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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   ----------

                              Form 10-K Equivalent
              ANNUAL REPORT PURSUANT TO SECTIONS 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                                   ----------

     (Mark One)
            [ ] Annual Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

                     For the Fiscal Year Ended June 24, 2006
                                       or
          [ ] Transition Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

              For the Transition Period from _________to_________

                           Commission File Number N/A

                              BIRDS EYE FOODS, INC.
             (Exact name of registrant as specified in its charter)

             Delaware                                   16-0845824
      (State of incorporation)              (IRS Employer Identification Number)

           90 Linden Oaks, PO Box 20670, Rochester, NY        14602-0670
              (Address of Principal Executive Offices)        (Zip Code)

       Registrant's telephone number, including area code: (585) 383-1850

        Securities Registered Pursuant to Section 12(b) of the Act: NONE

        Securities Registered Pursuant to Section 12(g) of the Act: NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act.

                                 YES [ ] NO [X]

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15 (d) of the Act.

                                 YES [X] NO [ ]

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                                 YES [ ] NO [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.

[ ] Not Applicable

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):

   Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [X]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

                                 YES [ ] NO [X]

The registrant's common stock is not publicly traded.

Aggregate market value of voting and non-voting common equity held by
non-affiliates of the registrant: NONE

 Number of common shares outstanding at September 13, 2006: Common Stock: 11,000

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

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           FORM 10-K EQUIVALENT ANNUAL REPORT - FISCAL YEAR 2006
                           BIRDS EYE FOODS, INC.
                             TABLE OF CONTENTS

                                                                            PAGE

           Cautionary Statement on Forward-Looking Statements and Risk
           Factors ......................................................     3

                                     PART I

ITEM 1.    Description of Business
              General Development of Business ...........................     3
              Narrative Description of Business .........................     4
              Financial Information About Industry Segments .............     5
              Packaging and Distribution ................................     5
              Trademarks ................................................     5
              Raw Material Sources ......................................     5
              Environmental Matters .....................................     6
              Seasonality of Business ...................................     6
              Practices Concerning Working Capital ......................     6
              Significant Customers .....................................     6
              Backlog of Orders .........................................     6
              Business Subject to Governmental Contracts ................     6
              Competitive Conditions ....................................     7
              Market and Industry Data ..................................     7
              New Products and Research and Development .................     7
              Employees .................................................     7
ITEM 1A.   Risk Factors .................................................     7
ITEM 1B.   Unresolved Staff Comments ....................................    10
ITEM  2.   Description of Properties ....................................    10
ITEM  3.   Legal Proceedings ............................................    11
ITEM  4.   Submission of Matters to a Vote of Security Holders ..........    11

                                     PART II

ITEM  5.   Market for Registrant's Common Equity, Related Stockholder
           Matters, and Issuer Purchases of Equity Securities ...........    12
ITEM  6.   Selected Financial Data ......................................    12
ITEM  7.   Management's Discussion and Analysis of Financial Condition
           and Results of Operations ....................................    13
ITEM  7A.  Quantitative and Qualitative Disclosures About Market Risk ...    25
ITEM  8.   Financial Statements and Supplementary Data ..................    26
ITEM  9.   Changes in and Disagreements with Accountants on Accounting
           and Financial Disclosure .....................................    60
ITEM  9A.  Controls and Procedures ......................................    60
ITEM  9B.  Other Information ............................................    61

                                    PART III

ITEM 10.   Directors and Executive Officers of the Registrant............    62
ITEM 11.   Executive Compensation .......................................    64
ITEM 12.   Security Ownership of Certain Beneficial Owners and Management
           and Related Stockholder Matters ..............................    68
ITEM 13.   Certain Relationships and Related Transactions ...............    70
ITEM 14.   Principal Accountant Fees and Services .......................    72

                                     PART IV

ITEM 15.   Exhibits and Financial Statement Schedules ...................    73

           Signatures ...................................................    75
           Exhibit Index ................................................    77

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       CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS AND RISK FACTORS

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

The Company cautions readers that any such forward-looking statements made by or
on behalf of the Company are based on management's current expectations and
beliefs, all of which could be affected by the uncertainties and risk factors
described in Item 1A of Part I of this Report. The Company's actual results
could differ materially from those expressed or implied in the forward-looking
statements.

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

                        GENERAL DEVELOPMENT OF BUSINESS

Birds Eye Foods, incorporated in 1961 and based in Rochester, New York, is a
producer and marketer of processed food products. The terms "Company" and "Birds
Eye Foods" mean "Birds Eye Foods, Inc." and its subsidiaries unless the context
indicates otherwise. The Company has three primary segments in which it
operates, including: brand frozen, brand dry, and non-brand products. The
majority of each of the segments' net sales is within the United States. In
addition, all of the Company's operating facilities are within the United
States.

Birds Eye Foods markets its brand frozen vegetable products under the names
Birds Eye, Birds Eye Steamfresh, Birds Eye Voila!, C&W, Freshlike and
McKenzie's. In addition, Birds Eye Foods produces brand dry products, including
fruit fillings and toppings (Comstock and Wilderness), chili and chili
ingredients (Nalley and Brooks), salad dressings (Bernstein's and Nalley), and
snacks (Tim's, Snyder of Berlin and Husman). The Company's brand products are
sold to customers such as Wal-Mart/Sam's, C&S Wholesale Grocers, Inc., Publix
Super Markets, Inc., Kroger, Food Lion, Albertsons, Safeway, and Wakefern Foods.
All of the major brands under which the Company markets its products are listed
below under "Trademarks."

Currently, the Company also produces products for non-brand markets which
include the Company's store brand, food service and industrial product lines.
The Company's store brand products include frozen vegetables, fruit fillings and
toppings, chili products, and other canned products, which are sold to customers
such as Wal-Mart/Sam's, Albertsons, C&S Wholesale Grocers, Inc., Kroger, BJ's,
and Aldi Inc.

The Company's food service and industrial products include frozen vegetables,
salad dressings, mayonnaise, fruit fillings and toppings, and chili products,
which are sold to customers such as SYSCO, Gordon Food Service, ConAgra,
Federated Group and Lafe Foods.

The percentage of net sales from products under brand names owned and promoted
by the Company amounted to approximately 67 percent in fiscal 2006. Of these
sales, 44 percent comprised brand frozen net sales and 23 percent comprised
brand dry net sales. Non-brand items contributed 33 percent of net sales in
fiscal 2006.

Exit Activities: On July 25, 2006, the Company announced that it will
concentrate its resources on its brand businesses, and increase its focus on new
products and marketing. As a result, the Company will be exiting the vast
majority of its non-brand frozen business over the next 12 to 18 months. The
Company plans to sell five related production facilities and close one
production facility. Birds Eye Foods will continue to deliver non-brand frozen
products to current customers during this period. See further discussion at NOTE
14 to the "Notes to Consolidated Financial Statements" for additional
disclosures regarding the Company's decision to exit the non-brand frozen
business.

The Change in Control (the "Transaction"): On August 19, 2002 (the "Closing
Date"), pursuant to the terms of the Unit Purchase Agreement dated June 20, 2002
(the "Unit Purchase Agreement") by and among Pro-Fac Cooperative, Inc., a New
York agricultural cooperative ("Pro-Fac"), Birds Eye Foods, at the time a New
York corporation and a wholly-owned subsidiary of Pro-Fac, and Vestar/Agrilink
Holdings LLC, a Delaware limited liability company ("Vestar/Agrilink Holdings"),
Vestar/Agrilink Holdings and its affiliates indirectly acquired control of the
Company.

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                        NARRATIVE DESCRIPTION OF BUSINESS

The Company has three primary segments in which it operates: brand frozen, brand
dry, and non-brand. A description of the Company's three primary segments
follows:

Brand Frozen: The Company's brand frozen family of products includes traditional
frozen vegetables as well as value added products marketed under recognizable
consumer brands. The Birds Eye brand product lines include an array of
traditional frozen vegetables from peas, beans, and corn to lightly seasoned and
sauced vegetables, along with numerous varieties of vegetable blends. Baby
vegetables provide another alternative in the portfolio of Birds Eye frozen
offerings. The Company's products come in an array of sizes tailored to meet the
needs of consumers of small households and large families. In addition, other
value added products under the Birds Eye umbrella include Birds Eye Voila!, a
frozen all-in-one meal replacement product. In fiscal 2006, the Company launched
the Birds Eye Steamfresh product line that introduces an innovative method to
steam vegetables in a convenient and specially designed microwaveable bag. Birds
Eye Steamfresh combines patented steaming technology and fresh frozen vegetables
to deliver taste, quality and convenience to consumers. The Company also markets
frozen fruit products under the Birds Eye brand.

The Company licenses the Birds Eye Fresh trademark to several fresh vegetable
partners.

The Company's portfolio of other brand frozen products includes several regional
brands which command a strong market share in the geographies in which they
compete.

On September 23, 2004, the Company acquired the California and Washington
Company ("C&W"), a San Francisco based marketer of frozen vegetables and fruits.
The Company markets and sells the C&W brand product line in the Western United
States, with the number one branded market share positions in California, the
Pacific Northwest and Arizona.

Freshlike is a leading consumer brand of frozen vegetables in the Midwest, and
McKenzie's markets Southern-style vegetable products distributed primarily in
the Southern United States.

Net sales within the brand frozen segment represented approximately 44, 41, and
40 percent of the Company's total net sales in fiscal 2006, 2005, and 2004,
respectively.

Brand Dry: The Company's brand dry family of products includes a wide variety of
product offerings. The Company markets fruit fillings and toppings products
under brands including Comstock and Wilderness, well-known consumer brands. The
Company also markets snack items through regional brands including Snyder of
Berlin, Husman, and Tim's. Snyder of Berlin competes in the Mid-Atlantic states.
Husman products are marketed in the Midwest, and Tim's competes in the Pacific
Northwest. In addition, the Company competes in the salad dressing category with
the Bernstein's and Nalley brands marketed in the Pacific Northwest. Adding to
the Company's variety of brand dry items are chili and chili ingredients
marketed regionally under the Nalley and Brooks brands in the Pacific Northwest
and the Midwest, respectively. The Company commands a strong market share for
its brand dry products in the geographies in which they compete. Brand dry
products represented approximately 23, 24, and 24 percent of the Company's net
sales in fiscal 2006, 2005 and 2004, respectively.

Non-Brand: The Company's non-brand markets include its store brand, food service
and industrial and export product lines.

The Company's store brand product categories include frozen vegetables, fruit
fillings and toppings, chili products, and other canned products. The store
brand products are sold to large grocery store chains. The Company's food
service products include frozen vegetables, salad dressings, mayonnaise, fruit
fillings and toppings, and chili products. These food service products are
marketed and sold to restaurant chains and food service distributors. Industrial
and export products primarily include frozen vegetables and fruit fillings and
toppings which are sold to other food manufacturers for use as ingredients in
their products. Non-brand products represented approximately 33, 35, and 36
percent of the Company's net sales in fiscal 2006, 2005 and 2004, respectively.

See "Exit Activities" below for additional disclosures regarding the Company's
non-brand frozen business.

Discontinued Operations: On August 23, 2005 the Company sold its Mexican
subsidiary, Birds Eye de Mexico, S.A. de C.V. ("BEMSA") and all of its
production assets in Celaya, Mexico.

On May 1, 2004, the Company sold its Freshlike canned vegetable business to
Allen Canning Company. This sale did not impact frozen products carrying the
Freshlike brand name.

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The operations of BEMSA and the Freshlike canned vegetable business are included
in discontinued operations in the Company's financial statements in accordance
with Statement of Financial Accounting Standards ("SFAS") No. 144 "Accounting
for the Impairment or Disposal of Long-Lived Assets." See NOTE 4 to the "Notes
to Consolidated Financial Statements" for additional disclosures regarding
discontinued operations.

Exit Activities: On July 25, 2006, the Company announced that it will
concentrate its resources on its brand businesses, and increase its focus on new
products and marketing. As a result, the Company will be exiting the vast
majority of its non-brand frozen business over the next 12 to 18 months. The
Company plans to sell five related production facilities and close one
production facility. Birds Eye Foods will continue to deliver non-brand frozen
products to current customers during this period. See further discussion at NOTE
14 to the "Notes to Consolidated Financial Statements" for additional
disclosures regarding the Company's decision to exit the non-brand frozen
business.

                  FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

The business of the Company is principally conducted in three primary segments
including: brand frozen, brand dry, and non-brand. The financial statements for
the fiscal years ended June 24, 2006, June 25, 2005, and June 26, 2004, which
are included in this Report, reflect information relating to those segments for
each of the Company's last three fiscal years. See NOTE 12 to the "Notes to
Consolidated Financial Statements" and Management's Discussion and Analysis of
Financial Condition and Results of Operations for additional disclosures
regarding segments.

                           PACKAGING AND DISTRIBUTION

The food products produced by the Company are distributed to various consumer
markets in all 50 states. International sales account for a small portion of the
Company's activities. The Company's products are primarily sold through food
brokers who sell primarily to supermarket chains and various institutional
entities. Snack products within the brand dry segment are primarily marketed
through distributors (some of which are owned and operated by the Company) who
sell directly to retail outlets in the Midwest, Mid-Atlantic, and Pacific
Northwest. Customer brand operations encompass the sale of products under store
brands to chain stores and under the controlled labels of buying groups. The
Company has developed central storage and distribution facilities that permit
multi-item single shipments to customers in key marketing areas.

The Company maintains a multiyear logistic agreement with APL Logistics ("APL")
under which APL provides freight management, packaging and labeling services,
and distribution support to and from production facilities owned by the Company
in and around Coloma, Michigan.

                                   TRADEMARKS

The major brand names under which the Company markets its products are
trademarks of the Company. Such brand names are considered to be of material
importance to the business of the Company since they have the effect of
developing brand identification and maintaining consumer loyalty. There are
trademark registrations for substantially all of the Company's trademarks. These
trademark registrations are of perpetual duration so long as they are
periodically renewed. It is the Company's intent to maintain its trademark
registrations. The major trademarks utilized by the Company follow:

Segment                                   Trademark
-------           --------------------------------------------------------------

Brand Frozen      Birds Eye Foods(1), Birds Eye, Voila!(2), Birds Eye Fresh,
                  Steamfresh(1), C&W, C&W California & Washington, California &
                  Washington Organic, Freshlike, McKenzie's, Gold King, Southern
                  Farms, Southland, Tropic Isle

Brand Dry         Birds Eye Foods(1), Comstock, Brooks, Nalley, Wilderness,
                  Snyder of Berlin, Tim's Cascade Style Potato Chips, La
                  Restaurante, Erin's(1), Thank You, Husman's, Flavor
                  Destinations,` Mariner's Cove, Riviera, Bernstein's and
                  Greenwood

Non-brand         Birds Eye Foods(1), Chill-Ripe, Globe

(1)   Application filed and U.S. federal registration is pending.

(2)   Voila! is subject to a license agreement from a third party.

                              RAW MATERIAL SOURCES

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Birds Eye Foods purchases raw materials for use in its manufacturing process.
Historically, the purchase of agricultural commodities have been from Pro-Fac
pursuant to the terms of an Amended and Restated Marketing and Facilitation
Agreement between Birds Eye Foods and Pro-Fac. The commercial market value
("CMV") of crops supplied by Pro-Fac for use by the Company in fiscal 2006 was
$47.0 million. The Company also purchases agricultural commodities by entering
into preseason contracts with growers, and when necessary, on the open market.
See further discussion of Birds Eye Foods' relationship with Pro-Fac in NOTES 1
and 2 to the "Notes to Consolidated Financial Statements", including a
description of the Amended and Restated Marketing and Facilitation Agreement.

Weather conditions can impact the profitability of all of the segments of the
business. Favorable weather conditions can produce high crop yields and an
oversupply situation, while excessive rain or drought conditions can produce low
crop yields and a shortage situation. The utilization of the Company's
facilities is directly correlated to the timing of crop harvests and crop
yields. Poor weather conditions hurt crop yields and result in uneven crop
delivery cycles that increase production costs. In addition, pricing can be
impacted by crop size and yields and the overall national supply.

The Company purchases all of its requirements for nonagricultural products,
including containers, in the open market. Although the Company has not
experienced any difficulty in obtaining adequate supplies of such items,
occasional periods of short supply of certain raw materials may occur. As
discussed in Item 7A. "Quantitative and Qualitative Disclosure about Market
Risk', the Company has entered into swap agreements to manage its exposure to
price fluctuations associated with certain manufacturing supplies.

On July 25, 2006 the Company announced it will be exiting the vast majority of
its non-brand frozen business over the next 12 to 18 months, and plans to sell
five related production facilities. As a result of these decisions, in future
years the Company anticipates that it will obtain the majority of its
agricultural commodity needs by entering into preseason contracts with growers.
The Company believes agricultural commodities will be in adequate supply and
generally will be available from numerous sources.

                              ENVIRONMENTAL MATTERS

The Company's facilities and products are subject to federal, state, and local
laws and regulations relating to the quality of products, sanitation, safety,
and environmental control. The Company believes that it complies with such laws
and regulations in all material respects, and that continued compliance with
such regulations will not have a material effect upon capital expenditures,
earnings or the competitive position of the Company.

                            SEASONALITY OF BUSINESS

From a sales point of view, the business of the Company is not highly seasonal,
since the demand for its products is fairly constant throughout the year.
Exceptions to this general rule include some products that have higher sales
volume in the cool weather months, such as certain frozen vegetables, chili, and
fruit fillings and toppings, and others that have higher sales volume in the
warm weather months, such as potato chips and salad dressings. Since many of the
raw materials processed by the Company are agricultural crops, production of
these products is predominantly seasonal, occurring during and immediately
following the purchase of such crops.

                      PRACTICES CONCERNING WORKING CAPITAL

The Company must maintain substantial inventories throughout the year of
products produced from seasonal raw materials. These inventories are generally
financed through seasonal borrowings. The Company uses its revolving credit
facility and cash on hand for seasonal borrowings, the amount of which
fluctuates during the year. Both the maintenance of substantial inventories and
the practice of seasonal borrowing are common to the food processing industry.

On July 25, 2006, the Company announced that it will be exiting the vast
majority of its non-brand frozen business over the next 12 to 18 months. The
Company's decision to exit the non-brand frozen business will result in reduced
inventory levels and lower seasonal borrowings beginning in fiscal 2008.

                              SIGNIFICANT CUSTOMERS

For the fiscal year ended June 24, 2006, Wal-Mart/Sam's accounted for 18 percent
of the Company's consolidated revenue. In fiscal 2006, Wal-Mart/Sam's
represented 25 percent, 11 percent and 12 percent of the brand frozen, brand dry
and non-brand segments revenue, respectively. In addition, C&S Wholesale
represented 12 percent of the brand frozen segment revenue in fiscal 2006.

                                BACKLOG OF ORDERS

A backlog of orders has not historically been significant in the business of the
Company. Orders are filled shortly after receipt from inventories.

                                       6



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                   BUSINESS SUBJECT TO GOVERNMENTAL CONTRACTS

No material portion of the business of the Company is subject to renegotiation
of contracts with, or termination by, any governmental agency.

                             COMPETITIVE CONDITIONS

All products of the Company, particularly brand products, compete with those of
other national and major regional food processors under highly competitive
conditions. The principal methods of competition in the food industry are a
readily available and broad line of products, product quality, price, and
marketing and sales promotions.

Birds Eye Foods' pricing is generally competitive with that of other food
processors for products of comparable quality. The brand products of the Company
are marketed under national and regional brands. In fiscal 2006, marketing
programs for national brands focused primarily on the nationwide launch of the
Birds Eye Steamfresh product line.

Although the relative importance of the above factors may vary between
particular products or customers, the above description is generally applicable
to all of the products of the Company in the various markets in which they are
distributed.

It is difficult to estimate the number of competitors in the markets served by
the Company. Nearly all products sold by Birds Eye Foods compete with the
nationally advertised brands of other leading food processors, including Del
Monte, General Mills, Frito-Lay, Kraft, and similar major brands, as well as
with the brand and store brand products of a number of regional processors, many
of which operate only in portions of the marketing area served by the Company.

                            MARKET AND INDUSTRY DATA

Unless otherwise stated in this report, industry and market share data used
throughout this Form 10-K Equivalent were derived from industry sources believed
by the Company to be reliable, including information provided by Information
Resources, Inc. Consultants' reports and industry publications generally state
that the information contained therein has been obtained from sources believed
to be reliable, but that the accuracy and completeness of such information is
not guaranteed. The Company has not independently verified such data and makes
no representation as to its accuracy.

                    NEW PRODUCTS AND RESEARCH AND DEVELOPMENT

The Company operates a technical center located in Green Bay, Wisconsin that is
responsible for new product development, quality assurance, and engineering.
Approximately 20 full-time employees are employed at this facility. The Company
follows a four-stage new product development process as follows: screening,
feasibility, development, and commercialization. This new product development
process is intended to ensure input from consumers, customers, and internal
functional areas before a new product is brought to market. Birds Eye Foods also
focuses on the development of related products or modifications of existing
products for the Company's brand businesses.

The amount expensed on company-sponsored and customer-sponsored activities
relating to the development of new products or the improvement of existing
products was $2.8 million in fiscal 2006 and $4.3 million in both fiscal 2005
and 2004.

In the first quarter of fiscal 2006, the Company introduced Birds Eye Steamfresh
as an addition to its frozen vegetable segment. The Birds Eye Steamfresh
platform introduces an innovative method to steam vegetables in a convenient and
specially designed microwaveable bag. Birds Eye Steamfresh combines patented
steaming technology and fresh frozen vegetables to deliver taste, quality and
convenience to consumers.

                                    EMPLOYEES

As of June 24, 2006, the Company had approximately 2,660 full-time employees, of
whom 1,800 were engaged in production and the balance in management, sales and
administration. As of that date, the Company also employed approximately 890
seasonal and other part-time employees, almost all of whom were engaged in
production. Most of the production employees are members of various labor
unions.

On July 25, 2006, the Company announced that it will be exiting the vast
majority of its non-brand frozen business over the next 12 to 18 months. The
Company plans to sell five related production facilities and close one
production facility. These initiatives will result in the elimination of
approximately 1,400 positions. See further discussion at NOTE 14 to the "Notes
to Consolidated Financial Statements" for additional disclosures regarding the
Company's decision to exit the non-brand frozen business.

ITEM 1A. RISK FACTORS

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In addition to other information set forth in this Report, the following risks
and uncertainties could materially adversely affect the Company's business,
financial condition, or results of operations. While the Company believes it has
identified and discussed below the key risk factors affecting its business,
there may be additional risks and uncertainties that are not presently known or
that are not currently believed to be significant that may adversely affect the
Company's business, results of operations or financial condition in the future.

Strong competition in the food industry, including competitive pricing, could
adversely affect the Company's profitability and market share.

Competition in the Company's product categories is highly competitive and is
based on price, product innovation, product quality, brand recognition and
loyalty, effectiveness of marketing, promotional activity and the ability to
identify and satisfy consumer preferences. Such pressures may restrict the
Company's ability to increase prices, including in response to product and other
cost increases. The Company's results of operations will suffer if profit
margins decrease, either as a result of a reduction in prices or increased
costs, and the Company is not able to increase sales volumes to offset those
margin decreases.

In order to maintain or increase the Company's current market share in this
highly competitive environment, the Company may also need to increase its
spending on marketing, advertising and new product innovation. The success of
marketing, advertising and new product innovation is subject to risks, including
uncertainties about trade and consumer acceptance. As a result, increased
expenditures by the Company may not maintain or enhance market share and could
result in lower profitability.

The inherent risks in the marketplace associated with new product introductions
and changes in consumer preferences could adversely impact the Company's
profitability.

The success of the Company is dependent upon anticipating and reacting to
changes in consumer preferences, including health and wellness. There are
inherent risks in the marketplace associated with new product or packaging
introductions, including uncertainties about trade and consumer acceptance. The
Company may be required to increase expenditures for new product development and
introductory costs. The Company may not be successful in developing new products
or improving existing products, or its new products may not achieve consumer
acceptance, each of which could negatively impact profitability.

The consolidation of retail customers may adversely impact the Company's
operating margins and profitability.

The Company's customers such as supermarkets, warehouse clubs and food
distributors, have consolidated in recent years and consolidation is anticipated
to continue. As the retail grocery trade continues to consolidate and mass
market retailers become larger, large retail customers may seek to use their
position to improve their profitability through lower pricing and increased
promotional programs. These customers also may use shelf space currently used by
the Company's branded products for their store brand products. If the Company
fails to respond to these trends, its volume growth could slow or it may need to
lower prices or increase promotional spending for its products, any of which
could adversely impact its profitability.

Fluctuations in the cost of supply chain elements, including energy and energy
related costs could increase operating costs and lower profitability.

The Company sources raw materials including corn, peas, beans, cherries,
blueberries, and meat, as well as packaging materials such as plastic, metal,
paper, fiberboard, unbleached kraftliner and other materials to manufacture
products. The cost of such may fluctuate due to weather conditions, or other
unforeseen circumstances and may result in unexpected increases in costs.

Rising fuel and energy costs may also have a significant impact on the cost of
operations, including the manufacture, transport, and distribution of products.
Fuel costs may fluctuate due to a number of factors outside the control of the
Company, including governmental policy and regulation and weather conditions. If
the Company is unable to increase prices to offset these increased costs as a
result of consumer sensitivity to pricing or otherwise, the Company may
experience lower profitability.

The Company may experience liabilities or adverse affects on its reputation as a
result of product recalls.

The Company sells products for human consumption and may need to recall some of
its products if product contamination, spoilage, mishandling or tampering were
to occur. The scope of such a recall could result in significant costs incurred
as a result of the recall, including, potential destruction of inventory, and
lost sales. Should consumption of any product cause injury, the Company may be
liable for monetary damages as a result of a judgment against it. A significant
product recall or product liability case could cause a loss of consumer
confidence in the Company's food products and could have a material adverse
affect on the value of the Company's brands and results of operations.

New regulations could adversely affect the Company's business.

                                       8



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Food production and marketing are highly regulated by a variety of federal,
state, local and foreign agencies, and new regulations and changes to existing
regulations are issued regularly. Increased government regulation of the food
industry, such as recent requirements regarding the labeling of trans-fat
content, could result in increased costs to the Company and adversely affect its
profitability.

Economic downturns may cause consumers to shift their food purchases from higher
priced branded products to lower-priced store brand products.

Retailers are increasingly offering store brand products that compete with the
Company's branded products. The willingness of consumers to purchase the
Company's branded products depends in part on the perception that the Company's
branded products are of higher quality than less expensive alternatives. If the
difference in quality between the Company's branded products and store brands
narrows, or if there is a perception of such a narrowing, consumers may choose
not to buy the Company's branded products. Furthermore, in periods of economic
uncertainty, consumers tend to purchase more store brand or other economy
brands, which could result in a reduction in the volume of sales of the
Company's higher margin products or shift in the Company's product mix to lower
margin offerings. The Company's ability to maintain or improve its brand value
will impact whether these circumstances will result in decreased market share
and profitability of the Company.

The Company may not be able to successfully consummate proposed acquisitions or
divestitures or integrate acquired businesses.

Periodically, the Company evaluates acquiring other businesses that would
strategically fit within the Company. If the Company is unable to consummate,
successfully integrate and grow these acquisitions and to realize contemplated
revenue synergies and cost savings, its financial results could be adversely
affected. In addition, the Company may, periodically, divest businesses that no
longer strategically fit within its business portfolio, and the Company's
profitability may be impacted by either gains or losses on sales, or lost
operating income from those businesses. Furthermore, the Company may be unable
to divest businesses that are not core businesses or may not be able to do so on
terms that are favorable to the Company. In addition, the Company may be
required to incur asset impairment charges related to acquired or divested
businesses which may lower the Company's profitability. Acquisition and
divestiture activities present financial, managerial and operational challenges,
including diversion of management attention from existing businesses, difficulty
with integrating or separating personnel and financial and other systems,
increased expenses, assumption of unknown liabilities, indemnities and potential
disputes with the buyers and sellers.

The Company's inability to achieve efficiency in production could adversely
impact operating costs.

The Company's future success and profitability depends in part on its ability to
be efficient in the production and manufacturing of its products. The ability to
achieve additional efficiencies may become more difficult over time as the
Company takes advantage of existing opportunities. The failure to lower costs
through productivity gains could weaken the Company's competitive position.

The Company's ability to service its debt, including the Company's ability to
refinance, could significantly adversely impact the Company's financial
condition.

The Company's term loan facility, which matures in August 2008, provides for
principal payments of $129.6 million in fiscal 2008 and $106.6 million in fiscal
2009. In addition, the Company has $50.0 million aggregate principal amount of
senior subordinated notes outstanding, that are due in November 2008. Although
the Company currently intends to refinance its term loan facility prior to
maturity, in the event it is unable to refinance the term loan facility or is
unable to refinance the facility on favorable terms, the current principal
repayment terms could have a material adverse effect on the Company's financial
condition. The Company's ability to refinance will depend, in part, on its
future operating performance, which will, in part, be subject to prevailing
economic, financial, competitive and other factors beyond its control. Although
the Company expects that it will be able to refinance the Term Loan Facility on
favorable terms, there can be no assurance that it will be able to do so.

The Company's senior secured credit facility and the indenture governing the
senior subordinated notes contain various covenants.

The Company's senior secured credit facility contains financial covenants tied
to leverage and interest coverage. In addition, the Company's debt agreement
under certain circumstances limit certain additional borrowings, investments and
the acquisition and disposition of assets. As currently structured, a breach of
a covenant or restriction of these agreements could result in a default that
would in turn cause the affected lender to accelerate the repayment of principal
and accrued interest on the Company's outstanding loans, if they choose, and
terminate their commitments to lend additional funds. The future ability of the
Company to comply with the covenants depends on future business performance that
is subject to economic, financial, competitive and other factors including the
other risks described herein. In the event of default, we cannot assure that
waivers, amendments or alternative or additional financings could be obtained,
or if obtained, would be on terms acceptable to the Company.

                                       9



<PAGE>


Some of the Company's debt has variable rates of interest, which could result in
higher interest expense in the event of an increase in interest rates.

Certain of the Company's loans under the senior secured credit facility have
variable floating interest rates. This increases the Company's exposure to
fluctuations in market interest rates. The interest rates on the borrowings may
vary depending on the prime rate, the federal funds rate or Eurodollar Rate
(LIBOR). If these interest rates rise, the interest rate on the Company's
variable debt may increase. Therefore, an increase in these interest rates may
increase the Company's interest payment obligations and have a negative impact
on the Company's cash flow and results of operations.

The Company's ability to effectively complete the exit of the non-brand frozen
business.

On July 25, 2006, the Company announced it will be exiting the vast majority of
its non-brand frozen business over the next 12 to 18 months. The Company also
announced plans to sell five related production facilities and close one
production facility. If the Company is unable to effectively complete the exit
of the non-brand frozen business and sell the related production facilities, it
may not fully recognize the anticipated savings and operational benefits.
Further, if the exit activities have a negative impact on the Company's
relationships with employees, major customers or vendors, the Company's
profitability could be adversely affected.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None

ITEM 2. DESCRIPTION OF PROPERTIES

All plants, warehouses, office space and other facilities used by the Company in
its business are either owned by Birds Eye Foods or one of its subsidiaries or
leased from unaffiliated third parties. All of the properties owned by Birds Eye
Foods are subject to mortgages in favor of its primary lender. In general, the
properties include offices, processing plants and warehouse space. Some
processing plants are located in rural areas that are convenient for the
delivery of crops. The Company also has dispersed warehouse locations to
facilitate the distribution of finished products. Birds Eye Foods believes that
its facilities are in good condition and suitable for the operations of the
Company.

Certain property in Barker, New York and Red Creek, New York were classified as
assets held for sale for accounting purposes at June 24, 2006.

The following table describes all material facilities leased or owned by the
Company (other than certain public warehouses leased by the Company from
unaffiliated third parties from time to time). Except as otherwise noted, each
facility set forth below is owned by Birds Eye Foods.

                       FACILITIES UTILIZED BY THE COMPANY

<TABLE>
<CAPTION>
Type of Property                                            Location                Square Feet               Segment
----------------                                            --------                -----------    ---------------------------
<S>                                                         <C>                     <C>            <C>
Freezing plant, repackaging plant and distribution center   Darien, WI                397,975      Brand frozen/non-brand
Freezing plant and warehouse(1)                             Oakfield, NY              269,289      Brand frozen/non-brand
Freezing plant, repackaging plant and warehouse             Waseca, MN                258,475      Brand frozen/non-brand
Freezing plant, repackaging plant and warehouse(1)          Watsonville, CA           207,600      Brand frozen/non-brand
Freezing plant, repackaging plant and warehouse(1)          Fairwater, WI             199,837      Brand frozen/non-brand
Freezing plant(1)                                           Bergen, NY                137,737      Brand frozen/non-brand

Repackaging plant and distribution center                   Fulton, NY                254,856      Brand frozen/non-brand
Repackaging plant(1)                                        Montezuma, GA              77,370      Brand frozen/non-brand
Repackaging plant, warehouse, distribution center and
  public storage warehouse(1)                               Brockport, NY             346,470      Brand frozen/non-brand

Canning plant and warehouse                                 Fennville, MI             329,866      Brand dry/non-brand
Warehouse(2)                                                Waseca, MN                 91,400      Brand frozen/non-brand
Warehouse(2)                                                Darien, WI                140,086      Brand frozen/non-brand
Warehouse(2)                                                Montezuma, GA             236,814      Brand frozen/non-brand

Manufacturing plant and warehouse                           Tacoma, WA                286,468      Brand dry/non-brand

Manufacturing plant, warehouse, distribution center
  and office                                                Berlin, PA                183,500      Brand dry
Manufacturing plant, warehouse, distribution center and
  office(2)                                                 Algona, WA                 97,690      Brand dry
</TABLE>

                                       10



<PAGE>


<TABLE>
<S>                                                         <C>                       <C>         <C>
Distribution Center(2)                                      Erlanger, KY               32,000      Brand dry
Distribution Center(2)                                      Leetsdale, PA              18,200      Brand dry
Distribution Center(2)                                      Canal Fulton, OH           14,000      Brand dry
Distribution Center(2)                                      Bristol, TN                11,320      Brand dry
Distribution Center(2)                                      Ashland, KY                10,760      Brand dry
Distribution Center(2)                                      Altoona, PA                10,000      Brand dry
Distribution Center(2)                                      Monessen, PA               15,480      Brand dry
Distribution Center(2)                                      Elwood City, PA            12,000      Brand dry

Canning plant and warehouse                                 Red Creek, NY                          Closed facility
Canning and freezing plant                                  Green Bay, WI                          Closed facility

Headquarters office (2)                                     Rochester, NY              77,513      Corporate
Office building - Green Bay                                 Green Bay, WI             107,200      Corporate
Office building - Tacoma                                    Tacoma, WA                 20,500      Corporate
</TABLE>

(1)   The Company plans to sell or close these facilities in conjunction with
      its recently announced decision to exit from the vast majority of its
      non-brand frozen business. See further discussion at NOTE 14 to the "Notes
      to Consolidated Financial Statements" for additional disclosures regarding
      the Company's decision to exit the non-brand frozen business.

(2)   Leased from third parties, although certain related equipment is owned by
      the Company.

