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## management’s discussion and analysis 

Commodity Risk – The Company purchases certain raw materials which are subject to price volatility caused by weather, market conditions, growing and harvesting conditions, governmental actions and other unpredictable factors. While future movements of raw material costs are uncertain, the Company responds to this volatility in a number of ways, including strategic raw material pur- chases, purchases of raw material for future delivery and customer price adjustments. Generally, the Company does not use derivatives to manage the volatility related to this risk. 

Credit Risk – The customers of the consumer busi- ness are predominantly food retailers and food whole- salers. Recently, consolidations in these industries 

## Contractual Cash Obligations Due by Year 

have created larger customers, some of which are highly leveraged. This has increased the Company’s exposure to credit risk. Several customers over the past two years have filed for bankruptcy protection; however, these bankruptcies have not had a material effect on the Company’s results. The Company feels that the risks have been adequately provided for in its bad debt allowance. 

## Contractual Obligations and Commercial Commitments 

The following table reflects a summary of the Company’s contractual obligations and commercial commitments as of November 30, 2004: 

<img src='content_image/19112.jpg'>

(a) Raw material purchase obligations outstanding as of year-end may not be indicative of outstanding obligations throughout the year due to the Company’s response to varying raw material cycles. 

(b) Other purchase obligations primarily consist of advertising media commitments. 

Note: In 2005, the Company’s pension and postretirement funding is expected to be approximately $43 million. Pension and postretirement funding can vary significantly each year due to changes in legislation and the Company’s significant assumptions. As a result, the Company has not presented pension and postretirement funding in the table above. 

## Commercial Commitments Expiration by Year 

<img src='content_image/19111.jpg'>

Note: In January 2005, the Company entered into a new five-year, $400 million credit facility, which expires in January 2010. This facility replaces the line of credit of $350 million existing at year end of which $125 million would have expired in June 2005 and $225 million would have expired in June 2006. 

