DEL MONTE FOODS CO - 10-Q Quarterly Report

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨

As of February 28, 2005, there were 211,048,385 shares of Del Monte Foods Company Common Stock, par value $0.01 per share, outstanding.

Del Monte Foods Company and its consolidated subsidiaries (“Del Monte” or the “Company”) is one of the country’s largest producers, distributors and marketers of premium quality, branded and private label food and pet products for the U.S. retail market. The Company’s leading food brands include Del Monte, StarKist, Contadina, S&W and College Inn. In addition, the Company has pet food and pet snacks including 9Lives, Kibbles ‘n Bits, Pup-Peroni, Snausages, Pounce and other brand names. The majority of its products are sold nationwide in all channels serving retail markets, mass merchandisers, the U.S. military, certain export markets, the foodservice industry and food processors.

On December 20, 2002, the Company acquired various businesses from H.J. Heinz Company (“Heinz”), including Heinz’s U.S. and Canadian pet food and pet snacks, North American tuna, U.S. retail private label soup and U.S. infant feeding businesses (the “Merger”).

For reporting purposes, the Company’s businesses are aggregated into two reportable segments: Consumer Products and Pet Products. The Consumer Products reportable segment includes the Del Monte Brands, StarKist Seafood and Private Label Soup operating segments, which manufacture, market and sell shelf-stable products, including fruit, vegetable, tomato, broth, infant feeding, tuna and soup products. The Pet Products reportable segment includes the Pet Products operating segment, which manufactures, markets and sells dry and wet pet food and pet snacks. During the second quarter of fiscal 2005, the StarKist Brands operating segment was split into the StarKist Seafood and Private Label Soup operating segments due to changes in management responsibilities related to these product groupings. This operating segment change did not affect the Company’s reportable segments.

The Company operates on a 52 or 53-week fiscal year ending on the Sunday closest to April 30. The results of operations for the three months ended January 30, 2005 and January 25, 2004 each reflect periods that contain 13 weeks. The results of operations for the nine months ended January 30, 2005 and January 25, 2004 each reflect periods that contain 39 weeks.

The accompanying unaudited condensed consolidated financial statements of Del Monte as of January 30, 2005 and for the three and nine months ended January 30, 2005 and January 25, 2004 have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles (“GAAP”) for annual financial statements. In the opinion of management, all adjustments consisting of normal and recurring entries considered necessary for a fair presentation of the results for the interim periods presented have been included. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts in the financial statements and accompanying notes. These estimates are based on information available as of the date of the unaudited condensed consolidated financial statements. Therefore, actual results could differ from those estimates. Furthermore, operating results for the three and nine months ended January 30, 2005 are not necessarily indicative of the results expected for the year ending May 1, 2005. These unaudited condensed consolidated financial statements should be read in conjunction with the notes to the financial statements contained in the Company’s annual report on Form 10-K for the year ended May 2, 2004 (“2004 Annual Report”). All significant intercompany balances and transactions have been eliminated. Certain prior period amounts have been reclassified to conform to the current presentation.

Stock-based Compensation: Effective at the beginning of fiscal 2004, the Company adopted the fair value recognition provisions of Financial Accounting Standards Board (“FASB”) Statement No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”) to account for its stock-based compensation. The Company elected the prospective method of transition as permitted by FASB Statement No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure” (“SFAS 148”). Employee stock option grants and other stock-based compensation are expensed over the vesting period, based on the fair value at the time the stock-based compensation is granted. Prior to the adoption of SFAS 123, as amended by SFAS 148, the Company accounted for its stock-based compensation under Accounting Principles Board Opinion No. 25.

In accordance with SFAS 123 and SFAS 148, the following table presents pro forma information for the three and nine months ended January 30, 2005 and January 25, 2004 regarding net income and earnings per share as if the Company had accounted for all of its employee stock-based compensation under the fair value method of SFAS 123:

In December 2004, the FASB issued Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (“SFAS 123R”), which replaces SFAS 123. The accounting required by SFAS 123R is similar to that of SFAS 123, however, the choice between recognizing the fair value of stock options in the income statement or disclosing the pro forma income statement effect of the fair value of stock options in the notes to the financial statements allowed under SFAS 123 has been eliminated in SFAS 123R. SFAS 123R is effective for all interim and annual periods beginning after June 15, 2005, and early adoption is permitted. The adoption of SFAS 123R will increase compensation expense to the extent the requisite service has not yet been rendered for options granted prior to April 28, 2003 that are accounted for under the intrinsic value method. Management intends to use the modified prospective transition method to adopt SFAS 123R beginning in fiscal 2006 and expects that the implementation of SFAS 123R will increase the Company’s stock-based compensation expense by approximately $2.3 during the fiscal year ended 2006.

In April 2004, the Company sold certain assets formerly included in the Pet Products reportable segment, including its rights in the IVD and Medi-Cal brands, its rights in the Techni-Cal brand in the United States and Canada, and related inventories, for $82.5 (the “2004 Asset Sale”). During a transition period after the sale, the Company is manufacturing certain products for the buyer. The Company is also performing certain transition services for the buyer during agreed-upon post-closing periods. For all periods presented, the operating results, cash flows and assets related to the 2004 Asset Sale and other operating results from a related Canadian production facility have been classified as discontinued operations. On January 30, 2005, the remaining assets in discontinued operations primarily consisted of the Canadian production facility, which is being actively marketed for sale.

Net sales from discontinued operations was $7.9 and $21.0 for the three and nine months ended January 30, 2005, respectively, and $24.5 and $64.5 for the three and nine months ended January 25, 2004, respectively.

The following table sets forth the major categories of assets included in assets of discontinued operations:

Included in prepaid and other current assets are certain real properties which were classified as assets held for sale. Assets held for sale totaled $33.8 and $39.7 for the periods ended January 30, 2005 and May 2, 2004, respectively. During the nine months ended January 30, 2005, the Company sold $5.9 of assets held for sale and recognized an immaterial gain on the sale.

The following tables set forth the computation of basic and diluted earnings per share from continuing operations:

The computation of diluted earnings per share calculates the effect of dilutive securities on weighted average shares. Dilutive securities include stock options, restricted stock units and other deferred stock compensation.

Options and performance shares outstanding in the aggregate amounts of 7,737,693 and 7,700,205 were not included in the computation of diluted earnings per share for the three and nine months ended January 30, 2005, respectively, because their inclusion would be antidilutive. Options outstanding in the amounts of 1,537,940 and 1,779,406 were not included in the computation of diluted earnings per share for the three and nine months ended January 25, 2004, respectively, because their inclusion would be antidilutive.

At January 30, 2005 and May 2, 2004, the Company’s debt consisted of the following:

On December 20, 2002, in connection with the Merger, the Company established a $300.0 six-year floating rate revolving credit facility (the “Revolver”) with several institutions as part of its senior credit facility. During the three months ended January 30, 2005, the Company borrowed $105.8 and repaid $232.9. During the nine months ended January 30, 2005, the Company borrowed $372.4 and repaid $359.1. As of January 30, 2005, the net availability under the Revolver, adjusted for $55.3 of outstanding letters of credit, was $231.4. The interest rate on the Revolver, which is a floating rate, was approximately 6.75% on January 30, 2005.

During the three and nine months ended January 30, 2005, the Company made scheduled repayments of $1.5 and $4.6, respectively of Term B Loan principal. The Term B Loan is part of the senior credit facility.

The 9.25% senior subordinated notes had a face value of $300.0 when they were sold on May 15, 2001. On the date of the Merger, these notes were recorded at fair value, which was $312.0. The $12.0 premium was scheduled to be amortized over the life of the notes at $1.4 per year. For the three and nine months ended January 30, 2005 and January 25, 2004, $0.4 and $1.1, respectively of the recorded premium was amortized through earnings as a reduction to interest expense.

The Company made cash interest payments of $91.6 and $109.0 during the nine months ended January 30, 2005 and January 25, 2004, respectively.

As of January 30, 2005, agreements relating to the Company’s long term debt, including the credit agreement governing the senior credit facility and the indentures governing the senior subordinated notes, contained covenants that restrict the Company’s ability and the ability of its subsidiaries to incur additional indebtedness, issue capital stock, pay dividends on and redeem its capital stock, make other restricted payments, including investments, sell its assets, incur liens, transfer all or substantially all of its assets and enter into consolidations or mergers. The Company’s credit facilities also required it to meet certain financial tests, including minimum fixed charge coverage, minimum interest coverage and maximum total debt ratios. These financial requirements and ratios generally became more restrictive over time. The Company believes that it was in compliance with all such financial covenants as of January 30, 2005.

On February 8, 2005, the Company completed the refinancing of a significant portion of its outstanding indebtedness (the “Refinancing”). The Refinancing was initiated to reduce the applicable interest rate spread under the Company’s senior credit facility debt (revolver and term loans), to reduce the coupon rate on a portion of its senior subordinated debt, and to

provide the Company with enhanced operational flexibility. The Refinancing included the consummation of a cash tender offer and consent solicitation (the “Offer”) with respect to its outstanding 9¹/4% senior subordinated notes due 2011 (the “9¹/4% Notes”), the private placement offering of $250.0 principal amount of new 6³/4% senior subordinated notes due 2015 (the “6³/4% Notes”) and the consummation of a new $950.0 senior credit facility (the “New Credit Facility”). The Company used the proceeds from the sale of the 6³/4% Notes and borrowings under the New Credit Facility to fund the payment of consideration and costs related to the Offer and to repay amounts outstanding under its previous senior credit facility. The New Credit Facility is comprised of a $350.0 revolving credit facility with a term of six years, a $450.0 term loan A with a term of six years, and a $150.0 term loan B with a term of seven years.

The Offer expired on February 7, 2005 (the “Expiration Time”). As of the Expiration Time of the Offer, $297.5 aggregate principal amount of the 9¹/4% Notes had been validly tendered and not withdrawn, representing approximately 99.2% of the outstanding aggregate principal amount of the 9¹/4% Notes. The Company accepted for payment and paid for all 9¹/4% Notes validly tendered and not validly withdrawn on or prior to the expiration time.

The following table reflects the debt balances affected by the February 8, 2005 Refinancing, as compared to the balances at January 30, 2005:

Prior to February 8, 2005, the Company repaid the $13.3 Revolver balance. On February 8, 2005, in connection with the Refinancing, the Company borrowed $91.4, from the $350.0 six-year floating rate revolving credit facility under the New Credit Agreement (the “New Revolver”). Additionally the Company used $9.5 of cash on hand in connection with the closing of the Refinancing. A total of $55.3 in existing standby letters of credit under the Company’s previous credit facility were deemed issued under the New Credit Facility, and accordingly, the total availability under the New Revolver on February 8, 2005 after the consummation of the Refinancing was approximately $203.3. The interest rate on the New Revolver, which is a floating rate, was approximately 6.00% on February 8, 2005. The reduction in the interest rate from January 30, 2005 to February 8, 2005 is primarily due to a reduction in the applicable interest rate spread as a result of the Refinancing. In connection with the Refinancing, the Company expects to recognize approximately $33.5 of expense from fees and write-offs of premium related to the 9¹/4% Notes and write-offs of deferred fees in the fourth quarter of fiscal 2005.

The Company is scheduled to repay $0.2 of its long-term debt during the remainder of fiscal 2005. As of February 8, 2005, reflecting the consummation of the Refinancing, scheduled payments of long-term debt for each of the five succeeding fiscal years are as follows:

At February 8, 2005, agreements relating to the Company’s long-term debt, including the credit agreement governing the New Credit Facility and the indentures governing the senior subordinated notes (including the 6³/4% Notes), contained covenants that restrict the ability of Del Monte Corporation and its subsidiaries, among other things, to incur or guarantee indebtedness, issue capital stock, pay dividends on and redeem capital stock, prepay certain indebtedness, enter into transactions with affiliates, make other restricted payments, including

investments, incur liens, consummate asset sales and enter into consolidations or mergers. Certain of these covenants are also applicable to Del Monte Foods Company. The Company’s credit agreement governing the New Credit Facility also requires compliance with certain financial tests, including a maximum total debt ratio and a minimum fixed charge coverage ratio. The maximum total debt ratio becomes more restrictive over time.

