<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM I.  FINANCIAL STATEMENTS

<TABLE>
Pro-Fac Cooperative, Inc. and Consolidated Subsidiaries - Agrilink Foods, Inc. and AgriFrozen Foods, Inc.
Consolidated Statement of Operations and Net Proceeds
(Unaudited)

(Dollars in Thousands)
<CAPTION>


                                                                                                          Quarter Ended
                                                                                               September 25,         September 26,
                                                                                                      1999                  1998

<S>                                                                                              <C>                   <C>
Net sales                                                                                        $  296,248            $  182,579
Cost of sales                                                                                      (211,454)             (135,882)
                                                                                                 ----------            ----------
Gross profit                                                                                         84,794                46,697
Selling, administrative, and general expense                                                        (63,188)              (34,883)
Income from Great Lakes Kraut Company                                                                   491                   636
Gain on sale of aseptic operations                                                                        0                64,202
                                                                                                 ----------            ----------
Operating income                                                                                     22,097                76,652
Interest expense                                                                                    (20,649)               (8,336)
                                                                                                 ----------            ----------
Income before taxes, dividends, allocation of net proceeds, and
   extraordinary item                                                                                 1,448                68,316
Tax provision                                                                                        (1,045)              (25,007)
                                                                                                 ----------            ----------
Income before dividends, allocation of net proceeds, and
   extraordinary item                                                                                   403                43,309
Extraordinary item relating to the early extinguishment of debt
   (net of income taxes)                                                                                  0               (18,024)
                                                                                                 ----------            ----------
Net income                                                                                       $      403            $   25,285
                                                                                                 ==========            ==========

Allocation of net proceeds:
   Net income                                                                                    $      403            $   25,285
   Dividends on common and preferred stock                                                           (2,103)               (1,978)
                                                                                                 ----------            ----------
   Net (deficit)/proceeds                                                                            (1,700)               23,307
   Allocation from/(to) earned surplus                                                                1,700               (21,302)
                                                                                                 ----------            ----------
   Net proceeds available to members                                                             $        0            $    2,005
                                                                                                 ==========            ==========

Net proceeds available to members:
   Estimated cash payment                                                                        $        0            $      501
   Qualified retains                                                                                      0                 1,504
                                                                                                 ----------            ----------
   Net proceeds available to members                                                             $        0            $    2,005
                                                                                                 ==========            ==========

