10-K

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

ý
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 2, 2002

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                                      to                                     

Commission File Number 1-6699

INTERNATIONAL MULTIFOODS CORPORATION
(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	41-0871880 (IRS Employer Identification No.)
110 Cheshire Lane, Suite 300, Minnetonka, Minnesota (Address of principal executive offices)	55305 (Zip Code)

(952) 594-3300
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock (par value $.10 per share)	New York Stock Exchange
Preferred Stock Purchase Rights	New York Stock Exchange

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 ý    No o

        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.    ý

        The aggregate market value of Common Stock, par value $.10 per share, held by non-affiliates of the registrant (see Item 12 hereof) as of May 1, 2002 (based on the closing sale price of $28.31 per share as reported in the consolidated transaction reporting system on such date) was $530,386,491.

        The number of shares outstanding of the registrant's Common Stock, par value $.10 per share, as of May 1, 2002 was 19,043,069.

DOCUMENTS INCORPORATED BY REFERENCE

        Portions of the registrant's Annual Report to Stockholders for the fiscal year ended March 2, 2002 are incorporated by reference into Parts I and II.

        Portions of the registrant's Proxy Statement for the Annual Meeting of Stockholders to be held June 21, 2002 are incorporated by reference into Part III.

PART I

Item 1.    Business.

General

        International Multifoods Corporation, incorporated in Delaware in 1969 as the successor to a business founded in 1892, operates food manufacturing businesses in the United States and Canada and a foodservice distribution business in the United States.

        We manage our businesses through four operating segments: U.S. Consumer Products, U.S. Foodservice Products, Canadian Foods and Multifoods Distribution Group. Financial information for the last three fiscal years for each of our business segments, which is included in Note 16 to our Consolidated Financial Statements on pages 46 and 47 of our Annual Report to Stockholders for the fiscal year ended March 2, 2002 ("2002 Annual Report to Stockholders"), is incorporated herein by reference.

U.S. Consumer Products

        On November 13, 2001, we acquired the Pillsbury dessert and specialty products business and the Pet evaporated milk and dry creamer business of The Pillsbury Company ("Pillsbury") and the United States Robin Hood business, the Farmhouse flavored rice and pasta side-dish products business and the La Piña, Red Band and Softasilk retail flour businesses of General Mills, Inc. ("General Mills") (the "Acquisition"). These acquired businesses comprise our U.S. Consumer Products segment.

        Through our U.S. Consumer Products segment, we market and distribute flour and scratch ingredients, dessert mixes, baking mixes, ready-to-spread frostings, potato mixes, dry breakfast mixes and syrups primarily under the Pillsbury, Martha White, Jim Dandy, Gladiola, Robin Hood, La Piña, Red Band, Softasilk, Hungry Jack and Idaho Spuds brand names for sale through retail channels in the United States. In addition, we market and sell flavored rice and pasta side-dish products under our Farmhouse brand name. Products in our portfolio are strong brands in the packaged foods industry, some having operating histories more than 100 years.

        Our Pillsbury branded products currently include 100 stock-keeping units ("SKUs") in seven general subcategories: cake mix, ready-to-spread frosting, brownie mix, muffin mix, cookie mix, quickbread mix and flour and scratch ingredients. Our Martha White branded products include 84 SKUs in the three major subcategories of muffin mixes, brownie mixes and scratch ingredients. We also market cornbread mix under the Gladiola brand name and grits under the Jim Dandy brand name. We currently market a total of 31 SKUs under the Hungry Jack brand, including seven pancake mix SKUs, five syrup SKUs and 19 potato mix SKUs. The 19 potato mix SKUs include products across three product lines: core mashed potatoes, specialty potatoes and mashed potatoes with gravy. We market 11 SKUs in the flour and scratch subcategory under our Robin Hood, La Piña, Red Band and Softasilk brands. We also market 27 pasta and rice side-dish SKUs under our Farmhouse brand.

        In connection with the Acquisition, we entered into a retail trademark license agreement pursuant to which Pillsbury has licensed to us the exclusive right to use certain Pillsbury trademarks, including the Pillsbury "barrelhead" and "doughboy" related trademarks, on a royalty-free basis for an initial term of 20 years, on certain dessert and baking mix and flour products and other baking related products in retail channels in the United States and its territories and commonwealths, including Puerto Rico. We also have the non-exclusive right to sell covered products bearing these trademarks to stores of United States-based retailers in Mexico and Canada. This license is renewable by us for unlimited additional 20-year terms on a royalty-free basis after the initial 20-year term.

        Also in connection with the Acquisition, we entered into several agreements with General Mills related to the production of the products of our U.S. Consumer Products segment. Under a conversion

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plan agreement, General Mills is converting its Toledo, Ohio plant (the "Toledo Plant") for our use. We currently anticipate that this conversion will be completed by November 2002, at which time we will purchase the Toledo Plant from General Mills. The conversion will be considered complete only if and when a supervisory panel consisting of three members (one appointed by each of us, General Mills and a third-party trustee appointed by the parties to monitor the conversion) determines that the production lines installed by General Mills in the Toledo Plant meet certain product quality, cost and efficiency standards when they are operated under normal conditions. The Toledo Plant has approximately 600,000 square feet of production and warehouse space. When the conversion is complete, we will operate eight production lines in the Toledo Plant, including six production lines for dry mixes and two production lines for ready-to-spread frosting.

        Under a co-pack agreement, General Mills is manufacturing and packaging certain products for our U.S. Consumer Products segment until the conversion is completed. The co-pack agreement generally requires us to purchase all of our requirements for products covered by the agreement from General Mills unless General Mills is unable to fill our orders or we desire to produce the products ourselves. Under a transition services agreement, General Mills is providing various transition services to us for the businesses acquired in the Acquisition, including services relating to raw material procurement and warehousing. General Mills will provide these services to us for varying time periods ranging from 30 days after the closing of the Acquisition for certain services to the date that the conversion is completed for others. Third party co-packers other than General Mills manufacture and package most of the remaining products of our U.S. Consumer Products segment.

        Our U.S. Consumer Products segment sells its products to supermarket chains, retail wholesalers and other retail channels. Our customers include Fleming Companies, Inc., Kroger Co., SuperValu, Inc. and Wal-Mart Stores, Inc. CROSSMARK, Inc., a privately held, nationwide sales and marketing organization, provides retail sales and marketing services for our U.S. Consumer Products brands. We also employ a direct sales force.

        Our U.S. Consumer Products segment competes in the United States retail food manufacturing industry. Our Pillsbury and Martha White brands compete primarily within the dessert and baking mixes, or DBM, market. This market has remained relatively constant over the past three years at approximately $1.8 billion of sales and includes mixes for cakes, cookies, brownies, muffins and quickbread, as well as ready-to-spread frosting and ingredients used in scratch baking such as flour. Within the DBM category, we compete primarily with Betty Crocker, which is produced by General Mills, and Duncan Hines, which is produced by Aurora Foods. Our Hungry Jack brand competes in three primary market categories: pancake mix, dehydrated potatoes and table syrup. We compete primarily with Aunt Jemima, which is produced by PepsiCo's Quaker Foods segment, in pancake mix and Betty Crocker in dehydrated potatoes.

U.S. Foodservice Products.

        Our U.S. Foodservice Products segment produces approximately 1,400 products for retail, wholesale and in-store bakeries and foodservice customers primarily in the United States. Through this segment, we produce baking mix products, including mixes for breads, rolls, bagels, donuts, muffins, Danishes, cakes, cookies, brownies, bars and pizza crusts, as well as fillings, icings and frostings. Baking mix products are marketed under our Multifoods, Pillsbury and Jamco brands. In addition, we manufacture and market frozen batters, doughs and desserts under our Multifoods, Gourmet Baker and Fantasia brands. Our products are marketed through our own direct sales force of sales and technical support personnel, as well as through a network of brokers and bakery distributors, which in turn sell our products to retail bakers and other customers. Our customers include Ahold USA, Inc., Costco Wholesale Corporation, Dunkin' Donuts, Pizza Hut, Inc. and Wal-Mart Stores, Inc.

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        In connection with the Acquisition, we entered into a foodservice trademark license agreement with Pillsbury under which we have the exclusive right to use certain Pillsbury trademarks, including the Pillsbury "barrelhead" and "doughboy" related trademarks, on a royalty-free basis for seven years after closing on certain non-custom dry mix products in packages of seven pounds or less and non-custom frosting products in packages of 11 pounds or less in foodservice channels in the United States and its territories and commonwealths, including Puerto Rico, and in certain limited instances and on a non-exclusive basis, Mexico and Canada. This license is non-renewable.

        Our U.S. Foodservice Products segment encounters significant competition in the bakery products market. We are a leading supplier of baking mixes to foodservice operators and retail and in-store bakeries in the United States and we compete with several large corporations and regional producers of baking mixes. With respect to frozen bakery products, we compete primarily in the foodservice and in-store bakery markets with several large corporations and numerous regional suppliers that have select product offerings. We compete on the basis of product quality and uniqueness, product convenience, brand loyalty, timely delivery and customer service, as well as price.

        Canadian Foods.    Our Canadian Foods segment consists of our retail and commercial foods businesses in Canada. Canadian Foods manufactures flour and baking mixes, primarily under the Robin Hood brand, and pickles and relish condiments, primarily under the Bick's brand for sale through retail and commercial channels in the United States and Canada. Under agreements with Aurora Foods, we also manufacture, market and distribute Aurora Foods' Duncan Hines brand baking mixes in Canada. More than 40 retail baking mixes are sold in Canada under our Robin Hood brand, while retail flour is sold in Canada under the Robin Hood, Golden Temple, Brodie, Cream of the West, and Monarch brands. In the United States, we sell retail flour under our Golden Temple brand. We also sell hot cereals in Canada under our Robin Hood, Old Mill, Red River and Purity brands. In addition, we manufacture and market pickles and relish condiments to consumers in Canada, where our Bick's brand is the market leader. We also sell condiments in Canada under the Habitant, Gattuso, Woodman's, Rose and McLaren's labels.

        The commercial foods business of our Canadian Foods segment produces pickles and relish condiments, baking mix products, wheat flour and oat products for retail, in-store and wholesale bakeries and foodservice customers in Canada and the United States. Such products are sold primarily under our Robin Hood and Bick's brands.

        The products of our Canadian Foods segment are marketed primarily through our own sales organization, supported by advertising and other promotional activities. Our customers include Loblaw Companies Limited, The TDL Group Limited and Sobeys Inc. Our competitors in Canada include both large corporations and regional producers. We compete on the basis of product quality, product convenience, the ability to identify and satisfy emerging consumer preferences, brand loyalty, timely delivery and customer service, as well as price.

Multifoods Distribution Group

        Our Multifoods Distribution Group segment is a distributor of food and related products to the foodservice industry in the United States. Our Multifoods Distribution Group segment leases or owns a fleet of approximately 490 tractors, 580 trailers and 50 straight trucks, most of which are equipped with an on board computer system from which drivers and managers obtain delivery performance and route information. We operate 27 distribution centers located nationwide. We also operate 11 cash and carry locations from which customers can make purchases. No single customer accounts for a significant portion of the segment's sales. Deliveries are made directly to customers, generally once a week, from distribution centers located nationwide. We market our services and products through our own foodservice and vending sales organizations.

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        Our Multifoods Distribution Group segment is a distributor of food and related products in the United States to independent pizza restaurants and other casual-dining, limited-menu operators, including sandwich shops, Mexican restaurants, movie theaters, fund-raising groups, commissaries and stadium and recreational concession stands. Our customers include Jack-in-the-Box, Noble Roman's, Togo's, Quizno's, Schlotzsky's and Subway. We distribute a broad selection of cheeses, meats, snacks, paper goods, cleaning supplies and other products, including pizza ingredients sold under our Ultimo! brand as well as major national brands.

        Our Multifoods Distribution Group segment is also the only nationwide U.S. vending distributor, serving approximately 13,000 vending and office coffee service operators and other concessionaires. Our vending distribution customers include American Multi-Cinema, Inc., Aramark, Inc., Compass Group USA, Inc. (Canteen) and Sodexho Operations, LLC. We distribute and sell more than 5,000 food products consisting primarily of candy, snacks, frozen and refrigerated products, pastries, hot beverages and juices. Most of these products are nationally advertised brand products. We also sell certain products, such as premium ground and whole-bean coffee, hot cocoa, creamer and sugar, under our own Grindstone Café private label.

        Through our Better Brands, Inc. subsidiary, our Multifoods Distribution Group segment also operates a broadline distribution business in the northeastern United States. Based in Windsor, Connecticut, this subsidiary distributes a broad selection of food and related products to restaurants and other foodservice operators such as universities and schools, health care institutions and casinos.

        The distribution business is highly competitive. We compete with several national and regional broadline distributors, regional specialty foodservice distributors and local independent distributors. While we are the only nationwide vending distributor, we encounter significant competition from regional and local distributors as well as warehouse clubs. We compete on the basis of competitive pricing, the availability of a wide variety of products, a national distribution network and prompt and accurate delivery of orders. We believe that our pizza expertise, our vending expertise and the value- added services we provide our customers (such as merchandising support, special incentive programs and company-sponsored trade shows) differentiate us in part from our competitors.

        In February 2001, we announced that we were exploring strategic alternatives for our Multifoods Distribution Group segment. Our review was delayed during fiscal 2002 as we focused our efforts on completing the Acquisition and positioning our existing manufacturing operations for future growth. Although we are unable to provide a specific timetable, we expect to complete the review in fiscal 2003.

Other Information Relating to the Business of Multifoods

        Sources of Supply and Raw Materials.    With respect to our U.S. Consumer Products, U.S Foodservice Products and Canadian Foods segments, raw materials generally are available from numerous sources and we believe that we will continue to be able to obtain adequate supplies. In Canada, we minimize risks associated with wheat market price fluctuations by hedging our wheat and flour inventories, open wheat purchase contracts and open flour sales contracts with wheat futures contracts. In the United States, we also enter into futures contracts to reduce the risk of price fluctuations on certain anticipated raw material purchases. See Note 8 to the Consolidated Financial Statements which are incorporated by reference in Part II, Item 8, hereof.

        Our Multifoods Distribution Group segment purchases products directly from numerous manufacturers, processors and independent suppliers. Several of these sources are large corporations from which we purchase significant quantities of brand name candy and snacks for our vending business and cheese for our foodservice business. Our distribution business is not dependent upon any single supplier and alternative sources of supply are generally available.

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        Trademarks and Other Intellectual Property.    We own numerous trademarks, service marks and product formulae which are important to our businesses. In addition, we use certain Pillsbury trademarks, including the Pillsbury "barrelhead" and "doughboy" related trademarks, on a royalty-free basis, under the terms of the retail trademark license agreement and the foodservice trademark license agreement described above. The most significant trademarks and service marks are identified by appearing in all italicized letters above. Most of our trademarks and service marks are registered.

        Seasonality.    Our U.S. Consumer Products, U.S. Foodservice Products and Canadian Foods segments experience some seasonality of their businesses due to increased demand for their products during the fall and holiday baking seasons. As a result, sales volumes of the U.S. Consumer Products, U.S. Foodservice Products and Canadian Foods segments are generally higher during our fiscal third quarter. Our Multifoods Distribution Group segment does not experience material seasonal variations in its sales volumes.

        Environmental Regulation.    Our facilities in the United States and Canada are subject to federal, state, provincial and local environmental laws and regulations. Compliance with these provisions has not had, and we do not expect such compliance to have, any material adverse effect upon our capital expenditures, net earnings or competitive position.

        On January 15, 1998, VIP's Industries, Inc. ("VIP's") filed a third-party complaint against us in the Circuit Court of Linn County, Oregon. The third-party complaint alleges that we, through our former subsidiary Crown Industries, Inc. ("Crown"), caused the environmental contamination of certain real property, and the groundwater beneath the real property, located in Albany, Oregon. At the time of our acquisition of Crown in 1976, Crown owned the subject real property and leased it to an operator of a retail gasoline service station. We sold the subject real property in 1981. The claims asserted by VIP's and the original plaintiffs in the lawsuit have been settled. However, crossclaims made by Ultramar, Inc., another defendant in the lawsuit, are continuing. Ultramar has alleged that we are strictly liable under Oregon law for costs of removal of contamination and remediation of real property adjacent to the VIP's real property. The Ultramar real property was also owned by Crown at the time of our acquisition of Crown and was sold by us in 1981 at the same time we sold the VIP's real property. Ultramar is seeking contribution for its costs of remedial action related to the contamination of its real property and the groundwater beneath the real property, which costs are claimed by Ultramar to be as much as $8.8 million. We believe that we have sustainable defenses to the claims asserted by Ultramar and we are vigorously defending the lawsuit. The lawsuit is currently scheduled for trial in June 2002. In addition, we have tendered defense of the lawsuit to our insurance carriers during the period of time at issue in the lawsuit. Liberty Mutual Insurance Co., our primary insurance carrier during such period, has accepted defense of the lawsuit but has advised us that it will not indemnify Multifoods for liability arising from the claims asserted in the lawsuit. We continue to believe that the claims asserted in the Ultramar lawsuit are covered by our insurance policies. Therefore, we have commenced a lawsuit in the Circuit Court of Multnomah County, Oregon against Liberty Mutual and another insurer, TIG Insurance Co., to enforce coverage under our policies with these insurers for any liability arising from claims asserted in the Ultramar lawsuit.

        Employees.    As of March 2, 2002, we and our subsidiaries had 4,680 employees.

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Cautionary Statement Relevant to Forward-Looking Information

        This Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, we may from time to time make written and oral forward-looking statements. These forward-looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning our operations and financial performance and condition. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. We caution that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, successful completion of the integration of the businesses acquired in the Acquisition; reliance on General Mills to provide material transition and co-pack services to our U.S. Consumer Products segment, including the conversion of the Toledo Plant for our use; the results of our review of strategic alternatives for Multifoods Distribution Group; the impact of competitive products and pricing; changes in consumer preferences and tastes or perceptions of health-related issues; effectiveness of advertising or market-spending programs; market or weather conditions that may affect the costs of grain, cheese, other raw materials, fuel and labor; changes in laws and regulations; fluctuations in interest rates; the inability to collect on a $6 million insurance claim related to the theft of product in St. Petersburg, Russia; fluctuations in foreign exchange rates; risks commonly encountered in international trade; and other factors as may be discussed in our reports filed with the Securities and Exchange Commission.

Item 2.    Properties.

        Our principal executive offices are located in Minnetonka, Minnesota in leased office space. Several of our subsidiaries also own or lease office space. We operate numerous processing and distribution facilities throughout the United States and Canada. We believe that our facilities are suitable and adequate for current production or distribution volumes. The following is a description of our properties as of March 2, 2002.

U.S. Consumer Products

        As discussed in Item 1 above, under our conversion plan agreement with General Mills, General Mills is converting its Toledo Plant for our use. We currently anticipate that this conversion will be completed by November 2002, at which time we will purchase the Toledo Plant from General Mills. The Toledo Plant has approximately 600,000 square feet of production and warehouse space. When the conversion is complete, we will operate eight production lines in the Toledo Plant, including six production lines for dry mixes and two production lines for ready-to-spread frosting.

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U.S. Foodservice Products and Canadian Foods

        We manufacture the products of our U.S. Foodservice Products and Canadian Foods segments in 17 owned and leased processing facilities across the United States and Canada, as described in the following table:

Location	Primary Products	Size	Owned/Leased
Bonner Springs, Kansas	Bakery Mix/Frozen Bakery	100,000 s.f.	Owned
Burlington, Ontario	Bakery Mix	65,000 s.f.	Owned
Burnaby, British Columbia	Frozen Bakery	15,000 s.f.	Leased
Burnaby, British Columbia	Frozen Bakery	32,800 s.f.	Leased
Delhi Township, Ontario	Pickle Tank Farm	15 acres	Owned
Dunnville, Ontario	Pickles and Relish Condiments	98,300 s.f.	Owned
Elyria, Ohio	Bakery Mix	56,400 s.f.	Owned
La Mirada, California	Bakery Mix	100,860 s.f.	Leased
Lockport, New York	Bakery Mix	89,300 s.f.	Owned
Malden, Massachusetts	Bakery Fillings	12,000 s.f.	Leased
Montreal, Quebec	Flour Mill	203,000 s.f.	Owned
Montreal, Quebec	Bakery Mix	48,500 s.f.	Owned
Pt. Colborne, Ontario	Flour Mill	330,000 s.f.	Owned/Leased*
Saskatoon, Saskatchewan	Flour & Oat Mill/ Bakery Mix	230,000 s.f.	Owned
Sedalia, Missouri	Frozen Bakery	48,500 s.f.	Owned
Simcoe, Ontario	Frozen Bakery	65,000 s.f.	Owned
Winnipeg, Manitoba	Frozen Bakery	72,000 s.f.	Owned

*

We own the building and lease the land at our Pt. Colborne facility.

        Our U.S. Consumer Products, U.S. Foodservice Products and Canadian Foods segments also operate two research and development laboratories.

Multifoods Distribution Group

        We own 12 and lease 15 distribution centers aggregating approximately 2.77 million square feet for our Multifoods Distribution Group segment. These distribution centers are located in Tempe, Arizona; Anaheim, Fremont, Livermore, Modesto and Ontario, California; Denver, Colorado; Windsor, Connecticut; Kissimmee, Florida; Austell, Georgia; Woodridge, Illinois; Indianapolis, Indiana; Shawnee, Kansas; Louisville, Kentucky; Belleville, Michigan; Maple Grove and Rice, Minnesota; Springfield, Missouri; Parsippany and Swedesboro, New Jersey; Greensboro, North Carolina; Twinsburg, Ohio; Portland, Oregon; Memphis, Tennessee; and Dallas(2) and Houston, Texas.

        Our distribution business also operates 11 cash-and-carry distribution locations, which are separate from our other distribution centers.

Item 3.    Legal Proceedings.

        Neither Multifoods nor any of its subsidiaries is a party to any legal proceeding that is material to the business or financial condition of Multifoods. See the information under the heading "Other Information Relating to the Business of Multifoods—Environmental Regulation" in Item 1 above for a description of environmental matters in which Multifoods is involved.

Item 4.    Submission of Matters to a Vote of Security Holders.

        No matters were submitted to a vote of security holders of Multifoods during the fourth quarter of the fiscal year ended March 2, 2002.

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EXECUTIVE OFFICERS OF MULTIFOODS.

        The information contained in Item 10 in Part III hereof under the heading "Executive Officers of Multifoods" is incorporated by reference in Part I of this Report.

PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.

        Our Common Stock is listed on the New York Stock Exchange. The high and low sales prices for our Common Stock as reported in the consolidated transaction reporting system and the amount of the cash dividends paid on our Common Stock for each quarterly period within the two most recent fiscal years, shown in Note 17 to our Consolidated Financial Statements on pages 48 and 49 of the 2002 Annual Report to Stockholders, are incorporated herein by reference.

