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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   ----------

                                    Form 10-K

                                   ----------

                        FOR ANNUAL AND TRANSITION REPORTS
                     PURSUANT TO SECTIONS 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

(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 26, 2004

            [_] 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)

350 Linden Oaks, PO Box 30682, Rochester, NY                    14603-0682
  (Address of Principal Executive Offices)                      (Zip Code)

       Registrant's telephone number, including area code: (585) 218-4210
        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]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). YES [_] NO [X]

        Aggregate market value of voting stock held by non-affiliates of
                     the registrant as of December 26, 2003
                            Common Stock: $9,593,830
          (Based upon par value of shares since there is no market for
                         the registrant's common stock)

           Number of common shares outstanding at September 15, 2004:
                             Common Stock: 1,833,738

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                                 1 of 62 Pages




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                   FORM 10-K ANNUAL REPORT - Fiscal Year 2004
                            PRO-FAC COOPERATIVE, INC.
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                          <C>
Cautionary Statement on Forward-Looking Statements.......................     3

                                     PART I

ITEM 1.    Description of Business
              General Development of Business............................     4
              Narrative Description of Business..........................     9
ITEM 2.    Properties....................................................    10
ITEM 3.    Legal Proceedings.............................................    11
ITEM 4.    Submission of Matters to a Vote of Security Holders...........    11

                                     PART II

ITEM 5.    Market for Registrant's Common Stock, Related Stockholder
              Matters and Issuer Purchases of Equity Securities..........    12
ITEM 6.    Selected Financial Data.......................................    13
ITEM 7.    Management's Discussion and Analysis of Financial Condition
              and Results of Operations..................................    14
ITEM 7A.   Quantitative and Qualitative Disclosures about Market Risk....    22
ITEM 8.    Financial Statements and Supplementary Data...................    23
ITEM 9.    Changes in and Disagreements with Accountants on Accounting
              and Financial Disclosure...................................    47
ITEM 9A.   Controls and Procedures.......................................    47
ITEM 9B.   Other Information.............................................    47

                                    PART III

ITEM 10.   Directors and Executive Officers of the Registrant............    48
ITEM 11.   Executive Compensation........................................    50
ITEM 12.   Security Ownership of Certain Beneficial Owners and
              Management and Related Stockholder Matters.................    52
ITEM 13.   Certain Relationships and Related Transactions................    54
ITEM 14.   Principal Accountant Fees and Services........................    55

                                     PART IV

ITEM 15.   Exhibits and Financial Statement Schedules and Reports on
              Form 8-K...................................................    56
           Signatures....................................................    59
</TABLE>


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               CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

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

o    the impact of weather on the volume and quality of raw product;

o    the impact of strong competition in the food industry, including
     competitive pricing;

o    the impact of changes in consumer demand;

o    Birds Eye Foods, Inc.'s ability to service its debt that is guaranteed by
     Pro-Fac (see the information under the heading "Liquidity and Capital
     Resources" in Part II, Item 7 of this Report and "NOTE 11. Other Matters -
     Guarantees and Indemnifications" under "Notes to Consolidated Financial
     Statements" in Part II, Item 8 of this Report);

o    risks associated with the Cooperative's contractual relationship with Birds
     Eye Foods, Inc., including the possibility of a reduced demand for crops
     produced by Pro-Fac members, the availability and sufficiency of shortfall
     payments by Birds Eye Foods, Inc. under the Amended and Restated Marketing
     and Facilitation Agreement, and the potential consequences of a termination
     of that relationship;

o    the ability of the Cooperative to operate its business using the cash made
     available under the Termination Agreement with Birds Eye Foods, Inc. and
     Pro-Fac's ability to operate its business and pay dividends after the
     expiration of that agreement (see the discussion of this Agreement under
     the headings: "Description of Business - General Development of Business",
     in Part I, Item 1 and "Liquidity and Capital Resources" in Part II, Item 7
     of this Report, and "NOTE 3. Agreements with Birds Eye Foods" under "Notes
     to Consolidated Financial Statements" in Part II, Item 8 of this Report).

o    the issuance of additional common units of Birds Eye Holdings LLC, which
     will reduce Pro-Fac's common unit percentage ownership in Birds Eye
     Holdings LLC ("Holdings LLC"), one of the factors in determining the amount
     of annual distributions that may be paid to the Cooperative under the
     Limited Liability Company Agreement (see the discussion under the heading
     "Description of Business - General Development" in Part I, Item 1 of this
     Form 10-K and the "Liquidity and Capital Resources" discussion under the
     Management's Discussion and Analysis of Financial Condition and Results of
     Operations" section in Part II, Item 7 of this Form 10-K regarding the
     terms and application of the Limited Liability Company Agreement.


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                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

                         GENERAL DEVELOPMENT OF BUSINESS

Pro-Fac Cooperative, Inc. ("Pro-Fac" or "Cooperative") 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.

Crops marketed by Pro-Fac include fruits (cherries, apples, blueberries, and
peaches), 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. Pro-Fac members deliver raw product for
sale and processing at the facilities of Birds Eye Foods, Inc. ("Birds Eye
Foods") and other customers. Birds Eye Foods is a producer and marketer of
processed food products and, until consummation of the Transaction on August 19,
2002 described below, a wholly-owned subsidiary of Pro-Fac. As of June 26, 2004,
there were approximately 522 Pro-Fac 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.

Pro-Fac's Class A Cumulative preferred stock is listed on the Nasdaq National
Market system under the stock symbol, "PFACP."

Until August 19, 2002, the Cooperative conducted its business on a consolidated
basis with Birds Eye Foods, Pro-Fac's wholly-owned subsidiary prior to
consummation of the Transaction. Accordingly, unless the context otherwise
requires, the terms "Cooperative" and "Pro-Fac" refer to Pro-Fac Cooperative,
Inc. and its subsidiaries during and for the periods discussed in this Report
preceding the Transaction.

Pro-Fac's management believes a summary background of the relationship between
Pro-Fac and Birds Eye Foods prior to the closing of the Transaction is useful in
understanding the impact of the Transaction on Pro-Fac's current business. On
November 3, 1994, Pro-Fac acquired Birds Eye Foods, and upon consummation of
that acquisition Pro-Fac and Birds Eye Foods entered into a marketing and
facilitation agreement (the "Marketing and Facilitation Agreement"), which,
until the consummation of the Transaction, governed the crop supply and purchase
relationship between Pro-Fac and Birds Eye Foods. Under the Marketing and
Facilitation Agreement, Pro-Fac provided crops and financing to Birds Eye Foods,
Birds Eye Foods provided marketing and management to Pro-Fac, and Pro-Fac shared
in the profits and losses of Birds Eye Foods. The terms of the Marketing and
Facilitation Agreement provided for the payment by Birds Eye Foods to Pro-Fac of
the commercial market value or "CMV" for all crops supplied by Pro-Fac. CMV is
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. Under the Marketing and Facilitation Agreement, in any year in
which Birds Eye Foods had earnings on products which were processed from crops
supplied by Pro-Fac ("Pro-Fac products"), Birds Eye Foods paid 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 Birds Eye Foods (before dividing with
Pro-Fac). In years in which Birds Eye Foods had losses on Pro-Fac products,
Birds Eye Foods reduced the CMV it would have otherwise paid to Pro-Fac by 90
percent of such losses, but in no case by more than 50 percent of all pretax
losses of Birds Eye Foods (before dividing with Pro-Fac). Birds Eye Foods paid
Pro-Fac additional patronage income for services provided by Pro-Fac to Birds
Eye 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. The Marketing and Facilitation Agreement also required Pro-Fac
to reinvest at least 70 percent of additional patronage income in Birds Eye
Foods. Since Pro-Fac's acquisition of Birds Eye Foods in 1994 and prior to
August 19, 2002, Pro-Fac had invested $50.8 million in Birds Eye Foods.

Under the Marketing and Facilitation Agreement, earnings and losses were
determined at the end of the fiscal year, but were accrued on an estimated basis
during the year. Pro-Fac's share of earnings was $16.8 million for the year
ended June 29, 2002. Any patronage income received by Pro-Fac was deductible by
Pro-Fac for federal tax purposes to the extent it was distributed to Pro-Fac
members. Such distributions of patronage income could be made to Pro-Fac members
through a combination of cash and retains provided a minimum of 20 percent of
the amount was paid in cash. Historically, Pro-Fac paid its members between 20
percent and 30 percent of additional patronage income received from Birds Eye
Foods in cash and the remaining portion in retains. Funds made available by the
distribution of retains to members in lieu of cash were historically reinvested
by Pro-Fac in Birds Eye Foods. As a result of the Transaction, Birds Eye Foods
no longer pays patronage income to Pro-Fac.


                                       4




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The Transaction: On August 19, 2002 (the "Closing Date"), pursuant to the terms
of the Unit Purchase Agreement dated as of June 20, 2002 (the "Unit Purchase
Agreement"), by and among Pro-Fac, Birds Eye Foods, at the time a New York
corporation and a wholly-owned subsidiary of Pro-Fac, and Vestar/Agrilink
Holdings LLC, a Delaware limited liability company ("Vestar/Agrilink Holdings"):

(i) Pro-Fac contributed to the capital of Birds Eye Holdings LLC, a Delaware
limited liability company ("Holdings LLC"), all of the shares of Birds Eye Foods
common stock owned by Pro-Fac, constituting 100 percent of the issued and
outstanding shares of Birds Eye Foods capital stock, in consideration for Class
B common units of Holdings LLC, representing a 40.72 percent common equity
ownership at the Closing Date; and

(ii) Vestar/Agrilink Holdings and certain co-investors (collectively, "Vestar")
contributed cash in the aggregate amount of $175.0 million to the capital of
Holdings LLC, in consideration for preferred units and Class A common units and
warrants, which warrants were immediately exercised, to acquire additional Class
A common units, representing 56.24 percent at the closing date of the common
equity of Holdings LLC, inclusive of the additional Class A common units issued
to Vestar upon its exercise of the warrants. The co-investors are either under
common control with, or have delivered an unconditional voting proxy to, Vestar.
The Class A common units entitle the owner thereof, Vestar, to two votes for
each Class A common unit held. All other Holdings LLC common units entitle the
holder(s) thereof to one vote for each common unit held. Accordingly, Vestar has
a voting majority of all common units.

The transactions consummated pursuant to the Unit Purchase Agreement are
referred to in this Report collectively as the "Transaction."

Immediately following Pro-Fac's contribution of its shares of Birds Eye Foods
common stock to Holdings LLC, Holdings LLC contributed those shares to Birds Eye
Holdings Inc., ( "Holdings Inc.") a Delaware corporation and a direct,
wholly-owned subsidiary of Holdings LLC, and Birds Eye Foods became an indirect,
wholly-owned subsidiary of Holdings LLC.

As part of the Transaction, Stephen R. Wright, then the General Manager and
Secretary of Pro-Fac, together with executive officers of Birds Eye Foods, and
certain other members of Birds Eye Foods management, entered into subscription
agreements with Holdings LLC to acquire (using a combination of cash and
promissory notes issued to Holdings LLC) an aggregate of approximately $1.3
million of Class C common units and Class D common units of Holdings LLC,
representing approximately 3.04 percent of the common equity ownership at the
Closing Date. Mr. Stephen Wright, together with the other members of Birds Eye
Foods management who are owners of Holdings LLC common units, Pro-Fac and
Vestar, are parties to a Securityholders Agreement and a Limited Liability
Company Agreement which agreements are described below in this discussion of the
"General Development of Business".

In connection with the Transaction, certain parties to the Transaction,
including Pro-Fac and/or Birds Eye Foods, entered into several agreements
effective as of the Closing Date, including the following:

(i) Termination Agreement: Pro-Fac and Birds Eye Foods entered into a letter
agreement dated as of the Closing Date (the "Termination Agreement"), pursuant
to which, among other things, the Marketing and Facilitation Agreement was
terminated and, in consideration of such termination, Birds Eye Foods agreed to
pay Pro-Fac a termination fee of $10.0 million per year for five years through
April 1, 2007, provided that certain ongoing conditions are met, including
maintaining grower membership levels sufficient to generate certain minimum crop
supply. The $10.0 million payment is payable in quarterly installments as
follows: $4.0 million on each July 1, and $2.0 million each October 1, January
1, and April 1.

(ii) Amended and Restated Marketing and Facilitation Agreement: Pro-Fac and
Birds Eye Foods entered into an amended and restated marketing and facilitation
agreement dated as of the Closing Date (the "Amended and Restated Marketing and
Facilitation Agreement"). The Amended and Restated Marketing and Facilitation
Agreement supersedes and replaces the Marketing and Facilitation Agreement
discussed above and provides that, among other things, Pro-Fac will be Birds Eye
Foods' preferred supplier of crops. Birds Eye Foods will also continue to pay
Pro-Fac the CMV of crops supplied by Pro-Fac in installments corresponding to
the dates of payment by Pro-Fac to its members for crops delivered. The
processes for determining CMV under the Amended and Restated Marketing and
Facilitation Agreement are substantially the same as the processes used under
the Marketing and Facilitation Agreement. Birds Eye Foods makes payments to
Pro-Fac of an estimated CMV for a particular crop year, subject to adjustments
to reflect the actual CMV following the end of such year. Commodity committees
of Pro-Fac meet with Birds Eye Foods management to establish CMV or receivable
guidelines, review calculations, and report to a joint CMV committee of Pro-Fac
and Birds Eye Foods. Unlike the Marketing and Facilitation Agreement, however,
the Amended and Restated Marketing and Facilitation Agreement does not permit
Birds Eye Foods to offset its losses from products supplied by Pro-Fac or
require it to share with Pro-Fac its profits, and it does not require Pro-Fac to
reinvest in Birds Eye Foods any part of Pro-Fac's patronage income.


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

Under the Amended and Restated Marketing and Facilitation Agreement, Birds Eye
Foods determines the amount of crops which Birds Eye Foods will acquire from
Pro-Fac for each crop year. If the amount to be purchased by Birds Eye Foods
during a particular crop year does not meet (i) a defined crop amount or (ii) a
defined target percentage of Birds Eye Foods' needs for each particular crop,
then certain shortfall payments will be made by Birds Eye Foods to Pro-Fac. The
defined crop amounts and targeted percentages are set based on Birds Eye Foods'
anticipated raw product needs for the particular crop year. The shortfall
payment provisions of the agreement include a maximum shortfall payment,
determined for each crop, that can be paid over the term of the Amended and
Restated Marketing and Facilitation Agreement. The aggregate shortfall payment
amounts for all crops covered under the agreement cannot exceed $20.0 million
over the term of the agreement.

Unless terminated earlier, the Amended and Restated Marketing and Facilitation
Agreement will continue in effect until August 19, 2012. Birds Eye Foods may
terminate the Amended and Restated Marketing and Facilitation Agreement prior to
August 19, 2012 upon the occurrence of certain events, including in connection
with a change in control transaction affecting Birds Eye Foods or Holdings Inc.
However, in the event Birds Eye Foods terminates the Amended and Restated
Marketing and Facilitation Agreement as a result of a change in control
transaction within three years of the Closing Date, Birds Eye Foods must pay to
Pro-Fac a termination fee of $20.0 million (less the total amount of any
shortfall payments previously paid to Pro-Fac under the Amended and Restated
Marketing and Facilitation Agreement). Also, if, during the first three years
after the Closing Date, Birds Eye Foods sells one or more portions of its
business, and if the purchaser does not continue to purchase the crops
previously purchased by Birds Eye Foods with respect to the transferred
business, then such failure will be taken into consideration when determining if
Birds Eye Foods is required to make any shortfall payments to Pro-Fac. After
such three-year period, Birds Eye Foods may sell portions of its business and
the volumes of crop purchases previously made by Birds Eye Foods with respect to
such transferred business will be disregarded for purposes of determining
shortfall payments.

(iii) Transitional Services Agreement. Pro-Fac and Birds Eye Foods entered into
a transitional services agreement (the "Transitional Services Agreement") dated
as of the Closing Date, pursuant to which Birds Eye Foods agreed to provide
Pro-Fac certain administrative and other services at no charge to Pro-Fac, other
than reimbursement of the incremental and out-of-pocket costs associated with
performing those services for Pro-Fac, for a period of 24 months from the
Closing Date. Pursuant to its terms, the Transitional Services Agreement
terminated on August 19, 2004. Under the Transitional Services Agreement, the
general manager of Pro-Fac was also an employee of Birds Eye Foods, reporting to
the chief executive officer of Birds Eye Foods with respect to his duties for
Birds Eye Foods, and to the Pro-Fac Board of Directors with respect to duties
performed by him for Pro-Fac. All other individuals performing services under
the Transitional Services Agreement were employees of Birds Eye Foods and
reported to the chief executive officer or other representatives of Birds Eye
Foods. Stephen R. Wright, who served as the General Manager and Secretary of
Pro-Fac during fiscal year 2004, was employed by Birds Eye Foods through August
19, 2004 serving as executive vice president - investor relations of Birds Eye
Foods. As an employee of Birds Eye Foods, Mr. Wright's salary was paid by Birds
Eye Foods. Effective August 19, 2004, Mr. Wright and two other individuals
previously employed by Birds Eye Foods and providing services to Pro-Fac under
the Transitional Services Agreement became employees of Pro-Fac.

(iv) Credit Agreement. Birds Eye Foods and Pro-Fac entered into a credit
agreement, dated August 19, 2002 (the "Credit Agreement"), pursuant to which
Birds Eye Foods agreed to make available to Pro-Fac loans in an aggregate
principal amount of up to $5.0 million (the "Credit Facility "). Pro-Fac is
permitted to draw down up to $1.0 million per year under the Credit Facility,
unless Birds Eye Foods is prohibited from making such advances under the terms
of certain third party indebtedness of Birds Eye Foods. The amount of the Credit
Facility will be reduced, on a dollar-for-dollar basis, to the extent of certain
distributions made by Holdings LLC to Pro-Fac in respect of its ownership in
Holdings LLC. Pro-Fac has pledged all of its Class B common units in Holdings
LLC as security for advances under the Credit Facility. For additional
information about the Credit Agreement and the terms of the Credit Facility, see
"NOTE 6. Long-Term Debt" under "Notes to Consolidated Financial Statements" in
Part II, Item 8 of this Report.

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


                                       6




<PAGE>


The Limited Liability Company Agreement provides, among other things, that
Holdings LLC's distributable assets, which include cash receipts from
operations, investing and financing, net of expenses, will be distributed to
Holdings LLC's members as determined by Holdings LLC's management committee. In
general, those distributable assets are distributable as follows:

     o    first, 100 percent to the holders of preferred units, pro rata, until
          each preferred unit holder's current (non-compounded) preferred return
          has been reduced to zero;

     o    second, 100 percent to the holders of preferred units, pro rata, until
          each preferred unit holder's unpaid preferred return has been reduced
          to zero and then, pro rata among the preferred unit holders until each
          preferred unit holder's unreturned preferred capital contribution has
          been reduced to zero;

     o    third, 100 percent to the holders of Class A common units, Class B
          common units, Class C common units, and Class E common units, pro
          rata, until each such unit holder's unreturned common capital
          contribution has been reduced to zero; and

     o    fourth, after the holders of Class A common units, Class B common
          units, Class C common units and Class E common units have been paid
          their unreturned common capital contributions, the balance of
          distributable assets, if any, will be distributed to the holders of
          Class A common units, Class B common units, Class C common units,
          Class D common units and Class E common units. The amount
          distributable to such holders is determined based upon the number of
          Class C common units and Class D common units outstanding and upon
          whether certain performance hurdles have been satisfied. As the
          various performance hurdles are satisfied, the percentage of any
          remaining distributable assets distributable to the holders of Class A
          common units, Class B common units and Class E common units decreases
          from approximately 96 percent to approximately 90 percent, the
          percentage of remaining distributable assets distributable to the
          holders of Class C common units decreases from approximately 2 percent
          to 1.872 percent and the percentage of remaining distributable assets
          distributable to the holders of Class D common units increases from
          approximately 2 percent to approximately 8.112 percent.

Prior to August 19, 2005, distributions of assets by Holdings LLC in excess of
the amount necessary to pay preferred unit holders their current preferred
returns in full requires the consent of the preferred unit holders holding at
least a majority of the preferred units. A preferred unit holder's preferred
return is equal to 15 percent per annum, of the preferred unit holder's
preferred capital contributions, less distributions made in respect to such
preferred units. The preferred return accrues on a daily basis and compounds
quarterly (3.75 percent quarterly). In the event of a dissolution, Holdings
LLC's assets (after payment of debts and obligations) will be distributed to its
members in accordance with the above distribution schedule.

The Limited Liability Company Agreement further provides that, subject to
restrictions contained in any financing arrangements of Holdings LLC or its
subsidiaries (including Birds Eye Foods), after August 19, 2007 and prior to a
sale (or dissolution) of Holdings LLC, Holdings LLC will use commercially
reasonable efforts to cause Birds Eye Foods to distribute annually to Holdings
LLC up to $24.8 million of cash flow from the operations of Birds Eye Foods,
which Holdings LLC will then distribute, notwithstanding the "first", "second"
and "third" tier distribution preferences described above, to the holders of its
Class A common units, Class B common units, Class C common units, Class D common
units and Class E common units in accordance with the "fourth" distribution tier
as if no performance hurdle has been satisfied. Further, upon the occurrence of
certain specified events, including the sale of Holdings LLC and at any time
after August 19, 2010, the holders of preferred units are entitled, at their
option, to have their preferred units redeemed and, at any time after August 19,
2005, Holdings LLC has the option to redeem the preferred units.

Further, under the Limited Liability Company Agreement, the management committee
of Holdings LLC is authorized to issue up to 16,000 Class C common units and up
to 16,000 Class D common units. The Limited Liability Company Agreement further
provides that the holders of a majority of the total voting power of the
outstanding Class A, Class B and Class E common units can cause Holdings LLC to
create and issue additional units, provided no such issuance would adversely
affect the relative economic rights of the holders of Class A, Class B, Class C
and Class D common units and further subject to the amendment provisions of the
Limited Liability Company Agreement. The Limited Liability Company Agreement
provides, in part, that the management committee of Holdings LLC can amend the
Agreement, to provide for the issuance of any other type of preferred unit,
whether of an existing or new class, with the consent of the preferred unit
holders, and to provide for the issuance of any other class of units or other
securities, with the consent of each unit holder, if any, who would be adversely
affected by such issuance as to any such unit holder's limited liability or as
to the alteration of any such unit holder's rights to receive allocations or
distributions unless such alterations of rights are in connection with a debt or
equity financing, a restructuring, a recapitalization or other transaction in
which Holdings LLC will receive an investment or contribution to its capital or
in connection with the issuance of equity to employees or directors of Holdings
LLC, its subsidiaries or to third party lenders. The issuance of additional
common units will reduce the percentage ownership of the current holders of
common units in Holdings LLC, including Pro-Fac. As of June 26, 2004, Pro-Fac
owned 40.49 percent of the common equity of Holdings LLC through its ownership
of 321,429 Class B common units.


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<PAGE>


(vi) Securityholders Agreement: Holdings LLC, Pro-Fac and Vestar, together with
others, including officers of Birds Eye Foods (the "Management Investors"),
entered into a securityholders agreement dated August 19, 2002 (and as amended
from time to time, the "Securityholders Agreement") containing terms and
conditions relating to the transfer of membership interests in and the
management of Holdings LLC. Among other things, the Securityholders Agreement
includes a voting agreement pursuant to which the holders of common units agree
to vote their common units and to take any other action necessary to cause the
authorized number of members or directors for each of the respective management
committees or boards of directors of Holdings LLC, Holdings, Inc. and Birds Eye
Foods to be set at not less than nine but not more than 11, as determined by
Vestar, and to elect or cause to be elected to the respective management
committees or boards of directors of Holdings LLC, Holdings, Inc. and Birds Eye
Foods, six members/directors designated by Vestar, two members/directors
designated by Pro-Fac, one member/director who shall be the chief executive
officer of Birds Eye Foods and two members/directors designated by Vestar who
shall be independent of Holdings LLC, its subsidiaries' management (including
Birds Eye Foods) and Vestar.

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

The Securityholders Agreement also provides:

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

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

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

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

The foregoing description of agreements is only a summary and reference is made
to those agreements, copies of which are filed as exhibits to this Report or,
although included in the exhibit index to this Report have been previously filed
by Pro-Fac with the SEC. Each statement is qualified in its entirety by such
reference.

As a result of the Transaction, Pro-Fac no longer reports its financial
statements on a consolidated basis with that of Birds Eye Foods. Subsequent to
the Transaction, Pro-Fac accounts for its investment in Holdings LLC under the
equity method of accounting.

