UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                    Form 10-K

(Mark One)
            [X] Annual Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934
                     For the Fiscal Year Ended June 30, 2001

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

                        For the Transition Period from          to
                                                       -----      -----
                                File No. 0-20539
                            PRO-FAC COOPERATIVE, INC.
             (Exact Name of Registrant as Specified in Its Charter)

         New York                                        16-6036816
(State or other jurisdiction of                         (IRS Employer
incorporation or organization                        Identification Number)

        90 Linden Oaks, PO Box 682, Rochester, NY        14603
          (Address of Principal Executive Offices)     (Zip Code)


       Registrant's telephone number, including area code: (716) 383-1850

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

           Securities Registered Pursuant to Section 12(g) of the Act:

                       Class A Cumulative Preferred Stock
                       Liquidation Preference $25.00/Share
                              Par Value $1.00/Share

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

                       YES       X       NO
                              -------          -------

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

 Aggregate market value of voting stock held by non-affiliates of the registrant
                             as of September 1, 2001

                        Class A Common Stock: $10,002,370
               (Based upon par value of shares since there is no
                    market for the Registrant's common stock)

            Number of common shares outstanding at September 1, 2001:

                         Class A Common Stock: 2,000,474


<PAGE>
                   FORM 10-K ANNUAL REPORT - Fiscal Year 2001
                            PRO-FAC COOPERATIVE, INC.
                                TABLE OF CONTENTS

<TABLE>
                                     PART I
                                                                                                                PAGE
<S>   <C>   <C>                                                                                                 <C>
ITEM  1.    Description of Business
                Cautionary Statement on Forward-Looking Statements..........................................      3
                General Development of Business.............................................................      3
                Narrative Description of Business...........................................................      5
                Financial Information About Industry Segments...............................................      7
                Packaging and Distribution..................................................................      7
                Trademarks..................................................................................      7
                Raw Material Sources........................................................................      8
                Environmental Matters.......................................................................      8
                Seasonality of Business.....................................................................      9
                Practices Concerning Working Capital........................................................      9
                Significant Customers.......................................................................      9
                Backlog of Orders...........................................................................      9
                Business Subject to Government Contracts....................................................      9
                Competitive Conditions......................................................................      9
                Market and Industry Data....................................................................     10
                New Products and Research and Development...................................................     10
                Employees...................................................................................     10
ITEM  2.    Description of Properties.......................................................................     10
ITEM  3.    Legal Proceedings...............................................................................     12
ITEM  4.    Submission of Matters to a Vote of Security Holders.............................................     12

                                     PART II

ITEM  5.    Market for Registrant's Common Stock and Related Security Holder Matters........................     13
ITEM  6.    Selected Financial Data.........................................................................     14
ITEM  7.    Management's Discussion and Analysis of Financial Condition and Results of Operations...........     15
ITEM  7A.   Quantitative and Qualitative Disclosures About Market Risk......................................     25
ITEM  8.    Financial Statements and Supplementary Data.....................................................     26
ITEM  9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure............     63

                                    PART III

ITEM 10.    Directors and Executive Officers of the Registrant..............................................     64
ITEM 11.    Executive Compensation..........................................................................     67
ITEM 12.    Security Ownership of Certain Beneficial Owners and Management..................................     69
ITEM 13.    Certain Relationships and Related Transactions..................................................     71

                                     PART IV

ITEM 14.    Exhibits, Financial Statement Schedules and Reports on Form 8-K.................................     73
            Signatures......................................................................................     79
</TABLE>


<PAGE>

                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

               CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

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

The Cooperative cautions readers that any such forward-looking statements made
by or on behalf of the Cooperative are based on management's current
expectations and beliefs but are not guarantees of future performance. Actual
results could differ materially from those expressed or implied in the
forward-looking statements. The factors that could impact the Cooperative
include:

*    the impact of strong competition in the food industry;

*    the impact of changes in consumer demand;  ss. the impact of weather on the
     volume and quality of raw product;

*    the  inherent  risks  in  the  marketplace   associated  with  new  product
     introductions, including uncertainties about trade and consumer acceptance;

*    the  continuation of the  Cooperative's  success in integrating  operations
     (including the  realization of anticipated  synergies in operations and the
     timing of any such  synergies)  and the  availability  of  acquisition  and
     alliance opportunities;

*    the  Cooperative's  ability  to  achieve  the  gains  in  productivity  and
     improvements in capacity utilization; and

*    the Cooperative's ability to service debt.

                         GENERAL DEVELOPMENT OF BUSINESS

Pro-Fac Cooperative,  Inc. is an agricultural  cooperative corporation formed in
1960 under the  Cooperative  Corporation  Laws of New York to process and market
crops grown by its members.  Unless the context  otherwise  requires,  the terms
"Cooperative"  and  "Pro-Fac"  refer  to  Pro-Fac  Cooperative,   Inc.  and  its
subsidiaries.  The Cooperative conducts business under the name of Agrilink.  In
addition,  the board of  directors  of  Agrilink  Foods,  Inc.,  a wholly  owned
subsidiary of the  Cooperative,  and Pro-Fac conduct joint meetings,  coordinate
their activities, and act on a consolidated basis. Although Pro-Fac Cooperative,
Inc. 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.  Pro-Fac's  Class A Cumulative  preferred stock is listed on the
Nasdaq National Market system.

Pro-Fac  crops include  fruits  (cherries,  apples,  blueberries,  peaches,  and
plums),  vegetables (snap beans,  beets,  cucumbers,  peas, sweet corn, carrots,
cabbage,  squash,  asparagus,  potatoes,  turnip roots,  and leafy greens),  and
popcorn. Only growers of crops marketed through Pro-Fac (or associations of such
growers)  can become  members of Pro-Fac;  a grower  becomes a member of Pro-Fac
through  the  purchase  of common  stock.  Class A members own shares of Class A
common stock and are members who deliver raw product for sale and  processing at
the facilities of Agrilink Foods.  There are  approximately 604 Class A members,
consisting of individual growers or associations of growers, located principally
in  the  states  of  New  York,  Delaware,  Pennsylvania,   Illinois,  Michigan,
Washington, Oregon, Iowa, Nebraska, Florida, and Georgia.

Agrilink Foods, Inc. ("Agrilink Foods"),  incorporated in New York in 1961, is a
producer  and  marketer of  processed  food  products.  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 Agrilink Foods' operating facilities,  excluding one
in Mexico, are within the United States.

On November 3, 1994,  Pro-Fac acquired Agrilink Foods, and Agrilink Foods became
a wholly  owned  subsidiary  of  Pro-Fac.  Pro-Fac  and  Agrilink  Foods  have a
long-standing  contractual relationship pursuant to which Pro-Fac provides crops
and  financing  to  Agrilink  Foods,   Agrilink  Foods  provides  marketing  and
management to Pro-Fac,  and Pro-Fac shares in the profits and losses of Agrilink
Foods.

<PAGE>

Upon  consummation of the  acquisition,  Pro-Fac and Agrilink Foods entered into
the  Pro-Fac  Marketing  and  Facilitation  Agreement  (the  "Pro-Fac  Marketing
Agreement").

The  Pro-Fac  Marketing  Agreement  provides  for  Pro-Fac  to supply  crops and
additional financing to Agrilink Foods, for Agrilink Foods to provide market and
management  services  to  Pro-Fac,  and for  Pro-Fac to share in the profits and
losses of Agrilink Foods. Pro-Fac is required to reinvest into Agrilink Foods at
least 70 percent of any additional patronage income derived from the earnings of
Agrilink  Foods. To preserve the  independence  of Agrilink  Foods,  the Pro-Fac
Marketing  Agreement  also  requires  that certain of the  directors of Agrilink
Foods be  individuals  who are not  employees or  shareholders  of, or otherwise
affiliated  with,  Pro-Fac or Agrilink  Foods  ("Disinterested  Directors")  and
requires  that certain  decisions,  including the volume of and the amount to be
paid  for  crops  received  from  Pro-Fac,  be  approved  by  the  Disinterested
Directors.

Under the Pro-Fac Marketing  Agreement,  Agrilink Foods manages the business and
affairs of Pro-Fac and provides all personnel support and administrative support
required.  Pro-Fac  pays  Agrilink  Foods a  quarterly  fee of $25,000 for these
services.

Additional  patronage  income  received by Pro-Fac is  deductible to Pro-Fac for
federal tax purposes only to the extent distributed to its members.  Pro-Fac may
make this  distribution to its members through a combination of cash and retains
as long as a minimum of 20 percent of the amount is paid in cash as  required by
federal tax law.  Pro-Fac has  historically  paid its members between 20 percent
and 30 percent of additional  patronage income in cash and the remaining portion
in retains.  Funds made available by the  distribution  of retains to members in
lieu of cash have historically been reinvested by Pro-Fac in Agrilink Foods. See
further  discussion of the  relationship  with Pro-Fac in NOTE 2 to the Notes to
Consolidated Financial Statements.

Agripac,  Inc.:  PF  Acquisition  II, Inc. ("PF II") was a subsidiary of Pro-Fac
until February 15, 2001. PF II was  incorporated in January 1999.  Pro-Fac owned
100  percent  of  the  common  stock  of PF  II,  while  PFA  Northwest  Growers
Cooperative,  Inc.,  an  Oregon  cooperative,  owned  100  percent  of the PF II
preferred  stock.  PF II  conducted  business  under the name  AgriFrozen  Foods
("AgriFrozen").

On February 23, 1999, PF II acquired the frozen  vegetable  business of Agripac,
Inc.  ("Agripac"),  an Oregon  cooperative.  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.

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. 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."

The  contractual  relationship  between  AgriFrozen  and Pro-Fac is defined in a
marketing and facilitation  agreement between the two companies (the "AgriFrozen
Marketing Agreement").  Under that agreement,  AgriFrozen purchased raw products
from Pro-Fac and processed and marketed the finished  products.  AgriFrozen paid
Pro-Fac  commercial  market value ("CMV") for the crops supplied by Pro-Fac.  In
addition, in any year in which AgriFrozen had earnings,  AgriFrozen was required
to distribute  such earnings to Pro-Fac for  distribution  to Class B members of
Pro-Fac.  However,  in the event AgriFrozen  experienced any losses,  AgriFrozen
deducted  the  losses  from the  total  CMV  payable.  The  agreement  permitted
AgriFrozen  to pay 20 percent of any  additional  earnings in cash and retain 80
percent as working capital.

On January 22, 2001,  AgriFrozen  Foods 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 the  decision  by
AgriFrozen's board not to plant or process crops for the 2001growing 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. On
February 16, 2001, Agrilink Foods completed the purchase of the frozen vegetable

<PAGE>

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.  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 ending on June 30, 2001. Such expenses are 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  reimbursement  by AgriFrozen  of the proceeds from  available
receivables  not  pledged  to  the  lender.  Agrilink  Foods  incurred  fees  of
approximately  $0.8 million related to this transaction which were expensed when
incurred.

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 of Pro-Fac supplying raw product
to the AgriFrozen Foods processing facilities.

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 Agrilink Foods, 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 with and 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, Birds Eye Voila!,
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.

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 a 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  charge 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. 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  to  the  "Notes  to
Consolidated  Financial  Statements - 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.

The Credit  Facility and the Notes  restrict the ability of Pro-Fac to amend the
Pro-Fac Marketing Agreement. The Credit Facility and the Notes also restrict the
amount of dividends  and other  payments  that may be made by Agrilink  Foods to
Pro-Fac.

                        NARRATIVE DESCRIPTION OF BUSINESS

The  Cooperative  sells products in three  principal  categories:  (i) "branded"
products,  which  are  sold  under  various  trademarks,  (ii)  "private  label"
products, which are sold to grocers who in turn use their own brand names on the
products  and (iii)  "food  service"  products,  which are sold to food  service
institutions such as restaurants,  caterers,  bakeries,  and schools.  In fiscal
2001,  approximately 64 percent of the  Cooperative's net sales were branded and
the remainder  divided  between private label and food  service/industrial.  The
Cooperative's branded products are listed under the "Trademarks" section of this
<PAGE>
report.  The  Cooperative's  private label  products  include  canned and frozen
vegetables,  salad dressings,  salsa,  applesauce,  fruit fillings and toppings,

Southern frozen vegetable  specialty  products,  and frozen breaded and battered
products  which  are sold to  customers  such as  Albertson's,  Fleming,  Piggly
Wiggly,  Wal-Mart/Sam's,  Safeway, SuperValu, BJ's, Wegmans, and Winn-Dixie. The
Cooperative's food  service/industrial  products include salad dressings,  fruit
fillings  and  toppings,   canned  and  frozen   vegetables,   frozen   Southern
specialties,  frozen breaded and battered products, and canned and frozen fruit,
which are sold to customers  such as Alliant Food Service,  Gordon Food Service,
Pocahontas,  PYA Monarch,  Church's,  Denny's, Food Service of America, KFC, MBM
Corporation, McDonald's, and SYSCO.

The Cooperative has four primary product lines: vegetables,  fruits, snacks, and
canned meals.  A description  of the  Cooperative's  four primary  product lines
follows:

Vegetables: The vegetable product line consists of canned and frozen vegetables,
chili beans, and various other products. Additional products include value-added
items such as frozen vegetable blends, and  Southern-specialty  products such as
black-eyed  peas,  okra,  Southern  squash,  frozen meal  starters with pasta or
potatoes and sauce and complete frozen meals in a bag.  Branded  products within
the vegetable product line include Birds Eye, Birds Eye Voila!, Birds Eye Simply
Grillin', Freshlike, Veg-All, McKenzies, and Brooks Chili Beans. In fiscal 2001,
ongoing vegetable product line net sales represented approximately 74 percent of
the Cooperative's total continuing net sales. Within this product line net sales
of approximately 62 percent represented branded products, 16 percent represented
private  label  products  and 22  percent  represented  food  service/industrial
products.

Agrilink  Foods is a major  supplier of frozen  vegetables for Sam's Club stores
across the United States and the exclusive supplier in a significant  portion of
Sam's Clubs.  The Company is also a 50 percent  partner with Flanagan  Brothers,
Inc. in Great Lakes Kraut Company,  LLC, a New York limited  liability  company.
This joint venture includes the Silver Floss and Krrrrisp Kraut brands.

On June 23,  2000,  Agrilink  Foods  sold its pickle  business  based in Tacoma,
Washington to Dean Pickle and Specialty  Products Company,  a subsidiary of Dean
Foods. This business included pickle, pepper, and relish products sold primarily
under the Nalley and Farman's brand names.  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.

On December 17, 1999,  Agrilink  Foods sold its  Cambria,  Wisconsin  processing
facility  to Del  Monte.  This  facility  was  primarily  utilized  for  canning
operations.

On  November  8, 1999,  Agrilink  Foods sold its Midwest  private  label  canned
vegetable  business  to  Seneca  Foods.  Included  in this  transaction  was the
Arlington,  Minnesota facility. This sale did not include Agrilink Foods' retail
branded canned vegetables Veg-All and Freshlike.

On  September  24,  1998,  Agrilink  Foods  acquired  the DFVC frozen and canned
vegetable  businesses.  DFVC was one of the leading  processors of vegetables in
the United States  selling its products  under  well-known  brands such as Birds
Eye, Freshlike, and Veg-All, and various private labels.

Fruits:  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  Cooperative  is a major  supplier of branded and
private label fruit fillings to retailers and food service  institutions such as
restaurants, caterers, bakeries, and schools. In fiscal 2001, fruit product line
net  sales  represented  approximately  9  percent  of the  Cooperative's  total
continuing  net sales.  Within this product line net sales of  approximately  53
percent  represented  branded  products,  17 percent  represented  private label
products, and 30 percent represented food service/industrial products.

Snacks:  The snacks  product line consists of several  varieties of potato chips
including  regular and kettle fried,  as well as popcorn,  cheese  curls,  snack
mixes,  and other  corn-based  snack items.  Kettle fried potato chips produce a
potato chip that is thicker and crisper  than other potato  chips.  Items within
this product line are marketed primarily in the Pacific  Northwest,  Midwest and
Mid-Atlantic  states.  Branded  products within the snack category include Tim's
Cascade  Chips,  Snyder of Berlin,  Husman,  La  Restaurante,  Erin's,  Beehive,
Pops-Rite,   and  Super  Pop.  In  fiscal  2001  snacks  net  sales  represented
approximately 8 percent of the Cooperative's  total continuing net sales. Within
this product line, net sales of  approximately  89 percent  represented  branded
products,   9  percent  represented  private  label  products,   and  2  percent
represented food service/industrial products.

Effective  June 24,  2000,  Agrilink  Foods  acquired  the  Flavor  Destinations
trademark  for snack items and  manufactures  and markets  this  regional  brand
through its Tim's Cascade Chips business in Auburn, Washington.
<PAGE>
Effective July 21, 1998,  Agrilink Foods acquired J.A. Hopay  Distributing  Co.,
Inc. ("Hopay") of Pittsburgh,  Pennsylvania.  Hopay was a former distributor for
Snyder of Berlin products.

