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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K



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

For the fiscal year ended December 31, 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

Pinnacle Foods Group Inc.

(Exact name of registrant as specified in its charter)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 94-3303521                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|1 Old Bloomfield Avenue Mt. Lakes, New Jersey                  |  | 07046                               
|(Address of Principal Executive Offices)                       |  | (Zip Code)                          

Registrants telephone number, including area code: (973) 541-6620

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to section 12(g) of the Act: None

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ̈No  þ

Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ̈No  þ

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  þ    No ̈

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

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  þ

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  þ

State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the Registrants most recently completed second
fiscal quarter.

Not applicable.

As of
March 5, 2007, there were outstanding 100 shares of common stock, par value $0.01 per share, of the Registrant.

Documents incorporated by reference

None



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TABLE OF CONTENTS

FORM 10-K



|         |  |                                                                                                              |  |         
|-------- |  | ------------------------------------------------------------------------------------------------------------ |  | --------
|         |  |                                                                                                              |  | Page No.
|PART I   |  |                                                                                                              |  | 1       
|         |  |                                                                                                             
|ITEM 1.  |  | BUSINESS                                                                                                     |  | 1       
|ITEM 1A. |  | RISK FACTORS                                                                                                 |  | 10      
|ITEM 1B. |  | UNRESOLVED STAFF COMMENTS                                                                                    |  | 14      
|ITEM 2.  |  | PROPERTIES                                                                                                   |  | 15      
|ITEM 3.  |  | LEGAL PROCEEDINGS                                                                                            |  | 16      
|ITEM 4.  |  | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                          |  | 17      
|         |  |                                                                                                             
|PART II  |  |                                                                                                              |  | 18      
|         |  |                                                                                                             
|ITEM 5.  |  | MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |  | 18      
|ITEM 6.  |  | SELECTED FINANCIAL DATA                                                                                      |  | 18      
|ITEM 7.  |  | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                        |  | 20      
|ITEM 7A. |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                   |  | 45      
|ITEM 8.  |  | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                                  |  | 48      
|ITEM 9.  |  | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                         |  | 115     
|ITEM 9A. |  | CONTROLS AND PROCEDURES                                                                                      |  | 115     
|ITEM 9B. |  | OTHER INFORMATION                                                                                            |  | 115     
|         |  |                                                                                                             
|PART III |  |                                                                                                              |  | 116     
|         |  |                                                                                                             
|ITEM 10. |  | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                                                           |  | 116     
|ITEM 11. |  | EXECUTIVE COMPENSATION                                                                                       |  | 120     
|ITEM 12. |  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                                               |  | 132     
|ITEM 13. |  | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                                               |  | 136     
|ITEM 14. |  | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                                       |  | 140     
|         |  |                                                                                                             
|PART IV  |  |                                                                                                              |  | 142     
|         |  |                                                                                                             
|ITEM 15. |  | EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES                                                                 |  | 142     



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DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This annual report on Form 10-K 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 annual report on Form 10-K, 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 materially 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 annual
report. Such risks, uncertainties and other important factors include, among others, the risks, uncertainties and factors set forth below under Item 1A. Risk Factors, 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-K apply only as of the date of this annual report on Form 10-K and are expressly qualified in their entirety by the
cautionary statements included in this annual report on Form 10-K. We undertake no obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances.

EXPLANATORY NOTE

In this annual report, PFGI, the
Company, we, us and our refers to Pinnacle Foods Group Inc., a Delaware corporation, and its subsidiaries on a consolidated basis. PFHC refers to Pinnacle Foods Holding Corporation, a
Delaware corporation, and its subsidiaries on a consolidated basis prior to the consummation of the Aurora Merger (as defined herein) and Pinnacle refers to Pinnacle Foods Corporation, a Delaware corporation and a wholly-owned subsidiary
of PFGI. Aurora refers to Aurora Foods Inc., a Delaware corporation, and its subsidiary on a consolidated basis prior to the consummation of the Aurora Merger (as defined herein).



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PART I

In December 2004, the Board of Directors approved a change to PFGIs fiscal year end from July 31 to the last
Sunday in December. In view of this change, this Form 10-K includes financial information for the year ended December 31, 2006, the fiscal year ended December 25, 2005, the 21 weeks ended December 26, 2004, which we refer to as the
transition year throughout this report, and for the year ended July 31, 2004. We identify each fiscal year for PFGI in this annual report according to the calendar year in which such fiscal year ends. For example, we refer to the
fiscal year ended December 31, 2006, as fiscal 2006, the fiscal year ended December 25, 2005, as fiscal 2005, and the fiscal year ended July 31, 2004 as fiscal 2004.



|ITEM 1. | BUSINESS
|------- | --------

GENERAL INFORMATION

We are a leading manufacturer and marketer of high-quality, branded convenience food products. Our products and operations are managed and reported in
two operating segments: frozen foods and dry foods. The frozen foods segment consists primarily of Hungry-Man and Swanson frozen dinners and entrees; Van de Kamps and Mrs. Pauls frozen seafood; Aunt Jemima frozen breakfasts: Celeste
frozen pizza and Lenders bagels. The dry foods segment consists primarily of Vlasic pickles, peppers and relish; Duncan Hines baking mixes and frostings; Mrs. Butterworths and Log Cabin syrups and pancake mixes and Armour canned
meats. On March 1, 2006, we acquired substantially all of The Dial Corporations assets relating to its Armour food products division, a leading company in the canned meat category with the majority of its sales under the
Armour brand name. Armour maintains the leading market position in the Vienna sausage, potted meat, and sliced beef categories. The business also includes meat spreads, chili, luncheon meat, corned and roast beef hash, beef stew, and
lunch buckets.

Our major brands hold leading market positions in their respective retail markets and enjoy high consumer awareness. Through our managed
broker network, our products reach all traditional classes of trade, including grocery wholesalers and distributors, grocery stores and supermarkets, convenience stores, mass and drug merchandisers and warehouse clubs. The address of our website is
www.pinnaclefoodscorp.com.

Throughout this Form 10-K, we use a combination of customized (assembled at our request) Information Resources, Inc.
(IRI) data and IRI syndicated databases. Unless we indicate otherwise, retail sales, market share, category and other industry data used throughout this Form 10-K for all categories and segments are IRI data for the 52-week period ended
December 24, 2006. These data include retail sales in supermarkets with at least $2 million in total annual sales but exclude sales in mass merchandiser, club, drug, convenience or dollar stores. Retail sales are dollar sales estimated by IRI
and represent the value of units sold through supermarket cash registers for the relevant period. We view the frozen dinners and entrees category as consisting of single-serve full-calorie dinners and entrees and single-serve healthy dinners and
entrees. We view the baking mixes and frostings category as consisting of the following segments: cake mix, brownie mix, ready-to-serve frostings, muffin mix, cookie mix, bar mix, frosting mix, quick bread, dessert kits, all other baking mix and all
other frosting. We view the frozen breakfast category as consisting of breakfast entrees, breakfast handhelds, waffles, pancakes and French toast. We view the prepared seafood segment as consisting of the prepared fin, prepared non-fin without
shrimp and prepared shrimp sub-segments. References to the bagel category are to scannable bagels, as consisting of the frozen, refrigerated and shelf-stable segments. We view syrup, canned meats and frozen pizza as distinct categories. When we
refer to the core market of our Open Pit brand of barbecue sauce, such core market consists of the major metropolitan areas surveyed by IRI in Illinois, Michigan, Ohio, western Pennsylvania and Wisconsin. Unless we indicate otherwise, all references
to percent changes reflect the comparison to the same period in the prior year.

Although we believe that this information is reliable, we cannot guarantee
its accuracy and completeness, nor have we independently verified it. Where we so indicate, we obtain certain other market share and industry data from internal company surveys and management estimates based on these surveys and on our
managements knowledge of the industry. While we believe such internal company surveys and management estimates are reliable, no independent sources have verified such surveys and estimates. Although we are not aware of any misstatements
regarding the industry data that we present in this Form 10-K, our estimates involve risks and uncertainties and are subject to change based on various factors, including those discussed under Disclosure regarding forward-looking
statements and Item 1A. Risk Factors.

RECENT EVENTS

On February 10, 2007, Crunch Holdings Corp., our parent company, entered into an Agreement and Plan of Merger with Peak Holdings LLC (Peak Holdings), a
Delaware limited liability company controlled by affiliates of The Blackstone Group, Peak Acquisition Corp (Peak Acquisition), a wholly owned subsidiary of Peak Holdings, and Peak Finance LLC, an indirect wholly owned subsidiary of Peak
Acquisition, providing for the acquisition of Crunch Holding Corp. Under the terms of Agreement and Plan of Merger, the purchase price for Crunch Holding Corp. will be $2,162.5 million in cash plus an amount equal to the aggregate exercise prices of
vested options less the amount of indebtedness of Crunch Holding Corp. and its subsidiaries outstanding immediately prior to the closing and certain transaction costs, subject to purchase price adjustments based on the amount of our working capital
and indebtedness as of the closing.



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INDUSTRY OVERVIEW

The U.S. food manufacturing industry has historically been characterized by relatively stable sales growth based on modest price and population increases. Over the past several years, consolidation activity in the
food manufacturing industry has been driven primarily by businesses making strategic acquisitions to complement category positions, maximize economies of scale in raw material sourcing and production and expand retail distribution, while shedding
non-core business lines. In recent years food manufacturers have capitalized on an increasing desire by households, particularly dual-income, single-family and active-lifestyle consumers, for convenience and variety by introducing innovative,
high-quality food products and complete meal solutions. Food manufacturers have also taken advantage of the growing trends toward away-from-home eating by increasing their sales to the foodservice channel, which supplies restaurants, schools,
hospitals and other institutions. We believe that these trends will continue to represent growth opportunities for food manufacturers.

Frozen foods

Frozen dinners and entrees. The frozen dinners and entrees category had $3.7 billion in retail sales, an increase of 4.4%. Through our
Hungry-Man and Swanson Dinners brands, we compete in the $2.0 billion single-serve, full-calorie dinners and entrees segment of this category, which has decreased 1.8%.

Frozen prepared seafood. The frozen prepared seafood category consists of fin products, such as pollock and salmon, and non-fin products, primarily shrimp. This category had
approximately $568 million in retail sales. The frozen prepared seafood category decreased by 2.2%. Our Mrs. Pauls and Van de Kamps brands compete in the frozen prepared seafood category.

Frozen breakfast. The frozen breakfast category consists of the frozen waffles, pancakes, French toast, breakfast entrees and breakfast handhelds segments. This
category had $1.2 billion in retail sales, an increase of 5.9% over the prior year period, driven primarily by an increased focus on new product innovation and new entrants to the category. Through our Aunt Jemima brand, we compete in all five
segments.

Bagels. The scannable bagel category consists of the frozen bagels, refrigerated bagels and fresh bagels segments, comprising 8.6%, 8.8%
and 82.6% of the category, respectively. The scannable bagel category had retail sales of $572 million, an increase of 2.6%. Our Lenders brand competes in all three segments. Frozen and refrigerated bagel market sales have declined 14.2% and
8.5%, respectively, while the fresh bagel market sales have increased 6.2%. The decline in frozen and refrigerated bagel sales is driven by consumers replacing frozen bagel purchases with purchases of fresh bagels and other, more innovative frozen
breakfast products. As a result, retailers have reduced shelf space and distribution for frozen bagels, further contributing to the decline in the frozen bagel segment.

Dry foods

Baking mixes and frostings. The baking mixes and frostings category, which has historically
exhibited stable consumption, had approximately $1.2 billion in retail sales, a decrease of 2.7% from the prior year period. The baking mixes and frostings category primarily consists of the following five key product segments, with the
corresponding retail sales volume percentages: cake mix (24.1%), ready-to-serve frostings (19.0%), brownie mix (17.8%), muffin mix (15.8%) and cookie mix (5.0%). Our Duncan Hines brand competes in all five of these segments. The remaining 18.3%
of the retail sales volume is in small product segments such as dessert mixes, quick breads and specialty mixes.

Pickles, peppers and relish. The
shelf-stable pickles, peppers and relish category is large and stable, with approximately $868 million of retail sales. Shelf-stable pickles is the largest segment of the category, with $475 million in retail sales, followed by peppers ($284
million) and relish ($109 million). Of retail shelf-stable pickle segment sales, approximately 71.9% represents sales of branded pickles, and the remaining 28.1% represents sales of private label pickles. Our Vlasic brand competes in all three
segments. We believe that the pickles, peppers and relish category will continue to demonstrate a relatively stable level of retail sales.

Syrup.
The syrup category had $420 million in retail sales and was flat compared to 2005. The syrup category consists of four major brandsAunt Jemima, Mrs. Butterworths (PFGI brand), Log Cabin (PFGI brand) and Eggoas well as numerous
private label and regional brands. Market share is driven largely by pricing, as the syrup consumer is extremely price sensitive. Of retail syrup category sales, approximately 77.2% represents sales of branded syrup, and the remaining 22.8%
represents sales of private label syrup.



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Canned Meat. The canned meat category consists of canned chili, chunk meat, Vienna sausages, luncheon meat, sloppy
joe and stew, comprising 31.2%, 14.5%, 8.4%, 8.0%, 7.8% and 6.0% of the category respectively. The remaining 24.1% of retail sales volume is in smaller segments such as hash, hot dog sauce, potted meat, sliced dry beef, meat spreads,
chicken & dumplings, corned and roast beef, sausage meats and other canned meat. This category had $1.0 billion in retail sales, a decline of 5.2%. Through our Armour brand we compete in 12 of the 15 segments.

OUR PRODUCTS

Our product portfolio
consists of a diverse mix of product lines and leading well-recognized brands. Our major brands hold leading market positions in their respective retail markets and enjoy high consumer awareness. Through our managed broker network, our products
reach all traditional classes of trade, including grocery wholesalers and distributors, grocery stores and supermarkets, convenience stores, mass and drug merchandisers and warehouse clubs. We also distribute most of our products through foodservice
and private label channels.

Frozen foods

Frozen
dinners and entrees. Our frozen dinners and entrees product line consists primarily of products sold in the United States and Canada under the Hungry-Man and Swanson brands. We also distribute these products through foodservice and private label
channels. As a complement to our major brands (Hungry-Man and Swanson Dinners), our frozen dinner offerings also include Swanson Pot Pies. In Canada, we also distribute the Hungry-Man and Swanson brands along with Hungry-Man Express and Swanson
Hearty Bowls. The Swanson brand enjoys a strong heritage, dating back over 50 years to its introduction of The Original TV Dinner® in 1953. Swanson dinners have been recently re-launched and re-packaged as Swanson Classics to reinforce Swansons value proposition which
combines premium quality at an affordable price. Hungry-Man differentiates itself from the category by positioning towards male consumers who prefer larger, more satisfying portions. Our Hungry-Man and Swanson Dinners brands collectively represent
the fourth-largest brand in the $2.0 billion single-serve, full-calorie dinners and entrees segment of the frozen dinners and entrees category.

Frozen
prepared seafood. Our frozen seafood product line, marketed primarily under the Van de Kamps and Mrs. Pauls brands, includes breaded and battered fish sticks and fish fillets, healthy breaded fish, breaded shrimp and
specialty seafood items, such as crab cakes and clam strips. We use a dual-brand strategy to capitalize on the regional strengths of our brands. Both brands differentiate themselves from the category by offering a product with a superior freshness
quality, due to the freshness pouch that employs a bag-in-box: strategy to prevent against shrinkage and freezer burn. The Van de Kamps brand dates back to 1915 and the Mrs. Pauls franchise began in the
mid-1940s. The Van de Kamps and Mrs. Pauls brands hold the number two (10.4%) and the number three (6.8%) market share positions among the branded products, respectively, of the $568 million frozen prepared seafood
category.

Frozen breakfast. Our breakfast product line consists of waffles, pancakes, French toast, breakfast entrees and breakfast handhelds
marketed under the Aunt Jemima brand. Beginning in May 2004, the Swanson Great Starts products were re-branded Aunt Jemima Great Starts, which allows us to leverage the combined size of our grain-based and protein-based frozen breakfast offerings.
Aunt Jemima is positioned as high-quality frozen breakfast brand that appeals to families with children. The Aunt Jemima brand was established over a century ago and, with an 11.6% share, is currently the number four brand in the $1.2 billion frozen
breakfast category. We also distribute these products through foodservice and private label channels. In 2006, we launched the Aunt Jemima brand in Canada and plan to continue expanding distribution.

Bagels. Our bagel product line consists primarily of Lenders packaged bagels, which we distribute among all scannable sections of the grocery store (i.e.,
the frozen, refrigerated and fresh bread aisles). Founded in 1927, Lenders ranks number three among branded scannable bagels, with a 12.9% share of the $572 million scannable bagel category. We also distribute these products through
foodservice and private label channels.

Other frozen foods. We market frozen pizza under the Celeste brand, which dates back to the 1930s. Celeste
is positioned as a homemade, authentic Italian meal at an affordable price and is sold primarily through the Northeast, Chicago, Florida and California. We had previously sold skillet meals under the Chefs Choice brand, which are complete
entrees in a single package that can be cooked in a skillet in less than fifteen minutes. The Chefs Choice brand, which was sold primarily to one customer, was discontinued in the fourth quarter of 2004.



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Dry foods

Baking
mixes and frostings. Our baking mixes and frostings product line consists primarily of Duncan Hines cake mixes, ready-to-serve frostings, brownie mixes, muffin mixes and cookie mixes. Duncan Hines is a national premium brand that was introduced
in 1956 and, with a 19.4% share, is the number two brand in the $1.2 billion baking mixes and frostings category. We position Duncan Hines as a national premium brand that appeals to the consumer who wants a quality, good as homemade
baking product. During 2004, the Company acquired the rights to distribute the Duncan Hines brand in Canada and since then, we have expanded our Canadian distribution of the brand. All Duncan Hines products are produced by contract manufacturers.

Pickles, peppers and relish. Our pickle, pepper and relish product lines consist primarily of shelf-stable pickle, pepper and relish products sold
nationally under our Vlasic brand (97% of branded sales) and pickles sold regionally under the Milwaukees and Wiejske Wyroby brands (3% of branded sales). Our Vlasic brand was introduced over 65 years ago, and we believe that the Vlasic brand,
together with our trademark Vlasic stork, enjoy strong consumer awareness. Vlasic, with a 31.9% share, is the leading and only national brand in the $475 million shelf-stable pickle segment of the $868 million pickles, peppers and relish category.
We also distribute these products through foodservice and private label channels. In 2004, we launched the Vlasic brand in Canada.

Our Vlasic pickle
products are offered primarily in dill, sweet and bread-and-butter flavors and in a wide array of forms, such as whole, baby wholes, spears, chips and slices. We offer over 30 different flavors and cuts of pickles. The Vlasic cut pepper product
offering consists of four types of peppers in varying heat levels to cover the sweet, mild and hot consumer preferences. Vlasic also offers six other whole pepper varieties, such as jalapeno and pepperoncini. The Vlasic relish product offering
consists of a full line of relish products in a variety of flavors including dill, mild sweet and fancy sweet.

Syrups and pancake mixes. Our syrup
and pancake mixes product line consists primarily of products marketed under our Log Cabin and Mrs. Butterworths brands. Our syrup line consists of original, lite and sugar-free varieties. Log Cabin was introduced in 1888 and, with its
authentic cabin-shaped bottle and distinct maple flavor, appeals to all family usage. Mrs. Butterworths was introduced in 1962 and, with its distinctive grandmother-shaped bottle and thick, rich and buttery flavor, appeals to families
with children. In the $420 million table-syrup category, Log Cabin and Mrs. Butterworths hold the number two (10.6%) and number three (10.3%) market share positions, respectively, among branded syrups. We also distribute these
products through the foodservice channel.

Canned meats. Our canned meat product line consists primarily of products marketed under the Armour
brand. Armour was introduced in 1868 by Philip Danforth Armour for California gold miners. Armour is the number two branded product in the canned meat category and is the number one brand in the Vienna sausage, potted meat and sliced dried beef
segments. We also distribute these products through the foodservice and private label channels.

Other dry foods. We market a complete line of
barbeque sauce products under our Open Pit brand, which was introduced in 1955. We sell this product line primarily to retail customers in core Midwest markets where we have the number two position with 18.3% market share.

HISTORY

On May 22, 2001, Pinnacle acquired
certain assets and assumed certain liabilities of the North American business of Vlasic Foods International Inc. (VFI). The North American business consisted of the Swanson and Hungry-Man frozen food, Vlasic pickles, peppers and relish
and Open Pit barbecue sauce businesses. PFHC and Pinnacle were each incorporated on March 29, 2001, but had no operations until the acquisition of the North American business of VFI.

On August 8, 2003, Crunch Holding Corp., a Delaware corporation indirectly owned by J.P. Morgan Partners, LLC (or one or more of its affiliates, as appropriate,
JPMP), J.W. Childs Associates, L.P. (or one or more of its affiliates, as appropriate, JWC) and CDM Investor Group LLC (CDM and, together with JPMP and JWC, the Sponsors) entered into a definitive
purchase agreement to acquire PFHC. The Pinnacle Transaction (as defined below) was consummated on November 25, 2003. As of the closing date of the Pinnacle Transaction, the Sponsors indirectly owned 100% of the issued and outstanding stock of
PFHC. The transaction, the financing thereof and the other related transactions are collectively referred to in this annual report on Form 10-K for convenience as the Pinnacle Transaction.



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On November 25, 2003, Aurora entered into a definitive agreement (as amended on January 8, 2004, the
Merger Agreement) with Crunch Equity Holding, LLC (LLC). The definitive agreement provided for a comprehensive restructuring transaction in which PFHC was merged with and into Aurora, with Aurora surviving the merger,
following the filing and confirmation of a pre-negotiated bankruptcy reorganization case with respect to Aurora under Chapter 11 of the U.S. Bankruptcy Code. On December 8, 2003, Aurora and its subsidiary, Sea Coast Foods, Inc., filed their
petitions for reorganization with the Bankruptcy Court. On February 20, 2004, the First Amended Joint Reorganization Plan of Aurora Foods Inc. and Sea Coast Foods, Inc., as modified, dated February 17, 2004, was confirmed by order of the
Bankruptcy Court. We collectively refer to the restructuring, the financing thereof and the other related transactions as the Aurora Merger. This restructuring transaction was completed on March 19, 2004 and the surviving company
was renamed Pinnacle Foods Group Inc.

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 $189.2 million in cash. The acquisition of the Armour Business complemented the Companys existing product lines that together provide growth opportunities and scale. The
Armour Business is a leading manufacturer, distributor and marketer of products in the $1.0 billion canned meats category. For the year ended December 31, 2005, the Armour Business had net sales of approximately $225 million. Armour maintains
the leading market position in the Vienna sausage, potted meat and sliced beef categories. The business also includes meat spreads, chili, luncheon meat, corned and roast beef hash, beef stew and Lunch Bucket® meals. The majority of the products are produced at our manufacturing facility located
in Ft. Madison, Iowa, which we 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.

Concurrently with the acquisition but effective as of
February 14, 2006, the Company entered into Amendment No. 4 and Agreement to the existing senior secured credit facilities. 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 Company funded the remaining portion of the purchase price through
equity contributions from the shareholders of LLC. JWC, JPMP, CDM and the Bondholder Trust invested approximately $10.3 million, $10.3 million, $1.2 million and $18.2 million directly into LLC.

After giving effect to the acquisition of the Armour Business and the equity investments made by the shareholders of LLC, JPMP and JWC collectively controlled
approximately 48.2% of LLC, the Bondholder Trust owned approximately 43.0% of LLC and CDM owned approximately 8.8% of LLC, in each case subject to dilution by up to 16% in management equity incentives.

MARKETING, SALES AND DISTRIBUTION

Our marketing programs consist of advertising, consumer promotions and trade promotions. Our advertising consists of television, newspaper and magazine advertising aimed at increasing consumer awareness and trial of
our brands. Consumer promotions include free trial offers, targeted coupons and on-package offers to generate trial usage and increase purchasing frequency. Our trade promotions focus on obtaining retail feature and display support, discounting to
achieve key price points and securing retail shelf space. We continue to shift our marketing efforts toward building long-term brand equity through consumer advertising and trial generation promotions rather than through trade spending.

We sell a majority of our products in the United States through one national broker with whom we have a long term working relationship. In Canada, we use two brokers
to distribute the majority of our products. We employ other brokers for the foodservice, military, club and convenience channels. We manage our brokers through our company employees in regional sales offices located in Arkansas and Ontario, Canada.
Through this managed broker network, our products reach all traditional classes of trade including grocery wholesalers and distributors, grocery stores and supermarkets, convenience stores, mass and drug merchandisers and warehouse clubs.



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Due to the different demands of distribution for frozen, refrigerated and shelf-stable products, we maintain separate
distribution systems. Our frozen product warehouse and distribution network consists of 19 locations. Frozen products are distributed by means of three owned and operated warehouses at our Fayetteville, Arkansas, Mattoon, Illinois, and Jackson,
Tennessee plants. In addition, we utilize five distribution centers and three consignment distribution centers in the United States and two distribution centers in Canada, all of which are owned and operated by third-party logistics providers. We
currently ship frozen products from two specialty locations which provide special packaging and from two co-packers of finished goods. We also maintain inventory in two overflow warehouses. Vlasic refrigerated pickles are distributed directly from
cold storage warehouses at our pickle manufacturing facilities. Our dry product warehouse and distribution network consists of 12 locations. Dry foods products are distributed through a system of ten distribution sites in the United States, which
include four warehouses that are owned and operated by us in Imlay City, Michigan, Millsboro, Delaware, St. Elmo, Illinois and Ft. Madison, Iowa, and six other locations which are owned and operated by third-party logistics providers. We also
distribute dry products from one leased distribution center in Canada and maintain one overflow warehouses for dry products. In each third-party operated location, the provider receives, handles, and stores product. Our distribution system uses a
combination of common carrier trucking and inter-modal rail transport. We believe that the sales and distribution network is scalable and has the capacity to support substantial increases in volume.

INGREDIENTS AND PACKAGING

We believe that the ingredients and packaging used to produce our products are readily available through multiple sources. PFGIs ingredients typically account for approximately 41% of our cost of products sold, and primarily include
cucumbers, chicken, beef, turkey, corn syrup, flour, sugar, fish, shrimp, eggs, cheese, vegetable oils and shortening. PFGIs packaging costs, primarily for aluminum, glass jars, plastic trays, corrugated fiberboard and plastic packaging
materials, typically account for approximately 20% of our cost of products sold.

RESEARCH AND DEVELOPMENT

Our Product Development and Technical Services team currently consists of 27 full-time employees focused on product-quality improvements, product
creation, package development, regulatory compliance, quality assurance and tracking consumer feedback. For fiscal 2006, fiscal 2005, the transition year, and fiscal 2004, PFGIs research and development expenditures totaled $4.0 million, $3.6
million, $1.5 million and $3.3 million, respectively.

CUSTOMERS

Sales of PFGIs products to Wal-Mart and its affiliates approximated 22% of PFGIs consolidated net sales in fiscal 2006, 21% in fiscal 2005, 18% in the transition year and 18% in fiscal 2004. PFGIs
top ten customers accounted for approximately 57% of PFGIs net sales in fiscal 2006, 56% in fiscal 2005, 53% in the transition year and 50% in fiscal 2004. We believe that our concentration of business with our largest customers is
representative of the food industry. The loss of our largest customer would have a significant impact on our business. The specific timing of significant customers merchandising activities for our products can impact quarterly sales and
operating results when making year-to-year comparisons.

COMPETITION

We face competition in each of our product lines. We compete with producers of similar products on the basis of, among other things, product quality, convenience, price, brand recognition and loyalty, customer
service, effective advertising and promotional activities and the ability to identify and satisfy emerging consumer preferences. We compete with a significant number of companies of varying sizes, including divisions, subdivisions or subsidiaries of
much larger companies with more substantial financial and other resources available to them. Our ability to grow our business may be impacted by the relative effectiveness of, and competitive response to, new product efforts, product innovation and
new advertising and promotional activities. In addition, from time to time, we may experience margin pressure in certain markets as a result of competitors pricing practices or as a result of price increases for the ingredients used in our
products. Although we compete in a highly competitive industry for representation in the retail food and foodservice channels, we believe that our brand strength in our various markets has resulted in a strong competitive position.



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During fiscal 2006, fiscal 2005, the transition year and fiscal 2004 our most significant competitors for our products
were as follows:



|                                      |  |                                                   
|------------------------------------- |  | --------------------------------------------------
|PFGI Products                         |  | Competitor                                        
|        Frozen dinner products       |  | Nestle, ConAgra and Heinz                         
|        Pickles and peppers products |  | Claussen, B&G Foods, Inc., and Mt. Olive          
|        Baking products              |  | General Mills and J.M. Smucker Co.                
|        Syrup products               |  | The Quaker Oats Company and Kelloggs             
|        Seafood products             |  | Gortons and Seapak                               
|        Frozen breakfast products    |  | Kelloggs, General Mills and Jimmy Dean (Sara Lee)
|        Bagel products               |  | Weston and Sara Lee                               
|        Canned meats                 |  | ConAgra and Hormel                                

TRADEMARKS AND PATENTS

We own a number of registered trademarks in the United States, Canada and other countries, including All Day Breakfast®, American Recipes®, Appian Way®, Candy Factory®, Casa Brava®, Casa Regina®,
Celeste®, Country Kitchen®, Duncan Hines®, Food Thats In Fashion®, Fun Frosters®, Grabwich®, Great Starts®, Grill Classics®, Hearty Bowls®,
Hearty Hero®, Hungry-Man®, Hungry-Man Sports Grill®, Hungry-Man Steakhouse®, Its Good to be Full®, Lenders®, Log Cabin®, Lunch Bucket®, Magic Minis®, Milwaukees®,
Moist Deluxe®, Mrs. Butterworths®, Mrs. Pauls®, Only Mrs. Pauls®, Open Pit®, Ovals®, Signature Desserts®, Snackmms®, Stackers®, Steakhouse Mix®,
Syrup Dunkers ®, The Original TV Dinner®, Thats The Best Pickle I Ever Heard®, Treet®, Van de Kamps®, Vlasic®, and Wiejske Wyroby®. We protect our trademarks by obtaining registrations where appropriate and opposing any infringement in key markets. We also own a design
trademark in the United States, Canada and other countries on the Vlasic stork.

We manufacture and market certain of our frozen food products under the
Swanson brand pursuant to two royalty-free, exclusive and perpetual trademark licenses granted by Campbell Soup Company. The licenses give us the right to use certain Swanson trademarks both inside and outside of the United States in connection with
the manufacture, distribution, marketing, advertising and promotion of frozen foods and beverages of any type except for frozen soup or broth. The licenses require us to obtain the prior written approval of Campbell Soup Company for the visual
appearance and labeling of all packaging, advertising materials and promotions bearing the Swanson trademark. The licenses contain standard provisions, including those dealing with quality control and termination by Campbell Soup Company as well as
assignment and consent. If we were to breach any material term of the licenses and not timely cure such breach, Campbell Soup Company could terminate the licenses.

We manufacture and market certain of our frozen breakfast products under the Aunt Jemima brand pursuant to a royalty-free, exclusive (as to frozen breakfast products only) and perpetual license granted by The Quaker Oats Company. The
license gives us the right to use certain Aunt Jemima trademarks both inside and outside the United States in connection with the manufacture and sale of waffles, pancakes, French toast, pancake batter, biscuits, muffins, strudel, croissants and all
other frozen breakfast products, excluding frozen cereal. The license requires us to obtain the approval of The Quaker Oats Company for any labels, packaging, advertising and promotional materials bearing the Aunt Jemima trademark. The Quaker Oats
Company can only withhold approval if such proposed use violates the terms of the license. The license contains standard provisions, including those dealing with quality control and termination by The Quaker Oats Company as well as assignment and
consent. If we were to breach any material term of the license and not timely cure such breach, The Quaker Oats Company could terminate the license.

In
addition, as part of our acquisition of the Armour Business from The Dial Corporation, we received the assignment of a license agreement granting us an exclusive, royalty bearing, perpetual license to use certain Armour trademarks. Under the
license agreement, Smithfield Foods, as successor to ConAgra, Inc., the licensor, grants a license for the use of various Armour-related trademarks in conjunction with shelf-stable products within the United States. The shelf-stable products
must be manufactured according to approved formulas and specifications, and new specifications must be approved by the licensor, with such approval not to be unreasonably withheld or delayed. Proposed labels, packaging, advertising and
promotional materials must first be submitted to the licensor for approval, with such approval not to be unreasonably withheld or delayed. We are required to make annual royalty payments to the licensor equal to the greater of $250,000 or a
percentage royalty based upon our annual net sales of the approved shelf-stable products. If we were to materially breach the license agreement, Smithfield Foods could terminate the license. The Company maintains Armour related registrations in
many other countries.



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We consider our intellectual property rights to be among our most valuable assets. The loss of these licenses could have
a material adverse effect on our business. See Item 1ARisk Factors  Termination of our material licenses would have a material adverse effect on our business.

Although we own a number of patents covering manufacturing processes, we do not believe that our business depends on any of these patents to a material extent.

EMPLOYEES

We employed approximately 3,100 people,
with approximately 55% of our employees unionized. We consider our employee relations to be generally good.

GOVERNMENTAL,
LEGAL AND REGULATORY MATTERS

Food safety and labeling

We are subject to the Food, Drug and Cosmetic Act and regulations promulgated thereunder by the Food and Drug Administration. This comprehensive and evolving regulatory
program governs, among other things, the manufacturing, composition and ingredients, labeling, packaging and safety of food. In addition, the Nutrition Labeling and Education Act of 1990 prescribes the format and content of certain information
required to appear on the labels of food products. We are also subject to regulation by certain other governmental agencies, including the U.S. Department of Agriculture.

Our operations and products are also subject to state and local regulation through such measures as licensing of plants, enforcement by state health agencies of various state standards and inspection of facilities.
Enforcement actions for violations of federal, state and local regulations may include seizure and condemnation of products, cease and desist orders, injunctions or monetary penalties. We believe that our facilities and practices are sufficient to
maintain compliance with applicable government regulations, although there can be no assurances in this regard.

Federal Trade Commission

We are subject to certain regulations by the Federal Trade Commission. Advertising of our products is subject to such regulation pursuant to the
Federal Trade Commission Act and the regulations promulgated thereunder.

Employee safety regulations

We are subject to certain health and safety regulations, including regulations issued pursuant to the Occupational Safety and Health Act. These regulations require us to
comply with certain manufacturing, health and safety standards to protect our employees from accidents.

Environmental

We are subject to a number of federal, state and local laws and other requirements relating to the protection of the environment and the safety and health of personnel
and the public. These requirements relate to a broad range of our activities, including:



| |  |  | the discharge of pollutants into the air and water;
| | - |  | ---------------------------------------------------



| |  |  | the identification, generation, storage, handling, transportation, disposal, record-keeping, labeling, reporting of, and emergency response in connection with,
hazardous materials (including asbestos) associated with our operations;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | noise emissions from our facilities; and
| | - |  | ----------------------------------------



| |  |  | safety and health standards, practices and procedures that apply to the workplace and the operation of our facilities.
| | - |  | ----------------------------------------------------------------------------------------------------------------------



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In order to comply with these requirements, we may need to spend substantial amounts of money and other resources from
time to time to (i) construct or acquire new equipment, (ii) acquire or amend permits to authorize facility operations, (iii) modify, upgrade or replace existing and proposed equipment and (iv) clean up or decommission waste
management facilities. Our capital and operating budgets include costs and expenses associated with complying with these laws. If we do not comply with environmental requirements that apply to our operations, regulatory agencies could seek to impose
civil, administrative and/or criminal liabilities, as well as seek to curtail our operations. Under some circumstances, private parties could also seek to impose civil fines or penalties for violations of environmental laws or recover monetary
damages, including those relating to property damage or personal injury.

The presence of hazardous materials at our facilities may expose us to potential
liabilities associated with the cleanup of contaminated soil and groundwater under federal or state Superfund statutes. Under the federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended
(CERCLA), owners and operators of facilities from which there has been a release or threatened release of hazardous materials, together with those who have transported or arranged for the transportation or disposal of those materials,
are liable for (i) the costs of responding to and remediating that release and (ii) the restoration of natural resources damaged by any such release. Under CERCLA and similar state statutes, liability for the entire cost of cleaning up the
contaminated site can be imposed upon any such party, regardless of the lawfulness of the activities that led to the contamination. We have not incurred, nor do we anticipate incurring, material expenditures made in order to comply with
environmental laws or regulations. We are not aware of any environmental liabilities that we would expect to have a material adverse effect on our business.

SEASONALITY

Our sales and cash flows are affected by seasonal cyclicality. 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 tend to be higher during August, September and October, and thus we require more working capital during these
months.

INSURANCE

We maintain general
liability and product liability, property, workers compensation, director and officer and other insurance in amounts and on terms that we believe are customary for companies similarly situated. In addition, we maintain excess insurance where
we reasonably believe it is cost effective.

ADDITIONAL INFORMATION

Additional information pertaining to our businesses, including operating segments, is set forth under the caption Managements Discussion and Analysis of
Financial Condition and Results of OperationsResults of Operations and Related Information under Item 7 of this Form 10-K and in Note 15 of the Notes to Consolidated Financial Statements, which are included under Item 8 of this
Form 10-K.

Our reports on Form 10-K, along with all other reports and amendments, are filed with or furnished to the SEC. You may read and copy any
materials we file with the SEC at the SECs Public Reference Room at 100 F Street, NE, Washington, D.C., 20549. Please call 1-800-SEC-0330 for further information on the operation of the Public Reference Room. Our filings are also available to
the public from commercial document retrieval services and at the web site maintained by the SEC at http://www.sec.gov.



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|ITEM 1A. | RISK FACTORS
|-------- | ------------

There are a wide range of risks and uncertainties
that could adversely affect the Company and the Companys overall financial performance. In addition to the matters discussed elsewhere in this annual report on Form 10-K (including the financial statements and other items filed herewith), the
Company believes the more significant of such risks and uncertainties include the following:

We face significant competition in our industry.

The food-products business is highly competitive. Numerous brands and products compete for shelf space and sales, with competition based primarily on
product quality, convenience, price, trade promotion, consumer promotion, brand recognition and loyalty, customer service, advertising and promotion and the ability to identify and satisfy emerging consumer preferences. We compete with a significant
number of companies of varying sizes, including divisions or subsidiaries of larger companies. Many of these competitors have multiple product lines, substantially greater financial and other resources available to them and may have lower fixed
costs and be substantially less leveraged than we are. We cannot assure you that we will be able to compete successfully with these companies. Competitive pressures or other factors could cause us to lose market share, which may require us to lower
prices, increase marketing and advertising expenditures, or increase the use of discounting or promotional campaigns, each of which would adversely affect our margins and could result in a decrease in our operating results and profitability. See
Item 1Competition.

We are vulnerable to fluctuations in the price and supply of food ingredients, packaging materials and freight.

The prices of the food ingredients we use are subject to fluctuations in price attributable to, among other things, changes in crop size and
government-sponsored agricultural and livestock programs. The sales prices to our customers are a delivered price. Therefore, pending an increase in our selling price, we have to absorb higher prices for ingredients, packaging materials and freight.
Changes in these prices have a corresponding impact on the manufactured and delivered cost of finished products and, as a result, could impact our gross margins. Our ability to pass along cost increases to customers is dependent upon competitive
conditions and pricing methodologies employed in the various markets in which we compete. If we are unable to pass along such cost increases, it could cause our operating results to be reduced.

In our pickle business we rely primarily on cucumbers and, along with our frozen dinners business to a lesser extent, other produce supplied by third-party growers. We
also use significant quantities of corn syrup, flour, sugar, fish, poultry, beef, shrimp, eggs, cheese, vegetable oils, shortening and other agricultural products as well as aluminum, corrugated fiberboard, glass and plastic packaging materials
provided by third-party suppliers. We buy from a variety of producers and manufacturers, and alternate sources of supply are readily available. However, the supply and price are subject to market conditions and are influenced by other factors beyond
our control, such as general economic conditions, unanticipated demand, problems in production or distribution, natural disasters, weather conditions during the growing and harvesting seasons, insects, plant diseases and fungi.

We generally do not have long-term contracts with our suppliers, and as a result they could increase prices significantly or fail to deliver.

We typically do not rely on long-term arrangements with our suppliers. Our suppliers may implement significant price increases or may not meet our requirements in a
timely fashion, if at all. The occurrence of any of the foregoing could increase our costs and disrupt our operations.

If we lose one or more of our
major customers, or if any of our major customers experience significant business interruption, our results of operations and our ability to service our indebtedness could be adversely affected.

We are dependent upon a limited number of large customers with substantial purchasing power for a significant percentage of our sales. Sales to Wal-Mart Stores, Inc.
represented 22%, 21%, 18%, and 18% of PFGIs consolidated net sales in fiscal 2006, fiscal 2005, the transition year and fiscal 2004, respectively. We do not have a long-term supply contract with any of our major customers. PFGIs top ten
customers accounted for approximately 57%, 56%, 53% and 50% of PFGIs net sales in fiscal 2006, fiscal 2005, the transition year and fiscal 2004, respectively. The loss of one or more major customers, a material reduction in sales to these
customers as a result of competition from other food manufacturers or the occurrence of a significant business interruption at our customers would result in a decrease in our revenues, operating results and earnings and adversely affect our ability
to service our indebtedness.



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Due to the seasonality of the business, our revenue and operating results may vary quarter to quarter.

Our sales and cash flows are affected by seasonal cyclicality. Sales of frozen foods, including seafood, tend to be marginally higher during the winter months, whereas
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 seafood and Duncan Hines inventories at that time in advance of the selling season. As a result, our inventory levels tend to be higher during August, September and October,
and thus we require more working capital during these months.

Loss of any of our current co-packing arrangements could decrease our sales and earnings
and put us at a competitive disadvantage.

We rely upon co-packers for our Duncan Hines cake mixes, brownie mixes, specialty mixes and frosting products
and a limited portion of our other manufacturing needs. We believe that there are a limited number of competent, high-quality co-packers in the industry, and if we were required to obtain additional or alternative co-packing agreements or
arrangements in the future, we cannot assure you we will be able to do so on satisfactory terms or in a timely manner.

We may not be able to complete
any future acquisitions, which could restrict our ability to grow our business; and if we fail to successfully integrate any future acquisitions into our operations, our operating costs could increase and our operating margins, operating results and
profitability may decrease.

We may not be able to identify and complete additional acquisitions in the future, and our failure to identify and complete
acquisitions could restrict our ability to grow our business beyond our existing brands. In addition, we may require additional debt or equity financing for future acquisitions. Such financing may not be available on favorable terms, if at all.
Also, if we do not successfully integrate acquisitions, we may not realize anticipated operating advantages and cost savings which would reduce our operating margins, operating results and profitability. The acquisition and integration of companies
involves a number of risks, including:



| |  |  | the risk that a proposed acquisition will be prohibited by U.S. or foreign antitrust laws;
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | use of available cash or borrowings under our senior secured credit facilities to consummate the acquisition;
| | - |  | -------------------------------------------------------------------------------------------------------------



| |  |  | demands on management related to the increase in our size after an acquisition;
| | - |  | -------------------------------------------------------------------------------



| |  |  | the diversion of managements attention from existing operations to the integration of acquired companies;
| | - |  | ----------------------------------------------------------------------------------------------------------



| |  |  | difficulties in the assimilation and retention of employees; and
| | - |  | ----------------------------------------------------------------



| |  |  | potential adverse effects on our operating results.
| | - |  | ---------------------------------------------------

We may not be able to maintain the levels of operating efficiency that acquired companies achieved separately. Successful integration of acquired operations will depend upon our ability to manage those operations and to eliminate redundant
and excess costs. We may not be able to achieve the cost savings and other benefits that we would hope to achieve from acquisitions, which could cause our financial condition to deteriorate or result in an increase in our expenses or a reduction in
our operating margins, thereby reducing our operating results and profitability.

We are subject to environmental laws and regulations relating to
hazardous materials used in or resulting from our operations. Liabilities or claims with respect to environmental matters could have a significant negative impact on our business.

Our operations include the use, generation and disposal of hazardous materials. We are subject to various federal, state and local laws and regulations relating to the protection of the environment, including those
governing the discharge of pollutants into the air and water, the management and disposal of hazardous materials and the cleanup of contaminated sites. In addition, our operations are governed by laws and regulations relating to workplace safety and
worker health which, among other things, regulate employee exposure to hazardous materials in the workplace. We could incur substantial costs, including cleanup costs, civil or criminal fines or sanctions and third-party claims for property damage
or personal injury, as a result of violations of, or liabilities under, environmental laws and regulations or the noncompliance with environmental permits required at our facilities. These laws, regulations and permits also could require the
installation of pollution control equipment or operational changes to limit air emissions or wastewater discharges and/or decrease the likelihood of accidental releases of hazardous materials. We cannot assure you that such costs will not be
material.



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We cannot predict what environmental or health and safety legislation or regulations will be enacted in the future or how
existing or future laws or regulations will be enforced, administered or interpreted. We also can not predict the amount of future expenditures that may be required in order to comply with such environmental or health and safety laws or regulations
or to respond to environmental claims. See Item 1Governmental, legal and regulatory matters.

Our operations are subject to FDA and
USDA governmental regulation, and there is no assurance that we will be in compliance with all regulations.

Our operations are subject to extensive
regulation by the U.S. Food and Drug Administration, the U.S. Department of Agriculture and other national, state and local authorities. Specifically, we are subject to the Food, Drug and Cosmetic Act and regulations promulgated thereunder by the
FDA. This comprehensive regulatory program governs, among other things, the manufacturing, composition and ingredients, packaging and safety of food. Under this program the FDA regulates manufacturing practices for foods through its current
good manufacturing practices regulations and specifies the recipes for certain foods. Our processing facilities and products are subject to periodic inspection by federal, state and local authorities. In addition, we must comply with
similar laws in Canada. We seek to comply with applicable regulations through a combination of employing internal personnel to ensure quality-assurance compliance (for example, assuring that food packages contain only ingredients as specified on the
package labeling) and contracting with third-party laboratories that conduct analyses of products for the nutritional-labeling requirements.

Failure by us
to comply with applicable laws and regulations or maintain permits and licenses relating to our operations could subject us to civil remedies, including fines, injunctions, recalls or seizures, as well as potential criminal sanctions, which could
result in increased operating costs resulting in a material effect on our operating results and business. See Item 1Governmental, legal and regulatory matters.

We may be subject to significant liability should the consumption of any of our products cause injury, illness or death.

Our business is subject to product recalls in the event of contamination, product tampering, mislabeling or damage to our products. We cannot assure you that product-liability claims will not be asserted against us or that we will not be
obligated to recall our products in the future. A product-liability judgment against us or a product recall could have a material adverse effect on our business, financial condition or results of operations.

Litigation regarding our trademarks and any other proprietary rights may have a significant, negative impact on our business.

We consider our trademarks to be of significant importance in our business. Although we devote resources to the establishment and protection of our trademarks, we cannot
assure you that the actions we have taken or will take in the future will be adequate to prevent imitation of our products by others or prevent others from seeking to block sales of our products as an alleged violation of their trademarks and
proprietary rights. There can be no assurance that future litigation by us will not be necessary to enforce our trademark rights or to defend us against claimed infringement of the rights of others, or result in adverse determinations that could
have a material adverse effect on our business, financial condition or results of operations. Our inability to use our trademarks and other proprietary rights could harm our business and sales through reduced demand for our products and reduced
revenues.

Termination of our material licenses would have a material adverse effect on our business.

We manufacture and market certain of our frozen food products under the Swanson brand pursuant to two royalty-free, exclusive and perpetual trademark licenses granted by
Campbell Soup Company. The licenses give us the right to use certain Swanson trademarks both inside and outside of the United States in connection with the manufacture, distribution, marketing, advertising and promotion of frozen foods and beverages
of any type except for frozen soup or broth. The licenses require us to obtain the prior written approval of Campbell Soup Company for the visual appearance and labeling of all packaging, advertising materials and promotions bearing the Swanson
trademark. The licenses contain standard provisions, including those dealing with quality control and termination by Campbell Soup Company as well as assignment and consent. If we were to breach any material term of the licenses and not timely cure
such breach, Campbell Soup Company could terminate the licenses.



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We manufacture and market certain of our frozen breakfast products under the Aunt Jemima brand pursuant to a
royalty-free, exclusive (as to frozen breakfast products only) and perpetual license granted by The Quaker Oats Company. The license gives us the right to use certain Aunt Jemima trademarks both inside and outside the United States in connection
with the manufacture and sale of waffles, pancakes, French toast, pancake batter, biscuits, muffins, strudel, croissants and all other frozen breakfast products, excluding frozen cereal. The license requires us to obtain the approval of The Quaker
Oats Company for any labels, packaging, advertising and promotional materials bearing the Aunt Jemima trademark. The Quaker Oats Company can only withhold approval if such proposed use violates the terms of the license. The license contains standard
provisions, including those dealing with quality control and termination by The Quaker Oats Company as well as assignment and consent. If we were to breach any material term of the license and not timely cure such breach, The Quaker Oats Company
could terminate the license.

In addition, as part of our acquisition of the Armour Business from The Dial Corporation, we received the assignment of a
license agreement granting us an exclusive, royalty bearing, perpetual license to use certain Armour trademarks. Under the license agreement, ConAgra, Inc., the licensor, grants a license for the use of various Armour-related trademarks in
conjunction with shelf-stable products within the United States. The shelf-stable products must be manufactured according to approved formulas and specifications, and new specifications must be approved by the licensor, with such approval not to be
unreasonably withheld or delayed. Proposed labels, packaging, advertising and promotional materials must first be submitted to the licensor for approval, with such approval not to be unreasonably withheld or delayed. We are required to make annual
royalty payments to the licensor equal to the greater of $250,000 or a percentage royalty based upon our annual net sales of the approved shelf-stable products. If we were to materially breach the license agreement, ConAgra, Inc. could terminate the
license.

The loss of these licenses would have a material adverse effect on our business.

If we are unable to retain our key management personnel, our growth and future success may be impaired and our financial condition could suffer as a result.

Our success depends to a significant degree upon the continued contributions of senior management, certain of whom would be difficult to replace. Departure by certain of
our executive officers could have a material adverse effect on our business, financial condition or results of operations. We do not maintain key-man life insurance on any of our executive officers. We cannot assure you that the services of such
personnel will continue to be available to us. On December 20, 2005, it was announced that our Chairman & Chief Executive Officer, C. Dean Metropoulos, would be joining J.W. Childs Associates, L.P. in the future as a Senior Partner but
would continue to serve as our Chief Executive Officer until a successor is named. On June 13, 2006, our Board of Directors appointed Jeffrey P. Ansell as Chief Executive Officer of PFGI. Mr. Ansells employment commenced on
July 5, 2006.

Our financial well-being could be jeopardized by unforeseen changes in our employees collective bargaining agreements or
shifts in union policy.

We employed approximately 3,100 people, with approximately 55% of our employees unionized. Although we consider our employee
relations to generally be good, failure to extend or renew our collective-bargaining agreements or a prolonged work stoppage or strike at any facility with union employees could have a material adverse effect on our business, financial condition or
results of operations. In addition, we cannot assure you that upon the expiration of our existing collective-bargaining agreements, new agreements will be reached without union action or that any such new agreements will be on terms wholly
satisfactory to us.

We are controlled by parties whose interests may not be aligned with yours.

As of December 31, 2006, the Sponsors collectively own approximately 57% of LLC. Accordingly, the Sponsors control our management and policies. Conflicts of interest
could arise in connection with potential acquisitions, the incurrence of additional indebtedness, the payment of dividends and other matters or as a result of transactions or potential transactions between the Sponsors or their affiliates, on the
one hand, and us, on the other hand.

In addition, our Chairman, C. Dean Metropoulos, in his capacity as Chief Executive Officer of CDM, may manage or have
an ownership interest in other companies, including competing food companies. Service as a director, involvement in management or ownership of both our company and other companies, other than our subsidiaries, could create or appear to create
potential conflicts of interest when faced with decisions that could have different implications for us and the other companies. A conflict of interest could also exist with respect to allocation of the time and attention of persons who serve,
manage or own both our company and one or more other companies.



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If the proposed merger with Peak Holdings is not completed, our business could be materially and adversely
affected.

The merger is subject to customary closing conditions, including regulatory approvals and other closing conditions.
Therefore, the merger may not be completed or may not be completed in the expected time period. As a consequence of the failure of the merger to be completed, as well as of some or all of these potential effects of the termination of the merger
agreement, our business could be materially and adversely affected, making it more difficult to retain employees and existing customers and to generate new business.

The fact that there is a merger pending could have an adverse effect on our business, revenue and results of operations.

While the merger proposal with Peak Holdings is pending, we are subject to a number of risks that may adversely affect our business, revenue and results of operations, including:



| |  |  | the diversion of management and employee attention and the unavoidable disruption to our relationships with our partners and customers may detract from our ability
to grow revenues and minimize costs;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | some of our employees may choose to terminate their employment with us during this period of uncertainty, thereby disrupting the quality of our service;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | we may be unable to respond effectively to competitive pressures, industry developments and future opportunities; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------



| |  |  | we have incurred and will continue to incur significant expenses related to the merger prior to its closing.
| | - |  | ------------------------------------------------------------------------------------------------------------



|ITEM 1B. | UNRESOLVED STAFF COMMENTS
|-------- | -------------------------

None



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##### Table of Contents

|ITEM 2. | PROPERTIES
|------- | ----------

As of December 31, 2006, we owned and operated the
following eight manufacturing facilities:



|                       |  |                                                |  |                    
|---------------------- |  | ---------------------------------------------- |  | -------------------
|Facility location      |  | Principal products                             |  | Facility size      
|Fayetteville, Arkansas |  | Frozen dinners and entrees                     |  | 335,000 square feet
|Omaha, Nebraska (1)    |  | Frozen dinners and entrees                     |  | 275,000 square feet
|Imlay City, Michigan   |  | Pickles, peppers, relish                       |  | 344,000 square feet
|Millsboro, Delaware    |  | Pickles, peppers, relish                       |  | 460,000 square feet
|Jackson, Tennessee     |  | Frozen breakfast, frozen pizza, frozen seafood |  | 302,000 square feet
|Mattoon, Illinois      |  | Bagels, frozen breakfast                       |  | 215,000 square feet
|St. Elmo, Illinois     |  | Syrup                                          |  | 250,000 square feet
|Ft. Madison, Iowa      |  | Canned Meat                                    |  | 450,000 square feet

---

|(1) | Facility closed as of the first quarter 2005.
|--- | ---------------------------------------------

On April 7, 2004, we
made and announced our decision to permanently close our Omaha, Nebraska production facility, as part of our 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, has been relocated to our 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 in Omaha. We anticipate that the Omaha facility will be sold during fiscal 2007.

On
April 29, 2005, we made and announced our decision to permanently close our Erie, Pennsylvania production facility, as part of our plan of consolidating and streamlining production activities after the Aurora merger. 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 the Companys Jackson, Tennessee production facility. Activities related
to the closure of the plant were completed in the first quarter of 2006 and the facility was sold in December 2006.

We have entered into co-packing
(third-party manufacturing) agreements with several manufacturers for certain of our finished products. We believe that our manufacturing facilities, together with our co-packing agreements, provide us sufficient capacity to accommodate our planned
internal growth over the next few years. The majority of our co-packed finished products are represented by our Duncan Hines product line, Aunt Jemima sandwich product line and certain seafood products. All of our Duncan Hines cake mixes, brownie
mixes, specialty mixes and frosting production equipment, including co-milling, blending and packaging equipment, is located at the contract manufacturers facilities. The current Duncan Hines co-packing agreement will expire in June 2015.

We lease office space in Mountain Lakes, New Jersey (our corporate headquarters); Cherry Hill, New Jersey; Greenwich, Connecticut; Lewisburg, Pennsylvania
and Mississauga, Ontario, under operating leases expiring in July 2012, May 2011, May 2010, November 2007 and November 2010, respectively.



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##### Table of Contents

ITEM 3. LEGAL PROCEEDINGS

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. In December 2006, the US District Court for the District of Delaware filed its Memorandum and Order affirming both (a) the February 20, 2004 Order of the Bankruptcy Court
confirming debtors First Amended Joint Reorganization Plan, and (b) the February 27, 2004 Order of the Bankruptcy Court granting debtors motion for summary judgment and dismissing the adversary proceeding. R2 Top Hat, Ltd. has
recently filed its Notice of Appeal to the 3rdCircuit Court of Appeals and the matter is pending. It is too early
to predict the outcome of the appeals. Included in the Companys accrued liabilities in the Consolidated Balance Sheet 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.

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.



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##### Table of Contents

The State Attorney General had originally proposed a penalty of $168,000 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 $110,000 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 parties are complying with the Joint Discovery Schedule required by
the Judge. As the Company believes no penalty will ultimately be due, no liability has been accrued at December 31, 2006.

The Company continues to
discharge its effluent to the City. By letter dated February 7, 2007, the City informed the Company that its sewage facility had been taken off of restricted status by the State. 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
operations, 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 has made an offer to settle the claim and has reserved the
amount in the Consolidated Balance Sheet as of December 31, 2006. The Company believes that resolution of such matters will not have a material impact on its financial condition, results of operations or cash flows.

Gilster Mary Lee Corporation v. Pinnacle Foods

In September 2006,
Gilster Mary Lee Corporation (Gilster) sued the Company alleging that monies were due to Gilster from the Company for a warehouse/handling fee under an existing contract. While certain of these fees are required by the contract, the
calculation of the fees is the issue in dispute. Although the parties have initiated settlement discussions, it is uncertain, at this time, if any settlement is likely. The case is in the very early stages of discovery. The Company intends to
vigorously defend against the warehouse/handling fee claim, but feels that it has adequately reserved for any potential claim that may utilimately become due under the contract. The Company believes that resolution of such matters will not have a
material impact on its financial condition, results of operations or cash flows.



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

None



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##### Table of Contents

PART II



|ITEM 5. | MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|------- | ------------------------------------------------------------------------------------------------------------

There is no established trading market for our common stock. As of December 31, 2006, one hundred percent of our common stock was held by our parent, Crunch Holding
Corp. We did not pay any dividends in respect to our common stock in fiscal 2006.

Our senior secured credit facilities and the indenture governing our
senior subordinated notes both contain covenants that limit our ability to pay dividends.



|ITEM 6. | SELECTED FINANCIAL DATA
|------- | -----------------------

In December 2004, the Board of Directors
approved a change to PFGIs fiscal year end from July 31 to the last Sunday in December. Accordingly, data for December 2004 presented in this report relates to the period from August 1, 2004 to December 26, 2004, otherwise known
as the transition year, and is referred to as the 21 weeks ended December 26, 2004.

For purposes of identification and description, the Company is
referred to as the Predecessor for the period prior to the Pinnacle Transaction, and the Successor for the period subsequent to the Pinnacle Transaction.

The following table sets forth selected historical consolidated financial and other operating data for the following periods: for PFGI and its subsidiaries as of and for the year ended December 31, 2006, as of
and for the year ended December 25, 2005, as of and for the 21 weeks ended December 26, 2004 and as of and for the 36 weeks ended July 31, 2004; for the Predecessor, as of and for the 16 weeks ended November 24, 2003, as of and
for the years ended July 31, 2003 and 2002.

The selected historical financial data for the years ended December 31, 2006 and December 25,
2005, the 21 weeks ended December 26, 2004, the 36 weeks ended July 31, 2004, and for the 16 weeks ended November 24, 2003 have been derived from PFGIs audited consolidated financial statements included elsewhere in this Form
10-K.

The selected financial data as of July 31, 2003 and 2002 and for the fiscal years then ended have been derived from audited financial
statements of the Predecessor.

The selected financial data presented below should be read in conjunction with our consolidated financial statements and
the notes to those statements and managements discussion and analysis of financial condition and results of operations included elsewhere in this Form 10-K.