                  Financial Information About Industry Segments

Since August 19, 2002, Pro-Fac has conducted its business in only one business
segment, the marketing of its members' crops, including raw fruits and
vegetables.

Prior to August 19, 2002, Birds Eye Foods was a wholly-owned subsidiary of
Pro-Fac. Birds Eye Foods operated in four primary segments. See "NOTE 9.
Operating Segments" under "Notes to Consolidated Financial Statements" in Part
II, Item 8 of this Report for additional segment information.


                                       8




<PAGE>


                        NARRATIVE DESCRIPTION OF BUSINESS

Pro-Fac is an agricultural cooperative that markets and sells its members' crops
to food processors, including Birds Eye Foods. Fiscal 2004 is the first complete
year in which Pro-Fac operated its business on a stand alone basis without Birds
Eye Foods as a wholly-owned subsidiary. Pro-Fac no longer manufactures and
markets processed foods, which it previously did through Birds Eye Foods.

                               Pro-Fac's Business

Since the Transaction, Pro-Fac's relationship with Birds Eye Foods is governed
by the Amended and Restated Marketing and Facilitation Agreement, which is
described above.

Pro-Fac's principal products are discussed above in "General Development of
Business".

                           Packaging and Distribution

The distribution activities of Pro-Fac are limited to the delivery of raw fruits
and vegetables to its customers, including Birds Eye Foods.

                              Raw Material Sources

Pro-Fac's primary source of crops for delivery to Birds Eye Foods and to other
Pro-Fac customers is the Pro-Fac members.

                             Seasonality of Business

The terms of the Amended and Restated Marketing Facilitation Agreement provide
that Pro-Fac will continue to receive payments for crops sold to Birds Eye Foods
on a date or dates that coincide with the time of payment for crops by Pro-Fac
to its members. Accordingly, Pro-Fac's business is not expected to be impacted
by the seasonality of its members' planting and harvesting activities.

                              Significant Customers

For the fiscal years ended June 26, 2004, June 28, 2003 and June 29, 2002,
approximately 75%, 98% and 100%, respectively, of the crops purchased by Pro-Fac
from its members were sold to Birds Eye Foods pursuant to the Amended and
Restated Marketing and Facilitation Agreement.

                             Competitive Conditions

Pro-Fac is Birds Eye Foods' preferred supplier of raw product under the Amended
and Restated Marketing and Facilitation Agreement. Accordingly, it is expected
that Birds Eye Foods will continue to purchase a substantial portion of its raw
product needs from Pro-Fac. The Cooperative competes with other cooperatives and
individual growers for other customers as it expands its activities relating to
the marketing and sale of its members' crops.

                               Backlog of Orders

Historically, backlog orders have not been significant in Pro-Fac's business and
they are not expected to be significant in the future operations of Pro-Fac's
business.

                              Government Contracts

No portion of Pro-Fac's business is subject to renegotiation of contracts with,
or termination by, any government agency.


                                       9




<PAGE>


                                    Employees

At June 26, 2004, Pro-Fac did not have any full-time employees. Pursuant to the
Transitional Services Agreement, which terminated by its terms on August 19,
2004, Birds Eye Foods provided Pro-Fac certain administrative and other
services. Prior to the termination of the Transitional Services Agreement,
Stephen R. Wright, who was the General Manager and Secretary of Pro-Fac during
fiscal year 2004, was an employee of Birds Eye Foods. Effective August 19, 2004,
Mr. Wright and two other individuals previously employed by Birds Eye Foods and
providing services to Pro-Fac under the Transitional Services Agreement became
employees of Pro-Fac.

                      Practices Concerning Working Capital

Pro-Fac's principal working capital requirement is to fund payments to its
member growers for crops delivered to Birds Eye Foods and other customers of
Pro-Fac. Payments to growers for crops delivered to Birds Eye Foods are funded
using payments received from Birds Eye Foods. These receipts and payments are
generally simultaneous. Receipts from other customers do not always coincide
with related payments to growers and may require use of working capital or
short-term borrowings.

In connection with the Transaction, Pro-Fac and Birds Eye Foods entered into the
Credit Agreement pursuant to which Birds Eye Foods agreed to make available to
Pro-Fac loans in an aggregate principal amount of up to $5.0 million. Pro-Fac is
permitted to draw down up to $1.0 million per year under the $5.0 million Credit
Facility, unless Birds Eye Foods is prohibited from making such advances under
the terms of certain third-party indebtedness of Birds Eye Foods. At June 26,
2004, $1.0 million was outstanding under the Credit Agreement. For additional
information about the Credit Agreement see the discussions under the heading
"Liquidity and Capital Resources" in Part II, Item 7 of this Report and "NOTE 6.
Long-Term Debt" under "Notes to Consolidated Financial Statements" in Part II,
Item 8 of this Report.

The Cooperative may borrow up to $2.0 million under the terms of a line of
credit with from Manufacturers and Traders Trust Company (the "M&T Line of
Credit"). As of June 26, 2004 and June 28, 2003, $0.0 million and $0.5 million,
respectively, were outstanding under the M&T Line of Credit. For additional
information about the M&T Line of Credit see the discussions under the heading
"Liquidity and Capital Resources" in Part II, Item 7 of this Report and "NOTE 6.
Long-Term Debt" under "Notes to Consolidated Financial Statements" in Part II,
Item 8 of this Report.

                                  Environmental

As part of the Transaction, Pro-Fac agreed to indemnify Birds Eye Foods for
certain environmental liabilities exceeding $200,000. This obligation, however,
is only triggered once the aggregate of all liabilities subject to
indemnification under the Unit Purchase Agreement (including those unrelated to
environmental matters) exceeds $10 million.

                   Pro-Fac's Business Prior to August 19, 2002

Prior to August 19, 2002, Pro-Fac, through its then wholly-owned subsidiary
Birds Eye Foods, sold products in three principal categories: (i) "branded"
products, which are finished products sold under various trademarks, (ii)
"private label" products, which are finished products sold to grocers who in
turn use their own brand names on the products and (iii) "food
service/industrial" products, which are finished products sold to food service
institutions such as restaurants, caterers, bakeries, and schools.

In the fourth quarter of fiscal 2003, after Pro-Fac no longer consolidated its
operations with Birds Eye Foods, Birds Eye Foods changed its product segments to
conform to new internal management reporting used to monitor and manage
financial performance. Prior to that change, Birds Eye Foods described its
business as having four primary product lines: vegetables, fruits, snacks and
canned meals. Because Birds Eye Foods' change was motivated for internal
management reporting purposes and because Pro-Fac no longer consolidates its
operating results with Birds Eye Foods, Pro-Fac has not restated the segment
information to reflect Birds Eye Foods' change. "NOTE 9. Operating Segments"
under "Notes to Consolidate Financial Statements" in Part II, Item 8 of this
Report, provides information based on Birds Eye Foods historical segment
information, including revenues, income(loss) and total assets.


                                       10




<PAGE>


ITEM 2. PROPERTIES

At June 26, 2004, Pro-Fac did not own or lease any real property. Under the
Transitional Services Agreement, which terminated by its terms on August 19,
2004, Birds Eye Foods agreed to make office space, office equipment and support
services available to Pro-Fac for up to five Pro-Fac employees at Birds Eye
Foods' facilities located at Linden Oaks, Rochester, New York. Pro-Fac agreed to
reimburse Birds Eye Foods for its incremental and out-of-pocket third-party
expenses in connection with Birds Eye Foods' performance for the account of
Pro-Fac pursuant to the agreement; provided, that Pro-Fac had no reimbursement
obligation with respect to services support, office space and office equipment
to the extent that they were not in excess of the levels provided on the date of
Transitional Services Agreement.

Pro-Fac's principal offices are located at 350 Linden Oaks, Rochester, New York
and consist of 468 square feet of office space. Commencing August 19, 2004,
Pro-Fac subleases this space from Birds Eye Foods at an annual rate of $12,600
($1,050 per month). Either Pro-Fac or Birds Eye Foods may terminate the sublease
upon at least 30 days written notice in advance of the termination date. The
rent payment is subject to a 3% annual increase on June 1.

ITEM 3. LEGAL PROCEEDINGS

The Cooperative is party to various 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 the Cooperative's business,
financial condition, and results of operations. Further, no such proceedings are
known to be contemplated by any governmental authorities. The Cooperative
maintains general liability insurance coverage in amounts deemed to be adequate
by the Board of Directors.

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

No matters were submitted to a vote of security holders during the fourth
quarter of fiscal 2004.


                                       11




<PAGE>


                                     PART II

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

There is no trading market for the Cooperative's common stock. Only
member-growers of the Cooperative can own shares of the Cooperative's common
stock. As of June 26, 2004, there were 522 members of Pro-Fac holding shares of
Pro-Fac common stock. In fiscal 2003 and 2002, dividends on Pro-Fac common stock
were paid at a rate of 5 percent. At its January 2003 Board meeting, in an
action aimed at improving the Cooperative's short-term liquidity, the Board of
Directors of Pro-Fac determined to suspend the payment of annual dividends on
the Cooperative's common stock for an indefinite period of time.

In March 2002, the Cooperative amended and restated its Certificate of
Incorporation to eliminate its Class B common stock. The Class B common stock
had been held by former Pro-Fac members. All shares of Class B common stock were
repurchased on July 19, 2001. No dividends were paid on Class B common stock in
fiscal 2002.

Additional information concerning dividends and related stockholder matters may
be found in the following sections of this Report: "Selected Financial Data" in
Item 6, "Consolidated Statements of Cash Flows", "Consolidated Statements of
Changes in Shareholders' and Members Capitalization and Redeemable Stock", in
Item 8 of this Report and in "NOTE 10. Common Stock and Capitalization" and
"NOTE 12. Quarterly Financial Data (Unaudited)" under "Notes to Consolidated
Financial Statements" in Item 8 of this Report.

During fiscal 2004, the Cooperative issued shares of its Class A cumulative
preferred stock in exchange for shares of 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:

<TABLE>
<CAPTION>
                   Number of Shares
     Date         (share-for-share)   Value of Shares (1)
---------------   -----------------   -------------------
<S>                     <C>                 <C>
January 9, 2004           275               $ 6,875

April 19, 2004            640                16,000

June 26, 2004             116                 2,900
                        -----               -------
   Total                1,031               $25,775
                        =====               =======
</TABLE>

(1)  Based on liquidation preference of $25 per share

New York Cooperative Law restricts the amount of annual dividends that Pro-Fac
may pay on its shares of common stock to 12 percent per annum.


                                       12




<PAGE>


ITEM 6. SELECTED FINANCIAL DATA

Pro-Fac's results of operations and financial condition for fiscal 2004 and
fiscal 2003 are not comparable with those of fiscal 2002, 2001 and 2000.
Subsequent to August 18, 2002, Pro-Fac no longer reports its financial
information on a consolidated basis with Birds Eye Foods. Fiscal 2004 represents
a complete fiscal year without consolidation and fiscal 2003 reflects a period
of approximately forty-five weeks (August 19, 2002 through June 28, 2003) on an
unconsolidated basis with Birds Eye Foods. The financial data below for fiscal
2002, 2001 and 2000 reflect Pro-Fac's operations on a consolidated basis with
Birds Eye Foods.

(Dollars in Thousands, Except Capital Stock Data)

<TABLE>
<CAPTION>
                                                                      Fiscal Year Ended June
                                                    ---------------------------------------------------------
                                                      2004      2003        2002        2001(a)       2000
                                                    -------   --------   ----------   ----------   ----------
<S>                                                 <C>       <C>        <C>          <C>          <C>
Consolidated Statement of Operations:
Net sales (f)                                       $     0   $103,726   $1,010,540   $1,177,280   $1,159,656
Cost of sales                                             0    (80,644)    (795,297)    (956,182)    (919,029)
                                                    -------   --------   ----------   ----------   ----------
Gross profit                                              0     23,082      215,243      221,098      240,627
Equity income from Holdings LLC                       3,872      2,134            0            0            0
Gain from Transaction with Birds Eye Foods, Inc.
   and related agreements                             6,060     10,361            0            0            0
Commercial market value adjustment                      660        568            0            0            0
Selling, administrative, and general expense
   (post Transaction)                                (1,139)    (1,433)           0            0            0
Selling, administrative, and general expenses
   (pre Transaction)                                      0    (15,468)    (117,450)    (136,352)    (141,508)
Legal matters and settlement expenses                  (273)    (3,720)           0            0            0
Income from joint venture                                 0        277        2,457        1,779        2,418
Gain from pension curtailment                             0          0        2,472            0            0
Gains on sale of assets                                   0          0            0            0        6,635
Restructuring                                             0          0       (2,622)           0            0
Goodwill impairment charge                                0          0     (179,025)           0            0
                                                    -------   --------   ----------   ----------   ----------
Operating income/(loss)                               9,180     15,801      (78,925)      86,525      108,172
Interest income                                          23         10            0            0            0
Interest expense                                        (99)    (7,762)     (66,420)     (85,073)     (83,511)
                                                    -------   --------   ----------   ----------   ----------
Pretax income/(loss) before extraordinary item,
   dividends, and allocation of net
   income/(loss)                                      9,104      8,049     (145,345)       1,452       24,661
Tax (provision)/benefit                                   0        (59)      28,561         (968)      (8,497)
                                                    -------   --------   ----------   ----------   ----------
Net income/(loss)                                   $ 9,104   $  7,990   $ (116,784)  $      484   $   16,164
                                                    =======   ========   ==========   ==========   ==========

Allocation of net income/(loss):
   Net income/(loss)                                $ 9,104   $  7,990   $ (116,784)  $      484   $   16,164
   Dividends on common and preferred stock (b)       (8,134)    (8,368)      (8,370)      (8,123)      (7,410)
                                                    -------   --------   ----------   ----------   ----------
   Net income/(loss)                                    970       (378)    (125,154)      (7,639)       8,754
   Allocation (to)/from earned surplus/
      (accumulated deficit)                            (970)       378      133,622        7,639       (3,832)
                                                    -------   --------   ----------   ----------   ----------
   Net income/(loss) available to members           $     0   $      0   $    8,468   $        0   $    4,922
                                                    =======   ========   ==========   ==========   ==========

Allocation of net income/(loss) available to
   Class A members:
   Payable to Class A members currently (25% of
      qualified net income/(loss) available
      to Class A members in fiscal 2002 and 30%
      in fiscal 2000)                               $     0   $      0   $    2,117   $        0   $    1,477

Allocated to Class A members but retained by the
   Cooperative:
   Qualified retains                                      0          0        6,351            0        3,445
                                                    -------   --------   ----------   ----------   ----------
   Net income/(loss) available to Class A members   $     0   $      0   $    8,468   $        0   $    4,922
                                                    =======   ========   ==========   ==========   ==========
   CMV related to Class A members                   $     0   $      0   $   71,733   $   69,013   $   69,623
                                                    =======   ========   ==========   ==========   ==========
   CMV related to Class B members                       N/A        N/A          N/A        9,423       14,060
   Total income/(loss) allocated to Class A
      members as a percent of CMV(c)                   0.00%      0.00%        11.8%        0.00%        7.07%
                                                    =======   ========   ==========   ==========   ==========
   Total income/(loss) allocated to Class B
      members at a percent of CMV(e)                    N/A        N/A          N/A         0.00%        0.00%
                                                    =======   ========   ==========   ==========   ==========

Balance Sheet Data:
   Working (deficit) capital                        $  (852)  $   (612)  $  272,042   $  235,334   $  260,481
   Total assets                                     $34,098   $ 31,463   $  836,175   $1,069,645   $1,187,266
   Class A common stock                             $ 9,169   $  9,636   $   10,193   $   11,287   $   10,665
   Class B cumulative redeemable Preferred Stock    $   108   $    122   $      206   $      239   $      237
   Shareholders' and members' capitalization,
      redeemable stock, and common stock            $19,645   $ 19,408   $   24,505   $  153,315   $  159,843
   Long-term debt and senior subordinated notes
      (excludes current portion)                    $ 1,000   $  1,200   $  623,057   $  631,128   $  679,205
Capital Stock Data
   Cash dividends paid per share:
Class A Common                                      $  0.00   $    .25   $      .25   $      .25   $      .25
Non-Cumulative Preferred stock                      $  1.50   $   1.50   $     1.50   $     1.50   $     1.50
Class A Cumulative Preferred stock                  $  1.72   $   1.72   $     1.72   $     1.72   $     1.72
Class B Cumulative Preferred stock                  $  1.00   $   1.00   $     1.00   $     1.00   $     1.00
Average Class A Common stock investment per Class
   A member                                         $17,565   $ 17,584   $   18,072   $   18,688   $   17,037
Number of Class A Common stock members                  522        548          564          604          626
Number of Class B Common stock members(e)                 0          0            0          153          150
</TABLE>

(a)  Fiscal 2001 consisted of 53 weeks.

(b)  On March 28, 2002, Pro-Fac amended and restated its certificate of
     incorporation to eliminate its Class B common stock, and to rename its
     Class A common stock "common stock" and its Class A members "common
     members".

(c)  Payment to Class A members for CMV was 100 percent of deliveries in fiscal
     2001.

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

(e)  On July 19, 2001, Pro-Fac repurchased all Class B common stock.

(f)  After the Transaction, under the provisions of Emerging Issues Task Force
     Issue No. 99-19, "Reporting Revenue Gross Versus Net as an Agent," the
     Cooperative records activity among Birds Eye Foods and other customers,
     itself and its members on a net basis.


                                       13




<PAGE>


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

The following section should be read in conjunction with Item 1: Business; Item
6: Selected Financial Data; and Item 8: Financial Statements and Supplementary
Data.

The purpose of this discussion is to outline the significant reasons for changes
in the Consolidated Statement of Operations from fiscal 2002 through fiscal
2004. The consolidated operations during fiscal 2002 and for the first seven
weeks of fiscal 2003 included the operations of Pro-Fac's former wholly-owned
subsidiary, Birds Eye Foods.

As a result of the Transaction, Pro-Fac's results of operations for fiscal 2004
and 2003 are not comparable with those of fiscal 2002. For a discussion of the
Transaction see the information under the heading "Description of Business -
General Development of Business" in Part I, Item 1 of this Report and "NOTE 1.
Description of Business and Summary of Significant Accounting Policies" under
"Notes to Consolidated Financial Statements" in Part II, Item 8 of this Report.

                     CHANGES FROM FISCAL 2003 TO FISCAL 2004

Through August 18, 2002, Birds Eye Foods was a wholly owned subsidiary of
Pro-Fac. Through August 18, 2002, the results of Pro-Fac were consolidated with
Birds Eye Foods. The consolidated financial statements were after elimination of
intercompany transactions and balances. The following summarizes the activity of
Birds Eye Foods for the period June 30, 2002 through August 18, 2002:

<TABLE>
<CAPTION>
                                                                 June 30, 2002 -
(Dollars in Thousands)                                           August 18, 2002
                                                                 ---------------
<S>                                                                 <C>
Net sales                                                           $103,726
Cost of sales                                                        (80,644)
                                                                    --------
Gross profit                                                          23,082
Selling, administrative, and general expense                         (15,468)
Other income                                                             277
                                                                    --------
Operating income                                                       7,891
Interest expense                                                      (7,747)
                                                                    --------
Pretax income                                                            144
Tax provision                                                            (59)
                                                                    --------
   Net income                                                       $     85
                                                                    ========
</TABLE>

As a result of the Transaction, described in "NOTE 1. Description and Summary of
Significant Accounting Policies" under "Notes to Consolidated Financial
Statements," in Part II, Item 8 of this Report, the results of operations for
the approximately seven weeks before August 19, 2002 are not comparable with
those of the period from August 18, 2002 through June 26, 2004. Accordingly, the
following is a discussion of the remaining components included in the results of
operations of Pro-Fac for fiscal 2003 compared to fiscal 2004.

Equity Income from Birds Eye Holdings LLC: Subsequent to August 18, 2002,
Pro-Fac no longer reports its financial statements on a consolidated basis with
Birds Eye Foods and accounts for its investment in Holdings LLC under the equity
method of accounting. For fiscal 2004 and 2003, the Cooperative recognized
income, under the equity method, of approximately $3.9 million and $2.1 million,
respectively, from Holdings LLC. The application of the equity method is further
described in "NOTE 1. Description of Business and Summary of Significant
Accounting Policies" under "Notes to Consolidated Financial Statements," in Part
II, Item 8 of this Report.

Gain from Transaction with Birds Eye Foods, Inc and Related Agreements: On
August 19, 2002, the Cooperative contributed to the capital of Holdings LLC all
of the shares of Birds Eye Foods common stock owned by Pro-Fac in exchange for
Class B common units of Holdings LLC representing a then 40.72 percent interest.
Pro-Fac's investment in Birds Eye Foods prior to the Transaction was
approximately $24.9 million. This amount reflects the forgiveness by Birds Eye
Foods of approximately $36.5 million which represented both borrowings for the
working capital needs of Pro-Fac and a $9.4 million demand note payable. The
value of the Cooperative's 40.72 percent common equity ownership in Holdings LLC
was estimated at $31.4 million at the date of the Transaction. During fiscal
2003, the Cooperative recognized a gain of approximately $3.8 million from this
exchange.


                                       14




<PAGE>


Pro-Fac and Birds Eye Foods also entered into a letter agreement dated as of the
Closing Date (the "Termination Agreement"), pursuant to which, among other
things, the Marketing and Facilitation Agreement was terminated, and in
consideration of such termination, Pro-Fac is entitled to the payment of a
termination fee of $10.0 million per year for five years, provided that certain
ongoing conditions are met, including maintaining grower membership levels
sufficient to generate certain minimum crop supply. The $10.0 million payment is
payable in quarterly installments to the Cooperative as follows: $4.0 million on
each July 1, and $2.0 million on each October 1, January 1, and April 1.
Pursuant to the Termination Agreement, in fiscal 2004, the Cooperative received
all payments as scheduled. In fiscal 2003, the Cooperative received $4.0 million
from Birds Eye Foods on August 19, 2002, $2.0 million on October 1, 2002, $2.0
million on December 31, 2002 and $2.0 million on April 1, 2003.

Payments under the Termination Agreement are considered additional consideration
related to the Transaction. Accordingly, the portion of the payments received
under the Termination Agreement representing Pro-Fac's continuing ownership
percentage is recorded as an adjustment to Pro-Fac's investment in Holdings LLC.
The remaining portion of the payments is recognized as additional gain on the
Transaction with Birds Eye Foods in the period received. Accordingly, in fiscal
2004 and 2003, Pro-Fac recognized approximately $6.1 million and $5.9 million,
respectively, as additional gain from the receipt of termination payments.

In addition, Pro-Fac and Birds Eye Foods entered into the Transitional Services
Agreement described in the "Description of Business - General Development of
Business" in Part I, Item 1 of this Report and in NOTE 3. "Agreements with Birds
Eye Foods" under "Notes to Consolidated Financial Statements" in Part II, Item 8
of this Report. The estimated value of services to be received by Pro-Fac under
the agreement, of approximately $1.0 million, has been reflected as additional
proceeds from the Transaction. Accordingly in fiscal 2003, Pro-Fac recognized
approximately $0.6 million as additional gain from the Transitional Services
Agreement.

As a result of the agreements described above, based on its common equity
ownership, the Cooperative recognized a total gain, in fiscal 2004 and 2003, of
approximately $6.1 million and $10.4 million, respectively.

Commercial market value adjustment: At its January 2003 Board meeting, in an
action aimed at improving the Cooperative's short-term liquidity, the Board of
Directors of Pro-Fac determined to deduct 1 percent of the CMV otherwise payable
to Pro-Fac's member-growers for crops supplied by Pro-Fac member-growers through
the Cooperative for the 2002 and 2003 growing seasons. The 1 percent CMV
deduction was withheld from the July 2003 CMV payment and will be withheld from
the July 2004 CMV payments. The Board of Directors of Pro-Fac resolved to review
this recommendation annually. The 1 percent deduction for the 2003 growing
season resulted in approximately $0.7 million in income for fiscal 2004. The 1
percent deduction for the 2002 growing season resulted in approximately $0.6
million of income for fiscal 2003.

Selling, administrative, and general expense: Selling, administrative, and
general expenses totaled $1.1 million and $1.4 million for fiscal 2004 and 2003,
respectively. During fiscal 2003, the Cooperative paid approximately $0.4
million to obtain insurance from St. Paul Mercury Insurance Company and Great
American Insurance Company, 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 for events occurring prior to August 19, 2002
where claims are submitted prior to August 19, 2008. This insurance has a term
expiring on August 19, 2008.

The remaining expenses for fiscal 2004 and 2003 were for general operating
purposes of the Cooperative.