Canned Meals: The canned meal product line includes canned meat products such as
chilies,  stews,  soups, and various other  ready-to-eat  prepared meals.  Items
within this  product  line are  marketed  primarily  in the  Pacific  Northwest.
Branded products within the canned meal category include Nalley.  In fiscal 2001
canned meals net sales represented  approximately 5 percent of the Cooperative's
total continuing net sales. Within this product line, net sales of approximately
79 percent  represented  branded products,  18 percent represented private label
products, and 3 percent represented food service/industrial products.

Other:  Agrilink Foods' other product line primarily represents salad dressings.
Branded products within this category include  Bernstein's and Nalley. In fiscal
2001, other net sales  represented  approximately 4 percent of the Cooperative's
total continuing net sales.

On January 29, 1999,  the Company sold the Adams brand peanut butter  operations
to the J. M. Smucker Company.

                  FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

The business of the Cooperative is principally conducted in four industry
segments: vegetables, fruits, canned meals, and snacks. The financial statements
for the fiscal years ended June 30, 2001, June 24, 2000, and June 26, 1999,
which are included in this report, reflect the information relating to those
segments for each of the Cooperative's last three fiscal years.

                           PACKAGING AND DISTRIBUTION

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

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

Agrilink  Foods also  maintains a long-term  logistics  agreement with Americold
under which Americold  manages the Montezuma,  Georgia frozen food  distribution
facility  and all frozen food  transportation  operations  of Agrilink  Foods in
Georgia and New York.

                                   TRADEMARKS

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

<TABLE>
<S>                        <C>
Product Line                                                               Brand Name

Vegetables                 Birds Eye, Voila!, Birds Eye Simply Grillin'(1), Birds Eye Fresh(1) , Freshlike, Veg-All, Brooks,
                           Chill-Ripe, Comstock, Greenwood, McKenzie's, McKenzie's Gold King, Southern Farms, Southland, Nalley,
                           Pixie, Thank You, Silver Floss(2), Krrrrisp Kraut(2)

Fruits                     Birds Eye, Chill-Ripe, Comstock, Globe, McKenzies, Orchard Farm, Orchard Fresh, Pixie, Southern Farms,
                           Thank You, Squeezle Sauz(1) , West Bay, Wilderness, Tropic Isle
</TABLE>



<PAGE>
<TABLE>
<S>                        <C>
Product Line                                                               Brand Name

Snacks                     Snyder of Berlin, Thunder Crunch, Tim's Cascade Style Potato Chips, La Restaurante, Erin's, Husman,
                           Naturally Good, Beehive, Pops-Rite, Savoral, Super Pop, Flavor Destinations

Canned Meals               Nalley, Mariners Cove, Riviera

Other                      Bernstein's, Nalley


<FN>
(1)  Application filed and U.S. federal registration pending.

(2)  Represent trademarks of Great Lakes Kraut Company,  LLC. The Company owns a
     50 percent interest in this joint venture.
</FN>
</TABLE>
                              RAW MATERIAL SOURCES

Of the  commodity  types  supplied  by  Pro-Fac,  approximately  60 percent  was
received from Class A members of the Cooperative.  Agrilink Foods also purchased
on the open market  some crops of the same type and  quality as those  purchased
from  Pro-Fac.  Such open market  purchases  may occur at prices higher or lower
than those paid to Pro-Fac for similar products.  See further  discussion of the
relationship  with  Agrilink  Foods  in  NOTE 2 to the  "Notes  to  Consolidated
Financial Statements."

The vegetable and fruit portions of the business can be positively or negatively
affected  by weather  conditions  nationally  and the  resulting  impact on crop
yields.  Favorable  weather  conditions  can  produce  high crop  yields  and an
oversupply  situation.  This situation  typically  results in depressed  selling
prices and reduced  profitability  on the  inventory  produced  from that year's
crops.  Excessive  rain or drought  conditions can produce low crop yields and a
shortage  situation.  This  typically  results  in  higher  selling  prices  and
increased  profitability.  While the  national  supply  situation  controls  the
pricing, the supply can differ regionally because of variations in weather.

The Cooperative purchases all of its requirements for nonagricultural  products,
including  containers,  in the open  market.  Although the  Cooperative  has not
experienced  any  difficulty  in  obtaining  adequate  supplies  of such  items,
occasional periods of short supply of certain raw materials may occur.

                              ENVIRONMENTAL MATTERS

The disposal of solid and liquid waste material  resulting from the  preparation
and  processing  of foods and the  emission of wastes and odors  inherent in the
heating of foods during  preparation are subject to various federal,  state, and
local environmental laws and regulations.  Such laws and regulations have had an
important  effect  on  the  food  processing  industry  as  a  whole,  requiring
substantially  all firms in the  industry  to incur  material  expenditures  for
modification of existing processing facilities and for construction of new waste
treatment  facilities.  The Cooperative is also subject to standards  imposed by
regulatory  agencies  pertaining  to the  occupational  health and safety of its
employees.  Management believes that continued measures to comply with such laws
and  regulations  will not have a material  adverse effect upon its  competitive
position or financial condition.

Among the various programs for the protection of the environment which have been
adopted by the Cooperative to date, the most important for the operations of the
Cooperative  are the waste water discharge  permit programs  administered by the
environmental  protection agencies in those states in which the Cooperative does
business  and  by the  federal  Environmental  Protection  Agency.  Under  these
programs, permits are required for processing facilities which discharge certain
wastes into streams and other bodies of water,  and the  Cooperative is required
to meet certain  discharge  standards in accordance  with  compliance  schedules
established  by such  agencies.  The  Cooperative  has received  permits for all
facilities  for which permits are required.  Each year the  Cooperative  submits
applications for renewal permits as required for the facilities.

While the  Cooperative  cannot predict with certainty the effect of any proposed
or future environmental legislation or regulations on its processing operations,
management of the Cooperative believes that the waste disposal systems which are
now in operation or which are being  constructed  or designed are  sufficient to
comply with all currently applicable laws and regulations.

The  Cooperative  is  cooperating  with  environmental  authorities in remedying
various minor  environmental  matters at several of its plants. Such actions are
being conducted pursuant to procedures approved by the appropriate environmental
authorities at a cost that is not expected to be material.
<PAGE>

Expenditures related to environmental  programs and facilities have not had, and
are not expected to have, a material effect on the earnings of the  Cooperative.
In fiscal 2001,  total  capital  expenditures  of Pro-Fac were $26.2  million of
which   approximately   $0.6  million  was  devoted  to  the   construction   of
environmental  facilities.  The  Cooperative  estimates  that the  environmental
capital  expenditures  will be  approximately  $0.8  million for the 2002 fiscal
year. However, there can be no assurance that expenditures will not be higher.

                             SEASONALITY OF BUSINESS

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

                      PRACTICES CONCERNING WORKING CAPITAL

Agrilink  Foods must maintain  substantial  inventories  throughout  the year of
finished  products  produced from seasonal raw materials.  These inventories are
generally financed through seasonal borrowings. Agrilink Foods' Revolving Credit
Facility  is  used  primarily  for  seasonal  borrowing,  the  amount  of  which
fluctuates during the year. Both the maintenance of substantial  inventories and
the practice of seasonal borrowing are common to the food processing industry.

                              SIGNIFICANT CUSTOMERS

The  Cooperative's  industry  segments are not dependent  upon the business of a
single customer or a few customers.  The Cooperative does not have any customers
to whom  sales are made in an amount  which  equals  10  percent  or more of the
Cooperative's net sales.

                                BACKLOG OF ORDERS

Backlog of orders has not  historically  been significant in the business of the
Cooperative.  Orders  are filled  shortly  after  receipt  from  inventories  of
packaged and processed foods.

                   BUSINESS SUBJECT TO GOVERNMENTAL CONTRACTS

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

                             COMPETITIVE CONDITIONS

All products of the Cooperative,  particularly  branded  products,  compete with
those  of other  national  and  major  regional  food  processors  under  highly
competitive  conditions.  The  principal  methods  of  competition  in the  food
industry are a ready availability of a broad line of products,  product quality,
price, and advertising and sales promotion.

Quality  of  product  and  uniformity  of  quality  are  important   methods  of
competition. Sourcing of product from the members of Pro-Fac allows control over
the quality and  uniformity  of much of the raw product that is  purchased.  The
members of Pro-Fac generally operate relatively large production operations with
emphasis on mechanized growing and harvesting techniques. This factor is also an
advantage in producing uniform, high-quality food products.

The  Cooperative's  pricing  is  generally  competitive  with that of other food
processors  for products of comparable  quality.  Branded  products are marketed
under  national and regional  brands.  In fiscal  2001,  marketing  programs for
national brands focused primarily on Birds Eye Voila!, Birds Eye Baby Vegetables
and Birds Eye  Simply  Grillin'.  National  advertising  campaigns  can  include
television,  magazines, coupons, and in-store promotions. Marketing programs for
regional  brands are  focused  on local  tastes  and  preferences  as a means of
developing  consumer  brand loyalty.  Regional  advertising  campaigns  included
magazines, coupons, and in-store promotions.

<PAGE>

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

Profit  margins for fruits and  vegetables  are  subject to industry  supply and
demand  fluctuations,  attributable  to changes in growing  conditions,  acreage
planted,  inventory carryover, and other factors. The Cooperative has endeavored
to protect against changing growing conditions through geographical expansion of
its sources of supply.

The  percentage  of ongoing  sales under  brand names owned and  promoted by the
Cooperative   amount   to   approximately   64   percent;   sales  to  the  food
service/industrial  represent  approximately 20 percent; and private label sales
currently represent approximately 16 percent.

It is difficult to estimate the number of  competitors  in the markets served by
the  Cooperative.  Nearly all products sold by the Cooperative  compete with the
nationally  advertised  brands of leading food processors,  including Del Monte,
Green Giant, Heinz,  Frito-Lay,  and Kraft, and similar major brands, as well as
with the branded and private label products of a number of regional  processors,
many of which  operate  only in  portions  of the  marketing  area served by the
Cooperative.

                            MARKET AND INDUSTRY DATA

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

                    NEW PRODUCTS AND RESEARCH AND DEVELOPMENT

Agrilink Foods operates a technical center located in Green Bay,  Wisconsin that
is responsible for new product development,  quality assurance, and engineering.
Approximately  27 employees are employed  within this  facility.  Agrilink Foods
follows a  four-stage  new product  development  process as follows:  screening,
feasibility,  development,  and commercialization.  This new product development
process ensures input from consumers,  customers,  and internal functional areas
before a new product is brought to market.

The  Cooperative  also  focuses  on  the  development  of  related  products  or
modifications of existing products for the  Cooperative's  brands and customized
products for the Cooperative's private label and food service businesses.

The amount expensed during the last three fiscal years on  Cooperative-sponsored
and  customer-sponsored  research  activities relating to the development of new
products or the improvement of existing products has not been material.

During  fiscal 1999,  Birds Eye Voila!,  a frozen  all-in-one  meal product that
includes  vegetables,  starch  (pasta or potatoes),  seasonings,  and bite sized
pieces of protein (chicken,  beef, turkey, or shrimp),  in a variety of flavors,
was introduced.  Fiscal 2001 net sales for Birds Eye Voila!  were  approximately
$108.1  million  and  fiscal  2000 net sales for Birds Eye  Voila!  were  $104.5
million. During fiscal 2001, the Company introduced Birds Eye Simply Grillin', a
preseasoned  blend of top quality Birds Eye vegetables in a foil tray. Net sales
for Simply Grillin' were approximately  $11.3 million in fiscal 2001. A national
advertising  campaign for Simply  Grillin' has been  initiated  during the first
quarter of fiscal 2002.

                                    EMPLOYEES

As of June 30, 2001, the  Cooperative  had 4,685  full-time  employees,  of whom
3,401 were  engaged in  production  and the  balance  in  management,  sales and
administration.  As of that date, the  Cooperative  also employed  approximately
3,360 seasonal and other part-time employees, almost all of whom were engaged in
production.  Most of the  production  employees  are  members of  various  labor
unions. The Cooperative  believes its current relationship with its employees is
good.

ITEM 2. DESCRIPTION OF PROPERTIES

All  plants,  warehouses,   office  space  and  other  facilities  used  by  the
Cooperative  in its business  are either owned by Agrilink  Foods or leased from
unaffiliated  third parties.  All of the properties  owned by Agrilink Foods are
subject to mortgages in favor of their  respective  primary lender.  In general,
the properties  include offices,  processing  plants and warehouse  space.  Some
processing  plants  are  located  in rural  areas  that are  convenient  for the
delivery of crops.  The Cooperative  also has dispersed  warehouse  locations to
facilitate the distribution of finished  products.  Agrilink Foods believes that
their facilities are in good condition and suitable for operations.
<PAGE>
Agrilink Foods' Alton, New York property is held for sale.

The following  table  describes all material  facilities  leased or owned by the
Cooperative  (other than the properties held for sale, certain public warehouses
leased by the Cooperative from unaffiliated third parties from time to time, and
facilities  owned by Agrilink  Foods' joint venture,  Great Lakes Kraut Company,
LLC).  Except as otherwise noted,  each facility set forth below is owned by the
Cooperative.


<TABLE>
                     FACILITIES UTILIZED BY THE COOPERATIVE

<CAPTION>
Type of Property (By Product Line)                                Location                              Square Feet
----------------------------------                                --------                              -----------

<S>                                                               <C>                                       <C>
Vegetables:
Warehouse                                                         Sodus, MI                                 243,138
Freezing plant, dry storage warehouse, and office                 Barker, NY                                123,600
Freezing plant                                                    Bergen, NY                                138,554
Cold storage and repackaging plant and public storage warehouse   Brockport, NY                             404,410
Canning plant and warehouse, freezing plant                       Oakfield, NY                              263,410
Freezing plant, cold storage, repackaging plant, and office       Montezuma, GA                             591,300
Freezing plant, cold storage, and office                          Alamo, TX                                 114,446
Freezing plant, cold storage, and office                          Bridgeville, DE                           104,383
Freezing plant and repackaging plant                              Celaya, Mexico                            318,620
Freezing plant and distribution center                            Darien, WI                                348,800
Freezing plant, repackaging plant and warehouse                   Fairwater, WI                             178,298
Repackaging plant and distribution center                         Fulton, NY                                263,268
Freezing and canning plant and office                             Green Bay, WI                             492,446
Freezing plant and repackaging plant(1)                           Oxnard, CA                                 39,082
Repackaging plant(1)                                              San Antonio, TX                            20,445
Freezing plant and warehouse                                      Uvalde, TX                                146,625
Freezing plant, repackaging plant and warehouse                   Watsonville, CA                           207,600
Freezing plant, repackaging plant and warehouse                   Waseca, MN                                258,475
Labeling plant and distribution center(1)                         Fond du Lac, WI                           330,000
Receiving and grading station (1)                                 Mount Vernon, WA                          110,806
Receiving and grading station (1)                                 Aurora, WA                                  6,800
Warehouse, tank yards, and office                                 Enumclaw, WA                               87,313
Plant, warehouse, and tank yards                                  Tacoma, WA                                295,468

Fruits:
Canning plant and warehouse                                       Red Creek, NY                             153,076
Canning plant and warehouse                                       Fennville, MI                             350,000
Canning plant and warehouse                                       Lawton, MI                                142,000

Snacks:
Manufacturing plant                                               Ridgway, IL                                50,000
Plant, warehouse, distribution center, and office                 Algona, WA                                107,000
Plant, warehouse, and office                                      Berlin, PA                                190,225
Plant, warehouse, distribution center, and office(1)              Auburn, WA                                 23,000
Plant, warehouse and distribution center                          Auburn, WA                                 27,442
Plant, warehouse, and office,                                     Cincinnati, OH                            113,576
Distribution center                                               Elwood City, PA                             8,000
Distribution center                                               Monessen, PA                               10,000
Distribution center                                               Coraopolis, PA                             15,000
Distribution center                                               Canton, OH                                  8,200
Distribution center(1)                                            Canal Fulton, OH                           14,000
Distribution center(1)                                            Altoona, PA                                10,000
Distribution center(1)                                            Ashland, KY                                10,760
Distribution center(1)                                            Bristol, TN                                11,500
Distribution center(1)                                            Knoxville, TN                              12,500
Distribution center(1)                                            Dayton, OH                                  9,200
</TABLE>



<PAGE>
<TABLE>

<CAPTION>
Type of Property (By Product Line)                                Location                              Square Feet
----------------------------------                                --------                              -----------

<S>                                                               <C>                                       <C>
Canned Meals:
Canning plant, warehouse and distribution center                  Tacoma, WA                                313,488

Other:
Office building, manufacturing plant and warehouse                Tacoma, WA                                372,164
Parking lot and yards (1)                                         Tacoma, WA                                305,470
Office Building - Fuller Building (1)                             Tacoma, WA                                 60,000
Headquarters office (1)                                           Rochester, NY                              76,372

<FN>
(1)Leased from third parties, although certain related equipment is owned by the
   Cooperative.
</FN>
</TABLE>

ITEM 3. LEGAL PROCEEDINGS

The  Cooperative is party to legal  proceedings  from time to time in the normal
course of its business.  In the opinion of management,  any liability that might
be incurred upon the resolution of these proceedings will not, in the aggregate,
have a  material  adverse  effect  on  either  of  these  businesses,  financial
condition, and results of operations.  Further, no such proceedings are known to
be contemplated by governmental  authorities.  The Cooperative maintains general
liability insurance coverage in amounts deemed to be adequate by management.

