##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended June 25, 2006

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from  to
.

Commission File Number 333-118390



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Pinnacle Foods Group Inc.

(Exact name of registrant as specified in its charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 94-3303521                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|6 Executive Campus, Suite 100 Cherry Hill, New Jersey          |  | 08002                               
|(Address of Principal Executive Offices)                       |  | (Zip Code)                          

Registrants telephone number, including area code: (856) 969-7100



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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 whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated
filer and large accelerated filer in Rule 12b-2 of the Exchange Act (Check One):



|                         |  |                    |  |                         
|------------------------ |  | ------------------ |  | ------------------------
|Large accelerated filer ̈ |  | Accelerated filer ̈ |  | Non-accelerated filer  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b - 2 of the Securities
Exchange Act of 1934).

Yes ̈No  x

As of August 8,
2006, there were outstanding 100 shares of common stock, par value $0.01 per share, of the Registrant.



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##### Table of Contents

TABLE OF CONTENTS

FORM 10-Q



|                                                |  |                                                                                       |  |   
|----------------------------------------------- |  | ------------------------------------------------------------------------------------- |  | --
|                                                |  | Page No.                                                                             
|PART I  FINANCIAL INFORMATION                  |  | 1                                                                                    
|                                                |  |                                                                                      
|ITEM 1:                                         |  | FINANCIAL STATEMENTS                                                                  |  | 1 
|                                                | 
|CONSOLIDATED STATEMENTS OF OPERATIONS           |  | 2                                                                                    
|CONSOLIDATED BALANCE SHEETS                     |  | 3                                                                                    
|CONSOLIDATED STATEMENTS OF CASH FLOWS           |  | 4                                                                                    
|CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY |  | 5                                                                                    
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS      |  | 6                                                                                    
|1.                                              |  | Summary of Business Activities                                                        |  | 6 
|2.                                              |  | Interim Financial Statements                                                          |  | 6 
|3.                                              |  | Acquisition                                                                           |  | 6 
|4.                                              |  | Restructuring and Impairment Charges                                                  |  | 9 
|5.                                              |  | Stock-Based Compensation Expense                                                      |  | 11
|6.                                              |  | Other Expense (Income), net                                                           |  | 15
|7.                                              |  | Inventories                                                                           |  | 15
|8.                                              |  | Goodwill and Other Assets                                                             |  | 15
|9.                                              |  | Debt and Interest Expense                                                             |  | 17
|10.                                             |  | Pension and Retirement Plans                                                          |  | 20
|11.                                             |  | Financial Instruments                                                                 |  | 21
|12.                                             |  | Commitments and Contingencies                                                         |  | 23
|13.                                             |  | Related Party Transactions                                                            |  | 25
|14.                                             |  | Segments                                                                              |  | 26
|15.                                             |  | Recently Issued Accounting Pronouncements                                             |  | 27
|16.                                             |  | Guarantor and Nonguarantor Statements                                                 |  | 28
|                                                |  |                                                                                      
|ITEM 2:                                         |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |  | 37
|                                                | 
|OVERVIEW                                        |  | 38                                                                                   
|RESULTS OF OPERATIONS                           |  | 42                                                                                   
|LIQUIDITY AND CAPITAL RESOURCES                 |  | 47                                                                                   
|INFLATION                                       |  | 51                                                                                   
|SIGNIFICANT ACCOUNTING ESTIMATES                |  | 51                                                                                   
|RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS       |  | 52                                                                                   
|                                                |  |                                                                                      
|ITEM 3:                                         |  | QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK                             |  | 53
|ITEM 4:                                         |  | CONTROLS AND PROCEDURES                                                               |  | 55
|                                                | 
|PART II  OTHER INFORMATION                     |  | 56                                                                                   
|                                                |  |                                                                                      
|ITEM 1:                                         |  | LEGAL PROCEEDINGS                                                                     |  | 56
|ITEM 1A:                                        |  | RISK FACTORS                                                                          |  | 58
|ITEM 2:                                         |  | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS                           |  | 58
|ITEM 3:                                         |  | DEFAULTS UPON SENIOR SECURITIES                                                       |  | 58
|ITEM 4:                                         |  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                   |  | 58
|ITEM 5:                                         |  | OTHER INFORMATION                                                                     |  | 58
|ITEM 6:                                         |  | EXHIBITS                                                                              |  | 58
|                                                | 
|SIGNATURES                                      |  | 60                                                                                   



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##### Table of Contents

PART I  FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

Unaudited consolidated financial statements begin on the following page



1



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##### Table of Contents

PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except share amounts and where noted in millions)





|                                    |  |                    |         |              |                  |         |              |  |   |              |   |  |   |         |  
|----------------------------------- |  | ------------------ | ------- | ------------ | ---------------- | ------- | ------------ |  | - | ------------ | - |  | - | ------- | -
|                                    |  | Three months ended |         |              | Six months ended |        
|                                    |  | June 25,2006       |         | June 26,2005 |                  |         | June 25,2006 |  |   | June 26,2005 |  
|Net sales                           |  | $                  | 365,714 |              | $                | 306,614 |              |  | $ | 679,599      |   |  | $ | 614,451 |  
|                                    |  |                    |         |              |                  |         |              |  |   |              |   |  |   |         |  
|Costs and expenses                  |  |                    |         |              |                  |         |              |  |   |              |   |  |   |         |  
|Cost of products sold               |  |                    | 292,723 |              |                  | 246,220 |              |  |   | 546,616      |   |  |   | 507,987 |  
|Marketing and selling expenses      |  |                    | 26,333  |              |                  | 22,011  |              |  |   | 50,425       |   |  |   | 52,962  |  
|Administrative expenses             |  |                    | 12,805  |              |                  | 10,097  |              |  |   | 26,402       |   |  |   | 22,466  |  
|Research and development expenses   |  |                    | 988     |              |                  | 926     |              |  |   | 1,920        |   |  |   | 1,966   |  
|Other expense (income), net         |  |                    | 3,016   |              |                  | 1,498   |              |  |   | 4,726        |   |  |   | 4,924   |  
|                                    |  |                    |         |              |                  |         |              |  |   |              |   |  |   |         |  
|Total costs and expenses            |  |                    | 335,865 |              |                  | 280,752 |              |  |   | 630,089      |   |  |   | 590,305 |  
|                                    |  |                    |         |              |                  |         |              |  |   |              |   |  |   |         |  
|Earnings before interest and taxes  |  |                    | 29,849  |              |                  | 25,862  |              |  |   | 49,510       |   |  |   | 24,146  |  
|Interest expense                    |  |                    | 21,870  |              |                  | 20,882  |              |  |   | 41,392       |   |  |   | 35,135  |  
|Interest income                     |  |                    | 261     |              |                  | 167     |              |  |   | 400          |   |  |   | 223     |  
|                                    |  |                    |         |              |                  |         |              |  |   |              |   |  |   |         |  
|Earnings (loss) before income taxes |  |                    | 8,240   |              |                  | 5,147   |              |  |   | 8,518        |   |  |   | (10,766 | )
|Provision for income taxes          |  |                    | 7,135   |              |                  | 7,321   |              |  |   | 13,833       |   |  |   | 13,836  |  
|                                    |  |                    |         |              |                  |         |              |  |   |              |   |  |   |         |  
|Net earnings (loss)                 |  | $                  | 1,105   |              | $                | (2,174  | )            |  | $ | (5,315       | ) |  | $ | (24,602 | )
|                                    |  |                    |         |              |                  |         |              |  |   |              |   |  |   |         |  

See accompanying Notes to Unaudited Consolidated Financial Statements



2



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##### Table of Contents

PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands, except share amounts and where noted in millions)





|                                                                                   |  |              |           |   |                  |   |           |  
|---------------------------------------------------------------------------------- |  | ------------ | --------- | - | ---------------- | - | --------- | -
|                                                                                   |  | June 25,2006 |           |   | December 25,2005 |  
|Current assets:                                                                    |  |              |           |   |                  |   |           |  
|Cash and cash equivalents                                                          |  | $            | 9,677     |   |                  | $ | 519       |  
|Accounts receivable, net                                                           |  |              | 112,481   |   |                  |   | 76,255    |  
|Inventories, net                                                                   |  |              | 156,116   |   |                  |   | 170,621   |  
|Other current assets                                                               |  |              | 6,708     |   |                  |   | 2,944     |  
|Deferred tax assets                                                                |  |              | 1,275     |   |                  |   | 1,417     |  
|                                                                                   |  |              |           |   |                  |   |           |  
|Total current assets                                                               |  |              | 286,257   |   |                  |   | 251,756   |  
|                                                                                   |  |             
|Plant assets, net                                                                  |  |              | 258,183   |   |                  |   | 219,101   |  
|Tradenames                                                                         |  |              | 789,982   |   |                  |   | 761,282   |  
|Other assets, net                                                                  |  |              | 64,993    |   |                  |   | 44,842    |  
|Goodwill                                                                           |  |              | 413,063   |   |                  |   | 359,513   |  
|                                                                                   |  |              |           |   |                  |   |           |  
|Total assets                                                                       |  | $            | 1,812,478 |   |                  | $ | 1,636,494 |  
|                                                                                   |  |              |           |   |                  |   |           |  
|Current liabilities:                                                               |  |              |           |   |                  |   |           |  
|Current portion of long-term obligations                                           |  | $            | 162       |   |                  | $ | 153       |  
|Notes payable                                                                      |  |              | 1,647     |   |                  |   | 184       |  
|Accounts payable                                                                   |  |              | 57,384    |   |                  |   | 61,765    |  
|Accrued trade marketing expense                                                    |  |              | 37,950    |   |                  |   | 32,980    |  
|Accrued liabilities                                                                |  |              | 74,070    |   |                  |   | 71,459    |  
|Accrued income taxes                                                               |  |              | 1,207     |   |                  |   | 1,035     |  
|                                                                                   |  |              |           |   |                  |   |           |  
|Total current liabilities                                                          |  |              | 172,420   |   |                  |   | 167,576   |  
|                                                                                   |  |             
|Long-term debt (includes $2,927 owed to a related party at June 25, 2006)          |  |              | 1,000,959 |   |                  |   | 888,311   |  
|Pension and other postretirement benefits                                          |  |              | 19,219    |   |                  |   | 10,899    |  
|Other long-term liabilities                                                        |  |              | 560       |   |                  |   |          |  
|Deferred tax liabilities                                                           |  |              | 226,032   |   |                  |   | 213,184   |  
|                                                                                   |  |              |           |   |                  |   |           |  
|Total liabilities                                                                  |  |              | 1,419,190 |   |                  |   | 1,279,970 |  
|                                                                                   |  |             
|Commitments and contingencies                                                      |  |              |           |   |                  |   |           |  
|                                                                                   |  |             
|Shareholders equity:                                                              |  |              |           |   |                  |   |           |  
|Pinnacle Common stock: par value $.01 per share, 100 shares authorized, issued 100 |  |              |          |   |                  |   |          |  
|Additional paid-in-capital                                                         |  |              | 571,440   |   |                  |   | 529,425   |  
|Accumulated other comprehensive loss                                               |  |              | (3,704    | ) |                  |   | (3,768    | )
|Carryover of Predecessor basis of net assets                                       |  |              | (17,338   | ) |                  |   | (17,338   | )
|Accumulated deficit                                                                |  |              | (157,110  | ) |                  |   | (151,795  | )
|                                                                                   |  |              |           |   |                  |   |           |  
|Total shareholders equity                                                         |  |              | 393,288   |   |                  |   | 356,524   |  
|                                                                                   |  |              |           |   |                  |   |           |  
|Total liabilities and shareholders equity                                         |  | $            | 1,812,478 |   |                  | $ | 1,636,494 |  
|                                                                                   |  |              |           |   |                  |   |           |  

See accompanying Notes to Unaudited Consolidated Financial Statements



3



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##### Table of Contents

PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(in thousands, except share amounts and where noted in millions)



|                                                    |  |                  |          |   |              |   |         |  
|--------------------------------------------------- |  | ---------------- | -------- | - | ------------ | - | ------- | -
|                                                    |  | Six months ended |         
|                                                    |  | June 25,2006     |          |   | June 26,2005 |  
|Cash flows from operating activities                |  |                  |          |   |              |   |         |  
|Net loss                                            |  | $                | (5,315   | ) |              | $ | (24,602 | )
|Non-cash charges (credits) to net loss              |  |                  |          |   |              |   |         |  
|Depreciation and amortization                       |  |                  | 20,847   |   |              |   | 21,329  |  
|Restructuring and impairment charge                 |  |                  |         |   |              |   | 1,502   |  
|Amortization of debt acquisition costs              |  |                  | 3,259    |   |              |   | 2,614   |  
|Amortization of bond premium                        |  |                  | (278     | ) |              |   | (257    | )
|Change in value of financial instruments            |  |                  | (182     | ) |              |   | (1,261  | )
|Stock-based compensation charge                     |  |                  | 2,015    |   |              |   |        |  
|Postretirement healthcare benefits                  |  |                  | 330      |   |              |   | (124    | )
|Pension expense                                     |  |                  | 784      |   |              |   | 298     |  
|Other long-term liabilities                         |  |                  | 80       |   |              |   |        |  
|Deferred income taxes                               |  |                  | 12,992   |   |              |   | 12,457  |  
|Changes in working capital, net of acquisition      |  |                  |         |   |              |   |         |  
|Accounts receivable                                 |  |                  | (36,071  | ) |              |   | (1,437  | )
|Inventories                                         |  |                  | 53,879   |   |              |   | 39,145  |  
|Accrued trade marketing expense                     |  |                  | 4,867    |   |              |   | (9,260  | )
|Accounts payable                                    |  |                  | 2,220    |   |              |   | (25,847 | )
|Accrued liabilities                                 |  |                  | 974      |   |              |   | 7,623   |  
|Other current assets                                |  |                  | 641      |   |              |   | 603     |  
|                                                    |  |                  |          |   |              |   |         |  
|Net cash provided by operating activities           |  |                  | 61,042   |   |              |   | 22,783  |  
|                                                    |  |                  |          |   |              |   |         |  
|Cash flows from investing activities                |  |                  |          |   |              |   |         |  
|Payments for business acquisition                   |  |                  | (186,869 | ) |              |   |        |  
|Capital expenditures                                |  |                  | (8,945   | ) |              |   | (12,269 | )
|Pinnacle merger consideration                       |  |                  |         |   |              |   | 1,595   |  
|Sale of plant assets                                |  |                  |         |   |              |   | 561     |  
|                                                    |  |                  |          |   |              |   |         |  
|Net cash used in investing activities               |  |                  | (195,814 | ) |              |   | (10,113 | )
|                                                    |  |                  |          |   |              |   |         |  
|Cash flows from financing activities                |  |                  |          |   |              |   |         |  
|Change in bank overdrafts                           |  |                  | (6,713   | ) |              |   | (308    | )
|Repayment of capital lease obligations              |  |                  | (77      | ) |              |   | (62     | )
|Equity contribution                                 |  |                  | 40,000   |   |              |   |        |  
|Debt acquisition costs                              |  |                  | (3,743   | ) |              |   | (34     | )
|Proceeds from bank term loan                        |  |                  | 143,000  |   |              |   |        |  
|Proceeds from notes payable borrowing               |  |                  | 2,410    |   |              |   | 31,626  |  
|Repayments of notes payable                         |  |                  | (947     | ) |              |   | (30,177 | )
|Repayments of long term obligations                 |  |                  | (30,000  | ) |              |   | (2,725  | )
|                                                    |  |                  |          |   |              |   |         |  
|Net cash provided by (used in) financing activities |  |                  | 143,930  |   |              |   | (1,680  | )
|                                                    |  |                  |          |   |              |   |         |  
|Effect of exchange rate changes on cash             |  |                  |         |   |              |   |        |  
|                                                    |  |                 
|Net change in cash and cash equivalents             |  |                  | 9,158    |   |              |   | 10,990  |  
|Cash and cash equivalents - beginning of period     |  |                  | 519      |   |              |   | 2,235   |  
|                                                    |  |                  |          |   |              |   |         |  
|Cash and cash equivalents - end of period           |  | $                | 9,677    |   |              | $ | 13,225  |  
|                                                    |  |                  |          |   |              |   |         |  
|Supplemental disclosures of cash flow information:  |  |                  |          |   |              |   |         |  
|Interest paid                                       |  | $                | 45,256   |   |              | $ | 30,184  |  
|Interest received                                   |  |                  | 400      |   |              |   | 223     |  
|Income taxes refunded (paid)                        |  |                  | (216     | ) |              |   | 438     |  
|Non-cash investing activity:                        |  |                  |          |   |              |   |         |  
|Capital lease activity                              |  |                  | (12      | ) |              |   |        |  

See accompanying Notes to Unaudited Consolidated Financial Statements



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##### Table of Contents

PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY (unaudited)

(in thousands, except share amounts and where noted in millions)





|                                                     |        |              |        |                            |   |                     |   |         |                                             |   |          |                                     |     |   |                            |   |  |   |        |   |     |   |         |  
|---------------------------------------------------- | ------ | ------------ | ------ | -------------------------- | - | ------------------- | - | ------- | ------------------------------------------- | - | -------- | ----------------------------------- | --- | - | -------------------------- | - |  | - | ------ | - | --- | - | ------- | -
|                                                     |        | Common Stock |        | Additional Paid In Capital |   | Accumulated Deficit |   |         | Carryover ofPredecessor
Basis of Net
Assets |   |          | AccumulatedOther Comprehensive Loss |     |   | Total Shareholders Equity |  
|                                                     |        |              |        |                            |  
|                                                     | Shares |              | Amount |                            |   |                     |   |        
|Balance at December 26, 2004                         |        | 100          |        | $                          |  |                     | $ | 519,433 |                                             | $ | (108,619 | )                                   |     | $ | (17,495                    | ) |  | $ | 48     |   |     | $ | 393,367 |  
|Impact of additional purchase accounting adjustments |        |              |        |                            |   |                     |   |         |                                             |   |          |                                     | 157 |   |                            |   |  |   |        |   | 157 |  
|Comprehensive income:                                |        |              |        |                            |   |                     |   |         |                                             |   |          |                                     |     |   |                            |   |  |   |        |   |     |   |         |  
|Net loss                                             |        |              |        |                            |   |                     |   |         |                                             |   | (24,602  | )                                   |     |   |                            |   |  |   |        |   |     |   | (24,602 | )
|Foreign currency translation                         |        |              |        |                            |   |                     |   |         |                                             |   |          |                                     |     |   |                            |   |  |   | 5      |   |     |   | 5       |  
|                                                     |        |              |        |                            |   |                     |   |         |                                             |   |          |                                     |     |   |                            |   |  |   |        |   |     |   |         |  
|Total comprehensive loss                             |        |              |        |                            |   |                     |   |         |                                             |   |          |                                     |     |   |                            |   |  |   |        |   |     |   | (24,597 | )
|                                                     |        |              |        |                            |   |                     |   |         |                                             |   |          |                                     |     |   |                            |   |  |   |        |   |     |   |         |  
|Balance at June 26, 2005                             |        | 100          |        | $                          |  |                     | $ | 519,433 |                                             | $ | (133,221 | )                                   |     | $ | (17,338                    | ) |  | $ | 53     |   |     | $ | 368,927 |  
|                                                     |        |              |        |                            |   |                     |   |         |                                             |   |          |                                     |     |   |                            |   |  |   |        |   |     |   |         |  
|Balance at December 25, 2005                         |        | 100          |        | $                          |  |                     | $ | 529,425 |                                             | $ | (151,795 | )                                   |     | $ | (17,338                    | ) |  | $ | (3,768 | ) |     | $ | 356,524 |  
|                                                     |        |              |        |                            |   |                     |   |         |                                             |   |          |                                     |     |   |                            |   |  |   |        |   |     |   |         |  
|Equity contribution:                                 |        |              |        |                            |   |                     |   |         |                                             |   |          |                                     |     |   |                            |   |  |   |        |   |     |   |         |  
|Cash                                                 |        |              |        |                            |   |                     |   | 40,000  |                                             |   |          |                                     |     |   |                            |   |  |   |        |   |     |   | 40,000  |  
|Equity related compensation                          |        |              |        |                            |   |                     |   | 2,015   |                                             |   |          |                                     |     |   |                            |   |  |   |        |   |     |   | 2,015   |  
|Comprehensive income:                                |        |              |        |                            |   |                     |   |         |                                             |   |          |                                     |     |   |                            |   |  |   |        |   |     |   |         |  
|Net loss                                             |        |              |        |                            |   |                     |   |         |                                             |   | (5,315   | )                                   |     |   |                            |   |  |   |        |   |     |   | (5,315  | )
|Foreign currency translation                         |        |              |        |                            |   |                     |   |         |                                             |   |          |                                     |     |   |                            |   |  |   | 64     |   |     |   | 64      |  
|                                                     |        |              |        |                            |   |                     |   |         |                                             |   |          |                                     |     |   |                            |   |  |   |        |   |     |   |         |  
|Total comprehensive loss                             |        |              |        |                            |   |                     |   |         |                                             |   |          |                                     |     |   |                            |   |  |   |        |   |     |   | (5,251  | )
|                                                     |        |              |        |                            |   |                     |   |         |                                             |   |          |                                     |     |   |                            |   |  |   |        |   |     |   |         |  
|Balance at June 25, 2006                             |        | 100          |        | $                          |  |                     | $ | 571,440 |                                             | $ | (157,110 | )                                   |     | $ | (17,338                    | ) |  | $ | (3,704 | ) |     | $ | 393,288 |  
|                                                     |        |              |        |                            |   |                     |   |         |                                             |   |          |                                     |     |   |                            |   |  |   |        |   |     |   |         |  

See accompanying Notes to Unaudited Consolidated Financial Statements



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##### Table of Contents

PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in millions)



1. Summary of Business Activities

Business Overview

Pinnacle Foods Group Inc. (hereafter referred to as the Company or PFGI) is a leading producer, marketer and distributor of high quality, branded
convenience food products, the products and operations of which are managed and reported in two operating segments: (i) frozen foods and (ii) dry foods. The Companys frozen foods segment consists primarily of Swanson® and Hungry Man® frozen foods products, Van de Kamps® and Mrs. Pauls® frozen seafood, Aunt Jemima® frozen breakfasts, Lenders® bagels and other frozen foods under the Celeste® and Chefs Choice® names, as well as food service and private label products. The Companys dry foods
segment consists primarily of Vlasic® pickles,
peppers and relish products, Duncan Hines® baking
mixes and frostings, Mrs. Butterworths®
and Log Cabin® syrups and pancake mixes, Open
Pit® barbecue sauce and Armour® canned meats, as well as food service and private label
products.

Effective November 24, 2003, Pinnacle Foods Holding Corporation (PFHC) and certain newly-formed investor companies consummated
a merger (the Pinnacle Transaction), where PFHC was effectively acquired by Crunch Equity Holding, LLC (LLC). On November 25, 2003, LLC entered into a definitive agreement with Aurora Foods Inc. (Aurora) that
provided for a comprehensive restructuring transaction in which PFHC was merged with and into Aurora (the Aurora Merger), with Aurora surviving this merger. The combination of Aurora and PFHC was treated as a purchase, with LLC as the
accounting acquirer, in accordance with Statement of Financial Accounting Standards No. 141, Business Combinations. This restructuring transaction was completed on March 19, 2004 and the surviving company was renamed PFGI.

In December 2004, the Companys board of directors approved a change in PFGIs fiscal year end from July 31 to the last Sunday in December.

2. Interim Financial Statements

In the opinion of management, the accompanying unaudited consolidated financial statements
contain all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of PFGIs financial position as of June 25, 2006, and the results of operations and cash flows for the three and six months ended
June 25, 2006 and June 26, 2005. The results of operations are not necessarily indicative of the results to be expected for the full year. The accompanying unaudited consolidated financial statements and notes thereto should be read in
conjunction with the audited consolidated financial statements and notes thereto for the year ended December 25, 2005.

3. Acquisition

Acquisition of Food Products Business of The Dial Corporation

On March 1, 2006, the Company acquired certain assets and assumed certain liabilities of the food products business (the Armour
Business) of The Dial Corporation for $183 million in cash. The assets acquired include inventory, a production facility, machinery and equipment, contract rights and certain intangible assets including trademarks and licenses. The liabilities
assumed include a post-retirement medical benefit for certain employees, vacation pay liabilities and severance liabilities. The purchase price will be increased dollar for dollar after the closing date if the value of inventory included with the
Armour Business at closing exceeds a specified target or decreased dollar for dollar if the value of the inventory at closing is less than such target. Management expects the value of the inventory included in the Armour Business to be settled
during the third quarter of 2006.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



The acquisition of the Armour Business is expected to complement the Companys existing product lines that
together will provide growth opportunities and scale. The Armour Business is a manufacturer, distributor and marketer of products in the canned meats category. Primarily all of the products are produced at the manufacturing facility located in Ft.
Madison, Iowa, which was acquired in the transaction. Products are sold under the Armour brand name as well as private-label and certain co-pack arrangements. The Armour Business offers products in eleven of the fifteen segments within the canned
meat category, including Vienna sausage, potted meat, and sliced dried beef.

The acquisition of the Armour Business is being accounted for under the
purchase method of accounting. Accordingly, the results from the Armour Business are included in the consolidated financial statements from the acquisition date. The Armour Business results of operations and assets are included in the dry foods
segment.

Concurrently with the acquisition but effective as of February 14, 2006, the Company entered into an Amendment No. 4 and Agreement to
the existing senior secured credit facilities (described in Note 9). Among other things, the amendment approved the acquisition of the Armour Business and provided for the making of $143 million of additional tack-on term loans to fund a portion of
the acquisition. The amendment also changed the senior secured credit facilities in other respects, including: (a) the leverage ratio calculations have been adjusted such that the amount of indebtedness used in such calculations is no longer
subject to averaging and is reduced by certain cash and cash equivalents, (b) the leverage ratio threshold for the quarter ending on or about March 31, 2006 has been changed from 5.00 to 1.00 to 5.25 to 1.00, and (c) under certain
circumstances, Pinnacle may be able to use equity contributions to cure financial covenant defaults, if any, that may occur in the future under the senior secured credit facilities.

The Company funded the remaining portion of the purchase price through equity contributions from the shareholders of LLC.

The preliminary cost of the Armour Business consists of:



|                          |  |   |        
|------------------------- |  | - | -------
|Stated purchase price     |  | $ | 183,000
|Acquisition costs         |  |   | 3,869  
|                          |  |   |        
|Total cost of acquisition |  | $ | 186,869
|                          |  |   |        

The purchase price allocation discussed below is preliminary and subject to finalization of appraisals, purchase
price adjustments discussed above, calculations of any assumed liabilities, finalization of severance and vacation pay arrangements and accounting for income taxes. Portions of the purchase price, including intangible assets, are being identified by
independent appraisers utilizing proven valuation procedures and techniques. While the Company is awaiting receipt of the final valuation report supporting the valuation of inventories, fixed assets and intangible assets, the amounts listed below
were based upon preliminary analysis. The other current asset is the value the Company has ascribed to the services performed by Dial under a transition services agreement that expired June 28, 2006. The value was based upon the estimated cost
of providing such services and was expensed over the 120 days of the agreement (through June 28, 2006). The following table summarizes the preliminary allocation of the total cost of the Pinnacle acquisition to the assets acquired and
liabilities assumed:



|                                     |  |   |        
|------------------------------------ |  | - | -------
|Assets acquired:                     |  |   |        
|Land                                 |  | $ | 900    
|Plant assets                         |  |   | 46,476 
|Inventories                          |  |   | 39,242 
|Other current asset                  |  |   | 2,000  
|Tradenames                           |  |   | 28,700 
|Recipes and formulas                 |  |   | 5,000  
|Private label customer relationships |  |   | 20,000 
|Goodwill                             |  |   | 54,017 
|                                     |  |   |        
|Fair value of assets acquired        |  |   | 196,335
|Liabilities assumed                  |  |   |        
|Other accrued liabilities            |  |   | 2,210  
|Postretirement benefit liability     |  |   | 7,256  
|                                     |  |   |        
|Total cost of acquisition            |  | $ | 186,869
|                                     |  |   |        



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



Based upon the preliminary allocation, the value assigned to total intangible assets amounted to $107,717. Of the
total intangible assets, $5,000 is assigned to recipes and formulas, which are being amortized over 5 years and $20,000 is assigned to private label customer relationships, which are being amortized over seven years. In addition, $28,700 is assigned
to Tradenames that are not subject to amortization. Goodwill, which is not subject to amortization, amounted to $54,017. All of the intangible assets acquired in the transaction are recorded within the dry foods business and based upon preliminary
tax allocations will result in approximately $98 million of tax deductible goodwill and intangible assets.