Legal matters and settlement expenses: During the second quarter of fiscal 2003,
Pro-Fac recorded a liability of $1,250,000 in anticipation of the settlement of
the Blue Line Farms Litigation and the Seifer Trust Litigation. During the
fourth quarter of fiscal 2003, Pro-Fac recorded a liability of $832,500 in
settlement of a portion of the claims made in the Kenyon Zero Storage Matter
relating to a surety bond for which Pro-Fac was the indemnitor. Further, in
anticipation of the settlement of the balance of the Kenyon Zero Storage Matter,
Pro-Fac recorded a liability of $570,000 in the fourth quarter of fiscal 2003.
This liability was paid in fiscal year 2004. The Cooperative incurred
approximately $1.0 million of associated legal costs during fiscal 2003. See the
discussion of Pro-Fac's legal proceedings in "NOTE 11. Other Matters - Legal
Matters" under "Notes to Consolidated Financial Statements" in Part II, Item 8.
of this Report.

Tax (Provision)/Benefit: On June 11, 2003, the Cooperative received notification
from the Internal Revenue Service that effective August 19, 2002 the Cooperative
qualified for tax exempt status as a farmers' cooperative under Section 521 of
the Internal Revenue Code. Exempt cooperatives are permitted to reduce or
eliminate taxable income through the use of special deductions (such as
dividends paid on its common and preferred stock).

It is anticipated that the Cooperative will use these special deductions and
patronage distributions to reduce the Cooperative's taxable income to zero for
periods after August 19, 2002. The fiscal 2003 tax provision related to the
period prior to the effective date of the Cooperative's exempt status (June 30,
2002 to August 19, 2002).


                                       15




<PAGE>


For the period June 30, 2002 to August 19, 2002, the Cooperative had a minimal
tax provision compared to a $28.6 million tax benefit in fiscal 2002. The fiscal
2002 tax benefit primarily resulted from a $41.5 million benefit associated with
the non-cash goodwill impairment charge described below under "Goodwill
Impairment Charge" in "Changes from fiscal 2001 to fiscal 2002". A further
discussion of Pro-Fac's tax matters is included in "NOTE 7. Income Taxes" under
"Notes to Consolidated Financial Statements" in Part II, Item 8 of this Report.

                           **************************

                     CHANGES FROM FISCAL 2002 TO FISCAL 2003

As stated above, through August 18, 2002, Birds Eye Foods was a wholly owned
subsidiary of Pro-Fac. Through August 18, 2002, the results of Pro-Fac were
consolidated with Birds Eye Foods. The consolidated financial statements were
after elimination of intercompany transactions and balances. The following
summarizes the activity of Birds Eye Foods for the period June 30, 2002 through
August 18, 2002:

<TABLE>
<CAPTION>
                                               June 30, 2002 -
(Dollars in Thousands)                         August 18, 2002
                                               ---------------
<S>                                               <C>
Net sales                                         $103,726
Cost of sales                                      (80,644)
                                                  --------
Gross profit                                        23,082
Selling, administrative, and general expense       (15,468)
Other income                                           277
                                                  --------
Operating income                                     7,891
Interest expense                                    (7,747)
                                                  --------
Pretax income                                          144
Tax provision                                          (59)
                                                  --------
   Net income                                     $     85
                                                  ========
</TABLE>

As a result of the Transaction, described in "NOTE 1. Description of Business
and Summary of Significant Accounting Policies" under "Notes to Consolidated
Financial Statements," in Part II, Item 8 of this Report, the results of
operations for the approximately forty-five weeks after August 18, 2002 are not
comparable with those of fiscal 2002. Accordingly, the following is a discussion
of the remaining components included in the results of operations of Pro-Fac for
fiscal 2003.

Equity Income from Birds Eye Holdings LLC: Subsequent to August 18, 2002,
Pro-Fac no longer reports its financial statements on a consolidated basis with
Birds Eye Foods and accounts for its investment in Holdings LLC under the equity
method of accounting. For fiscal 2003, the Cooperative recognized income, under
the equity method, of approximately $2.1 million, from Holdings LLC. The
application of the equity method takes into account Holdings LLC's cumulative
preferred return.

Gain from Transaction with Birds Eye Foods, Inc and Related Agreements: On
August 19, 2002, the Cooperative contributed to the capital of Holdings LLC all
of the shares of Birds Eye Foods' common stock owned by Pro-Fac in exchange for
Class B common units of Holdings LLC representing a then 40.72 percent interest.
Pro-Fac's investment in Birds Eye Foods prior to the Transaction was
approximately $24.9 million. This amount reflects the forgiveness by Birds Eye
Foods of approximately $36.5 million which represented both borrowings for the
working capital needs of Pro-Fac and a $9.4 million demand payable. The value of
the Cooperative's 40.72 percent common equity ownership in Holdings LLC was
estimated at $31.4 million at the date of the Transaction. The Cooperative
recognized a gain of approximately $3.8 million from this exchange.

Pro-Fac and Birds Eye Foods also entered into a letter agreement dated as of the
Closing Date (the "Termination Agreement"), pursuant to which, among other
things, the Marketing and Facilitation Agreement was terminated, and in
consideration of such termination, Pro-Fac is entitled to the payment of a
termination fee of $10.0 million per year for five years, provided that certain
ongoing conditions are met, including maintaining grower membership levels
sufficient to generate certain minimum crop supply. The $10.0 million payment is
payable in quarterly installments to the Cooperative as follows: $4.0 million on
each July 1, and $2.0 million each October 1, January 1, and April 1. Pursuant
to the Termination Agreement, in fiscal 2003, the Cooperative received $4.0
million from Birds Eye Foods on August 19, 2002, $2.0 million on October 1,
2002, $2.0 million on December 31, 2002 and $2.0 million on April 1, 2003.


                                       16




<PAGE>


Payments under the Termination Agreement are considered additional consideration
related to the Transaction. Accordingly, the portion of the payments received
under the Termination Agreement related to Pro-Fac's continuing ownership
percentage are recorded as an adjustment to Pro-Fac's investment in Holdings
LLC. The remaining payments are recognized as additional gain on the Transaction
with Birds Eye Foods in the period received. Accordingly, in fiscal 2003,
Pro-Fac recognized approximately $5.9 million as additional gain from the
receipt of termination payments.

In addition, Pro-Fac and Birds Eye Foods entered into the Transitional Services
Agreement described in the "Description of Business -General Development of
Business" in Part I, Item 1 of this Report and in NOTE 3. "Agreements with Birds
Eye Foods" under "Notes to Consolidated Financial Statements in Part II, Item 8
of this Report." The estimated value of services to be received by Pro-Fac under
the agreement, of approximately $1.0 million, has been reflected as additional
proceeds from the Transaction. Accordingly in fiscal 2003, Pro-Fac recognized
approximately $0.6 million as additional gain from the Transitional Services
Agreement.

As a result of the agreements described above, based on its common equity
ownership, the Cooperative recognized a total gain, in fiscal 2003, of
approximately $10.4 million.

Commercial market value adjustment: At its January 2003 Board meeting, in an
action aimed at improving the Cooperative's short-term liquidity, the Board of
Directors of Pro-Fac determined to deduct 1 percent of the CMV otherwise payable
to Pro-Fac's member-growers for crops supplied by Pro-Fac member-growers through
the Cooperative for the 2002 and 2003 growing seasons. The 1 percent CMV
deduction was withheld from the July 2003 CMV payment and will be withheld from
the July 2004 CMV payments. The Board of Directors of Pro-Fac resolved to review
this recommendation annually. The 1 percent deduction for the 2002 growing
season resulted in approximately $0.6 million of income for fiscal 2003.

Selling, administrative, and general expense: Selling, administrative, and
general expenses totaled $1.4 million for fiscal 2003. During fiscal 2003, the
Cooperative paid approximately $0.4 million to obtain insurance from St. Paul
Mercury Insurance Company and Great American Insurance Company, 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 for
events occurring prior to August 19, 2002 where claims are submitted prior to
August 19, 2008. This insurance has a term expiring on August 19, 2008.

The remaining expenses for fiscal 2003 were for general operating purposes of
the Cooperative.

Legal matters and settlement expenses: During the second quarter of fiscal 2003,
Pro-Fac recorded a liability of $1,250,000 in anticipation of the settlement of
the Blue Line Farms Litigation and the Seifer Trust Litigation. During the
fourth quarter of fiscal 2003, Pro-Fac recorded a liability of $832,500 in
settlement of a portion of the claims made in the Kenyon Zero Storage Matter
relating to a surety bond for which Pro-Fac was the indemnitor. Further, in
anticipation of the settlement of the balance of the Kenyon Zero Storage Matter,
Pro-Fac recorded a liability of $570,000 in the fourth quarter of fiscal 2003.
The Cooperative incurred approximately $1.0 million of associated legal costs
during fiscal 2003. See the discussion of Pro-Fac's legal proceedings in "NOTE
11. Other Matters - Legal Matters" under "Notes to Consolidated Financial
Statements" in Part II, Item 8. of this Report.

Tax (Provision)/Benefit: On June 11, 2003, the Cooperative received notification
from the Internal Revenue Service that effective August 19, 2002 the Cooperative
qualified for tax exempt status as a farmers' cooperative under Section 521 of
the Internal Revenue Code. Exempt cooperatives are permitted to reduce or
eliminate taxable income through the use of special deductions (such as
dividends paid on its common and preferred stock).

It is anticipated that the Cooperative will use these special deductions and
patronage distributions to reduce the Cooperative's taxable income to zero for
periods after August 19, 2002. The fiscal 2003 tax provision related to the
period prior to the effective date of the Cooperative's exempt status (June 30,
2002 to August 19, 2002).

For the period June 30, 2002 to August 19, 2002, the Cooperative had a minimal
tax provision compared to a $28.6 million tax benefit in fiscal 2002. The fiscal
2002 tax benefit primarily resulted from a $41.5 million benefit associated with
a non-cash goodwill impairment charge. A further discussion of Pro-Fac's tax
matters is included in "NOTE 7. Income Taxes" under "Notes to Consolidated
Financial Statements" in Part II, Item 8 of this Report.


                                       17




<PAGE>


                          CRITICAL ACCOUNTING POLICIES

"NOTE 1. Description of Business and Summary of Accounting Policies" under
"Notes to Consolidated Financial Statements" included in Part II, Item 8 of this
Report discusses the significant accounting policies of Pro-Fac. Pro-Fac's
discussion and analysis of its financial condition and results of operations are
based upon its consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States.
The preparation of these financial statements requires Pro-Fac's management to
make estimates, judgments and assumptions that affect the reported amount of
assets, liabilities, revenues and expenses. On an ongoing basis, Pro-Fac
evaluates its estimates.

As a result of the Transaction, Pro-Fac no longer consolidates the results of
Birds Eye Foods. After the Transaction, Pro-Fac's estimates affecting the
financial statements relate primarily to contingencies. Certain accounting
policies deemed critical to Pro-Fac's results of operation or financial position
after the Transaction are discussed below.

Pro-Fac markets and sells its members' crops to food processors, including Birds
Eye Foods. Under the provisions of Emerging Issues Task Force Issue No. 99-19,
"Reporting Revenue Gross Versus Net as an Agent", subsequent to the Transaction,
the Cooperative records activity between Birds Eye Foods, itself and its members
on a net basis.

The Cooperative accounts for its ownership interest in Holdings LLC under the
equity method of accounting. Accordingly, the portion of payments received as a
result of the Transaction related to Pro-Fac's continuing ownership percentage
is recorded as an adjustment to Pro-Fac's investment in Holdings LLC. The
remaining portion is recorded as a gain. Pro-Fac also records its share of the
earnings of Holdings LLC under the equity method of accounting. Pro-Fac's share
of the earnings is after the preferred return on Holdings LLC's preferred units
and accretion recorded by Holdings LLC.

Prior to the Transaction the results of the Cooperative were consolidated with
its then wholly-owned subsidiary, Birds Eye Foods. For fiscal 2002, Birds Eye
Foods considered the following the more important critical estimates and
assumptions used in the preparation of its financial statements, although not
inclusive.

Inventories: Under the FIFO method, the cost of items sold was based upon the
cost of the first such items produced. As a result, the last such items produced
remained in inventory and the cost of these items are used to reflect ending
inventory. Birds Eye Foods priced its inventory at the lower of cost or market
value on the first-in, first-out (FIFO) method.

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

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

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

Identifiable Intangible Assets, Long-Lived Assets, and Goodwill: Birds Eye Foods
assessed the carrying value of its identifiable intangible assets, long-lived
assets, and goodwill whenever events or changes in circumstances indicate that
the carrying amount of the underlying asset may not be recoverable. Certain
factors which may occur and indicate that an impairment exists include, but are
not limited to: significant under performance relative to historical or
projected future operating results; significant changes in the manner of Birds
Eye Foods' use of the underlying assets; and significant adverse industry or
market trends. In the event that the carrying value of assets are determined to
be unrecoverable, Birds Eye Foods would record an adjustment to the respective
carrying value. For additional information about the treatment of goodwill and
intangible assets, see "Note 2. Accounting for Goodwill and Intangible Assets"
under "Notes to Consolidated Financial Statements" in Part II, Item 8 of this
Report.


                                       18




<PAGE>


                         LIQUIDITY AND CAPITAL RESOURCES

As discussed under "General Development of Business " in Part I, Item 1 of this
Report, as a result of the Transaction, Pro-Fac no longer consolidates the
assets and liabilities of Birds Eye Foods in its financial statements. Pro-Fac's
balance sheet does, however, reflect Pro-Fac's interest in Holdings LLC, which,
as described in "NOTE 1. Description of Business and Summary of Significant
Accounting Policies" and "NOTE 2. Accounting for Goodwill and Intangible Assets"
under "Notes to Consolidated Financial Statements" in Part II, Item 8 of this
Report, is accounted for under the equity method.

From and after August 19, 2002 and through and including August 19, 2007,
Pro-Fac's primary source of cash is presently expected to be the $10.0 million
annual payments due to it from Birds Eye Foods pursuant to the Termination
Agreement, the last installment payment of $2.0 million pursuant to that
agreement being payable on April, 1, 2007, and the commercial market value or
"CMV" payments made to it by Birds Eye Foods for crops pursuant to the Amended
and Restated Marketing and Facilitation Agreement. The Termination Agreement and
the Amended and Restated Marketing and Facilitation Agreement are described in
greater detail in the "Description of Business - General Development of
Business" section of this Report. Although Pro-Fac's business strategy is to
expand its sources of cash through expanding the types of products and/or
services it offers, the actual amount of cash that may be generated from
Pro-Fac's expanded operations will depend on how successful Pro-Fac is in
implementing its business strategy, including controlling any associated costs.

Subsequent to August 19, 2007 and prior to any sale (or dissolution) of Holdings
LLC, Pro-Fac's primary source of cash is expected to be the annual
distributions, if any, from Holdings LLC pursuant to the Limited Liability
Company Agreement. As is described in greater detail in the "Description of
Business - General Development of Business" section of this Report, the Limited
Liability Company Agreement provides that, subject to any restrictions contained
in any financing arrangements of Holdings LLC and/or Birds Eye Foods, after
August 19, 2007, Holdings LLC will use commercially reasonable efforts to cause
Birds Eye Foods to distribute annually to Holdings LLC up to $24.8 million of
cash flow from operations of Birds Eye Foods, which Holdings LLC will then
distribute to the holders of its common units. Assuming $24.8 million of annual
distributions, and further assuming that Pro-Fac's distributable interest is
40.50%, Pro-Fac's annual distributable share would be approximately $10.0
million. The actual amount of annual distributions to Pro-Fac, if any, will
depend upon the operating results of Birds Eye Foods for the particular year.

Although CMV payments are a source of cash to Pro-Fac, with the exception of the
Board's decision to deduct 1% of CMV otherwise payable to its grower-members for
crops delivered in 2003 ($0.6 million) and 2004 ($0.7 million), Pro-Fac has
typically paid 100% of CMV to its member-growers. The Pro-Fac Board of Directors
determines annually the amount of CMV that will be paid out to the Pro-Fac
member-growers for crops supplied for the immediately preceding growing season
after taking into account Pro-Fac's need to establish reserves for its
anticipated operating and other expenses.

Any cash generated from expanded products and/or services offerings by Pro-Fac
is currently anticipated to be a secondary source of cash.

In addition to the cash payments to Pro-Fac pursuant to the Termination
Agreement (the last $2.0 million installment payment is payable to Pro-Fac on
April 1, 2007) and the possible cash distributions to Pro-Fac pursuant to the
Limited Liability Company Agreement, Pro-Fac has available up to $1.0 million
per year with interest at 10 percent per annum, until August 19, 2007, under the
Credit Agreement with Birds Eye Foods and amounts available from Manufacturers
and Traders Trust Company ("M&T Bank") as discussed below.

The Cooperative may borrow up to $2.0 million under the terms of a line of
credit with M&T Bank (the "M&T Line of Credit"). Principal amounts borrowed
under the M&T Line of Credit bear interest at .75 basis points above the prime
rate in effect on the day proceeds are disbursed, as announced by M&T Bank, as
its prime rate of interest. Interest is payable monthly. Amounts extended under
the M&T Line of Credit are required to be repaid in full during each year by
July 15, with further borrowings prohibited for a minimum of 60 consecutive days
after such repayment. Pro-Fac's obligations under the M&T Line of Credit are
secured by a security interest granted to M&T in substantially all of its
assets, excluding Pro-Fac's Class B common units owned in Holdings LLC. However,
the collateral does include any distributions made in respect of the Class B
common units and cash payments made by Birds Eye Foods to the Cooperative.

As of June 26, 2004, there was no balance outstanding under the M&T Line of
Credit. As of June 28, 2003, there was a balance outstanding of $500,000 under
the M&T Line of Credit. The balance was repaid in July of 2003.


                                       19




<PAGE>


Under the Transitional Services Agreement, which is described in greater detail
in the "Description of Business - General Development of Business" section of
this Report, Birds Eye Foods provided Pro-Fac certain administrative and other
services until August 19, 2004. Since the termination of that Agreement, Pro-Fac
pays for the services previously provided under that Agreement, including
salary, administrative and other expenses. The Cooperative believes it has
adequate cash resources to fund these expenses.

Net cash available to Pro-Fac, after payment of CMV to Pro-Fac's member-growers,
is used to pay Pro-Fac's operating expenses as well as to pay dividends on its
capital stock and fund repurchases of its common stock. Dividends on Pro-Fac's
stock were $8,134,440, $8,367,570 and $8,369,940 in fiscal 2004, 2003 and 2002,
respectively.

A discussion of "Consolidated Statement of Cash Flows" for the year ended June
26, 2004 follows:

Net cash provided by operating activities of $1.8 million for fiscal 2004
primarily represents the timing of cash receipts from customers other than Birds
Eye Foods and related cash payments to member growers.

Net cash provided by investing activities for fiscal 2004 was $10.0 million
related to the receipt by the Cooperative of $10.0 million from Birds Eye Foods
under the Termination Agreement.

Net cash used in financing activities includes borrowings from Birds Eye Foods
($0.3 million) under the terms of the Credit Agreement offset by payments to M&T
Bank ($0.5 million) under the M&T Line of Credit, repurchases of common stock
($0.5 million) and dividends paid ($8.1 million) by the Cooperative during
fiscal 2004.

At its January 2003 Board meeting, in an action aimed at improving the
Cooperative's short-term liquidity, the Board of Directors of Pro-Fac determined
to suspend the payment of annual dividends on the Cooperative's common stock for
an indefinite period of time and to deduct 1 percent of the CMV otherwise
payable to Pro-Fac's member-growers for crops supplied by Pro-Fac member-growers
through the Cooperative for the 2002 and 2003 growing seasons. The 1 percent CMV
deduction was withheld from the July 2003 ($0.6 million) payments and will be
withheld from the July 2004 ($0.7 million) CMV payments. The Board of Directors
of Pro-Fac will review this recommendation annually.

Pro-Fac believes that its sources of cash described above will be sufficient to
fund its operations and meet its cash requirements for at least the next 12
months. Pro-Fac's ability to fund these requirements will depend on Pro-Fac's
future operations, performance and cash flow and is subject to prevailing
economic conditions and financial, business and other factors, some of which are
beyond Pro-Fac's control.

Pro-Fac guarantees certain obligations of Birds Eye Foods and GLK, LLC. Set
forth below is a schedule of the obligations guaranteed by Pro-Fac at June 26,
2004:

(Dollars in Millions)

<TABLE>
<CAPTION>
Contractual Obligations Guaranteed                     Expiration
----------------------------------                   -------------
<S>                                          <C>     <C>
Senior Subordinated Notes - 11 7/8 Percent   $51.4   November 2008
Subordinated Promissory Note                  38.8   November 2008
</TABLE>

                                  OTHER MATTERS

Guarantees and Indemnifications: Pro-Fac is a guarantor, under an Indenture
dated November 18, 1998, between Birds Eye Foods, the Guarantors named therein
and IBJ Schroder Bank & Trust Company, Inc., as trustee, which Indenture was
amended by a First Supplemental Indenture dated July 22, 2002, among Birds Eye
Foods, the Guarantors named therein and The Bank of New York (as successor
trustee to IBJ Schroder Bank & Trust Company), as trustee, and as further
amended by a Second Supplemental Indenture dated March 1, 2003, of Birds Eye
Foods' obligations under its 11 7/8 percent Senior Subordinated Notes issued by
Birds Eye Foods in fiscal 1999 in the original aggregate principal amount of
$200.0 million. On November 24, 2003, Birds Eye Foods repaid $150.0 million of
these notes. The principal amount is due November 1, 2008. Interest on the Notes
accrues at the rate of 11 7/8 percent per annum and is payable semi-annually in
arrears on May 1 and November 1. Pro-Fac, jointly and severally, guarantees
Birds Eye Foods' obligations under the 11 7/8 percent Senior Subordinated Notes,
including the payment in full when due of all principal and interest on the 11
7/8 percent Senior Subordinated Notes at maturity or otherwise and, in the event
of any extension of time of payment or renewal of any of the 11 7/8 percent
Senior Subordinated Notes, that the Notes will be promptly paid in full when due
pursuant to the terms of any such extension or renewal. In the event of such
shortfall, Pro-Fac would be required to pay any interest payments due as well as
any unpaid principal balance due on the 11 7/8 percent Senior Subordinated
Notes. As of June 26, 2004, the outstanding loan amount, including accrued
interest, was $51.4 million.


                                       20




<PAGE>


As partial consideration for the acquisition in fiscal 1999 of the frozen and
canned vegetable business of Dean Foods Company, Birds Eye Foods issued to Dean
Foods a Subordinated Promissory Note for $30 million aggregate principal amount
due November 22, 2008. The Subordinated Promissory Note is currently owned by
GLK, LLC, a New York limited liability company, whose members are Birds Eye
Foods and GLK Holdings, Inc., which is a wholly owned subsidiary of Birds Eye
Foods. Pro-Fac guarantees Birds Eye Foods' obligations under that Note. Interest
on the Subordinated Promissory Note accrues 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. Interest accruing through November 22, 2003
is required to be paid in kind through the issuance by Birds Eye Foods of
additional subordinated promissory notes identical to the Subordinated
Promissory Note. Birds Eye Foods satisfied this requirement through the issuance
of additional promissory notes. Interest accruing after November 22, 2003 is
payable in cash. Pro-Fac, jointly and severally, guarantees Birds Eye Foods'
obligations under the Subordinated Promissory Note, including the payment in
full when due of all principal and interest on the Note. In the event of such
shortfall, Pro-Fac would be required to pay any interest payments due as well as
any unpaid principal balance due on the Note. As of June 26, 2004, the
outstanding loan amount subject to the Cooperative's guarantee included
principal of $30.0 million and interest of $8.8 million.

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

From time to time, in the ordinary course of its business, Pro-Fac has, or may,
enter into agreements with its customers, suppliers, service providers and
business partners which contain indemnification provisions. Generally, such
indemnification provisions require, the Cooperative to indemnify and hold
harmless the indemnified party(ies) and to reimburse the indemnified party(ies)
for claims, actions, liabilities, losses and expenses in connection with any
personal injuries or property damage resulting from any Pro-Fac products sold or
services provided. Additionally, the Cooperative may from time to time agree to
indemnify and hold harmless its providers of services from claims, actions,
liabilities, losses and expenses relating to their services to Pro-Fac, except
to the extent finally determined to have resulted from the fault of the provider
of services relating to such services. The level of conduct constituting fault
of the service provider will vary from agreement to agreement and may include
conduct which is defined in terms of negligence, gross negligence, willful
misconduct, omissions or other culpable behavior. The term of these
indemnification provisions are generally not limited. The maximum potential
future payments that the Cooperative could be required to make under these
indemnification provisions are unlimited and are not determinable at this time,
as any future payments would be dependent on the type and extent of the related
claims, and all relevant defenses to the claims, which are not estimable.
Historically, costs incurred to resolve claims related to these indemnification
provisions have not been material to the Cooperative's financial position,
results of operations or cash flows.