ITEM 3. LEGAL PROCEEDINGS

Birds Eye Foods is a party to various legal proceedings from time to time in the
normal course of its business. In the opinion of management, any liability that
the Company might incur upon the resolution of these proceedings will not, in
the aggregate, have a material adverse effect on the Company's business,
financial condition, or results of operations. The Company maintains general
liability insurance coverage in amounts deemed to be adequate by management.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

                                       11



<PAGE>


                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND
        ISSUER PURCHASES OF EQUITY SECURITIES

Birds Eye Foods is an indirect wholly owned subsidiary of Holdings LLC. Birds
Eye Foods common stock is not publicly traded.

ITEM 6. SELECTED FINANCIAL DATA

Birds Eye Foods results of operations and financial condition for fiscal 2006,
fiscal 2005, fiscal 2004 and fiscal 2003 are not comparable with those of fiscal
2002. Fiscal 2006, fiscal 2005 and fiscal 2004 represent three complete fiscal
years of operations following the August 19, 2002 Transaction. Fiscal 2003
reflects the Company's operations for the "predecessor" period (June 30, 2002 to
August 18, 2002) and the Company's operations for the "successor" period (August
19, 2002 to June 28, 2003). The financial data below for fiscal 2002 also
reflect the Company's operations for the "predecessor" period. For further
discussion of the August 19, 2002 Transaction, see NOTES 1 and 2 to the "Notes
to Consolidated Financial Statements" of this Form 10-K Equivalent.

(Dollars in Thousands)

                              Birds Eye Foods, Inc.
                        FIVE YEAR SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                                                                                    Fiscal Year
                                                    Fiscal Year Ended June                 Periods Ended            Ended June
                                         -----------------------------------  ---------------------------------  ----------------
                                                                                  Successor       Predecessor
                                         Successor    Successor    Successor  August 19, 2002   June 30, 2002 -     Predecessor
                                            2006         2005       2004       June 28, 2003    August 18, 2002        2002
                                         ----------  -----------  ----------  ---------------  ----------------  ----------------
<S>                                      <C>         <C>          <C>         <C>              <C>               <C>
Consolidated Summary of Operations:
   Net sales                             $  927,797  $   858,669  $  843,398  $       764,900  $        98,076   $        943,886
   Cost of sales                           (746,949)    (677,706)   (652,863)        (585,239)         (75,441)          (735,714)
                                         ----------  -----------  ----------  ---------------  ---------------   ----------------
   Gross profit                             180,848      180,963     190,535          179,661           22,635            208,172
   Selling, administrative, and
     general expenses                      (118,486)    (120,565)   (112,208)        (105,606)         (15,084)          (113,904)
   Asset impairment charge                     (218)        (994)          0                0                0                  0
   Restructuring                             (4,492)      (1,940)          0                0                0             (2,622)
   Other income, net                             86        3,288           0                0                0                  0
   Gain from pension curtailment                  0            0           0                0                0              2,472
   Income from Great Lakes Kraut
     Company, LLC                                 0            0           0            1,770              277              2,457
   Goodwill impairment charge                     0            0           0                0                0           (179,025)
                                         ----------  -----------  ----------  ---------------  ---------------   ----------------
   Operating income/(loss) before
     dividing with Pro-Fac                   57,738       60,752      78,327           75,825            7,828            (82,450)
   Interest expense                         (32,936)     (28,456)    (31,326)         (39,807)          (7,416)           (61,331)
   Loss on early extinguishment of debt           0            0      (4,018)               0                0                  0
                                         ----------  -----------  ----------  ---------------  ---------------   ----------------
   Pretax income/(loss) from
     continuing operations and before
     dividing with Pro-Fac                   24,802       32,296      42,983           36,018              412           (143,781)
   Pro-Fac share of income                        0            0           0                0                0            (16,842)
                                         ----------  -----------  ----------  ---------------  ---------------   ----------------
   Pretax income/(loss) from
     continuing operations                   24,802       32,296      42,983           36,018              412           (160,623)
   Tax (provision)/benefit                   (9,835)     (12,139)    (15,438)         (14,426)            (169)            31,569
                                         ----------  -----------  ----------  ---------------  ---------------   ----------------
   Income/(loss) from continuing
     operations                              14,967       20,157      27,545           21,592              243           (129,054)
   Discontinued operations, net of tax         (281)      (1,552)      4,322             (836)            (158)            (1,640)
                                         ----------  -----------  ----------  ---------------  ---------------   ----------------
Net income/(loss)                        $   14,686  $    18,605  $   31,867  $        20,756  $            85   $       (130,694)
                                         ==========  ===========  ==========  ===============  ===============   ================
Balance Sheet Data:
   Working capital(a)                    $  198,742  $   173,937  $  211,603  $       316,901                    $        302,606
   Ratio of current assets to
      current liabilities                     2.3:1        2.1:1       2.4:1            3.0:1                               3.1:1

   Total assets                          $  807,330  $   804,524  $  779,973  $       909,383                    $        857,741
   Cash and cash equivalents             $   73,896  $    36,002  $   72,887  $       153,756                    $         14,686
   Long-term debt and capital leases
     (excludes current portion)          $  288,444  $   300,921  $  304,620  $       461,803                    $        625,585

Other Statistics:
     Average number of employees:
     Regular                                  2,774        2,813       2,937            3,447                               4,239
     Seasonal                                   704          655         685              844                               1,649
</TABLE>

(a)   Working capital represents current assets (including cash) less current
      liabilities.

                                       12



<PAGE>


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

The purpose of this discussion is to outline the significant reasons for
material changes in the Birds Eye Foods financial condition and results of
operations from fiscal 2004 through fiscal 2006. This section should be read in
conjunction with Part II, Item 8., "Financial Statements and Supplementary Data"
section of this report.

Birds Eye Foods has three primary segments including: brand frozen, brand dry,
and non-brand. The majority of each of the segments' net sales are within the
United States. In addition, all of the Company's operating facilities are within
the United States.

The Company's brand frozen family of products includes traditional frozen
vegetables as well as value added products marketed under recognizable brand
names such as Birds Eye, Birds Eye Steamfresh, Birds Eye Voila!, C&W, Freshlike
and McKenzie's. The Company's brand dry family of products includes a wide
variety of product offerings, including fruit fillings and toppings (Comstock
and Wilderness), chili and chili ingredients (Nalley and Brooks), salad
dressings (Bernstein's and Nalley), and snacks (Tim's, Snyder of Berlin, and
Husman).

Birds Eye Foods also currently produces many products for the non-brand markets
which include store brand, food service and industrial markets. The Company's
store brand products include frozen vegetables, fruit fillings and toppings,
chili products, and other canned products. The Company's food service/industrial
products include frozen vegetables, salad dressings, mayonnaise, fruit fillings
and toppings, and chili products. On July 25, 2006, the Company announced that
it will concentrate its resources on its brand businesses, and increase its
focus on new products and marketing. As a result, the Company will be exiting
the vast majority of its non-brand frozen business over the next 12 to 18
months. Birds Eye Foods will continue to deliver non-brand frozen products to
current customers during this period. See further discussion at NOTE 14 to the
"Notes to Consolidated Financial Statements" for additional disclosures
regarding the Company's decision to exit the non-brand frozen business.

The following tables illustrate the Company's results of operations by segment
for the fiscal years ended June 24, 2006, June 25, 2005, and June 26, 2004.

Net Sales
(Dollars in Millions)

                                  Fiscal Years Ended
               --------------------------------------------------
                 June 24,         June 25,          June 26,
                   2006             2005              2004
               -------------   -------------   ------------------
                        % of            % of                 % of
                 $     Total     $     Total        $       Total
               -----   -----   -----   -----      -----     -----

Brand frozen   405.0    43.7   356.1    41.5      334.0      39.6
Brand dry      212.7    22.9   203.4    23.7      202.4      24.0
Non-brand      310.1    33.4   299.2    34.8      307.0      36.4
               -----   -----   -----   -----      -----     -----
   Total       927.8   100.0   858.7   100.0      843.4     100.0
               =====   =====   =====   =====      =====     =====

                                       13



<PAGE>


Operating Income
(Dollars in Millions)

                                              Fiscal Years Ended
                                ----------------------------------------------
                                  June 24,        June 25,        June 26,
                                   2006             2005             2004
                                --------------  -------------   --------------
                                         % of            % of            % of
                                  $     Total     $     Total     $      Total
                                -----   ------  -----   -----   -----   ------

Brand frozen                     44.1     76.4   47.8    78.6    57.7     73.7
Brand dry                        36.7     63.6   31.5    51.8    34.7     44.3
Non-brand                       (18.5)   (32.1) (18.9)  (31.1)  (14.1)   (18.0)
                                -----   ------  -----   -----   -----   ------
   Subtotal                      62.3    107.9   60.4    99.3    78.3    100.0
Asset impairment charge(1)       (0.2)    (0.3)  (1.0)   (1.6)    0.0      0.0
Restructuring(2)                 (4.5)    (7.8)  (1.9)   (3.1)    0.0      0.0
Other income, net(3)              0.1      0.2    3.3     5.4     0.0      0.0
                                -----   ------  -----   -----   -----   ------
   Total operating income        57.7    100.0   60.8   100.0    78.3    100.0
                                =====   ======  =====   =====   =====   ======

(1)   Represents asset impairment charges which are not allocated to individual
      segments. This item is excluded from the Company's evaluation of segment
      performance. See NOTE 4 to the "Notes to Consolidated Financial
      Statements" for additional disclosures regarding the Company's asset
      impairment charges.

(2)   Represents restructuring charges which are not allocated to individual
      segments. This item is excluded from the Company's evaluation of segment
      performance. See NOTE 14 to the "Notes to Consolidated Financial
      Statements" for additional disclosures regarding the Company's
      restructuring activities.

(3)   Other income, net is not allocated to individual segments. These items are
      excluded from the Company's evaluation of segment performance. See NOTE 14
      to the "Notes to Consolidated Financial Statements" for additional
      disclosures regarding the items included in other income, net.

EBITDA(1)

The following table sets forth continuing segment EBITDA (defined as income from
continuing operations plus interest, taxes, depreciation and amortization) for
the fiscal years ended June 24, 2006, June 25, 2005, and June 26, 2004. EBITDA
is an additional measure used by the Company to evaluate the operating
performance of its segments, and is a primary measure used internally by
management to manage the business. EBITDA is also a primary measure used
externally by the Company's investor and lenders to ensure consistent
comparability of operating results. EBITDA should, however, be considered in
addition to, and not as a substitute for or superior to operating income, net
income, cash flows from operating activities, and other measures of financial
performance prepared in accordance with accounting principles generally accepted
in the United States ("GAAP"). As EBITDA is not a measure of performance
calculated in accordance with GAAP, this measure may not be comparable to
similarly titled measures employed by other companies.

                                       14



<PAGE>


(Dollars in Millions)

<TABLE>
<CAPTION>
                                                                     Fiscal Years Ended
                                                 ---------------------------------------------------------
                                                     June 24,               June 25,          June 26,
                                                       2006                  2005               2004
                                                 ------------------    ----------------   ----------------
                                                            % of                  % of               % of
                                                   $        Total         $       Total      $       Total
                                                 ------    --------    ------    ------   ------    ------
<S>                                              <C>       <C>         <C>       <C>      <C>       <C>
Brand frozen                                       54.3        64.9      57.1      66.5     66.3      67.2
Brand dry                                          40.4        48.2      35.2      41.0     38.3      38.8
Non-brand                                          (6.4)       (7.6)     (6.8)     (7.9)    (1.9)     (1.9)
                                                 ------    --------    ------    ------   ------    ------
   Subtotal                                        88.3       105.5      85.5      99.6    102.7     104.1
Asset impairment charge(2)                         (0.2)       (0.2)     (1.0)     (1.2)     0.0       0.0
Restructuring(3)                                   (4.5)       (5.4)     (1.9)     (2.2)     0.0       0.0
Other income, net(4)                                0.1         0.1       3.3       3.8      0.0       0.0
Loss on early extinguishment of debt(5)             0.0         0.0       0.0       0.0     (4.0)     (4.1)
                                                 ------    --------    ------    ------   ------    ------
   Total EBITDA                                    83.7       100.0      85.9     100.0     98.7     100.0
                                                 ======    ========    ======    ======   ======    ======

Reconciliation of Total EBITDA to net income:
   Depreciation and amortization                  (26.0)                (25.1)             (24.4)
   Interest expense                               (32.9)                (28.5)             (31.3)
   Tax provision                                   (9.8)                (12.1)             (15.4)
   Discontinued operations, net of tax             (0.3)                 (1.6)               4.3
                                                 ------                ------             ------
Net income                                         14.7                  18.6               31.9
                                                 ======                ======             ======
</TABLE>

(1)   Earnings before interest, taxes, depreciation, and amortization ("EBITDA")
      is defined as income from continuing operations plus interest, taxes,
      depreciation, and amortization.

(2)   Represents asset impairment charges which are not allocated to individual
      segments. This item is excluded from the Company's evaluation of segment
      performance. See NOTE 4 to the "Notes to Consolidated Financial
      Statements" for additional disclosures regarding the Company's asset
      impairment charges.

(3)   Represents restructuring charges which are not allocated to individual
      segments. This item is excluded from the Company's evaluation of segment
      performance. See NOTE 14 to the "Notes to Consolidated Financial
      Statements" for additional disclosures regarding the Company's
      restructuring activities.

(4)   Other income, net is not allocated to individual segments. These items are
      excluded from the Company's evaluation of segment performance. See NOTE 14
      to the "Notes to Consolidated Financial Statements" for additional
      disclosures regarding the items included in other income, net.

(5)   The loss on early extinguishment of debt of $4.0 million has not been
      allocated to segments. See NOTE 9 to the "Notes to Consolidated Financial
      Statements" for additional disclosures regarding long-term debt.

                     CHANGES FROM FISCAL 2005 TO FISCAL 2006

Net Sales: Net sales were $927.8 million in fiscal 2006, an increase of $69.1
million, or 8.0 percent, as compared to net sales of $858.7 million in fiscal
2005. Improvements resulted primarily from the brand frozen segment and
included: (a) net sales associated with the fiscal 2006 nationwide launch of
Birds Eye Steamfresh; (b) enhanced performance of the Birds Eye product line;
(c) growth within the Birds Eye Voila! product line; and (d) the acquisition of
the California and Washington Company ("C&W") on September 23, 2004. The
Company's brand dry and non-brand segments also showed improvements in net sales
as a result of increased volume. The "Segment Review" below outlines further
details regarding the Company's performance.

Gross Profit: Gross profit was $180.8 million in fiscal 2006, which is
consistent with fiscal 2005. Gross profit margin was, however, reduced from 21.1
percent to 19.5 percent. The decrease in gross profit margin resulted from
approximately $10.0 million of costs associated with the nationwide launch of
the Birds Eye Steamfresh product line. During fiscal 2006, gross profit margin
was also negatively impacted by significant inflationary pressures affecting
product costs including energy, fuel and employee benefit related expenses. To
offset these increasing costs, the Company will continue to focus on cost-saving
initiatives in its production and administrative areas.

Selling, Administrative and General Expenses: Selling, administrative and
general expenses were $118.5 million in fiscal 2006, a decrease of $2.1 million
or 1.7 percent, as compared to $120.6 million in fiscal 2005. The Company has
benefited from reductions in

                                       15



<PAGE>


overhead as a result of restructuring activities initiated in the fourth quarter
of fiscal 2005 and other cost saving efforts initiated in the current year.
Offsetting these reductions was an increase in media costs associated with the
Birds Eye Steamfresh launch.

Asset Impairment Charge: In the fourth quarter of fiscal 2006, the Company
determined that the current real estate market conditions in the Red Creek, New
York area had resulted in the impairment of its idle property in Red Creek. In
accordance with SFAS No. 144, the Company recorded an impairment charge of $0.2
million to write-down the carrying value of the Red Creek facility to fair value
less costs to sell. The Company expects to dispose of the Red Creek facility in
the first quarter of fiscal 2007.

In the third quarter of fiscal 2005, the Company determined that the current
real estate market conditions in the Green Bay, Wisconsin area had resulted in
the impairment of its closed Green Bay manufacturing facility. In accordance
with SFAS No. 144, the Company recorded an impairment charge of $1.0 million to
write-down the carrying value of the Green Bay manufacturing facility to fair
value. The Green Bay manufacturing facility was closed in conjunction with the
Company's sale of its brand canned vegetable businesses.

Restructuring: In the first quarter of fiscal 2006, the Company recognized a
charge of $4.5 million for payments to be provided and incurred in conjunction
with the departure of the Company's former Chairman, President and Chief
Executive Officer.

In the fourth quarter of fiscal 2005, the Company announced the elimination of
approximately 45 positions from various locations and departments within the
Company. The reductions were part of an ongoing focus on low-cost operations and
administrative cost savings. The reductions included both salaried and hourly
positions. In conjunction with the reductions, the Company recorded a charge
against earnings of approximately $1.9 million in the fourth quarter of fiscal
2005, primarily comprising employee termination benefits. The majority of this
amount was paid in fiscal 2006.

Other Income, net: On February 2, 2006, a fire damaged a storage building used
as part of the Company's manufacturing facility in Waseca, Minnesota. The
building contained harvesting equipment and seed inventory. All material costs
to clean-up the site, replace the building, and replace the damaged equipment
and inventory are covered under insurance policies maintained by the Company.
During the third quarter of fiscal 2006, the Company recorded a receivable of
approximately $1.5 million based on replacement values of the property damaged.
During the fourth quarter of fiscal 2006, the Company received $0.7 million of
insurance proceeds. All remaining proceeds were received in the first quarter of
fiscal 2007. In accordance with FASB Interpretation No. 30, "Accounting for
Involuntary Conversions of Non-Monetary Assets to Monetary Assets-An
Interpretation of APB Opinion No. 29", the Company recorded a gain of
approximately $0.7 million within other income in the Company's Consolidated
Statement of Operations, Accumulated Earnings and Comprehensive Income for the
year ended June 24, 2006. The gain represents the difference between the total
insurance amount, net of a $0.5 million deductible, and the carrying value of
the assets destroyed.

During the second quarter of fiscal 2006, the Company committed to a plan to
donate certain idle property in Sodus, Michigan. In conjunction with this
transaction, the Company recorded contribution expense based on the fair value
of the property of approximately $0.6 million in continuing operations in the
Consolidated Statements of Operations, Accumulated Earnings, and Comprehensive
Income. The donation was completed in January 2006.

During the second quarter of fiscal 2005, management renegotiated one of its
third-party warehousing leases. This resulted in recognition of a $2.2 million
pretax benefit due to the elimination of an unfavorable lease commitment that
was recorded in purchase accounting in fiscal 2003.

During the third quarter of fiscal 2005, the Company resolved an outstanding
business and occupation tax issue with the State of Washington. This resulted in
recognition of a $1.1 million pretax benefit due to elimination of a
preacquisition contingency that was recorded in purchase accounting in fiscal
2003.

Operating Income: Operating income was $57.7 million in fiscal 2006, a decrease
of $3.1 million as compared to $60.8 million in fiscal 2005. The decline is
attributable to those factors discussed above. Operating results of the brand
frozen business were impacted by launch costs associated with Birds Eye
Steamfresh and contributed to the decline of $3.7 million in the current year.
Operating results of the brand dry and non-brand segments increased $5.2 million
and $0.4 million, respectively. Further segment variances are highlighted below
in the "Segment Review."

Interest Expense: Interest expense was $32.9 million in fiscal 2006, an increase
of $4.4 million compared to $28.5 million in fiscal 2005. Interest expense was
unfavorably impacted by a general increase in interest rates partially offset by
lower average borrowings on the Company's revolving credit facility.

Tax Provision: The provision for income taxes for fiscal 2006 was $9.8 million
compared to a provision for income taxes of $12.1 million in the fiscal 2005
period. This decrease was a result of the reduction in the Company's pre-tax
earnings. The Company has not experienced any significant changes in its
consolidated effective tax rate. See NOTE 10 to the "Notes to Consolidated
Financial Statements" for additional disclosures regarding the Company's
provision for income taxes and its effective tax rate.

                                       16



<PAGE>


Discontinued Operations, net of tax: On August 23, 2005, Birds Eye Foods entered
into and completed transactions under a Stock Purchase Agreement (the "Sale
Agreement") with Congelados Don Jose S.P.R. de R.L. ("CDJ") pursuant to which
CDJ acquired a manufacturing facility in Celaya, Mexico utilized by Birds Eye
Foods for the production of various frozen vegetables. The transactions included
the sale of the stock of Birds Eye de Mexico, S.A. de C.V. ("BEMSA"), a wholly
owned subsidiary of Birds Eye Foods and BEMSA Holding, Inc., and all of the
equipment of Birds Eye Foods located at the BEMSA facility in Celaya, Mexico. In
the fourth quarter of fiscal 2005, the Company designated BEMSA and all of the
equipment located at the Celaya, Mexico plant as held-for-sale assets and
adjusted the carrying value to fair value less the estimated costs to sell, and
recorded an impairment charge of $1.6 million (after-tax). The final accounting
for the sale as of the closing date resulted in an additional charge of $0.3
million (after-tax) in the first quarter of fiscal 2006.

Net Income: Net income for fiscal 2006 was $14.7 million compared to net income
of $18.6 million in fiscal 2005. The decrease is the result of the factors
outlined above.

                                 SEGMENT REVIEW

In fiscal 2006, a detailed accounting of the significant reasons for changes in
net sales and operating income by segment is outlined below.

Brand Frozen: The Company's brand frozen net sales were $405.0 million, an
increase of $48.9 million or 13.7 percent as compared to net sales of $356.1
million in fiscal 2005. Contributing to this increase was the Company's launch
of Birds Eye Steamfresh during the second half of fiscal 2006. The Birds Eye
Steamfresh platform introduces an innovative method to steam vegetables in a
convenient and specially designed microwaveable bag. Birds Eye Steamfresh
combines patented steaming technology and fresh frozen vegetables to deliver
taste, quality and convenience to consumers. Improvements within other Birds Eye
product lines as a result of enhanced product formulas, product line extensions,
revised packaging and greater promotional effectiveness also contributed to the
increase in net sales. The Company's Birds Eye Voila! product line also showed
volume increases in fiscal 2006, benefiting from revised pricing strategies. The
Company's acquisition of C&W on September, 23, 2004 provided approximately one
quarter of additional sales in fiscal 2006.

The Company tracks retail sales in many of the categories in which it competes
using data from Information Resources, Inc. ("IRI"). IRI data is limited,
however, as IRI does not capture sales at several of the Company's customers
including Wal-Mart, Costco, and others. IRI also does not track non-brand or
store brand retail sales by the manufacturer. According to IRI, the frozen
vegetable category on a unit basis declined 1.7 percent for the 52-week period
ending June 18, 2006. The Company's brand market share, however, on a unit basis
for the 52-week period ending June 18, 2006 increased to 20.8 percent as
compared to 19.5 percent for the 52-week period ending June 19, 2005. This
improvement was lead by the Birds Eye Steamfresh launch and the improvements
benefiting net sales as highlighted above. The bagged meal category for the
52-week period ending June 18, 2006 increased 6.6 percent on a unit basis.
Market share on a unit basis for the Company's Birds Eye Voila! bagged meal
product offering for the 52-week period ending June 18, 2006 was 15.8 percent
compared to 17.1 percent for the 52-week period ending June 19, 2005. The
inclusion of new entries into the bagged meal category have resulted in negative
comparisons on a unit share basis.

Brand frozen operating income was $44.1 million for fiscal 2006, a decline of
$3.7 million, as compared to $47.8 million in fiscal 2005. While the brand
frozen segment was positively impacted by net sales improvements highlighted
above, operating income was impacted by launch costs and marketing support costs
incurred during the second half of fiscal 2006 in conjunction with the Birds Eye
Steamfresh product line. In addition, the Company experienced product cost
increases during fiscal 2006 consistent with that experienced throughout the
industry as a result of energy, fuel and transportation costs and employee
benefit related expenses.

Brand Dry: Brand dry net sales were $212.7 million in fiscal 2006, an increase
of $9.3 million or 4.6 percent as compared to net sales of $203.4 million in
fiscal 2005. The increase was primarily attributable to distribution growth
achieved by the Company's snack food business.

Operating income for the brand dry segment was $36.7 million in fiscal 2006,
representing an increase of $5.2 million from $31.5 million in fiscal 2005.
Operating income benefited from the management of various spending activities.

Non-brand: Non-brand net sales were $310.1 million in fiscal 2006, an increase
of $10.9 million or 3.6 percent as compared to $299.2 million in fiscal 2005.
The growth in revenue was primarily attributable to volume increases in the
store brand market and industrial channels. Non-brand operating results showed a
loss of $18.5 million for fiscal 2006, a $0.4 million improvement as compared to
an operating loss of $18.9 million in fiscal 2005. To mitigate product cost
increases also experienced within this segment of the business, pricing actions,
continued efforts to rationalize product offerings and reductions in various
overhead costs were a focus during fiscal 2006. See further discussion at "Exit
Activities" below regarding the non-brand frozen business.

As highlighted above, IRI data does not track the Company's non-brand or store
brand retail sales. Including management's estimate of the Company's share of
the store brand market, the Company believes its overall market share on a unit
basis in the frozen

                                       17



<PAGE>


vegetable category for the 52-week period ending June 18, 2006 increased to 32.6
percent compared to 31.4 percent for the 52-week period ending June 19, 2005.

Exit activities: On July 25, 2006, the Company announced that it will
concentrate its resources on its brand businesses and increase its focus on new
products and marketing. As a result, the Company will be exiting from the vast
majority of its non-brand frozen business over the next 12 to 18 months, and
plans to sell five related production facilities. The non-brand frozen business,
with its lower margins, utilized resources which now can be freed up to drive
brand growth and to compete more aggressively with competitors who are not
producing non-brand frozen items.

The impacted facilities include: Brockport, Bergen and Oakfield, NY; Fairwater
WI; and Montezuma, GA. In total, these facilities employ approximately 740
full-time workers. Any facility not sold after its related production season in
fiscal 2007 will be closed between October 2006 and June 2007. In addition, the
decision to exit the non-brand frozen business will affect a number of
administrative positions in offices in Rochester, N.Y. and Green Bay, Wisconsin.
The Company's research and development facility will remain in Green Bay.

Another impact of this decision will be the closure of the Birds Eye Foods
facility in Watsonville, CA at the end of the 2006 calendar year. This facility
employs approximately 550 workers. The closure of the Watsonville facility will
result in the Company incurring approximately $3.5 million for employee
termination benefits during fiscal 2007. In addition, Birds Eye Foods will incur
a pension withdrawal liability of approximately $1.0 million to $1.5 million for
the Company's unfunded benefit obligation related to the Western Conference of
Teamsters Pension Trust multiemployer plan.

In connection with these actions, the Company expects to take additional cash
and non-cash accounting charges. The Company anticipates incurring employee
termination benefits, environmental remediation costs associated with facility
closures and sales, accelerated depreciation, inventory markdowns, contract and
lease termination costs, and other exit costs. In addition, the Company may
incur asset impairment charges related to the impacted non-branded frozen
facilities. Currently, the Company is unable to make a determination of an
estimate or a range of estimates of these charges, individually or in the
aggregate.

                     CHANGES FROM FISCAL 2004 TO FISCAL 2005

Net Sales: Net sales were $858.7 million in fiscal 2005, an increase of $15.3
million, or 1.8 percent, as compared to net sales of $843.4 million in fiscal
2004. This increase is primarily attributable to the net sales of C&W subsequent
to its acquisition on September 23, 2004, offset by volume declines in selected
product lines of the Company as a result of pricing activities and competitive
actions. In addition, a decline in non-brand product sales resulted from
management's continuing efforts to rationalize product offerings with lower
margins. The "Segment Review" below outlines further details.

Gross Profit: Gross profit was $181.0 million in fiscal 2005, a decrease of $9.5
million or 5.0 percent as compared to $190.5 million in fiscal 2004. The
Company's gross profit margin decreased to 21.1 percent from 22.6 percent in the
prior year period. While C&W improved the Company's profit margin through its
value added product offerings, results for many of the Company's other product
lines were negatively impacted by higher manufacturing and component costs.

Selling, Administrative and General Expenses: Selling, administrative and
general expenses were $120.6 million in fiscal 2005 an increase of $8.4 million
or 7.5 percent, as compared to $112.2 million in fiscal 2004. The increase is
primarily attributable to the Company's acquisition of C&W and increased
consumer marketing and other brand building initiatives within the brand frozen
segment.

Asset Impairment Charge: In the third quarter of fiscal 2005, the Company
determined that the current real estate market conditions in the Green Bay,
Wisconsin area had resulted in the impairment of its closed Green Bay
manufacturing facility. In accordance with SFAS No. 144, the Company recorded an
impairment charge of $1.0 million to write-down the carrying value of the Green
Bay manufacturing facility to fair value. The Green Bay manufacturing facility
was closed in conjunction with the Company's sale of its brand canned vegetable
businesses.

Restructuring: On June 15, 2005, the Company announced the elimination of
approximately 45 positions from various locations and departments within the
Company. The reductions were part of an ongoing focus on low-cost operations and
administrative cost savings. The reductions included both salaried and hourly
positions. In conjunction with the reductions, the Company recorded a charge
against earnings of approximately $1.9 million in the fourth quarter of fiscal
2005, primarily comprising employee termination benefits. The majority of this
amount was paid in fiscal 2006.

Other Income, net: During the second quarter of fiscal 2005, management
renegotiated one of its third-party warehousing leases. This resulted in
recognition of a $2.2 million pretax benefit due to the elimination of an
unfavorable lease commitment that was recorded in purchase accounting in fiscal
2003.

                                       18



<PAGE>


In addition, during the third quarter of fiscal 2005, the Company resolved an
outstanding business and occupation tax issue with the State of Washington. This
resulted in recognition of a $1.1 million pretax benefit due to elimination of a
preacquisition contingency that was recorded in purchase accounting in fiscal
2003.

Operating Income: Operating income was $60.8 million in fiscal 2005, a decrease
of $17.5 million as compared to $78.3 million in fiscal 2004. The decline is
attributable to those factors discussed above. Decreases in operating results
within the brand frozen, brand dry, and non-brand segments were $9.9 million,
$3.2 million, and $4.8 million, respectively. The significant reasons for
changes in the Company's operating income are highlighted below in the "Segment
Review."

Interest Expense: Interest expense was $28.5 million in fiscal 2005, a decrease
of $2.8 million compared to $31.3 million in fiscal 2004. This decline was the
result of the Company's repayment of $150.0 million of its 11 7/8 percent Senior
Subordinated Notes in the fiscal 2004 period, partially offset by increased
interest expense incurred in fiscal 2005 to finance the acquisition of C&W and a
general increase in interest rates.

Loss on Early Extinguishment of Debt: On November 24, 2003, the Company repaid
$150.0 million of its 11 7/8 percent Senior Subordinated Notes. In conjunction
with this repayment, a pre-tax loss on early extinguishment of debt of $4.0
million was recorded in the second quarter of fiscal 2004. This amount reflects
the payment of the $8.9 million call premium and other transaction expenses less
the related unamortized premium of $4.9 million recorded in conjunction with the
August 19, 2002 Transaction.

Tax Provision: The provision for income taxes for fiscal 2005 was $12.1 million
compared to a provision for income taxes of $15.4 million in the fiscal 2004
period. This decrease was a result of the reduction in the Company's pre-tax
earnings. The Company has not experienced any significant changes in its
consolidated effective tax rate. See NOTE 10 to the "Notes to the Consolidated
Financial Statements" for additional disclosures regarding the Company's
provision for income taxes and its effective tax rate.

Discontinued Operations, net of tax: On August 23, 2005, Birds Eye Foods entered
into and completed the transactions under a Sale Agreement with CDJ pursuant to
which CDJ acquired a manufacturing facility in Celaya, Mexico utilized by Birds
Eye Foods for the production of various frozen vegetables. The transactions
included the sale of the stock of BEMSA, a wholly owned subsidiary of Birds Eye
Foods and BEMSA Holding, Inc., and all of the equipment of Birds Eye Foods
located at the BEMSA facility in Celaya, Mexico. In the fourth quarter of fiscal
2005, the Company designated BEMSA and all of the equipment located at the
Celaya, Mexico plant as held-for-sale assets and adjusted the carrying value to
fair value less the estimated costs to sell, which resulted in an impairment
charge of approximately $1.6 million (after-tax).

On May 1, 2004, the Company sold its Freshlike canned vegetable business to
Allen Canning Company. This sale did not impact frozen products carrying the
Freshlike brand name. The Company recognized a gain of approximately $3.8
million (after-tax) within discontinued operations in the fourth quarter of
fiscal 2004 as a result of this transaction. Also included in discontinued
operations in fiscal 2004 are the operating results of the Freshlike canned
vegetable business prior to sale. The Freshlike canned vegetable business was
previously reported in the brand dry segment.

Net Income: Net income for fiscal 2005 was $18.6 million compared to net income
of $31.9 million in fiscal 2004. The decrease is the result of the factors
outlined above.

                                 SEGMENT REVIEW

A detailed accounting of the significant reasons for changes in net sales and
operating income by segment is outlined below.

Brand Frozen: Brand frozen net sales were $356.1 million in fiscal 2005, an
increase of $22.1 million or 6.6 percent as compared to net sales of $334.0
million in fiscal 2004. Net sales for C&W subsequent to its acquisition on
September 23, 2004 accounted for $34.2 million of the Company's increase in net
sales. In addition, the Company's revitalization efforts within its Birds Eye
Voila! product category drove net sales improvements of $8.9 million. These
increases were offset by declines within several other Birds Eye branded frozen
vegetable product categories and several of the Company's regional product
lines, as a result of pricing actions and competitive activities. To offset
higher product costs, the Company increased its list prices in many categories.
In some instances, price gaps developed versus competitors and volume softened.
The Company has subsequently modified its trade promotion strategy to drive
effectiveness and return to historic volume levels.

The Company tracks retail sales in many of the categories in which it competes
using data from Information Resources, Inc. ("IRI"). IRI data is limited,
however, as IRI does not capture sales at several of the Company's customers
including Wal-Mart, Costco, and others. IRI also does not track non-brand or
store brand retail sales by the manufacturer. According to IRI, the frozen
vegetable category on a unit basis declined 1.1 percent for the 52-week period
ending June 19, 2005. The Company's branded market share (including C&W for all
periods) on a unit basis for the 52-week period ending June 19, 2005 was 19.5
percent compared to 20.9 percent for the 52-week period ending June 20, 2004.
The bagged meal category for the 52-week period ending June 19, 2005 increased
30.5 percent on a unit basis. On a unit sales basis, the Birds Eye Voila! bagged
meal product offering for the 52-week

                                       19



<PAGE>


period ending June 19, 2005 showed growth of 20.4 percent. Market share on a
unit basis for the Company's Birds Eye Voila! bagged meal product offering for
the 52-week period ending June 19, 2005 was 17.1 percent compared to 18.5
percent for the 52-week period ending June 20, 2004. The inclusion of new
entries into the bagged meal category have resulted in negative comparisons for
existing brands on a unit share basis.

Brand frozen operating income was $47.8 million in the fiscal 2005 period, a
decline of $9.9 million, as compared to $57.7 million in fiscal 2004. While the
brand frozen segment was positively impacted by the operating income of C&W
subsequent to its acquisition, the volume declines highlighted above, along with
significantly increased products costs, have negatively impacted earnings.