<FN>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
Pro-Fac Cooperative, Inc. and Consolidated Subsidiaries - Agrilink Foods, Inc. and AgriFrozen Foods, Inc.
Consolidated Balance Sheet(Unaudited)
(Dollars in Thousands)                                    ASSETS
<CAPTION>
                                                                                        September 25,      June 26,    September 26,
                                                                                            1999             1999          1998
<S>                                                                                     <C>              <C>            <C>
Current assets:
   Cash and cash equivalents                                                            $   10,832       $    6,540      $   9,083
   Accounts receivable, trade, net                                                         114,017           88,249        105,374
   Accounts receivable, other                                                               14,695            9,848         23,038
   Income taxes refundable                                                                   4,079           11,295              0
   Current deferred tax asset                                                               16,160           16,160         13,336
   Inventories -
     Finished goods                                                                        410,091          284,863        349,451
     Raw materials and supplies                                                             78,195           50,057         45,829
                                                                                        ----------       ----------      ----------
           Total inventories                                                               488,286          334,920        395,280
                                                                                        ----------       ----------      ----------
   Current investment in CoBank                                                              1,602            2,403          1,330
   Prepaid manufacturing expense                                                               114           18,217             98
   Prepaid expenses and other current assets                                                22,938           27,883         17,288
                                                                                        ----------       ----------      ----------
           Total current assets                                                            672,723          515,515        564,827
Investment in CoBank                                                                        19,693           19,693         22,377
Investment in Great Lakes Kraut Company                                                      7,170            6,679          7,223
Property, plant, and equipment, net                                                        364,118          367,255        317,025
Assets held for sale, at net realizable value                                                1,172              890          2,711
Goodwill and other intangible assets, net                                                  262,059          260,733        321,022
Other assets                                                                                25,615           25,714         24,477
                                                                                        ----------       ----------     ----------
           Total assets                                                                 $1,352,550       $1,196,479     $1,259,662
                                                                                        ==========       ==========     ==========
            Liabilities and Shareholders' and Members' Capitalization
Current liabilities:
   Notes payable                                                                        $  165,600       $   54,900     $   94,000
   Current portion of obligations under capital leases                                         208              208            256
   Current portion of long-term debt                                                        16,580            8,670          1,023
   Accounts payable                                                                        124,876          107,159         96,930
   Income taxes payable                                                                          0                0         13,212
   Accrued interest                                                                         11,552            5,974            690
   Accrued employee compensation                                                            15,194           15,127         14,329
   Other accrued expenses                                                                   79,214           64,603         96,209
   Dividends payable                                                                             0               45              0
   Amounts due AgriFrozen growers                                                            1,372            1,453              0
   Amounts due members                                                                      29,032           20,045         29,946
                                                                                        ----------       ----------     ----------
           Total current liabilities                                                       443,628          278,184        346,595
Obligations under capital leases                                                               568              568            503
Long-term debt                                                                             694,761          702,322        687,087
Deferred income tax liabilities                                                             23,072           23,072         34,644
Other non-current liabilities                                                               31,886           32,222         26,623
Minority interest in AgriFrozen                                                              8,000            8,000              0
                                                                                        ----------       ----------     ----------
           Total liabilities                                                             1,201,915        1,044,368      1,095,452
                                                                                        ----------       ----------     ----------
Commitments and contingencies
Class B cumulative  redeemable  preferred stock  liquidation  preference $10 per
   share, authorized - 500,000 shares; issued and
     outstanding 26,061, 26,061, and 27,043 shares, respectively                               261              261            270
Common stock, par value $5, authorized - 5,000,000 shares
                                                  September 25,  June 26,     September 26,
                                                      1999         1999           1998
                                                  ----------    ---------    -------------
Shares issued                                      2,040,568    1,995,740      1,834,805
Shares subscribed                                    346,229      384,649        737,935
                                                   ---------    ---------      ---------
           Total subscribed and issued             2,386,797    2,380,389      2,572,740
Less subscriptions receivable in installments       (346,229)    (384,649)      (737,935)
                                                   ---------    ---------      ---------
           Total issued and outstanding            2,040,568    1,995,740      1,834,805    10,203            9,979          9,174
Shareholders' and members' capitalization:         =========    =========      =========
 Retained earnings allocated to members                                                      25,573          25,573         31,264
   Non-qualified allocation to members                                                       2,050            2,050          2,660
   Non-cumulative preferred stock, par value $25; authorized - 5,000,000 shares;
     issued and outstanding - 39,635,
       39,635, and 45,001, respectively                                                        991              991          1,125
   Class A cumulative preferred stock, liquidation preference
     $25 per share; authorized - 10,000,000 shares; issued and
       outstanding 3,694,495, 3,694,495 and 3,503,199 shares,
         respectively                                                                       92,362           92,362         87,580
   Earned surplus                                                                           19,958           21,658         32,750
   Accumulated other comprehensive income:
     Minimum pension liability adjustment                                                     (763)            (763)          (608)
     Cumulative foreign currency adjustment                                                      0                0             (5)
                                                                                        ----------       ----------     -----------
           Total shareholders' and members' capitalization                                 140,171          141,871        154,766
                                                                                        ----------       ----------     ----------
           Total liabilities and capitalization                                         $1,352,550       $1,196,479     $1,259,662
                                                                                        ==========       ==========     ==========
<FN>
The  accompanying  notes are an integral  part of these  consolidated  financial statements.
</FN>
</TABLE>

<PAGE>





<TABLE>
Pro-Fac Cooperative, Inc. and Consolidated Subsidiaries - Agrilink Foods, Inc. and AgriFrozen Foods, Inc.
Consolidated Statement of Cash Flows
(Dollars in Thousands)
<CAPTION>

