PART I. FINANCIAL INFORMATION

ITEM I.  FINANCIAL STATEMENTS

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

(Dollars in Thousands)


                                                                                                             Quarter Ended
                                                                                               -------------------------------------
                                                                                                  September 23,       September 25,
                                                                                                      2000                 1999
                                                                                               ----------------       --------------

<S>                                                                                              <C>                    <C>
Net sales                                                                                        $  302,489             $  296,248
Cost of sales                                                                                      (216,839)              (210,656)
                                                                                                 ----------             ----------
Gross profit                                                                                         85,650                 85,592
Selling, administrative, and general expense                                                        (64,337)               (63,986)
Income from joint venture                                                                               275                    491
                                                                                                 ----------             ----------
Operating income                                                                                     21,588                 22,097
Interest expense                                                                                    (21,526)               (20,649)
                                                                                                 ----------             ----------
Income before taxes, dividends, and allocation of net proceeds                                           62                  1,448
Tax provision                                                                                          (843)                (1,045)
                                                                                                 ----------             ----------
Net (loss)/income                                                                                $     (781)            $      403
                                                                                                 ==========             ==========

Allocation of net proceeds:
   Net (loss)/income                                                                             $     (781)            $      403
   Dividends on common and preferred stock                                                           (2,370)                (2,103)
                                                                                                 ----------             ----------
   Net deficit                                                                                       (3,151)                (1,700)
   Allocation from earned surplus                                                                     3,151                  1,700
                                                                                                 ----------             ----------
   Net proceeds available to Class A members                                                     $        0             $        0
                                                                                                 ==========             ==========

Net proceeds available to members:
   Estimated cash payment                                                                        $        0             $        0
   Qualified retains                                                                                      0                      0
                                                                                                 ----------             ----------
   Net proceeds available to members                                                             $        0             $        0
                                                                                                 ==========             ==========

Net (loss)/income                                                                                $     (781)            $      403
Other comprehensive income
   Unrealized gain on hedging activity                                                                2,304                      0
                                                                                                 ----------             ----------
Comprehensive income                                                                             $    1,523             $      403
                                                                                                 ==========             ==========

<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 Sheets
(Dollars in Thousands)                                        ASSETS
                                                                                        September 23,     June 24,    September 25,
                                                                                            2000            2000          1999
                                                                                        -------------     --------    -------------
<S>                                                <C>           <C>          <C>      <C>              <C>            <C>
Current assets:                                                                          (Unaudited)                    (Unaudited)
   Cash and cash equivalents                                                           $     6,268      $    4,994     $   10,832
   Accounts receivable, trade, net                                                         124,996         101,065        114,017
   Accounts receivable, other                                                               17,845          10,488         14,695
   Income taxes refundable                                                                   3,807           9,869          4,079
   Current deferred tax assets                                                              12,176          12,176         16,160
   Inventories                                                                             454,565         341,931        488,286
   Current investment in CoBank                                                              1,951           2,927          1,602
   Prepaid manufacturing expense                                                                 0          26,364            114
   Prepaid expenses and other current assets                                                24,955          19,688         22,938
                                                                                         ---------       ---------     ----------
           Total current assets                                                            646,563         529,502        672,723
Investment in CoBank                                                                        16,203          16,203         19,693
Investment in joint venture                                                                  7,049           6,775          7,170
Property, plant, and equipment, net                                                        342,518         348,359        364,118
Assets held for sale, at net realizable value                                                  339             339          1,172
Goodwill and other intangible assets, net                                                  256,135         258,545        262,059
Other assets                                                                                29,585          27,543         25,615
                                                                                       -----------      ----------     ----------
           Total assets                                                                $ 1,298,392      $1,187,266     $1,352,550
                                                                                       ===========      ==========     ==========

