<PAGE>

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

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   ----------

                              FORM 10-Q EQUIVALENT

                                   ----------

(Mark One)
          [_] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED DECEMBER 28, 2002

                                       OR

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

               For the transition period from ________ to ________

                              AGRILINK FOODS, INC.
             (Exact Name of Registrant as Specified in its Charter)

                  Delaware                                      16-0845824
      (State or other jurisdiction of                          (IRS Employer
       incorporation or organization)                     Identification Number)

90 Linden Oaks, PO Box 20670, Rochester, NY                     14602-6070
  (Address of Principal Executive Offices)                      (Zip Code)

        Registrant's Telephone Number, Including Area Code (585) 383-1850

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding  twelve months (or for such shorter period that the registrant was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                 YES [_] NO [_]

Indicate by checkmark whether the Registrant is an accelerated filer (as defined
in Rule 12b-2 of the Exchange Act).

                                 YES [_] NO [_]

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock as of the latest practicable date. As of February 7, 2003.

                              Common Stock: 11,000

     o    This  Form  10-Q   Equivalent  is  only  being  filed  pursuant  to  a
          requirement  contained  in the  indenture  governing  Agrilink  Foods,
          Inc.'s 11 7/8 Percent Senior Subordinated Notes Due 2008.

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                               Page 1 of 36 Pages




<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

AGRILINK FOODS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS, ACCUMULATED EARNINGS/(DEFICIT), AND
COMPREHENSIVE INCOME/(LOSS)
(DOLLARS IN THOUSANDS)
(UNAUDITED)

<TABLE>
<CAPTION>
                                                     Three Months Ended
                                           -------------------------------------
                                               Successor     |    Predecessor
                                           December 28, 2002 | December 29, 2001
                                           ----------------- | -----------------
<S>                                            <C>           |     <C>
Net sales                                      $ 274,375     |     $ 290,186
Cost of sales                                   (202,645)    |      (218,393)
                                               ---------     |     ---------
Gross profit                                      71,730     |        71,793
Selling, administrative, and general                         |
   expense                                       (35,677)    |       (30,816)
Restructuring                                          0     |        (1,572)
Gain from pension curtailment                          0     |             0
Income from joint venture                          1,116     |           950
                                               ---------     |     ---------
Operating income before dividing with                        |
   Pro-Fac                                        37,169     |        40,355
Interest expense                                 (12,266)    |       (16,239)
                                               ---------     |     ---------
Pretax income from continuing operations                     |
   and before dividing with Pro-Fac               24,903     |        24,116
Pro-Fac share of income                                0     |       (11,318)
                                               ---------     |     ---------
Pretax income from continuing operations          24,903     |        12,798
Tax provision                                     (9,931)    |        (5,633)
                                               ---------     |     ---------
Income before discontinued operations             14,972     |         7,165
Discontinued operations, net of a tax                        |
   benefit                                        (1,385)    |          (827)
                                               ---------     |     ---------
Net income                                        13,587     |         6,338
                                                             |
Accumulated earnings/(deficit) at                            |
   beginning of period                             1,475     |         2,809
                                               ---------     |     ---------
Accumulated earnings/(deficit) at end of                     |
   period                                      $  15,062     |     $   9,147
                                               =========     |     =========
                                                             |
Net income                                     $  13,587     |     $   6,338
Other comprehensive (loss)/income:                           |
   Unrealized gain/(loss) on hedging                         |
      activity, net of taxes                         169     |            66
                                               ---------     |     ---------
Comprehensive income                           $  13,756     |     $   6,404
                                               =========     |     =========
                                                             |
Accumulated other comprehensive                              |
   (loss)/income at beginning of period        $    (236)    |     $    (395)
Unrealized gain/(loss) on hedging                            |
   activity, net of taxes                            169     |            66
                                               ---------     |     ---------
Accumulated other comprehensive loss at                      |
   end of period                               $     (67)    |     $    (329)
                                               =========     |     =========

<CAPTION>
                                                        Six Months Ended
                                           -----------------------------------
                                               Successor     |   Predecessor        Predecessor
                                           August 19, 2002 - |  June 30, 2002     Six Months Ended
                                           December 28, 2002 | August 18, 2002   December 29, 2001
                                           ----------------- | ---------------   -----------------
<S>                                            <C>           |    <C>                <C>
Net sales                                      $ 380,820     |    $ 101,664          $ 533,774
Cost of sales                                   (284,646)    |      (78,116)          (415,360)
                                               ---------     |    ---------          ---------
Gross profit                                      96,174     |       23,548            118,414
Selling, administrative, and general                         |
   expense                                       (51,149)    |      (15,434)           (63,408)
Restructuring                                          0     |            0             (2,622)
Gain from pension curtailment                          0     |            0              2,472
Income from joint venture                          1,379     |          277              1,198
                                               ---------     |    ---------          ---------
Operating income before dividing with                        |
   Pro-Fac                                        46,404     |        8,391             56,054
Interest expense                                 (18,685)    |       (7,747)           (35,026)
                                               ---------     |    ---------          ---------
Pretax income from continuing operations                     |
   and before dividing with Pro-Fac               27,719     |          644             21,028
Pro-Fac share of income                                0     |            0             (9,062)
                                               ---------     |    ---------          ---------
Pretax income from continuing operations          27,719     |          644             11,966
Tax provision                                    (11,086)    |         (264)            (5,266)
                                               ---------     |    ---------          ---------
Income before discontinued operations             16,633     |          380              6,700
Discontinued operations, net of a tax                        |
   benefit                                        (1,571)    |         (295)            (1,624)
                                               ---------     |    ---------          ---------
Net income                                        15,062     |           85              5,076
                                                             |
Accumulated earnings/(deficit) at                            |
   beginning of period                                 0     |     (126,623)             4,071
                                               ---------     |    ---------          ---------
Accumulated earnings/(deficit) at end of                     |
   period                                      $  15,062     |    $(126,538)         $   9,147
                                               =========     |    =========          =========
                                                             |
Net income                                     $  15,062     |    $      85          $   5,076
Other comprehensive (loss)/income:                           |
   Unrealized gain/(loss) on hedging                         |
      activity, net of taxes                         (67)    |            0               (374)
                                               ---------     |    ---------          ---------
Comprehensive income                           $  14,995     |    $      85          $   4,702
                                               =========     |    =========          =========
                                                             |
Accumulated other comprehensive                              |
   (loss)/income at beginning of period        $       0     |    $    (367)         $      45
Unrealized gain/(loss) on hedging                            |
   activity, net of taxes                            (67)    |            0               (374)
                                               ---------     |    ---------          ---------
Accumulated other comprehensive loss at                      |
   end of period                               $     (67)    |    $    (367)         $    (329)
                                               =========     |    =========          =========
</TABLE>

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


                                       2




<PAGE>

AGRILINK FOODS, INC.
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
(UNAUDITED)

<TABLE>
<CAPTION>
                                                                                Successor   | Predecessor
                                                                               December 28, |   June 29,
                                                                                   2002     |     2002
                                                                               ------------ | -----------
<S>                                                                              <C>        |  <C>
                                     ASSETS                                                 |
                                                                                            |
Current assets:                                                                             |
   Cash and cash equivalents                                                     $ 37,903   |  $  14,686
   Accounts receivable trade, net of allowances for doubtful accounts              74,991   |     68,419
   Accounts receivable, other                                                       9,723   |      7,581
   Inventories, net                                                               317,165   |    291,745
   Current net investment in CoBank                                                 1,116   |      3,347
   Prepaid manufacturing expense                                                    3,441   |     19,168
   Prepaid expenses and other current assets                                       13,292   |     18,770
   Assets held for sale at net realizable value                                    10,843   |      8,746
   Due from Pro-Fac Cooperative, Inc.                                                   0   |     11,730
   Current deferred tax asset                                                       4,640   |      2,923
                                                                                 --------   |  ---------
         Total current assets                                                     473,114   |    447,115
Investment in CoBank                                                                6,294   |      6,294
Investment in and advances to joint venture                                        16,659   |     14,586
Property, plant and equipment, net                                                217,462   |    285,834
Goodwill                                                                           32,944   |     56,210
Intangible assets, net                                                            210,730   |     11,305
Other assets                                                                       32,159   |     22,160
Note receivable due from Pro-Fac Cooperative, Inc.                                      0   |      9,400
Non-current deferred tax asset                                                          0   |      4,837
                                                                                 --------   |  ---------
         Total assets                                                            $989,362   |  $ 857,741
                                                                                 ========   |  =========
                                                                                            |
                      LIABILITIES AND SHAREHOLDER'S EQUITY                                  |
                                                                                            |
Current liabilities:                                                                        |
   Current portion of obligations under capital leases                           $    821   |  $     821
   Current portion of long-term debt                                                6,821   |     14,916
   Current portion of Termination  and Transitional Services Agreements with                |
      Pro-Fac Cooperative, Inc.                                                     9,278   |          0
   Accounts payable                                                                58,197   |     71,198
   Income taxes payable                                                            10,544   |        879
   Accrued interest                                                                 5,630   |      6,255
   Accrued employee compensation                                                    8,869   |      8,000
   Other accrued expenses                                                          50,023   |     40,154
   Growers payable due to Pro-Fac Cooperative, Inc.                                18,660   |          0
                                                                                 --------   |  ---------
         Total current liabilities                                                168,843   |    142,223
Obligations under capital leases                                                    2,296   |      2,528
Long-term debt                                                                    509,706   |    623,057
Long-term portion of Termination and Transitional Services Agreements with                  |
      Pro-Fac Cooperative, Inc.                                                    26,536   |          0
Other non-current liabilities                                                      43,604   |     28,918
Non-current deferred tax liability                                                 21,685   |          0
                                                                                 --------   |  ---------
         Total liabilities                                                        772,670   |    796,726
                                                                                 --------   |  ---------
Commitments and contingencies                                                               |
Shareholder's Equity:                                                                       |
                                                                                            |
   Common stock, par value $.01; 11,000 shares                                              |
      authorized, issued and outstanding                                                0   |          0
   Additional paid-in capital                                                     201,697   |    188,005
   Accumulated earnings/(deficit)                                                  15,062   |   (126,623)
   Accumulated other comprehensive income/(loss):                                           |
      Unrealized (loss)/gain on hedging activity                                      (67)  |        206
      Minimum pension liability adjustment                                              0   |       (573)
                                                                                 --------   |  ---------
         Total shareholder's equity                                               216,692   |     61,015
                                                                                 --------   |  ---------
         Total liabilities and shareholder's equity                              $989,362   |  $ 857,741
                                                                                 ========   |  =========
</TABLE>

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


                                       3




<PAGE>

AGRILINK FOODS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)

<TABLE>
<CAPTION>
                                                                                 Six Months Ended
                                                                       -----------------------------------
                                                                           Successor     |   Predecessor        Predecessor
                                                                       August 19, 2002 - | June 30, 2002 -    Six Months Ended
                                                                       December 28, 2002 | August 18, 2002   December 29, 2001
                                                                       ----------------- | ---------------   -----------------
<S>                                                                        <C>           |     <C>               <C>
Cash Flows From Operating Activities:                                                    |
   Net income                                                              $  15,062     |     $     85          $   5,076
   Adjustments to reconcile net income to net cash provided by/(used in)                 |
      operating activities-                                                              |
         Depreciation                                                         11,116     |        3,833             15,376
         Amortization of certain intangible assets                               430     |          144                592
         Amortization of debt issue costs, amendment costs,                              |
            debt discounts and premiums, and interest in-kind                  3,972     |        1,201              3,224
         Equity in undistributed earnings of joint venture                    (1,155)    |         (277)            (1,099)
         Transitional Services Agreement with Pro-Fac Cooperative, Inc.         (192)    |            0                  0
         Change in assets and liabilities:                                               |
            Accounts receivable                                              (10,532)    |        1,818             (6,121)
            Inventories and prepaid manufacturing expense                     20,580     |      (33,170)           (56,148)
            Income taxes refundable/(payable)                                  9,740     |          (75)               272
            Accounts payable and other accrued expenses                        4,240     |      (10,972)           (72,831)
            Due to/(from) Pro-Fac Cooperative, Inc., net                      (5,397)    |        8,649              8,845
            Other assets and liabilities, net                                  1,226     |          909               (463)
                                                                           ---------     |     --------          ---------
Net cash provided by/(used in) operating activities                           49,090     |      (27,855)          (103,277)
                                                                           ---------     |     --------          ---------
                                                                                         |
Cash Flows From Investing Activities:                                                    |
   Purchase of property, plant and equipment                                  (5,797)    |       (2,187)            (7,363)
   Proceeds from disposals                                                       255     |            0                 36
   Repayments from/(advances to) joint venture                                   871     |       (1,512)            (3,863)
   Proceeds from investment in CoBank                                          1,116     |        1,115              2,665
                                                                           ---------     |     --------          ---------
Net cash used in investing activities                                         (3,555)    |       (2,584)            (8,525)
                                                                           ---------     |     --------          ---------
                                                                                         |
Cash Flows From Financing Activities:                                                    |
   Proceeds from issuance of long-term debt                                  270,000     |            0                  0
   Agrilink Holdings, Inc. investment                                        175,597     |            0                  0
   Net (payments)/proceeds on prior revolving credit facility                (22,000)    |       22,000            114,800
   Payments on long-term debt                                               (400,823)    |         (292)            (3,047)
   Payments on Termination Agreement with Pro-Fac Cooperative, Inc.           (6,000)    |            0                  0
   Payments on capital lease                                                    (194)    |          (38)                 0
   Cash paid for debt issuance costs                                         (24,129)    |            0                  0
   Cash paid for transaction fees                                             (6,000)    |            0                  0
   Cash paid in conjunction with debt amendment                                    0     |            0             (1,694)
                                                                           ---------     |     --------          ---------
Net cash (used in)/provided by financing activities                          (13,549)    |       21,670            110,059
                                                                           ---------     |     --------          ---------
Net change in cash and cash equivalents                                       31,986     |       (8,769)            (1,743)
Cash and cash equivalents at beginning of period                               5,917     |       14,686              7,656
                                                                           ---------     |     --------          ---------
Cash and cash equivalents at end of period                                 $  37,903     |     $  5,917          $   5,913
                                                                           =========     |     ========          =========
Supplemental Schedule of Non-Cash Financing Activities:                                  |
   Agrilink Holdings, Inc. investment                                      $  32,100     |     $      0          $       0
                                                                           =========     |     ========          =========
</TABLE>

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


                                       4




<PAGE>

                              AGRILINK FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  DESCRIPTION OF BUSINESS AND SUMMARY OF CERTAIN  SIGNIFICANT  ACCOUNTING
         POLICIES

THE  COMPANY:   Agrilink  Foods,  Inc.  (the  "Company"  or  "Agrilink  Foods"),
incorporated in 1961, is a producer and marketer of processed food products. The
Company has four primary product lines including:  vegetables,  fruits,  snacks,
and canned meals. The majority of each of the product lines' net sales is within
the United  States.  In addition,  all of the  Company's  operating  facilities,
excluding one in Mexico, are within the United States.

THE CHANGE IN CONTROL  (THE  "TRANSACTION"):  On August 19,  2002 (the  "Closing
Date"),  pursuant to the terms of the Unit Purchase  Agreement  dated as of June
20, 2002 (the "Unit  Purchase  Agreement"),  by and among  Pro-Fac  Cooperative,
Inc., a New York agricultural  cooperative  ("Pro-Fac"),  Agrilink Foods, at the
time a New  York  corporation  and a  wholly-owned  subsidiary  of  Pro-Fac  and
Vestar/Agrilink   Holdings   LLC,   a   Delaware   limited   liability   company
("Vestar/Agrilink  Holdings"),   Vestar/Agrilink  Holdings  and  its  affiliates
indirectly  acquired  control  of the  Company.  See  NOTE 2 to  the  "Notes  to
Consolidated  Financial  Statements"  for additional  disclosures  regarding the
Transaction.

The term  "successor"  refers  to  Agrilink  Foods  and all of its  subsidiaries
following the Transaction. The term "predecessor" refers to Agrilink Foods prior
to the change in control on August 19, 2002.

BASIS  OF  PRESENTATION:   The  accompanying  unaudited  consolidated  financial
statements have been prepared in accordance with accounting principles generally
accepted  in the  United  States  of  America  ("GAAP")  for  interim  financial
information and with the  instructions to Form 10-Q and Article 10 of Regulation
S-X.  Accordingly,  they do not include all of the information  required by GAAP
for complete financial statement presentation. In the opinion of management, all
adjustments  (consisting only of normal recurring  adjustments)  necessary for a
fair  presentation of the financial  position,  results of operations,  and cash
flows have been included. Operating results for the period from June 30, 2002 to
August 18, 2002 or the period from August 19, 2002 through December 28, 2002 are
not necessarily the results to be expected for other interim periods or the full
year.  These  financial  statements  should  be read  in  conjunction  with  the
financial statements and accompanying notes contained in the Company's Form 10-K
Equivalent for the fiscal year ended June 29, 2002.

CONSOLIDATION: The consolidated financial statements include the Company and its
wholly-owned  subsidiaries  after  elimination of intercompany  transactions and
balances. Investments in affiliates owned more than 20 percent but not in excess
of 50 percent are recorded under the equity method of accounting.

RECLASSIFICATION:  Certain  items for  fiscal  2002 have  been  reclassified  to
conform with the current period presentation.