                                                                                                         Quarter Ended
                                                                                              September 25,          September 26,
                                                                                                   1999                    1998
                                                                                              --------------         --------------
<S>                                                                                           <C>                    <C>
Cash flows from operating activities:
     Net income                                                                                $       403            $    25,285
     Amounts payable to members                                                                          0                   (501)
     Adjustments  to  reconcile  net  income  to  net  cash  used  in  operating activities:
       Extraordinary item relating to the early extinguishment of debt (net of income taxes)             0                 18,024
       Gain on sale of aseptic operations                                                                0                (64,202)
       Depreciation                                                                                  8,466                  4,385
       Amortization of goodwill and other intangibles                                                2,105                    926
       Amortization of debt issue costs and discount on subordinated promissory note                 1,140                    200
       Equity in undistributed earnings of Great Lakes Kraut Company                                  (491)                  (636)
       Change in assets and liabilities:
         Accounts receivable                                                                       (30,615)               (40,670)
         Inventories                                                                              (135,263)               (63,732)
         Income taxes refundable/(payable)                                                           7,216                 19,629
         Accounts payable and other accrued expenses                                                37,587                (12,796)
         Amounts due to members                                                                      8,987                  9,310
         Other assets and liabilities                                                                3,984                 (3,034)
                                                                                               -----------            -----------
Net cash used in operating activities                                                              (96,481)              (107,812)
                                                                                               -----------            -----------

Cash flows from investing activities:
     Purchase of property, plant and equipment                                                      (8,672)                (4,094)
     Proceeds from disposals                                                                           273                 83,000
     Proceeds from investment in CoBank                                                                801                    664
     Cash paid for acquisitions                                                                          0               (442,918)
                                                                                               -----------            -----------
Net cash used in investing activities                                                               (7,598)              (363,348)
                                                                                               -----------            -----------

Cash flows from financing activities:
     Proceeds from issuance of short-term debt                                                     110,700                177,000
     Repayment of short-term debt                                                                        0                (83,000)
     Proceeds from issuance of long-term debt                                                            0                677,100
     Payments on long-term debt                                                                       (450)              (276,450)
     Cash paid for debt issuance costs                                                                   0                (17,523)
     Issuances of common stock                                                                         224                     45
     Cash dividends paid                                                                            (2,103)                (1,978)
                                                                                               -----------            -----------
Net cash provided by financing activities                                                          108,371                475,194
                                                                                               -----------            -----------
Net change in cash and cash equivalents                                                              4,292                  4,034
Cash and cash equivalents at beginning of period                                                     6,540                  5,049
                                                                                               -----------            -----------
Cash and cash equivalents at end of period                                                     $    10,832            $     9,083
                                                                                               ===========            ===========


<FN>
(Table continued on next page)
</FN>
</TABLE>


<PAGE>



<TABLE>
Pro-Fac Cooperative, Inc. and Consolidated Subsidiaries - Agrilink Foods, Inc. and AgriFrozen Foods, Inc.
Consolidated Statement of Cash Flows
(Dollars in Thousands)

(Table continued from previous page)
<CAPTION>

                                                                                                          Quarter Ended
                                                                                                 September 25,        September 26,
                                                                                                        1999                1998
                                                                                                 ------------------   -------------
<S>                                                                                              <C>                  <C>
Supplemental disclosure of cash flow information:
   Acquisition of Dean Foods Vegetable Company -
     Accounts receivable                                                                                               $   24,201
     Current deferred tax asset                                                                                            30,645
     Inventories                                                                                                          195,674
     Prepaid expenses and other current assets                                                                              6,374
     Property, plant and equipment                                                                                        154,527
     Assets held for sale at net realizable value                                                                              49
     Goodwill and other intangible assets                                                                                 182,010
     Accounts payable                                                                                                     (40,865)
     Accrued employee compensation                                                                                         (8,437)
     Other accrued expenses                                                                                               (75,778)
     Long-term debt                                                                                                        (2,752)
     Subordinated promissory note                                                                                         (22,590)
     Other assets and liabilities, net                                                                                     (2,453)
                                                                                                                       ----------
                                                                                                                       $  440,605
                                                                                                                       ==========
   Acquisition of J.A. Hopay Distributing Co., Inc. -
     Accounts receivable                                                                                               $      420
     Inventories                                                                                                              153
     Property, plant and equipment                                                                                             51
     Goodwill and other intangible assets                                                                                   3,303
     Other accrued expenses                                                                                                  (251)
     Obligation for covenant not to compete                                                                                (1,363)
                                                                                                                       ----------
                                                                                                                       $    2,313
                                                                                                                       ==========