During the nine months ended January 30, 2005 and the fiscal year ended May 2, 2004, the Company communicated to affected employees that their employment would be terminated as part of the Merger-related integration of certain business functions. Termination benefits and severance costs are expensed as part of selling, general and administrative expense. The Company may incur additional severance costs as it continues to integrate its businesses.

The following table reconciles the beginning and ending accrued merger-related termination and severance costs by reportable segment:

Del Monte sponsors three defined benefit pension plans and several unfunded defined benefit postretirement plans providing certain medical, dental and life insurance benefits to eligible retired, salaried, non-union hourly and union employees. The components of net periodic benefit cost of such plans are as follows:

The Company made planned cash contributions of $2.2 to the defined benefit pension plans during the second quarter of fiscal 2005. No other cash contributions were made by the Company during the nine months ended January 30, 2005.

The Company has various other nonqualified plans including supplemental retirement plans for executives, designed to provide benefits in excess of those otherwise permitted under the Company’s qualified retirement plans. These plans comply with IRS rules for nonqualified plans. During the quarter ended January 30, 2005, as part of an effort to harmonize employee benefits, the Company expanded certain supplemental executive retirement plans to include additional executives within the Company. The effect of this change was an increase of $4.7 to both the benefit obligation and the related intangible asset.

Except as set forth below, there have been no material developments in the legal proceedings reported in the Company’s 2004 Annual Report.

The Company is a defendant in an action brought by Kal Kan Foods, Inc., which was a subsidiary of Mars, Inc., in the U.S. District Court for the Central District of California on December 19, 2001. The plaintiff alleged infringement of U.S. Patent No. 6,312,746 (the “746 Patent”). Specifically, the plaintiff alleged that the technology used in the production of Pounce Purr-fections, Pounce Delectables (currently named Pounce Delecta-bites), Meaty Bones Savory Bites (currently named Snausages Scooby Snack Stuffers) and certain other pet treats infringes the 746 Patent. The plaintiff is seeking compensatory damages in the amount of $2.3 for alleged infringement of its patent and a permanent injunction against further sales of products made with the allegedly infringing technology. Although the plaintiff had originally been seeking the award of treble damages and attorneys’ fees for alleged willful infringement of its patent, the plaintiff is no longer seeking such damages or fees following a February 2005 agreement between the parties to narrow the issues at trial. On July 21, 2003, the court granted the Company’s motion for summary judgment, which was entered as a final judgment on July 29, 2003. On August 27, 2003, the plaintiff filed a notice of appeal to the U.S. Court of Appeals for the Federal Circuit. On July 29, 2004, the Court of Appeals issued its decision which overturned the district court’s decision on summary judgment and remanded the case to the district court for further proceedings. On August 6, 2004, the Company filed a petition with the Court of Appeals for rehearing of its decision. On August 30, 2004, the Court of Appeals denied the Company’s petition for rehearing and remanded the case to the district court for further proceedings. In a ruling served on January 25, 2005, the court granted the plaintiff’s motion for summary judgment and ruled that the Company infringed the plaintiff’s patent. This trial began on February 22, 2005. See Note 13 for a discussion of a subsequent event related to this litigation.

The Company is a defendant in an action brought by the Public Media Center in the Superior Court in San Francisco, California, on December 31, 2001 pursuant to the Separation Agreement. The plaintiff alleged violations of California Health & Safety Code sections 25249.5, et seq (commonly known as “Proposition 65”) and California’s unfair competition law for alleged failure to properly warn consumers of the presence of methylmercury in canned tuna. The plaintiff filed this suit against the three major producers of canned tuna in the U.S. The plaintiff seeks civil penalties of two thousand five hundred

dollars per day and a permanent injunction against the defendants from offering canned tuna for sale in California without providing clear and reasonable warnings of the presence of methylmercury. The Company disputes the plaintiff’s allegations. This case has been consolidated with the California Attorney General case described below and has been set for trial on October 18, 2005. The Company cannot at this time reasonably estimate a range of exposure, if any, of the potential liability.

The Company is a defendant in an action brought by the California Attorney General in the Superior Court in San Francisco, California, on June 21, 2004. The Attorney General alleged violations of California Health & Safety Code sections 25249.5, et seq (commonly known as “Proposition 65”) and California’s unfair competition law for alleged failure to properly warn consumers of the presence of methylmercury in canned tuna. The Attorney General filed this suit against the three major producers of canned tuna in the U.S., including Del Monte. The Attorney General seeks civil penalties of two thousand five hundred dollars per day and a permanent injunction against the defendants from offering canned tuna for sale in California without providing clear and reasonable warnings of the presence of methylmercury. The Company disputes the Attorney General’s allegations. This case has been consolidated with the Public Media Center case described above and has been set for trial on October 18, 2005. The Company cannot at this time reasonably estimate a range of exposure, if any, of the potential liability.

The Company is a defendant in an action brought by PPI Enterprises (U.S.), Inc. in the U.S. District Court for the Southern District of New York on May 25, 1999 pursuant to the Merger Agreement. The plaintiff alleged that Del Monte breached certain purported contractual and fiduciary duties, made misrepresentations and failed to disclose material information to the plaintiff about the Company’s value and the Company’s prospects for sale. The plaintiff also alleges that it relied on the Company’s alleged statements when the plaintiff sold its shares of Del Monte preferred and common stock to a third party at a price lower than that which the plaintiff asserts it could have received absent the Company’s alleged conduct. The complaint seeks compensatory damages of at least $22.0, plus punitive damages. On December 9, 2004, the Company agreed to a settlement with PPI Enterprises. The settlement must be approved by the court in PPI Enterprises’ bankruptcy proceeding. Counter-claims against the Company by third parties in the amount of $1.4 remain outstanding. The Company believes it has accrued adequate reserves to cover any material liability that may result from these counterclaims. The Company disputes these counterclaims.

On September 11, 2003, the Allegheny County Health Department (“ACHD”) issued a notice of violation alleging violations of rules governing air emissions from the power plant at our Pittsburgh, Pennsylvania facility. The alleged violations occurred prior to the Company’s acquisition of this facility in December 2002. The ACHD threatened to impose civil fines and penalties of up to $0.9. The power plant is operated by a third-party operator under contract with the Company. In December 2004, the Company entered into a consent agreement with ACHD under which the Company agreed to pay a civil penalty of approximately $0.2. The Company expects to be indemnified by the third-party operator for a portion of this penalty.

The Company was a defendant in an action brought by David Pafford in the California Superior Court for the County of San Francisco on July 25, 2003. The plaintiff alleged that the Company was responsible for personal injuries sustained as a result of an accident that occurred at the Company’s manufacturing facility in Modesto, California. On December 23, 2003, the plaintiff served an initial offer to compromise, pursuant to California Code of Civil Procedure section 998, on Del Monte for compensatory and punitive damages in the amount of $10.0. The Company settled this case on January 28, 2005.

The Company was a defendant in an action brought by Fleming Companies, Inc., et al., in the United States Bankruptcy Court for the District of Delaware on February 1, 2004. Fleming was seeking a total of $18.0 in alleged preferential transfers, alleged payments due and payable under the terms of the military distribution agreements between the parties, alleged duplicate and overpayments made by Fleming, and deductions to which Fleming alleged it was entitled under various trade promotion programs. The Company previously filed claims against Fleming in the underlying bankruptcy proceeding for amounts owed by Fleming to the Company. The Company and Fleming settled these respective claims, effective February 23, 2005. The Company had accrued adequate reserves to cover the settlement of these proceedings.

The settlements described above, in aggregate, did not have a material impact on the Company’s results of operations.

On November 1, 2004, the Company signed an agreement with a packaging supplier to guarantee up to $1.0 of purchases made by a co-packer for the production of certain Del Monte products. The purchases include packaging materials that Del

Monte had been purchasing on behalf of the co-packer. The co-packer has been producing certain Del Monte products for more than five years. The Company has a supply agreement with the co-packer through July 2006. The guarantee can be terminated in writing by the Company.

During the second quarter of fiscal 2005, the Company made changes in its management and reporting of certain product groupings, which resulted in changes to one of the Company’s operating segments. The StarKist Brands operating segment has been divided into two separate operating segments: StarKist Seafood and Private Label Soup. This operating segment change did not affect the Company’s reportable segments.

The Company’s chief operating decision-maker, its Chief Executive Officer, reviews financial information presented on a consolidated basis accompanied by disaggregated information on net sales and operating income, by operating segment, for purposes of making decisions and assessing financial performance. The chief operating decision-maker reviews assets of the Company on a consolidated basis only. The accounting policies of the individual operating segments are the same as those of the Company.

The following table presents financial information about the Company’s reportable segments:

As of January 30, 2005, the Company’s goodwill was comprised of $213.5 related to the Consumer Products reportable segment and $555.7 related to the Pet Products reportable segment. As of May 2, 2004, the Company’s goodwill was comprised of $215.4 related to the Consumer Products reportable segment and $555.5 related to the Pet Products reportable segment. Goodwill in the Consumer Products reportable segment decreased by $1.3 for the three months ended January 30, 2005 and decreased by $1.9 during the nine months ended January 30, 2005, as a result of adjustments to the Company’s current tax liabilities relating to periods prior to December 20, 2002, the date of the Merger. Goodwill in the Pet Products reportable segment remained unchanged for the three months ended January 30, 2005 and increased by $0.2 during the nine months ended January 30, 2005, respectively, as a result of foreign exchange fluctuations related to goodwill associated with the Company’s Canadian retail pet operations.

As discussed in Note 11, the trial for the Kal Kan litigation began on February 22, 2005. On March 2, 2005, a jury returned a verdict in favor of Mars and awarded Mars damages in the amount of $3.6. Mars has filed a motion requesting a permanent injunction against further sales of the pet products named in this litigation. Total fiscal 2005 net sales and net income of the products involved in this litigation are expected to be insignificant in light of the Company’s total expected net sales and net income. The Company recognized the effect of the jury verdict in the financial results for the three and nine months ended January 30, 2005. The Company is considering an appeal.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This discussion is intended to further the reader’s understanding of the consolidated financial condition and results of operations of our company. It should be read in conjunction with the financial statements included in this quarterly report on Form 10-Q and our annual report on Form 10-K for the year ended May 2, 2004 (the “2004 Annual Report”). These historical financial statements may not be indicative of our future performance. Certain prior period amounts have been reclassified to conform to the current period presentation.

Our Business. Del Monte Foods Company and its consolidated subsidiaries (“Del Monte” or the “Company”) is one of the country’s largest producers, distributors and marketers of premium quality, branded and private label food and pet products for the U.S. retail market, with leading food brands such as Del Monte, StarKist, S&W, Contadina and College Inn, and food and snack brands for dogs and cats such as 9Lives, Kibbles ‘n Bits, Pup-Peroni, Snausages and Pounce.

On December 20, 2002, we acquired various businesses from H.J. Heinz Company (“Heinz”), including Heinz’s U.S. and Canadian pet food and pet snacks, North American tuna, U.S. retail private label soup and U.S. infant feeding businesses (the “Merger”).

Del Monte Corporation (“DMC”) is a direct, wholly-owned subsidiary of DMFC. For reporting purposes, our businesses are aggregated into two reportable segments: Consumer Products and Pet Products. The Consumer Products reportable segment includes the Del Monte Brands, StarKist Seafood and Private Label Soup operating segments, which manufacture, market and sell shelf-stable products, including fruit, vegetable, tomato, broth, infant feeding, tuna and soup products. The Pet Products reportable segment includes the Pet Products operating segment, which manufactures, markets and sells dry and wet pet food and pet snacks. See Note 12 of our condensed consolidated financial statements in this Form 10-Q for a discussion of changes in our operating segments during the current fiscal year.

