INTERNATIONAL HOME FOODS INC, 424B4, 1997-11-19

INTERNATIONAL HOME FOODS INC
424B4, 1997-11-19
CANNED, FROZEN & PRESERVD FRUIT, VEG & FOOD SPECIALTIES

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<PAGE> 1
Filed Pursuant to Rule 424(b)(4)
Registration No. 333-36249

PROSPECTUS

NOVEMBER 18, 1997

13,622,500 SHARES

[INTERNATIONAL HOME FOODS LOGO]

INTERNATIONAL HOME FOODS, INC.
COMMON STOCK
Of the 13,622,500 shares of common stock, $0.01 par value ("Common Stock"),
being offered hereby, 10,526,359 shares are being sold by International Home
Foods, Inc. ("International Home Foods," "IHF" or the "Company") and 3,096,141
shares are being sold by a subsidiary of American Home Products Corporation (the
"Selling Stockholder"). The Company will not receive any of the proceeds from
the sale of shares by the Selling Stockholder. See "Principal and Selling
Stockholders."

Of the 13,622,500 shares of Common Stock being offered hereby, 10,898,000
shares are being offered initially in the United States and Canada (the "U.S.
Offering") by the U.S. Underwriters (as defined herein) and 2,724,500 shares are
being offered initially outside the United States and Canada (the "International
Offering," and, together with the U.S. Offering, the "Offering") by the
International Managers (as defined herein). The initial public offering price
and the underwriting discounts and commissions of the U.S. Offering and the
International Offering are identical. See "Underwriting."

Prior to the Offering, there has been no public market for the Common
Stock. See "Underwriting" for information relating to the factors considered in
determining the initial public offering price.

The shares of Common Stock offered hereby have been approved for listing on
the New York Stock Exchange under the symbol "IHF."

SEE "RISK FACTORS" BEGINNING ON PAGE 11 HEREIN FOR A DISCUSSION OF CERTAIN
MATTERS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
PRICE UNDERWRITING PROCEEDS PROCEEDS
TO THE DISCOUNTS AND TO THE TO THE
PUBLIC COMMISSIONS(1) COMPANY(2) SELLING STOCKHOLDER
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share.......................... $20.00 $1.20 $18.80 $18.80
Total(3)........................... $272,450,000 $16,347,000 $197,895,549 $58,207,451
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) The Company and the Selling Stockholder have agreed to indemnify the
Underwriters (as defined herein) against certain liabilities, including
liabilities under the Securities Act of 1933. See "Underwriting."
(2) Before deducting expenses estimated at $2,000,000, which will be paid by the
Company.
(3) The Company and the Selling Stockholder have granted to the U.S.
Underwriters an option, exercisable within 30 days of the date hereof, to
purchase up to 2,043,375 additional shares of Common Stock at the Price to
the Public less Underwriting Discounts and Commissions, solely to cover
over-allotments, if any. If such option is exercised in full, the total
Price to the Public, Underwriting Discounts and Commissions, Proceeds to the
Company and Proceeds to the Selling Stockholder will be $313,317,500,
$18,799,050, $227,579,881 and $66,938,569, respectively. See "Underwriting."

The shares offered hereby are being offered by the several U.S. Underwriters
when, as and if delivered to and accepted by the U.S. Underwriters and subject
to various prior conditions, including their right to reject orders in whole or
in part. It is expected that delivery of certificates for the shares offered
hereby will be made in New York, New York on or about November 21, 1997.

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
BT ALEX. BROWN
CHASE SECURITIES INC.
CREDIT SUISSE FIRST BOSTON
GOLDMAN, SACHS & CO.
MORGAN STANLEY DEAN WITTER
<PAGE> 2

[The inside cover will contain art work of colored brand trademarks and
logos of the Company including "Chef Boyardee(R)," "Bumble Bee(R)," "PAM(R),"
"Polaner(R) All Fruit," "Original Ro*Tel(R)," "Campfire(R)," "Ranch Style(R),"
"Crunch 'n Munch(R)," "Gulden's(R)," "Luck's," "Dennison's(R) Since 1915,"
"Jiffy Pop(R)," "Wheatena(R)," "Maypo(R)" and "G. Washington's(R)."]

CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SPECIFICALLY, THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE OFFERING AND
MAY BID FOR AND PURCHASE SHARES OF COMMON STOCK IN THE OPEN MARKET. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
---------------------

"Chef Boyardee," "Bumble Bee," "PAM," "Polaner," "Franklin Crunch 'n Munch"
(hereinafter "Crunch 'n Munch"), "Gulden's," "Campfire," "Marshmallow Munchie,"
"Ranch Style," "Luck's," "Dennison's," "Ro*Tel," "Jiffy Pop" and "G.
Washington's" are registered trademarks of the Company. Registration of the Chef
Jr. trademark is pending. "Wheatena," "Maypo" and "Maltex" are registered
trademarks licensed to the Company. This Prospectus also includes trademarks of
companies other than the Company.
<PAGE> 3

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and financial statements,
including the notes thereto, appearing elsewhere in this Prospectus. Except as
otherwise indicated, (i) all references to market, category, segment sales,
market share percentages and market positions reflect grocery sales dollars for
the 52-week period ended September 27, 1997, as gathered by A.C. Nielsen
("Nielsen") for United States and Mexico markets, (ii) the information provided
in this Prospectus assumes no exercise of the U.S. Underwriters' over-allotment
option and (iii) references to the Company include the Company and its
subsidiaries. "Aggregate net sales" includes the effect of (i) the acquisition
(the "Bumble Bee Acquisition") of the assets and certain liabilities of Bumble
Bee Seafoods, Inc. and its operating subsidiaries ("Bumble Bee Seafoods"), (ii)
the purchase of Heritage Brands Holding, Inc. ("Heritage"), (iii) the purchase
of Productos Del Monte S.A. de C.V. ("Productos Del Monte") and (iv) the
purchase of Creative Products, Inc. ("Creative Products") as if they had
occurred at the beginning of the period discussed. The branded canned seafood
business acquired in the Bumble Bee Acquisition is referred to herein as the
Bumble Bee Business. All information in this Prospectus reflects a 5.3292 for
one reverse stock split effected prior to the closing of the Offering. Certain
statements contained in this summary and elsewhere in this Prospectus,
including, but not limited to, information with respect to the Company's
business and liquidity and capital resources, are forward-looking statements.

BUSINESS

OVERVIEW

The Company is a leading North American manufacturer and marketer of a
diversified, well-established portfolio of shelf-stable food products with
popular brand names, including Chef Boyardee prepared foods, Bumble Bee premium
canned seafood, PAM cooking spray, Polaner fruit spreads and spices and Gulden's
mustard. In the United States, 11 of the Company's 14 principal branded product
lines command the number one position in their defined markets. For the fiscal
year ended December 31, 1996, these 11 branded product lines accounted for
$863.2 million or 58.3% of the Company's aggregate net sales. Many of the
Company's brands also command leading market positions in Canada, Mexico and
Puerto Rico. The Company's portfolio of leading brands provides the Company with
a strong presence in the United States as well as an attractive platform for
continued international expansion. The Company's brand name business is
complemented by growing food service and private label businesses and sales to
the U.S. military.

In November 1996, the Company was the subject of a leveraged
recapitalization pursuant to which affiliates of Hicks, Muse, Tate & Furst
Incorporated ("Hicks Muse") and C. Dean Metropoulos, the Company's new Chairman
and Chief Executive Officer, acquired control of the Company (the "IHF
Acquisition") from American Home Products Corporation ("American Home
Products"), the parent of the Selling Stockholder. Under Mr. Metropoulos'
direction, the Company has implemented a strategy to increase sales and profits
by (i) growing sales of existing brands, (ii) expanding distribution into
alternative markets, (iii) completing strategic acquisitions and (iv) achieving
cost savings. The Company's pro forma as adjusted net sales and operating profit
for the fiscal year ended December 31, 1996 were $1,338.4 million and $157.7
million, respectively. For the nine month period ended September 30, 1997, the
Company's pro forma as adjusted net sales were $1,022.9 million, and the
Company's pro forma as adjusted operating profit, before giving effect to a
non-cash stock option compensation charge of $44.8 million, was $134.5 million.
See "Unaudited Pro Forma Financial Statements."

PAM cooking spray, Polaner fruit spreads and spices, Gulden's mustard, Maypo,
Wheatena and Maltex hot cereals and G. Washington's dry seasonings and broths.
In the growing market for southwestern cuisine, the Company's products include
Ro*Tel canned tomatoes with green chilies and strong regional brands such as
Ranch Style and Luck's canned beans and Dennison's chili. In the snack foods
category, the Company's brands include Crunch 'n Munch glazed popcorn and
pretzels, Campfire marshmallows and marshmallow crisp rice bars and Jiffy Pop
unpopped popcorn. The Company, through its Productos Del Monte subsidiary, is
also a leading processor and marketer of branded catsup, canned vegetables and
bottled salsa in Mexico.

The Company's recognizable portfolio of leading brands provides a critical
mass of brand name sales that (i) allows the Company to realize synergies in
manufacturing, marketing, distribution and raw material sourcing, (ii) creates a
position of strength with retailers that is critical in maintaining and securing
valuable retail shelf space for its products and (iii) provides a strong
platform for introducing product line extensions and new products. The following
table sets forth market positions and market shares of the Company's principal
product lines, along with certain competitors' market share information.

MARKET POSITION OF PRINCIPAL PRODUCT LINES

<TABLE>
<CAPTION>
MARKET SHARE NUMBER TWO
------------------------------- COMPETITOR'S
PRODUCT LINE CATEGORY/SEGMENT POSITION PERCENTAGE PERCENTAGE
------------ ---------------- ------------------ ---------- ------------
<S> <C> <C> <C> <C>
UNITED STATES
CHEF BOYARDEE BRANDED PRODUCTS
Chef Boyardee.................. Canned Pasta....................... #1 57% 37%
Chef Boyardee.................. Pizza Mixes........................ #1 69% 15%
BUMBLE BEE BRANDED PRODUCTS
Bumble Bee..................... Canned White Meat Tuna............. #1 40% 34%
Bumble Bee..................... Canned Light Meat Tuna............. #3 16% NA
Bumble Bee..................... Canned Salmon...................... #1 21% 9%
SPECIALTY BRANDS
PAM............................ Cooking Spray...................... #1 52% 13%
Polaner........................ Fruit-Juice-Sweetened Spreads...... #1 48% 32%
Gulden's....................... Brown Mustard...................... #1 50% 25%
SOUTHWESTERN CUISINE
Ro*Tel......................... Canned Tomatoes with Green
Chilies............................ #1 76% 1%
Ranch Style.................... Canned Beans(1).................... #1 in Southwest(2) 27% 13%
Luck's......................... Canned Beans(1).................... #1 in Southeast(2) 30% 26%
Dennison's..................... Canned Chili....................... #4 in West(2)(3) 18% NA
SNACK FOODS
Crunch 'n Munch................ Glazed Popcorn..................... #1 37% 33%
Campfire....................... Marshmallow Crisp Rice Bars........ #3 7% NA
MEXICO
Productos Del Monte............ Catsup............................. #1 46% 29%
</TABLE>

- ---------------

(1) The canned beans category includes both the pork and beans and miscellaneous
beans categories. In their respective regions, Ranch Style leads both
categories with a total market share of 27%, and Luck's leads the
miscellaneous beans category with a market share of 30%.

(2) The Company defines (i) the Southwest region to include Nielsen reported
information for Texas, Oklahoma, New Mexico and Arizona, (ii) the Southeast
region to include Nielsen reported information for Georgia, Alabama, North
Carolina, South Carolina, Kentucky, Tennessee and Virginia and (iii) the
West region to include Nielsen reported information for Colorado, Wyoming,
Idaho, Nevada, California, Oregon, Arizona, Washington and Utah.

(3) Dennison's has the #2 market share in California, which represents
approximately 74% of Dennison's net sales.
4
<PAGE> 5

BUSINESS STRATEGY

The Company's objectives are to increase sales and earnings by (i) growing
sales of existing brands through expansion of the Company's product offerings
and refocused marketing efforts, (ii) expanding distribution in food service,
private label and international markets, (iii) completing strategic acquisitions
and (iv) continuing to achieve cost savings.

- Leverage Leading Brands. The Company intends to expand its product
offerings by leveraging its existing portfolio of leading brands.
Management believes that (i) Chef Boyardee and Bumble Bee can serve as a
strong platform to expand the Company's product line into other
quick-meal products, (ii) Dennison's, Ranch Style, Luck's and Ro*Tel can
be utilized to develop a broader southwestern cuisine business and (iii)
Crunch 'n Munch, Campfire and Jiffy Pop can be the cornerstone of a
diversified snack foods business. In addition, management has formulated
a number of new products in its existing product lines to capitalize on
the growing trends toward healthy and convenient foods. In the last 12
months, the Company has introduced 10 new products under its existing
brand names, two of which were the first fat-free or 99% fat-free entries
into the categories in which they compete.

- Refocus Marketing Efforts. To revitalize its established brand names, the
Company has refocused its marketing and packaging efforts. Specifically,
the Company has (i) changed its marketing and promotional campaigns to
more effectively address its target markets, (ii) increased advertising
expenditures to enhance brand equity and (iii) introduced new packaging
for a majority of its products. Since 1995, the Company has refocused its
marketing efforts by emphasizing consumer advertising (a "pull" strategy)
and de-emphasizing trade spending and discounting (a "push" strategy). As
a result, advertising costs as a percentage of total marketing expenses
increased from 16.3% in 1994 to 25.7% in the first nine months of 1997
while trade promotion expenses as a percentage of total marketing
expenditures declined from 63.5% to 59.8%. The Company recently
introduced several new television advertising campaigns, such as those
promoting Chef Boyardee as an ideal "fourth meal" to be served after
school and PAM cooking spray as a flavorful, healthy alternative to
cooking oils, butter and margarine. Since the new Chef Boyardee
television campaign was introduced in November 1996, consumer sales of
Chef Boyardee's principal product group, the "All Family" product line,
has increased significantly, with consumer sales through September 1997
increasing 7.7% over the comparable 1996 period. In addition, the Company
recently began television advertising for its Ranch Style brand for the
first time in five years. The Company has also redesigned the packaging
of a majority of its products to emphasize the brand name, contemporize
the presentation and make the products visually more appealing to
consumers.

- Expand into Food Service, Private Label and International
Markets. Management believes that the food service and private label
businesses, which together represent 8.8% of the Company's aggregate 1996
net sales, offer significant growth opportunities. Management believes
that it can further develop these businesses by utilizing the Company's
established sales and distribution capabilities and excess plant
capacity. As part of this strategy, the Company recently acquired
Creative Products, the leading manufacturer of cooking spray sold to
private label and food service customers in the U.S. Management believes
that Creative Products' dedicated private label and food service sales
force can help the Company increase sales of many of its other products
in these markets. In addition, management believes that attractive
opportunities exist to expand the Company's sales in international
markets with growing economies and attractive demographics. The Company
recently acquired Productos Del Monte, a leading producer and distributor
of branded catsup, canned vegetables and bottled salsa in Mexico. The
Company plans to leverage the infrastructure of Productos Del Monte as a
platform to expand the Company's southwestern cuisine, cooking spray,
canned pasta and canned seafood products into Mexico.

that additional strategic acquisition opportunities exist and that
incremental revenue and earnings can be generated by leveraging the
Company's production, distribution, sales and administrative
capabilities. In addition, an important element of management's
evaluation of a strategic acquisition is the potential savings attainable
through rationalization of the target company's cost structure.

- Continue to Achieve Cost Savings. Since the IHF Acquisition, the Company
has achieved annualized net cost savings of approximately $25.3 million,
including approximately $11.1 million associated with the integration of
the Bumble Bee Business. These savings have been achieved primarily
through (i) reductions in overhead and duplicative administrative, sales
and other personnel ($15.5 million), (ii) streamlining production,
distribution, research and administrative functions ($7.3 million) and
(iii) savings in packaging and brokerage expenses ($2.5 million). To
achieve these cost savings, the Company incurred one time charges of
approximately $5.0 million, most of which was recognized in the year ended
December 31, 1996. Management expects to be able to achieve further cost
savings by continuing these initiatives.

COMPETITIVE STRENGTHS

Management believes that the Company has the following competitive
strengths that will enable it to execute its business strategy effectively.

- Well-Positioned Products in Growing Markets. The Company's diversified
portfolio of branded products is well-positioned to meet the growing
demand for convenient and healthy foods. Many of the Company's products,
such as Chef Boyardee canned pasta and Bumble Bee canned seafood, are
quick and easy to prepare and nutritionally sound. As such, management
believes these products are particularly appealing to families with
children. Many of the Company's other brands also benefit from the trend
toward healthier eating, including PAM, Polaner, Ro*Tel and Ranch Style.
The Company has introduced several new products that capitalize on the
trend toward fat-free foods such as Chef Boyardee 99% Fat-Free, Crunch 'n
Munch Fat-Free and Luck's Fat-Free Beans. In addition, the Company's
strong southwestern cuisine products provide a platform to capitalize on
the cuisine's growing national popularity. Furthermore, through the
acquisition of Productos Del Monte, the Company has established a
presence in the growing Mexico market for processed food products.

- Well-Developed Infrastructure with Capacity for Growth. The Company's
manufacturing plants and distribution network have significant excess
capacity that can be utilized to support the (i) growth of the Company's
existing branded and nonbranded businesses, (ii) introduction of new
products and entry into new markets and (iii) integration of strategic
acquisitions. The Company's principal manufacturing facilities in Milton,
Pennsylvania and Vacaville, California are operating at approximately 55%
and 28% of their respective capacities (based on a five-day, two-shift
work schedule). In addition, the Company has a comprehensive U.S. sales
force and distribution network which management believes has the capacity
to support substantial increases in volume. Management believes this
sales and distribution network enables the Company to meet or exceed
customer service requirements by delivering 85% of its sales volume to
customers within 24 hours and 100% within 48 hours.

- Strong Management. The Company's senior management team is comprised of
food and consumer product industry veterans led by C. Dean Metropoulos,
the Company's Chairman and CEO, and John Bess, the Company's President and
COO. Mr. Metropoulos is CEO of The Morningstar Group, Inc. ("Morningstar")
and has been CEO of several other food companies, including Stella Foods,
Inc. ("Stella"). During Mr. Metropoulos' tenure at Morningstar and Stella,
he implemented successful sales growth and cost reduction strategies which
dramatically increased sales and earnings at both companies. Many of these
strategies are similar to those that are being implemented by the Company.
Mr. Bess has extensive experience in growing established brand names by
implementing aggressive consumer based marketing programs. Mr. Bess has 21
years of management and consumer marketing experience at The Procter &
Gamble Company ("Procter & Gamble"), most recently serving as Vice
President and Managing Director of Worldwide Strategic Planning for
Procter & Gamble's global hair
6
<PAGE> 7

care business, which generated 1996 sales of $2.6 billion. In addition, the
Company's six general managers overseeing brand performance have an average of
approximately 20 years of experience in the food industry.

- Strong Profit Margins to Fund Growth. Management believes that the
Company's strong operating profit margins provide financial resources
necessary to fund the Company's internal growth strategy. From 1991
through 1996 (prior to the Bumble Bee Acquisition), the Company achieved
an average annual operating profit margin of 15.2%. As a result of the
Company's strong operating profit margins, the Company generated cash flow
from operations of $146.0 million in 1996. Management believes that its
high operating profit margins and cash flow from operations result from
the Company's leading market position in high margin food categories as
well as the cost efficiencies gained from significant historical
investment in the Company's manufacturing and distribution network. The
Company's strong financial performance and its relatively low capital
expenditure requirements are expected to generate significant cash flow to
fund the Company's internal growth strategy.

OWNERSHIP AND MANAGEMENT

Upon completion of the Offering, Hicks Muse will beneficially own
approximately 58.0% and C. Dean Metropoulos will beneficially own approximately
4.8% of the outstanding shares of Common Stock. None of Hicks Muse, Mr.
Metropoulos or their related entities is selling any shares in the Offering. See
"Principal and Selling Stockholders."

Hicks Muse is a private investment firm based in Dallas, New York, St.
Louis and Mexico City that specializes in acquisitions, recapitalizations and
other principal investing activities. Hicks Muse has a distinctive investment
philosophy emphasizing growth of sales and earnings in existing portfolio
companies by pursuing strategic acquisitions. Since the firm's inception in
1989, Hicks Muse has completed or has pending 148 transactions having a combined
transaction value exceeding $24.1 billion. Of the completed or pending
transactions, 44 have been acquisitions of platform companies such as
International Home Foods and 104 have been strategic acquisitions by a platform
company such as the Bumble Bee Acquisition by International Home Foods. This
strategy has been successfully employed in a number of Hicks Muse portfolio
companies such as Berg Electronics, Inc. and Chancellor Media Corporation. In
International Home Foods, Hicks Muse has combined its financial experience with
the operating management experience of Mr. Metropoulos. Hicks Muse and Mr.
Metropoulos have established an exclusive relationship to pursue acquisitions of
food companies that Mr. Metropoulos will manage. See "Risk Factors -- Control by
Principal Stockholder; Relationship with Principal Stockholder and Management;
Allocation of Corporate Opportunities."
7
<PAGE> 8

THE OFFERING

<TABLE>
<S> <C> <C>
Common Stock Offered:

By the Company
U.S. Offering................... 8,421,087 shares
International Offering.......... 2,105,272 shares
-----------
Subtotal................... 10,526,359 shares

By the Selling Shareholder
U.S. Offering................... 2,476,913 shares
International Offering.......... 619,228 shares
-----------
Subtotal................... 3,096,141 shares

Total.............................. 13,622,500 shares
-----------

Common Stock to be outstanding after
the Offering(1).................... 75,576,596 shares

Use of proceeds...................... Repayment of indebtedness under the Company's senior secured
credit facilities (the "Senior Bank Facilities").

New York Stock Exchange symbol....... IHF
</TABLE>

- ---------------

(1) Excludes 7,645,253 shares of Common Stock issuable upon exercise of
outstanding stock options granted to certain employees of the Company. The
Company has reserved an additional 798,768 shares of Common Stock for
issuance in connection with options that may be granted under the Company's
1997 Stock Option Plan (the "Stock Option Plan"). See "Management -- Benefit
Plans."

RISK FACTORS

Prospective purchasers of the Common Stock should consider carefully all of
the information set forth in this Prospectus and, in particular, should evaluate
the specific factors set forth under the caption "Risk Factors" beginning on
page 11, which provides a discussion of certain risks involved in an investment
in the Common Stock.
8
<PAGE> 9

SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA

The following table sets forth summary historical and pro forma as adjusted
financial data of the Company for the periods ended and as of the dates
indicated. The summary historical statement of operations data for the years
ended December 31, 1994, 1995 and 1996 and the summary historical balance sheet
data as of December 31, 1996 are derived from the audited financial statements
of the Company included elsewhere in this Prospectus. The summary historical
statement of operations data for the nine month periods ended September 30, 1996
and 1997 and the summary historical balance sheet data as of September 30, 1997
are derived from the unaudited financial statements of the Company included
elsewhere in this Prospectus and which, in the opinion of management, include
all adjustments necessary for a fair presentation. The selected historical
statement of operations data for the year ended December 31, 1993 are derived
from the audited financial statements of the Company not included in the
Prospectus. The summary historical statement of operations data for the year
ended December 31, 1992 are derived from the unaudited financial statements of
the Company which are not included in this Prospectus and which, in the opinion
of management, include all adjustments necessary for a fair presentation. The
summary pro forma as adjusted financial data reflect adjustments, where
appropriate, to the historical financial data of the Company to give effect to
(i) the IHF Acquisition, (ii) the Bumble Bee Acquisition and (iii) the Offering
as if each had occurred on January 1, 1996. This information should be read in
conjunction with the Company's historical consolidated financial statements, and
the unaudited pro forma financial statements and related notes thereto appearing
elsewhere in this Prospectus and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------------------------------------------- ----------------------------------
1992 1993 1994 1995 1996(1)(2) 1996 1997(1)(2)
------------------------- -------------------------
PRO FORMA PRO FORMA
ACTUAL AS ADJUSTED ACTUAL AS ADJUSTED
(IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Net sales................ $865.8 $935.7 $997.3 $ 818.9 $ 942.8 $ 1,338.4 $704.1 $ 843.9 $ 1,022.9
Cost of goods sold....... 402.6 432.0 463.1 398.2 444.9 723.1 333.9 412.9 538.1
------ ------ ------ ------- ----------- ----------- ------ ----------- -----------
Gross profit............. 463.2 503.7 534.2 420.7 497.9 615.3 370.2 431.0 484.8
Marketing expenses:
Advertising............ 36.8 33.2 32.8 42.4 58.6 59.0 43.0 45.9 46.0
Consumer promotion..... 26.2 21.5 25.5 23.5 17.5 19.0 13.3 15.0 16.7
Trade promotion........ 101.0 118.7 127.6 102.0 101.0 182.9 74.6 106.6 145.2
Other.................. 15.2 16.5 14.9 18.5 14.4 20.1 9.3 10.9 12.4
------ ------ ------ ------- ----------- ----------- ------ ----------- -----------
Total marketing
expenses......... 179.2 189.9 200.8 186.4 191.5 281.0 140.2 178.4 220.3
Other operating expenses:
Selling................ 43.3 47.2 52.3 45.9 46.3 55.5 33.6 34.0 38.0
Storage, packing and
shipping............. 51.0 57.6 63.4 55.3 55.2 53.4 41.2 44.0 43.4
Administrative......... 17.0 20.5 23.2 23.6 19.7 30.8 14.2 20.1 25.8
General and other...... 16.4 35.2 35.3 40.9 32.0 36.9 21.3 21.8 22.8
Stock option
compensation(3)...... -- -- -- -- -- -- -- 44.8 44.8
------ ------ ------ ------- ----------- ----------- ------ ----------- -----------
Total other
operating
expenses(1)(2)... 127.7 160.5 174.2 165.7 153.2 176.6 110.3 164.7 174.8
------ ------ ------ ------- ----------- ----------- ------ ----------- -----------
Operating profit......... 156.3 153.3 159.2 68.6 153.2 157.7(4) 119.7 87.9 89.7
Interest expense......... -- -- -- -- 17.1 85.9 -- 79.2 75.0
Interest income and
other, net............. -- -- -- -- 0.2 0.3 -- 1.6 --
Provision for income
taxes.................. 56.7 60.9 63.3 29.4 53.3 33.8 45.5 4.2 11.5
------ ------ ------ ------- ----------- ----------- ------ ----------- -----------
Net income............... $ 99.6 $ 92.4 $ 95.9 $ 39.2 $ 83.0 $ 38.3 $ 74.2 $ 6.1 $ 3.2
====== ====== ====== ======= =========== =========== ====== =========== ===========
Income per common share(5)................................... $ 1.34 $ 0.10
Weighted average number of shares outstanding(5)............. 61,922,990 63,347,912
(Unaudited) Pro forma income per common share(5)............. $ 1.07 $ 0.50 $ 0.08 $ 0.04
Pro forma weighted average number of shares outstanding(5)... 77,328,135 77,328,135 77,328,135 77,328,135
BALANCE SHEET DATA (END OF PERIOD):
Working capital (excluding current portion of long-term
debt)...................................................... $ 107.6 $ 181.1 $ 181.1
Total assets................................................. 968.3 1,181.8 1,170.7
Long-term debt (including current portion)................... 1,070.0 1,191.5 996.6
Stockholders' equity (deficit)............................... (264.2) (213.4) (29.6)
OTHER FINANCIAL DATA:
Depreciation and
amortization........... $ 11.8 $ 25.0 $ 26.4 $ 30.2 $ 19.0 $ 23.7 $ 13.7 $ 21.9 $ 22.6
Capital expenditures..... 18.6 22.0 31.1 24.2 11.9 13.4 8.5 8.6 8.6
</TABLE>

9
<PAGE> 10

(1) Operating expenses for historical periods include certain nonrecurring
charges recognized by the Company in connection with the IHF Acquisition and
subsequent management initiatives aggregating $6.0 for the year ended
December 31, 1996, consisting of: severance expense ($3.2), costs associated
with change of corporate name and relabeling of the Company's products
($1.2), expenses of hiring and relocating of certain senior executives
($1.2) and other costs ($0.4). Nonrecurring charges recognized in the nine
months ended September 30, 1997 amounted to $1.7, consisting of additional
severance ($0.7), relocation expense ($0.7) and relabeling costs ($0.3).
Operating expenses for the nine months ended September 30, 1997 also include
a non-cash stock option compensation charge of $44.8.

(2) Operating expenses on a pro forma as adjusted basis for the year ended
December 31, 1996 include the nonrecurring charges referred to in Note (1)
above, plus the following nonrecurring charges in connection with the
integration of the Bumble Bee Business: $4.9, consisting of purchase
accounting adjustments ($2.5), write-off of deferred financing fees ($1.1)
and management fees paid to the former owners of the business ($1.3). For
the nine months ended September 30, 1997, such nonrecurring charges amounted
to $0.9, consisting of management fees paid to the former owners of the
business ($0.6) and severance ($0.3).

(3) Represents non-cash compensation expense associated with stock options
granted to the Company's senior management and other employees. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Nine Months Ended September 30, 1997 Compared to Nine Months
Ended September 30, 1996."

(4) Operating profit for the year ended December 31, 1996 on a pro forma as
adjusted basis was $157.7. Excluding the effect of the nonrecurring charges
discussed in Notes (1) and (2) above of $10.9, including the $0.5 operating
profit of Heritage for the period prior to its acquisition (January 1, 1996
through October 31, 1996) and including the $25.3 of annualized net cost
savings achieved since the IHF Acquisition, operating profit on a pro forma
as adjusted basis would have been $194.4. The annualized cost savings
primarily reflect elimination of employee positions and facility
consolidations, net of increased corporate overhead. There can be no
assurance the cost savings will be realized.

(5) Due to the change in the Company's capital structure as a result of the IHF
Acquisition, historical share and per share data for periods prior to the
IHF Acquisition are not comparable to or meaningful in the context of future
periods. Pro forma income per common share is based on the weighted average
number of shares of common stock and common stock equivalents outstanding
during the period adjusted for the 5.3292 for one reverse stock split. The
weighted average number of shares outstanding include the shares of common
stock outstanding prior to the Offering (dilutive options are considered to
be outstanding from the beginning of the periods presented) and the shares
to be issued in the Offering. Including shares of Common Stock issued in
connection with the acquisition of Productos Del Monte on October 1, 1997
and shares issued upon exercise of stock options granted after September 30,
1997, the pro forma weighted average number of shares outstanding would be
80.6 million.
10
<PAGE> 11

RISK FACTORS

This Prospectus contains forward-looking statements. The words
"anticipate," "believe," "expect," "plan," "intend," "estimate," "project,"
"will," "could," "may" and similar expressions are intended to identify
forward-looking statements. Such statements reflect the Company's current views
with respect to future events and financial performance and involve risks and
uncertainties, including without limitation the risks described in this section.
Should one or more of these risks or uncertainties occur, or should underlying
assumptions prove incorrect, actual results may vary materially and adversely
from those anticipated, believed, expected, planned, intended, estimated,
projected or otherwise indicated. Investors should carefully consider the
following risk factors, in addition to the other information contained in this
Prospectus, before purchasing the Common Stock offered hereby.

SUBSTANTIAL LEVERAGE AND STOCKHOLDERS' DEFICIT

The Company is highly leveraged. As of September 30, 1997, pro forma as
adjusted for the Offering and the application of the net proceeds therefrom, the
Company had outstanding indebtedness of $996.6 million, including $596.6 million
under the Senior Bank Facilities and $400.0 million of the Company's 10 3/8%
Senior Subordinated Notes due 2006 ("Senior Subordinated Notes"), and a
stockholders' deficit of $29.6 million. A substantial portion of the cash flow
from the Company's operations will be applied to the service of the Company's
obligations in respect of its indebtedness for the foreseeable future. In
addition to periodic interest payments, the Company is required to make
semiannual repayments of the term loans under its Senior Bank Facilities and is
further required to apply a portion of its excess cash flow to repay the loans
thereunder. See "Description of Indebtedness."

The Company's high degree of leverage could have important consequences to
the holders of the Common Stock, including but not limited to the following: (i)
the Company's ability to obtain additional financing for working capital,
capital expenditures, acquisitions, general corporate purposes or other purposes
may be impaired in the future, (ii) a substantial portion of the Company's cash
flow from operations must be dedicated to the payment of principal and interest
on its indebtedness, thereby reducing the funds available to the Company for
other purposes, (iii) certain of the Company's borrowings are at variable rates
of interest (including borrowings under the Senior Bank Facilities), which
expose the Company to the risk of increased interest rates, (iv) the Company may
be substantially more leveraged than certain of its competitors, which may place
the Company at a competitive disadvantage and (v) the Company's substantial
degree of leverage may limit its flexibility to implement its business strategy
and adjust to changing market conditions, reduce its ability to withstand
competitive pressures and make it more vulnerable to a downturn in general
economic conditions or its business.

The Company's ability to make scheduled payments or to refinance its
obligations with respect to its indebtedness will depend on its financial and
operating performance, which in turn will be subject to prevailing economic
conditions and to certain financial, business and other factors beyond its
control. If the Company's cash flow and capital resources are insufficient to
fund its debt service obligations, the Company may be forced to reduce or delay
planned expansion and capital expenditures, sell assets, obtain additional
equity capital or restructure its debt. There can be no assurance that the
Company's operating results, cash flow and capital resources will be sufficient
for payment of its indebtedness in the future. In the absence of such operating
results and resources, the Company could face substantial liquidity problems and
might be required to dispose of material assets or operations to meet its debt
service and other obligations, and there can be no assurance as to the timing of
such sales or the proceeds that the Company could realize therefrom. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources" and "Description of
Indebtedness."

RESTRICTIVE DEBT COVENANTS

The Senior Bank Facilities and the indenture related to the Senior
Subordinated Notes (the "Indenture") contain a number of significant covenants
that, among other things, restrict the ability of the Company and its
subsidiaries to dispose of assets, incur additional indebtedness, incur
guarantee obligations, repay other indebtedness or amend other debt instruments,
pay dividends, create liens on assets, enter into leases, make investments,
loans or advances, make acquisitions, engage in mergers or consolidations, make
capital

11
<PAGE> 12

expenditures, engage in certain transactions with subsidiaries and affiliates
and otherwise restrict corporate activities. In addition, the Company is
required to comply with specified financial ratios and satisfy certain financial
condition tests. The Company's ability to comply with such agreements may be
affected by events beyond its control, including prevailing economic, financial
and industry conditions. The breach of any of such covenants or restrictions
could result in a default under the Senior Bank Facilities or the Indenture,
which would permit the senior lenders or the holders of the Senior Subordinated
Notes, as the case may be, to declare all amounts borrowed thereunder to be due
and payable, together with accrued and unpaid interest. If the Company were
unable to repay its indebtedness to its senior lenders, such lenders could
proceed against the collateral securing such indebtedness. If the indebtedness
under the Senior Bank Facilities or the Senior Subordinated Notes were to be
accelerated, there can be no assurance that the assets of the Company would be
sufficient to repay in full such indebtedness and the other indebtedness of the
Company.

GENERAL RISKS OF FOOD INDUSTRY

The food products manufacturing industry is subject to the risk of adverse
changes in general economic conditions; adverse changes in local markets
resulting in greater risks inherent in the limited shelf life of food products
in case of oversupply; lack of attractiveness of a particular food product line
after its novelty has worn off; evolving consumer preferences and nutritional
and health-related concerns; federal, state and local food processing controls;
consumer product liability claims; the risk of product tampering; and the
availability and expense of insurance. See "Business."

DEPENDENCE ON RAW MATERIALS

The primary raw materials used in the Company's operations include tin
cans, flour, meat, tuna, salmon, tomatoes, corn, fruit and fruit-juice
concentrates, beans and peanuts. All of the Company's raw materials are
generally available from numerous suppliers, other than white albacore tuna
processed by the Bumble Bee Business, for which there is limited worldwide
supply and number of suppliers. The prices of many of these raw materials are
affected by, among other things, agricultural policies of the United States
government and weather conditions. Movement in the price level of these raw
materials can have a corresponding impact on finished product costs, and hence,
gross margins. The ability of the Company to pass through increases in costs of
raw materials to its customers is dependent upon competitive conditions and
pricing methodologies employed in the various markets in which the Company
operates. See "Business -- Raw Materials."

IMPLEMENTATION OF BUSINESS STRATEGY; STRATEGIC ACQUISITIONS

The Company intends to pursue a business strategy of increasing sales and
earnings in its core business through growing sales of existing brands and
achieving cost savings. No assurance can be given that the Company will be
successful in implementing this strategy. See "Business -- Business Strategy."

The Company also intends to pursue a business strategy of growth through
strategic acquisitions. The Company cannot predict whether it will be successful
in pursuing any acquisition opportunities or what the consequences of any
acquisitions would be. The Company is currently evaluating certain strategic
acquisitions; however, the Company has no binding commitment to acquire any
business or other material assets. No assurance can be given that any strategic
acquisition will be consummated or that, if consummated, it will be successful.
The Company's acquisition strategy involves numerous risks, including
difficulties in the integration of the operations, systems and management of
acquired businesses and the diversion of management's attention from other
business concerns. Under the terms of the Senior Bank Facilities, the Company
may be required to obtain the consent of the lenders in order to consummate
acquisitions in certain circumstances. There can be no assurance as to whether,
or the terms on which, the lenders would grant any such consent. Moreover,
depending on the nature, size and timing of future acquisitions, the Company may
be required to raise additional financing. There can be no assurance that the
Senior Bank Facilities, the Indenture or any other loan agreement to which the
Company may become a party will permit such additional financing, and there can
be no assurance that any additional financing will be available on terms
acceptable to the Company, or at all.

12
<PAGE> 13

COMPETITION

The food products business is highly competitive. Numerous brands and
products compete for shelf space and sales, with competition based primarily on
brand recognition and loyalty, price, quality and convenience. The Company
competes with a significant number of companies of varying sizes, including
divisions or subsidiaries of larger companies. A number of these competitors
have broader product lines as well as substantially greater financial and other
resources available to them and lower fixed costs, and there can be no assurance
that the Company can compete successfully with such other companies. In
addition, many of the Company's competitors may be substantially less leveraged.
Competitive pressures or other factors could cause the Company's products to
lose market share or result in significant price erosion, which could have a
material adverse effect on the Company. See "Business."

CONTROL BY PRINCIPAL STOCKHOLDER; RELATIONSHIP WITH PRINCIPAL STOCKHOLDER AND
MANAGEMENT; ALLOCATION OF CORPORATE OPPORTUNITIES

In connection with the IHF Acquisition, Hicks Muse acquired beneficial
ownership of 80% of the Company's outstanding Common Stock. All of the members
of the Company's Board of Directors were nominated by Hicks Muse. After
completion of the Offering, Hicks Muse and certain of its officers, employees
and affiliates will continue to own or control a majority of the outstanding
shares of Common Stock and, accordingly, will be able to (i) direct the election
of a majority of the members of the Board of Directors of the Company and
therefore direct the management and policies of the Company, (ii) practically
determine the outcome of any corporate or other matter submitted to the
Company's stockholders for approval, including any merger, consolidation, sale
of all or substantially all of the Company's assets or "going private"
transaction and (iii) prevent or cause a change of control of the Company. The
interests of Hicks Muse may conflict with those of other shareholders of the
Company. The Company has recently acquired Productos del Monte from an affiliate
of Hicks Muse. See "Principal and Selling Stockholders" and "Certain
Relationships and Related Transactions." In addition, certain officers and
directors of the Company, including Mr. Metropoulos, also serve as officers or
directors of other portfolio companies of Hicks Muse. Service as a director or
officer of both the Company and another company (other than a subsidiary of the
Company) could create or appear to create potential conflicts of interest when
the director or officer is faced with decisions that could have different
implications for the Company and such other company. A conflict of interest
could also exist with respect to allocation of the time and attention of persons
who are officers of both the Company and one or more other companies. Under
Delaware law, directors and officers have a fiduciary duty to act in good faith
and in what they believe to be in the best interests of the corporation and its
stockholders. Such duties include the duty to refrain from impermissible
self-dealing and to deal fairly with respect to transactions in which such
directors or officers, or other companies with which they are affiliated, have
an interest.

Neither Hicks Muse nor Mr. Metropoulos is restricted from acquiring or
managing other companies in the food business, including companies that may be
competitive with the Company. Hicks Muse has publicly stated that it expects to
commit significant amounts of equity capital to acquire food and other branded
consumer product companies in North America and Latin America that Mr.
Metropoulos will help manage. There is no agreement requiring that any such
acquisition opportunities be pursued through the Company. As a result, conflicts
may exist between the Company on the one hand and Hicks Muse and Mr. Metropoulos
on the other hand with respect to the allocation of corporate opportunities,
including acquisition opportunities. No assurance can be given that any such
conflicts will be resolved in favor of the Company.

GOVERNMENTAL REGULATION

The Company's operations are subject to extensive regulation by the United
States Food and Drug Administration ("FDA"), the United States Department of
Agriculture and other state and local authorities regarding the processing,
packaging, storage, distribution, advertising and labeling of the Company's
products and environmental compliance. The Company's manufacturing facilities
and products are subject to periodic inspection by federal, state and local
authorities. The Company's advertising is subject to regulation by the Federal
Trade Commission ("FTC") pursuant to the Federal Trade Commission Act and
regulations issued thereunder. In addition, the Company is subject to similar
laws in foreign jurisdictions in which it conducts operations. The Company
believes that it is currently in substantial compliance with all material
governmental

13
<PAGE> 14

laws and regulations and maintains all material permits and licenses relating to
its operations. Nevertheless, there can be no assurance that the Company is in
compliance with such laws and regulations or that it will be able to comply with
any future laws and regulations. Failure by the Company to comply with
applicable laws and regulations could subject the Company to civil remedies,
including fines, injunctions, recalls or seizures, as well as potential criminal
sanctions, which could have a material adverse effect on the Company. See
"Business -- Certain Legal and Regulatory Matters."

ENVIRONMENTAL MATTERS

The past and present business operations of the Company and the past and
present ownership and operation of real property by the Company are subject to
extensive and changing federal, state, local and foreign environmental laws and
regulations pertaining to the discharge of materials into the environment and
the handling and disposition of wastes (including solid and hazardous wastes) or
otherwise relating to protection of the environment. Compliance with such laws
and regulations is not expected to have a material impact on the Company's
capital expenditures, earnings or competitive position. No assurance can be
given, however, that additional environmental issues relating to presently known
matters or identified sites or to other matters or sites will not require
additional, currently unanticipated investigation, assessment or expenditures.
See "Business -- Certain Legal and Regulatory Matters -- Environmental."

TRADEMARKS

The Company believes that its trademarks and other proprietary rights are
important to its success and its competitive position. Accordingly, the Company
devotes substantial resources to the establishment and protection of its
trademarks on a worldwide basis. There can be no assurance that the actions
taken by the Company to establish and protect its trademarks and other
proprietary rights will be adequate to prevent imitation of its products by
others or to prevent others from seeking to block sales of the Company's
products as violative of the trademarks and proprietary rights of others.
Moreover, no assurance can be given that others will not assert rights in, or
ownership of, trademarks and other proprietary rights of the Company or that the
Company will be able to successfully resolve such conflicts. In additions, the
laws of certain foreign countries may not protect proprietary rights to the same
extent as do the laws of the United States. See "Business -- Trademarks."

PRODUCT LIABILITY; PRODUCT RECALLS

The Company may be subject to significant liability should the consumption
of any of its products cause injury, illness or death and may be required to
recall certain of its products in the event of contamination or damage to the
products. There can be no assurance that product liability claims will not be
asserted against the Company or that the Company will not be obligated to recall
its products. The Company has not historically incurred material expenditures in
respect of product liability claims and is effectively self-insured against such
liabilities. A product liability judgment against the Company or a product
recall could have a material adverse effect on the Company's business, financial
condition and results of operations.

