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 3, 2001


<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 30, 2001 and June 24,
2000,  and the results of their  operations and their cash flows for each of the
three years in the period ended June 30, 2001,  in  conformity  with  accounting
principles  generally accepted in the United States of America.  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 of America  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(a)(2) 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 30, 2001,  June 24, 2000,  and June 26,
1999  when  read  in  conjunction  with  the  related   consolidated   financial
statements.

PRICEWATERHOUSECOOPERS LLP



/s/ PricewaterhouseCoopers LLP
   Rochester, New York
   August 3, 2001, except for the eighth paragraph of NOTE 8, for which the
   date is September 5, 2001.



<PAGE>


                              FINANCIAL STATEMENTS


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

                                                                                                Fiscal Years Ended
                                                                                ------------------------------------------------
                                                                                June 30, 2001    June 24, 2000     June 26, 1999
                                                                                -------------    -------------     -------------

<S>                                                                              <C>              <C>               <C>
Net sales                                                                        $ 1,339,211      $ 1,306,659       $ 1,292,021
Cost of sales                                                                       (956,182)        (919,029)         (928,262)
                                                                                 ------------     -----------       -----------
Gross profit                                                                         383,029          387,630           363,759
Selling, administrative, and general expenses                                       (298,283)        (288,511)         (293,646)
Gains on sales of assets                                                                   0            6,635            64,734
Restructuring                                                                              0                0            (5,000)
Income from joint venture                                                              1,779            2,418             2,787
                                                                                 -----------      -----------       -----------
Operating income                                                                      86,525          108,172           132,634
Interest expense                                                                     (85,073)         (83,511)          (67,420)
Amortization of debt issue costs associated with the Bridge Facility                       0                0            (5,500)
                                                                                 -----------      -----------       -----------
Pretax income before extraordinary item, dividends, and
   allocation of net proceeds                                                          1,452           24,661            59,714
Tax provision                                                                           (968)          (8,497)          (24,746)
                                                                                 ------------     -----------       -----------
Income before extraordinary item, dividends, and allocation of net proceeds              484           16,164            34,968
Extraordinary item relating to the early extinguishment of debt (net of
   income taxes)                                                                           0                0           (18,024)
                                                                                 -----------      -----------       -----------
Net income                                                                       $       484      $    16,164       $    16,944
                                                                                 ===========      ===========       ===========

Allocation of Net Proceeds:
   Net income                                                                    $       484      $    16,164       $    16,944
   Dividends on common and preferred stock                                            (8,123)          (7,410)           (6,734)
                                                                                 ------------     -----------       -----------
   Net (deficit)/proceeds                                                             (7,639)           8,754            10,210
   Allocation from/(to) earned surplus                                                 7,639           (3,832)          (10,210)
                                                                                 -----------      -----------       -----------
   Net proceeds available to members                                             $         0      $     4,922       $         0
                                                                                 ===========      ===========       ===========

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

   Allocated to members but retained by the Cooperative:
     Qualified retains                                                                     0            3,445                 0
                                                                                 -----------      -----------       -----------
     Net proceeds available to members                                           $         0      $     4,922       $         0
                                                                                 ===========      ===========       ===========

Net income                                                                       $       484      $    16,164       $    16,944
Other comprehensive income:
     Unrealized gain on hedging activity, net of taxes                                   618                0                 0
     Minimum pension liability                                                           (48)             238              (155)
                                                                                 -----------      -----------       -----------
Comprehensive income                                                             $     1,054      $    16,402       $    16,789
                                                                                 ===========      ===========       ===========

<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
Pro-Fac Cooperative, Inc. and Consolidated Subsidiary - Agrilink Foods, Inc.
Consolidated Balance Sheets
(Dollars in Thousands)

                                     ASSETS

                                                                                                         June 30, 2001 June 24, 2000
<S>                                                              <C>                     <C>             <C>           <C>
Current assets:
   Cash and cash equivalents                                                                             $    7,656    $    4,994
   Accounts receivable, trade (net of allowances for doubtful accounts of $843 and  $998, respectively)      85,543       101,065
   Accounts receivable co-pack activity and other                                                             7,949        10,488
   Income taxes refundable                                                                                      938         9,869
   Inventories                                                                                              313,856       341,931
   Current investment in CoBank                                                                               3,998         2,927
   Prepaid manufacturing expense                                                                             22,427        26,364
   Prepaid expenses and other current assets                                                                 19,603        19,688
   Current deferred tax asset                                                                                 2,202        12,176
                                                                                                         ----------    ----------
       Total current assets                                                                                 464,172       529,502
Investment in CoBank                                                                                         10,660        16,203
Investment in joint venture                                                                                   8,018         6,775
Property, plant, and equipment, net                                                                         305,531       348,359
Assets held for sale at net realizable value                                                                    120           339
Goodwill and other intangible assets (net of accumulated amortization of  $38,108 and
  $28,248, respectively)                                                                                    248,777       258,545
Other assets                                                                                                 24,073        27,543
                                                                                                         ----------    ----------
       Total assets                                                                                      $1,061,351    $1,187,266
                                                                                                         ==========    ==========

            LIABILITIES AND SHAREHOLDERS' AND MEMBERS' CAPITALIZATION

Current liabilities:
   Notes payable - Agrilink Foods                                                                        $        0    $    5,700
   Notes payable - AgriFrozen Foods                                                                               0        44,100
   Current portion of obligations under capital leases                                                          316           218
   Current portion of long-term debt                                                                         15,599        16,583
   Accounts payable                                                                                         117,931        91,672
   Accrued interest                                                                                           9,253        11,398
   Accrued employee compensation                                                                             10,081        11,216
   Other accrued expenses                                                                                    49,345        66,397
   Dividends payable                                                                                             36            41
   Amounts due Class A members                                                                               17,983        21,696
                                                                                                         ----------    ----------
       Total current liabilities                                                                            220,544       269,021
Obligations under capital leases                                                                                571           520
Long-term debt                                                                                              631,128       679,205
Deferred income tax liabilities                                                                              26,376        36,825
Other non-current liabilities                                                                                29,417        33,852
Non-controlling interest in AgriFrozen Foods                                                                      0         8,000
                                                                                                         ----------    ----------
       Total liabilities                                                                                    908,036     1,027,423
                                                                                                         ----------    ----------
Commitments and contingencies
Class B cumulative redeemable preferred stock, liquidation preference $10 per
   share, authorized 500,000 shares; issued and outstanding 23,923
     and 23,664 shares, respectively                                                                            239           237
Class A common stock, par value $5, authorized 5,000,000 shares
                                                                June 30, 2001           June 24, 2000
                                                                -------------           -------------

   Shares issued                                                 2,257,479               2,132,981
   Shares subscribed                                                97,243                 233,977
                                                                 ---------               ---------
       Total subscribed and issued                               2,354,722               2,366,958
   Less subscriptions receivable in installments                   (97,243)               (233,977)
                                                                 ---------               ---------
       Total issued and outstanding                              2,257,479               2,132,981           11,287        10,665
                                                                 =========               =========
Class B common stock, par value $5, authorized 1,600,000 shares;
   issued and outstanding 723,229 and 723,229 shares, respectively                                                0             0
Shareholders' and members' capitalization:
   Retained earnings allocated to members                                                                    10,699        16,591
   Non-qualified allocation to members                                                                            0           300
Non-cumulative preferred stock, par value $25, authorized 5,000,000
   shares; issued and outstanding 32,308 and 34,400 shares, respectively                                        808           860
Class A cumulative preferred stock, liquidation preference $25 per share;
   authorized 10,000,000 shares; issued and outstanding 4,495,443 and
     4,249,007 shares, respectively                                                                         112,386       106,225
Special membership interests                                                                                      0             0
Earned surplus                                                                                               17,851        25,490
Accumulated other comprehensive income:
   Unrealized gain on hedging activity                                                                          618             0
   Minimum pension liability adjustment                                                                        (573)         (525)
                                                                                                         ----------    ----------
       Total shareholders' and members' capitalization                                                      141,789       148,941
                                                                                                         ----------    ----------
       Total liabilities and capitalization                                                              $1,061,351    $1,187,266
                                                                                                         ==========    ==========

<FN>
The accompanying notes are an integral part of these consolidated financial
statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
Pro-Fac Cooperative, Inc. and Consolidated Subsidiary - Agrilink Foods, Inc.
Consolidated Statements of Cash Flows
<CAPTION>
(Dollars in Thousands)

                                                                                            Fiscal Years Ended
                                                                            -------------------------------------------------------
                                                                            June 30, 2001        June 24, 2000        June 26. 1999
                                                                            -------------        -------------        -------------
<S>                                                                          <C>                 <C>                   <C>
Cash Flows from Operating Activities:
   Net income                                                                $     484           $   16,164            $  16,944
   Estimated cash payments to Class A members                                        0               (1,477)                   0
   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                    0               18,024
     Interest-in-kind on subordinated promissory note                            2,069                1,571                  782
     Gains on sales of assets                                                        0               (6,635)             (64,734)
     Loss on disposal of assets                                                      0                    0                  353
     Amortization of goodwill and other intangible assets                        9,860                8,768                9,396
     Amortization of debt issue costs and amendment costs and discount on
       subordinated promissory note                                              5,217                4,805                7,678
     Depreciation                                                               31,911               32,605               24,752
     Provision for deferred taxes                                                3,358               13,636                9,949
     Provision for losses on accounts receivable                                   610                  201                  208
     Equity in undistributed earnings of joint venture                          (1,243)                 (96)                 (95)
     Equity in undistributed earnings of CoBank                                    (97)                (412)                (520)
     Change in assets and liabilities, net of effects of business dispositions:
       Accounts receivable                                                      11,573              (10,992)                  32
       Inventories and prepaid manufacturing expense                           (20,570)             (66,754)              34,388
       Income taxes payable/refundable                                           8,931                1,426               (5,231)
       Accounts payable and accrued expenses                                     8,518              (15,746)             (52,639)
       Amounts due Class A members                                              (3,713)               1,651                 (591)
       Other assets and liabilities                                             (6,708)              12,860              (15,983)
                                                                             ----------          ----------            ---------
Net cash provided by/(used in) operating activities                             50,200               (8,425)             (17,287)
                                                                             ---------           ----------            ---------
Cash Flows from Investing Activities:
   Purchase of property, plant, and equipment                                  (26,170)             (26,983)             (23,787)
   Proceeds from disposals of property, plant, and equipment                     5,326               63,955               93,486
   Proceeds from sales of idle facilities                                          494                  405                1,427
   Proceeds from investment in CoBank                                            4,259                3,378                2,795
   Cash paid for acquisitions                                                        0                 (250)            (516,052)
                                                                             ---------           ----------            ---------
Net cash (used in)/ provided by investing activities                           (16,091)              40,505             (442,131)
                                                                             ----------          ----------            ---------
Cash Flows from Financing Activities:
   Net (payments on)/proceeds from short-term debt                              (3,600)              (5,100)              54,900
   Proceeds from issuance of long-term debt                                          0                    0              719,263
   Payments on long-term debt                                                  (18,084)             (18,470)            (287,574)
   Payments on capital leases                                                     (449)                (239)                (283)
   Cash paid for debt issuance costs and amendments                             (1,730)              (2,624)             (19,354)
   Issuance of stock, net of repurchases                                           622                  662                  844
   Cash portion of non-qualified conversion                                        (83)                (445)                (153)
   Cash dividends paid                                                          (8,123)              (7,410)              (6,734)
                                                                             ----------          ----------            ---------
Net cash (used in)/provided by financing activities                            (31,447)             (33,626)             460,909
                                                                             ----------          ----------            ---------
Net change in cash and cash equivalents                                          2,662               (1,546)               1,491
Cash and cash equivalents at beginning of period                                 4,994                6,540                5,049
                                                                             ---------           ----------            ---------
Cash and cash equivalents at end of period                                   $   7,656           $    4,994            $   6,540
                                                                             =========           ==========            =========

Supplemental Disclosure of Cash Flow Information:
   Cash paid during the year for:
     Interest                                                                $  80,301           $   72,702            $  65,760
                                                                             =========           ==========            =========
     Income taxes, net                                                       $   7,620           $    6,622            $  14,742
                                                                             =========           ==========            =========