The following is a summary of some of our key performance indicators that we utilize to assess results of operations:

Our third quarter results include net sales of $861.3 million, which represent strong growth of 6.2% over the third quarter of fiscal 2004. This growth reflects strong marketplace execution in each of our operating segments. As in the second quarter, we continued to leverage our competitive strengths through our diverse portfolio, strong brand equities, product innovation capabilities and go-to-market platform.

We delivered earnings per share of twenty-three cents, compared to earnings per share of twenty-five cents for the same period last year. This decline was primarily due to continued inflationary pressures in steel, as well as energy, logistics and other transportation-related costs. Increased fish costs also negatively impacted our results. We partially offset these cost pressures through our ability to take pricing actions, combined with our continued cost reduction efforts. Despite cost pressures, we continued to increase our marketing investment for our new products and our brands believing that these investments will enable us to remain competitively strong and will position us well for future growth.

Similar to the second quarter, we continued to experience year-over-year cost increases—primarily in steel, fish, energy, logistics and other transportation-related costs. While we have been able to mitigate a substantial portion of these inflationary pressures and higher fish costs through our pricing actions and cost reduction efforts, we expect that this situation will continue to put pressure on our margins. We believe that certain of these costs will continue to be affected by inflationary pressures for the next 12 to 18 months, taking us through fiscal 2006. Accordingly we continue to seek out alternative ways to improve our financial position. For example, we recently refinanced a substantial portion of our outstanding indebtedness. This refinancing, which was completed on February 8, 2005, was initiated to take advantage of the favorable credit environment and lower the interest rate spread on our senior credit facility debt (revolver and term loans), to reduce the coupon rate on certain of our senior subordinated debt, to

extend the maturities and to provide greater operational flexibility. Although the refinancing is expected to negatively impact earnings per share in fiscal 2005 by approximately ten cents, we expect that this refinancing will benefit the Company in the years ahead. We believe that the refinancing is an important investment in our future.

Our discussion and analysis of the financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we re-evaluate our estimates, including those related to trade promotions, coupon redemption, retirement benefits, valuation of brands and goodwill, and retained-insurance liabilities. Estimates in the assumptions used in the valuation of our stock compensation expense are updated at the time of each new issuance of stock-based compensation. We base estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. For all of these estimates, we caution that future events rarely develop exactly as forecasted, and the best estimates routinely require adjustment.

Management has discussed the selection of critical accounting policies and estimates with the Audit Committee of the Board of Directors of DMFC and the Audit Committee has reviewed our disclosure relating to critical accounting policies and estimates in this quarterly report on Form 10-Q. Our significant accounting policies are more fully described in Note 2 to our 2004 Annual Report.

Trade promotions are an important component of the sales and marketing of our products, and are critical to the support of our business. Trade promotion costs include amounts paid to encourage retailers to offer temporary price reductions for the sale of our products to consumers, to advertise our products in their circulars, to obtain favorable display positions in their stores, and to obtain shelf space. We accrue for trade promotions, primarily at the time products are sold to customers, by reducing sales and recording a corresponding accrued liability. The amount we accrue is based on an estimate of the level of performance of the trade promotion, which is dependent upon factors such as historical trends with similar promotions, expectations regarding customer and consumer participation, and sales and payment trends with similar previously offered programs. Our original estimated costs of trade promotions are reasonably likely to change in the future as a result of changes in trends with regard to customer and consumer participation, particularly for new programs and for programs related to the introduction of new products. We perform monthly and quarterly evaluations of our outstanding trade promotions, making adjustments, where appropriate, to reflect changes in our estimates. The ultimate cost of a trade promotion program is dependent on the relative success of the events and the actions and level of deductions taken by our customers for amounts they consider due to them. Final determination of the permissible trade promotion amounts due to a customer may take up to eighteen months from the product shipment date. Our evaluations during the three months ended January 30, 2005 and January 25, 2004 resulted in net reductions to the trade promotion liability and increases in net sales of approximately $5.8 million and $4.1 million, respectively, which related to prior year activity. The nine month impact from these evaluations resulted in net reductions to the trade promotions liability and increases in net sales of approximately $4.3 million and $0.9 million for the nine months ended January 30, 2005 and January 25, 2004 respectively, which related to prior year activity.

We offer coupons to consumers in the normal course of our business. Costs associated with this activity, which we refer to as coupon redemption costs, are accrued in the period in which the coupons are offered. We rely on independent coupon redemption clearing houses to determine the amount to initially accrue for each coupon offering. The initial estimates made by the independent clearinghouses are based upon historical redemption experience rates for similar products or coupon amounts. We perform subsequent estimates that compare our actual redemption rates to the original estimates. We review the assumptions used in the valuation of the estimates and determine an appropriate accrual amount. Adjustments to our initial accrual may be required if our estimated redemption rates vary from our actual redemption rates. During the three and nine months ended January 30, 2005, we experienced no significant adjustments to our estimates relating to coupon redemption.

We sponsor non-contributory defined benefit pension plans (“DB plans”), defined contribution plans, multi-employer plans and certain other unfunded retirement benefit plans for our eligible employees. The amount of DB plans benefits eligible retirees receive is based on their earnings and age. Retirees may also be eligible for medical, dental and life insurance benefits (“other benefits”) if they meet certain age and service requirements at retirement. Generally, other benefit costs are subject to plan maximums, such that the Company and retiree both share in the cost of these benefits.

We utilize independent third party actuaries to calculate the expense and liabilities related to the DB plans benefits and other benefits. DB plans benefits or other benefits, which are expected to be paid, are expensed over the employees’ expected service period. The

actuaries measure our annual DB plans benefits and other benefits expense by relying on certain assumptions made by us. Such assumptions include: the discount rate used to determine projected benefit obligation; the expected long-term rate of return on assets; the rate of increase in compensation levels; and other factors including employee turnover, retirement age, mortality and health care cost trend rates.

These assumptions reflect our historical experience and our best judgment regarding future expectations. Measurement of our annual DB plans benefits expense and other benefits expense utilizes the assumptions, plan assets and plan obligations, determined as of the end of the prior fiscal year (the “measurement date”). Since the DB plans benefits and other benefits liabilities are measured on a discounted basis, the discount rate is a significant assumption. This rate is determined based on an analysis of interest rates for high-quality, long-term corporate debt at each measurement date. The discount rate was 6.25% as of May 2, 2004, the most recent measurement date. The long-term rate of return assumption for DB plans’ assets is based on our historical experience, our DB plans’ investment guidelines and our expectations for long-term rates of return. The long-term rate of return was 8.75% as of May 2, 2004, the most recent measurement date. Our DB plans’ investment guidelines are established based upon an evaluation of market conditions, tolerance for risk, and cash requirements for benefit payments.

During the three and nine months ended January 30, 2005, we recognized DB plans benefits expense of $1.9 million and $5.1 million, respectively, and other benefits expense of $2.6 million and $7.8 million, respectively. Our remaining fiscal 2005 DB plans benefits expense is currently estimated to be approximately $3.1 million and other benefits expense is estimated to be approximately $2.6 million. These estimates incorporate our 2004 assumptions as well as the impact of an amendment to our retiree medical and dental benefit plans, which eliminates benefits for those who are eligible for Medicare Part D, beginning in calendar year 2006. The remaining fiscal 2005 DB plans expense includes the impact of an amendment to our DB plans, which will provide benefits to salaried employees that will transition from a defined contribution plan. The increase in expense under the DB plans associated with the transition of additional salaried employees will be largely offset by the elimination of this expense under the defined contribution plan that was terminated on December 31, 2004. Our actual future DB plans benefits and other benefits expense amounts may vary depending upon various factors, including the accuracy of our original assumptions and future assumptions.

Del Monte produces, distributes and markets products under many different brand names. Although each of our brand names has value, only those that have been purchased have a carrying value on our balance sheet. During an acquisition, the purchase price is allocated to identifiable assets and liabilities, including brand names, based on estimated fair value, with any remaining purchase price recorded as goodwill.

We have evaluated our acquired brand names and determined that some have useful lives that range from 15 to 40 years (“Amortizing Brands”) and others have indefinite useful lives (“Non-Amortizing Brands”). Non-Amortizing Brands typically have significant market share and a history of strong earnings and cash flow, which we expect to continue into the foreseeable future.

Amortizing Brands are amortized over their estimated useful lives. Non-Amortizing Brands and goodwill are not amortized, but are instead tested for impairment at least annually to ensure that projected future cash flows continue to exceed the asset carrying value. Non-Amortizing Brands are considered impaired if the carrying value exceeds the estimated fair value. Goodwill is considered impaired if the book value of the reporting unit containing the goodwill exceeds its estimated fair value. If estimated fair value is less than the book value, the asset is written down to the estimated fair value and an impairment loss is recognized.

The estimated fair value of our Non-Amortizing Brands is determined using the relief from royalty method, which is based upon the rent or royalty we would pay for the use of a brand name if we did not own it. For goodwill, the estimated fair value of a reporting unit is determined using the income approach, which is based on the cash flows that the unit is expected to generate over its remaining life, and the market approach, which is based on market multiples of similar businesses. Annually, we engage third-party valuation experts to assist in this process.

Considerable management judgment is necessary in estimating future cash flows, market interest rates and discount factors, including the operating and macroeconomic factors that may affect them. We use historical financial information and internal plans and projections in making such estimates.

We did not recognize any impairment charges for our Amortizing Brands, Non-Amortizing Brands or goodwill during the three and nine months ended January 30, 2005 and January 25, 2004, respectively. While we currently believe the fair value of all of our intangible assets exceeds carrying value, materially different assumptions regarding future performance and discount rates could result in impairment losses.

We believe an effective way to align the interests of our employees with those of our stockholders is through employee stock-based incentives. We typically issue two types of employee stock-based incentives: stock options and restricted stock type incentives (“Restricted Shares”).

Stock options are stock incentives in which employees benefit to the extent our stock price exceeds the strike price of the stock option before expiration. A stock option is the right to purchase a share of our common stock at a predetermined exercise price. For the stock options that we grant, the employee’s exercise price is typically equivalent to our stock price on the date of the grant. Typically, our employees vest in stock options in equal annual installments over a four or five year period and such options generally have a ten-year term until expiration.

Restricted Shares are stock incentives in which employees receive the rights to own shares of our common stock and do not require the employee to pay an exercise price. Restricted Shares include restricted stock units, performance shares and performance accelerated restricted stock units. Restricted stock units vest over a period of time. Performance shares vest at predetermined points in time if certain corporate performance goals are achieved or are forfeited if such goals are not met. Performance accelerated shares vest at a point in time, which may accelerate if certain stock performance measures are achieved.

During fiscal years prior to 2004, we accounted for our employee stock-based incentives using the intrinsic value method. This method measures expense as the amount by which the market price of the stock exceeds the exercise price on the date of grant. Generally, we did not recognize stock option expense under this method because stock options granted had an exercise price equal to the market price of the stock on the date of the grant.

Effective at the beginning of fiscal 2004, we voluntarily adopted the fair value recognition provisions of Financial Accounting Standards Board (“FASB”) Statement No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”) to account for our stock-based compensation. We elected the prospective method of transition as described in FASB Statement No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure” (“SFAS 148”). Under this method, all employee stock-based compensation granted post adoption is expensed over the vesting period, based on fair value at the time the stock-based compensation is granted. Stock-based compensation granted to our directors is considered employee stock-based compensation for purposes of SFAS 123.

The fair value of stock options granted during the three and nine months ended January 30, 2005 was $0.1 million and $15.1 million respectively, which is expected to be expensed over the four year vesting period. During the third quarter of fiscal 2005 and fiscal 2004, we recognized $2.1 million and $0.8 million of stock compensation expense related to stock options. During the nine months ended January 30, 2005 and January 25, 2004, we recognized $4.8 million and $1.4 million of stock compensation expense related to stock options. We expect to recognize approximately $1.6 million of compensation expense related to stock options during the remainder of fiscal 2005.

