Exhibit 99


The following full financial statements of Pro-Fac Cooperative,  Inc. (which has
fully and  unconditionally,  jointly and severally  guaranteed,  on an unsecured
senior  subordinated  basis, the Company's  obligations under its 11-7/8% Senior
Subordinated Notes) are included with this Form 10-K as required by Rule 3-10 of
Regulation S-X.

<PAGE>

              MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS

Management is  responsible  for the  preparation  and integrity of the financial
statements  and related  notes which begin on the page  following the "Report of
Independent Accountants." These statements have been prepared in accordance with
accounting principles generally accepted in the United States.

The  Cooperative's  accounting  systems include  internal  controls  designed to
provide reasonable assurance of the reliability of its financial records and the
proper  safeguarding and use of its assets.  Such controls are monitored through
the internal and external audit programs.

The  financial  statements  have been  audited  by  PricewaterhouseCoopers  LLP,
independent  accountants,  who were responsible for conducting their examination
in accordance with generally accepted auditing standards. Their resulting report
is on the subsequent page.

The  Board  of  Directors  exercises  its  responsibility  for  these  financial
statements. The independent accountants and internal auditors of the Cooperative
have full and free access to the Board.  The Board  periodically  meets with the
independent  accountants and the internal auditors,  without management present,
to discuss accounting, auditing and financial reporting matters.

/s/ Dennis M. Mullen                 /s/ Earl L. Powers
--------------------                 ------------------
    Dennis M. Mullen                    Earl L. Powers
    President and                       Executive Vice President Finance and
    Chief Executive Officer             Chief Financial Officer
    Agrilink Foods, Inc.                Agrilink Foods, Inc.

                                        Treasurer
                                        Pro-Fac Cooperative, Inc.

    August 1, 2000


<PAGE>

                        Report of Independent Accountants

To the Shareholders and
Board of Directors of
Pro-Fac Cooperative, Inc.

In our opinion,  the consolidated  financial  statements  listed under Item 8 of
this Form 10-K present fairly, in all material respects,  the financial position
of Pro-Fac Cooperative,  Inc. and its subsidiaries at June 24, 2000 and June 26,
1999,  and the results of their  operations and their cash flows for each of the
three years in the period ended June 24, 2000,  in  conformity  with  accounting
principles  generally accepted in the United States.  These financial statements
are the responsibility of the Cooperative's management; our responsibility is to
express  an  opinion  on these  financial  statements  based on our  audits.  We
conducted our audits of these  statements in accordance with auditing  standards
generally  accepted in the United  States which require that we plan and perform
the audit to obtain reasonable  assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence  supporting the amounts and  disclosures  in the financial  statements,
assessing the  accounting  principles  used and  significant  estimates  made by
management,  and evaluating the overall  financial  statement  presentation.  We
believe  that our audits  provide a reasonable  basis for the opinion  expressed
above.

Our audits of the  consolidated  financial  statements also included an audit of
the financial  statement schedule listed in the accompanying index and appearing
under  Item 14 of this Form  10-K.  In our  opinion,  this  financial  statement
schedule  presents fairly, in all material  respects,  the information set forth
therein for the fiscal  years ended June 24, 2000,  June 26, 1999,  and June 27,
1998  when  read  in  conjunction  with  the  related   consolidated   financial
statements.

PRICEWATERHOUSECOOPERS LLP



/s/ PricewaterhouseCoopers LLP

   Rochester, New York
   August 1, 2000

<PAGE>

                              FINANCIAL STATEMENTS

<TABLE>

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

                                                                                                Fiscal Years Ended

                                                                                ------------------------------------------------
                                                                                June 24, 2000    June 26, 1999     June 27, 1998
                                                                                -------------    -------------     -------------

<S>                                                                              <C>              <C>               <C>
Net sales                                                                        $ 1,268,542      $1,238,946        $  719,665
Cost of sales                                                                       (882,861)       (877,438)         (524,082)
                                                                                 -----------      ----------        ----------
Gross profit                                                                         385,681         361,508           195,583
Selling, administrative, and general expenses                                       (286,562)       (291,395)         (141,739)
Gains on sales of assets                                                               6,635          64,734                 0
Restructuring                                                                              0          (5,000)                0
Income from joint venture                                                              2,418           2,787             1,893
                                                                                 -----------      ----------        ----------
Operating income                                                                     108,172         132,634            55,737
Interest expense                                                                     (83,511)        (67,420)          (30,767)
Amortization of debt issue costs associated with the Bridge Facility                       0          (5,500)                0
                                                                                 -----------      ----------        ----------
Pretax income before extraordinary item, dividends, and
   allocation of net proceeds                                                         24,661          59,714            24,970
Tax provision                                                                         (8,497)        (24,746)           (7,840)
                                                                                 -----------      ----------        ----------
Income before extraordinary item, dividends, and allocation of net proceeds           16,164          34,968            17,130
Extraordinary item relating to the early extinguishment of debt (net of
   income taxes)                                                                           0         (18,024)                0
                                                                                 -----------      ----------        ----------
Net income                                                                       $    16,164      $   16,944        $   17,130
                                                                                 ===========      ==========        ==========

Allocation of Net Proceeds:
   Net income                                                                    $    16,164      $   16,944        $   17,130
   Dividends on common and preferred stock                                            (7,410)         (6,734)           (6,328)
                                                                                 -----------      ----------        ----------
   Net proceeds                                                                        8,754          10,210            10,802
   Allocation to earned surplus                                                       (3,832)        (10,210)           (4,662)
                                                                                 -----------      -----------       ----------
   Net proceeds available to members                                             $     4,922      $        0        $    6,140
                                                                                 ===========      ==========        ==========

Allocation of net proceeds available to members:
   Payable to members currently (30% of qualified proceeds
     available to members in fiscal 2000 and 25% in fiscal 1998)                 $     1,477      $        0        $    1,535

   Allocated to members but retained by the Cooperative:

     Qualified retains                                                                 3,445               0             4,605
                                                                                 -----------      ----------        ----------
     Net proceeds available to members                                           $     4,922      $        0        $    6,140
                                                                                 ===========      ==========        ==========

Net income                                                                       $    16,164      $   16,944        $   17,130
Other comprehensive income:
   Minimum pension liability                                                             238            (155)             (608)
                                                                                 -----------      ----------        ----------
Comprehensive income                                                             $    16,402      $   16,789        $   16,522
                                                                                 ===========      ==========        ==========
<FN>

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

</FN>
</TABLE>

<PAGE>

<TABLE>

Pro-Fac Cooperative, Inc. and Consolidated Subsidiaries - Agrilink Foods, Inc. and AgriFrozen Foods, Inc.
Consolidated Balance Sheets
(Dollars in Thousands)
<CAPTION>

                                     ASSETS

                                                                                                        June 24, 2000  June 26, 1999
                                                                                                        -------------  -------------
<S>                                                              <C>                     <C>             <C>           <C>
Current assets:
   Cash and cash equivalents                                                                             $    4,994    $    6,540
   Accounts receivable, trade (net of allowances for doubtful accounts of $998 and $1,607, respectively)    101,065        88,249
   Accounts receivable, other                                                                                10,488         9,848
   Income taxes refundable                                                                                    9,869        11,295
   Current deferred tax assets                                                                               12,176        16,160
   Inventories -
     Finished goods                                                                                         290,195       281,005
     Raw materials and supplies                                                                              51,736        50,057
                                                                                                         ----------    ----------
       Total inventories                                                                                    341,931       331,062
                                                                                                         ----------    ----------
   Current investment in CoBank                                                                               2,927         2,403
   Prepaid manufacturing expense                                                                             26,364        22,075
   Prepaid expenses and other current assets                                                                 19,688        27,883
                                                                                                         ----------    ----------
       Total current assets                                                                                 529,502       515,515
Investment in CoBank                                                                                         16,203        19,693
Investment in Great Lakes Kraut Company, LLC                                                                  6,775         6,679
Property, plant, and equipment, net                                                                         348,359       367,255
Assets held for sale at net realizable value                                                                    339           890
Goodwill and other intangible assets (net of accumulated amortization of  $28,248 and $22,031,
   respectively)                                                                                            258,545       260,733
Other assets                                                                                                 27,543        25,714
                                                                                                         ----------    ----------
       Total assets                                                                                      $1,187,266    $1,196,479
                                                                                                         ==========    ==========

            LIABILITIES AND SHAREHOLDERS' AND MEMBERS' CAPITALIZATION

Current liabilities:
   Notes payable                                                                                         $   49,800    $   54,900
   Current portion of obligations under capital leases                                                          218           208
   Current portion of long-term debt                                                                         16,583         8,670
   Accounts payable                                                                                          89,612       107,159
   Accrued interest                                                                                          11,398         5,974
   Accrued employee compensation                                                                             11,216        15,127
   Other accrued expenses                                                                                    66,397        64,603
   Dividends payable                                                                                             41            45
   Amounts due AgriFrozen growers                                                                             2,060         1,453
   Amounts due Class A members                                                                               21,696        20,045
                                                                                                         ----------    ----------
       Total current liabilities                                                                            269,021       278,184
Obligations under capital leases                                                                                520           568
Long-term debt                                                                                              679,205       702,322
Deferred income tax liabilities                                                                              36,825        23,072
Other non-current liabilities                                                                                33,852        32,222
Non-controlling interest in AgriFrozen                                                                        8,000         8,000
                                                                                                         ----------    ----------
       Total liabilities                                                                                  1,027,423     1,044,368
                                                                                                         ----------    ----------
Commitments and contingencies

Class B cumulative  redeemable preferred stock,  liquidation  preference $10 per
   share, authorized 500,000 shares; issued and outstanding 23,664

     and 26,061, respectively                                                                                   237           261
Class A common stock, par value $5, authorized 5,000,000 shares

                                                               June 24, 2000           June 26, 1999
                                                               -------------           -------------

   Shares issued                                                 2,132,981               1,995,740
   Shares subscribed                                               233,977                 384,649
                                                                 ---------               ---------
       Total subscribed and issued                               2,366,958               2,380,389
   Less subscriptions receivable in installments                  (233,977)               (384,649)
                                                                 ---------               ---------
       Total issued and outstanding                              2,132,981               1,995,740           10,665         9,979
                                                                 =========               =========
Class B common stock, par value $5, authorized 2,000,000 shares;
   issued and outstanding 723,229 and 0, respectively                                                             0             0
Shareholders' and members' capitalization:
   Retained earnings allocated to members                                                                    16,591        25,573
   Non-qualified allocation to members                                                                          300         2,050
Non-cumulative Preferred Stock, par value $25, authorized 5,000,000
   shares; issued and outstanding 34,400 and 39,635, respectively                                               860           991
Class A Cumulative Preferred Stock, liquidation preference $25 per share;
   authorized 10,000,000 shares; issued and outstanding 4,249,007 and
     3,694,495, respectively                                                                                106,225        92,362
Special membership interests                                                                                      0             0
Earned surplus                                                                                               25,490        21,658
Accumulated other comprehensive income:
   Minimum pension liability adjustment                                                                        (525)         (763)
                                                                                                         ----------    ----------
       Total shareholders' and members' capitalization                                                      148,941       141,871
                                                                                                         ----------    ----------
       Total liabilities and capitalization                                                              $1,187,266    $1,196,479
                                                                                                         ==========    ==========