DILUTION; CERTAIN BENEFITS TO EXISTING STOCKHOLDERS

Persons purchasing shares of Common Stock in the Offering will incur
immediate dilution in the net tangible book value per share of Common Stock of
approximately $16.18 per share. In addition, the exercise of existing stock
options would result in further dilution. Dilution for this purpose represents
the difference between the per share initial public offering price of the Common
Stock and the pro forma as adjusted net tangible book value per share of Common
Stock after giving effect to the Offering and the use of proceeds therefrom. See
"Dilution."

The Company's existing stockholders, including Hicks Muse and the Selling
Stockholder, will receive substantial benefits from the Offering. In connection
with the IHF Acquisition, Hicks Muse and certain other investors acquired
beneficial ownership of 80% of the Company's Common Stock for a per share price
of $5.33. The Selling Stockholder, who is not affiliated with Hicks Muse, will
receive substantial net proceeds from the sale of shares in the Offering. See
"Principal and Selling Stockholders," "Certain Relationships and Related
Transactions" and "Shares Eligible for Future Sale."

14
<PAGE> 15

SHARES ELIGIBLE FOR FUTURE SALE; REGISTRATION RIGHTS

Upon completion of the Offering, the Company will have outstanding
75,576,596 shares of Common Stock. Of these shares, the 13,622,500 shares of
Common Stock sold in the Offering will be freely transferable without
restriction under the Securities Act of 1933 (the "Securities Act"), by persons
other than "affiliates" of the Company within the meaning of Rule 144
promulgated under the Securities Act ("Rule 144"). The remaining 61,954,096
shares of Common Stock were issued in reliance on exemptions from the
registration requirements of the Securities Act, and those shares are
"restricted" securities under Rule 144. For purposes of Rule 144, 58,826,681
shares of Common Stock are currently eligible for sale and there will be
3,127,415 shares of Common Stock eligible for sale beginning in October 1, 1998,
based on current Securities and Exchange Commission ("Commission") rules and
subject to compliance with the manner-of-sale, volume and other limitations of
Rule 144.

The Company is a party to a registration rights agreement (the
"Registration Rights Agreement") with its existing stockholders, which grants
those stockholders, who will hold an aggregate of 61,954,096 shares of Common
Stock immediately after the Offering, the right to require the Company, subject
to certain limitations, to effect up to an aggregate of six "demand"
registrations under the Securities Act for the sale of such stockholders' shares
of Common Stock. All parties to the Registration Rights Agreement have waived
their rights to participate as selling stockholders in the Offering, except the
Selling Stockholder in this Offering. See "Certain Relationships and Related
Transactions" and "Principal and Selling Stockholders."

Each of the Company, its officers and directors, Hicks Muse and its
affiliates, and certain other stockholders of the Company, including the Selling
Stockholder, has agreed that it will not (i) offer, pledge, sell, solicit an
offer to buy, contract to sell, grant any option, right or warrant to purchase,
or otherwise transfer or dispose of, directly or indirectly, or file with the
Commission a registration statement under the Securities Act relating to any
shares of Common Stock, or any securities that are convertible into or
exercisable or exchangeable for Common Stock or (ii) enter into any swap or
other arrangement that transfers all or a portion of the economic consequences
associated with ownership of any Common Stock, for a period of 180 days after
the date of this Prospectus without the prior written consent of Donaldson,
Lufkin & Jenrette Securities Corporation, except pursuant to certain limited
exceptions. See "Shares Eligible for Future Sale" and "Underwriting."

Future sales of substantial amounts of Common Stock, or the perception that
such sales could occur, may affect the market price of the Common Stock
prevailing from time to time.

NO PRIOR PUBLIC MARKET

Prior to the Offering, there has been no public market for the Common Stock
and there can be no assurance that an active public market will develop or be
sustained after the Offering or that the initial public offering price
corresponds to the price at which the Common Stock will trade in the public
market subsequent to the Offering. The initial public offering price for the
Common Stock has been determined by negotiations among the Company, the Selling
Stockholder and the representatives of the Underwriters based upon the
consideration of certain factors set forth herein under "Underwriting." Market
conditions in the food industry and market fluctuations in the stock market
generally may have an adverse impact on the market price of the Common Stock.

15
<PAGE> 16

THE COMPANY

The Company is a leading North American manufacturer and marketer of a
diversified, well-established portfolio of shelf-stable food products with
popular brand names. Prior to November 1, 1996, the Company was an indirect
wholly-owned subsidiary of American Home Products. Effective on November 1,
1996, an affiliate of Hicks Muse acquired 80% of the outstanding capital stock
of the Company from American Home Products for approximately $1,225.6 million in
cash in a transaction treated as a recapitalization for financial accounting
purposes. Also effective on November 1, 1996, the Company acquired all of the
outstanding capital stock of Heritage from an affiliate of Hicks Muse for
approximately $70.8 million in cash in a transaction treated as a purchase for
financial accounting purposes. Heritage manufactures and markets the Company's
Campfire branded products. In connection with these transactions, the Company
incurred approximately $1,070.0 million of indebtedness, consisting of $670.0
million of borrowings under the Senior Bank Facilities and the issuance of
$400.0 million principal amount of the Senior Subordinated Notes. See "Principal
and Selling Stockholders" and "Certain Relationships and Related Transactions."

On July 1, 1997, the Company consummated the acquisition of substantially
all of the assets of Bumble Bee Seafoods for approximately $160.0 million in
cash, plus fees and expenses, and the assumption of certain liabilities,
including trade payables. Bumble Bee is one of the leading brands of premium
canned seafood in the U.S. and the leading brand of canned white meat tuna and
canned salmon in the U.S. The assets acquired consisted primarily of inventory,
accounts receivable, property, plant and equipment and trademarks used by the
Bumble Bee Business for the processing and marketing of the Company's Bumble Bee
canned seafood products. Prior to this transaction, Bumble Bee Seafoods was
highly leveraged and had capital constraints which limited Bumble Bee Seafoods'
ability to source raw materials and most effectively market its products. To
facilitate the purchase of the Bumble Bee Business by the Company free and clear
of existing liens, Bumble Bee Seafoods filed for bankruptcy. In connection with
the transaction, the Company increased its borrowings under the Senior Bank
Facilities by $110.0 million. The remainder of the purchase price was provided
from the Company's available cash on hand. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Bumble Bee
Seafoods" and "Business -- Products and Markets -- Bumble Bee."

On October 1, 1997, the Company acquired Creative Products for
approximately $52.0 million in cash. The acquisition was funded through
borrowings under the Company's Senior Bank Facilities. Creative Products is the
leading manufacturer of cooking spray sold to private label customers and food
service operators. In addition, Creative Products manufactures on a contract
basis a number of health and beauty aid products, including hair mousses, hair
sprays and deodorants. In 1996, Creative Products had net sales of $46.0
million. The acquisition of Creative Products was treated as a purchase for
financial accounting purposes.

In September 1997, the Company signed a letter of intent to acquire a
specialty canned seafood manufacturer and marketer for approximately $26.5
million.

The Company was incorporated on October 28, 1986. The Company's principal
executive offices are located at 1633 Littleton Road, Parsippany, New Jersey
07054, and its main telephone number at that address is (973) 359-9920.

16
<PAGE> 17

USE OF PROCEEDS

The net proceeds to be received by the Company from the Offering (after
deducting the underwriting discounts and commissions and estimated offering
expenses) are approximately $194.9 million. The Company will not receive any of
the net proceeds from the shares of Common Stock to be sold by the Selling
Stockholder.

The net proceeds from the Offering will be used by the Company to repay
indebtedness under the Senior Bank Facilities. The Senior Bank Facilities, which
were originally entered into in connection with the IHF Acquisition, currently
bear interest at floating rates plus a margin (Adjusted LIBOR plus 2% in the
case of the revolving credit facility and the Tranche A term loans, and Adjusted
LIBOR plus 2.25% in the case of the Tranche B term loans), and finally mature on
September 30, 2004. The Company expects to amend the Senior Bank Facilities in
connection with the Offering. Affiliates of certain of the Underwriters are
lenders and agents under the Senior Bank Facilities. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources" and "Description of
Indebtedness -- Senior Bank Facilities."

DIVIDEND POLICY

The right of the Company to participate in any distribution of earnings or
assets is subject to the prior claims of the creditors of the Company. The
Senior Bank Facilities and the Indenture contain certain restrictive covenants,
including covenants that restrict or prohibit the Company's ability to pay
dividends and make other distributions. The Company intends to retain future
earnings for use in the Company's business and does not anticipate declaring or
paying any cash or stock dividends on shares of its Common Stock in the
foreseeable future. Further, any determination to declare and pay dividends will
be made by the Board of Directors of the Company in light of the Company's
earnings, financial position, capital requirements and credit agreements and
such other factors as the Board of Directors deems relevant. See "Risk
Factors -- Restrictive Debt Covenants" and "Description of Indebtedness."

DILUTION

As of September 30, 1997, the Company had a deficit in net tangible book
value of $479.0 million or approximately $7.74 per share of Common Stock. Net
tangible book value per share is determined by dividing the tangible net worth
of the Company (tangible assets less total liabilities) by the total number of
shares of Common Stock outstanding. After giving effect to the sale by the
Company of the shares of Common Stock offered hereby and the deduction of the
underwriting discounts and commissions and estimated offering expenses payable
by the Company in connection therewith, but without taking into account any
other changes in such net tangible book value after September 30, 1997, the
deficit in net tangible book value of the Company on a pro forma as adjusted
basis as of September 30, 1997, would have been approximately $276.7 million or
$3.82 per share. This represents an immediate dilution of $16.18 per share to
new investors purchasing shares at the assumed initial public offering price.
The following table illustrates the per share dilution in net tangible book
value to new investors. The table assumes no exercises of any options to
purchase Common Stock outstanding at September 30, 1997.

<TABLE>
<S> <C> <C>
Initial public offering price per share..................... $20.00
Net tangible book value (deficit) per share as of
September 30, 1997..................................... $(7.74)
Increase per share attributable to the Offering........... 3.92
------
Net tangible book value (deficit) per share as
adjusted for this Offering............................. (3.82)
------
Net tangible book value dilution per share to new
investors................................................. $16.18
======
</TABLE>

17
<PAGE> 18

The following table summarizes as of the date hereof, after giving effect
to the sale of the shares of Common Stock offered hereby, the number of shares
of Common Stock purchased from the Company, the total consideration paid
therefore and the average price per share paid by the existing stockholders and
by the new investors purchasing shares of Common Stock in this Offering before
deduction of the underwriting discounts and commissions and estimated offering
expenses payable by the Company:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
(IN MILLIONS) (IN MILLIONS) AVERAGE
---------------- -------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
<S> <C> <C> <C> <C> <C>
Existing stockholders(1)............. 65.0 86.1% $370.0(2) 63.7% $ 5.69
New investors(1)..................... 10.5 13.9% 210.5 36.3% 20.00
---- ----- ------ -----
Total........................... 75.5 100.0% $580.5 100.0%
==== ===== ====== =====
</TABLE>

- ---------------

(1) Sales by the Selling Stockholder in this Offering will reduce the number of
shares held by existing stockholders of the Company to 61,954,096 shares, or
82.0% of the total numbers of shares outstanding after this Offering, and
will increase the number of shares held by new investors to 13,622,500
shares, or 18.0% of the total number of shares of Common Stock outstanding
after this Offering. See "Principal and Selling Stockholders."

(2) Amount assumes that American Home Products acquired its shares of Common
Stock for $5.33 per share, the value of the Common Stock determined in
connection with the IHF Acquisition.

The computations in the table set forth above assume no exercise of
outstanding stock options. On the date of this Prospectus, there were
outstanding options to purchase 7,645,253 shares of Common Stock at a weighted
average exercise price of $6.91 per share.

18
<PAGE> 19

CAPITALIZATION

The following table sets forth the historical capitalization of the Company
as of September 30, 1997, and the unaudited capitalization of the Company, as
adjusted to give effect to the Offering and the application of the net proceeds
therefrom. This table should be read in conjunction with the historical
consolidated financial statements of the Company and the unaudited pro forma
financial statements and related notes thereto included elsewhere in this
Prospectus.

<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1997
-------------------------
ACTUAL AS ADJUSTED
(IN MILLIONS)
<S> <C> <C>
Long-term debt (including current maturities):
Revolving credit facility(1)(2)........................... $ 71.0 $ 26.6
Term loans(2)............................................. 720.5 570.0
10 3/8% Senior Subordinated Notes due 2006................ 400.0 400.0
-------- --------
Total long-term debt.............................. 1,191.5 996.6
-------- --------
Stockholders' equity (deficiency)(3):
Preferred stock (no shares issued and outstanding)........ -- --
Voting common stock....................................... 0.6 0.6
Non-voting common stock................................... -- --
Additional paid-in capital(4)(5).......................... (216.5) (21.6)
Retained earnings (accumulated deficit)................... 4.5 (6.6)
Foreign currency translation adjustment................... (2.0) (2.0)
-------- --------
Total stockholders' equity (deficiency)........... (213.4) (29.6)
-------- --------
Total capitalization.............................. $ 978.1 $ 967.0
======== ========
</TABLE>

- ---------------

(1) The revolving credit facility provides for borrowings of up to $140.0
million. In connection with the Offering, the Company expects to amend the
revolving credit facility to provide for borrowings of up to $200.0 million.
See "Description of Indebtedness."

(2) As Adjusted gives effect to the net repayment of (i) $44.4 million of
outstanding borrowings under the revolving credit facility and (ii) $150.5
million of term loan borrowings.

(3) As Adjusted gives effect to the $210.5 million of gross proceeds from the
Offering, less (i) the related fees and expenses of $15.6 million and (ii) a
$11.1 million extraordinary charge, net of tax benefit, relating to deferred
financing costs of $18.5 million to be written off in connection with the
expected amendment of the Senior Bank Facilities. See "Description of
Indebtedness -- Senior Bank Facilities."

(4) As a result of the IHF Acquisition, the Company has a stockholders'
deficiency for accounting purposes.

(5) Includes compensation associated with options granted to senior management
and other employees.

19
<PAGE> 20

SELECTED HISTORICAL FINANCIAL AND OPERATING INFORMATION

The following table sets forth selected historical financial and operating
information of the Company for the periods ended and as of the dates indicated.
The selected historical statement of operations data for the years ended
December 31, 1994, 1995 and 1996 and the historical balance sheet data as of
December 31, 1995 and 1996 are derived from the audited financial statements of
the Company included elsewhere in this Prospectus. The selected historical
statement of operations data for the nine months ended September 30, 1996 and
1997 and the selected historical balance sheet data as of September 30, 1997 are
derived from the unaudited financial statements of the Company included
elsewhere in this Prospectus and which, in the opinion of management, include
all adjustments necessary for a fair presentation. The selected historical
statement of operations data for the year ended December 31, 1993 and the
selected historical balance sheet data as of December 31, 1993 and 1994 are
derived from the audited financial statements of the Company not included in
this Prospectus. The selected historical statement of operations data for the
year ended December 31, 1992 and the selected historical balance sheet data as
of September 30, 1996 and December 31, 1992 are derived from the unaudited
financial statements of the Company which are not included in this Prospectus
and which, in the opinion of management, include all adjustments necessary for a
fair presentation. This table should be read in conjunction with the Company's
historical consolidated financial statements and related notes thereto included
elsewhere in this Prospectus and with "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
----------------------------------------------- --------------------
1992 1993 1994 1995 1996 1996 1997
(IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales.............................................. $865.8 $935.7 $997.3 $818.9 $ 942.8 $704.1 $ 843.9
Cost of goods sold..................................... 402.6 432.0 463.1 398.2 444.9 333.9 412.9
------ ------ ------ ------ ----------- ------ -----------
Gross profit........................................... 463.2 503.7 534.2 420.7 497.9 370.2 431.0
Marketing expenses:
Advertising.......................................... 36.8 33.2 32.8 42.4 58.6 43.0 45.9
Consumer promotion................................... 26.2 21.5 25.5 23.5 17.5 13.3 15.0
Trade promotion...................................... 101.0 118.7 127.6 102.0 101.0 74.6 106.6
Other................................................ 15.2 16.5 14.9 18.5 14.4 9.3 10.9
------ ------ ------ ------ ----------- ------ -----------
Total marketing expenses......................... 179.2 189.9 200.8 186.4 191.5 140.2 178.4
Other operating expenses:
Selling.............................................. 43.3 47.2 52.3 45.9 46.3 33.6 34.0
Storage, packing and shipping ....................... 51.0 57.6 63.4 55.3 55.2 41.2 44.0
Administrative....................................... 17.0 20.5 23.2 23.6 19.7 14.2 20.1
General and other.................................... 16.4 35.2 35.3 40.9 32.0 21.3 21.8
Stock option compensation(1)......................... -- -- -- -- -- -- 44.8
------ ------ ------ ------ ----------- ------ -----------
Total other operating expenses................... 127.7 160.5 174.2 165.7 153.2 110.3 164.7
------ ------ ------ ------ ----------- ------ -----------
Operating profit....................................... 156.3 153.3 159.2 68.6 153.2 119.7 87.9
Interest expense....................................... -- -- -- -- 17.1 -- 79.2
Interest income and other, net......................... -- -- -- -- 0.2 -- 1.6
Provision for income taxes............................. 56.7 60.9 63.3 29.4 53.3 45.5 4.2
------ ------ ------ ------ ----------- ------ -----------
Net income............................................. $ 99.6 $ 92.4 $ 95.9 $ 39.2 $ 83.0 $ 74.2 $ 6.1
====== ====== ====== ====== =========== ====== ===========
Income per common share(2)............................. $ 1.34 $ 0.10
Weighted average number of shares outstanding(2)....... 61,922,990 63,347,912
(Unaudited) Pro forma income per common share(2)....... $ 1.07 $ 0.08
Pro forma weighted average number of shares
outstanding(2)....................................... 77,328,135 77,328,135
BALANCE SHEET DATA (END OF PERIOD):
Inventories............................................ $108.7 $134.2 $148.0 $139.9 $ 129.2 $130.5 $ 200.3
Working capital (excluding current portion of long-term
debt)................................................ 128.4 157.9 197.1 120.6 107.6 109.8 181.1
Property, plant and equipment, net..................... 140.5 152.0 169.7 176.8 186.0 173.5 200.9
Total assets........................................... 387.3 496.0 540.5 463.6 968.3 457.2 1,181.8
Long-term debt (including current portion)............. -- -- -- -- 1,070.0 -- 1,191.5
Stockholders' equity (deficit)......................... 330.1 423.6 467.1 385.0 (264.2) 368.6 (213.4)
OTHER FINANCIAL DATA:
Depreciation and amortization.......................... $ 11.8 $ 25.0 $ 26.4 $ 30.2 $ 19.0 $ 13.7 $ 21.9
Capital expenditures................................... 18.6 22.0 31.1 24.2 11.9 8.5 8.6
</TABLE>

- ---------------
(1) Represents a non-cash compensation expense associated with stock options
granted to the Company's senior management and other employees. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Nine Months Ended September 30, 1997 Compared to Nine Months
Ended September 30, 1996."
(2) Due to the change in the Company's capital structure as a result of the IHF
Acquisition, historical share and per share data for periods prior to the
IHF Acquisition are not comparable to or meaningful in the context of future
periods. Pro forma income per common share is based on the weighted average
number of shares of common stock and common stock equivalents outstanding
during the period adjusted for the 5.3292 for one reverse stock split. The
weighted average number of shares outstanding include the shares of common
stock outstanding prior to the Offering (dilutive options are considered to
be outstanding from the beginning of the periods presented) and the shares
to be issued in the Offering. Including shares of Common Stock issued in
connection with the acquisition of Productos Del Monte on October 1, 1997
and shares to be issued upon exercise of stock options granted after
September 30, 1997, the pro forma weighted average number of common shares
outstanding would be 80.6 million.

20
<PAGE> 21

UNAUDITED PRO FORMA FINANCIAL STATEMENTS

The following unaudited pro forma financial statements ("Unaudited Pro
Forma Financial Statements") of the Company are based on the audited and
unaudited historical consolidated financial statements of both the Company and
Bumble Bee Seafoods, which are included elsewhere in this Prospectus.

The Unaudited Pro Forma Balance Sheet has been prepared to give effect to
the Offering as though it occurred as of September 30, 1997. The Unaudited Pro
Forma Statements of Operations give effect to (i) the Bumble Bee Acquisition,
(ii) the Offering and (iii) for the period ended December 31, 1996, the IHF
Acquisition, as if the transactions occurred on January 1, 1996. The Unaudited
Pro Forma Financial Statements do not give effect to the pre-acquisition
operations of Heritage or the operations of Productos Del Monte and Creative
Products.

The Bumble Bee Acquisition was accounted for using the purchase method of
accounting. The total purchase price of the Bumble Bee Business was allocated to
the tangible and intangible assets acquired and liabilities assumed based upon
their respective fair values.

The unaudited pro forma adjustments are based upon available information
and certain assumptions that the Company believes are reasonable. The Unaudited
Pro Forma Financial Statements and accompanying notes should be read in
conjunction with the historical consolidated financial statements of the Company
and Bumble Bee Seafoods, and other financial information pertaining to the
Company including "The Company," "Capitalization" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" included
elsewhere herein. The Unaudited Pro Forma Financial Statements are not
indicative of either future results of operations or the results that might have
occurred if the foregoing transactions had been consummated on the indicated
dates.

21
<PAGE> 22

INTERNATIONAL HOME FOODS, INC.

UNAUDITED PRO FORMA BALANCE SHEET
AS OF SEPTEMBER 30, 1997
(IN MILLIONS)

ASSETS

<TABLE>
<CAPTION>
ADJUSTMENTS
FOR THE PRO FORMA
HISTORICAL OFFERING AS ADJUSTED
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents................................. $ 63.7 $ -- $ 63.7
Accounts receivable, net.................................. 78.9 -- 78.9
Inventories............................................... 200.3 -- 200.3
Prepaid expenses and other current assets................. 22.3 -- 22.3
-------- ------- --------
Total current assets.............................. 365.2 -- 365.2
Property, plant and equipment, net.......................... 200.9 -- 200.9
Intangible assets, net...................................... 234.4 -- 234.4
Deferred income taxes....................................... 347.7 7.4(b) 355.1
Other assets................................................ 33.6 (18.5)(b) 15.1
-------- ------- --------
Total assets...................................... $1,181.8 $ (11.1) $1,170.7
======== ======= ========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

Current Liabilities:
Accounts payable.......................................... $ 38.7 $ -- $ 38.7
Accrued liabilities....................................... 145.4 -- 145.4
Current portion of long-term debt......................... 110.0 (44.4)(a) 65.6
-------- ------- --------
Total current liabilities......................... 294.1 (44.4) 249.7
Long-term debt.............................................. 1,081.5 (150.5)(a) 931.0
Other liabilities........................................... 19.6 -- 19.6
Stockholders' equity (deficiency)........................... (213.4) 183.8(b) (29.6)
-------- ------- --------
Total liabilities and stockholders' equity
(deficiency).................................... $1,181.8 $ (11.1) $1,170.7
======== ======= ========
</TABLE>

See Accompanying Notes to Unaudited Pro Forma Balance Sheet.

22
<PAGE> 23

INTERNATIONAL HOME FOODS, INC.

NOTES TO THE UNAUDITED PRO FORMA BALANCE SHEET
(IN MILLIONS)

(a) Adjustments reflect the assumed proceeds from the Offering and application
of proceeds therefrom as follows:

<TABLE>
<S> <C>
Gross proceeds from the Offering............................ $210.5
Uses:
Net repayment of term loan borrowings..................... 150.5
Repayment of revolving credit facility.................... 44.4
Fees and expenses......................................... 15.6
------
$210.5
======
</TABLE>

In connection with the Offering, the Company will amend its Senior Bank
Facilities. The net proceeds from the Offering and additional borrowings
under the Tranche A term loan of $68.5 will be used to repay $219.0 of
borrowings under the Tranche B term loan and $44.4 of borrowings under the
revolving credit facility.

(b) Adjustments reflect the effect of the Offering on stockholders' equity
(deficiency) as follows:

<TABLE>
<S> <C>
Gross proceeds from the Offering............................ $210.5
Less:
Fees and expenses......................................... 15.6
Extraordinary charge, net of tax benefit.................. 11.1
------
Net increase in stockholders' equity........................ $183.8
======
</TABLE>

The extraordinary charge consists of the write-off of deferred financing
fees of $18.5 to be recognized in connection with the expected amendment of
the Senior Bank Facilities, less related income tax benefit of $7.4. The
extraordinary charge will be recorded in the period during which the
amendment occurs.

23
<PAGE> 24

INTERNATIONAL HOME FOODS, INC.

UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
ADJUSTMENTS
FOR THE
HISTORICAL ADJUSTMENTS IHF
----------------------- FOR THE ACQUISITION
BUMBLE BEE BUMBLE BEE AND THE PRO FORMA
IHF SEAFOODS ACQUISITION PRO FORMA OFFERING AS ADJUSTED(G)(H)(I)
<S> <C> <C> <C> <C> <C> <C>

Net sales............... $ 942.8 $395.6 $ -- $1,338.4 $ -- $ 1,338.4
Cost of goods sold...... 444.9 275.7 2.5(a) 723.1 -- 723.1
---------- ------ ------ -------- ------ -----------
Gross profit.......... 497.9 119.9 (2.5) 615.3 -- 615.3
Marketing expenses...... 191.5 89.5 -- 281.0 -- 281.0
Selling, general and
administrative
expenses.............. 148.9 25.8 (2.4)(b) 172.3 -- 172.3
Provision for
restructuring and
goodwill write-off.... 4.3 63.0 (63.0)(b) 4.3 -- 4.3
---------- ------ ------ -------- ------ -----------
Operating profit...... 153.2 (58.4) 62.9 157.7 -- 157.7
Interest expense........ 17.1 19.3 (10.9)(c) 25.5 60.4(e) 85.9
Other income (expense),
net................... 0.2 0.1 -- 0.3 -- 0.3
---------- ------ ------ -------- ------ -----------
Income (loss) before
provision for
income taxes....... 136.3 (77.6) 73.8 132.5 (60.4) 72.1
Provision for (benefit
from) income taxes.... 53.3 0.4 4.3(d) 58.0 (24.2)(d) 33.8
---------- ------ ------ -------- ------ -----------
Net income (loss)..... $ 83.0 $(78.0) $ 69.5 $ 74.5 $(36.2) $ 38.3
========== ====== ====== ======== ====== ===========
Income per common
share................. $ 1.34
Weighted average number
of common shares...... 61,922,990
==========
Pro forma income per
common share(f)....... $ 1.07 $ 0.50
Pro forma weighted
average number of
common shares(f)...... 77,328,135 77,328,135
========== ===========
</TABLE>

See Accompanying Notes to Unaudited Pro Forma Statements of Operations.

24
<PAGE> 25

INTERNATIONAL HOME FOODS, INC.

UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
ADJUSTMENTS
PRO FORMA FOR THE
HISTORICAL ADJUSTMENTS IHF
------------------------ FOR THE ACQUISITION
BUMBLE BEE BUMBLE BEE AND THE PRO FORMA
IHF SEAFOODS(J) ACQUISITION PRO FORMA OFFERING AS ADJUSTED(G)(H)(I)
<S> <C> <C> <C> <C> <C> <C>

Net sales............ $ 843.9 $179.0 $ -- $1,022.9 $ -- $ 1,022.9
Cost of goods sold... 412.9 127.5 (2.3)(a) 538.1 -- 538.1
---------- ------ ----- -------- ----- -----------
Gross profit....... 431.0 51.5 2.3 484.8 -- 484.8
Marketing expenses... 178.4 41.9 -- 220.3 -- 220.3
Selling, general and
administrative
expenses........... 119.9 11.2 (1.1)(b) 130.0 -- 130.0
Stock option
compensation
expense............ 44.8 -- -- 44.8 -- 44.8
---------- ------ ----- -------- ----- -----------
Operating profit... 87.9 (1.6) 3.4 89.7 -- 89.7
Interest expense..... 79.2 10.0 (3.8)(c) 85.4 (10.4) (e) 75.0
Other income
(expense), net..... 1.6 (1.6) -- -- -- --
---------- ------ ----- -------- ----- -----------
Income (loss)
before provision
for income
taxes........... 10.3 (13.2) 7.2 4.3 10.4 14.7
Provision for income
taxes.............. 4.2 0.2 2.9(d) 7.3 4.2(d) 11.5
---------- ------ ----- -------- ----- -----------
Net income
(loss).......... $ 6.1 $(13.4) $ 4.3 $ (3.0) $ 6.2 $ 3.2
========== ====== ===== ======== ===== ===========
Income per common
share.............. $ 0.10
Weighted average
number of common
shares............. 63,301,986
==========
Pro forma income per
common share(f).... $ 0.08 $ 0.04
Pro forma weighted
average number of
common shares(f)... 77,328,135 77,328,135
========== ===========
</TABLE>

See Accompanying Notes to Unaudited Pro Forma Statements of Operations.

25
<PAGE> 26

INTERNATIONAL HOME FOODS, INC.

NOTES TO THE UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS
(IN MILLIONS)

(a) The adjustment reflects the effect of adjusting inventory to estimated fair
value and an increase in depreciation resulting from the adjustment of
property, plant, and equipment to estimated fair value in connection with
the Bumble Bee Acquisition. Property, plant and equipment is depreciated
over approximately 10 years.

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
1996 1997
<S> <C> <C>
Fair value adjustment to inventory................. $2.4 $(2.4)
Increase in depreciation expense................... 0.1 0.1
---- -----
$2.5 $(2.3)
==== =====
</TABLE>

(b) The adjustments reflect (i) the amortization of goodwill associated with the
Bumble Bee Acquisition reduced by the elimination of the amortization of
Bumble Bee Seafoods' historical goodwill and organizational costs and (ii)
the elimination of the write-down of Bumble Bee Seafoods' goodwill. Goodwill
is amortized over 40 years.

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
1996 1997
<S> <C> <C>
Goodwill amortization.............................. $ 1.4 $ 0.7
Elimination of the Bumble Bee Seafoods' historical
goodwill and organizational cost amortization.... (3.8) (1.8)
------ -----
$ (2.4) $(1.1)
====== =====
Elimination of the write-down of Bumble Bee
Seafoods' historical goodwill.................... $(63.0) $ --
====== =====
</TABLE>

(c) The adjustment reflects interest associated with the additional borrowings
under the Senior Bank Facilities for the Bumble Bee Acquisition,
amortization of deferred financing fees and the elimination of interest
related to the pre-acquisition indebtedness of Bumble Bee Seafoods.

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
1996 1997
<S> <C> <C>
Senior Bank Facilities:
Revolving credit facility, $30.0 at 7.16%........ $ 2.2 $ 1.6
Term loan-Tranche A, $80.0 at 7.16%.............. 5.7 4.3
------ ------
Interest expense before amortization of deferred
financing fees................................... 7.9 5.9
Amortization of deferred financing fees(1)......... 0.5 0.3
------ ------
Pro forma interest expense for additional
borrowings.................................... 8.4 6.2
Elimination of Bumble Bee Seafoods' historical
interest expense................................. (19.3) (10.0)
------ ------
Net adjustment................................... $(10.9) $ (3.8)
====== ======
</TABLE>

- ---------------

(1) Adjustment reflects the amortization of incremental deferred financing
fees associated with the Senior Bank Facilities. Deferred financing
fees are amortized by the effective interest method over the term of
the related debt.

26
<PAGE> 27

INTERNATIONAL HOME FOODS, INC.

NOTES TO THE UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS -- (CONTINUED)
(IN MILLIONS)

(2) With respect to the $110.0 of debt incurred in connection with Bumble
Bee Acquisition, the effect of a 1/4% increase or decrease in interest
rates would increase or decrease total interest expense by
approximately $0.28 and $0.21 for the year ended December 31, 1996 and
the nine months ended September 30, 1997, respectively, and would
increase or decrease net income by approximately $0.17 and $0.13 in the
same periods.

(d) The tax effect of the pro forma adjustments is based on the estimated
applicable combined effective tax rate of 40.0% for the periods presented.
The pro forma adjustment related to the elimination of the write-down of
Bumble Bee Seafoods' historical goodwill of $63.0 is not tax effected.

(e) The adjustment reflects the increase in interest expense associated with a
full year of borrowings under the Senior Subordinated Notes, the Senior Bank
Facilities and the amortization of related deferred financing fees incurred
in connection with the IHF Acquisition, net of (i) the historical interest
expense of IHF, (ii) the interest expense related to the net repayment of
$150.5 of term loan borrowings and the repayment of $44.4 of borrowings
under the revolving credit facility and (iii) the related deferred financing
fees incurred in connection with the expected amendment of the Senior Bank
Facilities.

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
1996 1997
<S> <C> <C>
Interest Expense:
Senior Subordinated Notes, $400.0 at 10.375%..... $ 41.5 $ --
Senior Bank Facilities, $670.0 at 7.22%.......... 48.4 --
------ ------
Interest expense................................. 89.9 --
Amortization of deferred financing fees.......... 3.4 (0.2)
------ ------
Pro forma interest expense....................... 93.3 (0.2)
Elimination of interest expense associated with:
IHF historical interest expense............... (17.1) --
Net repayment of $150.5 of term loan
borrowings.................................. (10.9) (8.1)
Repayment of $44.4 of borrowings under the
revolving credit facility................... (3.2) (2.4)
Amortization of deferred financing fees
written off due to amendment to Senior Bank
Facilities.................................. (2.5) (0.2)
Increase in commitment fee for unused portion
of revolving credit facility................ 0.6 0.4
Amortization of new deferred financing fees... 0.2 0.1
------ ------
Net adjustment........................... $ 60.4 $(10.4)
====== ======
</TABLE>

(f) Pro forma income per share is based on the weighted average number of shares
of common stock and common stock equivalents outstanding during the period
adjusted for the 5.3292 for one reverse stock split. The pro forma as
adjusted weighted average shares include the shares of common stock
outstanding prior to the Offering (dilutive options are considered to be
outstanding from the beginning of the periods presented) and the shares to
be issued in the Offering. Including shares of Common Stock issued in
connection with the acquisition of Productos Del Monte on October 1, 1997
and shares to be issued upon exercise of stock options granted after
September 30, 1997, the pro forma weighted average number of common shares
outstanding would be 80.6 million.

(g) The pro forma statements of operations for the periods ended December 31,
1996 and September 30, 1997 exclude the results of Productos Del Monte and
Creative Products and, for the ten months ended October 31, 1996, Heritage
which was acquired by IHF on November 1, 1996. Productos Del Monte and
Creative Products had net sales of $49.7 and $46.0, respectively, for the
year ended December 31, 1996

27
<PAGE> 28

INTERNATIONAL HOME FOODS, INC.

NOTES TO THE UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS -- (CONTINUED)
(IN MILLIONS)

and $38.5 and $39.3 for the period ended September 30, 1997, respectively.
For the ten month period ended October 31, 1996, Heritage had net sales of
$47.3.

(h) Operating expenses for historical periods include certain nonrecurring
charges recognized by the Company in connection with the IHF Acquisition and
subsequent management initiatives aggregating $6.0 for the year ended
December 31, 1996, consisting of severance expense ($3.2), costs associated
with change of corporate name and relabeling of the Company's products
($1.2), expenses of hiring and relocating of certain senior executives
($1.2) and other costs ($0.4). Nonrecurring charges recognized in the nine
months ended September 30, 1997 amounted to $1.7, consisting of additional
severance ($0.7), relocation expense ($0.7), and relabeling costs ($0.3).
Operating expenses for the nine months ended September 30, 1997 also include
a non-cash stock option compensation charge of $44.8.

(i) Operating expenses on a pro forma as adjusted basis for the year ended
December 31, 1996 include the nonrecurring charges referred to in Note (1)
above, plus the following nonrecurring charges in connection with the
integration of the Bumble Bee Business: $4.9, consisting of purchase
accounting adjustments ($2.5), write-off of deferred financing fees ($1.1)
and management fees paid to the former owners of the business ($1.3). For
the nine months ended September 30, 1997, such nonrecurring charges amounted
to $0.9, consisting of management fees paid to the former owners of the
business ($0.6) and severance ($0.3).

(j) The financial results represent the operating activity of Bumble Bee
Seafoods prior to the date of the Bumble Bee Acquisition for the six months
ended June 30, 1997.

28
<PAGE> 29

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

The following discussion and analysis of financial condition and results of
operations of the Company should be read in conjunction with the consolidated
financial statements and related notes thereto of the Company included elsewhere
in this Prospectus. Periodically, the Company may make statements about the
trends, future plans and the Company's prospects. Actual results may differ from
those described in such forward looking statements based on the risks and
uncertainties facing the Company, including but not limited to changes in the
economic conditions and changes in the food products manufacturing industry and
the other factors described in "Risk Factors."

The Company sells its products primarily to grocery wholesalers and
distributors, grocery stores and supermarkets, convenience stores, drug and mass
merchants and warehouse clubs. Sales are reported net of discounts and returns.
In general, raw material costs constitute between 60.0% and 80.0% of cost of
goods sold for each of the Company's products. The other components of cost of
goods sold are labor and overhead costs. As is customary in the industry, the
Company incurs substantial marketing expenses. Marketing expenses primarily
include (i) trade promotions, which are directed at obtaining retail display
support, achieving key price points and securing retail shelf space, (ii)
advertising, which is comprised of television, newspaper and magazine
advertising, and (iii) consumer promotions, which include targeted coupons and
on-package offers. Selling expenses represent commissions paid to food brokers
and costs of the Company's field sales force.

For financial reporting purposes, the IHF Acquisition was treated as a
leveraged recapitalization, such that the Company's assets and liabilities
remain at their historical bases. The Unaudited Pro Forma Financial Statements
do not include the effect of the recent acquisitions of Productos Del Monte or
Creative Products, each of which has lower gross margins and operating income as
a percentage of net sales than those of the Company historically. However,
management believes it should be able to increase the operating profit margins
of these companies through cost reductions. See "Business -- Business Strategy."

RESULTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, NINE MONTHS ENDED SEPTEMBER 30,
--------------------------------------------------------------- -----------------------------------------
1994 1995 1996 1996 1997
------------------- ------------------- ------------------- ------------------- -------------------
% OF % OF % OF % OF % OF
AMOUNT NET SALES AMOUNT NET SALES AMOUNT NET SALES AMOUNT NET SALES AMOUNT NET SALES
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales............ $997.3 100.0% $818.9 100.0% $942.8 100.0% $704.1 100.0% $843.9 100.0%
Cost of goods sold... 463.1 46.4% 398.2 48.6% 444.9 47.2% 333.9 47.4% 412.9 48.9%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Gross profit......... 534.2 53.6% 420.7 51.4% 497.9 52.8% 370.2 52.6% 431.0 51.1%
Marketing expenses:
Advertising........ 32.8 3.3% 42.4 5.2% 58.6 6.2% 43.0 6.1% 45.9 5.4%
Consumer
promotion........ 25.5 2.5% 23.5 2.9% 17.5 1.8% 13.3 1.9% 15.0 1.8%
Trade promotion.... 127.6 12.8% 102.0 12.5% 101.0 10.7% 74.6 10.6% 106.6 12.6%
Other.............. 14.9 1.5% 18.5 2.2% 14.4 1.5% 9.3 1.3% 10.9 1.3%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total marketing
expenses........... 200.8 20.1% 186.4 22.8% 191.5 20.2% 140.2 19.9% 178.4 21.1%
Other operating
expenses:
Selling............ 52.3 5.3% 45.9 5.6% 46.3 4.9% 33.6 4.8% 34.0 4.0%
Storage, packing
and shipping..... 63.4 6.4% 55.3 6.7% 55.2 5.9% 41.2 5.9% 44.0 5.2%
Administrative..... 23.2 2.3% 23.6 2.9% 19.7 2.1% 14.2 2.0% 20.1 2.4%
General and
other............ 35.3 3.5% 40.9 5.0% 32.0 3.4% 21.3 3.0% 21.8 2.6%
Stock option
compensation..... -- -- -- -- 44.8 5.3%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total other operating
expenses........... 174.2 17.5% 165.7 20.2% 153.2 16.3% 110.3 15.7% 164.7 19.5%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Income from
operations......... 159.2 16.0% 68.6 8.4% 153.2 16.3% 119.7 17.0% 87.9 10.4%
Interest expense..... -- -- 17.1 1.8% -- 79.2 9.4%
Interest income and
other, net......... -- -- 0.2 -- 1.6 0.2%
Provision for income
taxes.............. 63.3 6.4% 29.4 3.6% 53.3 5.7% 45.5 6.5% 4.2 0.5%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net income........... $ 95.9 9.6% $ 39.2 4.8% $ 83.0 8.8% $ 74.2 10.5% $ 6.1 0.7%
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>

29
<PAGE> 30

DISCUSSION OF CERTAIN HISTORICAL PERFORMANCE

From 1987 to 1994, the Company's net sales and operating profit increased
at compounded annual rates of 6.4% and 4.4%, respectively. In 1995, however, the
Company experienced a substantial decline in net sales and operating profit. The
Company's net sales and operating profit decreased from $997.3 million and
$159.2 million, respectively, in 1994 to $818.9 million and $68.6 million,
respectively, in 1995. The specific causes of these declines, however, have been
subsequently addressed by the Company, as evidenced by the fact that during 1996
net sales increased to $942.8 million and operating profit increased to $153.2
million.

The decline in net sales and profitability in 1995 stemmed largely from a
prior "push" marketing strategy that relied heavily on trade promotions and
sales discounting. In the fourth quarter of 1994, the Company offered
significant trade incentives to its customers, a practice similarly pursued in
the fourth quarter of 1993. These trade incentives resulted in forward buying by
customers in advance of consumer purchases, thereby significantly increasing
customer inventories of the Company's products by the end of 1994. The reliance
on trade incentives as well as consumer promotions reduced marketing funds
available to support advertising, which builds brand equity and consumer
loyalty, for the Company's core brands. Advertising funds available for the
Company's core products were further diminished by the introduction in 1994 of
Chef Boyardee Sesame Street canned pasta. The Company directed $3.3 million, or
10.0% of its total advertising expense in 1994, to the launch and support of
this product.

During the first quarter of 1995, the Company's net sales were
significantly reduced as retailers sold the excess inventory of the Company's
products that they held at the end of 1994. This reduction was compounded by the
effects of an industry-wide reduction in inventory levels by the supermarket
trade. In addition, the Chef Boyardee Sesame Street product line proved
unsuccessful and was discontinued in 1995. To reduce costs and maintain
profitability in the face of declining sales, the Company significantly reduced
advertising spending during the first half of 1995. This action, coupled with
lower advertising spending for the Company's core brands in 1994, resulted in
market share losses and depressed sales.

In response to the sharp declines in net sales and profitability in the
first half of 1995, the Company undertook a number of initiatives, including
substantially increasing advertising spending beginning in the fourth quarter of
1995 to strengthen consumer brand support. Advertising expense in the fourth
quarter of 1995 was approximately $14.0 million, which represented approximately
one-third of total advertising expense in 1995. The significant increase in
advertising spending in the fourth quarter of 1995 further depressed
profitability in that year but provided a foundation for the Company's growth in
net sales and profitability in 1996 and the first nine months of 1997. In 1996
and 1997 the Company has further increased advertising expense from 1995 levels.

NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1996

Net Sales. For the nine months ended September 30, 1997, net sales were
$843.9 million, an increase of $139.8 million, or 19.9%, over the comparable
1996 period. Approximately $99.9 million and $32.7 million of the nine month
increase was related to Bumble Bee and Campfire sales, respectively, which are
not reflected in the 1996 amounts. The balance of the increase was primarily due
to net increases in sales of the Company's existing brands.