Brand Dry: Brand dry net sales were $203.4 million in fiscal 2005, which is
consistent with net sales of $202.4 million in fiscal 2004.

Operating income for the brand dry segment was $31.5 million for fiscal 2005,
representing a decline of $3.2 million from $34.7 million in fiscal 2004.
Significant cost increases in employee benefits, meat, edible oils, steel and
various commodities used in the brand dry segment have negatively impacted
operating income. The Company has focused on purchasing opportunities and
innovative merchandising to enhance profitability of the brands within this
segment.

Non-brand: Non-brand net sales were $299.2 million in fiscal 2005, a decline of
$7.8 million or 2.5 percent as compared to $307.0 million in fiscal 2004. This
decline is primarily attributable to a reduction in food service and industrial
sales. Reduced crop intake during the summer of 2004 resulted in less inventory
available to be sold in the industrial channel. In addition, during fiscal 2005
the Company experienced a decline in net sales under an industrial co-pack
agreement. Industrial and co-pack sales typically yield lower margins than the
Company's other product lines.

The operating loss for the non-brand segment was $18.9 million for fiscal 2005
as compared to a loss of $14.1 million in fiscal 2004. This increase in
operating loss was attributable to the decline in net sales highlighted above
and increased product costs consistent with that experienced in the Company's
other operating segments.

See further discussion at "Exit Activities" within the changes from fiscal 2005
to fiscal 2006 segment review regarding the Company's non-brand frozen business.

As highlighted above, IRI data does not track the Company's non-brand or store
brand retail sales. Including management's estimate of the Company's share of
the store brand market, the Company believes its overall market share on a unit
basis in the frozen vegetable category (including C&W for all periods) for the
52-week period ending June 19, 2005 was 31.4 percent compared to 32.4 percent
for the 52-week period ending June 20, 2004.

                          CRITICAL ACCOUNTING POLICIES

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

The following are considered to be the Company's more critical estimates and
assumptions used in the preparation of the consolidated financial statements.

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

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

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

                                       20



<PAGE>


Identifiable Intangible Assets, Long-Lived Assets, and Goodwill: The Company
assesses the carrying value of its identifiable intangible assets and long-lived
assets, whenever events or changes in circumstances indicate that the carrying
amount of the underlying asset may not be recoverable. Certain factors which may
occur and indicate that an impairment exists include, but are not limited to:
significant under performance relative to historical or projected future
operating results; significant changes in the manner of the Company's use of the
underlying assets; and significant adverse industry or market trends. The
Company tests goodwill and trademarks for impairment on an annual basis. In the
event that the carrying values of assets are determined to be impaired, the
Company would record an adjustment to the respective carrying value.

Self - insurance Programs: The Company records estimates for certain health and
welfare and workers' compensation costs that are provided for under self-insured
programs. Should a greater amount of claims occur compared to what was estimated
or should costs of medical care increase beyond what was anticipated, reserves
recorded may not be sufficient and additional costs could be incurred.

Promotional Activities: The Company's promotional activities are conducted
either through the retail trade channel or directly with consumers and involve
in-store displays; feature price discounts on the Company's products; consumer
coupons; and similar activities. The costs of these activities are generally
recognized at the time the related revenue is recorded, which normally precedes
the actual cash expenditure. The recognition of these costs therefore requires
management's judgment regarding the volume of promotional offers that will be
redeemed by either the retail trade channel or consumer. These estimates are
made using various techniques including historical data on performance of
similar promotional programs. Differences between estimated expense and actual
redemptions are normally insignificant and recognized as a change in management
estimate in a subsequent period. However, the likelihood exists of materially
different reported results if different assumptions or conditions were to
prevail.

Income Taxes: The Company computes its annual tax rate based on the statutory
rates and tax planning opportunities available to it in the various
jurisdictions in which it earns income. Significant judgment is required in
determining the Company's annual tax rate and in evaluating its tax positions.
The Company establishes reserves when it becomes probable that a tax return
position that it considers supportable may be challenged and that the Company
may not succeed in completely defending the challenge. The Company adjusts these
reserves in light of changing facts and circumstances. The Company's annual tax
rate includes the impact of reserve provisions and changes to reserves. While it
is often difficult to predict the final outcome or the timing of resolution of
any particular tax matter, the Company believes that its reserves reflect the
probable outcome of known tax contingencies. Favorable resolution would be
recognized as a reduction to the Company's annual tax rate in the year of
resolution. The Company's tax reserves are presented in the balance sheet
principally within income taxes refundable and income taxes payable.

The Company records valuation allowances to reduce deferred tax assets to the
amount that is more likely than not to be realized. When assessing the need for
valuation allowances, the Company considers future taxable income and ongoing
prudent and feasible tax planning strategies. Should a change in circumstances
lead to a change in judgment about the realizability of deferred tax assets in
future years, the Company would adjust related valuation allowances in the
period that the change in circumstances occurs, along with a corresponding
increase or charge to income.

Retirement Benefits: The Company sponsors pension and other retirement plans in
various forms covering employees who meet eligibility requirements. Several
statistical and other factors that attempt to anticipate future events are used
in calculating the expense and liability related to the plans. These factors
include assumptions about the discount rate, expected return on plan assets and
rate of future compensation increases as determined by the Company with the
assistance of actuarial consultants, within certain guidelines. The discount
rate assumptions used to value pension and postretirement benefit obligations
reflect yields on high quality long-term bonds.

Over time, the expected rate of return on pension plan assets should approximate
the actual long-term returns. In developing the expected rate of return, the
Company considers expected returns on risk-free investments (primarily
government bonds), the historical level of the risk premium associated with the
other asset classes in which the portfolio is invested and the expectations for
future returns of each asset class. The expected return for each asset class is
weighted based on the target asset allocation to develop the expected long-term
rate of return on assets assumption.

In addition, the Company's actuarial consultants use subjective factors such as
mortality rates to estimate the expense and liability related to these plans.
The actuarial assumptions used by the Company may differ materially from actual
results due to changing market and economic conditions, or longer or shorter
life spans of participants. These differences may result in a significant impact
to the amount of pension or postretirement benefit expense recorded by the
Company.

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<PAGE>


                         LIQUIDITY AND CAPITAL RESOURCES

The following discussion highlights the major variances in the Consolidated
Statement of Cash Flows for fiscal 2006 compared to fiscal 2005.

Net cash provided by operating activities was $55.0 million in fiscal 2006, a
decrease of $8.2 million as compared to net cash provided by operating
activities of $63.2 million in fiscal 2005. The decline is primarily
attributable to a voluntary contribution of $10.9 million made by the Company to
its Master Salaried and Hourly Retirement plans in the first quarter of fiscal
2006 compared to $1.6 million in fiscal 2005. See NOTE 11 to the "Notes to
Consolidated Financial Statements" for additional disclosures regarding pension
benefits. The decrease in net cash provided by operating activities was also
impacted by the timing of the liquidation of outstanding accounts payable and
other accrued liabilities as well as the timing of sales and collections. These
declines were offset by an increase in cash from inventories (including prepaid
manufacturing) as a result of management efforts to reduce inventory balances.

Net cash used in investing activities was $4.0 million in fiscal 2006 compared
to net cash used in investing activities of $86.6 million in fiscal 2005,
representing a change of $82.6 million. On September 23, 2004, the Company
completed the acquisition of C&W, which accounted for the majority of the
variance in cash used for investing activities. The acquisition of C&W was
financed by borrowings on the Company's Revolving Credit Facility defined below.
See NOTE 3 to "the Notes to Consolidated Financial Statements" for additional
disclosure regarding the acquisition of C&W. Capital expenditures were $8.8
million in fiscal 2006 compared to $16.5 million in fiscal 2005. The purchase of
property, plant and equipment was for general operating purposes and is
considered adequate to maintain the Company's facilities in proper working
order.

Net cash used in financing activities for fiscal 2006 was $13.1 million, as
compared to net cash used of $13.5 million in fiscal 2005, representing a change
of $0.4 million. This change was primarily driven by Birds Eye Holdings Inc.'s
investment of approximately $0.5 million in fiscal 2006 compared to $0.1 million
in fiscal 2005.

Senior Credit Facility: Birds Eye Foods and certain of its subsidiaries have a
senior secured credit facility (the "Senior Credit Facility") in the amount of
$470.0 million with a syndicate of banks and other lenders arranged and managed
by JPMorgan Chase Bank ("JPMorgan Chase Bank"), as administrative agent. The
Senior Credit Facility is comprised of (i) a $200.0 million senior secured
revolving credit facility (the "Revolving Credit Facility") and (ii) a $270.0
million senior secured B term loan (the "Term Loan Facility"). The Revolving
Credit Facility matures in August 2007, and allows up to $40.0 million to be
available in the form of letters of credit. The Company anticipates the Senior
Credit Facility will be refinanced prior to maturity.

As of June 24, 2006, (i) there were no cash borrowings outstanding under the
Revolving Credit Facility, (ii) there were $23.7 million in letters of credit
outstanding, and (iii) availability under the Revolving Credit Facility, after
taking into account the amount of letters of credit outstanding, was $176.3
million. The Company believes that the cash flow to be generated by operations
and the amounts available under the Revolving Credit Facility provide adequate
liquidity to fund working capital needs and capital expenditures. In addition,
the Company believes its decision to exit the non-brand frozen business, as
previously discussed, will result in reduced inventory levels and lower seasonal
Revolving Credit Facility borrowings.

The Senior Credit Facility bears interest at the Company's option, at a base
rate or LIBOR, plus, in each case, an applicable percentage. The appropriate
applicable percentage corresponds to the Company's Consolidated Leverage Ratio,
as defined by the senior credit agreement, (the "Senior Credit Agreement") and
is adjusted quarterly based on the calculation of the Consolidated Leverage
Ratio. As of June 24, 2006, the Senior Credit Facility bears interest in the
case of base rate loans at the Base Rate, as defined in the Senior Credit
Agreement, plus (i) 1.25 percent for loans under the Revolving Credit Facility,
and (ii) 1.75 percent for loans under the Term Loan Facility or in the case of
LIBOR loans at LIBOR plus (i) 2.25 percent for loans under the Revolving Credit
Facility and (ii) 2.75 percent for loans under the Term Loan Facility. As of
June 24, 2006, the interest rate under the Term Loan Facility was approximately
7.75 percent. The unused commitment fee is 0.375 percent on the daily average
unused commitment under the Revolving Credit Facility and also varies based on
the Company's Consolidated Leverage Ratio.

The Term Loan Facility requires payments in quarterly installments in the amount
of $675,000 until September 30, 2007. Beginning December 31, 2007, the quarterly
payments are approximately $64.1 million. The Term Loan Facility matures in
August 2008 upon which the balance will be due. The Term Loan Facility is also
subject to mandatory prepayments under various scenarios as defined in the
Senior Credit Agreement. Provisions of the Senior Credit Agreement require that
annual payments, within 105 days after the end of each fiscal year, in the
amount of "excess cash flow" as defined in the Senior Credit Agreement, be
utilized to prepay the Term Loan Facility at an applicable percentage that
corresponds to the Company's Consolidated Leverage Ratio. The excess cash flow
amount is based in part on the Company's operating income during the year less
capital expenditures and cash interest.

                                       22



<PAGE>


The Term Loan Facility was subject to the following amortization schedule at
June 24, 2006, and includes an estimated $8.6 million of "excess cash flow" to
be paid on or before October 6, 2006.

(Dollars in Millions)

               Fiscal Year                           Term Loan B
               -----------                           -----------
                   2007                              $      11.3
                   2008                                    129.6
                   2009                                    106.6
                                                     -----------
                                                     $     247.5
                                                     ===========

The Senior Credit Facility contains customary covenants and restrictions on the
Company's activities, including but not limited to: (i) limitations on the
incurrence of indebtedness; (ii) limitations on sale-leaseback transactions,
liens, investments, loans, advances, guarantees, acquisitions, asset sales, and
certain hedging agreements; and (iii) limitations on transactions with
affiliates and other distributions. The Senior Credit Facility also contains
financial covenants requiring the Company to maintain a maximum average total
debt to EBITDA ratio (Consolidated Leverage Ratio) and a minimum EBITDA to
interest expense ratio (Interest Coverage Ratio). As of June 24, 2006, the
Company was in compliance with all covenants, restrictions, and requirements
under the terms of the Senior Credit Facility.

The Company's obligations under the Senior Credit Facility are collateralized by
a first priority lien on: (i) substantially all existing or after-acquired
assets, tangible or intangible, (ii) the capital stock of Birds Eye Foods and
its domestic subsidiaries, and (iii) 65% of the voting capital stock and 100% of
the non-voting capital stock in certain foreign subsidiaries. The Company's
obligations under the Senior Credit Facility are guaranteed by Birds Eye
Holdings Inc. ("Holdings Inc.") and certain of the Company's subsidiaries. See
NOTE 13 to the "Notes to Consolidated Financial Statements" for additional
disclosures regarding guarantees and indemnifications.

Effective May 27, 2005, the Company negotiated an amendment to its Senior Credit
Facility, which among other things, eliminates the Consolidated Senior Leverage
Ratio financial covenant and permits the use of revolving loans under the
Revolving Credit Facility to finance acquisitions if, after giving effect to the
acquisition(s), the pro forma Consolidated Senior Leverage Ratio is less than or
equal to 3.5 to 1.0.

During fiscal 2004, the Company negotiated an amendment to its Senior Credit
Facility. The amendment provided the Company with the ability to repay $150.0
million of its Senior Subordinated Notes which occurred in November 2003. See
"Senior Subordinated Notes - 11 7/8 Percent (due 2008)" below. In addition,
provided the satisfaction of certain conditions, the amendment permits repayment
of the balance of the Senior Subordinated Notes prior to maturity.

Senior Subordinated Notes - 11 7/8 Percent (due 2008): In fiscal 1999, the
Company issued Senior Subordinated Notes (the "Notes") for $200.0 million
aggregate principal amount due November 1, 2008. As of June 24, 2006, Birds Eye
Foods had $50.0 million aggregate principal amount outstanding of its $200.00
million 11 7/8 percent Senior Subordinated Notes, due 2008.

Interest on the Notes accrues at the rate of 11 7/8 percent per annum and is
payable semiannually in arrears on May 1 and November 1.

The Notes represent general unsecured obligations of the Company, subordinated
in right of payment to certain other debt obligations of the Company (including
the Company's obligations under the Senior Credit Facility). The Company's
obligations under the Notes are guaranteed by Kennedy Endeavors, Incorporated
and Linden Oaks Corporation (wholly-owned subsidiaries of the Company) and by
Pro-Fac. See NOTE 13 to the "Notes to Consolidated Financial Statements" for
additional disclosures regarding guarantees and indemnifications.

The Notes contain customary covenants and restrictions on the Company's ability
to engage in certain activities, including, but not limited to: (i) limitations
on the incurrence of indebtedness and liens; (ii) limitations on consolidations,
mergers, sales of assets, transactions with affiliates; and (iii) limitations on
dividends and other distributions. The Company is in compliance with all
covenants, restrictions, and requirements under the Notes.

The Company, its principal shareholders, or their affiliates may, from
time-to-time, enter the market to purchase or sell Notes in compliance with any
applicable securities laws.

                                       23



<PAGE>


Contractual Obligations: The following table summarizes the Company's future
obligations under contracts as of June 24, 2006.

(Dollars in Millions)

<TABLE>
<CAPTION>
   Contractual Obligations                          Payments due by period
                                            Less than 1                           More than 5
                                   Total        year      1-3 years   3-5 years      years
                                 ------------------------------------------------------------
<S>                              <C>        <C>           <C>         <C>         <C>
Long-Term Debt(1)                $  297.5   $      11.3   $   286.2   $     0.0   $       0.0
Capital Lease Obligations             2.5           0.9         1.5         0.1           0.0
Operating Leases                     44.2          10.2        16.1        12.7           5.2
Purchase Obligations(2,3)           607.2         207.3       120.0        97.3         182.6
Other Long-Term Liabilities(4)       55.9          14.7        22.9         3.6          14.7
                                 ------------------------------------------------------------
Total                            $1,007.3   $     244.4   $   446.7   $   113.7   $     202.5
                                 ========   ===========   =========   =========   ===========
</TABLE>

(1) "Long-Term Debt" includes principal amounts due under the Company's Senior
Subordinated 11 7/8 percent Notes and the Term Loan Facility. Interest expense
related to long-term debt is estimated to be as follows: less than 1 year, $25.2
million; 1-3 years $17.1 million and 3-5 years $0 million. The Term Loan
Facility is variable by its terms and interest was estimated utilizing the 7.75
percent interest rate on the Term Loan Facility at June 24, 2006.

(2) A "Purchase Obligation" is defined as an agreement to purchase goods or
services that is enforceable and legally binding on the Company and that
specifies all significant terms, including: fixed or minimum quantities to be
purchased; fixed, minimum or variable price provisions; and the approximate
timing of the transaction. Purchase Obligations include outstanding purchase
orders of the Company for raw materials, packaging and other ingredients.
Purchase Obligations which outline quantities that vary based on production
needs cannot be reasonably estimated at this time. The total does not include
accounts payable recorded on the consolidated balance sheet as of June 24, 2006.

(3) Amounts shown within Purchase Obligations in the less than one year category
include estimated raw product purchases of $40.0 million under the Amended and
Restated Marketing and Facilitation Agreement. As estimates of the ongoing
purchases from Pro-Fac cannot be determined at this time, the maximum penalty
due upon termination has been included in the 1-3 years category.

(4) This category includes the non-current liabilities reflected on the June 24,
2006 consolidated balance sheet for pension, other postretirement benefits,
non-qualified 401(k) benefits, deferred directors' fees and Pro-Fac termination
payments due under the Termination Agreement. Payments to the Company's pension
trusts are reflected through April, 2009. Estimates beyond that date are not
currently available.

OTHER MATTERS:

Capital Expenditures: The Company anticipates that capital expenditures for
fiscal years 2007 and 2008 will be approximately $10.0 million per annum. The
Company believes that cash flow from operations and borrowings under the
Company's Senior Credit Facility will be sufficient to meet its liquidity
requirements for the foreseeable future.

Supplemental Information on Inflation: The changes in costs and prices within
the Company's business due to inflation were not significantly different from
inflation in the United States economy as a whole, which has not been
significant.

New Accounting Pronouncements: In July 2006, the Financial Accounting Standards
Board ("FASB") issued FASB Interpretation No. 48, "Accounting for Uncertainty in
Income Taxes." The Interpretation clarifies the way companies are to account for
uncertainty in income tax reporting and filings and prescribes a consistent
recognition threshold and measurement attribute for recognizing, derecognizing,
and measuring the tax benefits of a tax position taken, or expected to be taken,
on a tax return. The Interpretation is effective for fiscal years beginning
after December 15, 2006. The Company is currently evaluating the effect that
FASB Interpretation No. 48 will have on the Company's results of operations,
cash flows, or financial condition.

In May 2005, the FASB issued Statement of Financial Accounting Standards
("SFAS") No. 154, Accounting Changes and Error Corrections. SFAS No. 154
replaces APB No. 20, Accounting Changes, and SFAS No. 3, Reporting Accounting
Changes in Interim Financial Statements, and establishes retrospective
application as the required method for reporting a change in accounting
principle. SFAS No. 154 provides guidance for determining whether retrospective
application of a change in accounting principle is impracticable and for
reporting a change when retrospective application is impracticable. The
reporting of a correction of an error by restating previously issued financial
statements is also addressed. SFAS No. 154 is effective for accounting changes
and corrections of errors made in fiscal years beginning after December 15,
2005. The Company does not anticipate that the adoption of SFAS No. 154 will
have a material effect on the Company's results of operations, cash flows, or
financial condition.

                                       24



<PAGE>


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

Commodity Prices: The Company is exposed to commodity price risk related to
forecasted purchases of corrugated (unbleached kraftliner) in its manufacturing
process. To mitigate this risk, the Company entered into a swap agreement on
December 12, 2005, which matures June 30, 2007. The swap agreement is designated
as a cash flow hedge of the Company's forecasted corrugated purchases. The swap
hedges approximately 40 percent of the Company's annual usage. The fair value of
the agreement is an after-tax gain of approximately $0.4 million recorded in
accumulated other comprehensive income in shareholder's equity.

                                                   Swap
                                          Corrugated Outstanding
                                          (Unbleached Kraftliner)
                                      ------------------------------
Notional amount                              12,000 short tons
Average paid rate                             $497/short ton
Average receive rate                  Floating rate/short ton - $553
Maturities through                               June 2007

To further mitigate this risk, the Company entered into another swap agreement
on February 17, 2006, which matures on June 30, 2007. The swap agreement is
designated as a cash flow hedge of the Company's forecasted corrugated
purchases. The swap hedges approximately 40 percent of the Company's annual
usage. The fair value of the agreement is an after-tax gain of approximately
$47,000 recorded in accumulated other comprehensive income in shareholder's
equity.

                                                   Swap
                                          Corrugated Outstanding
                                          (Unbleached Kraftliner)
                                      ------------------------------
Notional amount                              12,000 short tons
Average paid rate                             $546/short ton
Average receive rate                  Floating rate/short ton - $553
Maturities through                               June 2007

Interest Rate: The Company is also exposed to changes in interest rates. The
Company manages this risk by monitoring interest rates and future cash
requirements and evaluating opportunities to refinance borrowings at various
maturities and interest rates. At June 24, 2006, 83 percent of the Company's
debt carried interest rates that were periodically adjustable to the LIBOR rate,
and 17 percent carried interest at fixed rates. Based on debt outstanding at the
end of fiscal 2006, a hypothetical increase in interest rates of 100 basis
points would increase the Company's interest expense by approximately $2.6
million.

                                       25



<PAGE>


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

<TABLE>
<CAPTION>
                                                     INDEX TO FINANCIAL STATEMENTS

     ITEM                                                                                                                  Page
--------------                                                                                                             ----
<S>                                                                                                                        <C>
Birds Eye Foods, Inc. and Consolidated Subsidiaries:
   Report of Independent Registered Public Accounting Firm.............................................................     27
   Consolidated Statements of Operations and Comprehensive Income
     for the years ended June 24, 2006,  June 25, 2005 and June 26, 2004...............................................     28
   Consolidated Balance Sheets at June 24, 2006 and June 25, 2005......................................................     29
   Consolidated Statements of Cash Flows for the years ended June 24, 2006, June 25, 2005 and June 26, 2004............     30
   Consolidated Statements of Shareholder's Equity for the years ended June 24, 2006, June 25, 2005 and
     June 26, 2004.....................................................................................................     31
   Notes to Consolidated Financial Statements..........................................................................     32
</TABLE>

                                       26



<PAGE>


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholder
Birds Eye Foods, Inc.
Rochester, New York

We have audited the accompanying consolidated balance sheets of Birds Eye Foods,
Inc. and subsidiaries as of June 24, 2006 and June 25, 2005, and the related
consolidated statements of operations and comprehensive income, cash flows and
shareholder's equity for the years ended June 24, 2006, June 25, 2005 and June
26, 2004. Our audits also included the financial statement schedule listed in
the Index at Item 15. These financial statements and the financial statement
schedule are the responsibility of the Company's management. Our responsibility
is to express an opinion on the financial statements and financial statement
schedule based on our audits.

We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit includes consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Birds Eye Foods, Inc. and
subsidiaries at June 24, 2006 and June 25, 2005, and the results of their
operations and their cash flows for the years ended June 24, 2006, June 25, 2005
and June 26, 2004, in conformity with accounting principles generally accepted
in the United States of America. Also, in our opinion, such financial statement
schedule, when considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly, in all material respects the
information set forth therein.

/s/ Deloitte & Touche LLP

Rochester, New York
September 14, 2006

                                       27



<PAGE>


                              FINANCIAL STATEMENTS

Birds Eye Foods, Inc.
Consolidated Statements of Operations and Comprehensive Income
(Dollars in Thousands)

<TABLE>
<CAPTION>
                                                                      Fiscal Years Ended
                                                              --------------------------------
                                                               June 24,   June 25,    June 26,
                                                                 2006       2005        2004
                                                              ---------   --------   ---------
<S>                                                           <C>         <C>        <C>
Net sales                                                     $ 927,797   $858,669   $ 843,398
Cost of sales                                                  (746,949)  (677,706)   (652,863)
                                                              ---------   --------   ---------
Gross profit                                                    180,848    180,963     190,535
Selling, administrative, and general expenses                  (118,486)  (120,565)   (112,208)
Asset impairment charge                                            (218)      (994)          0
Restructuring                                                    (4,492)    (1,940)          0
Other income, net                                                    86      3,288           0
                                                              ---------   --------   ---------
Operating income                                                 57,738     60,752      78,327
Loss on early extinguishment of debt                                  0          0      (4,018)
Interest expense                                                (32,936)   (28,456)    (31,326)
                                                              ---------   --------   ---------
Pretax income from continuing operations                         24,802     32,296      42,983
Tax provision                                                    (9,835)   (12,139)    (15,438)
                                                              ---------   --------   ---------
Income from continuing operations                                14,967     20,157      27,545
Discontinued operations, net of taxes                              (281)    (1,552)      4,322
                                                              ---------   --------   ---------
Net income                                                    $  14,686   $ 18,605   $  31,867
                                                              =========   ========   =========

Net income                                                    $  14,686   $ 18,605   $  31,867
Other comprehensive income/(loss):
   Minimum pension liability adjustment, net of taxes               538     (3,021)       (490)
   Unrealized gain/(loss) on hedging activity, net of taxes         335       (106)       (131)
                                                              ---------   --------   ---------
Comprehensive income                                          $  15,559   $ 15,478   $  31,246
                                                              =========   ========   =========
</TABLE>

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

                                       28



<PAGE>


Birds Eye Foods, Inc.
Consolidated Balance Sheets
(Dollars in Thousands, Except For Per Share Information)

<TABLE>
<CAPTION>
                                                    ASSETS

                                                                                      June 24,      June 25,
                                                                                        2006          2005
                                                                                    -----------   -----------
<S>                                                                                 <C>           <C>
Current assets:
   Cash and cash equivalents                                                        $    73,896   $    36,002
   Accounts receivable trade, net of allowances for doubtful accounts of
      $1,148 and $1,123, respectively                                                    61,932        60,208
   Accounts receivable, other                                                             5,730         4,011
   Income taxes refundable                                                                    0           269
   Inventories, net                                                                     187,484       196,287
   Current investment in CoBank                                                             331           383
   Prepaid manufacturing expense                                                         12,758        12,108
   Prepaid expenses and other current assets                                             10,451         9,696
   Held for sale assets                                                                     145         5,497
   Current deferred tax asset                                                             3,118         5,276
                                                                                    -----------   -----------
         Total current assets                                                           355,845       329,737
Investment in CoBank                                                                        132           719
Property, plant, and equipment, net                                                     175,459       191,637
Goodwill                                                                                 47,409        45,101
Trademarks and other intangible assets, net                                             219,554       222,496
Other assets                                                                              8,931        14,834
                                                                                    -----------   -----------
         Total assets                                                               $   807,330   $   804,524
                                                                                    ===========   ===========
                                   LIABILITIES AND SHAREHOLDER'S EQUITY

Current liabilities:
   Current portion of obligations under capital leases                              $       818   $       865
   Current portion of long-term debt                                                     11,304         2,700
   Current portion of Termination Agreement with Pro-Fac
      Cooperative, Inc.                                                                   9,668         9,455
   Accounts payable                                                                      65,383        78,597
   Income taxes payable                                                                     292             0
   Accrued interest                                                                       5,654         2,144
   Accrued employee compensation                                                         12,589         7,296
   Other accrued liabilities                                                             43,727        44,334
   Held for sale liabilities                                                                  0         2,014
   Growers payable due to Pro-Fac Cooperative, Inc.                                       7,668         8,395
                                                                                    -----------   -----------
         Total current liabilities                                                      157,103       155,800
Obligations under capital leases                                                          1,544         2,373
Long-term debt                                                                          286,900       298,548
Long-term portion of Termination Agreement with Pro-Fac
   Cooperative, Inc.                                                                          0         8,836
Other non-current liabilities                                                            64,177        67,228
Non-current deferred tax liability                                                       22,185        12,353
                                                                                    -----------   -----------
         Total liabilities                                                              531,909       545,138
                                                                                    -----------   -----------
Commitments and Contingencies (Notes 6 and 14)
Shareholder's Equity:

   Common stock, par value $.01; 11,000 shares authorized, issued and outstanding             0             0
   Additional paid-in capital                                                           203,291       202,815
   Accumulated earnings                                                                  85,914        71,228
   Accumulated other comprehensive income/(loss):
      Unrealized gain on hedging activity, net of taxes                                     446           111
      Minimum pension liability, net of taxes                                           (14,230)      (14,768)
                                                                                    ------------  -----------
         Total shareholder's equity                                                     275,421       259,386
                                                                                    -----------   -----------
         Total liabilities and shareholder's equity                                 $   807,330   $   804,524
                                                                                    ===========   ===========
</TABLE>

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

                                       29



<PAGE>


Birds Eye Foods, Inc.
Consolidated Statements of Cash Flows
(Dollars in Thousands)

<TABLE>
<CAPTION>
                                                                                 Fiscal Years Ended
                                                                          -------------------------------
                                                                          June 24,    June 25,   June 26,
                                                                            2006        2005       2004
                                                                          --------   ---------   --------
<S>                                                                       <C>        <C>         <C>
Cash Flows from Operating Activities:
   Net income                                                             $ 14,686   $  18,605   $ 31,867
   Adjustments to reconcile net income to net cash provided by
      operating activities -
      Asset impairment charge within discontinued operations                   454       2,508          0
      Asset impairment charge within continuing operations                     218         994          0
      Restructuring charge                                                   4,492           0          0
      Restructuring payments                                                  (949)          0          0
      Other income, net                                                        (86)     (3,288)         0
      Cash receipts from fire claim                                            213           0          0
      Amortization of certain intangible assets                              2,942       3,098      1,798
      Depreciation                                                          22,990      22,065     22,663
      Amortization of debt issue costs, amendment costs,
        and debt premiums                                                    6,726       6,985      7,330
      Gain on derivative instruments                                             0           2        389
      Gain on sale of Freshlike canned vegetable business within
        discontinued operations                                                  0           0     (6,263)
      (Gain)/loss on sale of property, plant and equipment                     (93)       (348)       217
      Loss on early extinguishment of debt                                       0           0      4,018
      Transitional Service Agreement with Pro-Fac Cooperative, Inc.              0         (70)      (525)
      Provision for deferred taxes                                           9,542      11,204     16,703
      Provision for losses on accounts receivable                              435         265        298
   Change in assets and liabilities
      Accounts receivable                                                   (3,091)      4,162     (5,892)
      Inventories and prepaid manufacturing expense                          6,845     (12,533)    17,365
      Income taxes payable/refundable                                          180        (918)     1,761
      Accounts payable and other accrued liabilities                        (7,411)      4,516      6,770
      Due from/to Pro-Fac Cooperative, Inc., net                              (726)        698       (721)
      Other assets and liabilities, net                                     (2,373)      5,214      7,187
                                                                          --------   ---------   --------
Net cash provided by operating activities                                   54,994      63,159    104,965
                                                                          --------   ---------   --------
Cash Flows from Investing Activities:
   Purchase of property, plant, and equipment                               (8,764)    (16,524)   (24,859)
   Proceeds from disposals                                                   3,645       2,155     24,829
   Cash receipts from fire claim                                               487           0          0
   Proceeds/(issuance) of note receivable to Pro-Fac Cooperative, Inc.           0       1,000       (300)
   Acquisition of California & Washington Company                                0     (74,290)         0
   Acquisition of Edwards Distributing                                           0        (410)         0
   Proceeds from investment in CoBank                                          639       1,477      2,923
                                                                          --------   ---------   --------
   Net cash (used in)/provided by investing activities                      (3,993)    (86,592)     2,593
                                                                          --------   ---------   --------
Cash Flows from Financing Activities:
   Birds Eye Holdings, Inc. investment, net                                    476          61      1,064
   Payments on long-term debt                                               (2,700)     (2,700)  (169,636)
   Payment of premium and fees on early extinguishment of debt                   0           0     (8,937)
   Payments on Termination Agreement with Pro-Fac Cooperative, Inc.        (10,000)    (10,000)   (10,000)
   Payments on capital leases                                                 (883)       (813)      (918)
                                                                          --------   ---------   --------
Net cash used in financing activities                                      (13,107)    (13,452)  (188,427)
                                                                          --------   ---------   --------
Net change in cash and cash equivalents                                     37,894     (36,885)   (80,869)
Cash and cash equivalents at beginning of period                            36,002      72,887    153,756
                                                                          --------   ---------   --------
Cash and cash equivalents at end of period                                $ 73,896   $  36,002   $ 72,887
                                                                          ========   =========   ========
Supplemental Disclosure of Cash Flow Information:
   Cash paid during the year for:
      Interest, net of amounts capitalized                                $ 22,591   $  20,210   $ 27,289
                                                                          ========   =========   ========
      Income taxes received/(paid), net                                   $     80   $    (893)  $    (74)
                                                                          ========   =========   ========
Supplemental schedule of non-cash operating, investing and financing
   activities:
   Capital lease obligations incurred                                     $     78   $     246   $  4,177
                                                                          ========   =========   ========
   Property, plant and equipment purchases included in accounts payable   $    587   $   1,750   $  1,153
                                                                          ========   =========   ========
</TABLE>

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

                                       30



<PAGE>


Birds Eye Foods, Inc.
Consolidated Statements of Shareholder's Equity
(Dollars in Thousands)

<TABLE>
<CAPTION>
                                                                                            Accumulated Other
                                                                                       Comprehensive Income/(Loss)
                                                                                       ---------------------------
                                         Common    Common   Additional                                   Minimum         Total
                                         Stock     Stock      Paid-In    Accumulated      Hedging        Pension     Shareholder's
                                         Shares   Dollars     Capital      Earnings       Activity      Liability        Equity
                                         ------   -------   ----------   -----------   ------------   ------------   -------------
<S>                                      <C>      <C>       <C>          <C>           <C>            <C>            <C>
Balances, June 28, 2003                  11,000   $     0   $  201,690   $    20,756   $        348   $    (11,257)  $     211,537

   Birds Eye Holdings Inc. Investment         0         0        1,227             0              0              0           1,227
   Birds Eye Holdings Inc. redemptions        0         0         (163)            0              0              0            (163)
   Net Income                                 0         0            0        31,867              0              0          31,867
   Minimum pension liability
     adjustment, net of taxes                 0         0            0             0              0           (490)           (490)
   Unrealized (loss)/gain on hedging
     activity, net of taxes                   0         0            0             0           (131)             0            (131)
                                         ------   -------   ----------   -----------   ------------   ------------   -------------

Balances, June 26, 2004                  11,000         0      202,754        52,623            217        (11,747)        243,847

   Birds Eye Holdings Inc Investment          0         0           71             0              0              0              71
   Birds Eye Holdings Inc. redemptions        0         0          (10)            0              0              0             (10)
   Net Income                                 0         0            0        18,605              0              0          18,605
   Minimum pension liability
     adjustment, net of taxes                 0         0            0             0              0         (3,021)         (3,021)
   Unrealized (loss)/gain on hedging
     activity, net of taxes                   0         0            0             0           (106)             0            (106)
                                         ------   -------   ----------   -----------   ------------   ------------   -------------

Balances, June 25, 2005                  11,000         0      202,815        71,228            111        (14,768)        259,386

   Birds Eye Holdings Inc. investment         0         0          573             0              0              0             573
   Birds Eye Holdings Inc. redemptions        0         0          (97)            0              0              0             (97)
   Net Income                                 0         0            0        14,686              0              0          14,686
   Minimum pension liability
     adjustment, net of taxes                 0         0            0             0              0            538             538
   Unrealized (loss)/gain on hedging
     activities, net of taxes                 0         0            0             0            335              0             335
                                         ------   -------   ----------   -----------   ------------   ------------   -------------

Balances, June 24, 2006                  11,000   $     0   $  203,291   $    85,914   $        446   $    (14,230)  $     275,421
                                         ======   =======   ==========   ===========   ============   ============   =============
</TABLE>

The accompanying notes are an integral pat of these financial statements.