<FN>

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

</FN>
</TABLE>

<PAGE>

<TABLE>

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

                                                                                            Fiscal Years Ended

                                                                            June 24, 2000        June 26, 1999        June 27, 1998
                                                                            -------------        -------------        -------------
<S>                                                                          <C>                 <C>                   <C>
Cash Flows from Operating Activities:
   Net income                                                                $  16,164           $   16,944            $  17,130
   Amount payable to members currently                                          (1,477)                   0               (1,535)
   Adjustments to reconcile net income to net cash (used in)/provided by
     operating activities:
     Extraordinary item relating to the early extinguishment of debt
       (net of income taxes)                                                         0               18,024                    0
     Interest-in-kind on Subordinated Promissory Note                            1,571                  782                    0
     Gains on sales of assets                                                   (6,635)             (64,734)                   0
     Loss on disposal of assets                                                      0                  353                    0
     Amortization of goodwill and other intangible assets                        8,768                9,396                3,581
     Amortization of debt issue costs                                            4,805                7,678                  800
     Depreciation                                                               32,605               24,752               18,009
     Provision for deferred taxes                                               13,636                9,949                  752
     Provision for losses on accounts receivable                                   201                  208                   17
     Equity in undistributed earnings of CoBank                                   (412)                (520)                (715)
     Change in assets and liabilities:
       Accounts receivable                                                     (10,992)                  32               (9,311)
       Inventories and prepaid manufacturing expenses                          (66,754)              34,388              (25,654)
       Income taxes payable/refundable                                           1,426               (5,231)              (1,626)
       Accounts payable and accrued expenses                                   (16,353)             (52,639)              18,145
       Amounts due to members                                                    1,651                 (591)               4,845
       Other assets and liabilities                                             13,371              (16,078)             (11,360)
                                                                             ---------           ----------            ---------
Net cash (used in)/provided by operating activities                             (8,425)             (17,287)              13,078
                                                                             ---------           ----------            ---------
Cash Flows from Investing Activities:
   Purchase of property, plant, and equipment                                  (26,983)             (23,787)             (14,056)
   Proceeds from disposals of property, plant, and equipment                    63,955               93,486               12,794
   Proceeds from sales of idle facilities                                          405                1,427                    0
   Proceeds from investment in CoBank                                            3,378                2,795                1,611
   Cash paid for acquisitions                                                     (250)            (516,052)              (7,423)
                                                                             ---------           ----------            ---------
Net cash provided by/(used in) investing activities                             40,505             (442,131)              (7,074)
                                                                             ---------           ----------            ---------
Cash Flows from Financing Activities:
   Net (payments on)/proceeds from note payable                                 (5,100)              54,900                    0
   Proceeds from issuance of long-term debt                                          0              719,263               11,180
   Payments on long-term debt                                                  (18,470)            (287,574)              (8,076)
   Payments on capital leases                                                     (239)                (283)                (616)
   Cash paid for debt issuance costs and amendments                             (2,624)             (19,354)                   0
   Issuance of stock, net of repurchases                                           662                  844                  140
   Cash paid in lieu of fractional shares                                            0                    0                   (9)
   Cash portion of non-qualified conversion                                       (445)                (153)                 (84)
   Cash dividends paid                                                          (7,410)              (6,734)              (6,328)
                                                                             ---------           ----------            ---------
Net cash (used in)/provided by financing activities                            (33,626)             460,909               (3,793)
                                                                             ---------           ----------            ---------
Net change in cash and cash equivalents                                         (1,546)               1,491                2,211
Cash and cash equivalents at beginning of period                                 6,540                5,049                2,838
                                                                             ---------           ----------            ---------
Cash and cash equivalents at end of period                                   $   4,994           $    6,540            $   5,049
                                                                             =========           ==========            =========

Supplemental Disclosure of Cash Flow Information:
   Cash paid during the year for:
     Interest (net of amount capitalized)                                    $  78,087           $   70,005            $  30,319
                                                                             =========           ==========            =========
     Income taxes, net                                                       $   6,622           $   14,742            $   8,714
                                                                             =========           ==========            =========

     Acquisition of Flavor Destinations trademark:
       Goodwill and other intangible assets                                  $     250           $        0            $       0
                                                                             =========           ==========            =========

     Acquisition of Agripac, Inc.:
       Accounts receivable                                                   $       0           $   12,563            $       0
       Inventories                                                                   0               39,055                    0
       Property, plant, and equipment                                                0               30,327                    0
       Prepaid expenses and other current assets                                     0                1,063                    0
       Discount on subordinated note                                                 0                8,157                    0
       Other non-current assets                                                      0                4,000                    0
       Other accrued expenses                                                        0              (10,644)                   0
       Other non-current liabilities                                                 0               (4,000)                   0
       Non-controlling interest                                                      0               (8,000)                   0
                                                                             ---------           ----------            ---------
                                                                                     0               72,521                    0
       Escrow                                                                        0                6,413                    0
                                                                             ---------           ----------            ---------
                                                                                     0               78,934                    0
       Discount on subordinated note                                                 0               (8,157)                   0
                                                                             ---------           ----------            ---------
                                                                             $       0           $   70,777            $       0
                                                                             =========           ==========            =========

<FN>

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

</FN>
</TABLE>
<PAGE>
<TABLE>

Pro-Fac Cooperative, Inc. and Consolidated Subsidiaries - Agrilink Foods, Inc. and AgriFrozen Foods, Inc.
Consolidated Statements of Cash Flows (Continued)
(Dollars in Thousands)
<CAPTION>
                                                                                              Fiscal Years Ended

                                                                            -------------------------------------------------------
                                                                            June 24, 2000         June 26, 1999       June 27, 1998
                                                                            -------------         -------------       -------------
     <S>                                                                     <C>                  <C>                  <C>
     Acquisition of Erin's Gourmet Popcorn:
       Inventories                                                           $       0            $      33            $       0
       Property, plant, and equipment                                                0                   26                    0
       Goodwill and other intangible assets                                          0                  554                    0
                                                                             ---------            ---------            ---------
                                                                             $       0            $     613            $       0
                                                                             =========            =========            =========
     Acquisition of Dean Foods Vegetable Company:
       Accounts receivable                                                   $       0            $  24,201            $       0
       Current deferred tax asset                                                    0               30,645                    0
       Inventories                                                                   0              195,674                    0
       Prepaid expenses and other current assets                                     0                6,374                    0
       Property, plant, and equipment                                                0              157,227                    0
       Assets held for sale                                                          0                   49                    0
       Goodwill and other intangible assets                                          0              178,377                    0
       Accounts payable                                                              0              (40,865)                   0
       Accrued employee compensation                                                 0               (8,437)                   0
       Other accrued expenses                                                        0              (74,845)                   0
       Long-term debt                                                                0               (2,752)                   0
       Subordinated promissory note                                                  0              (22,590)                   0
       Other assets and liabilities, net                                             0               (2,453)                   0
                                                                             ---------            ---------            ---------
                                                                             $       0            $ 440,605            $       0
                                                                             =========            =========            =========
     Acquisition of J.A. Hopay Distributing Co., Inc.:
       Accounts receivable                                                   $       0            $     420            $       0
       Inventories                                                                   0                  153                    0
       Property, plant, and equipment                                                0                   51                    0
       Goodwill and other intangible assets                                          0                3,303                    0
       Other accrued expenses                                                        0                 (251)                   0
       Obligation for covenant not to compete                                        0               (1,363)                   0
                                                                             ---------            ----------           ---------
                                                                             $       0            $   2,313            $       0
                                                                             =========            =========            =========
     Acquisition of DelAgra:
       Accounts receivable                                                   $       0            $       0            $     403
       Inventories                                                                   0                    0                3,212
       Prepaid expenses and other current assets                                     0                    0                   81
       Property, plant, and equipment                                                0                    0                1,842
       Goodwill and other intangible assets                                          0                    0                1,508
       Other accrued expenses                                                        0                    0                 (433)
                                                                             ---------            ---------            ---------
                                                                             $       0            $       0            $   6,613
                                                                             =========            =========            =========
     Acquisition of C&O Distributing Company:
       Property, plant, and equipment                                        $       0            $       0            $      54
       Goodwill and other intangible assets                                          0                    0                  756
                                                                             ---------            ---------            ---------
                                                                             $       0            $       0            $     810
                                                                             =========            =========            =========
     Investment in Great Lakes Kraut Company, LLC:
       Inventories                                                           $       0            $       0            $   2,175
       Prepaid expenses and other current assets                                     0                    0                  409
       Property, plant, and equipment                                                0                    0                6,966
       Other accrued expenses                                                        0                    0                  (62)
                                                                             ---------            ---------            ---------
                                                                             $       0            $       0            $   9,488
                                                                             =========            =========            =========
Supplemental schedule of non-cash investing and financing activities:

         Conversion of retains to preferred stock                            $  13,732            $   4,648            $   6,967
                                                                             =========            =========            =========
         Net proceeds allocated to members but retained by the Cooperative   $   3,445            $       0            $   4,605
                                                                             =========            =========            =========
         Capital lease obligations incurred                                  $     171            $     320            $     222
                                                                             =========            =========            =========
<FN>

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

</FN>
</TABLE>
<PAGE>
<TABLE>

Pro-Fac Cooperative, Inc. and Consolidated Subsidiaries

Consolidated Statements of Changes in Shareholders' and Members' Capitalization and Redeemable Stock

(Dollars in Thousands)
<CAPTION>
                                                                                                  Fiscal Years Ended

                                                                                     ---------------------------------------------
                                                                                     June 24,        June 26,             June 27,
                                                                                       2000            1999                1998
                                                                                    ----------       -----------       -----------
<S>                                                                                 <C>              <C>               <C>
Retained earnings allocated to members:
Qualified retains:
   Balance at beginning of period                                                   $   25,573       $   29,765        $   31,920
   Net proceeds allocated to members                                                     3,445                0             4,605
   Converted to preferred stock                                                        (12,427)          (4,191)           (6,751)
   Cash paid in lieu of fractional shares                                                    0               (1)               (9)
                                                                                    ----------       ----------        ----------
   Balance at end of period                                                             16,591           25,573            29,765
                                                                                    ----------       ----------        ----------
Non-qualified retains:
   Balance at beginning of period                                                   $    2,050       $    2,660        $    2,960
   Distribution of non-qualified retains -
     Cash paid                                                                            (445)            (153)              (84)
     Converted to preferred stock                                                       (1,305)            (457)             (216)
                                                                                    ----------       -----------       ----------
   Balance at end of period                                                                300            2,050             2,660
                                                                                    ----------       ----------        ----------
Total retains allocated to members at end of period                                 $   16,891       $   27,623        $   32,425
                                                                                    ----------       ----------        ----------
Non-cumulative preferred stock:
   Balance at beginning of period                                                   $      991       $    1,125        $    1,345
   Conversion to cumulative preferred stock                                               (131)            (134)             (220)
                                                                                    ----------       ----------        ----------
   Balance at end of period                                                         $      860       $      991        $    1,125
                                                                                    ----------       ----------        ----------
Cumulative preferred stock:
   Balance at beginning of period                                                   $   92,362       $   87,580        $   80,393
   Converted from non-cumulative preferred stock                                           131              134               220
   Converted from non-qualified retains                                                  1,305              457               216
   Converted from qualified retains                                                     12,427            4,191             6,751
                                                                                    ----------       ----------        ----------
   Balance at end of period                                                         $  106,225       $   92,362        $   87,580
                                                                                    ----------       ----------        ----------
Earned surplus:
   Balance at beginning of period                                                   $   21,658       $   11,448        $    6,786
   Allocation to earned surplus                                                          3,832           10,210             4,662
                                                                                    ----------       ----------        ----------
   Balance at end of period                                                         $   25,490       $   21,658        $   11,448
                                                                                    ----------       ----------        ----------
Accumulated other comprehensive income:

   Balance at beginning of period                                                   $     (763)      $     (608)       $        0
   Minimum pension liability adjustment                                                    238             (155)             (608)
                                                                                    ----------       ----------        ----------
   Balance at end of period                                                               (525)            (763)             (608)
                                                                                    ----------       -----------       ----------
Total shareholders' and members' capitalization                                     $  148,941       $  141,871        $  131,970
                                                                                    ==========       ==========        ==========

Redeemable stock:
Class B cumulative preferred stock:
   Balance at beginning of period                                                   $      261       $      270        $      315
   (Repurchased)/issued, net                                                               (24)              (9)              (45)
                                                                                    ----------       ----------        ----------
   Balance at end of period                                                         $      237       $      261        $      270
                                                                                    ==========       ==========        ==========
Common stock:
   Balance at beginning of period                                                   $    9,979       $    9,129        $    8,944
   Issued/(repurchased), net                                                               686              850               185
                                                                                    ----------       ----------        ----------
   Balance at end of period                                                         $   10,665       $    9,979        $    9,129
                                                                                    ==========       ==========        ==========
<FN>

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

</FN>
</TABLE>
<PAGE>

             PRO-FAC COOPERATIVE, INC. AND CONSOLIDATED SUBSIDIARIES
                 AGRILINK FOODS, INC. AND AGRIFROZEN FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.    SUMMARY OF ACCOUNTING POLICIES

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

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

The  accompanying  consolidated  financial  statements  have  been  prepared  in
accordance with accounting principles,  generally accepted in the United States,
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.