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

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

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


<PAGE>


<TABLE>
Pro-Fac Cooperative, Inc. and Consolidated Subsidiary - Agrilink Foods, Inc.
Consolidated Statements of Cash Flows (Continued)
<CAPTION>
(Dollars in Thousands)
                                                                                              Fiscal Years Ended
                                                                            -----------------------------------------------------
                                                                            June 30, 2001         June 24, 2000       June 26, 1999
                                                                            -------------         -------------       --------------
<S>                                                                          <C>                  <C>                  <C>
     Acquisition of Erin's Gourmet Popcorn:
       Inventories                                                           $       0            $       0            $      33
       Property, plant, and equipment                                                0                    0                   26
       Goodwill and other intangible assets                                          0                    0                  554
                                                                             ---------            ---------            ---------
                                                                             $       0            $       0            $     613
                                                                             =========            =========            =========

     Acquisition of Dean Foods Vegetable Company:
       Accounts receivable                                                   $       0            $       0            $  24,201
       Current deferred tax asset                                                    0                    0               30,645
       Inventories                                                                   0                    0              195,674
       Prepaid expenses and other current assets                                     0                    0                6,374
       Property, plant, and equipment                                                0                    0              157,227
       Assets held for sale                                                          0                    0                   49
       Goodwill and other intangible assets                                          0                    0              178,377
       Accounts payable                                                              0                    0              (40,865)
       Accrued employee compensation                                                 0                    0               (8,437)
       Other accrued expenses                                                        0                    0              (74,845)
       Long-term debt                                                                0                    0               (2,752)
       Subordinated promissory note                                                  0                    0              (22,590)
       Other assets and liabilities, net                                             0                    0               (2,453)
                                                                             ---------            ---------            ---------
                                                                             $       0            $       0            $ 440,605
                                                                             =========            =========            =========

     Acquisition of J.A. Hopay Distributing Co., Inc.:
       Accounts receivable                                                   $       0            $       0            $     420
       Inventories                                                                   0                    0                  153
       Property, plant, and equipment                                                0                    0                   51
       Goodwill and other intangible assets                                          0                    0                3,303
       Other accrued expenses                                                        0                    0                 (251)
       Obligation for covenant not to compete                                        0                    0               (1,363)
                                                                             ---------            ---------            ----------
                                                                             $       0            $       0            $   2,313
                                                                             =========            =========            =========

Supplemental schedule of non-cash investing and financing activities:
         Conversion of retains to preferred stock                            $   5,975            $  13,732            $   4,648
                                                                             =========            =========            =========
         Net proceeds allocated to members but retained by the Cooperative   $       0            $   3,445            $       0
                                                                             =========            =========            =========
         Capital lease obligations incurred                                  $     448            $     171            $     320
                                                                             =========            =========            =========

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

<PAGE>

<TABLE>
Pro-Fac Cooperative, Inc. and Consolidated Subsidiary - Agrilink Foods, Inc.
Consolidated Statements of Changes in Shareholders' and Members' Capitalization and Redeemable Stock

<CAPTION>
(Dollars in Thousands)

                                                                                                  Fiscal Years Ended
                                                                                     --------------------------------------------
                                                                                     June 30,          June 24,           June 26,
                                                                                       2001              2000               1999
                                                                                    ----------       -----------       -----------
<S>                                                                                 <C>              <C>               <C>
Retained earnings allocated to members:
Qualified retains:
   Balance at beginning of period                                                   $   16,591       $   25,573        $   29,765
   Net proceeds allocated to members                                                         0            3,445                 0
   Converted to preferred stock                                                         (5,892)         (12,427)           (4,191)
   Cash paid in lieu of fractional shares                                                    0                0                (1)
                                                                                    ----------       ----------        ----------
   Balance at end of period                                                         $   10,699       $   16,591        $   25,573
                                                                                    ----------       ----------        ----------

Non-qualified retains:
   Balance at beginning of period                                                   $      300       $    2,050        $    2,660
   Distribution of non-qualified retains
     Cash paid                                                                             (83)            (445)             (153)
     Converted to preferred stock                                                         (217)          (1,305)             (457)
                                                                                    ----------       ----------        -----------
   Balance at end of period                                                                  0              300             2,050
                                                                                    ----------       ----------        ----------
Total retains allocated to members at end of period                                 $   10,699       $   16,891        $   27,623
                                                                                    ----------       ----------        ----------

Non-cumulative preferred stock:
   Balance at beginning of period                                                   $      860       $      991        $    1,125
   Conversion to cumulative preferred stock                                                (52)            (131)             (134)
                                                                                    ----------       ----------        ----------
   Balance at end of period                                                         $      808       $      860        $      991
                                                                                    ----------       ----------        ----------

Cumulative preferred stock:
   Balance at beginning of period                                                   $  106,225       $   92,362        $   87,580
   Converted from non-cumulative preferred stock                                            52              131               134
   Converted from non-qualified retains                                                    217            1,305               457
   Converted from qualified retains                                                      5,892           12,427             4,191
                                                                                    ----------       ----------        ----------
   Balance at end of period                                                         $  112,386       $  106,225        $   92,362
                                                                                    ----------       ----------        ----------

Earned surplus:
   Balance at beginning of period                                                   $   25,490       $   21,658        $   11,448
   Allocation (from)/to earned surplus                                                  (7,639)           3,832            10,210
                                                                                    ----------       ----------        ----------
   Balance at end of period                                                         $   17,851       $   25,490        $   21,658
                                                                                    ----------       ----------        ----------

Accumulated other comprehensive income:
   Balance at beginning of period                                                   $     (525)      $     (763)       $     (608)
   Minimum pension liability adjustment                                                    (48)             238              (155)
   Unrealized gain on hedging activity                                                     618                0                 0
                                                                                    ----------       ----------        ----------
   Balance at end of period                                                                 45             (525)             (763)
                                                                                    ----------       ----------        ----------
Total shareholders' and members' capitalization                                     $  141,789       $  148,941        $  141,871
                                                                                    ==========       ==========        ==========

Redeemable stock:
Class B cumulative preferred stock:
   Balance at beginning of period                                                   $      237       $      261        $      270
   (Repurchased)/issued, net                                                                 2              (24)               (9)
                                                                                    ----------       ----------        ----------
   Balance at end of period                                                         $      239       $      237        $      261
                                                                                    ==========       ==========        ==========

Common stock:
   Balance at beginning of period                                                   $   10,665       $    9,979        $    9,129
   Issued/(repurchased), net                                                               622              686               850
                                                                                    ----------       ----------        ----------
   Balance at end of period                                                         $   11,287       $   10,665        $    9,979
                                                                                    ==========       ==========        ==========

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


<PAGE>
            PRO-FAC COOPERATIVE, INC. AND CONSOLIDATED SUBSIDIARY
                              AGRILINK FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT 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 until February 15, 2001, through a former subsidiary,  PF
Acquisition  II,  Inc.  (PFII)  in which  it had a  controlling  interest.  PFII
conducted business under the name AgriFrozen Foods, Inc. ("AgriFrozen").  Unless
the context otherwise  requires,  the terms "Cooperative" and "Pro-Fac" refer to
Pro-Fac Cooperative, Inc. and its subsidiary, Agrilink Foods.

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.  In addition,  all of the  Cooperative's  operating
facilities,  excluding  one  in  Mexico,  are  within  the  United  States.  The
Cooperative conducts business under the name of Agrilink. In addition, the board
of directors of Agrilink Foods and Pro-Fac  conduct joint  meetings,  coordinate
their activities,  and act on a consolidated basis. Although Pro-Fac Cooperative
continues to be the legal name of the  Cooperative,  with the same structure and
regulations required by bank credit agreements and bond indentures, and with the
same  stock  symbol,  "PFACP,"  it  is  presented  as  Agrilink  for  all  other
communications.

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

Reclassification:  Prior year information is reclassified  whenever necessary to
conform with the current year's presentation.

Fiscal  Year:  The fiscal  year of Pro-Fac  ends on the last  Saturday  in June.
Fiscal 2001 comprised 53 weeks. Fiscal 2000 and 1999 comprised 52 weeks.

Consolidation: The consolidated financial statements include the Cooperative and
its subsidiary,  Agrilink Foods,  and until February 15, 2001,  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.

New  Accounting  Pronouncements:  In December  1999, the Securities and Exchange
Commission  (the  "SEC")  issued  Staff  Accounting  Bulletin  ("SAB")  No. 101,
"Revenue Recognition in Financial  Statements." SAB No. 101 provides guidance on
the  recognition,  presentation  and  disclosure  of  revenue  in the  financial
statements  filed with the SEC. SAB No.101 outlines the basic criteria that must
be met to recognize  revenue and provides  guidance  for  disclosure  related to
revenue  recognition  policies.  The Cooperative  adopted SAB No. 101 during the
fourth  quarter of fiscal  2001,  and  management  believes the adoption of this
pronouncement  did not have a  material  impact on the  Cooperative's  financial
statements or results of operations.

In  July  2000,  the  Emerging  Issues  Task  Force  ("EITF")  of the  Financial
Accounting Standards Board reached a final consensus on Issue 00-10, "Accounting
for  Shipping  and  Handling  Fees and  Costs."  The EITF  addresses  the income
statement  classification  for shipping and handling  costs and revenues.  Issue
00-10 became  effective  during the fourth quarter of fiscal 2001.  Accordingly,
freight  expense,  previously  classified as a reduction to gross sales,  is now
classified  as a  component  of cost of sales  and all prior  periods  have been
reclassified  to reflect this  modification.  Freight expense was $59.0 million,
$53.2 million,  and $53.1 million in fiscal 2001, 2000, and 1999,  respectively.
The  adoption  of  EITF  Issue  00-10  did not  have a  material  affect  on the
Cooperative's financial statements and results of operations.

In  January  2001,  the  EITF  reached  a  partial  consensus  on  Issue  00-22,
"Accounting  for Points and  Certain  Other  Time-Based  or  Volume-Based  Sales
Incentive  Offers,  and Offers for Free  Products or Services to Be Delivered in
the Future"  which address the  recognition,  measurement  and income  statement
classification  for certain sales incentives (e.g.,  volume purchase rebates and
free or discounted goods). These guidelines became effective for the Cooperative
during the third  quarter of fiscal 2001 and had no impact on the  Cooperative's
financial position or results of operations.

In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of  Financial   Accounting  Standard  ("SFAS")  No.  142,  "Goodwill  and  Other
Intangible  Assets."  SFAS  No.  142  addresses  the  financial  accounting  and
reporting of goodwill and other intangible assets and supercedes APB Opinion No.
17,  "Intangible  Assets."  The  statement  will modify how an entity  initially
accounts for  goodwill  and other  intangible  assets,  assesses for  subsequent
impairment, and the requirement to amortize these assets. The provisions of SFAS
No. 142 must be adopted for fiscal years beginning after December 15, 2001, with
early  application  permitted for companies  with fiscal years  beginning  after
March  15,  2001.  The   Cooperative  is  currently   assessing  the  impact  of
implementation on its results of operations and financial position.
<PAGE>
In July 2000,  the EITF  reached a consensus  on Issue  00-14,  "Accounting  for
Certain Sales Incentives." The consensus addresses the recognition, measurement,
and income statement  classification  for sales incentives that a company offers
to its  customers.  Accordingly,  coupon  expense,  now  classified  as selling,
general and administrative expense, will be reclassified as a reduction of gross
sales  and  all  prior  periods  will  also  be  reclassified  to  reflect  this
modification.  The  adoption of EITF Issue 00-14 is not  expected to  materially
impact the Cooperative's  financial  statements.  The Cooperative estimates that
its  coupon  expense  is  approximately  $6.5  to $8.5  million  per  year.  The
Cooperative must adopt EITF Issue 00-14 by the third quarter of fiscal 2002 with
earlier application permitted

In April 2001,  the EITF reached a final  consensus on Issue 00-25,  "Accounting
for Consideration from a Vendor to a Retailer in Connection with the Purchase or
Promotion of the Vendor's  Products."  The consensus  addressees  the accounting
treatment and income  statement  classification  for certain  sales  incentives,
including cooperative advertising arrangements, buydowns, and slotting fees. The
consensus  requires that slotting  fees,  now  classified by the  Cooperative as
selling,  general, and administrative expense, be reclassified as a reduction of
gross sales.  These guidelines will become effective for the Cooperative  during
the third quarter of fiscal 2002.  The adoption of EITF 00-25 is not expected to
materially impact the Cooperative's financial statements.

Restructuring:  During the third  quarter of fiscal 1999,  Agrilink  Foods began
implementation of a corporate-wide restructuring program. The overall objectives
of the plan  were to  reduce  expenses,  improve  productivity,  and  streamline
operations.  The total  restructuring  charge  amounted to $5.0  million and was
primarily  comprised of employee  termination  benefits.  Efforts focused on the
consolidation  of operating  functions and the  elimination of  approximately  5
percent of the work force.  Reductions  in personnel  included  operational  and
administrative  positions. All remaining termination benefits were liquidated in
fiscal 2001.