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

Not applicable.


<PAGE>
                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

There  is  no  trading  market  for  the   Cooperative's   common  stock.   Only
member/growers of the Cooperative can own shares of common stock. As of June 30,
2001, there were 604 members of Pro-Fac holding shares of Pro-Fac Class A Common
Stock and 153 members holding shares of Pro-Fac Class B Common Stock.  The Class
B common  stock held by former  members of Agripac was  repurchased  on July 19,
2001.

In fiscal 2001 and 2000,  dividends  on Class A Common Stock were paid at a rate
of 5.0  percent.  No  dividends  were  paid on  Class B  common  stock.  Further
information  required  by this  item is  contained  in NOTE 14 to the  "Notes to
Consolidated  Financial  Statements,"  at  "Quarterly  Financial  Data,"  and at
"Selected Financial Data."

During  fiscal 2001,  the  Cooperative  issued  shares of its Class A Cumulative
Preferred Stock in exchange for shares for its  Non-cumulative  Preferred Stock,
on a share-for-share  basis.  Such exchanges are exempt from registration  under
section  3(a)(9) of the  Securities  Act of 1933.  The dates and  amounts of the
exchanges are set forth below:

      Date                      Number of Shares         Value of Shares

January 14, 2001                      1,731                  $  43,275
April 28, 2001                          262                      6,550
June 25, 2001                            99                      2,475
                                    -------                  ---------
  Total                               2,092                  $  52,300
                                    =======                  =========

The Credit  Facility  restricts the amount of dividends and other  distributions
that may be made by Pro-Fac to its  stockholders.  The Notes restrict the amount
of dividends and other payments that may be made by Agrilink Foods.  See further
discussion at "Liquidity and Capital Resources."

In addition,  New York  Cooperative Law restricts the amount of annual dividends
on common stock to 12 percent per annum.



<PAGE>

<TABLE>
ITEM 6.       SELECTED FINANCIAL DATA

<CAPTION>
(Dollars in Thousands, Except Capital Stock Data)
                                                                                     Fiscal Year Ended June
                                                                  ----------------------------------------------------------------
                                                                      2001*        2000      1999**          1998        1997
                                                                  ------------  ---------   ----------   -----------  ----------
<S>                                                               <C>           <C>         <C>           <C>          <C>
Consolidated summary of operations:
Net sales                                                         $1,339,211    $1,306,659  $1,292,021    $  742,161   $  755,464
Cost of sales                                                       (956,182)     (919,029)   (928,262)     (546,578)    (563,722)
                                                                  -----------   ----------  ----------    ----------   ----------
Gross profit                                                         383,029       387,630     363,759       195,583      191,742
Selling, administrative, and general expenses                       (298,283)     (288,511)   (293,646)     (141,739)    (145,214)
Gains on sales of assets                                                   0         6,635      64,734             0        3,565
Restructuring                                                              0             0      (5,000)            0            0
Income from joint venture                                              1,779         2,418       2,787         1,893            0
                                                                  ----------    ----------  ----------    ----------   ----------
Operating income                                                      86,525       108,172     132,634        55,737       50,093
Interest expense                                                     (85,073)      (83,511)    (67,420)      (30,767)     (36,473)
Amortization of debt issue costs                                           0             0      (5,500)            0            0
                                                                  ----------    ----------  ----------    ----------   ----------
Pretax income before extraordinary item, cumulative effect of an
accounting change, dividends, and allocation of net proceeds           1,452        24,661      59,714        24,970       13,620
Tax provision                                                           (968)       (8,497)    (24,746)       (7,840)      (5,529)
                                                                  -----------   ----------  ----------    ----------   ----------
Income before extraordinary item, cumulative effect of an
   accounting change, dividends and allocation of net proceeds           484        16,164      34,968        17,130        8,091
Extraordinary item relating to the early extinguishment of debt
   (net of income taxes)                                                   0             0     (18,024)            0            0
Cumulative effect of an accounting change (net of income taxes)            0             0           0             0        4,606
                                                                  ----------    ----------  ----------    ----------   ----------
Net income                                                        $      484    $   16,164  $   16,944    $   17,130   $   12,697
                                                                  ==========    ==========  ==========    ==========   ==========
Allocation of Net Proceeds:
   Net income                                                     $      484    $   16,164  $   16,944    $   17,130   $   12,697
   Dividends on Class A common and preferred stock                    (8,123)       (7,410)     (6,734)       (6,328)      (5,503)
                                                                  -----------   ----------  ----------    ----------   ----------
   Net proceeds                                                       (7,639)        8,754      10,210        10,802        7,194
   Allocation (to)/from earned surplus                                 7,639        (3,832)    (10,210)       (4,662)      (3,661)
                                                                  ----------    ----------  ----------    ----------   ----------
   Net proceeds available to Class A members                      $        0    $    4,922  $        0    $    6,140   $    3,533
                                                                  ==========    ==========  ==========    ==========   ==========
Allocation of net proceeds available to Class A members:
   Payable to Class A members currently (30% of qualified proceeds
      available to Class A members in fiscal 2000  and 25% in
      fiscal 1998 and 1997)                                        $       0    $    1,477  $        0    $    1,535   $      883
Allocated to Class A members but retained by the Cooperative:
   Qualified retains                                                       0         3,445           0         4,605        2,650
                                                                  ----------    ----------  ----------    ----------   ----------
   Net proceeds available to Class A members                      $        0    $    4,922  $        0    $    6,140   $    3,533
                                                                  ==========    =========   ==========    ==========   ==========
   CMV related to Class A members                                 $   69,013    $   69,623  $   62,154    $   58,530   $   51,445
                                                                  ==========    ==========  ==========    ==========   ==========
   CMV related to Class B members                                 $    9,423    $   14,060
                                                                  ==========    ==========
   Total net proceeds allocated to Class A members as a
     percent of CMV***                                                  0.00%         7.07%       0.00%        10.51%        6.87%
                                                                  ==========    ==========  ==========    ==========   ==========

   Total net proceeds allocated to Class B members as a
     percent of CMV****                                                 0.00%         0.00%       0.00%         0.00%        0.00%
                                                                  ==========    ==========  ==========    ==========   ==========


Balance Sheet Data:
------------------
   Working capital                                                $  243,628    $  260,481  $  237,331    $   94,103   $   75,950
   Ratio of current assets to current liabilities                      2.1:1         1.9:1       1.9:1         1.7:1        1.6:1
   Total assets                                                   $1,061,351    $1,187,266  $1,196,479    $  569,240   $  546,677
   Debt to equity ratio*****                                           4.2:1         4.4:1       4.7:1         1.7:1        1.8:1
   Class A common stock                                           $   11,287    $   10,665  $    9,979    $    9,129   $    8,944
   Class B cumulative redeemable Preferred                        $      239    $      237  $      261    $      270   $      315
   Shareholders' and members' capitalization, redeemable stock,
     and common stock                                             $  153,315    $  159,843  $  152,111    $  141,369   $  132,663
   Total long-term debt and senior subordinated notes (excludes
    current portion and capital leases)                           $  631,128    $  679,205  $  702,322    $  229,937   $  229,829
Capital Stock Data Cash dividends paid per share:
     Class A Common                                               $      .25   $       .25  $      .25    $      .25   $     0.00
     Non-Cumulative Preferred                                     $     1.50   $      1.50  $     1.50    $     1.50   $     1.50
     Class A Cumulative Preferred                                 $     1.72   $      1.72  $     1.72    $     1.72   $     1.72
     Class B Cumulative Preferred                                 $     1.00   $      1.00  $     1.00    $     1.00   $     1.00
   Average Class A common stock investment per Class A member     $   18,688   $    17,037  $   15,471    $   14,399   $   14,333
Number of Class A Common Stock members:                                  604           626         645           634          624
Number of Class B Common Stock members:******                            153           150           0             0            0

<FN>
*      See NOTE 3 to "Notes to Consolidated Financial  Statements."  Information
       includes the activities of AgriFrozen until February 15, 2001. In
       addition, fiscal 2001 consists of 53 weeks.

**     Includes nine months of operating results from the September 28, 1998
       DFVC Acquisition.

***    Payment to Class A members for CMV was 100 percent of deliveries in
       fiscal 2001 and 1999.

****   Payment to Class B members for CMV was 63.50 percent  in fiscal 2001 and
       89.16  percent of  deliveries  in fiscal  2000.

*****  For purposes of this calculation,  debt includes both current and non-
       current debt, and equity includes common stock and redeemable preferred
       stock.

****** On July 19, 2001, Pro-Fac repurchased all Class B common stock.
</FN>
</TABLE>
<PAGE>

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

The purpose of this discussion is to outline the significant reasons for changes
in the  Consolidated  Statement of  Operations,  Net Proceeds and  Comprehensive
Income from fiscal 1999 through fiscal 2001.

Pro-Fac  Cooperative,  Inc.'s  ("Pro-Fac"  or  the  "Cooperative")  wholly-owned
subsidiary,  Agrilink Foods,  Inc.  ("Agrilink  Foods") has four primary product
lines including:  vegetables, fruits, snacks and canned meals. The Cooperative's
former subsidiary,  AgriFrozen,  had vegetables as its one primary product line.
The  majority  of each of the  product  lines'  net sales are  within the United
States. In addition,  all of the Cooperative's  operating facilities,  excluding
one facility in Mexico, are within the United States.

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 snack 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,  stews, soups, and various other ready-to-eat prepared
meals.  Branded  products within the canned meal category  include  Nalley.  The
Cooperative's  other product line primarily  represents salad  dressings.  Brand
products within this category include Bernstein's, and Nalley.

The  following  tables  illustrate  the  Cooperative's  results of operations by
product line for the fiscal years ended June 30, 2001,  June 24, 2000,  and June
26, 1999, and the  Cooperative's  total assets by product line at June 30, 2001,
June 24, 2000, and June 26, 1999.

<TABLE>
EBITDA1,2
<CAPTION>
(Dollars in Millions)

                                              Fiscal Years Ended
                             ----------------------------------------------------------
                              June 30, 2001       June 24,2000          June 26, 1999
                             --------------     ------------------     ----------------
                                       % of                  % of                 % of
                                $      Total       $         Total        $       Total
                             -----     -----     -----       -----     ------     -----

<S>                           <C>       <C>       <C>         <C>       <C>         <C>
Vegetables                    85.9      66.9      93.8        65.7      64.2        60.0
Fruits                        14.1      11.0      15.7        11.0      10.8        10.1
Snack                          9.4       7.3       9.8         6.9       5.8         5.4
Canned meals                   8.1       6.3       8.6         6.0       8.4         7.9
Other                          4.3       3.4       6.5         4.5       5.3         4.9
                             -----     -----     -----       -----     -----      ------
   Continuing segments       121.8      94.9     134.4        94.1      94.5        88.3
Businesses sold or closed3     6.5       5.1       8.5         5.9      12.6        11.7
                             -----     -----     -----       -----     -----      ------
     Total                   128.3     100.0     142.9       100.0     107.1       100.0
                             =====     =====     =====       =====     =====      ======

<FN>
1    Earnings before interest, taxes, depreciation,  and amortization ("EBITDA")
     is defined as the sum of pretax income before dividends,  allocation of net
     proceeds,  extraordinary item, interest expense, amortization of debt issue
     costs associated with the Bridge Facility, depreciation and amortization of
     goodwill and other intangibles.

     EBITDA  should not be considered  as an  alternative  to net income or cash
     flows from operations or any other generally accepted accounting principles
     measure of performance or as a measure of liquidity.

     EBITDA is included  herein  because the  Cooperative  believes  EBITDA is a
     financial  indicator of a Cooperative's  ability to service debt. EBITDA as
     calculated by the  Cooperative  may not be comparable  to  calculations  as
     presented by other companies.

2    Excludes the gains on sales of assets,  the restructuring  charge,  and the
     extraordinary item relating to the early  extinguishment of debt. See NOTES
     1 and 3 to the "Notes to Consolidated Financial Statements."

3    Represents  the operating  results of operations  sold or no longer part of
     the  Cooperative.  See  NOTE  3 to the  "Notes  to  Consolidated  Financial
     Statements."
</FN>
</TABLE>


<PAGE>

<TABLE>
Net Sales
<CAPTION>
(Dollars in Millions)
                                                            Fiscal Years Ended
                               ------------------------------------------------------------------
                                    June 30, 2001        June 24, 2000           June 26, 1999
                               --------------------   ------------------     --------------------
                                            % of                   % of                     % of
                                   $        Total        $         Total        $           Total
                                -------     -----     -------      -----     -------        -----

<S>                               <C>        <C>        <C>         <C>        <C>           <C>
Vegetables                        970.2      72.4       836.7       64.0       769.5         59.6
Fruits                            120.4       9.0       114.4        8.8       115.8          9.0
Snack                              97.9       7.3        90.9        7.0        91.4          7.1
Canned meals                       64.2       4.8        62.3        4.8        66.4          5.1
Other                              50.6       3.8        56.0        4.3        74.8          5.8
                                -------     -----     -------     ------     -------        -----
     Continuing segments        1,303.3      97.3     1,160.3       88.9     1,117.9         86.6
Businesses sold or closed 1        35.9       2.7       146.4       11.1       174.1         13.4
                                -------     -----     -------     ------     -------        -----
     Total                      1,339.2     100.0     1,306.7      100.0     1,292.0        100.0
                                =======     =====     =======     ======     =======        =====

<FN>
1  Includes net sales of operations sold or no longer part of the Cooperative.
   See NOTE 3 to the "Notes to Consolidated Financial Statements."
</FN>
</TABLE>


<TABLE>
Operating Income1
<CAPTION>
(Dollars in Millions)
                                                   Fiscal Years Ended
                               ----------------------------------------------------------
                                 June 30, 2001       June 24, 2000        June 26, 1999
                               -----------------   ----------------      ----------------
                                         % of                 % of                  % of
                                  $      Total        $       Total         $       Total
                                ----     -----     ------     -----      ------     -----

<S>                             <C>      <C>        <C>        <C>        <C>        <C>
Vegetables                      55.7     64.4       65.4       64.5       43.9       60.1
Fruits                          11.4     13.2       13.9       13.7        8.4       11.5
Snack                            5.6      6.5        6.7        6.6        3.3        4.5
Canned meals                     6.6      7.6        6.7        6.6        6.5        8.9
Other                            1.9      2.2        4.6        4.5        3.7        5.1
                                ----    -----      -----      -----      -----      -----
     Continuing segments        81.2     93.9       97.3       95.9       65.8       90.1
Businesses sold or closed 2      5.3      6.1        4.2        4.1        7.2        9.9
                                ----    -----      -----      -----      -----      -----
     Total3                     86.5    100.0      101.5      100.0       73.0      100.0
                                ====    =====      =====      =====      =====      =====

<FN>
1    Excludes the gains on sales of assets,  the restructuring  charge,  and the
     extraordinary item relating to the early  extinguishment of debt. See NOTES
     1 and 3 to the "Notes to Consolidated Financial Statements."

2    Represents the operating  results of the operations  sold or no longer part
     of the  Cooperative.  See NOTE 3 to the  "Notes to  Consolidated  Financial
     Statements."