18



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|                                                    |  |                                  |           |   |                                  |   |           |                               |  |   |                           |   |  |                               |            |   |                              |   |         |                              |  |   |         |   |  |   |         |  
|--------------------------------------------------- |  | -------------------------------- | --------- | - | -------------------------------- | - | --------- | ----------------------------- |  | - | ------------------------- | - |  | ----------------------------- | ---------- | - | ---------------------------- | - | ------- | ---------------------------- |  | - | ------- | - |  | - | ------- | -
|                                                    |  | PFGI                             |           |   | Predecessor                      |  
|($ in Thousands)                                    |  | Fiscal YearendedDecember 31,2006 |           |   | Fiscal YearendedDecember 25,2005 |   |           | 21 weeksendedDecember 26,2004 |  |   | 36 weeksendedJuly 31,2004 |   |  | 16 weeksendedNovember 24,2003 |            |   | Fiscal YearendedJuly 31,2003 |   |         | Fiscal YearendedJuly 31,2002 | 
|Statement of operations data:                       |  |                                  |           |   |                                  |   |           |                               |  |   |                           |   |  |                               |            |   |                              |   |         |                              |  |   |         |   |  |   |         |  
|Net sales                                           |  | $                                | 1,442,256 |   |                                  | $ | 1,255,735 |                               |  | $ | 511,190                   |   |  | $                             | 574,352    |   |                              | $ | 181,379 |                              |  | $ | 574,482 |   |  | $ | 574,456 |  
|Cost and expenses                                   |  |                                  |           |   |                                  |   |           |                               |  |   |                           |   |  |                               |            |   |                              |   |         |                              |  |   |         |   |  |   |         |  
|Cost of products sold                               |  |                                  | 1,122,646 |   |                                  |   | 997,198   |                               |  |   | 420,080                   |   |  |                               | 502,967    |   |                              |   | 134,233 |                              |  |   | 447,527 |   |  |   | 452,145 |  
|Marketing and selling expenses                      |  |                                  | 103,550   |   |                                  |   | 101,159   |                               |  |   | 53,588                    |   |  |                               | 57,910     |   |                              |   | 24,335  |                              |  |   | 57,915  |   |  |   | 51,458  |  
|Administrative expenses                             |  |                                  | 52,447    |   |                                  |   | 40,242    |                               |  |   | 15,216                    |   |  |                               | 32,258     |   |                              |   | 9,454   |                              |  |   | 32,878  |   |  |   | 32,346  |  
|Research and development expenses                   |  |                                  | 4,037     |   |                                  |   | 3,625     |                               |  |   | 1,459                     |   |  |                               | 2,436      |   |                              |   | 814     |                              |  |   | 3,040   |   |  |   | 3,552   |  
|Goodwill impairment charge                          |  |                                  |          |   |                                  |   | 54,757    |                               |  |   | 4,308                     |   |  |                               | 1,835      |   |                              |   |        |                              |  |   | 1,550   |   |  |   |        |  
|Other expense (income), net                         |  |                                  | 14,186    |   |                                  |   | 31,836    |                               |  |   | 5,680                     |   |  |                               | 38,096     |   |                              |   | 7,956   |                              |  |   | 6,492   |   |  |   | 5,137   |  
|                                                    |  |                                  |           |   |                                  |   |           |                               |  |   |                           |   |  |                               |            |   |                              |   |         |                              |  |   |         |   |  |   |         |  
|Total cost and expenses                             |  |                                  | 1,296,866 |   |                                  |   | 1,228,817 |                               |  |   | 500,331                   |   |  |                               | 635,502    |   |                              |   | 176,792 |                              |  |   | 549,402 |   |  |   | 544,638 |  
|                                                    |  |                                  |           |   |                                  |   |           |                               |  |   |                           |   |  |                               |            |   |                              |   |         |                              |  |   |         |   |  |   |         |  
|Earnings (loss) before interest and taxes           |  |                                  | 145,390   |   |                                  |   | 26,918    |                               |  |   | 10,859                    |   |  |                               | (61,150    | ) |                              |   | 4,587   |                              |  |   | 25,080  |   |  |   | 29,818  |  
|Interest expense                                    |  |                                  | 86,615    |   |                                  |   | 71,104    |                               |  |   | 26,260                    |   |  |                               | 26,240     |   |                              |   | 9,310   |                              |  |   | 11,592  |   |  |   | 14,513  |  
|Interest income                                     |  |                                  | 1,247     |   |                                  |   | 584       |                               |  |   | 120                       |   |  |                               | 320        |   |                              |   | 143     |                              |  |   | 476     |   |  |   | 807     |  
|                                                    |  |                                  |           |   |                                  |   |           |                               |  |   |                           |   |  |                               |            |   |                              |   |         |                              |  |   |         |   |  |   |         |  
|Earnings (loss) before income taxes                 |  |                                  | 60,022    |   |                                  |   | (43,602   | )                             |  |   | (15,281                   | ) |  |                               | (87,070    | ) |                              |   | (4,580  | )                            |  |   | 13,964  |   |  |   | 16,112  |  
|Provision (benefit) for income taxes                |  |                                  | 26,098    |   |                                  |   | (426      | )                             |  |   | 9,425                     |   |  |                               | (3,157     | ) |                              |   | (1,506  | )                            |  |   | 5,516   |   |  |   | 4,190   |  
|                                                    |  |                                  |           |   |                                  |   |           |                               |  |   |                           |   |  |                               |            |   |                              |   |         |                              |  |   |         |   |  |   |         |  
|Net earnings (loss)                                 |  | $                                | 33,924    |   |                                  | $ | (43,176   | )                             |  | $ | (24,706                   | ) |  | $                             | (83,913    | ) |                              | $ | (3,074  | )                            |  | $ | 8,448   |   |  | $ | 11,922  |  
|                                                    |  |                                  |           |   |                                  |   |           |                               |  |   |                           |   |  |                               |            |   |                              |   |         |                              |  |   |         |   |  |   |         |  
|Other financial data:                               |  |                                  |           |   |                                  |   |           |                               |  |   |                           |   |  |                               |            |   |                              |   |         |                              |  |   |         |   |  |   |         |  
|Net cash provided by (used in) operating activities |  | $                                | 161,563   |   |                                  | $ | 64,747    |                               |  | $ | (2,488                    | ) |  | $                             | 31,070     |   |                              | $ | (23,439 | )                            |  | $ | 32,951  |   |  | $ | 64,495  |  
|Net cash provided by (used in) investing activities |  |                                  | (213,657  | ) |                                  |   | (28,775   | )                             |  |   | (12,455                   | ) |  |                               | (1,058,781 | ) |                              |   | (1,511  | )                            |  |   | (8,795  | ) |  |   | (26,812 | )
|Net cash provided by (used in) financing activities |  |                                  | 63,912    |   |                                  |   | (37,688   | )                             |  |   | (20,639                   | ) |  |                               | 1,018,534  |   |                              |   | (262    | )                            |  |   | (17,016 | ) |  |   | 9,885   |  
|Depreciation and amortization                       |  |                                  | 42,187    |   |                                  |   | 39,088    |                               |  |   | 17,068                    |   |  |                               | 24,570     |   |                              |   | 6,136   |                              |  |   | 22,948  |   |  |   | 21,231  |  
|Capital expenditures                                |  |                                  | 26,202    |   |                                  |   | 30,931    |                               |  |   | 8,073                     |   |  |                               | 9,826      |   |                              |   | 1,511   |                              |  |   | 8,787   |   |  |   | 19,452  |  
|Ratio of earnings to fixed charges(1)               |  |                                  | 1.68x     |   |                                  |   | NM        |                               |  |   | NM                        |   |  |                               | NM         |   |                              |   | NM      |                              |  |   | 2.10x   |   |  |   | 2.01x   |  
|Balance sheet data:                                 |  |                                  |           |   |                                  |   |           |                               |  |   |                           |   |  |                               |            |   |                              |   |         |                              |  |   |         |   |  |   |         |  
|Cash and cash equivalents                           |  | $                                | 12,337    |   |                                  | $ | 519       |                               |  | $ | 2,235                     |   |  | $                             | 37,781     |   |                              | $ |        |                              |  | $ | 72,128  |   |  | $ | 64,971  |  
|Working capital(2)                                  |  |                                  | 105,569   |   |                                  |   | 84,517    |                               |  |   | 77,302                    |   |  |                               | 81,524     |   |                              |   |        |                              |  |   | 125,755 |   |  |   | 109,264 |  
|Total assets                                        |  |                                  | 1,792,081 |   |                                  |   | 1,636,494 |                               |  |   | 1,765,625                 |   |  |                               | 1,784,610  |   |                              |   |        |                              |  |   | 466,121 |   |  |   | 477,988 |  
|Total debt(3)                                       |  |                                  | 920,963   |   |                                  |   | 888,648   |                               |  |   | 943,080                   |   |  |                               | 944,328    |   |                              |   |        |                              |  |   | 175,000 |   |  |   | 190,009 |  
|Total liabilities                                   |  |                                  | 1,353,726 |   |                                  |   | 1,279,970 |                               |  |   | 1,372,258                 |   |  |                               | 1,366,595  |   |                              |   |        |                              |  |   | 287,634 |   |  |   | 308,540 |  
|Shareholders equity (deficit)                      |  |                                  | 438,355   |   |                                  |   | 356,524   |                               |  |   | 393,367                   |   |  |                               | 418,015    |   |                              |   |        |                              |  |   | 178,487 |   |  |   | 169,448 |  



|(1) | For purposes of computing the ratio of earnings to fixed charges, earnings consist of earnings (loss) before income taxes and fixed charges. Fixed charges consist of
(i) interest expense, including amortization of debt acquisition costs and (ii) one-third of rent expense, which management believes to be representative of the interest factor thereon. The Predecessors earnings for the 16 weeks
ended November 24, 2003, were insufficient to cover fixed charges by $4.6 million. PFGIs earnings for the 36 weeks ended July 31, 2004, the 21 weeks ended December 26, 2004 and fiscal 2005 were insufficient to cover fixed
charges by $87.1 million, $15.3 million and $43.6 million, respectively.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | Working capital excludes notes payable, revolving debt facility and current portion of long term debt.
|--- | ------------------------------------------------------------------------------------------------------



|(3) | Total debt includes notes payable, revolving debt facility and current portion of long term debt
|--- | ------------------------------------------------------------------------------------------------



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##### Table of Contents

|ITEM 7: | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------

(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 footnotes. This section contains certain
forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on managements beliefs, assumptions and expectations of our future economic performance,
taking into account the information currently available to management. These statements are not statements of historical fact. Forward-looking statements involve risks and uncertainties that may cause our actual results, performance or financial
condition to differ materially from the expectations of future results, performance or financial condition we express or imply in any forward-looking statements. Factors that could contribute to these differences include, but are not limited to:
changes in demand for our products, changes in distribution channels or competitive conditions in the markets where we operate, loss of our intellectual property rights, fluctuations in the price or supply of raw materials, seasonality, our reliance
on co-packers to meet our manufacturing needs, competition and industry trends. The words believe, may, will, should, anticipate, estimate, expect,
intend, objective, seek, strive, or similar words, or the negative of these words, identify forward-looking statements entirely by these cautionary factors.

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 product lines (brands): 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 (brands): condiments (Vlasic, Open Pit), baking (Duncan Hines), syrup (Mrs. Butterworths and Log Cabin), and canned meat (Armour).

On
February 10, 2007, Crunch Holdings Corp., our parent company, entered into an Agreement and Plan of Merger with Peak Holdings LLC (Peak Holdings), a Delaware limited liability company controlled by affiliates of The Blackstone
Group, Peak Acquisition Corp (Peak Acquisition), a wholly owned subsidiary of Peak Holdings, and Peak Finance LLC, an indirect wholly owned subsidiary of Peak Acquisition, providing for the acquisition of Crunch Holding Corp. Under the
terms of Agreement and Plan of Merger, the purchase price for Crunch Holding Corp. will be $2,162.5 million in cash plus an amount equal to the aggregate exercise prices of vested options less the amount of indebtedness of Crunch Holding Corp. and
its subsidiaries outstanding immediately prior to the closing and certain transaction costs, subject to purchase price adjustments based on the amount of our working capital and indebtedness as of the closing.

As described in Note 1 to PFGIs audited consolidated financial statements for fiscal 2006, a merger (the Pinnacle Transaction) occurred on
November 25, 2003. For purposes of identification and description, the Company is referred to as the Predecessor for the period prior to the Pinnacle Transaction, and the Successor for the period subsequent to the
Pinnacle Transaction. Also, as described in Note 3 to PFGIs audited consolidated financial statements for fiscal 2006, 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. The consolidated financial statements include the results of operations of the Aurora businesses beginning March 19, 2004.

Also 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 $189.2 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 $1.0 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 under 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
operations of the Armour Business beginning March 1, 2006.



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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 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. The revolving credit facility expires November 25, 2009. There were no borrowings outstanding under the revolving credit facility as of
December 31, 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 due
December 1, 2013. The terms of the November 2003 and February 2004 notes are the same and are issued under the same indenture.

In fiscal 2004,
our earnings (loss) before interest and taxes were negatively impacted by certain items. These items included the following:



| |  |  | In December 2003 and March 2004, we incurred charges totaling $18.4 million for non-cash equity compensation for certain ownership units of LLC issued to CDM, which
is controlled by certain members of PFGIs management.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Subsequent to the Pinnacle Transaction and Aurora Merger, we incurred non-cash charges to earnings totaling $39.5 million related to the increase in the fair value
of inventory acquired.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In April 2004, we made and announced our decision to permanently close our Omaha, Nebraska production facility, as part of the Companys plan of consolidating
and streamlining production activities after the Aurora Merger. During fiscal 2004, we incurred $11.8 million of charges pertaining to the closure.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In October 2004, we decided to discontinue producing products under the Chefs Choice trade name, which is reported under our frozen foods segment. In
connection with this decision, we recorded in fiscal 2004 non-cash impairment charges totaling $4.8 million related to goodwill ($1.8 million), amortizable intangibles ($1.7 million), and fixed assets ($1.3 million).
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We recorded a non-cash impairment charge of $1.3 million for the write down of the Avalon Bay trade name due to lower than expected future sales.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In November 2003, we also recorded an additional impairment charge of $1.3 million (which reduced the balance to $0) related to the carrying value of the trade name
for the Kings Hawaiian business.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

During the transition year, our earnings (loss) before interest and taxes were negatively
impacted by certain items. These items included the following:



| |  |  | We incurred $3.9 million of charges pertaining to the closure of the Omaha, Nebraska production facility.
| | - |  | ---------------------------------------------------------------------------------------------------------



| |  |  | We recorded non-cash impairment charges to goodwill and tradenames totaling $4.3 million and less than $0.1 million, respectively. The write downs were the result
of higher than expected costs in the bagels and frozen dinners business units.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

During fiscal 2005, our earnings (loss) before interest
and taxes were negatively impacted by certain items. These items included:



| |  |  | We incurred $1.3 million of charges pertaining to the closure of the Omaha, Nebraska production facility.
| | - |  | ---------------------------------------------------------------------------------------------------------



| |  |  | In April 2005, we announced plans to shutdown a production line in our Mattoon, Illinois production facility and incurred a non-cash charge for an impairment write
down of fixed assets totaling $0.9 million.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In April 2005, we announced plans to permanently close the Erie, Pennsylvania production facility and incurred charges totaling $5.9 million pertaining to employee
severance and related costs and other plant closing costs. These charges were included in the results of operations for fiscal 2005 and are recorded in Other expense (income), net in the Consolidated Statement of Operations. Additionally, in
connection with the closure of the Erie, Pennsylvania plant, we recorded $4.8 million of accelerated depreciation expense, which is recorded in cost of products sold in the Consolidated Statement of Operations.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | Our earnings were impacted by non-cash impairment charges to goodwill and tradenames totaling $54.8 million and $19.3 million, respectively. The write downs were
primarily the result of forecasting significantly reduced sales in 2006 and thereafter in the frozen seafood reporting unit caused by the difficulties and delays in transferring production from our Erie, Pennsylvania facility to our Jackson,
Tennessee facility, as well as higher than expected trade marketing spending and material costs in our pizza reporting unit.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

During
fiscal 2006, our earnings (loss) before interest and taxes were negatively impacted by certain items. These items included:



| |  |  | We recorded charges totaling $4.1 million in connection with the closure and plant consolidation costs related to closing the Omaha, Nebraska and Erie, Pennsylvania
production facilities. 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.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We recorded a charge of $4.8 million related to the flow through of the increase in the fair market value of inventories acquired in the Armour Business.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We recorded non-cash equity compensation of $1.4 million for certain ownership units of LLC issued to CDM, which is controlled by certain members of PFGIs
management, in connection with the Armour acquisition.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We recorded non-cash equity compensation of $1.9 million related to stock options granted to employees of PFGI and accounted for in accordance with SFAS
No. 123(R), Share-Based Payment (Revised 2004), which was adopted at the start of fiscal 2006.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Due to increased competition in the frozen breakfast category, management evaluated the expected future growth rates of the Aunt Jemima branded sales and as a
result, recorded a non-cash impairment of the tradename asset in the amount of $2.7 million.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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 fiscal 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
81/4% senior subordinated notes. Factors that could influence our ability to meet these financial covenants
include (i) lower demand for our products and (ii) higher than anticipated trade and consumer coupon spending.

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.



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We are currently finalizing the integration of 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 CONSOLIDATION

Omaha, Nebraska production facility

During fiscal 2006, fiscal 2005, the transition year and fiscal 2004, we recorded restructuring charges totaling $2.7 million, $1.3 million, $3.9 million and $11.8
million, respectively, pertaining to our decision to permanently close the Omaha, Nebraska production facility. These charges are recorded as a component of Other expense (income), net in the Consolidated Statement of Operations and are reported in
the frozen foods segment. 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.

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. During the third quarter of 2006 and based upon current offers, the Company lowered the carrying value of the plant
and equipment and recorded an additional impairment charge totaling $2.5 million.

The severance costs, which include continuation of employee benefits for
salaried employees, total $2.6 million. As of December 31, 2006, all of the severance costs have been 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 $4.5 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.



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##### Table of Contents

Erie, Pennsylvania Production Facility

During fiscal 2006 and fiscal 2005, we recorded restructuring charges totaling $1.4 million and $5.9 million, respectively, pertaining to our decision to permanently close the Erie, Pennsylvania production facility.
The charges are recorded as a component of Other expense (income), net in the Consolidated Statement of Operations and are reported in the frozen foods segment. 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, will be relocated primarily to our Jackson, Tennessee production facility. Activities related to the
closure of the plant were completed in 2006 and resulted 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 $0.9 million. As of December 31, 2006, all of the severance costs have been paid.

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 was 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 $0.5 million during the fiscal 2006 and $4.8 million during fiscal 2005. No further depreciation
expense on these assets will be recorded. During the third quarter of 2006 and based upon current offers, the Company lowered the carrying value of the plant and equipment and recorded an impairment charge totaling $0.3 million. In the fourth
quarter of 2006, the plant and any remaining equipment was sold for its carrying value and no additional gain or loss was recorded.

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 have 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 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 fiscal 2005 and reported in the frozen foods segment. We expect that any costs associated with the removal of the assets
would be offset from the proceeds received from the sale of those assets.

As of December 31, 2006, we had an accrued restructuring liability of $0.8
million, of which $0.2 million related to the Omaha plant shutdown and the balance related to severance costs from the Aurora Merger ($0.1 million) and the acquisition of the Armour Foods Business ($0.5 million). We expect all of these costs to be
paid during the next twelve months.

IMPAIRMENT OF GOODWILL AND OTHER
LONG-LIVED ASSETS

In October 2004, we decided to discontinue producing products under the Chefs
Choice trade name. In accordance with the provisions of SFAS No. 142, Goodwill and Other Intangible Assets, we prepared a discounted cash flow analysis which indicated that the book value of the assets related to the Chefs
Choice reporting unit exceeded its estimated fair value and that a goodwill impairment had occurred. In addition, as a result of the goodwill analysis, we assessed whether there had been an impairment of our long-lived assets in accordance with SFAS
No. 144. We concluded that the book value of the assets related to the Chefs Choice products were higher than their expected undiscounted future cash flows and that an impairment had occurred. Accordingly, we recorded non-cash impairment
charges in the Chefs Choice reporting unit of $4.8 million in fiscal 2004. The charges included $1.8 million of goodwill impairment, $1.7 million impairment of amortizable intangibles (recipes) and $1.3 million of fixed asset write downs.



24



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##### Table of Contents

Additionally, in connection with our annual impairment test in accordance with SFAS No. 142, it was determined that
due to lower than expected future sales, the carrying value of the trade name for the Avalon Bay product was impaired. We recorded a non-cash impairment charge of $1.3 million in fiscal 2004 related to the write down of the trade name value.

During the transition year, we changed our method of accounting for goodwill and intangible assets
by changing the time of year the annual impairment test is performed from July 31st(the last day of our old
fiscal year) to the last Sunday of December (the last day of our new fiscal year). The annual evaluation performed as of December 26, 2004 resulted in a $4.3 million non-cash impairment charge related to the goodwill in our bagels reporting
unit ($2.7 million) and dinners reporting unit ($1.6 million), both of which are in the frozen foods segment. The impairment charges adjusted the carrying value of the segments goodwill to its implied fair value. During the transition year, we
experienced higher costs in our bagels and frozen dinners business units and expect these higher costs to continue into the future. In addition, as a result of the impairment charges, we assessed whether there had been an impairment of our
tradenames in accordance with SFAS No. 142. We concluded that the book value of the Lenders trade name asset was higher than its fair value and that an impairment had occurred. Accordingly, we recorded a non-cash charge in the frozen
foods segment during the transition year related to the write down to fair value of the trade name of less than $0.1 million, which is recorded in the Other expense (income), net line item of the Consolidated Statement of Operations. Further, we
assessed whether there had been an impairment of our long-lived assets in the bagels and frozen dinners reporting units and determined that the undiscounted cash flows were sufficient to recover the carrying value of such long-lived assets.

In 2005, we experienced difficulties and delays in transferring the frozen seafood production from the Erie, Pennsylvania facility to the Jackson,
Tennessee facility. Due to the delays caused by the difficulties encountered, we forecasted significantly reduced sales of frozen seafood products in 2006 and thereafter. Due to the reduced sales and corresponding projected decline in cash flows, we
concluded that the intangible assets related to the Frozen Seafood reporting unit have been impaired. These impairments included goodwill ($44.9 million) and tradenames ($18.1 million). We have included these charges, which are recorded in the
frozen foods segment, in the Consolidated Statement of Operations for fiscal 2005. The tradename impairment is recorded as part of the Other expense (income), net line item.

Additionally, in 2005, we experienced higher than expected costs, including trade marketing spending and material costs, in the pizza reporting unit, from which we are not expecting relief in the near-term. Due to the
higher costs, we concluded that all the goodwill related to the pizza reporting unit has been impaired and recorded a charge in the amount of $9.9 million on the Consolidated Statement of Operations for fiscal 2005. This charge is reported in the
frozen foods segment of the business.

In the fourth quarter of 2005, we reassessed the long-term growth rate of sales of the products under the
Lenders brand. We concluded that the growth rates were less than anticipated in the prior year and that a further impairment of the tradename asset had occurred. As a result of the decline, we have recognized an impairment in the tradename for
the Lenders in the amount of $1.1 million. The charge is recorded in the Other expense (income), net line item on the Consolidated Statements of Operations and is reported in the frozen foods segment.

In the fourth quarter of 2006, the Company reassessed the long-term growth rate of sales of the products under the Aunt Jemima brand. Due to increased competition,
management reduced the expected future growth rates and as a result, recorded an impairment of the tradename asset in the amount of $2.7 million. The charge is recorded in the Other expense (income), net line item on the Consolidated Statements of
Operations and is reported in the frozen foods segment.



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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 fiscal 2006, fiscal 2005 and the corresponding 52 weeks ended December 26, 2004 as well as the transition year ended December 26, 2004 and the
corresponding 21 weeks ended December 28, 2003.

For the fiscal year ended,



|                                                                        |  |              |         |              |   |                               |  |            |         |            |   |                               |  |            |       |            |   |                               |  |   |         |  |   |       |  |   |      
|----------------------------------------------------------------------- |  | ------------ | ------- | ------------ | - | ----------------------------- |  | ---------- | ------- | ---------- | - | ----------------------------- |  | ---------- | ----- | ---------- | - | ----------------------------- |  | - | ------- |  | - | ----- |  | - | -----
|                                                                        |  | Consolidated |         | Frozen Foods |   | Dry Foods                    
|                                                                        |  | Fiscal2006   |         | Fiscal2005   |   | 52 weeksendedDecember 26,2004 |  | Fiscal2006 |         | Fiscal2005 |   | 52 weeksendedDecember 26,2004 |  | Fiscal2006 |       | Fiscal2005 |   | 52 weeksendedDecember 26,2004
|Shipments                                                               |  | $            | 1,957.0 |              | $ | 1,755.9                       |  | $          | 1,461.7 |            | $ | 879.5                         |  | $          | 929.5 |            | $ | 789.6                         |  | $ | 1,077.5 |  | $ | 826.4 |  | $ | 672.1
|Less: Aggregate trade marketing and consumer coupon redemption expenses |  |              | 496.1   |              |   | 464.6                         |  |            | 399.1   |            |   | 222.4                         |  |            | 243.0 |            |   | 213.4                         |  |   | 273.7   |  |   | 221.6 |  |   | 185.7
|Less: Slotting expense                                                  |  |              | 18.6    |              |   | 35.6                          |  |            | 26.7    |            |   | 12.4                          |  |            | 15.8  |            |   | 14.2                          |  |   | 6.2     |  |   | 19.8  |  |   | 12.5 
|                                                                        |  |              |         |              |   |                               |  |            |         |            |   |                               |  |            |       |            |   |                               |  |   |         |  |   |       |  |   |      
|Net sales                                                               |  | $            | 1,442.3 |              | $ | 1,255.7                       |  | $          | 1,035.9 |            | $ | 644.7                         |  | $          | 670.7 |            | $ | 562.0                         |  | $ | 797.6   |  | $ | 585.0 |  | $ | 473.9
|                                                                        |  |              |         |              |   |                               |  |            |         |            |   |                               |  |            |       |            |   |                               |  |   |         |  |   |       |  |   |      

For the 21 weeks ended,



|                                                                        |  |                  |       |                  |   |                  |  |                  |       |                  |   |                  |  |   |       |  |   |      
|----------------------------------------------------------------------- |  | ---------------- | ----- | ---------------- | - | ---------------- |  | ---------------- | ----- | ---------------- | - | ---------------- |  | - | ----- |  | - | -----
|                                                                        |  | Consolidated     |       | Frozen Foods     |   | Dry Foods       
|                                                                        |  | December 26,2004 |       | December 28,2003 |   | December 26,2004 |  | December 28,2003 |       | December 26,2004 |   | December 28,2003
|Shipments                                                               |  | $                | 730.7 |                  | $ | 292.2            |  | $                | 389.9 |                  | $ | 186.0            |  | $ | 340.8 |  | $ | 106.2
|Less: Aggregate trade marketing and consumer coupon redemption expenses |  |                  | 207.4 |                  |   | 57.1             |  |                  | 111.8 |                  |   | 37.0             |  |   | 95.6  |  |   | 20.1 
|Less: Slotting expense                                                  |  |                  | 12.1  |                  |   | 4.1              |  |                  | 6.9   |                  |   | 0.9              |  |   | 5.2   |  |   | 3.2  
|                                                                        |  |                  |       |                  |   |                  |  |                  |       |                  |   |                  |  |   |       |  |   |      
|Net sales                                                               |  | $                | 511.2 |                  | $ | 231.0            |  | $                | 271.2 |                  | $ | 148.1            |  | $ | 240.0 |  | $ | 82.9 
|                                                                        |  |                  |       |                  |   |                  |  |                  |       |                  |   |                  |  |   |       |  |   |      



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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.

The
discussion below for the 21 weeks ended December 28, 2003 is based on the combination of the Predecessors consolidated financial results for the 16 week period ended November 24, 2003 and the Successors consolidated financial
results for the 5 weeks ended December 28, 2003. This combination represents what we believe is the most meaningful basis for comparison of the transition year with the corresponding period of the prior year, although the combination is not in
accordance with GAAP. We believe that this is the most meaningful basis for comparison because the customer base, products, manufacturing facilities and types of marketing programs were the same under the Predecessor as they are under the Successor.
Also, the results for the transition year include the results of operations of the Aurora businesses, which were acquired on March 19, 2004.

Additionally, the discussion below of the fiscal year ended December 26, 2004 is based on the Successors unaudited consolidated financial statements for the 52 weeks ended December 26, 2004 and is provided for comparison
purposes only.



|                                          |  |                   |         |  |                  |   |  |                     |         |  |                  |   |  |                     |         |   |  |       |   |  |   |       |  |       |   |  |   |       |   |  |       |  
|----------------------------------------- |  | ----------------- | ------- |  | ---------------- | - |  | ------------------- | ------- |  | ---------------- | - |  | ------------------- | ------- | - |  | ----- | - |  | - | ----- |  | ----- | - |  | - | ----- | - |  | ----- | -
|                                          |  | Fiscal year ended |         |  | 21 weeks ended   |  
|(In millions)                             |  | December 31,2006  |         |  | December 25,2005 |   |  | December 26,2004(1) |         |  | December 26,2004 |   |  | December 28,2003(2) |        
|Net sales                                 |  | $                 | 1,442.3 |  | 100.0            | % |  | $                   | 1,255.7 |  | 100.0            | % |  | $                   | 1,035.9 |   |  | 100.0 | % |  | $ | 511.2 |  | 100.0 | % |  | $ | 231.0 |   |  | 100.0 | %
|Costs and expenses                        |  |                   |         |  |                  |   |  |                     |         |  |                  |   |  |                     |         |   |  |       |   |  |   |       |  |       |   |  |   |       |   |  |       |  
|Cost of products sold                     |  |                   | 1,122.6 |  | 77.8             | % |  |                     | 997.2   |  | 79.4             | % |  |                     | 878.1   |   |  | 84.8  | % |  |   | 420.0 |  | 82.2  | % |  |   | 179.3 |   |  | 77.6  | %
|Marketing and selling expenses            |  |                   | 103.6   |  | 7.2              | % |  |                     | 101.2   |  | 8.1              | % |  |                     | 105.0   |   |  | 10.1  | % |  |   | 53.6  |  | 10.5  | % |  |   | 30.8  |   |  | 13.3  | %
|Administrative expenses                   |  |                   | 52.4    |  | 3.6              | % |  |                     | 40.2    |  | 3.2              | % |  |                     | 44.6    |   |  | 4.3   | % |  |   | 15.2  |  | 3.0   | % |  |   | 12.3  |   |  | 5.3   | %
|Research and development expenses         |  |                   | 4.1     |  | 0.3              | % |  |                     | 3.6     |  | 0.3              | % |  |                     | 3.7     |   |  | 0.4   | % |  |   | 1.5   |  | 0.3   | % |  |   | 1.1   |   |  | 0.5   | %
|Goodwill impairment charge                |  |                   |        |  | 0.0              | % |  |                     | 54.8    |  | 4.4              | % |  |                     | 6.1     |   |  | 0.6   | % |  |   | 4.3   |  | 0.8   | % |  |   |      |   |  | 0.0   | %
|Other expense (income), net               |  |                   | 14.2    |  | 1.0              | % |  |                     | 31.8    |  | 2.5              | % |  |                     | 31.9    |   |  | 3.1   | % |  |   | 5.7   |  | 1.1   | % |  |   | 19.8  |   |  | 8.6   | %
|                                          |  |                   |         |  |                  |   |  |                     |         |  |                  |   |  |                     |         |   |  |       |   |  |   |       |  |       |   |  |   |       |   |  |       |  
|Total costs and expenses                  |  | $                 | 1,296.9 |  | 89.9             | % |  | $                   | 1,228.8 |  | 97.9             | % |  | $                   | 1,069.4 |   |  | 103.2 | % |  | $ | 500.3 |  | 97.9  | % |  | $ | 243.3 |   |  | 105.3 | %
|                                          |  |                   |         |  |                  |   |  |                     |         |  |                  |   |  |                     |         |   |  |       |   |  |   |       |  |       |   |  |   |       |   |  |       |  
|Earnings (loss) before interest and taxes |  | $                 | 145.4   |  | 10.1             | % |  | $                   | 26.9    |  | 2.1              | % |  | $                   | (33.5   | ) |  | -3.2  | % |  | $ | 10.9  |  | 2.1   | % |  | $ | (12.3 | ) |  | -5.3  | %
|                                          |  |                   |         |  |                  |   |  |                     |         |  |                  |   |  |                     |         |   |  |       |   |  |   |       |  |       |   |  |   |       |   |  |       |  



|(1) | Represents the unaudited 52 weeks ended December 26, 2004
|--- | ---------------------------------------------------------



|(2) | Represents the combined 21 weeks ended December 28, 2003
|--- | --------------------------------------------------------



|                                          |  |                   |         |   |                  |   |         |                     |  |   |                  |   |  |                     |       |   |  |   |       |  
|----------------------------------------- |  | ----------------- | ------- | - | ---------------- | - | ------- | ------------------- |  | - | ---------------- | - |  | ------------------- | ----- | - |  | - | ----- | -
|                                          |  | Fiscal year ended |         |   | 21 weeks ended   |  
|(In millions)                             |  | December 31,2006  |         |   | December 25,2005 |   |         | December 26,2004(1) |  |   | December 26,2004 |   |  | December 28,2003(2) |      
|Net sales                                 |  |                   |         |   |                  |   |         |                     |  |   |                  |   |  |                     |       |   |  |   |       |  
|Frozen foods                              |  | $                 | 644.7   |   |                  | $ | 670.7   |                     |  | $ | 562.0            |   |  | $                   | 271.2 |   |  | $ | 148.1 |  
|Dry foods                                 |  |                   | 797.6   |   |                  |   | 585.0   |                     |  |   | 473.9            |   |  |                     | 240.0 |   |  |   | 82.9  |  
|                                          |  |                   |         |   |                  |   |         |                     |  |   |                  |   |  |                     |       |   |  |   |       |  
|Total                                     |  | $                 | 1,442.3 |   |                  | $ | 1,255.7 |                     |  | $ | 1,035.9          |   |  | $                   | 511.2 |   |  | $ | 231.0 |  
|                                          |  |                   |         |   |                  |   |         |                     |  |   |                  |   |  |                     |       |   |  |   |       |  
|Earnings (loss) before interest and taxes |  |                   |         |   |                  |   |         |                     |  |   |                  |   |  |                     |       |   |  |   |       |  
|Frozen foods                              |  | $                 | 43.5    |   |                  | $ | (51.6   | )                   |  | $ | (57.1            | ) |  | $                   | (22.6 | ) |  | $ | 4.7   |  
|Dry foods                                 |  |                   | 121.7   |   |                  |   | 95.0    |                     |  |   | 46.7             |   |  |                     | 38.5  |   |  |   | 7.4   |  
|Unallocated corporate expenses            |  |                   | (19.8   | ) |                  |   | (16.5   | )                   |  |   | (23.1            | ) |  |                     | (5.0  | ) |  |   | (24.4 | )
|                                          |  |                   |         |   |                  |   |         |                     |  |   |                  |   |  |                     |       |   |  |   |       |  
|Total                                     |  | $                 | 145.4   |   |                  | $ | 26.9    |                     |  | $ | (33.5            | ) |  | $                   | 10.9  |   |  | $ | (12.3 | )
|                                          |  |                   |         |   |                  |   |         |                     |  |   |                  |   |  |                     |       |   |  |   |       |  
|Depreciation and amortization             |  |                   |         |   |                  |   |         |                     |  |   |                  |   |  |                     |       |   |  |   |       |  
|Frozen foods                              |  | $                 | 21.0    |   |                  | $ | 25.1    |                     |  | $ | 26.4             |   |  | $                   | 10.8  |   |  | $ | 5.0   |  
|Dry foods                                 |  |                   | 21.2    |   |                  |   | 14.0    |                     |  |   | 13.8             |   |  |                     | 6.3   |   |  |   | 2.6   |  
|                                          |  |                   |         |   |                  |   |         |                     |  |   |                  |   |  |                     |       |   |  |   |       |  
|Total                                     |  | $                 | 42.2    |   |                  | $ | 39.1    |                     |  | $ | 40.2             |   |  | $                   | 17.1  |   |  | $ | 7.6   |  
|                                          |  |                   |         |   |                  |   |         |                     |  |   |                  |   |  |                     |       |   |  |   |       |  



|(1) | Represents the unaudited 52 weeks ended December 26, 2004
|--- | ---------------------------------------------------------



|(2) | Represents the combined 21 weeks ended December 28, 2003
|--- | --------------------------------------------------------



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Fiscal year ended December 31, 2006 (53 weeks) compared to the fiscal year ended December 25, 2005 (52
weeks)

Net sales. Shipments in the year ended December 31, 2006 were $1,957.0 million, an increase of $201.1 million, compared to
shipments in the year ended December 25, 2005 of $1,755.9 million. The Armour acquisition resulted in $217.7 million of increased shipments. All other businesses were down $16.6 million, principally driven by decreases in sales of our
Swanson and Hungry-Man frozen dinner business, and our Seafood business sales. Net sales in the year ended December 31, 2006 were $1,442.3 million, an increase of $186.6 million, compared to net sales in the year ended
December 25, 2005 of $1,255.7 million. The Armour acquisition resulted in $180.8 million of increased net sales. Net Sales of all other businesses increased $5.8 million, which was the result of the decline in shipments of $16.6 million offset
by a $22.4 million decrease in aggregate trade marketing and consumer coupon redemption expenses and slotting expenses.

Frozen foods:Shipments in the year ended December 31, 2006 were $879.5 million, a decrease of $50.0 million. The change was driven by a $34.2 million decrease in our Swanson and Hungry-Man frozen dinner business, resulting from a reduction of
unprofitable trade promotions. In addition, our Seafood business sales were down $26.7 million, 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.
The balance of the change was driven by increases in our Celeste and frozen foodservice product line sales. Aggregate trade marketing and consumer coupon redemption expenses and slotting expenses decreased $24.0 million, the result of lower trade
marketing, principally in Swanson trade promotions referenced above, and new product launch activity in 2006. As a result, frozen foods net sales decreased $26.0 million, again resulting from sales declines in the Swanson and Hungry-Man frozen
dinner business and the Seafood business.

Dry foods:Shipments in the year ended December 31, 2006 were $1,077.5 million, an
increase of $251.1 million. The acquired Armour business increased shipments $217.7 million. The increase in our remaining businesses was due to increases in our Duncan Hines, private label, Canada, and syrup product line sales. Aggregate trade
marketing and consumer coupon redemption expenses increased $38.5 million. The Armour acquisition resulted in $36.9 million of increased aggregate trade marketing and consumer coupon redemption expenses. On the remaining businesses, aggregate trade
marketing and consumer coupon redemption expenses increased $1.6 million. As a result, dry foods net sales increased $212.6 million, of which $180.8 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 $31.8 million, or 5.4%, for the fiscal year ended December 31, 2006, principally due to higher product shipments.

Cost of products sold. Our cost of products sold was $1,122.6 million, or 77.8% of net sales in the year ended December 31, 2006, versus cost of
products sold of $997.2 million, or 79.4% of net sales in the year ended December 25, 2005, a 1.6 percentage point improvement. The products acquired in the Armour business resulted in an additional $157.6 million of cost of products sold
for the fiscal year ended December 31, 2006, including additional costs of $4.8 million related to post-acquisition sales of inventories written up to fair value at the date of the Armour acquisition. For the remaining businesses cost of
products sold was 76.5% of net sales, or a 2.9 percentage point improvement. The principal driver of the improved cost of product sold as a percent of net sales rate was reduced freight and distribution expenses accounting for a 1.3 percentage point
improvement. Additionally, there 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 0.9
percentage points of the improvement.

Marketing and selling expenses. Marketing and selling expenses were $103.6 million, or 7.2% of net sales, in
the year ended December 31, 2006 compared to $101.2 million, or 8.1% of net sales, in the year ended December 25, 2005. The acquisition of the Armour business contributed $3.5 million of increase for the fiscal year ended
December 31, 2006. On the remaining businesses, the change was due to lower advertising expense of $10.1 million, primarily in our Seafood and Duncan Hines businesses, the result of reduced new product introductions, and increased other
consumer focused marketing programs of $2.7 million, and increase selling related expense of $5.3 million resulting from increased product sales, as well as higher management incentive plan expense.



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Administrative expenses. Administrative expenses were $52.4 million in the year ended December 31, 2006
compared to $40.2 million in the year ended December 25, 2005. The acquisition of the Armour business contributed $4.0 million of an increase for the fiscal year ended December 31, 2006. Included in administrative expenses for the
fiscal year ended December 31, 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, as well
as $1.3 million of stock option expense in accordance with SFAS No. 123(R), which was adopted at the beginning of 2006. In addition, we resumed the payment of the management fees to our equity sponsors beginning in the second quarter of 2006,
in accordance with Amendment No. 2 to our senior secured credit facilities, which were $0.8 million in 2006 compared to zero in 2005. In the fiscal year ended December 25, 2005, a $1.5 million favorable adjustment to our bad debt reserve
was recorded resulting from improvements in our accounts receivable aging ($1.0 million) and cash collections of previously written off accounts ($0.5 million). The balance of the increase resulted principally from a target level management
incentive plan expense in 2006 compared to approximately a 30% of target management incentive plan expense in 2005.

Research and development
expenses. Research and development expenses were $4.1 million, or 0.3% of net sales, in the year ended December 31, 2006 compared with $3.6 million, or 0.3% of net sales, in the year ended December 25, 2005.

Goodwill impairment charge. Goodwill impairment charges, which are discussed above under Impairment of Goodwill and Other Long-lived Assets, were
$54.8 million in the year ended December 25, 2005. Of the total charge in fiscal 2005, which was recorded in the frozen foods segment, $44.9 million related to the impairment of the frozen seafood reporting unit and $9.9 million related to the
impairment of the pizza reporting unit.

Other expense (income), net. Other expense was $14.2 million in the year ended December 31, 2006
compared to $31.8 million in the year ended December 25, 2005. For the year ended December 31, 2006, plant restructuring and impairment charges totaled $4.1 million and consisted of $1.4 million of costs related to the closure of our
Erie, Pennsylvania frozen food facility, and $2.7 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. Also included in the
fiscal 2006 activity were tradename impairment charges, which are discussed above under Impairment of Goodwill and Other Long-lived Assets, of $2.7 million related to the Aunt Jemima brand. In addition, $7.4 million of amortization
expense was incurred in the year ended December 31, 2006, an increase of $2.6 million as compared to $4.8 million in the year ended December 25, 2005, mainly due to the acquisition of the Armour business. For the year ended
December 25, 2005, plant restructuring and impairment charges totaled $8.0 million and consisted of $5.8 million of costs related to the closure of our Erie, Pennsylvania frozen food facility, a $0.9 million asset impairment charge for the
shutdown of a production line at our Mattoon, Illinois facility, and $1.3 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. Tradename impairment charges, which are discussed above under Impairment of Goodwill and Other Long-lived Assets, were $19.2 million in fiscal 2005, consisting of a $10.4 million charge related to the
Mrs. Pauls brand, $7.7 million charge related to the Van de Kamps brand and $1.1 million related to the Lenders brand. The balance of the 2005 activity related to royalty income and other miscellaneous credits received in the
year.

Earnings (loss) before interest and taxes. Earnings (loss) before interest and taxes (EBIT) increased $118.5 million to $145.4 million
in the year ended December 31, 2006 from $26.9 million in EBIT in the year ended December 25, 2005. This increase resulted from a $95.1 million increase in frozen foods EBIT, a $26.7 million increase in dry foods EBIT, and a
$3.3 million increase in unallocated corporate expenses. The increase in unallocated corporate expenses is principally related to $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, as well as $1.9 million of stock option expense in accordance with the adoption of SFAS No. 123(R).

Frozen foods:Frozen foods EBIT increased by $95.1 million in the year ended December 31, 2006. In 2006, we recorded $0.6 million of
accelerated depreciation expense and a charge of $1.4 million related to asset impairment and plant consolidation expense from the closure of the Erie, Pennsylvania frozen foods facility and impairment charges and plant consolidation expense
totaling $2.7 million from the closure of the Omaha, Nebraska frozen foods facilities. Additionally, in 2006 we recorded a tradename impairment charge of $2.7 million related to the Aunt Jemima brand. In 2005, we recorded $4.8 million of accelerated
depreciation expense related to the closure of the Erie, Pennsylvania frozen food facility and a charge of $7.1 million related to the plant consolidation expense from the closure of the Omaha, Nebraska ($1.3 million) and Erie, Pennsylvania ($5.8
million) frozen foods facilities. Impairment charges, principally for goodwill and tradenames, totaling $74.9 million were also recorded in fiscal 2005. The impairment charges consisted of a $54.8 million charge for goodwill impairment for the
frozen seafood reporting unit ($44.9 million) and pizza reporting unit ($9.9 million), a $19.2 million impairment charge to tradenames for Mrs. Pauls ($10.4 million), Van de Kamps ($7.7 million) and Lenders ($1.1 million) and
a $0.9



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million asset impairment write down for the shutdown of a production line at our Mattoon, Illinois facility. The balance of our frozen foods EBIT increased
$15.7 million, principally driven by lower marketing spending in 2006, mainly in slotting and trade marketing expense related to fewer new product introductions, 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 $26.6 million in the year ended December 31, 2006 and included $12.8 million related to the acquisition of
the Armour business. The Armour results include the impact of the $4.8 million charge 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 $13.9
million, principally driven by lower marketing spending related to fewer new product introductions, 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 $85.4 million in the
year ended December 31, 2006, compared to $70.5 million in the year ended December 25, 2005. Included in the interest expense, net, amount was $(0.9) million and $4.7 million for the year ended December 31, 2006 and the year
ended December 25, 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 $9.3
million was the result of higher interest rates on our bank borrowings ($6.2 million), higher average bank debt levels resulting from the borrowings to fund the Armour acquisition less prepayments of our bank borrowings ($1.9 million) and higher
amortization of debt issue costs resulting from the Armour acquisition as well as the impact of our prepayments of our bank borrowings ($1.1 million).

Provision for income taxes. The effective tax rate was 43.5% in the year ended December 31, 2006, compared to (1.0%) in the year ended December 25, 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 fiscal year. Deferred tax liabilities are recognized for the differences between the book and
tax bases of certain goodwill and indefinite lived intangible assets. A deferred tax charge was recorded both in 2006 and 2005 for amortization recognized for tax purposes related to indefinite lived intangibles.

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. See Note 11 to the audited Consolidated Financial Statements.

Fiscal year ended December 25, 2005 compared to the fiscal year ended December 26, 2004

Net sales. Shipments in the year ended December 25, 2005 were $1,755.9 million, an increase of $294.2 million, compared to shipments in the year ended December 26, 2004 of
$1,461.7 million. $255.4 million of the increase was related to the fact that fiscal 2005 includes 12 months of activity for the former Aurora brands compared to 2004 which only includes activity related to the former Aurora brands since the
Aurora Merger date of March 19, 2004. Subsequent references in this discussion to this situation are referred to as the effect of the Aurora Merger. Net sales in the year ended December 25, 2005 were $1,255.7 million, an
increase of $219.8 million, compared to net sales in the year ended December 26, 2004 of $1,035.9 million. $167.2 million of the increase was the effect of the Aurora Merger. The Aurora brands required a higher level of trade spending than
the legacy Pinnacle brands.

Frozen foods:Shipments in the year ended December 25, 2005 were $929.5 million, an increase of
$139.9 million. $137.0 million of the increase was related to the effect of the Aurora Merger. The balance of the change was driven by increases in our Swanson, Aunt Jemima, and seafood product line sales. Aggregate trade and consumer coupon
redemption expenses increased $31.2 million, of which $47.1 million of the increase related to the effect of the Aurora Merger, partially offset by lower trade and consumer coupon redemption expenses in the fourth quarter of 2005 on the legacy
Aurora brands driven by changes in the timing of marketing programs during the year. As a result, frozen foods net sales were $670.7 million, an increase of $108.7 million, with $90.0 million related to the effect of the Aurora Merger. The
balance of the change was driven by increases in our Aunt Jemima and Swanson product line sales.



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Dry foods:Shipments in the year ended December 25, 2005 were $826.4 million, an increase of
$154.3 million. $113.6 million of the increase was related to the effect of the Aurora Merger. The balance of the change was driven by increases in our Duncan Hines, pickle, and syrup product line sales. Aggregate trade and consumer coupon
redemption expenses increased $43.2 million, of which $38.9 million related to the effect of the Aurora Merger. As a result, dry foods net sales increased $111.1 million, of which $74.7 million was related to the effect of the Aurora Merger.
The balance of the change was driven by increases in our Duncan Hines and syrup product line sales.

Cost of products sold. Our cost of products
sold was $997.2 million, or 79.4% of net sales in the year ended December 25, 2005, versus cost of products sold of $878.1 million, or 84.8% of net sales in the year ended December 26, 2004. The effect of the Aurora Merger
resulted in an additional $127.8 million of cost of products sold in the year ended December 25, 2005. Cost of products sold during the year ended December 26, 2004 include additional costs of $18.1 million and $13.2 million related to
post-Merger sales of inventories written up to fair value at the date of the Pinnacle Transaction and the Aurora Merger, respectively. Cost of products sold during the year ended December 25, 2005 were impacted by the additional costs resulting
from the reorganization of our warehousing network and the related movement of product to the new warehousing network. In addition to these costs, this percentage is also affected by changes in our aggregate trade and consumer coupon redemption
expenses that are classified as reductions from shipments in arriving at net sales.

Marketing and selling expenses. Marketing and selling expenses
were $101.2 million, or 8.1% of net sales, in the year ended December 25, 2005 compared to $105.0 million, or 10.1% of net sales, in the year ended December 26, 2004. The effect of the Aurora Merger contributed an additional $20.8
million of costs for the year ended December 25, 2005. The balance of the change was due to decreased selling and marketing overhead expense, primarily from lower package design costs, as well as lower advertising expense.

Administrative expenses. Administrative expenses were $40.2 million in the year ended December 25, 2005 compared to $44.6 million in the year ended
December 26, 2004. The higher cost in the year ended December 26, 2004 relates primarily to the continued operation of the Aurora headquarters office in St. Louis, which was closed in May 2004 and contributed $2.8 million of expense in the
year ended December 26, 2004.

Research and development expenses. Research and development expenses were $3.6 million, or 0.3% of net
sales, in the year ended December 25, 2005 compared with $3.7 million, or 0.4% of net sales, in the year ended December 26, 2004.

Goodwill impairment charge. Goodwill impairment charges, which are discussed above under Impairment of Goodwill and Other Long-lived Assets, were $54.8 million in the year ended December 25, 2005. Of the total charge
in fiscal 2005, which was recorded in the frozen foods segment, $44.9 million related to the impairment of the frozen seafood reporting unit and $9.9 million related to the impairment of the pizza reporting unit. Goodwill impairment charges were
$6.1 million in the year ended December 26, 2004. Of the total charge in the year ended December 26, 2004, which was recorded in the frozen foods segment, $1.8 million related to the impairment of the Chefs Choice goodwill as a
result of our decision to discontinue producing products under the Chefs Choice trade name, $1.6 million related to the frozen dinners reporting unit, and $2.7 million related to the bagels reporting unit.

Other expense (income), net. Other expense was $31.8 million in the year ended December 25, 2005 compared to $31.9 million in the year ended
December 26, 2004. Included in Other expense (income), net for the year ended December 26, 2004 was $8.8 million of Pinnacle Transaction related expenses, consisting primarily of $7.4 million of non-cash equity related compensation expense
and $1.4 million of retention benefits payments. Also, a $12.7 million impairment charge and $3.0 million for plant consolidation expense, both related to the closure of our Omaha, Nebraska frozen food facility, were recorded in the year ended
December 26, 2004. Additionally, restructuring and impairment charges totaling $4.3 million were recorded in the year ended December 26, 2004. The restructuring and impairment charges consisted of a $3.0 million impairment charge related
to the Chefs Choice brand including $1.7 million of amortizable intangibles (recipes) and $1.3 million of fixed asset write downs, and a $1.3 million impairment charge related to the Avalon Bay trade name. For the year ended December 25,
2005, restructuring and impairment charges totaled $27.2 million and consisted of $5.8 million of costs related to the closure of our Erie, Pennsylvania frozen food facility, a $0.9 million asset impairment charge for the shutdown of a production
line at our Mattoon, Illinois facility, and $1.3 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. Also included in the
fiscal 2005 activity were tradename impairment charges, which are discussed above under Impairment of Goodwill and Other Long-lived Asseets, of $19.2 million, consisting of a $10.4 million charge related to the Mrs. Pauls
brand, $7.7 million charge related to the Van de Kamps brand and $1.1 million related to the Lenders brand. In addition, $4.8 million of amortization expense was incurred in the year ended December 25, 2005 compared to $3.5 in the
year ended December 26, 2004. The increased amortization was primarily related to the effect of the Aurora Merger.



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Earnings (loss) before interest and taxes. Earnings (loss) before interest and taxes (EBIT) increased $60.4
million to $26.9 million in the year ended December 25, 2005 from a loss of ($33.5) million in EBIT in the year ended December 26, 2004. This increase resulted from a $5.5 million increase in frozen foods EBIT, a
$48.3 million increase in dry foods EBIT, and a $6.6 million decrease in unallocated corporate expenses. The decrease in the unallocated corporate expenses was principally related to $8.8 million of Pinnacle Transaction related expenses in
the year ended December 26, 2004, consisting primarily of $7.4 million of non-cash equity related compensation expense and $1.4 million of retention benefit payments. In addition, the year ended December 25, 2005 includes $1.8 million of
employee severance expense.

Frozen foods:Frozen foods EBIT increased by $5.5 million in the year ended December 25, 2005
and includes $5.2 million related to the effect of the Aurora Merger. In 2005, we recorded $4.8 million of accelerated depreciation expense related to the closure of the Erie, Pennsylvania frozen food facility and a charge of $7.1 million related to
the plant consolidation expense from the closure of the Omaha, Nebraska ($1.3 million) and Erie, Pennsylvania ($5.8 million) frozen foods facilities. Restructuring and impairment charges totaling $74.9 million were also recorded in fiscal 2005. The
restructuring and impairment charges consisted of a $54.8 million charge for goodwill impairment for the frozen seafood reporting unit ($44.9 million) and pizza reporting unit ($9.9 million), a $19.2 million impairment charge to tradenames for
Mrs. Pauls ($10.4 million), Van de Kamps ($7.7 million) and Lenders ($1.1 million) and a $0.9 million asset impairment write down for the shutdown of a production line at our Mattoon, Illinois facility. The year ended
December 26, 2004 includes additional costs of $1.2 million related to post-transaction sales of inventories written up to fair value at the date of the Pinnacle Transaction. The increase in EBIT also includes the impact of the $6.0 million
charge recorded in the year ended December 26, 2004 related to post-acquisition sales of inventories written up to fair value at the date of the Aurora Merger. Additionally, the results for the year ended December 26, 2004 included a
charge of $12.7 million related to the closure of the Omaha, Nebraska frozen foods facility as well as $8.7 million of consolidation expense and accelerated depreciation expense related to the closure of the Omaha facility. Restructuring and
impairment charges totaling $10.4 million were also recorded in the year ended December 26, 2004. The restructuring and impairment charges consisted of a $1.8 million charge related to the impairment of the Chefs Choice goodwill, $1.6
million charge related to the impairment of the frozen dinners reporting unit goodwill, $2.7 million charge related to the impairment of the bagels reporting unit goodwill, $3.0 million impairment charge related to the Chefs Choice brand
including $1.7 million of amortizable intangibles (recipes) and $1.3 million of fixed asset write downs, and a $1.3 million impairment charge related to the Avalon Bay trade name. Additionally, the corporate overhead expense allocated to frozen
foods was $1.7 million higher for the year ended December 26, 2004, related to the continued operation of the Aurora headquarters office in St. Louis, which was closed in May 2004. The balance of our frozen foods EBIT increased $46.4 million,
principally driven by $29.6 million lower marketing spending in the fourth quarter of 2005, mainly in slotting and trade promotions and consumer coupon redemption expense, which are recorded as reductions from net sales, and lower advertising
expense. An additional $16.5 million increase occurred in the first nine months of 2005 resulting from an increase in sales volume offset by increased cost of products sold expense related to the reorganization of our warehousing network, and
increased slotting and trade promotion expenses.

Dry foods:Dry foods EBIT increased $48.3 million in the year ended
December 25, 2005 and includes $9.9 million related to the effect of the Aurora Merger. The increase in EBIT also includes the impact of the $7.2 million charge recorded in the year ended December 26, 2004 related to post-acquisition sales
of inventories written up to fair value at the date of the Aurora Merger, which includes $1.8 million in the first quarter and $5.4 million in the second quarter. The year ended December 26, 2004 also includes additional cost of products sold
of $17.0 million related to post-transaction sales of inventories written up to fair value at the date of the Pinnacle Transaction. In addition, $2.4 million of amortization expense was incurred in the year ended December 25, 2005 compared to
$1.3 million in the year ended December 26, 2004. The increased amortization was primarily related to the effect of the Aurora Merger. The balance of the dry foods EBIT increased $15.2 million, primarily due to increased sales volume, resulting
from additional case volume in our Duncan Hines and pickles product lines. Partially offsetting these increased sales are increases in our cost of products sold expense related to the reorganization of our warehousing network and increased slotting
and trade promotion expenses.



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Interest expense, net. Interest expense, net was $70.5 million in the year ended December 25, 2005 compared
to $49.2 million in the year ended December 26, 2004. The increase in interest expense, net is partially related to the change in capital structure, which occurred as a result of the Aurora Merger. In addition, we experienced higher
average interest rates on our senior debt as well as mark to market adjustments on our interest rate swaps. 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. During the year ended December 25, 2005, we recorded a gain on the interest rate
swap contracts totaling $4.7 million. During the year ended December 26, 2004, we recorded a gain on the value of the interest rate swaps totaling $7.3 million.

Provision for income taxes. The effective tax rate was (1.0%) in the year ended December 25, 2005, compared to (11.7%) in the year ended December 26, 2004. 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 year. Deferred tax liabilities are recognized for the
differences between the book and tax bases of certain goodwill and indefinite lived intangible assets. A deferred tax charge was recorded both in 2005 and 2004 for amortization recognized for tax purposes related to indefinite lived intangibles.

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 carryforward to offset our income. The annual net operating loss limitation is approximately $13-15 million subject to other rules and restrictions. See Note 11 to the audited Consolidated Financial Statements.

Transition year ended December 26, 2004 compared to twenty-one weeks ended December 28, 2003

The discussion below of the 21 weeks ended December 28, 2003 is based on the combination of the Predecessors consolidated financial statements for the 16 weeks
ended November 24, 2003 and the Successors consolidated financial statements for the 5 week period ended December 28, 2003. For the Pinnacle businesses, we believe that this is the most meaningful basis for comparison, because the
customer base, products, manufacturing facilities and types of marketing programs were the same under the Predecessor as they are under the Successor. Also, the discussion below for the transition year ended December 26, 2004 includes the
results of operations of the Aurora businesses.

Net sales. Shipments in the 21 weeks ended December 26, 2004 were $730.7 million, an
increase of $438.5 million, compared to shipments in the 21 weeks ended December 28, 2003 of $292.2 million. $434.3 million of the increase was related to the Aurora Merger. Net sales in the 21 weeks ended December 26, 2004 were
$511.2 million, an increase of $280.2 million, compared to net sales in the 21 weeks ended December 28, 2003 of $231.0 million. $286.5 million of the increase was related to the Aurora Merger, whose brands required a higher level of
spending than the historical Pinnacle brands.

Frozen foods:Shipments in the 21 weeks ended December 26, 2004 were $389.9
million, an increase of $203.9 million. $206.8 million of the increase was related to the Aurora Merger. The balance of the change was driven by a $3.4 million decrease in our Swanson product line sales. Aggregate trade and consumer coupon
redemption expenses increased $80.8 million. $75.1 million of the increase was related to the Aurora Merger. As a result, frozen foods net sales increased $123.1 million, of which $131.7 million was related to the Aurora Merger and net sales of
the existing Swanson and Kings Hawaiian businesses decreased $8.6 million, or 5.8%, in the 21 weeks ended December 26, 2004.

Dry foods:Shipments in the 21 weeks ended December 26, 2004 were $340.8 million, an increase of $234.6 million. $227.5 million of the increase was related to the Aurora Merger. The balance of the increase was due to
additional case volume of 5.0% in our core Vlasic product line. Aggregate trade and consumer coupon redemption expenses increased $77.5 million, of which $72.4 million was related to the Aurora Merger. As a result, dry foods net sales increased
$157.1 million, of which $155.0 million was related to the Aurora Merger and net sales of the existing Vlasic and Open Pit businesses increased $2.1 million, or 2.5%, for the 21 weeks ended December 26, 2004.



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Cost of products sold. Our cost of products sold was $420.0 million, or 82.2% of net sales in the 21 weeks
ended December 26, 2004, versus cost of products sold of $179.3 million, or 77.6% of net sales in the 21 weeks ended December 28, 2003. The Aurora Merger resulted in $235.3 million of cost of products sold in the 21 weeks ended
December 26, 2004. The balance of cost of products sold was $184.7 million, or 82.2% of net sales, in the 21 weeks ended December 26, 2004. The main driver of increased cost of product sold, as a percentage of net sales, is the additional
costs resulting from the reorganization of our warehousing network and the related movement of product to the new warehousing network as well as higher year over year commodity costs (chicken, beef, and cheese). In addition to these costs, this
percentage is also affected by changes in our aggregate trade and consumer coupon redemption expenses that are classified as reductions to net sales. The 21 weeks ended December 28, 2003 year includes additional costs of $8.2 million related to
post-transaction sales of inventories written up to fair value at the date of the Pinnacle Transaction.

Marketing and selling expenses. Marketing
and selling expenses were $53.6 million, or 10.5% of net sales, in the 21 weeks ended December 26, 2004 compared to $30.8 million, or 13.3% of net sales, in the 21 weeks ended December 28, 2003. The Aurora Merger contributed
$35.8 million of the increase for the 21 weeks ended December 26, 2004. The balance of the change was due to lower advertising expense of $10.8 million, primarily on our Swanson and Vlasic businesses, and decreased selling overhead expense.

Administrative expenses. Administrative expenses were $15.2 million, or 3.0% of net sales, in the 21 weeks ended December 26, 2004
compared to $12.3 million, or 5.3% of net sales, in the 21 weeks ended December 28, 2003. The principal driver of the $2.9 million increase was higher overhead expense related to the merger of the Aurora businesses. Offsetting the increase
in higher overhead expenses was the reduction of accrued liabilities for the management incentive plan.

Research and development expenses. Research
and development expenses were $1.5 million, or 0.3% of net sales, in the 21 weeks ended December 26, 2004 compared with $1.1 million, or 0.5% of net sales, in the 21 weeks ended December 28, 2003.

Goodwill impairment charge.Goodwill impairment charges was $4.3 million in the 21 weeks ended December 26, 2004. There were no impairment charges in the 21
weeks ended December 28, 2003. Of the total charge in the 21 weeks ended December 26, 2004, which was recorded in the frozen foods segment, $1.6 million related to the dinners reporting unit and $2.7 million related to the bagels reporting
unit.

Other expense (income). Other expense was $5.7 million in the 21 weeks ended December 26, 2004 as compared to $19.8 million in
the 21 weeks ended December 28, 2003. This decrease was related to $18.4 million of Pinnacle Transaction related expenses in the 21 weeks ended December 28, 2003, consisting primarily of $11.0 million of non-cash equity related
compensation expense, $4.9 million of Predecessor stock option expense, $1.7 million of change in control payments, and $0.8 million of retention benefit payments. Additionally, a $1.3 million charge related to an impairment of the Kings
Hawaiian trade name was recorded in the 21 weeks ended December 28, 2003. Restructuring and impairment charges totaled $3.9 million during the 21 weeks ended December 26, 2004 related to (i) $2.6 million of asset impairment write
downs related to the Omaha, Nebraska frozen food facility discussed above, (ii) $1.2 million of plant consolidation expense related to the announced closure of our Omaha, Nebraska frozen food facility, and (iii) less than $0.1 million
impairment charge related to the Lenders trade name. In addition, $1.8 million of additional amortization expense was incurred in the 21 weeks ended December 26, 2004 compared to the 21 weeks ended December 28, 2003 (see Note 6 to
the audited Consolidated Financial Statements), primarily related to the amortizable intangible assets acquired in the Aurora Merger.

Earnings (loss)
before interest and taxes. Earnings (loss) before interest and taxes (EBIT) increased $23.2 million to earnings of $10.9 million in the 21 weeks ended December 26, 2004 from a loss of $12.3 million in EBIT in the 21 weeks ended
December 28, 2003. This increase resulted from a $27.3 million decrease in frozen foods EBIT, a $31.1 million increase in dry foods EBIT, and a $19.4 million decrease in unallocated corporate expenses. The decrease in the
unallocated corporate expenses was principally related to $18.4 million of Pinnacle Transaction related expenses in the 21 weeks ended December 28, 2003, consisting primarily of $11.0 million of non-cash equity related compensation expense,
$4.9 million of Predecessor stock option expense, $1.7 million of change in control payments, and $0.8 million of retention benefit payments. Additionally, based upon results through December 2004, we have reduced accrued liabilities for the
management incentive plan.