In accordance with the requirements of purchase
method accounting for acquisitions, inventories as of March 1, 2006 were valued at fair value (also referred to as net realizable value, which is defined as estimated selling prices less the sum of (a) costs of disposal and (b) a
reasonable profit allowance for the selling effort of the acquiring entity) which in the case of finished products was $4,386 higher than Dials historical manufacturing cost and in the case of work-in-progress was $184 higher than Dials
historical manufacturing cost. The Companys cost of products sold for the three and six months ended June 25, 2006 includes a pre-tax charge of $2,542 and $4,570, respectively, related to the flow through of the increase in fair value.

Pro forma Information

The following schedule includes statements of operations data for the unaudited pro forma results for the six months ended June 25, 2006 and June 26, 2005 as if the Armour Business had been acquired as of December 27, 2004.
The pro forma information includes the actual results with pro forma adjustments for the change in interest expense related to the additional borrowing discussed above, purchase accounting adjustments resulting in changes to depreciation expense and
related adjustments to the provision for income tax.

The unaudited pro forma information is provided for illustrative purposes only. It does not purport
to represent what the results of operations would have been had the Armour Business been acquired on the date indicated above, nor does it purport to project the results of operations for any future period or as of any future date.



|                                          |  |                  |         |   |              |   |         |  
|----------------------------------------- |  | ---------------- | ------- | - | ------------ | - | ------- | -
|                                          |  | Six months ended |        
|                                          |  | June 25,2006     |         |   | June 26,2005 |  
|Net sales                                 |  | $                | 709,393 |   |              | $ | 714,735 |  
|Earnings (loss) before interest and taxes |  | $                | 9,128   |   |              | $ | (5,464  | )
|Net loss                                  |  | $                | (5,070  | ) |              | $ | (20,250 | )

Pro forma depreciation and amortization expense included above was $22,306 and $25,542 for the six months ended
June 25, 2006 and June 26, 2005, respectively.

Included in earnings (loss) before interest and taxes in the pro forma information above for the
six months ended June 25, 2006 are the following material charges:



|                                                                                                         |  |                               |      
|-------------------------------------------------------------------------------------------------------- |  | ----------------------------- | -----
|                                                                                                         |  | Six Months EndedJune 25, 2006
|Flow through of fair value of the Armour Business inventories over manufactured cost as of March 1, 2006 |  | $                             | 4,570
|Stock based compensation expense                                                                         |  |                               | 1,415
|                                                                                                         |  |                               |      
|Impact on earnings (loss) before interest and taxes                                                      |  | $                             | 5,985
|                                                                                                         |  |                               |      

There were no material non-recurring charges included in the pro forma information for the six months ended
June 26, 2005.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



4. Restructuring and Impairment Charges

Frozen Food Segment

Erie, Pennsylvania Production Facility

On April 29, 2005, the
Companys board of directors approved a plan to permanently close its Erie, Pennsylvania production facility, as part of the Companys plan of consolidating and streamlining production activities after the Aurora merger. Production from
the Erie plant, which manufactured Mrs. Pauls and Van de Kamps frozen seafood products and Aunt Jemima frozen breakfast products, has been relocated primarily to the Companys Jackson, Tennessee production facility. Activities
related to the closure of the plant are expected to be completed in 2006 and will result in the elimination of approximately 290 positions. Employee termination activities commenced in July 2005 and were substantially completed by the end of the
first quarter of 2006. In accordance with SFAS No. 112, Employers Accounting for Postemployment Benefits, the Company has accrued severance costs related to the employees to be terminated. In addition, the following table contains
detailed information about the charges incurred related to the Erie restructuring plan, recorded in accordance with SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities:



|                   |  |                       |                         |                           |                               |          |  |                           |       |  |   |     |  |   |    
|------------------ |  | --------------------- | ----------------------- | ------------------------- | ----------------------------- | -------- |  | ------------------------- | ----- |  | - | --- |  | - | ---
|Description        |  | EstimatedTotalCharges |                         | Change inEstimatedCharges |                               | Incurred |  | EstimatedRemainingCharges
|                   |  |                       | ThroughDecember 25,2005 |                           | Six Months EndedJune 25, 2006 |         
|Employee severance |  | $                     | 590                     |                           | $                             | 363      |  | $                         | 909   |  | $ | 44  |  | $ |   
|Other costs        |  |                       | 3,650                   |                           |                               | 2,309    |  |                           | 4,978 |  |   | 841 |  |   | 140
|                   |  |                       |                         |                           |                               |          |  |                           |       |  |   |     |  |   |    
|Total              |  | $                     | 4,240                   |                           | $                             | 2,672    |  | $                         | 5,887 |  | $ | 885 |  | $ | 140
|                   |  |                       |                         |                           |                               |          |  |                           |       |  |   |     |  |   |    

The charges incurred have been included in the Other expense (income), net line in the Consolidated Statement of
Operations. All such charges are reported under the frozen foods business segment.

The Company has transferred equipment with a net book value of
approximately $3 million to other production locations, primarily in Jackson, Tennessee. The remaining property, plant and equipment have been evaluated as to recoverability. Based on an estimate of future cash flows over the remaining useful life
of the assets, depreciation expense has been accelerated on the remaining asset value and resulted in additional depreciation expense of $4,788 during fiscal 2005 and $523 during the first quarter of 2006. No further deprecation expense on these
assets is expected to be recorded.

Employees terminated as a result of this closure are eligible to receive severance pay and other benefits totaling
$953, all of which has been paid as of June 25, 2006. Other closing costs of approximately $5,959 relate to facility operating costs during the shutdown period and other shutdown costs and expenses associated with dismantling, transferring and
reassembling certain equipment to Jackson, Tennessee. As of June 25, 2006, $50 has been accrued and $5,769 has been spent.

In connection with the
plant closure, facility operating and shutdown costs will be incurred until the plant is sold and are expected to result in expense as incurred in the Companys Statements of Operations of approximately $140 in the third quarter of 2006. In
addition, subsequent to the third quarter, these costs could approximate $125 per quarter until the plant is sold. Also, the Company is making capital expenditures in connection with this plant consolidation project, which will total approximately
$9.5 million and will be incurred through the third quarter of 2006, $9.4 million of which has been incurred through the second quarter of 2006.

Mattoon, Illinois Production Facility

On April 21, 2005, the Company made and announced its decision effective May 9, 2005 to
shutdown a bagel production line at its Mattoon, Illinois facility, which produces the Companys Lenders® bagels. In connection with the shutdown of the production line, the Company has terminated 28 full-time and 7 part-time employees. A portion of the
assets that were used in the bagel line will be utilized in other production areas within the Company. In accordance with SFAS No. 144, Accounting for the Impairment and Disposal of Long-Lived Assets, the Company incurred a non-cash
charge of $862 related to the asset impairment of the bagel line, which has been recorded as a component of Other expense (income), net in the Consolidated Statement of Operations for the six months ended June 26, 2005. All such charges are
reported under the frozen foods business segment.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



Omaha, Nebraska Production Facility

On April 7, 2004, the Company made and announced its decision to permanently close its Omaha, Nebraska production facility, as part of the Companys plan of consolidating and streamlining production
activities after the Aurora merger. Production from the Omaha plant, which manufactured Swanson frozen entree retail products and frozen foodservice products, ceased in December 2004 and has been relocated to the Companys Fayetteville,
Arkansas and Jackson, Tennessee production facilities. Activities related to the closure of the plant were completed in the first quarter of 2005 and resulted in the elimination of 411 positions. The following table contains detailed information
about the charges incurred to date related to the Omaha restructuring plan, recorded in accordance with SFAS No. 112, Employers Accounting for Postemployment Benefits, SFAS No. 144, Accounting for the Impairment and
Disposal of Long-Lived Assets and SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities:



|                         |  |                          |        |                           |   |                               |           |  |   |          |   |                           |   |        |  |   |     |  |   |   
|------------------------ |  | ------------------------ | ------ | ------------------------- | - | ----------------------------- | --------- |  | - | -------- | - | ------------------------- | - | ------ |  | - | --- |  | - | --
|Description              |  | OriginalEstimatedCharges |        | Change inEstimatedCharges |   |                               | Transfers |  |   | Incurred |   | EstimatedRemainingCharges
|                         |  |                          |        | ThroughDecember 25,2005   |   | Six Months EndedJune 25, 2006 |          
|Asset impairment charges |  | $                        | 7,400  |                           | $ | 2,649                         |           |  |   |          |   |                           | $ | 10,049 |  | $ |    |  | $ |  
|Employee severance       |  |                          | 2,506  |                           |   |                              |           |  |   | 59       |   |                           |   | 2,565  |  |   |    |  |   |  
|Other costs              |  |                          | 4,984  |                           |   | (472                          | )         |  |   | (59      | ) |                           |   | 4,283  |  |   | 110 |  |   | 60
|                         |  |                          |        |                           |   |                               |           |  |   |          |   |                           |   |        |  |   |     |  |   |   
|Total                    |  | $                        | 14,890 |                           | $ | 2,177                         |           |  | $ |         |   |                           | $ | 16,897 |  | $ | 110 |  | $ | 60
|                         |  |                          |        |                           |   |                               |           |  |   |          |   |                           |   |        |  |   |     |  |   |   

The charges incurred have been included in Other expense (income), net in the Consolidated Statement of
Operations. All such charges are reported under the frozen foods business segment.

The Company had planned to transfer equipment with a net book value of
approximately $9,700 to other production locations, primarily in Fayetteville, Arkansas and Jackson, Tennessee. Due to the delay in closing the Omaha plant and the need to have production up and running in the Fayetteville plant, the Company was
unable to transfer certain equipment with a net book value of $6,196 and instead incurred capital expenditures to purchase, build and modify the necessary equipment in Fayetteville. In addition to the impairment charge initially recorded in the
first quarter of 2004, the Company evaluated the remaining property, plant and equipment as well as existing offers to sell the plant and equipment, and recorded an impairment charge of $2,649 in December 2004.

Employees terminated as a result of this closure were eligible to receive severance pay and benefits totaling $2,565, all of which has been disbursed. Other closing
costs of approximately $4,453 relate to other shutdown costs. As of June 25, 2006, $4,169 has been disbursed and $224 has been incurred and accrued.

The Company will continue to incur certain costs until the plant is sold. We expect these costs to approximate $60 per quarter and the costs will be recorded in expense as incurred in the Companys Statements of Operations.

The following table summarizes impairment and restructuring charges during the six months ended June 25, 2006. It also includes severance liabilities assumed or
established in purchase accounting. These amounts are recorded in accrued liabilities.



|                   |  |                            |     |           |   |                   |  |                |   |  |                        |        |   |  |   |    
|------------------ |  | -------------------------- | --- | --------- | - | ----------------- |  | -------------- | - |  | ---------------------- | ------ | - |  | - | ---
|Description        |  | Balance atDecember 25,2005 |     | Additions |   | NoncashReductions |  | CashReductions |   |  | Balance atJune 25,2006
|Employee severance |  | $                          | 682 |           | $ |                  |  | $              |  |  | $                      | (414   | ) |  | $ | 268
|Other costs        |  |                            | 274 |           |   | 995               |  |                |  |  |                        | (995   | ) |  |   | 274
|                   |  |                            |     |           |   |                   |  |                |   |  |                        |        |   |  |   |    
|Total              |  | $                          | 956 |           | $ | 995               |  | $              |  |  | $                      | (1,409 | ) |  | $ | 542
|                   |  |                            |     |           |   |                   |  |                |   |  |                        |        |   |  |   |    



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



5. Stock-Based Compensation Expense

On December 26, 2005, the Company adopted Statement of Financial Accounting
Standards No. 123 (revised 2004), Share-Based Payment, (SFAS 123(R)) which requires the measurement and recognition of compensation expense for all stock-based payment awards made to employees and directors including
employee stock options and employee stock purchases based on estimated fair values. SFAS 123(R) supersedes the Companys previous accounting under Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees (APB 25) for periods beginning in fiscal 2006. In March 2005, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 107 (SAB 107) relating to SFAS 123(R). The Company has applied the
provisions of SAB 107 in its adoption of SFAS 123(R).

The Company adopted SFAS 123(R) using the modified prospective transition method, which requires the
application of the accounting standard as of December 26, 2005, the first day of the Companys fiscal year 2006. The Companys Consolidated Financial Statements as of and for the six months ended June 25, 2006 reflect the impact
of SFAS 123(R). In accordance with the modified prospective transition method, the Companys Consolidated Financial Statements for prior periods have not been restated to reflect, and do not include the impact of SFAS 123(R). Stock-based
compensation expense related to employee stock options for the six months ended June 25, 2006 as a result of adopting SFAS 123(R) was $600, $596 net of tax. In addition, the Company recorded $1,415 (with no related tax impact) for stock-based
compensation expense for the six months ended June 25, 2006 for certain ownership units of LLC that were issued to CDM, which is controlled by certain members of PFGIs management (see discussion below). There was no stock-based
compensation expense recognized during the six months ended June 26, 2005.

SFAS 123(R) requires companies to estimate the fair value of stock-based
payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense using the straight-line method over the requisite service periods in the
Companys Consolidated Statement of Operations. Prior to the adoption of SFAS 123(R), the Company accounted for stock-based awards to employees and directors using the intrinsic value method in accordance with APB 25 as allowed under Statement
of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (SFAS 123). Under the intrinsic value method, no stock-based compensation expense had been recognized in the Companys Consolidated
Statement of Operations, other than as related to certain ownership units of LLC that were issued to CDM Investor Group LLC.

Stock-based compensation
expense recognized during the period is based on the value of the portion of stock-based payment awards that is ultimately expected to vest during the period. Stock-based compensation expense recognized in the Companys Consolidated Statement
of Operations for the six months ended June 25, 2006 included compensation expense for stock-based payment awards granted prior to, but not yet vested as of December 25, 2005 based on the grant date fair value estimated in accordance with
the pro forma provisions of SFAS 123 and compensation expense for the stock-based payment awards granted subsequent to December 25, 2005 based on the grant date fair value estimated in accordance with the provisions of SFAS 123(R). As
stock-based compensation expense recognized in the Consolidated Statement of Operations for the first and second quarter of fiscal 2006 is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. SFAS 123(R)
requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. In the Companys pro forma information required under SFAS 123 for the periods prior
to fiscal 2006, the Company accounted for forfeitures as they occurred.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



The Company continues to use the lattice-binomial option-pricing model (lattice-binomial model) as its
method of valuation for stock-based awards, which was previously used for the Companys pro forma information required under SFAS 123. Since the Companys stock is not publicly traded, the determination of fair value of stock-based payment
awards on the date of grant using an option-pricing model is based upon estimates of enterprise value as well as assumptions regarding a number of highly complex and subjective variables. The estimated enterprise value is based upon forecasted cash
flows for six years plus a terminal year and an assumed discount rate. The other variables used to determine fair value of stock-based payment awards include, but are not limited to the expected stock price volatility of a group of industry
comparable companies over the term of the awards, and actual and projected employee stock option exercise behaviors. Option-pricing models were developed for use in estimating the value of traded options that have no vesting or hedging restrictions
and are fully transferable. Because the Companys employee stock options have certain characteristics that are significantly different from traded options, and because changes in the subjective assumptions can materially affect the estimated
value, in managements opinion, the existing valuation models may not provide an accurate measure of the fair value of the Companys employee stock options. Although the fair value of employee stock options is determined in accordance with
SFAS 123(R) and SAB 107 using an option-pricing model, that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction.

The fair value of each option grant was estimated on the date of the grant using the lattice-binomial model with the following weighted average assumptions used for grants during fiscal 2006.



|                                          |  |                               |  
|----------------------------------------- |  | ----------------------------- | -
|                                          |  | Six months endedJune 25, 2006 |  
|Risk-free interest rate                   |  | 4.73                          | %
|Expected life of option                   |  | 5-9 years                     |  
|Expected volatility of Pinnacle stock     |  | 25.0                          | %
|Expected dividend yield on Pinnacle stock |  | 0                             | %

Volatility was based on a 208 week average volatility of a group of publicly traded food companies.

2004 Stock Option Plan

Crunch Holding Corp.
(CHC), which owns all of the equity interest in the Company has adopted a stock option plan (the 2004 Plan) providing for the issuance of up to 29.6 million shares of CHCs common stock. Pursuant to the option plan,
certain officers, employees, managers, directors and other persons are eligible to receive grants of incentive and nonqualified stock options, as permitted by applicable law. Except as otherwise provided by the plan administrator, two-ninths
(2/9) of the shares of common stock subject to each option shall time vest annually in each of the first three years from the effective date of the option grant. The remaining one-third (1/3) of the shares of common stock subject to each
option shall vest on the seventh anniversary of the effective date of the option grant unless otherwise determined by the plan administrator. Options under the plan have a termination date of 10 years from the date of issuance.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



The following table summarizes the stock option transactions under the 2004 Plan:



|                                |  |                 |   |  |                               |      |                              |        |                                 |   |       
|------------------------------- |  | --------------- | - |  | ----------------------------- | ---- | ---------------------------- | ------ | ------------------------------- | - | ------
|                                |  | Number ofShares |   |  | WeightedAverageExercise Price |      | WeightedAverageRemainingLife |        | AggregateIntrinsicValue (000s)
|Outstanding - December 26, 2004 |  | 16,954,666      |   |  | $                             | 1.00 |                              |        |                                 |   |       
|                                |  |                 |   | 
|Granted                         |  | 5,906,500       |   |  | $                             | 1.00 |                              |        |                                 |   |       
|Exercised                       |  | (8,888          | ) |  |                               | 1.00 |                              |        |                                 |   |       
|Forteitures                     |  | (2,194,336      | ) |  |                               | 1.00 |                              |        |                                 |   |       
|                                |  |                 |   |  |                               |      |                              |        |                                 |   |       
|Outstanding - December 25, 2005 |  | 20,657,942      |   |  | $                             | 1.00 |                              |        |                                 |   |       
|                                |  |                 |   |  |                               |      |                              |        |                                 |   |       
|Granted                         |  | 4,161,111       |   |  | $                             | 1.00 |                              |        |                                 |   |       
|Exercised                       |  |                |   |  |                               | 1.00 |                              |        |                                 |   |       
|Forteitures                     |  | (2,372,501      | ) |  |                               | 1.00 |                              |        |                                 |   |       
|                                |  |                 |   |  |                               |      |                              |        |                                 |   |       
|Outstanding - June 25, 2006     |  | 22,446,552      |   |  | $                             | 1.00 |                              | 8.0991 |                                 | $ | 22,447
|                                |  |                 |   |  |                               |      |                              |        |                                 |   |       
|Exercisable - June 25, 2006     |  | 7,378,814       |   |  | $                             | 1.00 |                              | 7.0062 |                                 | $ | 7,379 
|                                |  |                 |   |  |                               |      |                              |        |                                 |   |       

The weighted-average fair value of options granted during the six months ended
June 25, 2006 was:



|                                        |  |                               |      
|--------------------------------------- |  | ----------------------------- | -----
|                                        |  | Six months endedJune 25, 2006
|Fair value of each option granted       |  | $                             | 0.24 
|Number of options granted               |  |                               | 4,161
|                                        |  |                               |      
|Total fair value of all options granted |  | $                             | 999  
|                                        |  |                               |      

Concurrent with the start of employment for the Companys Chief Executive Officer, Mr. Jeffrey Ansell,
which was July 5, 2006, the Company granted 3.5 million non-qualified stock options to Mr. Ansell. At the time of the grant, 22.2% of the options were vested and exercisable and will result in a charge in the Statement of Operations
of approximately $195 in the Companys third quarter.

2004 Employee Stock Purchase Plan

CHC has adopted an employee stock purchase plan providing for the issuance of up to 15 million shares of CHCs common stock. Pursuant to the plan, certain
officers, employees, managers, directors and other persons are eligible to purchase shares at the fair market value of such shares on the date of determination. During fiscal 2005, employees purchased 9,982,971 shares of CHCs common stock at
$1.00 per share. No other shares have been purchased.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



Expense Information under SFAS 123(R)

The following table summarizes stock-based compensation expense related to employee stock options and employee stock purchases under SFAS 123(R) for the three and six months ended June 25, 2006 which was
allocated as follows (in millions):



|                                         |  |                                 |     |   |                               |   |       |  
|---------------------------------------- |  | ------------------------------- | --- | - | ----------------------------- | - | ----- | -
|                                         |  | Three Months EndedJune 25, 2006 |     |   | Six Months EndedJune 25, 2006 |  
|Cost of products sold                    |  | $                               | 41  |   |                               | $ | 82    |  
|Marketing and selling expenses           |  |                                 | 113 |   |                               |   | 227   |  
|Administrative expenses                  |  |                                 | 132 |   |                               |   | 1,678 |  
|Research and development expenses        |  |                                 | 14  |   |                               |   | 28    |  
|                                         |  |                                 |     |   |                               |   |       |  
|Pre-Tax Stock-Based Compensation Expense |  |                                 | 300 |   |                               |   | 2,015 |  
|Income Tax Benefit                       |  |                                 | (2  | ) |                               |   | (4    | )
|                                         |  |                                 |     |   |                               |   |       |  
|Net Stock-Based Compensation Expense     |  | $                               | 298 |   |                               | $ | 2,011 |  
|                                         |  |                                 |     |   |                               |   |       |  

In connection with the acquisition of the Armour Business, certain ownership units of LLC were issued to CDM,
which is controlled by certain members of PFGIs management. Certain of these units provide a profits interest consisting of an interest in distributions to the extent in excess of capital contributed by members of the LLC. The interests vest
immediately. The estimated fair value of the interests issued in connection with the acquisition of the Armour Business at the date of the issuance was $1,415, and has been included in the Consolidated Balance Sheet as an increase in the
Companys paid-in-capital and in the Consolidated Statement of Operations as a component of administrative expense reflecting the equity related compensation charge for the fair value immediately after consummation of such transactions.

Pro Forma Information Under SFAS 123 for Periods Prior to Fiscal 2006

SFAS No. 123R requires disclosure of pro forma information for periods prior to its adoption. The pro forma disclosures are based on the fair value of awards at the grant date, amortized to expense over the
service period. The following table illustrates the effect on net earnings if the Company had applied the fair value recognition provisions of SFAS No. 123 to stock-based employee compensation.



|                                                                                                                                                   |  |                                 |        |   |                               |   |         |  
|-------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ------ | - | ----------------------------- | - | ------- | -
|                                                                                                                                                   |  | Three Months EndedJune 26, 2005 |        |   | Six Months EndedJune 26, 2005 |  
|Net loss, as reported                                                                                                                              |  | $                               | (2,174 | ) |                               | $ | (24,602 | )
|Deduct: Total stock-based employee compensation expense determined under fair value method for all stock option awards, net of related tax
effects |  |                                 | (293   | ) |                               |   | (569    | )
|                                                                                                                                                   |  |                                 |        |   |                               |   |         |  
|Pro forma net loss                                                                                                                                 |  | $                               | (2,467 | ) |                               | $ | (25,171 | )
|                                                                                                                                                   |  |                                 |        |   |                               |   |         |  



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



6. Other Expense (Income), net



|                                         |  |                    |       |              |                  |       |              |  |              |       |  |   |       |  
|---------------------------------------- |  | ------------------ | ----- | ------------ | ---------------- | ----- | ------------ |  | ------------ | ----- |  | - | ----- | -
|                                         |  | Three Months Ended |       |              | Six Months Ended |      
|                                         |  | June 25,2006       |       | June 26,2005 |                  |       | June 25,2006 |  | June 26,2005 |      
|Other expense (income) consists of:      |  |                    |       |              |                  |       |              |  |              |       |  |   |       |  
|Restructuring and impairment charges     |  | $                  | 544   |              | $                | 363   |              |  | $            | 995   |  | $ | 2,604 |  
|Merger related costs                     |  |                    |      |              |                  | (101  | )            |  |              |      |  |   | (101  | )
|Amortization of intangibles/other assets |  |                    | 2,390 |              |                  | 1,204 |              |  |              | 3,593 |  |   | 2,407 |  
|Royalty expense (income), net and other  |  |                    | 82    |              |                  | 32    |              |  |              | 138   |  |   | 14    |  
|                                         |  |                    |       |              |                  |       |              |  |              |       |  |   |       |  
|Total other expense                      |  | $                  | 3,016 |              | $                | 1,498 |              |  | $            | 4,726 |  | $ | 4,924 |  
|                                         |  |                    |       |              |                  |       |              |  |              |       |  |   |       |  

Restructuring charges. As described in Note 4, the Company incurred costs in connection with the
planned shutdown of the Omaha, Nebraska and Erie, Pennsylvania facilities as well as the shut down of a production line in Mattoon, Illinois.

7. Inventories



|                                       |  |              |         |   |                  |   |         |  
|-------------------------------------- |  | ------------ | ------- | - | ---------------- | - | ------- | -
|                                       |  | June 25,2006 |         |   | December 25,2005 |  
|Raw materials, containers and supplies |  | $            | 34,032  |   |                  | $ | 38,050  |  
|Finished product                       |  |              | 124,962 |   |                  |   | 139,761 |  
|                                       |  |              |         |   |                  |   |         |  
|                                       |  |              | 158,994 |   |                  |   | 177,811 |  
|Reserves                               |  |              | (2,878  | ) |                  |   | (7,190  | )
|                                       |  |              |         |   |                  |   |         |  
|Total                                  |  | $            | 156,116 |   |                  | $ | 170,621 |  
|                                       |  |              |         |   |                  |   |         |  

Reserves represent amounts necessary to adjust the carrying value of inventory to the lower of cost or net
realizable value, including any costs to sell or dispose.

The Company has various purchase commitments for raw materials, containers, supplies and certain
finished products incident to the ordinary course of business. Such commitments are not at prices in excess of current market.

8. Goodwill and Other Assets

Goodwill



|             |  |                  |         |             |   |        |  |   |              |   |  |   |        
|------------ |  | ---------------- | ------- | ----------- | - | ------ |  | - | ------------ | - |  | - | -------
|             |  | December 25,2005 |         | Acquisition |   | Other  |  |   | June 25,2006
|Frozen Foods |  | $                | 67,713  |             | $ |       |  | $ |             |   |  | $ | 67,713 
|Dry Foods    |  |                  | 291,800 |             |   | 54,017 |  |   | (467         | ) |  |   | 345,350
|             |  |                  |         |             |   |        |  |   |              |   |  |   |        
|Total        |  | $                | 359,513 |             | $ | 54,017 |  | $ | (467         | ) |  | $ | 413,063
|             |  |                  |         |             |   |        |  |   |              |   |  |   |        

The preliminary allocation of the Armour Business purchase price resulted in goodwill of $54,017, all of which is
recorded in the dry foods segment. In addition, the Company recorded adjustments to deferred tax assets and liabilities established at the time of the Pinnacle Transaction.



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##### Table of Contents

PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



Tradenames



|             |  |                  |         |             |   |              |  |   |        
|------------ |  | ---------------- | ------- | ----------- | - | ------------ |  | - | -------
|             |  | December 25,2005 |         | Acquisition |   | June 25,2006
|Frozen Foods |  | $                | 231,542 |             | $ |             |  | $ | 231,542
|Dry Foods    |  |                  | 529,740 |             |   | 28,700       |  |   | 558,440
|             |  |                  |         |             |   |              |  |   |        
|Total        |  | $                | 761,282 |             | $ | 28,700       |  | $ | 789,982
|             |  |                  |         |             |   |              |  |   |        

The preliminary allocation of the Armour Business purchase price resulted in indefinite lived tradename intangible
assets of $28,700, all of which is recorded in the dry foods segment.

Other Assets



|                                                                                               |  |              |        |                  |   |       
|---------------------------------------------------------------------------------------------- |  | ------------ | ------ | ---------------- | - | ------
|                                                                                               |  | June 25,2006 |        | December 25,2005
|Amortizable intangibles, net of accumulated amortization of $11,861 and $8,268, respectively   |  | $            | 34,170 |                  | $ | 12,763
|Deferred financing costs, net of accumulated amortization of $14,240 and $10,981, respectively |  |              | 30,141 |                  |   | 29,657
|Interest rate swap fair value (Note 11)                                                        |  |              | 202    |                  |   | 2,422 
|Restricted cash                                                                                |  |              | 480    |                  |   |      
|                                                                                               |  |              |        |                  |   |       
|Total                                                                                          |  | $            | 64,993 |                  | $ | 44,842
|                                                                                               |  |              |        |                  |   |       

Amortizable intangible assets relate primarily to recipes acquired in the Aurora Merger, which have been assigned
a five year estimated useful life for amortization purposes, and recipes and private label customer relationships acquired with the acquisition of the Armour business, which have been assigned a five year and seven year estimated useful life,
respectively, for amortization purposes. Additionally, during the 21 weeks ended December 26, 2004, the Company reacquired an exclusive license to distribute Duncan Hines product in Canada. The license that was reacquired ran through
June 30, 2006 at which time the Company had exclusive right to distribution of the Duncan Hines product in Canada. Amortization expense during the three and six months ended June 25, 2006 was $2,390 and $3,593, respectively. Amortization
expense during the three and six months ended June 26, 2005 was $1,204 and $2,407, respectively. Estimated amortization expense for each of the next five years is as follows: remainder of 2006 - $3,821, 2007 - $7,643, 2008 - $7,643, 2009 -
$4,727, 2010 - $3,880 thereafter - $6,456.