Fiscal  Year:  The fiscal  year of Pro-Fac  ends on the last  Saturday  in June.
Fiscal 2000, 1999, and 1998 each comprised 52 weeks.

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

Reclassification:  Certain items for fiscal 1999 and 1998 have been reclassified
to conform with the current presentation.

Restructuring:  During the third  quarter of fiscal 1999,  Agrilink  Foods began
implementation of a corporate-wide restructuring program. The overall objectives
of the plan  were to  reduce  expenses,  improve  productivity,  and  streamline
operations.  The total  restructuring  charge  amounted to $5.0  million and was
primarily comprised of employee termination benefits (which have improved annual
earnings  by  $8.0  million).  Efforts  have  focused  on the  consolidation  of
operating  functions and the elimination of  approximately 5 percent of the work
force. Reductions in personnel include operational and administrative positions.
Of this charge,  $3.3 million has been  liquidated  to date,  and the  remaining
termination benefits will be liquidated within the next 12 months.

Extraordinary  Item Relating to the Early  Extinguishment of Debt: During fiscal
1999, Agrilink Foods refinanced its existing indebtedness,  including its 12 1/4
percent  Senior  Subordinated  Notes due 2005 and its then  existing  bank debt.
Premiums and breakage  fees  associated  with early  redemptions  and other fees
incurred  amounted to $18.0  million  (net of  applicable  income taxes of $10.4
million). See NOTE 3 to the "Notes to Consolidated Financial Statements."

Cash  and  Cash  Equivalents:  Cash  and  cash  equivalents  include  short-term
investments with original maturities of three months or less. There were no such
short-term investments at June 24, 2000 or June 26, 1999.

Inventories:  Inventories  are  stated  at the  lower of cost or  market  on the
first-in, first-out ("FIFO") method. Reserves recorded at June 24, 2000 and June
26,  1999 were  $3,385,000,  and  $8,401,000,  respectively.  Reductions  to the
reserve  were  recorded  in  fiscal  2000 as  related  inventory  was  disposed,
primarily associated with AgriFrozen.

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

Earnings on the  Cooperative's  investment in CoBank in fiscal year 2000,  1999,
and 1998 amounted to $590,000, $743,000, and $1,023,000, respectively.

Prepaid Manufacturing Expense:  Allocation of manufacturing overhead to finished
goods produced is on the basis of a production  period;  thus at the end of each
period,  manufacturing 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  finished  goods  during  the next
production period and recognized as an element of cost of goods sold.

<PAGE>

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 4 to 40 years.

Lease arrangements are capitalized when such leases convey  substantially all of
the risks and benefits  incidental  to ownership.  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.

Assets  held  for sale are  separately  classified  on the  balance  sheet.  The
recorded value represents an estimate of net realizable value.

Goodwill and Other Intangibles: Goodwill and other intangible assets include the
cost in excess of the fair value of net  tangible  assets  acquired  in purchase
transactions and acquired  non-competition  agreements and trademarks.  Goodwill
and  other  intangible  assets,  stated  net of  accumulated  amortization,  are
amortized  on  a  straight-line  basis  over  3 to  35  years.  The  Cooperative
periodically assesses whether there has been a permanent impairment in the value
of  goodwill.  This  is  accomplished  by  determining  whether  the  estimated,
undiscounted  future cash flows from  operating  activities  exceed the carrying
value of goodwill as of the assessment date.  Should aggregate future cash flows
be less than the carrying value, a writedown would be required,  measured by the
difference  between the  discounted  future cash flows and the carrying value of
goodwill.

Other Assets:  Other assets are primarily  comprised of debt issuance costs. The
debt  issuance  costs  are  amortized  over the term of the  debt.  Amortization
expense  incurred,  including  $5,500,000  of fees  associated  with the  Bridge
Facility in fiscal 1999,  were  $2,758,000,  $7,678,000,  and $800,000 in fiscal
2000, 1999, and 1998, respectively.

Income Taxes:  Income taxes are provided on  non-patronage  income for financial
reporting purposes.  Deferred income taxes resulting from temporary  differences
between  financial  reporting  and tax reporting as well as from the issuance of
non-qualified retains are appropriately classified in the balance sheet.

Pension:  The  Cooperative and its  subsidiaries  have several pension plans and
participate  in various  union  pension  plans  which on a combined  basis cover
substantially  all employees.  Charges to income with respect to plans sponsored
by the Cooperative and its subsidiaries  are based upon  actuarially  determined
costs.  Pension  liabilities  are funded by  periodic  payments  to the  various
pension plan trusts.

Derivative  Financial  Instruments:  The Cooperative does not engage in interest
rate  speculation.  Derivative  financial  instruments  are  utilized  to  hedge
interest rate risks and are not held for trading purposes.

Agrilink Foods has entered into interest rate swap  agreements to limit exposure
to interest  rate  movements.  Net payments or receipts are accrued into prepaid
expenses and other current assets and/or other accrued expenses and are recorded
as adjustments to interest  expense.  Interest rate instruments are entered into
for periods no greater than the life of the underlying transaction being hedged.
Management  anticipates  that  all  interest  rate  derivatives  will be held to
maturity.   Any  gains  or  losses  on  prematurely   terminated  interest  rate
derivatives  will  be  recognized  over  the  remaining  life,  if  any,  of the
underlying transaction as an adjustment to interest expense.

Commodities  Options  Contracts:  In  connection  with the  purchase  of certain
commodities  for  anticipated   manufacturing   requirements,   the  Cooperative
occasionally  enters into options contracts as deemed  appropriate to reduce the
effect of price  fluctuations.  These  options  contracts  are  accounted for as
hedges and, accordingly, gains and losses are deferred and recognized in cost of
sales as part of the product cost.  These  activities are not significant to the
Cooperative's operations as a whole.

Foreign Currency:  The Cooperative hedges certain foreign currency  transactions
by entering into forward exchange  contracts.  Gains and losses  associated with
currency rate changes on forward  exchange  contracts  hedging foreign  currency
transactions  are recorded in earnings  upon  settlement.  In fiscal  2000,  the
Cooperative  entered into forward exchange  contracts to hedge aggregate foreign
currency  exposures  of  approximately  $11.5  million.   The  forward  exchange
contracts have varying maturities ranging from July 2000 to April 2001 with cash
settlements made at maturity based upon rates agreed to at contract inception.

Recently Issued  Accounting  Statements:  In June 1998, the FASB issued SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities. In June 1999,
the FASB issues SFAS 137,  which  deferred the effective date of SFAS No. 133 to
fiscal years  beginning  after June 15, 2000,  and requires all  derivatives  be
measured at fair value and recorded on a company's  balance sheet as an asset or
liability,  depending  upon  the  company's  underlying  rights  or  obligations
associated  with the  derivative  instrument.  Agrilink Foods and AgriFrozen are
currently investigating the impact of this pronouncement.

<PAGE>

Casualty  Insurance:  The  Cooperative is insured for workers  compensation  and
automobile liability through a primarily  self-insured  program. The Cooperative
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, 2000 and June 26, 1999 was $5.2 million and $6.3
million, respectively.

Environmental  Expenditures:  Environmental expenditures that pertain to current
operations  are  expensed  or  capitalized  consistent  with  the  Cooperative's
capitalization  policy.  Expenditures  that  result from the  remediation  of an
existing  condition  caused by past operations that do not contribute to current
or  future  revenues  are  expensed.  Liabilities  are  recorded  when  remedial
activities are probable, and the cost can be reasonably estimated.

Advertising:  Production  costs of commercials  and  programming  are charged to
operations in the year first aired. The cost of other advertising  promotion and
marketing  programs  are  charged  in the  year  incurred.  Advertising  expense
incurred in fiscal 2000,  1999, and 1998 amounted to  $43,597,000,  $38,192,000,
and $9,878,000, respectively.

Earnings Per Share Data Omitted: Earnings per share amounts are not presented as
earnings  are not  distributed  to members in  proportion  to their common stock
holdings.  Earnings  (representing those earnings derived from patronage-sourced
business)  are  distributed  to members  in  proportion  to the dollar  value of
deliveries under Pro-Fac  contracts rather than based on the number of shares of
common stock held.

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

         Cash and Cash  Equivalents  and  Notes  Payable:  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 $19.1  million at June 24,  2000.  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 5 to the "Notes to Consolidated Financial Statements."

NOTE 2.       AGREEMENTS WITH AGRILINK FOODS AND AGRIFROZEN

Agrilink Foods: The contractual  relationship between Pro-Fac and Agrilink Foods
is defined in the Pro-Fac  Marketing and  Facilitation  Agreement  (the "Pro-Fac
Marketing  Agreement").  Under the Pro-Fac Marketing  Agreement,  Agrilink Foods
pays  Pro-Fac the  commercial  market  value  ("CMV") for all crops  supplied by
Pro-Fac.  CMV is defined as the weighted  average price paid by other commercial
processors  for similar  crops sold under  preseason  contracts  and in the open
market in the same or competing  market area.  Although CMV is intended to be no
more than the fair market value of the crops purchased by Agrilink Foods, it may
be more or less than the price  Agrilink  Foods  would pay in the open market in
the absence of the Pro-Fac Marketing Agreement.

Under the  Pro-Fac  Marketing  Agreement,  Agrilink  Foods  paid  Pro-Fac  $69.6
million,  $62.2  million,  and $58.5  million  as CMV for crops  purchased  from
Pro-Fac in fiscal years 2000, 1999, and 1998, respectively.  The crops purchased
by Agrilink  Foods from Pro-Fac  Class A members  represented  approximately  55
percent,  71 percent,  and 76 percent of the raw agricultural crops purchased by
Agrilink Foods from Pro-Fac in fiscal 2000, 1999, and 1998, respectively.

Under the Pro-Fac Marketing Agreement, Agrilink Foods is required to have on its
board of directors  individuals  who are neither  members of nor affiliated with
Pro-Fac ("Disinterested  Directors"), the number of Disinterested Directors must
at least equal the number of  directors  who are members of  Pro-Fac's  board of
directors.  The volume and type of crops to be purchased by Agrilink  Foods from
Pro-Fac under the Pro-Fac  Marketing  Agreement are  determined  pursuant to its
annual  profit  plan,   which  requires  the  approval  of  a  majority  of  the
Disinterested  Directors of Agrilink  Foods.  In addition,  in any year in which
Agrilink Foods has earnings on products which were processed from crops supplied
by Pro-Fac ("Pro-Fac Products"), Agrilink Foods pays to Pro-Fac up to 90 percent
of such  earnings,  but in no case more than 50 percent  of all pretax  earnings
(before  dividing with Pro-Fac) of Agrilink  Foods.  In years in which  Agrilink
Foods has losses on Pro-Fac  Products,  Agrilink  Foods reduces the CMV it would
otherwise  pay to Pro-Fac by up to 90 percent of such losses,  but in no case by
more than 50 percent of all pretax  losses  (before  dividing  with  Pro-Fac) of
Agrilink  Foods.  Additional  patronage  income is paid to Pro-Fac for  services
provided to Agrilink Foods, including the provision of a long-term,  stable crop
supply,  favorable payment terms for crops and the sharing of risks in losses of
certain  operations of the business.  For fiscal years ended 2000 and 1998, such
additional patronage income amounted to $12.3 million and $12.5 million,

<PAGE>

respectively.  During  fiscal 1999,  there was no additional  patronage  income.
Under the Pro-Fac Marketing Agreement,  Pro-Fac is required to reinvest at least
70 percent of the additional  patronage income in Agrilink Foods.  Subsequent to
the  acquisition  date,  Pro-Fac has  invested an  additional  $29.9  million in
Agrilink Foods.