            Liabilities and Shareholders' and Members' Capitalization
Current liabilities:
   Notes payable - Agrilink                                                            $    99,000       $  49,800     $  165,600
   Current portion of debt - AgriFrozen                                                     79,426               0              0
   Current portion of obligations under capital leases                                         218             218            208
   Current portion of long-term debt                                                        16,595          16,583         16,580
   Accounts payable                                                                        100,374          89,612        119,384
   Accrued interest                                                                         16,449          11,398         11,552
   Accrued employee compensation                                                            12,975          11,216         15,194
   Other accrued expenses                                                                   64,253          66,397         79,214
   Dividends payable                                                                             0              41              0
   Amounts due Class B members                                                               1,811           2,060          6,864
   Amounts due Class A members                                                              29,913          21,696         29,032
                                                                                       -----------       ---------     ----------
           Total current liabilities                                                       421,014         269,021        443,628
Obligations under capital leases                                                               520             520            568
Long-term debt                                                                             639,280         679,205        694,761
Deferred tax liabilities                                                                    36,824          36,825         23,072
Other non-current liabilities                                                               33,758          33,852         31,886
Non-controlling interest in AgriFrozen                                                       8,000           8,000          8,000
                                                                                       -----------      ----------     ----------
           Total liabilities                                                             1,139,396       1,027,423      1,201,915
                                                                                       -----------      ----------     ----------
Commitments and contingencies
Class B cumulative  redeemable  preferred stock, liquidation  preference $10 per
   share, authorized 500,000 shares; issued and
     outstanding 23,644, 23,644, and 26,061 shares, respectively                               237             237            261
Class A common stock, par value $5, authorized 5,000,000 shares
                                                  September 23,   June 24,  September 25,
                                                      2000          2000        1999
                                                  ------------   --------  --------------
Shares issued                                      2,132,981     2,132,981    2,040,568
Shares subscribed                                    233,977       233,977      346,229
                                                   ---------     ---------    ---------
     Total subscribed and issued                   2,366,958     2,366,958    2,386,797
Less subscriptions receivable in installments       (233,977)     (233,977)    (346,229)
                                                   ---------     ---------    ---------
     Total issued and outstanding                  2,132,981     2,132,981    2,040,568     10,665          10,665         10,203
                                                   =========     =========    =========
Class B common stock, par value $5, authorized 2,000,000
   shares; issued and outstanding 723,229, 723,229, and
     0, respectively                                                                             0               0              0
Shareholders' and members' capitalization:
   Retained earnings allocated to members                                                   16,591          16,591         25,573
   Non-qualified allocation to members                                                         300             300          2,050
   Non-cumulative preferred stock, par value $25; authorized -
     5,000,000 shares; issued and outstanding 34,400,
       34,400, and 39,635, respectively                                                        860             860            991
   Class A cumulative preferred stock, liquidation preference
     $25 per share; authorized 10,000,000 shares; issued and
       outstanding 4,249,007, 4,249,007 and 3,694,495 shares,
         respectively                                                                      106,225         106,225         92,362
   Special membership interests                                                                  0               0              0
   Earned surplus                                                                           22,339          25,490         19,958
   Accumulated other comprehensive income/(loss):
     Unrealized gain on hedging activity                                                     2,304               0             0
     Minimum pension liability adjustment                                                     (525)           (525)          (763)
                                                                                       -----------      ----------     ----------
           Total shareholders' and members' capitalization                                 148,094         148,941        140,171
                                                                                       -----------      ----------     ----------
           Total liabilities and capitalization                                        $ 1,298,392      $1,187,266     $1,352,550
                                                                                       ===========      ==========     ==========
<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 Statements of Cash Flows
(Unaudited)
(Dollars in Thousands)

                                                                                                         Quarter Ended
                                                                                              -------------------------------------
                                                                                              September 23,          September 25,
                                                                                                   2000                    1999
                                                                                              --------------         --------------
<S>                                                                                            <C>                    <C>
Cash flows from operating activities:
     Net (loss)/income                                                                         $      (781)           $       403
     Adjustments to reconcile net (loss)/income to net cash used in operating activities:
       Depreciation                                                                                  8,230                  8,466
       Interest-in-kind on subordinated promissory note                                                402                    384
       Amortization of goodwill and other intangibles                                                2,514                  2,105
       Amortization of debt issue costs and discount on subordinated promissory notes                1,292                  1,140
       Equity in undistributed earnings of joint venture                                              (275)                  (491)
       Change in assets and liabilities:
         Accounts receivable                                                                       (31,288)               (30,615)
         Inventories and prepaid manufacturing expense                                             (86,270)              (135,263)
         Income taxes refundable                                                                     6,062                  7,216
         Accounts payable and other accrued expenses                                                15,387                 37,158
         Amounts due Class A members                                                                 8,217                  8,987
         Amounts due Class B members                                                                  (249)                   (81)
         Other assets and liabilities, net                                                          (4,998)                 4,110
                                                                                               -----------            -----------
Net cash used in operating activities                                                              (81,757)               (96,481)
                                                                                               -----------            -----------