Our business exposes us to the risk of liabilities arising out of our operations. For example, liabilities may arise out of claims of employees, customers or other third parties for personal injury or property damage occurring in the course of our operations. We manage these risks through various insurance contracts from third party insurance carriers. We, however, retain an insurance risk for the deductible portion of each claim. The deductible under our loss-sensitive worker’s compensation insurance policy is up to $0.5 million per claim. Our general and automobile insurance policy has a deductible of up to $0.25 million per claim. An independent, third-party actuary is engaged to estimate the ultimate costs of these retained insurance risks. Actuarial determination of our estimated retained-insurance liability is based upon the following factors: losses which have been reported and incurred by us; losses which we have knowledge of but have not yet been reported to us; losses which we have no knowledge of but are projected based on historical information from both our Company and our industry; and the projected costs to resolve these estimated losses. Our estimate of retained-insurance liabilities is subject to change as new events or circumstances develop which might materially impact the ultimate cost to settle these losses. During the three and nine months ended January 30, 2005, we experienced no significant adjustments to our estimates.

In December 2004, the FASB issued Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment” (“SFAS 123R”), which replaces SFAS 123. The accounting required by SFAS 123R is similar to that of SFAS 123, however, the choice between recognizing the fair value of stock options in the income statement or disclosing the pro forma income statement effect of the fair value of stock options in the notes to the financial statements allowed under SFAS 123 has been eliminated in SFAS 123R. SFAS 123R is effective for all interim and annual periods beginning after June 15, 2005, and early adoption is permitted. The adoption of SFAS 123R will increase compensation expense to the extent the requisite service has not yet been rendered for options granted prior to April 28, 2003 that are accounted for under the intrinsic value method. We intend to use the modified prospective transition method to adopt SFAS 123R beginning in fiscal 2006 and expect that the implementation of SFAS 123R will increase our stock-based compensation expense by approximately $2.3 million during the fiscal year ended 2006.

The following discussion provides a summary of results for the three and nine months ended January 30, 2005, compared to the results for the three and nine months ended January 25, 2004.

Net sales. Net sales for the three months ended January 30, 2005 was $861.3 million, an increase of $50.2 million, or 6.2%, compared to $811.1 million for the three months ended January 25, 2004. For the nine months ended January 30, 2005, net sales was $2,333.9 million, an increase of $119.9 million, or 5.4%, compared to $2,214.0 million for the nine months ended January 25, 2004.

Net sales in our Consumer Products reportable segment was $638.3 million for the three months ended January 30, 2005, an increase of 4.8% compared to the three months ended January 25, 2004. Increased pricing drove 3.7% of net sales growth during the quarter, with pricing gains reflected throughout the reportable segment. The remainder of the increase was due to increased volume in the Del Monte Brands and Private Label Soup operating segments, partially offset by decreased volume in the StarKist Seafood operating segment. The Del Monte Brands operating segment had sales of $449.0 million for the quarter, an increase of $20.4 million, or 4.8%, compared to the same period a year ago. We benefited from recent price increases in vegetables and tomatoes combined with recent merchandising events, particularly in fruit. These increases were partially offset by volume declines in vegetables, resulting from price elasticity and reduced promotional activities, and increased competitive activity in infant feeding. The Private Label Soup operating segment had sales of $62.6 million for the quarter, an increase of $4.9 million, or 8.5%, compared to the same period a year ago. Soup sales were higher primarily due to increased volume resulting from effective merchandising programs and lower levels of merchandising from our primary competitor. The StarKist Seafood operating segment had sales of $126.7 million for the quarter, an increase of $4.2 million compared to the same period a year ago. This increase was due to the combined effect of higher pricing partially offset by a volume decline driven by the higher pricing.

Net sales in our Consumer Products reportable segment was $1,714.4 million for the nine months ended January 30, 2005, an increase of 3.5% compared to the nine months ended January 25, 2004. Increased pricing drove 3.3% of net sales growth, with pricing gains reflected throughout the reportable segment. The remainder of the increase was due to increased volume in the Del Monte Brands and Private Label Soup operating segments, partially offset by decreased volume in the StarKist Seafood operating segment. The Del Monte Brands operating segment had sales of $1,163.5 million for the first nine months of fiscal 2005, an increase of $48.4 million, or 4.3%, compared to the same period a year ago. We benefited from price increases in vegetables and tomatoes along with merchandising events, particularly in vegetables. These increases were partially offset by price elasticity, primarily in vegetables, lower infant feeding and tomato sales volume driven by increased competitive activities. The Private Label Soup operating segment had sales of $154.4 million for the first nine months of fiscal 2005, an increase of $11.4 million, or 8.0%, compared to the same period

a year ago. Soup sales were higher primarily due to increased volume resulting from effective merchandising programs along with slightly lower trade promotion expenses. The StarKist Seafood operating segment had sales of $396.5 million for the first nine months of fiscal 2005, a decrease of $2.6 million, or 0.7%, compared to the same period a year ago. Volume decreases resulted from increased competitive activity in canned tuna, the existence of an early May merchandising event which moved some sales into late fiscal 2004 and the effect of higher pricing, partially offset by volume growth in tuna pouch. The impact of these volume decreases was almost entirely offset by price increases.

Net sales in our Pet Products reportable segment was $223.0 million for the three months ended January 30, 2005, an increase of 10.2% compared to $202.3 million for the three months ended January 25, 2004. Volume accounted for 9.2% of the increase in pet products sales. The primary volume driver was our pet foods products, driven primarily by the continued growth of our recently introduced Kibbles ‘n Bits wet dog food, the ability of our private label pet food products to further penetrate the mass-merchandising channels and club stores, and the strength of our 9Lives cat food from re-launch activities.

For the nine months ended January 30, 2005, net sales in our Pet Products reportable segment was $619.5 million, an increase of $62.7 million, or 11.3%, compared to $556.8 million for the nine months ended January 25, 2004. Volume and rate increases accounted for 10.2% and 1.1%, respectively, of the increase in pet products sales. Pet food was also the primary driver for this period, with the majority of the sales increase driven by further penetration of our private label pet food products, in the mass-merchandising channels and club stores, by the continued growth of our recently introduced Kibbles ‘n Bits wet dog food, and by the re-launch of 9Lives cat food.

Cost of products sold. Cost of products sold for the three months ended January 30, 2005 was $629.1 million, an increase of $45.2 million, or 7.7%, compared to $583.9 million for the three months ended January 25, 2004. For the nine months ended January 30, 2005, cost of products sold was $1,732.5 million, an increase of $111.4 million, or 6.9%, compared to the cost of products sold of $1,621.1 million for the nine months ended January 25, 2004. The increases in cost of products sold in both the three and nine month periods were due to cost increases and increased sales volume. Our cost increases were primarily due to higher steel; fish; energy, logistics and other transportation-related costs; commodity and ingredient costs.

Gross margin. Our gross margin percentage for the three months ended January 30, 2005 declined by 1.0 margin point, to 27.0% from 28.0% for the three months ended January 25, 2004. Price increases increased gross margin by 3.0 margin points. This increase was offset by declines of 2.8 margin points related to higher steel, fish, energy, logistics and other transportation-related costs. In addition, we experienced a decline of 1.2 margin points related to an unfavorable product mix primarily resulting from our Pet Products reportable segment product mix shift towards pet foods, which generally have lower gross margins than our pet snack products.

For the nine months ended January 30, 2005, our gross margin percentage declined by 1.0 margin points, to 25.8% from 26.8% for the nine months ended January 25, 2004. Gross margin increased by 2.7 margin points due to price increases. This increase was offset by declines of 2.8 margin points due to cost increases, which primarily related to increased fish, steel, commodity, ingredient, energy, logistics and other transportation-related costs. In addition, we experienced a decline of 0.9 margin points due to an unfavorable product mix due primarily to our Pet Products reportable segment product mix shift towards pet foods, which generally have lower gross margins than our pet snack products.

Selling, general and administrative expense. Selling, general and administrative (“SG&A”) expense for the three months ended January 30, 2005 was $127.8 million, an increase of $15.7 million, or 14.0%, compared to SG&A of $112.1 million for the three months ended January 25, 2004. Our increase in SG&A expense was primarily driven by a $10.0 million increase in customer transportation costs and a greater than 40% increase in marketing investments across all of our reportable segments. Increase in SG&A expense was also due the unfavorable verdict related to the Kal Kan litigation that we received on March 2, 2005. The jury returned a verdict in favor of Mars, awarding them total damages in the amount of $3.6 million. Although we are currently evaluating an appeal of this matter, we have recognized the effect of the jury verdict in the financial results for the three months ended January 30, 2005. These increases were partially offset by lower overhead costs, primarily due to the absence of an accrual related to our Annual Incentive Plan (“AIP”). These increases were also offset by a reduction in information technology (“IT”) costs due to the phase-out of third-party IT services, and a decrease in other benefit costs resulting from the elimination of certain benefits to eligible retirees under Medicare Part D. We believe that it is unlikely that the criteria for bonus payments to employees under the AIP for fiscal 2005 will be achieved. We therefore do not expect to recognize AIP expense for the remainder of fiscal 2005, whereas, the related bonus expense recognized and paid to employees for services rendered during fiscal 2004 was $20.4 million. We had accrued $5.6 million relating to our AIP during the three months ended January 25, 2004.

For the nine months ended January 30, 2005, our SG&A expense was $362.8 million, an increase of $28.0 million, or 8.4%, compared to SG&A expense of $334.8 million for the nine months ended January 25, 2004. Our increase in SG&A expense was primarily driven by a $21.9 million increase in transportation costs, primarily in Del Monte Brands operating segment and Pet Products reportable segment, and a greater than 30% increase in marketing investments across all of our reportable segments. Increase in SG&A expense was also due to the unfavorable verdict related to the Kal Kan litigation that we received on March 2, 2005. The jury returned a verdict in favor of Mars, awarding them total damages in the amount of $3.6 million. Although we are currently evaluating an appeal of this matter,

we have recognized the effect of the jury verdict in the financial results for the nine months ended January 30, 2005. This increase was partially offset by the absence of an accrual related to our AIP plan. Additionally, a decrease in other benefit costs, and phase-out of third-party IT services also partially offset the increase. We accrued $15.8 million for AIP during the nine months ended January 25, 2004.

Operating income. Operating income for the three months ended January 30, 2005 was $104.4 million, a decrease of $10.7 million, or 9.3%, compared to operating income of $115.1 million for the three months ended January 25, 2004. During the three months ended January 30, 2005 and January 25, 2004, costs related to the integration of our operations were $3.2 million and $7.2 million, respectively. There was no corporate-related integration expense for the three months ended January 30, 2005, while $1.5 million represented corporate-related integration expenses for the three months ended January 25, 2004. For the nine months ended January 30, 2005, our operating income was $238.6 million, a decrease of $19.5 million, or 7.6%, compared to operating income of $258.1 million for the nine months ended January 25, 2004. During the nine months ended January 30, 2005 and January 25, 2004, costs related to the integration of our operations were $16.0 million and $21.0 million, respectively. Of these amounts, $4.6 million and $4.2 million represented corporate-related integration expenses, respectively.

Our Consumer Products reportable segment operating income declined by $4.5 million, or 5.7%, to $74.2 million for the three months ended January 30, 2005 from $78.7 million for the three months ended January 25, 2004. This decline occurred despite our ability to increase net sales by 4.8% during this period. Higher inflationary costs, primarily energy, logistics and other transportation-related costs, fish costs and steel costs, along with increased marketing investments are the primary causes for the decline. This decline was partially offset by higher product pricing and reduction in compensation-related expenses.

