2004       |  |  | $ | 7,263,000  | 
|---------- |  |  | - | ---------- | 
|2005       |  |  |   | 7,431,000  | 
|2006       |  |  |   | 5,792,000  | 
|2007       |  |  |   | 4,217,000  | 
|2008       |  |  |   | 3,659,000  | 
|Thereafter |  |  |   | 16,217,000 | 
|          
|Total      |  |  | $ | 44,579,000 | 
|          

Under
the lease agreements, the Company is obligated to pay certain property
taxes, insurance and maintenance costs. Certain leases contain renewal
and purchase options. Rental expense for the years ended March 31,
2003 and 2002, the three months ended March 31, 2001 and the year
ended December 31, 2000 under operating leases totaled $7,138,000,
$5,671,000, $1,476,000 and $5,205,000, respectively.

During
the year ended December 31, 2000, the Company received a payment
of approximately $2,400,000 in connection with the settlement of a
class action lawsuit. This amount has been recorded as a component of
other income in the accompanying consolidated statement of
income.

The Company is involved from time to time in
routine legal matters incidental to its business. The Company believes
that the resolution of such matters will not have a material adverse
effect on the Companys business, financial condition or results
of
operations.

8.  GOODWILL

In
June 2001, the FASB issued SFAS No. 141, Business
Combinations, and No. 142, Goodwill and Other
Intangible Assets. These statements, among other things,
eliminate the pooling-of-interests method of accounting for business
combinations as of June 30, 2001, eliminate the amortization of
goodwill and indefinite life intangible assets for all fiscal years
beginning after December 15, 2001, and require that goodwill and
indefinite life intangible assets be reviewed annually for impairment,
or more frequently if impairment indicators arise. The Company adopted
SFAS Nos. 141 and 142 with respect to new goodwill as of July 1,
2001 and adopted SFAS No. 142 with respect to existing goodwill
and indefinite life intangible assets as of April 1, 2002, the first
day of its 2003 fiscal year. The adoption of SFAS No. 141 did not
impact the Companys financial condition or results of
operations. Upon the adoption of SFAS No. 142, the Company ceased
amortizing existing goodwill and trademarks.

The Company
completed the transitional test of goodwill and trademarks during 2003.
Based on the result of the test, the Company determined that there was
no impairment of goodwill and trademarks as of April 1, 2002.
Pursuant to SFAS No. 142, goodwill and trademarks will be tested
for impairment at least annually and more frequently if an event occurs
which indicates that goodwill or trademarks may be impaired. During
2003, the Company abandoned the use of certain trademarks with a net
book value of $100,000.

A reconciliation of net income to
the amount adjusted for the exclusion of goodwill and trademarks
amortization follows for the years ended March 31, 2003 and 2002,
the three months ended March 31, 2001 and the year ended
December 31,
2000:

|                       |  | March
31 |   | December 31 | 
|---------------------- |  | -------- | - | ----------- | 
|                      
|
|                      
|Reported
net
income    |  |          | $ | 70,558,000  | 
|Add:                   |  |          |   |             | 
|Goodwill
amortization  |  |          |   |             | 
|Trademark
amortization |  |          |   |             | 
|                      
|Adjusted
net
income    |  |          | $ | 70,558,000  | 
|                      

Amortization
expense for other intangible assets subject to amortization was
$223,000, $402,000, $124,000 and $746,000 for the years ended
March 31, 2003 and 2002, the three months ended March 31,

F-39

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2001 and the year ended December 31,
2000, respectively. Estimated annual amortization for each of the years
in the five-year period ending March 31, 2008 is
$180,000.

9.  QUARTERLY
INFORMATION (UNAUDITED)

As discussed in Note 2,
the Company changed its fiscal year end to March 31. Audited
financial information for the three months ended March 31, 2001
has been included herein. For comparison purposes, selected unaudited
financial information for the three months ended March 31, 2000 is
as
follows:

|Sales              |  |  | $ | 211,815,000 | 
|------------------ |  |  | - | ----------- | 
|Cost
of goods sold |  |  |   | 172,818,000 | 
|Net
income         |  |  |   | 17,123,000  | 
|Total
assets       |  |  |   | 362,382,000 | 
|Total
liabilities  |  |  |   | 231,789,000 | 
|Members
capital   |  |  |   | 130,593,000 | 

F-40

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