Cash flows from investing activities:
     Purchase of property, plant and equipment                                                      (8,448)                (8,672)
     Proceeds from disposals                                                                         5,057                    273
     Proceeds from investment in CoBank                                                                976                    801
                                                                                               -----------            -----------
Net cash used in investing activities                                                               (2,415)                (7,598)
                                                                                               -----------            -----------

Cash flows from financing activities:
     Net proceeds from issuance of short-term debt                                                  94,000                110,700
     Payments on long-term debt                                                                     (6,184)                  (450)
     Issuances of common stock                                                                           0                    224
     Cash dividends paid                                                                            (2,370)                (2,103)
                                                                                               -----------            -----------
Net cash provided by financing activities                                                           85,446                108,371
                                                                                               -----------            -----------
Net change in cash and cash equivalents                                                              1,274                  4,292
Cash and cash equivalents at beginning of period                                                     4,994                  6,540
                                                                                               -----------            -----------
Cash and cash equivalents at end of period                                                     $     6,268            $    10,832
                                                                                               ===========            ===========

<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

The Cooperative:  Pro-Fac Cooperative, Inc. is an agricultural cooperative which
processes  and  markets  crops grown by its  members  through  its  wholly-owned
subsidiary Agrilink Foods, Inc. ("Agrilink Foods") 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").  Unless
the context otherwise  requires,  the terms "Cooperative" and "Pro-Fac" refer to
Pro-Fac Cooperative, Inc. and its subsidiaries.

Agrilink Foods 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.

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 Regulations
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 results of operations  have been included.  Operating
results for the quarter ended September 23, 2000 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 Pro-Fac Cooperative,  Inc. Form 10-K for the
fiscal year ended June 24, 2000.

Consolidation: The consolidated financial statements include the Cooperative and
its subsidiaries,  Agrilink Foods 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  2000 have  been  reclassified  to
conform with the current period presentation.


NOTE 2.       ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

On June 25, 2000, the Cooperative adopted Financial  Accounting  Standards Board
("FASB")  Statement  of  Financial   Accounting   Standards  ("SFAS")  No.  133,
"Accounting  for Derivative  Instruments and Hedging  Activities."  SFAS No. 133
requires the  recognition  of all  derivative  financial  instruments  as either
assets or liabilities in the Consolidated Balance Sheet and measurement of those
instruments at fair value.  Changes in the fair values of those derivatives will
be reported in earnings or other  comprehensive  income  depending on the use of
the derivative and whether it qualifies for hedge accounting. The accounting for
gains and losses  associated  with changes in the fair value of a derivative and
the effect on the  consolidated  financial  statements  will depend on its hedge
designation  and whether the hedge is highly  effective in achieving  offsetting
changes in the fair value or cash flow of the asset or liability  hedged.  Under
the  provisions  of SFAS No. 133, the method that will be used for assessing the
effectiveness of a hedging derivative,  as well as the measurement  approach for
determining  the  ineffective  aspects of the hedge,  must be established at the
inception of the hedge.

The  Cooperative,  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 Cooperative may enter into derivative contracts.

The adoption of SFAS No. 133 did not materially affect the Cooperative's results
of operations or financial position.

Foreign  Currency:  Agrilink  Foods  manages its foreign  currency  related risk
primarily through the use of foreign currency forward  contracts.  The contracts
held by Agrilink Foods are denominated in Mexican pesos.

Agrilink  Foods 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.  During  fiscal  2000,  the
Agrilink  Foods entered into cash flow hedges for the Mexican peso with maturity
dates  ranging  from July 2000 to April 2001.  At September  23, 2000,  the fair
value

<PAGE>
of the  open  contracts  was an  after-tax  gain of $0.2  million,  recorded  in
accumulated other comprehensive income in shareholders' equity. Amounts deferred
to accumulated  other  comprehensive  income will be  reclassified  into cost of
goods sold within the next 12 months.