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Frozen foods:Frozen foods EBIT decreased by $27.3 million in the 21 weeks ended
December 26, 2004; $16.7 million of the decline was related to the Aurora Merger, including a $2.7 million impairment of the bagels goodwill. During the 21 weeks ended December 26, 2004, we recorded a net expense of $4.5 million related to
the announced closure of our Omaha, Nebraska frozen food facility. The net expense was the result of $2.6 million of asset impairment, $1.4 million of accelerated depreciation, $1.2 million of other plant consolidation expenses, and $0.7 million
curtailment gain related to the postretirement benefit program. Additionally, a non-cash impairment charge of $1.6 million related to frozen dinner goodwill and a favorable adjustment of $1.6 million to our medical liability reserves were recorded
in the 21 weeks ended December 26, 2004. In the 21 weeks ended December 28, 2003, a non-cash impairment charge of $1.3 million related to the Kings Hawaiian intangible assets was recorded. The 21 weeks ended December 28, 2003
also include additional costs of products sold of $2.7 million related to post-transaction sales of inventories written up to fair value at the date of the Pinnacle Transaction. The balance of our frozen foods EBIT decreased $10.1 million due to
increased cost of products sold expense related to the reorganization of our warehousing network, increased coupon and trade promotion expenses, partially offset by lower advertising expenses.

Dry foods:Dry foods EBIT increased $31.1 million in the 21 weeks ended December 26, 2004; a $24.9 million increase in EBIT was related
to the Aurora Merger. The 21 weeks ended December 28, 2003 includes additional cost of products sold of $5.5 million related to post-transaction sales of inventories written up to fair value at the date of the Pinnacle Transaction. Dry foods
EBIT increased $0.6 million due to lower advertising expenses and increased sales volume, resulting from additional case volume of 5.0% in our core Vlasic product line. Partially offsetting these increases were increased cost of products sold
expense related to the reorganization of our warehousing network and increased trade promotion expenses.

Interest expense, net. Interest expense,
net was $26.1 million in the 21 weeks ended December 26, 2004, compared to $12.0 million in the 21 weeks ended December 28, 2003. Comparison of interest expense is not meaningful due to the change in capital structure after the
Pinnacle Transaction and the Aurora Merger. Included in the interest expense, net, amount for the 21 weeks ended December 26, 2004 was $0.3 million 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.

Provision for income taxes. The effective tax rate was (61.7%) in the 21 weeks ended December 26, 2004, compared to 20.1% in the 21 weeks
ended December 28, 2003. We maintain a full valuation allowance against net deferred tax assets excluding indefinite lived intangible assets, and the effective rate difference is due to the change in the valuation allowance for the 21 week
period. Deferred tax liabilities are recognized for the differences between the book and tax bases of certain goodwill and indefinite lived intangible assets. A deferred tax charge was recorded the 21 week period ended December 26, 2004 for
amortization recognized for tax purposes related to indefinite lived intangibles.

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 tend 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 higher 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 credit facilities.

LIQUIDITY AND
CAPITAL RESOURCES

Historical

Overview. 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 $29 million in 2007. 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 fiscal year ended December 31, 2006

Net cash provided from operating activities was $161.6 million and $64.7 million for fiscal 2006 and 2005, respectively. Net cash provided by operating activities during
fiscal 2006 was principally the result of $122.6 million in net earnings excluding non-cash items and a decrease in working capital of $39.0 million. The decrease in working capital was primarily the result of a $33.8 million decrease in inventories
that was due to managements concerted effort to reduce the level of inventories while maintaining customer service levels. The decrease in inventories was offset by a $9.3 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 2005. All other working capital accounts generated $14.5 million of cash,
primarily the result of higher accounts payable and accrued liabilities at December 31, 2006 compared with December 25, 2005. Net cash provided by operating activities during fiscal 2005 was principally the result of $78.7 million in net
earnings excluding non-cash items, which was partially offset by an increase of $13.9 million in net working capital accounts. The increase in working capital included a $35.1 million decrease in inventories that was a result of the sell down of the
high inventory levels from December 2004. The cash provided by the reduction in inventory levels was offset by a $32.1 million decrease in accounts payable and a $13.2 million decrease in accrued trade marketing expense.

Net cash used in investing activities was $213.7 million and $28.8 million for fiscal 2006 and 2005, respectively. Net cash used in investing activities during fiscal
2006 includes $189.2 million for consideration paid for the Armour Business and $26.2 million for capital expenditures less $1.7 million received from the sale of the Erie, Pennsylvania production facility. Net cash used in investing activities
during fiscal 2005 includes $30.9 million for capital expenditures less $1.6 million received from the settlement of the working capital adjustment from the Pinnacle Transaction as well as $0.6 million related to the sale of idle equipment from our
Omaha facility.

Net cash provided by financing activities was $63.9 million during fiscal 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 $110.0 million in repayments of the
term loan, $3.8 million in debt acquisition costs and $5.8 million decline in bank overdrafts. Net cash used by financing activities was $37.7 million for fiscal 2005. The usage was driven by $4.1 million of scheduled quarterly payments and $50.0
million in prepayments of our senior term loan credit facility. The payments were offset by an increase in bank overdrafts of $6.4 million and a $10.0 equity contribution from Crunch Holding Corp. The equity contribution was the result of employee
purchases of shares under the 2004 Employee Stock Purchase Plan discussed in Note 5 of our Consolidated Financial Statements.

The net of all activities
resulted in an increase in cash of $11.8 million in fiscal 2006 and a decrease in cash by $1.7 million during fiscal 2005.

Statements of cash
flows for the fiscal year ended December 25, 2005

The following information regarding cash flows for the fiscal year ended December 26, 2004
is provided for comparison purposes only and is unaudited.

Net cash provided from operating activities was $64.7 million and $16.2 million for fiscal 2005
and 2004, respectively. Net cash provided by operating activities during fiscal 2005 was principally the result of $78.7 million in net earnings excluding non-cash items, which was partially offset by an increase of $13.9 million in net working
capital accounts. The increase in working capital included a $35.1 million decrease in inventories that was a result of the sell down of the high inventory levels from December 2004. The cash provided by the reduction in inventory levels was offset
by a $32.1 million decrease in accounts payable and a $13.2 million decrease in accrued trade marketing expense. In fiscal 2004, net cash used in operations was driven by a $28.9 million decrease in working capital, principally increases in accounts
payable of $47.9 million and decreases in accounts receivable of $16.7 million. These increases were offset by increases in inventories of $20.0 million and decreases in accrued trade marketing expenses of $25.3 million. Offsetting the cash provided
from the decline in working capital was $12.6 million in net loss excluding non-cash items.



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Net cash used in investing activities was $28.8 million and $703.2 million for fiscal 2005 and 2004, respectively. Net
cash used in investing activities during fiscal 2005 includes $30.9 million for capital expenditures less $1.6 million received from the settlement of the working capital adjustment from the Pinnacle Transaction as well as $0.6 million related to
the sale of idle equipment from our Omaha facility. Net cash used in investing activities during fiscal 2004 includes activities related to the Aurora Merger, mainly consideration paid of $663.8 million and transaction costs of $19.3 million.
Additionally, during fiscal 2004, we paid $17.7 million for capital expenditures as well as $1.9 million to reacquire an exclusive license to distribute Duncan Hines products in Canada.

Net cash used by financing activities was $37.7 million for fiscal 2005. The usage was driven by $4.1 million of scheduled quarterly payments and $50.0 million in prepayments of our senior term loan credit facility.
The payments were offset by an increase in bank overdrafts of $6.4 million and a $10.0 equity contribution from Crunch Holding Corp. The equity contribution was the result of employee purchases of shares under the 2004 Employee Stock Purchase Plan
discussed in Note 5 of our Consolidated Financial Statements. Net cash provided by financing activities during fiscal 2004 was $683.9 million, which was primarily related to the Aurora Merger and included $425.0 million in proceeds from the senior
credit facility, $201.0 million in senior subordinated note proceeds, and $95.3 million in equity contributions. The proceeds were offset by $19.6 million in debt acquisition costs, $14.0 million in payments on our revolving credit facility and $2.7
million in scheduled quarterly payments of our senior term loan credit facility.

The net of all activities resulted in a decrease in cash by
$1.7 million and $3.0 million during fiscal 2005 and 2004, respectively.

Statements of cash flows for the transition year ended December 26,
2004

The following information regarding cash flows for the 21 week period ended December 28, 2003 is provided for comparison purposes only and is
unaudited.

Net cash used in operating activities was $2.5 million and $11.1 million for the 21 weeks ended December 26, 2004 and December 28,
2003, respectively. Net cash used in operating activities during the 21 weeks ended December 26, 2004 was principally the result of an increase in working capital, which included a $23.0 million increase in inventories for the seasonal build
and a $7.7 million increase in accounts receivable as well as a $19.0 million increase in accounts payable and accrued liabilities. The increase in accrued liabilities primarily relate to higher accrued bond interest, and higher accrued trade
marketing expenses and coupon costs. In the 21 weeks ended December 28, 2003, net cash used in operations was $11.1 million and was driven by a $19.2 million increase in working capital, principally related to the seasonal increase in
inventories and higher accrued trade marketing expenses.

Net cash used in investing activities was $12.4 million and $369.9 million for the 21 weeks ended
December 26, 2004 and December 28, 2003, respectively. Net cash used in investing activities during the 21 weeks ended December 26, 2004 includes $8.1 million for capital expenditures, $1.9 million for the reacquisition of an
exclusive license to distribute Duncan Hines product in Canada, and $2.3 million for the payment of costs associated with the Aurora Merger, which were previously accrued as of the date of acquisition. Net cash used in investing activities during
the 21 weeks ended December 28, 2003 includes activities related to the Pinnacle Transaction, mainly consideration paid of $368.2 million. Additionally, $1.7 million for capital expenditures was included in the 21 weeks ended December 28,
2003.

Net cash used by financing activities was $20.6 million for the 21 weeks ended December 26, 2004. The usage was driven by a $16.4 million
decline in bank overdrafts, $2.8 million of debt acquisition costs, as well as the scheduled quarterly payments of our senior term loan credit facility of $1.4 million. Net cash provided by financing activities was $314.1 million during the 21 weeks
ended December 28, 2003. The Predecessor senior credit facility term loan of $175.0 million was paid off, and debt acquisition costs were $21.2 million. Cash inflows consisted of equity contribution of $180.3 million, long-term bank borrowing
of $120.0 million, borrowing under our bank revolver of $21.5 million, and issuance of senior subordinated notes of $200.0 million. Additionally, we repaid $7.5 million of the revolver borrowings and there was a $4.1 million decline in bank
overdrafts.

The net of all activities resulted in a decrease in cash by $35.5 million and $66.9 million during the 21 weeks ended December 26,
2004 and December 28, 2003, respectively.



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Statements of cash flows for the fiscal year ended July 31, 2004

In the Predecessors 16 week period ending November 24, 2003 of fiscal 2004, cash usage as a result of operations was $23.4 million, in the
Successors 36 week period ending July 31, 2004, cash generated as a result of operations was $31.0 million, for a net cash increase as a result of operations for the 52 week combined period ended July 31, 2004 of $7.6 million. The
cash increase from operations is due to net earnings excluding non-cash charges/credits and the impact of the flow through of the write-up of inventories to fair value of $39.5 million and increased working capital of $18.3 million, principally due
to increased inventories partially offset by lower receivables and increased accounts payable.

Capital expenditures were $11.3 million, primarily for
process improvement, cost savings and maintenance capital.

In fiscal 2004, bank overdrafts increased by $11.3 million resulting from the timing of checks
clearing the bank.

The other significant activities in our cash flow for fiscal 2004 relate to the Pinnacle Transaction and Aurora Merger. Pinnacle
Transaction consideration paid was $361.1 million, Pinnacle Transaction costs were $7.2 million, the Predecessor senior credit facility term loan of $175.0 million was paid off, and debt acquisition costs were $21.2 million. Cash inflows consisted
of equity contribution of $179.8 million, long-term bank borrowing of $120.0 million, borrowing under our bank revolver of $21.5 million, and issuance of senior subordinated notes of $200.0 million. Since the Pinnacle Transaction, we have repaid
$21.5 million of the revolver borrowings. The Aurora Merger consideration paid was $888.9 million (including $225.1 million relating to the exchange of Aurora senior subordinated notes for equity interest in LLC), transaction costs paid were $17.0
million, and debt acquisition costs were $16.6 million. Cash inflows consisted of the equity contribution to Successor of $320.4 million (including $225.1 million relating to the exchange of Aurora senior subordinated notes for equity interest in
LLC), term loan borrowings under the senior secured credit facilities of $425.0 million and gross proceeds from the February 2004 issuance of additional 8.25% Senior Subordinated Notes due 2013.

In addition, cash flows from financing activities reflected the regularly scheduled quarterly repayment of the term loan of $1.4 million.

The net of all activities resulted in a decrease in cash by $34.3 million in fiscal 2004.

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 31, 2006 and December 25, 2005.

As of
December 31, 2006, $2.7 million of our term loan was owed to affiliates of 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, 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.
| | - |  | -----------------------------------------------------------------------------------------------------

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 fiscal 2006, the weighted average interest rate on the term loan was 7.61%. As of December 31, 2006, the Eurodollar interest rate on the
term loan facility was 7.37%, and the commitment fee on the undrawn revolving credit facility was 0.50%. There were no borrowings under the revolving credit facility throughout fiscal 2006. For fiscal 2005, the weighted average interest rate on the
term loan was 6.50% and on the revolving credit facility was 6.30%. As of December 25, 2005, the Eurodollar interest rate on the term loan facility was 7.30% and the commitment fee on the undrawn revolving credit facility was 0.50%.

During fiscal 2006, we prepaid $110 million 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 December 31, 2006 are $521.2 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 31, 2006 and December 25, 2005, we had utilized $9.2 million and $11.5 million, respectively, of the revolving credit facility for letters of credit. Of the
$130 million revolving credit facility available, as of December 31, 2006 and December 25, 2005, we had an unused balance of $120.8 million and $118.5 million, respectively, available for future borrowings and letters of credit, of which a
maximum of $30.8 million and $28.5 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    | %

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 that 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 our excess cash flow, as defined. Due to voluntary prepayments of the term loan made by the Company in fiscal 2006, the Company was not required to make
any mandatory repayments for 2006. 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 ended on the second business day following the date on which we delivered to the Administrative Agent financial
statements for the fiscal quarter ending March 2006, which occurred on May 10, 2006.

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.



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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 a base rate 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 million arising from letters of credit issued other than
pursuant to the senior secured credit facility.

As of December 31, 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 had 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. Beginning in 2005 and continuing into 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 could affect the North American economies and could have an adverse impact on our business, financial condition and
results of operations.

CONTRACTUAL COMMITMENTS

The table below provides information on our contractual commitments as of December 31, 2006.



|                                                 |  |       |           |                 |   |             |  |             |         |              |   |         |  |   |        
|------------------------------------------------ |  | ----- | --------- | --------------- | - | ----------- |  | ----------- | ------- | ------------ | - | ------- |  | - | -------
|                                                 |  | Total |           | Less Than1 Year |   | 1 - 3 Years |  | 3 - 5 Years |         | After5 Years
|Long-term debt(1)                                |  | $     | 915,187   |                 | $ |            |  | $           |        |              | $ | 521,187 |  | $ | 394,000
|Projected interest payments on long term debt(2) |  |       | 367,706   |                 |   | 70,915      |  |             | 141,830 |              |   | 92,660  |  |   | 62,301 
|Operating lease obligations                      |  |       | 20,108    |                 |   | 5,307       |  |             | 9,836   |              |   | 4,342   |  |   | 623    
|Capital lease obligations                        |  |       | 225       |                 |   | 133         |  |             | 67      |              |   | 25      |  |   |       
|Purchase obligations(3)                          |  |       | 306,493   |                 |   | 244,175     |  |             | 58,918  |              |   | 3,400   |  |   |       
|Postretirement medical benefits                  |  |       | 10,790    |                 |   | 77          |  |             | 149     |              |   | 196     |  |   | 10,368 
|Pension benefits                                 |  |       | 5,969     |                 |   | 650         |  |             | 2,000   |              |   | 2,000   |  |   | 1,319  
|Other long-term obligations(4)                   |  |       | 837       |                 |   | 837         |  |             |        |              |   |        |  |   |       
|                                                 |  |       |           |                 |   |             |  |             |         |              |   |         |  |   |        
|                                                 |  | $     | 1,627,315 |                 | $ | 322,094     |  | $           | 212,800 |              | $ | 623,810 |  | $ | 468,611
|                                                 |  |       |           |                 |   |             |  |             |         |              |   |         |  |   |        



|(1) | Long-term debt at face value includes scheduled principal repayments and excludes interest payments.
|--- | ----------------------------------------------------------------------------------------------------



|(2) | The total projected interest
payments on long-term debt are based upon borrowings and interest rates as of December 31, 2006. The interest rate on variable rate debt is subject to changes beyond our control and may result in actual interest expense and payments differing
from the amounts above.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | The amounts indicated in this
line primarily reflect future contractual payments, including certain take-or-pay arrangements entered into as part of the normal course of business. The amounts do not include obligations related to other contractual purchase obligations that are
not take-or-pay arrangements. Such contractual purchase obligations are primarily purchase orders at fair value that are part of normal operations and are reflected in historical operating cash flow trends. Purchase obligations also include trade
and consumer promotion and advertising commitments. We do not believe such purchase obligations will adversely affect our liquidity position.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(4) | Other long-term obligations
relate to the Omaha restructuring plan and severance costs related to the Aurora transaction and the acquisition of the Armour Business.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in accordance with generally accepted accounting principles requires the use of judgment, estimates and
assumptions. We make such subjective determinations after careful consideration of our historical performance, managements experience, current economic trends and events and information from outside sources. Inherent in this process is the
possibility that actual results could differ from these estimates and assumptions for any particular period.

Our significant accounting policies are
detailed in Note 2 to the Consolidated Financial Statements for the fiscal year ended December 31, 2006. The following areas are the most important and require the most difficult, subjective judgments.

Revenue recognition. Revenue consists of sales of our frozen food and dry food products. We recognize revenue from product sales upon shipment to our customers,
at which point title and risk of loss are transferred and the selling price is fixed or determinable. Shipment completes the revenue-earning process, as an arrangement exists, delivery has occurred, the price is fixed and collectibility is
reasonably assured. We estimate discounts and product return allowances and record them as a reduction of sales in the same period that the revenue is recognized.

Trade and consumer promotional expenses. We offer various sales incentive programs to retailers and consumers. We record consumer incentive and trade promotion costs as a reduction of revenues in the year in which we offer these
programs. The recognition of expense for these programs involves the exercise of judgment related to performance and redemption estimates that we base on historical experience and other factors. Actual expenses may differ if the level of redemption
rates and performance vary from estimates. We also record slotting fees, which refers to payments to retailers to obtain shelf placement for new and existing product introductions. We reduce revenues for the amount of slotting estimated to each
customer in full at the time of the first shipment of the new product to that customer.

Inventories. We state inventories at the lower of average
cost or market. In determining market value, we provide allowances to adjust the carrying value of our inventories to the lower of cost or net realizable value, including any costs to sell or dispose. Appropriate consideration is given to
obsolescence, excessive inventory levels, product deterioration and other factors in evaluating net realizable value. These adjustments are estimates, which could vary significantly from actual requirements if future economic conditions, customer
inventory levels or competitive conditions differ from expectations.

Goodwill and Indefinite-lived Tradenames.We follow SFAS No. 142
Goodwill and Other Intangible Assets in evaluating the carrying value of goodwill and tradenames, which are indefinite lived intangible assets. At December 31, 2006, the carrying value of goodwill was $402.2 million. Goodwill was
assigned to our frozen foods segment, $67.7 million, and dry foods segment, $334.5 million. At December 31, 2006, the carrying value of the tradenames was $797.6 million. The tradenames were assigned to our frozen foods segment, $228.8 million,
and dry foods segment, $568.7 million. The goodwill and tradenames arose in connection with the Pinnacle Transaction, the Aurora Merger and the acquisition of the Armour business. The tradenames represent the fair value of the brands used in our
retail products. The goodwill, which is allocated to reporting units (one level below our reportable segments), represents the excess of the aggregate purchase price over the fair value of the identifiable net assets. We performed valuations of the
reporting units acquired in the transactions and allocated goodwill based upon the respective contribution to the excess purchase price.

We evaluate, on
at least an annual basis in December, the carrying amount of goodwill and indefinite-lived tradenames to determine whether current events and circumstances indicate that such carrying amount may no longer be recoverable. We measure recoverability of
the carrying value of these assets by comparison with discounted cash flows attributable to the tradename or the reporting unit to which the goodwill relates. In determining the amount of the impairment charges, if any, we compare the estimated fair
value of a tradename or reporting unit to its estimated book value. In estimating the fair value, we primarily use the income approach, which utilizes forecasted discounted cash flows to estimate the fair value. If the carrying value of a tradename
exceeds its fair value at the time of the evaluation, we would charge the shortfall to earnings. In measuring the amount of the goodwill impairment, we made a hypothetical allocation of the estimated fair value of the reporting units to the tangible
and intangible assets (other than goodwill) within the respective reporting units using the same rules for determining fair value and allocation under SFAS No. 141 Business Combinations as we would use if it were an original
purchase price allocation. If the carrying value of a reporting unit exceeds its fair value at the time of the evaluation, we would compare the implied fair value of the reporting units goodwill to its carrying amount and any shortfall would
be charged to earnings. Assumptions underlying fair value estimates are subject to risks and uncertainties. In our recent impairment tests, we forecasted cash flows for five years plus a terminal year and assumed a discount rate of 11%. Such cash
flows for each of the five years and terminal year assume growth rates that average between 0.6% and 6.5%, which are determined based upon our expectations for each of the individual reporting units.



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Pensions and retiree medical benefits. We provide pension and post-retirement benefits to certain employees and
retirees. Determining the costs associated with such benefits depends on various actuarial assumptions, including discount rates, expected return on plan assets, compensation increases, turnover rates and health care trend rates. Independent
actuaries, in accordance with generally accepted accounting principles, perform the required calculations to determine expense. We generally accumulate actual results that differ from the actuarial assumptions and amortize such results over future
periods.

Insurance reserves. We are self-insured and retain liabilities under our workers compensation insurance policy. An independent,
third-party actuary estimates the outstanding retained-insurance liabilities by projecting incurred losses to their ultimate liability and subtracting amounts paid-to-date to obtain the remaining liabilities. We base actuarial estimates of ultimate
liability on actual incurred losses, estimates of incurred but not yet reported losses  based on historical information from both us and the industryand the projected costs to resolve these losses. Retained-insurance liabilities may
differ based on new events or circumstances that might materially impact the ultimate cost to settle these losses.

Income taxes. We record income
taxes based on the amounts that are refundable or payable in the current year, and we include results of any difference between generally accepted accounting principles and U.S. tax reporting that we record as deferred tax assets or liabilities. The
Company reviews its deferred tax assets for recovery. A valuation allowance is established when the Company believes that it is more likely than not that some portion of its deferred tax assets will not be realized. Changes in valuation
allowances from period to period are included in the Companys tax provision in the period of change. Assessment of the appropriate amount and classification of income taxes is dependent on several factors, including estimates of the timing and
realization of deferred income tax assets and the timing of income tax payments. Actual collections and payments may differ from these estimates as a result of changes in tax laws as well as unanticipated future transactions impacting related income
tax balances.

Stock-based Compensation. We adopted SFAS No. 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 year ended December 31, 2006 reflect the impact of SFAS No. 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 No. 123(R). Stock-based compensation expense related to
employee stock options for fiscal 2006 as a result of adopting SFAS No. 123(R) was $1.9 million, or $1.892 millionnet of tax. In addition, we recorded $1.4 million (with no related tax impact) for stock-based compensation expense in fiscal 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 fiscal 2005.

SFAS No. 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 No. 123(R), we
accounted for stock-based awards to employees and directors using the intrinsic value method in accordance with APB No. 25 as allowed under Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation (SFAS No. 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.

We continue to use the lattice-binomial option-pricing model (lattice-binomial model) as our method of valuation for
stock-based awards, which was previously used for our pro forma information required under SFAS No. 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 five 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 No. 123(R) and Securities and Exchange Commission
Staff Accounting Bulletin No. 107 (SAB No. 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.



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NEW ACCOUNTING PRONOUNCEMENTS

In July 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes: An Interpretation of Statement of Financial Accounting
Standards (SFAS) Statement No. 109. This interpretation clarifies SFAS No. 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 and will be required to be adopted by the Company in the first quarter of
2007. We are assessing what impact, if any, adoption of this statement will have on its financial position, results of operations and cash flows.

In
September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. This Standard defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair
value measurements. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The Company is assessing what impact, if any, adoption of this
statement would have on its financial position, results of operations and cash flows.

The FASB also issued in September 2006 Statement of Financial
Accounting Standards No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans  an amendment of FASB Statemenst No. 87, 88, 106 and 132(R),(SFAS No. 158).This
Standard requires recognition of the funded status of a benefit plan in the statement of financial position. The Standard also requires recognition in accumulated other comprehensive income certain gains and losses that arise during the period but
are deferred under pension accounting rules, as well as modifies the timing of reporting and adds certain disclosures. SFAS No. 158 provides recognition and disclosure elements to be effective for fiscal years ending after December 15,
2007 and measurement elements to be effective for fiscal years ending after December 15, 2008. Had the Company adopted this provision in fiscal 2006, total liabilities are estimated to have increased by $2.0 million and total stockholders
equity would have decreased by $2.0 million.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and
Liabilities (SFAS No. 159). SFAS No. 159 provides companies with an option to report selected financial assets and liabilities at fair value, and establishes presentation and disclosure requirements designed to facilitate
comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. The new guidance is effective for fiscal years beginning after November 15, 2007. The Company is assessing what impact, if
any, adoption of this statement would have on its financial position, results of operations and cash flows.

In September 2006, the SEC staff issued Staff
Accounting Bulletin No. 108 (SAB No. 108), Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements. SAB No. 108 was issued in order to eliminate
the diversity of practice surrounding how public companies quantify financial statement misstatements. Traditionally, there have been two widely-recognized methods for quantifying the effects of financial statement misstatements: the
roll-over method and the iron curtain method. The roll-over method focuses primarily on the impact of a misstatement on the statement of earningsincluding the reversing effect of prior year misstatementsbut its
use can lead to the accumulation of misstatements in the balance sheet. The iron-curtain method, on the other hand, focuses primarily on the effect of correcting the period-end balance sheet with less emphasis on the reversing effects of prior year
errors on the statement of earnings. We currently use the iron curtain method for quantifying identified financial statement misstatements. In SAB No. 108, the SEC staff established an approach that requires quantification of financial
statement misstatements based on the effects of the misstatements on each of the companys financial statements and the related financial statement disclosures. This model is commonly referred to as a dual approach because it
requires quantification of errors under both the iron curtain and the roll-over methods. SAB No. 108 permits existing public companies to initially apply its provisions either by (i) restating prior financial statements as if the
dual approach had always been used or (ii) recording the cumulative effect of initially applying the dual approach as adjustments to the carrying values of assets and liabilities as of the start of fiscal 2006 with an
offsetting adjustment recorded to the opening balance of retained earnings. Use of the cumulative effect transition method requires detailed disclosure of the nature and amount of each individual error being corrected through the
cumulative adjustment and how and when it arose. We have initially applied the provisions of SAB No. 108 in connection with the preparation of our annual financial statements for the year ending December 31, 2006. The adoption of SAB
No. 108 did not have an impact on the Companys financial position, results of operations or cash flows.

OFF
BALANCE SHEET ARRANGEMENTS

As of December 31, 2006, we did not have any off balance sheet
obligations.



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

FINANCIAL INSTRUMENTS

We may 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.

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 December 31, 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 substantially the same basis for determining the floating rate payments on the senior secured
credit facilities.

These swaps were not designated as hedges pursuant to SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities. As of December 31, 2006, the fair value of the interest rate swaps was a net loss of $0.8 million. This was recorded as a long term liability of $1.9 million and a current asset of $1.0 million. As of December 25, 2005,
the fair value of the interest rate swap contracts was a gain of $2.4 million, which was all recorded in Other assets, net 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, are detailed below.



|                                       |                                  |           |        |                                  |  |   |                               |   |                           |   |                               |  |   |       |  |   |    
|-------------------------------------- | -------------------------------- | --------- | ------ | -------------------------------- |  | - | ----------------------------- | - | ------------------------- | - | ----------------------------- |  | - | ----- |  | - | ---
|Interest rate swaps  ($ in thousands)  |                                  | Successor |        | Predecessor                     
|                                       | Fiscal yearendedDecember 31,2006 |           |        | Fiscal yearendedDecember 25,2005 |  |   | 21 weeksendedDecember 26,2004 |   | 36 weeksendedJuly 31,2004 |   | 16 weeksendedNovember 24,2003
|Non-cash gain (loss)                   |                                  | $         | (3,269 | )                                |  | $ | (1,334                        | ) |                           | $ | 265                           |  | $ | 3,492 |  | $ | 115
|Gain (loss) realized in cash           |                                  |           | 2,382  |                                  |  |   | 6,023                         |   |                           |   |                              |  |   | 3,515 |  |   |   
|                                       |                                  |           |        |                                  |  |   |                               |   |                           |   |                               |  |   |       |  |   |    
|Net gain (loss) on interest rate swaps |                                  | $         | (887   | )                                |  | $ | 4,689                         |   |                           | $ | 265                           |  | $ | 7,007 |  | $ | 115
|                                       |                                  |           |        |                                  |  |   |                               |   |                           |   |                               |  |   |       |  |   |    

We 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 December 31, 2006, the trades in effect mature from January through June 2007 and have various notional quantities of MMBTUs per month. The Company will pay a fixed
price ranging from $7.16 to $7.69 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 31, 2006 and December 25, 2005, the fair value of the natural gas swaps was a loss of $0.2 million and a gain of less than $0.1 million,
respectively. At December 31, 2006, the fair value of the gas swap is recorded in accrued liabilities. At December 25, 2005, the fair value of the gas swaps was recorded in other current assets. The related offset is recorded as a gain and
was recognized as a reduction to cost of products sold. 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, are detailed below.



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|                                     |  |                                  |        |   |                                  |   |     |                               |  |   |    
|------------------------------------ |  | -------------------------------- | ------ | - | -------------------------------- | - | --- | ----------------------------- |  | - | ---
|                                     |  | Successor                       
|Natural gas swaps  ($ in thousands)  |  | Fiscal yearendedDecember 31,2006 |        |   | Fiscal yearendedDecember 25,2005 |   |     | 21 weeksendedDecember 26,2004
|Non-cash gain (loss)                 |  | $                                | (168   | ) |                                  |   | (86 | )                             |  | $ | 95 
|Gain (loss) realized in cash         |  |                                  | (1,207 | ) |                                  |   | 902 |                               |  |   | 243
|                                     |  |                                  |        |   |                                  |   |     |                               |  |   |    
|Net gain (loss) on natural gas swaps |  | $                                | (1,375 | ) |                                  | $ | 816 |                               |  | $ | 338
|                                     |  |                                  |        |   |                                  |   |     |                               |  |   |    

We 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. dollar and the Canadian dollar. Each agreement was 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. This swap was not designed as a hedge pursuant to SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities.

As of December 31, 2006, there were no outstanding foreign exchange currency contracts. As of December 25, 2005, the fair value of the remaining foreign
exchange swaps was a loss of $0.3 million, which was 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, are detailed below.



|                                                   |  |                                  |      |   |                                  |   |      |  
|-------------------------------------------------- |  | -------------------------------- | ---- | - | -------------------------------- | - | ---- | -
|                                                   |  | Successor                        |     
|Foreign Currency Exchange Swaps  ($ in thousands)  |  | Fiscal yearendedDecember 31,2006 |      |   | Fiscal yearendedDecember 25,2005 |  
|Non-cash gain (loss)                               |  | $                                | 280  |   |                                  | $ | (280 | )
|Gain (loss) realized in cash                       |  |                                  | (557 | ) |                                  |   | (66  | )
|                                                   |  |                                  |      |   |                                  |   |      |  
|Net gain (loss) on foreign currency exchange swaps |  | $                                | (277 | ) |                                  | $ | (346 | )
|                                                   |  |                                  |      |   |                                  |   |      |  

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 31, 2006 was $7.8 million, which approximates fair value. As of December 31, 2006, we also utilized
letters of credit in connection with the purchase of raw materials in the amount of $1.4 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 81/4% senior subordinated notes that are classified as long term debt on the Consolidated Balance Sheet at December 31, 2006, was approximately its carrying value.



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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 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 December 31, 2006, the trades in
effect mature from January through June 2007 and have various notional quantities of MMBTUs per month. The Company will pay a fixed price ranging from $7.16 to $7.69 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 31, 2006 and
December 25, 2005, the fair value of the natural gas swaps was a loss of $0.2 million and a gain of less than $0.1 million, respectively. At December 31, 2006, the fair value of the gas swap is recorded in accrued liabilities. At
December 25, 2005, the fair value of the gas swaps was recorded in other current assets. The related offset is recorded as a gain and was recognized as a reduction to cost of products sold. 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, are detailed below.



|                                     |  |                                  |        |   |                                  |   |     |                               |  |   |    
|------------------------------------ |  | -------------------------------- | ------ | - | -------------------------------- | - | --- | ----------------------------- |  | - | ---
|                                     |  | Successor                       
|Natural gas swaps  ($ in thousands)  |  | Fiscal yearendedDecember 31,2006 |        |   | Fiscal yearendedDecember 25,2005 |   |     | 21 weeksendedDecember 26,2004
|Non-cash gain (loss)                 |  | $                                | (168   | ) |                                  |   | (86 | )                             |  | $ | 95 
|Gain (loss) realized in cash         |  |                                  | (1,207 | ) |                                  |   | 902 |                               |  |   | 243
|                                     |  |                                  |        |   |                                  |   |     |                               |  |   |    
|Net gain (loss) on natural gas swaps |  | $                                | (1,375 | ) |                                  | $ | 816 |                               |  | $ | 338
|                                     |  |                                  |        |   |                                  |   |     |                               |  |   |    

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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##### Table of Contents

|ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|------- | -------------------------------------------

Financial
statements begin on the following page



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##### Table of Contents

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholder of

Pinnacle Foods Group Inc.:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, cash flows and shareholders
equity present fairly, in all material respects, the financial position of Pinnacle Foods Group Inc. and its subsidiaries (the Company) at December 31, 2006 and December 25, 2005, and the results of their operations and their
cash flows for the years ended December 31, 2006 and December 25, 2005, for the period from August 1, 2004 to December 26, 2004 and for the period from November 25, 2003 to July 31, 2004 (Successor as
defined in Note 1) in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it accounts for share-based compensation in 2006.



|                              
|------------------------------
|                              
|/s/ PricewaterhouseCoopers LLP
|Philadelphia, Pennsylvania    
|March 5, 2007                 



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##### Table of Contents

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholder of

Pinnacle Foods Group Inc.:

In our opinion, the accompanying consolidated statements of operations, cash flows and shareholders equity present fairly, in all material respects,
the results of operations and cash flows of Pinnacle Foods Group, Inc. and its subsidiaries (the Company) for the period from August 1, 2003 to November 24, 2003 (Predecessor as defined in Note 1) in conformity with
accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our
audits. We conducted our audit of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.



|                              
|------------------------------
|                              
|/s/ PricewaterhouseCoopers LLP
|Philadelphia, Pennsylvania    
|November 24, 2004             



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##### Table of Contents

PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)



|                                          |  |                                  |           |                                  |             |           |                               |  |   |                           |   |  |                               |         |   |  |   |         |  
|----------------------------------------- |  | -------------------------------- | --------- | -------------------------------- | ----------- | --------- | ----------------------------- |  | - | ------------------------- | - |  | ----------------------------- | ------- | - |  | - | ------- | -
|                                          |  | Successor                        |           |                                  | Predecessor |          
|                                          |  | Fiscal yearendedDecember 31,2006 |           | Fiscal yearendedDecember 25,2005 |             |           | 21 weeksendedDecember 26,2004 |  |   | 36 weeksendedJuly 31,2004 |   |  | 16 weeksendedNovember 24,2003 |        
|Net sales                                 |  | $                                | 1,442,256 |                                  | $           | 1,255,735 |                               |  | $ | 511,190                   |   |  | $                             | 574,352 |   |  | $ | 181,379 |  
|                                          |  |                                  |           |                                  |             |           |                               |  |   |                           |   |  |                               |         |   |  |   |         |  
|Costs and expenses                        |  |                                  |           |                                  |             |           |                               |  |   |                           |   |  |                               |         |   |  |   |         |  
|Cost of products sold                     |  |                                  | 1,122,646 |                                  |             | 997,198   |                               |  |   | 420,080                   |   |  |                               | 502,967 |   |  |   | 134,233 |  
|Marketing and selling expenses            |  |                                  | 103,550   |                                  |             | 101,159   |                               |  |   | 53,588                    |   |  |                               | 57,910  |   |  |   | 24,335  |  
|Administrative expenses                   |  |                                  | 52,447    |                                  |             | 40,242    |                               |  |   | 15,216                    |   |  |                               | 32,258  |   |  |   | 9,454   |  
|Research and development expenses         |  |                                  | 4,037     |                                  |             | 3,625     |                               |  |   | 1,459                     |   |  |                               | 2,436   |   |  |   | 814     |  
|Goodwill impairment charge                |  |                                  |          |                                  |             | 54,757    |                               |  |   | 4,308                     |   |  |                               | 1,835   |   |  |   |        |  
|Other expense (income), net               |  |                                  | 14,186    |                                  |             | 31,836    |                               |  |   | 5,680                     |   |  |                               | 38,096  |   |  |   | 7,956   |  
|                                          |  |                                  |           |                                  |             |           |                               |  |   |                           |   |  |                               |         |   |  |   |         |  
|Total costs and expenses                  |  |                                  | 1,296,866 |                                  |             | 1,228,817 |                               |  |   | 500,331                   |   |  |                               | 635,502 |   |  |   | 176,792 |  
|                                          |  |                                  |           |                                  |             |           |                               |  |   |                           |   |  |                               |         |   |  |   |         |  
|Earnings (loss) before interest and taxes |  |                                  | 145,390   |                                  |             | 26,918    |                               |  |   | 10,859                    |   |  |                               | (61,150 | ) |  |   | 4,587   |  
|Interest expense                          |  |                                  | 86,615    |                                  |             | 71,104    |                               |  |   | 26,260                    |   |  |                               | 26,240  |   |  |   | 9,310   |  
|Interest income                           |  |                                  | 1,247     |                                  |             | 584       |                               |  |   | 120                       |   |  |                               | 320     |   |  |   | 143     |  
|                                          |  |                                  |           |                                  |             |           |                               |  |   |                           |   |  |                               |         |   |  |   |         |  
|Earnings (loss) before income taxes       |  |                                  | 60,022    |                                  |             | (43,602   | )                             |  |   | (15,281                   | ) |  |                               | (87,070 | ) |  |   | (4,580  | )
|Provision (benefit) for income taxes      |  |                                  | 26,098    |                                  |             | (426      | )                             |  |   | 9,425                     |   |  |                               | (3,157  | ) |  |   | (1,506  | )
|                                          |  |                                  |           |                                  |             |           |                               |  |   |                           |   |  |                               |         |   |  |   |         |  
|Net earnings (loss)                       |  | $                                | 33,924    |                                  | $           | (43,176   | )                             |  | $ | (24,706                   | ) |  | $                             | (83,913 | ) |  | $ | (3,074  | )
|                                          |  |                                  |           |                                  |             |           |                               |  |   |                           |   |  |                               |         |   |  |   |         |  

See accompanying Notes to Consolidated Financial Statements



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands)



|                                                                                          |  |                  |           |   |                  |   |           |  
|----------------------------------------------------------------------------------------- |  | ---------------- | --------- | - | ---------------- | - | --------- | -
|                                                                                          |  | December 31,2006 |           |   | December 25,2005 |  
|Current assets:                                                                           |  |                  |           |   |                  |   |           |  
|Cash and cash equivalents                                                                 |  | $                | 12,337    |   |                  | $ | 519       |  
|Accounts receivable, net                                                                  |  |                  | 85,583    |   |                  |   | 76,255    |  
|Inventories, net                                                                          |  |                  | 178,300   |   |                  |   | 170,621   |  
|Other current assets                                                                      |  |                  | 4,496     |   |                  |   | 2,944     |  
|Deferred tax assets                                                                       |  |                  | 1,838     |   |                  |   | 1,417     |  
|                                                                                          |  |                  |           |   |                  |   |           |  
|Total current assets                                                                      |  |                  | 282,554   |   |                  |   | 251,756   |  
|Plant assets, net                                                                         |  |                  | 253,387   |   |                  |   | 219,101   |  
|Tradenames                                                                                |  |                  | 797,582   |   |                  |   | 761,282   |  
|Other assets, net                                                                         |  |                  | 56,397    |   |                  |   | 44,842    |  
|Goodwill                                                                                  |  |                  | 402,161   |   |                  |   | 359,513   |  
|                                                                                          |  |                  |           |   |                  |   |           |  
|Total assets                                                                              |  | $                | 1,792,081 |   |                  | $ | 1,636,494 |  
|                                                                                          |  |                  |           |   |                  |   |           |  
|Current liabilities:                                                                      |  |                  |           |   |                  |   |           |  
|Current portion of long-term obligations                                                  |  | $                | 123       |   |                  | $ | 153       |  
|Notes payable                                                                             |  |                  | 210       |   |                  |   | 184       |  
|Accounts payable                                                                          |  |                  | 57,543    |   |                  |   | 61,765    |  
|Accrued trade marketing expense                                                           |  |                  | 37,152    |   |                  |   | 32,980    |  
|Accrued liabilities                                                                       |  |                  | 81,248    |   |                  |   | 71,459    |  
|Accrued income taxes                                                                      |  |                  | 1,042     |   |                  |   | 1,035     |  
|                                                                                          |  |                  |           |   |                  |   |           |  
|Total current liabilities                                                                 |  |                  | 177,318   |   |                  |   | 167,576   |  
|Long-term debt (includes $2,748 owed to a related party at December 31, 2006)             |  |                  | 920,630   |   |                  |   | 888,311   |  
|Pension and other postretirement benefits                                                 |  |                  | 16,109    |   |                  |   | 10,899    |  
|Other long-term liabilities                                                               |  |                  | 1,962     |   |                  |   |          |  
|Deferred tax liabilities                                                                  |  |                  | 237,707   |   |                  |   | 213,184   |  
|                                                                                          |  |                  |           |   |                  |   |           |  
|Total liabilities                                                                         |  |                  | 1,353,726 |   |                  |   | 1,279,970 |  
|Commitments and contingencies                                                             |  |                  |           |   |                  |   |           |  
|Shareholders equity:                                                                     |  |                  |           |   |                  |   |           |  
|Pinnacle Common stock: par value $.01 per share, 100 shares authorized, issued 100 shares |  |                  |          |   |                  |   |          |  
|Additional paid-in-capital                                                                |  |                  | 573,403   |   |                  |   | 529,425   |  
|Accumulated other comprehensive income (loss)                                             |  |                  | 161       |   |                  |   | (3,768    | )
|Carryover of Predecessor basis of net assets                                              |  |                  | (17,338   | ) |                  |   | (17,338   | )
|Accumulated deficit                                                                       |  |                  | (117,871  | ) |                  |   | (151,795  | )
|                                                                                          |  |                  |           |   |                  |   |           |  
|Total shareholders equity                                                                |  |                  | 438,355   |   |                  |   | 356,524   |  
|                                                                                          |  |                  |           |   |                  |   |           |  
|Total liabilities and shareholders equity                                                |  | $                | 1,792,081 |   |                  | $ | 1,636,494 |  
|                                                                                          |  |                  |           |   |                  |   |           |  

See accompanying Notes to Consolidated Financial Statements



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)



|                                                    |  |                                  |          |   |                                  |   |         |                               |  |   |                           |   |  |                               |            |   |  |   |         |  
|--------------------------------------------------- |  | -------------------------------- | -------- | - | -------------------------------- | - | ------- | ----------------------------- |  | - | ------------------------- | - |  | ----------------------------- | ---------- | - |  | - | ------- | -
|                                                    |  | Successor                        |          |   | Predecessor                      |  
|                                                    |  | Fiscal yearendedDecember 31,2006 |          |   | Fiscal yearendedDecember 25,2005 |   |         | 21 weeksendedDecember 26,2004 |  |   | 36 weeksendedJuly 31,2004 |   |  | 16 weeksendedNovember 24,2003 |           
|Cash flows from operating activities                |  |                                  |          |   |                                  |   |         |                               |  |   |                           |   |  |                               |            |   |  |   |         |  
|Net earnings (loss) from operations                 |  | $                                | 33,924   |   |                                  | $ | (43,176 | )                             |  | $ | (24,706                   | ) |  | $                             | (83,913    | ) |  | $ | (3,074  | )
|Non-cash charges (credits) to net earnings          |  |                                  |          |   |                                  |   |         |                               |  |   |                           |   |  |                               |            |   |  |   |         |  
|Depreciation and amortization                       |  |                                  | 42,187   |   |                                  |   | 39,088  |                               |  |   | 17,068                    |   |  |                               | 24,570     |   |  |   | 6,136   |  
|Restructuring and impairment charges                |  |                                  | 5,480    |   |                                  |   | 75,521  |                               |  |   | 6,969                     |   |  |                               | 16,312     |   |  |   | 1,262   |  
|Amortization of debt acquisition costs              |  |                                  | 7,424    |   |                                  |   | 6,334   |                               |  |   | 1,995                     |   |  |                               | 2,652      |   |  |   | 6,907   |  
|Amortization of bond premium                        |  |                                  | (567     | ) |                                  |   | (525    | )                             |  |   | (201                      | ) |  |                               | (323       | ) |  |   |        |  
|Change in value of financial instruments            |  |                                  | 3,158    |   |                                  |   | 1,703   |                               |  |   | (360                      | ) |  |                               | (3,492     | ) |  |   |        |  
|Equity related compensation charges                 |  |                                  | 3,315    |   |                                  |   |        |                               |  |   |                          |   |  |                               | 18,400     |   |  |   | 4,935   |  
|Postretirement healthcare benefits                  |  |                                  | 897      |   |                                  |   | (256    | )                             |  |   | (1,262                    | ) |  |                               | (593       | ) |  |   | (527    | )
|Other long term liabilities                         |  |                                  | 80       |   |                                  |   |        |                               |  |   |                          |   |  |                               |           |   |  |   |        |  
|Pension expense                                     |  |                                  | 1,695    |   |                                  |   | 595     |                               |  |   | 310                       |   |  |                               | 820        |   |  |   | 342     |  
|Deferred income taxes                               |  |                                  | 24,965   |   |                                  |   | (616    | )                             |  |   | 9,398                     |   |  |                               | (2,942     | ) |  |   | (986    | )
|Changes in working capital, net of acquisitions     |  |                                  |          |   |                                  |   |         |                               |  |   |                           |   |  |                               |            |   |  |   |         |  
|Accounts receivable                                 |  |                                  | (9,327   | ) |                                  |   | (1,607  | )                             |  |   | (7,734                    | ) |  |                               | 29,059     |   |  |   | (9,297  | )
|Inventories                                         |  |                                  | 33,852   |   |                                  |   | 35,092  |                               |  |   | (23,010                   | ) |  |                               | 20,483     |   |  |   | (25,288 | )
|Accrued trade marketing expense                     |  |                                  | 4,171    |   |                                  |   | (13,178 | )                             |  |   | 3,188                     |   |  |                               | 468        |   |  |   | (4,815  | )
|Accounts payable                                    |  |                                  | 1,553    |   |                                  |   | (32,074 | )                             |  |   | 18,682                    |   |  |                               | 24,378     |   |  |   | 1,279   |  
|Accrued liabilities                                 |  |                                  | 7,162    |   |                                  |   | (2,386  | )                             |  |   | (5,606                    | ) |  |                               | (17,220    | ) |  |   | (2,720  | )
|Other current assets                                |  |                                  | 1,594    |   |                                  |   | 232     |                               |  |   | 2,781                     |   |  |                               | 2,411      |   |  |   | 2,407   |  
|                                                    |  |                                  |          |   |                                  |   |         |                               |  |   |                           |   |  |                               |            |   |  |   |         |  
|Net cash provided by (used in) operating activities |  |                                  | 161,563  |   |                                  |   | 64,747  |                               |  |   | (2,488                    | ) |  |                               | 31,070     |   |  |   | (23,439 | )
|                                                    |  |                                  |          |   |                                  |   |         |                               |  |   |                           |   |  |                               |            |   |  |   |         |  
|Cash flows from investing activities                |  |                                  |          |   |                                  |   |         |                               |  |   |                           |   |  |                               |            |   |  |   |         |  
|Payments for business acquisitions                  |  |                                  | (189,208 | ) |                                  |   |        |                               |  |   |                          |   |  |                               |           |   |  |   |        |  
|Capital expenditures                                |  |                                  | (26,202  | ) |                                  |   | (30,931 | )                             |  |   | (8,073                    | ) |  |                               | (9,826     | ) |  |   | (1,511  | )
|Pinnacle merger consideration                       |  |                                  |         |   |                                  |   | 1,595   |                               |  |   | (130                      | ) |  |                               | (361,062   | ) |  |   |        |  
|Pinnacle merger costs                               |  |                                  |         |   |                                  |   |        |                               |  |   |                          |   |  |                               | (7,154     | ) |  |   |        |  
|Aurora merger consideration                         |  |                                  |         |   |                                  |   |        |                               |  |   |                          |   |  |                               | (663,759   | ) |  |   |        |  
|Aurora merger costs                                 |  |                                  |         |   |                                  |   |        |                               |  |   | (2,333                    | ) |  |                               | (16,980    | ) |  |   |        |  
|Sale of plant assets                                |  |                                  | 1,753    |   |                                  |   | 561     |                               |  |   |                          |   |  |                               |           |   |  |   |        |  
|Acquisition of license                              |  |                                  |         |   |                                  |   |        |                               |  |   | (1,919                    | ) |  |                               |           |   |  |   |        |  
|                                                    |  |                                  |          |   |                                  |   |         |                               |  |   |                           |   |  |                               |            |   |  |   |         |  
|Net cash used in investing activities               |  |                                  | (213,657 | ) |                                  |   | (28,775 | )                             |  |   | (12,455                   | ) |  |                               | (1,058,781 | ) |  |   | (1,511  | )
|                                                    |  |                                  |          |   |                                  |   |         |                               |  |   |                           |   |  |                               |            |   |  |   |         |  
|Cash flows from financing activities                |  |                                  |          |   |                                  |   |         |                               |  |   |                           |   |  |                               |            |   |  |   |         |  
|Change in bank overdrafts                           |  |                                  | (5,805   | ) |                                  |   | 6,404   |                               |  |   | (16,413                   | ) |  |                               | 11,603     |   |  |   | (262    | )
|Repayment of capital lease obligations              |  |                                  | (155     | ) |                                  |   | (129    | )                             |  |   | (41                       | ) |  |                               | (4         | ) |  |   |        |  
|Equity contributions                                |  |                                  | 40,663   |   |                                  |   | 9,992   |                               |  |   |                          |   |  |                               | 275,088    |   |  |   |        |  
|Debt acquisition costs                              |  |                                  | (3,817   | ) |                                  |   | (51     | )                             |  |   | (2,822                    | ) |  |                               | (37,766    | ) |  |   |        |  
|Proceeds from bond offerings                        |  |                                  |         |   |                                  |   |        |                               |  |   |                          |   |  |                               | 400,976    |   |  |   |        |  
|Proceeds from bank term loans                       |  |                                  | 143,000  |   |                                  |   |        |                               |  |   |                          |   |  |                               | 545,000    |   |  |   |        |  
|Proceeds from notes payable borrowing               |  |                                  | 2,410    |   |                                  |   | 31,626  |                               |  |   | 30,000                    |   |  |                               | 21,500     |   |  |   |        |  
|Repayments of notes payable                         |  |                                  | (2,384   | ) |                                  |   | (31,442 | )                             |  |   | (30,000                   | ) |  |                               | (21,500    | ) |  |   |        |  
|Repayments of Predecessors long term obligations   |  |                                  |         |   |                                  |   |        |                               |  |   |                          |   |  |                               | (175,000   | ) |  |   |        |  
|Repayments of long term obligations                 |  |                                  | (110,000 | ) |                                  |   | (54,088 | )                             |  |   | (1,363                    | ) |  |                               | (1,363     | ) |  |   |        |  
|                                                    |  |                                  |          |   |                                  |   |         |                               |  |   |                           |   |  |                               |            |   |  |   |         |  
|Net cash provided by (used in) financing activities |  |                                  | 63,912   |   |                                  |   | (37,688 | )                             |  |   | (20,639                   | ) |  |                               | 1,018,534  |   |  |   | (262    | )
|                                                    |  |                                  |          |   |                                  |   |         |                               |  |   |                           |   |  |                               |            |   |  |   |         |  
|Effect of exchange rate changes on cash             |  |                                  |         |   |                                  |   |        |                               |  |   | 36                        |   |  |                               |           |   |  |   | 42      |  
|Net change in cash and cash equivalents             |  |                                  | 11,818   |   |                                  |   | (1,716  | )                             |  |   | (35,546                   | ) |  |                               | (9,177     | ) |  |   | (25,170 | )
|Cash and cash equivalents - beginning of period     |  |                                  | 519      |   |                                  |   | 2,235   |                               |  |   | 37,781                    |   |  |                               | 46,958     |   |  |   | 72,128  |  
|                                                    |  |                                  |          |   |                                  |   |         |                               |  |   |                           |   |  |                               |            |   |  |   |         |  
|Cash and cash equivalents - end of period           |  | $                                | 12,337   |   |                                  | $ | 519     |                               |  | $ | 2,235                     |   |  | $                             | 37,781     |   |  | $ | 46,958  |  
|                                                    |  |                                  |          |   |                                  |   |         |                               |  |   |                           |   |  |                               |            |   |  |   |         |  
|Supplemental disclosures of cash flow information:  |  |                                  |          |   |                                  |   |         |                               |  |   |                           |   |  |                               |            |   |  |   |         |  
|Interest paid                                       |  | $                                | 75,777   |   |                                  | $ | 65,832  |                               |  | $ | 23,547                    |   |  | $                             | 28,776     |   |  | $ | 2,517   |  
|Interest received                                   |  |                                  | 1,247    |   |                                  |   | 570     |                               |  |   | 120                       |   |  |                               | 320        |   |  |   | 143     |  
|Income taxes refunded (paid)                        |  |                                  | (1,034   | ) |                                  |   | 305     |                               |  |   | 627                       |   |  |                               | (37        | ) |  |   | 3,308   |  
|Non-cash investing activity:                        |  |                                  |          |   |                                  |   |         |                               |  |   |                           |   |  |                               |            |   |  |   |         |  
|Capital leases                                      |  |                                  | (12      | ) |                                  |   | (126    | )                             |  |   | (357                      | ) |  |                               |            |   |  |   |         |  
|Aurora merger consideration                         |  |                                  |         |   |                                  |   |        |                               |  |   |                          |   |  |                               | (225,120   | ) |  |   |        |  
|Aurora merger costs                                 |  |                                  |         |   |                                  |   |        |                               |  |   |                          |   |  |                               | (4,628     | ) |  |   |        |  
|Non-cash financing activity                         |  |                                  |          |   |                                  |   |         |                               |  |   |                           |   |  |                               |            |   |  |   |         |  
|Aurora merger equity contribution                   |  |                                  |         |   |                                  |   |        |                               |  |   |                          |   |  |                               | 225,120    |   |  |   |        |  

See accompanying Notes to Consolidated Financial Statements



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY

(in thousands)



|                                                     |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   |         |  
|---------------------------------------------------- |  | ------------ |  | -------------------------- | ----- | --------------------------- | - | ------- | -------------------------------------------- | - | -------- | --------------------------------------------- |  | - | ------------------------- | - |  | - | ------ | - |  | - | ------- | -
|                                                     |  | Common Stock |  | Additional Paid In Capital |       | Retained Earnings (Deficit) |   |         | Carryover of Predecessor basis of
net assets |   |          | Accumulated Other Comprehensive Income (loss) |  |   | Total ShareholdersEquity |  
|                                                     |  | Shares       |  | Amount                     |       |                             |   |         |                                             
|Predecessor                                          |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   |         |  
|Balance at July 31, 2003                             |  | 162,604      |  | $                          | 1,626 |                             | $ | 164,322 |                                              | $ | 12,392   |                                               |  |   |                           |   |  | $ | 147    |   |  | $ | 178,487 |  
|                                                     |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   |         |  
|Stock Compensation                                   |  |              |  |                            |       |                             |   | 4,935   |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   | 4,935   |  
|Comprehensive income:                                |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   |         |  
|Net loss                                             |  |              |  |                            |       |                             |   |         |                                              |   | (3,074   | )                                             |  |   |                           |   |  |   |        |   |  |   | (3,074  | )
|Foreign currency translation                         |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   | 78     |   |  |   | 78      |  
|                                                     |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   |         |  
|Total comprehensive loss                             |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   | (2,996  | )
|                                                     |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   |         |  
|Balance at November 24, 2003                         |  | 162,604      |  | $                          | 1,626 |                             | $ | 169,257 |                                              | $ | 9,318    |                                               |  | $ |                          |   |  | $ | 225    |   |  | $ | 180,426 |  
|                                                     |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   |         |  
|                                                     |  |              |  |                            |       |                             |  
|Successor                                            |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   |         |  
|Balance at November 25, 2003                         |  | 100          |  | $                          |      |                             | $ | 180,637 |                                              | $ |         |                                               |  | $ | (17,495                   | ) |  | $ |       |   |  | $ | 163,142 |  
|                                                     |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   |         |  
|Equity contributions:                                |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   |         |  
|Cash                                                 |  |              |  |                            |       |                             |   | 95,276  |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   | 95,276  |  
|Noncash                                              |  |              |  |                            |       |                             |   | 225,120 |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   | 225,120 |  
|Equity related compensation                          |  |              |  |                            |       |                             |   | 18,400  |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   | 18,400  |  
|Comprehensive income:                                |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   |         |  
|Net loss                                             |  |              |  |                            |       |                             |   |         |                                              |   | (83,913  | )                                             |  |   |                           |   |  |   |        |   |  |   | (83,913 | )
|Foreign currency translation                         |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   | (10    | ) |  |   | (10     | )
|                                                     |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   |         |  
|Total comprehensive loss                             |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   | (83,923 | )
|                                                     |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   |         |  
|Balance at July 31, 2004                             |  | 100          |  | $                          |      |                             | $ | 519,433 |                                              | $ | (83,913  | )                                             |  | $ | (17,495                   | ) |  | $ | (10    | ) |  | $ | 418,015 |  
|                                                     |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   |         |  
|Comprehensive income:                                |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   |         |  
|Net loss                                             |  |              |  |                            |       |                             |   |         |                                              |   | (24,706  | )                                             |  |   |                           |   |  |   |        |   |  |   | (24,706 | )
|Foreign currency translation                         |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   | 58     |   |  |   | 58      |  
|                                                     |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   |         |  
|Total comprehensive loss                             |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   | (24,648 | )
|                                                     |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   |         |  
|Balance at December 26, 2004                         |  | 100          |  | $                          |      |                             | $ | 519,433 |                                              | $ | (108,619 | )                                             |  | $ | (17,495                   | ) |  | $ | 48     |   |  | $ | 393,367 |  
|                                                     |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   |         |  
|Equity contributions:                                |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   |         |  
|Cash                                                 |  |              |  |                            |       |                             |   | 9,992   |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   | 9,992   |  
|Impact of additional purchase accounting adjustments |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   | 157                       |   |  |   |        |   |  |   | 157     |  
|Comprehensive income:                                |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   |         |  
|Net loss                                             |  |              |  |                            |       |                             |   |         |                                              |   | (43,176  | )                                             |  |   |                           |   |  |   |        |   |  |   | (43,176 | )
|Foreign currency translation                         |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   | 203    |   |  |   | 203     |  
|Minimum pension liability                            |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   | (4,019 | ) |  |   | (4,019  | )
|                                                     |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   |         |  
|Total comprehensive loss                             |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   | (46,992 | )
|                                                     |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   |         |  
|Balance at December 25, 2005                         |  | 100          |  | $                          |      |                             | $ | 529,425 |                                              | $ | (151,795 | )                                             |  | $ | (17,338                   | ) |  | $ | (3,768 | ) |  | $ | 356,524 |  
|                                                     |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   |         |  
|Equity contributions:                                |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   |         |  
|Cash                                                 |  |              |  |                            |       |                             |   | 40,663  |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   | 40,663  |  
|Equity related compensation                          |  |              |  |                            |       |                             |   | 3,315   |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   | 3,315   |  
|Comprehensive income:                                |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   |         |  
|Net earnings                                         |  |              |  |                            |       |                             |   |         |                                              |   | 33,924   |                                               |  |   |                           |   |  |   |        |   |  |   | 33,924  |  
|Foreign currency translation                         |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   | (52    | ) |  |   | (52     | )
|Minimum pension liability                            |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   | 3,981  |   |  |   | 3,981   |  
|                                                     |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   |         |  
|Total comprehensive income                           |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   | 37,853  |  
|                                                     |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   |         |  
|Balance at December 31, 2006                         |  | 100          |  | $                          |      |                             | $ | 573,403 |                                              | $ | (117,871 | )                                             |  | $ | (17,338                   | ) |  | $ | 161    |   |  | $ | 438,355 |  
|                                                     |  |              |  |                            |       |                             |   |         |                                              |   |          |                                               |  |   |                           |   |  |   |        |   |  |   |         |  

See accompanying Notes to Consolidated Financial Statements.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



|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 dinners, 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, Armour
canned meat and Open Pit barbecue sauce, as well as food service and private label products.

As discussed in more detail below, effective
November 24, 2003, Pinnacle Foods Holding Corporation (PFHC) and certain newly-formed investor companies consummated a merger (the Pinnacle Transaction). The ultimate parent of these investor companies is Crunch Equity
Holding, LLC (LLC). Each share of PFHCs issued and outstanding stock immediately prior to the closing of the Pinnacle Transaction was converted into the right to receive the per share merger consideration in cash. Therefore, PFHC
was effectively acquired by LLC on November 25, 2003.

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, with Aurora surviving this merger. The combination of Aurora and PFHC is treated as a purchase, with LLC as the
accounting acquirer, in accordance with Statement of Financial Accounting Standards (SFAS) No. 141, Business Combinations. This restructuring transaction and the related merger was completed on March 19, 2004 and
the surviving company was renamed PFGI.

For purposes of identification and description, the Company is referred to as the Predecessor for the
period prior to the Pinnacle Transaction occurring on November 24, 2003, and the Successor for the period subsequent to the Pinnacle Transaction.

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. Accordingly, the Company is presenting audited financial statements for the 21 weeks
ended December 26, 2004, the transition period, in this Form 10-K.