For the nine months ended January 30, 2005, our Consumer Products reportable segment’s operating income was $183.3 million, an increase of $6.1 million, or 3.4%, compared to $177.2 million for the nine months ended January 25, 2004. The increase for the nine months ended January 30, 2005 primarily resulted from higher product pricing and reduction in compensation and benefit expenses. This increase was partially offset by higher inflationary costs, primarily fish costs, energy, logistics and other transportation-related costs, and steel costs, along with increased marketing investments.

Our Pet Products reportable segment operating income declined by $6.6 million, or 14.9%, to $37.8 million for the three months ended January 30, 2005 from $44.4 million for the three months ended January 25, 2004. While our sales growth was significant, unfavorable product mix shift towards pet foods, along with inflationary pressures, the Kal Kan verdict and marketing investments resulted in our earnings decline.

Our Pet Products reportable segment operating income for the nine months ended January 30, 2005, declined by $19.1 million, or 18.2%. This decline occurred despite Pet Products net sales growth of 11.3% during this period. The earnings impact from our net sales growth was largely offset by an unfavorable product mix shift towards pet foods, which generally have lower gross margins than our pet snack products. We also experienced inflationary pressures, primarily from higher commodity, ingredient, steel, and energy, logistics and other transportation-related costs. In addition, we made significantly higher marketing investments. The decline in operating income was partially offset by continued strong sales volume in Kibbles ‘n Bits wet dog food, private label pet foods and 9Lives cat food, higher product pricing and a reduction in compensation-related expenses.

Our corporate expenses declined by $0.4 million during the three months ended January 30, 2005 compared to the prior year period primarily driven by a $1.5 million decrease in integration expense, which was partially offset by higher overall corporate overhead expenses.

The $6.5 million increase in corporate expenses for the nine months ended January 30, 2005 compared to the prior year period was primarily due to an increase in stock-based compensation expense related to the prospective method of accounting for expensing of stock-based compensation. In fiscal 2004, we began expensing stock-based compensation, in accordance with SFAS 123. Options were granted during the second quarter last year and as a result expense incurred during the first quarter of fiscal 2004 was not significant. Increase in corporate expenses was also due to higher legal fees, Sarbanes-Oxley compliance costs and overall corporate overhead expenses.

Interest expense and other expense. Interest expense for the three and nine months ended January 30, 2005 declined by $5.5 million and $15.9 million, respectively, as compared to the three and nine months ended January 25, 2004. This reduction was due to substantial principal payments made during fiscal 2004 along with the repricing of our credit facilities in January 2004, which reduced our effective interest rate. On February 8, 2005, we completed the refinancing of a significant portion of our outstanding indebtedness to further reduce the applicable interest rate spread on our senior credit facility debt (revolver and term loans), to reduce the coupon rate on a portion of our senior subordinated debt, and to provide us with enhanced operational flexibility. In addition, during the three and nine months ended January 30, 2005, other expense increased by $0.6 million and $4.7 million, respectively which primarily resulted from a decline associated with the fair value of our derivative contracts. As previously discussed, we completed a refinancing of a substantial portion of our debt on February 8, 2005. In connection with the refinancing, we expect that we will recognize approximately $33.5 million of expense from fees and write-offs of premium related to our 9¹/4% Notes and write-offs of deferred fees in the fourth quarter of fiscal 2005. We expect that interest expense in fiscal 2006 will be approximately $9 million lower than it would have been had we not completed the refinancing.

Provision for Income Taxes. The effective tax rate for the three months ended January 30, 2005 and January 25, 2004 was 38.0% for both periods. For the nine months ended January 30, 2005 and January 25, 2004, the effective tax rates were 38.0% and 36.6%, respectively. The rate for the nine months ended January 30, 2005 was higher than the rate for the nine months ended January 25, 2004 primarily due to an increase in state taxes and larger non-deductible charges during fiscal 2005 associated with higher employee stock-based compensation expense.

The American Jobs Creation Act of 2004 (the “Act”) was signed into law on October 22, 2004. One of the provisions in the Act provides for a tax deduction relating to income attributable to U.S. production activities. Although we qualify for the deduction beginning in fiscal 2006, we cannot at this time reasonably estimate the amount of additional deductions which will arise from the Act.

Net Income. Net income for the three months ended January 30, 2005 decreased by $5.0 million to $48.5 million from $53.5 million for the three months ended January 25, 2004. For the nine months ended January 30, 2005, net income decreased by $9.4 million to $98.6 million from $108.0 million for the nine months ended January 25, 2004.

We have cash requirements that vary significantly based primarily on the timing of our inventory production for fruit, vegetable and tomato items. Typically inventory production relating to these items peaks during the first and second fiscal quarters. Our most significant cash needs relate to this seasonal inventory production, as well as to continuing cash requirements related to the production of our other products. In addition, our cash is used for the repayment, including interest and fees, of our primary debt obligations (i.e. our revolver, term loans, senior subordinated notes and, if necessary, letters of credit), expenditures for capital assets, lease payments for some of our equipment and properties, and other general business purposes. Our primary sources of cash are funds we receive as payment for the products we produce and sell and from our revolving credit facility.

During the three and nine months ended January 30, 2005, we repaid a net amount of $127.1 million and borrowed a net amount of $14.1 million, respectively, under our revolving credit facility and other short-term borrowings. During these same periods, we also made scheduled principal repayments of $1.5 million and $4.6 million, respectively, toward our then-existing Term B Loan. During the remainder of fiscal 2005, as a result of the refinancing consummated on February 8, 2005, we have no scheduled repayment of our senior credit facility.

On February 8, 2005, we completed the refinancing of a significant portion of our outstanding indebtedness. The refinancing was initiated to reduce the applicable interest rate spread, on our senior credit facility debt (revolver and term loans), to reduce the coupon rate on a portion of our senior subordinated debt, and to provide us with enhanced operational flexibility. The refinancing included the consummation of a cash tender offer and consent solicitation (the “Offer”) with respect to our outstanding 9¹/4% senior subordinated notes due 2011 (the “9¹/4% Notes”), the private placement offering of $250.0 million principal amount of new 6³/4% senior subordinated notes due 2015 (the “6³/4% Notes”) and the consummation of a new $950.0 million senior credit facility (the “New Credit Facility”). We used the proceeds from the sale of the 6³/4% Notes, borrowings under the New Credit Facility, and cash on hand to fund the payment of consideration and costs related to the Offer and to repay amounts outstanding under our previous senior credit facility. The New Credit Facility is comprised of a $350.0 million revolving credit facility with a term of six years, a $450.0 million term loan A with a term of six years, and a $150.0 million term loan B with a term of seven years.

The Offer expired on February 7, 2005 (the “Expiration Time”). As of the expiration time of the Offer, $297.5 million aggregate principal amount of the 9¹/4% Notes had been validly tendered and not withdrawn, representing approximately 99.2% of the outstanding aggregate principal amount of the 9¹/4% Notes. We accepted for payment and paid for all 9¹/4% Notes validly tendered and not validly withdrawn on or prior to the expiration time.

The following table reflects the debt balances affected by the February 8, 2005 refinancing, as compared to the balances at January 30, 2005 (in millions):

We are scheduled to repay $0.2 of our long-term debt during the remainder of fiscal 2005. As of February 8, 2005, reflecting the consummation of the refinancing, scheduled payments of long-term debt for each of the five succeeding fiscal years are as follows (in millions):

We believe that cash provided by operations and availability under our new revolving credit facility will provide adequate funds for our working capital needs, planned capital expenditures and debt service obligations for at least the next 12 months. Our current intention is to utilize cash provided by operations to continue to make long-term debt principal prepayments during the remainder of fiscal 2005. However, we may consider alternative uses for our cash provided by operations, including acquisition opportunities, payment of dividends and/or common stock buyback plans.

At February 8, 2005, agreements relating to our long-term debt including the credit agreement governing the New Credit Facility and the indentures governing the senior subordinated notes (including the 6³/4% Notes), contained covenants that restrict the ability of Del Monte Corporation and its subsidiaries, among other

things, to incur or guarantee indebtedness, issue capital stock, pay dividends on and redeem capital stock, prepay certain indebtedness, enter into transactions with affiliates, make other restricted payments, including investments, incur liens, consummate asset sales and enter into consolidations or mergers. Certain of these covenants are also applicable to Del Monte Foods Company. Our credit agreement governing the New Credit Facility also requires compliance with certain financial tests, including a maximum total debt ratio and a minimum fixed charge coverage ratio. The maximum total debt ratio becomes more restrictive over time. Compliance with these covenants will be monitored periodically in order to assess the likelihood of continued compliance. Our ability to continue to comply with these covenants may be affected by events beyond our control. If we are unable to comply with the covenants under the New Credit Facility or the indentures governing our senior subordinated notes, there would be a default, which, if not waived, could result in the acceleration of a significant portion of our indebtedness.

The following table summarizes our contractual and other cash obligations at January 30, 2005, except for Long-term Debt which reflects the February 8, 2005 refinancing:

During the nine months ended January 30, 2005, our cash and cash equivalents decreased by $27.7 million primarily due to the net impact of $5.4 million used in operating activities, $41.2 million used in investing activities, and $17.4 million provided by financing activities.

Operating Activities. Cash used in operating activities for the nine months ended January 30, 2005 was $5.4 million, which was $8.0 million more than the $2.6 million provided by operating activities for the nine months ended January 25, 2004. This increase was primarily due to lower operating earnings and higher taxes paid which were partially offset by lower interest expense. The cash requirements of the Del Monte Brands operating segment vary significantly during the year to coincide with the seasonal growing cycles of fruit, vegetables and tomatoes. The vast majority of the Del Monte Brands’ inventories are produced during the packing season, from June through October then depleted during the remaining months of the fiscal year. As a result, the vast majority of our total cash flow is generated during the second half of the fiscal year.

Investing Activities. Cash used in investing activities for the nine months ended January 30, 2005 was $41.2 million compared to $58.2 million for the nine months ended January 25, 2004. Capital spending during the first nine months of fiscal 2005 was $15.8 million lower than it was during the first nine months of fiscal 2004 primarily due to lower integration-related capital projects during the current year. We received net proceeds of $8.5 million from the sale of certain real property and other long-term assets during the first nine months of fiscal 2005. In addition, during the second quarter of fiscal 2005, we spent $7.2 million in connection with the acquisition of a packing business, located in Mexico, and related assets, which contributed to the use of cash for investing activities for the period.

Financing Activities. Cash provided by financing activities for the nine months ended January 30, 2005 was $17.4 million compared to $29.4 million for the nine months ended January 25, 2004. During the first nine months of fiscal 2005, we borrowed a net of $14.1 million in short-term borrowings, which was $20.2 million lower than net short-term borrowings of $34.3 million during the first nine months of fiscal 2004. During the nine months ended January 30, 2005 and January 25, 2004, we made scheduled repayments of $4.6 million and $5.5 million, respectively, towards our Term B Loan principal. Additionally, as a result of an increased number of stock options exercised by employees and former employees, we had a $7.3 million increase in the issuance of common stock in the nine months ended January 30, 2005 compared to the prior year period.