Cost of Goods Sold. For the nine months ended September 30, 1997, cost of
goods sold as a percentage of net sales increased to 48.9% from 47.4% for the
comparable 1996 period. This was primarily attributable to the inclusion of the
results of the Bumble Bee Business, which generally has lower gross margins than
the Company's other product lines, for the third quarter of 1997. The Bumble Bee
Business cost of goods sold as a percentage of net sales was 71.1% for the third
quarter of 1997. Excluding the Bumble Bee Business, cost of goods sold for the
nine months ended September 30, 1997 declined to 46.0% of net sales from 47.4%
of net sales for the comparable 1996 period. This decline in cost of goods sold
as a percentage of net sales primarily resulted from a more favorable sales
volume mix and continuing overall reductions in the Company's manufacturing
costs which reflect management's cost reduction initiatives.

Total Marketing Expenses. Total marketing expenses increased to $178.4
million for the nine months ended September 30, 1997, as compared to $140.2
million for the comparable 1996 period. Expressed as a

30
<PAGE> 31

percentage of net sales, total marketing expenses increased to 21.1% in the 1997
period from 19.9% in the 1996 period. The increase was primarily attributable to
(i) the inclusion of the Bumble Bee Business and Heritage, which have higher
trade promotion expenses as a percentage of net sales than the Company's other
products, and (ii) trade promotion expenses associated with securing retail
shelf space for line extensions of existing products and new products.

Total Other Operating Expenses. Other operating expenses were $164.7
million for the nine months ended September 30, 1997, as compared to $110.3
million in the comparable 1996 period, an increase of $54.4 million or 49.3%.
Other operating expenses for the third quarter of 1997 include a non-cash stock
option compensation charge of $44.8 million. Excluding this non-cash charge,
total other operating expenses as a percentage of net sales declined to 14.2% in
the first nine months of 1997 from 15.7% in the comparable 1996 period,
primarily reflecting management's cost reduction initiatives.

The non-cash stock option compensation charge aggregating $44.8 million
includes $44.7 million relating to indexed stock options granted to senior
management and other employees. When granted, these options had exercise prices
ranging from $5.33 to $5.76 per share that increased over time at a rate of 8%
per year. In the third quarter of 1997, the variable exercise price of these
options was fixed. Other than these variable rate options that were fixed in the
third quarter, no variable rate options have been granted by the Company. In
addition, during the third quarter of 1997 the Company granted stock options
having exercise prices below the estimated fair market value of the Common
Stock, resulting in a non-cash charge of $0.1 million. In the 1997 fourth
quarter the Company expects to record an additional non-cash stock option
compensation charge related to the grant of stock options having exercise prices
below fair market value, which is estimated to be approximately $1.6 million. A
portion of the 1997 charge relates to stock options that vest over three years.
The Company expects to record additional non-cash stock option compensation
charges related to these options in the years ending December 31, 1998, 1999 and
2000 estimated to be approximately $1.5 million, $1.5 million and $1.1 million,
respectively.

Interest Expense. Interest expense for the nine months ended September 30,
1997 was $79.2 million. There was no interest expense in the comparable 1996
period, as all financing activities of the Company were funded by the former
parent company, American Home Products, which did not allocate interest costs to
its various subsidiaries.

Interest Income and Other, Net. The Company earned $1.6 million on short
term investments of its excess cash during the nine months ended September 30,
1997. As of September 30, 1997, the Company's short term investments were $55.2
million, earning interest at a rate of 6.3%.

Provision for Income Taxes. For the nine months ended September 30, 1997,
income taxes decreased by $41.3 million over the comparable 1996 period due to
lower income before taxes. The effective tax rate increased to 41.0% in 1997
from 38.0% in 1996 due to higher state and local statutory tax rates. The
Company anticipates sufficient future taxable income to realize deferred tax
assets recorded at September 30, 1997. In the event management determines that
sufficient future taxable income may not be generated to fully realize the
deferred tax assets, the Company will provide a valuation allowance by a charge
to income tax expense in the period of such determination.

Net Income. For the nine months ended September 30, 1997, net income
decreased by $68.1 million versus the comparable 1996 period, primarily
reflecting the factors discussed above.

YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995

Net Sales. The Company's net sales were $942.8 million in 1996, as compared
to $818.9 million in 1995, an increase of $123.9 million. In 1995, net sales
were depressed, particularly in the first quarter, as retailers sold the excess
inventory of the Company's products that they held at the end of 1994. The sales
weakness in 1995 was compounded by the effects of an industry wide reduction in
inventory levels by the supermarket trade. In contrast, during 1996, the
Company's customers did not have excess inventory of the Company's products and
the general inventory reductions pursued by the retail trade in 1996 were not as
significant as those pursued in 1995. As a result, during 1996 the Company's net
sales to the retail trade more closely matched the retail trade's actual sales
to consumers. The Company's net sales in 1996 also benefited from

31
<PAGE> 32

management's emphasis on improving merchandising and building brand awareness
through increased media advertising. Management believes that these efforts
increased sales across most of the Company's major product lines. Additionally,
$7.4 million of the increase in net sales was due to the inclusion of Heritage
sales after the November 1, 1996 acquisition.

Cost of Goods Sold. Cost of goods sold was $444.9 million in 1996 as
compared to $398.2 million in 1995, an increase of $46.7 million or 11.7%.
Expressed as a percentage of net sales, cost of goods sold decreased to 47.2% in
1996 from 48.6% in 1995. The decrease in cost of goods sold as a percentage of
net sales was primarily attributable to a higher absorption of overhead charges
as a result of higher production volumes.

Total Marketing Expenses. Total marketing expenses were $191.5 million in
1996 as compared to $186.4 million in 1995, an increase of $5.1 million or 2.7%.
Expressed as a percentage of net sales, total marketing expense declined to
20.2% in 1996 from 22.8% in 1995 primarily as a result of a reduction in
consumer and trade promotion spending as a percentage of net sales. The
Company's total marketing expenses, excluding media advertising, declined to
14.1% of net sales in 1996 from 17.6% of net sales in 1995 as a result of a
reduction in coupon promotions and improved management of trade promotion
spending. Media advertising during 1996 increased by approximately 38.2% to
$58.6 million, or 6.2% of net sales, from $42.4 million, or 5.2% of net sales
during 1995 as a result of management's renewed emphasis on consumer advertising
to build brand equity and consumer loyalty.

Total Other Operating Expenses. Other operating expenses were $153.2
million in 1996 as compared to $165.7 million in 1995, a decrease of $12.5
million or 7.5%. Expressed as a percentage of net sales, other operating
expenses declined to 16.3% of net sales in 1996 from 20.2% in 1995. Included in
the 1996 other operating expenses was a one-time charge for restructuring and
other charges of $4.3 million. Exclusive of this charge, other operating
expenses decreased in 1996 by $16.8 million or 10.1% and were 15.8% of net
sales. This decrease was principally due to (i) a reduction in the commission
percentage paid to brokers, (ii) improved efficiencies in logistics and
distribution, and (iii) administrative headcount reductions.

Interest Expense. Interest expense for the year ended December 31, 1996 was
$17.1 million, reflecting interest on indebtedness incurred in connection with
the IHF Acquisition completed in November 1996. There was no interest expense in
1995.

Provision for Income Taxes. For the year ended December 31, 1996, income
taxes increased $23.9 million over the comparable period due to higher income
before taxes. The effective tax rate decreased from 42.9% in 1995 to 39.1% in
1996 primarily due to nondeductible intangible amortization in the 1995 period.
The Company anticipates sufficient future taxable income to realize deferred tax
assets recorded at December 31, 1996. In the event management determines that
sufficient future taxable income may not be generated to fully realize the
deferred tax assets, the Company will provide a valuation allowance by a charge
to income tax expense in the period of such determination.

Net Income. For the year ended December 31, 1996, net income increased by
$43.8 million versus the comparable 1995 period. The increase was primarily due
to an increase in income from operations.

YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994

Net Sales. The Company's net sales were $818.9 million in 1995, as compared
to $997.3 million in 1994, a decrease of $178.4 million, or 17.9%. Of the $178.4
million decrease, management believes $104.0 million was attributable to
retailers selling excess inventory of the Company's products during 1995 that
they accumulated by the end of 1994 and to management's strategy of reducing
discounts and incentives which had been offered by the Company to its retail
customers in the fourth quarters of 1994 and 1993. Of the $104.0 million
decrease, (i) approximately $90.0 million related to excess net sales to grocery
retailers in the fourth quarters of 1993 and 1994 and (ii) approximately $14.0
million was due to unusual discounts and incentives given to mass merchandisers
in 1994 which were not repeated in 1995. In addition, management believes that
$56.0 million of the 1995 net sales decrease was due to (i) market share erosion
across many of the Company's major product lines caused by a significant
reduction in media advertising support for these brands in 1994 and the first
half of 1995 and (ii) the failure of the Chef Boyardee Sesame Street canned
pasta

32
<PAGE> 33

product line. Moreover, management believes $18.0 million of the net sales
decrease was due to an industry-wide reduction in inventory levels by the
supermarket trade.

Cost of Goods Sold. Cost of goods sold was $398.2 million in 1995, as
compared to $463.1 million in 1994, a decrease of $64.9 million, or 14.0%.
Expressed as a percentage of net sales, cost of goods sold increased to 48.6% in
1995 from 46.4% in 1994. The increase in cost of goods sold as a percentage of
net sales was primarily attributable to underabsorbed overhead charges as a
result of lower production volumes. In addition, the Company estimates that 1995
margins were negatively impacted by approximately $5.0 million related to the
discontinuation of Chef Boyardee Sesame Street canned pasta. This $5.0 million
amount reflects inventory write-offs of $0.7 million, accrued contractual
royalty payments of $1.0 million and a $3.3 million estimate of the reduced
margins realized on sales of the product resulting from price discounting
following its termination.

Total Marketing Expenses. Total marketing expenses were $186.4 million in
1995, as compared to $200.8 million in 1994, a decrease of $14.4 million, or
7.2%. This decrease was primarily due to a decrease in trade and consumer
promotions of $27.6 million, offset in part by an increase in media advertising
of $9.6 million. Expressed as a percentage of net sales, however, total
marketing expenses increased to 22.8% in 1995 from 20.1% in 1994, primarily as a
result of the increase in media advertising expenditures. Management increased
media advertising expenditures by $9.6 million, or 121%, during the last three
months of 1995 over the corresponding 1994 period in an effort to reverse the
erosion in market share of the Company's product lines.

Total Other Operating Expenses. Other operating expenses were $165.7
million in 1995, as compared to $174.2 million in 1994, a decrease of $8.5
million, or 4.9%. Expressed as a percentage of net sales, other operating
expenses increased to 20.2% in 1995 from 17.5% in 1994, primarily as a result of
lower sales, and an increase in general and other expenses of $5.6 million
principally related to an increase in post retirement benefits costs and
severance for administrative headcount reductions.

Provision for Income Taxes. For the year ended December 31, 1995, income
taxes decreased $33.9 million over the comparable period due to lower income
before taxes. The effective tax rate increased to 42.9% from 39.8% primarily due
to an increase in the amortization of intangibles, which was not deductible for
tax purposes.

Net Income. For the year ended December 31, 1995, net income decreased by
$56.7 million versus the 1994 period. This decrease was primarily due to lower
sales.

SEASONALITY AND QUARTERLY RESULTS

The Company's inventory levels are moderately seasonal and affected by the
growing season for commodity products such as tomatoes, fruits, beans and
peanuts. As these products are harvested in August through October, inventory
levels tend to grow during this period. The Company's inventory levels in its
seafoods business are also affected by the seasonal fishing cycle. The Company's
net sales and results of operations are generally not seasonal.

33
<PAGE> 34

The following table sets forth, on a quarterly basis, certain unaudited
statements of income data for the four quarters of 1996 and the first three
quarters of 1997. Such data is not necessarily indicative of results for any
full year or for any subsequent period.

<TABLE>
<CAPTION>
QUARTER ENDED
------------------------------------------------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, MARCH 31, JUNE 30, SEPTEMBER 30,
1996 1996 1996 1996 1997 1997 1997
--------- -------- ------------- ------------ --------- -------- -------------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales.............. $227.3 $222.0 $254.8 $238.7 $244.6 $249.9 $349.5
Cost of goods sold..... 110.5 103.7 119.7 111.0 115.7 115.1 182.2
------ ------ ------ ------ ------ ------ ------
Gross profit........... 116.8 118.3 135.1 127.7 128.9 134.8 167.3
Total marketing
expenses............. 50.6 42.5 47.1 51.3 52.8 56.5 69.1
Total other operating
expenses............. 38.5 33.1 38.7 42.9 38.7 37.3 88.7(1)
------ ------ ------ ------ ------ ------ ------
Operating profit....... $ 27.7 $ 42.7 $ 49.3 $ 33.5 $ 37.4 $ 41.0 $ 9.5
====== ====== ====== ====== ====== ====== ======
</TABLE>

- ---------------

(1) Includes $44.8 million of non-cash stock option compensation expense.

BUMBLE BEE SEAFOODS

The Company acquired the Bumble Bee Business on July 1, 1997 from Bumble
Bee Seafoods. See "The Company." Bumble Bee is one of the leading brands of
premium canned seafood in the U.S. and the leading brand of canned white meat
tuna and canned salmon in the U.S. The assets acquired consist primarily of
inventory, accounts receivable, property, plant and equipment and trademarks
used by the Bumble Bee Business for the processing and marketing of Bumble Bee
canned seafood products. Prior to this transaction, Bumble Bee Seafoods was
highly leveraged and had capital constraints which limited its ability to secure
raw materials and most effectively market its products.

Net sales of Bumble Bee Seafoods were $179.0 million in the six month
period ended June 30, 1997, as compared to $209.3 million in the comparable 1996
period. This decline was largely due to the inability of Bumble Bee Seafoods to
purchase raw fish caused by cash constraints resulting from Bumble Bee Seafoods'
highly leveraged capital structure. Cost of goods sold, expressed as a
percentage of net sales, were 71.2% in the six month period ended June 30, 1997,
as compared to 68.1% in the comparable 1996 period. This was primarily caused by
an increase in the raw material cost of light meat tuna. Operating expenses,
expressed as a percentage of net sales, were 29.6% for the six month period
ended June 30, 1997 and 29.3% for the comparable 1996 period.

The Company's historical financial information does not include the
operations of the Bumble Bee Business prior to the Bumble Bee Acquisition.

LIQUIDITY AND CAPITAL RESOURCES

The Company historically has generated positive cash flows from operations.
In the years ended December 31, 1994, 1995 and 1996 and in the nine months ended
September 30, 1997 the Company generated $83.4 million, $145.5 million, $146.0
million and $86.8 million of cash flows from operations, respectively. Capital
expenditures have amounted to $31.1 million, $24.2 million, $11.9 million and
$8.6 million for the years ended December 31, 1994, 1995 and 1996 and for the
nine months ended September 30, 1997, respectively. In all of 1997, the Company
expects to spend approximately $15.0 million on capital projects to maintain
facilities and also to upgrade its management information systems, which is
expected to be completed in the first quarter of 1998. The Company also has a
$10.2 million balloon royalty payment due in January 1998 under a licensing
agreement related to the Company's cereal products business.

In connection with the IHF Acquisition, the Company entered into the Senior
Bank Facilities and issued the Senior Subordinated Notes. In connection with the
Bumble Bee Acquisition, the Company amended the Senior Bank Facilities, which
currently consists of a $140.0 million revolving credit facility, a $351.5
million Tranche A term loan and a $369.0 million Tranche B term loan. During the
first nine months of 1997, the

34
<PAGE> 35

Company repaid $29.5 million of borrowings under the term loans. The Company
will apply the net proceeds of the Offering to repay indebtedness under the
Senior Bank Facilities.

In connection with the Offering, the Company expects to amend the Senior
Bank Facilities so that they comprise (i) a $200.0 million revolving credit
facility, maturing in 2004 or earlier upon repayment of the term loans; (ii) a
$420.0 million Tranche A term loan facility, maturing in 2004 with mandatory
semi-annual repayments in increasing amounts commencing March 31, 1998; and
(iii) a $150.0 million Tranche B term loan facility, maturing in 2005 with
mandatory semi-annual repayments of $0.2 million through March 31, 2004 and
increasing thereafter. After giving effect to the application of the net
proceeds of the Offering and the expected amendment of the Senior Bank
Facilities, the Company expects to have borrowings outstanding of $26.6 million
under the revolving credit facility, $420.0 million of Tranche A term loans and
$150.0 million of Tranche B term loans. As expected to be amended, scheduled
repayments under the Senior Bank Facilities for 1998 will be $27.4 million. In
addition to scheduled periodic repayments, the Company is also required to make
mandatory repayments of the loans under the Senior Bank Facilities with a
portion of its excess cash flow. Borrowings under the amended Senior Bank
Facilities will bear interest at variable rates, generally based on the adjusted
LIBOR plus applicable margins (expected to be 1.5% in the case of the revolving
credit facility and the Tranche A term loan facility and 1.75% in the case of
the Tranche B term loan facility immediately after the closing of the Offering).
See "Description of Indebtedness -- Senior Bank Facilities." As expected to be
amended, the effect of a 1/4% increase or decrease in the applicable interest
rates under the Senior Bank Facilities would change the Company's annual
interest expense thereunder by approximately $1.4 million.

The Company also has outstanding $400.0 million of 10 3/8% Senior
Subordinated Notes due 2006, without any scheduled repayments of principal prior
to maturity, requiring semi-annual interest payments. See "Description of
Indebtedness -- Senior Subordinated Notes." Both the Senior Bank Facilities and
the terms of the Senior Subordinated Notes contain a number of significant
covenants that, among other things, restrict the ability of the Company to
dispose of assets, incur additional indebtedness, repay other indebtedness or
amend other debt instruments, pay dividends, create liens on assets, enter into
capital leases, make investments or acquisitions, engage in mergers or
consolidations, make capital expenditures, engage in certain transactions with
affiliates and otherwise restrict corporate activities. In addition, under the
Senior Bank Facilities the Company is required to comply with specified minimum
interest coverage, maximum indebtedness to EBITDA and minimum fixed charge
coverage ratios. See "Description of Indebtedness."

Since the IHF Acquisition, the Company has utilized significant cash flows
from operations and financing activities to implement strategic acquisitions.
The Company acquired Heritage in November 1996, the Bumble Bee Business in July
1997 and Creative Products in October 1997, requiring cash outlays of
approximately $70.0 million, $160.0 million and $52.0 million, respectively. The
acquisition of Heritage was financed through proceeds from the Senior
Subordinated Notes and term loan borrowings under the Senior Bank Facilities at
the time of the IHF Acquisition. The acquisition of the Bumble Bee Business was
financed through term loan borrowings under the Senior Bank Facilities and cash
on hand. The acquisition of Creative Products was financed through borrowings
under the revolving credit facility. The Company acquired Productos Del Monte in
October 1997 for 3,127,415 shares of Common Stock.

The Company believes that cash generated from operations and borrowings
under the Senior Bank Facilities will be sufficient to satisfy working capital
requirements and required capital expenditures. Further expansion of the
business through acquisitions may require the Company to incur additional
indebtedness or issue equity securities. There can be no assurance that
additional debt or equity will be available to the Company, or if available will
be on terms acceptable to the Company.

The Company currently does not use derivative financial instruments for
trading or speculative purposes, nor is the Company a party to leveraged
derivatives. In accordance with the Senior Bank Facilities, the Company is
required to enter into interest rate protection agreements to the extent
necessary to provide that, when combined with the Senior Subordinated Notes, at
least 50% of the Company's aggregate indebtedness is subject to either a fixed
interest rate or interest rate protection agreement through December 1998. To
comply with required interest rate protection provisions, the Company entered
into an interest rate collar transaction

35
<PAGE> 36

that expires in December 1998. The notional amount of the collar is $135.0
million with the cap set at 8.0% and the floor set at 5.25%.

RECENT PRONOUNCEMENTS

The American Institute of Certified Public Accountants issued Statement of
Position ("SOP") 96-1, "Environmental Remediation Liabilities" in October 1996.
SOP 96-1 provides authoritative guidance on specific accounting issues in
connection with recognizing, measuring and disclosing environmental cleanup
liabilities. The Company adopted this SOP during the first quarter of 1997;
there was no impact on the Company's results of operations or financial position
upon adoption.

In June 1996, Statement of Financial Accounting Standards ("SFAS") No. 125,
"Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities," was issued to provide accounting and reporting standards for
transfers and servicing of financial assets and extinguishments of liabilities.
This statement became effective for transfers and servicing of financial assets
and extinguishments of liabilities occurring after December 31, 1996. The
Company does not anticipate that the adoption of this statement will have a
material effect on the financial statements.

In March 1997, SFAS 128, "Earnings Per Share," was issued to establish
standards for computing and presenting earnings per share ("EPS"). The statement
applies to entities with publicly held common stock or potential common stock
and excludes entities whose publicly traded securities include only debt. The
statement is effective for financial statements issued for periods ending after
December 15, 1997; earlier application is not permitted. This statement will
require presentation of basic and diluted EPS. The Company anticipates that
diluted EPS in accordance with this statement would approximate EPS as reported.

In June 1997, SFAS 130, "Reporting Comprehensive Income," was issued to
establish standards for reporting and displaying of comprehensive income and its
components in a full set of general-purpose financial statements. This statement
requires disclosure of the components of comprehensive income including, among
other things, foreign currency translation adjustments, minimum pension
liability items and unrealized gains and losses on certain investments in debt
and equity securities. The Company would be required to show components of
comprehensive income in a financial statement displayed as prominently as the
other required financial statements. The statement is effective for fiscal years
beginning after December 15, 1997. The Company anticipates compliance with this
statement in 1998.

In June 1997, SFAS 131 "Disclosures About Segments of an Enterprise and
Related Information," was issued to establish standards for public business
enterprises reporting information regarding operating segments in annual and
interim financial statements issued to shareholders. It also establishes
standards for related disclosures about products and services, geographic areas
and major customers. This statement is effective for financial statements for
periods beginning after December 15, 1997. In the initial year of application,
comparative information for earlier years is to be restated. The Company
operates in one business segment which manufactures and markets a diversified
portfolio of shelf-stable food products, and accordingly, does not believe the
segment reporting aspect of this statement will impact its financial statements.

EXTRAORDINARY ITEM

In connection with the Offering and the expected amendment of the Senior
Bank Facilities, the Company expects to record an extraordinary loss in the
fourth quarter of 1997 associated with the write-off of deferred financing fees
of approximately $11.1 million, net of tax benefit.

36
<PAGE> 37

BUSINESS

OVERVIEW

In November 1996, the Company was the subject of a leveraged
recapitalization pursuant to which affiliates of Hicks Muse and C. Dean
Metropoulos, the Company's new Chairman and Chief Executive Officer, acquired
control of the Company from American Home Products. Under Mr. Metropoulos'
direction, the Company has implemented a strategy to increase sales and profits
by (i) growing sales of existing brands, (ii) expanding distribution into
alternative markets, (iii) completing strategic acquisitions and (iv) achieving
cost savings. The Company's pro forma net sales and operating profit for the
fiscal year ended December 31, 1996 were $1,338.4 million and $157.7 million,
respectively. For the nine month period ended September 30, 1997, the Company's
pro forma as adjusted net sales were $1,022.9 million, and the Company's pro
forma as adjusted operating profit, before giving effect to a non-cash stock
option compensation charge of $44.8 million, was $134.5 million. See "Unaudited
Pro Forma Financial Statements."

In the United States, the Company groups its brands into five general
categories consisting of Chef Boyardee branded products, Bumble Bee branded
products, specialty brands, southwestern cuisine and snack foods. The Company's
two largest brands, the nationally distributed families of Chef Boyardee
prepared foods and Bumble Bee premium canned seafoods, represented 27.0% and
26.7%, respectively, of the Company's aggregate net sales in 1996. Chef Boyardee
is one of the nation's most widely recognized brands and is found in over half
of American homes with children. Bumble Bee is one of the leading brands of
premium canned seafood in the U.S. and is the leading brand of canned white meat
tuna and salmon in the U.S. The Company's strong Chef Boyardee and Bumble Bee
brands are complemented by its specialty brands, including PAM cooking spray,
Polaner fruit spreads and spices, Gulden's mustard, Maypo, Wheatena and Maltex
hot cereals and G. Washington's dry seasonings and broths. In the growing market
for southwestern cuisine, the Company's products include Ro*Tel canned tomatoes
with green chilies and strong regional brands such as Ranch Style and Luck's
canned beans and Dennison's chili. In the snack foods category, the Company's
brands include Crunch 'n Munch glazed popcorn and pretzels, Campfire
marshmallows and marshmallow crisp rice bars and Jiffy Pop unpopped popcorn. The
Company, through its Productos Del Monte subsidiary, is also a leading processor
and marketer of branded catsup, canned vegetables and bottled salsa in Mexico.

The Company's recognizable portfolio of leading brands provides a critical
mass of brand name sales that (i) allows the Company to realize synergies in
manufacturing, marketing, distribution and raw material sourcing, (ii) creates a
position of strength with retailers that is critical in maintaining and securing
valuable retail shelf space for existing and new brands and (iii) provides a
strong platform for introducing product line extensions and new products. The
following table sets forth market positions and market shares of the Company's
principal product lines, along with certain competitors' market share
information.

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<PAGE> 38

MARKET POSITION OF PRINCIPAL PRODUCT LINES

- ---------------

(3) Dennison's has the #2 market share in California, which represents
approximately 74% of Dennison's net sales.

BUSINESS STRATEGY

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<PAGE> 39

Since 1995, the Company has refocused its marketing efforts by
emphasizing consumer advertising (a "pull" strategy) and de-emphasizing
trade spending and discounting (a "push" strategy). As a result,
advertising costs as a percentage of total marketing expenses increased
from 16.3% in 1994 to 25.7% in the first nine months of 1997 while trade
promotion expenses as a percentage of total marketing expenditures
declined from 63.5% to 59.8%. The Company recently introduced several new
television advertising campaigns, such as those promoting Chef Boyardee
as an ideal "fourth meal" to be served after school and PAM cooking spray
as a flavorful, healthy alternative to cooking oils, butter and
margarine. Since the new Chef Boyardee television campaign was introduced
in November 1996, consumer sales of Chef Boyardee's principal product
line, the "All Family" product line, has increased significantly, with
consumer sales through September 1997 increasing 7.7% over the comparable
1996 period. In addition, the Company recently began television
advertising for its Ranch Style brand for the first time in five years.
The Company has also redesigned the packaging of a majority of its
products to emphasize the brand name, contemporize the presentation and
make the products visually more appealing to consumers.

- Complete Strategic Acquisitions. The Company will continue to pursue
opportunities to make acquisitions that complement and expand its core
businesses or that enable the Company to enter new markets. Since the IHF
Acquisition, the Company has more aggressively pursued acquisitions and
has acquired (i) Heritage, the manufacturer of the Company's Campfire
branded products, (ii) the Bumble Bee Business, (iii) Productos Del Monte
and (iv) Creative Products. Management believes that additional strategic
acquisition opportunities exist and that incremental revenue and earnings
can be generated by leveraging the Company's production, distribution,
sales and administrative capabilities. In addition, an important element
of management's evaluation of a strategic acquisition is the potential
savings attainable through rationalization of the target company's cost
structure.

- Continue to Achieve Operating Cost Savings. Since the IHF Acquisition,
the Company has achieved annualized net cost savings of approximately
$25.3 million, including approximately $11.1 million associated with the
integration of the Bumble Bee Business. These savings have been achieved
primarily through (i) reductions in overhead and duplicative
administrative, sales and other personnel ($15.5 million), (ii)
streamlining production, distribution, research and administrative
functions ($7.3 million) and (iii) savings in packaging and brokerage
expenses ($2.5 million). To achieve these cost savings, the Company
incurred one time charges of approximately $5.0 million, most of which was
recognized in the year ended December 31, 1996. Management expects to be
able to achieve further cost savings by continuing these initiatives.

COMPETITIVE STRENGTHS

Management believes that the Company has the following competitive
strengths that will enable it to execute its business strategy effectively.

- Well-Positioned Products in Growing Markets. The Company's diversified
portfolio of branded products is well-positioned to meet the growing
demand for convenient and healthy foods. Many of the

39
<PAGE> 40

Company's products, such as Chef Boyardee canned pasta and Bumble Bee
canned seafood, are quick and easy to prepare and nutritionally sound. As
such, management believes these products are particularly appealing to
families with children. Many of the Company's other brands also benefit
from the trend toward healthier eating, including PAM, Polaner, Ro*Tel
and Ranch Style. The Company has introduced several new products that
capitalize on the trend toward fat-free foods such as Chef Boyardee 99%
Fat-Free, Crunch 'n Munch Fat-Free and Luck's Fat-Free Beans. In
addition, the Company's strong southwestern cuisine products provide a
platform to capitalize on the cuisine's growing national popularity.
Furthermore, through the acquisition of Productos Del Monte, the Company
has established a presence in the growing Mexico market for processed
food products.

- Strong Management. The Company's senior management team is comprised of
food industry veterans led by C. Dean Metropoulos, the Company's Chairman
and CEO, and John Bess, the Company's President and COO. Mr. Metropoulos
is CEO of Morningstar and has been CEO of several other food companies,
including Stella. During Mr. Metropoulos' tenure at Morningstar and
Stella, he implemented successful sales growth and cost reduction
strategies which dramatically increased sales and earnings at both
companies. Many of these strategies are similar to those that are being
implemented by the Company. Mr. Bess has extensive experience in growing
established brand names by implementing aggressive consumer based
marketing programs. Mr. Bess has 21 years of management and consumer
marketing experience at Procter & Gamble, most recently serving as Vice
President and Managing Director of Worldwide Strategic Planning for
Procter & Gamble's global hair care business, which generated 1996 sales
of $2.6 billion. In addition, the Company's six general managers
overseeing brand performance have an average of approximately 20 years of
experience in the food industry.

- Strong Profit Margins to Fund Growth. Management believes that the
Company's operating profit margins provide financial resources necessary
to find the Company's internal growth strategy. From 1991 through 1996
(prior to the Bumble Bee Acquisition), the Company achieved an average
annual operating profit margin of 15.2%. As a result of the Company's
strong operating profit margins, the Company generated cash flow from
operations of $146.0 million in 1996. Management believes that its high
operating profit margins and cash flow from operations result from the
Company's leading market position in high margin food categories as well
as the cost efficiencies gained from significant historical investment in
the Company's manufacturing and distribution network. The Company's strong
financial performance and its relatively low capital expenditure
requirements are expected to generate significant cash flow to fund the
Company's internal growth strategy.

INDUSTRY

The U.S. food industry is characterized by relatively stable growth based
on modest price and population increases. Over the last ten years, the industry
has experienced consolidation as competitors have shed non-core business lines
and made strategic acquisitions to complement category positions, maximize
economies of scale in raw material sourcing and production and expand retail
distribution. The importance of sustaining strong relationships with retailers
has become a critical success factor for food companies and is driving many
initiatives such as category management. Food companies with category leadership
positions and

40
<PAGE> 41

strong retail relationships have increasingly benefited from these initiatives
as a way to maintain shelf space and maximize distribution efficiencies.

Consumer demand for food products in the United States is being strongly
influenced by the growth of the "baby boomer" population. The changing
lifestyles and needs of these individuals -- now between the ages of 31 and
50 -- have driven the introduction of nutritious foods that are convenient to
prepare and provide quick family meal alternatives. The primary target market
for convenience foods includes baby boomer parents and approximately 39 million
children between the ages of 5 and 14.

In addition to the U.S. market, certain international markets with
above-average population growth and expanding economies offer substantial growth
potential for the industry, especially for companies with existing international
sales of popular U.S. brands. Moreover, the food service and private label
markets provide alternative opportunities for growth by branded food companies.

PRODUCTS AND MARKETS

In the United States, the Company manufactures and markets popular branded
food products that are leaders within their respective markets. The Company's
domestic branded food business is complemented by a strong presence in Canada,
Mexico and Puerto Rico, growing food service and private label businesses and
sales to the U.S. military.

In the United States, the Company groups its brands into five general
categories consisting of Chef Boyardee branded products, Bumble Bee branded
products, specialty brands, southwestern cuisine and snack foods. The following
table sets forth aggregate net sales and related information for each of these
five general categories and the Company's other markets for the periods
indicated.(1)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, NINE MONTHS ENDED SEPTEMBER 30,
------------------------------------------------------ -----------------------------------
1994 1995 1996 1996 1997
---------------- ---------------- ---------------- ---------------- ----------------
% OF % OF % OF % OF % OF
AMOUNT TOTAL AMOUNT TOTAL AMOUNT TOTAL AMOUNT TOTAL AMOUNT TOTAL
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CHEF BOYARDEE.......... $ 452 29.1% $ 354 26.1% $ 400 27.0% $ 306 27.1% $ 308 28.0%
BUMBLE BEE............. 410 26.4% 394 29.1% 396 26.7% 312 27.6% 276 25.1%
SPECIALTY BRANDS
PAM.................. 86 5.5% 67 4.9% 85 5.8% 62 5.5% 58 5.3%
Polaner.............. 72 4.6% 60 4.4% 61 4.1% 46 4.0% 39 3.5%
Gulden's............. 18 1.2% 17 1.3% 17 1.1% 13 1.2% 14 1.3%
All Other(2)......... 5 0.4% 4 0.3% 4 0.3% 3 0.3% 3 0.3%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Speciality... 181 11.7% 148 10.9% 167 11.3% 124 11.0% 114 10.4%
SOUTHWESTERN CUISINE
Ro*Tel............... 26 1.6% 19 1.4% 26 1.8% 18 1.6% 19 1.7%
Ranch Style.......... 47 3.1% 41 3.0% 44 3.0% 34 3.0% 35 3.2%
Luck's............... 28 1.8% 27 2.0% 29 1.9% 20 1.8% 20 1.8%
Dennison's........... 27 1.7% 19 1.4% 22 1.5% 16 1.4% 15 1.4%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total
Southwestern..... 128 8.2% 106 7.8% 121 8.2% 88 7.8% 89 8.1%
SNACK FOODS
Crunch 'n Munch...... 53 3.4% 40 3.0% 49 3.3% 36 3.2% 41 3.7%
Campfire............. 40 2.6% 53 3.9% 55 3.7% 41 3.6% 33 3.0%
Jiffy Pop............ 6 0.4% 5 0.3% 5 0.3% 4 0.4% 4 0.4%
Glazed Pretzels...... -- -- -- -- -- -- -- -- 1 0.1%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Snack........ 99 6.4% 98 7.2% 109 7.3% 81 7.2% 79 7.2%
OTHER MARKETS
Canada............... 56 3.6% 53 3.9% 49 3.3% 38 3.4% 41 3.7%
Food service and
private label...... 106 6.9% 111 8.2% 131 8.8% 96 8.5% 107 9.7%
Mexico, Puerto Rico
and
International...... 100 6.4% 71 5.3% 89 6.0% 68 6.0% 69 6.2%
Military............. 21 1.3% 20 1.5% 20 1.4% 16 1.4% 16 1.6%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total Other
Markets...... 283 18.2% 255 18.9% 289 19.5% 218 19.3% 233 21.2%
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
AGGREGATE NET
SALES........ $1,553 100.0% $1,355 100.0% $1,482 100.0% $1,129 100.0% $1,099 100.0%
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>

- ---------------

(1) Aggregate net sales include sales of the Company as well as sales of
Heritage, the Bumble Bee Business, Productos Del Monte and Creative Products
for each of the periods shown.

(2) Includes Wheatena, Maypo and Maltex hot cereals and G. Washington's dry
seasonings and broths.

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<PAGE> 42

CHEF BOYARDEE (27.0% OF 1996 AGGREGATE NET SALES)

Created by Hector Boiardi in 1929 and acquired by the Company in 1946, Chef
Boyardee is one of the nation's most recognizable brand names. The Chef Boyardee
product line consists of canned pasta, microwave pasta, pizza kits, dry dinners
and pizza and spaghetti sauces. Chef Boyardee products are found in over half of
all American homes with children. Management believes that Chef Boyardee
products appeal to families with children because they are generally convenient,
nutritionally sound and inexpensive relative to other quick meal and snacking
alternatives. Canned pasta is purchased most frequently by women with children
between the ages of 3 and 12.

Chef Boyardee has consistently held the number one share in the $539.1
million canned pasta market. The Company separates the canned pasta category
into two segments: "All Family" and "Kids." The "All Family" segment represents
canned pasta products primarily consumed by children over the age of six as well
as adults. The "Kids" segment represents canned pasta products typically in the
shapes of popular cartoon and comic book characters that are primarily consumed
by children age six and under. The Company's "All Family" canned pasta line
consists primarily of Beef Ravioli and Mini-Ravioli, in both regular and 99%
fat-free product offerings, as well as Spaghetti & Meatballs and Beefaroni, and
accounts for approximately 87% of the Company's canned pasta sales. The
Company's "Kids" canned pasta line features the newly introduced Chef Jr. line
and has been reformulated to appeal to younger children. The Chef Jr. line
includes shapes such as ABCs and 123s, dinosaurs, creatures of the sea, and
licensed characters such as Spiderman, X-Men and Teenage Mutant Ninja Turtles.
The Chef Jr. line accounts for approximately 13% of the Company's canned pasta
sales.

As the table below indicates, Chef Boyardee is the leading brand in the
canned pasta category with a 57% market share, followed by the Campbell Soup
Company's Franco American brand at 37%. The remaining seven percent of this
category is fragmented, with private label accounting for approximately five
percent.

<TABLE>
<CAPTION>
MARKET SHARE
-----------------------------
CHEF FRANCO
SEGMENT SIZE BOYARDEE AMERICAN OTHER
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C>
"All Family"............................ $335 77% 15% 8%
"Kids".................................. 204 23% 72% 5%
------
Total Canned Pasta................. $539 57% 37% 6%
======
</TABLE>

As indicated in the table above, Chef Boyardee holds a dominant position in
its core "All Family" category while Franco American products have the number
one position in the "Kids" category. Management believes that its "All Family"
products compete primarily within the broader category of prepared or quick
meals.

Management intends to continue to build Chef Boyardee's brand equity
through strong advertising support and packaging that aggressively promote the
Chef Boyardee brand name. In addition, management believes that sales of Chef
Boyardee products can be enhanced by (i) leveraging the Company's dominant
position in the "All Family" category by targeting advertising campaigns toward
children ages 9 to 13, the older segment of the brand's traditional consumer
base, (ii) encouraging greater use of Chef Boyardee products, particularly as an
after school snack, and (iii) promoting the nutritional benefits of Chef
Boyardee, including its 99% fat-free products, versus other quick meal
alternatives.

BUMBLE BEE (26.7% OF 1996 AGGREGATE NET SALES)

Founded in 1899 and acquired by the Company in July 1997, Bumble Bee is one
of the leading brands of premium canned seafood products in the U.S. The Bumble
Bee product line consists principally of canned white meat tuna, canned light
meat tuna and canned salmon. Bumble Bee holds number one shares of the canned
white meat tuna market and the canned salmon market and is the third leading
brand in the canned light meat tuna market. Similar to the Company's Chef
Boyardee product line, management believes that

42
<PAGE> 43

Bumble Bee products appeal to consumers because they are convenient to prepare
and more nutritious relative to other quick meal and snacking alternatives.

The canned tuna market in the U.S. is approximately $1.1 billion and is
generally segmented into two main categories, white meat ($446.9 million) and
light meat ($646.4 million). White meat tuna is processed from albacore tuna and
has a superior quality image and premium price compared to light meat tuna
(which is processed from skipjack and yellowfin tuna) due to its milder flavor,
lighter color and firmer texture. The Company's canned white meat tuna product
line represented 47.9% of the Company's canned tuna sales in 1996 and has
significantly higher gross margins than the Company's light meat tuna products.

As the table below indicates, Bumble Bee is the market leader in the white
meat canned tuna segment with a 40% market share, followed by H.J. Heinz
Company's Starkist brand and Van Camp Seafood Company, Inc.'s Chicken of the Sea
brand. In the light meat canned tuna segment, Bumble Bee is the third leading
brand with a 16% market share. Private label represents 7% and 15% of the canned
white meat market and canned light meat tuna market, respectively. In addition
to Bumble Bee's leading market positions in canned tuna, Bumble Bee is also the
market leader in canned salmon with a 21% market share.

<TABLE>
<CAPTION>
MARKET SHARE
--------------------------------------------------
SEGMENT SIZE BUMBLE BEE STARKIST CHICKEN OF THE SEA OTHER
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
Canned White Meat Tuna....... $447 40% 34% 15% 11%
Canned Light Meat Tuna....... $646 16% 50% 16% 18%
</TABLE>

Sales of Bumble Bee products have suffered as a result of being owned by a
financially troubled company that was highly leveraged and had capital
constraints which limited Bumble Bee Seafoods ability to source raw fish and
effectively market its products. To help stimulate sales of Bumble Bee products,
management intends to (i) pursue a consumer-based marketing and advertising
strategy that leverages the equity of the Bumble Bee brand name and promotes the
healthy and convenience features of its products, (ii) introduce complementary
products under the Bumble Bee brand name that emphasize the convenience and
nutritional benefits of canned seafood, (iii) broaden the distribution of Bumble
Bee products to include alternative markets such as food service operators and
(iv) aggressively source albacore tuna for Bumble Bee canned white meat tuna.

SPECIALTY BRANDS (11.3% OF 1996 AGGREGATE NET SALES)

The Company's portfolio of specialty brands consists primarily of PAM,
Polaner and Gulden's, each of which commands leading national positions in its
defined markets. These brands have broad consumer recognition that has been
developed through strong marketing and advertising support.

PAM. PAM established the market for non-stick cooking spray with its
introduction in the 1960s. The Company's PAM products include Original, Butter
and Olive Oil non-stick cooking sprays. The Company's advertising and marketing
strategy for PAM emphasizes that it is the only all-natural cooking spray for
healthy, low-fat cooking. As a result of PAM's image and performance, the brand
enjoys a loyal customer base and a premium price.

In grocery outlets, the non-stick cooking spray category has grown at a
compound annual rate of approximately 11% from 1993 to 1996. Management believes
that this rapid sales growth has been driven by a trend toward healthier eating
and cooking. Several well-known chefs and numerous cookbook and magazine recipes
have advocated cooking sprays in lieu of fattier oils and spreads. PAM is the
market leader in the $160.8 million non-stick cooking spray category with 52% of
the market, while CPC International, Inc.'s Mazola, Procter & Gamble's Crisco
and ConAgra's Wesson have market shares of 13%, 5% and 2%, respectively. Private
label accounts for most of the remaining market share with approximately 20%, of
which Creative Products produces the majority.

Management intends to capitalize on PAM's premium image and the trend
toward healthier eating by identifying and promoting new usage occasions through
print advertising campaigns and on-package and in-

43
<PAGE> 44

store recipe suggestions. The Company plans to introduce two new flavors, garlic
and lemon, and a barbecue spray that is formulated to withstand higher heat. In
addition, the Company has begun to distribute PAM in Mexico.

Polaner. The Polaner brand is comprised of a broad array of products
competing within the general fruit spread (including jams, jellies, preserves
and fruit-juice-sweetened spreads) and wet spices markets. The focal point of
the Company's Polaner marketing efforts are the "All-Fruit"
fruit-juice-sweetened line of spreads that accounted for approximately 74% of
all Polaner brand sales in 1996. The Company emphasizes Polaner's premium image
and quality in order to differentiate the brand from its competitors.

Fruit spreads are a $678.9 million category, with the fruit-juice-sweetened
segment representing $85.9 million of the category. The fruit-juice-sweetened
segment consists of premium products that contain less refined sugar than other
spreads such as jams and preserves. The primary consumers of fruit-juice-
sweetened spreads are women over the age of 35 with higher incomes. Since the
Polaner brand was acquired by the Company and expanded to national distribution
less than three years ago, its market share in the fruit-juice-sweetened segment
has increased from 32% in 1993 to 48% currently. Polaner's nearest competitor in
this segment is J.M. Smucker Co.'s Simply Fruit at 32%.