3    Operating income less interest expense  (including the amortization of debt
     issue costs  associated with the Bridge  Facility) of $85.1 million,  $83.5
     million,  and $72.9  million  for the years ended June 30,  2001,  June 24,
     2000,  and June 26, 1999,  respectively,  results in pretax  income  before
     extraordinary item, dividends,  and allocation of net proceeds.  Management
     does not allocate interest expense to product lines when evaluating product
     line performance.
</FN>
</TABLE>



<PAGE>

<TABLE>
Total Assets
<CAPTION>
(Dollars in Millions)


                                                        As of Fiscal Years Ended
                               -------------------------------------------------------------------------
                                    June 30,2001             June 24, 2000              June 26, 1999
                               --------------------     ---------------------      ---------------------
                                            % of                        % of                      % of
                                  $         Total           $           Total          $          Total
                               -------      -----       --------        -----       -------       -----

<S>                              <C>         <C>           <C>           <C>          <C>          <C>
Vegetables                       839.8       79.1          867.1         73.0         880.8        73.6
Fruits                            71.9        6.8           79.4          6.7          90.2         7.5
Snacks                            47.0        4.4           43.5          3.7          40.9         3.4
Canned Meals                      45.3        4.3           45.7          3.8          46.2         3.9
Other                             57.2        5.3           52.2          4.4          43.1         3.6
                               -------      -----       --------        -----       -------       -----
   Continuing segments         1,061.2       99.9        1,087.9         91.6       1,101.2        92.0
Businesses sold or closed1         0.0        0.0           99.1          8.4          94.4         7.9
Assets held for sale               0.1        0.1            0.3          0.0           0.9         0.1
                               -------      -----       --------        -----       -------       -----
   Total                       1,061.3      100.0        1,187.3        100.0       1,196.5       100.0
                               =======      =====       ========        =====       =======       =====
<FN>

1    Includes  the  assets  of  operations   sold  or  no  longer  part  of  the
     Cooperative.   See  NOTE  3  to  the  "Notes  to   Consolidated   Financial
     Statements."
</FN>
</TABLE>

                     CHANGES FROM FISCAL 2001 TO FISCAL 2000

During fiscal 2001,  net sales from  continuing  segments  showed an increase of
$143.0 million,  or 12.3 percent.  Approximately  $90.6 million of the net sales
improvement was  attributable to an increase in frozen  vegetable net sales, and
an additional $44.1 million was associated with various co-pack agreements.  The
Cooperative's overall market share, for the 52-week period ending June 24, 2001,
for frozen  vegetables  approximated 31.4 percent and represented an improvement
of 1.6 points  over the prior  year.  The  Cooperative's  overall  market  share
includes branded retail unit sales, as reported by Information Resources,  Inc.,
and management's  estimate of the  Cooperative's  private label share based upon
factory shipments.

Excluding the gain on sales of assets (net of tax), net income  decreased  $11.4
million  from fiscal  2000.  While the  Cooperative  continues to benefit from a
significant  improvement  in net sales,  it has also  experienced  a significant
increase  in  its  manufacturing  costs.  Increased   manufacturing  costs  were
primarily  associated  with  significantly  higher  freight  and  utility  costs
throughout the nation and lower than anticipated crop intake in the eastern part
of the country. To mitigate the increase in manufacturing costs,  management has
focused efforts on controlling warehousing expenses,  increased branded pricing,
acquired lower cost  inventory from the lender to AgriFrozen,  and has initiated
reductions in selling, administrative,  and general expenses. Management actions
have included  reductions  in certain  marketing  programs and various  employee
incentive  programs.  Management  continues to focus its efforts on cost savings
initiatives to reduce its overall spending.

Management also utilizes an evaluation of EBITDA from  continuing  segments as a
measure  of  performance.  Excluding  businesses  sold or no longer  part of the
Cooperative,  EBITDA from continuing  segments  decreased $12.6 million,  or 9.4
percent,  to $121.8 million in fiscal 2001 from $134.4 million in fiscal 2000. A
detailed  accounting  of the  significant  reasons  for changes in net sales and
EBITDA by product line follows.

Vegetable  net sales  increased  $133.5  million  or 16.0  percent.  Significant
components  associated with this growth include: (a) an improvement in net sales
within the brand business of approximately  $58.2 million;  and (b) increases in
net sales within the nonbranded business of approximately $75.3 million.

Within the branded  businesses,  the increase in Birds Eye frozen vegetables net
sales accounted for  approximately  $42.0 million of the $58.2 million increase.
$27.4 million was a result of volume  improvements  and $14.6 million was due to
pricing initiatives announced in the second half of fiscal 2001. For the 52-week
period ending June 24, 2001,  the total frozen  vegetable  category  retail unit
sales,  as reported by Information  Resources,  Inc.,  were down  slightly,  3.1
percent,  while the Birds Eye brand  retail  unit sales for the same time period
increased 1.9 percent.  Unit sales of the Cooperative's  largest competitor,  as
reported by Information Resources,  Inc., decreased 9.1 percent during this same
time  period.  Net sales for the Birds Eye Voila!  product line  increased  $3.6
million over the prior year,  while Voila!  remained the leading brand with 32.7
percent of the home meal replacement category.

<PAGE>

In addition,  in the fourth quarter of fiscal 2001,  Agrilink Foods  initiated a
national launch of its most recent new product, Simply Grillin'. Simply Grillin'
is a preseasoned  blend of top quality  grilled  Birds Eye  vegetables in a foil
tray. Net sales  associated with this new product were $11.3 million.  Marketing
and  promotional  spending  incurred  with this  introduction  amounted  to $5.9
million.  Management  estimates that Simply Grillin' will achieve $35 million of
net sales in fiscal 2002.

Agrilink Foods' non-branded  vegetable business  experienced volume increases in
private  label and food service  frozen  vegetables  which  accounted  for $27.1
million of net sales growth. The $27.1 million of net sales growth resulted from
the following: (a) increases in Agrilink Foods' recurring private label and food
service  business of $25.0  million;  (b) net sales  increases of $26.2  million
associated  with the inventory  purchased from AgriFrozen  Foods;  (c) offset by
reductions of $24.1 million associated with the conversion of a major club store
customer from a private label to brand product line.

Further, various co-pack agreements for canned vegetables in the Midwest and for
pickles  in the  Northwest  accounted  for an  additional  $44.1  million of the
nonbranded net sales increase.  While these co-pack  agreements  typically yield
lower margins than  Agrilink  Foods' other  product  lines,  they do provide for
greater utilization of manufacturing facilities.

Although  vegetables  experienced  a significant  increase in net sales,  EBITDA
declined $7.9 million. The reduction in EBITDA was primarily driven by increased
manufacturing costs as discussed above.

Net sales for the fruit product line  increased  $6.0  million,  or 5.2 percent,
while EBITDA decreased $1.6 million, or 10.2 percent.  The net sales improvement
was led by increases in private  label net sales of $4.7 million and  additional
co-pack  agreements  resulting in net sales  increases of $1.8  million.  Modest
declines were highlighted in all other categories. Increased manufacturing costs
and continued  competitive  pressures within the applesauce  category,  however,
negatively impacted EBITDA.

Net sales for the snack product line  increased  $7.0  million,  or 7.7 percent.
Improvements  in net sales  within  the  potato  chip  category  increased  $8.4
million,  while the popcorn  product line decreased $1.4 million.  The increases
within the potato chip category were associated with geographic  expansion.  The
improvements  in EBITDA  associated  with  growth in the  potato  chip  category
amounted to $1.4  million,  while  declines in the popcorn  category  negatively
impacted EBITDA by approximately $1.8 million. The popcorn category continues to
be negatively impacted by competitive pressures and changes in product mix.

Net sales for canned meals increased $1.9 million, or 3.0 percent,  while EBITDA
decreased $0.5 million, or 5.8 percent.  EBITDA decreased as a result of changes
in  product  mix  and  increased   manufacturing   costs   associated  with  raw
ingredients,  including beef and utility increases experienced in the Northwest.
All of Agrilink  Foods' canned meal products are produced at the Agrilink Foods'
Tacoma, Washington location.

The other  product line net sales,  primarily  represented  by salad  dressings,
decreased $5.4 million, or 9.6 percent,  while EBITDA decreased $2.2 million, or
33.8 percent. The majority of the net sales decline was associated with the loss
of a private label  customer.  The reduction in EBITDA was associated  with both
the decline in unit volume  associated  with  reductions in private label volume
and increases in manufacturing  costs associated with packaging  ingredients and
utility increases experienced in the Northwest.  All of Agrilink Foods' dressing
products are produced at Agrilink Foods' Tacoma, Washington location.

Operating Income: Operating income from continuing segments decreased from $97.3
million  in fiscal  2000 to $81.2  million in fiscal  2001.  This  represents  a
decrease of $16.1 million or 16.5 percent.  Declines in operating  income within
the vegetable,  fruit,  snacks,  canned meals,  and all other product lines were
$9.7  million,  $2.5  million,  $1.1  million,  $0.1  million and $2.7  million,
respectively.  Significant variances as highlighted above, primarily result from
increased  manufacturing costs,  competitive  pressures,  and changes in product
mix.

Gains on Sales of  Assets:  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 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  the  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. Proceeds of approximately $5.0 million were applied to bank loans.

This  transaction  did not include any other products  carrying the Nalley brand
name.  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
<PAGE>
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.

On December 17, 1999 Agrilink Foods announced they had completed the sale of the
Cambria,  Wisconsin  processing facility to Del Monte. The Cooperative  received
proceeds of approximately $10.5 million which were applied to bank loans. 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.

Income From Joint Venture:  This amount  represents  earnings  received from the
investment in Great Lakes Kraut  Company,  LLC, a joint venture  formed  between
Agrilink Foods and Flanagan Brothers, Inc. The decrease of $0.6 million over the
prior year is attributable to a volume decline, resulting competitive pressures,
and an increase in manufacturing  costs. See further discussion at NOTE 5 to the
"Notes to Consolidated Financial Statements."

Interest Expense: Interest expense increased $1.6 million from the prior year to
$85.1 million. The increase is the result of an increase in the weighted average
interest rate of 45 basis points  resulting from both amendments to the Agrilink
Foods' credit facility during September 2000 and general interest rate increases
on unhedged  borrowings  experienced  in the first six months of fiscal 2001. In
addition,  interest expense was negatively  impacted by the amortization of fees
paid in conjunction  with the September 2000  amendments to the Agrilink  Foods'
credit facility. The increases were offset by lower average outstanding balances
during the fiscal year of approximately $62.6 million, primarily due to required
repayments  and  mandatory   prepayments  of  short-term  debt  associated  with
businesses sold and the elimination of AgriFrozen  business  activity  resulting
from Pro-Fac's  abandonment of its equity interest in AgriFrozen on February 15,
2001.

Tax  Provision:  The tax  provision of $1.0 million in fiscal 2001  represents a
reduction  of $7.5  million  from the prior  year as a result  of the  change in
earnings  before  taxes In  fiscal  2000,  the sale of  certain  intangibles  in
conjunction with the pickle sale negatively impacted the Cooperative's effective
tax rate. The Cooperative's  effective tax rate has historically been negatively
impacted  by  the   non-deductibility  of  certain  amounts  of  goodwill.   The
Cooperative's   effective  tax  rate  is  also  impacted  by  the  net  proceeds
distributed to members.  A further discussion of tax matters is included at NOTE
9 to the "Notes to Consolidated Financial Statements."

                     CHANGES FROM FISCAL 1999 TO FISCAL 2000

During fiscal 2000,  total net sales decreased $14.7 million or 1.1 percent,  to
$1,306.7  million from  $1,292.0  million in fiscal 1999.  Excluding  businesses
sold, net sales increased by $42.4 million,  or 3.8 percent, to $1,160.3 million
from $1,117.9  million in fiscal 1999. The  Cooperative's  overall market share,
for the 52-week period ending June 25, 2000, for frozen vegetables  approximated
29.8 percent.  The  Cooperative's  overall market share includes  branded retail
unit  sales,  as reported  by  Information  Resources,  Inc.,  and  management's
estimate of the Cooperative's private label share based upon factory shipments.

Net income for fiscal 2000 of $16.2 million, however, represented a $0.8 million
decrease  over fiscal  1999 net income of $17.0  million.  Comparability  of net
income is, however, difficult because fiscal 1999 was impacted by gains on sales
of  assets,  a  restructuring  charge,  the  amortization  of debt  issue  costs
associated with the Bridge Facility,  and the extraordinary item relating to the
early extinguishment of debt. In addition, fiscal 2000 results reflect 12 months
of interest  expense versus 9 months in the prior year for the  additional  debt
associated  with the DFVC  Acquisition  which occurred on September 24, 1998 and
additional  debt  associated  with the  Agripac  acquisition  which  occurred on
February 23, 1999.  Accordingly,  management believes,  to summarize results, an
evaluation of EBITDA by continuing  business  segments is  appropriate.  Overall
EBITDA from continuing  segments  increased $39.9 million,  or 42.2 percent,  to
$134.4 million. A detailed  accounting of the significant reasons for changes in
net sales and EBITDA by product line follows.

Vegetable  net sales  increased  $67.2  million or 8.7  percent.  The  vegetable
product line accounts for a $29.6 million increase of the overall EBITDA.  These
improvements are impacted by both the results of the DFVC Acquisition, including
its  impact  on the  percentage  of  branded  sales for  Agrilink  Foods and the
reduction in product costs resulting from  synergistic  savings.  As a result of
the date of the DFVC Acquisition,  the operating results of the acquisition have
been  included for 12 months in fiscal 2000 and for 9 months in fiscal 1999.  In
addition,  as  anticipated  at the  acquisition  date, a greater  percentage  of
Agrilink Foods' sales now come from its branded  products.  The inclusion of the
Birds Eye, Freshlike, and Veg-All brands for 12 months during fiscal 2000 versus
nine  months  of  results  in  fiscal  1999  resulted  in  incremental  sales of
approximately  $90.2 million.  Agrilink  Foods' branded  products yield a higher
margin  than its  private  label  and food  service  categories  and the  EBITDA
improvement  associated  with this increase in branded  sales was  approximately
$12.6  million.  Agrilink  Foods'  earnings also  benefited  from a reduction in
product  costs during  fiscal 2000  primarily  associated  with the  synergistic
savings  achieved from the DFVC  Acquisition  and other  consolidation  efforts.
Specifically, Agrilink Foods benefited from the insourcing of product previously
purchased   from   outside   suppliers,   staffing   reductions,   and  shipping
consolidations.

<PAGE>
Market conditions within the frozen vegetable  category caused by lower consumer
demand and retail  consolidation  did,  however,  offset the increases  outlined
above and  accounted  for  approximately  $23.0  million in net sales  declines.
According to industry data,  for the 52-week  period ended June 25, 2000,  there
was an overall decrease in the total frozen vegetable category of 4.0 percent in
unit  volume,  and for the same  52-week  period,  the  decrease  in the  frozen
vegetable private label category was 4.7 percent in unit volume.

Net sales from the fruit product line decreased $1.4 million, or 1.2 percent, to
$114.4  million  in fiscal  2000 from  $115.8  million in fiscal  1999.  EBITDA,
however,  increased  approximately  $4.9  million.  Increases  in net  sales and
earnings  were  achieved  within  the pie  filling  category  due to a return to
Agrilink  Foods'  historical  pricing  strategy.  However,  net sales within the
applesauce  category  decreased from the prior year due to  competitive  pricing
within the industry. Due to relatively competitive margins within the applesauce
category, however, this reduction in net sales did not have a significant impact
on earnings.  In  addition,  fiscal 1999 results  also  included  spending  $0.9
million for a new product launch. No such costs were incurred in fiscal 2000.

Snacks  showed  an  increase  in  EBITDA  of  $4.0  million   primarily  due  to
improvements  within the potato chip  category.  During  fiscal  2000, a greater
percentage of sales were  associated with the potato chip category which carries
a higher  margin than Agrilink  Foods'  popcorn  product  line.  Declines in the
popcorn category  resulted from both a decrease in volume and pricing  resulting
from increased competition.  In addition, fiscal 1999 results were impacted by a
strike at the Snyder of Berlin  facility.  This action  resulted in  incremental
costs of  approximately  $2.5 million in fiscal 1999.  The matter was settled in
the first quarter of fiscal 2000.  Management believes its current  relationship
with these employees is good.

While  canned meals showed a decline in net sales of $4.1 million in fiscal 2000
primarily  attributable  to a decline in volume in private  label chili,  EBITDA
showed a modest increase of $0.2 million resulting from production  efficiencies
and a reduction in raw product costs including beef.

The other product line, while consisting of dressings,  also includes sales from
the  production of canned  products  primarily for use by the military and other
governmental operations.  While these governmental contracts yield lower margins
than  Agrilink  Foods'  other  product  lines,   they  do  provide  for  greater
utilization  of seasonal  manufacturing  facilities.  The  majority of the $18.8
million  decrease  in net sales is  associated  with the  decline in  government
demand for such canned products. The improvements in EBITDA of $1.2 million over
fiscal  1999  resulted  from the  changes  in product  mix  within the  dressing
category and reductions in raw product costs, including various oils.

Operating  Income:  Operating  income of $108.2 million in fiscal 2000 decreased
approximately  $24.4 million from $132.6  million in fiscal 1999.  Excluding the
impact of businesses sold and other non-recurring  items,  operating income from
continuing  operations  increased  from $65.8  million  in fiscal  1999 to $97.3
million in fiscal 2000.  This represents an improvement of $31.5 million or 47.9
percent.  Improvements in operating income within the vegetable,  fruit, snacks,
canned meals, and all other produt lines were $21.5 million,  $5.5 million, $3.4
million,  $0.2 million,  and $0.9  million,  respectively.  These  increases are
attributable  to the date of and benefits  from the DFVC  Acquisition  and other
repositioning efforts.