        As of May 1, 2002, there were 3,998 holders of record of our Common Stock.

Item 6.    Selected Financial Data.

        The information for fiscal years 1998 through 2002 in the "Five-Year Comparative Summary" on page 21 of the 2002 Annual Report to Stockholders under the headings "Consolidated Summary of Operations," "Year-End Financial Position" and "Dividends Paid" is incorporated herein by reference. The information contained in Note 2 ("Businesses Acquired"), Note 3 ("Discontinued Operations") and Note 5 ("Unusual Items") to Multifoods's Consolidated Financial Statements on pages 36 through 38 of the 2002 Annual Report to Stockholders is also incorporated herein by reference.

Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations.

        The information under the heading "Management's Discussion and Analysis" on pages 22 through 29 of the 2002 Annual Report to Stockholders is incorporated herein by reference.

Item 7A.    Quantitative and Qualitative Disclosures About Market Risk.

        The section under the heading "Management's Discussion and Analysis" entitled "Market Risk Management" on page 29 of the 2002 Annual Report to Stockholders is incorporated herein by reference.

Item 8.    Financial Statements and Supplementary Data.

        Multifoods' Consolidated Financial Statements as of March 2, 2002 and March 3, 2001, and for each of the fiscal years in the three-year period ended March 2, 2002, the Notes to Multifoods' Consolidated Financial Statements and the Report of Independent Auditors on pages 30 through 50 of the 2002 Annual Report to Stockholders are incorporated herein by reference.

Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

        None.

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PART III

Item 10.    Directors and Executive Officers of the Registrant.

        The section under the heading "Election of Directors" on pages 5 through 10 and the section entitled "Section 16(a) Beneficial Ownership Reporting Compliance" on page 22 of the Proxy Statement of International Multifoods Corporation dated May 17, 2002 ("2002 Proxy Statement") are incorporated herein by reference.

Executive Officers of Multifoods

        The following sets forth the name, age and business experience for at least the past five years of each of our executive officers as of May 1, 2002. Unless otherwise noted, the positions described are positions with Multifoods or its subsidiaries.

Name	Age	Positions Held	Period
Gary E. Costley	58	Chairman of the Board and     Chief Executive Officer Chairman of the Board,     President and Chief     Executive Officer Dean of the Babcock     Graduate School of     Management at Wake     Forest University	November 2001 to present 1997 to 2001 1995 to 1996
Frank W. Bonvino	60	Senior Vice President, General     Counsel and Secretary Vice President, General     Counsel and Secretary	November 2001 to present 1992 to 2001
John E. Byom	48	Vice President—Finance and     Chief Financial Officer President, U.S. Foods Vice President—Finance,     North America Foods	March 2000 to present 1999 to 2000 1995 to 1999
Randall W. Cochran	48	Vice President, Supply Chain Vice President, Manufacturing     Effectiveness, the Kellogg     Company (food     manufacturer) Vice President, Operations,     Convenience Foods     Division of the     Kellogg Company	January 2002 to present 1998-2001 1993- 1998
Ralph P. Hargrow	50	Vice President, Human     Resources and     Administration Vice President, Human     Resources Senior Vice President—     Human Resources     & Administration of     Rollerblade, Inc.     (in-line skate manufacturer)	June 2000 to present 1999 to 2000 1994 to 1998

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Dennis R. Johnson	50	Vice President and Controller,     and Vice President—     Finance and Chief     Financial Officer,     Multifoods Distribution     Group Vice President and Controller	June 2000 to present 1995 to 2000
Gregory J. Keup	43	Vice President and Treasurer Assistant Treasurer	March 2000 to present 1996 to 2000
Daryl R. Schaller	58	Vice President, Research and     Development Food Industry Consultant Senior Vice President,     Scientific Affairs,     the Kellogg Company (food     manufacturer)	November 2001 to present 1997-2001 1994-1997
Jill W. Schmidt	43	Vice President,     Communications and     Investor Relations Vice President,     Communications	March 2000 to present 1997 to 2000
Dan C. Swander	58	President and Chief Operating     Officer Principal, Swander Pace & Co.     and Member, KSA     Worldwide (consultants     to the food, packaged goods     and retailing industries) Chairman and Managing     Director, Swander Pace &     Co.	November 2001 to present 2000-2001 1987-2000
Donald H. Twiner	61	Vice President and President,     Robin Hood Multifoods Inc. President, Robin Hood     Multifoods Inc.	June 1999 to present 1997 to 1999
James H. White	37	Vice President and President,     U.S. Consumer Products Category Vice President, The     Pillsbury Company     (food manufacturer) Business Vice President, The     Pillsbury Company Business Team Leader, The     Pillsbury Company	November 2001 to present 1999-2001 1998-1999 1996-1998

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Michael J. Wille	42	Vice President and President,     Multifoods Foodservice     Products Division Vice President Marketing,     North American     Institutional Division,     Ecolab, Inc. (cleaning     supplies and equipment) Cargill Foods Group     Marketing and Sales     Director, Cargill, Inc. (food     manufacturer)	December 2001 to present 2000-2001 1992-2000
Robert S. Wright	55	Senior Vice President and     President, U.S. Foodservice     Operations and Multifoods     Distribution Group Senior Vice President and     President, U.S. Foodservice     Operations Vice President and President,     North America Foods	August 2000 to present 1999 to 2000 1995 to 1999

        The executive officers of Multifoods are elected annually by the Board of Directors with the exception of the Presidents of our business units, who hold appointed offices.

Item 11.    Executive Compensation.

        The section under the heading "Election of Directors" entitled "Compensation of Directors" on pages 9 and 10 and the section entitled "Executive Compensation" on pages 14 through 20 of the 2002 Proxy Statement are incorporated herein by reference.

Item 12.    Security Ownership of Certain Beneficial Owners and Management.

        The section entitled "Security Ownership of Certain Beneficial Owners and Management" on pages 3 through 5 of the 2002 Proxy Statement is incorporated herein by reference.

        For purposes of computing the market value of our Common Stock held by non-affiliates of Multifoods on the cover page of this Report, all executive officers and directors of Multifoods are considered to be affiliates of Multifoods. This does not represent an admission by us or any such person as to the affiliate status of such person.

Item 13.    Certain Relationships and Related Transactions.

        The section under the heading "Security Ownership of Certain Beneficial Owners and Management" entitled "Certain Relationships and Related Transactions" on page 5 of the 2002 Proxy Statement is incorporated herein by reference.

12

PART IV

Item 14.    Exhibits, Financial Statement Schedules and Reports on Form 8-K.

(a)

Documents Filed as a Part of this Report

1.    Financial Statements

        The following consolidated financial statements of International Multifoods Corporation and subsidiaries and the Report of Independent Auditors thereon, included in the 2002 Annual Report to Stockholders, are incorporated by reference in Part II, Item 8, hereof:

Consolidated Statements of Earnings—Years ended
    March 2, 2002, March 3, 2001 and February 29, 2000

Consolidated Balance Sheets—March 2, 2002 and March 3, 2001

Consolidated Statements of Cash Flows—Years ended
    March 2, 2002, March 3, 2001 and February 29, 2000

Consolidated Statements of Shareholders' Equity—Years ended
    March 2, 2002, March 3, 2001 and February 29, 2000

Notes to Consolidated Financial Statements

Report of Independent Auditors

2.    Financial Statement Schedules

        The consolidated financial statement schedule of International Multifoods Corporation and subsidiaries and the Independent Auditors' Report thereon required to be filed as part of this Report are listed below and are included at the end of this Report.

Independent Auditors' Report

Schedule II—Valuation and Qualifying Accounts

        All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and, therefore, have been omitted.

3.    Exhibits

3.1	Restated Certificate of Incorporation of International Multifoods Corporation, as amended to date (incorporated herein by reference to Exhibit 3.1 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 28, 1993).
3.2	Bylaws of International Multifoods Corporation, as amended to date (incorporated herein by reference to Exhibit 3.2 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 29, 2000).
4.1	Credit Agreement, dated as of September 28, 2001, among International Multifoods Corporation, Robin Hood Multifoods Inc., the several lenders from time to time parties thereto, Rabobank International, as Documentation Agent, U.S. Bank National Association and UBS Warburg LLC, as Syndication Agents, and Canadian Imperial Bank of Commerce, as U.S. Administrative Agent and Canadian Administrative Agent (incorporated herein by reference to Exhibit 4.1 to Multifoods' Quarterly Report on Form 10-Q for the quarter ended December 1, 2001).
4.2	Fiscal Agency Agreement, dated as of December 17, 2001, among International Multifoods Corporation, as Issuer, Diageo plc, as Guarantor, JP Morgan Chase Bank, as Fiscal Agent and Principal Paying Agent, and J.P. Morgan Bank Luxembourg S.A., as Paying Agent (incorporated herein by reference to Exhibit 4.1 to Multifoods' Quarterly Report on Form 10-Q for the quarter ended December 1, 2001) .

13

4.3	Certificate of Designations of Series A Junior Participating Preferred Capital Stock of International Multifoods Corporation (incorporated herein by reference to Exhibit 4.7 to Multifoods' Annual Report on Form 10-K for the fiscal year ended March 3, 2001).
	Multifoods hereby agrees to furnish to the Securities and Exchange Commission upon request copies of all other instruments defining the rights of holders of long-term debt of International Multifoods Corporation and its consolidated subsidiaries.
10.1	Share Rights Agreement, dated as of September 15, 2000, between International Multifoods Corporation and Wells Fargo Bank Minnesota, N.A., as Rights Agent (incorporated herein by reference to Exhibit 1 to Multifoods' Registration Statement on Form 8-A dated September 22, 2000).
10.2	1997 Stock-Based Incentive Plan of International Multifoods Corporation, as amended, (incorporated herein by reference to Exhibit 10.2 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 28, 1997, Exhibit 10.3 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 28, 1998 and Exhibit 10.3 to Multifoods' Annual Report on Form 10-K for the fiscal year ended March 3, 2001).*
10.3	Amended and Restated 1989 Stock-Based Incentive Plan of International Multifoods Corporation (incorporated herein by reference to Exhibit 10.1 to Multifoods' Quarterly Report on Form 10-Q for the quarter ended August 31, 1993).*
10.4	1986 Stock Option Incentive Plan of International Multifoods Corporation (incorporated herein by reference to Exhibit 4 to Multifoods' Registration Statement on Form S-8 (Registration No. 33-6223)).*
10.5	Management Incentive Plan of International Multifoods Corporation, Amended and Restated as of March 1, 1998 (incorporated herein by reference to Exhibit 10.7 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 28, 1998).*
10.6	First Amendment to Management Incentive Plan of International Multifoods Corporation, as Amended and Restated as of March 1, 1998.*
10.7	Management Benefit Plan of International Multifoods Corporation, Restated Effective January 1, 1997, as further amended (incorporated herein by reference to Exhibit 10.7 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 28, 1997 and Exhibit 10.10 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 28, 1998).*
10.8	Trust Agreement, dated July 30, 1987, between International Multifoods Corporation and Norwest Bank Minnesota, National Association, as successor trustee to Bank of America NT and SA, relating to the Management Benefit Plan of International Multifoods Corporation (incorporated herein by reference to Exhibit 10.11 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 28, 1993).*
10.9	Compensation Deferral Plan for Executives of International Multifoods Corporation, Amended and Restated as of September 17, 1993, as further amended (incorporated herein by reference to Exhibit 10.5 to Multifoods' Quarterly Report on Form 10-Q for the quarter ended November 30, 1993 and Exhibit 10.10 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 28, 1997).*
10.10	Supplemental Deferred Compensation Plan of International Multifoods Corporation, Adopted Effective April 1, 1997 (incorporated herein by reference to Exhibit 10.11 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 28, 1997).*

14

10.11	Employment Agreement, dated as of November 1, 1996, between International Multifoods Corporation and Gary E. Costley, as amended (incorporated herein by reference to Exhibit 10.1 to Multifoods' Quarterly Report on Form 10-Q for the quarter ended November 30, 1996, Exhibit 10.16 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 28, 1998 and Exhibit 10.1 to Multifoods' Quarterly Report on Form 10-Q for the quarter ended December 1, 2001).*
10.12	Form of Revised and Restated Severance Agreement between International Multifoods Corporation and each of Multifoods' executive officers, other than Gary E. Costley (incorporated herein by reference to Exhibit 10.2 to Multifoods' Quarterly Report on Form 10-Q for the quarter ended November 30, 1993).*
10.13	Letter Agreement, dated July 10, 1995, between International Multifoods Corporation and Robert S. Wright regarding benefits arrangements (incorporated herein by reference to Exhibit 10.19 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 29, 1996).*
10.14	Memorandum of understanding, dated March 29, 1996, between International Multifoods Corporation and Robert S. Wright regarding supplemental retirement benefits (incorporated herein by reference to Exhibit 10.20 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 29, 1996).*
10.15	Memorandum of understanding, dated September 20, 1996, between Frank W. Bonvino and International Multifoods Corporation regarding supplemental retirement benefits (incorporated herein by reference to Exhibit 10.21 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 28, 1999).*
10.16	Amendment to Supplemental Retirement Agreement, dated March 23, 2000, between Frank W. Bonvino and International Multifoods Corporation (incorporated herein by reference to Exhibit 10.22 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 29, 2000).*
10.17	Severance Agreement, dated November 13, 2001, between Dan C. Swander and International Multifoods Corporation.*
10.18	Memorandum of understanding, dated November 13, 2001, between Dan C. Swander and International Multifoods Corporation regarding supplemental retirement benefits.*
10.19	Form of Indemnity Agreement between International Multifoods Corporation and each of Multifoods' executive officers (incorporated herein by reference to Exhibit 10.19 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 28, 1993).*
10.20	Fee Deferral Plan for Non-Employee Directors of International Multifoods Corporation, Amended and Restated as of September 17, 1993, as further amended (incorporated herein by reference to Exhibit 10.7 to Multifoods' Quarterly Report on Form 10-Q for the quarter ended November 30, 1993 and Exhibit 10.26 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 28, 1997).*
10.21	Deferred Income Capital Accumulation Plan for Directors of International Multifoods Corporation, Amended and Restated as of September 17, 1993 (incorporated herein by reference to Exhibit 10.8 to Multifoods' Quarterly Report on Form 10-Q for the quarter ended November 30, 1993).*
10.22	Form of Indemnity Agreement between International Multifoods Corporation and each non-employee director of the Company (incorporated herein by reference to Exhibit 10.21 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 28, 1993).*

15

10.23	Stock Purchase Agreement, dated as of August 6, 1999, by and between International Multifoods Corporation and Gruma S.A. de C.V. (incorporated herein by reference to Exhibit 2.1 to Multifoods' Current Report on Form 8-K dated August 18, 1999).
10.24	Amended and Restated Asset Purchase and Sale Agreement, dated as of October 24, 2001, by and among General Mills, Inc., The Pillsbury Company and International Multifoods Corporation (incorporated herein by reference to Exhibit 2.1 to Multifoods' Current Report on Form 8-K dated November 13, 2001).
10.25	Closing Agreement, dated November 13, 2001, by and among General Mills, Inc., The Pillsbury Company and International Multifoods Corporation (incorporated herein by reference to Exhibit 2.2 to Multifoods' Current Report on Form 8-K dated November 13, 2001).
10.26	Retail Trademark License Agreement, dated November 13, 2001, between The Pillsbury Company and International Multifoods Corporation (incorporated herein by reference to Exhibit 10.2 to Multifoods' Quarterly Report on Form 10-Q for the quarter ended December 1, 2001).
11	Computation of Earnings (Loss) Per Common Share.
12	Computation of Ratio of Earnings to Fixed Charges.
13	2002 Annual Report to Stockholders (only those portions expressly incorporated by reference herein shall be deemed filed with the Securities and Exchange Commission).
21	List of significant subsidiaries of International Multifoods Corporation.
23	Consent of KPMG LLP.

*

Management contract or compensatory plan or arrangement required to be filed as an exhibit to Form 10-K pursuant to Item 14(c) of this Report.

(b)

Reports on Form 8-K

During the quarter ended March 2, 2002, Multifoods filed a Current Report on Form 8-K/A dated November 13, 2001, relating to Multifoods' acquisition of the Pillsbury dessert and specialty products business and the Pet evaporated milk and dry creamer business of The Pillsbury Company and the United States Robin Hood business, the Farmhouse flavored rice and pasta side-dish products business and the La Piña, Red Band and Softasilk retail flour businesses of General Mills, Inc., and including financial statements of businesses acquired and pro forma financial information.

(c)

See Exhibit Index and Exhibits attached to this Report.



(d)

See Financial Statement Schedules included at the end of this Report.

16

SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) 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.

	INTERNATIONAL MULTIFOODS CORPORATION
Dated: May 20, 2002	By:	/s/  GARY E. COSTLEY Gary E. Costley, Ph.D. Chairman of the Board and Chief Executive Officer

        Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/  GARY E. COSTLEY Gary E. Costley, Ph.D.	Chairman of the Board and Chief Executive Officer (Principal Executive Officer) and Director	May 20, 2002
/s/  JOHN E. BYOM John E. Byom	Vice President—Finance, and Chief Financial Officer (Principal Financial Officer)	May 20, 2002
/s/  DENNIS R. JOHNSON Dennis R. Johnson	Vice President and Controller (Principal Accounting Officer)	May 20, 2002
/s/  CLAIRE L. ARNOLD Claire L. Arnold	Director	May 20, 2002
/s/  JAMES M. JENNESS James M. Jenness	Director	May 20, 2002

17

/s/  NICHOLAS L. REDING Nicholas L. Reding	Director	May 20, 2002
/s/  JACK D. REHM Jack D. Rehm	Director	May 20, 2002
/s/  LOIS D. RICE Lois D. Rice	Director	May 20, 2002
/s/  RICHARD K. SMUCKER Richard K. Smucker	Director	May 20, 2002
/s/  DOLPH W. VON ARX Dolph W. von Arx	Director	May 20, 2002

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Independent Auditors' Report

The Board of Directors and Shareholders of
International Multifoods Corporation:

Under date of April 8, 2002, we reported on the consolidated balance sheets of International Multifoods Corporation and subsidiaries as of March 2, 2002 and March 3, 2001, and the related consolidated statements of earnings, cash flows and shareholders' equity for each of the years in the three-year period ended March 2, 2002, as contained in the 2002 Annual Report to Stockholders. These consolidated financial statements and our report thereon are incorporated by reference in the Annual Report on Form 10-K for the fiscal year ended March 2, 2002. In connection with our audits of the aforementioned consolidated financial statements, we also have audited the related consolidated financial statement schedule listed in Item 14. The consolidated financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion on the consolidated financial statement schedule based on our audits.

In our opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ KPMG LLP

KPMG LLP

Minneapolis, Minnesota
April 8, 2002

Schedule II

INTERNATIONAL MULTIFOODS CORPORATION AND SUBSIDIARIES
Valuation and Qualifying Accounts
Three years ended March 2, 2002
(in thousands)

			Additions
Description	Balance at beginning of year		Net charges to costs and expenses		(Additions)/ Deductions			Balance at end of year
Allowance deducted from assets for doubtful receivables:
Year ended March 2, 2002	$	4,211	$	2,977	$	4,432	(a)	$	2,756
Year ended March 3, 2001	$	4,938	$	2,345	$	3,072	(a)	$	4,211
Year ended February 29, 2000	$	3,034	$	1,847	$	(57)	(a)	$	4,938

Note: (a) (Additions)/Deductions include accounts charged off, net of recoveries, and foreign currency translation adjustments, which arise from changes in current rates of exchange.