NEW  ACCOUNTING  PRONOUNCEMENTS:   In  August  2001,  the  Financial  Accounting
Standards  Board ("FASB")  issued  Statement of Financial  Accounting  Standards
("SFAS")  No. 144  "Accounting  for the  Impairment  or Disposal  of  Long-Lived
Assets."  Effective  June 30, 2002,  Agrilink  Foods  adopted SFAS No. 144 which
addresses  financial  accounting and reporting for the impairment or disposal of
long-lived  assets.  The statement  requires an impairment loss be recognized if
the  carrying  amount  of  a  long-lived  asset  is  not  recoverable  from  its
undiscounted  cash  flow and  that  the  impairment  loss be  recognized  as the
difference  between the carrying amount and fair value of the asset.  Under SFAS
No. 144, assets held for sale that are a component of an entity will be included
in discontinued operations if the operations and cash flows will be or have been
eliminated  from the ongoing  operations of the entity,  and the entity will not
have any significant continuing involvement in the operations prospectively. The
adoption  of SFAS No. 144 did not impact the Company's profitability. See NOTE 3
to   the   "Notes   to   Consolidated   Financial   Statements"  for  additional
disclosures regarding discontinued operations.

In June 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with Exit or Disposal  Activities,"  which  addresses  financial  accounting and
reporting for costs  associated with exit or disposal  activities and supercedes
Emerging  Issues Task Force  ("EITF")  Issue 94-3,  "Liability  Recognition  for
Certain  Employee  Termination  Benefits  and  Other  Costs to Exit an  Activity
(including  Certain Costs Incurred in a  Restructuring)".  SFAS No. 146 requires
that a liability  for a cost  associated  with an exit or  disposal  activity be
recognized  when the  liability is incurred.  EITF 94-3 requires a liability for
exit costs be recognized at the date of an entity's  commitment to an exit plan.
The  provisions of SFAS No. 146 must be adopted for exit or disposal  activities
that are initiated after December 31, 2002.

TRADE  ACCOUNTS  RECEIVABLE:  The  Company  accounts  for trade  receivables  at
outstanding billed amounts, net of allowances for doubtful accounts. The Company
estimates  its allowance  for doubtful  accounts as a percentage of  receivables
overdue.  Also  included in the allowance in their  entirety are those  accounts
that have filed for bankruptcy, been sent to collections, and any other accounts
management  believes are not collectible based on historical losses. The Company
periodically  reviews the accounts  included in the allowance to determine those
to be written  off.  Generally,  after a period of one year,  or  through  legal
counsel's  advice,  accounts are written off. It is not Company policy to accrue
or collect interest on past due accounts.


                                       5




<PAGE>

The Company's  allowance for doubtful accounts is approximately  $1.0 million at
December 28, 2002, and $0.7 million at June 29, 2002.

NOTE 2. THE TRANSACTION

On August 19, 2002,  pursuant to the terms of the Unit Purchase  Agreement dated
as of June  20,  2002,  by and  among  Pro-Fac  Cooperative,  Inc.,  a New  York
agricultural cooperative, Agrilink Foods, at the time a New York corporation and
a  wholly-owned  subsidiary  of  Pro-Fac  and  Vestar/Agrilink  Holdings  LLC, a
Delaware limited liability company:

(i) Pro-Fac  contributed  to the capital of  Agrilink  Holdings  LLC, a Delaware
limited liability company ("Holdings LLC"), all of the shares of Agrilink Foods'
common  stock  owned by  Pro-Fac,  constituting  100  percent  of the issued and
outstanding  shares of Agrilink Foods' capital stock, in consideration for Class
B common units of Holdings  LLC,  representing  a 40.72  percent  common  equity
ownership; and

(ii) Vestar/Agrilink Holdings and certain co-investors (collectively,  "Vestar")
contributed  cash in the  aggregate  amount of $175.0  million to the capital of
Holdings LLC, in consideration  for preferred  units,  Class A common units, and
warrants which were immediately  exercised to acquire  additional Class A common
units.  After  exercising the warrants,  Vestar owns 56.24 percent of the common
equity of Holdings LLC. The  co-investors  are either under common control with,
or have delivered an unconditional  voting proxy to,  Vestar/Agrilink  Holdings.
The transactions  contemplated in and consummated  pursuant to the Unit Purchase
Agreement, are referred to herein collectively as the "Transaction."

Immediately  following  Pro-Fac's  contribution of its shares of Agrilink Foods'
common stock to Holdings LLC,  Holdings LLC  contributed  those shares valued at
$32.1  million  to  Agrilink  Holdings  Inc.   ("Holdings   Inc."),  a  Delaware
corporation and a direct,  wholly-owned subsidiary of Holdings LLC, and Agrilink
Foods became an indirect,  wholly-owned  subsidiary of Holdings LLC. As a result
of the Transaction,  Pro-Fac owns 40.72 percent and Vestar owns 56.24 percent of
the common  equity  securities of Holdings LLC. The Class A common units entitle
the owner thereof - Vestar - to two votes for each Class A common unit held. All
other  Holdings LLC common units entitle the  holder(s)  thereof to one vote for
each common unit held.  Accordingly,  Vestar has a voting majority of all common
units.

Also, as part of the  Transaction,  executive  officers of Agrilink  Foods,  and
certain other members of Agrilink Foods'  management,  entered into subscription
agreements  with  Holdings  LLC to  acquire,  with a  combination  of  cash  and
promissory  notes issued to Holdings  LLC, an aggregate  of  approximately  $1.3
million  of Class C common  units  and  Class D common  units of  Holdings  LLC,
representing  approximately  3.04 percent of the common equity ownership.  As of
December 28, 2002,  an additional  approximately  $0.5 million of Class C common
units and Class D common units,  representing  less than 1 percent of the common
equity ownership,  remained unissued. The foregoing individuals are also parties
to the Securityholders Agreement and the Limited Liability Agreement.

Prior to the Transaction, certain amounts owed by Pro-Fac to Agrilink Foods were
forgiven.  The amounts forgiven were approximately $36.5 million and represented
both  borrowings  for the working  capital  needs of Pro-Fac and a $9.4  million
demand receivable.

The  Transaction  was accounted  for under the purchase  method of accounting in
accordance  with  SFAS  No.  141,   "Business   Combinations."   Under  purchase
accounting, tangible and identifiable intangible assets acquired and liabilities
assumed will be recorded at their  respective  fair values.  The  valuations and
other  studies  which will  provide  the basis for such an  allocation  have not
progressed  to a stage where  there is  sufficient  information  to make a final
allocation in the accompanying financial statements.  Specifically,  preliminary
valuations have not yet been  finalized for the investment in the joint venture,
Great Lakes Kraut Company, LLC, and the  related  subordinated  promissory  note
(see  NOTE  11 to  the  "Notes to Consolidated Financial Statements").  As such,
these  items  have  been reflected  at their historical values. Accordingly, the
purchase  accounting  adjustments  made in the accompanying financial statements
are preliminary. Once an allocation is determined, in accordance with accounting
principles generally accepted in the United States, any remaining  excess of the
investment  over  identifiable  net  assets  acquired  will  be adjusted through
goodwill.

Holdings  Inc. has pushed down its purchase  accounting to Agrilink  Foods.  The
preliminary  excess  investment  made by  Holdings  Inc.  over  the  preliminary
estimates of the fair market value of the identifiable assets and liabilities of
the  Company as of the  Closing  Date was  approximately  $33.0  million  and is
reflected as goodwill in the accompanying  unaudited  consolidated balance sheet
as of December 28, 2002.

In  connection  with  the  Transaction,  management  determined  that  initially
approximately  171 employees  will be  terminated  and has announced the benefit
arrangements  to  those  employees.  These  activities  surround  the  Company's
decision  to exit  the  popcorn  and  applesauce  businesses  and  complete  the
relocation  of its  marketing  function  to  Rochester,  New York.  As a result,
approximately  $1.6 million in severance costs and other related exit costs have
been accrued for in purchase  accounting in accordance with Emerging Issues Task
Force ("EITF") 95-3,  "Recognition  of Liabilities in Connection with a Purchase
Business  Combination."  Approximately  $0.1 million has been  liquidated  as of
December 28, 2002.


                                       6




<PAGE>

As of August 19, 2002,  management  has begun to assess and  formulate a plan to
exit certain portions of its business. Management has not yet completed the exit
plan, and as a result,  the outline of the exit plan is considered  preliminary.
Accordingly,  upon  completion and execution of the plan,  certain assets may be
sold or impaired and certain  liabilities  may be incurred which could result in
additional  adjustments  to the  values  assigned  to  such  items  in  purchase
accounting.  Management  anticipates  the final  formulation of the plan will be
completed within the next six months. See NOTE 11,  "Subsequent  Events," to the
"Notes to Consolidated Financial Statements" included herein.

The following  unaudited pro forma financial  information  presents a summary of
consolidated  results of  operations  of the Company as if the  Transaction  had
occurred at the beginning of the periods presented.

(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                            Predecessor        Predecessor        Predecessor
                                        Three Months Ended   June 30, 2002 -   Six Months Ended
                                         December 29, 2001   August 18, 2002   December 29, 2001
                                        ------------------   ---------------   -----------------
<S>                                          <C>                 <C>                <C>
Net Sales                                    $290,186            $101,664           $533,774
Income before discontinued operations          15,338                 778             17,231
Net Income                                     14,511                 483             15,607
</TABLE>

These  unaudited pro forma results have been prepared for  comparative  purposes
only and primarily  include  adjustments for interest  expense,  taxes, the fair
value of operating leases,  income from the Transitional Services Agreement with
Pro-Fac and the  elimination of the historical  share of income or loss that has
been  recorded.  Included  in pro forma net  income for the three  months  ended
December  29,  2001 is a  non-recurring  amount of  approximately  $1.6  million
related to restructuring  expense. Also included in pro forma net income for the
six months ended December 29, 2001 are non-recurring items of approximately $2.6
million  related to  restructuring  expense and a $2.5 million gain from pension
curtailment.  These  results do not purport to be  indicative  of the results of
operations  which actually would have resulted had the  Transaction  occurred at
the  beginning  of the 2002  fiscal  year,  or of the future  operations  of the
successor company.

NOTE 3. DISCONTINUED OPERATIONS

As of August 19, 2002,  the Company has  committed to a plan to sell the popcorn
and applesauce  operations  previously reported in the snack and fruit segments,
respectively. It is anticipated that these transactions will be completed during
the third quarter of fiscal 2003. The implementation of SFAS No. 144 resulted in
the classification  and separate  financial  presentation of those businesses as
discontinued operations and are, therefore, excluded from continuing operations.
All prior periods have been reclassified to reflect the  discontinuance of these
operations.

In  addition,  having met the  criteria  outlined in SFAS No.  144,  the Company
reclassified certain assets relating to the popcorn and applesauce businesses to
assets  held for sale,  and,  in  accordance  with  SFAS No.  144,  the  Company
reclassified  the prior  period  balances.  Included in assets held for sale are
also facilities located in Alamo, Texas; Enumclaw,  Washington; Sodus, Michigan;
and Hortonville, Wisconsin which are being actively marketed for sale within the
fiscal year.

The major classes of discontinued  assets included in the  Consolidated  Balance
Sheets as assets held for sale at net realizable value are as follows:

                                         Successor        Predecessor
(DOLLARS IN THOUSANDS)               December 28, 2002   June 29, 2002
                                     -----------------   -------------
Inventories                               $ 5,109            $2,570
Property, plant and equipment, net          5,734             6,176
                                          -------            ------
   Total                                  $10,843            $8,746
                                          =======            ======


                                       7




<PAGE>

The operating results of those businesses  identified as held for sale have been
classified as discontinued  operations in the accompanying  financial statements
and are summarized as follows:

<TABLE>
<CAPTION>
                                                                             Six Months Ended
                                     Three Months Ended            ------------------------------------
                           -------------------------------------        Successor         Predecessor        Predecessor
                               Successor          Predecessor       August 19, 2002 -   June 30, 2002 -   Six Months Ended
                           December 28, 2002   December 29, 2001   December 28, 2002    August 18, 2002   December 29, 2001
                           -----------------   -----------------   ------------------   ---------------   -----------------
<S>                             <C>                 <C>                  <C>                 <C>               <C>
Net Sales                       $ 3,833             $ 4,363              $ 5,617             $2,063            $10,007
                                =======             =======              =======             ======            =======

Loss before income taxes        $(2,301)            $(1,489)             $(2,618)            $ (500)           $(2,913)
Income tax benefit                  916                 662                1,047                205              1,289
                                -------             -------              -------             ------            -------
Discontinued operations,
   net of tax benefit           $(1,385)            $  (827)             $(1,571)            $ (295)           $(1,624)
                                =======             =======              =======             ======            =======
</TABLE>

NOTE 4. AGREEMENTS WITH PRO-FAC

In connection  with the  Transaction,  Agrilink  Foods and Pro-Fac  entered into
several agreements effective as of the Closing Date, including the following:

(i)  TERMINATION  AGREEMENT.  Pro-Fac and Agrilink  Foods  entered into a letter
agreement dated as of the Closing Date (the "Termination  Agreement"),  pursuant
to which, among other things,  the marketing and facilitation  agreement between
Pro-Fac and Agrilink  Foods (the "Old  Marketing  and  Facilitation  Agreement")
which,   until  the  Closing  Date,   governed  the  crop  supply  and  purchase
relationship  between  Agrilink  Foods  and  Pro-Fac,  has been  terminated.  In
consideration of such termination, Agrilink Foods will pay Pro-Fac a termination
fee of $10.0  million per year for five years,  provided  that  certain  ongoing
conditions are met, including maintaining grower membership levels sufficient to
generate certain minimum crop supply.  The $10.0 million payment will be paid in
quarterly installments as follows: $4.0 million on each July 1, and $2.0 million
each on October 1, January 1, and April 1. The  Termination  Agreement  outlined
that the  first  payment  in the  amount of $4.0  million  was to be paid on the
Closing  Date and the next  payment to be made by October 1, 2002 and  quarterly
thereafter as outlined.  The liability  for the  Termination  Agreement has been
reflected at fair value utilizing a discount rate of 11 1/2 percent.  The amount
of the  obligation  under the  Termination  Agreement  was $35.0  million  as of
December 28, 2002.

(ii) AMENDED AND RESTATED  MARKETING  AND  FACILITATION  AGREEMENT.  Pro-Fac and
Agrilink Foods entered into an amended and restated  marketing and  facilitation
agreement dated as of the Closing Date (the "Amended and Restated  Marketing and
Facilitation  Agreement").  The Amended and Restated  Marketing and Facilitation
Agreement  supersedes and replaces the Old Marketing and Facilitation  Agreement
and provides that, among other things, Pro-Fac will be Agrilink Foods' preferred
supplier of crops.  Agrilink  Foods will continue to pay the  commercial  market
value ("CMV") of crops supplied by Pro-Fac, in installments corresponding to the
dates of payment by Pro-Fac to its members for crops  delivered.  CMV is defined
as the weighted  average price paid by other  commercial  processors for similar
crops  sold  under  preseason  contracts  and in the open  market in the same or
competing  market areas. The processes for determining CMV under the Amended and
Restated Marketing and Facilitation  Agreement are substantially the same as the
processes  used under the Old Marketing  and  Facilitation  Agreement.  Agrilink
Foods will make  payments to Pro-Fac of an estimated  CMV for a particular  crop
year, subject to adjustments to reflect the actual CMV following the end of such
year.  Commodity  committees of Pro-Fac will meet with Agrilink Foods management
to establish  CMV  guidelines,  review  calculations,  and report to a joint CMV
committee  of Pro-Fac and  Agrilink  Foods.  Amounts  paid by Agrilink  Foods to
Pro-Fac for the CMV of crops supplied for the six months ended December 28, 2002
and December 29, 2001 were $53.1 million and $66.6 million, respectively.

Unlike the Old Marketing and  Facilitation  Agreement,  the Amended and Restated
Marketing and  Facilitation  Agreement does not permit  Agrilink Foods to offset
its losses from products supplied by Pro-Fac or require it to share with Pro-Fac
its profits and it does not  require  Pro-Fac to reinvest in Agrilink  Foods any
part of Pro-Fac's patronage income.

The Amended and Restated Marketing and Facilitation Agreement also provides that
Agrilink  Foods  will  continue  to  provide to  Pro-Fac  services  relating  to
planning,  consulting,  sourcing and harvesting  crops from Pro-Fac members in a
manner consistent with past practices.  In addition,  for a period of five years
from the Closing Date,  Agrilink Foods may provide Pro-Fac with services related
to the expansion of the market for the agricultural  products of Pro-Fac members
(at no cost to Pro-Fac other than  reimbursement of Agrilink Foods'  incremental
and  out-of-pocket  expenses  related to providing such services as agreed to by
Pro-Fac and Agrilink Foods).

Under the Amended and Restated  Marketing and Facilitation  Agreement,  Agrilink
Foods  determines  the amount of crops which  Agrilink  Foods will  acquire from
Pro-Fac for each crop year.  If the amount to be  purchased  by  Agrilink  Foods
during a particular crop year does not meet (i) a defined crop amount and (ii) a
defined target  percentage of Agrilink's  needs for each  particular  crop, then
certain  shortfall  payments are made by Agrilink Foods to Pro-Fac.  The defined
crop amounts and targeted  percentages  are set based upon the needs of Agrilink
Foods in the 2001 crop year (fiscal 2002). The shortfall  payment  provisions of
the agreement  include a maximum  shortfall  payment,  determined for each crop,
that  can be paid  over the  term of the  Amended  and  Restated  Marketing  and
Facilitation  Agreement.  The aggregate  shortfall payment amounts for all crops
covered  under the  agreement  cannot  exceed $20.0 million over the term of the
agreement.