<FN>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
</FN>
</TABLE>



<PAGE>


                            PRO-FAC COOPERATIVE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.       SUMMARY OF ACCOUNTING POLICIES

Pro-Fac  Cooperative,  Inc.  ("Pro-Fac" or the "Cooperative") is an agricultural
cooperative  which  processes and markets crops grown by its members through its
wholly-owned  subsidiary  Agrilink  Foods,  Inc.  ("Agrilink")  and  through its
subsidiary PF Acquisition  II, Inc. in which it has a controlling  interest.  PF
Acquisition  II,  Inc.   conducts  business  under  the  name  AgriFrozen  Foods
("AgriFrozen").

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

The accompanying  unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting  principles and, in the opinion
of management,  include all  adjustments  (consisting  only of normal  recurring
adjustments)  necessary for a fair presentation of the results of operations for
these periods.  The following  summarizes the  significant  accounting  policies
applied in the  preparation  of the  accompanying  financial  statements.  These
financial statements should be read in conjunction with the financial statements
and accompanying notes contained in the Pro-Fac Cooperative,  Inc. Form 10-K/A-1
for the fiscal year ended June 26, 1999.

Consolidation: The consolidated financial statements include the Cooperative and
its subsidiaries,  Agrilink and AgriFrozen.  The financial  statements are 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  1999 have  been  reclassified  to
conform with the current presentation.

NOTE 2.       ACQUISITIONS

Agripac Frozen Vegetable Business: On February 23, 1999, AgriFrozen acquired the
frozen vegetable business of Agripac, Inc.  ("Agripac"),  an Oregon cooperative.
AgriFrozen was formed in January 1999 under the corporation laws of New York. On
January 4, 1999  Agripac  filed a  voluntary  petition  under  Chapter 11 of the
Bankruptcy  Code in the  United  States  Bankruptcy  Court for the  District  of
Oregon.  On January 22, 1999 Agripac,  as  debtor-in-possession,  filed a motion
with the Bankruptcy Court for authority to sell  substantially all of the assets
comprising its frozen food processing  business.  The bankruptcy court confirmed
the sale of Agripac's  frozen food  processing  assets to AgriFrozen by an order
entered on February 18, 1999.

The net  purchase  price for the assets was $80.5  million.  AgriFrozen  paid an
additional  $7.8 million in related  expenses,  including  $6.4 million to prior
member-growers  of Agripac to obtain crop delivery  agreements with  AgriFrozen,
and  transaction   expenses  and  miscellaneous  costs  totaling  $1.4  million.
AgriFrozen  expects  to  pay an  additional  $1.2  million  in  severance  costs
associated with the acquisition and the implementation of AgriFrozen's  business
plan.  In  connection  with,  and  as a  condition  to the  consummation  of the
acquisition,  AgriFrozen  entered  into a  sufficient  number  of crop  delivery
contracts with prior member growers of Agripac acceptable to AgriFrozen.

The acquisition was accounted for under the purchase method of accounting. Under
purchase  accounting  tangible and identifiable  intangible  assets acquired are
recorded at their respective fair values.

In order to consummate  the  acquisition,  AgriFrozen  (i) entered into a credit
facility with CoBank (the "CoBank Credit Facility") providing for $30 million of
term loan borrowings and up to $60 million of revolving  credit  borrowings (the
"CoBank Revolving Credit  Facility") and (ii) issued a $12 million  Subordinated
Promissory Note to CoBank.  Neither Pro-Fac nor Agrilink guaranteed the debts of
AgriFrozen or otherwise  pledged any of their respective  properties as security
for the CoBank financing. In fact, all of AgriFrozen's indebtedness is expressly
without recourse to Pro-Fac and Agrilink.


<PAGE>

Phase I  environmental  audits were  performed on the  facilities  acquired from
Agripac,  including  lease  properties.  A number  of  environmental  conditions
requiring  remedial action have been identified,  but none of them individually,
or in the  aggregate,  are expected to exceed the $4.0 million of debt reduction
for environmental remediation to be provided by CoBank.