Pinnacle Transaction and Change of Control

On August 8, 2003, PFHC, Crunch Holding Corp. (CHC) and Crunch Acquisition Corp. (CAC) entered into an agreement and plan of merger. CHC was
a newly formed Delaware corporation and a wholly-owned subsidiary of LLC, and CAC was a newly formed Delaware corporation and a wholly-owned subsidiary of CHC. J.P. Morgan Partners, LLC (JPMP), J.W. Childs Associates, L.P. (or its
affiliates, as appropriate, JWC) and CDM Investor Group LLC (CDM and together with JPMP and JWC, the Sponsors), together with certain of their affiliates, as of the closing of this Pinnacle Transaction, own 100%
of the outstanding voting units of LLC on a fully diluted basis. Prior to the Pinnacle Transaction, JPMP owned approximately 9.2% of PFHCs common stock. The closing of the Pinnacle Transaction occurred on November 25, 2003.

Each share of PFHCs issued and outstanding stock immediately prior to closing was converted into the right to receive the per share Merger consideration
(approximately $2.14 per share) in cash. The aggregate purchase price was approximately $485 million, including the repayment of outstanding debt under the Predecessors Senior Secured Credit Facilities. The estimated working capital adjustment
at the time of the closing was approximately $10 million. During the first quarter of 2005, the working capital adjustment was settled at $8.4 million and resulted in a reduction of purchase price and goodwill of approximately $1.6 million.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



In June 2001, the FASB issued Statement of Financial Accounting Standards (SFAS) No. 141,
Business Combinations, and SFAS No. 142, Goodwill and Other Intangible Assets, which establishes accounting and reporting for business combinations. SFAS No. 141 requires all business combinations be accounted for
using the purchase method of accounting. SFAS No. 142 provides that goodwill and other intangible assets with indefinite lives will not be amortized, but will be tested for impairment on an annual basis. The Successor has accounted for the
Pinnacle Transaction in accordance with these standards. The Merger of PFHC with CAC is being treated as a purchase with LLC (whose sole asset is its indirect investment in the common stock of PFHC) as the accounting acquiror in accordance with SFAS
No. 141, and is accounted for in accordance with Emerging Issues Task Force (EITF) Issue No. 88-16, Basis in Leveraged Buyout Transactions.

Following the guidance in EITF Issue No. 88-16, the net assets associated with the 9.2% of the outstanding PFHC common stock owned by JPMP and certain members of CDM before the Pinnacle Transaction were carried
over at the Predecessor basis and the net assets related to the 90.8% of the outstanding PFHC common stock before the Merger not owned by JPMP and certain members of CDM have been recorded at fair value. The excess of the purchase price over
Predecessor basis of net assets of the PFHC common stock owned by JPMP and certain members of CDM prior to the Pinnacle Transaction was $17,338 and is recorded as carry-over basis in shareholders equity.

The total cost of the Pinnacle Transaction, after adjusting for the final working capital adjustment, consists of:



|                            |  |   |        
|--------------------------- |  | - | -------
|Stated purchase price       |  | $ | 485,000
|Working capital adjustments |  |   | 8,414  
|Acquisition costs           |  |   | 7,154  
|                            |  |   |        
|Total cost of acquisition   |  | $ | 500,568
|                            |  |   |        

Of the total consideration paid to the Predecessors shareholders outlined above, $10 million was deposited
into an escrow account pending finalization of the working capital adjustment. In April 2004, a partial distribution of approximately $7 million was disbursed from the working capital escrow account. During the first quarter of 2005, the working
capital adjustment was settled at $8.4 million and the final distribution from the escrow was made. This resulted in a reduction of purchase price and goodwill of approximately $1.6 million.

Of the total consideration paid to the Predecessors shareholders outlined above, $17 million was deposited into a second escrow account pending finalization of
indemnification adjustments, which related to the Predecessors indemnifications of CHC as stipulated in the merger agreement and included, but were not limited to, breaches of representations or warranties, certain tax matters, and certain
environmental items. During the first quarter of 2005, as there were no claims pending, the full indemnification escrow was distributed to the sellers.

The following table summarizes the allocation of the total cost of the Pinnacle acquisition to the assets acquired and liabilities assumed:



|                                             |  |   |         |  
|-------------------------------------------- |  | - | ------- | -
|Assets recorded:                             |  |   |         |  
|Plant assets                                 |  | $ | 147,490 |  
|Inventories                                  |  |   | 134,730 |  
|Accounts receivable                          |  |   | 42,739  |  
|Cash                                         |  |   | 4,772   |  
|Other current assets                         |  |   | 4,205   |  
|Goodwill                                     |  |   | 142,567 |  
|Tradenames                                   |  |   | 106,156 |  
|Other assets                                 |  |   | 177     |  
|                                             |  |   |         |  
|Fair value of assets acquired                |  |   | 582,836 |  
|Liabilities assumed                          |  |   | 76,946  |  
|Deferred income taxes                        |  |   | 22,660  |  
|Carryover of Predecessor basis of net assets |  |   | (17,338 | )
|                                             |  |   |         |  
|Purchase price                               |  | $ | 500,568 |  
|                                             |  |   |         |  



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



The total intangible assets amounted to $248,723, of which $106,156 was assigned to tradenames that are not subject
to amortization. Goodwill, which is not subject to amortization, amounted to $142,567, of which $140,800 was allocated to the dry foods segment and $1,767 was allocated to the frozen foods segment. No new tax-deductible goodwill was created as a
result of the Pinnacle Transaction, but historical tax-deductible goodwill in the amount of $1,661 does exist.

In accordance with the requirements of
purchase method accounting for acquisitions, inventories as of November 24, 2003 were valued at fair value (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 $26,304 higher than the Predecessors historical manufacturing cost. The Successors cost of products sold for the 36 weeks ended
July 31, 2004 includes a pre-tax charge of $26,304, as all of such finished product was sold during the period November 25, 2003 to July 31, 2004.

The Pinnacle Transaction was financed through borrowings of a $120 million Term Loan and a $21.5 million Revolver drawing under the Successors Senior Secured Credit Facilities, $200 million of Senior Subordinated Notes issued November
2003 and $181 million equity contribution from the Sponsors.

As a result of the Pinnacle Transaction, our initial capitalization at the Merger date
consisted of:



|                                               |  |   |        
|---------------------------------------------- |  | - | -------
|Borrowings under new revolving credit facility |  | $ | 21,500 
|Borrowings of new term loan                    |  |   | 120,000
|Issuance of new senior subordinated notes      |  |   | 200,000
|Additional paid-in capital                     |  |   | 180,637
|                                               |  |   |        
|Total capitalization                           |  | $ | 522,137
|                                               |  |   |        

Other Pinnacle Transaction Related Matters

Immediately prior to closing, pursuant to their original terms, all of the Predecessors outstanding stock options vested and the Predecessor exercised its purchase option to purchase at fair value all of the
shares of common stock to be acquired by exercise of options held by employees pursuant to the Stock Option Plan. As a result, compensation expense of approximately $4.9 million was recorded in the Consolidated Statement of Operations immediately
before the Pinnacle Transaction for the difference between the aggregate fair value of the shares of common stock and the aggregate exercise price of the stock options

From and after the consummation of the Pinnacle Transaction, each outstanding warrant will thereafter entitle the holder thereof to receive, in consideration for the cancellation of such warrant, an amount in cash
equal to the excess, if any, of the final per share Pinnacle Transaction consideration over the exercise price of such warrant and no more. Because the warrants strike price is $3.00 per share and as the Pinnacle Transaction consideration was
approximately $2.14 per share, no payment to warrant holders is expected; thus, no value was assigned to the warrants.

The closing of the transaction
represented a change in control under the Predecessors employment agreements with certain executives. As a result, the Predecessor was required to pay $1.7 million pursuant to these agreements and recorded a charge for such amount in the
Consolidated Statement of Operations immediately before the Pinnacle Transaction. In addition, retention benefits to certain key employees of approximately $2.2 million were accrued as a compensation charge over the three-month retention period from
the date of closing to the payment date in February 2004.

In connection with the formation of LLC, 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 fair value of the interests at the date of grant was $11 million and has been included in the Successors Consolidated Balance Sheet as an increase in Successors paid-in-capital and in the Consolidated Statement of
Operations for the 36 weeks ended July 31, 2004 as an expense reflecting the charge for the fair value immediately after consummation of the Pinnacle Transaction. Additional units were issued in connection with the Aurora Merger and are
discussed in Note 3 to the Consolidated Financial Statements.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



The Advisory and Oversight Agreement between the Predecessor and an affiliate of the majority selling shareowners,
and the stockholders agreement between PFHC and Predecessors current shareholders, was terminated at closing. Also, at closing, all members of the board of directors of PFHC resigned. Subsequent to the Pinnacle Transaction, directors of Crunch
Acquisition Corp. became directors of the surviving corporation, Pinnacle Foods Holding Corporation.



|2. | Summary of Significant Accounting Policies
|-- | ------------------------------------------

Consolidation. The consolidated financial statements include the accounts of PFGI and its wholly-owned subsidiaries. The results of companies acquired during the year are included in the consolidated financial statements from
the effective date. Intercompany transactions have been eliminated in consolidation.

Foreign Currency Translation.
Foreign-currency-denominated assets and liabilities are translated into U.S. dollars at exchange rates existing at the respective balance sheet dates. Translation adjustments resulting from fluctuations in exchange rates are recorded as a separate
component of accumulated other comprehensive income (loss) within shareholders equity. The Company translates the results of operations of its foreign subsidiaries at the average exchange rates during the respective periods. Gains and losses
resulting from foreign currency transactions, the amounts of which are not material, are included in net earnings (loss).

Fiscal Year. As
discussed in Note 1, in December 2004, the Company changed its fiscal year end from July 31 to the last Sunday in December. Fiscal 2006 consisted of 53 weeks.

Cash and Cash Equivalents. The Company considers investments in all highly liquid debt instruments with an initial maturity of three months or less to be cash equivalents.

Inventories. Substantially all inventories are valued at the lower of average cost or market. Cost is determined by the first-in first-out method. The
nature of costs included in inventory is: ingredients, containers, packaging, other raw materials, direct manufacturing labor and fully absorbed manufacturing overheads. When necessary, the Company provides allowances to adjust the carrying value of
its inventories to the lower of cost or net realizable value, including any costs to sell or dispose including consideration for obsolescence, excessive inventory levels, product deterioration and other factors in evaluating net realizable value.

Plant Assets.Plant assets are stated at historical cost, and depreciation is computed using the straight-line method over the lives of the
assets. Buildings and machinery and equipment are depreciated over periods not exceeding 45 years and 15 years, respectively. The weighted average estimated remaining useful lives are approximately 17 years for buildings and 9 years for machinery
and equipment. When assets are retired, sold, or otherwise disposed of, their gross carrying value and related accumulated depreciation are removed from the accounts and included in determining gain or loss on such disposals. Costs of assets
acquired in a business combination are based on the estimated fair value at the date of acquisition.

Goodwill and Indefinite-lived Intangible
Assets.The Company evaluates, on at least an annual basis in December, the carrying amount of goodwill and indefinite-lived tradenames to determine whether current events and circumstances indicate that such carrying amount may no longer be
recoverable. The Company performs goodwill impairment testing for each business which constitutes a component of the Companys two operating segments, frozen foods and dry foods, known as reporting units. The Company compares the fair value of
these reporting units with their carrying values inclusive of goodwill. If the carrying amount of the reporting unit exceeds its fair value, the Company compares the implied fair value of the reporting units goodwill to its carrying amount and
any shortfall is charged to earnings. In estimating the implied fair value of the goodwill, the Company estimates the fair value of the reporting units tangible and intangible assets (other than goodwill). For indefinite-lived tradename
intangible assets the Company determines recoverability by comparing the carrying value to its fair value estimated based on discounted cash flows attributable to the tradename and charges the shortfall, if any, to earnings. In estimating the fair
value, the Company primarily uses the income approach, which utilizes forecasted discounted cash flows to estimate fair values. Assumptions underlying fair value estimates are subject to risks and uncertainties.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



Valuation of Long-Lived Assets. The Company adopted SFAS No. 144 Accounting for the
Impairment or Disposal of Long-Lived Assets on August 1, 2002. The carrying value of long-lived assets held and used, other than goodwill, is evaluated at the asset group when events or changes in circumstances indicate the carrying value
may not be recoverable. The carrying value of a long-lived asset group is considered impaired when the total projected undiscounted cash flows from such asset group are separately identifiable and are less than the carrying value. In that event, a
loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset group. Fair market value is determined primarily using the projected cash flows from the asset group discounted at a rate
commensurate with the risk involved. Losses on long-lived asset groups held for sale, other than goodwill, are determined in a similar manner, except that fair market values are reduced for disposal costs.

Revenue Recognition. Revenue from product sales is recognized upon shipment to the customers as terms are FOB shipping point, at which point title and risk
of loss is transferred and the selling price is fixed or determinable. This completes the revenue-earning process, specifically that an arrangement exists, delivery has occurred, the price is fixed and collectibility is reasonably assured. A
provision for payment discounts and product return allowances is recorded as a reduction of sales in the same period that the revenue is recognized.

Trade
promotions, consisting primarily of customer pricing allowances and merchandising funds, and consumer coupons are offered through various programs to customers and consumers. Sales are recorded net of estimated trade promotion spending, which is
recognized as incurred at the time of sale. Certain retailers require the payment of slotting fees in order to obtain space for the Companys products on the retailers store shelves. The fees are recognized as reductions of revenue at the
earlier of the date cash is paid or a liability to the retailer is created. These amounts are included in the determination of net sales. Accruals for expected payouts under these programs are included as accrued trade marketing expense line in the
Consolidated Balance Sheet. Coupon redemption costs are also recognized as reductions of net sales when the coupons are issued.

Marketing
Expenses. Trade marketing expense is comprised of amounts paid to retailers for programs designed to promote our products. These costs include standard introductory allowances for new products. They also include the cost of in-store product
displays, feature pricing in retailers advertisements and other temporary price reductions. These programs are offered to our customers both in fixed and variable (rate per case) amounts. The ultimate cost of these programs depends on retailer
performance and is the subject of significant management estimates. The Company records as expense the estimated ultimate cost of the program in the period during which the program occurs. In accordance with EITF No. 01-9 Accounting for
Consideration Given by a Vendor to a Customer, these trade marketing expenses are classified in the Consolidated Statement of Operations as a reduction of net sales. Also, in accordance with EITF No. 01-9, coupon redemption costs are also
recognized as reductions of net sales when issued. Marketing expenses recorded as a reduction of net sales of the Successor were $514,683 in fiscal 2006, $500,131 in fiscal 2005, $219,534 in the transition year and $219,452 in the 36 weeks ended
July 31, 2004. Marketing expenses of the Predecessor were $48,038 in the 16 weeks ended November 24, 2003.

Advertising.
Advertising costs include the cost of working media (advertising on television, radio or in print), the cost of producing advertising, and the cost of coupon insertion and distribution. Working media and coupon insertion and distribution costs are
expensed in the period the advertising is run or the coupons are distributed. The cost of producing advertising is expensed as of the first date the advertisement takes place. Advertising included in the Successors marketing and selling
expenses were $31,990 in fiscal 2006, $41,989 in fiscal 2005, $28,428 in the transition year and $20,620 in the 36 weeks ended July 31, 2004, respectively. Advertising included in the Predecessors marketing and selling expenses were
$14,590 in the 16 weeks ended November 24, 2003.

Shipping and Handling Costs. In accordance with the EITF No. 00-10 Accounting
for Shipping and Handling Revenues and Costs, costs related to shipping and handling of products shipped to customers are classified as cost of products sold.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



Stock Based Compensation. On December 26, 2005, the start of fiscal 2006, we adopted Statement of
Financial Accounting Standards (SFAS) No. 123R, Share-Based Payment, which replaces SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes Accounting Principles Board Opinion No.
(APB) No. 25, Accounting for Stock Issued to Employees. We adopted SFAS No. 123R using the modified prospective method. Under this method of adoption, prior periods are not restated. For awards granted prior to the
adoption of SFAS No. 123R, compensation cost is recognized for the unvested portion of outstanding awards based on the grant-date fair value calculated under SFAS No. 123 for pro forma disclosures.

Grant-date fair value of stock options is estimated using a lattice-binomial option-pricing model. Compensation expense is reduced based on estimated forfeitures with
adjustments to actual recorded at the time of vesting. Forfeitures are estimated based on historical experience. We recognize compensation cost for awards over the vesting period. The majority of our stock options have a seven-year vesting.

See Note 5 for more information regarding stock-based compensation, including pro forma information required under SFAS No. 123 for periods prior to
Fiscal 2006.

Insurance reserves.The Company is self-insured under its workers compensation insurance policy. An independent,
third-party actuary estimates the outstanding retained-insurance liabilities by projecting incurred losses to their ultimate liability and subtracting amounts paid-to-date to obtain the remaining liabilities. The Company bases actuarial estimates of
ultimate liability on actual incurred losses, estimates of incurred but not yet reported losses and the projected costs to resolve these losses.

Income Taxes. Income taxes are accounted for in accordance with SFAS No. 109, Accounting for Income Taxes, under which deferred tax assets and liabilities are determined based on the difference between the
financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company reviews its deferred tax assets for recovery. A valuation allowance
is established when the Company believes that it is more likely than not that some portion of its deferred tax assets will not be realized. Changes in valuation allowances from period to period are included in the Companys tax provision
in the period of change.

Financial Instruments.The Company uses financial instruments, primarily swap contracts, to manage its exposure to
movements in interest rates, certain commodity prices and foreign currencies. The use of these financial instruments modifies the exposure of these risks with the intent to reduce the risk or cost to the Company. The Company does not use derivatives
for trading purposes and is not a party to leveraged derivatives. SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, requires that all derivatives be recognized as either assets or liabilities at fair value.
Changes in the fair value of derivatives not designated as hedging instruments are recognized monthly in earnings. The cash flows associated with the financial instruments are included in the cash flow from operating activities.

Deferred financing costs.Deferred financing costs are amortized over the life of the related debt using the effective interest rate method. If debt
is prepaid or retired early, the related unamortized deferred financing costs are written off in the period the debt is retired.

Capitalized Internal Use Software Costs.The Company capitalizes the cost of internal-use software that has a useful life in excess of one year in accordance with SOP 98-1, Accounting for the Costs
of Computer Software Developed or Obtained for Internal Use. These costs consist of payments made to third parties and the salaries of employees working on such software development. Subsequent additions, modifications or upgrades to
internal-use software are capitalized only to the extent that they allow the software to perform a task it previously did not perform. Capitalized internal use software costs are amortized using the straight-line method over their estimated useful
lives, generally 21/2to 3 years. The Company amortized $1,700 in fiscal 2006, $1,629 in fiscal 2005, $279 in
the transition year, $533 in the 36 weeks ended July 31, 2004 and $408 in the 16 weeks ended November 25, 2003. Additionally, as of December 31, 2006 and December 25, 2005, the net book value of capitalized internal use software
totaled $5,214 and $2,485, respectively.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



Comprehensive Income. Comprehensive income includes net earnings (loss), foreign currency translation
adjustments and adjustments to the minimum pension liability that is currently presented as a component of shareholders equity. The components of accumulated other comprehensive income (loss) income at year end was as follows:



|                                        |  |                  |     |   |                  |   |        |  
|--------------------------------------- |  | ---------------- | --- | - | ---------------- | - | ------ | -
|                                        |  | December 31,2006 |     |   | December 25,2005 |  
|Foreign currency translation adjustment |  |                  | 198 |   |                  | $ | 251    |  
|Minimum pension liability               |  |                  | (37 | ) |                  |   | (4,019 | )
|                                        |  |                  |     |   |                  |   |        |  
|Total                                   |  | $                | 161 |   |                  | $ | (3,768 | )
|                                        |  |                  |     |   |                  |   |        |  

Use of Estimates. The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Recently Issued Accounting Pronouncements

In July 2006, the FASB
issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes: An Interpretation of Statement of Financial Accounting Standards (SFAS) Statement No. 109. This interpretation clarifies SFAS
No. 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 and will be required to be adopted by us in the first quarter of 2007. We are assessing what impact, if any, adoption of this statement will have on our financial
position, results of operations and cash flows.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements.
This Standard defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. SFAS No. 157 is effective for financial statements issued for
fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The Company is assessing what impact, if any, adoption of this statement would have on its financial position, results of operations and cash flows.

The FASB also issued in September 2006 Statement of Financial Accounting Standards No. 158, Employers Accounting for Defined
Benefit Pension and Other Postretirement Plans  an amendment of FASB Statemenst No. 87, 88, 106 and 132(R),(SFAS No. 158).This Standard requires recognition of the funded status of a benefit plan in the
statement of financial position. The Standard also requires recognition in accumulated other comprehensive income certain gains and losses that arise during the period but are deferred under pension accounting rules, as well as modifies the timing
of reporting and adds certain disclosures. SFAS No. 158 provides recognition and disclosure elements to be effective for fiscal years ending after December 15, 2007 and measurement elements to be effective for fiscal years ending after
December 15, 2008. Had the Company adopted this provision in fiscal 2006, total liabilities are estimated to have increased by $2.0 million and total stockholders equity would have decreased by $2.0 million.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Liabilities (SFAS No. 159). SFAS
No. 159 provides companies with an option to report selected financial assets and liabilities at fair value, and establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different
measurement attributes for similar types of assets and liabilities. The new guidance is effective for fiscal years beginning after November 15, 2007. The Company is assessing what impact, if any, adoption of this statement would have on its
financial position, results of operations and cash flows.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



In September 2006, the SEC staff issued Staff Accounting Bulletin No. 108 (SAB No. 108),
Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements. SAB No. 108 was issued in order to eliminate the diversity of practice surrounding how public companies
quantify financial statement misstatements. Traditionally, there have been two widely-recognized methods for quantifying the effects of financial statement misstatements: the roll-over method and the iron curtain method. The
roll-over method focuses primarily on the impact of a misstatement on the statement of earningsincluding the reversing effect of prior year misstatementsbut its use can lead to the accumulation of misstatements in the balance sheet. The
iron-curtain method, on the other hand, focuses primarily on the effect of correcting the period-end balance sheet with less emphasis on the reversing effects of prior year errors on the statement of earnings. We currently use the iron curtain
method for quantifying identified financial statement misstatements. In SAB No. 108, the SEC staff established an approach that requires quantification of financial statement misstatements based on the effects of the misstatements on each of
the companys financial statements and the related financial statement disclosures. This model is commonly referred to as a dual approach because it requires quantification of errors under both the iron curtain and the roll-over
methods. SAB No. 108 permits existing public companies to initially apply its provisions either by (i) restating prior financial statements as if the dual approach had always been used or (ii) recording the cumulative
effect of initially applying the dual approach as adjustments to the carrying values of assets and liabilities as of the start of fiscal 2006 with an offsetting adjustment recorded to the opening balance of retained earnings. Use of the
cumulative effect transition method requires detailed disclosure of the nature and amount of each individual error being corrected through the cumulative adjustment and how and when it arose. We have initially applied the provisions of
SAB No. 108 in connection with the preparation of our annual financial statements for the year ending December 31, 2006. The adoption of SAB No. 108 did not have an impact on the Companys financial position, results of
operations or cash flows.



|3. | Acquisitions
|-- | ------------

Aurora Merger

On November 25, 2003, Aurora entered into a definitive agreement with LLC. The definitive agreement provided for a comprehensive restructuring transaction in which
PFHC was merged with and into Aurora, with Aurora surviving the merger, following the filing and confirmation of a pre-negotiated bankruptcy reorganization case with respect to Aurora under Chapter 11 of the U.S. Bankruptcy Code. On December 8,
2003, Aurora and its subsidiary, Sea Coast Foods, Inc., filed their petitions for reorganization with the Bankruptcy Court. On February 20, 2004, the First Amended Joint Reorganization Plan of Aurora Foods Inc. and Sea Coast Foods, Inc., as
modified, dated February 17, 2004, was confirmed by order of the Bankruptcy Court. We collectively refer to the restructuring, the financing thereof and the other related transactions as the Aurora Merger. This restructuring
transaction was completed on March 19, 2004 and the surviving company was renamed Pinnacle Foods Group Inc.

Pursuant to the terms of the definitive
agreement, (i) the senior secured lenders under Auroras existing credit facility were paid in full in cash in respect of principal and interest, and received $15 million in cash in respect of certain leverage and asset sales fees owed
under that facility, (ii) the holders of Auroras 12% senior unsecured notes due 2005 were paid in full in cash in respect of principal and interest but did not receive $1.9 million of original issue discount, (iii) the holders of
Auroras outstanding 8.75% and 9.875% senior subordinated notes due 2008 and 2007, respectively, received approximately 50% of the face value of the senior subordinated notes plus accrued interest in cash or, at the election of each bondholder,
52% of the face value of the senior subordinated notes plus accrued interest in equity interests in LLC (held indirectly through a bondholders trust), (iv) the existing common and preferred stockholders did not receive any distributions and
their shares have been cancelled, (v) Auroras existing accounts receivable securitization facility was terminated in December 2003, (vi) all of Auroras trade creditors were paid in full and (vii) all other claims against
Aurora were unimpaired, except for the rejection of Auroras St. Louis headquarters leases. The definitive agreement also provides that the total acquisition consideration is subject to a post-closing adjustment based on Auroras adjusted
net debt as of the closing date. Based upon the final adjusted net debt calculation, there was no adjustment to the consideration and the consideration detailed below is final.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



In connection with the Aurora Merger, 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 fair
value of the interests at the date of grant is $7.4 million and has been included in the Successors Consolidated Balance Sheet as an increase in Successors additional paid-in-capital and in the Consolidated Statement of Operations for
the 36 weeks ended July 31, 2004 as an expense reflecting the charge for the fair value immediately after consummation of the Aurora Merger. Additional units were issued in connection with the Pinnacle Transaction and are discussed in Note 1
under the section entitled Other Pinnacle Transaction Related Matters.

After the consummation of the Aurora Merger, JPMP and JWC collectively
own approximately 48% of LLC, the holders of Auroras senior subordinated notes own approximately 43% of LLC and CDM owns approximately 9% of LLC, in each case subject to dilution by up to 16% in management equity incentives.

Prior to its bankruptcy filing, Aurora entered into an agreement with its prepetition lending group compromising the amount of certain fees (i.e., excess leverage 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 and by objecting to confirmation. The Bankruptcy Court rejected the lenders argument and confirmed Auroras plan of reorganization. R2 Top Hat, Ltd. then appealed from those orders of the Bankruptcy Court. The appeals are
pending. It is too early to predict the outcome of the appeals. The Company assumed a liability of $20.1 million through the Aurora Merger with respect to its total exposure relating to these fees, which is included in Accrued Liabilities on the
Consolidated Balance Sheet.

The Aurora Merger was financed through borrowings of a $425.0 million Term Loan drawn under the Companys Senior Secured
Credit Facilities, $201.0 million gross proceeds from the February 2004 issuance of the 8.25% Senior Subordinated Notes due 2013, existing cash on the Aurora balance sheet and cash equity contributions of $84.4 million and $10.9 million by the
Sponsors and from the Aurora bondholders, respectively.

The total cost of the Aurora Merger consists of:



|                                                                                     |  |   |         |  
|------------------------------------------------------------------------------------ |  | - | ------- | -
|Total paid to Auroras creditors                                                     |  | $ | 709,327 |  
|Less: Amount paid with Aurora cash                                                   |  |   | (20,764 | )
|                                                                                     |  |   |         |  
|Subtotal                                                                             |  |   | 688,563 |  
|Fair value of equity interests in LLC exchanged for Aurora senior subordinated notes |  |   | 225,120 |  
|Transaction costs                                                                    |  |   | 21,608  |  
|                                                                                     |  |   |         |  
|Total cost of acquisition                                                            |  | $ | 935,291 |  
|                                                                                     |  |   |         |  

The following table summarizes the allocation of the total cost of acquisition to the assets acquired and
liabilities assumed:



|                              |  |   |          
|----------------------------- |  | - | ---------
|Assets recorded:              |  |   |          
|Plant assets                  |  | $ | 107,528  
|Inventories                   |  |   | 68,116   
|Accounts receivable           |  |   | 52,730   
|Cash                          |  |   | 24,804   
|Other current assets          |  |   | 4,428    
|Goodwill                      |  |   | 278,240  
|Recipes and formulas          |  |   | 20,600   
|Tradenames                    |  |   | 675,700  
|Other assets                  |  |   | 690      
|                              |  |   |          
|Fair value of assets acquired |  |   | 1,232,836
|Liabilities assumed           |  |   | 114,053  
|Deferred income taxes         |  |   | 183,492  
|                              |  |   |          
|Purchase price                |  | $ | 935,291  
|                              |  |   |          



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



The total intangible assets amounted to $974,540, of which $20,600 was assigned to recipes and formulas, which are
amortized over an estimated useful life of five years, and $675,700 was assigned to tradenames that are not subject to amortization. Goodwill, which is not subject to amortization, amounted to $278,240, of which $150,872 was allocated to the dry
foods segment and $127,368 was allocated to the frozen foods segment. No new tax-deductible goodwill was created as a result of the Aurora Merger, but historical tax-deductible goodwill in the amount of $386,386 does exist.

In accordance with the requirements of purchase method accounting for acquisitions, inventories as of March 19, 2004 were valued at fair value (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 $13,185 higher than
Auroras historical manufacturing cost. Cost of products sold in the 36 weeks ended July 31, 2004 includes a pre-tax charge of $13,185 representing the write-up of the inventory to fair value at March 19, 2004 of inventories, all of
which were sold during the period March 19, 2004 to July 31, 2004.

Pro forma Information

The following schedule includes unaudited pro forma statement of operations data for fiscal year ended December 26, 2004 as if the Aurora Merger had occurred as of
December 29, 2003. The pro forma information includes the actual results with pro forma adjustments for the change in interest expense related to the changes in capital structure resulting from the financings discussed above, purchase
accounting adjustments resulting in changes to depreciation and amortization expenses, and the reduction in rent expense resulting from an office closure.

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 Aurora Merger occurred 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.



|                                   |  |                                  |          
|---------------------------------- |  | -------------------------------- | ---------
|                                   |  | Fiscal yearendedDecember 26,2004
|Net sales                          |  | $                                | 1,193,347
|Earnings before interest and taxes |  |                                  | 172,574  
|Net earnings                       |  |                                  | 93,663   

Pro forma depreciation and amortization expense included above was $43,499 for the fiscal year ended
December 26, 2004.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



Included in earnings (loss) before interest and taxes in the pro forma information above are the following material
charges (credits):



|                                                                                                  |  |                                   |        |  
|------------------------------------------------------------------------------------------------- |  | --------------------------------- | ------ | -
|Pinnacle Historical Financial Statements                                                          |  | Fiscal Year endedDecember 26,2004 |       
|Flow through of fair value of Pinnacle inventories over manufactured cost as of November 25, 2003 |  | $                                 | 18,126 |  
|Flow through of fair value of Aurora inventories over manufactured cost as of March 19, 2004      |  |                                   | 13,185 |  
|Write off of obsolete inventories                                                                 |  |                                   | 10,743 |  
|Aurora acquisitions costs                                                                         |  |                                   | 23,322 |  
|Pinnacle acquisition costs                                                                        |  |                                   | 1,540  |  
|Omaha restructuring and impairment charge                                                         |  |                                   | 15,633 |  
|Equity related compensation                                                                       |  |                                   | 7,400  |  
|Impairment of goodwill                                                                            |  |                                   | 6,143  |  
|Impairment of fixed assets and intangible assets                                                  |  |                                   | 4,278  |  
|OPEB curtailment gain related to Omaha plant closing                                              |  |                                   | (651   | )
|                                                                                                  |  |                                   |        |  
|Impact on earnings before interest and taxes                                                      |  | $                                 | 99,719 |  
|                                                                                                  |  |                                   |        |  



|                                                        |  |                                   |          |  
|------------------------------------------------------- |  | --------------------------------- | -------- | -
|Aurora Historical Financial Statements                  |  | Fiscal Year endedDecember 26,2004 |         
|Write off of obsolete inventory                         |  | $                                 | 725      |  
|Administrative restructuring and retention costs        |  |                                   | 548      |  
|Financial restructuring and divestiture costs           |  |                                   | 5,023    |  
|Reorganization (primarily consists of debt forgiveness) |  |                                   | (187,971 | )
|Miscellaneous non-cash charges                          |  |                                   | 207      |  
|                                                        |  |                                   |          |  
|Impact on earnings before interest and taxes            |  | $                                 | (181,468 | )
|                                                        |  |                                   |          |  

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 an initial purchase price of $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. According to the purchase agreement, the purchase price was to 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. Based upon the final value of the inventory, the
Company paid to The Dial Corporation $2,271 in December 2006, which was recorded as additional purchase consideration.

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.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



The acquisition of the Armour Business was accounted for under the purchase method of accounting. Accordingly, the
results of 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 cost of the Armour
Business consists of:



|                          |  |   |        
|------------------------- |  | - | -------
|Purchase price            |  | $ | 185,271
|Acquisition costs         |  |   | 3,937  
|                          |  |   |        
|Total cost of acquisition |  | $ | 189,208
|                          |  |   |        

The purchase price allocation discussed below is final. Portions of the purchase price, including intangible
assets, have been identified and valued by independent appraisers utilizing proven valuation procedures and techniques. 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 final allocation
of the total cost of the Armour acquisition to the assets acquired and liabilities assumed:



|                                     |  |   |        
|------------------------------------ |  | - | -------
|Assets acquired:                     |  |   |        
|Plant assets                         |  | $ | 47,376 
|Inventories                          |  |   | 41,531 
|Other current asset                  |  |   | 2,000  
|Tradenames                           |  |   | 39,000 
|Recipes and formulas                 |  |   | 5,000  
|Private label customer relationships |  |   | 20,000 
|Goodwill                             |  |   | 43,767 
|                                     |  |   |        
|Fair value of assets acquired        |  |   | 198,674
|Liabilities assumed                  |  |   |        
|Other accrued liabilities            |  |   | 2,210  
|Postretirement benefit liability     |  |   | 7,256  
|                                     |  |   |        
|Total cost of acquisition            |  | $ | 189,208
|                                     |  |   |        

The value assigned to total intangible assets amounted to $107,767. 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, $39,000 is assigned to tradenames that are not subject
to amortization. Goodwill, which is not subject to amortization, amounted to $43,767. All of the intangible assets acquired in the transaction are recorded within the dry foods segment and will result in approximately $103 million of tax deductible
goodwill and intangible assets.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



In accordance with the requirements of purchase method accounting for acquisitions, inventories as of March 1,
2006 were valued at fair value (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 $4,580 higher than Dials historical manufacturing cost and in the case of work-in-progress was $180 higher than Dials historical manufacturing cost. The Companys cost of products sold for fiscal 2006
includes a pre-tax charge of $4,760 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 fiscal 2006 and fiscal 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.



|                                   |  |                  |           |                  |   |           |  
|---------------------------------- |  | ---------------- | --------- | ---------------- | - | --------- | -
|                                   |  | Year ended       |          
|                                   |  | December 31,2006 |           | December 25,2005 |  
|Net sales                          |  | $                | 1,472,050 |                  | $ | 1,480,654 |  
|Earnings before interest and taxes |  | $                | 148,000   |                  | $ | 52,805    |  
|Net earnings (loss)                |  | $                | 34,380    |                  | $ | (29,681   | )

Pro forma depreciation and amortization expense included above was $43,718 and $47,929 for fiscal 2006 and fiscal
2005, respectively.

Included in earnings (loss) before interest and taxes in the pro forma information above for fiscal 2006 are the following material
charges:



|                                                                                                         |  |            |      
|-------------------------------------------------------------------------------------------------------- |  | ---------- | -----
|                                                                                                         |  | Fiscal2006
|Flow through of fair value of the Armour Business inventories over manufactured cost as of March 1, 2006 |  | $          | 4,760
|Stock based compensation expense                                                                         |  |            | 1,415
|                                                                                                         |  |            |      
|Impact on earnings (loss) before interest and taxes                                                      |  | $          | 6,175
|                                                                                                         |  |            |      

There were no material non-recurring charges included in the pro forma information for the nine months ended
September 25, 2005.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



|4. | Restructuring and Impairment Charges
|-- | ------------------------------------

Successor

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 were completed in 2006 and resulted 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 Statement of Financial Accounting Standards (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:



|                   |  |                       |       |                           |   |                         |  |            |       |                           |   |       |  |   |  
|------------------ |  | --------------------- | ----- | ------------------------- | - | ----------------------- |  | ---------- | ----- | ------------------------- | - | ----- |  | - | -
|                   |  |                       |       |                           |   | Incurred                |  |           
|Description        |  | EstimatedTotalCharges |       | Change inEstimatedCharges |   | ThroughDecember 25,2005 |  | Fiscal2006 |       | EstimatedRemainingCharges
|Employee severance |  | $                     | 590   |                           | $ | 363                     |  | $          | 909   |                           | $ | 44    |  | $ | 
|Other costs        |  |                       | 3,650 |                           |   | 2,398                   |  |            | 4,978 |                           |   | 1,070 |  |   | 
|Asset impairment   |  |                       |      |                           |   | 280                     |  |            |      |                           |   | 280   |  |   | 
|                   |  |                       |       |                           |   |                         |  |            |       |                           |   |       |  |   |  
|Total              |  | $                     | 4,240 |                           | $ | 3,041                   |  | $          | 5,887 |                           | $ | 1,394 |  | $ | 
|                   |  |                       |       |                           |   |                         |  |            |       |                           |   |       |  |   |  

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 will be recorded. During the third quarter of 2006 and based upon current offers, the Company lowered the carrying value of the plant and equipment and recorded an impairment charge totaling $280. In the fourth quarter of 2006, the plant and
any remaining equipment was sold for its carrying value and no additional gain or loss was 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 December 31, 2006. Other closing costs of approximately $6,048 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 December 31, 2006, all of these costs have been spent.

Also, the Company had made capital expenditures in connection with this plant consolidation project, which have totaled approximately $9.5 million.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



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 fiscal 2005. This charge is reported under the frozen foods business segment. The Company expects that any costs associated with the removal of the assets would be offset from the
proceeds received from the sale of those assets.

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:



|                         |  |                          |        |                           |   |       |           |  |   |                         |   |            |   |                                       |  |   |       |  |   |   
|------------------------ |  | ------------------------ | ------ | ------------------------- | - | ----- | --------- |  | - | ----------------------- | - | ---------- | - | ------------------------------------- |  | - | ----- |  | - | --
|                         |  |                          |        |                           |   |       |           |  |   | Incurred                |   |           
|Description              |  | OriginalEstimatedCharges |        | Change inEstimatedCharges |   |       | Transfers |  |   | ThroughDecember 25,2005 |   | Fiscal2006 |   | Estimated RemainingChargesPer Quarter
|Asset impairment charges |  | $                        | 7,400  |                           | $ | 5,149 |           |  |   |                         |   |            | $ | 10,049                                |  | $ | 2,500 |  | $ |  
|Employee severance       |  |                          | 2,506  |                           |   |      |           |  |   | 59                      |   |            |   | 2,565                                 |  |   |      |  |   |  
|Other costs              |  |                          | 4,984  |                           |   | (390  | )         |  |   | (59                     | ) |            |   | 4,283                                 |  |   | 192   |  |   | 60
|                         |  |                          |        |                           |   |       |           |  |   |                         |   |            |   |                                       |  |   |       |  |   |   
|Total                    |  | $                        | 14,890 |                           | $ | 4,759 |           |  | $ |                        |   |            | $ | 16,897                                |  | $ | 2,692 |  | $ | 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. During the third quarter of 2006 and
based upon current offers, the Company lowered the carrying value of the plant and equipment and recorded an additional impairment charge totaling $2,500.

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 $4,535 relate to other shutdown costs. As of
December 31, 2006, $4,251 has been disbursed and $224 has been incurred and accrued.

The Company will continue to incur certain costs until the plant
is sold, which we expect to occur during fiscal 2007. 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.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



Other Asset Impairments

In October 2004, the Company decided that it would discontinue producing product under the Chefs Choice trade name, which is reported under the frozen foods segment of the Company. In accordance with the provisions of SFAS
No. 142, the Company prepared a discounted cash flow analysis as of July 31, 2004 which indicated that the book value of related to the Chefs Choice business unit exceeded its estimated fair value and that a goodwill impairment had
occurred. Accordingly, the Company recorded a non-cash impairment charge during fiscal 2004 related to goodwill of $1,835.

As a result of the impairment
charge related to the Chef Choice brand, the Company assessed whether there had been an impairment of the Companys long-lived assets in accordance with SFAS No. 144. The Company concluded that the book value of the assets related to the
Chefs Choice products were higher than their expected undiscounted future cash flows and that an impairment had occurred. Accordingly, the Company recorded a non-cash charge in fiscal 2004 related to the write down to fair value of the fixed
assets of $1,300 and a non-cash impairment charge of $1,666 related to amortizable intangibles (recipes).

In connection with the Companys annual
goodwill and indefinite lived impairment test conducted as of July 31, 2004 and in accordance with SFAS No. 142, it was determined that due to lower than expected future sales, the carrying value of the trade name for the Avalon Bay
product was impaired. The Company recorded a non-cash impairment charge of $1,300 in fiscal 2004 related to the write down of the trade name value. Products sold under the Avalon Bay trade name are reported in the frozen foods segment.

The annual evaluation performed as of December 26, 2004 resulted in a $4,308 non-cash impairment charge related to the goodwill in the Companys bagels
reporting unit ($2,675) and dinners reporting unit ($1,633). This impairment charge adjusted the carrying value of the reporting units goodwill to its implied fair value. During the transition year, the Company experienced higher costs in its bagels
and dinners business units and expects these higher costs to continue into the future. In addition, as a result of the impairment charges, the Company assessed whether there had been an impairment of the Companys tradenames in accordance with
SFAS No. 142. The Company concluded that the book value of the Lenders trade name asset was higher than its fair value and that an impairment had occurred. Accordingly, the Company recorded a non-cash charge in the transition year related
to the write down to fair value of the trade name of $12, which is recorded in Other expense (income), net, on the Consolidated Statement of Operations.

In 2005, the Company experienced difficulties in transferring the frozen seafood production from the Erie, Pennsylvania facility to the Jackson, Tennessee facility. Due to the delays caused by the difficulties encountered, the Company is
forecasting significantly reduced sales in 2006 and thereafter. Due to the reduced sales and corresponding projected decline in cash flows, the Company has concluded that the intangible assets related to the Frozen Seafood reporting unit have been
impaired. These impairments included goodwill ($44,860) and tradenames ($18,144). The Company has included these charges, which are recorded in the frozen foods segment, in the Consolidated Statement of Operations for fiscal 2005. The tradename
impairment is recorded as part of the Other expense (income), net line item.

Additionally, in 2005, the Company experienced higher than expected costs,
including trade spending and material costs, in the pizza reporting unit, from which the Company is not expecting relief in the near-term. Due to the higher costs, the Company has concluded that the all the goodwill related to the pizza reporting
unit has been impaired and has recorded a charge in the amount of $9,897 on the Consolidated Statement of Operations for fiscal 2005. This charge is reported in the frozen foods segment of the business.

Also, in the fourth quarter of 2005, the Company reassessed the long-term growth rate of sales of the products under the Lenders brand. Management concluded that
the growth rates were less than anticipated in the prior year and that a further impairment of the tradename asset had occurred. As a result of the decline, the Company has recognized an impairment in the tradename for the Lenders in the
amount of $1,118. The charge is recorded in the Other expense (income), net line item on the Consolidated Statements of Operations and is reported in the frozen foods segment.

In the fourth quarter of 2006, the Company reassessed the long-term growth rate of sales of the products under the Aunt Jemima brand. Due to increased competition, management reduced the expected future growth rates
and as a result, recorded an impairment of the tradename asset in the amount of $2,700. The charge is recorded in the Other expense (income), net line item on the Consolidated Statements of Operations and is reported in the frozen foods segment.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



The following table summarizes impairment and restructuring charges. It also includes severance liabilities assumed
or established in purchase accounting. These amounts are recorded in accrued liabilities on the Consolidated Balance Sheet.



|                               |  |                            |       |           |   |                                        |  |                   |        |  |                |         |   |                            |   |        |   |  |   |      
|------------------------------ |  | -------------------------- | ----- | --------- | - | -------------------------------------- |  | ----------------- | ------ |  | -------------- | ------- | - | -------------------------- | - | ------ | - |  | - | -----
|Description                    |  | Balance atAugust 1,2003    |       | Additions |   | AssumedLiabilities /PurchaseAccounting |  | NoncashReductions |        |  | CashReductions |         |   | Balance atNovember 24,2003
|Other asset impairment charges |  | $                          |      |           | $ | 1,262                                  |  | $                 |       |  | $              | (1,262  | ) |                            | $ |       |   |  | $ |     
|Employee severance             |  |                            |      |           |   |                                       |  |                   |       |  |                |        |   |                            |   |       |   |  |   |     
|Other costs                    |  |                            |      |           |   |                                       |  |                   |       |  |                |        |   |                            |   |       |   |  |   |     
|                               |  |                            |       |           |   |                                        |  |                   |        |  |                |         |   |                            |   |        |   |  |   |      
|Total                          |  | $                          |      |           | $ | 1,262                                  |  | $                 |       |  | $              | (1,262  | ) |                            | $ |       |   |  | $ |     
|                               |  |                            |       |           |   |                                        |  |                   |        |  |                |         |   |                            |   |        |   |  |   |      
|                               |  |                            |       |           |   |                                       
|Description                    |  | Balance atNovember 25,2003 |       | Additions |   | AssumedLiabilities /PurchaseAccounting |  | NoncashReductions |        |  | CashReductions |         |   | Balance atJuly 31, 2004   
|Goodwill impairment charges    |  | $                          |      |           | $ | 1,835                                  |  | $                 |       |  | $              | (1,835  | ) |                            | $ |       |   |  | $ |     
|Other asset impairment charges |  |                            |      |           |   | 11,666                                 |  |                   |       |  |                | (11,666 | ) |                            |   |       |   |  |   |     
|Employee severance             |  |                            |      |           |   | 2,506                                  |  |                   | 11,406 |  |                |        |   |                            |   | (6,085 | ) |  |   | 7,827
|Other costs                    |  |                            |      |           |   | 1,851                                  |  |                   |       |  |                |        |   |                            |   | (1,546 | ) |  |   | 305  
|                               |  |                            |       |           |   |                                        |  |                   |        |  |                |         |   |                            |   |        |   |  |   |      
|Total                          |  | $                          |      |           | $ | 17,858                                 |  | $                 | 11,406 |  | $              | (13,501 | ) |                            | $ | (7,631 | ) |  | $ | 8,132
|                               |  |                            |       |           |   |                                        |  |                   |        |  |                |         |   |                            |   |        |   |  |   |      
|                               |  |                            |       |           |   |                                       
|Description                    |  | Balance atAugust 1,2004    |       | Additions |   | AssumedLiabilities /PurchaseAccounting |  | NoncashReductions |        |  | CashReductions |         |   | Balance atDecember 26,2004
|Goodwill impairment charges    |  | $                          |      |           | $ | 4,308                                  |  | $                 |       |  | $              | (4,308  | ) |                            | $ |       |   |  | $ |     
|Other asset impairment charges |  |                            |      |           |   | 2,661                                  |  |                   |       |  |                | (2,661  | ) |                            |   |       |   |  |   |     
|Employee severance             |  |                            | 7,827 |           |   |                                       |  |                   |       |  |                |        |   |                            |   | (4,132 | ) |  |   | 3,695
|Other costs                    |  |                            | 305   |           |   | 1,227                                  |  |                   |       |  |                |        |   |                            |   | (1,227 | ) |  |   | 305  
|                               |  |                            |       |           |   |                                        |  |                   |        |  |                |         |   |                            |   |        |   |  |   |      
|Total                          |  | $                          | 8,132 |           | $ | 8,196                                  |  | $                 |       |  | $              | (6,969  | ) |                            | $ | (5,359 | ) |  | $ | 4,000
|                               |  |                            |       |           |   |                                        |  |                   |        |  |                |         |   |                            |   |        |   |  |   |      
|                               |  |                            |       |           |   |                                       
|Description                    |  | Balance atDecember 27,2004 |       | Additions |   | AssumedLiabilities /PurchaseAccounting |  | NoncashReductions |        |  | CashReductions |         |   | Balance atDecember 25,2005
|Goodwill impairment charges    |  | $                          |      |           | $ | 54,757                                 |  | $                 |       |  | $              | (54,757 | ) |                            | $ |       |   |  | $ |     
|Other asset impairment charges |  |                            |      |           |   | 20,124                                 |  |                   |       |  |                | (20,124 | ) |                            |   |       |   |  |   |     
|Employee severance             |  |                            | 3,695 |           |   | 972                                    |  |                   |       |  |                | (444    | ) |                            |   | (3,541 | ) |  |   | 682  
|Other costs                    |  |                            | 305   |           |   | 6,182                                  |  |                   |       |  |                |        |   |                            |   | (6,213 | ) |  |   | 274  
|                               |  |                            |       |           |   |                                        |  |                   |        |  |                |         |   |                            |   |        |   |  |   |      
|Total                          |  | $                          | 4,000 |           | $ | 82,035                                 |  | $                 |       |  | $              | (75,325 | ) |                            | $ | (9,754 | ) |  | $ | 956  
|                               |  |                            |       |           |   |                                        |  |                   |        |  |                |         |   |                            |   |        |   |  |   |      
|                               |  |                            |       |           |   |                                       
|Description                    |  | Balance atDecember 26,2005 |       | Additions |   | AssumedLiabilities /PurchaseAccounting |  | NoncashReductions |        |  | CashReductions |         |   | Balance atDecember 31,2006
|Other asset impairment charges |  | $                          |      |           | $ | 5,480                                  |  | $                 |       |  | $              | (5,480  | ) |                            | $ |       |   |  | $ |     
|Employee severance             |  |                            | 682   |           |   |                                       |  |                   | 800    |  |                | (149    | ) |                            |   | (721   | ) |  |   | 612  
|Other costs                    |  |                            | 274   |           |   | 1,307                                  |  |                   |       |  |                | (50     | ) |                            |   | (1,306 | ) |  |   | 225  
|                               |  |                            |       |           |   |                                        |  |                   |        |  |                |         |   |                            |   |        |   |  |   |      
|Total                          |  | $                          | 956   |           | $ | 6,787                                  |  | $                 | 800    |  | $              | (5,679  | ) |                            | $ | (2,027 | ) |  | $ | 837  
|                               |  |                            |       |           |   |                                        |  |                   |        |  |                |         |   |                            |   |        |   |  |   |      



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



|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 No. 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 No. 123(R) supersedes the Companys previous accounting under Accounting Principles Board
Opinion No. 25, Accounting for Stock Issued to Employees (APB No. 25) for periods beginning in fiscal 2006. In March 2005, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 107
(SAB No. 107) relating to SFAS No. 123(R). The Company has applied the provisions of SAB No. 107 in its adoption of SFAS No. 123(R).

The Company adopted SFAS No. 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 year ended December 31, 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 No. 123(R). Stock-based compensation expense related to employee stock options for fiscal 2006 as a result of adopting
SFAS No. 123(R) was $1,900 ($1,892 net of tax). In addition, the Company recorded $1,415 (with no related tax impact) for stock-based compensation expense in fiscal 2006 for certain ownership units of LLC that were issued to CDM in the first
quarter of 2006, which is controlled by certain members of PFGIs management (see discussion below). There was no stock-based compensation expense recognized during fiscal 2005.

SFAS No. 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 No. 123(R), the Company accounted for stock-based awards
to employees and directors using the intrinsic value method in accordance with APB No. 25 as allowed under Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (SFAS
No. 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.

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 fiscal 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 No. 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 No. 123(R). As stock-based compensation expense recognized in the Consolidated Statement of Operations for fiscal 2006 is based on awards ultimately
expected to vest, it has been reduced for estimated forfeitures. SFAS No. 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 No. 123 for the periods prior to fiscal 2006, the Company accounted for forfeitures as they occurred.

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 No. 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 five 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 No. 123(R) and SAB No. 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.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



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.



|                                          |  |             |  
|----------------------------------------- |  | ----------- | -
|                                          |  | Fiscal 2006 |  
|Risk-free interest rate                   |  | 4.863       | %
|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. The Company
estimates that the annual forfeiture rates range from 4-10%, depending on the class of employees receiving the stock option grant.

2004 Stock Option
Plan

Crunch Holding Corp. (CHC), which owns all of the common stock 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.

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



|                                |  |                 |   |  |                               |      |                      |      |                                 |   |  
|------------------------------- |  | --------------- | - |  | ----------------------------- | ---- | -------------------- | ---- | ------------------------------- | - | -
|                                |  | Number ofShares |   |  | WeightedAverageExercise Price |      | AverageRemainingLife |      | 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                         |  | 10,602,111      |   |  | $                             | 1.00 |                      |      |                                 |   |  
|Exercised                       |  | (163,315        | ) |  |                               | 1.00 |                      |      |                                 |   |  
|Forteitures                     |  | (3,768,075      | ) |  |                               | 1.00 |                      |      |                                 |   |  
|                                |  |                 |   |  |                               |      |                      |      |                                 |   |  
|Outstanding - December 31, 2006 |  | 27,328,663      |   |  | $                             | 1.00 |                      | 8.24 |                                 | $ | 
|                                |  |                 |   |  |                               |      |                      |      |                                 |   |  
|Exercisable - December 31, 2006 |  | 9,628,925       |   |  | $                             | 1.00 |                      | 7.70 |                                 | $ | 
|                                |  |                 |   |  |                               |      |                      |      |                                 |   |  

As discussed in Note 19, on February 10, 2007, The Blackstone Group (Blackstone), through an
affiliate, agreed to acquire 100% of the common stock of Crunch Holding Corp., the Companys sole shareholder. Under the terms of the agreement, all outstanding options at the time of the closing, which we expect to occur during the second
quarter of fiscal 2007, will immediately vest.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



As of December 31, 2006, there was $4.5 million of total unrecognized compensation cost related to nonvested
options. Estimated expense for the next five years is as follows: 2007 - $1,286, 2008 - $1,082, 2009 - $748, 2010 - $619, 2011 - $390 and thereafter - $335. The intrinsic value of options exercised during fiscal 2006 was $0.

The weighted-average fair value of options granted during fiscal 2006 was:



|                                                   |  |            |       
|-------------------------------------------------- |  | ---------- | ------
|                                                   |  | Fiscal2006
|Weighted average fair value of each option granted |  | $          | 0.37  
|Number of options granted                          |  |            | 10,602
|                                                   |  |            |       
|Total fair value of all options granted            |  | $          | 3,923 
|                                                   |  |            |       

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 2006 and 2005, employees purchased 500,000 and 9,982,971 shares, respectively, of CHCs common stock at $1.00 per share.
No other shares have been purchased.

Expense Information under SFAS No. 123(R)

The following table summarizes stock-based compensation expense related to employee stock options and employee stock purchases under SFAS No. 123(R) for fiscal 2006
which was allocated as follows:



|                                         |  |            |       |  
|---------------------------------------- |  | ---------- | ----- | -
|                                         |  | Fiscal2006 |      
|Cost of products sold                    |  | $          | 163   |  
|Marketing and selling expenses           |  |            | 455   |  
|Administrative expenses                  |  |            | 1,226 |  
|Research and development expenses        |  |            | 56    |  
|                                         |  |            |       |  
|Pre-Tax Stock-Based Compensation Expense |  |            | 1,900 |  
|Income Tax Benefit                       |  |            | (8    | )
|                                         |  |            |       |  
|Net Stock-Based Compensation Expense     |  | $          | 1,892 |  
|                                         |  |            |       |  

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.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



Pro Forma Information Under SFAS No. 123 for Periods Prior to Fiscal 2006

SFAS No. 123(R) 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 loss if the Company had applied the fair value recognition provisions of SFAS No. 123 to stock-based employee compensation.



|                                                                                                                                                   |  |                                  |         |   |                               |   |         |                           |  |   |                               |   |  |   |        |  
|-------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------- | ------- | - | ----------------------------- | - | ------- | ------------------------- |  | - | ----------------------------- | - |  | - | ------ | -
|                                                                                                                                                   |  | Successor                        |         |   | Predecessor                   |  
|                                                                                                                                                   |  | Fiscal YearEndedDecember 25,2005 |         |   | 21 weeksEndedDecember 26,2004 |   |         | 36 weeksEndedJuly 31,2004 |  |   | 16 weeksEndedNovember 24,2003 |  
|Net loss, as reported                                                                                                                              |  | $                                | (43,176 | ) |                               | $ | (24,706 | )                         |  | $ | (83,913                       | ) |  | $ | (3,074 | )
|Add: Stock-based compensation expense included in reported net loss, net of tax                                                                    |  |                                  |        |   |                               |   |        |                           |  |   | 18,400                        |   |  |   | 3,158  |  
|Deduct: Total stock-based employee compensation expense determined under fair value method for all stock option awards, net of related tax
effects |  |                                  | (1,147  | ) |                               |   | (504    | )                         |  |   | (19,031                       | ) |  |   | (734   | )
|                                                                                                                                                   |  |                                  |         |   |                               |   |         |                           |  |   |                               |   |  |   |        |  
|Pro forma net loss                                                                                                                                 |  | $                                | (44,323 | ) |                               | $ | (25,210 | )                         |  | $ | (84,544                       | ) |  | $ | (650   | )
|                                                                                                                                                   |  |                                  |         |   |                               |   |         |                           |  |   |                               |   |  |   |        |  



|6. | Other Expense (Income), net
|-- | ---------------------------



|                                                      |  |                                  |        |   |                                  |   |        |                               |  |   |                           |   |  |                               |        |   |  |   |       |  
|----------------------------------------------------- |  | -------------------------------- | ------ | - | -------------------------------- | - | ------ | ----------------------------- |  | - | ------------------------- | - |  | ----------------------------- | ------ | - |  | - | ----- | -
|                                                      |  | Successor                        |        |   | Predecessor                      |  
|                                                      |  | Fiscal yearendedDecember 31,2006 |        |   | Fiscal yearendedDecember 25,2005 |   |        | 21 weeksendedDecember 26,2004 |  |   | 36 weeksendedJuly 31,2004 |   |  | 16 weeksendedNovember 24,2003 |       
|Other expense (income), net consists of:              |  |                                  |        |   |                                  |   |        |                               |  |   |                           |   |  |                               |        |   |  |   |       |  
|Restructuring and intangible asset impairment charges |  | $                                | 6,787  |   |                                  | $ | 27,278 |                               |  | $ | 3,888                     |   |  | $                             | 16,023 |   |  | $ | 1,262 |  
|Amortization of intangibles/other assets              |  |                                  | 7,415  |   |                                  |   | 4,814  |                               |  |   | 1,905                     |   |  |                               | 1,549  |   |  |   | 79    |  
|Merger related costs                                  |  |                                  |       |   |                                  |   | (101   | )                             |  |   |                          |   |  |                               | 20,620 |   |  |   | 6,661 |  
|Royalty income and other                              |  |                                  | (16    | ) |                                  |   | (155   | )                             |  |   | (113                      | ) |  |                               | (96    | ) |  |   | (46   | )
|                                                      |  |                                  |        |   |                                  |   |        |                               |  |   |                           |   |  |                               |        |   |  |   |       |  
|Total other expense (income), net                     |  | $                                | 14,186 |   |                                  | $ | 31,836 |                               |  | $ | 5,680                     |   |  | $                             | 38,096 |   |  | $ | 7,956 |  
|                                                      |  |                                  |        |   |                                  |   |        |                               |  |   |                           |   |  |                               |        |   |  |   |       |  

Restructuring and intangible asset impairment charges. As described in Note 4, the Company incurred
costs in connection with impairments to certain tradenames, the shutdown of the Erie, Pennsylvania and Omaha, Nebraska facilities, the shutdown of the bagel production line in Mattoon, Illinois, and the discontinuation of the Chefs Choice
branded products, and other asset impairment charges.

Merger related costs. The Successor and/or the Predecessor incurred the following
costs in connection with the Merger discussed in Note 1:

Successor

Equity related compensation. In connection with the formation of LLC and the Pinnacle Transaction, 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. Additional units were issued in connection with the Aurora
Merger. The interests vest immediately. The estimated fair value of the interests issued in the Pinnacle and Aurora Mergers at the dates of their respective grants were $11,000 and $7,400, respectively, and each has been included in the Consolidated
Balance Sheet as an increase in the Successors paid-in-capital and in the Consolidated Statement of Operations as an expense reflecting the charge for the fair value immediately after consummation of such transactions.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



Retention benefits.In connection with the Pinnacle Transaction, retention benefits paid in
February 2004 to certain key employees of approximately $2,220 were recognized as expense during the 36 week period ended July 31, 2004.

Predecessor

Stock options.Immediately prior to closing, pursuant to their original terms, all of the
Predecessors outstanding stock options vested and the Predecessor exercised its purchase option to purchase at fair value all of the shares of common stock to be acquired by exercise of options held by employees pursuant to the Stock Option
Plan. As a result, compensation expense of approximately $4,935 million was recorded in the Consolidated Statement of Operations immediately before the Merger for the difference between the aggregate fair value of the shares of common stock and the
aggregate exercise price of the stock options.

Change in control.The closing of the transaction represents a change in control under
the Predecessors employment agreements with certain executives. As a result, the Predecessor was required to pay $1,688 million pursuant to these agreements and recorded a charge for such amount in the Consolidated Statement of Operations
immediately before the Merger.



|7. | Balance Sheet Information
|-- | -------------------------

Accounts Receivable. Customer
accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for cash discounts, returns and bad debts is our best estimate of the amount of uncollectible amounts in our existing accounts receivable. The Company
determines the allowance based on historical discounts taken and write-off experience. The Company reviews its allowance for doubtful accounts monthly. Account balances are charged off against the allowance when the Company concludes it is probable
the receivable will not be recovered. The Company does not have any off-balance sheet credit exposure related to our customers. Accounts receivable are as follows:



|                                                     |  |                  |        |   |                  |   |        |  
|---------------------------------------------------- |  | ---------------- | ------ | - | ---------------- | - | ------ | -
|                                                     |  | December 31,2006 |        |   | December 25,2005 |  
|Customers                                            |  | $                | 87,796 |   |                  | $ | 79,263 |  
|Allowances for cash discounts, bad debts and returns |  |                  | (4,006 | ) |                  |   | (5,772 | )
|                                                     |  |                  |        |   |                  |   |        |  
|                                                     |  |                  | 83,790 |   |                  |   | 73,491 |  
|Other                                                |  |                  | 1,793  |   |                  |   | 2,764  |  
|                                                     |  |                  |        |   |                  |   |        |  
|Total                                                |  | $                | 85,583 |   |                  | $ | 76,255 |  
|                                                     |  |                  |        |   |                  |   |        |  

Following are the changes in the allowance for cash discounts, bad debts, and returns:



|                                    |  |                  |       |           |   |              |  |            |       |  |               |         |   |  |   |      
|----------------------------------- |  | ---------------- | ----- | --------- | - | ------------ |  | ---------- | ----- |  | ------------- | ------- | - |  | - | -----
|                                    |  | BeginningBalance |       | Additions |   | Acquisitions |  | Deductions |       |  | EndingBalance
|Successor                           |  |                  |       |           |   |              |  |            |       |  |               |         |   |  |   |      
|Fiscal year ended December 31, 2006 |  | $                | 5,772 |           | $ | 38,520       |  | $          |      |  | $             | (40,286 | ) |  | $ | 4,006
|Fiscal year ended December 25, 2005 |  |                  | 6,320 |           |   | 34,188       |  |            |       |  |               | (34,736 | ) |  |   | 5,772
|21 weeks ended December 26, 2004    |  |                  | 7,792 |           |   | 13,743       |  |            |       |  |               | (15,215 | ) |  |   | 6,320
|36 weeks ended July 31, 2004        |  |                  | 2,200 |           |   | 16,802       |  |            | 3,883 |  |               | (15,093 | ) |  |   | 7,792
|                                    |  |                  |       |           |  
|Predecessor                         |  |                  |       |           |   |              |  |            |       |  |               |         |   |  |   |      
|16 weeks ended November 24, 2003    |  | $                | 1,765 |           | $ | 4,755        |  |            |       |  | $             | (4,320  | ) |  | $ | 2,200



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



Inventories.Inventories are as follows:



|                                       |  |                  |         |   |                  |   |         |  
|-------------------------------------- |  | ---------------- | ------- | - | ---------------- | - | ------- | -
|                                       |  | December 31,2006 |         |   | December 25,2005 |  
|Raw materials, containers and supplies |  | $                | 34,829  |   |                  | $ | 38,050  |  
|Finished product                       |  |                  | 146,206 |   |                  |   | 139,761 |  
|                                       |  |                  |         |   |                  |   |         |  
|                                       |  |                  | 181,035 |   |                  |   | 177,811 |  
|Reserves                               |  |                  | (2,735  | ) |                  |   | (7,190  | )
|                                       |  |                  |         |   |                  |   |         |  
|Total                                  |  | $                | 178,300 |   |                  | $ | 170,621 |  
|                                       |  |                  |         |   |                  |   |         |  

Reserves represent amounts necessary to adjust the carrying value of its 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.