During  the first  quarter  of  fiscal  2001,  approximately  $0.3  million  was
reclassified  from  other  comprehensive  income  to cost of goods  sold.  Hedge
ineffectiveness was insignificant.

Commodity  Prices:  Agrilink Foods is exposed to commodity price risk related to
forecasted  purchases of soybean oil, an ingredient in the  manufacture of salad
dressings and  mayonnaise.  To mitigate  this risk,  Agrilink  Foods  designates
soybean oil forward contracts as cash flow hedges of its forecasted  soybean oil
purchases.  At September 23, 2000, Agrilink Foods had open soybean oil contracts
hedging  approximately 70 percent of its planned soybean oil requirements during
fiscal 2001. The fair value of these open contracts was $64,800 at September 23,
2000.  During the first  quarter of fiscal  2001,  an  immaterial  loss on these
contracts  was  recorded in cost of goods  sold.  All open  contracts  mature by
January 2001.

Agrilink  Foods is  exposed  to  commodity  price  risk  related  to  forecasted
purchases of corrugated (unbleached kraftliner) in its manufacturing process. To
mitigate this risk,  Agrilink  Foods  designates a swap agreement as a cash flow
hedge of its forecasted  corrugated  purchases.  At September 23, 2000, Agrilink
Foods  had an  open  swap  hedging  approximately  80  percent  of  its  planned
corrugated  requirements.  The fair value of this  agreement  was  immaterial at
September 23, 2000. The termination date for the agreement is June 2001.

Interest  Rates:  Agrilink  Foods is exposed  to  interest  rate risk  primarily
through its  borrowing  activities.  The majority of Agrilink  Foods'  long-term
borrowings  are  variable  rate  instruments.  Agrilink  Foods  entered into two
interest rate swap contracts  under which Agrilink Foods agrees to pay an amount
equal to a specified fixed rate of interest times a notional  principal  amount,
and to  receive  in return  an  amount  equal to a  specified  variable  rate of
interest times the same notional  principal amount.  The notional amounts of the
contract are not exchanged and no other cash payments are made. The two interest
rate swap  contracts  were entered into with a major  financial  institution  in
order to minimize credit risk.

The first  interest  rate swap  contract  required  payment  of a fixed  rate of
interest  (4.96  percent)  and the  receiving  of a  variable  rate of  interest
(three-month  LIBOR of 6.77  percent as of  September  23, 2000) on $150 million
notional amount of indebtedness.  Agrilink Foods had a second interest rate swap
contract to pay a fixed rate of interest  (5.32  percent) and receive a variable
rate of interest (three-month LIBOR of 6.77 percent as of September 23, 2000) on
$100 million  notional amount of  indebtedness.  Approximately 59 percent of the
underlying debt is being hedged with these interest rate swaps.

Agrilink Foods designates these interest rate swap contacts as cash flow hedges.
At September 23, 2000,  the fair value of the contracts was an after-tax gain of
$2.1  million,   recorded  in   accumulated   other   comprehensive   income  in
shareholder's  equity.

To the  extent  that any of these  contracts  are not  considered  effective  in
offsetting the change in the value of the interest  payments  being hedged,  any
changes in fair value relating to the ineffective  portion of these contacts are
immediately  recognized  in  income.  However,  the  net  gain  or  loss  on the
ineffective  portion of these  interest  rate swap  contracts  was not  material
during the first quarter of fiscal 2001. Amounts deferred to other comprehensive
income will be  reclassified  into  interest  expense  over the life of the swap
contracts.

NOTE 3.       DISPOSITIONS

Sale of Pickle  Business:  On June 23,  2000,  Agrilink  Foods  sold its  pickle
business  based in Tacoma  Washington  to Dean  Pickle  and  Specialty  Products
Company.  This  business  included  pickle,  pepper,  and relish  products  sold
primarily  under the  Nalley  and  Farman's  brand  names.  Agrilink  Foods will
continue to contract  pack Nalley and Farman's  pickle  products for a period of
two years at the existing  Tacoma  processing  plant which  Agrilink  Foods will
operate.