Additionally,  while Agrilink Foods  experienced  significant  benefits from its
efforts in 1999 to consolidate  warehouses and other logistics  operations,  the
decline in sales  resulting  from the current  industry  trend caused  inventory
levels to increase.  Storage and handling costs  associated with the increase in
inventory approximated $13 million.

Gains on Sales of  Assets:  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 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  the  Agrilink  Foods'  Revolving  Credit   Facility).   A  gain  of
approximately $4.3 million was recognized on this transaction.

This  transaction  did not include any other products  carrying the Nalley brand
name.  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.

On December 17, 1999 Agrilink Foods announced they had completed the sale of the
Cambria,  Wisconsin  processing facility to Del Monte. The Cooperative  received
proceeds of approximately $10.5 million which were applied to bank loans. A gain
of  approximately  $2.3 million was  recognized  on this  transaction.  The sale
includes  an  agreement  for Del Monte to produce a portion of  Agrilink  Foods'
product needs during the 2000 packing season.
<PAGE>
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.

In  conjunction  with the DFVC  Acquisition,  Agrilink  Foods  sold its  aseptic
business  to Dean  Foods.  The  purchase  price of $80 million was based upon an
appraisal  completed  by an  independent  appraiser.  The  gain on the  sale was
approximately $61.2 million.

Restructuring: Implementation of a corporate-wide restructuring program resulted
in a charge of $5.0 million in the third  quarter of fiscal 1999.  See NOTE 1 to
the "Notes to Consolidated Financial Statements."

Income from Joint Venture:  This amount  represents  earnings  received from the
investment in Great Lakes Kraut  Company,  LLC, a joint venture  formed  between
Agrilink Foods and Flanagan Brothers, Inc. on July 1, 1997. The decrease of $0.4
million over the prior year is attributable  to the sale of assets.  See further
discussion at NOTE 5 to the "Notes to Consolidated Financial Statements."

Interest  Expense:  Interest expense increased $16.1 million to $83.5 million in
fiscal  2000 from $67.4  million in fiscal  1999.  The  increase  in interest is
associated with debt utilized to finance the DFVC and Agripac  acquisitions  and
higher  levels  of  seasonal  borrowings  to  fund  additional  working  capital
requirements associated with the increase in the Cooperative's size. As a result
of the date of the DFVC  Acquisition,  interest expense has been included for 12
months in fiscal 2000 and 9 months in fiscal 1999.  In addition,  as a result of
the Agripac  acquisition,  interest  expense has been  included for 12 months in
fiscal 2000 and 4 months in fiscal 1999.  This increase is also  associated with
an overall  increase in prevailing  interest  rates which occurred over the last
year.

Amortization of Debt Issue Costs Associated with the Bridge  Facility:  In order
to consummate the DFVC  Acquisition,  Agrilink Foods entered into a $200 million
bridge loan facility  (the "Bridge  Facility").  The Bridge  Facility was repaid
with the proceeds from the new senior  subordinated note offering (see NOTE 8 to
the "Notes to Consolidated  Financial  Statements" - "Debt - Senior Subordinated
Notes 11-7/8 Percent due 2008").  Debt issuance costs associated with the Bridge
Facility were $5.5 million and were fully amortized during the second quarter of
fiscal 1999.

Tax  Provision:  The tax  provision of $8.5 million in fiscal 2000  represents a
reduction of $16.2 million from the prior year. Of this decrease,  $25.2 million
is attributable to the provision associated with the fiscal 1999 gain on sale of
the aseptic  operations and the tax benefit of $2.1 million  associated with the
amortization  of debt issue costs also in fiscal 1999. In fiscal 2000,  the sale
of certain  intangibles in conjunction with the pickle sale negatively  impacted
the Cooperative's  effective tax rate. As previously outlined, the Cooperative's
effective  tax  rate  has   historically   been   negatively   impacted  by  the
non-deductibility  of certain amounts of goodwill.  The Cooperative's  effective
tax rate is also impacted by the net proceeds  distributed to members. A further
discussion  of tax matters is  included at NOTE 9 to the "Notes to  Consolidated
Financial Statements."

Extraordinary  Item Relating to the Early  Extinguishment of Debt:  Concurrently
with  the  DFVC  Acquisition,   Agrilink  Foods  refinanced  its  then  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
income taxes of $10.4 million).

                         LIQUIDITY AND CAPITAL RESOURCES

The following  discussion  highlights  the major  variances in the  Consolidated
Statement of Cash Flows for fiscal 2001 compared to fiscal 2000.

Net cash  provided  by  operating  activities  of $50.2  million in fiscal  2001
increased $58.6 million from the fiscal 2000 net cash used in operations of $8.4
million.  This change primarily resulted from a reduction in inventory resulting
from the sale of the private  label canned  vegetable  and pickle  businesses in
November 1999 and June 2000, respectively. In addition, reductions in the fiscal
2001 inventory intake resulted from poor agricultural  conditions in the eastern
part of the country.  The  reduction in inventory  levels also impacted the cash
used to liquidate  accounts  payable and other accruals.  The change in accounts
receivable  is  offset  by a change  in  accruals  associated  with  promotional
activity recorded within accounts payable and accrued expenses.

The purchase of inventory by Agrilink  Foods from  AgriFrozen had no significant
impact on  operating  cash flow as the increase in  inventories  was offset by a
corresponding increase in accounts payable. The purchase price of the AgriFrozen
inventory was $31.6  million,  of which $10.0 million was paid on April 1, 2001,
and the remaining  balance was paid on August 1, 2001.  See NOTE 4 to the "Notes
to Consolidated Financial Statements.

Net cash used in investing activities was significantly  impacted by the sale of
the Cambria,  Wisconsin  facility and the private  label  canned  vegetable  and
pickle  business  dispositions  in fiscal 2000.  The  activities  accounted  for
approximately  $63.2 million in proceeds in fiscal 2000. Proceeds from disposals

<PAGE>
in fiscal 2001 amounted to $5.8 million and were primarily  associated  with the
sale of equipment  utilized in production of pickles and other related  products
to Dean Pickle and Specialty  Products.  The  Company's  investment in property,
plant and equipment remained relatively unchanged during fiscal 2001, decreasing
$0.8 million. Property, plant and equipment purchases were for general operating
purposes.

Net cash used in financing  activities decreased by $2.2 million. The change was
primarily  due to lower levels of borrowings  under  Agrilink  Foods'  Revolving
Credit Facility.

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,
the 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 London Interbank Offered Rate
("LIBOR")  plus,  in  each  case,  applicable  margins  of:  (i) in the  case of
alternate base rate loans, (x) 1.25 percent for loans under the Revolving Credit
Facility  and the Term A Facility,  (y) 3.00  percent for loans under the Term B
Facility  and (z) 3.25  percent for loans under the Term C Facility  and (ii) in
the case of LIBOR loans,  (x) 3.00 percent for loans under the Revolving  Credit
Facility  and the Term A Facility,  (y) 4.00  percent for loans under the Term B
Facility  and (z)  4.25  percent  for  loans  under  the  Term C  Facility.  The
Administrative  Agent's  "alternate base rate" is defined as the greater of: (i)
the prime commercial rate as announced by the  Administrative  Agent or (ii) the
Federal Funds rate plus 0.50 percent. 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.

Upon  consummation  of the DFVC  Acquisition,  Agrilink  Foods drew $455 million
under the Term Loan Facility,  consisting of $100 million, $175 million and $180
million of loans under the Term A Facility, Term B Facility and Term C Facility,
respectively.  Additionally, Agrilink Foods drew $93 million under the Revolving
Credit  Facility for seasonal  working capital needs and $14.3 million under the
Revolving  Credit  Facility  was issued for letters of credit.  During  December
1998,  Agrilink  Foods'  primary  lender  exercised  its right  under the Credit
Facility to transfer $50 million from the Term A Facility to the Term B and Term
C Facilities in increments of $25 million.

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 pickle machinery
and  equipment.  In addition,  during fiscal 2001,  principal  payments of $13.5
million were made on the Term Loan facilities.

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  current
and future subsidiaries (excluding AgriFrozen), 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
<PAGE>
coverage  ratio,  a maximum  consolidated  leverage ratio and a minimum level of
consolidated net worth. Under the Credit Facility, the assets, liabilities,  and
results of  operations  of  AgriFrozen  are not  consolidated  with  Pro-Fac for
purposes of determining compliance with the covenants. In August 2001, September
2000, and August 1999,  Agrilink  Foods entered into  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.

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 used to consummate the DFVC Acquisition,  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 note
is accrued  quarterly in arrears  commencing  December  31, 1998,  at a rate per
annum  of 5  percent  until  November  22,  2003,  and at a rate  of 10  percent
thereafter.  As the stated  rates on the note are below market  value,  Agrilink
Foods has imputed the appropriate  discount utilizing an effective interest rate
of 11-7/8 percent. Interest accruing through November 22, 2003 is required to be
paid in kind through the issuance by Agrilink  Foods of additional  subordinated
promissory   notes  identical  to  the  note.   Agrilink  Foods  satisfied  this
requirement  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 notes may be prepaid  at  Agrilink  Foods'  option
without premium or penalty.

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

On December 1, 2000, Dean Foods sold the Subordinated  Note to Great Lakes Kraut
Company,  LLC, a joint venture between the Company 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.
<PAGE>
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  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.

OTHER MATTERS

Capital  Expenditures:  Agrilink Foods anticipates that capital expenditures for
fiscal years 2002 and 2003 will be approximately  $20 million to $25 million per
annum.  Agrilink  Foods  believes that cash flow from  operations and borrowings
under bank facilities will be sufficient to meet its liquidity  requirements for
the foreseeable future.

Short- and Long-Term  Trends:  Throughout  fiscal 2001 and 2000, the Cooperative
has focused on its core businesses and growth  opportunities.  During the fourth
quarter of fiscal 2001,  Agrilink Foods  initiated a national launch of its most
recent new product, Birds Eye Simply Grillin'.  Simply Grillin' is a preseasoned
blend of top quality Birds Eye vegetables in a foil tray.  Net sales  associated
with this new product were $11.3  million.  Management  estimates that Birds Eye
Simply  Grillin'  will achieve $35 million of net sales in fiscal  2002.  During
fiscal 1999, Agrilink Foods acquired the frozen and canned vegetable business of
Dean Foods.  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.  A
complete  description of the  acquisition and disposal  activities  completed is
outlined at NOTE 3 to the "Notes to Consolidated Financial Statements."

The vegetable and fruit portions of the business can be positively or negatively
affected  by weather  conditions  nationally  and the  resulting  impact on crop
yields.  Favorable  weather  conditions  can  produce  high crop  yields  and an
oversupply  situation.  This  results in  depressed  selling  prices and reduced
profitability on the inventory  produced from that year's crops.  Excessive rain
or drought conditions can produce low crop yields and a shortage situation. This
typically  results in higher selling prices and increased  profitability.  While
the  national  supply  situation  controls  the  pricing,  the supply can differ
regionally because of variations in weather.

The crop and yield resulting from the 2000 growing season,  while  significantly
lower than anticipated in the eastern part of the country, proved to be adequate
throughout the industry.  However,  the weather  conditions which  significantly
impacted corn yields did result in higher pricing for this commodity.

For the 2001 crop season,  dry weather  conditions in the Company's New York and
Midwest growing regions may negatively impact  production costs.  Management has
initiated  cost  reduction  steps,  and is  actively  pursuing  additional  cost
reduction initiatives in order to fully offset any crop-related  production cost
increases.

Supplemental  Information  on Inflation:  The changes in costs and prices within
the Company's  business due to inflation were not  significantly  different from
inflation in the United States economy as a whole. Levels of capital investment,
pricing and inventory  investment were not materially affected by changes caused
by inflation.

New  Accounting  Pronouncements:  In July 2000,  the Emerging  Issues Task Force
("EITF") of the  Financial  Accounting  Standards  Board  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 in the third
quarter of fiscal 2002,  however,  Agrilink Foods anticipates it will adopt this
pronouncement in the first quarter of fiscal 2002.

<PAGE>

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  addresses  the  accounting
treatment and income  statement  classification  for certain  sales  incentives,
including cooperative advertising arrangements, buydowns, and slotting fees. The
consensus  requires that such amounts,  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  Cooperative  is currently  reviewing this
pronouncement  to  determine  the  dollar  value  of the  reclassification.  The
adoption of EITF 00-25 will not impact the Cooperative's profitability.

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.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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.

Foreign  Currency:  Agrilink  Foods  manages its foreign  currency  related risk
primarily through the use of foreign currency forward  contracts.  The contracts
held by the 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.  The fair value of these 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.

                                                          Foreign Currency
                                                               Forward
                                                          -----------------
Contract amounts                                          124 million Pesos
Weighted average settlement exchange rate                     10.7966%

Commodity  Prices:  Agrilink Foods is exposed to commodity price risk related to
forecasted  purchases of soybean oil, an ingredient in the  manufacture of salad
dressings and  mayonnaise.  To mitigate  this risk,  Agrilink  Foods  designates
soybean oil forward contracts as cash flow hedges of its forecasted  soybean oil
purchases.   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 was 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  designates 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  designates a swap agreement as a cash flow
hedge  of  its   forecasted   corrugated   purchases.   Agrilink   Foods  hedged
approximately 80 percent of its planned corrugated  requirements.  The 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 the  Company's  long-term
borrowings  are  variable  rate  instruments.  Agrilink  Foods  entered into two
interest  rate swap  contracts  under which the company  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
<PAGE>

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 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 into interest expense over the life of the
hedge.  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, an after-tax loss of $0.4 million, was reported in earnings.

The following is a summary of Agrilink Foods' interest rate swap agreements:

                                                            June 30, 2001
                                                        ---------------------
Interest Rate Swap:
Variable to Fixed - notional amount                         $250 million
Average pay rate                                            4.96 - 5.32%
Average receive rate                                    Floating rate - 4.85%
Maturities through                                          October 2001

In a declining  interest  rate market,  the  benefits of the hedge  position are
minimized,  however,  Agrilink Foods  continues to monitor market  conditions to
adjust its hedging position as it considers necessary.

<TABLE>
ITEM 8.       FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                          INDEX TO FINANCIAL STATEMENTS

<CAPTION>
    ITEM                                                                                                                     Page

<S>                                                                                                                           <C>
Pro-Fac Cooperative, Inc. and Consolidated Subsidiaries:
   Management's Responsibility for Financial Statements....................................................................   27
   Report of Independent Accountants.......................................................................................   28
   Consolidated Financial Statements:
     Consolidated Statements of Operations, Net Proceeds, and Comprehensive Income for the years ended June 30, 2001,
       June 24, 2000, and June 26, 1999....................................................................................   29
     Consolidated Balance Sheets as of June 30, 2001 and June 24, 2000.....................................................   30
     Consolidated Statements of Cash Flows for the years ended June 30, 2001, June 24, 2000, and June 26, 1999.............   31
     Consolidated Statements of Changes in Shareholders' and Members' Capitalization and Redeemable Stock
       for the years ended June 30, 2001, June 24, 2000, and June 26, 1999.................................................   33
     Notes to Consolidated Financial Statements............................................................................   34
     Selected Quarterly Financial Data.....................................................................................   63
</TABLE>
<PAGE>












              MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS




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

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

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

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



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


                                           Treasurer
                                           Pro-Fac Cooperative, Inc.
    August 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             0        57,563          627       (58,190)              0
Selling, administrative, and general expenses            (11)     (339,643)      (12,966)      (3,226)       57,563        (298,283)
Income from joint venture                                  0         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>
NOTE 14. OTHER MATTERS

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

Commitments:  Agrilink Foods has guaranteed an approximate $1.8 million loan for
the City of Montezuma to renovate a sewage treatment plant operated in Montezuma
on behalf of the City.
<PAGE>


                            Pro-Fac Cooperative, Inc.
                      Quarterly Financial Data (Unaudited)

Quarterly  financial  information  for the fiscal  years ended June 30, 2001 and
June 24, 2000 appears in the following  table. The fourth quarter of fiscal 2001
reflects 14 weeks and all other quarters reflect 13-week periods.

In the opinion of management,  all adjustments necessary for a fair presentation
of the unaudited quarterly data have been made.