INDEX TO EXHIBITS
TO ANNUAL REPORT ON FORM 10-K OF
INTERNATIONAL MULTIFOODS CORPORATION
FOR THE FISCAL YEAR ENDED MARCH 2, 2002

3.1	Restated Certificate of Incorporation of International Multifoods Corporation, as amended to date (incorporated herein by reference to Exhibit 3.1 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 28, 1993).
3.2	Bylaws of International Multifoods Corporation, as amended to date (incorporated herein by reference to Exhibit 3.2 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 29, 2000).
4.1	Credit Agreement, dated as of September 28, 2001, among International Multifoods Corporation, Robin Hood Multifoods Inc., the several lenders from time to time parties thereto, Rabobank International, as Documentation Agent, U.S. Bank National Association and UBS Warburg LLC, as Syndication Agents, and Canadian Imperial Bank of Commerce, as U.S. Administrative Agent and Canadian Administrative Agent (incorporated herein by reference to Exhibit 4.1 to Multifoods' Quarterly Report on Form 10-Q for the quarter ended December 1, 2001).
4.2	Fiscal Agency Agreement, dated as of December 17, 2001, among International Multifoods Corporation, as Issuer, Diageo plc, as Guarantor, JP Morgan Chase Bank, as Fiscal Agent and Principal Paying Agent, and J.P. Morgan Bank Luxembourg S.A., as Paying Agent (incorporated herein by reference to Exhibit 4.1 to Multifoods' Quarterly Report on Form 10-Q for the quarter ended December 1, 2001).
4.3	Certificate of Designations of Series A Junior Participating Preferred Capital Stock of International Multifoods Corporation (incorporated herein by reference to Exhibit 4.7 to Multifoods' Annual Report on Form 10-K for the fiscal year ended March 3, 2001).
	Multifoods hereby agrees to furnish to the Securities and Exchange Commission upon request copies of all other instruments defining the rights of holders of long-term debt of International Multifoods Corporation and its consolidated subsidiaries.
10.1	Share Rights Agreement, dated as of September 15, 2000, between International Multifoods Corporation and Wells Fargo Bank Minnesota, N.A., as Rights Agent (incorporated herein by reference to Exhibit 1 to Multifoods' Registration Statement on Form 8-A dated September 22, 2000).
10.2	1997 Stock-Based Incentive Plan of International Multifoods Corporation, as amended, (incorporated herein by reference to Exhibit 10.2 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 28, 1997, Exhibit 10.3 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 28, 1998 and Exhibit 10.3 to Multifoods' Annual Report on Form 10-K for the fiscal year ended March 3, 2001).*

10.3	Amended and Restated 1989 Stock-Based Incentive Plan of International Multifoods Corporation (incorporated herein by reference to Exhibit 10.1 to Multifoods' Quarterly Report on Form 10-Q for the quarter ended August 31, 1993).*
10.4	1986 Stock Option Incentive Plan of International Multifoods Corporation (incorporated herein by reference to Exhibit 4 to Multifoods' Registration Statement on Form S-8 (Registration No. 33-6223)).*
10.5	Management Incentive Plan of International Multifoods Corporation, Amended and Restated as of March 1, 1998 (incorporated herein by reference to Exhibit 10.7 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 28, 1998).*
10.6	First Amendment to Management Incentive Plan of International Multifoods Corporation, as Amended and Restated as of March 1, 1998.*
10.7	Management Benefit Plan of International Multifoods Corporation, Restated Effective January 1, 1997, as further amended (incorporated herein by reference to Exhibit 10.7 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 28, 1997 and Exhibit 10.10 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 28, 1998).*
10.8	Trust Agreement, dated July 30, 1987, between International Multifoods Corporation and Norwest Bank Minnesota, National Association, as successor trustee to Bank of America NT and SA, relating to the Management Benefit Plan of International Multifoods Corporation (incorporated herein by reference to Exhibit 10.11 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 28, 1993).*
10.9	Compensation Deferral Plan for Executives of International Multifoods Corporation, Amended and Restated as of September 17, 1993, as further amended (incorporated herein by reference to Exhibit 10.5 to Multifoods' Quarterly Report on Form 10-Q for the quarter ended November 30, 1993 and Exhibit 10.10 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 28, 1997).*
10.10	Supplemental Deferred Compensation Plan of International Multifoods Corporation, Adopted Effective April 1, 1997 (incorporated herein by reference to Exhibit 10.11 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 28, 1997).*
10.11	Employment Agreement, dated as of November 1, 1996, between International Multifoods Corporation and Gary E. Costley, as amended (incorporated herein by reference to Exhibit 10.1 to Multifoods' Quarterly Report on Form 10-Q for the quarter ended November 30, 1996, Exhibit 10.16 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 28, 1998 and Exhibit 10.1 to Multifoods' Quarterly Report on Form 10-Q for the quarter ended December 1, 2001).*
10.12	Form of Revised and Restated Severance Agreement between International Multifoods Corporation and each of Multifoods' executive officers, other than Gary E. Costley (incorporated herein by reference to Exhibit 10.2 to Multifoods' Quarterly Report on Form 10-Q for the quarter ended November 30, 1993).*

2

10.13	Letter Agreement, dated July 10, 1995, between International Multifoods Corporation and Robert S. Wright regarding benefits arrangements (incorporated herein by reference to Exhibit 10.19 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 29, 1996).*
10.14	Memorandum of understanding, dated March 29, 1996, between International Multifoods Corporation and Robert S. Wright regarding supplemental retirement benefits (incorporated herein by reference to Exhibit 10.20 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 29, 1996).*
10.15	Memorandum of understanding, dated September 20, 1996, between Frank W. Bonvino and International Multifoods Corporation regarding supplemental retirement benefits (incorporated herein by reference to Exhibit 10.21 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 28, 1999).*
10.16	Amendment to Supplemental Retirement Agreement, dated March 23, 2000, between Frank W. Bonvino and International Multifoods Corporation (incorporated herein by reference to Exhibit 10.22 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 29, 2000).*
10.17	Severance Agreement, dated November 13, 2001, between Dan C. Swander and International Multifoods Corporation.*
10.18	Memorandum of understanding, dated November 13, 2001, between Dan C. Swander and International Multifoods Corporation regarding supplemental retirement benefits.*
10.19	Form of Indemnity Agreement between International Multifoods Corporation and each of Multifoods' executive officers (incorporated herein by reference to Exhibit 10.19 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 28, 1993).*
10.20	Fee Deferral Plan for Non-Employee Directors of International Multifoods Corporation, Amended and Restated as of September 17, 1993, as further amended (incorporated herein by reference to Exhibit 10.7 to Multifoods' Quarterly Report on Form 10-Q for the quarter ended November 30, 1993 and Exhibit 10.26 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 28, 1997).*
10.21	Deferred Income Capital Accumulation Plan for Directors of International Multifoods Corporation, Amended and Restated as of September 17, 1993 (incorporated herein by reference to Exhibit 10.8 to Multifoods' Quarterly Report on Form 10-Q for the quarter ended November 30, 1993).*
10.22	Form of Indemnity Agreement between International Multifoods Corporation and each non-employee director of the Company (incorporated herein by reference to Exhibit 10.21 to Multifoods' Annual Report on Form 10-K for the fiscal year ended February 28, 1993).*
10.23	Stock Purchase Agreement, dated as of August 6, 1999, by and between International Multifoods Corporation and Gruma S.A. de C.V. (incorporated

3

	herein by reference to Exhibit 2.1 to Multifoods' Current Report on Form 8-K dated August 18, 1999).
10.24	Amended and Restated Asset Purchase and Sale Agreement, dated as of October 24, 2001, by and among General Mills, Inc., The Pillsbury Company and International Multifoods Corporation (incorporated herein by reference to Exhibit 2.1 to Multifoods' Current Report on Form 8-K dated November 13, 2001).
10.25	Closing Agreement, dated November 13, 2001, by and among General Mills, Inc., The Pillsbury Company and International Multifoods Corporation (incorporated herein by reference to Exhibit 2.2 to Multifoods' Current Report on Form 8-K dated November 13, 2001).
10.26	Retail Trademark License Agreement, dated November 13, 2001, between The Pillsbury Company and International Multifoods Corporation (incorporated herein by reference to Exhibit 10.2 to Multifoods' Quarterly Report on Form 10-Q for the quarter ended December 1, 2001).
11	Computation of Earnings (Loss) Per Common Share.
12	Computation of Ratio of Earnings to Fixed Charges.
13	2002 Annual Report to Stockholders (only those portions expressly incorporated by reference herein shall be deemed filed with the Securities and Exchange Commission).
21	List of significant subsidiaries of International Multifoods Corporation.
23	Consent of KPMG LLP.

        *Management contract or compensatory plan or arrangement required to be filed as an exhibit to Form 10-K pursuant to Item 14(c) of this Report.

4

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PART I
PART II
PART III
PART IV
SIGNATURES
INTERNATIONAL MULTIFOODS CORPORATION AND SUBSIDIARIES Valuation and Qualifying Accounts Three years ended March 2, 2002 (in thousands)
INDEX TO EXHIBITS TO ANNUAL REPORT ON FORM 10-K OF INTERNATIONAL MULTIFOODS CORPORATION FOR THE FISCAL YEAR ENDED MARCH 2, 2002

EX-10.6

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Exhibit 10.6

FIRST AMENDMENT TO
MANAGEMENT INCENTIVE PLAN
OF
INTERNATIONAL MULTIFOODS CORPORATION

As Amended and Restated Effective as of March 1, 1998

        Section 3.1 titled "Performance Based Awards" is hereby amended to read in its entirety as follows:

        3.1    Performance Based Awards.    The Participants for an Award Year shall be eligible to receive an award of incentive compensation upon the attainment of performance targets selected by the Committee that are established based upon one or more of the following performance measures (these performance measures may be applied on an absolute or comparative basis, and may be applied at the corporate, affiliate, group, unit or division level):

(a)

economic value added ("EVA®") reflecting net operating profits after taxes less a capital charge with such adjustments as are deemed appropriate by the Committee;



(b)

earnings per share;



(c)

net income;



(d)

return on assets;



(e)

return on equity; and/or



(f)

operating earnings.

        The performance targets shall be designated by the Committee prior to or within 90 days following the commencement of each Award Year and may relate to one or any combination of two or more of corporate, affiliate, group, unit, division or individual performance. The Committee, in the exercise of its discretion, shall determine, as a percentage of base annual salary, the amount of the Target Award for each Participant, and the performance targets that must be met as a condition to an award of incentive compensation equal to the Target Award or an award of incentive compensation less than or greater than the Target Award. The Committee, in the exercise of its discretion, also may establish an incentive bank in the name of each Participant which shall be credited or charged in such manner as is deemed appropriate by the Committee in the event performance exceeds or falls short of the performance targets, with the incentive compensation payable in subsequent Award Years adjusted in such manner as is deemed appropriate by the Committee to account for the positive or negative balance in the incentive bank of the Participant. For purposes of this Section 3.1, the term "base annual salary" means the base annual salary paid

by Multifoods and its subsidiaries to an employee for services rendered during the Award Year, exclusive of commissions, fringe benefits, expense allowances, incentive compensation and other similar payments or benefits, but inclusive of amounts contributed from base annual salary by means of salary reduction to the Supplemental Deferred Compensation Plan of International Multifoods Corporation, the Employees' Voluntary Investment and Savings Plan of International Multifoods Corporation or to the Multifoods Flexible Spending Account Plan (or any other plan maintained by Multifoods or a subsidiary of Multifoods that is intended to qualify under Sections 125 or 401(k) of the Code).

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Exhibit 10.6

FIRST AMENDMENT TO MANAGEMENT INCENTIVE PLAN OF INTERNATIONAL MULTIFOODS CORPORATION As Amended and Restated Effective as of March 1, 1998

EX-10.17

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Exhibit 10.17

SEVERANCE AGREEMENT
(TERMINATION OF EMPLOYMENT)

        THIS AGREEMENT (the "Agreement") is made and entered into as of the 13^th, day of November, 2001, by and between INTERNATIONAL MULTIFOODS CORPORATION, a Delaware corporation (the "Company"), having its principal offices at 110 Cheshire Lane, Minnetonka, Minnesota 55305 and DAN C. SWANDER, whose office address is at 110 Cheshire Lane, Minnetonka, Minnesota 55305 ("Executive").

        WHEREAS, the Executive was employed by the Company and elected President and Chief Operating Officer of the Company on the date of this Agreement; and

        WHEREAS, the Company is willing to provide the Executive with a severance benefit if the Executive's termination of employment is initiated by the Company as hereinafter described, in consideration of certain covenants and agreements by the Executive, all as hereinafter described in this Agreement.

        NOW, THERFORE, IN CONSIDERATION OF THE FOREGOING RECITALS AND THE TERMS AND CONDITIONS OF THIS AGREEMENT, HEREINAFTER SET FORTH, IT IS AGREED:

Severance Benefit

        1.1    Eligibility.    Executive will be eligible to receive the severance benefit, described in Section 1.2 of this Agreement, if the Executive's termination of employment is initiated by the Company other than for "Cause" (hereinafter defined). The Executive shall not be eligible to receive the severance benefit described in Section 1.2 of this Agreement, if a "Change of Control" event has occurred and the Executive has received or is entitled to receive a payment under the "Severance Agreement (Change of Control)". The Company's obligation to pay a severance benefit to Executive on the termination of the Executive's employment under this Agreement is in lieu of any obligation of the Company to pay a severance benefit to Executive under any severance pay policy of the Company now or hereafter in effect.

        1.2    Benefit Amount.    The severance benefit will be calculated in a single lump-sum benefit, and will be equal to the Executive's annual base salary in effect immediately prior to the Executive's termination of employment.

        1.3.    Form of Benefit.    The severance benefit will be paid to Executive in the form of a single lump-sum payment, less applicable withholding taxes.

        1.4.    Payment Date.    The severance benefit will be paid to Executive as soon as administratively practicable after the Executive's termination of employment.

        1.5    Survivor Benefit.    If Executive becomes eligible for a severance benefit but dies before the severance benefit is paid, the benefit will be paid to the first of the following persons in order of priority: (i) Executive's surviving spouse, (ii) Executive's surviving children in equal shares, and (iii) Executive's estate.

Executive's Covenants

        2.1    Executive's Covenant Not to Compete.    In part consideration of this Agreement set forth in Section 1.1 through 1.5, inclusive, of this Agreement, Executive covenants and agrees that for a period of one (1) year from and after the date of the Executive's termination of employment (the "Non-Competition Period"), Executive will refrain from carrying on, whether as a principal, agent, investor, employee, employer, consultant, shareholder, partner or in any other individual or representative capacity whatsoever, anywhere in the United States of America, or its territories and possessions, and Mexico and Canada, any business in competition with the manufacturing businesses conducted by the Company, or any subsidiary of the Company, at the date of the Executive's termination of employment; provided, however that the Executive may own up to one percent (1%) of any outstanding class of equity securities of a company engaged in any manufacturing business conducted by the Company at the date of the Executive's termination of employment, which are publicly traded on a domestic or foreign stock exchange or on a domestic or foreign over the counter market, without violating this covenant not to compete.

        2.2    Executive's Covenant Not to Solicit.    In part consideration of this Agreement set forth in Section 1.1 through 1.5, inclusive, of this Agreement, Executive covenants and agrees that during the Non-Competition Period, Executive will not (i) solicit any employee of the Company, or any subsidiary of the Company, for employment or encourage any employee of the Company, or any subsidiary of the Company, to terminate his or her employment with the Company, and (ii) solicit or encourage any current or prospective customer or supplier of the Company, or any subsidiary of the Company, from terminating or changing its relationship with the Company or any subsidiary of the Company.

        2.3    Executives' Covenants of Confidentiality and Non-Disclosure.    In part consideration of this Agreement set forth in Section 1.1 through 1.5, inclusive, of this Agreement, Executive covenants and agrees with the Company, that Executive will maintain in strict confidence and not disclose to any corporation, partnership or other entity or person, any confidential information including, but not limited to, any non-public information obtained by Executive relating to the Company and its subsidiaries, and its businesses, plans, organization, information systems, present and prospective customers, customer buying patterns or requirements, products, techniques, methods, cost, pricing, price methods, margins, rebates, and promotional allowances, trade secrets or any other proprietary information of the Company or any of its subsidiaries, to which Executive had access to or knowledge of during Executive's employment by the Company. Executive agrees that all confidential information, trade secrets and other proprietary information of the Company, are and shall remain the property of the Company at all times after his termination of employment. Executive further agrees that none of the confidential information, trade secrets and any other proprietary information of the Company, nor any part thereof, shall be removed from the premises of the Company, in original or duplicate form or transmitted verbally, by electronic means or otherwise before or after the Executive's date of termination. Executive recognizes and acknowledges that all confidential information, trade secrets and other proprietary information of the Company are valuable to the Company and the disclosure or use of the same would cause irreparable harm to the Company.

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        2.4    Executive's Covenant to Execute and Deliver Release Agreement    In part consideration for this Agreement set forth in Section 1.1 through 1.5, inclusive, of this Agreement, Executive covenants and agrees that he will execute and deliver a Release Agreement, providing for a release of claims against the Company and its subsidiaries and the directors, officers, employees, representatives and agents of each, in form reasonably prescribed by the Company, effective as of date of Executive's termination of Employment.

        2.5    Executive's Covenant Not to Disparage the Company    In part consideration for this Agreement set forth in Section 1.1 through 1.5, inclusive, of this Agreement, Executive covenants and agrees that he will not, in any way, disparage the Company or any of its subsidiaries and affiliates, or any of its directors, officers and employees, or any of its products or services, after the date of Executive's termination of Employment.

Miscellaneous

        3.1    Definitions.    The following terms are used in this Agreement:

"Cause", as used in this Agreement shall mean: (i) the willful and continued failure of the Executive to perform substantially the Executive's duties with the Company or one of its affiliates (other than any such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to the Executive by the Board or the Chief Executive Officer of the Company which specifically identifies the manner in which the Board or Chief Executive Officer believes that the Executive has not substantially performed the Executive's duties, or (ii) the willful engaging by the Executive in illegal conduct or gross misconduct which, in either such case, is materially and demonstrably injurious to the Company. For purposes of this provision, no act or failure to act, on the part of the Executive, shall be considered "willful" unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive's action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer or a senior officer of the Company or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company.

"Change of Control", as used in this Agreement shall mean:

(a)    The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (i) the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that

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for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (c) hereof; or

(b)    Individuals who, as of the date hereof, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(c)    Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a "Business Combination"), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

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(d)    Approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

"Severance Agreement (Change of Control") shall mean the Severance Agreement (Change of Control), dated as of November 13, 2001, by and between the Company and the Executive

        3.2    Interpretation.    The Company and Executive agree that if any clause of Sections 2.1 through 2.5 of this Agreement shall be held by any court or other tribunal of competent jurisdiction to be illegal, invalid or unenforceable, the remainder of such provision shall not thereby be affected and shall be given full effect. The Company and Executive further agree that if any court construes any of Sections 2.1 through 2.5 of this Agreement to be illegal, invalid or unenforceable because of the duration of such provision, area or matter covered thereby, such court shall reduce the duration, area, or matter of either such provision, and, in its reduced form, such provision shall then be enforceable and shall be enforced.

        3.3.    Governing Law/Construction.    This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota, without reference to principles or conflict of laws. The captions of this Agreement are not part of the provisions of this Agreement and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.

        3.4    No Effect on Employment Rights.    This Agreement is not an employment agreement and nothing in this Agreement will confer upon the Executive the right to be retained in the employ of the Company, or limit any right of the Company to discharge the Executive or otherwise deal with the Executive without regard to the existence of this Agreement.

        3.5    Entire Agreement.    This Agreement contains the entire agreement and understanding by and between the parties hereto with respect to the subject matter hereof, and supersedes all prior oral and/or written agreements by and between the parties hereto with respect to the subject matter hereof.

        3.6.    FICA Taxes/Withholding.    To the extent that benefit accruals hereunder are taken into account as amounts deferred under a non-qualified deferred compensation plan under Code section 3121(v), and thus are subject to tax under Code section 3101 ("FICA"), the Company may calculate the amount deferred and withhold against other compensation paid to Executive in any manner determined by the Company to be appropriate under Code section 3121(v).

        3.7    Other Taxes/Withholding.    The Company may withhold from any amounts payable under this Agreement such federal, state, local or other taxes as shall be required to be withheld pursuant to any applicable law or regulation.

        3.8    Remedies.    In the event of a breach or threatened breach of any provision of this Agreement by the Executive, the Company shall be entitled to

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injunctions, both preliminary and final, enjoining and restraining such breach or threatened breach, without any obligation to post bond, and that such remedies shall be in addition to all other remedies available at law or in equity

        3.9.    Assignment.    The rights and obligations of the Executive under this Agreement shall not be assignable, transferable or delegable in whole or in part by the Executive. This Agreement shall be binding upon the successors and assigns of the Company.

        IN WITNESS WHEREOF, the parties, intending to be legally bound, have executed and delivered this Agreement as of the 13^th day of November, 2001.

INTERNATIONAL MULTIFOODS CORPORATION
/s/ Ralph P. Hargrow
By:	Ralph P. Hargrow
Its:	Vice President, Human Resources and Administration
EXECUTIVE
/s/ Dan C. Swander Dan C. Swander

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Exhibit 10.17

SEVERANCE AGREEMENT (TERMINATION OF EMPLOYMENT)

EX-10.18

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Exhibit 10.18

[INTERNATIONAL MULTIFOODS CORPORATION LOGO]

Memo

November 13, 2001

LAW DEPARTMENT

TO:	Dan C. Swander
FROM:	Ralph P. Hargrow
SUBJECT:	Supplemental Retirement Benefit

        The intent of this memorandum is to set forth the terms and conditions of the supplemental retirement benefit provided under Paragraph 6 of your employment offer letter dated November 13, 2001.

        Paragraph 6 of your employment offer letter provides that you will be recommended for participation in the Supplemental Deferred Compensation Plan of International Multifoods Corporation ("DCP") and the Management Benefit Plan of International Multifoods Corporation ("MBP"). You also will participate in the Multifoods Pension Equity Plan ("PEP"). Paragraph 6 of your employment offer letter further provides that you will receive additional retirement benefits equal to what you would have received under the DCP, MBP and PEP if your service counted one and one-half times for both benefit accrual and vesting purposes.

        The PEP is a "qualified" defined benefit pension plan that provides a benefit based on compensation, age and years of "Credited Service." As a qualified plan, it is subject to certain benefit limits imposed under the Code(1).

        The MBP is a nonqualified excess benefit plan that generally provides the additional benefits that would have been provided under the PEP if the limits imposed under Code sections 401(a)(17) and 415 did not apply to the PEP. Code section 401(a)(17) imposes a limit on the amount of compensation that can be taken into account for benefit accrual purposes under a qualified plan, and Code section 415 imposes a limit on the annual benefit payable from a qualified plan.

        The DCP is a nonqualified deferred compensation plan that generally allows the additional pre-tax deferrals that would have been allowed under the Employees' Voluntary Investment and Savings Plan of International Multifoods Corporation ("VISA Plan") if the limits imposed under Code sections 401(a)(17) and 402(g) did not apply under the VISA Plan, and provides a matching contribution on those deferrals. Code section 402(g) imposes a dollar limit on the amount of pre-tax deferrals allowed under a qualified plan.

        The benefits described in this memorandum are in addition to those provided under the PEP, MBP, DCP, and VISA Plan.

(1)

"Code" refers to the Internal Revenue Code of 1986, as amended.

SUPPLEMENTAL RETIREMENT BENEFIT

(a)

Definitions. The following terms are used herein:

(1)

"Actuarial Equivalent" means a benefit of equivalent value when computed on the basis of mortality and interest rate assumptions recommended by an actuary and approved by the Vice President and Controller of the Company.

(2)

"Code" means the Internal Revenue Code of 1986, as amended.

(3)

"Company" means International Multifoods Corporation, and any successor thereto.

(4)

"DCP" means the Supplemental Deferred Compensation Plan of International Multifoods Corporation, as it may be amended from time to time.

(5)

"MBP" means the Management Benefit Plan of International Multifoods Corporation, as it may be amended from time to time.

(6)

"PEP" means the Multifoods Pension Equity Plan, as adopted January 1, 1996 (as a continuation of a prior pension plan), as it may be amended from time to time.

(7)

"Supplemental Retirement Benefit" means the benefit payable to you under the terms of this memorandum.

(b)

Supplemental Retirement Benefit Attributable to the PEP/MBP.

(1)

Eligibility. You will be entitled to receive a Supplemental Retirement Benefit attributable to the PEP/MBP if you have 5 or more years of vesting service at your termination of employment (if you have less than 5 years of vesting service, you will not be entitled to this benefit).

Your "vesting service" for this purpose will be equal to one and one-half times (1¹/2 x) your vesting service earned under the PEP and MBP.

(2)

Amount. The Supplemental Retirement Benefit will be a monthly benefit equal to "A" minus "B" minus "C" below:



A=

The monthly benefit to which you would have been entitled under the PEP if:



(i)

you were fully vested under the PEP (regardless of whether you actually are vested);



(ii)

your Base Points were equal to one and one-half times (1¹/2 x) your actual Base Points, and your Integration Points were equal to one and one-half times (1¹/2 x) your actual Integration Points;



(iii)

your Covered Pay under the PEP included amounts deferred at your election under the DCP;



(iv)

your Credited Service for purposes of the supplemental pension benefit under Appendix D of the PEP were equal to one and one-half times (1¹/2 x) your actual Credited Service;



(v)

your entire benefit was paid in the form of a single life annuity; and

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(vi)

the limits imposed under Code sections 401(a)(17) and 415 did not apply to the PEP.

minus

B=

The monthly benefit (if any) actually paid to you under the PEP (or, if you receive all or any portion of your benefit other than in the form of a single life annuity, the monthly benefit that would have been paid to you if you had received your entire benefit in the form of a single life annuity under the PEP).

minus

C=

The monthly benefit (if any) actually paid to you under the MBP (or, if you receive all or any portion of your benefit other than in the form of a single life annuity, the monthly benefit that would have been paid to you if you had received your entire benefit in the form of a single life annuity under the MBP).