Deferred financing costs relate to the senior secured credit facilities and senior subordinated notes.
Amortization expense during the three and six months ended June 25, 2006 was $1,969 and $3,259, respectively. Amortization expense during the three and six months ended June 26, 2005 was $1,307 and $2,614, respectively.

Restricted cash relates to unsurrendered bonds from the Aurora bondholders. At the time of the Aurora Merger, certain Aurora bondholders elected to receive equity units
in LLC while others elected to receive cash. The cash was paid upon the surrender and cancellation of the bonds. The Company has an offsetting liability in the same amount, which is included in Other long-term liabilities on the Consolidated Balance
Sheet.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



9. Debt and Interest Expense



|                                                         |  |              |           |                  |   |        
|-------------------------------------------------------- |  | ------------ | --------- | ---------------- | - | -------
|                                                         |  | June 25,2006 |           | December 25,2005
|Long-term debt                                           |  |              |           |                  |   |        
|- Senior secured credit facility - term loan             |  | $            | 601,187   |                  | $ | 488,187
|- 81/4% Senior subordinated notes                        |  |              | 394,000   |                  |   | 394,000
|- Plus: unamortized premium on senior subordinated notes |  |              | 5,649     |                  |   | 5,927  
|- Capital lease obligations                              |  |              | 285       |                  |   | 350    
|                                                         |  |              |           |                  |   |        
|Total Debt                                               |  |              | 1,001,121 |                  |   | 888,464
|Less: current portion of long-term obligations           |  |              | 162       |                  |   | 153    
|                                                         |  |              |           |                  |   |        
|Total long-term debt                                     |  | $            | 1,000,959 |                  | $ | 888,311
|                                                         |  |              |           |                  |   |        



|                                            |  |                    |        |                  |              |   |              |  |   |              |   |  |   |        |  
|------------------------------------------- |  | ------------------ | ------ | ---------------- | ------------ | - | ------------ |  | - | ------------ | - |  | - | ------ | -
|                                            |  | Three months ended |        | Six months ended |             
|                                            |  | June 25,2006       |        |                  | June 26,2005 |   | June 25,2006 |  |   | June 26,2005 |  
|Interest expense                            |  |                    |        |                  |              |   |              |  |   |              |   |  |   |        |  
|Third party interest expense                |  | $                  | 22,666 |                  |              | $ | 18,272       |  | $ | 42,634       |   |  | $ | 36,422 |  
|Related party interest expense              |  |                    | 47     |                  |              |   | 65           |  |   | 90           |   |  |   | 153    |  
|Interest rate swap (gains) losses (Note 11) |  |                    | (843   | )                |              |   | 2,545        |  |   | (1,332       | ) |  |   | (1,440 | )
|                                            |  |                    |        |                  |              |   |              |  |   |              |   |  |   |        |  
|                                            |  | $                  | 21,870 |                  |              | $ | 20,882       |  | $ | 41,392       |   |  | $ | 35,135 |  
|                                            |  |                    |        |                  |              |   |              |  |   |              |   |  |   |        |  

In November 2003, the Company entered into a $675.0 million Credit Agreement (senior secured credit
facilities) with JPMorgan Chase Bank (a related party of JPMP as defined in Note 13) and other financial institutions as lenders, which provides for a $545.0 million seven-year term loan B facility, of which $120.0 million was made
available on November 25, 2003 and $425.0 million was made available as a delayed draw term loan on the closing date of the Aurora Merger on March 19, 2004. Concurrently with the acquisition of the Armour Business but effective as of
February 14, 2006, the Company entered into an Amendment No. 4 and Agreement to the existing senior secured credit facilities (Amendment No. 4). Among other things, Amendment No. 4 approved the acquisition and
provided for the making of $143.0 million of additional tack-on term loans to fund a portion of the acquisition. The term loan matures November 25, 2010. The senior secured credit facilities also provide for a six-year $130.0 million revolving
credit facility, of which up to $65.0 million was made available on November 25, 2003, and the remaining $65.0 million was made available on the closing date of the Aurora Merger on March 19, 2004. The revolving credit facility
expires November 25, 2009. There were no borrowings outstanding under the revolver as of December 25, 2005 and June 25, 2006.

As of
June 25, 2006, $2,927 of our term loan was owed to JPMorgan Chase Bank. There was no related party debt as of December 25, 2005.

Our borrowings
under the senior secured credit facilities bear interest at a floating rate and are maintained as base rate loans or as Eurodollar loans. Base rate loans bear interest at the base rate plus the applicable base rate margin, as defined in the senior
secured credit facilities. Base rate is defined as the higher of (i) the prime rate and (ii) the Federal Reserve reported overnight funds rate plus 1/2 of 1%. Eurodollar loans bear interest at the adjusted Eurodollar rate, as described in
the senior secured credit facilities, plus the applicable Eurodollar rate margin.

The applicable margins with respect to our revolving credit facility
will vary from time to time in accordance with the terms thereof and agreed upon pricing grids based on our leverage ratio as defined in our senior secured credit facilities. The applicable margin with respect to the term loan facility and the
revolving credit facility, which was adjusted in connection with the June 2, 2006 amendment discussed below, is currently:



| |  | In the case of base rate loans: 1.00% for the term loan and 2.25% for the revolving credit facility.
|- |  | ----------------------------------------------------------------------------------------------------



| |  | In the case of Eurodollar loans: 2.00% for the term loan and 3.25% for the revolving credit facility.
|- |  | -----------------------------------------------------------------------------------------------------



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



The range of margins for the revolving credit facility is:



| |  | In the case of base rate loans: 1.75% to 2.25%.
|- |  | -----------------------------------------------



| |  | In the case of Eurodollar loans: 2.75% to 3.25%.
|- |  | ------------------------------------------------

A commitment fee of
0.50% per annum applies to the unused portion of the revolving loan facility. For the three and six months ended June 25, 2006, the weighted average interest rate on the term loan was 7.89% and 7.82%, respectively. For the six months ended
June 25, 2006, the weighted average interest rate on the revolving credit facility was 9.62%. There were no borrowings under the revolving credit facility during the three months ended June 25, 2006. As of June 25, 2006, the
Eurodollar interest rate on the term loan facility was 7.10% and the commitment fee on the undrawn revolving credit facility was 0.50%. For the three and six months ended June 26, 2005, the weighted average interest rate on the term loan was
6.33% and 6.02%, respectively. For the six months ended June 26, 2005, the weighted average interest rate on the revolving credit facility was 6.25%. There were no borrowings under the revolving credit facility during the three months ended
June 26, 2005. As of June 26, 2005, the Eurodollar interest rate on the term loan facility was 6.35% and the commitment fee on the undrawn revolving credit facility was 0.50%.

In April and June 2006, the Company prepaid $15 million and $15 million, respectively, of the term loan facility. Due to the prepayments, the next scheduled installment payable will be in March 2010. The revolving
credit facility terminates on November 25, 2009. The aggregate maturities of the term loan outstanding as of June 25, 2006 are $601,187 in 2010.

The obligations under the senior secured credit facilities are unconditionally and irrevocably guaranteed by each of our direct or indirect domestic subsidiaries (collectively, the Guarantors). In addition, the senior secured
credit facilities are collateralized by first priority or equivalent security interests in (i) all the capital stock of, or other equity interests in, each direct or indirect domestic subsidiary of the Company and 65% of the capital stock of,
or other equity interests in, each direct foreign subsidiary of the Company, or any of its domestic subsidiaries and (ii) certain tangible and intangible assets of the Company and the Guarantors (subject to certain exceptions and
qualifications).

We pay a commission on the face amount of all outstanding letters of credit drawn under the senior secured credit facilities at a per
annum rate equal to the Applicable Margin then in effect with respect to Eurodollar loans under the revolving credit loan facility minus the fronting fee (as defined). A fronting fee equal to 1/4% per annum on the face amount of each letter of
credit is payable quarterly in arrears to the issuing lender for its own account. We also pay a per annum fee equal to 1/2% on the undrawn portion of the commitments in respect of the revolving credit facility. Total letters of credit issuable under
the facilities cannot exceed $40,000. As of December 25, 2005 and June 25, 2006, we had utilized $11,514 and $12,719 respectively, of the revolving credit facility for letters of credit. Of the $130,000 revolving credit facility available,
as of December 25, 2005 and June 25, 2006, we had an unused balance of $118,486 and $117,281, respectively, available for future borrowings and letters of credit, of which a maximum of $28,486 and $27,281, respectively, may be used for
letters of credit.

In November 2003 and February 2004, the Company issued $200.0 million and $194.0 million, respectively, 81/4% senior subordinated notes. The February 2004 notes resulted in gross proceeds of $201.0 million, including
premium. The terms of the February 2004 notes are the same as the November 2003 notes and are issued under the same indenture. The notes are general unsecured obligations of the Company, subordinated in right of payment to all existing and future
senior indebtedness of the Company, and guaranteed on a full, unconditional, joint and several basis by the Companys wholly-owned domestic subsidiaries. See Note 16 for Guarantor and Nonguarantor Financial Statements.

We may redeem all or a portion of the notes prior to December 1, 2008, at a price equal to 100% of the principal amount of the notes plus a make-whole
premium (the greater of: (1) 1% of the then outstanding principal amount of the note; and (2) the excess of: (a) the present value at such redemption date of (i) the redemption price of the note at December 1, 2008 plus
(ii) all required interest payments due on the note through December 1, 2008, computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over (b) the then outstanding principal amount of
the note, if greater). On or after December 1, 2008, we may redeem some or all of the notes at the redemption prices listed below, if redeemed during the twelve-month period beginning on December 1 of the years indicated below:



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##### Table of Contents

PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



|                    |  |            |  
|------------------- |  | ---------- | -
|Year                |  | Percentage |  
|2008                |  | 104.125    | %
|2009                |  | 102.750    | %
|2010                |  | 101.375    | %
|2011 and thereafter |  | 100.000    | %

At any time prior to December 1, 2006, we may redeem up to 35% of the original aggregate principal amount of
the notes with the net cash proceeds of certain equity offerings at a redemption price equal to 108.250% of the principal amount thereof, plus accrued and unpaid interest, so long as (a) at least 65% of the original aggregate amount of the
notes remains outstanding after each such redemption and (b) any such redemption by us is made within 90 days of such equity offering.

If a change of
control occurs (as defined in the indenture pursuant to which the notes were issued), and unless we have exercised our right to redeem all of the notes as described above, the note holders will have the right to require the Company to repurchase all
or a portion of the notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of repurchase.

The notes include a provision that the Company will file with the SEC on or prior to August 21, 2004 a registration statement relating to an offer to exchange the notes for an issue of SEC-registered notes with terms identical to the
notes and use its reasonable best effort to cause such registration statement to become effective on or prior to October 20, 2004. Since the exchange offer was not completed before November 19, 2004, the annual interest rate borne by the
notes increased by 1.0% per annum until the exchange offer was completed, which occurred on February 1, 2005. As of this date, the Company was no longer paying the additional interest.

Our senior secured credit facilities and the notes contain a number of covenants that, among other things, limit, subject to certain exceptions, our ability to incur
additional liens and indebtedness, make capital expenditures, engage in certain transactions with affiliates, repay other indebtedness (including the notes), make certain distributions, make acquisitions and investments, loans or advances, engage in
mergers or consolidations, liquidations and dissolutions and joint ventures, sell assets, make dividends, amend certain material agreements governing our indebtedness, enter into guarantees and other contingent obligations and other matters
customarily restricted in similar agreements. In addition to scheduled periodic repayments, we are also required to make mandatory repayments of the loans under the senior secured credit facilities with a portion of its excess cash flow, as defined.
Due to voluntary prepayments of the term loan made by the Company in 2005, the Company was not required to make any mandatory prepayments for 2005. In addition, our senior secured credit facilities contain, among others, the following financial
covenants: a maximum total leverage ratio, a minimum interest coverage ratio and a maximum capital expenditure limitation. See the discussion below regarding the amendment to the senior credit agreement where these covenants have been adjusted.

Amendments to Senior Secured Credit Facilities

On September 14, 2004, the Company was first in default under its senior secured credit facilities. On November 19, 2004 the Company received required lender approval to permanently waive the defaults
mentioned above and amend the financial covenants for future reporting periods. The terms of the permanent amendment and waiver included among other items, a 50 basis point increase to the applicable margin (described above), the addition of a new
senior covenant leverage ratio through December 2005, amendment of the interest expense coverage ratio through December 2005, suspension of the maximum total leverage ratio until March 2006, and certain limitations, restrictions and additional
reporting requirements during the amendment period which ends on the second business day following the date on which the Company delivers to the Administrative Agent financial statements for the fiscal quarter ending March 2006, which occurred on
May 10, 2006.



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##### Table of Contents

PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



In connection with Amendment No. 4 dated February 14, 2006, the senior secured credit facilities were also
changed in other respects, including: (a) the leverage ratio calculations have been adjusted such that the amount of indebtedness used in such calculations is no longer subject to averaging and is reduced by certain cash and cash equivalents,
(b) the leverage ratio threshold for the quarter ending on or about March 31, 2006 has been changed from 5.00 to 1.00 to 5.25 to 1.00, and (c) under certain circumstances, Pinnacle may be able to use equity contributions to cure
financial covenant defaults, if any, that may occur in the future under the senior secured credit facilities.

On June 2, 2006, the Company entered
into Amendment No. 5, which amended the senior credit facilities in the following manner: (a) to reduce the applicable margin with respect to any Term Loan to (i) 1.00% per annum, in the case of an ABR Loan or
(ii) 2.00% per annum, in the case of a Eurodollar Loan, (b) to require the payment of certain fees in connection with repricings of the Term Loans on or prior to June 2, 2007 and (c) to permit additional Indebtedness in an
aggregate principal amount of up to $15,000,000 arising from letters of credit issued other than pursuant to the Credit Agreement.

Other Current Notes Payable

In addition to the debt instruments discussed above, the Company entered into a short term notes payable
agreement during the second quarter of 2006 for the financing of the Companys annual insurance premiums. As of June 25, 2006, the balance of the notes payable totaled $1,647. The note requires monthly payments through February 2007 and
has an imputed interest rate of 6.25%.

10. Pension and Retirement Plans

As of June 25, 2006, the Company maintains a noncontributory defined benefit pension
plan that covers substantially all eligible union employees and provides benefits generally based on years of service and employees compensation. The Companys pension plan is funded in conformity with the funding requirements of
applicable government regulations. As disclosed in the Companys Consolidated Financial Statements for the fiscal year ended December 25, 2005, the Company does not expect to make a contribution during the current fiscal year.

The Company also maintains a postretirement benefits plan that provides health care and life insurance benefits to eligible retirees, covers most U.S. employees and
their dependents and is self-funded. Employees who have 10 years of service after the age of 45 and retire are eligible to participate in the postretirement benefit plan. Effective March 19, 2004 and in connection with the acquisition of Aurora
Foods, liabilities were assumed related to eight retired employees (Aurora Retirees). Upon amendments that became effective on May 23, 2004, the Companys net out-of-pocket costs for postretirement health care benefits was
substantially reduced as retired employees, excluding the Aurora Retirees, are now required to pay 100% of the monthly premium cost, as calculated by our insurance administrator.

In connection with the acquisition of the Armour Business on March 1, 2006, hourly employees covered under the union collective bargaining agreement were added to the noncontributory defined benefit pension plan.
The liability related to the service period up to the date of acquisition was retained by The Dial Corporation. Additionally, the Company assumed the liability for postretirement health care and life insurance related to certain hourly employees
covered under the union collective bargaining agreement for the Armour Business. The value of the assumed liability, which the Company has estimated to approximate $7.3 million, is preliminary and subject to the final valuation and will be
actuarially determined.

The components of net periodic benefit cost, including the expense related to the employees of the Armour Business from the date
of acquisition, included in the Consolidated Statements of Operations are as follows:



|                          |              |                    |        |              |                  |   |              |   |  |              |        |   |  |   |        |  
|------------------------- | ------------ | ------------------ | ------ | ------------ | ---------------- | - | ------------ | - |  | ------------ | ------ | - |  | - | ------ | -
|Pension Benefits          |              | Three months ended |        |              | Six months ended |  
|                          | June 25,2006 |                    |        | June 26,2005 |                  |   | June 25,2006 |   |  | June 26,2005 |       
|Service cost              |              | $                  | 555    |              |                  | $ | 372          |   |  | $            | 1,019  |   |  | $ | 744    |  
|Interest cost             |              |                    | 899    |              |                  |   | 829          |   |  |              | 1,788  |   |  |   | 1,658  |  
|Expected return on assets |              |                    | (1,059 | )            |                  |   | (1,052       | ) |  |              | (2,087 | ) |  |   | (2,104 | )
|Amortization of:          |              |                    |        |              |                  |   |              |   |  |              |        |   |  |   |        |  
|Loss                      |              |                    | 24     |              |                  |   |             |   |  |              | 64     |   |  |   |       |  
|                          |              |                    |        |              |                  |   |              |   |  |              |        |   |  |   |        |  
|Net periodic benefit cost |              | $                  | 419    |              |                  | $ | 149          |   |  | $            | 784    |   |  | $ | 298    |  
|                          |              |                    |        |              |                  |   |              |   |  |              |        |   |  |   |        |  



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



|                                         |              |                    |     |              |                  |   |              |   |  |              |      |   |  |   |      |  
|---------------------------------------- | ------------ | ------------------ | --- | ------------ | ---------------- | - | ------------ | - |  | ------------ | ---- | - |  | - | ---- | -
|Other Postretirement Benefits            |              | Three months ended |     |              | Six months ended |  
|                                         | June 25,2006 |                    |     | June 26,2005 |                  |   | June 25,2006 |   |  | June 26,2005 |     
|Service cost                             |              | $                  | 253 |              |                  | $ | 3            |   |  | $            | 297  |   |  | $ | 6    |  
|Interest cost                            |              |                    | 158 |              |                  |   | 17           |   |  |              | 198  |   |  |   | 34   |  
|Amortization of:                         |              |                    |     |              |                  |   |              |   |  |              |      |   |  |   |      |  
|Loss                                     |              |                    | 2   |              |                  |   | 2            |   |  |              | 4    |   |  |   | 4    |  
|Unrecognized prior service cost (credit) |              |                    | (85 | )            |                  |   | (84          | ) |  |              | (169 | ) |  |   | (168 | )
|                                         |              |                    |     |              |                  |   |              |   |  |              |      |   |  |   |      |  
|Net periodic benefit cost (benefit)      |              | $                  | 328 |              |                  | $ | (62          | ) |  | $            | 330  |   |  | $ | (124 | )
|                                         |              |                    |     |              |                  |   |              |   |  |              |      |   |  |   |      |  

On December 8, 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the
Act) was signed into law. The Act expanded Medicare to include, for the first time, coverage for prescription drugs and a federal subsidy to sponsors of certain retiree medical plans. The Company sponsors medical programs for certain of
its U.S. retirees and expects that this legislation may eventually reduce the costs for some of these programs. However, due to the relatively small number of participants, this legislation has not had a material impact on the Companys
consolidated financial statements.

11. Financial Instruments

The Company utilizes derivative financial instruments to enhance its ability to manage risks,
including interest rate, commodities and foreign currency, which exist as part of ongoing business operations. The Company does not enter into contracts for speculative purposes, nor is the Company a party to any leveraged derivative instrument. The
Company monitors the use of derivative financial instruments through regular communication with senior management and the utilization of written guidelines.

The Company relies primarily on bank borrowings to meet its funding requirements. The Company utilizes interest rate swap agreements or other derivative instruments to reduce the potential exposure to interest rate movements and to achieve
a desired proportion of variable versus fixed rate debt. The Company will recognize the amounts that it pays or receives on hedges related to debt as an adjustment to interest expense.

The Company has entered into interest rate swap agreements with counterparties, including JP Morgan Chase Bank (a related party), to effectively change a portion of the floating rate payments on its senior secured
credit facilities into fixed rate payments. As of June 25, 2006, two swap agreements remain outstanding. The two swap agreements terminate on January 2, 2007 and November 25, 2009 and have notional amounts of $250.0 million and $450.0
million, respectively. Interest payments determined under the swap agreement are based on the notional amounts. Floating interest rate payments to be received under each swap are based on U.S. Dollar LIBOR, which is the same basis for
determining the floating rate payments on the senior secured credit facilities.

The swap was not designated as a hedge pursuant to SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities. As of December 25, 2005 and June 25, 2006, the fair value of the interest rate swap contract was a gain of $2,422 and $3,266, respectively. The interest rate swap
contracts were recorded in Other assets in the Consolidated Balance Sheet as of December 25, 2005. As of June 25, 2006, the interest rate swap contracts were recorded in Other current assets ($3,064) and Other assets ($202) in the
Consolidated Balance Sheet. Gains and losses on the interest rate swaps, which were recorded as an adjustment to interest expense in the Consolidated Statement of Operations, for the three and six months ended June 25, 2006 and June 26,
2005 are detailed below.



|                                       |              |                    |              |  |                  |              |   |              |   |       |  |   |      
|-------------------------------------- | ------------ | ------------------ | ------------ |  | ---------------- | ------------ | - | ------------ | - | ----- |  | - | -----
|Interest rate swaps                    |              | Three months ended |              |  | Six months ended
|                                       | June 25,2006 |                    | June 26,2005 |  |                  | June 25,2006 |   | June 26,2005
|Non-cash gain (loss)                   |              | $                  | 355          |  | $                | (2,882       | ) |              | $ | 844   |  | $ | 879  
|Gain (loss) realized in cash           |              |                    | 488          |  |                  | 337          |   |              |   | 488   |  |   | 561  
|                                       |              |                    |              |  |                  |              |   |              |   |       |  |   |      
|Net gain (loss) on interest rate swaps |              | $                  | 843          |  | $                | (2,545       | ) |              | $ | 1,332 |  | $ | 1,440
|                                       |              |                    |              |  |                  |              |   |              |   |       |  |   |      



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



The Company has entered into various natural gas swap transactions with JP Morgan Chase Bank (a related party) to
lower the Companys exposure to the price of natural gas. As of June 25, 2006, the trades in effect mature from July through December 2006 and have various notional quantities of MMBTUs per month. The Company will pay a
fixed price ranging from $6.56 to $10.95 per MMBTU, with settlements monthly. These swaps were not designed as a hedge pursuant to SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities.

As of December 25, 2005 and June 25, 2006, the fair value of the natural gas swap contracts was a gain of $8 and a loss of $381, respectively, which is
recorded in Other current assets (as of December 25, 2005) and Accrued liabilities (as of June 26, 2006) in the Consolidated Balance Sheet. Gains and losses on the natural gas swaps, which were recorded as a component of cost of products
sold in the Consolidated Statement of Operations, for the three and six months ended June 25, 2006 and June 26, 2005 are detailed below.



|                                     |              |                    |      |              |                  |   |              |   |  |              |        |   |  |   |     |  
|------------------------------------ | ------------ | ------------------ | ---- | ------------ | ---------------- | - | ------------ | - |  | ------------ | ------ | - |  | - | --- | -
|Natural gas swaps                    |              | Three months ended |      |              | Six months ended |  
|                                     | June 25,2006 |                    |      | June 26,2005 |                  |   | June 25,2006 |   |  | June 26,2005 |       
|Non-cash gain (loss)                 |              | $                  | 30   |              |                  | $ | (114         | ) |  | $            | (389   | ) |  | $ | 175 |  
|Gain (loss) realized in cash         |              |                    | (300 | )            |                  |   | 67           |   |  |              | (670   | ) |  |   | (12 | )
|                                     |              |                    |      |              |                  |   |              |   |  |              |        |   |  |   |     |  
|Net gain (loss) on natural gas swaps |              | $                  | (270 | )            |                  | $ | (47          | ) |  | $            | (1,059 | ) |  | $ | 163 |  
|                                     |              |                    |      |              |                  |   |              |   |  |              |        |   |  |   |     |  

The Company has entered into various foreign currency exchange transactions with JP Morgan Chase Bank (a related
party) to lower the Companys exposure to the exchange rate between the U.S. and Canadian dollar. Each agreement is based upon a notional amount in Canadian dollars, which is expected to approximate a portion of the amount of our Canadian
subsidiarys U.S. dollar denominated purchases for the month. The trades outstanding as of June 25, 2006 run through December 2006. The Company will pay a fixed exchange rate of 1.1673 Canadian dollars per U.S. dollar, with settlements
monthly. This swap was not designed as a hedge pursuant to SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities.

As
of December 25, 2005 and June 25, 2006, the fair value of the foreign currency exchange contracts was a loss of $280 and $554, respectively, which is recorded in Accrued liabilities in the Consolidated Balance Sheet. Gains and losses on
the foreign currency exchange contracts, which were recorded as a component of cost of products sold in the Consolidated Statement of Operations, for the three and six months ended June 25, 2006 and June 26, 2005 are detailed below.



|                                                       |              |                    |      |                  |  |              |     |  |              |      |   |  |   |    
|------------------------------------------------------ | ------------ | ------------------ | ---- | ---------------- |  | ------------ | --- |  | ------------ | ---- | - |  | - | ---
|Foreign currency exhange contracts                     |              | Three months ended |      | Six months ended
|                                                       | June 25,2006 |                    |      | June 26,2005     |  | June 25,2006 |     |  | June 26,2005
|Non-cash gain (loss)                                   |              | $                  | (372 | )                |  | $            | 113 |  | $            | (273 | ) |  | $ | 208
|Gain (loss) realized in cash                           |              |                    | (225 | )                |  |              | 161 |  |              | (225 | ) |  |   | 169
|                                                       |              |                    |      |                  |  |              |     |  |              |      |   |  |   |    
|Net gain (loss) on foreign currency exchange contracts |              | $                  | (597 | )                |  | $            | 274 |  | $            | (498 | ) |  | $ | 377
|                                                       |              |                    |      |                  |  |              |     |  |              |      |   |  |   |    

The Company utilizes irrevocable standby letters of credit with one-year renewable terms to satisfy workers
compensation self-insurance security deposit requirements. The contract value of the outstanding standby letter of credit as of December 25, 2005 and June 25, 2006 was $7,200 and $7,921, respectively, which approximates fair value. As of
December 25, 2005 and June 25, 2006, we also utilized letters of credit in connection with the purchase of raw materials in the amount of $4,314 and $4,798, respectively,, which approximates fair value.

The Company is exposed to credit loss in the event of non-performance by the other parties to derivative financial instruments. All counterparties are at least
A rated by Moodys and Standard & Poors. Accordingly, the Company does not anticipate non-performance by the counterparties.

The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximate fair value. The estimated fair value of the senior secured credit facilities bank debt and the 8 1/4% senior subordinated notes that are classified as long term debt on the Consolidated Balance Sheet at
June 25, 2006, was approximately its carrying value.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



12. Commitments and Contingencies

General

From time to time, the Company and its operations are parties to, or targets of, lawsuits, claims, investigations, and proceedings, which are being handled and defended
in the ordinary course of business. Although the outcome of such items cannot be determined with certainty, the Companys general counsel and management are of the opinion that the final outcome of these matters should not have a material
effect on the Companys financial condition, results of operations or cash flows.

Litigation

Employee Litigation - Indemnification of US Cold Storage

On
March 21, 2002, an employee at the Omaha, NE facility, died as the result of an accident while operating a forklift at a Company-leased warehouse facility. OSHA conducted a full investigation and determined that the death was the result of an
accident and found no violations by the Company. On March 18, 2004, the Estate of the deceased filed suit in District Court of Sarpy County, Nebraska, Case No: CI 04-391, against the Company, the owner of the forklift and the leased warehouse,
the manufacturer of the forklift and the distributor of the forklift. The Company, having been the deceaseds employer, was named as a defendant for workers compensation subrogation purposes only.

On May 18, 2004, the Company received notice from defendant, US Cold Storage, the owner of the leased warehouse, requesting the Company to accept the tender of
defense for US Cold Storage in this case in accordance with the indemnification provision of the warehouse lease. The request has been submitted to the Companys insurance carrier for evaluation and the Company has been advised that the
indemnification provision is not applicable in this matter and that Company should have no liability under that provision. Therefore, the Company believes that resolution of such matters will not result in a material impact on the Companys
financial condition, results of operations or cash flows.

R2 Appeal in Aurora Bankruptcy

Prior to its bankruptcy filing, Aurora entered into an agreement with its prepetition lending group compromising the amount of certain fees due under its senior bank
facilities (the October Amendment). One of the members of the bank group (R2 Top Hat, Ltd.) challenged the enforceability of the October Amendment during Auroras bankruptcy by filing an adversary proceeding in U.S. Bankruptcy
Court, District of Delaware, and by objecting to confirmation. The Bankruptcy Court rejected the lenders argument and confirmed Auroras plan of reorganization. The lender then appealed from those orders of the Bankruptcy Court. The
appeals are pending. It is too early to predict the outcome of the appeals. Included in the Companys accrued liabilities is $20.1 million for this claim, which was assumed by us in the Aurora Merger.