The Cooperative has by-laws, policies, and agreements under which it indemnifies
its directors and officers from liability for certain events or occurrences
while the directors or officers are, or were, serving at Pro-Fac's request in
such capacities. Pro-Fac indemnifies its officers and directors to the fullest
extent allowed by law. The maximum potential amount of future payments that the
Cooperative could be required to make under these indemnification provisions is
unlimited, but would be affected by all relevant defenses to the claims.

As part of the Transaction, Pro-Fac agreed to indemnify Birds Eye Foods for
certain environmental liabilities exceeding $200,000. This obligation, however,
is only triggered once the aggregate of all liabilities subject to
indemnification under the Unit Purchase Agreement (including those unrelated to
environmental matters) exceeds $10 million.

As of the date of this Report, Pro-Fac does not expect to be required to perform
under the guarantees and indemnifications described above.

Capital Expenditures: Except for purchasing computer hardware and software in
fiscal 2005, estimated to be approximately $40,000, in connection with the
termination of the Transitional Services Agreement, the Cooperative does not
expect to have any material capital expenditures for the foreseeable future.


                                       21




<PAGE>


Supplemental Information on Inflation: The changes in costs and prices within
the Cooperative'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 May 2003, the FASB issued SFAS No. 150,
"Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity." SFAS 150 improves the accounting for certain financial
instruments that, under previous guidance, issuers could account for as equity.
The new Statement requires that those instruments be classified as liabilities
in the balance sheet. This Statement is effective for financial instruments
entered into or modified after May 31, 2003, and otherwise is effective at the
beginning of the first interim period beginning after June 15, 2003, except for
mandatory redeemable financial instruments of nonpublic entities. The adoption
of SFAS 150 did not have a material impact on the Cooperative's results of
operations or consolidated financial statements.

Contractual Obligations

<TABLE>
<CAPTION>
(Dollars in Thousands)                                    Payments due by period
                                              ----------------------------------------------
                                                       Less than    1-3     3-5    More than
                                               Total     1 year    years   years    5 years
                                              ------   ---------   -----   -----   ---------
<S>                                           <C>         <C>        <C>     <C>     <C>
Credit facility with Birds Eye Foods, Inc.*   $1,000      $  0       $0      $0      $1,000
Other non-current liabilities                    832       832        0       0           0
                                              ------      ----      ---     ---      ------
   Total                                      $1,832      $832       $0      $0      $1,000
                                              ======      ====      ===     ===      ======
</TABLE>

*    Amounts borrowed are required to be repaid only upon the sale of Pro-Fac's
     ownership interest in Holdings, LLC or receipt of a distribution from
     Holdings, LLC in connection with the sale of liquidation of all or
     substantially all of the assets of Holdings, LLC or one or more of its
     subsidiaries. Pro-Fac may voluntarily repay amounts borrowed at any time.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Since the Transaction, Pro-Fac is subject to interest rate fluctuations related
to borrowings under the M&T Line of Credit. Amounts borrowed bear interest at
the prime rate. See "NOTE 6. Long-Term Debt" in the Notes to Consolidated
Financial Statements. Information concerning Pro-Fac's use of derivative
instruments and hedging activities prior to August 19, 2002 can be found in
"NOTE 5. Accounting for Derivative Instruments and Hedging Activities" in the
"Notes to Consolidated Financial Statements."


                                       22




<PAGE>


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                          INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
ITEM                                                                        Page
                                                                            ----
<S>                                                                          <C>
Pro-Fac Cooperative, Inc.
   Reports of Independent Registered Public Accounting Firms.............    24
   Consolidated Financial Statements:
      Consolidated Statements of Operations, Allocation of Net Income/
         (Loss), and Comprehensive Income (Loss) for the years ended
         June 26, 2004, June 28, 2003, and June 29, 2002.................    26
      Balance Sheets as of June 26, 2004 and June 28, 2003...............    27
      Consolidated Statements of Cash Flows for the years ended June 26,
         2004, June 28, 2003, and June 29, 2002..........................    28
      Consolidated Statements of Changes in Shareholders' and Members'
         Capitalization and Redeemable Stock for the years ended June 26,
         2004, June 28, 2003, and June 29, 2002..........................    29
      Notes to Consolidated Financial Statements.........................    30
</TABLE>


                                       23




<PAGE>


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders
Pro-Fac Cooperative, Inc.
Rochester, New York

We have audited the accompanying balance sheets of Pro-Fac Cooperative, Inc.
(the "Cooperative") as of June 26, 2004 and June 28, 2003, and the related
consolidated statements of operations, allocation of net income, and
comprehensive income, of cash flows, and of changes in shareholders' and
members' capitalization and redeemable stock for each of the two years in the
period ended June 26, 2004. Our audits also included the 2004 and 2003 financial
statement schedules listed in the Index at Item 15. These financial statements
and financial schedules 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 in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such 2004 and 2003 financial statements present fairly, in all
material respects, the financial position of the Cooperative as of June 26, 2004
and June 28, 2003, and the results of its operations and its cash flows for each
of the two years in the period ended June 26, 2004, in conformity with
accounting principles generally accepted in the United States of America. Also,
in our opinion, the financial statement schedules, when considered in relation
to the basic financial statements taken as a whole, present fairly in all
material respects the information set forth therein.

/s/ Deloitte & Touche LLP
Rochester, New York
September 20, 2004


                                       24




<PAGE>


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

In our opinion, the consolidated financial statements listed in the index
appearing under Item 15(a)(1) on page 56 present fairly, in all material
respects, the financial position of Pro-Fac Cooperative, Inc. and its
subsidiaries the results of their operations and their cash flows for the year
ended June 29, 2002 in conformity with accounting principles generally accepted
in the United States of America. In addition, in our opinion, the financial
statement schedule listed in the index appearing under Item 15(a)(2) on page 56
present fairly, in all material respects, the information set forth therein when
read in conjunction with the related consolidated financial statements. These
financial statements and financial statement schedule are the responsibility of
the Cooperative's management; our responsibility is to express an opinion on
these financial statements and financial statement schedule based on our audit.
We conducted our audit of these statements in accordance with the standards of
the Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. 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 audit provides a
reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP
Rochester, New York
August 28, 2002


                                       25




<PAGE>


                              FINANCIAL STATEMENTS

Pro-Fac Cooperative, Inc.
Consolidated Statements of Operations, Allocation of Net Income/(Loss), and
Comprehensive Income (Loss)
(Dollars in Thousands)

<TABLE>
<CAPTION>
                                                                                 Fiscal Years Ended
                                                                          --------------------------------
                                                                          June 26,   June 28,     June 29
                                                                            2004       2003        2002
                                                                          --------   --------   ----------
<S>                                                                        <C>       <C>        <C>
Net sales                                                                  $     0   $103,726   $1,010,540
Cost of sales                                                                    0    (80,644)    (795,297)
                                                                           -------   --------   ----------
Gross profit                                                                     0     23,082      215,243
Equity income from Birds Eye Holdings LLC                                    3,872      2,134            0
Gain from Transaction with Birds Eye Foods, Inc. and related agreements      6,060     10,361            0
Commercial market value adjustment                                             660        568            0
Selling, administrative, and general expenses (post Transaction)            (1,139)    (1,433)           0
Selling, administrative, and general expenses (pre Transaction)                  0    (15,468)    (117,450)
Legal matters and settlement expenses                                         (273)    (3,720)           0
Income from joint venture                                                        0        277        2,457
Gain from pension curtailment                                                    0          0        2,472
Restructuring                                                                    0          0       (2,622)
Goodwill impairment charge                                                       0          0     (179,025)
                                                                           -------   --------   ----------
Operating income/(loss)                                                      9,180     15,801      (78,925)
Interest income                                                                 23         10            0
Interest expense                                                               (99)    (7,762)     (66,420)
                                                                           -------   --------   ----------
Pretax income/(loss) before dividends and allocation of net proceeds         9,104      8,049     (145,345)
Tax (provision)/benefit                                                          0        (59)      28,561
                                                                           -------   --------   ----------
Net income/(loss)                                                          $ 9,104   $  7,990   $ (116,784)
                                                                           =======   ========   ==========

Allocation of Net Income/(Loss):
   Net income/(loss)                                                       $ 9,104   $  7,990   $ (116,784)
   Dividends on common and preferred stock                                  (8,134)    (8,368)      (8,370)
                                                                           -------   --------   ----------
   Net gain/(deficit)                                                          970       (378)    (125,154)
   Allocation (to)/from earned surplus/(accumulated deficit)                  (970)       378      133,622
                                                                           -------   --------   ----------
   Net income/(loss) available to members                                  $     0   $      0   $    8,468
                                                                           =======   ========   ==========

Allocation of net income/(loss) available to members:
   Payable to members currently                                            $     0   $      0   $    2,117

Allocated to members but retained by the Cooperative:
   Qualified retains                                                             0          0        6,351
                                                                           -------   --------   ----------
   Net income/(loss) available to members                                  $     0   $      0   $    8,468
                                                                           =======   ========   ==========

Net income/(loss)                                                          $ 9,104   $  7,990   $ (116,784)
Other comprehensive income/(loss):
   Unrealized (loss)/gain on hedging activity of equity investee               (53)       142         (412)
   Minimum pension liability of equity investee                               (199)    (4,584)           0
                                                                           -------   --------   ----------
Comprehensive income/(loss)                                                $ 8,852   $  3,548   $ (117,196)
                                                                           =======   ========   ==========
</TABLE>

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


                                       26




<PAGE>


Pro-Fac Cooperative, Inc.
Balance Sheets
(Dollars in Thousands)

<TABLE>
<CAPTION>
                                                                                     June 26,    June 28
                                                                                       2004        2003
                                                                                    ---------   ---------
<S>                                                                                 <C>         <C>
                                      ASSETS
Current assets:
   Cash and cash equivalents                                                        $   3,394   $     367
   Accounts receivable, trade                                                           1,343           0
   Account receivable from Birds Eye Foods, Inc.                                        7,783       8,504
   Current portion of transitional services receivable from Birds Eye Foods, Inc.          71         525
   Prepaid expenses and other current assets                                               10          15
                                                                                    ---------   ---------
         Total current assets                                                          12,601       9,411
Transitional services receivable from Birds Eye Foods, Inc.                                 0          71
Investment in Birds Eye Holdings LLC                                                   21,497      21,937
Investment in CoBank                                                                        0          44
                                                                                    ---------   ---------
         Total assets                                                               $  34,098   $  31,463
                                                                                    =========   =========

            LIABILITIES AND SHAREHOLDERS' AND MEMBERS' CAPITALIZATION

Current liabilities:
   Accounts payable                                                                 $     457   $   1,058
   Accrued interest                                                                        86          14
   Other accrued expenses                                                                 833       1,075
   Amounts due members                                                                 12,077       7,876
                                                                                    ---------   ---------
         Total current liabilities                                                     13,453      10,023
Long-term debt                                                                          1,000       1,200
Other non-current liabilities                                                               0         832
                                                                                    ---------   ---------
         Total liabilities                                                             14,453      12,055
                                                                                    ---------   ---------
Commitments and contingencies
Class B cumulative redeemable preferred stock, liquidation preference $10 per
   share, authorized 500,000 shares; issued and outstanding 10,768
   and 12,109 shares, respectively                                                        108         122
                                                                                    ---------   ---------
Common stock, par value $5, authorized 5,000,000 shares; issued and outstanding
   1,833,738 and 1,927,226, respectively                                                9,169       9,636
                                                                                    ---------   ---------
Shareholders' and members' capitalization:
   Retained earnings allocated to members                                               9,793      14,404
   Non-cumulative preferred stock, par value $25, authorized 5,000,000
      shares; issued and outstanding 28,297 and 29,328 shares, respectively               707         733
   Class A cumulative preferred stock, liquidation preference $25 per share;
      authorized 10,000,000 shares; issued and outstanding 4,789,575
      and 4,604,139 shares, respectively                                              119,741     115,104
   Accumulated deficit                                                               (136,912)   (137,882)
   Special membership interests                                                        21,733      21,733
   Accumulated other comprehensive (loss)/income:
      Unrealized gain on hedging activity of equity investee                               89         142
      Minimum pension liability adjustment of equity investee                          (4,783)     (4,584)
                                                                                    ---------   ---------
         Total shareholders' and members' capitalization                               10,368       9,650
                                                                                    ---------   ---------
         Total liabilities and capitalization                                       $  34,098   $  31,463
                                                                                    =========   =========
</TABLE>

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


                                       27




<PAGE>


Pro-Fac Cooperative, Inc.
Consolidated Statements of Cash Flows
(Dollars in Thousands)

<TABLE>
<CAPTION>
                                                                                          Fiscal Years Ended
                                                                                   -------------------------------
                                                                                   June 26,   June 28,    June 29,
                                                                                     2004       2003        2002
                                                                                   --------   --------   ---------
<S>                                                                                 <C>       <C>        <C>
Cash Flows from Operating Activities:
   Net income/(loss)                                                                $ 9,104   $  7,990   $(116,784)
   Estimated cash payments to Class A members                                             0          0      (2,117)
   Adjustments to reconcile net income/(loss) to net cash provided by/(used in)
      operating activities:
      Goodwill impairment charge                                                          0          0     179,025
      Amortization                                                                      525        144       1,147
      Amortization of debt issue costs and amendment costs and discount on
         subordinated promissory note                                                     0      1,201       5,660
      Interest-in-kind on subordinated promissory note                                    0          0       1,308
      Depreciation                                                                        0      3,833      30,850
      Gain from transaction with Birds Eye Foods, Inc. and related agreements        (6,060)   (10,361)          0
      Equity income from Birds Eye Holdings LLC                                      (3,872)    (2,134)          0
      Equity in undistributed earnings of joint venture                                   0       (277)     (1,795)
      Equity in undistributed earnings of CoBank                                          0          0         (97)
      Provision for deferred taxes                                                        0          0     (31,934)
      Provision for losses on accounts receivable                                         0          0         557
      Change in assets and liabilities, net of effects of business dispositions:
         Accounts receivable                                                           (501)     1,818      16,935
         Inventories and prepaid manufacturing expense                                    0    (33,170)     22,800
         Income taxes payable/refundable                                                  0        (75)      1,817
         Accounts payable and accrued expenses                                       (1,604)    (8,051)    (68,659)
         Amounts due Class A members                                                  4,201      8,649      (2,639)
         Other assets and liabilities                                                     6        675        (141)
                                                                                    -------   --------   ---------
Net cash provided by/(used in) operating activities                                   1,799    (29,758)     35,933
                                                                                    -------   --------   ---------
Cash Flows from Investing Activities:
   Proceeds from Termination Agreement with Birds Eye Foods, Inc.                    10,000     10,000           0
   Purchase of property, plant and equipment                                              0     (2,187)    (15,026)
   Proceeds from disposals of property, plant and equipment                               0          0         595
   Advances (to)/from joint venture                                                       0     (1,512)      4,016
   Proceeds from investment in CoBank                                                    44      1,130       5,114
   Cash at the date of deconsolidation with Birds Eye Foods, Inc.                         0     (5,818)          0
                                                                                    -------   --------   ---------
Net cash provided by/(used in) investing activities                                  10,044      1,613      (5,301)
                                                                                    -------   --------   ---------
Cash Flows from Financing Activities:
   Net proceeds from issuance of short-term debt                                          0     22,000           0
   Net proceeds from Credit Facility with Birds Eye Foods, Inc.                         300        700           0
   Net proceeds from M&T line of credit                                                (500)       500           0
   Payments on long-term debt                                                             0       (292)    (11,790)
   Payments on capital leases                                                             0        (38)       (620)
   Payments on debt amendments                                                            0          0      (1,694)
   Repurchase of stock, net                                                            (482)      (641)     (1,127)
   Cash dividends paid                                                               (8,134)    (8,403)     (8,371)
                                                                                    -------   --------   ---------
Net cash provided by/(used in) financing activities                                  (8,816)    13,826     (23,602)
                                                                                    -------   --------   ---------
Net change in cash and cash equivalents                                               3,027    (14,319)      7,030
Cash and cash equivalents at beginning of period                                        367     14,686       7,656
                                                                                    -------   --------   ---------
Cash and cash equivalents at end of period                                          $ 3,394   $    367   $  14,686
                                                                                    =======   ========   =========

Supplemental Disclosure of Cash Flow Information:
   Cash paid during the year for:
      Interest                                                                      $    27   $  2,840   $  62,901
                                                                                    =======   ========   =========
      Income taxes, net                                                             $     0   $      0   $  (1,250)
                                                                                    =======   ========   =========

Non-cash investing and financing activities:
   Conversion of retains to preferred stock                                         $ 4,611   $  2,643   $       0
                                                                                    =======   ========   =========
   Net income/(loss) allocated to members but retained by the Cooperative           $     0   $      0   $   6,351
                                                                                    =======   ========   =========
   Capital lease obligations incurred                                               $     0   $      0   $   3,185
                                                                                    =======   ========   =========
   Pro-Fac's receipt of common equity ownership in Birds Eye Holdings LLC in
      exchange for Birds Eye Foods common stock                                     $     0   $ 31,400   $       0
                                                                                    =======   ========   =========
</TABLE>

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


                                       28




<PAGE>


Pro-Fac Cooperative, Inc.
Consolidated Statements of Changes in Shareholders' and Members' Capitalization
and Redeemable Stock
(Dollars in Thousands)

<TABLE>
<CAPTION>
                                                                           Fiscal Years Ended
                                                                   ---------------------------------
                                                                    June 26,    June 28,    June 29,
                                                                      2004        2003        2002
                                                                   ---------   ---------   ---------
<S>                                                                <C>         <C>         <C>
Retained earnings allocated to members:
Qualified retains:
   Balance at beginning of period                                  $  14,404   $  17,050   $  10,699
   Net proceeds allocated to members                                       0           0       6,351
   Converted to Class A cumulative preferred stock                    (4,611)     (2,643)          0
   Other                                                                   0          (3)          0
                                                                   ---------   ---------   ---------
   Balance at end of period                                        $   9,793   $  14,404   $  17,050
                                                                   ---------   ---------   ---------

Non-cumulative preferred stock:
   Balance at beginning of period                                  $     733   $     746   $     808
   Conversion to Class A cumulative preferred stock                      (26)        (13)        (62)
                                                                   ---------   ---------   ---------
   Balance at end of period                                        $     707   $     733   $     746
                                                                   ---------   ---------   ---------

Class A cumulative preferred stock:
   Balance at beginning of period                                  $ 115,104   $ 112,448   $ 112,386
   Converted from non-cumulative preferred stock                          26          13          62
   Converted from qualified retains                                    4,611       2,643           0
                                                                   ---------   ---------   ---------
   Balance at end of period                                        $ 119,741   $ 115,104   $ 112,448
                                                                   ---------   ---------   ---------

Earned surplus/(accumulated deficit):
   Balance at beginning of period                                  $(137,882)  $(115,771)  $  17,851
   Conversion to special membership interests                              0     (21,733)          0
   Allocation to/(from) earned surplus/(accumulated deficit)             970        (378)   (133,622)
                                                                   ---------   ---------   ---------
   Balance at end of period                                        $(136,912)  $(137,882)  $(115,771)
                                                                   ---------   ---------   ---------

Special membership interests:
   Balance at beginning of period                                  $  21,733   $       0   $       0
   Conversion from earned surplus                                          0      21,733           0
                                                                   ---------   ---------   ---------
   Balance at end of period                                        $  21,733   $  21,733   $       0
                                                                   ---------   ---------   ---------

Accumulated other comprehensive (loss)/income:
   Balance at beginning of period                                  $  (4,442)  $    (367)  $      45
   Unrealized (loss)/gain on hedging activity of equity investee         (53)        142        (412)
   Minimum pension liability of equity investee                         (199)     (4,584)          0
   Other comprehensive income upon deconsolidation with Birds
      Eye Foods, Inc.                                                      0         367           0
                                                                   ---------   ---------   ---------
Balance at end of period                                           $  (4,694)  $  (4,442)  $    (367)
                                                                   ---------   ---------   ---------

Total shareholders' and members' capitalization                    $  10,368   $   9,650   $  14,106
                                                                   =========   =========   =========

Redeemable stock:
Class B cumulative preferred stock:
   Balance at beginning of period                                  $     122   $     206   $     239
   Repurchased                                                           (14)        (84)        (33)
                                                                   ---------   ---------   ---------
   Balance at end of period                                        $     108   $     122   $     206
                                                                   =========   =========   =========

Common stock:
   Balance at beginning of period                                  $   9,636   $  10,193   $  11,287
   Repurchased                                                          (467)       (557)     (1,094)
                                                                   ---------   ---------   ---------
   Balance at end of period                                        $   9,169   $   9,636   $  10,193
                                                                   =========   =========   =========
</TABLE>

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


                                       29




<PAGE>


                            PRO-FAC COOPERATIVE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Pro-Fac Cooperative, Inc. ("Pro-Fac" or the "Cooperative"), is a New York
agricultural cooperative which markets crops grown by its members. Birds Eye
Foods, Inc. ("Birds Eye Foods"), until August 19, 2002, was a wholly-owned
subsidiary of Pro-Fac. Through August 19, 2002, Birds Eye Foods described its
business as having four primary product lines including: vegetables, fruits,
snacks, and canned meals. The majority of each of the product line's net sales
is within the United States. In addition, all Birds Eye Foods operating
facilities, excluding one in Mexico, are within the United States.

For the fiscal years ended June 26, 2004, June 28, 2003 and June 29, 2002,
approximately 75%, 98% and 100%, respectively, of the crops purchased by Pro-Fac
from its members were sold to Birds Eye Foods.

The Transaction: On August 19, 2002 (the "Closing Date"), pursuant to the terms
of the Unit Purchase Agreement dated as of June 20, 2002 (the "Unit Purchase
Agreement"), by and among Pro-Fac, Birds Eye Foods, at the time a New York
corporation and a wholly-owned subsidiary of Pro-Fac, and Vestar/Agrilink
Holdings LLC, a Delaware limited liability company ("Vestar/Agrilink Holdings"):

     o    Pro-Fac contributed to the capital of Birds Eye Holdings LLC
          ("Holdings, LLC", a Delaware limited liability company, all of the
          shares of Birds Eye Foods common stock owned by Pro-Fac, constituting
          100% of the issued and outstanding shares of Birds Eye Foods capital
          stock, in consideration for Class B common units of Holdings LLC,
          representing a 40.72% common equity ownership at the closing date; and

     o    Vestar/Agrilink Holdings and certain co-investors (collectively,
          "Vestar") contributed cash in the aggregate amount of $175.0 million
          to the capital of Holdings LLC, in consideration for preferred units
          and Class A common units and warrants, which warrants were immediately
          exercised to acquire additional Class A common units, representing, at
          the closing date, 56.24% of the common equity of Holdings LLC,
          inclusive of the additional Class A common units issued to Vestar upon
          exercise of the warrants. The co-investors are either under common
          control with, or have delivered an unconditional voting proxy to,
          Vestar/Birds Eye Holdings. The Class A common units entitle the owner
          thereof - Vestar - to two votes for each Class A common unit held. All
          other Holdings LLC common units entitle the holder(s) thereof to one
          vote for each common unit held. Accordingly, Vestar has a voting
          majority of all common units.

The transactions contemplated in and consummated pursuant to the Unit Purchase
Agreement, are referred to herein collectively as the "Transaction." For
additional information about the transactions consummated, including resulting
agreements, see "NOTE 3. Agreements with Birds Eye Foods " under these "Notes to
Consolidated Financial Statements".

Immediately following Pro-Fac's contribution of its shares of Birds Eye Foods
common stock to Holdings LLC, Holdings LLC contributed those shares to Birds Eye
Holdings Inc. (formerly Agrilink Holdings Inc., "Holdings Inc."), a Delaware
corporation and a direct, wholly-owned subsidiary of Holdings LLC, and Birds Eye
Foods became an indirect, wholly-owned subsidiary of Holdings LLC.

Also, as part of the Transaction, Stephen R. Wright, then the General Manager
and Secretary of Pro-Fac, together with executive officers of Birds Eye Foods,
and certain other members of Birds Eye Foods management, entered into
subscription agreements with Holdings LLC to acquire (using a combination of
cash and promissory notes issued to Holdings LLC) an aggregate of approximately
$1.3 million of Class C common units and Class D common units of Holdings LLC,
representing approximately 3.04 percent of the common equity ownership at the
Closing Date.