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

Under the AgriFrozen Marketing Agreement,  AgriFrozen paid Pro-Fac $14.0 million
in CMV for crops purchased in fiscal 2000.

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

NOTE 3.       ACQUISITIONS AND DISPOSALS

Fiscal 2000 -

Sale of Pickle  Business:  On June 23,  2000,  Agrilink  Foods  sold its  pickle
business  based in Tacoma,  Washington  to Dean  Pickle and  Specialty  Products
Company.  This  business  included  pickle,  pepper,  and relish  products  sold
primarily  under the Nalley and Farman's  brand names.  Agrilink  Foods received
proceeds of  approximately  $10.3 million which were applied to bank loans ($4.0
million of which was applied to the Term Loan Facility and $6.3 million of which
was  applied  to  Agrilink  Foods'  Revolving  Credit   Facility).   A  gain  of
approximately $4.3 million was recognized on this transaction.

On July 21, 2000,  Agrilink  Foods sold the machinery and equipment  utilized in
the  production  of  pickles  and other  related  products  to Dean  Pickle  and
Specialty  Products Company.  No significant gain or loss was recognized on this
transaction. Net proceeds of approximately $3.2 million were applied to the Term
Loan Facility.

This  transaction  did not include any other products  carrying the Nalley brand
name,  including prepared canned meal products.  Agrilink Foods will continue to
contract pack Nalley and Farman's  pickle  products for a period of two years at
the existing Tacoma processing plant which Agrilink Foods will operate.

Under a related  agreement,  the Cooperative  will supply raw cucumbers grown in
the Northwestern United States to Dean Pickle and Specialty Products Company for
a minimum 10-year period at market pricing.

Sale of Midwest Private Label Canned  Vegetable  Business:  On November 8, 1999,
Agrilink Foods completed the sale of its Midwest private label canned  vegetable
business  to Seneca  Foods.  Included  in this  transaction  was the  Arlington,
Minnesota  facility.  Agrilink Foods received  proceeds of  approximately  $42.4
million  which were applied to  borrowings  outstanding  under  Agrilink  Foods'
Revolving Credit Facility. In addition,  Seneca Foods issued to Agrilink Foods a
$5.0 million unsecured  subordinated  promissory note due February 8, 2009. This
transaction did not include  Agrilink  Foods' retail branded canned  vegetables,
Veg-All  and  Freshlike.  No  significant  gain or loss was  recognized  on this
transaction.

On  December  17,  1999,  Agrilink  Foods  completed  the  sale of the  Cambria,
Wisconsin  processing  facility  to Del Monte.  Agrilink  received  proceeds  of
approximately  $10.5  million  which were applied to bank loans ($6.0 million of
which  was  applied  to the Term Loan  Facility  and $4.5  million  of which was
applied to Agrilink's  Revolving Credit Facility).  A gain of approximately $2.3
million was recognized on this transaction.  The sale also includes an agreement
for Del Monte to produce a portion of Agrilink  Foods'  product needs during the
2000 packing season.

Fiscal 1999 -

Acquisition  of Agripac  Frozen  Vegetable  Business:  On February 23, 1999,  PF
Acquisition  II,  Inc.,  which does  business  under the name  AgriFrozen  Foods
("AgriFrozen"),   acquired  the  frozen  vegetable  business  of  Agripac,  Inc.
("Agripac"), an Oregon cooperative.

<PAGE>

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

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

The acquisition was accounted for under the purchase method of accounting. Under
purchase  accounting  tangible and identifiable  intangible  assets acquired are
recorded at their  respective fair values.  Final  allocations of purchase price
were made within one year of the acquisition date.

In order to consummate  the  acquisition,  AgriFrozen  (i) entered into a credit
facility with CoBank, ACB ("CoBank) (the "CoBank Credit Facility") providing for
$30 million of term loan borrowings and a revolving credit facility (the "CoBank
Revolving  Credit  Facility")  of $55  million in fiscal 2000 and $50 million in
each year thereafter and (ii) issued a $12 million Subordinated  Promissory Note
to CoBank. Neither Pro-Fac nor Agrilink Foods guaranteed the debts of AgriFrozen
or  otherwise  pledged any of their  respective  properties  as security for the
CoBank financing. All of AgriFrozen's indebtedness is expressly without recourse
to Pro-Fac and Agrilink Foods.

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

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

The effects of the Agripac  acquisition are not material and  accordingly,  have
been excluded from the pro forma  information  presented  below.  The operations
from Agripac have been included in the Company's  Statement of Operations  since
the acquisition date.

Sale of Adams Brand Peanut  Butter  Operations:  On January 29,  1999,  Agrilink
Foods sold the Adams brand peanut butter operations to the J.M. Smucker Company.
Agrilink  Foods  received  proceeds of  approximately  $13.5  million which were
applied to  outstanding  bank loans.  A gain of  approximately  $3.5 million was
recognized on this transaction.

Acquisition  of Erin's  Gourmet  Popcorn:  On January 5,  1999,  Agrilink  Foods
acquired  the assets of Erin's  Gourmet  Popcorn  ("Erin's"),  a  Seattle-based,
ready-to-eat  popcorn  manufacturer.  The  acquisition  was  accounted  for as a
purchase.  The purchase  price was  approximately  $0.6 million.  Intangibles of
approximately  $0.6 million were recorded in conjunction  with this  transaction
and are being amortized over 3 to 30 years.

The effects of the Erin's  acquisition are not material,  and accordingly,  have
been excluded from the pro forma  information  presented  below.  The operations
from Erin's have been  included in the Company's  Statement of Operations  since
the acquisition date.

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

<PAGE>

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

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

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

(Dollars in Millions)

                                                      Fiscal Year Ended
                                                        June 26, 1999

Net sales                                                   $1,336.0
Income before extraordinary items                           $   25.1
Net income                                                  $    7.1

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

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

In order to consummate the DFVC  Acquisition  and the Refinancing and to pay the
related  fees and  expenses,  Agrilink  Foods:  (i)  entered  into a new  credit
facility  (the "New Credit  Facility")  providing  for $455 million of term loan
borrowings (the "Term Loan Facility") and up to $200 million of revolving credit
borrowings (the "Revolving Credit Facility"),  (ii) entered into and drew upon a
$200 million  bridge loan facility (the "Bridge  Facility") and (iii) issued the
$30 million Subordinated  Promissory Note to Dean Foods. The Bridge Facility was
repaid during November of 1998  principally  with the proceeds from a new Senior
Subordinated  Note  Offering  (the  "New  Notes").  See  NOTE 5 - "Debt - Senior
Subordinated Notes 11 -7/8 Percent (due 2008)." Debt issue costs of $5.5 million
associated  with the Bridge  Facility  were  expensed  during the quarter  ended
December 26, 1998.

Acquisition  of J.A.  Hopay  Distributing  Co,  Inc.:  Effective  July 21, 1998,
Agrilink  Foods  acquired  J.A.  Hopay   Distributing  Co.,  Inc.  ("Hopay")  of
Pittsburgh, Pennsylvania. Hopay distributed snack products for Snyder of Berlin,
one of the  Company's  businesses  included  within its snack  foods  unit.  The
acquisition  was  accounted  for as a  purchase.  The  purchase  price  (net  of
liabilities   assumed)  was   approximately   $2.3   million.   Intangibles   of
approximately  $3.3 million were recorded in conjunction  with this  transaction
and are being amortized over 5 to 30 years.

The effects of the Hopay  acquisition  are not material and,  accordingly,  have
been excluded from the above pro forma  presentation.  The operations from Hopay
have  been  included  in  the  Company's   Statement  of  Operations  since  the
acquisition date.

Fiscal 1998 -

Sale of Michigan  Distribution Center:  Effective March 31, 1998, Agrilink Foods
entered into a multiyear  logistics  agreement  under which GATX  Logistics will
provide freight  management,  packaging and labeling services,  and distribution
support to and from production  facilities owned by Agrilink Foods in and around
Coloma, Michigan. The agreement included the sale of Agrilink Foods'

<PAGE>

labeling equipment and distribution center.  Agrilink Foods received proceeds of
$12.6 million for the equipment and facility  which were applied to  outstanding
bank  loans.  No  significant  gain  or  loss  occurred  as  a  result  of  this
transaction.

Acquisition of DelAgra Corp.:  Effective March 30, 1998, Agrilink Foods acquired
the  majority  of assets and the  business  of  DelAgra  Corp.  of  Bridgeville,
Delaware.  DelAgra Corp. is a producer of private label frozen  vegetables.  The
acquisition   was  accounted  for  as  a  purchase.   The  purchase   price  was
approximately  $6.6  million.  Goodwill of  approximately  $0.6 million and $0.9
million for a covenant not to compete  were  received in  conjunction  with this
transaction.   These  amounts  are  being   amortized   over  30  and  5  years,
respectively.  The  operations  of  DelAgra  Corp.  have  been  included  in the
Company's Statement of Operations since the acquisition date.

Acquisition of C&O Distributing Company: Effective March 9, 1998, Agrilink Foods
acquired the majority of assets and the business of C&O Distributing  Company of
Canton,  Ohio.  C&O  distributed  snack  products  for Snyder of Berlin,  one of
Agrilink Foods' businesses included within its snack foods unit. The acquisition
was  accounted  for as a purchase.  The purchase  price was  approximately  $0.8
million.  Intangibles of approximately $0.8 million were recorded in conjunction
with this  transaction and are being amortized over 30 years.  The operations of
C&O have been  included  in the  Company's  Statement  of  Operations  since the
acquisition date.

Formation of New Sauerkraut Company:  Effective July 1, 1997, Agrilink Foods and
Flanagan Brothers,  Inc. of Bear Creek,  Wisconsin  contributed all their assets
involved in sauerkraut  production to form a new  sauerkraut  company.  This new
company,  Great  Lakes  Kraut  Company,  LLC,  operates  as a New  York  limited
liability  company with ownership and earnings  divided  equally between the two
companies.  The joint  venture  is  accounted  for using  the  equity  method of
accounting.  Summarized financial  information of Great Lakes Kraut Company, LLC
is as follows:

Condensed Statement of Earnings
(Dollars in Thousands)

                                               Fiscal Years Ended
                              June 24, 2000       June 26, 1999    June 27, 1998

Net sales                       $  32,200           $  30,174         $ 27,620
Gross profit                    $   9,150           $   9,392         $  7,439
Operating income                $   5,488           $   6,267         $  4,411
Net income                      $   4,836           $   5,575         $  3,786

Condensed Balance Sheet
(Dollars in Thousands)

                              June 24, 2000       June 26, 1999

Current assets                  $  12,464           $  14,112
Noncurrent assets               $  22,081           $  21,669
Current liabilities             $  13,158           $  13,237
Noncurrent liabilities          $   4,579           $   5,736



<PAGE>

NOTE 4.       PROPERTY, PLANT AND EQUIPMENT AND RELATED OBLIGATIONS

The  following  is a summary  of  property,  plant  and  equipment  and  related
obligations at June 24, 2000 and June 26, 1999:

<TABLE>
(Dollars in Thousands)
<CAPTION>

                                                  June 24, 2000                                  June 26, 1999

                                        Owned         Leased                         Owned           Leased
                                         Assets        Assets           Total         Assets          Assets            Total
                                       ----------    ----------      -----------    ----------      ----------       --------

<S>                                    <C>           <C>             <C>            <C>             <C>              <C>
Land                                   $  18,943     $     0         $ 18,943       $  19,864       $      0         $  19,864
Land improvements                          7,828           0            7,828           7,907              0             7,907
Buildings                                114,428         395          114,823         112,229            395           112,624
Machinery and equipment                  307,890         936          308,826         296,658            827           297,485
Construction in progress                  14,499           0           14,499          19,507              0            19,507
                                       ---------     -------         --------       ---------       --------         ---------
                                         463,588       1,331          464,919         456,165          1,222           457,387
Less accumulated depreciation           (115,856)       (704)        (116,560)        (89,568)          (564)          (90,132)
                                       ---------     -------         --------       ---------       --------         ---------
Net                                    $ 347,732     $   627         $348,359       $ 366,597       $    658         $ 367,255
                                       =========     =======         ========       =========       ========         =========

Obligations under capital leases1                    $   738                                        $    776
Less current portion                                    (218)                                           (208)
                                                     -------                                        --------
Long-term portion                                    $   520                                        $    568
                                                     =======                                        ========

<FN>

1  Represents the present value of net minimum lease payments  calculated at the
   Cooperative's  incremental  borrowing  rate at the  inception  of the leases,
   which ranged from 6.3 to 9.8 percent.