                                       8




<PAGE>

The Amended and Restated Marketing and Facilitation  Agreement may be terminated
by Agrilink  Foods in  connection  with certain  change in control  transactions
affecting Agrilink Foods or Holdings Inc.; provided,  however, that in the event
that any such  change in control  occurs  during the first three years after the
Closing  Date,  Agrilink  Foods must pay to Pro-Fac a  termination  fee of $20.0
million  (less the total amount of any  shortfall  payments  previously  paid to
Pro-Fac under the Amended and Restated  Marketing and  Facilitation  Agreement).
Also,  if, during the first three years after the Closing Date,  Agrilink  Foods
sells  one or more  portions  of its  business,  and if the  purchaser  does not
continue to  purchase  the crops  previously  purchased  by Agrilink  Foods with
respect  to the  transferred  business,  then such  failure  will be taken  into
consideration  when  determining  if  Agrilink  Foods  is  required  to make any
shortfall payments to Pro-Fac. After such three-year period,  Agrilink Foods may
sell portions of its business and the volumes of crop purchases  previously made
by Agrilink Foods with respect to such transferred  business will be disregarded
for purposes of determining shortfall payments.

(iii) TRANSITIONAL SERVICES AGREEMENT. Pro-Fac and Agrilink Foods entered into a
transitional services agreement (the "Transitional Services Agreement") dated as
of the Closing  Date,  pursuant to which  Agrilink  Foods will  provide  Pro-Fac
certain  administrative  and other  services  for a period of 24 months from the
Closing Date.  Agrilink Foods will generally  provide such services at no charge
to Pro-Fac,  other than reimbursement of the incremental and out-of-pocket costs
associated with performing those services for Pro-Fac. The value of the services
to be provided to Pro-Fac has been estimated at approximately $1.1 million.  The
amount of the obligation  outstanding under the Transitional  Services Agreement
as of December 28, 2002 was $0.9 million.  This  obligation will be reduced on a
straight-line basis over the term of the agreement and as services are provided.
Also pursuant to the  Transitional  Services  Agreement,  the general manager of
Pro-Fac may also be an employee of Agrilink  Foods, in which case he will report
to the chief executive  officer of Agrilink Foods with respect to his duties for
Agrilink  Foods,  and to the Pro-Fac  board of directors  with respect to duties
performed by him for Pro-Fac.  All other individuals  performing  services under
the Transitional  Services  Agreement report only to the chief executive officer
(or other representatives) of Agrilink Foods.

(iv) CREDIT  AGREEMENT.  Agrilink  Foods and Pro-Fac  have entered into a Credit
Agreement,  dated  August 19, 2002 (the "Credit  Agreement"),  pursuant to which
Agrilink  Foods has agreed to make  available  to Pro-Fac  loans in an aggregate
principal  amount of up to $5.0  million  (the  "Credit  Facility").  Pro-Fac is
permitted  to draw down up to $1.0  million per year under the Credit  Facility,
unless Agrilink Foods is prohibited from making such advances under the terms of
certain third party  indebtedness  of Agrilink  Foods.  The amount of the Credit
Facility will be reduced, on a dollar-for-dollar basis, to the extent of certain
distributions  made by Holdings  LLC to Pro-Fac in respect of its  ownership  in
Holdings  LLC.  Pro-Fac has pledged all of its Class B Common  Units in Holdings
LLC as security  for advances  under the Credit  Facility.  The Credit  Facility
bears  interest  at the rate of 10  percent  per  annum.  There  were no amounts
outstanding under this Credit Agreement at December 28, 2002.

In addition,  prior to the  Transaction,  certain amounts totaling $36.5 million
owed by Pro-Fac to Agrilink Foods were forgiven,  including both  borrowings for
the working capital needs of Pro-Fac and a $9.4 million demand receivable.

In addition,  under the Old Marketing and Facilitation Agreement, in any year in
which the Company  had  earnings on  products  which were  processed  from crops
supplied  by Pro-Fac,  the Company  paid to  Pro-Fac,  as  additional  patronage
income, 90 percent of such earnings,  but in no case more than 50 percent of all
pretax earnings of the Company (before dividing with Pro-Fac). In years in which
the Company had losses on crops supplied by Pro-Fac, the Company reduced the CMV
it would  otherwise pay to Pro-Fac by 90 percent of such losses,  but in no case
by more than 50 percent of all pretax  losses of the  Company  (before  dividing
with  Pro-Fac).  Additional  patronage  income was paid to Pro-Fac for  services
provided to Agrilink Foods,  including the provision of a long term, stable crop
supply, favorable payment terms for crops, and the sharing of risks of losses of
certain  operations of the business.  Earnings and losses were determined at the
end of the fiscal year, but were accrued on an estimated  basis during the year.
For the three and six months ended December 29, 2001,  Pro-Fac's share of income
was $11.3 million and $9.1 million, respectively.

NOTE 5. INVENTORIES

The major classes of inventories are as follows:

(DOLLARS IN THOUSANDS)

                               Successor    Predecessor
                             December 28,     June 29,
                                 2002           2002
                             ------------   -----------
Finished goods                 $292,868       $264,770
Raw materials and supplies       24,297         26,975
                               --------       --------
   Total inventories           $317,165       $291,745
                               ========       ========


                                       9




<PAGE>

NOTE 6. ACCOUNTING FOR GOODWILL AND INTANGIBLE ASSETS

In June 2001,  the FASB  issued  SFAS No. 142,  "Goodwill  and Other  Intangible
Assets." SFAS No. 142 requires  that  goodwill not be amortized,  but instead be
tested at least annually for impairment and expensed  against  earnings when its
implied fair value is less than its carrying amount.

As of December  28, 2002 the amounts  assigned to goodwill and  intangibles  are
preliminary as not all  valuations,  exit plans,  and other studies,  which will
provide  the basis for the  allocation  of fair value to assets and  liabilities
have progressed to a stage where there is sufficient information to make a final
allocation in the accompanying  financial  statements.  In addition,  the amount
assigned to  goodwill  has not yet been  allocated  to the  Company's  operating
segments due to the preliminary nature of this information.

As outlined in SFAS No. 142, certain  intangibles  with a finite life,  however,
are required to continue to be amortized.  The following schedule sets forth the
major classes of intangible assets held by the Company:

(DOLLARS IN THOUSANDS)

                                         Successor    Predecessor
                                       December 28,     June 29,
                                           2002           2002
                                       ------------   -----------
Amortized intangibles:
   Covenants not to compete              $    754       $ 2,478
   Other                                   10,406        12,000
      Less: accumulated amortization         (430)       (3,173)
                                         --------       -------
   Amortized intangibles, net              10,730        11,305
Unamortized intangibles:
   Trademarks                             200,000             0
                                         --------       -------
      Total intangible assets, net       $210,730       $11,305
                                         ========       =======

The  aggregate  amortization  expense  associated  with  intangible  assets  was
approximately  $0.3 million for the successor  period for the three months ended
December 28, 2002,  and $0.4 million for the  successor  period  August 19, 2002
through December 28, 2002. The aggregate  amortization  expense was $0.1 million
for the  predecessor  period June 30, 2002  through  August 18,  2002,  and $0.3
million and $0.6 million for the  predecessor  three months and six months ended
December 29, 2001, respectively.  The aggregate amortization expense for each of
the five succeeding fiscal years is estimated as follows:

(DOLLARS IN THOUSANDS)

           Aggregate
            Annual
Fiscal   Amortization
 Year       Expense
------   ------------
2004         $915
2005          891
2006          891
2007          760
2008          752


                                       10




<PAGE>

NOTE 7. DEBT

SUMMARY OF LONG-TERM DEBT:

(DOLLARS IN THOUSANDS)

                                                   Successor    Predecessor
                                                 December 28,     June 29,
                                                     2002           2002
                                                 ------------   -----------

Revolving Credit Facility                          $      0      $      0
Term Loan Facility                                  270,000       400,800
Senior Subordinated Notes                           207,761       200,015
Subordinated Promissory Note (net of discount)       34,621        32,696
Other                                                 4,145         4,462
                                                   --------      --------
Total debt                                          516,527       637,973
Less current portion                                 (6,821)      (14,916)
                                                   --------      --------
Total long-term debt                               $509,706      $623,057
                                                   ========      ========

BANK DEBT: In connection with the Transaction, Agrilink Foods and certain of its
subsidiaries  entered into a senior secured credit  facility (the "Senior Credit
Facility")  in the amount of $470.0  million with a syndicate of banks and other
lenders   arranged  by  JPMorgan  Chase  Bank   ("JPMorgan   Chase  Bank"),   as
administrative  and collateral agent. The Senior Credit Facility is comprised of
(i) a $200.0 million senior secured  revolving  credit  facility (the "Revolving
Credit  Facility")  and (ii) a $270.0  million  senior  secured B term loan (the
"Term Loan  Facility").  The  Revolving  Credit  Facility has a maturity of five
years and allows up to $40.0  million to be  available in the form of letters of
credit. The Term Loan Facility has a maturity of six years.

The Senior Credit  Facility  bears interest at the Company's  option,  at a base
rate or LIBOR plus,  in each case,  an applicable  percentage.  The  appropriate
applicable percentage  corresponds to the Company's Consolidated Leverage Ratio,
as defined by the senior credit agreement (the "Senior Credit  Agreement"),  and
is adjusted  quarterly  based on the  calculation of the  Consolidated  Leverage
Ratio. As of December 28, 2002, the Senior Credit Facility bears interest in the
case of base rate loans at the base rate plus (i) 1.75  percent  for loans under
the Revolving  Credit  Facility,  and (ii) 2.00 percent for loans under the Term
Loan  Facility or in the case of LIBOR loans at LIBOR plus (i) 2.75  percent for
loans under the Revolving  Credit Facility and (ii) 3.00 percent for loans under
the Term Loan Facility. The initial unused commitment fee is 0.50 percent on the
daily average unused  commitment  under the Revolving Credit Facility and varies
based on the Company's Consolidated Leverage Ratio, as defined.

Commencing  December 31, 2002, the Term Loan Facility requires payments in equal
quarterly  installments  in the amount of $675,000  until its final  maturity in
August 2008 upon which the balance will be due.  The Term Loan  Facility is also
subject to  mandatory  prepayments  under  various  scenarios  as defined in the
Senior Credit Agreement.  Provisions of the Senior Credit Agreement require that
annual  payments,  within 105 days  after the end of each  fiscal  year,  in the
amount of  "excess  cash  flow" be  utilized  to  prepay  the  commitment  at an
applicable percentage that corresponds to the Company's leverage ratio.

The Senior Credit Facility contains customary  covenants and restrictions on the
Company's  activities,  including  but not  limited to: (i)  limitations  on the
incurrence of  indebtedness;  (ii) limitations on  sale-leaseback  transactions,
liens, investments, loans, advances, guarantees,  acquisitions, asset sales, and
certain  hedging   agreements;   and  (iii)  limitations  on  transactions  with
affiliates  and other  distributions.  The Senior Credit  Facility also contains
financial  covenants which provide for a maximum average debt to EBITDA ratio, a
maximum  average  senior debt to EBITDA ratio,  and a minimum EBITDA to interest
expense ratio.  The Company is in compliance  with all covenants,  restrictions,
and requirements under the terms of the Senior Credit Facility.  The proceeds of
the Term Loan  Facility and  borrowings  under the  Revolving  Credit  Facility,
together  with  Vestar's  $175.0  million  investment,  were  used to repay  and
terminate  Agrilink Foods'  indebtedness under its senior credit facilities with
Harris  Trust and Savings Bank and the lenders  thereunder,  to  consummate  the
Transaction, and to pay related fees and expenses incurred in the Transaction.

SENIOR SUBORDINATED  NOTES:  Agrilink Foods has outstanding $200.0 million of 11
7/8 percent Senior  Subordinated  Notes (the  "Notes"),  due 2008. In connection
with the  Transaction,  the Company  recorded the Notes at estimated fair value,
$208.2 million.  The $8.2 million premium is being  amortized  against  interest
expense over the life of the Notes.


                                       11




<PAGE>

NOTE 8. OPERATING SEGMENTS

The  Company  is  organized  by  product  line for  management  reporting,  with
operating   income   being  the  primary   measure  of  segment   profitability.
Accordingly,  no items below operating  earnings are allocated to segments.  The
Company's four primary operating  segments are as follows:  vegetables,  fruits,
snacks, and canned meals.

The  vegetable  product  line  consists of canned and frozen  vegetables,  chili
beans,  and  various  other  products.  Branded  products  within the  vegetable
category include Birds Eye, Birds Eye Voila!,  Birds Eye Simply Grillin',  Birds
Eye Hearty Spoonfuls, Veg-All, Freshlike, McKenzies, and Brooks Chili Beans. The
fruit product line consists of canned and frozen fruits including fruit fillings
and toppings.  Branded  products within the fruit category  include Comstock and
Wilderness. The snack product line consists of potato chips and other corn-based
snack items.  Branded  products within the snack category  include Tim's Cascade
Chips,   Snyder  of  Berlin,   Husman,  La  Restaurante,   Erin's,   and  Flavor
Destinations. The canned meal product line includes canned meat products such as
chilies,  stew, soups, and various other  ready-to-eat  prepared meals.  Branded
products  within the canned meal category  include  Nalley.  The Company's other
product lines primarily  represent salad dressings.  Branded products within the
other category include Bernstein's and Nalley.

The following table illustrates the Company's operating segment information:

(DOLLARS IN MILLIONS)

<TABLE>
<CAPTION>
                                                                                 Six Months Ended
                                         Three Months Ended             -----------------------------------
                                -------------------------------------       Successor         Predecessor        Predecessor
                                    Successor          Predecessor      August 19, 2002 -    June 30, 2002     Six Months Ended
                                December 28, 2002   December 29, 2001   December 28, 2002   August 18, 2002   December 29, 2001
                                -----------------   -----------------   -----------------   ---------------   -----------------
<S>                                      <C>                 <C>                 <C>                <C>                <C>
Net Sales:
   Vegetables                        $199.8              $210.7              $273.2             $ 69.5             $387.2
   Fruits                              35.4                39.2                49.0               12.2               64.1
   Snacks                              19.4                19.5                28.9               10.6               39.7
   Canned Meals                        12.4                11.9                18.7                4.5               24.3
   Other                                7.4                 8.9                11.0                4.9               18.5
                                     ------              ------              ------             ------             ------
Total continuing segments            $274.4              $290.2              $380.8             $101.7             $533.8
                                     ======              ======              ======             ======             ======
Operating income:
   Vegetables                        $ 20.3              $ 27.2              $ 22.9             $  3.8             $ 32.0
   Fruits                              12.0                 9.4                16.2                2.4               13.7
   Snacks                               2.6                 2.5                 4.1                1.5                5.2
   Canned Meals                         1.4                 2.1                 2.0                0.3                3.9
   Other                                0.9                 0.7                 1.2                0.4                1.4
                                     ------              ------              ------             ------             ------
Operating income before
   nonrecurring items                  37.2                41.9                46.4                8.4               56.2
Restructuring                           0.0                (1.6)                0.0                0.0               (2.7)
Gain from pension curtailment           0.0                 0.0                 0.0                0.0                2.5
                                     ------              ------              ------             ------             ------
Operating income before dividing
   with Pro-Fac                        37.2                40.3                46.4                8.4               56.0
Interest expense                      (12.3)              (16.2)              (18.7)              (7.8)             (35.0)
                                     ------              -------             ------             ------             ------
Pretax income from continuing
   operations and before dividing
   with Pro-Fac                      $ 24.9              $ 24.1              $ 27.7             $  0.6             $ 21.0
                                     ======              ======              ======             ======             ======
</TABLE>

NOTE 9. SUBSIDIARY GUARANTORS

Kennedy  Endeavors,  Incorporated  and  Linden  Oaks  Corporation,  wholly-owned
subsidiaries  of the Company  ("Subsidiary  Guarantors"),  and Pro-Fac  (Pro-Fac
files periodic reports under the Security Exchange Act of 1934,  Commission File
Number   0-20539)  have  jointly  and  severally,   fully  and   unconditionally
guaranteed,  on a senior subordinated basis, the obligations of the Company with
respect to the Company's 11 7/8 percent Senior  Subordinated Notes due 2008 (the
"Notes").  In addition,  the Subsidiary  Guarantors  have jointly and severally,
fully and unconditionally guaranteed the obligations of the Company with respect
to the  Company's  Senior  Credit  Facility.  The covenants in the Notes and the
Senior Credit Facility do not restrict the ability of the Subsidiary  Guarantors
to make cash distributions to the Company.

Presented  below  is  condensed  consolidating  financial  information  for  (i)
Agrilink  Foods,  (ii)  the  subsidiary  guarantors,   and  (iii)  non-guarantor
subsidiaries.   The  condensed  consolidating  financial  information  has  been
presented to show the nature of assets  held,  results of  operations,  and cash
flow of the Company and its Subsidiary Guarantors and non-guarantor subsidiaries
in  accordance  with  Securities  and Exchange  Commission  Financial  Reporting
Release No. 55.