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 30, 2001 and June 24, 2000.

Inventories:  Inventories  are  stated  at the  lower of cost or  market  on the
first-in, first-out ("FIFO") method. The Company provides inventory reserves for
obsolete or slow moving  inventory based on changes in consumer demand and other
economic  conditions.  Reserves recorded at June 30, 2001 and June 24, 2000 were
$3,135,000 and $3,385,000, respectively.

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

Earnings on the Company's  investment in CoBank in fiscal year 2001,  2000,  and
1999 amounted to $138,000, $590,000, and $743,000, 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 inventory  during the next  production
period and recognized as an element of cost of goods sold.

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 35 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.  Under  the  current
guidance of SFAS No. 121, 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. If the cash flows are less than the carrying value,  an impairment  charge
would be recognized  for the  difference  between the  estimated  fair value and
carrying value.
<PAGE>
Other Assets:  Other assets are primarily comprised of debt issuance costs. 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 approximately $2,759,000, $2,758,000, and $7,678,000, in fiscal
2001, 2000, and 1999, respectively.

Derivative  Financial  Instruments:  The Cooperative does not engage in interest
rate  speculation.  Derivative  financial  instruments  are  utilized  to  hedge
interest rate risk,  commodity price risk, and foreign currency related risk and
are not held for trading purposes. Refer to NOTE 7 for additional disclosures of
the Cooperative's hedging activities.

Income  Taxes:  Income  taxes are  provided  on income for  financial  reporting
purposes.  Deferred  income taxes resulting from temporary  differences  between
financial  reporting  and tax  reporting  are  appropriately  classified  in the
balance sheet.

Pension:  The  Cooperative  and its  subsidiary  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.

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 30, 2001 and June 24, 2000 was $3.8 million and $5.2
million, respectively.

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

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

Advertising:  Production  costs of commercials  and  programming  are charged to
operations in the year first aired. The costs of other advertising promotion and
marketing  programs  are  charged  in the  year  incurred.  Advertising  expense
incurred in fiscal year 2001,  2000,  and 1999 amounted to  approximately  $37.5
million, $43.6 million, and $38.2 million, respectively.

Environmental  Expenditures:  Environmental expenditures that pertain to current
operations   are  expensed  or   capitalized   consistent   with  the  Company'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.

Income from Joint Venture:  Represents  earnings received from the investment in
Great Lakes Kraut Company,  LLC, a joint venture  formed between  Agrilink Foods
and Flanagan Brothers,  Inc. See NOTE 5 to the "Notes to Consolidated  Financial
Statements" for additional information.

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.

Comprehensive Income: Under SFAS No. 130, the Cooperative is required to display
comprehensive  income and its  components as part of the  financial  statements.
Comprehensive  income is  comprised  of net  earnings  and  other  comprehensive
income/(loss),  which includes  certain changes in equity that are excluded from
net  earnings.   The  Cooperative   includes  adjustments  for  minimum  pension
liabilities and unrealized  holding gains and losses on hedging  transactions in
other comprehensive income/(loss).

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

          Cash and Cash Equivalents, Accounts Receivable, 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 $14.7  million at June 30,  2001.  As there is no market price for
          this investment, a reasonable estimate of fair value is not possible.
<PAGE>
          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 8 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
"Agreement").  Under the  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 Agreement. For
the fiscal years ended 2001,  2000,  and 1999, the CMV for all crops supplied by
Pro-Fac   amounted  to  $69.0  million,   $69.6  million,   and  $62.2  million,
respectively. The crops purchased by Agrilink Foods from Pro-Fac Class A members
represented  approximately  60 percent,  55  percent,  and 71 percent of the raw
agricultural  crops  purchased  by Agrilink  Foods from  Pro-Fac in fiscal 2001,
2000, and 1999, respectively.

Under  the  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. The volume and type of
crops to be purchased by Agrilink  Foods from Pro-Fac  under the  Agreement  are
determined  pursuant to its annual profit plan, which requires the approval of a
majority of the Disinterested  Directors.  In addition,  under the agreement, in
any year in which  Agrilink  Foods has earnings on products which were processed
from crops  supplied by Pro-Fac  ("Pro-Fac  Products"),  Agrilink  Foods pays to
Pro-Fac, as additional patronage income, 90 percent of such earnings,  but in no
case more than 50 percent of all  pretax  earnings  of  Agrilink  Foods  (before
dividing with  Pro-Fac).  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 90
percent  of such  losses,  but in no case by more than 50  percent of all pretax
losses of Agrilink Foods (before  dividing with Pro-Fac).  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 of  losses of  certain  operations  of the  business.
Earnings  and  losses are  determined  at the end of the  fiscal  year,  but are
accrued on an estimated  basis  during the year.  For fiscal years 2001 and 2000
such  additional  patronage  income  amounted to $0.7 million and $12.3 million,
respectively.  During  fiscal 1999,  there was no additional  patronage  income.
Under the Agreement,  Pro-Fac is required to reinvest at least 70 percent of the
additional  Patronage income in Agrilink Foods.  Since Pro-Fac's  acquisition of
Agrilink  Foods in 1994,  Pro-Fac has invested an  additional  $39.0  million in
Agrilink Foods.

In the first quarter of fiscal 1999,  Agrilink Foods reclassified a $9.4 million
demand receivable due from Pro-Fac  reflecting the conversion of such receivable
to a  non-interest  bearing,  long-term  obligation  due from  Pro-Fac  having a
10-year maturity.

AgriFrozen:  The  contractual  relationship  between  Pro-Fac and AgriFrozen was
defined  in  a  Marketing  and  Facilitation   Agreement   between  Pro-Fac  and
AgriFrozen. Under the agreement,  AgriFrozen purchased raw products from Pro-Fac
and processed and marketed the finished  products.  AgriFrozen  paid Pro-Fac CMV
for the crops supplied by Pro-Fac. In addition,  in any year in which AgriFrozen
had  earnings   AgriFrozen   would  distribute  such  earnings  to  Pro-Fac  for
distribution to Class B members of Pro-Fac. In the event AgriFrozen  experienced
any losses on  products,  AgriFrozen  would deduct the losses from the total CMV
payable.  As a result of the closing of AgriFrozen  facilities,  as discussed in
NOTE 3 to the "Notes to Consolidated  Financial Statements," it is expected that
the Marketing and Facilitation  Agreement between Pro-Fac and AgriFrozen will be
terminated at some point after June 30, 2001. It is not expected that there will
be any further CMV payments or any  additional  earnings  distributed to Class B
members.

The board of directors of AgriFrozen resigned effective February 15, 2001.

Amounts  received  by Class B members of Pro-Fac  from  AgriFrozen  for the year
ended March 24, 2001 and March 25,  2000,  for the  commercial  market  value of
crops delivered was $5.9 million and $12.4 million, respectively. In fiscal 2000
and 2001, AgriFrozen incurred losses, and in accordance with the agreement,  the
losses reduced the CMV payable to members.

NOTE 3. ACQUISITIONS, DISPOSALS, AND CLOSINGS

Fiscal 2001 -

Closing of  AgriFrozen:  On January 22, 2001,  AgriFrozen  announced that it was
closing its frozen vegetable business  facilities in Woodburn,  Oregon and Walla
Walla and Grandview, Washington. AgriFrozen employed approximately 600 full time
employees at its various  locations.  There were  approximately  150 growers who
historically supplied crops to AgriFrozen. The closings were due to
<PAGE>
the decision by  AgriFrozen's  board not to plant or process  crops for the 2001
growing season.  The combination of the uncertainty of continued  funding of the
operations  of  AgriFrozen  by its lender,  current  industry  trends  showing a
decline in private label and industrial frozen vegetable sales and pricing,  and
the  highly  competitive  nature  of the food  business  were the basis for this
action.

On February 15, 2001,  Pro-Fac  abandoned its ownership  interest in AgriFrozen.
Neither  Pro-Fac  nor  Agrilink  Foods  guaranteed  the debts of  AgriFrozen  or
otherwise   pledged  any  of  their   respective   properties  as  security  for
AgriFrozen's  indebtedness.  All  of  AgriFrozen's  indebtedness  was  expressly
without  recourse to Pro-Fac and  Agrilink  Foods.  See  further  discussion  at
"Credit  Agreement and  Subordinated  Note Agreement of AgriFrozen" at NOTE 8 to
the "Notes to Consolidated Financial Statements".

At the request of AgriFrozen's  lenders,  Agrilink Foods submitted a proposal to
purchase the  inventory of  AgriFrozen.  The  acquisition  of the  inventory was
completed on February 16, 2001.  Refer to NOTE 4,  "Inventories"  for additional
detail of the purchase.

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  $5.0 million were applied to bank
loans,  $3.2  million of which was  applied to the Term Loan  Facility  and $1.8
million of which was applied to the Revolving Credit Facility.

This  transaction  did not include any other products  carrying the Nalley brand
name,  including  prepared  canned meal products.  Agrilink  Foods  continues to
contract  pack Nalley and  Farman's  pickle  products for a period of two years,
beginning June 23, 2000, at the existing Tacoma  processing plant which Agrilink
Foods operates.

Under a related agreement,  the Cooperative  supplies 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 included 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  did  business  under the name  AgriFrozen  Foods
("AgriFrozen"),   acquired  the  frozen  vegetable  business  of  Agripac,  Inc.
("Agripac"), an Oregon cooperative.  AgriFrozen was formed in January 1999 under
the  corporation  laws of New York  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.
<PAGE>
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 were identified, but none of them individually,  or in
the  aggregate,  were  expected  to  exceed  $4.0  million  debt  reduction  for
environmental remediation to be provided by CoBank.

As  part of its  business  strategy,  AgriFrozen  maintained  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  Cooperative's  Statement of  Operations
since the  acquisition  date.  See  discussion  of closing of this  facility  as
highlighted above.

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. This note was subsequently sold to Great
Lakes Kraut Company, a joint venture of the Company,  in December 2000. 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.

After the DFVC Acquisition, DFVC was merged into Agrilink Foods. DFVC was 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
strengthened  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.
<PAGE>
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  "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  (This  note  was
subsequently  sold to Great Lakes  Kraut  Company,  a joint  venture of Agrilink
Foods, in December 2000). The Bridge Facility was repaid during November of 1998
principally with the proceeds from a new Senior  Subordinated Note Offering (the
"Notes").  See NOTE 8 - "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  Cooperative's  Statement  of  Operations  since the
acquisition date.

NOTE 4. INVENTORIES

The major classes of inventories are as follows:

(Dollars in Thousands)
                                            June 30,          June 24,
                                              2001              2000
                                         -------------       ----------

Finished goods                             $  279,991        $  290,195
Raw materials and supplies                     33,865            51,736
                                           ----------        ----------
     Total inventories                     $  313,856        $  341,931
                                           ==========        ==========


<PAGE>

On February  16,  2001,  Agrilink  Foods  completed  the  purchase of the frozen
vegetable  inventory of  AgriFrozen.  AgriFrozen's  lender sold the inventory to
Agrilink  Foods  pursuant to a private  sale under the Uniform  Commercial  Code
after  AgriFrozen  voluntarily  surrendered  the  inventory  to the lender.  The
purchase  price was $31.6  million of which $10.0 million was paid to the lender
on April 1, 2001,  and the  remaining  balance  was paid on August 1, 2001.  The
$21.6  million is included in accounts  payable at June 30,  2001.  In addition,
under a related agreement between Agrilink Foods and AgriFrozen,  Agrilink Foods
funded certain operating costs and expenses of AgriFrozen,  primarily in storing
and converting the purchased  inventory to finished  goods,  during a transition
period  which  ended on June 30,  2001.  Total  expenses  were  estimated  to be
approximately $7.1 million, of which $6.0 million has been funded as of June 30,
2001.  This funding is net of the proceeds of available  receivables not pledged
to the lender.  Agrilink  Foods  incurred  fees of  approximately  $0.8  million
related to this transaction which were expensed during the second half of fiscal
2001.