Transactions with Texas Pacific Group. Through affiliated entities, Texas Pacific Group (“TPG”), a private investment group, was a majority stockholder of DMFC common stock prior to the Merger. During the three months ended July 27, 2003, these affiliated entities, TPG Partners, L.P. and TPG Parallel I, L.P., exercised their right pursuant to the Stockholder Rights Agreement (“Stockholder Rights Agreement”), dated as of June 12, 2002, to request the filing of a shelf registration of DMFC common stock. Under the terms of the Stockholder Rights Agreement, TPG had the right, subject to certain restrictions, to demand that we file up to two registration statements to register the resale of DMFC common stock owned by them. On September 9, 2003, we filed a shelf registration statement on Form S-3 in accordance with the TPG request, covering 24,341,385 shares of our common stock held by TPG Partners, L.P. and TPG Parallel I, L.P. On November 21, 2003, we filed an amendment to the shelf registration statement on Form S-3, which incorporated our quarterly report on Form 10-Q for the quarter ended July 27, 2003. On November 25, 2003, the shelf registration statement was declared effective by the Securities and Exchange Commission. On January 14, 2004, Del Monte, TPG Partners, L.P., TPG Parallel I, L.P. and Goldman, Sachs & Co. entered into an Underwriting Agreement in connection with the sale by TPG Partners, L.P. and TPG Parallel I, L.P. of 12,000,000 shares of our common stock covered by the shelf registration statement for $10.08 per share. We did not receive any proceeds from the sale. On September 10, 2004, Del Monte, TPG Partners, L.P., TPG Parallel I, L.P. and Lehman Brothers Inc. entered into an Underwriting Agreement in connection with the sale by TPG Partners, L.P. and TPG Parallel I, L.P. of the remaining 12,341,385 shares of our common stock covered by the shelf registration statement for $132,052,820 in aggregate. We did not receive any proceeds from the sale. To date, we have incurred expenses of approximately $0.3 million in connection with performing our obligations under the Stockholder Rights Agreement.

Compensation earned by Mr. William Price as a member of the Board of Directors of DMFC, excluding options, was paid to TPG Partners, L.P. Mr. Price is an officer of TPG. On September 30, 2004, Mr. Price ceased being a member of the Company’s Board of Directors. For the nine months ended January 30, 2005, Mr. Price earned a $0.02 million as well as 1,666 shares of Del Monte Foods Company common stock.

This quarterly report on Form 10-Q, including the section entitled “Item 1. Financial Statements” and this section entitled “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations”, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Act of 1934. Statements that are not historical facts, including statements about our beliefs or expectations, are forward-looking statements. These statements are based on our plans, estimates and projections at the time we make the statements, and you should not place undue reliance on them. In some cases, you can identify forward-looking statements by the use of forward-looking terms such as “may,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue” or the negative of these terms or other comparable terms.

Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in or suggested by any forward-looking statement. These factors include, among others:

Certain aspects of these factors are described in more detail in our filings with the Securities and Exchange Commission, including the section entitled “Factors That May Affect Our Future Results and Stock Price” in our 2004 Annual Report. In addition to the foregoing, other economic, industry and business conditions may affect our future results, for example:

A substantial portion of our retail tuna pouch products are produced by a third-party co-packer in Ecuador. This co-packer was required to comply with new environmental regulations regarding the treatment and disposal of wastewater generated by the facility by February 28, 2005. The co-packer did not achieve compliance by that date but has informed us that it believes it will be able to obtain an extension from the government. There can be no assurance that such an extension will be granted. If our co-packer does not obtain an extension, production by such co-packer could be interrupted. Any interruption of supply from such co-packer or steps that may be taken by the Company to mitigate any such supply disruption, including an increase in inventory in anticipation of this possible production interruption, could adversely affect our results of operations.

All forward-looking statements in this quarterly report on Form 10-Q are qualified by these cautionary statements and are made only as of the date of this report. We undertake no obligation, other than as required by law, to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

During the three and nine months ended January 30, 2005, we were primarily exposed to the risk of loss resulting from adverse changes in interest rates and commodity prices, which affect interest on our floating-rate obligations and the cost of our raw materials, respectively.

Interest Rates. Our debt primarily consists of fixed rate notes and floating rate term loans. We also use a floating rate revolving credit facility to fund seasonal working capital needs. Interest expense on our floating rate debt is typically calculated based on a fixed spread over a reference rate (i.e. LIBOR). Therefore, fluctuation in market interest rates will cause interest expense increases or decreases on a given amount of floating rate debt. The market value of our fixed rate notes fluctuates as interest rates rise or fall; however, because debt is recorded at historical cost these changes have no impact on our earnings.

We manage a portion of our interest rate risk related to floating interest expense by entering into interest rate swaps in which we receive floating rate payments and make fixed rate payments. We currently have six pay-fixed interest rate swaps with a combined notional amount of $300.0 million. Two interest rate swaps with a combined notional amount of $125.0 million matured on September 30, 2004. All of our remaining interest rate swaps have been formally designated as cash flow hedges. During the three months ended January 30, 2005, our interest rate cash flow hedges resulted in a $1.3 million increase to other comprehensive income (“OCI”), a $0.8 million increase to deferred tax liabilities. During the three months ended January 25, 2004, our interest rate cash flow hedges resulted in a $0.7 million increase to OCI and a $0.5 million increase to deferred tax liabilities.

During the nine months ended January 30, 2005, our interest rate cash flow hedges resulted in a $1.6 million increase to OCI, a $1.0 million increase to deferred tax liabilities and a $0.3 million decrease in other expense. During the nine months ended January 25, 2004, our interest rate cash flow hedges resulted in a $1.2 million decrease to OCI, a $0.7 million decrease in deferred tax liabilities and a $0.3 million decrease in other income.

During the nine months ended January 30, 2005, we reduced interest expense by $1.4 million to reflect the amortization of a $6.9 million swap liability that existed prior to formal hedge designation of two interest rate swaps on December 31, 2002. At January 30, 2005, the swap liability was fully amortized in conjunction with the maturity of the $125.0 million swaps that matured on September 30, 2004. During the three and nine months ended January 25, 2004, we reduced interest expense by $1.0 million and $3.2 million, respectively, to reflect the amortization of the $6.9 million swap liability.

On January 30, 2005, the fair values of our interest rate swaps were recorded as assets of $2.9 million in other non-current assets. On January 25, 2004, the fair value of the interest rate swaps was recorded as a liability of $5.4 million in other non-current liabilities.

On February 8, 2005, we completed the refinancing of a significant portion of our outstanding indebtedness. The refinancing included the consummation of a cash tender offer and consent solicitation (the “Offer”) with respect to our outstanding 9¹/4% senior subordinated notes due 2011 (the “9¹/4% Notes”), the private placement offering of $250.0 million principal amount of new 6³/4% senior subordinated notes due 2015 (the “6³/4% Notes”) and the consummation of a new $950.0 million senior credit facility (the “New Credit Facility”). We used the proceeds from the sale of the 6³/4% Notes and borrowings under the New Credit Facility to fund

the payment of consideration and costs related to the Offer and to repay amounts outstanding under our previous credit facility. The New Credit Facility is comprised of a $350.0 million revolving credit facility with a term of six years, a $450.0 million term loan A with a term of six years, and a $150.0 million term loan B with a term of seven years.

Due to the refinancing of a significant portion of our outstanding indebtedness on February 8, 2005, we presented in the table below our market risk associated with debt obligations and interest rate derivatives as of February 8, 2005. Fair values are based on quoted market prices as of February 8, 2005. Variable interest rates represent the weighted average rates in effect on February 8, 2005.

Commodities Prices. Certain commodities such as corn, wheat, soybean meal and soybean oil are used in the production of our products. Generally these commodities are purchased at current market prices. We use futures or options contracts, as deemed appropriate to reduce the effect of price fluctuations on anticipated purchases. We account for these commodities derivatives as either cash flow or economic hedges. For cash flow hedges, the effective portion of gains and losses is recognized as part of cost of products sold and the ineffective portion is recognized as other income or expense. Changes in the fair value of economic hedges are recorded directly as other income or expense. These contracts generally have a term of less than eighteen months.

During the nine months ended January 30, 2005, the prices of commodities, such as soybean meal, corn and wheat, decreased from substantial highs experienced towards the end of fiscal 2004. As futures contract rates for these commodities have declined, we have elected to increase our hedge positions to cover substantially all of our remaining projected requirements for fiscal 2005 along with a significant portion of our projected requirements for fiscal 2006. Our commodities hedges were recorded as a liability of $2.7 million on January 30, 2005. The fair value of our commodity hedge positions was $1.5 million at January 25, 2004.

The table below presents the changes in the following balance sheet account and the impact on income statement accounts:

The table below presents our commodity derivative contracts as of January 30, 2005. The fair values included are based on quoted market prices.

Foreign Currency Rates. During the period from December 20, 2002 through January 30, 2004, we had Euro-denominated term loan obligations. We also had a US Dollar/Euro currency swap, which we entered into as an economic hedge of the periodic principal and interest payments related to our Euro-denominated term loan obligations. During the three and nine months ended January 30, 2005, we had no exposure to fluctuations in the US Dollar/Euro exchange rate. During the three and nine months ended January 25, 2004, an increase in the fair value of the currency swap resulted in an increase in other assets and a corresponding increase in other income of $3.6 million and $7.4 million, respectively.

We evaluated the effectiveness of the design and operation of our disclosure controls and procedures, or “Disclosure Controls,” as of the end of the period covered by this quarterly report on Form 10-Q. This evaluation, or “Controls Evaluation” was performed under the supervision and with the participation of management, including our Chairman of the Board, President, Chief Executive Officer and Director (our “CEO”) and our Executive Vice President, Administration and Chief Financial Officer (our “CFO”).

The certifications of the CEO and the CFO required by Rule 13a-14 of the Securities Exchange Act of 1934, or the “Rule 13a-14 Certifications” are filed as Exhibits 31.1 and 31.2 of this quarterly report on Form 10-Q. This “Controls and Procedures” section of the quarterly report includes the information concerning the Controls Evaluation referred to in the Rule 13a-14 Certifications and it should be read in conjunction with the Rule 13a-14 Certifications for a more complete understanding of the topics presented.

Disclosure Controls are controls and procedures designed to reasonably ensure that information required to be disclosed in our reports filed under the Exchange Act, such as this quarterly report, is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms. Disclosure Controls include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to

permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Our management, including our CEO and CFO, does not expect that our Disclosure Controls or our internal controls will prevent all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within Del Monte have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with associated policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Based on the Controls Evaluation, and in light of the foregoing discussion, our CEO and CFO have concluded that as of the end of the period covered by this quarterly report on Form 10-Q, our Disclosure Controls were effective and were operating at the reasonable assurance level. There were no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

Except as set forth below, there have been no material developments in the legal proceedings reported in our annual report on Form 10-K for the year ended May 2, 2004.

We are a defendant in an action brought by Kal Kan Foods, Inc., which was a subsidiary of Mars, Inc., in the U.S. District Court for the Central District of California on December 19, 2001. The plaintiff alleged infringement of U.S. Patent No. 6,312,746 (the “746 Patent”). Specifically, the plaintiff alleged that the technology used in the production of Pounce Purr-fections, Pounce Delectables (currently named Pounce Delecta-bites), Meaty Bones Savory Bites (currently named Snausages Scooby Snack Stuffers) and certain other pet treats infringes the 746 Patent. The plaintiff is seeking compensatory damages in the amount of $2.3 million for alleged infringement of its patent and a permanent injunction against further sales of products made with the allegedly infringing technology. Although the plaintiff had originally been seeking the award of treble damages and attorneys’ fees for alleged willful infringement of its patent, the plaintiff is no longer seeking such damages or fees following a February 2005 agreement between the parties to narrow the issues at trial. On July 21, 2003, the court granted us motion for summary judgment, which was entered as a final judgment on July 29, 2003. On August 27, 2003, the plaintiff filed a notice of appeal to the U.S. Court of Appeals for the Federal Circuit. On July 29, 2004, the Court of Appeals issued its decision which overturned the district court’s decision on summary judgment and remanded the case to the district court for further proceedings. On August 6, 2004, we filed a petition with the Court of Appeals for rehearing of its decision. On August 30, 2004, the Court of Appeals denied our petition for rehearing and remanded the case to the district court for further proceedings. In a ruling served on January 25, 2005, the court granted the plaintiff’s motion for summary judgment and ruled that we infringed the plaintiff’s patent. This trial began on February 22, 2005. On March 2, 2005, a jury returned a verdict in favor of Mars and awarded Mars damages in the amount of $3.6 million. Mars has filed a motion requesting a permanent injunction against further sales of the pet products named in this litigation. Total fiscal 2005 net sales and net income of the products involved in this litigation are expected to be insignificant in light of our total expected net sales and net income. We have recognized the effect of the jury verdict in the financial results for the three and nine months ended January 30, 2005. We are considering an appeal.