Gulden's. Charles Gulden created Gulden's mustard in New York City in 1862
and received a number of awards in international food competitions. The Company
acquired the brand in 1962. Gulden's mustard is the leader in the brown mustard
segment with a 50% market share, followed by French's Deli Style with a 25%
market share. Brown mustard is a $40.9 million segment of the $269.9 million
mustard category. The brown mustard grocery segment grew at a compound annual
rate of 10% between 1993 and 1996.

Other Grocery Brands. A number of smaller brands complete the Company's
national specialty brands portfolio, including Maypo, Wheatena and Maltex hot
cereals and G. Washington's dry seasonings and broths.

SOUTHWESTERN CUISINE (8.2% OF 1996 AGGREGATE NET SALES)

The Company offers products in the growing southwestern cuisine market on a
national basis with tomato-based items and on a regional basis with beans and
chili. Canned beans and canned chili are $965.5 million and $291.4 million
categories, respectively, with the West and Southwest representing approximately
60% of total U.S. canned chili volume. Tomatoes with green chilies is a $38.7
million category, with the Southwest representing approximately 51% of total
U.S. volume.

A number of the Company's products in the southwestern cuisine categories,
including Dennison's black bean chili with chorizo sausage and beef and Ro*Tel
diced tomatoes with green chilies, are targeted at the U.S. Hispanic population
which is expected to increase 30% between 1996 and 2005 according to the most
recent Bureau of Census report. In addition, management believes that the
growing national market for beans, which is being driven by trends toward
healthier eating, will benefit the Company's Ranch Style brand. In general,
southwestern cuisine products have enjoyed above average growth over the past
five years.

Ro*Tel. The Company's Ro*Tel brand, which consists of diced tomatoes with
green chilies and whole tomatoes with green chilies, has a 76% market share. The
brand was introduced in the early 1940s and acquired by the Company in 1992. The
brand is known as a zesty, robust and flavorful tomato ingredient used primarily
in combination with processed cheese as a dip for tortilla chips. The Company's
marketing strategy for Ro*Tel has primarily consisted of print advertising
campaigns and on-package recipes which feature Ro*Tel as the secret ingredient
that can be used to enhance traditional dishes. The Company recently introduced
two product extensions, "mild" and "extra hot" and has plans to launch two more
flavors in 1997, Mexican Fiesta and Italian Harvest. In addition, management has
initiated a program to expand Ro*Tel sales and is planning to market Ro*Tel in
Mexico.

Ranch Style. Ranch Style beans were created in the early 1930s and soon
became known for their authentic western-style flavor. The Company purchased the
brand in 1983. The Ranch Style product line consists of pork 'n beans, baked
beans, refried beans, other beans, chili and beef-stew. The brand is marketed
primarily in the southwestern United States where it led the region with a 23%
share of the miscellaneous canned bean market and a 39% share of the pork and
beans market. With ingredients that are low in fat and

44
<PAGE> 45

high in protein, Ranch Style products are positioned to satisfy the growing
trend toward healthy eating. The Company expanded the line offering by
introducing four new baked bean items as well as beans with sweet onions. Ranch
Style has had a presence in Mexico for over five years and management believes
that sales of the brand can be expanded in this market. On a combined basis,
Ranch Style leads the canned bean category in the Southwest with a 27% market
share.

Luck's. Luck's was created in the early 1950s in Seagrove, North Carolina.
The Company acquired the product line in 1967. Luck's is the leader in the $62.2
million miscellaneous bean market in the Southeast with a 30% market share. The
Luck's product family primarily includes bean products known for their
traditional southern-style flavor. In July 1997, the Company launched the first
fat-free entries into the miscellaneous beans category with four new Luck's
fat-free items.

Dennison's. The Company's Dennison's product line was originated as a
family recipe by Mrs. May Belle Dennison in 1915 and was purchased by the
Company in 1954. The Dennison's line consists primarily of chili con carne with
and without beans, extra hot chili and recently introduced reduced fat, turkey
and vegetarian chili. These products are marketed as the "Stand Up" chili with a
distinctly extra thick and hearty profile. The brand has traditionally been
marketed in the West where it has an 18% share of the region's $111.1 million
canned chili market.

SNACK FOODS (7.3% OF 1996 AGGREGATE NET SALES)

In the snack food category, the Company's brands include Crunch 'n Munch
glazed popcorn and pretzels, Campfire marshmallows and marshmallow crisp rice
bars and Jiffy Pop unpopped popcorn.

Crunch 'n Munch. Crunch 'n Munch, a combination of popcorn and fresh dry
roasted peanuts coated with a butter toffee glaze, was created in 1966. Crunch
'n Munch, which holds the number one position in the glazed popcorn segment, is
offered in four flavors (Buttery Toffee, Caramel, Almond Supreme and Fat Free
Buttery Toffee). Crunch 'n Munch is positioned as a snack to satisfy the salty
and sweet cravings of consumers. The Company believes that the brand's new
contemporary package design, which emphasizes the Crunch 'n Munch brand name,
and its new fat-free product, as well as further product line extensions such as
the recently introduced Crunch 'n Munch Glazed Pretzels in two flavors (Toffee
and Apple Cinnamon), will allow it to increase its consumer base. Moreover,
management believes that the brand can achieve significantly higher levels of
sales with increased marketing support.

Glazed popcorn is a $74.4 million segment within the $5 billion snack
category, a category which grew at an annual rate of five percent from 1992 to
1995. Glazed popcorn products are purchased by consumers of all ages. Younger
households are more likely to purchase Borden, Inc.'s Cracker Jack brand due to
its appeal to kids, while older households are more likely to purchase Crunch 'n
Munch due to its appeal to adults. Crunch 'n Munch commands a 37% market share,
followed by Cracker Jack at 33%. No other competitor accounts for more than 10%
of the market.

Campfire. The Company's Campfire product line consists of marshmallows and
marshmallow crisp rice bars. The Campfire brand name enjoys broad consumer
recognition, as it is the oldest brand name in the marshmallow category.
Campfire Marshmallow Munchie is the third leading marshmallow crisp rice bar
with an 7% market share of this $166.3 million market, behind Kellogg Company's
Rice Krispies brand with a 60% market share and General Mills, Inc.'s Golden
Graham Treats with a 22% market share. Campfire marshmallow is the second
leading brand in the $113.9 million grocery marshmallow market with a 6% market
share. Favorite Brands, Inc.'s Jet Puff brand is the market leader with a 48%
market share, with private label accounting for the balance of the market.

Management believes that Campfire sales will continue to grow over the next
several years due to (i) growth in the marshmallow crisp rice bar category and
(ii) the Campfire product line gaining a larger share of the branded and private
label marshmallow and marshmallow crisp rice bar markets through expanded
distribution.

45
<PAGE> 46

OTHER MARKETS (19.5% OF 1996 AGGREGATE NET SALES)

The Company's branded business in the United States is complemented by a
strong presence in Canada, Mexico and Puerto Rico, growing food service and
private label businesses, and sales to the U.S. military.

Canada. The Company markets Chef Boyardee canned pasta, PAM cooking spray,
Crunch 'n Munch glazed popcorn and certain other products in Canada. The Company
commands the number one market share position in canned pasta, cooking spray and
glazed popcorn sales in Canada, with Chef Boyardee canned pasta, PAM and Crunch
'n Munch.

Food Service. The Company supplies many of its products to restaurants,
institutions, schools, ballparks, the vending trade, distributors and chain
accounts. In addition, the Company has implemented a number of initiatives to
expand the penetration of its branded products in the food service industry,
including broadening its product lines to meet the specialized needs of the food
service industry and increasing its marketing and sales efforts. The Company's
recent acquisition of Creative Products has expanded its product offering and
sales to food service customers. Management believes that opportunities exist to
utilize the Company's excess plant capacity to facilitate additional growth in
food service sales.

Private Label. The primary products manufactured by the Company under
private labels are prepared pasta, jams and jellies, cooking spray and
marshmallow products. Private label represents an additional opportunity for
growth and the utilization of excess plant capacity. Management believes that
the addition of Creative Products' dedicated private label sales force will help
the Company broaden its private label business.

Mexico, Puerto Rico and International. Through the Company's subsidiary,
Productos Del Monte, the Company is a leading manufacturer and marketer of
branded catsup, canned vegetables and bottled salsa in Mexico. The Company
intends to expand sales of its U.S. products in Mexico, initially targeting PAM
and Ranch Style, and plans to use Productos Del Montes sales and distribution
capabilities to achieve this strategy. In addition, the Company markets Chef
Boyardee canned pasta, Crunch 'n Munch and Jiffy Pop in Puerto Rico. The Company
believes that Chef Boyardee, with over 25 years of sales in Puerto Rico,
commands 98% of the Puerto Rico canned pasta market. Moreover, the Company's
products are exported to over 35 other countries.

Military. The Company sells many of its products to U.S. military bases
both in the U.S. and internationally. Products sold to the military include Chef
Boyardee canned pasta, PAM cooking spray, Crunch 'n Munch glazed popcorn,
Polaner fruit spreads and Ranch Style beans.

MARKETING, SALES AND DISTRIBUTION

The Company's marketing programs consist of advertising, consumer
promotions and trade promotions. The Company's advertising program is comprised
of television, newspaper and magazine advertising aimed at increasing consumer
awareness of the Company's brands and building customer loyalty. Consumer
promotions include targeted coupons and on-package offers designed to generate
trial usage and increase purchase frequency. The Company's trade promotions
focus on obtaining retail display support, achieving key price points and
securing retail shelf space. The Company intends to continue to focus its
marketing efforts towards building brand equity through consumer advertising and
trial generating activities rather than trade spending and discounting.

The Company sells its products in the United States through its direct
sales force and a network of food brokers. The Company maintains U.S. regional
sales offices in New Jersey, North Carolina, Georgia, Illinois, Texas,
California and Florida. The Company's products reach all major classes of trade,
including grocery wholesalers and distributors, grocery stores and supermarkets,
convenience stores, drug and mass merchants and warehouse clubs. The Company
distributes its products in the United States through 26 distribution points,
nine of which are owned by the Company and 17 of which are leased. The Company's
distribution system uses a combination of common carrier trucking, Company
trucks and inter-modal rail transport. In Canada, the Company operates six
distribution points, one of which is Company-owned. In Mexico, Productos Del
Monte operates five distribution centers. Management believes that the Company's
comprehensive U.S. sales and distribution network enables the Company to deliver
85% of its sales volume to customers within 24

46
<PAGE> 47

hours and 100% within 48 hours. Management believes that the Company's sales and
distribution network has the capacity to support substantial increases in
volume.

None of the Company's customers represent more than 10% of the Company's
aggregate net sales.

COMPETITION

RAW MATERIALS

The primary raw materials used in the Company's operations include tin
cans, flour, meat, tomatoes, tuna, salmon, fruit and fruit-juice concentrates,
beans and peanuts. All of the Company's raw materials are widely available from
numerous suppliers, other than white albacore tuna processed by the Bumble Bee
Business, for which there is limited worldwide supply and number of suppliers.

PRODUCTION AND FACILITIES

The Company operates the manufacturing plants described in the following
table. All of these plants are owned by the Company, other than the Utah
facility, which the Company leases under an operating lease with an initial term
that expires in 1999 and containing a renewal option for an additional five year
term. Management believes that the Company's manufacturing plants have
sufficient capacity to accommodate the Company's planned growth over the next
five years.

<TABLE>
<CAPTION>
LOCATION SQUARE FEET PRODUCTS MANUFACTURED
<S> <C> <C>
Milton, Pennsylvania........ 895,000 Canned pasta, microwave products, mustard, glazed
popcorn, pizza kits, dinner kits and sauces
Vacaville, California....... 354,800 Canned pasta, microwave products, tomatoes with
green chilies, chili and tomato paste
Mayaguez, Puerto Rico....... 222,000 Canned tuna
Irapuato, Mexico............ 212,000 Catsup, canned vegetables and bottled salsa
Clearfield, Utah............ 210,000 Marshmallows and marshmallow crisp rice bars
Fort Worth, Texas........... 204,800 Beans and chili
Seagrove, North Carolina.... 198,000 Beans, vegetables, fruit and popcorn
Rossville, Illinois......... 193,000 Cooking spray and health and beauty aids
Niagara Falls, Canada....... 165,500 Canned pasta, pizza kits, dinner kits, sauces and
glazed popcorn
Santa Fe Springs, 122,000
California................ Canned tuna
Manta, Ecuador.............. 66,000 Canned tuna and tuna loins for processing in the
Company's Santa Fe Springs facility
Highspire, Pennsylvania..... 29,000 Cereals
</TABLE>

The Company has also entered into co-packing (third party manufacturing)
agreements with several manufacturers for Bumble Bee canned salmon, Polaner
fruit spreads and spices, PAM cooking spray and G. Washington's dry seasonings
and broths. In 1995, these plants produced approximately eight million cases of
finished product for the Company, as compared to approximately 50 million cases
of products produced by the Company. In addition, the Company owns or leases 37
distribution points throughout North America and Latin America. See "Marketing,
Sales and Distribution."

The Company leases office space in Parsippany, New Jersey, San Diego,
California and Greenwich, Connecticut under operating leases expiring in
November 2006, January 1998 and October 2004, respectively.

47
<PAGE> 48

In addition, the Company owns a 30% interest in a water treatment plant adjacent
to its Puerto Rico processing plant.

TRADEMARKS

The Company owns a number of registered trademarks, including Chef
Boyardee, Bumble Bee, PAM, Franklin Crunch 'n Munch, Polaner, Gulden's, Jiffy
Pop, Dennison's, Luck's, Ranch Style, Ro*Tel, Campfire, Marshmallow Munchie and
G. Washington's. Registration of the Chef Jr. trademark is pending. Wheatena,
Maypo and Maltex are registered trademarks licensed to the Company. Management
is not aware of any fact that would have a materially adverse impact on the
continuing use of these trademarks. See "Risk Factors -- Trademarks."

EMPLOYEES

As of November 1, 1997, the Company employed approximately 6,700 people.
Approximately 45% of the Company's employees are unionized. Approximately 50% of
the unionized employees are represented by the United Food & Commercial Workers
International Union (part of the AFL-CIO) and have collective bargaining
agreements which extend into the year 2001. Approximately 14% of the unionized
employees are represented by the Teamsters Union and have recently renegotiated
collective bargaining agreements. During the negotiation in July 1997, the
Teamsters Union employees went on strike for six days. The strike was resolved
and a new collective bargaining agreement that expires March 31, 2001 was
entered into on terms satisfactory to the Company. The Company is not aware of
any pending or threatened National Labor Relations Board arbitration proceedings
relating to the strike.

CERTAIN LEGAL AND REGULATORY MATTERS

Food Safety and Labeling. The Company is subject to the Food, Drug and
Cosmetic Act and regulations promulgated thereunder by the FDA. This
comprehensive regulatory program governs, among other things, the manufacturing,
composition and ingredients, labeling, packaging and safety of food. For
example, the FDA regulates manufacturing practices for foods through its current
"good manufacturing practices" regulations and specifies the recipes for certain
foods. In addition, the Nutrition Labeling and Education Act of 1990 prescribes
the format and content of certain information required to appear on the labels
of food products. The Company is subject to regulation by certain other
governmental agencies, including the U.S. Department of Agriculture. Although
the Company has voluntarily recalled products from time to time in the past, no
such recall has had a material effect on the Company's results of operations.

The operations and products of the Company are also subject to state and
local regulation through such measures as licensing of plants, enforcement by
state health agencies of various state standards and inspection of facilities.
Enforcement actions for violations of federal, state and local regulations may
include seizure and condemnation of products, cease and desist orders,
injunctions or monetary penalties. Management believes that the Company's
facilities and practices are sufficient to maintain compliance with applicable
government regulations, although there can be no assurances in this regard.

Federal Trade Commission. The Company is subject to certain regulations by
the FTC. Advertising of the Company's products is subject to regulation by the
FTC pursuant to the Federal Trade Commission Act and the regulations promulgated
thereunder.

Employee Safety Regulations. The Company is subject to certain health and
safety regulations, including regulations issued pursuant to the Occupational
Safety and Health Act. These regulations require the Company to comply with
certain manufacturing, health and safety standards to protect its employees from
accidents.

Environmental. The Company's operations and properties are subject to a
wide variety of increasingly complex and stringent federal, state and local laws
and regulations governing the use, storage, handling, generation, treatment,
emission, release, discharge and disposal of certain materials, substances and
wastes,

48
<PAGE> 49

the remediation of contaminated soil and groundwater, and the health and safety
of employees. As such, the nature of the Company's operations exposes it to the
risk of claims with respect to environmental matters.

The Company has been named as a potentially responsible party (a "PRP") at
two federal Superfund sites. At both sites, the Company has accepted de minimus
settlement offers from the EPA. One such settlement offer has been paid and the
Company expects to pay the other such settlement offer in late 1997.

In April 1997, the Company received an estimate from an independent
environmental consultant in connection with potential clean-up costs at its
facilities (other than those facilities utilized in the Bumble Bee Business).
Such consultant estimated clean-up costs to be between $500,000 and $5.0
million. In 1995, the water treatment plant in Mayaguez, Puerto Rico that is 30%
owned by the Company entered into a consent decree pursuant to which it agreed
to implement remedial capital improvements to improve its waste-water discharge.
The Company will be responsible for 30% of the costs of these improvements,
which are not expected to be material to the Company. Based upon its experience
to date, the Company believes that the future cost of compliance with existing
environmental laws, regulations and decrees, and liability for known
environmental claims, will not have a material adverse effect on the Company's
financial statements as a whole. However, future events, such as changes in
existing laws and regulations or their interpretation, and more vigorous
enforcement policies of regulatory agencies, may give rise to additional
expenditures or liabilities that could be material.

Insurance. The Company maintains general liability, product liability,
property, workers' compensation and other insurance in amounts and on terms that
it believes are customary for companies similarly situated. The Company does not
generally maintain insurance for product liability claims.

Litigation. The Company, in the ordinary course of business, is involved in
various legal proceedings. The Company does not believe the outcome of these
proceedings will have a material adverse effect on the Company's financial
condition or results of operations.

49
<PAGE> 50

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table provides information concerning the directors and
executive officers of the Company.

<TABLE>
<CAPTION>
NAME AGE POSITION
<S> <C> <C>
C. Dean Metropoulos.......... 50 Chairman of the Board and Chief Executive Officer
John H. Bess................. 45 President and Chief Operating Officer
William J. Feeney............ 45 Executive Vice President
N. Michael Dion.............. 40 Senior Vice President and Chief Financial Officer
Christopher J. Guida......... 36 Senior Vice President -- Grocery Field Sales
Michael Larney............... 40 Senior Vice President and General Manager -- Chef
Boyardee
Gerardo I. Lopez............. 38 Senior Vice President and General Manager --
Southwestern Cuisine
M. Kelley Maggs.............. 45 Senior Vice President and General Counsel
John Sottile................. 43 Senior Vice President and General Manager --
Specialty Brands
Frank Valdez................. 46 Senior Vice President and General Manager --
Operations
Stephen Van Tassell.......... 41 Senior Vice President and General Manager -- Snack
Foods
Lynne M. Misericordia........ 34 Treasurer
Thomas O. Hicks.............. 51 Director
L. Hollis Jones.............. 43 Director
Michael J. Levitt............ 38 Director
M. L. Lowenkron.............. 66 Director
Alan B. Menkes............... 38 Director
Roger T. Staubach............ 55 Director
Charles W. Tate.............. 52 Director
</TABLE>

Executive officers of the Company are appointed by the Board of Directors
and serve at the Board's discretion. A brief biography of each director and
executive officer follows:

C. Dean Metropoulos has served as Chairman of the Board of Directors and
Chief Executive Officer of the Company since November 1996. Mr. Metropoulos is
the Chief Executive Officer of C. Dean Metropoulos & Co., a management services
company and Morningstar. From 1983 through 1993, Mr. Metropoulos served as
President and Chief Executive Officer of Stella. Prior to 1983, Mr. Metropoulos
served in several executive positions with GTE Corporation, including Vice
President and General Manager-Europe, and Vice President and Controller-GTE
International. Mr. Metropoulos also serves as a director of Morningstar and
Ghirardelli Chocolate Company ("Ghirardelli").

John H. Bess joined the Company in September 1997 as President and Chief
Operating Officer. From 1975 until joining the Company, Mr. Bess held numerous
positions with Procter & Gamble, most recently serving as Vice President and
Managing Director of Worldwide Strategic Planning. Mr. Bess is a graduate of
Clark University and received an M.B.A. in marketing from New York University.

William J. Feeney has been the Company's Executive Vice President since
January 1997. From January 1997 to September 1997, Mr. Feeney managed day-to-day
operations of the Company. He has been with the Company for 25 years, primarily
in sales management, as well as senior positions in marketing. Mr. Feeney
received his A.A.S. from the State University of New York.

N. Michael Dion joined the Company as a Senior Vice President and its Chief
Financial Officer in December 1996. Prior to joining the Company, Mr. Dion
served as the Vice President of Finance for C. Dean Metropoulos & Co. and for
LBJ Holdings, Inc., a Connecticut based baking company. Mr. Dion also served as

50
<PAGE> 51

a financial advisor to Morningstar and to Ghirardelli. Prior to joining
Metropoulos & Co., Mr. Dion was the Vice President of Finance for Stella from
1990 through December 1994. Mr. Dion is a Certified Public Accountant and holds
a B.S. in Business Administration and Finance and Accounting from the University
of Vermont.

Christopher J. Guida has served as the Company's Senior Vice
President -- Grocery Field Sales since November 1996. He joined the Company in
1984. His experience at the Company includes field and broker sales management,
sales training and customer service positions. Mr. Guida received his B.A.
degree from Oaklava University.

Michael Larney joined the Company in 1979 and has served as the Company's
Senior Vice President & General Manager -- Chef Boyardee since November 1996.
From 1979 to 1996, Mr. Larney worked in the Company's grocery field sales
division. Mr. Larney received his B.A. from the University of Connecticut.

Gerardo I. Lopez has served as Senior Vice President & General
Manager -- Southwestern Cuisine since April 1997. Before joining the Company,
Mr. Lopez held a variety of positions, including Area Vice President for
Frito-Lay, at Pepsico from 1986 to 1996. Mr. Lopez graduated with a M.B.A. from
Harvard University and a B.B.A. from George Washington University.

M. Kelley Maggs joined the Company as Senior Vice President and General
Counsel in November 1996. Prior to joining the Company, Mr. Maggs served as Vice
President, Secretary and General Counsel for Stella Foods, Inc. from 1993
through 1996. Before joining Stella he was in private law practice from 1979
through 1993. Mr. Maggs holds a B.A. from Niagara University and a J.D. from
George Mason University.

John Sottile joined the Company in December 1996 as Senior Vice President &
General Manager -- Specialty Brands. Mr. Sottile worked as a Senior Vice
President at Stella from 1989 to 1995. In addition, Mr. Sottile's experience
includes marketing and general management at Joseph E. Seagram & Sons and Kraft
Foods. Mr. Sottile received his M.B.A. from Fordham University.

Frank Valdez joined the Company in September 1997 as Senior Vice President
& General Manager -- Operations. Prior to coming to the Company, Mr. Valdez was
President and Chief Operating Officer for USA Detergents, Inc. from 1995 to
1997. Mr. Valdez served in various positions, including Director of
Manufacturing, with Reckett & Coleman from 1990 to 1995. Mr. Valdez graduated
from the University of Pennsylvania with a M.B.A. and the University of Maryland
with a B.B.A.

Stephen Van Tassel has been the Company's Senior Vice President and General
Manager -- Snack Foods since August 1, 1996. He joined the Company in 1992, and
before becoming Senior Vice President, held various positions with the Company,
primarily in product management. Before joining the Company, Mr. Van Tassel held
positions with General Mills and ConAgra. Mr. Van Tassel received his B.A. from
Bowdoin College and his M.B.A. from Dartmouth College.

Lynne M. Misericordia has been employed with the Company since August 1985
and was named Treasurer of the Company in November 1996. Ms. Misericordia has
held several other financial positions in the Company since 1992. From 1988 to
1992 she held positions in American Home Products's compliance and finance
departments. Ms. Misericordia received her B.A. from Babson College.

Thomas O. Hicks has been a Director of the Company since November 1996. Mr.
Hicks has been Chairman and Chief Executive Officer of Hicks Muse since
co-founding the firm in 1989. Prior to forming Hicks Muse, Mr. Hicks co-founded
Hicks & Haas Incorporated in 1983 and served as its Co-Chairman and Co-Chief
Executive Officer through 1989. Mr. Hicks also serves as a director of
Chancellor Media Corporation, Berg Electronics Corp., Sybron International
Corporation, Capstar Broadcasting Corporation, CorpGroup Limited, CCI Holdings
and Grupo MVS, S.A. de C.V.

L. Hollis Jones became a Director of the Company on January 3, 1997. Since
August of 1995, Mr. Jones has been the President and Chief Operating Officer of
Morningstar. From January 1994 until July 1995, Mr. Jones was President of his
own management consulting firm, Hollis Jones, Inc. From February 1983 until
forming his own management consulting firm, Mr. Jones held various positions of
increasing responsibility at Campbell Taggart, Inc., a subsidiary of
Anheuser-Busch, including Vice President-General Manager of its

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<PAGE> 52

bakery division from June 1992 to January 1994 and President of its diversified
division from June 1991 to June 1992.

Michael J. Levitt has been a Director of the Company since November 1996.
Mr. Levitt is a Managing Director and Principal of Hicks Muse. Before joining
Hicks Muse, Mr. Levitt was a Managing Director and Deputy Head of Investment
Banking with Smith Barney Inc. from 1993 through 1995. From 1986 through 1993,
Mr. Levitt was with Morgan Stanley & Co. Incorporated, most recently as a
Managing Director responsible for the New York based Financial Entrepreneurs
Group. Mr. Levitt also serves as a director of Atrium Companies, Inc., Sunrise
Television Corp. and Ghirardelli.

M. L. Lowenkron has been a Director of the Company since November 1996.
From January 1995 through June 1996, Mr. Lowenkron served as President and Chief
Executive Officer of G. Heileman Brewing Co. Mr. Lowenkron served as Chairman of
the Board and Chief Executive Officer of A&W Brands, Inc. ("A&W") from December
1991 to October 1993, and served as President of A&W and its predecessors from
1980 to December 1991. Mr. Lowenkron serves as a Director of Hat Brands, Inc.,
and Depuy Inc. Mr. Lowenkron also serves as First Vice Chairman of the National
Easter Seal Society.

Alan B. Menkes has been a Director of the Company since November 1996. Mr.
Menkes is a Managing Director and Principal of Hicks Muse. Before joining Hicks
Muse in 1992, Mr. Menkes was employed by The Carlyle Group, a Washington
D.C.-based private investment firm, most recently as a Senior Vice President.
Mr. Menkes also serves as a director of Hedstrom Holdings, Inc. Mr. Menkes also
serves as a vice president and assistant secretary of the Company.

Roger T. Staubach has been a Director of the Company since November 1996.
Since 1983, Mr. Staubach has served as the Chairman and Chief Executive Officer
of The Staubach Company, a diversified real estate company. Mr. Staubach also
serves as a director of Halliburton Company, Brinker International, Inc., and
Columbus Realty Trust, and as a trustee of American AAdvantage Funds.

Charles W. Tate has been a Director of the Company since November 1996. Mr.
Tate is President of Hicks Muse, which he joined as Managing Director and
Principal in 1991. Prior to that date, Mr. Tate was with Morgan Stanley & Co.
Incorporated from 1972 where he was Managing Director in both its Merchant
Banking Division and Mergers and Acquisitions Department. Mr. Tate also serves
as a director of The Morningstar Group, Inc., International Wire Group, Inc.,
Berg Electronics Corp., DESA Holdings Corporation, Seguros Comercial America,
S.A. de C.V., Vidrio Formas, S.A. de C.V. and Mandeville Cable Partners
Argentina I.

ELECTION AND COMMITTEES OF DIRECTORS

Each of the directors of the Company was appointed by Hicks Muse at the
time of, or shortly after, the IHF Acquisition. The Board of Directors has been
reclassified into three classes. The directors of each class are elected for
three-year terms, with the terms of the three classes staggered so that
directors from a single class are elected at each annual meeting of the
stockholders. Mr. Jones and Mr. Staubach are Class I directors whose terms of
office will expire at the annual meeting of stockholders in 1998; Messrs.
Menkes, Levitt, and Lowenkron are Class II directors whose terms of office will
expire at the annual meeting of stockholders in 1999; and Messrs. Hicks, Tate
and Metropoulos are Class III directors whose terms of office will expire at the
annual meeting of stockholders in 2000.

The Board of the Directors of the Company has three committees: an audit
committee, a compensation committee and an executive committee. The audit
committee's functions include recommending to the Board of Directors the
engagement of the Company's independent public accountants and reviewing with
such accountants the plans for, and the result and scope of, their auditing
engagement. The compensation committee determines the compensation of executive
officers, including bonuses, and administers the Company's Stock Option Plan.
The executive committee is authorized to exercise the powers of the Board of
Directors during the intervals between the meetings of the Board of Directors
and is from time to time delegated certain authority in matters pertaining to
the Company. The audit committee consists of Messrs. Staubach and Lowenkron. The
compensation committee consists of Messrs. Tate, Lowenkron and Staubach. The
executive committee consists of Messrs. Menkes, Metropoulos and Tate.

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<PAGE> 53

COMPENSATION OF EXECUTIVE OFFICERS

The following table sets forth for 1996 and 1995 the compensation awarded
to or earned by each person serving as the Company's chief executive officer
during 1996 and the four most highly compensated executive officers of the
Company other than the Company's chief executive officer at the end of 1996 (the
"Named Executive Officers").

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
ANNUAL COMPENSATION SECURITIES
--------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS COMPENSATION($)(1)
<S> <C> <C> <C> <C> <C>
C. Dean Metropoulos
Chief Executive Officer(2)..... 1996 150,000(7) -- 3,518,342(3) --
1995 -- -- -- --
Kenneth J. Martin
President(4)................... 1996 309,616 1,233,333(8) 1,346,914(3) 9,652
1995 280,000 230,000(5) 30,000 7,528
Stephen Van Tassel
Senior Vice President and
General Manager -- Snack
Foods....................... 1996 179,900 60,000 5,000(3) 5,535
1995 174,800 -- 7,000 6,209
Albert J. Soricelli, Jr.
Senior Vice President of New
Ventures and
International(6)............ 1996 166,904 100,000 10,000(3) 5,446
1995 162,000 -- 10,000 5,767
William J. Feeney
Executive Vice President....... 1996 164,808 120,000 10,000(3) 5,388
1995 155,000 -- 6,000 5,014
</TABLE>

- ---------------

(1) Amounts represent employer contributions to savings and retirement plans.

(2) Mr. Metropoulos commenced his position as Chairman and CEO of the Company on
November 1, 1996 with annual base compensation of $900,000. Effective
September 1, 1997, Mr. Metropoulos receives compensation for his services of
$1,375,000 and is entitled to receive an annual bonus of up to the same
amount. In addition, Mr. Metropoulos receives certain other perquisites,
including reimbursement of country club dues.

(3) Messrs. Metropoulos, Martin, Van Tassel, Soricelli and Feeney were granted
options to acquire 3,518,342, 1,313,514, 0, 0, and 0 shares of Common Stock,
respectively, and 0, 33,400, 5,000, 10,000 and 10,000 shares of American
Home Products common stock, respectively, during 1996. See "Option Grants in
Last Fiscal Year" below.

(4) Mr. Martin resigned from the Company in January 1997. Concurrently with his
resignation, Mr. Martin's options to acquire the Company's stock were
cancelled. Mr. Bess was hired in September 1997 to replace Mr. Martin as
President and Chief Operating Officer. His annual base salary is $300,000
and he is entitled to receive an annual bonus of up to the same amount. In
addition, Mr. Bess is eligible to participate in the Company's benefit
plans. In connection with the hiring of Mr. Bess by the Company, Mr. Bess
was granted options to purchase an aggregate of 469,112 shares of Common
Stock. The exercise price is $10.66 per share. The options vest in equal
increments on each of the first three anniversaries of their grant date and
expire on the tenth anniversary of their date of grant.

(5) Includes cash in the amount of $115,000 and contingent stock of American
Home Products in the amount of $115,000.

(6) Mr. Soricelli's employment with the Company terminated in the fourth quarter
of 1997. None of his options granted by the Company had vested at the time
of termination.

53
<PAGE> 54

(7) Amount represents a management fee paid to Mr. Metropolous.

(8) Amount is comprised of $233,000 paid by American Home Products and
$1,000,000 paid by the Company. The amount paid by the Company will be
reimbursed to the Company in connection with Mr. Martin's resignation.

The following table contains information about stock options granted by the
Company and by American Home Products to the Named Executive Officers in 1996.

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO OPTION TERMS($)(1)
OPTION EMPLOYEES IN EXERCISE PRICE EXPIRATION ---------------------------
NAME GRANTED 1996 PER SHARE DATE(1) 5% 10%
<S> <C> <C> <C> <C> <C> <C>
OPTIONS GRANTED BY THE COMPANY
C. Dean
Metropoulos(2)....... 3,518,342 63.64% $ 5.33 11-01-2006 11,791,774 29,882,671
Kenneth J. Martin(3)... 1,313,514 23.76% 5.33 11-01-2006 4,402,262 11,156,197
Stephen Van Tassel..... -- -- -- -- -- --
Albert J. Soricelli,
Jr.(4)............... -- -- -- -- -- --
William J. Feeney...... -- -- -- -- -- --
OPTIONS GRANTED BY AMERICAN HOME PRODUCTS
C. Dean Metropoulos.... -- -- -- -- -- --
Kenneth J. Martin...... 33,400 0.42% $53.0625 05-23-2006 60,462(5) 121,039(5)
Stephen Van Tassel..... 5,000 * $53.0625 05-23-2006 9,126(5) 18,120(5)
Albert J. Soricelli,
Jr.(4)............... 10,000 0.13% $53.0625 05-23-2006 18,252(5) 36,239(5)
William J. Feeney...... 10,000 0.13% $53.0625 05-23-2006 18,252(5) 36,239(5)
</TABLE>

- ---------------

* Less than 1%.

(1) These gains are based on assumed rates of stock price appreciation of 5% and
10% compounded annually from the date the option was granted through the
expiration date of the options.

(2) The exercise price of Mr. Metropoulos' options was $5.33 per share on the
date of grant, November 1, 1996 and was increased to $6.40 during the third
quarter of 1997. All such options were fully vested on their date of grant.

(3) Mr. Martin resigned from the Company in January 1997. Concurrently with his
resignation, Mr. Martin's options were cancelled.

(4) Mr. Soricelli's employment with the Company terminated in the fourth quarter
of 1997.

(5) The initial expiration of these options was May 23, 2006. By their terms,
however, these options terminated on January 31, 1997. Potential realizable
value amounts represent hypothetical gains that could be achieved for the
options if they had been exercised at the end of such three month period.
These gains are based on assumed rates of stock price appreciation of 5% and
10% from the date the option was granted through January 31, 1997, the
accelerated expiration date of the options.

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<PAGE> 55

The following table provides information about the number of shares of
stock of the Company and of American Home Products issued upon exercises by the
Named Executive Officers during 1996 and the value realized by the Named
Executive Officers. The table also provides information about the number and
value of options exercisable for shares of stock of the Company and of American
Home Products held by the Named Executive Officers at December 31, 1996.

AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 1996 DECEMBER 31, 1996 ($)(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
<S> <C> <C> <C> <C> <C> <C>
OPTIONS OF THE COMPANY
C. Dean Metropoulos.... -- -- 3,518,342 -- 47,849,451 --
Kenneth J. Martin(2)... -- -- -- 1,313,514 -- 19,269,250
Stephen Van Tassel..... -- -- -- -- -- --
Albert J. Soricelli,
Jr.(4)............... -- -- -- -- -- --
William J. Feeney...... -- -- -- -- -- --
OPTIONS OF AMERICAN HOME
PRODUCTS(3)
C. Dean Metropoulos.... -- -- -- -- -- --
Kenneth J. Martin...... 55,000 982,959 0 -- -- --
Stephen Van Tassel..... 10,400 182,475 1,600 -- 32,800 --
Albert J. Soricelli,
Jr.(4)............... 44,400 1,140,631 3,000 -- 78,094 --
William J. Feeney...... 47,800 1,446,793 11,600 -- 286,125 --
</TABLE>

- ---------------

(1) Based upon a value of the Company's common stock of $20.00 per share and
upon a value of American Home Products common stock of $58.625 per share,
the closing market price on December 31, 1996.

(2) Mr. Martin resigned from the Company in January 1997. Concurrently with his
resignation, Mr. Martin's options were cancelled.

(3) In addition to the amounts set forth in the table above, American Home
Products granted options to Messrs. Martin, Van Tassel, Soricelli and Feeney
in 1996. By their terms, however, these options terminated on January 31,
1997. Messrs. Martin, Van Tassel, Soricelli and Feeney received $271,375,
$40,625, $81,250 and $81,250, respectively, in connection with these
cancellations.

(4) Mr. Soricelli's employment with the Company terminated in fourth quarter of
1997.

COMPENSATION OF CHIEF EXECUTIVE OFFICER

Hicks Muse and C. Dean Metropoulos have established an exclusive
relationship to pursue acquisitions of food companies that Mr. Metropoulos will
manage. Pursuant to an arrangement with Hicks Muse, Mr. Metropoulos is
compensated for his services directly by the companies he manages. Effective
September 1, 1997, Mr. Metropoulos receives from the Company annual compensation
for his services of $1,375,000 and is entitled to receive an annual bonus of up
to the same amount. In addition, Mr. Metropoulos receives an equity position,
typically in the form of stock options, in the companies he manages. At the time
of the IHF Acquisition, Mr. Metropoulos was granted options to acquire 3,518,342
shares of Common Stock presently exercisable at $6.40 per share. In addition,
during the fourth quarter of 1997 Mr. Metropoulos was granted options to acquire
100,398 shares of Common Stock at an exercise price of $12.79 per share.

MANAGEMENT BONUSES

Management and certain employees are eligible to receive annual bonuses.
The compensation committee of the Board of Directors determines the amount of
such bonuses.

55
<PAGE> 56

BENEFIT PLANS

Stock Option Plan. The Stock Option Plan gives certain individuals and key
employees of the Company who are responsible for the continued growth of the
Company an opportunity to acquire a proprietary interest in the Company, and
thus to create in such persons an increased interest in and a greater concern
for the welfare of the Company. The Stock Option Plan provides for the grant of
options to acquire up to 8,444,021 shares of Common Stock. Grants of stock
options with respect to 7,645,253 shares of Common Stock have been made under
the Stock Option Plan.

The Stock Option Plan is administered by the Company's compensation
committee, which is currently comprised of Messrs. Tate, Lowenkron and Staubach.
The compensation committee has authority, subject to the terms of the Stock
Option Plan (including the formula grant provisions and the provisions relating
to incentive stock options contained therein), to determine when and to whom to
make grants or awards under the Stock Option Plan, the number of shares to be
covered by the grants or awards, the types and terms of the grants and awards,
and the exercise price of stock options. Moreover, the compensation committee
will have the authority, subject to the provisions of the Stock Option Plan, to
establish such rules and regulations as it deems necessary for the proper
administration of the Stock Option Plan and to make such determinations and
interpretations and to take such action in connection with the Stock Option Plan
and any grants and awards thereunder as it deems necessary or advisable. The
compensation committee's determinations and interpretations under the Stock
Option Plan are final, binding and conclusive on all participants and need not
be uniform and may be made by the compensation committee selectively among
persons who receive, or are eligible to receive, grants and awards under the
Stock Option Plan.

Grants of "incentive stock options" within the meaning of section 422 of
the Internal Revenue Code of 1986, as amended (the "Code") and non-qualified
stock options (options which do not qualify under section 422 of the Code) may
be made under the Stock Option Plan to key employees. Grants of non-qualified
stock options may be made to eligible non-employees (as defined in the Stock
Option Plan).

The exercise price per share of Common Stock under each option is fixed by
the compensation committee on the date of grant; provided, however, that the
exercise price of an incentive stock option granted to a person who, at the time
of grant, owns shares of the Company which possessing more than 10% of the total
combined voting power of all classes of stock of the Company may not be less
than 110% of the fair market value of a share of Common Stock on the date of
grant. No option is exercisable after the expiration of ten years from the date
of grant, unless, as to any non-qualified stock option, otherwise expressly
provided in the option agreement; provided, however, that no incentive stock
option granted to a person who, at the time of grant, owns stock of the Company
possessing more than 10% of the total combined voting power of all classes of
stock of the Company is exercisable after the expiration of five years from the
date of grant.

In the event of a change of control or sale of the Company, all outstanding
stock options may, subject to the sole discretion of the compensation committee,
become exercisable in full at such time or times as the compensation committee
may determine. Each stock option accelerated by the compensation committee would
terminate on such date (not later than the stated exercise date) as the
compensation committee determines.

Unless an option or other agreement provides otherwise, upon the date of
death of an optionee (or upon the termination of an optionee because of such
optionee's disability), the person who acquires the right to exercise the option
of such optionee (or the optionee in the case of disability) must exercise such
option within 180 days after the date of death (or termination in the case in
disability), unless a longer period is expressly provided in such incentive
stock option or a shorter period is established by the compensation committee,
but in no event after the expiration date of such option. Following an
optionee's termination of employment for cause, all stock options held by such
optionee will immediately be canceled as of the date of termination of
employment. Following an optionee's termination of employment for other than
cause, such optionee must exercise his stock option within 30 days after the
date of such termination, unless a longer period is expressly provided in such
stock option or a shorter period is established by the compensation committee,
provided that no incentive stock option shall be exercisable more than three
months after such termination.

The option exercise price may be paid in cash, or, in the discretion of the
compensation committee, by the delivery of shares of Common Stock then owned by
the participant, or by a combination of these methods.

56
<PAGE> 57

Also, in the discretion of the compensation committee, payment may be made by
delivering a properly executed exercise notice to the Company together with a
copy of irrevocable instructions to a broker to deliver promptly to the Company
the amount of sale or loan proceeds to pay the exercise price.

Except as otherwise expressly provided in any non-qualified stock option,
stock options may be transferred by a participant only by will or by the laws of
descent and distribution and may be exercised only by the participant during his
lifetime.

Retirement Plans. The Company sponsors various retirement plans for
substantially all of its employees. For example, on January 1, 1997, the Company
established defined benefit plans for its salaried and collectively-bargained
employees. In addition, the Company also sponsors a Section 401(k) defined
contribution plan for all non-union employees.

COMPENSATION OF DIRECTORS

Directors who are officers, employees or otherwise affiliates of the
Company do not receive compensation for their services as directors.
Non-employee directors receive an annual retainer of $24,000, plus $3,000 for
attending each meeting of the Board of Directors and $1,000 for attending each
committee meeting. At the option of each director, the compensation may be paid
in the any of three methods: (i) in options granted under the Stock Option Plan,
(ii) in cash, or (iii) one-half in cash and one-half in options. Directors of
the Company are entitled to reimbursement of their reasonable out-of-pocket
expenses in connection with their travel to and attendance at meetings of the
board of directors or committees thereof. In connection with their appointment
as directors, Messrs. Lowenkron and Staubach were each granted non-qualified
stock options under the Stock Option Plan to purchase 18,764 shares of Common
Stock for $5.33 per share and Mr. Jones was granted a non-qualified stock option
under the Stock Option Plan to purchase 1,906 shares of Common Stock for $5.33
per share. These options are fully vested and expire 10 years from their date of
grant.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Board of Directors of the Company has appointed Messrs. Tate
(chairman), Lowenkron, and Staubach as members of its Compensation Committee.
None of the members of the Compensation Committee is or has been an officer or
employee of the Company. Mr. Tate is President of Hicks Muse, which in
connection with the IHF Acquisition beneficially acquired approximately 80% of
the Common Stock. See "Principal Stockholders" and "Certain Relationships and
Related Transactions." Messrs. Lowenkron and Staubach have been granted options
to purchase Common Stock of the Company. See "-- Compensation of Directors."