NOTE 5. INVESTMENT IN JOINT VENTURE

Formation of Sauerkraut  Company:  On 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 30, 2001       June 24, 2000    June 26, 1999
                              -------------       -------------    -------------

Net sales                       $  30,688           $  36,126         $ 33,335
Gross profit                    $   6,744           $   9,150         $  9,392
Operating income                $   3,105           $   5,488         $  6,267
Net income                      $   3,559           $   4,836         $  5,575

Condensed Balance Sheet
(Dollars in Thousands)

                              June 30,2001        June 24, 2000
                              ------------        -------------

Current assets                  $  13,050           $  12,464
Noncurrent assets               $  33,158           $  22,081
Current liabilities             $  12,763           $  13,158
Noncurrent liabilities          $  15,049           $   4,579

On December 1, 2000,  Great Lakes Kraut Company,  LLC purchased the Subordinated
Promissory  Note issued by Agrilink Foods to Dean Foods in conjunction  with the
acquisition of Dean Foods Vegetable Company. Great Lakes Kraut Company, LLC paid
$10  million  for the  Subordinated  Promissory  Note  with  proceeds  from bank
financing.
<PAGE>
NOTE 6. PROPERTY, PLANT AND EQUIPMENT AND RELATED OBLIGATIONS

The  following  is a summary  of  property,  plant  and  equipment  and  related
obligations at June 30, 2001 and June 24, 2000:
<TABLE>
<CAPTION>
(Dollars in Thousands)

                                                    June 30, 2001                                     June 24, 2000
                                       ----------------------------------------     -----------------------------------------
                                         Owned         Leased                        Owned           Leased
                                         Assets        Assets          Total         Assets          Assets            Total
                                       ----------    ---------       --------       ----------      ----------       ----------

<S>                                    <C>           <C>             <C>            <C>             <C>              <C>
Land                                   $  14,019     $     0         $ 14,019       $  18,943       $      0         $  18,943
Land improvements                          7,627           0            7,627           7,828              0             7,828
Buildings                                108,991         395          109,386         114,428            395           114,823
Machinery and equipment                  300,741       1,115          301,856         307,890            936           308,826
Construction in progress                  12,249           0           12,249          14,499              0            14,499
                                       ---------     -------         --------       ---------       --------         ---------
                                         443,627       1,510          445,137         463,588          1,331           464,919
Less accumulated depreciation           (138,922)       (684)        (139,606)       (115,856)          (704)         (116,560)
                                       ---------     -------         --------       ---------       --------         ---------
Net                                    $ 304,705     $   826         $305,531       $ 347,732       $    627         $ 348,359
                                       =========     =======         ========       =========       ========         =========

Obligations under capital leases1                    $   887                                        $    738
Less current portion                                    (316)                                           (218)
                                                     -------                                        --------
Long-term portion                                    $   571                                        $    520
                                                     =======                                        ========

<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
$0.6 million,  $0.7 million,  and $0.3 million in fiscal 2001,  2000,  and 1999,
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
------------------------                   -------   ----------   -----------
       2002                                    400       5,422         5,822
       2003                                    325       3,984         4,309
       2004                                    193       2,974         3,167
       2005                                     89       2,258         2,347
       2006                                     35       1,249         1,284
   Later years                                   0       2,309         2,309
                                           -------   ---------     ---------
Net minimum lease payments                   1,042   $  18,196     $  19,238
                                                     =========     =========
Less amount representing interest             (155)
                                           -------
Present value of minimum lease payments    $   887
                                           =======

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
$16.6 million, $18.7 million, and $15.4 million for fiscal years 2001, 2000, and
1999, respectively.

NOTE 7. ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

On June 25, 2000, the  Cooperative  adopted FASB SFAS No. 133,  "Accounting  for
Derivative  Instruments  and  Hedging  Activities."  SFAS No. 133  requires  the
recognition  of  all  derivative  financial  instruments  as  either  assets  or
liabilities in the balance sheet and  measurement  of those  instruments at fair
value.  Changes in the fair  values of those  derivatives  will be  reported  in
earnings or other  comprehensive  income  depending on the use of the derivative
and whether it qualifies  for hedge  accounting.  The  accounting  for gains and
losses  associated with changes in the fair value of a derivative and the effect
on the consolidated  financial  statements will depend on its hedge  designation
and whether the hedge is highly effective in achieving offsetting changes in the
fair value or cash flow of the asset or liability  hedged.  Under the provisions
of SFAS No. 133, the method that will be used for assessing the effectiveness of
a hedging  derivative,  as well as the measurement  approach for determining the
ineffective  aspects of the hedge,  must be  established at the inception of the
hedge.
<PAGE>
The  Cooperative,  as a result of its  operating and  financing  activities,  is
exposed to changes in foreign currency exchange rates, certain commodity prices,
and interest  rates,  which may adversely  affect its results of operations  and
financial  position.  In seeking to minimize the risks  and/or costs  associated
with such activities, the Cooperative may enter into derivative contracts.

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

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

Agrilink  Foods has entered into foreign  currency  forward  contracts  that are
designated  as cash flow  hedges of  exchange  rate risk  related to  forecasted
foreign  currency-denominated  intercompany  sales.  At June 30, 2001,  Agrilink
Foods had cash flow hedges for the Mexican peso with maturity dates ranging from
July 2001 to May 2002 for 124 million pesos.

At June 30, 2001,  the fair value of the open contracts was an after-tax gain of
approximately $0.6 million recorded in accumulated other comprehensive income in
shareholder's equity. Amounts deferred to accumulated other comprehensive income
will be reclassified  into cost of goods sold. For the year ended June 30, 2001,
approximately $0.3 million has been reclassified from other comprehensive income
to cost of goods sold. Hedge ineffectiveness was insignificant.

Commodity  Prices:  Agrilink Foods is exposed to commodity price risk related to
forecasted  purchases of soybean oil, an ingredient in the  manufacture of salad
dressings and  mayonnaise.  To mitigate  this risk,  Agrilink  Foods  designated
soybean oil forward contracts as cash flow hedges of its forecasted  soybean oil
purchases.   Agrilink  Foods  maintained   soybean  oil  contracts  that  hedged
approximately 70 percent of its planned soybean oil  requirements  during fiscal
2001. These contracts were either sold or expired during fiscal 2001, and a loss
of $0.2 million recorded in cost of goods sold.

Agrilink  Foods is also  exposed to commodity  price risk related to  forecasted
purchases of flour in its manufacturing process. To mitigate this risk, Agrilink
Foods  designated a swap agreement as a cash flow hedge of its forecasted  flour
purchases.  Agrilink Foods maintained flour contracts that hedged  approximately
59 percent of its planned flour  requirements  during fiscal 2001. The contracts
expired during fiscal 2001, and an immaterial loss was recorded in cost of goods
sold.

Agrilink  Foods is also  exposed to commodity  price risk related to  forecasted
purchases of corrugated (unbleached kraftliner) in its manufacturing process. To
mitigate this risk,  Agrilink  Foods  designated a swap agreement as a cash flow
hedge  of  its   forecasted   corrugated   purchases.   Agrilink   Foods  hedged
approximately 80 percent of its planned corrugated requirements.  This agreement
had no fair value and terminated on June 30, 2001.

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

The first  interest  rate swap  contract  required  payment  of a fixed  rate of
interest  (4.96  percent)  and the  receiving  of a  variable  rate of  interest
(three-month  London Interbank Offered Rate ("LIBOR") of 4.85 percent as of June
30, 2001) on $150 million notional amount of indebtedness.  Agrilink Foods had a
second  interest  rate  swap  contract  to pay a fixed  rate of  interest  (5.32
percent)  and  receive a variable  rate of interest  (three-month  LIBOR of 4.85
percent as of June 30, 2001) on $100 million  notional  amount of  indebtedness.
Approximately  61  percent of the  underlying  debt is being  hedged  with these
interest rate swaps.

Agrilink  Foods  designates  these  interest  rate swap  contracts  as cash flow
hedges.  The fair value of the cash flow hedge is  generally  deferred  to other
comprehensive  income and  reclassified to interest expense over the life of the
swap  contracts.  However,  to the extent  that any of these  contracts  are not
considered  effective  in  offsetting  the  change in the value of the  interest
payments  being hedged,  any changes in fair value  relating to the  ineffective
portion of these  contracts are  immediately  recognized in income.  At June 30,
2001, these interest rate swap contracts were not considered effective,  and the
fair  value of the  contracts  was an  after-tax  loss of $0.4  million  and was
reported in earnings.

<PAGE>

NOTE 8. DEBT

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

<TABLE>
<CAPTION>
(Dollars in Thousands)

                                                                      June 30,          June 24,
                                                                        2001              2000
                                                                    ----------         ----------

<S>                                                                 <C>                <C>
Term Loan Facility - Agrilink Foods                                 $  411,600         $  428,300
Term Loan Facility - AgriFrozen                                              0             30,000
Senior Subordinated Notes                                              200,015            200,015
Subordinated Promissory Note (net of discount) - Agrilink Foods         29,660             26,144
Subordinated Promissory Note (net of discount) - AgriFrozen                  0              4,493
Other                                                                    5,452              6,836
                                                                    ----------         ----------
Total debt                                                             646,727            695,788
Less current portion                                                   (15,599)           (16,583)
                                                                    ----------         ----------
Total long-term debt                                                $  631,128         $  679,205
                                                                    ==========         ==========
</TABLE>

AGRILINK FOODS DEBT

Credit Facility (Bank Debt): In connection with the DFVC  Acquisition,  Agrilink
Foods entered into a Credit  Facility with Harris Bank as  Administrative  Agent
and Bank of Montreal as  Syndication  Agent,  and the  lenders  thereunder.  The
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 Credit Facility.

The  Credit  Facility  bears  interest,   at  Agrilink  Foods'  option,  at  the
Administrative  Agent's  alternate  base rate or the LIBOR  plus,  in each case,
applicable  margins of: (i) in the case of alternate  base rate loans,  (x) 1.25
percent for loans under the Revolving  Credit  Facility and the Term A Facility,
(y) 3.00  percent for loans under the Term B Facility  and (z) 3.25  percent for
loans under the Term C Facility  and (ii) in the case of LIBOR  loans,  (x) 3.00
percent for loans under the Revolving  Credit  Facility and the Term A Facility,
(y) 4.00  percent for loans under the Term B Facility  and (z) 4.25  percent for
loans under the Term C Facility.  The  Administrative  Agent's  "alternate  base
rate" is defined as the greater of: (i) the prime  commercial  rate as announced
by the  Administrative  Agent or (ii) the Federal  Funds rate plus 0.50 percent.
The fiscal 2001  weighted-average  rate of interest  applicable to the Term Loan
Facility was 9.97 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 30,  2001,  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
-----------    -----------   -----------    -----------    -----

    2002         $  10.0       $   0.4       $    0.4    $  10.8
    2003            10.0           0.4            0.4       10.8
    2004             6.4           0.4            0.4        7.2
    2005             0.0         189.0            0.4      189.4
    2006             0.0           0.0          193.4      193.4
                 -------       -------       --------    -------
                 $  26.4       $ 190.2       $  195.0    $ 411.6
                 =======       =======       ========    =======

The Term  Loan  Facility  is  subject  to  mandatory  prepayment  under  various
scenarios as defined in the Credit Facility.  During fiscal 2001, Agrilink Foods
made  mandatory  prepayments of $3.2 million from proceeds of the sale of pickle
machinery and equipment. In addition,  during fiscal 2001, principal payments of
$13.5 million were made on the Term Loan Facilities.

<PAGE>

Agrilink Foods'  obligations  under the 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,  a former  subsidiary  of  Pro-Fac),  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 Credit  Facility  are  guaranteed  by Pro-Fac  (excluding
AgriFrozen) and certain of Agrilink Foods' subsidiaries.

The 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 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,  a former  subsidiary of Pro-Fac,  were not
consolidated  with  Pro-Fac for  purposes  of  determining  compliance  with the
covenants.  In August 2001,  September  2000,  and August 1999,  Agrilink  Foods
negotiated  amendments  to the original  covenants.  In  conjunction  with these
amendments,  Agrilink Foods incurred fees of  approximately  $1.5 million,  $1.7
million and $2.6 million, respectively.  These fees are being amortized over the
remaining  life of the  Credit  Facility.  Pro-Fac  and  Agrilink  Foods  are in
compliance with all covenants, restrictions, and requirements under the terms of
the Credit Facility as amended.

The August 2001  amendment  imposes  contingent  fees and possible  increases in
interest  rates  under the Credit  Facility  based in part on the ability of the
Company to raise  equity,  and  deleverage  its  balance  sheet  within  certain
timeframes.  To this end, the Company has engaged a financial  advisor to assist
it in raising a minimum of $100 million through a private placement of an as yet
unspecified  class of securities of the Company.  The amount of such  contingent
fees is also  impacted by EBITDA which the Company  achieves for its fiscal year
ending in June 2002.

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

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

The 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 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  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.

Subordinated Promissory Note: As partial consideration for the DFVC Acquisition,
Agrilink  Foods  issued to Dean  Foods a  Subordinated  Promissory  Note for $30
million  aggregate  principal  amount due  November  22,  2008.  Interest on the
Subordinated Promissory 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 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  Subordinated  Promissory Note.
Agrilink Foods satisfied this requirement in fiscal 2001 through the issuance of
five additional  promissory notes each for approximately $0.4 million.  Interest
accruing after November 22, 2003 is payable in cash. The Subordinated Promissory
Note may be prepaid at Agrilink Foods's option without premium or penalty.