As  part  of  its  business  strategy,  AgriFrozen  has  also  entered  into  an
administrative  services  agreement  with  Agrilink  to provide it with  certain
management consulting and administrative services.

The effects of the Agripac  acquisition are not material and  accordingly,  have
been excluded from the pro forma information presented below.

Dean Foods Vegetable Company:  On September 24, 1998, Agrilink acquired the Dean
Foods Vegetable  Company ("DFVC"),  the frozen and canned vegetable  business of
Dean Foods Company  ("Dean  Foods"),  by acquiring all the  outstanding  capital
stock of Dean  Foods  Vegetable  Company  and  Birds Eye de Mexico SA de CV (the
"DFVC Acquisition"). In connection with the DFVC Acquisition,  Agrilink sold its
aseptic  business to Dean Foods.  Agrilink paid $360 million in cash, net of the
sale of the aseptic  business,  and issued to Dean Foods a $30 million unsecured
subordinated promissory note due November 22, 2008 (the "Dean Foods Subordinated
Promissory  Note"), as consideration for the DFVC Acquisition.  Agrilink had the
right,  exercisable  until July 15, 1999,  to require  Dean Foods,  jointly with
Agrilink,  to treat the DFVC Acquisition as an asset sale for tax purposes under
Section  338(h)(10) of the Internal  Revenue  Code. On April 15, 1999,  Agrilink
paid $13.2 million to Dean Foods and exercised the election.

After the DFVC Acquisition,  DFVC was merged into Agrilink. DFVC has been one of
the leading processors of vegetables in the United States,  selling its products
under  well-known  brand names,  such as Birds Eye,  Freshlike and Veg-All,  and
various private labels.  Agrilink believes that the DFVC Acquisition strengthens
its  competitive  position by: (i)  enhancing its brand  recognition  and market
position,   (ii)  providing   opportunities   for  cost  savings  and  operating
efficiencies and (iii) increasing its product and geographic diversification.

The DFVC  Acquisition was accounted for under the purchase method of accounting.
Under purchase accounting,  tangible and identifiable intangible assets acquired
and liabilities assumed were recorded at their respective fair values.  Goodwill
associated with the DFVC Acquisition is being amortized over 30 years.

The following  unaudited pro forma financial  information  presents a summary of
consolidated results of operations of Pro-Fac and DFVC as if the acquisition had
occurred at the beginning of the 1999 fiscal year.

                                        Quarter Ended
                                     September 26, 1998

Net sales                                  $279.7
Income before extraordinary item           $ 33.2
Net income                                 $ 16.8

These  unaudited pro forma results have been prepared for  comparative  purposes
only  and  include   adjustments   for  additional   depreciation   expense  and
amortization and interest expense on acquisition debt. They do not purport to be
indicative of the results of operations  which  actually would have resulted had
the  combination  been in effect at the beginning of the 1999 fiscal year, or of
the future operations of the consolidated entities.

Concurrently  with  the  DFVC  Acquisition,  Agrilink  refinanced  its  existing
indebtedness   (the   "Refinancing"),   including  its  12  1/4  percent  Senior
Subordinated  Notes due 2005 (the "Old Notes") and its then  existing bank debt.
On August 24, 1998,  Agrilink  commenced a tender offer (the "Tender Offer") for
all the Old Notes and  consent  solicitation  to  certain  amendments  under the
indenture governing the Old Notes to eliminate substantially all the restrictive
covenants and certain events of default therein.  Substantially  all of the $160
million aggregate  principal amount of the Old Notes were tendered and purchased
by Agrilink for aggregate consideration of approximately $184 million, including
accrued  interest of $2.9 million.  Agrilink also  terminated  its then existing
bank facility  (including  seasonal  borrowings)  and repaid the $176.5 million,
excluding  interest  owed and breakage  fees  outstanding  thereunder.  Agrilink
recognized an  extraordinary  item of $18.0 million (net of income taxes) in the
first quarter of fiscal 1999 relating to this refinancing.