All monthly benefits described above will be computed as of the date of your termination of employment and each will be expressed in the form of a single life annuity starting as of the first day of the month after age 65 (or as of the first day of the month after your termination of employment, if your termination of employment occurs after age 65).

(3)

Form of Benefit. The Supplemental Retirement Benefit attributable to the PEP/MBP will be paid to you in the form of a single life annuity with monthly payments. However, at the sole discretion of the Company, it may be paid in any other form. If it is paid in any form other than a single life annuity, the benefit will be adjusted so that it is the Actuarial Equivalent of the benefit that would have been paid as a single life annuity.



(4)

Commencement of Benefit. The Supplemental Retirement Benefit attributable to the PEP/MBP will start the same day as the benefit paid to you under the PEP. If it is paid or starts prior to age 65, the benefit will be adjusted so that it is the Actuarial Equivalent of the benefit that would have been paid starting as of the first day of the month after you attain age 65. If you are not vested under the PEP at your termination of employment (and thus are not entitled to a benefit under the PEP), the Supplemental Retirement Benefit will start the same day as the benefit that would have been paid to you if you were vested under the PEP.



(5)

Survivor Benefit (Spouse Only). If you have 5 or more years of vesting service, you die before your Supplemental Retirement Benefit attributable to the PEP/MBP is paid or starts to be paid to you, and you are survived by a spouse, that spouse will be entitled to a single lump-sum benefit to be paid as soon as practicable following the date of your death in an amount that is the Actuarial Equivalent of your Supplemental Retirement Benefit attributable to the PEP/MBP.

(c)

Supplemental Retirement Benefit Attributable to the DCP.

(1)

Eligibility. You will be entitled to receive a Supplemental Pension Benefit attributable to the DCP if:

(i)

you are not vested under the DCP at your termination of employment;

(ii)

you would have been vested under the DCP at your termination of employment if your vesting service under the DCP were one and one-half times (1¹/2 x) your actual vesting service; and

(iii)

you have received matching credits under the DCP.

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(2)

Amount. The Supplemental Retirement Benefit attributable to the DCP will be equal to the balance of your Account under the DCP that is attributable to matching credits under the DCP.



(3)

Form and Commencement of Benefit. The Supplemental Retirement Benefit attributable to the DCP will be paid to you in the same form and at the same time as your benefit under the DCP.



(4)

Survivor Benefit. If you die before your Supplemental Retirement Benefit attributable to the DCP is paid to you in full, the remaining benefit will be paid to your beneficiary under the DCP at the same time as the benefit payable to the beneficiary under the DCP.

(d)

No Effect on Employment Rights. This memorandum is not an employment agreement and nothing in this memorandum will confer on you the right to be retained in the employ of the Company, or limit any right of the Company to discharge you or otherwise deal with you without regard to the existence of this memorandum.

(e)

FICA Taxes/Withholding. To the extent that benefit accruals hereunder are taken into account as amounts deferred under a nonqualified deferred compensation plan under Code section 3121(v), and thus are subject to tax under Code section 3101 ("FICA"), the Company may calculate the amount deferred and withhold against other compensation paid to you in any manner determined by it to be appropriate under Code section 3121(v).

        Please indicate your receipt and acceptance of the terms of this memorandum by signing one of the enclosed copies and returning it at your earliest convenience.

INTERNATIONAL MULTIFOODS CORPORATION
/s/ Ralph P. Hargrow
By:	Ralph P. Hargrow
Its:	Vice President, Human Resources and Administration

cc:

Frank W. Bonvino, Esq.
Joyce G. Traver

ACCEPTANCE

        I, Dan C. Swander, hereby acknowledge receipt of this memorandum and hereby agree to the manner in which Paragraph 6 of my offer letter dated November 6, 2001, is to be implemented as set forth in this memorandum.

Dated as of: November 13, 2001

DAN C. SWANDER

/s/ Dan C. Swander

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Exhibit 10.18

EX-11

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Exhibit 11

INTERNATIONAL MULTIFOODS CORPORATION AND SUBSIDIARIES

Computation of Earnings (Loss) Per Common Share

(dollars in thousands, except per share amounts)

			Years Ended
			March 2, 2002			March 3, 2001		February 29, 2000			February 28, 1999			February 28, 1998
Average shares of common stock outstanding				18,850,940			18,739,064		18,751,826			18,758,621			18,385,262
Dilutive potential common shares				244,648			134,846		34,246			144,722			233,791
Total adjusted average shares				19,095,588			18,873,910		18,786,072			18,903,343			18,619,053
Earnings from continuing operations			$	9,645		$	21,175	$	24,695		$	6,832		$	24,674
Loss from discontinued operations				—			—		(19,560	)		(138,702	)		(4,650	)
Earnings (loss) before extraordinary item				9,645			21,175		5,135			(131,870	)		20,024
Extraordinary loss on early extinguishment of debt, net of tax				(454	)		—		—			—			—
Net earnings (loss) applicable to common stock			$	9,191		$	21,175	$	5,135		$	(131,870	)	$	20,024
Basic earnings (loss) per share:
	Continuing operations		$	0.51		$	1.13	$	1.32		$	0.36		$	1.34
	Discontinued operations			—			—		(1.05	)		(7.39	)		(0.25	)
	Extraordinary item			(0.02	)		—		—			—			—
		Total	$	0.49		$	1.13	$	0.27		$	(7.03	)	$	1.09
Diluted earnings (loss) per share:
	Continuing operations		$	0.50		$	1.12	$	1.31		$	0.36		$	1.33
	Discontinued operations			—			—		(1.04	)		(7.34	)		(0.25	)
	Extraordinary item			(0.02	)		—		—			—			—
		Total	$	0.48		$	1.12	$	0.27		$	(6.98	)	$	1.08

        Basic earnings (loss) per share are computed by dividing net earnings (loss) by the weighted average number of shares of common stock outstanding during the year.

        Diluted earnings per share are computed similar to basic earnings per share except that the weighted average shares outstanding are increased to include additional shares from the assumed exercise of stock options, if dilutive. The number of additional shares is calculated by assuming that outstanding stock options were exercised and that the proceeds from such exercises were used to acquire shares of common stock at the average market price during the year.

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Exhibit 11

EX-12

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Exhibit 12

INTERNATIONAL MULTIFOODS CORPORATION AND SUBSIDIARIES

Computation of Ratio of Earnings to Fixed Charges

(dollars in thousands)

	Fiscal Year Ended
	March 2, 2002			March 3, 2001			February 29, 2000			February 28, 1999			February 28, 1998
Earnings from continuing operations before income taxes	$	15,313		$	39,099		$	40,351		$	12,266		$	36,990
Plus: Fixed charges(1)		33,021			27,174			25,444			25,719			27,154
Less: Capitalized interest		(385	)		(542	)		(814	)		(196	)		(8	)
Earnings available to cover fixed charges	$	47,949		$	65,731		$	64,981		$	37,789		$	64,136
Ratio of earnings to fixed charges		1.45			2.42			2.55			1.47			2.36

(1)

Fixed charges consist of the following:

		Fiscal Year Ended
		March 2, 2002		March 3, 2001		February 29, 2000		February 28, 1999		February 28, 1998
Interest expense, gross		$	22,980	$	18,269	$	16,397	$	16,519	$	17,651
Rentals (interest factor)			10,041		8,905		9,047		9,200		9,503
	Total fixed charges	$	33,021	$	27,174	$	25,444	$	25,719	$	27,154

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Exhibit 12

EX-13

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Exhibit 13

Five-Year Comparative Summary

			Fiscal Year Ended
(dollars and shares in millions, except per share data)			March 2, 2002			March 3, 2001			Feb. 29, 2000			Feb. 28, 1999			Feb. 28, 1998
Consolidated Summary of Operations
Net sales			$	2,849.1		$	2,524.9		$	2,384.7		$	2,296.6		$	2,251.1
Cost of materials and production				(2,427.2	)		(2,151.0	)		(2,032.3	)		(1,961.5	)		(1,915.2	)
Delivery and distribution				(213.7	)		(184.9	)		(168.4	)		(150.3	)		(145.9	)
Selling, general and administrative				(161.0	)		(137.2	)		(132.1	)		(132.9	)		(140.5	)
Unusual items				(0.7	)		3.5			0.5			(29.0	)		(5.0	)
Interest, net				(21.4	)		(14.8	)		(11.0	)		(10.4	)		(7.5	)
Loss on cancellation of debt offering				(10.3	)		—			—			—			—
Other income (expense), net				0.5			(1.4	)		(1.0	)		(0.2	)		—
Earnings from continuing operations before income taxes				15.3			39.1			40.4			12.3			37.0
Income taxes				(5.6	)		(17.9	)		(15.7	)		(5.5	)		(12.4	)
Earnings from continuing operations				9.7			21.2			24.7			6.8			24.6
Discontinued operations:
	Operating loss, after tax			—			—			—			(14.1	)		(4.6	)
	Net loss on disposition, after tax			—			—			(19.6	)		(124.6	)		—
Loss from discontinued operations				—			—			(19.6	)		(138.7	)		(4.6	)
Earnings (loss) before extraordinary item				9.7			21.2			5.1			(131.9	)		20.0
Extraordinary loss on early extinguishment of debt, net of tax				(0.5	)		—			—			—			—
Net earnings (loss)			$	9.2		$	21.2		$	5.1		$	(131.9	)	$	20.0
Basic earnings (loss) per share:
	Continuing operations		$	0.51		$	1.13		$	1.32		$	0.36		$	1.34
	Discontinued operations			—			—			(1.05	)		(7.39	)		(0.25	)
	Extraordinary item			(0.02	)		—			—			—			—
		Total	$	0.49		$	1.13		$	0.27		$	(7.03	)	$	1.09
Diluted earnings (loss) per share:
	Continuing operations		$	0.50		$	1.12		$	1.31		$	0.36		$	1.33
	Discontinued operations			—			—			(1.04	)		(7.34	)		(0.25	)
	Extraordinary item			(0.02	)		—			—			—			—
		Total	$	0.48		$	1.12		$	0.27		$	(6.98	)	$	1.08
Year-End Financial Position
Current assets(3)			$	469.2		$	378.3		$	354.0		$	340.1		$	383.4
Current liabilities(3)				270.1			298.9			277.5			264.2			221.8
Working capital (excluding cash and short-term debt)(3)				197.2			109.7			126.8			179.3			177.3
Property, plant and equipment, net(2)				230.3			206.2			204.9			165.2			170.0
Long-term debt(2)				514.5			145.4			147.2			121.2			121.0
Shareholders' equity				272.1			256.0			255.1			260.3			309.4
Total assets(3)				1,124.7			764.6			736.2			696.9			703.6
Dividends Paid
Common stock			$	—		$	15.0		$	15.0		$	15.0		$	14.7
Per share of common stock				—			0.80			0.80			0.80			0.80
Other Financial Data
Current ratio				1.7:1			1.3:1			1.3:1			1.3:1			1.7:1
Equity per share of common stock			$	14.32		$	13.66		$	13.62		$	13.86		$	16.51
Debt-to-total capitalization(2)				66	%		42	%		45	%		38	%		32	%
Depreciation(2)			$	23.9		$	21.7		$	18.6		$	18.6		$	20.3
Capital expenditures, excluding acquisitions(2)			$	29.3		$	35.2		$	49.4		$	28.1		$	18.6
Average common shares outstanding:
	Basic			18.9			18.7			18.8			18.8			18.4
	Diluted			19.1			18.9			18.8			18.9			18.6
Number of common shareholders				4,022			4,287			4,445			4,658			4,705
Number of employees(2)				4,680			4,654			4,362			4,232			4,043
Market price per share of common stock:
	Close		$	21.86		$	19.21		$	10.94		$	21.69		$	27.94
	High		$	24.67		$	23.31		$	24.19		$	31.44		$	32.44
	Low		$	16.30		$	9.81		$	10.75		$	15.38		$	20.00

(1)

In fiscal 1999, we classified our Venezuela Foods business as discontinued operations. Prior-year information has been reclassified accordingly.

(2)

Continuing operations only.

(3)

Includes discontinued operations.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

OVERVIEW

        International Multifoods is a North American producer of branded consumer foods and foodservice products, including baking mixes, frozen bakery products, flour, ready-to-spread frostings, condiments, potato and pancake mix offerings. We also are a leading distributor of food and related products to targeted segments of the foodservice industry, including limited-menu restaurants and vending operators. We manage the company through four operating segments—U.S. Consumer Products, U.S. Foodservice Products, Canadian Foods and Multifoods Distribution Group.

        In November 2001, we completed our acquisition of the Pillsbury desserts and specialty products business, the Pillsbury non-custom foodservice baking mix and frosting products business, and certain regional flour and side-dish brands of General Mills. The acquisition makes International Multifoods a leading marketer of U.S. consumer baking products and enhances our existing U.S. foodservice manufacturing business. The acquisition will substantially improve our operating earnings and cash flow. The cash purchase price for the acquisition was $304.5 million.

        In connection with the acquisition, we entered into a $450 million senior secured credit facility and issued $200 million of senior unsecured notes. Proceeds from the new financing arrangements were used to pay for the acquisition and refinance our existing debt obligations. The acquisition and related financing substantially increased our outstanding debt obligations. See further information in our discussion of Financial Condition.

        In February 2001, we announced that we were exploring strategic alternatives for Multifoods Distribution Group. Our review was delayed during fiscal 2002 as we focused on completing the acquisition and positioning our existing manufacturing operations for future growth. Although we are unable to provide a specific timetable, we expect to complete the review in fiscal 2003. If certain actions contemplated under the review are implemented, we may be required to recognize a material charge to our results of operations.

        In fiscal 2000, we completed the sale of our Venezuela Foods business. The Venezuelan business is classified as discontinued operations in the consolidated financial statements. We also acquired Better Brands, Inc., a broadline foodservice distributor located in Windsor, Conn., for $29.1 million.

RESULTS OF OPERATIONS

Fiscal 2002 compared with Fiscal 2001

Overview

        Consolidated net sales for fiscal 2002 increased $324.2 million, or 13%. The increase was primarily driven by the addition of several new foodservice distribution accounts and the contribution from the acquired Pillsbury and General Mills businesses. Excluding sales from the acquired businesses, net sales increased 8% in fiscal 2002.

        Net earnings in fiscal 2002 were affected by one-time costs related to the acquisition and unusual items. One-time costs included a write-off of $10.3 million for fees related to the planned issuance of $200 million of high-yield unsecured notes. We canceled the debt offering as more favorable financing became available when, as part of the acquisition, Diageo plc agreed to guarantee $200 million of our debt obligations. The following table presents the impact of one-time items on net earnings and diluted earnings per share for fiscal 2002 and 2001.

								Diluted Earnings per Share
		Net Earnings
(in millions, except per share data)
		2002			2001			2002			2001
Before one-time items		$	16.3		$	22.1		$	0.85		$	1.17
	Extraordinary loss		(0.5	)		—			(0.02	)		—
	Loss on cancellation of debt offering		(6.4	)		—			(0.34	)		—
	Tax on Canadian dividend		—			(3.1	)		—			(0.17	)
	Unusual items		(0.2	)		2.2			(0.01	)		0.12
Reported amounts		$	9.2		$	21.2		$	0.48		$	1.12

        The decline in net earnings before one-time items was primarily the result of lower operating earnings in our U.S. Foodservice Products and Canadian Foods businesses. We also had increased interest expense, which resulted from higher debt balances related to the acquisition. U.S. Foodservice Products was affected by higher fixed manufacturing and ingredient costs, while Canadian Foods was impacted by costs incurred to consolidate our condiments-processing facilities. The earnings decline was partially offset by the earnings contribution from the acquired businesses.

        Net earnings in both fiscal 2002 and 2001 included income from our defined benefit pension plans. Pension plans generated pre-tax income of $12.1 million in fiscal 2002 and $12.5 million in fiscal 2001. Strong investment performance in the 1990s caused pension assets to increase significantly, which resulted in recognition of pension income. However, the value of our pension assets declined $18.5 million in fiscal 2002, primarily due to a decline in the equity markets in 2001 and payment of benefits. The decline in the value of pension assets along with increased pension obligations is expected to reduce pension income by approximately $3 million in fiscal 2003.

        The following table sets forth statement of earnings data for each of our business segments. We formed the U.S. Consumer Products business in fiscal 2002 as a result of our acquisition of certain retail brands of The Pillsbury Company and General Mills.

(in millions)		2002			2001 (53 weeks)			2000
Net sales:
	U.S. Consumer Products	$	112.0		$	—		$	—
	U.S. Foodservice Products		215.8			196.4			200.0
	Canadian Foods		282.7			286.0			285.1
	Multifoods Distribution Group		2,238.6			2,042.5			1,899.6
Total net sales		$	2,849.1		$	2,524.9		$	2,384.7
Operating earnings:
U.S. Consumer Products
	Operating earnings before unusual items	$	12.3		$	—		$	—
	Unusual items		—			—			—
			12.3			—			—
U.S. Foodservice Products
	Operating earnings before unusual items		5.0			10.7			7.9
	Unusual items		(0.9	)		—			—
			4.1			10.7			7.9
Canadian Foods
	Operating earnings before unusual items		22.9			29.8			30.7
	Unusual items		1.5			(1.8	)		—
			24.4			28.0			30.7
Multifoods Distribution Group
	Operating earnings before unusual items		16.5			16.8			20.4
	Unusual items		(1.0	)		(0.3	)		0.5
			15.5			16.5			20.9
Corporate
	Operating expenses before unusual items		(9.5	)		(5.5	)		(7.1	)
	Unusual items		(0.3	)		5.6			—
			(9.8	)		0.1			(7.1	)
Consolidated
	Operating earnings before unusual items		47.2			51.8			51.9
	Unusual items		(0.7	)		3.5			0.5
Total operating earnings		$	46.5		$	55.3		$	52.4
Consolidated earnings summary:
Operating earnings		$	46.5		$	55.3		$	52.4
Interest, net			(21.4	)		(14.8	)		(11.0	)
Loss on cancellation of debt offering			(10.3	)		—			—
Other income (expense), net			0.5			(1.4	)		(1.0	)
Earnings from continuing operations before income taxes			15.3			39.1			40.4
Income taxes			(5.6	)		(17.9	)		(15.7	)
Earnings from continuing operations			9.7			21.2			24.7
Loss from discontinued operations, net of tax			—			—			(19.6	)
Earnings before extraordinary item			9.7			21.2			5.1
Extraordinary loss on early extinguishment of debt, net of tax			(0.5	)		—			—
Net earnings		$	9.2		$	21.2		$	5.1

Segment Results

        U.S. Consumer Products: This business segment was formed in fiscal 2002 as a result of our acquisition of certain retail brands of The Pillsbury Company and General Mills. The operating results of the acquired brands are included in our results since Nov. 13, 2001 (the date of acquisition).

        U.S. Foodservice Products: Net sales increased 10% to $215.8 million. Excluding the impact of the acquired foodservice brands of Pillsbury, sales increased approximately 6%. The remaining increase was primarily the result of the addition of a large new account, which we began to serve in the fourth quarter of fiscal 2001.

        Operating earnings before unusual items declined 53% to $5 million. Operating earnings were affected by higher ingredient costs and increased fixed manufacturing expense, which resulted from the addition of new production lines for our ready-to-bake and thaw-and-serve products. Competitive pricing pressures and soft volumes in regional accounts also affected our results. The decline was partially offset by the earnings contribution from the acquisition.

        As a result of the acquisition, we reorganized our U.S. Foodservice Products sales force. We also took steps to reduce our foodservice manufacturing overhead costs. As a result of these actions, we recorded a $0.9 million unusual charge for severance costs associated with the departure of 23 employees, including the president of the division.

        Canadian Foods: Net sales declined 1% to $282.7 million. Lower consumer grain-based and foodservice condiment volumes and unfavorable currency translation impacted net sales. This decline was partially offset by higher prices in our grain-based products, which resulted from increased commodity costs.

        Operating earnings before unusual items declined 23% to $22.9 million. Operating earnings were affected by costs and inefficiencies resulting from our condiments facility consolidation project, as well as lower sales volumes. Operating earnings also were affected by higher raw material costs and unfavorable currency translation.

        In October 2001, we completed the sale of our condiments-processing facility in Scarborough, Ontario, as part of a plan to consolidate our condiments-processing operations in Dunnville, Ontario. We recognized a $1.8 million gain on the sale of the building and a $0.3 million charge for additional employee termination and facility closing costs. Certain costs related to the project, including employee and equipment relocation expenses, were not included in the unusual charge. These expenses, which were recognized when incurred, totaled $1.6 million in fiscal 2002 and were included in general and administrative expenses.

        Multifoods Distribution Group: Net sales increased 10% to $2,238.6 million. We achieved a substantial increase in sales to sandwich shops due to the addition of several large customer accounts. The sales increase also reflects volume gains in the pizza customer segment and the impact of higher cheese prices. The sales increase was partially offset by a decline in sales to vending operators. Vending distribution sales were impacted by lower industry demand in certain regions of the United States due to the soft economy and competitive pricing pressures.

        Operating earnings before unusual items declined 2% to $16.5 million. Operating earnings were impacted by inefficiencies associated with the significant new business we added, as well as a year-over-year increase in labor rates. This decline was partially offset by the earnings contribution that resulted from the increased sales volumes.

        We closed our Kent, Wash., distribution facility and also reduced our work force at certain other distribution centers. Approximately 39 salaried and hourly employees were terminated, resulting in a $0.5 million unusual charge. In addition, we recognized a $0.5 million loss on equipment disposals at one of our distribution centers as a result of canceling an expansion project at that facility.

        Corporate: Corporate expenses before unusual items in fiscal 2002 were $9.5 million, compared with $5.5 million a year ago. The increase was primarily the result of costs related to the acquisition.

Non-Operating Expense and Income

        In fiscal 2002, net interest expense was $21.4 million, compared with $14.8 million in the prior year. The increase in net interest expense was due to higher average debt balances, which resulted from the cost of the acquisition and increased working capital levels. The increase was partially offset by lower average borrowing rates on our variable rate debt obligations.

        In the third quarter of fiscal 2002, we wrote off $10.3 million of underwriting and other direct costs associated with the planned issuance of $200 million in high-yield unsecured notes. We canceled the debt offering as more favorable financing became available when, as part of the acquisition, Diageo plc agreed to guarantee $200 million of our debt obligations.

        Other income in fiscal 2002 included a $0.9 million gain from the sale of Prudential Financial, Inc. (Prudential) common stock. We received the common stock as part of Prudential's conversion from a mutual company to a stock company.