                                       12




<PAGE>

<TABLE>
<CAPTION>
                                                                                    SUCCESSOR
                                                                             STATEMENT OF OPERATIONS
                                                                       Three Months Ended December 28, 2002
                                                      ---------------------------------------------------------------------
                                                       Agrilink     Subsidiary   Non-Guarantor   Eliminating
                                                      Foods, Inc.   Guarantors   Subsidiaries      Entries     Consolidated
                                                      -----------   ----------   -------------   -----------   ------------
<S>                                                    <C>           <C>            <C>            <C>          <C>
(DOLLARS IN THOUSANDS)

Net sales                                              $ 270,183     $ 4,192        $ 5,219        $(5,219)     $ 274,375
Cost of sales                                           (199,990)     (2,655)        (3,841)         3,841       (202,645)
                                                       ---------     -------        -------        -------      ---------
Gross profit/(loss)                                       70,193       1,537          1,378         (1,378)        71,730
Selling, administrative, and general expenses            (34,891)       (786)             0              0        (35,677)
Other (expense)/income                                   (14,737)     14,737            120           (120)             0
Income from joint venture                                  1,116           0              0              0          1,116
                                                       ---------     -------        -------        -------      ---------
Operating income/(loss) before discontinued
   operations                                             21,681      15,488          1,498         (1,498)        37,169
Interest (expense)/income                                (14,723)      2,457              0              0        (12,266)
                                                       ---------     -------        -------        -------      ---------
Pretax income/(loss) before discontinued operations        6,958      17,945          1,498         (1,498)        24,903
Tax provision                                             (3,380)     (6,417)          (134)             0         (9,931)
                                                       ---------     -------        -------        -------      ---------
Net income/(loss) before discontinued operations           3,578      11,528          1,364         (1,498)        14,972
Discontinued operations (net of a tax benefit
   of $916)                                               (1,385)          0              0              0         (1,385)
                                                       ---------     -------        -------        -------      ---------
Net income/(loss)                                      $   2,193     $11,528        $ 1,364        $(1,498)     $  13,587
                                                       =========     =======        =======        =======      =========
</TABLE>

<TABLE>
<CAPTION>
                                                                                    SUCCESSOR
                                                                             STATEMENT OF OPERATIONS
                                                                       August 19, 2002 - December 28, 2002
                                                      ---------------------------------------------------------------------
                                                       Agrilink     Subsidiary   Non-Guarantor   Eliminating
                                                      Foods, Inc.   Guarantors   Subsidiaries      Entries     Consolidated
                                                      -----------   ----------   -------------   -----------   ------------
<S>                                                    <C>           <C>            <C>            <C>          <C>
(DOLLARS IN THOUSANDS)

Net sales                                              $ 374,696     $ 6,124        $ 5,572        $(5,572)     $ 380,820
Cost of sales                                           (280,766)     (3,880)        (4,538)         4,538       (284,646)
                                                       ---------     -------        -------        -------      ---------
Gross profit/(loss)                                       93,930       2,244          1,034         (1,034)        96,174
Selling, administrative, and general expenses            (49,965)     (1,184)             0              0        (51,149)
Other (expense)/income                                   (20,046)     20,046            132           (132)             0
Income from joint venture                                  1,379           0              0              0          1,379
                                                       ---------     -------        -------        -------      ---------
Operating income/(loss) before discontinued
   operations                                             25,298      21,106          1,166         (1,166)        46,404
Interest (expense)/income                                (22,276)      3,591              0              0        (18,685)
                                                       ---------     -------        -------        -------      ---------
Pretax income/(loss) before discontinued operations        3,022      24,697          1,166         (1,166)        27,719
Tax provision                                             (2,005)     (8,854)          (227)             0        (11,086)
                                                       ---------     -------        -------        -------      ---------
Net income/(loss) before discontinued operations           1,017      15,843            939         (1,166)        16,633
Discontinued operations (net of a tax benefit
   of $1,047)                                             (1,571)          0              0              0         (1,571)
                                                       ---------     -------        -------        -------      ---------
Net (loss)/income                                      $    (554)    $15,843        $   939        $(1,166)     $  15,062
                                                       =========     =======        =======         =======     =========
</TABLE>


                                       13




<PAGE>

<TABLE>
<CAPTION>
                                                                                   PREDECESSOR
                                                                             STATEMENT OF OPERATIONS
                                                                         June 30, 2002 - August 18, 2002
                                                      ---------------------------------------------------------------------
                                                       Agrilink     Subsidiary   Non-Guarantor   Eliminating
                                                      Foods, Inc.   Guarantors   Subsidiaries      Entries     Consolidated
                                                      -----------   ----------   -------------   -----------   ------------
<S>                                                    <C>           <C>            <C>            <C>           <C>
(DOLLARS IN THOUSANDS)

Net sales                                              $ 99,188      $ 2,476        $ 1,069        $(1,069)      $101,664
Cost of sales                                           (76,505)      (1,611)        (1,432)         1,432        (78,116)
                                                       --------      -------        -------        -------       --------
Gross profit/(loss)                                      22,683          865           (363)           363         23,548
Selling, administrative, and general expenses           (14,946)        (488)             0              0        (15,434)
Other (expense)/income                                   (5,507)       5,507             41            (41)             0
Income from joint venture                                   277            0              0              0            277
                                                       --------      -------        -------        -------       --------
Operating income/(loss) before
   discontinued operations                                2,507        5,884           (322)           322          8,391
Interest (expense)/income                                (9,069)       1,322              0              0         (7,747)
                                                       --------      -------        -------        -------       --------
Pretax (loss)/income before discontinued operations      (6,562)       7,206           (322)           322            644
Tax benefit/(provision)                                   2,354       (2,572)           (46)             0           (264)
                                                       --------      -------        -------        -------       --------
Net (loss)/income before discontinued operations         (4,208)       4,634           (368)           322            380
Discontinued operations (net of tax benefit
   of $205)                                                (295)           0              0              0           (295)
                                                       --------      -------        -------        -------       --------
Net (loss)/income                                      $ (4,503)     $ 4,634        $  (368)       $   322       $     85
                                                       ========      =======        =======        =======       ========
</TABLE>


                                       14




<PAGE>

<TABLE>
<CAPTION>
                                                                                    SUCCESSOR
                                                                                  BALANCE SHEET
                                                                                December 28, 2002
                                                      ---------------------------------------------------------------------
                                                       Agrilink     Subsidiary   Non-Guarantor   Eliminating
                                                      Foods, Inc.   Guarantors    Subsidiaries     Entries     Consolidated
                                                      -----------   ----------   -------------   -----------   ------------
<S>                                                    <C>           <C>            <C>           <C>            <C>
(DOLLARS IN THOUSANDS)

ASSETS

   Cash and cash equivalents                           $   36,886    $    317       $  700        $       0      $ 37,903
   Accounts receivable, net                                81,785       2,835           94                0        84,714
   Inventories -
      Finished goods                                      292,287         389          192                0       292,868
      Raw materials and supplies                           23,663         516          118                0        24,297
                                                       ----------    --------       ------        ---------      --------
         Total inventories                                315,950         905          310                0       317,165

   Other current assets                                    32,658           9          665                0        33,332
                                                       ----------    --------       ------        ---------      --------

         Total current assets                             467,279       4,066        1,769                0       473,114

   Property, plant and equipment, net                     209,921       4,075        3,466                0       217,462
   Investment in subsidiaries                             323,559           0            0         (323,559)            0
   Goodwill and other intangible assets, net               33,549     210,125            0                0       243,674
   Other assets                                            54,809     107,733            0         (107,430)       55,112
                                                       ----------    --------       ------        ---------      --------

         Total assets                                  $1,089,117    $325,999       $5,235        $(430,989)     $989,362
                                                       ==========    ========       ======        =========      ========

LIABILITIES AND SHAREHOLDER'S EQUITY

   Current portion of long-term debt                   $    6,821    $      0       $    0        $       0      $  6,821
   Current portion of Termination and Transitional
      Services Agreements with Pro-Fac
      Cooperative, Inc.                                     9,278           0            0                0         9,278
   Accounts payable                                        57,196         549          452                0        58,197
   Accrued interest                                         5,630           0            0                0         5,630
   Intercompany loans                                       1,556      (1,556)           0                0             0
   Other current liabilities                               80,687       7,202        1,028                0        88,917
                                                       ----------    --------       ------        ---------      --------
         Total current liabilities                        161,168       6,195        1,480                0       168,843
   Long-term debt                                         509,706           0            0                0       509,706
   Long-term portion of Termination and
      Transitional Services Agreements
      with Pro-Fac Cooperative, Inc.                       26,536           0            0                0        26,536
   Other non-current liabilities                          175,015           0            0         (107,430)       67,585
                                                       ----------    --------       ------        ---------      --------

         Total liabilities                                872,425       6,195        1,480         (107,430)      772,670

   Shareholder's equity                                   216,692     319,804        3,755         (323,559)      216,692
                                                       ----------    --------       ------        ---------      --------

         Total liabilities and shareholder's equity    $1,089,117    $325,999       $5,235        $(430,989)     $989,362
                                                       ==========    ========       ======        =========      ========
</TABLE>


                                       15




<PAGE>

<TABLE>
<CAPTION>
                                                                                   SUCCESSOR
                                                                            STATEMENT OF CASH FLOWS
                                                                      August 19, 2002 - December 28, 2002
                                                     ---------------------------------------------------------------------
                                                      Agrilink     Subsidiary   Non-Guarantor   Eliminating
                                                     Foods, Inc.   Guarantors    Subsidiaries     Entries     Consolidated
                                                     -----------   ----------   -------------   -----------   ------------
<S>                                                   <C>           <C>            <C>            <C>           <C>
(DOLLARS IN THOUSANDS)
Cash Flows From Operating Activities:
   Net (loss)/income                                  $    (554)    $ 15,843       $   939        $(1,166)      $  15,062
   Adjustments to reconcile net (loss)/income to
      cash provided by/(used in) operating
      activities -
         Depreciation                                    10,847          156           113              0          11,116
         Amortization of certain intangible assets          149          281             0              0             430
         Amortization of debt issue costs,
            amendment costs, debt discounts and
            premiums, and interest in-kind                3,972            0             0              0           3,972
         Transitional Services Agreement with
            Pro-Fac Cooperative, Inc.                      (192)           0             0              0            (192)
         Equity in undistributed earnings of joint
            venture                                      (1,155)           0             0              0          (1,155)
         Change in working capital                       36,123      (16,021)       (1,411)         1,166          19,857
                                                      ---------     --------       -------        -------       ---------
Net cash provided by/(used in) operating
   activities                                            49,190          259          (359)             0          49,090

Cash Flows From Investing Activities:
   Purchase of property, plant, and equipment            (5,628)           0          (169)             0          (5,797)
   Proceeds from disposal                                   250            0             5              0             255
   Proceeds from investment in CoBank                     1,116            0             0              0           1,116
   Repayments from joint venture                            871            0             0              0             871
                                                      ---------     --------       -------        -------       ---------
Net cash used in investing activities                    (3,391)           0          (164)             0          (3,555)

Cash Flows From Financing Activities:
   Payments on old revolving credit facility            (22,000)           0             0              0         (22,000)
   Proceeds from issuance of long-term debt             270,000            0             0              0         270,000
   Agrilink Holdings, Inc. investment                   175,597            0             0              0         175,597
   Payments on long-term debt                          (400,823)           0             0              0        (400,823)
   Payments on Termination Agreement with
      Pro-Fac Cooperative, Inc.                          (6,000)           0             0              0          (6,000)
   Payments on capital lease                               (194)           0             0              0            (194)
   Cash paid for debt issuance costs                    (24,129)           0             0              0         (24,129)
   Cash paid for transaction fees                        (6,000)           0             0              0          (6,000)
                                                      ---------     --------       -------        -------       ---------
Net cash used in financing activities                   (13,549)           0             0              0         (13,549)

Net change in cash and cash equivalents                  32,250          259          (523)             0          31,986

Cash and cash equivalents at beginning of period          4,636           58         1,223              0           5,917
                                                      ---------     --------       -------        -------       ---------
Cash and cash equivalents at end of period            $  36,886     $    317       $   700        $     0       $  37,903
                                                      =========     ========       =======        =======       =========
</TABLE>


                                       16




<PAGE>

<TABLE>
<CAPTION>
                                                                                        PREDECESSOR
                                                                                 STATEMENT OF CASH FLOWS
                                                                              June 30, 2002 - August 18, 2002
                                                          ---------------------------------------------------------------------
                                                           Agrilink     Subsidiary   Non-Guarantor   Eliminating
(DOLLARS IN THOUSANDS)                                    Foods, Inc.   Guarantors   Subsidiaries      Entries     Consolidated
                                                          -----------   ----------   -------------   -----------   ------------
<S>                                                        <C>           <C>             <C>            <C>          <C>
Cash Flows From Operating Activities:
   Net (loss)/income                                       $ (4,503)     $ 4,634         $ (368)        $ 322        $     85
   Adjustments to reconcile net (loss)/income to net
      cash (used in)/provided by operating activities -
         Depreciation                                         3,741           69             23             0           3,833
         Amortization of certain intangible assets               50           94              0             0             144
         Amortization of debt issue costs, amendment costs,
           debt discounts and premiums, and interest in-kind  1,201            0              0             0           1,201
         Equity in undistributed earnings of joint venture     (277)           0              0             0            (277)
         Change in working capital                          (28,911)      (4,860)         1,252          (322)        (32,841)
                                                           --------      -------         ------         -----        --------
Net cash (used in)/provided by operating activities         (28,699)         (63)           907             0         (27,855)

Cash Flows From Investing Activities:
   Purchase of property, plant, and equipment                (2,181)           0             (6)            0          (2,187)
   Advances to joint venture                                 (1,512)           0              0             0          (1,512)
   Proceeds from investment in CoBank                         1,115            0              0             0           1,115
                                                           --------      -------         ------         -----        --------
Net cash used in investing activities                        (2,578)           0             (6)            0          (2,584)

Cash Flows From Financing Activities:
   Net proceeds from old revolving credit facility           22,000            0              0             0          22,000
   Payments on long-term debt                                  (292)           0              0             0            (292)
   Payments on capital leases                                   (38)           0              0             0             (38)
                                                           --------      -------         ------         -----        --------

Net cash provided by financing activities                    21,670            0              0             0          21,670

Net change in cash and cash equivalents                      (9,607)         (63)           901             0          (8,769)

Cash and cash equivalents at beginning of period             14,243          121            322             0          14,686
                                                           --------      -------         ------         -----        --------
Cash and cash equivalents at end of period                 $  4,636      $    58         $1,223         $   0        $  5,917
                                                           ========      =======         ======         =====        ========
</TABLE>


                                       17




<PAGE>

<TABLE>
<CAPTION>
                                                                                    PREDECESSOR
                                                                               STATEMENT OF OPERATIONS
                                                                          Three Months Ended December 29, 2001
                                                        -----------------------------------------------------------------------
                                                         Agrilink      Guarantor     Non-Guarantor   Eliminating
                                                        Foods, Inc.   Subsidiaries   Subsidiaries      Entries     Consolidated
                                                        -----------   ------------   -------------   -----------   ------------
<S>                                                      <C>            <C>             <C>            <C>          <C>
(DOLLARS IN THOUSANDS)

Net sales                                                $ 286,411      $ 3,775         $ 5,255        $(5,255)     $ 290,186
Cost of sales                                             (215,802)      (2,591)         (4,912)         4,912       (218,393)
                                                         ---------      -------         -------        -------      ---------
Gross profit                                                70,609        1,184             343           (343)        71,793
Other (expense)/income                                     (20,366)      18,794             192           (192)        (1,572)
Selling, administrative, and general expenses              (29,762)      (1,054)              0              0        (30,816)
Income from joint venture                                      950            0               0              0            950
                                                         ---------      -------         -------        -------      ---------
Operating income/(loss) before dividing with Pro-Fac        21,431       18,924             535           (535)        40,355
Interest (expense)/income                                  (18,891)       2,652               0              0        (16,239)
                                                         ---------      -------         -------        -------      ---------
Pretax income/(loss) before dividing with Pro-Fac            2,540       21,576             535           (535)        24,116
Pro-Fac share of income                                    (11,318)           0               0              0        (11,318)
                                                         ---------      -------         -------        -------      ---------
Pretax (loss)/income before discontinued operations         (8,778)      21,576             535           (535)        12,798
Tax benefit/(provision)                                      2,159       (7,666)           (126)             0         (5,633)
                                                         ---------      -------         -------        -------      ---------
Net (loss)/income before discontinued operations            (6,619)      13,910             409           (535)         7,165
Discontinued operations (net of a tax benefit of $662)        (827)           0               0              0           (827)
                                                         ---------      -------         -------        -------      ---------
Net (loss)/income                                        $  (7,446)     $13,910         $   409        $  (535)     $   6,338
                                                         =========      =======         =======        =======      =========
</TABLE>

<TABLE>
<CAPTION>
                                                                                   PREDECESSOR
                                                                            STATEMENT OF OPERATIONS
                                                                          Six Months Ended December 29, 2001
                                                        -----------------------------------------------------------------------
                                                         Agrilink      Guarantor     Non-Guarantor   Eliminating
                                                        Foods, Inc.   Subsidiaries   Subsidiaries      Entries     Consolidated
                                                        -----------   ------------   -------------   -----------   ------------
<S>                                                      <C>            <C>             <C>            <C>          <C>
(DOLLARS IN THOUSANDS)