<PAGE>


In order to consummate the DFVC  Acquisition  and the Refinancing and to pay the
related fees and expenses, Agrilink: (i) entered into a new credit facility (the
"New Credit  Facility")  providing for $455 million of term loan borrowings (the
"Term Loan Facility") and up to $200 million of revolving credit borrowings (the
"Revolving  Credit  Facility"),  (ii)  entered into and drew upon a $200 million
bridge loan facility (the  "Subordinated  Bridge Facility") and (iii) issued the
$30 million Subordinated  Promissory Note to Dean Foods. The Subordinated Bridge
Facility was repaid during November of 1998  principally  with the proceeds from
the  issuance of Senior  Subordinated  Notes (the "New  Notes") for $200 million
aggregate  principal  amount due  November  1, 2008.  Interest  on the New Notes
accrues  at the rate of 11-7/8  percent  per  annum.  Debt  issue  costs of $5.5
million  associated with the  Subordinated  Bridge Facility were expensed during
the quarter ended December 26, 1998.

NOTE 3.       AGREEMENTS WITH AGRILINK AND AGRIFROZEN

Agrilink:  The contractual  relationship between Pro-Fac and Agrilink is defined
in the Pro-Fac  Marketing  and  Facilitation  Agreement  (the Pro-Fac  Marketing
Agreement").  Under the Pro-Fac Marketing  Agreement,  Agrilink pays Pro-Fac the
commercial  market  value  ("CMV") for all crops  supplied  by  Pro-Fac.  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 area.  Although CMV is intended to be no more than the fair
market value of the crops purchased by Agrilink, it may be more or less than the
price  Agrilink  would pay in the open  market  in the  absence  of the  Pro-Fac
Marketing Agreement.

Under the Pro-Fac Marketing Agreement, Agrilink is required to have on its board
of directors some persons who are neither members of nor affiliated with Pro-Fac
("Disinterested Directors"). The number of Disinterested Directors must at least
equal the number of directors who are members of Pro-Fac. The volume and type of
crops to be  purchased by Agrilink  under the Pro-Fac  Marketing  Agreement  are
determined  pursuant to its annual profit plan, which requires the approval of a
majority of the  Disinterested  Directors  of Agrilink.  In addition,  under the
Pro-Fac  Marketing  Agreement,  in any year in which  Agrilink  has  earnings on
products  which  were  processed  from  crops  supplied  by  Pro-Fac   ("Pro-Fac
Products"),  Agrilink pays to Pro-Fac, as additional  patronage income, up to 90
percent  of such  earnings,  but in no case more than 50  percent  of all pretax
earnings (before dividing with Pro-Fac) of Agrilink.  In years in which Agrilink
has losses on Pro-Fac Products,  Agrilink reduces the CMV it would otherwise pay
to Pro-Fac by up to 90  percent of such  losses,  but in no case by more than 50
percent of all  pretax  losses  (before  dividing  with  Pro-Fac)  of  Agrilink.
Additional  patronage  income  is paid  to  Pro-Fac  for  services  provided  to
Agrilink,  including the provision of a long term, stable crop supply, favorable
payment terms for crops and the sharing of risks in losses of certain operations
of the  business.  Earnings and losses are  determined  at the end of the fiscal
year, but are accrued on an estimated  basis during the year.  Under the Pro-Fac
Marketing Agreement,  Pro-Fac is required to reinvest at least 70 percent of the
additional patronage income in Agrilink.

AgriFrozen:  The  contractual  relationship  between  Pro-Fac and  AgriFrozen is
defined  in  a  Marketing  and  Facilitation   Agreement   between  Pro-Fac  and
AgriFrozen.  Under this  agreement,  AgriFrozen  will purchase raw products from
Pro-Fac and will process and market the finished  products.  AgriFrozen will pay
Pro-Fac CMV for the crops supplied by Pro-Fac. In addition, in any year in which
AgriFrozen  has earnings on any products  sold which were  processed  from crops
supplied by Pro-Fac,  AgriFrozen  will  distribute  such  earnings to members of
Pro-Fac.  However,  in the event  AgriFrozen  experiences  any losses on Pro-Fac
products,  AgriFrozen  will  deduct the losses from the total CMV  payable.  The
agreement permits  AgriFrozen to pay 20 percent in cash and retain 80 percent of
its earnings on Pro-Fac products as working capital.