Following are the changes
in the inventory reserve:



|                                    |  |                  |        |           |   |              |  |            |  |   |               |   |  |   |       
|----------------------------------- |  | ---------------- | ------ | --------- | - | ------------ |  | ---------- |  | - | ------------- | - |  | - | ------
|                                    |  | BeginningBalance |        | Additions |   | Acquisitions |  | Deductions |  |   | EndingBalance
|Successor                           |  |                  |        |           |   |              |  |            |  |   |               |   |  |   |       
|Fiscal year ended December 31, 2006 |  | $                | 7,190  |           | $ | 3,778        |  |            |  | $ | (8,233        | ) |  | $ | 2,735 
|Fiscal year ended December 25, 2005 |  |                  | 16,624 |           |   | 2,853        |  |            |  |   | (12,287       | ) |  |   | 7,190 
|21 weeks ended December 26, 2004    |  |                  | 12,424 |           |   | 7,766        |  |            |  |   | (3,566        | ) |  |   | 16,624
|36 weeks ended July 31, 2004        |  |                  | 1,400  |           |   | 7,217        |  | 4,406      |  |   | (599          | ) |  |   | 12,424
|                                    |  |                  |        |           |  
|Predecessor                         |  |                  |        |           |   |              |  |            |  |   |               |   |  |   |       
|16 weeks ended November 24, 2003    |  | $                | 1,109  |           | $ | 516          |  |            |  | $ | (225          | ) |  | $ | 1,400 

Plant Assets.Plant assets are as follows:



|                         |  |                  |         |   |                  |   |         |  
|------------------------ |  | ---------------- | ------- | - | ---------------- | - | ------- | -
|                         |  | December 31,2006 |         |   | December 25,2005 |  
|Land                     |  | $                | 12,963  |   |                  | $ | 12,533  |  
|Buildings                |  |                  | 81,973  |   |                  |   | 65,408  |  
|Machinery and equipment  |  |                  | 243,420 |   |                  |   | 198,358 |  
|Projects in progress     |  |                  | 11,081  |   |                  |   | 11,670  |  
|                         |  |                  |         |   |                  |   |         |  
|                         |  |                  | 349,437 |   |                  |   | 287,969 |  
|Accumulated depreciation |  |                  | (96,050 | ) |                  |   | (68,868 | )
|                         |  |                  |         |   |                  |   |         |  
|Total                    |  | $                | 253,387 |   |                  | $ | 219,101 |  
|                         |  |                  |         |   |                  |   |         |  

Depreciation of the Predecessor was $6,058 during the 16 weeks ended November 24, 2003. Depreciation of the
Successor was $34,772 during fiscal 2006, $34,274 during fiscal 2005, $15,163 during the 21 weeks ended December 26, 2004, and $23,020 during the 36 weeks ended July 31, 2004.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



Accounts Payable. Accounts payable are as follows:



|                |  |                  |        |                  |   |       
|--------------- |  | ---------------- | ------ | ---------------- | - | ------
|                |  | December 31,2006 |        | December 25,2005
|Trade payables  |  | $                | 56,635 |                  | $ | 55,053
|Book overdrafts |  |                  | 908    |                  |   | 6,712 
|                |  |                  |        |                  |   |       
|Total           |  | $                | 57,543 |                  | $ | 61,765
|                |  |                  |        |                  |   |       

Book overdrafts represent outstanding checks in excess of funds on deposit.

Accrued Liabilities. Accrued liabilities are as follows:



|                                   |  |                  |        |                  |   |       
|---------------------------------- |  | ---------------- | ------ | ---------------- | - | ------
|                                   |  | December 31,2006 |        | December 25,2005
|Employee compensation and benefits |  | $                | 31,501 |                  | $ | 20,862
|Excess leverage fee (see Note 13)  |  |                  | 20,110 |                  |   | 20,110
|Consumer coupons                   |  |                  | 4,186  |                  |   | 5,028 
|Interest payable                   |  |                  | 11,968 |                  |   | 11,248
|Accrued restructuring charges      |  |                  | 837    |                  |   | 956   
|Accrued pension, current portion   |  |                  | 650    |                  |   |      
|Other                              |  |                  | 11,996 |                  |   | 13,255
|                                   |  |                  |        |                  |   |       
|Total                              |  | $                | 81,248 |                  | $ | 71,459
|                                   |  |                  |        |                  |   |       



|8. | Goodwill, Tradenames and Other Assets
|-- | -------------------------------------

Goodwill by reporting unit
is as follows:



|                                          |  |             |         |   |          |   |         |       |  |   |         |  
|----------------------------------------- |  | ----------- | ------- | - | -------- | - | ------- | ----- |  | - | ------- | -
|                                          |  | FrozenFoods |         |   | DryFoods |   |         | Total | 
|Balance, December 26, 2004                |  | $           | 122,858 |   |          | $ | 294,005 |       |  | $ | 416,863 |  
|Impairments                               |  |             | (54,757 | ) |          |   |        |       |  |   | (54,757 | )
|Purchase price adjustment                 |  |             |        |   |          |   | (1,545  | )     |  |   | (1,545  | )
|Settlement of pre-acquisition liabilities |  |             | (371    | ) |          |   | (660    | )     |  |   | (1,031  | )
|Other adjustments                         |  |             | (17     | ) |          |   |        |       |  |   | (17     | )
|                                          |  |             |         |   |          |   |         |       |  |   |         |  
|Balance, December 25, 2005                |  | $           | 67,713  |   |          | $ | 291,800 |       |  | $ | 359,513 |  
|                                          |  |             |         |   |          |   |         |       |  |   |         |  
|Armour Acquisition                        |  |             |         |   |          |   | 43,767  |       |  |   | 43,767  |  
|Settlement of pre-acquisition liabilities |  |             | (46     | ) |          |   | (1,073  | )     |  |   | (1,119  | )
|                                          |  |             |         |   |          |   |         |       |  |   |         |  
|Balance, December 31, 2006                |  | $           | 67,667  |   |          | $ | 334,494 |       |  | $ | 402,161 |  
|                                          |  |             |         |   |          |   |         |       |  |   |         |  

The acquisition of the Armour business in fiscal 2006 resulted in $43,767 of goodwill which was all allocated to
the dry foods segment and is not subject to amortization. Certain liabilities which were accrued for as part of the Pinnacle Transaction and the Aurora Merger were settled at less than their accrued amounts. These settlements resulted in adjustments
totaling $1,119 which reduced goodwill



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



During the first quarter of 2005, the working capital adjustment for the Pinnacle Transaction was finalized. In the
initial consideration paid to the Predecessors shareholders, $10 million was deposited into an escrow account pending finalization of the working capital adjustment. Upon the settlement of the adjustment, which was $8.4 million, the remaining
cash was returned to the Company and resulted in a net reduction to goodwill of $1,545, which was recorded in the dry foods segment.

During the second
quarter of 2005, the Company settled a state tax liability related to the period of ownership prior to the Pinnacle Transaction. The amount of the settlement was for less than the liability accrued at the time of the change in ownership. The
settlement of the liability resulted in a decrease to goodwill of $206 and was recorded in the dry foods segment. Furthermore, certain liabilities, which were accrued as part of the acquisition of Aurora, were settled at less than their accrued
amounts. Consequently, an adjustment was made in the amount of $825 to reduce goodwill and the related accrued liability, of which $371 was recorded in the frozen foods segment and $454 was recorded in the dry foods segment.

Goodwill Impairments

In 2005, the Company experienced difficulties
and delays in transferring the frozen seafood production from the Erie, Pennsylvania facility to the Jackson, Tennessee facility. Due to the delays caused by the difficulties encountered, the Company recognized reduced sales and projected the
decline to continue. As a result, the Company concluded that the intangible assets related to the frozen seafood reporting unit had been impaired. These assets included goodwill ($44,860) and tradenames ($18,144). The Company included these charges,
which are recorded in the frozen foods segment, in the Consolidated Statement of Operations for fiscal 2005. The tradename impairment is recorded as part of the Other expense (income), net line item.

Additionally, in 2005, the Company experienced higher than expected costs, including trade marketing spending and material costs, in the frozen pizza reporting unit,
from which the Company is not expecting relief in the near-term. Due to the higher costs, the Company concluded that the all the goodwill related to the frozen pizza reporting unit had been impaired and recorded a charge in the amount of $9,897 on
the Consolidated Statement of Operations for fiscal 2005. This charge is reported in the frozen foods segment of the business.

Tradenames

Tradenames by reporting unit is as follows:



|                           |  |             |         |   |          |   |         |  |   |         |  
|-------------------------- |  | ----------- | ------- | - | -------- | - | ------- |  | - | ------- | -
|                           |  | FrozenFoods |         |   | DryFoods |   | Total   | 
|Balance, December 26, 2004 |  | $           | 250,804 |   |          | $ | 529,740 |  | $ | 780,544 |  
|Impairments                |  |             | (19,262 | ) |          |   |        |  |   | (19,262 | )
|                           |  |             |         |   |          |   |         |  |   |         |  
|Balance, December 25, 2005 |  | $           | 231,542 |   |          | $ | 529,740 |  | $ | 761,282 |  
|                           |  |             |         |   |          |   |         |  |   |         |  
|Armour acquisition         |  |             |        |   |          |   | 39,000  |  |   | 39,000  |  
|Impairment                 |  |             | (2,700  | ) |          |   |        |  |   | (2,700  | )
|                           |  |             |         |   |          |   |         |  |   |         |  
|Balance, December 31, 2006 |  | $           | 228,842 |   |          | $ | 568,740 |  | $ | 797,582 |  
|                           |  |             |         |   |          |   |         |  |   |         |  

In fiscal 2006, the allocation of the Armour Business purchase price resulted in indefinite lived tradename
intangible assets of $39,000, all of which is recorded in the dry foods segment.

In the fourth quarter of 2006, the Company reassessed the long-term
growth rate of sales of the products under the Aunt Jemima brand. Due to increased competition, management reduced the expected future growth rates and as a result, recorded an impairment of the tradename asset in the amount of $2,700. The charge is
recorded in the Other expense (income), net line item on the Consolidated Statements of Operations and is reported in the frozen foods segment.

In fiscal
2005, the Company forecasted significantly lower sales for fiscal 2006 and thereafter in the frozen seafood reporting unit as a result in delays in moving production from the Erie, Pennsylvania to the Jackson, Tennessee plant. As a result of the
decline, the Company has recognized an impairment in the tradename for the Mrs. Pauls ($10,437) and Van de Kamps ($7,707) brands. The charge is recorded in the Other expense (income), net line item on the Consolidated Statements of
Operations and is reported in the frozen foods segment.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



In the fourth quarter of 2005, the Company reassessed the long-term growth rate of sales of the products under the
Lenders brand. Management concluded that the growth rates were less than anticipated in the prior year and that a further impairment of the Tradename asset had occurred. As a result of the decline, the Company recognized an impairment in the
Lenders tradename in the amount of $1,118. The charge is recorded in the Other expense (income), net line item on the Consolidated Statements of Operations and is reported in the frozen foods segment.

Other Assets



|                                                                                               |  |                  |        |                  |   |       
|---------------------------------------------------------------------------------------------- |  | ---------------- | ------ | ---------------- | - | ------
|                                                                                               |  | December 31,2006 |        | December 25,2005
|Amortizable intangibles, net of accumulated amortization of $15,683 and $8,268, respectively   |  | $                | 30,348 |                  | $ | 12,763
|Deferred financing costs, net of accumulated amortization of $18,405 and $10,981, respectively |  |                  | 26,049 |                  |   | 29,657
|Interest rate swap fair value (Note 12)                                                        |  |                  |       |                  |   | 2,422 
|                                                                                               |  |                  |        |                  |   |       
|Total                                                                                          |  | $                | 56,397 |                  | $ | 44,842
|                                                                                               |  |                  |        |                  |   |       

The change in the book value of the amortizable intangible assets, net is as follows:



|             |  |                  |        |              |   |        |                  |  |             |        |              |   |        |                  |   |        |   |  |   |       
|------------ |  | ---------------- | ------ | ------------ | - | ------ | ---------------- |  | ----------- | ------ | ------------ | - | ------ | ---------------- | - | ------ | - |  | - | ------
|             |  | December 26,2004 |        | Amortization |   |        | December 25,2005 |  | Acquisition |        | Amortization |   |        | December 31,2006
|Dry foods    |  | $                | 7,852  |              | $ | (2,519 | )                |  | $           | 5,333  |              | $ | 25,000 |                  | $ | (5,120 | ) |  | $ | 25,213
|Frozen foods |  |                  | 9,725  |              |   | (2,295 | )                |  |             | 7,430  |              |   |       |                  |   | (2,295 | ) |  |   | 5,135 
|             |  |                  |        |              |   |        |                  |  |             |        |              |   |        |                  |   |        |   |  |   |       
|Total        |  | $                | 17,577 |              | $ | (4,814 | )                |  | $           | 12,763 |              | $ | 25,000 |                  | $ | (7,415 | ) |  | $ | 30,348
|             |  |                  |        |              |   |        |                  |  |             |        |              |   |        |                  |   |        |   |  |   |       

In fiscal 2006, the allocation of the Armour Business purchase price result in $25,000 of amortizable intangible
assets; $20,000 was allocated to private label customer relationships with a life of seven years and $5,000 was allocated to recipes with a life of five years. In addition, the remaining 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.

Estimated amortization expense for
each of the next five years and thereafter is as follows: 2007 - $7,642, 2008 - $7,642, 2009 - $4,727, 2010 - $3,880, 2011 - $3,049 and thereafter - $3,408.

Deferred financing costs relate to the Successors senior secured credit facilities and senior subordinated notes. Amortization was $7,424, $6,334, $1,995 and $2,652 for fiscal 2006, 2005, the 21 weeks ended December 26, 2004 and
the 36 weeks ended July 31, 2004, respectively.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



|9. | Debt and Interest Expense
|-- | -------------------------



|                                                         |  |                  |         |                  |   |        
|-------------------------------------------------------- |  | ---------------- | ------- | ---------------- | - | -------
|                                                         |  | December 31,2006 |         | December 25,2005
|Long-term debt                                           |  |                  |         |                  |   |        
|- Senior secured credit facility - term loan             |  | $                | 521,187 |                  | $ | 488,187
|- 8 1/4% Senior subordinated notes                       |  |                  | 394,000 |                  |   | 394,000
|- Plus: unamortized premium on senior subordinated notes |  |                  | 5,360   |                  |   | 5,927  
|- Capital lease obligations                              |  |                  | 206     |                  |   | 350    
|                                                         |  |                  |         |                  |   |        
|Total debt                                               |  |                  | 920,753 |                  |   | 888,464
|Less: current portion of long-term obligations           |  |                  | 123     |                  |   | 153    
|                                                         |  |                  |         |                  |   |        
|Total long-term debt                                     |  | $                | 920,630 |                  | $ | 888,311
|                                                         |  |                  |         |                  |   |        



|                                    |                                  |           |                                  |  |             |                               |   |  |                           |        |   |                               |   |        |   |  |   |       |  
|----------------------------------- | -------------------------------- | --------- | -------------------------------- |  | ----------- | ----------------------------- | - |  | ------------------------- | ------ | - | ----------------------------- | - | ------ | - |  | - | ----- | -
|Interest expense                    |                                  | Successor |                                  |  | Predecessor |                              
|                                    | Fiscal yearendedDecember 31,2006 |           | Fiscal yearendedDecember 25,2005 |  |             | 21 weeksendedDecember 26,2004 |   |  | 36 weeksendedJuly 31,2004 |        |   | 16 weeksendedNovember 24,2003 |  
|Third party interest expense        |                                  | $         | 85,035                           |  | $           | 75,498                        |   |  | $                         | 26,377 |   |                               | $ | 32,885 |   |  | $ | 9,425 |  
|Related party interest expense      |                                  |           | 693                              |  |             | 295                           |   |  |                           | 148    |   |                               |   | 362    |   |  |   |      |  
|Interest rate swap (gains) / losses |                                  |           | 887                              |  |             | (4,689                        | ) |  |                           | (265   | ) |                               |   | (7,007 | ) |  |   | (115  | )
|                                    |                                  |           |                                  |  |             |                               |   |  |                           |        |   |                               |   |        |   |  |   |       |  
|                                    |                                  | $         | 86,615                           |  | $           | 71,104                        |   |  | $                         | 26,260 |   |                               | $ | 26,240 |   |  | $ | 9,310 |  
|                                    |                                  |           |                                  |  |             |                               |   |  |                           |        |   |                               |   |        |   |  |   |       |  

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 14) 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 Armour 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 31, 2006 and December 25, 2005.

As of
December 31, 2006, $2,748 of our term loan was owed to affiliates of 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

(in thousands)



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 fiscal 2006, the weighted average interest rate on the term loan was 7.61%. As of December 31, 2006, the Eurodollar interest rate on the
term loan facility was 7.37%, and the commitment fee on the revolving credit facility was 0.50%. There were no borrowings under the revolving credit facility throughout fiscal 2006. For fiscal 2005, the weighted average interest rate on the term
loan was 6.50% and on the revolving credit facility was 6.30%. As of December 25, 2005, the Eurodollar interest rate on the term loan facility was 7.30% and the commitment fee on the undrawn revolving credit facility was 0.50%.

During fiscal 2006, we prepaid $110 million 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 December 31, 2006 are $521,187 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 31, 2006 and December 25, 2005, we had utilized $9,222 and $11,514, respectively, of the revolving credit facility for letters of credit. Of the $130,000
revolving credit facility available, as of December 31, 2006 and December 25, 2005, we had an unused balance of $120,778 and $118,486, respectively, available for future borrowings and letters of credit, of which a maximum of $30,778 and
$28,486, 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 17 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:



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



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



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 that 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 our excess cash flow, as defined. Due to voluntary prepayments of the term loan made by the Company in fiscal 2006, the Company was not required to make
any mandatory repayments for 2006. 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 amendments 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 ended on the second business day following the date on which the Company delivered to the
Administrative Agent financial statements for the fiscal quarter ending March 2006, which occurred on May 10, 2006.

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 a base rate 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 million 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 December 31, 2006, the balance of the notes
payable totaled $210. The note requires monthly payments through February 2007 and has an imputed interest rate of 6.25%.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



|10. | Pension Plans and Retirement Benefits
|--- | -------------------------------------

As of December 31,
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. For fiscal 2006, fiscal 2005, the 21 weeks ended December 26, 2004 and fiscal 2004, the Company was not required to make contributions to its
pension plan.

The Company 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, 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 cost sharing for retired employees, excluding the Aurora Retirees, was increased to 100%.

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 totaled $7.3 million.

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
expects that this legislation may eventually reduce the costs for some of these programs. However, due to the relative small number of participants, the impact of this legislation did not have a material impact on the consolidated financial
statements.

The Company uses a measurement date for the pension and postretirement benefits plan that coincides with its year end.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



|                                                                                       |  |                  |        |   |                               |   |         |      |  |   |         |   |  |   |        |  
|-------------------------------------------------------------------------------------- |  | ---------------- | ------ | - | ----------------------------- | - | ------- | ---- |  | - | ------- | - |  | - | ------ | -
|                                                                                       |  | Pension Benefits |        |   | Other Postretirement Benefits |  
|                                                                                       |  | 2006             |        |   | 2005                          |   |         | 2006 |  |   | 2005    |  
|Change in Benefit Obligation                                                           |  |                  |        |   |                               |   |         |      |  |   |         |   |  |   |        |  
|Net benefit obligation at beginning of the period                                      |  | $                | 66,454 |   |                               | $ | 59,170  |      |  | $ | 1,237   |   |  | $ | 1,204  |  
|Acquisitions                                                                           |  |                  |       |   |                               |   |        |      |  |   | 7,256   |   |  |   |       |  
|Service cost                                                                           |  |                  | 2,178  |   |                               |   | 1,488   |      |  |   | 837     |   |  |   | 12     |  
|Interest cost                                                                          |  |                  | 3,596  |   |                               |   | 3,314   |      |  |   | 398     |   |  |   | 65     |  
|Actuarial (gain) loss                                                                  |  |                  | (3,445 | ) |                               |   | 6,293   |      |  |   | (793    | ) |  |   | (3     | )
|Gross benefits paid                                                                    |  |                  | (3,707 | ) |                               |   | (3,811  | )    |  |   | (7      | ) |  |   | (41    | )
|                                                                                       |  |                  |        |   |                               |   |         |      |  |   |         |   |  |   |        |  
|Net benefit obligation at end of the period                                            |  |                  | 65,076 |   |                               |   | 66,454  |      |  |   | 8,928   |   |  |   | 1,237  |  
|                                                                                       |  |                  |        |   |                               |   |         |      |  |   |         |   |  |   |        |  
|Change in Plan Assets                                                                  |  |                  |        |   |                               |   |         |      |  |   |         |   |  |   |        |  
|Fair value of plan assets at beginning of the period                                   |  |                  | 53,208 |   |                               |   | 54,125  |      |  |   |        |   |  |   |       |  
|Employer contributions                                                                 |  |                  |       |   |                               |   |        |      |  |   | 7       |   |  |   | 41     |  
|Actual return on plan assets                                                           |  |                  | 5,752  |   |                               |   | 2,894   |      |  |   |        |   |  |   |       |  
|Gross benefits paid                                                                    |  |                  | (3,707 | ) |                               |   | (3,811  | )    |  |   | (7      | ) |  |   | (41    | )
|                                                                                       |  |                  |        |   |                               |   |         |      |  |   |         |   |  |   |        |  
|Fair value of plan assets at end of the period                                         |  |                  | 55,253 |   |                               |   | 53,208  |      |  |   |        |   |  |   |       |  
|                                                                                       |  |                  |        |   |                               |   |         |      |  |   |         |   |  |   |        |  
|Funded status at end of the year                                                       |  |                  | (9,823 | ) |                               |   | (13,246 | )    |  |   | (8,928  | ) |  |   | (1,237 | )
|Unrecognized net actuarial loss (gain)                                                 |  |                  | 3,892  |   |                               |   | 9,010   |      |  |   | (558    | ) |  |   | 235    |  
|Unamortized prior service credit                                                       |  |                  |       |   |                               |   |        |      |  |   | (1,304  | ) |  |   | (1,642 | )
|Amount included in accumulated other comprehensive income (loss)                       |  |                  | (38    | ) |                               |   | (4,019  | )    |  |   |        |   |  |   |       |  
|                                                                                       |  |                  |        |   |                               |   |         |      |  |   |         |   |  |   |        |  
|Net amount recognized at end of the period                                             |  | $                | (5,969 | ) |                               | $ | (8,255  | )    |  | $ | (10,790 | ) |  | $ | (2,644 | )
|                                                                                       |  |                  |        |   |                               |   |         |      |  |   |         |   |  |   |        |  
|Amounts recognized in the Consolidated Balance Sheet                                   |  |                  |        |   |                               |   |         |      |  |   |         |   |  |   |        |  
|Accrued pension and other postretirement benefits                                      |  | $                | (5,319 | ) |                               | $ | (8,255  | )    |  | $ | (10,790 | ) |  | $ | (2,644 | )
|Accrued pension benefits (part of Accrued Liabilities)                                 |  |                  | (650   | ) |                               |   |        |      |  |   |        |   |  |   |       |  
|                                                                                       |  |                  |        |   |                               |   |         |      |  |   |         |   |  |   |        |  
|Net amount recognized at end of the period                                             |  | $                | (5,969 | ) |                               | $ | (8,255  | )    |  | $ | (10,790 | ) |  | $ | (2,644 | )
|                                                                                       |  |                  |        |   |                               |   |         |      |  |   |         |   |  |   |        |  
|Weighted average assumptions                                                           |  |                  |        |   |                               |   |         |      |  |   |         |   |  |   |        |  
|Discount rate                                                                          |  |                  | 6.00   | % |                               |   | 5.50    | %    |  |   | 6.00    | % |  |   | 5.50   | %
|Expected return on plan assets                                                         |  |                  | 8.00   | % |                               |   | 8.00    | %    |  |   |        |   |  |   |       |  
|Rate of compensation increase                                                          |  |                  | 3.50   | % |                               |   | 3.75    | %    |  |   |        |   |  |   |       |  
|                                                                                       |  |                  |        |  
|Projected benefit obligation                                                           |  | $                | 65,076 |   |                               | $ | 66,454  |      |  |   | NA      |   |  |   | NA     |  
|Accumulated benefit obligation                                                         |  |                  | 61,222 |   |                               |   | 61,463  |      |  |   | NA      |   |  |   | NA     |  
|Fair value of plan assets                                                              |  |                  | 55,253 |   |                               |   | 53,208  |      |  |   |        |   |  |   |       |  
|Additional information                                                                 |  |                  |        |   |                               |   |         |      |  |   |         |   |  |   |        |  
|(Decrease) increase in minimum liability included in other comprehensive income (loss) |  | $                | (3,981 | ) |                               | $ | 4,019   |      |  | $ |        |   |  | $ |       |  



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



The following represents the components of net periodic benefit costs and the sensitivity of retiree welfare results:

Pension Benefits



|                               |  |                                  |        |   |                                  |   |        |                               |  |   |                           |   |  |                               |        |   |  |   |        |  
|------------------------------ |  | -------------------------------- | ------ | - | -------------------------------- | - | ------ | ----------------------------- |  | - | ------------------------- | - |  | ----------------------------- | ------ | - |  | - | ------ | -
|                               |  | Successor                        |        |   | Predecessor                      |  
|                               |  | Fiscal yearendedDecember 31,2006 |        |   | Fiscal yearendedDecember 25,2005 |   |        | 21 weeksendedDecember 26,2004 |  |   | 36 weeksendedJuly 31,2004 |   |  | 16 weeksendedNovember 24,2003 |       
|Service cost                   |  | $                                | 2,178  |   |                                  | $ | 1,488  |                               |  | $ | 644                       |   |  | $                             | 1,392  |   |  | $ | 571    |  
|Interest cost                  |  |                                  | 3,596  |   |                                  |   | 3,314  |                               |  |   | 1,351                     |   |  |                               | 2,144  |   |  |   | 990    |  
|Expected return on assets      |  |                                  | (4,201 | ) |                                  |   | (4,207 | )                             |  |   | (1,685                    | ) |  |                               | (2,716 | ) |  |   | (1,219 | )
|Recognized net acturial loss   |  |                                  | 122    |   |                                  |   |        |                               |  |   |                           |   |  |                               |        |   |  |   |        |  
|                               |  |                                  |        |   |                                  |   |        |                               |  |   |                           |   |  |                               |        |   |  |   |        |  
|Net periodic benefit cost      |  | $                                | 1,695  |   |                                  | $ | 595    |                               |  | $ | 310                       |   |  | $                             | 820    |   |  | $ | 342    |  
|                               |  |                                  |        |   |                                  |   |        |                               |  |   |                           |   |  |                               |        |   |  |   |        |  
|Weighted average assumptions:  |  |                                  |        |   |                                  |   |        |                               |  |   |                           |   |  |                               |        |   |  |   |        |  
|Discount rate                  |  |                                  | 5.50   | % |                                  |   | 5.75   | %                             |  |   | 5.75                      | % |  |                               | 6.00   | % |  |   | 6.50   | %
|Expected return on plan assets |  |                                  | 8.00   | % |                                  |   | 8.00   | %                             |  |   | 8.00                      | % |  |                               | 8.00   | % |  |   | 8.00   | %
|Rate of compensation increase  |  |                                  | 3.63   | % |                                  |   | 3.75   | %                             |  |   | 3.75                      | % |  |                               | 3.75   | % |  |   | 3.75   | %

Other postretirement benefits



|                                          |  |                                  |      |   |                                  |   |      |                               |  |   |                           |   |  |                               |      |   |  |   |      |  
|----------------------------------------- |  | -------------------------------- | ---- | - | -------------------------------- | - | ---- | ----------------------------- |  | - | ------------------------- | - |  | ----------------------------- | ---- | - |  | - | ---- | -
|                                          |  | Successor                        |      |   | Predecessor                      |  
|                                          |  | Fiscal yearendedDecember 31,2006 |      |   | Fiscal yearendedDecember 25,2005 |   |      | 21 weeksendedDecember 26,2004 |  |   | 36 weeksendedJuly 31,2004 |   |  | 16 weeksendedNovember 24,2003 |     
|Service cost                              |  | $                                | 837  |   |                                  | $ | 12   |                               |  | $ | 4                         |   |  | $                             | 42   |   |  | $ | 411  |  
|Interest cost                             |  |                                  | 398  |   |                                  |   | 65   |                               |  |   | 28                        |   |  |                               | 63   |   |  |   | 245  |  
|Recognized net actuarial loss             |  |                                  |     |   |                                  |   | 5    |                               |  |   | 3                         |   |  |                               | 91   |   |  |   | 232  |  
|Amortization of:                          |  |                                  |      |   |                                  |   |      |                               |  |   |                           |   |  |                               |      |   |  |   |      |  
|Unrecognized prior service credit         |  |                                  | (338 | ) |                                  |   | (338 | )                             |  |   | (141                      | ) |  |                               | (355 | ) |  |   | (966 | )
|Curtailment                               |  |                                  |     |   |                                  |   |     |                               |  |   | (1,142                    | ) |  |                               |     |   |  |   |     |  
|                                          |  |                                  |      |   |                                  |   |      |                               |  |   |                           |   |  |                               |      |   |  |   |      |  
|Net periodic benefit benefit              |  |                                  | 897  |   |                                  |   | (256 | )                             |  |   | (1,248                    | ) |  |                               | (159 | ) |  |   | (78  | )
|Liability assumed in business acquisition |  |                                  |     |   |                                  |   |     |                               |  |   |                          |   |  |                               | 806  |   |  |   |     |  
|                                          |  |                                  |      |   |                                  |   |      |                               |  |   |                           |   |  |                               |      |   |  |   |      |  
|Total amount recognized                   |  | $                                | 897  |   |                                  | $ | (256 | )                             |  | $ | (1,248                    | ) |  | $                             | 647  |   |  | $ | (78  | )
|                                          |  |                                  |      |   |                                  |   |      |                               |  |   |                           |   |  |                               |      |   |  |   |      |  
|Weighted average assumptions:             |  |                                  |      |   |                                  |   |      |                               |  |   |                           |   |  |                               |      |   |  |   |      |  
|Discount rate                             |  |                                  | 5.75 | % |                                  |   | 5.75 | %                             |  |   | 6.00                      | % |  |                               | 6.00 | % |  |   | 6.50 | %

The discount rate used to calculate the present value of the projected benefit obligation is set based on
long-term high quality bonds that match the expected benefit payments. The projected return of plan assets assumption is based on projected long-term market returns for the various asset classes in which the plans are invested, weighted by the
target asset allocations. The rate of compensation increase represents the long-term assumption for expected increases to salaries for pay-related plans.

The assumed health care trend rates used in determining other post-retirement benefits at December 31, 2006 are 9.0% gradually decreasing to 5.0%. The assumed health care trend rates used in determining other post-retirement benefits
at December 25, 2005 are 9.0% gradually decreasing to 5.0%. The assumed health care trend rates used in determining other post-retirement benefits at December 26, 2004 are 10.0% gradually decreasing to 5.0%.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



|                                                                            |  |                                  |        |   |                                  |   |     |                               |  |   |                           |   |  |                               |     |   |  |    |  
|--------------------------------------------------------------------------- |  | -------------------------------- | ------ | - | -------------------------------- | - | --- | ----------------------------- |  | - | ------------------------- | - |  | ----------------------------- | --- | - |  | -- | -
|                                                                            |  | Successor                        |        |   | Predecessor                      |  
|                                                                            |  | Fiscal yearendedDecember 31,2006 |        |   | Fiscal yearendedDecember 25,2005 |   |     | 21 weeksendedDecember 26,2004 |  |   | 36 weeksendedJuly 31,2004 |   |  | 16 weeksendedNovember 24,2003 |    
|Other post retirement benefits                                              |  |                                  |        |   |                                  |   |     |                               |  |   |                           |   |  |                               |     |   |  |    |  
|Sensitivity of retiree welfare results                                      |  |                                  |        |   |                                  |   |     |                               |  |   |                           |   |  |                               |     |   |  |    |  
|Effect of a one percentage point increase in assumed health care cost trend |  |                                  |        |   |                                  |   |     |                               |  |   |                           |   |  |                               |     |   |  |    |  
|on total service and interest cost components                               |  | $                                | 118    |   |                                  | $ | 5   |                               |  | $ | 6                         |   |  | $                             | 6   |   |  | (a | )
|on postretirement benefit obligation                                        |  | $                                | 1,968  |   |                                  | $ | 99  |                               |  | $ | 105                       |   |  | $                             | 100 |   |  | (a | )
|                                                                            |  |                                  |        |   |                                 
|Effect of a one percentage point decrease in assumed health care cost trend |  |                                  |        |   |                                  |   |     |                               |  |   |                           |   |  |                               |     |   |  |    |  
|on total service and interest cost components                               |  | $                                | (90    | ) |                                  | $ | (4  | )                             |  | $ | (5                        | ) |  | $                             | (5  | ) |  | (a | )
|on postretirement benefit obligation                                        |  | $                                | (1,506 | ) |                                  | $ | (83 | )                             |  | $ | (88                       | ) |  | $                             | (84 | ) |  | (a | )



|(a) | Medical cost sharing rates increased to 100% at May 23, 2004 for all eligible retirees, excluding the Aurora Retirees. Therefore, as of November 24, 2003, the information
regarding sensitivity to a 1% change in trend rates was not applicable.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Plan Assets

The Companys pension plan weighted-average asset allocations at December 31, 2006 and December 25, 2005, by asset category, are as follows:



|                  |  |                  |   |  |                  |  
|----------------- |  | ---------------- | - |  | ---------------- | -
|                  |  | December 31,2006 |   |  | December 25,2005 |  
|Asset category    |  |                  |   |  |                  |  
|Equity securities |  | 61               | % |  | 61               | %
|Debt securities   |  | 34               | % |  | 34               | %
|Cash              |  | 5                | % |  | 5                | %
|                  |  |                  |   |  |                  |  
|Total             |  | 100              | % |  | 100              | %
|                  |  |                  |   |  |                  |  

The Companys investment policy is to invest approximately 60% of plan assets in equity securities, 35% in
fixed income securities, and 5% in cash or cash equivalents. Periodically, the plan assets are rebalanced to maintain these allocation percentages and the investment policy is reviewed. Within each investment category, assets are allocated to
various investment styles. Professional managers manage all assets and a consultant is engaged to assist in evaluating these activities. The expected long-term rate of return on assets was determined by assessing the rates of return on each targeted
asset class, return premiums generated by portfolio management and by comparison of rates utilized by other companies.

Cash Flows

Contributions.The Company expects to contribute $650 to its pension plan and $77 to its other postretirement benefit plan during fiscal 2007.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



Estimated Future Benefit Payments.The following benefit payments, which reflect expected future service, as
appropriate, are expected to be paid:



|          |  |                 |        |               |   |      
|--------- |  | --------------- | ------ | ------------- | - | -----
|          |  | PensionBenefits |        | OtherBenefits
|2007      |  | $               | 3,536  |               | $ | 77   
|2008      |  |                 | 3,361  |               |   | 74   
|2009      |  |                 | 3,219  |               |   | 72   
|2010      |  |                 | 3,060  |               |   | 82   
|2011      |  |                 | 2,901  |               |   | 114  
|2012-2016 |  |                 | 14,078 |               |   | 1,574

Savings Plans. Employees participate in a 401(k) plan. Pinnacle matches 50% of employee contributions up to
five percent of compensation for union employees after one year of continuous service and six percent of compensation for salaried employees. Employer contributions made by the Company relating to this plan were $2,186 for fiscal 2006, $1,816 for
fiscal 2005, $781 for the 21 weeks ended December 26, 2004, $1,024 for the 36 weeks ended July 31, 2004, and $291 for 16 weeks ended November 24, 2003.



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



|11. | Taxes on Earnings
|--- | -----------------

The components of the provision (benefit) for
income taxes are as follows:

PROVISION (BENEFIT) FOR INCOME TAXES



|                                                                                              |  |                                  |        |   |                                  |   |         |                               |  |   |                           |   |  |                               |         |   |  |   |        |  
|--------------------------------------------------------------------------------------------- |  | -------------------------------- | ------ | - | -------------------------------- | - | ------- | ----------------------------- |  | - | ------------------------- | - |  | ----------------------------- | ------- | - |  | - | ------ | -
|                                                                                              |  | Successor                        |        |   | Predecessor                      |  
|                                                                                              |  | Fiscal yearendedDecember 31,2006 |        |   | Fiscal yearendedDecember 25,2005 |   |         | 21 weeksendedDecember 26,2004 |  |   | 36 weeksendedJuly 31,2004 |   |  | 16 weeksendedNovember 24,2003 |        
|Current                                                                                       |  |                                  |        |   |                                  |   |         |                               |  |   |                           |   |  |                               |         |   |  |   |        |  
|Federal                                                                                       |  | $                                | 339    |   |                                  | $ | 186     |                               |  | $ | 56                        |   |  | $                             | (743    | ) |  | $ | (589   | )
|State                                                                                         |  |                                  | 120    |   |                                  |   | (266    | )                             |  |   | 152                       |   |  |                               | 294     |   |  |   | 69     |  
|Non-U.S.                                                                                      |  |                                  | 674    |   |                                  |   | 285     |                               |  |   | (181                      | ) |  |                               | 234     |   |  |   |       |  
|                                                                                              |  |                                  |        |   |                                  |   |         |                               |  |   |                           |   |  |                               |         |   |  |   |        |  
|                                                                                              |  |                                  | 1,133  |   |                                  |   | 205     |                               |  |   | 27                        |   |  |                               | (215    | ) |  |   | (520   | )
|                                                                                              |  |                                  |        |   |                                  |   |         |                               |  |   |                           |   |  |                               |         |   |  |   |        |  
|Deferred                                                                                      |  |                                  |        |   |                                  |   |         |                               |  |   |                           |   |  |                               |         |   |  |   |        |  
|Federal                                                                                       |  |                                  | 20,359 |   |                                  |   | (1,448  | )                             |  |   | 8,014                     |   |  |                               | (2,323  | ) |  |   | (946   | )
|State                                                                                         |  |                                  | 4,606  |   |                                  |   | 897     |                               |  |   | 1,384                     |   |  |                               | (467    | ) |  |   | (40    | )
|Non-U.S.                                                                                      |  |                                  |       |   |                                  |   | (80     | )                             |  |   |                          |   |  |                               | (152    | ) |  |   |       |  
|                                                                                              |  |                                  |        |   |                                  |   |         |                               |  |   |                           |   |  |                               |         |   |  |   |        |  
|                                                                                              |  |                                  | 24,965 |   |                                  |   | (631    | )                             |  |   | 9,398                     |   |  |                               | (2,942  | ) |  |   | (986   | )
|                                                                                              |  |                                  |        |   |                                  |   |         |                               |  |   |                           |   |  |                               |         |   |  |   |        |  
|Provision (benefit) for income taxes                                                          |  | $                                | 26,098 |   |                                  | $ | (426    | )                             |  | $ | 9,425                     |   |  | $                             | (3,157  | ) |  | $ | (1,506 | )
|                                                                                              |  |                                  |        |   |                                  |   |         |                               |  |   |                           |   |  |                               |         |   |  |   |        |  
|Earnings (loss) before income taxes                                                           |  |                                  |        |   |                                  |   |         |                               |  |   |                           |   |  |                               |         |   |  |   |        |  
|United States                                                                                 |  | $                                | 58,419 |   |                                  | $ | (44,006 | )                             |  | $ | (15,418                   | ) |  | $                             | (87,014 | ) |  | $ | (4,411 | )
|Non-U.S.                                                                                      |  |                                  | 1,603  |   |                                  |   | 404     |                               |  |   | 137                       |   |  |                               | (56     | ) |  |   | (169   | )
|                                                                                              |  |                                  |        |   |                                  |   |         |                               |  |   |                           |   |  |                               |         |   |  |   |        |  
|Total                                                                                         |  | $                                | 60,022 |   |                                  | $ | (43,602 | )                             |  | $ | (15,281                   | ) |  | $                             | (87,070 | ) |  | $ | (4,580 | )
|                                                                                              |  |                                  |        |   |                                  |   |         |                               |  |   |                           |   |  |                               |         |   |  |   |        |  
|                                                                                             
|The effective tax rate differs from the federal statutory income tax rate as explained below: | 
|                                                                                              |  |                                  |        |   |                                 
|EFFECTIVE INCOME TAX RATE                                                                     |  |                                  |        |   |                                  |   |         |                               |  |   |                           |   |  |                               |         |   |  |   |        |  
|                                                                                              |  |                                  |        |   |                                 
|Federal statutory income tax rate                                                             |  |                                  | 35.0   | % |                                  |   | 35.0    | %                             |  |   | 35.0                      | % |  |                               | 35.0    | % |  |   | 35.0   | %
|State income taxes (net of federal benefit)                                                   |  |                                  | 4.1    | % |                                  |   | -0.9    | %                             |  |   | -6.5                      | % |  |                               | 0.1     | % |  |   | -0.4   | %
|Tax effect resulting from international activities                                            |  |                                  | 0.2    | % |                                  |   | -0.5    | %                             |  |   | 1.3                       | % |  |                               | -0.1    | % |  |   | -0.4   | %
|Change in deferred tax valuation allowance                                                    |  |                                  | 0.8    | % |                                  |   | -92.8   | %                             |  |   | -86.4                     | % |  |                               | -24.4   | % |  |   | 0.0    | %
|Non-deductible expenses                                                                       |  |                                  | 1.6    | % |                                  |   | 62.1    | %                             |  |   | -5.1                      | % |  |                               | -7.0    | % |  |   | -0.2   | %
|Other                                                                                         |  |                                  | 1.8    | % |                                  |   | -1.9    | %                             |  |   | 0.0                       | % |  |                               | 0.0     | % |  |   | -1.1   | %
|                                                                                              |  |                                  |        |   |                                  |   |         |                               |  |   |                           |   |  |                               |         |   |  |   |        |  
|Effective income tax rate                                                                     |  |                                  | 43.5   | % |                                  |   | 1.0     | %                             |  |   | -61.7                     | % |  |                               | 3.6     | % |  |   | 32.9   | %
|                                                                                              |  |                                  |        |   |                                  |   |         |                               |  |   |                           |   |  |                               |         |   |  |   |        |  



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



The components of deferred tax assets and liabilities are as follows:

DEFERRED TAX ASSETS AND LIABILITIES



|                                                     |  |                  |          |   |                  |   |          |  
|---------------------------------------------------- |  | ---------------- | -------- | - | ---------------- | - | -------- | -
|                                                     |  | December 31,2006 |          |   | December 25,2005 |  
|Current                                              |  |                  |          |   |                  |   |          |  
|Accrued liabilities                                  |  |                  | 17,116   |   |                  |   | 20,084   |  
|Inventories                                          |  |                  | 3,184    |   |                  |   | 4,847    |  
|Benefits and compensation                            |  |                  | 3,346    |   |                  |   | 2,435    |  
|Restructuring accruals                               |  |                  | 92       |   |                  |   | 209      |  
|Other                                                |  |                  | 1,425    |   |                  |   | 2,039    |  
|Valuation allowance                                  |  |                  | (23,325  | ) |                  |   | (28,197  | )
|                                                     |  |                  |          |   |                  |   |          |  
|                                                     |  |                  | 1,838    |   |                  |   | 1,417    |  
|                                                     |  |                  |          |   |                  |   |          |  
|Non Current                                          |  |                  |          |   |                  |   |          |  
|Postretirement benefits                              |  | $                | 4,289    |   |                  | $ | 1,080    |  
|Accrued liabilities                                  |  |                  |         |   |                  |   | 114      |  
|Benefits and compensation                            |  |                  | 1,859    |   |                  |   | 3,385    |  
|Net operating loss carryforwards                     |  |                  | 348,552  |   |                  |   | 331,683  |  
|Federal & state tax credits                          |  |                  | 2,289    |   |                  |   | 2,539    |  
|Alternative minimum tax                              |  |                  | 2,023    |   |                  |   | 2,023    |  
|Goodwill and other intangible assets                 |  |                  | 40,592   |   |                  |   | 37,182   |  
|Indefinite-lived intangible assets                   |  |                  | (235,935 | ) |                  |   | (211,862 | )
|Plant assets                                         |  |                  | (28,079  | ) |                  |   | (22,879  | )
|Other                                                |  |                  | 1,378    |   |                  |   | 1,222    |  
|Valuation allowance                                  |  |                  | (374,675 | ) |                  |   | (357,671 | )
|                                                     |  |                  |          |   |                  |   |          |  
|                                                     |  |                  | (237,707 | ) |                  |   | (213,184 | )
|                                                     |  |                  |          |   |                  |   |          |  
|Net deferred tax asset (liability)                   |  | $                | (235,869 | ) |                  | $ | (211,767 | )
|                                                     |  |                  |          |   |                  |   |          |  
|                                                     |  |                 
|AMOUNTS RECOGNIZED IN THE CONSOLIDATED BALANCE SHEET |  |                  |          |   |                  |   |          |  
|                                                     |  |                 
|Current deferred tax assets                          |  | $                | 1,838    |   |                  | $ | 1,417    |  
|Non-current deferred tax liabilities                 |  |                  | (237,707 | ) |                  |   | (213,184 | )
|                                                     |  |                  |          |   |                  |   |          |  
|Net deferred tax asset (liability)                   |  | $                | (235,869 | ) |                  | $ | (211,767 | )
|                                                     |  |                  |          |   |                  |   |          |  

As described in Note 1, PFHC became a wholly owned subsidiary of Crunch Holding Corp. on November 25, 2003.
As described in Note 1 and Note 3, PFHC was merged with and into Aurora on March 19, 2004 with Aurora surviving the Merger. The surviving company was renamed Pinnacle Foods Group Inc. (PFGI or the Company).

SFAS No. 109 requires that a valuation allowance be established when it is more likely than not that all or a portion of deferred tax assets will not
be realized. A review of all available positive and negative evidence needs to be considered, including a companys performance, the market environment in which the company operates, the utilization of past tax credits, length of carryback and
carryforward periods, existing contracts or sales backlog that will result in future profits.

SFAS No. 109 further states that where there is
negative evidence such as cumulative losses in recent years, concluding that a valuation allowance is not required is problematical. Therefore, cumulative losses weigh heavily in the overall assessment. As a result of the Aurora Merger, management
determined that it was no longer more likely than not that the Company would be able to realize the deferred tax assets of both the Predecessor and Aurora. This conclusion was reached due to cumulative losses recognized by Aurora in preceding years.
Management intends to maintain a valuation allowance until sufficient positive evidence exists to support its reversal.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



In accordance with SFAS No. 109, deferred assets and liabilities have been recognized for the differences
between the assigned values and the tax bases of the assets and liabilities recognized in a purchase business combination. As of the March 19, 2004 business combination date, the Company established a deferred tax liability of $195.3 million,
net of valuation allowance of $292.0 million. As a result of the Armour acquisition on March 1, 2006 the company established deferred tax assets subject to a valuation allowance of $10.6 million. Therefore, in accordance with SFAS No. 109,
$302.6 million would be allocated as a reduction in goodwill upon subsequent recognition of the tax benefits associated with the deferred tax assets to which the valuation allowance applies. As of December 31, 2006, the remaining valuation
allowance that would be allocated as a reduction in goodwill upon subsequent recognition is $293.8 million. The deferred tax liability relates to the book and tax basis differences for indefinite lived intangible assets consisting of primarily
tradenames and goodwill.

The federal valuation allowance at December 31, 2006 is $340.3 million, and the state valuation allowance is $57.7 million.
The Company may record a tax benefit to its provision in subsequent periods for the recognition of tax benefits for which deferred tax valuation allowance had been recorded subsequent to the aforementioned business combination. Approximately $14.7
million of the valuation allowance recorded subsequent to the business combination will not provide a future tax provision benefit but will be recorded as a reduction in goodwill. PFHC, the Predecessor, had a valuation allowance related to state net
operating loss carryforwards and the realization of state deferred tax assets of $2.3 million as of July 31, 2003.

The Company is a loss corporation
as defined in Internal Revenue Code Section 382. As of December 31, 2006 the Company had a federal Net Operating Loss Carryover of $816.3 million of which $554.9 million existed as of the business combination date and is subject to the
Section 382 limitation. Section 382 places an annual limitation on a Companys ability to utilize loss carryovers to reduce future taxable income. It is expected that the Companys annual 382 limitation will approximate $13
15 million, which may increase or decrease pending resolution of certain tax matters. This annual limitation can affect the Companys ability to utilize other tax attributes such as tax credit carryforwards.

The Companys federal net operating losses have expiration periods from 2017 through 2026. The Company also has state tax net operating loss carryforwards
which are also limited and vary in amount by jurisdiction. State net operating losses are approximately $644.4 million with expiration periods through 2026.

Following are the changes in the deferred tax valuation allowance:



|                                    |  |                  |         |           |   |              |  |            |         |  |               |        |   |  |   |        
|----------------------------------- |  | ---------------- | ------- | --------- | - | ------------ |  | ---------- | ------- |  | ------------- | ------ | - |  | - | -------
|                                    |  | BeginningBalance |         | Additions |   | Acquisitions |  | Deductions |         |  | EndingBalance
|Successor                           |  |                  |         |           |   |              |  |            |         |  |               |        |   |  |   |        
|Fiscal year ended December 31, 2006 |  | $                | 385,868 |           | $ | 2,307        |  | $          | 10,592  |  | $             | (767   | ) |  | $ | 398,000
|Fiscal year ended December 25, 2005 |  |                  | 338,361 |           |   | 55,544       |  |            |        |  |               | (8,037 | ) |  |   | 385,868
|21 weeks ended December 26, 2004    |  |                  | 319,711 |           |   | 18,650       |  |            |        |  |               |       |   |  |   | 338,361
|36 weeks ended July 31, 2004        |  |                  | 2,738   |           |   | 27,703       |  |            | 289,270 |  |               |       |   |  |   | 319,711
|                                    |  |                  |         |           |  
|Predecessor                         |  |                  |         |           |   |              |  |            |         |  |               |        |   |  |   |        
|16 weeks ended November 24, 2003    |  | $                | 2,251   |           | $ | 487          |  | $          |        |  | $             |       |   |  | $ | 2,738  



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



|12. | Financial Instruments
|--- | ---------------------

We may utilize derivative financial
instruments to enhance our ability to manage risks, including interest rate, certain 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.

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 December 31, 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 substantially the same basis for determining the floating rate payments on the senior secured credit facilities.

These
swaps were not designated as hedges pursuant to SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. As of December 31, 2006, the fair value of the interest rate swaps was a net loss of $847. This was
recorded as a long term liability of $1,882 and a current asset of $1,035. As of December 25, 2005, the fair value of the interest rate swap contracts was a gain of $2,422, which was all recorded in other assets, net 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, are detailed below.



|                                       |  |                                  |        |             |                                  |   |        |                               |  |                           |     |                               |   |       |  |   |    
|-------------------------------------- |  | -------------------------------- | ------ | ----------- | -------------------------------- | - | ------ | ----------------------------- |  | ------------------------- | --- | ----------------------------- | - | ----- |  | - | ---
|                                       |  | Successor                        |        | Predecessor
|Interest rate swaps                    |  | Fiscal yearendedDecember 31,2006 |        |             | Fiscal yearendedDecember 25,2005 |   |        | 21 weeksendedDecember 26,2004 |  | 36 weeksendedJuly 31,2004 |     | 16 weeksendedNovember 24,2003
|Non-cash gain (loss)                   |  | $                                | (3,269 | )           |                                  | $ | (1,334 | )                             |  | $                         | 265 |                               | $ | 3,492 |  | $ | 115
|Gain (loss) realized in cash           |  |                                  | 2,382  |             |                                  |   | 6,023  |                               |  |                           |    |                               |   | 3,515 |  |   |   
|                                       |  |                                  |        |             |                                  |   |        |                               |  |                           |     |                               |   |       |  |   |    
|Net gain (loss) on interest rate swaps |  | $                                | (887   | )           |                                  | $ | 4,689  |                               |  | $                         | 265 |                               | $ | 7,007 |  | $ | 115
|                                       |  |                                  |        |             |                                  |   |        |                               |  |                           |     |                               |   |       |  |   |    

We 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 December 31, 2006, the trades in effect mature from January through June 2006 and have various notional quantities of MMBTUs per month. The Company will pay a fixed
price ranging from $7.16 to $7.69 per MMBTU, with settlements monthly. These swaps were not designed as hedges pursuant to SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



As of December 31, 2006 and December 25, 2005, the fair value of the natural gas swaps was a loss of $160
and a gain of $8, respectively. At December 31, 2006, the fair value of the gas swap is recorded in accrued liabilities. At December 25, 2005, the fair value of the gas swaps was recorded in other current assets. The related offset is
recorded as a gain and was recognized as a reduction to cost of products sold. 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, are detailed below.



|                                     |  |                                  |        |   |                                  |   |     |                               |  |   |    
|------------------------------------ |  | -------------------------------- | ------ | - | -------------------------------- | - | --- | ----------------------------- |  | - | ---
|                                     |  | Successor                       
|Natural gas swaps                    |  | Fiscal yearendedDecember 31,2006 |        |   | Fiscal yearendedDecember 25,2005 |   |     | 21 weeksendedDecember 26,2004
|Non-cash gain (loss)                 |  | $                                | (168   | ) |                                  |   | (86 | )                             |  | $ | 95 
|Gain (loss) realized in cash         |  |                                  | (1,207 | ) |                                  |   | 902 |                               |  |   | 243
|                                     |  |                                  |        |   |                                  |   |     |                               |  |   |    
|Net gain (loss) on natural gas swaps |  | $                                | (1,375 | ) |                                  | $ | 816 |                               |  | $ | 338
|                                     |  |                                  |        |   |                                  |   |     |                               |  |   |    

We 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. dollar and the Canadian dollar. Each agreement was 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. This swap was not designed as a hedge pursuant to SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities.

As of December 31, 2006, there were no outstanding foreign exchange currency contracts. As of December 25, 2005, the fair value of the remaining foreign
exchange swaps was a loss of $280, which was 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, are detailed below.



|                                                   |  |                                  |      |   |                                  |   |      |  
|-------------------------------------------------- |  | -------------------------------- | ---- | - | -------------------------------- | - | ---- | -
|                                                   |  | Successor                        |     
|Foreign Currency Exchange Swaps                    |  | Fiscal yearendedDecember 31,2006 |      |   | Fiscal yearendedDecember 25,2005 |  
|Non-cash gain (loss)                               |  | $                                | 280  |   |                                  | $ | (280 | )
|Gain (loss) realized in cash                       |  |                                  | (557 | ) |                                  |   | (66  | )
|                                                   |  |                                  |      |   |                                  |   |      |  
|Net gain (loss) on foreign currency exchange swaps |  | $                                | (277 | ) |                                  | $ | (346 | )
|                                                   |  |                                  |      |   |                                  |   |      |  

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 letters of credit as of December 31, 2006 was $7,846, which approximates fair value. As of December 31, 2006, we also utilized letters
of credit in connection with the purchase of raw materials in the amount of $1,376, 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 81/4% senior subordinated notes that are classified as long term debt on the Consolidated Balance Sheet at December 31, 2006, was approximately its carrying value.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



|13. | 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. In
December 2006, the US District Court for the District of Delaware filed its Memorandum and Order affirming both (a) the February 20, 2004 Order of the Bankruptcy Court confirming debtors First Amended Joint Reorganization Plan, and
(b) the February 27, 2004 Order of the Bankruptcy Court granting debtors motion for summary judgment and dismissing the adversary proceeding. R2 Top Hat, Ltd. has recently filed its Notice of Appeal to the 3rd Circuit Court of
Appeals and the matter is pending. It is too early to predict the outcome of the appeals. Included in the Companys accrued liabilities in the Consolidated Balance Sheet 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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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



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 parties are complying with
the Joint Discovery Schedule required by the Judge. As the Company believes no penalty will ultimately be due, no liability has been accrued at December 31, 2006.

The Company continues to discharge its effluent to the City. By letter dated February 7, 2007, the City informed the Company that its sewage facility had been taken off of restricted status by the State. 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 operations, 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 has
made an offer to settle the claim and has reserved the amount in the Consolidated Balance Sheet as of December 31, 2006. The Company believes that resolution of such matters will not have a material impact on its financial condition, results of
operations or cash flows.

Gilster Mary Lee Corporation v. Pinnacle Foods

In September 2006, Gilster Mary Lee Corporation (Gilster) sued the Company alleging that monies were due to Gilster from the Company for a warehouse/handling fee under an existing contract. While certain
of these fees are required by the contract, the calculation of the fees is the issue in dispute. Although the parties have initiated settlement discussions, it is uncertain, at this time, if any settlement is likely. The case is in the very early
stages of discovery. The Company intends to vigorously defend against the warehouse/handling fee claim, but feels that it has adequately reserved for any potential claim that may ultimately become due under the contract. 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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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



Other Matters

Operating Leases

Certain offices, distribution facilities and equipment are under operating leases expiring on various dates through
2012. Total rental expense charged to operations of the Predecessor was $952 in the 16 weeks ended November 24, 2003. Total rental expense charged to operations of the Successor was $6,077, $6,187, $1,497 and $2,539 in fiscal 2006, fiscal 2005,
the 21 weeks ended December 26, 2004 and the 36 weeks ended July 31, 2004, respectively. The minimum future rental commitments under non-cancelable leases payable over the remaining lives of these leases approximate $5,307 in 2007, $4,929
in 2008, $4,906 in 2009, $2,852 in 2010 and $1,490 in 2011 and $623 thereafter. The largest operating leases are for the corporate offices in Cherry Hill and Mountain Lakes, New Jersey. Under the terms of these lease agreements, if the leases are
terminated early, Pinnacle would be required to accelerate rental payments of approximately $9.8 million due during the remainder of the leases.



|14. | Related Party Transactions
|--- | --------------------------

Management fees

Predecessor - The Predecessor incurred monitoring and oversight fees of $367 in the 16 weeks ended November 24, 2003, which was paid to an affiliate of
HMTF, its then largest stockholder. The monitoring and oversight agreement with the affiliate of HMTF was terminated at the time of the Pinnacle Transaction.

Successor - On November 25, 2003, the Successor entered into a Management Agreement with
JPMorgan Partners, LLC (JPMP) and J.W. Childs Associates, L.P. (JWC) where JPMP and JWC provide management, advisory and other services. The agreement calls for quarterly payments of $125 to each 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 delivered to the Administrative Agent financial statements for the fiscal quarter ending March 2006. Therefore, for the fiscal year ended December 31, 2006, management fees expensed and paid to JPMP and
JWC totaled $750. There were no management fees expensed or paid during the fiscal year ended December 25, 2005. Management fees to JPMP and JWC in total included in the Consolidated Statement of Operations for the 21 weeks ended
December 26, 2004 and the 36 weeks ended July 31, 2004 were $417 and $681, respectively. In addition, the Company reimbursed JPMP and JWC for out-of-pocket expenses totaling $61, $20, $0 and $33 during fiscal 2006, fiscal 2005, the 21
weeks ended December 26, 2004 and the 36 weeks ended July 31, 2004, respectively. In connection with the Pinnacle Transaction, the Successor paid a transaction fee of $2,425 to each JPMP and JWC, in addition to $441 in fees and expenses.
In connection with the Aurora Merger, transaction fees were paid to JPMP and JWC of $1 million each, plus $119 in fees and expenses. 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, JPMP and JWC were each 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 Notes 1 and 3.

Also on
November 25, 2003, the Company entered into an agreement with CDM Capital LLC, an affiliate of CDM, 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 was included in Acquisition costs in Notes 3.

Leases and Aircraft

The Company leases office space owned by a party related to the Chairman. One office was leased through
January 15, 2004. A new office was leased beginning January 15, 2004. The new lease provides for the Company to make leasehold improvements approximating $318. The base rent for the new office is $87 annually compared to $245 annually
scheduled in the old office. Rent expense for the Successor included $104, $101 and $39 in fiscal 2006, fiscal 2005 and the 21 weeks ended December 26, 2004 for the new office and $91 in the 36 weeks ended July 31, 2004 of which $36 was
for the old office and $55 for the new office. Rent expense of the Predecessor was $71 in the 16 weeks ended November 24, 2003.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



The Company uses an aircraft owned by a company indirectly owned by the Chairman. In connection with the use of this
aircraft, the Successor paid net operating expenses of $2,750 in fiscal 2006, $2,750 in fiscal 2005, $1,146 in the 21 weeks ended December 26, 2004, and $1,543 in the 36 weeks ended July 31, 2004. The Company also incurred direct costs of
$277 in the fiscal year 2006 that was reimbursed by the company that owns the aircraft. Also, during the November 2003 financing road show, the Company paid an additional $84 for usage of the aircraft; such amount is included in deferred
financing costs in other assets in the Consolidated Balance Sheet as of July 31, 2004.

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. The total net cash paid by the Company for the settlement of foreign exchange swaps and natural gas swaps during fiscal 2006 was $1,764. The total net cash received by the Company for the settlement of interest rate swaps,
foreign exchange swaps, and natural gas swaps totaled $6,859, $243 and $3,515 during fiscal 2005, the 21 weeks ended December 26, 2004, and the 36 weeks ended July 31, 2004, respectively. See Note 12.