                                       31



<PAGE>


                              BIRDS EYE FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The Company: Birds Eye Foods, Inc. (the "Company" or "Birds Eye Foods"),
incorporated in 1961, is a producer and marketer of processed food products. The
Company has three primary segments in which it markets its products, they
include: brand frozen, brand dry, and non-brand products. The majority of each
of the segments' net sales are within the United States. All of the Company's
operating facilities are within the United States. See further discussion at
NOTE 14 to the "Notes to Consolidated Financial Statements" for additional
disclosures regarding the Company's decision to exit the non-brand frozen
business.

On August 19, 2002 (the "Closing Date"), pursuant to the terms of the Unit
Purchase Agreement dated as of June 20, 2002 (the "Unit Purchase Agreement"), by
and among Pro-Fac Cooperative, Inc., a New York agricultural cooperative
("Pro-Fac"), Birds Eye Foods, at the time a New York corporation and a
wholly-owned subsidiary of Pro-Fac, and Vestar/Agrilink Holdings LLC, a Delaware
limited liability company ("Vestar/Agrilink Holdings"), Vestar/Agrilink Holdings
and its co-investors (collectively "Vestar") indirectly acquired control of the
Company ("The Transaction").

Birds Eye Foods is a wholly-owned subsidiary of Birds Eye Holdings Inc.
("Holdings Inc."). Holdings Inc. is a wholly-owned subsidiary of Birds Eye
Holdings, LLC ("Holdings LLC"). At June 24, 2006, Vestar, Pro-Fac, and
management and directors of Birds Eye Foods have ownership interests in Holdings
LLC of approximately 55 percent, 40 percent, and 5 percent, respectively. Vestar
has a voting majority of all Holdings LLC common units.

Basis of Presentation: The accompanying consolidated financial statements have
been prepared in accordance with accounting principles generally accepted in the
United States of America ("GAAP") which requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.

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

Fiscal Year: The fiscal year of Birds Eye Foods ends on the last Saturday in
June. Fiscal 2006, 2005 and 2004 comprised 52 weeks.

New Accounting Pronouncements: In July 2006, the Financial Accounting Standards
Board ("FASB") issued FASB Interpretation No. 48, "Accounting for Uncertainty in
Income Taxes." The Interpretation clarifies the way companies are to account for
uncertainty in income tax reporting and filings and prescribes a consistent
recognition threshold and measurement attribute for recognizing, derecognizing,
and measuring the tax benefits of a tax position taken, or expected to be taken,
on a tax return. The Interpretation is effective for fiscal years beginning
after December 15, 2006. The Company is currently evaluating the effect that
FASB Interpretation No. 48 will have on the Company's results of operations,
cash flows, or financial condition.

In September 2005, the Financial Accounting Standards Board Emerging Issues Task
Force ("EITF") reached a consensus on EITF Issue No. 04-13, "Accounting for
Purchases and Sales of Inventory with the Same Counterparty." The EITF concluded
that inventory purchases and sales transactions with the same counterparty that
are entered into in contemplation of one another should be combined and
considered a single transaction subject to APB Opinion No. 29, "Accounting for
Nonmonetary Transactions." The EITF provided indicators to be considered for
purposes of determining whether such transactions are entered into in
contemplation of each other. Guidance was also provided on the circumstances
under which nonmonetary exchanges of inventory within the same line of business
should be recognized at fair value. EITF No. 04-13 was effective for reporting
periods beginning after March 15, 2006. The adoption of EITF No. 04-13 did not
have a material effect on the Company's results of operations, cash flows, or
financial condition.

In June 2005, the FASB EITF reached a consensus on EITF Issue No. 05-6
"Determining the Amortization Period for Leasehold Improvements Purchased or
Acquired after Lease Inception in a Business Combination." This EITF issue
provides guidance on the amortization period for leasehold improvements acquired
in a business combination and the amortization period of leasehold improvements
that are placed in service significantly after and not contemplated at the
beginning of the lease term. The guidance contained in EITF No. 05-6 was
effective for periods beginning after June 29, 2005. The adoption of EITF No.
05-6 did not have a material effect on the Company's results of operations, cash
flows, or financial condition.

In May 2005, the FASB issued Statement of Financial Accounting Standards
("SFAS") No. 154, Accounting Changes and Error Corrections. SFAS No. 154
replaces APB No. 20, Accounting Changes, and SFAS No. 3, Reporting Accounting
Changes in Interim Financial Statements, and establishes retrospective
application as the required method for reporting a change in accounting
principle. SFAS No. 154 provides guidance for determining whether retrospective
application of a change in accounting principle is impracticable and for
reporting a change when retrospective application is impracticable. The
reporting of a correction of an error by restating previously issued

                                       32



<PAGE>


financial statements is also addressed. SFAS No. 154 is effective for accounting
changes and corrections of errors made in fiscal years beginning after December
15, 2005. The Company does not anticipate that the adoption of SFAS No. 154 will
have a material effect on the Company's results of operations, cash flows, or
financial condition.

In December 2004, the FASB issued SFAS No. 153, "Exchanges of Non-monetary
Assets - an amendment of APB Opinion No. 29". SFAS No. 153 eliminates the
exception from fair value measurement for non-monetary exchanges of similar
productive assets, and replaces it with an exception for exchanges that do not
have commercial substance. SFAS No. 153 was effective for non-monetary asset
exchanges occurring in fiscal periods beginning after June 15, 2005. The
adoption of SFAS No. 153 did not have a material effect on the Company's results
of operations, cash flows, or financial condition.

In December 2004, the FASB issued Staff Position No. 109-1, "Application of FASB
Statement No. 109, Accounting for Income Taxes, to the Tax Deduction on
Qualified Production Activities Provided by the American Jobs Creation Act of
2004." FSP 109-1 clarifies that the manufacturer's deduction provided for under
the American Jobs Creation Act of 2004 should be accounted for as a special
deduction in accordance with SFAS No. 109 and not as a tax rate reduction. The
adoption of FSP No. 109-1 did not have a material effect on the Company's
results of operations, cash flows, or financial condition.

In November 2004, the FASB issued SFAS No. 151, "Inventory Costs - an amendment
of ARB No. 43, Chapter 4." SFAS No. 151 amends previous accounting guidance
regarding allocation of fixed production costs to inventory and the recognition
of overheads and other expenses. SFAS No. 151 was effective for fiscal years
beginning after June 15, 2005. The adoption of SFAS No. 151 did not have a
material effect on the Company's results of operations, cash flows, or financial
condition.

In May 2004, the FASB issued Staff Position ("FSP") No. 106-2, "Accounting and
Disclosure Requirements Related to the Medicare Prescription Drug, Improvement
and Modernization Act of 2003" ("Act") which requires measures of the
accumulated postretirement benefit obligation and net periodic postretirement
benefit cost to reflect the effects of the Act. Detailed regulations necessary
to implement the Act and determine "actuarial equivalency" were issued on
January 21, 2005. The Company has evaluated these regulations and while the
Company expects that it may be entitled to the federal subsidy for certain of
its plans, it was determined that the administrative costs of obtaining the
subsidy meet or exceed any potential subsidy benefit. Therefore, the amounts
included in the financial statements related to the employer's postretirement
benefit plans do not reflect the effects of the Act. See further disclosure at
NOTE 11 to the "Notes to Consolidated Financial Statements" for additional
disclosures regarding pension and postretirement benefits.

Cash and Cash Equivalents: Cash and cash equivalents include short-term
investments with original maturities of three months or less.

Trade Accounts Receivable: The Company accounts for trade receivables at
outstanding billed amounts, net of allowances for doubtful accounts. The Company
estimates its allowance for doubtful accounts as a percentage of receivables
overdue. Also included in the allowance, in their entirety, are those accounts
that have filed for bankruptcy, been sent to collections, and any other accounts
management believes are not collectible based on historical information. The
Company periodically reviews the accounts included in the allowance to determine
those to be written off. Generally, after a period of one year, or through legal
counsel's advice, accounts are written off. It is not Company policy to accrue
interest on past due accounts. The Company's allowance for doubtful accounts was
approximately $1.1 million as of June 24, 2006 and June 25, 2005.

Inventories: Inventories are stated at the lower of cost or market on the
first-in, first-out ("FIFO") method. The Company provides inventory reserves for
obsolete or slow moving inventory based on changes in consumer demand and other
economic conditions. Reserves recorded at June 24, 2006 and June 25, 2005 were
$6.4 million.

Investment in CoBank: The Company's investment in CoBank was required as a
condition of previous borrowings. These securities are not physically issued by
CoBank, but rather the Company is notified as to their monetary value. The
investment is carried at cost plus the Company's share of the undistributed
earnings of CoBank (that portion of patronage refunds not distributed currently
in cash).

Under the terms of previous borrowing arrangements, the Company's investment in
CoBank will be liquidated over the next two years.

Prepaid Manufacturing Expense: The allocation of manufacturing overhead to
finished goods produced is on the basis of a production period. Thus at the end
of each period, certain costs incurred by seasonal plants, subsequent to the end
of previous pack operations, are deferred and included in the accompanying
balance sheet. Such costs are applied to inventory during the next production
period and recognized as an element of cost of sales.

Property, Plant, and Equipment and Related Lease Arrangements: Property, plant,
and equipment are depreciated over the estimated useful lives of the assets
using the straight-line method, half-year convention, over 1 to 40 years.

Lease arrangements are capitalized when such leases convey substantially all of
the risks and benefits incidental to ownership. Assets subject to capital leases
are amortized over either the lease term or the life of the related assets,
depending upon available purchase options and lease renewal features.
Amortization related to assets subject to capital leases is included within
depreciation expense.

                                       33



<PAGE>


Held for sale assets are separately classified on the consolidated balance
sheet. The recorded value represents estimated fair value less costs to sell.
See NOTE 4 to the "Notes to Consolidated Financial Statements" for additional
disclosures regarding held for sale assets.

Goodwill: Goodwill includes the cost in excess of the fair value of net
identifiable assets acquired in purchase transactions. Goodwill is not
amortized, but instead tested annually for impairment. See NOTE 7 to the "Notes
to Consolidated Financial Statements" for additional disclosures regarding
goodwill.

Other Intangible Assets: Other intangible assets include customer relationships,
non-competition agreements, employment contracts, trademarks, and a trademark
royalty agreement. Trademarks have been deemed to have an indefinite life and
are, therefore, not amortized. Other intangible assets are amortized on a
straight-line basis over 5 to 36 years. See NOTE 7 to the "Notes to Consolidated
Financial Statements" for additional disclosures regarding intangible assets.

Impairment of Long-Lived Assets Including Goodwill: The Company reviews its
long-lived assets in accordance with SFAS No. 144 "Accounting for the Impairment
of Long-Lived Assets," for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. When the carrying value of the asset is in excess of the sum of the
undiscounted cash flows expected to result from the use of the asset and its
eventual disposition, this indicates that a long-lived asset may be impaired.
When an impairment is indicated, the estimated future cash flows are then
discounted, or another appropriate fair value methodology is utilized, to
determine the estimated fair value of the asset and an impairment charge, if
any, is recorded for the difference between the carrying value and the fair
value of the asset.

The determination of the fair value and any potential subsequent impairment of
the Company's remaining long-lived assets require management to make estimates
and assumptions that may affect its consolidated financial statements.

Carrying values of goodwill and intangible assets with indefinite lives
(trademarks) are reviewed at least annually, for possible impairment in
accordance with SFAS No. 142, "Accounting for Goodwill." The Company's
impairment review is based on a discounted cash flow approach that requires
judgment with respect to future volume, revenue and expense growth rates and the
selection of the appropriate discount rate. The Company uses estimates based on
expected trends in making these assumptions. An impairment charge would be
recorded for the difference between the carrying value and the net present value
of estimated cash flows, which represents the estimated fair value of the asset.
The Company uses its judgment in assessing whether assets may have become
impaired between annual valuations. Indicators such as unexpected adverse,
economic factors or competitive activities may signal that an asset has become
impaired. See NOTES 4 and 7 to the "Notes to Consolidated Financial Statements"
for additional disclosures.

Derivative Financial Instruments: The Company does not engage in speculative
derivatives. Derivative financial instruments are utilized to hedge commodity
price risk and are not held for trading purposes. See NOTE 8 to the "Notes to
Consolidated Financial Statements" for additional disclosures regarding the
Company's hedging activities.

Promotional Activities: The Company's promotional activities are conducted
either through the retail trade channel or directly with consumers and involve
in-store displays; feature price discounts on products; consumer coupons; and
similar activities. The costs of these activities are generally recognized at
the time the related revenue is recorded, which normally precedes the actual
cash expenditure. The recognition of these costs therefore requires management's
judgment regarding the volume of promotional offers that will be redeemed by
either the retail trade channel or consumer. These estimates are made using
various techniques including historical data on performance of similar
promotional programs. The accrual for promotional activities at June 24, 2006
and June 25, 2005 was $14.4 million and $17.3 million, respectively.

Income Taxes: Income taxes are provided on income for financial reporting
purposes. Deferred income taxes resulting from temporary differences between
financial reporting and tax reporting are appropriately classified in the
balance sheet. A valuation allowance is provided when it is more likely than not
that some portion of the deferred tax assets will not be realized. See NOTE 10
to the "Notes to Consolidated Financial Statements" for additional disclosures
regarding tax matters.

Casualty Insurance: The Company is primarily self-insured for workers
compensation and automobile liability. The Company accrues for the estimated
losses from both asserted and unasserted claims. The estimate of the liability
for unasserted claims arising from unreported incidents is based on an analysis
of historical claims data. The accrual for casualty insurance at June 24, 2006
and June 25, 2005 was $8.3 million and $8.1 million, respectively.

Pension and Postretirement Benefits other than Pensions: The Company and its
subsidiaries have several pension plans and participates in one union sponsored
pension plan. In addition, the Company sponsors benefit plans that provide
postretirement medical and life insurance benefits for certain current and
former employees of the Company. Charges to income with respect to plans
sponsored by the Company and its subsidiaries are based upon actuarially
determined costs. Pension liabilities are funded by periodic payments to the
various pension plan trusts. See NOTE 11 to the "Notes to Consolidated Financial
Statements" for additional disclosures regarding pension and postretirement
benefits.

                                       34



<PAGE>


Revenue Recognition: The Company recognizes revenue on shipments on the date the
merchandise is received by the customer and title transfers. Product sales are
reported net of applicable cash discounts, sales allowances and promotions.

Shipping and Handling Expense: Shipping and handling expenses are included as a
component of cost of sales.

Advertising: Production costs of commercials and programming are charged to
earnings in the year first aired. The costs of other advertising and marketing
programs are expensed when incurred. Advertising expense incurred in fiscal year
2006, 2005, and 2004, amounted to approximately $22.0 million, $23.9 million,
and $17.5 million, respectively.

Research and Development: Research and development costs are expensed as
incurred. The amount expensed on company-sponsored and customer-sponsored
activities relating to the development of new products or the improvement of
existing products was $2.8 million in fiscal 2006 and $4.3 million in both
fiscal 2005 and 2004.

Earnings Per Share Data Omitted: The guidance of SFAS No. 128, "Earnings per
Share," requires presentation of earnings per share by all entities that have
issued common stock or potential common stock if those securities trade in a
public market either on a stock exchange (domestic or foreign) or in the
over-the-counter market. Birds Eye Foods common stock is not publicly traded
and, therefore, earnings per share amounts are not presented.

Comprehensive Income: Under SFAS No. 130, "Reporting Comprehensive Income," the
Company is required to display comprehensive income and its components as part
of the financial statements. Comprehensive income is comprised of net earnings
and other comprehensive income/(loss), which includes certain changes in equity
that are excluded from net income. The Company includes adjustments for minimum
pension liabilities and unrealized gains and losses on hedging transactions in
other comprehensive income. The income taxes related to the Company's minimum
pension liabilities amounted to approximately a $0.1 million tax provision, a
$1.6 million tax benefit, and a $0.3 million tax benefit for fiscal 2006, 2005
and 2004, respectively. The income taxes related to the Company's unrealized
gains and losses on hedging transactions amounted to approximately a $0.2
million tax provision, a $0.1 million tax benefit, and a $0.1 million tax
benefit in fiscal 2006, 2005 and 2004, respectively.

Disclosures About Fair Value of Financial Instruments: The following methods and
assumptions were used by the Company in estimating its fair value disclosures
for financial instruments:

      Cash and Cash Equivalents and Accounts Receivable: The carrying amount
      approximates fair value because of the short maturity of these
      instruments.

      Long-Term Investments: The carrying value of the investment in CoBank was
      $0.5 million at June 24, 2006. As there is no market price for this
      investment, a reasonable estimate of fair value is not possible.

      Long-Term Debt: The fair value of the long-term debt is estimated based on
      the quoted market prices for the same or similar issues or on the current
      rates offered for debt of the same remaining maturities. See NOTE 9 to the
      "Notes to Consolidated Financial Statements" for additional disclosures
      regarding long-term debt.

NOTE 2. RELATED PARTY TRANSACTIONS

In connection with the August 19, 2002 Transaction, Birds Eye Foods entered into
several agreements effective as of the Closing Date, including the following:

(i) Termination Agreement. Pro-Fac and Birds Eye Foods entered into a letter
agreement dated as of the Closing Date (the "Termination Agreement"), pursuant
to which, among other things, the marketing and facilitation agreement between
Pro-Fac and Birds Eye Foods (the "Old Marketing and Facilitation Agreement")
which, until the Closing Date, governed the crop supply and purchase
relationship between Birds Eye Foods and Pro-Fac, was terminated. In
consideration of such termination, Birds Eye Foods agreed to pay Pro-Fac a
termination fee of $10.0 million per year for five years, provided that certain
ongoing conditions are met, including maintaining grower membership levels
sufficient to generate certain minimum crop supply. The $10.0 million payment is
payable in quarterly installments as follows: $4.0 million on each July 1, and
$2.0 million each on October 1, January 1, and April 1, with the last payment
due April 1, 2007. The liability for the Termination Agreement has been
reflected at fair value utilizing a discount rate of 11 1/2 percent. The amount
of the obligation under the Termination Agreement was $9.7 million as of June
24, 2006 and $18.3 million as of June 25, 2005.

(ii) Amended and Restated Marketing and Facilitation Agreement. Pro-Fac and
Birds Eye Foods entered into an amended and restated marketing and facilitation
agreement dated as of the Closing Date (the "Amended and Restated Marketing and
Facilitation Agreement"). The Amended and Restated Marketing and Facilitation
Agreement replaces the Old Marketing and Facilitation Agreement. Birds Eye Foods
pays Pro-Fac the commercial market value ("CMV") of the crops supplied in
installments corresponding to the dates of payment by Pro-Fac to its members for
crops delivered. CMV is defined as the weighted average price paid by other
commercial processors

                                       35



<PAGE>


for similar crops sold under preseason contracts and in the open market in the
same or competing market areas. The processes for determining CMV under the
Amended and Restated Marketing and Facilitation Agreement are substantially the
same as the processes used under the Old Marketing and Facilitation Agreement.
Birds Eye Foods makes payments to Pro-Fac for an estimated CMV for a particular
crop year, subject to adjustments to reflect the actual CMV following the end of
such year. Commodity committees of Pro-Fac meet with Birds Eye Foods management
to establish CMV guidelines, review calculations, and report to a joint CMV
committee of Pro-Fac and Birds Eye Foods. The CMV of crops supplied by Pro-Fac
for the fiscal years ended June 24, 2006, June 25, 2005 and June 26, 2004 were
$47.0 million, $46.7 million and $48.8 million, respectively.

The Amended and Restated Marketing and Facilitation Agreement also provides that
Birds Eye Foods will provide to Pro-Fac services relating to planning,
consulting, sourcing and harvesting crops from Pro-Fac members in a manner
consistent with past practices. In addition, until August 19, 2007, Birds Eye
Foods will provide Pro-Fac with services, if requested, related to the expansion
of the market for the agricultural products of Pro-Fac members (at no cost to
Pro-Fac other than reimbursement of Birds Eye Foods' incremental and
out-of-pocket expenses related to providing such services as agreed to by
Pro-Fac and Birds Eye Foods).

Under the Amended and Restated Marketing and Facilitation Agreement, Birds Eye
Foods determines the amount of crops which Birds Eye Foods will acquire from
Pro-Fac for each crop year. If the amount to be purchased by Birds Eye Foods
during a particular crop year does not meet (i) a defined crop amount and (ii) a
defined target percentage of Birds Eye Foods' needs for each particular crop,
then certain shortfall payments will be made by Birds Eye Foods to Pro-Fac. The
defined crop amounts and targeted percentages were set based upon the needs of
Birds Eye Foods in the 2002 crop year (fiscal 2003). The shortfall payment
provisions of the agreement include a maximum shortfall payment, determined for
each crop, that can be paid over the term of the Amended and Restated Marketing
and Facilitation Agreement. The aggregate shortfall payment amounts for all
crops covered under the agreement cannot exceed $10.0 million over the term of
the agreement.

Unless terminated earlier, the Amended and Restated Marketing and Facilitation
Agreement will continue in effect until August 19, 2012. Birds Eye Foods may
terminate the Amended and Restated Marketing and Facilitation Agreement prior to
August 19, 2012 upon the occurrence of certain events, including in connection
with a change in control transaction affecting Birds Eye Foods or Birds Eye
Holdings Inc., ("Holdings Inc."). Birds Eye Foods may terminate the Amended and
Restated Marketing Agreement as a result of a change in control without the
payment of any termination fee. Also, Birds Eye Foods may sell portions of its
business and the volumes of crop purchases previously made by Birds Eye Foods
with respect to the sold business are disregarded for purposes of determining
shortfall payments.

The Company anticipates it will not satisfy the crop purchase obligations under
the Amended and Restated Marketing and Facilitation Agreement for the 2007 and
2008 growing seasons, and will therefore be required to make shortfall payments
in July 2008 and July 2009. See further discussion at NOTE 14 to the "Notes to
Consolidated Financial Statements" for additional disclosures regarding the
Company's decision to exit the non-brand frozen business.

(iii) Transitional Services Agreement. Pro-Fac and Birds Eye Foods entered into
a transitional services agreement (the "Transitional Services Agreement") dated
as of the Closing Date, pursuant to which Birds Eye Foods provided Pro-Fac
certain administrative and other services for a period of 24 months from the
Closing Date. Birds Eye Foods generally provided such services at no charge to
Pro-Fac, other than reimbursement of the incremental and out-of-pocket costs
associated with performing those services for Pro-Fac. The value of the services
provided to Pro-Fac was estimated at approximately $1.1 million. This obligation
was reduced on a straight-line basis over the term of the agreement and as
services were provided. The Transitional Services Agreement terminated on August
19, 2004.

(iv) Credit Agreement. Birds Eye Foods and Pro-Fac entered into a Credit
Agreement, dated August 19, 2002 (the "Credit Agreement"), pursuant to which
Birds Eye Foods agreed to make available to Pro-Fac loans in an aggregate
principal amount of up to $5.0 million (the "Credit Facility"). The Credit
Agreement expires on August 19, 2007 and permits Pro-Fac to draw down to $1.0
million per year under the Credit Facility, unless Birds Eye Foods is prohibited
from making such advances under the terms of certain third party indebtedness of
Birds Eye Foods. Pro-Fac borrows and repays periodically based on its cash flow
requirements. The amount of the Credit Facility will be reduced, on a
dollar-for-dollar basis, to the extent of certain distributions made by Holdings
LLC to Pro-Fac in respect of its ownership in Holdings LLC. Pro-Fac has pledged
all of its Class B common units in Holdings LLC as security for advances under
the Credit Facility. The Credit Facility bears interest at the rate of 10
percent per annum. There were no amounts outstanding under this Credit Agreement
as of June 24, 2006 and June 25, 2005.

(v) Management Agreement. Birds Eye Foods, Holdings, Inc. and Vestar Capital
Partners entered into a management agreement dated as of August 19, 2002 (the
"Management Agreement") pursuant to which Vestar Capital Partners, an investment
firm and affiliate of Vestar Capital Partners IV, L.P., a Delaware limited
partnership and the sole member of Vestar/Agrilink Holdings ("Vestar Capital
Partners"), provides advisory and consulting services to Holdings Inc. and Birds
Eye Foods. In consideration for such services, Holdings Inc. and Birds Eye
Foods, jointly and severally, pay Vestar Capital Partners an annual management
fee equal to the greater of $1.0 million or 0.7 percent of Birds Eye Foods'
earnings, before interest, tax, depreciation and amortization. The management
fee paid by Birds Eye Foods to Vestar Capital Partners was $1.0 million in
fiscal 2006, 2005 and 2004.

                                       36



<PAGE>


The Management Agreement does not include investment banking or other financial
advisory services in connection with acquisitions, divestitures, refinancings,
or restructurings. In fiscal 2005, Birds Eye Foods paid $0.5 million to Vestar
Capital Partners for services rendered in relation to Birds Eye Foods, Inc.'s
acquisition of California and Washington Company.

NOTE 3. ACQUISITIONS

On September 23, 2004, Birds Eye Foods acquired the California & Washington
Company ("C&W"), a San Francisco-based marketer of frozen vegetables and fruits,
by acquiring all of the outstanding common stock of C&W (the "Acquisition") for
an aggregate purchase price of approximately $74.3 million, including direct
costs.

C&W is the premier marketer of branded frozen vegetables and fruits in the
Western United States, with the number one branded market share positions in
California, the Pacific Northwest, and Arizona. The Company believes the
Acquisition has strengthened its competitive position by expanding its presence
in the Western United States.

The Acquisition was accounted for under the purchase method of accounting and in
accordance with SFAS No. 141, "Business Combinations". Under purchase
accounting, the Company allocated the purchase price to the tangible and
identifiable intangible assets acquired and liabilities assumed. Each were
recorded at their respective fair values. The final allocation of purchase price
is presented below and is based on management's estimates of fair value derived
from independent valuations and other studies which provided the basis for such
estimates. The goodwill associated with this transaction is deductible for tax
purposes.

In accordance with generally accepted accounting principles, the excess of cost
of C&W over the fair value of the identifiable assets and liabilities of C&W as
of the final allocation of purchase price was approximately $9.8 million. See
NOTE 7 to the "Notes to Consolidated Financial Statements" for further
discussion of goodwill and intangible assets. The allocation was as follows:

(Dollars in Thousands)

                                    Amount
                                   --------

Accounts receivable                $  3,437
Inventories                           3,336
Prepaid expenses and
   other current assets                  52
Property, plant and equipment            22
Goodwill                              9,750
Trademarks and other intangibles     61,070
Accounts payable                     (1,696)
Accrued employee compensation          (276)
Other accrued liabilities            (1,405)
                                   --------
      Total allocation             $ 74,290
                                   ========

The results of operations of C&W subsequent to the Acquisition are included in
the Company's Consolidated Statements of Operations and Comprehensive Income.
The following unaudited pro forma financial information presents a summary of
consolidated results of operations of the Company as if the Acquisition had
occurred at the beginning of the periods presented:

(Dollars in Thousands)

                                      Fiscal Year Ended
                                    ---------------------
                                     June 25,    June 26,
                                       2005        2004
                                    ---------   ---------

Net sales                           $ 865,227   $ 882,368
Income from continuing operations      19,964      29,960
Net income                             18,412      34,282

These unaudited pro forma results have been prepared for comparative purposes
only and primarily include adjustments for interest expense, taxes and
amortization. These results do not purport to be indicative of the results of
operations which actually would have resulted had the Acquisition occurred at
the beginning of the 2004 fiscal year, or of the future operations of the
Company.

In June 2005, Birds Eye Foods acquired Edwards Distributing, Inc., a distributor
of snack food products for $0.4 million. This acquisition was accounted for
under the purchase method of accounting in accordance with SFAS No. 141,
"Business Combinations."

                                       37



<PAGE>


NOTE 4. DISCONTINUED OPERATIONS AND HELD FOR SALE ASSETS AND LIABILITIES

Discontinued Operations: On August 23, 2005, Birds Eye Foods entered into and
completed the transactions under a Stock Purchase Agreement (the "Sale
Agreement") with Congelados Don Jose S.P.R. de R.L. ("CDJ") pursuant to which
CDJ acquired a manufacturing facility in Celaya, Mexico utilized by Birds Eye
Foods for the production of various frozen vegetables. The transactions included
the sale of the stock of Birds Eye de Mexico, S.A. de C.V. ("BEMSA"), a wholly
owned subsidiary of Birds Eye Foods and BEMSA Holding, Inc., and all of the
equipment of Birds Eye Foods located at the BEMSA facility in Celaya, Mexico.
The transactions did not impact products carrying the Birds Eye brand name or
any other brand names of the Company.

As of June 25, 2005, the Company had committed to a plan to sell its BEMSA
subsidiary and all of the operating assets located at the Celaya, Mexico plant.
In connection with this plan, the Company designated BEMSA and all of the
equipment located at the Celaya, Mexico plant as held-for-sale assets and
adjusted the carrying value to fair value less the estimated costs to sell,
which resulted in an impairment charge of approximately $1.6 million (after-tax)
in the fourth quarter of fiscal 2005. In addition, the assumed liabilities were
classified as liabilities held for sale as of June 25, 2005. The final
accounting for the sale as of the closing date resulted in an additional $0.3
million charge (net of taxes of $0.2 million) in the first quarter of fiscal
2006 and is included as a component of discontinued operations in the
Consolidated Statements of Operations and Comprehensive Income for the year
ended June 24, 2006.

On May 1, 2004, the Company sold its Freshlike canned vegetable business to
Allen Canning Company. This sale did not impact frozen products carrying the
Freshlike brand name. The Company recognized a gain of approximately $3.8
million (after-tax) within discontinued operations in the fourth quarter of
fiscal 2004 as a result of this transaction. The Freshlike canned vegetable
business was previously reported in the brand dry segment.

The businesses described above are presented as discontinued operations and
their operations are, therefore, excluded from continuing operations in
accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets."

The operating results of those businesses classified as discontinued operations
in the Consolidated Statement of Operations and Comprehensive Income are
summarized as follows:

                                                      Fiscal Years Ended
                                               -------------------------------
(Dollars in Thousands)
                                               June 24,   June 25,    June 26,
                                                 2006       2005        2004
                                               --------   --------   ---------

Net sales                                      $      0   $      0   $  11,694
                                               ========   ========   =========
Income before income taxes                     $      0   $      0   $     809
(Asset impairment charge)/gain on disposal         (454)    (2,508)      6,263
Income tax benefit/(provision)                      173        956      (2,750)
                                               --------   --------   ---------
Discontinued operations, net of tax            $   (281)  $ (1,552)  $   4,322
                                               ========   ========   =========

Held for Sale Assets and Liabilities: Having met the criteria outlined in SFAS
No. 144, certain property in Barker, New York and Red Creek, New York were
classified as a held for sale asset on the Company's Consolidated Balance Sheet
as of June 24, 2006.

As of June 25, 2005 the Company designated BEMSA and all of the equipment
located at the Celaya, Mexico plant as held for sale assets and the assumed
liabilities were classified as held for sale liabilities. In addition, having
met the criteria outlined in SFAS No. 144, certain idle property in Sodus,
Michigan was classified as a held for sale asset on the Company's Consolidated
Balance Sheet as of June 25, 2005. The sale of this property for $0.1 million
was completed in January 2006. No gain or loss was recognized on the sale.

                                       38



<PAGE>


The major classes of assets included in the Consolidated Balance Sheets as held
for sale assets at estimated fair value less costs to sell and held for sale
liabilities are as follows:

(Dollars in Thousands)

                                               June 24,   June 25,
                                                 2006       2005
                                               --------   --------

Held for sale assets:
Accounts receivable trade                      $      0   $    379
Accounts receivable, other                            0          4
Inventories                                           0        369
Prepaid expenses and other current assets             0        670
Property, plant and equipment, net                  145      4,034
Other assets                                          0         41
                                               --------   --------
   Total held for sale assets                  $    145   $  5,497
                                               ========   ========

Held for sale liabilities:
Accounts payable                               $      0   $   (744)
Income taxes payable                                  0       (308)
Accrued employee compensation                         0       (716)
Other accrued liabilities                             0       (246)
                                               --------   --------
   Total held for sale liabilities             $      0   $ (2,014)
                                               ========   ========

During fiscal 2005, the Company sold the following facilities which had
previously been recorded as held for sale as a result of downsizing efforts: (a)
on June 9, 2005, the Company sold its facility located in Cincinnati, Ohio for
$0.4 million and recognized a gain on disposal of $0.1 million; (b) on April 29,
2005, the Company sold property located in Enumclaw, Washington for $1.2 million
and recognized an insignificant loss on disposal; (c) on January 25, 2005, the
Company sold its facility located in Barker, New York for $0.4 million and
recognized a gain on disposal of $0.2 million; and (d) on August 27, 2004, the
Company sold its facility located in Alton, New York for $0.1 million and
recognized an insignificant gain on disposal.

Asset Impairment Charge: In the fourth quarter of fiscal 2006, the Company
determined that the current real estate market conditions in the Red Creek, New
York area had resulted in the impairment of its idle property in Red Creek. In
accordance with SFAS No. 144, the Company recorded an impairment charge of $0.2
million to write-down the carrying value of the Red Creek facility to fair value
less costs to sell. The Company expects to dispose of the Red Creek facility in
the first quarter of fiscal 2007.

In the third quarter of fiscal 2005, the Company determined that current real
estate market conditions in the Green Bay, Wisconsin area had resulted in the
impairment of its closed Green Bay manufacturing facility. In accordance with
SFAS No. 144, the Company recorded an impairment charge of approximately $1.0
million within operating income to write-down the carrying value of the Green
Bay manufacturing facility to fair value less costs to sell.