Income Taxes

        For fiscal 2002, our overall effective tax rate on earnings before extraordinary item was 37%, compared with 45.8% last year. In fiscal 2001, our effective tax rate was affected by income tax expense of $3.1 million associated with a dividend from our Canadian subsidiary. In addition, the effective tax rate in both years was affected by taxes associated with unusual items. Excluding the impact of the Canadian dividend and unusual items, our effective tax rate on earnings before extraordinary item was 38.1% in fiscal 2002 and 38% in fiscal 2001.

Extraordinary Item

        As a result of the refinancing of our debt facilities due to the acquisition, we recorded a $0.5 million after-tax charge in the third quarter of fiscal 2002. The charge consisted of direct costs incurred for the redemption of our outstanding medium-term notes and the write-off of unamortized bank fees related to previous credit arrangements.

Fiscal 2001 compared with Fiscal 2000

Overview

        Fiscal 2001 earnings from continuing operations were $21.2 million, or $1.12 per diluted share, compared with $24.7 million, or $1.31 per diluted share, in fiscal 2000. The decline in earnings was primarily attributable to increased interest expense, lower operating earnings in Multifoods Distribution Group and tax expense associated with a dividend from our Canadian subsidiary. Our distribution business was adversely affected by higher fuel costs and wage rates, and by start-up costs associated with new business that we began to serve in the fourth quarter of fiscal 2001.

        The decline in fiscal 2001 earnings was partially offset by higher operating earnings in our U.S. Foodservice Products business and the benefit of increased income from our defined benefit pension plans. Earnings also were impacted by a net pre-tax gain of $3.5 million associated with unusual items.

Unusual items included a gain from the sale of our corporate headquarters building and charges for costs associated with the consolidation of our condiments-processing facilities in Canada. Further information on unusual items follows in the discussion of segment results and in Note 5 to the consolidated financial statements.

Segment Results

        U.S. Foodservice Products: Net sales declined 2% to $196.4 million. Sales were affected by the purchase of a customer by one of our competitors and by lower baking mix sales. The decline was partially offset by strong sales of thaw-and-serve products.

        Operating earnings increased 35% to $10.7 million. The increase was primarily the result of lower ingredient and selling costs. This increase was partially offset by higher energy costs, which affected our delivery and production expenses. In addition, we incurred start-up costs associated with a new customer account.

        Canadian Foods: Net sales of $286 million were even with fiscal 2000. We achieved sales growth in commercial flour and baking mixes. However, sales were adversely impacted by a decline in consumer flour sales and unfavorable currency translation. Net sales also were impacted by lower commodity costs, which affect our price to commercial customers.

        Operating earnings before unusual items declined 3% to $29.8 million. The earnings decline resulted from the impact of lower consumer flour sales, unfavorable currency translation and higher costs. We were impacted by higher energy costs and one-time costs associated with our condiments facility consolidation project. The earnings decline was partially offset by higher commercial sales volumes.

        Our condiments consolidation project included expanding our Canadian condiments operation in Dunnville, Ontario, and closing a facility in Scarborough, Ontario. In fiscal 2001, we recorded a pre-tax unusual charge of $1.8 million for severance and related benefit costs for 174 full-time and seasonal employees of our Scarborough, Ontario, facility. Certain one-time costs related to the project, including employee and equipment relocation expenses, were not included in the unusual charge. These expenses, which were recognized when incurred, totaled $0.7 million in fiscal 2001 and were included in general and administrative expenses.

        Multifoods Distribution Group: Net sales increased 8% to $2,042.5 million as a result of higher sales volumes to vending operators and sandwich shops, and the full-year benefit of our acquisition of Better Brands. The increase was partially offset by the impact of a decline in cheese prices and the loss of a regional foodservice account during the first quarter of fiscal 2001. Excluding the impact of the Better Brands acquisition, overall sales volumes increased 5%.

        Operating earnings before unusual items declined 18% to $16.8 million. Higher costs and a change in customer mix adversely affected operating earnings. We were impacted by higher fuel and wage costs along with start-up costs from new business. We increased pay in certain job categories and in certain locations during fiscal 2001 because of the tight labor market. In addition, productivity issues that resulted from facility consolidations and an information systems conversion that took place in fiscal 2000 continued to impact delivery and distribution costs. These prior-year actions increased employee turnover at the consolidated facilities and caused inefficiencies as employees adjusted to new warehouse layouts and a new information system.

        In fiscal 2001, we recognized a net charge of $0.3 million from unusual items. The charge included $1.4 million for severance and lease commitment costs associated with the closure of two distribution facilities and the departure of the group's president. In addition, we reversed a liability of $1.1 

million primarily for lease commitment costs for the closure of a distribution center in California that is no longer planned.

        Corporate: In fiscal 2001, we recognized an unusual gain of $5.8 million from the sale of our corporate headquarters building in Minnesota. We also recognized severance costs of $0.2 million for corporate staff reductions.

Non-Operating Expense and Income

        In fiscal 2001, net interest expense was $14.8 million, compared with $11 million in fiscal 2000. The increase in interest expense resulted from higher interest rates and debt levels. Higher average debt levels were driven primarily by the acquisition of Better Brands late in the third quarter of fiscal 2000.

Income Taxes

        In fiscal 2001, we recognized income tax expense of $3.1 million associated with a dividend from our Canadian subsidiary. The effective tax rate on earnings before the impact of the Canadian dividend and unusual items was 38% in fiscal 2001 and 2000.

FINANCIAL CONDITION

        Our major sources of liquidity are cash flows from operations and borrowings from our $100 million revolving credit facility. As of March 2, 2002, there were no borrowings outstanding under the revolving credit facility, although $5.4 million of the facility was unavailable due to outstanding letters of credit.

        We believe that cash flows from operations, current cash on hand and borrowings from our existing revolving credit facility will be sufficient to meet our operating requirements and debt service obligations during fiscal 2003. However, our future financial performance could be impacted by a change in general economic or competitive conditions or other unforeseen events that are beyond our control. If our earnings were adversely impacted by such factors or events, we could violate our debt covenants. In the event that such noncompliance appears likely, or occurs, we would seek the lenders' approvals of amendments to, or waivers of, such financial covenants.

        We do not have any guarantees to third parties or written options on non-financial assets. In addition, we do not engage in any off-balance sheet financing arrangements or transactions with unconsolidated limited purpose entities.

        Our debt-to-total-capitalization ratio increased to 66% at March 2, 2002, compared with 42% at March 3, 2001. The increase was primarily the result of additional debt incurred for the acquisition.

Capital Resources

        In November 2001, we entered into a $450 million senior secured credit facility with a syndicate of banks, financial institutions and other entities, and a $200 million bilateral credit facility. We applied the proceeds from borrowings under the new credit facilities to pay for the acquisition, to refinance our existing debt, to pay fees and expenses related to the refinancing of our indebtedness and to fund our working capital needs.

        The $450 million senior secured facility is composed of a $100 million revolving credit facility that expires on Sept. 30, 2006, a $150 million amortizing Term A loan facility and a $200 million amortizing Term B loan facility. During fiscal 2002, we made scheduled principal payments of $11 million on the term loans. The interest rates on borrowings under the $450 million senior secured facility are variable and based on current market interest rates plus a spread based on our leverage. The credit agreement

contains covenants that restrict dividend payments, limit capital expenditures and require the maintenance of leverage, interest coverage and fixed charge coverage ratios. Some of the covenants become more restrictive over time. Borrowings under these facilities may be used for general corporate purposes. The facility is secured by substantially all our assets.

        In November 2001, we entered into interest rate swap agreements in order to fix a portion of our variable rate borrowings. The interest rate swap agreements were for terms of 1.5 years, 2 years and 3 years for notional amounts of $50 million, $25 million and $25 million, respectively. The fixed pay rates on the swaps are 2.81%, 3.33% and 3.93%, respectively, and we receive the three-month LIBOR rate.

        In December 2001, we repaid the $200 million bilateral credit facility by issuing $200 million of senior unsecured notes. The notes mature on Nov. 13, 2009, and have an interest rate of 6.602%, payable annually. In anticipation of the issuance, we entered into an interest rate swap agreement that, when terminated, had the effect of adjusting the effective interest rate of the notes to 5.97%. The senior unsecured notes have been guaranteed by Diageo plc. The guarantee may terminate, in limited circumstances, prior to the maturity of the notes.

        In May 2001, Standard & Poor's lowered our corporate credit rating to "BB" in anticipation of the increased debt from the acquisition. Standard & Poor's also assigned a "BB+" bank loan rating to our $450 million senior secured bank facility. In December 2001, these ratings were affirmed by Standard & Poor's, and a "stable outlook" was assigned.

        Also in May 2001, Moody's Investors Service (Moody's) assigned prospective ratings to us in anticipation of the acquisition and the resulting increased leverage. In November 2001, Moody's assigned to us a "Ba3" senior implied rating and a "B1" senior unsecured issuer rating. Moody's also assigned a "Ba2" rating to our $450 million senior secured bank facility and a "positive outlook" on our debt ratings.

Cash Flows

        Cash used for operations was $7.7 million in fiscal 2002, compared with $49 million of cash provided by operations in fiscal 2001. The change was primarily due to an increase in working capital. Accounts receivable increased due to the termination of a receivable securitization program in Canada, which was required under our new credit facilities. Accounts payable declined due to timing of payments to suppliers.

        Cash used for investing activities was $317.7 million in fiscal 2002, compared with $13.5 million in fiscal 2001. Investing activities in fiscal 2002 primarily consisted of the acquisition and capital expenditures of $29.3 million. Capital expenditures included amounts for the expansion of our condiments operation in Dunnville, Ontario. Fiscal 2001 investing activities included $12 million received from the sale of our corporate headquarters building and capital expenditures of $35.2 million. Capital expenditures in fiscal 2001 included amounts for facility expansion and consolidation projects at Multifoods Distribution Group.

        For fiscal 2003, we expect to spend about $40 million on capital projects. Our estimate includes the purchase of a plant in Toledo, Ohio, from General Mills, which will occur when the plant has been converted to produce certain Pillsbury-branded products we acquired.

        The following is a summary of our contractual obligations, which requires us to make payments, as of March 2, 2002:

(in millions)	Total		Less Than 1 Year		1-3 Years		4-5 Years		After 5 Years
Revolving credit facility(1)	$	—	$	—	$	—	$	—	$	—
Long-term debt		539.0		24.5		69.0		118.9		326.6
Operating leases		87.9		21.4		34.2		16.5		15.8
Total contractual obligations	$	626.9	$	45.9	$	103.2	$	135.4	$	342.4

(1)

Maximum $100 million facility, of which $94.6 million was available at March 2, 2002. $5.4 million of the facility was unavailable due to outstanding letters of credit.

SIGNIFICANT ACCOUNTING POLICIES

        Our significant accounting policies are described in Note 1 to the consolidated financial statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statement and related notes to consolidated financial statements.

        We determined our critical accounting policies by taking into consideration areas in financial statement preparation that involve the most significant or subjective assessments. Our most critical accounting policies relate to trade promotion expenses, allowance for doubtful accounts receivable, inventories, goodwill and other intangible assets, pension plans and income taxes. Factors entering into our estimates included historical experience, current and expected economic conditions, and in certain cases, actuarial assumptions. Actual results may differ from these estimates under different assumptions or conditions.

Trade promotion

        We offer retailers trade incentives to purchase and promote our consumer products. Examples of trade promotion expenses are in-store feature and display activities, temporary price discounts and new distribution (slotting) of our products. We generally expense the cost of these incentives during the period in which the promotion occurs based on estimated performance. Actual payments may differ from estimates and are resolved in subsequent months. Due to the acquisition, trade promotion will become more significant to us in the future.

Allowance for doubtful accounts receivable

        We estimate the allowance for doubtful receivables based on the aging of receivables and review of specific accounts. We take into consideration historical trends, payment and write-off histories, current sales levels and general economic conditions.

Inventories

        Inventories, excluding grain in Canada, are valued principally at the lower of cost (first-in, first-out) or market (replacement or net realizable value). In Canada, inventories of grain are valued on the basis of replacement market prices prevailing at fiscal year-end. We regularly review inventory on hand and write off or reserve for excess and obsolete inventory based upon expectations about future market conditions and sales volumes.

Goodwill and other intangibles

        Goodwill and other intangibles are amortized on a straight-line basis over their estimated useful lives, except that goodwill and intangibles with indefinite useful lives that were acquired after June 30, 2001, are not amortized. We assess the recoverability of goodwill and other intangibles whenever events or changes in circumstances indicate that expected future

undiscounted cash flows may not be sufficient to support the carrying amount of an asset. Estimates of future cash flow involve considerable management judgment. These estimates are based on historical data, anticipated market conditions and management plans.

        Effective in the first quarter of fiscal 2003, we will adopt Statement of Financial Accounting Standards No. 142 (SFAS 142), which will change the way we account for goodwill and other intangibles. Under SFAS 142, the test for goodwill impairment changed, and goodwill is required to be reviewed annually or more frequently if impairment indicators exist. In addition, for goodwill acquired in business acquisitions completed prior to July 1, 2001, amortization will cease as of the beginning of fiscal 2003. With respect to goodwill and identifiable intangibles acquired after June 30, 2001, which includes the intangible assets we acquired in our acquisition, we were required to adopt certain provisions with respect to intangible amortization in fiscal 2002. See additional information on the impact of SFAS 142 in our discussion of New Accounting Pronouncements.

Pension plans

        Our defined benefit pension plans cover substantially all employees in the United States and Canada. In determining the liabilities, cash contributions and expenses related to the plans, several actuarial assumptions and other estimates were used. These include assumptions on the discount or interest rates, compensation increase rates, expected rate of return on plan assets, mortality and withdrawal rates. Actual results may differ from these assumptions due to deviations in market interest rates, returns on invested assets and actual life spans of participants. These differences could result in a significant impact to the amount of pension income we record.

Income taxes

        Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying amount and the tax basis of assets and liabilities. We reviewed our deferred tax assets for recoverability and established a valuation allowance based on expectations of future taxable income. If we were unable to generate sufficient future taxable income, we may be required to increase the amount of our valuation allowance, which would increase our effective tax rate and decrease our net earnings.

NEW ACCOUNTING PRONOUNCEMENTS

        In June 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 141 (SFAS 141), "Business Combinations," and SFAS 142, "Goodwill and Other Intangible Assets." SFAS 141 requires that all business combinations initiated after June 30, 2001, be accounted for using the purchase method. Under SFAS 142, goodwill and other intangible assets that have indefinite lives will no longer be amortized, but rather will be tested for impairment at least annually in accordance with the provisions of the standard. We adopted SFAS 141 on July 1, 2001, and SFAS 142 on March 3, 2002. With respect to intangible assets acquired after June 30, 2001, we were required to adopt certain provisions of SFAS 142 in fiscal 2002 in connection with our acquisition in November 2001. The provisions adopted provide that goodwill and intangible assets determined to have an indefinite useful life are not amortized.

        Under SFAS 142, the test for goodwill impairment is a two-step process. The first step is a comparison of the fair value of the reporting unit (as defined) with its carrying amount, including goodwill. If this step reflects impairment, then the loss would be measured as the excess of recorded goodwill over its implied fair value. Implied fair value is the excess of fair value of the reporting unit over the fair value of all identified assets and liabilities. Although we are in the process of evaluating goodwill for impairment under SFAS 142, we believe that substantially all the goodwill associated with Multifoods Distribution Group is impaired under the new rule. As of March 2, 2002, the net goodwill balance of Multifoods Distribution Group was $65.1 million. We will record the initial goodwill impairment charge as a

cumulative effect of a change in accounting principle in our fiscal 2003 results of operations. In addition, for goodwill acquired in business acquisitions completed prior to July 1, 2001, amortization will cease as of the beginning of fiscal 2003. Fiscal 2002 goodwill amortization was $2.6 million pre-tax or $1.8 million after-tax.

        See additional discussion on new accounting pronouncements in Note 1 to the consolidated financial statements.

MARKET RISK MANAGEMENT

        We are exposed to market risks resulting from changes in commodity prices, foreign currency exchange rates and interest rates. Changes in these factors could adversely affect our results of operations and financial position. To minimize these risks, we use derivative financial instruments, such as commodity futures contracts, currency forward contracts and interest rate swaps. We use derivative financial instruments as risk management tools and not for speculative or trading purposes. See Notes 8 and 9 to the consolidated financial statements for further information regarding financial instruments.

        Commodity Risk Management: Our Canadian operations minimize the risk associated with wheat market price fluctuations by hedging our wheat and flour inventories, open wheat purchase contracts and open flour sales contracts with wheat futures contracts. In the United States, we enter into futures contracts to reduce the risk of price fluctuations on anticipated flour purchases. The U.S. dollar-denominated futures contracts are traded on U.S. regulated exchanges.

        The open futures contracts mature in the period from May 2002 to July 2003 and substantially coincide with the maturities of the open wheat purchase contracts, open flour sales contracts and the anticipated timing of flour purchases.

        Foreign Currency Hedging: Our Canadian operations enter into foreign currency forward contracts to minimize our exposure to foreign currency fluctuations as a result of U.S. dollar-denominated sales and purchases. In addition, our Canadian operations also enter into foreign currency forward contracts that have the effect of converting the U.S. dollar-denominated grain futures contracts (see Commodity Risk Management) into Canadian dollar equivalents.

        Interest Rate Risk Management: Our exposure to changes in interest rates results from borrowing activities used to meet our working capital and other long-term financing needs. The interest rates on our term loans and revolving credit facility are variable and based on current market interest rates plus a spread based on our leverage. To reduce the impact of fluctuating interest rates, we enter into interest rate swap agreements in order to fix a portion of our variable rate borrowings. Under the swap agreements, we agree with a counterparty to exchange the difference between fixed rate and variable rate interest amounts calculated by reference to a notional amount.

        We use sensitivity analysis to determine the impact of market risk exposures on the fair values of our debt and financial instruments, including derivative financial instruments. Sensitivity analysis assesses the risk of loss in market risk sensitive instruments based on hypothetical changes in market

prices or rates. The following tables provide information on the potential impact on fair value and pre-tax earnings assuming a 10% adverse change.

	Potential Effect on Fair Value
(in millions)
	2002		2001
Futures contracts	$	1.6	$	2.3
Medium-term notes		—		4.2
Senior unsecured notes		7.7		—
Interest rate swaps		0.8		0.1

	Potential Decrease in Pre-Tax Earnings
(in millions)
	2002		2001
Currency forward contracts	$	0.1	$	2.9
Debt		1.2		0.8

CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION

        This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning our operations and financial performance and condition. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. We caution that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, successful completion of the integration of the acquired businesses; reliance on General Mills, Inc., to provide material transition and co-pack services to our U.S. Consumer Products division, including the conversion of the General Mills Toledo plant for our use; the results of our review of strategic alternatives for Multifoods Distribution Group; the impact of competitive products and pricing; changes in consumer preferences and tastes or perceptions of health-related issues; effectiveness of advertising or market-spending programs; market or weather conditions that may affect the costs of grain, cheese, other raw materials, fuel and labor; changes in laws and regulations; fluctuations in interest rates; the inability to collect on a $6 million insurance claim related to the theft of product in St. Petersburg, Russia; fluctuations in foreign exchange rates; risks commonly encountered in international trade; and other factors as may be discussed in our reports filed with the Securities and Exchange Commission.

INTERNATIONAL MULTIFOODS CORPORATION and SUBSIDIARIES

Consolidated Statements of Earnings

			Fiscal Year Ended
(in thousands, except per share data)			March 2, 2002			March 3, 2001			Feb. 29, 2000
Net sales			$	2,849,085		$	2,524,907		$	2,384,715
Cost of materials and production				(2,427,144	)		(2,150,949	)		(2,032,349	)
Delivery and distribution				(213,748	)		(184,917	)		(168,371	)
Gross profit				208,193			189,041			183,995
Selling, general and administrative				(161,063	)		(137,283	)		(132,057	)
Unusual items				(660	)		3,488			519
Operating earnings				46,470			55,246			52,457
Interest, net				(21,385	)		(14,801	)		(11,040	)
Loss on cancellation of debt offering				(10,304	)		—			—
Other income (expense), net				532			(1,346	)		(1,066	)
Earnings from continuing operations before income taxes				15,313			39,099			40,351
Income taxes				(5,668	)		(17,924	)		(15,656	)
Earnings from continuing operations				9,645			21,175			24,695
Loss from discontinued operations, net of tax of $5,141				—			—			(19,560	)
Earnings before extraordinary item				9,645			21,175			5,135
Extraordinary loss on early extinguishment of debt, net of tax of $267				(454	)		—			—
Net earnings			$	9,191		$	21,175		$	5,135
Basic earnings per share:
	Continuing operations		$	0.51		$	1.13		$	1.32
	Discontinued operations			—			—			(1.05	)
	Extraordinary item			(0.02	)		—			—
		Total	$	0.49		$	1.13		$	0.27
Diluted earnings per share:
	Continuing operations		$	0.50		$	1.12		$	1.31
	Discontinued operations			—			—			(1.04	)
	Extraordinary item			(0.02	)		—			—
		Total	$	0.48		$	1.12		$	0.27
Average shares of common stock outstanding:
	Basic			18,851			18,739			18,752
	Diluted			19,096			18,874			18,786

See accompanying notes to consolidated financial statements.

INTERNATIONAL MULTIFOODS CORPORATION and SUBSIDIARIES

Consolidated Balance Sheets

(in thousands)			March 2, 2002			March 3, 2001
Assets
Current assets:
	Cash and cash equivalents		$	26,474		$	10,247
	Trade accounts receivable, net of allowance			149,914			131,780
	Inventories			239,201			185,207
	Deferred income taxes			6,079			10,001
	Other current assets			47,556			41,082
		Total current assets		469,224			378,317
Property, plant and equipment, net				230,283			206,160
Goodwill and other acquisition related intangibles, net				250,393			93,182
Other assets				174,770			86,966
Total assets			$	1,124,670		$	764,625
Liabilities and shareholders' equity
Current liabilities:
	Notes payable		$	—		$	39,542
	Current portion of long-term debt			24,508			1,000
	Accounts payable			182,273			216,050
	Other current liabilities			63,278			42,288
		Total current liabilities		270,059			298,880
Long-term debt				514,541			145,420
Deferred income taxes				35,766			32,014
Employee benefits and other liabilities				32,234			32,329
		Total liabilities		852,600			508,643
Shareholders' equity:
	Preferred capital stock			—			—
	Common stock, authorized 50,000 shares; issued 21,844 shares			2,184			2,184
	Capital in excess of par value			92,472			91,643
	Retained earnings			257,395			248,204
	Accumulated other comprehensive loss			(14,840	)		(17,670	)
	Treasury stock, 2,850 and 3,098 shares, at cost			(62,771	)		(68,239	)
	Unearned compensation			(2,370	)		(140	)
		Total shareholders' equity		272,070			255,982
Commitments and contingencies
Total liabilities and shareholders' equity			$	1,124,670		$	764,625

See accompanying notes to consolidated financial statements.