State of Illinois v. City of St. Elmo and Aurora Foods Inc.

The Company is a defendant in an action filed by the State of Illinois regarding the Companys St. Elmo facility. Prior to the Aurora Merger, the Illinois Attorney General filed a complaint in County Court,
Fayette County, Illinois seeking a restraining order prohibiting further discharges by the City of St. Elmo from its publicly owned wastewater treatment facility in violation of Illinois law and enjoining the Company from discharging its industrial
waste into the Citys treatment facility. The complaint also asked for fines and penalties associated with the Citys discharge from its treatment facility and the Companys alleged operation of its production facility without
obtaining a state environmental operating permit. Management believes the remedial actions it has taken to date and is continuing to implement will minimize any fines and penalties associated with this matter.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



On August 30, 2004, an Interim Consent Order signed by all parties was signed and entered by the judge in the
case whereby, in addition to a number of actions required of the City, the Company agreed to provide monthly discharge monitoring reports to the Illinois Environmental Protection Agency for six months and was allowed to continue discharging effluent
to the City of St. Elmo. In September 2004, the Company met with representatives from the State of Illinois Environmental Protection Agency and the State Attorney Generals Office and separately with the City of St. Elmo to inform them that the
Company intended to install a pre-treatment system at our St. Elmo facility during the fourth quarter of 2004 and first quarter of 2005. The State issued the construction and operating permits to the Company and construction of the pre-treatment
system has been completed. Testing has been completed and the system is fully operational.

The State Attorney General had originally proposed a penalty of
$168 together with a consent decree. The Company responded listing the actions it had taken and related costs since merging with Aurora. The Company contends that there should not be any fine or penalty. On February 24, 2006, the State Attorney
General advised the Company that its office would be willing to accept $110 as penalty, together with a consent decree. A status conference with the partys attorneys and the Judge was held on May 2, 2006. The Joint Discovery Schedule
required by the Judge has been prepared by the parties and filed with the court and is awaiting the Judges signature. As the Company believes no penalty will ultimately be due, a liability has not been accrued at June 25, 2006.

The Company continues to discharge its effluent to the City. The Company will vigorously defend any future effort to prevent it from discharging its
industrial wastewater to the City. Although the Company believes it will be able to resolve this matter favorably, an adverse resolution may have a material impact on the Companys financial position, results of operation, or cash flows.

American Cold Storage  North America, L/P. v. P.F. Distribution, LLC and Pinnacle Foods Group Inc.

On June 26, 2005 the Company was served with a Summons and Complaint in the above matter, which was filed in the Circuit Court of Madison County, Tennessee. American
Cold Storage (ACS) operates a frozen storage warehouse and distribution facility (the Facility) located in Madison County, Tennessee, near the Companys Jackson, Tennessee plant. In approximately April 2004, the Company
entered into discussions with ACS to utilize the Facility. Terms were discussed, but no contract was ever signed. Shortly after shipping product to the Facility, the Company discovered that the Facility was incapable of properly handling the
discussed volume of product and began reducing its shipments to the Facility. The original complaint seeks damages not to exceed $1.5 million, together with associated costs. On May 3, 2006 our attorney received notice from counsel for ACS that
it was increasing its damage claim in the suit from $1.5 million to $5.5 million. ACS will be required to provide specifics justifying the increase through ongoing discovery and the deposition of the President of ACS which was previously scheduled.
It is too early to determine the likely outcome of this litigation. The discovery phase of the case has begun and the Company intends to vigorously defend against this claim. The Company believes that resolution of such matters will not have a
material impact on its financial condition, results of operations or cash flows.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



13. Related Party Transactions

Management fees

On November 25, 2003, the Company entered into a Management Agreement with JPMorgan Partners, LLC (JPMP) and J.W. Childs Associates, L.P. (JWC) whereby JPMP and JWC provide management,
advisory and other services. The agreement calls for quarterly payments of $125 to each of JPMP and JWC for management fees. In connection with the September 2004 default on our senior credit agreement and the resulting amendment (see Note 9), the
payment of the management fees was suspended during the amendment period, which ended on the second business day following the date on which the Company delivers to the Administrative Agent financial statements for the fiscal quarter ending March
2006. Therefore, for the three and six months ended June 25, 2006, management fees expensed and paid to JPMP and JWC were $250. There were no management fees expensed or paid during the three and six months ended June 26, 2005. The Company
reimbursed JPMP and JWC $10 and $27 for out-of-pocket expenses during the three and six months ended June 25, 2006, respectively. The Company reimbursed JPMP and JWC for out-of-pocket expenses totaling $6 and $11 during the three and six months
ended June 26, 2005, respectively. The Management Agreement also stipulates that in connection with any acquisition transaction subsequent to the Pinnacle Transaction and Aurora Merger, there will be a transaction fee of 1/2% of the aggregate purchase price payable to each of JPMP and JWC, plus fees and expenses. In connection with the
acquisition of the Armour Business, each of JPMP and JWC were paid a transaction fee of $915. JPMP was also reimbursed for out of pocket expenses totaling $4. These transaction fees are included in Acquisition costs in Note 3.

Also on November 25, 2003, the Company entered into an agreement with CDM Capital LLC, an affiliate of CDM Investor Group LLC, whereby CDM Capital LLC will receive
a transaction fee of 1/2% of the aggregate purchase price of future acquisitions (other than the Pinnacle
Transaction or the Aurora Merger), plus fees and expenses. In connection with the acquisition of the Armour Business, CDM Capital LLC was paid a transaction fee of $915. This transaction fee is included in Acquisition costs in Note 3.

As discussed in Note 5, certain ownership units of LLC were issued to CDM in connection with the acquisition of the Armour Business. The estimated
fair value of the interests was $1,415 and was included in administrative expenses for the six months ended June 25, 2006.

Leases and Aircraft

The Company leases office space owned by a party related to C. Dean Metropoulos, the Companys Chairman. The base rent for the office is $87
annually. Rent expense was $26 and $51 during the three and six months ended June 25, 2006, respectively. Rent expense was $25 and $50 during the three and six months ended June 26, 2005, respectively.

Beginning November 25, 2003, the Company began using an aircraft owned by a company indirectly owned by the Chairman. In connection with the usage of the aircraft,
the Company incurred net operating expenses of $687 and $1,375 during the three and six months ended June 25, 2006, respectively. The Company incurred net operating expenses for the usage of aircraft of $687 and $1,375 during the three and six
months ended June 26, 2005, respectively. The Company also incurred direct costs totaling $59 during the six months ended June 25, 2006 that is to be reimbursed by the company that owns the aircraft. No such costs were incurred during
2005.

Debt and Interest Expense

For the three and six
months ended June 25, 2006, fees and interest expense recognized in the Consolidated Statement of Operations for the debt to the related party, JPMorgan Chase Bank, amounted to $47 and $90, respectively. For the three and six months ended
June 26, 2005, fees and interest expense recognized in the Consolidated Statement of Operations for the debt to the related party, JPMorgan Chase Bank, amounted to $65 and $153, respectively. See Note 9.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



Financial Instruments

The Company has entered into transactions for derivative financial instruments with JPMorgan Chase Bank to lower its exposure to interest rates, foreign currency, and natural gas prices. During the three and six months ended June 25,
2006 the net cash paid by the Company for the settlement of financial instruments totaling $37 and $407, respectively. During the three and six months ended June 26, 2005 net cash received by the Company for the settlement of financial
instruments totaling $565 and $718, respectively. See Note 11.

Expenses of Major Shareholder

As part of the Aurora Merger, the Company agreed to pay certain fees of the Bondholders Trust (as defined below), which owns approximately 43% of LLC. The Bondholders
Trust primarily consists of holders of Auroras senior subordinated notes, which elected to receive equity interests in LLC as consideration in the Aurora Merger. The Company recognized in the Consolidated Statement of Operations for the three
and six months ended June 25, 2006 $0 and $100, respectively, in fees on behalf of the Bondholder Trust.

Consulting Agreement

During the first quarter of 2006, the Company entered into a consulting agreement with Mr. Evan Metropoulos, a former executive of PFGI and the brother of the
Companys Chairman, C. Dean Metropoulos. Mr. E. Metropoulos will provide to the Company consulting services related to the integration of the Armour Business, which was acquired on March 1, 2006. As of the end of the second quarter of
2006, the work under the contract is substantially completed. For the three and six months ended June 25, 2006, payments made to Mr. E Metropoulos under this agreement totaled $12. In addition, Mr. E. Metropoulos has the opportunity to
earn an additional $50 based upon performance.

Broker Commissions

One of our significant shareholders, J.W. Childs Associates, L.P., is also a significant shareholder of Advantage Sales & Marketing (ASM), which is sales and marketing agency serving the consumer packaged
goods industry. Upon the acquisition of the Armour business, PFGI assumed the contract to use ASM to distribute the Armour products. For the three and six months ended June 25, 2006, PFGI paid ASM $403 and $511, respectively.

14. Segments

The Companys products and operations are managed and reported in two operating segments. The frozen foods
segment consists of the following reporting units: dinners and entrees (Swanson, Hungry Man), seafood (Van de Kamps, Mrs. Pauls), breakfast (Aunt Jemima), bagels (Lenders), pizza (Celeste) and Chefs Choice. The dry foods
segment consists of the following reporting units: condiments (Vlasic, Open Pit), baking (Duncan Hines), syrups (Mrs. Butterworths and Log Cabin) and canned meat (Armour). Segment performance is evaluated by the Companys Chief Operating
Decision Maker and is based on earnings before interest and taxes. Transfers between segments and geographic areas are recorded at cost plus markup or at market. Identifiable assets are those assets, including goodwill, which are identified with the
operations in each segment or geographic region. Cost of products sold in the dry foods segment for the three and six months ended June 25, 2006 includes $2,542 and $4,570, representing the write-up of inventories to fair value (also referred
to as net realizable value, which is defined as estimated selling prices less the sum of (a) costs of disposal and (b) a reasonable profit allowance for the selling effort of the acquiring entity) at the date of the acquisition of the
Armour Business, which were sold subsequent to the acquisition date. Corporate assets consist of deferred tax assets. Unallocated corporate expenses consist of corporate overhead such as executive management, finance and legal functions, and
stock-based compensation expense related to the ownership units of LLC issued to CDM.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



|                                          |  |                    |         |   |                  |   |         |              |  |   |              |   |  |   |         |  
|----------------------------------------- |  | ------------------ | ------- | - | ---------------- | - | ------- | ------------ |  | - | ------------ | - |  | - | ------- | -
|                                          |  | Three months ended |         |   | Six months ended |  
|                                          |  | June 25,2006       |         |   | June 26,2005     |   |         | June 25,2006 |  |   | June 26,2005 |  
|SEGMENT INFORMATION                       |  |                    |         |   |                  |   |         |              |  |   |              |   |  |   |         |  
|Net sales                                 |  |                    |         |   |                  |   |         |              |  |   |              |   |  |   |         |  
|Frozen foods                              |  | $                  | 147,491 |   |                  | $ | 155,109 |              |  | $ | 324,842      |   |  | $ | 336,448 |  
|Dry foods                                 |  |                    | 218,223 |   |                  |   | 151,505 |              |  |   | 354,757      |   |  |   | 278,003 |  
|                                          |  |                    |         |   |                  |   |         |              |  |   |              |   |  |   |         |  
|Total                                     |  | $                  | 365,714 |   |                  | $ | 306,614 |              |  | $ | 679,599      |   |  | $ | 614,451 |  
|                                          |  |                    |         |   |                  |   |         |              |  |   |              |   |  |   |         |  
|Earnings (loss) before interest and taxes |  |                    |         |   |                  |   |         |              |  |   |              |   |  |   |         |  
|Frozen foods                              |  | $                  | 9,188   |   |                  | $ | 5,229   |              |  | $ | 15,774       |   |  | $ | 645     |  
|Dry foods                                 |  |                    | 25,032  |   |                  |   | 24,412  |              |  |   | 43,319       |   |  |   | 32,197  |  
|Unallocated corporate expenses            |  |                    | (4,371  | ) |                  |   | (3,779  | )            |  |   | (9,583       | ) |  |   | (8,696  | )
|                                          |  |                    |         |   |                  |   |         |              |  |   |              |   |  |   |         |  
|Total                                     |  | $                  | 29,849  |   |                  | $ | 25,862  |              |  | $ | 49,510       |   |  | $ | 24,146  |  
|                                          |  |                    |         |   |                  |   |         |              |  |   |              |   |  |   |         |  
|Depreciation and amortization             |  |                    |         |   |                  |   |         |              |  |   |              |   |  |   |         |  
|Frozen foods                              |  | $                  | 5,037   |   |                  | $ | 9,381   |              |  | $ | 10,630       |   |  | $ | 14,521  |  
|Dry foods                                 |  |                    | 6,524   |   |                  |   | 3,317   |              |  |   | 10,217       |   |  |   | 6,808   |  
|                                          |  |                    |         |   |                  |   |         |              |  |   |              |   |  |   |         |  
|Total                                     |  | $                  | 11,561  |   |                  | $ | 12,698  |              |  | $ | 20,847       |   |  | $ | 21,329  |  
|                                          |  |                    |         |   |                  |   |         |              |  |   |              |   |  |   |         |  
|Capital expenditures                      |  |                    |         |   |                  |   |         |              |  |   |              |   |  |   |         |  
|Frozen foods                              |  | $                  | 4,112   |   |                  | $ | 7,684   |              |  | $ | 5,716        |   |  | $ | 10,161  |  
|Dry foods                                 |  |                    | 1,982   |   |                  |   | 1,358   |              |  |   | 3,229        |   |  |   | 2,108   |  
|                                          |  |                    |         |   |                  |   |         |              |  |   |              |   |  |   |         |  
|Total                                     |  | $                  | 6,094   |   |                  | $ | 9,042   |              |  | $ | 8,945        |   |  | $ | 12,269  |  
|                                          |  |                    |         |   |                  |   |         |              |  |   |              |   |  |   |         |  
|GEOGRAPHIC INFORMATION                    |  |                    |         |   |                  |   |         |              |  |   |              |   |  |   |         |  
|Net sales                                 |  |                    |         |   |                  |   |         |              |  |   |              |   |  |   |         |  
|United States                             |  | $                  | 351,311 |   |                  | $ | 293,090 |              |  | $ | 651,836      |   |  | $ | 589,799 |  
|Canada                                    |  |                    | 14,403  |   |                  |   | 13,524  |              |  |   | 27,763       |   |  |   | 24,652  |  
|                                          |  |                    |         |   |                  |   |         |              |  |   |              |   |  |   |         |  
|Total                                     |  | $                  | 365,714 |   |                  | $ | 306,614 |              |  | $ | 679,599      |   |  | $ | 614,451 |  
|                                          |  |                    |         |   |                  |   |         |              |  |   |              |   |  |   |         |  



|                       |  |              |           |                  |   |          
|---------------------- |  | ------------ | --------- | ---------------- | - | ---------
|                       |  | June 25,2006 |           | December 25,2005
|SEGMENT INFORMATION:   |  |              |           |                  |   |          
|Total Assets           |  |              |           |                  |   |          
|Frozen foods           |  | $            | 600,509   |                  | $ | 565,266  
|Dry foods              |  |              | 1,210,694 |                  |   | 1,069,811
|Corporate              |  |              | 1,275     |                  |   | 1,417    
|                       |  |              |           |                  |   |          
|Total                  |  | $            | 1,812,478 |                  | $ | 1,636,494
|                       |  |              |           |                  |   |          
|GEOGRAPHIC INFORMATION |  |              |           |                  |   |          
|Long-lived assets      |  |              |           |                  |   |          
|United States          |  | $            | 258,151   |                  | $ | 219,070  
|Canada                 |  |              | 32        |                  |   | 31       
|                       |  |              |           |                  |   |          
|Total                  |  | $            | 258,183   |                  | $ | 219,101  
|                       |  |              |           |                  |   |          

15. Recently Issued Accounting Pronouncements

In July 2006, the FASB issued FASB Interpretation No. 48, Accounting
for Uncertainty in Income Taxes: An Interpretation of FASB Statement No. 109. This interpretation clarifies FASB Statement 109, Accounting for Income Taxes, to indicate a criterion that an individual tax position would have to meet for
some or all of the benefit of that position to be recognized in an entitys financial statements. The provisions of this interpretation are effective for fiscal years beginning after December 15, 2006. The Company is assessing what impact,
if any, adoption of this statement would have on its financial statements.



27



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##### Table of Contents

PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



16. Guarantor and Nonguarantor Statements

In connection with the Pinnacle Transaction and Aurora Merger described in Note 1
and as a part of the related financings, the Company issued $394 million of 81/4% senior subordinated notes
($200 million in November 2003 and $194 million in February 2004, collectively referred to as the Notes) in private placements pursuant to Rule 144A and Regulation S. The Notes are general unsecured obligations of the Company,
subordinated in right of payment to all existing and future senior indebtedness of the Company, and guaranteed on a full, unconditional, joint and several basis by the Companys wholly-owned domestic subsidiaries.

The following consolidating financial information presents:



| | (1) | (a) Consolidating balance sheets as of June 25, 2006 and December 25, 2005 and (b) the related consolidating statements of operations and cash flows for the
Company, all guarantor subsidiaries and the non-guarantor subsidiary for the three and six months ended June 25, 2006 and June 26, 2005.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Elimination entries necessary to consolidate the Company with its guarantor subsidiaries and nonguarantor subsidiary.
| | --- | ---------------------------------------------------------------------------------------------------------------------

Investments in subsidiaries are accounted for by the parent using the equity method of accounting. The guarantor subsidiaries are presented on a combined basis. The
principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions.



28



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



Pinnacle Foods Group Inc.

Consolidating Balance Sheet

June 25, 2006



|                                              |  |                          |           |   |                       |   |         |                        |  |   |              |   |  |                   |          |   |  |   |           |  
|--------------------------------------------- |  | ------------------------ | --------- | - | --------------------- | - | ------- | ---------------------- |  | - | ------------ | - |  | ----------------- | -------- | - |  | - | --------- | -
|                                              |  | PinnacleFoodsGroup, Inc. |           |   | GuarantorSubsidiaries |   |         | NonguarantorSubsidiary |  |   | Eliminations |   |  | ConsolidatedTotal |         
|Current assets:                               |  |                          |           |   |                       |   |         |                        |  |   |              |   |  |                   |          |   |  |   |           |  
|Cash and cash equivalents                     |  | $                        | 2         |   |                       | $ | 8,934   |                        |  | $ | 741          |   |  | $                 |         |   |  | $ | 9,677     |  
|Accounts receivable, net                      |  |                          | 77,391    |   |                       |   | 31,335  |                        |  |   | 3,755        |   |  |                   |         |   |  |   | 112,481   |  
|Intercompany accounts receivable              |  |                          |          |   |                       |   | 59,554  |                        |  |   |             |   |  |                   | (59,554  | ) |  |   |          |  
|Inventories, net                              |  |                          | 91,943    |   |                       |   | 60,830  |                        |  |   | 3,343        |   |  |                   |         |   |  |   | 156,116   |  
|Other current assets                          |  |                          | 3,259     |   |                       |   | 3,410   |                        |  |   | 39           |   |  |                   |         |   |  |   | 6,708     |  
|Deferred tax assets                           |  |                          | 495       |   |                       |   | 717     |                        |  |   | 63           |   |  |                   |         |   |  |   | 1,275     |  
|                                              |  |                          |           |   |                       |   |         |                        |  |   |              |   |  |                   |          |   |  |   |           |  
|Total current assets                          |  |                          | 173,090   |   |                       |   | 164,780 |                        |  |   | 7,941        |   |  |                   | (59,554  | ) |  |   | 286,257   |  
|                                              |  |                          |           |   |                      
|Plant assets, net                             |  |                          | 141,285   |   |                       |   | 116,866 |                        |  |   | 32           |   |  |                   |         |   |  |   | 258,183   |  
|Investment in subsidiaries                    |  |                          | 352,524   |   |                       |   | (2,086  | )                      |  |   |             |   |  |                   | (350,438 | ) |  |   |          |  
|Intercompany note receivable                  |  |                          | 66,755    |   |                       |   |        |                        |  |   |             |   |  |                   | (66,755  | ) |  |   |          |  
|Tradenames                                    |  |                          | 683,826   |   |                       |   | 106,156 |                        |  |   |             |   |  |                   |         |   |  |   | 789,982   |  
|Other assets, net                             |  |                          | 64,865    |   |                       |   | 128     |                        |  |   |             |   |  |                   |         |   |  |   | 64,993    |  
|Goodwill                                      |  |                          | 272,596   |   |                       |   | 140,467 |                        |  |   |             |   |  |                   |         |   |  |   | 413,063   |  
|                                              |  |                          |           |   |                       |   |         |                        |  |   |              |   |  |                   |          |   |  |   |           |  
|Total assets                                  |  | $                        | 1,754,941 |   |                       | $ | 526,311 |                        |  | $ | 7,973        |   |  | $                 | (476,747 | ) |  | $ | 1,812,478 |  
|                                              |  |                          |           |   |                       |   |         |                        |  |   |              |   |  |                   |          |   |  |   |           |  
|Current liabilities:                          |  |                          |           |   |                       |   |         |                        |  |   |              |   |  |                   |          |   |  |   |           |  
|Current portion of long-term obligations      |  | $                        | 10        |   |                       | $ | 152     |                        |  | $ |             |   |  | $                 |         |   |  | $ | 162       |  
|Notes payable                                 |  |                          |          |   |                       |   | 1,647   |                        |  |   |             |   |  |                   |         |   |  |   | 1,647     |  
|Accounts payable                              |  |                          | 21,154    |   |                       |   | 33,357  |                        |  |   | 2,873        |   |  |                   |         |   |  |   | 57,384    |  
|Intercompany accounts payable                 |  |                          | 54,881    |   |                       |   |        |                        |  |   | 4,673        |   |  |                   | (59,554  | ) |  |   |          |  
|Accrued trade marketing expense               |  |                          | 23,020    |   |                       |   | 12,814  |                        |  |   | 2,116        |   |  |                   |         |   |  |   | 37,950    |  
|Accrued liabilities                           |  |                          | 51,797    |   |                       |   | 22,017  |                        |  |   | 256          |   |  |                   |         |   |  |   | 74,070    |  
|Accrued income taxes                          |  |                          | 85        |   |                       |   | 983     |                        |  |   | 139          |   |  |                   |         |   |  |   | 1,207     |  
|                                              |  |                          |           |   |                       |   |         |                        |  |   |              |   |  |                   |          |   |  |   |           |  
|Total current liabilities                     |  |                          | 150,947   |   |                       |   | 70,970  |                        |  |   | 10,057       |   |  |                   | (59,554  | ) |  |   | 172,420   |  
|Long-term debt                                |  |                          | 1,000,843 |   |                       |   | 116     |                        |  |   |             |   |  |                   |         |   |  |   | 1,000,959 |  
|Intercompany note payable                     |  |                          |          |   |                       |   | 66,755  |                        |  |   |             |   |  |                   | (66,755  | ) |  |   |          |  
|Pension and other postretirement benefits     |  |                          | 8,743     |   |                       |   | 10,476  |                        |  |   |             |   |  |                   |         |   |  |   | 19,219    |  
|Other long-term liabilities                   |  |                          | 560       |   |                       |   |        |                        |  |   |             |   |  |                   |         |   |  |   | 560       |  
|Deferred tax liabilities                      |  |                          | 200,560   |   |                       |   | 25,470  |                        |  |   | 2            |   |  |                   |         |   |  |   | 226,032   |  
|                                              |  |                          |           |   |                       |   |         |                        |  |   |              |   |  |                   |          |   |  |   |           |  
|Total liabilities                             |  |                          | 1,361,653 |   |                       |   | 173,787 |                        |  |   | 10,059       |   |  |                   | (126,309 | ) |  |   | 1,419,190 |  
|                                              |  |                          |           |   |                      
|Commitments and contingencies                 |  |                          |          |   |                       |   |        |                        |  |   |             |   |  |                   |         |   |  |   |          |  
|                                              |  |                          |           |   |                      
|Shareholders equity:                         |  |                          |           |   |                       |   |         |                        |  |   |              |   |  |                   |          |   |  |   |           |  
|Pinnacle Common Stock, $.01 par value         |  |                          |          |   |                       |   |        |                        |  |   |             |   |  |                   |         |   |  |   |          |  
|Additional paid-in-capital                    |  |                          | 571,440   |   |                       |   | 347,448 |                        |  |   | 935          |   |  |                   | (348,383 | ) |  |   | 571,440   |  
|Accumulated other comprehensive (loss) income |  |                          | (3,704    | ) |                       |   | (3,704  | )                      |  |   | (3,704       | ) |  |                   | 7,408    |   |  |   | (3,704    | )
|Carryover of Predecessor basis of net assets  |  |                          | (17,338   | ) |                       |   |        |                        |  |   |             |   |  |                   |         |   |  |   | (17,338   | )
|(Accumulated deficit) retained earnings       |  |                          | (157,110  | ) |                       |   | 8,780   |                        |  |   | 683          |   |  |                   | (9,463   | ) |  |   | (157,110  | )
|                                              |  |                          |           |   |                       |   |         |                        |  |   |              |   |  |                   |          |   |  |   |           |  
|Total shareholders equity                    |  |                          | 393,288   |   |                       |   | 352,524 |                        |  |   | (2,086       | ) |  |                   | (350,438 | ) |  |   | 393,288   |  
|                                              |  |                          |           |   |                       |   |         |                        |  |   |              |   |  |                   |          |   |  |   |           |  
|Total liabilities and shareholders equity    |  | $                        | 1,754,941 |   |                       | $ | 526,311 |                        |  | $ | 7,973        |   |  | $                 | (476,747 | ) |  | $ | 1,812,478 |  
|                                              |  |                          |           |   |                       |   |         |                        |  |   |              |   |  |                   |          |   |  |   |           |  



29



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##### Table of Contents

PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



Pinnacle Foods Group Inc.