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


<PAGE>

On December 1, 2000, Dean Foods sold the  Subordinated  Promissory Note to Great
Lakes Kraut Company,  LLC, a joint venture  between  Agrilink Foods and Flanagan
Brothers, Inc. This sale did not affect the terms of the note.

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>
<CAPTION>
(Dollars in Thousands)
                                                                          Fiscal Years Ended
                                                  --------------------------------------------------------------------
                                                  June 30,2001              June 24, 2000              June 26, 1999
                                                  ------------              -------------              -------------
<S>                                                 <C>                       <C>                        <C>
Balance at end of period                            $        0                $   5,700                  $  18,900
Rate at fiscal year end                                    0.0%                   9.375%                       8.2%
Maximum outstanding during the period               $  121,000                $ 156,100                  $ 116,200
Average amount outstanding during the period        $   76,900                $  90,800                  $  76,700
Weighted average interest rate during the period           9.2%                     8.5%                       7.8%
</TABLE>

Agrilink Foods also maintains a Letter of Credit Facility which provides for the
issuance of letters of credit through September 2001. As of June 30, 2001, there
were $13.4  million in letters  of credit  outstanding.  Management  anticipates
timely renewals of the Letter of Credit facilities.

Other Debt:  Other debt of $5.5 million  carries  rates up to 10 percent at June
30, 2001.

Maturities:  Total long-term debt maturities during each of the next five fiscal
years for debt  associated  with  Agrilink  Foods are as  follows:  2002,  $15.6
million; 2003, $11.1 million; 2004, $7.5 million; 2005, $189.4 million; and 2006
$ 193.4 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 30,  2001,  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 $629.3 million and $615.5 million at June 30, 2001
and June 24, 2000, 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

Credit Agreement and Subordinated Note Agreement of AgriFrozen:  With respect to
AgriFrozen's  Credit  Facility,  AgriFrozen  was not in compliance  with certain
financial tests and ratios,  and certain  restrictions  and  limitations,  which
constituted  defaults  under the loan  agreement.  The lender to AgriFrozen  was
unwilling to commit to extend further credit to AgriFrozen.  In part, because of
these   issues  and  as  a  result  of   continued   pressure   on  the  private
label/industrial  business sectors served by AgriFrozen,  the board of directors
of  AgriFrozen  decided  in  January  2001 to  cease  operations.  Subsequently,
AgriFrozen surrendered its inventory assets to the lender.

AgriFrozen's obligations are not guaranteed by Pro-Fac or Agrilink Foods and are
expressly  non-recourse as to Pro-Fac and Agrilink  Foods. In addition,  neither
Pro-Fac  nor  Agrilink  Foods  pledged  any of their  respective  properties  as
security for AgriFrozen's  indebtedness.  As such, the current  circumstances of
AgriFrozen's  debt and liquidity  are not expected to have a material  affect on
the business of Pro-Fac or Agrilink  Foods.  In addition,  on February 15, 2001,
Pro-Fac abandoned its ownership interest in AgriFrozen

<PAGE>

and, accordingly,  eliminated all balances related to AgriFrozen, including debt
effective that date. In conjunction with this action,  Pro-Fac recognized a loss
of $1,000, which represented its investment in AgriFrozen.

NOTE 9. TAXES ON INCOME

Taxes on income before extraordinary item include the following:

(Dollars in Thousands)

                                    Fiscal Years Ended
                       ------------------------------------------------
                       June 30,2001    June 24, 2000      June 26, 1999
                       ------------    -------------      -------------
Federal -
  Current                 $ (2,563)         $(4,929)         $ 12,781
  Deferred                   3,013           12,734             8,972
                          --------          -------          --------
                               450            7,805            21,753
State and foreign -
  Current                      173             (210)            2,016
  Deferred                     345              902               977
                          --------          -------          --------
                               518              692             2,993
                          --------          -------          --------
                          $    968          $ 8,497          $ 24,746
                          ========          =======          ========

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 30      June 24,     June 26,

                                                                              2001         2000         1999
                                                                           ----------   ----------   ---------

<S>                                                                          <C>          <C>             <C>
Statutory federal rate                                                        35.0%       35.0%           35.0%
State and foreign income taxes, net of federal income tax effect             (30.6)        2.9             3.5
Allocation to members                                                          0.0        (7.0)            0.0
Goodwill amortization                                                         51.1         5.1             5.9
Dividend received deduction                                                   (2.5)       (0.2)           (0.4)
Meals and entertainment                                                       12.3         0.8             0.6
Other, net                                                                     1.4        (2.2)           (2.0)
                                                                             -----        ----            ----
Effective Tax Rate                                                            66.7%       34.4%           42.6%
                                                                             =====        ====            ====
</TABLE>
<PAGE>

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

(Dollars in Thousands)
                                                 June 30, 2001   June 24, 2000
Liabilities:
 Depreciation                                     $(42,473)        $(41,033)
 Goodwill and other intangible assets               (6,832)          (5,796)
 Prepaid manufacturing expense                      (8,724)         (10,152)
 Investment in joint venture                        (1,555)          (1,727)
 Discount on Subordinated Promissory Notes          (2,180)          (5,208)
                                                  --------         --------
                                                   (61,764)         (63,916)
                                                  --------         --------
Assets:
 Non-qualified retains                                   0              105
 Inventories                                         9,770           12,922
 Credits and operating loss carryforwards           15,026            7,820
 Insurance accruals                                  2,921            3,259
 Pension/OPEB accruals                              10,883           10,752
 Other                                               4,881           10,161
                                                  --------         --------
  Total deferred tax assets                         43,481           45,019
                                                  --------         --------
  Net deferred liabilities                        (18,283)          (18,897)
  Valuation allowance                              (5,891)           (5,752)
                                                  --------         --------
    Total                                         $(24,174)        $(24,649)
                                                  ========         ========

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

During fiscal 2001, the Cooperative recorded a valuation allowance in the amount
of $0.1  million.  The  valuation  allowance  was  established  for  foreign net
operating losses and state tax credits  generated during the fiscal year. 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  of these  credits is more  likely than not to
occur, a valuation allowance has been established.

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 10. 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.   For  purposes  of  this   disclosure,   all
defined-benefit pension plans have been combined.

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.  Contributions to these plans
are paid when incurred and billed by the sponsoring union or plan.

<PAGE>

The following table sets forth the changes in the plans' projected benefit
obligation and plan assets and the plans' funded status and amounts recognized
in the Cooperative's financial statements at June 30, 2001 and June 24, 2000.

<TABLE>
<CAPTION>
(Dollars in Thousands)
                                                                                       Pension Benefits
                                                                          ------------------------------------------
                                                                                      Fiscal Years Ended
                                                                          ------------------------------------------
                                                                          June 30,2001               June 24, 2000
                                                                          ------------               -------------
<S>                                                                        <C>                          <C>
Change in benefit obligation:
   Benefit obligation at beginning of period                               $  101,695                   $  110,833
   Service cost                                                                 4,907                        6,520
   Interest cost                                                                7,729                        7,592
   Plan participants' contributions                                               125                          160
   Plan amendments                                                                  0                        2,296
   Actuarial gain                                                              (3,122)                     (16,122)
   Benefits paid                                                               (6,317)                      (9,584)
                                                                           ----------                   ----------
     Benefit obligation at end of period                                      105,017                      101,695
                                                                           ----------                   ----------

Change in plan assets:
   Fair value of plan assets at beginning of period                           111,956                      108,183
   Actual (loss)/return on plan assets                                        (11,025)                      12,941
   Employer contribution                                                          281                          256
   Plan participants' contributions                                               125                          160
   Benefits paid                                                               (6,317)                      (9,584)
                                                                           ----------                   ----------
     Fair value of plan assets at end of period                                95,020                      111,956
                                                                           ----------                   ----------

Plan funded status                                                             (9,997)                      10,261
   Unrecognized prior service cost                                              1,987                        2,181
   Unrecognized actuarial gain                                                 (9,081)                     (29,217)
                                                                           ----------                   ----------
     Accrued benefit liability net of additional minimum pension liability $  (17,091)                  $  (16,775)
                                                                           ==========                   ==========

Amounts recognized in the statement of financial position:
   Accrued benefit liability                                               $  (17,664)                  $  (17,300)
   Accumulated other comprehensive income - minimum pension liability             573                          525
                                                                           ----------                   ----------
     Net amount recognized                                                 $  (17,091)                  $  (16,775)
                                                                           ==========                   ==========

Weighted-average assumptions:
   Discount rate                                                                  7.8%                        8.0%
   Expected return on plan assets                                                 9.5%                        9.5%
   Rate of compensation increase                                              4.5/3.0%                        4.5%

</TABLE>
Net periodic benefit cost in fiscal years 2001, 2000 and 1999 is comprised of
the following:
<TABLE>
                                                                 Pension Benefits
                                                 --------------------------------------------------
                                                                Fiscal Years Ended
                                                 --------------------------------------------------
                                                 June 30, 2001     June 24, 2000      June 26, 1999
                                                 -------------     -------------      -------------
<S>                                                  <C>              <C>               <C>
Components of net periodic benefit cost:
   Service cost                                      $ 4,907          $  6,520          $ 4,727
   Interest cost                                       7,729             7,592            6,953
   Expected return on plan assets                    (10,424)          (10,604)         (10,528)
   Amortization of prior service cost                    193               (16)             (15)
   Amortization of gain                               (1,810)              (51)            (741)
                                                     -------          --------          -------
Net periodic benefit cost - Cooperative plans            595             3,441              396
Net periodic benefit cost - union plans                  819               762              876
                                                     -------          --------          -------
Total periodic benefit cost                          $ 1,414          $  4,203          $ 1,272
                                                     =======          ========          =======

</TABLE>
<PAGE>

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. In December 2000, the Cooperative  adopted an
additional  SERP  to  provide  additional  retirements  benefits  to  a  current
executive officer of the Cooperative.

The  Cooperative  maintains an Excess  Benefit  Retirement  Plan which serves to
provide employees with the same retirement benefit they would have received from
the Cooperative's retirement plan under the career average base pay formula, but
for  changes  required  under  the  1986  Tax  Reform  Act and the  compensation
limitation  under Section  401(a)(17)  of the Internal  Revenue Code having been
revised in the 1992 Omnibus  Budget Reform Act. This benefit plan was amended in
December 2000.

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

<TABLE>
(Dollars in Thousands)
<CAPTION>

                                  Master Salaried        Excess Benefit    Supplemental Executive    Supplemental Executive
                                  Retirement Plan       Retirement Plan     Retirement Plan No.1    Retirement Agreement No.2
                                 Fiscal Years Ended    Fiscal Years Ended    Fiscal Years Ended         Fiscal Years Ended
                                -------------------    ------------------  ----------------------   -------------------------
                                6/30/01     6/24/00    6/30/01  6/24/00    6/30/01       6/24/00        6/30/01      6/24/00
                                --------    -------    -------  -------    ------        -------        -------      -------

<S>                             <C>                    <C>      <C>        <C>           <C>             <C>           <C>
Projected benefit obligation    $38,234       N/A      $1,089   $1,159     $1,716        $1,729          $353          N/A
Accumulated benefit obligation   32,527       N/A         879      834      1,716         1,729           353          N/A
Plan assets                      30,299       N/A           0        0         0              0             0          N/A
</TABLE>

Postretirement  Benefits Other Than Pensions:  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.  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.

<PAGE>

The  following  table sets forth the  changes  in the plans'  projected  benefit
obligation  and plan assets and the plans' funded status and amounts  recognized
in the Cooperative's financial statements at June 30, 2001 and June 24, 2000.