LIMITATIONS OF LIABILITY AND INDEMNIFICATION MATTERS

The Company's Amended and Restated Certificate of Incorporation provides
that no director of the Company shall be personally liable to the Company or its
stockholders for monetary damages for breach of his fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the Company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) in respect of certain unlawful dividend payments or stock redemptions
or purchases or (iv) for any transaction from which the director derived an
improper personal benefit. The effect of these provisions is to eliminate the
rights of the Company and its stockholders (through stockholders' derivative
suits on behalf of the Company) to recover monetary damages against a director
for breach of fiduciary duty as a director (including breaches resulting from
grossly negligent behavior), except in the situations described above.

The Company has entered into indemnification agreements with each of its
directors and executive officers under which the Company will indemnify the
director or officer to the fullest extent permitted by law, and to advance
expenses, if the director or officer becomes a party to or witness or other
participant in any threatened, pending or completed action, suit or proceeding
(a "Claim") by reason of any occurrence related to the fact that the person is
or was a director, officer, employee, agent or fiduciary of the Company or a
subsidiary of the Company or another entity at the Company's request (an
"Indemnifiable Event"), unless a reviewing party (either outside counsel or a
committee appointed by the Board of Directors) determines that the person would
not be entitled to indemnification under applicable law. In addition, if a
change in control or a potential change in control of the Company occurs and if
the person indemnified so requests, the Company

57
<PAGE> 58

will establish a trust for the benefit of the indemnitee and fund the trust in
an amount sufficient to satisfy all expenses reasonably anticipated at the time
of the request to be incurred in connection with any Claim relating to an
Indemnifiable Event. The reviewing party will determine the amount deposited in
the trust. An indemnitee's rights under his indemnification agreement will not
be exclusive of any other rights under the Company's Amended and Restated
Certificate of Incorporation or Amended and Restated By-laws or applicable law.

The Company believes that these provisions and agreements will assist the
Company in attracting and retaining qualified individuals to serve as directors
and officers.

58
<PAGE> 59

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of the date hereof by (i) each person
the Company knows to be the beneficial owner of 5% or more of the outstanding
shares of Common Stock, (ii) each Named Executive Officer, (iii) each director
of the Company, (iv) all executive officers and directors of the Company as a
group and (v) the Selling Stockholder. Except as indicated in the footnotes to
this table and pursuant to applicable community property laws, the Company
believes that each stockholder named in this table has sole investment and
voting power with respect to the shares set forth opposite such stockholder's
name.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES SHARES BENEFICIALLY
OWNED PRIOR TO THE BEING OWNED AFTER THE
OFFERING(1) OFFERED OFFERING(1)
--------------------- ------------ ---------------------
BENEFICIAL OWNER NUMBER PERCENT NUMBER NUMBER PERCENT
<S> <C> <C> <C> <C> <C>
Hicks Muse Parties(2).................... 43,819,382 67.4% 43,819,382 58.0%
c/o Hicks, Muse, Tate & Furst
Incorporated
200 Crescent Court, Suite 1600
Dallas, Texas 75201
AHP Subsidiary Holding Corporation(3).... 12,384,564 19.0% 3,096,141 9,288,423 12.3%
Five Giralda Farms
Madison, New Jersey 07940
State Treasurer of the State of
Michigan(4)............................ 3,720,061 5.7% 3,720,061 4.9%
Bureau of Investments
430 W. Allegan
Lansing, Michigan 48922
C. Dean Metropoulos(5)................... 3,806,729 5.5% 3,806,729 4.8%
1633 Littleton Road
Parsippany, New Jersey 07054
Kenneth J. Martin........................ -- -- -- --
Stephen Van Tassel(6).................... 31,274 * 31,274 *
Albert J. Soricelli, Jr.................. 18,506 * 18,506 *
William J. Feeney(7)..................... 80,794 * 80,794 *
Thomas O. Hicks(2)....................... 43,819,382 67.4% 43,819,382 58.0%
M.L. Lowenkron(8)........................ 37,563 * 37,563 *
Roger T. Staubach(9)..................... 37,327 * 37,327 *
L. Hollis Jones(10)...................... 3,853 * 3,853 *
Charles W. Tate(11)...................... -- -- -- --
Alan B. Menkes(11)....................... -- -- -- --
Michael J. Levitt(11).................... -- -- -- --
All executive officers and directors as a
group (20 persons)(12)................. 48,002,556 69.7% 48,002,556 60.4%
</TABLE>

- ---------------

* Less than 1%.

(1) Shares beneficially owned and percentage of ownership are based on
65,050,237 shares of Common Stock outstanding before the Offering and
75,576,596 shares of Common Stock outstanding after the Offering.
Beneficial ownership is determined in accordance with the rules of the SEC
and generally includes voting or disposition power with respect to
securities.

(2) Includes (i) 42,092,465 shares owned of record by Hicks, Muse, Tate & Furst
Equity Fund III L.P., a limited partnership of which the ultimate general
partner is Hicks, Muse Fund III Incorporated ("Fund III Inc."); (ii)
1,515,784 shares owned of record by HM/3 Coinvestors, L.P., a limited
partnership of which the ultimate general partner is Fund III Inc.; and
(iii) 211,133 shares owned of record by HM3/IH Partners L.P., a limited
partnership of which the ultimate general partner is Fund III Inc. Thomas
O. Hicks is a controlling stockholder of Fund III Inc. and serves as Chief

59
<PAGE> 60

Executive Officer, Chief Operating Officer, President, Secretary and Chairman of
the Board of Fund III Inc. Accordingly, Mr. Hicks may be deemed to be the
beneficial owner of the Common Stock held by Hicks, Muse, Tate & Furst Equity
Fund III, L.P., HM/3 Coinvestors, L.P., and HM3/IH Partners, L.P. Mr. Hicks
disclaims beneficial ownership of the shares of Common Stock not owned of
record by him.

(3) AHP Subsidiary Holding Corporation is a subsidiary of American Home
Products. In the event the U.S. Underwriters' over-allotment option is
exercised in full, AHP Subsidiary Holding Corporation will sell an
additional 464,421 shares of Common Stock.

(4) The State Treasurer of the State of Michigan holds the shares as custodian
for the Michigan Public School Employees' Retirement System, the Michigan
State Employees' Retirement System, the Michigan State Police Retirement
System, and the Michigan Judges Retirement System.

(5) Includes 3,618,740 shares issuable to Mr. Metropoulos upon the exercise of
stock options that are currently exercisable.

(6) Includes 31,274 shares subject to stock options that are exercisable within
60 days. Excludes 62,548 shares subject to stock options that are not
exercisable within 60 days.

(7) Includes 43,783 shares subject to stock options that are exercisable within
60 days. Excludes 87,568 shares subject to stock options that are not
exercisable within 60 days.

(8) Includes 18,764 shares issuable upon the exercise of stock options that are
currently exercisable.

(9) Includes 18,764 shares issuable upon the exercise of stock options that are
currently exercisable.

(10) Includes 1,973 shares issuable upon the exercise of stock options that are
currently exercisable.

(11) Messrs. Tate, Menkes, and Levitt are officers of Fund III Inc. None of Mr.
Tate, Mr. Menkes or Mr. Levitt has the power to vote or dispose the common
stock of Fund III Inc.

(12) Includes 3,883,412 shares issuable upon the exercise of stock options that
are currently exercisable or exercisable within 60 days.

60
<PAGE> 61

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The descriptions set forth below do not purport to be complete and are
qualified in their entirety by reference to the applicable agreements.

THE IHF ACQUISITION AND RELATED AGREEMENTS

Effective on November 1, 1996, an affiliate ("Hicks Muse Holding") of Hicks
Muse acquired 80% of the outstanding capital stock of the Company from American
Home Products for approximately $1,225.6 million in cash in a transaction
treated as a recapitalization for financial accounting purposes. Concurrently
with this acquisition, the Company acquired all of the outstanding capital stock
of Heritage from an affiliate of Hicks Muse for approximately $70.8 million in
cash, comprised of approximately $40.8 million used to repay existing
indebtedness of Heritage and approximately $30.0 million to acquire the equity
of Heritage. The acquisition of Heritage was treated as a purchase for financial
accounting purposes. The purchase price for Heritage was determined by the
Company based upon the historic operations of Heritage and the benefits the
Company believes will be realized from its acquisition. Heritage was formed in
1994 by the Hicks Muse affiliate to acquire (i) the Campfire marshmallow
business from Borden, Inc. for approximately $5.0 million and (ii) Angela
Maries', Inc., a manufacturer of marshmallow rice crisp bars for approximately
$35.0 million. In connection with the acquisition of the Company by an affiliate
of Hicks Muse and the acquisition by the Company of Heritage, the Company
incurred approximately $1,070.0 million of indebtedness, consisting of $670.0
million of borrowings under the Senior Bank Facilities and the issuance of
$400.0 million of aggregate principal amount of the Senior Subordinated Notes.

In connection with the IHF Acquisition, Hicks Muse Holding, American Home
Products and the Company agreed that, for so long as American Home Products
beneficially owns at least five percent of the common stock of the Company,
Hicks Muse Holding and the Company will, at the request of American Home
Products, use all reasonable efforts to cause there to be nominated and elected
to the Board of Directors of the Company one designee of American Home Products.

Until the earlier of (i) November 1, 2001 and (ii) the date on which a
third party acquires control of the Company, without the consent of Hicks Muse
Holding, American Home Products has agreed not to sell or otherwise dispose of
any of the Common Stock it holds without first notifying Hicks Muse Holding and
affording Hicks Muse Holding an opportunity to offer to buy the shares on terms
proposed by Hicks Muse Holding. In the event that American Home Products rejects
Hicks Muse Holding's offer, American Home Products will be permitted to sell not
less than 90% of the shares it proposed to sell in its notice to Hicks Muse
Holding to a third party on per share terms no less favorable to American Home
Products than those set forth in Hicks Muse Holding's offer; provided that,
before selling such shares at a price per share less than 110% of the price per
share set forth in Hicks Muse Holding's offer, American Home Products will be
required to offer to sell such shares to Hicks Muse Holding at such higher price
per share. These restrictions on transfer will not apply to a sale of shares by
American Home Products under a registration statement filed under the Securities
Act or under Rule 144 under the Securities Act.

Hicks Muse Holding has agreed that, if it proposes to sell or dispose of
shares of Common Stock in a single transaction or series of related
transactions, then it will offer to include in the proposed sale or disposition
a designated number of shares held by American Home Products not to exceed the
product of (i) the number of shares to be sold by Hicks Muse Holding to the
proposed transferee multiplied by (ii) a fraction the numerator of which is the
number of shares held by American Home Products and the denominator of which is
the number of shares held by each of Hicks Muse Holding and American Home
Products in the aggregate. If American Home Products accepts the offer, Hicks
Muse Holdings must reduce, to the extent necessary, the number of shares it
otherwise would have sold in the proposed sale so as to permit American Home
Products to sell the number of shares that it is entitled to sell under the
foregoing terms. American Home Products' "co-sale" rights described above do not
apply to (i) a sale pursuant to a public offering registered under the
Securities Act, (ii) a sale in accordance with Rule 144 under the Securities
Act, (iii) a sale to an affiliate of Hicks Muse or (iv) a sale or sales in a
single transaction or series of related transactions which, in the aggregate, do
not involve more than ten percent of the shares outstanding.

61
<PAGE> 62

In connection with the Offering, Hicks Muse Holding has distributed to its
stockholders all of the shares of Common Stock held by it, subject to certain
terms of the agreements with American Home Products.

REGISTRATION RIGHTS AGREEMENT

American Home Products, Hicks Muse Holding and the Company have entered
into a Registration Rights Agreement under which each of American Home Products
and Hicks Muse Holding is entitled to exercise three demand and seven
"piggy-back" rights to require the Company to register the common stock of the
Company held by them for sale under the Securities Act. The demand rights may
only be exercised commencing six months after the date of this Prospectus. In
addition, the demand rights may only be exercised with respect to a number of
shares that is at least equal to the lesser of (i) five percent of the number of
shares then outstanding and (ii) that number of shares having an estimated
aggregate offering price of at least $20 million. The exercise of the demand and
piggy-back rights are subject to such other limitations and conditions as are
customary in registration rights agreements. American Home Products has
exercised one of its piggy-back rights in electing to participate in this
Offering.

MONITORING AND OVERSIGHT AGREEMENT

In November 1996, the Company entered into a ten-year agreement (the
"Monitoring and Oversight Agreement") with an affiliate of Hicks Muse ("Hicks
Muse Partners") pursuant to which the Company will pay Hicks Muse Partners an
annual fee of $1.0 million for oversight and monitoring services to the Company.
The annual fee is adjustable at the end of each fiscal year to an amount equal
to 0.1% of the consolidated net sales of the Company, but in no event may the
fee be less than $1.0 million. Messrs. Hicks, Tate, Menkes and Levitt, directors
of the Company, are each principals of Hicks Muse Partners. In addition, the
Company has agreed to indemnify Hicks Muse Partners, its affiliates and
shareholders, and their respective directors, officers, agents, employees and
affiliates from and against all claims, actions, proceedings, demands,
liabilities, damages, judgments, assessments, losses and costs, including fees
and expenses, arising out of or in connection with the services rendered by
Hicks Muse Partners thereunder. The Monitoring and Oversight Agreement makes
available the resources of Hicks Muse Partners concerning a variety of financial
and operational matters. The services that have been and will continue to be
provided by Hicks Muse Partners could not otherwise be obtained by the Company
without the addition of personnel or the engagement of outside professional
advisors. In management's opinion, the fees provided for under the Monitoring
and Oversight Agreement reasonably reflect the benefits received and to be
received by the Company.

FINANCIAL ADVISORY AGREEMENT

In November 1996, the Company entered into an agreement (the "Financial
Advisory Agreement") pursuant to which Hicks Muse Partners provides services as
financial advisor to the Company. Pursuant to the Financial Advisory Agreement,
Hicks Muse Partners is entitled to receive a fee equal to 1.5% of the
"transaction value" (as defined) for each "add-on transaction" (as defined) in
which the Company is involved. The term "transaction value" means the total
value of any add-on transaction, including, without limitation, the aggregate
amount of the funds required to complete the add-on transaction (excluding any
fees payable pursuant to the Financial Advisory Agreement and any fees, if any,
paid to any other person or entity for financial advisory, investment banking,
brokerage or any other similar services rendered in connection with such add-on
transaction) and including the amount of any indebtedness, preferred stock or
similar items assumed (or remaining outstanding). The term "add-on transaction"
means any future proposal for a tender offer, acquisition, sale, merger,
exchange offer, recapitalization, restructuring or other similar transaction
directly or indirectly involving the Company or any of its subsidiaries and any
other person or entity. The Financial Advisory Agreement makes available the
resources of Hicks Muse Partners concerning a variety of financial and
operational matters. The services that have been and will continue to be
provided by Hicks Muse Partners could not otherwise be obtained by the Company
without the addition of personnel or the engagement of outside professional
advisors. In management's opinion, the fees provided for under the Financial
Advisory Agreement reasonably reflect the benefits received and to be received
by the Company.

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The Company has paid Hicks Muse Partners financial advisory fees of
approximately $22.2 million since November 1, 1996.

PRODUCTOS DEL MONTE

On October 1, 1997, the Company acquired Productos Del Monte from an
affiliate of Hicks Muse for 3,127,415 shares of Common Stock. Productos Del
Monte is a leading manufacturer and marketer of branded catsup, canned
vegetables and bottled salsa in Mexico. Productos Del Monte was acquired by a
Hicks Muse affiliate in October 1996 from the Del Monte Corporation for
approximately $40.0 million. The affiliate of Hicks Muse has filed a lawsuit
against the Del Monte Corporation claiming damages in connection with its
acquisition of Productos Del Monte based upon breaches of representations and
warranties contained in the acquisition agreement. In connection with the
acquisition of Productos Del Monte by the Company, the Company will succeed to
the rights of the Hicks Muse affiliate under that lawsuit. Management plans to
leverage the infrastructure of Productos Del Monte as a platform to launch the
Company's southwestern cuisine, cooking spray, canned pasta products and canned
seafood products into Mexico. The purchase price for Productos Del Monte was
determined by the Company based upon the historic operations of Productos Del
Monte and the benefits the Company believes will be realized from its
acquisition. There can be no assurance, however, that these benefits will be
realized. The acquisition of Productos Del Monte was treated as a combination of
entities under common control. Accordingly, the historical accounting values of
Productos Del Monte were carried over for financial accounting purposes. In the
nine months ended September 30, 1997, the Company had sold approximately $0.3
million of Ranch Style beans and PAM cooking spray to Productos Del Monte. These
sales were made at the Company's cost plus 10%.

C. DEAN METROPOULOS & CO.

C. Dean Metropoulos serves as an executive officer of the Company. Mr.
Metropoulos and certain employees of the Company, including Mr. Metropoulos'
brother, Evan Metropoulos, are also principals of C. Dean Metropoulos & Co., a
food company management firm. In this capacity, these individuals provide
management services for Morningstar and Ghirardelli, an affiliate of Hicks Muse.
The Company is reimbursed for the actual costs of these services, as well as the
actual cost of the overhead of the Company incurred in connection therewith. In
the nine months ended September 30, 1997, the Company had been reimbursed $0.3
million pursuant to this arrangement.

FORMER AMERICAN HOME PRODUCTS ARRANGEMENTS

Prior to the IHF Acquisition, the Company was a wholly-owned subsidiary of
American Home Products. The Company was provided certain administrative services
and other benefits directly by American Home Products, or charged a pro-rata
share of American Home Products' costs for obtaining these services and benefits
from third parties. These services and benefits included (i) treasury, tax,
legal, environmental, safety, public relations, advertising, audit and other
administrative services, (ii) employee group health, auto, property, product
liability and other insurance coverages, (iii) corporate office space and (iv)
pension plans, post retirement benefits, and defined contribution plans. During
1996, 1995 and 1994 American Home Products charged the Company approximately
$65.5 million, $65.4 million and $55.5 million, respectively, for these services
and other benefits. In connection with the IHF Acquisition, the Company and
American Home Products entered into a six month transitional services agreement
for the continued provision of certain of these services and other benefits for
an aggregate payment of $150,000.

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DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of 300,000,000 shares
of common stock, $0.01 par value per share ("Common Stock"), and 100,000,000
shares of preferred stock, $0.01 par value per share ("Preferred Stock"). Upon
completion of the Offering, 75,576,596 shares of Common Stock will be issued and
outstanding (77,155,550 shares if the U.S. Underwriters exercise their
over-allotment option in full) and no shares of Preferred Stock will be issued
and outstanding. As of November 1, 1997, the Company had outstanding 65,050,237
shares of Common Stock held of record by 31 stockholders.

COMMON STOCK

The rights of the holders of Common Stock are identical in all respects.
All of the shares of Common Stock are validly issued, fully paid and
nonassessable.

The holders of the Common Stock are entitled to one vote for each share
held on all matters submitted to a vote of common stockholders. The shares of
Common Stock do not have cumulative voting rights. Shares of Common Stock have
no preemptive rights, conversion rights, redemption rights or sinking fund
provisions. The Common Stock is not subject to redemption by the Company. All
shares of Common Stock issued in the Offering will be validly issued, fully paid
and nonassessable.

Subject to the rights of the holders of any class of capital stock of the
Company having preference or priority over the Common Stock, the holders of
Common Stock are entitled to dividends in such amounts as may be declared by the
Board of Directors of the Company from time to time out of funds legally
available for such payments and, in the event of liquidation, to share ratably
in any assets of the Company remaining after payment in full of all creditors
and provision for any liquidation preferences on any outstanding preferred stock
ranking prior to the Common Stock.

PREFERRED STOCK

The Company is authorized to issue 100,000,000 shares of Preferred Stock.
The Board of Directors of the Company, in its sole discretion, may designate and
issue one or more series of Preferred Stock from the authorized and unissued
shares of Preferred Stock. Subject to limitations imposed by law or the
Company's Amended and Restated Certificate of Incorporation, the Board of
Directors of the Company is empowered to determine the designation of and the
number of shares constituting a series of Preferred Stock. In addition, the
Company's Board of Directors may designate the dividend rate, the terms and
conditions of any voting and conversion rights, the amounts payable upon
redemption or upon the liquidation, dissolution or winding-up of the Company,
the provisions of any sinking fund for the redemption or purchase of shares, and
the preferences and relative rights among the series of Preferred Stock. Such
rights, preferences, privileges and limitations could adversely effect the
rights of holders of Common Stock.

CERTAIN PROVISIONS OF THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION AND
AMENDED AND RESTATED BYLAWS

The Company's Board of Directors is divided into three classes. The
directors of each class are elected for three-year terms, with the terms of the
three classes staggered so that directors from a single class are elected at
each annual meeting of stockholders. Stockholders may remove a director only for
cause. In general, the Board of Directors, not the stockholders, has the right
to appoint persons to fill vacancies on the Board of Directors.

The Company's Amended and Restated Certificate of Incorporation provides
that stockholders may act only at annual or special meetings of stockholders and
not by written consent. In addition, special meetings of the stockholders, and
any proposals to be considered at such meetings, may be called and proposed
exclusively by the board of directors. The Amended and Restated Certificate of
Incorporation requires the approval by the holders of at least 66 2/3% of the
outstanding voting stock to amend certain of its provisions.

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DELAWARE LAW PROVISIONS

Generally, Section 203 of the General Corporation Law of the State of
Delaware prohibits a publicly held Delaware corporation from engaging in a
"business combination" with an "interested stockholder" for a period of three
years after the date of the transaction in which the person became an interested
stockholder, unless one of the following events occurs: (i) prior to the date of
the business combination, the transaction is approved by the board of directors
of the Company; (ii) upon consummation of the transaction which resulted in the
stockholder becoming an interested stockholder, the interested stockholder owns
at least 85% of the outstanding voting stock; or (iii) on or after such date the
business combination is approved by the board and by the affirmative vote of at
least two-thirds of the outstanding voting stock which is not owned by the
interested stockholder. A "business combination" includes mergers, asset sales
and other transactions resulting in a financial benefit to the stockholder. An
"interested stockholder" is a person who, together with affiliates and
associates, owns (or within three years, did own) 15% or more of the
corporation's voting stock.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is The Bank of New
York.

DESCRIPTION OF INDEBTEDNESS

SENIOR BANK FACILITIES

The description set forth below does not purport to be complete and is
qualified in its entirety by reference to the underlying agreements of the
Senior Bank Facilities, which have been filed as exhibits to the registration
statement of which this Prospectus is a part.

The Chase Manhattan Bank ("Chase"), Bankers Trust Company and Morgan
Stanley Senior Funding, Inc. ("Morgan") are agents of the lenders and lenders to
the Company under the Senior Bank Facilities. The Senior Bank Facilities consist
of (a) a 5 3/4 year Tranche A Senior Secured Term Loan Facility providing for
term loans to the Company in a principal amount of $367.5 million (the "Tranche
A Term Facility"); and (b) an 7 1/4 year Tranche B Senior Secured Term Loan
Facility providing for term loans to the Company in a principal amount of $369.5
million (the "Tranche B Term Facility" and collectively with the Tranche A Term
Facility, the "Term Facilities"); and (c) a Senior Secured Revolving Credit
Facility providing for revolving loans to the Company and the issuance of
letters of credit for the account of the Company in an aggregate principal and
stated amount at any time not to exceed $140.0 million (of which not more than
$30.0 million may be represented by Letters of Credit) (the "Revolving
Facility").

A portion of each Term Facility was drawn on closing of the IHF
Acquisition. The remainder of each Term Facility was drawn as incremental term
loans in connection with the Bumble Bee Acquisition.

Amounts repaid or prepaid under any Term Facility may not be reborrowed.
Loans under the Revolving Facility are available until the earlier of (a) March
31, 2003 (the "Scheduled Revolving Credit Termination Date") and (b) the date on
which the loans under the Tranche A Term Facility mature or are repaid in full
(the "Revolving Credit Termination Date"). Letters of Credit under the Revolving
Facility are available at any time. No Letter of Credit shall have an expiration
date after the earlier of (a) one year from the date of its issuance and (b)
five business days before the Scheduled Revolving Credit Termination Date.
Letters of Credit may be renewed for one-year periods, provided that no Letter
of Credit shall extend beyond the time specified in clause (b) of the previous
sentence.

Loans under the Tranche A Term Facility amortize in twelve semi-annual
installments commencing September 30, 1997 in the following amounts: (a) $16.0
million for the first installment, (b) $19.0 million for the second and third
installments, (c) $25.5 million for the fourth and fifth installments, (d) $32.0
million for the sixth and seventh installments, (e) $35.0 million for the eighth
installment, (f) $38.5 million for the ninth and tenth installments, (g) $41.5
million for the eleventh installment, and (h) $45.0 million for the twelfth
installment. Loans made under the Tranche B Term Facility amortize in fifteen
semi-annual installments commencing September 30, 1997 in the following amounts:
(a) $500,000 for the first twelve installments,

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(b) $121.0 million for the thirteenth and fourteenth installments and (c) $121.5
million for the fifteenth and final installment.

The Company is required to make mandatory prepayments of loans, and
revolving credit commitments will be mandatorily reduced in amounts, at times
and subject to certain exceptions (a) in respect of 75% of consolidated excess
cash flow of the Company starting with fiscal year 1997 (such amount may be
reduced to 50% of excess cash flow for each fiscal year of the Company
(commencing with the 1998 fiscal year) based upon the achievement of certain
performance targets) and (b) in respect of 100% of the net proceeds of certain
dispositions of material assets or the stock of subsidiaries or the issuance of
capital stock or the incurrence of certain indebtedness by the Company or any of
its subsidiaries. At the Company's option, loans may be prepaid, and revolving
credit commitments may be permanently reduced, in whole or in part at any time
in certain minimum amounts. Prepayments of the Term Facilities shall be applied
to the loans under the Tranche A Term Facility and the Tranche B Term Facility
ratably and to the installments thereof ratably in accordance with the then
remaining number of installments and may not be reborrowed, provided that the
first $40.0 million of optional prepayments of the term loans may be applied to
such installments as the Borrower may elect (other than the first twelve
installments in respect of the loans under the Tranche B Term Facility).

The obligations of the Company under the Senior Bank Facilities are
unconditionally and irrevocably guaranteed by each of the Company's direct or
indirect domestic subsidiaries (collectively, the "Guarantors"). In addition,
the Senior Bank Facilities are secured by first priority or equivalent security
interests in (i) all the capital stock of, or other equity interests in, each
direct or indirect domestic subsidiary of the Company and 65% of the capital
stock of, or other equity interests in, each direct foreign subsidiary of the
Company, or any of its domestic subsidiaries and (ii) all tangible and
intangible assets (including, without limitation, intellectual property and
owned real property) of the Company and the Guarantors (subject to certain
exceptions and qualifications).

At the Company's option, the interest rates per annum applicable to the
Senior Bank Facilities will be either Adjusted LIBOR (as defined) plus a margin
of (i) 2.00% with respect to the Tranche A Term Facility and the Revolving
Facility and (ii) 2.25% with respect to the Tranche B Term Facility, or the
Alternate Base Rate (as defined) plus a margin of (i) 1.00% with respect to the
Tranche A Term Facility and the Revolving Facility and (ii) 1.25% with respect
to the Tranche B Term Facility. The Alternate Base Rate is the highest of (a)
Chase's Prime Rate, (b) the secondary market rate for three-month certificates
of deposit (grossed up for maximum statutory reserve requirements) plus 1% and
(c) the Federal Funds Effective Rate plus 0.5%.

The Company will pay a commission on the face amount of all outstanding
letters of credit at a per annum rate equal to the Applicable Margin then in
effect with respect to LIBOR loans under the Revolving Facility minus the
Fronting Fee (as defined). A fronting fee equal to 1/4% per annum on the face
amount of each Letter of Credit (the "Fronting Fee") shall be payable quarterly
in arrears to the issuing lender for its own account. Initially the Company will
also pay a per annum fee equal to 0.50% on the undrawn portion of the
commitments in respect of the Revolving Facility (the "Commitment Fee"). The
Commitment Fee shall be subject to determination in accordance with the pricing
grid set forth above after January 1, 1998.

The Senior Bank Facilities also contain a number of significant covenants
that, among other things, restrict the ability of the Company to dispose of
assets, incur additional indebtedness, repay other indebtedness or amend other
debt instruments, pay dividends, create liens on assets, make investments or
acquisitions, engage in mergers or consolidations, make capital expenditures, or
engage in certain transactions with affiliates, amend the Indenture and
otherwise restrict corporate activities. In addition, under the Senior Bank
Facilities the Company is required to comply with specified minimum interest
coverage, maximum leverage and minimum fixed charge coverage ratios.

In connection with the Offering, the Company will repay approximately
$194.9 million of indebtedness under the Senior Bank Facilities and expects to
amend and restate the Senior Bank Facilities. As expected to be amended, the
Senior Bank Facilities will comprise (i) a Revolving Facility of $200.0 million,
which will mature on May 31, 2004 or earlier upon the maturity or repayment in
full of the Tranche A Term Facility,

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(ii) a Tranche A Term Facility of $420.0 million, which will mature on May 31,
2004 and (iii) a Tranche B Term Facility of $150.0 million, which will mature on
October 31, 2005.

Under the amended and restated Senior Bank Facilities, at the Company's
option, the interest rates per annum applicable to the Senior Bank Facilities
will be either Adjusted LIBOR plus a margin of (i) 1.5% with respect to the
Tranche A Term Facility and the Revolving Facility and (ii) 1.75% with respect
to the Tranche B Term Facility, or the Alternate Base Rate plus a margin of (i)
0.50% with respect to the Tranche A Term Facility and the Revolving Facility and
(ii) 0.75% with respect to the Tranche B Term Facility. The applicable margins
may be adjusted either up or down based upon the achievement of certain
performance targets, with the first such adjustment being determined and
becoming effective not later than 45 days after December 31, 1997. The Tranche A
Term Facility is expected to require semiannual repayments commencing March 31,
1998 aggregating $27.0 million in 1998, $40.0 million in 1999, $57.0 million in
2000, $73.0 million in 2001, $82.0 million in 2002, $91.0 million in 2003 and
the remainder on March 31, 2004. The Tranche B Term Facility is expected to
require semiannual repayments commencing March 31, 1998 aggregating $0.4 million
in 1998 through 2003, $20.2 million in 2004 and the remaining $127.4 million in
2005. The amended and restated Senior Bank Facilities will require the Company
to make mandatory prepayments of loans, and revolving credit commitments will be
mandatorily reduced in amounts, at times and subject to certain exceptions in
respect of 75% of consolidated excess cash flow of the Company starting with
fiscal year 1998 (the Company will not be required to make a mandatory
prepayment based on consolidated excess cash flow for fiscal year 1997 if the
Senior Bank Facilities are amended and restated as contemplated), although such
amount may be reduced from 75% to 50%, 25% or even 0% based upon the achievement
of certain performance targets.

SENIOR SUBORDINATED NOTES

The Senior Subordinated Notes were issued under an Indenture, dated as of
November 1, 1996, among the Company, certain of its subsidiaries (the
"Subsidiary Guarantors") and the United States Trust Company of New York, as
Trustee (the "Trustee"), a copy of which has been filed as an exhibit to the
registration statement of which this Prospectus is a part. The Indenture is
subject to and governed by the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). The following summary of certain provisions of the
Senior Subordinated Notes does not purport to be complete and is subject to, and
is qualified in its entirety by reference to, all the provisions of the
Indenture (including the definitions of certain terms therein and those terms
made a part thereof by the Trust Indenture Act) and the Senior Subordinated
Notes.

The Senior Subordinated Notes are unsecured, senior subordinated
obligations of the Company, limited to the aggregate principal amount thereof,
and will mature on November 1, 2006. Each note bears interest at the rate of
10 3/8% and is payable semiannually on May 1 and November 1 of each year.

Except as set forth below, the Senior Subordinated Notes are not redeemable
at the option of the Company prior to November 1, 2001. On and after such date,
the Senior Subordinated Notes are redeemable, at the Company's option, in whole
or in part, at any time upon not less than 30 nor more than 60 days prior
notice, at the following redemption prices (expressed in percentages of
principal amount), plus accrued and unpaid interest to the redemption date
(subject to the right of holders of record on the relevant record date to
receive interest due on the relevant interest payment date):

If redeemed during the 12-month period commencing on November 1 of the
years set forth below:

<TABLE>
<CAPTION>
REDEMPTION
PERIOD PRICE
<S> <C>
2001........................................................ 105.188%
2002........................................................ 103.458%
2003........................................................ 101.729%
2004 and thereafter......................................... 100.000%
</TABLE>

In addition, at any time and from time to time prior to November 1, 2000,
the Company may redeem in the aggregate up to $160.0 million principal amount of
Senior Subordinated Notes with the proceeds of one or more equity offerings by
the Company so long as there is a public market at the time of such redemption,
at a redemption price of 110.375%, plus accrued and unpaid interest, if any, to
the redemption date (subject to the

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right of holders of record on the relevant record date to receive interest due
on the relevant interest payment date); provided, however, that at least $200.0
million aggregate principal amount of the Senior Subordinated Notes must remain
outstanding after each such redemption. At any time on or prior to November 1,
2001, the Senior Subordinated Notes may also be redeemed as a whole at the
option of the Company upon the occurrence of a change of control at a premium.

The payment of the principal of, premium (if any), and interest on the
Senior Subordinated Notes is subordinated in right of payment, to the payment
when due of all senior indebtedness (as defined in the Indenture) of the
Company, including indebtedness under the Senior Bank Facilities.

Each Subsidiary Guarantor unconditionally guarantees, jointly and
severally, on a senior subordinated basis, the full and prompt payment of
principal of and interest on the Senior Subordinated Notes, and of all other
obligations of the Company under the Indenture. The indebtedness evidenced by
each Subsidiary Guaranty (including the payment of principal of, premium, if
any, and interest on the Senior Subordinated Notes) will be subordinated to
guarantor senior indebtedness (as defined in the Indenture) on the same basis as
the Senior Subordinated Notes are subordinated to senior indebtedness.

Change of Control. Upon the occurrence of a change of control, each holder
has the right to require the Company to repurchase all or any part of such
holder's Senior Subordinated Notes at a purchase price in cash equal to 101% of
the principal amount thereof plus accrued and unpaid interest, if any, to the
date of purchase.

Limitation on Incurrence of Additional Indebtedness. Subject to certain
exceptions under the Indenture, the Company shall not, and shall not permit any
of its restricted subsidiaries (as defined in the Indenture) to, incur any
indebtedness; provided, however, that the Company and any of its restricted
subsidiaries may incur indebtedness if on the date thereof the Consolidated
Coverage Ratio (as defined in the Indenture) would be greater than 2.00:1.00, if
such Indebtedness is Incurred on or prior to November 1, 1998 and 2.25:1.00, if
such indebtedness is Incurred thereafter.

Limitation on Restricted Payments. Subject to certain exceptions set forth
in the Indenture, the Company shall not, and shall not permit any of its
restricted subsidiaries, directly or indirectly, to make any restricted payment
(as defined in the Indenture) if at the time the Company or such Restricted
Subsidiary makes such restricted payment:

(i) a default shall have occurred and be continuing (or would result
therefrom);

(ii) the Company is not able to incur an additional $1.00 of indebtedness
pursuant to the "Limitation on Indebtedness" covenant; or

(iii) the aggregate amount of such restricted payment and all other
restricted payments declared or made subsequent to the issue date would exceed
the sum of: (A) 50% of the consolidated net income accrued during the period
from the issue date to the end of the most recent fiscal quarter ending prior to
the date of such restricted payment as to which financial results are available
(but in no event ending more than 135 days prior to the date of such restricted
payment) (or, in case such consolidated net income shall be a deficit, minus
100% of such deficit); (B) the aggregate net proceeds received by the Company
from any person (other than a subsidiary of the Company) subsequent to November
1, 1996; (C) the amount by which indebtedness of the Company is reduced upon the
conversion or exchange (other than by a restricted subsidiary) subsequent to the
issue date of any indebtedness of the Company convertible or exchangeable for
capital stock of the Company (less the amount of any cash, or other property,
distributed by the Company upon such conversion or exchange); (D) the amount
equal to the net reduction in investments made by the Company or any of its
restricted subsidiaries in any person resulting from (i) repurchases or
redemptions of such investments by such person, proceeds realized upon the sale
of such investment to an unaffiliated purchaser, and repayments of loans or
advances or other transfers of assets by such person to the Company or any
restricted subsidiary of the Company or (ii) the redesignation of unrestricted
subsidiaries as restricted subsidiaries not to exceed, in the case of any
unrestricted subsidiary, the amount of investments previously made by the
Company or any restricted subsidiary in such unrestricted subsidiary, which
amount was included in the calculation of the amount of restricted payments;
provided, however, that no amount shall be included under this clause (D) to the
extent it is already included in consolidated net income; and (E) the aggregate
net cash proceeds received by a person in consideration for the issuance of such
person's capital stock which are held by such person at the time such person is
merged with and into the Company in accordance with the "Merger and

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Consolidation" covenant subsequent to the issue date; provided, however, that
concurrently with or immediately following such merger the Company uses an
amount equal to such net cash proceeds to redeem or repurchase the Company's
capital stock.

Other Restrictive Covenants. The Indenture contains certain other
restrictive covenants that, among other things, impose limitations (subject to
certain exceptions) on the Company with respect to (i) distributions from
restricted subsidiaries, (ii) sales of assets and subsidiary stock, (iii)
issuances of capital stock of restricted subsidiaries, and (iv) a merger and
consolidation involving the Company.

Events of Default. Each of the following constitutes an event of default
under the Indenture: (i) a default in any payment of interest on any note when
due, continued for 30 days, (ii) a default in the payment of principal of any
note when due at its stated maturity, upon optional redemption, upon required
repurchase, upon declaration or otherwise (iii) the failure by the Company to
comply with its obligations under the merger and consolidation covenants of the
Indenture, (iv) the failure by the Company to comply for 30 days after notice
with any of its obligations under the other covenants described in the
Indenture, (v) the failure by the Company to comply for 60 days after notice
with its other agreements contained in the Indenture, (vi) indebtedness of the
Company or any restricted subsidiary is not paid within any applicable grace
period after final maturity or is accelerated by the holders thereof because of
a default and the total amount of such indebtedness unpaid or accelerated
exceeds $20 million and such default shall not have been cured or such
acceleration rescinded after a 10 day period (the "cross acceleration
provision"), (vii) certain events of bankruptcy, insolvency or reorganization of
the Company or a significant subsidiary, (viii) any judgment or decree for the
payment of money in excess of $20 million (to the extent not covered by
insurance) is rendered against the Company or a significant subsidiary and such
judgment or decree shall remain undischarged or unstayed for a period of 60 days
after such judgment becomes final and non-appealable or (ix) any Subsidiary
Guaranty by a significant subsidiary ceases to be in full force and effect
(except as contemplated by the terms of the Indenture) or any Subsidiary
Guarantor that is a significant subsidiary denies or disaffirms its obligations
under the Indenture or its Subsidiary Guaranty and such default continues for 10
days. However, a default under clauses (iv) and (v) will not constitute an event
of default until the Trustee or the holders of 25% in principal amount of the
outstanding Senior Subordinated Notes notify the Company of the default and the
Company does not cure such default within the time specified in clauses (iv) and
(v) hereof after receipt of such notice.

If an event of default occurs and is continuing, the Trustee or the holders
of at least 25% in principal amount of the outstanding Senior Subordinated Notes
may declare the principal of and accrued and unpaid interest, if any, on all the
Senior Subordinated Notes to be due and payable. Upon such a declaration, such
principal and accrued and unpaid interest shall be due and payable immediately.
If an event of default relating to certain events of bankruptcy, insolvency or
reorganization of the Company occurs and is continuing, the principal of and
accrued and unpaid interest on all the Senior Subordinated Notes will become and
be immediately due and payable without any declaration or other act on the part
of the Trustee or any holders. Under certain circumstances, the holders of a
majority in principal amount of the outstanding Senior Subordinated Notes may
rescind any such acceleration with respect to the Senior Subordinated Notes and
its consequences.

SHARES ELIGIBLE FOR FUTURE SALE

Prior to the Offering, there has been no market for the Common Stock. The
sale, or availability for sale, of substantial amounts of Common Stock in the
public market subsequent to the Offering could adversely affect the prevailing
market price of the shares of Common Stock and could impair the Company's
ability to raise additional capital through the sale of equity securities.

Upon completion of the Offering, the Company will have 75,576,596 shares of
Common Stock outstanding. Of these shares, the 13,622,500 shares sold in the
Offering will be freely tradable without restriction or further registration
under the Securities Act, except that any shares purchased by "affiliates" of
the Company, as that term is defined under the Securities Act ("Affiliates"),
may generally only be sold in compliance with the limitations of Rule 144
described below.

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The remaining 61,954,096 shares of Common Stock are deemed "Restricted
Shares" under Rule 144. The number of shares of Common Stock available for sale
in the public market is limited by restrictions under the Securities Act and
lock-up agreements under which substantially all of the holders of such shares
have agreed not to sell or otherwise dispose of any of their shares for a period
of 180 days after the effective date of this Offering (the "Lock-Up Period")
without the prior written consent of Donaldson, Lufkin & Jenrette Securities
Corporation. Because of these restrictions, on the date of this Prospectus, no
shares other than those offered hereby will be eligible for sale. Upon
expiration of the Lock-Up Period, all of the Restricted Shares will become
available for sale in the public market, subject to Rule 144 and Rule 701 of the
Securities Act (other than 3,127,415 shares which will become available for sale
in October 1998.)

In general, under Rule 144 of the Securities Act as currently in effect,
beginning 90 days after this Offering, a person (or persons whose shares are
aggregated) who has beneficially owned "restricted" shares for at least one
year, including a person who may be deemed an affiliate of the Company, is
entitled to sell within any three-month period a number of shares of Common
Stock that does not exceed the greater of 1.0% of the then-outstanding shares of
Common Stock (755,766 shares after giving effect to this Offering) or the
average weekly trading volume of the Common Stock as reported through the New
York Stock Exchange during the four calendar weeks preceding such sale. Sales
under Rule 144 of the Securities Act are subject to certain restrictions
relating to manner of sale, notice and the availability of current public
information about the Company. In addition, under Rule 144(k) of the Securities
Act, a person who is not an affiliate of the Company at any time 90 days
preceding a sale, and who has beneficially owned shares for at least one year,
would be entitled to sell such shares immediately following this Offering
without regard to the volume limitations, manner of sale provisions or notice or
other requirements of Rule 144 of the Securities Act.

Rule 701 under the Securities Act provides that shares of Common Stock
acquired on the exercise of outstanding options may be resold by persons other
than affiliates beginning 90 days after the date of this Prospectus, subject
only to the manner of sale provisions of Rule 144, and by affiliates, beginning
90 days after the date of this Prospectus, subject to all provisions of Rule 144
except its minimum holding period. The Company intends to register on a
registration statement on Form S-8, shortly after the date of this Prospectus,
for a total of 8,444,021 shares of Common Stock reserved for issuance under the
Stock Option Plan.