NOTE 5. INVENTORIES

The major classes of inventories, net of inventory obsolescence reserves of $6.4
million, as of June 24, 2006 and June 25, 2005, respectively, are as follows:

(Dollars in Thousands)

                              June 24,    June 25,
                               2006         2005
                             ---------   ---------

Finished goods               $ 167,123   $ 175,432
Raw materials and supplies      20,361      20,855
                             ---------   ---------
     Total inventories       $ 187,484   $ 196,287
                             =========   =========

                                       39



<PAGE>


NOTE 6. PROPERTY, PLANT AND EQUIPMENT AND RELATED OBLIGATIONS

The following is a summary of property, plant and equipment and related
obligations at June 24, 2006 and June 25, 2005:

(Dollars in Thousands)

<TABLE>
<CAPTION>
                                                  June 24,                                   June 25,
                                                    2006                                       2005
                                   ---------------------------------------   ---------------------------------------
                                      Owned         Leased                      Owned        Leased
                                      Assets        Assets        Total         Assets        Assets        Total
                                   -----------   -----------   -----------   -----------   -----------   -----------
<S>                                <C>           <C>           <C>           <C>           <C>           <C>
Land                               $    12,648   $         0   $    12,648   $    12,917   $         0   $    12,917
Land improvements                        4,437             0         4,437         4,389             0         4,389
Buildings                               62,647             0        62,647        62,216             0        62,216
Machinery and equipment                166,782         4,471       171,253       157,954         4,749       162,703
Construction in progress                 2,661             0         2,661         6,238             0         6,238
                                   -----------   -----------   -----------   -----------   -----------   -----------
                                       249,175         4,471       253,646       243,714         4,749       248,463
Less accumulated depreciation
   and amortization                    (76,116)       (2,071)      (78,187)      (55,468)       (1,358)      (56,826)
                                   -----------   -----------   -----------   -----------   -----------   -----------
Net                                $   173,059   $     2,400   $   175,459   $   188,246   $     3,391   $   191,637
                                   ===========   ===========   ===========   ===========   ===========   ===========

Obligations under capital leases                 $     2,362                               $     3,238
Less current portion                                    (818)                                     (865)
                                                 -----------                               -----------
Long-term portion                                $     1,544                               $     2,373
                                                 ===========                               ===========
</TABLE>

Interest capitalized in conjunction with construction amounted to approximately
$0.1 million, $0.2 million, and $0.5 million, in fiscal 2006, 2005, and 2004,
respectively.

The following is a schedule of future minimum lease payments primarily for
warehouse, production and office facilities and equipment, together with the
present value of the minimum lease payments related to capitalized leases, both
as of June 24, 2006.

(Dollars in Thousands)

Fiscal Year Ending Last                   Capital   Operating    Total Future
   Saturday In June                        Leases     Leases      Commitment
------------------------                  -------   ----------   ------------
       2007                               $   897   $  10,158     $  11,055
       2008                                   782       9,141         9,923
       2009                                   746       7,008         7,754
       2010                                    72       6,492         6,564
       2011                                     3       6,243         6,246
   Later years                                  0       5,202         5,202
                                          -------   ---------     ---------
Net minimum lease payments                  2,500   $  44,244     $  46,744
                                                    =========     =========
Less amount representing interest            (138)
                                          -------
Present value of minimum lease payments   $ 2,362
                                          =======

Total rent expense related to operating leases (including lease arrangements of
less than one year which are not included in the previous table) amounted to
$12.0 million, $10.3 million and $9.6 million for fiscal years 2006, 2005, and
2004, respectively.

NOTE 7. ACCOUNTING FOR GOODWILL AND INTANGIBLE ASSETS

Goodwill: Birds Eye Foods follows SFAS No. 142, "Goodwill and Other Intangible
Assets," which requires that goodwill not be amortized, but instead be tested at
least annually for impairment and expensed against earnings when its implied
fair value is less than its carrying amount.

During the quarter ended June 24, 2006 and the quarter ended June 25, 2005, the
Company performed an annual impairment test as required by SFAS No. 142. The
fair value of the Company's reporting units was determined and was compared to
their carrying value, indicating that no impairment exists.

As part of an ongoing IRS examination during the third quarter of fiscal 2006,
the Company received a non-binding proposed audit adjustment regarding the tax
treatment of certain transaction fees incurred in conjunction with the August
19, 2002 change in control of the Company. In accordance with SFAS No. 109
"Accounting for Income Taxes," management may change its best estimate of the
tax basis of acquired assets and liabilities at or before settlement with a tax
authority. Accordingly, during the third quarter of fiscal 2006 the Company

                                       40



<PAGE>


increased its deferred tax liability by $2.3 million to reflect the revised tax
basis for the amount of the proposed settlement, and increased goodwill
attributable to the August 19, 2002 change in control transaction. The IRS
examination was finalized in July of fiscal 2007 at the proposed settlement
amount.

A summary of changes in the Company's goodwill during fiscal 2006 by business
segment is outlined as follows:

(Dollars in Thousands)

                              June 25,                   June 24,
                                2005     Adjustments (1)   2006
                             ---------   -----------     --------

Brand frozen                 $  36,254   $     2,028     $ 38,282
Brand dry                        8,847           280        9,127
                             ---------   -----------     --------
Total                        $  45,101   $     2,308     $ 47,409
                             =========   ===========     ========

(1)   Represents adjustments related to purchase accounting adjustment
      identified by an IRS examination of the August 19, 2002 change in control
      of the Company.

A summary of changes in the Company's goodwill during fiscal 2005 by business
segment is outlined as follows:

(Dollars in Thousands)

<TABLE>
<CAPTION>
                                                                         Acquisition of
                              June 26,                   Acquisition        Edwards            June 25,
                                2004     Adjustments (1)  of C&W(2)     Distributing, Inc.(3)    2005
                             ---------   -----------     -----------   ----------------------  --------
<S>                          <C>         <C>             <C>           <C>                     <C>
Brand frozen                 $  26,736   $      (232)    $     9,750          $      0         $ 36,254
Brand dry                        8,850           (19)              0                16            8,847
                             ---------   -----------     -----------          --------         --------
Total                        $  35,586   $      (251)    $     9,750          $     16         $ 45,101
                             =========   ===========     ===========          ========         ========
</TABLE>

(1)   Represents adjustments related to a reduction in contractual penalties and
      severance to reflect changes in estimates.

(2)   Represents the amount of goodwill as a result of the allocation of
      purchase price from the acquisition of C&W. See NOTE 3 to the "Notes to
      Consolidated Financial Statements" for additional disclosures regarding
      the C&W acquisition.

(3)   Represents the amount of goodwill as a result of the allocation of
      purchase price from the acquisition of Edwards Distributing, Inc.

Intangible Assets: As outlined in SFAS No. 142, certain intangibles with a
finite life are required to be amortized. These intangibles are being amortized
on a straight-line basis over their estimated lives of 5 to 36 years. SFAS No.
142 also requires that intangible assets with indefinite lives not be amortized,
however, are required to be tested annually for impairment. During the quarters
ended June 24, 2006 and June 25, 2005, the Company performed an asset impairment
test and concluded that the fair value of such assets exceeded their carrying
value.

The following schedule sets forth the major classes of intangible assets held by
the Company:

(Dollars in Thousands)

<TABLE>
<CAPTION>
                                          June 24,                  June 25,
                                           2006                      2005
                                 -------------------------   ------------------------
                                    Gross                      Gross
                                  Carrying     Accumulated    Carrying    Accumulated
                                   Amount     Amortization     Amount    Amortization
                                 ----------   ------------   ---------   ------------
<S>                              <C>          <C>            <C>         <C>
Amortized intangible assets:
   Customer Relationships        $   36,100   $     (4,808)  $  36,100   $     (3,135)
   License Agreement                 10,406         (2,906)     10,406         (2,156)
   Other                              2,921         (1,659)      2,921         (1,140)
                                 ----------   ------------   ---------   ------------
     Total                       $   49,427   $     (9,373)  $  49,427   $     (6,431)
                                 ----------   ------------   ---------   ------------

Unamortized intangible assets:
   Trademarks                       179,500                    179,500
                                 ----------                  ---------
     Total                       $  228,927                  $ 228,927
                                 ==========                  =========
</TABLE>

                                       41



<PAGE>


The aggregate amortization expense associated with intangible assets was
approximately $2.9 million for fiscal 2006, $3.1 million for fiscal 2005, and
$1.8 million for fiscal 2004. The aggregate amortization expense for each of the
five succeeding fiscal years is estimated as follows:

(Dollars in Thousands)

Fiscal Year Ending Last Saturday in June
----------------------------------------
2007                    $  2,815
2008                    $  2,803
2009                    $  2,803
2010                    $  2,533
2011                    $  2,423

NOTE 8. ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities,"
requires the recognition of all derivative financial instruments as either
assets or liabilities in the 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 Company, as a result of its operating and financing activities, is exposed
to changes in certain commodity prices which may adversely affect its results of
operations and financial position. In seeking to minimize the risks and/or costs
associated with such activities, the Company has entered into derivative
contracts.

Commodity Prices: The Company is exposed to commodity price risk related to
forecasted purchases of corrugated (unbleached kraftliner) in its manufacturing
process. To mitigate this risk, the Company entered into a swap agreement on
December 12, 2005, which matures June 30, 2007. The swap agreement is designated
as a cash flow hedge of the Company's forecasted corrugated purchases. At June
24, 2006, the Company had open swaps hedging approximately 40 percent of the
Company's annual usage. The fair value of the agreements is an after-tax gain of
approximately $0.4 million recorded in accumulated other comprehensive income in
shareholder's equity.

To further mitigate this risk, the Company entered into another swap agreement
on February 17, 2006 which matures on June 30, 2007. The swap agreement is
designated as a cash flow hedge of the Company's forecasted corrugated
purchases. The swap hedges approximately 40 percent of the Company's annual
usage. The fair value of the agreement is an after-tax gain of approximately
$47,000 recorded in accumulated other comprehensive income in shareholder's
equity.

NOTE 9. DEBT

The following is a summary of long-term debt outstanding:

(Dollars in Thousands)

                                                        June 24,      June 25,
                                                          2006         2005
                                                       ----------   ----------

Term Loan Facility                                     $  247,459   $  250,159
Senior Subordinated Notes                                  50,745       51,089
                                                       ----------   ----------
Total debt                                                298,204      301,248
Less current portion                                      (11,304)      (2,700)
                                                       -----------  ----------
Total long-term debt                                   $  286,900   $  298,548
                                                       ==========   ==========

Bank Debt: Birds Eye Foods and certain of its subsidiaries has a senior secured
credit facility (the "Senior Credit Facility") in the amount of $470.0 million
with a syndicate of banks and other lenders arranged and managed by JPMorgan
Chase Bank, as administrative agent. The Senior Credit Facility is comprised of
(i) a $200.0 million senior secured revolving credit facility (the "Revolving
Credit Facility") and (ii) a $270.0 million senior secured B term loan (the
"Term Loan Facility"). The Revolving Credit Facility matures in August 2007 and
allows up to $40.0 million to be available in the form of letters of credit. As
of June 24, 2006, (i) there were no cash borrowings outstanding under the
Revolving Credit Facility, (ii) there were $23.7 million in letters of credit
outstanding, and therefore (iii) availability under the Revolving Credit
Facility was $176.3 million.

                                       42



<PAGE>


The Senior Credit Facility bears interest at the Company's option, at a base
rate or LIBOR plus, in each case, an applicable percentage. The appropriate
applicable percentage corresponds to the Company's Consolidated Leverage Ratio,
as defined by the senior credit agreement (the "Senior Credit Agreement"), and
is adjusted quarterly based on the calculation of the Consolidated Leverage
Ratio. As of June 24, 2006, the Senior Credit Facility bears interest in the
case of base rate loans at the Base Rate, as defined in the Senior Credit
Agreement, plus (i) 1.25 percent for loans under the Revolving Credit Facility,
and (ii) 1.75 percent for loans under the Term Loan Facility or in the case of
LIBOR loans at LIBOR plus (i) 2.25 percent for loans under the Revolving Credit
Facility and (ii) 2.75 percent for loans under the Term Loan Facility. As of
June 24, 2006, the interest rate under the Term Loan Facility was approximately
7.75 percent. The unused commitment fee is 0.375 percent on the daily average
unused commitment under the Revolving Credit Facility and also varies based on
the Company's Consolidated Leverage Ratio.

The Term Loan Facility requires payments in quarterly installments in the amount
of $675,000 until September 30, 2007. Beginning December 31, 2007, the quarterly
payments are approximately $64.1 million. The Term Loan Facility matures in
August 2008 upon which the balance will be due. The Term Loan Facility is also
subject to mandatory prepayments under various scenarios as defined in the
Senior Credit Agreement. Provisions of the Senior Credit Agreement require that
annual payments, within 105 days after the end of each fiscal year, in the
amount of "excess cash flow," as defined in the Senior Credit Agreement, be
utilized to prepay the Term Loan Facility at an applicable percentage that
corresponds to the Company's Consolidated Leverage Ratio. The excess cash flow
payment is based in part on the Company's operating income during the year less
capital expenditures and cash interest. The amount of "excess cash flow" at June
24, 2006 is estimated to be $8.6 million. This amount is required to be paid on
or before October 6, 2006. As of June 25, 2005, there was no excess cash flow to
be paid under the Term Loan facility.

The Senior Credit Facility contains customary covenants and restrictions on the
Company's activities, including, but not limited to: (i) limitations on the
incurrence of indebtedness; (ii) limitations on sale-leaseback transactions,
liens, investments, loans, advances, guarantees, acquisitions, asset sales, and
certain hedging agreements; and (iii) limitations on transactions with
affiliates and other distributions. The Senior Credit Facility also contains
financial covenants requiring the Company to maintain a maximum average total
debt to earnings before interest, taxes, depreciation, and amortization
("EBITDA") ratio ("Consolidated Leverage Ratio"), and a minimum EBITDA to
interest expense ratio ("Interest Coverage Ratio"). As of June 24, 2006, the
Company was in compliance with all covenants, restrictions, and requirements
under the terms of the Senior Credit Facility.

The Company's obligations under the Senior Credit Facility are collateralized by
a first priority lien on: (i) substantially all existing or after-acquired
assets, tangible or intangible, (ii) the capital stock of Birds Eye Foods and
its domestic subsidiaries, and (iii) 65% of the voting capital stock and 100% of
the non-voting capital stock in certain foreign subsidiaries. The Company's
obligations under the Senior Credit Facility are guaranteed by Holdings Inc. and
certain of the Company's subsidiaries. See NOTE 13 to the "Notes to Consolidated
Financial Statements" for additional disclosures regarding guarantees and
indemnifications.

Effective May 27, 2005, the Company negotiated an amendment to its Senior Credit
Facility, which among other things, eliminates the Consolidated Senior Leverage
Ratio financial covenant and permits the use of revolving loans under the
Revolving Credit Facility to finance acquisitions if, after giving effect to the
acquisition(s), the pro forma Consolidated Senior Leverage Ratio is less than or
equal to 3.5 to 1.0.

During fiscal 2004, the Company negotiated an amendment to its Senior Credit
Facility. The amendment provided the Company with the ability to repay $150.0
million of its Senior Subordinated Notes which occurred in November 2003. See
"Senior Subordinated Notes - 11 7/8 Percent (due 2008)" below. In addition,
provided the satisfaction of certain conditions, the amendment permits repayment
of the balance of the Senior Subordinated Notes prior to maturity.

Senior Subordinated Notes - 11 7/8 Percent (due 2008): In fiscal 1999, the
Company issued Senior Subordinated Notes (the "Notes") for $200.0 million
aggregate principal amount due November 1, 2008.

As of June 24, 2006 and June 25, 2005, Birds Eye Foods had $50.0 million
aggregate principal outstanding of its $200.00 million 11 7/8 percent Senior
Subordinated Notes (the "Notes"), due 2008. On November 24, 2003, the Company
repaid $150.0 million of these Notes. In conjunction with this repayment, a
pre-tax loss on early extinguishment of debt of $4.0 million was recorded. This
amount reflects the payment of an $8.9 million call premium and other
transaction expenses less the related unamortized premium of $4.9 million
recorded in conjunction with the August 19, 2002 Transaction. The remaining
premium of $0.7 million at June 24, 2006 is being amortized against interest
expense over the remaining life of the outstanding Notes.

Interest on the Notes accrues at the rate of 11 7/8 percent per annum and is
payable semiannually in arrears on May 1 and November 1.

The Notes represent general unsecured obligations of the Company, subordinated
in right of payment to certain other debt obligations of the Company (including
the Company's obligations under the Senior Credit Facility). The Company's
obligations under the Notes are guaranteed by Kennedy Endeavors, Incorporated
and Linden Oaks Corporation (wholly-owned subsidiaries of the Company) and by
Pro-Fac. See NOTE 13 to the "Notes to Consolidated Financial Statements" for
additional disclosures regarding guarantees and indemnifications.

                                       43



<PAGE>


The Notes contain customary covenants and restrictions on the Company's ability
to engage in certain activities, including, but not limited to: (i) limitations
on the incurrence of indebtedness and liens; (ii) limitations on consolidations,
mergers, sales of assets, transactions with affiliates; and (iii) limitations on
dividends and other distributions. Additionally, in order to facilitate the
August 19, 2002 Transaction, Birds Eye Foods sought and obtained the consent of
the holders of the Notes to amend or waive certain provisions in the indenture
governing the Notes. The Company is in compliance with all covenants,
restrictions, and requirements under the Notes.

Revolving Credit Facility: Borrowings under the short-term Revolving Credit
Facility were as follows:

(Dollars in Thousands)

<TABLE>
<CAPTION>
                                                  Fiscal Years Ended
                                           --------------------------------
                                           June 24,     June 25,   June 26,
                                             2006         2005       2004
                                           --------     --------   --------
<S>                                        <C>          <C>        <C>
Balance at fiscal year end                 $      0     $      0   $      0
Rate at fiscal year end                         0.0%         0.0%       0.0%
Maximum outstanding during the period      $ 49,100     $ 82,100   $ 67,700
Average amount outstanding during the
   period                                  $ 20,100     $ 30,523   $ 10,800
Weighted average interest rate during
   the period                                   6.1%         4.2%       3.1%
</TABLE>

There were $23.7 million and $24.0 million in letters of credit outstanding
under the Revolving Credit Facility as of June 24, 2006 and June 25, 2005,
respectively.

Fair Value: The estimated fair value of long-term debt outstanding, including
the current portion, was approximately $298.5 million and $301.8 million at June
24, 2006 and June 25, 2005, respectively. The fair value for long-term debt was
estimated using either quoted market prices for the same or similar issues or
the current rates offered to the Company for debt with similar maturities.

NOTE 10. TAXES ON INCOME

The tax (provision)/benefit on pretax income from continuing operations includes
the following:

(Dollars in Thousands)

                                                  Fiscal Years Ended
                                           --------------------------------
                                           June 24,    June 25,    June 26,
                                             2006        2005       2004
                                           --------    --------    --------
Federal -
  Current                                  $   (839)   $   (370)   $  1,486
  Deferred                                   (8,525)     (8,473)    (14,821)
                                           --------    --------    --------
                                             (9,364)     (8,843)    (13,335)
                                           --------    --------    --------
State and foreign -
  Current                                       (82)        (32)        165
  Deferred                                     (389)     (3,264)     (2,268)
                                           --------    --------    --------
                                               (471)     (3,296)     (2,103)
                                           --------    --------    --------
                                           $ (9,835)   $(12,139)   $(15,438)
                                           ========    ========    ========

A reconciliation of the Company's effective tax rate to the amount computed by
applying the federal income tax rate to pretax income from continuing operations
is as follows:

<TABLE>
<CAPTION>
                                                        Fiscal Years Ended
                                          ---------------------------------------------
                                          June 24, 2006   June 25, 2005   June 26, 2004
                                          -------------   -------------   -------------
<S>                                       <C>             <C>             <C>
Statutory federal rate                        35.0%           35.0%           35.0%
State and foreign income taxes, net
   of federal income tax benefit               3.0%            6.7%           (1.1)%
Meals and entertainment                        0.8%            0.5%            0.3%
Adjustment of tax reserves                    (0.4)%          (2.7)%           0.2%
Change in valuation allowance                  1.0%            1.0%            6.0%
Other, net                                     0.3%           (2.9)%          (4.5)%
                                              ----            ----            ----
Effective Tax Rate                            39.7%           37.6%           35.9%
                                              ====            ====            ====
</TABLE>

                                       44



<PAGE>


In fiscal 2004, the Company incurred a net state and foreign tax benefit that
resulted from the generation of state and foreign net operating losses and state
tax credits. A valuation allowance was established for these net operating
losses and tax credits as the Company cannot assure that realization of the tax
benefits are more likely than not to occur. In addition, in fiscal 2006 and
2005, the Company decreased its contingency tax reserve resulting from the
favorable resolution of uncertainties that existed in prior years. The
contingency tax reserve at June 24, 2006 is immaterial.

Deferred tax (liabilities)/assets consist of the following:

(Dollars in Thousands)

                                                          June 24,    June 25,
                                                            2006       2005
                                                          --------   ---------
Liabilities -
   Depreciation                                           $(30,871)   $(32,175)
   Goodwill and other intangible assets                    (36,364)    (31,464)
   Prepaid manufacturing expense                            (4,925)     (4,613)
   Debt issue costs                                           (402)          0
                                                          --------   ---------
      Total deferred tax liabilities                       (72,562)    (68,252)
                                                          --------   ---------
Assets -
   Inventories                                               2,739       4,293
   Credits and operating loss carryforwards                 33,678      35,012
   Insurance accruals                                        3,417       3,811
   Pension/OPEB accruals                                    24,005      24,593
   Termination Agreement with Pro-Fac Cooperative, Inc.      3,732       6,969
   Other                                                     5,378       5,706
                                                          --------   ---------
      Total deferred tax assets                             72,949      80,384
                                                          --------   ---------
   Net deferred tax assets                                     387      12,132
   Valuation allowance                                     (19,454)    (19,209)
                                                          --------   ---------
      Total                                               $(19,067)   $ (7,077)
                                                          ========   =========

The net deferred tax asset/(liability) is reflected on the Company's
accompanying Consolidated Balance Sheets as follows:

(Dollars in Thousands)

                                                          June 24,   June 25,
                                                            2006       2005
                                                          --------   ---------

Current deferred tax asset                                $  3,118    $  5,276
Non-current deferred tax liability                         (22,185)    (12,353)
                                                          --------   ---------
      Total deferred taxes                                $(19,067)   $ (7,077)
                                                          ========   =========

Realization of deferred tax assets is dependent upon the generation of future
taxable income or the existence of sufficient taxable income within the
carryforward period. A valuation allowance is provided when it is more likely
than not that some portion of the deferred tax assets will not be realized. In
assessing the need for a valuation allowance, management considers the scheduled
reversal of the deferred tax liabilities, the level of historical taxable
income, and the projected future taxable income over the periods in which the
temporary differences comprising the deferred tax assets will be deductible.

As of June 24, 2006, the Company maintained a valuation allowance in the amount
of $19.5 million. The valuation allowance was established for foreign and state
net operating losses and state tax credits. As the Company cannot assure that
realization of the net operating losses and credits is more likely than not to
occur, a valuation allowance has been established.

As of June 24, 2006, the Company has a federal net operating loss carryforward
of $22.7 million and federal credits of $3.1 million. The federal net operating
loss carryforwards will expire on or before June 2025. The federal credit
consists primarily of minimum tax credits. This credit will never expire. The
Company utilized approximately $14.3 million of federal net operating loss
carryforwards in fiscal 2006 to offset current taxable income. In addition to
these federal carryforwards, the Company has varying state net operating loss
carryforwards depending on whether it files on a combined or separate company
basis by jurisdiction. The tax effect of these state net operating loss
carryforwards is $11.8 million. The expiration dates of the state net operating
loss carryforwards vary. Ultimately, all state net operating loss carryforwards
will expire on or before June 2025, if not utilized by the Company. The Company
has state credits totaling $8.6 million of which $2.2 million expire on or
before June 2020. The remaining $6.4 million in state credits will never expire.
The Company's June 24, 2006 foreign net operating loss carryforward is $2.2
million. These foreign net operating loss carryforwards expire on or before June
2016.

                                       45



<PAGE>


The Company files a consolidated return with Birds Eye Holdings Inc.

NOTE 11. PENSIONS, PROFIT SHARING, AND OTHER EMPLOYEE BENEFITS

Pensions: The Company maintains the Master Hourly Pension Plan, which has
primarily noncontributory defined-benefit schedules covering substantially all
hourly employees.

In September 2001, the Company made the decision to freeze benefits provided
under its Master Salaried Retirement Plan. This plan was amended to freeze
benefit accruals effective September 28, 2001. Participants who, on that date,
were actively employed and who had attained age 40, completed 5 years of vesting
service, and whose sum of age and vesting services was 50 or more, were
grandfathered. Grandfathered participants are entitled to continue to earn
benefit service in accordance with the provisions of the plan with respect to
periods of employment after September 28, 2001 but in no event beyond September
28, 2006.

The Company maintains a non-tax qualified Supplemental Executive Retirement Plan
("SERP") which provides additional retirement benefits to two prior executives
of the Company who retired prior to November 4, 1994. In July 2000, the Company
adopted a Supplemental Executive Retirement Agreement ("SERA") to provide
additional retirement benefits to its former Chairman of the Board, President
and Chief Executive Officer. The Separation Agreement with the former Chairman
of the Board, President and Chief Executive Officer amended the SERA so as to
provide full retirement benefits as outlined in the SERA beginning January 1,
2009. In accordance with FASB No. 88, "Employers' Accounting for Settlements &
Curtailments of Defined Benefit Pension Plans and for Termination Benefits", the
Company recorded special termination benefits of $2.4 million in fiscal 2006 to
reflect the accelerated vesting of benefits.

The Company maintains an Excess Benefit Retirement Plan which serves to provide
employees with the same retirement benefit they would have received from the
Company's retirement plan under the career average base pay formula, but for
changes required under the 1986 Tax Reform Act and the compensation limitation
under Section 401(a)(17) of the Internal Revenue Code having been revised in the
1992 Omnibus Budget Reform Act. This plan was amended to freeze benefit accruals
effective September 28, 2001. Participants who, on that date, were actively
employed and who had attained age 40, completed 5 years of vesting service, and
whose sum of age and vesting services was 50 or more, were grandfathered.
Grandfathered participants are entitled to continue to earn benefit service in
accordance with the provisions of the plan with respect to periods of employment
after September 28, 2001 but in no event beyond September 28, 2006.

The Company maintains the Southland Frozen Foods Plan, in which a small number
of former union hourly employees have vested pension benefits.

The Company also participates in one union sponsored pension plan. Contributions
to this plan are paid when incurred and billed by the sponsoring union or plan.
It is not possible to determine the Company's relative share of the accumulated
benefit obligations or net assets for the plan. The Company estimates its
withdrawal liability for this plan to be between approximately $1.0 million and
$1.5 million.

For purposes of this disclosure, all defined-benefit pension plans have been
combined. The benefits for these plans are based primarily on years of service
and employees' pay near retirement. The Company's funding policy is consistent
with the funding requirements of Federal law and regulations. Plan assets
consist principally of common stocks, corporate bonds and US government
obligations. Plan assets do not include any of the Company's own equity or debt
securities.

The measurement date used to determine pension benefit measurements for the
Company's pension plans is March 31 of a given calendar year.

The following table sets forth the weighted-average asset allocations of the
Company's pension plans by asset category at March 31, 2006 and March 31, 2005.

                                                          March 31,   March 31,
                                                            2006        2005
                                                          ---------   ---------
Asset category:
   Cash and Cash Equivalents                                  1.2%        3.0%
   Fixed Income                                              46.1        29.3
   Equity Securities                                         49.1        60.0
   Real Estate                                                3.6         7.7
                                                            -----       -----
      Total                                                 100.0%      100.0%
                                                            =====       =====

The Company uses multiple investment funds and managers for investment of the
assets of the plans. Oversight of the investment advisors is provided by an
outside investment consulting firm and an Investment Committee comprised of
Company's management. The investment performance and adherence to investment
policy is reviewed quarterly by the Investment Committee. The investment
objective for the plans is to maintain a well- diversified portfolio of assets
using multiple managers and diversified asset classes and styles to optimize the
long-term return on plan assets at a moderate level of risk.

                                       46



<PAGE>


The Company has established the following general target asset allocation mix
for its plan investments.

                                                   Target
                                                   ------
Equities                                               50%
Fixed Income                                           50%
                                                   ------
   Total                                              100%
                                                   ======

The following table sets forth the changes in the plans' projected benefit
obligation and plan assets and the plans' funded status and amounts recognized
in the Company's consolidated financial statements at June 24, 2006 and June 25,
2005:

(Dollars in Thousands)

<TABLE>
<CAPTION>
                                                                                       Pension Benefits
                                                                                    ----------------------
                                                                                      Fiscal Years Ended
                                                                                    ----------------------
                                                                                     June 24,    June 25,
                                                                                       2006        2005
                                                                                    ---------    ---------
<S>                                                                                 <C>          <C>
Change in benefit obligation:
   Benefit obligation at beginning of period                                        $ 141,222    $ 135,605
   Service cost                                                                         4,426        4,453
   Interest cost                                                                        8,258        7,923
   Plan participants' contributions                                                        73           76
   Plan amendments                                                                          0           87
   Actuarial (gain)/loss                                                                 (710)       2,153
   Special termination benefits                                                         2,399            0
   Benefits paid                                                                      (10,303)      (9,075)
                                                                                    ---------    ---------
      Benefit obligation at end of period                                             145,365      141,222
                                                                                    ---------    ---------
Change in plan assets:
   Fair value of plan assets at beginning of period                                    84,154       87,802
   Actual return on plan assets                                                         6,589        3,421
   Employer contribution                                                               11,222        1,930
   Plan participants' contributions                                                        73           76
   Benefits paid                                                                      (10,303)      (9,075)
                                                                                    ---------    ---------
      Fair value of plan assets at end of period                                       91,735       84,154
                                                                                    ---------    ---------

   Plan funded status                                                                 (53,630)     (57,068)
   Unrecognized prior service cost                                                         62           72
   Unrecognized net actuarial loss                                                     27,379       28,406
                                                                                    ---------    ---------
      Accrued benefit liability net of additional minimum pension liability         $ (26,189)   $ (28,590)
                                                                                    =========    =========

Amounts recognized in the balance sheet:
   Accrued benefit liability within other non-current liabilities                   $ (49,428)   $ (52,521)
   Intangible asset                                                                        62           72
   Accumulated other comprehensive loss - minimum pension liability (1)                23,177       23,859
                                                                                    ---------    ---------
      Net amount recognized                                                         $ (26,189)   $ (28,590)
                                                                                    =========    =========

Amounts included in other comprehensive (loss)/income:
   (Decrease)/increase in intangible asset                                          $     (10)   $      33
   Decrease/(increase) in additional minimum pension liability                            692       (4,667)
                                                                                    ---------    ---------
      Total amounts included in other comprehensive (loss)/income                   $     682    $  (4,634)
                                                                                    =========    =========

Weighted-average assumptions
   Assumptions used for projected benefit obligation:
      Discount rate                                                                 6.2 - 7.3%   5.9 - 7.3%
      Rate of compensation increase                                                 3.5 - 3.8%   3.5 - 3.8%

   Assumptions used to determine net periodic benefit cost:
      Discount rate                                                                 5.9 - 7.3%   6.0 - 7.3%
      Expected return on plan assets (2)                                            8.0 - 8.5%   8.0 - 8.5%
      Rate of compensation increase                                                 3.5 - 3.8%   3.5 - 3.8%
</TABLE>

The accumulated benefit obligation for all defined benefit pension plans was
$141.2 million and $136.7 million at June 24, 2006 and June 25, 2005,
respectively.

(1)   The fair value of the Company's pension plan assets was below the
      accumulated benefit obligation at the plan's March measurement date in
      fiscal 2006 and fiscal 2005 by $23.2 million and $23.9 million,
      respectively. In accordance with SFAS No. 87, "Employers' Accounting for
      Pensions," the net of tax amount of $14.2 million and $14.8 million of
      accumulated other comprehensive loss as of June 24, 2006 and June 25,
      2005, respectively, was included in shareholder's equity on the
      consolidated balance sheet.

(2)   To develop the expected long-term rate of return on assets assumption, the
      Company considered the current level of expected returns on risk-free
      investments (primarily government bonds), the historical level of the risk
      premium associated with the other asset classes in which the portfolio is
      invested and the expectations for future returns of each asset class. The
      expected return for each asset class was then weighted based on the target
      asset allocation to develop the expected long-term rate of return on
      assets assumption.

                                       47



<PAGE>


Net periodic benefit cost in fiscal years 2006, 2005, and 2004 is comprised of
the following:

(Dollars in Thousands)

                                                           Pension Cost
                                                  ------------------------------
                                                        Fiscal Years Ended
                                                  ------------------------------
                                                  June 24,   June 25,   June 26,
                                                    2006       2005       2004
                                                  --------   --------   --------

Components of net periodic benefit cost:
   Service cost                                   $ 4,426    $ 4,453    $ 4,976
   Interest cost                                    8,258      7,923      7,849
   Expected return on plan assets                  (7,351)    (7,170)    (6,422)
   Amortization of prior service cost                  10         55          6
   Amortization of loss                             1,078        842        969
                                                  -------    -------    -------
Net periodic benefit cost - Company plans           6,421      6,103      7,378
Net periodic benefit cost - union plans               465        821        523
Special termination benefits                        2,399          0          0
                                                  -------    -------    -------
Total periodic benefit cost                       $ 9,285    $ 6,924    $ 7,901
                                                  =======    =======    =======

The projected benefit obligation, accumulated benefit obligation and fair value
of plan assets for the six retirement plans with accumulated benefit obligations
in excess of plan assets were:

(Dollars in Thousands)

<TABLE>
<CAPTION>
                                         Master Hourly                  Master Salaried                  Excess Benefit
                                         Pension Plan                   Retirement Plan                 Retirement Plan
                                      Fiscal Years Ended              Fiscal Years Ended              Fiscal Years Ended
                                 -----------------------------   -----------------------------   -----------------------------
                                 June 24, 2006   June 25, 2005   June 24, 2006   June 25, 2005   June 24, 2006   June 25, 2005
                                 -------------   -------------   -------------   -------------   -------------   -------------
<S>                              <C>             <C>             <C>             <C>             <C>             <C>
Projected benefit obligation        $87,792         $85,801         $48,391         $48,831         $ 1,183         $ 1,231
Accumulated benefit obligation       83,932          82,240          48,054          47,906           1,178           1,170
Fair value of plan assets            59,005          54,995          32,504          28,917               0               0
</TABLE>

<TABLE>
<CAPTION>
                                   Supplemental Executive         Supplemental Executive           Southland Frozen Foods
                                       Retirement Plan             Retirement Agreement                 Pension Plan
                                     Fiscal Years Ended             Fiscal Years Ended               Fiscal Years Ended
                                 -----------------------------   -----------------------------   -----------------------------
                                 June 24, 2006   June 25, 2005   June 24, 2006   June 25, 2005   June 24, 2006   June 25, 2005
                                 -------------   -------------   -------------   -------------   -------------   -------------
<S>                              <C>             <C>             <C>             <C>             <C>             <C>
Projected benefit obligation         $1,904          $1,974          $5,795          $3,078          $  300          $  307
Accumulated benefit obligation        1,904           1,974           5,795           3,078             300             307
Fair value of plan assets                 0               0               0               0             226             242
</TABLE>

The Company expects to contribute $0.3 million in mandatory payments and $3.2
million in voluntary payments to its pension plans in fiscal 2007. The Company
made a voluntary contribution of $10.9 million to its Master Salaried Retirement
and Master Hourly Pension plans in the first quarter of fiscal 2006. In
addition, the Company contributed $0.3 million in mandatory payments in fiscal
2006.