<TABLE>
<CAPTION>
(Dollars in Thousands Except Per Share)

                                                                                   Quarters
                                                 ---------------------------------------------------------------------------------
Fiscal 2001                                           1                 2                3                 4            Total Year
                                                 ----------       ----------        -----------      -----------       -------------

<S>                                              <C>             <C>                <C>              <C>               <C>
Net sales                                        $  314,689      $   392,192        $  313,220       $  319,110        $ 1,339,211
Gross profit                                     $   85,650      $   116,859        $   95,116       $   85,404        $   383,029
Pretax income/(loss) before dividends,
     and allocation of net proceeds              $       62      $    12,560        $      179       $  (11,349)       $     1,452
Net (loss)/income                                $     (781)     $     9,239        $     (541)      $   (7,433)       $       484
Cash dividends declared per share on
   Class A Cumulative Preferred Stock            $      .43      $        .43       $       .43      $       .43       $      1.72
Market price per share on Class A
   Cumulative Preferred Stock (Nasdaq)
     High                                        $  17.625       $    17.000        $  16.750        $   18.500        $    18.500
     Low                                         $  14.313       $    15.250        $  15.250        $   16.250        $    14.313

(Dollars in Thousands Except Per Share)

                                                                                   Quarters
                                                 ---------------------------------------------------------------------------------
Fiscal 2000                                           1                 2                3                 4            Total Year
                                                 ----------       ----------        -----------      -----------       -------------

Net sales                                        $  307,701      $   390,481        $  309,174       $  299,303        $ 1,306,659
Gross profit                                     $   85,592      $   128,932        $   90,877       $   82,229        $   387,630
Pretax income before dividends,
     and allocation of net proceeds              $    1,448      $    19,113        $    1,991       $    2,109        $    24,661
Net income                                       $      403      $    14,480        $      925       $      356        $    16,164
Cash dividends declared per share on
   Class A Cumulative Preferred Stock            $      .43      $        .43       $       .43      $       .43       $      1.72
Market price per share on Class A
   Cumulative Preferred Stock (Nasdaq)
     High                                        $  19.500       $    19.125        $  16.953        $   16.953        $    19.500
     Low                                         $  18.500       $    17.500        $  13.875        $   14.875        $    13.875
</TABLE>

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

Not applicable.


<PAGE>


                                    PART III

ITEM 10. DIRECTORS AND OFFICERS

<TABLE>
                                 MANAGEMENT AND DIRECTORS OF PRO-FAC

                                    Date
          Name                    of Birth                                Positions
------------------------          --------           --------------------------------------------------------

<S>                                 <C>              <C>
Bruce R. Fox                        1947             Director and Chairman of the Board, President
Steven D. Koinzan                   1948             Director and Vice Chairman of the Board, Vice President
Tom R. Croner                       1942             Director
Earl L. Powers                      1944             Treasurer
Stephen R. Wright                   1947             Secretary and General Manager
Dale W. Burmeister                  1940             Director
Peter R. Call                       1956             Director
Glen Lee Chase                      1937             Director
Kenneth A. Dahlstedt                1954             Director
Robert DeBadts                      1957             Director
Kenneth A. Mattingly                1948             Director
Allan W. Overhiser                  1960             Director
Paul E. Roe                         1939             Director
Darell Sarff                        1949             Director
</TABLE>

Bruce R.  Fox has  been a  Director  of  Pro-Fac  since  1974.  For  information
regarding Mr. Fox, see "Management and Directors of Agrilink Foods."

Steven D.  Koinzan has been a Director of Pro-Fac  since 1983.  For  information
regarding Mr. Koinzan, see "Management and Directors of Agrilink Foods."

Tom R. Croner has been a Director of Pro-Fac  since 1985 and a member of Pro-Fac
since  1973.  Mr.  Croner is a dairy and potato  farmer  (T-Rich  Inc.;  Berlin,
Pennsylvania).

Earl L.  Powers  has been an  officer of Pro-Fac  since  1997.  For  information
regarding Mr. Powers, see "Management and Directors of Agrilink Foods."

Stephen  R.  Wright has been an  officer  of  Pro-Fac  since  March 1995 and was
elected as Secretary in June 1999.  Mr.  Wright  previously  served as Assistant
General  Manager.  For  information  regarding Mr. Wright,  see  "Management and
Directors of Agrilink Foods."

Dale W.  Burmeister  has been a Director  of Pro-Fac  since 1992 and a member of
Pro-Fac since 1974. Mr.  Burmeister is a fruit and vegetable  grower  (Lakeshore
Farms, Inc.; Shelby, Michigan).

Peter R. Call was elected a Director of Pro-Fac in February  2000. Mr. Call is a
vegetable and grain farmer (My-T Acres, Inc., Batavia, New York).

Glen Lee Chase has been a Director of Pro-Fac since 1989 and a member of Pro-Fac
since 1984. Mr. Chase is a peanut,  poultry,  grain and vegetable  farmer (Chase
Farms Inc.; Oglethorpe, Georgia).

Kenneth A.  Dahlstedt was elected a Director of Pro-Fac in February 1998 and has
been a member of Pro-Fac since 1983.

Robert  DeBadts was elected a Director of Pro-Fac in January 1997 and has been a
member of Pro-Fac since 1978.  Mr.  DeBadts is a fruit grower (Lake Breeze Fruit
Farms, Inc.; Sodus, New York).

Kenneth A.  Mattingly  has been a Director of Pro-Fac since 1993 and a member of
Pro-Fac  since 1978.  Mr.  Mattingly is a vegetable  and grain farmer (M-B Farms
Inc.; LeRoy, New York).

Allan W.  Overhiser has been a Director of Pro-Fac since March 1994 and a member
of Pro-Fac since 1984. Mr. Overhiser is a fruit farmer (A.W. Overhiser Orchards;
South Haven, Michigan).


<PAGE>



Paul E. Roe has been a Director  of  Pro-Fac  since 1986 and a member of Pro-Fac
since 1961. Mr. Roe is a vegetable,  grain and dry bean farmer (Roe Acres, Inc.;
Bellona, New York).

Darell  Sarff was elected a Director of Pro-Fac in February  1997 and has been a
member of Pro-Fac since 1988.  Mr. Sarff is a grain and vegetable  farmer (Sarff
Farms; Chandlerville, Illinois).

Term of Office:  Directors  of Pro-Fac  are elected for  three-year  terms,  and
one-third of the directors are elected annually. Officers of Pro-Fac are elected
for one-year terms.

                   MANAGEMENT AND DIRECTORS OF AGRILINK FOODS

Management and  Directors:  Effective upon  consummation  of the  acquisition of
Agrilink  Foods by Pro-Fac,  Pro-Fac  established  a  management  structure  for
Agrilink Foods,  providing for a Board of Directors consisting of one management
director,  Pro-Fac  Directors and Disinterested  Directors.  The Chairman of the
Board is a Pro-Fac Director.  The management and directors are listed below. The
Cooperative  may in the future  expand the Board of  Directors,  but Pro-Fac has
undertaken to cause the  Cooperative  to maintain a Board on which the number of
Pro-Fac  Directors does not exceed the number of  Disinterested  Directors.  The
Senior Subordinated Notes - 11-7/8 Percent (due 2008) provide that there will be
a Change of Control  if,  for a period of 120  consecutive  days,  the number of
Disinterested  Directors on the Board of Directors  of the  Cooperative  is less
than the  greater  of (i) two and  (ii) the  number  of  directors  who are also
directors,  members  or  affiliates  of the  Cooperative.  The  Credit  Facility
provides  that  there  will be a change of  control  if the  number  of  Pro-Fac
directors exceeds the number of disinterested directors.

Set forth below is certain information concerning the individuals who serve as
directors and officers of Agrilink Foods.
<TABLE>

                                       Year of
       Name                             Birth                              Positions
------------------------------        ---------     ------------------------------------------------------

<S>                                     <C>          <C>
Dennis M. Mullen(1)                     1953         President and Chief Executive Officer and Director

Earl L. Powers                          1944         Executive Vice President and Chief Financial Officer

Stephen R. Wright                       1947         Executive Vice President - Agriculture and Secretary

Carl W. Caughran                        1953         Executive Vice President - Operations

John R. Clark                           1959         Executive Vice President - Logistics

Bernhard H. Frega                       1951         Executive Vice President - Sales and Marketing

David M. Mehalick                       1956         Vice President and General Counsel

Bruce R. Fox(2)                         1947         Director and Chairman of the Board

Steven D. Koinzan(2)                    1948         Director and Vice Chairman of the Board

Cornelius D. Harrington, Jr.(3)         1927         Director

Paul E. Roe(2)                          1939         Director

Walter F. Payne(3)                      1936         Director

James A. Pierson(3)                     1937         Director

Frank M. Stotz(3)                       1930         Director

<FN>
(1) Management Director.

(2) Pro-Fac Director.

(3) Disinterested Director.
</FN>
</TABLE>


Dennis M.  Mullen  has been the  President  and Chief  Executive  Officer  since
January  1997 and a Director  of  Agrilink  Foods  since May 1996.  He was Chief
Operating  Officer from May 1996 to January 1997 and  Executive  Vice  President
from January 1996 to May 1996. He had been President and Chief Executive Officer
of Curtice Burns Foods from March 1993 to May 1996. He was Senior Vice President
and Business Unit Manager Food Service of Curtice Burns Foods from 1991 to 1993,
and Senior Vice President-

<PAGE>
Custom  Pack  Sales for  Nalley  from  1990 to 1991.  Prior to  employment  with
Agrilink Foods,  he was President and Chief Executive  Officer of Globe Products
Company. He currently serves on the Board of Directors for Grocery Manufacturers
of  America,  National  Food  Processors  Association,  United  Way  of  Greater
Rochester,  Genesee Valley  American  Heart  Association,  St. Leo College,  the
Rochester  Institute of Technology  School of Food, Hotel,  Travel  Management's
National Advisory Board, and Chase Manhattan Bank's Northeast Advisory Board.

Earl L. Powers has been  Executive Vice  President and Chief  Financial  Officer
since February 1997. He was Vice President and Corporate  Controller  from March
1993 to February  1997, and Vice  President  Finance and Management  Information
Systems,  Curtice Burns Foods business unit of Agrilink Foods from 1991 to March
1993.  Prior to joining  Agrilink Foods, he was Controller of various  Pillsbury
Company divisions 1987-1990 and various other executive  management positions at
the Pillsbury Company  1976-1987.  He currently serves on the Board of Directors
of Chase Manhattan Bank's Northeast Advisory Board.

David M.  Mehalick  joined  Agrilink  Foods  May 1, 1999 as Vice  President  and
General  Counsel.  Prior to employment  with Agrilink Foods, he practiced law in
the firm of Harris Beach & Wilcox from 1981 to 1999.

Carl W. Caughran has been Executive  Vice President - Operations  since 1999. He
has also served as President and CEO of Nalley Fine Foods from 1996-1999.  Prior
to joining the Company,  he held various  executive  positions at Borden  Foods,
including  Vice  President/General  Manager of both the Western  Snack Group and
Eastern Snack Group.

Stephen R. Wright has been Executive  Vice President  since November 6, 1996. He
was Senior Vice President - Procurement of Agrilink Foods from November 1994 and
Vice  President -- Procurement  for Agrilink Foods from 1990 to November,  1994,
having  served as  Director  of  Commodities  and  Administration  Services  for
Agrilink Foods from 1988 to 1990.

John R. Clark has been Executive  Vice President - Logistics  since 1999. He has
in excess of 20 years experience in logistics and supply chain management. Prior
positions  include vice  president/operations  for Missouri  Nebraska Express in
1984;  executive vice president of operations for Dean Foods  Transportation Co.
in 1989; and vice president logistics for Dean Foods Vegetable Company (DFVC) in
1992.

Bernhard H. Frega has been Executive Vice President - Sales and Marketing  since
1999. He has over twenty-five  years  experience with Agrilink Foods,  including
vice  president  roles for private label and consumer  products for the Comstock
Michigan  Fruit  Division and was  executive  vice  president and COO of Curtice
Burns from 1995 to 1999.

Bruce R. Fox has been a Director of Agrilink  Foods since the  completion of the
Pro-Fac acquisition of Agrilink Foods and in fiscal 2000 was elected Chairman of
the Board.  He has been a Director of Pro-Fac  since 1974.  He was  Treasurer of
Pro-Fac from 1984 until March 27, 1995,  when he was elected  President.  He has
been a member of Pro-Fac  since 1974.  Mr. Fox is a fruit and  vegetable  grower
(N.J. Fox & Sons, Inc., Shelby, MI).

Cornelius D. Harrington,  prior to his retirement,  was President of the Bank of
New  England-West  in  Springfield,  MA and a  predecessor  to the  Bank  of New
England-West  from 1978 to December 1990. He was Chief Executive  Officer of the
Bank of New  England-West  from 1984 to December 1990.  Until 1987, he served as
Chairman of the Board of Directors of BayState  Medical  Center in  Springfield,
MA. He is a former Director of the Farm Credit Bank of Springfield since January
1994.

Steven D. Koinzan has been a Director of Agrilink  Foods since the completion of
the Pro-Fac  acquisition  of Agrilink  Foods and in fiscal 2000 was elected Vice
Chairman  of the board.  He has been a Director of Pro-Fac  since  1983.  He was
Secretary of Pro-Fac  from March 1993 until March 27, 1995,  when he was elected
Treasurer. He has been a member of Pro-Fac since 1979. Mr. Koinzan is a popcorn,
field corn and soybean farmer (Koinzan Farms; Norden, Nebraska).

Walter F. Payne has been a Director of the Company since January 1996. Mr. Payne
was  President  and Chief  Executive  Officer of Blue Diamond  Growers from 1992
until 2001, when he retired.  He held various  positions at Blue Diamond Growers
between  1973 to 1992.  Mr. Payne serves on the Boards of Directors of Healthnet
of California,  Pacific Coast Building and Products, and Pride Industries. He is
currently  Chairman of the  California  State Chamber of Commerce as well as the
Committee for Small Business and  Agriculture  for the Federal  Reserve  Western
District.

James A.  Pierson was elected as a Director of the Company  during  fiscal 2001.
Mr. Pierson  retired in 2001 from his position as President and Chief  Operating
Officer  of  CoBank.   He  held  various  positions  at  Farm  Credit  Banks  of
Springfield,  Massachusetts between 1975 and 1994, including President and Chief
Executive  Officer  from 1987 to 1994.  He is  currently a member of the Bennett
Roundtable  of the Farm  Foundation  and served as a Director of the Farm Credit
System Funding Corporation and the National Council of Farmer Cooperatives.

Paul E. Roe was elected a Director of Agrilink Foods in fiscal 2000. He has been
a Director of Pro-Fac since 1986 and a member of Pro-Fac since 1961.  Mr. Roe is
a vegetable, grain and dry bean farmer (Roe Acres, Inc.; Bellona, New York).
<PAGE>

Frank M. Stotz has been a Director of Agrilink Foods since the completion of the
Pro-Fac  acquisition  of  Agrilink  Foods.  Mr.  Stotz  retired in 1994 from his
position  as Senior  Vice  President  - Finance  of Bausch & Lomb  Incorporated.
Before  joining  Bausch & Lomb in that capacity in 1991, Mr. Stotz was a partner
for 25 years with Price Waterhouse (now PricewaterhouseCoopers LLP).

Term of Office:  All directors of Agrilink  Foods will hold office from the date
of election  until the next  annual  meeting of the  shareholder  or until their
successors  are duly elected and qualified.  Each executive  officer of Agrilink
Foods will hold office from the date of election  until his successor is elected
or appointed.

There are no family  relationships  between any Director,  executive officer, or
any  person  nominated  or chosen by  Agrilink  Foods to  become a  Director  or
executive officer.

Involvement in Certain Legal  Proceedings:  The following  executive officers of
Agrilink Foods were  previously  officers of PF  Acquisition  II, Inc., a former
subsidiary of Pro-Fac:  Dennis M. Mullen, Earl L. Powers, Stephen R. Wright, and
David M. Mehalick.  On June 27, 2001, PF  Acquisition  II, Inc. filed a petition
under the federal bankruptcy laws.

ITEM 11. EXECUTIVE COMPENSATION

The following tables show the cash compensation and certain other components of
the compensation of the chief executive officer and four other most highly
compensated executive officers of the Cooperative, earned during fiscal years
ended June 30, 2001, June 24, 2000, and June 26, 1999 (collectively, the "Named
Executive Officers").

<TABLE>
Executive Compensation
<CAPTION>
Summary Compensation Table
                                                                                                                        RSIP/
                                                                                                                      Matching
                                                                                          Annual                    Contributions
                                                                                       Compensation1                  Deferred
                                                                                ---------------------------            Profit
Name and Principal Position                                       Year            Salary           Bonus2              Sharing
---------------------------                                       ----          -----------      ---------           -----------

<S>                                                                <C>          <C>              <C>                   <C>
Dennis M. Mullen                                                   2001         $ 600,000        $       0             $  9,808
   President and Chief Executive Officer and Director              2000         $ 525,000        $       0             $  3,173
                                                                   1999         $ 500,000        $       0             $  4,241

Earl L. Powers                                                     2001         $ 305,104        $       0             $  4,444
   Executive Vice President Finance and Chief Financial Officer    2000         $ 283,854        $       0             $  4,125
                                                                   1999         $ 260,096        $       0             $  5,124

David M. Mehalick3                                                 2001         $ 253,067        $  50,000             $  7,289
   Vice President and General Counsel                              2000         $ 241,867        $       0             $      0
                                                                   1999         $  36,923        $       0             $      0

Carl W. Caughran                                                   2001         $ 232,050        $       0             $  6,880
   Executive Vice President - Operations                           2000         $ 218,400        $       0             $  3,276
                                                                   1999         $ 210,600        $       0             $  3,120

Stephen R. Wright                                                  2001         $ 222,685        $       0             $  6,556
   Executive Vice President - Agriculture and Secretary            2000         $ 212,160        $       0             $  3,120
                                                                   1999         $ 205,999        $       0             $  3,762

<FN>
1  No Named Executive Officer has received personal benefits during the period
   in excess of the lesser of $50,000 or 10 percent of annual salary.