In addition, as part of the Transaction, certain amounts owed by Pro-Fac to
Birds Eye Foods were forgiven in a non-cash transaction. The amounts forgiven
were approximately $36.5 million and represented both borrowings for the working
capital needs of Pro-Fac and a $9.4 million demand receivable.

As a result of the Transaction, Pro-Fac no longer reports its financial
statements on a consolidated basis with that of Birds Eye Foods. As outlined
above, Pro-Fac owns Class B common units of Holdings LLC. Subsequent to the
Transaction, Pro-Fac accounts for its investment in Holdings LLC under the
equity method of accounting.


                                       30




<PAGE>


Limited Liability Company Agreement of Holdings LLC: Pro-Fac and Vestar,
together with others, including Stephen R. Wright, are parties to a limited
liability company agreement dated August 19, 2002 (and as amended from time to
time, the "Limited Liability Company Agreement") that contains terms and
conditions relating to the management of Holdings LLC and its subsidiaries
(including Birds Eye Foods), the distribution of profits and losses and the
rights and limitations of members of Holdings LLC. As of June 26, 2004, Pro-Fac
owned 40.49 percent of the common equity of Holdings LLC through its ownership
of 321,429 Class B common units.

The Limited Liability Company Agreement provides, among other things, that
Holdings LLC's distributable assets, which include cash receipts from
operations, investing and financing, net of expenses, will be distributed to
Holdings LLC's members as determined by Holdings LLC's management committee. In
general, those distributable assets are distributable as follows:

     o    first, 100 percent to the holders of preferred units, pro rata, until
          each preferred unit holder's current (non-compounded) preferred return
          has been reduced to zero;

     o    second, 100 percent to the holders of preferred units, pro rata, until
          each preferred unit holder's unpaid preferred return has been reduced
          to zero and then, pro rata among the preferred unit holders until each
          preferred unit holder's unreturned preferred capital contribution has
          been reduced to zero;

     o    third, 100 percent to the holders of Class A common units, Class B
          common units, Class C common units, and Class E common units, pro
          rata, until each such unit holder's unreturned common capital
          contribution has been reduced to zero; and

     o    fourth, after the holders of Class A common units, Class B common
          units, Class C common units and Class E common units have been paid
          their unreturned common capital contributions, the balance of
          distributable assets, if any, will be distributed to the holders of
          Class A common units, Class B common units, Class C common units,
          Class D common units and Class E common units. The amount
          distributable to such holders is determined based upon the number of
          Class C common units and Class D common units outstanding and upon
          whether certain performance hurdles have been satisfied. As the
          various performance hurdles are satisfied, the percentage of any
          remaining distributable assets distributable to the holders of Class A
          common units, Class B common units and Class E common units decreases
          from approximately 96 percent to approximately 90 percent, the
          percentage of remaining distributable assets distributable to the
          holders of Class C common units decreases from approximately 2 percent
          to 1.872 percent and the percentage of remaining distributable assets
          distributable to the holders of Class D common units increases from
          approximately 2 percent to approximately 8.112 percent.

Prior to August 19, 2005, distributions of assets by Holdings LLC in excess of
the amount necessary to pay to preferred unit holders their current preferred
returns in full requires the consent of the preferred unit holders holding at
least a majority of the preferred units. A preferred unit holder's preferred
return is equal to 15 percent per annum, of the preferred unit holder's
preferred capital contributions, less distributions made in respect to such
preferred units. The preferred return accrues on a daily basis and compounds
quarterly (3.75 percent quarterly). In the event of a dissolution, Holdings
LLC's assets (after payment of debts and obligations) will be distributed to its
members in accordance with the above distribution schedule.

The Limited Liability Company Agreement further provides that, subject to
restrictions contained in any financing arrangements of Holdings LLC or its
subsidiaries (including Birds Eye Foods), after August 19, 2007 and prior to a
sale (or dissolution) of Holdings LLC, Holdings LLC will use commercially
reasonable efforts to cause Birds Eye Foods to distribute annually to Holdings
LLC up to $24.8 million of cash flow from the operations of Birds Eye Foods,
which Holdings LLC will then distribute, notwithstanding the "first", "second"
and "third" tier distribution preferences described above, to the holders of its
Class A common units, Class B common units, Class C common units, Class D common
units and Class E common units in accordance with the "fourth" distribution tier
as if no performance hurdle has been satisfied. Further, upon the occurrence of
certain specified events, including the sale of Holdings LLC and at any time
after August 19, 2010, the holders of preferred units are entitled, at their
option, to have their preferred units redeemed and, at any time after August 19,
2005, Holdings LLC has the option to redeem the preferred units.

Further, under the Limited Liability Company Agreement, the management committee
of Holdings LLC is authorized to issue up to 16,000 Class C common units and up
to 16,000 Class D common units. The Limited Liability Company Agreement further
provides that the holders of a majority of the total voting power of the
outstanding Class A, Class B and Class E common units can cause Holdings LLC to
create and issue additional units, provided no such issuance would adversely
affect the relative economic rights of the holders of Class A, Class B, Class C
and Class D common units and further subject to the amendment provisions of the
Limited Liability Company Agreement. The Limited Liability Company Agreement
provides, in part, that the management committee of Holdings LLC can amend the
Agreement, to provide for the issuance of any other type of preferred unit,
whether of an existing or new class, with the consent of the preferred unit
holders, and to provide for the issuance of any other class of units or other
securities, with the consent of each unit holder, if any, who would be adversely
affected by such issuance as to any such unit holder's limited liability or as
to the alteration of any such unit holder's rights to receive allocations or
distributions unless such alterations of rights are in connection with a debt or
equity financing, a restructuring, a recapitalization or other transaction in
which Holdings LLC will receive an investment or contribution to its capital or
in connection with the issuance of equity to employees or directors of Holdings
LLC, its subsidiaries or to third party lenders. The issuance of additional
common units will reduce the percentage ownership of the current holders of
common units in Holdings LLC, including Pro-Fac.


                                       31




<PAGE>


Securityholders Agreement: Holdings LLC, Pro-Fac and Vestar, together with
others, including officers of Birds Eye Foods (the "Management Investors"),
entered into a securityholders agreement dated August 19, 2002 (and as amended
from time to time, the "Securityholders Agreement") containing terms and
conditions relating to the transfer of membership interests in and the
management of Holdings LLC. Among other things, the Securityholders Agreement
includes a voting agreement pursuant to which the holders of common units agree
to vote their common units and to take any other action necessary to cause the
authorized number of members or directors for each of the respective management
committees or boards of directors of Holdings LLC, Holdings, Inc. and Birds Eye
Foods to be set at not less than nine but not more than 11, as determined by
Vestar, and to elect or cause to be elected to the respective management
committees or boards of directors of Holdings LLC, Holdings, Inc. and Birds Eye
Foods, six members/directors designated by Vestar, two members/directors
designated by Pro-Fac, one member/director who shall be the chief executive
officer of Birds Eye Foods and two members/directors designated by Vestar who
shall be independent of Holdings LLC, its subsidiaries' management (including
Birds Eye Foods) and Vestar.

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

The Securityholders Agreement also provides:

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

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

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

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

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 to the current year's presentation.

Fiscal Year: The fiscal year of Pro-Fac ends on the last Saturday in June.
Fiscal 2004, 2003 and 2002 comprised 52 weeks.

Consolidation: The consolidated financial statements include the Cooperative
and, through August 18, 2002, Birds Eye Foods. The financial statements are
after elimination of significant intercompany transactions and balances.
Subsequent to the Transaction, Pro-Fac uses the equity method to account for its
investment in Holdings LLC.

New Accounting Pronouncements: In May 2003, the FASB issued SFAS No. 150,
"Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity." SFAS 150 improves the accounting for certain financial
instruments that, under previous guidance, issuers could account for as equity.
The new Statement requires that those instruments be classified as liabilities
in the balance sheet. This Statement is effective for financial instruments
entered into or modified after May 31, 2003, and otherwise is effective at the
beginning of the first interim period beginning after June 15, 2003, except for
mandatorily redeemable financial instruments of nonpublic entities. The adoption
of SFAS 150 did not have a material impact on the Cooperative's consolidated
financial statements.


                                       32




<PAGE>


Restructuring: On June 23, 2000, Birds Eye Foods sold its pickle business to
Dean Pickle and Specialty Product Company. As part of that transaction, Birds
Eye Foods agreed to contract pack Nalley and Farman's pickle products for a
period of two years, ending June 2002. In anticipation of the completion of this
co-pack contract, Birds Eye Foods initiated restructuring activities for
approximately 140 employees in its facility located in Tacoma, Washington. The
total restructuring charge recorded in the first quarter of fiscal 2002 amounted
to approximately $1.1 million and was primarily comprised of employee
termination benefits. The entire $1.1 million provided was paid as of June 28,
2003.

In addition, on October 12, 2001, Birds Eye Foods announced a reduction of
approximately 7 percent of its nationwide workforce, for a total of
approximately 300 positions. The reductions were part of an ongoing focus on
low-cost operations, and included both operational and administrative personnel.
In conjunction with the reductions, Birds Eye Foods recorded a charge against
earnings of approximately $1.6 million in the second quarter of fiscal 2002,
primarily comprising employee termination benefits. The entire $1.6 million
provided was paid as of June 29, 2002.

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 26, 2004 or June 28, 2003.

Accounts Receivable, Trade: The Cooperative provides credit in the normal course
of business to the majority of its third-party customers. The Cooperative
performs periodic credit evaluations of its customers' financial condition and
generally does not require collateral. When necessary, the Cooperative maintains
allowances for doubtful customer accounts for estimated losses resulting from
the inability of its customers to make required payments based on prior
experience. There was no allowance for doubtful accounts at June 26, 2004.

Investment in Birds Eye Holdings, LLC: Pro-Fac accounts for its investment in
Holdings LLC under the equity method of accounting. The Cooperative includes its
share, based on ownership, of the change in Holdings LLC's minimum pension
liabilities and unrealized holding gains and losses on hedging transactions in
the Cooperative's other comprehensive income (loss).

The following schedule sets forth summarized financial information of Holdings
LLC as of June 26, 2004 and June 28, 2003 and for the fiscal years then ended
(dollars in thousands):

<TABLE>
<CAPTION>
                                         June 26, 2004   June 28, 2003
                                         -------------   -------------
<S>                                         <C>             <C>
Current assets                              $359,965        $476,583
Non-current assets                           420,072         432,827
                                            --------        --------
Total assets                                $780,037        $909,410
                                            ========        ========

Current liabilities                         $148,362        $159,733
Non-current liabilities                      387,764         538,164
Preferred LLC units                          178,768         152,583
Total members' capital                        65,143          58,930
                                            --------        --------
Total liabilities and members' capital      $780,037        $909,410
                                            ========        ========
</TABLE>

<TABLE>
<CAPTION>
                                              Fiscal Year Ended(1)
                                         -----------------------------
                                         June 26, 2004   June 28, 2003
                                         -------------   -------------
<S>                                         <C>             <C>
Net sales                                   $843,398        $764,900
Gross profit                                 190,535         179,661
Income from continuing operations             27,580          21,619
Net income                                  $ 31,902        $ 20,783
</TABLE>

(1)  During fiscal 2004, Holdings LLC sold certain businesses. These businesses
     are classified as discontinued and their operations are therefore, excluded
     from continuing operations. The information for the year ended June 28,
     2003 has been reclassified to reflect the discontinuance of these
     operations.


                                       33




<PAGE>


Holdings LLC has $137.5 million of preferred units which accrue a preferred
return at the rate of 15 percent per annum, based on a 360 day year and
compounded quarterly. The preferred units are subject to redemption at the
option of at least a majority of the preferred units upon an initial public
offering of Holdings LLC or any subsidiary, upon the sale of Holdings LLC or
after August 19, 2010. The preferred units may also be redeemed at the option of
Holdings LLC after August 19, 2005 at a premium. At the time of issuance of the
preferred units, $3.9 million in fees were charged against the proceeds.
Holdings LLC is accreting the preferred units up to their redemption value
through transfers from retained earnings using the effective interest method to
the date of earliest redemption. At June 26, 2004, Pro-Fac owned 40.49 percent
of the remaining common equity interest in Holdings LLC. The preferred return on
Holdings LLC's preferred units and the accretion thereon and expense related to
termination payments, aggregating $22.2 million, net, for fiscal year 2004, are
taken into account in determining Pro-Fac's share of the earnings of Holdings
LLC under the equity method of accounting.

Investment in CoBank: The Cooperative's investment in CoBank was required as a
condition of previous borrowings. These securities were not physically issued by
CoBank, but rather the Cooperative was notified as to their monetary value. The
investment was carried at cost plus the Cooperative's share of the undistributed
earnings of CoBank (that portion of patronage refunds not distributed currently
in cash). During fiscal 2004, the Cooperative's investment was returned.

Earnings on the investment in CoBank in fiscal year 2002 amounted to $160,500.

Property, Plant, and Equipment and Related Lease Arrangements: Prior to August
19, 2002, property, plant, and equipment was depreciated over the estimated
useful lives of the assets using the straight-line method, half-year convention,
over the following estimated useful lives:

<TABLE>
<CAPTION>
                           Years
                           -----
<S>                        <C>
Land improvements             20
Buildings                  15-40
Machinery and equipment.    3-17
</TABLE>

Lease arrangements were capitalized when such leases convey substantially all of
the risks and benefits incidental to ownership. Capital leases were 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 were separately classified on the balance sheet. The
recorded value represents an estimate of net realizable value.

Goodwill: Prior to August 19, 2002, goodwill included the cost in excess of the
fair value of net tangible assets acquired in purchase transactions. Under the
current guidance of SFAS No. 142, goodwill was not amortized, but instead tested
annually for impairment. For additional information about goodwill and
intangible assets, see "NOTE 2. Accounting for Goodwill and Intangible Assets"
under these "Notes to Consolidated Financial Statements".

Other Intangible Assets: Prior to August 19, 2002, other intangible assets
included non-competition agreements and a trademark royalty agreement. Other
intangible assets were amortized on a straight-line basis over three to sixteen
years.

Other Assets: Prior to August 19, 2002, other assets were primarily comprised of
debt issuance costs. Debt issuance costs were amortized, generally using the
straight line method, over the term of the debt. Amortization expense was
approximately $2.8 million in fiscal 2002.

Derivative Financial Instruments: Prior to August 19, 2002, derivative financial
instruments were utilized by Birds Eye Foods to hedge interest rate risk,
commodity price risk, and foreign currency related risk and are not held for
trading purposes. For additional information about derivative financial
instruments and hedging transactions, see "NOTE 5. Accounting for Derivative
Instruments and Hedging Activities" under these "Notes to Consolidated Financial
Statements".

Income Taxes: Income taxes are provided on income for financial reporting
purposes. On June 11, 2003, the Cooperative received notification from the
Internal Revenue Service that effective August 19, 2002 the Cooperative would
qualify for tax exempt status as a farmers' cooperative under Section 521 of the
Internal Revenue Code. Exempt cooperatives are permitted to reduce or eliminate
taxable income through the use of special deductions (such as dividends paid on
its common and preferred stock).

It is anticipated that the Cooperative will use these special deductions and
patronage distributions to reduce the Cooperative's taxable income to zero for
periods after August 19, 2002. The fiscal 2003 tax provision relates to the
period prior to the effective date of the exempt status (June 30, 2002 to August
19, 2002).


                                       34




<PAGE>


Pension: Birds Eye Foods had several pension plans and participated in various
union pension plans which on a combined basis cover substantially all hourly
employees. Charges to income with respect to plans sponsored by Birds Eye Foods
are based upon actuarially determined costs. Pension liabilities were funded by
periodic payments to the various pension plan trusts. After the Transaction,
since August 19, 2002, Pro-Fac does not have any pension plans. Under the equity
method of accounting, Pro-Fac includes its share, based on ownership, of the
change in Holdings LLC's minimum pension liabilities in Pro-Fac's other
comprehensive income (loss). For additional information about Birds Eye Foods
pension plans and disclosure regarding the curtailment of various pension
benefits during fiscal 2002, see "NOTE 8. Pension, Profit Sharing, and Other
Employee Benefits" under these "Notes to Consolidated Financial Statements".

Casualty Insurance: Birds Eye Foods was insured for workers compensation and
automobile liability through a primarily self-insured program. Birds Eye Foods
accrued for the estimated losses from both asserted and unasserted claims. The
estimate of the liability for unasserted claims arising from unreported
incidents was based on an analysis of historical claims data. After the
Transaction, since August 19, 2002, Pro-Fac does not have workers compensation
or automobile insurance coverage.

Revenue Recognition: Under the provisions of Emerging Issues Task Force Issue
No. 99-19, "Reporting Revenue Gross as a Principal Versus Net as an Agent,"
subsequent to the Transaction, the Cooperative records activity among Birds Eye
Foods and other customers, itself, and its members on a net basis.

Birds Eye Foods recognized revenue on shipments on the date the merchandise was
received by the customer and title transfers. Product sales were reported net of
applicable cash discounts, and sales allowances and discounts.

Gain from Transaction with Birds Eye Foods, Inc and Related Agreements: On
August 19, 2002, the Cooperative contributed to the capital of Holdings LLC all
of the shares of Birds Eye Foods common stock owned by Pro-Fac in exchange for
Class B common units of Holdings LLC representing a 40.72 percent interest as at
the Closing Date. Pro-Fac's net investment in Birds Eye Foods prior to the
Transaction was approximately $24.9 million. This amount reflects the
forgiveness by Birds Eye Foods of approximately $36.5 million which represented
both borrowings for the working capital needs of Pro-Fac and a $9.4 million
demand payable. The value of the Cooperative's 40.72 percent common equity
ownership in Holdings LLC was estimated at $31.4 million at the Closing Date of
the Transaction. The Cooperative recognized a gain of approximately $3.8 million
from this exchange in fiscal 2003.

Pro-Fac and Birds Eye Foods also entered into a letter agreement dated as of the
Closing Date (the "Termination Agreement"), pursuant to which, among other
things, the Marketing and Facilitation Agreement was terminated, and in
consideration of such termination, Pro-Fac is entitled to the payment of a
termination fee of $10.0 million per year for five years, provided that certain
ongoing conditions are met, including maintaining grower membership levels
sufficient to generate certain minimum crop supply. The $10.0 million payment is
payable in quarterly installments to the Cooperative as follows: $4.0 million on
each July 1, and $2.0 million each October 1, January 1, and April 1. Pursuant
to the Termination Agreement, in fiscal 2004, the Cooperative received $10.0
million, as scheduled. Pursuant to the Termination Agreement, in fiscal 2003,
the Cooperative received $4.0 million from Birds Eye Foods on August 19, 2002,
$2.0 million on October 1, 2002, $2.0 million on January 1, 2003 and $2.0
million on April 1, 2003.

Payments under the Termination Agreement are considered additional consideration
related to the Transaction. Accordingly, the portion of the payments received
under the Termination Agreement representing Pro-Fac's continuing ownership
percentage is recorded as an adjustment to Pro-Fac's investment in Holdings LLC.
The remaining portion of the payments is recognized as additional gain on the
Transaction with Birds Eye Foods in the period it is received. Accordingly, in
fiscal 2004 and 2003, Pro-Fac recognized approximately $6.1 million and $5.9
million, respectively, as additional gain from the receipt of the termination
payments.

In addition, Pro-Fac and Birds Eye Foods entered into the Transitional Services
Agreement described in "NOTE 3. Agreements with Birds Eye Foods" under the
"Notes to Consolidated Financial Statements." The estimated value of services to
be received by Pro-Fac under the agreement, of approximately $1.0 million, has
been reflected as additional proceeds from the Transaction. Accordingly, in
fiscal 2003, Pro-Fac recognized approximately $0.6 million as additional gain
from the Transitional Services Agreement.

As a result of the agreements described above, based on its common equity
ownership, the Cooperative recognized a total gain, in fiscal 2004 and 2003, of
approximately $6.1 million and $10.4 million, respectively.

Shipping and Handling Expense: Shipping and handling expenses were included as a
component of cost of sales by Birds Eye Foods.

Advertising: Production costs of commercials and programming were charged to
operations in the year first aired. The costs of other advertising promotion and
marketing programs were charged in the year incurred. Advertising expense
incurred in fiscal year 2002 amounted to approximately $18.2 million. After the
Transaction, since August 19, 2002, Pro-Fac has no advertising expense.


                                       35




<PAGE>


Environmental Expenditures: Environmental expenditures that pertained to current
operations were expensed or capitalized by Birds Eye Foods, consistent with
Birds Eye Foods capitalization policy. Expenditures that resulted from the
remediation of an existing condition caused by past operations that did not
contribute to current or future revenues were expensed. Liabilities were
recorded when remedial activities were probable, and the cost could be
reasonably estimated.

Income from Joint Venture: Represents earnings received from the investment in
Great Lakes Kraut Company, LLC, a joint venture formed between Birds Eye Foods
and Flanagan Brothers, Inc. For information about changes in Birds Eye Foods'
investment in Great Lakes Kraut LLC in fiscal 2003, see "NOTE 4. Investment in
Joint Venture" under these "Notes to Consolidated Financial Statements

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 (Loss): Under SFAS No. 130, the Cooperative is required to
display comprehensive income and its components as part of the financial
statements. Comprehensive income (loss) is comprised of net earnings and other
comprehensive income (loss), which includes certain changes in equity that are
excluded from net earnings (loss). In fiscal 2004, the Cooperative included
adjustments of its equity investee, Holdings LLC, for minimum pension
liabilities ($0.2 million) and unrealized holding losses on hedging transactions
($0.1 million) in other comprehensive income (loss). In fiscal 2003, the
Cooperative included adjustments of its equity investee, Holdings LLC, for an
increase in minimum pension liabilities ($4.6 million) and unrealized holding
gains on hedging transactions ($0.1 million) 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
     $0 and $44,000 at June 26, 2004 and June 28, 2003, respectively. As there
     is no market price for this investment, a reasonable estimate of fair value
     is not possible.

     Long-Term Debt: The fair value of the long-term debt is estimated based on
     the quoted market prices for the same or similar issues or on the current
     rates offered for debt of the same remaining maturities. For additional
     information about Long-Term Debt, see "Note 6. Long Term Debt" under these
     "Notes to Consolidated Financial Statements."

NOTE 2. ACCOUNTING FOR GOODWILL AND INTANGIBLE ASSETS

Prior to August 19, 2002, the results of the Cooperative were consolidated with
its then wholly-owned subsidiary, Birds Eye Foods. After the Transaction, since
August 19, 2002, Pro-Fac has no goodwill or intangible assets.

In June 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets." SFAS No. 142 addresses financial accounting and reporting for acquired
goodwill and other intangible assets, and is effective for fiscal years
beginning after December 15, 2001. Effective July 1, 2001, Birds Eye Foods
adopted SFAS No. 142, which requires that goodwill not be amortized, but instead
be tested at least annually for impairment and expensed against earnings when
the carrying amount of the reporting unit's goodwill exceeds its implied fair
value. Birds Eye Foods completed the required impairment evaluation of goodwill
and other intangible assets in conjunction with its adoption of SFAS No. 142
which indicated no impairment existed at that time. During the quarter ended
June 29, 2002, Birds Eye Foods identified certain indicators of possible
impairment of its goodwill. The main indicators of impairment included the
recent deterioration of general economic conditions, lower valuations resulting
from current market declines, modest category declines in segments in which
Birds Eye Foods operates, and the completion of the terms of the Transaction
with Pro-Fac and Vestar/Birds Eye Holdings. These factors indicated an erosion
in the market value of Birds Eye Foods since the adoption of SFAS No. 142.

As outlined under SFAS No. 142, the impairment test adhered to was a two-step
process. The first step was a review as to whether there was an indication that
goodwill was impaired. To do this, Birds Eye Foods identified its reporting
units and determined the carrying value of each by assigning Birds Eye Foods'
assets and liabilities, including existing goodwill. Birds Eye Foods then
determined the fair value of each reporting unit by using a combination of
comparable food industry trading and transaction multiples, including the
implied multiple in the Transaction with Pro-Fac and Vestar/Agrilink Holdings.


                                       36




<PAGE>


In the second step, Birds Eye Foods compared its implied fair value of the
affected reporting units to its carrying value to measure the amount of the
impairment. In the fourth quarter of fiscal 2002, Birds Eye Foods recorded a
one-time, pretax, non-cash charge of approximately $179.0 million to reduce the
carrying value of its goodwill. The tax benefit associated with this non-cash
charge was approximately $41.5 million.