We are a defendant in an action brought by the Public Media Center in the Superior Court in San Francisco, California, on December 31, 2001 pursuant to the Separation Agreement. The plaintiff alleged violations of California Health & Safety Code sections 25249.5, et seq (commonly known as “Proposition 65”) and California’s unfair competition law for alleged failure to properly warn consumers of the presence of methylmercury in canned tuna. The plaintiff filed this suit against the three major producers of canned tuna in the U.S. The plaintiff seeks civil penalties of two thousand five hundred dollars per day and a permanent injunction against the defendants

from offering canned tuna for sale in California without providing clear and reasonable warnings of the presence of methylmercury. We dispute the plaintiff’s allegations. This case has been consolidated with the California Attorney General case described below and has been set for trial on October 18, 2005. We cannot at this time reasonably estimate a range of exposure, if any, of the potential liability.

We are a defendant in an action brought by the California Attorney General in the Superior Court in San Francisco, California, on June 21, 2004. The Attorney General alleged violations of California Health & Safety Code sections 25249.5, et seq (commonly known as “Proposition 65”) and California’s unfair competition law for alleged failure to properly warn consumers of the presence of methylmercury in canned tuna. The Attorney General filed this suit against the three major producers of canned tuna in the U.S., including Del Monte. The Attorney General seeks civil penalties of two thousand five hundred dollars per day and a permanent injunction against the defendants from offering canned tuna for sale in California without providing clear and reasonable warnings of the presence of methylmercury. We dispute the Attorney General’s allegations. This case has been consolidated with the Public Media Center case described above and has been set for trial on October 18, 2005. We cannot at this time reasonably estimate a range of exposure, if any, of the potential liability.

We are a defendant in an action brought by PPI Enterprises (U.S.), Inc. in the U.S. District Court for the Southern District of New York on May 25, 1999 pursuant to the Merger Agreement. The plaintiff alleged that Del Monte breached certain purported contractual and fiduciary duties, made misrepresentations and failed to disclose material information to the plaintiff about our value and our prospects for sale. The plaintiff also alleges that it relied on our alleged statements when the plaintiff sold its shares of Del Monte preferred and common stock to a third party at a price lower than that which the plaintiff asserts it could have received absent our alleged conduct. The complaint seeks compensatory damages of at least $22.0 million, plus punitive damages. On December 9, 2004, we agreed to a settlement with PPI Enterprises. The settlement must be approved by the court in PPI Enterprises’ bankruptcy proceeding. Counter-claims against us by third parties in the amount of $1.4 million remain outstanding. We believe we have accrued adequate reserves to cover any material liability that may result from these counterclaims. We dispute these counterclaims.

On September 11, 2003, the Allegheny County Health Department (“ACHD”) issued a notice of violation alleging violations of rules governing air emissions from the power plant at our Pittsburgh, Pennsylvania facility. The alleged violations occurred prior to our acquisition of this facility in December 2002. The ACHD threatened to impose civil fines and penalties of up to $0.9 million. The power plant is operated by a third-party operator under contract with us. In December 2004, we entered into a consent agreement with ACHD under which we agreed to pay a civil penalty of approximately $0.2 million. We expect to be indemnified by the third-party operator for a portion of this penalty.

We were a defendant in an action brought by David Pafford in the California Superior Court for the County of San Francisco on July 25, 2003. The plaintiff alleged that we were responsible for personal injuries sustained as a result of an accident that occurred at our manufacturing facility in Modesto, California. On December 23, 2003, the plaintiff served an initial offer to compromise, pursuant to California Code of Civil Procedure section 998, on Del Monte for compensatory and punitive damages in the amount of $10.0 million. We settled this case on January 28, 2005.

We were a defendant in an action brought by Fleming Companies, Inc., et al., in the United States Bankruptcy Court for the District of Delaware on February 1, 2004. Fleming was seeking a total of $18.0 million in alleged preferential transfers, alleged payments due and payable under the terms of the military distribution agreements between the parties, alleged duplicate and overpayments made by Fleming, and deductions to which Fleming alleged it was entitled under various trade promotion programs. We previously filed claims against Fleming in the underlying bankruptcy proceeding for amounts owed by Fleming to us. We settled these respective claims with Fleming, effective February 23, 2005. We had accrued adequate reserves to cover the settlement of these proceedings.

The settlements described above, in aggregate, did not have a material impact on our results of operations.

(a) On December 31, 2004, Marc D. Haberman’s employment with the Company terminated and accordingly the Employment Agreement between Mr. Haberman and Del Monte Corporation, filed as an exhibit to the current report on Form 8-K filed by the Company on November 17, 2004, terminated in accordance with its terms. Mr. Haberman was Senior Vice President and Managing Director of Del Monte Brands.

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.


DEL MONTE FOODS COMPANY

By:		/S/ RICHARD G. WOLFORD
		Richard G. Wolford Chairman of the Board, President and Chief Executive Officer; Director

By:		/S/ DAVID L. MEYERS
		David L. Meyers Executive Vice President, Administration and Chief Financial Officer


PART I.		FINANCIAL INFORMATION

ITEM 1.		FINANCIAL STATEMENTS
		CONDENSED CONSOLIDATED BALANCE SHEETS
		CONDENSED CONSOLIDATED STATEMENTS OF INCOME
		CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
		NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ITEM 2.		MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 3.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 4.		CONTROLS AND PROCEDURES

PART II.		OTHER INFORMATION

ITEM 1.		LEGAL PROCEEDINGS

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

ITEM 3.		DEFAULTS UPON SENIOR SECURITIES

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

ITEM 5.		OTHER INFORMATION

ITEM 6.		EXHIBITS

SIGNATURES


	January 30, 2005			May 2, 2004
ASSETS
Cash and cash equivalents	$	8.6		$	36.3
Trade accounts receivable, net of allowance		228.0			222.3
Inventories		1,000.6			823.5
Deferred tax assets		12.7			8.3
Prepaid expenses and other current assets		118.6			132.8
Assets of discontinued operations		2.6			2.5

TOTAL CURRENT ASSETS		1,371.1			1,225.7

Property, plant and equipment, net		801.8			820.9
Goodwill		769.2			770.9
Intangible assets, net		586.9			585.1
Other assets, net		50.5			57.1

TOTAL ASSETS	$	3,579.5		$	3,459.7

LIABILITIES AND STOCKHOLDERS’ EQUITY

Accounts payable and accrued expenses	$	401.3		$	427.2
Short-term borrowings		14.9			0.8
Current portion of long-term debt		6.3			6.3

TOTAL CURRENT LIABILITIES		422.5			434.3

Long-term debt		1,363.9			1,369.5
Deferred tax liabilities		244.7			226.2
Other non-current liabilities		304.9			300.8

TOTAL LIABILITIES		2,336.0			2,330.8

Stockholders’ equity:
Common stock ($0.01 par value per share, shares authorized: 500,000,000; issued and outstanding: 211,022,992 at January 30, 2005 and 209,691,132 at May 2, 2004)	$	2.1		$	2.1
Additional paid-in capital		958.2			943.6
Accumulated other comprehensive loss		(0.3	)		(1.7	)
Retained earnings		283.5			184.9

TOTAL STOCKHOLDERS’ EQUITY		1,243.5			1,128.9

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	3,579.5		$	3,459.7


	Three Months Ended					Nine Months Ended
	January 30, 2005			January 25, 2004		January 30, 2005			January 25, 2004
Net sales	$	861.3		$	811.1	$	2,333.9		$	2,214.0
Cost of products sold		629.1			583.9		1,732.5			1,621.1

Gross profit		232.2			227.2		601.4			592.9
Selling, general and administrative expense		127.8			112.1		362.8			334.8

Operating income		104.4			115.1		238.6			258.1
Interest expense		25.9			31.4		76.4			92.3
Other income (expense)		(0.1	)		0.5		(2.6	)		2.1

Income from continuing operations before income taxes		78.4			84.2		159.6			167.9
Provision for income taxes		29.8			32.0		60.6			61.5

Income from continuing operations		48.6			52.2		99.0			106.4

Income (loss) from discontinued operations before income taxes		—			3.4		(0.7	)		4.9
Provision (benefit) for income taxes		0.1			2.1		(0.3	)		3.3

Income (loss) from discontinued operations		(0.1	)		1.3		(0.4	)		1.6

Net income	$	48.5		$	53.5	$	98.6		$	108.0

Earnings per common share
Basic:
Continuing operations	$	0.23		$	0.25	$	0.47		$	0.51
Discontinued operations		—			0.01		—			0.01

Total	$	0.23		$	0.26	$	0.47		$	0.52

Diluted:
Continuing operations	$	0.23		$	0.25	$	0.47		$	0.50
Discontinued operations		—			—		—			0.01

Total	$	0.23		$	0.25	$	0.47		$	0.51


	Nine Months Ended
	January 30, 2005			January 25, 2004
OPERATING ACTIVITIES:
Net income	$	98.6		$	108.0
(Income) loss from discontinued operations		0.4			(1.6	)

Income from continuing operations		99.0			106.4
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		68.2			64.7
Deferred taxes		14.1			(2.1	)
Stock compensation expense		6.0			2.9
Other non-cash items, net		5.0			0.8
Changes in operating assets and liabilities		(197.7	)		(170.1	)

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		(5.4	)		2.6

INVESTING ACTIVITIES:
Capital expenditures		(42.5	)		(58.3	)
Proceeds from disposal of assets		8.5			0.1
Acquisition		(7.2	)		—

NET CASH USED IN INVESTING ACTIVITIES		(41.2	)		(58.2	)

FINANCING ACTIVITIES:
Proceeds from short-term borrowings		373.6			292.8
Payments on short-term borrowings		(359.5	)		(258.5	)
Principal payments on long-term debt		(4.6	)		(5.5	)
Issuance of common stock		7.9			0.6

NET CASH PROVIDED BY FINANCING ACTIVITIES		17.4			29.4

Effect of exchange rate changes on cash and cash equivalents		1.9			1.8
NET CASH PROVIDED BY (USED IN) DISCONTINUED OPERATIONS		(0.4	)		2.0
NET CHANGE IN CASH AND CASH EQUIVALENTS		(27.7	)		(22.4	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		36.3			42.7

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	8.6		$	20.3


	Three Months Ended				Nine Months Ended
	January 30, 2005		January 25, 2004		January 30, 2005		January 25, 2004
Net income, as reported	$	48.5	$	53.5	$	98.6	$	108.0
Add: Stock-based employee compensation expense included in reported net income, net of tax		1.6		0.9		3.7		1.8
Deduct: Total stock-based employee compensation expense determined under the fair value based method for all awards, net of tax		2.0		1.4		4.7		3.3

Pro forma net income	$	48.1	$	53.0	$	97.6	$	106.5

Earnings per share:
Basic - as reported	$	0.23	$	0.26	$	0.47	$	0.52
Basic - pro forma	$	0.23	$	0.25	$	0.46	$	0.51
Diluted - as reported	$	0.23	$	0.25	$	0.47	$	0.51
Diluted - pro forma	$	0.23	$	0.25	$	0.46	$	0.51

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	January 30, 2005		May 2, 2004
Inventories:
Finished products	$	836.0	$	622.1
Raw materials and in-process material		54.7		59.8
Packaging material and other		79.2		104.9
LIFO reserve		30.7		36.7

Total Inventories	$	1,000.6	$	823.5


	Three Months Ended				Nine Months Ended
	January 30, 2005		January 25, 2004		January 30, 2005		January 25, 2004
Basic earnings per common share:
Numerator:
Net income from continuing operations	$	48.6	$	52.2	$	99.0	$	106.4

Denominator:
Weighted average shares		210,956,990		209,584,143		210,329,324		209,469,808