</FN>
</TABLE>

Interest capitalized in conjunction with construction  amounted to approximately
$691,000, $259,000, and $248,000 in fiscal 2000, 1999, and 1998, respectively.

The following is a schedule of future minimum lease  payments  together with the
present value of the minimum lease payments related to capitalized  leases, both
as of June 24, 2000:

(Dollars in Thousands)

 Fiscal Year Ending Last                   Capital    Operating    Total Future
       Saturday In June                    Leases       Leases      Commitment
 ----------------------------              -------    -----------  ------------
        2001                               $   294     $  8,621      $  8,915
        2002                                   222        6,265         6,487
        2003                                   147        5,036         5,183
        2004                                   121        2,559         2,680
        2005                                    89        1,925         2,014
    Later years                                 35       10,954        10,989
                                           -------     --------      --------
 Net minimum lease payments                    908     $ 35,360      $ 36,268
                                                       ========      ========
 Less amount representing interest            (170)
                                           -------
 Present value of minimum lease payments   $   738
                                           =======

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
$18,671,000, $15,352,000, and $12,250,000 for fiscal years 2000, 1999, and 1998,
respectively.

<PAGE>
NOTE 5.       DEBT

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

<TABLE>
(Dollars in Thousands)
<CAPTION>
                                                                   June 24, 2000                          Total
                                                 --------------------------------------------            June 26,
                                                   Agrilink        AgriFrozen         Total                1999
                                                 ------------      ----------       ---------          -----------
<S>                                              <C>                 <C>            <C>                <C>
Bank Debt                                        $   428,300         $ 30,000       $  458,300         $   476,600
Senior Subordinated Notes                            200,015                0          200,015             200,015
Subordinated Promissory Notes (net of discount)       26,144            4,493           30,637              27,378
Other                                                  6,836                0            6,836               6,999
                                                 -----------         --------       ----------         -----------
Total Debt                                           661,295           34,493          695,788             710,992
Less Current Portion                                 (16,583)               0          (16,583)             (8,670)
                                                 -----------         --------       ----------         -----------
Total Long-Term Debt                             $   644,712         $ 34,493       $  679,205         $   702,322
                                                 ===========         ========       ==========         ===========
</TABLE>

AGRILINK FOODS DEBT

New Credit  Facility  (Bank  Debt):  In  connection  with the DFVC  Acquisition,
Agrilink  Foods  entered  into  the New  Credit  Facility  with  Harris  Bank as
Administrative  Agent and Bank of Montreal as Syndication Agent, and the lenders
thereunder.  The New Credit Facility consists of a $200 million Revolving Credit
Facility  and a $455  million  Term Loan  Facility.  The Term Loan  Facility  is
comprised of the Term A Facility, which has a maturity of five years, the Term B
Facility,  which has a maturity of six years, and the Term C Facility, which has
a maturity of seven years.  The Revolving Credit Facility has a maturity of five
years.  All previous bank debt was repaid in  conjunction  with the execution of
the New Credit Facility.

The New Credit  Facility  bears  interest,  at Agrilink  Foods'  option,  at the
Administrative  Agent's alternate base rate or the London Interbank Offered Rate
("LIBOR")  plus,  in  each  case,  applicable  margins  of:  (i) in the  case of
alternate base rate loans, (x) 1.00 percent for loans under the Revolving Credit
Facility  and the Term A Facility,  (y) 2.75  percent for loans under the Term B
Facility  and (z) 3.00  percent for loans under the Term C Facility  and (ii) in
the case of LIBOR loans,  (x) 2.75 percent for loans under the Revolving  Credit
Facility  and the Term A Facility,  (y) 3.75  percent for loans under the Term B
Facility  and (z)  4.00  percent  for  loans  under  the  Term C  Facility.  The
Administrative  Agent's  "alternate base rate" is defined as the greater of: (i)
the prime commercial rate as announced by the  Administrative  Agent or (ii) the
Federal Funds rate plus 0.50 percent. The fiscal 2000  weighted-average  rate of
interest  applicable to the Term Loan  Facility was 9.51  percent.  In addition,
Agrilink  Foods pays a commitment  fee  calculated at a rate of 0.50 percent per
annum  on the  daily  average  unused  commitment  under  the  Revolving  Credit
Facility.

Utilizing  outstanding  balances  at June 24,  2000,  the Term Loan  Facility is
subject to the following amortization schedule:

(Dollars in Millions)

Fiscal Year   Term Loan A   Term Loan B     Term Loan C       Total
-----------   -----------   -----------     -----------       -----

    2001        $  10.0        $  0.4         $   0.4        $  10.8
    2002           10.0           0.4             0.4           10.8
    2003           10.0           0.4             0.4           10.8
    2004            9.2           0.4             0.4           10.0
    2005            0.0         190.5             0.4          190.9
    2006            0.0           0.0           195.0          195.0
                -------        ------         -------        -------
                $  39.2        $192.1         $ 197.0        $ 428.3
                =======        ======         =======        =======

The Term  Loan  Facility  is  subject  to  mandatory  prepayment  under  various
scenarios as defined in the New Credit  Facility.  During fiscal 2000,  Agrilink
Foods made  mandatory  prepayments of $10.0 million from proceeds of the sale of
the Cambria facility and the pickle operations.  In addition, during fiscal 2000
principal payments of $8.3 million were made on the Term Loan facilities.

Agrilink Foods'  obligations under the New 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 certain of Pro-Fac's
(excluding  AgriFrozen),  current  and  future  subsidiaries  and  (iii)  all of
Agrilink  Foods'  rights  under  the  agreement  to  acquire  DFVC  (principally
indemnification  rights) and the Marketing and  Facilitation  Agreement  between
Agrilink Foods and Pro-Fac.  Agrilink  Foods'  obligations  under the New Credit
Facility  are  guaranteed  by  Pro-Fac  (excluding  AgriFrozen)  and  certain of
Agrilink Foods' subsidiaries.

<PAGE>

The New  Credit  Facility  contains  customary  covenants  and  restrictions  on
Agrilink  Foods'  ability to engage in certain  activities,  including,  but not
limited to: (i)  limitations on the incurrence of indebtedness  and liens,  (ii)
limitations on sale-leaseback  transactions,  consolidations,  mergers,  sale of
assets,  transactions  with affiliates and investments and (iii)  limitations on
dividend  and  other  distributions.  The  New  Credit  Facility  also  contains
financial   covenants   requiring   Pro-Fac  to  maintain  a  minimum  level  of
consolidated EBITDA, a minimum  consolidated  interest coverage ratio, a minimum
consolidated fixed charge coverage ratio, a maximum consolidated  leverage ratio
and a minimum level of consolidated net worth.  Under the Credit Agreement,  the
assets,   liabilities,   and  results  of  operations  of  AgriFrozen   are  not
consolidated  with  Pro-Fac for  purposes  of  determining  compliance  with the
covenants.  In August of 1999,  Pro-Fac  negotiated an amendment to the original
covenants.  In  conjunction  with  this  amendment,  Pro-Fac  incurred  a fee of
approximately $2.6 million.  This fee is being amortized over the remaining life
of the New Credit  Facility.  Pro-Fac and Agrilink Foods are in compliance  with
all covenants,  restrictions and requirements  under the terms of the New Credit
Facility as amended.

Interest  Rate  Protection  Agreements:   Agrilink  Foods  has  entered  into  a
three-year  interest  rate  swap  agreement  with  the Bank of  Montreal  in the
notional  amount of $150 million.  The swap  agreement  provides for an interest
rate of 4.96  percent  over the term of the swap  payable by  Agrilink  Foods in
exchange for payments at the published three-month LIBOR. In addition,  Agrilink
Foods  entered into a separate  interest  rate swap  agreement  with the Bank of
Montreal in the notional  amount of $100 million for an initial  period of three
years.  This swap  agreement  provides for an interest rate of 5.32 percent over
the term of the swap,  payable by Agrilink Foods in exchange for payments at the
published  three-month  LIBOR.  Agrilink Foods entered into these  agreements in
order to manage its interest rate risk by exchanging  its floating rate interest
payments for fixed rate interest payments.

Agrilink  Foods had a two-year  option to extend the maturity date on one of the
interest rate swap agreements with a notional amount of $100,000,000. On June 8,
1999,  Agrilink  Foods sold this  option to Bank of Montreal  for  approximately
$2,050,000.  The gain  resulting  from the  sale is  being  recognized  over the
remaining interest rate swap life.

Senior  Subordinated  Notes - 11-7/8  Percent  (due  2008):  To  extinguish  the
Subordinated  Bridge Facility,  Agrilink Foods issued Senior  Subordinated Notes
("New Notes") for $200 million aggregate  principal amount due November 1, 2008.
Interest on the New Notes accrues at the rate of 11-7/8 percent per annum and is
payable semiannually in arrears on May 1 and November 1.

The New  Notes  represent  general  unsecured  obligations  of  Agrilink  Foods,
subordinated  in right of payment to certain other debt  obligations of Agrilink
Foods (including Agrilink Foods' obligations under the New Credit Facility). The
New Notes are guaranteed by Pro-Fac and certain of Agrilink Foods' subsidiaries.

The New Notes contain  customary  covenants and  restrictions on Agrilink Foods'
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.  Agrilink Foods is in
compliance  with all covenants,  restrictions,  and  requirements  under the New
Notes.

Subordinated Bridge Facility:  To complete the DFVC Acquisition,  Agrilink Foods
entered into a  Subordinated  Bridge  Facility (the "Bridge  Facility").  During
November  1998,  the net proceeds from the sale of the New Notes,  together with
borrowings  under  the  Revolving  Credit  Facility,  were used to repay all the
indebtedness  outstanding  ($200 million plus accrued interest) under the Bridge
Facility.  The  outstanding  indebtedness  under  the  Bridge  Facility  accrued
interest at an approximate rate per annum of 10 1/2 percent. Debt issuance costs
associated with the Bridge Facility of $5.5 million were fully amortized  during
the second quarter of fiscal 1999.

Dean Foods Subordinated  Promissory Note: As partial  consideration for the DFVC
Acquisition,  Agrilink  Foods  issued to Dean Foods the Dean Foods  Subordinated
Promissory  Note for $30 million  aggregate  principal  amount due  November 22,
2008.  Interest on the note is accrued quarterly in arrears commencing  December
31, 1998,  at a rate per annum of 5 percent  until  November 22, 2003,  and at a
rate of 10 percent thereafter.  As the stated rates on the note are below market
value,  Agrilink  Foods  has  imputed  the  appropriate  discount  utilizing  an
effective  interest rate of 11-7/8 percent.  Interest  accruing through November
22, 2003 is required to be paid in kind through the  issuance by Agrilink  Foods
of additional  subordinated  promissory  notes  identical to the note.  Agrilink
Foods  satisfied  this  requirement  through  the  issuance  of  six  additional
promissory notes each for  approximately  $0.4 million.  Interest accruing after
November  22,  2003 is  payable in cash.  The notes may be  prepaid at  Agrilink
Foods' option without premium or penalty.

The note is expressly  subordinate to the New Credit  Facility and the New Notes
and contains no financial covenants. The note is guaranteed by Pro-Fac.