A summary of changes in Birds Eye Foods' goodwill during fiscal 2002 by business
segment is outlined as follows:

(Dollars in Thousands)

<TABLE>
<CAPTION>
               June 30,                                   June 29,
                 2001     Adjustments (1)   Impairments     2002
               --------   ---------------   -----------   --------
<S>            <C>            <C>            <C>           <C>
Vegetables     $187,407       $(1,076)       $(139,984)    $46,347
Fruits            1,654             0                0       1,654
Snacks            8,209             0                0       8,209
Canned Meals     21,069             0          (21,069)          0
Other            17,972             0          (17,972)          0
               --------       -------        ---------     -------
Goodwill       $236,311       $(1,076)       $(179,025)    $56,210
               ========       =======        =========     =======
</TABLE>

(1)  In fiscal 2002, certain acquisition related contingencies expired. As a
     result, goodwill was adjusted.

As outlined in SFAS No. 142, certain intangibles with a finite life are required
to continue to be amortized. In fiscal 2002, Birds Eye Foods recorded
amortization expense of approximately $1.1 million related to intangible assets
with a finite life.

NOTE 3. AGREEMENTS WITH BIRDS EYE FOODS

In connection with the Transaction, Birds Eye Foods and Pro-Fac entered into
several agreements effective as of the Closing Date, including the following:

Termination Agreement: Pro-Fac and Birds Eye Foods entered into a letter
agreement dated as of the Closing Date (the "Termination Agreement"), pursuant
to which, among other things, the marketing and facilitation agreement between
Pro-Fac and Birds Eye Foods (the "Marketing and Facilitation Agreement") was
terminated and, in consideration of such termination, Birds Eye Foods agreed to
pay Pro-Fac a termination fee of $10.0 million per year for five years, provided
that certain ongoing conditions are met, including maintaining grower membership
levels sufficient to generate certain minimum crop supply.

Historically, Birds Eye Foods paid 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 Birds Eye Foods, it may be more or less than the price Birds Eye Foods would
pay in the open market in the absence of the Agreement. For the fiscal years
2004, 2003, and 2002, the CMV for all crops supplied by Pro-Fac amounted to
$66.0 million, $56.8 million, and $71.7 million, respectively. As of June 26,
2004 and June 28, 2003, Birds Eye Foods owed the Cooperative $7.8 million and
$8.5 million, respectively, and Pro-Fac owed its members $12.1 million and $7.9
million, respectively, for crops delivered for the 2004 and 2003 growing
seasons.

Under the Marketing and Facilitation Agreement, in any year in which Birds Eye
Foods had earnings on products which were processed from crops supplied by
Pro-Fac ("Pro-Fac Products"), Birds Eye Foods paid 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 Birds Eye Foods (before dividing with
Pro-Fac). In years in which Birds Eye Foods had losses on Pro-Fac products,
Birds Eye Foods reduced the CMV it would have otherwise paid to Pro-Fac by 90
percent of such losses, but in no case by more than 50 percent of all pretax
losses of Birds Eye Foods (before dividing with Pro-Fac). Additional patronage
income was paid to Pro-Fac for services provided to Birds Eye 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 were determined at the end of the fiscal year, but were
accrued on an estimated basis during the year. For fiscal year 2002, such
additional patronage income amounted to $16.8 million. Pursuant to the terms of
the Transaction, the parties agreed that under the Marketing and Facilitation
Agreement, the one-time, non-cash impairment charge would be excluded from the
additional patronage income calculation. Accordingly, patronage income in fiscal
2002 was calculated excluding the impairment charge recognized by Birds Eye
Foods in the fourth quarter. Under the Marketing and Facilitation Agreement,
Pro-Fac was required to reinvest at least 70 percent of the additional patronage
income in Birds Eye Foods. Since Pro-Fac's acquisition of Birds Eye in 1994, and
prior to August 19, 2002, Pro-Fac invested an additional $50.8 million.


                                       37




<PAGE>


Transitional Services Agreement: Pro-Fac and Birds Eye Foods entered into a
transitional services agreement (the "Transitional Services Agreement") dated as
of the Closing Date, pursuant to which Birds Eye Foods agreed to provide Pro-Fac
certain administrative and other services at no charge to Pro-Fac, other than
reimbursement of the incremental and out-of-pocket costs associated with
performing those services for Pro-Fac for a period of 24 months from the Closing
Date. Pursuant to its terms, the Transitional Services Agreement terminated on
August 19, 2004. Under the Transitional Services Agreement, the general manager
of Pro-Fac was also an employee of Birds Eye Foods, reporting to the chief
executive officer of Birds Eye Foods with respect to his duties for Birds Eye
Foods, and to the Pro-Fac Board of Directors with respect to duties performed by
him for Pro-Fac. All other individuals performing services under the
Transitional Services Agreement were employees of Birds Eye Foods and reported
to the chief executive officer (or other representatives) of Birds Eye Foods.
Stephen R. Wright, who was the General Manager and Secretary of Pro-Fac during
fiscal year 2004, was employed by Birds Eye Foods through August 19, 2004
serving as executive vice president - investor relations of Birds Eye Foods. As
an employee of Birds Eye Foods, Mr. Wright's salary was paid by Birds Eye Foods.
Effective August 19, 2004, Mr. Wright and two other individuals previously
employed by Birds Eye Foods and providing services to Pro-Fac under the
Transitional Agreement became employees of Pro-Fac.

Amended and Restated Marketing and Facilitation Agreement. Pro-Fac and Birds Eye
Foods entered into an amended and restated marketing and facilitation agreement
dated as of the Closing Date (the "Amended and Restated Marketing and
Facilitation Agreement"). The Amended and Restated Marketing and Facilitation
Agreement supersedes and replaces the Marketing and Facilitation Agreement and
provides that, among other things, Pro-Fac will be Birds Eye Foods' preferred
supplier of crops. Birds Eye Foods will continue to pay Pro-Fac the CMV of crops
supplied by Pro-Fac in installments corresponding to the dates of payment by
Pro-Fac to its members for crops delivered. The processes for determining CMV
under the Amended and Restated Marketing and Facilitation Agreement are
substantially the same as the processes used under the Marketing and
Facilitation Agreement. Birds Eye Foods makes payments to Pro-Fac of an
estimated CMV for a particular crop year, subject to adjustments to reflect the
actual CMV following the end of such year. Commodity committees of Pro-Fac meet
with Birds Eye Foods management to establish CMV or receivable guidelines,
review calculations, and report to a joint CMV committee of Pro-Fac and Birds
Eye Foods. Unlike the Marketing and Facilitation Agreement, however, the Amended
and Restated Marketing and Facilitation Agreement does not permit Birds Eye
Foods to offset its losses from products supplied by Pro-Fac or require it to
share with Pro-Fac its profits and it does not require Pro-Fac to reinvest in
Birds Eye Foods any part of Pro-Fac's patronage income.

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

Under the Amended and Restated Marketing and Facilitation Agreement, Birds Eye
Foods determines the amount of crops which Birds Eye Foods will acquire from
Pro-Fac for each crop year. If the amount to be purchased by Birds Eye Foods
during a particular crop year does not meet (i) a defined crop amount or (ii) a
defined target percentage of Birds Eye Foods' needs for each particular crop,
then certain shortfall payments will be made by Birds Eye Foods to Pro-Fac. The
defined crop amounts and targeted percentages are set based on Birds Eye Food's
anticipated raw product needs for the particular crop year. The shortfall
payment provisions of the agreement include a maximum shortfall payment,
determined for each crop that can be paid over the term of the Amended and
Restated Marketing and Facilitation Agreement. The aggregate shortfall payment
amounts for all crops covered under the agreement cannot exceed $20 million over
the term of the agreement.

Unless terminated earlier, the Amended and Restated Marketing and Facilitation
Agreement will continue in effect until August 19, 2012. Birds Eye Foods may
terminate the Amended and Restated Marketing and Facilitation Agreement prior to
August 19, 2012 upon the occurrence of certain events, including in connection
with a change in control transaction affecting Birds Eye Foods or Holdings Inc.
However, in the event Birds Eye Foods terminates the Amended and Restated
Marketing and Facilitation Agreement as a result of a change in control
transaction within three years of the Closing Date, Birds Eye Foods must pay to
Pro-Fac a termination fee of $20.0 million (less the total amount of any
shortfall payments previously paid to Pro-Fac under the Amended and Restated
Marketing and Facilitation Agreement). Also, if, during the first three years
after the Closing Date, Birds Eye Foods sells one or more portions of its
business, and if the purchaser does not continue to purchase the crops
previously purchased by Birds Eye Foods with respect to the transferred
business, then such failure will be taken into consideration when determining if
Birds Eye Foods is required to make any shortfall payments to Pro-Fac. After
such three-year period, Birds Eye Foods may sell portions of its business and
the volumes of crop purchases previously made by Birds Eye Foods with respect to
such transferred business will be disregarded for purposes of determining
shortfall payments.

In addition, as part of the Transaction, $36.5 owed by Pro-Fac to Birds Eye
Foods was forgiven, including both borrowings for the working capital needs of
Pro-Fac and a $9.4 million demand receivable.


                                       38




<PAGE>


NOTE 4. INVESTMENT IN JOINT VENTURE

On July 1, 1997, Birds Eye 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
("GLK"), operated as a New York limited liability company with ownership and
earnings divided equally between the two companies. Birds Eye Foods provided
working capital loans to the GLK within limitations imposed under debt
agreements. The joint venture was accounted for using the equity method of
accounting. Summarized financial information of GLK is as follows as of and for
the fiscal year ended June 29, 2002:

Condensed Statement of Earnings
(Dollars in Thousands)

<TABLE>
<S>                           <C>
Net sales                     $36,324
Gross profit                  $ 5,008
Operating income              $ 3,465
Net income                    $ 4,914
</TABLE>

Birds Eye Foods reached an agreement with Flanagan Brothers resulting in a
transfer of the operating business of GLK to a newly-formed subsidiary of
Flanagan Brothers, effective March 2, 2003. Pro-Fac continues to guarantee
certain debt as a result of this transaction (See "Note 11. Other Matters -
Guarantees and Indemnifications" under these "Notes to Consolidated Financial
Statements.")

NOTE 5. ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Prior to August 19, 2002, the results of the Cooperative were consolidated with
its then wholly-owned subsidiary, Birds Eye Foods.

On June 25, 2000, the Cooperative adopted 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.

Birds Eye Foods was exposed to changes in foreign currency exchange rates,
certain commodity prices, and interest rates, which could have adversely
affected its results of operations and financial position.

Foreign Currency: Birds Eye Foods managed its foreign currency related risk
primarily through the use of foreign currency forward contracts. The contracts
held by Birds Eye Foods were denominated in Mexican pesos.

Commodity Prices: Birds Eye Foods was exposed to commodity price risk related to
forecasted purchases of corrugated (unbleached kraftliner) and polyethylene in
its manufacturing process. To mitigate this risk, Birds Eye Foods entered into
swap agreements designated as cash flow hedges of its forecasted corrugated
purchases.

NOTE 6. LONG-TERM DEBT

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

(Dollars in Thousands)

<TABLE>
<CAPTION>
                                                            June 26,   June 28,
                                                              2004       2003
                                                            --------   --------
<S>                                                          <C>        <C>
Credit facility with Birds Eye Foods, Inc.                   $1,000     $  700
Line of credit Manufacturers and Traders Trust Company            0        500
                                                             ------     ------
Total debt                                                    1,000      1,200
Less current portion                                              0          0
                                                             ------     ------
Total long-term debt                                         $1,000     $1,200
                                                             ======     ======
</TABLE>


                                       39




<PAGE>


Credit Agreement: Birds Eye Foods and Pro-Fac have entered into a credit
agreement, dated August 19, 2002 (the "Credit Agreement"), pursuant to which
Birds Eye Foods has agreed to make available to Pro-Fac loans in an aggregate
principal amount of up to $5.0 million (the "Credit Facility "). Pro-Fac is
permitted to draw down up to $1.0 million per year under the Credit Facility,
unless Birds Eye Foods is prohibited from making such advances under the terms
of certain third party indebtedness of Birds Eye Foods. The amount of the Credit
Facility will be reduced, on a dollar-for-dollar basis, to the extent of certain
distributions made by Holdings LLC to Pro-Fac in respect of its ownership in
Holdings LLC. Pro-Fac has pledged all of its Class B common units in Holdings
LLC as security for advances under the Credit Facility. Advances outstanding
under the Credit Agreement bear interest at 10% per annum. Amounts borrowed and
interest are required to be paid only upon sale of Pro-Fac's ownership interest
in Holdings LLC or receipt of a distribution from Holdings LLC in connection
with the sale or liquidation of all or substantially all of the assets of
Holding LLC or one or more of its subsidiaries. Pro-Fac may voluntarily repay
amounts borrowed and interest at any time. As of June 26, 2004 and June 28,
2003, there was an outstanding principal amount of $1.0 million and $0.7
million, respectively, under the Credit Facility.

Line of Credit : The Cooperative may borrow up to $2.0 million under the terms
of a line of credit (the "M&T Line of Credit") from Manufacturers and Traders
Trust Company ("M&T Bank"). As of June 26, 2004 and June 28, 2003, $0.0 million
and $0.5 million, respectively, was outstanding under the M&T Line of Credit.
Principal amounts borrowed bear interest at .75 basis points above the prime
rate (prime rate was 4.25% at June 26, 2004) in effect on the day proceeds are
disbursed, as announced by M&T Bank, as its prime rate of interest. Interest is
payable monthly. Amounts extended under the M&T Line of Credit are required to
be repaid in full during each year by July 15, with further borrowings
prohibited for a minimum of 60 consecutive days after such repayment. The first
required paydown date was July 15, 2004. The Cooperative's obligations under the
M&T Line of Credit are secured by a security interest granted to M&T Bank in
substantially all of the assets of the Cooperative, excluding its Class B common
units owned in Holdings LLC. However, the collateral does include any
distributions made in respect of the Class B common units and cash payments made
by Birds Eye Foods to the Cooperative.

Fair Value: The estimated fair value of Pro-Fac's long-term debt outstanding was
approximately $1.0 million and $1.2 million at June 26, 2004 and June 28, 2003,
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 Pro-Fac for debt with similar maturities.

NOTE 7. INCOME TAXES

On June 11, 2003 the Cooperative received notification from the Internal Revenue
Service that effective August 19, 2002 the Cooperative qualified for tax exempt
status as a farmers' cooperative under Section 521 of the Internal Revenue Code.
Exempt cooperatives are permitted to reduce or avoid taxation through the use of
special deductions (such as dividends paid on its common and preferred stock).
It is anticipated that the Cooperative will use these special deductions and
patronage distributions to reduce taxable income to zero for periods after
August 19, 2002.

Effective on August 19, 2002 the Board of Directors of the Cooperative amended
its By-laws to pay patronage distributions on a tax basis. Prior to this
amendment the Cooperative's patronage distributions were made on a financial
statement basis. The amendment was made to more closely connect the potential
patronage distributions to the cash flow of the Cooperative. Benefit/(provision)
for taxes on income for periods before August 19, 2002, the date the Cooperative
received tax-exempt status, include the following:

(Dollars in Thousands)

<TABLE>
<CAPTION>
                                                             Fiscal Years Ended
                                                            -------------------
                                                            June 28,   June 29,
                                                              2003       2002
                                                            --------   --------
<S>                                                         <C>        <C>
Federal -
   Current                                                   $(2,331)   $(1,547)
   Deferred                                                    2,253     28,741
                                                             -------    -------
                                                                 (78)    27,194
                                                             -------    -------
State and foreign -
   Current                                                      (389)    (1,825)
   Deferred                                                      408      3,192
                                                             -------    -------
                                                                  19      1,367
                                                             -------    -------
Tax (provision)/benefit                                      $   (59)   $28,561
                                                             =======    =======
</TABLE>


                                       40




<PAGE>


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

<TABLE>
<CAPTION>
                                                                   Fiscal Years Ended
                                                                   -------------------
                                                                   June 28,   June 29,
                                                                     2003       2002
                                                                   --------   --------
<S>                                                                 <C>        <C>
Statutory federal rate                                               35.0%      35.0%
State and foreign income taxes, net of federal income tax effect     (0.2)       1.0
Dividend paid deduction                                             (34.4)       0.0
Allocation to members                                                 0.0        2.0
Goodwill and other intangible assets                                  0.0      (17.4)
Meals and entertainment                                               0.1       (0.1)
Other, net                                                            0.2       (0.8)
                                                                    -----       ----
Effective Tax Rate                                                    0.7%      19.7%
                                                                    =====       ====
</TABLE>

NOTE 8. PENSIONS, PROFIT SHARING, AND OTHER EMPLOYEE BENEFITS

Prior to August 19, 2002, the results of the Cooperative were consolidated with
its then wholly-owned subsidiary, Birds Eye Foods. As of June 26, 2004, the
Cooperative had no employees.

Pensions: Birds Eye Foods had primarily noncontributory defined-benefit plans
covering substantially all hourly employees. The benefits for these plans were
based primarily on years of service and employees' pay near retirement. Birds
Eye Foods' funding policy was consistent with the funding requirements of
Federal law and regulations. Plan assets consisted principally of common stocks,
corporate bonds and US government obligations. For purposes of this disclosure,
all defined-benefit pension plans have been combined.

Birds Eye Foods amended its Master Salaried Retirement Plan to freeze benefit
accruals effective September 28, 2001. Participants who, on that date, were
actively employed and who had attained age 40, completed 5 years of vesting
service, and whose sum of age and vesting services was 50 or more, were
grandfathered. Grandfathered participants are entitled to continue to earn
benefit service in accordance with the provisions of the plan with respect to
periods of employment after September 28, 2001 but in no event beyond September
28, 2006. Under the provisions of SFAS No. 88, "Accounting for Settlements and
Curtailments of Defined Benefit Pension Plans and for Termination Benefits,"
these benefit changes resulted in the recognition of a $2.5 million net
curtailment gain for the year ended June 29, 2002.

Birds Eye Foods also participated in several union sponsored pension plans. It
was not possible to determine Birds Eye Foods' relative share of the accumulated
benefit obligations or net assets for these plans. Contributions to these plans
were paid when incurred and billed by the sponsoring union or plan.

Net periodic benefit cost in fiscal year 2002 is comprised of the following:

<TABLE>
<S>                                                                   <C>
Components of net periodic benefit cost:
   Service cost                                                       $  4,227
   Interest cost                                                         7,604
   Expected return on plan assets                                       (8,931)
   Amortization of prior service cost                                      124
   Amortization of gain                                                   (609)
                                                                      --------
Net periodic benefit cost - Company plans                                2,415
Net periodic benefit cost - union plans                                    841
                                                                      --------
Total periodic benefit cost                                              3,256
Gain from pension curtailment, net                                      (2,472)
                                                                      --------
Total pension cost                                                    $    784
                                                                      ========
Weighted-average assumptions:
   Discount rate                                                           7.4%
   Expected return on plan assets                                      8.0/9.5%
   Rate of compensation increase                                       3.8/3.5%
</TABLE>

Birds Eye Foods maintained a non-tax qualified Supplemental Executive Retirement
Plan ("SERP") which provided additional retirement benefits to two prior
executives of Birds Eye Foods who retired prior to November 4, 1994. In December
2000, Birds Eye Foods adopted an additional SERP to provide additional
retirements benefits to an executive officer of Birds Eye Foods.


                                       41




<PAGE>


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

Postretirement Benefits Other Than Pensions: Birds Eye Foods sponsored benefit
plans that provided post-retirement medical and life insurance benefits for
certain current and former employees. Generally, other than pensions, Birds Eye
Foods did not pay retirees' benefit costs. Various exceptions existed, which
evolved from union negotiations, early retirement incentives and existing
retiree commitments from acquired companies.

Birds Eye Foods had not prefunded any of its retiree medical or life insurance
liabilities. Consequently there were no plan assets held in a trust, and there
was no expected long-term rate of return assumption for purposes of determining
the annual expense.

Net periodic benefit cost in fiscal 2002 is comprised of the following:

<TABLE>
<S>                                                         <C>
Components of net periodic benefit cost:
   Service cost                                             $ 126
   Interest cost                                              492
   Amortization of prior service cost                        (141)
   Amortization of loss                                       201
                                                            -----
   Net periodic benefit cost                                $ 678
                                                            =====
Weighted-average assumptions:
   Discount rate                                              7.4%
   Expected return on plan assets                             N/A
   Rate of compensation increase                              3.8%
</TABLE>

Birds Eye Foods 401(k) Plan: Under the Birds Eye Foods 401(k) Plan ("401(k)"),
Birds Eye Foods made matching contributions to the plan for the benefit of
employees who elected to defer a portion of their salary into the plan. During
fiscal 2002, the Cooperative allocated approximately $1.3 million in the form of
matching contributions to the plan.

In addition, Birds Eye Foods also maintained a Non- Qualified 401(k) Plan in
which the Cooperative allocated matching contributions for the benefit of
"highly compensated employees" as defined under Section 414(q) of the Internal
Revenue Code. Birds Eye Foods allocated $0.3 million during fiscal 2002 in the
form of matching contributions to this plan.

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

On June 26, 2002, the Cooperative terminated the Equity Value Plan and all
benefit payments have been made.

NOTE 9. OPERATING SEGMENTS

After August 18, 2002, Pro-Fac conducts its operations in one industry segment -
the marketing and supply of its members' crops, including raw fruits and
vegetables.

Prior to August 19, 2002, the results of the Cooperative were consolidated with
its then wholly-owned subsidiary, Birds Eye Foods.

Prior to August 19, 2002, Birds Eye Foods described its business as having four
primary product lines: vegetables, fruits, snacks and canned meals. The
following operating segment information is based on Birds Eye Food's historical
segment information.


                                       42




<PAGE>


Birds Eye Foods accounted for segments using Statement of Financial Accounting
Standards No. 131, "Disclosures about Segments of an Enterprise" (SFAS No. 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 made the majority of its operating decisions based upon
Birds Eye Foods' significant product lines, Birds Eye Foods elected to utilize
significant product lines in determining its operating segments. Birds Eye
Foods' four primary operating segments were as follows: vegetables, fruit,
snacks, and canned meals.

The vegetable product line consisted of canned and frozen vegetables, chili
beans, and various other products. Branded products within the vegetable
category included Birds Eye, Birds Eye Voila!, Birds Eye Simply Grillin', Birds
Eye Hearty Spoonfuls, Freshlike, Veg-All, McKenzies, and Brooks Chili Beans. The
fruit product line consisted of canned and frozen fruits including fruit
fillings and toppings. Branded products within the fruit category included
Comstock and Wilderness. The snack product line consisted of potato chips,
popcorn and other corn-based snack items. Branded products within the snacks
category included 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 included canned meat products such as chilies, stew, and soups, and
various other ready-to-eat prepared meals. Branded products within the canned
meals category included Nalley. Other product lines primarily represented salad
dressings. Branded products within the "other category" included Bernstein's and
Nalley.

The following table illustrates Birds Eye Foods' operating segment information
for the year ended June 29, 2002:

<TABLE>
<S>                                                                    <C>
(Dollars in Millions)
Net Sales:
   Vegetables                                                          $  727.9
   Fruits                                                                 111.4
   Snacks                                                                  88.1
   Canned Meals                                                            46.0
   Other                                                                   37.1
                                                                       --------
       Total                                                           $1,010.5
                                                                       ========

Operating income:
   Vegetables                                                          $   67.2
   Fruits                                                                  17.8
   Snacks                                                                   6.6
   Canned Meals                                                             5.2
   Other                                                                    3.5
                                                                       --------
         Total                                                            100.3
Gain from pension curtailment                                               2.4
Restructuring expense                                                      (2.6)
Goodwill impairment charge                                               (179.0)
                                                                       --------
Total consolidated operating (loss)/income                                (78.9)
Interest expense                                                          (66.4)
                                                                       --------
Pretax (loss)/income before dividends and allocation of
   net proceeds                                                        $ (145.3)
                                                                       ========

Total Assets:
   Vegetables                                                          $  649.2
   Fruits                                                                  74.8
   Snacks                                                                  40.5
   Canned Meals                                                            25.6
   Other                                                                   42.2
   Assets held for sale                                                     3.9
                                                                       --------
       Total                                                           $  836.2
                                                                       ========

Depreciation expense:
   Vegetables                                                          $   22.8
   Fruits                                                                   3.9
   Snacks                                                                   2.2
   Canned Meals                                                             1.0
   Other                                                                    1.0
                                                                       --------
     Total                                                             $   30.9
                                                                       ========

Amortization Expense:
   Vegetables                                                          $    0.9
   Snacks                                                                   0.2
                                                                       --------
       Total                                                           $    1.1
                                                                       ========
</TABLE>


                                       43




<PAGE>


(Dollars in Millions)

<TABLE>
<S>                     <C>
Capital expenditures:
   Vegetables           $12.6
   Fruits                 1.3
   Snacks                 0.7
   Canned Meals           0.3
   Other                  0.1
                        -----
                        $15.0
                        =====
</TABLE>

NOTE 10. COMMON STOCK AND CAPITALIZATION

The following table illustrates the Cooperative's shares authorized, issued, and
outstanding at June 26, 2004 and June 28, 2003.