2  Pursuant to the Management Incentive Plan of Agrilink Foods (the "Incentive
   Plan"), additional compensation is paid if justified by the activities of the
   officers and employees eligible under the Incentive Plan and by the earnings
   of Agrilink Foods and of Pro-Fac Cooperative, Inc. ("Pro-Fac").

3  Mr. Mehalick's employment with Agrilink Foods began May 1, 1999.
</FN>
</TABLE>



<PAGE>


Long-Term Incentive Plan - Awards in Last Fiscal Year
<TABLE>

                                                                                 Estimated Future Payouts
                                                                             Under Non-Stock Price Based Plans
                               (b)                        (c)                ---------------------------------
                          Number of Shares        Performance or Other           (d)                  (e)
     (a)                   Units or Other        Period Until Maturation      Threshold              Target
     Name                 Rights Granted (1)            or Payout              ($ or #)            ($ or #)(2)
-----------------         ------------------     ------------------------     ---------            -----------

<S>                           <C>                       <C>  <C>                  <C>                  <C>
Dennis M. Mullen              91,977                    6/27/2005                 $0                   $0
Earl L. Powers                34,180                    6/27/2005                 $0                   $0
David M. Mehalick             27,840                    6/27/2005                 $0                   $0
Carl Caughran                 23,910                    6/27/2005                 $0                   $0
Stephen R. Wright             22,449                    6/27/2005                 $0                   $0

<FN>
(1)  On June 27, 2001, the Company issued  performance  units under the Agrilink
     Foods Equity Value Plan ("EVP") to a select group of management. The future
     value of the performance units is discretionary. The performance units vest
     100  percent  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 the subsequent three years. The final value of the
     2001 performance units is determined on the fourth anniversary of grant.

(2)  The value of the June 27, 2001 grants from the Agrilink  Foods Equity Value
     Plan is  discretionary.  The beginning value of these performance units was
     set at a level requiring improved earnings and debt-repayment  performance.
     The target  payouts  shown above are based on the value of the  performance
     units at fiscal  2001  earnings  and debt  levels and would yield no payout
     from the plan at those  levels.  If future  performance  equals fiscal 2001
     performance,  no payouts will be made from the plan relative to the options
     granted on June 27, 2001.
</FN>
</TABLE>

Retirement Plans:  Agrilink Foods' Master Salaried Retirement Plan (the "Pension
Plan") provides  defined  retirement  benefits for its officers and all salaried
exempt  and  non-exempt  personnel.  The  compensation  upon  which the  pension
benefits  are  determined  is  included  in the salary  columns of the  "Summary
Compensation Table."

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

The  approximate  number of years of Plan  participation  under Agrilink  Foods'
Pension  Plan as of June 30,  2001,  of the  Executive  Officers  listed  in the
Summary  Compensation  Table  are as  follows:  Dennis  M.  Mullen-11,  Earl  L.
Powers-9, David M. Mehalick-1, Carl W. Caughran-4, and Stephen R. Wright-26.

Agrilink  Foods  maintains  an Excess  Benefit  Retirement  Plan which serves to
provide employees with the same retirement benefit they would have received from
Agrilink  Foods' Master  Salaried  Retirement Plan under the career average base
pay  formula,  but for  changes  required  under the 1986 Tax Reform Act and the
compensation  limitation under Section  401(a)(17) of the Internal Revenue Code,
which was  $150,000 on January 1, 1994,  having been revised in the 1992 Omnibus
Budget Reform Act. This benefit plan was amended in December 2000.

In  fiscal  2001,  Agrilink  Foods  adopted  a  non-tax  qualified  Supplemental
Executive Retirement Plan ("SERP") which provides additional retirement benefits
to Agrilink  Foods' Chief Executive  Officer.  Agrilink Foods has not pre-funded
this  liability  at  June  30,  2001.  The  projected  and  accumulated  benefit
obligation under the plan at June 30, 2001 was $353,000.

<PAGE>

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

                                  Years of Plan Participation
    Final      -------------------------------------------------------------
 Average Pay        15            20           25         30           35
 -----------   ------------  ---------    ---------   ---------    ---------

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

Termination Protection  Provisions:  Agrilink Foods has adopted a revised Salary
Continuation  Agreement for Mr. Mullen on August 22, 2001, whereby, two years of
salary and benefits  continuation will be provided if Mr. Mullen's employment is
involuntarily  terminated  for  reasons  other than for  "cause" as such term is
defined in the Agreement.

Directors' Compensation: In fiscal 2001, non-employee directors as designated by
Pro-Fac  received an annual  stipend of $20,000 to $25,000 per year. The Pro-Fac
Chairman  received  an annual  stipend of $40,000  per year.  All  disinterested
directors,  Messrs.  Harrington,  Payne,  and Stotz,  received an annual rate of
$35,000.  Directors  received an additional  $2,000 for committee  chairmanships
when applicable.  Effective  during fiscal 2001,  directors are no longer paid a
per-diem  rate for  meeting  attendance.  Mr.  Pierson,  who joined the Board of
Directors on June 28, 2001 received no payments in fiscal 2001.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information, as of June 30, 2001, with
respect to (i) each person known by Pro-Fac to own beneficially 5 percent or
more of any class of Pro-Fac's voting securities, (ii) each director and named
executive officer of Pro-Fac and (iii) all directors and officers of Pro-Fac as
a group.

<TABLE>

                                                                                    Amount and Nature of                Percent of
       Name                                     Title of Class                    Beneficial Ownership(a)                 Class(b)
-----------------------------------         ----------------------------          -----------------------                ----------

<S>                                         <C>                                            <C>                              <C>
Cherry Central Cooperative, Inc.            Common                                         346,680                          15.36%
   PO Box 988                               Class A Cumulative Preferred                    91,302                           2.03%
   Traverse City, MI 49685

Michigan Blueberry Growers Assoc.           Common                                         116,400                           5.16%
   PO Drawer B                              Class A Cumulative Preferred                    19,259                           0.43%
   Grand Junction, MI 49056

Dale E. Burmeister                          Common                                          11,946(c)                        0.52%
                                            Class A Cumulative Preferred                       657(c)                        0.01%
                                            Class A Cumulative Preferred                    10,348                           0.23%


</TABLE>

<PAGE>

<TABLE>


                                                                                   Amount and Nature of                  Percent of
       Name                                     Title of Class                    Beneficial Ownership(a)                 Class(b)
-----------------------------------         ----------------------------          -----------------------                ----------
<S>                                         <C>                                            <C>                              <C>
Peter R. Call                               Common                                          41,006(d)                        1.81%
                                            Class A Cumulative Preferred                    27,177(d)                        0.60%
                                            Class A Cumulative Preferred                    14,194(e)                        0.32%
                                            Class A Cumulative Preferred                     5,361(f)                        0.12%
                                            Class A Cumulative Preferred                     8,246                           0.18%

Carl W. Caughran                            None                                                 0                           0.00%

Glen Lee Chase                              Common                                           9,472(g)                        0.42%
                                            Class A Cumulative Preferred                     8,174(g)                        0.18%

John R. Clark                               None                                                 0                           0.00%

Tom R. Croner                               Common                                           3,776(h)                        0.17%
                                            Class A Cumulative Preferred                    13,315(i)                        0.30%

Kenneth A. Dahlstedt                        Common                                           7,004                           0.31%
                                            Common                                           1,555(l)                        0.07%
                                            Class A Cumulative Preferred                       330                           0.00%

Robert DeBadts                              Common                                          12,594(j)                        0.56%
                                            Class A Cumulative Preferred                    12,732(j)                        0.28%
                                            Class A Cumulative Preferred                       100(k)                        0.00%

Bruce R. Fox                                Common                                          22,306(m)                        0.99%
                                            Class A Cumulative Preferred                     9,253(m)                        0.21%
                                            Class A Cumulative Preferred                     8,317(n)                        0.19%
                                            Class A Cumulative Preferred                     1,085                           0.02%
                                            Class A Cumulative Preferred                       820                           0.02%

Bernhard H. Frega                           None                                                 0                           0.00%

Steven D. Koinzan                           Common                                           8,280                           0.37%
                                            Class A Cumulative Preferred                     5,235                           0.12%

Kenneth A. Mattingly                        Common                                          11,834(o)                        0.52%
                                            Class A Cumulative Preferred                    11,287(o)                        0.25%

David M. Mehalick                           None                                                 0                           0.00%

Dennis M. Mullen                            None                                                 0                           0.00%

Allan W. Overhiser                          Common                                           2,970(p)                        0.13%
                                            Class A Cumulative Preferred                     2,067(p)                        0.05%

Earl L. Powers                              None                                                 0                           0.00%

Paul E. Roe                                 Common                                          19,590(q)                        0.87%
                                            Class A Cumulative Preferred                     6,538(q)                        0.15%

Darell Sarff                                Common                                           2,616                           0.12%
                                            Class A Cumulative Preferred                     1,846                           0.04%

Stephen R. Wright                           Class A Cumulative Preferred                     1,140                           0.03%

All directors and officers as a group       Common                                         154,949                           6.86%

<PAGE>


<FN>
(a)  Certain of the directors named above may have the  opportunity,  along with
     the  other  members  producing  a  specific  crop,  to  acquire  beneficial
     ownership  of  additional  shares of the common  stock of Pro-Fac  within a
     period of  approximately  60 days,  commencing  each year on February 1, if
     Pro-Fac  determines  that a  permanent  change  is  required  in the  total
     quantity of that particular crop.

(b)  In the above table,  each director who has direct  beneficial  ownership of
     common or  preferred  shares by  reason of being the  record  owner of such
     shares has sole voting and  investment  power with  respect to such shares,
     while  each  director  who has  direct  beneficial  ownership  of common or
     preferred  shares as a result of owning such  shares as a joint  tenant has
     shared voting and investment power regarding such shares. Each director who
     has indirect  beneficial  ownership of common or preferred shares resulting
     from  his  status  as a  shareholder  or a  partner  of  a  corporation  or
     partnership  which is the record  owner of such  shares has sole voting and
     investment power if he controls such corporation or partnership. If he does
     not control  such  corporation  or  partnership,  he has shared  voting and
     investment power. Pro-Fac does not believe that the percentage ownership of
     any such corporation or partnership by a director is material, since in the
     aggregate  no director  beneficially  owns in excess of 5 percent of either
     the common or preferred shares of Pro-Fac.

(c)  Record ownership by Lakeshore Farms, Inc.

(d)  Record ownership by My-T Acres, Inc.

(e)   Record ownership by My-T Acres, Inc. Employee Profit Sharing Plan

(f)  Record ownership by Call Farms, Inc.

(g)  Record ownership by Chase Farms, Inc.

(h)  Record ownership by Richard Croner & Son

(i)  Record ownership by T-Rich, Inc.

(j)  Record ownership by Lake Breeze Farm, Inc.

(k)  Record ownership jointly with spouse

(l)  Record ownership by Ag-Pro, Inc.

(m)  Record ownership by N.J. Fox & Sons, Inc.

(n)  Record ownership by K. Fox

(o)  Record ownership by M-B Farms, Inc.

(p)  Record ownership by A.W. Overhiser Orchards

(q)  Record ownership by Roe Acres, Inc.
</FN>
</TABLE>

Section 16(a) Beneficial Ownership Reporting Compliance:

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Management believes all such transactions were on terms no less favorable to the
Cooperative than could have been reached with unaffiliated third parties.

Borrowings  by Pro-Fac:  The Credit  Facility  and Senior  Subordinated  Notes -
11-7/8 Percent (due 2008) permit  Agrilink Foods to make demand loans to Pro-Fac
for working capital purposes in amounts not to exceed $40.0 million at any time,
each such  loan to bear  interest  at a rate  equal to the rate in effect on the
date of such loan  under the  Revolving  Credit  Facility.  The loan  balance is
required to be reduced to zero for a period of not less than 15 consecutive days
in each fiscal year. Except for the foregoing provision and except for Pro-Fac's
guarantee of the Senior  Subordinated  Notes - 11-7/8 Percent (due 2008) and the
Credit  Facility,  as long as Pro-Fac has the right to borrow  under the Pro-Fac
Marketing and Facilitation  Agreement,  the Senior  Subordinated  Notes - 11-7/8
Percent (due 2008) do not permit Pro-Fac to incur any other indebtedness.

Equity  Ownership in CoBank:  As part of its lending  arrangements  with CoBank,
which  is  a  cooperative,  Pro-Fac  has  made  investments  in  the  bank.  The
Cooperative made these  investments  through (i) a capital  purchase  obligation
equal to a percentage,  set annually  based on CoBank's  capital  needs,  of its
interest  paid to CoBank and (ii) a  patronage  rebate on  interest  paid by the
Cooperative  to CoBank  based on  CoBank's  earnings,  which is paid in cash and
capital  certificates.  As of June 30,  2001,  the  amount of the  Cooperative's
investment in CoBank was approximately $14.7 million.



<PAGE>


Transactions  Between  Agrilink Foods and  AgriFrozen:  Agrilink Foods purchased
frozen  vegetables from  AgriFrozen.  For fiscal 2001, the net sales amounted to
approximately $25.6 million.

In addition,  AgriFrozen  maintained an  administrative  service  agreement with
Agrilink Foods.  Agrilink Foods provided  certain  management,  consulting,  and
administrative  services.  For the year ended June 30, 2001, AgriFrozen incurred
approximately $0.6 million in service fees related to the agreement.

Agrilink  Foods  purchased  the frozen  vegetable  inventory of  AgriFrozen  and
entered into a related  agreement  for storage and  converting  the inventory to
finished  goods on  February  16,  2001.  Refer  to NOTE 4 to the  "Consolidated
Financial Statements" for further discussion of the transaction.

Purchase of Crops From  Pro-Fac:  Each of the members of Pro-Fac  sells crops to
Pro-Fac  pursuant  to a general  marketing  agreement  between  such  member and
Pro-Fac, which crops in turn are sold to the Cooperative pursuant to the Pro-Fac
Marketing  and  Facilitation  Agreement.   During  fiscal  2001,  the  following
directors  and  executive  officers of Pro-Fac  directly or  indirectly  through
entities  owned or  controlled  by such  officers and  directors,  sold crops to
Pro-Fac and provided harvesting, trucking and waste removal services to Agrilink
Foods for the following aggregate amounts:


<TABLE>
<CAPTION>
(Dollars in Thousands)

                                                                     RELATIONSHIP                               GROSS PURCHASES
        NAME                                                         TO PRO-FAC                                  IN FISCAL 2001
------------------------                         --------------------------------------------------------   -----------------------
                                                                                                            (Dollars in Thousands)

<S>                                              <C>                                                               <C>
Dale E. Burmeister...........................    Director                                                          $    446
Peter R. Call................................    Director                                                          $  4,959
Glen Lee Chase...............................    Director                                                          $    213
Tom R. Croner................................    Director and Secretary                                            $     75
Kenneth A. Dahlstedt.........................    Director                                                          $    352
Robert DeBadts...............................    Director                                                          $    449
Bruce R. Fox*................................    Director and Chairman of the Board, President                     $  1,405
Steven D. Koinzan*...........................    Director and Vice Chairman of the Board, Vice President           $    215
Kenneth A. Mattingly.........................    Director                                                          $  2,000
Allan W. Overhiser...........................    Director                                                          $     50
Paul E. Roe*.................................    Director                                                          $    848
Darell Sarff.................................    Director                                                          $     65

<FN>
*    Bruce R. Fox,  Steven D.  Koinzan,  and Paul E. Roe are  directors  of both
     Pro-Fac and Agrilink Foods.
</FN>
</TABLE>

                   DIRECTORS AND OFFICERS LIABILITY INSURANCE

As authorized  by New York law and in accordance  with the policy of that state,
the Cooperative has obtained  insurance from Chubb Group Insurance  insuring the
Cooperative  against any obligation it incurs as a result of its indemnification
of its officers and  directors,  and insuring  such  officers and  directors for
liability  against which they may not be  indemnified by the  Cooperative.  This
insurance  has a term  expiring  on  October  15,  2001,  at an  annual  cost of
approximately  $146,000. As of this date, no sums have been paid to any officers
or directors of the Cooperative under this indemnification insurance contract.