<PAGE>

Senior  Subordinated  Notes  -  12  1/4  Percent  Due  2005  ("Old  Notes"):  In
conjunction with the DFVC Acquisition,  Agrilink Foods repurchased  $159,985,000
principal  amount of its Old Notes,  of which $160 million  aggregate  principal
amount was previously outstanding.  Agrilink Foods paid a total of approximately
$184 million to repurchase the Old Notes,  including interest accrued thereon of
$2.9  million.  Holders who  tendered  consented  to certain  amendments  to the
indenture relating to the Old Notes,  which eliminated or amended  substantially
all the  restrictive  covenants and certain events of default  contained in such
indenture.  Agrilink  Foods may repurchase the remaining Old Notes in the future
in open market transactions, privately negotiated purchases or otherwise.

Revolving  Credit Facility ("Notes  Payable"):  Borrowings under Agrilink Foods'
Revolving Credit Facility (excluding AgriFrozen) were as follows:

<TABLE>
(Dollars in Thousands)
<CAPTION>

                                                                 Fiscal    Years
                                                   Ended June 24,  2000 June 26,
                                                   1999 June 27, 1998

                                                   -------------    -------------    -------------
<S>                                                  <C>              <C>               <C>
Balance at end of period                             $   5,700        $  18,900         $     0
Rate at fiscal year end                                 9.375%              8.2%            0.0%
Maximum outstanding during the period                $ 156,100        $ 116,200         $66,000
Average amount outstanding during the period         $  90,800        $  76,700         $51,300
Weighted average interest rate during the period          8.5%              7.8%            7.0%
</TABLE>

Agrilink Foods also maintains a Letter of Credit Facility which provides for the
issuance of letters of credit through September 2000. As of June 24, 2000, there
were $14.2  million of letters  of credit  outstanding.  Management  anticipates
timely renewals of the Letter of Credit facilities.

Other Debt:  Other debt of $6.8 million  carries  rates up to 10 percent at June
24, 2000.


Maturities:  Total long-term debt maturities during each of the next five fiscal
years for debt  associated  with  Agrilink  Foods are as  follows:  2001,  $16.6
million;  2002,  $11.2 million;  2003, $11.1 million;  2004, $10.3 million;  and
2005, $190.6 million. Provisions of the Term Loan require annual payments on the
last day of each  September of each year  (commencing  September 30, 1999) in an
amount equal to the "annual cash sweep"  (equivalent to approximately 75 percent
of net income  adjusted for certain cash and non-cash  items) for the  preceding
fiscal  year.  As of June  24,  2000,  there  were  no  obligations  under  this
provision.  Provisions  of the Term Loan  Facility  also  require  that net cash
proceeds from the sale of businesses be applied to the Term Loan Facility.

Fair  Value:  The  estimated  fair  value  of  Agrilink  Foods'  long-term  debt
outstanding was approximately $615.5 million and $673.7 million at June 24, 2000
and June 26, 1999, 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 Agrilink Foods for debt with similar maturities.

AGRIFROZEN DEBT

CoBank Credit  Facility  (Bank Debt):  In  connection  with the  acquisition  of
Agripac's frozen vegetable processing business, AgriFrozen entered into a CoBank
credit facility with CoBank, ACB ("CoBank"). The CoBank Credit Facility consists
of a $30 million Term Loan  Facility  and a Revolving  Credit  Facility  both of
which mature on June 29, 2002. The Revolving  Credit Facility  commitment is $55
million for fiscal 2000 and in each year thereafter it is $50 million.

The CoBank term loan facility bears interest, at the option of AgriFrozen,  at a
fixed or variable rate. The fixed rate  represents the CoBank cost of funds plus
4.19 percent. The variable rate is CoBank's "National Variable Rate," which is a
reference rate  established by CoBank.  In addition,  AgriFrozen is obligated to
pay a  commitment  fee  calculated  at a rate of 0.50  percent  per annum on the
amount by which the CoBank  revolving  credit  facility  commitment  exceeds the
greater of (i) $50 million or (ii) the average daily  aggregate of the revolving
credit facility  advances.  There is an interest cap, which includes the fees on
the CoBank Revolving Credit Facility. The interest rate cap was $1.9 million for
the initial period ending June 26, 1999 and is $5.5 million for each  subsequent
fiscal year.

AgriFrozen's  obligations under the CoBank Credit Facility are collateralized by
a first-priority  lien on  substantially  all existing or after acquired assets,
tangible or intangible, of AgriFrozen.

<PAGE>

AgriFrozen's  obligations under the CoBank Credit Facility are not guaranteed by
Pro-Fac or  Agrilink  Foods and are  expressly  nonrecourse  as to  Pro-Fac  and
Agrilink Foods.

The CoBank Credit  Facility  contains  customary  covenants and  restrictions on
AgriFrozen'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,  sale  of  assets,  acquisitions  and
transactions  with  affiliates and third parties (iii)  limitations on dividends
and  other  distributions  and (iv)  limitations  on  capital  expenditures  and
administrative  expenses.  The CoBank Credit  Facility  also contains  financial
covenants  that are effective  beginning in fiscal 2000.  The covenants  require
AgriFrozen to maintain a minimum level of EBITDA and a maximum  leverage  ratio.
AgriFrozen is in compliance  with or has obtained  waivers or amendments for its
covenants,  restrictions,  and requirements under the terms of the CoBank Credit
Facility.

CoBank   Subordinated   Promissory  Note:  As  partial   consideration  for  the
acquisition of Agripac's frozen vegetable processing business, AgriFrozen issued
to CoBank the CoBank  Subordinated  Promissory  Note for $12  million  aggregate
principal  amount.  Interest  on  the  note  is  payable  quarterly  in  arrears
commencing  February  22, 2004 until  February 22, 2009 at a rate per annum of 5
percent, and at a rate of 7 percent thereafter.  As the stated rates on the note
are  below  market  value,  AgriFrozen  has  imputed  the  appropriate  discount
utilizing an effective  interest rate of 13 percent.  Interest  accruing for the
period from February 22, 2004 until February 22, 2009 is payable in kind through
the issuance by AgriFrozen of additional subordinated promissory notes identical
to the note. Quarterly principal payments are due commencing March 31, 2009 each
equal to 1/40 of the principal  balance on March 31, 2009 with a final  lump-sum
payment due February 22, 2014.  The note may be prepaid at  AgriFrozen's  option
without premium or penalty.

The note is expressly  subordinate  to the CoBank Credit  Facility.  The note is
collateralized by the assets of AgriFrozen,  but it is not guaranteed by Pro-Fac
or Agrilink  Foods and is  expressly  non-recourse  as to Pro-Fac  and  Agrilink
Foods.

Revolving  Credit Facility  ("Notes  Payable"):  Borrowings  under  AgriFrozen's
Revolving Credit Facility were as follows:


(Dollars in Thousands)

                                                        Fiscal Years Ended
                                                 June 24, 2000     June 26, 1999

Balance at end of period                           $  44,100         $  36,000
Rate at fiscal year end                                11.00%             9.25%
Maximum outstanding during the period              $  51,000         $  36,970
Average amount outstanding during the period       $  42,482         $  11,548
Weighted average interest rate during the period       10.01%             9.25%

Fair Value: The estimated fair value of AgriFrozen's  long-term debt outstanding
was  approximately  $34.5 and $34.0  million at June 24, 2000 and June 26, 1999,
respectively.  The fair value for long-term debt was estimated using the current
rates offered to AgriFrozen for debt with similar maturities.

<PAGE>

NOTE 6.       TAXES ON INCOME

Taxes on income before extraordinary item include the following:

(Dollars in Thousands)

                                     Fiscal Years Ended
                        June 24, 2000   June 26, 1999      June 27, 1998

Federal -
  Current                 $ (4,929)         $12,781          $  6,214
  Deferred                  12,734            8,972             1,201
                           --------         -------          --------
                             7,805           21,753             7,415
State and foreign -
  Current                     (210)           2,016               874
  Deferred                     902              977              (449)
                           --------         -------          --------
                               692            2,993               425
                           --------         -------          --------
                           $ 8,497          $24,746          $  7,840
                           ========         =======          ========

A reconciliation  of the consolidated  effective tax rate to the amount computed
by applying the federal income tax rate to income before taxes and extraordinary
item is as follows:

<TABLE>

                                                                          Fiscal Years Ended

                                                                   --------------------------------
                                                                   June 24,    June 26,    June 27,
                                                                     2000        1999        1998
                                                                   --------    --------    --------

<S>                                                                  <C>        <C>          <C>
Statutory federal rate                                               35.0%      35.0%        35.0%
State and foreign income taxes, net of federal income tax effect      2.9        3.5          2.3
Allocation to members                                                (7.0)       0.0         (8.6)
Goodwill amortization                                                 5.1        5.9          3.9
Dividend received deduction                                          (0.2)      (0.4)        (1.2)
Other, net                                                           (1.4)      (1.4)         0.0
                                                                     ----       ----         ----
Effective Tax Rate                                                   34.4%      42.6%        31.4%
                                                                     ====       ====         ====
</TABLE>

<PAGE>

The consolidated deferred tax (liabilities)/assets consist of the following:

(Dollars in Thousands)

                                                  June 24, 2000   June 26, 1999

Liabilities:
   Depreciation                                   $  (41,033)      $  (28,468)
   Goodwill and other intangible assets               (5,796)          (1,379)
   Prepaid manufacturing expense                     (10,152)          (7,086)
   Prepaid expenses and other current assets               0           (1,672)
   Investment in Great Lakes Kraut Company, LLC       (1,727)          (1,892)
   Discount on Subordinated Promissory Notes          (5,208)          (2,882)
                                                  ----------       ----------
                                                     (63,916)         (43,379)
                                                  ----------       ----------
Assets:
   Non-qualified retains                                 105              697
   Inventories                                        12,922            9,182
   Credits and operating loss carryforwards            7,820            1,538
   Accrued employee compensation                       1,795            5,316
   Insurance accruals                                  3,259            4,422
   Pension/OPEB accruals                              10,752            7,353
   Restructuring reserve                                 661            1,556
   Promotional reserves                                  371              867
   Other                                               7,334            6,945
                                                  ----------       ----------
                                                      45,019           37,876
                                                  ----------       ----------
   Net deferred liabilities                          (18,897)          (5,503)
   Valuation allowance                                (5,752)          (1,409)
                                                  ----------       ----------
                                                  $  (24,649)      $   (6,912)
                                                  ==========       ==========

During fiscal 2000,  the  Cooperative  increased the valuation  allowance in the
amount of $4.3 million.  This valuation allowance was primarily  established for
state net  operating  losses  and  credits  generated  during  the year.  As the
Cooperative  cannot assure that  realization is more likely than not to occur, a
valuation allowance has been recorded.

During fiscal 1999,  Agrilink  Foods  utilized the $5.5 million of net operating
loss  carryforwards  ($1.9 million of tax). The benefits for these net operating
losses had been recorded in previous years.

In January 1995, the Boards of Directors of Agrilink Foods and Pro-Fac  approved
appropriate  amendments to the Bylaws of Agrilink  Foods to allow Agrilink Foods
to qualify as a cooperative  under Subchapter T of the Internal Revenue Code. In
August 1995,  Agrilink  Foods and Pro-Fac  received a favorable  ruling from the
Internal  Revenue  Service  approving the change in tax treatment  effective for
fiscal 1996.  This ruling also  confirmed  that the change in Agrilink Foods tax
status would have no effect on  Pro-Fac's  ongoing  treatment  as a  cooperative
under Subchapter T of the Internal Revenue Code of 1986.

NOTE 7.       PENSIONS, PROFIT SHARING, AND OTHER EMPLOYEE BENEFITS

Pensions:  The Cooperative has primarily  noncontributory  defined benefit plans
covering  most  employees.  The benefits for these plans are based  primarily on
years of service and employees' pay near retirement.  The Cooperative'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.

The Cooperative also  participates in several union sponsored  pension plans. It
is not possible to determine the Cooperative's relative share of the accumulated
benefit obligations or net assets for these plans.