Consolidating Balance Sheet

December 25, 2005



|                                             |  |                         |           |   |                       |   |         |                        |  |   |              |   |  |                   |          |   |  |   |           |  
|-------------------------------------------- |  | ----------------------- | --------- | - | --------------------- | - | ------- | ---------------------- |  | - | ------------ | - |  | ----------------- | -------- | - |  | - | --------- | -
|                                             |  | PinnacleFoodsGroup Inc. |           |   | GuarantorSubsidiaries |   |         | NonguarantorSubsidiary |  |   | Eliminations |   |  | ConsolidatedTotal |         
|Current assets:                              |  |                         |           |   |                       |   |         |                        |  |   |              |   |  |                   |          |   |  |   |           |  
|Cash and cash equivalents                    |  | $                       | 69        |   |                       | $ | 450     |                        |  | $ |             |   |  | $                 |         |   |  | $ | 519       |  
|Accounts receivable, net                     |  |                         | 43,618    |   |                       |   | 28,206  |                        |  |   | 4,431        |   |  |                   |         |   |  |   | 76,255    |  
|Intercompany accounts receivable             |  |                         |          |   |                       |   | 53,879  |                        |  |   |             |   |  |                   | (53,879  | ) |  |   |          |  
|Inventories, net                             |  |                         | 63,373    |   |                       |   | 103,492 |                        |  |   | 3,756        |   |  |                   |         |   |  |   | 170,621   |  
|Other current assets                         |  |                         | 715       |   |                       |   | 2,164   |                        |  |   | 65           |   |  |                   |         |   |  |   | 2,944     |  
|Deferred tax assets                          |  |                         | 598       |   |                       |   | 758     |                        |  |   | 61           |   |  |                   |         |   |  |   | 1,417     |  
|                                             |  |                         |           |   |                       |   |         |                        |  |   |              |   |  |                   |          |   |  |   |           |  
|Total current assets                         |  |                         | 108,373   |   |                       |   | 188,949 |                        |  |   | 8,313        |   |  |                   | (53,879  | ) |  |   | 251,756   |  
|                                             |  |                         |           |   |                      
|Plant assets, net                            |  |                         | 99,598    |   |                       |   | 119,472 |                        |  |   | 31           |   |  |                   |         |   |  |   | 219,101   |  
|Investment in subsidiaries                   |  |                         | 344,383   |   |                       |   | (2,366  | )                      |  |   |             |   |  |                   | (342,017 | ) |  |   |          |  
|Intercompany note receivable                 |  |                         | 111,684   |   |                       |   |        |                        |  |   |             |   |  |                   | (111,684 | ) |  |   |          |  
|Tradenames                                   |  |                         | 655,126   |   |                       |   | 106,156 |                        |  |   |             |   |  |                   |         |   |  |   | 761,282   |  
|Other assets, net                            |  |                         | 44,701    |   |                       |   | 141     |                        |  |   |             |   |  |                   |         |   |  |   | 44,842    |  
|Goodwill                                     |  |                         | 218,579   |   |                       |   | 140,934 |                        |  |   |             |   |  |                   |         |   |  |   | 359,513   |  
|                                             |  |                         |           |   |                       |   |         |                        |  |   |              |   |  |                   |          |   |  |   |           |  
|Total assets                                 |  | $                       | 1,582,444 |   |                       | $ | 553,286 |                        |  | $ | 8,344        |   |  | $                 | (507,580 | ) |  | $ | 1,636,494 |  
|                                             |  |                         |           |   |                       |   |         |                        |  |   |              |   |  |                   |          |   |  |   |           |  
|Current liabilities:                         |  |                         |           |   |                       |   |         |                        |  |   |              |   |  |                   |          |   |  |   |           |  
|Current portion of long-term obligations     |  | $                       | 10        |   |                       | $ | 143     |                        |  | $ |             |   |  | $                 |         |   |  | $ | 153       |  
|Notes payable                                |  |                         |          |   |                       |   | 184     |                        |  |   |             |   |  |                   |         |   |  |   | 184       |  
|Accounts payable                             |  |                         | 24,698    |   |                       |   | 32,151  |                        |  |   | 4,916        |   |  |                   |         |   |  |   | 61,765    |  
|Intercompany accounts payable                |  |                         | 51,506    |   |                       |   |        |                        |  |   | 2,373        |   |  |                   | (53,879  | ) |  |   |          |  
|Accrued trade marketing expense              |  |                         | 19,407    |   |                       |   | 10,624  |                        |  |   | 2,949        |   |  |                   |         |   |  |   | 32,980    |  
|Accrued liabilities                          |  |                         | 51,560    |   |                       |   | 19,571  |                        |  |   | 328          |   |  |                   |         |   |  |   | 71,459    |  
|Accrued income taxes                         |  |                         | 103       |   |                       |   | 790     |                        |  |   | 142          |   |  |                   |         |   |  |   | 1,035     |  
|                                             |  |                         |           |   |                       |   |         |                        |  |   |              |   |  |                   |          |   |  |   |           |  
|Total current liabilities                    |  |                         | 147,284   |   |                       |   | 63,463  |                        |  |   | 10,708       |   |  |                   | (53,879  | ) |  |   | 167,576   |  
|                                             |  |                         |           |   |                      
|Long-term debt                               |  |                         | 888,126   |   |                       |   | 185     |                        |  |   |             |   |  |                   |         |   |  |   | 888,311   |  
|Intercompany note payable                    |  |                         |          |   |                       |   | 111,684 |                        |  |   |             |   |  |                   | (111,684 | ) |  |   |          |  
|Pension and other postretirement benefits    |  |                         | 851       |   |                       |   | 10,048  |                        |  |   |             |   |  |                   |         |   |  |   | 10,899    |  
|Deferred tax liabilities                     |  |                         | 189,659   |   |                       |   | 23,523  |                        |  |   | 2            |   |  |                   |         |   |  |   | 213,184   |  
|                                             |  |                         |           |   |                       |   |         |                        |  |   |              |   |  |                   |          |   |  |   |           |  
|Total liabilities                            |  |                         | 1,225,920 |   |                       |   | 208,903 |                        |  |   | 10,710       |   |  |                   | (165,563 | ) |  |   | 1,279,970 |  
|                                             |  |                         |           |   |                      
|Commitments and contingencies                |  |                         |          |   |                       |   |        |                        |  |   |             |   |  |                   |         |   |  |   |          |  
|                                             |  |                         |           |   |                      
|Shareholders equity:                        |  |                         |           |   |                       |   |         |                        |  |   |              |   |  |                   |          |   |  |   |           |  
|Pinnacle Common Stock, $.01 par value        |  |                         |          |   |                       |   |        |                        |  |   |             |   |  |                   |         |   |  |   |          |  
|Additional paid-in-capital                   |  |                         | 529,425   |   |                       |   | 347,448 |                        |  |   | 935          |   |  |                   | (348,383 | ) |  |   | 529,425   |  
|Accumulated other comprehensive loss         |  |                         | (3,768    | ) |                       |   | (3,768  | )                      |  |   | (3,768       | ) |  |                   | 7,536    |   |  |   | (3,768    | )
|Carryover of Predecessor basis of net assets |  |                         | (17,338   | ) |                       |   |        |                        |  |   |             |   |  |                   |         |   |  |   | (17,338   | )
|(Accumulated deficit) retained earnings      |  |                         | (151,795  | ) |                       |   | 703     |                        |  |   | 467          |   |  |                   | (1,170   | ) |  |   | (151,795  | )
|                                             |  |                         |           |   |                       |   |         |                        |  |   |              |   |  |                   |          |   |  |   |           |  
|Total shareholders equity                   |  |                         | 356,524   |   |                       |   | 344,383 |                        |  |   | (2,366       | ) |  |                   | (342,017 | ) |  |   | 356,524   |  
|                                             |  |                         |           |   |                       |   |         |                        |  |   |              |   |  |                   |          |   |  |   |           |  
|Total liabilities and shareholders equity   |  | $                       | 1,582,444 |   |                       | $ | 553,286 |                        |  | $ | 8,344        |   |  | $                 | (507,580 | ) |  | $ | 1,636,494 |  
|                                             |  |                         |           |   |                       |   |         |                        |  |   |              |   |  |                   |          |   |  |   |           |  



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##### Table of Contents

PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



Pinnacle Foods Group Inc.

Consolidating Statement of Operations

For the three months ended
June 25, 2006



|                                          |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |        
|----------------------------------------- |  | ------------------------ | ------- | - | --------------------- | - | ------- | ---------------------- |  | ------------ | ------ |  | ----------------- | ------- | - |  | - | -------
|                                          |  | PinnacleFoodsGroup, Inc. |         |   | GuarantorSubsidiaries |   |         | NonguarantorSubsidiary |  | Eliminations |        |  | ConsolidatedTotal
|Net sales                                 |  | $                        | 211,589 |   |                       | $ | 146,301 |                        |  | $            | 14,403 |  | $                 | (6,579  | ) |  | $ | 365,714
|                                          |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |        
|Costs and expenses                        |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |        
|Cost of products sold                     |  |                          | 169,772 |   |                       |   | 117,982 |                        |  |              | 11,340 |  |                   | (6,371  | ) |  |   | 292,723
|Marketing and selling expenses            |  |                          | 14,215  |   |                       |   | 9,915   |                        |  |              | 2,203  |  |                   |        |   |  |   | 26,333 
|Administrative expenses                   |  |                          | 7,671   |   |                       |   | 4,688   |                        |  |              | 446    |  |                   |        |   |  |   | 12,805 
|Research and development expenses         |  |                          | 617     |   |                       |   | 371     |                        |  |              |       |  |                   |        |   |  |   | 988    
|Intercompany royalties                    |  |                          |        |   |                       |   |        |                        |  |              | 30     |  |                   | (30     | ) |  |   |       
|Intercompany technical service fees       |  |                          |        |   |                       |   |        |                        |  |              | 178    |  |                   | (178    | ) |  |   |       
|Other expense (income), net               |  |                          | 2,959   |   |                       |   | 57      |                        |  |              |       |  |                   |        |   |  |   | 3,016  
|Equity in (earnings) loss of investees    |  |                          | (10,992 | ) |                       |   | (70     | )                      |  |              |       |  |                   | 11,062  |   |  |   |       
|                                          |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |        
|Total costs and expenses                  |  |                          | 184,242 |   |                       |   | 132,943 |                        |  |              | 14,197 |  |                   | 4,483   |   |  |   | 335,865
|                                          |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |        
|Earnings (loss) before interest and taxes |  |                          | 27,347  |   |                       |   | 13,358  |                        |  |              | 206    |  |                   | (11,062 | ) |  |   | 29,849 
|Intercompany interest (income) expense    |  |                          | (2,099  | ) |                       |   | 2,099   |                        |  |              |       |  |                   |        |   |  |   |       
|Interest expense                          |  |                          | 21,844  |   |                       |   | 26      |                        |  |              |       |  |                   |        |   |  |   | 21,870 
|Interest income                           |  |                          |        |   |                       |   | 247     |                        |  |              | 14     |  |                   |        |   |  |   | 261    
|                                          |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |        
|Earnings (loss) before income taxes       |  |                          | 7,602   |   |                       |   | 11,480  |                        |  |              | 220    |  |                   | (11,062 | ) |  |   | 8,240  
|Provision for income taxes                |  |                          | 6,497   |   |                       |   | 488     |                        |  |              | 150    |  |                   |        |   |  |   | 7,135  
|                                          |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |        
|Net earnings (loss)                       |  | $                        | 1,105   |   |                       | $ | 10,992  |                        |  | $            | 70     |  | $                 | (11,062 | ) |  | $ | 1,105  
|                                          |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |        



31



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##### Table of Contents

PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



Pinnacle Foods Group Inc.

Consolidating Statement of Operations

For the three months ended
June 26, 2005



|                                          |  |                         |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |         |  
|----------------------------------------- |  | ----------------------- | ------- | - | --------------------- | - | ------- | ---------------------- |  | ------------ | ------ |  | ----------------- | ------- | - |  | - | ------- | -
|                                          |  | PinnacleFoodsGroup Inc. |         |   | GuarantorSubsidiaries |   |         | NonguarantorSubsidiary |  | Eliminations |        |  | ConsolidatedTotal |        
|Net sales                                 |  | $                       | 147,783 |   |                       | $ | 150,666 |                        |  | $            | 13,524 |  | $                 | (5,359  | ) |  | $ | 306,614 |  
|                                          |  |                         |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |         |  
|Costs and expenses                        |  |                         |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |         |  
|Cost of products sold                     |  |                         | 124,227 |   |                       |   | 117,906 |                        |  |              | 9,254  |  |                   | (5,167  | ) |  |   | 246,220 |  
|Marketing and selling expenses            |  |                         | 11,570  |   |                       |   | 9,245   |                        |  |              | 1,196  |  |                   |        |   |  |   | 22,011  |  
|Administrative expenses                   |  |                         | 5,201   |   |                       |   | 4,629   |                        |  |              | 267    |  |                   |        |   |  |   | 10,097  |  
|Research and development expenses         |  |                         | 483     |   |                       |   | 443     |                        |  |              |       |  |                   |        |   |  |   | 926     |  
|Intercompany royalties                    |  |                         |        |   |                       |   |        |                        |  |              | 71     |  |                   | (71     | ) |  |   |        |  
|Intercompany technical service fees       |  |                         |        |   |                       |   |        |                        |  |              | 121    |  |                   | (121    | ) |  |   |        |  
|Other expense (income), net               |  |                         | 1,239   |   |                       |   | 259     |                        |  |              |       |  |                   |        |   |  |   | 1,498   |  
|Equity in loss (earnings) of investees    |  |                         | (16,048 | ) |                       |   | (1,663  | )                      |  |              |       |  |                   | 17,711  |   |  |   |        |  
|                                          |  |                         |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |         |  
|Total costs and expenses                  |  |                         | 126,672 |   |                       |   | 130,819 |                        |  |              | 10,909 |  |                   | 12,352  |   |  |   | 280,752 |  
|                                          |  |                         |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |         |  
|Earnings (loss) before interest and taxes |  |                         | 21,111  |   |                       |   | 19,847  |                        |  |              | 2,615  |  |                   | (17,711 | ) |  |   | 25,862  |  
|Intercompany interest (income) expense    |  |                         | (3,263  | ) |                       |   | 3,263   |                        |  |              |       |  |                   |        |   |  |   |        |  
|Interest expense                          |  |                         | 20,870  |   |                       |   | 12      |                        |  |              |       |  |                   |        |   |  |   | 20,882  |  
|Interest income                           |  |                         |        |   |                       |   | 162     |                        |  |              | 5      |  |                   |        |   |  |   | 167     |  
|                                          |  |                         |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |         |  
|Earnings (loss) before income taxes       |  |                         | 3,504   |   |                       |   | 16,734  |                        |  |              | 2,620  |  |                   | (17,711 | ) |  |   | 5,147   |  
|Provision for income taxes                |  |                         | 5,678   |   |                       |   | 686     |                        |  |              | 957    |  |                   |        |   |  |   | 7,321   |  
|                                          |  |                         |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |         |  
|Net (loss) earnings                       |  | $                       | (2,174  | ) |                       | $ | 16,048  |                        |  | $            | 1,663  |  | $                 | (17,711 | ) |  | $ | (2,174  | )
|                                          |  |                         |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |         |  



32



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##### Table of Contents

PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



Pinnacle Foods Group Inc.

Consolidating Statement of Operations

For the six months ended June 25,
2006



|                                          |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |         |  
|----------------------------------------- |  | ------------------------ | ------- | - | --------------------- | - | ------- | ---------------------- |  | ------------ | ------ |  | ----------------- | ------- | - |  | - | ------- | -
|                                          |  | PinnacleFoodsGroup, Inc. |         |   | GuarantorSubsidiaries |   |         | NonguarantorSubsidiary |  | Eliminations |        |  | ConsolidatedTotal |        
|Net sales                                 |  | $                        | 395,157 |   |                       | $ | 271,112 |                        |  | $            | 27,763 |  | $                 | (14,433 | ) |  | $ | 679,599 |  
|                                          |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |         |  
|Costs and expenses                        |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |         |  
|Cost of products sold                     |  |                          | 308,185 |   |                       |   | 230,016 |                        |  |              | 22,470 |  |                   | (14,055 | ) |  |   | 546,616 |  
|Marketing and selling expenses            |  |                          | 29,218  |   |                       |   | 17,507  |                        |  |              | 3,700  |  |                   |        |   |  |   | 50,425  |  
|Administrative expenses                   |  |                          | 16,358  |   |                       |   | 9,258   |                        |  |              | 786    |  |                   |        |   |  |   | 26,402  |  
|Research and development expenses         |  |                          | 1,183   |   |                       |   | 737     |                        |  |              |       |  |                   |        |   |  |   | 1,920   |  
|Intercompany royalties                    |  |                          |        |   |                       |   |        |                        |  |              | 60     |  |                   | (60     | ) |  |   |        |  
|Intercompany technical service fees       |  |                          |        |   |                       |   |        |                        |  |              | 318    |  |                   | (318    | ) |  |   |        |  
|Other expense (income), net               |  |                          | 4,632   |   |                       |   | 94      |                        |  |              |       |  |                   |        |   |  |   | 4,726   |  
|Equity in (earnings) loss of investees    |  |                          | (8,077  | ) |                       |   | (216    | )                      |  |              |       |  |                   | 8,293   |   |  |   |        |  
|                                          |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |         |  
|Total costs and expenses                  |  |                          | 351,499 |   |                       |   | 257,396 |                        |  |              | 27,334 |  |                   | (6,140  | ) |  |   | 630,089 |  
|                                          |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |         |  
|Earnings (loss) before interest and taxes |  |                          | 43,658  |   |                       |   | 13,716  |                        |  |              | 429    |  |                   | (8,293  | ) |  |   | 49,510  |  
|Intercompany interest (income) expense    |  |                          | (4,295  | ) |                       |   | 4,295   |                        |  |              |       |  |                   |        |   |  |   |        |  
|Interest expense                          |  |                          | 41,359  |   |                       |   | 33      |                        |  |              |       |  |                   |        |   |  |   | 41,392  |  
|Interest income                           |  |                          |        |   |                       |   | 378     |                        |  |              | 22     |  |                   |        |   |  |   | 400     |  
|                                          |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |         |  
|Earnings (loss) before income taxes       |  |                          | 6,594   |   |                       |   | 9,766   |                        |  |              | 451    |  |                   | (8,293  | ) |  |   | 8,518   |  
|Provision for income taxes                |  |                          | 11,909  |   |                       |   | 1,689   |                        |  |              | 235    |  |                   |        |   |  |   | 13,833  |  
|                                          |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |         |  
|Net (loss) earnings                       |  | $                        | (5,315  | ) |                       | $ | 8,077   |                        |  | $            | 216    |  | $                 | (8,293  | ) |  | $ | (5,315  | )
|                                          |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |         |  



33



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##### Table of Contents

PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



Pinnacle Foods Group Inc.

Consolidating Statement of Operations

For the six months ended June 26,
2005



|                                          |  |                         |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |         |  
|----------------------------------------- |  | ----------------------- | ------- | - | --------------------- | - | ------- | ---------------------- |  | ------------ | ------ |  | ----------------- | ------- | - |  | - | ------- | -
|                                          |  | PinnacleFoodsGroup Inc. |         |   | GuarantorSubsidiaries |   |         | NonguarantorSubsidiary |  | Eliminations |        |  | ConsolidatedTotal |        
|Net sales                                 |  | $                       | 328,054 |   |                       | $ | 273,576 |                        |  | $            | 24,652 |  | $                 | (11,831 | ) |  | $ | 614,451 |  
|                                          |  |                         |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |         |  
|Costs and expenses                        |  |                         |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |         |  
|Cost of products sold                     |  |                         | 267,408 |   |                       |   | 233,244 |                        |  |              | 18,732 |  |                   | (11,397 | ) |  |   | 507,987 |  
|Marketing and selling expenses            |  |                         | 32,594  |   |                       |   | 18,439  |                        |  |              | 1,929  |  |                   |        |   |  |   | 52,962  |  
|Administrative expenses                   |  |                         | 12,458  |   |                       |   | 9,452   |                        |  |              | 556    |  |                   |        |   |  |   | 22,466  |  
|Research and development expenses         |  |                         | 1,110   |   |                       |   | 856     |                        |  |              |       |  |                   |        |   |  |   | 1,966   |  
|Intercompany royalties                    |  |                         |        |   |                       |   |        |                        |  |              | 145    |  |                   | (145    | ) |  |   |        |  
|Intercompany technical service fees       |  |                         |        |   |                       |   |        |                        |  |              | 289    |  |                   | (289    | ) |  |   |        |  
|Other expense (income), net               |  |                         | 3,934   |   |                       |   | 990     |                        |  |              |       |  |                   |         |   |  |   | 4,924   |  
|Equity in (earnings) loss of investees    |  |                         | (5,177  | ) |                       |   | (1,901  | )                      |  |              |       |  |                   | 7,078   |   |  |   |        |  
|                                          |  |                         |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |         |  
|Total costs and expenses                  |  |                         | 312,327 |   |                       |   | 261,080 |                        |  |              | 21,651 |  |                   | (4,753  | ) |  |   | 590,305 |  
|                                          |  |                         |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |         |  
|Earnings (loss) before interest and taxes |  |                         | 15,727  |   |                       |   | 12,496  |                        |  |              | 3,001  |  |                   | (7,078  | ) |  |   | 24,146  |  
|Intercompany interest (income) expense    |  |                         | (6,207  | ) |                       |   | 6,205   |                        |  |              | 2      |  |                   |        |   |  |   |        |  
|Interest expense                          |  |                         | 35,118  |   |                       |   | 17      |                        |  |              |       |  |                   |        |   |  |   | 35,135  |  
|Interest income                           |  |                         |        |   |                       |   | 213     |                        |  |              | 10     |  |                   |        |   |  |   | 223     |  
|                                          |  |                         |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |         |  
|(Loss) earnings before income taxes       |  |                         | (13,184 | ) |                       |   | 6,487   |                        |  |              | 3,009  |  |                   | (7,078  | ) |  |   | (10,766 | )
|Provision for income taxes                |  |                         | 11,418  |   |                       |   | 1,310   |                        |  |              | 1,108  |  |                   |        |   |  |   | 13,836  |  
|                                          |  |                         |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |         |  
|Net (loss) earnings                       |  | $                       | (24,602 | ) |                       | $ | 5,177   |                        |  | $            | 1,901  |  | $                 | (7,078  | ) |  | $ | (24,602 | )
|                                          |  |                         |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |         |  



34



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##### Table of Contents

PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



Pinnacle Foods Group Inc.

Consolidating Statement of Cash Flows

For the six months ended June 25,
2006



|                                                    |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |          |  
|--------------------------------------------------- |  | ------------------------ | -------- | - | --------------------- | - | ------- | ---------------------- |  | - | ------------ | - |  | ----------------- | ------ | - |  | - | -------- | -
|                                                    |  | PinnacleFoodsGroup, Inc. |          |   | GuarantorSubsidiaries |   |         | NonguarantorSubsidiary |  |   | Eliminations |   |  | ConsolidatedTotal |       
|Cash flows from operating activities                |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |          |  
|Net (loss) earnings                                 |  | $                        | (5,315   | ) |                       | $ | 8,077   |                        |  | $ | 216          |   |  | $                 | (8,293 | ) |  | $ | (5,315   | )
|Non-cash charges (credits) to net (loss) earnings   |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |          |  
|Depreciation and amortization                       |  |                          | 13,110   |   |                       |   | 7,733   |                        |  |   | 4            |   |  |                   |       |   |  |   | 20,847   |  
|Restructuring and impairment charge                 |  |                          |         |   |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   |         |  
|Amortization of debt acquisition costs              |  |                          | 3,259    |   |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | 3,259    |  
|Amortization of bond premium                        |  |                          | (278     | ) |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | (278     | )
|Change in value of financial instruments            |  |                          | (182     | ) |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | (182     | )
|Stock-based compensation charge                     |  |                          | 2,015    |   |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | 2,015    |  
|Equity in loss (earnings) of investees              |  |                          | (8,077   | ) |                       |   | (216    | )                      |  |   |             |   |  |                   | 8,293  |   |  |   |         |  
|Postretirement healthcare benefits                  |  |                          | 468      |   |                       |   | (138    | )                      |  |   |             |   |  |                   |       |   |  |   | 330      |  
|Pension expense                                     |  |                          | 218      |   |                       |   | 566     |                        |  |   |             |   |  |                   |       |   |  |   | 784      |  
|Other long-term liabilities                         |  |                          | 80       |   |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | 80       |  
|Deferred income taxes                               |  |                          | 11,004   |   |                       |   | 1,990   |                        |  |   | (2           | ) |  |                   |       |   |  |   | 12,992   |  
|Changes in working capital, net of acquisition      |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |          |  
|Accounts receivable                                 |  |                          | (33,773  | ) |                       |   | (3,129  | )                      |  |   | 831          |   |  |                   |       |   |  |   | (36,071  | )
|Intercompany accounts receivable/payable            |  |                          | 50,724   |   |                       |   | (52,941 | )                      |  |   | 2,217        |   |  |                   |       |   |  |   |         |  
|Inventories                                         |  |                          | 10,671   |   |                       |   | 42,664  |                        |  |   | 544          |   |  |                   |       |   |  |   | 53,879   |  
|Accrued trade marketing expense                     |  |                          | 3,613    |   |                       |   | 2,190   |                        |  |   | (936         | ) |  |                   |       |   |  |   | 4,867    |  
|Accounts payable                                    |  |                          | (3,544   | ) |                       |   | 7,978   |                        |  |   | (2,214       | ) |  |                   |       |   |  |   | 2,220    |  
|Accrued liabilities                                 |  |                          | (1,991   | ) |                       |   | 3,056   |                        |  |   | (91          | ) |  |                   |       |   |  |   | 974      |  
|Other current assets                                |  |                          | (544     | ) |                       |   | 845     |                        |  |   | 340          |   |  |                   |       |   |  |   | 641      |  
|                                                    |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |          |  
|Net cash provided by operating activities           |  |                          | 41,458   |   |                       |   | 18,675  |                        |  |   | 909          |   |  |                   |       |   |  |   | 61,042   |  
|                                                    |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |          |  
|Cash flows from investing activities                |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |          |  
|Payments for business acquisitions                  |  |                          | (186,869 | ) |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | (186,869 | )
|Capital expenditures                                |  |                          | (3,839   | ) |                       |   | (5,101  | )                      |  |   | (5           | ) |  |                   |       |   |  |   | (8,945   | )
|                                                    |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |          |  
|Net cash used in investing activities               |  |                          | (190,708 | ) |                       |   | (5,101  | )                      |  |   | (5           | ) |  |                   |       |   |  |   | (195,814 | )
|                                                    |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |          |  
|Cash flows from financing activities                |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |          |  
|Change in bank overdrafts                           |  |                          |         |   |                       |   | (6,550  | )                      |  |   | (163         | ) |  |                   |       |   |  |   | (6,713   | )
|Repayment of capital lease obligations              |  |                          | (5       | ) |                       |   | (72     | )                      |  |   |             |   |  |                   |       |   |  |   | (77      | )
|Equity contribution                                 |  |                          | 40,000   |   |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | 40,000   |  
|Debt acquisition costs                              |  |                          | (3,743   | ) |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | (3,743   | )
|Proceeds from bank term loan                        |  |                          | 143,000  |   |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | 143,000  |  
|Proceeds from notes payable borrowing               |  |                          |         |   |                       |   | 2,410   |                        |  |   |             |   |  |                   |       |   |  |   | 2,410    |  
|Repayments of notes payable                         |  |                          |         |   |                       |   | (947    | )                      |  |   |             |   |  |                   |       |   |  |   | (947     | )
|Repayments of long term obligations                 |  |                          | (30,000  | ) |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | (30,000  | )
|                                                    |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |          |  
|Net cash provided by (used in) financing activities |  |                          | 149,252  |   |                       |   | (5,159  | )                      |  |   | (163         | ) |  |                   |       |   |  |   | 143,930  |  
|                                                    |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |          |  
|Effect of exchange rate changes on cash             |  |                          |         |   |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   |         |  
|Net change in cash and cash equivalents             |  |                          | 2        |   |                       |   | 8,415   |                        |  |   | 741          |   |  |                   |       |   |  |   | 9,158    |  
|Cash and cash equivalents - beginning of period     |  |                          |         |   |                       |   | 519     |                        |  |   |             |   |  |                   |       |   |  |   | 519      |  
|                                                    |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |          |  
|Cash and cash equivalents - end of period           |  | $                        | 2        |   |                       | $ | 8,934   |                        |  | $ | 741          |   |  | $                 |       |   |  | $ | 9,677    |  
|                                                    |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |          |  
|Supplemental disclosures of cash flow information:  |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |          |  
|Interest paid                                       |  | $                        | 45,256   |   |                       | $ |        |                        |  | $ |             |   |  | $                 |       |   |  | $ | 45,256   |  
|Interest received                                   |  |                          |         |   |                       |   | 378     |                        |  |   | 22           |   |  |                   |       |   |  |   | 400      |  
|Income taxes refunded (paid)                        |  |                          |         |   |                       |   | 35      |                        |  |   | (251         | ) |  |                   |       |   |  |   | (216     | )
|Non-cash investing activity:                        |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |          |  
|Capital lease activity                              |  |                          |         |   |                       |   | (12     | )                      |  |   |             |   |  |                   |       |   |  |   | (12      | )



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

(in thousands, except share amounts and where noted in
millions)



Pinnacle Foods Group Inc.