INTERNATIONAL MULTIFOODS CORPORATION and SUBSIDIARIES

Consolidated Statements of Cash Flows

				Fiscal Year Ended
(in thousands)				March 2, 2002			March 3, 2001			Feb. 29, 2000
Cash flows from operations:
	Earnings from continuing operations			$	9,645		$	21,175		$	24,695
	Adjustments to reconcile earnings from continuing operations to cash provided by (used for) continuing operations:
		Depreciation and amortization			27,560			25,380			22,157
		Unusual items			316			(3,488	)		(519	)
		Deferred income tax expense (benefit)			(2,913	)		3,829			8,443
		Increase in prepaid pension assets			(13,725	)		(14,538	)		(9,634	)
		Provision for losses on receivables			2,977			2,345			1,847
		Deferred gain on terminated interest rate swap			9,686			—			—
		Changes in working capital*			(48,554	)		11,583			(2,347	)
		Other, net			7,312			1,566			5,358
		Cash provided by (used for) continuing operations			(7,696	)		47,852			50,000
		Cash provided by (used for) discontinued operations			—			1,194			(12,541	)
			Cash provided by (used for) operations		(7,696	)		49,046			37,459
Cash flows from investing activities:
	Capital expenditures				(29,280	)		(35,167	)		(49,438	)
	Acquisition of businesses				(310,274	)		—			(27,934	)
	Sale (purchase) of Venezuelan operation assets				—			7,371			(15,799	)
	Payments received on note receivable				17,512			948			—
	Proceeds from property disposals				4,352			13,325			4,405
	Discontinued operations				—			—			38,098
			Cash used for investing activities		(317,690	)		(13,523	)		(50,668	)
Cash flows from financing activities:
	Net increase (decrease) in notes payable				(39,068	)		(622	)		9,492
	Additions to long-term debt				550,192			—			44,921
	Reductions in long-term debt				(156,894	)		(20,000	)		(2,750	)
	Dividends paid				—			(14,958	)		(14,988	)
	Proceeds from issuance of common stock				1,714			96			1,235
	Purchase of treasury stock				(5	)		(148	)		(2,598	)
	Capitalized debt issuance costs				(14,264	)		(848	)		(112	)
	Discontinued operations				—			—			(26,195	)
	Other, net				(3	)		—			2,216
			Cash provided by (used for) financing activities		341,672			(36,480	)		11,221
Increase in cash from discontinued operations					—			—			(263	)
Effect of exchange rate changes on cash and cash equivalents					(59	)		(20	)		(20	)
Net increase (decrease) in cash and cash equivalents					16,227			(977	)		(2,271	)
Cash and cash equivalents at beginning of year					10,247			11,224			13,495
Cash and cash equivalents at end of year				$	26,474		$	10,247		$	11,224
*Cash flows from changes in working capital:
	Accounts receivable			$	(21,150	)	$	(11,852	)	$	9,325
	Inventories				(2,742	)		(16,760	)		(1,124	)
	Other current assets				(6,108	)		(5,620	)		(6,960	)
	Accounts payable				(34,266	)		50,357			1,036
	Other current liabilities				15,712			(4,542	)		(4,624	)
		Net change		$	(48,554	)	$	11,583		$	(2,347	)

See accompanying notes to consolidated financial statements.

INTERNATIONAL MULTIFOODS CORPORATION and SUBSIDIARIES

Consolidated Statements of Shareholders' Equity

	10 cents par value
												Accumulated Other Comprehensive Loss
(in thousands)	Common Stock		Treasury Stock			Capital in Excess of Par Value			Retained Earnings						Unearned Compensation			Total
Balance at Feb. 28, 1999	$	2,184	$	(67,741	)	$	92,000		$	251,874		$	(17,215	)	$	(786	)	$	260,316
Comprehensive income(a)		—		—			—			5,135			5,093			—			10,228
Dividends declared on common stock		—		—			—			(14,996	)		—			—			(14,996	)
124 shares purchased for treasury		—		(2,598	)		—			—			—			—			(2,598	)
86 shares issued for employee benefit plans		—		1,902			(112	)		—			—			(226	)		1,564
Amortization of unearned compensation		—		—			—			—			—			610			610
Balance at Feb. 29, 2000		2,184		(68,437	)		91,888			242,013			(12,122	)		(402	)		255,124
Comprehensive income(a)		—		—			—			21,175			(5,548	)		—			15,627
Dividends declared on common stock		—		—			—			(14,984	)		—			—			(14,984	)
9 shares purchased for treasury		—		(148	)		—			—			—			—			(148	)
17 shares issued for employee benefit plans		—		346			(245	)		—			—			(131	)		(30	)
Amortization of unearned compensation		—		—			—			—			—			393			393
Balance at March 3, 2001		2,184		(68,239	)		91,643			248,204			(17,670	)		(140	)		255,982
Comprehensive income(a)		—		—			—			9,191			2,830			—			12,021
248 shares issued for employee benefit plans		—		5,468			829			—			—			(2,945	)		3,352
Amortization of unearned compensation		—		—			—			—			—			715			715
Balance at March 2, 2002	$	2,184	$	(62,771	)	$	92,472		$	257,395		$	(14,840	)	$	(2,370	)	$	272,070

(a)

Reconciliations of net earnings to comprehensive income are as follows:

(in thousands)			2002			2001			2000
Net earnings			$	9,191		$	21,175		$	5,135
Other comprehensive income (loss):
	Foreign currency translation adjustments			(2,868	)		(5,175	)		3,600
	Net unrealized gain on cash flow hedges (net of tax of $3,660)			6,987			—			—
	Reclassification adjustment for cash flow hedges recognized in earnings (net of tax of $612)			(1,014	)		—			—
	Minimum pension liability adjustment (net of tax of $179, $239 and $(955), respectively)			(275	)		(373	)		1,493
		Other comprehensive income (loss)		2,830			(5,548	)		5,093
Comprehensive income			$	12,021		$	15,627		$	10,228

See accompanying notes to consolidated financial statements.

Notes to Consolidated Financial Statements

Note 1: Summary of Significant Accounting Policies

        The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and related notes to consolidated financial statements. Actual results could differ from these estimates.

        In fiscal 2001, we changed our fiscal year from the last day of February to the Saturday closest to the last day of February. Fiscal 2001 was a 53-week year.

Basis of Statement Presentation

        The accompanying consolidated financial statements include the accounts of International Multifoods Corporation and all of its subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation.

Revenue Recognition

        We record sales upon delivery of our products net of returns and other allowances.

Trade Promotion

        We offer retailers trade incentives to purchase and promote our consumer products. Examples of trade promotion expenses are in-store feature and display activities, temporary price discounts and new distribution (slotting) of our products. We generally expense the cost of these incentives during the period in which the promotion occurs based on estimated performance.

Foreign Currency Translation and Transactions

        The functional currency of our Canadian operations is the Canadian dollar. Assets and liabilities are translated at current exchange rates, and results of operations are translated using the weighted average exchange rate in effect during the fiscal year. The gains or losses resulting from translation are included as a separate component of shareholders' equity.

Stock-Based Compensation

        We use the intrinsic value method prescribed by Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations in accounting for employee stock options. Under the intrinsic value method, compensation expense is recorded only to the extent that the market price of the common stock exceeds the exercise price of the stock option on the date of grant.

Income Taxes

        Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying amount and the tax basis of assets and liabilities.

Earnings Per Share

        Basic earnings per share are computed by dividing net earnings by the weighted average shares outstanding during the reporting period. Diluted earnings per share are computed similar to basic earnings per share except that the weighted average shares outstanding are increased to include additional shares from the assumed exercise of stock options, if dilutive. The number of additional shares is calculated by assuming that outstanding stock options were exercised and that the proceeds from such exercises were used to acquire shares of common stock at the average market price during the reporting period.

        The computations for basic and diluted earnings per share from continuing operations are as follows:

(in thousands, except per share data)			2002		2001		2000
Earnings from continuing operations			$	9,645	$	21,175	$	24,695
Average shares of common stock outstanding:
	Basic			18,851		18,739		18,752
	Effect of stock options			245		135		34
		Diluted		19,096		18,874		18,786
Earnings per share from continuing operations:
	Basic		$	0.51	$	1.13	$	1.32
	Diluted			0.50		1.12		1.31

Cash and Cash Equivalents

        Included in cash and cash equivalents are cash on hand, time deposits and highly liquid short-term investments purchased with original maturities of three months or less.

Accounts Receivable

        Accounts receivable consist of amounts owed us in the ordinary course of business and are presented net of an allowance for doubtful accounts. The allowance for doubtful accounts is based upon the aging of receivables and review of specific accounts.

Inventories

        Inventories, excluding grain in Canada, are valued principally at the lower of cost (first-in, first-out) or market (replacement or net realizable value).

        In Canada, grain inventories are valued on the basis of replacement market prices prevailing at fiscal year-end. We generally minimize risks associated with market price fluctuations by hedging those inventories with futures contracts. Therefore, included in inventories is the amount of gain or loss on open grain contracts, including futures contracts, which generally has the effect of adjusting those inventories to cost.

Property, Plant and Equipment

        Property, plant and equipment is stated at cost, and depreciation is computed using the straight-line method for determining financial statement income. Buildings and improvements are generally depreciated over 15 to 40 years. Machinery and equipment used in the production process are typically depreciated over 10 to 15 years. Computer equipment, including software and hardware, are depreciated over three to seven years. The useful lives of leasehold improvements are the shorter of the useful life of the asset or the lease term. When permitted, accelerated depreciation methods are used to calculate depreciation for income tax purposes.

Goodwill and Other Intangibles

        Goodwill represents the excess of costs of businesses acquired over the fair market value of net tangible and identifiable intangible assets. Such excess costs are amortized on a straight-line basis over various periods not exceeding 40 years, except that goodwill acquired in acquisitions after June 30, 2001, is not amortized. Identifiable intangible assets represent costs allocated to noncompete agreements, trade names and other specifically identifiable assets arising from business acquisitions. These assets are amortized on a straight-line basis over their estimated useful lives, except that assets acquired in acquisitions after June 30, 2001, with indefinite useful lives are not amortized. Accumulated amortization of goodwill and other intangibles at March 2, 2002, and March 3, 2001, was $40.1 million and $36.5 million, respectively.

Recoverability of Long-Lived Assets

        We assess the recoverability of goodwill and other long-lived assets whenever events or changes in circumstances indicate that expected future undiscounted cash flows may not be sufficient to support the carrying amount of an asset. We deem an asset to be impaired if a forecast of undiscounted future operating cash flows is less than its carrying amount. If an asset is determined to be impaired, the loss is measured as the amount by which the carrying value of the asset exceeds its fair value.

Pension Plans

        Our defined benefit pension plans cover substantially all employees in the United States and Canada. In determining the liabilities, cash contributions and expenses related to the plans, several actuarial assumptions and cost methods were used. These include assumptions on the discount or interest rates, compensation increase rates, expected rate of return on plan assets, mortality and withdrawal rates.

Derivative and Hedging Activities

        We adopted Statement of Financial Accounting Standards No. 133 (SFAS 133), "Accounting for Derivative Instruments and Hedging Activities," as amended by SFAS 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities," effective March 4, 2001. SFAS 133, as amended, requires that companies record derivative instruments on the consolidated balance sheet at their fair value. Changes in fair value will be recorded each period in earnings or other comprehensive income (OCI), depending on whether a derivative is designated as part of a hedge transaction and, if it is, the type of hedge transaction. Gains and losses on derivative instruments reported in OCI will be reclassified as earnings in the period in which earnings are affected by the hedged item. See Note 8 to the consolidated financial statements for additional information.

New Accounting Pronouncements

        In June 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 141 (SFAS 141), "Business Combinations," and SFAS 142, "Goodwill and Other Intangible Assets." SFAS 141 requires that all business combinations initiated after June 30, 2001, be accounted for using the purchase method. Under SFAS 142, goodwill and other intangible assets that have indefinite lives will no longer be amortized, but rather will be tested for impairment at least annually in accordance with the provisions of the standard. We adopted SFAS 141 on July 1, 2001, and SFAS 142 on March 3, 2002. With respect to intangible assets acquired after June 30, 2001, we were required to adopt certain provisions of SFAS 142 in fiscal 2002 in connection with our acquisition in November 2001 (see Note 2). The provisions adopted provide that goodwill and intangible assets determined to have an indefinite useful life are not amortized.

        Under SFAS 142, the test for goodwill impairment is a two-step process. The first step is a comparison of the fair value of the reporting unit (as defined) with its carrying amount, including goodwill. If this step reflects impairment, then the loss would be measured as the excess of recorded goodwill over its implied fair value. Implied fair value is the excess of fair value of the reporting unit over the fair value of all identified assets and liabilities. Although we are in the process of evaluating goodwill for impairment under SFAS 142, we believe that substantially all the goodwill associated with Multifoods Distribution Group is impaired under the new rule. As of March 2, 2002, the net goodwill balance of Multifoods Distribution Group was $65.1 million. We will record the initial goodwill impairment charge as a cumulative effect of a change in accounting principle in our fiscal 2003 results of operations. In addition, for goodwill acquired in business acquisitions completed prior to July 1, 2001, amortization will cease as of the beginning of fiscal 2003. Fiscal 2002 goodwill amortization was $2.6 million pre-tax or $1.8 million after-tax.

        In October 2001, the FASB issued SFAS 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS 144, which supersedes SFAS 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of," provides guidance on the accounting for and reporting of the impairment of long-lived assets. Although SFAS 144 retains many of the fundamental recognition and measurement provisions of SFAS 121, it also establishes certain criteria that would have to be met in order to classify an asset as held-for-sale. With the exception of a certain key provision on classification, SFAS 144 also supersedes Accounting Principles Board (APB) 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." We will adopt SFAS 144 in fiscal 2003. We are currently analyzing the effect of this statement on our consolidated financial position but do not believe the proposed standard will have a material impact on our current accounting and reporting procedures.

        In November 2001, the Emerging Issue Task Force (EITF) issued EITF No. 01-9,"Accounting for Consideration Given by a Vendor to a Customer or a Reseller of the Vendor's Products." The purpose of the EITF is to codify and reconcile the consensus reached on accounting for consideration paid from a vendor to a retailer, including slotting fees, cooperative advertising arrangements and buy-downs. The EITF also addresses accounting for coupons. The guidance generally requires that these incentives be classified as a reduction of sales. The consensus is effective for us in the first quarter of fiscal 2003. We expect to reclassify $12.6 million and $10 million in promotional expenses to reduction of sales for fiscal 2002 and 2001, respectively. The reclassification will not have any impact on our reported earnings.

Note 2: Businesses Acquired

Pillsbury and General Mills Brand Acquisition

        On Nov. 13, 2001, we acquired the Pillsbury desserts and specialty products business, the Pillsbury non-custom foodservice baking mix and frosting products business, and certain regional flour and side-dish brands of General Mills (the Acquisition). The cash purchase price for the Acquisition paid at closing was $304.5 million. The purchase price for the Acquisition was determined through negotiations with the management of General Mills and Pillsbury. The Acquisition complements our existing baking mix business and grain-based foods expertise.

        We also will purchase a plant from General Mills in Toledo, Ohio, once the plant is converted to produce certain Pillsbury products. Under a conversion plan agreement, General Mills will install certain new processing and packaging equipment. The purchase price for the Toledo plant is $11.5 million, subject to various adjustments. Until the conversion of the Toledo plant is completed, third-party co-packers will manufacture and package certain products of the acquired businesses.

        Under a transition services agreement, General Mills, itself or, in some cases, through an agreement with a third party, will provide us with various transition services for the acquired businesses after the acquisition closing date. Transition services provided include information systems, accounting, marketing, raw material procurement and warehousing for varying time periods, as provided under the agreement.

        Under a retail trademark licensing agreement, Pillsbury has licensed to us the exclusive right to use certain Pillsbury trademarks, including the Pillsbury "Doughboy" related trademarks, on a royalty-free basis for an initial term of 20 years after the closing. The license is automatically renewable by us for unlimited additional 20-year terms on a royalty-free basis after the initial 20-year term, and may be terminated only by us. We also entered into a foodservice trademark license agreement to use certain Pillsbury trademarks on a royalty-free basis for seven years on certain dry mix and frosting products.

        We entered into a $450 million senior secured credit facility with a syndicate of banks, financial institutions and other entities, and issued $200 million of senior unsecured notes to pay for the Acquisition and refinance our existing debt obligations. See Note 10 to the consolidated financial statements for additional information on new financing arrangements.

        The transaction was accounted for under the purchase method in accordance with SFAS 141. The assets and liabilities of the acquired businesses are included in the consolidated balance sheet as of March 2, 2002. The operating results of the acquired businesses have been included in the consolidated statement of earnings since the date of acquisition.

        Assuming the Acquisition had occurred on March 1, 2000, the unaudited pro forma results of operations are as follows:

(in millions, except per share data)			2002			2001
Net sales			$	3,194.5		$	3,008.6
Earnings before extraordinary item				42.0			67.8
Loss on early extinguishment of debt, net of tax				(0.5	)		—
Net earnings				41.5			67.8
Basic earnings per share:
	Before extraordinary item		$	2.20		$	3.62
	Extraordinary item			(0.02	)		—
		Total	$	2.18		$	3.62
Diluted earnings per share:
	Before extraordinary item		$	2.17		$	3.59
	Extraordinary item			(0.02	)		—
		Total	$	2.15		$	3.59

        The unaudited pro forma results of operations are based on our historical financial statements and those of the acquired businesses. We believe that costs under our ownership, including marketing and product development, will exceed those included in the historical financial statements of the acquired businesses. Accordingly, the pro forma results do not purport to represent what our results of operations would have been had the Acquisition occurred on March 1, 2000.

        The following is a summary of purchase price allocation on the fair values of the assets acquired and liabilities assumed at the date of acquisition. We used an independent appraisal firm to determine the fair values of the property, plant and equipment and trademarks acquired. Most of the trademarks we acquired have indefinite lives. Advance for equipment shown in the table below primarily represents the estimated value of equipment that General Mills is required to install at the Toledo, Ohio, plant as part of the conversion plan agreement.

(in thousands)		Nov. 13, 2001
Inventory		$	53,063
Property, plant and equipment			21,637
Goodwill			28,943
Trademarks			132,181
Advance for equipment			68,879
Other non-current assets			19,000
	Total assets acquired		323,703
Current liabilities			3,860
Deferred tax			8,006
	Total liabilities assumed		11,866
	Net assets acquired	$	311,837

Better Brands Acquisition

        In October 1999, we completed the acquisition of Better Brands, Inc., a broadline foodservice distributor located in Windsor, Conn., for $29.1 million. The acquisition was accounted for using the purchase method, and accordingly, the results of operations for Better Brands have been included in our consolidated financial statements since the date of acquisition. Our fiscal 2000 results would not have been materially different had this acquisition occurred at the beginning of the fiscal year.

Note 3: Discontinued Operations

        In fiscal 2000, we completed the divestiture of the Venezuela Foods business and recorded an after-tax charge of $19.6 million (net of a $5.1 million tax benefit). Proceeds included $27.5 million in cash for the sale of the Venezuelan agriculture and animal feeds operations, which was used to reduce debt obligations of the Venezuela Foods business. In addition, we received a $19 million note from Gruma S.A. de C.V. (Gruma) for the purchase of the Venezuelan commercial and consumer business. Gruma also assumed the remaining debt obligations of our former Venezuela Foods business. The note was repaid in fiscal 2002.

Note 4: Interest, Net

        Interest, net, consisted of the following:

(in thousands)	2002			2001			2000
Interest expense	$	22,980		$	18,269		$	13,902
Capitalized interest		(385	)		(542	)		(814	)
Non-operating interest income		(1,210	)		(2,926	)		(2,048	)
Interest, net	$	21,385		$	14,801		$	11,040

        Cash payments for interest, net of amounts capitalized, totaled $22.5 million in fiscal 2002, $19.3 million in fiscal 2001 and $13.2 million in fiscal 2000.

Note 5: Unusual Items

Fiscal 2002

        In fiscal 2002, we recognized a pre-tax unusual charge of $0.7 million as follows:

(in millions)	Gain on Sale of Building		Employee Termination and Other Exit Costs			Loss on Equipment Disposals			Total
Condiments facility consolidation	$	1.8	$	(0.3	)	$	—		$	1.5
Sales reorganization and work-force reduction		—		(0.9	)		—			(0.9	)
Closure of distribution center and work-force reduction		—		(0.5	)		(0.5	)		(1.0	)
Severance for divested business		—		(0.3	)		—			(0.3	)
Total unusual charge	$	1.8	$	(2.0	)	$	(0.5	)	$	(0.7	)

        In October 2001, we completed the sale of our condiments-processing facility in Scarborough, Ontario, as part of a plan to consolidate our condiments-processing operations in Dunnville, Ontario. We recognized a $1.8 million gain on the sale of the building and a $0.3 million charge for additional employee termination and facility closing costs. Certain costs related to the project, including employee and equipment relocation expenses, were not included in the unusual charge. These expenses, which were recognized when incurred, totaled $1.6 million in fiscal 2002 and were included in general and administrative expenses.

        As a result of the Acquisition, we reorganized our U.S. Foodservice Products sales force. We also took steps to reduce our foodservice manufacturing overhead costs. As a result of these actions, we recorded a $0.9 million charge for severance costs associated with the departure of 23 employees, including the president of the division.

        We closed our Kent, Wash., distribution facility and also reduced our work force at certain other distribution centers. Approximately 39 salaried and hourly employees were terminated, resulting in a $0.5 million charge. In addition, we recognized a $0.5 million loss on equipment disposals at one of our distribution centers as a result of canceling an expansion project at that facility.

        Also in fiscal 2002, we recognized an unusual charge of $0.3 million for termination benefits for 57 former hourly employees of our divested U.S. flour milling business. As part of the sale agreement, we were obligated to provide,

under certain conditions, severance payments for eligible former employees who are involuntarily terminated by the buyer.

        The liability balance associated with unusual items was $0.7 million as of March 2, 2002, and is composed of future severance payments. Cash payments related to unusual items were $2.6 million for fiscal 2002.