Net sales                                                $ 525,754      $  8,020        $ 7,821        $(7,821)     $ 533,774
Cost of sales                                             (409,882)       (5,478)        (7,631)         7,631       (415,360)
                                                         ---------      --------        -------        -------      ---------
Gross profit                                               115,872         2,542            190           (190)       118,414
Other (expense)/income                                     (32,112)       31,962            214           (214)          (150)
Selling, administrative, and general expenses              (61,627)       (1,781)             0              0        (63,408)
Income from joint venture                                    1,198             0              0              0          1,198
                                                         ---------      --------        -------        -------      ---------
Operating income/(loss) before dividing with Pro-Fac        23,331        32,723            404           (404)        56,054
Interest (expense)/income                                  (40,310)        5,284              0              0        (35,026)
                                                         ---------      --------        -------        -------      ---------
Pretax (loss)/income before dividing with Pro-Fac          (16,979)       38,007            404           (404)        21,028
Pro-Fac share of loss                                       (9,062)            0              0              0         (9,062)
                                                         ---------      --------        -------        -------      ---------
Pretax (loss)/income before discontinued operations        (26,041)       38,007            404           (404)        11,966
Tax benefit/(provision)                                      8,490       (13,503)          (253)             0         (5,266)
                                                         ---------      --------        -------        -------      ---------
Net (loss)/income before discontinued operations           (17,551)       24,504            151           (404)         6,700
Discontinued operations (net of a tax benefit
   of $1,289)                                               (1,624)            0              0              0         (1,624)
                                                         ---------      --------        -------        -------      ---------
Net (loss)/income                                        $ (19,175)     $ 24,504        $   151        $  (404)     $   5,076
                                                         =========      ========        =======        =======      =========
</TABLE>


                                       18




<PAGE>

<TABLE>
<CAPTION>
                                                                                   PREDECESSOR
                                                                                  BALANCE SHEET
                                                                                  June 29, 2002
                                                      ---------------------------------------------------------------------
                                                       Agrilink     Subsidiary   Non-Guarantor   Eliminating
                                                      Foods, Inc.   Guarantors    Subsidiaries     Entries     Consolidated
                                                      -----------   ----------   -------------   -----------   ------------
<S>                                                    <C>           <C>            <C>           <C>            <C>
(DOLLARS IN THOUSANDS)

ASSETS
Current assets:
   Cash and cash equivalents                           $ 14,243      $    121       $  322        $       0      $ 14,686
   Accounts receivable, net                              73,055         2,945            0                0        76,000
   Inventories -
      Finished goods                                    264,411           223          136                0       264,770
      Raw materials and supplies                         26,193           623          159                0        26,975
                                                       --------      --------       ------        ---------      --------
         Total inventories                              290,604           846          295                0       291,745

   Other current assets                                  64,585          (158)         257                0        64,684
                                                       --------      --------       ------        ---------      --------

         Total current assets                           442,487         3,754          874                0       447,115

Property, plant and equipment, net                      278,510         3,883        3,441                0       285,834
Investment in subsidiaries                              163,093             0            0         (163,093)            0
Goodwill and other intangible assets, net                12,406        55,109            0                0        67,515
Other assets                                             57,031       103,655            0         (103,409)       57,277
                                                       --------      --------       ------        ---------      --------

         Total assets                                  $953,527      $166,401       $4,315        $(266,502)     $857,741
                                                       ========      ========       ======        =========      ========

LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:

   Current portion of long-term debt                   $ 14,916      $      0       $    0        $       0      $ 14,916
   Accounts payable                                      70,225           836          137                0        71,198
   Accrued interest                                       6,255             0            0                0         6,255
   Intercompany loans                                      (115)          275         (160)               0             0
   Other current liabilities                             43,319         5,712          823                0        49,854
                                                       --------      --------       ------        ---------      --------
         Total current liabilities                      134,600         6,823          800                0       142,223

Long-term debt                                          623,057             0            0                0       623,057
Other non-current liabilities                           134,855             0            0         (103,409)       31,446
                                                       --------      --------       ------        ---------      --------

         Total liabilities                              892,512         6,823          800         (103,409)      796,726

Shareholder's equity                                     61,015       159,578        3,515         (163,093)       61,015
                                                       --------      --------       ------        ---------      --------

         Total liabilities and shareholder's equity    $953,527      $166,401       $4,315        $(266,502)     $857,741
                                                       ========      ========       ======        =========      ========
</TABLE>


                                       19




<PAGE>

<TABLE>
<CAPTION>
                                                                                      PREDECESSOR
                                                                                STATEMENT OF CASH FLOWS
                                                                           Six Months Ended December 29, 2001
                                                        -----------------------------------------------------------------------
                                                         Agrilink       Guarantor    Non-Guarantor   Eliminating
                                                        Foods, Inc.   Subsidiaries    Subsidiaries    Entries      Consolidated
                                                        -----------   ------------   -------------   -----------   ------------
<S>                                                      <C>            <C>              <C>            <C>         <C>
(DOLLARS IN THOUSANDS)

Cash Flows From Operating Activities:
   Net (loss)/income                                     $ (19,175)     $ 24,504         $151           $(404)      $   5,076
   Adjustments to reconcile net (loss)/income to net
      cash (used in)/provided by operating activities -
         Depreciation                                       14,952           272          152               0          15,376
         Amortization of certain intangible assets             217           375            0               0             592
         Amortization of debt issue costs, amendment
            costs, debt discounts and premiums, and
            interest in-kind                                 3,224             0            0               0           3,224
         Equity in undistributed earnings of joint venture  (1,099)            0            0               0          (1,099)
         Change in working capital                        (101,860)      (25,015)          25             404        (126,446)
                                                         ---------      --------         ----           -----       ---------
Net cash (used in)/provided by operating activities       (103,741)          136          328               0        (103,277)

Cash Flows From Investing Activities:
   Purchase of property, plant, and equipment               (7,351)            0          (12)              0          (7,363)
   Proceeds from disposals                                      36             0            0               0              36
   Advances to joint venture                                (3,863)            0            0               0          (3,863)
   Proceeds from investment in CoBank                        2,665             0            0               0           2,665
                                                         ---------      --------         ----           -----       ---------
Net cash used in investing activities                       (8,513)            0          (12)              0          (8,525)

Cash Flows From Financing Activities:
   Net proceeds from old revolving credit facility         114,800             0            0               0         114,800
   Payments on long-term debt                               (3,047)            0            0               0          (3,047)
   Cash paid for debt amendments                            (1,694)            0            0               0          (1,694)
                                                         ---------      --------         ----           -----       ---------
Net cash provided by financing activities                  110,059             0            0               0         110,059

Net change in cash and cash equivalents                     (2,195)          136          316               0          (1,743)

Cash and cash equivalents at beginning of period             7,624            21           11               0           7,656
                                                         ---------      --------         ----           -----       ---------
Cash and cash equivalents at end of period               $   5,429      $    157         $327           $   0       $   5,913
                                                         =========      ========         ====           =====       =========
</TABLE>


                                       20




<PAGE>

NOTE 10. OTHER MATTERS

RESTRUCTURING:  On June 23, 2000,  the Company sold its pickle  business to Dean
Pickle and Specialty Product Company. As part of the transaction, Agrilink Foods
agreed to contract pack Nalley and Farman's  pickle products for a period of two
years,  ending June 2002.  In  anticipation  of the  completion  of this co-pack
contract, the Company initiated  restructuring  activities for approximately 140
employees in its facility located in Tacoma, Washington during the first quarter
of fiscal 2002. The total restructuring  charge amounted to $1.1 million and was
primarily  comprised  of  employee  termination  benefits.  This amount has been
liquidated as of December 28, 2002.

In addition,  on October 12, 2001, the Company  announced a further reduction of
approximately   7  percent  of  its  nationwide   workforce,   for  a  total  of
approximately  300 positions.  The  reductions  were part of an ongoing focus on
low-cost  operations  and  included  both  salaried  and  hourly  positions.  In
conjunction with the reductions,  the Company recorded a charge against earnings
of  approximately  $1.6 million in the second quarter of fiscal 2002,  primarily
consisting of employee termination benefits.  This amount has been liquidated as
of December 28, 2002.

GAIN FROM PENSION CURTAILMENT:  In September 2001, the Company made the decision
to freeze benefits provided under its Master Salaried Retirement Plan. Under the
provisions of SFAS No. 88,  "Accounting  for  Settlements  and  Curtailments  of
Defined  Benefit  Pension  Plans and for  Termination  Benefits,"  these benefit
changes resulted in the recognition of a $2.5 million net curtailment gain.

LEGAL  PROCEEDINGS:  On September  25, 2001,  in the circuit  court of Multnomah
County,  Oregon, Blue Line Farms commenced a class action suit ("Blue Line Farms
litigation") against the Company,  Pro-Fac  Cooperative,  Inc., Mr. Mike Shelby,
and "Does" 1-50, representing  directors,  officers, and agents of the corporate
defendants,  alleging  various claims related to the operation of PF Acquisition
II, Inc., a former subsidiary of Pro-Fac that conducted  business under the name
AgriFrozen  Foods  ("AgriFrozen").  The  complaint was  subsequently  amended to
eliminate  "Does" 1- 50 as  parties.  The  relief  sought  included a demand for
damages of $50.0 million. On December 23, 2002, Pro-Fac, Agrilink Foods, and the
other  defendants  reached  an  agreement  in  principle  as to the  terms  of a
settlement of the Blue Line Farms litigation, as well as of related claims under
Oregon's grower lien statute pending in the United States  Bankruptcy  Court for
the District of Oregon,  known as the Seifer Trust litigation.  The Seifer Trust
litigation  also named Pro-Fac and Agrilink  among its named  defendants.  Final
settlement is  conditioned on the  occurrence of certain  conditions  precedent,
including  approval of the settlement by the Multnomah County Circuit Court, the
entry of final judgment by both the Multnomah County Court and the United States
Bankruptcy  Court for the District of Oregon,  and approval of the settlement by
the class.  In conjunction  with the agreement in principle  reached on December
23, 2002  and  in  anticipation  of  a  Final Settlement  of the Blue Line Farms
litigation and Seifer Trust litigation, Agrilink  Foods has recorded a liability
in purchase accounting for  approximately $1.3 million  for this pre-acquisition
contingency.

The Unit Purchase  Agreement for the Transaction  contains  specific  provisions
concerning the Blue Line Farms matter and other AgriFrozen related litigation of
Agrilink Foods.  These provisions  address the sharing of defense costs, as well
as judgment and settlement  costs,  between  Agrilink  Foods and Pro-Fac.  On an
annual basis,  Agrilink  Foods has agreed to bear  responsibility  for the first
$300,000  of  defense  costs.  In  addition,   Agrilink  Foods  agreed  to  bear
responsibility  for  one-half  of defense  costs in excess of  $300,000  and for
one-half of judgment and settlement  costs,  subject to an aggregate cap of $3.0
million  after which  Pro-Fac is  responsible  for all costs.  These  provisions
regarding  a  sharing  of  costs  apply  specifically  to the  Blue  Line  Farms
litigation  and the Seifer Trust  litigation.  These  provisions do not apply to
other AgriFrozen  related  litigation,  the responsibility for which is entirely
with Pro-Fac.

COMMITMENTS:  Agrilink Foods entered into an agreement to provide a guarantee in
September 1995 on behalf of the City of Montezuma to renovate a sewage treatment
plant operated in Montezuma,  Georgia.  Agrilink Foods issued a guarantee of the
loan in an original  amount of  approximately  $2.3 million plus  interest.  The
guarantee  expires  in 2015  and  requires  payment  upon  the  occurrence  of a
shortfall in third-party  revenue from the  utilization of the sewage  treatment
plant. In the event of such  shortfall,  Agrilink Foods would be required to pay
the  remainder of the loan for the City of  Montezuma.  As of December 28, 2002,
the outstanding loan amount was $1.7 million.

NOTE 11. SUBSEQUENT EVENTS

NAME CHANGE:  On January 29, 2003, the Company announced that it is changing its
name from Agrilink Foods,  Inc. to Birds Eye Foods,  Inc. The change will become
effective on February 10, 2003 through the amendment of the  Company's  articles
of incorporation. Only the Company's name will change. There is no impact to the
organization's structure or ownership. In addition, Agrilink Holdings, Inc. will
change its name to Birds Eye Holdings, Inc. concurrently.

RESTRUCTURING:  On February  7, 2003,  the  Company  announced  that it would be
closing  six  vegetable  processing  facilities  and consolidating production to
create   more   efficient  facilities  over  the  next  4  to  15  months.  This
announcement  is  in  furtherance  of  the final formulation of the exit plan as
discussed  in  NOTE  2  "The  Transaction"  to the  "Notes  to the  Consolidated
Financial  Statements".  The facilities  impacted  include those in Barker,  New
York; Bridgeville,  Delaware; Green Bay, Wisconsin; Oxnard, California;  Uvalde,
Texas and the fresh production  operation at Montezuma,  Georgia.  Subsequent to
closure,  the Company intends to actively market these  properties for sale. The
closings will initially result in the elimination of approximately 260 full time
production  associates. Management's  preliminary   estimate  of  the  costs  to
exit these operations is approximately


                                       21




<PAGE>

$10.0 million.  Such costs primarily  represent employee  termination  benefits,
facility  closure  costs,  and  lease  and  other  contract  cancellation  fees.
Management anticipates the finalization of these estimates in the third quarter.
Such amounts will be accrued for in purchase  accounting in accordance with EITF
95-3.

GREAT  LAKES KRAUT  COMPANY,  LLC:  Agrilink  Foods owns a 50% interest in Great
Lakes  Kraut  Company,  LLC ("GLK") and  has reached  an agreement with Flanagan
Brothers  Incorporated  ("Flanagan  Brothers")  to  effect  a  transfer  of  the
operating  business  of  GLK  to  Flanagan Brothers, the other 50% owner of GLK,
pursuant  to  certain  "buy-sell"  provisions  of  the limited liability company
agreement of GLK (the "GLK Transaction"). In the GLK Transaction, a newly-formed
subsidiary  of  Agrilink Foods ("Newco") will invest $11.1 million in GLK, which
will  be  used  to  reduce  the debt of GLK, Flanagan Brothers will exchange its
interest  in GLK in  return for a transfer of all of the operating assets of GLK
to it and will assume substantially all of the remaining liabilities relating to
the  business  of  GLK. At  the closing, GLK  will repay  to Agrilink  Foods the
outstanding  balance  of  certain  working capital loans made to GLK by Agrilink
(with  a  principal balance of  $5.4 million as of December 28, 2002). After the
GLK  Transaction,  Agrilink  Foods  and  Newco  will own 100% of GLK, which will
continue to  own  the subordinated promissory note of Agrilink Foods and certain
operating  assets  or  subsidiaries  of  Agrilink  Foods  to  be  transferred in
connection with the GLK Transaction. The GLK Transaction is expected to close on
March 3, 2003. If the GLK Transaction closes,  Agrilink  Foods  expects that the
consolidated   outstanding   debt   of   Agrilink  Foods  would  be  reduced  by
approximately $29 million.

               CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

From time to time,  the  Company  makes  oral and  written  statements  that may
constitute  "forward-looking  statements"  as defined in the Private  Securities
Litigation  Reform Act of 1995 (the  "Act") or by the  Securities  and  Exchange
Commission ("SEC") in its rules, regulations,  and releases. The Company desires
to take advantage of the "safe harbor" provisions in the Act for forward-looking
statements  made  from  time  to  time,  including,  but  not  limited  to,  the
forward-looking information contained in Management's Discussion and Analysis of
Financial  Condition and Results of Operations and other statements made in this
Form 10-Q Equivalent and in other filings with the SEC.

The Company cautions readers that any such forward-looking statements made by or
on behalf of the  Company are based on  management's  current  expectations  and
beliefs but are not  guarantees  of future  performance.  Actual  results  could
differ  materially  from  those  expressed  or  implied  in the  forward-looking
statements. Among the factors that could impact the Company include:

o    the  impact  of  strong   competition  in  the  food  industry,   including
     competitive pricing;

o    the impact of changes in consumer demand;

o    the impact of weather on the volume and quality of raw product;

o    the  inherent  risks  in  the  marketplace   associated  with  new  product
     introductions, including uncertainties about trade and consumer acceptance;

o    the  continuation  of  the  Company's  success  in  integrating  operations
     (including the  realization of anticipated  synergies in operations and the
     timing of any such  synergies),  and the  availability  of acquisition  and
     alliance opportunities;

o    the Company's  ability to achieve gains in productivity and improvements in
     capacity utilization;

o    the Company's ability to service debt;

o    interest rate fluctuations; and

o    effectiveness of marketing and shifts in market demand.

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

The purpose of this discussion is to outline the significant reasons for changes
in the Unaudited  Consolidated Statement of Operations in the second quarter and
first six months of fiscal 2003 versus such periods in fiscal 2002.

The unaudited  consolidated financial statements include the results of Agrilink
Foods, Inc. ("Agrilink Foods" or the "Company").  On August 19, 2002, a majority
share of Agrilink Foods was indirectly acquired by Vestar/Agrilink  Holdings LLC
and  its  affiliates  (see  NOTE  2 to  the  "Notes  to  Consolidated  Financial
Statements").  In accordance  with the  guidelines  for  accounting for business
combinations,  the investment by Vestar/Agrilink Holdings LLC and its affiliates
plus  related  purchase  accounting  adjustments  have  been  "pushed  down" and


                                       22




<PAGE>

recorded in Agrilink Foods'  financial  statements for the period  subsequent to
August 18, 2002,  resulting  in a new basis of  accounting  for the  "successor"
period.  Information for the "predecessor"  period prior to the transaction date
is presented on the Company's historical basis of accounting.