In a related  transaction,  on July 21, 2000,  Agrilink Foods sold the machinery
and equipment  utilized in the production of pickles and other related  products
to Dean Pickle and Specialty  Products Company.  No significant gain or loss was
recognized on this  transaction.  The Company received  proceeds of $5.0 million
which were applied to bank loans ($3.2  million of which was applied to the term
loan  facility  and $1.8  million of which was  applied to the  Agrilink  Foods'
revolving credit facility).

Sale of Midwest Private Label Canned  Vegetable  Business:  On November 8, 1999,
Agrilink  Foods  completed the sale its Midwest  private label canned  vegetable
business to Seneca Foods,  which  included the  Arlington,  Minnesota  facility.
Agrilink Foods received

<PAGE>


proceeds  of  approximately  $42.4  million  which were  applied to  outstanding
borrowings.  In addition,  Seneca Foods issued to Agrilink  Foods a $5.0 million
unsecured  subordinated  promissory note due February 8, 2009. This  transaction
did not include the Agrilink  Foods' retail branded canned  vegetables,  Veg-All
and Freshlike. No significant gain or loss was recognized on this transaction.

NOTE 4.       AGREEMENTS WITH AGRILINK FOODS AND AGRIFROZEN

Agrilink Foods: The contractual  relationship between Pro-Fac and Agrilink Foods
is defined in the Pro-Fac  Marketing  and  Facilitation  Agreement  (the Pro-Fac
Marketing  Agreement").  Under the Pro-Fac Marketing  Agreement,  Agrilink Foods
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 Foods, it may
be more or less than the price  Agrilink  Foods  would pay in the open market in
the absence of the Pro-Fac Marketing Agreement.

Under the Pro-Fac Marketing Agreement, Agrilink Foods is required to have on its
board of directors  individuals  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's  board of
directors.  The volume and type of crops to be purchased by Agrilink  Foods from
Pro-Fac 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  Foods.  In addition,  in any year in which
Agrilink Foods has earnings on products which were processed from crops supplied
by Pro-Fac ("Pro-Fac  Products"),  Agrilink Foods 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 Foods.
In years in which Agrilink Foods has losses on Pro-Fac Products,  Agrilink Foods
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 Foods. Additional patronage income is 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 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 Foods.

Amounts  received by Pro-Fac  from  Agrilink  Foods for the three  months  ended
September 23, 2000 and September  25, 1999 include:  commercial  market value of
crops delivered, $48.4 million and $53.3 million,  respectively;  and additional
proceeds  from  profit   sharing   provisions  of,  $34,000  and  $0.7  million,
respectively.

AgriFrozen:  The  contractual  relationship  between  Pro-Fac and  AgriFrozen is
defined in a marketing and facilitation agreement between Pro-Fac and AgriFrozen
(the  "AgriFrozen  Marketing  Agreement").  Under  this  agreement,   AgriFrozen
purchases  raw  products  from  Pro-Fac and  processes  and markets 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,  AgriFrozen  will
distribute such earnings to members of Pro-Fac. However, in the event AgriFrozen
experiences  any  losses,  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.  Earnings and
losses are  determined  at the end of the  fiscal  year,  but are  accrued on an
estimated  basis  during the year.  Under the  AgriFrozen  Marketing  Agreement,
AgriFrozen  paid Pro-Fac  $7.5  million in CMV for crops  purchased in the three
months ended September 23, 2000.

Under the AgriFrozen Marketing  Agreement,  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 Foods from among Agrilink Foods' management employees; and
(iii)  any  number  of  disinterested  directors  who  are  to be  elected  from
individuals  suggested  by  the  president  of  Agrilink  Foods.   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 Foods.