Fiscal 2001

        We recognized a pre-tax unusual gain of $3.5 million as follows:

(in millions)	Gain on Sale of Building		Employee Termination and Other Exit Costs			Lease Commitment Costs			Total
Condiments facility consolidation	$	—	$	(1.8	)	$	—		$	(1.8	)
Sale of headquarters building		5.8		(0.2	)		—			5.6
Reversal of charges		—		0.2			0.9			1.1
Severance and costs for closure of distribution centers		—		(1.1	)		(0.3	)		(1.4	)
Total unusual gain	$	5.8	$	(2.9	)	$	0.6		$	3.5

        Our condiments consolidation project included expanding our Canadian condiments operation in Dunnville, Ontario, and closing a facility in Scarborough, Ontario. In fiscal 2001, we recorded a pre-tax unusual charge of $1.8 million for severance and related benefit costs for 174 full-time and seasonal employees. Certain costs related to the project, including employee and equipment relocation expenses, were not included in the unusual charge. These expenses, which were recognized when incurred, totaled $0.7 million in fiscal 2001 and were included in general and administrative expenses. See further discussion under the Fiscal 2002 section of this Note.

        We recognized a pre-tax unusual gain of $5.8 million from the sale of our corporate headquarters building in Minnesota. We also incurred severance costs of $0.2 million for corporate staff reductions that were associated with the sale.

        We decided to retain a distribution center in California that was originally scheduled to be closed as part of a fiscal 1999 consolidation plan. As a result, $1.1 million of costs were reversed, which included lease commitment and employee termination costs.

        We closed our Boise, Idaho, and West Allis, Wis., distribution centers. Components of charges resulting from the closures included losses on lease commitments and employee termination costs. In addition, we recognized severance and related costs associated with the departure of the distribution group's president. These actions resulted in unusual charges of $1.4 million.

Fiscal 2000

        In the third quarter of fiscal 2000, we recognized a gain of $0.5 million primarily from the reversal of certain reserves established in fiscal 1999 as part of a facility consolidation plan at our distribution business. The reversal was required as management determined that four distribution centers identified for closure under the original plan would remain open. Consequently, we had fewer-than-planned work-force reductions and lower lease commitment costs.

Note 6: Income Taxes

        Income tax expense was as follows:

	U.S. Operations
(in thousands)						Non-U.S. Operations
	Federal			Other					Total
2002:
Current expense (benefit)	$	(67	)	$	617	$	8,031		$	8,581
Deferred expense (benefit)		(2,685	)		300		(528	)		(2,913	)
Total tax expense (benefit)	$	(2,752	)	$	917	$	7,503		$	5,668
2001:
Current expense	$	5,130		$	102	$	8,863		$	14,095
Deferred expense		2,372			645		812			3,829
Total tax expense	$	7,502		$	747	$	9,675		$	17,924
2000:
Current expense (benefit)	$	(773	)	$	93	$	7,893		$	7,213
Deferred expense		3,775			1,732		2,936			8,443
Total tax expense	$	3,002		$	1,825	$	10,829		$	15,656

        Temporary differences that gave rise to deferred tax assets and liabilities as of March 2, 2002, and March 3, 2001, were as follows:

	2002					2001
(in thousands)	Deferred Tax Assets			Deferred Tax Liabilities		Deferred Tax Assets		Deferred Tax Liabilities
Depreciation and amortization	$	1,945		$	40,574	$	2,389	$	30,015
Prepaid pension assets		—			28,425		—		23,744
Accrued expenses		19,718			561		18,408		54
Inventory valuation methods		1,557			—		1,488		—
Provision for losses on receivables		845			—		1,274		—
Deferred income		—			—		3,458		—
Loss carryforwards		11,738			—		1,142		—
Alternative minimum tax credit carryforward		2,615			—		1,994		—
Foreign tax credit carryforward		953			—		—		—
Other		3,665			1,569		2,555		908
Subtotal		43,036			71,129		32,708		54,721
Valuation allowance		(1,594	)		—		—		—
Total deferred taxes	$	41,442		$	71,129	$	32,708	$	54,721

        At March 2, 2002, we had a U.S. federal consolidated net operating loss carryforward of approximately $25 million that will expire in fiscal 2022. Our foreign operations had a net operating loss carryforward of approximately $1.2 million that will expire in fiscal 2009. We expect to fully utilize these operating loss carryforwards.

        Our foreign operations had a capital loss carryforward of approximately $1.5 million that has no expiration date. We have a valuation allowance of approximately $0.6 million for the capital loss carryforward due to uncertainty over our ability to utilize the capital loss.

        We have approximately $1 million in U.S. foreign tax credit carryforwards that will expire by fiscal 2006. We have a valuation allowance for the entire $1 million carryforward due to uncertainty over our ability to utilize these credits.

        Total income taxes from continuing operations differ from the amount computed by applying the U.S. federal income tax rate because of the following items:

(in thousands)		2002			2001		2000
Tax at U.S. federal statutory rate		$	5,360		$	13,685	$	14,123
Differences:
	Effect of taxes on non-U.S. earnings		(59	)		3,217		379
	State and local income taxes		596			485		1,216
	Effect of intangibles		121			122		137
	Other		(350	)		415		(199	)
Total income taxes		$	5,668		$	17,924	$	15,656

        No provision has been made for U.S. income taxes applicable to remittance of earnings from non-U.S. affiliates. It is not practicable to estimate the remaining deferred tax liability associated with temporary differences related to investments in non-U.S. affiliates. Earnings before income taxes from non-U.S. affiliates were $21.6 million in fiscal 2002, $26.9 million in fiscal 2001 and $29.9 million in fiscal 2000.

        Cash paid for income taxes totaled $7.5 million in fiscal 2002, $10.8 million in fiscal 2001 and $4.1 million in fiscal 2000.

Note 7: Supplemental Balance Sheet Information

(in thousands)		2002			2001
Trade accounts receivable, net:
	Trade	$	152,295		$	135,991
	Allowance for doubtful accounts		(2,381	)		(4,211	)
Total trade accounts receivable, net		$	149,914		$	131,780
Inventories:
	Raw materials, excluding grain	$	15,478		$	12,667
	Grain		4,360			3,784
	Finished and in-process goods		215,361			164,600
	Packages and supplies		4,002			4,156
Total inventories		$	239,201		$	185,207
Property, plant and equipment, net:
	Land	$	13,735		$	13,079
	Buildings and improvements		110,083			106,470
	Machinery and equipment		265,619			234,203
	Improvements in progress		15,260			14,756
			404,697			368,508
	Accumulated depreciation		(174,414	)		(162,348	)
Total property, plant and equipment, net		$	230,283		$	206,160
Other assets:
	Prepaid pension	$	71,150		$	58,100
	Advance for equipment		66,189			—
	Other		37,431			28,866
Total other assets		$	174,770		$	86,966
Other current liabilities:
	Wages and benefits	$	11,755		$	9,723
	Income taxes		8,220			7,724
	Other		43,303			24,841
Total other current liabilities		$	63,278		$	42,288
Accumulated other comprehensive loss:
	Foreign currency translation adjustment	$	(18,247	)	$	(15,379	)
	Derivative hedge accounting adjustment		5,973			—
	Minimum pension liability adjustment		(2,566	)		(2,291	)
Total accumulated other comprehensive loss		$	(14,840	)	$	(17,670	)

Note 8: Derivative Instruments and Hedging Activities

        We adopted SFAS 133, as amended, effective March 4, 2001. SFAS 133 requires that companies record derivative instruments on the consolidated balance sheet at their fair value. Changes in fair value will be recorded each period in earnings or other comprehensive income (OCI), depending on whether a derivative is designated as part of a hedge transaction and, if it is, the type of hedge transaction. Gains and losses on derivative instruments reported in OCI will be reclassified as earnings in the period in which earnings are affected by the hedged item.

        The impact of this change resulted in a pre-tax charge of approximately $1 million to OCI and an increase to liabilities of approximately $1 million. The balance in OCI has been reclassified to earnings over the life of the derivative instruments, which primarily have maturity terms of one year or less.

        We are exposed to market risks resulting from changes in foreign currency exchange rates, interest rates and commodity prices. Changes in these factors could adversely affect our results of operations and financial position. To minimize these risks, we use derivative financial instruments, such as currency forward contracts, interest rate swaps and commodity futures contracts. We use derivative financial instruments as risk management tools and not for speculative or trading purposes. For derivative instruments that are accounted for as hedges pursuant to SFAS 133, we formally document the hedge at inception. The formal documentation includes identification of the hedging instrument, the hedged item, the nature of the risk being hedged and how the hedging instrument's effectiveness and ineffectiveness will be assessed.

Foreign Currency Forward Contracts

        Our Canadian operations use foreign currency forward contracts to minimize the exposure to foreign currency fluctuations as a result of U.S. dollar-denominated sales. The foreign exchange forward contracts are purchased through major Canadian banking institutions and mature in less than 12 months. These contracts are accounted for as foreign currency cash flow hedges of forecasted transactions. To qualify for hedge accounting treatment, these transactions are specifically identified in terms of the customers and the period, and the likelihood in which the sales and subsequent collections are expected to occur. The time value component of the foreign currency forward contracts is deemed ineffective and is recorded in earnings. The unrealized gain (loss) due to the movements in the spot exchange rates, which represent the effective portion of the hedge, is initially recorded as a component of accumulated OCI until the underlying hedged transaction occurs. On an ongoing basis, we also enter into foreign currency forward contracts that are not designated as hedges. Changes in the fair value are recognized in earnings.

Interest Rate Swaps

        We are exposed to interest rate risks from our variable rate borrowings. We hedge against the risk of changes in future cash flows attributable to interest payments on our variable rate borrowings by entering into interest rate swap agreements. Under SFAS 133, the swap agreements qualify for cash flow hedge accounting. The underlying debt obligation and the swap agreements are based on the same notional amounts and benchmark rates, and have the same reset dates. There was no ineffectiveness related to these hedges.

Commodity Futures Contracts

        We use commodity futures contracts, primarily wheat futures contracts, to reduce the risks associated with price fluctuations on the wheat inventories and other major baking ingredients, such as flour, soybean oil and sugar. The futures contracts are not designated as hedges under SFAS 133. The futures contracts are marked-to-market each month, and the gains and losses are recognized in earnings. The open futures contracts mature in the period from May 2002 to July 2003 and substantially coincide with the maturities of the open wheat purchase contracts, open flour sales contracts and the anticipated timing of flour, soybean oil and sugar purchases.

Note 9: Fair Value of Financial Instruments

        The following tables provide information on the carrying amount, notional amount and fair value of financial instruments, including derivative financial instruments. The carrying value of financial instruments classified as current assets and current liabilities, such as cash and cash equivalents, receivables, accounts payable and short-term debt, approximate fair value due to the short-term maturity of the instruments. The fair value of long-term debt, futures contracts, currency forward contracts and interest rate swaps was based on quoted market prices. The fair value of the note receivable from Gruma was based on prevailing market conditions and available financial information.

		2002				2001
(in thousands)		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
	Note receivable from Gruma	$	—	$	—	$	17,219	$	15,128
Liabilities:
	Term A loan due Sept. 30, 2006		140,049		140,075		—		—
	Term B loan due Feb. 28, 2008		199,000		198,986		—		—
	$200 million unsecured notes due Nov. 13, 2009		200,000		205,390		—		—
	Medium-term notes		—		—		45,000		41,923

		2002					2001
(in thousands)		Notional Amount		Fair Value			Notional Amount		Fair Value
Derivative financial instruments:
	Futures contracts-buy	$	16,874	$	(708	)	$	22,701	$	(68	)
	Currency forward contracts—buy		15,754		48			23,563		287
	Currency forward contracts—sell		16,377		22			46,344		(977	)
	Interest rate swaps		100,000		(246	)		25,000		(293	)

Concentrations of Credit Risk

        We believe that the credit risk of exchange-traded futures contracts, foreign exchange forward contracts and interest rate contracts due to nonperformance of the counterparties is insignificant.

        We extend credit on a regular basis under various terms to customers that meet certain financial and other criteria. In general, we do not require collateral or security. We believe that our trade receivables do not represent significant concentrations of credit risk due to the large number of customers and markets into which our products are sold, as well as their dispersion across geographic areas.

Note 10: Notes Payable and Long-Term Debt

        In connection with the Acquisition, we entered into a $450 million senior secured credit facility with a syndicate of banks, financial institutions and other entities, and a $200 million bilateral credit facility. We applied the proceeds from borrowings under the new credit facilities to pay for the Acquisition, to refinance our existing debt, to pay fees and expenses related to the refinancing of our indebtedness and to fund our working capital needs.

        The $450 million senior secured facility is composed of a $100 million revolving credit facility that expires on Sept. 30, 2006, a $150 million amortizing Term A loan facility and a $200 million amortizing Term B loan facility. As of March 2, 2002, there were no borrowings outstanding under the revolving credit facility, although $5.4 million of the facility was unavailable due to outstanding letters of credit. In addition, during fiscal 2002, we made scheduled principal payments of $11 million on the term loans. The interest rates on borrowings under the $450 million senior secured facility are variable and based on current market interest rates plus a spread based on our leverage. The credit agreement also contains covenants that restrict dividend payments, limit capital expenditures and require the maintenance of leverage, interest coverage and fixed charge coverage ratios. Some of the covenants become more restrictive over time. Borrowings under these facilities may be used for general corporate purposes. The facility is secured by

substantially all our assets. We were in compliance with all covenant provisions at March 2, 2002.

        In November 2001, we entered into interest rate swap agreements in order to fix a portion of our variable rate borrowings. The interest rate swap agreements were for terms of 1.5 years, 2 years and 3 years for notional amounts of $50 million, $25 million and $25 million, respectively. The fixed pay rates on the swaps are 2.81%, 3.33% and 3.93%, respectively, and we receive the three-month LIBOR rate. Including the impact of the swaps, the effective interest rate on borrowings under the senior secured facility was 5.8% as of March 2, 2002.

        In December 2001, we repaid the $200 million bilateral credit facility by issuing $200 million of senior unsecured notes. The notes mature on Nov. 13, 2009, and have an interest rate of 6.602%, payable annually. In anticipation of the issuance, we entered into an interest rate swap agreement that, when terminated, had the effect of adjusting the effective interest rate of the notes to 5.97%. The senior unsecured notes have been guaranteed by Diageo plc. The guarantee may terminate, in limited circumstances, prior to the maturity of the notes.

        Debt issuance costs related to the new financing arrangements amounted to $14.3 million and included underwriting, legal and other direct costs. These costs are classified as other assets in the consolidated balance sheet and will be amortized over the various terms of the new debt arrangements.

        In November 2001, we purchased all of our outstanding medium-term notes at par value, which totaled $45 million. As a result of the redemption of the medium-term notes and refinancing of existing credit arrangements, we recorded an after-tax extraordinary loss of $0.5 million.

        In November 2001, we also wrote off $10.3 million of underwriting and other direct costs associated with the planned issuance of $200 million in high-yield unsecured notes. We canceled the debt offering as more favorable financing became available when, as part of the Acquisition, Diageo plc agreed to guarantee $200 million of our debt obligations.

        Notes payable and long-term debt consisted of the following:

(in thousands)	2002		2001
Notes payable, principally to banks	$	—	$	139,962
Amounts reclassified to long-term debt		—		(100,420	)
Total notes payable	$	—	$	39,542

(in thousands)	2002		2001
Term A loan due Sept. 30, 2006	$	140,049	$	—
Term B loan due Feb. 28, 2008		199,000		—
$200 million unsecured notes due Nov. 13, 2009		200,000		—
Medium-term notes		—		45,000
Other		—		1,000
Notes payable, reclassified		—		100,420
		539,049		146,420
Current portion of long-term debt		24,508		1,000
Total long-term debt	$	514,541	$	145,420

        Minimum principal payments are as follows:

(in thousands)	Amounts
2004	$	32,011
2005		37,012
2006		37,012
2007		81,839
2008 and beyond		326,667
Total long-term debt	$	514,541

Note 11: Shareholders' Equity

        We have authorized 10 million shares of Preferred Capital Stock, par value $1.00 per share, which may be designated and issued as convertible into common shares. We have created a series of such Preferred Capital Stock, designated as Series A Junior Participating Preferred Capital Stock, consisting of 500,000 shares, par value $1.00 per share. We also have authorized 200,000 shares of First Preferred Capital Stock, par value $100.00 per share. No preferred capital stock was outstanding during the three years ended March 2, 2002.

        We have a share rights plan that entitles one preferred share purchase right for each outstanding share of common stock. The rights become exercisable only after a person or group (with certain exceptions) becomes the beneficial owner of 15% or more of our outstanding common stock or announces a tender offer, the consummation of which would result in beneficial ownership by a person or group of 15% or more of our outstanding common stock. Each right will entitle its holder to purchase one one-hundredth share of Series A Junior Participating Preferred Capital Stock (consisting of 500,000 shares, par value $1.00 per share) at an exercise price of $70, subject to adjustment. If a person or group acquires beneficial ownership of 15% or more of our outstanding common stock, each right will entitle its holder (other than such person or group) to purchase, at the then-current exercise price of the right, a number of shares of our common stock having a market value of twice the then-current exercise price of the right. In addition, if we are acquired in a merger or other business combination transaction or if 50% or more of our consolidated assets or earnings power is acquired, each right will entitle its holder to purchase, at the then-current exercise price of the right, a number of the acquiring company's common shares having a market value of twice the then-current exercise price of the right. Following the acquisition by a person or group of beneficial ownership of 15% or more of our outstanding common stock and prior to an acquisition by any person or group of 50% or more of our outstanding common stock, the Board of Directors may exchange the outstanding rights (other than rights owned by such person or group), in whole or in part, for our common stock or equivalent securities. Prior to the acquisition by a person or group of beneficial ownership of 15% or more of our outstanding common stock, the rights are redeemable for $.001 (subject to adjustment) per right at the option of the Board of Directors. In addition, prior to the acquisition by a person or group of beneficial ownership of 15% or more of our outstanding common stock, the Board of Directors may amend the terms of the rights to lower the 15% threshold for exercisability of the rights to not less than the greater of (i) the sum of .001% and the largest percentage of the outstanding common stock then beneficially owned by any person or group (with certain exceptions) or (ii) 10%.

Note 12: Leases

        We lease certain plant, office space and equipment for varying periods. We expect that in the normal course of business, leases will be renewed or replaced by other leases.

        The following is a schedule of future minimum lease payments for operating leases that had initial or remaining noncancelable lease terms in excess of one year as of March 2, 2002:

(in thousands)	Operating Leases
2003	$	21,419
2004		18,232
2005		15,924
2006		9,675
2007		6,862
2008 and beyond		15,773
Total minimum lease payments*	$	87,885

*

Minimum payments do not include contingent rentals or vehicle lease payments based on mileage.

        Total net rent expense for operating leases, including those with terms of less than one year, consisted of the following:

(in thousands)	2002		2001			2000
Minimum rentals	$	30,183	$	26,730		$	26,170
Sublease rentals		—		(249	)		(488	)
Total net rent expense	$	30,183	$	26,481		$	25,682

Note 13: Commitments and Contingencies

        In fiscal 1998, we were notified that approximately $6 million of our inventory was stolen from a ship in the port of St. Petersburg, Russia. The ship had been chartered by a major customer of our former food-exporting business. We believe, based on the facts known to date, that the loss is covered by insurance. However, following submission of a claim for indemnity, the insurance carrier denied our claim for coverage, and we commenced a lawsuit seeking to obtain coverage under the insurance carrier's policy. In October 2001, the U.S. District Court of the Southern District of New York granted us summary judgment on our claim and awarded us interest to the date of judgment. In November 2001, the insurance carrier appealed the judgment to the U.S. Court of Appeals for the Second Circuit. Although we will continue to vigorously assert our claim in the litigation, the interest awarded by the U.S. District Court will not be recognized as income until collection is assured.

        In January 1998, VIP's Industries, Inc. ("VIP's") filed a third-party complaint against us in the Circuit Court of Linn County, Oregon. The third-party complaint alleges that we, through a former subsidiary, caused the environmental contamination of certain real property and the groundwater beneath real property located in Albany, Oregon. The claims asserted by VIP's and the original plaintiffs in the lawsuit have been settled. However, crossclaims made by Ultramar, Inc., another defendant in the lawsuit, are continuing. Ultramar is seeking contribution for its costs of remedial action related to the contamination of its real property and the groundwater beneath the real property, which are claimed by Ultramar to be as much as $8.6 million. We believe that we have sustainable defenses to the claims asserted by Ultramar, and we are vigorously defending the lawsuit. The lawsuit is currently scheduled for trial in June 2002. In addition, we have tendered defense of the lawsuit to our insurance carriers during the period of time at issue in the lawsuit. Liberty Mutual Insurance Co., our primary insurance carrier during such period, has accepted defense of the lawsuit but has advised us that it will not indemnify Multifoods for liability arising from the claims asserted in the lawsuit. We continue to believe that the claims asserted in the Ultramar lawsuit are covered by our insurance policies. Therefore, we have commenced a lawsuit in the Circuit Court of Multnomah County, Oregon, against Liberty Mutual and another insurer, TIG Insurance Co., to enforce coverage under our policies with these insurers for any liability arising from claims asserted in the Ultramar lawsuit.

        At March 2, 2002, the estimated cost to complete improvements in progress totaled approximately $18 million.

Note 14: Stock Plans

        Our 1989 and 1997 stock-based plans permit awards of restricted stock, incentive units and stock options to directors and key employees subject to the provisions of the plans and as determined by the Compensation Committee of the Board of Directors. At March 2, 2002, a total of 622,282 common shares was available for grants.

        In fiscal 2002, grants of 63,090 shares of restricted stock and 79,300 restricted stock units were awarded with varying performance criteria and vesting periods. At March 2, 2002, the total number of restricted shares outstanding was 140,343. The market value of shares issued under the plans, as of the date of grant, has been recorded as unearned compensation and is shown as a separate component of shareholders' equity. Unearned compensation is expensed over the period that restrictions lapse.

        Stock options are granted to purchase shares of our common stock at not less than fair market value at dates of grant. Options generally become exercisable over a period of one to five years after the date of grant. In addition, options generally expire 10 years after the date of grant.

        The per-share weighted-average fair values of stock options granted were $10.23 in fiscal 2002, $3.46 in fiscal 2001 and $5.35 in fiscal 2000. The fair value of options at the date of grant was estimated using the Black-Scholes option pricing model. The following weighted-average assumptions were used in the calculation:

Assumptions	2002		2001		2000
Expected dividend yield	0.0	%	4.4	%	4.4	%
Expected volatility	32.1	%	31.6	%	27.6	%
Risk-free interest rates	5.0	%	6.4	%	5.7	%
Expected life (in years)	7.7		7.3		6.9

        We apply APB Opinion No. 25 in accounting for the compensation costs of employee stock options in the financial statements. Had we determined compensation costs based on the fair value at the date of grant for our stock options, our earnings from continuing operations would have been reduced to the pro forma amounts indicated below:

(in thousands, except per share data)		2002		2001		2000
Earnings from continuing operations:
	As reported	$	9,645	$	21,175	$	24,695
	Pro forma		8,045		19,805		23,968
Diluted earnings per share from continuing operations:
	As reported	$	0.50	$	1.12	$	1.31
	Pro forma		0.42		1.05		1.28

        The following table contains information on stock options:

	Shares		Weighted Average Exercise Price per Share
Outstanding at Feb. 28, 1999	1,354,261		$	23.11
Granted	141,550			22.21
Exercised	(61,089	)		20.21
Expired or canceled	(60,700	)		25.38
Outstanding at Feb. 29, 2000	1,374,022		$	23.05
Granted	541,742			12.03
Exercised	(6,000	)		16.00
Expired or canceled	(252,940	)		22.37
Outstanding at March 3, 2001	1,656,824		$	19.57
Granted	460,089			21.74
Exercised	(121,750	)		14.08
Expired or canceled	(69,300	)		24.41
Outstanding at March 2, 2002	1,925,863		$	20.21
Options exercisable at:
Feb. 29, 2000	934,670		$	22.58
March 3, 2001	924,152		$	22.22
March 2, 2002	1,279,213		$	19.04

        For options outstanding at March 2, 2002, the range of exercise price per share was $11.84 to $29.28, and the average remaining contractual life was 6.8 years.