CERTAIN U.S. TAX CONSIDERATIONS APPLICABLE
TO NON-U.S. HOLDERS OF THE COMMON STOCK

The following is a general discussion of certain U.S. federal income and
estate tax consequences of the ownership and disposition of Common Stock
applicable to Non-U.S. Holders of such Common Stock who acquire and own such
Common Stock as a capital asset within the meaning of section 1221 of the
Internal Revenue Code of 1986, as amended (the "Code"). A "Non-U.S. Holder" is
any person other than (i) a citizen or resident of the United States, (ii) a
corporation or partnership created or organized in the United States or under
the laws of the United States or of any state, or (iii) an estate or trust whose
income is includable in gross income for United States federal income tax
purposes regardless of its source, or (iv) a trust if (a) a court within the
United States is able to exercise primary supervision over the administration of
the trust and (b) one or more United States fiduciaries have the authority to
control all substantial decisions of the trust. For purposes of the withholding
tax on dividends discussed below, a non-resident fiduciary of an estate or trust
will be considered a Non-U.S. Holder. An individual may, subject to certain
exceptions, be deemed to be a resident alien (as opposed to a non-resident
alien) by virtue of being present in the United States on at least 31 days in
the calendar year and for an aggregate of at least 183 days during a three-year
period in the current calendar year (counting for such purposes all of the days
present in the current year, one-third of the days present in the immediately
preceding year, and one-sixth of the days present in the second succeeding
year). Resident aliens are subject to U.S. federal tax as if they were U.S.
citizens and, thus, are not Non-U.S. Holders for purposes of this discussion.

This discussion does not consider specific facts and circumstances that may
be relevant to a particular Non-U.S. Holder's tax position (including the fact
that in the case of a Non-U.S. Holder that is a partnership, the U.S. tax
consequences of holding and disposing of shares of Common Stock may be affected
by certain

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determinations made at the partner level) and does not consider U.S. state and
local or non-U.S. tax consequences. Further it does not consider Non-U.S.
Holders subject to special tax treatment under the federal income tax laws
(including banks and insurance companies, dealers in securities, and holders of
securities held as part of a "straddle," "hedge" or "conversion transaction").
In addition, persons that hold the Common Stock through "hybrid entities" may be
subject to special rules and may not be entitled to the benefits of a U.S.
income tax treaty. The following discussion is based on provisions of the Code
and administrative and judicial interpretations as of the date hereof, all of
which are subject to change, possibly on a retroactive basis, and any change
could affect the continuing validity of this discussion. THE FOLLOWING SUMMARY
IS INCLUDED HEREIN FOR GENERAL INFORMATION. ACCORDINGLY, EACH PROSPECTIVE
NON-U.S. HOLDER IS URGED TO CONSULT A TAX ADVISOR WITH RESPECT TO THE UNITED
STATES FEDERAL TAX CONSEQUENCES OF HOLDING AND DISPOSING OF COMMON STOCK, AS
WELL AS ANY TAX CONSEQUENCES THAT MAY ARISE UNDER THE LAWS OF ANY U.S. STATE,
LOCAL OR OTHER NON-U.S. TAXING JURISDICTION.

DIVIDENDS

In general, dividends paid to a Non-U.S. Holder will be subject to
withholding of U.S. federal income tax at a 30% rate unless such rate is reduced
by an applicable income tax treaty. Dividends that are effectively connected
with such holder's conduct of a trade or business in the United States, or, if a
tax treaty applies, attributable to a permanent establishment or in the case of
an individual a "fixed base," in the United States ("U.S. trade or business
income") are generally subject to U.S. federal income tax at regular rates and
are not generally subject to withholding if the Non-U.S. Holder files the
appropriate form with the payor. Any U.S. trade or business income received by a
non-U.S. corporation may also, under certain circumstances, be subject to an
additional "branch profits tax" at a 30% rate, or such lower rate as may be
applicable under an income tax treaty.

Dividends paid to an address in a foreign country are presumed (absent
actual knowledge to the contrary) to be paid to a resident of such country for
purposes of the withholding discussed above, and under the current
interpretation of U.S. Treasury regulations, for purposes of determining the
applicability of a tax treaty rate. Under final U.S. Treasury regulations,
effective January 1, 1999; however, a Non-U.S. Holder of Common Stock who wishes
to claim the benefit of an applicable treaty rate would be required to satisfy
applicable certification and other requirements, which would include the
requirement that the Non-U.S. Holder file a Form W-8 which contains the holder's
name and address.

A Non-U.S. Holder of Common Stock that is eligible for a reduced rate of
U.S. withholding tax pursuant to an income tax treaty may obtain a refund of any
excess amounts currently withheld by filing an appropriate claim for a refund
with the U.S. Internal Revenue Service.

DISPOSITION OF COMMON STOCK

Except as described below, a Non-U.S. Holder generally will not be subject
to U.S. federal income tax in respect of gain recognized on a disposition of
Common Stock provided that (i) the gain is not U.S. trade or business income;
(ii) the Non-U.S. Holder is not an individual who is present in the United
States for 183 or more days in the taxable year of the disposition and who meets
certain other requirements; (iii) the Non-U.S. Holder is not subject to tax
pursuant to the provisions of U.S. tax law applicable to certain United States
expatriates; and (iv) the Company has not been and does not become a "United
States real property holding corporation" for U.S. federal income tax purposes.
The Company believes that it has not been, is not currently, and is not likely
to become, a United States real property holding corporation. However, no
assurance can be given that the Company will not be a United States real
property holding corporation when a Non-U.S. Holder sells its shares of Common
Stock.

FEDERAL ESTATE TAXES

In general, an individual who is a Non-U.S. Holder for U.S. estate tax
purposes will incur liability for U.S. federal estate tax if the fair market
value of property included in the individual's taxable estate for U.S. federal
estate tax purposes exceeds the statutory threshold amount. For these purposes,
Common Stock

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owned, or treated as owned, by an individual who is a Non-U.S. Holder at the
time of death will be included in the individual's gross estate for U.S. federal
estate tax purposes, unless an applicable estate tax treaty provides otherwise.

U.S. INFORMATION REPORTING REQUIREMENTS AND BACKUP WITHHOLDING TAX

The Company must report annually to the Internal Revenue Service and to
each Non-U.S. Holder the amount of dividends paid to, and the tax withheld with
respect to, each Non-U.S. Holder. These reporting requirements apply regardless
of whether withholding was reduced or eliminated by an applicable tax treaty.
Copies of these information returns may also be made available under the
provisions of a specific treaty or agreement to the tax authorities in the
country in which the Non-U.S. Holder resides. Under current regulations, the
United States backup withholding tax (which generally is a withholding tax
imposed at the rate of 31% on certain payments to persons that fail to furnish
the information required under the United States information reporting
requirements) will generally not apply to dividends paid on the Common Stock to
a Non-U.S. Holder at an address outside the United States. Under final Treasury
regulations, effective January 1, 1999, a Non-U.S. Holder generally would not be
subject to backup withholding at a 31% rate if the beneficial owner certifies to
such owner's foreign status on a valid Form W-8.

Non-U.S. Holders will not be subject to information reporting or backup
withholding with respect to the payment of proceeds from the disposition of
Common Stock effected by a foreign office of a foreign broker provided however
that if the broker is a U.S. person or a "U.S. related person," information
reporting (but not backup holding) would apply unless the broker receives a
statement from the owner, signed under penalties of perjury, certifying its
foreign status or otherwise establishing an exemption or the broker has
documentary evidence in its files as to the Non-U.S. Holder's foreign status and
the broker has no actual knowledge to the contrary. For this purpose, a "U.S.
related person" is (i) a "controlled foreign corporation" for U.S. federal
income tax purposes, (ii) a foreign person 50% or more of whose gross income
from all sources for the three-year period ending with the close of its taxable
year preceding the payment (or for such part of the period that the broker has
been in existence) is derived from activities that are effectively connected
with the conduct of a U.S. trade or business, (iii) a foreign partnership
engaged in a U.S. trade or business in which U.S. persons hold more than 50% of
the income or capital interest, or (iv) certain U.S. branches of foreign banks
or insurance companies.

Non-U.S. Holders will be subject to information reporting and backup
withholding at a rate of 31% with respect to the payment of proceeds from the
disposition of Common Stock effected by to or through the United States office
of a broker, U.S. or foreign, unless the Non-U.S. Holder certifies as to its
foreign status under penalties of perjury or otherwise establishes an exemption.

Any amounts withheld under the backup withholding rules from a payment to a
Non-U.S. Holder will be allowed as a credit against such Non-U.S. Holder's U.S.
federal income tax, and any amounts withheld in excess of such Non-U.S. Holder's
federal income tax liability will be refunded, provided that the required
information is furnished to the Internal Revenue Service.

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<PAGE> 73

UNDERWRITING

Subject to the terms and the conditions of an Underwriting Agreement, dated
November 18, 1997 (the "Underwriting Agreement"), the U.S. Underwriters named
below (the "U.S. Underwriters"), for whom Donaldson, Lufkin & Jenrette
Securities Corporation ("DLJ"), BT Alex. Brown Incorporated, Chase Securities
Inc., Credit Suisse First Boston Corporation, Goldman, Sachs & Co., and Morgan
Stanley & Co. Incorporated are acting as representatives (the "U.S.
Representatives"), and the International Managers named below (the
"International Managers and, together with the U.S. Underwriters, the
"Underwriters"), for whom Donaldson, Lufkin & Jenrette International, BT Alex.
Brown International, a division of Bankers Trust International PLC, Chase
Manhattan International Limited, Credit Suisse First Boston (Europe) Limited,
Goldman Sachs International and Morgan Stanley & Co. International Limited are
acting as representatives (the "International Representatives," and, together
with the U.S. Representatives, the "Representatives"), have severally but not
jointly agreed to purchase from the Company and the Selling Stockholder an
aggregate of 13,622,500 shares of Common Stock. The number of shares of Common
Stock that each Underwriter has agreed to purchase is set forth opposite its
name below:

<TABLE>
<CAPTION>
NUMBER OF
U.S. UNDERWRITERS SHARES
<S> <C>
Donaldson, Lufkin & Jenrette Securities Corporation......... 1,643,120
BT Alex. Brown Incorporated................................. 1,643,120
Chase Securities Inc........................................ 432,400
Credit Suisse First Boston Corporation...................... 1,643,120
Goldman, Sachs & Co......................................... 1,643,120
Morgan Stanley & Co. Incorporated........................... 1,643,120
Bear, Stearns & Co. Inc..................................... 100,000
Deutsche Morgan Grenfell Inc................................ 100,000
A.G. Edwards & Sons, Inc.................................... 100,000
Lazard Freres & Co. LLC..................................... 100,000
Lehman Brothers Inc......................................... 100,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated.......... 100,000
J.P. Morgan Securities Inc.................................. 100,000
PaineWebber Incorporated.................................... 100,000
Prudential Securities Incorporated.......................... 100,000
Salomon Brothers Inc........................................ 100,000
SBC Warburg Dillon Read Inc................................. 100,000
Schroder & Co. Inc.......................................... 100,000
Equitable Securities Corporation............................ 50,000
Everen Securities, Inc...................................... 50,000
First of Michigan Corporation............................... 50,000
Interstate/Johnson Lane Corporation......................... 50,000
Janney Montgomery Scott Inc................................. 50,000
Johnston, Lemon & Co. Incorporated.......................... 50,000
Edward D. Jones & Co., L.P.................................. 50,000
Legg Mason Wood Walker, Incorporated........................ 50,000
McDonald & Company Securities, Inc.......................... 50,000
The Ohio Company............................................ 50,000
Ormes Capital Markets, Inc.................................. 50,000
Parker/Hunter Incorporated.................................. 50,000
Pennsylvania Merchant Group Ltd............................. 50,000
Piper Jaffray Inc........................................... 50,000
Raymond James & Associates, Inc............................. 50,000
Roney & Co. L.L.C........................................... 50,000
Ryan, Beck & Co............................................. 50,000
Sands Brothers & Co., Ltd................................... 50,000
</TABLE>

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<PAGE> 74

<TABLE>
<S> <C>
Sutro & Co. Incorporated......................................................... 50,000
Tucker Anthony Incorporated...................................................... 50,000
Wheat, First Securities, Inc..................................................... 50,000
------------
U.S. Offering Subtotal................................................. 10,898,000
------------
</TABLE>

<TABLE>
<CAPTION>
NUMBER OF
INTERNATIONAL MANAGERS SHARES
<S> <C>
Donaldson, Lufkin & Jenrette International.................. 362,360
BT Alex. Brown International................................ 362,358
Chase Manhattan International Limited....................... 95,358
Credit Suisse First Boston (Europe) Limited................. 362,358
Goldman, Sachs International................................ 362,358
Morgan Stanley & Co. International Limited.................. 362,358
ABN AMRO Rothschild......................................... 272,450
Deutsche Morgan Grenfell Inc................................ 272,450
Societe Generale............................................ 272,450
----------
International Offering Subtotal................... 2,724,500
----------
Total.................................................. 13,622,500
==========
</TABLE>

The Underwriting Agreement provides that the obligations of the several
Underwriters to purchase and accept delivery of the shares of Common Stock
offered hereby are subject to approval by their counsel of certain legal matters
and to certain other conditions. The Underwriters are obligated to purchase and
accept delivery of all the shares of Common Stock offered hereby (other than
those shares covered by the over-allotment option described below) if any are
purchased. The price to the public and underwriting discounts and commissions
per share for the U.S. Offering and the International Offering will be
identical.

The Company and the Selling Stockholder have granted to the U.S.
Underwriters an option, expiring at the close of business on the 30th day after
the date of this Prospectus, to purchase, from time to time, in whole or in
part, up to an aggregate of 2,043,375 additional shares of Common Stock at the
initial public offering price less the underwriting discounts and commissions.
The U.S. Underwriters may exercise such option solely to cover over-allotments,
if any, made in connection with the Offering. To the extent that the U.S.
Underwriters exercise such option, each U.S. Underwriter will become obligated,
subject to certain conditions, to purchase its pro rata portion of such
additional shares based on such U.S. Underwriters' percentage underwriting
commitment in the U.S. Offering as indicated in the preceding table.

The Company has been advised by the Representatives that the Underwriters
propose to offer the shares of Common Stock to the public initially at the price
to the public set forth on the cover page of this Prospectus and, through the
Representatives, to certain dealers at such price less a concession of $0.72 per
share. The Underwriters and such dealers may allow a discount of $0.10 per share
on sales to certain other dealers. After the initial public offering, the price
to the public and concession and discount to dealers may be changed by the
Representatives.

The Company and the Selling Stockholder have, severally and not jointly,
agreed to indemnify the Underwriters against certain liabilities, including
civil liabilities under the Securities Act, or contribute to payments which the
Underwriters may be required to make in respect thereof.

The Company, its officers and directors, and substantially all stockholders
of the Company, including the Selling Stockholder, have, severally and not
jointly, agreed that they will not (i) offer, sell, pledge, contract to sell,
announce their intention to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of, directly or indirectly, or file
with the Commission a registration statement under the Securities Act relating
to any shares of Common Stock, or any securities that are convertible into, or
exercisable or exchangeable for shares of Common Stock or (ii) enter into any
swap or other arrangement that transfers all or a portion of the economic
consequences

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<PAGE> 75

associated with the ownership of any Common Stock (regardless of whether any of
the transactions described in clause (i) or (ii) is to be settled by the
delivery of Common Stock, or such other securities, in cash or otherwise),
except to the Underwriters pursuant to the Underwriting Agreement, for a period
of 180 days after the date of this Prospectus without the prior written consent
of DLJ. In addition, during such period, the Company has also agreed not to file
any registration statement with respect to, and each of the officers, directors
and the stockholders of the Company, including the Selling Stockholder, has
agreed not to make any demand for, or exercise any right with respect to, the
registration of any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock without DLJ's prior written
consent. Notwithstanding the foregoing, during such period, (i) the Company may
grant stock options pursuant to the Company's existing stock option plan
consistent with past practice and (ii) the Company may issue shares of Common
Stock upon the exercise of any option or warrant or the conversion of a security
outstanding on the date hereof. In addition, each such officer, director and
stockholder may make a bona fide gift or gifts or may make a distribution to
limited partners or shareholders provided that such transferee or transferees
similarly agrees in writing for the benefit of the Representatives to the effect
set forth in clause (i) and (ii) of the first sentence of this paragraph for a
period of 180 days after the date of this Prospectus.

Prior to the Offering, there has been no public market for the Common
Stock. The price to the public for the shares of Common Stock has been
determined by negotiations between the Company and the Representatives. The
factors to be considered in determining the price to the public include the
history of and the prospects for the industry in which the Company competes, the
past and present operations of the Company, the historical results of operations
of the Company, the prospects for future earnings of the Company, the recent
market prices of securities of generally comparable companies and the general
condition of the securities markets at the time of the Offering.

The shares of Common Stock offered hereby have been approved for listing on
the New York Stock Exchange under the symbol "IHF." In connection with the
listing of the Common Stock on the New York Stock Exchange, the Underwriters
will undertake to sell round lots of 100 or more shares of Common Stock to a
minimum of 2,000 beneficial owners.

Pursuant to an Agreement Between U.S. Underwriters and International
Managers (the "Intersyndicate Agreement"), each U.S. Underwriter has represented
and agreed that, with certain exceptions, (i) it is not purchasing any shares of
Common Stock offered hereby for the account of anyone other than a United States
or Canadian Person (as defined below) and (ii) it has not offered or sold, and
will not offer or sell, directly or indirectly, any shares of Common Stock
offered hereby or distribute any prospectus relating to such shares of Common
Stock outside the United States or Canada or to anyone other than a United
States or Canadian Person. Pursuant to the Intersyndicate Agreement, each
International Manager has represented and agreed that, with certain exceptions,
(i) it is not purchasing any shares of Common Stock offered hereby for the
account of any United States or Canadian Person and (ii) it has not offered or
sold, and will not offer or sell, directly or indirectly, any shares of Common
Stock offered hereby or distribute any prospectus relating to such shares of
Common Stock in the United States or Canada or to any United States or Canadian
Person. With respect to any Underwriter that is both a U.S. Underwriter and an
International Manager, the foregoing representations and agreements (i) made by
it in its capacity as a U.S. Underwriter and (ii) made by it in its capacity as
an International Manager apply only to it in its capacity as an International
Manager. The foregoing limitations do not apply to stabilization transactions
and to certain other transactions specified in the Intersyndicate Agreement. As
used herein, "United States or Canadian Person" means any individual who is a
resident in the United States or Canada, or any corporation, pension,
profit-sharing or other trust or other entity organized under or governed by the
laws of the United States or Canada or of any political subdivision thereof
(other than a foreign branch of any United States or Canadian Person), and
included any United States or Canadian branch of a person other than a United
States or Canadian Person.

Pursuant to the Intersyndicate Agreement, sales may be made between the
syndicates of U.S. Underwriters and International Managers of such number of
shares of Common Stock offered hereby as may be mutually agreed. Unless
otherwise determined by the Representatives, the per share price of any shares
of Common Stock so sold shall be the price to the public set forth on the cover
page hereof, in United States dollars, less an amount not greater than the per
share amount of the concession to dealers set forth above.

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<PAGE> 76

Pursuant to the Intersyndicate Agreement, each U.S. Underwriter has
represented and agreed that (i) it has not offered or sold and will not offer or
sell, directly or indirectly, any shares of Common Stock offered hereby in any
province or territory of Canada in contravention of the securities laws thereof
and (ii) without limiting the generality of the foregoing, any offer or sale of
such shares of Common Stock in Canada will be made only pursuant to an exemption
from the requirement to file a prospectus in the province or territory of Canada
in which such offer or sale is made. Each U.S. Underwriter has further agreed to
send to any dealer who purchases from it any shares of Common Stock offered
hereby a notice stating in substance that by purchasing such shares of Common
Stock such dealer represents and agrees that (i) it has not offered or sold and
will not offer or sell, directly or indirectly, any of such shares of Common
Stock in any province or territory of Canada or to, or for the benefit of, any
resident of any province or territory of Canada in contravention of securities
laws thereof, (ii) any offer or sale of such shares of Common Stock in Canada
will be made only pursuant to an exemption from the requirement to file a
prospectus in the province or territory of Canada in which such offer or sale is
made and (iii) it will send to any other dealer to whom it sells any of such
shares of Common Stock a notice containing substantially the same statement as
is contained in this sentence.

Pursuant to the Intersyndicate Agreement, each International Manager has
represented and agreed that (i) it has not offered or sold and, prior to the
date six months after the closing date for the sale of shares of Common Stock to
the International Managers pursuant to the Underwriting Agreement, will not
offer or sell, any shares of Common Stock offered hereby to persons in the
United Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or agent)
for the purposes of their businesses or otherwise in circumstances which have
not resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995; (ii) it
has complied and will comply with all applicable provisions of the Financial
Services Act 1986 with respect to any thing done by it in relation to the shares
of Common Stock offered hereby in, from or otherwise involving the United
Kingdom; and (iii) it has only issued or passed on and will only issue or pass
on in the United Kingdom any document received by it in connection with the
Offering to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996
or is a person to whom the document may otherwise lawfully be issued or passed
on.

Pursuant to the Intersyndicate Agreement, each International Manager has
further represented and agreed that it has not offered or sold and will not
offer or sell, directly or indirectly, any shares of Common Stock acquired in
connection with the distribution contemplated hereby in Japan or to or for the
account of any resident thereof, except for offers or sales to Japanese
International Managers or dealers and except pursuant to an exemption from the
registration requirements of the Securities and Exchange Law of Japan and
otherwise in compliance with applicable provisions of Japanese law. Each
International Manager has further agreed to send to any dealer who purchases
from it any shares of Common Stock offered hereby a notice stating in substance
that by purchasing such shares of Common Stock such dealer represents and agrees
that (i) it has not offered or sold and will not offer or sell, directly or
indirectly, any of such shares of Common Stock in Japan or to or for the account
of any resident thereof, except for offers or sales to Japanese International
Managers or dealers and except pursuant to an exemption from the registration
requirements of the Securities and Exchange Law of Japan and otherwise in
compliance with applicable provisions of Japanese law and (ii) it will send to
any other dealer to whom it sells any of such shares of Common Stock a notice
containing substantially the same statement as is contained in this sentence.

Other than in the United States, no action has been taken by the Company,
the Selling Stockholder or the Underwriters that would permit a public offering
of the shares of Common Stock offered hereby in any jurisdiction where action
for that purpose is required. The shares of Common Stock offered hereby may not
be offered or sold, directly or indirectly, nor may this Prospectus or any other
offering material or advertisements in connection with the offer and sale of any
such shares of Common Stock be distributed or published in any jurisdiction,
except under circumstances that will result in compliance with the applicable
rules and regulations of such jurisdiction. Persons into whose possession this
Prospectus comes are advised to inform themselves about and to observe any
restrictions relating to the offering of the Common Stock and the

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<PAGE> 77

distribution of this Prospectus. This Prospectus does not constitute an offer to
sell or a solicitation of an offer to buy any shares of Common Stock offered
hereby in any jurisdiction in which such an offer or a solicitation is unlawful.

Affiliates of each of BT Alex. Brown Incorporated, BT Alex. Brown
International, Chase Securities Inc., Chase Manhattan International Limited,
Morgan Stanley & Co. Incorporated and Morgan Stanley & Co. International Limited
are agents and lenders under the Senior Bank Facilities and receive customary
fees in such capacity. In addition, affiliates of BT Alex. Brown Incorporated,
BT Alex. Brown International, Chase Securities Inc. and Chase Manhattan
International Limited participated in the equity financing for the IHF
Acquisition and own 2.9% and 4.3%, respectively, of the Company's Common Stock
outstanding immediately prior to the Offering. BT Alex. Brown Incorporated and
Chase Securities Inc. also acted as initial purchasers of the Senior
Subordinated Notes and received customary compensation in connection therewith.
Affiliates of BT Alex. Brown Incorporated, BT Alex. Brown International, Chase
Securities Inc. and Chase Manhattan International Limited are limited partners
of investment funds managed by Hicks Muse. The Representatives and their
affiliates have in the past rendered other financial services to the Company and
its affiliates and may do so in the future.

Affiliates of certain of the Underwriters are lenders under the Company's
Senior Bank Facilities. Because the proceeds of the Offering will be used by the
Company to repay outstanding amounts under the Senior Bank Facilities, under
Rule 2710(c)(8) of the Conduct Rules of the National Association of Securities
Dealers, Inc. ("NASD"), a conflict of interest is deemed to exist. In the event
of such a conflict of interest, the offering price can be no higher than that
recommended by a qualified independent underwriter meeting certain standards (a
"QIU"). In accordance with this requirement, DLJ has assumed the
responsibilities of acting as a QIU and will recommend a price to the public in
compliance with Rule 2710(c)(8). In connection with the Offering, DLJ is
performing the due diligence investigations and reviewing and participating in
the preparation of this Prospectus and the Registration Statement of which this
Prospectus forms a part. As compensation for the services of DLJ as a QIU, the
Company has agreed to pay DLJ $5,000.

The Representatives, on behalf of the Underwriters, may engage in
over-allotment, stabilizing transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the Exchange Act.
Over-allotment involves syndicate sales in excess of the offering size, which
creates a syndicate short position. Stabilizing transactions permit bids to
purchase the underlying security so long as the stabilizing bids do not exceed a
specified maximum. Syndicate covering transactions involve purchases of
securities in the open market after the distribution has been completed in order
to cover syndicate short positions. Penalty bids permit the Representatives to
reclaim a selling concession from a syndicate member when the securities
originally sold by such syndicate member are purchased in a syndicate covering
transaction to cover syndicate short positions. Such stabilizing transactions,
syndicate covering transactions and penalty bids may cause the price of the
securities to be higher than it would otherwise be in the absence of such
transaction.

At the request of the Company, up to 1,362,250 shares of Common Stock
offered in the U.S. Offering are being reserved for sale at the price to the
public as set forth on the cover page of this Prospectus to the employees,
officers and directors of the Company and certain other persons, subject to
confirmation after the pricing of the Offering. The Common Stock sold through
the reserved share program will be sold subject to the same terms and conditions
as all other shares of Common Stock sold in the Offering. The number of shares
of Common Stock available for sale to the general public will be reduced to the
extent such persons purchase such reserved shares. Any shares not so purchased
will be offered by the U.S. Underwriters to the general public on the same basis
as the other shares of Common Stock offered hereby.

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Vinson & Elkins L.L.P., Dallas, Texas. Certain legal
matters in connection with the Offering will be passed upon for the Underwriters
by Akin, Gump, Strauss, Hauer & Feld, L.L.P., New York, New York.

77
<PAGE> 78

EXPERTS

The consolidated balance sheet of International Home Foods, Inc. and
Subsidiaries as of December 31, 1996 and the consolidated statements of
operations and parent company's investment and advances, changes in
stockholders' deficiency, and cash flows for the year ended December 31, 1996,
included in this Prospectus, have been included herein in reliance on the report
of Coopers & Lybrand L.L.P., independent accountants, given on the authority of
that firm as experts in accounting and auditing.

The combined balance sheet of the Company as of December 31, 1995 and the
combined statements of operations and parent company's investment and advances
and of cash flows for each of the two years in the period ended December 31,
1995, included in this Prospectus, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in the report with respect thereto,
and are included herein in reliance upon the authority of said firm as experts
in accounting and auditing in giving said report.

The financial statements of Bumble Bee Seafoods, Inc. and subsidiaries as
of December 31, 1995 and 1996, and for each of the years in the three-year
period ended December 31, 1996, have been included herein and in the
registration statement in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, appearing elsewhere herein, and upon
the authority of said firm as experts in accounting and auditing. The report of
KPMG Peat Marwick LLP contains an explanatory paragraph that states that Bumble
Bee Seafoods' notes payable and subordinated note payable were due and payable
in May 1996 and nonpayment has constituted events of default. Bumble Bee
Seafoods does not currently have the funds to retire these obligations. Such
conditions raise substantial doubt about Bumble Bee Seafoods' ability to
continue as a going concern. The consolidated financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

AVAILABLE INFORMATION

The Company has filed with the Commission a registration statement (the
"Registration Statement") under the Securities Act with respect to the shares of
Common Stock offered hereby. As permitted by the rules and regulations of the
Commission, this Prospectus does not contain all of the information set forth in
the Registration Statement. For further information with respect to the Company
and the Common Stock offered hereby, reference is made to the Registration
Statement, including the exhibits and schedules filed therewith. Statements
contained in this Prospectus concerning the provisions of any contract,
agreement or other document referred to herein or therein are not necessarily
complete, but contain a summary of the material terms of such contracts,
agreements or other documents. With respect to each contract, agreement or other
document filed as an exhibit to the Registration Statement, reference is made to
the exhibit for the complete contents of the exhibit, and each statement
concerning its provisions is qualified in its entirety by such reference. The
Registration Statement may be inspected, without charge, at the offices of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and at its regional
offices at 7 World Trade Center, New York, New York, 10048 and Citicorp Center,
500 West Madison Street, Chicago, Illinois 60661-2551. Copies of such materials
may also be obtained by mail at prescribed rates from the Public Reference
Section of the Commission at its principal office at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of such materials may also be obtained from the
web site that the Commission maintains at www.sec.gov.

The Company intends to furnish its stockholders with annual reports
containing audited financial statements and quarterly reports for each of the
first three quarters of each fiscal year containing interim unaudited financial
information.

78
<PAGE> 79

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INTERNATIONAL HOME FOODS, INC.
REPORT OF INDEPENDENT ACCOUNTANTS........................... F-2
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS.................... F-3
CONSOLIDATED FINANCIAL STATEMENTS:
Consolidated Balance Sheets as of December 31, 1995 and
1996 and
September 30, 1997 (unaudited)......................... F-4
Consolidated Statements of Operations and Parent Company's
Investment and Advances for the years ended December
31, 1994, 1995 and 1996 and for the nine month periods
ended September 30, 1996 and 1997 (unaudited).......... F-5
Consolidated Statements of Changes in Stockholders' Equity
(Deficiency) for the year ended December 31, 1996 and
for the nine month period ended September 30, 1997
(unaudited)............................................ F-6
Consolidated Statements of Cash Flows for the years ended
December 31, 1994, 1995 and 1996 and for the nine month
periods ended September 30, 1996 and 1997
(unaudited)............................................ F-7
Notes to Consolidated Financial Statements................ F-8
BUMBLE BEE SEAFOODS, INC.
INDEPENDENT AUDITORS' REPORT................................ F-28
CONSOLIDATED FINANCIAL STATEMENTS:
Consolidated Balance Sheets as of December 31, 1995 and
1996 (audited) and
June 30, 1997 (unaudited).............................. F-29
Consolidated Statements of Operations and Accumulated
Deficit for the years ended December 31, 1994, 1995 and
1996 (audited) and for the six month periods ended June
30, 1996 and 1997 (unaudited).......................... F-30
Consolidated Statements of Cash Flows for the years ended
December 31, 1994, 1995 and 1996 (audited) and for the
six month periods ended June 30, 1996 and 1997
(unaudited)............................................ F-31
Notes to the Consolidated Financial Statements............ F-32
</TABLE>

F-1
<PAGE> 80

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of International Home Foods, Inc.:

We have audited the accompanying consolidated balance sheet of
International Home Foods, Inc. and Subsidiaries as of December 31, 1996 and the
related consolidated statements of operations and parent company's investment
and advances, changes in stockholders' deficiency, and cash flows for the year
ended December 31, 1996. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. 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 audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of International
Home Foods, Inc. and Subsidiaries as of December 31, 1996, and the consolidated
results of their operations and their cash flows for the year ended December 31,
1996, in conformity with generally accepted accounting principles.

COOPERS & LYBRAND L.L.P.

Parsippany, New Jersey
April 18, 1997 except as to Note 15,
which is as of May 2, 1997 and
Note 16(b) which is as of November 14, 1997

F-2
<PAGE> 81

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To American Home Products Corporation:

We have audited the accompanying combined balance sheet of American Home
Food Products identified in Notes 1 and 2, as of December 31, 1995, and the
related combined statements of operations and parent company's investment and
advances, and cash flows for each of the two years in the period ended December
31, 1995. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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 combined financial statements referred to above present
fairly, in all material respects, the combined financial position of American
Home Food Products as of December 31, 1995 and the combined results of their
operations and their cash flows for each of the two years in the period ended
December 31, 1995, in conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

New York, New York
October 11, 1996

F-3
<PAGE> 82

INTERNATIONAL HOME FOODS, INC.

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(SEE NOTES 1 AND 2)

<TABLE>
<CAPTION>
DECEMBER 31
--------------------- SEPTEMBER 30,
1995 1996 1997
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents.............................. $ -- $ 45,859 $ 63,720
Accounts receivable, net of allowances................. 45,674 48,801 78,883
Inventories............................................ 139,850 129,205 200,262
Prepaid expenses and other current assets.............. 3,832 8,197 8,297
Deferred income taxes.................................. -- 11,571 13,967
-------- ---------- ----------
Total current assets........................... 189,356 243,633 365,129
Property, plant and equipment, net....................... 176,755 186,002 200,929
Intangible assets, net................................... 97,443 153,938 234,382
Deferred income taxes.................................... -- 353,034 347,694
Other assets............................................. 93 31,664 33,639
-------- ---------- ----------
Total assets................................... $463,647 $ 968,271 $1,181,773
======== ========== ==========
LIABILITIES, PARENT COMPANY'S
INVESTMENT AND ADVANCES AND
STOCKHOLDERS' EQUITY (DEFICIENCY)

CURRENT LIABILITIES:
Due to banks........................................... $ -- $ 9,278 $ 7,127
Current portion of long-term debt...................... -- 26,000 110,000
Accounts payable....................................... 13,092 18,679 38,691
Amount payable to minority stockholder................. -- 16,556 --
Accrued salaries, wages and benefits................... 9,272 14,379 18,701
Accrued advertising and promotion...................... 27,465 38,127 58,506
Accrued interest....................................... -- 10,843 22,798
Other accrued liabilities.............................. 18,902 28,151 38,304
-------- ---------- ----------
Total current liabilities...................... 68,731 162,013 294,127
Long-term debt........................................... -- 1,044,000 1,081,500
Post retirement benefits obligation...................... -- 16,689 18,511
Other noncurrent liabilities, primarily accrued
royalties.............................................. 9,919 9,764 1,072
-------- ---------- ----------
Total liabilities.............................. 78,650 1,232,466 1,395,210
-------- ---------- ----------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIENCY) (NOTE 16):
Preferred stock -- par value $.01 per share;
authorized, 100,000,000 shares; no shares issued or
outstanding......................................... $ -- $ -- $ --
Common stock -- par value $.01 per share; authorized,
300,000,000 shares; issued and outstanding
61,922,990 shares................................... -- 619 619
Additional paid-in capital............................. -- (261,318) (216,555)
Retained earnings (accumulated deficit)................ -- (1,598) 4,493
Former parent company's investment and advances........ 384,997 -- --
Foreign currency translation adjustment................ -- (1,898) (1,994)
-------- ---------- ----------
Total stockholders' equity (deficiency)........ 384,997 (264,195) (213,437)
-------- ---------- ----------
Total liabilities, parent company's investment
and advances, and stockholders' equity
(deficiency)................................. $463,647 $ 968,271 $1,181,773
======== ========== ==========
</TABLE>

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

F-4
<PAGE> 83

INTERNATIONAL HOME FOODS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND
PARENT COMPANY'S INVESTMENT AND ADVANCES
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(SEE NOTES 1 AND 2)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------------- ----------------------
1994 1995 1996 1996 1997
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net sales........................... $997,321 $818,861 $942,792 $704,103 $843,933
Cost of goods sold.................. 463,137 398,122 444,879 333,880 412,950
-------- -------- ---------- -------- -----------
Gross profit...................... 534,184 420,739 497,913 370,223 430,983
Marketing expenses.................. 200,757 186,396 191,527 140,168 178,394
Selling, general and administrative
expenses.......................... 174,211 165,736 148,903 110,293 119,941
Provision for restructuring and
other charges..................... -- -- 4,308 -- --
Stock option compensation........... -- -- -- -- 44,763
-------- -------- ---------- -------- -----------
Income from operations.............. 159,216 68,607 153,175 119,762 87,885
Interest expense.................... -- -- 17,072 -- 79,235
Interest income and other, net...... -- -- 177 (18) 1,674
-------- -------- ---------- -------- -----------
Income before provision for income
taxes.......................... 159,216 68,607 136,280 119,744 10,324
Provision for income taxes.......... 63,296 29,414 53,319 45,576 4,233
-------- -------- ---------- -------- -----------
Net income........................ 95,920 39,193 82,961 74,168 6,091
Parent company's investment
and advances, beginning
of period......................... 423,551 467,139 -- 384,997 --
Advances, withdrawals and dividends,
net............................... (52,332) (121,335) -- (90,532) --
-------- -------- ---------- -------- -----------
Parent company's investment and
advances, end of period........... $467,139 $384,997 $ -- $368,633 $ --
======== ======== ========== ======== ===========
Income per common share............. $1.34 $0.10
Weighted average number of shares
outstanding....................... 61,922,990 63,301,986
========== ===========
Unaudited Pro forma historical
income per common share (Note
16)............................... $1.07 $0.08
Weighted average number of shares
outstanding (Note 16)............. 77,328,135 77,328,135
========== ===========
</TABLE>

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

F-5
<PAGE> 84

INTERNATIONAL HOME FOODS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS' EQUITY (DEFICIENCY)
(IN THOUSANDS, EXCEPT SHARE AMOUNT)
(SEE NOTES 1 AND 2)

<TABLE>
<CAPTION>
FOR THE FOR THE NINE
YEAR ENDED MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
1996 1997
(UNAUDITED)
<S> <C> <C>
Common Stock:
Balance at beginning of period............................ $ -- $ 619
Effect of merger transaction -- issued 61,922,990
shares................................................. 619 --
--------- ---------
Balance at end of period.................................. $ 619 $ 619
========= =========
Additional paid-in capital:
Balance at beginning of period............................ $ -- $(261,318)
Effect of merger transaction.............................. (261,318) --
Compensation related to stock options..................... -- 44,763
--------- ---------
Balance at end of period.................................. $(261,318) $(216,555)
========= =========
Foreign currency translation adjustment:
Balance at beginning of period............................ $ -- $ (1,898)
Effect of merger transaction.............................. (1,662)
Translation adjustment for the period November 1, 1996 to
December 31, 1996 and January 1, 1997 to September 30,
1997, respectively..................................... (236) (96)
--------- ---------
Balance at end of period.................................. $ (1,898) $ (1,994)
========= =========
Former parent company's investment and advances
Balance at beginning of period............................ $ 384,997 $ --
Net income*............................................... 84,559
Other activity, net**..................................... (101,256)
Effect of merger transaction.............................. (630,661)
Transfer to common stock, additional paid-in capital, and
foreign currency translation adjustment on November 1,
1996................................................... 262,361
--------- ---------
Balance at end of period.................................. $ -- $ --
========= =========
Retained earnings (accumulated deficit):
Balance at beginning of period............................ $ -- $ (1,598)
Net loss for the period November 1, 1996 to December 31,
1996 and net income for the period January 1997 to
September 30, 1997, respectively....................... (1,598) 6,091
--------- ---------
Balance at end of period.................................. $ (1,598) $ 4,493
========= =========
</TABLE>

- ---------------

* For the period January 1, 1996 to October 31, 1996.

** Consists principally of advances, withdrawals, dividends, and foreign
currency translation adjustments.

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

F-6
<PAGE> 85

INTERNATIONAL HOME FOODS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(SEE NOTES 1 AND 2)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
---------------------------------- ----------------------
1994 1995 1996 1996 1997
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net income.................................. $ 95,920 $ 39,193 $ 82,961 $ 74,168 $ 6,091
Adjustments to reconcile net income to net
cash provided from operating activities --
Depreciation and amortization............. 26,389 30,154 19,019 13,717 21,921
Deferred income taxes..................... -- -- (1,032) -- 2,944
Provision for restructuring and other
charges................................. -- -- 4,308 -- --
Stock option compensation................. -- -- -- -- 44,763
Changes in assets and liabilities
Accounts receivable....................... (24,711) 61,710 1,253 (10,059) (712)
Inventories............................... (13,802) 8,103 14,970 9,384 (7,289)
Other current assets...................... (1,259) 1,051 (3,133) 1,893 1,324
Accounts payable.......................... (2,728) (2,578) (352) 3,885 6,284
Accrued liabilities....................... 3,280 8,246 30,298 5,731 26,933
Other..................................... 360 (343) (2,342) 288 (15,427)
-------- --------- ----------- -------- ---------
Net cash provided from operating
activities........................... 83,449 145,536 145,950 99,007 86,832
-------- --------- ----------- -------- ---------
INVESTING ACTIVITIES:
Purchases of plant and equipment, net....... (31,117) (24,201) (11,905) (8,475) (8,609)
Purchase of business, net of cash
acquired.................................. -- -- (29,136) -- (163,058)
-------- --------- ----------- -------- ---------
Net cash used in investing activities... (31,117) (24,201) (41,041) (8,475) (171,667)
-------- --------- ----------- -------- ---------
FINANCING ACTIVITIES:
Dividends paid to American Home Products.... (93,761) (5,818) (1,539) -- --
Change in former parent company's investment
and advances, net......................... 42,134 (115,793) (99,121) (90,632) --
Increase (decrease) due to banks............ -- -- 9,278 -- (2,151)
Redemption of common stock of IHF and
distribution to American Home Products
Corporation............................... -- -- (1,209,000) -- --
Issuance of long-term bank debt............. -- -- 670,000 -- 80,000
Issuance of Senior Subordinated Notes....... -- -- 400,000 -- --
Payment of debt issuance costs.............. -- -- (30,649) -- --
Retirement of Heritage long-term debt and
accrued interest.......................... -- -- (40,763) -- --
Issuance of common stock, net of issuance
costs..................................... -- -- 242,744 -- --
Repayment of long-term debt................. -- -- -- -- (29,500)
Borrowing from revolving credit facility for
acquisitions.............................. -- -- -- -- 86,000
Repayment for borrowing from revolving
credit facility........................... -- -- -- -- (15,000)
Payment to minority stockholder............. -- -- -- -- (16,556)
-------- --------- ----------- -------- ---------
Net cash used in financing activities... (51,627) (121,611) (59,050) (90,632) 102,793
-------- --------- ----------- -------- ---------
Effect of exchange rates on cash............ (705) 276 -- 100 (97)
-------- --------- ----------- -------- ---------
Increase in cash and cash equivalents....... -- -- 45,859 -- 17,861
Cash and cash equivalents at beginning of
period.................................... -- -- -- -- 45,859
-------- --------- ----------- -------- ---------
Cash and cash equivalents at end of
period.................................... $ -- $ -- $ 45,859 $ -- $ 63,720
======== ========= =========== ======== =========
Cash paid during the period for:
Interest.................................. -- -- 5,568 -- 63,449
Income taxes.............................. 3,528 2,409 827 13,902 432
</TABLE>

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

F-7
<PAGE> 86

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS)
(SEE NOTES 1 AND 2)

(DATA WITH REGARD TO SEPTEMBER 30, 1996 AND 1997
AND FOR THE NINE MONTHS THEN ENDED ARE UNAUDITED)

(1) DESCRIPTION OF BUSINESS, MERGER, AND ACQUISITION

BACKGROUND AND BASIS OF PRESENTATION

On September 5, 1996, American Home Products Corporation ("American Home
Products"), AHP Subsidiary Holding Corporation and other parties entered into an
agreement ("Agreement") pursuant to which an affiliate ("Hicks Muse Holding") of
Hicks, Muse, Tate & Furst Equity Fund III, L.P. ("Hicks Muse") acquired,
effective November 1, 1996, an 80 percent interest in International Home Foods,
Inc. ("IHF" or "the Company") and its subsidiary, M. Polaner, Inc., for
approximately $1,226,000. In connection with this transaction (the "IHF
Acquisition"), American Home Products contributed all of its other food products
businesses into IHF. Effective November 1, 1996, these entities and businesses
constitute IHF. In connection with the Agreement, IHF received $264,000 of
equity financing and incurred indebtedness of $1,070,000. Approximately $962,000
of the proceeds was used to redeem shares of common stock of IHF which were
indirectly held by American Home Products and $264,000 was distributed to
American Home Products. At December 31, 1996, the Company has a liability to
American Home Products of $16,556 for the estimated unpaid redemption amount due
upon final determination of the purchase price. As a result of the redemption,
American Home Products continues to beneficially own approximately 20 percent of
the Company. The IHF Acquisition has been accounted for as a leveraged
recapitalization such that the Company's assets and liabilities remain at their
historical bases for financial reporting purposes; for income tax purposes, the
transaction has been treated as a taxable business combination such that the
consolidated financial statements reflect a "step-up" in tax basis (see Note 8).