<TABLE>
<CAPTION>
(Dollars in Thousands)
                                                                                Other Benefits
                                                                   ----------------------------------------
                                                                              Fiscal Years Ended
                                                                   ----------------------------------------
                                                                   June 30, 2001              June 24, 2000
                                                                   -------------              -------------
<S>                                                                <C>                          <C>
Change in benefit obligation:
   Benefit obligation at beginning of period                       $    5,658                   $    6,507
   Service cost                                                           170                          184
   Interest cost                                                          429                          433
   Decrease due to sale                                                     0                         (295)
   Plan amendments                                                       (891)                           0
   Actuarial loss/(gain)                                                1,578                         (715)
   Benefits paid                                                         (611)                        (456)
                                                                   ----------                   ----------
     Benefit obligation at end of period                                6,333                        5,658
                                                                   ----------                   ----------
Change in plan assets:
   Fair value of assets at beginning of period                              0                            0
   Employer contribution                                                  611                          456
   Benefits paid                                                         (611)                        (456)
                                                                   ----------                   ----------
     Fair value of assets at end of period                                  0                            0
                                                                   ----------                   ----------

Plan funded status                                                     (6,333)                      (5,658)
   Unrecognized prior service cost                                       (892)                           0
   Unrecognized actuarial loss                                          2,276                          717
                                                                   ----------                   ----------
     Accrued benefit liability                                         (4,949)                      (4,941)
Amounts recognized in the statement of financial position:
   Accrued benefit liability                                       $   (4,949)                  $   (4,941)
                                                                   ==========                   ==========

Weighted-average assumptions:
   Discount rate                                                          7.8%                         8.0%
   Expected return on plan assets                                          N/A                          N/A
   Rate of compensation increase                                          3.0%                         4.5%
</TABLE>

<TABLE>
                                                                   Other Benefits
                                                  -----------------------------------------------------
                                                  June 30, 2001     June 24, 2000     June 26, 1999
                                                  -------------     -------------     -------------
<S>                                                 <C>                <C>              <C>
Components of net periodic benefit cost:
   Service cost                                     $     170          $    184         $      90
   Interest cost                                          429               433               250
   Amortization of loss                                    20               159                 0
                                                    ---------          --------         ---------
   Net periodic benefit cost                        $     619          $    776         $     340
                                                    =========          ========         =========
</TABLE>
For measurement purposes, an 8.0 percent rate of increase in the per capita cost
of covered  health  care  benefits  was assumed  for fiscal  2001.  The rate was
assumed to decrease  gradually  to 5.0 percent for 2007 and remain at that level
thereafter.

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

                                                                       1-Percentage         1-Percentage
                                                                       Point Increase      Point Decrease

<S>                                                                       <C>                 <C>
Effect on total of service and interest cost components for fiscal 2001   $   58              $   (51)
Effect on postretirement benefit obligation at June 30, 2001              $  432              $  (379)

Agrilink Foods 401(k) Plan: Under the Agrilink Foods 401(k) Plan ("401(k)"),
Agrilink Foods contributes matching contributions to the plan for the benefit of
employees who elect to defer a portion of their salary into the plan. During
fiscal 2001, 2000, and 1999,
</TABLE>

<PAGE>
Agrilink Foods  allocated  approximately  $1.2 million,  $1.1 million,  and $0.9
million, respectively, in the form of matching contributions to the plan.

In addition, Agrilink Foods also maintains a Non- Qualified 401(k) Plan in which
Agrilink  Foods  allocates  matching  contributions  for the  benefit of "highly
compensated  employees" as defined under Section 414(q) of the Internal  Revenue
Code. During fiscal 2001, 2000, and 1999, Agrilink Foods allocated $0.3 million,
$0.2  million,   and  $0.2  million,   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 Agrilink Foods' 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 2001 and 2000, the final value of the performance  units is
discretionary.  Units  granted  in 2001 and 2000 vest 100  percent on the fourth
anniversary of grant.  The total units granted in 2001 and 2000 were 400,000 and
371,806, respectively.

Units forfeited since the inception of the plan include 4,474 at $17.67;  13,205
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.

Nothing has been charged to income under these plans.

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 2001, 2000, and
1999, 23,923, 23,664, and 26,061 shares,  respectively,  were held by employees,
and there were no shares subscribed to as of June 30, 2001.

NOTE 11. OPERATING SEGMENTS

The Cooperative  accounts for segments using  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!,  Birds Eye  Simply  Grillin'
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>

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

<TABLE>
(Dollars in Millions)                                                                            Fiscal Years Ended
                                                                                 --------------------------------------------------
                                                                                 June 30, 2001      June 24, 2000     June 26, 1999
                                                                                 -------------      -------------     -------------
<S>                                                                                <C>                <C>              <C>
Net Sales:
   Vegetables                                                                      $    970.2         $    836.7       $   769.5
   Fruits                                                                               120.4              114.4           115.8
   Snacks                                                                                97.9               90.9            91.4
   Canned Meals                                                                          64.2               62.3            66.4
   Other                                                                                 50.6               56.0            74.8
                                                                                   ----------         ----------       ---------
     Continuing segments                                                              1,303.3            1,160.3         1,117.9
   Businesses sold or closed1                                                            35.9              146.4           174.1
                                                                                   ----------         ----------       ---------
         Total                                                                     $  1,339.2         $  1,306.7       $ 1,292.0
                                                                                   ==========         ==========       =========

Operating income:
   Vegetables2                                                                     $     55.7         $     65.4       $    43.9
   Fruits                                                                                11.4               13.9             8.4
   Snacks                                                                                 5.6                6.7             3.3
   Canned Meals                                                                           6.6                6.7             6.5
   Other                                                                                  1.9                4.6             3.7
                                                                                   ----------         ----------       ---------
     Continuing segments operating income                                                81.2               97.3            65.8
   Businesses sold or closed1                                                             5.3                4.2             7.2
                                                                                   ----------         ----------       ---------
         Total                                                                           86.5              101.5            73.0
Gains on sales of assets                                                                  0.0                6.7            64.7
Restructuring expense                                                                     0.0                0.0            (5.0)
                                                                                   ----------         ----------       ---------
Total consolidated operating income                                                      86.5              108.2           132.7
Interest expense                                                                        (85.1)             (83.5)          (67.4)
Amortization of debt issue costs associated with the Bridge Facility                      0.0                0.0            (5.5)
                                                                                   ----------         ----------       ---------
Pretax income before extraordinary item, dividends and allocation of net proceeds  $      1.4         $     24.7       $    59.8
                                                                                   ==========         ==========       =========
Total Assets:
   Vegetables                                                                     $     839.8         $    867.1       $   880.8
   Fruits                                                                                71.9               79.4            90.2
   Snacks                                                                                47.0               43.5            40.9
   Canned Meals                                                                          45.3               45.7            46.2
   Other                                                                                 57.2               52.2            43.1
                                                                                  -----------         ----------       ---------
     Continuing segments                                                              1,061.2            1,087.9         1,101.2
   Businesses sold or closed1                                                             0.0               99.1            94.4
   Assets held for sale                                                                   0.1                0.3             0.9
                                                                                  -----------         ----------       ---------
       Total                                                                      $   1,061.3         $  1,187.3       $ 1,196.5
                                                                                  ===========         ==========       =========

Depreciation expense:
   Vegetables                                                                     $      22.4         $     22.3       $    16.7
   Fruits                                                                                 2.6                1.7             2.3
   Snacks                                                                                 3.1                2.4             1.7
   Canned Meals                                                                           0.9                1.2             1.2
   Other                                                                                  1.7                1.2             1.0
                                                                                  -----------         ----------       ---------
     Continuing segments                                                                 30.7               28.8            22.9
   Businesses sold or closed1                                                             1.2                3.8             1.9
                                                                                  -----------         ----------       ---------
     Total                                                                         $     31.9         $     32.6       $    24.8
                                                                                   ==========         ==========       =========

Amortization Expense:
   Vegetables                                                                     $       7.8         $      6.1       $     5.4
   Fruits                                                                                 0.1                0.1             0.1
   Snacks                                                                                 0.6                0.8             0.9
   Canned meals                                                                           0.7                0.7             0.7
   Other                                                                                  0.7                0.7             0.6
                                                                                  -----------         ----------       ---------
     Continuing segments                                                                  9.9                8.4             7.7
   Businesses sold or closed1                                                             0.0                0.4             1.7
                                                                                  -----------         ----------       ---------
       Total                                                                      $       9.9         $      8.8       $     9.4
                                                                                  ===========         ==========       =========
</TABLE>


<PAGE>



(Dollars in Millions)                           Fiscal Years Ended
                                 -------------------------------------------
                                 June 30, 2001  June 24, 2000  June 26, 1999
                                 -------------  -------------  -------------
Capital expenditures:
   Vegetables                     $   14.8       $    19.8    $    17.8
   Fruits                              2.7             1.6          1.3
   Snacks                              4.4             2.3          2.0
   Canned Meals                        2.5             1.1          0.6
   Other                               0.7             0.2          0.3
                                  --------      ----------    ---------
     Continuing Segments              25.1            25.0         22.0
   Businesses sold or closed1          1.1             2.0          1.8
                                  --------      ----------    ---------
       Total                      $   26.2      $     27.0    $    23.8
                                  ========      ==========    =========

1    Includes   activities  of  businesses   sold  or  no  longer  part  of  the
     Cooperative.   See  NOTE  3  in  the  "Notes  to   Consolidated   Financial
     Statements."

2    The vegetable  product line includes  earnings derived from Agrilink Foods'
     investment in Great Lakes Kraut Company, LLC of $1.8 million, $2.4 million,
     and $2.8 million in fiscal 2001, 2000, and fiscal 1999,  respectively.  See
     NOTE 5 to the "Notes to Consolidated Financial Statements" - "Investment in
     Joint Venture."

NOTE 12. COMMON STOCK AND CAPITALIZATION

The following table illustrates the Cooperative's shares authorized, issued, and
outstanding at June 30, 2001 and June 24, 2000.


<TABLE>
                                                                                        Shares Issued and Outstanding
                                                                                              Fiscal Years Ended
                                                      Par              Shares         --------------------------------
                                                     Value           Authorized       June 30, 2001      June 24, 2000
                                                     -----           ----------       -------------      -------------

<S>                                                  <C>               <C>               <C>               <C>
Class A Common Stock                                 $ 5.00            5,000,000         2,257,479         2,132,981
Class B Common Stock                                 $ 5.00            1,600,000           723,229           723,229
Non-Cumulative Preferred Stock                       $25.00            5,000,000            32,308            34,400
Class A Cumulative Preferred Stock                   $ 1.00           10,000,000         4,495,443         4,249,007
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            23,923            23,664
</TABLE>

On March 4,  1999,  the  Cooperative  authorized  up to  $15,000,000  of special
membership  interests  which shall have a stated value in  liquidation  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 30, 2001, there were 604 holders of the Class A Common.
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 2001,  2000, and 1999 dividends on Class A Common Stock were paid at a
rate of 5.0 percent.  Subsequent to June 30, 2001,  the  Cooperative  declared a
cash  dividend  at a rate of 5.0  percent  on the  Class A Common  Stock.  These
dividends amounted $0.6 million and were paid in July 2001.

At June 30, 2001 and June 24, 2000, there were outstanding subscriptions, at par
value,  of 97,243 and  233,977  shares for Class A Common  Stock,  respectively.
These shares are issued as subscription payments are received.

As of June 30, 2001, the Cooperative had 153 holders of Class B common stock. No
dividends  were paid on the Class B common stock,  and there were no outstanding
subscriptions.

<PAGE>

On July 19,  2001,  Pro-Fac  repurchased  its Class B common  stock and  special
membership  interests.  These  securities were held by the former Agripac,  Inc.
members  who  subscribed  to become  grower/members  for Pro-Fac  supplying  raw
product to the AgriFrozen Foods processing facilities.

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 A Cumulative Preferred Stock is listed under the
symbol PFACP on the Nasdaq  National  Market  system.  As of June 30, 2001,  the
number of Class A Cumulative Preferred Stock record holders was 1,816.

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.

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

<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 30, 2001, 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 $2.0 million and were
paid in July 2001.

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,  retains  maturing  into  preferred
stock, as determined by the Board of Directors, will mature in shares 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 13. 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  Credit
Facility. The covenants in the Notes and the Credit Facility do not restrict the
ability of the  Subsidiary  Guarantors  to make cash  distributions  to Agrilink
Foods.