<TABLE>
<CAPTION>
                                                                    Shares Issued and Outstanding
                                                                          Fiscal Years Ended
                                                Par      Shares     -----------------------------
                                               Value   Authorized   June 26, 2004   June 28, 2003
                                              ------   ----------   -------------   -------------
<S>                                           <C>      <C>            <C>             <C>
Common Stock                                  $ 5.00    5,000,000     1,833,738       1,927,226
Non-Cumulative Preferred Stock                $25.00    5,000,000        28,297          29,328
Class A Cumulative Preferred Stock            $ 1.00   10,000,000     4,789,575       4,604,139
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 Redeemable
   Preferred Stock                            $ 1.00      500,000        10,768          12,109
</TABLE>

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 26, 2004, there were 522 holders of Pro-Fac common
stock. Common stock may be transferred to another grower only with the 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 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.

The Class B common stock had been held by former Pro-Fac members. At June 30,
2001, the Cooperative had 723,229 shares of Class B common stock issued and
outstanding and 153 holders of such shares. On July 19, 2001, Pro-Fac
repurchased its Class B Common Stock and special membership interests. In March
2002, the Cooperative amended and restated its certificate of incorporation to
eliminate its Class B common stock. No dividends were paid on Class B common
stock in fiscal 2002.

In fiscal 2004, 2003, and 2002, cash dividends paid on common stock were $0,
$509,638, and $564,369, respectively.

At its January 2003 Board meeting, the Board of Directors of Pro-Fac determined
to suspend the payment of annual dividends on the Cooperative's common stock for
an indefinite period of time.

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 share 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
26, 2004, the number of Class A cumulative preferred stock record holders was
1,770.

The Class B, Series I, 10 percent cumulative redeemable preferred stock (the
"Class B Stock") was issued to Birds Eye Foods' employees pursuant to an
Employee Stock Purchase Plan which has been terminated. Historically, at least
once a year, Pro-Fac plans to offer to repurchase at least 5 percent of the
outstanding shares of Class B Stock. Shares are repurchased for cash at $10 per
share plus all accrued and unpaid dividends, the stated redemption price.


                                       44




<PAGE>


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 Redeemable
Preferred Stock                                       $1.00 per share paid annually.
</TABLE>

Subsequent to June 26, 2004, 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 approximately $2.0
million and were paid in July 2004.

Qualified 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 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.

When, as and if determined by the Board of Directors, retains convert into
shares of Class A cumulative preferred stock. The Board of Directors, however,
has tentatively decided that conversion of matured retains into Class A
cumulative preferred stock, will not be considered by the Board of Directors as
a possible treatment of the retains issued for fiscal year 2002 and any retains
issued thereafter. This decision will not impact retains issued for years prior
to fiscal 2002.

Earned Surplus: (Accumulated deficit)/earned surplus consists of accumulated
(losses)/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.

Special Membership Interests: In conjunction with the Transaction, the Pro-Fac
Board of Directors determined that it was in the best interests of Pro-Fac and
its members to make certain changes to the Cooperative's Certificate of
Incorporation and Bylaws. Included in these changes was the creation of Pro-Fac
special membership interests.

The special membership interests were allocated to the then current and former
members of Pro-Fac who had made patronage deliveries to or on behalf of Pro-Fac
in the six fiscal years ended June 29, 2002, in proportion to the patronage
deliveries made by those members in each case during that six fiscal year
period. The aggregate amount of special membership interest allocated is equal
to Pro-Fac's earned surplus as of June 29, 2002, calculated in a manner
consistent with the past custom and practice of Pro-Fac and ignoring only
effects of the non-cash impairment charge recorded in the fourth quarter of
fiscal 2002. The purpose of the allocation of the special membership interests
was to preserve for the then current and former members at the date of the
Transaction, the book appreciation in value of their former investment in Birds
Eye Foods.

NOTE 11. OTHER MATTERS

Legal Matters: The Cooperative is party to various 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 the Cooperative's
business, financial condition, and results of operations. Further, no such
proceedings are known to be contemplated by any governmental authorities. The
Cooperative maintains general liability insurance coverage in amounts deemed to
be adequate by the Board of Directors.

Guarantees and Indemnifications: Pro-Fac is a guarantor, under an Indenture
dated November 18, 1998, between Birds Eye Foods, the Guarantors named therein
and IBJ Schroder Bank & Trust Company, Inc., as trustee, which Indenture was
amended by a First Supplemental Indenture dated July 22, 2002, among Birds Eye
Foods, the Guarantors named therein and The Bank of New York (as successor
trustee to IBJ Schroder Bank & Trust Company), as trustee, and as further
amended by a Second Supplemental Indenture dated March 1, 2003, of Birds Eye
Foods' obligations under its 11 7/8 percent Senior Subordinated Notes issued by
Birds Eye Foods in fiscal 1999 in the original aggregate principal amount of
$200.0 million. On November 24, 2003, Birds Eye Foods repaid $150.0 million of
these notes. The principal amount is due November 1, 2008. Interest on the Notes
accrues at the rate of 11 7/8 percent per annum and is payable semi-annually in
arrears on May 1 and November 1. Pro-Fac, jointly and severally, guarantees
Birds Eye Foods' obligations under the 11 7/8 percent Senior Subordinated Notes,
including the payment in full when due of all principal and interest on the 11
7/8 percent Senior Subordinated Notes at maturity or otherwise and, in the event
of any extension of time of payment or renewal of any of the 11 7/8 percent
Senior Subordinated Notes, that the Notes will be promptly paid in full when due
pursuant to the terms of any such extension or renewal. In the event of such
shortfall, Pro-Fac would be required to pay any interest payments due as well as
any unpaid principal balance due on the 11 7/8 percent Senior Subordinated
Notes. As of June 26, 2004, the outstanding loan amount, including accrued
interest, was $51.4 million.


                                       45




<PAGE>


As partial consideration for the acquisition in fiscal 1999 of the frozen and
canned vegetable business of Dean Foods Company, Birds Eye Foods issued to Dean
Foods a Subordinated Promissory Note for $30 million aggregate principal amount
due November 22, 2008. The Subordinated Promissory Note is currently owned by
GLK, LLC, a New York limited liability company, whose members are Birds Eye
Foods and GLK Holdings, Inc., which is a wholly owned subsidiary of Birds Eye
Foods. Pro-Fac guarantees Birds Eye Foods' obligations under that Note. Interest
on the Subordinated Promissory Note accrues 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. Interest accruing through November 22, 2003
is required to be paid in kind through the issuance by Birds Eye Foods of
additional subordinated promissory notes identical to the Subordinated
Promissory Note. Birds Eye Foods satisfied this requirement through the issuance
of additional promissory notes. Interest accruing after November 22, 2003 is
payable in cash. Pro-Fac, jointly and severally, guarantees Birds Eye Foods'
obligations under the Subordinated Promissory Note, including the payment in
full when due of all principal and interest on the Note. In the event of such
shortfall, Pro-Fac would be required to pay any interest payments due as well as
any unpaid principal balance due on the Note. As of June 26, 2004, the
outstanding loan amount subject to the Cooperative's guarantee included
principal of $30.0 million and interest of $8.8 million.

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

From time to time, in the ordinary course of its business, Pro-Fac has, or may,
enter into agreements with its customers, suppliers, service providers and
business partners which contain indemnification provisions. Generally, such
indemnification provisions require, the Cooperative to indemnify and hold
harmless the indemnified party(ies) and to reimburse the indemnified party(ies)
for claims, actions, liabilities, losses and expenses in connection with any
personal injuries or property damage resulting from any Pro-Fac products sold or
services provided. Additionally, the Cooperative may from time to time agree to
indemnify and hold harmless its providers of services from claims, actions,
liabilities, losses and expenses relating to their services to Pro-Fac, except
to the extent finally determined to have resulted from the fault of the provider
of services relating to such services. The level of conduct constituting fault
of the service provider will vary from agreement to agreement and may include
conduct which is defined in terms of negligence, gross negligence, willful
misconduct, omissions or other culpable behavior. The term of these
indemnification provisions are generally not limited. The maximum potential
future payments that the Cooperative could be required to make under these
indemnification provisions are unlimited and are not determinable at this time,
as any future payments would be dependent on the type and extent of the related
claims, and all relevant defenses to the claims, which are not estimable.
Historically, costs incurred to resolve claims related to these indemnification
provisions have not been material to the Cooperative's financial position,
results of operations or cash flows.

The Cooperative has by-laws, policies, and agreements under which it indemnifies
its directors and officers from liability for certain events or occurrences
while the directors or officers are, or were, serving at Pro-Fac's request in
such capacities. Pro-Fac indemnifies its officers and directors to the fullest
extent allowed by law. The maximum potential amount of future payments that the
Cooperative could be required to make under these indemnification provisions is
unlimited, but would be affected by all relevant defenses to the claims.

As part of the Transaction, Pro-Fac agreed to indemnify Birds Eye Foods for
certain environmental liabilities exceeding $200,000. This obligation, however,
is only triggered once the aggregate of all liabilities subject to
indemnification under the Unit Purchase Agreement (including those unrelated to
environmental matters) exceeds $10 million.

As of the date of this Report, Pro-Fac does not expect to be required to perform
under the guarantees and indemnifications described above.

Rent commitment: Pro-Fac has agreed to rent office space from Birds Eye Foods
commencing August 19, 2004 at an annual rent of approximately $12,600
(approximately $1,050 per month).

Prior to August 19, 2002, Birds Eye Foods leased certain assets. Rent expense
was approximately $11.9 million for fiscal 2002.

Related party transaction: Substantially all purchases are from member-growers
of the Cooperative. For fiscal years 2004, 2003 and 2002, approximately 75%,
98% and 100%, respectively, of all crops purchased by Pro-Fac from its members
were sold to its equity investee, Birds Eye Foods.


                                       46




<PAGE>


NOTE 12. QUARTERLY FINANCIAL DATA (UNAUDITED)

Quarterly financial information for the fiscal years ended June 26, 2004 and
June 28, 2003 appears in the following table.

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

(Dollars in Thousands Except Per Share)

<TABLE>
<CAPTION>
                                                            Quarters
                                         ----------------------------------------------
Fiscal 2004                                 1        2        3        4     Total Year
                                         ------   ------   ------   ------   ----------
<S>                                      <C>      <C>      <C>      <C>        <C>
Net sales                                $    0   $    0   $    0   $    0     $    0
Gross profit                             $    0   $    0   $    0   $    0     $    0
Pretax income before dividends,
   and allocation of net proceeds        $1,859   $3,514   $1,712   $2,019     $9,104
Net income                               $1,859   $3,514   $1,712   $2,019     $9,104
</TABLE>

<TABLE>
<CAPTION>
                                                              Quarters
                                         -------------------------------------------------
Fiscal 2003                                  1        2         3        4      Total Year
                                         --------   ------   ------   -------   ----------
<S>                                      <C>        <C>      <C>      <C>        <C>
Net sales                                $103,726   $    0   $    0   $     0    $103,726
Gross profit                             $ 23,082   $    0   $    0   $     0    $ 23,082
Pretax income/(loss) before dividends,
   and allocation of net proceeds        $  6,234   $3,164   $  937   $(2,286)   $  8,049
Net income/(loss)                        $  5,316   $2,487   $1,354   $(1,167)   $  7,990
</TABLE>

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

Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures: Pro-Fac's Principal Executive Officer and
Principal Financial Officer evaluated the effectiveness of the design and
operation of Pro-Fac's disclosure controls and procedures (as defined in Rule
13a-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")). Based on that evaluation, Pro-Fac's Principal Executive and Principal
Financial Officer concluded that Pro-Fac's disclosure controls and procedures as
of June 26, 2004 (the end of the period covered by this Report) have been
designed and are functioning effectively to provide reasonable assurance that
the information required to be disclosed by Pro-Fac in reports filed or
submitted under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commission's
rules and forms.

ITEM 9B. OTHER INFORMATION

Not applicable


                                       47




<PAGE>


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Set forth below is certain information about the individuals that currently
serve as directors and executive officers of Pro-Fac.

                       MANAGEMENT AND DIRECTORS OF PRO-FAC

<TABLE>
<CAPTION>
                                  Date
             Name               of Birth                   Positions
-----------------------------   --------   -----------------------------------------
<S>                               <C>      <C>
Bruce R. Fox                      1947     Director
Steven D. Koinzan                 1948     Director and Treasurer
Charles R. Altemus                1931     Director
Stephen R. Wright                 1947     General Manager, Chief Executive Officer,
                                           Chief Financial Officer and Secretary
Dale W. Burmeister                1940     Director
Peter R. Call                     1956     Director and President
Glen Lee Chase                    1937     Director
Kenneth A. Dahlstedt              1954     Director
Robert DeBadts                    1957     Director
Kenneth A. Mattingly              1948     Director
Allan W. Overhiser                1960     Director and Vice President
Paul E. Roe                       1939     Director
Darell Sarff                      1949     Director
James A. Pierson*                 1937     Director
Cornelius D. Harrington, Jr.*     1927     Director
Frank M. Stotz*                   1930     Director
</TABLE>

* Members of Pro-Fac's Audit Committee, which is a separately-designated
standing Audit Committee established by and among Pro-Fac's Board of Directors
for the purposes of, among other duties, overseeing the accounting and financial
reporting processes of Pro-Fac and audits of Pro-Fac's financial statements. The
charter of the Audit Committee is available on the Cooperative's Investor
Relations website www.profaccoop.com/about/Profac/investor. Mr. Harrington is
the Chairman of the Audit Committee. The Board of Directors has determined that
Messrs. Pierson, Harrington and Stotz each qualify as an "audit committee
financial expert" as defined in Item 401(h) of Regulation S-K and that each of
the members of the Audit Committee satisfies the independence standards in
Section 4200(a)(15) of the NASD listing standards and Rule 10A-3 under the
Securities Exchange Act of 1934, as amended.

Bruce R. Fox 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 served
as President of Pro-Fac until March, 2004. Mr. Fox also served as a Director of
Birds Eye Foods from 1994 to May 2004; serving as Vice Chairman from 2000 to
2002. He has been a member of Pro-Fac since 1974. Mr. Fox is a fruit and
vegetable grower (N.J. Fox & Sons, Inc. and AEBIG Apple LLC, Shelby, MI).

Steven D. Koinzan has been a Director of Pro-Fac since 1982. He was Secretary of
Pro-Fac from March 1993 until March 1995, Treasurer from March 1995 until 2000
and Vice-President from 2000 until March, 2004. Mr. Koinzan was, again, elected
to serve as Treasuer of Pro-Fac in March 2004. From 1994 to August 29, 2002, Mr.
Koinzan served as a director of Birds Eye Foods; serving as Vice Chairman from
2001 to 2002. He has been a member of Pro-Fac since 1979. Mr. Koinzan is a
popcorn, field corn and soybean farmer (Koinzan Farms; Norden, Nebraska).

Stephen R. Wright has been the General Manager of Pro-Fac since March 1995 and
was elected as Secretary in June 1999. He became Chief Executive Officer and
Chief Financial Officer of Pro-Fac on August 19, 2004. Mr. Wright previously
served as Assistant General Manager. Mr. Wright also served as Executive Vice
President - Investor Relations of Birds Eye Foods from November 6, 1996 to
August 19, 2004. He was Secretary of Birds Eye Foods from March 2000 to August
2002. He was Senior Vice President - Procurement of Birds Eye Foods from
November 1994 to November 1996 and Vice President - Procurement for Birds Eye
Foods from 1990 to November 1994, having served as Director of Commodities and
Administration Services for Birds Eye Foods from 1988 to 1990.

Charles R. Altemus has been a Director of Pro-Fac since March 2004. He has been
a member of Pro-Fac since 1978. Mr. Altemus is a potato grower (Altemus Farms;
Penn Run, Pennsylvania).

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 has been a Director of Pro-Fac since February 2000. He has been a
member of Pro-Fac since 1979. He was elected to serve as President of Pro-Fac in
March 2004. Mr. Call also serves as a Director of Birds Eye Foods and has served
in this capacity since August 29, 2002. Mr. Call is a vegetable and grain farmer
(My-T Acres, Inc. and Call Farms, Inc., Batavia, New York).


                                       48




<PAGE>


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). Mr. Chase has advised the Board of Directors
that he does not intend to stand for re-election after his term expires in March
2005.

Kenneth A. Dahlstedt has been a Director of Pro-Fac since February 1998 and has
been a member of Pro-Fac since 1983. Mr. Dahlstedt is a vegetable grower (Ag.
Pro, Inc.; Mount Vernon, WA).

Robert DeBadts has been a Director of Pro-Fac since 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, a Vice
President since March, 2004 and a member of Pro-Fac since 1984. Mr. Overhiser
also serves as a Director of Birds Eye Foods and has served in this capacity
since May, 2004. Mr. Overhiser is a fruit farmer (A.W. Overhiser Orchards; South
Haven, Michigan).

Paul E. Roe has been a Director of Pro-Fac since 1986 and a member of Pro-Fac
since 1961. From 2000 to August 19, 2002, Mr. Roe served as a Director of Birds
Eye Foods. Mr. Roe is a vegetable, grain and dry bean farmer (Roe Acres, Inc.;
Bellona, New York).

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

James A. Pierson has been a Director of Pro-Fac since August 2002. Mr. Pierson
also served as Director of Birds Eye Foods from 2001 to August 19, 2002. 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 has served as a Director of the Farm
Credit System Funding Corporation and the National Council of Farmer
Cooperatives.

Cornelius D. Harrington Jr., has been a Director of Pro-Fac since August 2002.
Mr. Harrington also served as Director of Birds Eye Foods from 1999 to August
19, 2002. Prior to his retirement, he was President of the Bank of New
England-West in Springfield, MA 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, Massachusetts.
He is a former Director of the Farm Credit Bank of Springfield.

Frank M. Stotz has been a Director of Pro-Fac since August 2002. Mr. Stotz
also served as Director of Birds Eye Foods from 1994 to August 19, 2002.
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: Pro-Fac's Board of Directors is currently divided into three
classes, with the classes of directors serving for staggered three-year terms
that expire in successive years. Except for those directors serving on Pro-Fac's
Audit Committee, approximately one-third of the directors are elected annually
by the members. Those directors serving on Pro-Fac's Audit Committee are
appointed by Pro-Fac's Board of Directors. Officers of Pro-Fac are elected for
one-year terms.

Section 16(a) Beneficial Ownership Reporting Compliance: Section 16(a) of the
Securities Exchange Act of 1934 requires Pro-Fac's directors and executive
officers, and persons who own more than 10% of a registered class of Pro-Fac's
equity securities, to file reports of ownership and changes in ownership of the
securities of Pro-Fac with the Securities and Exchange Commission (the "SEC").
Officers, directors and beneficial owners of more than 10% of any class of
Pro-Fac's equity securities are required by SEC regulation to furnish Pro-Fac
with copies of all Section 16(a) reports they file.

Based upon review of the copies of such reports and written representations that
no other reports were required, Pro-Fac believes that during the fiscal year
ended June 26, 2004, all filing requirements under Section 16(a) applicable to
its officers, directors, and greater than 10% beneficial owners were complied
with.

Code of Ethics: The Board of Directors has adopted the "Pro-Fac Cooperative,
Inc. Principal Executive Officer/Senior Financial Officer Code of Ethics" that
applies to the Company's principal executive officer and principal financial
officer. A copy of the Code of Ethics is available at the Cooperative's Investor
Information website - "About Pro-Fac" (www.profaccoop.com/aboutProfac/Investor).
The Cooperative intends to post amendments to or waivers from the Code of Ethics
for its principal executive officer and its principal financial officer at this
location on its website.


                                       49




<PAGE>


Involvement in Certain Legal Proceedings: Mr. Stephen Wright was previously an
executive officer of PF Acquisition II, Inc. a former subsidiary of Pro-Fac. On
June 27, 2001, PF Acquisition II, Inc. filed a petition under the federal
bankruptcy laws.

ITEM 11. EXECUTIVE COMPENSATION

During fiscal 2004, Pro-Fac did not have any executive officers who were
employees of Pro-Fac. Mr. Stephen Wright served as Pro-Fac's General Manager and
Secretary under the Transitional Services Agreement during fiscal 2004 and
during fiscal 2003 for the period commencing August 19, 2002, the Closing Date.
During this time, Mr. Wright was a full time employee of Birds Eye Foods and his
compensation was paid by Birds Eye Foods under the terms of the Transitional
Services Agreement. Prior to August 19, 2002 and for fiscal 2002, Mr. Wright
allocated his time and responsibilities between Pro-Fac and Birds Eye Foods
pursuant to the Marketing and Facilitation Agreement. The Transitional Services
Agreement terminated, by its terms, on August 19, 2004.

The following table sets forth information concerning the compensation paid for
each of the fiscal years ended June 26, 2004, June 28, 2003 and June 29, 2002 to
Stephen R. Wright, Pro-Fac's "Named Executive Officer" during fiscal 2004.

Executive Compensation
Summary Compensation Table (1)

<TABLE>
<CAPTION>
                                                Annual
                                           Compensation (3)         401(k)
                                          -------------------      Matching
Name and Principal Position        Year    Salary    Bonus(4)   Contributions
---------------------------        ----   --------   --------   -------------
<S>                                <C>    <C>         <C>          <C>
Stephen R. Wright (2)              2004   $234,000    $19,000      $7,532
                                   2003   $234,000    $60,000      $6,962
   General Manager and Secretary   2002   $225,000    $     0      $6,534
   of Pro-Fac
</TABLE>

(1)  As is indicated above, Pro-Fac had no executive officers who were employees
     of Pro-Fac during fiscal 2004. All compensation described above was paid to
     Stephen R. Wright by Birds Eye Foods.

(2)  Stephen Wright remained an employee of Birds Eye Foods and rendered
     services to Pro-Fac pursuant to the Transitional Services Agreement until
     August 19, 2004. Effective August 19, 2004, Mr. Wright became an employee
     of Pro-Fac.

(3)  In accordance with the rules of the Securities and Exchange Commission, the
     compensation described in this table does not include group life, health
     and medical insurance or other benefits received by Stephen Wright that are
     available generally to all salaried employees of Birds Eye Foods, and,
     except as expressly noted, certain perquisites and other personal benefits,
     securities or property received by Stephen Wright that do not exceed (in
     the aggregate) the lesser of $50,000 or 10% of Mr. Wright's total salary
     and bonus disclosed in this table.

(4)  Pursuant to the Birds Eye Foods Management Incentive Plan (the "Incentive
     Plan"), additional compensation is paid if justified by the activities of
     the officers and employees eligible under the Management Incentive Plan and
     by the earnings of Birds Eye Foods.

Directors' Compensation: During fiscal 2004, Pro-Fac Directors were each paid an
annual retainer. Messrs. Burmeister, Call, Chase, Dahlstedt, Debadts, Koinzan,
Mattingly, Overhiser, Roe and Sarff were paid an annual retainer of $8,000. Mr.
Fox, who also served as Chairman of the Board of Directors of Pro-Fac until
March 2004, was paid an annual retainer of $12,000. All non-member-grower
directors of Pro-Fac, Messrs. Harrington, Pierson and Stotz, received an annual
retainer of $20,000. Directors are not paid additional compensation for serving
on a standing committee of the Board of Directors or for their participation in
special assignments in their capacity as directors. All directors receive
reimbursement for reasonable out-of-pocket expenses incurred in connection with
meetings of the Board.

Employment Contracts, Termination of Employment and Change-in-Control
Arrangements: Pursuant to an employment agreement entered into on July 30, 2004,
beginning August 19, 2004, Mr. Wright is employed as the General Manager, Chief
Executive Officer and Chief Financial Officer of Pro-Fac, reporting to Pro-Fac's
Board of Directors. The agreement has a term of two years until (and including)
August 19, 2006 and provides for an annualized salary of $125,000 for Mr.
Wright's first year of employment and $130,000 for Mr. Wright's second year of
employment. Mr. Wright is entitled to participate in employee benefits and
perquisites generally made available to employees of Pro-Fac. Pro-Fac has also
agreed to maintain a 401(k) plan (or similar arrangement) pursuant to which
Pro-Fac will contribute up to 3% of Mr. Wright's earned compensation, to provide
Mr. Wright with term life insurance, short-term and long-term disability
insurance, personal accident insurance and accidental death and dismemberment
insurance.