Expected pension benefit payments, which reflect expected future service costs,
as appropriate, over the next 10 years are as follows:

(Dollars in Thousands)

Fiscal Year Ending Last Saturday in June

2007                         $   7,981
2008                         $   7,869
2009                         $   8,188
2010                         $   9,003
2011                         $   9,087
2012-2016                    $  53,463

Postretirement Benefits Other Than Pensions: The Company sponsors benefit plans
that provide postretirement medical and life insurance benefits for certain
current and former employees. For the most part, current employees are not
eligible for the postretirement medical coverage. Generally, other than
pensions, the Company does not pay retirees' benefit costs. Various exceptions
exist, which have evolved from union negotiations, early retirement incentives
and existing retiree commitments from acquired companies.

The Company has not prefunded any of its retiree medical or life insurance
liabilities. Consequently there are no plan assets held in a trust, and there is
no expected long-term rate of return assumption for purposes of determining the
annual expense.

                                       48



<PAGE>


The measurement date used to determine pension benefit measurements for the
Company's other postretirement benefit plans is March 31 of a given year.

The following table sets forth the changes in the plans' projected benefit
obligation and plan assets and the plans' funded status and amounts recognized
in the Company's financial statements at June 24, 2006 and June 25, 2005.

(Dollars in Thousands)

<TABLE>
<CAPTION>
                                                                 Other Benefits
                                                              --------------------
                                                               Fiscal Years Ended
                                                              --------------------
                                                              June 24,    June 25,
                                                                2006        2005
                                                              ---------   --------
<S>                                                           <C>         <C>
Change in benefit obligation:
   Benefit obligation at beginning of period                  $   4,509   $  3,467
   Service cost                                                      50         43
   Interest cost                                                    254        197
   Actuarial (gain)/loss                                           (267)     1,262
   Benefits paid                                                   (462)      (460)
                                                              ---------   --------
      Benefit obligation at end of period                         4,084      4,509
                                                              ---------   --------
Change in plan assets:
   Fair value of assets at beginning of period                        0          0
   Employer contribution                                            462        460
   Benefits paid                                                   (462)      (460)
                                                              ---------   --------
      Fair value of assets at end of period                           0          0
                                                              ---------   --------
   Plan funded status                                            (4,084)    (4,509)
   Unrecognized prior service benefit                               (28)       (57)
   Unrecognized actuarial loss                                      738      1,201
                                                              ---------   --------
      Accrued benefit liability                                  (3,374)    (3,365)

Amounts recognized in the balance sheet:
   Accrued benefit liability                                  $  (3,374)  $ (3,365)
                                                              =========   ========

Weighted-average assumptions
   Assumptions used for projected benefit obligation:
      Discount rate                                                 6.2%       5.9%
      Rate of compensation increase                                 3.8%       3.8%

   Assumptions used to determine net periodic benefit cost:
      Discount rate                                                 5.9%       6.0%
      Expected return on plan assets                                N/A        N/A
      Rate of compensation increase                                 3.8%       3.8%
</TABLE>

(Dollars in Thousands)
                                                    Other Benefits
                                           --------------------------------
                                                  Fiscal Years Ended
                                           --------------------------------
                                           June 24,    June 25,    June 26,
                                             2006        2005        2004
                                           ---------   --------   ---------
Components of net periodic benefit cost:
   Service cost                            $      50   $     43   $      49
   Interest cost                                 254        197         226
   Amortization of prior service cost            (29)       (29)        (29)
   Amortization of loss                          195          0           0
                                           ---------   --------   ---------
   Net periodic benefit cost               $     470   $    211   $     246
                                           =========   ========   =========

For measurement purposes, a 10 percent rate of increase in the per capita cost
of covered health care benefits was assumed for fiscal 2006. The rate was
assumed to decrease gradually to 5 percent for 2013 and remain at that level
thereafter.

The assumed health care trend rates can have a significant effect on the amounts
reported for the postretirement benefits plan. A one-percentage point change in
the assumed health care trend rates would have the following effect:

(Dollars in Thousands)

<TABLE>
<CAPTION>
                                                                           1-Percentage     1-Percentage
                                                                          Point Increase   Point Decrease
                                                                          --------------   --------------
<S>                                                                       <C>              <C>
Effect on total of service and interest cost components for fiscal 2006       $   14          $   (12)
Effect on postretirement benefit obligation at June 24, 2006                  $  170          $  (154)
</TABLE>

The Company expects to make payments of approximately $0.5 million to its other
postretirement benefit plans in fiscal year 2007.

                                       49



<PAGE>


The Company expects to make postretirement benefit payments, which reflect
expected future service costs, as appropriate, over the next 10 years as
follows:

(Dollars in Thousands)

Fiscal Year Ending Last Saturday in June

2007                                $   473
2008                                $   494
2009                                $   485
2010                                $   457
2011                                $   431
2012 - 2016                         $ 1,611

Birds Eye Foods 401(k) Plan: Under the Birds Eye Foods 401(k) Plan ("401(k)"),
the Company contributes matching contributions to the plan for the benefit of
employees who elect to defer a portion of their salary into the plan. During
fiscal 2006, 2005 and 2004, the Company allocated approximately $1.1 million,
$1.2 million and $1.2 million, respectively, in the form of matching
contributions to the plan.

In addition, Birds Eye Foods also maintains a Non-Qualified 401(k) Plan in which
the Company allocates matching contributions for the benefit of "highly
compensated employees" as defined under Section 414(q) of the Internal Revenue
Code. The Company allocated $0.4 million, $0.4 million and $0.3 million during
fiscal 2006, 2005, and 2004, respectively, in the form of matching contributions
to this plan.

NOTE 12. OPERATING SEGMENTS

The Company is organized by product line for management reporting. The Company
has three primary segments in which it markets its products, they include: brand
frozen, brand dry, and non-brand. The majority of each segments net sales are
within the United States. See further discussion at NOTE 14 to the "Notes to
Consolidated Financial Statements" for additional disclosures regarding the
Company's decision to exit the non-brand frozen business.

The Company's brand frozen family of products includes traditional frozen
vegetables as well as value added products marketed under recognizable brand
names such as Birds Eye, Birds Eye Steamfresh, Birds Eye Voila!, C&W, Freshlike
and McKenzie's. The Company's brand dry family of products includes a wide
variety of product offerings, including fruit fillings and toppings (Comstock
and Wilderness), chili and chili ingredients (Nalley and Brooks), salad
dressings (Bernstein's and Nalley) and snacks (Tim's, Snyder of Berlin, and
Husman). Birds Eye Foods also produces many products for the non-brand markets
which include store brand, food service and industrial markets. The Company's
store brand products include frozen vegetables, fruit fillings and toppings,
chili products, and other canned products. The Company's food service/industrial
products include frozen vegetables, salad dressings, mayonnaise, fruit fillings
and toppings, and chili products.

One customer accounted for 18 percent and 17 percent of the Company's
consolidated revenue in fiscal 2006 and fiscal 2005, respectively. In addition,
this customer represented 25 percent and 23 percent of the brand frozen segment
revenue in fiscal 2006 and fiscal 2005, respectively, 11 percent and 12 percent
of the brand dry segment revenues in fiscal 2006 and fiscal 2005, respectively,
and 12 percent and 11 percent of the non-brand segment revenue in fiscal 2006
and fiscal 2005, respectively. In addition, another customer represented 12
percent and 10 percent of the brand frozen segment revenue in fiscal 2006 and
fiscal 2005, respectively.

                                       50



<PAGE>


The accounting policies of the segments are the same as those described in the
summary of significant accounting policies. The Company allocates resources to
segments and evaluates the performance of segments based upon reported segment
income before interest expense and income taxes and certain other non-recurring
items. The Company does not have any intersegment sales. The following table
illustrates the Company's operating segment information:

(Dollars in Millions)
                                                   Fiscal Year Ended
                                           -----------------------------
                                           June 24,   June 25,  June 26,
                                           2006(4)    2005(4)   2004(4)
                                           --------   -------   --------

Net sales:
   Brand frozen                            $  405.0   $ 356.1   $  334.0
   Brand dry                                  212.7     203.4      202.4
   Non-brand                                  310.1     299.2      307.0
                                           --------   -------   --------
Total continuing segments                  $  927.8   $ 858.7   $  843.4
                                           ========   =======   ========
Operating income:
   Brand frozen                            $   44.1   $  47.8   $   57.7
   Brand dry                                   36.7      31.5       34.7
   Non-brand                                  (18.5)    (18.9)     (14.1)
   Asset impairment charge(1)                  (0.2)     (1.0)       0.0
   Restructuring(2)                            (4.5)     (1.9)       0.0
   Other income, net(3)                         0.1       3.3        0.0
                                           --------   -------   --------
Operating income                               57.7      60.8       78.3
Loss on early extinguishment of debt            0.0       0.0       (4.0)
Interest expense                              (32.9)    (28.5)     (31.3)
                                           --------   -------   --------
Pretax income from continuing operations   $   24.8   $  32.3   $   43.0
                                           ========   =======   ========

Depreciation expense:
   Brand frozen                            $    8.5   $   7.6   $    8.1
   Brand dry                                    3.4       3.5        3.3
   Non-brand                                   11.1      11.0       11.2
                                           --------   -------   --------
      Continuing segments                      23.0      22.1       22.6
   Discontinued operations                      0.0       0.0        0.1
                                           --------   -------   --------
         Total                             $   23.0   $  22.1   $   22.7
                                           ========   =======   ========

Amortization expense:
   Brand frozen                            $    1.6   $   1.7   $    0.4
   Brand dry                                    0.3       0.3        0.3
   Non-brand                                    1.0       1.1        1.1
                                           --------   -------   --------
         Total continuing segments         $    2.9   $   3.1   $    1.8
                                           ========   =======   ========

(1)   Represents asset impairment charges which are not allocated to individual
      segments. This item is excluded from the Company's evaluation of segment
      performance. See NOTE 4 to the "Notes to Consolidated Financial
      Statements" for additional disclosures regarding the Company's asset
      impairment charges.

(2)   Represents restructuring charges which are not allocated to individual
      segments. This item is excluded from the Company's evaluation of segment
      performance. See NOTE 14 to the "Notes to Consolidated Financial
      Statements" for additional disclosures regarding the Company's
      restructuring activities.

(3)   Other income, net is not allocated to individual segments. These items are
      excluded from the Company's evaluation of segment performance. See NOTE 14
      to the "Notes to Consolidated Financial Statements" for additional
      disclosures regarding the items included in other income, net.

(4)   Asset and capital expenditure information on a segment basis is not
      disclosed as this information is not separately identified and is not
      internally reported to the Company's Chief Executive Officer.

NOTE 13. GUARANTEES AND INDEMNIFICATIONS

In certain instances when Birds Eye Foods sells businesses or assets, the
Company may retain certain liabilities for known exposures and provide
indemnification to the buyer with respect to future claims for certain unknown
liabilities existing, or arising from events occurring, prior to the sale date,
including liabilities for taxes, legal matters, environmental exposures, labor
contingencies, product liability, and other obligations. The terms of the
indemnifications vary in duration, from one to three years for certain types of
indemnities, to terms for tax indemnifications that are generally aligned to the
applicable statute of limitations for the jurisdiction in which the tax is
imposed, and to terms for certain liabilities (i.e., warranties of title and
environmental liabilities) that typically do not expire. The maximum potential
future payments that the Company could be required to make under these
indemnifications are either contractually limited to a specified amount or
unlimited. The maximum potential future payments that the Company could be
required to make under these indemnifications are not determinable at this time,
as any future payments would be dependent on the type and extent of the related
claims, and all relevant defenses, which are not estimable. Historically, costs
incurred to resolve claims related to these indemnifications have not been
material to the Company's financial position, results of operations or cash
flows.

The Company enters into agreements with indemnification provisions in the
ordinary course of business with its customers, suppliers, service providers and
business partners. In such instances, the Company usually indemnifies, holds
harmless and agrees to reimburse the indemnified

                                       51



<PAGE>


party for claims, actions, liabilities, losses and expenses in connection with
any Birds Eye Foods infringement of third party intellectual property or
proprietary rights, or when applicable, in connection with any personal injuries
or property damage resulting from any Birds Eye Foods' products sold or services
provided. Additionally, the Company may from time to time agree to indemnify and
hold harmless its providers of services from claims, actions, liabilities,
losses and expenses relating to their services to Birds Eye Foods, except to the
extent finally determined to have resulted from the fault of the provider of
services relating to such services. The level of conduct constituting fault of
the service provider varies from agreement to agreement and may include conduct
which is defined in terms of negligence, gross negligence, willful misconduct,
omissions or other culpable behavior. The terms of these indemnification
provisions are generally not limited. The maximum potential future payments that
the Company could be required to make under these indemnification provisions are
unlimited. The maximum potential future payments that the Company could be
required to make under these indemnification provisions are not determinable at
this time, as any future payments would be dependent on the type and extent of
the related claims, and all relevant defenses to the claims, which are not
estimable. Historically, costs incurred to resolve claims related to these
indemnification provisions have not been material to the Company's financial
position, results of operations or cash flows.

The Company has by-laws, policies, and agreements under which it indemnifies its
directors and officers from liability for certain events or occurrences while
the directors or officers are, or were, serving at Birds Eye Foods' request in
such capacities. Furthermore, the Company is incorporated in the state of
Delaware which requires corporations to indemnify their officers and directors
under certain circumstances. The term of the indemnification period is for the
director's or officer's lifetime. The maximum potential amount of future
payments that the Company could be required to make under these indemnification
provisions is unlimited, but would be affected by all relevant defenses to the
claims.

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

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

<TABLE>
<CAPTION>
                                                                      Statement of Operations
                                                                  Fiscal Year Ended June 24, 2006
                                               ---------------------------------------------------------------------
                                                Birds Eye    Subsidiary   Non-Guarantor   Eliminating
                                               Foods, Inc.   Guarantors   Subsidiaries      Entries     Consolidated
                                               -----------   ----------   -------------   -----------   ------------
<S>                                            <C>           <C>          <C>             <C>           <C>
(Dollars in Thousands)

Net sales                                      $   899,384   $   28,413   $           0   $         0   $    927,797
Cost of sales                                     (725,527)     (21,422)              0             0       (746,949)
                                               ------------  -----------  -------------   -----------   ------------
Gross profit                                       173,857        6,991               0             0        180,848
Selling, administrative, and general expense      (114,595)      (3,891)              0             0       (118,486)
Asset impairment charge                               (218)           0               0             0           (218)
Restructuring                                       (4,492)           0               0             0         (4,492)
Other (expense)/income                             (32,034)      32,120               0             0             86
Income from subsidiaries                            32,164        2,582               0       (34,746)             0
                                               -----------   ----------   -------------   ------------  ------------
Operating income                                    54,682       37,802               0       (34,746)        57,738
Interest (expense)/income                          (45,547)       6,795           5,816             0        (32,936)
                                               ------------  ----------   -------------   -----------   ------------
Pretax income from continuing operations             9,135       44,597           5,816       (34,746)        24,802
Tax benefit/(provision)                              5,832      (15,667)              0             0         (9,835)
                                               -----------   -----------  -------------   -----------   ------------
Income from continuing operations                   14,967       28,930           5,816       (34,746)        14,967
Discontinued operations (net of a tax
   benefit of $173)                                   (281)        (619)              0           619           (281)
                                               ------------  -----------  -------------   -----------   ------------
Net income                                     $    14,686   $   28,311   $       5,816   $   (34,127)  $     14,686
                                               ===========   ==========   =============   --=========   ============
</TABLE>

                                       52



<PAGE>


<TABLE>
<CAPTION>
                                                                                         Balance Sheet
                                                                                         June 24, 2006
                                                            -----------------------------------------------------------------------
                                                             Birds Eye     Subsidiary    Non-Guarantor   Eliminating
                                                            Foods, Inc.    Guarantors    Subsidiaries      Entries     Consolidated
                                                            -----------    ----------    -------------   -----------   ------------
<S>                                                         <C>            <C>           <C>             <C>            <C>
(Dollars in Thousands)

Assets
   Cash and cash equivalents                                $    73,720    $      176    $           0   $         0   $     73,896
   Accounts receivable, net                                      62,932         4,730              967          (967)        67,662
   Inventories -
      Finished goods                                            166,627           496                0             0        167,123
      Raw materials and supplies                                 19,626           735                0             0         20,361
                                                            -----------    ----------    -------------   -----------   ------------
         Total inventories                                      186,253         1,231                0             0        187,484

   Other current assets                                          30,183            91                0        (3,471)        26,803
                                                            -----------    ----------    -------------   -----------   ------------

         Total current assets                                   353,088         6,228              967        (4,438)       355,845

   Property, plant and equipment, net                           155,195        20,264                0             0        175,459
   Investment in subsidiaries                                   340,815        15,581                0      (356,396)             0
   Goodwill and other intangible assets, net                     79,330       187,633                0             0        266,963
   Other assets                                                   8,707       100,145           34,126      (133,915)         9,063
                                                            -----------    ----------    -------------   -----------   ------------
         Total assets                                       $   937,135    $  329,851    $      35,093   $  (494,749)  $    807,330
                                                            ===========    ==========    =============   ===========   ============

Liabilities and Shareholder's Equity
   Current portion of long-term debt                        $    11,304    $        0    $           0   $         0   $     11,304
   Current portion of Termination
      Agreement with Pro-Fac
      Cooperative, Inc.                                           9,668             0                0             0          9,668
   Accounts payable                                              62,821         2,562                0             0         65,383
   Accrued interest                                               6,621             0                0          (967)         5,654
   Intercompany loans                                               198          (198)               0             0              0
   Other current liabilities                                     62,381         6,184                0        (3,471)        65,094
                                                            -----------    ----------    -------------   -----------   ------------
         Total current liabilities                              152,993         8,548                0        (4,438)       157,103
   Long-term debt                                               321,026             0                0       (34,126)       286,900
   Long-term portion of Termination
      Agreement with Pro-Fac Cooperative, Inc.                        0             0                0             0              0
   Other non-current liabilities                                187,695             0                0       (99,789)        87,906
                                                            -----------    ----------    -------------   -----------   ------------

         Total liabilities                                      661,714         8,548                0      (138,353)       531,909

   Shareholder's equity                                         275,421       321,303           35,093      (356,396)       275,421
                                                            -----------    ----------    -------------   -----------   ------------

         Total liabilities and shareholder's equity         $   937,135    $  329,851    $      35,093   $  (494,749)  $    807,330
                                                            ===========    ==========    =============   ===========   ============
</TABLE>

                                       53



<PAGE>


<TABLE>
<CAPTION>
                                                                                    Statement of Cash Flows
                                                                                Fiscal Year Ended June 24, 2006
                                                            -----------------------------------------------------------------------
                                                             Birds Eye     Subsidiary    Non-Guarantor   Eliminating
                                                            Foods, Inc.    Guarantors     Subsidiaries     Entries     Consolidated
                                                            -----------    ----------    -------------   -----------   ------------
<S>                                                         <C>            <C>           <C>             <C>           <C>
(Dollars in Thousands)
Cash Flows From Operating Activities:
   Net income                                               $    14,686    $   28,311    $       5,816   $   (34,127)  $     14,686
   Adjustments to reconcile net income to cash
      provided by operating activities -
         Asset impairment charge within discontinued
           operations                                                 0           454                0             0            454
         Asset impairment charge within continuing
           operations                                               218             0                0             0            218
         Restructuring charge                                     4,492             0                0             0          4,492
         Restructuring payments                                    (949)            0                0             0           (949)
         Other income, net                                          (86)            0                0             0            (86)
         Cash receipts from fire claim                              213             0                0             0            213
         Amortization of certain intangible assets                2,192           750                0             0          2,942
         Depreciation                                            20,994         1,996                0             0         22,990
         Amortization of debt issue costs, amendment cost
           and debt premiums                                      8,663             0           (1,937)            0          6,726
         Gain on sale of property, plant and equipment              (91)           (2)               0             0            (93)
         Provision for deferred taxes                             9,542             0                0             0          9,542
         Provision for losses on accounts receivable                210           225                0             0            435
         Equity in undistributed earnings of subsidiaries        (1,993)         (860)               0         2,853              0
         Change in working capital                               (3,470)       (3,104)              (2)            0         (6,576)
                                                            -----------    ----------    -------------   -----------   ------------
Net cash provided by operating activities                        54,621        27,770            3,877       (31,274)        54,994
                                                            -----------    ----------    -------------   -----------   ------------

Cash Flows From Investing Activities:
   Purchase of property, plant, and equipment                    (8,339)         (425)               0             0         (8,764)
   Proceeds from disposals                                        1,130         2,515                0             0          3,645
   Cash receipts from fire claim                                    487             0                0             0            487
   Distributions from BEMSA Holdings, Inc.                        2,740             0                0        (2,740)             0
   Proceeds from investment in CoBank                               639             0                0             0            639
                                                            -----------    ----------    -------------   -----------   ------------
Net cash (used in)/provided by investing activities              (3,343)        2,090                0        (2,740)        (3,993)
                                                            -----------    ----------    -------------   -----------   ------------

Cash Flows From Financing Activities:
   Birds Eye Holdings, Inc. investment, net                         476             0                0             0            476
   Payments on long-term debt                                    (2,700)            0                0             0         (2,700)
   Payments on Termination Agreement with
     Pro-Fac Cooperative, Inc.                                  (10,000)            0                0             0        (10,000)
   Payments on capital leases                                      (883)            0                0             0           (883)
   Distribution to Birds Eye Foods                                    0        (2,740)               0         2,740              0
   Dividends paid                                                     0       (27,397)          (3,877)       31,274              0
                                                            -----------    ----------    -------------   -----------   ------------
Net cash used in financing activities                           (13,107)      (30,137)          (3,877)       34,014        (13,107)
                                                            -----------    ----------    -------------   -----------   ------------

Net change in cash and cash equivalents                          38,171          (277)               0             0         37,894

Cash and cash equivalents at beginning of period                 35,549           453                0             0         36,002
                                                            -----------    ----------    -------------   -----------   ------------
Cash and cash equivalents at end of period                  $    73,720    $      176    $           0   $         0   $     73,896
                                                            ===========    ==========    =============   ===========   ============
</TABLE>

                                       54



<PAGE>


<TABLE>
<CAPTION>
                                                                                    Statement of Operations
                                                                                Fiscal Year Ended June 25, 2005
                                                            -----------------------------------------------------------------------
                                                             Birds Eye     Subsidiary    Non-Guarantor   Eliminating
                                                            Foods, Inc.    Guarantors     Subsidiaries     Entries     Consolidated
                                                            -----------    ----------    -------------   -----------   ------------
<S>                                                         <C>            <C>           <C>             <C>           <C>
(Dollars in Thousands)

Net sales                                                   $   837,906    $   20,763    $           0   $         0    $   858,669
Cost of sales                                                  (661,854)      (15,852)               0             0       (677,706)
                                                            -----------    ----------    -------------   -----------   ------------
Gross profit                                                    176,052         4,911                0             0        180,963
Selling, administrative, and general expense                   (117,322)       (3,243)               0             0       (120,565)
Asset impairment charge                                            (994)            0                0             0           (994)
Restructuring                                                    (1,940)            0                0             0         (1,940)
Other (expense)/income                                          (25,700)       28,988                0             0          3,288
Income from subsidiaries                                         28,076         2,582                0       (30,658)             0
                                                            -----------    ----------    -------------   -----------   ------------
Operating income                                                 58,172        33,238                0       (30,658)        60,752
Interest (expense)/income                                       (39,298)        5,026            5,816             0        (28,456)
                                                            -----------    ----------    -------------   -----------   ------------
Pretax income from continuing operations                         18,874        38,264            5,816       (30,658)        32,296
Tax benefit/(provision)                                           1,283       (13,422)               0             0        (12,139)
                                                            -----------    ----------    -------------   -----------   ------------
Income from continuing operations                                20,157        24,842            5,816       (30,658)        20,157
Discontinued operations (net of a tax benefit
   of $956)                                                      (1,552)          200                0          (200)        (1,552)
                                                            -----------    ----------    -------------   -----------   ------------
Net income                                                  $    18,605    $   25,042    $       5,816   $   (30,858)  $     18,605
                                                            ===========    ==========    =============   ===========   ============
</TABLE>

                                       55



<PAGE>


<TABLE>
<CAPTION>
                                                                                         Balance Sheet
                                                                                         June 25, 2005
                                                            -----------------------------------------------------------------------
                                                             Birds Eye     Subsidiary    Non-Guarantor   Eliminating
                                                            Foods, Inc.    Guarantors     Subsidiaries     Entries     Consolidated
                                                            -----------    ----------    -------------   -----------   ------------
<S>                                                         <C>            <C>           <C>             <C>           <C>
(Dollars in Thousands)

Assets
   Cash and cash equivalents                                $    35,549    $      453    $           0   $         0   $     36,002
   Accounts receivable, net                                      60,045         4,174                0             0         64,219
   Inventories -
      Finished goods                                            174,696           736                0             0        175,432
      Raw materials and supplies                                 20,304           551                0             0         20,855
                                                            -----------    ----------    -------------   -----------   ------------
         Total inventories                                      195,000         1,287                0             0        196,287

   Other current assets                                          30,017         6,131              967        (3,886)        33,229
                                                            -----------    ----------    -------------   -----------   ------------

         Total current assets                                   320,611        12,045              967        (3,886)       329,737

   Property, plant and equipment, net                           169,809        21,828                0             0        191,637
   Investment in subsidiaries                                   349,201        14,720                0      (363,921)             0
   Goodwill and other intangible assets, net                     79,214       188,383                0             0        267,597
   Other assets                                                  15,251        98,439           32,188      (130,325)        15,553
                                                            -----------    ----------    -------------   -----------   ------------
         Total assets                                       $   934,086    $  335,415    $      33,155   $  (498,132)  $    804,524
                                                            ===========    ==========    =============   ===========   ============

Liabilities and Shareholder's Equity
   Current portion of long-term debt                        $     2,700    $        0    $           0   $         0   $      2,700
   Current portion of Termination
      Agreement with Pro-Fac
      Cooperative, Inc.                                           9,455             0                0             0          9,455
   Accounts payable                                              77,571         1,026                0             0         78,597
   Accrued interest                                               3,111             0                0          (967)         2,144
   Intercompany loans                                             2,904        (2,904)               0             0              0
   Other current liabilities                                     59,296         6,527                0        (2,919)        62,904
                                                            -----------    ----------    -------------   -----------   ------------
         Total current liabilities                              155,037         4,649                0        (3,886)       155,800
   Long-term debt                                               330,736             0                0       (32,188)       298,548
   Long-term portion of Termination
     Agreement with Pro-Fac Cooperative, Inc.                     8,836             0                0             0          8,836
   Other non-current liabilities                                180,091             0                0       (98,137)        81,954
                                                            -----------    ----------    -------------   -----------   ------------

         Total liabilities                                      674,700         4,649                0      (134,211)       545,138

   Shareholder's equity                                         259,386       330,766           33,155      (363,921)       259,386
                                                            -----------    ----------    -------------   -----------   ------------

         Total liabilities and shareholder's equity         $   934,086    $  335,415    $      33,155   $  (498,132)  $    804,524
                                                            ===========    ==========    =============   ===========   ============
</TABLE>

                                       56



<PAGE>


<TABLE>
<CAPTION>
                                                                                    Statement of Cash Flows
                                                                                Fiscal Year Ended June 25, 2005
                                                            -----------------------------------------------------------------------
                                                             Birds Eye     Subsidiary    Non-Guarantor   Eliminating
                                                            Foods, Inc.    Guarantors     Subsidiaries     Entries     Consolidated
                                                            -----------    ----------    -------------   -----------   ------------
<S>                                                         <C>            <C>           <C>             <C>           <C>
(Dollars in Thousands)
Cash Flows From Operating Activities:
   Net income                                               $    18,605    $   25,042    $       5,816   $   (30,858)  $     18,605
   Adjustments to reconcile net income to cash
      provided by operating activities -
         Asset impairment charge within discontinued
           operations                                             1,199         1,309                0             0          2,508
         Asset impairment charge within continuing
           operations                                               994             0                0             0            994
         Other income                                            (3,288)            0                0             0         (3,288)
         Amortization of certain intangible assets                2,348           750                0             0          3,098
         Depreciation                                            19,917         2,148                0             0         22,065
         Amortization of debt issue costs, amendment costs,
           and debt premiums                                      8,923             0           (1,938)            0          6,985
         Gain on derivative instruments                               2             0                0             0              2
         Gain on sale of property, plant and equipment             (347)           (1)               0             0           (348)
         Transitional Services Agreement with
           Pro-Fac Cooperative, Inc.                                (70)            0                0             0            (70)
         Equity in undistributed earnings of subsidiaries        (3,208)         (860)               0         4,068              0
         Provision for deferred taxes                            11,204             0                0             0         11,204
         Provision for loss on accounts receivable                   85           180                0             0            265
         Change in working capital                                6,253        (5,114)               0             0          1,139
                                                            -----------    ----------    -------------   -----------   ------------
Net cash provided by operating activities                        62,617        23,454            3,878       (26,790)        63,159
                                                            -----------    ----------    -------------   -----------   ------------

Cash Flows From Investing Activities:
   Purchase of property, plant, and equipment                   (16,242)         (282)               0             0        (16,524)
   Proceeds from disposals                                        2,148             7                0             0          2,155
   Proceeds from note receivable to
      Pro-Fac Cooperative, Inc.                                   1,000             0                0             0          1,000
   Acquisition of California & Washington Company               (74,290)            0                0             0        (74,290)
   Acquisition of Edwards Distributing                             (410)            0                0             0           (410)
   Proceeds from investment in CoBank                             1,477             0                0             0          1,477
                                                            -----------    ----------    -------------   -----------   ------------
Net cash used in investing activities                           (86,317)         (275)               0             0        (86,592)
                                                            -----------    ----------    -------------   -----------   ------------

Cash Flows From Financing Activities:
   Payments on long-term debt                                    (2,700)            0                0             0         (2,700)
   Payments on Termination Agreement with
      Pro-Fac Cooperative, Inc.                                 (10,000)            0                0             0        (10,000)
   Payments on capital leases                                      (813)            0                0             0           (813)
   Birds Eye Holdings, Inc. contribution, net                        61             0                0             0             61
   Dividends paid                                                     0       (22,912)          (3,878)       26,790              0
                                                            -----------    ----------    -------------   -----------   ------------
Net cash used in financing activities                           (13,452)      (22,912)          (3,878)       26,790        (13,452)
                                                            -----------    ----------    -------------   -----------   ------------

Net change in cash and cash equivalents                         (37,152)          267                0             0        (36,885)

Cash and cash equivalents at beginning of period                 72,701           186                0             0         72,887
                                                            -----------    ----------    -------------   -----------   ------------
Cash and cash equivalents at end of period                  $    35,549    $      453    $           0   $         0   $     36,002
                                                            ===========    ==========    =============   ===========   ============
</TABLE>

                                       57



<PAGE>


<TABLE>
<CAPTION>
                                                                                    Statement of Operations
                                                                                Fiscal Year Ended June 26, 2004
                                                            -----------------------------------------------------------------------
                                                             Birds Eye     Subsidiary    Non-Guarantor   Eliminating
                                                            Foods, Inc.    Guarantors    Subsidiaries     Entries      Consolidated
                                                            -----------    ----------    -------------   -----------   ------------
<S>                                                         <C>            <C>           <C>             <C>           <C>
(Dollars in Thousands)

Net sales                                                   $   825,144    $   18,254    $           0   $         0   $    843,398
Cost of sales                                                  (639,354)      (13,509)               0             0       (652,863)
                                                            -----------    ----------    -------------   -----------   ------------
Gross profit                                                    185,790         4,745                0             0        190,535
Selling, administrative, and general expense                   (109,475)       (2,733)               0             0       (112,208)
Other (expense)/income                                          (37,584)       37,584                0             0              0
Income from subsidiaries                                         39,271         2,535                0       (41,806)             0
                                                            -----------    ----------    -------------   -----------   ------------
Operating income                                                 78,002        42,131                0       (41,806)        78,327
Interest (expense)/income                                       (43,576)        6,541            5,709             0        (31,326)
Loss on early extinguishment of debt                             (4,018)            0                0             0         (4,018)
                                                            -----------    ----------    -------------   -----------   ------------
Pretax income from continuing operations                         30,408        48,672            5,709       (41,806)        42,983
Tax benefit/(provision)                                           1,795       (17,233)               0             0        (15,438)
                                                            -----------    ----------    -------------   -----------   ------------
Income from continuing operations                                32,203        31,439            5,709       (41,806)        27,545
Discontinued operations (net of a tax provision
   of $2,750)                                                      (336)        5,199                0          (541)         4,322
                                                            -----------    ----------    -------------   -----------   ------------
Net income                                                  $    31,867    $   36,638    $       5,709   $   (42,347)  $     31,867
                                                            ===========    ==========    =============   ===========   ============
</TABLE>

                                       58



<PAGE>


<TABLE>
<CAPTION>
                                                                                    Statement of Cash Flows
                                                                                Fiscal Year Ended June 26, 2004
                                                            -----------------------------------------------------------------------
                                                             Birds Eye     Subsidiary    Non-Guarantor   Eliminating
                                                            Foods, Inc.    Guarantors    Subsidiaries      Entries     Consolidated
                                                            -----------    ----------    -------------   -----------   ------------
<S>                                                         <C>            <C>           <C>             <C>           <C>
(Dollars in Thousands)
Cash Flows From Operating Activities:
   Net income                                               $    31,867    $   36,638    $       5,709   $   (42,347)  $     31,867
   Adjustments to reconcile net income to cash
      provided by operating activities -
        Amortization of certain intangible assets                 1,048           750                0             0          1,798
        Depreciation                                             21,052         1,611                0             0         22,663
        Amortization of debt issue costs, amendment costs,
         debt discounts and premiums, and interest in-kind       10,691             0           (3,361)            0          7,330
        Gain on derivative instruments                              389             0                0             0            389
        Gain on sale of Freshlike canned vegetable business
         within discontinued operations                             831        (7,094)               0             0         (6,263)
        Loss on sale of property, plant and equipment               213             4                0             0            217
        Loss on early extinguishment of debt                      4,018             0                0             0          4,018
        Transitional Services Agreement with
         Pro-Fac Cooperative, Inc.                                 (525)            0                0             0           (525)
        Equity in undistributed earnings of subsidiaries          3,699        (1,922)               0        (1,777)             0
        Provision for deferred taxes                             16,703             0                0             0         16,703
        Provision for losses on accounts receivable                 258            40                0             0            298
        Change in working capital                                24,065         3,372             (967)            0         26,470
                                                            -----------    ----------    -------------   -----------   ------------
Net cash provided by operating activities                       114,309        33,399            1,381       (44,124)       104,965
                                                            -----------    ----------    -------------   -----------   ------------

Cash Flows From Investing Activities:

   Purchase of property, plant, and equipment                   (24,522)         (337)               0             0        (24,859)
   Proceeds from disposals                                       15,099         9,730                0             0         24,829
   Proceeds from investment in CoBank                             2,923             0                0             0          2,923
   Issuance of note receivable to Pro-Fac
      Cooperative, Inc., net                                       (300)            0                0             0           (300)
                                                            -----------    ----------    -------------   -----------   ------------
   Net cash provided by/(used in) investing activities           (6,800)        9,393                0             0          2,593
                                                            -----------    ----------    -------------   -----------   ------------

Cash Flows From Financing Activities:
   Payment of premium and fees on early
      extinguishment of debt                                     (8,937)            0                0             0         (8,937)
   Payments on long-term debt                                  (169,636)            0                0             0       (169,636)
   Payments on Termination Agreement with
      Pro-Fac Cooperative, Inc.                                 (10,000)            0                0             0        (10,000)
   Payments on capital lease                                       (918)            0                0             0           (918)
   Birds Eye Holdings, Inc. investment, net                       1,064             0                0             0          1,064
   Dividends paid                                                     0       (42,743)          (1,381)       44,124              0
                                                            -----------    ----------    -------------   -----------   ------------
Net cash used in financing activities                          (188,427)      (42,743)          (1,381)       44,124       (188,427)
                                                            -----------    ----------    -------------   -----------   ------------

Net change in cash and cash equivalents                         (80,918)           49                0             0        (80,869)

Cash and cash equivalents at beginning of period                153,619           137                0             0        153,756
                                                            -----------    ----------    -------------   -----------   ------------
Cash and cash equivalents at end of period                  $    72,701    $      186    $           0   $         0   $     72,887
                                                            ===========    ==========    =============   ===========   ============
</TABLE>

NOTE 14. OTHER MATTERS AND SUBSEQUENT EVENT

Restructuring: In the first quarter of fiscal 2006, the Company recognized a
charge of $4.5 million for payments to be provided and incurred in conjunction
with the departure of the Company's former Chairman, President and Chief
Executive Officer.