<PAGE>


NOTE 5.       INVENTORIES

The major classes of inventories are as follows:

                            September 23,        June 24,        September 25,
                                2000              2000               1999
                           -------------       ----------        -------------

Finished goods               $  408,016        $  290,195          $ 440,091
Raw materials and supplies       46,549            51,736             48,195
                             ----------        ----------          ---------
                             $  454,565        $  341,931          $ 488,286
                             ==========        ==========          =========

NOTE 6.       DEBT

<TABLE>
Summary of Long-Term Debt:
(Dollars in Thousands)                                         September 23, 2000                  June 24,        September 25,
                                                  --------------------------------------------
                                                  Agrilink Foods   AgriFrozen          Total         2000               1999
                                                  ---------------- -------------    ----------   -----------       --------------

<S>                                                 <C>              <C>            <C>           <C>                <C>
Term Loan Facility                                  $  422,400       $ 30,000       $  452,400    $  458,300         $  476,400
Senior Subordinated Notes                              200,015              0          200,015       200,015            200,015
Subordinated Promissory Note (net of discount)          26,909          4,626           31,535        30,637             28,177
Other                                                    6,551         44,800           51,351         6,836              6,749
                                                    ----------       --------       ----------    ----------         ----------
Total debt                                             655,875         79,426          735,301       695,788            711,341
Less current portion                                   (16,595)       (79,426)         (96,021)      (16,583)           (16,580)
                                                    ----------       --------       ----------    ----------         ----------
Total long-term debt                                $  639,280       $      0       $  639,280    $  679,205         $  694,761
                                                    ==========       ========       ==========    ==========         ==========
</TABLE>
Amendments to Agrilink Foods' Term Loan Facility:  The Agrilink Foods' term loan
facility  contains  customary  covenants and restrictions on Agrilink Foods' and
the Cooperative's  ability to engage in certain activities,  including,  but not
limited to: (i)  limitations on the incurrence of indebtedness  and liens,  (ii)
limitations on sale-leaseback  transactions,  consolidations,  mergers,  sale of
assets,  transactions  with affiliates and investments and (iii) covenants which
require  Pro-Fac to maintain a minimum level of consolidated  EBITDA,  a minimum
consolidated  interest  coverage  ratio,  a minimum  consolidated  fixed  charge
coverage ratio, a maximum  consolidated  leverage ratio,  and a minimum level of
consolidated net worth. Under the Credit Agreement, the assets, liabilities, and
results of  operations  of  AgriFrozen  Inc., a subsidiary  of Pro-Fac,  are not
consolidated with Pro-Fac for purposes of determining debt covenant compliance.

During the first quarter of fiscal 2001,  Agrilink Foods negotiated an amendment
to the covenants  outlined under the credit facility.  In consideration for this
amendment, Agrilink Foods incurred a fee of approximately $1.7 million. This fee
is being  amortized  over  the  life of the  credit  facility.  Pursuant  to the
amendment,  the interest rates were modified and the credit  facility  currently
bears  interest,  at  Agrilink  Foods'  option,  at the  Administrative  Agent's
alternate base rate or the London Interbank Offered Rate ("LIBOR") plus, in each
case,  applicable  margins of: (i) in the case of alternate base rate loans, (x)
1.25  percent  for loans  under the  Revolving  Credit  Facility  and the Term A
Facility,  (y) 3.00  percent  for loans  under the Term B Facility  and (z) 3.25
percent for loans under the Term C Facility and (ii) in the case of LIBOR loans,
(x) 3.00 percent for loans under the  Revolving  Credit  Facility and the Term A
Facility,  (y) 4.00  percent  for loans  under the Term B Facility  and (z) 4.25
percent  for  loans  under  the  Term C  Facility.  The  Administrative  Agent's
"alternate  base rate" is defined as the  greater  of: (i) the prime  commercial
rate as announced  by the  Administrative  Agent or (ii) the Federal  Funds rate
plus  0.50  percent.  Pro-Fac  and  Agrilink  Foods are in  compliance  with all
covenants, restrictions, and requirements under the terms of the credit facility
as amended.

Credit   Agreement  and  Subordinated   Note  Agreement  of  AgriFrozen:   Under
AgriFrozen's   CoBank  Credit  Facility,   AgriFrozen  is  able,  under  certain
conditions,  to borrow up to $50.0 million for seasonal working capital purposes
under the CoBank Revolving  Credit Facility.  As of September 23, 2000, (i) cash
borrowings  outstanding  under the CoBank  Revolving  Credit Facility were $44.8
million,  and (ii) additional  availability  under the CoBank  Revolving  Credit
Facility, after taking into account the amount of borrowings,  was $5.2 million.
The CoBank  Revolving  Credit  Facility  requires that  AgriFrozen  meet certain
financial tests and ratios and comply with certain restrictions and limitations.