Either Mr. Wright or Pro-Fac, subject to the rights and obligations set forth in
the employment agreement, including proper notice, may terminate Mr. Wright's
employment. Pro-Fac is obligated to pay Mr. Wright his salary plus benefits for
the remainder of the agreement's term in the event Mr. Wright's employment is
terminated for any reason other than "for cause" (as such term is defined in the
employment agreement, other than, for death, disability, merger, consolidation,
dissolution or cessation of business). Mr. Wright's employment agreement
contains provisions relating to non-competition and non-solicitation of
customers during the term of his employment and for a period of 12 months
thereafter (except if Mr. Wright's employment is terminated without cause), and
non-solicitation of Pro-Fac's employees for 12 months following termination of
employment.


                                       50




<PAGE>


Compensation Committee Interlocks and Insider Participation: The members of the
Cooperative's Compensation Committee of the Board of Directors during fiscal
2004 were: Mr. Steven Koinzan, Mr. Allan Overhiser, Mr. Kenneth Mattingly, Mr.
James Pierson, Mr. Peter Call, beginning March 25, 2004, and, prior to his
resignation on March 25, 2004, Mr. Bruce Fox.

Mr. Bruce Fox served as Pro-Fac's President until March 25, 2004. Mr. Fox also
served as Pro-Fac's Treasurer from 1984 to 1995. Currently, Mr. Peter Call
serves as the Cooperative's President, Mr. Overhiser serves as its Vice
President and Mr. Koinzan serves as the Cooperative's Treasurer. Mr. Koinzan
served as Pro-Fac's Secretary from 1993 to 1995 and as its Vice President from
2000 to March 2004. However, Messrs. Call, Overhiser and Koinzan do not serve
(and have not served) as employee-officers of the Cooperative and Mr. Fox did
not serve as an employee officer of Pro-Fac.

Mr. Koinzan, Mr. Overhiser, Mr. Mattingly, Mr. Call and Mr. Fox are
member-growers of Pro-Fac. Accordingly, as member-growers of the Cooperative,
during fiscal 2004 they received payments from Pro-Fac for crops delivered by
them directly or indirectly through entities owned or controlled by them. During
fiscal year 2004, the aggregate amount of payments received by Messrs. Koinzan,
Overhiser, Mattingly, Call and Fox, directly or indirectly through entities
owned or controlled by them, for their crops was approximately $459,000,
$105,000, $618,000, $1,758,000 and $639,000, respectively.

No interlocking relationships exist between members of the Pro-Fac Board or
Compensation Committee and the board of directors or compensation committee of
another company.


                                       51




<PAGE>


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding the beneficial ownership,
as of June 26, 2004, by (i) each person or entity (including any group) who is
known by Pro-Fac to own beneficially more than 5 percent of Pro-Fac's common
stock and (ii) each Pro-Fac director, each Named Executive Officer included in
the Summary Compensation Table, and all directors and current executive officers
as a group, as to each class of equity securities of Pro-Fac.

<TABLE>
<CAPTION>
                                                                      Amount and Nature of     Percent of
             Name                            Title of Class          Beneficial Ownership(a)    Class(b)
-----------------------------------   ----------------------------   -----------------------   ----------
<S>                                   <C>                                     <C>                 <C>
Charles R. Altemus                    Common                                  21,007              1.15%
                                      Class A Cumulative Preferred            14,424              0.30%

Dale W. Burmeister                    Common                                  11,770(c)           0.64%
                                      Class A Cumulative Preferred               657(c)           0.01%
                                      Class A Cumulative Preferred            10,729(c)           0.22%
                                      Class A Cumulative Preferred             1,110(u)           0.02%

Peter R. Call                         Common                                  40,536(d)           2.21%
                                      Class A Cumulative Preferred            27,177(d)           0.57%
                                      Class A Cumulative Preferred            14,194(e)           0.30%
                                      Class A Cumulative Preferred             5,361(f)           0.11%
                                      Class A Cumulative Preferred            10,146              0.21%
                                      Class A Cumulative Preferred             1,700(v)           0.04%
                                      Class A Cumulative Preferred               800(w)           0.02%

Glen Lee Chase                        Common                                   9,472(g)           0.52%
                                      Class A Cumulative Preferred             8,500(g)           0.18%

Kenneth A. Dahlstedt                  Common                                   7,375              0.40%
                                      Common                                   1,833(m)           0.10%
                                      Class A Cumulative Preferred               330              0.01%
                                      Class A Cumulative Preferred                48(m)           0.00%

Robert DeBadts                        Common                                  12,737(k)           0.69%
                                      Class A Cumulative Preferred            12,732(k)           0.27%
                                      Class A Cumulative Preferred               307(l)           0.01%

Bruce R. Fox                          Common                                  14,315(n)           0.78%
                                      Common                                     240(p)           0.01%
                                      Class A Cumulative Preferred             9,261(n)           0.19%
                                      Class A Cumulative Preferred             8,583(o)           0.18%
                                      Class A Cumulative Preferred             1,085              0.02%
                                      Class A Cumulative Preferred               955(t)           0.02%

Cornelius D. Harrington, Jr.          None

Steven D. Koinzan                     Common                                  11,184              0.61%
                                      Class A Cumulative Preferred             6,159              0.13%

Kenneth A. Mattingly                  Common                                  12,758(q)           0.70%
                                      Class A Cumulative Preferred            12,258(q)           0.26%

Allan W. Overhiser                    Common                                   3,258(r)           0.18%
                                      Class A Cumulative Preferred             2,130(r)           0.04%

James A. Pierson                      None

Paul E. Roe                           Common                                  22,945(s)           1.25%
                                      Class A Cumulative Preferred             8,453(s)           0.18%

Darell Sarff                          Common                                   2,616              0.14%
</TABLE>


                                       52




<PAGE>


<TABLE>
<S>                                   <C>                                    <C>                  <C>
                                      Class A Cumulative Preferred             1,995              0.04%

Frank M. Stotz                        None

Stephen R. Wright                     Class A Cumulative Preferred             1,640              0.03%

All directors and current executive
   officers as a group (16)           Common                                 172,046              9.38%
                                      Class A Cumulative Preferred           160,734              3.36%
</TABLE>

(a)  Certain of the directors named above may have the opportunity, along with
     the other Pro-Fac 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. Moreover, Pro-Fac members are
     only entitled to one vote regardless of the number of shares of common
     stock owned.

(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.

(k)  Record ownership by Lake Breeze Fruit Farm, Inc.

(l)  Record ownership jointly with spouse

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

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

(o)  Record ownership by Kathleen Fox

(p)  Record ownership by AEBIG Apple LLC

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

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

(s)  Record ownership by Roe Acres, Inc.

(t)  Record ownership by Bruce Fox IRA

(u)  Record ownership by the Judith K. Burmeister Trust

(v)  Record ownership by Julie Call

(w)  Record ownership by Casey Call, minor child of Peter R. Call


                                       53




<PAGE>


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Securityholders Agreement and Limited Liability Company Agreement: Stephen R.
Wright, the General Manager and Secretary of Pro-Fac and Vice President of Birds
Eye Foods, Pro-Fac and others are parties to the Securityholders Agreement and
Limited Liability Company Agreement because of their ownership of common units
of Holdings LLC. Both the Securityholders Agreement and the Limited Liability
Company Agreement are described in this Report under the heading "Description of
Business - General Development of Business" in Part I, Item 1, and such
descriptions are incorporated into this Item 13. As indicated previously in this
Report, in connection with the Transaction, certain officers of Birds Eye Foods,
including Mr. Wright, entered into subscription agreements with Holdings LLC to
acquire Class C common units and Class D common units of Holdings LLC. As of the
date of filing this Report, Mr. Wright owned approximately 553 Class C common
units, representing approximately 4.5 percent of the issued and outstanding
Class C common units and approximately 379 Class D common units, representing
approximately 2.8 percent of the Class D common units of Holdings LLC.

Mr. Bruce R. Fox served as director of both Pro-Fac and Birds Eye Foods until
March, 2004. Mr. Allen W. Overhiser and Mr. Peter R. Call serve as directors of
both Birds Eye Foods and Pro-Fac. Messrs. Overhiser and Call serve as the
"Pro-Fac Directors" on Birds Eye Foods' Board of Directors pursuant to the
Securityholders Agreement.

Transitional Services Agreement: Pursuant to the Transitional Services
Agreement, which is described in this Report under the heading "Description of
Business - General Development of Business" in Part I, Item 1., which
description is incorporated into this Item 13, Birds Eye Foods agreed that
during the term of the Transitional Services Agreement, to the extent Pro-Fac's
General Manager is an employee of Birds Eye Foods, he will serve as such at the
discretion of Pro-Fac's Board of Directors, and he will report to the chief
executive officer of Birds Eye Foods, with respect to his duties for Birds Eye
Foods, and to the Pro-Fac Board of Directors, with respect to his duties for
Pro-Fac. During fiscal 2004, Mr. Wright served as the General Manager of Pro-Fac
pursuant to the Transitional Services Agreement. Mr. Wright, however, was an
employee of Birds Eye Foods and he was compensated by Birds Eye Foods. Pursuant
to its terms, the Transitional Services Agreement terminated on August 19, 2004.
Effective August 19, 2004, Mr. Wright became an employee of Pro-Fac.

Purchase of Crops by Pro-Fac: Pro-Fac members sell crops grown by them to
Pro-Fac pursuant to general marketing agreements between Pro-Fac and its
members. Pro-Fac, in turn, markets and sells its members' crops to food
processors, including Birds Eye Foods. The Directors of Pro-Fac, other than
James A. Pierson, Cornelius D. Harrington and Frank M. Stotz, are grower-members
of Pro-Fac. Accordingly, during fiscal year 2004, as member-growers of the
Cooperative, they received payments from Pro-Fac for crops delivered by them
directly or indirectly through entities owned or controlled by them.

During fiscal 2004, the following directors, directly or indirectly through
entities owned or controlled by them, received payments from Pro-Fac for their
crops as follows:

(Dollars in Thousands)

<TABLE>
<CAPTION>
                                  RELATIONSHIP          GROSS PURCHASES
        NAME                       TO PRO-FAC             FISCAL 2004
-----------------------   ---------------------------   ---------------
<S>                       <C>                                <C>
Charles R. Altemus.....   Director                           $  530
Dale W. Burmeister.....   Director                           $  397
Peter R. Call..........   Director and President             $1,758
Glen Lee Chase.........   Director                           $   45
Kenneth A. Dahlstedt...   Director                           $  331
Robert DeBadts.........   Director                           $  380
Bruce R. Fox...........   Director                           $  639
Steven D. Koinzan .....   Director and Treasuer              $  459
Kenneth A. Mattingly...   Director                           $  618
Allan W. Overhiser.....   Director and Vice President        $  105
Paul E. Roe ...........   Director                           $  364
Darell Sarff...........   Director                           $  134
</TABLE>


                                       54




<PAGE>


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 Cincinnati Insurance Companies
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 August 19, 2005, at an annual
cost of approximately $70,000. Additionally, the Cooperative has obtained
insurance from St. Paul Mercury Insurance Company and Great American Insurance
Company, 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 for events occurring prior to August 19, 2002 where claims are
submitted prior to August 19, 2008. This insurance has a term expiring on August
19, 2008, at a cost of approximately $463,000. As of the date of this Report, no
sums have been paid to any officers or directors of the Cooperative under this
indemnification insurance policies.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Fees to Independent Auditor for Fiscal 2004 and 2003: The following table shows
the aggregate fees billed for audit and other services provided by Deloitte &
Touche LLP ("D&T") for fiscal years 2004 and 2003.

<TABLE>
<CAPTION>
                       2004      2003
                     -------   -------
<S>                  <C>       <C>
Audit Fees           $41,640   $25,680
Audit-Related Fees         0         0
Tax Fees                   0         0
All Other Fees             0         0
                     -------   -------
Total                $41,640   $25,680
                     =======   =======
</TABLE>

Audit Fees: This category includes the audit of Pro-Fac's annual financial
statements, review of financial statements included in Pro-Fac's Form 10-Q
quarterly reports, and services that are normally provided by the independent
auditors in connection with statutory and regulatory filings or engagements for
those fiscal years.

Audit-Related Fees: This category consists of assurance and related services
provided by Pro-Fac's independent auditors that are reasonably related to the
performance of the audit or review of Pro-Fac's financial statements and are not
reported above under "Audit Fees."

Tax Fees: This category consists of professional services rendered by Pro-Fac's
independent auditors in connection with tax compliance, tax advice and tax
planning activities.

All Other Fees: This category consists of fees for services and products
provided to Pro-Fac by its independent auditors and not reported under "Audit
Fees", "Audit-Related Fees" or "Tax Fees" above.

Audit Committee Pre-Approval Policy: The Audit Committee pre-approves all
auditing services and permitted non-auditing services (including the fees and
terms of such services).


                                       55




<PAGE>


                                     PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)  The following documents are included as part of this Report:

     1.   Financial Statements. The following Financial Statements of Pro-Fac
          and Reports of Independent Registered Public Accounting Firms are
          included in Item 8:

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                          <C>
Pro-Fac Cooperative, Inc. and Consolidated Subsidiary:
   Reports of Independent Registered Public Accounting Firms.............    24
   Consolidated Financial Statements:
      Consolidated Statements of Operations, Allocation of Net
         Income/(Loss), and Comprehensive Income (Loss) for the years
         ended June 26, 2004, June 28, 2003, and June 29, 2002...........    26
      Balance Sheets at June 26, 2004, and June 28, 2003.................    27
      Consolidated Statements of Cash Flows for the years ended June 26,
         2004, June 28, 2003, and June 29, 2002..........................    28
      Consolidated Statements of Changes in Shareholders' and Members'
         Capitalization and Redeemable Stock for the years ended June 26,
         2004, June 28, 2003, and June 29, 2002..........................    29
      Notes to Consolidated Financial Statements.........................    30
</TABLE>

     2.   Financial Statement Schedules:

          SCHEDULE II: Valuation and Qualifying Accounts:

          Pro-Fac Cooperative, Inc.
          Valuation and Qualifying Accounts
          For the Three Fiscal Years Ended June 28, 2003

<TABLE>
<CAPTION>
                                                               Fiscal Years Ended
                                                ---------------------------------------------
                                                June 26, 2004   June 28, 2003   June 29, 2002
                                                -------------   -------------   -------------
<S>                                                   <C>       <C>              <C>
Allowance for doubtful accounts
   Balance at beginning of period                     $0        $    731,000     $   843,000
   Additions charged to expense                        0                   0         557,000
   Deductions                                          0                   0        (669,000)
   Deconsolidation with Birds Eye Foods, Inc.          0            (731,000)              0
                                                      --        ------------     -----------
   Balance at end of period                           $0        $          0     $   731,000
                                                      ==        ============     ===========

Inventory reserve
   Balance at beginning of period                     $0        $  6,927,000     $ 3,135,000
   Net change                                          0                   0       3,792,000
   Deconsolidation with Birds Eye Foods, Inc.          0          (6,927,000)              0
                                                      --        ------------     -----------
   Balance at end of period                           $0        $          0     $ 6,927,000
                                                      ==        ============     ===========

Tax valuation allowance*
   Balance at beginning of period                     $0        $ 14,540,000     $ 5,891,000
   Net change                                          0                   0       8,649,000
   Deconsolidation with Birds Eye Foods, Inc.          0         (14,540,000)              0
                                                      --        ------------     -----------
Balance at end of period                              $0        $          0     $14,540,000
                                                      ==        ============     ===========
</TABLE>

          *    See further discussion regarding tax matters in "NOTE 7. Income
               Taxes" under "Notes to Consolidated Financial Statements in Part
               II, Item 8 of this Report."

          Separate Financial Statements of Fifty-Percent or Less Owned Persons:
          Exhibit 99 to this Report, Birds Eye Holdings LLC consolidated
          financial statements for the year ended June 26, 2004 and the period
          from August 19, 2002 - June 28, 2003, is incorporated by reference
          into this Report as the "Separate Financial Statements of
          Fifty-Percent or Less Owned Persons", a Financial Statement schedule
          required as part of this Report.

          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.


                                       56




<PAGE>


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

<TABLE>
<CAPTION>
Exhibit
 Number                                 Description
-------   ----------------------------------------------------------------------
<S>       <C>
    2.1   Unit Purchase Agreement (filed as Exhibit 99.2 to Pro-Fac Cooperative,
          Inc.'s Form 8-K filed September 3, 2002 and incorporated herein by
          reference).

    3.1   Restated Certificate of Incorporation of Pro-Fac Cooperative, Inc.
          dated August 19, 2002 (filed as Exhibit 3.1 to Pro-Fac Cooperative's
          Form 10-K for the fiscal year ended June 29, 2002 and incorporate
          herein by reference).

    3.2   Restated Bylaws of Pro-Fac Cooperative, Inc. (filed as Exhibit 3.2 to
          Pro-Fac Cooperative's Form 10-K for the fiscal year ended June 29,
          2002 and incorporated herein by reference).

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

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

    4.4   Second Supplemental Indenture (filed as Exhibit 4.1 to Birds Eye
          Foods' Quarterly Report on Form 10-Q for the third fiscal quarter
          ended March 19, 2003 and incorporated herein by reference).

    4.5   Amended and Restated Marketing and Facilitation Agreement dated August
          19, 2002 between Pro-Fac Cooperative, Inc., and Birds Eye Foods, Inc.
          (filed as Exhibit 99.4 to Pro-Fac's Current Report on Form 8-K filed
          September 3, 2002 and incorporated herein by reference).

   10.1   Termination Agreement dated August 19, 2002 (filed as Exhibit 99.3 to
          Pro-Fac's Current Report on Form 8-K filed September 3, 2002 and
          incorporated herein by reference).

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

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

   10.4   Transitional Services Agreement dated August 19, 2002 (filed as
          Exhibit 99.5 to Pro-Fac's Current Report on Form 8-K filed September
          3, 2002 and incorporated herein by reference).

   10.5   Credit Agreement dated August 19, 2002 between Pro-Fac Cooperative,
          Inc., as borrower, and Birds Eye Foods, Inc., as lender (filed as
          Exhibit 99.6 to Pro-Fac's Current Report on Form 8-K filed September
          3, 2002 and incorporated herein by reference).

   10.6   Securityholders Agreement dated August 19, 2002 among Birds Eye
          Holdings LLC, Pro-Fac Cooperative, Inc., Vestar/Birds Eye Holdings
          LLC, and others (filed as Exhibit 99.7 to Pro-Fac's Current Report on
          Form 8-K filed September 3, 2002 and incorporated herein by
          reference).

   10.7   Amendment No. 1 to the Securityholders Agreement dated August 30, 2003
          among Bird Eye Holdings, LLC, Pro-Fac Cooperative, Inc., Vestar/Birds
          Eye Holdings, LLC, and others (filed as Exhibit 10.7 to Pro-Fac's
          Annual Report on Form 10-K filed September 26, 2003 and incorporated
          herein by reference).

   10.8   Amended and Restated Limited Liability Company Agreement of Birds Eye
          Holdings LLC dated August 19, 2002 among Birds Eye Holdings LLC,
          Pro-Fac Cooperative, Inc., Vestar/Birds Eye Holdings LLC, and others
          (filed as Exhibit 99.8 to Pro-Fac's Current Report on Form 8-K filed
          September 3, 2002 and incorporated herein by reference).
</TABLE>


                                       57




<PAGE>


<TABLE>
<S>       <C>
   10.9   Amendment No. 1 to the Amended and Restated Limited Liability Company
          Agreement of Agrilink Holdings LLC. (filed as Exhibit 10.10 to
          Pro-Fac's Annual Report on Form 10-K filed September 26, 2003 and
          incorporated herein by reference).

  10.10   Amendment No. 2 to the Amended and Restated Limited Liability Company
          Agreement (filed herewith).

  10.11   Form of Management Unit Subscription Agreement (filed as Exhibit 99.1
          to Pro-Fac's Current Report on Form 8-K filed September 3, 2002 and
          incorporated herein by reference).

* 10.12   Stephen R. Wright's Employment Agreement dated July 30, 2004 (filed
          herewith).

  31      Section 302 Certification of the Principal Executive Officer and
          Principal Financial Officer (filed herewith).

  32      Certification of Principal Executive Officer and Principal Financial
          Officer pursuant to 18 USC, Section 1350, as adopted pursuant to
          Section 906 (filed herewith).

  99      Birds Eye Holdings LLC consolidated financial statements for the year
          ended June 26, 2004 and the period from August 19, 2002 to June 28,
          2003 (filed herewith).
</TABLE>

          *Management contracts or compensatory plans.

(b)  Reports on Form 8-K

     Form 8-K dated May 18, 2004 was (i) filed under Item 5, Other Events and
     Required FD Disclosure, to report the filing of Pro-Fac's Form 10-K/A
     (Amendment No. 1) for the fiscal year ended June 28, 2003, its Form 10-Q/A
     (Amendment No. 1) for the fiscal quarter ended September 27, 2003, its Form
     10-Q/A (Amendment No. 1) for the fiscal quarter ended December 27, 2007 and
     its Form 10-Q for the fiscal quarter ended March 27, 2004 and (ii)
     furnished under Item 12, Results of Operations and Financial Condition,
     information about Pro-Fac's financial results for the third-quarter ended
     March 27, 2004.

     Form 8-K dated May 17, 2004 was furnished under Item 12, Results of
     Operations and Financial Condition, to report Pro-Fac's financial results
     for the third quarter ended March 27, 2004 and to furnish a copy of a press
     release reporting the same.

     Form 8-K dated April 12, 2004 was filed under Item 5, Other Events, to
     report Pro-Fac's discovery of certain errors in its accounting for its
     investment in Birds Eye Holdings LLC and Pro-Fac's intention to restate its
     2003 annual financial statements for its fiscal year ended June 28, 2003
     and its 2004 quarterly financial information for its fiscal quarters ended
     September 27, 2003 and December 27, 2003.

(c)  See Item 15(a)(3) above.

(d)  See Item 15(a)(2) above.


                                       58




<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 Annual Report on Form 10-K to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                             PRO-FAC COOPERATIVE, INC.


Date: September 23, 2004           BY: /s/ Stephen R. Wright
                                       -----------------------------------------
                                           Stephen R. Wright
                                       General Manager, Chief Executive Officer,
                                       Chief Financial Officer and Secretary
                                       (Principal Executive Officer,
                                       Principal Financial Officer, and
                                       Principal Accounting Officer)

                                POWER OF ATTORNEY

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

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.


                                       59




<PAGE>


<TABLE>
<CAPTION>
              SIGNATURE                                 TITLE                      Date
-------------------------------------   ------------------------------------   ------------------
<S>                                     <C>                                    <C>


/s/ Peter R. Call                       President and Director                 September 23, 2004
-------------------------------------
    (PETER R. CALL)


/s/ Allan W. Overhiser                  Vice President and Director            September 23, 2004
-------------------------------------
    (ALLAN W. OVERHISER)


/s/ Steven D. Koinzan                   Treasurer and Director                 September 23, 2004
-------------------------------------
    (STEVEN D. KOINZAN)


/s/ Bruce R. Fox                        Director                               September 23, 2004
-------------------------------------
    (BRUCE R. FOX)


/s/ Charles R. Altemus                  Director                               September 23, 2004
-------------------------------------
    (CHARLES R. ALTEMUS)


/s/ Dale W. Burmeister                  Director                               September 23, 2004
-------------------------------------
    (DALE W. BURMEISTER)


/s/ Glen Lee Chase                      Director                               September 23, 2004
-------------------------------------
    (GLEN LEE CHASE)


/s/ Kenneth A. Dahlstedt                Director                               September 23, 2004
-------------------------------------
    (KENNETH A. DAHLSTEDT)


/s/ Robert DeBadts                      Director                               September 23, 2004
-------------------------------------
    (ROBERT DeBADTS)


/s/ Cornelius D. Harrington, Jr.        Director                               September 23, 2004
-------------------------------------
    (CORNELIUS D. HARRINGTON, JR.)


/s/ Kenneth A. Mattingly                Director                               September 23, 2004
-------------------------------------
    (KENNETH A. MATTINGLY)


/s/ James R. Pierson                    Director                               September 23, 2004
-------------------------------------
    (JAMES R. PIERSON)


/s/ Paul E. Roe                         Director                               September 23, 2004
-------------------------------------
    (PAUL E. ROE)


/s/ Darell Sarff                        Director                               September 23, 2004
-------------------------------------
    (DARELL SARFF)


/s/ Frank M. Stotz                      Director                               September 23, 2004
-------------------------------------
    (FRANK M. STOTZ)


/s/ Stephen R. Wright                   General Manager, Chief Executive       September 23, 2004
-------------------------------------   Officer, Chief Financial Officer and
    (STEPHEN R. WRIGHT)                 Secretary (Principal Financial
                                        Officer and Principal Accounting
                                        Officer)
</TABLE>


                                       60