In order to provide a meaningful  basis of comparing  the  Company's  results of
operations,  the results of operations  for the  "predecessor"  period (June 30,
2002 to August 18, 2002) have been combined  with the results of operations  for
the  "successor"  period (August 19, 2002 to December 28, 2002).  These combined
Company results have been compared to the comparable period in fiscal 2002.

Agrilink Foods has four primary product lines:  vegetables,  fruits,  snacks and
canned  meals.  The majority of each of the product  lines' net sales are within
the United States. In addition,  the Company's operating  facilities,  excluding
one in Mexico, are within the United States.

The  vegetable  product  line  consists of canned and frozen  vegetables,  chili
beans, and various other products. Branded products within the vegetable product
line include Birds Eye, Birds Eye Voila!,  Birds Eye Simply Grillin',  Birds Eye
Hearty Spoonfuls,  Freshlike,  Veg-All,  McKenzies,  and Brooks Chili Beans. The
fruit product line consists of canned and frozen fruits including fruit fillings
and toppings.  Branded  products within the fruit category  include Comstock and
Wilderness. The snack product line consists of potato chips and other corn-based
snack items.  Branded  products within the snack category  include Tim's Cascade
Chips,   Snyder  of  Berlin,   Husman,  La  Restaurante,   Erin's,   and  Flavor
Destinations. The canned meal product line includes canned meat products such as
chilies,  stews, soups, and various other ready-to-eat  prepared meals.  Branded
products  within the canned meal category  include  Nalley.  The Company's other
product line primarily represents salad dressings.  Branded products within this
category include Bernstein's and Nalley.

Reclassifications have been made to the segment presentation below for the prior
year to  reflect an  allocation  of fixed  costs  associated  with  discontinued
operations. Management is currently focusing efforts on eliminating such costs.

The following  tables  illustrate  the results of operations by product line for
the three- and six-month periods ended December 28, 2002 and December 29, 2001:

NET SALES
(DOLLARS IN MILLIONS)

<TABLE>
<CAPTION>
                      Three Months Ended                 Six Months Ended
               -------------------------------   -------------------------------
                December 28,     December 29,     December 28,     December 29,
                    2002             2001             2002             2001
               --------------   --------------   --------------   --------------
                         % of             % of             % of             % of
                  $     Total      $     Total      $     Total      $     Total
               ------   -----   ------   -----   ------   -----   ------   -----
<S>            <C>      <C>     <C>      <C>     <C>      <C>     <C>      <C>
Vegetables     $199.8    72.8%  $210.7    72.6%  $342.7    71.0%  $387.2    72.5%
Fruits           35.4    12.9     39.2    13.5     61.2    12.7     64.1    12.0
Snacks           19.4     7.1     19.5     6.7     39.5     8.2     39.7     7.4
Canned Meals     12.4     4.5     11.9     4.1     23.2     4.8     24.3     4.6
Other             7.4     2.7      8.9     3.1     15.9     3.3     18.5     3.5
               ------   -----   ------   -----   ------   -----   ------   -----
   Total       $274.4   100.0%  $290.2   100.0%  $482.5   100.0%  $533.8   100.0%
               ======   =====   ======   =====   ======   =====   ======   =====
</TABLE>

OPERATING INCOME(1)
(DOLLARS IN MILLIONS)

                     Three Months Ended               Six Months Ended
               -----------------------------   -----------------------------
                December 28,    December 29,    December 28,    December 29,
                    2002            2001            2002            2001
               -------------   -------------   -------------   -------------
                        % of            % of            % of            % of
                 $     Total     $     Total     $     Total     $     Total
               -----   -----   -----   -----   -----   -----   -----   -----

Vegetables     $20.3    54.6%  $27.2    64.9%  $26.7    48.7%  $32.0    56.9%
Fruits          12.0    32.2     9.4    22.4    18.6    34.0    13.7    24.4
Snacks           2.6     7.0     2.5     6.0     5.6    10.2     5.2     9.3
Canned Meals     1.4     3.8     2.1     5.0     2.3     4.2     3.9     6.9
Other            0.9     2.4     0.7     1.7     1.6     2.9     1.4     2.5
               -----   -----   -----   -----   -----   -----   -----   -----
   Total       $37.2   100.0%  $41.9   100.0%  $54.8   100.0%  $56.2   100.0%
               =====   =====   =====   =====   =====   =====   =====   =====


(1)  Excludes the gain from pension curtailment and restructuring  charges.  See
     NOTE 10 to the "Notes to Consolidated Financial Statements."



                                       23




<PAGE>

EBITDA(1), (2)
(DOLLARS IN MILLIONS)

<TABLE>
<CAPTION>
                                   Three Months Ended               Six Months Ended
                             -----------------------------   -----------------------------
                              December 28,    December 29,    December 28,    December 29,
                                  2002            2001            2002            2001
                             -------------   -------------   -------------   -------------
                                      % of            % of            % of            % of
                               $     Total     $     Total     $     Total     $     Total
                             -----   -----   -----   -----   -----   -----   -----   -----
<S>                          <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Vegetables                   $26.2    61.8%  $33.0    67.8%  $38.7    57.6%  $43.5    62.2%
Fruits                        12.7    29.9    10.3    21.1    19.9    29.6    15.4    22.0
Snacks                         3.0     7.1     3.1     6.4     6.4     9.5     6.3     9.0
Canned Meals                   1.6     3.8     2.3     4.7     2.8     4.2     4.3     6.2
Other                          1.0     2.4     0.9     1.8     2.0     3.0     1.9     2.7
                             -----   -----   -----   -----   -----   -----   -----   -----
   Continuing segments        44.5   105.0    49.6   101.8    69.8   103.9    71.4   102.1
Discontinued operations(3)    (2.1)   (5.0)   (0.9)   (1.8)   (2.6)   (3.9)   (1.5)   (2.1)
                             -----   -----   -----   -----   -----   -----   -----   -----
   Total                     $42.4   100.0%  $48.7   100.0%  $67.2   100.0%  $69.9   100.0%
                             =====   =====   =====   =====   =====   =====   =====   =====
</TABLE>

(1)  Earnings before interest, taxes, depreciation,  and amortization ("EBITDA")
     is defined as the sum of pretax  income before  dividing with Pro-Fac,  and
     before  interest  expense,  depreciation  and  amortization of goodwill and
     other intangibles.

     EBITDA  should not be considered  as an  alternative  to net income or cash
     flows from operations or any other generally accepted accounting principles
     measure of  performance  or as a measure of  liquidity.  EBITDA is included
     herein because the Company  believes  EBITDA is a financial  indicator of a
     company's  ability to service debt.  EBITDA as calculated by Agrilink Foods
     may not be comparable to calculations as presented by other companies.

(2)  Excludes gain from pension curtailment and restructuring  charges. See NOTE
     10 to the "Notes to Consolidated Financial Statements."

(3)  Represents  the operating  results of operations to be sold.  See NOTE 3 to
     the "Notes to Consolidated Financial Statements."

      CHANGES FROM SECOND QUARTER FISCAL 2002 TO SECOND QUARTER FISCAL 2003

NET SALES: Net sales from continuing  operations for the fiscal 2003 period were
$274.4 million, a decrease of $15.8 million,  or 5.4 percent, as compared to net
sales of $290.2  million in the fiscal 2002 period.  This  decrease is primarily
due to a decline in  vegetable  net sales of $10.9  million  resulting  from the
expiration  of two  co-pack  contracts  and a decline in  non-branded  vegetable
sales. See "Segment Review" below for further detail.

GROSS  PROFIT:  Gross  profit in the fiscal  2003  period of $71.7  million  was
consistent  with the 2002 period,  however,  the  Company's  gross profit margin
increased  to 26.1  percent  from 24.7  percent  in the prior year  period.  The
increase in gross margin is primarily the result of savings  associated with the
headcount  reductions  described below, price increases  implemented during both
the current and prior  years,  and the  decrease in co-pack  non-branded  sales,
which  typically carry a lower gross margin.  In addition,  the Company has also
benefited from reduced  warehousing costs as a result of management  initiatives
to reduce inventory levels.  These  improvements more than offset an increase in
production costs due to lower volumes in the Company's facilities as a result of
both management's  efforts to reduce inventory levels and lower than anticipated
crop intake from unfavorable weather  conditions.  These higher production costs
are  anticipated to negatively  impact the Company's  results  through the first
quarter of fiscal 2004.

SELLING,  ADMINISTRATIVE  AND  GENERAL  EXPENSES:  Selling,  administrative  and
general  expenses  in the 2003  period  have  increased  $4.9  million  to $35.7
million,  as  compared to $30.8  million in the 2002  period.  This  increase is
primarily  the result of  marketing  efforts  associated  with the launch of the
Company's new frozen soup offering,  Birds Eye Hearty  Spoonfuls which more than
offset the savings from the headcount reductions described below.

OPERATING  INCOME:  Operating income from continuing  operations  (excluding the
restructuring  charge described below) for the 2003 period was $37.2 million,  a
decrease of $4.7 million,  or 11.2 percent,  as compared to $41.9 million in the
prior year period. This decrease is attributable to the factors discussed above.
The decrease in operating  income  within  vegetables  and canned meals was $6.9
million and $0.7  million,  respectively.  Increases in operating  income within
fruits,  snacks,  and other were $2.6 million,  $0.1 million,  and $0.2 million,
respectively.  Significant  variances  are  highlighted  below  in the  "Segment
Review."


                                       24




<PAGE>

RESTRUCTURING:  On October  12,  2001,  the Company  announced  a  reduction  of
approximately   7  percent  of  its  nationwide   workforce,   for  a  total  of
approximately  300 positions.  The  reductions  were part of an ongoing focus on
low-cost  operations  and  included  both  salaried  and  hourly  positions.  In
conjunction with the reductions,  the Company recorded a charge against earnings
of  approximately  $1.6 million in the second quarter of fiscal 2002,  primarily
consisting of employee termination benefits.  This amount has been liquidated as
of December 28, 2002.

INCOME FROM JOINT VENTURE:  This amount  represents  earnings  received from the
investment in Great Lakes Kraut LLC, a joint venture between  Agrilink Foods and
Flanagan  Brothers,  Inc.  Income  from the joint  venture  for the 2003  period
increased $0.1 million to $1.1 million,  as compared to $1.0 million in the 2002
period.

INTEREST  EXPENSE:  Interest  expense  for the 2003  period  was  $12.3  million
compared to $16.2 million in the 2002 period.  The reduction in interest expense
is due to lower debt levels  resulting  from the August 19, 2002  Transaction as
well as reduced interest rates. These reductions were offset by the amortization
of fees paid in  connection  with the new Senior  Credit  Facility  and interest
expense related to the Termination Agreement with Pro-Fac.

PRO-FAC SHARE OF INCOME:  Historically,  the Company's contractual  relationship
with Pro-Fac was defined in the marketing and  facilitation  agreement (the "Old
Marketing and  Facilitation  Agreement"),  which the Company and Pro-Fac entered
into in November 1994.  Under the Old Marketing and Facilitation  Agreement,  in
any year in which the Company had earnings on products which were processed from
crops supplied by Pro-Fac,  the Company paid to Pro-Fac, as additional patronage
income, 90 percent of such earnings,  but in no case more than 50 percent of all
pretax  earnings  of the  Company.  In years in which the  Company had losses on
Pro-Fac  products,  the Company  reduced the  commercial  market  value it would
otherwise  pay to Pro-Fac by 90 percent of such  losses,  but in no case by more
than 50 percent of all pretax  losses of the  Company.  Earnings and losses were
determined at the end of the fiscal year, but were accrued on an estimated basis
during the year. The Amended and Restated Marketing and Facilitation  Agreement,
entered into on August 19, 2002, in connection  with the  Transaction,  does not
permit  Agrilink  Foods to offset its losses  against the price paid for Pro-Fac
products or require Agrilink Foods to share its profits on Pro-Fac products with
Pro-Fac  for any period  subsequent  to the end of Agrilink  Food's  fiscal 2002
year.

TAX  PROVISION:  Provision  for income taxes in the 2003 period was $9.9 million
compared to a tax provision of $5.6 million in the 2002 period.  The variance in
the amounts recorded is attributable to the increase in earnings before tax.

NET  INCOME:  Net income for the 2003 period was $13.6  million  compared to net
income of $6.3 million in the 2002 period due to the factors noted above.

                                 SEGMENT REVIEW

A detailed  accounting of the  significant  reasons for changes in net sales and
EBITDA by product line is outlined below.  EBITDA should not be considered as an
alternative to operating  income,  net income,  or cash flows from operations or
any other generally accepted accounting  principles measure of performance or as
a measure of liquidity.  EBITDA is included herein because the Company  believes
EBITDA is a financial  indicator of a company's  ability to service debt. EBITDA
as  calculated  by  Agrilink  Foods may not be  comparable  to  calculations  as
presented by other companies.

VEGETABLES:  Vegetable net sales for the fiscal 2003 period were $199.8 million,
a decrease of $10.9  million,  or 5.2 percent,  as compared to $210.7 million in
the 2002 period. This decrease primarily was the result of the expiration of two
co-pack  contracts that  contributed $6.4 million of net sales in the prior year
period as well as the  Company's  decision  not to pursue  certain  food service
contracts in the current year due to competitive pricing pressures. In addition,
branded net sales were  reduced by $1.8  million.  While  branded net sales were
positively  impacted by improvements in the core Birds Eye product lines and the
Company's new frozen soup  offering,  Birds Eye Hearty  Spoonfuls,  such amounts
were offset by declines in Birds Eye Voila!  as a result of a continued  decline
in the home replacement skillet meal category.  Management has initiated actions
to address this decline in sales and expects improvement going forward.

The Company  tracks retail sales in many of the  categories in which it competes
using data from  Information  Resources,  Inc.  ("IRI").  IRI data are  limited,
however, as IRI does not  capture  sales at several of the  Company's  customers
including  Wal-Mart,  Costco, and others. IRI also does not track non-branded or
private  label  retail  sales by  manufacturer.  According  to IRI,  the  frozen
vegetable  category on a unit basis  declined 2.8 percent for the 12-week period
ending January 5, 2003. Including  management's  estimate of the Company's share
of the private label market,  the Company believes its overall market share on a
unit basis in the frozen  vegetable  category  (excluding  frozen soups) for the
12-week period ending January 5, 2003 was 32.3 percent  compared to 32.5 percent
for the 12-weeks ending January 6, 2002. The home


                                       25




<PAGE>

replacement  skillet meal category for the 12-week period ending January 5, 2003
declined  14  percent  on a unit  basis.  Market  share on a unit  basis for the
Company's Birds Eye Voila!  skillet meal product offering for the 12-week period
ending January 5, 2003 was 21.2 percent compared to 25.6 percent for the 12-week
period ending January 6, 2002.

EBITDA for the vegetable  segment in the 2003 period decreased $6.8 million,  or
20.6 percent,  to $26.2 million,  as compared to $33.0 million in the prior year
period.  The decrease in EBITDA is  primarily a result of  marketing  and launch
costs  associated  with the  introduction  of Birds  Eye  Hearty  Spoonfuls.  In
addition,  the Company has seen an increase in its production costs due to lower
volumes in its  production  facilities  as a result of  management's  efforts to
reduce  inventory levels and lower than anticipated crop intake from unfavorable
weather conditions.  These higher production costs are anticipated to negatively
impact the Company's results through the first quarter of fiscal 2004.

FRUIT:  Fruit net sales for the 2003  period were $35.4  million,  a decrease of
$3.8  million or 9.7 percent,  as compared to $39.2  million in the 2002 period.
This decrease is primarily  impacted by the reduced cherry crop harvested during
the calendar 2002 growing season which was drastically affected by weather.

EBITDA for the fruit segment in the 2003 period increased $2.4 million,  or 23.3
percent,  to $12.7  million,  as  compared  to $10.3  million  in the prior year
period.  The increase in EBITDA is largely the result of recent price  increases
taken on cherry items.

SNACKS:  Net sales for the snack  segment  of $19.4  million  and EBITDA of $3.0
million in the fiscal 2003 period  were  consistent  compared to the fiscal 2002
period. The results of Tim's Cascade Style Potato Chips were positively impacted
by an  expansion  into new  markets.  However,  this  improvement  was offset by
declines  at Snyder of Berlin  due to a  decline  in the snack  category  in the
regional markets in which these products compete.

CANNED  MEALS:  Net sales for the canned meals  segment were $12.4  million,  an
increase of $0.5  million,  or 4.2 percent,  as compared to $11.9 million in the
2002  period.  EBITDA for the canned meals  segment in the 2003 period  declined
$0.7  million,  to $1.6  million,  as compared to $2.3 million in the prior year
period.  The  decline in EBITDA is largely the result of  increased  promotional
spending.

OTHER:  Net sales for the other segment,  which is comprised  primarily of salad
dressings,  were $7.4 million, a decrease of $1.5 million,  or 16.9 percent,  as
compared  to $8.9  million  in the 2002  period.  The  decrease  in net sales is
primarily  attributable to the loss of a food service customer. The loss of this
customer  is not  anticipated  to have a  significant  impact  on the  Company's
profitability  as  evidenced  by the modest  increase in EBITDA for the quarter.
EBITDA for the other segment for the 2003 period increased $0.1 million, or 11.1
percent, to $1.0 million, as compared to $0.9 million in the prior period.