Consolidating Statement of Cash Flows

For the six months ended June 26,
2005



|                                                   |  |                         |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|-------------------------------------------------- |  | ----------------------- | ------- | - | --------------------- | - | ------- | ---------------------- |  | - | ------------ | - |  | ----------------- | ------ | - |  | - | ------- | -
|                                                   |  | PinnacleFoodsGroup Inc. |         |   | GuarantorSubsidiaries |   |         | NonguarantorSubsidiary |  |   | Eliminations |   |  | ConsolidatedTotal |       
|Cash flows from operating activities               |  |                         |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Net (loss) earnings                                |  | $                       | (24,602 | ) |                       | $ | 5,177   |                        |  | $ | 1,901        |   |  | $                 | (7,078 | ) |  | $ | (24,602 | )
|Non-cash charges (credits) to net (loss) earnings  |  |                         |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Depreciation and amortization                      |  |                         | 12,541  |   |                       |   | 8,785   |                        |  |   | 3            |   |  |                   |       |   |  |   | 21,329  |  
|Restructuring and impairment charge                |  |                         | 1,502   |   |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | 1,502   |  
|Amortization of debt acquisition costs             |  |                         | 2,614   |   |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | 2,614   |  
|Amortization of bond premium                       |  |                         | (257    | ) |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | (257    | )
|Change in value of financial instruments           |  |                         | (1,261  | ) |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | (1,261  | )
|Equity in loss (earnings) of investees             |  |                         | (5,177  | ) |                       |   | (1,901  | )                      |  |   |             |   |  |                   | 7,078  |   |  |   |        |  
|Postretirement healthcare benefits                 |  |                         | 13      |   |                       |   | (137    | )                      |  |   |             |   |  |                   |       |   |  |   | (124    | )
|Pension expense                                    |  |                         |        |   |                       |   | 298     |                        |  |   |             |   |  |                   |       |   |  |   | 298     |  
|Deferred income taxes                              |  |                         | 11,359  |   |                       |   | 1,098   |                        |  |   |             |   |  |                   |       |   |  |   | 12,457  |  
|Changes in working capital                         |  |                         |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Accounts receivable                                |  |                         | (1,634  | ) |                       |   | (629    | )                      |  |   | 826          |   |  |                   |       |   |  |   | (1,437  | )
|Intercompany accounts receivable/payable           |  |                         | 29,090  |   |                       |   | (28,479 | )                      |  |   | (611         | ) |  |                   |       |   |  |   |        |  
|Inventories                                        |  |                         | 15,033  |   |                       |   | 23,750  |                        |  |   | 362          |   |  |                   |       |   |  |   | 39,145  |  
|Accrued trade marketing expense                    |  |                         | (11,131 | ) |                       |   | 3,452   |                        |  |   | (1,581       | ) |  |                   |       |   |  |   | (9,260  | )
|Accounts payable                                   |  |                         | (27,702 | ) |                       |   | 2,153   |                        |  |   | (298         | ) |  |                   |       |   |  |   | (25,847 | )
|Accrued liabilities                                |  |                         | 5,672   |   |                       |   | 1,345   |                        |  |   | 606          |   |  |                   |       |   |  |   | 7,623   |  
|Other current assets                               |  |                         |        |   |                       |   | 603     |                        |  |   |             |   |  |                   |        |   |  |   | 603     |  
|                                                   |  |                         |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Net cash provided by operating activities          |  |                         | 6,060   |   |                       |   | 15,515  |                        |  |   | 1,208        |   |  |                   |       |   |  |   | 22,783  |  
|                                                   |  |                         |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Cash flows from investing activities               |  |                         |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Capital expenditures                               |  |                         | (6,796  | ) |                       |   | (5,464  | )                      |  |   | (9           | ) |  |                   |       |   |  |   | (12,269 | )
|Pinnacle merger consideration                      |  |                         | 1,595   |   |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | 1,595   |  
|Sale of plant assets                               |  |                         |        |   |                       |   | 561     |                        |  |   |             |   |  |                   |       |   |  |   | 561     |  
|                                                   |  |                         |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Net cash used in investing activities              |  |                         | (5,201  | ) |                       |   | (4,903  | )                      |  |   | (9           | ) |  |                   |       |   |  |   | (10,113 | )
|                                                   |  |                         |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Cash flows from financing activities               |  |                         |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Change in bank overdrafts                          |  |                         |        |   |                       |   | (308    | )                      |  |   |             |   |  |                   |       |   |  |   | (308    | )
|Repayment of capital lease obligations             |  |                         | (5      | ) |                       |   | (57     | )                      |  |   |             |   |  |                   |       |   |  |   | (62     | )
|Debt acquisition costs                             |  |                         | (34     | ) |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | (34     | )
|Proceeds from notes payable borrowings             |  |                         | 31,626  |   |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | 31,626  |  
|Repayments of notes payable                        |  |                         | (30,177 | ) |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | (30,177 | )
|Repayments of long term obligations                |  |                         | (2,725  | ) |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | (2,725  | )
|                                                   |  |                         |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Net cash used in financing activities              |  |                         | (1,315  | ) |                       |   | (365    | )                      |  |   |             |   |  |                   |       |   |  |   | (1,680  | )
|                                                   |  |                         |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Effect of exchange rate changes on cash            |  |                         |        |   |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   |        |  
|                                                   |  |                         |         |   |                      
|Net change in cash and cash equivalents            |  |                         | (456    | ) |                       |   | 10,247  |                        |  |   | 1,199        |   |  |                   |       |   |  |   | 10,990  |  
|                                                   |  |                         |         |   |                      
|Cash and cash equivalents - beginning of period    |  |                         | 490     |   |                       |   | 1,745   |                        |  |   |              |   |  |                   |        |   |  |   | 2,235   |  
|                                                   |  |                         |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Cash and cash equivalents - end of period          |  | $                       | 34      |   |                       | $ | 11,992  |                        |  | $ | 1,199        |   |  | $                 |       |   |  | $ | 13,225  |  
|                                                   |  |                         |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Supplemental disclosures of cash flow information: |  |                         |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Interest paid                                      |  | $                       | 30,184  |   |                       | $ |        |                        |  | $ |             |   |  | $                 |       |   |  | $ | 30,184  |  
|Interest received                                  |  |                         |        |   |                       |   | 213     |                        |  |   | 10           |   |  |                   |       |   |  |   | 223     |  
|Income taxes refunded (paid)                       |  |                         |        |   |                       |   | 622     |                        |  |   | (184         | ) |  |                   |       |   |  |   | 438     |  



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ITEM 2: MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(dollars in millions, except where noted)

The purpose of this section is to discuss and analyze our consolidated financial condition, liquidity
and capital resources and results of operations. You should read this analysis in conjunction with the consolidated financial statements and accompanying notes to the consolidated financial statements. This quarterly report on Form 10-Q contains
forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future
events, future revenues or performance, financing needs, plans or intentions relating to acquisitions, business trends and other information that is not historical information. When used in this quarterly report on Form 10-Q, the words
estimates, expects, contemplates, anticipates, projects, plans, intends, believes, forecasts, may, should and
variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements, including, without limitation, managements examination of historical operating trends, are based upon our
current expectations and various assumptions. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that managements expectations, beliefs
and projections will result or be achieved and actual results may vary materiality from what is expressed in or indicated by the forward-looking statements.

There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in this quarterly report. Such risks, uncertainties and other important factors include,
among others, the risks, uncertainties and factors set forth under Item 1A. Risk Factors in our annual report on Form 10-K, other matters discussed from time to time in subsequent filings with the Securities and Exchange Commission, and
the following risks, uncertainties and factors:



| |  |  | general economic and business conditions;
| | - |  | -----------------------------------------



| |  |  | industry trends;
| | - |  | ----------------



| |  |  | changes in our leverage;
| | - |  | ------------------------



| |  |  | interest rate changes;
| | - |  | ----------------------



| |  |  | changes in our ownership structure;
| | - |  | -----------------------------------



| |  |  | competition;
| | - |  | ------------



| |  |  | the loss of any of our major customers or suppliers;
| | - |  | ----------------------------------------------------



| |  |  | changes in demand for our products;
| | - |  | -----------------------------------



| |  |  | changes in distribution channels or competitive conditions in the markets where we operate;
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | costs and timeliness of integrating future acquisitions;
| | - |  | --------------------------------------------------------



| |  |  | loss of our intellectual property rights;
| | - |  | -----------------------------------------



| |  |  | fluctuations in price and supply of raw materials;
| | - |  | --------------------------------------------------



| |  |  | seasonality;
| | - |  | ------------



| |  |  | our reliance on co-packers to meet our manufacturing needs;
| | - |  | -----------------------------------------------------------



| |  |  | availability of qualified personnel; and
| | - |  | ----------------------------------------



| |  |  | changes in the cost of compliance with laws and regulations, including environmental laws and regulations.
| | - |  | ----------------------------------------------------------------------------------------------------------

There may be other factors that may cause our actual results to differ materially from the forward-looking statements.

All forward-looking statements in this Form 10-Q apply only as of the date of this quarterly report on Form 10-Q and are expressly qualified in their entirety by the
cautionary statements included in this quarterly report on Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances.



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OVERVIEW

We are a leading producer, marketer and distributor of high quality, branded food products, the
results of which are managed and reported in two operating segments: frozen foods and dry foods. The frozen foods segment consists of the following: frozen dinners (Swanson, Hungry-Man), frozen seafood (Van de Kamps, Mrs. Pauls),
frozen breakfast (Aunt Jemima), bagels (Lenders), and other frozen products (Celeste, Chefs Choice). The dry foods segment consists of the following product lines: condiments (Vlasic, Open Pit), baking (Duncan Hines), syrup (Mrs.
Butterworths and Log Cabin), and canned meat (Armour).

As described in Note 1 to the Consolidated Financial Statements, there was a merger (the
Pinnacle Transaction) and change of control on November 25, 2003. Also, on March 19, 2004, in connection with the comprehensive restructuring of Aurora Foods Inc., the Aurora Merger resulted in the merger of
Pinnacle and Aurora, with Pinnacle as the accounting acquiror.

As described in Note 3 to the Consolidated Financial Statements, on March 1, 2006, the
Company acquired certain assets and assumed certain liabilities of the food products business (the Armour Business) of The Dial Corporation for $183 million in cash. The acquisition of the Armour Business is expected to complement the
Companys existing product lines that together will provide growth opportunities and scale. The Armour Business is a leading manufacturer, distributor and marketer of products in the $1.1 billion canned meats category. For the year ended
December 31, 2005, the Armour Business had net sales of approximately $225 million. Primarily all of the products are produced at the manufacturing facility located in Ft. Madison, Iowa, which was acquired in the transaction. Products are sold
under the Armour brand name as well as private-label and certain co-pack arrangements. The Armour Business offers products in eleven of the fifteen segments within the canned meat category, including Vienna sausage, potted meat, and sliced dried
beef. The consolidated financial statements include the results of operation of the Armour Business from the date of acquisition.

In November 2003, we
entered into a $675.0 million credit agreement (senior secured credit facilities) with JPMorgan Chase Bank (a related party) and other financial institutions as lenders, which provides for a $545.0 million seven-year term loan B
facility, of which $120.0 million was made available in connection with the Pinnacle Transaction and $425.0 million was made available as a delayed draw term loan on the closing date of the Aurora Merger. Concurrently with the acquisition
of the Armour Business but effective as of February 14, 2006, the Company entered into an Amendment No. 4 and Agreement to the existing senior secured credit facilities. Among other things, the amendment approved the acquisition and
provided for the making of $143.0 million of additional tack-on term loans to fund a portion of the acquisition. The senior secured credit facilities also provide for a six-year $130.0 million revolving credit facility, of which up to
$65.0 million was made available on November 25, 2003, and the remaining $65.0 million was made available on the closing date of the Aurora Merger. The revolving credit facility expires November 25, 2009. There were no borrowings
outstanding under the revolving credit facility as of June 25, 2006 and December 25, 2005.

Additionally, in November 2003 and February 2004, we
issued $200 million and $194 million, respectively, of 81/4% senior subordinated notes. The terms of the
November 2003 and February 2004 notes are the same and are issued under the same indenture.

During the six months ended June 25, 2006 and
June 26, 2005, our earnings (loss) before interest and taxes were negatively impacted by certain items. These items included:



| |  |  | The six months ended June 26, 2005 and June 25, 2006 were impacted by plant consolidation costs related the closing the Omaha, Nebraska and Erie, Pennsylvania production
facilities as well as the shutdown of a production line in our Mattoon, Illinois production facility. These costs, which were part of our plan of consolidating and streamlining production activities after the Aurora Merger, are discussed below under
the heading Plant Consolidation.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In the six months ended June 25, 2006, we recorded a charge of $4,570 related to the flow through of the increase in the fair market value of inventories acquired in the Armour
Business.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In the six months ended June 25, 2006, we recorded non-cash equity compensation of $1,415 for certain ownership units of Crunch Equity Holdings, LLC issued to CDM Investor
Group LLC, which is controlled by certain members of PFGIs management in connection with the Armour acquisition.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In the six months ended June 25, 2006, we recorded non-cash equity compensation of $600 related to stock options granted to employees of PFGI and accounted for in accordance
with SFAS 123(R), Share-Based Payment (Revised 2004), which was adopted at the start of fiscal 2006.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Additionally, in the continuing effort to revitalize our brands, we introduced several new products during the first
quarter of 2005 and incurred a substantially higher level of slotting expenses and a higher level of coupon expenses. These high levels of expense did not continue throughout the remainder of 2005. During the first six months of 2006, our product
introductions were significantly less than the prior year and consequently our slotting and coupon expense was less. Both slotting and coupon expenses are deducted from shipments (as discussed below) in arriving at net sales in our Consolidated
Statement of Operations.

As discussed in the Liquidity and Capital Resources section below, our senior secured credit facilities contain the following
financial covenants: a maximum total leverage ratio, a minimum interest coverage ratio, and a maximum capital expenditure limitation. We have been in compliance with these covenants since the senior credit agreement permanent amendment and waiver
became effective on November 19, 2004 as discussed in the Liquidity and Capital Resources section below. Based upon managements current estimates, we believe we will continue to meet the financial covenants set forth in the senior credit
agreement amendment and, as such, will maintain compliance with these covenant requirements for at least the next 12 months. However, in the event that we do not meet these financial covenants, it could result in a breach, which, if we are unable to
obtain a waiver, may result in a default under the senior secured credit facilities, which in turn could trigger default under our 8 1/4% senior subordinated notes. Factors that could influence our ability to meet these financial covenants include (i) lower demand for our products, (ii) higher than anticipated trade and
consumer coupon spending, and (iii) higher freight and distribution costs than those which we experienced over the past twelve months.

On
June 2, 2006, we amended our senior secured credit facilities, which principally reduced the applicable margin with respect to our term loan by 1.25%. See a further discussion on the senior secured credit facilities amendments in the Liquidity
section.

We are currently working on integrating the Armour Business acquired in the first quarter of 2006. Through the Aurora Merger in 2004 and the
acquisition of the Armour Business, we have enhanced our existing product offerings and launched dozens of new offerings. Our focused strategy remains the same and includes:



| |  |  | capitalize on our diversified product portfolio;
| | - |  | ------------------------------------------------



| |  |  | leverage our brand names for share leadership;
| | - |  | ----------------------------------------------



| |  |  | expand the foodservice and private label businesses;
| | - |  | ----------------------------------------------------



| |  |  | expand the Vlasic and Duncan Hines brands in Canada;
| | - |  | ----------------------------------------------------



| |  |  | continue to achieve significant productivity improvements; and
| | - |  | --------------------------------------------------------------



| |  |  | complete the integration and execute on our synergy opportunities.
| | - |  | ------------------------------------------------------------------

Plant Consolidations

Omaha, Nebraska Production Facility

During the six months ended June 25, 2006 and June 26, 2005, we recorded restructuring charges totaling $0.1 million and $1.0 million pertaining to our decision to permanently close the Omaha, Nebraska
production facility. Charges from the date of the announced closing in April 2004 total $17.0 million. These charges are recorded as a component of Other expense (income), net in the consolidated statement of operations. The closure was part of our
plan of consolidating and streamlining production activities after the Aurora Merger. These charges were recorded in accordance with SFAS No. 112, Employers Accounting for Postemployment Benefits, SFAS No. 144, Accounting
for the Impairment and Disposal of Long-Lived Assets and SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities. In determining such charges, we made certain estimates and judgments surrounding the
amounts ultimately to be paid and received for the actions we have taken.

Production from the Omaha plant, which manufactured Swanson frozen entree retail
products and frozen foodservice products, has been relocated to our Fayetteville, Arkansas and Jackson, Tennessee production facilities. Activities related to the final closure of the plant were completed in the first quarter of 2005 and resulted in
the elimination of 411 positions.



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In order to estimate the costs related to our restructuring efforts, management made its best estimates of the most
likely expected outcomes of the significant activities to accomplish the restructuring. These estimates principally related to charges for asset impairment for the owned facility in Omaha, employee severance costs to be paid, and other plant
shutdown and relocation costs. The most significant of these estimated costs related to the asset impairment of the Omaha facility, which was based upon the net book value of the assets that were not being transferred, less the cash flows from
production until shutdown and a reasonable salvage value for the land, building and equipment to be sold. We initially recorded a charge of $7.4 million during fiscal 2004 for the impairment of these assets, which was our best estimate of the
impairment charge at the time. We had planned to transfer equipment with a net book value of approximately $9.7 million to other production locations, primarily in Fayetteville, Arkansas and Jackson, Tennessee. Due to the delay in closing the Omaha
plant and the need to have production up and running in the Fayetteville plant, we were unable to transfer certain equipment with a net book value of $6.2 million and instead incurred capital expenditures to purchase, build and modify the necessary
equipment in Fayetteville. In addition to the impairment charge initially recorded in fiscal 2004, we evaluated the remaining property, plant and equipment as well as existing offers to sell the plant and equipment, and recorded an additional
impairment charge of $2.6 million in the 21 weeks ended December 26, 2004. Total capital expenditures in connection with this plant consolidation project totaled approximately $8.6 million.

The severance costs, which include continuation of employee benefits for salaried employees, total $2.6 million, all of which has been incurred and paid.

The costs associated with transferring certain assets to the Fayetteville and Jackson facilities along with the costs necessary to shut down the Omaha facility are
included in other restructuring costs as they are incurred. Since the April 7, 2004 closure announcement, these costs have totaled $4.4 million. The Company will continue to incur certain costs until the plant is sold. We expect these costs to
approximate $0.1 million per quarter and the costs will be recorded in expense as incurred in the Companys statements of operations. These estimates, together with other estimates made by us in connection with the restructuring actions, may
vary significantly from the actual results, depending in part on factors beyond our control. For example, proceeds received from the sale of the land and equipment will depend on our success in negotiating with buyers and the current real estate
market in Omaha. We will review the status of our restructuring activities on a quarterly basis and, if appropriate, record changes in estimates to our restructuring obligations in our consolidated financial statements for such quarter based on
managements then-current estimates.

Erie, Pennsylvania Production Facility

During the six months ended June 25, 2006 and June 26, 2005, we recorded restructuring charges totaling $0.9 million and $0.7 pertaining to our decision to permanently close the Erie, Pennsylvania production
facility. Charges from the date of the announced closing in April 2005 total $6.8 million. Production has ceased at the facility, which is currently being prepared for sale. The charges are recorded as a component of Other expense (income), net in
the consolidated statement of operations. The closure was part of our continuing plan to streamline production activities. These charges were recorded in accordance with SFAS No. 112, Employers Accounting for Postemployment Benefits
and SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities. In determining such charges, we made certain estimates and judgments surrounding the amounts ultimately to be paid and received for the actions we
have taken.

Production from the Erie plant, which manufactures Mrs. Pauls and Van de Kamps frozen seafood products and Aunt Jemima frozen
breakfast products, has been relocated primarily to our Jackson, Tennessee production facility. Activities related to the closure of the plant are expected to be completed in 2006 and will result in the elimination of approximately 290 positions.
Employee termination activities commenced in July 2005 and were substantially completed by the end of the first quarter of 2006.

In order to estimate the
costs related to our restructuring efforts, management made its best estimates of the most likely expected outcomes of the significant activities to accomplish the restructuring. These estimates principally related to charges for employee severance
and related costs to be paid and other plant shutdown and relocation costs. The employee related costs, which include severance and other benefits, total $1.0 million, all of which has been paid and incurred as of June 25, 2006.



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The estimated costs associated with transferring certain assets to the Jackson facility along with estimates of the costs
necessary to shut down the Erie facility are included in other restructuring costs as they are incurred. We anticipate that costs through completion of the program will approximate $6.0 million. Through June 25, 2006, $5.8 million has been
incurred. These estimates, together with other estimates made by us in connection with the restructuring actions, may vary significantly from the actual results, depending in part on factors beyond our control. For example, proceeds received from
the sale of the land and equipment will depend on our success in negotiating with buyers and the current real estate market in Erie. We will review the status of our restructuring activities on a quarterly basis and, if appropriate, record changes
in estimates to our restructuring obligations in our consolidated financial statements for such quarter based on managements then-current estimates.

Mattoon, Illinois Production Facility

On April 21, 2005, we made and announced our decision effective May 9, 2005 to shut down a
bagel production line at our Mattoon, Illinois facility, which produces our Lenders Bagels. In connection with the shutdown of the production line, we terminated 28 full-time and 7 part-time employees. A portion of the assets that were used in
the bagel line have been utilized in other of our production areas. In accordance with SFAS No. 144, Accounting for the Impairment and Disposal of Long-Lived Assets, we recorded a non-cash charge of $0.9 million related to the asset
impairment of the bagel line, which has been recorded as a component of Other expense (income), net in the consolidated statement of operations for the six months ended June 26, 2005.

As of June 25, 2006, we had an accrued restructuring liability of $0.5 million, of which $0.2 million related to the Omaha plant shutdown, $0.1 million related to
the Erie plant shutdown and the balance related to severance costs from the Aurora Merger. We expect all of these costs to be paid during the second half of 2006.



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##### Table of Contents

RESULTS OF OPERATIONS

The discussion below for each of the comparative periods
is based upon net sales. We determine net sales in accordance with generally accepted accounting principles. We calculate our net sales by deducting trade marketing, slotting and consumer coupon redemption expenses from shipments.
Shipments means gross sales less cash discounts, returns and non-marketing allowances. We calculate gross sales by multiplying the published list price of each product by the number of units of that product sold.

Shipments is a non-GAAP financial measure. We include it in our managements discussion and analysis because we believe that it is a relevant financial
performance indicator for our company as it measures the increase or decrease in our revenues caused by shipping more or less physical case volume multiplied by our published list prices. It is also a measure used by our management to evaluate our
revenue performance. This measure is not recognized in accordance with accounting principles generally accepted in the United States of America (GAAP) and should not be viewed as an alternative to GAAP measures of performance.

The following table reconciles shipments to net sales for the consolidated company, the frozen foods segment and the dry foods segment for three months
ended June 25, 2006 and June 26, 2005

For the three months ended,



|                                                                        |              |              |              |              |              |           |              |   |              |  |              |       |  |   |       |  |   |      
|----------------------------------------------------------------------- | ------------ | ------------ | ------------ | ------------ | ------------ | --------- | ------------ | - | ------------ |  | ------------ | ----- |  | - | ----- |  | - | -----
|                                                                        |              | Consolidated |              | Frozen Foods |              | Dry Foods
|                                                                        | June 25,2006 |              | June 26,2005 |              | June 25,2006 |           | June 26,2005 |   | June 25,2006 |  | June 26,2005
|Shipments                                                               |              | $            | 501.3        |              | $            | 430.4     |              | $ | 202.8        |  | $            | 213.7 |  | $ | 298.5 |  | $ | 216.7
|Less: Aggregate trade marketing and consumer coupon redemption expenses |              |              | 132.7        |              |              | 120.4     |              |   | 54.3         |  |              | 58.3  |  |   | 78.4  |  |   | 62.1 
|Less: Slotting expense                                                  |              |              | 2.9          |              |              | 3.4       |              |   | 1.1          |  |              | 0.3   |  |   | 1.8   |  |   | 3.1  
|                                                                        |              |              |              |              |              |           |              |   |              |  |              |       |  |   |       |  |   |      
|Net sales                                                               |              | $            | 365.7        |              | $            | 306.6     |              | $ | 147.4        |  | $            | 155.1 |  | $ | 218.3 |  | $ | 151.5
|                                                                        |              |              |              |              |              |           |              |   |              |  |              |       |  |   |       |  |   |      

For the six months ended,



|                                                                        |              |              |              |              |              |           |              |   |              |  |              |       |  |   |       |  |   |      
|----------------------------------------------------------------------- | ------------ | ------------ | ------------ | ------------ | ------------ | --------- | ------------ | - | ------------ |  | ------------ | ----- |  | - | ----- |  | - | -----
|                                                                        |              | Consolidated |              | Frozen Foods |              | Dry Foods
|                                                                        | June 25,2006 |              | June 26,2005 |              | June 25,2006 |           | June 26,2005 |   | June 25,2006 |  | June 26,2005
|Shipments                                                               |              | $            | 936.7        |              | $            | 894.5     |              | $ | 447.9        |  | $            | 485.3 |  | $ | 488.8 |  | $ | 409.2
|Less: Aggregate trade marketing and consumer coupon redemption expenses |              |              | 241.6        |              |              | 244.5     |              |   | 113.2        |  |              | 133.9 |  |   | 128.4 |  |   | 110.6
|Less: Slotting expense                                                  |              |              | 15.5         |              |              | 35.5      |              |   | 9.9          |  |              | 14.9  |  |   | 5.6   |  |   | 20.6 
|                                                                        |              |              |              |              |              |           |              |   |              |  |              |       |  |   |       |  |   |      
|Net sales                                                               |              | $            | 679.6        |              | $            | 614.5     |              | $ | 324.8        |  | $            | 336.5 |  | $ | 354.8 |  | $ | 278.0
|                                                                        |              |              |              |              |              |           |              |   |              |  |              |       |  |   |       |  |   |      



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Consolidated statements of operations

The following tables set forth statement of operations data expressed in dollars and as a percentage of net sales. In accordance with GAAP, the results for the three and six months ended June 25, 2006 only
include the results of operations of the Armour business from the date of acquisition, March 1, 2006, through the end of the period.



|                                   |  |                    |       |  |                  |   |  |               |       |  |               |   |  |   |       |  |       |   |  |   |       |  |       |  
|---------------------------------- |  | ------------------ | ----- |  | ---------------- | - |  | ------------- | ----- |  | ------------- | - |  | - | ----- |  | ----- | - |  | - | ----- |  | ----- | -
|                                   |  | Three months ended |       |  | Six months ended |  
|                                   |  | June 25, 2006      |       |  | June 26, 2005    |   |  | June 25, 2006 |       |  | June 26, 2005 |  
|Net sales                          |  | $                  | 365.7 |  | 100.0            | % |  | $             | 306.6 |  | 100.0         | % |  | $ | 679.6 |  | 100.0 | % |  | $ | 614.5 |  | 100.0 | %
|Costs and expenses                 |  |                    |       |  |                  |   |  |               |       |  |               |   |  |   |       |  |       |   |  |   |       |  |       |  
|Cost of products sold              |  |                    | 292.7 |  | 80.0             | % |  |               | 246.2 |  | 80.3          | % |  |   | 546.6 |  | 80.4  | % |  |   | 508.0 |  | 82.7  | %
|Marketing and selling expenses     |  |                    | 26.3  |  | 7.2              | % |  |               | 22.0  |  | 7.2           | % |  |   | 50.4  |  | 7.4   | % |  |   | 53.0  |  | 8.6   | %
|Administrative expenses            |  |                    | 12.8  |  | 3.5              | % |  |               | 10.1  |  | 3.3           | % |  |   | 26.4  |  | 3.9   | % |  |   | 22.5  |  | 3.7   | %
|Research and development expenses  |  |                    | 1.0   |  | 0.3              | % |  |               | 0.9   |  | 0.3           | % |  |   | 1.9   |  | 0.3   | % |  |   | 2.0   |  | 0.3   | %
|Other expense (income), net        |  |                    | 3.1   |  | 0.8              | % |  |               | 1.5   |  | 0.5           | % |  |   | 4.8   |  | 0.7   | % |  |   | 4.9   |  | 0.8   | %
|                                   |  |                    |       |  |                  |   |  |               |       |  |               |   |  |   |       |  |       |   |  |   |       |  |       |  
|Total costs and expenses           |  | $                  | 335.9 |  | 91.9             | % |  | $             | 280.7 |  | 91.6          | % |  | $ | 630.1 |  | 92.7  | % |  | $ | 590.4 |  | 96.1  | %
|                                   |  |                    |       |  |                  |   |  |               |       |  |               |   |  |   |       |  |       |   |  |   |       |  |       |  
|Earnings before interest and taxes |  | $                  | 29.8  |  | 8.1              | % |  | $             | 25.9  |  | 8.4           | % |  | $ | 49.5  |  | 7.3   | % |  | $ | 24.1  |  | 3.9   | %
|                                   |  |                    |       |  |                  |   |  |               |       |  |               |   |  |   |       |  |       |   |  |   |       |  |       |  



|                                   |  |                    |       |   |                  |   |       |              |  |   |              |   |  |   |       |  
|---------------------------------- |  | ------------------ | ----- | - | ---------------- | - | ----- | ------------ |  | - | ------------ | - |  | - | ----- | -
|                                   |  | Three months ended |       |   | Six months ended |  
|                                   |  | June 25,2006       |       |   | June 26,2005     |   |       | June 25,2006 |  |   | June 26,2005 |  
|Net sales                          |  |                    |       |   |                  |   |       |              |  |   |              |   |  |   |       |  
|Frozen foods                       |  | $                  | 147.4 |   |                  | $ | 155.1 |              |  | $ | 324.8        |   |  | $ | 336.5 |  
|Dry foods                          |  |                    | 218.3 |   |                  |   | 151.5 |              |  |   | 354.8        |   |  |   | 278.0 |  
|                                   |  |                    |       |   |                  |   |       |              |  |   |              |   |  |   |       |  
|Total                              |  | $                  | 365.7 |   |                  | $ | 306.6 |              |  | $ | 679.6        |   |  | $ | 614.5 |  
|                                   |  |                    |       |   |                  |   |       |              |  |   |              |   |  |   |       |  
|Earnings before interest and taxes |  |                    |       |   |                  |   |       |              |  |   |              |   |  |   |       |  
|Frozen foods                       |  | $                  | 9.2   |   |                  | $ | 5.3   |              |  | $ | 15.8         |   |  | $ | 0.6   |  
|Dry foods                          |  |                    | 25.0  |   |                  |   | 24.4  |              |  |   | 43.3         |   |  |   | 32.2  |  
|Unallocated corporate expenses     |  |                    | (4.4  | ) |                  |   | (3.8  | )            |  |   | (9.6         | ) |  |   | (8.7  | )
|                                   |  |                    |       |   |                  |   |       |              |  |   |              |   |  |   |       |  
|Total                              |  | $                  | 29.8  |   |                  | $ | 25.9  |              |  | $ | 49.5         |   |  | $ | 24.1  |  
|                                   |  |                    |       |   |                  |   |       |              |  |   |              |   |  |   |       |  
|Depreciation and amortization      |  |                    |       |   |                  |   |       |              |  |   |              |   |  |   |       |  
|Frozen foods                       |  | $                  | 5.0   |   |                  | $ | 9.4   |              |  | $ | 10.6         |   |  | $ | 14.5  |  
|Dry foods                          |  |                    | 6.5   |   |                  |   | 3.3   |              |  |   | 10.2         |   |  |   | 6.8   |  
|                                   |  |                    |       |   |                  |   |       |              |  |   |              |   |  |   |       |  
|Total                              |  | $                  | 11.5  |   |                  | $ | 12.7  |              |  | $ | 20.8         |   |  | $ | 21.3  |  
|                                   |  |                    |       |   |                  |   |       |              |  |   |              |   |  |   |       |  

Three months ended June 25, 2006 compared to three months ended June 26, 2005

Net sales. Shipments in the three months ended June 25, 2006 were $501.3 million, an increase of $70.9 million, compared to shipments in the three
months ended June 26, 2005 of $430.4 million. The Armour acquisition resulted in $61.6 million of increased shipments. All other businesses were up $9.3 million. Net sales in the three months ended June 25, 2006 were
$365.7 million, an increase of $59.1 million, compared to net sales in the three months ended June 26, 2005 of $306.6 million. The Armour acquisition resulted in $48.7 million of increased net sales. All other businesses were up $10.4
million.