On June 15, 2005, the Company eliminated approximately 45 positions from various
locations and departments within the Company. The reductions were part of an
ongoing focus on low-cost operations and included both salaried and hourly
positions. In conjunction with the reductions, the Company recorded a charge
against earnings of approximately $1.9 million in the fourth quarter of fiscal
2005, primarily comprising employee termination benefits. The majority of this
amount was liquidated in fiscal 2006.

                                       59



<PAGE>


Other Income, net: On February 2, 2006, a fire damaged a storage building used
as part of the Company's manufacturing facility in Waseca, Minnesota. The
building contained harvesting equipment and seed inventory. All material costs
to clean-up the site, replace the building, and replace the damaged equipment
and inventory are covered under insurance policies maintained by the Company.
During the third quarter of fiscal 2006, the Company recorded a receivable of
approximately $1.5 million based on replacement values of the property damaged.
During the fourth quarter of fiscal 2006, the Company received $0.7 million of
insurance proceeds. All remaining proceeds were received in the first quarter of
fiscal 2007. In accordance with FASB Interpretation No. 30, "Accounting for
Involuntary Conversions of Non-Monetary Assets to Monetary Assets-An
Interpretation of APB Opinion No. 29", the Company recorded a gain of
approximately $0.7 million within other income in the Company's Consolidated
Statement of Operations and Comprehensive Income for the year ended June 24,
2006. The gain represents the difference between the total insurance amount, net
of a $0.5 million deductible, and the carrying value of the assets destroyed.

During the second quarter of fiscal 2006, the Company committed to a plan to
donate certain idle property in Sodus, Michigan. In conjunction with this
transaction, the Company recorded contribution expense based on the fair value
of the property of approximately $0.6 million in continuing operations in the
Consolidated Statements of Operations and Comprehensive Income. The donation was
completed in January 2006.

During the second quarter of fiscal 2005, management renegotiated one of its
third-party warehousing leases. This resulted in recognition of a $2.2 million
pre-tax benefit due to the elimination of an unfavorable lease commitment that
was recorded in purchase accounting in fiscal 2003.

During the third quarter of fiscal 2005, the Company resolved an outstanding
business and occupation tax issue with the State of Washington. This resulted in
recognition of a $1.1 million pretax benefit due to elimination of a
preacquisition contingency that was recorded in purchase accounting in fiscal
2003.

Legal Matters: Birds Eye Foods is a party to various legal proceedings from time
to time in the normal course of its business. In the opinion of management, any
liability that the Company might incur upon the resolution of these proceedings
will not, in the aggregate, have a material adverse effect on the Company's
business, financial condition, or results of operations. The Company maintains
general liability insurance coverage in amounts deemed to be adequate by
management.

Subsequent Event: On July 25, 2006, the Company announced that it will
concentrate its resources on its brand businesses and increase its focus on new
products and marketing. As a result, the Company will be exiting from the vast
majority of its non-brand frozen business over the next 12 to 18 months, and
plans to sell five related production facilities. The non-brand frozen business,
with its lower margins, utilized resources which now can be freed up to drive
brand growth and to compete more aggressively with competitors who are not
producing non-brand frozen items.

The impacted facilities include: Brockport, Bergen and Oakfield, NY; Fairwater
WI; and Montezuma, GA. In total, these facilities employ approximately 740
full-time workers. Any facility not sold after its related production season in
fiscal 2007 will be closed between October 2006 and June 2007. In addition, the
decision to exit the non-brand frozen business will affect a number of
administrative positions in offices in Rochester, N.Y. and Green Bay, Wisconsin.
The Company's research and development facility will remain in Green Bay.

Another impact of this decision will be the closure of the Birds Eye Foods
facility in Watsonville, CA at the end of the 2006 calendar year. This facility
employs approximately 550 workers. The closure of the Watsonville facility will
result in the Company incurring approximately $3.5 million for employee
termination benefits during fiscal 2007. In addition, Birds Eye Foods will incur
a pension withdrawal liability of approximately $1.0 million to $1.5 million for
the Company's unfunded benefit obligation related to the Western Conference of
Teamsters Pension Trust multiemployer plan. Further, the Company anticipates it
will incur a non-cash charge in the first quarter of fiscal 2007 of
approximately $5.0 million to $6.0 million related to the tangible personal
property at the Watsonville facility.

In connection with these actions, the Company expects to take additional cash
and non-cash accounting charges. The Company anticipates incurring employee
termination benefits, environmental remediation costs associated with facility
closures and sales, accelerated depreciation, inventory markdowns, contract and
lease termination costs, and other exit costs. In addition, the Company may
incur asset impairment charges related to the impacted non-branded frozen
facilities. Currently, the Company is unable to make a determination of an
estimate or a range of estimates of these charges, individually or in the
aggregate.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

                                       60



<PAGE>


Birds Eye Foods management, with the participation of Birds Eye Foods' Principal
Executive Officer and Principal Financial Officer, evaluated the effectiveness
of the design and operation of Birds Eye Foods' disclosure controls and
procedures (as defined in Rule 15d - 15(e) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")). Based on that evaluation, Birds Eye
Foods' Principal Executive and Principal Financial Officers concluded that Birds
Eye Foods' disclosure controls and procedures as of June 24, 2006 (the end of
the period covered by this Report) have been designed and are functioning
effectively to provide reasonable assurance that the information required to be
disclosed by Birds Eye Foods in reports filed or submitted under the Exchange
Act is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms.

There were no changes to Birds Eye Foods' internal control over financial
reporting that occurred during the quarter ended June 24, 2006 that have
materially affected or are reasonably likely to materially affect Birds Eye
Foods' internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

On September 11, 2006, the Compensation Committee of the Board of Directors
approved the fiscal 2006 cash bonus compensation for the Named Executive
Officers identified in the Summary Compensation Table in this Report. The
bonuses will be paid on September 15, 2006. See "Summary Compensation Table" in
Item 11 of Part III of this Report for additional disclosures regarding the
bonus amounts.

On September 11, 2006, the Compensation Committee of the Board of Directors also
approved the Management Incentive Program as amended for fiscal 2007. Attached
hereto as Exhibit 10.5 is a copy of the Management Incentive Program, which
amends the Company's performance targets.

Birds Eye Foods previously filed a Form 8-K on July 25, 2006 announcing the
Company's exit from the vast majority of its non-brand frozen business over the
next 12 to 18 months, and plans to sell five related production facilities. In
addition, the Company announced its decision to close the Watsonville,
California facility at the end of the 2006 calendar year. In connection with the
Watsonville closure, the Company is currently able to estimate that it will
incur a non-cash charge in the first quarter of fiscal 2007 of approximately
$5.0 million to $6.0 million related to the tangible personal property at the
Watsonville facility.

In connection with the exit of the non-brand frozen business, the Company
expects to take additional cash and non-cash accounting charges. The Company
anticipates incurring employee termination benefits, environmental remediation
costs associated with facility closures and sales, accelerated depreciation,
inventory markdowns, contract and lease termination costs, and other exit costs.
In addition, the Company may incur asset impairment charges. Currently, the
Company is unable in good faith to make a determination of an estimate or a
range of estimates of these individual charges and is therefore unable to make a
determination regarding the total amount of costs expected to be incurred in
connection with these actions and the amount of the charge that will result in
future cash expenditures. The Company will file an amendment to its Form 8-K
Equivalent when the Company is able to make a good faith determination of such
estimates or range of estimates.

                                       61



<PAGE>


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Directors and Executive Officers: The Securityholders Agreement dated and
effective as of August 19, 2002 (and as amended from time to time, the
"Securityholders Agreement"), among Holdings LLC, Pro-Fac and Vestar, together
with others, includes a voting agreement pursuant to which the holders of
Holdings LLC common units agree to, among other things, vote their common units
and to take any other action necessary to elect or cause to be elected to Birds
Eye Foods' Board of Directors a specified number of directors designated by
Vestar (the "Vestar Directors"), a specified number of directors designated by
Pro-Fac (the "Pro-Fac Directors"), one director who shall be the Chief Executive
Officer of Birds Eye Foods (the "Management Director") and a specified number of
directors designated by Vestar who shall be independent of Holdings LLC, it's
subsidiaries' management (including Birds Eye Foods) and Vestar (the
"Independent Directors"). The Vestar Directors constitute a majority of the
directors of Birds Eye Foods. The Securityholders Agreement further prescribes a
minimum and maximum number of Directors of Birds Eye Foods.

Listed below are the directors and executive officers of the Company.

<TABLE>
<CAPTION>
           Name               Age(a)                                Positions
--------------------------   --------   ------------------------------------------------------------------
<S>                          <C>        <C>
Neil Harrison                   53      Chairman of the Board, President and Chief Executive Officer

Earl L. Powers                  62      Executive Vice President and Chief Financial Officer and Secretary

Carl W. Caughran                53      Executive Vice President - Specialty Food Group

Robert G. Montgomery            53      Senior Vice President - Frozen Sales

Peter R. Call(1)                49      Director

Stephen P. Donovan, Jr.(3)      65      Director

David M. Hooper(2)              38      Director

Kevin A. Mundt(2)               52      Director

Daniel S. O'Connell(2)          52      Director

Gregg A. Ostrander(2)           53      Director

Allan W. Overhiser(1)           46      Director

Brian K. Ratzan(2)              36      Director

Patrick W. Rose(2)              64      Director

David B. Vermylen(3)            55      Director
</TABLE>

----------
(a)   As of September 1, 2006.

(1)   Pro-Fac Director.

(2)   Vestar Director.

(3)   Independent Director.

                                       62



<PAGE>


Neil Harrison became Chairman, President and Chief Executive Officer of Birds
Eye Foods on September 8, 2005. Prior to joining the Company, he served as
Chairman and Chief Executive Officer of Atkins Nutritionals, Inc. from February
2005 to June 2005. Prior to that role, Mr. Harrison was with the H.J. Heinz
Company, where he served as an Executive Vice President of H.J. Heinz and
President and Chief Executive Officer of Heinz North America from 2002 to 2004.
Previously at Heinz, and from 1999 to 2002, Mr. Harrison was a Senior Vice
President and the President and Chief Executive Officer of Heinz Frozen Food
Company. His experience in consumer packaged goods also includes a variety of
positions at Miller Brewing Company, PepsiCo, Inc., General Foods Corporation
and Unilever.

Earl L. Powers has been Executive Vice President and Chief Financial Officer of
the Company since February 1997. He was named Secretary of the Company in
October 2002. He was Vice President and Corporate Controller of the Company from
March 1993 to February 1997, and Vice President Finance and Management
Information Systems of the Comstock Michigan Fruit business unit of Birds Eye
Foods from 1991 to March 1993. Prior to joining Birds Eye Foods, he was
Controller of various Pillsbury Company divisions from 1987 to 1990 and held
various other executive management positions at the Pillsbury Company from 1976
to 1987. He currently serves on the Board of Directors of JP Morgan Chase's
Northeast Advisory Board.

Carl W. Caughran has been Executive Vice President - Specialty Food Group since
January 2006. He also served as Executive Vice President - Operations of Birds
Eye Foods from 1999 to 2005 and President and Chief Executive Officer of the
Nalley Fine Foods business unit of Birds Eye Foods from 1996 to 1999. Prior to
joining the Company, he held various management positions at Borden Foods, Sara
Lee, Inc. and Campbell Soup.

Robert G. Montgomery has been Senior Vice President of Frozen Sales of the
Company since September 2003. Prior to joining Birds Eye Foods, he was with H.J.
Heinz Company where he held various senior management positions including Vice
President of Sales-Heinz Frozen Foods and Vice President of Sales for the
Western half of the United States for the consolidated Heinz Consumer Foods
Company. Prior to that, Mr. Montgomery has held management positions with Con
Agra, McCain and Sara Lee.

Peter R. Call became a Director of the Company in August 2002. He also serves as
a director of Pro-Fac and has served in such capacity since 2000. He produces
vegetables in Batavia, New York (My-T Acres, Inc. has been a member of Pro-Fac
since 1961).

Stephen P. Donovan, Jr. became a director of the Company in August 2003. Mr.
Donovan was employed with the Procter and Gamble Company for more than 30 years,
holding a wide range of executive positions, most recently President, Global
Beverage and North American Food & Beverage. Mr. Donovan is currently a director
of Consolidated Container Corp. and also a past director of Remington Products
Company, L.L.C.

David M. Hooper became a director of the Company in August 2002. Mr. Hooper is a
Managing Director of Vestar Capital Partners, an investment firm and affiliate
of Vestar Capital Partners IV, L.P., the sole member of Vestar/Agrilink Holdings
("Vestar Capital Partners"). Mr. Hooper joined Vestar in 1994.

Kevin A. Mundt became a director of the Company in November 2003. He joined
Vestar Capital Partners as a Managing Director in 2004. Prior to joining Vestar,
Mr. Mundt spent 24 years in management consulting, including various management
positions with Mercer Oliver Wyman and its predecessors. Mr. Mundt is currently
a director of Gold Toe Inc., Fiorucci, Spa, Sunrise Medical, Inc. and Duff and
Phelps LLC.

Daniel S. O'Connell became a director of the Company in August 2002. Mr.
O'Connell is the Chief Executive Officer and founder of Vestar Capital Partners.
Mr. O'Connell is also a director of Gold Toe Inc., FL Selenia, Spa, National
MENTOR Holdings, Inc., Solo Cup Company, Inc., Sunrise Medical, Inc., and St.
John Knits Co., Inc., companies in which Vestar or its affiliates have a
significant equity interest.

Gregg A. Ostrander became a director of the Company in October 2002. Mr.
Ostrander has been the Chairman, President, and Chief Executive Officer of
Michael Foods, Inc. since 1994. From 1989-1993 Mr. Ostrander served as President
of Swift Eckrich Prepared Foods a division of ConAgra. He has over 30 years
experience in the food industry. Mr. Ostrander is a director of Michael Foods,
Inc. and Arctic Cat Inc.

Allan W. Overhiser became a director of the Company in May 2004. He also serves
as a director of Pro-Fac and has served in such capacity since 1994. He produces
fruit in South Haven, Michigan (A.W. Overhiser Orchards has been a member of
Pro-Fac since 1984).

Brian K. Ratzan became a director of the Company in August 2002. Mr. Ratzan is a
Managing Director of Vestar Capital Partners. Mr. Ratzan joined Vestar in 1998.
Previously, he was a Vice President at Trace International Holdings, Inc., a
private investment firm. Prior to that, he was a member of the Corporate Finance
Group at Donaldson, Lufkin & Jenrette. Mr. Ratzan is also a director of National
MENTOR Holdings, Inc.

                                       63



<PAGE>


Patrick W. Rose became a director of the Company in February 2003. Mr. Rose
currently serves as a director of International House of Pancakes, Inc. Mr. Rose
served as Chairman of the Board, President, and Chief Executive Officer of Van
Camp Seafoods, Inc. from 1993 to 1997 and Chairman of the Board, President, and
Chief Executive Officer of Bumble Bee Seafoods, Inc. from 1984 to 1989.

David B. Vermylen became a director of the Company in February 2003. He is
currently President and Chief Operating Officer of TreeHouse Foods. From 1996 to
2002, he was with the Keebler Company, serving as its President and Chief
Executive Officer during 2001 to 2002. In 1995 he was Chairman, President, and
Chief Executive Officer of Brother's Gourmet Coffee. Prior to that he spent 20
years in the food industry, 14 years with General Foods in a variety of brand
management positions. Mr. Vermylen is also on the board of Aeropostale (ARO), a
specialty retailer of value priced, casual clothing and accessories targeted at
teenagers.

Involvement in Certain Legal Proceedings: Neil Harrison was previously Chairman
and Chief Executive Officer of Atkins Nutritionals, Inc. from February 2005 to
June 2005. On July 31, 2005, Atkins Nutritionals Inc. filed a petition under the
federal Bankruptcy laws. On January 10, 2006, Atkins Nutritionals Inc. announced
that it had emerged from bankruptcy by completing its Chapter 11 reorganization.

Code of Ethics: Birds Eye Foods currently maintains a Code of Ethics Policy for
all exempt employees including the Principal Executive Officer and Principal
Financial Officer. The Company intends to file a Form 8-K Equivalent for any
amendments to or waivers from its Code of Ethics Policy (to the extent
applicable to the Company's Principal Executive Officer and Principal Financial
Officer).

The Code of Ethics Policy was filed as an exhibit to Birds Eye Foods fiscal 2004
Form 10-K Equivalent.

Audit Committee Financial Expert: The Company is not an "Issuer" as such term is
defined in Section 7201 of the Sarbanes-Oxley Act of 2002 and therefore the
Company believes that its Audit Committee is not required to have at least one
member that is a financial expert.

ITEM 11. EXECUTIVE COMPENSATION

The following table shows for each of the fiscal years ended June 24, 2006, June
25, 2005 and June 26, 2004 the annual compensation paid to or earned by (i)
Birds Eye Foods' current and former Chief Executive Officer, (ii) the three
other most highly compensated individuals (based on total salary and bonus for
the last completed fiscal year) who were serving as executive officers at the
end of the fiscal year ended June 24, 2006 and (iii) an individual who would
constitute one of the four highly compensated officers (other than the Chief
Executive Officer) but for the fact that he was not serving as an executive
officer at the end of the last completed fiscal year. These individuals are
referred to as the "Named Executive Officers."

                                       64



<PAGE>


Executive Compensation
Summary Compensation Table

<TABLE>
<CAPTION>
                                                                 Annual Compensation
                                                     --------------------------------------------
                                                                                     Other                   All
                                                                                     Annual                 Other
Name and Principal Position                   Year     Salary     Bonus(1)       Compensation(2)       Compensation(12)
---------------------------                   ----   ----------   --------     ------------------     -----------------
<S>                                           <C>    <C>          <C>          <C>                    <C>
Neil Harrison(3)                              2006   $  488,625   $  500,000   $           55,137(4)  $          11,546
   Chairman of the Board, President,          2005   $        0   $        0   $                0     $               0
   and Chief Executive Officer                2004   $        0   $        0   $                0     $               0

Dennis M. Mullen(5)                           2006   $  162,597   $        0   $           40,407(2)  $       1,686,229(6)
   Former Chairman of the Board,              2005   $  625,988   $        0   $                0     $          10,930
   President, and Chief Executive Officer     2004   $  600,000   $  220,000   $                0     $          10,500

Earl L. Powers                                2006   $  330,544   $  174,900   $                0     $           7,979
   Executive Vice President and Chief         2005   $  329,994   $        0   $                0     $           9,625
   Financial Officer and Secretary            2004   $  316,473   $  110,000   $                0     $           9,261

Carl W. Caughran                              2006   $  285,529   $  151,050   $                0     $           8,441
   Executive Vice President - Specialty       2005   $  284,994   $        0   $                0     $          10,091
   Food Group                                 2004   $  264,100   $  130,000   $           32,716(7)  $           9,001

Robert G. Montgomery(8)                       2006   $  250,275   $  143,605   $           44,580(9)  $           7,316
   Senior Vice President - Frozen Sales       2005   $  243,700   $        0   $                0     $           4,246
                                              2004   $  187,535   $   70,000   $                0     $               0

David E. Hogberg(10)                          2006   $  139,600   $        0   $                0     $           3,271
   Executive Vice President - Marketing and   2005   $  314,994   $        0   $                0     $          10,481
   and Business Development                   2004   $  301,204   $  120,000   $           19,177(11) $           6,037
</TABLE>

(1)   Pursuant to the Management Incentive Plan of the Company (the "Incentive
      Plan"), additional compensation is paid if justified by the activities of
      the officers and employees eligible under the Incentive Plan and by the
      earnings of the Company. Performance targets are established annually by
      the Company's Executive Committee.

(2)   Perquisites and other personal benefits provided to executive officers
      include such items as car allowances, club dues, financial planning and
      chartered planes. Mr. Mullen was the only Named Executive Officer who
      received perquisites or other personal benefits, during fiscal 2006 in
      excess (in the aggregate) of the lesser of $50,000 or 10% of the Named
      Executive Officer's annual salary and bonus reported. Pursuant to SEC
      rules, each perquisite exceeding 25% of the aggregate amount of total
      perquisites reported must be disclosed. During fiscal 2006, Mr. Mullen
      received $18,066 for a car allowance and related taxes, $12,648 for
      personal travel expenses and related travel, and $9,693 for club dues.

(3)   On September 8, 2005, Mr. Harrison joined the organization as Chairman of
      the Board, President, and Chief Executive Officer.

(4)   Mr. Harrison's temporary housing and moving expenses of $50,637 related to
      his relocation to Rochester, NY and $4,500 in premiums for a $1.5 million
      term life insurance policy were paid during fiscal 2006 pursuant to his
      employment contract.

(5)   Mr. Mullen stepped down as Chairman of the Board, President, and Chief
      Executive Officer effective September 7, 2005.

(6)   Pursuant to Mr. Mullen's Separation Agreement, during the period November
      1, 2005 through October 1, 2007 Mr. Mullen is entitled to receive an
      aggregate severance amount of $1,668,000 and benefits estimated at
      $17,416. As outlined in the Separation Agreement, the severance amounts
      are allocated as follows: $625,500 in fiscal 2006, $834,000 in fiscal 2007
      and $208,500 in fiscal 2008. The benefits are allocated as follows: $6,531
      in fiscal 2006, $8,708 in fiscal 2007, and $2,177 in fiscal 2008. In
      addition, in fiscal 2006 the Company made 401(k) matching contributions
      of $813.

(7)   Mr. Caughran's relocation expenses of $32,716 were paid during fiscal 2004
      pursuant to the Company's relocation policy.

(8)   Mr. Montgomery joined the Company on September 9, 2003.

(9)   Mr. Montgomery's temporary housing expenses and related taxes of $44,580
      for his relocation to Rochester, NY were paid in fiscal 2006.

(10)  Mr. David Hogberg resigned effective December 9, 2005.

(11)  Mr. Hogberg's relocation expenses of $19,177 were paid during fiscal 2004,
      pursuant to the Company's relocation policy.

(12)  All other compensation consists exclusively of 401(k) matching
      contributions except with respect to Mr. Mullen.

                                       65



<PAGE>


Retirement Plans: The Company's Master Salaried Retirement Plan (the "Pension
Plan") provided defined retirement benefits for its officers and all salaried
exempt and non-exempt personnel. This plan was amended to freeze benefit
accruals effective September 2001. Participants who, on that date, were actively
employed and had attained the age of 40, completed five years of vesting
service, and whose sum of age and vesting service was 50 or more, were
grandfathered. Grandfathered participants are entitled to continue to earn
benefit service in accordance with the provisions of the plan with respect to
periods of employment after September 2001, but in no event beyond September
2006.

For retirement before age 65, the annual benefits are reduced by an amount for
each year prior to age 65 at which such retirement occurs so that if retirement
occurs at age 55, the benefits are 70 percent of those payable at age 65.

The Company maintains an Excess Benefit Retirement Plan which serves to provide
employees with the same retirement benefit they would have received from the
Company's Master Salaried Retirement Plan under the career average base pay
formula, but for changes required under the 1986 Tax Reform Act and the
compensation limitation under Section 401(a)(17) of the Internal Revenue Code,
which was $150,000 on January 1, 1994, having been revised in the 1992 Omnibus
Budget Reform Act. In September 2001, the Company made the decision to freeze
benefits in the same manner as described for the Master Salaried Retirement
Plan.

In fiscal 2001, the Company adopted a non-tax qualified Supplemental Executive
Retirement Agreement ("SERA") which provides additional retirement benefits to
Dennis M. Mullen, the Company's former Chairman, President and Chief Executive
Officer. The Separation Agreement with Dennis M. Mullen amended the SERA so as
to provide full retirement benefits as outlined in the SERA beginning January 1,
2009. The Company has not pre-funded this liability at June 24, 2006. The
projected and accumulated benefit obligation under the plan at June 24, 2006 was
$5.8 million.

The following table shows the estimated pension benefits payable to a covered
participant, at age 65, at the specified final average pay, and years of
credited service levels under the Company's Master Salaried Retirement Plan and
the Excess Benefit Retirement Plan.

                               Pension Plan Table

<TABLE>
<CAPTION>
                                        Years of Plan Participation
   Final      -------------------------------------------------------------------------------
Average Pay         15              20                25               30             35
-----------   -------------   --------------   ---------------   --------------   -----------
<S>           <C>             <C>              <C>               <C>              <C>
$   125,000   $      21,563   $       28,750   $        35,938   $       43,125   $   50,313
    150,000          25,875           34,500            43,125           51,750       60,375
    175,000          30,188           40,250            50,313           60,375       70,438
    200,000          34,500           46,000            57,500           69,000       80,500
    225,000          38,813           51,750            64,688           77,625       90,563
    250,000          43,125           57,500            71,875           86,250      100,625
    275,000          47,438           63,250            79,063           94,875      110,688
    300,000          51,750           69,000            86,250          103,500      120,750
    325,000          56,063           74,750            93,438          112,125      130,813
    350,000          60,375           80,500           100,625          120,750      140,875
    375,000          64,688           86,250           107,813          129,375      150,938
    400,000          69,000           92,000           115,000          138,000      161,000
    425,000          73,313           97,750           122,188          146,625      171,063
    450,000          77,625          103,500           129,375          155,250      181,125
    475,000          81,938          109,250           136,563          163,875      191,188
    500,000          86,250          115,000           143,750          172,500      201,250
</TABLE>

The estimated pension benefits are calculated based on straight-line annuity
amounts and are not subject to any deduction for Social Security or other offset
amounts.

The approximate number of years of Plan participation under the Company's
Pension Plan as of June 24, 2006, of the Named Executive Officers listed in the
Summary Compensation Table are as follows: Dennis M. Mullen-16, Earl L.
Powers-14 and Carl W. Caughran-9. Mr. Harrison, Mr. Hogberg and Mr. Montgomery
joined the Company after the Pension Plan was frozen and therefore have no years
of Plan participation. The compensation upon which the pension benefits are
determined is included in the salary and bonus columns of the "Summary
Compensation Table."

In addition, Birds Eye Foods also maintains a Non-Qualified 401(k) Plan in which
the Company allocates matching contributions for the benefit of "highly
compensated employees" as defined under Section 414(q) of the Internal Revenue
Code.

                                       66



<PAGE>


Employment Contracts, Termination of Employment, and Change-in-Control
Arrangements: The Company entered into an Employment Agreement (the "Agreement")
with Mr. Harrison dated September 2, 2005. The Agreement states that Mr.
Harrison's annual base salary will be at least $600,000, and will be reviewed
for increases periodically in accordance with Company policy, but cannot be
decreased. Mr. Harrison will receive a guaranteed bonus for the Company's fiscal
year ending June 24, 2006 of $350,000, pro-rated for his employment during the
Company's 2006 fiscal year.

The Agreement further states that Mr. Harrison's targeted annual bonus under the
Company's Management Incentive Plan will be no less than $350,000, and that he
is eligible for a bonus of at least $400,000 upon the achievement of "Superior
Bonus Criteria" as defined by the Board of Directors. In addition to the
established benefit plans of the Company, Mr. Harrison will be provided with a
term life insurance policy of up to $1,500,000, provided, however that the total
cost of such insurance is no more than $12,000 per year. Mr. Harrison will also
be provided with assistance for his relocation to Rochester, New York.

The Agreement states that Mr. Harrison's Employment Period will commence on
September 8, 2005 continuing for four years, but will automatically renew for
additional one-year terms unless an advance notice of non-renewal is provided by
either party to the other at least 90 days prior to the expiration of the
Employment Period, (such period, the "Employment Period"). The Agreement
provides that, in general, for two years following the termination of his
employment, Mr. Harrison will not compete in the frozen vegetable, frozen fruit,
frozen skillet meal or the fruit or pie filling lines of business of the Company
or any line of business (other than those currently engaged in by the Company)
that accounts for 10% or more of the revenues or net operating cash flows of the
Company any time during the Employment Period. In addition, the Agreement
provides that for one year following termination, Mr. Harrison will not solicit
for employment any of the employees of the Company.

The employment agreement provides for termination and severance benefits equal
to two years of Mr. Harrison's base salary and bonus (defined as the bonus paid
to him for the preceding fiscal year and if in fiscal 2006, $350,000), and
benefit continuation, if, during his Employment Period with the Company, Mr.
Harrison's employment is terminated by the Company without cause or a voluntary
termination by Mr. Harrison for "Good Reason" (generally defined as a material
breach in the terms of the Agreement by the Company or a material change in Mr.
Harrison's employment circumstances by the Company).

In the event that any of the termination benefits that would be paid to Mr.
Harrison would constitute a "parachute payment" within the meaning of Section
280G of the Internal Revenue Code of 1986, such payment or benefits payable to
him will be reduced to the extent necessary so that no portion of such payments
or benefits shall be subject to the excise tax imposed by Section 4999 of the
Code, provided, however that such reduction shall only be made if, by reason of
such reduction, Mr. Harrison's net after tax benefit shall exceed the net after
tax benefit if such reduction were not made.

On November 1, 2005, Birds Eye Foods and Dennis M. Mullen, former Chairman,
President Chief Executive Officer and Principal Executive Officer of Birds Eye
Foods, entered into a Separation and General Release Agreement (the "Separation
Agreement"), made as of September 30, 2005, that outlines the payments and
benefits to be provided to Mr. Mullen in connection with his departure from
Birds Eye Foods. Under the Separation Agreement, and in accordance with the
Salary Continuation Agreement dated August 22, 2001 between Mr. Mullen and Birds
Eye Foods, for a period of two years, Mr. Mullen is entitled to an annual amount
equal to $834,000, payable in monthly pro rata installments, less applicable
taxes, and may participate in the health, life and disability insurance benefit
plans of Birds Eye Foods. The Separation Agreement amends Birds Eye Foods'
Supplemental Executive Retirement Agreement, dated July 1, 2000, with Mr.
Mullen, so as to provide Mr. Mullen with full retirement benefits as outlined in
the Supplemental Executive Retirement Agreement beginning January 1, 2009. The
Separation Agreement also requires Mr. Mullen to maintain the confidentiality of
certain information about Birds Eye Foods and its affiliates; continues Mr.
Mullen's obligations as to non-competition and non-solicitation; and provides
that Mr. Mullen will provide Birds Eye Foods with certain consulting services,
at Birds Eye Foods' discretion, for a period of two years or some shorter period
as determined by Birds Eye Foods.

Directors' Compensation: Effective as of August 19, 2002 (the Closing Date of
the Transaction), directors serving on Birds Eye Foods' Board of Directors who
are employees of Vestar Capital Partners and the Management Director are not
entitled to an annual retainer. All other directors are paid an annual retainer
of $14,000 each, $3,500 for each board meeting attended in person, and $1,000
for each subcommittee meeting attended. All directors receive reimbursement for
reasonable out-of-pocket expenses incurred in connection with meetings of the
Board.

Compensation Committee Interlocks and Insider Participation: For fiscal 2006,
the members of the Compensation Committee of the Board of Directors were Mr.
Daniel O'Connell, Mr. David Hooper and Mr. Peter Call.

Neither Mr. O'Connell, Mr. Hooper, nor Mr. Call is an officer or employee, or
former officer or employee of Birds Eye Foods or any of its subsidiaries. Mr.
Hooper is a Managing Director of Vestar Capital Partners and Mr. O'Connell is
the Chief Executive Officer and founder of Vestar Capital Partners. Vestar
Capital Partners provides advisory and consulting services to Holdings, Inc. and
Birds Eye Foods. Mr. Call is also a director and member-grower of Pro-Fac.
During fiscal 2006, Mr. Call received payments indirectly from Birds Eye Foods
through Pro-Fac in consideration for crops delivered by him (or by entities
owned or controlled by him) to Pro-Fac, which were subsequently sold to Birds
Eye Foods, and directly from Birds Eye Foods for harvesting and hauling services

                                       67



<PAGE>


provided and crops delivered by him (or by entities owned or controlled by him)
to Birds Eye Foods. During fiscal 2006, Mr. Call received $3.5 million in
consideration for crop deliveries and harvesting and hauling services.

No interlocking relationship exists between the members of Birds Eye Foods Board
or Compensation Committee and the board of directors or compensation committee
of any other company.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

Birds Eye Foods is a wholly-owned subsidiary of Holdings, Inc., a corporation
wholly-owned by Holdings LLC, whose members include affiliates of Vestar,
Pro-Fac, and certain members of management.

On September 1, 2006, Birds Eye Foods had 11,000 shares of common stock issued
and outstanding, all of which were owned by Holdings, Inc., a wholly-owned
subsidiary of Holdings LLC. On September 1, 2006, Holdings LLC had issued and
outstanding 1,009 preferred units, 443,878 Class A common units, 321,429 Class B
common units, 16,316 Class C common units, 18,426 Class D common units, and
3,974 Class E common units.

The Class A common units entitle the owner thereof to two votes for each Class A
common unit held. All other Holdings LLC common units entitle the holder(s)
thereof to one vote for each common unit held. The preferred units are generally
nonvoting, unless otherwise required by law or under the Limited Liability
Company Agreement. For a description of the Limited Liability Company Agreement,
see the discussion below under the heading "Certain Relationships and Related
Transactions."

The following table sets forth information regarding the beneficial ownership
(through their ownership of equity securities of Holdings LLC) as of September
1, 2006, of (i) each person or entity (including any group) who is known by
Birds Eye Foods to own beneficially more than 5 percent of Birds Eye Foods'
common stock and (ii) each director, the Chief Executive Officer and each other
executive officer included in the Summary Compensation Table, and all directors
and current executive officers as a group, as to each class of equity securities
of Holdings LLC.

To the Company's knowledge, all voting securities are subject to the named
person's sole voting and investment power except where otherwise indicated.
Beneficial ownership is determined in accordance with rules of the Securities
and Exchange Commission and generally includes voting or investment power with
respect to securities.

