> Item 1. Condensed Consolidated Financial Statements

Condensed Consolidated Balance Sheets -  
        June 30, 2001 and December 30, 2000                      1
     Condensed Consolidated Statements of Earnings and
         Condensed Consolidated Statements of Comprehensive
         Income - Twenty-six Weeks and Thirteen Weeks Ended
         June 30, 2001 and July 1, 2000                          2
     Condensed Consolidated Statements of Cash Flows -  
         Twenty-six Weeks Ended June 30, 2001 
         and July 1, 2000                                        3
     Notes to Condensed Consolidated Financial Statements      4 - 5
 Item 2. Management's Discussion and Analysis of Financial
     Condition and Results of Operations                       6 - 8
 Item 3. Quantitative and Qualitative Disclosures About
     Market Risk                                                 9 
 
Part II. - Other Information                                         
 Item 1. Legal Proceedings                                       10
 Item 2. Changes in Securities and Use of Proceeds               10
 Item 3. Defaults Upon Senior Securities                         10
        
 Item 4. Submission of Matters to a Vote of Security Holders     10
  
 Item 5. Other Information                                       11
 Item 6. Exhibits and Reports on Form 8-K                        11

> 

1)   General

The condensed consolidated interim period financial statements presented herein do not include all of the information and disclosures required in annual financial statements and have not been audited, as permitted by the rules and regulations of the Securities and Exchange Commission. The condensed consolidated interim period financial statements should be read in conjunction with the annual financial statements included in the Ace Hardware Corporation Annual Report on Form 10-K
as filed with the Securities and Exchange Commission on March 22, 2001. In the opinion of management, these financial statements have been prepared in conformity with accounting principles generally accepted in the United States and reflect all adjustments necessary for a fair statement of the results of operations and cash flows for the interim periods ended June 30, 2001 and July 1, 2000 and of the Company's financial position as of June 30, 2001. All such adjustments are of a normal recurring nature. The results of operations for the thirteen week and twenty-six week periods ended June 30, 2001 and July 1, 2000 are not necessarily indicative of the results of operations for a full year.

> 

> The Company operates as a cooperative organization and will pay patronage dividends to consenting member dealers based on the earnings derived from business done with such dealers.  It has been the practice of the Company to distribute substantially all patronage sourced earnings in the form of patronage dividends. 
> Net earnings and patronage dividends will normally be similar since patronage sourced net earnings is paid to consenting member dealers. International
>   operations and dealers signed under a Retail Merchant Agreement are not eligible
>   for patronage dividends and related earnings or losses are not included in patronage sourced earnings.

> Certain financial statement reclassifications have been made to prior year and prior quarter amounts to conform to comparable classifications followed in 2001.

4)   Segments

> The Company is principally engaged as a wholesaler of hardware and related products and manufactures paint products.  The Company identifies segments based on management responsibility and the nature of the business activities of each component of the Company. The Company measures segment earnings as operating earnings including an allocation for administrative expenses, interest expense and income taxes. Information regarding the identified segments and the related reconciliation to consolidated information is as follows:

> There have been no material changes in the Company's market risk during the twenty-six week period ended June 30, 2001. For additional information, refer to Item 7a in the Company's Annual Report on Form 10-K for the year ended December 30, 2000.



> (b) A Form 8-K was filed on May 8, 2001 containing:
>   Notice of Annual Meeting of Stockholders on June 4, 2001 and  Proxy solicited by Board of Directors and related information.