<PAGE>

Pension  cost for  fiscal  years  ended  2000 and 1999  includes  the  following
components:

<TABLE>
(Dollars in Thousands)
<CAPTION>

                                                                                Pension Benefits
                                                                                Fiscal Years Ended

                                                                          June 24, 2000     June 26, 1999
<S>                                                                        <C>               <C>
Change in benefit obligation:
   Benefit obligation at beginning of period                               $  110,833        $  101,504
   Service cost                                                                 6,520             4,727
   Interest cost                                                                7,592             6,953
   Plan participants' contributions                                               160               242
   Amendments                                                                   2,296                 0
   Actuarial (gain)/loss                                                      (16,122)            4,976
   Benefits paid                                                               (9,584)           (7,569)
                                                                           ----------        ----------
     Benefit obligation at end of period                                      101,695           110,833
                                                                           ----------        ----------
Change in plan assets:
   Fair value of assets at beginning of period                                108,183           107,253
   Actual return on plan assets                                                12,941             8,000
   Employer contribution                                                          256               257
   Plan participants' contributions                                               160               242
   Benefits paid                                                               (9,584)           (7,569)
                                                                           ----------        ----------
     Fair value of assets at end of period                                    111,956           108,183
                                                                           ----------        ----------
Plan funded status:                                                            10,261            (2,650)
   Unrecognized prior service cost                                              2,181              (131)
   Unrecognized actuarial gain                                                (29,217)          (10,810)
   Union plans                                                                      0               (31)
                                                                           ----------        ----------
     Accrued benefit liability prior to additional minimum liability          (16,775)          (13,622)
Amounts recognized in the statement of financial position consist of:
   Accrued benefit liability                                                  (17,300)          (14,385)
   Accumulated other comprehensive income                                         525               763
                                                                           ----------        ----------
     Net amount recognized                                                 $  (16,775)       $  (13,622)
                                                                           ==========        ==========

Weighted-average assumptions:
   Discount rate                                                                  8.0%              7.0%
   Expected return on plan assets                                                 9.5%             10.0%
   Rate of compensation increase                                                  4.5%              4.5%
</TABLE>

<TABLE>

                                                                                  Pension Benefits

                                                                  --------------------------------------------------
                                                                                 Fiscal Years Ended

                                                                  --------------------------------------------------
                                                                  June 24, 2000     June 26, 1999      June 27, 1998
                                                                  -------------     -------------      -------------
Components of net periodic benefit cost:

<CAPTION>

   <S>                                                                <C>             <C>                <C>
   Service cost                                                       $  6,520        $   4,727          $ 2,796
   Interest cost                                                         7,592            6,953            6,776
   Expected return on plan assets                                      (10,604)         (10,528)          (8,708)
   Amortization of prior service cost                                      (16)             (15)             (22)
   Amortization of gain                                                    (51)            (741)            (593)
   Union costs                                                              37               81               88
                                                                      --------        ---------          -------
   Net periodic cost                                                  $  3,478        $     477          $   337
                                                                      ========        =========          =======
</TABLE>

The Cooperative maintains a non-tax qualified  Supplemental Executive Retirement
Plan which provides  additional  retirement benefits to two prior executives who
retired prior to November 4, 1994.

On January 28, 1992,  the  Cooperative  adopted a  Non-Qualified  Excess Benefit
Retirement  Plan which  serves to  provide  employees  with the same  retirement
benefit they would have received from Agrilink Foods'  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.

<PAGE>

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

<TABLE>
(Dollars in Thousands)
<CAPTION>

                                    Supplemental Executive Retirement Plan            Excess Benefit Retirement Plan
                                    ---------------------------------------         -----------------------------------
                                              Fiscal Years Ended                            Fiscal Years Ended
                                    ---------------------------------------         -----------------------------------
                                    June 24, 2000           June 26, 1999           June 24, 2000         June 26, 1999
                                    -------------           -------------           -------------         -------------

<S>                                   <C>                     <C>                      <C>                  <C>
Projected benefit obligation          $ 1,729                 $  1,895                 $  1,159             $  1,128
Accumulated benefit obligation          1,729                    1,895                      834                  855
Plan assets                                 0                        0                        0                    0
</TABLE>

Postretirement Benefits Other Than Pensions: Generally, other than pensions, the
Cooperative  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  Cooperative  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.

The plan's funded status was as follows:

<TABLE>
(Dollars in Thousands)
<CAPTION>

                                                                                        Other Benefits
                                                                                      Fiscal Years Ended

                                                                          June 24, 2000              June 26, 1999

<S>                                                                        <C>                          <C>
Change in benefit obligation:
   Benefit obligation at beginning of period                               $    6,507                   $    2,758
   Service cost                                                                   184                           90
   Interest cost                                                                  433                          250
   (Decrease due to sale)/increase due to acquisition                            (295)                       2,065
   Actuarial (gain)/loss                                                         (715)                       1,932
   Benefits paid                                                                 (456)                        (588)
                                                                           ----------                   ----------
     Benefit obligation at end of period                                        5,658                        6,507
                                                                           ----------                   ----------
Change in plan assets:
   Fair value of assets at beginning of period                                      0                            0
   Employer contribution                                                          456                          588
   Benefits paid                                                                 (456)                        (588)
                                                                           -----------                  ----------
     Fair value of assets at end of period                                          0                            0
                                                                           ----------                   ----------
Plan funded status:                                                            (5,658)                      (6,507)
   Unrecognized actuarial loss                                                    717                        1,886
                                                                           ----------                   ----------
     Accrued benefit liability                                                 (4,941)                      (4,621)
Amounts recognized in the statement of financial position consist of:

   Accrued benefit liability                                                   (4,941)                      (4,621)
                                                                           ----------                   ----------
     Net amount recognized                                                 $   (4,941)                  $   (4,621)
                                                                           ==========                   ==========

Weighted-average assumptions:
   Discount rate                                                                  8.0%                         7.0%
   Expected return on plan assets                                                  N/A                          N/A
   Rate of compensation increase                                                  4.5%                         4.5%
</TABLE>
<PAGE>
<TABLE>

                                                                                          Other Benefits

                                                                        --------------------------------------------------
                                                                        June 24, 2000     June 26, 1999       June 27, 1998
                                                                        -------------     -------------       -------------
<S>                                                                       <C>                <C>                <C>
Components of net periodic benefit cost:
   Service cost                                                           $     184          $     90           $       6
   Interest cost                                                                433               250                 198
   Amortization of loss/(gain)                                                  159                 0                 (10)
                                                                          ---------          --------           ----------
   Net periodic cost                                                      $     776          $    340           $     194
                                                                          =========          ========           =========
</TABLE>

For measurement purposes, an 8.5 percent rate of increase in the per capita cost
of covered  health  care  benefits  was assumed  for fiscal  2000.  The rate was
assumed to decrease  gradually  to 5.0 percent for 2007 and remain at that level
thereafter.

The Cooperative 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.  As such,  the assumed  health care trend rates have an  insignificant
effect  on  the  amounts   reported  for  the   postretirement   benefits  plan.
One-percentage  point  change in the assumed  health care trend rates would have
the following effect:

<TABLE>

                                                               1-Percentage       1-Percentage
                                                              Point Increase     Point Decrease

<S>                                                            <C>                <C>
Effect on total of service and interest cost components        $   47,913         $   (43,868)
Effect on postretirement benefit obligation                    $  283,765         $  (260,670)
</TABLE>

Retirement  Savings  and  Incentive  Plan:  Under  the  Retirement  Savings  and
Incentive Plan ("RSIP"),  the Cooperative makes an incentive contribution to the
RSIP if certain  pre-established  earnings goals are achieved. In addition,  the
Cooperative  contributes  401(k)  matching  contributions  to the  plan  for the
benefit of employees who elect to defer a portion of their salary into the plan.
During  fiscal 2000,  1999,  and 1998,  the  Cooperative  allocated  $1,076,000,
$888,000, and $475,000,  respectively, in the form of matching contributions and
$0, $0, and $400,000,  respectively,  in the form of incentive contributions for
the benefit of its employees.

In addition,  Agrilink Foods also maintains a Non-qualified  Retirement  Savings
Plan in which the Cooperative  allocates matching  contributions for the benefit
of  "highly  compensated  employees"  as  defined  under  Section  414(q) of the
Internal  Revenue Code.  During fiscal 2000,  1999,  and 1998,  the  Cooperative
allocated $243,000,  $208,000, and $131,000 respectively in the form of matching
contributions to this plan.

Long-Term  Incentive  Plan:  On June 24,  1996,  the  Cooperative  introduced  a
long-term incentive program,  the Agrilink Foods Equity Value Plan, which it has
amended from time to time. The Equity Value Plan provides performance units to a
select  group  of  management.  The  future  value of the  performance  units is
determined by the Company's performance on earnings and debt repayment.

Units  issued in 1996  through  1999 vest 25  percent  each year after the first
anniversary of the grant,  becoming 100 percent vested on the fourth anniversary
of grant. For units granted in 1996, the appreciated value of units in excess of
the initial grant price is paid as cash compensation on the tenth anniversary of
grant. The total units granted in 1996 were 248,511 at $13.38. For units granted
in 1997, 1998 and 1999, the final value of the  performance  units is determined
on the fourth anniversary of grant.  One-third of the appreciated value of units
in excess of the initial grant price is paid as cash  compensation  over each of
the subsequent  three years. The total units granted from 1997 through 1999 were
402,715  at $26.00 per unit in 1999,  308,628  at $21.88  per unit in 1998,  and
176,278 at $25.04 per unit in 1997.

For  units  granted  in  2000,  the  final  value  of the  performance  units is
discretionary.  Units granted in 2000 vest 100 percent on the fourth anniversary
of grant. The total units granted in 2000 were 371,806.

Units forfeited  since the inception of the plan include 8,731 at $26.00,  9,418
at $21.88, 18,362 at $25.04, and 27,165 at $13.38.

The value of the grants from the Agrilink  Foods Equity Value Plan will be based
on Agrilink's future earnings and debt repayment.

Employee Stock Purchase Plan:  During fiscal 1996 the Cooperative  introduced an
Employee Stock Purchase Plan which affords employees the opportunity to purchase
semi-annually,  in cash or via payroll  deduction,  shares of Class B Cumulative
Pro-Fac Preferred Stock to a maximum value of 5 percent of salary.  The purchase
price of such shares is par value, $10 per share.  During fiscal 2000, 1999, and
1998, 23,664, 26,061, and 27,043 shares,  respectively,  were held by employees,
and there were no shares subscribed to as of June 24, 2000.

<PAGE>

NOTE 8.       OPERATING SEGMENTS

During fiscal 1999, the Cooperative  adopted  Statement of Financial  Accounting
Standards No. 131,  "Disclosures  about Segments of an  Enterprise"  (SFAS 131).
SFAS No. 131 establishes  requirements for reporting information about operating
segments and establishes  standards for related  disclosures  about products and
services,  and  geographic  areas.  SFAS No.  131 also  replaces  the  "industry
segment"  approach  with the  "management"  approach.  The  management  approach
designates  the  internal  organization  that is used by  management  for making
operating  decisions  and  assessing  performance  as the  source of  reportable
segments. As management makes the majority of its operating decisions based upon
the  Cooperative's  significant  product lines,  The  Cooperative has elected to
utilize  significant  product lines in determining its operating  segments.  The
Cooperative's four primary operating segments are as follows: vegetables, fruit,
snacks, and canned meals.