<PAGE>

Presented  below  is  condensed  consolidating  financial  information  for  (i)
Agrilink  Foods;  (ii)  the  Guarantor  Subsidiaries;  (iii)  the  Non-Guarantor
Subsidiaries;  and (iv) Pro-Fac  Cooperative as of June 30, 2001,  June 24, 2000
and for the fiscal years ended June 30, 2001,  June 24, 2000, and June 26, 1999.
The condensed consolidating financial information has been presented to show the
nature of assets held,  results of operations  and cash flows of the Company and
Guarantor  Subsidiaries in accordance with SEC Financial  Reporting  Release No.
55.
<TABLE>
                                                                                 Balance Sheet
                                                                                 June 30, 2001
                                               ------------------------------------------------------------------------------------
                                                  Pro-Fac      Agrilink     Guarantor     Non-Guarantor  Eliminating
                                                Cooperative   Foods, Inc.  Subsidiaries   Subsidiaries     Entries    Consolidated
                                               -------------  -----------  -------------  -------------  -----------  -------------


<CAPTION>
(Dollars in Thousands)

<S>                                              <C>           <C>           <C>          <C>         <C>            <C>
Assets
   Current assets:

     Cash and cash equivalents                   $        0    $    7,624    $      21    $     11    $        0     $    7,656
     Accounts receivable, net                             0        90,600        2,892           0             0         93,492
     Inventories -
       Finished goods                                     0       279,320          422         249             0        279,991
       Raw materials and supplies                         0        33,287          417         161             0         33,865
                                                 ----------    ----------    ---------    --------    ----------     ----------
         Total inventories                                0       312,607          839         410             0        313,856

     Other current assets                               421        52,729       (4,190)        208             0         49,168
                                                 ----------    ----------    ---------    --------    ----------     ----------

         Total current assets                           421       463,560         (438)        629             0        464,172

   Property, plant and equipment, net                     0       297,345        4,531       3,655             0        305,531
   Investment in subsidiaries                       180,332       308,207            0           0      (488,539)             0
   Goodwill and other intangible assets, net              0        53,552      195,225           0             0        248,777
   Other assets                                          59        51,996      110,326           0      (119,510)        42,871
                                                 ----------    ----------    ---------    --------    ----------     ----------

         Total assets                            $  180,812    $1,174,660    $ 309,644    $  4,284    $ (608,049)    $1,061,351
                                                 ==========    ==========    =========    ========    ==========     ==========

   Liabilities and Shareholder's Equity
   Current liabilities:
     Current portion of long-term debt           $        0    $   15,599    $       0    $      0    $        0     $   15,599
     Accounts payable                                    80       115,493        1,930         428             0        117,931
     Accrued interest                                     0         9,253            0           0             0          9,253
     Intercompany loans                                   0        (1,697)       1,859        (162)            0              0
     Other current liabilities                       18,017        58,078          968         698             0         77,761
                                                 ----------    ----------    ---------    --------    ----------     ----------
       Total current liabilities                     18,097       196,726        4,757         964             0        220,544
   Long-term debt                                         0       631,128            0           0             0        631,128
   Other non-current liabilities                      9,400       166,474            0           0      (119,510)        56,364
                                                 ----------    ----------    ---------    --------    ----------     ----------

     Total liabilities                               27,497       994,328        4,757         964      (119,510)       908,036

   Class B cumulative redeemable preferred stock        239             0            0           0             0            239
   Class A common stock                              11,287             0            0           0             0         11,287

   Shareholder's equity                             141,789       180,332      304,887       3,320      (488,539)       141,789
                                                  ---------    ----------    ----------   ---------    ----------    ----------

     Total liabilities and shareholders' equity   $ 180,812    $1,174,660    $ 309,644    $  4,284     $ (608,049)   $1,061,351
                                                  =========    ==========    =========    ========     ==========    ==========
</TABLE>




<PAGE>
<TABLE>
                                                                                 Balance Sheet
                                                                                 June 24, 2000
                                                  ---------------------------------------------------------------------------------
                                                    Pro-Fac      Agrilink      Guarantor  Non-Guarantor   Eliminating
                                                   Cooperative  Foods, Inc.  Subsidiaries  Subsidiaries     Entries    Consolidated
                                                  ------------- -----------  ------------- -------------  -----------  ------------
<CAPTION>
(Dollars in Thousands)
<S>                                                 <C>           <C>          <C>          <C>          <C>            <C>
Assets
Current assets:
   Cash and cash equivalents                        $      0      $    4,785   $     209    $        0   $        0     $    4,994
   Accounts receivable, net                                0         103,206       2,148        16,544      (10,345)       111,553
   Inventories -
     Finished goods                                        0         249,806         306        40,083            0        290,195
     Raw materials and supplies                            0          44,613         572         6,551            0         51,736
                                                    --------      ----------   ---------    ----------   ----------     ----------
         Total inventories                                 0         294,419         878        46,634            0        341,931

     Other current assets                              2,643          60,789          23         7,569            0         71,024
                                                    --------      ----------   ---------    ----------   ----------     ----------

       Total current assets                            2,643         463,199       3,258        70,747      (10,345)       529,502

   Property, plant and equipment, net                      0         316,098       1,896        30,365            0        348,359
   Goodwill and other intangible assets, net               0          49,434     209,111             0            0        258,545
   Investment in subsidiaries                        179,178         290,009           0             0     (469,187)             0
   Other assets                                           59          55,791      82,670         8,349      (96,009)        50,860
                                                    --------      ----------   ---------    ----------   ----------     ----------

       Total assets                                 $181,880      $1,174,531   $ 296,935    $  109,461   $ (575,541)    $1,187,266
                                                    ========      ==========   =========    ==========   ==========     ==========

Liabilities and Shareholder's Equity
Current liabilities:
   Notes payable                                    $      0      $    5,700   $       0    $   44,100   $        0     $   49,800
   Current portion of long-term debt                       0          16,583           0             0            0         16,583
   Accounts payable                                       44          93,403       1,668        10,941      (14,384)        91,672
   Accrued interest                                        0          11,398           0             0            0         11,398
   Intercompany loans                                      0             (75)         75             0            0              0
   Other current liabilities                          12,593          78,428       5,183         3,364            0         99,568
                                                    --------      ----------   ---------    ----------   ----------     ----------
       Total current liabilities                      12,637         205,437       6,926        58,405      (14,384)       269,021

   Long-term debt                                          0         644,712           0        34,493            0        679,205
   Other non-current liabilities                       9,400         145,204           0        16,563      (91,970)        79,197
                                                    --------      ----------   ---------    ----------   ----------     ----------
                                                      22,037         995,353       6,926       109,461     (106,354)     1,027,423

   Class B cumulative redeemable preferred stock         237               0           0             0            0            237
   Class A common stock                               10,665               0           0             0            0         10,665

   Total Shareholders' equity                        148,941         179,178     290,009             0     (469,187)       148,941
                                                    --------       ---------    ---------    ---------    ----------    ----------

       Total liabilities and shareholder's equity   $181,880      $1,174,531   $ 296,935    $  109,461    $(575,541)    $1,187,266
                                                    ========      ==========   =========    ==========    =========     ==========

</TABLE>
<PAGE>
<TABLE>

                                                                               Income Statement
                                                                        Fiscal Year Ended June 30, 2001
                                                  ----------------------------------------------------------------------------------
                                                    Pro-Fac     Agrilink     Guarantor    Non-Guarantor  Eliminating
                                                   Cooperative  Foods, Inc.  Subsidiaries  Subsidiaries     Entries    Consolidated
                                                  ------------- -----------  ------------- -------------  -----------  -------------
<CAPTION>
(Dollars in Thousands)

<S>                                                <C>          <C>            <C>           <C>          <C>            <C>
Net sales                                          $       0    $1,284,835     $  18,476     $ 78,842     $ (42,942)     $1,339,211
Cost of sales                                              0      (918,055)      (10,751)     (79,264)       51,888        (956,182)
                                                   ---------    ----------     ---------     --------     ---------      ----------
Gross profit                                               0       366,780         7,725         (422)        8,946         383,029
Other income                                                             0        57,563          627       (58,190)              0
Selling, administrative, and general expenses              0      (339,643)      (12,966)      (3,226)       57,563        (298,283)
Income from joint venture                                (11)        1,779             0            0             0           1,779
                                                   ---------    ----------     ---------     --------     ---------      -----------
Operating (loss)/income before dividing with Pro-Fac     (11)       28,916        52,322       (3,021)        8,319          86,525
Interest (expense)/income                                  0       (89,812)       10,037       (5,207)          (91)        (85,073)
                                                   ---------    ----------     ---------     --------     ---------      -----------
Pretax (loss)/income before dividing with Pro-Fac        (11)      (60,896)       62,359       (8,228)        8,228           1,452
Pro-Fac share of income                                  732          (732)            0            0             0               0
                                                   ---------    ----------     ---------     ---------    ---------      -----------
Income/(loss) before taxes                               721        (61,628)      62,359        8,228)        8,228           1,452
Tax (provision)/benefit                                 (308)        22,178      (22,163)        (675)            0            (968)
                                                   ---------    -----------    ---------     --------     ---------      ----------
Net income/(loss)                                  $     413    $   (39,450)   $  40,196     $ (8,903)    $   8,228      $      484
                                                   =========    ==========     =========     ========     =========      ===========
</TABLE>

<TABLE>

                                                                               Income Statement
                                                                        Fiscal Year Ended June 24, 2000
                                                  ---------------------------------------------------------------------------------
                                                    Pro-Fac     Agrilink     Guarantor    Non-Guarantor  Eliminating
                                                   Cooperative  Foods, Inc.  Subsidiaries  Subsidiaries     Entries    Consolidated
                                                  ------------- -----------  ------------- -------------  -----------  ------------
(Dollars in Thousands)

<S>                                                <C>          <C>            <C>           <C>          <C>            <C>
Net sales                                          $       0    $ 1,217,110    $  15,152     $111,935     $ (37,538)     $1,306,659
Cost of sales                                              0        (848,814)     (8,505)     (99,248)       37,538        (919,029)
                                                   ---------    ------------   -----------   --------     ---------      -----------
Gross profit                                               0         368,296       6,647       12,687             0         387,630
Other income                                               5               0      59,461            0       (59,466)              0
Selling, administrative and general expenses               0        (329,139)    (11,608)      (7,230)       59,466        (288,511)
Gain on sale of assets                                     0           6,635           0            0             0           6,635
Income from joint venture                                  0           2,418           0            0             0           2,418
                                                   ---------     -----------   ----------    --------     ---------      ----------
Operating income before dividing with Pro-Fac              5          48,210   $  54,500        5,457             0         108,172
Interest (expense)/income                                  0         (82,897)      4,843       (5,457)            0         (83,511)
                                                   ---------     -----------   ----------     -------     ---------      ----------
Pretax income/(loss) before dividing with Pro-Fac          5         (34,687)     59,343            0             0          24,661
Pro-Fac share of income/(loss)                        12,328         (12,328)          0            0             0               0
                                                   ---------     -----------   ----------     -------     ---------      ----------
Income/(loss) before taxes                            12,333         (47,015      59,343            0             0          24,661
Tax (provision)/benefit                               (2,593)         14,867     (20,771)           0             0          (8,497)
                                                   ---------     -----------   ---------      -------     ---------      ----------
Net income/(loss)                                  $   9,740     $  (32,148)   $  38,572      $     0     $       0      $   16,164
                                                   =========     ==========    =========      =======     =========      ==========
</TABLE>
<PAGE>
<TABLE>
                                                                               Income Statement
                                                                        Fiscal Year Ended June 26, 1999
                                                  ---------------------------------------------------------------------------------
                                                    Pro-Fac     Agrilink      Guarantor    Non-Guarantor  Eliminating
                                                   Cooperative  Foods, Inc.  Subsidiaries  Subsidiaries     Entries    Consolidated
                                                  ------------- -----------  ------------- -------------  -----------  ------------
<CAPTION>
(Dollars in Thousands)

<S>                                                <C>          <C>           <C>            <C>           <C>           <C>
Net sales                                          $       0    $1,248,854    $   13,026     $ 41,294      $(11,153)     $1,292,021
Cost of sales                                              0      (896,613)       (7,278)     (35,523)       11,152        (928,262)
                                                   ---------    -----------   ----------     --------      ----------    ----------
Gross profit                                               0       352,241         5,748        5,771            (1)        363,759
Other income                                               0             0        20,240            0       (20,240)              0
Selling, administrative and general expenses             (34)     (304,321)       (5,842)      (3,690)       20,241        (293,646)
Gain on sale of assets                                     0        64,734             0            0             0          64,734
Restructuring                                              0        (5,000)            0            0             0          (5,000)
Income from joint venture                                  0         2,787             0            0             0           2,787
                                                   ---------    ----------    ----------     --------     ----------     ----------
Operating income before dividing with Pro-Fac            (34)      110,441        20,146        2,081             0         132,634
Interest (expense)/income                                  0       (65,677)          338       (2,081)            0         (67,420)
Amortization of debt issue costs associated
    with bridge facility                                   0        (5,500)            0            0             0          (5,500)
                                                   ---------    ----------    ----------     --------      ----------    ----------
Pretax (loss)/income before dividing with Pro-Fac        (34)       39,264        20,484            0             0          59,714
Pro-Fac share of income                                1,658        (1,658)            0            0             0               0
                                                   ---------    ----------    ----------     --------       ---------    ----------
Income before taxes and extraordinary item             1,624        37,606        20,484            0             0          59,714
Tax benefit/(provision)                                   24       (17,601)       (7,169)           0             0         (24,746)
                                                   ---------    ----------    ----------     --------        ----------  ----------
Income before extraordinary item                       1,648        20,005        13,315            0             0          34,968
Extraordinary item related to early
   extinguishment of debt (net of tax)                (1,658)      (16,366)            0            0             0         (18,024)
                                                   ---------    ----------    ----------     --------       ----------   ----------
Net (loss)/income                                  $     (10)   $    3,639    $   13,315     $      0    $        0      $   16,944
                                                   =========    ==========    ==========     ========      ==========    ==========
</TABLE>
<PAGE>
<TABLE>