<PAGE>


                                     PART IV

ITEM 14.      EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a) (1)    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                          INDEX TO FINANCIAL STATEMENTS

The following appears in ITEM 8 of this report:

<TABLE>
     ITEM                                                                                                                    Page

<S>                                                                                                                           <C>
Pro-Fac Cooperative, Inc. and Consolidated Subsidiary:
   Management's Responsibility for Financial Statements....................................................................   26
   Report of Independent Accountants.......................................................................................   27
   Consolidated Financial Statements for the years ended
     June 30, 2001, June 24, 2000, and June 26, 1999:
     Consolidated Statements of Operations, Net Proceeds, and Comprehensive Income for the years ended June 30, 2001,
       June 24, 2000, and June 26, 1999....................................................................................   28
     Consolidated Balance Sheet at June 30, 2001 and June 24, 2000.........................................................   29
     Consolidated Statement of Cash Flows for the years ended June 30, 2001, June 24, 2000, and June 26, 1999..............   30
     Consolidated Statements of Changes in Shareholders' and Members' Capitalization and Redeemable Stock
       for the years ended June 30, 2001, June 24, 2000, and June 26, 1999.................................................   32
     Notes to Consolidated Financial Statements............................................................................   33
     Selected Quarterly Financial Data.....................................................................................   63


</TABLE>

<PAGE>



         (2)    The following additional financial data are set forth herein:


                  SCHEDULE II:  Valuation and Qualifying Accounts

<TABLE>
                                                                                                           SCHEDULE II
Pro-Fac Cooperative, Inc.
Valuation and Qualifying Accounts

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

<S>                                                                   <C>              <C>                <C>
Allowance for doubtful accounts
   Balance at beginning of period                                     $    998,000     $ 1,607,000        $   774,000
   Additions charged to expense                                            610,000         201,000            208,000
   Deductions                                                             (613,000)       (810,000)          (280,000)
   Change due to abandonment of PF Acquisition II, Inc.***                (152,000)              0                  0
   Increase due to acquisition*                                                  0               0            905,000
                                                                      ------------     -----------        -----------
   Balance at end of period                                           $    843,000     $   998,000        $ 1,607,000
                                                                      ============     ===========        ===========
Inventory reserve**
   Balance at beginning of period                                     $  3,385,000     $ 8,401,000        $   391,000
   Net change                                                             (250,000)     (5,016,000)          (921,000)
   Increase due to acquisition*                                                  0               0          8,931,000
                                                                      ------------     -----------        -----------
   Balance at end of period                                           $  3,135,000     $ 3,385,000        $ 8,401,000
                                                                      ============     ===========        ===========
Tax valuation allowance****
   Balance at beginning of period                                     $  5,752,000     $ 1,409,000        $ 5,550,000
   Net change                                                              139,000       4,343,000         (4,141,000)
                                                                      ------------     -----------        -----------
Balance at end of period                                              $  5,891,000     $ 5,752,000        $ 1,409,000
                                                                      ============     ===========        ===========

<FN>
*    Represents  balance  acquired  in  conjunction  with the  DFVC and  Agripac
     acquisitions.

**   Difference   between  FIFO  cost  and  market  applicable  to  inventories.
     Reductions in the reserve in fiscal 2000 were recorded as related inventory
     was disposed.

***  See further  discussion at NOTE 3 to the "Notes to  Consolidated  Financial
     Statements."

**** See  further  discussion  regarding  tax matters at NOTE 9 to the "Notes to
     Consolidated Financial Statements."

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


<PAGE>


          (3)  The following  exhibits are filed herein or have been  previously
               filed with the Securities and Exchange Commission:

 (b)    Reports on Form 8-K:


                On March 27, 2001, the Company filed a Form 8-K to report on
                financial information presented to attendees at the Lehmann
                Brothers high-yield bond leveraged loan conference.


 (c) EXHIBITS:

   Exhibit
   Number                         Description

     3.1  Restated Certificate of Incorporation of the Company (filed as Exhibit
          3.1 to the  Company's  Quarterly  Report  on Form  10-Q for the  third
          fiscal  quarter  ended  March  27,  1999 and  incorporated  herein  by
          reference).

     3.2  Bylaws of the Company (filed as Exhibit 3.2 to the Company's Quarterly
          Report on Form 10-Q for the third fiscal  quarter ended March 27, 1999
          and incorporated herein by reference).

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

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

     4.3  Indenture,  dated as of November 3, 1994, among PFAC,  Pro-Fac and IBJ
          Schroder  Bank & Trust  Company,  as  Trustee,  as  amended  by  First
          Supplemental  Indenture,  dated as of  November  3,  1994,  each  with
          respect to Agrilink Foods, Inc.'s 12.25% Senior Subordinated Notes due
          2005  (filed as Exhibit  4.1 to Agrilink  Foods,  Inc.'s  Registration
          Statement  on Form S-4  filed  November  14,  1994  (Registration  No.
          33-56517) and incorporated herein by reference).

     4.4  Second Supplemental  Indenture  (amending the Indenture  referenced in
          Exhibit 4.3 herein) dated November 10, 1997 (filed as Exhibit 10.25 to
          the  Company's  Annual  Report on Form 10-K for the fiscal  year ended
          June 27, 1998, and incorporated herein by reference).

     4.5  Third  Supplemental  Indenture  (amending the Indenture  referenced in
          Exhibit 4.3 herein)  dated  September 24, 1998 (filed as Exhibit 10.26
          to the Company's  Annual Report on Form 10-K for the fiscal year ended
          June 26, 1999, and incorporated herein by reference).

     10.1 Marketing and  Facilitation  Agreement,  dated as of November 3, 1994,
          between the  Cooperative  and Agrilink  Foods,  Inc. (filed as Exhibit
          10.1 to Agrilink  Foods,  Inc.'s  Registration  Statement  on Form S-4
          filed November 17, 1994  (Registration  No. 33-56517) and incorporated
          herein by reference).

     10.2 Amendment  to  Marketing  and  Facilitation   Agreement   between  the
          Cooperative and Agrilink  Foods,  Inc. dated September 23, 1998 (filed
          as Exhibit 10.9 to the Company's Quarterly Report on Form 10-Q for the
          third fiscal quarter ended March 27, 1999 and  incorporated  herein by
          reference).

     10.3 Management  Incentive  Plan,  as  amended  (filed as  Exhibit  10.2 to
          Agrilink  Foods,  Inc.'s  Registration  Statement  on Form  S-4  filed
          November 17, 1994 (Registration No. 33-56517) and incorporated  herein
          by reference).

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

     10.5 Master Salaried  Retirement Plan, as amended (filed as Exhibit 10.5 to
          Agrilink  Foods,  Inc.'s  Registration  Statement  on Form  S-4  filed
          November 17, 1994 (Registration No. 33-56517) and incorporated  herein
          by reference).




<PAGE>



(c) EXHIBITS (Continued):

  Exhibit
  Number                              Description

   10.6   Non-Qualified  Profit  Sharing Plan, as amended (filed as Exhibit 10.6
          to Agrilink  Foods,  Inc.'s  Registration  Statement on Form S-4 filed
          November 17, 1994 (Registration No. 33-56517) and incorporated  herein
          by reference).

   10.7   Second  Amendment  to  Non-Qualified  Profit  Sharing  Plan  (filed as
          Exhibit  10.14 to the  Company's  Registration  Statement  on Form S-1
          filed June 15,  1995  (Registration  No.  33-60273)  and  incorporated
          herein by reference).

   10.8   Agrilink  Equity  Value Plan  adopted  June 24, 1996 (filed as Exhibit
          10.17 to the Company's  Annual Report on Form 10-K for the fiscal year
          ended June 29, 1996 and incorporated herein by reference).

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

   10.10  Reciprocal  Co-Pack Agreement with Seneca Foods Corporation  (filed as
          Exhibit  10.23 to the  Company's  Annual  Report  on Form 10-K for the
          fiscal year ended June 28, 1997 and incorporated herein by reference).

   10.11  Credit  Agreement among the  Cooperative,  Agrilink  Foods,  Inc., and
          Harris Trust and Savings Bank, and Bank of Montreal,  Chicago  Branch,
          and the Lenders from time to time party hereto,  dated as of September
          23, 1998 (filed as Exhibit 10.1 to the Company's  Quarterly  Report on
          Form 10-Q for the first fiscal  quarter  ended  September 26, 1998 and
          incorporated herein by reference).

   10.12  Subordinated  Promissory  Note of Agrilink  Foods,  Inc. to Dean Foods
          Company,  dated as of September 23, 1998 (filed as Exhibit 10.3 to the
          Company's  Quarterly  Report on Form 10-Q for the first fiscal quarter
          ended September 26, 1998 and incorporated herein by reference).

   10.13  First  Amendment to the Credit  Agreement  referenced  in 10.11 herein
          (filed as Exhibit 10.1 to the Company's  Amended  Quarterly  Report on
          Form 10-Q/A for the first fiscal quarter ended  September 25, 1999 and
          incorporated herein by reference).

   10.14  Second  Amendment to the Credit  Agreement  referenced in 10.11 herein
          (filed as Exhibit 10.2 to the Company's  Amended  Quarterly  Report on
          Form 10-Q/A for the first fiscal quarter ended  September 25, 1999 and
          incorporated herein by reference).

   10.15  Third  Amendment to the Credit  Agreement  referenced in Exhibit 10.11
          herein  (filed as  Exhibit  10.3 to the  Company's  Amended  Quarterly
          Report on Form 10-Q/A for the first fiscal quarter ended September 25,
          1999 and incorporated herein by reference).

   10.16  Fourth Amendment to the Credit  Agreement  referenced in Exhibit 10.11
          herein  (filed as  Exhibit  10.4 to the  Company's  Amended  Quarterly
          Report on Form 10-Q/A for the first fiscal quarter ended September 25,
          1999 and incorporated herein by reference).

   10.17  Fifth  Amendment to the Credit  Agreement  referenced in Exhibit 10.11
          herein  (filed as  Exhibit  10.5 to the  Company's  Amended  Quarterly
          Report on Form 10-Q/A for the first fiscal quarter ended September 25,
          1999 and incorporated herein by reference).

   10.18  Service  Agreement between Agrilink Foods, Inc. and PF Acquisition II,
          Inc.,  dated as of February  22,  1999  (filed as Exhibit  10.4 to the
          Company's  Quarterly  Report on Form 10-Q for the third fiscal quarter
          ended March 27, 1999 and incorporated herein by reference).

   10.19  Marketing and Facilitation  Agreement,  dated as of February 22, 1999,
          between the  Cooperative and PF Acquisition II, Inc. (filed as Exhibit
          10.5 to the  Company's  Quarterly  Report  on Form  10-Q for the third
          fiscal  quarter  ended  March  27,  1999 and  incorporated  herein  by
          reference).

<PAGE>



(c)  EXHIBITS (Continued):

   Exhibit
   Number                            Description

   10.20  Credit  Agreement  among PF Acquisition II, Inc., the Banks hereto and
          CoBank, ACB, as Administrative Agent for the lender thereunder,  dated
          February  22, 1999 (filed as Exhibit 10.6 to the  Company's  Quarterly
          Report on Form 10-Q for the third fiscal  quarter ended March 27, 1999
          and incorporated herein by reference).

   10.21  Subordinated  Promissory  Note  between PF  Acquisition  II, Inc.  and
          CoBank,  ACB,  dated  February  22, 1999 (filed as Exhibit 10.7 to the
          Company's  Quarterly  Report on Form 10-Q for the third fiscal quarter
          ended March 27, 1999 and incorporated herein by reference).


   10.22  Sixth  Amendment to the Credit  Agreement  referenced in Exhibit 10.11
          herein  (filed as Exhibit 10.1 to the  Company's  quarterly  report on
          Form  10-Q  for the  first  quarter  ended  September  23,  2000,  and
          incorporated herein by reference).

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

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

   10.25  Service  Agreement By and Between  Agrilink  Foods and PF  Acquisition
          II, Inc. (filed as Exhibit 10.29 to the Company's  quarterly report on
          Form 10-Q for the third quarter ended March 23, 2001, and incorporated
          herein by reference).

   10.26  Bill of  Sale  Agreement  By and  Between  Agrilink  Foods,  Inc.  and
          CoBank, ACB (filed as Exhibit 10.30 to the Company's  quarterly report
          on Form  10-Q  for  the  third  quarter  ended  March  23,  2001,  and
          incorporated herein by reference).

   10.27  Salary Continuation Agreement - Dennis M. Mullen (filed herewith).

   10.28  Seventh Amendment to the Credit Agreement  referenced in Exhibit 10.11
          herein (filed herewith).

   18     Accountant's  Report Regarding  Change in Accounting  Method (filed as
          Exhibit  18 to the  Company's  Quarterly  Report  on Form 10-Q for the
          first fiscal quarter ended September 28, 1996 and incorporated  herein
          by reference).

   21     List of  Subsidiaries  (filed as Exhibit 21.1 to the Company's  Annual
          Report on Form 10-K for the year ended June 24, 2000 and  incorporated
          herein by reference).

   23     Accountant's Consent (filed herewith)

   24     Power of Attorney (included on page 78 of this Report)




<PAGE>


                                   SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant had duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.



                                                 PRO-FAC COOPERATIVE, INC.



Date:    September 10, 2001                BY:/s/   Earl L. Powers
         ------------------                     ---------------------------
                                                     EARL L. POWERS
                                                        TREASURER
                                             (Principal Financial Officer and
                                               Principal Accounting Officer)


                                POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS,  that each person whose signature  appears below
constitutes  and appoints EARL L. POWERS,  his true and lawful  attorney-in-fact
and agent, with full power of substitution and resubstitution for him and in his
name,  place and stead, in any and all capacities to sign any and all amendments
to this Annual Report on Form 10-K and to file Pursuant to the  requirements  of
the  Securities  Exchange Act of 1934,  this report has been signed below by the
following  persons on behalf of the  Registrant and in the capacities and on the
dates indicated.


<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
<TABLE>


                   SIGNATURE                                                         TITLE
----------------------------------------------------------        -----------------------------------------

<S>                                                               <C>                                           <C>
/s/    Bruce R. Fox                                               Chairman of the Board and Director            September 10, 2001
----------------------------------------------------------        President                                     ------------------
       (BRUCE FOX)

/s/    Steven D. Koinzan                                          Vice Chairman of the Board and Director       September 10, 2001
----------------------------------------------------------        Vice President                                ------------------
       (STEVEN D. KOINZAN)

/s/    Tom R. Croner                                              Director                                      September 10, 2001
----------------------------------------------------------                                                      ------------------
         (TOM R. CRONER)

/s/    Dale W. Burmeister                                         Director                                      September 10, 2001
----------------------------------------------------------                                                      ------------------
       (DALE W. BURMEISTER)

/s/    Peter R. Call                                              Director                                      September 10, 2001
----------------------------------------------------------                                                      ------------------
        (PETER R. CALL)

/s/    Glen Lee Chase                                             Director                                      September 10, 2001
----------------------------------------------------------                                                      ------------------
       (GLEN LEE CHASE)

/s/    Kenneth A. Dahlstedt                                       Director                                      September 10, 2001
----------------------------------------------------------                                                      ------------------
       (KENNETH A. DAHLSTEDT)

/s/    Robert DeBadts                                             Director                                      September 10, 2001
----------------------------------------------------------                                                      ------------------
       (ROBERT DeBADTS)

/s/    Kenneth A. Mattingly                                       Director                                      September 10, 2001
----------------------------------------------------------                                                      ------------------
       (KENNETH A. MATTINGLY)

/s/    Allan W. Overhiser                                         Director                                      September 10, 2001
----------------------------------------------------------                                                      ------------------
       (ALLAN W. OVERHISER)

/s/    Paul E. Roe                                                Director                                      September 10, 2001
----------------------------------------------------------                                                      ------------------
       (PAUL E. ROE)

/s/    Darell Sarff                                               Director                                      September 10, 2001
----------------------------------------------------------                                                      ------------------
       (DARELL SARFF)

/s/    Stephen R. Wright                                          Secretary                                     September 10, 2001
----------------------------------------------------------        General Manager                               ------------------
       (STEPHEN R. WRIGHT)

/s/    Earl L. Powers                                             Treasurer                                     September 10, 2001
----------------------------------------------------------        (Principal Financial Officer and              ------------------
       (EARL L. POWERS)                                            Principal Accounting Officer)


</TABLE>


SUPPLEMENTAL  INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO
SECTION 12 OF THE ACT.

NO ANNUAL REPORT OR PROXY MATERIAL HAS BEEN SENT TO  REGISTRANT'S  SHAREHOLDERS,
AND NO PROXY MATERIAL IS INTENDED TO BE SENT. AN ANNUAL REPORT IS INTENDED TO BE
SENT.