Note 15: Retirement Plans

Defined Benefit Pension Plans and Other Post-Retirement Benefits

        In the United States and Canada, defined benefit pension plans cover substantially all employees. Benefits are based primarily on years of credited service and average compensation or stated amounts for each year of service. These plans are generally funded by contributions to tax-exempt trusts in amounts sufficient to provide assets to cover the plans' obligations. Plan assets consist principally of listed equity securities, fixed income securities and cash equivalents.

        We also provide post-retirement health and life insurance benefits for retirees in the United States and Canada who meet minimum age and service requirements. Life insurance benefits are funded on a pay-as-you-go basis through an insurance company. Health-care benefits are provided under a self-insured program administered by an insurance company.

        Summaries related to the changes in benefit obligations and plan assets, and to the funded status of the plans are as follows:

								Post-Retirement Benefits
		Pension Benefits
(in thousands)
		2002			2001			2002			2001
Change in benefit obligation
Benefit obligation at beginning of year		$	196,531		$	182,569		$	14,380		$	13,582
Service cost			3,929			3,298			156			171
Interest cost			13,907			13,597			1,044			1,081
Plan participants' contributions			623			547			934			756
Amendments			806			813			—			—
Plan expenses			(565	)		(706	)		—			—
Actuarial loss			9,908			15,654			1,179			1,645
Benefits payments			(15,502	)		(15,984	)		(2,329	)		(2,529	)
Curtailments			—			405			—			—
Foreign exchange adjustment			(2,102	)		(3,662	)		(181	)		(326	)
Benefit obligation at end of year		$	207,535		$	196,531		$	15,183		$	14,380
Change in plan assets
Fair value of plan assets at beginning of year		$	279,551		$	288,104		$	—		$	—
Actual return on plan assets			(1,833	)		11,038			—			—
Employer contribution			1,413			1,381			1,395			1,773
Plan participants' contributions			623			547			934			756
Benefits payments			(15,502	)		(15,984	)		(2,329	)		(2,529	)
Plan expenses			(565	)		(659	)		—			—
Foreign exchange adjustment			(2,598	)		(4,876	)		—			—
Fair value of plan assets at end of year		$	261,089		$	279,551		$	—		$	—
Funded status
Funded status at end of year		$	53,554		$	83,020		$	(15,183	)	$	(14,380	)
Unrecognized transition asset			(1,257	)		(2,804	)		—			—
Unrecognized prior service cost			4,873			5,216			(437	)		(490	)
Unrecognized net (gain) loss			1,381			(39,783	)		3,234			2,183
Net amount recognized		$	58,551		$	45,649		$	(12,386	)	$	(12,687	)
Amounts recognized in the consolidated balance sheet consist of:
	Prepaid pension assets	$	71,150		$	58,100		$	—		$	—
	Accrued benefit liability		(16,814	)		(16,213	)		(12,386	)		(12,687	)
	Intangible asset		5			6			—			—
	Accumulated other comprehensive loss		4,210			3,756			—			—
Net amount recognized		$	58,551		$	45,649		$	(12,386	)	$	(12,687	)

	Pension Benefits				Post-Retirement Benefits
Weighted-average assumptions
	2002		2001		2002		2001
Discount rate	6.8	%	7.2	%	6.8	%	7.2	%
Expected return on plan assets	10.3	%	10.3	%	N/A		N/A
Rate of compensation increase	4.0	%	4.0	%	N/A		N/A

        The assumed annual rate of increase in per capita costs of post-retirement health-care benefits for fiscal 2002 ranged from 4.5% to 5.0%. The rate is assumed to decrease gradually to 4% for fiscal 2004 and thereafter.

        Assumed health-care cost trends could have an effect on the amounts reported for the health-care plans. The effects of a 1-percentage-point change in the assumed health-care cost trends are as follows:

	1-Percentage-Point
(in thousands)
	Increase		Decrease
Total of service and interest cost	$	71	$	(56	)
Accumulated post-retirement benefit obligation		734		(590	)

										Post-Retirement Benefits
	Pension Benefits
(in thousands)
	2002			2001			2000			2002			2001			2000
Components of net periodic (income) cost
Service cost	$	3,929		$	3,298		$	3,724		$	156		$	171		$	149
Interest cost		13,907			13,597			12,358			1,044			1,081			929
Expected return on plan assets		(27,200	)		(25,697	)		(23,017	)		—			—			—
Amortization of transition asset		(1,493	)		(1,521	)		(1,539	)		—			—			—
Amortization of prior service cost		996			949			1,080			(31	)		(34	)		(35	)
Recognized actuarial (gain) loss		(2,259	)		(3,567	)		(45	)		57			157			159
Curtailment loss		—			401			—			—			—			—
Net periodic (income) cost	$	(12,120	)	$	(12,540	)	$	(7,439	)	$	1,226		$	1,375		$	1,202

        The following information pertains to pension plans with accumulated benefit obligations in excess of plan assets:

	Pension Benefits
(in thousands)
	2002		2001
Projected benefit obligation	$	17,082	$	16,648
Accumulated benefit obligation		17,024		16,420

        The minimum liability recorded for pension plans where the accumulated benefit obligation exceeded the fair market value of assets is as follows:

(in thousands)	2002			2001
Minimum liability recognized in comprehensive loss	$	(4,210	)	$	(3,756	)
Tax benefit		1,644			1,465
Minimum liability recognized in comprehensive loss, net of tax	$	(2,566	)	$	(2,291	)

Defined Contribution Plans

        Defined contribution plans cover substantially all salaried, sales and certain hourly employees in the United States and Canada. We make contributions equal to 50% of our participating employees' contributions subject to certain limitations. Employer contributions, which are invested in shares of our common stock, were $2.3 million in fiscal 2002, $2.4 million in fiscal 2001 and $2.3 million in fiscal 2000.

Note 16: Multifoods' Business Segments

        We manage the company through four operating segments: U.S. Consumer Products, U.S. Foodservice Products, Canadian Foods and Multifoods Distribution Group. Our organizational structure is the basis for reporting business results to management and the segment data presented in this Note. We formed the U.S. Consumer Products business in fiscal 2002 as a result of our acquisition of certain retail brands from Pillsbury and General Mills. Also in fiscal 2002, we began reporting our U.S. Foodservice Products and Canadian Foods businesses as separate reportable business segments. Previously, these businesses were combined for segment reporting. We have reclassified comparative prior period information to reflect this change.

U.S. Consumer Products manufactures, markets and sells leading branded consumer foods in the United States. Brands include Pillsbury and Martha White desserts and baking mixes; Hungry Jack potatoes, pancake mixes and syrup; Farmhouse rice and pasta side dishes; Pet evaporated milk; and Softasilk, Robin Hood, La Piña and Red Band flour.

U.S. Foodservice Products manufactures, markets and sells baking mixes and frozen batters, doughs and desserts to foodservice operators and retail, wholesale and in-store bakeries, primarily in the United States.

Canadian Foods is a leading manufacturer and marketer of food products in Canada. The company's consumer brands include Robin Hood flour and baking mixes; Bick's condiments; and Red River and Old Mill cereals. We also are a leading provider of flour, baking mixes and condiments to foodservice operators and other commercial customers.

Multifoods Distribution Group is a leading distributor of food and other products to targeted segments of the foodservice industry in the United States. The company primarily serves limited-menu restaurants, such as pizza, sandwich and Mexican; vending operators; office coffee service market; movie theaters; fund-raising groups; commissaries; and stadium and recreational concessionaires.

        We do not allocate interest expense, income taxes or certain corporate expenses to our business segments. The following tables set forth information by business segment:

(in millions)		Net Sales		Operating Costs			Unusual Items			Operating Earnings
2002:
	U.S. Consumer Products	$	112.0	$	(99.7	)	$	—		$	12.3
	U.S. Foodservice Products		215.8		(210.8	)		(0.9	)		4.1
	Canadian Foods		282.7		(259.8	)		1.5			24.4
	Multifoods Distribution Group		2,238.6		(2,222.1	)		(1.0	)		15.5
	Corporate		—		(9.5	)		(0.3	)		(9.8	)
Total		$	2,849.1	$	(2,801.9	)	$	(0.7	)	$	46.5
2001:
	U.S. Consumer Products	$	—	$	—		$	—		$	—
	U.S. Foodservice Products		196.4		(185.7	)		—			10.7
	Canadian Foods		286.0		(256.2	)		(1.8	)		28.0
	Multifoods Distribution Group		2,042.5		(2,025.7	)		(0.3	)		16.5
	Corporate		—		(5.5	)		5.6			0.1
Total		$	2,524.9	$	(2,473.1	)	$	3.5		$	55.3
2000:
	U.S. Consumer Products	$	—	$	—		$	—		$	—
	U.S. Foodservice Products		200.0		(192.1	)		—			7.9
	Canadian Foods		285.1		(254.4	)		—			30.7
	Multifoods Distribution Group		1,899.6		(1,879.2	)		0.5			20.9
	Corporate		—		(7.1	)		—			(7.1	)
Total		$	2,384.7	$	(2,332.8	)	$	0.5		$	52.4

	2002						2001						2000
(in millions)	Capital Expenditures		Depreciation and Amortization		Assets		Capital Expenditures		Depreciation and Amortization		Assets		Capital Expenditures		Depreciation and Amortization		Assets
U.S. Consumer Products	$	1.3	$	0.8	$	284.3	$	—	$	—	$	—	$	—	$	—	$	—
U.S. Foodservice Products		7.6		5.2		126.0		12.3		4.9		95.4		7.2		4.8		86.1
Canadian Foods		14.7		7.1		172.1		10.2		6.6		147.7		11.1		6.0		146.6
Multifoods Distribution Group		5.5		14.3		409.2		12.4		13.7		424.2		31.1		11.0		400.2
Corporate		0.2		0.2		133.1		0.3		0.2		97.3		—		0.4		103.3
Total	$	29.3	$	27.6	$	1,124.7	$	35.2	$	25.4	$	764.6	$	49.4	$	22.2	$	736.2

        Corporate assets include cash and cash equivalents, U.S. prepaid pension assets, and current and deferred income tax assets.

Note 17: Quarterly Summary (unaudited)

(in millions)		Net Sales		Operating Costs			Unusual Items			Operating Earnings
First Quarter—2002
	U.S. Consumer Products	$	—	$	—		$	—		$	—
	U.S. Foodservice Products		52.5		(50.9	)		—			1.6
	Canadian Foods		61.7		(57.8	)		—			3.9
	Multifoods Distribution Group		551.9		(547.6	)		—			4.3
	Corporate		—		(2.7	)		—			(2.7	)
Total		$	666.1	$	(659.0	)	$	—		$	7.1
First Quarter—2001
	U.S. Consumer Products	$	—	$	—		$	—		$	—
	U.S. Foodservice Products		50.7		(47.7	)		—			3.0
	Canadian Foods		63.7		(59.2	)		—			4.5
	Multifoods Distribution Group		495.9		(490.7	)		—			5.2
	Corporate		—		(1.5	)		—			(1.5	)
Total		$	610.3	$	(599.1	)	$	—		$	11.2
Second Quarter—2002
	U.S. Consumer Products	$	—	$	—		$	—		$	—
	U.S. Foodservice Products		52.9		(51.5	)		—			1.4
	Canadian Foods		70.4		(64.6	)		—			5.8
	Multifoods Distribution Group		561.6		(558.0	)		—			3.6
	Corporate		—		(2.2	)		(0.3	)		(2.5	)
Total		$	684.9	$	(676.3	)	$	(0.3	)	$	8.3
Second Quarter—2001
	U.S. Consumer Products	$	—	$	—		$	—		$	—
	U.S. Foodservice Products		47.4		(44.9	)		—			2.5
	Canadian Foods		69.1		(62.5	)		—			6.6
	Multifoods Distribution Group		468.8		(465.0	)		(0.3	)		3.5
	Corporate		—		(1.2	)		5.6			4.4
Total		$	585.3	$	(573.6	)	$	5.3		$	17.0
Third Quarter—2002
	U.S. Consumer Products	$	16.3	$	(13.5	)	$	—		$	2.8
	U.S. Foodservice Products		55.2		(54.0	)		(0.3	)		0.9
	Canadian Foods		80.7		(73.2	)		1.5			9.0
	Multifoods Distribution Group		577.0		(572.7	)		(0.1	)		4.2
	Corporate		—		(2.3	)		—			(2.3	)
Total		$	729.2	$	(715.7	)	$	1.1		$	14.6
Third Quarter—2001
	U.S. Consumer Products	$	—	$	—		$	—		$	—
	U.S. Foodservice Products		50.7		(47.3	)		—			3.4
	Canadian Foods		80.4		(69.4	)		(1.5	)		9.5
	Multifoods Distribution Group		518.7		(512.7	)		—			6.0
	Corporate		—		(1.2	)		—			(1.2	)
Total		$	649.8	$	(630.6	)	$	(1.5	)	$	17.7
Fourth Quarter—2002
	U.S. Consumer Products	$	95.7	$	(86.2	)	$	—		$	9.5
	U.S. Foodservice Products		55.2		(54.4	)		(0.6	)		0.2
	Canadian Foods		69.9		(64.2	)		—			5.7
	Multifoods Distribution Group		548.1		(543.8	)		(0.9	)		3.4
	Corporate		—		(2.3	)		—			(2.3	)
Total		$	768.9	$	(750.9	)	$	(1.5	)	$	16.5
Fourth Quarter—2001
	U.S. Consumer Products	$	—	$	—		$	—		$	—
	U.S. Foodservice Products		47.6		(45.8	)		—			1.8
	Canadian Foods		72.8		(65.1	)		(0.3	)		7.4
	Multifoods Distribution Group		559.1		(557.3	)		—			1.8
	Corporate		—		(1.6	)		—			(1.6	)
Total		$	679.5	$	(669.8	)	$	(0.3	)	$	9.4

			First Quarter				Second Quarter						Third Quarter						Fourth Quarter						Total Year
(in millions, except per share data)
			2002		2001		2002			2001			2002			2001			2002			2001			2002			2001
Gross profit			$	42.2	$	44.7	$	43.6		$	45.0		$	52.6		$	52.6		$	69.8		$	46.7		$	208.2		$	189.0
Earnings (loss) before extraordinary item				2.1		4.8		2.8	(b)		5.2	(c)		(0.1	)(d)		8.5	(e)		4.9	(f)		2.7	(g)		9.7			21.2
Extraordinary loss on early extinguishment of debt				—		—		—			—			(0.5	)		—			—			—			(0.5	)		—
Net earnings (loss)				2.1		4.8		2.8			5.2			(0.6	)		8.5			4.9			2.7			9.2			21.2
Basic earnings (loss) per share of common stock (a):
	Before extraordinary item			0.11		0.25		0.15	(b)		0.28	(c)		(0.01	)(d)		0.45	(e)		0.26	(f)		0.14	(g)		0.51			1.13
	Extraordinary item			—		—		—			—			(0.02	)		—			—			—			(0.02	)		—
		Total		0.11		0.25		0.15			0.28			(0.03	)		0.45			0.26			0.14			0.49			1.13
Diluted earnings (loss) per share of common stock:
	Before extraordinary item			0.11		0.25		0.15	(b)		0.28	(c)		(0.01	)(d)		0.45	(e)		0.25	(f)		0.14	(g)		0.50			1.12
	Extraordinary item			—		—		—			—			(0.02	)		—			—			—			(0.02	)		—
		Total		0.11		0.25		0.15			0.28			(0.03	)		0.45			0.25			0.14			0.48			1.12
Comprehensive income				2.6		1.0		2.1			6.9			0.9			5.6			6.4			2.1			12.0			15.6
Dividends paid per share of common stock				—		0.20		—			0.20			—			0.20			—			0.20			—			0.80
Market price of common stock:
	Close			19.58		13.44		20.72			16.88			22.82			18.63			21.86			19.21			21.86			19.21
	High			20.45		14.94		22.17			18.56			22.84			18.63			24.67			23.31			24.67			23.31
	Low			17.35		9.81		19.42			12.56			16.30			15.75			20.88			16.44			16.30			9.81

(a)

Earnings (loss) per share are computed independently for each period presented. As a result, the sum of the quarterly earnings (loss) per share in fiscal 2001 does not equal the total computed for the year.

(b)

Includes a net after-tax charge of $0.2 million, or 1 cent per share, from unusual items.

(c)

Includes a net after-tax gain of $0.2 million, or 1 cent per share, from unusual items and tax expense associated with a dividend from our Canadian subsidiary.

(d)

Includes a net after-tax gain of $1.0 million, or 5 cents per share, from unusual items.

(e)

Includes a net after-tax charge of $0.9 million, or 5 cents per share, from unusual items.

(f)

Includes a net after-tax charge of $1.0 million, or 5 cents per share, from unusual items.

(g)

Includes a net after-tax charge of $0.2 million, or 1 cent per share, from unusual items.

Report of Independent Auditors

The Board of Directors and Shareholders of
International Multifoods Corporation:

        We have audited the accompanying consolidated balance sheets of International Multifoods Corporation and subsidiaries as of March 2, 2002, and March 3, 2001, and the related consolidated statements of earnings, cash flows and shareholders' equity for each of the years in the three-year period ended March 2, 2002. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated 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, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of International Multifoods Corporation and subsidiaries as of March 2, 2002, and March 3, 2001, and the results of their operations and their cash flows for each of the years in the three-year period ended March 2, 2002, in conformity with accounting principles generally accepted in the United States of America.

        As discussed in Note 1 to the consolidated financial statements, effective March 4, 2001, the Company adopted the provisions of Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended by SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities," and effective July 1, 2001, the Company adopted the provisions of SFAS No. 141, "Business Combinations," and certain provisions of SFAS No. 142, "Goodwill and Other Intangible Assets," as required for goodwill and intangible assets resulting from business combinations consummated after June 30, 2001.

/s/ KPMG LLP
KPMG LLP
Minneapolis, Minnesota
April 8, 2002

Report of Management

Management's Responsibility for Financial Statements

        Our consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States of America and include, where required, amounts based on our best estimates and judgments. We continue to be responsible for the integrity and objectivity of data in these consolidated financial statements, which we seek to ensure through an extensive system of internal controls. Such controls are designed to provide reasonable, but not absolute, assurance that assets are safeguarded from unauthorized use or disposition and that financial records are sufficiently reliable to permit the preparation of consolidated financial statements. We recognize that estimates and judgments are required to assess and balance the relative cost and expected benefits of any system of internal controls.

        The system of internal accounting controls is designed to provide reasonable assurance that the books and records reflect our transactions and that our established policies and procedures are carefully followed. The system includes written policies and procedures, a financial reporting system, an internal audit department and careful selection and training of qualified personnel.

/s/    Gary E. Costley	/s/    John E. Byom
Gary E. Costley Chairman and Chief Executive Officer	John E. Byom Vice President, Finance, and Chief Financial Officer

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Exhibit 13

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

EX-21

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Exhibit 21

SUBSIDIARIES OF INTERNATIONAL MULTIFOODS CORPORATION

        The following is a list of the Company's subsidiaries as of March 2, 2002, except for unnamed subsidiaries which, considered in the aggregate as a single subsidiary, would not constitute a significant subsidiary.

Name of Subsidiary			Jurisdiction of Incorporation
Fantasia Confections, Inc.			California
Martha White Foods, Inc.			Delaware
Multifoods Bakery Distributors, Inc.			Delaware
Multifoods Bakery International, Inc.			Delaware
	Inversiones 91060, C.A.		Venezuela
Multifoods Distribution Management, Inc.			Delaware
	Better Brands, Inc.		Delaware
	Multifoods Distribution Group, Inc.		Colorado
		Multifoods Merchandising, Inc.	Delaware
Multifoods Inc.			Delaware
Multifoods Inc.			Minnesota
Robin Hood Multifoods Inc.			Ontario
	Multifoods Ltd.		Ontario
	Gourmet Baker Inc.		Ontario
	980964 Ontario Limited		Ontario
Windmill Holdings Corp.			California

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Exhibit 21

SUBSIDIARIES OF INTERNATIONAL MULTIFOODS CORPORATION

EX-23

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EXHIBIT 23

Independent Auditors' Consent

The Board of Directors
International Multifoods Corporation:

        We consent to incorporation by reference in Registration Statement No. 333-51399 on Form S-8 relating to the Employees' Voluntary Investment and Savings Plan of International Multifoods Corporation, No. 333-34173 on Form S-8 relating to the Stock Purchase Plan of Robin Hood Multifoods Inc., No 2-84236 on Form S-8 relating to the 1983 Stock Option Incentive Plan of International Multifoods Corporation, No. 33-6223 on Form S-8 relating to the 1986 Stock Option Incentive Plan of International Multifoods Corporation, No. 33-30979 on Form S-8 relating to the Amended and Restated 1989 Stock-Based Incentive Plan of International Multifoods Corporation, No. 333-34171 on Form S-8, No. 333-69387 on Form S-8 and No. 333-86302 on Form S-8 relating to the 1997 Stock-Based Incentive Plan of International Multifoods Corporation, No.333-64075 on Form S-8 relating to the Consulting Agreement between International Multifoods Corporation and Daryl Schaller and No. 33-65221 on Form S-3 relating to certain debt securities of International Multifoods Corporation of our reports dated April 8, 2002, relating to the consolidated balance sheets of International Multifoods Corporation and subsidiaries as of March 2, 2002 and March 3, 2001 and the related consolidated statements of earnings, cash flows, and shareholders' equity, and related financial statement schedule for each of the fiscal years in the three-year period ended March 2, 2002, which reports appear or are incorporated by reference in the Annual Report on Form 10-K for the fiscal year ended March 2, 2002, of International Multifoods Corporation.

/s/    KPMG
Minneapolis, Minnesota
May 20, 2002

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EXHIBIT 23

Independent Auditors' Consent