    CHANGES FROM FIRST SIX MONTHS FISCAL 2002 TO FIRST SIX MONTHS FISCAL 2003

NET SALES: Net sales from continuing  operations for the 2003 period were $482.5
million, a decrease of $51.3 million,  or 9.6 percent,  as compared to net sales
of $533.8  million in the 2002  period.  This  decrease  is  primarily  due to a
decline in vegetable net sales of $44.5 million resulting from the expiration of
two co-pack contracts and a decline in non-branded vegetable sales. See "Segment
Review" below for further detail.

GROSS PROFIT:  Gross profit in the 2003 period  increased $1.3 million to $119.7
million,  as compared to $118.4 million in the 2002 period.  The Company's gross
profit  margin  increased  to 24.8  percent  from 22.2 percent in the prior year
period.  The increase in gross margin is primarily the result of price increases
implemented  during both the current and prior years and the decrease in co-pack
non-branded  sales, which typically carry a lower gross margin. The Company also
benefited from reduced  warehousing costs as a result of management  initiatives
to reduce the  Company's  inventory  levels.  Gross margin was also  improved as
lower production costs realized from the Company's headcount reduction initiated
in the second  quarter of fiscal 2002 more than offset an increase in production
costs  due to lower  volumes  in the  Company's  facilities  as a result of both
management's  efforts to reduce inventory levels and lower than anticipated crop
intake from unfavorable weather conditions.

SELLING,  ADMINISTRATIVE  AND  GENERAL  EXPENSES:  Selling,  administrative  and
general  expenses  in the 2003  period  have  increased  $3.2  million  to $66.6
million,  as  compared to $63.4  million in the 2002  period.  This  increase is
primarily  the  result of  marketing  costs  associated  with the  launch of the
Company's new frozen soup offering, Birds Eye Hearty Spoonfuls.  These increases
were  partially  offset  by  savings  associated  with the  headcount  reduction
described below and selling and other general administrative reductions.

OPERATING  INCOME:  Operating income from continuing  operations  (excluding the
gain from pension curtailment and restructuring charges described below) for the
2003 period was $54.8 million,  a decrease of $1.4 million,  or 2.5 percent,  as
compared  to   $56.2  million  in  the  prior  year  period.  This  decrease  is
attributable to the factors  discussed above. The decrease in  operating  income
within  vegetables  and canned


                                       26






<PAGE>

meals were $5.3 million and $1.6 million,  respectively.  Increases in operating
income within fruits,  snacks,  and other were $4.9 million,  $0.4 million,  and
$0.2 million  respectively.  Significant  variances are highlighted below in the
"Segment Review."

RESTRUCTURING:  On June 23, 2000,  the Company sold its pickle  business to Dean
Pickle and Specialty Product Company.  As part of that sale agreement,  Agrilink
Foods agreed to contract pack Nalley and Farman's pickle products at its Tacoma,
Washington,  facility  for a period of two years  (through  June 2002).  Once it
became  evident  that Dean Pickle and  Specialty  Product  Company  would not be
extending this contract  packing  arrangement  beyond its initial two year term,
the Company  announced  restructuring  plans in the first quarter of fiscal 2002
and took a related charge to convert the Tacoma  facility to alternate uses. The
restructuring  charge was $1.1 million and was  primarily  comprised of employee
termination benefits. This amount has been liquidated as of December 28, 2002.

In addition,  on October 12, 2001, the Company  announced a further reduction of
approximately   7  percent  of  its  nationwide   workforce,   for  a  total  of
approximately  300 positions.  The  reductions  were part of an ongoing focus on
low-cost  operations  and  included  both  salaried  and  hourly  positions.  In
conjunction with the reductions,  the Company recorded a charge against earnings
of  approximately  $1.6 million in the second quarter of fiscal 2002,  primarily
consisting of employee termination benefits.  This amount has been liquidated as
of December 28, 2002.

GAIN FROM  PENSION  CURTAILMENT:  During  September  2001,  the Company made the
decision to freeze benefits provided under its Master Salaried  Retirement Plan.
Under  the  provisions  of  SFAS  No.  88,   "Accounting   for  Settlements  and
Curtailments of Defined  Benefit  Pension Plans and for  Termination  Benefits,"
these  benefit  changes  resulted  in  the  recognition  of a $2.5  million  net
curtailment gain in the fiscal 2002 period.

INCOME FROM JOINT VENTURE:  This amount  represents  earnings  received from the
investment in Great Lakes Kraut LLC, a joint venture between  Agrilink Foods and
Flanagan  Brothers,  Inc.  Income  from the joint  venture  for the 2003  period
increased $0.5 million to $1.7 million,  as compared to $1.2 million in the 2002
period.  This  improvement  is  primarily  the  result  of  pricing  initiatives
implemented during the fiscal fourth quarter of 2002.

INTEREST  EXPENSE:  Interest  expense  for the 2003  period  was  $26.4  million
compared to $35.0 million in the 2002 period.  The reduction in interest expense
is due to lower debt levels resulting from the August 19, 2002 Transaction and a
decrease in interest rates.  These reductions were offset by the amortization of
fees paid in connection with the new Senior Credit Facility and interest expense
related to the Termination Agreement with Pro-Fac.

PRO-FAC SHARE OF INCOME:  Historically,  the Company's contractual  relationship
with Pro-Fac was defined in the marketing and  facilitation  agreement (the "Old
Marketing and  Facilitation  Agreement"),  which the Company and Pro-Fac entered
into in November 1994.  Under the Old Marketing and Facilitation  Agreement,  in
any year in which the Company had earnings on products which were processed from
crops supplied by Pro-Fac,  the Company paid to Pro-Fac, as additional patronage
income, 90 percent of such earnings,  but in no case more than 50 percent of all
pretax  earnings  of the  Company.  In years in which the  Company had losses on
Pro-Fac  products,  the Company  reduced the  commercial  market  value it would
otherwise  pay to Pro-Fac by 90 percent of such  losses,  but in no case by more
than 50 percent of all pretax  losses of the  Company.  Earnings and losses were
determined at the end of the fiscal year, but were accrued on an estimated basis
during the year. The Amended and Restated Marketing and Facilitation  Agreement,
entered into on August 19, 2002, in connection  with the  Transaction,  does not
permit  Agrilink  Foods to offset its losses  against the price paid for Pro-Fac
products or require Agrilink Foods to share its profits on Pro-Fac products with
Pro-Fac  for any period  subsequent  to the end of Agrilink  Food's  fiscal 2002
year.

TAX  PROVISION:  Provision for income taxes in the 2003 period was $11.4 million
compared to a tax provision of $5.3 million in the 2002 period.  The variance in
the amounts recorded is attributable to the increase in earnings before tax.

NET INCOME:  Net income for the 2003 period was $15.1 million compared to income
of $5.1 million in the 2002 period due to the factors noted above.

                                 SEGMENT REVIEW

VEGETABLES:  Vegetable net sales for the fiscal 2003 period were $342.7 million,
a decrease of $44.5 million,  or 11.5 percent,  as compared to $387.2 million in
the 2002 period.  Net sales of the Company's  non-branded  vegetables  decreased
$29.7 million.  This decrease  primarily was the result of the expiration of two
co-pack  contracts that contributed $24.4 million of net sales in the prior year
period as well as the  Company's  decision  not to pursue  certain  food service
contracts in the current year as a result of  competitive  pricing.  Branded net
sales were reduced by $14.8 million for the six-month period ending December 28,
2002 as compared to the prior year. The Company's Birds Eye


                                       27




<PAGE>

Voila! skillet meal product offering accounted for approximately $9.0 million of
the decline as a result of a decline in the home  replacement  category  and the
impact of competitive marketing efforts. In addition,  declines in the Company's
regional  branded  product  lines were  experienced  due to various  competitive
pressures.

The Company  tracks retail sales in many of the  categories in which it competes
using data from  Information  Resources,  Inc.  ("IRI").  IRI data are  limited,
however, as IRI does not capture  sales  at several of the  Company's  customers
including  Wal-Mart,  Costco, and others. IRI also does not track non-branded or
private  label  retail  sales by  manufacturer.  According  to IRI,  the  frozen
vegetable  category on a unit basis  declined 4.0 percent for the 26-week period
ending January 5, 2003. Including  management's  estimate of the Company's share
of the private label market,  the Company believes its overall market share on a
unit  basis in the frozen  vegetable  category  for the  26-week  period  ending
January 5, 2003 was 31.7  percent  compared  to 32.4  percent  for the  26-weeks
ending  January 6, 2002.  The home  replacement  skillet  meal  category for the
26-week  period  ending  January 5, 2003  declined  16 percent on a unit  basis.
Market  share on a unit basis for the  Company's  Birds Eye Voila!  skillet meal
product  offering for the 26-week period ending January 5, 2003 was 23.3 percent
compared to 27.4 percent for the 26-week period ending January 6, 2002.

EBITDA for the vegetable  segment in the 2003 period decreased $4.8 million,  or
11.0 percent,  to $38.7 million,  as compared to $43.5 million in the prior year
period.  The  decrease  in EBITDA is  primarily a result of  marketing  expenses
associated with the launch of Birds Eye Hearty Spoonfuls.

FRUIT:  Fruit net sales for the 2003  period were $61.2  million,  a decrease of
$2.9  million or 4.5 percent,  as compared to $64.1  million in the 2002 period.
This  decrease  primarily is  associated  with the  shortfall in the cherry crop
harvested during the calendar 2002 growing season which was drastically affected
by weather.

EBITDA for the fruit segment in the 2003 period increased $4.5 million,  or 29.2
percent,  to $19.9  million,  as  compared  to $15.4  million  in the prior year
period. The increase in EBITDA is largely the result of price increases taken on
cherry items.

SNACKS: Net sales for the snack segment were $39.5 million, a slight decrease of
$0.2 million,  or 0.5 percent,  as compared to $39.7 million in the 2002 period.
EBITDA for the snack segment in the 2003 period  increased $0.1 million,  or 1.6
percent,  to $6.4 million, as compared to $6.3 million in the prior year period.
The results of Tim's Cascade Style Potato Chips were  positively  impacted by an
expansion into new markets.  However,  this improvement was affected by declines
at Snyder  of Berlin  due to a decline  in the snack  category  in the  regional
markets in which these products compete.

CANNED  MEALS:  Net sales for the canned  meals  segment were $23.2  million,  a
decrease of $1.1  million,  or 4.5 percent,  as compared to $24.3 million in the
2002  period.  EBITDA for the canned meals  segment in the 2003 period  declined
$1.5 million,  or 34.9 percent,  to $2.8 million, as compared to $4.3 million in
the prior year period.  The decline in EBITDA is largely the result of increased
promotional spending.

OTHER:  Net sales for the other segment,  which is comprised  primarily of salad
dressings,  were $15.9 million, a decrease of $2.6 million,  or 14.1 percent, as
compared  to $18.5  million in the 2002  period.  The  decrease  in net sales is
primarily  attributable to the loss of a food service customer. The loss of this
customer  is not  anticipated  to have a  significant  impact  on the  Company's
profitability as evidenced by the modest increase in EBITDA.

                         LIQUIDITY AND CAPITAL RESOURCES

The  following  discussion  highlights  the  major  variances  in the  Unaudited
Consolidated  Statement of Cash Flows for the six months ended December 28, 2002
compared to the six months ended December 29, 2001.

For  the  six months  ended December 28, 2002  net  cash  provided  by operating
activities  was  $21.2  million  as  compared  to  net  cash  used  in operating
activities of $103.3 million  for  the  six months ended December 29, 2001. This
represents  an  increase  of  $124.5 million, largely the result of a decline in
cash  used   to   fund  working  capital  needs.  Net  inventories  and  prepaid
manufacturing expense increased  $12.6 million in the current period as compared
with  an  increase  of $56.1  million  during  the  same  period last year. This
significant  reduction  is  a  result  of  management  initiatives to reduce the
Company's  inventory  levels  and  the  effects  of  a  reduced  crop in certain
commodities  during  the fall of 2002. Management  believes these crop shortages
will not have a negative effect on the Company's ability to serve its customers.
Accounts payable and other  accrued expenses  decreased  by $6.7 million  in the
current period as compared with a $72.8 million  decline  during the same period
last  year.  Approximately  $21.6  million of the prior year decline in accounts
payable and accrued liabilities related to the payment of the  remaining balance
on  a  one-time  inventory  purchase  from  AgriFrozen  Foods,  Inc.,  a  former
subsidiary of Pro-Fac. In addition, the decrease in the use of cash results from
the timing of  the liquidation of outstanding balances. Management will continue
to focus its efforts on reducing the Company's working capital needs.



                                       28




<PAGE>

Net cash used in investing activities for the 2003 period decreased $2.4 million
to $6.1  million,  as compared  to $8.5  million in the prior year  period.  The
decrease was largely the result of a net reduction in working  capital  advances
to the Company's joint venture.  Capital  expenditures were $8.0 million for the
2003 period  compared to $7.4 million in the prior year period.  The purchase of
property,  plant,  and  equipment  was for  general  operating  purposes  and is
considered adequate to maintain its facilities in proper working order.

Net cash provided by financing  activities  for the 2003 period was $8.1 million
compared to $110.1  million in the 2002 period,  representing  a $102.0  million
decline.  Much of this  decline is due to reduced  borrowing  needs  driven by a
$126.9  million  reduction in cash used in operating  and  investing  activities
during the first six months of fiscal 2003 as compared with the same period last
year. The Company also completed the Transaction with Pro-Fac Cooperative,  Inc.
and Vestar/Agrilink  Holdings LLC on August 19, 2002, resulting in a substantial
refinancing  of,  and  modification  to,  its  capital  structure.  See  further
discussion below and at NOTE 2, "The  Transaction" to the "Notes to Consolidated
Financial Statements" included herein.

SENIOR CREDIT  FACILITY:  In connection  with the  Transaction and on August 19,
2002,  Agrilink  Foods and  certain of its  subsidiaries  entered  into a senior
secured credit  facility (the "Senior Credit  Facility") in the amount of $470.0
million  with a syndicate  of banks and other  lenders  arranged  and managed by
JPMorgan Chase Bank ("JPMorgan Chase Bank"),  as  administrative  and collateral
agent.  The Senior Credit  Facility is comprised of (i) a $200.0  million senior
secured  revolving credit facility (the "Revolving  Credit Facility") and (ii) a
$270.0 million senior secured B term loan (the "Term Loan  Facility").  The Term
Loan Facility has a maturity of six years.  The Revolving  Credit Facility has a
maturity  of five years and allows up to $40.0  million to be  available  in the
form of letters of credit.

As of December 28, 2002, (i) there were no cash borrowings outstanding under the
Revolving  Credit  Facility,  (ii) there were $22.0 million in letters of credit
outstanding,  and (iii) availability under the Revolving Credit Facility,  after
taking into account the amount of borrowings and letters of credit  outstanding,
was  $178.0  million.  The  Company  believes  that the cash flow  generated  by
operations and the amounts available under the Revolving Credit Facility provide
adequate liquidity to fund working capital needs and expenditures.

The Senior Credit  Facility  bears interest at the Company's  option,  at a base
rate or LIBOR plus,  in each case,  an applicable  percentage.  The  appropriate
applicable percentage  corresponds to the Company's Consolidated Leverage Ratio,
as defined by the Senior Credit  Agreement,  and is adjusted  quarterly based on
the calculation of the Consolidated Leverage Ratio. As of December 28, 2002, the
Senior Credit Facility bears interest in the case of base rate loans at the base
rate plus (i) 1.75 percent for loans under the Revolving  Credit  Facility,  and
(ii) 2.00 percent for loans under the Term Loan Facility or in the case of LIBOR
loans at LIBOR  plus (i) 2.75  percent  for  loans  under the  Revolving  Credit
Facility  and (ii) 3.00  percent  for loans  under the Term Loan  Facility.  The
initial  unused  commitment  fee is 0.50  percent  on the daily  average  unused
commitment under the Revolving Credit Facility and varies based on the Company's
Consolidated Leverage Ratio. Based on the Company's  Consolidated Leverage Ratio
as of December 28, 2002,  management  anticipates  that  interest  rates will be
adjusted.  The applicable interest rates will be lowered as of February 16, 2003
in the case of base rate loans to the base rate plus (i) 1.25  percent for loans
under the Revolving Credit  Facility,  and (ii) 1.75 percent for loans under the
Term Loan  Facility or in the case of LIBOR loans to LIBOR plus (i) 2.25 percent
for loans under the Revolving Credit  Facility,  and (ii) 2.75 percent for loans
under the Term Loan Facility.  Additionally,  the unused  commitment fee will be
lowered  to 0.375  percent  of the daily  average  unused  commitment  under the
Revolving Credit Facility.

Commencing  December 31, 2002,  the Term Loan Facility will require  payments in
equal quarterly  installments in the amount of $675,000 until its final maturity
in August 2008 upon which the  balance  will be due.  The Term Loan  Facility is
also subject to mandatory  prepayments under various scenarios as defined in the
Senior  Credit  Agreement.  Provisions of the Senior  Credit  Agreement  require
annual  payments,  within 105 days  after the end of each  fiscal  year,  in the
amount of  "excess  cash  flow" be  utilized  to  prepay  the  Commitment  at an
applicable percentage that corresponds to the Company's leverage ratio.

The Senior Credit Facility contains customary  covenants and restrictions on the
Company's  activities,  including  but not  limited to: (i)  limitations  on the
incurrence of  indebtedness;  (ii) limitations on  sale-leaseback  transactions,
liens, investments, loans, advances, guarantees,  acquisitions, asset sales, and
certain  hedging   agreements;   and  (iii)  limitations  on  transactions  with
affiliates  and other  distributions.  The Senior Credit  Facility also contains
financial  covenants requiring the Company to maintain a maximum average debt to
EBITDA  ratio,  a maximum  average  senior debt to EBITDA  ratio,  and a minimum
EBITDA to interest  expense  ratio.  As of December 28, 2002, the Company was in
compliance with all covenants, restrictions, and requirements under the terms of
the Senior Credit Facility.