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

<PAGE>
<TABLE>

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

(Dollars in Millions)                                                                      Fiscal Years Ended
                                                                          --------------------------------------------------
                                                                          June 24, 2000      June 26, 1999     June 27, 1998
                                                                          -------------      -------------     -------------
<S>                                                                         <C>                <C>              <C>
Net Sales:
   Vegetables                                                               $    886.6         $    763.1       $   233.1
   Fruits                                                                        110.4              111.5           119.7
   Snacks                                                                         87.3               87.9            83.7
   Canned Meals                                                                   60.3               64.2            64.0
   Other                                                                          54.5               73.0            58.6
                                                                            ----------         ----------       ---------
     Continuing segments                                                       1,199.1            1,099.7           559.1
   Businesses sold                                                                69.4              139.2           160.6
                                                                            ----------         ----------       ---------
         Total                                                              $  1,268.5         $  1,238.9       $   719.7
                                                                            ==========         ==========       =========

Operating income:
   Vegetables1                                                              $     70.8         $     46.0       $    11.5
   Fruits                                                                         13.9                8.4            17.1
   Snacks                                                                          6.7                3.3             6.1
   Canned Meals                                                                    6.7                6.5             6.8
   Other                                                                           4.6                3.7            (0.3)
                                                                            ----------         ----------       ---------
     Continuing segments operating income                                        102.7               67.9            41.2
   Businesses sold                                                                (1.2)               5.1            14.5
                                                                            ----------         ----------       ---------
         Total                                                                   101.5               73.0            55.7
Gains on sales of assets                                                           6.7               64.7             0.0
Restructuring expense                                                              0.0               (5.0)            0.0
                                                                            ----------         ----------       ---------
Total consolidated operating income                                              108.2              132.7            55.7
Interest expense                                                                 (83.5)             (67.4)          (30.7)
Amortization of debt issue costs associated with the Bridge Facility               0.0               (5.5)            0.0
                                                                            ----------         ----------       ---------
Pretax income before extraordinary item, dividends and allocation of
  net proceeds                                                              $     24.7         $     59.8       $    25.0
                                                                            ==========         ==========       =========
Total Assets:
   Vegetables                                                               $    966.2         $    974.1       $   300.8
   Fruits                                                                         79.4               90.2            87.5
   Snacks                                                                         43.5               40.9            43.1
   Canned Meals                                                                   45.7               46.2            49.8
   Other                                                                          52.2               43.1            47.4
                                                                            ----------         ----------       ---------
     Continuing segments                                                       1,187.0            1,194.5           528.6
   Businesses sold                                                                 0.0                1.1            37.9
   Assets held for sale                                                            0.3                0.9             2.7
                                                                            ----------         ----------       ---------
       Total                                                                $  1,187.3         $  1,196.5       $   569.2
                                                                            ==========         ==========       =========

Depreciation expense:
   Vegetables                                                               $     24.6         $     15.7       $     8.2
   Fruits                                                                          1.7                2.4             3.6
   Snacks                                                                          2.4                1.7             1.6
   Canned Meals                                                                    1.2                1.2             1.0
   Other                                                                           1.2                1.0             1.4
                                                                            ----------         ----------       ---------
     Continuing segments                                                          31.1               22.0            15.8
   Businesses sold                                                                 1.5                2.8             2.2
                                                                            ----------         ----------       ---------
     Total                                                                  $     32.6         $     24.8       $    18.0
                                                                            ==========         ==========       =========

Amortization Expense:
   Vegetables                                                              $       6.1         $      5.4       $     0.6
   Fruits                                                                          0.1                0.1             0.3
   Snacks                                                                          0.8                0.9             0.6
   Canned meals                                                                    0.7                0.7             0.8
   Other                                                                           0.7                0.6             0.6
                                                                           -----------         ----------       ---------
     Continuing segments                                                           8.4                7.7             2.9
   Businesses sold                                                                 0.4                1.7             0.7
                                                                           -----------         ----------       ---------
       Total                                                               $       8.8         $      9.4       $     3.6
                                                                           ===========         ==========       =========
</TABLE>
<PAGE>
<TABLE>

(Dollars in Millions)                                                                    Fiscal Years Ended
                                                                          --------------------------------------------------
                                                                          June 24, 2000      June 26, 1999     June 27, 1998
                                                                          -------------      -------------     -------------
<S>                                                                        <C>                 <C>              <C>
Capital expenditures:
   Vegetables                                                              $      21.4         $     19.5       $     8.0
   Fruits                                                                          1.6                1.3             1.5
   Snacks                                                                          2.3                2.0              1.8
   Canned Meals                                                                    1.1                0.6             0.5
   Other                                                                           0.2                0.3             0.4
                                                                           -----------         ----------       ---------
     Continuing Segments                                                          26.6               23.7            12.2
   Businesses sold                                                                 0.4                0.1             1.9
                                                                           -----------         ----------       ---------
       Total                                                               $      27.0         $     23.8       $    14.1
                                                                           ===========         ==========       =========
<FN>

1  The vegetable  product line includes  earnings  derived from Agrilink  Foods'
   investment in Great Lakes Kraut  Company,  LLC of $2.4 million,  $2.8 million
   and $1.9 million in fiscal 2000, fiscal 1999, and fiscal 1998,  respectively.
   See  NOTE  3  to  the  "Notes  to   Consolidated   Financial   Statements"  -
   "Acquisitions and Disposals - Formation of New Sauerkraut Company."

</FN>
</TABLE>

NOTE 9.       COMMON STOCK AND CAPITALIZATION

The following table illustrates the Cooperative's shares authorized, issued, and
outstanding at June 24, 2000 and June 26, 1999.

<TABLE>

                                                                                        Shares Issued and Outstanding
                                                                                              Fiscal Years Ended

                                                      Par               Shares         --------------------------------
                                                     Value            Authorized       June 24, 2000      June 26, 1999
                                                     -----            ----------       -------------      -------------

<S>                                                  <C>               <C>               <C>               <C>
Class A Common Stock                                 $ 5.00            5,000,000         2,132,981         1,995,740
Class B Common Stock                                 $ 5.00            2,000,000           723,229                 0
Non-Cumulative Preferred Stock                       $25.00            5,000,000            34,400            39,635
Class A Cumulative Preferred Stock                   $ 1.00           10,000,000         4,249,007         3,694,495
Class B Cumulative Preferred Stock                   $ 1.00            9,500,000                 0                 0
Class C Cumulative Preferred Stock                   $ 1.00           10,000,000                 0                 0
Class D Cumulative Preferred Stock                   $ 1.00           10,000,000                 0                 0
Class E Cumulative Preferred Stock                   $ 1.00           10,000,000                 0                 0
Class B, Series I 10% Cumulative Preferred Stock     $ 1.00              500,000            23,664            26,061
</TABLE>

On March 4,  1999,  the  Cooperative  authorized  up to  $15,000,000  of special
membership  interests  which shall have a stated value equal to such  interests'
face amount.

Common  Stock:  The  Common  Stock  purchased  by members is related to the crop
delivery of each member.  Regardless  of the number of shares held,  each member
has one vote. As of June 24, 2000,  there were 626 holders of the Class A Common
Stock and 150 holders of Class B Common Stock.  Common Stock may be  transferred
to another  grower only with approval of the Pro-Fac  Board of  Directors.  If a
member  ceases to be a  producer  of  agricultural  products  which is  marketed
through the  Cooperative,  then it must sell its Common Stock to another  grower
within the  members'  pool that is  acceptable  to the  Cooperative.  If no such
grower is available to purchase the stock,  then the member must sell its Common
Stock to the  Cooperative at par value.  There is no established  public trading
market for the Common Stock of the Cooperative.

In fiscal 2000,  1999, and 1998 dividends on Class A Common Stock were paid at a
rate of 5.0 percent.  There were no dividends  paid on the Class B Common Stock.
Subsequent to June 24, 2000, the Cooperative  declared a cash dividend at a rate
of 5.0  percent  on the Class A Common  Stock.  These  dividends  amounted  $0.5
million and were paid in July 2000.

At June 24, 2000 and June 26, 1999, there were outstanding subscriptions, at par
value,  of 233,977 and 384,649  shares for Class A Common  Stock,  respectively.
These shares are issued as  subscription  payments are  received.  There were no
outstanding subscriptions for the Class B Common Stock.

Preferred  Stock:  Except  for the  Class B,  Series  I, 10  Percent  Cumulative
Preferred Stock, all preferred stock outstanding  originated from the conversion
at par value of retains  at the  discretion  of  Pro-Fac's  board of  directors.
Preferred  Stock is non-voting,  except that the holders of preferred and common
stock are entitled to vote as separate  classes on certain  matters  which would
affect or subordinate the rights of the class.

On August 23, 1995, the Cooperative  commenced an offer to exchange one share of
its Class A Cumulative  Preferred Stock  (liquidation  preference $25 per share)
for each of its existing Non-cumulative  Preferred Stock (liquidation preference
$25 per share).  Pro-Fac's  Class <PAGE> A Cumulative  Preferred Stock is listed
under the symbol  PFACP on the Nasdaq  National  Market  System.  As of June 24,
2000, the number of Class A Cumulative Preferred Stock record holders was 1,831.

The "Class B,  Series I, 10 Percent  Cumulative  Preferred  Stock (the  "Class B
Stock") is issued to employees  pursuant to an Employee  Stock Purchase Plan. At
least once a year,  Pro-Fac  plans to offer to  repurchase at least 5 percent of
the outstanding shares of Class B Stock.

<TABLE>

The dividend rates for the preferred stock outstanding are as follows:

<S>                                                          <C>
Non-Cumulative Preferred Stock                               $1.50 per share paid annually at the discretion of the Board.

Class A Cumulative Preferred Stock                           $1.72   per   share   annually,   paid  in   four   quarterly
                                                             installments of $.43 per share.

Class B, Series I, 10 Percent Cumulative Preferred Stock     $1.00 per share paid annually.
</TABLE>

Subsequent to June 24, 2000, the  Cooperative  declared a cash dividend of $1.50
per share on the Non-cumulative  Preferred Stock and $.43 per share on the Class
A Cumulative  Preferred Stock. These dividends amounted to $1.9 million and were
paid in July 2000.

Retained Earnings Allocated to Members ("Retains"): Retains arise from patronage
income,  and are  allocated to the accounts of members  within 8.5 months of the
end of each fiscal year.

         Qualified Retains:  Qualified retains are freely  transferable.  At the
         discretion of the Board of Directors  qualified retains may mature into
         preferred  stock  in  December  of the  fifth  year  after  allocation.
         Qualified  retains  are  taxable  income to the  member in the year the
         allocation is made.

         Non-Qualified  Retains:  Non-qualified  retains  may  not  be  sold  or
         purchased.   At  the   discretion   of  the  Board  of  Directors   the
         non-qualified  retains allocation may be redeemed in five years through
         partial  payment  in  cash  and  issuance  of  preferred   stock.   The
         non-qualified  retains will not be taxable to the member until the year
         of redemption.

         Non-qualified  retains  may be subject to later  adjustment  if such is
         deemed necessary by the Board of Directors  because of events which may
         occur after the retains were allocated.

Beginning with the retains  issued in 1995, the maturity of all future  retains,
if approved by the Board of  Directors,  will result in the  issuance of Class A
Cumulative Preferred Stock.

Earned Surplus: Earned surplus consists of accumulated income after distribution
of earnings  allocated to members,  dividends and after state and federal income
taxes.  Earned  surplus is  reinvested  in the  business in the same  fashion as
retains.

NOTE 10.      SUBSIDIARY GUARANTORS

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

<PAGE>

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

(Dollars in Thousands)

                                                  Fiscal Year Ended

                                       -----------------------------------------
                                         June 24,       June 26,      June 27,
                                            2000          1999          1998
                                       -----------     ---------     ---------
Summarized Statement of Operations:

    Net sales/royalty income           $    74,163     $  33,026     $  12,086
    Gross profit                            59,072        23,641         5,123
    Income from continuing operations       59,343        20,732         1,002
    Net income                              38,575        13,401         1,002

Summarized Balance Sheet:

    Current assets                     $     3,258     $   1,759     $   2,033
    Noncurrent assets                      211,107       217,684         7,129
    Current liabilities                      6,926         8,290         1,267

NOTE 11.      OTHER MATTERS

Legal Matters: The Cooperative is party to various litigation and claims arising
in the  ordinary  course  of  business.  Management  and legal  counsel  for the
Cooperative  are of the  opinion  that none of these legal  actions  will have a
material effect on the financial position of the Cooperative.

Commitments:  Agrilink Foods has guaranteed an approximate $3.0 million loan for
Great  Lakes  Kraut  Company,  LLC in  which  Agrilink  Foods  has a 50  percent
interest.

Agrilink Foods has  guaranteed an approximate  $1.4 million loan for the City of
Montezuma to renovate a sewage  treatment  plant operated in Montezuma on behalf
of the City.