Debt and Interest Expense

For fiscal 2006, fiscal 2005, the 21 weeks
ended December 26, 2004 and the 36 weeks ended July 31, 2004, fees and interest expense recognized in the Consolidated Statement of Operations for the debt to the related party, JPMorgan Chase Bank, amounted to $693, $295, $148 and $362,
respectively. See Note 9.

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 $394 and $380 in fees on behalf of the Bondholder Trust in fiscal years 2006 and 2005,
respectively.

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 provided the Company consulting
services related to the integration of the Armour Business, which was acquired on March 1, 2006. The work was completed during fiscal 2006 and 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. In fiscal year 2006, PFGI incurred and paid $915 for commission to
ASM.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



|15. | Segment and Geographic Area Information
|--- | ---------------------------------------

The Companys
products and operations are managed and reported in two operating segments. The frozen foods segment consists of the following reporting units: frozen dinners and entrees (Swanson, Hungry-Man), frozen seafood (Van de Kamps,
Mrs. Pauls), frozen breakfast (Aunt Jemima), bagels (Lenders), frozen 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
fiscal year ended December 31, 2006 includes $4,760, representing the write-up of inventories to fair value at the date of the acquisition of the Armour Business. Cost of products sold for the thirty-six weeks ended July 31, 2004 includes
the write-up of inventories to fair value to the amount of $39,489 ($9,879 frozen foods and $29,610 dry foods) related to the Pinnacle transaction and the Aurora merger. Fair value is 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. All inventory items were sold subsequent to the acquisition dates. 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.



|                                          |  |                                  |           |   |                                  |   |           |                               |  |   |                           |   |  |                               |         |   |  |   |         |  
|----------------------------------------- |  | -------------------------------- | --------- | - | -------------------------------- | - | --------- | ----------------------------- |  | - | ------------------------- | - |  | ----------------------------- | ------- | - |  | - | ------- | -
|                                          |  | Successor                        |           |   | Predecessor                      |  
|                                          |  | Fiscal yearendedDecember 31,2006 |           |   | Fiscal yearendedDecember 25,2005 |   |           | 21 weeksendedDecember 26,2004 |  |   | 36 weeksendedJuly 31,2004 |   |  | 16 weeksendedNovember 24,2003 |        
|SEGMENT INFORMATION                       |  |                                  |           |   |                                  |   |           |                               |  |   |                           |   |  |                               |         |   |  |   |         |  
|                                          |  |                                  |           |   |                                 
|Net sales                                 |  |                                  |           |   |                                  |   |           |                               |  |   |                           |   |  |                               |         |   |  |   |         |  
|Frozen foods                              |  | $                                | 644,688   |   |                                  | $ | 670,700   |                               |  | $ | 271,165                   |   |  | $                             | 319,936 |   |  | $ | 118,992 |  
|Dry foods                                 |  |                                  | 797,568   |   |                                  |   | 585,035   |                               |  |   | 240,025                   |   |  |                               | 254,416 |   |  |   | 62,387  |  
|                                          |  |                                  |           |   |                                  |   |           |                               |  |   |                           |   |  |                               |         |   |  |   |         |  
|Total                                     |  | $                                | 1,442,256 |   |                                  | $ | 1,255,735 |                               |  | $ | 511,190                   |   |  | $                             | 574,352 |   |  | $ | 181,379 |  
|                                          |  |                                  |           |   |                                  |   |           |                               |  |   |                           |   |  |                               |         |   |  |   |         |  
|Earnings (loss) before interest and taxes |  |                                  |           |   |                                  |   |           |                               |  |   |                           |   |  |                               |         |   |  |   |         |  
|Frozen foods                              |  | $                                | 43,550    |   |                                  | $ | (51,655   | )                             |  | $ | (22,649                   | ) |  | $                             | (38,070 | ) |  | $ | 6,313   |  
|Dry foods                                 |  |                                  | 121,677   |   |                                  |   | 95,046    |                               |  |   | 38,480                    |   |  |                               | 6,765   |   |  |   | 9,706   |  
|Unallocated corporate expenses            |  |                                  | (19,837   | ) |                                  |   | (16,473   | )                             |  |   | (4,972                    | ) |  |                               | (29,845 | ) |  |   | (11,432 | )
|                                          |  |                                  |           |   |                                  |   |           |                               |  |   |                           |   |  |                               |         |   |  |   |         |  
|Total                                     |  | $                                | 145,390   |   |                                  | $ | 26,918    |                               |  | $ | 10,859                    |   |  | $                             | (61,150 | ) |  | $ | 4,587   |  
|                                          |  |                                  |           |   |                                  |   |           |                               |  |   |                           |   |  |                               |         |   |  |   |         |  
|Depreciation and amortization             |  |                                  |           |   |                                  |   |           |                               |  |   |                           |   |  |                               |         |   |  |   |         |  
|Frozen foods                              |  | $                                | 20,984    |   |                                  | $ | 25,125    |                               |  | $ | 10,743                    |   |  | $                             | 16,414  |   |  | $ | 4,179   |  
|Dry foods                                 |  |                                  | 21,203    |   |                                  |   | 13,963    |                               |  |   | 6,325                     |   |  |                               | 8,156   |   |  |   | 1,957   |  
|                                          |  |                                  |           |   |                                  |   |           |                               |  |   |                           |   |  |                               |         |   |  |   |         |  
|Total                                     |  | $                                | 42,187    |   |                                  | $ | 39,088    |                               |  | $ | 17,068                    |   |  | $                             | 24,570  |   |  | $ | 6,136   |  
|                                          |  |                                  |           |   |                                  |   |           |                               |  |   |                           |   |  |                               |         |   |  |   |         |  
|Capital expenditures                      |  |                                  |           |   |                                  |   |           |                               |  |   |                           |   |  |                               |         |   |  |   |         |  
|Frozen foods                              |  | $                                | 14,485    |   |                                  | $ | 25,730    |                               |  | $ | 5,340                     |   |  | $                             | 6,533   |   |  | $ | 913     |  
|Dry foods                                 |  |                                  | 11,729    |   |                                  |   | 5,327     |                               |  |   | 3,090                     |   |  |                               | 3,293   |   |  |   | 598     |  
|                                          |  |                                  |           |   |                                  |   |           |                               |  |   |                           |   |  |                               |         |   |  |   |         |  
|Total                                     |  | $                                | 26,214    |   |                                  | $ | 31,057    |                               |  | $ | 8,430                     |   |  | $                             | 9,826   |   |  | $ | 1,511   |  
|                                          |  |                                  |           |   |                                  |   |           |                               |  |   |                           |   |  |                               |         |   |  |   |         |  
|GEOGRAPHIC INFORMATION                    |  |                                  |           |   |                                  |   |           |                               |  |   |                           |   |  |                               |         |   |  |   |         |  
|                                          |  |                                  |           |   |                                 
|Net sales                                 |  |                                  |           |   |                                  |   |           |                               |  |   |                           |   |  |                               |         |   |  |   |         |  
|United States                             |  | $                                | 1,374,685 |   |                                  | $ | 1,200,797 |                               |  | $ | 492,888                   |   |  | $                             | 552,655 |   |  | $ | 171,915 |  
|Canada                                    |  |                                  | 67,571    |   |                                  |   | 54,938    |                               |  |   | 18,302                    |   |  |                               | 21,697  |   |  |   | 9,464   |  
|                                          |  |                                  |           |   |                                  |   |           |                               |  |   |                           |   |  |                               |         |   |  |   |         |  
|Total                                     |  | $                                | 1,442,256 |   |                                  | $ | 1,255,735 |                               |  | $ | 511,190                   |   |  | $                             | 574,352 |   |  | $ | 181,379 |  
|                                          |  |                                  |           |   |                                  |   |           |                               |  |   |                           |   |  |                               |         |   |  |   |         |  



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



|                       |  |                  |           |                  |   |          
|---------------------- |  | ---------------- | --------- | ---------------- | - | ---------
|                       |  | December 31,2006 |           | December 25,2005
|SEGMENT INFORMATION:   |  |                  |           |                  |   |          
|                       |  |                 
|Total Assets           |  |                  |           |                  |   |          
|Frozen foods           |  | $                | 530,948   |                  | $ | 565,266  
|Dry foods              |  |                  | 1,259,295 |                  |   | 1,069,811
|Corporate              |  |                  | 1,838     |                  |   | 1,417    
|                       |  |                  |           |                  |   |          
|Total                  |  | $                | 1,792,081 |                  | $ | 1,636,494
|                       |  |                  |           |                  |   |          
|GEOGRAPHIC INFORMATION |  |                  |           |                  |   |          
|                       |  |                 
|Long-lived assets      |  |                  |           |                  |   |          
|United States          |  | $                | 253,357   |                  | $ | 219,070  
|Canada                 |  |                  | 30        |                  |   | 31       
|                       |  |                  |           |                  |   |          
|Total                  |  | $                | 253,387   |                  | $ | 219,101  
|                       |  |                  |           |                  |   |          

Net sales to Wal-Mart Stores, Inc. were 22% in fiscal 2006, 21% in fiscal 2005, 18% in the 21 weeks ended
December 26, 2004 and 18% in fiscal 2004 of consolidated net sales. No other single customer represents over 10% of consolidated net sales in any year.



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



|16. | Quarterly Results (unaudited)
|--- | -----------------------------



|                      |  |           |         |   |           |   |         |                |  |               |         |  |             |         |   |  |   |           |  
|--------------------- |  | --------- | ------- | - | --------- | - | ------- | -------------- |  | ------------- | ------- |  | ----------- | ------- | - |  | - | --------- | -
|                      |  | March2005 |         |   | June 2005 |   |         | September 2005 |  | December 2005 |         |  | Fiscal 2005 |        
|Net sales             |  | $         | 307,837 |   |           | $ | 306,614 |                |  | $             | 294,257 |  | $           | 347,027 |   |  | $ | 1,255,735 |  
|Cost of products sold |  |           | 261,767 |   |           |   | 246,220 |                |  |               | 225,862 |  |             | 263,349 |   |  |   | 997,198   |  
|                      |  |           |         |   |          
|Net (loss) earnings   |  |           | (22,428 | ) |           |   | (2,174  | )              |  |               | 4,713   |  |             | (23,287 | ) |  |   | (43,176   | )
|                      |  |           |         |   |          
|                      |  | March2006 |         |   | June 2006 |   |         | September 2006 |  | December 2006 |         |  | Fiscal 2006 |        
|Net sales             |  | $         | 313,885 |   |           | $ | 365,714 |                |  | $             | 345,289 |  | $           | 417,368 |   |  | $ | 1,442,256 |  
|Cost of products sold |  |           | 253,893 |   |           |   | 292,723 |                |  |               | 262,774 |  |             | 313,256 |   |  |   | 1,122,646 |  
|                      |  |           |         |   |          
|Net (loss) earnings   |  |           | (6,420  | ) |           |   | 1,105   |                |  |               | 8,925   |  |             | 30,314  |   |  |   | 33,924    |  

Net earnings during fiscal 2005 and fiscal 2006 were affected by the following unusual charges:



|                                          |  |           |       |           |   |                |  |               |       |  |   |       
|----------------------------------------- |  | --------- | ----- | --------- | - | -------------- |  | ------------- | ----- |  | - | ------
|                                          |  | March2005 |       | June 2005 |   | September 2005 |  | December 2005
|Other expense (income), net (See Note 6): |  |           |       |           |   |                |  |               |       |  |   |       
|Impairment and restructuring charges (a)  |  | $         | 2,241 |           | $ | 363            |  | $             | 3,480 |  | $ | 21,194
|                                          |  |           |       |          
|Goodwill Impairment (See Note 8) (b)      |  |           |       |           |   |                |  |               |       |  | $ | 54,757
|                                          |  |           |       |          
|                                          |  | March2006 |       | June 2006 |   | September 2006 |  | December 2006
|Cost of products sold (See Note 3):       |  |           |       |           |   |                |  |               |       |  |   |       
|Write-up of inventory to fair value       |  | $         | 2,028 |           | $ | 2,542          |  | $             | 190   |  | $ |      
|                                          |  |           |       |          
|Other expense (income), net (See Note 6): |  |           |       |           |   |                |  |               |       |  |   |       
|Impairment and restructuring charges (a)  |  | $         | 451   |           | $ | 544            |  | $             | 3,013 |  | $ | 2,779 



|(a) | Impairment and restructuring charges consist of the following:
|--- | --------------------------------------------------------------



| |  |  | First quarter 2005 - $739 related to the announced closure of our Omaha frozen food facility; $640 related to the announced closure of our Erie frozen food
facility; $862 non-cash impairment charge related to our announced shutdown of the Mattoon production line
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Second quarter 2005 - $328 related to the announced closure of our Omaha frozen food facility; $35 related to the announced closure of our Erie frozen food
facility;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Third quarter 2005 - $258 related to the announced closure of our Omaha frozen food facility; $3,222 related to the announced closure of our Erie frozen food
facility;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Fourth quarter 2005 - $59 credit related to the announced closure of our Omaha frozen food facility; $1,991 related to the announced closure of our Erie frozen food
facility; and $19,262 related to the impairment of Mrs. Pauls tradename ($10,437), Van de Kamps tradename ($7,707) and Lenders tradename ($1,118)
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | First quarter 2006 - $59 related to the announced closure of our Omaha frozen food facility; $392 related to the announced closure of our Erie frozen food facility;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Second quarter 2006 - $51 related to the announced closure of our Omaha frozen food facility; $493 related to the announced closure of our Erie frozen food
facility;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Third quarter 2006 - $2,550 related to the announced closure of our Omaha frozen food facility; $463 related to the announced closure of our Erie frozen food
facility;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Fourth quarter 2006 - $32 related to the announced closure of our Omaha frozen food facility; $46 related to the announced closure of our Erie frozen food facility;
and $2,700 related to the impairment of our Aunt Jemima tradename.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | Goodwill impairment charges consist of the following:
|--- | -----------------------------------------------------



| |  |  | Fourth quarter of 2005 - $44,860 related to the Frozen Seafood reporting unit and $9,897 related to the Frozen Pizza reporting unit
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



|17. | Guarantor and Nonguarantor Financial Statements
|--- | -----------------------------------------------

In connection with the Pinnacle Transaction and Aurora Merger described in Notes 1 and 3 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) | Consolidating (a) balance sheets as of December 31, 2006 and December 25, 2005 for the Successor and (b) the related statements of operations and cash flows for
the year ended December 31, 2006, the year ended December 25, 2005, the 21 weeks ended December 26, 2004 and the 36 weeks ended July 31, 2004 for the Successor and the sixteen weeks ended November 24, 2003 for the
Predecessor.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Elimination entries necessary to consolidate the Predecessor and Successor, with their respective guarantor subsidiaries and nonguarantor subsidiary.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------

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



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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



Pinnacle Foods Group Inc.

Consolidated Balance Sheet

December 31, 2006



|                                              |  |                          |           |   |                       |   |                        |  |              |        |  |                   |          |   |  |   |           |  
|--------------------------------------------- |  | ------------------------ | --------- | - | --------------------- | - | ---------------------- |  | ------------ | ------ |  | ----------------- | -------- | - |  | - | --------- | -
|                                              |  | PinnacleFoodsGroup, Inc. |           |   | GuarantorSubsidiaries |   | NonguarantorSubsidiary |  | Eliminations |        |  | ConsolidatedTotal |         
|Current assets:                               |  |                          |           |   |                       |   |                        |  |              |        |  |                   |          |   |  |   |           |  
|Cash and cash equivalents                     |  | $                        | 2         |   |                       | $ | 12,335                 |  | $            |       |  | $                 |         |   |  | $ | 12,337    |  
|Accounts receivable, net                      |  |                          | 52,691    |   |                       |   | 28,431                 |  |              | 4,461  |  |                   |         |   |  |   | 85,583    |  
|Intercompany accounts receivable              |  |                          |          |   |                       |   | 23,148                 |  |              | 1,680  |  |                   | (24,828  | ) |  |   |          |  
|Inventories, net                              |  |                          | 94,920    |   |                       |   | 79,678                 |  |              | 3,702  |  |                   |         |   |  |   | 178,300   |  
|Other current assets                          |  |                          | 2,748     |   |                       |   | 1,716                  |  |              | 247    |  |                   | (215     | ) |  |   | 4,496     |  
|Deferred tax assets                           |  |                          |          |   |                       |   | 1,774                  |  |              | 64     |  |                   |         |   |  |   | 1,838     |  
|                                              |  |                          |           |   |                       |   |                        |  |              |        |  |                   |          |   |  |   |           |  
|Total current assets                          |  |                          | 150,361   |   |                       |   | 147,082                |  |              | 10,154 |  |                   | (25,043  | ) |  |   | 282,554   |  
|Plant assets, net                             |  |                          | 141,286   |   |                       |   | 112,071                |  |              | 30     |  |                   |         |   |  |   | 253,387   |  
|Investment in subsidiaries                    |  |                          | 369,935   |   |                       |   | 2,534                  |  |              |       |  |                   | (372,469 | ) |  |   |          |  
|Intercompany note receivable                  |  |                          | 24,986    |   |                       |   |                       |  |              |       |  |                   | (24,986  | ) |  |   |          |  
|Tradenames                                    |  |                          | 691,426   |   |                       |   | 106,156                |  |              |       |  |                   |         |   |  |   | 797,582   |  
|Other assets, net                             |  |                          | 56,298    |   |                       |   | 99                     |  |              |       |  |                   |         |   |  |   | 56,397    |  
|Goodwill                                      |  |                          | 261,748   |   |                       |   | 140,413                |  |              |       |  |                   |         |   |  |   | 402,161   |  
|                                              |  |                          |           |   |                       |   |                        |  |              |        |  |                   |          |   |  |   |           |  
|Total assets                                  |  | $                        | 1,696,040 |   |                       | $ | 508,355                |  | $            | 10,184 |  | $                 | (422,498 | ) |  | $ | 1,792,081 |  
|                                              |  |                          |           |   |                       |   |                        |  |              |        |  |                   |          |   |  |   |           |  
|Current liabilities:                          |  |                          |           |   |                       |   |                        |  |              |        |  |                   |          |   |  |   |           |  
|Current portion of long-term obligations      |  | $                        | 11        |   |                       | $ | 112                    |  | $            |       |  | $                 |         |   |  | $ | 123       |  
|Notes payable                                 |  |                          |          |   |                       |   | 210                    |  |              |       |  |                   |         |   |  |   | 210       |  
|Accounts payable                              |  |                          | 15,795    |   |                       |   | 38,270                 |  |              | 3,477  |  |                   | 1        |   |  |   | 57,543    |  
|Intercompany accounts payable                 |  |                          | 23,148    |   |                       |   | 1,680                  |  |              |       |  |                   | (24,828  | ) |  |   |          |  
|Accrued trade marketing expense               |  |                          | 24,272    |   |                       |   | 9,202                  |  |              | 3,678  |  |                   |         |   |  |   | 37,152    |  
|Accrued liabilities                           |  |                          | 51,797    |   |                       |   | 28,958                 |  |              | 495    |  |                   | (2       | ) |  |   | 81,248    |  
|Accrued income taxes                          |  |                          | 90        |   |                       |   | 1,167                  |  |              |       |  |                   | (215     | ) |  |   | 1,042     |  
|Total current liabilities                     |  |                          | 115,113   |   |                       |   | 79,599                 |  |              | 7,650  |  |                   | (25,044  | ) |  |   | 177,318   |  
|Long-term debt                                |  |                          | 920,549   |   |                       |   | 81                     |  |              |       |  |                   |         |   |  |   | 920,630   |  
|Intercompany note payable                     |  |                          |          |   |                       |   | 24,986                 |  |              |       |  |                   | (24,986  | ) |  |   |          |  
|Pension and other postretirement benefits     |  |                          | 9,804     |   |                       |   | 6,304                  |  |              |       |  |                   | 1        |   |  |   | 16,109    |  
|Other long-term liabilities                   |  |                          | 1,962     |   |                       |   |                       |  |              |       |  |                   |         |   |  |   | 1,962     |  
|Deferred tax liabilities                      |  |                          | 210,257   |   |                       |   | 27,450                 |  |              |       |  |                   |         |   |  |   | 237,707   |  
|                                              |  |                          |           |   |                       |   |                        |  |              |        |  |                   |          |   |  |   |           |  
|Total liabilities                             |  |                          | 1,257,685 |   |                       |   | 138,420                |  |              | 7,650  |  |                   | (50,029  | ) |  |   | 1,353,726 |  
|Commitments and contingencies                 |  |                          |          |   |                       |   |                       |  |              |       |  |                   |         |   |  |   |          |  
|                                              |  |                          |           |   |                      
|Shareholders equity:                         |  |                          |           |   |                       |   |                        |  |              |        |  |                   |          |   |  |   |           |  
|Pinnacle Common Stock, $.01 par value         |  |                          |           |   |                       |   |                        |  |              |        |  |                   |          |   |  |   |           |  
|Additional paid-in-capital                    |  |                          | 573,403   |   |                       |   | 347,448                |  |              | 935    |  |                   | (348,383 | ) |  |   | 573,403   |  
|Accumulated other comprehensive income (loss) |  |                          | 161       |   |                       |   | 161                    |  |              | 198    |  |                   | (359     | ) |  |   | 161       |  
|Carryover of Predecessor basis of net assets  |  |                          | (17,338   | ) |                       |   |                       |  |              |       |  |                   |         |   |  |   | (17,338   | )
|(Accumulated deficit) Retained earnings       |  |                          | (117,871  | ) |                       |   | 22,326                 |  |              | 1,401  |  |                   | (23,727  | ) |  |   | (117,871  | )
|                                              |  |                          |           |   |                       |   |                        |  |              |        |  |                   |          |   |  |   |           |  
|Total shareholders equity                    |  |                          | 438,355   |   |                       |   | 369,935                |  |              | 2,534  |  |                   | (372,469 | ) |  |   | 438,355   |  
|                                              |  |                          |           |   |                       |   |                        |  |              |        |  |                   |          |   |  |   |           |  
|Total liabilities and shareholders equity    |  | $                        | 1,696,040 |   |                       | $ | 508,355                |  | $            | 10,184 |  | $                 | (422,498 | ) |  | $ | 1,792,081 |  
|                                              |  |                          |           |   |                       |   |                        |  |              |        |  |                   |          |   |  |   |           |  



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



Pinnacle Foods Group Inc.

Consolidated 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) income |  |                          | (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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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



Pinnacle Foods Group Inc.

Consolidated Statement of Operations - Successor

For the fiscal year ended
December 31, 2006



|                                       |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |          
|-------------------------------------- |  | ------------------------ | ------- | - | --------------------- | - | ------- | ---------------------- |  | ------------ | ------ |  | ----------------- | ------- | - |  | - | ---------
|                                       |  | PinnacleFoodsGroup, Inc. |         |   | GuarantorSubsidiaries |   |         | NonguarantorSubsidiary |  | Eliminations |        |  | ConsolidatedTotal
|Net sales                              |  | $                        | 888,575 |   |                       | $ | 523,892 |                        |  | $            | 67,616 |  | $                 | (37,827 | ) |  | $ | 1,442,256
|                                       |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |          
|Costs and expenses                     |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |          
|Cost of products sold                  |  |                          | 667,953 |   |                       |   | 436,673 |                        |  |              | 55,146 |  |                   | (37,126 | ) |  |   | 1,122,646
|Marketing and selling expenses         |  |                          | 57,787  |   |                       |   | 37,379  |                        |  |              | 8,384  |  |                   |        |   |  |   | 103,550  
|Administrative expenses                |  |                          | 34,158  |   |                       |   | 16,452  |                        |  |              | 1,837  |  |                   |        |   |  |   | 52,447   
|Research and development expenses      |  |                          | 2,651   |   |                       |   | 1,386   |                        |  |              |       |  |                   |        |   |  |   | 4,037    
|Intercompany royalties                 |  |                          |        |   |                       |   |        |                        |  |              | 117    |  |                   | (117    | ) |  |   |         
|Intercompany technical service fees    |  |                          |        |   |                       |   |        |                        |  |              | 584    |  |                   | (584    | ) |  |   |         
|Other expense (income), net            |  |                          | 11,567  |   |                       |   | 2,619   |                        |  |              |       |  |                   |        |   |  |   | 14,186   
|Equity in (earnings) loss of investees |  |                          | (21,624 | ) |                       |   | (934    | )                      |  |              |       |  |                   | 22,558  |   |  |   |         
|                                       |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |          
|Total costs and expenses               |  |                          | 752,492 |   |                       |   | 493,575 |                        |  |              | 66,068 |  |                   | (15,269 | ) |  |   | 1,296,866
|                                       |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |          
|Earnings before interest and taxes     |  |                          | 136,083 |   |                       |   | 30,317  |                        |  |              | 1,548  |  |                   | (22,558 | ) |  |   | 145,390  
|Intercompany interest (income) expense |  |                          | (6,358  | ) |                       |   | 6,358   |                        |  |              |       |  |                   |        |   |  |   |         
|Interest expense                       |  |                          | 86,561  |   |                       |   | 49      |                        |  |              | 5      |  |                   |        |   |  |   | 86,615   
|Interest income                        |  |                          | 35      |   |                       |   | 1,152   |                        |  |              | 60     |  |                   |        |   |  |   | 1,247    
|                                       |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |          
|Earnings before income taxes           |  |                          | 55,915  |   |                       |   | 25,062  |                        |  |              | 1,603  |  |                   | (22,558 | ) |  |   | 60,022   
|Provision for income taxes             |  |                          | 21,991  |   |                       |   | 3,437   |                        |  |              | 670    |  |                   |        |   |  |   | 26,098   
|                                       |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |          
|Net earnings                           |  | $                        | 33,924  |   |                       | $ | 21,625  |                        |  | $            | 933    |  | $                 | (22,558 | ) |  | $ | 33,924   
|                                       |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |          



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



Pinnacle Foods Group Inc.

Consolidated Statement of Operations - Successor

For the fiscal year ended
December 25, 2005



|                                          |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |           |  
|----------------------------------------- |  | ------------------------ | ------- | - | --------------------- | - | ------- | ---------------------- |  | ------------ | ------ |  | ----------------- | ------- | - |  | - | --------- | -
|                                          |  | PinnacleFoodsGroup, Inc. |         |   | GuarantorSubsidiaries |   |         | NonguarantorSubsidiary |  | Eliminations |        |  | ConsolidatedTotal |        
|Net sales                                 |  | $                        | 697,554 |   |                       | $ | 533,662 |                        |  | $            | 54,939 |  | $                 | (30,420 | ) |  | $ | 1,255,735 |  
|                                          |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |           |  
|Costs and expenses                        |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |           |  
|Cost of products sold                     |  |                          | 531,413 |   |                       |   | 450,874 |                        |  |              | 44,422 |  |                   | (29,511 | ) |  |   | 997,198   |  
|Marketing and selling expenses            |  |                          | 55,927  |   |                       |   | 37,283  |                        |  |              | 7,949  |  |                   |        |   |  |   | 101,159   |  
|Administrative expenses                   |  |                          | 21,994  |   |                       |   | 16,969  |                        |  |              | 1,279  |  |                   |        |   |  |   | 40,242    |  
|Research and development expenses         |  |                          | 2,221   |   |                       |   | 1,404   |                        |  |              |       |  |                   |        |   |  |   | 3,625     |  
|Intercompany royalties                    |  |                          |        |   |                       |   |        |                        |  |              | 257    |  |                   | (257    | ) |  |   |          |  
|Intercompany technical service fees       |  |                          |        |   |                       |   |        |                        |  |              | 652    |  |                   | (652    | ) |  |   |          |  
|Goodwill impairment charge                |  |                          | 54,757  |   |                       |   |        |                        |  |              |       |  |                   |        |   |  |   | 54,757    |  
|Other expense (income), net               |  |                          | 30,791  |   |                       |   | 1,045   |                        |  |              |       |  |                   |        |   |  |   | 31,836    |  
|Equity in (earnings) loss of investees    |  |                          | (8,590  | ) |                       |   | (267    | )                      |  |              |       |  |                   | 8,857   |   |  |   |          |  
|                                          |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |           |  
|Total costs and expenses                  |  |                          | 688,513 |   |                       |   | 507,308 |                        |  |              | 54,559 |  |                   | (21,563 | ) |  |   | 1,228,817 |  
|                                          |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |           |  
|Earnings (loss) before interest and taxes |  |                          | 9,041   |   |                       |   | 26,354  |                        |  |              | 380    |  |                   | (8,857  | ) |  |   | 26,918    |  
|Intercompany interest (income) expense    |  |                          | (13,013 | ) |                       |   | 13,011  |                        |  |              | 2      |  |                   |        |   |  |   |          |  
|Interest expense                          |  |                          | 71,046  |   |                       |   | 58      |                        |  |              |       |  |                   |        |   |  |   | 71,104    |  
|Interest income                           |  |                          |        |   |                       |   | 557     |                        |  |              | 27     |  |                   |        |   |  |   | 584       |  
|                                          |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |           |  
|(Loss) earnings before income taxes       |  |                          | (48,992 | ) |                       |   | 13,842  |                        |  |              | 405    |  |                   | (8,857  | ) |  |   | (43,602   | )
|Provision (benefit) for income taxes      |  |                          | (5,816  | ) |                       |   | 5,252   |                        |  |              | 138    |  |                   |        |   |  |   | (426      | )
|                                          |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |           |  
|Net (loss) earnings                       |  | $                        | (43,176 | ) |                       | $ | 8,590   |                        |  | $            | 267    |  | $                 | (8,857  | ) |  | $ | (43,176   | )
|                                          |  |                          |         |   |                       |   |         |                        |  |              |        |  |                   |         |   |  |   |           |  



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



Pinnacle Foods Group Inc.

Consolidated Statement of Operations - Successor

For the 21 weeks ended
December 26, 2004



|                                       |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |         |  
|-------------------------------------- |  | ------------------------ | ------- | - | --------------------- | - | ------- | ---------------------- |  | - | ------------ | - |  | ----------------- | ------- | - |  | - | ------- | -
|                                       |  | PinnacleFoodsGroup, Inc. |         |   | GuarantorSubsidiaries |   |         | NonguarantorSubsidiary |  |   | Eliminations |   |  | ConsolidatedTotal |        
|Net sales                              |  | $                        | 278,815 |   |                       | $ | 223,801 |                        |  | $ | 18,297       |   |  | $                 | (9,723  | ) |  | $ | 511,190 |  
|                                       |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |         |  
|Costs and expenses                     |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |         |  
|Cost of products sold                  |  |                          | 222,588 |   |                       |   | 191,928 |                        |  |   | 14,832       |   |  |                   | (9,268  | ) |  |   | 420,080 |  
|Marketing and selling expenses         |  |                          | 33,643  |   |                       |   | 17,569  |                        |  |   | 2,376        |   |  |                   |         |   |  |   | 53,588  |  
|Administrative expenses                |  |                          | 8,897   |   |                       |   | 5,826   |                        |  |   | 493          |   |  |                   |         |   |  |   | 15,216  |  
|Research and development expenses      |  |                          | 866     |   |                       |   | 593     |                        |  |   |              |   |  |                   |         |   |  |   | 1,459   |  
|Intercompany royalties                 |  |                          |        |   |                       |   |        |                        |  |   | 144          |   |  |                   | (144    | ) |  |   |         |  
|Intercompany technical service fees    |  |                          |        |   |                       |   |        |                        |  |   | 311          |   |  |                   | (311    | ) |  |   |         |  
|Goodwill impairment charge             |  |                          | 2,675   |   |                       |   | 1,633   |                        |  |   |              |   |  |                   |         |   |  |   | 4,308   |  
|Other expense (income), net            |  |                          | 1,840   |   |                       |   | 3,840   |                        |  |   |              |   |  |                   |         |   |  |   | 5,680   |  
|Equity in loss (earnings) of investees |  |                          | 3,277   |   |                       |   | (338    | )                      |  |   |              |   |  |                   | (2,939  | ) |  |   |         |  
|                                       |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |         |  
|Total costs and expenses               |  |                          | 273,786 |   |                       |   | 221,051 |                        |  |   | 18,156       |   |  |                   | (12,662 | ) |  |   | 500,331 |  
|                                       |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |         |  
|Earnings before interest and taxes     |  |                          | 5,029   |   |                       |   | 2,750   |                        |  |   | 141          |   |  |                   | 2,939   |   |  |   | 10,859  |  
|Intercompany interest (income) expense |  |                          | (5,064  | ) |                       |   | 5,054   |                        |  |   | 10           |   |  |                   |         |   |  |   |         |  
|Interest expense                       |  |                          | 26,250  |   |                       |   | 10      |                        |  |   |              |   |  |                   |         |   |  |   | 26,260  |  
|Interest income                        |  |                          |        |   |                       |   | 114     |                        |  |   | 6            |   |  |                   |         |   |  |   | 120     |  
|                                       |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |         |  
|(Loss) earnings before income taxes    |  |                          | (16,157 | ) |                       |   | (2,200  | )                      |  |   | 137          |   |  |                   | 2,939   |   |  |   | (15,281 | )
|Provision (benefit) for income taxes   |  |                          | 8,549   |   |                       |   | 1,077   |                        |  |   | (201         | ) |  |                   |         |   |  |   | 9,425   |  
|                                       |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |         |  
|Net (loss) earnings                    |  | $                        | (24,706 | ) |                       | $ | (3,277  | )                      |  | $ | 338          |   |  | $                 | 2,939   |   |  | $ | (24,706 | )
|                                       |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |         |  



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



Pinnacle Foods Group Inc.

Consolidated Statement of Operations - Successor

For the 36 weeks ended
July 31, 2004



|                                       |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |         |  
|-------------------------------------- |  | ------------------------ | ------- | - | --------------------- | - | ------- | ---------------------- |  | - | ------------ | - |  | ----------------- | ------- | - |  | - | ------- | -
|                                       |  | PinnacleFoodsGroup, Inc. |         |   | GuarantorSubsidiaries |   |         | NonguarantorSubsidiary |  |   | Eliminations |   |  | ConsolidatedTotal |        
|Net sales                              |  | $                        | 183,099 |   |                       | $ | 379,223 |                        |  | $ | 21,697       |   |  | $                 | (9,667  | ) |  | $ | 574,352 |  
|                                       |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |         |  
|Costs and expenses                     |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |         |  
|Cost of products sold                  |  |                          | 166,237 |   |                       |   | 328,175 |                        |  |   | 17,664       |   |  |                   | (9,109  | ) |  |   | 502,967 |  
|Marketing and selling expenses         |  |                          | 16,450  |   |                       |   | 38,680  |                        |  |   | 2,780        |   |  |                   |        |   |  |   | 57,910  |  
|Administrative expenses                |  |                          | 8,347   |   |                       |   | 23,168  |                        |  |   | 743          |   |  |                   |        |   |  |   | 32,258  |  
|Research and development expenses      |  |                          | 552     |   |                       |   | 1,884   |                        |  |   |             |   |  |                   |        |   |  |   | 2,436   |  
|Intercompany royalties                 |  |                          |        |   |                       |   |        |                        |  |   | 207          |   |  |                   | (207    | ) |  |   |        |  
|Intercompany technical service fees    |  |                          |        |   |                       |   |        |                        |  |   | 351          |   |  |                   | (351    | ) |  |   |        |  
|Goodwill impairment charge             |  |                          | 1,835   |   |                       |   |        |                        |  |   |             |   |  |                   |        |   |  |   | 1,835   |  
|Other expense (income), net            |  |                          | 24,910  |   |                       |   | 13,186  |                        |  |   |             |   |  |                   |        |   |  |   | 38,096  |  
|Equity in loss (earnings) of investees |  |                          | 21,097  |   |                       |   | 138     |                        |  |   |             |   |  |                   | (21,235 | ) |  |   |        |  
|                                       |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |         |  
|Total costs and expenses               |  |                          | 239,428 |   |                       |   | 405,231 |                        |  |   | 21,745       |   |  |                   | (30,902 | ) |  |   | 635,502 |  
|                                       |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |         |  
|(Loss) before interest and taxes       |  |                          | (56,329 | ) |                       |   | (26,008 | )                      |  |   | (48          | ) |  |                   | 21,235  |   |  |   | (61,150 | )
|Intercompany interest (income) expense |  |                          | (5,329  | ) |                       |   | 5,311   |                        |  |   | 18           |   |  |                   |        |   |  |   |        |  
|Interest expense                       |  |                          | 26,240  |   |                       |   |        |                        |  |   |             |   |  |                   |        |   |  |   | 26,240  |  
|Interest income                        |  |                          | 88      |   |                       |   | 222     |                        |  |   | 10           |   |  |                   |        |   |  |   | 320     |  
|                                       |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |         |  
|(Loss) before income taxes             |  |                          | (77,152 | ) |                       |   | (31,097 | )                      |  |   | (56          | ) |  |                   | 21,235  |   |  |   | (87,070 | )
|Provision (benefit) for income taxes   |  |                          | 6,761   |   |                       |   | (10,000 | )                      |  |   | 82           |   |  |                   |        |   |  |   | (3,157  | )
|                                       |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |         |  
|Net (Loss)                             |  | $                        | (83,913 | ) |                       | $ | (21,097 | )                      |  | $ | (138         | ) |  | $                 | 21,235  |   |  | $ | (83,913 | )
|                                       |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |         |  



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



Pinnacle Foods Group Inc.

Consolidated Statement of Operations - Predecessor

For the 16 weeks ended
November 24, 2003



|                                          |  |                                  |        |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|----------------------------------------- |  | -------------------------------- | ------ | - | --------------------- | - | ------- | ---------------------- |  | - | ------------ | - |  | ----------------- | ------ | - |  | - | ------- | -
|                                          |  | Pinnacle FoodsHoldingCorporation |        |   | GuarantorSubsidiaries |   |         | NonguarantorSubsidiary |  |   | Eliminations |   |  | ConsolidatedTotal |       
|Net Sales                                 |  | $                                |       |   |                       | $ | 176,819 |                        |  | $ | 9,464        |   |  | $                 | (4,904 | ) |  | $ | 181,379 |  
|                                          |  |                                  |        |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Costs and expenses                        |  |                                  |        |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Cost of products sold                     |  |                                  |       |   |                       |   | 130,954 |                        |  |   | 7,862        |   |  |                   | (4,583 | ) |  |   | 134,233 |  
|Marketing and selling expenses            |  |                                  |       |   |                       |   | 23,283  |                        |  |   | 1,052        |   |  |                   |       |   |  |   | 24,335  |  
|Administrative expenses                   |  |                                  |       |   |                       |   | 9,176   |                        |  |   | 278          |   |  |                   |       |   |  |   | 9,454   |  
|Research and development expenses         |  |                                  |       |   |                       |   | 814     |                        |  |   |             |   |  |                   |       |   |  |   | 814     |  
|Intercompany royalties                    |  |                                  |       |   |                       |   |        |                        |  |   | 97           |   |  |                   | (97    | ) |  |   |        |  
|Intercompany technical service fees       |  |                                  |       |   |                       |   |        |                        |  |   | 224          |   |  |                   | (224   | ) |  |   |        |  
|Other expense (income), net               |  |                                  |       |   |                       |   | 7,838   |                        |  |   | 118          |   |  |                   |       |   |  |   | 7,956   |  
|Equity in loss (earnings) of investees    |  |                                  | 3,074  |   |                       |   | 160     |                        |  |   |             |   |  |                   | (3,234 | ) |  |   |        |  
|                                          |  |                                  |        |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Total costs and expenses                  |  |                                  | 3,074  |   |                       |   | 172,225 |                        |  |   | 9,631        |   |  |                   | (8,138 | ) |  |   | 176,792 |  
|                                          |  |                                  |        |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Earnings (loss) before interest and taxes |  |                                  | (3,074 | ) |                       |   | 4,594   |                        |  |   | (167         | ) |  |                   | 3,234  |   |  |   | 4,587   |  
|Intercompany interest (income) expense    |  |                                  |       |   |                       |   | (8      | )                      |  |   | 8            |   |  |                   |       |   |  |   |        |  
|Interest expense                          |  |                                  |       |   |                       |   | 9,310   |                        |  |   |             |   |  |                   |       |   |  |   | 9,310   |  
|Interest income                           |  |                                  |       |   |                       |   | 137     |                        |  |   | 6            |   |  |                   |       |   |  |   | 143     |  
|                                          |  |                                  |        |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|(Loss) before income taxes                |  |                                  | (3,074 | ) |                       |   | (4,571  | )                      |  |   | (169         | ) |  |                   | 3,234  |   |  |   | (4,580  | )
|(Benefit) for income taxes                |  |                                  |       |   |                       |   | (1,497  | )                      |  |   | (9           | ) |  |                   |       |   |  |   | (1,506  | )
|                                          |  |                                  |        |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Net (loss)                                |  | $                                | (3,074 | ) |                       | $ | (3,074  | )                      |  | $ | (160         | ) |  | $                 | 3,234  |   |  | $ | (3,074  | )
|                                          |  |                                  |        |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  



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##### Table of Contents

PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



Pinnacle Foods Group Inc.

Consolidating Statement of Cash Flows

For the twelve months ended
December 31, 2006



|                                                    |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |          |  
|--------------------------------------------------- |  | ------------------------ | -------- | - | --------------------- | - | ------- | ---------------------- |  | - | ------------ | - |  | ----------------- | ------- | - |  | - | -------- | -
|                                                    |  | PinnacleFoodsGroup, Inc. |          |   | GuarantorSubsidiaries |   |         | NonguarantorSubsidiary |  |   | Eliminations |   |  | ConsolidatedTotal |        
|Cash flows from operating activities                |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |          |  
|Net earnings                                        |  | $                        | 33,924   |   |                       | $ | 21,625  |                        |  | $ | 933          |   |  | $                 | (22,558 | ) |  | $ | 33,924   |  
|Non-cash charges (credits) to net earnings          |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |          |  
|Depreciation and amortization                       |  |                          | 25,661   |   |                       |   | 16,520  |                        |  |   | 6            |   |  |                   |        |   |  |   | 42,187   |  
|Restructuring and impairment charges                |  |                          | 2,980    |   |                       |   | 2,500   |                        |  |   |             |   |  |                   |        |   |  |   | 5,480    |  
|Amortization of debt acquisition costs              |  |                          | 7,424    |   |                       |   |        |                        |  |   |             |   |  |                   |        |   |  |   | 7,424    |  
|Amortization of bond premium                        |  |                          | (567     | ) |                       |   |        |                        |  |   |             |   |  |                   |        |   |  |   | (567     | )
|Change in value of financial instruments            |  |                          | 3,158    |   |                       |   |        |                        |  |   |             |   |  |                   |        |   |  |   | 3,158    |  
|Stock-based compensation charges                    |  |                          | 3,315    |   |                       |   |        |                        |  |   |             |   |  |                   |        |   |  |   | 3,315    |  
|Equity in (earnings) loss of investees              |  |                          | (21,625  | ) |                       |   | (933    | )                      |  |   |             |   |  |                   | 22,558  |   |  |   |         |  
|Postretirement healthcare benefits                  |  |                          | 1,234    |   |                       |   | (337    | )                      |  |   |             |   |  |                   |        |   |  |   | 897      |  
|Other long-term liabilities                         |  |                          | 80       |   |                       |   |        |                        |  |   |             |   |  |                   |        |   |  |   | 80       |  
|Pension expense                                     |  |                          | 508      |   |                       |   | 1,187   |                        |  |   |             |   |  |                   |        |   |  |   | 1,695    |  
|Deferred income taxes                               |  |                          | 22,692   |   |                       |   | 2,273   |                        |  |   |             |   |  |                   |        |   |  |   | 24,965   |  
|Changes in working capital, net of acquisition      |  |                          |         |   |                       |   |        |                        |  |   |             |   |  |                   |        |   |  |   |         |  
|Accounts receivable                                 |  |                          | (9,073   | ) |                       |   | (224    | )                      |  |   | (30          | ) |  |                   |        |   |  |   | (9,327   | )
|Intercompany accounts receivable/payable            |  |                          | (33,879  | ) |                       |   | 33,913  |                        |  |   | (34          | ) |  |                   |        |   |  |   |         |  
|Inventories                                         |  |                          | 9,984    |   |                       |   | 23,814  |                        |  |   | 54           |   |  |                   |        |   |  |   | 33,852   |  
|Accrued trade marketing expense                     |  |                          | 4,865    |   |                       |   | (1,423  | )                      |  |   | 729          |   |  |                   |        |   |  |   | 4,171    |  
|Accounts payable                                    |  |                          | (3,099   | ) |                       |   | 6,836   |                        |  |   | (2,184       | ) |  |                   |        |   |  |   | 1,553    |  
|Accrued liabilities                                 |  |                          | (1,977   | ) |                       |   | 9,171   |                        |  |   | (32          | ) |  |                   |        |   |  |   | 7,162    |  
|Other current assets                                |  |                          | (33      | ) |                       |   | 1,809   |                        |  |   | (182         | ) |  |                   |        |   |  |   | 1,594    |  
|                                                    |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |          |  
|Net cash provided by (used in) operating activities |  |                          | 45,572   |   |                       |   | 116,731 |                        |  |   | (740         | ) |  |                   |        |   |  |   | 161,563  |  
|                                                    |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |          |  
|Cash flows from investing activities                |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |          |  
|Payments for business acquisitions                  |  |                          | (189,208 | ) |                       |   |        |                        |  |   |             |   |  |                   |        |   |  |   | (189,208 | )
|Capital expenditures                                |  |                          | (14,718  | ) |                       |   | (11,479 | )                      |  |   | (5           | ) |  |                   |        |   |  |   | (26,202  | )
|Sale of plant assets                                |  |                          | 1,753    |   |                       |   |        |                        |  |   |             |   |  |                   |        |   |  |   | 1,753    |  
|                                                    |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |          |  
|Net cash used in investing activities               |  |                          | (202,173 | ) |                       |   | (11,479 | )                      |  |   | (5           | ) |  |                   |        |   |  |   | (213,657 | )
|                                                    |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |          |  
|Cash flows from financing activities                |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |          |  
|Change in bank overdrafts                           |  |                          |         |   |                       |   | (6,550  | )                      |  |   | 745          |   |  |                   |        |   |  |   | (5,805   | )
|Repayment of capital lease obligations              |  |                          | (10      | ) |                       |   | (145    | )                      |  |   |             |   |  |                   |        |   |  |   | (155     | )
|Equity contributions                                |  |                          | 40,663   |   |                       |   |        |                        |  |   |             |   |  |                   |        |   |  |   | 40,663   |  
|Debt acquisition costs                              |  |                          | (3,817   | ) |                       |   |        |                        |  |   |             |   |  |                   |        |   |  |   | (3,817   | )
|Proceeds from bank term loan                        |  |                          | 143,000  |   |                       |   |        |                        |  |   |             |   |  |                   |        |   |  |   | 143,000  |  
|Proceeds from notes payable borrowing               |  |                          |         |   |                       |   | 2,410   |                        |  |   |             |   |  |                   |        |   |  |   | 2,410    |  
|Repayments of notes payable                         |  |                          |         |   |                       |   | (2,384  | )                      |  |   |             |   |  |                   |        |   |  |   | (2,384   | )
|Repayments of intercompany loans                    |  |                          | 86,698   |   |                       |   | (86,698 | )                      |  |   |             |   |  |                   |        |   |  |   |         |  
|Repayments of long term obligations                 |  |                          | (110,000 | ) |                       |   |        |                        |  |   |             |   |  |                   |        |   |  |   | (110,000 | )
|                                                    |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |          |  
|Net cash provided by (used in) financing activities |  |                          | 156,534  |   |                       |   | (93,367 | )                      |  |   | 745          |   |  |                   |        |   |  |   | 63,912   |  
|                                                    |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |          |  
|Effect of exchange rate changes on cash             |  |                          |         |   |                       |   |        |                        |  |   |             |   |  |                   |        |   |  |   |         |  
|Net change in cash and cash equivalents             |  |                          | (67      | ) |                       |   | 11,885  |                        |  |   |             |   |  |                   |        |   |  |   | 11,818   |  
|Cash and cash equivalents - beginning of period     |  |                          | 69       |   |                       |   | 450     |                        |  |   |             |   |  |                   |        |   |  |   | 519      |  
|                                                    |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |          |  
|Cash and cash equivalents - end of period           |  | $                        | 2        |   |                       | $ | 12,335  |                        |  | $ |             |   |  | $                 |        |   |  | $ | 12,337   |  
|                                                    |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |          |  
|Supplemental disclosures of cash flow information:  |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |          |  
|Interest paid                                       |  | $                        | 75,692   |   |                       | $ | 85      |                        |  | $ |             |   |  | $                 |        |   |  | $ | 75,777   |  
|Interest received                                   |  |                          | 35       |   |                       |   | 1,152   |                        |  |   | 60           |   |  |                   |        |   |  |   | 1,247    |  
|Income taxes refunded (paid)                        |  |                          | 53       |   |                       |   | (45     | )                      |  |   | (1,042       | ) |  |                   |        |   |  |   | (1,034   | )
|Non-cash investing activity:                        |  |                          |          |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   |          |  
|Capital leases                                      |  |                          |         |   |                       |   | (12     | )                      |  |   |             |   |  |                   |        |   |  |   | (12      | )



109



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##### Table of Contents

PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



Pinnacle Foods Group Inc.

Consolidated Statement of Cash Flows - Successor

For the fiscal year ended
December 25, 2005



|                                                    |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|--------------------------------------------------- |  | ------------------------ | ------- | - | --------------------- | - | ------- | ---------------------- |  | - | ------------ | - |  | ----------------- | ------ | - |  | - | ------- | -
|                                                    |  | PinnacleFoodsGroup, Inc. |         |   | GuarantorSubsidiaries |   |         | NonguarantorSubsidiary |  |   | Eliminations |   |  | ConsolidatedTotal |       
|Cash flows from operating activities                |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Net (loss) earnings                                 |  | $                        | (43,176 | ) |                       | $ | 8,590   |                        |  | $ | 267          |   |  | $                 | (8,857 | ) |  | $ | (43,176 | )
|Non-cash charges (credits) to net (loss) earnings   |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Depreciation and amortization                       |  |                          | 23,310  |   |                       |   | 15,765  |                        |  |   | 13           |   |  |                   |       |   |  |   | 39,088  |  
|Restructuring and impairment charge                 |  |                          | 75,521  |   |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | 75,521  |  
|Amortization of debt acquisition costs              |  |                          | 6,334   |   |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | 6,334   |  
|Amortization of bond premium                        |  |                          | (525    | ) |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | (525    | )
|Change in value of financial instruments            |  |                          | 1,703   |   |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | 1,703   |  
|Equity in (earnings) loss of investees              |  |                          | (8,590  | ) |                       |   | (267    | )                      |  |   |             |   |  |                   | 8,857  |   |  |   |        |  
|Postretirement healthcare benefits                  |  |                          | 67      |   |                       |   | (323    | )                      |  |   |             |   |  |                   |       |   |  |   | (256    | )
|Pension expense                                     |  |                          |        |   |                       |   | 595     |                        |  |   |             |   |  |                   |       |   |  |   | 595     |  
|Deferred income taxes                               |  |                          | (8,924  | ) |                       |   | 8,346   |                        |  |   | (38          | ) |  |                   |       |   |  |   | (616    | )
|Changes in working capital                          |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Accounts receivable                                 |  |                          | (3,130  | ) |                       |   | 1,103   |                        |  |   | 420          |   |  |                   |       |   |  |   | (1,607  | )
|Intercompany accounts receivable/payable            |  |                          | 52,115  |   |                       |   | (52,959 | )                      |  |   | 844          |   |  |                   |       |   |  |   |        |  
|Inventories                                         |  |                          | 7,070   |   |                       |   | 28,297  |                        |  |   | (275         | ) |  |                   |       |   |  |   | 35,092  |  
|Accrued trade marketing expense                     |  |                          | (11,457 | ) |                       |   | (2,189  | )                      |  |   | 468          |   |  |                   |       |   |  |   | (13,178 | )
|Accounts payable                                    |  |                          | (27,117 | ) |                       |   | (7,524  | )                      |  |   | 2,567        |   |  |                   |       |   |  |   | (32,074 | )
|Other current assets and liabilities                |  |                          | (4,498  | ) |                       |   | 6,449   |                        |  |   | (4,105       | ) |  |                   |       |   |  |   | (2,154  | )
|                                                    |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Net cash provided by operating activities           |  |                          | 58,703  |   |                       |   | 5,883   |                        |  |   | 161          |   |  |                   |       |   |  |   | 64,747  |  
|                                                    |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|                                                    |  |                          |         |   |                      
|Cash flows from investing activities                |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Capital expenditures                                |  |                          | (16,746 | ) |                       |   | (14,169 | )                      |  |   | (16          | ) |  |                   |       |   |  |   | (30,931 | )
|Pinnacle merger consideration                       |  |                          | 1,595   |   |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | 1,595   |  
|Sale of plant assets                                |  |                          |        |   |                       |   | 561     |                        |  |   |             |   |  |                   |       |   |  |   | 561     |  
|                                                    |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Net cash used in investing activities               |  |                          | (15,151 | ) |                       |   | (13,608 | )                      |  |   | (16          | ) |  |                   |       |   |  |   | (28,775 | )
|                                                    |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|                                                    |  |                          |         |   |                      
|Cash flows from financing activities                |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Change in bank overdrafts                           |  |                          |        |   |                       |   | 6,549   |                        |  |   | (145         | ) |  |                   |       |   |  |   | 6,404   |  
|Repayment of capital lease obligations              |  |                          | (10     | ) |                       |   | (119    | )                      |  |   |             |   |  |                   |       |   |  |   | (129    | )
|Equity contribution to Successor                    |  |                          | 9,992   |   |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | 9,992   |  
|Successors debt acquisition costs                  |  |                          | (51     | ) |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | (51     | )
|Proceeds from Successors notes payable borrowing   |  |                          | 31,626  |   |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | 31,626  |  
|Repayments of Successors notes payable             |  |                          | (31,442 | ) |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | (31,442 | )
|Repayments of Successors long term obligations     |  |                          | (54,088 | ) |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   | (54,088 | )
|                                                    |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Net cash (used in) provided by financing activities |  |                          | (43,973 | ) |                       |   | 6,430   |                        |  |   | (145         | ) |  |                   |       |   |  |   | (37,688 | )
|                                                    |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Effect of exchange rate changes on cash             |  |                          |        |   |                       |   |        |                        |  |   |             |   |  |                   |       |   |  |   |        |  
|Net change in cash and cash equivalents             |  |                          | (421    | ) |                       |   | (1,295  | )                      |  |   |             |   |  |                   |       |   |  |   | (1,716  | )
|Cash and cash equivalents - beginning of period     |  |                          | 490     |   |                       |   | 1,745   |                        |  |   |             |   |  |                   |       |   |  |   | 2,235   |  
|                                                    |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Cash and cash equivalents - end of period           |  | $                        | 69      |   |                       | $ | 450     |                        |  | $ |             |   |  | $                 |       |   |  | $ | 519     |  
|                                                    |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Supplemental disclosures of cash flow information:  |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Interest paid                                       |  | $                        | 65,832  |   |                       | $ |        |                        |  | $ |             |   |  | $                 |       |   |  | $ | 65,832  |  
|Interest received                                   |  |                          |        |   |                       |   | 543     |                        |  |   | 27           |   |  |                   |       |   |  |   | 570     |  
|Income taxes refunded (paid)                        |  |                          |        |   |                       |   | 582     |                        |  |   | (277         | ) |  |                   |       |   |  |   | 305     |  
|Non-cash investing activity:                        |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Capital leases                                      |  |                          |        |   |                       |   | (126    | )                      |  |   |             |   |  |                   |       |   |  |   | (126    | )



110



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##### Table of Contents

PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



Pinnacle Foods Group Inc.

Consolidated Statement of Cash Flows - Successor

For the 21 weeks ended
December 26, 2004



|                                                    |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|--------------------------------------------------- |  | ------------------------ | ------- | - | --------------------- | - | ------- | ---------------------- |  | - | ------------ | - |  | ----------------- | ------ | - |  | - | ------- | -
|                                                    |  | PinnacleFoodsGroup, Inc. |         |   | GuarantorSubsidiaries |   |         | NonguarantorSubsidiary |  |   | Eliminations |   |  | ConsolidatedTotal |       
|Cash flows from operating activities                |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Net (loss) earnings                                 |  | $                        | (24,706 | ) |                       | $ | (3,277  | )                      |  | $ | 338          |   |  | $                 | 2,939  |   |  | $ | (24,706 | )
|Non-cash charges (credits) to net (loss) earnings   |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Depreciation and amortization                       |  |                          | 7,413   |   |                       |   | 9,652   |                        |  |   | 3            |   |  |                   |        |   |  |   | 17,068  |  
|Restructuring and impairment charge                 |  |                          | 2,687   |   |                       |   | 4,282   |                        |  |   |              |   |  |                   |        |   |  |   | 6,969   |  
|Amortization of debt acquisition costs              |  |                          | 1,995   |   |                       |   |        |                        |  |   |              |   |  |                   |        |   |  |   | 1,995   |  
|Amortization of bond premium                        |  |                          | (201    | ) |                       |   |        |                        |  |   |              |   |  |                   |        |   |  |   | (201    | )
|Change in value of financial instruments            |  |                          | (360    | ) |                       |   |        |                        |  |   |              |   |  |                   |        |   |  |   | (360    | )
|Equity in loss (earnings) of investees              |  |                          | 3,277   |   |                       |   | (338    | )                      |  |   |              |   |  |                   | (2,939 | ) |  |   |         |  
|Postretirement healthcare benefits                  |  |                          | 11      |   |                       |   | (1,273  | )                      |  |   |              |   |  |                   |        |   |  |   | (1,262  | )
|Pension expense                                     |  |                          |         |   |                       |   | 310     |                        |  |   |              |   |  |                   |        |   |  |   | 310     |  
|Deferred income taxes                               |  |                          | 8,450   |   |                       |   | 948     |                        |  |   |              |   |  |                   |        |   |  |   | 9,398   |  
|Changes in working capital                          |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Accounts receivable                                 |  |                          | (1,123  | ) |                       |   | (4,657  | )                      |  |   | (1,954       | ) |  |                   |        |   |  |   | (7,734  | )
|Intercompany accounts receivable/payable            |  |                          | (590    | ) |                       |   | (50     | )                      |  |   | 640          |   |  |                   |        |   |  |   |         |  
|Inventories                                         |  |                          | (1,220  | ) |                       |   | (20,712 | )                      |  |   | (1,078       | ) |  |                   |        |   |  |   | (23,010 | )
|Accrued trade marketing expense                     |  |                          | 2,730   |   |                       |   | (557    | )                      |  |   | 1,015        |   |  |                   |        |   |  |   | 3,188   |  
|Accounts payable                                    |  |                          | 13,498  |   |                       |   | 4,641   |                        |  |   | 543          |   |  |                   |        |   |  |   | 18,682  |  
|Other current assets and liabilities                |  |                          | (682    | ) |                       |   | (1,837  | )                      |  |   | (306         | ) |  |                   |        |   |  |   | (2,825  | )
|                                                    |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Net cash (used in) provided by operating activities |  |                          | 11,179  |   |                       |   | (12,868 | )                      |  |   | (799         | ) |  |                   |       |   |  |   | (2,488  | )
|                                                    |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|                                                    |  |                          |         |   |                      
|Cash flows from investing activities                |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Capital expenditures                                |  |                          | (2,758  | ) |                       |   | (5,315  | )                      |  |   |             |   |  |                   |        |   |  |   | (8,073  | )
|Pinnacle merger consideration                       |  |                          |         |   |                       |   | (130    | )                      |  |   |              |   |  |                   |        |   |  |   | (130    | )
|Aurora merger costs                                 |  |                          | (2,333  | ) |                       |   |        |                        |  |   |              |   |  |                   |        |   |  |   | (2,333  | )
|Acquisition of license                              |  |                          | (1,919  | ) |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   | (1,919  | )
|                                                    |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Net cash used in investing activities               |  |                          | (7,010  | ) |                       |   | (5,445  | )                      |  |   |             |   |  |                   |       |   |  |   | (12,455 | )
|                                                    |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|                                                    |  |                          |         |   |                      
|Cash flows from financing activities                |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Change in bank overdrafts                           |  |                          |        |   |                       |   | (16,721 | )                      |  |   | 308          |   |  |                   |        |   |  |   | (16,413 | )
|Repayment of capital lease obligations              |  |                          | (4      | ) |                       |   | (37     | )                      |  |   |              |   |  |                   |        |   |  |   | (41     | )
|Successors debt acquisition costs                  |  |                          | (2,822  | ) |                       |   |        |                        |  |   |              |   |  |                   |        |   |  |   | (2,822  | )
|Proceeds from Successors notes payable borrowings  |  |                          | 30,000  |   |                       |   |        |                        |  |   |              |   |  |                   |        |   |  |   | 30,000  |  
|Repayments of Successors notes payable             |  |                          | (30,000 | ) |                       |   |        |                        |  |   |              |   |  |                   |        |   |  |   | (30,000 | )
|Repayments of Successors long term obligations     |  |                          | (1,363  | ) |                       |   |        |                        |  |   |              |   |  |                   |        |   |  |   | (1,363  | )
|                                                    |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Net cash (used in) provided by financing activities |  |                          | (4,189  | ) |                       |   | (16,758 | )                      |  |   | 308          |   |  |                   |       |   |  |   | (20,639 | )
|                                                    |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Effect of exchange rate changes on cash             |  |                          |        |   |                       |   |        |                        |  |   | 36           |   |  |                   |       |   |  |   | 36      |  
|Net change in cash and cash equivalents             |  |                          | (20     | ) |                       |   | (35,071 | )                      |  |   | (455         | ) |  |                   |       |   |  |   | (35,546 | )
|Cash and cash equivalents - beginning of period     |  |                          | 510     |   |                       |   | 36,816  |                        |  |   | 455          |   |  |                   |        |   |  |   | 37,781  |  
|                                                    |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Cash and cash equivalents - end of period           |  | $                        | 490     |   |                       | $ | 1,745   |                        |  | $ |             |   |  | $                 |       |   |  | $ | 2,235   |  
|                                                    |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Supplemental disclosures of cash flow information:  |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Interest paid                                       |  | $                        | 23,547  |   |                       | $ |        |                        |  | $ |             |   |  | $                 |       |   |  | $ | 23,547  |  
|Interest received                                   |  |                          |        |   |                       |   | 114     |                        |  |   | 6            |   |  |                   |       |   |  |   | 120     |  
|Income taxes refunded (paid)                        |  |                          |        |   |                       |   | 627     |                        |  |   |             |   |  |                   |       |   |  |   | 627     |  
|Non-cash investing activity:                        |  |                          |         |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Capital leases                                      |  |                          |        |   |                       |   | (357    | )                      |  |   |             |   |  |                   |       |   |  |   | (357    | )



111



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##### Table of Contents

PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



Pinnacle Foods Group Inc.