Under the Marketing and Facilitation  Agreement between  AgriFrozen and Pro-Fac,
the board of  directors  of  AgriFrozen  is required to consist of: (i) at least
three and as many as five directors who are  individuals  who currently serve as
directors of Pro-Fac and who are chosen by Pro-Fac's  board of  directors;  (ii)
one director who is nominated by the president of Agrilink from among Agrilink's
management employees; and (iii) any number of disinterested directors who are to
be  elected  from   individuals   suggested   by  the   president  of  Agrilink.
Disinterested directors are persons who are neither employees, shareholders, nor
otherwise affiliated with Pro-Fac or AgriFrozen, but may include a disinterested
director of Agrilink.
<PAGE>


<TABLE>
NOTE 4.       DEBT

Summary of Long-Term Debt:
<CAPTION>

                                                              September 25, 1999                 June 26,       September 26,
                                                       Agrilink   AgriFrozen        Total          1999            1998
                                                     -----------  -----------    ----------     ----------     -------------

<S>                                                  <C>             <C>         <C>            <C>              <C>
Term Loan Facility                                   $  446,400      $ 30,000    $  476,400     $  476,600       $  455,000
Senior Subordinated Notes                               200,015             0       200,015        200,015               15
Subordinated Promissory Note (net of discount)           24,056         4,121        28,177         27,378           23,372
Subordinated Bridge Facility                                  0             0             0              0          200,000
Other                                                     6,749             0         6,749          6,999            9,723
                                                     ----------      --------    ----------     ----------       ----------
Total debt                                              677,220        34,121       711,341        710,992          688,110
Less current portion                                    (16,580)            0       (16,580)        (8,670)          (1,023)
                                                     ----------      --------    ----------     ----------       ----------
Total long-term debt                                 $  660,640      $ 34,121    $  694,761     $  702,322       $  687,087
                                                     ==========      ========    ==========     ==========       ==========
</TABLE>


NOTE 5.       OTHER MATTERS

On September 15, 1999, Agrilink and Seneca Foods Corporation  announced they are
in negotiation  regarding the purchase by Seneca of Agrilink's Midwest,  private
label,  canned  vegetable  business.  The  transaction  will include  reciprocal
copacking agreements. The parties are working toward finalizing the agreement by
mid November. This transaction does not include Agrilink's retail branded canned
vegetables, Veg-All and Freshlike. No significant gain or loss is anticipated on
this sale.


Restructuring:   During  the  third  quarter  of  fiscal  1999,  Agrilink  began
implementation of a corporate-wide restructuring program. The overall objectives
of the  plan  are to  reduce  expenses,  improve  productivity,  and  streamline
operations.  The total  restructuring  charge  amounted to $5.0  million and was
primarily comprised of employee  termination  benefits.  Efforts have focused on
the  consolidation  of operating  functions and the elimination of approximately
five percent of the work force.  Reductions in personnel include operational and
administrative  positions.  Through  September  25,  1999,  $1.9 million of this
charge  has been  liquidated  and the  remaining  termination  benefits  will be
liquidated during fiscal 2000.

NOTE 6:       OPERATING SEGMENTS

The  Cooperative  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
Cooperative'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,  pickles,  and  various  other  products.  Branded  products  within  the
vegetable  category  include Birds Eye,  Birds Eye Voila!,  Freshlike,  Veg-All,
McKenzies,  Brooks Chili  Beans,  Farman's  and Nalley.  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,  popcorn and other corn-based snack
items.  Branded products within the snacks category include Tim's Cascade Chips,
Snyder of Berlin, Husman, La Restaurante,  Erin's, Beehive, Pops-Rite, and Super
Pop. The canned meal product line includes canned meat products such as chilies,
stew, and soups, and various other ready-to-eat prepared meals. Branded products
within the canned meal category  include  Nalley.  Other product lines primarily
represent salad dressings.  Branded products within the "other category" include
Bernstein's and Nalley.