CoBank  has  verbally  agreed to forbear  from  enforcing  rights or  exercising
remedies in respect of existing  noncompliance  with certain financial tests and
ratios and existing  noncompliance  with certain  restrictions  and limitations.
Such forbearance is for an indefinite  duration and could be withdrawn by CoBank
at any time.  AgriFrozen continues its negotiations with CoBank concerning these
areas and to increase  the  borrowing  limit under the CoBank  Revolving  Credit
Facility.  In light of these  circumstances,  there can be no assurance that the
cash flow  generated by operations  and the amounts  available  under the CoBank
Revolving  Credit Facility will provide  adequate  liquidity to fund the working
capital needs and capital expenditures of AgriFrozen.

AgriFrozen's obligations are not guaranteed by Pro-Fac or Agrilink Foods and are
expressly  nonrecourse as to Pro-Fac and Agrilink Foods. As such,  these current
circumstances of AgriFrozen's debt and liquidity will not affect the business of
Pro-Fac or Agrilink Foods.

NOTE 7.       OTHER MATTERS

Restructuring:  During the third  quarter of fiscal 1999,  Agrilink  Foods began
implementation of a corporate-wide restructuring program. The overall objectives
of the plan  were 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 and have improved annual earnings by approximately $8.0
million.  Through  September  23,  2000,  $4.3  million of this  charge has been
liquidated  and the remaining  termination  benefits  will be liquidated  during
fiscal 2001.

NOTE 8.       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  income 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,  and  various  other  products.  Branded  products  within the  vegetable
category include Birds Eye, Birds Eye Voila!, 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,  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>


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

(Dollars in Millions)                                                                     Quarter Ended
                                                                         ----------------------------------------------
                                                                         September 23, 2000        September 25, 1999
                                                                         ------------------        ------------------
<S>                                                                          <C>                        <C>
Net Sales:
   Vegetables                                                                $   225.2                  $  190.3
   Fruits                                                                         25.5                      23.3
   Snacks                                                                         23.4                      21.4
   Canned Meals                                                                   15.7                      16.6
   Other                                                                          12.7                      14.7
                                                                             ---------                  --------
     Continuing segments                                                         302.5                     266.3
   Businesses sold1                                                                0.0                      29.9
                                                                             ---------                  --------
         Total                                                               $   302.5                  $  296.2
                                                                             =========                  ========

Operating income:
   Vegetables2                                                               $    12.8                  $   14.7
   Fruits                                                                          3.8                       3.3
   Snacks                                                                          1.7                       1.5
   Canned Meals                                                                    2.5                       1.9
   Other                                                                           0.8                       0.9
                                                                             ---------                  --------
     Continuing segments                                                          21.6                      22.3
   Businesses sold1                                                                0.0                      (0.2)
                                                                             ---------                  --------
Total consolidated operating income                                               21.6                      22.1
Interest expense                                                                 (21.5)                    (20.7)
                                                                             ---------                  --------
Income before taxes, dividends, and allocation of net proceeds               $     0.1                  $    1.4
                                                                             =========                  ========

<FN>
1 Includes the private label canned  vegetable  business and the pickle business
sold in fiscal 2000.

2  The vegetable  product line includes  earnings  derived from Agrilink  Foods'
   investment in a joint venture of $0.3 million and $0.5 million in fiscal 2001
   and fiscal 2000, respectively.
</FN>
</TABLE>

NOTE 9.       SUBSIDIARY GUARANTORS

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

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.

(Dollars in Thousands)
                                                     Quarter Ended
                                         September 23,         September 25,
                                             2000                   1999
                                        ---------------        --------------

Summarized Statement of Operations:
    Net sales                             $  18,943              $  18,262
    Gross profit                             14,842                 14,384
    Income from continuing operations        15,669                 14,132
    Net income                               10,185                  9,186



<PAGE>


(Dollars in Thousands)
                                                    Quarter Ended
                                         September 23,         September 25,
                                             2000                   1999
                                        ---------------        --------------
Summarized Balance Sheet:
    Current assets                        $   3,266              $   2,511
    Noncurrent assets                       209,901                215,813
    Current liabilities                       7,041                  5,583

NOTE 10.      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 $1.8 million and were paid on October 31, 2000.