Consolidated Statement of Cash Flows - Successor

For the 36 weeks ended
July 31, 2004



|                                                    |  |                           |            |   |                       |   |          |                        |  |   |              |   |  |                   |         |   |  |   |            |  
|--------------------------------------------------- |  | ------------------------- | ---------- | - | --------------------- | - | -------- | ---------------------- |  | - | ------------ | - |  | ----------------- | ------- | - |  | - | ---------- | -
|                                                    |  | PinnacleFoods Group, Inc. |            |   | GuarantorSubsidiaries |   |          | NonguarantorSubsidiary |  |   | Eliminations |   |  | ConsolidatedTotal |        
|Cash flows from operating activities                |  |                           |            |   |                       |   |          |                        |  |   |              |   |  |                   |         |   |  |   |            |  
|Net loss                                            |  | $                         | (83,913    | ) |                       | $ | (21,097  | )                      |  | $ | (138         | ) |  | $                 | 21,235  |   |  | $ | (83,913    | )
|Non-cash charges (credits) to net loss:             |  |                           |            |   |                       |   |          |                        |  |   |              |   |  |                   |         |   |  |   |            |  
|Depreciation and amortization                       |  |                           | 6,471      |   |                       |   | 18,094   |                        |  |   | 5            |   |  |                   |         |   |  |   | 24,570     |  
|Restructuring and impairment charge                 |  |                           | 6,101      |   |                       |   | 10,211   |                        |  |   |              |   |  |                   |         |   |  |   | 16,312     |  
|Amortization of debt acquisition costs              |  |                           | 2,652      |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   | 2,652      |  
|Amortization of bond premium                        |  |                           | (323       | ) |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   | (323       | )
|Change in value of financial instruments            |  |                           | (3,492     | ) |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   | (3,492     | )
|Equity related compensation charge                  |  |                           | 18,400     |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   | 18,400     |  
|Equity in loss (earnings) of investees              |  |                           | 21,097     |   |                       |   | 138      |                        |  |   |              |   |  |                   | (21,235 | ) |  |   |           |  
|Postretirement healthcare benefits                  |  |                           | 9          |   |                       |   | (602     | )                      |  |   |              |   |  |                   |         |   |  |   | (593       | )
|Pension expense                                     |  |                           |           |   |                       |   | 820      |                        |  |   |              |   |  |                   |         |   |  |   | 820        |  
|Deferred income taxes                               |  |                           | 6,761      |   |                       |   | (9,551   | )                      |  |   | (152         | ) |  |                   |         |   |  |   | (2,942     | )
|Changes in working capital                          |  |                           |            |   |                       |   |          |                        |  |   |              |   |  |                   |         |   |  |   |            |  
|Accounts receivable                                 |  |                           | 10,958     |   |                       |   | 17,978   |                        |  |   | 123          |   |  |                   |         |   |  |   | 29,059     |  
|Intercompany accounts receivable/payable            |  |                           | 51,860     |   |                       |   | (51,617  | )                      |  |   | (243         | ) |  |                   |         |   |  |   |           |  
|Inventories                                         |  |                           | (5,635     | ) |                       |   | 26,303   |                        |  |   | (185         | ) |  |                   |         |   |  |   | 20,483     |  
|Accrued trade marketing expense                     |  |                           | 641        |   |                       |   | (271     | )                      |  |   | 98           |   |  |                   |         |   |  |   | 468        |  
|Accounts payable                                    |  |                           | 22,508     |   |                       |   | 1,791    |                        |  |   | 79           |   |  |                   |         |   |  |   | 24,378     |  
|Other current assets and liabilities                |  |                           | (26,023    | ) |                       |   | 10,344   |                        |  |   | 870          |   |  |                   |         |   |  |   | (14,809    | )
|                                                    |  |                           |            |   |                       |   |          |                        |  |   |              |   |  |                   |         |   |  |   |            |  
|Net cash provided by operating activities           |  |                           | 28,072     |   |                       |   | 2,541    |                        |  |   | 457          |   |  |                   |        |   |  |   | 31,070     |  
|                                                    |  |                           |            |   |                       |   |          |                        |  |   |              |   |  |                   |         |   |  |   |            |  
|Cash flows from investing activities                |  |                           |            |   |                       |   |          |                        |  |   |              |   |  |                   |         |   |  |   |            |  
|Capital expenditures                                |  |                           | (2,668     | ) |                       |   | (7,156   | )                      |  |   | (2           | ) |  |                   |         |   |  |   | (9,826     | )
|Pinnacle merger consideration                       |  |                           | (361,062   | ) |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   | (361,062   | )
|Pinnacle merger costs                               |  |                           | (7,154     | ) |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   | (7,154     | )
|Aurora merger consideration                         |  |                           | (663,759   | ) |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   | (663,759   | )
|Aurora merger costs                                 |  |                           | (16,980    | ) |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   | (16,980    | )
|                                                    |  |                           |            |   |                       |   |          |                        |  |   |              |   |  |                   |         |   |  |   |            |  
|Net cash used in investing activities               |  |                           | (1,051,623 | ) |                       |   | (7,156   | )                      |  |   | (2           | ) |  |                   |        |   |  |   | (1,058,781 | )
|                                                    |  |                           |            |   |                       |   |          |                        |  |   |              |   |  |                   |         |   |  |   |            |  
|Cash flows from financing activities                |  |                           |            |   |                       |   |          |                        |  |   |              |   |  |                   |         |   |  |   |            |  
|Change in bank overdrafts                           |  |                           |           |   |                       |   | 11,603   |                        |  |   |              |   |  |                   |         |   |  |   | 11,603     |  
|Repayment of capital lease obligations              |  |                           | (4         | ) |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   | (4         | )
|Equity contribution to Successor                    |  |                           | 275,088    |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   | 275,088    |  
|Successors debt acquisition costs                  |  |                           | (37,766    | ) |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   | (37,766    | )
|Proceeds from Successors bond offerings            |  |                           | 400,976    |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   | 400,976    |  
|Proceeds from Successors bank term loans           |  |                           | 545,000    |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   | 545,000    |  
|Proceeds from Successors notes payable borrowings  |  |                           | 21,500     |   |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   | 21,500     |  
|Repayments of Successors notes payable             |  |                           | (21,500    | ) |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   | (21,500    | )
|Repayments of Predecessors long term obligations   |  |                           |           |   |                       |   | (175,000 | )                      |  |   |              |   |  |                   |         |   |  |   | (175,000   | )
|Repayments of Successors long term obligations     |  |                           | (1,363     | ) |                       |   |         |                        |  |   |              |   |  |                   |         |   |  |   | (1,363     | )
|Intercompany loans                                  |  |                           | (175,370   | ) |                       |   | 175,370  |                        |  |   |              |   |  |                   |         |   |  |   |           |  
|Repayments of intercompany loans                    |  |                           | 17,500     |   |                       |   | (17,500  | )                      |  |   |              |   |  |                   |         |   |  |   |           |  
|                                                    |  |                           |            |   |                       |   |          |                        |  |   |              |   |  |                   |         |   |  |   |            |  
|Net cash provided by (used in) financing activities |  |                           | 1,024,061  |   |                       |   | (5,527   | )                      |  |   |             |   |  |                   |        |   |  |   | 1,018,534  |  
|                                                    |  |                           |            |   |                       |   |          |                        |  |   |              |   |  |                   |         |   |  |   |            |  
|Effect of exchange rate changes on cash             |  |                           |           |   |                       |   |         |                        |  |   |             |   |  |                   |        |   |  |   |           |  
|Net change in cash and cash equivalents             |  |                           | 510        |   |                       |   | (10,142  | )                      |  |   | 455          |   |  |                   |        |   |  |   | (9,177     | )
|Cash and cash equivalents - beginning of period     |  |                           |           |   |                       |   | 46,958   |                        |  |   |             |   |  |                   |         |   |  |   | 46,958     |  
|                                                    |  |                           |            |   |                       |   |          |                        |  |   |              |   |  |                   |         |   |  |   |            |  
|Cash and cash equivalents - end of period           |  | $                         | 510        |   |                       | $ | 36,816   |                        |  | $ | 455          |   |  | $                 |        |   |  | $ | 37,781     |  
|                                                    |  |                           |            |   |                       |   |          |                        |  |   |              |   |  |                   |         |   |  |   |            |  
|Supplemental disclosures of cash flow information:  |  |                           |            |   |                       |   |          |                        |  |   |              |   |  |                   |         |   |  |   |            |  
|Interest paid                                       |  | $                         | 28,776     |   |                       | $ |         |                        |  | $ |             |   |  | $                 |        |   |  | $ | 28,776     |  
|Interest received                                   |  |                           | 89         |   |                       |   | 221      |                        |  |   | 10           |   |  |                   |        |   |  |   | 320        |  
|Income taxes paid                                   |  |                           |           |   |                       |   | (37      | )                      |  |   |             |   |  |                   |        |   |  |   | (37        | )
|Non-cash investing activity:                        |  |                           |            |   |                       |   |          |                        |  |   |              |   |  |                   |         |   |  |   |            |  
|Aurora merger consideration                         |  |                           | (225,120   | ) |                       |   |         |                        |  |   |             |   |  |                   |        |   |  |   | (225,120   | )
|Aurora merger costs                                 |  |                           | (4,628     | ) |                       |   |         |                        |  |   |             |   |  |                   |        |   |  |   | (4,628     | )
|Non-cash financing activity:                        |  |                           |            |   |                       |   |          |                        |  |   |              |   |  |                   |         |   |  |   |            |  
|Aurora merger equity contribution                   |  |                           | 225,120    |   |                       |   |         |                        |  |   |             |   |  |                   |        |   |  |   | 225,120    |  



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



Pinnacle Foods Group Inc.

Consolidated Statement of Cash Flows - Predecessor

For the 16 weeks ended
November 24, 2003



|                                                    |  |                                  |        |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|--------------------------------------------------- |  | -------------------------------- | ------ | - | --------------------- | - | ------- | ---------------------- |  | - | ------------ | - |  | ----------------- | ------ | - |  | - | ------- | -
|                                                    |  | Pinnacle FoodsHoldingCorporation |        |   | GuarantorSubsidiaries |   |         | NonguarantorSubsidiary |  |   | Eliminations |   |  | ConsolidatedTotal |       
|Cash flows from operating activities                |  |                                  |        |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Net loss                                            |  | $                                | (3,074 | ) |                       | $ | (3,074  | )                      |  | $ | (160         | ) |  | $                 | 3,234  |   |  | $ | (3,074  | )
|Non-cash charges (credits) to net loss              |  |                                  |        |   |                       |   |         |                        |  |   |             |   |  |                   |        |   |  |   |         |  
|Depreciation and amortization                       |  |                                  |       |   |                       |   | 6,131   |                        |  |   | 5            |   |  |                   |       |   |  |   | 6,136   |  
|Restructuring and impairment charge                 |  |                                  |       |   |                       |   | 1,262   |                        |  |   |             |   |  |                   |       |   |  |   | 1,262   |  
|Amortization of debt acquisition costs              |  |                                  |       |   |                       |   | 6,907   |                        |  |   |             |   |  |                   |       |   |  |   | 6,907   |  
|Equity related compensation charge                  |  |                                  |       |   |                       |   | 4,935   |                        |  |   |             |   |  |                   |       |   |  |   | 4,935   |  
|Equity in loss (earnings) of investees              |  |                                  | 3,074  |   |                       |   | 160     |                        |  |   |             |   |  |                   | (3,234 | ) |  |   |        |  
|Postretirement healthcare benefits                  |  |                                  |       |   |                       |   | (527    | )                      |  |   |             |   |  |                   |       |   |  |   | (527    | )
|Pension expense                                     |  |                                  |       |   |                       |   | 342     |                        |  |   |             |   |  |                   |       |   |  |   | 342     |  
|Deferred income taxes                               |  |                                  |       |   |                       |   | (986    | )                      |  |   |             |   |  |                   |       |   |  |   | (986    | )
|Changes in working capital                          |  |                                  |        |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Accounts receivable                                 |  |                                  |       |   |                       |   | (8,513  | )                      |  |   | (784         | ) |  |                   |       |   |  |   | (9,297  | )
|Intercompany accounts receivable/payable            |  |                                  |       |   |                       |   | 848     |                        |  |   | (848         | ) |  |                   |       |   |  |   |        |  
|Inventories                                         |  |                                  |       |   |                       |   | (24,561 | )                      |  |   | (727         | ) |  |                   |       |   |  |   | (25,288 | )
|Accrued trade marketing expense                     |  |                                  |       |   |                       |   | (5,506  | )                      |  |   | 691          |   |  |                   |       |   |  |   | (4,815  | )
|Accounts payable                                    |  |                                  |       |   |                       |   | 514     |                        |  |   | 765          |   |  |                   |       |   |  |   | 1,279   |  
|Other current assets and liabilities                |  |                                  |       |   |                       |   | (736    | )                      |  |   | 423          |   |  |                   |       |   |  |   | (313    | )
|                                                    |  |                                  |        |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Net cash used in operating activities               |  |                                  |       |   |                       |   | (22,804 | )                      |  |   | (635         | ) |  |                   |       |   |  |   | (23,439 | )
|                                                    |  |                                  |        |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Cash flows from investing activities                |  |                                  |        |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Capital expenditures                                |  |                                  |       |   |                       |   | (1,511  | )                      |  |   |             |   |  |                   |        |   |  |   | (1,511  | )
|                                                    |  |                                  |        |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Net cash used in investing activities               |  |                                  |       |   |                       |   | (1,511  | )                      |  |   |             |   |  |                   |       |   |  |   | (1,511  | )
|                                                    |  |                                  |        |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Cash flows from financing activities                |  |                                  |        |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Change in bank overdrafts                           |  |                                  |       |   |                       |   | (262    | )                      |  |   |             |   |  |                   |       |   |  |   | (262    | )
|Intercompany advance                                |  |                                  | 42,186 |   |                       |   | (42,186 | )                      |  |   |             |   |  |                   |       |   |  |   |        |  
|                                                    |  |                                  |        |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Net cash provided by (used in) financing activities |  |                                  | 42,186 |   |                       |   | (42,448 | )                      |  |   |             |   |  |                   |       |   |  |   | (262    | )
|                                                    |  |                                  |        |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Effect of exchange rate changes on cash             |  |                                  |       |   |                       |   |        |                        |  |   | 42           |   |  |                   |       |   |  |   | 42      |  
|Net change in cash and cash equivalents             |  |                                  | 42,186 |   |                       |   | (66,763 | )                      |  |   | (593         | ) |  |                   |       |   |  |   | (25,170 | )
|Cash and cash equivalents - beginning of period     |  |                                  |       |   |                       |   | 71,535  |                        |  |   | 593          |   |  |                   |       |   |  |   | 72,128  |  
|                                                    |  |                                  |        |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Cash and cash equivalents - end of period           |  | $                                | 42,186 |   |                       | $ | 4,772   |                        |  | $ |             |   |  | $                 |       |   |  | $ | 46,958  |  
|                                                    |  |                                  |        |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Supplemental disclosures of cash flow information:  |  |                                  |        |   |                       |   |         |                        |  |   |              |   |  |                   |        |   |  |   |         |  
|Interest paid                                       |  | $                                |       |   |                       | $ | 2,517   |                        |  | $ |             |   |  | $                 |       |   |  | $ | 2,517   |  
|Interest received                                   |  |                                  |       |   |                       |   | 143     |                        |  |   |             |   |  |                   |       |   |  |   | 143     |  
|Income taxes refunded (paid)                        |  |                                  |       |   |                       |   | 2,856   |                        |  |   | 452          |   |  |                   |       |   |  |   | 3,308   |  



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PINNACLE FOODS GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)



|18. | Subsequent Event
|--- | ----------------

Acquisition of Crunch Holding Corp. by The
Blackstone Group

On February 10, 2007, The Blackstone Group (Blackstone), through an affiliate, agreed to acquire 100% of the common
stock of Crunch Holding Corp., the Companys sole shareholder. The transaction is subject to satisfaction of customary conditions and is expected to close in the first half of 2007.



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

None.



|ITEM 9A. | 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 December 31, 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 December 31, 2006 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.



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PART III



|ITEM 10. | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
|-------- | --------------------------------------------------

The following
table sets forth certain information with respect to our executive officers, key employees and directors as of the filing date of this annual report on Form 10-K.



|                      |  |     |  |                                                                                   
|--------------------- |  | --- |  | ----------------------------------------------------------------------------------
|Name                  |  | Age |  | Position                                                                          
|C. Dean Metropoulos   |  | 60  |  | Chairman of the Board and Director                                                
|Jeffrey P. Ansell     |  | 47  |  | Chief Executive Officer                                                           
|William Toler         |  | 47  |  | President                                                                         
|N. Michael Dion       |  | 49  |  | Executive Vice President and Chief Financial Officer                              
|Michael J. Cramer     |  | 54  |  | Executive Vice President and Chief Administrative Officer                         
|Craig Steeneck        |  | 49  |  | Executive Vice President-Operations Accounting/Planning & Systems                 
|William Darkoch       |  | 56  |  | Executive Vice President-Supply Chain and Operations                              
|M. Kelley Maggs       |  | 55  |  | Senior Vice President, Secretary and General Counsel                              
|Lynne M. Misericordia |  | 43  |  | Senior Vice President, Treasurer and Assistant Secretary                          
|John F. Kroeger       |  | 51  |  | Vice President, Human Resources; Assistant General Counsel and Assistant Secretary
|Stephen P. Murray     |  | 44  |  | Director                                                                          
|Terry Peets           |  | 61  |  | Director                                                                          
|Kevin G. OBrien      |  | 41  |  | Director                                                                          
|John W. Childs        |  | 65  |  | Director                                                                          
|Adam L. Suttin        |  | 39  |  | Director                                                                          
|Raymond B. Rudy       |  | 75  |  | Director                                                                          
|David R. Jessick      |  | 53  |  | Director                                                                          
|Rajath Shourie        |  | 33  |  | Director                                                                          

C. Dean Metropouloshas served as our Chairman since March 19, 2004 and was our Chief Executive
Officer from March 19, 2004 until July 5, 2006. Prior thereto, Mr. Metropoulos held the same position with Pinnacle since its inception in 2001. Mr. Metropoulos is also Chairman and Chief Executive Officer of CDM Investor Group
LLC, a merchant banking and management firm. Some of the recent transactions for which affiliates of CDM Investor Group LLC have provided senior management and investment include Hillsdown Holdings, PLC (Premier International Foods), Mumm and
Perrier Jouet Champagnes, International Home Foods Inc., Ghirardelli Chocolates, The Morningstar Group and Stella Foods, Inc. Mr. Metropoulos began his career with GTE International, where his last position before leaving to establish his
merchant banking and management firm was Senior Vice President.

Jeffrey P. Ansell was appointed Chief Executive Officer effective July 5,
2006. Prior thereto, Mr. Ansell was a Corporate Officer at The Procter & Gamble Company (P&G), where he worked for 25 years. Most recently he was Global President of P&Gs Pet Health and Nutrition business
(IAMS) beginning in 1999 when The Iams Company was acquired by P&G. Prior to that, Mr. Ansell was Vice President, General Manager of Procter & Gambles North America Baby Care business, and General Manager of P&Gs
European Baby Care business, based in Germany. Mr. Ansell began his career in Brand Management in P&Gs Food Division in 1981, and held marketing leadership positions on brands such as Pringles, Sunny Delight and Folgers. Including pet
food, Mr. Ansell spent 18 of his 25-years at P&G in the food and beverage space.

William Tolerhas been our President since July 2005.
Prior to that, Mr. Toler held the position of Executive Vice President, Sales since March 19, 2004. Mr. Toler previously provided consulting services to Aurora and oversaw its sales department from June 2003 to March 2004.
Mr. Toler was previously President of North America for ICG Commerce, a procurement services company. Before ICG Commerce, Mr. Toler was President of Campbell Sales Company from 1995 to 2000. At Campbell Sales Company, he was responsible
for $4 billion in sales, including Campbell Soup Companys flagship soup brands Condensed, Chunky and Select; V-8 beverages; and Prego and Pace sauces. He joined Campbell Sales Company from Nabisco, where he was Vice President, Sales and
Integrated Logistics from 1992 to 1995. Prior to Nabisco, he was Vice President/National Sales Manager for Reckitt & Colman from 1989 to 1992. Mr. Toler began his career at Procter & Gamble, where he worked from 1981 to 1989;
his last responsibility at Procter & Gamble was Eastern division manager of Health and Beauty Care.



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N. Michael Dionhas been our Executive Vice President and Chief Financial Officer since March 19, 2004. Prior
thereto, Mr. Dion held the same position with Pinnacle since its inception in 2001. Mr. Dion has been affiliated with affiliates of CDM Investor Group LLC and each of the business platforms that Mr. Metropoulos and his team have
managed since 1990. Mr. Dion served as Senior Vice President and Chief Financial Officer of International Home Foods Inc. from November 1996 to October 1999. Mr. Dion is also a Certified Public Accountant.

Michael J. Cramerhas been our Executive Vice President and Chief Administrative Officer since March 19, 2004. From 1998 to 2004, Mr. Cramer served as
President and Chief Operating Officer of Southwest Sports Group, LLC, and Southwest Sports Realty, LP and as part of those duties, he served at various times as President of the Texas Rangers Baseball Club and Dallas Stars Hockey Team. Prior to
joining Southwest Sports Group in 1998, Mr. Cramer was affiliated with each of the platforms C. Dean Metropoulos managed since 1987. In that capacity he served as Executive Vice President and as a member of the Board of Directors of
International Home Foods Inc.; Executive Vice President and General Counsel of The Morningstar Group Inc. and Executive Vice President of Administration and General Counsel of Stella Foods, Inc. Prior to that time, he was engaged in the private
practice of law for several years in Wisconsin.

Craig Steeneckhas been our Executive Vice President, Operations Accounting/Planning &
Systems since June 2005. From April 2003 to June 2005, Mr. Steeneck served as Executive Vice President, Chief Financial Officer and Chief Administrative Officer of Cendant Timeshare Group in Florida. From March 2001 to April 2003,
Mr. Steeneck served as Executive Vice President and Chief Financial Officer of Resorts Condominiums International, a subsidiary of Cendant. From October 1999 to February 2001, he was the Chief Financial Officer of International Home Foods.
Mr. Steeneck is also a Certified Public Accountant in the State of New Jersey.

William Darkochhas been our Executive Vice President, Supply
Chain and Operations since August 2005. Prior to joining PFGI, Mr. Darkoch was employed with Novartis Consumer Health, Inc. from September 2004 to August 2005 where he was the Senior Vice President & Global Head of Product Supply,
Manufacturing & Logistics  OTC. Prior to that, Mr. Darkoch was employed at Reckitt Benckiser, Inc. for twenty years in various roles, the last of which was Senior Vice President-The Americas, Product Supply where he was
responsible for total product supply chain management.

M. Kelley Maggshas been our Senior Vice President, General Counsel and Secretary since
March 19, 2004. Prior thereto, Mr. Maggs held the same position with Pinnacle since its inception in 2001. He has also been associated with affiliates of CDM Investor Group LLC for the past fourteen years. Prior to his involvement with
Pinnacle, Mr. Maggs held the same position with International Home Foods Inc. from November 1996 to December 2000. From 1993 to 1996, Mr. Maggs was employed with Stella Foods, Inc. as Vice President and General Counsel. Prior to that time,
he was engaged in the private practice of law in Virginia and New York.

Lynne M. Misericordiahas been our Senior Vice President and Treasurer
since March 19, 2004. Prior thereto, Ms. Misericordia held the same position with Pinnacle since its inception in 2001. Ms. Misericordia previously held the position of Treasurer with International Home Foods Inc. from November 1996
to December 2000. Before that, Ms. Misericordia was employed by Wyeth from August 1985 to November 1996 and held various financial positions.

John
F. Kroegerhas been our Vice President, Human Resources and Assistant General Counsel since July 2004. Prior to that, Mr. Kroeger held the position of Vice President and Assistant General Counsel with Pinnacle since joining the Company in
November 2001. From January 2001 to October 2001, Mr. Kroeger was the Vice President and General Counsel of Anadigics, Inc., a NASDAQ semiconductor company. From August 1998 until December 2000, Mr. Kroeger was Vice President and Assistant
General Counsel at International Home Foods, Inc. Mr. Kroeger has also held general management and legal positions with leading companies in the chemical, pharmaceutical and petroleum-refining industries.

Stephen P. Murraybecame our director upon consummation of the Aurora Merger on March 19, 2004. Mr. Murray is President and Chief Operating Officer of
CCMP Capital and is a member of the firms Investment Committee. In addition, Mr. Murray focuses on investments in consumer, retail and services and healthcare infrastructure. CCMP Capital Advisors, LLC is a private equity firm formed in
August 2006 by the former buyout/growth equity investment team of J.P. Morgan Partners, LLC, a private equity division of JPMorgan Chase & Co. CCMP Capital is advising J.P. Morgan Partners as to its investment in the Company. Prior to his
role with CCMP, Mr. OBrien was a Partner with J.P. Morgan Partners, LLC. Currently, Mr. Murray serves on the Board of Directors for AMC Entertainment, ARAMARK Holdings Corporation, Cabelas Inc. , Generac, Jetro Holdings,
MedQuest Associates, Quiznos Subs, Strongwood Insurance, USA.NET and Warner Chilcott Corporation.



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Terry Peetsbecame our director upon consummation of the Aurora Merger on March 19, 2004. Mr. Peets is
an advisor to JPMP in its consideration of consumer segment investment opportunities. Over the past 25 years, Mr. Peets has served as Chairman of Brunos Supermarkets, Inc., Executive Vice President of Vons Grocery Company, Executive Vice
President of Ralphs Grocery Company, and President and CEO of PIA Merchandising, Inc. Mr. Peets is the Chairman of the Board and Director of World Kitchen, Inc., Vice Chairman and Director of City of Hope National Cancer Center and the Beckman
Research Institute, and a Director of Winn-Dixie Stores, Inc., Interstate Bakeries Corp. and Ruiz Foods Inc. Mr. Peets holds an M.B.A. with honors from Pepperdine University.

Kevin G. OBrienbecame our director upon consummation of the Aurora Merger on March 19, 2004. Mr. OBrien is a Managing Director of CCMP Capital Advisors, LLC, a private equity firm formed
in August 2006 by the former buyout/growth equity investment team of J.P. Morgan Partners, LLC, a private equity division of JPMorgan Chase & Co. CCMP Capital is advising J.P. Morgan Partners as to its investment in the Company. Prior to
his role with CCMP, Mr. OBrien was a Partner with J.P. Morgan Partners, LLC. Prior to joining JPMP in 2000, Mr. OBrien was a Vice President in the High Yield Capital Markets and High Yield Corporate Finance Groups at Chemical
Securities Inc. and Chase Securities Inc. since 1994. Previously, he was a commissioned officer in the U.S. Navy. Currently, he serves as a director of CareMore Health Group and National Surgical Care.

John W. Childsbecame our director upon consummation of the Aurora Merger on March 19, 2004. Mr. Childs is Chairman and CEO of JWC, which started in
July 1995. Prior to that time, he was an executive at Thomas H. Lee Company from May 1987, most recently holding the position of Senior Managing Director. Prior to that, Mr. Childs was with the Prudential Insurance Company of America where he
held various executive positions in the investment area ultimately serving as Senior Managing Director in charge of the Capital Markets Group. He is a director of SimCom Holdings, Inc., Sunny Delight Beverages Company, Sheridan Healthcare Inc. and
Esselte AB.

Adam L. Suttinbecame our director upon consummation of the Aurora Merger on March 19, 2004. Mr. Suttin has been a Partner of
JWC since January 1998 and has been with JWC since July 1995. Prior to that time, Mr. Suttin was an executive at Thomas H. Lee Company from August 1989, most recently holding the position of Associate. Mr. Suttin is a director of Advantage
Sales and Marketing, Brookstone, Inc., Coldmatic Products International, LLC, Esselte AB, The NutraSweet Company, and Sunny Delight Beverages Company.

Raymond B. Rudybecame our director upon consummation of the Aurora Merger on March 19, 2004. Mr. Rudy has been an Operating Partner of JWC since July 1995. Prior to that time, he was Deputy Chairman and Director of Snapple
Beverage Corporation from 1992 until the company was sold in 1994. From 1987 to 1989, Mr. Rudy was President of Best Foods Subsidiaries of CPC International. From 1984 to 1986, Mr. Rudy was Chairman, President and CEO of Arnold Foods
Company, Inc. He is the Chairman of Sunny Delight Beverages Company and a director of Widmer Brewing.

David R. Jessickbecame our director upon
consummation of the Aurora Merger on March 19, 2004. From December 1999 to July 2002, Mr. Jessick was Senior Executive Vice President and Chief Administrative Officer of Rite Aid Corporation. Prior to joining Rite Aid Corporation in 1999,
Mr. Jessick spent three years at Fred Meyer, Inc., with his last position being Executive Vice President, Finance and Investor Relations. Prior to joining Fred Meyer, Inc., Mr. Jessick spent 17 years with Thrifty PayLess Holdings, Inc.,
with his last position being Executive Vice President and Chief Financial Officer. Prior thereto, Mr. Jessick worked as an auditor with KPMG. Mr. Jessick received a B.B.A. degree in accounting from Boise State University. He currently
serves as the non-executive Chairman of the Board and audit committee member at Pathmark Stores, Inc., a director and audit committee chair at World Kitchen, Inc. and Dollar Financial Corp., and as a director and audit committee member of Source
Interlink Companies, Inc. and Big Five Sporting Goods Corp.

Rajath Shouriewas appointed to the board of directors on November 8, 2005.
Mr. Shourie is a Managing Director at Oaktree Capital Management LLC in the distressed debt group. He joined Oaktree in August 2002 after having spent two years at Goldman, Sachs & Co. in the Principal Investment Area. Prior
thereto, he was a management consultant at McKinsey & Company, from 1995 to 1998. Mr. Shourie is a director of Pegasus Aviation Finance Company and Sundance Cinemas LLC.



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COMMITTEES OF THE BOARD OF
DIRECTORS

Audit Committee

Our board
of directors has adopted a written charter for the audit committee. Our audit committee is responsible for (1) selecting the independent auditors, (2) approving the overall scope of the audit, (3) assisting the board of directors in
monitoring the integrity of our financial statements, the independent accountants qualifications and independence, the performance of the independent accountants and our internal audit function and our compliance with legal and regulatory
requirements, (4) annually reviewing an independent auditors report describing the auditing firms internal quality-control procedures, any material issues raised by the most recent internal quality-control review, or peer review, of
the auditing firm, (5) discussing the annual audited financial and quarterly statements with management and the independent auditor, (6) meeting separately, periodically, with management, internal auditors and the independent auditor,
(7) reviewing with the independent auditor any audit problems or difficulties and managements response, (8) handling such other matters that are specifically delegated to the audit committee by the board of directors from time to
time and (9) reporting regularly to the full board of directors.

The members of the audit committee are currently Messrs. OBrien (who is an
audit committee financial expert within the meaning of the rules and regulations of the Securities and Exchange Commission), Suttin, Peets and Jessick. Mr. OBrien is not an independent director as such term is defined under rules of the
New York Stock Exchange.

Compensation Committee

The
compensation committee reviews and approves the compensation and benefits for our employees, directors and consultants, administers our employee benefit plans, authorizes and ratifies stock option grants and other incentive arrangement and
authorizes employment and related agreements. The members of the compensation committee are currently Messrs. C.D. Metropoulos, Murray and Childs.

CODE OF ETHICS

Our employee handbook contains certain standards for ethical conduct required
of our employees. We require all employees to meet our ethical standards which include compliance with all laws while performing their job duties with high integrity and professionalism.

We have also adopted a Code of Ethics for our Chief Executive Officer, our Chief Financial Officer and our Chief Administrative Officer and all other executive officers and other key employees. This Code of Ethics is
intended to promote honest and ethical conduct, full and accurate reporting, and compliance with all applicable laws and regulations.



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|ITEM 11. | EXECUTIVE COMPENSATION
|-------- | ----------------------

COMPENSATION
DISCUSSION AND ANALYSIS



|A. | Compensation Program Objectives and Design
|-- | ------------------------------------------

The primary
objective of the Company in establishing its comprehensive compensation program is to recruit, attract, retain and properly incent high level talent to work for and ultimately add value to the Company for the benefit of its shareholders.

Each element of the overall comprehensive program (discussed in greater detail below) is intended to be competitive with similar elements offered both locally and
nationally by other like-size employers and competitors, and the elements taken together are intended to present a comprehensive competitive program to accomplish the objectives noted in the introductory paragraph.

The Company designed most of the major elements of its comprehensive compensation program by development of initial thoughts and ideas from its senior management team
consisting of its Chief Executive Officer, Executive Vice President and Chief Financial Officer, Executive Vice President and Chief Administrative Officer, Senior Vice President, Treasurer and Assistant Secretary and Senior Vice President, Secretary
and General Counsel and consultation with other members of senior management. Additional input and suggested objectives were received from representatives of its major shareholders and outside, independent service providers. Major compensation
elements are reviewed annually by senior management.

After receiving the input noted and final draft plans were developed, such plans were (and in the
case of annual bonus plans, are annually) presented to the Companys Compensation Committee. The Committee is made up of representatives of three of LLCs shareholders representatives, CCMP Capital Advisors LLC., J.W. Childs Associates
L.P. and C. Dean Metropoulos, who also serves as Chairman of the Board of Directors. Mr. Metropoulos does not participate in any discussions involving his compensation.

Comments are received, where applicable, from the Compensation Committee and ultimately adoption of the major compensation programs occurs by the Committee.

In the cases of Mr. Metropoulos who formerly was the CEO of the Company and currently serves as Chairman, and N. Michael Dion, CFO, certain elements of compensation
were granted to them by the shareholders and the Board of Directors when the present Company was formed in November of 2003. These elements include the ability to receive certain incented units of LLC, the Companys ultimate parent entity, tied
to attainment of certain returns to the shareholders as well as other elements not generally available to other executives.

The Companys
compensation program is designed to reward performance by the Companys executives which in turn creates value for the Companys shareholders. Performance is reviewed annually for both the Companys executives and the Company as a
whole. The Companys Compensation Committee reviews and approves annual compensation elements such as bonus plan attainment and the Companys full Board of Directors reviews full year earnings and management performance by the
Companys executives. The Board as a whole also approves the Companys annual budgets which include certain elements of the compensation program such as annual bonuses and annual merit increases, if any, for the Companys executives.

In short, if value is not added to the Company annually, certain of the elements of the compensation program are not paid, i.e., annual bonuses and annual
base compensation increases.

The compensation program is not intended to reward only short-term or annual performance, however. It is also intended to
reward long-term Company performance as well. Therefore, key elements of the compensation program are the employee equity programs. These will be discussed in more detail below but the intention is to create long-term value to the Companys
share price.



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|B. | Elements of Compensation
|-- | ------------------------

For the period ending
December 31, 2006, the Company had five principal elements which made up its compensation program. They are:



| |  |  | Base Salary and potential annual merit adjustment
| | - |  | -------------------------------------------------



| |  |  | Bonus Plan (MIP or Management Incentive Plan)
| | - |  | -----------------------------------------------



| |  |  | Employee equity plans known as the Stock Option Plan (SOP) and the Employee Stock Purchase Plan (SPP)
| | - |  | ---------------------------------------------------------------------------------------------------------



| |  |  | Severance, change of control and other termination-related programs
| | - |  | -------------------------------------------------------------------



| |  |  | 401K and other benefits
| | - |  | -----------------------

As noted in Section A,
above, C. Dean Metropoulos and N. Michael Dion have other equity program incentives and other elements of compensation that were enacted by the Board and its shareholders that are not available to other executives of the Company and are not noted in
the listing above.

The following is a brief discussion of each principal element of compensation.



| | (a) | Base Salary.Base salaries are set for all executive officers of the Company by the CEO of the Company with approval of the Compensation Committee. Base salaries are
intended to compensate the executive officers and all other salaried employees for their basic services performed for the Company on an annual basis. All salaried employees are paid bi-weekly in equal increments. In setting base salaries, the
Company takes into account the employees experience, the functions and responsibilities of the job, salaries for similar positions within the community and for competitive positions in the food industry generally and any other factor relevant
to that particular job. The company attempts to pay in the middle range for each job but does not limit itself to this. In determining applicable salaries, the Company also consults with outside consultants and recruiters, senior members of its
management team who have contacts and experience at other relevant companies, board members and shareholder employment related personnel. Base salaries may be adjusted annually and in certain circumstances, adjusted mid-year to deal with competitive
pressures or change in job responsibilities.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | Bonus Plan (MIP).The Company uses its MIP plans to incent its eligible employees on an annual basis. The MIP plans, together with base salary and basic benefits
(other than 401K) are considered short-term compensation programs. In setting these short-term programs the Company also considers the equity plans and their value. These equity plans or long-term plans are discussed below. The Companys MIP
plans are intended to reward executives and other eligible employees for achieving annual profit and operational goals. Generally under all three such existing programs (one for Sales personnel, one for Food Service personnel and one for all other
executives and eligible employees), the Companys EBITDA target, which is approved annually by the Board of Directors, is a major component and individual goals or MBOs account for the balance. Senior management of the Company
decides on who is eligible to participate in the MIP plans and what the terms of the plans are including what an employees bonus potential is. All jobs at the Company have grade levels attached to them and these grade levels have target bonus
levels assigned to them. The full Board of Directors must approve the bonus pool contained in the annual budget; the Compensation Committee must approve actual payment of bonuses pursuant to the MIP plans and must specifically consider and approve
three named executive officers, C. Dean Metropoulos, N. Michael Dion and Jeff Ansell, CEO. All bonuses are equal to a preset percentage of a persons salary with minimum and maximum payout if certain targets are attained. Bonuses are payable,
once approved, shortly after the Companys audit by the Companys independent accounting firm is completed but prior to March 15th of the year following the bonus year in order to prevent such payments being deferred compensation
subject to Section 409A of the Code.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | Equity Programs.The Company has two long-term incentive programs: The SOP and the SPP. The Company does not have a defined benefit pension program.
The SOP currently benefits approximately 230 salaried employees. The SOP was created in 2004 by the Board of Directors and is authorized to issue 29,600,000 options. The intention in creating and offering the plan was that eligible employees who
were to receive options under the plan would be incented side by side with the Companys shareholders to create long-term value for the Company. The strike price for the options granted originally was the equivalent of the original
investors price paid per share, i.e. $1.00. This strike price is reviewed not less than annually by the Company and was reviewed twice in the last 6 months (in July of 2006 in conjunction with the Armour acquisition and in January of 2007).
The last strike price set was $1.53. Options granted are partially vested over time and are partly based on performance. Generally options vest 2/9ths annually beginning one year from grant date and continue to vest for 3 years. The final 1/3 vests
either on a change of control or similar event, if an internal rate of return of 15% per annum is attained by our sponsors or the expiration of seven years from the original grant date, whichever occurs first. Vesting terminates upon an
employees termination but in most cases a terminated employee may purchase his vested shares within 90 days of termination.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | This feature the Company believes is useful in attracting quality people who may have to leave before a liquidation event. Such terminated employee can, if
he chooses, share in the future growth in value that he helped create. Options are granted based on recommendations of various members of senior management to an internal company option committee. The committee is comprised of C. Dean Metropoulos,
Lynne Misericordia, Senior Vice President Treasurer and Assistant Secretary and Michael J. Cramer, Executive Vice President and Chief Administrative Officer. Mr. Metropoulos pursuant to an agreement by and among the shareholders, has the sole
authority to grant options to employees of the Company (other than to himself and Mr. Dion) but has formed the options committee noted to review and approve such grants. Notwithstanding the vesting schedule noted above, when
Mr. Jeffrey P. Ansell was hired in July of 2006 to assume the Chief Executive Officer position, certain of his options, i.e., the first 2/9ths, were vested as of the date of hire with normal vesting thereafter. Further, per his agreement,
Mr. Ansell was granted 500,000 additional options which were fully vested when he purchased 500,000 shares of the Company stock in November of 2006. The second long-term incentive plan that the Company provides for its executives and other
eligible employees is the SPP. The SPP was made available to all employees who were eligible to receive options pursuant to the SOP in 2005. The eligible employees purchased 10,482,971 shares of the Company including 500,000 by Jeff Ansell, CEO
pursuant to his Employment Agreement signed in July of 2006. The Company believes that this plan allows employees to align their interests with the Companys shareholders in creating value long-term. Together, the two noted equity plans are
intended to foster long-term growth for the Company and provide a means of creating financial security for its senior executives.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | Severance, change of control and other termination related programs.The Company generally has two forms of post-termination compensationthe use of change of
control language in employment letters or agreements and basic severance plan provisions. Each of these two forms of compensation are necessary in the Companys opinion to help attract and retain qualified top quality executives. In addition,
the Company believes that it benefits from such plans as it helps to insure continuity of management. Without these plans, and in the event of a possible or actual change in control, certain executives may feel the need to find other employment
before they were forced to leave after a change of control type event. With such plans in place, the Company believes that there would be more stability with its senior executives which allows for more efficient operation of the Company and creates
additional value for the Company and its shareholders. At present, with one exception, the Company has only one type of change in control provision in its existing employment agreements and letter agreements with its various members of management.
This provision essentially provides that, unless the applicable executive is retained in his or her job following a change in control with the same or similar duties, responsibilities, compensation and location of job, the executive may terminate
his employment and receive a change of control payment. These payments range from 4 months of salary to two years of salary and bonus, as is the case for Mr. Metropoulos. The one exception allows the executive to leave upon a change in control
regardless of whether he is offered a continuing role.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Further, the Company maintains a severance plan which is intended to
be somewhere in the middle in terms of value to employees when compared against companies of similar size, location and industry type. The severance plan provides a weekly severance based upon the total years of service with the Company, with
minimums of two weeks pay for new hires and up to 4 months pay for executives at higher levels. All executives of the Company who do not have change of control provisions applicable to them are eligible for the benefits of the severance plans.



| | (e) | 401K and Other Benefits.The Company provides various other benefits and compensation related programs to executives and other salaried employees which allow it to
provide a full and comprehensive compensation package to said employees. This full package of compensation elements is key to the Companys objectives stated in Section A, above, to attract, retain and incent high quality individuals to the
Company. The elements of the Companys compensation program not otherwise discussed above are:
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (i) | A 401K program wherein the Company matches 50% of employee contributions, up to a maximum Company contribution of 3% of the employees pay (up to the I.R.S. annual covered
compensation limit);
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | Medical and dental insurance which the Company pays 70% of the premiums for;
| | ---- | ----------------------------------------------------------------------------



| | (iii) | Life and AD&D insurance paid for by the Company; and
| | ----- | ----------------------------------------------------



| | (iv) | LTD and STD insurance, again paid for by the Company.
| | ---- | -----------------------------------------------------



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In setting up and providing the plans noted above, the Company uses outside benefits 401K and outside
benefits consultants for medical and 401K plan design. Each of the outside consultants provides not less than annual advice on the plan designs for similar manufacturing companies across the United States and in the communities where the Company is
located. As with other elements of compensation, the Company strives to provide competitive benefits to attract quality executives. The benefits noted in this section generally are at the 50th percentile of all similarly situated manufacturers and
competitors with exceptions made which the Company believes necessary based on the communities where the Company is located.



| | (f) | Executive Compensation as a package of compensation elements.In summary, the Company has developed its various elements of compensation for its executives with the
view that each element complements the rest of the elements of the compensation program and, most importantly, provides a total program that will allow the Company to attain the objectives set out in Section A, above. If any of the elements were
missing, the Company does not believe it could attain the objectives noted. While the Company does not have a set policy that an incoming executive must receive a certain salary, a certain bonus amount, a certain amount of equity, etc., each of the
elements is critical to providing a competitive compensation package to executives. Therefore, while no predetermined amount is set, the Company is careful to give adequate weight to short-term compensation vs. long-term compensation and no one
decision is made with regard to one element of compensation without considering the impact upon the other elements and ultimately the objectives the Company wishes to achieve.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

SUMMARY COMPENSATION TABLE

FISCAL 2006 SUMMARY COMPENSATION TABLE



|                                                                                 |  |      |  |            |           |           |   |        |                    |  |   |                      |     |                                         |   |                          |  |   |           |  |   |         |          |  |   |          
|-------------------------------------------------------------------------------- |  | ---- |  | ---------- | --------- | --------- | - | ------ | ------------------ |  | - | -------------------- | --- | --------------------------------------- | - | ------------------------ |  | - | --------- |  | - | ------- | -------- |  | - | ---------
|Name and Principal Position                                                      |  | Year |  | Salary ($) |           | Bonus ($) |   |        | StockAwards (e)($) |  |   | Option Awards(e) ($) |     | Non-EquityIncentive PlanCompensation($) |   | All OtherCompensation($) |  |   | Total ($)
|C. Dean Metropoulos (a)Chairman of the Board and Former Chief Executive Officer  |  | 2006 |  | $          | 2,000,000 |           | $ |       |                    |  | $ | 1,202,750            | (g) |                                         | $ |                         |  | $ | 1,000,000 |  | $ | 225,890 | (h), (l) |  | $ | 4,428,640
|                                                                                 |  |      |  |            |           |           |   |       
|Jeffrey P. Ansell (b)Chief Executive Officer                                     |  | 2006 |  |            | 283,846   |           |   | 84,000 | (f)                |  |   |                     |     |                                         |   | 630,499                  |  |   | 300,000   |  |   | 6,849   | (i)      |  |   | 1,305,194
|                                                                                 |  |      |  |            |           |           |   |       
|N. Michael DionExecutive Vice President and Chief Financial Officer              |  | 2006 |  |            | 450,000   |           |   |       |                    |  |   | 120,275              | (g) |                                         |   |                         |  |   | 200,000   |  |   | 5,086   | (i)      |  |   | 775,361  
|                                                                                 |  |      |  |            |           |           |   |       
|Michael J. CramerExecutive Vice President and Chief Administrative Officer       |  | 2006 |  |            | 415,541   |           |   |       |                    |  |   |                     |     |                                         |   | 178,678                  |  |   | 272,825   |  |   | 7,428   | (i)      |  |   | 874,472  
|                                                                                 |  |      |  |            |           |           |   |       
|Craig SteeneckExecutive Vice President, Operations Accounting/Planning & Systems |  | 2006 |  |            | 367,404   |           |   |       |                    |  |   |                     |     |                                         |   | 106,656                  |  |   | 325,625   |  |   | 7,140   | (i)      |  |   | 806,825  
|                                                                                 |  |      |  |            |           |           |   |       
|William TolerPresident                                                           |  | 2006 |  |            | 405,394   |           |   |       |                    |  |   |                     |     |                                         |   | 132,132                  |  |   | 252,750   |  |   | 5,676   | (i)      |  |   | 795,952  
|                                                                                 | 
|Officers whose employment terminated during 2006:                                |  |      |  |           
|                                                                                 |  |      |  |            |           |           |   |       
|Evan Metropoulos (c)Executive Vice President                                     |  | 2006 |  |            | 17,308    |           |   |       |                    |  |   |                     |     |                                         |   |                         |  |   |          |  |   | 975,551 | (j)      |  |   | 992,859  
|                                                                                 |  |      |  |            |           |           |   |       
|David Roe (d)Executive Vice President, Marketing                                 |  | 2006 |  |            | 109,306   |           |   |       |                    |  |   |                     |     |                                         |   | 117,333                  |  |   |          |  |   | 538,292 | (k)      |  |   | 764,931  



|(a) | In addition to serving as Chairman of the Board, Mr. C.D. Metropoulos also served as Chief Executive Officer through July 5, 2006.
|--- | ----------------------------------------------------------------------------------------------------------------------------------



|(b) | Mr. Ansell was appointed Chief Executive Officer on July 5, 2006.
|--- | -----------------------------------------------------------------



|(c) | Mr. E. Metropoulos was terminated without cause effective January 9, 2006.
|--- | --------------------------------------------------------------------------



|(d) | Mr. Roe was terminated without cause effective April 19, 2006.
|--- | --------------------------------------------------------------



|(e) | Stock Awards and Stock Option Grants were valued in accordance with Statement of Financial Accounting Standards (SFAS) No. 123R. The assumptions used in the
valuation are discussed in Note 5 in the Companys Consolidated Financial Statements for the year ended December 31, 2006.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(f) | At the start of employment, Mr. Ansell received a $60,000 sign-on bonus as well as a $24,000 relocation bonus.
|--- | --------------------------------------------------------------------------------------------------------------



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|(g) | In connection with the financing and acquisition of the Armour Foods Business, Mr. C.D. Metropoulos and Mr. Dion, together with our other shareholders, purchased 39,600
Class A Units of LLC, PFGIs ultimate parent, for $39.6 million. In return for the investment in Class A units, Mr. C.D. Metropoulos and Mr. Dion also received 2,926.32 fully vested Class C, 2,238.25 fully vested Class D and
2,356.05 fully vested Class E units at a discounted price of $400,000. The Class C, D and E units were valued at $1,815,000. Accordingly, the Company recorded a compensation charge of $1,415,000. Mr. C.D. Metropoulos and Mr. Dion received
85% and 8.5%, respectively, of the units granted to CDM. The remaining 6.5% of the units were granted to an individual, who is not an employee of the Company.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(h) | For Mr. C.D. Metropoulos, All other compensation includes items provided under his employment agreement with Pinnacle. For 2006, All other compensation
includes the following: $144,602 for accounting and tax services provided for Mr. C.D. Metropoulos, $40,250 for personal use of vehicles that we provided, $32,062 for club dues, contributions made by the Company to Mr. C.D.
Metropoulos 401(k) account and group life insurance in excess of $50,000.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(i) | For Messrs. Ansell, Dion, Steeneck, Cramer and Toler, All other compensation for 2006 includes contributions made by the Company to the individuals 401(k) accounts
and group life insurance in excess of $50,000.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(j) | For Mr. E. Metropoulos, All other compensation includes a severance benefit of $975,000, which was paid upon termination pursuant to his amended employment
agreement, as well as contributions made by the Company to Mr. E. Metropoulos 401(k) account and group life insurance in excess of $50,000.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(k) | For Mr. Roe, All other compensation includes a severance benefit of $514,500, which was paid upon termination pursuant to his letter of employment, as well as
contributions made by the Company to Mr. Roes 401(k) account and group life insurance in excess of $50,000.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(l) | In accordance with Section 2.3(b) of the Amended and Restated Members Agreement for LLC dated March 19, 2004, so long as Mr. C.D. Metropoulos is the Management
Manager, he shall be entitled to determine the payment of annual compensation to, and the reimbursement of expenses for office space, furniture, supplies, administration, telecommunications and other customary provisions and travel (including costs
with respect to airplane) incurred by any of the CDM Executives (which includes Mr. Dion) (provided, that Mr. C.D. Metropoulos shall not be entitled to determine the amount of his annual compensation) in an amount not to exceed $8.0
million in any fiscal year.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

GRANTS OF PLAN-BASED AWARDS
TABLE



|                    |  |                                          |  |                                                             |   |  |                                                                   |  |                                              |                  |                                  |      |                                                    |  |   |                          
|------------------- |  | ---------------------------------------- |  | ----------------------------------------------------------- | - |  | ----------------------------------------------------------------- |  | -------------------------------------------- | ---------------- | -------------------------------- | ---- | -------------------------------------------------- |  | - | -------------------------
|Name                |  | GrantDate                                |  | All Other StockAwards: Numberof Shares of Stockor Units (#) |   |  | All Other OptionAwards: Number ofSecurities UnderlyingOptions (#) |  | Exercise or BasePrice of OptionAwards ($/sh) |                  | Closing Priceon Grant Date($/sh) |      | Grant Date FairValue of Stock andOption Awards ($)
|C. Dean Metropoulos |  | 03/01/2006                               |  | (a                                                          | ) |  |                                                                  |  |                                              |                 |                                  |      |                                                    |  |   |                          
|                    |  |                                          |  |                                                             |   | 
|Jeffrey P. Ansell   |  | 07/05/200611/10/2006                     |  |                                                            |   |  | 3,500,000500,000                                                  |  | $$                                           | 1.001.00         |                                  | $$   | 1.001.00                                           |  | $ | 1,330,000190,000         
|                    |  |                                          |  |                                                             |   | 
|N. Michael Dion     |  | 03/01/2006                               |  | (a                                                          | ) |  |                                                                  |  |                                              |                 |                                  |      |                                                    |  |   |                          
|                    |  |                                          |  |                                                             |   | 
|William Toler       |  | 10/15/2006                               |  |                                                            |   |  | 175,000                                                           |  | $                                            | 1.00             |                                  | $    | 1.00                                               |  |   | 66,500                   
|                    |  |                                          |  |                                                             |   | 
|Craig Steeneck      |  | 01/15/200604/15/200607/15/200610/15/2006 |  |                                                            |   |  | 500,00075,00075,00050,000                                         |  | $$$$                                         | 1.001.001.001.00 |                                  | $$$$ | 1.001.001.001.00                                   |  |   | 190,00028,50028,50019,000
|                    |  |                                          |  |                                                             |   | 
|Michael J. Cramer   |  | 10/15/2006                               |  |                                                            |   |  | 50,000                                                            |  | $                                            | 1.00             |                                  | $    | 1.00                                               |  |   | 19,000                   



|(a) | In connection with the financing and acquisition of the Armour Foods Business, Mr. C.D. Metropoulos and Mr. Dion, together with our other shareholders, purchased 39,600
Class A Units of LLC, PFGIs ultimate parent, for $39.6 million. In return for the investment in Class A units, Mr. C.D. Metropoulos and Mr. Dion also received 2,926.32 fully vested Class C, 2,238.25 fully vested Class D and
2,356.05 fully vested Class E units at a discounted price of $400,000. The Class C, D and E units were valued at $1,815,000. Accordingly, the Company recorded a compensation charge of $1,415,000. Mr. C.D. Metropoulos and Mr. Dion received
85% and 8.5%, respectively, of the units granted to CDM. The remaining 6.5% of the units were granted to an individual, who is not an employee of the Company.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Material Terms of Employment Agreements

C. Dean Metropoulos

The material terms of Mr. Metropoulos employment agreement with the Company include
an annual base salary of $2,000,000. In addition, Mr. Metropoulos is eligible for an annual bonus of up to $1,000,000. During Mr. Metropoulos employment, the Company will provide to him the use of a company paid vehicle, country club
membership, income tax and accounting services, office rent and secretarial support. Mr. Metropoulos employment agreement contains provisions for a post-employment payment in certain instances, which is described more fully later in this
section.

If it is determined that any payment to Mr. Metropoulos would be subject to any tax, other than income tax (Excise Tax), then
the Company shall promptly pay to Mr. Metropoulos an additional payment (Gross-up Payment) in an amount such that he retains, after payment of all taxes and all interest and penalties with respect thereto, an amount of the Gross-up
Payment equal to the Excess Tax imposed upon the payment. Notwithstanding, in connection with the acquisition of Crunch Holding Corp. by Peak Holdings, Mr. Metropoulos entered into an amendment to his employment agreement in which he agreed to waive
his rights to any gross-up payment payable in connection with the consummation of the acquisition by Peak Holdings. Mr. Metropoulos employment agreement expires in November 2007.

In addition to Mr. Metropoulos employment agreement and in accordance with Section 2.3(b) of the Amended and Restated Members Agreement for LLC
dated March 19, 2004, so long as Mr. Metropoulos is the Management Manager, he shall be entitled to determine the payment of annual compensation to, and the reimbursement of expenses for office space, furniture, supplies, administration,
telecommunications and other customary provisions and travel (including costs with respect to airplane) incurred by any of the CDM Executives (which includes Mr. Dion) (provided, that Mr. C.D. Metropoulos shall not be entitled to determine
the amount of his annual compensation) in an amount not to exceed $8.0 million in any fiscal year.

Jeffrey P. Ansell

The material terms of Mr. Ansells employment agreement with the Company include an annual base salary of $600,000 (Annual Base Salary). In
addition, Mr. Ansell is eligible for an annual bonus of up to 100% of his Annual Base Salary upon the achievement of target performance criteria as established by Pinnacles Compensation Committee (Target Bonus).
Mr. Ansell shall also be entitled to receive an additional annual bonus of up to 50% of his Annual Base Salary based upon the achievement of additional performance criteria beyond the criteria set for the Target Bonus, with the additional
criteria also to be established by Pinnacles Compensation Committee (Stretch Bonus).

Mr. Ansell received a signing bonus of $60,000
and is entitled to an anniversary bonus of $60,000 payable one year from the date his employment commences. Upon Mr. Ansells employment with the Company, he received a grant of 3.5 million stock options (the Initial
Grant) pursuant to the terms and conditions of the 2004 Stock Option Plan (the Option Plan). The options were granted with an exercise price of $1.00 per share and, except as mentioned below, will generally be subject to the terms
and conditions of the Option Plan. The Initial Grant shall be as of the date employment commences and shall vest as follows: 2/9th vesting upon the date employment commences, 2/9th vesting on the 1st anniversary of employment, 2/9th on the second
anniversary and all other vesting per the Option Plan. In addition, Mr. Ansell will receive an additional grant of stock options (not to exceed 500,000) pursuant to the Option Plan in such number of stock options as equals the number of shares
of common stock that he purchases under the 2004 Employee Stock Purchase Plan, all of which vest immediately. Mr. Ansell purchased 500,000 shares of common stock under the 2004 Stock Purchase Plan in November 2006.

N. Michael Dion

The material terms of Mr. Dions
employment agreement with the Company include an annual base salary of $450,000. In addition, Mr. Dion is eligible for an annual target bonus of up to $200,000. Mr. Dions employment agreement contains provisions for a post-employment
payment in certain instances, which is described more fully later in this section.

If it is determined that any payment to Mr. Dion would be subject
to any tax, other than income tax (Excise Tax), then the Company shall promptly pay to Mr. Dion an additional payment (Gross-up Payment) in an amount such that he retains, after payment of all taxes and all interest and
penalties with respect thereto, an amount of the Gross-up Payment equal to the Excess Tax imposed upon the payment. Mr. Dions employment agreement expires in November 2007.



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Craig Steeneck

The
material terms of Mr. Steenecks employment arrangement with the Company include an initial annual base salary of $362,500, which is subject to an annual review by the Company. Subsequently, Mr. Steenecks annual base salary has
been increased to $367,500. In addition, Mr. Steeneck is eligible for a target bonus of 75% (100% maximum) of his base salary. Mr. Steenecks employment arrangement contains provisions for a post-employment payment in certain
instances, which is described more fully later in this section.

At the inception of employment, Mr. Steenecks arrangement entitled him to
receive 1,000,000 options to acquire shares of common stock of Crunch Holding Corp. Additionally, the arrangement stipulated additional option grants of 500,000, 75,000 and 75,000 on or around December 31, 2005, March 31, 2006 and
June 20, 2006, respectively. Mr. Steeneck also received 50,000 options on October 15, 2006.

William Toler

The material terms of Mr. Tolers employment arrangement with the Company include an initial annual base salary of $350,000, which is subject to an annual
review by the Company. Subsequently, Mr. Tolers annual base salary has been increased to $405,500. In addition, Mr. Toler is eligible for a target bonus of 50% (100% maximum) of his base salary. Mr. Tolers employment
arrangement contains provisions for a post-employment payment in certain instances, which is described more fully later in this section.

Mr. Tolers employment arrangement entitled him to receive options to acquire shares of common stock of Crunch Holding Corp. in an amount comparable to other senior executives at his level in the Company.

Michael J. Cramer

The material terms of Mr. Cramers
employment arrangement with the Company include an annual base salary of $415,650, which is subject to an annual review by the Company. In addition, Mr. Cramer is eligible for a target bonus of 50% (100% maximum) of his base salary.

Post-Termination Payments Included in Summary Compensation Table

On January 9, 2006, the amended employment agreement of Evan Metropoulos was terminated. Such termination was deemed to be without Cause (as such term is defined in the amended employment agreement). Pursuant to the amended employment
agreement, Mr. Metropoulos was entitled to a severance benefit of 150% of his annual base compensation at the time of termination (as such term is defined in the amended employment agreement). Additionally, on April 19, 2006, David Roe was
terminated. Pursuant to his employment arrangement, Mr. Roe was entitled to a severance benefit of 150% of his annual base compensation at the time of termination.



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OUTSTANDING EQUITY AWARDS AT FISCAL
YEAR-END TABLE



|                  |  |                                                                     |  |                                                                       |                 |  |                                                                                               |  |                           |                      |                       |                                                   
|----------------- |  | ------------------------------------------------------------------- |  | --------------------------------------------------------------------- | --------------- |  | --------------------------------------------------------------------------------------------- |  | ------------------------- | -------------------- | --------------------- | --------------------------------------------------
|                  |  | Option Awards                                                      
|Name              |  | Number of Securities Underlying Unexercised Options (#) Exercisable |  | Number of Securities Underlying Unexercised Options (#) Unexercisable |                 |  | Equity Incentive Plan Awards: Number of Securities Underlying UnexercisedUnearned Options (#) |  | Option Exercise Price ($) |                      | OptionExpiration Date
|Jeffrey P. Ansell |  | 777,777500,000                                                      |  | 2,722,223                                                            | (a)             |  |                                                                                              |  | $$                        | 1.001.00             |                       | 07/05/201611/10/2016                              
|                  |  |                                                                     |  |                                                                       |                
|William Toler     |  | 733,33338,888                                                      |  | 916,667136,112175,000                                                 | (b)(b)(b)       |  |                                                                                              |  | $$$                       | 1.001.001.00         |                       | 03/22/201407/15/201510/15/2016                    
|                  |  |                                                                     |  |                                                                       |                
|Michael J. Cramer |  | 1,111,111                                                          |  | 1,388,88950,000                                                       | (c)(c)          |  |                                                                                              |  | $$                        | 1.001.00             |                       | 03/19/201410/15/2006                              
|                  |  |                                                                     |  |                                                                       |                
|Craig Steeneck    |  | 222,222                                                         |  | 777,778500,00075,00075,00050,000                                      | (d)(d)(d)(d)(d) |  |                                                                                              |  | $$$$$                     | 1.001.001.001.001.00 |                       | 07/15/201501/15/201604/15/201607/15/201610/15/2016



|(a) | Mr. Ansells unexercisable options vest as follows: in fiscal 2007  777,778; in fiscal 2008  777,778; and in fiscal 2013  1,166,667.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------



|(b) | Mr. Tolers unexercisable options vest as follows: in fiscal 2007  444,444; in fiscal 2008 77,778, in fiscal 2009  38,889, in fiscal 2011  550,000, in fiscal
2012  58,334; and in fiscal 2013  58,334.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | Mr. Cramers unexercisable options vest as follows: in fiscal 2007  566,667; in fiscal 2008 11,111, in fiscal 2009  11,111, in fiscal 2011  833,333, in fiscal
2013  16,667.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) | Mr. Steenecks unexercisable options vest as follows: in fiscal 2007  377,776; in fiscal 2008 377,779, in fiscal 2009  155,556, in fiscal 2012  333,333; and
in fiscal 2013  233,334.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

OPTION EXERCISES AND STOCK
VESTED TABLE



|                    |  |                                         |   |  |                              |          
|------------------- |  | --------------------------------------- | - |  | ---------------------------- | ---------
|                    |  | Stock Awards                           
|Name                |  | Number of SharesAcquired on Vesting (#) |   |  | Value Realized onVesting ($)
|C. Dean Metropoulos |  | (a                                      | ) |  | $                            | 1,202,750
|N. Michael Dion     |  | (a                                      | ) |  |                              | 120,275  



|(a) | In connection with the financing and acquisition of the Armour Foods Business, Mr. C.D. Metropoulos and Mr. Dion, together with our other shareholders, purchased 39,600
Class A Units of LLC, PFGIs ultimate parent, for $39.6 million. In return for the investment in Class A units, Mr. C.D. Metropoulos and Mr. Dion also received 2,926.32 fully vested Class C, 2,238.25 fully vested Class D and
2,356.05 fully vested Class E units at a discounted price of $400,000. The Class C, D and E units were valued at $1,815,000. Accordingly, the Company recorded a compensation charge of $1,415,000. Mr. C.D. Metropoulos and Mr. Dion received
85% and 8.5%, respectively, of the units granted to CDM. The remaining 6.5% of the units were granted to an individual, who is not an employee of the Company.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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OTHER POTENTIAL POST-EMPLOYMENT PAYMENTS

C. Dean Metropoulos

The amended and
restated employment agreement by and between the Company and Mr. C.D. Metropoulos contains a provision for a potential payment in connection with the termination of employment without Cause by the Company, for Good Reason by Mr. C.D.
Metropoulos, or due to Mr. C.D. Metropoulos Disability.