                                                                              Statement of Cash Flows
                                                                         Fiscal Year Ended June 30, 2001
                                                       ----------------------------------------------------------------------------
                                                        Pro-Fac    Agrilink      Guarantor   Non-Guarantor Eliminating
                                                       Cooperative Foods, Inc.  Subsidiaries  Subsidiaries   Entries   Consolidated
                                                       ----------- -----------  ------------ ------------- ----------  ------------

<CAPTION>
(Dollars in Thousands)

<S>                                                     <C>         <C>           <C>          <C>            <C>         <C>
Net income/(loss)                                       $    413    $ (39,450)    $ 40,196     $ (8,903)      $  8,228    $    484
Adjustments to reconcile net income/(loss) to net
  cash (used in)/provided by operating activities -
    Amortization of goodwill and other intangible assets       0        2,803        7,057            0              0       9,860
    Amortization of debt issue costs and amendment costs
      and discount on subordinated promissory note             0        4,895            0          322              0       5,217
    Interest in-kind on subordinated promissory note           0        2,069            0            0              0       2,069
    Depreciation                                               0       29,831          572        1,508              0      31,911
    Equity in undistributed earnings of CoBank                 0          (97)           0            0              0         (97)
    Equity in undistributed earnings in joint venture          0       (1,243)           0            0              0      (1,243)
    Provision for deferred taxes                            (106)       3,464            0            0              0       3,358
    Provision for losses on accounts receivable                0          560           50            0              0         610
    Change in assets and liabilities:
      Accounts receivable                                      0       12,022         (794)      10,690        (10,345)     11,573
      Inventories                                              0      (18,933)          39       (4,005)             0     (22,899)
      Other assets                                         1,709       27,769      (61,456)       2,356        (27,027)    (56,649)
      Accounts payable and accrued interest                   36      (20,213)        (262)     (13,147)        14,384     (19,202)
      Other liabilities                                    5,532       36,394       17,437       10,572         15,273      85,208
                                                        ----------  ---------     --------     --------       --------    --------
Net cash provided by/(used in) operating activities        7,584       39,871        2,839         (607)           513      50,200

Cash flows from investing activities:
  Purchase of property, plant, and equipment                   0      (21,638)      (3,027)      (1,505)             0     (26,170)
  Proceeds from disposals                                      0        5,797            0           23              0       5,820
  Proceeds from investment in CoBank                           0        4,259            0            0              0       4,259
                                                        ---------    --------     --------     --------       --------    --------
Net cash used in investing activities                          0      (11,582)      (3,027)      (1,482)             0     (16,091)

Cash flows from financing activities:
  Net (payments on)/proceeds from short-term debt              0       (5,700)           0        2,100              0      (3,600)
  Payments on long-term debt                                   0      (18,084)           0            0              0     (18,084)
  Payments on capital leases                                   0         (449)           0            0              0        (449)
  Issuance of stock, net of repurchases                      622            0            0            0              0         622
  Cash portion of non-qualified conversion                   (83)           0            0            0              0         (83)
  Cash dividends paid                                     (8,123)           0            0            0              0      (8,123)
  Cash paid for debt issuance costs and amendments             0       (1,730)           0            0              0      (1,730)
  Capital contributions by Pro-Fac                             0          513            0            0           (513)          0
                                                        --------    ---------     --------     --------       --------    --------
Net cash (used in)/provided by financing activities       (7,584)     (25,450)           0        2,100           (513)    (31,447)
                                                        --------   ----------     --------     --------       --------    --------

Net change in cash and cash equivalents                        0        2,839         (188)          11              0        2,662
Cash and cash equivalents at beginning of period               0        4,785          209            0              0        4,994
                                                        --------    ---------     --------     --------       --------    ---------
Cash and cash equivalents at end of period              $      0    $   7,624     $     21     $     11       $      0    $   7,656
                                                        ========    =========     ========     ========       ========    =========
</TABLE>



<PAGE>
<TABLE>
                                                                           Statement of Cash Flows
                                                                        Fiscal Year Ended June 24, 2000
                                                       ----------------------------------------------------------------------------
                                                        Pro-Fac    Agrilink      Guarantor   Non-Guarantor Eliminating
                                                       Cooperative Foods, Inc.  Subsidiaries  Subsidiaries   Entries   Consolidated
                                                       ----------- -----------  ------------ ------------- ----------  ------------

<CAPTION>
 (Dollars in Thousands)

<S>                                                      <C>        <C>          <C>          <C>           <C>           <C>
Net income/(loss)                                        $  9,740   $(32,148)    $  38,572    $        0    $      0      $ 16,164
Estimated cash payments to Class A members                 (1,477)         0             0             0           0        (1,477)
Adjustments to reconcile net income/(loss) to net
   cash provided by/ (used in) operating activities -
     Gain on sale of assets                                     0     (6,635)            0             0           0        (6,635)
     Amortization of goodwill and other intangible assets       0      1,711         7,057             0           0         8,768
     Amortization of debt issue costs and amendment costs and
       discount on subordinated promissory note                 0      4,318             0           487           0         4,805
     Interest in-kind on subordinated promissory note           0      1,571             0             0           0         1,571
     Depreciation                                               0     29,983           330         2,292           0        32,605
     Equity in undistributed earnings of CoBank                 0       (102)            0          (310)          0          (412)
     Equity in undistributed earnings of joint venture          0        (96)            0             0           0           (96)
     Provision for deferred taxes                           4,636      9,000             0             0           0        13,636
     Provision for losses on accounts receivable                0        191            10             0           0           201
     Change in assets and liabilities:
       Accounts receivable                                      0    (14,356)         (920)          754       3,530       (10,992)
       Inventories                                              0    (49,291)         (432)       (9,142)          0       (58,865)
       Other assets                                          (113)     1,571      (112,566)        1,834      86,609       (20,545)
       Accounts payable and accrued interest                 (932)    (2,991)          369           127      (3,530)       (6,957)
       Other liabilities                                   (4,661)    38,626        68,522        (2,586)    (77,977)       19,804
                                                         --------   --------     ---------    ----------    --------      --------

Net cash provided by/(used in) operating activities         7,193    (18,648)          942        (6,544)      8,632        (8,425)

Cash flows from investing activities:
   Purchase of property, plant, and equipment                   0    (24,608)         (820)       (1,555)          0       (26,983)
   Proceeds from disposals                                      0     64,360             0             0           0        64,360
   Proceeds from investment in CoBank                           0      3,378             0             0           0         3,378
   Cash paid for acquisitions                                   0       (250)            0             0           0          (250)
                                                         --------   --------     ---------    ----------    --------      --------
Net cash provided by/(used in) investing activities             0     42,880          (820)       (1,555)          0        40,505

Cash flows from financing activities:
   Net (payments on)/proceeds from short-term debt              0    (13,200)            0         8,100           0        (5,100)
   Payments on long-term debt                                   0    (18,470)            0             0           0       (18,470)
   Payments on capital leases                                   0       (238)            0            (1)          0          (239)
   Issuance of stock, net of repurchases                      662          0             0             0           0           662
   Cash portion of non-qualified conversion                  (445)         0             0             0           0          (445)
   Cash dividends paid                                     (7,410)         0             0             0           0        (7,410)
   Cash paid for debt issuance costs and amendments             0     (2,624)            0             0           0        (2,624)
   Capital contributions by Pro-Fac                             0      8,632             0             0      (8,632)            0
                                                         --------   --------     ---------    ----------    --------      --------
Net cash used in financing activities                      (7,193)   (25,900)            0         8,099      (8,632)      (33,626)
                                                         --------   --------     ---------    ----------    --------      --------
Net change in cash and cash equivalents                         0     (1,668)          122             0           0        (1,546)
Cash and cash equivalents at beginning of period                0      6,453            87             0           0         6,540
                                                         --------   --------     ---------    ----------    --------      ---------
Cash and cash equivalents at end of period               $      0   $  4,785     $     209    $        0    $      0      $  4,994
                                                         ========   ========     =========    ==========    ========      ========
</TABLE>
<PAGE>
<TABLE>

                                                                             Statement of Cash Flows
                                                                        Fiscal Year Ended June 26, 1999
                                                      ----------------------------------------------------------------------------
                                                         Pro-Fac    Agrilink     Guarantor  Non-Guarantor Eliminating
                                                       Cooperative Foods, Inc. Subsidiaries  Subsidiaries   Entries   Consolidated
                                                       ----------- ----------- ------------ ------------- ----------- ------------
<CAPTION>
(Dollars in Thousands)

<S>                                                    <C>         <C>           <C>           <C>          <C>         <C>
Net (loss)/income                                      $    (10)   $   3,639     $ 13,315      $       0    $      0    $   16,944
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 tax)                1,658       16,366            0              0           0        18,024
     Gain on sales of assets                                  0      (64,734)           0              0           0       (64,734)
     Loss from disposal of asset held for resale              0          353            0              0           0           353
     Amortization of goodwill and other intangibles           0        6,915        2,481              0           0         9,396
     Amortization of debt issue costs and amendment
       costs and discount on subordinated promissory note     0        7,678            0              0           0         7,678
     Interest in-kind on subordinated promissory note         0          782            0              0           0           782
     Depreciation                                             0       23,498          306            948           0        24,752
     Equity in undistributed earnings of CoBank               0         (520)           0              0           0          (520)
     Equity in undistributed earnings of joint venture        0          (95)           0              0           0           (95)
     Provision for deferred taxes                           207        9,742            0              0           0         9,949
     Provision for losses on accounts receivable              0          198           10              0           0           208
     Change in assets and liabilities:
       Accounts receivable                                    0       (2,296)         248         (4,735)      6,815            32
       Inventories                                            0       33,152           26         (1,563)          0        31,615
       Other assets                                      (2,322)     (49,958)      (1,957)       (15,095)     (7,500)      (76,832)
       Accounts payable and accrued interest                 10       27,550          325         17,629      (6,815)       38,699
       Other liabilities                                  6,497      (24,381)     (14,552)        (1,102)          0       (33,538)
                                                       --------    ---------     --------      ---------    --------    ----------

Net cash (used in)/provided by operating activities       6,040      (12,111)         202         (3,918)     (7,500)      (17,287)

Cash flows from investing activities:
   Purchase of property, plant, and equipment                 0      (21,875)        (189)        (1,723)          0       (23,787)
   Proceeds from disposals                                    0       93,486            0              0           0        93,486
   Proceeds from the sale of idle facilities                  0        1,427            0              0           0         1,427
   Proceeds from investment in CoBank                         0        2,795            0              0           0         2,795
   Cash paid for acquisitions                                 0     (443,531)           0        (72,521)          0      (516,052)
                                                       --------    ---------     --------      ---------    --------    ----------
Net cash used in investing activities                         0     (367,698)        (189)       (74,244)          0      (442,131)

Cash flows from financing activities:
   Net proceeds from short-term debt                          0       18,900            0         36,000           0        54,900
   Proceeds from issuance of long-term debt                   0      677,100            0         42,163           0       719,263
   Payments on long-term debt                                 0     (287,574)           0              0           0      (287,574)
   Payments on capital leases                                 0         (282)           0             (1)          0          (283)
   Issuance of stock, net of repurchases                    844            0            0              0           0           844
   Cash portion of non-qualified conversion                (153)           0            0              0           0          (153)
   Cash dividends paid                                   (6,734)           0            0              0           0        (6,734)
   Cash paid for debt issuance costs and amendments           0      (19,354)           0              0           0       (19,354)
   Dividends paid to Pro-Fac                                  0       (7,500)           0              0       7,500             0
                                                       --------    ---------     --------      ---------    --------    ----------
Net cash provided by financing activities                (6,043)     381,290            0         78,162       7,500       460,909
                                                       --------    ---------     --------      ---------    --------    ----------
Net change in cash and cash equivalents                      (3)       1,481           13              0           0         1,491
Cash and cash equivalents at beginning of period              3        4,972           74              0           0         5,049
                                                       --------    ---------     --------      ---------    --------    ----------
Cash and cash equivalents at end of period             $      0    $   6,453     $     87      $       0    $      0    $    6,540
                                                       ========    =========     ========      =========    ========    ==========
</TABLE>