<PAGE>


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

<TABLE>
(Dollars in Millions)                                                                  Fiscal Years Ended
<CAPTION>
                                                                         September 25, 1999        September 26, 1998
<S>                                                                          <C>                        <C>
Net Sales:
   Vegetables                                                                $   200.3                  $   78.8
   Fruits                                                                         23.3                      25.1
   Snacks                                                                         21.4                      21.8
   Canned Meals                                                                   16.6                      14.8
   Other                                                                          14.7                      13.4
                                                                             ---------                  --------
     Continuing segments                                                         276.3                     153.9
   Businesses sold or to be sold1                                                 19.9                      28.7
                                                                             ---------                  --------
         Total                                                               $   296.2                  $  182.6
                                                                             =========                  ========

Operating income:
   Vegetables2                                                               $    15.0                  $    3.4
   Fruits                                                                          3.3                       2.2
   Snacks                                                                          1.5                       2.0
   Canned Meals                                                                    1.9                       1.4
   Other                                                                           0.9                       0.0
                                                                             ---------                  --------
     Continuing segments                                                          22.6                       9.0
   Businesses sold or to be sold1                                                 (0.5)                      3.5
                                                                             ---------                  --------
         Total                                                                    22.1                      12.5
Gain on sale of aseptic operations                                                 0.0                      64.2
                                                                             ---------                  --------
Total consolidated operating income                                               22.1                      76.7
Interest expense                                                                 (20.7)                     (8.4)
                                                                             ---------                  --------
Income before taxes, dividends, allocation of net proceeds
   and extraordinary item                                                    $     1.4                  $   68.3
                                                                             =========                  ========

<FN>
1  Includes the private label canned vegetable business to be sold in fiscal 2000 and the aseptic and peanut butter businesses sold
   in fiscal 1999.

2  The vegetable product line includes earnings derived from Agrilink's investment in Great Lakes Kraut Company of $0.5 million and
   $0.6 million in fiscal 2000 and fiscal 1999, respectively.
</FN>
</TABLE>

NOTE 7.       SUBSIDIARY GUARANTORS

Kennedy  Endeavors,   Incorporated  and  Linden  Oaks  Corporation  wholly-owned
subsidiaries of Agrilink  ("Subsidiary  Guarantors"),  and Pro-Fac, have jointly
and severally,  fully and unconditionally  guaranteed,  on a senior subordinated
basis,  the  obligations  of Agrilink with respect to Agrilink's  11-7/8 percent
Senior  Subordinated  Notes due 2008 ("New Notes") and the New Credit  Facility.
The  covenants in the New Notes and the New Credit  Facility do not restrict the
ability of the Subsidiary Guarantors to make cash distributions to Agrilink.

Separate  financial  statements and other disclosures  concerning the Subsidiary
Guarantors  are not  presented  because  management  has  determined  that  such
financial  statements and other disclosures are not material.  Accordingly,  set
forth below is certain summarized  financial  information derived from unaudited
historical financial  information for the Subsidiary  Guarantors,  on a combined
basis.



<PAGE>


(Dollars in Thousands)
                                                Quarter Ended
                                      September 25,         September 26,
                                       1999                     1998
                                     -------------          --------------

Summarized Statement of Operations:
    Net sales                           $ 18,262              $  3,331
    Gross profit                          14,384                 1,561
    Income from continuing operations     14,132                   610
    Net income                             9,186                   396

Summarized Balance Sheet:
    Current assets                      $  2,511              $  2,097
    Noncurrent assets                    215,813                 7,080
    Current liabilities                    5,583                   758

On March 2, 1999,  Agrilink  transferred  trademarks valued at $212.6 million to
Linden  Oaks  Corporation.  By  consolidating  the  trademarks  into a  separate
subsidiary,  Agrilink will be able to monitor more closely and  efficiently  the
benefits  associated  with its  trademarks.  The royalty fees that are earned by
Linden Oaks Corporation in connection with the trademarks are insignificant with
respect to the Consolidated Statement of Operations and Net Proceeds.

NOTE 8.       OTHER MATTERS

Dividends:  Subsequent to quarter end, the Cooperative  declared a cash dividend
of $.43 per share on the Class A Cumulative  Preferred  Stock.  These  dividends
approximate $1.6 million and were paid on October 29, 1999.