Cause is defined in the amended and restated employment agreement as an act
of intentional fraud upon the Company that has caused a harm or injury to the Company; provided, however, that (x) the Board shall provide Mr. C.D. Metropoulos with notice of the particular acts or omissions that are alleged to give rise
to such fraud and (y) the Board shall hold a hearing no sooner than ten days after such notice at which Mr. C.D. Metropoulos shall have the right to address the Board and dispute such allegations. Mr. C.D. Metropoulos shall have the
right to contest a determination of Cause by the Board by requesting arbitration.

Good Reason is defined in the amended and restated
employment agreement as (A) the assignment to Mr. C.D. Metropoulos of any position, authority, duties or responsibilities inconsistent with Section 2(a) of the amended and restated employment agreement (including status, offices,
titles and reporting requirements), or any other action by the Company which results in a diminution in such position, authority, duties or responsibilities of Mr. C.D. Metropoulos with the Company, excluding for this purpose an action not
taken in bad faith and which is remedied by the Company promptly after receipt of written notice thereof specifying the particular action in issue, (B) a material breach by the Company of this Agreement or any stock option agreement between the
Company and Mr. C.D. Metropoulos, which is not cured within 30 days after the receipt of written notice specifying the particular acts or omissions giving rise to such breach, (C) a reduction, without the prior written consent of
Mr. C.D. Metropoulos, in the amount of annual base salary and/or annual bonus paid to Mr. C.D. Metropoulos by the Company in any given year as compared to the immediately preceding year (other than as a result of the Companys failure
to achieve bonus criteria established by the Board), (D) any removal by the Board of Mr. C.D. Metropoulos as the Chief Executive Officer of the Company other than for Cause, (E) any failure to elect or reelect Mr. C.D.
Metropoulos as a director of the Company, other than for Cause, (F) the relocation, without the prior written consent of Mr. C.D. Metropoulos, of his principal place of employment more than 30 miles from his current principal place
employment if such relocation would increase his commute, or (G) following a Change in Control (i) the failure of Mr. C.D. Metropoulos to hold the position and have the authority, duties and responsibilities of Chief Executive Officer
of the surviving or ultimate parent entity, as applicable, (ii) the failure of Mr. C.D. Metropoulos to report solely to the Board of Directors or analogous governing body of the surviving or ultimate parent entity, as applicable; or
(iii) the failure of Mr. C.D. Metropoulos to be elected and reelected as a director of the surviving or ultimate parent entity, as applicable, other than for Cause.

Disability is defined in the amended and restated employment as (A) Mr. C.D. Metropoulos incapacity due to death or a permanent mental or physical illness that prevents him from performing his
duties hereunder or (B) a physical condition that renders the performance by Mr. C.D. Metropoulos of his duties hereunder a serious threat to his health and well being. Disability shall be determined by a physician selected by
Mr. C.D. Metropoulos (or his legal representative) and reasonably acceptable to the Company.

The obligations of the Company upon termination of
Mr. C.D. Metropoulos for Cause, Good Reason or Disability includes an amount (the Severance Amount) that is equal to two (2) times the amount of the then current annual base compensation (including the annual bonus portion of
the annual base compensation targeted for such fiscal year whether or not earned as of the date of termination). The Severance Amount is currently estimated at $6 million. In addition, for a period commencing on the date of such termination and
continuing for twenty-four (24) months thereafter, the Company shall continue to provide benefits under Welfare Plans and the Other Benefits substantially equivalent to those that were being provided prior to the termination (Benefit
Continuation). The Welfare Plans include, but are not limited to, comprehensive medical and dental coverage, disability and basic and supplemental life insurance. The Other Benefits include, but are not limited to, the provision of a company
car of Mr. C.D. Metropoulos choice, club membership, tax/accounting services, office rent and secretarial support. The Benefit Continuation is currently estimated at $774,000.

Notwithstanding, in connection with the acquisition of Crunch Holding Corp. by Peak Holdings, Mr. Metropoulos entered into an amendment to his employment agreement in which he agreed to waive his rights to any
gross-up payment payable in connection with the consummation of the acquisition by Peak Holdings.

If it is determined that any payment to
Mr. Metropoulos would be subject to any tax, other than income tax (Excise Tax), then the Company shall promptly pay to Mr. Metropoulos an additional payment (Gross-up Payment) in an amount such that he retains,
after payment of all taxes and all interest and penalties with respect thereto, an amount of the Gross-up Payment equal to the Excess Tax imposed upon the payment. Mr. Metropoulos employment agreement expires in November 2007.



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Jeffrey P. Ansell

The employment agreement by and between the Company and Mr. Ansell contains a provision for a potential payment in connection with the termination of employment without Cause by the Company, for Good Reason by Mr. Ansell, or due
to Mr. Ansells Disability.

Cause is defined in the employment agreement as an act of intentional fraud upon the Company that has
caused a harm or injury to the Company or a willful misappropriation of Company funds; provided, however, that prior to any such termination (x) the Board shall provide Mr. Ansell with notice of the particular acts or omissions that are
alleged to give rise to such fraud or misappropriation and (y) the Board shall hold a hearing no sooner than ten days after such notice at which Mr. Ansell shall have the right (with counsel present) to address the Board and dispute such
allegations. Mr. Ansell shall have the right to contest a determination of Cause by the Board by requesting arbitration.

Good Reason is
defined in the employment agreement as (A) the assignment to Mr. Ansell of any position, authority, duties or responsibilities inconsistent with Section 2(a) of the employment agreement (including status, offices, titles and reporting
requirements), or any other action by the Company which results in a material diminution in such position, authority, duties or responsibilities of Mr. Ansell with the Company, excluding for this purpose an action not taken in bad faith and
which is remedied by the Company promptly after receipt of written notice thereof specifying the particular action in issue, (B) a material breach by the Company of this Agreement or any stock option agreement between the Company and
Mr. Ansell, which is not cured within 30 days after the receipt of written notice specifying the particular acts or omissions giving rise to such breach, (C) a reduction, without the prior written consent of Mr. Ansell, in the amount
of annual base salary and/or annual bonus paid to Mr. Ansell by the Company in any given year as compared to the immediately preceding year (other than as a result of Mr. Ansells failure to achieve bonus criteria established by the
Board), (D) any removal by the Board of Mr. Ansell as the Chief Executive Officer of the Company other than for Cause, (E) following a Change in Control, the failure of Mr. Ansell to hold the position and have the authority,
duties and responsibilities of the Chief Executive Officer of the surviving or ultimate parent entity, as applicable, (F) failure of the Company to invite or allow Mr. Ansell to participate in the Board of Directors meetings,
(G) the relocation, without Mr. Ansells prior written consent, of his principal place of employment more than 30 miles from his principal office, or (H) the failure of the Company to assign the Companys obligations under
the agreement to a successor or the failure of such successor to assume such obligation.

Disability is defined in the employment as
(A) Mr. Ansell incapacity due to death or a permanent mental or physical illness that prevents or is expected to prevent him from performing his duties hereunder for a period of not less than 3 continuous months. Disability shall be
determined by a physician selected by Mr. Ansell (or his legal representative) and reasonably acceptable to the Company.

The obligations of the
Company upon termination of Mr. Ansell for Cause, Good Reason or Disability includes an amount (the Severance Amount) that is equal to one (1) times the amount of the then current annual base compensation (which includes the
then current annual base salary and the prior years annual bonus paid); provided, however, that in all events, the Severance Amount shall not be less than $1,000,000. The Severance Amount is currently estimated at $1,000,000. The Company shall
also pay to Mr. Ansell a partial Annual Bonus (the Partial Annual Bonus) in cash for the fiscal year in which such termination occurs. The Partial Annual Bonus is currently estimated at $300,000. In addition, for a period commencing
on the date of such termination and continuing for twelve (12) months thereafter, if Mr. Ansell elects COBRA continuation coverage under the Companys welfare plans, Mr. Ansell will pay a COBRA premium in an amount equal to the
premium charged to active employees and the Company will pay any additional COBRA premium amount (Benefit Continuation). The Benefit Continuation is currently estimated at $12,000.

N. Michael Dion

The amended and restated employment agreement
by and between the Company and Mr. Dion contains a provision for a potential payment in connection with the termination of employment without Cause by the Company, for Good Reason by Mr. Dion, or due to Mr. Dions Disability.

Cause is defined in the amended and restated employment agreement as an act of intentional fraud upon the Company that has caused a harm or
injury to the Company; provided, however, that (x) the Board shall provide Mr. Dion with notice of the particular acts or omissions that are alleged to give rise to such fraud and (y) the Board shall hold a hearing no sooner than ten
days after such notice at which Mr. Dion shall have the right to address the Board and dispute such allegations. Mr. Dion shall have the right to contest a determination of Cause by the Board by requesting arbitration.



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Good Reason is defined in the amended and restated employment agreement as (A) the assignment to Mr. Dion of any position, authority,
duties or responsibilities inconsistent with Section 2(a) of the amended and restated employment agreement (including status, offices, titles and reporting requirements), or any other action by the Company which results in a diminution in such
position, authority, duties or responsibilities of Mr. Dion with the Company, excluding for this purpose an action not taken in bad faith and which is remedied by the Company promptly after receipt of written notice thereof specifying the
particular action in issue, and provided that a reassignment of Mr. Dions position, authority, duties or responsibilities by the CEO in accordance with Section 2(a) shall not be considered an event described in this clause (A),
(B) a material breach by the Company of this Agreement or any stock option agreement between the Company and Mr. Dion, which is not cured within 30 days after the receipt of written notice specifying the particular acts or omissions giving
rise to such breach, (C) a reduction, without the prior written consent of Mr. Dion, in the amount of annual base salary and/or annual bonus paid to Mr. Dion by the Company in any given year as compared to the immediately preceding
year (other than as a result of the Companys failure to achieve bonus criteria established by the Board), (D) the relocation, without the prior written consent of Mr. Dion, of his principal place of employment more than 30 miles from
his current principal place employment if such relocation would increase his commute, or (E) following a Change in Control (i) the failure of Mr. Dion to hold the position and have the authority, duties and responsibilities which he
holds had has immediately prior to the Change in Control, at the surviving or ultimate parent entity, as applicable, or (ii) the failure of Mr. Dion to report solely to the CEO of the surviving or ultimate parent entity, as applicable.

Disability is defined in the amended and restated employment as (A) Mr. Dion incapacity due to death or a permanent mental or
physical illness that prevents him from performing his duties hereunder or (B) a physical condition that renders the performance by Mr. Dion of his duties hereunder a serious threat to his health and well being. Disability shall be
determined by a physician selected by Mr. Dion (or his legal representative) and reasonably acceptable to the Company.

The obligations of the Company upon termination of Mr. Dion for Cause, Good Reason or Disability includes an amount (the Severance Amount) that is equal to one and one-half (11/2) times the amount of the then current annual base compensation (including the annual bonus portion of the annual
base compensation targeted for such fiscal year whether or not earned as of the date of termination). The Severance Amount is currently estimated at $975,000. In addition, for a period commencing on the date of such termination and continuing for
eighteen (18) months thereafter, the Company shall continue to provide benefits under Welfare Plans substantially equivalent to those that were being provided prior to the termination (Benefit Continuation). The Welfare Plans
include, but are not limited to, comprehensive medical and dental coverage, disability and basic and supplemental life insurance. The Benefit Continuation is currently estimated at $18,000.

If it is determined that any payment to Mr. Dion would be subject to any tax, other than income tax (Excise Tax), then the Company shall promptly pay to
Mr. Dion an additional payment (Gross-up Payment) in an amount such that he retains, after payment of all taxes and all interest and penalties with respect thereto, an amount of the Gross-up Payment equal to the Excess Tax imposed
upon the payment. Mr. Dions employment agreement expires in November 2007.

William Toler

Mr. Tolers offer of employment includes a provision for a potential payment in connection (a) his termination for any reason other than good cause, his
voluntary resignation, death or disability which continues for more than six (6) months or (b) in the event of a change of control which results in his loss of job, a diminution of his current job description and responsibilities, a
reduction in the then current salary or certain benefits, or requires a relocation of his office more than 25 miles from his then current office.

The
obligations of the Company upon termination of Mr. Toler includes an amount (the Severance Amount) that is equal to one year of Mr. Tolers then current annual salary plus an target bonus of 50%. The Severance Amount is
currently estimated at $608,000. In addition, for a period commencing on the date of such termination and continuing for twelve (12) months thereafter, the Company shall pay for Mr. Tolers health insurance benefits (Welfare
Benefit). The Welfare Benefit is currently estimated at $12,000.

Michael J. Cramer

Mr. Cramers offer of employment does not include any special provision for a post-employment payment. Therefore, in the event Mr. Cramers employment
is terminated other than for cause, any post-employment payment due would be under the Companys existing severance plan. For employees at Mr. Cramers level, the severance benefit would be 16 weeks of compensation, which includes
base salary only. The severance amount is currently estimated at $128,000.



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Craig Steeneck

Mr. Steenecks offer of employment includes a provision for a potential payment in connection his termination for other than cause, with cause being defined as the willful misconduct or commission of a crime while employed.
Termination without cause shall include a change of control of the ownership of the business in the event that Mr. Steeneck is not offered a job with similar pay, benefits and responsibility.

The obligations of the Company upon termination of Mr. Steeneck includes an amount (the Severance Amount) that is equal to one year of
Mr. Steenecks then current annual salary plus an target bonus of 75%. The Severance Amount is currently estimated at $643,000.

COMPENSATION OF DIRECTORS

Our directors who are also our employees or employees of our
Sponsors will receive no additional compensation for their services as director. Those directors who are not employees of us or our Sponsors will be paid (1) an annual retainer of $25,000 to be paid quarterly in arrears and (2) an annual
option grant of 10,000 options with a one year vesting period. We also promptly reimburse our non-employee directors for reasonable expenses incurred to attend meetings of our board of directors or its committees.

Director Compensation Table



|                 |  |                                |        |                       |       |     |                           |   |           |   |       
|---------------- |  | ------------------------------ | ------ | --------------------- | ----- | --- | ------------------------- | - | --------- | - | ------
|Name (b)         |  | Fees Earned or Paidin Cash
($) |        | Option Awards ($) (a) |       |     | All OtherCompensation ($) |   | Total ($)
|Terry Peets      |  | $                              | 25,000 |                       | 3,200 | (b) |                           |  |           | $ | 28,200
|David R. Jessick |  |                                | 25,000 |                       | 3,200 | (b) |                           |  |           |   | 28,200



|(a) | Stock Awards and Stock Option Grants were valued in accordance with Statement of Financial Accounting Standards (SFAS) No. 123R. The assumptions used in the
valuation are discussed in Note 5 in the Companys Consolidated Financial Statements for the year ended December 31, 2006.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | As of December 31, 2006, Messrs. Peets and Jessick each have outstanding options to purchase 30,000 shares of the CHCs common stock. The options have an exercise price of
$1.00 per share and are fully vested.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION

Mr. C.D. Metropoulos, our Chairman, is the only member of the compensation committee who is
also one of our employees or officers. However, Mr. C.D. Metropoulos does not participate in decisions affecting his own compensation. For information regarding certain transactions between us and Mr. C.D. Metropoulos, see Certain
relationships and related transactions.



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|ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|-------- | --------------------------------------------------------------

Crunch Holding Corp. owns 100% of the capital stock of PFGI. LLC and certain members of PFGI management together own 100% of the capital stock of Crunch Holding Corp.

The following table sets forth information with respect to the ownership of the membership units of LLC as of December 31, 2006:



| |  |  | each person known to own beneficially more than 5% of the membership units,
| | - |  | ---------------------------------------------------------------------------



| |  |  | each of our directors,
| | - |  | ----------------------



| |  |  | each of the executive officers named in the summary compensation table above, and
| | - |  | ---------------------------------------------------------------------------------



| |  |  | all of our executive officers and directors as a group.
| | - |  | -------------------------------------------------------

Notwithstanding the beneficial ownership of units presented below, a members agreement governs the members exercise of their voting rights with respect to election of directors and certain other material events. The parties to
the members agreement have agreed to vote their units to elect the board of directors as set forth therein. See Certain relationships and related transactions.

The amounts and percentages of units beneficially owned are reported on the basis of SEC regulations governing the determination of beneficial ownership of securities. Under SEC rules, a person is deemed to be a
beneficial owner of a security if that person has or shares voting power or investment power, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any
securities with respect to which that person has a right to acquire beneficial ownership within 60 days. Securities that can be so acquired are deemed to be outstanding for purposes of computing such persons ownership percentage but not for
purposes of computing any other persons percentage. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which such
person has no economic interest.

Except as otherwise indicated in these footnotes, each of the beneficial owners listed has, to our knowledge, sole voting
and investment power with respect to the indicated units.



|                                                    |  |                                                                  |  |                     |  
|--------------------------------------------------- |  | ---------------------------------------------------------------- |  | ------------------- | -
|Name of beneficial owner                            |  | Number of Class A,Class B and Class CUnits BeneficiallyOwned (1) |  | Percent ofUnits (1) |  
|JPMP Capital Corp.(2)                               |  | 142,687                                                          |  | 24.13               | %
|J.W. Childs Associates, Inc.(3)                     |  | 142,687                                                          |  | 24.13               | %
|CDM Investor Group LLC(4)                           |  | 52,012                                                           |  | 8.79                | %
|Crunch Equity Voting Trust(5)                       |  | 254,059                                                          |  | 42.96               | %
|Stephen P. Murray(6)                                |  | 142,687                                                          |  | 24.13               | %
|Terry Peets                                         |  |                                                                 |  |                    |  
|Kevin G. OBrien(7)                                 |  | 142,687                                                          |  | 24.13               | %
|John W. Childs(8)                                   |  | 142,687                                                          |  | 24.13               | %
|Adam L. Suttin(8)                                   |  | 142,687                                                          |  | 24.13               | %
|Raymond B. Rudy(8)                                  |  | 142,687                                                          |  | 24.13               | %
|David R. Jessick                                    |  |                                                                 |  |                    |  
|Rajath Shourie(9)                                   |  |                                                                 |  |                    |  
|C. Dean Metropoulos(10)                             |  | 52,012                                                           |  | 8.79                | %
|N. Michael Dion(11)                                 |  |                                                                 |  |                    |  
|All directors and executive officers as a group(12) |  | 337,386                                                          |  | 57.05               | %



|(1) | Represents the aggregate ownership of the Class A, Class B and Class C Units of LLC. Affiliates of JPMP Capital Corp. and J.W. Childs Equity Investors III, L.P. and Crunch
Equity Voting Trust own only Class A Units. The Class B and Class C Units are owned only by CDM and its officers.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|(2) | Includes 75,906.20 of Class A Units owned by J.P. Morgan Partners (BHCA), L.P., 21,390.20 of Class A Units owned by J.P. Morgan Partners Global Investors (Selldown II)
L.P., 18,195.87 of Class A Units owned by J.P. Morgan Partners Global Investors, L.P., 9,135.15 of Class A Units owned by J.P. Morgan Partners Global Investors (Cayman), L.P., 6,160.80 of Class A Units owned by J.P. Morgan Partners
Global Investors (Selldown) 2,795.86 of Class A Units owned by J.P. Morgan Partners Global Investors A, L.P., and 1,021.60 of Class A Units owned by J.P. Morgan Partners Global Investors (Cayman) II, L.P. JPMP Capital Corp., which is an
affiliate of JPMorgan Chase & Co., is the direct or indirect general partner of each of these entities. JPMP Capital Corp. and each of the foregoing entities is an affiliate of J.P. Morgan Partners, LLC and has an address c/o J.P. Morgan
Partners, LLC, 1221 Avenue of the Americas, 39th Floor, New York, New York 10020. Also includes 8,081.05 units owned by Co-Investment Partners, L.P. Pursuant to a proxy agreement, each of J.P. Morgan Partners (BHCA), L.P., J.P. Morgan Partners
Global Investors, L.P., J.P. Morgan Partners Global Investors A, L.P., J.P. Morgan Partners Global Investors (Cayman), L.P. and J.P. Morgan Partners Global Investors (Cayman) II, L.P. has the right to vote the units owned by Co-Investment Partners,
L.P.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | Includes 139,111.23 of Class A Units owned by J.W. Childs Equity Partners III, L.P. and 3,575.51 Units of Class A owned by JWC Fund III Co-Invest, LLC. J.W. Childs
Associates, Inc. is the direct or indirect majority shareholder, general partner or managing member, as applicable, of each of these entities.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(4) | Includes 1,063.44 Class A Units, 30,950 Class B Units and 19,998.17 Class C Units owned by CDM. CDM also owns 31,128.86 Class D Units and 32,767.49 Class E Units. C. Dean
Metropoulos is the managing member of CDM and has the sole power to direct the voting and disposition of any Units owned by CDM. N. Michael Dion is a non-managing member of CDM and certain of their respective affiliates. The address of CDM and each
of the foregoing persons is c/o CDM Investor Group LLC, 67 Mason Street, Greenwich, Connecticut 06830.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(5) | Crunch Equity Voting Trust (the Bondholder Trust) was formed prior to the consummation of the Aurora Merger and holds approximately 254,059.08 Class A Units on
behalf of the Aurora bondholders. Each ownership interest in the Bondholder Trust represents a corresponding interest in LLC. The Bondholder Trust has a board of three voting trustees. As more fully set forth in the trust agreement for the
Bondholder Trust, the board has the authority, at the boards sole discretion, to exercise certain rights and cause the Bondholder Trust to perform certain obligations of the Bondholder Trust. Certain other actions taken by the board require
the consent or instruction of the holders of ownership interests in the Bondholder Trust. The Bondholder Trust terminates upon the liquidation, dissolution or winding up of the affairs of LLC or at such time (following the deposit of the first
Class A Units into the Bondholder Trust) as the Bondholder Trust ceases to hold any Class A Units.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(6) | Reflects the shares directly owned by J.P. Morgan Partners (BHCA), L.P., J.P. Morgan Partners Global Investors, L.P., J.P. Morgan Partners Global Investors A, L.P., J.P. Morgan
Partners Global Investors (Cayman), L.P., J.P. Morgan Partners Global Investors (Cayman) II, L.P., J.P. Morgan Partners Global Investors (Selldown), L.P. and J.P. Morgan Partners Global Investors (Selldown II), L.P. (collectively, the JPMP
Entities) due to his status as an executive officer of JPMP Capital Corp., a wholly owned subsidiary of JPMorgan Chase & Co. and the direct and indirect general partner of each of the JPMP Entities. Mr. Murray disclaims
beneficial ownership except to the extent of his pecuniary interest. The address of Mr. Murray is c/o J.P. Morgan Partners, LLC, 1221 Avenue of the Americas, New York, New York 10020.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(7) | Mr. OBrien is a Partner of J.P. Morgan Partners, LLC and a limited partner of JPMP Master Fund Manager, L.P. (JPMP MFM), an entity which has a carried
interest in investments of the JPMP Entities. While Mr. OBrien has no beneficial ownership of these shares held by the JPMP Entities under Section 13(d) of the Exchange Act because he has no ability to control the voting or
investment power of the JPMP Entities, Mr. OBrien has an indirect pecuniary interest in the shares of LLC held by the JPMP Entities as a result of his status as a limited partner of JPMP MFM. Mr. OBrien disclaims beneficial
ownership of these shares except to the extent of his pecuniary interest therein. The actual pecuniary interest which may be attributable to Mr. OBrien is not readily determinable because it is subject to several variables, including
without limitation, the JPMP Entities internal rate of return and vesting. Mr. OBriens address is c/o J.P. Morgan Partners, LLC, 1221 Avenue of the Americas, New York, New York 10020.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|(8) | Each of Messrs. Childs, Suttin and Rudy may be deemed the beneficial owner of the Units owned by J.W. Childs Associates, Inc., in their capacity as a shareholder, Partner or
Operating Partner of J.W. Childs Associates, Inc. and certain of its affiliates, as applicable. Each of Messrs. Childs, Suttin and Rudy disclaim beneficial ownership of such Units. The address for each of them is c/o J.W. Childs Associates, L.P.,
111 Huntington Avenue, Suite 2900, Boston, Massachusetts 02199-7610.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(9) | Mr. Shourie is a Managing Director of Oaktree Capital Management, LLC (Oaktree). Oaktree is the general partner or investment adviser of certain funds and accounts
which hold, in the aggregate, 84,430.934 units of ownership interest in the Bondholder Trust, and may be deemed to have beneficial ownership of such units. Mr. Shourie, Oaktree and its members, principals and officers hereby disclaim beneficial
ownership of such units, except to the extent of any pecuniary interest therein.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(10) | Mr. C.D. Metropoulos may be deemed the beneficial owner of the Units owned by CDM set forth in note (4) due to his status as its managing member. Mr. C.D. Metropoulos
disclaims beneficial ownership of any such Units except to the extent of his pecuniary interest. In addition, Mr. C.D. Metropoulos owns 5,000,000 shares of common stock (0.91%) of Crunch Holding Corp., which is a wholly owned subsidiary of LLC.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(11) | Mr. Dion is a non-managing member of CDM but has no power to direct the voting or disposition of Units owned by CDM. In addition, Mr. Dion owns 200,000 shares of common
stock (0.04%) of Crunch Holding Corp., which is a wholly owned subsidiary of LLC.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(12) | The other named executive officers of PFGI collectively own 925,000 shares of common stock (0.17%) of Crunch Holding Corp., which is a wholly owned subsidiary of LLC.
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



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SECURITIES AUTHORIZED FOR ISSUANCE UNDER
THE EQUITY COMPENSATION PLANS

The following table provides information for the fiscal year
ended December 31, 2006 about shares of Crunch Holding Corp. common stock that may be granted under the Crunch Holding Corp. 2004 Stock Option Plan, the Crunch Holding Corp. 2004 California Stock Option Plan, the Crunch Holding Corp. 2004
Employee Stock Purchase Plan, and the Crunch Holding Corp. 2004 California Employee Stock Purchase Plan. As of December 31, 2006, there were 552,126,174 shares of Crunch Holding Corp. common stock outstanding.



|                                                               |  |                                                                                         |     |  |                                                                          |      |     |                                                                                          |           |    
|-------------------------------------------------------------- |  | --------------------------------------------------------------------------------------- | --- |  | ------------------------------------------------------------------------ | ---- | --- | ---------------------------------------------------------------------------------------- | --------- | ---
|Plan Category                                                  |  | Number of securitiesto be issued uponexercise ofoutstanding options,warrants and rights |     |  | Weighted-averageexercise price ofoutstanding options,warrants and rights |      |     | Number of securitiesremaining availablefor future issuanceunder equitycompensation plans |          
|Equity compensation plans approved by security holders         |  |                                                                                         |     |  |                                                                          |      |     |                                                                                          |           |    
|Equity compensation plans not approved by security holders (1) |  | 27,328,663                                                                              | (2) |  | $                                                                        | 1.00 | (3) |                                                                                          | 6,616,163 | (4)



|(1) | The Crunch Holding Corp. 2004 Stock Option Plan, the Crunch Holding Corp. 2004 California Stock Option Plan, the Crunch Holding Corp. 2004 Employee Stock Purchase Plan and the
Crunch Holding Corp. 2004 California Employee Stock Purchase Plan were each approved by the Board of Directors of Crunch Holding Corp. on March 19, 2004.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | Includes 27,083,663 options outstanding under the Crunch Holding Corp. 2004 Stock Option Plan, and 245,000 options outstanding under the Crunch Holding Corp. 2004 California Stock
Option Plan.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | The weighted-average exercise price relates only to outstanding stock options.
|--- | ------------------------------------------------------------------------------



|(4) | Includes 1,994,134 shares available for issuance in respect of future awards of stock options under the Crunch Holding Corp. 2004 Stock Option Plan, 105,000 shares available for
issuance in respect of future awards of stock options under the Crunch Holding Corp. 2004 California Stock Option Plan, 4,070,029 shares of common stock remaining for issuance under the Crunch Holding Corp. 2004 Employee Stock Purchase Plan and
447,000 shares of common stock remaining for issuance under the Crunch Holding Corp. 2004 California Employee Stock Purchase Plan.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

See
Item 11. Executive Compensation  Stock Option and Stock Purchase Plans for more information on the plans.



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|ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
|-------- | ----------------------------------------------

OFFICE SPACE LEASE

We currently lease office space owned by Barrington Properties, LLC, which
is an affiliate of C.D. Metropoulos, our Chairman and former Chief Executive Officer. In fiscal 2006, fiscal 2005, the transition year and fiscal 2004, total rent paid under this lease was $104,000, $101,000, $39,000 and $162,000, respectively. The
lease required us to make leasehold improvements of approximately $318,000. The building, which included the office space leased by a subsidiary of PFGI, was sold by the owner on January 12, 2004. The lease was amended to reflect that the
subsidiary moved to a different building in Greenwich, Connecticut also owned by Barrington Properties, LLC. The lease amendment runs through May 31, 2010.

AIRPLANE

In March 2004, our subsidiary, Pinnacle Foods Management Corporation, entered into an agreement with Fairmont
Aviation, LLC, an affiliate of C.D. Metropoulos, our Chairman and former Chief Executive Officer, whereby Fairmont Aviation, LLC has agreed to provide us with use of an aircraft. Subject to each parties termination rights, the agreement
terminates in March 2010 and may be renewed on a month-to-month basis thereafter. In connection with the use of this aircraft, we paid net operating expenses of $2,750,000 in fiscal 2006, $2,750,000 in fiscal 2005, $1,146,000 in the transition year
and $1,543,000 in the thirty-six weeks ended July 31, 2004.

MEMBERS AGREEMENT

In connection with the Aurora Merger, the Sponsors and the Bondholders Trust entered into an amended and restated members agreement of LLC. The members
agreement, among other matters:



| |  |  | restricts the transfer of units of LLC, subject to certain exceptions, and provides that all transferees must become a party to the members agreement;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | provides for a board of managers of LLC and a board of directors of Crunch Holding Corp. and PFC consisting of nine directors, of which:
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | three were nominated by the members affiliated with JPMP (the JPMP Directors), with one of such JPMP Directors being a person identified and approved by
the Bondholders Trust,
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | three were nominated by the members affiliated with JWC (the JWC Directors), with one of such JWC Directorx being a person identified and approved by
the Bondholders Trust,
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | one is C. Dean Metropoulos so long as he is our Chief Executive Officer and
| | - |  | ---------------------------------------------------------------------------



| |  |  | two were nominated by the Bondholders Trust;
| | - |  | --------------------------------------------



| |  |  | requires each member of LLC to vote all their shares for the election of the persons nominated as managers as provided above;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------



| |  |  | provides for a compensation committee and an audit committee, each consisting of at least three managers, of which:
| | - |  | -------------------------------------------------------------------------------------------------------------------



| |  |  | one member of such committee will be a JPMP Director for so long as the members affiliated with JPMP hold 25% or more of the Class A Units owned by them at the
consummation of the Aurora Merger,
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | one member of such committee will be a JWC Director for so long as the members affiliated with JWC hold 25% or more of the Class A Units owned by them at the
consummation of the Aurora Merger and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | C. Dean Metropoulos will have a seat on the compensation committee for so long as he is a member of LLCs board of managers;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



| |  |  | prohibits LLC or any of its subsidiaries from taking the following actions, subject to carve outs provided in the members agreement, without the prior
approval of the members of the board of managers affiliated with each of JPMP and JWC so long as in each case the members affiliated with the applicable Sponsor owns at least 25% of the Class A Units owned by such party at the consummation of
the Aurora Merger:
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | decisions in respect of compensation of members of senior management, including terminating or amending the employment agreements, issuance of options and granting
of bonuses,
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | approval or amendment of the operating budget,
| | - |  | ----------------------------------------------



| |  |  | incurring indebtedness outside the ordinary course of business that is not contemplated by the operating budget,
| | - |  | ----------------------------------------------------------------------------------------------------------------



| |  |  | acquiring or disposing of assets or stock of another company in excess of $5 million that is not contemplated by the operating budget,
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------



| |  |  | making investments or capital expenditures, in each case in excess of $3 million in any one fiscal year not included in the operating budget,
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | entering into affiliate transactions,
| | - |  | -------------------------------------



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| |  |  | changing the strategic direction of lines of businesses not specified in the annual strategic plan,
| | - |  | ---------------------------------------------------------------------------------------------------



| |  |  | authorizing, issuing or selling membership interests or capital stock,
| | - |  | ----------------------------------------------------------------------



| |  |  | making distributions, paying dividends or redeeming or repurchasing membership interests or capital stock, subject to customary carve-outs and except as otherwise
provided in the members agreement,
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | amending the terms of the governance documents,
| | - |  | -----------------------------------------------



| |  |  | reorganizations, share exchanges, dissolutions, liquidations or similar organic transactions,
| | - |  | ---------------------------------------------------------------------------------------------



| |  |  | any change in the accounting year, taxable year, accountants or accounting practices and
| | - |  | ----------------------------------------------------------------------------------------



| |  |  | establishment of committees of the board of managers or board of directors, as the case may be;
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | requires the consent of CDM to any changes to the terms of the Class B, C, D or E units or any amendment to LLCs governance documents that would adversely
affect CDM in a manner different from any other member;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | requires the consent of the Bondholders Trust to amend LLCs governance documents for so long as the Bondholders Trust holds at least 5% of the issued and
outstanding units;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | contains rights of certain unit holders to participate in transfers of Class A and Class B units by the Sponsors to third parties;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------



| |  |  | contains a right of first refusal by LLC with respect to transfers of Class A and Class B units by members other than Bondholders Trust, and if LLC does not
exercise such right, grant the non-transferring members (other than Bondholders Trust) a right of first refusal;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | grants the Sponsors and LLC a right of first offer with respect to transfers of interests by members of Bondholders Trust;
| | - |  | --------------------------------------------------------------------------------------------------------------------------



| |  |  | grants the members certain preemptive rights;
| | - |  | ---------------------------------------------



| |  |  | requires the consent of each of the Sponsors to effect a sale of LLC, Aurora or PFC;
| | - |  | ------------------------------------------------------------------------------------



| |  |  | if CDM does not consent to (i) a sale of LLC or Aurora or (ii) a liquidation in connection with a required initial public offering, grants JPMP and JWC,
in the case of clause (i), and Bondholders Trust, in the case of clause (ii), the right to purchase all of CDM units at a purchase price equal to the product of (x) $10.75 million and (y) a percentage (which is not greater than 100%)
representing the percentage on original investment of the capital returned to JPMP, JWC and the Bondholders Trust in connection with such transaction; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | if any of C. Dean Metropoulos, N. Michael Dion, Evan Metropoulos or Louis Pellicano voluntarily resign from Aurora without good reason (as defined in his respective
employment agreement) and other than as a result of disability (as defined in his employment agreement), grants LLC, Pinnacle or Aurora the option to purchase the portion of CDM units reflecting such individuals ownership in CDM (i) if
such resignation is on or before November 25, 2004, at a purchase price equal to $10.75 million multiplied by such individuals ownership percentage in CDM and (ii) if such resignation is after November 25, 2004 but on or before
November 25, 2005, at a purchase price equal to the greater of (x) $10.75 million multiplied by such individuals ownership percentage in CDM and (y) fair market value (without regard to any minority or illiquidity discounts.)
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The members agreement will terminate upon the sale, dissolution or liquidation of LLC.



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MANAGEMENT AND FEE AGREEMENTS

In connection with the Pinnacle Transaction, PFHC entered into a management agreement with JPMP and an affiliate of JWC. Under this agreement, each of JPMP and JWC
provide us with financial advisory and other services. We will pay each of JPMP and JWC an annual management fee in the amount of $0.5 million ($1.0 million in the aggregate) commencing November 2003, and one-fourth of this fee will be paid each
calendar quarter in advance. In addition, we will pay each of JPMP and JWC, in exchange for advisory services in connection with acquisitions, a transaction fee equal to $1 million upon the consummation of the Aurora Merger and 0.5% of the aggregate
purchase price upon consummation of any other acquisition or disposition by us. We will also reimburse JPMP and JWC for all expenses incurred by them in connection with the agreement. The management agreement may be terminated by either JPMP or JWC
with respect to that party only, or by mutual consent of JPMP and JWC, at any time on 30 days notice, and will terminate with respect to either JPMP or JWC on the date such party owns less than 5% of the units of LLC that it purchased on the
closing date of the Pinnacle Transaction. In addition, the management agreement may be terminated with respect to either JPMP or JWC in connection with an initial public offering or a change in law, occurrence or event which causes the existence of
the management agreement to render any of the directors designated by JPMP or JWC an interested or not otherwise independent director or adversely affects such partys right to designate a director or such directors ability to
perform his duties as director. In such event, such party will be entitled to receive a termination fee equal to the net present value of the fees which would have been paid to such party for the two-year period commencing on the date of
termination.

In connection with the Pinnacle Transaction, we paid each of JPMP and JWC a transaction fee in the amount of $2.425 million ($4.85 million in
the aggregate). We also paid all expenses of JPMP, JWC and each of their controlled affiliates, including the fees and expenses of their respective counsel and other advisors and consultants, in connection with the Pinnacle Transaction. In
connection with the acquisition of the Armour Business, each of JPMP and JWC were paid a transaction fee of $0.9 million ($1.8 million in the aggregate).

In addition, in connection with the Pinnacle Transaction, PFHC entered into an agreement with CDM Capital LLC, an affiliate of CDM, pursuant to which CDM Capital LLC will receive, in exchange for advisory services in connection with
acquisitions or dispositions, a transaction fee equal to 0.5% of the aggregate purchase price upon consummation of any acquisition (other than the Pinnacle Transaction or the Aurora Merger) by us. The payments to CDM Capital LLC under the fee
agreement cease at the time at which CDM no longer owns at least 5% of the LLC units issued to it at the closing of the Pinnacle Transaction. In connection with the acquisition of the Armour Business, CDM Capital LLC was paid a transaction fee of
$0.9 million.

These arrangements with the Sponsors also contain standard indemnification provisions by us of the Sponsors.

Upon the closing date of the Aurora Merger, PFGI assumed all of PFHCs rights and obligations under the management and fee agreements.

In connection with the September 2004 default on our senior credit agreement and the resulting amendment, 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.

TAX SHARING AGREEMENT

On November 25, 2003, we entered into a tax sharing agreement with Crunch Holding Corp. which provides that we will file U.S. federal income tax returns with Crunch Holding Corp. on a consolidated basis. This agreement further provides
that we make distributions to Crunch Holding Corp., and Crunch Holding Corp. makes contributions to us, such that we incur the expense for taxes generated by our business on the same basis as if we did not file consolidated tax returns. Aurora and
its wholly owned subsidiary, Sea Coast, became party to the tax sharing agreement on March 19, 2004.

INDEMNITY
AGREEMENT

In connection with the Aurora Merger, we entered into an indemnity agreement with the Bondholders Trust. Pursuant to the
indemnity agreement, the Bondholders Trust is required to reimburse us in respect of losses resulting from liabilities other than those (a) reserved against on the balance sheet of Aurora delivered to LLC pursuant to the Merger Agreement (or
not required under GAAP to be so reserved against), (b) entered into in the ordinary course of business, and (c) disclosed as of November 25, 2003; and claims by third parties which would give rise to a breach of any of the
representations or warranties of Aurora set forth in the Merger Agreement.



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The Bondholders Trust is not required to reimburse us for the first $1 million of such losses (subject to upward
adjustment of up to $14 million depending on the level of Auroras net debt at closing) and its aggregate reimbursement obligation may not exceed $30 million. Any claims for indemnification must be made by us prior to the first anniversary of
the closing date of the Aurora Merger. The Bondholders Trust may satisfy its indemnification obligations by delivering Class A units (valued at $1,000 per unit) to LLC for cancellation or by paying cash. The indemnity agreement was amended and
restated on May 4, 2004 to provide that the $30 million cap will be increased as further provided therein to the extent we are obligated to pay amounts in excess of $6.85 million to any prepetition lender in connection with the R2 Top Hat, Ltd.
appeal described in Item 3. Legal Proceedings.

REGISTRATION RIGHTS AGREEMENT

In connection with the Aurora Merger, Crunch Holding Corp. entered into a registration rights agreement with the members of LLC. Pursuant to the registration rights
agreement, following consummation of an initial public offering by Crunch Holding Corp., affiliates of JPMP, affiliates of JWC, CDM and the Bondholders Trust will each receive a demand registration right with respect to shares of Crunch Holding
Corp. received by it upon liquidation of LLC in connection with the initial public offering, as well as unlimited rights to include its shares of Crunch Holding Corp. in registered offerings by Crunch Holding Corp. and to request registration on
Form S-3 if Crunch Holding Corp. has qualified for the use of Form S-3, in all cases subject to certain conditions, standard cutbacks and other customary restrictions.

SENIOR SECURED CREDIT FACILITIES

JPMorgan
Chase & Co. or one of its affiliates is a lender under the senior secured credit facilities. J.P. Morgan Securities Inc. was an initial purchaser of the senior subordinated notes and both J.P. Morgan Securities Inc. and JPMorgan
Chase & Co. are affiliates of JPMP Capital Corp., which owns approximately 25% of our parents outstanding capital stock (on a fully diluted basis) and has the right under the members agreement to appoint three of our directors.
JPMP Capital Corp. is an affiliate of J.P. Morgan Partners, LLC. Steven P. Murray, a partner of J.P. Morgan Partners, LLC, Kevin G. OBrien, a principal of J.P. Morgan Partners, LLC, and Terry Peets, an advisor to J.P. Morgan Partners LLC,
serve as three of our directors.

FINANCIAL INSTRUMENTS

We have entered into transactions for derivative financial instruments with JPMorgan Chase Bank to lower our exposure to interest rates, foreign currency, and natural gas prices. We incurred and paid $1.8 million for
the settlement of foreign exchange swaps and natural gas swaps during fiscal 2006. We received total net cash received for the settlement of interest rate swaps, foreign exchange swaps, and natural gas swaps totaling $6.9 million during fiscal 2005,
$0.2 million the transition year and $3.5 million during the 36 weeks ended July 31, 2004.

EXPENSES OF
MAJOR SHAREHOLDER

As part of the Aurora Merger, we agreed to pay certain fees of the Bondholders Trust, 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 fees on behalf of the Bondholder Trust totaling $0.4 million in each of the fiscal years 2006 and 2005.



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|ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES
|-------- | --------------------------------------

APPROVAL
PROCESS

Pursuant to a policy adopted by the Audit Committee in December 2004, the Audit Committee pre-approves all auditing services and
all permitted non-auditing services (including the fees and terms thereof) to be performed by PricewaterhouseCoopers, LLP, subject to the de minimus exceptions for permitted non-audit services described in Section 10A(i)(1)(B) of the 1934 Act
which are approved by the Committee prior to the completion of the audit. PricewaterhouseCoopers LLP shall not be retained to perform certain prohibited non-audit functions set forth in Section 10A(g) and (h) of the 1934 Act and Rule
2-01(c)(4) of Regulation S-X of the SEC. Such pre-approval can be given as part of the Committees approval of the scope of the engagement of PricewaterhouseCoopers LLP or on an individual basis. The approved non-auditing services must be
disclosed in the Companys periodic public reports filed or submitted by it pursuant to Section 15(d) of the 1934 Act. The pre-approval of permitted non-auditing services can be delegated by the Committee to one or more of its members, but
the decision must be presented to the full Committee at the next regularly scheduled Committee meeting.

INDEPENDENT
AUDITORS FEES

Aggregate fees, including out-of-pocket expenses, for professional services rendered
for the Company by PricewaterhouseCoopers LLP for the fiscal year ended December 31, 2006 and December 25, 2005 were:



|              |  |                                     |       |                                     |   |      
|------------- |  | ----------------------------------- | ----- | ----------------------------------- | - | -----
|              |  | Fiscal year Ended December 31, 2006 |       | Fiscal year Ended December 25, 2005
|              |  | (Dollars in thousands)             
|Audit         |  | $                                   | 798   |                                     | $ | 823  
|Audit related |  |                                     | 96    |                                     |   | 63   
|Tax           |  |                                     | 40    |                                     |   | 112  
|All other     |  |                                     | 87    |                                     |   | 74   
|              |  |                                     |       |                                     |   |      
|Total         |  | $                                   | 1,021 |                                     | $ | 1,072
|              |  |                                     |       |                                     |   |      

AUDIT FEES

Audit fees for fiscal 2006 listed above are the aggregate fees, including out-of-pocket expenses, approved by the audit committee to be paid for professional services rendered by PricewaterhouseCoopers in connection
with (i) the audit of the Companys Consolidated Financial Statements as of and for the year ended December 31, 2006, and (ii) the reviews of the Companys unaudited consolidated interim financial statements as of
March 26, 2006, June 25, 2006 and September 24, 2006.

Audit fees for fiscal 2005 listed above are the aggregate fees, including
out-of-pocket expenses, approved by the audit committee to be paid for professional services rendered by PricewaterhouseCoopers in connection with (i) the audit of the Companys Consolidated Financial Statements as of and for the year
ended December 25, 2005, (ii) the reviews of the Companys unaudited consolidated interim financial statements as of March 27, 2005, June 26, 2005 and September 25, 2005, and (iii) assistance with review of
registration statements filed with the SEC.

AUDIT-RELATED FEES

Audit-related services include due diligence related to potential acquisitions and audits of employee benefit plan audits.



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TAX FEES

Tax fees consist of fees and out-of-pocket expenses for professional services rendered by PricewaterhouseCoopers in connection with tax compliance.

ALL OTHER FEES

All other fees consist primarily of tax services
provided for Mr. C.D. Metropoulos, our Chairman of the Board and former Chief Executive Officer.



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PART IV



|ITEM 15. | EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES
|-------- | --------------------------------------------



|a) | Documents filed as part of this report
|-- | --------------------------------------



| | 1) | The Consolidated Financial Statements and accompanying reports of our independent registered public accounting firm are included in Item 8 of this 10-K.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2) | 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).                                                         
|     | 
|4.4  |  | Exchange and Registration Rights Agreement, dated as of February 20, 2004, between J.P. Morgan Securities Inc.; Citigroup Global Markets Inc., CIBC World Markets Corp., 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 4.4 to the registrants Registration Statement on Form S-4 filed with the SEC on August 20, 2004, and incorporated herein by reference).
|     | 
|9.1  |  | Voting Trust Agreement, dated as of March 18, 2004, by and among the Voting Trustees party thereto, Wilmington Trust Company, the signatories to the Trust Accession Instruments listed on
Schedule I thereto, Aurora Foods Inc. and Crunch Equity Holding, LLC (previously filed as Exhibit 9.1 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 |  | Credit Agreement, dated as of November 25, 2003 among Crunch Holding Corp., Pinnacle Foods Holding Corporation, certain Lenders, Deutsche Bank Trust Company Americas, General Electric Capital
Corporation, JPMorgan Chase Bank, Citicorp North America, Inc. and Canadian Imperial Bank of Commerce (previously filed as Exhibit 10.1 to the registrants Registration Statement on Form S-4 filed with the SEC on August 20, 2004, and
incorporated herein by reference).                                                                                                                                                
|     | 
|10.2 |  | Assumption Agreement to the Credit Agreement, dated as of March 19, 2004 (previously filed as Exhibit 10.2 to the registrants Registration Statement on Form S-4 filed with the SEC on
August 20, 2004, and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                             
|     | 
|10.3 |  | Guarantee and Collateral Agreement dated as of November 25, 2003 (previously filed as Exhibit 10.3 to the registrants Registration Statement on Form S-4 filed with the SEC on August 20,
2004, and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                                                     
|     | 
|10.4 |  | Supplement No. 1 to the Collateral Agreement, dated March 19, 2004, between Aurora Foods Inc. and Deutsche Bank Trust Company Americas (previously filed as Exhibit 10.4 to the registrants
Registration Statement on Form S-4 filed with the SEC on August 20, 2004, and incorporated herein by reference).                                                                                                                                                                                                                                                                                                               
|     | 
|10.5 |  | Supplement No. 2 to the Collateral Agreement, dated March 19, 2004, between Sea Coast Foods, Inc. and Deutsche Bank Trust Company Americas (previously filed as Exhibit 10.5 to the
registrants Registration Statement on Form S-4 filed with the SEC on August 20, 2004, and incorporated herein by reference).                                                                                                                                                                                                                                                                                                           
|     | 
|10.6 |  | Amended and Restated Members Agreement of Crunch Equity Holding, LLC, dated March 19, 2004 (previously filed as Exhibit 10.6 to the registrants Registration Statement on Form S-4
filed with the SEC on August 20, 2004, and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                          
|     | 
|10.7 |  | Amended and Restated Operating Agreement of Crunch Equity Holding, LLC, dated March 19, 2004 (previously filed as Exhibit 10.7 to the registrants Registration Statement on Form S-4 filed
with the SEC on August 20, 2004, and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                         
|     | 
|10.8 |  | Management Agreement, dated as of November 25, 2003, by and among Pinnacle Foods Holding Corporation, J.P. Morgan Partners, LLC and J.W. Childs Associates, L.P. (previously filed as Exhibit 10.8
to the registrants Registration Statement on Form S-4 filed with the SEC on August 20, 2004, and incorporated herein by reference).                                                                                                                                                                                                                                                                                     
|     | 
|10.9 |  | Amended and Restated Indemnity Agreement, dated May 4, 2004, between Crunch Equity Holding LLC and the Class 6 Claim holders party thereto (previously filed as Exhibit 10.9 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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|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.10  |  | Crunch Holding Corporation Registration Rights Agreement, dated as of March 19, 2004, among Crunch Holding Corp. and certain investors party thereto (previously filed as Exhibit 10.10 to
the registrants Registration Statement on Form S-4 filed with the SEC on August 20, 2004, and incorporated herein by reference).                                                                                                                                                                                   
|       | 
|10.11+ |  | Amended and Restated Employment Agreement dated November 25, 2003 between Pinnacle Foods Holding Corp. and C. Dean Metropoulos (previously filed as Exhibit 10.11 to the registrants
Registration Statement on Form S-4 filed with the SEC on August 20, 2004, and incorporated herein by reference).                                                                                                                                                                                                         
|       | 
|10.12+ |  | Amended and Restated Employment Agreement dated November 25, 2003 between Pinnacle Foods Holding Corp. and N. Michael Dion (previously filed as Exhibit 10.13 to the registrants
Registration Statement on Form S-4 filed with the SEC on August 20, 2004, and incorporated herein by reference).                                                                                                                                                                                                             
|       | 
|10.13+ |  | Indemnification Agreement, dated May 22, 2001, between Pinnacle Foods Holding Corporation and C. Dean Metropoulos (previously filed as Exhibit 10.15 to the registrants Registration
Statement on Form S-4 filed with the SEC on August 20, 2004, and incorporated herein by reference).                                                                                                                                                                                                                      
|       | 
|10.14+ |  | Amendment No. 1, dated November 25, 2003, to the Indemnification Agreement, dated May 22, 2001, between Pinnacle Foods Holding Corporation and C. Dean Metropoulos (previously filed as Exhibit
10.16 to the registrants Registration Statement on Form S-4 filed with the SEC on August 20, 2004, and incorporated herein by reference).                                                                                                                                                                     
|       | 
|10.15+ |  | Crunch Holding Corp. 2004 Stock Option Plan, effective as of March 19, 2004 (previously filed as Exhibit 10.17 to the registrants Registration Statement on Form S-4 filed with the SEC on
August 20, 2004, and incorporated herein by reference).                                                                                                                                                                                                                                                            
|       | 
|10.16+ |  | Crunch Holding Corp. 2004 California Stock Option Plan, effective as of March 19, 2004 (previously filed as Exhibit 10.18 to the registrants Registration Statement on Form S-4 filed with
the SEC on August 20, 2004, and incorporated herein by reference).                                                                                                                                                                                                                                                 
|       | 
|10.17+ |  | Crunch Holding Corp. 2004 Stock Purchase Plan, effective as of March 19, 2004 (previously filed as Exhibit 10.19 to the registrants Registration Statement on Form S-4 filed with the SEC on
August 20, 2004, and incorporated herein by reference).                                                                                                                                                                                                                                                          
|       | 
|10.18+ |  | Crunch Holding Corp. 2004 California Stock Purchase Plan, effective as of March 19, 2004 (previously filed as Exhibit 10.20 to the registrants Registration Statement on Form S-4 filed with
the SEC on August 20, 2004, and incorporated herein by reference).                                                                                                                                                                                                                                               
|       | 
|10.19  |  | Fee Agreement, dated as of September 12, 2003, by and between Crunch Acquisition Corp., J.P. Morgan Partners, LLC and J.W. Childs Associates, L.P. (previously filed as Exhibit 10.21 to the
registrants Registration Statement on Form S-4 filed with the SEC on August 20, 2004, and incorporated herein by reference).                                                                                                                                                                                     
|       | 
|10.20  |  | Fee Agreement, dated November 25, 2003, by and among Pinnacle Foods Holding Corporation, CDM Capital LLC and Crunch Holding Corp. (previously filed as Exhibit 10.22 to the registrants
Registration Statement on Form S-4 filed with the SEC on August 20, 2004, and incorporated herein by reference).                                                                                                                                                                                                      
|       | 
|10.21  |  | Amendment No. 1, dated December 8, 2003, to the Fee Agreement, dated November 25, 2003, by and among Pinnacle Foods Holding Corporation, CDM Capital LLC and Crunch Holding Corp. (previously
filed as Exhibit 10.23 to the registrants Registration Statement on Form S-4 filed with the SEC on August 20, 2004, and incorporated herein by reference).                                                                                                                                                      
|       | 
|10.22  |  | Tax Sharing Agreement, dated as of November 25, 2003, by and among Crunch Holding Corp., Pinnacle Foods Holding Corporation, Pinnacle Foods Corporation, Pinnacle Foods Management Corporation,
Pinnacle Foods Brands Corporation, PF Sales (N. Central Region) Corp., PF Sales, LLC, PF Distribution, LLC and PF Standards Corporation (previously filed as Exhibit 10.24 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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|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.23 |  | Lease, dated May 23, 2001, between Brandywine Operating Partnership, L.P. and Pinnacle Foods Corporation (Cherry Hill, New Jersey) (previously filed as Exhibit 10.25 to the
registrants Registration Statement on Form S-4 filed with the SEC on August 20, 2004, and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                          
|      | 
|10.24 |  | Lease, dated August 10, 2001, between 485 Properties, LLC and Pinnacle Foods Corporation (Mountain Lakes, New Jersey); Amendment No. 1, dated November 23, 2001; Amendment No. 2, dated October
16, 2003 (previously filed as Exhibit 10.26 to the registrants Registration Statement on Form S-4 filed with the SEC on August 20, 2004, and incorporated herein by reference).                                                                                                                                                                                                                                                                    
|      | 
|10.25 |  | Swanson Trademark License Agreement (U.S.) by and between CSC Brands, Inc. and Vlasic International Brands Inc., dated as of March 24, 1998 (previously filed as Exhibit 10.27 to the
registrants Registration Statement on Form S-4 filed with the SEC on August 20, 2004, and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                 
|      | 
|10.26 |  | Swanson Trademark License Agreement (Non-U.S.) by and between Campbell Soup Company and Vlasic International Brands Inc., dated as of March 26, 1998 (previously filed as Exhibit 10.28 to the
registrants Registration Statement on Form S-4 filed with the SEC on August 20, 2004, and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                        
|      | 
|10.27 |  | Technology Sharing Agreement by and between Campbell Soup Company and Vlasic Foods International Inc., dated as of March 26, 1998 (previously filed as Exhibit 10.29 to the registrants
Registration Statement on Form S-4 filed with the SEC on August 20, 2004, and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                           
|      | 
|10.28 |  | Amendment No. 1 and Waiver, dated November 1, 2004, 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 10.30 to the registrants Registration Statement on Form S-4/A filed with the SEC on December 23, 2004, and incorporated herein by reference). 
|      | 
|10.29 |  | Amendment No. 2 and Waiver, dated November 19, 2004, 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 10.31 to the registrants Registration Statement on Form S-4/A filed with the SEC on December 23, 2004, and incorporated herein by reference).
|      | 
|10.30 |  | Amendment No. 3 and Agreement, dated January 25, 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 10.31 to the registrants Annual Report on Form 10-K for the fiscal year ended December 25, 2005, and incorporated herein by reference)     
|      | 
|10.31 |  | Amendment No. 4 and Agreement, dated February 14, 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 10.2 to the registrants Current Report on Form 8-K filed with the SEC on March 1, 2006, and incorporated herein by reference)             



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|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.32  |  | Amendment No. 5 and Agreement, dated 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)
|       | 
|10.33  |  | Trademark License Agreement by and between The Dial Corporation and Conagra, Inc., dated July 1, 1995 (previously filed as Exhibit 10.33 to the registrants Annual Report on Form 10-K for
the fiscal year ended December 25, 2005, and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                      
|       | 
|10.34+ |  | Employment Agreement dated June 12, 2006 between Pinnacle Foods Group Inc. and Jeffrey P. Ansell (previously filed as Exhibit 10.2 to the registrants Quarterly Report on Form 10-Q for the
quarterly period ended June 25, 2006, and incorporated herein by reference).                                                                                                                                                                                                                                                                                                                                                        
|       | 
|10.35  |  | Amendment to Lease Agreement, dated February 10, 2007 (previously filed as Exhibit 10.1 to the registrants Current Report on Form 8-K filed with the SEC on February 15, 2007, and
incorporated herein by reference)                                                                                                                                                                                                                                                                                                                                                                                                            
|       | 
|10.36  |  | Amendment to Aircraft Agreement, dated February 10, 2007 (previously filed as Exhibit 10.2 to the registrants Current Report on Form 8-K filed with the SEC on February 15, 2007, and
incorporated herein by reference)                                                                                                                                                                                                                                                                                                                                                                                                         
|       | 
|10.37+ |  | First Amendment to the Amended and Restated Employment Agreement by and between Pinnacle Foods Holding Corporation and C. Dean Metropoulos, dated February 10, 2007 (previously filed as Exhibit
10.3 to the registrants Current Report on Form 8-K filed with the SEC on February 15, 2007, and incorporated herein by reference)                                                                                                                                                                                                                                                                                              
|       | 
|12.1   |  | Computation of Ratios of Earnings to Fixed Charges                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       | 
|14.1   |  | Code of Ethics (previously filed as Exhibit 14.1 to the registrants Registration Statement on Form S-4/A filed with the SEC on December 23, 2004, and incorporated herein by
reference).                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       | 
|18.1   |  | Letter regarding change in accounting principle (previously filed as Exhibit 18.1 to the registrants Annual Report on Form 10-KT filed with the SEC on March 28, 2005, and incorporated
herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | 
|21.1   |  | Subsidiaries of Pinnacle Foods Group Inc. (previously filed as Exhibit 21.1 to the registrants Annual Report on Form 10-K for the fiscal year ended December 25, 2005, and incorporated
herein by reference).                                                                                                                                                                                                                                                                                                                                                                                                                   
|       | 
|24.1   |  | Power of Attorney (included in signature pages)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       | 
|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)                                                                                                                                                                                                                                                                                                                                                                                                                                                                            



|+ | Identifies exhibits that consist of a management contract or compensatory plan or arrangement.
|- | ----------------------------------------------------------------------------------------------



|(A) | Pursuant to Commission Release No. 33-8212, this certification will be treated as accompanying this Form 10-K 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 Section 13 or 15(d) 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
|                          |  | Date:  |  | March 5, 2007                                       

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



|                                                |  |                                                                                                   |  |              
|----------------------------------------------- |  | ------------------------------------------------------------------------------------------------- |  | -------------
|NAME                                            |  | TITLE                                                                                             |  | DATE         
|                                                |  |                                                                                                  
|/s/ C. DEAN METROPOULOS By: C. Dean Metropoulos |  | Chairman                                                                                          |  | March 5, 2007
|                                                |  |                                                                                                  
|/S/ JEFFREY P. ANSELL By: Jeffrey P. Ansell     |  | Chief Executive Officer (Principal Executive Officer)                                             |  | March 5, 2007
|                                                |  |                                                                                                  
|/s/ N. MICHAEL DION By: N. Michael Dion         |  | Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) |  | March 5, 2007
|                                                |  |                                                                                                  
|/s/ DAVID R. JESSICK By: David R. Jessick       |  | Director                                                                                          |  | March 5, 2007
|                                                |  |                                                                                                  
|/s/ STEPHEN P. MURRAY By: Stephen P. Murray     |  | Director                                                                                          |  | March 5, 2007
|                                                |  |                                                                                                  
|/s/ KEVIN G. OBRIEN By: Kevin G. OBrien       |  | Director                                                                                          |  | March 5, 2007
|                                                |  |                                                                                                  
|/s/ TERRY PEETS By: Terry Peets                 |  | Director                                                                                          |  | March 5, 2007
|                                                |  |                                                                                                  
|/s/ JOHN W. CHILDS By: John W. Childs           |  | Director                                                                                          |  | March 5, 2007
|                                                |  |                                                                                                  
|/s/ RAYMOND B. RUDY By: Raymond B. Rudy         |  | Director                                                                                          |  | March 5, 2007
|                                                |  |                                                                                                  
|/s/ ADAM L. SUTTIN By: Adam L. Suttin           |  | Director                                                                                          |  | March 5, 2007
|                                                |  |                                                                                                  
|/s/ RAJATH SHOURIE By: Rajath Shourie           |  | Director                                                                                          |  | March 5, 2007



147