Intangible Assets
During the fiscal year ended September 30, 2001, the Company acquired the Mueller’s brand from Bestfoods, Inc. for $44.4 million, consisting of $23.8 million in cash and 686,666 shares of common stock valued at $30 per share. The purchase price was allocated to trademarks and brand name. In addition, during the fiscal year ended September 30, 2001, the Company acquired seven pasta brands from Borden, Inc., including Anthony’s®, Globe “A1”®, Luxury®, Mrs. Grass®, Pennsylvania Dutch®, R&F®, and Ronco®. The purchase price in the Borden transaction was $72.6 million and has been preliminarily allocated to trademarks and brand name. These intangibles were assigned a life of forty years, and accordingly, the Company recognized approximately $1.0 million of amortization expense during the year ended September 30, 2001.

The Company has obtained preliminary independent appraisals of the fair values of the acquired Borden brands. Accordingly, the allocation of the purchase price is subject to revision, which is not expected to be material, based on the final determination of appraised and other fair values.

Effective October 1, 2001, the Company has adopted Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets, and assigned an indefinite life to trademarks and brand name and, as such, will no longer incur amortization expense related to these assets.

Intangible assets are reviewed at least annually for impairment by comparing the Company’s best estimate of fair value with the carrying amount of the intangible.

Other Assets
Other assets consist of the following:

Package design costs relate to certain incremental third party costs to design artwork and produce die plates and negatives necessary to manufacture and print packaging materials according to the Company’s and customers’ specification. These costs are amortized ratably over a two to five year period. In the event that product packaging is discontinued prior to the end of the amortization period, the respective package design costs are written off. Package design costs, net of accumulated amortization, were $2,573,000 and $1,190,000 at September 30, 2001 and 2000, respectively.

Income Taxes
The Company accounts for income taxes in accordance with the method prescribed by SFAS No. 109, “Accounting for Income Taxes.” Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.