Earnings, advances, withdrawals, dividends, foreign currency translation
adjustments, and other transactions between the Company and American Home
Products for periods prior to November 1, 1996 are reflected in former parent
company's investment and advances in the accompanying financial statements which
are presented on a combined basis prior to November 1, 1996 and on a
consolidated basis subsequent to November 1, 1996. The combined financial
statements for periods prior to November 1, 1996 reflect the financial position,
results of operations, and cash flows of the Company as if the Company was a
stand-alone entity. The Company began presenting retained earnings (accumulated
deficit) as a separate component of stockholders' equity (deficiency) effective
November 1, 1996.

The effects of the IHF Acquisition are summarized as follows:

<TABLE>
<CAPTION>
<S> <C>
Redemption and distribution to AHP Subsidiary Holding
Corporation............................................... $(1,225,556)
Issuance of common stock.................................... 264,000
Fees........................................................ (21,256)
Recognition of postretirement benefits obligation........... (16,207)
Deferred income taxes....................................... 368,358
-----------
$ (630,661)
===========
</TABLE>

Pro forma unaudited net income (loss) for the years ended December 31, 1995
and 1996, assuming the IHF Acquisition had occurred at the beginning of 1995,
would have been ($22,002) and $31,241, respectively. Decreases to reported net
income result from increased pro forma interest expense, partially offset by the
related tax effects. The unaudited pro forma amounts do not purport to be
indicative of what the Company's actual results of operations would have been
had the IHF Acquisition been consummated on January 1, 1995 or to project the
Company's results of operations for any future period.

F-8
<PAGE> 87

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles and necessarily include amounts based
on judgments and estimates made by management. Actual results could differ from
these estimates. Estimates are used when accounting for potential bad debts,
inventory obsolescence and spoilage, trade and promotion allowances, coupon
redemptions, depreciation and amortization, deferred income taxes and tax
valuation allowances, restructuring charges, and contingencies, among other
items.

ACQUISITION

Immediately after the IHF Acquisition and effective November 1, 1996, the
Company acquired Heritage Brands Holdings, Inc. and subsidiaries ("Heritage")
for approximately $70,800, including the assumption of approximately $40,800 of
debt which was repaid immediately following consummation of the acquisition, in
a transaction accounted for using the purchase method of accounting. The excess
of the purchase price of Heritage over the fair value of assets acquired and
liabilities assumed resulted in goodwill and other intangible assets of
approximately $59,100 (an increase of approximately $25,000 over the amount of
Heritage's unamortized goodwill and intangible assets prior to the acquisition)
which are being amortized over 20 years. The acquisition was not significant
and, accordingly, pro forma financial information has not been provided. The
results of operations and cash flows of Heritage have been included in the
accompanying consolidated financial statements of the Company since November 1,
1996.

BUSINESS

The Company operates in one business segment which manufactures and markets
a diversified portfolio of shelf-stable food products. The Company sells its
products primarily in the United States and Canada and is not dependent on any
single or major group of customers for its sales. The Company's canned pasta
product line accounted for approximately 40-50 percent of consolidated sales for
all periods presented.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

PRINCIPLES OF COMBINATION/CONSOLIDATION

For periods through October 31, 1996, the accompanying financial statements
included the operations of the following indirect wholly-owned subsidiaries of
American Home Products: American Home Food Products, Inc. (now, the Company) and
its subsidiary M. Polaner, Inc., American Home Foods, Inc. (now I.H.F.P, Inc.),
Luck's Incorporated, Canadian Home Products Limited, and certain related assets
owned by American Home Products (collectively, American Home Food Products) and
its subsidiaries. Effective November 1, 1996, the consolidated operations of the
Company include the aforementioned entities and Heritage (see Note 1). All
significant intercompany balances and transactions have been eliminated in the
combined and consolidated financial statements. The accompanying combined and
consolidated financial statements are referred to herein as "consolidated"
financial statements.

CASH AND CASH EQUIVALENTS

All highly liquid investments with original maturities of three months or
less are considered to be cash equivalents. The Company's cash and cash
equivalents at December 31, 1996 and September 30, 1997 consist of cash in banks
and investments in the commercial paper of several companies.

F-9
<PAGE> 88

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

INVENTORIES:

Inventories are valued at the lower of cost or market, with cost determined
on a first-in, first-out basis.

PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment are stated at cost. Normal maintenance and
repairs are expensed. Additions and improvements either to provide necessary
capacity, improve the efficiency of production, or to modernize the facilities
are capitalized. Depreciation is calculated using the straight-line method over
the estimated useful lives of the related assets; generally 40 years for
building and leasehold improvements, 15 years for machinery and equipment, and 5
to 20 years for furniture and fixtures.

INTANGIBLE AND OTHER ASSETS:

Goodwill represents the excess of cost over the fair value of net assets
acquired and is being amortized using the straight-line method over periods of
20-40 years. Deferred financing costs relate to costs incurred in connection
with the agreements for bank and other indebtedness. Such costs are being
amortized over the terms of the financings using the interest or straight-line
method, as appropriate. Amortization of deferred financing costs is included in
interest expense in the accompanying consolidated financial statements.

The Company continually reviews goodwill to evaluate whether changes have
occurred that would suggest goodwill may be impaired based on the estimated cash
flows of the entity acquired over the remaining amortization period. If this
review indicates that the remaining estimated useful life of goodwill requires
revision or that the goodwill is not recoverable, the carrying amount of the
goodwill is reduced by the estimated shortfall of cash flows on a discounted
basis.

During 1995, Statement of Financial Accounting Standards (SFAS) No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of," was issued. The effect of adopting this pronouncement in 1996
was not significant.

RESEARCH AND DEVELOPMENT:

Research and development costs are charged to expense as incurred and
amounted to $6,782, $6,447 and $3,823 for the years ended December 31, 1994,
1995 and 1996 and $7,415 and $3,343 for the nine months ended September 30, 1996
and 1997, respectively.

ADVERTISING:

Advertising costs are charged to expense as incurred and amounted to
$32,839, $42,386, and $58,551 for the years ended December 31, 1994, 1995 and
1996 and $42,974 and $45,896 for the nine months ended September 30, 1996 and
1997, respectively.

FORMER PARENT COMPANY INVESTMENT AND ADVANCES:

Former parent company's investment and advances includes the stockholder's
equity of the individual American Home Products subsidiaries described in Note
2. The equity of the individual subsidiaries represents the original investment
by American Home Products, plus accumulated net income and net advances,
withdrawals and dividends. For periods prior to November 1, 1996, cash receipts
were transferred to American Home Products by daily cash sweeps, and American
Home Products made funds available for operating expenses.

F-10
<PAGE> 89

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

INTERIM FINANCIAL INFORMATION:

The unaudited consolidated financial statements and related disclosures
presented herein have been prepared by the Company without audit and, in the
opinion of management, contain all adjustments necessary to present fairly and
on a basis consistent with the consolidated financial statements for the year
ended December 31, 1996, the Company's consolidated financial position as of
September 30, 1997, and the results of their operations and cash flows for the
nine months ended September 30, 1996 and 1997.

The results of operations for the nine months ended September 30, 1997 are
not necessarily indicative of the results to be expected for the entire year.

FOREIGN CURRENCY TRANSLATION:

The assets and liabilities of the Company's foreign subsidiary, Canadian
Home Products Limited, are translated into United States dollars at period end
exchange rates. Income, expense and cash flow amounts are translated using
monthly average exchange rates. Translation adjustments were accumulated in
former parent company investment and advances through October 31, 1996 and
effective November 1, 1996, are accumulated as a separate component of
stockholders' deficiency. Transaction gains and losses are reflected in other
income (expense) net, and have not been significant.

FINANCIAL INSTRUMENTS:

The cost of interest rate collars is amortized as interest expense over the
terms of the related agreements. Interest expense is adjusted, if required, to
reflect the interest rates included in these collar agreements.

INCOME (LOSS) PER SHARE:

Net income (loss) per share is based on the weighted average number of
shares of common stock and common stock equivalents outstanding during each
respective period. Proceeds from the exercise of the dilutive stock options are
assumed to be used to repurchase outstanding shares of the Company's common
stock at the estimated average fair market value during the period for primary
earnings per share and the higher of the estimated average or period end fair
market value for fully dilutive earnings per share. (See Note 16(b)).

INCOME TAXES:

The Company's operations were included in the consolidated income tax
returns of American Home Products through October 31, 1996. The Company was
charged by American Home Products based on the statutory tax rates adjusted for
permanent differences, but without regard for temporary differences.
Accordingly, the Company's financial statements for periods prior to the IHF
Acquisition do not reflect deferred tax assets or liabilities since those
amounts were being provided for by American Home Products. Deferred tax assets
and liabilities prior to the IHF Acquisition would have reflected temporary
differences between assets and liabilities for financial reporting purposes and
income tax purposes. Such temporary differences were primarily attributable to
depreciation, allowances for doubtful accounts, and nondeductible reserves and
were not significant through October 31, 1996. The income tax provision on a
stand-alone basis for periods prior to November 1, 1996 would not differ
materially from the income tax provision reflected in the accompanying
consolidated financial statements.

Effective November 1, 1996, the Company's operations are included in the
consolidated federal income tax returns of its parent. For periods after
November 1, 1996, the Company's income tax provision has been prepared on a
separate return basis, with deferred income taxes provided for differences in
the financial statement and tax bases of assets and liabilities. The tax effects
of the temporary differences which resulted

F-11
<PAGE> 90

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

from the "step-up" in tax basis (see Notes 1 and 8) have been reflected in
stockholders' equity (deficiency) as of November 1, 1996. The Company intends to
permanently reinvest its undistributed Canadian earnings in the Canadian
operations; accordingly, deferred income taxes, which would not be significant,
have not been provided for the repatriation of such undistributed earnings.

RECLASSIFICATIONS:

Certain 1994 and 1995 amounts have been reclassified to conform with the
1996 presentation.

(3) INVENTORIES

Inventories are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------- SEPTEMBER 30,
1995 1996 1997
(UNAUDITED)
<S> <C> <C> <C>
Raw materials.................................... $ 27,175 $ 29,932 $ 54,071
Work in progress................................. 30,117 26,790 23,621
Finished goods................................... 82,558 72,483 122,570
-------- -------- --------
Total.................................. $139,850 $129,205 $200,262
======== ======== ========
</TABLE>

(4) PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------- SEPTEMBER 30,
1995 1996 1997
(UNAUDITED)
<S> <C> <C> <C>
Land............................................. $ 4,494 $ 4,589 $ 7,679
Buildings and leasehold improvements............. 101,622 107,923 118,803
Machinery and equipment.......................... 172,093 185,867 194,325
Furniture and fixtures........................... 18,893 19,917 21,841
-------- -------- ---------
297,102 318,296 342,648
Less -- accumulated depreciation and
amortization................................... 120,347 132,294 141,719
-------- -------- ---------
Total.................................. $176,755 $186,002 $ 200,929
======== ======== =========
</TABLE>

Depreciation expense aggregated $13,380, $17,144 and $15,683 for the years
ended December 31, 1994, 1995, 1996 and $11,710 and $13,411 for the nine months
ended September 30, 1996 and 1997, respectively.

(5) INTANGIBLE AND OTHER ASSETS

Intangible assets are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------- SEPTEMBER 30,
1995 1996 1997
(UNAUDITED)
<S> <C> <C> <C>
Goodwill and tradenames......................... $110,579 $169,749 $254,956
Less -- accumulated amortization................ 13,136 15,811 20,574
-------- -------- --------
Net intangible assets...................... $ 97,443 $153,938 $234,382
======== ======== ========
</TABLE>

F-12
<PAGE> 91

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

Amortization of intangibles totaled $13,010, $13,010 and $2,675 for the
years ended December 31, 1994, 1995 and 1996 and $2,007 and $4,763 for the nine
months ended September 30, 1996 and 1997, respectively. All fully amortized
intangibles have been retired.

Other assets at December 31, 1996 and September 30, 1997 include deferred
financing fees incurred in connection with the Company's issuance of long-term
debt. Such costs aggregated $32,149; amortization expense for the period
November 1, 1996 (date of debt issuance) to December 31, 1996 and for the nine
months ended September 30, 1997 was $661 and $3,747, respectively.

(6) ALLOWANCE FOR DOUBTFUL ACCOUNTS AND SALES RETURNS AND ALLOWANCES

The allowance for doubtful accounts and sales returns and allowances and
their related activity, are as follows:

<TABLE>
<CAPTION>
WRITE-OFFS AND
BEGINNING CHARGED REDUCTIONS, NET ENDING
BALANCE TO EXPENSE OF RECOVERIES BALANCE
<S> <C> <C> <C> <C>
Year Ended December 31, 1994........ $3,126 $ 588 $240 $3,474
Year Ended December 31, 1995........ 3,474 1,103 513 4,064
Year Ended December 31, 1996........ 4,064 563 296 4,331
Nine Months Ended September 30, 1997
(unaudited)...................... 4,331 994 116 5,209
</TABLE>

(7) BUSINESS RESTRUCTURING AND OTHER CHARGES

In December 1996, a pretax charge was recorded for severance costs of
$3,240 and other charges (principally non-cash) of $1,068.

The severance charge covers both voluntary and involuntary terminations of
approximately 125 employees, including management, sales and marketing,
technical, and administrative personnel. Employee separations were substantially
completed prior to December 31, 1996.

During 1996, cash payments of $437 were charged against the business
restructuring reserve. Management believes that the remaining reserves for
business restructuring of $2,871 at December 31, 1996 are adequate to complete
its plans. As of September 30, 1997, all of the remaining cash payments were
made.

(8) INCOME TAXES

The provision for income taxes is as follows:

<TABLE>
<CAPTION>
FOR THE NINE MONTHS
DECEMBER 31, ENDED SEPTEMBER 30,
----------------------------- -------------------
1994 1995 1996 1996 1997
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Domestic......................... $54,558 $24,126 $45,334 $38,754 $3,716
Foreign.......................... 2,567 2,411 1,193 994 413
State............................ 6,171 2,877 6,792 5,828 104
------- ------- ------- ------- ------
$63,296 $29,414 $53,319 $45,576 $4,233
======= ======= ======= ======= ======
</TABLE>

F-13
<PAGE> 92

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

A reconciliation between the Company's effective tax rate and U.S.
statutory rate is as follows:

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
-------------------- --------------
1994 1995 1996 1996 1997
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
U.S. statutory rate............................ 35% 35% 35% 35% 35%
State tax, net of federal benefit.............. 3 3 4 3 5
Amortization of other intangibles and purchase
price over fair value........................ 2 5 -- -- --
Other.......................................... -- -- -- -- 1
--- --- --- --- ---
Effective tax rate............................. 40% 43% 39% 38% 41%
=== === === === ===
</TABLE>

The provision for income taxes for 1996 is as follows:

<TABLE>
<CAPTION>
PERIOD FROM PERIOD FROM
JANUARY 1, 1996 TO NOVEMBER 1, 1996 TO
OCTOBER 31, 1996 DECEMBER 31, 1996
<S> <C> <C>
Current:
Federal.......................................... $46,136 $ --
Foreign.......................................... 1,228 41
State............................................ 6,944 2
------- -------
54,308 43
------- -------
Deferred:
Federal.......................................... -- (802)
Foreign.......................................... -- (76)
State............................................ -- (154)
------- -------
-- (1,032)
------- -------
$54,308 $ (989)
======= =======
</TABLE>

For federal and state income tax purposes, the IHF Acquisition (see Note 1)
is a taxable business combination and is a qualified stock purchase. The buyer
and seller have elected jointly to treat the IHF Acquisition as an asset
acquisition under Section 338(h)(10) of the Internal Revenue Code of 1986, as
amended. A preliminary allocation of the purchase price to the tax bases of
assets and liabilities based on their respective estimated fair values at
November 1, 1996 has been made for income tax purposes and will be finalized
during 1997. In connection with the IHF Acquisition, the Company has recorded a
deferred tax asset of approximately $368,000 at November 1, 1996 related to
future tax deductions for the net excess of the tax bases of the assets and
liabilities over the financial statement carrying amounts with a corresponding
credit to additional paid-in capital. Historically, the Company has generated
operating income and realization of the deferred tax assets is dependent upon
the Company's ability to generate sufficient future taxable income which
management believes is more likely than not. The Company anticipates future
taxable income after debt service and adjusting for the effects of the IHF
Acquisition and acquisition discussed in Note 1 sufficient to realize the
deferred tax assets existing at November 1, 1996, December 31, 1996 and
September 30, 1997. Future taxable income is based on management's forecasts of
the operating results of the Company and there can be no assurance that such
results will be achieved. Management continually reviews such forecasts in
comparison with actual results and expected trends. In the event management
determines that sufficient future taxable income may not be generated to fully
realize the deferred tax assets, the Company will provide a valuation allowance
by a charge to income tax expense in the period of such determination.

F-14
<PAGE> 93

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

As discussed in Note 2, the Company's consolidated financial statements for
periods prior to November 1, 1996 do not reflect deferred income taxes as all
such taxes were provided for by American Home Products. Deferred tax assets and
liabilities established as a result of the IHF Acquisition and the purchase of
Heritage have been reflected on the accompanying consolidated balance sheets,
effective November 1, 1996, as an adjustment to the former parent company's
investment and advances account or goodwill, as appropriate.

The components of deferred tax assets at November 1, 1996, December 31,
1996, and September 30, 1997 are as follows:

<TABLE>
<CAPTION>
NOVEMBER 1, DECEMBER 31, SEPTEMBER 30,
1996 1996 1997
(UNAUDITED)
<S> <C> <C> <C>
Current deferred tax assets:
Allowance for doubtful accounts............... $ 2,196 $ 1,771 $ 2,570
Inventory reserves............................ 14,813 2,850 5,248
Other accruals................................ 2,557 6,950 6,149
-------- -------- --------
Net current deferred tax assets................. 19,566 11,571 13,967
Noncurrent deferred tax assets:
Property, plant, and equipment................ 15,668 15,607 14,506
Tradenames.................................... 189,909 187,689 175,577
Goodwill...................................... 139,874 137,813 128,593
Stock options................................. -- -- 18,353
Other......................................... 829 855 1,035
Net operating loss carryforwards.............. 727 14,070 12,630
Valuation allowance........................... (3,000) (3,000) (3,000)
-------- -------- --------
Net noncurrent deferred tax assets.............. 344,007 353,034 347,694
-------- -------- --------
Net deferred tax assets......................... $363,573 $364,605 $361,661
======== ======== ========
</TABLE>

At December 31, 1996, the Company had a net operating loss carryforward for
federal and state income tax purposes of approximately $35,500 which expires
principally in 2011. The Company has established a $3,000 valuation allowance
related to certain deferred tax assets for state purposes due to state
limitations regarding the utilization of net operation loss carryforwards.

(9) LONG-TERM DEBT

Long-term debt at December 31, 1996 and September 30, 1997 is as follows:

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
(UNAUDITED)
<S> <C> <C>
Senior secured bank facilities:
Tranche A............................................... $ 300,000 $ 351,500
Tranche B............................................... 200,000 369,000
Tranche C............................................... 170,000 --
Revolver................................................ -- 71,000
---------- ----------
670,000 791,500
Senior Subordinated Notes................................. 400,000 400,000
---------- ----------
1,070,000 1,191,500
Less: Current portion................................... 26,000 110,000
---------- ----------
Long-term debt.......................................... $1,044,000 $1,081,500
========== ==========
</TABLE>

In connection with the purchase of an 80% interest in the Company by an
affiliate of Hicks Muse from a subsidiary of American Home Products and the
acquisition of Heritage and related assumption of Heritage's debt (see Note 1),
the Company entered into a $770,000 Credit Agreement with Chase Manhattan Bank,

F-15
<PAGE> 94

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

Bankers Trust Company, and Morgan Stanley Senior Funding, Inc. (see Note 16) and
issued $400,000 of 10 3/8% Senior Subordinated Notes ("Senior Subordinated
Notes"). The Credit Agreement provides for term loans ("Term Loans") in three
tranches aggregating $670,000 and a revolving credit loan facility ("Revolver")
of $100,000. At December 31, 1996, there were no borrowings under the Revolver
nor were any letters of credit outstanding.

Tranche A of the Term Loans is a $300,000, 6 1/2-year facility; Tranche B
of the Term Loans is a $200,000, eight-year facility; and Tranche C of the Term
Loans is a $170,000, nine-year facility. Each tranche requires semi-annual
principal payments in increasing amounts, and amounts paid under the Term Loans
may be not be reborrowed. Borrowings under the Term Loans and the Revolver bear
interest based on either the London Interbank Offered Rate ("LIBOR") or an
Alternate Base Rate, as defined, plus applicable margins which range from 0.5
percent to 3.5 percent. At December 31, 1996, the rates in effect on Tranches A,
B, and C were 8.0%, 8.6%, and 9.1%, respectively. In accordance with the Credit
Agreement, in February 1997, the Company entered into interest rate protection
agreements to the extent necessary to provide that, when combined with the
Senior Subordinated Notes, at least 50% of the Company's aggregate indebtedness
is subject to either a fixed interest rate or interest rate protection through
December 1998. Included in the Term Loans are certain Eurodollar loans which
qualify as fixed interest under the terms of the Credit Agreement. In order to
comply with required interest rate protection provisions, the Company also
entered into an interest rate collar transaction that becomes effective in
September 1997 and expires in December 1998. The notional amount of the collar
is $135,000 with the cap set at 8% and the floor set at 5.25%. The agreement is
with a financial institution having a credit rating (Moody's/S&P) of Aa3/A+,
which minimizes non-performance risk.

Borrowings and letters of credit issued under the Revolver are available to
the Company until the earlier of March 31, 2003 or the date on which the Tranche
A Term Loans mature or are repaid in full. The Company pays a commitment fee of
0.5% on the unused portion of the Revolver.

The Company is required to make mandatory prepayments on the Term Loans and
credit commitments under the Revolver will be mandatorily reduced based on (a)
excess levels of cash flow, as defined; (b) all of the net proceeds from certain
asset or subsidiary dispositions; and (c) the issuance of capital stock or the
incurrence of certain indebtedness. At the Company's option, loans may be
prepaid and credit commitments under the Revolver may be permanently reduced.

Obligations under the Credit Agreement are unconditionally and irrevocably
guaranteed by each of the Company's domestic subsidiaries. In addition, such
obligations are collateralized by first priority or equivalent collateral
interests in (a) all of the capital stock of, or other equity interests in, each
domestic subsidiary of the Company and 65% of the capital stock, or other equity
interests in, each foreign subsidiary of the Company and (b) all tangible and
intangible assets of the Company and its subsidiaries, subject to certain
exceptions and qualifications.

The Credit Agreement also contains a number of significant covenants that,
among other things, restrict the ability of the Company to dispose of assets,
incur additional indebtedness, repay other indebtedness, pay dividends, make
investments or acquisitions, engage in mergers or consolidations, make capital
expenditures, or engage in certain transactions with affiliates, and otherwise
restrict corporate activities. In addition, under the Credit Agreement,
effective beginning March 31, 1997, the Company is required to comply with
specified minimum interest coverage, maximum leverage, and minimum fixed charge
coverage ratios, as defined.

The Senior Subordinated Notes are due on November 1, 2006 and require
semi-annual interest payments. The Senior Subordinated Notes may be redeemed
prior to November 1, 2000 in up to an aggregate principal amount of $160,000
with the proceeds of one or more equity offerings, as defined, by the Company
under certain conditions at a redemption price of 110.375 percent. The Senior
Subordinated Notes may also

F-16
<PAGE> 95

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

be redeemed prior to November 1, 2001 at a redemption price of 100 percent upon
the occurrence of a change in control, as defined. Except as discussed above,
the Senior Subordinated Notes are not redeemable prior to November 1, 2001. The
Senior Subordinated Notes will be redeemable, in whole or in part, at the
Company's option at redemption prices decreasing from 105.188% at November 2001
to 100 percent on November 1, 2004 and thereafter.

Each of the Company's subsidiaries (I.H.F.P., Inc., Luck's Incorporated,
Canadian Home Products Limited, M. Polaner, Inc., and Heritage) fully and
unconditionally guarantee the Senior Subordinated Notes, on a joint and several
basis.

The Senior Subordinated Notes contain certain restrictive covenants
limiting, among other things (a) the incurrence of additional indebtedness; (b)
the declaration or payment of dividends or other capital stock distributions or
redemptions; (c) the redemption of certain subordinated obligations; (d)
investments; (e) sales of assets; and (f) consolidations, mergers, and transfers
of all or substantially all of the Company's assets.

The Company filed a registration statement on Form S-4 pursuant to the
Securities Act of 1933, which became effective on February 19, 1997, to register
the Senior Subordinated Notes. The Company has issued a Prospectus to offer to
exchange the unregistered Senior Subordinated Notes for registered Senior
Subordinated Notes. The exchange offer expired on March 27, 1997 and all of the
Senior Subordinated Notes have been exchanged.

The fair value of the Company's debt at December 31, 1996 and September 30,
1997 approximates its carrying value.

Future principal payments on the Company's long-term debt at December 31,
1996 are as follows:

<TABLE>
<S> <C>
1997........................................................ $ 26,000
1998........................................................ 31,000
1999........................................................ 41,000
2000........................................................ 51,000
2001........................................................ 58,500
Thereafter.................................................. 862,500
----------
$1,070,000
==========
</TABLE>

(10) EMPLOYEE BENEFIT PLANS:

For the American Home Products defined benefit pension plans in which the
Company participated prior to the IHF Acquisition, the amounts charged to the
Company by American Home Products aggregated $2,651 and $2,762 for the years
ended December 31, 1994, 1995, $3,188 for the period January 1, 1996 to October
31, 1996, and $2,848 for the nine months ended September 30, 1996, respectively.

The postretirement health care costs relating to the Company's
participation in the American Home Products postretirement plan represented
charges for actual retiree benefit costs based on the ratio of the Company's
participants to total American Home Products participants and aggregated $3,334
and $3,494 for the years ended December 31, 1994 and 1995, $3,239 for the period
January 1, 1996 to October 31, 1996, and $2,933 for the nine months ended
September 30, 1996, respectively.

In periods prior to November 1, 1996, the Company participated in certain
defined contribution plans sponsored by American Home Products. Expense
recognized for these plans aggregated $1,082 and $1,027 for the years ended
December 31, 1994 and 1995, $955 for the period from January 1, 1996 to October
31, 1996, and $849 for the nine months ended September 30, 1996, respectively.

F-17
<PAGE> 96

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

For periods prior to the IHF Acquisition the Company has not provided
certain disclosures required by Statement of Financial Accounting Standards No.
87, "Employers' Accounting for Pensions" since, under the American Home Products
plans, the assets are not segregated or restricted by subsidiary and the benefit
obligations have not been assumed by the Company. Further, certain disclosures
prescribed by Statement of Financial Accounting Standards No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions," have not been
provided since the American Home Products plan is unfunded and the American Home
Products plan's benefit obligations will not be assumed by the Company.

In conjunction with the IHF Acquisition, and pursuant to the American Home
Products Agreement of Sale and Plan of Merger ("Sale Agreement"), the Company
adopted new pension and postretirement plans for individuals previously covered
under the American Home Products pension and postretirement plans, with
provisions and benefits substantially equivalent to those of the American Home
Products Plans.

The Company sponsors various retirement plans for substantially all of its
employees. The Company sponsors two insignificant defined benefit pension plans
for collectively-bargained employees of its Highspire and Canadian operations.
It is the Company's policy to contribute the amounts necessary to meet the
minimum funding requirements of defined benefit plans under applicable laws. The
aggregate accumulated benefit obligation, projected benefit obligation, plan
assets, and accrued pension costs of the Highspire and Canadian plans were $153,
$154, $136, and $19, respectively, at December 31, 1996. Net periodic pension
cost for the Highspire and Canadian plans was insignificant for all periods
presented. Assumptions used in accounting for these plans included a
weighted-average discount rate of 7.5 percent, an expected long-term rate of
return on plan assets of 7.5 percent, and a rate of increase in compensation
levels of 0-3.5 percent.

Effective January 1, 1997, the Company established defined benefit plans
for its salaried and collectively-bargained employees. Benefits earned under the
plan will include service from November 1, 1996 to December 31, 1996; prior
service cost for the two-month period was insignificant. Benefits under the
plans will be based primarily on compensation levels and years of service.

Pursuant to the Sale Agreement, the Company provides certain health care
and life insurance benefits for most of its retired employees. Generally,
employees become eligible for benefits after attaining specified age and service
requirements. In connection with the IHF Acquisition, at November 1, 1996, the
Company has recorded its postretirement benefits obligation with a corresponding
charge to paid-in capital. The following table sets forth the plan's funded
status reconciled with amounts reported in the Company's consolidated balance
sheet:

<TABLE>
<CAPTION>
NOVEMBER 1, 1996 DECEMBER 31, 1996
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees.................................................. $ -- $ --
Fully eligible participants............................... -- --
Other active participants................................. (16,207) (16,855)
-------- --------
Total benefits earned....................................... (16,207) (16,855)
Plan assets at fair value................................. -- --
-------- --------
Funded status............................................... (16,207) (16,855)
Unrecognized net loss....................................... -- 166
-------- --------
Accrued postretirement benefit obligation................... $(16,207) $(16,689)
======== ========
</TABLE>

F-18
<PAGE> 97

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

Net periodic postretirement benefit cost for the period from November 1,
1996 to December 31, 1996 consisted of the following components:

<TABLE>
<S> <C>
Service cost................................................ $245
Interest cost on postretirement benefit obligation.......... 237
----
Net periodic postretirement benefit cost.......... $482
====
</TABLE>

Net periodic postretirement benefit cost for the nine months ended
September 30, 1997 was $2,025.

The discount rate used to measure the accumulated postretirement benefit
obligation as of November 1, 1996, December 31, 1996 and September 30, 1997 was
7.5 percent. The assumed health care cost trend rate used to measure the
expected cost of benefits was 8.5 percent for 1996 and is assumed to trend
downward to 6.0 percent for 2010 and thereafter. The health care trend rate has
a significant effect on the amounts reported. For example, increasing the health
care cost trend rate by one percentage point in each year would increase the
accumulated postretirement benefit obligation as of December 31, 1996 by $3,686
and the service cost and interest components of the net periodic postretirement
benefit cost for the period from November 1, 1996 to December 31, 1996 by $100.

Effective November 1, 1996, the Company also sponsors a 401(k) defined
contribution plan for nonunion employees. Contributions for the period November
1, 1996 to December 31, 1996 were insignificant. Employer contributions for the
nine months ended September 30, 1997 amounted to $675.

The Company also participates in union-sponsored multiemployer pension,
life insurance and health and welfare plans which provide benefits to union
employees located at the Company's facility in Vacaville, CA. The Company's
contributions to these plans were $2,885, $3,121 and $2,993 for the years ended
December 31, 1994, 1995, and 1996, respectively, and $2,212 and $2,164 for the
nine months ended September 30, 1996 and 1997, respectively.

(11) RELATED PARTY TRANSACTIONS:

The consolidated statements of income for periods through October 31, 1996
included the costs of certain administrative and other services provided by
American Home Products. These services included treasury, tax, personnel, legal,
environmental, safety, public relations, audit, and other related costs. The
charges to the Company for corporate administration approximated $2,500 through
October 31, 1996. Charges for the nine month period ended September 30, 1996
amounted to $2,204. Such charges are representative of costs which would have
been incurred by the Company on a stand alone basis.

American Home Products also charged the Company for its share of group
insurance costs (medical, dental, basic life, etc.) based on American Home
Product's historical claims experience and current claim trends and the ratio of
the Company's employees to total American Home Products domestic employees. The
charges, which are reflected in the accompanying consolidated statements of
income, amounted to $11,733 and $11,941 for the years ended December 31, 1994
and 1995, and $9,143 for the 10 months ended October 31, 1996, respectively.
Charges for the nine months ended September 30, 1996 were $8,598.

The consolidated statements of income include rent for 35,000 square feet
of space in American Home Product's corporate headquarters. The rent expense
related to this space amounted to $965, $905, and $946 for the years ended
December 31, 1994, 1995, and 1996, respectively. The Company vacated this space
and relocated its corporate headquarters at the end of 1996.

Various self-insurance coverages were provided to the Company through
American Home Product's consolidated programs through October 31, 1996. Auto,
property, product liability, and other insurance coverages provided by American
Home Products were allocated to the Company based on past claims history,

F-19
<PAGE> 98

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

exposure, trends, and judgment. The changes, which are reflected in the
accompanying consolidated statements of income for the years ended December 31,
1994 and 1995 and for the 10 months ended October 31, 1996 amounted to $426, and
$421, and $346, respectively. Charges for the nine months ended September 30,
1996 were $321.

The Company purchased advertising through a wholly-owned subsidiary of
American Home Products through 1996. The rates at which the Company purchased
advertising reflected the rates obtained by the consolidated purchasing of
American Home Products. The charges, which are reflected in the accompanying
consolidated statements of income for the years ended December 31, 1994, 1995
and 1996, amounted to $32,839, $42,386, and $45,186, respectively. Charges for
the nine months ended September 30, 1996 and 1997 amounted to $42,974 and $727,
respectively.

Effective November 1, 1996, the Company entered into a transition services
agreement with American Home Products under which American Home Products, until
six months after November 1, 1996, provides to the Company, for a fee, certain
facilities and services. In addition, American Home Products agreed to assist
the Company for 90 days after November 1, 1996 with the administration of
welfare benefit plans for payment by the Company to American Home Products based
on past practices. Charges to date by American Home Products to the Company
under these arrangements were insignificant.

Effective November 1, 1996, the Company entered into a 10-year monitoring
and oversight agreement with an affiliate of its indirect majority stockholder,
Hicks Muse. The agreement provides for an annual fee of the greater of $1,000 or
0.1 percent of the budgeted consolidated net sales of the Company for the
current year. In addition, effective November 1, 1996, the Company entered into
a financial advisory agreement with the affiliate under which the affiliate will
be entitled to a fee of 1.5 percent of the transaction value, as defined, for
each add-on transaction, as defined. In 1996, the Company incurred financial
advisory fees of $167 and paid transaction fees of $19,320 to such affiliate
relating to the IHF Acquisition (see Note 1). Expenses under the agreement for
the nine months ended September 30, 1997 totaled $838. The Company incurred fees
in the amount of $2,445 as a result of the financial advisory agreement during
the nine months ended September 30, 1997.

Included in prepaid expenses and other current assets at December 31, 1996
is a receivable of approximately $3,600 from American Home Products for
reimbursement of payroll taxes related to option exercises by employees.

F-20
<PAGE> 99

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

Following is an analysis of the activity in the Parent Company's Investment
and Advances account for the years ended December 31, 1994, 1995, for the ten
months ended October 31, 1996 and the nine months ended September 30, 1996 and
1997:

<TABLE>
<CAPTION>
TEN MONTHS ENDED NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, OCTOBER 31, SEPTEMBER 30,
------------------------ ---------------- --------------------
1994 1995 1996 1996 1997
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Beginning balance --
Former parent company's
investment and
advances................. $423,551 $467,139 $ 384,997 $384,997 $ --
Net income.................... 95,920 39,193 84,559 74,168
Distribution of net income
through parent company's
investment and advances
account..................... (95,920) (39,193) (84,559) (74,168) --
-------- -------- --------- -------- --------
423,551 467,139 384,997 384,997 --
-------- -------- --------- -------- --------
Changes in other assets and
liabilities through the
accounts:
Depreciation and
amortization............. 26,389 30,154 15,093 13,717 --
Accounts receivable......... (24,711) 61,710 (6,585) (10,059) --
Inventories................. (13,802) 8,103 10,903 9,384 --
Prepaid expenses and other
current assets........... (1,259) 1,051 (820) 1,893 --
Other noncurrent assets..... (19) 13 34 18 --
Accounts payable............ (2,728) (2,578) 1,334 3,885 --
Accrued salaries, wages and
benefits................. (369) 197 2,248 1,309 --
Accrued advertising and
promotion................ 8,073 2,947 (168) 5,419 --
Other accrued liabilities... (4,424) 5,102 672 (997) --
Other....................... 379 (356) 1,132 270 --
Purchases of plant and
equipment,
net...................... (31,117) (24,201) (7,146) (8,475) --
-------- -------- --------- -------- --------
(43,588) 82,142 16,697 16,364 --
-------- -------- --------- -------- --------
Effect of merger
transaction................. -- -- (630,661) -- --
Transfer to common stock
Additional paid-in capital,
and foreign currency
translation adjustment on
November 1, 1996......... -- -- 262,361 -- --
-------- -------- --------- -------- --------
Ending balance --
Parent company's investment
and advances............. $467,139 $384,997 $ -- $368,633 $ --
======== ======== ========= ======== ========
</TABLE>

F-21
<PAGE> 100

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

(12) STOCK COMPENSATION PLANS

During 1995 and 1996 and in prior years, certain employees of the Company
were granted stock options under the American Home Products stock option plans.
These options had a ten-year term and generally vested one year from date of
grant. The American Home Products stock options awarded to Company employees
during 1996 or prior were exercised, canceled, or settled in cash by January 31,
1997.

Effective November 1, 1996, the Company adopted the International Home
Foods, Inc. 1996 Stock Option Plan ("the IHF Plan") which provides for the grant
of stock options at fair value on the date of grant. Generally, stock options
have a ten-year term and vest immediately or ratably over three years. Certain
options have been granted with an exercise price which increases by 8 percent
per year until the exercise date. The total number of shares of common stock
authorized for grant under the IHF Plan is 8,444,021.

The Company has adopted the disclosure-only provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation," but applies Accounting Principles
Board Opinion No. 25 and related interpretations in accounting for its plans. No
compensation expense was recognized for 1995, 1996 or for the first six months
in 1997. If the Company had elected to recognize compensation cost based on the
fair value of the options at the grant dates, consistent with the method
prescribed by SFAS No. 123, net income would have been reduced to the pro forma
amount indicated below:

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C> <C>
Net income As reported $39,193 $82,961
Pro forma $38,445 $81,735
Pro forma
income per
common
share -- $ 1.32
</TABLE>

Note: The pro forma disclosure shown above is not representative of the
effects on net income in future years.

The fair value of the American Home Products stock options used to compute
pro forma net income disclosures is the estimated present value at grant date
using the Black-Scholes option-pricing model with the following weighted-average
assumptions:

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Expected volatility....................................... 15.7% 15.0%
Expected term............................................. 4 years 4 years
Dividend yield............................................ 4.4% 4.3%
Risk-free interest rate................................... 6.1% 6.4%
</TABLE>

IHF options granted on November 1, 1996 were valued using the minimum value
method permitted under SFAS No. 123 for companies which do not have publicly
traded equity securities and the following assumptions: expected term of four
years, zero percent dividend yield, and six percent risk-free interest rate.

F-22
<PAGE> 101

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

Presented below is a summary of the status of the American Home Products'
options held by the Company's employees, and IHF stock options, for 1995 and
1996:

<TABLE>
<CAPTION>
1995 1996
---- ----
WEIGHTED WEIGHTED
SHARES AVERAGE EXERCISE SHARES AVERAGE EXERCISE
(000'S) PRICE PER SHARE (000'S) PRICE PER SHARE
<S> <C> <C> <C> <C>
American Home Products options:
Outstanding at beginning of year.......... 1,877 $30.21 1,471 $33.11
Granted................................... 510 $38.13 171 $52.99
Exercised................................. 843 $29.38 758 $32.64
Forfeited/Expired......................... 73 $36.73 12 $45.11
Settled................................... -- -- 150 *
Outstanding at end of year................ 1,471 $33.11 722 $34.20
IHF indexed options:
Granted................................... -- -- 4,832 $ 5.33
Forfeited**............................... -- -- -- --
Outstanding at December 31, 1996**........ -- -- 4,832 $ 5.38
IHF options exercisable at end of year...... -- -- 3,518 $ 5.38
IHF non-indexed options:
Granted................................... -- -- 1,751 $ 5.33
Forfeited................................. -- -- -- --
Outstanding at December 31, 1996.......... -- -- 1,751 $ 5.33
IHF options exercisable at end of year...... -- -- 39 $ 5.33
</TABLE>

- ---------------

* 150,000 options were settled for $61.19 per option which represents the
stock's fair value at November 1, 1996.

** 1,313,515 options were forfeited by an officer upon resignation in February
1997.

The weighted-average fair value of American Home Products stock options
granted during 1995 and 1996 is $4.81 and $7.21 per option, respectively. The
weighted-average fair value of IHF non-indexed options granted on November 1,
1996 is $1.12 per option. The IHF indexed options, which provide for an eight
percent per annum increase in exercise price, have no value under the minimum
value method.

As of December 31, 1996, the 6,582,584 stock options outstanding under the
IHF plan including 1,313,515 options that were subsequently forfeited by a
former officer, have exercise prices ranging from $5.33 to $5.38 and a
weighted-average exercise price of $5.38. Such options have a remaining
contractual life of 10 years and 3,557,748 were exercisable at December 31,
1996.

In the third quarter of 1997, the Company recorded a non-cash stock option
compensation charge of $44,763 related to stock option compensation including
$44,734 for indexed stock options granted to senior management and other
employees. When granted, these indexed options had exercise prices ranging from
$5.33 to $5.76 per share that increased over time at a rate of 8% per year. In
the third quarter of 1997, the variable exercise price of these options was
fixed. In addition, the Company has recorded $4,525 related to unearned stock
option compensation as a reduction in paid-in capital. This amount will be
amortized to compensation expense as the related options vest. Estimated charges
to income for the fourth quarter of 1997, and the years ending 1998, 1999, and
2000 are $370, $1,537, $1,537, and $1,081, respectively. In addition, in the
fourth quarter the Company will recognize an additional charge of $1,226 related
to stock options issued to the Company's Chief Executive Officer and other
employees on November 13, 1997.

F-23
<PAGE> 102

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

(13) COMMITMENTS AND CONTINGENCIES

The Company has ongoing royalty arrangements with several parties,
primarily representing licensing agreements for its wet spices business and for
the use of characters in the Company's canned pasta business. The accompanying
consolidated statements of income include royalty costs which amounted to
$2,065, $3,136 and $2,113 for the years ended December 31, 1994, 1995, and 1996
and $1,632 and $1,569 for the nine months ended September 30, 1996 and 1997,
respectively.

There is also a royalty obligation related to the Company's licensing
agreement for its cereals business entered into in 1988. The agreement includes
a minimum annual royalty of $750, payable annually, as well as a $10,250 balloon
payment payable in January 1998. As of December 31, 1995 and 1996 and September
30, 1997, $9,873, $10,155 and $10,368, respectively, have been accrued towards
the annual minimum royalty for each of the periods and the appropriate shares of
the balloon obligation. There are no minimum royalty requirements after December
31, 1997; however, an ongoing royalty of ten percent of net cereal sales will
continue.

The Company leases certain facilities and equipment under operating leases.
Rental expenses, including rent related to the Company's lease with American
Home Products (see Note 11), aggregated $1,566, $1,868, and $1,884 for the years
ended December 31, 1994, 1995, and 1996, respectively. Future minimum lease
payments under noncancellable operating leases at December 31, 1996 are as
follows:

<TABLE>
<S> <C>
1997........................................................ $ 1,956
1998........................................................ 1,548
1999........................................................ 1,306
2000........................................................ 1,066
2001 and later years........................................ 6,451
-------
$12,327
=======
</TABLE>

In the ordinary course of business, the Company enters into contracts for
the purchase of certain of its raw materials and is involved in various pending
or threatened litigation and claims. The Company has responsibility for
environmental, safety, and cleanup obligations under various local, state and
federal laws, including the Comprehensive Environmental Response, Compensation
and Liability Act, commonly known as Superfund. The Company has been identified
as a potentially responsible party at two Superfund sites. Although the outcome
of any legal proceeding cannot be predicted with certainty, management believes
through its discussions with counsel and the United States Environmental
Protection Agency that its proportionate share of any liability arising from
such matters, or the resolution of any other pending or threatened litigation or
claims, in the aggregate will not have a material adverse effect on the
consolidated financial position, results of operations, or cash flows of the
Company.