                                       68



<PAGE>


                          SECURITIES BENEFICIALLY OWNED

<TABLE>
<CAPTION>
                                            Common Units Class                           % of Class
                                                                                                                   Preferred  % of
                                   A         B        C        D       E       A       B      C      D       E       Units    Class
                                -------   -------   -----   ------   -----   -----   -----   ----   ----   -----   ---------  ------
<S>                             <C>       <C>       <C>     <C>      <C>      <C>    <C>     <C>    <C>    <C>     <C>        <C>
PRINCIPAL SECURITY- HOLDERS:
Vestar Associates IV, L.P.(1)   443,878        --      --       --      --   100.0%     --     --     --      --    1,000     99.1%
Pro-Fac Cooperative, Inc.(2)         --   321,429      --       --      --      --   100.0%    --     --      --       --       --

DIRECTORS AND EXECUTIVE
   OFFICERS
Neil Harrison(3)                     --        --   3,500    7,250   1,184      --      --   21.5%  39.3%   29.8%     2.9        *
Dennis M. Mullen(3),(7)              --        --     885    2,874      --      --      --    5.4%  15.6%     --       --       --
Earl Powers(3)                       --        --     751    1,423      --      --      --    4.6%   7.7%     --       --       --
Carl W. Caughran(3)                  --        --     590    1,750      --      --      --    3.6%   9.5%     --       --       --
Robert G. Montgomery                 --        --     492      951      --      --      --    3.0%   5.2%     --       --       --
Peter R. Call                        --        --      --       --      --      --      --     --     --      --       --       --
Stephen P. Donovan, Jr.              --        --      --       --     634      --      --     --     --    15.9%     1.4        *
David M. Hooper(4)                   --        --      --       --      --      --      --     --     --      --       --       --
Kevin A. Mundt                       --        --      --       --     507      --      --     --     --    12.8%     1.1        *
Daniel S. O'Connell(5)               --        --      --       --      --      --      --     --     --      --       --       --
Gregg A. Ostrander                   --        --      --       --     507      --      --     --     --    12.8%     1.1        *
Allan W. Overhiser                   --        --      --       --      --      --      --     --     --      --       --       --
Brian K. Ratzan(6)                   --        --      --       --      --      --      --     --     --      --       --       --
Patrick W. Rose                      --        --      --       --     634      --      --     --     --    15.9%     1.4        *
David B. Vermylen                    --        --      --       --     507      --      --     --     --    12.8%     1.1        *

All directors
  and officers
  as a group (15 persons)            --        --   6,218   14,248   3,973      --      --   38.1%  77.3%  100.0%     9.0        *
</TABLE>

----------
* Less than 1%.

(1) Amount of beneficial ownership includes, Class A common units and preferred
units owned by Vestar/Agrilink Holdings LLC, Vestar/Agrilink Associates Holdings
LLC, Vestar/Agrilink Associates II Holdings LLC and Randolph Street Partners V.
Vestar Associates IV, L.P. is the sole general partner of Vestar Capital
Partners IV, L.P., which is the sole member and manager of Vestar/Agrilink
Holdings LLC. Vestar Associates IV, L.P. is also the sole manager of
Vestar/Agrilink Associates Holdings LLC and Vestar/Agrilink Associates II
Holdings LLC. Randolph Street Partners V has delivered its voting proxy to
Vestar Associates IV, L.P. with respect to the Class common units and preferred
units owned by it. The general partner of Vestar Associates IV, L.P. is Vestar
Associates Corporation IV ("VAC-IV"). As such, VAC-IV has sole voting and
dispositive power over the units owned by Vestar/Agrilink Holdings LLC,
Vestar/Agrilink Associates Holdings LLC and Vestar/Agrilink Associates II
Holdings, and has sole voting power and shared dispositive power over the units
owned by Randolph Street Partners V. The address for Vestar Associates IV, L.P.
is c/o Vestar Capital Partners, 245 Park Avenue, 41st Floor, New York, New York
10167.

(2) The address for Pro-Fac Cooperative, Inc. is 590 Willow Brook Office Park,
Fairport, New York 14450.

(3) The address for each of the Named Executive Officers is c/o Birds Eye Foods,
Inc., 90 Linden Oaks, PO Box 20670, Rochester, NY 14602-0670.

(4) Mr. Hooper is a Managing Director of VAC-IV. Individually, no stockholder,
director or officer of VAC-IV has or shares voting or dispositive power within
the meaning of Rule 13d-3 under the Securities Exchange Act of 1934 over the
securities beneficially owned by Vestar Associates IV, L.P. Mr. Hooper disclaims
beneficial ownership of the securities beneficially owned by Vestar Associates
IV, L.P., except to the extent of his pecuniary interest therein.

(5) Mr. O'Connell is a Managing Director of VAC-IV. Individually, no
stockholder, director or officer of VAC-IV has or shares voting or dispositive
power within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934
over the securities beneficially owned by Vestar Associates IV, L.P. Mr.
O'Connell disclaims beneficial ownership of the securities beneficially owned by
Vestar Associates IV, L.P., except to the extent of his pecuniary interest
therein.

(6) Mr. Ratzan is a Managing Director of VAC-IV. Individually, no stockholder,
director or officer of VAC-IV has or shares voting or dispositive power within
the meaning of Rule 13d-3 under the Securities Exchange Act of 1934 over the
securities beneficially owned by Vestar Associates IV, L.P. Mr. Ratzan disclaims
beneficial ownership of the securities beneficially owned by Vestar Associates
IV, L.P., except to the extent of his pecuniary interest therein.

(7) Mr. Mullen stepped down as Chairman, President and Chief Executive Officer
effective September 7, 2005.

                                       69



<PAGE>


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

CERTAIN AGREEMENTS RELATING TO THE TRANSACTION

As part of the August 19, 2002 Transaction, Birds Eye Foods entered into various
agreements, with others, that govern the business relationship between Birds Eye
Foods and Pro-Fac - the Amended and Restated Marketing and Facilitation
Agreement, the Termination Agreement, the Transitional Services Agreement and
the Credit Facility. The respective ownership rights in Holdings LLC are set out
in the Securityholders Agreement and the Limited Liability Company Agreement.
See NOTE 2 to the "Notes to Consolidated Financial Statements" for a discussion
of the Amended and Restated Marketing and Facilitation Agreement, the
Termination Agreement, the Transitional Services Agreement and the Credit
Facility, which discussion is incorporated into this Item 13. A discussion of
the Securityholders Agreement and the Limited Liability Company Agreement can be
found below.

Securityholders Agreement: Holdings LLC, Pro-Fac and Vestar, together with
others, including officers of Birds Eye Foods (the "Management Investors"),
entered into a securityholders agreement dated August 19, 2002 (and as amended
from time to time, the "Securityholders Agreement") containing terms and
conditions relating to the transfer of membership interests in and the
management of Holdings LLC. Among other things, the Securityholders Agreement
includes a voting agreement pursuant to which the holders of common units agree
to vote their common units and to take any other action necessary to cause the
authorized number of members or directors for each of the respective management
committees or boards of directors of Holdings LLC, Holdings, Inc. and Birds Eye
Foods and to elect or cause to be elected to the respective management
committees or boards of directors of Holdings LLC, Holdings Inc and Birds Eye
Foods a specified number of directors designated by Vestar (the "Vestar
Directors"), a specified number of directors designated by Pro-Fac (the "Pro-Fac
Directors"), one director who shall be the Chief Executive Officer of Birds Eye
Foods (the "Management Director") and a specified number of directors designated
by Vestar who shall be independent of Holdings LLC, it's subsidiaries'
management (including Birds Eye Foods) and Vestar (the "Independent Directors").
The Vestar Directors constitute a majority of the directors of Birds Eye Foods.
The Securityholders Agreement further prescribes a minimum and maximum number of
Directors of Birds Eye Foods.

The voting agreement further provides, that the holders of common units shall
vote their common units as directed by Vestar with respect to the approval of
any amendment(s) to the Limited Liability Company Agreement, the merger, unit
exchange, combination or consolidation of Holdings LLC, the sale, lease or
exchange of all or substantially all of the property and assets of Holdings LLC
and its subsidiaries, including Birds Eye Foods, and the reorganization,
recapitalization, liquidation, dissolution, or winding-up of Holdings LLC,
provided such action is not inconsistent with the Limited Liability Company
Agreement or the Securityholders Agreement and further provided such action
shall not have a material adverse effect on a unit holder that would be borne
disproportionately by such unit holder.

The Securityholders Agreement also provides:

o     Pro-Fac and the Management Investors with "tag-along" rights in connection
      with certain transfers of Holdings LLC units by Vestar;

o     Vestar with rights, "take-along" rights, to require Pro-Fac and Management
      Investors to consent to a proposed sale of Holdings LLC; and

o     Pro-Fac and Vestar with demand registration rights, in securities of a
      subsidiary of Holdings LLC, including Birds Eye Foods, which are acquired
      by them through a distribution by Holdings LLC of such securities in
      exchange for their respective units in Holdings LLC, such distributed
      securities being "Registrable Securities", and other unit holders,
      including Management Investors with incidental registration rights in the
      Registrable Securities owned by such unit holders.

The Securityholders Agreement provides Pro-Fac and the Management Investors
certain pre-emptive rights with respect to new securities of Holdings LLC or any
of its subsidiaries proposed to be issued to Vestar or any affiliate of Vestar.
Further, Vestar has the right to modify the Securityholders Agreement without
the consent of Pro-Fac, the Management Investors or any other unit holder if the
amendment cannot reasonably be expected to have a material adverse effect on a
unit holder that would be borne disproportionately by such unit holder or the
amendment does not adversely affect any unit holder of Holdings LLC in any
material respect and it is in connection with a change that cures any ambiguity
or corrects or supplements a provision of the Securityholders Agreement.

Limited Liability Company Agreement of Birds Eye Holdings LLC: Pro-Fac and
Vestar, together with others, are parties to a limited liability company
agreement dated August 19, 2002 (the "Limited Liability Company Agreement") that
contains terms and conditions relating to the management of Holdings LLC and its
subsidiaries (including Birds Eye Foods), the distribution of profits and losses
and the rights and limitations of members of Holdings LLC.

                                       70



<PAGE>


Management Agreement: Birds Eye Foods, Holdings, Inc. and Vestar Capital
Partners entered into a management agreement dated as of August 19, 2002 (the
"Management Agreement") pursuant to which Vestar Capital Partners, an investment
firm and affiliate of Vestar Capital Partners IV, L.P., a Delaware limited
partnership and the sole member of Vestar/Agrilink Holdings ("Vestar Capital
Partners"), provides advisory and consulting services to Holdings, Inc. and
Birds Eye Foods. In consideration for such services, Holdings, Inc. and Birds
Eye Foods, jointly and severally, pay Vestar Capital Partners an annual
management fee equal to the greater of $1.0 million or 0.7 percent of Birds Eye
Foods' earnings, before interest, tax, depreciation and amortization.

The Management Agreement does not include investment banking or other financial
advisory services in connection with acquisitions, divestitures, refinancings,
or restructurings. In fiscal 2005, Birds Eye Foods paid $0.5 million to Vestar
Capital Partners for services rendered by Vestar in relation to Birds Eye Foods,
Inc.'s acquisition of California and Washington Company.

The foregoing description of agreements is only a summary and reference is made
to those agreements, copies of which are filed as exhibits to this Form 10-K
Equivalent or, although included in the Exhibit Index to this report, have been
previously filed by Birds Eye Foods with the SEC. Each statement is qualified in
its entirety by such reference.

Purchase of Crops From Pro-Fac: Pro-Fac delivers crops grown by its members to
Birds Eye Foods for processing and marketing. Pro-Fac members sell crops grown
by its members pursuant to general marketing agreements between Pro-Fac and its
members. Pro-Fac, in turn, sells those crops to Birds Eye Foods.

Mr. Peter Call and Mr. Overhiser served on both Pro-Fac's and Birds Eye Foods'
Board of Directors during fiscal 2006. Each of Messrs. Call and Overhiser are
also member-growers of Pro-Fac. These Birds Eye Foods directors receive payments
indirectly from Birds Eye Foods through Pro-Fac in consideration for crops
delivered by them to Pro-Fac, which are subsequently sold to Birds Eye Foods. In
addition, Messrs. Overhiser and Call received payments directly from Birds Eye
Foods during fiscal 2006 for harvesting and hauling services provided and crops
delivered by them (or by entities owned or controlled by them) to Birds Eye
Foods.

During fiscal year 2006, the following directors of Birds Eye Foods, directly or
indirectly through entities owned or controlled by such directors, received
payments from Birds Eye Foods, either indirectly through Pro-Fac for crops or
directly from Birds Eye Foods for crops, harvesting and hauling services:

(Dollars in Thousands)

<TABLE>
<CAPTION>
                                                 RELATIONSHIP TO                        GROSS PURCHASES
      NAME                                  PRO-FAC/BIRDS EYE FOODS                     FISCAL YEAR 2006
------------------         ----------------------------------------------------------   ----------------
<S>                        <C>                                                          <C>
Peter R. Call ..........   Director(Birds Eye Foods & Pro-Fac) and President(Pro-Fac)       $  3,523
Allan W. Overhiser .....   Director(Birds Eye Foods & Pro-Fac)                              $    110
</TABLE>

----------
Mr. Overhiser and Mr. Call are the current "Pro-Fac Directors" pursuant to the
Securityholders Agreement.

                   DIRECTORS AND OFFICERS LIABILITY INSURANCE

As authorized by Delaware law and in accordance with the policy of that state,
the Company has obtained insurance from Axis Surplus Insurance Company and Great
American Insurance Company insuring the Company against any obligation it incurs
as a result of its indemnification of its officers and directors, and insuring
such officers and directors for liability against which they may not be
indemnified by the Company. This insurance has a term expiring on August 19,
2007 at an annual cost of approximately $125,000. As of this date, no sums have
been paid to any officers or directors of the Company under this indemnification
insurance contract.

                                       71



<PAGE>


ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Deloitte & Touche LLP is the Company's independent auditor. The following table
sets forth the aggregate fees billed to the Company for the fiscal years ended
June 24, 2006 and June 25, 2005 by Deloitte & Touche LLP:

                              2006         2005
                           ----------    ---------

Audit Fees                 $  267,000    $ 250,000
Audit-Related Fees             26,000       23,400
Tax Fees                      129,618      365,174
All Other Fees                      0      307,026
                           ----------    ---------
Total                      $  422,618    $ 945,600
                           ==========    =========

Audit Fees: These are fees for professional services rendered for the audit of
the Company's consolidated annual financial statements, review of the
consolidated financial statements included in the Company's quarterly reports on
Form 10-Q Equivalent, and the audit of Holdings LLC and Holdings Inc. annual
financial statements.

Audit-Related Fees: These are fees for employee benefit plan audits.

Tax Fees: These are fees for professional services rendered regarding tax
compliance, tax advice or tax planning.

All Other Fees: These are fees for services provided by our independent
accountant primarily for due diligence and other services related to the
acquisition of C&W.

PRE-APPROVAL POLICIES AND PROCEDURES

The Audit Committee has adopted policies and procedures relating to the approval
of all audit and non-audit services that are to be performed by the Company's
independent auditor. This policy generally provides that the Company will not
engage our independent auditor to render audit or non-audit services unless the
service is specifically approved in advance by the Audit Committee or the
engagement is entered into pursuant to one of the pre-approval procedures
described below.

From time to time, the Audit Committee may pre-approve specified types of
services that are expected to be provided by the Company's independent auditor
during the next 12 months. Any such pre-approval is detailed as to the
particular service or type of services to be provided and is also generally
subject to a maximum dollar amount.

The Audit Committee has also delegated to the chairman of the Audit Committee
the authority to approve any audit or non-audit services to be provided by the
Company's independent auditor. Any approval of services by the Audit Committee
chairman pursuant to this delegated authority is reported on at the next meeting
of the Audit Committee. All services provided by Deloitte & Touche LLP in the
fiscal year ended June 24, 2006 were pre-approved by the Audit Committee or
chairman of the Audit Committee as so delegated.

                                       72



<PAGE>


                                     PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

      (a)   (1) FINANCIAL STATEMENTS. The following Financial Statements and
            Supplementary data of Birds Eye Foods and the Report of Independent
            Registered Public Accounting Firm are included in Part II, Item 8 of
            this Report:

                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
         ITEM                                                                       Page
         ----                                                                       ----
<S>                                                                                 <C>
Birds Eye Foods, Inc. and Consolidated Subsidiaries:

   Report of Independent Registered Public Accounting Firm .....................     27
   Consolidated Statements of Operations and Comprehensive Income for the years
      ended June 24, 2006, June 25, 2005 and June 26, 2004, ....................     28
   Consolidated Balance Sheets at June 24, 2006 and June 25, 2005 ..............     29
   Consolidated Statements of Cash Flows for the years ended June 24, 2006,
      June 25, 2005 and June 26, 2004 ..........................................     30
   Consolidated Statements of Shareholder's Equity for the years ended June 24,
      2006, June 25, 2005 and June 26, 2004 ....................................     31
Notes to Consolidated Financial Statements .....................................     32
</TABLE>

                                       73



<PAGE>


      (2)   Financial Statement Schedule:

            SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                                                                     SCHEDULE II

Birds Eye Foods, Inc. and subsidiaries
Valuation and Qualifying Accounts
For the Three Fiscal Years Ended June 24, 2006, June 25, 2005 and June 26, 2004

<TABLE>
<CAPTION>
                                                       Fiscal Year Ended
                                         ---------------------------------------------
                                         June 24, 2006   June 25, 2005   June 26, 2004
                                         -------------   -------------   -------------
<S>                                      <C>             <C>             <C>
Allowance for doubtful accounts
  Balance at beginning of period         $   1,123,000    $    993,000    $    978,000
  Additions charged to expense                 435,000         265,000         298,000
  Deductions                                  (410,000)       (345,000)       (283,000)
  Increase due to acquisition of C&W**               0         210,000               0
                                         -------------    ------------    ------------
  Balance at end of period               $   1,148,000    $  1,123,000    $    993,000
                                         =============    ============    ============

Tax valuation allowance*
  Balance at beginning of period         $  19,209,000    $ 18,873,000    $ 16,293,000
  Net change                                   245,000         336,000       2,580,000
                                         -------------    ------------    ------------
Balance at end of period                 $  19,454,000    $ 19,209,000    $ 18,873,000
                                         =============    ============    ============
</TABLE>

*     See further discussion regarding tax matters at NOTE 10 to the "Notes to
      Consolidated Financial Statements."

**    See NOTE 3 to the "Notes to Consolidated Financial Statements" for
      additional disclosures regarding the acquisition of C&W.

Schedules other than those listed above are omitted because they are either not
applicable or not required, or the required information is shown in the
financial statements or the notes thereto.

(3)   Exhibits: The exhibits listed in the accompanying Exhibit Index are filed
      or have been previously filed and are incorporated by reference as part of
      this Form 10-K Equivalent.

                                       74



<PAGE>


                                   SIGNATURES

The Company has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                                BIRDS EYE FOODS, INC.

Date: September 14, 2006               By: /s/ Earl L. Powers
                                           -------------------------------------
                                                      Earl L. Powers
                                               Executive Vice President and
                                           Chief Financial Officer and Secretary
                                               (Principal Financial Officer)

                                POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Earl L. Powers, his true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all
amendments to this Form 10-K Equivalent and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.

                                       75



<PAGE>


This report has been signed below by the following persons on behalf of the
Company and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
           SIGNATURE                               TITLE                          DATE
<S>                                <C>                                     <C>
/s/ Neil Harrison                  Chairman of the Board, President         September 14, 2006
--------------------------------   and Chief Executive Officer             -------------------
    (NEIL HARRISON)                (Principal Executive Officer)

/s/ Peter R. Call                  Director                                 September 11, 2006
--------------------------------                                           -------------------
    (PETER R. CALL)

/s/ Stephen P. Donovan, Jr.        Director                                 September 11, 2006
--------------------------------                                           -------------------
    (STEPHEN P. DONOVAN, Jr.)

/s/ David M. Hooper                Director                                 September 11, 2006
--------------------------------                                           -------------------
    (DAVID M. HOOPER)

/s/ Kevin A. Mundt                 Director                                 September 11, 2006
--------------------------------                                           -------------------
    (KEVIN A. MUNDT)

/s/ Daniel S. O'Connell            Director                                 September 11, 2006
--------------------------------                                           -------------------
    (DANIEL S. O'CONNELL)

/s/ Gregg A. Ostrander             Director                                 September 11, 2006
--------------------------------                                           -------------------
    (GREGG A. OSTRANDER)

/s/ Allan W. Overhiser             Director                                 September 11, 2006
--------------------------------                                           -------------------
    (ALLAN W. OVERHISER)

/s/ Brian K. Ratzan                Director                                 September 11, 2006
--------------------------------                                           -------------------
    (BRIAN K. RATZAN)

/s/ Patrick W. Rose                Director                                 September 11, 2006
--------------------------------                                           -------------------
    (PATRICK W. ROSE)

/s/ David B. Vermylen              Director                                 September 11, 2006
--------------------------------                                           -------------------
    (DAVID B. VERMYLEN)

/s/ Earl L. Powers                 Executive Vice President and             September 14, 2006
--------------------------------   Chief Financial Officer and Secretary   -------------------
    (EARL L. POWERS)               (Principal Financial Officer)

/s/ Linda K. Nelson                Vice President and Controller            September 14, 2006
--------------------------------   (Principal Accounting Officer)          -------------------
    (LINDA K. NELSON)
</TABLE>

                                       76



<PAGE>


                                  EXHIBIT INDEX

(b) EXHIBITS:

     Exhibit
     Number                               Description
     -------   -----------------------------------------------------------------
       2.1     Unit Purchase Agreement, dated June 20, 2002, together with
               exhibits H, I, and L thereto (filed as Exhibit 2.1 to the
               Company's Form 8-K filed June 21, 2002, and incorporated herein
               by reference).

       2.2     Certificate of Merger of Agrilink Foods, Inc. and Agrilink Merger
               Corp. (filed as Exhibit 2.2 to the Company's Annual Report on
               Form 10-K Equivalent for the fiscal year ended June 29, 2002 and
               incorporated herein by reference).

       3.1     Restated Certificate of Incorporation of Agrilink Merger Corp.
               (filed as Exhibit 3.1 to the Company's Annual Report on Form 10-K
               Equivalent for the fiscal year ended June 29, 2002 and
               incorporated herein by reference).

       3.2     Amendment of the Certificate of Incorporation of Agrilink Foods,
               Inc. (filed as Exhibit 3.1 to the Company's Quarterly Report on
               Form 10-Q Equivalent for the third quarter ended March 29, 2003
               and incorporated herein by reference).

       3.3     Bylaws of Birds Eye Foods, Inc., as amended (filed as Exhibit 3.1
               to the Company's Quarterly Report on Form 10-Q Equivalent for the
               third quarter ended March 27, 2004 and incorporated herein by
               reference).

       4.1     Indenture, dated as of November 18, 1998, between the Company,
               the Guarantors named therein and IBJ Schroder Bank & Trust
               Company, Inc., as Trustee (filed as Exhibit 4.1 to the Company's
               Registration Statement on Form S-4 filed January 5, 1999
               (Registration No. 333-70143) and incorporated herein by
               reference).

       4.2     Form of 11 7/8 percent Senior Subordinated Notes due 2008 (filed
               as Exhibit B, to Exhibit 4.1 to the Company's Registration
               Statement on Form S-4 filed January 5, 1999 (Registration No.
               333-70143) and incorporated herein by reference).

       4.3     First Supplemental Indenture (amending the Indenture referenced
               in Exhibit 4.1 herein) dated July 22, 2002 (filed as Exhibit 4.3
               to the Company's Annual Report on Form 10-K Equivalent for the
               fiscal year ended June 29, 2002 and incorporated herein by
               reference).

       4.4     Second Supplemental Indenture (amending the Indenture referenced
               in Exhibit 4.1 herein) dated March 1, 2003 (filed as Exhibit 4.1
               to the Company's Quarterly Report on Form 10-Q Equivalent for the
               third quarter ended March 29, 2003 and incorporated herein by
               reference).

      10.1     Amended and Restated Marketing and Facilitation Agreement dated
               August 19, 2002 between Pro-Fac Cooperative, and Agrilink Foods,
               Inc. (filed as Exhibit 99.3 to the Company's Current Report on
               Form 8-K filed September 3, 2002 and incorporated herein by
               reference).

      10.2     Termination Agreement dated August 19, 2002 (filed as Exhibit
               99.2 to the Company's Current Report on Form 8-K filed September
               3, 2002 and incorporated herein by reference).

     *10.3     Supplemental Executive Retirement Plan, as amended (filed as
               Exhibit 10.3 to the Company's Registration Statement on Form S-4
               filed November 17, 1994 (Registration No. 33-56517) and
               incorporated herein by reference).

     *10.4     Birds Eye Foods Non-Qualified 401(k) Plan Effective January 1,
               2004 (filed as Exhibit 10.4 to the Company's Annual Report and
               Form 10-K Equivalent for the fiscal year ended June 26, 2004 and
               incorporated herein by reference).

     *10.5     Management Incentive Program, as amended (filed herewith).

                                       77



<PAGE>


                                 EXHIBIT INDEX

(b) EXHIBITS (Continued):

     Exhibit
     Number                               Description
     -------   -----------------------------------------------------------------

      10.6     Raw Product Supply Agreement with Seneca Foods Corporation (filed
               as Exhibit 10.22 to the Company's Annual Report on Form 10-K for
               the fiscal year ended June 28, 1997 and incorporated herein by
               reference).

      10.7     Credit Agreement among the Company, Agrilink Holdings Inc., and
               JPMorgan Chase Bank and Bank of America, and the Lenders from
               time to time party hereto, dated as of August 19, 2002 (filed as
               Exhibit 10.10 to the Company's Annual Report on Form 10-K
               Equivalent for the fiscal year ended June 29, 2002 and
               incorporated herein by reference).

      10.8     First Amendment and Consent, dated as of September 17, 2003, to
               the Credit Agreement among Birds Eye Foods, Inc., Birds Eye
               Holdings, Inc., the lenders and other agents from time to time
               party thereto, and JP Morgan Chase Bank (filed as Exhibit 10.1 to
               the Company's Quarterly Report on Form 10-Q Equivalent for the
               first fiscal quarter ended September 27, 2003 and incorporated
               herein by reference).

      10.9     Second Amendment and Consent, dated as of October 19,
               2004, to the Credit Agreement among Birds Eye Foods,
               Inc., Birds Eye Holdings, Inc., the lenders and other
               agents from time to time party thereto and JPMorgan Chase
               Bank (filed as Exhibit 10.1 to the Company's Quarterly
               Report on Form 10-Q Equivalent for the first quarter
               ended September 25, 2004 and incorporated herein by
               reference).

     10.10     Third Amendment and Consent, dated as of May 18, 2005, to the
               Credit Agreement among Birds Eye Foods, Inc., Birds Eye Holdings,
               Inc,. the lenders and other agents from time to time party
               thereto, and JPMorgan Chase Bank (filed as exhibit 10.10 to the
               Company's Annual Report on Form 10-K Equivalent for the fiscal
               year ended June 25, 2005 and incorporated herein by reference).

    *10.11     Excess Benefit Retirement Plan, as amended (filed as Exhibit
               10.27 to the Company's quarterly report on Form 10-Q for the
               second fiscal quarter ended December 23, 2000, and incorporated
               herein by reference).

    *10.12     Third Amendment to the Birds Eye Foods Excess Benefit Retirement
               Plan (filed as Exhibit 10.12 to the Company's Annual Report on
               Form 10-K Equivalent for the fiscal year ended June 25, 2005 and
               incorporated herein by reference).

     10.13     Fourth Amendment to the Birds Eye Foods Excess Benefit Retirement
               Plan (filed as Exhibit 10.2 to the Company's Quarterly Report on
               Form 10-Q Equivalent for the second quarter ended December 24,
               2005 and incorporated herein by reference).

    *10.14     Supplemental Executive Retirement Agreement (filed as Exhibit
               10.28 to the Company's quarterly report on Form 10-Q for the
               second fiscal quarter ended December 23, 2000, and incorporated
               herein by reference).

    *10.15     Amendment to the Supplemental Executive Retirement Agreement
               (filed as Exhibit 10.22 to the Company's Annual Report on Form
               10-K Equivalent for the fiscal year ended June 29, 2002 and
               incorporated herein by reference).

    *10.16     Salary Continuation Agreement - Dennis Mullen (filed as Exhibit
               10.24 to the Company's Annual Report on Form 10-K for the fiscal
               year ended June 30, 2001 and incorporated herein by reference).

    *10.17     Master Salaried Retirement Plan, as amended and restated,
               effective January 1, 2001 (filed as Exhibit 10.3 to the Company's
               Quarterly Report on Form 10-Q for the second fiscal quarter ended
               December 29, 2001, and incorporated herein by reference).

    *10.18     Second Amendment to the Birds Eye Foods Master Salaried
               Retirement Plan (filed as Exhibit 10.16 to the Company's Annual
               Report on Form 10-K Equivalent for the fiscal year ended June 28,
               2003 and incorporated herein by reference).

                                       78



<PAGE>


                                 EXHIBIT INDEX

(b) EXHIBITS (Continued):

     Exhibit
     Number                               Description
     -------   -----------------------------------------------------------------

    *10.19     Third Amendment to the Birds Eye Foods Master Salaried Retirement
               Plan (filed as Exhibit 10.17 to the Company's Annual Report on
               Form 10-K Equivalent for the fiscal year ended June 28, 2003 and
               incorporated herein by reference).

    *10.20     Fourth Amendment to the Birds Eye Foods Master Salaried
               Retirement Plan (filed as Exhibit 10.3 to the Company's Quarterly
               Report on Form 10-Q Equivalent for the third fiscal quarter ended
               March 27, 2004 and incorporated herein by reference).

    *10.21     Fifth Amendment to the Birds Eye Foods Master Salaried Retirement
               Plan (filed as Exhibit 10.20 to the Company's Annual Report on
               Form 10-K Equivalent for the fiscal year ended June 25, 2005 and
               incorporated herein by reference).

    *10.22     Sixth Amendment to the Birds Eye Foods Master Salaried Retirement
               Plan (filed as Exhibit 10.21 to the Company's Annual Report on
               Form 10-K Equivalent for the fiscal year ended June 25, 2005 and
               incorporated herein by reference).

    *10.23     Agrilink Foods, Inc. Key Severance Plan-A, (filed as Exhibit 10.1
               to the Company's Quarterly Report on Form 10-Q for the third
               fiscal quarter ended March 30, 2002, and incorporated herein by
               reference).

    *10.24     Transitional Services Agreement dated August 19, 2002 (filed as
               Exhibit 99.4 to the Company's Current Report on Form 8-K filed
               September 3, 2002 and incorporated herein by reference).

     10.25     Credit Agreement dated August 19, 2002 between Pro-Fac
               Cooperative, Inc., as borrower, and Agrilink Foods, Inc., as
               lender (filed as Exhibit 99.5 to the Company's Current Report on
               Form 8-K filed September 3, 2002 and incorporated herein by
               reference).

     10.26     Securityholders Agreement dated August 19, 2002 among Agrilink
               Holdings LLC, Pro-Fac Cooperative, Inc., Vestar/Agrilink Holdings
               LLC, and others (filed as Exhibit 99.6 to the Company's Current
               Report on Form 8-K filed September 3, 2002 and incorporated
               herein by reference).

     10.27     Amendment No. 1 to the Securityholders Agreement (filed as
               Exhibit 10.22 to the Company's Annual Report on Form 10-K
               Equivalent for the fiscal year ended June 28, 2003 and
               incorporated herein by reference).

     10.28     Amended and Restated Limited Liability Company Agreement of
               Agrilink Holdings LLC dated August 19, 2002 among Agrilink
               Holdings LLC, Pro-Fac Cooperative, Inc., Vestar/Agrilink Holdings
               LLC, and others (filed as Exhibit 99.7 to the Company's Current
               Report on Form 8-K filed September 3, 2002 and incorporated
               herein by reference).

     10.29     Amendment No. 1 to the Amended and Restated Limited Liability
               Company Agreement (filed as Exhibit 10.24 to the Company's Annual
               Report on Form 10-K Equivalent for the fiscal year ended June 28,
               2003 and incorporated herein by reference).

     10.30     Amendment No. 2 to the Amended and Restated Liability Company
               Agreement (filed as Exhibit 10.1 to the Company's Quarterly
               Report on Form 10-Q Equivalent for the third fiscal quarter ended
               March 27, 2004 and incorporated herein by reference).

     10.31     Amendment No. 3 to Amended and Restated Limited Liability Company
               Agreement of Agrilink Holdings LLC (filed as Exhibit 10.3 to the
               Company's Quarterly Report on Form 10-Q Equivalent for the second
               quarter ended December 24, 2005 and incorporated herein by
               reference).

     10.32     Amendment No. 4 to Amended and Restated Limited Liability Company
               Agreement of Birds Eye Holdings LLC (filed as Exhibit 10.4 to the
               Company's Quarterly Report on Form 10-Q Equivalent for the second
               quarter ended December 24, 2005 and incorporated herein by
               reference).

                                       79



<PAGE>


                                 EXHIBIT INDEX

(b) EXHIBITS (Continued):

     Exhibit
     Number                               Description
     -------   -----------------------------------------------------------------

     10.33     Management Agreement dated August 19, 2002 among Agrilink Foods,
               Inc., Agrilink Holdings Inc. and Vestar Capital Partners (filed
               as Exhibit 99.8 to the Company's Current Report on Form 8-K filed
               September 3, 2002 and incorporated herein by reference).

    *10.34     Employment Agreement with Neil Harrison effective September 8,
               2005 (filed as Exhibit 10.31 to the Company's Annual Report on
               From 10-K Equivalent for the fiscal year ended June 25, 2005 and
               incorporated herein by reference).

    *10.35     Summary of Compensation Arrangements for Named Executive Officers
               and Directors of Birds Eye Foods, Inc. (filed herewith).

     10.36     Separation and General Release Agreement between Birds Eye Foods,
               Inc. and Dennis M. Mullen (filed as Exhibit 10.1 to the Company's
               Quarterly Report on Form 10-Q Equivalent for the first quarter
               ended September 24, 2005 and incorporated herein by reference).

     12        Computation of Ratio of Earnings to Fixed Charges (filed
               herewith).

     14        Code of Ethics Policy (filed as Exhibit 14 to the Company's
               Annual Report on Form 10-K Equivalent for the fiscal year ended
               June 26, 2004 and incorporated herein by reference).

     21.1      List of Subsidiaries (filed as Exhibit 21.1 to the Company's
               Annual Report on Form 10-K Equivalent for the fiscal year ended
               June 28, 2003 and incorporated herein by reference).

     24        Power of Attorney (included on page 75 of this Report).

     31.1      Section 302 Certification of the Principal Executive Officer
               (filed herewith).

     31.2      Section 302 Certification of the Principal Financial Officer
               (filed herewith).

     32.1      Certification Pursuant to 18 U.S.C. Section 1350, as adopted
               pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of the
               Principal Executive Officer (filed herewith).

     32.2      Certification Pursuant to 18 U.S.C Section 1350, as adopted
               pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of the
               Principal Financial Officer (filed herewith).

*Management contracts or compensatory plans.

                                       80