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##### Table of Contents

Frozen foods:Shipments in the three months ended June 25, 2006 were $202.8 million, a
decrease of $10.9 million. The change was driven by a $16.4 million decrease in our Swanson business sales, resulting from a reduction of unprofitable trade deals. Partially offsetting this decline was a $4.5 million increase in the Seafood
business sales, the result of improved product supplies following a production interruption in the first quarter of 2006. Aggregate trade marketing and consumer coupon redemption expenses and slotting expenses decreased $3.2 million, the result of
lower trade marketing and consumer coupon redemption activity in 2006. As a result, frozen foods net sales decreased $7.7 million, again resulting from sales declines in the Swanson business.

Dry foods:Shipments in the three months ended June 25, 2006 were $298.5 million, an increase of $81.8 million. The recently acquired
Armour business increased shipments $61.6 million. The remaining change of $20.2 million was from our existing businesses and was due to increases in our pickle product line and Duncan Hines product line sales, resulting from the shift in timing of
seasonal Easter sales in 2006 versus 2005. Aggregate trade marketing and consumer coupon redemption expenses and slotting expenses increased $15.0 million, of which $12.9 million relate to the acquisition of the Armour business. As a result, dry
foods net sales increased $66.8 million, of which $48.7 million of the increase resulted from the sales of products related to the acquisition of the Armour business. The net sales of the remaining businesses increased $18.1 million, or 11.9%,
for the three months ended June 25, 2006.

Cost of products sold. Our cost of products sold was $292.7 million, or 80.0% of net sales, in
the three months ended June 25, 2006, versus cost of products sold of $246.2 million, or 80.3% of net sales, in the three months ended June 26, 2005. The products acquired in the Armour business resulted in an additional $46.8 million
of cost of products sold in the three months ended June 25, 2006, including additional costs of $2.5 million related to post-acquisition sales of inventories written up to fair value at the date of the Armour acquisition. The cost of product
sold for the remaining businesses was $245.9 million, or 77.6% of net sales, a 2.7 percentage point improvement. The principal driver of the improved cost of product sold as a percent of net sales rate was a decline in freight and distribution
expenses as we continue to improve our efficiency in this area. The change in these costs accounted for 1.7 percentage points of the improvement. A favorable mix of products sold, resulting from increased sales of higher margin products, accounted
for the balance of the change.

Marketing and selling expenses. Marketing and selling expenses were $26.3 million, or 7.2% of net sales, in the
three months ended June 25, 2006 compared to $22.0 million, or 7.2% of net sales, in the three months ended June 26, 2005. The acquisition of the Armour business contributed $1.4 million of an increase for the three months ended
June 25, 2006. The balance of the change was due primarily to higher consumer promotion expense of $2.2 million, primarily in our Swanson and Vlasic pickle businesses.

Administrative expenses. Administrative expenses were $12.8 million in the three months ended June 25, 2006 compared to $10.1 million in the three months ended June 26, 2005. The acquisition
of the Armour business contributed $1.8 million of an increase for the three months ended June 25, 2006. Resumption of the management fees to JPMP and JWC in accordance with Amendment No. 2 to our senior secured credit facilities ($0.3
million), stock option expense in accordance with SFAS 123(R) ($0.3 million), and a series of smaller non-recurring items comprise the remainder of the increase.

Research and development expenses. Research and development expenses were $1.0 million, or 0.3% of net sales, in the three months ended June 25, 2006 compared with $0.9 million, or 0.3% of net sales, in the three months
ended June 26, 2005.

Other expense (income), net. Other expense was $3.1 million in the three months ended June 25, 2006 as compared
to $1.5 million in the three months ended June 26, 2005. For the three months ended June 25, 2006, restructuring charges totaled $0.5 million related to the closure of our Erie, Pennsylvania frozen food facility, which is discussed
above under Plant Consolidation. For the three months ended June 26, 2005, restructuring and impairment charges totaled $0.3 million related to the closure of our Omaha, Nebraska frozen food facility. In addition, for the three months ended
June 25, 2006, $1.2 million of amortization expense was incurred related to assets associated with the Armour acquisition. The remaining businesses incurred $1.2 million of amortization expense in both the three months ended June 25, 2006
and the three months ended June 26, 2005.

Earnings before interest and taxes. Earnings before interest and taxes (EBIT) increased $3.9 million
to $29.8 million in the three months ended June 25, 2006 from $25.9 million in EBIT in the three months ended June 26, 2005. This increase resulted from a $3.9 million increase in frozen foods EBIT and a $0.6 million
increase in dry foods EBIT, which were partially offset by a $0.6 million increase in unallocated corporate expenses.



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##### Table of Contents

Frozen foods:Frozen foods EBIT increased by $3.9 million in the three months ended
June 25, 2006. In 2006, we recorded a charge of $0.5 million related to the plant consolidation expense from the closure of the Erie, Pennsylvania frozen foods facility. In 2005, we recorded $4.2 million of accelerated depreciation expense
related to the plant closure of the Erie, Pennsylvania frozen foods facility. The balance of our frozen foods EBIT increased $0.2 million, principally due to reduced trade promotions and improvements in freight and distribution expense. Offsetting
these improvements was the unfavorable impact of lower sales volumes.

Dry foods:Dry foods EBIT increased $0.6 million in the three
months ended June 25, 2006 and included a $2.4 million loss related to the acquisition of the Armour business. The Armour results include the impact of the $2.5 million charge recorded in the three months ended June 25, 2006 related to
post-acquisition sales of inventories written up to fair value at the date of the acquisition. The balance of the dry foods EBIT increased $3.0 million, principally driven by $18.1 million of increased net sales in the quarter, mainly in our Duncan
Hines and Vlasic pickles businesses. In addition, freight and storage costs decreased resulting from the reorganization of our warehousing network.

Interest expense, net. Interest expense, net was $21.6 million in the three months ended June 25, 2006, compared to $20.7 million in the three months ended June 26, 2005. Included in the interest expense, net,
amount was $0.8 million and ($2.5) million for the three months ended June 25, 2006 and the three months ended June 26, 2005 respectively, recorded from gains and (losses) on interest rate swap agreements. We utilize interest rate swap
agreements to reduce the potential exposure to interest rate movements and to achieve a desired proportion of variable versus fixed rate debt. Any gains or losses realized on the interest rate swap agreements are recorded as an adjustment to
interest expense. Excluding the impact of the interest rate swaps, the increase in interest expense of $4.4 million was the result of higher interest rates on our bank borrowings ($2.4 million), higher average bank debt levels resulting from the
borrowings to fund the Armour Acquisition ($1.2 million), higher amortization of debt issue costs resulting from the Armour Acquisition as well as the impact of our prepayments of our bank borrowings.($0.7 million) and other ($0.1 million).

Provision for income taxes. The effective tax rate was 86.6% in the three months ended June 25, 2006, compared to 142.2% in the three months
ended June 26, 2005. We maintain a full valuation allowance against net deferred tax assets excluding indefinite lived intangible assets, and the effective rate difference is primarily due to the change in the valuation allowance for the
three month period. Deferred tax liabilities are recognized for the differences between the book and tax bases of certain goodwill and indefinite lived intangible assets.

Under Internal Revenue Code Section 382, Aurora is a loss corporation. Section 382 of the Code places limitations on our ability to use Auroras net operating loss carry forward to offset our income.
The annual net operating loss limitation is approximately $13-15 million subject to other rules and restrictions.

Six months ended June 25,
2006 compared to six months ended June 26, 2005

Net sales. Shipments in the six months ended June 25, 2006 were $936.7 million,
an increase of $42.2 million, compared to shipments in the six months ended June 26, 2005 of $894.5 million. The Armour acquisition resulted in $76.9 million of increased shipments. All other businesses were down $34.7 million. Net
sales in the six months ended June 25, 2006 were $679.6 million, an increase of $65.1 million, compared to net sales in the six months ended June 26, 2005 of $614.5 million. The Armour acquisition resulted in $62.1 million of
increased net sales. All other businesses were up $3.0 million.

Frozen foods:Shipments in the six months ended June 25, 2006
were $447.9 million, a decrease of $37.4 million. The change was driven by a $28.3 million decrease in the Seafood business sales, resulting from finished product supply issues attributed to the delayed start up of a new production line, which
occurred in the first quarter of 2006. In addition, our Swanson business sales were down $17.4 million, resulting from a reduction of unprofitable trade promotions. Aggregate trade marketing and consumer coupon redemption expenses and slotting
expenses decreased $25.7 million, the result of lower trade marketing and new product launch activity in 2006. As a result, frozen foods net sales decreased $11.7 million, again resulting from sales declines in the Seafood and Swanson
businesses.



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##### Table of Contents

Dry foods:Shipments in the six months ended June 25, 2006 were $488.8 million, an increase
of $79.6 million. The recently acquired Armour business increased shipments $76.9 million. The increase in our remaining businesses was due to increases in our foodservice and private label sales. Aggregate trade marketing and consumer coupon
redemption expenses and slotting expenses increased $2.8 million. The Armour Acquisition results in $14.8 million of increased aggregate trade marketing and consumer coupon redemption expenses. On the remaining businesses, aggregate trade marketing
and consumer coupon redemption expenses and slotting expenses decreased $12.0 million, the result of reduced new product launch activity and the related slotting expense. As a result, dry foods net sales increased $76.8 million, of which $62.0
million of the increase resulted from the sales of products related to the acquisition of the Armour business. The net sales of the remaining businesses increased $14.8 million, or 5.3%, for the three months ended June 25, 2006.

Cost of products sold. Our cost of products sold was $546.6 million, or 80.4% of net sales in the six months ended June 25, 2006, versus cost of
products sold of $508.0 million, or 82.7% of net sales in the six months ended June 26, 2005, a 2.3 percentage point improvement. The products acquired in the Armour business resulted in an additional $59.6 million of cost of products sold
in the six months ended June 25, 2006, including additional costs of $4.6 million related to post-acquisition sales of inventories written up to fair value at the date of the Armour acquisition. The principal driver of the improved cost of
product sold as a percent of net sales rate was a decline in aggregate trade marketing (including the slotting mentioned above) and consumer coupon redemption expenses that are classified as reductions to net sales. The change in these costs
accounted for 4.6 percentage points of the improvement. Unfavorable mix of products sold, resulting from reduced sales of higher margin products, accounted for the balance of the change.

Marketing and selling expenses. Marketing and selling expenses were $50.4 million, or 7.4% of net sales, in the six months ended June 25, 2006 compared to $53.0 million, or 8.6% of net sales, in the
six months ended June 26, 2005. The acquisition of the Armour business contributed $1.8 million of an increase for the six months ended June 25, 2006. The balance of the change was due to lower advertising expense of $8.0 million,
primarily in our Seafood and Duncan Hines businesses, the result of reduced new product introductions, and increased other consumer focused marketing programs of $3.0 million, primarily in the Vlasic and Swanson businesses.

Administrative expenses. Administrative expenses were $26.4 million in the six months ended June 25, 2006 compared to $22.5 million in the six
months ended June 26, 2005. The acquisition of the Armour business contributed $2.0 million of an increase for the six months ended June 25, 2006. Included in administrative expenses for the six months ended June 25, 2006 was $1.4
million for the non-cash stock compensation charge related to the ownership units of LLC issued to CDM in connection with the acquisition of the Armour Business recorded in the first quarter. Resumption of the management fees to JPMP and JWC in
accordance with Amendment No. 2 to our senior secured credit facilities, stock option expense in accordance with SFAS 123(R), and a series of smaller non-recurring items comprise the remainder of the increase.

Research and development expenses. Research and development expenses were $1.9 million, or 0.3% of net sales, in the six months ended June 25, 2006
compared with $2.0 million, or 0.3% of net sales, in the six months ended June 26, 2005.

Other expense (income), net. Other expense was
$4.8 million in the six months ended June 25, 2006 as compared to $4.9 million in the six months ended June 26, 2005. For the six months ended June 25, 2006, restructuring charges totaled $1.0 million and consisted of $0.9
million of costs related to the closure of our Erie, Pennsylvania frozen food facility, and $0.1 million of plant consolidation expense related to the closure of our Omaha, Nebraska frozen food facility, all of which are discussed above under Plant
Consolidation. For the six months ended June 26, 2005, restructuring and impairment charges totaled $2.6 million and consisted of $0.7 million of costs related to the closure of our Erie, Pennsylvania frozen food facility, a $0.9 million asset
impairment for the shutdown of a production line at our Mattoon, Illinois facility, and $1.0 million of plant consolidation expense related to the closure of our Omaha, Nebraska frozen food facility. In addition, for the six months ended
June 25, 2006, $1.2 million of amortization expense was incurred related to assets associated with the Armour acquisition. The remaining businesses incurred $2.4 million of amortization expense in both the six months ended June 25, 2006
and the six months ended June 26, 2005.

Earnings (loss) before interest and taxes. Earnings (loss) before interest and taxes (EBIT) increased
$25.4 million to $49.5 million in the six months ended June 25, 2006 from $24.1 million in EBIT in the six months ended June 26, 2005. This increase resulted from a $15.2 million increase in frozen foods EBIT and an
$11.1 million increase in dry foods EBIT, which were partially offset by a $0.9 million increase in unallocated corporate expenses.



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Frozen foods:Frozen foods EBIT increased by $15.2 million in the six months ended
June 25, 2006. In 2006, we recorded $0.6 million of accelerated depreciation expense and a charge of $0.9 million related to the plant consolidation expense from the closure of the Erie, Pennsylvania frozen foods facility. In 2005, we recorded
$5.8 million related to the plant consolidation expense from the closure of the Omaha, Nebraska ($0.9 million) and Erie, Pennsylvania ($0.7 million) frozen foods facilities, accelerated depreciation expense of $4.2 million related to Erie,
Pennsylvania, and a $0.9 million asset impairment write down for the shutdown of a production line at our Mattoon, Illinois facility. In addition, we booked $0.6 million related to lightweight product returns in the six months ended June 26,
2005. The balance of our frozen foods EBIT increased $9.3 million, principally driven by lower marketing spending in the first six months of 2006, mainly in slotting and trade marketing and consumer coupon redemption expense, which are recorded as
reductions from net sales, and lower advertising expense. Somewhat offsetting the declines in marketing spending, was the unfavorable impact of lower sales volumes and the unfavorable mix impact of a shift to lower margin product sales.

Dry foods:Dry foods EBIT increased $11.1 million in the six months ended June 25, 2006 and included a $2.6 million loss related to the
acquisition of the Armour business. The Armour results include the impact of the $4.6 million charge recorded in the six months ended June 25, 2006 related to post-acquisition sales of inventories written up to fair value at the date of the
acquisition. The balance of the dry foods EBIT increased $13.7 million, principally driven by $11.7 million lower marketing spending in the first quarter of 2006, mainly in slotting and consumer coupon redemption expense, which are recorded as
reductions from net sales. In addition, freight and storage costs decreased resulting from the reorganization of our warehousing network.

Interest
expense, net. Interest expense, net was $41.0 million in the six months ended June 25, 2006, compared to $34.9 million in the six months ended June 26, 2005. Included in the interest expense, net, amount was $1.3 million and
$1.4 million for the six months ended June 25, 2006 and the six months ended June 26, 2005 respectively, recorded from gains on interest rate swap agreements. We utilize interest rate swap agreements to reduce the potential exposure to
interest rate movements and to achieve a desired proportion of variable versus fixed rate debt. Any gains or losses realized on the interest rate swap agreements are recorded as an adjustment to interest expense. Excluding the impact of the interest
rate swaps, the increase in interest expense of $6.2 million was the result of higher interest rates on our bank borrowings ($5.1 million), higher amortization of debt issue costs resulting from the Armour Acquisition as well as the impact of our
prepayments of our bank borrowings.($0.6 million) higher average bank debt levels resulting from the borrowings to fund the Armour Acquisition ($0.4 million), and other ($0.1 million).

Provision for income taxes. The effective tax rate was 162.4% in the six months ended June 25, 2006, compared to -128.5% in the six months ended June 26, 2005. We maintain a full valuation
allowance against net deferred tax assets excluding indefinite lived intangible assets, and the effective rate difference is primarily due to the change in the valuation allowance for the six month period. Deferred tax liabilities are recognized for
the differences between the book and tax bases of certain goodwill and indefinite lived intangible assets.

Seasonality

We experience seasonality in our sales and cash flows. Sales of pickles, relishes and barbecue sauces tend to be higher in the spring and summer months and demand for
Duncan Hines products tends to be higher around the Easter, Thanksgiving and Christmas holidays. We pack the majority of our pickles during a season extending from May through September and also increase our Duncan Hines inventories at that time in
advance of the selling season. As a result, our inventory levels are highest during August, September and October, and thus we require more working capital during those months. We are a seasonal net user of cash in the third quarter of the calendar
year, which may require us to draw on the revolving credit commitments under our senior secured credit facilities.

LIQUIDITY AND CAPITAL RESOURCES

Historical

Our cash flows are very seasonal. Typically we are a net user of cash in the third quarter of the calendar year (i.e., the quarter ending in September) and a net
generator of cash over the balance of the year.

Our principal liquidity requirements have been, and we expect will be, for working capital and general
corporate purposes, including capital expenditures and debt service. Capital expenditures are expected to be approximately $27 million in 2006. We have historically satisfied our liquidity requirements with internally generated cash flows and
availability under our revolving credit facilities.



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Statements of cash flows for the six months ended June 25, 2006 compared to June 26, 2005

Net cash provided by operating activities was $61.0 million and $22.8 million for the six months ended June 25, 2006 and June 26, 2005, respectively. Net cash
provided by operating activities during the six months ended June 25, 2006 was the result of net earnings excluding non-cash earnings of $35.0 million and a decrease in working capital of $26.0 million. The decrease in working capital was
primarily the result of a $53.9 million decrease in inventories that was due to the sell down of the seasonal build from December 2005 and managements concerted effort to reduce the level of inventories while maintaining customer service
levels. The decrease in inventories was offset by a $36.1 million increase in accounts receivable that relates to higher sales principally related to the Armour acquisition as well as the timing of when those sales occurred. The aging of accounts
receivable has remained unchanged from December. All other working capital accounts generated $8.2 million of cash, primarily the result of higher accounts payable and accrued liabilities. Net cash provided by operating activities during the six
months ended June 26, 2005 was principally the result of $12.0 million of net earnings excluding non-cash items as well as a decrease in working capital. The decrease in working capital included a $39.1 million decrease in inventory that was a
result of the sell down of the seasonal build from December 2004. The cash provided by the reduction in inventory levels was offset by a $25.8 million decrease in accounts payable.

Net cash used in investing activities was $195.8 million and $10.1 million for the six months ended June 25, 2006 and June 26, 2005, respectively. Net cash used in investing activities during the six months
ended June 25, 2006 includes $186.9 million for consideration paid for the Armour Business and $8.9 million for capital expenditures. Net cash used in investing activities during the six months ended June 26, 2005 includes $12.3 million
for capital expenditures less $1.6 million received from the settlement of the working capital adjustment from the Pinnacle Merger as well as $0.6 million related to the sale of idle equipment from our Omaha facility.

Net cash provided by financing activities was $143.9 million during the six months ended June 25, 2006, which principally included proceeds to fund the acquisition
of the Armour Business. These proceeds included $143.0 million in proceeds from the senior secured credit facilities and $40.0 million in equity contributions. These proceeds were offset primarily by $30.0 million in repayments of the term loan,
$3.7 million in debt acquisition costs and $6.7 million decline in bank overdrafts. Net cash used by financing activities was $1.7 million for the six months ended June 26, 2005. The usage was driven primarily by the scheduled quarterly
payments of our senior term loan credit facility of $2.7 million and a $0.3 million decline in bank overdrafts. The usage was offset by borrowings of short term notes payable totaling $1.4 million (net).

The net of all activities resulted in an increase in cash of $9.2 million and $11.0 million during the six months ended June 25, 2006 and June 26, 2005,
respectively.

Debt

In November 2003, the Company
entered into a $675.0 million Credit Agreement (senior secured credit facilities) with JPMorgan Chase Bank (a related party of JPMP) and other financial institutions as lenders, which provides for a $545.0 million seven-year term loan B
facility, of which $120.0 million was made available on November 25, 2003 and $425.0 million was made available as a delayed draw term loan on the closing date of the Aurora Merger on March 19, 2004. Concurrently with the
acquisition of the Armour Business but effective as of February 14, 2006, the Company entered into an Amendment No. 4 and Agreement to the existing senior secured credit facilities (Amendment No. 4). Among other things,
Amendment No. 4 approved the acquisition and provided for the making of $143.0 million of additional tack-on term loans to fund a portion of the acquisition. The term loan matures November 25, 2010. The senior secured credit facilities
also provide for a six-year $130.0 million revolving credit facility, of which up to $65.0 million was made available on November 25, 2003, and the remaining $65.0 million was made available on the closing date of the Aurora Merger on
March 19, 2004. The revolving credit facility expires November 25, 2009. There were no borrowings outstanding under the revolver as of December 25, 2005 and June 25, 2006.

As of June 25, 2006, $2,927 of our term loan was owed to JPMorgan Chase Bank (a related party). There was no related party debt as of December 25, 2005.

Our borrowings under the senior secured credit facilities bear interest at a floating rate and are maintained as base rate loans or as Eurodollar loans.
Base rate loans bear interest at the base rate plus the applicable base rate margin, as defined in the senior secured credit facilities. Base rate is defined as the higher of (i) the prime rate and (ii) the Federal Reserve reported
overnight funds rate plus 1/2 of 1%. Eurodollar loans bear interest at the adjusted Eurodollar rate, as described in the senior secured credit facilities, plus the applicable Eurodollar rate margin.



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The applicable margins with respect to our revolving credit facility will vary from time to time in accordance with the
terms thereof and agreed upon pricing grids based on our leverage ratio as defined in our senior secured credit facilities. The applicable margin with respect to the term loan facility and the revolving credit facility, which was adjusted in
connection with the June 2, 2004 amendment discussed below, is currently:



| |  | In the case of base rate loans: 1.00% for the term loan and 2.25% for the revolving credit facility.
|- |  | ----------------------------------------------------------------------------------------------------



| |  | In the case of Eurodollar loans: 2.00% for the term loan and 3.25% for the revolving credit facility.
|- |  | -----------------------------------------------------------------------------------------------------

The range of margins for the revolving credit facility is:



| |  | In the case of base rate loans: 1.75% to 2.25%.
|- |  | -----------------------------------------------



| |  | In the case of Eurodollar loans: 2.75% to 3.25%.
|- |  | ------------------------------------------------

A commitment fee of
0.50% per annum applies to the unused portion of the revolving loan facility. For the three and six months ended June 25, 2006, the weighted average interest rate on the term loan was 7.89% and 7.82%, respectively. For the six months ended
June 25, 2006, the weighted average interest rate on the revolving credit facility was 9.62%. There were no borrowings under the revolving credit facility during the three months ended June 25, 2006. As of June 25, 2006, the
Eurodollar interest rate on the term loan facility was 7.10% and the commitment fee on the undrawn revolving credit facility was 0.50%. For the three and six months ended June 26, 2005, the weighted average interest rate on the term loan was
6.33% and 6.02%, respectively. For the six months ended June 26, 2005, the weighted average interest rate on the revolving credit facility was 6.25%. There were no borrowings under the revolving credit facility during the three months ended
June 26, 2005. As of June 26, 2005, the Eurodollar interest rate on the term loan facility was 6.35% and the commitment fee on the undrawn revolving credit facility was 0.50%.

In April and June 2006, we prepaid $15 million and $15 million, respectively, of the term loan facility. Due to the prepayments, the next scheduled installment payable will be in March 2010. The revolving credit
facility terminates on November 25, 2009. The aggregate maturities of the term loan outstanding as of June 25, 2006 are $601.2 million in 2010.

The obligations under the senior secured credit facilities are unconditionally and irrevocably guaranteed by each of our direct or indirect domestic subsidiaries (collectively, the Guarantors). In addition, the senior secured
credit facilities are collateralized by first priority or equivalent security interests in (i) all the capital stock of, or other equity interests in, each direct or indirect domestic subsidiary of the Company and 65% of the capital stock of,
or other equity interests in, each direct foreign subsidiary of the Company, or any of its domestic subsidiaries and (ii) certain tangible and intangible assets of the Company and the Guarantors (subject to certain exceptions and
qualifications).

We pay a commission on the face amount of all outstanding letters of credit drawn under the senior secured credit facilities at a per
annum rate equal to the Applicable Margin then in effect with respect to Eurodollar loans under the revolving credit loan facility minus the fronting fee (as defined). A fronting fee equal to 1/4% per annum on the face amount of each letter of
credit is payable quarterly in arrears to the issuing lender for its own account. We also pay a per annum fee equal to 1/2% on the undrawn portion of the commitments in respect of the revolving credit facility. Total letters of credit issuable under
the facilities cannot exceed $40 million. As of December 25, 2005 and June 25, 2006, we had utilized $11.5 million and $12.7 million, respectively, of the revolving credit facility for letters of credit. Of the $130 million revolving
credit facility available, as of December 25, 2005 and June 25, 2006, we had an unused balance of $118.5 million and $117.3 million, respectively, available for future borrowings and letters of credit, of which a maximum of $28.5 million
and $27.3 million, respectively, may be used for letters of credit.

In November 2003 and February 2004, we issued $200.0 million and $194.0 million,
respectively, 81/4% senior subordinated notes. The February 2004 notes resulted in gross proceeds of $201.0
million, including premium. The terms of the February 2004 notes are the same as the November 2003 notes and are issued under the same indenture. The notes are general unsecured obligations of the Company, subordinated in right of payment to all
existing and future senior indebtedness of the Company, and guaranteed on a full, unconditional, joint and several basis by the Companys wholly-owned domestic subsidiaries.



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We may redeem all or a portion of the notes prior to December 1, 2008, at a price equal to 100% of the principal
amount of the notes plus a make-whole premium (the greater of: (1) 1% of the then outstanding principal amount of the note; and (2) the excess of: (a) the present value at such redemption date of (i) the redemption
price of the note at December 1, 2008 plus (ii) all required interest payments due on the note through December 1, 2008, computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over
(b) the then outstanding principal amount of the note, if greater). On or after December 1, 2008, we may redeem some or all of the notes at the redemption prices listed below, if redeemed during the twelve-month period beginning on
December 1 of the years indicated below:



|                    |  |            |  
|------------------- |  | ---------- | -
|Year                |  | Percentage |  
|2008                |  | 104.125    | %
|2009                |  | 102.750    | %
|2010                |  | 101.375    | %
|2011 and thereafter |  | 100.000    | %

At any time prior to December 1, 2006, we may redeem up to 35% of the original aggregate principal amount of
the notes with the net cash proceeds of certain equity offerings at a redemption price equal to 108.250% of the principal amount thereof, plus accrued and unpaid interest, so long as (a) at least 65% of the original aggregate amount of the
notes remains outstanding after each such redemption and (b) any such redemption by us is made within 90 days of such equity offering.

If a change of
control occurs (as defined in the indenture pursuant to which the notes were issued), and unless we have exercised our right to redeem all of the notes as described above, the note holders will have the right to require the Company to repurchase all
or a portion of the notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of repurchase.

The notes include a provision that the Company will file with the SEC on or prior to August 21, 2004 a registration statement relating to an offer to exchange the notes for an issue of SEC-registered notes with terms identical to the
notes and use its reasonable best effort to cause such registration statement to become effective on or prior to October 20, 2004. Since the exchange offer was not completed before November 19, 2004, the annual interest rate borne by the
notes increased by 1.0% per annum until the exchange offer was completed, which occurred on February 1, 2005. As of this date, the Company was no longer paying the additional interest.