Basic earnings per common share	$	0.23	$	0.25	$	0.47	$	0.51

Diluted earnings per common share:
Numerator:
Net income from continuing operations	$	48.6	$	52.2	$	99.0	$	106.4

Denominator:
Weighted average shares		210,956,990		209,584,143		210,329,324		209,469,808
Effect of dilutive securities		1,751,254		1,884,543		1,825,872		1,396,956

Weighted average shares and equivalents		212,708,244		211,468,686		212,155,196		210,866,764

Diluted earnings per common share	$	0.23	$	0.25	$	0.47	$	0.50


	January 30, 2005		May 2, 2004
Short-term borrowings:
Revolver	$	13.3	$	—
Other		1.6		0.8

	$	14.9	$	0.8

Current portion of long-term debt	$	6.3	$	6.3

Long-term debt:
Term B Loan	$	607.6	$	612.1
9.25% senior subordinated notes		309.0		310.1
8.625% senior subordinated notes		450.0		450.0
Other		3.6		3.6

		1,370.2		1,375.8
Less current portion		6.3		6.3

	$	1,363.9	$	1,369.5


	February 8, 2005		January 30, 2005
Short-term borrowings:
Revolver	$	91.4	$	13.3

Long-term debt:
Term A Loan		450.0		—
Term B Loan		150.0		607.6
9.25% senior subordinated notes		2.6		309.0
6.75% senior subordinated notes		250.0		—

	$	852.6	$	916.6


	Consumer Products			Pet Products			Corporate (a)			Total Company
Accrued termination and severance costs - May 2, 2004	$	4.9		$	0.1		$	—		$	5.0
Termination and severance costs incurred		0.1			—			1.7			1.8
Amounts utilized		(1.3	)		(0.1	)		—			(1.4	)

Accrued termination and severance costs - August 1, 2004		3.7			—			1.7			5.4

Termination and severance costs incurred		0.2			—			0.9			1.1
Amounts utilized		(2.0	)		—			(0.8	)		(2.8	)

Accrued termination and severance costs - October 31, 2004		1.9			—			1.8			3.7

Termination and severance costs incurred		0.6			0.3			—			0.9
Amounts utilized		(0.2	)		(0.3	)		(0.1	)		(0.6	)

Accrued termination and severance costs - January 30, 2005	$	2.3		$	—		$	1.7		$	4.0


	Payments due by period (In millions)
	Total		Less than 1 year		1 - 3 years		3 - 5 years		More than 5 years
Long-term Debt	$	1,306.2	$	1.4	$	31.5	$	76.5	$	1,196.8
Capital Lease Obligations		—		—		—		—		—
Operating Leases		338.7		59.9		100.9		78.2		99.7
Purchase Obligations (1)		1,218.7		390.0		372.1		302.9		153.7
Other Long-term Liabilities Reflected on the Balance Sheet		304.9		—		47.2		38.4		219.3

Total Contractual Obligations	$	3,168.5	$	451.3	$	551.7	$	496.0	$	1,669.5


	Maturity
	Remainder of Fiscal 2005			Fiscal 2006			Fiscal 2007			Fiscal 2008			Fiscal 2009			After Fiscal 2009			Total			Fair Value
	($ in millions)
Interest Rate Risk:
Debt
Fixed Rate	$	0.2		$	0.2		$	0.2		$	0.2		$	0.2		$	705.3		$	706.2		$	761.0
Average Interest Rate		5.02	%		5.67	%		5.74	%		6.61	%		6.61	%		7.96	%		7.95	%
Variable Rate	$	—		$	1.5		$	12.8		$	24.0		$	35.3		$	526.5		$	600.0		$	600.0
Average Interest Rate		—			4.27	%		4.27	%		4.27	%		4.27	%		4.27	%		4.27	%

Interest Rate Swaps
Notional Amount	$	—		$	—		$	300.0		$	—		$	—		$	—		$	300.0		$	2.9
Average Rate Receivable		—			—			2.71	%		—			—			—			2.71	%
Average Rate Payable		—			—			2.51	%		—			—			—			2.51	%


	Soybean Meal (Short Tons)			Soybean Oil (Pounds)			Corn (Bushels)			Hard Wheat (Bushels)			Soft Wheat (Bushels)
Futures Contracts
Contract Volumes		63,900			8,820,000			5,100,000			1,190,000			65,000
Weighted Average Price	$	173.69		$	0.22		$	2.38		$	3.44		$	3.40
Contract Amount ($ in Millions)	$	11.1		$	1.9		$	12.2		$	4.1		$	0.2
Fair Value ($ in Millions)	$	(1.0	)	$	(0.2	)	$	(1.1	)	$	(0.3	)	$	—

Options
*Calls (Long)*
Contract Volumes		—			—			250,000			—			—
Weighted Average Strike Price	$	—		$	—		$	0.14		$	—		$	—
Weighted Average Price Paid	$	—		$	—		$	0.14		$	—		$	—
Fair Value ($ in Millions)	$	—		$	—		$	—		$	—		$	—

*Puts (Written)*
Contract Volumes		—			—			385,000			—			—
Weighted Average Strike Price	$	—		$	—		$	0.10		$	—		$	—
Weighted Average Price Received	$	—		$	—		$	0.25		$	—		$	—
Fair Value ($ in Millions)	$	—		$	—		$	(0.1	)	$	—		$	—


Exhibit Number		Description
4.1		Third Supplemental Indenture among Del Monte Corporation, the guarantors party thereto and Deutsche Bank Trust Company Americas, as Trustee, dated January 24, 2005 (incorporated by reference to Exhibit 4.1 to a Current Report on Form 8-K as filed on January 25, 2005)

4.2		Indenture, dated as of February 8, 2005, among Del Monte Corporation, Del Monte Foods Company, Mike Mac IHC, Inc., Star-Kist Samoa, Inc., Marine Trading Pacific, Inc., Star-Kist Mauritius, Inc. and Deutsche Bank Trust Company Americas, as trustee. (incorporated by reference to Exhibit 4.1 to a Current Report on Form 8-K as filed on February 11, 2005 (the “February 2005 Form 8-K))

4.3		Form of 6³/4% Senior Subordinated Note due 2015. (incorporated by reference to Exhibit 4.2 to the February 2005 Form 8-K)

4.4		Registration Rights Agreement, dated as of February 8, 2005, among Del Monte Corporation, Del Monte Foods Company, Mike Mac IHC, Inc., Star-Kist Samoa, Inc., Marine Trading Pacific, Inc., Star-Kist Mauritius, Inc., and Morgan Stanley & Co. Incorporated, Banc of Americas Securities LLC, Lehman Brothers Inc., and J.P. Morgan Securities, Inc. (incorporated by reference to Exhibit 4.3 to the February 2005 Form 8-K)

10.1		Third Amendment to Employment Agreement by and between Del Monte Foods Company and Richard G. Wolford, executed as of November 11, 2004. (incorporated by reference to Exhibit 10.1 to a Current Report on Form 8-K as filed on November 17, 2004 (the “November 2004 Form 8-K”) **

10.2		Employment Agreement by and between Del Monte Corporation and David L. Meyers, executed as of November 11, 2004. (incorporated by reference to Exhibit 10.2 to the November 2004 Form 8-K) **

10.3		Employment Agreement by and between Del Monte Corporation and Nils Lommerin, executed as of November 11, 2004. (incorporated by reference to Exhibit 10.3 to the November 2004 Form 8-K) **

10.4		Employment Agreement by and between Del Monte Corporation and Marc D. Haberman, executed as of November 11, 2004. (incorporated by reference to Exhibit 10.4 to the November 2004 Form 8-K) **

10.5		Employment Agreement by and between Del Monte Corporation and Todd Lachman, executed as of November 11, 2004. (incorporated by reference to Exhibit 10.5 to the November 2004 Form 8-K) **

10.6		Form of Del Monte Foods Company 2002 Stock Incentive Plan Stand-Alone Stock Appreciation Right Agreement, adopted as of December 7, 2004. (incorporated by reference to Exhibit 10.1 to a Current Report on Form 8-K as filed on December 10, 2004) **

10.7		Del Monte Corporation Additional Benefits Plan, effective January 1, 2005. (incorporated by reference to Exhibit 10.1 to a Current Report on Form 8-K as filed on December 21, 2004) **

10.8		Del Monte Foods Company 2003 Non-Employee Director Deferred Compensation Plan, as amended on December 16, 2004. (incorporated by reference to Exhibit 10.1 to a Current Report on Form 8-K as filed on December 21, 2004 (the “December 2004 Form 8-K”)) **

10.9		Del Monte Foods Company 2005 Non-Employee Director Deferred Compensation Plan, adopted as of December 16, 2004. (incorporated by reference to Exhibit 10.2 to the December 2004 Form 8-K) **


10.10		Del Monte Foods Company 2005 Non-Employee Director Deferred Compensation Plan – Form of Plan Agreement – 2005. (incorporated by reference to Exhibit 10.3 to the December 2004 Form 8-K) **

10.11		Form of Del Monte Foods Company Performance Shares Agreement, adopted as of January 20, 2005 (incorporated by reference to Exhibit 10.1 to a Current Report on Form 8-K as filed on January 26, 2005) **

10.12		Credit Agreement, dated as of February 8, 2005, among Del Monte Corporation, as borrower, Del Monte Foods Company, as guarantor, certain lenders, Morgan Stanley Senior Funding, Inc., as Syndication Agent, JPMorgan Chase Bank, N.A., Harris Trust and Savings Bank and Suntrust Bank, as Co-Documentation Agents, Banc of America Securities LLC, Morgan Stanley Senior Funding Inc. and JPMorgan Securities, Inc. as Joint Lead Arrangers and Joint Book Managers and Bank of America, N.A., as Administrative Agent. (incorporated by reference to Exhibit 10.1 to the February 2005 Form 8-K)

10.13		Security Agreement, dated as of February 8, 2005, among Del Monte Corporation, Del Monte Foods Company, Mike Mac IHC, Inc., Star-Kist Samoa, Inc., Marine Trading Pacific, Inc., Star-Kist Mauritius, Inc. and Bank of America, N.A., as Administrative Agent. (incorporated by reference to Exhibit 10.2 to the February 2005 Form 8-K)

10.14		Subsidiary Guaranty, dated as of February 8, 2005, by Mike Mac IHC, Inc., Star-Kist Samoa, Inc., Marine Trading Pacific, Inc. and Star-Kist Mauritius, Inc. in favor of the Secured Parties named therein (incorporated by reference to Exhibit 10.3 to the February 2005 Form 8-K)

*10.15		Placement Agreement for Del Monte Corporation 6³/4% Senior Subordinated Notes Due 2015, dated as of January 25, 2005

*31.1		Certification of the Chief Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

*31.2		Certification of the Chief Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

*32.1		Certification of the Chief Executive Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*32.2		Certification of the Chief Financial Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


2006	$	1.7
2007		12.9
2008		24.2
2009		35.4
2010		46.7


	Three Months Ended
	January 30, 2005			January 25, 2004			Change			% Change
	(In millions, except percentages)
Operating Income:
Consumer Products	$	74.2		$	78.7		$	(4.5	)	(5.7	)%
Pet Products		37.8			44.4			(6.6	)	(14.9	)%
Corporate (a)		(7.6	)		(8.0	)		0.4		(5.0	)%

Total Company	$	104.4		$	115.1		$	(10.7	)	(9.3	)%


	Nine Months Ended
	January 30, 2005			January 25, 2004			Change			% Change
	(In millions, except percentages)
Operating Income:
Consumer Products	$	183.3		$	177.2		$	6.1		3.4	%
Pet Products		86.1			105.2			(19.1	)	(18.2	)%
Corporate (a)		(30.8	)		(24.3	)		(6.5	)	26.7	%

Total Company	$	238.6		$	258.1		$	(19.5	)	(7.6	)%


2006	$	1.7
2007		12.9
2008		24.2
2009		35.4
2010		46.7