(14) GUARANTOR FINANCIAL DATA:

The Company's Senior Subordinated Notes are fully and unconditionally
guaranteed by each of the Company's subsidiaries on a joint and several basis.
The Company has not presented separate financial statements and other
disclosures concerning each of the subsidiary guarantors because management has
determined that such information is not material to the holders of the Senior
Subordinated Notes.

Presented below is summarized combined financial information of the
subsidiary guarantors:

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
------------------- -------------
1995 1996 1997
(UNAUDITED)
<S> <C> <C> <C>
Current assets.............................................. $ 88,873 $ 91,835 $190,786
Noncurrent assets........................................... 156,193 254,729 357,730
Current liabilities......................................... 24,526 46,354 78,634
Noncurrent liabilities...................................... 225,280 248,052 242,615
</TABLE>

F-24
<PAGE> 103

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

<TABLE>
<CAPTION>
FOR THE YEARS ENDED FOR THE NINE FOR THE NINE
DECEMBER 31, MONTHS ENDED MONTHS ENDED
------------------------------ SEPTEMBER 30, SEPTEMBER 30,
1994 1995 1996 1996 1997
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net sales................................... $147,480 $131,950 $136,873 $ 98,437 $197,842
Gross profit................................ 69,754 65,066 58,382 44,227 72,785
Net income/(loss)........................... (7,607) (3,028) (1,054) 1,465 3,208
Net cash provided by operating activities... 3,803 32,379 11,540 25,613 22,678
Net cash used in investing activities....... (18,462) (12,467) (11,457) (6,879) (5,404)
Net cash provided by (used in) financing
activities................................ 14,659 (19,912) 1,029 (18,734) (14,464)
</TABLE>

(15) BUMBLE BEE ACQUISITION

On May 2, 1997 the Company agreed to acquire the ongoing canned seafood
business of Bumble Bee Seafoods, Inc. for approximately $163 million, including
transaction fees, in cash plus the assumption of certain liabilities estimated
to be between $30 and $40 million.

Bumble Bee is one of the world's largest distributors of canned seafood
products. Bumble Bee's principal products include canned tuna and salmon. To
expedite completion of the sale, Bumble Bee has filed for protection under
Chapter 11 of the Federal Bankruptcy Code. It is anticipated that under the
reorganization, Bumble Bee will continue to function on a business as usual
basis. Bumble Bee has obtained debtor-in-possession financing of $83.5 million,
which should allow Bumble Bee to maintain normal day to day operations,
including payment of its trade obligations.

(16) THIRD QUARTER EVENTS

(a) Effective July 1, 1997, the Company consummated the acquisition of
substantially all of the assets (the "Assets") of Bumble Bee Seafoods, Inc. and
its wholly-owned subsidiaries, Bumble Bee International, Inc., Santa Fe Springs
Holding Company and Commerce Distributing Company (CDC) (collectively, the
"Sellers"), pursuant to the terms of an Asset Purchase and Sale Agreement dated
as of May 1, 1997 (the "Agreement") by and among the Sellers, on the one hand,
and the Company and its wholly-owned subsidiary, Bumble Bee Acquisition
Corporation, on the other hand. The aggregate consideration paid for the Assets
was approximately $163 million in cash and the assumption of certain liabilities
of the Sellers, including trade payables and certain accrued liabilities. The
Assets consist primarily of inventory, accounts receivable, property, plant and
equipment and trademarks formerly used by the Sellers for the processing and
marketing of canned seafood products, principally tuna and salmon, including
processing facilities in Puerto Rico, Ecuador and California. The transaction
was approved by an order of the Federal Bankruptcy Court for the Southern
District of California on June 19, 1997, as part of the bankruptcy proceedings
of the Sellers.

Concurrent with the acquisition of the Assets, the Company amended and
restated its existing credit agreement with Chase Manhattan Bank as of July 1,
1997. The existing senior secured bank facilities were increased from $670
million (less a $13 million principal payment made in the first quarter of 1997)
to $737 million and the Company's Revolver was increased from $100 million to
$140 million. The Company financed the purchase of the Assets with the $80
million increase in the term facility, a $30 million draw on the Company's
Revolver, and the balance of the purchase price from the Company's available
cash balances as of the date of the closing.

The provisions of the new credit agreement provide that borrowings under
Tranches A and B are increased to $367.5 million, and $369.5 million
respectively and the previous Tranche C is included as part of Tranche B. The
final maturity dates of Tranche A, March 31, 2003, and the new Tranche B,
September 30, 2004, remained unchanged. Applicable margins on borrowings which
bear interest based on the LIBOR as defined, have been changed from 2.5% to 2%
on Tranche A and from 3% to 2.25% on Tranche B. The applicable margins under the
alternate base rate, as defined, have been changed from 1.5% to 1%, and 2% to

F-25
<PAGE> 104

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

1.25% on Tranche A and B, respectively. The new agreement also includes
financial covenants substantially similar related to consolidated leverage
ratio, as defined, consolidated interest coverage, as defined, consolidated
fixed charge coverage ratio, as defined, and limitations on indebtedness,
capital expenditures and payment of dividends.

Pro forma unaudited results for the nine months ended September 30, 1996
and 1997 assuming the Bumble Bee Acquisition had occurred at the beginning of
the respective periods would have been as follows:

<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
------------------------
1996 1997
---------- ----------
(UNAUDITED)
<S> <C> <C>
Net sales................................................... $1,016,331 $1,022,947
Net income (loss)........................................... 75,734 (2,951)
Net income (loss) per common share.......................... 0.23 (0.01)
</TABLE>

In September 1997, the Company signed a letter of intent to acquire a
specialty canned seafood manufacturer and marketer for approximately $26.5
million in cash.

(b) In September 1997, the Company initiated the process of registering
shares of common stock under an initial public offering ("IPO"). The proceeds
from the sale of the securities would be used by the Company to pay off
borrowings under the Credit Agreement. In connection with the IPO, the Company
expects to amend its existing Credit Agreement, which is expected to result in
an extraordinary charge in the fourth quarter of 1997 of approximately $11.1,
net of related tax benefit.

Immediately prior to the IPO, the Company plans to effect a 5.3292 for one
reverse stock split of its current capital stock. In addition, the Company will
reduce the authorized shares of Common Stock to 300,000,000. All historical and
pro forma income per common share data has been adjusted to reflect the reverse
stock split.

(17) IMPACT OF RECENT ACCOUNTING STANDARDS

The American Institute of Certified Public Accountants issued Statement of
Position 96-1, "Environmental Remediation Liabilities" ("SOP 96-1") in October
1996. SOP 96-1 provides authoritative guidance on specific accounting issues in
connection with recognizing, measuring and disclosing environmental cleanup
liabilities. The Company adopted this SOP during the first quarter of 1997;
there was no impact on the Company's results of operations or financial position
upon adoption.

In June 1996, Statement of Financial Accounting Standards No. 125 (SFAS
125), "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities", was issued to provide accounting and reporting
standards for transfers and servicing of financial assets and extinguishments of
liabilities. This statement became effective for transfers and servicing of
financial assets and extinguishments of liabilities occurring after December 31,
1996. The Company does not anticipate that the adoption of this Statement will
have a material effect on the Financial Statements.

In March 1997, SFAS 128, "Earnings Per Share", was issued to establish
standards for computing and presenting earnings per share ("EPS"). The Statement
applies to entities with publicly held common stock or potential common stock
and excludes entities whose publicly traded securities include only debt. The
Statement is effective for financial statements issued for periods ending after
December 15, 1997; earlier application is not permitted. This statement will
require presentation of basic and diluted EPS. The Company anticipates that
diluted EPS in accordance with this statement would approximate EPS as reported.

F-26
<PAGE> 105

INTERNATIONAL HOME FOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(SEE NOTES 1 AND 2)

In June 1997, SFAS 130, "Reporting Comprehensive Income", was issued to
establish standards for reporting and displaying of comprehensive income and its
components in a full set of general-purpose financial statements. This statement
requires disclosure of the components of comprehensive income including, among
other things, foreign currency translation adjustments, minimum pension
liability items and unrealized gains and losses on certain investments in debt
and equity securities. The Company would be required to show components of
comprehensive income in a financial statement displayed as prominently as the
other required financial statements. The statement is effective for fiscal years
beginning after December 15, 1997. The Company anticipates compliance with this
Statement in 1998.

In June 1997, SFAS 131 "Disclosures About Segments of an Enterprise and
Related Information", was issued to establish standards for public business
enterprises reporting information regarding operating segments in annual and
interim financial statements issued to shareholders. It also establishes
standards for related disclosures about products and services, geographic areas
and major customers. This statement is effective for financial statements for
periods beginning after December 15, 1997. In the initial year of application,
comparative information for earlier years is to be restated. The Company
operates in one business segment which manufactures and markets a diversified
portfolio of shelf-stable food products, and accordingly, does not believe the
segment reporting aspect of this statement will impact their financial
statements.

(18) SUBSEQUENT EVENTS (UNAUDITED)

On October 1, 1997, the Company acquired Productos Del Monte from an
affiliate of Hicks Muse for 3,127,415 shares of Common Stock. The acquisition of
Productos Del Monte will be treated as a combination of entities under common
control. Accordingly, the historical accounting values of Productos Del Monte
will be carried over for financial accounting purposes.

On October 1, 1997, the Company acquired Creative Products, Inc. for
approximately $52 million in cash. The acquisition was funded through borrowings
under the Company's Senior Bank Facilities, and will be treated as a purchase
for financial accounting purposes.

F-27
<PAGE> 106

INDEPENDENT AUDITORS' REPORT

To the Board of Directors
of Bumble Bee Seafoods, Inc.:

We have audited the accompanying consolidated balance sheets of Bumble Bee
Seafoods, Inc. and subsidiaries as of December 31, 1995 and 1996, and the
related consolidated statements of operations and accumulated deficit, and cash
flows for each of the years in the three-year period ended December 31, 1996.
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.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Bumble Bee
Seafoods, Inc. and subsidiaries as of December 31, 1995 and 1996, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1996, in conformity with generally accepted
accounting principles.

The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in Note
6 to the consolidated financial statements, the Company's notes payable and
subordinated note payable were due and payable in May 1996; non-payment has
constituted events of default. The Company does not currently have the funds to
retire these obligations. Such conditions raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans related to
this matter are described in Note 6 to the consolidated financial statements.
The consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

KPMG PEAT MARWICK LLP

San Diego, California
April 11, 1997

F-28
<PAGE> 107

BUMBLE BEE SEAFOODS, INC.

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PAR VALUE INFORMATION)

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, JUNE 30,
1995 1996 1997
(UNAUDITED)
<S> <C> <C> <C>
ASSETS (NOTE 6)
Current Assets:
Cash...................................................... $ 2,815 $ 2,098 $ 2,443
Trade accounts receivable, less allowance for doubtful
accounts of $985 and $844 in 1995 and 1996,
respectively........................................... 36,053 32,174 29,419
Other receivables......................................... 1,148 607 579
Inventories (note 2)...................................... 82,300 82,312 61,621
Prepaid expenses.......................................... 4,775 4,758 5,431
-------- --------- ---------
Total current assets.............................. $127,091 $ 121,949 $ 99,493
Investment in SEAFMAN at cost (note 1)...................... $ 1,992 $ 1,992 $ 1,992
Property and equipment, net (note 3)........................ 21,367 20,308 18,986
Goodwill, less accumulated amortization of $30,174 and
$97,547 in 1995 and 1996, respectively.................... 140,635 73,262 71,967
Other assets................................................ 733 725 726
-------- --------- ---------
$291,818 $ 218,236 $ 193,164
======== ========= =========
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
Current liabilities:
Notes payable (note 6).................................... $100,150 $ 100,150 $ 101,687
Revolving line of credit (note 6)......................... 68,313 70,111 67,626
Accounts payable:
Trade and other (note 7)............................... 51,164 51,516 41,555
Unicord Public Company Limited (note 7)................ 7,514 7,062 7,009
Accrued liabilities.................................... 24,045 26,733 26,036
-------- --------- ---------
Total current liabilities......................... $251,186 $ 255,572 $ 243,913
-------- --------- ---------
Stockholder's equity (deficit) (note 6):
Common Stock, $1.00 par value; authorized, issued and
outstanding 35,000 shares.............................. 35 35 35
Additional paid-in capital................................ 121,965 121,965 121,965
Accumulated deficit....................................... (81,368) (159,336) (172,749)
-------- --------- ---------
Total stockholder's equity (deficit).............. 40,632 (37,336) (50,749)
-------- --------- ---------
Commitments, contingencies and subsequent event (notes 8 and
9)
$291,818 $ 218,236 $ 193,164
======== ========= =========
</TABLE>

See accompanying notes to consolidated financial statements.

F-29
<PAGE> 108

BUMBLE BEE SEAFOODS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
(IN THOUSANDS EXCEPT SHARE INFORMATION)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
FOR YEARS ENDED DECEMBER 31, JUNE 30,
-------------------------------- -------------------------
1994 1995 1996 1996 1997
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Sales, net of allowances................. $410,192 $393,704 $ 395,607 $ 209,279 $ 179,014
Cost of sales (note 7)................... 285,409 273,888 275,678 142,605 127,521
-------- -------- ---------- --------- ---------
Gross profit........................... 124,783 119,816 119,929 66,674 51,493
Selling and promotional expenses......... 93,864 90,561 96,431 52,360 41,875
General and administrative expenses...... 14,592 13,419 14,459 6,738 9,882
Amortization and write-off of goodwill... 4,632 5,227 67,373 2,291 1,294
-------- -------- ---------- --------- ---------
Operating income (loss)................ 11,695 10,609 (58,334) 5,285 (1,558)
-------- -------- ---------- --------- ---------
Other expense:
Interest expense (note 6).............. 11,344 16,209 19,322 9,361 10,041
Other expense (income), net............ 502 1,620 (127) 9 1,631
-------- -------- ---------- --------- ---------
11,846 17,829 19,195 9,370 11,672
-------- -------- ---------- --------- ---------
Loss before income taxes............ (151) (7,220) (77,529) (4,085) (13,230)
Income taxes (note 4).................... 613 642 439 219 183
-------- -------- ---------- --------- ---------
Net loss............................... (764) (7,862) (77,968) (4,304) (13,413)
Accumulated deficit at beginning of
period................................. (72,742) (73,506) (81,368) (81,368) (159,336)
-------- -------- ---------- --------- ---------
Accumulated deficit at end of period..... $(73,506) $(81,368) $ (159,336) $ (85,672) $(172,749)
======== ======== ========== ========= =========
Net loss per share....................... $ (21.83) $(224.63) $(2,227.66) $ (122.97) $ (383.23)
======== ======== ========== ========= =========
</TABLE>

See accompanying notes to consolidated financial statements.

F-30
<PAGE> 109

BUMBLE BEE SEAFOODS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
FOR YEARS ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
---------------------------- -------------------------
1994 1995 1996 1996 1997
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss................................ $ (764) $(7,862) $(77,968) $ (4,304) $(13,413)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Depreciation and amortization........ 2,786 2,559 2,589 1,288 1,322
Amortization and write-off of
goodwill........................... 4,632 5,227 67,373 2,291 1,295
(Gain) loss on disposal of fixed
assets............................. (93) 13 -- -- --
Change in assets and liabilities:
(Increase) decrease in trade
accounts receivable and other
receivables..................... 690 (3,550) 4,420 (4,842) 2,783
Decrease (increase) in
inventories..................... (4,718) 138 (12) 25,304 20,691
Decrease (increase) in prepaid
expenses and other assets....... 1,426 (1,234) 25 401 (674)
Increase (decrease) in trade and
other payables.................. 1,745 (95) 352 (8,368) (9,961)
Decrease in Unicord Public Company
Limited payable................. (4,026) (1,174) (452) (14) (53)
Increase in accrued liabilities.... 3,900 4,508 7,188 2,905 840
------- ------- -------- -------- --------
Net cash provided by (used in)
operating activities.......... 5,578 (1,470) 3,515 14,661 2,830
------- ------- -------- -------- --------
Cash flows from investing activities:
Proceeds from sale of fixed assets...... 147 31 -- -- --
Acquisition of machinery and
equipment............................ (1,413) (1,152) (1,530) (889) --
------- ------- -------- -------- --------
Net cash used in investing
activities.................... (1,266) (1,121) (1,530) (889) --
------- ------- -------- -------- --------
Cash flows from financing activities:
Contribution by capital Unicord Public
Company Limited...................... -- 4,000 -- -- --
Principal proceeds from (repayments on)
revolving line of credit, net........ 2,152 7,057 1,798 (10,480) (2,485)
Principal repayments on long-term
debt................................. (7,000) (8,000) (4,500) (4,500) --
------- ------- -------- -------- --------
Net cash provided by (used in)
financing activities.......... (4,848) 3,057 (2,702) (14,980) (2,485)
------- ------- -------- -------- --------
Net increase (decrease) in cash........... (536) 466 (717) (1,208) 345
Cash at beginning of period............... 2,885 2,349 2,815 2,815 2,098
------- ------- -------- -------- --------
Cash at end of period..................... $ 2,349 $ 2,815 $ 2,098 $ 1,607 $ 2,443
======= ======= ======== ======== ========
Supplemental disclosures of cash flow
information:
Cash paid during the period for:
Interest............................. $11,007 $13,369 $ 12,083 $ 6,174 $ 14,034
Income taxes......................... 681 716 387 4 128
</TABLE>

See accompanying notes to consolidated financial statements.

F-31
<PAGE> 110

BUMBLE BEE SEAFOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
DECEMBER 31, 1994, 1995 AND 1996

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND DESCRIPTION OF BUSINESS

Bumble Bee Seafoods, Inc. (the "Company" or "BBSI") was incorporated in the
state of Delaware on June 11, 1984 and commenced operations effective June 8,
1985. The Company produces, distributes and markets various canned seafoods and
seafood derivative products including tuna, salmon and pet foods. The Company
operates plants in Mayaguez, Puerto Rico and Santa Fe Springs, California.

In September 1989, in simultaneous transactions, Unicord Public Company
Limited ("Unicord"), a Thailand-based company, acquired all outstanding common
stock of Uni Group, Inc. ("UGI"), a Delaware corporation through a wholly-owned
subsidiary, Uni Group, Inc., a British Virgin Islands corporation, and UGI
acquired all outstanding stock of BBSI. The acquisition cost of $285,000 was
financed by approximately $35,000 of cash and $250,000 of notes payable.

The acquisition was accounted for as a purchase. Push-down accounting was
applied to reflect the fair market value of the assets acquired and liabilities
assumed, including liabilities incurred to finance the transaction.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the financial statements of
the Company and its wholly-owned subsidiaries, Bumble Bee International, Inc.
("BBII"), Commerce Distributing Company, and Santa Fe Springs Holding Company.
All significant intercompany balances and transactions have been eliminated in
consolidation.

The Company has a minority ownership interest in Sociedad Ecuatoriana de
Alimentos y Frigorificos Manta, C.A. ("SEAFMAN"), an Ecuador corporation. In
accordance with Ecuadorian regulations, the Company may not hold, either legally
or beneficially, a controlling interest in SEAFMAN or exercise significant
influence over its operations. The investment in SEAFMAN is accounted for at
cost, which approximates its value under the equity method of accounting.

INVENTORIES

Raw fish inventories are stated at specifically identified cost. All other
inventories are stated at weighted average cost, not in excess of market.

GOODWILL

Goodwill, which represents the excess of purchase price over fair value of
net assets acquired, is amortized on a straight-line basis over the expected
periods to be benefited, 40 years. The Company assesses the recoverability of
this intangible asset whenever events or changes in circumstances indicate that
the goodwill will not be recoverable. The amount of goodwill impairment, if any,
is measured as the amount by which the carrying amount of goodwill exceeds its
fair value.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost. Depreciation on machinery
and equipment is calculated using the straight-line method over the estimated
useful lives of the assets, generally ranging from three to ten years; buildings
are depreciated using the straight-line method over 20 years. Leasehold
improvements are amortized using the straight-line method over the shorter of
the lease term or the estimated useful life of the asset.

F-32
<PAGE> 111

BUMBLE BEE SEAFOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

INCOME TAXES

The Company accounts for income taxes under the asset and liability method.
Under this method, deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases and operating loss and tax credit carryforwards. Deferred
tax assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in operations in the period
that includes the enactment date. The Company maintains a valuation allowance
against deferred tax assets in order to reduce the amount of those deferred tax
assets to an amount that management believes will be realized. Management bases
such estimates on several factors, including the reversal of deferred tax
liabilities, projected future taxable income and tax planning strategies.

COMMITMENTS AND CONTINGENCIES

Liabilities for loss contingencies, including environmental remediation
costs, arising from claims, assessments, litigation, fines and penalties, and
other sources are recorded when it is probable that a liability has been
incurred and the amount of the assessment and/or remediation can be reasonably
estimated. Recoveries from third parties which are probable of realization are
separately recorded, and are not offset against the related liability in
accordance with Financial Accounting Standards Board Interpretation No. 39,
"Offsetting of Amounts Related to Certain Contracts."

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of all receivables, trade accounts payable and accrued
liabilities approximate fair value due to the short-term nature of such
instruments. It is not practicable to estimate the fair value of amounts due to
Unicord Public Company Limited, trade acceptances to foreign banks, and notes
payable as the payment of these obligations is dependent upon receiving proceeds
from the sale of substantially all of the assets of the Company and the approval
of the payment of certain portions of these obligations by the Federal
Bankruptcy Court (Notes 6, 7 and 9).

USE OF ESTIMATES

Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the consolidated financial
statements and the reported amounts of revenue and expenses during the reporting
period to prepare these consolidated financial statements in conformity with
generally accepted accounting principles. Actual results could differ from those
estimates.

IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF

The Company adopted the provisions of SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of
(SFAS No. 121), on January 1, 1996. This Statement requires that long-lived
assets and certain identifiable intangibles, including goodwill, be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying amount of an asset
to future net cash flows expected to be generated by the asset. If such assets
are considered to be impaired, the impairment to be recognized is measured by
the amount by which the carrying amounts of the assets exceed the fair values of
the assets. Assets to be disposed of are reported at the lower of the carrying
amount or fair value less costs to sell. In conjunction with the pending sale of
the assets of the Company (Note 9) and in applying the provisions of SFAS No.
121, the Company recorded a charge to operations of $63,000 for the year ended
December 31, 1996, representing the write-down of goodwill due to impairment.

F-33
<PAGE> 112

BUMBLE BEE SEAFOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NET LOSS PER COMMON SHARE

The computation of net loss per share is based on the weighted-average
number of outstanding common shares during each year. The weighted-average
number of common shares outstanding for the years ended December 31, 1994, 1995
and 1996 was 35,000.

INTERIM FINANCIAL INFORMATION:

The unaudited consolidated financial statements presented herein have been
prepared by the Company without audit and, in the opinion of management, contain
all adjustments necessary to present fairly and on a basis consistent with the
consolidated financial statements for the year ended December 31, 1996, the
Company's consolidated financial position as of June 30, 1997, and the results
of their operations and cash flows for the six months ended June 30, 1996 and
1997.

The results of operations for the six months ended June 30, 1997 are not
necessarily indicative of the results to be expected for the entire year.

RECLASSIFICATIONS

Certain 1994 and 1995 amounts have been reclassified to conform with the
1996 presentation.

(2) INVENTORIES

Inventories at December 31, 1995 and 1996 are comprised of the following:

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Raw fish, materials and supplies............................ $12,035 $13,615
Finished goods, primarily canned fish....................... 70,265 68,697
------- -------
$82,300 $82,312
======= =======
</TABLE>

(3) PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment at December 31, 1995 and 1996 consists of the
following:

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Land........................................................ $ 3,090 $ 3,090
Buildings................................................... 11,853 11,978
Machinery and equipment..................................... 19,616 20,892
Furniture and fixtures...................................... 1,181 1,192
Leasehold improvements...................................... 1,216 1,369
Construction in progress.................................... 254 218
-------- --------
37,210 38,739
Less accumulated depreciation and amortization.............. (15,843) (18,431)
-------- --------
$ 21,367 $ 20,308
======== ========
</TABLE>

(4) INCOME TAXES

The provision for income taxes are primarily the result of local taxes in
Puerto Rico related to the operations of BBII.

Differences between expected income taxes calculated using the federal
statutory rate of 35% in 1995 and 1996, and actual tax expense as disclosed in
the accompanying consolidated statements of operations and

F-34
<PAGE> 113

BUMBLE BEE SEAFOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

accumulated deficit are attributable primarily to Puerto Rico income tax and tax
benefits of operating losses not recognized, and the Puerto Rico and possession
tax credit.

The tax effects of temporary differences that give rise to significant
portions of deferred tax assets and liabilities are presented below:

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Deferred tax assets:
Operating loss carryforward............................... $ 53,932 $ 60,526
Accounts receivable reserves and allowances............... 597 996
Accrued liabilities -- not deductible for tax............. 1,884 1,464
Long-term debt -- OID difference.......................... 536 --
-------- --------
Total gross deferred tax assets................... 56,949 62,986
Less valuation allowance.................................... (48,079) (54,088)
-------- --------
Net deferred tax assets........................... 8,870 8,898
-------- --------
Deferred tax liabilities:
Property, plant and equipment, principally due to
differences in depreciation............................ $ 554 $ 504
Inventory allowances...................................... 327 319
Intangible assets......................................... 7,989 8,075
-------- --------
Total gross deferred tax liabilities.............. 8,870 8,898
-------- --------
Net deferred taxes................................ $ -- $ --
======== ========
</TABLE>

During the years ended December 31, 1995 and 1996, the valuation allowance
increased by $8,559 and $6,009, respectively. These changes in the valuation
allowance are primarily related to the increase in operating loss carryforward
amounts and the Company's historical levels of taxable income.

In assessing the realizability of deferred tax assets, management considers
whether it is more likely than not that some portion or all of the deferred tax
assets will be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the periods in
which those temporary differences become deductible. Management considers the
scheduled reversal of deferred tax liabilities, projected future taxable income
and tax planning strategies in making this assessment. Based on the level of
historical taxable income and projections for future taxable income over the
periods in which the deferred tax assets are deductible, management believes
that it is more likely than not that the Company will realize the benefits of
these deductible differences, net of the existing valuation allowance at
December 31, 1996. The amount of the deferred tax asset considered realizable,
however, could be reduced if estimates of future taxable income during the
carryforward period are reduced.

F-35
<PAGE> 114

BUMBLE BEE SEAFOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

As of December 31, 1996, the Company has net operating loss carryforwards
of approximately $154,811 for federal income tax reporting purposes are as
follows:

<TABLE>
<CAPTION>
YEAR OF OPERATING
EXPIRATION LOSS CARRYFORWARDS
<S> <C>
2004...................................................... $ 7,587
2005...................................................... 28,547
2006...................................................... 289
2007...................................................... 43,642
2008...................................................... 17,903
2009...................................................... 17,635
2010...................................................... 17,088
2011...................................................... 22,120
--------
$154,811
========
</TABLE>

The Company has available for state tax reporting purposes operating loss
carryforwards of approximately $90,601 as of December 31, 1996. The portion of
the state tax carryforwards related to California are subject to a California
law adopted in July 1991, which retroactively suspended utilization of
California net operating loss carryforwards for the years ended 1991 and 1992.
With respect to state net operating loss carryforwards incurred in California
and suspended in 1991 and 1992, the carryforward period is extended for two
years for losses incurred prior to 1991 and for one year for losses incurred in
1991. In 1993, California adopted a law reducing the net operating loss
carryforward period from 15 years to 5 years, retroactive to loss years
beginning with 1987.

(5) EMPLOYEE BENEFIT PLANS

The Company has a retirement savings plan under the provisions of Section
401(k) of the Internal Revenue Code as a benefit for employees. Company
contributions consist of matching contributions and discretionary contributions,
with the latter being determined by the Board of Directors. The contributions
are placed in a trust. During the years ended December 31, 1994, 1995 and 1996,
the Company charged approximately $216, $216 and $219, respectively, to
operations for this plan.

BBII has a non-contributory defined benefit pension plan covering
substantially all of its employees. The benefits are based on the employee's
years of service and compensation prior to retirement. BBII's funding policy is
to contribute an amount neither less than the ERISA minimum funding requirement
nor more than the maximum that would be deductible for tax purposes. Assets of
the plan consist primarily of certificates of deposits and mutual funds.

Net pension costs for 1994, 1995 and 1996 include the following components:

<TABLE>
<CAPTION>
1994 1995 1996
<S> <C> <C> <C>
Service cost -- benefits earned during the period.......... $ 515 $ 551 $ 560
Interest cost on projected benefit obligation.............. 258 321 345
Actual return on plan assets............................... (208) (343) (341)
Net amortization of prior service cost and deferral of net
gain..................................................... 11 138 76
----- ----- -----
Net pension cost......................................... $ 576 $ 667 $ 640
===== ===== =====
</TABLE>

F-36
<PAGE> 115

BUMBLE BEE SEAFOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The following table sets forth the plans' funded status as of December 31,
1995 and 1996:

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefits........................................... $ 4,015 $ 4,032
Nonvested benefits........................................ 330 390
------- -------
Accumulated benefit obligation......................... $ 4,345 $ 4,422
======= =======
Projected benefit obligation................................ $(5,322) $(5,382)
Plan assets at fair market value............................ 3,285 3,696
------- -------
Projected benefit obligation in excess of plan
assets............................................... (2,037) (1,686)
Unrecognized net (gain) loss................................ 604 110
Unrecognized prior service cost............................. 17 14
Unrecognized transition obligation.......................... 50 42
Asset loss (gain)........................................... (115) (65)
------- -------
Accrued pension cost................................... $(1,481) $(1,585)
======= =======
</TABLE>

Assumptions used in accounting for the pension plan as of December 31, 1995
and 1996 were:

<TABLE>
<S> <C>
Discount rate............................................... 7.0%
Rate of increase in compensation............................ 4.0%
Expected rate of return on plan assets...................... 8.0%
</TABLE>

(6) NOTES PAYABLE

Notes payable are comprised of the following as of December 31, 1995 and
1996:

<TABLE>
<CAPTION>
1995 1996
<S> <C> <C>
Note payable A, prime rate plus 1.75%....................... $ 25,000 $ 20,500
Note payable B, prime rate plus 1.75%, with 0.5% increases
on November 15, 1995 and each six-month anniversary
thereafter................................................ 30,000 30,000
Subordinated note payable, including interest due at
maturity of $2,150 and $6,650, respectively............... 45,150 49,650
-------- --------
$100,150 $100,150
======== ========
</TABLE>

In May 1991, the Company negotiated amended and restated credit agreements.
Under the terms of the agreements, UGI contributed $43,000 additional capital to
BBSI. As restructured, the senior debt is secured by all assets of BBSI and by
the shares of BBSI, and the subordinated debt is secured by the shares of BBSI
and guaranteed by UGI.

Note payable A was for an original amount of $55,500 and bears interest at
the prime rate plus 1.75% (10.5% and 10.0% at December 31, 1995 and 1996,
respectively) with scheduled quarterly installments and a final payment of
$20,500 due on May 15, 1996. Note payable B was for $30,000 and bears interest
at the bank's prime rate plus 1.75% (12.0% and 11.5% at December 31, 1995 and
1996, respectively) with interest payable monthly and increasing 0.5% per annum
each six-month period beginning November 15, 1995, due on May 15, 1996.

Under terms of the amended and restated subordinated credit agreement, the
$65,000 due plus accrued interest of $7,382 at May 15, 1991 was reduced by a
cash payment of $22,000 with the remaining principal balance converted into a
note payable of $43,000. The note included no interest for four years and simple
interest at 5% in the fifth year, principal and interest due on May 16, 1996.

F-37
<PAGE> 116

BUMBLE BEE SEAFOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The terms of the amended and restated credit agreement include a revolving
loan facility with a maximum credit availability of $71,000 at the prime rate
plus 1.75% (10.5% and 10.0% at December 31, 1995 and 1996, respectively). The
amount outstanding under the revolving line of credit was $68,313 and $70,111 at
December 31, 1995 and 1996, respectively.

On May 15, 1996, the Company received notice from the lenders indicating it
was in default of the credit agreement and that all amounts due under the notes
were immediately due and payable. The notice further indicated that although the
lenders are entitled to immediately cease making advances under the revolving
line of credit, they would continue to make advances to the Company at their
discretion on a day-to-day basis for working capital purposes. The Company has
subsequently received notice from the lenders indicating that such advances will
continue up to the earlier of (a) April 25, 1997, or (b) five business days
after the termination in writing by any of the parties to the sale transaction
described in Note 9. Additionally, under the terms of the notice, the Company
continues to accrue the additional 3% penalty interest on the outstanding loans.
In February 1997, the Company paid $5,970 of the accrued penalty interest; any
additional penalty interest will be payable when the loans are paid in full.

During October 1995, the Company received from its subordinated lender
notice of acceleration, due to the senior note default, declaring the unpaid
portion of $43,000 and the accrued interest thereon immediately due and payable.
The notice also modified the interest rate so that interest accrues at 2% over
prime. On May 16, 1996, the subordinated note became due and payable in full and
as a result of non-payment, the Company is in default. The Company's
subordinated lender has orally indicated to management its intent to forbear,
for an unspecified period of time, from enforcing certain of its rights that
arise because of the default.

Management is pursuing a transaction, discussed more fully in Note 9, to
sell substantially all of the assets of the Company in order to satisfy, in
part, the debt obligations. The accompanying consolidated financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

(7) RELATED PARTY TRANSACTIONS

The Company purchases canned tuna and frozen tuna loins under agreements
with Unicord Public Company Limited. During the years ended December 31, 1994,
1995 and 1996, the Company purchased $46,850, $3,198 and $0, respectively, of
products under the above described agreements. In conjunction with these
purchases, the Company issued trade acceptances to foreign banks, which advanced
funds to Unicord Public Company Limited upon shipment of the product. Included
in trade and other accounts payable are amounts due to foreign banks under these
trade acceptance arrangements totaling approximately $27,831 as of December 31,
1995 and 1996. Net accounts payable due to Unicord Public Company Limited
related to the above purchases as of December 31, 1995 and 1996 were $7,514 and
$7,062, respectively. In addition, the Company purchases canned tuna and frozen
tuna loins from SEAFMAN. Total purchases from SEAFMAN during the years ended
December 31, 1994, 1995 and 1996 were $10,436, $11,377 and $11,832,
respectively. Net accounts payable related to the above purchases at December
31, 1995 and 1996 were $1,922 and $583, respectively.

(8) COMMITMENTS AND CONTINGENCIES

LEASE AGREEMENTS

As of December 31, 1996, the Company had noncancelable lease commitments
for certain buildings and equipment which are accounted for as operating leases
and expiring at various dates through 2005. Rent expense for the years ended
December 31, 1994, 1995 and 1996 was approximately $2,227, $2,261 and $2,201,
respectively.

The Company has also agreed to make payments under lease agreements for the
use of certain production machinery and equipment. The agreements require fixed
payments plus additional sums based on output.

F-38
<PAGE> 117

BUMBLE BEE SEAFOODS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Total payments made under these arrangements for the years ended December 31,
1994, 1995 and 1996 amounted to $315, $339 and $300, respectively.

The future minimum rental payments under these agreements are as follows:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
<S> <C> <C>
1997.............................................. $1,846
1998.............................................. 1,557
1999.............................................. 1,354
2000.............................................. 1,278
2001.............................................. 1,317
Thereafter........................................ 1,373
------
Total........................................... $8,725
======
</TABLE>

PURCHASE COMMITMENTS

In connection with its business, the Company and BBII routinely enter into
commitments relating to the purchase of certain finished goods and raw fish. As
of December 31, 1996, aggregate future commitments for such purchases are
estimated to be $15,716. These commitments expire on August 31, 1997. The
Company expects such purchase commitments to approximate market value and does
not anticipate any losses related to the commitments.

LEGAL MATTERS

The Company is involved in various claims and legal actions arising in the
ordinary course of business. In the opinion of management, based in part upon
advice from legal counsel, the ultimate disposition of these other matters will
not have a material adverse effect on the Company's consolidated financial
position, results of operations or liquidity.

(9) SUBSEQUENT EVENT (UNAUDITED)

On May 1, 1997 the Company entered into an Asset Purchase and Sale
Agreement (the "Agreement") by and among the Company and International Home
Foods, Inc. ("IHF") and its wholly-owned subsidiary, Bumble Bee Acquisition
Corporation. On May 2, 1997, the Company declared bankruptcy with the Federal
Bankruptcy Court for the Southern District of California. The transaction was
approved by an order of the Federal Bankruptcy Court for the Southern District
of California on June 19, 1997. On July 1, 1997, IHF consummated the acquisition
of substantially all of the assets (the "Assets") of the Company, pursuant to
the terms of the Agreement. The aggregate consideration paid for the assets was
approximately $160 million in cash and the assumption of certain liabilities of
the Company, including trade payables and certain accrued liabilities including
accrued pension cost. The Assets consisted primarily of inventory, accounts
receivable, property, plant and equipment and trademarks formerly used by the
Company for the processing and marketing of canned seafood products, principally
tuna and salmon, including processing facilities in Puerto Rico and California.

F-39
<PAGE> 118

======================================================

NO DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER MADE
BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING
STOCKHOLDER OR ANY OF THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER OF ANY SECURITIES OTHER THAN THOSE TO WHICH IT RELATES OR AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION
WHERE SUCH AN OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE
AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF.

------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 11
The Company........................... 16
Use of Proceeds....................... 17
Dividend Policy....................... 17
Dilution.............................. 17
Capitalization........................ 19
Selected Historical Financial and
Operating Information............... 20
Unaudited Pro Forma Financial
Statements.......................... 21
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 29
Business.............................. 37
Management............................ 50
Principal and Selling Stockholders.... 59
Certain Relationships and Related
Transactions........................ 61
Description of Capital Stock.......... 64
Description of Indebtedness........... 65
Shares Eligible for Future Sale....... 69
Certain U.S. Tax Considerations
Applicable to Non-U.S. Holders of
the Common Stock.................... 70
Underwriting.......................... 73
Legal Matters......................... 77
Experts............................... 78
Available Information................. 78
Index to Financial Statements......... F-1
</TABLE>

------------------

UNTIL DECEMBER 13, 1997 (25 DAYS AFTER THE COMMENCEMENT OF THIS OFFERING) ALL
DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES OFFERED HEREBY,
WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A
PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.

======================================================
======================================================

13,622,500 SHARES

[INTERNATIONAL HOME FOODS LOGO]

INTERNATIONAL HOME FOODS, INC.

COMMON STOCK

--------------------

PROSPECTUS
--------------------

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION

BT ALEX. BROWN

CHASE SECURITIES INC.

CREDIT SUISSE FIRST BOSTON

GOLDMAN, SACHS & CO.

MORGAN STANLEY DEAN WITTER

NOVEMBER 18, 1997
======================================================
<PAGE> 119

PROSPECTUS
NOVEMBER 18, 1997

13,622,500 SHARES

[INTERNATIONAL HOME FOODS LOGO]

INTERNATIONAL HOME FOODS, INC.
COMMON STOCK

Of the 13,622,500 shares of common stock, $.01 par value ("Common Stock")
being offered hereby, 10,526,359 shares are being sold by International Home
Foods, Inc. ("International Home Foods," "IHF" or the "Company") and 3,096,141
shares are being sold by a subsidiary of American Home Products Corporation (the
"Selling Stockholder"). The Company will not receive any of the proceeds from
the sale of shares by the Selling Stockholder. See "Principal and Selling
Stockholders."

Of the 13,622,500 shares being offered hereby, 2,724,500 shares of Common
Stock are being offered initially outside the United States and Canada (the
"International Offering") by the International Managers (as defined herein) and
10,898,000 shares are being offered initially in the United States and Canada
(the "U.S. Offering" and, together with the International Offering, the
"Offering") by the U.S. Underwriters (as defined herein). The initial public
offering price and the underwriting discounts and commissions of the
International Offering and the U.S. Offering are identical. See "Underwriting."

Prior to the Offering, there has been no public market for the Common Stock.
See "Underwriting" for information relating to the factors considered in
determining the initial public offering price.

The shares of Common Stock offered hereby have been approved for listing on
the New York Stock Exchange under the symbol "IHF."

SEE "RISK FACTORS" BEGINNING ON PAGE 11 HEREIN FOR A DISCUSSION OF CERTAIN
MATTERS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

The shares offered hereby are being offered by the several International
Managers when, as and if delivered to and accepted by the International Managers
and subject to various prior conditions, including their right to reject orders
in whole or in part. It is expected that delivery of certificates for the shares
offered hereby will be made in New York, New York on or about November 21, 1997.

DONALDSON, LUFKIN & JENRETTE
INTERNATIONAL
BT ALEX. BROWN INTERNATIONAL
CHASE MANHATTAN INTERNATIONAL LIMITED
CREDIT SUISSE FIRST BOSTON
GOLDMAN SACHS INTERNATIONAL
MORGAN STANLEY DEAN WITTER
<PAGE> 120

[ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS]

- ------------------------------------------------------

NO ACTION HAS BEEN OR WILL BE TAKEN IN ANY JURISDICTION BY THE COMPANY, THE
SELLING STOCKHOLDER OR ANY UNDERWRITER THAT WOULD PERMIT A PUBLIC OFFERING OF
COMMON STOCK OR POSSESSION OR DISTRIBUTION OF THIS PROSPECTUS IN ANY
JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED, OTHER THAN IN THE UNITED
STATES. PERSONS INTO WHOSE POSSESSION THIS PROSPECTUS COMES ARE REQUIRED BY THE
COMPANY, THE SELLING STOCKHOLDER AND THE UNDERWRITERS TO INFORM THEMSELVES
ABOUT, AND TO OBSERVE ANY RESTRICTIONS AS TO, THE OFFERING AND THE DISTRIBUTION
OF THIS PROSPECTUS.

------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Prospectus Summary......................... 3
Risk Factors............................... 11
The Company................................ 16
Use of Proceeds............................ 17
Dividend Policy............................ 17
Dilution................................... 17
Capitalization............................. 19
Selected Historical Financial and Operating
Information.............................. 20
Unaudited Pro Forma Financial Statements... 21
Management's Discussion and Analysis of
Financial Condition and Results of
Operations............................... 29
Business................................... 37
Management................................. 50
Principal and Selling Stockholders......... 59
Certain Relationships and Related
Transactions............................. 61
Description of Capital Stock............... 64
Description of Indebtedness................ 65
Shares Eligible for Future Sale............ 69
Certain U.S. Tax Considerations Applicable
to Non-U.S. Holders of the Common
Stock.................................... 70
Underwriting............................... 73
Legal Matters.............................. 77
Experts.................................... 78
Available Information...................... 78
Index to Financial Statements.............. F-1
</TABLE>

------------------

======================================================

13,622,500 SHARES

[INTERNATIONAL HOME FOODS LOGO]

INTERNATIONAL HOME FOODS, INC.

COMMON STOCK
--------------------

PROSPECTUS
--------------------

DONALDSON, LUFKIN & JENRETTE
INTERNATIONAL

BT ALEX. BROWN INTERNATIONAL

CHASE MANHATTAN INTERNATIONAL LIMITED

CREDIT SUISSE FIRST BOSTON

GOLDMAN SACHS INTERNATIONAL

MORGAN STANLEY DEAN WITTER
November 18, 1997

======================================================