Our senior secured credit facilities and the notes contain a number of covenants that, among other things, limit, subject to certain exceptions, our ability to incur
additional liens and indebtedness, make capital expenditures, engage in certain transactions with affiliates, repay other indebtedness (including the notes), make certain distributions, make acquisitions and investments, loans or advances, engage in
mergers or consolidations, liquidations and dissolutions and joint ventures, sell assets, make dividends, amend certain material agreements governing our indebtedness, enter into guarantees and other contingent obligations and other matters
customarily restricted in similar agreements. In addition to scheduled periodic repayments, we are also required to make mandatory repayments of the loans under the senior secured credit facilities with a portion of its excess cash flow, as defined.
Due to voluntary prepayments of the term loan made by the Company in 2005, the Company was not required to make any mandatory prepayments for 2005. In addition, our senior secured credit facilities contain, among others, the following financial
covenants: a maximum total leverage ratio, a minimum interest coverage ratio and a maximum capital expenditure limitation. See the discussion below regarding the amendment to the senior credit agreement where these covenants have been adjusted.

Amendments to Senior Secured Credit Facilities

On September 14, 2004, we were first in default under our senior secured credit facilities. On November 19, 2004 we received required lender approval to permanently waive the defaults mentioned above and
amend the financial covenants for future reporting periods. The terms of the permanent amendment and waiver included among other items, a 50 basis point increase to the applicable margin (described above), the addition of a new senior covenant
leverage ratio through December 2005, amendment of the interest expense coverage ratio through December 2005, suspension of the maximum total leverage ratio until March 2006, and certain limitations, restrictions and additional reporting
requirements during the amendment period which ends on the second business day following the date on which we deliver to the Administrative Agent financial statements for the fiscal quarter ending March 2006, which occurred on May 10, 2006.



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In connection with Amendment No. 4 dated February 14, 2006, the senior secured credit facilities were also
changed in other respects, including: (a) the leverage ratio calculations have been adjusted such that the amount of indebtedness used in such calculations is no longer subject to averaging and is reduced by certain cash and cash equivalents,
(b) the leverage ratio threshold for the quarter ending on or about March 31, 2006 has been changed from 5.00 to 1.00 to 5.25 to 1.00, and (c) under certain circumstances, we may be able to use equity contributions to cure financial
covenant defaults, if any, that may occur in the future under the senior secured credit facilities.

On June 2, 2006, we entered into Amendment
No. 5, which amended the senior credit facilities in the following manner: (a) to reduce the applicable margin with respect to any Term Loan to (i) 1.00% per annum, in the case of an ABR Loan or (ii) 2.00% per annum, in
the case of a Eurodollar Loan, (b) to require the payment of certain fees in connection with repricings of the Term Loans on or prior to June 2, 2007 and (c) to permit additional Indebtedness in an aggregate principal amount of up to
$15,000,000 arising from letters of credit issued other than pursuant to the Credit Agreement.

As of June 25, 2006, we were in compliance with the
amended and added covenants as discussed above. Based on current estimates, we believe that we will meet the financial targets set forth above and, as such, will maintain compliance with debt covenant requirements for at least the next 12 months

INFLATION

Prior to 2005, inflation has not had a significant effect on us as we have been successful in
mitigating the effects of inflation with aggressive cost reduction and productivity programs. In 2005 and 2006, we experienced higher energy and commodity costs in production and higher fuel surcharges for product delivery. Although we have no such
expectation, severe increases in inflation, however, could affect the North American economies and could have an adverse impact on our business, financial condition and results of operations.

SIGNIFICANT ACCOUNTING ESTIMATES

The consolidated financial statements of the
company are prepared in conformity with accounting principles generally accepted in the United States. The preparation of these financial statements requires the use of estimates, judgments and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates and assumptions. The significant accounting policies of the Company
are described in Note 2 to the Consolidated Financial Statements and the significant accounting estimates are described in Managements Discussion and Analysis included in the 2005 Annual Report on Form 10-K. Other than the accounting for
stock-based compensation, which is discussed below, there have been no other changes in the Companys accounting policies in the current period that had a material impact on the Companys consolidated financial condition or results of
operations.

Stock-based Compensation

We adopted SFAS
123(R) using the modified prospective transition method, which requires the application of the accounting standard as of December 26, 2005, the first day of our fiscal year 2006. Our Consolidated Financial Statements as of and for the six
months ended June 25, 2006 reflect the impact of SFAS 123(R). In accordance with the modified prospective transition method, our Consolidated Financial Statements for prior periods have not been restated to reflect, and do not include the
impact of SFAS 123(R). Stock-based compensation expense related to employee stock options for the six months ended June 25, 2006 as a result of adopting SFAS 123(R) was $600, $596 net of tax. In addition, we recorded $1,415 (with no related tax
impact) for stock-based compensation expense for the six months ended June 25, 2006 for certain ownership units of LLC that were issued to CDM, which is controlled by certain members of PFGIs management (see discussion below). There was
no stock-based compensation expense recognized during the six months ended June 26, 2005.

SFAS 123(R) requires companies to estimate the fair value
of stock-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense using the straight-line method over the requisite service periods in
our Consolidated Statement of Operations. Prior to the adoption of SFAS 123(R), we accounted for stock-based awards to employees and directors using the intrinsic value method in accordance with APB 25 as allowed under Statement of Financial
Accounting Standards No. 123, Accounting for Stock-Based Compensation (SFAS 123). Under the intrinsic value method, no stock-based compensation expense had been recognized in our Consolidated Statement of Operations,
other than as related to certain ownership units of LLC that were issued to CDM Investor Group LLC.



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We continue to use the lattice-binomial option-pricing model (lattice-binomial model) as its method of
valuation for stock-based awards, which was previously used for our pro forma information required under SFAS 123. Since our stock is not publicly traded, the determination of fair value of stock-based payment awards on the date of grant using an
option-pricing model is based upon estimates of enterprise value as well as assumptions regarding a number of highly complex and subjective variables. The estimated enterprise value is based upon forecasted cash flows for six years plus a terminal
year and an assumed discount rate. The other variables used to determine fair value of stock-based payment awards include, but are not limited to the expected stock price volatility of a group of industry comparable companies over the term of the
awards, and actual and projected employee stock option exercise behaviors. Option-pricing models were developed for use in estimating the value of traded options that have no vesting or hedging restrictions and are fully transferable. Because our
employee stock options have certain characteristics that are significantly different from traded options, and because changes in the subjective assumptions can materially affect the estimated value, in managements opinion, the existing
valuation models may not provide an accurate measure of the fair value of our employee stock options. Although the fair value of employee stock options is determined in accordance with SFAS 123(R) and Securities and Exchange Commission Staff
Accounting Bulletin No. 107 (SAB 107) using an option-pricing model, that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In July 2006, the FASB
issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes: An interpretation of FASB Statement No. 109. This interpretation clarifies FASB Statement 109, Accounting for Income Taxes, to indicate a criterion
that an individual tax position would have to meet for some or all of the benefit of that position to be recognized in an entitys financial statements. The provisions of this interpretation are effective for fiscal years beginning after
December 15, 2006. The Company is assessing what impact, if any, adoption of this statement would have on its financial statements.



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ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

FINANCIAL INSTRUMENTS

We utilize derivative financial instruments to enhance our ability to manage risks, including interest rate, commodities and foreign currency, which
exist as part of ongoing business operations. We do not enter into contracts for speculative purposes, nor are we a party to any leveraged derivative instrument. We monitor the use of derivative financial instruments through regular communication
with senior management and the utilization of written guidelines.

We rely primarily on bank borrowings to meet our funding requirements. We utilize
interest rate swap agreements or other derivative instruments to reduce the potential exposure to interest rate movements and to achieve a desired proportion of variable versus fixed rate debt. We will recognize the amounts that we pay or receive on
hedges related to debt as an adjustment to interest expense.

We have entered into interest rate swap agreements with counterparties, including JP Morgan
Chase Bank (a related party), to effectively change a portion of the floating rate payments on our senior secured credit facilities into fixed rate payments. As of June 25, 2006, two swap agreement remains outstanding. The two swap agreements
terminate on January 2, 2007 and November 25, 2009 and have notional amounts of $250.0 million and $450.0 million, respectively. Interest payments determined under the swap agreement are based on the notional amounts. Floating interest
rate payments to be received under each swap are based on U.S. Dollar LIBOR, which is the same basis for determining the floating rate payments on the senior secured credit facilities.

The swap was not designated as a hedge pursuant to SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. As of December 25,
2005 and June 25, 2006, the fair value of the interest rate swap contract was a gain of $2,422 and $3,266, respectively. The interest rate swap contracts were recorded in Other assets in the Consolidated Balance Sheet as of December 25,
2005. As of June 25, 2006, the interest rate swap contracts were recorded in Other current assets ($3,064) and Other assets ($202) in the Consolidated Balance Sheet. Gains and losses on the interest rate swaps, which were recorded as an
adjustment to interest expense in the Consolidated Statement of Operations, for the three and six months ended June 25, 2006 and June 26, 2005 are detailed below.



|                                       |              |                    |              |  |                  |              |   |              |   |       |  |   |      
|-------------------------------------- | ------------ | ------------------ | ------------ |  | ---------------- | ------------ | - | ------------ | - | ----- |  | - | -----
|Interest rate swaps                    |              | Three months ended |              |  | Six months ended
|                                       | June 25,2006 |                    | June 26,2005 |  |                  | June 25,2006 |   | June 26,2005
|Non-cash gain (loss)                   |              | $                  | 355          |  | $                | (2,882       | ) |              | $ | 844   |  | $ | 879  
|Gain (loss) realized in cash           |              |                    | 488          |  |                  | 337          |   |              |   | 488   |  |   | 561  
|                                       |              |                    |              |  |                  |              |   |              |   |       |  |   |      
|Net gain (loss) on interest rate swaps |              | $                  | 843          |  | $                | (2,545       | ) |              | $ | 1,332 |  | $ | 1,440
|                                       |              |                    |              |  |                  |              |   |              |   |       |  |   |      

We have entered into various natural gas swap transactions with JP Morgan Chase Bank (a related party) to lower
our exposure to the price of natural gas. As of June 25, 2006, the trades in effect mature from July through December 2006 and have various notional quantities of MMBTUs per month. We will pay a fixed price ranging from $6.56 to
$10.95 per MMBTU, with settlements monthly. These swaps were not designed as hedges pursuant to SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities.

As of December 25, 2005 and June 25, 2006, the fair value of the natural gas swap contracts was a gain of $8 and a loss of $381, respectively, which is
recorded in Other current assets (as of December 25, 2005) and Accrued liabilities (as of June 26, 2006) in the Consolidated Balance Sheet. Gains and losses on the natural gas swaps, which were recorded as a component of cost of products
sold in the Consolidated Statement of Operations, for the three and six months ended June 25, 2006 and June 26, 2005 are detailed below.



|                                     |              |                    |      |              |                  |   |              |   |  |              |        |   |  |   |     |  
|------------------------------------ | ------------ | ------------------ | ---- | ------------ | ---------------- | - | ------------ | - |  | ------------ | ------ | - |  | - | --- | -
|Natural gas swaps                    |              | Three months ended |      |              | Six months ended |  
|                                     | June 25,2006 |                    |      | June 26,2005 |                  |   | June 25,2006 |   |  | June 26,2005 |       
|Non-cash gain (loss)                 |              | $                  | 30   |              |                  | $ | (114         | ) |  | $            | (389   | ) |  | $ | 175 |  
|Gain (loss) realized in cash         |              |                    | (300 | )            |                  |   | 67           |   |  |              | (670   | ) |  |   | (12 | )
|                                     |              |                    |      |              |                  |   |              |   |  |              |        |   |  |   |     |  
|Net gain (loss) on natural gas swaps |              | $                  | (270 | )            |                  | $ | (47          | ) |  | $            | (1,059 | ) |  | $ | 163 |  
|                                     |              |                    |      |              |                  |   |              |   |  |              |        |   |  |   |     |  



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We have entered into various foreign currency exchange transactions with JP Morgan Chase Bank (a related party) to lower
our exposure to the exchange rate between the U.S. and Canadian dollar. Each agreement is based upon a notional amount in Canadian dollars, which is expected to approximate a portion of the amount of our Canadian subsidiarys U.S. dollar
denominated purchases for the month. The trades outstanding as of June 25, 2006 run through December 2006. We will pay a fixed exchange rate of 1.1673 Canadian dollars per U.S. dollar, with settlements monthly. This swap was not designed as a
hedge pursuant to SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities.

As of December 25, 2005 and
June 25, 2006, the fair value of the foreign currency exchange contracts was a loss of $280 and $554, respectively, which is recorded in Accrued liabilities in the Consolidated Balance Sheet. Gains and losses on the foreign currency exchange
contracts, which were recorded as a component of cost of products sold in the Consolidated Statement of Operations, for the three and six months ended June 25, 2006 and June 26, 2005 are detailed below.



|                                                       |              |                    |      |                  |  |              |     |  |              |      |   |  |   |    
|------------------------------------------------------ | ------------ | ------------------ | ---- | ---------------- |  | ------------ | --- |  | ------------ | ---- | - |  | - | ---
|Foreign currency exhange contracts                     |              | Three months ended |      | Six months ended
|                                                       | June 25,2006 |                    |      | June 26,2005     |  | June 25,2006 |     |  | June 26,2005
|Non-cash gain (loss)                                   |              | $                  | (372 | )                |  | $            | 113 |  | $            | (273 | ) |  | $ | 208
|Gain (loss) realized in cash                           |              |                    | (225 | )                |  |              | 161 |  |              | (225 | ) |  |   | 169
|                                                       |              |                    |      |                  |  |              |     |  |              |      |   |  |   |    
|Net gain (loss) on foreign currency exchange contracts |              | $                  | (597 | )                |  | $            | 274 |  | $            | (498 | ) |  | $ | 377
|                                                       |              |                    |      |                  |  |              |     |  |              |      |   |  |   |    

We utilize irrevocable standby letters of credit with one-year renewable terms to satisfy workers
compensation self-insurance security deposit requirements. The contract value of the outstanding standby letter of credit as of December 25, 2005 and June 25, 2006 was $7.2 million and $7.9 million, respectively, which approximates fair
value. As of December 25, 2005 and June 25, 2006, we also utilized letters of credit in connection with the purchase of raw materials in the amount of $4.3 million and $4.8 million, which approximates fair value.

We are exposed to credit loss in the event of non-performance by the other parties to derivative financial instruments. All counterparties are at least A
rated by Moodys and Standard & Poors. Accordingly, we do not anticipate non-performance by the counterparties.

The carrying values of
cash and cash equivalents, accounts receivable and accounts payable approximate fair value. The estimated fair value of the senior secured credit facilities bank debt and the 8 1/4% senior subordinated notes that are classified as long term debt on the Consolidated Balance Sheet at June 25, 2006, was approximately its carrying
value.

RAW MATERIALS, INGREDIENTS, PACKAGING AND
PRODUCTION COSTS

We purchase agricultural products, meat, poultry, other raw materials and packaging supplies from
growers, commodity processors, other food companies and packaging manufacturers using a combination of purchase orders and various short- and long-term supply arrangements.

We have entered into various natural gas swap transactions with JP Morgan Chase Bank (a related party) to lower our exposure to the price of natural gas. As of June 25, 2006, the trades in effect mature from
July through December 2006 and have various notional quantities of MMBTUs per month. We will pay a fixed price ranging from $6.56 to $10.95 per MMBTU, with settlements monthly. These swaps were not designed as a hedge pursuant to
SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities.

As of December 25, 2005 and June 25, 2006, the fair
value of the natural gas swap contracts was a gain of $8 and a loss of $381, respectively, which is recorded in Other current assets (as of December 25, 2005) and Accrued liabilities (as of June 26, 2006) in the Consolidated Balance Sheet.
Gains and losses on the natural gas swaps, which were recorded as a component of cost of products sold in the Consolidated Statement of Operations, for the three and six months ended June 25, 2006 and June 26, 2005 are detailed below.



|                                     |              |                    |      |              |                  |   |              |   |  |              |        |   |  |   |     |  
|------------------------------------ | ------------ | ------------------ | ---- | ------------ | ---------------- | - | ------------ | - |  | ------------ | ------ | - |  | - | --- | -
|Natural gas swaps                    |              | Three months ended |      |              | Six months ended |  
|                                     | June 25,2006 |                    |      | June 26,2005 |                  |   | June 25,2006 |   |  | June 26,2005 |       
|Non-cash gain (loss)                 |              | $                  | 30   |              |                  | $ | (114         | ) |  | $            | (389   | ) |  | $ | 175 |  
|Gain (loss) realized in cash         |              |                    | (300 | )            |                  |   | 67           |   |  |              | (670   | ) |  |   | (12 | )
|                                     |              |                    |      |              |                  |   |              |   |  |              |        |   |  |   |     |  
|Net gain (loss) on natural gas swaps |              | $                  | (270 | )            |                  | $ | (47          | ) |  | $            | (1,059 | ) |  | $ | 163 |  
|                                     |              |                    |      |              |                  |   |              |   |  |              |        |   |  |   |     |  

While all of our materials are available from numerous independent suppliers, raw materials are subject to
fluctuations in price attributable to a number of factors, including changes in crop size, federal and state agricultural programs, export demand, weather conditions during the growing and harvesting seasons, insects, plant diseases and fungi.
Although we enter into advance commodities purchase agreements from time to time, increases in raw material costs could have a material adverse effect on our business, financial condition or results of operations. We do not engage in speculative
transactions nor hold or issue financial instruments for trading purposes.



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ITEM 4: CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed by us in our reports that we file or submit under the Exchange Act (as defined in Rule 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)) is recorded, processed,
summarized and reported within the time periods specified in the SECs rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to our management, including our Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance of
achieving the desired control objectives. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of
June 25, 2006. Based upon that evaluation and subject to the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that the design and operation of our disclosure controls and procedures are effective.

In addition, there was no change in our internal control over financial reporting (as defined in Rule 15d-15(f) of the Exchange Act) that occurred during the fiscal
quarter ended June 25, 2006 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



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PART II  OTHER INFORMATION

ITEM 1: LEGAL PROCEEDINGS

EMPLOYEE LITIGATIONINDEMNIFICATION
OF US COLD STORAGE

On March 21, 2002, an employee at the Omaha, Nebraska facility died as the result
of an accident while operating a forklift at a warehouse facility that we leased. OSHA conducted a full investigation and determined that the death was the result of an accident and found no violations by us. On March 18, 2004, the estate of
the deceased filed suit in District Court of Sarpy County, Nebraska, Case No: CI 04-391, against us, the owner of the forklift and the leased warehouse, the manufacturer of the forklift and the distributor of the forklift. We, having been the
deceaseds employer, were named as a defendant for workers compensation subrogation purposes only.

On May 18, 2004, we received notice
from defendant, US Cold Storage, the owner of the leased warehouse, requesting that we accept the tender of defense for US Cold Storage in this case in accordance with the indemnification provision of the warehouse lease. The request has been
submitted to our insurance carrier for evaluation and we have been advised that the indemnification provision is not applicable in this matter and that we should have no liability under that provision. Therefore, we believe that resolution of such
matters will not result in a material impact on our financial condition, results of operations or cash flows.

R2 APPEAL
IN AURORA BANKRUPTCY

Prior to its bankruptcy filing, Aurora entered into an agreement with its prepetition
lending group compromising the amount of certain fees due under its senior bank facilities (the October Amendment). One of the members of the bank group (R2 Top Hat, Ltd.) challenged the enforceability of the October
Amendment during Auroras bankruptcy by filing an adversary proceeding in U.S. Bankruptcy Court, District of Delaware, and by objecting to confirmation. The Bankruptcy Court rejected the lenders argument and confirmed Auroras plan
of reorganization. The lender then appealed from those orders of the Bankruptcy Court. It is too early to predict the outcome of the appeals. Included in our recorded accrued liabilities is $20 million for this claim, which was assumed by us in the
Aurora Merger.

STATE OF ILLINOIS V. CITY OF
ST. ELMO AND AURORA FOODS INC.

We are a defendant in an
action filed by the State of Illinois regarding our St. Elmo facility. Prior to the Aurora Merger, the Illinois Attorney General filed a complaint in County Court, Fayette County, Illinois seeking a restraining order prohibiting further discharges
by the City of St. Elmo from its publicly owned wastewater treatment facility in violation of Illinois law and enjoining us from discharging our industrial waste into the Citys treatment facility. The complaint also asked for fines and
penalties associated with the Citys discharge from its treatment facility and our alleged operation of our production facility without obtaining a state environmental operating permit.

On August 30, 2004, an Interim Consent Order signed by all parties was signed and entered by the judge in the case whereby, in addition to a number of actions
required of the City, we agreed to provide monthly discharge monitoring reports to the Illinois Environmental Protection Agency for six months and were allowed to continue discharging effluent to the City of St. Elmo. In September 2004, we met with
representatives from the State of Illinois Environmental Protection Agency and the State Attorney Generals Office and separately with the City of St. Elmo to inform them that we intended to install a pre-treatment system at our St. Elmo
facility during the fourth quarter of 2004 and first quarter of 2005. The State issued the construction and operating permits to us and construction of the pre-treatment system has been completed. Testing has been completed and the system is fully
operational.

The State Attorney General had originally proposed a penalty of $168,400 together with a consent decree. We responded listing the actions we
had taken and related costs since merging with Aurora. We contend that there should not be any fine or penalty. On February 24, 2006, the State Attorney General advised us that its office would be willing to accept $110,000 as penalty, together
with a consent decree. A status conference with the partys attorneys and the Judge was held on May 2, 2006. The Joint Discovery Schedule required by the Judge has been prepared by the parties and filed with the court and is awaiting the
Judges signature. As the Company believes no penalty will ultimately be due, a liability has not been accrued at June 25, 2006.

We continue to
discharge our effluent to the City. We would vigorously defend any future effort to prevent us from discharging our industrial wastewater to the City. Although we believe we will be able to resolve this matter favorably, an adverse resolution may
have a material impact on our financial position, results of operation, or cash flows.



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AMERICAN COLD STORAGE  NORTH AMERICA,
L/P. V. P.F. DISTRIBUTION, LLC AND PINNACLE FOODS GROUP INC.

On June 26, 2005 we were served with a Summons and Complaint in the above matter, which was filed in the Circuit Court of Madison County, Tennessee. American Cold Storage (ACS) operates a frozen
storage warehouse and distribution facility (the Facility) located in Madison County, Tennessee, near our Jackson, Tennessee plant. In approximately April 2004, we entered into discussions with ACS to utilize the Facility. Terms were
discussed, but no contract was ever signed. Shortly after shipping product to the Facility, we discovered that the Facility was incapable of properly handling the discussed volume of product and began reducing our shipments to the Facility. The
original complaint seeks damages not to exceed $1.5 million, together with associated costs. On May 3, 2006 our attorney received notice from counsel for ACS that it was increasing its damage claim in the suit from $1.5 million to $5.5 million.
ACS will be required to provide specifics justifying the increase through ongoing discovery and the deposition of the President of ACS which was previously scheduled. It is too early to determine the likely outcome of this litigation. The discovery
phase of the case has begun and we intend to vigorously defend against this claim. We believe that resolution of such matters will not have a material impact on our financial condition, results of operations or cash flows.



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ITEM 1A: RISK FACTORS

There have been no material changes from risk factors previously disclosed in our Annual Report on
Form 10-K for the year ended December 25, 2005.

ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3: DEFAULTS UPON SENIOR SECURITIES

None

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

None

ITEM 5: OTHER INFORMATION

None

ITEM 6: EXHIBITS



|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description of exhibit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|2.1           |  | Agreement and Plan of Reorganization and Merger, by and between, Aurora Foods Inc. and Crunch Equity Holding, LLC, dated as of November 25, 2003 (previously filed as Exhibit 2.1 to the
registrants Registration Statement on Form S-4 filed with the SEC on August 20, 2004, and incorporated herein by reference).                                                                                                                                                                                                                          
|              | 
|2.2           |  | Amendment No. 1, dated January 8, 2004, to the Agreement and Plan of Reorganization and Merger, by and between, Aurora Foods Inc. and Crunch Equity Holding, LLC, dated as of November 25, 2003
(previously filed as Exhibit 2.2 to the registrants Registration Statement on Form S-4 filed with the SEC on August 20, 2004, and incorporated herein by reference).                                                                                                                                                                           
|              | 
|2.3           |  | Agreement and Plan of Merger, dated March 19, 2004, between Aurora Foods Inc. and Pinnacle Foods Holding Corporation (previously filed as Exhibit 2.3 to the registrants Registration
Statement on Form S-4 filed with the SEC on August 20, 2004, and incorporated herein by reference).                                                                                                                                                                                                                                                      
|              | 
|2.4           |  | Asset Purchase Agreement, dated March 1, 2006, by and between The Dial Corporation and Pinnacle Foods Group Inc. (previously filed as Exhibit 10.1 to the registrants Current Report on
Form 8-K filed with the SEC on March 1, 2006, and incorporated herein by reference).                                                                                                                                                                                                                                                                   
|              | 
|3.1           |  | First Amended and Restated Certificate of Incorporation of Aurora Foods Inc., dated March 19, 2004 (previously filed as Exhibit 3.1 to the registrants Registration Statement on Form S-4
filed with the SEC on August 20, 2004, and incorporated herein by reference).                                                                                                                                                                                                                                                                        
|              | 
|3.2           |  | Aurora Foods Inc. Amended and Restated Bylaws, as adopted on March 19, 2004 (previously filed as Exhibit 3.2 to the registrants Registration Statement on Form S-4 filed with the SEC on
August 20, 2004, and incorporated herein by reference).                                                                                                                                                                                                                                                                                               
|              | 
|4.1           |  | Indenture dated November 25, 2003, among Pinnacle Foods Holding Corporation; Pinnacle Foods Corporation; PF Sales, LLC; PF Distribution, LLC; Pinnacle Foods Brands Corporation; PF Standards
Corporation; Pinnacle Foods Management Corporation, PF Sales (N. Central Region) Corp. and Wilmington Trust Company (previously filed as Exhibit 4.1 to the registrants Registration Statement on Form S-4 filed with the SEC on August 20, 2004,
and incorporated herein by reference).                                                         
|              | 
|4.2           |  | Supplemental Indenture dated as of March 19, 2004 among Aurora Foods Inc., Sea Coast Foods, Inc., Pinnacle Foods Holding Corporation; Pinnacle Foods Corporation; PF Sales, LLC; PF
Distribution, LLC; Pinnacle Foods Brands Corporation; PF Standards Corporation; Pinnacle Foods Management Corporation, PF Sales (N. Central Region) Corp. and Wilmington Trust Company (previously filed as Exhibit 4.2 to the registrants
Registration Statement on Form S-4 filed with the SEC on August 20, 2004, and incorporated herein by reference).



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|     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.3  |  | Exchange and Registration Rights Agreement, dated as of November 25, 2003, between J.P. Morgan Securities Inc.; Deutsche Bank Securities Inc.; Pinnacle Foods Holding Corporation;
Pinnacle Foods Corporation; PF Sales, LLC; PF Distribution, LLC; Pinnacle Foods Brands Corporation; PF Standards Corporation; Pinnacle Foods Management Corporation and PF Sales (N. Central Region) Corp. (previously filed as Exhibit 4.3 to the
registrants Registration Statement on Form S-4 filed with the SEC on August 20, 2004, and incorporated herein by reference).                                                      
|     | 
|10.1 |  | Amendment No. 5 dated as of June 2, 2006, to the Credit Agreement dated as of November 25, 2003 among Crunch Holding Corp., Pinnacle Foods Group Inc., the Lenders from time to time party
thereto, Deutsche Bank Trust Company Americas, as administrative agent, General Electric Capital Corporation, as syndication agent, and JPMorgan Chase Bank, N.A., Citicorp North America, Inc. and Canadian Imperial Bank of Commerce, as
co-documentation agents (previously filed as Exhibit 10.1 to the registrants Current Report on Form 8-K filed with the SEC on June 7, 2006, and incorporated herein by reference).
|     | 
|10.2 |  | Employment Agreement dated June 12, 2006 between Pinnacle Foods Group Inc. and Jeffrey P. Ansell                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|     | 
|31.1 |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | 
|31.2 |  | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     | 
|32.1 |  | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (A)                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     | 
|32.2 |  | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (A)                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

---

|(A) | Pursuant to Commission Release No. 33-8212, this certification will be treated as accompanying this Form 10-Q and not filed as part of such
report for purposes of Section 18 of Exchange Act, or otherwise subject to the liability of Section 18 of the Exchange Act and this certification will not be deemed to be incorporated by reference into any filing under the Securities Act
of 1933, as amended, or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.

PINNACLE FOODS GROUP
INC.



|       |  |                                                                                                                     
|------ |  | --------------------------------------------------------------------------------------------------------------------
|By:    |  | /s/ N. MICHAEL DION                                                                                                 
|Name:  |  | N. Michael Dion                                                                                                     
|Title: |  | Executive Vice President and Chief Financial Officer,                                                               
|       |  | (acting in both his capacity as authorized signatory on behalf of the registrant and as principal financial officer)
|       | 
|Date:  |  | August 8, 2006                                                                                                      



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