The Company's  obligations  under the Senior Credit  Facility are  guaranteed by
Holdings Inc. and certain of the Company's subsidiaries. See NOTE 9, "Subsidiary
Guarantors" to the "Notes to Consolidated Financial Statements" included herein.


                                       29




<PAGE>

CONTRACTUAL  OBLIGATIONS:  The following is a schedule of Agrilink Foods' future
obligations under contracts as of December 28, 2002.

(DOLLARS IN MILLIONS)

<TABLE>
<CAPTION>
                                                                    Payments Due Within
                                             ----------------------------------------------------------------
                                                                                              Over 5
Contractual Obligations                      1 Year   2 Years   3 Years   4 Years   5 Years    Years    Total
-----------------------                      ------   -------   -------   -------   -------   ------   ------
<S>                                           <C>      <C>       <C>       <C>        <C>     <C>      <C>
Term Loan Facility                            $ 2.7    $ 2.7     $ 2.7     $ 2.7      $2.7    $256.5   $270.0
Senior Subordinated Notes - 11 7/8 Percent      0.0      0.0       0.0       0.0       0.0     200.0    200.0
Subordinated Promissory Note                    0.0      0.0       0.0       0.0       0.0      36.6     36.6
Obligations under capital leases                1.1      0.8       0.8       0.9       0.0       0.0      3.6
Operating leases                                5.8      5.2       4.0       2.8       1.9       4.0     23.7
Termination Agreement                          10.0     10.0      10.0      10.0       4.0       0.0     44.0
Other                                           4.1      0.0       0.0       0.0       0.0       0.0      4.1
                                              -----    -----     -----     -----      ----    ------   ------
                                              $23.7    $18.7     $17.5     $16.4      $8.6    $497.1   $582.0
                                              =====    =====     =====     =====      ====    ======   ======
</TABLE>

The  Company's  Term Loan  Facility is  guaranteed  by Holdings Inc. and certain
subsidiaries.  The Company's Senior Subordinated Notes are guaranteed by Pro-Fac
and  certain  subsidiaries.  Agrilink  Foods'  Subordinated  Promissory  Note is
guaranteed by Pro-Fac.

The Senior  Credit  Facility  includes the Revolving  Credit  Facility of $200.0
million which has a maturity of five years. Up to $40.0 million of the Revolving
Credit Facility is available in the forms of letters of credit.

Agrilink  Foods  entered  into an  agreement to provide a guarantee in September
1995 on behalf of the City of  Montezuma  to renovate a sewage  treatment  plant
operated in Montezuma, Georgia. Agrilink Foods issued a guarantee of the loan in
an original amount of  approximately  $2.3 million plus interest.  The guarantee
expires in 2015 and  requires  payment  upon the  occurrence  of a shortfall  in
third-party  revenue from the utilization of the sewage  treatment plant. In the
event of such  shortfall,  Agrilink Foods would be required to pay the remainder
of the loan for the City of Montezuma.  As of December 28, 2002, the outstanding
loan amount was $1.7 million.

                          CRITICAL ACCOUNTING POLICIES

The preparation of our  consolidated  financial  statements  requires us to make
estimates and assumptions  that affect the reported  amounts.  The estimates and
assumptions  are  evaluated  on a  regular  basis  and are  based on  historical
experience  and on various  other  factors that are  believed to be  reasonable.
Estimates  and  assumptions  include,  but  are  not  limited  to:  inventories,
self-insurance  programs,  promotional  activities,  and identifiable intangible
assets, long-lived assets, and goodwill.

The following are considered our more critical estimates and assumptions used in
the  preparation  of  the  consolidated   financial  statements,   although  not
inclusive.

INVENTORIES:  Under the FIFO  method,  the cost of items  sold is based upon the
cost of the first such items produced. As a result, the last such items produced
remain  in  inventory  and the cost of these  items are used to  reflect  ending
inventory. The Company prices its inventory at the lower of cost or market value
on the first-in, first-out (FIFO) method.

A reserve is  established  for the estimated  aged  surplus,  spoiled or damaged
products,  and  discontinued  inventory items and components.  The amount of the
reserve is  determined  by  analyzing  inventory  composition,  expected  usage,
historical and projected sales information,  and other factors. Changes in sales
volume  due to  unexpected  economic  or  competitive  conditions  are among the
factors that could result in materially different amounts for this item.

SELF-INSURANCE  PROGRAMS: We record estimates for certain health and welfare and
workers'  compensation  costs that are self-insured  programs.  Should a greater
amount of claims occur  compared to what was  estimated or costs of medical care
increase beyond what was  anticipated,  reserves  recorded may not be sufficient
and additional costs could be incurred.

PROMOTIONAL ACTIVITIES:  Our promotional activities are conducted either through
the retail  trade  channel or  directly  with  consumers  and  involve  in-store
displays; feature price discounts on our products; consumer coupons; and similar
activities.  The costs of these activities are generally  recognized at the time
the  related  revenue is  recorded,  which  normally  precedes  the actual  cash
expenditure. The recognition of


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<PAGE>

these costs therefore  requires  management's  judgment  regarding the volume of
promotional  offers that will be redeemed by either the retail trade  channel or
consumer. These estimates are made using various techniques including historical
data  on  performance  of  similar  promotional  programs.  Differences  between
estimated  expense  and  actual  redemptions  are  normally   insignificant  and
recognized as a change in management  estimate in a subsequent period.  However,
the  likelihood  exists of materially  different  reported  results if different
assumptions or conditions were to prevail.

IDENTIFIABLE  INTANGIBLE ASSETS,  LONG-LIVED  ASSETS, AND GOODWILL:  The Company
assesses the carrying value of its identifiable  intangible  assets,  long-lived
assets,  and goodwill whenever events or changes in circumstances  indicate that
the carrying  amount of the  underlying  asset may not be  recoverable.  Certain
factors which may occur and indicate that an impairment exists include,  but are
not  limited  to:  significant  under  performance  relative  to  historical  or
projected future  operating  results;  significant  changes in the manner of the
Company's use of the underlying  assets;  and  significant  adverse  industry or
market trends.  In the event that the carrying value of assets are determined to
be  unrecoverable,  the Company  would record an  adjustment  to the  respective
carrying value.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company, as a result of its operating and financing  activities,  is exposed
to changes in foreign currency exchange rates,  certain  commodity  prices,  and
interest  rates,  which may  adversely  affect  its  results of  operations  and
financial  position.  In seeking to minimize the risks  and/or costs  associated
with such activities, the Company may enter into derivative contracts.

FOREIGN  CURRENCY:  The  Company  manages  its  foreign  currency  related  risk
primarily through the use of foreign currency forward  contracts.  The contracts
held by the Company are denominated in Mexican pesos.

The  Company  has entered  into  foreign  currency  forward  contracts  that are
designated  as cash flow  hedges of  exchange  rate risk  related to  forecasted
foreign  currency-denominated  intercompany  sales.  At December 28,  2002,  the
Company had cash flow hedges for the Mexican peso with  maturity  dates  ranging
from  January  2003 to April 2003.  At December  28,  2002,  approximately  $0.3
million after-tax loss is recorded in accumulated other comprehensive  income in
shareholder's  equity for this  swap.  Amounts  deferred  to  accumulated  other
comprehensive  income will be reclassified  into cost of goods sold.  During the
second quarter and first six months of fiscal 2003,  approximately  $0.1 million
and $0.1 million, respectively, was reclassified from other comprehensive income
to cost of goods sold. Hedge ineffectiveness was insignificant.

                                                Foreign Currency
                                               Forward Outstanding
                                            ------------------------
Contract amounts                            66 million Mexican pesos
Weighted average settlement exchange rate            9.865%

COMMODITY  PRICES:  The Company is exposed to  commodity  price risk  related to
forecasted purchases of corrugated (unbleached  kraftliner) in its manufacturing
process.  To mitigate this risk,  the Company  entered into a swap  agreement on
January 8, 2002  designated  as a cash flow hedge of its  forecasted  corrugated
purchases.  At  December  28,  2002,  the  Company  had  an  open  swap  hedging
approximately 65 percent of its annual corrugated requirements.  The fair value,
as of December 28, 2002, of the agreement is an after-tax gain of  approximately
$0.2 million recorded in other comprehensive  income.  During the second quarter
and first six  months of fiscal  2003  quarter,  the fair value of the hedge was
reduced by approximately $0.2 and $0.5 million, respectively, (after tax) due to
a  decline  in the  floating  rate/short  ton  for  unbleached  kraftliner.  The
termination date for the agreement is June 2003.

                                                         Swap
                                                Corrugated Outstanding
                                                (Unbleached Kraftliner)
                                            ------------------------------
Notional amount                                   12,000 short tons
Average paid rate                                   $400/short ton
Average receive rate                        Floating rate/short ton - $435
Maturities through                                    June 2003

The  Company is also  exposed to  commodity  price  risk  related to  forecasted
purchases of polyethylene in its manufacturing  process.  To mitigate this risk,
the Company entered into a swap agreement on April 11, 2002 designated as a cash
flow  hedge  of  its  forecasted   polyethylene   purchases.   The  swap  hedges
approximately 80 percent of the Company's annual polyethylene requirements.  The
fair value,  as of December 28, 2002,  of the agreement is  approximately  zero.
During the second quarter and first six months of fiscal 2003, the fair value


                                       31





<PAGE>

of the hedge was  increased  by  approximately  $0.1  million and $0.1  million,
respectively, (after tax) recorded in accumulated other comprehensive income due
to an increase in the floating rate/pound for polyethylene. The termination date
for the agreement is June 2003.

                                                       Swap
                                             Polyethylene Outstanding
                                            -------------------------
Notional amount                                  2,916,664 pounds
Average paid rate                                  $.355/pound
Average receive rate                        Floating rate $.376/pound
Maturities through                                  June 2003

INTEREST RATES:  The Company is exposed to interest rate risk primarily  through
its borrowing activities. The majority of the Company's long-term borrowings are
variable  rate  instruments.  In  September  2001,  the Company  entered into an
interest rate cap agreement with a major financial  institution which expires in
October  2003.  The Company  designates  this  interest  rate cap as a cash flow
hedge.

The Company paid a one-time fee for the cap of approximately  $0.6 million.  Due
to current  borrowing rates  available,  the fair value of the interest rate cap
was adjusted to zero as of September 28, 2002.

                                  OTHER MATTERS

The vegetable and fruit portions of the business can be positively or negatively
affected  by weather  conditions  nationally  and the  resulting  impact on crop
yields.  Favorable  weather  conditions  can  produce  high crop  yields  and an
oversupply  situation.  This  results in  depressed  selling  prices and reduced
profitability on the inventory  produced from that year's crops.  Excessive rain
or drought conditions can produce low crop yields and a shortage situation. This
typically  results in higher selling prices and increased  profitability.  While
the  national  supply  situation  controls  the  pricing,  the supply can differ
regionally because of variations in weather.

The  cherry  crop  resulting  from  the  fiscal  2002  growing  season  has been
drastically  affected by weather in the prime growing  areas in Michigan.  These
growing regions  experienced early season warm weather followed by a hard freeze
that  resulted in an estimated 66 percent  reduction in the cherry crop compared
to historic  harvest  tonnage.  As a result,  raw and frozen  cherry  costs have
significantly  increased.  To  offset  the  cherry  cost  increase,   management
implemented a price increase on cherry items effective June 2002.

For the 2002 crop season,  dry weather  conditions in the Company's New York and
Midwest  growing  regions have reduced crop intake.  While the reduction in crop
intake has negatively impacted the efficiency of various production  operations,
management  has  initiated  cost  reduction  steps  and  is  actively   pursuing
additional   cost   reduction   initiatives  in  an  attempt  to  mitigate  some
crop-related production cost increases.

                            MARKET AND INDUSTRY DATA

Unless otherwise  stated herein,  industry and market share data used throughout
this discussion was derived from industry  sources believed by the Company to be
reliable including information provided by Information Resources, Inc. Such data
was obtained or derived  from  consultants'  reports and industry  publications.
Consultants'  reports  and  industry  publications   generally  state  that  the
information  contained  therein has been  obtained  from sources  believed to be
reliable,  but that the accuracy and  completeness  of such  information  is not
guaranteed.  The Company has not  independently  verified such data and makes no
representation to its accuracy.

ITEM 4. CONTROLS AND PROCEDURES

The Company  maintains  disclosure  controls and procedures,  as defined in Rule
15d-14(c)  promulgated under the Securities  Exchange Act of 1934 (the "Exchange
Act"). Within the 90 days prior to the filing date of this report, the Company's
management,  including the Company's chief executive officer and chief financial
officer,  carried  out an  evaluation  of the  effectiveness  of the  design and
operation of the  Company's  disclosure  controls and  procedures.  Based on the
evaluation of these  disclosure  controls and  procedures,  the chief  executive
officer and chief  financial  officer  concluded  that the Company's  disclosure
controls and procedures are effective.

There were no significant changes in the Company's internal controls or in other
factors that could significantly affect these controls subsequent to the date of
their evaluation.


                                       32




<PAGE>

                                     PART II

ITEM 1. LEGAL PROCEEDINGS

Certain of our legal  proceedings are reported in our Annual Report on Form 10-K
Equivalent  for the year ended June 29,  2002 and our  Quarterly  Report on Form
10-Q  Equivalent  for the  quarter  ended  September  28,  2002,  with  material
developments  since those reports  described in NOTE 10, "Other Matters," to the
"Notes to Consolidated  Financial Statements," which information is incorporated
by reference in answer to this item.

ITEM 5. OTHER INFORMATION

Certain events have occurred subsequent to the quarter end reported in this Form
10-Q  Equivalent.  Specifically,  the  Company  has  announced  a  name  change,
restructuring  activities which  contemplate the closure of several  facilities,
and an agreement in principle with its joint venture, Great Lakes Kraut Company,
LLC. For further information see NOTE 11, "Subsequent  Events," to the "Notes to
Consolidated Financial Statements," included herein.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

          Exhibit Number                        Description
          --------------   -----------------------------------------------------
               10.1        Management Incentive Program, as amended and restated
                           (filed herewith).

     (b)  Reports on Form 8-K:

               On October 10,  2002,  the Company  filed a report on Form 8-K to
          report a change in its certifying accountant.


                                       33




<PAGE>

                                   SIGNATURES

The Company has duly caused this 10-Q  Equivalent  to be signed on its behalf by
the undersigned, thereunto duly authorized.

                                                     AGRILINK FOODS, INC.


Date: February 7, 2003                     By: /s/     Earl L. Powers
                                               ---------------------------------
                                                       EARL L. POWERS
                                                 EXECUTIVE VICE PRESIDENT,
                                                CHIEF FINANCIAL OFFICER and
                                                         SECRETARY
                                            (ON BEHALF OF THE REGISTRANT AND AS
                                                PRINCIPAL FINANCIAL OFFICER
                                             AND PRINCIPAL ACCOUNTING OFFICER)


                                       34




<PAGE>

                                  CERTIFICATION

I, Dennis M. Mullen, certify that:

1.   I have reviewed this quarterly  report on Form 10-Q  Equivalent of Agrilink
     Foods, Inc.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

          a)   designed such  disclosure  controls and procedures to ensure that
               material  information  relating to the registrant,  including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               quarterly report is being prepared;

          b)   evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and  procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and

          c)   presented  in this  quarterly  report our  conclusions  about the
               effectiveness of the disclosure  controls and procedures based on
               our evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

          a)   all  significant  deficiencies  in the  design  or  operation  of
               internal  controls which could adversely  affect the registrant's
               ability to record,  process,  summarize and report financial data
               and have  identified for the  registrant's  auditors any material
               weaknesses in internal controls; and

          b)   any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Date: February 7, 2003                              /s/ Dennis M. Mullen
                                           -------------------------------------
                                                      DENNIS M. MULLEN
                                                         Chairman,
                                           President and Chief Executive Officer
                                               (Principal Executive Officer)


                                       35




<PAGE>

                                  CERTIFICATION

I, Earl L. Powers, certify that:

1.   I have reviewed this quarterly  report on Form 10-Q  Equivalent of Agrilink
     Foods, Inc.;

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

          a)   designed such  disclosure  controls and procedures to ensure that
               material  information  relating to the registrant,  including its
               consolidated  subsidiaries,  is made known to us by others within
               those  entities,  particularly  during  the  period in which this
               quarterly report is being prepared;

          b)   evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls and  procedures as of a date within 90 days prior to the
               filing date of this quarterly report (the "Evaluation Date"); and

          c)   presented  in this  quarterly  report our  conclusions  about the
               effectiveness of the disclosure  controls and procedures based on
               our evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

          a)   all  significant  deficiencies  in the  design  or  operation  of
               internal  controls which could adversely  affect the registrant's
               ability to record,  process,  summarize and report financial data
               and have  identified for the  registrant's  auditors any material
               weaknesses in internal controls; and

          b)   any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


Date: February 7, 2003                     /s/         Earl L. Powers
                                           -------------------------------------
                                                       EARL L. POWERS
                                                 Executive Vice President,
                                                  Chief Financial Officer
                                                       and Secretary
                                               (Principal Financial Officer)


                                       36